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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022

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 August 2, 2022 was 25,382,424.

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

6.25% Notes due 2027

HTFC

The New York Stock Exchange

Table of Contents

HORIZON TECHNOLOGY FINANCE CORPORATION

FORM 10-Q

TABLE OF CONTENTS

Page

PART I

Item 1

Consolidated Financial Statements.

3

Consolidated Statements of Assets and Liabilities as of June 30, 2022 (unaudited) and December 31, 2021

3

Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021 (unaudited)

4

Consolidated Statements of Changes in Net Assets for the three and six months ended June 30, 2022 and 2021 (unaudited)

5

Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021 (unaudited)

6

Consolidated Schedules of Investments as of June 30, 2022 (unaudited) and December 31, 2021

7

Notes to the Consolidated Financial Statements (unaudited)

20

Item 2.

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

46

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

63

Item 4.

Controls and Procedures

64

PART II

64

Item 1.

Legal Proceedings

64

Item 1A.

Risk Factors

64

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

65

Signatures

66

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)

June 30, 

December 31, 

    

2022

    

2021

(Unaudited)

Assets

 

 

  

Non-affiliate investments at fair value (cost of $575,526 and $452,387, respectively)

$

577,492

$

458,075

Controlled affiliate investments at fair value (cost of $0 and $1,450, respectively) (Note 5)

 

 

Total investments at fair value (cost of $575,526 and $453,837, respectively) (Note 4)

 

577,492

 

458,075

Cash

 

54,353

 

38,054

Investments in money market funds

 

21,959

 

7,868

Restricted investments in money market funds

 

1,583

 

1,359

Interest receivable

 

9,084

 

6,154

Other assets

 

3,445

 

2,450

Total assets

$

667,916

$

513,960

Liabilities

 

  

 

  

Borrowings (Note 7)

$

364,821

$

257,613

Distributions payable

 

7,457

 

6,365

Base management fee payable (Note 3)

 

871

 

706

Incentive fee payable (Note 3)

 

2,145

 

2,015

Other accrued expenses

 

2,017

 

1,926

Total liabilities

 

377,311

 

268,625

Commitments and contingencies (Note 8)

 

  

 

  

Net assets

 

  

 

  

Preferred stock, par value $0.001 per share, 1,000,000 shares authorized, zero shares issued and outstanding as of June 30, 2022 and December 31, 2021

 

 

Common stock, par value $0.001 per share, 100,000,000 shares authorized, 25,024,569 and 21,384,925 shares issued and 24,857,104 and 21,217,460 shares outstanding as of June 30, 2022 and December 31, 2021, respectively

 

26

 

22

Paid-in capital in excess of par

 

350,173

 

301,359

Distributable earnings

 

(59,594)

 

(56,046)

Total net assets

 

290,605

 

245,335

Total liabilities and net assets

$

667,916

$

513,960

Net asset value per common share

$

11.69

$

11.56

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 Six Months Ended

June 30, 

June 30, 

    

2022

    

2021

    

2022

    

2021

    

Investment income

 

  

 

  

 

  

 

  

 

Interest income on investments

 

  

 

  

 

  

 

  

 

Interest income on non-affiliate investments

$

17,720

$

12,420

 

$

31,573

$

24,909

Interest income on affiliate investments

 

 

62

 

 

 

235

Total interest income on investments

 

17,720

 

12,482

 

 

31,573

 

25,144

Fee income

 

 

  

 

 

  

 

  

Prepayment fee income on non-affiliate investments

762

913

 

1,092

1,256

Fee income on non-affiliate investments

 

106

 

94

 

 

127

 

292

Fee income on affiliate investments

 

 

 

 

 

12

Total fee income

 

868

 

1,007

 

 

1,219

 

1,560

Total investment income

 

18,588

 

13,489

 

 

32,792

 

26,704

Expenses

 

  

 

  

 

 

  

 

  

Interest expense

 

4,225

 

