Filed Pursuant to Rule 424(b)(2)

Registration No. 333-255716

 

PROSPECTUS SUPPLEMENT

(to Prospectus dated June 29, 2021)

 

Horizon Technology Finance Corporation

 

Up to $100,000,000

 

Common Stock

 

 

 

We have entered into an at market issuance sales agreement, dated August 2, 2021, or the Equity Distribution Agreement, with Goldman Sachs & Co. LLC, or Goldman Sachs, and B. Riley FBR, Inc., or FBR, relating to the shares of common stock offered by this prospectus. Our common stock is listed on the Nasdaq Global Select Market, or Nasdaq, under the symbol “HRZN”. The last reported sale price on the NYSE on July 30, 2021 was $17.13. The net asset value per share of our common stock at June 30, 2021 (the last date prior to the date of this prospectus supplement on which we determined net asset value) was $11.20.

 

We are a non-diversified, closed-end management investment company that has elected to be regulated as a business development company, or BDC, under the Investment Company Act of 1940, as amended. We are externally managed by Horizon Technology Finance Management LLC, a registered investment adviser under the Investment Advisers Act of 1940, as amended. Our investment objective is to maximize our investment portfolio’s total return by generating current income from the debt investments we make and capital appreciation from the warrants we receive when making such debt investments. Substantially all of our investments consist of secured debt investments to development-stage companies in the technology, life science, healthcare information and services and sustainability industries.

 

The Equity Distribution Agreement provides that we may offer and sell up to $100.0 million worth of our common stock from time to time through Goldman Sachs and FBR, which we refer to as the “Agents”. Sales of our common stock, if any, under this prospectus supplement and the accompanying prospectus may be made in negotiated transactions or transactions that are deemed to be “at the market,” as defined in Rule 415 under the Securities Act of 1933, as amended, or the Securities Act, including sales made directly on the Nasdaq or similar securities exchange or sales made to or through a market maker other than on an exchange, at prices related to the prevailing market prices or at negotiated prices.

 

The Agents will receive a commission from us of 1.75% of the gross sales price of any shares of our common stock sold through the Agents under the Equity Distribution Agreement. The Agents are not required to sell any specific number or dollar amount of common stock, but will use their commercially reasonable efforts consistent with their sales and trading practices to sell the shares of our common stock offered by this prospectus supplement and the accompanying prospectus. See “Plan of Distribution” in this prospectus supplement. The sales price per share of our common stock offered by this prospectus supplement and the accompanying prospectus, less the Agents’ commission, will not be less than the net asset value per share of our common stock at the time of such sale.

 

Investing in our common stock should be considered highly speculative, and involves a high degree of risk including the risk of a substantial loss of investment and the risk of leverage and dilution. Before purchasing any shares of our common stock, you should read the discussion of the principal risks of investing in our securities, which are summarized in “Risk Factors” in this prospectus supplement, in the accompanying prospectus, in our most recent Annual Report on Form 10-K and in our most recent Quarterly Report on Form 10-Q, in any of our other filings with the Securities and Exchange Commission, and in any free writing prospectus to read about risks that you should consider before investing in our common stock, including the risk of leverage.

 

This prospectus supplement, the accompanying prospectus, and any free writing prospectus contain important information you should know before investing in our common stock and should be retained for future reference. We file annual, quarterly and current reports, proxy statements and other information about us with the Securities and Exchange Commission, or SEC. We maintain a website at www.horizontechfinance.com and intend to make all of the foregoing information available, free of charge, on or through our website. You may also obtain such information by contacting us at 312 Farmington Avenue, Farmington, Connecticut 06032, or by calling us collect at (860) 676-8654. The SEC maintains a website at www.sec.gov where such information is available without charge. Information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus supplement or the accompanying prospectus, and you should not consider information contained on our website to be part of this prospectus supplement, the accompanying prospectus, or any free writing prospectus.

 

Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

Goldman Sachs & Co. LLC B. Riley FBR

 

Prospectus supplement dated August 2, 2021

 

 

 

 

You should rely only on the information contained in this prospectus supplement, the accompanying prospectus, any free writing prospectus, the documents incorporated by reference in this prospectus supplement and the accompanying prospectus, or any other information which we have referred you. Neither we nor Goldman Sachs or FBR has authorized any other person to provide you with different information from that contained in this prospectus supplement, the accompanying prospectus and in any free writing prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus supplement, the accompanying prospectus, or any free writing prospectus do not constitute an offer to sell, or a solicitation of an offer to buy, any shares of our common stock by any person in any jurisdiction where it is unlawful for that person to make such an offer or solicitation or to any person in any jurisdiction to whom it is unlawful to make such an offer or solicitation. The information contained in this prospectus supplement, the accompanying prospectus, and any free writing prospectus is complete and accurate only as of their respective dates, regardless of the time of their delivery or sale of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date.

 

This document is in two parts. The first part is this prospectus supplement, which describes the terms of this offering of common stock and also adds to and updates information contained in the accompanying prospectus. The second part is the accompanying prospectus, which provides more information about us, our common stock and related matters. To the extent the information contained in this prospectus supplement differs from the information contained in the accompanying prospectus, the information in this prospectus supplement shall control. You should read this prospectus supplement and the accompanying prospectus together with the additional information described under the heading “Available Information” in this prospectus supplement before investing in our common stock.

 

 

 

 

TABLE OF CONTENTS

 

Forward-Looking Statements S-1
PROSPECTUS SUPPLEMENT SUMMARY S-2
Our Company S-2
Company Information S-3
THE OFFERING S-4
FEES AND EXPENSES S-6
Stockholder Transaction Expenses S-6
RISK FACTORS S-9
USE OF PROCEEDS S-10
PLAN OF DISTRIBUTION S-11
LEGAL MATTERS S-12
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM S-12
INCORPORATION BY REFERENCE S-12
AVAILABLE INFORMATION S-13

 

    Page
About this Prospectus   ii
Prospectus Summary   1
Offerings   6
Fees and Expenses   8
Selected Consolidated Financial and Other Data   10
Risk Factors   11
Cautionary Note Regarding Forward-Looking Statements   12
Use of Proceeds   13
Price Range of Common Stock and Distributions   14
Management’s Discussion and Analysis of Financial Condition and Results of Operations   16
Senior Securities   17
Business   18
Portfolio Companies   19
Management   24
Certain Relationships and Related Transactions   25
Our Advisor   26
Investment Management and Administration Agreements   27
Control Persons and Principal Stockholders   28
Determination of Net Asset Value   29
Dividend Reinvestment Plan   31
Description of Our Securities   33
Description of Common Stock That We May Issue   34
Description of Preferred Stock That We May Issue   39
Description of Subscription Rights That We May Issue   40
Description of Debt Securities That We May Issue   41
Description of Warrants That We May Issue   51
Regulation   52
Brokerage Allocations and Other Practices   53
Plan of Distribution   54
Material U.S. Federal Income Tax Considerations   56
Custodian, Transfer Agent, Dividend Paying Agent and Registrar   64
Legal Matters   64
Independent Registered Public Accounting Firm   64
Incorporation by Reference   64
Available Information   65

 

i

 

 

Forward-Looking Statements

 

The matters discussed in this prospectus supplement, and the accompanying prospectus and any free writing prospectus, including the documents we incorporate by reference therein, as well as in future oral and written statements by management of Horizon Technology Finance Corporation that are forward-looking statements are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “ believes,” “estimates,” “predicts,” “potential” or “continue” or the negatives thereof or other variations thereon or comparable terminology. Important assumptions include our ability to originate new investments, achieve certain margins and levels of profitability, the availability of additional capital, and the ability to maintain certain debt to asset ratios. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this prospectus supplement and the accompanying prospectus should not be regarded as a representation by us that our plans or objectives will be achieved. The forward-looking statements contained in this prospectus supplement, the accompanying prospectus, and any free writing prospectus include statements as to:

 

·our future operating results, including the performance of our existing debt investments, warrants and other investments;
·the introduction, withdrawal, success and timing of business initiatives and strategies;
·general economic and political trends and other external factors, including the current COVID-19 pandemic;
·the relative and absolute investment performance and operations of our investment advisor, Horizon Technology Finance Management LLC, or the Advisor;
·the impact of increased competition;
·the impact of investments we intend to make and future acquisitions and divestitures;
·the unfavorable resolution of legal proceedings;
·our business prospects and the prospects of our portfolio companies, including our and their ability to achieve our respective objectives as a result of the current COVID-19 pandemic;
·the impact, extent and timing of technological changes and the adequacy of intellectual property protection;
·our regulatory structure and tax status;
·our ability to qualify and maintain qualification as a regulated investment company, or RIC, and as a business development company, or BDC;
·the adequacy of our cash resources and working capital;
·the timing of cash flows, if any, from the operations of our portfolio companies;
·the impact of interest rate volatility on our results, particularly if we use leverage as part of our investment strategy;
·the ability of our portfolio companies to achieve their objective;
·the impact of legislative and regulatory actions and reforms and regulatory supervisory or enforcement actions of government agencies relating to us or our Advisor;
·the impact of the Small Business Credit Availability Act, or SBCAA, on our operations and the BDC industry;
·our contractual arrangements and relationships with third parties;
·our ability to access capital and any future financings by us;
·the ability of our Advisor to attract and retain highly talented professionals;
·the impact of changes to tax legislation and, generally, our tax position; and
·our ability to fund unfunded commitments, including unfunded commitments.

 

For a discussion of factors that could cause our actual results to differ from forward-looking statements contained in this prospectus supplement and the accompanying prospectus, please see the discussion under “Risk Factors” in this prospectus supplement and in the accompanying prospectus. You should not place undue reliance on these forward-looking statements. The forward-looking statements made in this prospectus supplement, including the documents that we incorporate by reference herein, and the accompanying prospectus and any free writing prospectus, including the documents we incorporate by reference therein, relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances occurring after the date of this prospectus.

 

S-1

 

 

PROSPECTUS SUPPLEMENT SUMMARY

 

The following summary highlights some of the information included elsewhere, or incorporated by reference, in this prospectus supplement or the accompanying prospectus. It is not complete and may not contain all the information that you may want to consider before making any investment decision regarding the common stock offered hereby. To understand the terms of the common stock offered hereby before making any investment decision, you should carefully read this entire prospectus supplement and the accompanying prospectus, including the documents incorporated by reference herein or therein, and any free writing prospectus related to the offering of common stock, including “Risk Factors,” “Selected Consolidated Financial and Other Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Financial Statements” as well as the documents identified in the section titled “Available Information” in this prospectus supplement. .

 

In this Prospectus Supplement, except where the context suggests otherwise, the terms:

 

  “we,” “us,” “our,” “the Company” and “Horizon Technology Finance” refer to Horizon Technology Finance Corporation, a Delaware corporation, and its consolidated subsidiaries;

 

  The “Advisor” and the “Administrator” refer to Horizon Technology Finance Management LLC, a Delaware limited liability company;

 

  “Key” refers to KeyBank National Association and “Key Facility” refers to the revolving credit facility with Key;

 

  “NYL Noteholders” refers to several entities owned or affiliated with New York Life Insurance Company and “NYL Facility” refers to the credit facility where the notes are issued to the NYL Noteholders;

 

  “Credit Facilities” refers to collectively the Key Facility and the NYL Facility;

 

  “2026 Notes” or “Debt Securities” refers to the $57.5 million aggregate principal amount of our 4.875% unsecured notes due 2026, which were issued by us in March 2021;

 

  “2019-1 Securitization” refers to the $160.0 million securitization of secured loans we completed on August 13, 2019;

 

  “Asset-Backed Notes” refers to $100.0 million in aggregate principal amount of fixed rate asset-backed notes that were issued in conjunction with the 2019-1 Securitization; and

 

Our Company

 

We are a specialty finance company that lends to and invests in development-stage companies in the technology, life science, healthcare information and services and sustainability industries, which we refer to as our “Target Industries.” Our investment objective is to maximize our investment portfolio’s total return by generating current income from the debt investments we make and capital appreciation from the warrants we receive when making such debt investments. We are focused on making secured debt investments, which we refer to as “Venture Loans,” to venture capital and private equity backed companies and publicly traded companies in our Target Industries, which we refer to as “Venture Lending.” Our debt investments are typically secured by first liens or first liens behind a secured revolving line of credit, or collectively, “Senior Term Loans.” Venture Lending is typically characterized by (1) the making of a secured debt investment after a venture capital or equity investment in the portfolio company has been made, which investment provides a source of cash to fund the portfolio company’s debt service obligations under the Venture Loan, (2) the senior priority of the Venture Loan which requires repayment of the Venture Loan prior to the equity investors realizing a return on their capital, (3) the amortization of the Venture Loan and (4) the lender’s receipt of warrants or other success fees with the making of the Venture Loan.

 

S-2

 

 

We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company, or BDC, under the Investment Company Act of 1940, as amended, or the 1940 Act. In addition, for U.S. federal income tax purposes, we have elected to be treated as a regulated investment company, or RIC, under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code. As a BDC, we are required to comply with regulatory requirements, including limitations on our use of debt. We are permitted to, and expect to, finance our investments through borrowings. Under Section 61(a)(2) of the 1940 Act we have received approval from our stockholders to reduce our asset coverage requirement from 200% to 150%. The amount of leverage that we may employ will depend on our assessment of market conditions and other factors at the time of any proposed borrowing. As a RIC, we generally are not subject to pay corporate-level income taxes on our investment company taxable income, determined without regard to any deductions for dividends paid, and our net capital gain that we distribute as dividends for U.S. federal income tax purposes to our stockholders as long as we meet certain source-of-income, distribution, asset diversification and other requirements.

 

We are externally managed and advised by our Advisor. Our Advisor manages our day-to-day operations and also provides all administrative services necessary for us to operate.

 

Company Information

 

Our administrative and executive offices and those of our Advisor are located at 312 Farmington Avenue, Farmington, Connecticut 06032, and our telephone number is (860) 676-8654. Our corporate website is located at www.horizontechfinance.com. Information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus supplement or the accompanying prospectus, and you should not consider any such information contained to be part of this prospectus supplement or the accompanying prospectus.

 

S-3

 

 

THE OFFERING

 

Common stock offered by us $100.0 million of shares
   
Common stock outstanding prior to this offering 20,346,094 shares
   
Manner of offering “At the market” offering that may be made from time to time through Goldman Sachs and FBR, as sales agents, using commercially reasonable efforts. See “Plan of Distribution” in this prospectus supplement.
   
Use of proceeds We intend to use substantially all of the net proceeds from this offering to make investments in development-stage companies in accordance with our investment objective and strategies described in this prospectus supplement, the accompanying prospectus, and the documents incorporated by reference, and for general corporate purposes. We may also use a portion of the net proceeds to reduce any of our outstanding borrowings. Pending such use, we will invest the net proceeds primarily in high quality, short-term debt securities consistent with our BDC election and our election to be taxed as a RIC.
   
