Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form 10-Q


(Mark One)

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

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021

OR

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

FOR THE TRANSITION PERIOD FROM _____TO

COMMISSION FILE NUMBER: 814-00802


HORIZON TECHNOLOGY FINANCE CORPORATION

(Exact name of registrant as specified in its charter)


DELAWARE

27-2114934

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

312 Farmington Avenue

Farmington, CT

06032

(Address of principal executive offices)

(Zip Code)

(860) 676-8654

(Registrant’s telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act

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

The number of shares of the registrant’s common stock traded under the symbol “HRZN” on the Nasdaq Global Select Market, $0.001 par value per share, outstanding as of October 26, 2021 was 20,427,243.

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

Title of each class

    

Ticker symbol(s)

    

Name of each exchange on which registered

Common Stock, par value $0.001 per share

HRZN

The Nasdaq Stock Market LLC

4.875% Notes due 2026

HTFB

The New York Stock Exchange


Table of Contents

HORIZON TECHNOLOGY FINANCE CORPORATION

FORM 10-Q

TABLE OF CONTENTS

Page

PART I

Item 1

Consolidated Financial Statements.

3

Consolidated Statements of Assets and Liabilities as of September 30, 2021 (unaudited) and December 31, 2020

3

Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020 (unaudited)

4

Consolidated Statements of Changes in Net Assets for the three and nine months ended September 30, 2021 and 2020 (unaudited)

5

Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020 (unaudited)

6

Consolidated Schedules of Investments as of September 30, 2021 (unaudited) and December 31, 2020

7

Notes to the Consolidated Financial Statements (unaudited)

18

Item 2.

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

45

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

63

Item 4.

Controls and Procedures

64

PART II

65

Item 1.

Legal Proceedings

65

Item 1A.

Risk Factors

65

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

65

Item 3.

Defaults Upon Senior Securities

65

Item 4.

Mine Safety Disclosures

65

Item 5.

Other Information

65

Item 6.

Exhibits

66

Signatures

67

EX-31.1

EX-31.2

EX-32.1

EX-32.2

2


Table of Contents

PART I: FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Statements of Assets and Liabilities

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

September 30, 

December 31, 

    

2021

    

2020

Assets

 

(Unaudited)

 

  

Non-affiliate investments at fair value (cost of $437,919 and $343,158, respectively)

$

448,421

$

343,498

Non-controlled affiliate investments at fair value (cost of $3,820 and $6,854, respectively) (Note 5)

 

2,800

 

7,547

Controlled affiliate investments at fair value (cost of $1,450 and $1,500, respectively) (Note 5)

 

1,125

 

1,500

Total investments at fair value (cost of $443,189 and $351,512, respectively) (Note 4)

 

452,346

 

352,545

Cash

 

20,817

 

19,502

Investments in money market funds

 

22,057

 

27,199

Restricted investments in money market funds

 

1,504

 

1,057

Interest receivable

 

6,397

 

4,946

Other assets

 

2,652

 

1,908

Total assets

$

505,773

$

407,157

Liabilities

 

  

 

  

Borrowings (Note 7)

$

257,852

$

185,819

Distributions payable

 

6,128

 

5,786

Base management fee payable (Note 3)

 

698

 

563

Incentive fee payable (Note 3)

 

2,012

 

975

Other accrued expenses

 

1,493

 

1,417

Total liabilities

 

268,183

 

194,560

Commitments and contingencies (Note 8)

 

  

 

  

Net assets

 

  

 

  

Preferred stock, par value $0.001 per share, 1,000,000 shares authorized, zero shares issued and outstanding as of September 30, 2021 and December 31, 2020

 

 

Common stock, par value $0.001 per share, 100,000,000 shares authorized, 20,592,640 and 19,453,821 shares issued and 20,425,175 and 19,286,356 shares outstanding as of September 30, 2021 and December 31, 2020, respectively

 

21

 

19

Paid-in capital in excess of par

 