2,954

 

 

7,649

 

5,669

Base management fee (Note 3)

 

2,523

 

1,829

 

 

4,767

 

3,598

Performance based incentive fee (Note 3)

 

2,145

 

1,528

 

 

3,570

 

3,029

Administrative fee (Note 3)

 

374

 

289

 

 

735

 

578

Professional fees

 

271

 

280

 

 

848

 

789

General and administrative

 

362

 

442

 

 

706

 

808

Total expenses

 

9,900

 

7,322

 

 

18,275

 

14,471

Net investment income before excise tax

 

8,688

 

6,167

 

 

14,517

 

12,233

Provision for excise tax

 

106

 

56

 

 

206

 

118

Net investment income

 

8,582

 

6,111

 

 

14,311

 

12,115

Net realized and unrealized (loss) gain

 

  

 

  

 

 

  

 

  

Net realized gain (loss) on non-affiliate investments

 

271

 

1,492

 

 

301

 

(3,716)

Net realized loss on controlled affiliate investments

(1,200)

(1,200)

Net realized (loss) gain on investments

 

(929)

 

1,492

 

 

(899)

 

(3,716)

Net realized loss on extinguishment of debt

(395)

 

(395)

Net realized (loss) gain

(929)

1,097

 

(899)

(4,111)

Net unrealized (depreciation) appreciation on non-affiliate investments

 

(1,436)

 

122

 

 

(3,723)

 

6,385

Net unrealized depreciation on non-controlled affiliate investments

 

 

(600)

 

 

 

(1,639)

Net unrealized appreciation on controlled affiliate investments

1,400

1,450

Net unrealized (depreciation) appreciation on investments

 

(36)

 

(478)

 

 

(2,273)

 

4,746

Net realized and unrealized (loss) gain

 

(965)

 

619

 

 

(3,172)

 

635

Net increase in net assets resulting from operations

$

7,617

$

6,730

 

$

11,139

$

12,750

Net investment income per common share

$

0.35

$

0.31

 

$

0.62

$

0.62

Net increase in net assets resulting from operations per common share

$

0.31

$

0.34

 

$

0.48

$

0.65

Distributions declared per share

$

0.30

$

0.30

 

$

0.60

$

0.60

Weighted average shares outstanding

 

24,301,762

 

19,834,050

 

 

23,109,584

 

19,601,607

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 March 31, 2021

 

19,657,815

$

20

$

276,239

(58,588)

$

217,671

Issuance of common stock, net of offering costs

361,308

5,811

5,811

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

 

  

 

 

  

 

  

 

  

Net investment income, net of excise tax

 

 

 

 

6,111

 

6,111

Net realized gain on investments

 

 

 

 

1,492

 

1,492

Net realized loss on extinguishment of debt

(395)

(395)

Net unrealized depreciation on investments

 

 

 

 

(478)

 

(478)

Issuance of common stock under dividend reinvestment plan

 

5,118

 

 

86

 

 

86

Distributions declared

 

 

 

 

(6,034)

 

(6,034)

Balance at June 30, 2021

 

20,024,241

20

282,136

(57,892)

224,264

Balance at March 31, 2022

23,977,137

25

339,688

(59,724)

279,989

Issuance of common stock, net of offering costs

 

868,230

 

1

 

10,340

 

 

10,341

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

 

  

 

  

 

  

 

  

 

  

Net investment income, net of excise tax

 

8,582

8,582

Net realized loss on investments

 

 

 

 

(929)

 

(929)

Net unrealized depreciation on investments

 

 

 

 

(36)

 

(36)

Issuance of common stock under dividend reinvestment plan

 

11,737

 

 

145

 

 

145

Distributions declared

 

 

 

 

(7,487)

 

(7,487)

Balance at June 30, 2022

 

24,857,104

$

26

$

350,173

$

(59,594)

$

290,605

Paid-In Capital

Common Stock

in Excess of

Distributable

Total Net

    

