UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 10-Q

 

 

(Mark One)

     
x   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
     
    FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2018
     
    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 x No ¨

 

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post 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   x
       
Non-accelerated filer ¨  (Do not check if a smaller reporting company)   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 x

 

     The number of shares of the registrant’s common stock, $0.001 par value per share, outstanding as of July 31, 2018 was 11,528,985. 

 

 

 

 

 

 

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, 2018 and December 31, 2017 (unaudited) 3
  Consolidated Statements of Operations for the three and six months ended June 30, 2018 and 2017 (unaudited) 4
  Consolidated Statements of Changes in Net Assets for the six months ended June 30, 2018 and 2017 (unaudited) 5
  Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and 2017 (unaudited) 6
  Consolidated Schedules of Investments as of June 30, 2018 and December 31, 2017 (unaudited) 7
  Notes to the Consolidated Financial Statements (unaudited) 17
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 39
Item 3. Quantitative and Qualitative Disclosures About Market Risk 56
Item 4. Controls and Procedures 57
     
PART II  
Item 1. Legal Proceedings 58
Item 1A. Risk Factors 58
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 62
Item 3. Defaults Upon Senior Securities 62
Item 4. Mine Safety Disclosures 62
Item 5. Other Information 62
Item 6. Exhibits 62
  Signatures 63
EX-31.1    
EX-31.2    
EX-32.1    
EX-32.2    

 

 2 

 

 

PART I: FINANCIAL INFORMATION

 

Item 1. Consolidated Financial Statements

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Statements of Assets and Liabilities (Unaudited)

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

 

   June 30,  
2018		   December 31,
2017		 
         
Assets          
Non-affiliate investments at fair value (cost of $216,364 and $219,303, respectively)  $215,102   $218,600 
Non-controlled affiliate investments at fair value (cost of $7,677 and $3,774, respectively) (Note 5)   7,296    3,499 
Controlled affiliate investments at fair value (cost of $4,069 and $0, respectively) (Note 5)   4,069    — 
Total investments at fair value (cost of $228,110 and $223,077, respectively) (Note 4)   226,467    222,099 
Cash   10,840    6,594 
Interest receivable   4,053    3,986 
Other assets   1,966    1,467 
Total assets  $243,326   $234,146 
           
Liabilities          
Borrowings (Note 7)  $104,214   $94,075 
Distributions payable   3,458    3,456 
Base management fee payable (Note 3)   387    379 
Incentive fee payable (Note 3)   823    541 
Other accrued expenses   673    620 
Total liabilities   109,555    99,071 
           
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, 2018 and December 31, 2017   —    — 
Common stock, par value $0.001 per share, 100,000,000 shares authorized, 11,695,229 and 11,687,871 shares issued and 11,527,764 and 11,520,406 shares outstanding as of June 30, 2018 and December 31, 2017, respectively   12    12 
Paid-in capital in excess of par   179,720    179,641 
Distributions in excess of net investment income   (2,314)   (1,898)
Net unrealized depreciation on investments   (1,643)   (978)
Net realized loss on investments   (42,004)   (41,702)
Total net assets   133,771    135,075 
Total liabilities and net assets  $243,326   $234,146 
Net asset value per common share  $11.60   $11.72 

 

See Notes to Consolidated Financial Statements

 

 3 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Statements of Operations (Unaudited)

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

 

   For the Three Months Ended   For the Six Months Ended 
   June 30,   June 30, 
   2018   2017   2018   2017 
Investment income                    
Interest income on investments                    
Interest income on non-affiliate investments  $6,675   $5,418   $13,290   $11,697 
Interest income on non-controlled affiliate investments   198    —    336    — 
Total interest income on investments   6,873    5,418    13,626    11,697 
Fee income                    
Prepayment fee income on non-affiliate investments   175    327    312    788 
Fee income on non-affiliate investments   265    133    550    356 
Total investment income   7,313    5,878    14,488    12,841 
Expenses                    
Interest expense   1,451    1,084    2,935    2,401 
Base management fee (Note 3)   1,088    888    2,202    1,862 
Performance based incentive fee (Note 3)   982    405    1,527    836 
Administrative fee (Note 3)   171    187    354    381 
Professional fees   263    324    708    830 
General and administrative   227    236    421    410 
Total expenses   4,182    3,124    8,147    6,720 
Performance based incentive fee waived (Note 3)   (159)   —    (159)   — 
Net expenses   4,023    3,124    7,988    6,720 
Net investment income   3,290    2,754    6,500    6,121 
                     
Net realized and unrealized loss on investments                    
Net realized (loss) gain on non-affiliate investments   (153)   176    (302)   (10,670)
Net realized (loss) gain on investments   (153)   176    (302)   (10,670)
Net unrealized (depreciation) appreciation on non-affiliate investments   (227)   (2,197)   (560)   8,934 
Net unrealized appreciation (depreciation) on non-controlled affiliate investments   20    —    (105)   — 
Net unrealized (depreciation) appreciation on investments   (207)   (2,197)   (665)   8,934 
Net realized and unrealized loss on investments   (360)   (2,021)   (967)   (1,736)
                     
Net increase in net assets resulting from operations  $2,930   $733   $5,533   $4,385 
Net investment income per common share  $0.29   $0.24   $0.56   $0.53 
Net increase in net assets per common share  $0.25   $0.06   $0.48   $0.38 
Distributions declared per share  $0.30   $0.30   $0.60   $0.60 
Weighted average shares outstanding   11,525,874    11,517,271    11,524,024    11,515,074 

 

See Notes to Consolidated Financial Statements

 

 4 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Statements of Changes in Net Assets (Unaudited)

(Dollars in thousands, except share data)

 

   Common Stock   Paid-In
Capital in
Excess of		   Distributions
in Excess of
Net
Investment		   Net Unrealized
Depreciation
on		   Net Realized
Loss on		   Total Net 
   Shares   Amount   Par   Income   Investments   Investments   Assets 
Balance at December 31, 2016   11,510,424   $12   $179,551   $(397)  $(19,463)  $(20,511)  $139,192 
Net increase in net assets resulting from operations   —    —    —    6,121    8,934    (10,670)   4,385 
Issuance of common stock under dividend reinvestment plan   8,756    —    96    —    —    —    96 
Distributions declared   —    —    —    (6,911)   —    —    (6,911)
Balance at June 30, 2017   11,519,180   $12   $179,647   $(1,187)  $(10,529)  $(31,181)  $136,762 
                                    
