Horizon Technology Finance Corp Files 2023 Annual Report

TL;DR

<b>Horizon Technology Finance Corp filed its 2023 10-K, reporting $759M in assets and $28.7M in net income.</b>

AI Summary

Horizon Technology Finance Corp (HTFC) filed a Annual Report (10-K) with the SEC on February 27, 2024. Horizon Technology Finance Corp reported total assets of $759,182,000 as of December 31, 2023. Total debt for Horizon Technology Finance Corp was $33,367,389 as of December 31, 2023. Net income for the period was $28,677,000. Earnings per share (EPS) was $4.60 for the period. The company's debt-to-equity ratio was 0.215.

Why It Matters

For investors and stakeholders tracking Horizon Technology Finance Corp, this filing contains several important signals. The filing provides a comprehensive overview of the company's financial health and operational performance for the fiscal year 2023. Investors can analyze key financial metrics, risk factors, and strategic decisions to assess the company's future prospects.

Risk Assessment

Risk Level: medium — Horizon Technology Finance Corp shows moderate risk based on this filing. The company's financial performance is subject to market fluctuations and the specific risks associated with technology lending, as detailed in the risk factors section.

Analyst Insight

Review the detailed financial statements and risk factors in the 10-K to understand Horizon Technology Finance Corp's performance and outlook.

Key Numbers

• 759,182,000 — Total Assets (As of December 31, 2023)
• 721,248,000 — Total Assets (Previous Period) (As of December 31, 2022)
• 28,677,000 — Net Income (For the year ended December 31, 2023)
• 4.60 — EPS (For the year ended December 31, 2023)
• 0.215 — Debt/Equity Ratio (As of December 31, 2023)
• 33,367,389 — Total Debt (As of December 31, 2023)
• 27,753,373 — Total Debt (Previous Period) (As of December 31, 2022)
• 214.2 — Operating Margin % (For the year ended December 31, 2023)

Key Players & Entities

• Horizon Technology Finance Corp (company) — Filer
• 2023-12-31 (date) — Fiscal Year End
• 2024-02-27 (date) — Filing Date
• 312 FARMINGTON AVENUE (address) — Business Address
• FARMINGTON (location) — Business Address City
• CT (location) — Business Address State
• 06032 (postal_code) — Business Address Zip
• 860-676-8654 (phone_number) — Business Phone

FAQ

Risk Factors

• Investment Portfolio Risks [high — financial]: The company's investments in debt and equity securities are subject to various risks, including credit risk, interest rate risk, and market risk.
• Economic and Market Conditions [medium — market]: Adverse economic conditions or downturns in the technology sector could negatively impact the company's portfolio companies and its own financial results.
• Regulatory Changes [medium — regulatory]: Changes in regulations applicable to business development companies (BDCs) or the investment industry could affect the company's operations and profitability.
• Dependence on Advisor [medium — operational]: The company relies heavily on its investment advisor for investment origination, due diligence, and portfolio management.

Key Financial Figures

• $0.001 — ich registered Common Stock, par value $0.001 per share HRZN The Nasdaq Stock Mar
• $12.08 — ed on the closing price on that date of $12.08 on the Nasdaq Global Select Market was
• $37.4 million — L Facility; "2022 Notes" refers to the $37.4 million aggregate principal amount of our 6.25%
• $57.5 million — l 24, 2021; "2026 Notes" refers to the $57.5 million aggregate principal amount of our 4.875
• $160.0 million — ; "20191 Securitization" refers to the $160.0 million securitization of secured loans we comp
• $100.0 million — 9; "2019 Asset-Backed Notes" refers to $100.0 million in aggregate principal amount of fixed
• $157.8 million — ; "20221 Securitization" refers to the $157.8 million securitization of secured loans we comp
• $100.00 million — es, the "Asset-Backed Notes") refers to $100.00 million in aggregate principal amount of fixed
• $100 — t coverage of 150% means that for every $100 of net assets a BDC holds, it may raise
• $200 — assets a BDC holds, it may raise up to $200 from borrowing and issuing senior secur
• $2.4 billion — ed 257 portfolio companies and invested $2.4 billion in debt investments. As of December 31,
• $670.2 million — stments with an aggregate fair value of $670.2 million. As of December 31, 2023, 86.3%, or $57
• $578.7 m — ion. As of December 31, 2023, 86.3%, or $578.7 million, of our debt investment portfolio
• $153.1 m — ans. As of December 31, 2023, 22.8%, or $153.1 million, of our total debt investment por
• $324.0 m — December 31, 2023, our net assets were $324.0 million, and all of our debt investments

