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 ☐ 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 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022 OR (Exact name of registrant as specified in its charter) DELAW ...

Horizon Technology Finance (NASDAQ:HRZN) Q1 2022 Earnings Conference Call May 4, 2022 9:00 AM ET Company Participants Megan Bacon - Director of IR and Marketing Rob Pomeroy - Chairman and CEO Jerry Michaud - President Dan Trolio - CFO Conference Call Participants Paul Johnson - KBW Operator Greetings, and welcome to Horizon Technology Finance Corporation First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal ...

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 DELAWARE 27-2114934 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 312 Farmington Avenue (Address of principal executive offices) (Zip Code) Farmington, CT 06032 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022 OR ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 1 ...

Financial Data and Key Metrics Changes - The portfolio at year-end stood at $458 million, an increase of 30% from the end of 2020, despite nearly $175 million in pre-payments [8][10] - Net investment income (NII) for the year was $1.41 per share, exceeding the distribution level of $1.25 per share [9][35] - The company achieved a portfolio yield on debt investments of 16.2% for the second consecutive quarter and a full-year yield of 15.7% [10][33] - The net asset value (NAV) was $11.56 per share, a slight reduction from the prior quarter but up 5% from the end of 2020 [10][37] Business Line Data and Key Metrics Changes - In Q4, the company funded a record number of 17 transactions totaling $80 million [14] - The onboarding yield during the quarter was 11.3%, reflecting the effectiveness of the predictive pricing strategy [14][33] - The committed and approved backlog at year-end was $127 million, the largest year-end total to date [9][16] Market Data and Key Metrics Changes - The venture capital environment saw approximately $330 billion invested in VC-backed companies in 2021, nearly doubling the previous record [19] - VC fundraising for the year surpassed $100 billion for the first time, reaching $128 billion [19] - The total exit value for VC-backed companies was nearly $775 billion, although recent underperformance in SPAC transactions was noted [20] Company Strategy and Development Direction - The company plans to continue expanding its portfolio and generating strong NII, leveraging its predictive pricing strategy [12][26] - The advisor is actively strengthening the Horizon platform through new hires and promotions [12] - The company aims to maintain a disciplined approach in underwriting and seek quality investments to enhance shareholder value [26] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the impact of global events, inflation, and supply chain issues on the broader economy [7][66] - The demand for venture debt is expected to remain strong, with a robust pipeline of investment opportunities [13][21] - The company believes it is well-positioned to compete in the current environment, despite challenges in the public markets [21][55] Other Important Information - The company raised approximately $30 million of equity in 2021, all at a premium to NAV [11] - The company ended the year with available liquidity of $71 million, consisting of $46 million in cash and $25 million in credit facilities [29] - The debt-to-equity ratio stood at 1.1 to 1, lower than the target leverage of 1.2 to 1 [30] Q&A Session Summary Question: Is venture debt becoming more relevant in current conversations? - Management noted that in tightening markets, companies often seek non-dilutive capital like venture debt to extend their cash runway [42][43] Question: What is the outlook for deploying the new capital capacity? - The company plans to deploy debt to grow towards its target leverage of 1.2 times, utilizing both cash and available credit [44] Question: How does the company view the impact of valuation pullbacks? - Management acknowledged that while there are opportunities due to companies seeking liquidity, caution is necessary as some companies may struggle to raise equity at appropriate valuations [52][55] Question: Will Q1 prepayment activity be affected by current market dynamics? - Management indicated that while Q1 is typically slow for prepayments, current market conditions may further temper prepayment activity [56][58] Question: What is the outlook for credit quality and loan-to-value ratios? - The company continues to underwrite to low loan-to-values and is cautious about macroeconomic impacts on portfolio companies [64][66]

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, 2021 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF ◻ 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER: 814-00802 HORIZON TECHNOLOGY FINANCE CORPORATION (Exact name of registrant as specified in its charter) | DELAWARE | 2 ...

Horizon Technology Finance Corporation (NASDAQ:HRZN) Q3 2021 Earnings Conference Call October 27, 2021 9:00 AM ET Company Participants Megan Bacon - Director of Investor Relations & Marketing Rob Pomeroy - Chairman & Chief Executive Officer Jerry Michaud - President & Director Dan Trolio - Executive Vice President & Chief Financial Officer Conference Call Participants Sarkis Sherbetchyan - B.Riley Securities Ryan Lynch - KBW Operator Greetings. Welcome to Horizon Technology Finance Corporation Third Quarter ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021 OR ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____TO COMMISSION FILE NUMBER: 814-00802 HORIZON TECHNOLOGY FINANCE CORPORATION (Exact name of registrant as specified in its charter) ...

