Horizon Technology Finance Corp (NASDAQ:HRZN) Q3 2020 Earnings Conference Call November 4, 2020 9:00 AM ET Company Participants Megan Bacon - Marketing Support Manager Robert Pomeroy - Chairman & CEO Gerald Michaud - President & Director Daniel Trolio - SVP, Treasurer & CFO Conference Call Participants Mike Smyth - B. Riley Securities Bryce Rowe - National Securities Corporation Ryan Lynch - KBW Operator Greetings. Welcome to the Horizon Technology Finance Third Quarter 2020 Conference Call. [Operator Instr ...

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, 2020 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 (NASDAQ:HRZN) Q2 2020 Earnings Conference Call July 29, 2020 9:00 AM ET Company Participants Megan Bacon – Marketing Support Manager Rob Pomeroy – Chairman and Chief Executive Officer Jerry Michaud – President Dan Trolio – Chief Financial Officer Conference Call Participants Tim Hayes – B. Riley FBR Ryan Lynch – KBW Operator Greetings, and welcome to Horizon Technology Finance Corporation Second Quarter 2020 Earnings Call. At this time all participants are in a listen-only mode. A ...

Debt Investment Portfolio - As of June 30, 2020, the total fair value of the debt investment portfolio was $342.7 million, representing 96.3% of the total portfolio[189] - New debt investments for the three months ended June 30, 2020, amounted to $54.9 million, compared to $55.1 million in the same period of 2019[190] - The ending portfolio value as of June 30, 2020, was $355.9 million, an increase from $274.8 million as of June 30, 2019[190] - The largest sector in the debt investment portfolio as of June 30, 2020, was Medical Device, valued at $91.7 million, accounting for 26.8% of the total portfolio[191] - The company received principal payments of $4.9 million on investments during the three months ended June 30, 2020[190] - The net unrealized depreciation on investments for the six months ended June 30, 2020, was $6.5 million[190] - The company’s five largest debt investments represented 25% of total debt investments outstanding as of June 30, 2020[192] - The company has a total of 35 debt investments, unchanged from December 31, 2019[189] - As of June 30, 2020, the weighted average credit rating of the company's debt investments was 2.9, down from 3.1 as of December 31, 2019[194] - The debt investment portfolio as of June 30, 2020, included 35 investments with a fair value of $342.7 million, compared to 35 investments with a fair value of $288.4 million as of December 31, 2019[194] - The percentage of debt investments rated 4 decreased from 15.7% in December 2019 to 6.9% in June 2020, while those rated 3 increased from 75.0% to 77.4%[194] Financial Performance - Total investment income for the three months ended June 30, 2020, was $13,524,000, an increase from $10,470,000 in the same period of 2019, representing a growth of approximately 29.5%[209] - Net investment income for the three months ended June 30, 2020, was $6,706,000, compared to $5,012,000 for the same period in 2019, reflecting an increase of about 33.8%[209] - Average debt investments at fair value increased to $328,036,000 for the three months ended June 30, 2020, up from $239,284,000 in 2019, indicating a growth of approximately 37.2%[209] - Total expenses for the three months ended June 30, 2020, were $6,818,000, compared to $6,166,000 in 2019, which is an increase of about 10.6%[209] - Net unrealized appreciation on investments for the three months ended June 30, 2020, was $1,944,000, compared to $4,124,000 in 2019, showing a decrease of approximately 52.8%[209] - Net increase in net assets resulting from operations for the three months ended June 30, 2020, was $7,925,000, compared to $4,538,000 in 2019, indicating an increase of approximately 74.5%[209] - Total investment income increased by $3.1 million, or 29.2%, to $13.5 million for the three months ended June 30, 2020 compared to the same period in 2019[210] - Interest income on debt investments rose by $2.9 million, or 31.0%, to $12.1 million for the three months ended June 30, 2020, driven by a 37.1% increase in the average size of the debt investment portfolio[210] - Fee income increased by $0.9 million, or 116.4%, to $1.7 million for the three months ended June 30, 2020, primarily due to higher prepayment fee rates and increased amendment fee income[212] - Net expenses increased by $1.4 million, or 24.9%, to $6.8 million for the three months ended June 30, 2020 compared to the same period in 2019[214] - Interest expense increased by $0.4 million, or 21.1%, to $2.6 million for the