What changed in this filing

/stocks — the workspaceLOADING

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2022-03-01 compared with 2021-03-02 · 553 added, 611 removed, 1611 unchanged (42% of the section changed)

4 unchanged sentences

As of December 31, 2021 and 2020, 100% and 100%, respectively, of the outstanding principal amount of our debt investments bore interest at floating rates.

The initial commitments to lend to our portfolio companies are usually based on a floating LIBOR index or the Prime Rate as published in the Wall Street Journal.

The initial commitments to lend to our portfolio companies are usually based on the Prime Rate as published in the Wall Street Journal.

Based on our December 31, 2021 consolidated statement of assets and liabilities (without adjustment for potential changes in the credit market, credit quality, size and composition of assets on the consolidated statement of assets and liabilities or other business developments that could affect net income) and the base index rates at December 31, 2021, the following table shows the annual impact on the change in net assets resulting from operations of changes in interest rates, which assumes no changes in our investments and borrowings:

10 unchanged sentences

While our 2026 Notes and our Asset-Backed Notes bear interest at a fixed rate, our Credit Facilities have a floating interest rate provision.

The Key Facility is subject to a floor of 1.00% per annum, based on a LIBOR index which resets monthly and the NYL Facility is based on the three year USD mid-market swap rate plus a margin of between 3.55% and 5.15% with an interest rate floor, depending on the rating of such notes at the time of issuance.

The Key Facility is subject to an interest rate floor of 4.25% per annum, based on a prime rate index which resets monthly and the NYL Facility is based on the three year USD mid-market swap rate plus a margin of between 3.55% and 5.15% with an interest rate floor, depending on the rating of such notes at the time of issuance.

Any other credit facilities into which we enter in the future may have floating interest rate provisions.

2 unchanged sentences

While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in the benefits of lower interest rates with respect to the investments in our portfolio with fixed interest rates.

under the Commodity Exchange Act (the “CEA”) and related Commodity Futures Trading Commission (the “CFTC”) regulations.

Engaging in commodity interest transactions such as swap transactions or futures contracts for the Company may cause the Investment Adviser to fall within the definition of “commodity pool operator” under the Commodity Exchange Act (the “CEA”) and related Commodity Futures Trading Commission (the “CFTC”) regulations.

On January 31, 2020, the Investment Adviser claimed an exclusion from the definition of the term “commodity pool operator” under the CEA and the CFTC regulations in connection with its management of the Company and, therefore, is not subject to CFTC registration or regulation under the CEA as a commodity pool operator with respect to its management of the Company.

42 unchanged sentences

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our procedures included confirmation of investments owned as of December 31, 2020 and 2019, by correspondence with the custodian and/or brokers or the underlying investee.

Our procedures included confirmation of investments owned as of December 31, 2021 and 2020, by correspondence with the custodians and/or brokers or the underlying investee.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

8 unchanged sentences

Such investments include debt, warrant, equity and other investments in venture capital and private equity backed companies.

The valuation techniques used in estimating the fair value of these investments may vary based on the specific characteristics of the investments and require the use of certain significant unobservable inputs, such as the Company’s internally developed credit risk ratings, discounted expected future cash flows, hypothetical market

yields, multiple probability weighted expected cash flow scenarios, and portfolio company financial performance, among others.

flows, hypothetical market yields, multiple probability weighted expected cash flow scenarios and portfolio company financial performance, among others.

We identified the valuation of Level 3 investments as a critical audit matter due to the subjective nature of the judgments necessary for management to select valuation techniques and the use of significant unobservable inputs to estimate the fair value.

9 unchanged sentences

We have served as the Company's auditor since 2008.

New Haven, Connecticut

Hartford, Connecticut

March 1, 2022

16 unchanged sentences

Commitments and contingencies (Note 8)

Preferred stock, par value $0.001 per share, 1,000,000 shares authorized, zero shares issued and outstanding as of December 31, 2020 and 2019

Common stock, par value $0.001 per share, 100,000,000 shares authorized, 19,453,821 and 15,730,755 shares issued and 19,286,356 and 15,563,290 shares outstanding as of December 31, 2020 and 2019, respectively

Preferred stock, par value $0.001 per share, 1,000,000 shares authorized, zero shares issued and outstanding as of December 31, 2021 and December 31, 2020

Common stock, par value $0.001 per share, 100,000,000 shares authorized, 21,384,925 and 19,453,821 shares issued and 21,217,460 and 19,286,356 shares outstanding as of December 31, 2021 and December 31, 2020, respectively

Paid-in capital in excess of par

30 unchanged sentences

Net investment income before excise tax

Provision for excise tax (Note 8)

Provision for excise tax

Net investment income

Net realized and unrealized loss on investments

Net realized (loss) gain on non-affiliate investments

Net realized and unrealized loss

Net realized loss on non-affiliate investments

Net realized loss on non-controlled affiliate investments

Net realized loss on controlled affiliate investments

Net realized (loss) gain on investments

Net unrealized appreciation (depreciation) on non-affiliate investments

Net realized loss on investments

Net realized loss on extinguishment of debt

Net realized loss

Net unrealized appreciation on non-affiliate investments

Net unrealized (depreciation) appreciation on non-controlled affiliate investments

Net unrealized depreciation on controlled affiliate investments

Net unrealized appreciation (depreciation) on investments

Net realized and unrealized loss on investments

Net unrealized appreciation on investments

Net realized and unrealized loss

Net increase in net assets resulting from operations

10 unchanged sentences

Balance at December 31, 2018

Issuance of common stock, net of offering costs

Net increase in net assets resulting from operations, net of excise tax:

Net investment income, net of excise tax

Net realized gain on investments

Net unrealized depreciation on investments

Financing costs

Net realized loss on investments

Net unrealized appreciation on investments

Issuance of common stock under dividend reinvestment plan

15 unchanged sentences

Net realized loss on investments

Net realized loss on extinguishment of debt

Net unrealized appreciation on investments

12 unchanged sentences

Amortization of debt issuance costs

Net realized loss (gain) on investments

Net unrealized (appreciation) depreciation on investments

Net realized loss on investments

Net realized loss on extinguishment of debt

Net unrealized appreciation on investments

Purchase of investments

1 unchanged sentence

Proceeds from sale of investments

Investment in controlled affiliate investments

Investment in controlled affiliate investment

Distributions from controlled affiliate investment

3 unchanged sentences

Changes in assets and liabilities:

Decrease (increase) in interest receivable

(Increase) decrease in interest receivable

Increase in end-of-term payments

3 unchanged sentences

Increase in base management fee payable

(Decrease) increase in incentive fee payable

Increase (decrease) in incentive fee payable

Net cash used in operating activities

Cash flows from financing activities:

Proceeds from issuance of 2026 Notes

Repayment of 2022 Notes

Repayment of Asset-Backed Notes

Proceeds from issuance of common stock, net of offering costs

4 unchanged sentences

Distributions paid

Financing costs

Net cash provided by financing activities

Net increase in cash, cash equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash:

34 unchanged sentences

Floor 9.30%), 5.00% ETP, Due 3/1/24)

Celsion Corporation (2)(5)(12)

Avalo Therapeutics, Inc.

Biotechnology

Term Loan (9.63% cash (Libor + 7.63%;

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 3.0% ETP, Due 1/1/25)

Term Loan (9.63% cash (Libor + 7.63%;

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 3.0% ETP, Due 1/1/25)

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 3.0% ETP, Due 1/1/25)

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 3.0% ETP, Due 2/1/25)

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 3.0% ETP, Due 2/1/25)

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 3.0% ETP, Due 4/1/25)

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 3.0% ETP, Due 4/1/25)

Emalex Biosciences, Inc.

4 unchanged sentences

Floor 9.75%), 5.00% ETP, Due 6/1/24)

Term Loan (9.75% cash (Libor + 7.90%;

Floor 9.75%), 5.00% ETP, Due 11/1/25)

F-Star Therapeutics, Inc.

Biotechnology

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 4.00% ETP, Due 4/1/25)

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 4.00% ETP, Due 7/1/25)

Greenlight Biosciences, Inc.

Biotechnology

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 4.00% ETP, Due 7/1/25)

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 4.00% ETP, Due 7/1/25)

Biotechnology

Term Loan (9.00% cash (Prime + 6.25%;

Floor 9.00%), 5.00% ETP, Due 7/1/25)

Term Loan (9.00% cash (Prime + 6.25%;

Floor 9.00%), 5.00% ETP, Due 7/1/25)

LogicBio, Inc.(2)(5)(12)

8 unchanged sentences

Floor 9.50%), 5.50% ETP, Due 12/1/24)

Bardy Diagnostics, Inc.

Medical Device

Term Loan (9.50% cash (Libor + 8.50%;

6 unchanged sentences

Floor 9.50%), 5.50% ETP, Due 12/1/24)

Term Loan (8.90% cash (Libor + 7.00%;

Floor 8.90%), 5.00% ETP, Due 9/1/24)

Term Loan (8.90% cash (Libor + 7.00%;

Stealth Biotherapeutics Inc.

Biotechnology

Term Loan (8.75% cash (Prime + 5.50%;

Floor 8.75%), 6.0% ETP, Due 10/1/25)

Term Loan (8.90% cash (Libor + 7.00%;

Term Loan (8.75% cash (Prime + 5.50%;

Floor 8.75%), 6.0% ETP, Due 10/1/25)

9 unchanged sentences

Floor 8.25%), 5.50% ETP, Due 10/1/24)

Term Loan (8.25% cash (Libor + 6.70%;

Floor 8.25%), 5.50% ETP, Due 10/1/24)

Term Loan (8.25% cash (Libor + 6.70%;

Floor 8.25%), 5.50% ETP, Due 10/1/24)

Conventus Orthopaedics, Inc.

4 unchanged sentences

Floor 9.25%), 10.36% ETP, Due 7/1/25)

See Notes to Consolidated Financial Statements

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments

December 31, 2021

(In thousands)

Portfolio Company (1)(3)

Type of Investment (4)(7)(9)(10)

Investments (6)

Corinth Medtech, Inc.

13 unchanged sentences

Medical Device

Term Loan (10.00% cash (Libor + 7.80%;

Floor 10.00%), 3.50% ETP, Due 10/1/24)

Term Loan (10.00% cash (Libor + 7.80%;

Term Loan (9.75% cash (Prime + 6.50%;

Floor 9.75%), 28.00% ETP, Due 8/1/26)

Term Loan (10.00% cash (Libor + 7.80%;

InfoBionic, Inc.

Medical Device

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 4.00% ETP, Due 10/1/24)

Term Loan (10.00% cash (Libor + 7.80%;

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 4.00% ETP, Due 6/1/25)

See Notes to Consolidated Financial Statements

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments

December 31, 2020

(In thousands)

Portfolio Company (1)(3)

Type of Investment (4)(7)(9)(10)

Investments (6)

MacuLogix, Inc.

22 unchanged sentences

Floor 9.25%), 5.00% ETP, Due 6/1/24)

Total Non-Affiliate Debt Investments — Life Science

Non-Affiliate Debt Investments — Technology — 71.2% (8)

Alula Holdings, Inc.

Consumer-related Technologies

Spineology, Inc.

Medical Device

Term Loan (10.25% cash (Prime + 7.00%;

Floor 10.25%), 1.00% ETP, Due 10/1/25)

Total Non-Affiliate Debt Investments — Life Science

Non-Affiliate Debt Investments — Sustainability — 18.8% (8)

LiquiGlide, Inc.

Waste Recycling

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 5.00% ETP, Due 1/1/25)

Nexii Building Solutions, Inc.