Horizon Technology Finance Corporation (NASDAQ:HRZN) Q2 2021 Earnings Conference Call July 28, 2021 9:00 AM ET Company Participants Megan Fox - Investor Relations Rob Pomeroy - Chairman and Chief Executive Officer Jerry Michaud - President Dan Trolio - Chief Financial Officer Conference Call Participants Sarkis Sherbetchyan - B. Riley Securities Ryan Lynch - KBW Operator Greetings and welcome to Horizon Technology Finance Corporation's Second Quarter 2021 Earnings Conference Call. At this time, all particip ...

[PART I: FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section provides the company's consolidated financial statements, management's discussion, and market risk disclosures [Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements of Horizon Technology Finance Corporation, including statements of assets and liabilities, operations, changes in net assets, cash flows, and detailed schedules of investments as of June 30, 2021, with comparative data for previous periods. It also includes comprehensive notes to these financial statements [Consolidated Statements of Assets and Liabilities](index=4&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) As of June 30, 2021, total assets increased to $454.1 million from $407.2 million at December 31, 2020, driven by a rise in the fair value of investments. Total liabilities also grew to $229.9 million from $194.6 million, primarily due to increased borrowings. Consequently, total net assets rose to $224.3 million, with net asset value per share increasing to $11.20 from $11.02 Consolidated Statements of Assets and Liabilities (in thousands) | | June 30, 2021 (Unaudited) | December 31, 2020 | | :--- | :--- | :--- | | **Total investments at fair value** | $404,121 | $352,545 | | **Total assets** | $454,118 | $407,157 | | **Total liabilities** | $229,854 | $194,560 | | **Total net assets** | $224,264 | $212,597 | | **Net asset value per common share** | $11.20 | $11.02 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2021, total investment income was $13.5 million, nearly flat compared to the same period in 2020. Net investment income was $6.1 million, or $0.31 per share, down from $6.7 million, or $0.40 per share, in Q2 2020. For the six-month period, total investment income rose to $26.7 million from $23.6 million year-over-year, and net investment income increased to $12.1 million from $11.0 million Key Operational Data (in thousands, except per share data) | | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Total investment income** | $13,489 | $13,524 | $26,704 | $23,638 | | **Total expenses** | $7,322 | $6,818 | $14,471 | $12,649 | | **Net investment income** | $6,111 | $6,706 | $12,115 | $10,989 | | **Net increase in net assets from operations** | $6,730 | $7,925 | $12,750 | $7,216 | | **Net investment income per common share** | $0.31 | $0.40 | $0.62 | $0.65 | | **Net increase in net assets per common share** | $0.34 | $0.47 | $0.65 | $0.43 | [Consolidated Statements of Changes in Net Assets](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets) For the six months ended June 30, 2021, net assets increased from $212.6 million to $224.3 million. This change was driven by a $12.8 million net increase from operations and $10.7 million from the issuance of common stock, offset by $11.9 million in distributions declared - Net assets increased to **$224.3 million** at June 30, 2021, from **$212.6 million** at December 31, 2020[11](index=11&type=chunk) - Key changes in net assets for the six months ended June 30, 2021 include a **$12.8 million** net increase from operations, **$10.7 million** from common stock issuance, and **$11.9 million** in distributions declared[11](index=11&type=chunk)[12](index=12&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2021, net cash used in operating activities was $38.6 million, primarily due to the purchase of investments. Net cash provided by financing activities was $32.2 million, driven by the issuance of senior notes and common stock, which offset debt repayments and distributions. This resulted in a net decrease in cash of $6.4 million Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(38,611) | $(29,702) | | Net cash provided by financing activities | $32,188 | $50,842 | | Net (decrease) increase in cash | $(6,423) | $21,140 | | Cash, cash equivalents and restricted cash, end of period | $41,335 | $38,525 | [Consolidated Schedules of Investments](index=10&type=section&id=Consolidated%20Schedules%20of%20Investments) As of June 30, 2021, the total investment portfolio had a fair value of $404.1 million, up from $352.5 million at year-end 2020. The portfolio is primarily composed of debt investments (95.5% of fair value), with smaller allocations to warrants, equity, and other investments. The largest sector concentrations are in Life Science (Biotechnology and Medical Devices) and Technology (primarily Consumer-Related and Software) Portfolio Composition by Investment Type (June 30, 2021) | Investment Type | Fair Value (in thousands) | Percentage of Total Portfolio | | :--- | :--- | :--- | | Debt | $385,814 | 95.5% | | Warrants | $16,215 | 4.0% | | Other | $1,700 | 0.4% | | Equity | $392 | 0.1% | | **Total** | **$404,121** | **100.0%** | Portfolio Composition by Industry Sector (June 30, 2021) | Industry Sector | Fair Value (in thousands) | Percentage of Total Portfolio | | :--- | :--- | :--- | | Life Science | $187,217 | 