three months ended June 30, 2020, due to a 41.5% increase in average borrowings[215] - Total investment income for the six months ended June 30, 2020 increased by $4.9 million, or 25.9%, to $23.6 million compared to the same period in 2019[227] - Interest income on debt investments for the six months ended June 30, 2020 increased by $4.8 million, or 28.3%, to $21.7 million, attributed to a 35.2% increase in the average size of the debt investment portfolio[227] - Net expenses for the six months ended June 30, 2020 increased by $2.1 million, or 20.1%, to $12.6 million compared to the same period in 2019[232] - Performance-based incentive fee expense increased by $0.7 million, or 33.3%, to $2.7 million for the six months ended June 30, 2020, due to a 33.3% increase in Pre-Incentive Fee Net Investment Income[236] Borrowings and Capital Structure - The outstanding principal balance under the Key Facility was $45.0 million as of June 30, 2020, compared to $17.0 million as of December 31, 2019[252] - As of June 30, 2020, the company had a borrowing capacity of $86.8 million under the NYL Facility[253] - The Asset-Backed Notes had an outstanding principal balance of $100.0 million as of June 30, 2020[265] - The company has segregated approximately $1.2 million as restricted investments in money market funds to pay monthly interest and principal payments on the Asset-Backed Notes[266] - As of June 30, 2020, the company had $195.6 million in total borrowings, with $14.9 million due within one year and $159.3 million due in 1-3 years[270] - The company had unfunded commitments of $75.9 million as of June 30, 2020, which are not reflected on the balance sheet[270] Management and Operations - The company’s investment objective is to maximize total return through current income and capital appreciation from debt investments and warrants[183] - The company is externally managed and operates as a Business Development Company (BDC) under the Investment Company Act of 1940[184] - The Advisor earned $3.3 million and $6.0 million in management fees during the three and six months ended June 30, 2020, respectively[279] - The company expects to raise additional equity and debt capital opportunistically to support future growth, subject to market conditions[256] - The company intends to distribute all or substantially all of its investment company taxable income to remain subject to taxation as a RIC[257] - The company has adopted an "opt out" dividend reinvestment plan (DRIP) for common stockholders[277] - The company must distribute at least 90% of its net ordinary income and net short-term capital gains to qualify as a RIC[275] - The company has made and intends to continue making requisite distributions to stockholders to qualify for tax treatment applicable to RICs, generally at least 90% of investment company taxable income[297] Tax and Regulatory Considerations - The company may incur a 4% excise tax on taxable income in excess of current year distributions, if applicable[298] - The company evaluates tax positions to determine if they are "more-likely-than-not" to be sustained by tax authorities, with no material uncertain tax positions reported as of June 30, 2020[301] Investment Strategy and Risk Management - The company has used hedging instruments in the past to protect against interest rate fluctuations and may continue to do so in the future[305] - The company expects that a 300 basis point increase in interest rates would result in an increase of $2.948 million in net assets from operations[304] - The company recorded warrants as assets at estimated fair value on the grant date, which are recognized as interest income over the contractual life of the related debt investment[294] - Realized gains or losses on investments are calculated using the specific identification method, reflecting the difference between net proceeds and amortized cost basis[296] - The company expects to continue funding investments with borrowings, making net income dependent on the difference between borrowing rates and investment rates[308]

Horizon Technology Finance (NASDAQ:HRZN) Q1 2020 Earnings Conference Call April 29, 2020 9:00 AM ET Company Participants Megan Bacon – Marketing Support Manager Rob Pomeroy – Chairman and Chief Executive Officer Jerry Michaud – President Dan Trolio – Chief Financial Officer Dan Devorsetz – Chief Investment Officer Conference Call Participants Tim Hayes – B. Riley FBR Ben Zucker – Aegis capital Ryan Lynch – KBW Operator Greetings, and welcome to the Horizon Technology Finance Corporation’s First Quarter 2020 ...