Shares

    

Amount

    

Par

    

Earnings

    

Assets

Balance at December 31, 2020

 

19,286,356

$

19

$

271,287

$

(58,709)

$

212,597

Issuance of common stock, net of offering costs

 

727,448

 

1

 

10,688

 

 

10,689

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

 

  

 

  

 

  

 

  

 

  

Net investment income, net of excise tax

 

12,115

12,115

Net realized loss on investments

 

 

 

 

(3,716)

 

(3,716)

Net realized loss on extinguishment of debt

(395)

(395)

Net unrealized appreciation on investments

 

 

 

 

4,746

 

4,746

Issuance of common stock under dividend reinvestment plan

 

10,437

 

 

161

 

 

161

Distributions declared

 

 

 

 

(11,933)

 

(11,933)

Balance at June 30, 2021

 

20,024,241

20

282,136

(57,892)

224,264

Balance at December 31, 2021

21,217,460

22

301,359

(56,046)

$

245,335

Issuance of common stock, net of offering costs

 

3,618,401

 

4

 

48,524

 

 

48,528

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

 

  

 

  

 

  

 

  

 

  

Net investment income, net of excise tax

 

14,311

14,311

Net realized loss on investments

 

 

 

 

(899)

 

(899)

Net unrealized depreciation on investments

 

 

 

 

(2,273)

 

(2,273)

Issuance of common stock under dividend reinvestment plan

 

21,243

 

 

290

 

 

290

Distributions declared

 

 

 

 

(14,687)

 

(14,687)

Balance at June 30, 2022

 

24,857,104

$

26

$

350,173

$

(59,594)

$

290,605

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 six months ended June 30, 

    

2022

    

2021

Cash flows from operating activities:

 

  

 

  

 

Net increase in net assets resulting from operations

$

11,139

$

12,750

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

 

 

Amortization of debt issuance costs

 

705

 

494

Net realized loss on investments

 

899

 

3,716

Net realized loss on extinguishment of debt

395

Net unrealized depreciation (appreciation) on investments

 

2,273

 

(4,746)

Purchase of investments

 

(253,720)

 

(118,660)

Principal payments received on investments

 

87,473

 

65,672

Proceeds from sale of investments

43,426

3,732

Changes in assets and liabilities:

 

  

 

  

Increase in interest receivable

 

(1,019)

 

(625)

Increase in end-of-term payments

 

(1,911)

 

(838)

Increase (decrease) in unearned income

 

232

 

(800)

Increase in other assets

 

(620)

 

(391)

Increase in other accrued expenses

 

91

 

66

Increase in base management fee payable

 

165

 

71

Increase in incentive fee payable

 

130

 

553

Net cash used in operating activities

 

(110,737)

 

(38,611)

Cash flows from financing activities:

 

  

 

  

Proceeds from issuance of 2027 Notes

50,000

Proceeds from issuance of 2026 Notes

57,500

Repayment of Asset-Backed Notes

(20,702)

Repayment of 2022 Notes

(37,375)

Proceeds from issuance of common stock, net of offering costs

 

48,529

 

10,688

Advances on Credit Facilities

 

119,000

 

51,500

Repayment of Credit Facilities

 

(40,000)

 

(36,000)

Debt issuance costs

(2,170)

(2,575)

Distributions paid

 

(13,306)

 

(11,550)

Net cash provided by financing activities

 

141,351

 

32,188

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

 

30,614

 

(6,423)

Cash, cash equivalents and restricted cash:

 

  

 

  

Beginning of period

 

47,281

 

47,758

End of period

$

77,895

$

41,335

Supplemental disclosure of cash flow information:

 

  

 

  

 

Cash paid for interest

$

6,535

$

5,084

Supplemental non-cash investing and financing activities:

 

  

 

  

Warrant investments received and recorded as unearned income

$

1,845

$

1,265

Distributions payable

$

7,457

$

6,007

End-of-term payments receivable

$

7,149

$

4,731

Non-cash income

$

2,378

$

2,621

Six months ended June 30, 

    