Balance at December 31, 2017   11,520,406   $12   $179,641   $(1,898)  $(978)  $(41,702)  $135,075 
Net increase in net assets resulting from operations   —    —    —    6,500    (665)   (302)   5,533 
Issuance of common stock under dividend reinvestment plan   7,358    —    79    —    —    —    79 
Distributions declared   —    —    —    (6,916)   —    —    (6,916)
Balance at June 30, 2018   11,527,764   $12   $179,720   $(2,314)  $(1,643)  $(42,004)  $133,771 

 

See Notes to Consolidated Financial Statements

 

 5 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands)

 

   For the Six Months Ended 
   June 30, 
   2018   2017 
Cash flows from operating activities:          
Net increase in net assets resulting from operations  $5,533   $4,385 
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:          
Amortization of debt issuance costs   285    255 
Net realized loss on investments   302    10,670 
Net unrealized depreciation (appreciation) on investments   665    (8,934)
Purchase of investments   (38,046)   (47,990)
Principal payments received on investments   34,302    60,260 
Investment in controlled affiliate investments   (4,069)   — 
Proceeds from sale of investments   3,066    1,572 
Equity received in settlement of fee income   (225)   — 
Changes in assets and liabilities:          
Decrease in interest receivable   212    517 
(Increase) decrease in end-of-term payments   (279)   1,013 
Decrease in unearned income   (363)   (248)
(Increase) decrease in other assets   (98)   252 
Increase (decrease) in other accrued expenses   53    (178)
Increase (decrease) in base management fee payable   8    (29)
Increase in incentive fee payable   282    405 
Net cash provided by operating activities   1,628    21,950 
Cash flows from financing activities:          
Advances on credit facility   20,000    15,000 
Repayment of credit facility   (10,000)   (55,000)
Distributions paid   (6,835)   (6,812)
Debt issuance costs   (547)   — 
Net cash provided by (used in) financing activities   2,618    (46,812)
Net increase (decrease) in cash   4,246    (24,862)
Cash:          
Beginning of period   6,594    37,135 
End of period  $10,840   $12,273 
Supplemental disclosure of cash flow information:          
Cash paid for interest  $2,617   $2,260 
Supplemental non-cash investing and financing activities:          
Warrant investments received and recorded as unearned income  $550   $1,087 
Distributions payable  $3,458   $3,456 
End-of-term payments receivable  $3,215   $3,651 

 

See Notes to Consolidated Financial Statements

 

 6 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

June 30, 2018

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)(3)  Sector  Type of Investment (4)(7)(9)(10)  Amount   Investments (6)   Value (12) 
Non-Affiliate Investments — 160.8% (8)                  
Non-Affiliate Debt Investments — 147.2% (8)                  
Non-Affiliate Debt Investments — Life Science — 44.8% (8)                  
Celsion Corporation (2)(5)  Biotechnology  Term Loan (9.72% cash (Libor + 7.63%; Floor  $2,500   $2,442   $2,442 
      9.63%), 4.00% ETP, Due 7/1/22)               
      Term Loan (9.72% cash (Libor + 7.63%; Floor   2,500    2,442    2,442 
      9.63%), 4.00% ETP, Due 7/1/22)               
      Term Loan (9.72% cash (Libor + 7.63%; Floor   2,500    2,442    2,442 
      9.63%), 4.00% ETP, Due 7/1/22)               
      Term Loan (9.72% cash (Libor + 7.63%; Floor   2,500    2,442    2,442 
      9.63%), 4.00% ETP, Due 7/1/22)               
Palatin Technologies, Inc. (2)(5)  Biotechnology  Term Loan (10.50% cash (Libor + 8.50%; Floor   1,000    990    990 
      9.00%), 5.00% ETP, Due 1/1/19)               
      Term Loan (10.50% cash (Libor + 8.50%; Floor   1,000    1,000    1,000 
      9.00%), 3.44% ETP, Due 1/1/19)               
      Term Loan (10.50% cash (Libor + 8.50%; Floor   2,167    2,148    2,148 
      9.00%), 5.00% ETP, Due 8/1/19)               
      Term Loan (10.50% cash (Libor + 8.50%; Floor   2,167    2,167    2,167 
      9.00%), 3.27% ETP, Due 8/1/19)               
vTv Therapeutics Inc. (2)(5)  Biotechnology  Term Loan (12.00% cash (Libor + 10.00%; Floor   5,729    5,687    5,674 
      10.50%), 6.00% ETP, Due 5/1/20)               
      Term Loan (12.00% cash (Libor + 10.00%; Floor   3,750    3,709    3,701 
      10.50%), 6.00% ETP, Due 10/1/20)               
Titan Pharmaceuticals, Inc. (2)(5)  Drug Delivery  Term Loan (10.40% cash (Libor + 8.40%; Floor   1,600    1,473    1,473 
      9.50%), 5.00% ETP, Due 6/1/21)               
Aerin Medical, Inc. (2)  Medical Device  Term Loan (9.45% cash (Libor + 7.45%; Floor   4,000    3,883    3,883 
      8.75%), 4.00% ETP, Due 1/1/22)               
      Term Loan (9.45% cash (Libor + 7.45%; Floor   3,000    2,960    2,960 
      8.75%), 4.00% ETP, Due 1/1/22)               
      Term Loan (9.45% cash (Libor + 7.45%; Floor   3,000    2,960    2,960 
      8.75%), 4.00% ETP, Due 1/1/22)               
Conventus Orthopaedics, Inc. (2)  Medical Device  Term Loan (10.00% cash (Libor + 8.00%; Floor   4,000    3,939    3,939 
      9.25%), 6.00% ETP, Due 6/1/21)               
      Term Loan (10.00% cash (Libor + 8.00%; Floor   4,000    3,939    3,939 
      9.25%), 6.00% ETP, Due 6/1/21)               
      Term Loan (10.00% cash (Libor + 8.00%; Floor   4,000    3,939    3,939 
      9.25%), 6.00% ETP, Due 6/1/21)               
Lantos Technologies, Inc. (2)  Medical Device  Term Loan (10.43% cash (Libor + 8.43%; Floor   4,000    3,481    3,481 
      10.00%), 6.00% ETP, Due 9/1/21)               
VERO Biotech LLC (2)  Medical Device  Term Loan (10.00% cash (Libor + 8.00%; Floor   4,000    3,942    3,942 
      9.25%), 5.00% ETP, Due 1/1/22)               
      Term Loan (10.00% cash (Libor + 8.00%; Floor   4,000    3,942    3,942 
      9.25%), 5.00% ETP, Due 1/1/22)               
Total Non-Affiliate Debt Investments — Life Science           59,927    59,906 
Non-Affiliate Debt Investments — Technology — 89.7% (8)                  
Audacy Corporation (2)  Communications  Term Loan (9.90% cash (Libor + 7.90%; Floor   4,000    3,928    3,928 
      9.50%), 5.00% ETP, Due 7/1/22)               
Intelepeer Holdings, Inc. (2)  Communications  Term Loan (11.95% cash (Libor + 9.95%; Floor   4,000    3,897    3,897 
      11.25%), 2.50% ETP, Due 7/1/21)               
      Term Loan (11.95% cash (Libor + 9.95%; Floor   4,000    3,937    3,937 
      11.25%), 2.50% ETP, Due 7/1/21)               
      Term Loan (11.95% cash (Libor + 9.95%; Floor   4,000    3,937    3,937 
      11.25%), 2.50% ETP, Due 7/1/21)               
PebblePost, Inc. (2)  Communications  Term Loan (11.26% cash (Libor + 9.26%; Floor   4,000    3,942    3,942 
      10.25%), 4.00% ETP, Due 7/1/21)               
      Term Loan (11.26% cash (Libor + 9.26%; Floor   4,000    3,942    3,942 
      10.25%), 4.00% ETP, Due 7/1/21)               
SavingStar, Inc. (2)  Consumer-related   Term Loan (12.40% cash (Libor + 10.40%; Floor   1,916    1,895    1,895 
   Technologies  10.90%), 4.25% ETP, Due 6/1/20)               
      Term Loan (12.40% cash (Libor + 10.40%; Floor   1,778    1,727    1,727 
      10.90%), 3.80% ETP, Due 11/1/20)               
IgnitionOne, Inc. (2)  Internet and Media  Term Loan (12.23% cash (Libor + 10.23%; Floor   3,000    2,852    2,852 
      10.23%), 2.00% ETP, Due 4/1/22)               

