Horizon Technology Finance Corporation

Greetings. Welcome to Horizon Technology Finance Corporation's third quarter 2021 earnings call. At this time, all participants are in 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 zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Megan Bacon to begin. Thank you.

Thank you, and welcome to the Horizon Technology Finance Corporation's third quarter 2021 conference call. Representing the company today are Rob Pomeroy, Chairman and Chief Executive Officer, Jerry Michaud, President, and Dan Trulio, Chief Financial Officer. I would like to point out that the Q3 earnings press release and Form 10Q 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, the company will make certain forward-looking statements, including statements with regards 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 filing for the Securities and Exchange Commission, including the company's Form 10-K for the year ended December 31st, 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 our performance and our current overall operating environment. Jerry will then discuss our business development efforts, our portfolio events, and our markets. Dan will detail our operating performance and financial condition, and then we will take some questions. Our third quarter was a testament to the power of the Horizon brand and the lending platform of our advisor, Horizon Technology Finance Management, as well as our continuing efforts to grow our portfolio. We executed in all aspects of our operations, and we are proud of the results. During the quarter, our portfolio grew to more than $450 million, a 12% increase from the end of the second quarter, and up 28% from the end of 2020. These numbers are even more impressive when you consider that the portfolio experienced $50 million in prepayments during the third quarter. We finished the third quarter with a committed backlog of $101 million, providing us with momentum to continue our portfolio growth. We generated net investment income of $0.40 per share, well in excess of our distribution level for the quarter, thanks to the continued success of our predictive pricing strategy. Based on our outlook and our undistributed spillover income of 44 cents per share as of September 30th, we declared monthly distributions through March of 2022, which marks 63 consecutive months at 10 cents per share. In addition, we declared a special distribution of 5 cents per share, payable in December. We achieved a portfolio yield on our debt investments of 16.2%, at or near the top of the BDC industry. We maintained a stable portfolio credit profile with 97% of our portfolio rated 3 or higher. We are consistently and actively managing our portfolio of investments to maintain its credit quality. We ended the quarter with NAV of $11.63 per share, a $0.43 per share increase from June 30th. resulting from a combination of out-earning our distributions, accretive share issuances, and increases in fair value of some of our investments. Finally, our balance sheet remains strong, with ample capacity to fund more growth in our portfolio and move closer to our target leverage of 1.2 to 1. We achieved these excellent results due to our advisors' incredible team, focused predictive pricing strategy, discipline in selecting quality investments, and expanded lending platform. For the quarter, the advisor's platform funded a record $141 million in new business in what is typically a lighter quarter for originations. Our advisor is competing for and winning larger, high-quality venture debt investments, while at the same time continuing to diversify our portfolio and further reducing concentration risk. Given the momentum generated in the third quarter, we believe we remain well positioned to continue growing our portfolio of investments and to continue producing strong net investment income. Our belief is supported by the following. Our advisor continues to strengthen the Horizon platform with new hires. Demand for venture debt within our target industries remains robust. Our committed backlog and pipeline of investments is still strong. Our advisor's expanded lending platform and the increasing recognition of the Horizon brand is enabling us to access a considerably larger number of investment opportunities. And we continue to maintain ample capacity to execute on our backlog of commitments, as well as our advisor's pipeline of new opportunities. While we were excited and optimistic for Horizon's future, We remain aware of possible headwinds from macroeconomic issues, including the supply chain, global inflation, labor issues, and the pandemic. Over the years, our advisors' experienced team has successfully managed portfolios through various economic cycles. I am proud of our entire team's efforts, which resulted in this excellent quarter for us and our shareholders. I will now turn the call over to Jerry and Dan to give you more details and color on our performance. Jerry?