2022

    

2021

    

Cash

$

54,353

$

26,737

Investments in money market funds

 

21,959

 

13,096

Restricted investments in money market funds

 

1,583

 

1,502

Total cash, cash equivalents and restricted cash

$

77,895

$

41,335

See Notes to Consolidated Financial Statements

6

Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments (Unaudited)

June 30, 2022

(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 — 198.8% (8)

 

  

 

  

  

 

  

 

  

Non-Affiliate Debt Investments — 189.8% (8)

 

  

  

 

  

 

  

Non-Affiliate Debt Investments — Life Science — 83.2% (8)

 

  

  

 

  

 

  

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

Biotechnology

Term Loan (11.00% cash (Prime + 6.25%; Floor 9.50%), 3.0% ETP, Due 1/1/25)

$

2,885

$

2,809

$

2,809

Term Loan (11.00% cash (Prime + 6.25%; Floor 9.50%), 3.0% ETP, Due 1/1/25)

2,885

2,809

2,809

Term Loan (11.00% cash (Prime + 6.25%; Floor 9.50%), 3.0% ETP, Due 1/1/25)

1,442

1,404

1,404

Term Loan (11.00% cash (Prime + 6.25%; Floor 9.50%), 3.0% ETP, Due 2/1/25)

2,885

2,806

2,806

Term Loan (11.00% cash (Prime + 6.25%; Floor 9.50%), 3.0% ETP, Due 2/1/25)

2,885

2,806

2,806

Term Loan (11.00% cash (Prime + 6.25%; Floor 9.50%), 3.0% ETP, Due 4/1/25)

1,442

1,401

1,401

Term Loan (11.00% cash (Prime + 6.25%; Floor 9.50%), 3.0% ETP, Due 4/1/25)

1,442

1,401

1,401

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

Biotechnology

Term Loan (10.05% cash (Prime + 6.05%; Floor 9.55%), 5.50% ETP, Due 5/1/26)

5,000

4,883

4,883

Term Loan (10.05% cash (Prime + 6.05%; Floor 9.55%), 5.50% ETP, Due 5/1/26)

5,000

4,955

4,955

Term Loan (10.05% cash (Prime + 6.05%; Floor 9.55%), 5.50% ETP, Due 5/1/26)

3,000

2,973

2,973

Term Loan (10.05% cash (Prime + 6.05%; Floor 9.55%), 5.50% ETP, Due 5/1/26)

5,000

4,955

4,955

Term Loan (10.05% cash (Prime + 6.05%; Floor 9.55%), 5.50% ETP, Due 5/1/26)

5,000

4,955

4,955

Term Loan (10.05% cash (Prime + 6.05%; Floor 9.55%), 5.50% ETP, Due 5/1/26)

3,000

2,973

2,973

Emalex Biosciences, Inc. (2)(12)

Biotechnology

Term Loan (9.75% cash (Libor + 7.90%; Floor 9.75%), 5.00% ETP, Due 6/1/24)

2,396

2,373

2,373

Term Loan (9.75% cash (Libor + 7.90%; Floor 9.75%), 5.00% ETP, Due 6/1/24)

2,396

2,375

2,375

Term Loan (9.75% cash (Libor + 7.90%; Floor 9.75%), 5.00% ETP, Due 11/1/25)

5,000

4,909

4,909

Term Loan (9.75% cash (Libor + 7.90%; Floor 9.75%), 5.00% ETP, Due 5/1/26)

5,000

4,893

4,893

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

Biotechnology

Term Loan (10.25% cash (Prime + 6.25%; Floor 9.50%), 4.00% ETP, Due 4/1/25)

2,500

2,470

2,470

Term Loan (10.25% cash (Prime + 6.25%; Floor 9.50%), 4.00% ETP, Due 7/1/25)

