Horizon Technology Finance Management LLC

ITEM 5: Fees and Compensation

Advisory Fees

For its advisory services to its Clients, HTFM typically receives a fee based on the amount of
assets under management, as well as certain incentive fees for performance, as set forth in the
Investment Agreement with such Client. HTFM does not have a set fee schedule for its advisory
services and fees and other compensation are negotiated with each Client.

Information concerning the fees and other compensation paid to HTFM by its Investment
Company Clients can be found in the Investment Company Client’s registration statement and
investment management agreement filed with the SEC. If there are questions regarding the fees
and compensation of an Investment Company Client, please contact HTFM as set forth on the
cover page to this Brochure.

Other Fees and Compensation

Non-Advisory Fees

For its non-advisory services to Non-Advisory Services Customers, HTFM typically receives a
servicing fee based on the principal amount of all debt investments made by each Non-Advisory
Services Customer, as set forth in the Program Agreement for each Non-Advisory Services
Customer. HTFM is also entitled to receive a performance-based fee as described in the Program
Agreement with each Non-Advisory Services Customer. Typically, the performance-based fee is
based on a percentage of cash flow from the investments the Non-Advisory Services Customer
makes in sourced deals after the return to the Non-Advisory Services Customer of all capital
invested by the Non-Advisory Services Customer and a certain preferred return. HTFM does not
have a set fee schedule for its non-advisory services and fees and other compensation are
negotiated with each Non-Advisory Services Customer.

Administrative Fees

HTFM may provide administrative services to its Clients pursuant to a written administrative
services agreement. For such administrative services, HTFM receives administrative fees and is
reimbursed for the Client’s allocable portion of HTFM’s administrative expense incurred in
providing such services, including rent and other overhead, and the costs of compensation and
related expenses of the chief compliance officer, the chief financial officer and their respective
staffs.

Other Fees and Customer Expenses

HTFM may provide other services to Non-Advisory Services Customers pursuant to the Program
Agreement with such Non-Advisory Services Customer. For such services, HTFM receives a
supplemental servicing fee from the Non-Advisory Services Customer as set forth in the Program
Agreement with such Non-Advisory Services Customer.

Depending on the Non-Advisory Services Customer’s written Program Agreement with HTFM,
HTFM may receive a commission from the Non-Advisory Services Customer for originating a
loan for the Non-Advisory Services Customer. Otherwise, HTFM does not receive commissions
for purchasing or selling stocks, bonds or other products. HTFM is not affiliated with entities that
sell financial products or securities. HTFM does not receive finder’s fees.

In addition to the fees described above, Customers reimburse HTFM for certain other fees and
expenses. Any such other fees and expenses are set forth in the Client’s written Investment
Agreement with HTFM or the Non-Advisory Services Customer’s written Program Agreement
with HTFM.

Customers are also responsible for certain other fees and expenses relating to such Customer’s
investments or accounts, including, among others, certain transaction charges, service provider

fees, organizational, operational and fund expenses, professional fees, valuation service fees, audit
fees, tax preparation fees, taxes and other governmental charges, insurance premiums or other
similar fees and expenses.

Allocation of Expenses

In circumstances where expenses are incurred by HTFM that are allocable to more than one
Customer, HTFM will allocate such expenses among all applicable Customers on a pro rata basis.

Payment of Fees and Expenses

The timing of payments relating to fees and other expenses is set forth in the Client’s Investment
Agreement or administrative services agreement or Non-Advisory Services Customer’s Program
Agreement. Asset-based and incentive fees are generally calculated quarterly in arrears based on
asset values as of the end of the quarter. Asset-based and incentive fees are either invoiced directly
to the Client or deducted directly from the Client’s account as set forth in the Client’s Investment
Agreement. If a Client begins or terminates its relationship with HTFM during the quarter, the
asset-based and incentive fees are prorated for the number of days during the quarter the Client
was a client of HTFM.

Servicing fees are generally calculated monthly in arrears based on the principal amount of debt
investments as of the end of the month. Performance-based fees are calculated in arrears. The
timing of payment of performance-based fees varies by Non-Advisory Services Customer and is
set forth in the Non-Advisory Services Customer’s Program Agreement. Servicing fees,
supplemental servicing fees and performance-based fees are paid by the Non-Advisory Services
Customer to HTFM as set forth in the Non-Advisory Services Customer’s Program Agreement. If
a Non-Advisory Services Customer begins or terminates its relationship with HTFM during the
performance period, the performance-based fees are prorated for the number of days during the
year the relationship between the Non-Advisory Services Customer and HTFM was in effect.

Administrative expenses are generally calculated quarterly in arrears. Administrative fees are
either invoiced directly to the Client or deducted directly from the Client’s account as set forth in
the Client’s administrative services agreement.

ITEM 7: Types of Clients

As described in Item 4: Advisory Services above, HTFM provides investment management
services to its advisory clients, including, but not limited to, closed-end management investment
companies that have elected to be regulated as BDCs, other management investment companies,
and other institutional clients.

HTFM also has, and in the future may have additional, non-advisory relationships with certain
entities, including Non-Advisory Services Customers, for which HTFM provides services and
receives compensation. These services are provided pursuant to a written agreement between
HTFM and such entity. While such entity is not an investment management Client of HTFM, in
certain circumstances and in HTFM’s discretion, HTFM may elect to treat such entities in the same
manner as it treats its Clients for purposes of HTFM’s policies and procedures, including allocation
of investment opportunities.