288,861

 

271,287

Distributable earnings

 

(51,292)

 

(58,709)

Total net assets

 

237,590

 

212,597

Total liabilities and net assets

$

505,773

$

407,157

Net asset value per common share

$

11.63

$

11.02

See Notes to Consolidated Financial Statements

3


Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Statements of Operations (Unaudited)

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

For the Three Months Ended

For the Nine Months Ended

September 30, 

September 30, 

    

2021

    

2020

    

2021

    

2020

    

Investment income

 

  

 

  

 

  

 

  

 

Interest income on investments

 

  

 

  

 

  

 

  

 

Interest income on non-affiliate investments

$

14,035

$

10,974

 

$

38,965

$

32,286

Interest income on affiliate investments

 

 

175

 

 

213

 

532

Total interest income on investments

 

14,035

 

11,149

 

 

39,178

 

32,818

Fee income

 

 

  

 

 

  

 

  

Prepayment fee income on non-affiliate investments

1,204

1,156

 

2,460

1,911

Success fee income on non-affiliate investments

1,100

1,100

Fee income on non-affiliate investments

 

28

 

23

 

 

320

 

1,112

Fee income on affiliate investments

 

 

3

 

 

12

 

10

Total fee income

 

2,332

 

1,182

 

 

3,892

 

3,033

Dividend income

 

  

 

  

 

 

  

 

  

Dividend income on controlled affiliate investments

 

 

 

 

 

118

Total dividend income

 

 

 

 

 

118

Total investment income

 

16,367

 

12,331

 

 

43,070

 

35,969

Expenses

 

  

 

  

 

 

  

 

  

Interest expense

 

3,112

 

2,607

 

 

8,781

 

7,331

Base management fee (Note 3)

 

1,997

 

1,616

 

 

5,595

 

4,865

Performance based incentive fee (Note 3)

 

2,012

 

1,465

 

 

5,040

 

4,212

Administrative fee (Note 3)

 

251

 

234

 

 

829

 

740

Professional fees

 

559

 

247

 

 

1,348

 

1,095

General and administrative

 

333

 

302

 

 

1,142

 

877

Total expenses

 

8,264

 

6,471

 

 

22,735

 

19,120

Net investment income before excise tax

 

8,103

 

5,860

 

 

20,335

 

16,849

Provision for excise tax

 

56

 

 

 

174

 

Net investment income

 

8,047

 

5,860

 

 

20,161

 

16,849

Net realized and unrealized gain (loss)

 

  

 

  

 

 

  

 

  

Net realized gain (loss) on non-affiliate investments

 

1,344

 

1,178

 

 

(2,372)

 

3,957

Net realized loss on controlled affiliate investments

 

(12)

Net realized gain (loss) on investments

 

1,344

 

1,178

 

 

(2,372)

 

3,945

Net realized loss on extinguishment of debt

 

(395)

Net realized gain (loss)

1,344

1,178

 

(2,767)

3,945

Net unrealized appreciation (depreciation) on non-affiliate investments

 

3,929

 

(10,629)

 

 

10,314

 

(15,435)

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

 

(228)

 

341

 

 

(1,867)

 

(1,134)

Net unrealized depreciation on controlled affiliate investments

 

(325)

 

 

 

(325)

 

(258)

Net unrealized appreciation (depreciation) on investments

 

3,376

 

(10,288)

 

 

8,122

 

(16,827)

Net realized and unrealized gain (loss)

 

4,720

 

(9,110)

 

 

5,355

 

(12,882)

Net increase (decrease) in net assets resulting from operations

$

12,767

$

(3,250)

 

$

25,516

$

3,967

Net investment income per common share

$

0.40

$

0.34

 

$

1.02

$

0.98

Net increase (decrease) in net assets per common share

$

0.63

$

(0.19)

 

$

1.29

$

0.23

Distributions declared per share

$

0.30

$

0.30

 

$

0.90

$

0.95

Weighted average shares outstanding

 