2,500

2,468

2,468

Greenlight Biosciences, Inc. (2)(5)(12)

Biotechnology

Term Loan (10.50% cash (Prime + 5.75%; Floor 9.00%), 3.00% ETP, Due 7/1/25)

5,000

4,829

4,829

Term Loan (10.50% cash (Prime + 5.75%; Floor 9.00%), 3.00% ETP, Due 7/1/25)

2,500

2,416

2,416

IMV Inc. (2)(5)(12)

Biotechnology

Term Loan (10.50% cash (Prime + 5.75%; Floor 9.00%), 5.00% ETP, Due 7/1/25)

5,000

4,935

4,935

Term Loan (10.50% cash (Prime + 5.75%; Floor 9.00%), 5.00% ETP, Due 7/1/25)

2,500

2,468

2,468

Term Loan (10.50% cash (Prime + 5.75%; Floor 9.00%), 5.00% ETP, Due 1/1/26)

5,000

4,936

4,936

Term Loan (10.50% cash (Prime + 5.75%; Floor 9.00%), 5.00% ETP, Due 1/1/26)

5,000

4,936

4,936

KSQ Therapeutics, Inc. (2) (12)

Biotechnology

Term Loan (9.50% cash (Prime + 4.75%; Floor 8.50%), 5.50% ETP, Due 5/1/27)

6,250

6,066

6,066

Term Loan (9.50% cash (Prime + 4.75%; Floor 8.50%), 5.50% ETP, Due 5/1/27)

6,250

6,166

6,166

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

Biotechnology

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

3,194

3,181

3,181

Native Microbials, Inc (2) (12)

Biotechnology

Term Loan (10.00% cash (Prime + 5.25%; Floor 8.50%), 5.00% ETP, Due 11/1/26)

3,750

3,629

3,629

Provivi, Inc. (2)(12)

Biotechnology

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

4,833

4,779

4,779

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

4,833

4,779

4,779

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

2,417

2,367

2,367

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

2,417

2,367

2,367

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

2,417

2,359

2,359

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

2,417

2,359

2,359

See Notes to Consolidated Financial Statements

7

Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments (Unaudited)

June 30, 2022

(Dollars in thousands)

    

    

    

Principal

    

Cost of

    

Fair

Portfolio Company (1)(3)

Sector

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

Amount

Investments (6)

Value

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

Biotechnology

Term Loan (10.25% cash (Prime + 5.50%; Floor 8.75%), 6.0% ETP, Due 10/1/25)

5,000

4,647

4,647

Term Loan (10.25% cash (Prime + 5.50%; Floor 8.75%), 6.0% ETP, Due 10/1/25)

2,500

2,449

2,449

Aerobiotix, LLC (2)(12)

Medical Device

Term Loan (11.00% cash (Prime + 6.25%; Floor 9.50%), 6.0% ETP, Due 4/1/26)

2,500

2,455

2,455

Term Loan (11.00% cash (Prime + 6.25%; Floor 9.50%), 6.0% ETP, Due 4/1/26)

2,500

2,455

2,455

Canary Medical Inc. (2)(12)

Medical Device

Term Loan (9.75% cash (Prime + 5.75%; Floor 9.00%), 7.00% ETP, Due 11/1/24)

2,500

2,434

2,434

Term Loan (9.75% cash (Prime + 5.75%; Floor 9.00%), 7.00% ETP, Due 11/1/24)

2,500

2,483

2,483

Term Loan (9.75% cash (Prime + 5.75%; Floor 9.00%), 7.00% ETP, Due 11/1/24)

2,500

2,459

2,459

Ceribell, Inc. (2)(12)

Medical Device

Term Loan (8.75% cash (Prime + 4.75%; Floor 8.25%), 5.50% ETP, Due 10/1/24)

5,000

4,925

4,925

Term Loan (8.75% cash (Prime + 4.75%; Floor 8.25%), 5.50% ETP, Due 10/1/24)