Waste Recycling

Term Loan (10.25% cash (Prime + 7.00%;

Floor 10.25%), 2.50% ETP, Due 9/1/25)

Betabrand Corporation (2)(12)

Consumer-related Technologies

Term Loan (10.05% cash (Libor + 7.50%;

Term Loan (10.25% cash (Prime + 7.00%;

Floor 10.25%), 2.50% ETP, Due 9/1/25)

Term Loan (10.05% cash (Libor + 7.50%;

Term Loan (10.25% cash (Prime + 7.00%;

Floor 10.25%), 2.50% ETP, Due 9/1/25)

Term Loan (10.05% cash (Libor + 7.50%;

Temperpack Technologies, Inc.

Waste Recycling

Term Loan (10.00% cash (Prime + 6.75%;

Floor 10.00%), 2.50% ETP, Due 6/1/25)

Getaround, Inc.

Consumer-related Technologies

Term Loan (10.00% cash (Prime + 6.75%;

4 unchanged sentences

Floor 10.00%), 2.50% ETP, Due 10/1/25)

Updater, Inc.

Consumer-related Technologies

Term Loan (10.00% cash (Prime + 6.75%;

Floor 11.50%, Ceiling 14.00%),0.56% ETP, Due 12/20/24)

Floor 10.00%), 2.50% ETP, Due 10/1/25)

Total Non-Affiliate Debt Investments — Sustainability

Non-Affiliate Debt Investments — Technology — 77.2% (8)

Axiom Space, Inc.

Communications

Term Loan (9.25% cash (Prime + 6.00%;

Floor 11.50%, Ceiling 14.00%), 0.56% ETP, Due 12/20/24)

Floor 9.25%), 2.50% ETP, Due 6/1/26)

Term Loan (9.25% cash (Prime + 6.00%;

Floor 11.50%, Ceiling 14.00%), 0.56% ETP, Due 12/20/24)

CPG Beyond, Inc.

Term Loan (11.00% cash (Libor + 8.60%;

Floor 9.25%), 2.50% ETP, Due 6/1/26)

Term Loan (11.00% cash (Libor + 8.60%;

Term Loan (9.25% cash (Prime + 6.00%;

Floor 9.25%), 2.50% ETP, Due 6/1/26)

Term Loan (10.65% cash (Libor + 8.40%;

Convertible Note (3.00%, Due 7/1/23)

Alula Holdings, Inc.

Consumer-related Technologies

Term Loan (10.00% cash (Prime + 6.75%;

Floor 10.00%), 3.00% ETP, Due 1/1/25)

Term Loan (10.65% cash (Libor + 8.40%;

Term Loan (10.00% cash (Prime + 6.75%;

Floor 10.00%), 3.00% ETP, Due 1/1/25)

Term Loan (10.65% cash (Libor + 8.40%;

Term Loan (10.00% cash (Prime + 6.75%;

Floor 10.00%), 3.00% ETP, Due 1/1/25)

IgnitionOne, Inc.

Internet and Media

Term Loan (10.38% cash (Libor + 10.23%;

Term Loan (10.00% cash (Prime + 6.75%;

Floor 10.00%), 3.00% ETP, Due 12/1/25)

Term Loan (10.38% cash (Libor + 10.23%;

Better Place Forests Co.

Consumer-related Technologies

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 1.85% ETP, Due 7/1/25)

7 unchanged sentences

Investments (6)

Term Loan (10.38% cash (Libor + 10.23%;

CAMP NYC, Inc.

Consumer-related Technologies

Term Loan (10.50% cash (Prime + 7.25%;

Floor 10.50%), 3.00% ETP, Due 5/1/26)

Term Loan (10.38% cash (Libor + 10.23%;

Clara Foods Co.

Consumer-related Technologies

Term Loan (9.00% cash (Prime + 5.75%;

Floor 9.00%), 5.50% ETP, Due 8/1/25)

The NanoSteel Company, Inc.

Term Loan (11.00% cash (Libor + 8.50%;

Term Loan (9.00% cash (Prime + 5.75%;

Floor 9.00%), 5.50% ETP, Due 8/1/25)

Term Loan (11.00% cash (Libor + 8.50%;

Interior Define, Inc.

Consumer-related Technologies

Term Loan (9.75% cash (Prime + 6.50%;

Floor 9.75%), 4.00% ETP, Due 1/1/26

Term Loan (9.75% cash (Prime + 6.50%;

Floor 9.75%), 4.00% ETP, Due 1/1/26

Lyrical Foods, Inc.

Consumer-related Technologies

Term Loan (10.00% cash (Prime + 6.75%;

Floor 10.00%), 9.75% ETP, Due 1/1/24)

NextCar Holding Company, Inc.

Consumer-related Technologies

Term Loan (9.00% cash (Prime + 5.75%;

Floor 9.00%), 10.10% ETP, Due 1/1/26)

Term Loan (9.00% cash (Prime + 5.75%;

Floor 9.00%), 10.10% ETP, Due 1/1/26)

Primary Kids, Inc.

Consumer-related Technologies

Term Loan (10.50% cash (Prime + 7.25%;

Floor 10.50%), 3.00% ETP, Due 3/1/25)

Term Loan (10.50% cash (Prime + 7.25%;

Floor 10.50%), 3.00% ETP, Due 3/1/25)

Term Loan (10.50% cash (Prime + 7.25%;

Floor 10.50%), 3.00% ETP, Due 9/1/25)

Quip NYC Inc.

Consumer-related Technologies

Term Loan (11.25% cash (Prime + 8.00%;

Floor 11.25%), 3.00% ETP, Due 4/1/26)

Consumer-related Technologies

Term Loan (11.00% cash (Prime + 7.75%;

Floor 11.00%), Due 7/1/25)

Term Loan (11.00% cash (Prime + 7.75%;

Floor 11.00%), Due 7/1/25)

Updater, Inc.

Consumer-related Technologies

Term Loan (12.00% cash (Prime + 5.75%;

Floor 12.00%, Ceiling 14.00%),0.56% ETP, Due 12/20/24)

Term Loan (12.00% cash (Prime + 5.75%;

Floor 12.00%, Ceiling 14.00%), 0.56% ETP, Due 12/20/24)

Term Loan (12.00% cash (Prime + 5.75%;

Floor 12.00%, Ceiling 14.00%), 0.56% ETP, Due 12/20/24)

Liqid, Inc.(2)(12)

3 unchanged sentences

Floor 9.50%), 4.00% ETP, Due 9/1/24)

BriteCore Holdings, Inc.

Term Loan (9.50% cash (Prime + 6.25%;

2 unchanged sentences

Floor 9.50%), 4.00% ETP, Due 9/1/24)

Keypath Education, LLC (2)(12)

Term Loan (10.50% cash (Libor + 8.50%;

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 4.00% ETP, Due 9/1/24)

Term Loan (10.50% cash (Libor + 8.50%;

Branded Online, Inc.

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 6.00% ETP, Due 9/1/26)

Term Loan (10.50% cash (Libor + 8.50%;

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 6.00% ETP, Due 11/1/26)

OutboundEngine, Inc.

Term Loan (11.15% cash (Libor + 8.40%;

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 0% ETP, Due 7/1/23)

Term Loan (11.15% cash (Libor + 8.40%;

BriteCore Holdings, Inc.

Term Loan (10.50% cash (Prime + 7.25%;

Floor 10.50%), 4.00% ETP, Due 10/1/24)

Term Loan (11.15% cash (Libor + 8.40%;

Term Loan (10.50% cash (Prime + 7.25%;

Floor 10.50%), 4.00% ETP, Due 10/1/24)

Revinate, Inc.

Term Loan (9.50% cash (Libor + 7.00%;

Decisyon, Inc.

Term Loan (12.68% cash (Prime + 9.23%;

Floor 12.68%), 50.43% ETP, Due 1/1/23)

Term Loan (9.50% cash (Libor + 7.00%;

Dropoff, Inc.

Term Loan (9.75% cash (Prime + 6.50%;

Floor 9.75%), 3.50% ETP, Due 4/1/26)

Term Loan (9.50% cash (Libor + 7.00%;

Term Loan (9.75% cash (Prime + 6.50%;

Floor 9.75%), 3.50% ETP, Due 4/1/26)

Topia Mobility, Inc.

E La Carte, Inc.

Term Loan (9.75% cash (Prime + 6.50%;

2 unchanged sentences

Floor 9.75%), 4.00% ETP, Due 10/1/25)

Term Loan (10.00% cash (Libor + 8.70%;

Term Loan (9.75% cash (Prime + 6.50%;

Floor 9.75%), 4.00% ETP, Due 10/1/25)

Term Loan (10.00% cash (Libor + 8.70%;

See Notes to Consolidated Financial Statements

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments

December 31, 2021

(In thousands)

Portfolio Company (1)(3)

Type of Investment (4)(7)(9)(10)

Investments (6)

Term Loan (9.25% cash (Prime + 6.00%;

Floor 9.25%), 4.00% ETP, Due 7/1/25)

Term Loan (10.00% cash (Libor + 8.70%;

Reputation Institute, Inc.

Term Loan (10.50% cash (Prime + 7.25%;

Floor 10.50%), 3.00% ETP, Due 8/1/25)

Term Loan (10.00% cash (Libor + 8.70%;

Supply Network Visiblity Holdings LLC (2)(12)

Term Loan (9.75% cash (Prime + 6.50%;

Floor 9.75%), 4.00% ETP, Due 2/1/25)

Total Non-Affiliate Debt Investments — Technology

Non-Affiliate Debt Investments — Healthcare information and services — 11.6% (8)

IDbyDNA, Inc.(2)(12)

Term Loan (9.75% cash (Prime + 6.50%;

2 unchanged sentences

Floor 9.75%), 4.00% ETP, Due 12/1/25)

Kate Farms, Inc.

Other Healthcare

Term Loan (9.75% cash (Libor + 7.45%;

Term Loan (9.75% cash (Prime + 6.50%;

Floor 9.75%), 4.00% ETP, Due 12/1/25)

Term Loan (9.75% cash (Libor + 7.45%;

Total Non-Affiliate Debt Investments — Technology

Non-Affiliate Debt Investments — Healthcare information and services — 5.0% (8)

IDbyDNA, Inc.(2)(12)

Term Loan (9.00% cash (Prime + 5.75%;

Floor 9.00%), 5.50% ETP, Due 1/1/25)

Term Loan (9.75% cash (Libor + 7.45%;

Term Loan (9.00% cash (Prime + 5.75%;

Floor 9.00%), 5.50% ETP, Due 1/1/25)

Term Loan (9.75% cash (Libor + 7.45%;

Term Loan (9.00% cash (Prime + 5.75%;

Floor 9.00%), 5.50% ETP, Due 1/1/26)

3 unchanged sentences

Non-Affiliate Warrants — Life Science — 1.0% (8)

Alpine Immune Sciences, Inc.

Avalo Therapeutics, Inc.

Biotechnology

12 unchanged sentences

92,002 Preferred Stock Warrants

F-Star Therapeutics, Inc.

Biotechnology

21,120 Common Stock Warrants

Biotechnology

284,090 Common Stock Warrants

LogicBio, Inc.

10 unchanged sentences

7,051 Common Stock Warrants

Stealth Biotherapeutics Inc.

Biotechnology

795,455 Common Stock Warrants

Strongbridge U.S.

4 unchanged sentences

95,293 Common Stock Warrants

See Notes to Consolidated Financial Statements

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments

December 31, 2020

(In thousands)

Portfolio Company (1)(3)

Type of Investment (4)(7)(9)(10)

Investments (6)

AccuVein Inc.

Medical Device

1,175 Preferred Stock Warrants

1,175 Common Stock Warrants

Aerin Medical, Inc.

1 unchanged sentence

1,818,183 Preferred Stock Warrants

Bardy Diagnostics, Inc.

Medical Device

346,154 Preferred Stock Warrants

Canary Medical Inc.

