Horizon Technology Finance Corp
For the period ended Dec 31, 2025. Filed Mar 3, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 3, 2026
HRZN$3.960.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-04.
0001437749-25-006114
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-03.
0001437749-26-006636
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 151 previous paragraphs and 151 current paragraphs.
69 unchanged; 57 reworded; 18 added; 20 removed; 5 previous and 7 current paragraphs rearranged.
Tables are not compared: 39 previous and 41 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
On August 7, 2025, we entered into the Merger Agreement with MRCC, the Merger Sub, Monroe Capital BDC Advisors, LLC, and the Advisor. The Merger Agreement provides that, subject to the conditions set forth in the Merger Agreement, immediately following the Asset Sale and at the Effective Time, Merger Sub will merge with and into MRCC, with MRCC continuing as the surviving company and as a wholly owned subsidiary of us and, immediately thereafter, MRCC will merge with and into us, with us continuing as the surviving company. MRCC also entered into the Asset Purchase Agreement with MCIP, and MC Advisors, pursuant to which, subject to the satisfaction or waiver of the closing conditions set forth in the Asset Purchase Agreement, on the Closing Date, MCIP will acquire all of MRCC’s investment assets and liabilities at fair value, as determined shortly before the Closing Date, for cash. Under the Asset Purchase Agreement, the Asset Sale is contingent upon, and will become effective immediately prior to the effectiveness of, the Merger.
Current report
At December 31, 2025 and 2024, the outstanding principal balance under the Nuveen Facility was $90.0 million and $75.0 million, respectively. As of December 31, 2025 and 2024, we had borrowing capacity under the Nuveen Facility of $110.0 million and $25.0 million, respectively. At December 31, 2025 and 2024, $12.1 million and $9.9 million, respectively, was available for borrowing under the Nuveen Facility, subject to existing terms and advance rates.
Current report
Securitization
Current report
2028 Notes
Current report
On December 15, 2025, we issued and sold an aggregate principal amount of $57.5 million of 7.00% notes due in 2028. The 2028 Notes have a stated maturity of December 15, 2028 and may be redeemed in whole or in part at any time at our option through June 15, 2028, at a redemption price equal to the greater of: (1)(a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date on a semi-annual basis at the Treasury Rate plus 50 basis points less (b) interest accrued to the date of redemption, and (2) 100% of the principal amount of the 2028 Notes to be redeemed, plus, in either case, accrued and unpaid interest thereon to, but not including, the redemption date. On or after June 15, 2028, we may redeem the 2028 Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount of the 2028 Notes being redeemed plus accrued and unpaid interest there onto the date of redemption. The 2028 Notes bear interest at a rate of 7.00% per year, payable semi-annually on June 15 and December 15 of each year, commencing on June 15, 2026. The 2028 Notes are our direct unsecured obligations and (i) rank equally in right of payment with our current and future unsecured indebtedness; (ii) are senior in right of payment to any of our future indebtedness that expressly provides it is subordinated to the 2028 Notes; (iii) are effectively subordinated to all of our existing and future secured indebtedness (including indebtedness that is initially unsecured to which we subsequently grant security), to the extent of the value of the assets securing such indebtedness, and (iv) are structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries. As of December 31, 2025, we were in material compliance with the terms of the 2028 Notes.
Current report
During the year ended December 31, 2025, the holders of a portion of the 2030 Convertible Notes converted $8.5 million in outstanding principal of the 2030 Convertible Notes plus accrued but unpaid interest on such outstanding principal as of the conversion date into 1,197,288 shares of common stock at a weighted average conversion price of $7.11 together with cash in lieu of fractional shares, in accordance with noteholder conversion notice.
Current report
2031 Convertible Notes
Current report
During the year ended December 31, 2025, the holders of a portion of the 2031 Convertible Notes converted $17.3 million in outstanding principal of the 2031 Convertible Notes plus accrued but unpaid interest on such outstanding principal as of the conversion date into 2,264,546 shares of common stock at a weighted average conversion price of $7.69 together with cash in lieu of fractional shares, in accordance with noteholder conversion notice. During the year ended December 31, 2024, the holders of the 2031 Convertible Notes did not convert any of the 2031 Convertible Notes.
Current report
On March 31, 2025, Monroe closed a transaction pursuant to which Momentum US Bidco LLC, an affiliate of Wendel SE, acquired 75% of the outstanding equity interests of Monroe Capital Intermediate Holdings, LLC, the indirect parent company of our Advisor, and certain other affiliates of Monroe (or the “Transaction”). The closing of the Transaction resulted in a change in control of our Advisor (the “Advisor Change in Control”). The Advisor Change in Control did not substantially or adversely affect us.
Current report
On August 7, 2025, we entered into the Merger Agreement with MRCC, the Merger Sub, Monroe Capital BDC Advisors, LLC, and the Advisor. See “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview” for additional information about the Mergers.
Current report
Recently issued accounting pronouncement
Current report
In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update, or ASU, No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). ASU No. 2024-03 requires disaggregated disclosure of certain costs and expenses, including purchase of inventory, employee compensation, depreciation, amortization and depletion, within relevant income statement captions. ASU 2024-03 is effective for years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption and retrospective application are permitted. We are currently evaluating the impact ASU No. 2024-03.
Current report
On January 12, 2026, we funded a $30.0 million debt investment to a new portfolio company, Pelthos Therapeutics, Inc.
Current report
Between January 7 and February 13, 2026, the holders of a portion of the 2030 Convertible Notes converted $15.1 million in outstanding principal of the 2030 Convertible Notes plus accrued but unpaid interest on such outstanding principal as of the conversion date into 2,118,250 shares of common stock at a conversion price of $7.12 per share, together with cash in lieu of fractional shares.
Current report
On January 16, we distributed the investment held by HIMV LLC to Horizon Technology Finance Corporation. On January 27, 2026, we dissolved HIMV LLC.
Current report
On January 27, 2026, we borrowed $20.0 million on our Key Facility.
Current report
On January 28, 2026, we redeemed the outstanding principal balance of the 2026 Notes plus accrued interest. We accelerated $0.1 million of unamortized debt issuance costs related to the 2026 Notes.
Current report
On February 6, 2026, we amended our Key Facility, to amend certain provisions regarding eligibility of debt investments and concentration limits.
Removed paragraphs (20)
Previous report
On March 14, 2022, we completed a follow-on public offering of 2,500,000 shares of our common stock at a public offering price of $14.35 per share, for total net proceeds to us of $34.3 million, after deducting underwriting commission and discounts and other offering expenses.
Previous report
On June 2, 2023, we completed a follow-on public offering of 3,250,000 shares of our common stock at a public offering price of $12.50 per share, for total net proceeds to us of $38.9 million, after deducting underwriting commission and discounts and other offering expenses.
Previous report
At December 31, 2024, the outstanding principal balance under the Nuveen Facility was $75.0 million. As of December 31, 2024, we had borrowing capacity under the Nuveen Facility of $25.0 million. At December 31, 2024, $9.9 million was available for borrowing under the Nuveen Facility, subject to existing terms and advance rates. The Nuveen Facility was not outstanding at December 31, 2023.
