Horizon Technology Finance Announces Second Quarter 2025 Financial Results
- Second Quarter 2025 Net Investment Income per Share of
- Debt Portfolio Yield of
- HRZN Ends Quarter with Committed Backlog of
- Declares Regular Monthly Distributions Totaling
- Announced Merger with Monroe Capital Corp (NASDAQ: MRCC) -
Second Quarter 2025 and Recent Highlights
-
Net investment income (“NII”) of
$11.4 million $0.28 $12.9 million $0.36 -
Total investment portfolio of
$622.7 million -
Net asset value of
$283.8 million $6.75 -
Annualized portfolio yield on debt investments of
15.8% for the quarter -
Funded seven loans totaling
$59.7 million - Experienced liquidity events from seven portfolio companies
-
Increased commitment of senior secured debt facility by
$100 million $200 million -
Cash of
$81.2 million $329.0 million - Held portfolio of warrant and equity positions in 99 companies as of June 30, 2025
-
Undistributed spillover income of
$0.94 -
Subsequent to quarter end, declared distributions of
$0.11 - Subsequent to quarter end, HRZN announced it entered into an agreement pursuant to which Monroe Capital Corporation (“MRCC”; NASDAQ: MRCC) would merge with and into HRZN, subject to the receipt of certain shareholder approvals and the satisfaction of other closing conditions
“We are excited at the announcement of our forthcoming merger with MRCC,” said Mike Balkin, Chief Executive Officer of Horizon. “Upon closing, HRZN will significantly increase its size, scale and capital base, while continuing to receive the active backing of a premier asset manager in Monroe Capital. Once completed, the merger will significantly expand our ability to provide venture lending solutions, including to small-cap public market companies, which is an attractive and renewed focus for investment. We expect the merger will better position us to win larger venture lending transactions and to support innovative businesses shaping the future.”
“For the quarter, our net asset value was impacted in large part by the ongoing challenging venture capital environment,” added Mr. Balkin. “We remain sharply focused on navigating the current environment and believe this focus, along with completing the merger, will enable us to significantly grow in 2026 and, over the longer-term, generate attractive and sustainable risk-adjusted returns for our shareholders.”
Second Quarter 2025 Operating Results
Total investment income for the quarter ended June 30, 2025 was
The Company’s dollar-weighted annualized yield on average debt investments for the quarter ended June 30, 2025 and 2024 was
Total expenses for the quarter ended June 30, 2025 were
Net investment income for the quarter ended June 30, 2025 was
For the quarter ended June 30, 2025, net realized loss on investments was
For the quarter ended June 30, 2025, net unrealized depreciation on investments was
Portfolio Summary and Investment Activity
As of June 30, 2025, the Company’s debt portfolio consisted of 46 secured loans with an aggregate fair value of
($ in thousands) |
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
Beginning portfolio |
$ |
689,553 |
|
$ |
711,116 |
|
$ |
697,891 |
|
$ |
709,085 |
|
|
|
|
|
|
||||||||
New debt and equity investments |
|
59,869 |
|
|
12,065 |
|
|
162,308 |
|
|
46,634 |
|
|
|
|
|
|
||||||||
Less refinanced debt balances |
|
(17,500 |
) |
|
— |
|
|
(46,250 |
) |
|
(11,250 |
) |
|
|
|
|
|
||||||||
Net new debt and equity investments |
|
42,369 |
|
|
12,065 |
|
|
116,058 |
|
|
35,384 |
|
|
|
|
|
|
||||||||
Principal payments received on investments |
|
(15,659 |
) |
|
(11,803 |
) |
|
(26,830 |
) |
|
(22,303 |
) |
|
|
|
|
|
||||||||
Early pay-offs and principal paydowns |
|
(62,834 |
) |
|
(44,610 |
) |
|
(102,408 |
) |
|
(53,753 |
) |
|
|
|
|
|
||||||||
Payment-in-kind interest on investments |
|
243 |
|
|
355 |
|
|
528 |
|
|
1,737 |
|
|
|
|
|
|
||||||||
Accretion of debt investment fees |
|
1,909 |
|
|
1,735 |
|
|
3,298 |
|
|
2,996 |
|
|
|
|
|
|
||||||||
New debt investment fees |
|
(700 |
) |
|
(258 |
) |
|
(1,504 |
) |
|
(567 |
) |
|
|
|
|
|
||||||||
Warrants received in settlement of fee income |
|
5 |
|
|
359 |
|
|
10 |
|
|
359 |
|
|
|
|
|
|
||||||||
Proceeds from sale of investments |
|
(783 |
) |
|
(47 |
) |
|
(784 |
) |
|
(88 |
) |
|
|
|
|
|
||||||||
Net realized (loss) gain on investments |
|
(9,294 |
) |
|
2,464 |
|
|
(9,293 |
) |
|
2,472 |
|
|
|
|
|
|
||||||||
