Horizon Technology Finance Announces First Quarter 2026 Financial Results
Key Terms
net investment income financial
net asset value financial
payment-in-kind interest financial
warrants financial
convertible notes financial
senior secured debt facility financial
asset coverage ratio financial
spillover income financial
- Successfully Completed Merger with Monroe Capital Corporation in April -
- First Quarter 2026 Net Investment Income per Share of
- Debt Portfolio Yield of
- Ends Quarter with Committed Backlog of
First Quarter 2026 and Recent Highlights
-
In April, successfully completed merger with Monroe Capital Corporation (“MRCC”), receiving approximately
$141.1 million - Created a new joint venture, RoHo Capital Opportunity Fund LLC, with CR Financial Holdings, Inc., the holding company for Roth Capital Partners, LLC (“Roth”)
-
Net investment income (“NII”) of
$9.0 million $0.19 $10.7 million $0.27 -
Total investment portfolio of
$695.7 million -
Net asset value of
$333.9 million $6.98 -
Annualized portfolio yield on debt investments of
15.2% for the quarter -
Funded five loans totaling
$120.0 million - Experienced liquidity events from two portfolio companies
-
Cash of
$73.3 million $284.0 million - Held portfolio of warrant and equity positions in 91 companies as of March 31, 2026
-
Undistributed spillover income of
$0.52 -
Subsequent to quarter end, declared regular cash distributions of
$0.06 $0.03
“We are thrilled to have successfully completed our merger with MRCC and are excited to accelerate the next chapter of Horizon,” said Mike Balkin, Chief Executive Officer of Horizon. “Strengthened by the infusion of significant new capital from the merger, as well as the backing of Monroe Capital’s resources, expertise and ability to participate in larger-size, high-quality originations, we expect our efforts to compete and win attractive debt investment opportunities will result in strong portfolio and pipeline growth. We also are excited to jumpstart the RoHo JV with Roth as our partner. RoHo offers the venture market another compelling option for growth financing and will help contribute to growth in our portfolio and pipeline.”
“For the quarter, we were pleased to grow our portfolio for the second consecutive quarter, while delivering NII that exceeded our distributions and experiencing stable credit,” added Mr. Balkin. “Moving forward, with a strengthened balance sheet and robust pipeline, we believe we are in an excellent position to execute on our growth strategy, to continue as a leading financial partner to the innovation economy and ultimately to drive long-term value creation for shareholders.”
First Quarter 2026 Operating Results
Total investment income for the quarter ended March 31, 2026 was
The Company’s dollar-weighted annualized yield on average debt investments for the quarter ended March 31, 2026 and 2025 was
Total expenses for the quarter ended March 31, 2026 were
Net investment income for the quarter ended March 31, 2026 was
For the quarter ended March 31, 2026, net realized loss on investments was
For the quarter ended March 31, 2026, net unrealized depreciation on investments was
Portfolio Summary and Investment Activity
As of March 31, 2026, the Company’s debt portfolio consisted of 41 secured loans with an aggregate fair value of
($ in thousands) |
For the Three Months Ended
|
|||
|
2026 |
2025 |
||
Beginning portfolio |
$ |
647,244 |
$ |
697,891 |
|
|
|
||
New debt and equity investments |
|
120,004 |
|
102,439 |
|
|
|
||
Less refinanced debt balances |
|
(30,000) |
|
(28,750) |
|
|
|
||
Net new debt and equity investments |
|
90,004 |
|
73,689 |
|
|
|
||
Principal payments received on investments |
|
(4,884) |
|
(11,171) |
|
|
|
||
Early pay-offs and principal paydowns |
|
(33,164) |
|
(39,574) |
|
|
|
||
Payment-in-kind interest on investments |
|
1,278 |
|
285 |
|
|
|
||
Accretion of debt investment fees |
|
1,619 |
|
1,388 |
|
|
|
||
New debt investment fees |
|
(1,585) |
|
(804) |
|
|
|
||
Warrants received in settlement of fee income |
|
— |
|
5 |
Proceeds from sale of investments |
|
(104) |
|
(1) |
|
|
|
||
Net realized (loss) gain on investments |
|
(161) |
|
1 |
Net unrealized depreciation on investments |
|
(4,600) |
|
(32,156) |
|
|
|
||
Other |
|
50 |
|
— |
|
|
|
||
Ending portfolio |
$ |
695,697 |
$ |
689,553 |
Portfolio Asset Quality
The following table shows the classification of Horizon’s loan portfolio at fair value by internal credit rating as of March 31, 2026 and December 31, 2025:
($ in thousands) |
March 31, 2026 |
|
December 31, 2025 |
||||||
|
Number of