Previous report
Securitizations
Previous report
2022 Asset-Backed Notes
Previous report
Under the terms of the 2022 Asset-Backed Notes, we are required to maintain a reserve cash balance, funded through proceeds from the sale of the 2022 Asset-Backed Notes, which may be used to pay monthly interest and principal payments on the 2022 Asset-Backed Notes. We have segregated these funds and classified them as restricted investments in money market funds. At December 31, 2024 and 2023, there were approximately $1.0 million and $1.3 million, respectively, of such restricted investments.
Previous report
On October 21, 2024, Monroe entered into the Transaction Agreement pursuant to which the Acquiror, an affiliate of Wendel SE, will acquire 75% of the equity interests in Monroe, which shall constitute a change in control of our Advisor. The Monroe business (including 100% of the equity interests in MCH HoldCo and, indirectly, 100% of the equity interests of our Advisor) will be contributed by MCIH to Intermediate Holdings, and 75% of the equity interests of Intermediate Holdings will be acquired by the Acquiror. Neither we nor our Advisor is party to the Transaction Agreement. The closing of the transactions contemplated by the Transaction Agreement will result in the Advisor Change in Control. We do not anticipate the Advisor Change in Control will substantially or adversely affect us.
Previous report
Recently adopted accounting pronouncements
Previous report
In June 2022, the FASB issued Accounting Standards Update No. 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 clarifies the guidance when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of the security. The amendments in ASU 2022-03 were effective for public companies for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The adoption of ASU 2022-03 did not have a material impact on our consolidated financial statements.
Previous report
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, allowing financial statement users to better understand the components of a segment's profit or loss and assess potential future cash flows for each reportable segment and the entity as a whole. The amendments expand a public entity's segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker, clarifying when an entity may report one or more additional measures to assess segment performance, requiring enhanced interim disclosures and providing new disclosure requirements for entities with a single reportable segment, among other new disclosure requirements. The amendments were effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The required disclosures are included in the footnotes to our consolidated financial statements.
Previous report
On January 9, 2025, we purchased, from a co-lender, a debt investment to an existing portfolio company, Hound Labs, Inc., with a principal balance of $2.9 million for a purchase price of $0.5 million. The debt investment purchased has the same terms as the investment already held by us.
Previous report
On January 10, 2025, we funded a $6.0 million debt investment to a new portfolio company, HappyCo, Inc.
Previous report
On January 15, 2025, we funded a $2.0 million equity investment to an existing portfolio company, Swift Health Systems, Inc.
Previous report
On January 31, 2025, we funded a $2.5 million debt investment to an existing portfolio company, BriteCore Holdings, Inc.
Previous report
Between February 11 and 25, 2025, we funded a $0.4 million debt investment to an existing portfolio company, Better Place Forests Co.
Previous report
At a special meeting of the stockholders convened on February 21, 2025, our stockholders, upon the recommendation of our Board, approved a new investment management agreement with our Advisor, the terms of which are identical to those contained in the Investment Management Agreement. The new investment management agreement will become effective, if and when, the Acquiror acquires a controlling interest in Monroe, and indirectly in our Advisor.
Previous report
On February 25, 2025, we funded a $25.5 million debt investment to an existing portfolio company, Castle Creek Biosciences, Inc. in connection with the prepayment of its existing $16.3 million debt investment.
Previous report
On February 27, 2025, we funded a $10.0 million debt investment to a new portfolio company, Long Grove Pharmaceutical, LLC.
Previous report
On February 28, 2025, we funded a $15.0 million debt investment to a new portfolio company, MML US, Inc.
Previous report
On March 4, 2025, Candesant Biomedical, Inc. prepaid its outstanding principal balance of $10.0 million on its venture loan, plus interest, end-of-term payment and prepayment fee. We continue to hold warrants in Candesant Biomedical, Inc.
Reworded paragraphs (57)
Previous wording
You should understand that under Sections 27A(b)(2)(B) and (D) of the Securities Act and Sections 21E(b)(2)(B) and (D) of the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to statements made in connection with any annual report on Form 10‑K or any quarterly reports we file under the Exchange Act.
Current wording
You should understand that under Sections 27A(b)(2)(B) and (D) of the Securities Act and Sections 21E(b)(2)(B) and (D) of the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to statements made in connection with any annual report on Form 10‑K or quarterly reports we file under the Exchange Act.
Previous wording
We are a specialty finance company that lends to and invests in development-stage companies in 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 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. As of December 31, 2024, 86.1%, or $550.0 million, of our debt investment portfolio at fair value consisted of Senior Term Loans. 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.
Current wording
We are a specialty finance company that lends to and invests in development-stage companies in 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 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. As of December 31, 2025, 97.3%, or $579.8 million, of our debt investment portfolio at fair value consisted of Senior Term Loans. 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.
Previous wording
The largest debt investments in our portfolio may vary from year to year as new debt investments are originated and existing debt investments are repaid. Our five largest debt investments at cost represented 22% and 23% of total debt investments outstanding as of December 31, 2024 and 2023, respectively. Our five largest debt investments at fair value represented 23% and 22% of total debt investments outstanding as of December 31, 2024 and 2023, respectively. No single debt investment at cost or fair value represented more than 10% of our total debt investments as of December 31, 2024 or 2023.
Current wording
The largest debt investments in our portfolio may vary from year to year as new debt investments are originated and existing debt investments are repaid. Our five largest debt investments at cost represented 26% and 22% of total debt investments outstanding as of December 31, 2025 and 2024, respectively. Our five largest debt investments at fair value represented 26% and 23% of total debt investments outstanding as of December 31, 2025 and 2024, respectively. No single debt investment at cost or fair value represented more than 10% of our total debt investments as of December 31, 2025 or 2024.
Previous wording
We use an internal credit rating system which rates each debt investment on a scale of 4 to 1, 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 debt investment, there is potential for future loss of principal. A rating of 1 represents a deteriorating credit quality and a high degree of risk of loss of principal. Our internal credit rating system is not a national credit rating system. See “Item 1 – Business” for a more detailed description of the internal credit rating system. As of December 31, 2024 and 2023, our debt investments had a weighted average credit rating of 3.1. The following table shows the classification of our debt investment portfolio by credit rating as of December 31, 2024 and 2023:
Current wording
We use an internal credit rating system which rates each debt investment on a scale of 4 to 1, 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 debt investment, there is potential for future loss of principal. A rating of 1 represents a deteriorating credit quality and a high degree of risk of loss of principal. Our internal credit rating system is not a national credit rating system. See “Item 1 – Business” for a more detailed description of the internal credit rating system. As of December 31, 2025 and 2024, our debt investments had a weighted average credit rating of 2.9 and 3.1, respectively. The following table shows the classification of our debt investment portfolio by credit rating as of December 31, 2025 and 2024:
Previous wording
As of December 31, 2024, there were four debt investments with an internal credit rating of 1, with an aggregate cost of $44.8 million and an aggregate fair value of $10.5 million and there were seven debt investments with an internal credit rating of 2, with an aggregate cost of $53.3 million and an aggregate fair value of $48.8 million. As of December 31, 2023, there were four debt investments with an internal credit rating of 1, with an aggregate cost of $72.5 million and an aggregate fair value of $27.6 million and there were two debt investments with an internal credit rating of 2, with an aggregate cost of $43.8 million and an aggregate fair value of $39.3 million. The increase in the number of investments with internal credit ratings of 1 or 2 was primarily a result of the increase in the risk of loss of principal caused by the portfolio companies low cash positions and the difficult equity fundraising market and/or the underperformance of such portfolio companies.