 

See Notes to Consolidated Financial Statements

 7 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

June 30, 2018

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)(3)  Sector  Type of Investment (4)(7)(9)(10)  Amount   Investments (6)   Value (12) 
      Term Loan (12.23% cash (Libor + 10.23%; Floor   3,000    2,852    2,852 
      10.23%), 2.00% ETP, Due 4/1/22)               
      Term Loan (12.23% cash (Libor + 10.23%; Floor   3,000    2,852    2,852 
      10.23%), 2.00% ETP, Due 4/1/22)               
      Term Loan (12.23% cash (Libor + 10.23%; Floor   3,000    2,852    2,852 
      10.23%), 2.00% ETP, Due 4/1/22)               
Jump Ramp Games, Inc. (2)  Internet and Media  Term Loan (11.73% cash (Libor + 9.73%),   4,000    3,951    3,951 
      3.00% ETP, Due 4/1/21)               
Kixeye, Inc. (2)  Internet and Media  Term Loan (11.60% cash (Libor + 9.60%; Floor   2,825    2,724    2,724 
      10.75%), 2.00% ETP, Due 5/1/21)               
      Term Loan (11.60% cash (Libor + 9.60%; Floor   2,825    2,778    2,778 
      10.75%), 2.00% ETP, Due 5/1/21)               
Rocket Lawyer Incorporated (2)  Internet and Media  Term Loan (11.40% cash (Libor + 9.40%; Floor   4,000    3,942    3,942 
      10.50%), 3.00% ETP, Due 7/1/21)               
      Term Loan (11.40% cash (Libor + 9.40%; Floor   4,000    3,942    3,942 
      10.50%), 3.00% ETP, Due 7/1/21)               
      Term Loan (11.40% cash (Libor + 9.40%; Floor   2,000    1,968    1,968 
      10.50%), 3.00% ETP, Due 11/1/21)               
Verve Wireless, Inc. (2)  Internet and Media  Term Loan (10.80% cash (Libor + 8.80%; Floor   3,600    3,448    3,448 
      10.80%), 3.33% ETP, Due 9/1/21)               
Zinio Holdings, LLC (2)  Internet and Media  Term Loan (13.25% cash (Libor + 11.25%; Floor   4,000    3,983    3,983 
      11.75%), 6.00% ETP, Due 2/1/20)               
The NanoSteel Company, Inc. (2)  Materials  Term Loan (11.50% cash (Libor + 9.50%; Floor   4,237    4,158    4,158 
      10.00%), 7.20% ETP, Due 5/1/20)               
      Term Loan (11.50% cash (Libor + 9.50%; Floor   2,118    2,090    2,090 
      10.00%), 6.45% ETP, Due 5/1/20)               
      Term Loan (11.50% cash (Libor + 9.50%; Floor   2,327    2,293    2,293 
      10.00%), 5.85% ETP, Due 7/1/20)               
Powerhouse Dynamics, Inc. (2)  Power Management  Term Loan (12.70% cash (Libor + 10.70%; Floor   875    853    853 
      11.20%), 3.32% ETP, Due 9/1/19)               
Luxtera, Inc.  Semiconductors  Term Loan (11.75% cash (Prime + 6.75%),   2,000    1,923    1,923 
      Due 3/28/20)               
      Term Loan (11.75% cash (Prime + 6.75%),   1,500    1,456    1,456 
      Due 3/28/20)               
Bridge2 Solutions, LLC. (2)  Software  Term Loan (11.25% cash (Libor + 9.25%; Floor   5,000    4,806    4,806 
      10.50%), 2.00% ETP, Due 11/1/21)               
      Term Loan (11.25% cash (Libor + 9.25%; Floor   5,000    4,781    4,781 
      10.50%), 2.00% ETP, Due 11/1/21)               
Education Elements, Inc. (2)  Software  Term Loan (12.00% cash (Libor + 10.00%; Floor   400    395    395 
      10.50%), 4.00% ETP, Due 1/1/19)               
      Term Loan (12.00% cash (Libor + 10.00%; Floor   650    641    641 
      10.50%), 4.00% ETP, Due 8/1/19)               
Metricly, Inc.  Software  Term Loan (14.25% cash (Libor + 12.25%; Floor   88    88    88 
      12.50%), 3.33% ETP, Due 9/1/18)               
New Signature US, Inc. (2)(13)  Software  Term Loan (10.59% cash (Libor + 8.50%; Floor   2,750    2,693    2,693 
      10.50%), 3.50% ETP, Due 7/1/22)               
ShopKeep.com, Inc. (2)  Software  Term Loan (11.95% cash (Libor + 9.95%; Floor   5,400    5,316    5,316 
      10.45%), 4.08% ETP, Due 10/1/20)               
      Term Loan (11.95% cash (Libor + 9.95%; Floor   3,800    3,736    3,736 
      10.45%), 3.55% ETP, Due 2/1/21)               
SIGNiX, Inc.  Software  Term Loan (13.00% cash (Libor + 11.00%; Floor   2,090    2,009    1,652 
      11.50%), 6.17% ETP, Due 2/1/20)               
Weblinc Corporation (2)  Software  Term Loan (12.25% cash (Libor + 10.25%; Floor   3,000    2,958    2,958 
      11.25%), 3.00% ETP, Due 3/1/21)               
xAd, Inc. (2)  Software  Term Loan (10.70% cash (Libor + 8.70%; Floor   5,000    4,909    4,909 
      10.00%), 4.75% ETP, Due 11/1/21)               
      Term Loan (10.70% cash (Libor + 8.70%; Floor   5,000    4,909    4,909 
      10.00%), 4.75% ETP, Due 11/1/21)               
      Term Loan (10.70% cash (Libor + 8.70%; Floor   3,000    2,945    2,945 
      10.00%), 4.75% ETP, Due 11/1/21)               
      Term Loan (10.70% cash (Libor + 8.70%; Floor   2,000    1,964    1,964 
      10.00%), 4.75% ETP, Due 11/1/21)               

