Horizon Technology Finance Corporation

Greetings and welcome to the Horizon Technology Finance Corporation fourth 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. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ms. Megan Bacon, Director, Investor Relations and Marketing for Horizon Technology Finance Corporation. Thank you. You may begin.

Thank you, and welcome to Horizon Technology Finance Corporation's fourth 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 Q4 earnings press release and Form 10-K 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 regard to the future performance of the company. Words such as believe, expect, anticipate, intend, 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, 2021. 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. 2021 was a fantastic year for HRZN and the lending platform of our advisor, Horizon Technology Finance Management. We began the year in a strong position after successfully navigating the most challenging aspects of the pandemic and into the year having significantly grown our portfolio and strengthened our brand and our balance sheet. We are proud of our advisor's deep and professional team, their dedication, and their contributions to our excellent performance in 2021. Our performance validated our predictive pricing strategy and disciplined investment approach. Like you, we are keeping a close eye on events around the world, including the turmoil unfolding in Eastern Europe, and on domestic issues, including inflation and what this may all mean for us and the broader economy in the months ahead. Turning to our accomplishments in 2021, our portfolio year-end stood at $458 million, an increase of 30% from the end of 2020. Consider that we achieved 30% growth despite a record year of nearly $175 million in prepayments. Our growth was a testament to both our advisors' ability to source and win larger, high-quality venture debt investments, and the increasing power of the Horizon brand in the venture debt community. To that end, our advisor expanded its platform during 2021 through an agreement with a private investment vehicle to originate and manage a venture debt portfolio to invest alongside Horizon. We are pleased that this relationship has had a positive impact on Horizon's ability to access additional and larger investment opportunities. We finished the year with a committed and approved backlog of $127 million, our largest year in total, which provides us with a significant base to further expand our portfolio in 2022. We generated net investment income of $1.41 per share, well in excess of our distribution level for the year, thanks in part to the continued success of our predictive pricing strategy. Based on our outlook and our undistributed spillover income of 51 cents per share as of year-end, we declared monthly distributions of 10 cents per share through June of 2022, which will mark five and a half years of monthly distributions at this level. We achieved a portfolio yield on our debt investments of 16.2% for the second consecutive quarter and a full-year portfolio yield of 15.7%, at or near the top of the BDC industry. We maintained a stable credit profile with nearly 98% of our portfolio rated three or higher at the end of the year. We are consistently and actively managing our portfolio of investments to maintain its credit quality. We ended the year with NAV of $11.56 per share, slight reduction from the prior quarter, but up 5% from the end of 2020. Finally, we strengthened our balance sheet in several respects. We raised approximately $30 million of equity in 2021 from our at the market program, all at a premium to NAV. We reduced our cost of capital by refinancing our publicly traded six and a quarter notes with four and seven eighths notes. We ended the year with available liquidity and capacity to fund additional growth in our portfolio as well as move closer to our target leverage of 1.2 to 1. Just this week, we announced an increase in the size of our credit facility with New York Life to $200 million, further increasing our capacity and positioning us for growth. We entered 2022 with excellent momentum across the board and believe we remain well positioned to continue growing our portfolio of investments and producing strong net investment income. Our advisor continues to strengthen the Horizon platform with new hires and by promoting members of our team into key management positions. This will ensure Horizon continues on its path to further growth and continued profitability. Demand for venture debt within our target industries is still burgeoning, and we are winning our share of transactions, including new awards thus far in the first quarter. Our committed backlog and pipeline of investments remains robust. Our advisors' expanded lending platform and the power of the Horizon brand continues to enable us to access a larger number of investment opportunities, and we continue to maintain capacity to execute on our backlog of commitments as well as our advisors' pipeline of new opportunities. 2021 was a banner year for Horizon, and we believe the best is yet to come. I will now turn the call over to Jerry and Dan to give you more details and color on our performance. Jerry?