46.3% | | Technology | $152,551 | 37.8% | | Healthcare Information and Services | $11,245 | 2.8% | | Sustainability | $9,237 | 2.3% | | Other | $43,871 | 10.8% | [Notes to the Consolidated Financial Statements](index=23&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies and financial results. Key topics include the company's organization as a BDC and RIC, fair value measurement of investments (especially Level 3 assets), related party transactions with its Advisor, specifics on borrowings and credit facilities, off-balance-sheet commitments, and distribution policies - The company is an externally managed, non-diversified, closed-end investment company regulated as a Business Development Company (BDC) and has elected to be treated as a Regulated Investment Company (RIC) for tax purposes. Its primary business is making secured debt investments to development-stage companies[43](index=43&type=chunk) - The company uses a three-level hierarchy for fair value measurement. As of June 30, 2021, Level 3 assets, which use significant unobservable inputs, totaled **$402.9 million**, primarily consisting of debt investments valued using discounted cash flow models[119](index=119&type=chunk)[124](index=124&type=chunk)[140](index=140&type=chunk) - The company has an Investment Management Agreement with Horizon Technology Finance Management LLC (the Advisor), which earns a base management fee and a two-part incentive fee. For Q2 2021, the base management fee was **$1.8 million** and the performance-based incentive fee was **$1.5 million**[90](index=90&type=chunk)[92](index=92&type=chunk)[99](index=99&type=chunk) - As of June 30, 2021, the company had **$220.2 million** in total borrowings outstanding, net of issuance costs, across its Key Facility, NYL Facility, Asset-Backed Notes, and 2026 Notes. The company redeemed its **6.25% 2022 Notes** in April 2021 and issued new **4.875% 2026 Notes** in March 2021[151](index=151&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk) - The company had unfunded commitments to extend credit totaling **$96.0 million** as of June 30, 2021, which are subject to financial or non-financial milestones[166](index=166&type=chunk)[167](index=167&type=chunk) - The company's undistributed spillover income was **$0.34 per share** as of June 30, 2021[170](index=170&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and results of operations, highlighting the impact of COVID-19, portfolio composition, investment activity, and asset quality. The analysis covers comparisons of operating results for the three and six months ended June 30, 2021 and 2020, liquidity and capital resources, and critical accounting policies [Portfolio Composition and Investment Activity](index=46&type=section&id=Portfolio%20Composition%20and%20Investment%20Activity) As of June 30, 2021, the investment portfolio's fair value was $404.1 million across 39 debt investments and 66 warrant positions, up from $352.5 million at year-end 2020. Debt investments constituted 95.5% of the portfolio. For the six months ended June 30, 2021, the company made $118.7 million in new debt investments and received $65.7 million in principal payments and early pay-offs Portfolio Investment Activity for Six Months Ended June 30 (in thousands) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Beginning portfolio | $352,545 | $319,551 | | New debt investments | $118,660 | $105,554 | | Principal payments & Early pay-offs | $(65,672) | $(61,168) | | Ending portfolio | $404,121 | $355,880 | - The portfolio's industry concentration at June 30, 2021 was led by Life Sciences (**47.1%**) and Technology (**48.0%**), with the largest sub-sectors being Medical Devices (**31.3%**) and Consumer-Related Technologies (**22.5%**)[189](index=189&type=chunk) [Debt Investment Asset Quality](index=48&type=section&id=Debt%20Investment%20Asset%20Quality) The company uses an internal credit rating system from 1 (high risk) to 4 (highest quality). As of June 30, 2021, the weighted average credit rating of the debt portfolio was 3.1. 94.0% of the debt portfolio at fair value was rated 3 or 4, indicating a standard or high credit quality. There were no investments rated 1 (deteriorating credit quality) Debt Investment Credit Rating Distribution (by Fair Value) | Credit Rating | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | 4 (Highest Quality) | 11.5% | 23.4% | | 3 (Standard Risk) | 82.5% | 72.2% | | 2 (Increased Risk) | 6.0% | 3.9% | | 1 (Deteriorating) | 0.0% | 0.5% | | **Weighted Average** | **3.1** | **3.2** | [Consolidated Results of Operations](index=49&type=section&id=Consolidated%20Results%20of%20Operations) For the six months ended June 30, 2021, total investment income increased 13.0% to $26.7 million, driven by a larger average debt portfolio. Total expenses rose 14.4% to $14.5 million due to higher interest, management, and incentive fees. Net investment income increased to $12.1 million from $11.0 million in the prior-year period - For Q2 2021, total investment income was flat at **$13.5 million** compared to Q2 2020. The increase in interest income from a larger portfolio was offset by a **42.2%** decrease in fee income[199](index=199&type=chunk) - For the six months ended June 30, 2021, total investment income grew by **$3.1 million** (**13.0%**) year-over-year, primarily due to a **14.9%** increase in the average size of the debt investment portfolio[215](index=215&type=chunk) - For