Current wording
As of December 31, 2025, there were four debt investments with an internal credit rating of 1, with an aggregate cost of $33.8 million and an aggregate fair value of $24.5 million and there were four debt investments with an internal credit rating of 2, with an aggregate cost of $56.8 million and an aggregate fair value of $53.5 million. As of December 31, 2024, there were four debt investments with an internal credit rating of 1, with an aggregate cost of $44.8 million and an aggregate fair value of $10.5 million and there were seven debt investments with an internal credit rating of 2, with an aggregate cost of $53.3 million and an aggregate fair value of $48.8 million. The increase in investments with internal credit ratings of 1 or 2 was primarily a result of the increase in the risk of loss of principal caused by the portfolio companies low cash positions and the difficult equity fundraising market and/or the underperformance of such portfolio companies.
Previous wording
Net (decrease) increase in net assets resulting from operations can vary substantially from period to period for various reasons, including, without limitation, the recognition of realized gains and losses and unrealized appreciation and depreciation on investments. As a result, annual comparisons of net increase in net assets resulting from operations may not be meaningful.
Current wording
Net decrease in net assets resulting from operations can vary substantially from period to period for various reasons, including, without limitation, the recognition of realized gains and losses and unrealized appreciation and depreciation on investments. As a result, annual comparisons of net increase in net assets resulting from operations may not be meaningful.
Previous wording
Total investment income increased by $34.3 million, or 43.3%, to $113.5 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022. For the year ended December 31, 2023, total investment income consisted primarily of (1) $110.1 million in interest income from investments, which included $15.9 million in income from the accretion of origination fees and ETPs and $8.4 million in PIK interest income and (2) $3.3 million in fee income.
Current wording
Total investment income decreased by $3.9 million, or 3.9%, to $96.0 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024. For the year ended December 31, 2025, total investment income consisted primarily of (1) $90.5 million in interest income from investments, which included $14.2 million in income from the accretion of origination fees and ETPs and $2.3 million in PIK interest income and (2) $5.6 million in fee income.
Previous wording
Interest income on debt investments increased by $32.8 million, or 42.3%, to $110.1 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022. Interest income on investments for the year ended December 31, 2023 as compared to the year ended December 31, 2022 increased primarily due to an increase of $130.5 million, or 23.7%, in the average size of our debt investment portfolio and an increase in the Prime Rate which is the base rate for most of our variable rate debt investments. The proportion of total investment income that resulted from the portion of ETPs not received in cash for the years ended December 31, 2023 and 2022 was 4.2% and 7.4%, respectively. The decrease in the proportion of total investment income that resulted from the portion of ETPs not received in cash was a result of an increase in earning assets for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Current wording
Interest income on debt investments decreased by $6.5 million, or 6.7%, to $90.5 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024. Interest income on debt investments for the year ended December 31, 2025 as compared to the year ended December 31, 2024 decreased primarily due to a decrease of $21.8 million, or 3.5%, in our average earning debt investments and the decrease in the Prime Rate, which is the base rate for most of our variable rate debt investments. The proportion of total investment income that resulted from the portion of ETPs not received in cash for the years ended December 31, 2025 and 2024 was 3.9% and 5.6%, respectively. The decrease in the proportion of total investment income that resulted from the portion of ETPs not received in cash was a result of an increase in prepayments for the year ended December 31, 2025 as compared to the year ended December 31, 2024.
Previous wording
PIK interest income increased by $8.4 million to $8.4 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022. For the year ended December 31, 2023, 7.4% of total investment income was attributable to non-cash PIK interest. There was no PIK interest income for the year ended December 31, 2022. The increase in PIK interest income for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was due to an increase in earning assets that contain a PIK feature for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Current wording
PIK interest income decreased by $0.9 million, or 28.0%, to $2.3 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024. For the years ended December 31, 2025 and 2024, 2.4% and 3.3%, respectively, of total investment income was attributable to non-cash PIK interest income. The decrease in PIK interest income as a percentage of total investment income was primarily due to a decrease in the average outstanding balance of earning assets that contain a PIK feature for the year ended December 31, 2025 as compared to the year ended December 31, 2024.
Previous wording
Fee income, which includes success fee, other fee and prepayment fee income on debt investments, increased by $1.5 million, or 83.3%, to $3.3 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to higher fee income earned on prepayments for the year ended December 31, 2023.
Current wording
Fee income, which includes success fee, other fee and prepayment fee income on debt investments, increased by $2.6 million, or 88.4%, to $5.6 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to the higher amount of prepayment fees received a higher aggregate amount of principal prepayments for the year ended December 31, 2025.
Previous wording
Interest income on debt investments decreased by $13.2 million, or 12.0%, to $97.0 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Interest income on investments for the year ended December 31, 2024 as compared to the year ended December 31, 2023 decreased primarily due to a decrease of $66.2 million, or 9.6%, in the average earning debt investments. The proportion of total investment income that resulted from the portion of ETPs not received in cash for the years ended December 31, 2024 and 2023 was 5.6% and 4.2%, respectively. The increase in the proportion of total investment income that resulted from the portion of ETPs not received in cash was a result of a decrease in prepayments for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Current wording
Interest income on debt investments decreased by $13.2 million, or 12.0%, to $97.0 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Interest income on debt investments for the year ended December 31, 2024 as compared to the year ended December 31, 2023 decreased primarily due to a decrease of $66.2 million, or 9.6%, in our average earning debt investments. The proportion of total investment income that resulted from the portion of ETPs not received in cash for the years ended December 31, 2024 and 2023 was 5.6% and 4.2%, respectively. The increase in the proportion of total investment income that resulted from the portion of ETPs not received in cash was a result of a decrease in prepayments for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Previous wording
PIK interest income decreased by $5.2 million, or 61.3%, to $3.3 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. For the years ended December 31, 2024 and 2023, 3.3% and 7.4%, respectively, of total investment income was attributable to non-cash PIK interest income. The decrease in PIK interest income for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily due to a decrease in earning assets that contain a PIK feature for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Current wording
PIK interest income decreased by $5.2 million, or 61.3%, to $3.3 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. For the years ended December 31, 2024 and 2023, 3.3% and 7.4%, respectively, of total investment income was attributable to non-cash PIK interest. The decrease in PIK interest income as a percentage of total investment income was primarily due to a decrease in earning assets that contain a PIK feature for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Previous wording
Investment income, consisting of interest income and fees on debt investments, can fluctuate significantly upon repayment of large debt investments. Interest income from the five largest debt investments at cost in the aggregate accounted for 19%, 17% and 15% of investment income for the years ended December 31, 2024, 2023 and 2022, respectively. Interest income from the five largest debt investments at fair value in the aggregate accounted for 19%, 15% and 15% of investment income for the years ended December 31, 2024, 2023 and 2022, respectively.
Current wording
Investment income, consisting of interest income and fees on debt investments, can fluctuate significantly upon repayment of large debt investments. Interest income from the five largest debt investments at cost in the aggregate accounted for 22%, 19% and 17% of investment income for the years ended December 31, 2025, 2024 and 2023, respectively. Interest income from the five largest debt investments at fair value in the aggregate accounted for 23%, 19% and 15% of investment income for the years ended December 31, 2025, 2024 and 2023, respectively.
Previous wording
Total expenses increased by $0.1 million, or 0.2%, to $50.7 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Total expenses increased by $8.2 million, or 19.5%, to $50.5 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022. Total expenses for each period consisted of interest expense, base management fee, incentive and administrative fees, professional fees and general and administrative expenses.