12 unchanged sentences

Medical Device

47,410 Common Stock Warrants

Infobionic, Inc.

Medical Device

317,647 Preferred Stock Warrants

13 unchanged sentences

Medical Device

408 Common Stock Warrants

408 Preferred Stock Warrants

Total Non-Affiliate Warrants — Life Science

Non-Affiliate Warrants — Sustainability — 0.4% (8)

LiquiGlide, Inc.

Waste Recycling

61,359 Common Stock Warrants

Nexii Building Solutions, Inc.

Waste Recycling

142,405 Common Stock Warrants

Temperpack Technologies, Inc.

Waste Recycling

48,756 Preferred Stock Warrants

Total Non-Affiliate Warrants — Sustainability

Non-Affiliate Warrants — Technology — 6.2% (8)

Axiom Space, Inc.

Communications

1,991 Common Stock Warrants

Intelepeer Holdings, Inc.

Communications

3,078,084 Preferred and Common Stock Warrants

2,936,535 Preferred Stock Warrants

PebblePost, Inc.

4 unchanged sentences

20,000 Preferred Stock Warrants

Betabrand Corporation (2)(12)

Aterian, Inc.

Consumer-related Technologies

76,923 Common Stock Warrants

Better Place Forests Co.

Consumer-related Technologies

9,353 Preferred Stock Warrants

2 unchanged sentences

268,591 Preferred Stock Warrants

CAMP NYC, Inc.

Consumer-related Technologies

17,605 Preferred Stock Warrants

Clara Foods Co.

Consumer-related Technologies

46,745 Preferred Stock Warrants

Getaround, Inc.

1 unchanged sentence

651,040 Preferred Stock Warrants

Mohawk Group Holdings, Inc.

See Notes to Consolidated Financial Statements

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments

December 31, 2021

(In thousands)

Portfolio Company (1)(3)

Type of Investment (4)(7)(9)(10)

Investments (6)

Interior Define, Inc.

Consumer-related Technologies

76,923 Common Stock Warrants

553,710 Preferred Stock Warrants

NextCar Holding Company, Inc.

Consumer-related Technologies

310,463 Preferred Stock Warrants

Primary Kids, Inc.

Consumer-related Technologies

553,778 Preferred Stock Warrants

Quip NYC Inc.

Consumer-related Technologies

6,191 Preferred Stock Warrants

Consumer-related Technologies

134,421 Preferred Stock Warrants

Updater, Inc.(2)(12)

21 unchanged sentences

6,753 Preferred and Common Stock Warrants

Semiconductors

203,616 Preferred Stock Warrants

Branded Online, Inc.

16,678 Common Stock Warrants

BriteCore Holdings, Inc.

55,591 Preferred Stock Warrants

Education Elements, Inc.

238,121 Preferred Stock Warrants

Keypath Education, Inc.(2)(12)

Decisyon, Inc.

82,967 Common Stock Warrants

Dropoff, Inc.

482,283 Common Stock Warrants

E La Carte, Inc.

181,947 Preferred Stock Warrants

1 unchanged sentence

288,115 Preferred Stock Warrants

OutboundEngine, Inc.

26,733 Preferred Stock Warrants

Revinate, Inc.

Reputation Institute, Inc.

3,731 Preferred Stock Warrants

Revinate Holdings, Inc.

615,475 Preferred Stock Warrants

Riv Data Corp.

3 unchanged sentences

301,055 Preferred and Common Stock Warrants

Topia Mobility, Inc.

Supply Network Visiblity Holdings LLC (2)(12)

682 Preferred Stock Warrants

Weblinc Corporation (2)(12)

Topia Mobility, Inc.

3,049,607 Preferred Stock Warrants

1 unchanged sentence

Total Non-Affiliate Warrants — Technology

Non-Affiliate Warrants — Sustainability — 0.0% (8)

Tigo Energy, Inc.

Energy Efficiency

804,604 Preferred Stock Warrants

Total Non-Affiliate Warrants — Sustainability

Non-Affiliate Warrants — Healthcare information and services — 0.6% (8)

9 unchanged sentences

7,097,792 Preferred Stock Warrants

10,906 Common Stock Warrants

Total Non-Affiliate Warrants — Healthcare information and services

4 unchanged sentences

Total Non-Affiliate Other Investments

See Notes to Consolidated Financial Statements

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments

December 31, 2020

(In thousands)

Portfolio Company (1)(3)

Type of Investment (4)(7)(9)(10)

Investments (6)

Non-Affiliate Equity — 0.1% (8)

Sunesis Pharmaceuticals, Inc.

Biotechnology

1,308 Common Stock

SnagAJob.com, Inc.

4 unchanged sentences

18,405 Common Stock

Formetrix, Inc.

74,286 Common Stock

Clarabridge, Inc.

17,142 Preferred Stock

Lightspeed POS Inc.

17,037 Common Stock

Total Non-Affiliate Equity

Total Non-Affiliate Portfolio Investment Assets

Non-controlled Affiliate Investments — 3.5% (8)

Non-controlled Affiliate Debt Investments — Technology — 2.7% (8)

Decisyon, Inc.

Term Loan (12.50% cash (Libor + 12.308%;

Floor 12.50%), 12.00% ETP, Due 6/1/21)

Term Loan (12.50% cash (Libor + 12.308%;

Floor 12.50%), 12.00% ETP, Due 6/1/21)

Term Loan (12.02% cash, Due 6/1/21)

Term Loan (12.03% cash, Due 6/1/21)

Term Loan (12.24% cash, Due 6/1/21)

Term Loan (13.08% cash, Due 6/1/21)

Term Loan (13.10% cash, Due 6/1/21)

StereoVision Imaging, Inc.

Term Loan (8.50% Cash (Libor + 7.03%;

Floor 8.50%), 15.63% ETP, Due 1/1/22)

Total Non-controlled Affiliate Debt Investments — Technology

Non-controlled Affiliate Warrants — Technology — 0.0% (8)

Decisyon, Inc.

82,967 Common Stock Warrants

Total Non-controlled Affiliate Warrants — Technology

Non-controlled Affiliate Equity — Technology — 0.8% (8)

Decisyon, Inc.

72,638,663 Preferered and Common Stock

StereoVision Imaging, Inc.

1,943,572 Preferred and Common Stock

Total Non-controlled Affiliate Equity

Total Non-controlled Affiliate Portfolio Investment Assets

Total Non-Affiliate Equity

Total Non-Affiliate Portfolio Investment Assets

Controlled Affiliate Investments — 0.0% (8)

13 unchanged sentences

(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 revolving credit facility (the “Key Facility”) with KeyBank National Association (“Key”), the Note Funding Agreement (the “NYL Facility”) with several entities owned or affiliated with New York Life Insurance Company (“NYL Noteholders”) and/or the term debt securitization in connection with which an affiliate of the Company made an offering of $100.0 million in aggregate principal amount of fixed rate asset-backed notes that were issued in conjunction with the $160.0 million securitization of secured loans the Company completed on August 13, 2019 (“the Asset-Backed Notes”).

See Notes to Consolidated Financial Statements

which an affiliate of the Company made an offering of $100.0 million in aggregate principal amount of fixed rate asset-backed notes that were issued in conjunction with the $160.0 million securitization of secured loans the Company completed on August 13, 2019 (“the Asset-Backed Notes”).

(3) All non-affiliate investments are investments in which the Company owns less than 5% of the voting securities of the portfolio company.

10 unchanged sentences

(8) Value as a percent of net assets.

(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 December 31, 2020.

(9) As of December 31, 2021, 5.8% of the Company’s total assets on a cost and fair value basis, respectively, are in non-qualifying assets.

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.

4 unchanged sentences

(12) The fair value of the investment was valued using significant unobservable inputs.

(13) Debt investment is on non-accrual status as of December 31, 2020.

(13) On July 8, 2020, Espero BioPharma, Inc.

4 unchanged sentences

On October 22, 2020, Espero ABC transferred the assets of Espero to HESP LLC, a Delaware limited liability company, wholly owned by the Company.

(14) Debt investment is on non-accrual status as of December 31, 2021.

See Notes to Consolidated Financial Statements

9 unchanged sentences

Non-Affiliate Debt Investments — Life Science — 71.4% (8)

Celsion Corporation (2)(5)(12)

Castle Creek Pharmaceuticals Holdings, Inc.

Biotechnology

3 unchanged sentences

Floor 9.30%), 5.00% ETP, Due 3/1/24)

Encore Dermatology, Inc.

Biotechnology

Term Loan (9.30% cash (Libor + 7.50%;

2 unchanged sentences

Floor 9.30%), 5.00% ETP, Due 3/1/24)

Espero BioPharma, Inc.

Celsion Corporation (2)(5)(12)

Biotechnology

3 unchanged sentences

Floor 9.63%), 5.50% ETP, Due 4/1/23)

LogicBio, Inc.(2)(5)(12)

Biotechnology

Term Loan (8.75 % cash (Libor + 6.25%;

Floor 8.75%), 4.50% ETP, Due 6/1/24

Mustang Bio, Inc.

Emalex Biosciences, Inc.

Biotechnology

3 unchanged sentences

Floor 9.75%), 5.00% ETP, Due 12/1/23)

vTv Therapeutics Inc.

LogicBio, Inc.

Biotechnology

1 unchanged sentence

Floor 8.75%), 4.50% ETP, Due 6/1/24)

Provivi, Inc.

Biotechnology

Term Loan (9.50% cash (Libor + 8.50%;

Floor 9.50%), 5.50% ETP, Due 12/1/24)

Titan Pharmaceuticals, Inc.

Drug Delivery

Term Loan (9.50% cash (Libor + 8.50%;

Floor 9.50%), 5.50% ETP, Due 12/1/24)

Conventus Orthopaedics, Inc.

Bardy Diagnostics, Inc.

Medical Device

3 unchanged sentences

Floor 8.90%), 5.00% ETP, Due 9/1/24)

CSA Medical, Inc.

Medical Device

Term Loan (8.90% cash (Libor + 7.00%;

2 unchanged sentences

Floor 8.90%), 5.00% ETP, Due 9/1/24)

Medical Device

Term Loan (8.90% cash (Libor + 7.00%;

4 unchanged sentences

Floor 8.90%), 5.00% ETP, Due 9/1/24)

Term Loan (10.00% cash (Libor + 7.80%;

Canary Medical Inc.

Medical Device

Term Loan (9.00% cash (Prime + 5.75%;

Floor 9.00%), 7.00% ETP, Due 11/1/24)

Lantos Technologies, Inc.

Ceribell, Inc.

Medical Device

1 unchanged sentence

Floor 8.25%), 5.50% ETP, Due 10/1/24)

MacuLogix, Inc.

Term Loan (8.25% cash (Libor + 6.70%;

Floor 8.25%), 5.50% ETP, Due 10/1/24)

Conventus Orthopaedics, Inc.

Medical Device

3 unchanged sentences

Floor 9.25%), 10.36% ETP, Due 7/1/25)

Meditrina, Inc.

Corinth Medtech, Inc.

Medical Device

Term Loan (9.70% cash (Libor + 7.10%;

Term Loan (8.50% cash (Prime + 5.25%;

Floor 8.50%), 20.00% ETP, Due 4/1/22)

VERO Biotech LLC (2)(12)

Term Loan (8.50% cash (Prime + 5.25%;

Floor 8.50%), 20.00% ETP, Due 4/1/22)

CSA Medical, Inc.