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 MARCH 31, 2020 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) DELA ...

Horizon Technology Finance (NASDAQ:HRZN) Q4 2019 Earnings Conference Call March 4, 2020 9:00 AM ET Company Participants Leon Berman - IR Contact, The IGB Group Robert Pomeroy - Chairman & CEO Gerald Michaud - President Daniel Trolio - Senior VP, CFO & Treasurer Conference Call Participants Tim Hayes - B. Riley FBR Ben Zucker - Aegis Capital Ryan Lynch - KBW Operator Greetings. Welcome to Horizon Technology Finance Corporation’s Fourth Quarter and Full Year 2019 Earnings Call. At this time, all participants ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2019 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 ot ...

Horizon Technology Finance (NASDAQ:HRZN) Q3 2019 Earnings Conference Call October 30, 2019 9:00 AM ET Company Participants Megan Bacon – Marketing Support Manager Rob Pomeroy – Chairman and Chief Executive Officer Jerry Michaud – President Dan Trolio – Chief Financial Officer Conference Call Participants Paul Johnson – KBW Operator Greetings, and welcome to Horizon Technology Finance Corporation Third Quarter 2019 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A ...

[PART I: FINANCIAL INFORMATION](index=3&type=section&id=PART%20I) This section provides the consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures for Horizon Technology Finance Corporation [Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) The consolidated financial statements present the financial position, operational results, and cash flows for Horizon Technology Finance Corporation as of and for the periods ended September 30, 2019, and December 31, 2018 [Consolidated Statements of Assets and Liabilities](index=4&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) Total assets increased to **$325.0 million** by September 30, 2019, driven by higher investments, while net asset value per share remained stable at **$11.67** Consolidated Statements of Assets and Liabilities (in thousands, except per share data) | Metric | September 30, 2019 (Unaudited) | December 31, 2018 | | :--- | :--- | :--- | | **Total Investments at Fair Value** | $281,519 | $248,441 | | **Total Assets** | $324,951 | $266,749 | | **Total Liabilities** | $156,807 | $132,492 | | **Total Net Assets** | $168,144 | $134,257 | | **Net Asset Value Per Common Share** | $11.67 | $11.64 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Net investment income significantly increased to **$5.8 million** for Q3 2019 and **$14.0 million** for the nine months, reflecting improved operational performance Key Operational Data (in thousands, except per share data) | Metric | Q3 2019 | Q3 2018 | Nine Months 2019 | Nine Months 2018 | | :--- | :--- | :--- | :--- | :--- | | **Total Investment Income** | $11,375 | $7,797 | $30,150 | $22,285 | | **Net Expenses** | $5,602 | $4,395 | $16,132 | $12,383 | | **Net Investment Income** | $5,773 | $3,402 | $14,018 | $9,902 | | **Net Increase in Net Assets from Operations** | $5,206 | $4,259 | $12,769 | $9,792 | | **Net Investment Income per Share** | $0.42 | $0.30 | $1.08 | $0.86 | | **Distributions Declared per Share** | $0.30 | $0.30 | $0.90 | $0.90 | [Consolidated Statements of Changes in Net Assets](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets) Net assets grew from **$134.3 million** to **$168.1 million** for the nine months ended September 30, 2019, primarily due to operational income and stock issuance - Key drivers for the increase in net assets during the first nine months of 2019 were net income from operations (**$14.0 million**), net proceeds from stock issuance (**$33.3 million**), and net unrealized appreciation on investments (**$2.6 million**)[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$40.3 million**, offset by **$44.7 million** from financing activities, resulting in a **$4.4 million** net increase in cash for the nine months Cash Flow Summary for the Nine Months Ended September 30 (in thousands) | Cash Flow Activity | 2019 | 2018 | | :--- | :--- | :--- | | **Net Cash Used in Operating Activities** | $(40,307) | $(7,730) | | **Net Cash Provided by Financing Activities** | $44,674 | $7,045 | | **Net Increase (Decrease) in Cash** | $4,367 | $(685) | | **Cash at End of Period** | $16,958 | $5,909 | [Consolidated Schedules of