|
Debt Investments
|
Percentage
|
|
Number of
|
Debt Investments
|
Percentage
|
||
Credit
|
|
|
|
|
|
|
|
||
4 |
5 |
$ |
71,009 |
|
|
5 |
$ |
72,213 |
|
3 |
28 |
|
500,119 |
|
|
25 |
|
445,790 |
|
2 |
4 |
|
50,208 |
|
|
4 |
|
53,503 |
|
1 |
4 |
|
24,293 |
|
|
4 |
|
24,519 |
|
Total |
41 |
$ |
645,629 |
|
|
38 |
$ |
596,025 |
|
As of March 31, 2026 and December 31, 2025, Horizon’s loan portfolio had weighted average credit ratings of 3.0 and 2.9, respectively, with 4 being the highest credit quality rating and 3 being the rating for a standard level of risk. A rating of 2 represents an increased level of risk and, while no loss is currently anticipated for a 2-rated loan, there is potential for future loss of principal. A rating of 1 represents deteriorating credit quality and high degree of risk of loss of principal.
As of March 31, 2026, there were four debt investments with an internal credit rating of 1, with an aggregate cost of
Liquidity and Capital Resources
As of March 31, 2026, the Company had
As of March 31, 2026, there was
As of March 31, 2026, there was
Additionally, as of March 31, 2026, there was
On October 17, 2024, the Company entered into a note purchase agreement, by and among the Company, and each purchaser named therein, in connection with the issuance and sale of
On September 4, 2025, the Company entered into a note purchase agreement, by and among the Company, and each purchaser named therein, in connection with the issuance and sale of
As of March 31, 2026, the Company’s net debt to equity leverage ratio was
Liquidity Events
During the quarter ended March 31, 2026, Horizon experienced liquidity events from two portfolio companies. Liquidity events for Horizon may consist of the sale of warrants or equity in portfolio companies, loan prepayments, sale of owned assets or receipt of success fees.
In March, with the proceeds of a new loan from HRZN, a portfolio company paid its outstanding principal balance of
In March, a portfolio company paid its outstanding principal balance of
Net Asset Value
At March 31, 2026, the Company’s net assets were
For the quarter ended March 31, 2026, net increase in net assets resulting from operations was
Stock Repurchase Program
During the quarter ended March 31, 2026, the Company did not repurchase any shares of its common stock under its stock repurchase program. From the date of the inception of the Company’s stock repurchase program through March 31, 2026, the Company has repurchased 167,465 shares of its common stock at an average price of
Recent Developments
On April 1, 2026, the Company funded a
On April 14, 2026, the Company closed its merger with Monroe Capital Corporation. In connection with the closing of the merger, the Company received approximately
On April 14, 2026, the Company repaid the outstanding balance of
On April 30, 2026, the Company funded a
On April 30, 2026, the Company funded a
Monthly Distributions Declared in Second Quarter 2026
On May 1, 2026, the Company’s Board declared regular monthly cash distributions of
Regular Monthly Distributions Payable in Third Quarter 2026
Ex-Dividend Date |
Record Date |
Payment Date |
Amount per Share |
|||
June 17, 2026 |
June 17, 2026 |
July 15, 2026 |
|
|||
July 16, 2026 |
July 16, 2026 |
August 14, 2026 |
|
|||
August 17, 2026 |
August 17, 2026 |
September 15, 2026 |
|
|||
|
|
Total: |
|
Special Monthly Distributions Payable in Third Quarter 2026
Ex-Dividend Date |
Record Date |
Payment Date |
Amount per Share |
|||
June 17, 2026 |
June 17, 2026 |
July 15, 2026 |
|
|||
July 16, 2026 |
July 16, 2026 |
August 14, 2026 |
|
|||
August 17, 2026 |
August 17, 2026 |
September 15, 2026 |
|
|||
|
|
Total: |
|
After paying distributions of
The Company’s board of directors sets the level of distributions for each quarter based on its results of operations, spillover income and longer-term outlook, including expected operating results for the current fiscal year. When declaring distributions, the Company’s board of directors reviews estimates of taxable income available for distribution, which may differ from consolidated net income under generally accepted accounting principles due to (i) changes in unrealized appreciation and depreciation, (ii) temporary and permanent differences in income and expense recognition, and (iii) the amount of spillover income carried over from a given year for distribution in the following year. The final determination of taxable income for each tax year, as well as the tax attributes for distributions in such tax year, will be made after the close of the tax year.