Medical Device

3 unchanged sentences

Floor 10.00%), 5.00% ETP, Due 1/1/24)

Total Non-Affiliate Debt Investments — Life Science

Non-Affiliate Debt Investments — Technology — 84.8% (8)

Audacy Corporation (2)(12)(15)

Communications

Term Loan (10.00% cash (Libor + 8.20%;

Floor 10.00%), 5.00% ETP, Due 3/1/24)

Medical Device

Term Loan (10.00% cash (Libor + 7.80%;

Floor 9.50%), Due 2/1/20)

Betabrand Corporation (2)(12)

Consumer-related Technologies

Floor 10.00%), 3.50% ETP, Due 10/1/24)

Term Loan (10.00% cash (Libor + 7.80%;

2 unchanged sentences

Floor 10.00%), 3.50% ETP, Due 10/1/24)

Mohawk Group Holdings, Inc.

Consumer-related Technologies

Term Loan (10.00% cash (Libor + 7.80%;

Floor 10.00%), 3.50% ETP, Due 10/1/24)

MacuLogix, Inc.

Medical Device

Term Loan (10.08% cash (Libor + 7.68%;

2 unchanged sentences

Floor 10.08%), 5.50% ETP, Due 10/1/23)

Updater, Inc.(2)(12)

Consumer-related Technologies

Term Loan (11.50% cash (Prime + 5.75%;

Floor 11.50%, Ceiling 14.00%),0.56% ETP, Due 12/20/24)

Magnolia Medical Technologies, Inc.

Medical Device

Term Loan (9.75% cash (Prime + 5.00%;

Floor 11.50%, Ceiling 14.00%), 0.56% ETP, Due 12/20/24)

Floor 9.75%), 4.00% ETP, Due 3/1/25)

See Notes to Consolidated Financial Statements

7 unchanged sentences

Term Loan (9.75% cash (Prime + 5.00%;

Floor 11.50%, Ceiling 14.00%), 0.56% ETP, Due 12/20/24)

Term Loan (11.00% cash (Libor + 8.60%;

Floor 9.75%), 4.00% ETP, Due 3/1/25)

Term Loan (9.75% cash (Prime + 5.00%;

Floor 9.75%), 4.00% ETP, Due 3/1/25)

Term Loan (9.75% cash (Prime + 5.00%;

Floor 9.75%), 4.00% ETP, Due 3/1/25)

Sonex Health, Inc.

Medical Device

Term Loan (9.25% cash (Prime + 6.00%;

Floor 9.25%), 5.00% ETP, Due 6/1/24)

Term Loan (9.25% cash (Prime + 6.00%;

Floor 9.25%), 5.00% ETP, Due 6/1/24)

Term Loan (9.25% cash (Prime + 6.00%;

Floor 9.25%), 5.00% ETP, Due 6/1/24)

Total Non-Affiliate Debt Investments — Life Science

Non-Affiliate Debt Investments — Technology — 71.2% (8)

Alula Holdings, Inc.

Consumer-related Technologies

Term Loan (10.00% cash (Prime + 6.75%;

Floor 10.00%), 3.00% ETP, Due 1/1/25)

Term Loan (10.00% cash (Prime + 6.75%;

Floor 10.00%), 3.00% ETP, Due 1/1/25)

Term Loan (10.00% cash (Prime + 6.75%;

Floor 10.00%), 3.00% ETP, Due 1/1/25)

Betabrand Corporation (2)(12)

Consumer-related Technologies

Term Loan (10.05% cash (Libor + 7.50%;

Floor 10.05%), 5.75% ETP, Due 9/1/23)

Kaminario, Inc.

Term Loan (10.05% cash (Libor + 7.50%;

2 unchanged sentences

Floor 10.05%), 5.75% ETP, Due 9/1/23)

Getaround, Inc.

Consumer-related Technologies

Term Loan (10.50% cash (Prime + 7.25%;

Floor 10.50%), 4.50% ETP, Due 12/1/24)

Term Loan (10.50% cash (Prime + 7.25%;

Floor 10.50%), 4.50% ETP, Due 12/1/24)

Term Loan (10.50% cash (Prime + 7.25%;

Floor 10.50%), 4.50% ETP, Due 12/1/24)

Updater, Inc.

Consumer-related Technologies

Term Loan (11.50% cash (Prime + 5.75%;

Floor 11.50%, Ceiling 14.00%),0.56% ETP, Due 12/20/24)

Term Loan (11.50% cash (Prime + 5.75%;

Floor 11.50%, Ceiling 14.00%), 0.56% ETP, Due 12/20/24)

Term Loan (11.50% cash (Prime + 5.75%;

Floor 11.50%, Ceiling 14.00%), 0.56% ETP, Due 12/20/24)

CPG Beyond, Inc.

Term Loan (11.00% cash (Libor + 8.60%;

Floor 11.00%), 2.00% ETP, Due 8/1/23)

IgnitionOne, Inc.

Internet and Media

Term Loan (11.00% cash (Libor + 8.60%;

6 unchanged sentences

Floor 10.65%), 4.00% ETP, Due 7/1/23)

Skillshare, Inc.(2)(12)

IgnitionOne, Inc.

Internet and Media

5 unchanged sentences

Floor 10.23%), 6.00% ETP, Due 4/1/22)

Verve Wireless, Inc.

Internet and Media

Term Loan (10.38% cash (Libor + 10.23%;

5 unchanged sentences

Floor 11.00%), 14.88% ETP, Due 6/1/22)

Kinestral Technologies, Inc.(2)(12)

Power Management

Term Loan (9.95% cash (Libor + 7.75%;

Liqid, Inc.(2)(12)

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 4.00% ETP, Due 9/1/24)

Term Loan (9.95% cash (Libor + 7.75%;

Term Loan (9.50% cash (Prime + 6.25%;

Floor 9.50%), 4.00% ETP, Due 9/1/24)

Bridge2 Solutions, LLC.

Term Loan (11.00% cash (Libor + 8.40%;

BriteCore Holdings, Inc.

Term Loan (10.50% cash (Prime + 7.25%;

Floor 10.50%), 4.00% ETP, Due 10/1/24)

Term Loan (11.00% cash (Libor + 8.40%;

Term Loan (10.50% cash (Prime + 7.25%;

Floor 10.50%), 4.00% ETP, Due 10/1/24)

Keypath Education, LLC (2)(12)

Term Loan (10.50% cash (Libor + 8.50%;

Floor 10.50%), 2.50% ETP, Due 10/1/24)

New Signature US, Inc.

Term Loan (10.50% cash (Libor + 8.50%;

2 unchanged sentences

Floor 10.50%), 2.50% ETP, Due 10/1/24)

See Notes to Consolidated Financial Statements

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments

December 31, 2020

(In thousands)

Portfolio Company (1)(3)

Type of Investment (4)(7)(9)(10)

Investments (6)

OutboundEngine, Inc.

3 unchanged sentences

Floor 11.15%), 3.63% ETP, Due 7/1/23)

Term Loan (11.15% cash (Libor + 8.40%;

Floor 11.15%), 3.63% ETP, Due 7/1/23)

Revinate, Inc.

5 unchanged sentences

Floor 9.50%), 4.00% ETP, Due 11/1/23)

Topia Mobility, Inc.

Term Loan (10.00% cash (Prime + 6.75%;

Floor 10.00%), 4.00% ETP, Due 9/1/24)

Term Loan (10.00% cash (Prime + 6.75%;

Floor 10.00%), 4.00% ETP, Due 9/1/24)

Term Loan (10.00% cash (Libor + 8.70%;

8 unchanged sentences

Non-Affiliate Debt Investments — Healthcare information and services — 11.6% (8)

Kate Farms, Inc.

Other Healthcare

Term Loan (9.75% cash (Libor + 7.45%;

IDbyDNA, Inc.(2)(12)

Term Loan (9.00% cash (Prime + 5.75%;

Floor 9.00%), 5.50% ETP, Due 1/1/25)

Term Loan (9.75% cash (Libor + 7.45%;

Term Loan (9.00% cash (Prime + 5.75%;

Floor 9.00%), 5.50% ETP, Due 1/1/25)

See Notes to Consolidated Financial Statements

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments

December 31, 2019

(In thousands)

Portfolio Company (1)(3)

Type of Investment (4)(7)(9)(10)

Investments (6)

HealthEdge Software, Inc.

Kate Farms, Inc.

Other Healthcare

Term Loan (9.75% cash (Libor + 7.45%;

13 unchanged sentences

4,632 Common Stock Warrants

Castle Creek Pharmaceuticals, Inc.

Biotechnology

2,428 Preferred Stock Warrants

Celsion Corporation (2)(5)(12)

4 unchanged sentences

661,956 Preferred Stock Warrants

Encore Dermatology, Inc.

Emalex Biosciences, Inc.

Biotechnology

73,602 Preferred Stock Warrants

Espero BioPharma, Inc.

Biotechnology

1,507,917 Common Stock Warrants

LogicBio, Inc.

4 unchanged sentences

252,161 Common Stock Warrants

Rocket Pharmaceuticals Corporation (5)(12)

Biotechnology

7,051 Common Stock Warrants

Palatin Technologies, Inc.

Provivi, Inc.

Biotechnology

274,725 Common Stock Warrants

Revance Therapeutics, Inc.

123,457 Preferred Stock Warrants

Rocket Pharmaceuticals Corporation (5)(12)

Biotechnology

3 unchanged sentences

160,714 Common Stock Warrants

Sunesis Pharmaceuticals, Inc.

Biotechnology

2,050 Common Stock Warrants

vTv Therapeutics Inc.

1 unchanged sentence

95,293 Common Stock Warrants

Titan Pharmaceuticals, Inc.

Drug Delivery

373,333 Common Stock Warrants

AccuVein Inc.

4 unchanged sentences

1,818,183 Preferred Stock Warrants

Bardy Diagnostics, Inc.

Medical Device

346,154 Preferred Stock Warrants

Canary Medical Inc.

Medical Device

7,292 Preferred Stock Warrants

Ceribell, Inc.

Medical Device

117,521 Preferred Stock Warrants

Conventus Orthopaedics, Inc.

7 unchanged sentences

750,000 Preferred Stock Warrants

Lantos Technologies, Inc.

MacuLogix, Inc.

Medical Device

454,460 Preferred Stock Warrants

MacuLogix, Inc.

Magnolia Medical Technologies, Inc.

Medical Device

3 unchanged sentences

221,510 Preferred Stock Warrants

NinePoint Medical, Inc.

Sonex Health, Inc.

Medical Device

2 unchanged sentences

Medical Device

408 Common Stock Warrants

408 Preferred Stock Warrants

Total Non-Affiliate Warrants — Life Science

Non-Affiliate Warrants — Technology — 3.9% (8)

Audacy Corporation (2)(12)

Communications

1,545,575 Preferred Stock Warrants

Intelepeer Holdings, Inc.

Communications

2,134,617 Preferred Stock Warrants

3,078,084 Preferred and Common Stock Warrants

PebblePost, Inc.

1 unchanged sentence

598,850 Preferred Stock Warrants

Alula Holdings, Inc.

Consumer-related Technologies

20,000 Preferred Stock Warrants

Betabrand Corporation (2)(12)

1 unchanged sentence

261,198 Preferred Stock Warrants

See Notes to Consolidated Financial Statements

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments

December 31, 2020

(In thousands)

Portfolio Company (1)(3)

Type of Investment (4)(7)(9)(10)

Investments (6)

Caastle, Inc.

1 unchanged sentence

268,591 Preferred Stock Warrants

Le Tote, Inc.

Getaround, Inc.

Consumer-related Technologies

3 unchanged sentences

76,923 Common Stock Warrants

Rhapsody International Inc.

Consumer-related Technologies

852,273 Common Stock Warrants

Updater, Inc.(2)(12)

1 unchanged sentence

108,333 Common Stock Warrants

500,000 Preferred Stock Warrants

Kaminario, Inc.

CPG Beyond, Inc.

500,000 Preferred Stock Warrants

44,211,003 Preferred and Common Stock Warrants

Global Worldwide LLC (2)(12)

1 unchanged sentence

245,810 Preferred Stock Warrants

IgnitionOne, Inc.