20,269,813

 

17,245,662

 

 

19,826,790

 

17,111,359

See Notes to Consolidated Financial Statements

4


Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Statements of Changes in Net Assets (Unaudited)

(Dollars in thousands, except share data)

Paid-In Capital

Common Stock

in Excess of

Distributable

Total Net

    

Shares

    

Amount

    

Par

    

Earnings

    

Assets

Balance at June 30, 2020

 

17,291,770

$

17

$

247,924

(46,709)

$

201,232

Issuance of common stock, net of offering costs

1,069,259

2

12,666

12,668

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

 

  

 

 

  

 

  

 

  

Net investment income, net of excise tax

 

 

 

 

5,860

 

5,860

Net realized gain on investments

 

 

 

 

1,178

 

1,178

Net unrealized depreciation on investments

 

 

 

 

(10,288)

 

(10,288)

Issuance of common stock under dividend reinvestment plan

 

4,884

 

 

59

 

 

59

Distributions declared

 

 

 

 

(5,538)

 

(5,538)

Balance at September 30, 2020

 

18,365,913

19

260,649

(55,497)

205,171

Balance at June 30, 2021

20,024,241

20

282,136

(57,892)

224,264

Issuance of common stock, net of offering costs

 

395,068

 

1

 

6,624

 

 

6,625

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

 

  

 

  

 

  

 

  

 

  

Net investment income, net of excise tax

 

8,047

8,047

Net realized gain on investments

 

 

 

 

1,344

 

1,344

Net unrealized appreciation on investments

 

 

 

 

3,376

 

3,376

Issuance of common stock under dividend reinvestment plan

 

5,866

 

 

101

 

 

101

Distributions declared

 

 

 

 

(6,167)

 

(6,167)

Balance at September 30, 2021

 

20,425,175

$

21

$

288,861

$

(51,292)

$

237,590

Paid-In Capital

Common Stock

in Excess of

Distributable

Total Net

    

Shares

    

Amount

    

Par

    

Earnings

    

Assets

Balance at December 31, 2019

 

15,563,290

16

226,660

(42,621)

$

184,055

Issuance of common stock, net of offering costs

 

2,787,160

 

3

 

33,813

 

 

33,816

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

 

  

 

  

 

  

 

  

 

  

Net investment income, net of excise tax

 

16,849

16,849

Net realized gain on investments

 

 

 

 

3,945

 

3,945

Net unrealized depreciation on investments

 

 

 

 

(16,827)

 

(16,827)

Issuance of common stock under dividend reinvestment plan

 

15,463

 

 

176

 

 

176

Distributions declared

 

 

 

 

(16,843)

 

(16,843)

Balance at September 30, 2020

 

18,365,913

19

260,649

(55,497)

205,171

Balance at December 31, 2020

19,286,356

19

271,287

(58,709)

$

212,597

Issuance of common stock, net of offering costs

 

1,122,516

 

2

 

17,312

 

 

17,314

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

 

  

 

  

 

  

 

  

 

  

Net investment income, net of excise tax

 

20,161

20,161

Net realized loss on investments

 

 

 

 

(2,372)

 

(2,372)

Net realized loss on extinguishment of debt

(395)

(395)

Net unrealized appreciation on investments

 

 

 

 

8,122

 

8,122

Issuance of common stock under dividend reinvestment plan

 

16,303

 

 

262

 

 

262

Distributions declared

 

 

 

 

(18,099)

 

(18,099)

Balance at September 30, 2021

 

20,425,175

$

21

$

288,861

$

(51,292)

$

237,590

See Notes to Consolidated Financial Statements

5


Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands)

For the nine months ended September 30, 

    

2021

    

2020

Cash flows from operating activities:

 

  

 

  

Net increase in net assets resulting from operations

$

25,516

$

3,967

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

 

 

Amortization of debt issuance costs

 

744

 

782

Net realized loss (gain) on investments

 