Current wording
Total expenses decreased by $0.1 million, or 0.2%, to $50.5 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024. Total expenses increased by $0.1 million, or 0.2%, to $50.7 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Total expenses for each period consisted of interest expense, base management fee, incentive and administrative fees, professional fees and general and administrative expenses.
Previous wording
Interest expense increased by $3.3 million, or 11.3%, to $32.3 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Interest expense, which includes the amortization of debt issuance costs, increased primarily due to an increase in average borrowings of $16.9 million, or 3.9%, for the year ended December 31, 2024 compared to the year ended December 31, 2023 and an increase in our effective cost of debt for the year ended December 31, 2024 compared to the year ended December 31, 2023. Interest expense increased by $9.8 million, or 50.9%, to $29.0 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022. Interest expense, which includes the amortization of debt issuance costs, increased primarily due to an increase in average borrowings of $92.7 million, or 27.4%, for the year ended December 31, 2023 compared to the year ended December 31, 2022 and an increase in our effective cost of debt for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Current wording
Interest expense increased by $0.5 million, or 1.7%, to $32.8 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024. Interest expense, which includes the amortization of debt issuance costs, increased primarily due to an increase in our effective cost of debt for the year ended December 31, 2025 compared to the year ended December 31, 2024 partially offset by a decrease in average borrowings of $6.8 million, or 1.5%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. Interest expense increased by $3.3 million, or 11.3%, to $32.3 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Interest expense, which includes the amortization of debt issuance costs, increased primarily due to an increase in average borrowings of $16.9 million, or 3.9%, for the year ended December 31, 2024 compared to the year ended December 31, 2023 and an increase in our effective cost of debt for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Previous wording
Base management fee expense decreased by $0.5 million, or 4.2%, to $12.3 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Base management fee expense decreased primarily due to a decrease of $33.7 million, or 4.6%, in average gross assets less cash for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Base management fee expense increased by $2.2 million, or 21.1%, to $12.8 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022. Base management fee expense increased primarily due to an increase of $139.6 million, or 23.3%, in average gross assets less cash for the year ended December 31, 2023 as compared to the year ended December 31, 2022, partially offset by the lower management fee earned on gross assets less cash in excess of $250 million.
Current wording
Base management fee expense decreased by $0.5 million, or 4.2%, to $11.7 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024. Base management fee expense decreased primarily due to a decrease of $32.5 million, or 4.6%, in average gross assets less cash for the year ended December 31, 2025 as compared to the year ended December 31, 2024. Base management fee expense decreased by $0.5 million, or 4.2%, to $12.3 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Base management fee expense decreased primarily due to a decrease of $33.7 million, or 4.6%, in average gross assets less cash for the year ended December 31, 2024 as compared to the year ended December 31, 2023
Previous wording
Performance based incentive fee expense decreased by $2.8 million, or 90.5%, to $0.3 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. This decrease was due to a decrease of $16.5 million, or 25.5%, in Pre-Incentive Fee Net Investment Income for the year ended December 31, 2024 compared to the year ended December 31, 2023 and an Incentive Fee Cap calculated based on the Incentive Fee Cap and Deferral Mechanism in our Investment Management Agreement of $9.3 million for the year ended December 31, 2024 compared to an Incentive Fee Cap of $9.8 million for the year ended December 31, 2023. The Incentive Fee Cap and Deferral Mechanism resulted in $9.3 million of reduced incentive fee expense and increased net investment income for the year ended December 31, 2024. The incentive fee on pre-incentive fee net investment income was subject to the Incentive Fee Cap for the year ended December 31, 2024 due to the cumulative incentive fees paid exceeding 20% of cumulative pre-incentive fee net return during the applicable quarter and the 11 preceding full calendar quarters. Performance based incentive fee expense decreased by $4.7 million, or 60.1%, to $3.1 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022. This decrease was due to an Incentive Fee Cap calculated based on the Incentive Fee Cap and Deferral Mechanism in our Investment Management Agreement of $9.8 million year ended December 31, 2023 compared to an Incentive Fee Cap of $1.0 million for the year ended December 31, 2022, offset by an increase of $20.6 million, or 46.9%, in Pre-Incentive Fee Net Investment Income for the year ended December 31, 2023 compared to the year ended December 31, 2022. The Incentive Fee Cap and Deferral Mechanism resulted in $9.8 million of reduced incentive fee expense and increased net investment income for the year ended December 31, 2023. The incentive fee on pre-incentive fee net investment income was subject to the Incentive Fee Cap for the year ended December 31, 2023 due to the cumulative incentive fees paid exceeding 20% of cumulative pre-incentive fee net return during the applicable quarter and the 11 preceding full calendar quarters.
Current wording
There was no performance based incentive fee expense for the year ended December 31, 2025. Performance based incentive fee expense decreased by $0.3 million, or 100.0% for the year ended December 31, 2025 as compared to the year ended December 31, 2024. This decrease was due to a decrease of $3.7 million, or 7.6%, in Pre-Incentive Fee Net Investment Income for the year ended December 31, 2025 as compared to the year ended December 31, 2024 and an Incentive Fee Cap calculated based on the Incentive Fee Cap and Deferral Mechanism in our Investment Management Agreement of $8.9 million for the year ended December 31, 2025 as compared to an Incentive Fee Cap of $9.3 million for the year ended December 31, 2024. The Incentive Fee Cap and Deferral Mechanism resulted in $8.9 million of reduced incentive fee expense and increased net investment income for the year ended December 31, 2025. The incentive fee on pre-incentive fee net investment income was subject to the Incentive Fee Cap for the year ended December 31, 2025 due to the cumulative incentive fees paid exceeding 20% of cumulative pre-incentive fee net return during the applicable quarter and the 11 preceding full calendar quarters. Performance based incentive fee expense decreased by $2.8 million, or 90.5%, to $0.3 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. This decrease was due to a decrease of $16.5 million, or 25.5%, in Pre-Incentive Fee Net Investment Income for the year ended December 31, 2024 as compared to the year ended December 31, 2023 and an Incentive Fee Cap calculated based on the Incentive Fee Cap and Deferral Mechanism in our Investment Management Agreement of $9.3 million for the year ended December 31, 2024 as compared to an Incentive Fee Cap of $9.8 million for the year ended December 31, 2023. The Incentive Fee Cap and Deferral Mechanism resulted in $9.3 million of reduced incentive fee expense and increased net investment income for the year ended December 31, 2024. The incentive fee on pre-incentive fee net investment income was subject to the Incentive Fee Cap for the year ended December 31, 2024 due to the cumulative incentive fees paid exceeding 20% of cumulative pre-incentive fee net return during the applicable quarter and the 11 preceding full calendar quarters.
Previous wording
In 2024 and 2023, we elected to carry forward taxable income in excess of current year distributions into the next tax year and pay a 4% excise tax on such income. For the years ended December 31, 2024 and 2023, we elected to carry forward taxable income in excess of current year distributions of $38.4 million and $38.6 million, respectively. At December 31, 2024 and 2023, excise tax payable of $1.5 million was recorded.
Current wording
In 2025 and 2024, we elected to carry forward taxable income in excess of current year distributions into the next tax year and pay a 4% excise tax on such income. For the years ended December 31, 2025 and 2024, we elected to carry forward taxable income in excess of current year distributions of $27.6 million and $38.4 million, respectively. At December 31, 2025 and 2024, excise tax payable of $1.1 million and $1.5 million, respectively, was recorded.