Internet and Media

262,910 Preferred Stock Warrants

Rocket Lawyer Incorporated (2)(12)

4 unchanged sentences

139,073 Preferred Stock Warrants

Verve Wireless, Inc.

Internet and Media

112,805 Common Stock Warrants

The NanoSteel Company, Inc.

Liqid, Inc.(2)(12)

243,942 Preferred Stock Warrants

4 unchanged sentences

Semiconductors

202,602 Preferred Stock Warrants

6,753 Preferred and Common Stock Warrants

Semiconductors

203,616 Preferred Stock Warrants

Bridge2 Solutions, Inc.

172,958 Common Stock Warrants

BSI Platform Holdings, LLC (2)(12)(13)

187,500 Preferred Stock Warrants

Clarabridge, Inc.

BriteCore Holdings, Inc.

12,857 Preferred Stock Warrants

1 unchanged sentence

238,121 Preferred Stock Warrants

Keypath Education, Inc.(2)(12)

900,000 Preferred Stock Warrants

Lotame Solutions, Inc.

6 unchanged sentences

321,428 Preferred Stock Warrants

See Notes to Consolidated Financial Statements

Horizon Technology Finance Corporation and Subsidiaries

Consolidated Schedule of Investments

December 31, 2019

(In thousands)

Portfolio Company (1)(3)

Type of Investment (4)(7)(9)(10)

Investments (6)

ShopKeep.com, Inc.

186,045 Preferred Stock Warrants

133,560 Preferred Stock Warrants

Skyword, Inc.

301,056 Preferred Stock Warrants

Sys-Tech Solutions, Inc.

301,055 Preferred and Common Stock Warrants

Topia Mobility, Inc.

3,049,607 Preferred Stock Warrants

9 unchanged sentences

Non-Affiliate Warrants — Healthcare information and services — 0.9% (8)

ProterixBio, Inc.

2,676 Common Stock Warrants

IDbyDNA, Inc.(2)(12)

363,082 Preferred Stock Warrants

Kate Farms, Inc.

4 unchanged sentences

27,373 Preferred Stock Warrants

Catasys, Inc.

51,185 Common Stock Warrants

HealthEdge Software, Inc.

205,481 Preferred Stock Warrants

Medsphere Systems Corporation (2)(12)

7,097,792 Preferred Stock Warrants

10,906 Common Stock Warrants

Total Non-Affiliate Warrants — Healthcare information and services

5 unchanged sentences

Non-Affiliate Equity — 0.7% (8)

Palatin Technologies, Inc.

Biotechnology

5,249 Common Stock

Revance Therapeutics, Inc.(5)

Biotechnology

5,125 Common Stock

Sunesis Pharmaceuticals, Inc.

4 unchanged sentences

82,974 Common Stock

Verve Wireless, Inc.

Internet and Media

100,598 Preferred Stock

Zeta Global Holdings Corp.

3 unchanged sentences

74,286 Common Stock

Clarabridge, Inc.

17,142 Preferred Stock

Lightspeed POS Inc.

17,037 Common Stock

Total Non-Affiliate Equity

22 unchanged sentences

Decisyon, Inc.

45,365,936 Common Stock

72,638,663 Preferered and Common Stock

StereoVision Imaging, Inc.

1,943,572 Common Stock

1,943,572 Preferred and Common Stock

Total Non-controlled Affiliate Equity

Total Non-controlled Affiliate Portfolio Investment Assets

Controlled Affiliate Investments — 9.0% (8)

Controlled Affiliate Equity — Financial — 9.0% (8)

Horizon Secured Loan Fund I LLC (12)(14)

Investment funds

Total Controlled Affiliate Equity

Total Controlled Affiliate Portfolio Investment Assets

Total Portfolio Investment Assets — 173.7% (8)

See Notes to Consolidated Financial Statements

6 unchanged sentences

Investments (6)

Controlled Affiliate Investments — 0.7% (8)

Controlled Affiliate Other Investments — Biotechnology — 0.7% (8)

HESP LLC (2)(12)(14)

Biotechnology

Other Investment

Total Controlled Affiliate Other Investments

Total Controlled Affiliate Portfolio Investment Assets

Total Portfolio Investment Assets — 165.8% (8)

Short Term Investments — Unrestricted Investments — 12.8% (8)

5 unchanged sentences

(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 non-affiliate investments are investments in which the Company owns less than 5% of the voting securities of the portfolio company.

10 unchanged sentences

(8) Value as a percent of net assets.

(9) As of December 31, 2019, 4.9% and 4.8% of the Company’s total assets on a cost and fair value basis, respectively, are in non-qualifying assets.

(9) 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 December 31, 2020.

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.

4 unchanged sentences

(12) The fair value of the investment was valued using significant unobservable inputs.

See Notes to Consolidated Financial Statements

(13) New Signature US, Inc.

is a subsidiary of BSI Platform Holdings, LLC.

(14) On June 1, 2018, the Company entered into an agreement with Arena Sunset SPV, LLC (“Arena”) to co-invest through Horizon Secured Loan Fund I LLC (“HSLFI”), a joint venture, which is expected to make investments, either directly or indirectly through subsidiaries, primarily in the form of secured loans to development-stage companies in the technology, life science, healthcare information and services and sustainability industries.

All HSLFI investment decisions require unanimous approval of a quorum of HSLFI’s board of managers, which consists of two representatives of the Company and Arena.

Although the Company owns more than 25% of the voting securities of HSLFI, the Company does not have sole control over significant actions of HSLFI for purposes of the 1940 Act or otherwise.

(13) Debt investment is on non-accrual status as of December 31, 2020.

(14) On July 8, 2020, Espero BioPharma, Inc.

and its affiliates, Jacksonville Pharmaceuticals, Inc.

and Espero Pharmaceuticals, Inc.

(collectively, “Espero”) assigned substantially all of their assets to their respective assignment estates and respectively appointed PSE (ABC), LLC, PS PJAX (ABC), LLC, and PPSE (ABC), LLC (collectively, “Espero ABC”) to administer their respective estates and to facilitate the orderly sale and liquidation of their property and assets.

On October 6, 2020, the Court of Chancery of the State of Delaware approved the transfer of the assets of Espero to the Company and Credit II or their designees in consideration for the Company and Credit II’s credit bid at auction of $7.0 million.

On October 22, 2020, Espero ABC transferred the assets of Espero to HESP LLC, a Delaware limited liability company, wholly owned by the Company.

See Notes to Consolidated Financial Statements

59 unchanged sentences

Interest payments received on non-accrual debt investments may be recognized as income, on a cash basis, or applied to principal depending upon management’s judgment at the time the debt investment is placed on non-accrual status.

As of December 31, 2020, there were two investments on non-accrual status with a cost of $13.9 million and a fair value of $8.8 million.

As of December 31, 2021, there was one investment on non-accrual status with a cost of $11.5 million and a fair value of $6.9 million.

As of December 31, 2020, there were two investments on non-accrual status with a cost of $13.9 million and a fair value of $8.8 million.

For the year ended December 31, 2021, the Company recognized, as interest income, payments of $1.3 million received from two portfolio companies whose debt investments were on non-accrual status.

For the year ended December 31, 2020, the Company recognized, as interest income, payments of $0.03 million received from one portfolio company whose debt investment was on non-accrual status.

For the years ended December 31, 2019 and 2018, the Company did not recognize any interest income from debt investments on non-accrual status.

For the year ended December 31, 2019, the Company did not recognize any interest income from debt investments on non-accrual status.

The Company receives a variety of fees from borrowers in the ordinary course of conducting its business, including advisory fees, commitment fees, amendment fees, non-utilization fees, success fees and prepayment fees.

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For the year ended December 31, 2019, HSLFI distributed $0.7 million classified as dividend income to the Company.

For the period June 1, 2018 (the commencement of HSLFI’s operations) through December 31, 2018, HSLFI distributed $0.3 million classified as dividend income to the Company.

Realized gains or losses on the sale of investments, or upon the determination that an investment balance, or portion thereof, is not recoverable, are calculated using the specific identification method.

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On March 26, 2019, the Company completed a follow-on public offering of 2,000,000 shares of its common stock at a public offering price of $12.14 per share, for total net proceeds to the Company of $23.1 million, after deducting underwriting commission and discounts and other offering expenses.

On August 2, 2019, the Company entered into an At-The-Market (“ATM”) sales agreement (the “Prior Equity Distribution Agreement”), with Goldman Sachs & Co.

Riley FBR, Inc.

(each a “Sales Agent” and, collectively, the “Sales Agents”).

The Prior Equity Distribution Agreement provided that the Company may offer and sell its shares from time to time through the Sales Agents up to $50.0 million worth of its common stock, in amounts and at times to be determined by the Company.

On July 30, 2020, the Company terminated the Prior Equity Distribution Agreement and entered into a new ATM sales agreement (the “Equity Distribution Agreement”), with the Sales Agents.

The remaining shares available under the Prior Equity Distribution Agreement are no longer available for issuance.

The Equity Distribution Agreement provides that the Company may offer and sell its shares from time to time through the Sales Agents up to $100.0 million worth of its common stock, in amounts and at times to be determined by the Company.

Sales of the Company’s common stock, if any, may be made in negotiated transactions or transactions that are deemed to be “at-the-market,” as defined in Rule 415 under the Securities Act, including sales made directly on the NASDAQ or similar securities exchange or sales made to or through a market maker other than on an exchange, at prices related to the prevailing market prices or at negotiated prices.

During the year ended December 31, 2020, the Company sold 3,702,500 shares of common stock under the Prior Equity Distribution Agreement and the Equity Distribution Agreement.

On August 2, 2019 we entered into an At-The-Market (“ATM”) sales agreement (the “2019 Equity Distribution Agreement”), with Goldman Sachs & Co.

Riley FBR, Inc., (each a “Sales Agent” and, collectively, the “Sales Agents”).

The 2019 Equity Distribution Agreement provided that we may offer and sell shares of common stock from time to time through the Sales Agents representing up to $50.0 million worth of our common stock, in amounts and at times to be determined by us.

On July 30, 2020, we terminated the 2019 Equity Distribution Agreement and entered into a new ATM sales agreement (the “2020 Equity Distribution Agreement”) with the Sales Agents.

The 2020 Equity Distribution Agreement provided that we may offer and sell its shares from time to time through the Sales Agents up to $100.0 million worth of its common stock, in amounts and at times to be determined by us.

On August 2, 2021, we terminated the 2020 Equity Distribution Agreement and entered into a new ATM sales agreement (the “2021 Equity Distribution Agreement”) with the Sales Agents.

The remaining shares available under the 2019 Equity Distribution Agreement and the 2020 Equity Distribution Agreement are no longer available for issuance.

The 2021 Equity Distribution Agreement provides that we may offer and sell our shares from time to time through the Sales Agents up to $100.0 million worth of our common stock, in amounts and at times to be determined by us.

Sales of our common stock, if any, may be made in negotiated transactions or transactions that are deemed to be “at-the-market,” as defined in Rule 415 under the Securities Act, including sales made directly on the NASDAQ or similar securities exchange or sales made to or through a market maker other than on an exchange, at prices related to the prevailing market prices or at negotiated prices.

During the year ended December 31, 2021, the Company sold 1,907,234 shares of common stock under the 2020 Equity Distribution Agreement and the 2021 Equity Distribution Agreement.

For the same period, the Company received total accumulated net proceeds of approximately $30.1 million, including $0.8 million of offering expenses, from these sales.

During the year ended December 31, 2019, the Company sold 2,012,844 shares of common stock under the Prior Equity Distribution Agreement.

During the year ended December 31, 2020, the Company sold 3,702,500 shares of common stock under the 2019 Equity Distribution Agreement and the 2020 Equity Distribution Agreement.