  See “Use of Proceeds” in this prospectus supplement for more information.
   
Distributions We intend to continue to pay monthly distributions to our stockholders out of assets legally available for distribution. Our distributions, if any, will be determined by our board of directors, or the Board. Our ability to declare distributions depends on our earnings, our overall financial condition (including our liquidity position), maintenance of RIC status and such other factors as our Board may deem relevant from time to time.
   
  To the extent our taxable earnings fall below the total amount of our distributions for any given fiscal year, a portion of those distributions may be deemed to be a return of capital to our common stockholders for U.S. federal income tax purposes.
   
  Thus, the source of a distribution to our stockholders may be the original capital invested by the stockholder rather than our income or gains. Stockholders should read any written disclosure accompanying a distribution payment carefully and should not assume that the source of any distribution is our ordinary income or gains.

 

S-4

 

 

Dividend Reinvestment Plan We have adopted a dividend reinvestment plan, or DRIP, for our stockholders. The DRIP is an “opt out” DRIP. As a result, distributions to our stockholders are automatically reinvested in additional shares of our common stock, unless a stockholder specifically “opts out” of the DRIP so as to receive cash distributions. Stockholders who receive distributions in the form of stock will generally be subject to the same federal, state and local tax consequences as stockholders who elect to receive their distributions in cash. See “Dividend Reinvestment Plan” in accompanying prospectus.
   
Taxation We have elected to be treated as a RIC. Accordingly, we generally will not incur corporate-level income taxes on any investment company taxable income determined without regard to any deductions for dividends paid and net capital gains that we distribute as dividends for U.S. federal income tax purposes to our stockholders. To maintain RIC tax treatment, we must meet specified source-of-income and asset diversification requirements and distribute annually an amount generally equal to at least 90% of our investment company taxable income, determined without regard to any deduction for dividends paid.
   
Listing Our common stock is traded on Nasdaq under the symbol “HRZN”.

 

S-5

 

 

FEES AND EXPENSES

 

The following table is intended to assist you in understanding the costs and expenses that an investor in shares of our common stock will bear directly or indirectly. However, we caution you that some of the percentages indicated in the table below are estimates and may vary. The following table and example should not be considered a representation of our future expenses. Actual expenses may be greater or less than shown. Except where the context suggests otherwise, whenever this prospectus supplement and the accompanying prospectus contain a reference to fees or expenses paid by “you” or “us” or that “we” will pay fees or expenses, stockholders will indirectly bear such fees or expenses as investors in the Company.

 

Stockholder Transaction Expenses

 

Sales Load (as a percentage of offering price)   1.75%(1)
Offering Expenses (as a percentage of offering price)   0.25%(2)
Dividend Reinvestment Plan Fees   (3)
Total Stockholder Transaction Expenses (as a percentage of offering price)   2.00%
Annual Expenses (as a Percentage of Net Assets Attributable to Common Stock)(4)     
Base Management Fee   4.03%(5)
Incentive Fee Payable Under the Investment Management Agreement   2.79%(6)
Interest Payments on Borrowed Funds   6.18%(7)
Other Expenses (estimated for the current fiscal year)   1.73%(8)
Acquired Fund Fees and Expenses   %(9)
Total Annual Expenses (estimated)   14.73%(5)(10)

 

(1)Represents the estimated commissions with respect to the shares sold by us in this offering.

 

(2)The offering expenses of this offering borne by us are estimated to be approximately $250,000.

 

(3)The expenses associated with the DRIP are included in “Other Expenses” in the table. See “Dividend Reinvestment Plan” in the accompanying prospectus.

 

(4)Net Assets Attributable to Common Stock equals estimated average net assets for the current fiscal year and is based on our net assets at June 30, 2021 and includes the net proceeds of the offering estimated to be received by the Company.

 

(5)Our base management fee under the Investment Management Agreement is based on our gross assets, less cash and cash equivalents, which includes assets acquired using leverage, including any leverage disclosed in the accompanying prospectus, and is payable monthly in arrears. The management fee referenced in the table above is based on our gross assets, less cash and cash equivalents, of $413 million as of June 30, 2021 and includes net proceeds of the offering, after the net proceeds have been invested in portfolio companies, and $103 million of assets estimated to be acquired in the current fiscal year using leverage. See “Investment Management and Administration Agreements — Investment Management Agreement” in the accompanying prospectus.

 

(6)Our incentive fee payable under the Investment Management Agreement consists of two parts:

 

The first part, which is payable quarterly in arrears, subject to a Fee Cap and Deferral Mechanism, equals 20% of the excess, if any, of our Pre-Incentive Fee Net Investment Income over a 1.75% quarterly (7% annualized) hurdle rate and a “catch-up” provision measured as of the end of each calendar quarter. Under this provision, in any calendar quarter, our Advisor receives no incentive fee until our net investment income equals the hurdle rate of 1.75% but then receives, as a “catch-up,” 100% of our Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate but is less than 2.1875%. The effect of this provision is that, if Pre-Incentive Fee Net Investment Income exceeds 2.1875% in any calendar quarter, our Advisor will receive 20% of our Pre-Incentive Fee Net Investment Income as if a hurdle rate did not apply. The first part of the incentive fee is computed and paid on income that may include interest that is accrued but not yet received in cash.

 

S-6

 

 

The second part of the incentive fee equals 20% of our Incentive Fee Capital Gains, if any. Incentive Fee Capital Gains are our realized capital gains on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees. The second part of the incentive fee is payable, in arrears, at the end of each calendar year (or upon termination of the Investment Management Agreement, as of the termination date). For a more detailed discussion of the calculation of this fee, see “Investment Management and Administration Agreements — Investment Management Agreement” in the accompanying prospectus.

 

The incentive payable to our Advisor represents our estimated annual expense incurred under the first part of the incentive fee payable under the Investment Management Agreement over the next twelve months. As of June 30, 2021, our cumulative realized capital gains and unrealized capital appreciation did not exceed our cumulative realized capital losses and unrealized capital depreciation. Given our strategy of investing primarily in Venture Loans, which are fixed-income assets, we believe it is unlikely that our cumulative realized capital gains and unrealized capital appreciation will exceed our cumulative realized capital losses and unrealized capital depreciation in the next twelve months. Consequently, we do not expect to incur any Incentive Fee Capital Gains during the next twelve months. As we cannot predict the occurrence of any capital gains from the portfolio, we have assumed no Incentive Fee Capital Gains.

 

(7)Interest payments on borrowed funds represent our estimated annual interest payments on borrowed funds based on current debt levels as adjusted for projected increases in debt levels over the next twelve months. We may issue additional debt securities pursuant to the registration statement of which this prospectus supplement forms a part. In the event we were to issue additional debt securities, our borrowing costs, and correspondingly our total annual expenses, including, in the case of such preferred stock, our base management fee as a percentage of our net assets attributable to common stock, would increase.

 

(8)“Other Expenses” includes our overhead expenses, including payments under the Administration Agreement, based on our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement. See “Investment Management and Administration Agreements — Administration Agreement” in the accompanying prospectus. “Other expenses” also includes the ongoing administrative expenses to the independent accountants and legal counsel of the Company and compensation of independent directors.

 

(9)Our stockholders indirectly bear the expenses of underlying funds or other investment vehicles that would be investment companies under Section 3(a) of the 1940 Act but for the exceptions to that definition provided for in Section 3(c)(1) and 3(c)(7) of the 1940 Act, or Acquired Funds, in which we invest.

 

Future fees and expenses for Acquired Funds may be substantially higher or lower because certain fees and expenses are based on performance of such Acquired Funds, which may fluctuate over time.

 

(10)“Total Annual Expenses” as a percentage of consolidated net assets attributable to common stock are higher than the total annual expenses percentage would be for a company that is not leveraged. We borrow money to leverage our net assets and increase our total assets. The SEC requires that the “Total Annual Expenses” percentage be calculated as a percentage of net assets (defined as total assets less indebtedness and after taking into account any incentive fees payable during the period), rather than the total assets, including assets that have been funded with borrowed monies.

 

Example

 

The following example demonstrates the projected dollar amount of total cumulative expenses that would be incurred over various periods with respect to a hypothetical investment in our common stock. This example and the expenses in the table above should not be considered a representation of our future expenses, and actual expenses (including the cost of debt, if any, and other expenses) may be greater or less than those shown. In calculating the following expense amounts, we have assumed that our annual operating expenses remain at the levels set forth in the table above.

 

S-7

 

 

   1 Year   3 Years   5 Years   10 Years 
You would pay the following expenses on a $1,000 investment, assuming a 5% annual return  $140.00   $381.00   $577.00   $923.00 

 

The example and the expenses in the tables above should not be considered a representation of our future expenses, and actual expenses may be greater or lesser than those shown.

 

While the example assumes, as required by the applicable rules of the SEC, a 5% annual return, our performance will vary and may result in a return greater or less than 5%. The incentive fee under the Investment Management Agreement is unlikely to be significant assuming a 5% annual return and is not included in the example. This illustration assumes that we will not realize any capital gains (computed net of all realized capital losses and unrealized capital depreciation) in any of the indicated time periods. If we achieve sufficient returns on our investments, including through the realization of capital gains, to trigger an incentive fee of a material amount, our distributions to our common stockholders and our expenses would likely be higher. If the 5% annual return were derived entirely from capital gains, you would pay expenses on a $1,000 investment of $124.00, $344.00, $530.00 and $881.00 over periods of one year, three years, five years and ten years, respectively. See “Investment Management and Administration Agreements — Investment Management Agreement — Examples of Incentive Fee Calculation” in the accompanying prospectus for additional information regarding the calculation of incentive fees.

 

In addition, while the example assumes reinvestment of all dividends and other distributions at net asset value, or NAV participants in our DRIP receive a number of shares of our common stock determined by dividing the total dollar amount of the distribution payable to a participant by the market price per share of our common stock at the close of trading on the valuation date for the distribution. This price may be at, above or below NAV. See “Dividend Reinvestment Plan” in the accompanying prospectus for additional information regarding our DRIP.

 

S-8

 

 

RISK FACTORS

 

Investing in our securities may be speculative and involves a high degree of risk. You should carefully consider the risk factors incorporated by reference from our most recent Annual Report on Form 10-K our most recent Quarterly Report on Form 10-Q and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K we file after the date of this prospectus supplement, and all other information contained or incorporated by reference into this prospectus supplement, the accompanying prospectus, and any free writing prospectus, as updated by our subsequent filings under the Exchange Act. Additional risks and uncertainties not presently known to us or not presently deemed material by us may also impair our operations and performance. Each of the risk factors could materially adversely affect our business, financial condition and results of operations. In such case, our NAV and the trading price of our securities could decline, and you may lose all or part of your investment.

 

S-9

 

 

USE OF PROCEEDS

 

Sales of our common stock, if any, under this prospectus supplement and the accompanying prospectus may be made in negotiated transactions that are deemed to be “at the market” as defined in Rule 415 under the Securities Act, including sales made directly on the Nasdaq or sales made to or through a market maker other than an exchange. There is no guarantee that there will be any sales of our common stock pursuant to this prospectus supplement and the accompanying prospectus. Actual sales, if any, of our common stock under this prospectus supplement and the accompanying prospectus may be less than as set forth in this paragraph. Assuming the sale of $100.0 million worth of shares of common stock on the Nasdaq, we estimate that the net proceeds of this offering will be approximately $97.8 million after deducting the estimated sales commission payable to the Sales Agents and our estimated offering expenses.

 

We expect to use the net proceeds from this offering to fund investments in debt securities in accordance with our investment objective and for other general corporate purposes.

 

We intend to seek to invest the net proceeds received in this offering as promptly as practicable after receipt of such proceeds consistent with our investment objective. We anticipate that substantially all of the net proceeds from any offering of our securities will be used as described above within three to six months, depending on market conditions. We anticipate that the remainder will be used for working capital and general corporate purposes, including potential payments or distributions to shareholders. Pending such use, we intend to invest a portion of the net proceeds of this offering in short-term investments, such as cash and cash equivalents, which we expect will earn yields substantially lower than the interest income that we anticipate receiving in respect of investments in accordance with our investment objective.

 

S-10

 

 

PLAN OF DISTRIBUTION

 

We have entered into an at market issuance sales agreement with Goldman Sachs & Co. LLC and B. Riley FBR, Inc. (which we collectively refer to as the “Agents”), under which we may offer and sell from time to time our common stock having an aggregate offering price of up to $100.0 million. The Agents may act as agent on our behalf or purchase shares of our common stock as principal.

 

Sales, if any, of common stock under the at market sales agreement may be made in ordinary brokers’ transactions, to or through a market maker, on or through the Nasdaq Global Select Market or any other market venue where the securities may be traded, in the over-the-counter market, in privately negotiated transactions, or through a combination of any such methods of sale. The Agents may also sell our common stock by any other method permitted by law.

 

The securities may be sold at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices.

 

We will designate the minimum amount of common stock to be sold through the sales agent, the time period during which sales are requested to be made, any limitation on the number of shares of common stock that may be sold in any one trading day and any minimum price below which sale may not be made. Subject to the terms and conditions of the at market issuance sales agreement, the Agents will use their commercially reasonable efforts consistent with their normal sales and trading practices to sell on our behalf all of the designated shares of common stock. We may instruct the Agents not to sell any common stock if the sales cannot be effected at or above the price designated by us in any such instruction. We or the Agents may suspend the offering of our common stock by notifying the other party.

 

The Agents will provide to us written confirmation no later than the opening of the trading day immediately following the trading day on which they have made sales under the at market issuance sales agreement. Each confirmation will include the number of shares of common stock sold on such day, the net sales proceeds and the compensation payable by us to the Agents. We will report at least quarterly the number of shares of common stock sold through the sales agent under the at market issuance sales agreement, the net proceeds to us (before expenses) and the compensation paid by us to the Agents in connection with the sales of the shares of common stock.

 

We will pay the Agents a commission of 1.75% of the gross sales price per share of common stock sold through the Agents under the at market issuance sales agreement. We have also agreed to reimburse the Agents for certain of their expenses.

 

Settlement of any sales of common stock will occur on second business day following the date on which such sales were made (or such earlier day as is industry practice for regular-way trading). There is no arrangement for funds to be received in an escrow, trust or similar arrangement. Sales of our common stock as contemplated in this prospectus supplement will be settled through the facilities of The Depository Trust Company or by such other means as we and the sales agents may agree.

 

The offering of our common stock pursuant to the equity distribution agreement will terminate upon the earlier of (i) the sale of all of our shares of common stock subject to the equity distribution agreement, or (ii) termination of the equity distribution agreement by us or by the Agents as provided therein.