Investments](index=9&type=section&id=Consolidated%20Schedules%20of%20Investments) The investment portfolio's fair value reached **$281.5 million**, primarily comprising debt investments diversified across technology and life science sectors Total Portfolio Investments (in thousands) | Date | Cost | Fair Value | | :--- | :--- | :--- | | **September 30, 2019** | $281,377 | $281,519 | | **December 31, 2018** | $250,921 | $248,441 | - The investment portfolio is primarily concentrated in debt investments, which constitute **146.9% of net assets** as of September 30, 2019[20](index=20&type=chunk) - The largest sector concentrations are Technology (**71.4% of net assets**) and Life Science (**66.6% of net assets**)[20](index=20&type=chunk) [Notes to the Consolidated Financial Statements](index=20&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) These notes detail accounting policies, related party transactions, investment specifics, fair value measurements, borrowings, and financial highlights [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, investment strategy, asset quality, and liquidity, comparing results for the periods ended September 30, 2019, and 2018 - The company's investment objective is to maximize total return by generating current income from secured debt investments (Venture Loans) and capital appreciation from associated warrants[212](index=212&type=chunk) - On October 30, 2018, stockholders approved reducing the asset coverage requirement from **200% to 150%**, allowing the company to increase its leverage[213](index=213&type=chunk) [Portfolio Composition and Investment Activity](index=55&type=section&id=Portfolio%20composition%20and%20investment%20activity) The investment portfolio's fair value was **$281.5 million**, with debt investments making up **89.9%**, and **$117.8 million** in net new debt investments originated Portfolio Composition by Investment Type (Fair Value) | Investment Type | Sept 30, 2019 (%) | Dec 31, 2018 (%) | | :--- | :--- | :--- | | Debt investments | 89.9% | 87.1% | | Warrants | 3.5% | 3.8% | | Other investments | 0.3% | 3.1% | | Equity | 1.2% | 0.7% | | Equity interest in HSLFI | 5.1% | 5.3% | - For the nine months ended September 30, 2019, the company funded **$135.3 million** in new debt investments and received **$83.6 million** in principal payments and early pay-offs[218](index=218&type=chunk) [Debt Investment Asset Quality](index=56&type=section&id=Debt%20investment%20asset%20quality) The debt portfolio maintained a weighted average credit rating of **3.1**, with **75.7%** of investments rated as standard risk Debt Investment Portfolio by Credit Rating (Fair Value) | Credit Rating | Sept 30, 2019 (%) | Dec 31, 2018 (%) | | :--- | :--- | :--- | | 4 (Highest Quality) | 17.0% | 19.3% | | 3 (Standard Risk) | 75.7% | 71.8% | | 2 (Increased Risk) | 6.8% | 8.9% | | 1 (Deteriorating) | 0.5% | 0.0% | - As of September 30, 2019, one debt investment with a fair value of **$1.5 million** was on non-accrual status and rated 1[71](index=71&type=chunk)[222](index=222&type=chunk) [Horizon Secured Loan Fund I LLC (HSLFI)](index=57&type=section&id=Horizon%20Secured%20Loan%20Fund%20I%20LLC) HSLFI, a joint venture, held **$47.1 million** in total assets, generating a **12.7%** annualized yield on debt investments for Q3 2019 - As of September 30, 2019, the company had an unfunded commitment of **$11.1 million** to HSLFI out of an original **$25.0 million** commitment[224](index=224&type=chunk) HSLFI Key Metrics | Metric | As of/For Q3 2019 | | :--- | :--- | | Total Assets | $47.1 million | | Total Investments (Fair Value) | $42.9 million | | Dollar-weighted annualized yield | 12.7% | | Number of portfolio companies | 7 | [Consolidated Results of Operations](index=62&type=section&id=Consolidated%20results%20of%20operations) Total investment income and net investment income significantly increased for both Q3 and the nine months ended September 30, 2019, driven by portfolio growth and fee income Comparison of Results of Operations (in thousands) | Metric | Q3 2019 | Q3 2018 | Nine Months 2019 | Nine Months 2018 | | :--- | :--- | :--- | :--- | :--- | | **Total Investment Income** | $11,375 | $7,797 | $30,150 | $22,285 | | **Net Investment Income** | $5,773 | $3,402 | $14,018 | $9,902 | | **Net Increase in Net Assets** | $5,206 | $4,259 | $12,769 | $9,792 | - The dollar-weighted annualized yield