Horizon Technology Finance Corporation

Greetings and welcome to the Horizon Technology Finance Corporation's fourth quarter 2024 conference call. This time, all participants will be in listen-only mode. A question and answer session will follow the formal presentation. If anyone this morning should require operator assistance, please press star zero from your telephone keypad. As a reminder, this conference is being recorded. I'll now turn the conference over to Megan Bacon, Director of Investor Relations and Marketing. Thank you, Megan. You may now begin.

Thank you and welcome to Verizon Technology Finance Corporation's fourth quarter 2024 conference call. Representing the company today are Rob Pomeroy, Chairman and Chief Executive Officer, Jerry Michaud, President, Dan Dvoracic, Chief Operating Officer and Chief Investment Officer, 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 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, 2024. 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. Today, we will update you on our quarterly and annual performance in our current operating environment. Dan DeVorsitz will take us through recent business and portfolio developments. Jerry will then discuss the current status of the venture lending market. And Dan Trollio will detail our operating performance and financial condition. We will then take some questions. We ended 2024 with our portfolio growing for the second consecutive quarter. We expect this trend will continue in 2025. While the net investment income we earned in the fourth quarter resulted in our 2024 NII covering our regular monthly distributions, our net asset value was lower at the end of 2024. This resulted from the underperformance of our stressed investments due to the continuance in 2024 of many of the same conditions that were present in 2023, namely ongoing stress in the venture capital ecosystem, tightened capital availability, a muted IPO and M&A market, and continued pressure on portfolio company valuations. Our advisor and its experienced and expert team remain focused on our portfolio's credit quality and originating high-quality investments in order to maximize the value of our portfolio over the long term. Recapping our full-year 2024 results, We generated net investment income of $1.32 per share, once again covering our declared and paid regular monthly distributions for the year. We achieved a portfolio yield of nearly 16% on our debt investments for the full year, remaining at or near the top of the BDC industry. We finished the year with a committed and approved backlog of $207 million. We ended the year with a net asset value of $8.43 per share, primarily the result of the fair value markdowns of our investments. We continued to strengthen our balance sheet during the year by closing a new $100 million senior secured credit facility with Nuveen, raising additional capital through a $20 million convertible debt offering, and raising over $66 million at a premium to our NAV from the sale of equity through our at-the-market program. Finally, Based on our outlook and our undistributed spillover income of $1.06 per share as of year end, last week our Board of Directors declared regular monthly distributions of $0.11 per share payable through June of 2025. To further align our advisor with shareholders, our advisor agreed this week to waive a portion of its quarterly income incentive fees if after the payment of such portion, the company's net investment income for such quarter would be less than the distributions declared in such quarter. As the macro environment improves and the venture ecosystem recovers, we continue to support and work closely with our portfolio companies as we focus on maximizing the value of our stressed investments and seeking to increase our NAV. As we progress through 2025, we remain optimistic about Horizon's prospects for the following reasons. Our portfolio continues to grow and our portfolio yield remains among the industry's highest, which we expect will lead to increased NII. Our pipeline is full with quality opportunities to invest in new companies. Our liquidity and balance sheet remains strong. And finally, our markets are active and demand for venture debt capital is growing. We look forward to being a key supplier of such capital. Again, we appreciate your continued interest and support in the Horizon Technology Finance Platform. I will now turn the call over to Dan, Jerry, and Dan to give you the details of our fourth quarter results and progress. Dan?