Investment Strategy and Portfolio Management - The company intends to invest at least 80% of the value of its total assets in technology-related companies within its Target Industries[36] - The company employs a disciplined underwriting process that includes extensive financial analysis and validation from multiple sources to mitigate risks[39] - The company aims to balance its investment portfolio to reduce risks associated with market cycles by regularly reviewing investment criteria[39] - The company has a robust direct origination capability, sourcing transactions from various industry contacts and referrals[39] - The company’s ability to achieve its investment objectives depends on the Advisor's origination capabilities and disciplined underwriting process[160] - The investment strategy focuses on development-stage companies, which are typically rated below "investment grade" and may face significant volatility and competition[177] Financial Performance and Fees - The base management fee is set at an annual rate of 2.00% of the Company's gross assets, decreasing to 1.60% for assets exceeding $250 million[71] - The incentive fee is 20.00% of Pre-Incentive Fee Net Investment Income exceeding a hurdle rate of 1.75%[72] - The incentive fee includes a "catch-up" provision, allowing the Advisor to receive 100.00% of the Pre-Incentive Fee Net Investment Income above the hurdle rate[75] - Cumulative incentive compensation accrued and/or paid since July 1, 2014, amounts to $9,000,000[84] - Pre-Incentive Fee Net Investment Income is 2.10%, exceeding the hurdle rate of 1.75%[85] - An incentive fee of 0.35% is applicable as Pre-Incentive Fee Net Investment Income exceeds the hurdle rate but does not fully satisfy the "catch-up" provision[85] - 20.0% of cumulative net increase in net assets resulting from operations since July 1, 2014 is $10,000,000[86] Regulatory Compliance and Governance - The company is regulated as a BDC under the 1940 Act, adhering to specific regulatory requirements[100] - The company must ensure that qualifying assets represent at least 70% of total assets at the time of acquisition[106] - The company must distribute dividends at least equal to 90% of ordinary income and realized net short-term capital gains to maintain RIC status[128] - To avoid a 4% nondeductible federal excise tax, the company must distribute dividends equal to 98% of ordinary income and 98.2% of capital gains[128] - If the company qualifies as a RIC and satisfies the Annual Distribution Requirement, it will not be subject to entity-level income taxes on distributed investment company taxable income[129] - The company has adopted written policies and procedures to prevent violations of federal securities laws and designated a chief compliance officer[105] - The company intends to comply with Nasdaq corporate governance regulations and monitor compliance with future listing standards[123] - The company must derive at least 90% of its gross income from qualified sources to maintain its status as a BDC[130] Risks and Challenges - The company is exposed to risks associated with changes in interest rates, which could impact investment returns[138] - The company may face challenges in raising additional capital, which is essential for growth[138] - The lack of liquidity in investments may adversely affect the company's ability to meet obligations[138] - Economic downturns may lead to increased non-performing assets and decreased portfolio value, potentially resulting in financial losses and reduced revenues[174] - The company may not be able to manage future growth effectively, which could adversely affect its business and financial condition[160] - The unpredictable borrowing needs of portfolio companies may exceed expected funding requirements, impacting the company's reputation and lending activity[191] Portfolio Company Characteristics and Risks - The company’s portfolio companies typically require substantial additional financing, which may not be readily available, increasing the risk of loss[170] - Portfolio companies may incur debt that ranks equally with or senior to the company's investments, affecting repayment priority[186] - Portfolio companies in the technology industry are subject to intense competition and rapid technological changes, which may affect their ability to innovate and meet user needs[197] - Life science portfolio companies must navigate extensive government regulations and face risks related to product development, including the need for significant R&D and regulatory approvals[200] - Intellectual property rights are crucial for portfolio companies, and failure to protect these rights could harm business prospects and investment value[213] Advisor and Management Relationships - The company has developed strong relationships with venture capital and private equity investors, enhancing its competitive position in the market[41] - The Advisor maintains a "hands on" approach, contacting portfolio companies at least quarterly for operational and financial updates[61] - The Advisor's allocation policy may limit the company's ability to invest in certain issuers, potentially restricting investment opportunities[155] - The company relies heavily on the Advisor's referral relationships to generate investment opportunities, and failure to maintain these relationships could adversely affect its business[162] Investment Characteristics and Valuation - The company may invest in foreign portfolio companies, which could involve greater risks such as less publicly available information and varying levels of governmental regulation[217] - The company is subject to risks associated with investments having original issue discount (OID) and payment-in-kind (PIK) features, which may reflect increased credit risk and unreliable valuations[221][222] - The value of collateral securing debt investments may decrease, leading to potential losses upon foreclosure[180] - A substantial portion of assets securing investments may be in intellectual property, which could lose value if rights are challenged[181]

Financial Data and Key Metrics Changes - The company reported net investment income (NII) of $0.53 per share for Q3 2023, an increase from $0.43 per share in Q3 2022 [101] - The net asset value (NAV) decreased to $10.41 per share as of September 30, 2023, down from $11.07 per share as of June 30, 2023 [104] - Total investment income for the third quarter was $29 million, a 25% increase compared to the prior year period [14] Business Line Data and Key Metrics Changes - The loan portfolio yield was 17.1% for Q3 2023, compared to 15.9% for the same period last year [15] - New originations totaled $88 million during the quarter, with a total investment portfolio of $729 million at the end of Q3 [16][25] - The company maintained a healthy pipeline with a committed and approved backlog of $202 million, up from $159 million at the end of Q2 [88] Market Data and Key Metrics Changes - VC-backed companies faced challenges in raising new capital, with only $9 billion raised in Q3 2023, marking a nine-year low [98] - The exit market for VC-backed companies remained largely closed, impacting the ability of companies to fund operations and growth [9][28] - M&A activity in the life sciences market is expected to increase as big pharma companies seek new drugs, potentially leading to significant acquisitions [99] Company Strategy and Development Direction - The company plans to remain selective in originating new debt investments due to the challenging macro environment [6][11] - Focus on preserving the value and quality of the current portfolio while seeking high-quality new investments [12][29] - The company aims to generate solid NII for shareholders and additional long-term shareholder value through disciplined investment strategies [12][95] Management's Comments on Operating Environment and Future Outlook - Management expressed a cautious outlook, anticipating continued challenges in the investment environment into early 2024 [99] - The company is focused on credit quality and providing support to portfolio companies to navigate the current market conditions [4][12] - Management noted that the ability of VC-backed companies to raise capital is under significant stress, impacting their operational decisions [9][76] Other Important Information - The company raised an additional $14 million through its ATM program, enhancing its investment capacity [13] - Interest expense increased to $7.1 million from $5.3 million in the previous year due to higher average borrowings and interest rates [15] - The company has a potential new investment capacity of $241 million as of September 30, 2023 [14] Q&A Session Summary Question: Update on NextCar and Nexii Building investments - Management indicated that NextCar continues to raise capital but is facing challenges due to closed exit markets [35][36] - Nexii is also internally funded and has overseas contracts, but is seeking better exit opportunities [42] Question: Incremental investments in Evelo - No incremental investments were made in Evelo in Q4, and the company received an additional $11 million paydown following disappointing trial results [40][41] Question: Fair value decline for NextCar and Nexii - The decline in fair values for both companies was attributed to deteriorating exit opportunities rather than operational issues [64][76] Question: Lessons learned from Evelo investment - Management emphasized the importance of a broad-based technology platform and multiple drug candidates when underwriting life science companies [68][70] Question: Selectivity in new investments - The company is remaining selective due to market dynamics, with current leverage levels below target [71][72]

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 ...