 

In connection with the sale of the shares of common stock on our behalf, the Agents may be deemed to be “underwriters” within the meaning of the Securities Act, and the compensation paid to the Agents may be deemed to be underwriting commissions or discounts.

 

We have agreed to provide indemnification and contribution to the Agents against certain liabilities, including civil liabilities under the Securities Act.

 

S-11

 

 

LEGAL MATTERS

 

Certain legal matters regarding the shares of common stock offered by this prospectus supplement will be passed upon for us by Dechert LLP. Certain legal matters in connection with the shares of common stock offered hereby will be passed upon the Agents by Ropes & Gray LLP.

 

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

Our consolidated financial statements as of December 31, 2020 and December 31, 2019 and for each of the three years in the period ended December 31, 2020 have been incorporated by reference in this prospectus supplement and in the registration statement in reliance on the report of RSM US LLP, an independent registered public accounting firm, given on the authority of such firm as experts in accounting and auditing.

 

INCORPORATION BY REFERENCE

 

This prospectus supplement is part of a registration statement that we have filed with the SEC. Pursuant to the Small Business Credit Availability Act, we are allowed to “incorporate by reference” the information that we file with the SEC, which means that we can disclose important information to you by referring to those documents. The information incorporated by reference is considered to be part of this prospectus supplement, and later information that we file with the SEC will automatically update and supersede this information.

 

We incorporate by reference the documents listed below and any future filings (including those made after the date of the filing of the registration statement of which this prospectus is a part) we will make with the SEC under Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act until the termination of the offering of the securities covered by this prospectus. However, information “furnished” by us under Item 2.02 or Item 7.01 of Form 8-K or other information “furnished” to the SEC which is not deemed “filed” is not incorporated by reference:

 

·our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on March 2, 2021;
·our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021, filed with the SEC on April 27, 2021, and ended June 30, 2021, filed with the SEC on July 27, 2021;
·our Definitive Proxy Statement on Schedule 14A, filed with the SEC on April 22, 2021;
·our Current Reports on Form 8-K (other than information furnished rather than filed) filed with the SEC on March 2, 2021, March 25, 2021, March 30, 2021, April 27, 2021, June 3, 2021 and June 23, 2021; and
·The description of our common stock referenced in our Registration Statement on Form 8-A (No. 001-36328), as filed with the SEC on March 3, 2014, including any amendment or report filed for the purpose of updating such description prior to the termination of the offering of the common stock registered hereby.

 

These documents may also be accessed on our website at www.horizontechfinance.com. Information contained in, or accessible through, our website is not part of this prospectus supplement.

 

You may request a copy of these filings (other than exhibits, unless the exhibits are specifically incorporated by reference into these documents) at no cost by writing or calling Investor Relations at the following address and telephone number.

 

Horizon Technology Finance Corporation
312 Farmington Avenue
Farmington, Connecticut 06032
(860) 676-8654

 

S-12

 

 

AVAILABLE INFORMATION

 

We have filed with the SEC a universal shelf registration statement on Form N-2, together with all amendments and related exhibits, under the Securities Act, with respect to our shares of common stock offered by this prospectus supplement and the accompanying prospectus. The registration statement contains additional information about us and our shares of common stock being offered by this prospectus supplement and the accompanying prospectus.

 

We file with or submit to the SEC annual, quarterly and current periodic reports, proxy statements and other information meeting the informational requirements of the Exchange Act. The SEC maintains a website that contains reports, proxy and information statements and other information filed electronically by us with the SEC at www.sec.gov. Copies of these reports, proxy and information statements and other information may be obtained, after paying a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov. We maintain a website at www.horizontechfinance.com and make all of our annual, quarterly and current reports, proxy statements and other publicly filed information available, free of charge, on or through our website. This information is also available, free of charge, by contacting us at 312 Farmington Avenue, Farmington, Connecticut 06032, Attention: Investor Relations, or by calling us collect at (860) 676-8654. Information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus supplement or the accompanying prospectus, and you should not consider such information to be part of this prospectus supplement or the accompanying prospectus.

 

S-13

 

 

$350,000,000 

Horizon Technology Finance Corporation

 

Common Stock
Preferred Stock
Subscription Rights
Debt Securities
Warrants

 

We are a non-diversified closed-end management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). We are externally managed by Horizon Technology Finance Management LLC, a registered investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). Our investment objective is to maximize our investment portfolio’s total return by generating current income from the debt investments we make and capital appreciation from the warrants we receive when making such debt investments. We make secured debt investments to development stage companies in the technology, life science, healthcare information and services and sustainability industries.

 

We may offer, from time to time, in one or more offerings or series, together or separately, up to $350,000,000 of our common stock, preferred stock, subscription rights, debt securities or warrants representing rights to purchase shares of our common stock, preferred stock or debt securities, which we refer to, collectively, as the “securities.”

 

We may sell our securities through underwriters or dealers, “at-the-market” to or through a market maker into an existing trading market or otherwise directly to one or more purchasers or through agents or through a combination of methods of sale. The identities of such underwriters, dealers, market makers or agents, as the case may be, will be described in one or more supplements to this prospectus. The securities may be offered at prices and on terms to be described in one or more supplements to this prospectus. In the event we offer common stock or warrants or rights to acquire such common stock hereunder, the offering price per share of our common stock less any underwriting commissions or discounts will not be less than the net asset value per share of our common stock at the time we make the offering except (1) in connection with the exercise of certain warrants, options or rights whose issuance has been approved by our stockholders at an exercise or conversion price not less than the market value of our common stock at the date of issuance (or, if no such market value exists, the net asset value per share of our common stock as of such date); (2) to the extent such an offer or sale is approved by our stockholders and by our board of directors (our “Board”); or (3) under such other circumstances as may be permitted under the 1940 Act or by the Securities and Exchange Commission (the “SEC”).

 

Our common stock is listed on The Nasdaq Global Select Market (“Nasdaq”) under the symbol “HRZN”. In addition, our 4.875% Notes due 2026 trade on the New York Stock Exchange under the ticker symbol “HTFB”. On June 28, 2021, the last reported sale price of a share of our common stock on Nasdaq was $17.24. The net asset value per share of our common stock at March 31, 2021 (the last date prior to the date of this prospectus on which we determined net asset value) was $11.07.

 

Shares of closed-end investment companies, including BDCs, frequently trade at a discount to their net asset value. If our shares trade at a discount to net asset value, it may increase the risk of loss for purchasers in an offering made pursuant to this prospectus or any related prospectus supplement. You should review carefully the risks and uncertainties, including the risk of leverage and dilution, described in the section titled “Risk Factors” beginning on page 11 of this prospectus or otherwise incorporated by reference herein and included in, or incorporated by reference into, the applicable prospectus supplement and in any free writing prospectuses we have authorized for use in connection with a specific offering, and under similar headings in the other documents that are incorporated by reference into this prospectus before investing in our securities.

 

This prospectus and any accompanying prospectus supplement contain important information you should know before investing in our securities and should be retained for future reference. We file annual, quarterly and current reports, proxy statements and other information about us with the SEC. We maintain a website at www.horizontechfinance.com and intend to make all of the foregoing information available, free of charge, on or through our website. You may also obtain such information by contacting us at 312 Farmington Avenue, Farmington, Connecticut 06032, or by calling us collect at (860) 676-8654. The SEC maintains a website at www.sec.gov where such information is available without charge. Information contained on our website is not incorporated by reference into this prospectus, and you should not consider information contained on our website to be part of this prospectus.

 

The individual securities in which we invest will not be rated by any rating agency. If they were, they would be rated as below investment grade or “junk.” Indebtedness of below investment grade quality has predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal.

 

Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

This prospectus may not be used to consummate sales of securities unless accompanied by a prospectus supplement.

 

 

 

The date of this prospectus is          , 2021

 

 

You should rely only on the information contained in this prospectus or any accompanying supplement to this prospectus. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. This prospectus and any accompanying prospectus supplement do not constitute an offer to sell or a solicitation of any offer to buy any security other than the registered securities to which they relate. You should assume that the information in this prospectus is accurate only as of the date of this prospectus. Our business, financial condition and prospects may have changed since that date. We will update this prospectus to reflect material changes to the information contained herein.

 

TABLE OF CONTENTS

 

    Page
About this Prospectus   ii
Prospectus Summary   1
Offerings   6
Fees and Expenses   8
Selected Consolidated Financial and Other Data   10
Risk Factors   11
Cautionary Note Regarding Forward-Looking Statements   12
Use of Proceeds   13
Price Range of Common Stock and Distributions   14
Management’s Discussion and Analysis of Financial Condition and Results of Operations   16
Senior Securities   17
Business   18
Portfolio Companies   19
Management   24
Certain Relationships and Related Transactions   25
Our Advisor   26
Investment Management and Administration Agreements   27
Control Persons and Principal Stockholders   28
Determination of Net Asset Value   29
Dividend Reinvestment Plan   31
Description of Our Securities   33
Description of Common Stock That We May Issue   34
Description of Preferred Stock That We May Issue   39
Description of Subscription Rights That We May Issue   40
Description of Debt Securities That We May Issue   41
Description of Warrants That We May Issue   51
Regulation   52
Brokerage Allocations and Other Practices   53
Plan of Distribution   54
Material U.S. Federal Income Tax Considerations   56
Custodian, Transfer Agent, Dividend Paying Agent and Registrar   64
Legal Matters   64
Independent Registered Public Accounting Firm   64
Incorporation by Reference   64
Available Information   65

i 

 

ABOUT THIS PROSPECTUS

 

This prospectus is part of a registration statement that we have filed with the Securities and Exchange Commission, using the “shelf” registration process. Under the shelf registration process, we may offer, from time to time, up to $350,000,000 of our common stock, preferred stock, subscription rights, debt securities or warrants representing rights to purchase shares of our common stock, preferred stock or debt securities on terms to be determined at the time of the offering.

 

This prospectus provides you with a general description of the securities that we may offer. Each time we use this prospectus to offer securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. We may also authorize one or more free writing prospectuses to be provided to you that may contain material information relating to these offerings. In a prospectus supplement or free writing prospectus, we may also add, update, or change any of the information contained in this prospectus or in the documents we have incorporated by reference into this prospectus. This prospectus, together with the applicable prospectus supplement, any related free writing prospectus, and the documents incorporated by reference into this prospectus and the applicable prospectus supplement, will include all material information relating to the applicable offering. Before buying any of the securities being offered, please carefully read this prospectus, any accompanying prospectus supplement, any free writing prospectus and the documents incorporated by reference into this prospectus and any accompanying prospectus supplement.

 

This prospectus may contain estimates and information concerning our industry, including market size and growth rates of the markets in which we participate, that are based on industry publications and other third-party reports. This information involves many assumptions and limitations, and you are cautioned not to give undue weight to these estimates. We have not independently verified the accuracy or completeness of the data contained in these industry publications and reports. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described or referenced in the section titled “Risk Factors,” that could cause results to differ materially from those expressed in these publications and reports.

 

This prospectus includes summaries of certain provisions contained in some of the documents described in this prospectus, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed or incorporated by reference, or will be filed or incorporated by reference, as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described in the section titled “Available Information.”

 

You should rely only on the information included or incorporated by reference into this prospectus, any prospectus supplement or in any free writing prospectus prepared by us or on our behalf or to which we have referred you. We have not authorized any dealer, salesperson or other person to provide you with different information or to make representations as to matters not stated in this prospectus, in any accompanying prospectus supplement or in any free writing prospectus prepared by us or on our behalf or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus, any accompanying prospectus supplement and any free writing prospectus prepared by us or on our behalf or to which we have referred you do not constitute an offer to sell, or a solicitation of an offer to buy, any securities by any person in any jurisdiction where it is unlawful for that person to make such an offer or solicitation or to any person in any jurisdiction to whom it is unlawful to make such an offer or solicitation. You should not assume that the information included or incorporated by reference into this prospectus, in any accompanying prospectus supplement or in any such free writing prospectus is accurate as of any date other than their respective dates. Our financial condition, results of operations and prospects may have changed since any such date. To the extent required by law, we will amend or supplement the information contained or incorporated by reference into this prospectus and any accompanying prospectus supplement to reflect any material changes to such information subsequent to the date of the prospectus and any accompanying prospectus supplement and prior to the completion of any offering pursuant to the prospectus and any accompanying prospectus supplement.

ii 

 

PROSPECTUS SUMMARY

 

This summary highlights some of the information included elsewhere in this prospectus or incorporated by reference. It is not complete and may not contain all of the information that you should consider before making your investment decision. You should carefully read the entire prospectus, the applicable prospectus supplement, and any related free writing prospectus, including the risks of investing in our securities discussed in the section titled “Risk Factors” in the applicable prospectus supplement and any related free writing prospectus, and under similar headings in the other documents that are incorporated by reference into this prospectus and the applicable prospectus supplement. Before making your investment decision, you should also carefully read the information incorporated by reference into this prospectus, including our financial statements and related notes, and the exhibits to the registration statement of which this prospectus is a part. Any yield information contained or incorporated by reference into this prospectus related to investments in our investment portfolio is not intended to approximate a return on your investment in us and does not take into account other aspects of our business, including our operating and other expenses, or other costs incurred by you in connection with your investment in us

 

In this prospectus, except where the context suggests otherwise, the terms:

 

  “we,” “us,” “our,” “the Company” and “Horizon Technology Finance” refer to Horizon Technology Finance Corporation, a Delaware corporation, and its consolidated subsidiaries;
  The “Advisor” and the “Administrator” refer to Horizon Technology Finance Management LLC, a Delaware limited liability company;
  “Key” refers to KeyBank National Association and “Key Facility” refers to the revolving credit facility with Key;
  “NYL Noteholders” refers to several entities owned or affiliated with New York Life Insurance Company and  “NYL Facility” refers to the credit facility where the notes are issued to the NYL Noteholders;
  “Credit Facilities” refers to collectively the Key Facility and the NYL Facility;
  “2026 Notes” or “Debt Securities” refers to the $57.5 million aggregate principal amount of our 4.875% unsecured notes due 2026, which were issued by us in March 2021; and
  “2019-1 Securitization” refers to the $160.0 million securitization of secured loans we completed on August 13, 2019.

 

Our company

 

We are a specialty finance company that lends to and invests in development-stage companies in the technology, life science, healthcare information and services and sustainability industries, which we refer to as our “Target Industries.” Our investment objective is to maximize our investment portfolio’s total return by generating current income from the debt investments we make and capital appreciation from the warrants we receive when making such debt investments. We are focused on making secured debt investments, which we refer to as “Venture Loans,” to venture capital and private equity backed companies and publicly traded companies in our Target Industries, which we refer to as “Venture Lending.” Our debt investments are typically secured by first liens or first liens behind a secured revolving line of credit, or collectively, “Senior Term Loans.” Venture Lending is typically characterized by (1) the making of a secured debt investment after a venture capital or equity investment in the portfolio company has been made, which investment provides a source of cash to fund the portfolio company’s debt service obligations under the Venture Loan, (2) the senior priority of the Venture Loan which requires repayment of the Venture Loan prior to the equity investors realizing a return on their capital, (3) the amortization of the Venture Loan and (4) the lender’s receipt of warrants or other success fees with the making of the Venture Loan.