 

 See Notes to Consolidated Financial Statements

 8 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

June 30, 2018

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)(3)  Sector  Type of Investment (4)(7)(9)(10)  Amount   Investments (6)   Value (12) 
Total Non-Affiliate Debt Investments — Technology              120,272    119,915 
Non-Affiliate Debt Investments — Healthcare information and services — 12.7% (8)               
Catasys, Inc. (2)(5)  Software  Term Loan (9.80% cash (Libor + 7.75%;   2,500    2,475    2,475 
      Floor 9.75%), 6.00% ETP, Due 3/1/22)               
      Term Loan (9.80% cash (Libor + 7.75%;   2,500    2,475    2,475 
      Floor 9.75%), 6.00% ETP, Due 3/1/22)               
HealthEdge Software, Inc. (2)  Software  Term Loan (10.25% cash (Libor + 8.25%;   5,000    4,864    4,864 
      Floor 9.25%), 3.00% ETP, Due 7/1/22)               
      Term Loan (10.25% cash (Libor + 8.25%;   3,750    3,699    3,699 
      Floor 9.25%), 3.00% ETP, Due 1/1/23)               
      Term Loan (10.25% cash (Libor + 8.25%;   3,750    3,695    3,695 
      Floor 9.25%), 3.00% ETP, Due 4/1/23)               
Total Non-Affiliate Debt Investments — Healthcare information and services        17,208    17,208 
Total Non- Affiliate Debt Investments           197,407    197,029 
                      
Non-Affiliate Warrant Investments — 6.8% (8)                  
Non-Affiliate Warrants — Life Science — 1.4% (8)                  
ACT Biotech Corporation  Biotechnology  431,201 Preferred Stock Warrants       25    — 
Alpine Immune Sciences, Inc. (5)  Biotechnology  4,634 Common Stock Warrants        122    — 
Argos Therapeutics, Inc. (2)(5)  Biotechnology  3,656 Common Stock Warrants        33    — 
Celsion Corporation (2)(5)  Biotechnology  190,522 Common Stock Warrants        145    131 
Rocket Pharmaceuticals Corporation (5)  Biotechnology  1,763 Common Stock Warrants        17    — 
Palatin Technologies, Inc. (2)(5)  Biotechnology  608,058 Common Stock Warrants        51    136 
Revance Therapeutics, Inc. (5)  Biotechnology  34,113 Common Stock Warrants        68    452 
Sample6, Inc. (2)  Biotechnology  661,956 Preferred Stock Warrants        53    26 
Strongbridge U.S. Inc. (2)(5)  Biotechnology  160,714 Common Stock Warrants        72    601 
Sunesis Pharmaceuticals, Inc. (5)  Biotechnology  2,050 Common Stock Warrants        5    — 
vTv Therapeutics Inc. (2)(5)  Biotechnology  95,293 Common Stock Warrants        44    — 
Titan Pharmaceuticals, Inc. (2)(5)  Drug Delivery  320,612 Common Stock Warrants        95    22 
AccuVein Inc. (2)  Medical Device  1,174,881 Preferred Stock Warrants        24    28 
Aerin Medical, Inc. (2)  Medical Device  1,818,182 Preferred Stock Warrants        66    69 
Conventus Orthopaedics, Inc. (2)  Medical Device  720,000 Preferred Stock Warrants        95    100 
Lantos Technologies, Inc. (2)  Medical Device  1,715,926 Common Stock Warrants        253    285 
Mitralign, Inc. (2)  Medical Device  64,190 Common Stock Warrants        52    1 
NinePoint Medical, Inc. (2)  Medical Device  29,102 Preferred Stock Warrants        33    — 
ReShape Lifesciences Inc. (5)  Medical Device  134 Common Stock Warrants        347    — 
Tryton Medical, Inc. (2)  Medical Device  122,362 Preferred Stock Warrants        15    13 
VERO Biotech LLC (2)  Medical Device  800 Common Stock Warrants        53    56 
ViOptix, Inc.  Medical Device  375,763 Preferred Stock Warrants        13    — 
Total Non-Affiliate Warrants — Life Science           1,681    1,920 
Non-Affiliate Warrants — Technology — 4.8% (8)                  
Audacy Corporation  (2)  Communications  176,134 Preferred Stock Warrants        33    33 
Ekahau, Inc. (2)  Communications  978,261 Preferred Stock Warrants        33    24 
Intelepeer Holdings, Inc. (2)  Communications  2,256,549 Preferred Stock Warrants        149    115 
PebblePost, Inc. (2)  Communications  598,850 Preferred Stock Warrants        92    97 
Additech, Inc. (2)  Consumer-related Technologies  150,000 Preferred Stock Warrants        33    33 
Gwynnie Bee, Inc. (2)  Consumer-related Technologies  268,591 Preferred Stock Warrants        68    821 
Le Tote, Inc. (2)  Consumer-related Technologies  202,974 Preferred Stock Warrants        63    370 
Rhapsody International Inc. (2)  Consumer-related Technologies  852,273 Common Stock Warrants        164    — 
SavingStar, Inc. (2)  Consumer-related Technologies  850,439 Preferred Stock Warrants        104    — 
IgnitionOne, Inc. (2)  Internet and Media  262,910 Preferred Stock Warrants        671    665 
Jump Ramp Games, Inc. (2)  Internet and Media  159,766 Preferred Stock Warrants        32    33 
Kixeye, Inc. (2)  Internet and Media  791,251 Preferred Stock Warrants        75    78 
Rocket Lawyer Incorporated (2)  Internet and Media  261,721 Preferred Stock Warrants        92    76 
Verve Wireless, Inc. (2)  Internet and Media  112,805 Common Stock Warrants        120    120 
The NanoSteel Company, Inc. (2)  Materials  379,360 Preferred Stock Warrants        187    523 
Powerhouse Dynamics, Inc. (2)  Power Management  348,838 Preferred Stock Warrants        32    22 
Avalanche Technology, Inc. (2)  Semiconductors  202,602 Preferred Stock Warrants        101    38 
eASIC Corporation (2)  Semiconductors  40,445 Preferred Stock Warrants        25    29 
Kaminario, Inc.  Semiconductors  4,800,000 Preferred Stock Warrants        59    96 
Luxtera, Inc.(2)  Semiconductors  3,546,553 Preferred Stock Warrants        213    364 

