UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

(Mark One)

 

þQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2016

 

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)

 

Registrant’s telephone number, including area code (860) 676-8654

 

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 þ 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. See definition of “accelerated filer” and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer ¨   Accelerated filer þ   Non-accelerated filer ¨   Smaller Reporting Company ¨
        (Do not check if a smaller reporting company)    

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ .

 

As of November 1, 2016, the Registrant had 11,553,657 shares of common stock, $0.001 par value, outstanding.

 

 

 

 

 

 

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 September 30, 2016 and December 31, 2015 (unaudited)   3
  Consolidated Statements of Operations for the three and nine months ended September 30, 2016 and 2015 (unaudited)   4
  Consolidated Statements of Changes in Net Assets for the nine months ended September 30, 2016 and 2015 (unaudited)   5
  Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015 (unaudited)   6
  Consolidated Schedules of Investments as of September 30, 2016 and December 31, 2015 (unaudited)   7
  Notes to the Consolidated Financial Statements (unaudited)   19
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations   40
Item 3. Quantitative and Qualitative Disclosures About Market Risk   54
Item 4. Controls and Procedures   54
       
PART II
Item 1. Legal Proceedings   55
Item 1A.   Risk Factors   55
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   55
Item 3. Defaults Upon Senior Securities   55
Item 4. Mine Safety Disclosures   55
Item 5. Other Information   55
Item 6. Exhibits   56
  Signatures   57
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)

 

  

September 30,

2016

  

December 31,

2015

 
         
Assets          
Non-affiliate investments at fair value (cost of $228,156 and $255,494, respectively) (Note 4)  $208,177   $250,267 
Investments in money market funds   —    285 
Cash   26,170    20,765 
Restricted investments in money market funds   —    1,091 
Interest receivable   7,781    6,258 
Other assets   2,017    2,230 
Total assets  $244,145   $280,896 
           
Liabilities          
Borrowings (Note 6)  $95,550   $114,954 
Distributions payable   3,985    3,980 
Base management fee payable (Note 3)   363    385 
Incentive fee payable (Note 3)   —    1,028 
Other accrued expenses   578    798 
Total liabilities   100,476    121,145 
           
Commitments and Contingencies (Note 7)          
           
Net assets          
Preferred stock, par value $0.001 per share, 1,000,000 shares authorized, zero shares issued and outstanding as of September 30, 2016 and December 31, 2015   —    — 
Common stock, par value $0.001 per share, 100,000,000 shares authorized, 11,666,642 and 11,648,594 shares issued and 11,551,941 and 11,535,212 shares outstanding as of September 30, 2016 and December 31, 2015, respectively    12    12 
Paid-in capital in excess of par   179,902    179,707 
Distributions in excess of net investment income   (674)   (2,006)
Net unrealized depreciation on investments   (19,979)   (5,227)
Net realized loss on investments   (15,592)   (12,735)
Total net assets   143,669    159,751 
Total liabilities and net assets  $244,145   $280,896 
Net asset value per common share  $12.44   $13.85 

 

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 Nine Months Ended 
   September 30,   September 30, 
   2016   2015   2016   2015 
Investment income                    
Interest income on non-affiliate investments  $6,819   $7,705   $24,610   $20,865 
Fee income on non-affiliate investments   789    722    1,387    1,684 
Total investment income   7,608    8,427    25,997    22,549 
Expenses                    
Interest expense   1,420    1,441    4,466    4,291 
Base management fee (Note 3)   1,135    1,279    3,666    3,456 
Performance based incentive fee (Note 3)   —    1,015    2,126    2,473 
Administrative fee (Note 3)   197    300    753    877 
Professional fees   315    273    1,159    991 
General and administrative   218    218    681    776 
Total expenses   3,285    4,526    12,851    12,864 
Management and performance based incentive fees waived (Note 3)   —    (140)   —    (207)
Net expenses   3,285    4,386    12,851    12,657 
Net investment income before excise tax   4,323    4,041    13,146    9,892 
Credit for excise tax   (52)   (20)   (138)   — 
Net investment income   4,375    4,061    13,284    9,892 
Net realized and unrealized loss on investments                    
Net realized gain (loss) on investments   5    (1,463)   (2,857)   (1,723)
Net unrealized (depreciation) appreciation on investments   (10,023)   940    (14,752)   958 
Net realized and unrealized loss on investments   (10,018)   (523)   (17,609)   (765)
Net (decrease) increase in net assets resulting from operations  $(5,643)  $3,538   $(4,325)  $9,127 
Net investment income per common share  $0.38   $0.35   $1.15   $0.90 
Net (decrease) increase in net assets per common share  $(0.49)  $0.30   $(0.37)  $0.83 
Distributions declared per share  $0.345   $0.345   $1.035   $1.035 
Weighted average shares outstanding   11,549,508    11,638,925    11,543,995    11,032,992 

 

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, 2014   9,628,124   $10   $155,240   $(1,102)  $(4,737)  $(11,163)  $138,248 
Issuance of common stock, net of offering costs   2,000,000    2    26,504    —    —    —    26,506 
Net increase in net assets resulting from operations   —    —    —    9,892    958    (1,723)   9,127 
Issuance of common stock under dividend reinvestment plan   14,398    —    181    —    —    —    181 
Distributions declared   —    —    —    (11,815)   —    —    (11,815)
Reclassification of permanent tax differences (Note 2)   —    —    (971)   893    —    78    — 
Balance at September 30, 2015   11,642,522   $12   $180,954   $(2,132)  $(3,779)  $(12,808)  $162,247 
                                    
Balance at December 31, 2015   11,535,212   $12   $179,707   $(2,006)  $(5,227)  $(12,735)  $159,751 
Net decrease in net assets resulting from operations   —    —    —    13,284    (14,752)   (2,857)   (4,325)
Issuance of common stock under dividend reinvestment plan   18,048    —    211    —    —    —    211 
Repurchases of common stock   (1,319)   —    (16)   —    —    —    (16)
Distributions declared   —    —    —    (11,952)   —    —    (11,952)
Balance at September 30, 2016   11,551,941   $12   $179,902   $(674)  $(19,979)  $(15,592)  $143,669 

 

See Notes to Consolidated Financial Statements

 

 5 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands)

 

   For the Nine Months Ended 
   September 30, 
   2016   2015 
Cash flows from operating activities:          
Net (decrease) increase in net assets resulting from operations  $(4,325)  $9,127 
Adjustments to reconcile net (decrease) increase in net assets resulting from operations to net cash provided by (used in) operating activities:          
Amortization of debt issuance costs   434    733 
Net realized loss on investments   2,857    1,723 
Net unrealized depreciation (appreciation) on investments   14,752    (958)
Purchase of investments   (45,223)   (104,781)
Principal payments received on investments   69,266    58,593 
Proceeds from sale of investments   939    1,078 
Changes in assets and liabilities:          
Net decrease (increase) in investments in money market funds   285    (248)
Net decrease in restricted investments in money market funds   1,091    1,458 
Increase in interest receivable   (1,749)   (399)
Decrease (increase) in end-of-term payments   200    (827)
Decrease in unearned income   (476)   (56)
Decrease in other assets   143    773 
Decrease in other accrued expenses   (220)   (15)
(Decrease) increase in base management fee payable   (22)   29 
(Decrease) increase in incentive fee payable   (1,028)   216 
Net cash provided by (used in) operating activities   36,924    (33,554)
Cash flows from financing activities:          
Proceeds from issuance of common stock, net of offering costs   —    26,506 
Repayment of Asset-Backed Notes   (14,546)   (19,451)
Advances on credit facility   10,000    42,000 
Repayment of credit facility   (15,000)   — 
Distributions paid   (11,736)   (10,939)
Repurchase of common stock   (16)   — 
Debt issuance costs   (221)   (420)
Net cash (used in) provided by financing activities   (31,519)   37,696 
Net increase in cash   5,405    4,142 
Cash:          
Beginning of period   20,765    8,417 
End of period  $26,170   $12,559 
Supplemental disclosure of cash flow information:          
Cash paid for interest  $4,051   $3,474 
Supplemental non-cash investing and financing activities:          
Warrant investments received and recorded as unearned income  $446   $778 
Distributions payable  $3,985   $4,017 
End-of-term payments receivable  $4,859   $4,611 
Receivable resulting from sale of investment  $—   $499 