2,372

 

(3,945)

Net realized loss on extinguishment of debt

395

Net unrealized (appreciation) depreciation on investments

 

(8,122)

 

16,827

Purchase of investments

 

(217,252)

 

(121,648)

Principal payments received on investments

 

119,260

 

111,129

Proceeds from sale of investments

5,285

8,200

Dividends from controlled affiliate investment

 

 

(118)

Warrants received in settlement of fee income

 

 

(978)

Changes in assets and liabilities:

 

  

 

  

(Increase) decrease in interest receivable

 

(661)

 

519

Increase in end-of-term payments

 

(1,100)

 

(1,218)

Decrease in unearned income

 

(854)

 

(1,666)

(Increase) decrease in other assets

 

(507)

 

119

Increase in other accrued expenses

 

76

 

118

Increase (decrease) in base management fee payable

 

135

 

(9)

Increase (decrease) in incentive fee payable

 

1,037

 

(148)

Net cash (used in) provided by operating activities

 

(73,676)

 

11,931

Cash flows from financing activities:

 

  

 

  

Proceeds from issuance of senior notes

57,500

Repayment of 2022 Notes

(37,375)

Proceeds from issuance of common stock, net of offering costs

 

17,312

 

33,816

Advances on Credit Facilities

 

89,000

 

58,250

Repayment of Credit Facilities

 

(36,000)

 

(47,000)

Debt issuance costs

(2,648)

(890)

Distributions paid

 

(17,493)

 

(15,826)

Net cash provided by financing activities

 

70,296

 

28,350

Net (decrease) increase in cash, cash equivalents and restricted cash

 

(3,380)

 

40,281

Cash, cash equivalents and restricted cash:

 

  

 

  

Beginning of period

 

47,758

 

17,385

End of period

$

44,378

$

57,666

Supplemental disclosure of cash flow information:

 

  

 

  

Cash paid for interest

$

7,785

$

6,296

Supplemental non-cash investing and financing activities:

 

  

 

  

Warrant investments received and recorded as unearned income

$

2,924

$

893

Distributions payable

$

6,128

$

5,510

Acquisition of controlled affiliate investment

16,498

End-of-term payments receivable

$

4,993

$

5,118

Non-cash income

$

3,523

$

4,701

Nine months ended September 30, 

    

2021

    

2020

Cash

$

20,817

$

34,130

Investments in money market funds

 

22,057

 

22,735

Restricted investments in money market funds

 

1,504

 

801

Total cash, cash equivalents and restricted cash

$

44,378

$

57,666

See Notes to Consolidated Financial Statements

6


Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments (Unaudited)

September 30, 2021

(Dollars in thousands)

    

    

    

Principal

    

Cost of

    

Fair

Portfolio Company (1)(3)

Sector

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

    

Amount

    

Investments (6)

    

Value

Non-Affiliate Investments — 188.7% (8)

 

  

 

  

 

  

 

  

 

  

Non-Affiliate Debt Investments — 179.8% (8)

 

  

 

  

 

  

 

  

Non-Affiliate Debt Investments — Life Science — 77.8% (8)

 

  

 

  

 

  

 

  

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

Biotechnology

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

$

5,000

$

4,952

$

4,952

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

5,000

4,952

4,952

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

5,000

4,952

4,952

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

5,000

4,952

4,952

Avalo Therapeutics, Inc. (2)(5)(12)

Biotechnology

Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 3.0% ETP, Due 1/1/25)

5,000

4,901

4,901

Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 3.0% ETP, Due 1/1/25)

5,000

4,901

4,901

Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 3.0% ETP, Due 1/1/25)

2,500

2,451

2,451

Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 3.0% ETP, Due 2/1/25)

5,000

4,899

4,899

Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 3.0% ETP, Due 2/1/25)

5,000

4,899

4,899

Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 3.0% ETP, Due 4/1/25)

2,500

2,447

2,447

Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 3.0% ETP, Due 4/1/25)