Previous wording
Administrative fee expense, professional fees and general and administrative expenses were $5.8 million, $5.7 million and $4.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Current wording
Administrative fee expense, professional fees and general and administrative expenses were $6.0 million, $5.8 million and $5.7 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Previous wording
Realized gains or losses on investments are measured by the difference between the net proceeds from the repayment or sale and the cost basis of our investments without regard to unrealized appreciation or depreciation previously recognized. Realized gains or losses on investments include investments charged off during the period, net of recoveries. The net change in unrealized appreciation or depreciation on investments primarily reflects the change in portfolio investment fair values during the reporting period, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.
Current wording
Realized gains or losses on investments are measured by the difference between the net proceeds from the repayment or sale and the cost basis of our investments without regard to unrealized appreciation or depreciation previously recognized. Realized gains or losses on investments include investments charged off during the period, net of recoveries. The net unrealized appreciation or depreciation on investments primarily reflects the change in portfolio investment fair values during the reporting period, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.
Previous wording
During the year ended December 31, 2024, we realized net losses on investments totaling $34.6 million primarily due to the settlement of two of our debt investments and the realization of one of our warrant investments. Such net realized losses were primarily the result of portfolio companies ceasing operations due to their inability to raise additional capital and the sale of their assets for less than the cost of their debt investments. During the year ended December 31, 2023, we realized net losses on investments totaling $29.7 million primarily due to the settlement of four of our debt investments. Such net realized losses were primarily the result of portfolio companies ceasing operations due to their inability to raise additional capital and the sale of their assets for less than the cost of their debt investments. During the same period, we repaid our 2019 Asset-Backed Notes in full which resulted in a realized loss on debt extinguishment of $0.2 million.
Current wording
During the year ended December 31, 2025, we realized net losses on investments totaling $55.1 million primarily due to the settlement of four debt investments, three equity investments and two other investments partially offset by the realization of two warrant investments. Such net realized losses were primarily the result of portfolio companies ceasing operations due to their inability to raise additional capital and the sale of their assets for less than the cost of their debt investments. During the same period, we converted $25.8 million in outstanding principal of the Convertible Notes which resulted in a realized loss on extinguishment of debt of $1.9 million. During the same period, we elected to exercise our option to redeem the outstanding balance of our 2022 Asset-Backed Notes (as defined below) which resulted in a realized loss on debt extinguishment of $0.9 million. During the year ended December 31, 2024, we realized net losses on investments totaling $34.6 million primarily due to the settlement of two of our debt investments and the realization of one of our warrant investments. Such net realized losses were primarily the result of portfolio companies ceasing operations due to their inability to raise additional capital and the sale of their assets for less than the cost of their debt investments.
Previous wording
During the year ended December 31, 2024, we recorded net unrealized depreciation on investments totaling $18.8 million which was primarily due to (1) the unrealized depreciation on five of our debt investments, (2) the unrealized depreciation on one of our other investments and (3) the reversal of previously unrealized appreciation from the realization of one of our warrant investments offset by (1) the reversal of previously recorded unrealized depreciation from the settlement of one of our debt investments and (2) the unrealized appreciation on one of our other investments. During the year ended December 31, 2023, we recorded net unrealized depreciation on investments totaling $48.8 million which was primarily due to (1) the unrealized depreciation on three of our debt investments (2) the unrealized depreciation on two of our equity investments and (3) the unrealized depreciation on our warrant investments partially offset by the reversal of previously recorded unrealized depreciation from the settlement of three of our debt investments.
Current wording
During the year ended December 31, 2025, net unrealized appreciation on investments totaled $10.9 million which was primarily due to (1) the reversal of previously recorded unrealized depreciation from the settlement of three debt investment, one other investment, one equity investment, (2) the unrealized appreciation on one equity investment, and (3) the unrealized appreciation on the acquisition of debt investments partially offset by (1) the unrealized depreciation of three debt investments, three other investments and two equity investments and (2) the reversal of previously recorded unrealized appreciation from the realization of two warrant investments. During the year ended December 31, 2024, net unrealized depreciation on investments totaled $18.8 million which was primarily due to (1) the unrealized depreciation on five of our debt investments, (2) the unrealized depreciation on one of our other investments and (3) the reversal of previously unrealized appreciation from the realization of one of our warrant investments offset by (1) the reversal of previously recorded unrealized depreciation from the settlement of one of our debt investments and (2) the unrealized appreciation on one of our other investments.
Previous wording
As of December 31, 2024 and 2023, we had cash and investments in money market funds of $97.5 million and $73.1 million, respectively. Cash and investments in money market funds are available to fund new investments, reduce borrowings, pay expenses, repurchase common stock and pay distributions. In addition, as of December 31, 2024 and 2023, we had $3.3 million and $2.6 million, respectively, of restricted investments in money market funds. Restricted investments in money market funds may be used to make monthly interest and principal payments on our 2022 Asset-Backed Notes, our NYL Facility or our Nuveen Facility. Our primary sources of capital have been from our public equity offerings, use of our Credit Facilities, and issuance of our public and private debt securities.
Current wording
As of December 31, 2025 and 2024, we had cash and investments in money market funds of $140.2 million and $97.5 million, respectively. Cash and investments in money market funds are available to fund new investments, reduce borrowings, pay expenses, repurchase common stock and pay distributions. In addition, as of December 31, 2025 and 2024, we had $2.5 million and $3.3 million, respectively, of restricted investments in money market funds. Restricted investments in money market funds may be used to make monthly interest and principal payments on our 2022 Asset-Backed Notes (as defined below), our NYL Facility or our Nuveen Facility. Our primary sources of capital have been from our public equity offerings, use of our Credit Facilities, and issuance of our public and private debt securities.
Previous wording
On September 22, 2023, we terminated the 2021 Equity Distribution Agreement and entered into a new ATM sales agreement, or the 2023 Equity Distribution Agreement, with the Sales Agents. The remaining shares available under the 2021 Equity Distribution Agreement are no longer available for issuance. The 2023 Equity Distribution Agreement provides that we may offer and sell shares of our common stock from time to time through the Sales Agents up to $150.0 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.
Current wording
On September 22, 2023, we entered into an At-The-Market, or ATM, sales agreement, or the 2023 Equity Distribution Agreement, with Goldman Sachs & Co. LLC and B. Riley FBR, Inc., each a Sales Agent and, collectively, the Sales Agents. The 2023 Equity Distribution Agreement provides that we may offer and sell shares of our common stock from time to time through the Sales Agents up to $150.0 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.
Previous wording
During the year ended December 31, 2024, we sold 6,300,095 shares of common stock under the 2023 Equity Distribution Agreement. For the same period, we received total accumulated net proceeds of approximately $66.4 million, including $1.4 million of offering expenses, from these sales. During the year ended December 31, 2023, we sold 2,248,830 shares of common stock under the 2023 Equity Distribution Agreement and the 2021 Equity Distribution Agreement. For the same period, we received total accumulated net proceeds of approximately $26.2 million, including $0.7 million of offering expenses, from these sales.
