Horizon Technology Finance Corporation

Greetings and welcome to the Horizon Technology Finance Corporation first quarter 2025 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. It is now my pleasure to introduce 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 2025 conference call. Representing the company today are Rob Pomeroy, Chairman and Chief Executive Officer, Jerry Michaud, President, Dan Dvorsets, Chief Operating Officer and Chief Investment Officer, and Dan Trollio, Chief Financial Officer. I would like to point out that the Q1 earnings press release and Form 10-Q 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 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 performance and 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 questions. We began 2025 with guarded optimism that markets were improving and that it was going to be a growth-focused year for Horizon. However, the macro environment, including tariff-related uncertainty over the past several weeks, has dampened our optimism and directly impacted our potential recovery from some of our stressed assets, which was a significant factor in the decrease in our NAV at the end of the quarter. Until the worldwide volatility in the market subsides, the venture capital ecosystem is unlikely to return to the positive path forward, which we had hoped for earlier in the year. Our comments today will focus on our first quarter results and our outlook going forward. Turning to our specific results for the quarter, we generated net investment income of 27 cents per share. As we look to grow our portfolio in future quarters, it is our goal to deliver NII at or above our declared distributions over time. Despite the headwinds, we were able to fund new investments and grow our debt portfolio by $20 million during the first quarter. Based on our outlook and our undistributed spillover income, our board declared regular monthly distributions of 11 cents per share through September 2025. We once again achieved a portfolio yield on debt investments at or near the top of the BDC industry. We were able to increase our investment capacity early in the year by raising equity from our at-the-market program. We have continued capital support from our lenders under our credit facilities as shown by the recent closing of an increase in the commitment amount and extension of the maturity date of our New York Life credit facility. We increased our committed and approved backlog to nearly $236 million providing us with a solid base of opportunities to further grow our portfolio over time. As we previously disclosed, in order to further align our advisor and shareholders' interests, our advisor has agreed to waive a portion of its quarterly income incentive fees. If after the payment of such portion, the company's net investment income for the quarter would be less than the distributions declared it. Finally, Monroe Capital, the owner of our advisor, completed its partnership with Wendell Group, a French investment company. Monroe, and by extension our advisor, continue to operate independently. As part of the Monroe family, Horizon will benefit from the additional capital, scale, and commitment of the partnership between Monroe and Wendell Group. We are continuing to support and work closely with our portfolio companies as we focus on maximizing the value of our stressed investments and preserving NAB. Moving forward, Despite the near-term macro challenges, we remain guardedly optimistic about Horizon's prospects for the following reasons. Our portfolio yield remains among the industry's highest, which we expect will lead to increased NII over time. Our committed backlog is growing, and our pipeline remains full with quality opportunities to invest in new companies. Our liquidity and balance sheet remains strong. And finally, our markets are still active, and demand for venture debt capital remains high. 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 first quarter results and progress.