Conference Call
The Company will host a conference call on Wednesday, May 6, 2026 at 9:00 a.m. ET to discuss its latest corporate developments and financial results. To participate in the call, please dial (877) 407-9716 (domestic) or (201) 493-6779 (international). The access code for all callers is 13759343. The Company recommends joining the call at least 5 minutes in advance. In addition, a live webcast will be available on the Company’s website at www.horizontechfinance.com.
A webcast replay will be available on the Company’s website for 30 days following the call.
About Horizon Technology Finance
Horizon Technology Finance Corporation (NASDAQ: HRZN), externally managed by Horizon Technology Finance Management LLC, an affiliate of Monroe Capital, is a leading specialty finance company that provides capital in the form of secured loans to venture capital and private equity-backed companies and publicly traded companies in the technology, life science, healthcare information and services, and sustainability industries. The investment objective of Horizon is to maximize its investment portfolio’s return by generating current income from the debt investments it makes and capital appreciation from the warrants it receives when making such debt investments. Horizon is headquartered in
Forward-Looking Statements
Statements included herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Horizon’s filings with the Securities and Exchange Commission. Horizon undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.
Horizon Technology Finance Corporation and Subsidiaries |
||||||
Consolidated Statements of Assets and Liabilities |
||||||
(Dollars in thousands, except share and per share data) |
||||||
|
March 31, |
|
December 31, |
|
||
|
2026 |
|
2025 |
|
||
|
(unaudited) |
|
|
|
||
Assets |
|
|
|
|
||
Non-affiliate investments at fair value (cost of |
$ |
631,495 |
|
$ |
584,100 |
|
Non-controlled affiliate investments at fair value (cost of |
|
64,202 |
|
|
63,144 |
|
Total investments at fair value (cost of |
|
695,697 |
|
|
647,244 |
|
Cash |
|
34,489 |
|
|
105,519 |
|
Investments in money market funds |
|
36,139 |
|
|
34,711 |
|
Restricted investments in money market funds |
|
2,634 |
|
|
2,463 |
|
Interest receivable |
|
12,742 |
|
|
12,086 |
|
Other assets |
|
9,946 |
|
9,081 |
|
|
Total assets |
$ |
791,647 |
$ |
811,104 |
|
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
||
Borrowings |
$ |
447,166 |
|
$ |
473,027 |
|
Distributions payable |
|
2,872 |
|
|
15,053 |
|
Base management fee payable |
|
1,041 |
|
|
975 |
|
Incentive fee payable |
|
1,765 |
|
|
— |
|
Other accrued expenses |
|
4,940 |
|
|
3,547 |
|
Total liabilities |
|
457,784 |
|
|
492,602 |
|
|
|
|
|
|
||
Commitments and contingencies |
|
|
|
|
||
|
|
|
|
|
||
Net assets |
|
|
|
|
||
Preferred stock, par value |
|
— |
|
|
— |
|
Common stock, par value |
|
53 |
|
|
51 |
|
Paid-in capital in excess of par |
|
575,167 |
|
|
559,355 |
|
Distributable loss |
|
(241,357 |
) |
|
(240,904 |
) |
Total net assets |
|
333,863 |
|
|
318,502 |
|
Total liabilities and net assets |
$ |
791,647 |
|