For the same period, the Company received total accumulated net proceeds of approximately $44.6 million, including $1.0 million of offering expenses, from these sales.

During the year ended December 31, 2019, the Company sold 2,012,844 shares of common stock under the 2019 Equity Distribution Agreement.

For the same period, the Company received total accumulated net proceeds of approximately $24.0 million, including $0.6 million of offering expenses, from these sales.

The Company generally uses net proceeds from these offerings to make investments, to pay down liabilities and for general corporate purposes.

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During the years ended December 31, 2021, 2020 and 2019, the Company did not make any repurchases of its common stock.

From the inception of the stock repurchase program through December 31, 2020, the

Company repurchased 167,465 shares of its common stock at an average price of $11.22 on the open market at a total cost of $1.9 million.

From the inception of the stock repurchase program through December 31, 2021, the Company repurchased 167,465 shares of its common stock at an average price of $11.22 on the open market at a total cost of $1.9 million.

Transfers of financial assets

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The Advisor’s services under the Investment Management Agreement are not exclusive to the Company, and the Advisor is free to furnish similar services to other entities so long as its services to the Company are not impaired.

The Advisor is a registered investment adviser with the SEC.

Advisor is a registered investment adviser with the SEC.

The Advisor receives fees for providing services to the Company under the Investment Management Agreement, consisting of two components, a base management fee and an incentive fee.

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From and after October 31, 2018, the first date on which the reduced asset coverage requirements in Section 61(a)(2) of the 1940 Act applied to the Company, the base management fee was and will be calculated at an annual rate of 2.00% of the Company’s gross assets (less cash and cash equivalents) including any assets acquired with the proceeds of leverage;

provided, that, to the extent the Company’s gross assets (less cash and cash equivalents) exceed $250 million, the base management fee on the amount of such excess over $250 million will be calculated at an annual rate of 1.60% of the Company’s gross

assets (less cash and cash equivalents) including any assets acquired with the proceeds of leverage.

The base management fee is payable monthly in arrears and is prorated for any partial month.

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The incentive fee on Pre-Incentive Fee Net Investment Income is subject to a fee cap and deferral mechanism which is determined based upon a look-back period of up to three years and is expensed when incurred.

For this purpose, the look-back period for the incentive fee based on Pre-Incentive Fee Net Investment Income (the “Incentive Fee Look-back Period”) includes the relevant calendar quarter and the 11 preceding full calendar quarters.

For this purpose, the look-back period for the incentive fee based on Pre-Incentive Fee Net Investment Income (the “Incentive

Fee Look-back Period”) includes the relevant calendar quarter and the 11 preceding full calendar quarters.

Each quarterly incentive fee payable on Pre-Incentive Fee Net Investment Income is subject to a cap (the “Incentive Fee Cap”) and a deferral mechanism through which the Advisor may recoup a portion of such deferred incentive fees (collectively, the “Incentive Fee Cap and Deferral Mechanism”).

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To the extent that the payment of incentive fees on Pre-Incentive Fee Net Investment Income is limited by the Incentive Fee Cap, the payment of such fees will be deferred and paid in subsequent calendar quarters up to three years after their date of deferment, subject to certain limitations, which are set forth in the Investment Management Agreement.

Company only pays incentive fees on Pre-Incentive Fee Net Investment Income to the extent allowed by the Incentive Fee Cap and Deferral Mechanism.

The Company only pays incentive fees on Pre-Incentive Fee Net Investment Income to the extent allowed by the Incentive Fee Cap and Deferral Mechanism.

“Cumulative Pre-Incentive Fee Net Return” during any Incentive Fee Look-back Period means the sum of (a) Pre-Incentive Fee Net Investment Income and the base management fee for each calendar quarter during the Incentive Fee Look-back Period and (b) the sum of cumulative realized capital gains and losses, cumulative unrealized capital appreciation and cumulative unrealized capital depreciation during the applicable Incentive Fee Look-back Period.

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During the year ended December 31, 2019, the Advisor waived performance based incentive fees of $1.8 million which the Advisor would have otherwise been paid by the Company.

On March 6, 2018, the Advisor irrevocably waived the receipt of incentive fees related to the amounts previously deferred that it may be entitled to receive under the Investment Management Agreement for the period commencing on January 1, 2018 and ending on December 31, 2018.

Such waived incentive fees are not subject to recoupment.

During the years ended December 31, 2018, the Advisor waived performance based incentive fees of $1.2 million which the Advisor would have otherwise earned.

The net performance based incentive fee expense was $7.1 million, $5.2 million and $5.1 million for the years ended December 31, 2021, 2020 and 2019, respectively.

The incentive fee on Pre-Incentive Fee Net Investment Income was not subject to the Incentive Fee Cap and Deferral Mechanism for the years ended December 31, 2021, 2020 and 2019.

The incentive fee on Pre-Incentive Fee Net Investment Income was subject to the Incentive Fee Cap and Deferral Mechanism for the year ended December 31, 2018, which resulted in $0.2 million of reduced expense and additional net investment income.

The performance based incentive fee payable at December 31, 2021 and 2020 was $2.0 million and $1.0 million, respectively.

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(In thousands)

Equity interest in HSLFI

Total investments

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Biotechnology

Drug Delivery

Medical Device

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Energy Efficiency

Waste Recycling

Healthcare Information and Services

Investment funds

Total investments

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In addition, Arena received 50% of the warrants held by HSLFI or HFI at closing.

As of April 21, 2020, HSLFI is wholly-owned by the Company and the assets and liabilities of HSLFI and HFI will be

consolidated with the assets and liabilities of the Company.

As of April 21, 2020, HSLFI is wholly-owned by the Company and the assets and liabilities of HSLFI and HFI will be consolidated with the assets and liabilities of the Company.

The transaction is accounted for as an asset acquisition under GAAP.

Investments held by HSLFI were measured at fair value using the same valuation methodology as described in Note 6.

As of December 31, 2019, HSLFI had total assets of $48.3 million.

HSLFI’s portfolio consisted of debt investments in eight portfolio companies as of December 31, 2019.

As of December 31, 2019, the largest investment in a single portfolio company in the HSLFI’s portfolio in aggregate principal amount was $11.3 million and the five largest investments in portfolio companies in the HSLFI totaled $30.3 million.

As of December 31, 2019, HSLFI had no investments on non-accrual status.

HSLFI invested in portfolio companies in the same industries in which the Company may directly invest.

The Company invested cash or securities in portfolio companies in HSLFI in exchange for limited liability company equity interests in HSLFI.

As of December 31, 2019, the Company and Arena each owned 50.0% of the equity interests of HSLFI.

The Company had an original commitment to fund $25.0 million of equity interests in HSLFI.

As of December 31, 2019, $9.8 million was unfunded.

The Company’s investment in HSLFI consisted of an equity contribution of $15.2 million as of December 31, 2019.

During the period January 1, 2020 through April 21, 2020, there were no distributions from HSLFI.

During the year ended December 31, 2019, HSLFI distributed $1.4 million.

HFI entered into the NYL Facility with the NYL Noteholders for an aggregate purchase price of up to $100.0 million, with an accordion feature of up to $200.0 million at the mutual discretion and agreement of HSLFI and the NYL Noteholders.

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Prior to June 5, 2020, the interest rate on the notes issued under the NYL Facility was based on the three year USD mid-market swap rate plus a margin of between 2.75% and 3.25% depending on the rating of such notes at the time of issuance.

There were $15.0 million in advances made by the NYL Noteholders as of December 31, 2019 at an interest rate of 4.98%.

The following table shows HSLFI’s investments as of December 31, 2019:

Portfolio Company (1)

Type of Investment (2)(3)(4)

Investments (5)

(Dollars in thousands)

Debt Investments — Life science

Celsion Corporation (6)(7)(8)

Biotechnology

Term Loan (9.63% cash (Libor + 7.63%;

Floor 9.63%), 4.00% ETP, Due 7/1/22)

Term Loan (9.63% cash (Libor + 7.63%;

Floor 9.63%), 4.00% ETP, Due 7/1/22)

Encore Dermatology, Inc.

Biotechnology

Term Loan (10.00% cash (Libor + 7.50%;

Floor 10.00%), 3.00% ETP, Due 4/1/23)

Mustang Bio, Inc.

Biotechnology

Term Loan (9.00% cash (Libor + 6.50%;

Floor 9.00%), 5.00% ETP, Due 10/1/22)

Total Debt Investments — Life science

Debt Investments — Technology

Bridge2 Solutions, LLC (6)(7)

Term Loan (11.00% cash (Libor + 8.4%;

Floor 11.00%), 2.00% ETP, Due 9/1/23)

New Signature US, Inc.

Term Loan (10.50% cash (Libor + 8.50%;

Floor 10.50%), 3.50% ETP, Due 7/1/22)

Term Loan (10.50% cash (Libor + 8.50%;

Floor 10.50%), 3.50% ETP, Due 2/1/23)

OutboundEngine, Inc.

Term Loan (11.15% cash (Libor + 8.40%;

Floor 11.15%), 3.00% ETP, Due 7/1/23)

Revinate, Inc.

Term Loan (9.50% cash (Libor + 7.00%;

Floor 9.50%), 3.00% ETP, Due 6/1/23)

Total Debt Investments — Technology

Debt Investments — Healthcare information and services

HealthEdge Software, Inc.

Term Loan (9.94% cash (Libor + 8.25%;

Floor 9.25%), 3.00% ETP, Due 10/1/23)

Total Debt Investments — Healthcare information and services

Total Debt Investments

Warrant Investments — Life science

Celsion Corporation (6)(7)(8)

Biotechnology

95,057 Common Stock Warrants

Encore Dermatology, Inc.

Biotechnology

503,626 Preferred Stock Warrants

Mustang Bio, Inc.

Biotechnology

72,046 Common Stock Warrants

CSA Medical, Inc.

Medical Device

17,751 Preferred Stock Warrants

Total Warrant Investments — Life science

Warrant Investments — Technology

Intelepeer Holdings, Inc.

Communications

2,081,934 Preferred Stock Warrants

Bridge2 Solutions, LLC (6)(7)

2,500 Common Stock Warrants

BSI Platform Holdings, LLC (6)(7)(9)

562,500 Preferred Stock Warrants

OutboundEngine, Inc.

40,000 Preferred Stock Warrants

Revinate Inc.

216,362 Preferred Stock Warrants

Total Warrant Investments — Technology

Warrant Investments — Healthcare information and services

HealthEdge Software, Inc.

47,418 Preferred Stock Warrants

Total Warrant Investments — Healthcare information and services

Total Warrant Investments

Total Portfolio Investment Assets

Short Term Investments — Unrestricted Investments

US Bank Money Market Deposit Account (6)

Total Short Term Investments — Unrestricted Investments

Short Term Investments — Restricted Money Market Funds

US Bank Money Market Deposit Account (6)

Total Short Term Investments — Restricted Money Market Funds

(1) All investments of HSLFI 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) All interest is payable in cash due monthly in arrears, unless otherwise indicated, and applies only to HSLFI’s debt investments.

Interest rate is the annual interest rate on the debt investment and does not include ETPs and any additional fees related to the investments, such as deferred interest, commitment fees or prepayment fees.

Debt investments are at variable rates for the term of the debt investment, unless otherwise indicated.

All debt investments based on LIBOR are based on one-month LIBOR.

For each debt investment, the current interest rate in effect as of December 31, 2019 is provided.

(3) 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.

(4) Warrants are non-income producing.

(5) For debt investments, represents principal balance less unearned income.

(6) Has been pledged as collateral under the NYL Facility.

(7) The fair value of the investment was valued using significant unobservable inputs.

(8) Portfolio company is a public company.

(9) New Signature US, Inc.

is a subsidiary of BSI Platform Holdings, LLC.