 1

 

We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company, or BDC, under the Investment Company Act of 1940, as amended, or the 1940 Act. In addition, for U.S. federal income tax purposes, we have elected to be treated as a regulated investment company, or RIC, under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code. As a BDC, we are required to comply with regulatory requirements, including limitations on our use of debt. We are permitted to, and expect to, finance our investments through borrowings. Under Section 61(a)(2) of the 1940 Act we have received approval from our stockholders to reduce our asset coverage requirement from 200% to 150%. The amount of leverage that we may employ will depend on our assessment of market conditions and other factors at the time of any proposed borrowing. As a RIC, we generally are not subject to pay corporate-level income taxes on our investment company taxable income, determined without regard to any deductions for dividends paid, and our net capital gain that we distribute as dividends for U.S. federal income tax purposes to our stockholders as long as we meet certain source-of-income, distribution, asset diversification and other requirements.

 

We are externally managed and advised by our Advisor. Our Advisor manages our day-to-day operations and also provides all administrative services necessary for us to operate.

 

Our advisor

 

Our investment activities are managed by our Advisor, and we expect to continue to benefit from our Advisor’s ability to identify attractive investment opportunities, conduct diligence on and value prospective investments, negotiate investments and manage our portfolio of investments. In addition to the experience gained from the years that they have worked together both at our Advisor and prior to the formation of our Advisor, the members of our investment team have broad lending backgrounds, with substantial experience at a variety of commercial finance companies, technology banks and private debt funds, and have developed a broad network of contacts within the venture capital and private equity community. This network of contacts provides a principal source of investment opportunities.

 

Our Advisor is led by six senior managers including Robert D. Pomeroy, Jr., our Chief Executive Officer, Gerald A. Michaud, our President, Daniel R. Trolio, our Senior Vice President and Chief Financial Officer, John C. Bombara, our Senior Vice President, General Counsel and Chief Compliance Officer, Daniel S. Devorsetz, our Senior Vice President and Chief Investment Officer and Diane Earle, our Senior Vice President and Chief Credit Officer.

 

Our strategy

 

Our investment objective is to maximize our investment portfolio’s total return by generating current income from the loans we make and capital appreciation from the warrants we receive when making such debt investments. To further implement our business strategy, we expect our Advisor to continue to employ the following core strategies:

 

  Structured investments in the venture capital and private and public equity markets. We make loans to development-stage companies within our Target Industries typically in the form of secured loans. The secured debt structure provides a lower risk strategy, as compared to equity or unsecured debt investments, to participate in the emerging technology markets because the debt structures we typically utilize provide collateral against the downside risk of loss, provide return of capital in a much shorter timeframe through current-pay interest and amortization of principal and have a senior position to equity in the borrower’s capital structure in the case of insolvency, wind down or bankruptcy. Unlike venture capital and private equity investments, our investment returns and return of our capital do not require equity investment exits such as mergers and acquisitions or initial public offerings. Instead, we receive returns on our debt investments primarily through regularly scheduled payments of principal and interest and, if necessary, liquidation of the collateral supporting the debt investment upon a default. Only the potential gains from warrants depend upon equity investment exits.
  “Enterprise value” lending. We and our Advisor take an enterprise value approach to structuring and underwriting loans. Enterprise value includes the implied valuation based upon recent equity capital invested as well as the intrinsic value of the applicable portfolio company’s particular technology, service or customer base. We secure our lien position against the enterprise value of each portfolio company.
  Creative products with attractive risk-adjusted pricing. Each of our existing and prospective portfolio companies has its own unique funding needs for the capital provided from the proceeds of our Venture Loans. These funding needs include funds for additional development “runways”, funds to hire or retain sales staff or funds to invest in research and development in order to reach important technical milestones in advance of raising additional equity. Our loans include current-pay interest, commitment fees, end-of-term payments, or ETPs, pre-payment fees, success fees and non-utilization fees. We believe we have developed pricing tools, structuring techniques and valuation metrics that satisfy our portfolio companies’ financing requirements while mitigating risk and maximizing returns on our investments.

 2

 
  Opportunity for enhanced returns. To enhance our debt investment portfolio returns, in addition to interest and fees, we frequently obtain warrants to purchase the equity of our portfolio companies as additional consideration for making debt investments. The warrants we obtain generally include a “cashless exercise” provision to allow us to exercise these rights without requiring us to make any additional cash investment. Obtaining warrants in our portfolio companies has allowed us to participate in the equity appreciation of our portfolio companies, which we expect will enable us to generate higher returns for our investors.
  Direct origination. We originate transactions directly with technology, life science, healthcare information and services and sustainability companies. These transactions are referred to our Advisor from a number of sources, including referrals from, or direct solicitation of, venture capital and private equity firms, portfolio company management teams, legal firms, accounting firms, investment banks, portfolio company advisors and other lenders that represent companies within our Target Industries. Our Advisor has been the sole or lead originator in substantially all transactions in which the funds it manages have invested.
  Disciplined and balanced underwriting and portfolio management. We use a disciplined underwriting process that includes obtaining information validation from multiple sources, extensive knowledge of our Target Industries, comparable industry valuation metrics and sophisticated financial analysis related to development-stage companies. Our Advisor’s due diligence on investment prospects includes obtaining and evaluating information on the prospective portfolio company’s technology, market opportunity, management team, fund raising history, investor support, valuation considerations, financial condition and projections. We seek to balance our investment portfolio to reduce the risk of down market cycles associated with any particular industry or sector, development-stage or geographic area by quarterly reviewing each criteria and, in the event there is an overconcentration, seeking investment opportunities to reduce such overconcentration. Our Advisor employs a “hands on” approach to portfolio management, requiring private portfolio companies to provide monthly financial information and to participate in regular updates on performance and future plans. For public companies, our Advisor typically relies on publicly reported quarterly financials.
  Use of leverage. We use leverage to increase returns on equity through our Credit Facilities, through our 2026 Notes and through our 2019-1 Securitization. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and capital resources” in our Annual Report on Form 10-K for additional information about our use of leverage. In addition, we may issue additional debt securities or preferred stock in one or more series in the future.

 

Market opportunity

 

We focus our investments primarily in our Target Industries. The technology sectors we focus on include communications, networking, data storage, software, cloud computing, semiconductor, internet and media and consumer-related technologies. The life science sectors we focus on include biotechnology, drug discovery, drug delivery, bioinformatics and medical devices. The healthcare information and services sectors we focus on include diagnostics, electronic medical record services and software and other healthcare related services and technologies that improve efficiency and quality of administered healthcare. The sustainability sectors we focus on include alternative energy, power management, energy efficiency, green building materials and waste recycling. We refer to all of these companies as “technology-related” companies because the companies are developing or offering goods and services to businesses and consumers which utilize scientific knowledge, including techniques, skills, methods, devices and processes, to solve problems. We intend, under normal market conditions, to invest at least 80% of the value of our total assets in such companies.

 

We believe that Venture Lending has the potential to achieve enhanced returns that are attractive notwithstanding the high degree of risk associated with lending to development-stage companies. Potential benefits include:

 

  interest rates that typically exceed rates that would be available to portfolio companies if they could borrow in traditional commercial financing transactions;
  the debt investment support provided by cash proceeds from equity capital invested by venture capital and private equity firms or access to public equity markets to access capital;

 3

 
  relatively rapid amortization of principal;
  senior ranking to equity and collateralization of debt investments to minimize potential loss of capital; and
  potential equity appreciation through warrants.

 

We believe that Venture Lending also provides an attractive financing source for portfolio companies, their management teams and their equity capital investors, as it:

 

  is typically less dilutive to the equity holders than additional equity financing;
  extends the time period during which a portfolio company can operate before seeking additional equity capital or pursuing a sale transaction or other liquidity event; and
  allows portfolio companies to better match cash sources with uses.

 

Competitive strengths

 

We believe that we, together with our Advisor, possess significant competitive strengths, which include the following:

 

  Consistently execute commitments and close transactions.  Our Advisor and its senior management and investment professionals have an extensive track record of originating, underwriting and managing Venture Loans. Our Advisor and its predecessor have directly originated, underwritten and managed Venture Loans with an aggregate original principal amount over $2.0 billion to more than 270 companies since operations commenced in 2004.
  Robust direct origination capabilities.  Our Advisor has significant experience originating Venture Loans in our Target Industries. This experience has given our Advisor a deep knowledge of our Target Industries and an extensive base of transaction sources and references.
  Highly experienced and cohesive management team.  Most of our Advisor’s senior management team of experienced professionals has been together since our inception. This consistency allows companies, their management teams and their investors to rely on consistent and predictable service, loan products and terms and underwriting standard.
  Relationships with venture capital and private equity investors.  Our Advisor has developed strong relationships with venture capital and private equity firms and their partners.
  Well-known brand name.  Our Advisor has originated Venture Loans to more than 270 companies in our Target Industries under the “Horizon Technology Finance” brand.

 

Our portfolio

 

From the commencement of operations of our predecessor on March 4, 2008 through March 31, 2021, we funded debt investments to 270 portfolio companies and invested $2.0 billion in debt investments. As of March 31, 2021, our debt investment portfolio consisted of 37 debt investments with an aggregate fair value of $361.8 million. As of March 31, 2021, 97.4%, or $352.2 million, of our debt investment portfolio at fair value consisted of Senior Term Loans. As of March 31, 2021, our net assets were $217.7 million, and all of our debt investments were secured by all or a portion of the tangible and intangible assets of the applicable portfolio company. The debt investments in our portfolio are generally not rated by any rating agency. If the individual debt investments in our portfolio were rated, they would be rated below “investment grade”. Debt investments that are unrated or rated below investment grade are sometimes referred to as “junk bonds” and have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal.

 

For the three months ended March 31, 2021, our dollar-weighted annualized yield on average debt investments was 15.2%. We calculate the dollar-weighted yield on average debt investments for any period as (1) total investment income during the period divided by (2) the average of the fair value of debt investments outstanding on (a) the last day of the calendar month immediately preceding the first day of the period and (b) the last day of each calendar month during the period. The dollar-weighted annualized yield on average debt investments is higher than what investors will realize because it does not reflect our expenses or any sales load paid by investors.

 

For the three months ended March 31, 2021, our investment portfolio had an overall total yield of 14.4%. We calculate the dollar-weighted annualized yield on average investment type for any period as (1) total related investment income during the period divided by (2) the average of the fair value of the investment type outstanding on (a) the last day of the calendar month immediately preceding the first day of the period and (b) the last day of each calendar month during the period. The dollar-weighted annualized yield on average investment type is higher than what investors will realize because it does not reflect our expenses or any sales load paid by investors.

 4

 

See “Business” in Part I, Item 1 in our most recent Annual Report on Form 10-K for additional information about us.

 

Risk factors

 

Our business is subject to numerous risks, as described in the section titled “Risk Factors” in the applicable prospectus supplement and in any free writing prospectuses we have authorized for use in connection with a specific offering, and under similar headings in the documents that are incorporated by reference into this prospectus, including the section titled “Risk Factors” included in our most recent Annual Report on Form 10-K, in our most recent Quarterly Report on Form 10-Q, as well as in any of our subsequent SEC filings.

 

Company information

 

Our administrative and executive offices and those of our Advisor are located at 312 Farmington Avenue, Farmington, Connecticut 06032, and our telephone number is (860) 676-8654. Our corporate website is located at www.horizontechfinance.com. Information contained on our website is not incorporated by reference into this prospectus, and you should not consider information contained on our website to be part of this prospectus.

 5

 

OFFERINGS

 

We may offer, from time to time, up to $350,000,000 of our common stock, preferred stock, subscription rights, debt securities and/or warrants representing rights to purchase shares of our common stock, preferred stock or debt securities on terms to be determined at the time of the offering. Any debt securities, preferred stock, warrants and subscription rights offered by means of this prospectus may be convertible or exchangeable into shares of our common stock, on terms to be determined at the time of the offering. We will offer our securities at prices and on terms to be set forth in one or more supplements to this prospectus and any related free writing prospectus.

 

We may offer our securities directly to one or more purchasers, including existing stockholders in a rights offering, through agents that we designate from time to time or to or through underwriters or dealers. The prospectus supplement relating to each offering will identify any agents or underwriters involved in the sale of our securities and will set forth any applicable purchase price, fee, commission or discount arrangement between us and our agents or underwriters or among our underwriters or the basis upon which such amount may be calculated. See “Plan of Distribution.” We may not sell any of our securities through agents, underwriters or dealers without delivery of a prospectus supplement describing the method and terms of the offering of our securities.

 

Set forth below is additional information regarding offerings of our securities:

 

   
Use of proceeds   We intend to use the net proceeds from selling our securities to make new investments in portfolio companies in accordance with our investment objective and strategies as described in this prospectus and for working capital and general corporate purposes.
   
Listing   Our common stock is traded on Nasdaq under the symbol “HRZN.” Our 2026 Notes trade on the New York Stock Exchange, or NYSE, under the ticker symbol “HTFB.”
   
Distributions   We intend to continue to pay monthly distributions to our stockholders out of assets legally available for distribution. Our distributions, if any, will be determined by our Board. Our ability to declare distributions depends on our earnings, our overall financial condition (including our liquidity position), maintenance of RIC status and such other factors as our Board may deem relevant from time to time.

 

    To the extent our taxable earnings fall below the total amount of our distributions for any given fiscal year, a portion of those distributions may be deemed to be a return of capital to our common stockholders for U.S. federal income tax purposes. Thus, the source of a distribution to our stockholders may be the original capital invested by the stockholder rather than our income or gains. Stockholders should read any written disclosure accompanying a distribution payment carefully and should not assume that the source of any distribution is our ordinary income or gains.
   
Taxation   We have elected to be treated as a RIC. Accordingly, we generally will not incur corporate-level income taxes on any investment company taxable income determined without regard to any deductions for dividends paid and net capital gains that we distribute as dividends for U.S. federal income tax purposes to our stockholders. To maintain RIC tax treatment, we must meet specified source-of-income and asset diversification requirements and distribute annually an amount generally equal to 90% of our investment company taxable income, determined without regard to any deduction for dividends paid.
   
Leverage     We borrow funds to make additional investments. We use this practice, which is known as “leverage,” to attempt to increase returns to our stockholders, but it involves significant risks. See “Risk Factors.” As of this prospectus, we are allowed to borrow amounts such that our asset coverage, as calculated pursuant to the 1940 Act, equals at least 150% after such borrowing (i.e., we are able to borrow up to two dollars for every dollar we have in assets less all liabilities and indebtedness not represented by senior securities issued by us). For more information, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” and  “Item 1A — Risk Factors — General Risk Factors — We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us” in our most recent Annual Report on Form 10-K.