5,000

4,965

4,965

Term Loan (8.75% cash (Prime + 4.75%; Floor 8.25%), 5.50% ETP, Due 10/1/24)

2,500

2,472

2,472

Term Loan (8.75% cash (Prime + 4.75%; Floor 8.25%), 5.50% ETP, Due 10/1/24)

2,500

2,472

2,472

Cognoa, Inc. (2)(12)

Medical Device

Term Loan (10.25% cash (Prime + 5.50%; Floor 8.75%), 6.0% ETP, Due 8/1/26)

5,000

4,916

4,916

Term Loan (10.25% cash (Prime + 5.50%; Floor 8.75%), 6.0% ETP, Due 8/1/26)

2,500

2,282

2,282

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)

 

3,960

 

3,886

 

3,886

 

 

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

 

3,960

 

3,886

3,886

Corinth Medtech, Inc. (2)(12)

Medical Device

Term Loan (9.25% cash (Prime + 5.25%; Floor 8.50%), 20.00% ETP, Due 6/30/22)

2,500

2,500

2,500

Term Loan (9.25% cash (Prime + 5.25%; Floor 8.50%), 20.00% ETP, Due 6/30/22)

2,500

2,500

2,500

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)

 

2,375

 

2,352

 

2,352

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

158

157

157

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

2,800

2,776

2,776

Embody, Inc. (2)(12)

Medical Device

Term Loan (11.25% cash (Prime + 6.50%; Floor 9.75%), 28.00% ETP, Due 8/1/26)

2,500

2,460

2,460

InfoBionic, Inc. (2)(12)

Medical Device

Term Loan (10.25% cash (Prime + 6.25%; Floor 9.50%), 4.00% ETP, Due 10/1/24)

3,500

3,416

3,416

Term Loan (10.25% cash (Prime + 6.25%; Floor 9.50%), 4.00% ETP, Due 6/1/25)

1,000

969

969

MacuLogix, Inc. (2)(12)(13)

 

Medical Device

 

Term Loan (15.08% cash (Libor + 7.68%; Floor 10.08%), 6.00% ETP, Due 9/1/23)

 

7,439

 

7,390

 

2,154

 

 

Term Loan (15.08% cash (Libor + 7.68%; Floor 10.08%), 6.00% ETP, Due 9/1/23)

 

4,017

 

3,990

1,163

Term Loan (14.00% cash, Due 4/29/22)

188

188

55

Term Loan (14.00% cash, Due 4/29/22)

346

346

101

Term Loan (14.00% cash, Due 4/29/22)

250

250

73

Term Loan (14.00% cash, Due 4/29/22)

188

188

55

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

4,960

4,960

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

5,000

4,960

4,960

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

5,000

4,953

4,953

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

5,000

4,953

4,953

Scientia Vascular, Inc. (2)(12)

Medical Device

Term Loan (9.50% cash (Prime + 4.75%; Floor 8.50%), 5.00% ETP, Due 1/1/27)

3,750

3,588

3,588

Term Loan (9.50% cash (Prime + 4.75%; Floor 8.50%), 5.00% ETP, Due 1/1/27)

3,750

3,698

3,698

Sonex Health, Inc. (2)(12)

Medical Device

Term Loan (10.50% cash (Prime + 6.50%; Floor 9.75%), 5.00% ETP, Due 6/1/25)

2,500

2,385

2,385

Term Loan (10.50% cash (Prime + 6.50%; Floor 9.75%), 5.80% ETP, Due 6/1/25)

2,500

2,474

2,474

Term Loan (10.50% cash (Prime + 6.50%; Floor 9.75%), 5.80% ETP, Due 10/1/25)

2,500

2,474

2,474

Spineology, Inc. (2)(12)

Medical Device

Term Loan (11.75% cash (Prime + 7.00%; Floor 10.25%), 1.00% ETP, Due 10/1/25)