 

See Notes to Consolidated Financial Statements

  

 6 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

September 30, 2016

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)  Sector  Type of Investment (3)(4)(7)(9)(10)  Amount   Investments (6)   Value 
Debt Investments — 140.0% (8)            
Debt Investments — Life Science — 30.5% (8)               
Argos Therapeutics, Inc. (2)(5)  Biotechnology  Term Loan (9.27% cash (Libor + 8.75%; Floor 9.25%;  $5,000   $4,959   $4,959 
      Ceiling 10.75%), 5.00% ETP, Due 10/1/18)               
      Term Loan (9.27% cash (Libor + 8.75%; Floor 9.25%;   5,000    4,965    4,965 
      Ceiling 10.75%), 5.00% ETP, Due 3/1/19)               
New Haven Pharmaceuticals, Inc. (11)  Biotechnology  Term Loan (11.52% cash (Libor + 11.00%; Floor   1,282    1,275    675 
      11.50%), 11.42% ETP, Due 3/1/19)               
      Term Loan (11.52% cash (Libor + 11.00%; Floor   427    424    225 
      11.50%), 11.42% ETP, Due 3/1/19)               
      Term Loan (10.52% cash (Libor + 10.00%; Floor   1,973    1,961    1,040 
      10.50%), 6.10% ETP, Due 3/1/19)               
      Term Loan (10.02% cash (Libor + 9.50%; Floor   6,185    6,118    3,243 
      10.00%), 4.00% ETP, Due 4/1/19)               
      Term Loan (10.04% cash (Libor + 9.50%; Floor   409    409    217 
      10.00%), Due 10/31/16)               
Palatin Technologies, Inc. (2)(5)  Biotechnology  Term Loan (9.02% cash (Libor + 8.50%; Floor   4,500    4,455    4,455 
      9.00%), 5.00% ETP, Due 1/1/19)               
      Term Loan (9.02% cash (Libor + 8.50%; Floor   5,000    4,951    4,951 
      9.00%), 5.00% ETP, Due 8/1/19)               
Sample6, Inc. (2)  Biotechnology  Term Loan (9.52% cash (Libor + 9.00%; Floor   1,166    1,163    1,163 
      9.50%; Ceiling 11.00%), 4.00% ETP, Due 4/1/18)               
      Term Loan (9.52% cash (Libor + 9.00%; Floor   709    705    705 
      9.50%; Ceiling 11.00%), 4.00% ETP, Due 4/1/18)               
      Term Loan (9.52% cash (Libor + 9.00%; Floor   2,500    2,487    2,487 
      9.50%; Ceiling 11.00%), 4.00% ETP, Due 4/1/18)               
Lantos Technologies, Inc. (2)  Medical Device  Term Loan (11.50% cash (Libor + 10.50%; Floor   2,479    2,450    2,414 
      11.50%), 5.00% ETP, Due 2/1/18)               
Mederi Therapeutics, Inc. (2)  Medical Device  Term Loan (12.34% cash (Libor + 11.82%), 4.00% ETP,   1,742    1,729    1,729 
      Due 7/1/17)               
      Term Loan (12.34% cash (Libor + 11.82%), 4.00% ETP,   1,742    1,729    1,729 
      Due 7/1/17)               
NinePoint Medical, Inc. (2)  Medical Device  Term Loan (9.27% cash (Libor + 8.75%; Floor   5,000    4,957    4,957 
      9.25%), 4.50% ETP, Due 3/1/19)               
      Term Loan (9.27% cash (Libor + 8.75%; Floor   2,500    2,473    2,473 
      9.25%), 4.50% ETP, Due 3/1/19)               
Tryton Medical, Inc. (2)  Medical Device  Term Loan (10.66% cash (Prime + 7.16%), 2.50% ETP,   1,500    1,491    1,491 
      Due 3/1/17)               
Total Debt Investments — Life Science              48,701    43,878 
Debt Investments — Technology — 83.9% (8)               
Ekahau, Inc. (2)  Communications  Term Loan (11.75% cash, 2.50% ETP, Due 2/1/17)   226    226    226 
      Term Loan (11.75% cash, 2.50% ETP, Due 2/1/17)   75    75    75 
Additech, Inc. (2)  Consumer-related Technologies  Term Loan (11.77% cash (Libor + 11.25%; Floor   1,833    1,813    1,813 
      11.75%; Ceiling 13.25%), 4.00% ETP, Due 7/1/18)               
      Term Loan (11.77% cash (Libor + 11.25%; Floor   2,333    2,306    2,306 
      11.75%; Ceiling 13.25%), 4.00% ETP, Due 1/1/19)               
Gwynnie Bee, Inc. (2)  Consumer-related Technologies  Term Loan (11.02% cash (Libor + 10.50%; Floor   867    854    854 
      11.00%; Ceiling 12.50%), 2.00% ETP, Due 11/1/17)               
      Term Loan (11.02% cash (Libor + 10.50%; Floor   533    522    522 
      11.00%; Ceiling 12.50%), 2.00% ETP, Due 2/1/18)               
      Term Loan (11.02% cash (Libor + 10.50%; Floor   600    591    591 
      11.00%; Ceiling 12.50%), 2.00% ETP, Due 4/1/18)               
Le Tote, Inc. (2)  Consumer-related Technologies  Term Loan (10.17% cash (Libor + 9.65%; Floor   4,000    3,936    3,936 
      10.15%), 5.00% ETP, Due 3/1/20)               
      Term Loan (10.19% cash (Libor + 9.65%; Floor   3,000    2,951    2,951 
      10.15%), 5.00% ETP, Due 3/1/20)               
Rhapsody International, Inc. (2)  Consumer-related Technologies  Term Loan (11.02% cash (Libor + 10.50%; Floor   7,500    7,321    7,321 
      11.00%), 3.00% ETP, Due 10/1/19)               
SavingStar, Inc. (2)  Consumer-related Technologies  Term Loan (10.92% cash (Libor + 10.40%; Floor   3,000    2,956    2,956 
      10.90%), 3.00% ETP, Due 6/1/19)               
      Term Loan (10.92% cash (Libor + 10.40%; Floor   2,000    1,963    1,963 
      10.90%), 3.00% ETP, Due 3/1/20)               
MediaBrix, Inc. (2)  Internet and Media  Term Loan (11.52% cash (Libor + 11.00%; Floor   4,000    3,963    3,963 
      11.50%), 3.00% ETP, Due 1/1/20)               

 

See Notes to Consolidated Financial Statements

 