 6

 
   
Trading at a discount     Shares of closed-end investment companies, including BDCs, frequently trade at a discount to their net asset value. This risk is separate and distinct from the risk that our net asset value per share may decline. We cannot predict whether our common stock will trade above, at or below net asset value.
   
Dividend Reinvestment Plan     We have adopted a DRIP for our stockholders. The dividend reinvestment plan is an “opt out” DRIP. As a result, distributions to our stockholders are automatically reinvested in additional shares of our common stock, unless a stockholder specifically “opts out” of the DRIP so as to receive cash distributions. Stockholders who receive distributions in the form of stock will generally be subject to the same federal, state and local tax consequences as stockholders who elect to receive their distributions in cash. See “Dividend Reinvestment Plan.”
   
Sales of common stock below net asset value     In the event we offer common stock or warrants or rights to acquire such common stock, the offering price per share of our common stock less any underwriting commissions or discounts will not be less than the net asset value per share of our common stock at the time we make the offering except (1) in connection with the exercise of certain warrants, options or rights whose issuance has been approved by our stockholders at an exercise or conversion price not less than the market value of our common stock at the date of issuance (or, if no such market value exists, the net asset value per share of our common stock as of such date); (2) to the extent such an offer or sale is approved by stockholders holding a majority of our outstanding securities and our Board; or (3) under such other circumstances as may be permitted under the 1940 Act or by the SEC. For purposes of (2) above, a “majority” of outstanding securities is defined in the 1940 Act as (i) 67% or more of the voting securities present at a stockholders’ meeting if the holders of more than 50% of our outstanding voting securities are present or represented by proxy; or (ii) 50% of our outstanding voting securities, whichever is less.
   
Available information  

We are required to file periodic reports, current reports, proxy statements and other information with the SEC. This information is available on the SEC’s website at www.sec.gov. You may also obtain such information by contacting us at 312 Farmington Avenue, Farmington, Connecticut 06032 or by calling us at (860) 676-8654. We intend to provide much of the same information on our website at www.horizontechfinance.com. Information contained on our website is not part of this prospectus or any prospectus supplement and should not be relied upon as such. 

     
Incorporation of Certain Information by Reference   This prospectus is part of a registration statement that we have filed with the SEC. In accordance with the Small Business Credit Availability Act, or SBCAA, we are allowed to “incorporate by reference” the information that we file with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to comprise a part of this prospectus from the date we file that information. Any reports filed by us with the SEC subsequent to the date of this prospectus until we have sold all of the securities offered by this prospectus or the offering is otherwise terminated will automatically update and, where applicable, supersede any information contained in this prospectus or incorporated by reference into this prospectus. See “Incorporation of Certain Information by Reference” in this prospectus.

 7

 

FEES AND EXPENSES

 

The following table is intended to assist you in understanding the costs and expenses that an investor will bear directly or indirectly. However, we caution you that some of the percentages indicated in the table below are estimates and may vary. The following table and example should not be considered a representation of our future expenses. Actual expenses may be greater or less than shown. Except where the context suggests otherwise, whenever this prospectus contains a reference to fees or expenses paid by “you” or “us” or that “we” will pay fees or expenses, stockholders will indirectly bear such fees or expenses as investors in the Company.

 

       
Stockholder Transaction Expenses      
Sales Load (as a percentage of offering price)   %(1) 
Offering Expenses (as a percentage of offering price)   %(2) 
Dividend Reinvestment Plan Fees   %(3) 
Total Stockholder Transaction Expenses (as a percentage of offering price)   % 
   
Annual Expenses (as a Percentage of Net Assets Attributable to Common Shares)(4)      
Base Management Fees   4.02 %(5) 
Incentive Fees Payable Under the Investment Management Agreement   3.17 %(6) 
Interest Payments on Borrowed Funds   5.44 %(7) 
Other Expenses (estimated for the current fiscal year)   1.72 %(8) 
Total Annual Expenses   14.35 %(9) 

 

 

(1) In the event that securities to which this prospectus relates are sold to or through underwriters or agents, a corresponding prospectus supplement will disclose the applicable sales load.
(2) In the event that we conduct an offering of any of our securities, a corresponding prospectus supplement will disclose the estimated offering expenses because they will be ultimately borne by the stockholders.
(3) The expenses of the DRIP are included in “Other Expenses” in the table. For instance, if a participant directs the plan administrator to sell part or all of the shares held by the plan administrator in the participant’s account and to remit the proceeds of such sale to the participant, then the plan administrator is authorized to deduct a $15.00 transaction fee plus a $0.10 per share trading fee from such proceeds. See “Dividend Reinvestment Plan.”
(4) Net Assets Attributable to Common Stock is based on our net assets at March 31, 2021.
(5)

Our base management fee under the Investment Management Agreement is based on our gross assets, less cash and cash equivalents, which includes assets acquired using leverage, including any leverage incurred under this prospectus, and is payable monthly in arrears. The management fee referenced in the table above is based on our gross assets, less cash and cash equivalents, of $388 million as of March 31, 2021, including assets to be or will be acquired using leverage over the next twelve months, which management estimates will be in the amount of $117 million. See Note 3 “Related Party Transactions—Investment Management Agreement” of our Consolidated Financial Statements in Part I, Item 1 of our most recent Quarterly Report on Form 10-Q. 

(6)

The incentive payable to our Advisor represents our estimated annual expense incurred under the first part of the incentive fee payable under the Investment Management Agreement over the next twelve months. As of March 31, 2021, our cumulative realized capital gains and unrealized capital appreciation did not exceed our cumulative realized capital losses and unrealized capital depreciation. Given our strategy of investing primarily in Venture Loans, which are fixed-income assets, we believe it is unlikely that our cumulative realized capital gains and unrealized capital appreciation will exceed our cumulative realized capital losses and unrealized capital depreciation in the next twelve months. Consequently, we do not expect to incur any Incentive Fee Capital Gains during the next twelve months. As we cannot predict the occurrence of any capital gains from the portfolio, we have assumed no Incentive Fee Capital Gains. See Note 3 “Related Party Transactions—Investment Management Agreement” of our Consolidated Financial Statements in Part I, Item 1 of our most recent Quarterly Report on Form 10-Q. 

(7)

Interest payments on borrowed funds represent our estimated annual interest payments on borrowed funds based on current debt levels as adjusted for projected increases in debt levels over the next twelve months. 

(8)

Includes our overhead expenses, including payments under the Administration Agreement, based on our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement. See Note 3 “Related Party Transactions— Administration Agreement” of our Consolidated Financial Statements in Part I, Item 1 of our most recent Quarterly Report on Form 10-Q. “Other Expenses” are based on estimated amounts to be incurred during the current fiscal year. 

(9) “Total Annual Expenses” as a percentage of consolidated net assets attributable to common stock are higher than the total annual expenses percentage would be for a company that is not leveraged. We borrow money to leverage our net assets and increase our total assets. The SEC requires that the “Total Annual Expenses” percentage be calculated as a percentage of net assets (defined as total assets less indebtedness and after taking into account any incentive fees payable during the period), rather than the total assets, including assets that have been funded with borrowed monies.

 8

 

Example

 

The following example demonstrates the projected dollar amount of total cumulative expenses that would be incurred over various periods with respect to a hypothetical investment in our common stock. In calculating the following expense amounts, we have assumed that our annual operating expenses remain at the levels set forth in the table above. In the event that shares to which this prospectus relates are sold to or through underwriters or agents, a corresponding prospectus supplement will restate this example to reflect the applicable sales load and estimated offering expenses.

 

    1 Year   3 Years   5 Years   10 Years
You would pay the following expenses on a $1,000 investment, assuming a 5% annual return (assumes no return from net realized capital gains or net unrealized capital appreciation)   $ 136.79     $ 373.20     $ 567.47     $ 914.83  

 

The example and the expenses in the tables above should not be considered a representation of our future expenses, and actual expenses may be greater or lesser than those shown.

 

While the example assumes, as required by the applicable rules of the SEC, a 5% annual return, our performance will vary and may result in a return greater or less than 5%. The incentive fee under the Investment Management Agreement is unlikely to be significant assuming a 5% annual return and is not included in the example. This illustration assumes that we will not realize any capital gains (computed net of all realized capital losses and unrealized capital depreciation) in any of the indicated time periods. If we achieve sufficient returns on our investments, including through the realization of capital gains, to trigger an incentive fee of a material amount, our distributions to our common stockholders and our expenses would likely be higher.

 

The following example demonstrates the projected dollar amount of total cumulative expenses that would be incurred over various periods with respect to a hypothetical investment in our common stock assuming a 5% annual return derived entirely from capital gains.

 

    1 Year   3 Years   5 Years   10 Years
You would pay the following expenses on a $1,000 investment, assuming a 5% annual return (assumes return from only realized capital gains and thus subject to the capital gains incentive fee)   $ 117.43     $ 327.59     $ 508.66     $ 859.12  

 

In addition, while the examples assume reinvestment of all dividends and other distributions at net asset value, participants in our DRIP receive a number of shares of our common stock determined by dividing the total dollar amount of the distribution payable to a participant by the market price per share of our common stock at the close of trading on the valuation date for the distribution. This price may be at, above or below net asset value. See “Dividend Reinvestment Plan” for additional information regarding our DRIP.

 9

 

SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

 

The information in “Item 6. Selected Consolidated Financial Data” of our most recent annual report on Form 10-K, “Part I — Consolidated Statements of Assets and Liabilities” of our most recent quarterly report on Form 10-Q and “Part I — Consolidated Statements of Operations” of our most recent quarterly report on Form 10-Q is incorporated by reference herein.

 10

 

RISK FACTORS

 

Investing in our securities involves a high degree of risk. Before deciding whether to invest in our securities, you should carefully consider the risks and uncertainties described in the section titled “Risk Factors” in the applicable prospectus supplement and any related free writing prospectus, and discussed in the section titled “Risk Factors” in Part I, Item 1A of our most recent Annual Report on Form 10-K and any subsequent filings we have made with the SEC that are incorporated by reference into this prospectus or any prospectus supplement, together with other information in this prospectus, the documents incorporated by reference into this prospectus or any prospectus supplement, and any free writing prospectus that we may authorize for use in connection with this offering. The risks described in these documents are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. Past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. If any of these risks actually occurs, our business, reputation, financial condition, results of operations, revenue, and future prospects could be seriously harmed. This could cause our net asset value and the trading price of our securities to decline, resulting in a loss of all or part of your investment. Please also read carefully the section titled “Cautionary Note Regarding Forward-Looking Statements” in this prospectus.

 11

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This prospectus, including the documents we incorporate by reference herein, contains, and any applicable prospectus supplement or free writing prospectus, including the documents we incorporate by reference therein, contain forward-looking statements that involve substantial risks and uncertainties. The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us or are within our control. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. We undertake no obligation to revise or update any forward-looking statements but advise you to consult any additional disclosures that we may make directly to you or through reports that we may file in the future with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those expressed or implied by the forward-looking statements. The following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance:

 

  our future operating results, including the performance of our existing debt investments, warrants and other investments;

 

  the introduction, withdrawal, success and timing of business initiatives and strategies;

 

  general economic and political trends and other external factors, including the current COVID-19 pandemic;

 

  the relative and absolute investment performance and operations of our Advisor;

 

  the impact of increased competition;

 

  the impact of investments we intend to make and future acquisitions and divestitures;

 

  the unfavorable resolution of legal proceedings;

 

  our business prospects and the prospects of our portfolio companies, including our and their ability to achieve our respective objectives as a result of the current COVID-19 pandemic;

 

  the impact, extent and timing of technological changes and the adequacy of intellectual property protection;

 

  our regulatory structure and tax status;

 

  our ability to qualify and maintain qualification as a RIC and as a BDC;

 

  the adequacy of our cash resources and working capital;

 

  the timing of cash flows, if any, from the operations of our portfolio companies;

 

  the impact of interest rate volatility on our results, particularly if we use leverage as part of our investment strategy;

 

  the ability of our portfolio companies to achieve their objectives;

 

  the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to us or our Advisor;

 

  our contractual arrangements and relationships with third parties;

 

  our ability to access capital and any future financings by us;

 

  the ability of our Advisor to attract and retain highly talented professionals; and

 

  the impact of changes to tax legislation and, generally, our tax position.

 

This prospectus, and other statements that we may make, may contain forward-looking statements with respect to future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “plan,” “potential,” “project,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” or similar expressions.

 

Any forward-looking statement made by us in this prospectus speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. You are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the SEC, including our annual reports on Form 10-K, registration statements on Form N-2, quarterly reports on Form 10-Q, current reports on Form 8-K and definitive proxy statements on Schedule 14A. Under Sections 27A(b)(2)(B) of the Securities Act and Section 21E(b)(2)(B) of the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to statements made in connection with any offering of securities pursuant to this prospectus or in the periodic reports we file under the Exchange Act.

 12

 

USE OF PROCEEDS

 

Unless otherwise specified in any prospectus supplement accompanying this prospectus, we intend to use the net proceeds from the sale of our securities for investment in portfolio companies in accordance with our investment objective and strategies as described in this prospectus and for working capital and general corporate purposes. We may also use a portion of the net proceeds from the sale of our securities to repay amounts outstanding under the Credit Facilities. We may also use a portion of the net proceeds to redeem the 2026 Notes after they are subject to optional redemption in March 2023. The 2026 Notes bear interest at an annual rate of 4.875% and otherwise mature on March 30, 2026. The supplement to this prospectus relating to an offering will more fully identify the use of proceeds from such offering. We estimate that it will take up to six months for us to substantially invest the net proceeds of any offering made pursuant to this prospectus, depending on the availability of attractive opportunities and market conditions. However, we can offer no assurances that we will be able to achieve this goal.

 

Pending such use, we will invest the remaining net proceeds of this offering primarily in cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less from the date of investment. These temporary investments may have lower yields than our other investments and, accordingly, may result in lower distributions, if any, during such period. See “Business—Regulation—Temporary Investments” in Part I, Item 1 in our most recent Annual Report on Form 10-K for additional information about temporary investments we may make while waiting to make longer-term investments in pursuit of our investment objective.

 13

 

PRICE RANGE OF COMMON STOCK AND DISTRIBUTIONS

 

Our common stock is traded on Nasdaq, under the symbol “HRZN”. The following table sets forth, for each fiscal quarter since January 1, 2019, the range of high and low closing sales price of our common stock, the premium or discount of the closing sales price to our NAV and the distributions declared per share by us.