 

See Notes to Consolidated Financial Statements

 9 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

June 30, 2018

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)(3)  Sector  Type of Investment (4)(7)(9)(10)  Amount   Investments (6)   Value (12) 
Soraa, Inc. (2)  Semiconductors  203,616 Preferred Stock Warrants        80    450 
Bolt Solutions Inc. (2)  Software  202,892 Preferred Stock Warrants        113    104 
Bridge2 Solutions, Inc. (2)  Software  125,458 Common Stock Warrants        432    765 
BSI Platform Holdings, LLC (2)(13)  Software  137,500 Preferred Stock Warrants        19    19 
Clarabridge, Inc.  Software  53,486 Preferred Stock Warrants        14    106 
Education Elements, Inc. (2)  Software  238,121 Preferred Stock Warrants        28    29 
Lotame Solutions, Inc. (2)  Software  288,115 Preferred Stock Warrants        22    286 
Metricly, Inc.  Software  41,569 Common Stock Warrants        48    — 
Riv Data Corp. (2)  Software  321,428 Preferred Stock Warrants        12    38 
ShopKeep.com, Inc. (2)  Software  193,962 Preferred Stock Warrants        118    115 
SIGNiX, Inc.  Software  133,560 Preferred Stock Warrants        225    36 
Skyword, Inc.  Software  301,056 Preferred Stock Warrants        48    3 
SpringCM, Inc. (2)  Software  2,385,686 Preferred Stock Warrants        55    138 
Sys-Tech Solutions, Inc. (2)  Software  375,000 Preferred Stock Warrants        242    464 
Weblinc Corporation (2)  Software  195,122 Preferred Stock Warrants        42    — 
xAd, Inc. (2)  Software  4,343,350 Preferred Stock Warrants        177    294 
Total Non-Affiliate Warrants — Technology              4,021    6,384 
Non-Affiliate Warrants — Cleantech — 0.1% (8)                  
Renmatix, Inc. (2)  Alternative Energy  53,022 Preferred Stock Warrants        68    — 
Tigo Energy, Inc. (2)  Energy Efficiency  804,604 Preferred Stock Warrants        100    112 
Total Non-Affiliate Warrants — Cleantech              168    112 
Non-Affiliate Warrants — Healthcare information and services — 0.5% (8)                  
LifePrint Group, Inc. (2)  Diagnostics  49,000 Preferred Stock Warrants        29    2 
ProterixBio, Inc. (2)  Diagnostics  3,156 Common Stock Warrants        54    — 
Singulex, Inc.  Other Healthcare  294,231 Preferred Stock Warrants        44    45 
Verity Solutions Group, Inc.  Other Healthcare  300,360 Preferred Stock Warrants        100    65 
Watermark Medical, Inc. (2)  Other Healthcare  27,373 Preferred Stock Warrants        74    62 
HealthEdge Software, Inc. (2)  Software  158,063 Preferred Stock Warrants        67    54 
Medsphere Systems Corporation (2)  Software  7,097,792 Preferred Stock Warrants        60    214 
Recondo Technology, Inc. (2)  Software  556,796 Preferred Stock Warrants        95    212 
Total Non-Affiliate Warrants — Healthcare information and services              523    654 
Total Non-Affiliate Warrants              6,393    9,070 
                      
Non-Affiliate Other Investments — 5.8% (8)                  
Espero Pharmaceuticals, Inc.  Biotechnology  Royalty Agreement        5,300    4,700 
ZetrOZ, Inc.  Medical Device  Royalty Agreement        205    700 
Vette Technology, LLC  Data Storage  Royalty Agreement Due 4/18/2019        4,190    100 
Triple Double Holdings, LLC  Software  License Agreement        2,200    2,200 
Total Non-Affiliate Other Investments           11,895    7,700 
                      