2,500

2,447

2,447

Emalex Biosciences, Inc. (2)(12)

Biotechnology

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

2,500

2,365

2,365

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

2,500

2,469

2,469

F-Star Therapeutics, Inc. (2)(5)(12)

Biotechnology

Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 4.00% ETP, Due 4/1/25)

2,500

2,463

2,463

Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 4.00% ETP, Due 7/1/25)

2,500

2,463

2,463

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

Biotechnology

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

5,000

4,426

4,426

Provivi, Inc. (2)(12)

Biotechnology

Term Loan (9.50% cash (Libor + 8.50%; Floor 9.50%), 5.50% ETP, Due 12/1/24)

5,000

4,854

4,854

Term Loan (9.50% cash (Libor + 8.50%; Floor 9.50%), 5.50% ETP, Due 12/1/24)

5,000

4,929

4,929

Term Loan (9.50% cash (Libor + 8.50%; Floor 9.50%), 5.50% ETP, Due 12/1/24)

2,500

2,435

2,435

Term Loan (9.50% cash (Libor + 8.50%; Floor 9.50%), 5.50% ETP, Due 12/1/24)

2,500

2,435

2,435

Stealth Biotherapeutics, Inc. (2)(5)(12)

Biotechnology

Term Loan (8.75% cash (Prime + 5.50%; Floor 8.75%), 6.0% ETP, Due 10/1/25)

5,000

4,625

4,625

Term Loan (8.75% cash (Prime + 5.50%; Floor 8.75%), 6.0% ETP, Due 10/1/25)

2,500

2,439

2,439

Canary Medical Inc. (2)(12)

Medical Device

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

2,500

2,390

2,390

Ceribell, Inc. (2)(12)

Medical Device

Term Loan (8.25% cash (Libor + 6.70%; Floor 8.25%), 5.50% ETP, Due 10/1/24)

5,000

4,890

4,890

Term Loan (8.25% cash (Libor + 6.70%; Floor 8.25%), 5.50% ETP, Due 10/1/24)

5,000

4,954

4,954

Conventus Orthopaedics, Inc. (2)(12)

 

Medical Device

 

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

 

4,346

 

4,295

 

4,295

 

 

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

 

4,346

 

4,295

4,295

Corinth Medtech, Inc. (2)(12)

Medical Device

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

2,500

2,490

2,490

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

2,500

2,490

2,490

CSA Medical, Inc. (2)(12)

 

Medical Device

 

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

 

3,500

 

3,465

 

3,465

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

233

231

231

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

4,000

3,966

3,966

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

Medical Device

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

5,000

4,958

4,958

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

5,000

4,958

4,958

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

5,000

4,958

4,958

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

5,000

4,958

4,958

See Notes to Consolidated Financial Statements

7


Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments (Unaudited)

September 30, 2021

(Dollars in thousands)

    

    

    

Principal

    

Cost of

    

Fair

Portfolio Company (1)(3)

Sector

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

    

Amount

Investments (6)

Value

Embody, Inc. (2)(12)

Medical Device

Term Loan (9.75% cash (Prime + 6.50%; Floor 9.75%), 28.00% ETP, Due 8/1/26)

2,500

2,456

2,456

InfoBionic, Inc. (2)(12)

Medical Device

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

3,500

3,350

3,350

MacuLogix, Inc. (2)(12)

 

Medical Device

 

Term Loan (10.08% cash (Libor + 7.68%; Floor 10.08%), 6.00% ETP, Due 9/1/23)

 

7,500

 

7,443

 

7,137

 

 

Term Loan (10.08% cash (Libor + 7.68%; Floor 10.08%), 6.00% ETP, Due 9/1/23)

 

4,050

 

4,019

3,854

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

Medical Device

Term Loan (9.75% cash (Prime + 5.00%; Floor 9.75%), 4.00% ETP, Due 3/1/25)