Net unrealized depreciation on investments |
|
(22,156 |
) |
|
(24,511 |
) |
|
(54,313 |
) |
|
(28,471 |
) |
|
|
|
|
|
||||||||
Other |
|
— |
|
|
(3 |
) |
|
— |
|
|
11 |
|
|
|
|
|
|
||||||||
Ending portfolio |
$ |
622,653 |
|
$ |
646,862 |
|
$ |
622,653 |
|
$ |
646,862 |
|
Portfolio Asset Quality
The following table shows the classification of Horizon’s loan portfolio at fair value by internal credit rating as of June 30, 2025, March 31, 2025 and December 31, 2024:
($ in thousands) |
June 30, 2025 |
|
March 31, 2025 |
|
December 31, 2024 |
||||||||||||
|
Number of
|
Debt Investments
|
Percentage
|
|
Number of
|
Debt Investments
|
Percentage
|
|
Number of
|
Debt Investments
|
Percentage of
|
||||||
Credit
|
|
|
|
|
|
|
|
|
|
|
|
||||||
4 |
5 |
$ |
70,411 |
12.2 |
% |
|
11 |
$ |
159,150 |
24.7 |
% |
|
11 |
$ |
159,944 |
25.1 |
% |
3 |
33 |
|
467,726 |
80.8 |
% |
|
30 |
|
414,706 |
64.5 |
% |
|
30 |
|
419,621 |
65.7 |
% |
2 |
3 |
|
14,125 |
2.4 |
% |
|
5 |
|
54,214 |
8.4 |
% |
|
7 |
|
48,760 |
7.6 |
% |
1 |
5 |
|
26,909 |
4.6 |
% |
|
7 |
|
15,497 |
2.4 |
% |
|
4 |
|
10,454 |
1.6 |
% |
Total |
46 |
$ |
579,171 |
100.0 |
% |
|
53 |
$ |
643,567 |
100.0 |
% |
|
52 |
$ |
638,779 |
100.0 |
% |
As of June 30, 2025, March 31, 2025 and December 31, 2024, Horizon’s loan portfolio had weighted average credit ratings of 3.0, 3.1 and 3.1, 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 June 30, 2025, there were five debt investments with an internal credit rating of 1, with an aggregate cost of
Liquidity and Capital Resources
As of June 30, 2025, the Company had
As of June 30, 2025, there was no outstanding principal balance under the
As of June 30, 2025, there was
On May 23, 2025, the Company amended its facility with a separate large
Horizon Funding Trust 2022-1, a wholly-owned subsidiary of Horizon, previously issued
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
As of June 30, 2025, the Company’s net debt to equity leverage ratio was
Liquidity Events
During the quarter ended June 30, 2025, Horizon experienced liquidity events from seven 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 April, a portfolio company paid its outstanding principal balance of
In April, a portfolio company paid its outstanding principal balance of
In April, HRZN sold its equity investment in a portfolio company for gross proceeds of
In May, a portfolio company prepaid its outstanding principal balance of
In June, a portfolio company prepaid its outstanding principal balance of
In June, Fictiv, Inc. (“Fictiv”) was acquired by MISUMI Group Inc. and prepaid its outstanding principal balance of
In June, with the proceeds of a new loan from Horizon, a portfolio company paid its outstanding principal balance of
Net Asset Value
At June 30, 2025, the Company’s net assets were
For the quarter ended June 30, 2025, net decrease in net assets resulting from operations was
Stock Repurchase Program
On April 25, 2025, the Company’s board of directors extended the Company’s previously authorized stock repurchase program until the earlier of June 30, 2026 or the repurchase of
Recent Developments
On July 1, 2025, the Company received proceeds of
On July 10, 2025, the holders of a portion of the 2031 Convertible Notes converted
On July 18, 2025, Noodle Partners, Inc. (“Noodle”) prepaid its outstanding principal balance of
On July 18, 2025, the Company received a principal paydown of
On July 29, 2025, Pivot Bio, Inc. (“Pivot Bio”) prepaid its outstanding principal balance of
On July 30, 2025, Native Microbials, Inc. (“Native Microbials”) prepaid its outstanding principal balance of
On August 5, 2025, the Board of the Company authorized an increase in the maximum amount of shares of the Company that can be repurchased on the open market or in privately negotiated purchases pursuant to Rule 10b-18 and other applicable provisions of the Securities Exchange Act of 1934, as amended from up to
On August 6, 2025, the Company purchased substantially all of the remaining assets of Powerscourt Investments XXV, LP for
On August 7, 2025, the Company entered into a certain Merger Agreement with Monroe Capital Corporation (“MRCC”; NASDAQ: MRCC) wherein MRCC will merge with and into the Company, subject to the receipt of, among other things, approval by the shareholders of the Company and by the shareholders of MRCC and the satisfaction of other closing conditions.