Non-Affiliate Equity — 1.0% (8)                     
Insmed Incorporated (5)  Biotechnology  33,208 Common Stock        238    785 
Revance Therapeutics, Inc.(5)  Biotechnology  5,125 Common Stock        73    141 
Sunesis Pharmaceuticals, Inc. (5)  Biotechnology  13,082 Common Stock        83    28 
SnagAJob.com, Inc.  Consumer-related Technologies  82,974 Common Stock        9    83 
Verve Wireless, Inc. (2)  Internet and Media  100,598 Preferred Stock        225    225 
TruSignal, Inc.  Software  32,637 Common Stock        41    41 
Total Non-Affiliate Equity              669    1,303 
Total Non-Affiliate Portfolio Investment Assets          $216,364   $215,102 
                      
Non-controlled Affiliate Investments — 5.5% (8)                  
Non-controlled Affiliate Debt Investments — Technology — 4.8% (8)               
Decisyon, Inc.  Software  Term Loan (14.308% cash (Libor + 12.308%; Floor  $1,523   $1,522   $1,443 
      12.50%), 8.00% ETP, Due 12/1/20)               
      Term Loan (14.308% cash (Libor + 12.308%; Floor   833    785    744 
      12.50%), 8.00% ETP, Due 12/1/20)               
      Term Loan (12.02% cash, Due 12/31/19)   250    250    237 
      Term Loan (12.03% cash, Due 12/31/19)   250    250    237 
      Term Loan (12.24% cash, Due 12/31/19)   750    750    711 
      Term Loan (13.08% cash, Due 12/31/19)   300    300    284 

 

See Notes to Consolidated Financial Statements

 10 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

June 30, 2018

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)(3)  Sector  Type of Investment (4)(7)(9)(10)  Amount   Investments (6)   Value (12) 
StereoVision Imaging, Inc.  Software  Term Loan (9.03% PIK (Libor + 7.03%; Floor   3,200    2,798    2,774 
      8.50%), 8.50% ETP, Due 9/1/21) (11)               
Total Non-controlled Affiliate Debt Investments — Technology        6,655    6,430 
                      
Non-controlled Affiliate Warrants — Technology — 0.0% (8)               
Decisyon, Inc.  Software  82,967 Common Stock Warrants        46    — 
Total Non-controlled Affiliate Warrants — Technology              46    — 
                      
Non-controlled Affiliate Equity — Technology — 0.7% (8)                  
Decisyon, Inc.  Software  45,365,936 Common Stock        185    75 
StereoVision Imaging, Inc.  Software  1,943,572 Common Stock        791    791 
Total Non-controlled Affiliate Equity           976    866 
Total Non-controlled Affiliate Portfolio Investment Assets          $7,677   $7,296 
                      
Controlled Affiliate Investments — 3.0% (8)                  
Controlled Affiliate Equity — Financial — 3.0% (8)                  
Horizon Secured Loan Fund I LLC (14)  Investment funds          $4,069   $4,069 
Total Controlled Affiliate Equity           4,069    4,069 
Total Controlled Affiliate Portfolio Investment Assets          $4,069   $4,069 
                      
Total Portfolio Investment Assets — 169.3%(8)          $228,110   $226,467 

 

 

 

(1)   All investments of the Company are in entities which are organized under the laws of the United States and have a principal place of business in the United States.
     
(2)   Has been pledged as collateral under the Key Facility.
     
(3)   All non-affiliate investments are investments in which the Company owns less than 5% of the voting securities of the portfolio company. All non-controlled affiliate investments are investments in which the Company owns 5% or more of the voting securities of the portfolio company. All controlled affiliate investments are investments in which the Company owns more than 25% of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement).
     
(4)   All interest is payable in cash due monthly in arrears, unless otherwise indicated, and applies only to the Company’s debt investments. Interest rate is the annual interest rate on the debt investment and does not include end-of-term payments (“ETPs”) and any additional fees related to the investments, such as deferred interest, commitment fees or prepayment fees. Debt investments are at variable rates for the term of the debt investment, unless otherwise indicated. All debt investments based on the London InterBank Offered Rate (“LIBOR”) are based on one-month LIBOR. For each debt investment, the current interest rate in effect as of June 30, 2018 is provided.
     
(5)   Portfolio company is a public company.
     
(6)   For debt investments, represents principal balance less unearned income.
     
(7)   Warrants, Equity and Other Investments are non-income producing.
     
(8)   Value as a percent of net assets.
     
(9)   As of June 30, 2018, 1.8% of the Company’s total investments on a cost and fair value basis, respectively, are in non-qualifying assets. Under the Investment Company Act of 1940, as amended (the “1940 Act”), the Company may not acquire any non-qualifying assets unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.
     
(10)  

ETPs are contractual fixed-interest payments due in cash at the maturity date of the applicable debt investment, including upon any prepayment, and are a fixed percentage of the original principal balance of the debt investments unless otherwise noted. Interest will accrue during the life of the debt investment on each ETP and will be recognized as non-cash income until it is actually paid. Therefore, a portion of the incentive fee the Company may pay its Advisor will be based on income that the Company has not yet received in cash. 

     
(11)   Debt investment has a payment-in-kind (“PIK”) feature.
     
(12)   Except for common stock in publicly traded companies, the fair value of the investment was valued using significant unobservable inputs.
     
(13)   New Signature US, Inc. is a subsidiary of BSI Platform Holdings, LLC.
     
(14)   On June 1, 2018, the Company entered into an agreement with Arena Sunset SPV, LLC (“Arena”) to co-invest through Horizon Secured Loan Fund I (“HSLFI”), a joint venture, which is expected to make investments, either directly or indirectly through subsidiaries, primarily in the form of secured loans to development-stage companies in the technology, life science, healthcare information and services and cleantech industries.  All HSLFI investment decisions require unanimous approval of a quorum of HSLFI’s board of managers. Although the Company owns more than 25% of the voting securities of HSLFI, the Company does not believe it controls HSLFI for purposes of the 1940 Act or otherwise.