on debt investments increased to **17.7%** in Q3 2019 from **15.0%** in Q3 2018, reflecting higher accelerated fees from prepayments[242](index=242&type=chunk)[243](index=243&type=chunk) - For the nine months ended September 30, 2019, the Advisor waived **$1.8 million** in performance-based incentive fees, compared to a waiver of **$0.6 million** in the same period of 2018[261](index=261&type=chunk)[262](index=262&type=chunk) [Liquidity and Capital Resources](index=66&type=section&id=Liquidity%20and%20capital%20resources) The company had **$36.4 million** in cash and **$110.0 million** in unused credit, with sufficient liquidity for the next 12 months, supported by recent equity offerings - The company established a **$50.0 million** At-The-Market (ATM) sales agreement on August 2, 2019, and sold approximately **0.9 million shares** for **$10.4 million** in net proceeds by September 30, 2019[269](index=269&type=chunk)[270](index=270&type=chunk) Borrowings Outstanding (in thousands) | Facility | Sept 30, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | Key Facility | $15,000 | $90,500 | | Asset-Backed Notes | $100,000 | $0 | | 2022 Notes | $37,375 | $37,375 | | **Total Borrowings (net)** | **$149,920** | **$126,853** | - As of September 30, 2019, the company had unfunded credit commitments of **$37.8 million** to its portfolio companies[288](index=288&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=67&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to interest rate risk, with a **100 basis point** rate increase projected to boost net assets by **$2.1 million** annually Annual Impact of Interest Rate Changes on Net Assets (in thousands) | Change in Basis Points | Change in Net Assets | | :--- | :--- | | Up 300 | $7,253 | | Up 100 | $2,054 | | Down 100 | $(613) | | Down 300 | $(722) | - As of September 30, 2019, **99%** of the outstanding principal amount of the company's debt investments bore interest at floating rates, primarily based on a LIBOR index[319](index=319&type=chunk) [Controls and Procedures](index=68&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2019, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2019[324](index=324&type=chunk) - There were no material changes in internal control over financial reporting during the most recently completed fiscal quarter[325](index=325&type=chunk) [PART II: OTHER INFORMATION](index=69&type=section&id=PART%20II) This section covers legal proceedings, risk factors, equity sales, defaults, mine safety disclosures, other information, and exhibits [Legal Proceedings](index=69&type=section&id=Item%201.%20Legal%20Proceedings) Neither the company nor its Advisor is currently involved in any material legal proceedings - As of the filing date, there are no material legal proceedings involving the company or its Advisor[327](index=327&type=chunk) [Risk Factors](index=69&type=section&id=Item%201A.%20Risk%20Factors) The company faces increased financial risk due to reduced asset coverage requirements, allowing for greater leverage and potentially higher management fees - The Small Business Credit Availability Act (SBCAA) allowed the company to reduce its asset coverage requirement from **200% to 150%** following stockholder approval on October 30, 2018, enabling it to incur greater leverage[329](index=329&type=chunk) - Increased leverage may amplify financial risk and could result in higher base management fees, as the fee is calculated on gross assets, including borrowed funds[329](index=329&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=69&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the reporting period - None[332](index=332&type=chunk) [Defaults Upon Senior Securities](index=69&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults on senior securities occurred during the reporting period - None[333](index=333&type=chunk) [Mine Safety Disclosures](index=69&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - Not applicable[334](index=334&type=chunk) [Other Information](index=70&type=section&id=Item%205.%20Other%20Information) No other material information is reported for the period - None[335](index=335&type=chunk) [Exhibits](index=70&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed, including required CEO and CFO certifications - The exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906[337](index=337&type=chunk)