Monthly Distributions Declared in Third Quarter 2025
On August 5, 2025, the Company’s board of directors declared monthly distributions of
Monthly Distributions
Ex-Dividend Date |
Record Date |
Payment Date |
Amount per Share |
September 17, 2025 |
September 17, 2025 |
October 15, 2025 |
|
October 16, 2025 |
October 16, 2025 |
November 14, 2025 |
|
November 17, 2025 |
November 17, 2025 |
December 16, 2025 |
|
|
|
Total: |
|
After paying distributions of
When declaring distributions, Horizon’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 today at 5:00 p.m. ET to discuss its latest corporate developments (including the announced merger with MRCC) 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 13754326. 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
|
||||||
|
June 30, |
|
December 31, |
|
||
|
2025 |
|
2024 |
|
||
|
(unaudited) |
|
|
|
||
Assets |
|
|
|
|
||
Non-affiliate investments at fair value (cost of |
$ |
605,491 |
|
$ |
657,765 |
|
Non-controlled affiliate investments at fair value (cost of |
|
6,707 |
|
|
8,307 |
|
Controlled affiliate investments at fair value (cost of |
|
10,455 |
|
|
31,819 |
|
Total investments at fair value (cost of |
|
622,653 |
|
|
697,891 |
|
Cash |
|
24,664 |
|
|
70,264 |
|
Investments in money market funds |
|
53,261 |
|
|
27,266 |
|
Restricted investments in money market funds |
|
3,226 |
|
|
3,338 |
|
Interest receivable |
|
14,329 |
|
|
16,559 |
|
Other assets |
|
8,664 |
|
6,515 |
|
|
Total assets |
$ |
726,797 |
$ |
821,833 |
|
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
||
Borrowings |
$ |
425,138 |
|
$ |
467,904 |
|
Distributions payable |
|
13,869 |
|
|
13,159 |
|
Base management fee payable |
|
944 |
|
|
1,045 |
|
Other accrued expenses |
|
3,051 |
|
|
3,542 |
|
Total liabilities |
|
443,002 |
|
|
485,650 |
|
|
|
|
|
|
||
Commitments and contingencies |
|
|
|
|
||
|
|
|
|
|
||
Net assets |
|
|
|
|
||
Preferred stock, par value |
|
— |
|
|
— |
|
Common stock, par value |
|
47 |
|
|
44 |
|
Paid-in capital in excess of par |
|
535,423 |
|
|
518,200 |
|
Distributable loss |
|
(251,675 |
) |
|
(182,061 |
) |
Total net assets |
|
283,795 |
|
|
336,183 |
|
Total liabilities and net assets |
$ |
726,797 |
|
$ |
821,833 |
|
Net asset value per common share |
$ |
6.75 |
|
$ |
8.43 |
|
Horizon Technology Finance Corporation and Subsidiaries
Consolidated Statements of Operations (Unaudited)
|
||||||||||||
|
For the Three Months Ended |
|
For the Six Months Ended |
|
||||||||
|
June 30, |
|
June 30, |
|
||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
Investment income |
|
|
|
|
|
|
|
|
||||
From non-affiliate investments: |
|
|
|
|
|
|
|
|
||||
Interest income |
$ |
22,588 |
|
$ |
24,480 |
|
$ |
46,103 |
|
$ |
50,164 |
|
Prepayment fee income |
|
1,712 |
|
|
865 |
|
|
2,499 |
|
|
1,090 |
|
Fee income |
|
200 |
|
|
145 |
|
|
475 |
|
|
188 |
|
From controlled affiliate investments: |
|
|
|
|
|
|
|
|
||||
Interest income (reversal) |
|
20 |
|
|
188 |
|
|
(41 |
) |
|
365 |
|
