Horizon Technology Finance Corporation

Greetings and welcome to Horizon Technology Finance Corporation third quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A brief 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. It is now my pleasure to introduce your host, Megan Beacon, Director, Investor Relations and Marketing. Thank you, Ms. Beacon. You may begin.

Thank you, and welcome to Horizon Technology Finance Corporation's third 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 Q3 earnings press release and form 10Q are available on the company's website at horizontechfinance.com. Before we begin our formal remarks, I 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 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, 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. We had a strong quarter from the standpoint of net investment income, with NII significantly exceeding our quarterly distributions. However, our net asset value as of the end of the quarter was negatively impacted. by adverse events in our portfolio which resulted in markdowns in the fair values. Our advisor, Horizon Technology Finance Management, and its experienced and expert team remain focused on our portfolio's credit quality as we navigate through the stressed macro environment and maximize the value of our portfolio over the longer term. Turning to our specific results for the quarter, we generated net investment income of 53 cents per share well in excess of our declared distribution level, due largely to higher interest rates on our floating rate debt investment portfolio, as well as lower incentive fees earned by our advisor. Dan will further discuss the impact of incentive fees on NII in his remarks. Based on our outlook and our undistributed spillover income of $1.23 per share as of September 30th, Our board declared regular monthly distributions of $0.11 per share through March of 2024, as well as an additional special distribution of $0.05 per share for the fourth consecutive year, payable in December. We achieved a portfolio yield of over 17% on our debt investments for the quarter, once again at or near the top of the BDC industry. We raised $14 million of equity from our at-the-market program at a premium to NAV, further enhancing our investment capacity. Our portfolio at quarter end stood at $729 million, growing modestly from June 30th. We finished the quarter with a committed and approved backlog of $202 million, providing us with a solid base of opportunities to thoughtfully grow our portfolios. As a reminder, most of our funding commitments are subject to our portfolio companies meeting certain key milestones. Finally, we ended the quarter with a net asset value of $10.41 per share. The largest impact on our NAV was the result of our fair value markdown of our debt investment in Avello Biosciences, which Jerry will provide more detail about. We continue to work closely with and support not only Avello, but all of our portfolio companies as we focus on improving our overall credit profile and maximizing recovery. We continue to seek high-quality new investments to grow our portfolio, despite the challenging macro environment. As we close out 2023, we are hopeful that the volatility in the macro environment will ease and the negative credit cycle will improve. Our team remains focused on credit quality and executing on our investment strategy in order to create additional value for our shareholders over the long term. With that, I will now turn the call over to Jerry and Dan to give you more details and color on our performance. Jerry?