5,000

4,959

4,959

Term Loan (11.75% cash (Prime + 7.00%; Floor 10.25%), 1.00% ETP, Due 4/1/26)

2,500

2,477

2,477

See Notes to Consolidated Financial Statements

8

Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments (Unaudited)

June 30, 2022

(Dollars in thousands)

    

    

    

Principal

    

Cost of

    

Fair

Portfolio Company (1)(3)

Sector

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

Amount

Investments (6)

Value

Swift Health Systems Inc. (2)(12)

Medical Device

Term Loan (10.00% cash (Prime + 5.25%; Floor 9.00%), 5.00% ETP, Due 7/1/27)

3,500

3,342

3,342

Term Loan (10.00% cash (Prime + 5.25%; Floor 9.00%), 5.00% ETP, Due 7/1/27)

3,500

3,447

3,447

Total Non-Affiliate Debt Investments — Life Science

 

  

 

250,528

 

241,777

Non-Affiliate Debt Investments — Sustainability — 26.2% (8)

Dream Holdings, Inc. (2)(12)

Other Sustainability

Term Loan (11.50% cash (Prime + 6.75%; Floor 10.00%), 3.00% ETP, Due 4/1/26)

3,750

3,688

3,688

Term Loan (11.50% cash (Prime + 6.75%; Floor 10.00%), 3.00% ETP, Due 4/1/26)

3,750

3,688

3,688

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

Other Sustainability

Term Loan (11.75% cash (Prime + 7.00%; Floor 10.25%), 2.50% ETP, Due 9/1/25)

7,500

7,347

7,347

Term Loan (11.75% cash (Prime + 7.00%; Floor 10.25%), 2.50% ETP, Due 9/1/25)

7,500

7,347

7,347

Term Loan (11.75% cash (Prime + 7.00%; Floor 10.25%), 2.50% ETP, Due 9/1/25)

7,500

7,347

7,347

Term Loan (11.75% cash (Prime + 7.00%; Floor 10.25%), 2.50% ETP, Due 7/1/26)

5,000

4,883

4,883

Term Loan (11.75% cash (Prime + 7.00%; Floor 10.25%), 2.50% ETP, Due 7/1/26)

5,000

4,883

4,883

Soli Organic, Inc. (2)(12)

Other Sustainability

Term Loan (11.50% cash (Prime + 6.75%; Floor 10.00%), 2.75% ETP, Due 4/1/26)

5,000

4,911

4,911

Term Loan (11.50% cash (Prime + 6.75%; Floor 10.00%), 2.75% ETP, Due 4/1/26)

2,500

2,309

2,309

Term Loan (11.50% cash (Prime + 6.75%; Floor 10.00%), 2.75% ETP, Due 5/1/26)

5,000

4,908

4,908

Term Loan (11.50% cash (Prime + 6.75%; Floor 10.00%), 2.75% ETP, Due 5/1/26)

2,500

2,454

2,454

Temperpack Technologies, Inc. (2)(12)

Other Sustainability

Term Loan (11.50% cash (Prime + 6.75%; Floor 10.00%), 2.50% ETP, Due 6/1/25)

3,750

3,710

3,710

Term Loan (11.50% cash (Prime + 6.75%; Floor 10.00%), 2.50% ETP, Due 6/1/25)

3,750

3,710

3,710

Term Loan (11.50% cash (Prime + 6.75%; Floor 10.00%), 2.50% ETP, Due 10/1/25)

7,500

7,410

7,410

Term Loan (11.50% cash (Prime + 6.75%; Floor 10.00%), 2.50% ETP, Due 10/1/25)

3,750

3,705

3,705

Term Loan (11.50% cash (Prime + 6.75%; Floor 10.00%), 2.50% ETP, Due 10/1/25)

3,750

3,705

3,705

Total Non-Affiliate Debt Investments — Sustainability

76,005

76,005

Non-Affiliate Debt Investments — Technology — 74.5% (8)

