Horizon Technology Finance Corporation

Greetings and welcome to Horizon Technology Finance Corporation's second quarter 2021 earnings conference call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star one, star zero, excuse me, that is star zero on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Megan Fox. Thank you. You may begin.

Thank you, and welcome to the Horizon Technology Finance second quarter 2021 conference call. Representing the company today are Rob Pomeroy, Chairman and Chief Executive Officer, Jerry Michaud, President, and Dan Trollio, Chief Financial Officer. I would like to point out that the Q2 earnings press release and Form 10-Q are available on the company's website at horizontechfinance.com. Before we begin our formal remarks, I need to remind everyone that during this conference call, Horizon Technology Finance will make certain forward-looking statements, including statements with regard to the future performance of the company. Words such as believes, expects, anticipates, intends, or similar expressions are used to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ on a material basis from those projected in these forward-looking statements, and some of these factors are detailed in the risk factor discussion in the company's filings with the Securities and Exchange Commission, including the company's Form 10-K for the year ended December 31, 2020. The company undertakes no obligation to update or revise, any forward-looking statements, whether as a result of new information, future events, or otherwise. At this time, I would like to turn the call over to Rob Pomeroy.

Good morning. Thank you for joining us and for your continued interest in Horizon. Today, I will update you on Horizon's performance and its overall current operating environment. Jerry will then discuss our business development efforts and our markets. Dan will detail our operating performance and financial condition, and then we will take some questions. We had another strong performance in the second quarter of 2021 and made significant headway during the first half of the year in growing our portfolio. During the quarter, we grew our portfolio over the $400 million mark, a 6% increase from the end of the first quarter and up 15% from the end of 2020. We finished the quarter with a record committed backlog of $144 million. We generated net investment income of 31 cents per share in excess of our distribution level for the quarter. Based on our outlook and our undistributed spillover income of 34 cents per share as of June 30th, we declared monthly distributions through December, which marks 60 consecutive months at 10 cents per share. We achieved another industry-leading portfolio yield on our debt investments of 14.7 percent. We kept our portfolio credit profile stable and ended the quarter once again with no one-rated loans and no loans on non-accrual. We are consistently and actively managing our portfolio investments to maintain the credit quality of our portfolio. We ended the quarter with NAV of $11.20 per share, a 13 cent per share increase from March 31st. And we maintained a strong balance sheet with ample capacity to fund the ongoing growth of our portfolio. Earlier in the year, our advisor, Horizon Technology Finance Management, expanded its origination platform with a $100 million venture debt fund, which may co-invest with Horizon. We are already seeing the clear benefits of the new fund in terms of Horizon's recent portfolio growth. For the quarter, the advisors platform funded a record $100 million in business. The platform expansion is enabling Horizon to access and control additional opportunities in its core markets while further reducing its concentration risk. The new venture debt fund has the potential to expand to $300 million and to further broaden Horizon's investment opportunities. As part of our expansion, we continue to grow and develop our team. With the recent appointment of Dan Dvoracic to Chief Operating Officer and other promotions within our team, we continue to strengthen our bench as we prepare for the future. Entering the second half of the year, we believe we remain well positioned to continue growing our portfolio and generating strong NII due to the following. Demand for venture debt within our targeted industries continues to be at or near record levels. Our committed backlog and pipeline for investments are historically strong. Our advisor's new investment vehicle is enabling us to better compete for new loan opportunities. And we continue to maintain ample capacity on our balance sheet to execute on our backlog of commitments and pipeline of new opportunities. We generated another quarter of solid growth and are successfully competing for quality venture debt opportunities. With our strong brand in the venture debt market, robust balance sheet, disciplined underwriting, and enhanced platform, we remain in a prime position to further expand and diversify our portfolio and generate net investment income. I appreciate our entire team's continuing efforts which resulted in another strong quarter for Horizon and our shareholders. And with that, I will now turn the call over to Jerry.