Horizon Technology Finance Corp

We are subject to certain legal proceedings, from time to time, in the ordinary course of business. From time to time, we and our investment adviser may, in the ordinary course of business, be named as defendants in litigation arising from our investments in our portfolio companies and may, as a result, incur significant costs and expenses in connection with such litigation. We and our investment adviser are also subject to extensive regulation, which may result in regulatory proceedings or investigations against us or our investment adviser, respectively. While the outcome of any such future legal or regulatory proceedings cannot be predicted with certainty, neither us nor our investment adviser expect that any such future proceedings will have a material effect upon our financial condition or results of operations. As of September 30, 2026, the following developments have occurred with respect to the legal proceedings in which we are involved:

Notice of Dismissal of Monroe Merger Litigation and Agreement Upon Attorneys’ Fees**

On January 30, 2026, plaintiff Stephen Bushansky (the “Plaintiff”), a purported stockholder of the Company, filed a putative class action lawsuit captioned Bushansky v. Horizon Technology Finance Corporation, C.A. No. 2026-0136-PAF (the “Action”) in the Court of Chancery of the State of Delaware (the “Court”), naming as defendants the Company and members of the Board (together, the “Defendants”). The Action alleged, among other things, that the Board violated its fiduciary duties under Delaware law by failing to disclose purportedly material information regarding the Monroe Merger in the proxy statement included in the Form 424B3 (the “Proxy”) filed on January 20, 2026 with the SEC. The Plaintiff also filed a motion for expedited proceedings and a motion for a preliminary injunction. On March 6, 2026, without admitting any liability or wrongdoing, or that any supplemental disclosures were required under applicable laws, the Company filed a Form 8-K with the SEC voluntarily making certain additional disclosures to supplement those contained in the Proxy. On May 11, 2026, the Court granted a stipulation and proposed order voluntarily dismissing the Action as to Plaintiff only, and retaining jurisdiction solely for the purpose of adjudicating the anticipated application of the Plaintiff’s counsel for an award of attorneys’ fees and reimbursement of expenses in connection with the Action (the “Fee and Expense Application”). Following negotiations, the Company, while denying any and all liability on behalf of the Defendants and maintaining that the Proxy complies fully with all applicable laws, decided it was in its and its stockholders’ best interests to pay the Plaintiff’s counsel $32,500 in attorneys’ fees and expenses to resolve the Fee and Expense Application. The Court has not been asked to review, and will pass no judgment on, the payment of these attorneys’ fees and expenses.