 

See Notes to Consolidated Financial Statements

 

 11 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

December 31, 2017

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)(3)  Sector  Type of Investment (4)(7)(9)(10)  Amount   Investments (6)   Value (14) 
Non-Affiliate Investments — 161.8% (8)               
Non-Affiliate Debt Investments — 148.4% (8)               
Non-Affiliate Debt Investments — Life Science — 43.0% (8)                  
Palatin Technologies, Inc. (2)(5)  Biotechnology  Term Loan (9.87% cash (Libor + 8.50%; Floor  $2,000   $1,980   $1,980 
      9.00%), 5.00% ETP, Due 1/1/19)               
      Term Loan (9.87% cash (Libor + 8.50%; Floor   3,167    3,139    3,139 
      9.00%), 5.00% ETP, Due 8/1/19)               
vTv Therapeutics Inc. (2)(5)  Biotechnology  Term Loan (11.37% cash (Libor + 10.00%; Floor   6,250    6,196    6,196 
      10.50%), 6.00% ETP, Due 5/1/20)               
      Term Loan (11.37% cash (Libor + 10.00%; Floor   3,750    3,700    3,700 
      10.50%), 6.00% ETP, Due 10/1/20)               
Titan Pharmaceuticals, Inc. (2)(5)  Drug Delivery  Term Loan (9.77% cash (Libor + 8.40%; Floor   3,500    3,400    3,400 
      9.50%), 5.00% ETP, Due 6/1/21)               
      Term Loan (9.77% cash (Libor + 8.40%; Floor   3,500    3,430    3,430 
      9.50%), 5.00% ETP, Due 6/1/21)               
Aerin Medical, Inc. (2)  Medical Device  Term Loan (8.85% cash (Libor + 7.45%; Floor   4,000    3,876    3,876 
      8.75%), 4.00% ETP, Due 1/1/22)               
      Term Loan (8.85% cash (Libor + 7.45%; Floor   3,000    2,954    2,954 
      8.75%), 4.00% ETP, Due 1/1/22)               
      Term Loan (8.85% cash (Libor + 7.45%; Floor   3,000    2,954    2,954 
      8.75%), 4.00% ETP, Due 1/1/22)               
Conventus Orthopaedics, Inc. (2)  Medical Device  Term Loan (9.49% cash (Libor + 8.00%; Floor   4,000    3,928    3,928 
      9.25%), 6.00% ETP, Due 6/1/21)               
      Term Loan (9.49% cash (Libor + 8.00%; Floor   4,000    3,928    3,928 
      9.25%), 6.00% ETP, Due 6/1/21)               
      Term Loan (9.49% cash (Libor + 8.00%; Floor   4,000    3,928    3,928 
      9.25%), 6.00% ETP, Due 6/1/21)               
Lantos Technologies, Inc. (2)  Medical Device  Term Loan (11.87% PIK (Libor + 10.50%; Floor   2,479    2,466    2,466 
      11.50%), 8.91% ETP, Due 5/1/19) (13)               
Mederi Therapeutics, Inc. (2)  Medical Device  Term Loan (13.01% cash (Libor + 11.82%; Floor   173    173    163 
      12.00%), 6.00% ETP, Due 12/1/17)               
      Term Loan (13.01% cash (Libor + 11.82%; Floor   173    173    163 
      12.00%), 6.00% ETP, Due 12/1/17)               
NinePoint Medical, Inc. (2)  Medical Device  Term Loan (10.12% cash (Libor + 8.75%; Floor   2,667    2,645    2,645 
      9.25%), 4.50% ETP, Due 3/1/19)               
      Term Loan (10.12% cash (Libor + 8.75%; Floor   1,333    1,320    1,320 
      9.25%), 4.50% ETP, Due 3/1/19)               
VERO Biotech LLC (2)  Medical Device  Term Loan (9.33% cash (Libor + 8.00%; Floor   4,000    3,914    3,914 
      9.25%), 5.00% ETP, Due 1/1/22)               
      Term Loan (9.33% cash (Libor + 8.00%; Floor   4,000    3,934    3,934 
      9.25%), 5.00% ETP, Due 1/1/22)               
Total Non-Affiliate Debt Investments — Life Science           58,038    58,018 
Non-Affiliate Debt Investments — Technology — 99.1% (8)                  
Intelepeer Holdings, Inc.  Communications  Term Loan (11.39% cash (Libor + 9.95%; Floor   4,000    3,888    3,888 
      11.25%), 2.50% ETP, Due 7/1/21)               
      Term Loan (11.39% cash (Libor + 9.95%; Floor   4,000    3,927    3,927 
      11.25%), 2.50% ETP, Due 7/1/21)               
      Term Loan (11.39% cash (Libor + 9.95%; Floor   4,000    3,927    3,927 
      11.25%), 2.50% ETP, Due 7/1/21)               
PebblePost, Inc. (2)  Communications  Term Loan (10.63% cash (Libor + 9.26%; Floor   4,000    3,874    3,874 
      10.25%), 4.00% ETP, Due 7/1/21)               
      Term Loan (10.63% cash (Libor + 9.26%; Floor   4,000    3,933    3,933 
      10.25%), 4.00% ETP, Due 7/1/21)               
Le Tote, Inc. (2)  Consumer-related Technologies  Term Loan (11.02% cash (Libor + 9.65%; Floor   4,000    3,960    3,960 
      10.15%), 5.00% ETP, Due 3/1/20)               
      Term Loan (11.02% cash (Libor + 9.65%; Floor   3,000    2,969    2,969 
      10.15%), 5.00% ETP, Due 3/1/20)               
SavingStar, Inc. (2)  Consumer-related Technologies  Term Loan (11.77% cash (Libor + 10.40%; Floor   2,167    2,140    2,140 
      10.90%), 4.25% ETP, Due 6/1/20)               
      Term Loan (11.77% cash (Libor + 10.40%; Floor   1,911    1,849    1,849 
      10.90%), 3.80% ETP, Due 11/1/20)               
IgnitionOne, Inc. (2)  Internet and Media  Term Loan (11.60% cash (Libor + 10.23%; Floor   3,000    2,832    2,832 
      10.23%), 2.00% ETP, Due 4/1/22)               

 