The following tables show certain summarized financial information for HSLFI as of December 31, 2019, for the period January 1, 2020 through April 21, 2020, for the year ended December 31, 2019 and for the period June 1, 2018 through December 31, 2018:

(In thousands)

Selected Statement of Assets and Liabilities Information

Total investments at fair value (cost of $34,895)

Cash and cash equivalents

Investments in money market funds

Restricted investments in money market funds

Interest receivable

Other liabilities

Total liabilities

Members’ equity

Total liabilities and members’ equity

For the period

The following tables show certain summarized financial information for HSLFI for the period January 1, 2020 through April 21, 2020 and for the year ended December 31, 2019:

For the period

2 unchanged sentences

December 31, 2019

December 31, 2018

(In thousands)

Selected Statements of Operations Information

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Decisyon, Inc.

StereoVision, Inc.

MVI (ABC) LLC fka StereoVision, Inc.

Total non-controlled affiliates

(1) As of December 31, 2021, the Company no longer owns 5% or more of the portfolio company.

Transactions related to investments in non-controlled affiliated companies for the year ended December 31, 2020 were as follows:

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Fair value at

Distributions

(In thousands)

Total controlled affiliates

(1) The Company and Arena were the members of HSLFI, a joint venture formed as a Delaware limited liability company that was not consolidated by either member for financial reporting purposes.

The members provided cash or securities in portfolio companies to HSLFI in exchange for limited liability company equity interests.

All HSLFI investment decisions required unanimous approval of a quorum of HSLFI’s board of managers, which consisted of two representatives of the Company and Arena.

Because management of HSLFI was shared equally between the Company and Arena, the Company did not have sole control over significant actions of HSLFI for purposes of the 1940 Act or otherwise.

On April 21, 2020, the Company purchased all of the limited liability company interests of Arena in HSLFI.

As of December 31, 2020, HLSFI is consolidated by the Company.

Transactions related to investments in controlled affiliated companies for the year ended December 31, 2020 were as follows:

2 unchanged sentences

Fair value at

Distributions

(In thousands)

4 unchanged sentences

Because management of HSLFI was shared equally between the Company and Arena, the Company did not have sole control over significant actions of HSLFI for purposes of the 1940 Act or otherwise.

On April 21, 2020, the Company purchased all of the limited liability company interests of Arena in HSLFI.

As of December 31, 2020, HLSFI is consolidated by the Company.

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures.

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In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques.

Those techniques are significantly affected by the assumptions used, including the discount rate and estimates

of future cash flows.

Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows.

Accordingly, the fair value estimates may not be realized in an immediate settlement of the asset or liability.

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At December 31, 2021 and 2020, the hypothetical market yields used ranged from 3% to 23% and 10% to 23%, respectively.

Significant increases (decreases) in this unobservable input would result in a significantly

lower (higher) fair value measurement.

Significant increases (decreases) in this unobservable input would result in a significantly lower (higher) fair value measurement.

These assets are recorded at fair value on a recurring basis and are categorized as Level 3 within the fair value hierarchy described above.

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The Company currently values these contractual agreements using a multiple probability weighted cash flow model as the contractual future cash flows contain elements of variability.

Significant changes in the estimated cash flows

and probability weightings would result in a significantly higher or lower fair value measurement.

Significant changes in the estimated cash flows and probability weightings would result in a significantly higher or lower fair value measurement.

The Company has categorized these other investments as Level 3 within the fair value hierarchy described above.

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The following tables provide a summary of quantitative information about the Company’s Level 3 fair value measurements of its investments as of December 31, 2021 and 2020.

In addition to the techniques and inputs noted in the table below, according to the Company’s valuation policy, the Company may also use other valuation techniques and methodologies when determining its fair value measurements.

In addition to the techniques and inputs noted in the

table below, according to the Company’s valuation policy, the Company may also use other valuation techniques and methodologies when determining its fair value measurements.

The following table is not intended to be all-inclusive, but rather provides information on the significant Level 3 inputs as they relate to the Company’s fair value measurements as of December 31, 2021:

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Hypothetical Market Yield

Liquidation Scenario

Multiple Probability Weighted Cash Flow Model

Probability Weighting

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Estimated Time to Exit

Estimated Proceeds

Price Per Share

Other investments

2 unchanged sentences

Probability Weighting

Liquidation Scenario

Probability Weighting

Equity investments

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Probability Weighting

Multiple Probability Weighted Cash Flow Model

Probability Weighting

Warrant investments

5 unchanged sentences

Estimated Time to Exit

Price Per Share

$6.22 – $12.90

Estimated Proceeds

Discount Rate

Price Per Share

Other investments

2 unchanged sentences

Probability Weighting

Liquidation Scenario

Probability Weighting

Equity investments

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Therefore, the Company has categorized this borrowing as Level 1 within the fair value hierarchy described above.

Based on market quotations on December 31, 2020, the Asset-Backed Notes (as defined in Note 7) were trading at par value, or $100.0 million, and are categorized as Level 3 within the fair value hierarchy described above.

Based on market quotations on December 31, 2021, the Asset-Backed Notes (as defined in Note 7) were trading at par value, or $70.5

million, and are categorized as Level 3 within the fair value hierarchy described above.

These borrowings are not recorded at fair value on a recurring basis.

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Equity investments

Equity interest in HSLFI (1)

Total investments

(1) The fair value of Company’s equity interest in HSLFI is determined using the net asset value of the Company’s ownership interest in member’s capital.

The following table shows a reconciliation of the beginning and ending balances for Level 3 assets measured at fair value on a recurring basis for the year ended December 31, 2021:

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Net realized (loss) gain on investments

Unrealized (depreciation) appreciation included in earnings

Transfer of investment

Unrealized appreciation (depreciation) included in earnings

Transfer out of Level 3

Level 3 assets, end of period

During the year ended December 31, 2020, there were no transfers in or out of Level 3.

The change in unrealized appreciation included in the consolidated statement of operations attributable to Level 3 investments still held at December 31, 2020 includes $6.5 million in unrealized depreciation on debt and other investments, $5.0 million in unrealized appreciation on warrant investments and $1.0 million in unrealized depreciation on equity investments.

During the year ended December 31, 2021, there were three transfers out of Level 3.

One transfer out of Level 3 related to warrants held in one portfolio company with an aggregate fair value of $0.1 million that was transferred to Level

2 upon the portfolio company becoming a public company.

One transfer out of Level 3 related to equity held in one portfolio company with an aggregate fair value of $0.1 million that was transferred to Level 1 upon the portfolio company becoming a public company.

One transfer out of Level 3 related to equity held in one portfolio company with an aggregate fair value of $0.2 million that was transferred to Level 1 upon the portfolio company being acquired by a public company.

The change in unrealized appreciation included in the consolidated statement of operations attributable to Level 3 investments still held at December 31, 2021 includes $5.6 million in unrealized depreciation on debt and other investments and $6.3 million in unrealized appreciation on warrant investments.

The following table shows a reconciliation of the beginning and ending balances for Level 3 assets measured at fair value on a recurring basis for the year ended December 31, 2020:

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Proceeds from sale of investments

Net realized gain (loss) on investments

Net realized (loss) gain on investments

Unrealized (depreciation) appreciation included in earnings

Transfer out of Level 3

Transfer of investment

Level 3 assets, end of period

During the year ended December 31, 2019, there was one transfer out of Level 3.

The transfer out of Level 3 related to warrants held in one portfolio company with an aggregate fair value of $0.2 million that was transferred to Level 2 upon the portfolio company becoming a public company.

During the year ended December 31, 2019, there were no transfers to Level 3.

The change in unrealized appreciation included in the consolidated statement of operations attributable to Level 3 investments still held at December 31, 2019 includes $3.1 million in unrealized depreciation on debt and other investments, $1.0 million in unrealized appreciation on warrant investments and $1.6 million in unrealized appreciation on equity investments.

During the year ended December 31, 2020, there were no transfers in or out of Level 3.

The Company discloses fair value information about financial instruments, whether or not recognized in the consolidated statement of assets and liabilities, for which it is practicable to estimate that value.

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Total borrowings outstanding, net

On March 23, 2018, the Small Business Credit Availability Act was signed into law as part of an omnibus spending bill, which, among other things, amends the 1940 Act to reduce the minimum required asset coverage applicable to BDCs under the 1940 Act from 200% to 150% if certain approval and disclosure requirements are met.

Before such reduced asset coverage requirement can apply to the Company, such reduced asset coverage requirement must be approved by either (a) a “required majority” (as defined in Section 57(o) of the 1940 Act) of the Board, in which case such reduced asset coverage requirement would take effect on the first anniversary of the date of such Board approval, or (b) a majority of votes cast by the stockholders of the Company at a special or annual meeting at which a quorum is present, in which case such reduced asset coverage requirement shall take effect on the day after such approval.

On June 7, 2018, a “required majority” of the Board approved the reduced asset coverage requirements and separately recommended that the Company’s stockholders approve the reduced asset coverage requirements at a special meeting of the Company’s stockholders.

The Company held a special meeting on October 30, 2018 during which the reduced asset coverage requirements were approved by stockholders.

The reduced asset coverage requirements took effect October 31, 2018.

As of December 31, 2021, with certain limited exceptions, as a BDC, the Company is only allowed to borrow amounts such that the Company’s asset coverage, as defined in the 1940 Act, is at least 150% after such borrowings.

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The Company entered into the Key Facility with Key effective November 4, 2013.

On June 29, 2020, the Company amended the Key Facility, among other things, to amend the LIBOR floor from 0.75% to 1.00% and to extend the revolving period to September 30, 2021.

On June 22, 2021, the Company amended the Key Facility, among other things, to amend the interest rate applied to the outstanding principal balance and to extend the revolving period to June 22, 2024.

The Key Facility has an accordion feature which allows for an increase in the total loan commitment to $150 million from the $125 million commitment.

1 unchanged sentence

The Key Facility contains covenants that, among other things, require the Company to maintain a minimum net worth and to restrict the debt investments securing the Key Facility to certain criteria for qualified debt investments and includes portfolio company concentration limits as defined in the related loan agreement.

The Key Facility is scheduled to mature on April 6, 2023.

The interest rate is based upon the one-month LIBOR, plus a spread of 3.25%, with a LIBOR floor of 1.00%.

The LIBOR rate was 0.14% and 1.76% on December 31, 2020 and 2019, respectively.

The Key Facility is scheduled to mature on June 22, 2026.

Through June 21, 2021, the interest rate on the Key Facility was based upon the one-month LIBOR plus a spread of 3.25%, with a LIBOR floor of 1.00%.

The LIBOR rate was 0.14% as of December 31, 2020.

From and after June 30, 2021, the interest rate on the Key Facility is based on the rate of interest published in The Wall Street Journal as the prime rate in the United States plus 0.25%, with a prime rate floor of 4.25%.

The prime rate was 3.25% on December 31, 2021.

The average interest rate for the years ended December 31, 2021 and 2020 was 4.25% and 4.38%, respectively.

3 unchanged sentences

On September 29, 2017, the Company issued and sold an aggregate principal amount of $32.5 million of 6.25% notes due in 2022 and on October 11, 2017, pursuant to the underwriters’ 30 day option to purchase additional notes, the Company sold an additional $4.9 million of such notes (collectively, the “2022 Notes”).

The 2022 Notes have a stated maturity of September 15, 2022 and may be redeemed in whole or in part at the Company’s option at any time or from time to time on or after September 15, 2019 at a redemption price of $25 per security plus accrued and unpaid interest.

The 2022 Notes had a stated maturity of September 15, 2022 and were redeemable in whole or in part at the Company’s option at any time or from time to time on or after September 15, 2019 at a redemption price of $25 per security plus accrued and unpaid interest.

The 2022 Notes bore interest at a rate of 6.25% per year, payable quarterly on March 15, June 15, September 15 and December 15 of each year.