the six months ended June 30, 2021, the company realized a net loss on investments of **$3.7 million**, primarily from the settlement of one debt investment. This contrasts with a **$2.8 million** net realized gain in the same period of 2020[226](index=226&type=chunk)[228](index=228&type=chunk) - Net unrealized appreciation was **$4.7 million** for the first six months of 2021, a significant reversal from the **$6.5 million** net unrealized depreciation in the same period of 2020[229](index=229&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2021, the company had $39.8 million in cash and money market funds. Primary sources of capital are equity offerings, credit facilities, and public debt. During the first six months of 2021, the company raised $10.7 million in net proceeds from its ATM equity program. Total borrowings stood at $223.3 million, with an additional $159.3 million in unused commitment capacity across its credit facilities - The company sold **727,448 shares** of common stock under its At-The-Market (ATM) program during the six months ended June 30, 2021, raising net proceeds of **$10.7 million**[234](index=234&type=chunk) - The company's Board extended a stock repurchase program for up to **$5.0 million** of its common stock, effective through June 30, 2022. No shares were repurchased in the first half of 2021[235](index=235&type=chunk)[237](index=237&type=chunk) Borrowing Capacity as of June 30, 2021 (in thousands) | Facility | Total Commitment | Balance Outstanding | Unused Commitment | | :--- | :--- | :--- | :--- | | Key Facility | $125,000 | $15,000 | $110,000 | | NYL Facility | $100,000 | $50,750 | $49,250 | | Asset-Backed Notes | $100,000 | $100,000 | $0 | | 2026 Notes | $57,500 | $57,500 | $0 | | **Total** | **$382,500** | **$223,250** | **$159,250** | [Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is subject to interest rate risk as its debt investments are primarily floating rate, while some of its borrowings are fixed rate. As of June 30, 2021, 100% of the debt portfolio was at floating rates. The company's net income depends on the spread between the rates at which it borrows and invests. A sensitivity analysis shows that a 100 basis point increase in rates would increase net assets by approximately $2.0 million annually, excluding incentive fees - As of June 30, 2021, **100%** of the outstanding principal amount of the company's debt investments bore interest at floating rates[290](index=290&type=chunk) Annualized Impact of Interest Rate Changes on Net Assets (in thousands) | Change in Basis Points | Change in Net Assets (1) | | :--- | :--- | | Up 300 basis points | $7,863 | | Up 200 basis points | $4,431 | | Up 100 basis points | $2,010 | | Down 100-300 basis points | $0 | - The company's net income is dependent on the difference between its borrowing rates and investment rates. While floating-rate assets provide a hedge against rising rates, the company's cost of funds on its floating-rate credit facilities would also increase[294](index=294&type=chunk) [Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of June 30, 2021, and concluded they were effective. There were no material changes in internal control over financial reporting during the most recently completed fiscal quarter - As of June 30, 2021, the CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level[295](index=295&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the second quarter of 2021[298](index=298&type=chunk) [PART II: OTHER INFORMATION](index=64&type=section&id=PART%20II%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, and exhibits [Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings, nor is it aware of any material legal proceedings being threatened against it or its Advisor - Neither the company nor its Advisor is currently subject to any material legal proceedings[299](index=299&type=chunk) [Risk Factors](index=64&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2020 - No material changes have occurred during the six months ended June 30, 2021, to the risk factors set forth in the company's annual report on Form 10-K for the year ended December 31, 2020[300](index=300&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=64&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) None - None[301](index=301&type=chunk) [Defaults Upon Senior Securities](index=64&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None - None[302](index=302&type=chunk) [Other Information](index=64&type=section&id=Item%205.%20Other%20Information) None - None[303](index=303&type=chunk) [Exhibits](index=65&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, which include certifications by the Chief Executive Officer and Chief Financial Officer as required by the Sarbanes-Oxley Act of 2002 - The exhibits filed with this report include CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[306](index=306&type=chunk)

Horizon Technology Finance (NASDAQ:HRZN) Q1 2021 Earnings Conference Call April 28, 2021 9:00 AM ET Company Participants Megan Bacon - Director of Investor Relations and Marketing Rob Pomeroy - Chairman and Chief Executive Officer Jerry Michaud - President Dan Trolio - Chief Financial Officer Conference Call Participants Sarkis Sherbetchyan - B. Riley FBR Ryan Lynch - KBW Operator Greetings, and welcome to Horizon Technology Finance Corporation First Quarter 2021 Earnings Call. At this time, all participant ...