Current wording
During the year ended December 31, 2025, we sold 1,974,553 shares of common stock under the 2023 Equity Distribution Agreement. For the same period, we received total accumulated net proceeds of approximately $14.1 million, including $0.6 million of offering expenses, from these sales. During the year ended December 31, 2024, we sold 6,300,095 shares of common stock under the 2023 Equity Distribution Agreement. For the same period, we received total accumulated net proceeds of approximately $66.4 million, including $1.4 million of offering expenses, from these sales.
Previous wording
On April 26, 2024, our Board extended a previously authorized stock repurchase program which allows us to repurchase up to $5.0 million of our common stock at prices below our NAV per share as reported in our most recent consolidated financial statements. Under the repurchase program, we may, but are not obligated to, repurchase shares of our outstanding common stock in the open market or in privately negotiated transactions from time to time. Any repurchases by us will comply with the requirements of Rule 10b‑18 under the Exchange Act and any applicable requirements of the 1940 Act. Unless extended by our Board, the repurchase program will terminate on the earlier of June 30, 2025 or the repurchase of $5.0 million of our common stock. During the years ended December 31, 2024, 2023 and 2022, we did not make any repurchases of our common stock. From the inception of the stock repurchase program through December 31, 2024, we repurchased 167,465 shares of our common stock at an average price of $11.22 on the open market at a total cost of $1.9 million.
Current wording
On April 25, 2025, our Board extended a previously authorized stock repurchase program which allows us to repurchase up to $5.0 million of our common stock at prices below our NAV per share as reported in our most recent consolidated financial statements. Under the repurchase program, we may, but are not obligated to, repurchase shares of our outstanding common stock in the open market or in privately negotiated transactions from time to time. Any repurchases by us will comply with the requirements of Rule 10b‑18 under the Exchange Act and any applicable requirements of the 1940 Act. Unless extended by our Board, the repurchase program will terminate on the earlier of June 30, 2026 or the repurchase of $5.0 million of our common stock. On August 5, 2025, our Board authorized an increase in the maximum amount of shares 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 $5,000,000 of shares to up to $10,000,000 of shares, provided such purchases, in the aggregate, do not exceed two percent (2%) of the shares outstanding at the time of purchase and such shares are purchased only when the such shares are trading below 90% of our most recently disclosed NAV per share. During the years ended December 31, 2025, 2024 and 2023, we did not make any repurchases of our common stock. From the inception of the stock repurchase program through December 31, 2025, we repurchased 167,465 shares of our common stock at an average price of $11.22 on the open market at a total cost of $1.9 million. From time to time, our Board assesses the size and effectiveness of the stock repurchase program and could elect to increase or decrease the size of the program in the future.
Previous wording
At December 31, 2024, there was no outstanding principal balance under the Key Facility. At December 31, 2023, the outstanding principal balance under the Key Facility was $70.0 million. As of December 31, 2024 and 2023, we had borrowing capacity under the Key Facility of $150.0 million and $80.0 million, respectively. At December 31, 2024 and 2023, $24.8 million and $25.0 million, respectively, was available for borrowing under the Key Facility, subject to existing terms and advance rates.
Current wording
At December 31, 2025 and 2024, there was no outstanding principal balance under the Key Facility. As of December 31, 2025 and 2024, we had borrowing capacity under the Key Facility of $150.0 million. At December 31, 2025 and 2024, $49.6 million and $24.8 million, respectively, was available for borrowing under the Key Facility, subject to existing terms and advance rates.
Previous wording
At December 31, 2024 and 2023, the outstanding principal balance under the NYL Facility was $181.0 million. As of December 31, 2024 and 2023, we had borrowing capacity under the NYL Facility of $69.0 million. At December 31, 2024 and 2023, $8.4 million and $17.4 million, respectively, was available for borrowing under the NYL Facility, subject to existing terms and advance rates.
Current wording
At December 31, 2025 and 2024, the outstanding principal balance under the NYL Facility was $181.0 million. As of December 31, 2025 and 2024, we had borrowing capacity under the NYL Facility of $69.0 million. At December 31, 2025 and 2024, $1.9 million and $8.4 million, respectively, was available for borrowing under the NYL Facility, subject to existing terms and advance rates.
Previous wording
Our operating activities used cash of $246.3 million for the year ended December 31, 2022, and our financing activities provided cash of $229.5 million for the same period. Our operating activities used cash primarily to purchase investments in portfolio companies partially offset by principal payments received on our debt investments. Our financing activities provided cash primarily from the completion of the 2027 Notes, the completion of our 2022 Asset-Backed Notes, advances on our Credit Facilities, the sale of shares through our ATM for net proceeds of $50.3 million, after deducting underwriting commission and discounts and other offering expenses and the completion of a follow-on public offering of 2.5 million shares of common stock for net proceeds of $34.3 million, after deducting underwriting commission and discounts and other offering expenses, partially offset by the use of cash to repay a portion of the outstanding principal under our Key Facility, to repay our 2019 Asset-Backed Notes, and to pay distributions to our stockholders.
Current wording
Our operating activities provided cash of $56.6 million for the year ended December 31, 2025, and our financing activities used cash of $14.8 million for the same period. Our operating activities provided cash primarily from principal payments received on our debt investments partially offset by purchases of investments in portfolio companies. Our financing activities provided cash primarily from the completion of our 2028 Notes, the completion of our 2030 Convertible Notes, advances on our Credit Facilities and the sale of shares through our ATM for net proceeds of $14.1 million, after deducting underwriting commission and discounts and other offering expenses, partially offset by the use of cash to repay our 2022 Asset-Backed Notes and to pay distributions to our stockholders.
Previous wording
Our operating activities provided cash of $3.9 million for the year ended December 31, 2024, and our financing activities provided cash of $21.2 million for the same period. Our operating activities provided cash primarily from principal payments received on our debt investments partially offset by purchases investments in portfolio companies. Our financing activities provided cash primarily from advances on our Credit Facilities, the sale of shares through our ATM for net proceeds of $66.4 million, after deducting underwriting commission and discounts and other offering expenses and the completion of our 2031 Convertible Notes, partially offset by the use of cash to repay a portion the outstanding principal under our Key Facility, to repay our 2019 Asset-Backed Notes, and to pay distributions to our stockholders.
Current wording
Our operating activities provided cash of $3.9 million for the year ended December 31, 2024, and our financing activities provided cash of $21.1 million for the same period. Our operating activities provided cash primarily from principal payments received on our debt investments partially offset by purchases of investments in portfolio companies. Our financing activities provided cash primarily from advances on our Credit Facilities, the sale of shares through our ATM for net proceeds of $66.4 million, after deducting underwriting commission and discounts and other offering expenses and the completion of our 2031 Convertible Notes, partially offset by the use of cash to repay a portion the outstanding principal under our Key Facility, to repay our 2019 Asset-Backed Notes, and to pay distributions to our stockholders.
Previous wording
We entered into the Key Facility effective November 4, 2013. On June 20, 2024, we amended the Key Facility, among other things, (i) to extend the date on which we may request advances under the Key Facility to June 20, 2027 and to extend the maturity date to June 20, 2029 and (ii) to amend the interest rate to be based on the rate of interest published in The Wall Street Journal as the prime rate in the United States plus 0.10%, with a prime rate floor of 4.10%. Prior to June 20, 2024, the interest rate on the Key Facility was based on Prime plus 0.25%, with a prime rate floor of 4.25%. The prime rate was 7.50% and 8.50% as of December 31, 2024 and 2023, respectively. The interest rate in effect was 7.60% and 8.75% as of December 31, 2024 and 2023. The Key Facility requires the payment of an unused line fee in an amount up to 0.75% of any unborrowed amount available under the facility annually.