5,000

4,949

4,949

Term Loan (9.75% cash (Prime + 5.00%; Floor 9.75%), 4.00% ETP, Due 3/1/25)

5,000

4,949

4,949

Term Loan (9.75% cash (Prime + 5.00%; Floor 9.75%), 4.00% ETP, Due 3/1/25)

5,000

4,939

4,939

Term Loan (9.75% cash (Prime + 5.00%; Floor 9.75%), 4.00% ETP, Due 3/1/25)

5,000

4,939

4,939

Sonex Health, Inc. (2)(12)

Medical Device

Term Loan (9.25% cash (Prime + 6.00%; Floor 9.25%), 5.00% ETP, Due 6/1/24)

2,500

2,388

2,388

Term Loan (9.25% cash (Prime + 6.00%; Floor 9.25%), 5.00% ETP, Due 6/1/24)

2,500

2,469

2,469

Term Loan (9.25% cash (Prime + 6.00%; Floor 9.25%), 5.00% ETP, Due 6/1/24)

2,500

2,469

2,469

Spineology, Inc. (2)(12)

Medical Device

Term Loan (10.25% cash (Prime + 7.00%; Floor 10.25%), 1.00% ETP, Due 10/1/25)

5,000

4,925

4,925

Total Non-Affiliate Debt Investments — Life Science

 

  

 

185,249

 

184,778

Non-Affiliate Debt Investments — Sustainability — 19.4% (8)

LiquiGlide, Inc. (2)(12)

Waste Recycling

Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 5.00% ETP, Due 1/1/25)

2,000

1,921

1,921

Nexii Building Solutions, Inc. (2)(12)

Waste Recycling

Term Loan (10.25% cash (Prime + 7.00%; Floor 10.25%), 2.50% ETP, Due 9/1/25)

7,500

7,310

7,310

Term Loan (10.25% cash (Prime + 7.00%; Floor 10.25%), 2.50% ETP, Due 9/1/25)

7,500

7,310

7,310

Term Loan (10.25% cash (Prime + 7.00%; Floor 10.25%), 2.50% ETP, Due 9/1/25)

7,500

7,310

7,310

Temperpack Technologies, Inc. (2)(12)

Waste Recycling

Term Loan (10.00% cash (Prime + 6.75%; Floor 10.00%), 2.50% ETP, Due 6/1/25)

3,750

3,699

3,699

Term Loan (10.00% cash (Prime + 6.75%; Floor 10.00%), 2.50% ETP, Due 6/1/25)

3,750

3,699

3,699

Term Loan (10.00% cash (Prime + 6.75%; Floor 10.00%), 2.50% ETP, Due 10/1/25)

7,500

7,389

7,389

Term Loan (10.00% cash (Prime + 6.75%; Floor 10.00%), 2.50% ETP, Due 10/1/25)

3,750

3,695

3,695

Term Loan (10.00% cash (Prime + 6.75%; Floor 10.00%), 2.50% ETP, Due 10/1/25)

3,750

3,695

3,695

Total Non-Affiliate Debt Investments — Sustainability

46,028

46,028

Non-Affiliate Debt Investments — Technology — 78.5% (8)

Axiom Space, Inc. (2)(12)

Communications

Term Loan (9.25% cash (Prime + 6.00%; Floor 9.25%), 2.50% ETP, Due 6/1/26)

7,500

7,439

7,439

Term Loan (9.25% cash (Prime + 6.00%; Floor 9.25%), 2.50% ETP, Due 6/1/26)

7,500

7,439

7,439

Term Loan (9.25% cash (Prime + 6.00%; Floor 9.25%), 2.50% ETP, Due 6/1/26)

7,500

7,439

7,439

Convertible Note (3.00%, Due 7/1/23)

250

250

250

Alula Holdings, Inc. (2)(12)

Consumer-related Technologies

Term Loan (10.00% cash (Prime + 6.75%; Floor 10.00%), 3.00% ETP, Due 1/1/25)