 7 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

September 30, 2016

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)  Sector  Type of Investment (3)(4)(7)(9)(10)  Amount   Investments (6)   Value 
Zinio Holdings, LLC (2)  Internet and Media  Term Loan (11.77% cash (Libor + 11.25%; Floor   4,000    3,964    3,964 
      11.75%), 4.00% ETP, Due 2/1/20)               
The NanoSteel Company, Inc. (2)  Materials  Term Loan (10.02% cash (Libor + 9.50%; Floor   5,000    4,934    4,934 
      10.00%), 5.00% ETP, Due 7/1/19)               
      Term Loan (10.02% cash (Libor + 9.50%; Floor   2,500    2,467    2,467 
      10.00%), 5.00% ETP, Due 7/1/19)               
      Term Loan (10.02% cash (Libor + 9.50%; Floor   2,500    2,460    2,460 
      10.00%), 5.00% ETP, Due 1/1/20)               
Nanocomp Technologies, Inc. (2)  Networking  Term Loan (11.50% cash, 3.00% ETP, Due 11/1/17)   432    429    429 
      Term Loan (11.52% cash (Libor + 11.00%; Floor   3,000    2,948    2,948 
      11.50%), 3.00% ETP, Due 4/1/20)               
Powerhouse Dynamics, Inc. (2)  Power Management  Term Loan (11.22% cash (Libor + 10.70%; Floor   2,500    2,466    2,466 
      11.20%), 3.00% ETP, Due 3/1/19)               
Avalanche Technology, Inc. (2)  Semiconductors  Term Loan (10.00% cash (Libor + 9.25%; Floor 10.00%;   730    729    729 
      Ceiling 11.75%), 2.40% ETP, Due 4/1/17)               
      Term Loan (10.00% cash (Libor + 9.25%; Floor 10.00%;   1,518    1,513    1,513 
      Ceiling 11.75%), 2.40% ETP, Due 10/1/18)               
      Term Loan (10.00% cash (Libor + 9.25%; Floor 10.00%;   1,726    1,692    1,692 
      Ceiling 11.75%), 2.00% ETP, Due 2/1/19)               
InVisage Technologies, Inc. (2)  Semiconductors  Term Loan (12.02% cash (Libor + 11.50%; Floor   1,955    1,934    1,934 
      12.00%; Ceiling 14.00%), 4.71% ETP, Due 12/31/16)               
      Term Loan (12.02% cash (Libor + 11.50%; Floor   822    816    816 
      12.00%; Ceiling 14.00%), 4.71% ETP, Due 12/31/16)               
Luxtera, Inc. (2)  Semiconductors  Term Loan (10.27% cash (Libor + 9.75%; Floor 10.25%;   877    866    866 
      Ceiling 12.25%), 13.00% ETP, Due 7/1/17)               
      Term Loan (10.27% cash (Libor + 9.75%; Floor 10.25%;   490    488    488 
      Ceiling 12.25%), 13.00% ETP, Due 7/1/17)               
      Term Loan (9.02% cash (Libor + 8.50%; Floor 9.00%),   750    746    746 
      4.50% ETP, Due 12/1/18)               
      Term Loan (9.02% cash (Libor + 8.50%; Floor 9.00%),   750    745    745 
      4.50% ETP, Due 12/1/18)               
      Term Loan (9.52% cash (Libor + 9.00%; Floor 9.50%),   2,000    1,990    1,990 
      4.50% ETP, Due 11/1/19)               
Xtera Communications, Inc. (5)(11)   Semiconductors  Term Loan (12.50% cash, 22.92% ETP, Due 10/1/16)   3,024    3,015    2,207 
      Term Loan (12.50% cash, 22.92% ETP, Due 10/1/16)   840    838    614 
Bridge2 Solutions, Inc.  Software  Term Loan (11.52% cash (Libor + 11.00%; Floor   4,000    3,973    3,973 
      11.50%; Ceiling 14.50%), 2.00% ETP, Due 7/1/19)               
      Term Loan (11.52% cash (Libor + 11.00%; Floor   1,000    996    996 
      11.50%; Ceiling 14.50%), 2.00% ETP, Due 1/1/20)               
ControlScan, Inc. (2)  Software  Term Loan (10.77% cash (Libor + 10.25%),   4,500    4,409    4,409 
      3.00% ETP, Due 7/1/20)               
Crowdstar, Inc. (2)  Software  Term Loan (10.77% cash (Libor + 10.25%; Floor   1,394    1,376    1,376 
      10.75%), 3.00% ETP, Due 9/1/18)               
Decisyon, Inc.  Software  Term Loan (12.83% cash (Libor + 12.308%; Floor   1,523    1,521    1,500 
      12.50%), 6.50% ETP, Due 6/1/18)               
      Term Loan (12.83% cash (Libor + 12.308%; Floor   833    714    704 
      12.50%), 6.50% ETP, Due 6/1/18)               
Digital Signal Corporation  Software  Term Loan (10.77% cash (Libor + 10.25%; Floor   1,500    1,466    1,246 
      10.43%), 5.00% ETP, Due 7/1/19)               
      Term Loan (10.77% cash (Libor + 10.25%; Floor   1,500    1,466    1,246 
      10.43%), 5.00% ETP, Due 7/1/19)               
Education Elements, Inc. (2)  Software  Term Loan (10.52% cash (Libor + 10.00%; Floor   1,800    1,776    1,776 
      10.50%), 4.00% ETP, Due 1/1/19)               
      Term Loan (10.52% cash (Libor + 10.00%; Floor   1,500    1,477    1,477 
      10.50%), 4.00% ETP, Due 8/1/19)               
Netuitive, Inc.  Software  Term Loan (12.77% cash (Libor + 12.25%; Floor   564    563    563 
      12.50%), 3.33% ETP, Due 9/1/17)               
Nomi Corporation (11)  Software  Term Loan (10.67% cash (Libor + 10.15%; Floor   2,489    2,454    150 
      10.35%), 2.00% ETP, Due 1/1/20)               
      Term Loan (10.67% cash (Libor + 10.15%; Floor   2,489    2,454    150 
      10.35%), 2.00% ETP, Due 1/1/20)               

 

See Notes to Consolidated Financial Statements

 

 8 

 

  