Filing Documents

• hrzn20231231_10k.htm (10-K) — 8752KB
• ex_600552.htm (EX-4.7) — 136KB
• ex_600554.htm (EX-21) — 3KB
• ex_600555.htm (EX-23) — 3KB
• ex_600556.htm (EX-31.1) — 9KB
• ex_600557.htm (EX-31.2) — 9KB
• ex_600558.htm (EX-32.1) — 5KB
• ex_600559.htm (EX-32.2) — 4KB
• ex_627234.htm (EX-97.1) — 36KB
• hrzn20221231_10kimg001.jpg (GRAPHIC) — 5KB
• htfheader01.jpg (GRAPHIC) — 3KB
• ippimg.jpg (GRAPHIC) — 49KB
• 0001437749-24-005719.txt (&nbsp;) — 37411KB
• hrzn-20231231.xsd (EX-101.SCH) — 117KB
• hrzn-20231231_cal.xml (EX-101.CAL) — 37KB
• hrzn-20231231_def.xml (EX-101.DEF) — 589KB
• hrzn-20231231_lab.xml (EX-101.LAB) — 554KB
• hrzn-20231231_pre.xml (EX-101.PRE) — 632KB
• hrzn20231231_10k_htm.xml (XML) — 12818KB

Business

Business 4 Item 1A.

Risk Factors

Risk Factors 26 Item 1B. Unresolved Staff Comments 63 Item 1C. Cybersecurity 63 Item 2.

Properties

Properties 64 Item 3.

Legal Proceedings

Legal Proceedings 64 Item 4. Mine Safety Disclosures 64 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 64 Item 6. [Reserved] 68 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 69 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 85 Item 8. Consolidated Financial Statements and Supplementary Data 86 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 134 Item 9A.

Controls and Procedures

Controls and Procedures 134 Item 9B. Other Information 135 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 135 PART III Item 10. Directors, Executive Officers and Corporate Governance 135 Item 11.

Executive Compensation

Executive Compensation 135 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 135 Item 13. Certain Relationships and Related Transactions, and Director Independence 135 Item 14. Principal Accounting Fees and Services 135 PART IV Item 15. Exhibits, Financial Statement Schedules 136

Signatures

Signatures 141 2 Table of Contents PART I In this annual report on Form 10 K, except where the context suggests otherwise, the terms: "we," "us," "our," "the Company" and "Horizon Technology Finance" refer to Horizon Technology Finance Corporation, a Delaware corporation, and its consolidated subsidiaries; The "Advisor" and the "Administrator" refer to Horizon Technology Finance Management LLC, a Delaware limited liability company; "Credit II" refers to Horizon Credit II LLC, a Delaware limited liability company, which is a special purpose bankruptcy remote entity and our direct subsidiary; "HFI" refers to Horizon Funding I, LLC, a Delaware limited liability company, which is a special purpose bankruptcy remote entity and a wholly-owned subsidiary of HSLFI, our wholly-owned subsidiary; "Key" refers to KeyBank National Association and "Key Facility" refers to the revolving credit facility with Key; "NYL Noteholders" refers to several entities owned or affiliated with New York Life Insurance Company and "NYL Facility" refers to the credit facility where the notes are issued to the NYL Noteholders; "Credit Facilities" refers to collectively the Key Facility and the NYL Facility; "2022 Notes" refers to the $37.4 million aggregate principal amount of our 6.25% unsecured notes due 2022, which were issued by us in September and October 2017 and redeemed by us on April 24, 2021; "2026 Notes" refers to the $57.5 million aggregate principal amount of our 4.875% unsecured notes due 2026, which were issued by us in March 2021; "2027 Notes" (collectively with the 2026 Notes, "Debt Securities") refers to the $57.5 million aggregate principal amount of our 6.25% unsecured notes due 2027, which were issued by us on June 15, 2022 and July 11, 2022; "20191 Securitization" refers to the $160.0 million securitization of secured loans we completed on August 13, 2019; "2019 Asset-Backed Notes" refers to $100.0 million in aggregate principal amount of fixed rate asse

Business

Item 1. Business General We are a specialty finance company that lends to and invests in development-stage companies in the technology, life science, healthcare information and services and sustainability industries, which we refer to as our "Target Industries." Our investment objective is to maximize our investment portfolio's total return by generating current income from the debt investments we make and capital appreciation from the warrants we receive when making such debt investments. We are focused on making secured debt investments, which we refer to as "Venture Loans," to venture capital and private equity backed companies and publicly traded companies in our Target Industries, which we refer to as "Venture Lending." Our debt investments are typically secured by first liens or first liens behind a secured revolving line of credit, or collectively, "Senior Term Loans." Some of our debt investments may also be subordinated to term debt provided by third parties. Venture Lending is typically characterized by (1) the making of a secured debt investment after a venture capital or equity investment in the portfolio company has been made, which investment provides a source of cash to fund the portfolio company's debt service obligations under the Venture Loan, (2) the senior priority of the Venture Loan which requires repayment of the Venture Loan prior to the equity investors realizing a return on their capital, (3) the amortization of the Venture Loan and (4) the lender's receipt of warrants or other success fees with the making of the Venture Loan. We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company, or BDC, under the Investment Company Act of 1940, as amended, or the 1940 Act. In addition, for U.S. federal income tax purposes, we have elected to be treated as a regulated investment company, or RIC, under Subchapter M of the Internal Revenue Code of 1986,

View Full Filing

View this 10-K filing on SEC EDGAR