See Notes to Consolidated Financial Statements

 12 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

December 31, 2017

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)(3)  Sector  Type of Investment (4)(7)(9)(10)  Amount   Investments (6)   Value (14) 
      Term Loan (11.60% cash (Libor + 10.23%; Floor   3,000    2,832    2,832 
      10.23%), 2.00% ETP, Due 4/1/22)               
      Term Loan (11.60% cash (Libor + 10.23%; Floor   3,000    2,832    2,832 
      10.23%), 2.00% ETP, Due 4/1/22)               
      Term Loan (11.60% cash (Libor + 10.23%; Floor   3,000    2,832    2,832 
      10.23%), 2.00% ETP, Due 4/1/22)               
Jump Ramp Games, Inc. (2)  Internet and Media  Term Loan (11.10% cash (Libor + 9.73%),   4,000    3,942    3,942 
      3.00% ETP, Due 4/1/21)               
Kixeye, Inc. (2)  Internet and Media  Term Loan (10.97% cash (Libor + 9.60%; Floor   3,000    2,900    2,900 
      10.75%), 2.00% ETP, Due 9/1/21)               
      Term Loan (10.97% cash (Libor + 9.60%; Floor   3,000    2,945    2,945 
      10.75%), 2.00% ETP, Due 9/1/21)               
MediaBrix, Inc. (2)  Internet and Media  Term Loan (12.37% cash (Libor + 11.00%; Floor   4,000    3,977    3,977 
      11.50%), 3.00% ETP, Due 1/1/20)               
Rocket Lawyer Incorporated (2)  Internet and Media  Term Loan (10.77% cash (Libor + 9.40%; Floor   4,000    3,933    3,933 
      10.50%), 3.00% ETP, Due 7/1/21)               
      Term Loan (10.77% cash (Libor + 9.40%; Floor   4,000    3,933    3,933 
      10.50%), 3.00% ETP, Due 7/1/21)               
      Term Loan (10.77% cash (Libor + 9.40%; Floor   2,000    1,963    1,963 
      10.50%), 3.00% ETP, Due 11/1/21)               
Zinio Holdings, LLC (2)  Internet and Media  Term Loan (12.62% cash (Libor + 11.25%; Floor   4,000    3,978    3,978 
      11.75%), 6.00% ETP, Due 2/1/20)               
The NanoSteel Company, Inc. (2)  Materials  Term Loan (10.87% cash (Libor + 9.50%; Floor   4,653    4,578    4,578 
      10.00%), 7.20% ETP, Due 1/1/20)               
      Term Loan (10.87% cash (Libor + 9.50%; Floor   2,327    2,289    2,289 
      10.00%), 6.45% ETP, Due 1/1/20)               
      Term Loan (10.87% cash (Libor + 9.50%; Floor   2,500    2,457    2,457 
      10.00%), 5.85% ETP, Due 3/1/20)               
Powerhouse Dynamics, Inc. (2)  Power Management  Term Loan (12.07% cash (Libor + 10.70%; Floor   1,250    1,234    1,234 
      11.20%), 3.00% ETP, Due 3/1/19)               
Luxtera, Inc.  Semiconductors  Term Loan (11.25% cash (Prime + 6.75%),   2,000    1,902    1,902 
      Due 3/28/20)               
      Term Loan (11.25% cash (Prime + 6.75%),   1,500    1,443    1,443 
      Due 3/28/20)               
Bridge2 Solutions, LLC. (2)  Software  Term Loan (10.62% cash (Libor + 9.25%; Floor   5,000    4,777    4,777 
      10.50%), 2.00% ETP, Due 11/1/21)               
      Term Loan (10.62% cash (Libor + 9.25%; Floor   5,000    4,777    4,777 
      10.50%), 2.00% ETP, Due 11/1/21)               
Digital Signal Corporation (11)(12)  Software  Term Loan (11.62% cash (Libor + 10.25%; Floor   1,290    1,256    1,210 
      10.43%), 5.00% ETP, Due 7/1/19)               
      Term Loan (11.62% cash (Libor + 10.25%; Floor   1,290    1,256    1,210 
      10.43%), 5.00% ETP, Due 7/1/19)               
      Term Loan (10.00% cash, Due 12/31/17)   501    501    483 
Education Elements, Inc. (2)  Software  Term Loan (11.37% cash (Libor + 10.00%; Floor   800    789    789 
      10.50%), 4.00% ETP, Due 1/1/19)               
      Term Loan (11.37% cash (Libor + 10.00%; Floor   950    937    937 
      10.50%), 4.00% ETP, Due 8/1/19)               
Metricly, Inc.  Software  Term Loan (13.62% cash (Libor + 12.25%; Floor   184    184    184 
      12.50%), 3.33% ETP, Due 9/1/18)               
ShopKeep.com, Inc. (2)  Software  Term Loan (11.32% cash (Libor + 9.95%; Floor   6,000    5,897    5,897 
      10.45%), 4.08% ETP, Due 10/1/20)               
      Term Loan (11.32% cash (Libor + 9.95%; Floor   4,000    3,924    3,924 
      10.45%), 3.55% ETP, Due 2/1/21)               
SIGNiX, Inc.  Software  Term Loan (12.37% cash (Libor + 11.00%; Floor   2,180    2,073    1,930 
      11.50%), 5.33% ETP, Due 2/1/20)               
SilkRoad Technology, Inc. (2)  Software  Term Loan (11.72% cash (Libor + 10.35%; Floor   7,000    6,904    6,904 
      10.85%; Ceiling 12.85%), 5.00% ETP, Due 6/1/20)               
Weblinc Corporation (2)  Software  Term Loan (11.62% cash (Libor + 10.25%; Floor   3,000    2,913    2,913 
      11.25%), 3.00% ETP, Due 3/1/21)               
xAd, Inc. (2)  Software  Term Loan (10.07% cash (Libor + 8.70%; Floor   5,000    4,895    4,895 
      10.00%), 4.75% ETP, Due 11/1/21)               

 

See Notes to Consolidated Financial Statements

 13 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

December 31, 2017

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)(3)  Sector  Type of Investment (4)(7)(9)(10)  Amount   Investments (6)   Value (14) 
      Term Loan (10.07% cash (Libor + 8.70%; Floor   5,000    4,895    4,895 
      10.00%), 4.75% ETP, Due 11/1/21)               
      Term Loan (10.07% cash (Libor + 8.70%; Floor   3,000    2,937    2,937 
      10.00%), 4.75% ETP, Due 11/1/21)               
      Term Loan (10.07% cash (Libor + 8.70%; Floor   2,000    1,958    1,958 
      10.00%), 4.75% ETP, Due 11/1/21)               
Total Non-Affiliate Debt Investments — Technology           134,142    133,889 
Non-Affiliate Debt Investments — Healthcare information and services — 6.3% (8)