5,000

4,917

4,917

Term Loan (10.00% cash (Prime + 6.75%; Floor 10.00%), 3.00% ETP, Due 1/1/25)

5,000

4,944

4,944

Term Loan (10.00% cash (Prime + 6.75%; Floor 10.00%), 3.00% ETP, Due 1/1/25)

3,000

2,967

2,967

Betabrand Corporation (2)(12)

Consumer-related Technologies

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

3,494

3,453

3,409

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

3,494

3,458

3,414

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

925

904

893

Clara Foods Co. (2)(12)

Consumer-related Technologies

Term Loan (9.00% cash (Prime + 5.75%; Floor 9.00%), 5.50% ETP, Due 8/1/25)

2,500

2,445

2,445

Term Loan (9.00% cash (Prime + 5.75%; Floor 9.00%), 5.50% ETP, Due 8/1/25)

2,500

2,474

2,474

Getaround, Inc. (2)(12)

Consumer-related Technologies

Term Loan (10.50% cash (Prime + 7.25%; Floor 10.50%), 4.50% ETP, Due 12/1/24)

10,000

9,835

9,835

Term Loan (10.50% cash (Prime + 7.25%; Floor 10.50%), 4.50% ETP, Due 12/1/24)

4,000

3,883

3,883

Term Loan (10.50% cash (Prime + 7.25%; Floor 10.50%), 4.50% ETP, Due 12/1/24)

4,000

3,883

3,883

See Notes to Consolidated Financial Statements

8


Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments (Unaudited)

September 30, 2021

(Dollars in thousands)

    

    

    

Principal

    

Cost of

    

Fair

Portfolio Company (1)(3)

Sector

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

    

Amount

Investments (6)

Value

Term Loan (10.50% cash (Prime + 7.25%; Floor 10.50%), 4.50% ETP, Due 12/1/24)

3,500

3,417

3,417

Term Loan (10.50% cash (Prime + 7.25%; Floor 10.50%), 4.50% ETP, Due 12/1/24)

3,500

3,417

3,417

Lyrical Foods, Inc. (2)(12)

Consumer-related Technologies

Term Loan (10.00% cash (Prime + 6.75%; Floor 10.00%), 9.75% ETP, Due 1/1/24)

2,500

2,478

2,478

Primary Kids, Inc. (2)(12)

Consumer-related Technologies

Term Loan (10.50% cash (Prime + 7.25%; Floor 10.50%), 3.00% ETP, Due 3/1/25)

3,000

2,958

2,958

Term Loan (10.50% cash (Prime + 7.25%; Floor 10.50%), 3.00% ETP, Due 3/1/25)

3,000

2,958

2,958

Term Loan (10.50% cash (Prime + 7.25%; Floor 10.50%), 3.00% ETP, Due 9/1/25)

3,000

2,952

2,952

Quip NYC Inc. (2)(12)

Consumer-related Technologies

Term Loan (11.25% cash (Prime + 8.00%; Floor 11.25%), 3.00% ETP, Due 4/1/26)

10,000

9,618

9,618

Unagi, Inc. (2)(12)

Consumer-related Technologies

Term Loan (11.00% cash (Prime + 7.75%; Floor 11.00%), Due 7/1/25)

2,500

2,434

2,434

Updater, Inc. (2)(12)

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

4,958

4,958

Term Loan (12.00% cash (Prime + 5.75%; Floor 12.00%, Ceiling 14.00%), 0.56% ETP, Due 12/20/24)

5,000

4,958

4,958

Term Loan (12.00% cash (Prime + 5.75%; Floor 12.00%, Ceiling 14.00%), 0.56% ETP, Due 12/20/24)

10,000

9,916

9,916

Liqid, Inc.(2)(12)

Networking

Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 4.00% ETP, Due 9/1/24)

5,000

4,763

4,763

Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 4.00% ETP, Due 9/1/24)

5,000

4,917

4,917

Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 4.00% ETP, Due 9/1/24)

