Horizon Technology Finance Corporation

Greetings and welcome to the Horizon Technology Finance second quarter 2026 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 requires operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Megan Bacon. You may begin.

Thank you and welcome to Horizon Technology Finance Corporation's second quarter 2026 conference call. Representing the company today are Mike Balkin, Chief Executive Officer, Paul Seitz, Chief Investment Officer, and Dan Trolio, Chief Financial Officer. I would like to point out that the Q2 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 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, 2025. 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 Horizon CEO, Mike Balkin.

Thanks, Megan. Welcome, everyone, and thank you for your interest in Horizon. Today, we will update you on our quarterly performance in the current operating environment. Paul Seitz, our Chief Investment Officer, will take us through recent business and portfolio developments, as well as the current status of the venture lending market and and Dan Trolio, our Chief Financial Officer, will detail our operating performance and financial condition. We will then take questions. In April, we completed our merger with Monroe Capital Corporation, significantly enhancing our available capital for investments and kicking off our next chapter of growth. To that end, we have been very active over the past several months laying the foundation for sustainable and profitable long-term growth. That includes enhancing our underwriting and credit capabilities to improve the quality of our portfolio, optimizing the technology stack throughout our organization, and making key investments in our people and our origination platform. We believe the investments we are making today and which we expect to make over the next several months are appropriately setting the stage for us to consistently grow our portfolio over time, steadily increase our NII, and ultimately create additional value for shareholders. We have the right team and a scalable platform in place and the backing of Monroe Capital, one of the premier asset management firms in the country. It is now incumbent upon us to execute, and we expect to do so in the quarters ahead as we take the Horizon platform to the next level. Turning to our specific results for the quarter, we grew our debt investment portfolio for the third consecutive quarter, funding nine investments totaling $73 million, while our total portfolio size ended at $677 million. We generated net investment income, excluding non-recurring one-time merger expenses, of 18 cents per share, which covered our regular distributions, while our NAV per share ended the quarter at $6.23 a share. Our NAV per share was down 75 cents per share for the quarter, primarily due to write-downs of one of our larger investments, which Paul will discuss later. Based on our outlook and our undistributed spillover income, our board declared regular monthly distributions of six cents per share payable in October, November, and December of 2026. Consistent with our announcement prior to the closing of the merger, our board also declared special monthly distributions of three cents per share also payable in October, November, and December of 2026. As we prudently work to deploy the capital from the merger and move towards our target leverage, it remains our goal to deliver NII at or above our declared distributions over time. We achieved a portfolio yield on debt investments of just under 15% for the second quarter at or near the top of the BDC industry. We finished the quarter with a committed and improved backlog of $228 million, up $48 million from the prior quarter end. We repurchased approximately 1.4 million shares of our common stock in the quarter, reflecting the confidence we have in our near and long-term outlook. Additionally, on August 3rd, our board approved an increase in the amount of common stock that may be repurchased under the stock repurchase program to allow the company to repurchase up to an additional $20 million of common stock. And finally, we continue to win attractive venture debt and small cap public company investments while building our pipeline of loan opportunities. Despite our challenges, we remain excited about what we are building at Horizon. We will execute on our strategic vision creating a sustainable growth engine and increasing our NII and NAV over time. 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 second quarter results and progress. Paul?