Horizon Technology Finance Corporation

Ladies and gentlemen, greetings and welcome to the Horizon Technology Finance Corporation third quarter earnings conference call. At this time, all participants are in the listen-only mode. A brief question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please signal the operator by pressing star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host for today, Megan Bacon. Please go ahead.

Thank you, and welcome to Horizon Technology Finance Corporation's third quarter 2025 conference call. Representing the company today are Mike Balkin, Chief Executive Officer, Paul Seitz, Chief Investment Officer, and Dan Trollio, Chief Financial Officer. I would like to point out that the Q3 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 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 Mike Balkan.

Thanks, Megan, and welcome, everyone, and thank you for your interest in Horizon. Today, we will update you on our quarterly performance and the current operating environment. Paul Sykes will take us through recent business and portfolio developments, as well as the current status of the venture lending market, and Dan Trollio will detail our operating performance and financial condition. We will then take questions. Well, it has been a very active several months since I assumed the CEO role in June. I've spent countless hours with our team together, thinking about the next chapter of Horizon and how best to expand the Horizon platform moving forward. The first part of that strategy came to fruition when we announced in August that MRCC and HRZN will be merging in a NAV for NAV share exchange subject to shareholder approval and customary closing conditions. The merger is progressing. but due to the federal government shutdown, we now expect to complete it in early 2026. Upon closing, Horizon will significantly increase their assets under management, while MRCC shareholders will have the opportunity to participate in what we expect to be a rapidly growing BDC that will be able to take advantage of greater economies of scale in the combined vehicle. Importantly, Monroe Capital, which is the parent company of Horizon Technology Finance Management, will provide additional and ongoing support to the post-merger company. As a result, you will see a much more coordinated and synergistic effort in 2026 as we expect to take significant advantage of having such a premier asset manager and expert private credit lender providing us with stalwart backing. To that end, we added several new originators in the third quarter who were hitting the ground running. With our reinforced team combined with Monroe's support, we expect to compete to originate larger venture loans to top early-stage and late-stage cutting-edge companies and return to the growth trajectory that we've historically experienced. I could not be more excited for Horizon's future, and while there is still plenty of work to be done, we have the right team in place to bring the Horizon platform to the next level. Turning to our specific results for the quarter, we generated net investment income of $0.32 per share. As we look to grow our portfolio in future quarters, it remains our goal to deliver NII at or above our declared distributions over time. Thanks in part to our accretive acquisition of venture debt portfolio of a former co-lender, as well as achieving favorable outcomes with two of our challenge portfolio companies, our NAV per share grew 5% to $7.12. Based on our outlook and our undistributed spillover income, our board declared regular monthly distributions of 11 cents per share through March 2026. Once again, we achieved a portfolio yield on debt investments at or near the top of the BDC industry. We also further strengthened our balance sheet in the quarter by accretively raising equity from our at-the-market program and successfully raised $40 million through the issuance of our 5.5% unsecured convertible notes due 2030. And through our more active relationship with Monroe Capital, our pipeline of larger potential venture debt transactions is growing while we maintain a solid base of additional opportunities to grow our portfolio over time. Before handing the call over to Paul, we are very excited for the New Horizons long-term future and believe we have the right building blocks in place to execute. Namely, our portfolio yield remains among the industry's highest, which we expect will lead to increased NII overtime. Our liquidity and balance sheet continue to remain strong and will further strengthen post-merger. We maintain a strong committed backlog, a robust pipeline, and we believe with the backing of Monroe Capital, that we are in a great position to compete for even larger, higher quality opportunities to invest in new companies. We are already seeing the aperture widening as more private and public companies express interest in our venture lending solutions. And finally, the 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 our Chief Investment Officer, Paul Seitz, to give you the details of our third quarter results in progress. Paul?