2,500

2,455

2,455

Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 4.00% ETP, Due 9/1/24)

2,500

2,455

2,455

Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 4.00% ETP, Due 9/1/24)

2,500

2,406

2,406

Branded Online, Inc. (2)(12)

Software

Term Loan (9.50% cash (Prime + 6.25%; Floor 9.50%), 6.00% ETP, Due 9/1/26)

5,000

4,566

4,566

BriteCore Holdings, Inc. (2)(12)

Software

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

2,500

2,479

2,479

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

2,500

2,479

2,479

Decisyon, Inc. (12)

 

Software

 

Term Loan (12.50% cash (Libor + 12.308%; Floor 12.50%), 12.00% ETP, Due 6/1/21)

1,182

1,181

1,181

 

 

Term Loan (12.50% cash (Libor + 12.308%; Floor 12.50%), 12.00% ETP, Due 6/1/21)

 

646

 

646

646

 

Term Loan (12.02% cash, Due 6/1/21)

239

227

227

 

 

Term Loan (12.03% cash, Due 6/1/21)

 

238

 

227

227

 

 

Term Loan (12.24% cash, Due 6/1/21)

 

705

 

685

685

 

 

Term Loan (13.08% cash, Due 6/1/21)

 

276

 

276

276

 

 

Term Loan (13.10% cash, Due 6/1/21)

 

184

 

184

184

Dropoff, Inc. (2)(12)

Software

Term Loan (9.75% cash (Prime + 6.50%; Floor 9.75%), 3.50% ETP, Due 4/1/26)

6,500

6,075

6,075

Term Loan (9.75% cash (Prime + 6.50%; Floor 9.75%), 3.50% ETP, Due 4/1/26)

6,000

5,804

5,804

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

Software

Term Loan (9.75% cash (Prime + 6.50%; Floor 9.75%), 4.00% ETP, Due 10/1/25)

3,000

2,934

2,934

Term Loan (9.75% cash (Prime + 6.50%; Floor 9.75%), 4.00% ETP, Due 10/1/25)

3,000

2,955

2,955

Term Loan (9.75% cash (Prime + 6.50%; Floor 9.75%), 4.00% ETP, Due 10/1/25)

1,500

1,476

1,476

Reputation Institute, Inc. (2)(12)

Software

Term Loan (10.50% cash (Prime + 7.25%; Floor 10.50%), 3.00% ETP, Due 8/1/25)

5,000

4,899

4,899

Supply Network Visiblity Holdings LLC (2)(12)

Software

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

3,500

3,455

3,455

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

3,500

3,455

3,455

Topia Mobility, Inc. (2)(12)

Software

Term Loan (10.00% cash (Prime + 6.75%; Floor 10.00%), 4.00% ETP, Due 9/1/24)

5,000

4,922

4,922

Term Loan (10.00% cash (Prime + 6.75%; Floor 10.00%), 4.00% ETP, Due 9/1/24)

5,000

4,922

4,922

Total Non-Affiliate Debt Investments — Technology

 

 

 

186,637

186,538

Non-Affiliate Debt Investments — Healthcare information and services — 4.1% (8)

 

  

 

  

 

  

IDbyDNA, Inc.(2)(12)

Diagnostics

Term Loan (9.00% cash (Prime + 5.75%; Floor 9.00%), 5.50% ETP, Due 1/1/25)

5,000

4,862

4,862

Term Loan (9.00% cash (Prime + 5.75%; Floor 9.00%), 5.50% ETP, Due 1/1/25)

5,000

4,930

4,930

Total Non-Affiliate Debt Investments — Healthcare information and services

 

  

 

9,792

 

9,792

Total Non- Affiliate Debt Investments

 

 

  

 

427,706

 

427,136

See Notes to Consolidated Financial Statements

9


Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments (Unaudited)

September 30, 2021

(Dollars in thousands)

    

    

    

    

Cost of

    

Fair

Portfolio Company (1)(3)