$ |
811,104 |
|
Net asset value per common share |
$ |
6.98 |
|
$ |
6.98 |
|
Horizon Technology Finance Corporation and Subsidiaries |
||||||
Consolidated Statements of Operations (Unaudited) |
||||||
(Dollars in thousands, except share and per share data) |
||||||
|
For the Three Months Ended |
|
||||
|
March 31, |
|
||||
|
2026 |
|
2025 |
|
||
Investment income |
|
|
|
|
||
From non-affiliate investments: |
|
|
|
|
||
Interest income |
$ |
21,073 |
|
$ |
23,438 |
|
Payment-in-kind interest income |
|
437 |
|
|
77 |
|
Fee income |
|
997 |
|
|
1,062 |
|
From non-controlled affiliate investments: |
|
|
|
|
||
Payment-in-kind interest income |
|
841 |
|
|
— |
|
Interest income |
|
731 |
|
|
— |
|
From controlled affiliate investments: |
|
|
|
|
||
Payment-in-kind interest income |
|
— |
|
|
208 |
|
Interest reversal |
|
— |
|
|
(269 |
) |
Total investment income |
|
24,079 |
|
|
24,516 |
|
Expenses |
|
|
|
|
||
Interest expense |
|
8,179 |
|
|
8,681 |
|
Base management fee |
|
3,120 |
|
|
3,180 |
|
Performance based incentive fee |
|
1,765 |
|
|
— |
|
Administrative fee |
|
640 |
|
|
406 |
|
Professional fees |
|
757 |
|
|
725 |
|
General and administrative |
|
380 |
|
|
427 |
|
Total expenses |
|
14,841 |
|
|
13,419 |
|
Net investment income before excise tax |
|
9,238 |
|
|
11,097 |
|
Provision for excise tax |
|
267 |
|
|
378 |
|
Net investment income |
|
8,971 |
|
|
10,719 |
|
Net realized and unrealized loss |
|
|
|
|
||
Net realized (loss) gain on non-affiliate investments |
|
(161 |
) |
|
1 |
|
Net realized (loss) gain on investments |
|
(161 |
) |
|
1 |
|
Net realized loss on extinguishment of debt |
|
(1,432 |
) |
|
— |
|
Net realized (loss) gain |
|
(1,593 |
) |
|
1 |
|
Net unrealized depreciation on non-affiliate investments |
|
(4,750 |
) |
|
(12,037 |
) |
Net unrealized appreciation (depreciation) on non-controlled affiliate investments |
|
150 |
|
|
(2 |
) |
Net unrealized depreciation on controlled affiliate investments |
|
— |
|
|
(20,117 |
) |
Net unrealized depreciation on investments |
|
(4,600 |
) |
|
(32,156 |
) |
Net realized and unrealized loss |
|
(6,193 |
) |
|
(32,155 |
) |
Net increase (decrease) in net assets resulting from operations |
$ |
2,778 |
|
$ |
(21,436 |
) |
Net investment income per common share - basic |
$ |
0.19 |
|
$ |
0.27 |
|
Net investment income per common share - diluted |
$ |
0.19 |
|
$ |
0.27 |
|
Net increase (decrease) in net assets resulting from operations per common share - basic |
$ |
0.06 |
|
$ |
(0.53 |
) |
Net increase (decrease) in net assets resulting from operations per common share - diluted |
$ |
0.06 |
|
$ |
(0.53 |
) |
Weighted average shares outstanding - basic |
|
47,316,637 |
|
|
40,223,393 |
|
Weighted average shares outstanding - diluted |
|
47,316,637 |
|
|
40,223,393 |
|
Distributions declared per share |
$ |
0.18 |
|
$ |
0.33 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20260505637648/en/
Investor Relations:
ICR
Garrett Edson
ir@horizontechfinance.com
(646) 200-8885
Media Relations:
ICR
Chris Gillick
HorizonPR@icrinc.com
(646) 677-1819
Source: Horizon Technology Finance Corporation