Horizon NAV Falls After Single-Name Unrealized Losses

The Tip Desk · August 4, 2026 · 4 min read

Net asset value was $6.23 a share at June 30, 2026, after $38.5 million of net unrealized depreciation, or $0.59 a share.

Horizon Technology Finance Corporation (HRZN), a specialty finance company that lends to venture-backed technology and life-science businesses, reported net asset value of $6.23 a share at June 30, 2026, down from $6.98 a share at March 31, 2026.

Net assets were $417.5 million, or $6.23 a share, compared with $333.9 million, or $6.98 a share, three months earlier. The net decrease in net assets resulting from operations was $37.3 million, or ($0.57) a basic share, for the quarter.

Net unrealized depreciation on investments was $38.5 million, or $0.59 a share, compared with $22.2 million, or $0.54 a share, a year earlier. Chief Executive Officer Mike Balkin said the company was “disappointed to learn during June about some significant negative news for a single portfolio company, including the outlook for its future equity raising plans,” and that unrealized losses on debt and equity in that company “contributed significantly to our decrease in net asset value per share at quarter end.”

Net investment income was $7.4 million, or $0.11 a basic share, including $0.07 a share of non-recurring merger expenses, compared with $9.0 million, or $0.19 a basic share, in the first quarter. The company said the decline was primarily due to $4.4 million, or $0.07 a basic share, of those merger expenses. Excluding those costs, Balkin said NII covered regular distributions.

Total investment income was $25.0 million, which the company said was primarily due to higher interest income, including PIK income, on a larger debt investment portfolio. Total expenses were $17.4 million, up from $12.7 million a year earlier, primarily because of the $4.4 million of merger expenses and a $0.2 million increase in the base management fee, partly offset by a $0.4 million decrease in interest expense. The dollar-weighted annualized yield on average debt investments was 14.9%, down from 15.2% in the first quarter.

The total investment portfolio ended at $676.7 million, down from $695.7 million at March 31, 2026. The company funded nine loans totaling $72.7 million and recorded $41.6 million of early pay-offs and principal paydowns, $5.5 million of principal payments, $1.6 million of PIK interest, $2.8 million of fee accretion, $2.7 million of new debt investment fees, $1.9 million of sale proceeds, a $0.2 million RoHo joint-venture investment, a $6.1 million net realized loss and $38.5 million of net unrealized depreciation.

The debt portfolio consisted of 43 secured loans with an aggregate fair value of $648.0 million as of June 30, 2026, versus 38 loans with an aggregate fair value of $596.0 million as of December 31, 2025. Balkin said the company was pleased to grow the debt investment portfolio for the third consecutive quarter.

Effective June 30, 2026, Horizon changed its internal credit rating scale to the 1-to-5 scale used by Monroe Capital affiliates. On that scale, the weighted average credit rating was 2.3 as of June 30, 2026, versus 2.4 as of December 31, 2025 on a recast basis. Five loans rated 5 had an aggregate fair value of $31.3 million; four loans rated 4 had an aggregate fair value of $48.0 million.

Cash and money market funds were $135.0 million and credit facility capacity was $329.0 million, for available liquidity of $228.6 million, including $93.6 million under existing credit facility commitments. The committed backlog ended the quarter at $228 million, up approximately $50 million from the prior quarter-end after the April merger with Monroe Capital Corporation.

Liquidity events came from four portfolio companies, including a $30.0 million venture-loan payoff on an acquired company, $5.0 million and $4.3 million venture-loan payoffs, $1.3 million of warrant and equity redemptions and $1.0 million of warrant redemptions.

The company repurchased 1,365,222 shares at an average price of $4.54 for a total cost of $6.2 million. On August 3, 2026, the board increased the stock repurchase program to allow purchases of up to $20 million of common stock.

Undistributed spillover income was $0.33 a share as of June 30, 2026. The board declared regular distributions of $0.06 a share and special spillover distributions of $0.03 a share payable in October, November and December 2026.