 

            Closing Sales Price     Premium/ Discount of High Sales Price to    

Premium/ Discount of Low Sales Price to

      Distributions Declared Per  
Period   NAV(1)     High     Low     NAV(2)     NAV(2)     Share(3)  
Year ended December 31, 2021                                                
Second Quarter(4)   $ *     $ 17.83      $ 14.57       *       *     $ 0.30  
First Quarter   $ 11.07     $ 15.01     $ 12.60       36     14   $ 0.30  
Year ended December 31, 2020                                                
Fourth Quarter   $ 11.02     $ 13.33     $ 11.30       21     3   $ 0.30  
Third Quarter   $ 11.17     $ 12.48     $ 10.87       12     (3 )%    $ 0.30  
Second Quarter   $ 11.64     $ 11.95     $ 7.09       3     (39 )%    $ 0.30  
First Quarter   $ 11.48     $ 13.69     $ 5.25       19     (54 )%    $ 0.35  
Year ended December 31, 2019                                                
Fourth Quarter   $ 11.83     $ 12.93     $ 11.67       9     (1 )%    $ 0.30  
Third Quarter   $ 11.67     $ 12.23     $ 11.80       5     1   $ 0.30  
Second Quarter   $ 11.60     $ 12.05     $ 11.62       4       $ 0.30  
First Quarter   $ 11.55     $ 13.41     $ 11.05       16     (4 )%    $ 0.30  

 

 

  (1) NAV per share determined as of the last day in the relevant quarter and therefore may not reflect the NAV per share on the date of the high and low sales prices. The NAVs shown are based on outstanding shares at the end of each period.
  (2) Calculated as of the respective high or low closing sales price divided by the quarter end NAV.
  (3) We have adopted an “opt out” DRIP for our common stockholders. As a result, if we declare a distribution, then stockholders’ cash distributions are automatically reinvested in additional shares of our common stock, unless they specifically opt out of the DRIP so as to receive cash distributions.
  (4) Through June 28, 2021.
     
  * Not yet determined at the time of filing.

 

The last reported price for our common stock on June 28, 2021 was $17.24 per share. Our NAV per share on March 31, 2021 (the last date prior to the date of this prospectus on which we determined NAV) was $11.07. The closing sales price of our shares on Nasdaq on that date was $14.57, which represented a 32% premium to NAV per share. As of June 28, 2021 we had 18 stockholders of record, which did not include stockholders for whom shares are held in nominee or “street” name.

 

Shares of BDCs may trade at a market price that is less than the NAV that is attributable to those shares. The possibility that our shares of common stock will trade at a discount from NAV or at a premium that is unsustainable over the long term is separate and distinct from the risk that our NAV will decrease. It is not possible to predict whether our shares will trade at, above or below NAV in the future.

 14

 

Issuer Purchases of Equity Securities

 

On April 23, 2021, our Board extended a previously authorized stock repurchase plan which allows us to repurchase up to $5.0 million of our outstanding common stock. Unless extended by our Board, the repurchase program will expire on the earlier of June 30, 2022 and the repurchase of $5.0 million of common stock. The following table provides information regarding our purchases of our common stock for each quarter since the announcement of the stock repurchase plan through the quarter ended March 31, 2021:

 

Period   Total
Number of
Shares
Purchased
    Average Price
Paid per Share
    Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs
    Approximate
Dollar Value of
Shares that May
Yet Be
Purchased Under
the Plans or
Programs
 
    (In thousands, except share and per share data)
October 1, 2015 through December 31, 2015     113,382     $ 11.53       113,382     $ 3,693  
January 1, 2016 through March 31, 2016         $           $ 3,693  
April 1, 2016 through June 30, 2016         $           $ 3,693  
July 1, 2016 through September 30, 2016     1,319     $ 11.54       1,319     $ 3,678  
October 1, 2016 through December 31, 2016     46,841     $ 10.63       46,841     $ 3,180  
January 1, 2017 through March 31, 2017         $           $ 3,180  
April 1, 2017 through June 30, 2017         $           $ 3,180  
July 1, 2017 through September 30, 2017     5,923     $ 9.97       5,923     $ 3,121  
October 1, 2017 through December 31, 2017         $           $ 3,121  
January 1, 2018 through March 31, 2018         $           $ 3,121  
April 1, 2018 through June 30, 2018         $           $ 3,121  
July 1, 2018 through September 30, 2018         $           $ 3,121  
October 1, 2018 through December 31, 2018         $           $ 3,121  
January 1, 2019 through March 31, 2019         $           $ 3,121  
April 1, 2019 through June 30, 2019         $           $ 3,121  
July 1, 2019 through September 30, 2019         $           $ 3,121  
October 1, 2019 through December 31, 2019         $           $ 3,121  
January 1, 2020 through March 31, 2020         $           $ 3,121  
April 1, 2020 through June 30, 2020         $           $ 3,121  
July 1, 2020 through September 30, 2020         $           $ 3,121  
October 1, 2020 through December 31, 2020         $           $ 3,121  
January 1, 2021 through March 31, 2021         $           $ 3,121  
Total     167,465     $ 11.22       167,465          

 

Any shares repurchased by us may have the effect of maintaining the market price of our common stock or retarding a decline in the market price of the common stock, and, as a result, the price of our common stock may be higher than the price that otherwise might exist in the open market. In addition, as any shares repurchased pursuant to the stock repurchase plan will be purchased at a price below the net asset value per share as reported in our most recent financial statements, share repurchases may have the effect of increasing our net asset value per share.

 

Distributions

 

We intend to continue making monthly distributions to our stockholders. The timing and amount of our monthly distributions, if any, is determined by our Board. Any distributions to our stockholders are declared out of assets legally available for distribution. We monitor available net investment income to determine if a tax return of capital may occur for the fiscal year. To the extent our taxable earnings fall below the total amount of our distributions for any given fiscal year, a portion of those distributions may be considered a return of capital to our common stockholders for U.S. federal income tax purposes. Thus, the source of distribution to our stockholders may be the original capital invested by the stockholder rather than our income or gains. Stockholders should read any written disclosure accompanying a distribution payment carefully and should not assume that the source of any distribution is our ordinary income or gains.

 

In order to qualify to be subject to tax as a RIC, we must meet certain source-of-income, asset diversification and annual distribution requirements. Generally, in order to qualify as a RIC, we must derive at least 90% of our gross income during each tax year from dividends, interest, payments with respect to certain securities, loans, gains from the sale or other disposition of stock, securities or foreign currencies, or other income derived with respect to our business of investing in stock or other securities. We must also meet certain asset diversification requirements at the end of each quarter of each tax year. Failure to meet these diversification requirements on the last day of a quarter may result in us having to dispose of certain investments quickly in order to prevent the loss of RIC status. Any such dispositions could be made at disadvantageous prices or times, and may cause us to incur substantial losses.

 15

 

In addition, in order to be eligible for the special tax treatment accorded to RICs and to avoid the imposition of corporate level tax on the income and gains we distribute to our stockholders, each tax year we are required under the Code to distribute as dividends of an amount generally at least 90% of our investment company taxable income, determined without regard to any deduction for dividends paid to our stockholders. We refer to such amount as the Annual Distribution Requirement. Additionally, we must distribute, in respect of each calendar year, dividends of an amount generally at least equal to the sum of 98% of our calendar year net ordinary income (taking into account certain deferrals and elections); 98.2% of our capital gain net income (adjusted for certain ordinary losses) for the one year period ending on October 31 of such calendar year; and any net ordinary income or capital gain net income for preceding years that was not distributed during such years and on which we previously did not incur any U.S. federal income tax in order to avoid the imposition of a 4% U.S. federal excise tax. If we fail to qualify as a RIC for any reason and become subject to corporate income tax, the resulting corporate income taxes could substantially reduce our net assets, the amount of income available for distribution and the amount of our distributions. Such a failure would have a material adverse effect on us and our stockholders. In addition, we could be required to recognize unrealized gains, incur substantial taxes and interest and make substantial distributions in order to re-qualify as a RIC. We cannot assure stockholders that they will receive any distributions.

 

Depending on the level of taxable income earned in a tax year, we may choose to carry forward taxable income in excess of current year distributions into the next tax year and pay a 4% U.S. federal excise tax on such undistributed income. Distributions of any such carryover taxable income must be made through a distribution declared as of the earlier of the filing date of the corporate income tax return related to the tax year in which such taxable income was generated or the 15th day of the ninth month following the end of such tax year, in order to count towards the satisfaction of the Annual Distribution Requirement for the tax year in which such taxable income was generated. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and, if we issue senior securities, we may be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage stipulated by the 1940 Act or if distributions are limited by the terms of any of our borrowings. See “Material U.S. Federal Income Tax Considerations.”

 

We have adopted an “opt out” DRIP for our common stockholders. As a result, if we make a distribution, then stockholders’ cash distributions are automatically reinvested in additional shares of our common stock, unless they specifically opt out of the DRIP. If a stockholder opts out, that stockholder receives cash distributions. Although distributions paid in the form of additional shares of common stock are generally subject to U.S. federal, state and local taxes, stockholders participating in our DRIP do not receive any corresponding cash distributions with which to pay any such applicable taxes. We may use newly issued shares to implement the DRIP, or we may purchase shares in the open market in connection with our obligations under the DRIP.

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The information in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our most recent Annual Report on Form 10-K and in Part 1, Item 2 of our most recent Quarterly Report on Form 10-Q is incorporated herein by reference.

 16

 

SENIOR SECURITIES

 

Information about our senior securities is shown in the following table as of March 31, 2021 and December 31, 2020, 2019, 2018, 2017, 2016, 2015, 2014, 2013, 2012, 2011 and 2010. The information as of December 31, 2020, 2019, 2018, 2017 and 2016 was included in or derived from our consolidated financial statements for the year ended December 31, 2020, which were audited by RSM US LLP, our independent registered public accounting firm. This information about our senior securities should be read in conjunction with our audited consolidated financial statements and related notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

 

Class and Year   Total Amount Outstanding Exclusive of Treasury Securities(1)   Asset Coverage per Unit(2)   Involuntary Liquidation Preference per Unit(3)  

Average Market

Value per Unit(4)

 
    (in thousands, except unit data) 
Credit facilities                     
2021 (as of March 31)   $50,750    9,129        N/A 
2020   $50,250    7,965        N/A 
2019   $17,000    19,908        N/A 
2018   $90,500    2,896        N/A 
2017   $58,000   $3,973        N/A 
2016   $63,000   $3,733        N/A 
2015   $68,000   $4,048        N/A 
2014   $10,000   $22,000        N/A 
2013   $10,000   $25,818        N/A 
2012   $56,020   $4,177        N/A 
2011   $64,571   $3,012        N/A 
2010   $87,425   $2,455        N/A 
2022 Notes                     
2021 (as of March 31)   $37,375    12,396        25.29 
2020   $37,375    10,708        24.60 
2019   $37,375    9,055        25.53 
2018   $37,375    7,014        25.52 
2017   $37,375   $6,166       $25.66 
2026 Notes                     
2021 (as of March 31)   $57,500    8,057        25.00 
2019 Notes                     
2021 (as of March 31)                 
2020                 
2019                 
2018                 
2017                 
2016   $33,000   $7,127       $25.42 
2015   $33,000   $8,342       $25.26 
2014   $33,000   $6,667       $25.64 
2013   $33,000   $7,824       $25.70 
2012   $33,000   $7,091       $25.38 
2019-1 Securitization                     
2021 (as of March 31)   $100,000    4,633        N/A 
2020   $100,000    4,002        N/A 
2019   $100,000    3,384        N/A 
2013-1 Securitization                     
2021 (as of March 31)                N/A 
2020                N/A 
2019                N/A 
2018                N/A 
2017                N/A 
2016                N/A 
2015   $14,546   $18,926        N/A 
2014   $38,753   $5,677        N/A 
2013   $79,343   $3,254        N/A  
Total senior securities                     
2021 (as of March 31)   $245,625   $1,886        N/A 
2020   $187,625   $2,133        N/A 
2019   $154,375   $2,192        N/A 
2018   $127,875   $2,050        N/A 
2017   $95,375   $2,416        N/A 
2016   $96,000   $2,450        N/A 
2015   $115,546   $2,383        N/A 
2014   $81,753   $2,691        N/A 
2013   $122,343   $2,110        N/A 
2012   $89,020   $2,629        N/A 
2011   $64,571   $3,012        N/A 
2010   $87,425   $2,455        N/A 
                      

 

 

(1) Total amount of senior securities outstanding at the end of the period presented.
(2) Asset coverage per unit is the ratio of the original cost less accumulated depreciation, amortization or impairment of the Company’s total consolidated assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness.
(3) The amount which the holder of such class of senior security would be entitled upon the voluntary liquidation of the applicable issuer in preference to any security junior to it. The “—” in this column indicates that the SEC expressly does not require this information to be disclosed for certain types of securities.
(4)

Not applicable to the Company’s Credit Facilities, the 2019-1 Securitization, and the $189.3 million securitization of secured loans we completed on June 28, 2013, or the 2013-1 Securitization, because such securities are not registered for public trading. 

 17

 

BUSINESS

 

Please refer to “Business” in Part I, Item 1 of our most recent Annual Report on Form 10-K and “Legal Proceedings” in Part I, Item 3 of our most recent Annual Report on Form 10-K and Part II, Item 1 of our most recent Quarterly Report on Form 10-Q for a description of the Company.

 18

 

PORTFOLIO COMPANIES

 

The following table sets forth certain information as of March 31, 2021 for each portfolio company in which we had a debt, equity or other investment. Other than these investments, our only relationships with our portfolio companies involve the managerial assistance we may separately provide to our portfolio companies, such services being ancillary to our investments, and the board observer or participation rights we may receive in connection with our investment. We do not “control” any of our portfolio companies, each as defined in the 1940 Act. In general, under the 1940 Act, we would “control” a portfolio company if we owned more than 25% of its voting securities.

