Horizon Technology Finance Corp. (HRZN) reported its financial results for the year ended December 31, 2025, showcasing a mix of investment activity and strategic developments. The specialty finance company, which lends to and invests in development-stage companies within the technology, life science, healthcare information and services, and sustainability industries, saw its total investment income decrease to $96.0 million, a 3.9% decline from the $99.9 million reported in 2024. This decrease was primarily attributed to a reduction in interest income on debt investments, which fell by 6.7% to $90.5 million, influenced by a decrease in average earning debt investments and a decrease in the Prime Rate.
Despite the dip in investment income, HRZN's total expenses remained relatively stable, decreasing slightly by 0.2% to $50.5 million. This included interest expense, which increased by 1.7% to $32.8 million due to a higher effective cost of debt, and a base management fee expense of $11.7 million, a 4.2% decrease from the previous year. The company also reported a net realized loss of $57.9 million and net unrealized appreciation on investments of $10.9 million, resulting in a net decrease in net assets from operations of $2.7 million. The dollar-weighted annualized yield on average debt investments was 15.8% for 2025, while the overall total yield on the investment portfolio was 14.6%.
A significant strategic development for HRZN was the planned merger with Monroe Capital Corporation (MRCC), outlined in an agreement entered on August 7, 2025. The merger, subject to shareholder approval and other customary conditions, involves MRCC merging into a wholly-owned subsidiary of HRZN, followed by a subsequent merger into HRZN itself. As part of the transaction, MRCC will sell its investment assets and liabilities to Monroe Capital Income Plus Corporation (MCIP) for cash. The merger proxy was distributed to shareholders on January 20, 2026, with a special meeting scheduled for March 13, 2026, to vote on the proposal.
Operationally, HRZN's debt investment portfolio consisted of 38 debt investments with a fair value of $596.0 million as of December 31, 2025. The company also held warrants in 72 portfolio companies and equity positions in 17. The company's investment portfolio had an overall total yield of 14.6%. The company's debt investments had a dollar-weighted average term of 53.0 months from inception and a dollar-weighted average remaining term of 37.0 months. The company's investment activities are managed by its Advisor, Horizon Technology Finance Management LLC, which is led by senior managers including Michael P. Balkin (CEO), Daniel R. Trolio (CFO), John C. Bombara (General Counsel), and Paul G. Seitz (CIO).
About Horizon Technology Finance Corp
Horizon Technology Finance is a specialty finance company providing secured venture loans and investments to development-stage companies in technology, life sciences, healthcare, and sustainability sectors. It offers debt, warrants, and equity positions, focusing on generating income and capital appreciation. Managed by an experienced advisor, it leverages direct origination, disciplined underwriting, and industry relationships to support innovative companies and maximize investor returns.
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