Axiom Space, Inc. (2)(12)

Communications

Term Loan (10.00% cash (Prime + 6.00%; Floor 9.25%), 2.50% ETP, Due 6/1/26)

7,500

7,449

7,449

Term Loan (10.00% cash (Prime + 6.00%; Floor 9.25%), 2.50% ETP, Due 6/1/26)

7,500

7,449

7,449

Term Loan (10.00% cash (Prime + 6.00%; Floor 9.25%), 2.50% ETP, Due 6/1/26)

7,500

7,449

7,449

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

250

250

250

Alula Holdings, Inc. (2)(12)

Consumer-related Technologies

Term Loan (10.75% cash (Prime + 6.75%; Floor 10.00%), 3.00% ETP, Due 1/1/25)

5,000

4,957

4,957

Term Loan (10.75% cash (Prime + 6.75%; Floor 10.00%), 3.00% ETP, Due 1/1/25)

5,000

4,957

4,957

Term Loan (10.75% cash (Prime + 6.75%; Floor 10.00%), 3.00% ETP, Due 1/1/25)

3,000

2,974

2,974

Term Loan (10.75% cash (Prime + 6.75%; Floor 10.00%), 3.00% ETP, Due 12/1/25)

1,000

972

972

Term Loan (10.75% cash (Prime + 6.75%; Floor 10.00%), 3.00% ETP, Due 2/1/26)

1,000

972

972

Better Place Forests Co. (2)(12)

Consumer-related Technologies

Term Loan (11.00% cash (Prime + 6.25%; Floor 9.50%), 1.85% ETP, Due 7/1/25)

5,000

4,940

4,940

Term Loan (11.00% cash (Prime + 6.25%; Floor 9.50%), 1.85% ETP, Due 10/1/25)

2,500

2,471

2,471

CAMP NYC, Inc. (2)(12)

Consumer-related Technologies

Term Loan (12.00% cash (Prime + 7.25%; Floor 10.50%), 3.00% ETP, Due 5/1/26)

3,500

3,455

3,455

Clara Foods Co. (2)(12)

Consumer-related Technologies

Term Loan (9.75% cash (Prime + 5.75%; Floor 9.00%), 5.50% ETP, Due 8/1/25)

2,500

2,479

2,479

Term Loan (9.75% cash (Prime + 5.75%; Floor 9.00%), 5.50% ETP, Due 8/1/25)

2,500

2,479

2,479

See Notes to Consolidated Financial Statements

9

Table of Contents

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments (Unaudited)

June 30, 2022

(Dollars in thousands)

    

    

    

Principal

    

Cost of

    

Fair

Portfolio Company (1)(3)

Sector

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

Amount

Investments (6)

Value

Divergent Technologies, Inc. (2)(12)

Consumer-related Technologies

Term Loan (10.75% cash (Prime + 6.00%; Floor 9.50%), 3.00% ETP, Due 7/1/27

3,750

3,394

3,394

Term Loan (10.75% cash (Prime + 6.00%; Floor 9.50%), 3.00% ETP, Due 7/1/27

1,250

1,236

1,236

Term Loan (10.75% cash (Prime + 6.00%; Floor 9.50%), 3.00% ETP, Due 7/1/27

3,750

3,709

3,709

Term Loan (10.75% cash (Prime + 6.00%; Floor 9.50%), 3.00% ETP, Due 7/1/27

1,250

1,236

1,236

Term Loan (10.75% cash (Prime + 6.00%; Floor 9.50%), 3.00% ETP, Due 7/1/27

3,750

3,709

3,709

Term Loan (10.75% cash (Prime + 6.00%; Floor 9.50%), 3.00% ETP, Due 7/1/27

1,250

1,236

1,236

Interior Define, Inc. (2)(12)

Consumer-related Technologies

Term Loan (11.25% cash (Prime + 6.50%; Floor 9.75%), 4.00% ETP, Due 1/1/26