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

September 30, 2016

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)  Sector  Type of Investment (3)(4)(7)(9)(10)  Amount   Investments (6)   Value 
ScoreBig, Inc. (2)(11)  Software  Term Loan (10.52% cash (Libor + 10.00%; Floor   3,403    3,332    1,330 
      10.50%), 4.00% ETP, Due 4/1/19)               
      Term Loan (10.52% cash (Libor + 10.00%; Floor   3,403    3,360    1,341 
      10.50%), 4.00% ETP, Due 4/1/19)               
      Term Loan (10.52% cash (Libor + 10.00%; Floor   2,000    1,950    778 
      10.50%), 4.00% ETP, Due 3/1/20)               
      Term Loan (10.54% cash (Libor + 10.00%; Floor   127    127    51 
      10.50%), 4.00% ETP, Due 10/31/16)               
ShopKeep.com, Inc. (2)  Software  Term Loan (10.47% cash (Libor + 9.95%; Floor   6,000    5,802    5,802 
      10.45%), 3.00% ETP, Due 4/1/20)               
SIGNiX, Inc.  Software  Term Loan (11.52% cash (Libor + 11.00%; Floor   2,500    2,356    2,349 
      11.50%), Due 10/1/18)               
SilkRoad Technology, Inc. (2)  Software  Term Loan (10.87% cash (Libor + 10.35%; Floor   7,500    7,450    7,450 
      10.85%; Ceiling 12.85%), 3.00% ETP, Due 6/1/19)               
Skyword, Inc.  Software  Term Loan (11.47% cash (Libor + 10.95%; Floor   4,000    3,939    3,849 
      11.45%), 3.00% ETP, Due 8/1/19)               
Social Intelligence Corp. (2)  Software  Term Loan (11.02% cash (Libor + 10.50%; Floor   404    394    394 
      11.00%; Ceiling 13.00%), 3.50% ETP, Due 12/1/17)               
Sys-Tech Solutions, Inc. (2)  Software  Term Loan (11.67% cash (Libor + 11.15%; Floor   3,600    3,579    3,579 
      11.65%; Ceiling 12.65%), 4.50% ETP, Due 3/1/18)               
      Term Loan (11.67% cash (Libor + 11.15%; Floor   3,333    3,311    3,311 
      11.65%; Ceiling 12.65%), 9.00% ETP, Due 5/1/18)               
VBrick Systems, Inc. (2)  Software  Term Loan (11.52% cash (Libor + 11.00%; Floor   1,000    994    994 
      11.50%; Ceiling 13.50%), 5.00% ETP, Due 7/1/17)               
Vidsys, Inc. (2)  Software  Term Loan (13.00% cash, 12.58% ETP, Due 12/1/17)   2,610    2,610    2,610 
xTech Holdings, Inc. (2)  Software  Term Loan (11.02% cash (Libor + 10.50%; Floor   1,667    1,643    1,643 
      11.00%), 3.00% ETP, Due 4/1/19)               
      Term Loan (11.02% cash (Libor + 10.50%; Floor   2,000    1,968    1,968 
      11.00%), 3.00% ETP, Due 3/1/20)               
Total Debt Investments — Technology               131,977    120,500 
Debt Investments — Cleantech — 5.9% (8)            
Rypos, Inc. (2)  Energy Efficiency  Term Loan (12.07% cash (Libor + 11.55%;   1,740    1,728    1,728 
      Floor 11.80%), 4.25% ETP, Due 6/1/17)               
      Term Loan (12.07% cash (Libor + 11.55%;   777    768    768 
      Floor 11.80%), 4.25% ETP, Due 1/1/18)               
Lehigh Technologies, Inc. (2)  Waste Recycling  Term Loan (10.24% cash (Libor + 9.72%), 6.75% ETP,   3,000    2,980    2,980 
      Due 8/1/19)               
      Term Loan (10.24% cash (Libor + 9.72%), 6.75% ETP,   3,000    2,980    2,980 
      Due 8/1/19)               
Total Debt Investments — Cleantech              8,456    8,456 
Debt Investments — Healthcare information and services — 19.7% (8)            
Interleukin Genetics, Inc. (2)(5)  Diagnostics  Term Loan (11.02% cash (Libor + 10.50%;   4,335    4,171    4,171 
      Floor 11.00%), 6.50% ETP, Due 10/1/18)               
Watermark Medical, Inc. (2)  Other Healthcare  Term Loan (10.02% cash (Libor + 9.50%; Floor 10.00%;   2,771    2,767    2,767 
      Ceiling 11.00%); 4.00% ETP, Due 4/1/18)               
      Term Loan (10.02% cash (Libor + 9.50%; Floor 10.00%;   2,771    2,767    2,767 
      Ceiling 11.00%); 4.00% ETP, Due 4/1/18)               
      Term Loan (10.02% cash (Libor + 9.50%; Floor 10.00%;   1,250    1,248    1,248 
      Ceiling 11.00%); 4.00% ETP, Due 4/1/18)               
MedAvante, Inc. (2)  Software  Term Loan (9.77% cash (Libor + 9.25%; Floor   3,000    2,968    2,968 
      9.75%), 4.00% ETP, Due 1/1/19)               
      Term Loan (9.77% cash (Libor + 9.25%; Floor   3,000    2,968    2,968 
      9.75%), 4.00% ETP, Due 1/1/19)               
      Term Loan (9.77% cash (Libor + 9.25%; Floor   4,000    3,948    3,948 
      9.75%), 4.00% ETP, Due 7/1/19)               
Medsphere Systems Corporation (2)  Software  Term Loan (10.52% cash (Libor + 10.00%; Floor   5,000    4,938    4,938 
      10.50%), 7.00% ETP, Due 7/1/19)               
      Term Loan (10.52% cash (Libor + 10.00%; Floor   2,500    2,469    2,469 
      10.50%), 7.00% ETP, Due 7/1/19)               
Total Debt Investments — Healthcare information and services              28,244    28,244 
Total Debt Investments     217,378    201,078 

 

See Notes to Consolidated Financial Statements  

 

 9 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

September 30, 2016

(Dollars in thousands)

 

 