Total investment income |
|
24,520 |
|
|
25,678 |
|
|
49,036 |
|
|
51,807 |
|
Expenses |
|
|
|
|
|
|
|
|
||||
Interest expense |
|
8,201 |
|
|
7,940 |
|
|
16,882 |
|
|
16,101 |
|
Base management fee |
|
2,959 |
|
|
3,027 |
|
|
6,139 |
|
|
6,189 |
|
Performance based incentive fee |
|
— |
|
|
— |
|
|
— |
|
|
295 |
|
Administrative fee |
|
420 |
|
|
426 |
|
|
826 |
|
|
859 |
|
Professional fees |
|
505 |
|
|
455 |
|
|
1,230 |
|
|
1,120 |
|
General and administrative |
|
613 |
|
|
559 |
|
|
1,040 |
|
|
987 |
|
Total expenses |
|
12,698 |
|
|
12,407 |
|
|
26,117 |
|
|
25,551 |
|
Net investment income before excise tax |
|
11,822 |
|
|
13,271 |
|
|
22,919 |
|
|
26,256 |
|
Provision for excise tax |
|
373 |
|
|
357 |
|
|
750 |
|
|
736 |
|
Net investment income |
|
11,449 |
|
|
12,914 |
|
|
22,169 |
|
|
25,520 |
|
Net realized and unrealized loss |
|
|
|
|
|
|
|
|
||||
Net realized (loss) gain on non-affiliate investments |
|
(9,294 |
) |
|
2,424 |
|
|
(9,293 |
) |
|
2,435 |
|
Net realized gain on non-controlled affiliate investments |
|
— |
|
|
40 |
|
|
— |
|
|
37 |
|
Net realized (loss) gain on investments |
|
(9,294 |
) |
|
2,464 |
|
|
(9,293 |
) |
|
2,472 |
|
Net realized loss on extinguishment of debt |
|
(776 |
) |
|
— |
|
|
(776 |
) |
|
— |
|
Net realized (loss) gain |
|
(10,070 |
) |
|
2,464 |
|
|
(10,069 |
) |
|
2,472 |
|
Net unrealized depreciation on non-affiliate investments |
|
(14,887 |
) |
|
(23,287 |
) |
|
(26,925 |
) |
|
(37,501 |
) |
Net unrealized (depreciation) appreciation on non-controlled affiliate investments |
|
(1,600 |
) |
|
3,178 |
|
|
(1,602 |
) |
|
14,611 |
|
Net unrealized depreciation on controlled affiliate investments |
|
(5,669 |
) |
|
(4,402 |
) |
|
(25,786 |
) |
|
(5,581 |
) |
Net unrealized depreciation on investments |
|
(22,156 |
) |
|
(24,511 |
) |
|
(54,313 |
) |
|
(28,471 |
) |
Net realized and unrealized loss |
|
(32,226 |
) |
|
(22,047 |
) |
|
(64,382 |
) |
|
(25,999 |
) |
Net decrease in net assets resulting from operations |
$ |
(20,777 |
) |
$ |
(9,133 |
) |
$ |
(42,213) |
|
$ |
(479) |
|
Net investment income per common share - basic |
$ |
0.28 |
|
$ |
0.36 |
|
$ |
0.54 |
|
$ |
0.74 |
|
Net investment income per common share - diluted |
$ |
0.28 |
|
$ |
0.36 |
|
$ |
0.54 |
|
$ |
0.74 |
|
Net decrease in net assets resulting from operations per common share - basic |
$ |
(0.50 |
) |
$ |
(0.26 |
) |
$ |
(1.04 |
) |
$ |
(0.01 |
) |
Net decrease in net assets resulting from operations per common share - diluted |
$ |
(0.50 |
) |
$ |
(0.26 |
) |
$ |
(1.04 |
) |
$ |
(0.01 |
) |
Weighted average shares outstanding - basic |
|
41,221,283 |
|
|
35,434,761 |
|
|
40,725,094 |
|
|
34,507,252 |
|
Weighted average shares outstanding - diluted |
|
41,221,283 |
|
|
35,434,761 |
|
|
40,725,094 |
|
|
34,507,252 |
|
Distributions declared per share |
$ |
0.33 |
|
$ |
0.33 |
|
$ |
0.66 |
|
$ |
0.71 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20250807743090/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