Current wording
We entered into the Key Facility effective November 4, 2013. On June 20, 2024, we amended the Key Facility, among other things, (i) to extend the date on which we may request advances under the Key Facility to June 20, 2027 and to extend the maturity date to June 20, 2029 and (ii) to amend the interest rate to be based on the rate of interest published in The Wall Street Journal as the prime rate in the United States plus 0.10%, with a prime rate floor of 4.10%. Prior to June 20, 2024, the interest rate on the Key Facility was based on Prime plus 0.25%, with a prime rate floor of 4.25%. The prime rate was 6.75% and 7.50% as of December 31, 2025 and 2024, respectively. The interest rate in effect was 6.85% and 7.60% as of December 31, 2025 and 2024, respectively. The Key Facility requires the payment of an unused line fee in an amount up to 0.75% of any unborrowed amount available under the facility annually.
Previous wording
HFI is a wholly-owned subsidiary of HSLFI. 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. 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.
Current wording
HFI is a wholly-owned subsidiary of HSLFI. 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. 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. All advances under the NYL Facility are scheduled to mature in June 2030.
Previous wording
On May 24, 2023, we amended the NYL Facility to, among other things, increase the commitment by $50.0 million to enable our wholly-owned subsidiary to issue up to $250.0 million of secured notes. In addition, the amendment amended the interest rate for advances made after May 24, 2023, fixing the interest rate at the greater of (i) 4.60% and (ii) the Three Year I-Curve plus 3.50% with the interest rate to be reset on any advance date.
Current wording
On May 24, 2023, we amended the NYL Facility to, among other things, increase the commitment by $50.0 million to enable our wholly-owned subsidiary to issue up to $250.0 million of secured notes. On April 25, 2025, we amended the NYL Facility to, among other things, extend the investment period to June 5, 2027. In addition, the amendment amended the interest rate for advances made after April 25, 2025, fixing the interest rate at the greater of (i) 4.60% and (ii) the Three Year I-Curve plus 2.95% with the interest rate to be reset on any advance date.
Previous wording
There were $181.0 million in notes issued to the NYL Noteholders as of December 31, 2024 and 2023 at an interest rate of 6.47% and 5.96%, respectively. As of December 31, 2024 and 2023, we had borrowing capacity under the NYL Facility of $69.0 million. At December 31, 2024 and 2023, $8.4 million and $17.4 million, respectively, was available for borrowing, subject to existing terms and advance rates.
Current wording
There were $181.0 million in notes issued to the NYL Noteholders as of December 31, 2025 and 2024 at an interest rate of 6.57% and 6.47%, respectively. As of December 31, 2025 and 2024, we had borrowing capacity under the NYL Facility of $69.0 million. At December 31, 2025 and 2024, $1.9 million and $8.4 million, respectively, was available for borrowing, subject to existing terms and advance rates.
Previous wording
HFII entered into the Nuveen Facility with the Nuveen 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 us and the Nuveen Noteholders. On June 21, 2024, we sold or contributed to HFII certain secured loans made to certain portfolio companies pursuant to the Sale and Servicing Agreement. Any notes issued by HFII are collateralized by all investments held by HFII and permit an advance rate of up to 67.5% of the aggregate principal amount of eligible debt investments. The Nuveen Facility bears interest, payable monthly, determined at a rate per annum equal to the greater of (i) the yield for the United States Treasury constant maturity 3-year and 5-year in the most recent statistical release published by the Board of Governors of the Federal Reserve System designated as “Selected Interest Rates (Daily) – H.15” interpolated to a 4.88-year weighted average life plus 3.15% and (ii) 5.00%. We may request advances under the Nuveen Facility through June 21, 2027 and the Nuveen Facility is scheduled to mature on June 10, 2033.
Current wording
HFII entered into the Nuveen Facility with the Nuveen 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 us and the Nuveen Noteholders. On June 21, 2024, we sold or contributed to HFII certain secured loans made to certain portfolio companies pursuant to the Sale and Servicing Agreement. Any notes issued by HFII are collateralized by all investments held by HFII and permit an advance rate of up to 67.5% of the aggregate principal amount of eligible debt investments. The Nuveen Facility bore interest, payable monthly, determined at a rate per annum equal to the greater of (i) the yield for the United States Treasury constant maturity 3-year and 5-year in the most recent statistical release published by the Board of Governors of the Federal Reserve System designated as “Selected Interest Rates (Daily) – H.15” interpolated to a 4.88-year weighted average life, or the Pricing Benchmark, plus 3.15% and (ii) 5.00%.
Previous wording
On May 6, 2024, we amended the NYL Facility to, among other things, extend the investment period to June 2025 and the maturity date of all advances to June 2030. In addition, the amendment amended the interest rate for advances made after May 6, 2024, fixing the interest rate at the greater of (i) 4.60% and (ii) the Three Year I Curve plus 3.20%, with the interest rate to be reset on any advance date.
Current wording
On May 23, 2025, we amended the Nuveen Facility to, among other things, extend the investment period to June 21, 2028 and the maturity date to June 10, 2034, and increase the commitment by $100.0 million which enables our wholly-owned subsidiary to issue up to $200.0 million of secured notes. In addition, the amendment amended the interest rate for advances made after May 23, 2025, fixing the interest rate at the greater of (i) 5.00% and (ii) the Pricing Benchmark plus 2.95%.
Previous wording
Under the terms of the Nuveen Facility, we are required to maintain a reserve cash balance, which may be used to pay monthly interest and principal payments on the Nuveen Facility. We have segregated these funds and classified them as restricted investments in money market funds. At December 31, 2024, there were approximately $1.0 million of such restricted investments.
Current wording
Under the terms of the Nuveen Facility, we are required to maintain a reserve cash balance, which may be used to pay monthly interest and principal payments on the Nuveen Facility. We have segregated these funds and classified them as restricted investments in money market funds. At December 31, 2025 and 2024, there were approximately $1.1 million and $1.0 million, respectively, of such restricted investments.
Previous wording
There were $75.0 million in notes issued to the Nuveen Noteholders as of December 31, 2024 at an interest rate of 7.14%. As of December 31, 2024, we had borrowing capacity under the Nuveen Facility of $25.0 million. At December 31, 2024, $9.9 million, was available for borrowing, subject to existing terms and advance rates. The Nuveen Facility was not outstanding at December 31, 2023.
Current wording
There were $90.0 million and $75.0 million in notes issued to the Nuveen Noteholders as of December 31, 2025 and 2024, at an interest rate of 7.21% and 7.14%, respectively. As of December 31, 2025 and 2024, we had borrowing capacity under the Nuveen Facility of $110.0 million and $25.0 million, respectively. At December 31, 2025 and 2024, $12.1 million and $9.9 million was available for borrowing, subject to existing terms and advance rates, respectively.
Previous wording
On August 13, 2019, the 2019 Asset-Backed Notes were issued by the 2019‑1 Trust pursuant to a note purchase agreement, dated as of August 13, 2019, by and among us and Keybanc Capital Markets Inc. as Initial Purchaser, and were backed by a pool of loans made to certain portfolio companies of ours and secured by certain assets of those portfolio companies. The 2019 Asset-Backed Notes were rated A+(sf) by Morningstar Credit Ratings, LLC on August 13, 2019. The 2019 Asset-Backed Notes bore interest at a fixed rate of 4.21% per annum and had a stated maturity of September 15, 2027. As of December 31, 2023, the 2019 Asset-Backed Notes were repaid in full.