 

            Principal     Cost of   Fair  
Portfolio Company (1)(3)   Sector   Type of Investment (4)(7)(9)(10)   Amount     Investments (6)   Value  
Non-Affiliate Investments —                              
Non-Affiliate Debt Investments —                          
Non-Affiliate Debt Investments — Life Science                          

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

330 N. Wabash 

Chicago, IL 60611 

Biotechnology   Term Loan (9.30% cash (Libor + 7.50%; Floor 9.30%), 5.00% ETP, Due 3/1/24)   $  5,000     $  4,889   $  4,889  
        Term Loan (9.30% cash (Libor + 7.50%; Floor 9.30%), 5.00% ETP, Due 3/1/24)      5,000        4,943      4,943  
        Term Loan (9.30% cash (Libor + 7.50%; Floor 9.30%), 5.00% ETP, Due 3/1/24)      5,000        4,943      4,943  
        Term Loan (9.30% cash (Libor + 7.50%; Floor 9.30%), 5.00% ETP, Due 3/1/24)      5,000        4,943      4,943  

Celsion Corporation (2)(5)(12) 

997 Lenox Drive, Suite 100
Lawrenceville, NJ 08648 

  Biotechnology   Term Loan (9.63% cash (Libor + 7.63%; Floor 9.63%), 5.50% ETP, Due 4/1/23)      2,500        2,479      2,479  
        Term Loan (9.63% cash (Libor + 7.63%; Floor 9.63%), 5.50% ETP, Due 4/1/23)      2,500        2,527      2,483  

Emalex Biosciences, Inc. (2)(12) 

330 N. Wabash, Suite 3500 

Chicago, IL 60611 

  Biotechnology   Term Loan (9.75% cash (Libor + 7.90%; Floor 9.75%), 5.00% ETP, Due 12/1/23)      2,500        2,357      2,357  
        Term Loan (9.75% cash (Libor + 7.90%; Floor 9.75%), 5.00% ETP, Due 12/1/23)      2,500        2,461      2,461  

LogicBio, Inc. (2)(5)(12) 

99 Eerie Street 

Cambridge, MA 02139 

  Biotechnology   Term Loan (8.75% cash (Libor + 6.25%; Floor 8.75%), 4.50% ETP, Due 6/1/24)      5,000        4,979      4,979  

Provivi, Inc. (2)(12) 

1701 Colorado Avenue 

Santa Monica, CA 90404 

  Biotechnology   Term Loan (9.50% cash (Libor + 8.50%; Floor 9.50%), 5.50% ETP, Due 12/1/24)      5,000        4,769      4,769  
        Term Loan (9.50% cash (Libor + 8.50%; Floor 9.50%), 5.50% ETP, Due 12/1/24)      5,000        4,918      4,918  

Bardy Diagnostics, Inc. (2)(12) 

316 Occidental Avenue South 

Seattle, WA 98104 

  Medical Device   Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24)      5,000        4,948      4,948  
        Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24)      5,000        4,948      4,948  
        Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24)      1,000        989      989  
        Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24)      1,000        989      989  
        Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24)      1,000        989      989  
        Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24)      1,000        989      989  
        Term Loan (8.90% cash (Libor + 7.00%; Floor 8.90%), 5.00% ETP, Due 9/1/24)      1,000        989      989  

Canary Medical Inc. (2)(12) 

2710 Loker Avenue West 

Carlsbad, CA 92010 

  Medical Device   Term Loan (9.00% cash (Prime + 5.75%; Floor 9.00%), 7.00% ETP, Due 11/1/24)      2,500        2,349      2,349  

Ceribell, Inc. (2)(12) 

2483 Old Middlefield Way, Suite 120 

Mount View, CA 94043 

  Medical Device   Term Loan (8.25% cash (Libor + 6.70%; Floor 8.25%), 5.50% ETP, Due 10/1/24)      5,000        4,882      4,882  
        Term Loan (8.25% cash (Libor + 6.70%; Floor 8.25%), 5.50% ETP, Due 10/1/24)      5,000        4,946      4,946  

Conventus Orthopaedics, Inc. (2)(12) 

10200 73rd Avenue North, Suite 122 

Maple Grove, MN 55369 

  Medical Device   Term Loan (9.25% cash (Libor + 8.00%; Floor 9.25%), 10.36% ETP, Due 7/1/25)      4,936        4,878      4,878  
        Term Loan (9.25% cash (Libor + 8.00%; Floor 9.25%), 10.36% ETP, Due 7/1/25)      4,936        4,878      4,878  

Corinth Medtech, Inc. (2)(12) 

1190 Saratoga Avenue, Suite 210

San Jose, CA 95129

  Medical Device   Term Loan (8.50% cash (Prime + 5.25%; Floor 8.50%), 20.00% ETP, Due 4/1/22)      2,500        2,480      2,480  
        Term Loan (8.50% cash (Prime + 5.25%; Floor 8.50%), 20.00% ETP, Due 4/1/22)      2,500        2,480      2,480  

CSA Medical, Inc. (2)(12)

91 Hartwell Avenue

Lexington, MA 02421

  Medical Device   Term Loan (10.00% cash (Libor + 8.20%; Floor 10.00%), 5.00% ETP, Due 1/1/24)      3,750        3,708      3,708  
        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        3,959      3,959  

CVRx, Inc. (2)(12)

9201 W. Broadway Ave, #650

Minneapolis, MN 55445

  Medical Device   Term Loan (10.00% cash (Libor + 7.80%; Floor 10.00%), 3.50% ETP, Due 10/1/24)      5,000        4,951      4,951  
        Term Loan (10.00% cash (Libor + 7.80%; Floor 10.00%), 3.50% ETP, Due 10/1/24)      5,000        4,951      4,951  
        Term Loan (10.00% cash (Libor + 7.80%; Floor 10.00%), 3.50% ETP, Due 10/1/24)      5,000        4,951      4,951  
        Term Loan (10.00% cash (Libor + 7.80%; Floor 10.00%), 3.50% ETP, Due 10/1/24)      5,000        4,951      4,951  

InfoBionic, Inc. (2)(12)

400 Totten Pond Road, Suite 315

Waltham, MA 02451

  Medical Device   Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 4.00% ETP, Due 10/1/24)      3,500        3,331      3,331  

MacuLogix, Inc. (2)(12)

1801 Oberlin Road, Suite 301

Middletown, PA 17057

  Medical Device   Term Loan (10.08% cash (Libor + 7.68%; Floor 10.08%), 5.50% ETP, Due 10/1/23)      7,500        7,429      7,429  
        Term Loan (10.08% cash (Libor + 7.68%; Floor 10.08%), 5.50% ETP, Due 10/1/23)      4,050        4,012      4,012  

 19

 
            Principal     Cost of   Fair  
Portfolio Company (1)(3)   Sector   Type of Investment (4)(7)(9)(10)   Amount     Investments (6)   Value  

Magnolia Medical Technologies, Inc. (2)(12)

200 West Mercer Street, Suite 500

Seattle, WA 98119

  Medical Device   Term Loan (9.75% cash (Prime + 5.00%; Floor 9.75%), 4.00% ETP, Due 3/1/25)      5,000        4,941      4,941  
        Term Loan (9.75% cash (Prime + 5.00%; Floor 9.75%), 4.00% ETP, Due 3/1/25)      5,000        4,941      4,941  
        Term Loan (9.75% cash (Prime + 5.00%; Floor 9.75%), 4.00% ETP, Due 3/1/25)      5,000        4,930      4,930  
        Term Loan (9.75% cash (Prime + 5.00%; Floor 9.75%), 4.00% ETP, Due 3/1/25)      5,000        4,930      4,930  

Sonex Health, Inc. (2)(12)

950 Blue Gentian Rd., Suite 200

Eagan, MN 55121

  Medical Device   Term Loan (9.25% cash (Prime + 6.00%; Floor 9.25%), 5.00% ETP, Due 6/1/24)      2,500        2,382      2,382  
        Term Loan (9.25% cash (Prime + 6.00%; Floor 9.25%), 5.00% ETP, Due 6/1/24)      2,500        2,463      2,463  
        Term Loan (9.25% cash (Prime + 6.00%; Floor 9.25%), 5.00% ETP, Due 6/1/24)      2,500        2,463      2,463  
Total Non-Affiliate Debt Investments — Life Science                  155,482      155,438  
Non-Affiliate Debt Investments — Technology                          

Alula Holdings, Inc. (2)(12)

2340 Energy Park Drive, Suite 100

St. Paul, MN 55108

  Consumer-related Technologies   Term Loan (10.00% cash (Prime + 6.75%; Floor 10.00%), 3.00% ETP, Due 1/1/25)      5,000        4,908      4,908  
        Term Loan (10.00% cash (Prime + 6.75%; Floor 10.00%), 3.00% ETP, Due 1/1/25)      5,000        4,936      4,936  
        Term Loan (10.00% cash (Prime + 6.75%; Floor 10.00%), 3.00% ETP, Due 1/1/25)      3,000        2,961      2,961  

Betabrand Corporation (2)(12)

780 Valencia St.

San Francisco, CA 94110

  Consumer-related Technologies   Term Loan (10.05% cash (Libor + 7.50%; Floor 10.05%), 5.75% ETP, Due 9/1/23)      3,825        3,774      3,774  
        Term Loan (10.05% cash (Libor + 7.50%; Floor 10.05%), 5.75% ETP, Due 9/1/23)      3,825        3,780      3,780  
        Term Loan (10.05% cash (Libor + 7.50%; Floor 10.05%), 5.75% ETP, Due 9/1/23)      1,013        987      987  

Clara Foods Co. (2)(12)

1 Tower Place, Suite 800

South San Francisco, CA 94080

  Consumer-related Technologies   Term Loan (9.00% cash (Prime + 5.75%; Floor 9.00%), 5.50% ETP, Due 8/1/25)      2,500        2,442      2,442  
        Term Loan (9.00% cash (Prime + 5.75%; Floor 9.00%), 5.50% ETP, Due 8/1/25)      2,500        2,471      2,471  

Getaround, Inc. (2)(12)

55 Green Street

San Francisco, CA 94111

  Consumer-related Technologies   Term Loan (10.50% cash (Prime + 7.25%; Floor 10.50%), 4.50% ETP, Due 12/1/24)      10,000        9,809      9,809  
        Term Loan (10.50% cash (Prime + 7.25%; Floor 10.50%), 4.50% ETP, Due 12/1/24)      4,000        3,864      3,864  
        Term Loan (10.50% cash (Prime + 7.25%; Floor 10.50%), 4.50% ETP, Due 12/1/24)      4,000        3,864      3,864  
        Term Loan (10.50% cash (Prime + 7.25%; Floor 10.50%), 4.50% ETP, Due 12/1/24)      3,500        3,404      3,404  
        Term Loan (10.50% cash (Prime + 7.25%; Floor 10.50%), 4.50% ETP, Due 12/1/24)      3,500        3,404      3,404  

Primary Kids, Inc. (2)(12)

158 West 27th Street, 6th Floor

New York, NY 10010

  Consumer-related Technologies   Term Loan (10.50% cash (Prime + 7.25%; Floor 10.50%), 3.00% ETP, Due 3/1/25)      3,000        2,933      2,933  
        Term Loan (10.50% cash (Prime + 7.25%; Floor 10.50%), 3.00% ETP, Due 3/1/25)      3,000        2,952      2,952  

Quip NYC Inc.

45 Main Street, Suite 630

Brooklyn, NY 11201

  Consumer-related Technologies   Term Loan (11.25% cash (Prime + 8.00%; Floor 11.25%), 3.00% ETP, Due 4/1/26)      10,000        9,575      9,575  

Updater, Inc. (2)(12)

19 Union Square West, 12th Floor

New York, NY 10001

  Consumer-related Technologies   Term Loan (12.00% cash (Prime + 5.75%; Floor 12.00%, Ceiling 14.00%),0.56% ETP, Due 12/20/24)      5,000        4,951      4,951  
        Term Loan (12.00% cash (Prime + 5.75%; Floor 12.00%, Ceiling 14.00%), 0.56% ETP, Due 12/20/24)      5,000        4,951      4,951  
        Term Loan (12.00% cash (Prime + 5.75%; Floor 12.00%, Ceiling 14.00%), 0.56% ETP, Due 12/20/24)      10,000        9,903      9,903  

Silk, Inc. (2)(12)

75 Second Avenue, Suite 620

Needham, MA 02494

  Data Storage   Term Loan (10.65% cash (Libor + 8.40%; Floor 10.65%), 4.00% ETP, Due 1/1/23)      3,667        3,631      3,631  
        Term Loan (10.65% cash (Libor + 8.40%; Floor 10.65%), 4.00% ETP, Due 1/1/23)      3,667        3,631      3,631  
        Term Loan (10.65% cash (Libor + 8.40%; Floor 10.65%), 4.00% ETP, Due 7/1/23)      4,667        4,564      4,563  

Liqid, Inc.(2)(12)

339 Interlocken Parkway, Suite 200

Broomfield, CO 80021

  Networking   Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 4.00% ETP, Due 9/1/24)      5,000        4,876      4,876  
        Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 4.00% ETP, Due 9/1/24)      5,000        4,903      4,903  
        Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 4.00% ETP, Due 9/1/24)      2,500        2,448      2,448  

 20

 
                               
            Principal     Cost of   Fair  
Portfolio Company (1)(3)   Sector   Type of Investment (4)(7)(9)(10)   Amount     Investments (6)   Value  
        Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 4.00% ETP, Due 9/1/24)      2,500        2,448      2,448  

BriteCore Holdings, Inc. (2)(12)

1522 S. Glenstone

Springfield, MO 65808

  Software   Term Loan (10.50% cash (Prime + 7.25%; Floor 10.50%), 4.00% ETP, Due 10/1/24)      2,500        2,476      2,476  
        Term Loan (10.50% cash (Prime + 7.25%; Floor 10.50%), 4.00% ETP, Due 10/1/24)      2,500        2,476      2,476  

E La Carte, Inc. (2)(12)

810 Hamilton St.

Redwood City, CA 94063

  Software   Term Loan (9.75% cash (Prime + 6.50%; Floor 9.75%), 4.00% ETP, Due 10/1/25)      3,000        2,928      2,928  
        Term Loan (9.75% cash (Prime + 6.50%; Floor 9.75%), 4.00% ETP, Due 10/1/25)      3,000        2,949      2,949  
        Term Loan (9.75% cash (Prime + 6.50%; Floor 9.75%), 4.00% ETP, Due 10/1/25)      1,500        1,475      1,475  

Keypath Education, LLC (2)(12)

1933 N. Meacham Rd., Suite 400

Schaumbug, IL 60173

  Software   Term Loan (10.50% cash (Libor + 8.50%; Floor 10.50%), 2.50% ETP, Due 10/1/24)      3,750        3,587      3,587  
        Term Loan (10.50% cash (Libor + 8.50%; Floor 10.50%), 2.50% ETP, Due 10/1/24)      3,750        3,690      3,690  
        Term Loan (10.50% cash (Libor + 8.50%; Floor 10.50%), 2.50% ETP, Due 10/1/24)      2,500        2,460      2,460  

OutboundEngine, Inc. (2)(12)

98 San Jacinto Blvd., Suite 1300

Austin, TX 78701

  Software   Term Loan (11.15% cash (Libor + 8.40%; Floor 11.15%), 3.63% ETP, Due 7/1/23)      3,600        3,554      3,554  
        Term Loan (11.15% cash (Libor + 8.40%; Floor 11.15%), 3.63% ETP, Due 7/1/23)      3,150        3,110      3,110  
        Term Loan (11.15% cash (Libor + 8.40%; Floor 11.15%), 3.63% ETP, Due 7/1/23)      450        454      446  

Revinate, Inc. (2)(12)