                 Cost of   Fair 
Portfolio Company (1)  Sector  Type of Investment (3)(4)(7)(9)(10)      Investments (6)   Value 
Warrant Investments — 4.0% (8)       
Warrants — Life Science — 0.3% (8)       
ACT Biotech Corporation  Biotechnology  1,521,820 Preferred Stock Warrants           83    — 
Argos Therapeutics, Inc. (2)(5)  Biotechnology  33,112 Common Stock Warrants           33    1 
Celsion Corporation (5)  Biotechnology  5,708 Common Stock Warrants           15    — 
Inotek Pharmaceuticals Corporation (5)  Biotechnology  28,204 Common Stock Warrants           17    96 
New Haven Pharmaceuticals, Inc.  Biotechnology  103,982 Preferred Stock Warrants           88    — 
Nivalis Therapeutics, Inc. (5)  Biotechnology  18,534 Common Stock Warrants           122    — 
Ocera Therapeutics, Inc. (2)(5)  Biotechnology  6,491 Common Stock Warrants           6    — 
Palatin Technologies, Inc. (2)(5)  Biotechnology  608,058 Common Stock Warrants           51    11 
Revance Therapeutics, Inc. (5)  Biotechnology  34,377 Common Stock Warrants           68    101 
Sample6, Inc. (2)  Biotechnology  494,018 Preferred Stock Warrants           45    13 
Sunesis Pharmaceuticals, Inc. (5)  Biotechnology  2,050 Common Stock Warrants           5    — 
AccuVein Inc. (2)  Medical Device  75,769 Preferred Stock Warrants           24    28 
Direct Flow Medical, Inc.  Medical Device  176,922 Preferred Stock Warrants           144    — 
EnteroMedics, Inc. (5)  Medical Device  9,402 Common Stock Warrants           347    — 
IntegenX, Inc. (2)  Medical Device  170,646 Preferred Stock Warrants           34    26 
Lantos Technologies, Inc. (2)  Medical Device  66,665,256 Preferred Stock Warrants           38    40 
Mederi Therapeutics, Inc. (2)  Medical Device  248,736 Preferred Stock Warrants           26    39 
Mitralign, Inc. (2)  Medical Device  641,909 Preferred Stock Warrants           52    36 
NinePoint Medical, Inc. (2)  Medical Device  566,038 Preferred Stock Warrants           33    33 
OraMetrix, Inc. (2)  Medical Device  812,348 Preferred Stock Warrants           78    — 
Tryton Medical, Inc. (2)  Medical Device  122,362 Preferred Stock Warrants           15    10 
ViOptix, Inc.  Medical Device  375,763 Preferred Stock Warrants           13    — 
Total Warrants — Life Science                 1,337    434 
Warrants — Technology — 2.7% (8)                  
Ekahau, Inc. (2)  Communications  978,261 Preferred Stock Warrants           33    20 
OpenPeak, Inc.  Communications  18,997 Common Stock Warrants           89    — 
Additech, Inc. (2)  Consumer-related Technologies  150,000 Preferred Stock Warrants           33    27 
Everyday Health, Inc. (5)  Consumer-related Technologies  43,783 Common Stock Warrants           69    7 
Gwynnie Bee, Inc. (2)  Consumer-related Technologies  268,591 Preferred Stock Warrants           68    691 
If(we), Inc.  Consumer-related Technologies  190,868 Preferred Stock Warrants           27    45 
Le Tote, Inc. (2)  Consumer-related Technologies  202,974 Preferred Stock Warrants           63    63 
Rhapsody International Inc. (2)  Consumer-related Technologies  852,273 Common Stock Warrants           164    132 
SavingStar, Inc. (2)  Consumer-related Technologies  98,860 Preferred Stock Warrants           59    58 
XIOtech, Inc.  Data Storage  2,217,979 Preferred Stock Warrants           22    — 
SimpleTuition, Inc.  Internet and media  189,573 Preferred Stock Warrants           63    37 
The NanoSteel Company, Inc. (2)  Materials  147,424 Preferred Stock Warrants           93    90 
IntelePeer, Inc.  Networking  141,549 Common Stock Warrants           39    26 
Nanocomp Technologies, Inc. (2)  Networking  681,819 Preferred Stock Warrants           54    49 
Aquion Energy, Inc.  Power Management  115,051 Preferred Stock Warrants           7    60 
Powerhouse Dynamics, Inc. (2)  Power Management  290,698 Preferred Stock Warrants           28    22 
Avalanche Technology, Inc. (2)  Semiconductors  202,602 Preferred Stock Warrants           101    41 
eASIC Corporation (2)  Semiconductors  40,445 Preferred Stock Warrants           25    27 
InVisage Technologies, Inc. (2)  Semiconductors  395,009 Preferred Stock Warrants           48    37 
Kaminario, Inc.  Semiconductors  1,087,203 Preferred Stock Warrants           59    62 
Luxtera, Inc.(2)  Semiconductors  2,508,671 Preferred Stock Warrants           49    195 
Soraa, Inc. (2)  Semiconductors  203,616 Preferred Stock Warrants           80    414 
Xtera Communications, Inc. (5)  Semiconductors  37,831 Common Stock Warrants           206    — 
Bolt Solutions Inc. (2)  Software  202,892 Preferred Stock Warrants           113    111 
Bridge2 Solutions, Inc.  Software  75,458 Common Stock Warrants           18    335 
Clarabridge, Inc.  Software  53,486 Preferred Stock Warrants           14    81 
ControlScan, Inc. (2)  Software  2,295,918 Preferred Stock Warrants           19    22 
Crowdstar, Inc. (2)  Software  75,428 Preferred Stock Warrants           14    11 
Decisyon, Inc.  Software  82,967 Common Stock Warrants           46    — 
Digital Signal Corporation  Software  113,744 Common Stock Warrants           32    — 
Education Elements, Inc. (2)  Software  238,122 Preferred Stock Warrants           28    23 
Lotame Solutions, Inc. (2)  Software  288,115 Preferred Stock Warrants           22    268 
Netuitive, Inc.  Software  41,569 Common Stock Warrants           48    — 
Nomi Corporation  Software  2,535,864 Preferred Stock Warrants           —    — 
Riv Data Corp. (2)  Software  237,361 Preferred Stock Warrants           12    10 
ScoreBig, Inc. (2)  Software  879,014 Preferred Stock Warrants           88    — 
ShopKeep.com, Inc. (2)  Software  165,779 Preferred Stock Warrants           98    98 
SIGNiX, Inc.  Software  89,767 Preferred Stock Warrants           168    166 

 

See Notes to Consolidated Financial Statements

 

 10 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

September 30, 2016

(Dollars in thousands)

 

                 Cost of   Fair 
Portfolio Company (1)  Sector  Type of Investment (3)(4)(7)(9)(10)      Investments (6)   Value 
Skyword, Inc.  Software  301,056 Preferred Stock Warrants           48    46 
SpringCM, Inc. (2)  Software  2,385,686 Preferred Stock Warrants           55    119 
Sys-Tech Solutions, Inc.  Software  375,000 Preferred Stock Warrants           241    374 
Vidsys, Inc.  Software  85,399 Preferred Stock Warrants           23    10 
Visage Mobile, Inc.  Software  1,692,047 Preferred Stock Warrants           19    — 
xTech Holdings, Inc. (2)  Software  158,730 Preferred Stock Warrants           43    43 
Total Warrants — Technology                 2,628    3,820 
Warrants — Cleantech — 0.1% (8)                  
Renmatix, Inc.  Alternative Energy  53,022 Preferred Stock Warrants           68    — 
Semprius, Inc.  Alternative Energy  519,981 Preferred Stock Warrants           25    20 
Rypos, Inc. (2)  Energy Efficiency  5,627 Preferred Stock Warrants           44    21 
Tigo Energy, Inc. (2)  Energy Efficiency  804,604 Preferred Stock Warrants           100    109 
Lehigh Technologies, Inc. (2)  Waste Recycling  272,727 Preferred Stock Warrants           33    33 
Total Warrants — Cleantech                 270    183 
Warrants — Healthcare information and services — 0.9% (8)                  
Accumetrics, Inc.  Diagnostics  100,928 Preferred Stock Warrants           107    63 
Candescent Health, Inc. (2)  Diagnostics  519,991 Preferred Stock Warrants           378    — 
Helomics Corporation  Diagnostics  13,461 Common Stock Warrants           73    — 
Interleukin Genetics, Inc. (2)(5)  Diagnostics  7,662,100 Common Stock Warrants           168    632 
LifePrint Group, Inc. (2)  Diagnostics  49,000 Preferred Stock Warrants           29    1 
ProterixBio, Inc. (2)  Diagnostics  3,156 Common Stock Warrants           54    — 
Singulex, Inc.  Other Healthcare  294,231 Preferred Stock Warrants           44    44 
Verity Solutions Group, Inc.  Other Healthcare  300,360 Preferred Stock Warrants           100    36 
Watermark Medical, Inc. (2)  Other Healthcare  27,373 Preferred Stock Warrants           74    62 
MedAvante, Inc. (2)  Software  114,285 Preferred Stock Warrants           66    65 
Medsphere Systems Corporation (2)  Software  7,097,791 Preferred Stock Warrants           60    196 
Recondo Technology, Inc. (2)  Software  556,796 Preferred Stock Warrants           95    194 
Total Warrants — Healthcare information and services             1,248    1,293 
Total Warrants                 5,483    5,730 
                         
Other Investments — 0.4% (8)                  
ZetrOZ, Inc.  Medical Device  Royalty Agreement           365    300 
Vette Technology, LLC  Data Storage  Royalty Agreement Due 4/18/2019           4,359    200 
Total Other Investments                 4,724    500 
Equity — 0.6% (8)                        
Insmed Incorporated (5)  Biotechnology  33,208 Common Stock           238    482 
Revance Therapeutics, Inc.(5)  Biotechnology  4,861 Common Stock           73    79 
Sunesis Pharmaceuticals, Inc. (5)  Biotechnology  78,493 Common Stock           83    57 
SnagAJob.com, Inc.  Consumer-related Technologies  82,974 Common Stock           9    83 
Decisyon, Inc.  Software  3,808,584 Common Stock           168    168 
Total Equity                 571    869 
Total Portfolio Investment Assets — 145.0% (8)          $228,156   $ 208, 177 

 

 

 

(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 investments are less than 5% ownership of the class and ownership of the portfolio company.