The 2022 Notes were the Company’s direct unsecured obligations and (i) ranked equally in right of payment with the Company’s current and future unsecured indebtedness;

(ii) were senior in right of payment to any of the Company’s future indebtedness that expressly provides it is subordinated to the 2022 Notes;

(iii) were effectively subordinated to all of the Company’s existing and future secured indebtedness (including indebtedness that is initially unsecured to which the Company subsequently grants security), to the extent of the value of the assets securing such indebtedness, and (iv) were structurally subordinated to all existing and future indebtedness and other obligations of any of the Company’s subsidiaries.

On April 24, 2021 (the “Redemption Date”), the Company redeemed all of the issued and outstanding 2022 Notes in an aggregate principal amount of $37.4 million and paid accrued interest of $0.3 million.

The Company accelerated $0.4 million of unamortized debt issuance costs related to the 2022 Notes.

The 2022 Notes were delisted effective on the Redemption Date.

On March 30, 2021, the Company issued and sold an aggregate principal amount of $57.5 million of 4.875% notes due in 2026 (the “2026 Notes”).

The amount of 2026 Notes issued and sold included the full exercise by the underwriters of their option to purchase $7.5 million aggregate principal of additional notes.

The 2026 Notes have a stated maturity of March 30, 2026 and may be redeemed in whole or in part at the Company’s option at any time or from time to time on or after March 30, 2023 at a redemption price of $25 per security plus accrued and unpaid interest.

The 2026 Notes bear interest at a rate of 4.875% per year, payable quarterly on March 30, June 30, September 30 and December 30 of each year.

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As of December 31, 2021, the Company was in material compliance with the terms of the 2026 Notes.

The 2022 Notes are listed on the New York Stock Exchange under the symbol “HTFA”.

The 2026 Notes are listed on the New York Stock Exchange under the symbol “HTFB”.

On August 13, 2019, the Company completed a term debt securitization in connection with which an affiliate of the Company made an offering of the Asset-Backed Notes.

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The reinvestment period of the Asset-Backed Notes ends July 15, 2021 and the maturity is September 15, 2027.

As of December 31, 2020 and 2019, the Asset-Backed Notes had an outstanding principal balance of $100.0 million.

As of December 31, 2021 and 2020, the Asset-Backed Notes had an outstanding principal balance of $70.5 million and $100.0 million, respectively.

Under the terms of the Asset-Backed Notes, the Company is required to maintain a reserve cash balance, funded through proceeds from the sale of the Asset-Backed Notes, which may be used to pay monthly interest and principal payments on the Asset-Backed Notes.

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On June 1, 2018, HSLFI sold or contributed to HFI certain secured loans made to certain portfolio companies pursuant to the Sale and Servicing Agreement.

Any notes issued by HFI are collateralized by all

investments held by HFI and permit an advance rate of up to 67% of the aggregate principal amount of eligible debt investments.

Any notes issued by HFI are collateralized by all investments held by HFI and permit an advance rate of up to 67% of the aggregate principal amount of eligible debt investments.

The notes were issued pursuant to the Indenture.

On June 5, 2020, the Company amended the NYL Facility to extend the investment period to June 5, 2022.

The investment period will be followed by a five year amortization period.

The stated final payment date was extended to June 15, 2027, subject to any extension of the investment period.

On June 5, 2020, the Company amended the NYL Facility to extend the investment period to June 5, 2022 which will be followed by a five year amortization period.

In addition, the stated final payment date was extended to June 15, 2027, subject to any extension of the investment period.

The interest rate on the notes issued under the NYL Facility is based on the three year USD mid-market swap rate plus a margin of between 3.55% and 5.15% with an interest rate floor, depending on the rating of such notes at the time of issuance.

Any obligation to make additional advances was conditioned on the occurrence of certain conditions, which were satisfied June 26, 2020.

There were $78.8 million in advances made by the NYL Noteholders as of December 31, 2021 at an interest rate of 4.62%.

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Net increase in net assets resulting from operations

Net unrealized (appreciation) depreciation on investments

Net unrealized appreciation on investments

Other book-tax differences

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For the years ended December 31, 2021 and 2020, the Company elected to carry forward taxable income in excess of current year distributions of $10.8 million and $6.2 million, respectively.

At December 31, 2020 and 2019, a provision for excise tax of $0.2 million was recorded.

At December 31, 2021 and 2020, a provision for excise tax of $0.4 million and $0.2 million, respectively was recorded.

Capital losses in excess of capital gains earned in a tax year may generally be carried forward, without expiration, and used to offset capital gains, subject to certain limitations.

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The balance of unfunded commitments to extend credit was $114.5 million and $91.5 million as of December 31, 2021 and 2020, respectively.

Commitments to extend credit consist principally of the unused portions of commitments that obligate the Company to extend credit, such as revolving credit arrangements or similar transactions.

Commitments to extend credit consist principally of the unused portions of commitments that

obligate the Company to extend credit, such as revolving credit arrangements or similar transactions.

These commitments are often subject to financial or non-financial milestones and other conditions to borrow that must be achieved before the commitment can be drawn.

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Alula Holdings Inc.

Better Place Forests Co.

CAMP NYC, Inc.

Canary Medical Inc.

Castle Creek Biosciences, Inc.

Ceribell, Inc.

DropOff, Inc.

E La Carte, Inc.

Emalex Biosciences, Inc.

Getaround, Inc.

Greenlight Biosciences, Inc.

IDbyDNA, Inc.

Keypath Education Holdings, LLC

LogicBio, Inc.

Provivi, Inc.

Revinate, Inc.

Interior Define, Inc.

Liquiglide, Inc.

NextCar Holding Company, Inc.

Sonex Health, Inc.

Topia Mobility Inc.

Spineology Inc.

Stealth BioTherapeutics Inc.

The table above also provides the fair value of the Company’s unfunded commitment liability as of December 31, 2021 which totaled $1.6 million.

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The Company’s largest debt investments may vary from year to year as new debt investments are recorded and existing debt investments are repaid.

The Company’s five largest debt investments, at cost, represented 28% of total debt investments outstanding as of December 31, 2020 and 2019.

The Company’s five largest debt investments, at cost, represented 26% and 28% of total debt investments outstanding as of December 31, 2021 and 2020, respectively.

No single debt investment represented more than 10% of the total debt investments as of December 31, 2021 or 2020.

Investment income, consisting of interest and fees, can fluctuate significantly upon repayment of large debt investments.

Investment income, consisting of interest

and fees, can fluctuate significantly upon repayment of large debt investments.

Interest income from the five largest debt investments accounted for 17%, 23% and 17% of total interest and fee income on investments for the years ended December 31, 2021, 2020 and 2019, respectively.

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Subsequent events

Subsequent to December 31, 2020 pursuant to private foreclosure sales, the Company has received net proceeds of approximately $1.7 million from the sale of substantially all of the assets of The NanoSteel Company, Inc.

(“NanoSteel”), which assets collateralized the Company’s debt investment in NanoSteel.

The Company does not expect to receive any additional material proceeds from the sale of additional assets of NanoSteel.

On January 14, 2021, the Company funded a $5.0 million debt investment to a new portfolio company, Clara Foods Co.

On January 15, 2021, the Company funded a $7.0 million debt investment to a new portfolio company, Supply Network Visibility Holdings LLC.

On February 23, 2021, the Company funded a $7.0 million debt investment to an existing portfolio company, Getaround, Inc.

On February 25, 2021, the Company funded a $6.0 million debt investment to a new portfolio company, Primary Kids, Inc.

On January 7, 2022, we funded a $1.3 million debt investment to an existing portfolio company, Unagi Inc.

On January 21, 2022, we funded a $7.5 million debt investment to a new portfolio company, Cognoa, Inc.

On January 26, 2022, we funded a $5.0 million debt investment to an existing portfolio company, Castle Creek Biosciences, Inc.

On January 28, 2022, we funded a $1.0 million debt investment to an existing portfolio company, Alula Holdings, Inc.

On February 1, 2022, we funded a $2.5 million debt investment to an existing portfolio company, Dropoff, Inc.

On February 7, 2022, we funded a $5.0 million debt investment to an existing portfolio company, Canary Medical Inc.

On February 10, 2022, we funded a $7.5 million debt investment to a new portfolio company, Lemongrass Holdings, Inc.

On February 11, 2022, Quip NYC Inc.

prepaid its outstanding principal balance of $10.0 million on its venture loan, plus interest, end-of-term payment and prepayment fee.

The Company continues to hold warrants in Quip NYC Inc.

On February 23, 2022, we funded a $2.5 million debt investment to an existing portfolio company, NextCar Holding Company, Inc.

On February 24, 2022, LiquiGlide, Inc.

prepaid its outstanding principal balance of $2.0 million on its venture loan, plus interest, end-of-term payment and prepayment fee.

The Company continues to hold warrants in Liquiglide, Inc.

On February 25, 2022, the Company amended its NYL Facility, increasing the commitment by $100 million to enable its wholly-owned subsidiary to issue up to $200 million of secured notes.

The amendment to the facility extends the investment period to June 2023 and the maturity date to June 2028.

In addition, the amendment, among other things, reduces the applicable margin used to calculate the credit facility’s interest rate on the Company’s borrowings above $100 million.

Such borrowings will be priced at the three-year USD mid-market swap rate plus 3.00%.

Financial highlights

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Net investment income

Realized (loss) gain on investments

Realized (loss) gain

Unrealized appreciation (depreciation) on investments

Net increase (decrease) in net assets resulting from operations

Net increase in net assets resulting from operations

Distributions declared (1)

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Return of capital

Net accretion from repurchase of common stock

Net asset value at end of period

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Shares outstanding at end of period

Ratios, net of waivers, to average net assets:

Ratios to average net assets:

Expenses without incentive fees

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Ratios, without waivers, to average net assets:

Expenses without incentive fees (4)

Expenses without incentive value (4)

Incentive fees (4)

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(2) Includes the impact of the different share amounts as a result of calculating per share data based on the weighted average basic shares outstanding during the period and certain per share data based on the shares outstanding as of a period end or transaction date.

The issuance of common stock on a per share basis reflects the incremental net asset value changes as a result of the issuance of common stock in the Company’s continuous public offering and pursuant to the Company’s distribution reinvestment plan.

The issuance of common stock at an offering price, net of sales commissions and dealer manager fees, that is greater than the net asset value per share results in an increase in net asset value per share.

(3) The total return equals the change in the ending market value over the beginning of period price per share plus distributions paid per share during the period, divided by the beginning price.

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Horizon Secured Loan Fund I

Statements of Assets and Liabilities

(Dollars in thousands)

Investments at fair value (cost of $34,895)

Investments in money market funds

Cash and cash equivalents

Restricted investments in money market funds

Interest receivable

Other liabilities

Total liabilities

Commitments and contingencies

Members’ Capital

Members’ capital

Total members’ capital

Total liabilities and members’ capital

Horizon Secured Loan Fund I

Statements of Operations

1 unchanged sentence

For the period

January 1, 2020

14 unchanged sentences

Net (decrease) increase in net assets resulting from operations

Selected quarterly financial data (unaudited)

September 30,

(In thousands, except per share data)

Total investment income

Net investment income

Net realized and unrealized (loss) gain

Net increase (decrease) in net asset resulting from operations

Net investment income per share (1)

Net increase (decrease) in net assets per share (1)

Net asset value per share at period end (2)

September 30,

(In thousands, except per share data)

Total investment income

Net investment income

Net realized and unrealized gain (loss)

Net increase in net asset resulting from operations

Net investment income per share (1)

Net increase in net assets per share (1)

Net asset value per share at period end (2)

(1) Based on weighted average shares outstanding for the respective period.

(2) Based on shares outstanding at the end of the respective period.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk