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, 2023 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) ...

Horizon Technology Finance Corporation (NASDAQ:HRZN) Q2 2023 Earnings Conference Call August 2, 2023 9:00 AM ET Company Participants Megan Bacon - Director, IR & Marketing Robert Pomeroy - Chairman & CEO Gerald Michaud - President & Director Daniel Trolio - EVP, CFO & Treasurer Conference Call Participants Bryce Rowe - B. Riley Securities Christopher Nolan - Ladenburg Thalmann Ryan Lynch - KBW Operator Greetings, and welcome to Horizon Technology Finance Corporation Second Quarter 2023 Earnings Call. [Opera ...

PART I: FINANCIAL INFORMATION [Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) Net investment income grew YoY, but significant investment losses sharply reduced the net increase in net assets from operations [Consolidated Statements of Assets and Liabilities](index=4&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) Total assets and net assets increased, while total liabilities and net asset value per share decreased from year-end 2022 Assets and Liabilities Comparison (in thousands) | Metric | June 30, 2023 | December 31, 2022 | Change | | :--- | :--- | :--- | :--- | | Total Investments at Fair Value | $715,391 | $720,026 | ($4,635) | | Total Assets | $787,408 | $766,826 | $20,582 | | Total Liabilities | $431,989 | $448,378 | ($16,389) | | Total Net Assets | $355,419 | $318,448 | $36,971 | - Net asset value (NAV) per common share decreased to **$11.07** as of June 30, 2023, from **$11.47** at the end of 2022[12](index=12&type=chunk) [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Higher investment income was offset by a significant net realized loss, leading to a sharp decline in net asset growth Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2023 | Q2 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Total Investment Income | $28,117 | $18,588 | $56,154 | $32,792 | | Total Expenses | $11,865 | $9,900 | $26,707 | $18,275 | | Net Investment Income | $16,073 | $8,582 | $29,084 | $14,311 | | Net Realized and Unrealized Loss | ($15,921) | ($965) | ($23,626) | ($3,172) | | Net Increase in Net Assets | $152 | $7,617 | $5,458 | $11,139 | | Net Investment Income per Share | $0.54 | $0.35 | $1.00 | $0.62 | - For the three months ended June 30, 2023, the company experienced a significant net realized loss of **$16.5 million**, a primary driver of the sharp decline in the net increase in net assets[14](index=14&type=chunk) [Consolidated Statements of Changes in Net Assets](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets) Net assets grew primarily due to common stock issuances, which offset declared distributions and minimal operational gains - Total net assets increased from **$318.4 million** at December 31, 2022, to **$355.4 million** at June 30, 2023[17](index=17&type=chunk) - The increase in net assets was primarily driven by the issuance of common stock, which provided net proceeds of **$51.2 million**, and was partially offset by distributions declared of **$20.1 million**[17](index=17&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow turned positive in H1 2023 due to a significant reduction in the purchase of new investments Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $7,246 | ($110,737) | | Net Cash from Financing Activities | $15,452 | $141,351 | | **Net Increase in Cash** | **$22,698** | **$30,614** | - The significant shift in operating cash flow was mainly due to a substantial decrease in the purchase of new investments (**$87.6 million** in 2023 vs **$253.7 million** in 2022)[20](index=20&type=chunk) [Consolidated Schedules of Investments](index=9&type=section&id=Consolidated%20Schedules%20of%20Investments) The investment portfolio is predominantly composed of debt investments, concentrated in the Life Science and Technology sectors Portfolio Composition by Investment Type at Fair Value (June 30, 2023) | Investment Type | Fair Value (in thousands) | Percentage of Total | | :--- | :--- | :--- | | Debt Investments | $683,309 | 95.5% | | Warrant Investments | $25,483 | 3.6% | | Equity Investments | $5,299 | 0.7% | | Other Investments | $1,300 | 0.2% | | **Total** | **$715,391** | **100.0%** | Portfolio Composition by Industry Sector at Fair Value (June 30, 2023) | Industry Sector | Fair Value (in thousands) | Percentage of Total | | :--- | :--- | :--- | | Life Science | $305,232 | 42.7% | | Technology | $290,138 | 40.5% | | Sustainability | $84,039 | 11.7% | | Healthcare Information & Services | $36,482 | 5.1% | | **Total** | **$715,891** | **100.0%** | - As of June 30, 2023, the company had two investments on non-accrual status with a total cost of **$25.6 million** and a fair value of **$15.3 million**[78](index=78&type=chunk) [Notes to the Consolidated Financial Statements](index=29&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) Key disclosures include the company's BDC/RIC status, a change in investment advisor, and details on fees, leverage, and commitments - The company is an externally managed BDC that has elected to be treated as a RIC, focusing on secured debt investments in technology, life science, and other sectors[59](index=59&type=chunk) - The company's investment advisor was acquired by an affiliate of Monroe Capital LLC, effective June 30, 2023, with the economic terms of the management agreement remaining the same[108](index=108&type=chunk) - For Q2 2023, the incentive fee was subject to a cap and deferral mechanism, which reduced the period's expense by **$3.1 million**[117](index=117&type=chunk) - As of June 30, 2023, the company's asset coverage ratio was **184%**, above the required minimum of **150%** for a BDC[167](index=167&type=chunk) - The company had unfunded commitments to extend credit totaling **$143.4 million** as of June 30, 2023[190](index=190&type=chunk) - As of June 30, 2023, the company's undistributed spillover income was **$1.02 per share**[198](index=198&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses higher investment income driven by portfolio growth and rates, offset by significant realized losses on debt investments [Portfolio Composition and Investment Activity](index=47&type=section&id=Portfolio%20Composition%20and%20Investment%20Activity) The portfolio remains dominated by debt investments, with a notable decrease in net new debt investments compared to the prior year Portfolio Fair Value by Investment Type | Investment Type | June 30, 2023 (Value) | June 30, 2023 (%) | Dec 31, 2022 (Value) | Dec 31, 2022 (%) | | :--- | :--- | :--- | :--- | :--- | | Debt investments | $683,309 | 95.5% | $686,458 | 95.3% | | Warrants | $25,483 | 3.6% | $29,712 | 4.1% | | Other investments | $1,300 | 0.2% | $1,300 | 0.2% | | Equity | $5,299 | 0.7% | $2,556 | 0.4% | | **Total** | **$715,391** | **100.0%** | **$720,026** | **100.0%** | - Net new debt investments for the three months ended June 30, 2023, were **$40.5 million**, a significant decrease from **$134.2 million** in the same period of 2022[220](index=220&type=chunk) Debt Investment Portfolio by Credit Rating (Fair Value) | Credit Rating | June 30, 2023 (%) | Dec 31, 2022 (%) | | :--- | :--- | :--- | | 4 (Highest Quality) | 22.2% | 13.7% | | 3 (Standard Risk) | 67.3% | 81.2% | | 2 (Increased Risk) | 9.1% | 3.9% | | 1 (Deteriorating) | 1.4% | 1.2% | [Consolidated Results of Operations](index=49&type=section&id=Consolidated%20Results%20of%20Operations) Q2 2023 results show strong investment income growth, higher interest expenses, and a large net realized loss from portfolio company settlements - Q2 2023 investment income rose **51.3% YoY** to **$28.1 million**, driven by a larger average debt portfolio and a higher prime rate[225](index=225&type=chunk) - Q2 2023 expenses increased **19.8% YoY** to **$11.9 million**, driven by a **69.9%** rise in interest expense[229](index=229&type=chunk)[230](index=230&type=chunk) - Performance-based incentive fees for Q2 2023 decreased **94.5% YoY** to **$0.1 million** due to a **$3.1 million** reduction from the Incentive Fee Cap and Deferral Mechanism[232](index=232&type=chunk) - The company realized a net loss of **$16.5 million** in Q2 2023, primarily from the settlement of three debt investments[235](index=235&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained liquidity through cash reserves and capital raising activities, including a follow-on offering and ATM program sales - As of June 30, 2023, the company had **$50.3 million** in cash and money market funds available for investments and operations[251](index=251&type=chunk) - In June 2023, the company completed a follow-on public offering of 3.25 million shares, raising net proceeds of **$38.9 million**[258](index=258&type=chunk) - During Q2 2023, the company sold 448,175 shares under its At-The-Market (ATM) program, generating net proceeds of approximately **$5.1 million**[253](index=253&type=chunk) - The Board extended a stock repurchase program allowing for the repurchase of up to **$5.0 million** of common stock; no shares were repurchased in H1 2023[260](index=260&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, with floating-rate debt investments making income sensitive to rate changes - As of June 30, 2023, **95%** of the outstanding principal amount of the company's debt investments bore interest at floating rates[320](index=320&type=chunk) Annual Impact of Interest Rate Changes on Net Assets (in thousands) | Change in Basis Points | Impact on Investment Income | Impact on Interest Expense | Change in Net Assets | | :--- | :--- | :--- | :--- | | +300 | $19,026 | $0 | $19,026 | | +100 | $6,407 | $0 | $6,407 | | -100 | ($6,114) | $0 | ($6,114) | | -300 | ($17,400) | $0 | ($17,400) | - The company also faces risks from inflation and supply chain disruptions, which could negatively affect the profit margins of its portfolio companies[324](index=324&type=chunk) [Controls and Procedures](index=62&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of June 30, 2023, and concluded they were **effective**[325](index=325&type=chunk) - **No material changes** were made to the company's internal control over financial reporting during the second quarter of 2023[326](index=326&type=chunk) PART II: OTHER INFORMATION [Legal Proceedings](index=62&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no current or threatened material legal proceedings - As of the filing date, the company reports **no material legal proceedings**[327](index=327&type=chunk) [Risk Factors](index=62&type=section&id=Item%201A.%20Risk%20Factors) A new risk factor was added concerning uninsured cash balances at financial institutions and broader financial industry instability - A new risk factor was added concerning cash balances held in excess of **FDIC insurance limits** and financial industry instability[329](index=329&type=chunk) [Other Part II Items](index=63&type=section&id=Other%20Part%20II%20Items) No unregistered equity sales, senior security defaults, or other material information were reported for the period - Item 2 (Unregistered Sales of Equity Securities), Item 3 (Defaults Upon Senior Securities), and Item 5 (Other Information) all reported **"None"**[334](index=334&type=chunk)[335](index=335&type=chunk)[336](index=336&type=chunk) - Item 4 (Mine Safety Disclosures) was reported as **"Not applicable"**[336](index=336&type=chunk)