 

(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. All debt investments are at fixed rates for the term of the debt investment, unless otherwise indicated. Debt investments based on LIBOR are based on one-month LIBOR. For each debt investment, the current interest rate in effect as of September 30, 2016 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.

 

See Notes to Consolidated Financial Statements

 

 11 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

September 30, 2016

(Dollars in thousands)

 

(9)The Company did not have any non-qualifying assets under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”), as of September 30, 2016. Under 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 is on non-accrual status at September 30, 2016.

 

See Notes to Consolidated Financial Statements

 

 12 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

December 31, 2015

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)  Sector  Type of Investment (3)(4)(7)(9)(10)  Amount   Investments (6)   Value 
Debt Investments — 151.6 % (8)            
Debt Investments — Life Science — 36.6% (8)            
Argos Therapeutics, Inc. (2)(5)  Biotechnology  Term Loan (9.25% cash (Libor + 8.75%; Floor 9.25%;  $5,000   $4,944   $4,944 
      Ceiling 10.75%), 5.00% ETP, Due 10/1/18)               
      Term Loan (9.25% cash (Libor + 8.75%; Floor 9.25%;   5,000    4,954    4,954 
      Ceiling 10.75%), 5.00% ETP, Due 3/1/19)               
New Haven Pharmaceuticals, Inc. (2)  Biotechnology  Term Loan (11.50% cash (Libor + 11.00%; Floor   1,301    1,293    1,293 
      11.50%), 11.42% ETP, Due 3/1/19)               
      Term Loan (11.50% cash (Libor + 11.00%; Floor   434    431    431 
      11.50%), 11.42% ETP, Due 3/1/19)               
      Term Loan (10.50% cash (Libor + 10.00%; Floor   2,000    1,987    1,987 
      10.50%), 6.10% ETP, Due 3/1/19)               
      Term Loan (10.00% cash (Libor + 9.50%; Floor   6,265    6,190    6,190 
      10.00%), 4.00% ETP, Due 4/1/19)               
Palatin Technologies, Inc. (2)(5)  Biotechnology  Term Loan (9.00% cash (Libor + 8.50%; Floor   5,000    4,939    4,939 
      9.00%), 5.00% ETP, Due 1/1/19)               
      Term Loan (9.00% cash (Libor + 8.50%; Floor   5,000    4,937    4,937 
      9.00%), 5.00% ETP, Due 8/1/19)               
Sample6, Inc. (2)  Biotechnology  Term Loan (9.50% cash (Libor + 9.00%; Floor   1,555    1,550    1,550 
      9.50%; Ceiling 11.00%), 4.00% ETP, Due 4/1/18)               
      Term Loan (9.50% cash (Libor + 9.00%; Floor   945    940    940 
      9.50%; Ceiling 11.00%), 4.00% ETP, Due 4/1/18)               
      Term Loan (9.50% cash (Libor + 9.00%; Floor   2,500    2,481    2,481 
      9.50%; Ceiling 11.00%), 4.00% ETP, Due 4/1/18)               
Sunesis Pharmaceuticals, Inc. (2)(5)   Biotechnology  Term Loan (8.95% cash, 4.65% ETP, Due 10/1/16)   545    544    544 
      Term Loan (9.00% cash, 4.65% ETP, Due 10/1/16)   818    815    815 
IntegenX Inc. (2)  Medical Device  Term Loan (10.75% cash (Libor + 10.25%; Floor   3,750    3,703    3,703 
      10.75%; Ceiling 12.75%), 3.50% ETP, Due 7/1/18)               
Lantos Technologies, Inc. (2)  Medical Device  Term Loan (11.50% cash (Libor + 10.50%; Floor   3,500    3,454    3,333 
      11.50%), 5.00% ETP, Due 2/1/18)               
Mederi Therapeutics, Inc. (2)  Medical Device  Term Loan (12.06% cash (Libor + 11.82%), 4.00% ETP,   2,850    2,826    2,738 
      Due 7/1/17)               
      Term Loan (12.06% cash (Libor + 11.82%), 4.00% ETP,   2,850    2,826    2,738 
      Due 7/1/17)               
NinePoint Medical, Inc. (2)  Medical Device  Term Loan (9.25% cash (Libor + 8.75%; Floor   5,000    4,943    4,943 
      9.25%), 4.50% ETP, Due 3/1/19)               
      Term Loan (9.25% cash (Libor + 8.75%; Floor   2,500    2,464    2,464 
      9.25%), 4.50% ETP, Due 3/1/19)               
Tryton Medical, Inc. (2)  Medical Device  Term Loan (10.41% cash (Prime + 7.16%), 2.50% ETP,   2,063    2,053    2,053 
      Due 9/1/16)               
ZetrOZ, Inc. (2)(11)  Medical Device  Term Loan (11.00% cash (Libor + 10.50%; Floor   1,350    1,330    250 
      11.00%; Ceiling 12.50%), 3.00% ETP, Due 4/1/18)               
      Term Loan (11.00% cash (Libor + 10.50%; Floor   1,350    1,326    250 
      11.00%; Ceiling 12.50%), 3.00% ETP, Due 4/1/18)               
Total Debt Investments — Life Science              60,930    58,477 
Debt Investments — Technology — 80.5% (8)            
Ekahau, Inc. (2)  Communications  Term Loan (11.75% cash, 2.50% ETP, Due 2/1/17)   704    700    700 
      Term Loan (11.75% cash, 2.50% ETP, Due 2/1/17)   235    233    233 
mBlox, Inc. (2)  Communications  Term Loan (11.50% cash (Libor + 11.00%; Floor   5,000    4,977    4,977 
      11.50%; Ceiling 13.00%), 3.40% ETP, Due 7/1/18)               
      Term Loan (11.50% cash (Libor + 11.00%; Floor   5,000    4,977    4,977 
      11.50%; Ceiling 13.00%), 3.40% ETP, Due 7/1/18)               
      Term Loan (12.00% cash, 100.00% ETP, Due 7/1/16)   1,000    1,000    1,000 
      Term Loan (12.00% cash, 100.00% ETP, Due 7/1/16)   500    500    500 
Overture Networks, Inc. (2)  Communications  Term Loan (10.75% cash, (Libor + 10.25%; Floor   4,104    4,089    4,089 
      10.75%), 5.75% ETP, Due 12/1/17)               
      Term Loan (10.75% cash (Libor + 10.25%; Floor   2,052    2,043    2,043 
      10.75%), 5.75% ETP, Due 12/1/17)               
      Term Loan (10.75% cash (Libor + 10.25%; Floor   1,000    992    992 
      10.75%), 5.00% ETP, Due 11/1/18)               
Additech, Inc. (2)  Consumer-related Technologies  Term Loan (11.75% cash (Libor + 11.25%; Floor   2,500    2,470    2,470 
      11.75%; Ceiling 13.25%), 4.00% ETP, Due 7/1/18)               
      Term Loan (11.75% cash (Libor + 11.25%; Floor   2,500    2,464    2,464 
      11.75%; Ceiling 13.25%), 4.00% ETP, Due 1/1/19)               

