Horizon Technology Finance Corporation

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Horizon Technology Finance Corporation first quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Should you require operator assistance during the conference, please press star zero to signal an operator. Please note this conference is being recorded. I will now turn the conference over to your host, Megan Bacon, Director of Investor Relations and Marketing. Thank you. You may begin.

Thank you, and welcome to Horizon Technology Finance Corporation's first quarter 2023 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 Q1 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 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, 2022. 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.

Welcome, everyone, and thank you for your interest in Horizon. As we always do on our quarterly calls, 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, and Dan will detail our operating performance and financial condition. We will then take some questions. With the increasingly challenging macroeconomic environment and fallout from the collapse of Silicon Valley Bank and Signature Bank in the first quarter, Horizon and our advisor, Horizon Technology Finance Management, took a measured approach to originations and redoubled efforts to focus on the credit quality of our portfolio companies. There is no question that the venture capital ecosystem has changed and will continue to evolve. While this creates challenges, this also creates opportunities in both the near and long term for those that can successfully navigate through the challenges. With our experienced team, disciplined investment approach, and strong balance sheet, we believe we are positioned to emerge from these challenges as a stronger company. Jerry will provide some additional commentary on the fallout from the state of the macroeconomy and the banking crisis a little later in our presentation. Turning to our specific results for the quarter, we generated net investment income of 46 cents per share, well in excess of our distribution level. due largely to higher interest rates on our floating rate investment portfolio and the growth in our portfolio. Based on our outlook and our undistributed spillover income of $0.81 per share as of March 31st, we declared monthly distributions of $0.11 per share through September 2023. We achieved a portfolio yield on our debt investments for the quarter of 16.3%, once again at or near the top of the BDC industry. We raised approximately $7 million of equity from our at-the-market program at a premium to NAV. While we have adequate liquidity and capacity to fund our current backlog, we will opportunistically and strategically seek new debt and equity capital as our portfolio and backlog grow. Our portfolio at quarter end stood at $715 million, a slight reduction from year end 2022, but an increase of 39% from last year's first quarter. As I noted, we took a measured approach in the quarter toward originations and expect to continue to do so in the near term. We finished the quarter with a committed and approved backlog of $187 million, providing us with a solid base of opportunities to thoughtfully grow our portfolio. As a reminder, most of our funding commitments are subject to our portfolio companies meeting certain key milestones. And we ended the quarter with a net asset value of $11.34 per share. We did see some impact to our credit portfolio at the end of the quarter and remain in constant contact with all of our portfolio companies to help assist them in a difficult capital-raising environment. Jerry will provide more color on these efforts later. Given the current industry and overall macro environment, we will continue to closely manage our portfolio and remain more selective in originating new investments. Despite the challenges ahead, we continue to believe our portfolio and backlog is positioned to generate strong NII in 2023, which may exceed our distributions. In summary, while we continue to expect a challenging environment for the foreseeable future, we firmly believe we have the right team in place to navigate through that current economic cycle. We have the talent and expertise to execute our investment strategy, to maintain a sharp focus on credit quality, and to seek to carefully grow the portfolio with high-quality investments. Before I turn it over to Jerry, a word on Horizon's annual meeting of stockholders coming up on May 25th. Last quarter, Horizon announced that HTFM, Horizon's investment advisor, had entered into a definitive agreement to be acquired by an affiliate of Monroe Capital LLC. We continue to work on closing the transaction, including seeking approval of a new investment management agreement at the annual meeting. As we have previously said, we believe that the transaction will allow us to benefit from the ability to capture a broader range of investment opportunities designed to enhance shareholder value in both the near and long term as a result of access to Monroe Capital's fundraising capabilities and overall investment platform. With that, I will now turn the call over to Jerry and Dan to give you more details and color on our performance. Jerry?