in, Corbel Bld., 16 pt., Bright Blue Investor Presentation – First Quarter 2023 NASDAQ: HRZN www.horizontechfinance.com ©2023 Horizon. Confidential and proprietary. ―Future operating results, including the performance of our existing loans and warrants; ―Introduction, withdrawal, success and timing of business initiatives and strategies; ―Changes in political, economic or industry conditions, the interest rate environment or financial and capital markets, which could result in changes in the value of our as ...

Horizon Technology Finance (NASDAQ:HRZN) Q1 2023 Earnings Conference Call May 3, 2023 9:00 AM ET Company Participants Megan Bacon – Director-Investor Relations and Marketing Rob Pomeroy – Chairman and Chief Executive Officer Jerry Michaud – President Dan Trolio – Chief Financial Officer Conference Call Participants Christopher Nolan – Ladenburg Thalmann Bryce Rowe – B. Riley Ryan Lynch – KBW Operator Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Horizon Technology Finance ...

Table of Contents FOR THE TRANSITION PERIOD FROM _____TO COMMISSION FILE NUMBER: 814-00802 HORIZON TECHNOLOGY FINANCE CORPORATION 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 MARCH 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Exact name of registrant as specified in its charter) Dela ...

Horizon Technology Finance Corp. (NASDAQ:HRZN) Q4 2022 Earnings Conference Call March 1, 2023 9:00 AM ET Company Participants Megan Bacon - Director of Investor Relations & Marketing Robert Pomeroy - Chairman & Chief Executive Officer Gerald Michaud - President & Director Daniel Trolio - Executive Vice President, Chief Financial Officer & Treasurer Conference Call Participants Ryan Lynch - KBW Bryce Rowe - B. Riley Vilas Abraham - UBS Operator Ladies and gentlemen greetings and welcome to the Horizon Techno ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 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 | 2 ...

Horizon Technology Finance Corp (NASDAQ:HRZN) Q3 2022 Earnings Conference Call November 2, 2022 9:00 AM ET Company Participants Megan Bacon - Director, IR & Marketing Robert Pomeroy - Chairman & CEO Gerald Michaud - President & Director Daniel Trolio - EVP, CFO & Treasurer Conference Call Participants Paul Johnson - KBW Vilas Abraham - UBS Operator Ladies and gentlemen, greetings, and welcome to the Horizon Technology Finance Corporation Third Quarter 2022 Earnings Call. [Operator Instructions]. As a remind ...

Horizon Technology Finance (NASDAQ:HRZN) Q2 2022 Earnings Conference Call August 3, 2022 9:00 AM ET Company Participants Megan Bacon - Director, Investor Relations & Marketing Rob Pomeroy - Chairman & Chief Executive Officer Jerry Michaud - President Dan Trolio - Chief Financial Officer Conference Call Participants Paul Johnson - KBW Megan Bacon Thank you and welcome to Horizon Technology Finance Corporation Second Quarter 2022 Conference Call. Representing the company today are Rob Pomeroy, Chairman and Ch ...