  

See Notes to Consolidated Financial Statements

 

 13 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

December 31, 2015

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)  Sector  Type of Investment (3)(4)(7)(9)(10)  Amount   Investments (6)   Value 
Gwynnie Bee, Inc. (2)  Consumer-related Technologies  Term Loan (11.00% cash (Libor + 10.50%; Floor   1,467    1,445    1,445 
      11.00%; Ceiling 12.50%), 2.00% ETP, Due 11/1/17)               
      Term Loan (11.00% cash (Libor + 10.50%; Floor   833    816    816 
      11.00%; Ceiling 12.50%), 2.00% ETP, Due 2/1/18)               
      Term Loan (11.00% cash (Libor + 10.50%; Floor   900    886    886 
      11.00%; Ceiling 12.50%), 2.00% ETP, Due 4/1/18)               
Rhapsody International, Inc. (2)  Consumer-related Technologies  Term Loan (11.00% cash (Libor + 10.50%; Floor   7,500    7,276    7,276 
      11.00%), 3.00% ETP, Due 10/1/19)               
SavingStar, Inc. (2)  Consumer-related Technologies  Term Loan (10.90% cash (Libor + 10.40%; Floor   3,000    2,911    2,911 
      10.90%), 3.00% ETP, Due 6/1/19)               
The NanoSteel Company, Inc. (2)  Materials  Term Loan (10.00% cash (Libor + 9.50%; Floor   5,000    4,915    4,915 
      10.00%), 5.00% ETP, Due 7/1/19)               
      Term Loan (10.00% cash (Libor + 9.50%; Floor   2,500    2,458    2,458 
      10.00%), 5.00% ETP, Due 7/1/19)               
      Term Loan (10.00% cash (Libor + 9.50%; Floor   2,500    2,452    2,452 
      10.00%), 5.00% ETP, Due 1/1/20)               
Nanocomp Technologies, Inc. (2)  Networking  Term Loan (11.50% cash, 3.00% ETP, Due 11/1/17)   701    693    693 
Powerhouse Dynamics, Inc. (2)  Power Management  Term Loan (11.20% cash (Libor + 10.70%; Floor   2,500    2,456    2,456 
      11.20%), 3.00% ETP, Due 3/1/19)               
Avalanche Technology, Inc. (2)  Semiconductors  Term Loan (10.00% cash (Libor + 9.25%; Floor 10.00%;   1,565    1,561    1,561 
      Ceiling 11.75%), 2.40% ETP, Due 4/1/17)               
      Term Loan (10.00% cash (Libor + 9.25%; Floor 10.00%;   2,003    1,997    1,997 
      Ceiling 11.75%), 2.40% ETP, Due 10/1/18)               
      Term Loan (10.00% cash (Libor + 9.25%; Floor 10.00%;   2,202    2,157    2,157 
      Ceiling 11.75%), 2.00% ETP, Due 2/1/19)               
InVisage Technologies, Inc. (2)  Semiconductors  Term Loan (12.00% cash (Libor + 11.50%; Floor   2,380    2,345    2,242 
      12.00%; Ceiling 14.00%), 2.00% ETP, Due 4/1/18)               
      Term Loan (12.00% cash (Libor + 11.50%; Floor   850    835    798 
      12.00%; Ceiling 14.00%), 2.00% ETP, Due 10/1/18)               
Luxtera, Inc. (2)  Semiconductors  Term Loan (10.25% cash (Libor + 9.75%; Floor 10.25%;   1,646    1,645    1,645 
      Ceiling 12.25%), 13.00% ETP, Due 7/1/17)               
      Term Loan (10.25% cash (Libor + 9.75%; Floor 10.25%;   951    926    926 
      Ceiling 12.25%), 13.00% ETP, Due 7/1/17)               
      Term Loan (9.00% cash (Libor + 8.50%; Floor 9.00%),   833    828    828 
      4.50% ETP, Due 12/1/18)               
      Term Loan (9.00% cash (Libor + 8.50%; Floor 9.00%),   833    827    827 
      4.50% ETP, Due 12/1/18)               
Xtera Communications, Inc. (2)(5)   Semiconductors  Term Loan (12.50% cash, 15.65% ETP, Due 12/31/16)   4,157    4,114    4,114 
      Term Loan (12.50% cash, 21.75% ETP, Due 12/31/16)   1,155    1,142    1,142 
Bridge2 Solutions, Inc.  Software  Term Loan (11.50% cash (Libor + 11.00%; Floor   4,000    3,966    3,966 
      11.50%; Ceiling 14.50%), 2.00% ETP, Due 7/1/19)               
      Term Loan (11.50% cash (Libor + 11.00%; Floor   1,000    995    995 
      11.50%; Ceiling 14.50%), 2.00% ETP, Due 1/1/20)               
Crowdstar, Inc. (2)  Software  Term Loan (10.75% cash (Libor + 10.25%; Floor   1,939    1,915    1,915 
      10.75%), 3.00% ETP, Due 9/1/18)               
Decisyon, Inc. (2)  Software  Term Loan (12.69% cash (Libor + 12.308%; Floor   1,603    1,599    1,514 
      12.50%), 6.50% ETP, Due 10/1/17)               
      Term Loan (12.69% cash (Libor + 12.308%; Floor   853    847    802 
      12.50%), 6.50% ETP, Due 1/1/18)               
Digital Signal Corporation  Software  Term Loan (10.54% cash (Libor + 10.25%; Floor   1,500    1,421    1,421 
      10.43%), 5.00% ETP, Due 7/1/19)               
      Term Loan (10.54% cash (Libor + 10.25%; Floor   1,500    1,457    1,457 
      10.43%), 5.00% ETP, Due 7/1/19)               
Education Elements, Inc. (2)  Software  Term Loan (10.50% cash (Libor + 10.00%; Floor   2,000    1,967    1,967 
      10.50%), 4.00% ETP, Due 1/1/19)               
      Term Loan (10.50% cash (Libor + 10.00%; Floor   1,500    1,470    1,470 
      10.50%), 4.00% ETP, Due 8/1/19)               
Netuitive, Inc. (2)  Software  Term Loan (12.75% cash, Due 7/1/16)   1,000    998    998 

 

See Notes to Consolidated Financial Statements

 