1 Letterman Drive, Suite CM 100

San Francisco, CA 94129

  Software   Term Loan (9.50% cash (Libor + 7.00%; Floor 9.50%), 4.00% ETP, Due 11/1/23)      4,000        3,977      3,910  
        Term Loan (9.50% cash (Libor + 7.00%; Floor 9.50%), 4.00% ETP, Due 11/1/23)      1,000        991      991  
        Term Loan (9.50% cash (Libor + 7.00%; Floor 9.50%), 4.00% ETP, Due 11/1/23)      5,000        4,951      4,951  

Supply Network Visibility Holdings LLC (2)(12)

204 S Union St.

Alexandria, VA 22314

Software   Term Loan (9.75% cash (Prime + 6.50%; Floor 9.75%), 4.00% ETP, Due 2/1/25)      3,500        3,448      3,448  
        Term Loan (9.75% cash (Prime + 6.50%; Floor 9.75%), 4.00% ETP, Due 2/1/25)      3,500        3,448      3,448  

Topia Mobility, Inc. (2)(12)

30 Maiden Lane, Suite 550

San Francisco, CA 94108

  Software   Term Loan (10.00% cash (Prime + 6.75%; Floor 10.00%), 4.00% ETP, Due 9/1/24)      5,000        4,834      4,751  
        Term Loan (10.00% cash (Prime + 6.75%; Floor 10.00%), 4.00% ETP, Due 9/1/24)      5,000        4,908      4,820  

xAd, Inc. (2)(12)

One World Trade Center, 60th Floor

New York, NY 10007

  Software   Term Loan (10.00% cash (Libor + 8.70%; Floor 10.00%), 5.0% ETP, Due 1/1/22)      2,708        2,686      2,686  
        Term Loan (10.00% cash (Libor + 8.70%; Floor 10.00%), 5.0% ETP, Due 1/1/22)      2,708        2,686      2,686  
        Term Loan (10.00% cash (Libor + 8.70%; Floor 10.00%), 5.0% ETP, Due 1/1/22)      1,625        1,612      1,612  
        Term Loan (10.00% cash (Libor + 8.70%; Floor 10.00%), 5.0% ETP, Due 1/1/22)      1,083        1,074      1,074  
Total Non-Affiliate Debt Investments — Technology                  176,144      175,897  
Non-Affiliate Debt Investments — Healthcare information and services                      

IDbyDNA, Inc. (2)(12)

675 Arapeen Drive, Suite 301

Salt Lake City, UT 84108

  Diagnostics   Term Loan (9.00% cash (Prime + 5.75%; Floor 9.00%), 5.50% ETP, Due 1/1/25)      5,000        4,851      4,851  
        Term Loan (9.00% cash (Prime + 5.75%; Floor 9.00%), 5.50% ETP, Due 1/1/25)      5,000        4,919      4,919  

Kate Farms, Inc. (2)(12)

101 Innovation Place

Santa Barbara, CA 93108

  Other Healthcare   Term Loan (9.75% cash (Libor + 7.45%; Floor 9.75%), 5.00% ETP, Due 10/1/23)      5,000        4,946      4,946  
        Term Loan (9.75% cash (Libor + 7.45%; Floor 9.75%), 5.00% ETP, Due 10/1/23)      5,000        4,946      4,946  
        Term Loan (9.75% cash (Libor + 7.45%; Floor 9.75%), 5.00% ETP, Due 10/1/23)      2,500        2,469      2,469  
        Term Loan (9.75% cash (Libor + 7.45%; Floor 9.75%), 5.00% ETP, Due 10/1/23)      2,500        2,469      2,469  
Total Non-Affiliate Debt Investments — Healthcare information and services              24,600      24,600  
Total Non- Affiliate Debt Investments                      356,226      355,935  
Non-Affiliate Warrant Investments                          
Non-Affiliate Warrants — Life Science                          

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

330 N. Wabash

Chicago, IL 60611

  Biotechnology   2,428 Preferred Stock Warrants              144      157  

Celsion Corporation (2)(5)(12)

997 Lenox Drive, Suite 100

Lawrenceville, NJ 08648

  Biotechnology   295,053 Common Stock Warrants              65      117  

Corvium, Inc. (2)(12)

840 Memorial Drive, 4th Floor

Cambridge, MA 02139

  Biotechnology   661,956 Preferred Stock Warrants              53      —  

Emalex Biosciences, Inc. (2)(12)

330 N. Wabash, Suite 3500

Chicago, IL 60611

  Biotechnology   73,602 Preferred Stock Warrants              107      158  

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

99 Eerie Street

Cambridge, MA 02139

  Biotechnology   7,843 Common Stock Warrants              8      2  

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

377 Plantation Street

Worcester, MA 01605

  Biotechnology   252,161 Common Stock Warrants              146      149  

Provivi, Inc. (2)(12)

1701 Colorado Avenue

Santa Monica, CA 90404

  Biotechnology   123,457 Preferred Stock Warrants              147      431  

Rocket Pharmaceuticals Corporation (5)(12)

131 Hartwell Avenue, Suite 105

Lexington, MA 02421

  Biotechnology   7,051 Common Stock Warrants              16      138  

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

900 Northbrook Drive, Suite 200

Trevose, PA 19053

  Biotechnology   160,714 Common Stock Warrants              70      93  

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

4170 Mendenhall Oaks Parkway

High Point, NC 27265

  Biotechnology   95,293 Common Stock Warrants              44      1  

 21

 
                  Cost of   Fair  
Portfolio Company (1)(3)   Sector   Type of Investment (4)(7)(9)(10)         Investments (6)   Value  

AccuVein Inc. (2)(12)

40 Goose Hill Road

Cold Spring Harbor, NY 11724

  Medical Device   1,175 Common Stock Warrants              24      —  

Aerin Medical, Inc. (2)(12)

232 E. Caribbean Drive

Sunnyvale, CA 94089

  Medical Device   1,818,183 Preferred Stock Warrants              66      466  

Bardy Diagnostics, Inc. (2)(12)

316 Occidental Avenue South

Seattle, WA 98104

  Medical Device   360,000 Preferred Stock Warrants              56      672  

Canary Medical Inc. (2)(12)

2710 Loker Avenue West

Carlsbad, CA 92010

  Medical Device   7,292 Preferred Stock Warrants              54      56  

Ceribell, Inc. (2)(12)

2483 Old Middlefield Way, Suite 120

Mount View, CA 94043

  Medical Device   117,521 Preferred Stock Warrants              50      119  

Conventus Orthopaedics, Inc. (2)(12)

10200 73rd Avenue North, Suite 122

Maple Grove, MN 55369

  Medical Device   6,361,111 Preferred Stock Warrants              149      179  

CSA Medical, Inc. (2)(12)

91 Hartwell Avenue

Lexington, MA 02421

  Medical Device   1,375,727 Preferred Stock Warrants              153      155  

CVRx, Inc.(2)(12)

9201 W. Broadway Ave, #650

Minneapolis, MN 55445

  Medical Device   750,000 Preferred Stock Warrants              76      76  

Infobionic, Inc. (2)(12)

400 Totten Pond Road, Suite 315

Waltham, MA 02451

  Medical Device   317,647 Preferred Stock Warrants              124      124  

MacuLogix, Inc. (2)(12)

1801 Oberlin Road, Suite 301

Middletown, PA 17057

  Medical Device   454,460 Preferred Stock Warrants              236      119  

Magnolia Medical Technologies, Inc. (2)(12)

200 West Mercer Street, Suite 500

Seattle, WA 98119

  Medical Device   378,363 Preferred Stock Warrants              91      94  

Meditrina, Inc. (2)(12)

1601 S. De Anza Blvd., Suite 165

Cupertino, CA 95014

  Medical Device   221,510 Preferred Stock Warrants              83      123  

Sonex Health, Inc. (2)(12)

950 Blue Gentian Rd., Suite 200

Eagan, MN 55121

  Medical Device   484,250 Preferred Stock Warrants              78      79  

VERO Biotech LLC (2)(12)

2941 Oxbow Circle

Cocoa, FL 32929

  Medical Device   408 Preferred Stock Warrants              54      52  
Total Non-Affiliate Warrants — Life Science                      2,094      3,560  
Non-Affiliate Warrants — Technology                          

Intelepeer Holdings, Inc. (2)(12)

155 Bovet Road, Suite 405

San Mateo, CA 94402

  Communications   3,078,084 Preferred and Common Stock Warrants              138      186  

PebblePost, Inc. (2)(12)

36 Cooper Square, 4th Floor

New York, NY 10003

  Communications   598,850 Preferred Stock Warrants              92      167  

Alula Holdings, Inc. (2)(12)

2340 Energy Park Drive, Suite 100

St. Paul, MN 55108

  Consumer-related Technologies   20,000 Preferred Stock Warrants              93      94  

Betabrand Corporation (2)(12)

780 Valencia St.

San Francisco, CA 94110

  Consumer-related Technologies   261,198 Preferred Stock Warrants              106      12  

Caastle, Inc. (2)(12)

43-01 22nd Street

Long Island City, NY 11101

  Consumer-related Technologies   268,591 Preferred Stock Warrants              68      823  

Clara Foods Co. (2)(12)

1 Tower Place, Suite 800

South San Francisco, CA 94080

  Consumer-related Technologies   46,745 Preferred Stock Warrants              30      30  

Getaround, Inc. (2)(12)

55 Green Street

San Francisco, CA 94111

  Consumer-related Technologies   651,040 Preferred Stock Warrants              450      462  

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

37 East 18th St., 7th Floor

New York, NY 10003

  Consumer-related Technologies   76,923 Common Stock Warrants              195      1,115  

Primary Kids, Inc. (2)(12)

158 West 27th Street, 6th Floor

New York, NY 10010

  Consumer-related Technologies   553,778 Preferred Stock Warrants              57      57  

Quip NYC Inc. (2)(12)

45 Main Street, Suite 630

Brooklyn, NY 11201

  Consumer-related Technologies   6,191 Preferred Stock Warrants              325      325  

Updater, Inc.(2)(12)

19 Union Square West, 12th Floor

New York, NY 10001

  Consumer-related Technologies   108,333 Common Stock Warrants              34      72  

CPG Beyond, Inc. (2)(12)

2077 Convention Center Concourse, Suite 425

Atlanta, GA 30337

  Data Storage   500,000 Preferred Stock Warrants              242      704  

Silk, Inc. (2)(12)

75 Second Avenue, Suite 620

Needham, MA 02494

  Data Storage   44,211,003 Preferred and Common Stock Warrants              233      202  

Global Worldwide LLC (2)(12)

333 Bush Street, 19th Floor

San Francisco, CA 94104

  Internet and Media   245,810 Preferred Stock Warrants              75      9  

Rocket Lawyer Incorporated (2)(12)

182 Howard Street, Suite #830

San Francisco, CA 9410

  Internet and Media   261,721 Preferred Stock Warrants              92      89  

Skillshare, Inc. (2)(12)

35 East 21st, 5th Floor

New York, NY 10012

  Internet and Media   139,073 Preferred Stock Warrants              162      2,412  

Liqid, Inc.(2)(12)

339 Interlocken Parkway, Suite 200

Broomfield, CO 80021

  Networking   284,599 Preferred Stock Warrants              189      193  

Kinestral, Inc. (2)(12)

3955 Trust Way

Hayward, CA 94545

  Power Management   5,002,574 Preferred Stock Warrants              1,585      1,326  

Avalanche Technology, Inc. (2)(12)

43871 Fremont Boulevard, Suite 101

Fremont, CA 94538

  Semiconductors   6,753 Preferred and Common Stock Warrants              101      —  

BriteCore Holdings, Inc. (2)(12)

1522 S. Glenstone

Springfield, MO 65808

  Software   12,857 Preferred Stock Warrants              5      11  

E La Carte, Inc. (2)(12)

810 Hamilton St.

Redwood City, CA 94063

  Software   181,947 Preferred Stock Warrants              60      60  

Education Elements, Inc. (2)(12)

999 Skyway Road

San Carlos, CA 94070

  Software   238,121 Preferred Stock Warrants              28      27  

Keypath Education, Inc.(2)(12)

1933 N. Meacham Rd., Suite 400

Schaumbug, IL 60173

  Software   900,000 Preferred Stock Warrants              157      513  

Lotame Solutions, Inc. (2)(12)

8850 Stanford Blvd, Suite 2000

Columbus, MD 21045

  Software   288,115 Preferred Stock Warrants              19      276  

OutboundEngine, Inc. (2)(12)

98 San Jacinto Blvd., Suite 1300

Austin, TX 78701

  Software   620,000 Preferred Stock Warrants              80      33  

Revinate, Inc. (2)(12)

1 Letterman Drive, Suite CM 100

San Francisco, CA 94129

  Software   615,475 Preferred Stock Warrants              45      54  

Riv Data Corp. (2)(12)

735 State Street, Suite 600

Santa Barbara, CA 93101

  Software   321,428 Preferred Stock Warrants              13      287  

SIGNiX, Inc. (12)

1203 Carter St.

Chattanooga, TN 37402

  Software   186,045 Preferred Stock Warrants              225      —  

Skyword, Inc. (12)

38 Chauncy Street

Boston, MA 02111

  Software   301,055 Preferred and Common Stock Warrants              49      8  

Supply Network Visibility Holdings LLC (2)(12)

204 S Union St.

Alexandria, VA 22314

Software   398 Preferred Stock Warrants              38      38  

Topia Mobility, Inc. (2)(12)

30 Maiden Lane, Suite 550

San Francisco, CA 94108

  Software   3,049,607 Preferred Stock Warrants              139      —  

xAd, Inc. (2)(127)

One World Trade Center, 60th Floor

New York, NY 10007

  Software   4,343,348 Preferred Stock Warrants              178      3  
Total Non-Affiliate Warrants — Technology                      5,303      9,588  
Non-Affiliate Warrants — Healthcare information and services                      

IDbyDNA, Inc.(2)(12)

675 Arapeen Drive, Suite 301

Salt Lake City, UT 84108

  Diagnostics   363,082 Preferred Stock Warrants              91      93  

Kate Farms, Inc. (2)(12)

101 Innovation Place

Santa Barbara, CA 93108

  Other Healthcare   82,965 Preferred Stock Warrants              102      1,176  

Watermark Medical, Inc. (2)(12)

1641 Worthington Road, Suite 320

West Palm Beach, FL 33409

  Other Healthcare   27,373 Preferred Stock Warrants              74      —  

Medsphere Systems Corporation (2)(12)

1903 Wright Place, Suite 120

Carlsbad, CA 92008

  Software   7,097,792 Preferred Stock Warrants              60      196  
Total Non-Affiliate Warrants — Healthcare information and services                  327      1,465  
Total Non-Affiliate Warrants                      7,724      14,613  
                               
Non-Affiliate Other Investments