Current wording
On November 9, 2022, $100.00 million in aggregate principal amount of fixed rate asset-backed notes, or the 2022 Asset-Backed Notes, were issued in conjunction with the $157.8 million securitization of secured loans were issued by Horizon Funding Trust 2022‑1, a Delaware Trust, pursuant to a note purchase agreement by and among us and Keybanc Capital Markets Inc. as Initial Purchaser and were backed by a pool of loans made to certain portfolio companies of ours and secured by certain assets of those portfolio companies. The 2022 Asset-Backed Notes were rated A by Morningstar Credit Ratings, LLC on November 9, 2022. The 2022 Asset-Backed Notes bore at a fixed rate of 7.56% per annum and had a stated maturity of November 15, 2030. As of December 31, 2025, the 2022 Asset-Backed Notes were repaid in full. As of December 31, 2024, the 2022-1 Asset-Backed Notes had an outstanding principal balance of $81.1 million.
Previous wording
On March 30, 2021, we issued and sold an aggregate principal amount of $57.5 million of 4.875% notes due in 2026. The amount of 2026 Notes issued and sold included the full exercise by the underwriters of their option to purchase $7.5 million in 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 our 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. The 2026 Notes are our direct unsecured obligations and (i) rank equally in right of payment with our current and future unsecured indebtedness; (ii) are senior in right of payment to any of our future indebtedness that expressly provides it is subordinated to the 2026 Notes; (iii) are effectively subordinated to all of our existing and future secured indebtedness (including indebtedness that is initially unsecured to which we subsequently grant security), to the extent of the value of the assets securing such indebtedness, and (iv) are structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries. As of December 31, 2024, we were in material compliance with the terms of the 2026 Notes. The 2026 Notes are listed on the New York Stock Exchange under the symbol “HTFB”.
Current wording
On March 30, 2021, we issued and sold an aggregate principal amount of $57.5 million of 4.875% notes due in 2026. The amount of 2026 Notes issued and sold included the full exercise by the underwriters of their option to purchase $7.5 million in aggregate principal of additional notes. The 2026 Notes had a stated maturity of March 30, 2026 and could have been redeemed in whole or in part at our 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 bore interest at a rate of 4.875% per year, payable quarterly on March 30, June 30, September 30 and December 30 of each year. The 2026 Notes were our direct unsecured obligations and (i) ranked equally in right of payment with our current and future unsecured indebtedness; (ii) were senior in right of payment to any of our future indebtedness that expressly provides it is subordinated to the 2026 Notes; (iii) were effectively subordinated to all of our existing and future secured indebtedness (including indebtedness that is initially unsecured to which we subsequently grant 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 our subsidiaries. As of December 31, 2025, we were in material compliance with the terms of the 2026 Notes. The 2026 Notes were listed on the New York Stock Exchange under the symbol “HTFB”. On January 28, 2026, we redeemed all of the outstanding principal balance of the 2026 Notes plus accrued interest.
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Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
On September 4, 2025, we entered into a note purchase agreement, or the 2030 Note Purchase Agreement, by and among us and each purchaser named therein, in connection with the issuance and sale of $40.0 million aggregate principal of our 5.50% 2030 Convertible Notes in a transaction exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. We received net proceeds (before expenses) from the sale of the 2030 Convertible Notes of approximately $36.6 million.
Current report — wording carried from elsewhere
The 2030 Convertible Notes have a stated maturity of September 4, 2030, unless earlier converted or repurchased in accordance with their terms. The 2030 Convertible Notes bear interest at a rate of 5.50% per year, payable monthly in arrears on the last day of each calendar month, beginning on September 30, 2025.
Current report — wording carried from elsewhere
At any time on or after April 17, 2025, at our sole option, we may redeem, from time to time, the 2031 Convertible Notes in whole or in part, out of funds legally available for such redemption, at 100% of the principal amount prepaid plus accrued but unpaid interest to but excluding the date of prepayment.
Current report — wording carried from elsewhere
Each holder of a 2031 Convertible Note has the right, at such holder’s option, to convert any such 2031 Convertible Note, at any time on or after April 17, 2025 and prior to the close of business on the business day immediately preceding the maturity date, into such number of shares of our common stock equal to the principal balance of the 2031 Convertible Note being converted on the conversion date plus the accrued but unpaid interest on the 2031 Convertible Note as of the conversion date, divided by the greater of (i) volume-weighted average closing sale price for the five trading days immediately prior to the relevant conversion date, or (ii) our most recently reported NAV per share immediately prior to the date of exercise.
Current report — wording carried from elsewhere
No holder of 2031 Convertible Notes may exercise its conversion right if upon conversion the holder would receive shares that would cause funds and accounts managed by the investment adviser to such funds and accounts and any person controlled by the parent company of such investment adviser to beneficially own in the aggregate more than 4.99% of the shares outstanding at such time.
Current report — wording carried from elsewhere
The 2031 Convertible Notes are not listed on any exchange and may not be transferred without our consent.
Current report — wording carried from elsewhere
As of December 31, 2025 and 2024, the aggregate outstanding principal balance of the 2031 Convertible Notes was $2.8 million and $20.0 million, respectively.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
On August 2, 2021, we entered into an At-The-Market, or ATM, sales agreement, or the 2021 Equity Distribution Agreement, with Goldman Sachs & Co. LLC and B. Riley FBR, Inc., each a “Sales Agent” and, collectively, the “Sales Agents”. The 2021 Equity Distribution Agreement provided that we may offer and sell shares of our common stock 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.
Previous report — wording carried elsewhere
On November 9, 2022, the 2022 Asset-Backed Notes were issued by the 2022‑1 Trust pursuant to a note purchase agreement, dated as of November 9, 2022, by and among us and Keybanc Capital Markets Inc. as Initial Purchaser, and are backed by a pool of loans made to certain portfolio companies of ours and secured by certain assets of those portfolio companies and are to be serviced by us. Interest on the 2022 Asset-Backed Notes will be paid, to the extent of funds available, at a fixed rate of 7.56% per annum. The 2022 Asset-Backed Notes have a two-year reinvestment period and a stated maturity of November 15, 2030. The 2022 Asset-Backed Notes were rated A by Morningstar Credit Ratings, LLC on November 9, 2022. There has been no change in the rating since November 9, 2022.
Previous report — wording carried elsewhere
As of December 31, 2024 and 2023, the 2022 Asset-Backed Notes had an outstanding principal balance of $81.1 million and $100.0 million, respectively.
Previous report — wording carried elsewhere
Between January 3 and January 23, 2025, we sold 404,305 shares of common stock under the 2023 Equity Distribution Agreement. For the same period, we received total accumulated net proceeds of approximately $3.7 million, including $0.1 million of offering expenses, from these sales.
Previous report — wording carried elsewhere
Our Advisor agreed to waive the portion of its quarterly income incentive fee, if any, if and to the extent that, after payment of such portion, our net investment income per share for such quarter would be less than the quarterly distribution per share declared in such quarter. The income incentive fee waiver will be effective commencing with the quarter ending March 31, 2025 and terminating with the quarter ending December 31, 2025.