 14 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

December 31, 2015

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)  Sector  Type of Investment (3)(4)(7)(9)(10)  Amount   Investments (6)   Value 
ScoreBig, Inc. (2)  Software  Term Loan (10.50% cash (Libor + 10.00%; Floor   3,500    3,449    3,449 
      10.50%), 4.00% ETP, Due 4/1/19)               
      Term Loan (10.50% cash (Libor + 10.00%; Floor   3,500    3,449    3,449 
      10.50%), 4.00% ETP, Due 4/1/19)               
SIGNiX, Inc. (2)  Software  Term Loan (11.50% cash (Libor + 11.00%; Floor   3,000    2,953    2,953 
      11.50%), Due 7/1/18)               
SilkRoad Technology, Inc. (2)  Software  Term Loan (10.85% cash (Libor + 10.35%; Floor   7,500    7,436    7,436 
      10.85%; Ceiling 12.85%), 3.00% ETP, Due 6/1/19)               
Skyword, Inc.  Software  Term Loan (11.45% cash (Libor + 10.95%; Floor   4,000    3,900    3,900 
      11.45%), 3.00% ETP, Due 8/1/19)               
Social Intelligence Corp. (2)  Software  Term Loan (11.00% cash (Libor + 10.50%; Floor   1,091    1,076    1,067 
      11.00%; Ceiling 13.00%), 3.50% ETP, Due 12/1/17)               
SpringCM, Inc. (2)  Software  Term Loan (11.50% cash (Libor + 11.00%; Floor   4,500    4,450    4,450 
      11.50%; Ceiling 13.00%), 2.00% ETP, Due 1/1/18)               
Sys-Tech Solutions, Inc. (2)  Software  Term Loan (11.65% cash (Libor + 11.15%; Floor   5,200    5,168    5,168 
      11.65%; Ceiling 12.65%), 4.50% ETP, Due 3/1/18)               
      Term Loan (11.65% cash (Libor + 11.15%; Floor   4,667    4,633    4,633 
      11.65%; Ceiling 12.65%), 9.00% ETP, Due 5/1/18)               
VBrick Systems, Inc. (2)  Software  Term Loan (11.50% cash (Libor + 11.00%; Floor   1,900    1,887    1,887 
      11.50%; Ceiling 13.50%), 5.00% ETP, Due 7/1/17)               
Vidsys, Inc. (2)  Software  Term Loan (13.00% cash, 7.58% ETP, Due 12/1/17)   2,810    2,810    2,810 
xTech Holdings, Inc. (2)  Software  Term Loan (11.00% cash (Libor + 10.50%; Floor   2,000    1,957    1,957 
      11.00%), 3.00% ETP, Due 4/1/19)               
Total Debt Investments — Technology               128,933    128,654 
Debt Investments — Cleantech — 7.5% (8)            
Renmatix, Inc. (2)  Alternative Energy  Term Loan (10.25% cash, 3.00% ETP, Due 2/1/16)   173    173    173 
      Term Loan (10.25% cash, 3.00% ETP, Due 2/1/16)   173    173    173 
      Term Loan (10.25% cash, Due 10/1/16)   1,667    1,663    1,663 
Semprius, Inc. (2)  Alternative Energy  Term Loan (10.25% cash, 5.00% ETP, Due 6/1/16)   860    840    840 
Rypos, Inc. (2)  Energy Efficiency  Term Loan (11.80% cash, 4.25% ETP, Due 6/1/17)   2,430    2,314    2,314 
      Term Loan (11.80% cash, 4.25% ETP, Due 1/1/18)   947    913    913 
Lehigh Technologies, Inc. (2)  Waste Recycling  Term Loan (9.96% cash (Libor + 9.72%), 6.75% ETP,   3,000    2,961    2,961 
      Due 8/1/19)               
      Term Loan (9.96% cash (Libor + 9.72%), 6.75% ETP,   3,000    2,975    2,975 
      Due 8/1/19)               
Total Debt Investments — Cleantech              12,012    12,012 
Debt Investments — Healthcare information and services — 27.0% (8)            
Interleukin Genetics, Inc. (2)(5)  Diagnostics  Term Loan (9.00% cash (Libor + 8.50%; Floor 9.00%)   5,000    4,881    4,881 
      4.50% ETP, Due 10/1/18)               
LifePrint Group, Inc. (2)  Diagnostics  Term Loan (11.00% cash (Libor + 10.50%; Floor   2,400    2,366    2,366 
      11.00%; Ceiling 12.50%), 3.00% ETP, Due 1/1/18)               
Watermark Medical, Inc. (2)  Other Healthcare  Term Loan (10.00% cash (Libor + 9.50%; Floor 10.00%;   3,500    3,494    3,494 
      Ceiling 11.00%); 4.00% ETP, Due 4/1/18)               
      Term Loan (10.00% cash (Libor + 9.50%; Floor 10.00%;   3,500    3,494    3,494 
      Ceiling 11.00%); 4.00% ETP, Due 4/1/18)               
      Term Loan (10.00% cash (Libor + 9.50%; Floor 10.00%;   1,250    1,248    1,248 
      Ceiling 11.00%); 4.00% ETP, Due 4/1/18)               
Innovatient Solutions, Inc. (2)  Software  Term Loan (11.00% cash (Libor + 10.50%; Floor   1,000    977    977 
      11.00%, Ceiling 13.00%); 4.00% ETP, Due 7/1/18)               
MedAvante, Inc. (2)  Software  Term Loan (9.75% cash (Libor + 9.25%; Floor   3,000    2,957    2,957 
      9.75%), 4.00% ETP, Due 1/1/19)               
      Term Loan (9.75% cash (Libor + 9.25%; Floor   3,000    2,957    2,957 
      9.75%), 4.00% ETP, Due 1/1/19)               
      Term Loan (9.75% cash (Libor + 9.25%; Floor   4,000    3,934    3,934 
      9.75%), 4.00% ETP, Due 7/1/19)               
Medsphere Systems Corporation (2)  Software  Term Loan (10.50% cash (Libor + 10.00%; Floor   5,000    4,921    4,921 
      10.50%), 7.00% ETP, Due 7/1/19)               
      Term Loan (10.50% cash (Libor + 10.00%; Floor   2,500    2,461    2,461 
      10.50%), 7.00% ETP, Due 7/1/19)               

 

See Notes to Consolidated Financial Statements

 

 15 

 

 

Horizon Technology Finance Corporation and Subsidiaries

 

Consolidated Schedule of Investments (Unaudited)

December 31, 2015

(Dollars in thousands)

 

         Principal   Cost of   Fair 
Portfolio Company (1)  Sector  Type of Investment (3)(4)(7)(9)(10)  Amount   Investments (6)   Value 
Recondo Technology, Inc. (2)  Software  Term Loan (11.50% cash (Libor + 11.00%; Floor   1,384    1,380    1,380 
      11.50%), 6.60% ETP, Due 12/1/17)               
      Term Loan (11.00% cash (Libor + 10.50%; Floor   2,500    2,494    2,494 
      11.00%), 4.50% ETP, Due 12/1/17)               
      Term Loan (10.50% cash (Libor + 10.00%; Floor   2,500    2,495    2,495 
      10.50%), 2.75% ETP, Due 12/1/17)               
      Term Loan (10.50% cash (Libor + 10.00%; Floor   3,000    2,965    2,965 
      10.50%), 2.50% ETP, Due 1/1/19)               
Total Debt Investments — Healthcare information and services              43,024    43,024 
Total Debt Investments              244,899    242,167 
                      
Warrant Investments — 4.2% (8)            
Warrants — Life Science — 0.8% (8)            
ACT Biotech Corporation   Biotechnology  1,521,820 Preferred Stock Warrants        83    — 
Argos Therapeutics, Inc. (2)(5)  Biotechnology  33,112 Common Stock Warrants        33    — 
Celsion Corporation (5)  Biotechnology  5,708 Common Stock Warrants        15    — 
Inotek Pharmaceuticals Corporation (5)  Biotechnology  28,204 Preferred Stock Warrants        17    149 
New Haven Pharmaceuticals, Inc. (2)  Biotechnology  103,982 Preferred Stock Warrants        88    178 
Nivalis Therapeutics, Inc. (5)   Biotechnology  18,534 Common Stock Warrants        122    — 
Ocera Therapeutics, Inc. (2)(5)  Biotechnology  6,460 Common Stock Warrants        6    — 
Palatin Technologies, Inc. (2)(5)  Biotechnology  608,058 Common Stock Warrants        51    16 
Revance Therapeutics, Inc. (5)   Biotechnology  34,377 Common Stock Warrants