- HRZN Originates $11.5 Million of New Loans in
Q2 - - HRZN Ends Quarter with Committed Backlog of $138 Million
-
Horizon Technology Finance Corporation (NASDAQ: HRZN)
(“Horizon”), an affiliate of Monroe Capital, and a leading
specialty finance company that provides capital in the form of
secured loans to venture capital-backed companies in the
technology, life science, healthcare information and services, and
sustainability industries, today provided its portfolio update for
the second quarter ended June 30, 2024 and an update on the lending
platform (“Horizon Platform”) of Horizon Technology Finance
Management LLC (“HTFM”), its investment adviser.
“We maintained a thoughtful approach to new investments in the
quarter and originated a modest number of investments for HRZN,
while we observed clear signs of improvement in the venture
environment,” said Gerald A. Michaud, President of HRZN and HTFM.
“We believe such signs, buoyed by our $138 million committed
backlog of debt investments, which provides us with a solid
foundation for new debt investments, may afford HRZN the
opportunity to meaningfully grow its investment portfolio in the
second half of the year. Additionally, we were pleased to receive
approximately $34 million in loan payoffs in the second quarter,
generating accelerated income and prepayment fees. As we look
ahead, we believe HRZN remains well positioned to deliver
additional value to its shareholders.”
Second Quarter 2024 Portfolio Update
Originations
During the second quarter of 2024, HRZN funded a total of $11.5
million of loans and $0.5 million of equity, as follows:
- $5.0 million to a new portfolio company, a fulfillment and
supply chain technology services company focused on optimizing
logistics across a variety of industries.
- $5.0 million to an existing portfolio company, Supply Network
Visibility Holdings LLC (d/b/a Everstream Analytics), a provider of
supply chain risk management software.
- $1.0 million of debt and $0.5 million of equity to an existing
affiliated portfolio company, a builder of conservation memorial
forests that offer sustainable alternatives to cemeteries.
- $0.5 million to an existing portfolio company, Nexii Building
Solutions Inc., a green construction technology company focused on
creating environmentally-friendly, durable, cost-efficient and
disaster-resilient buildings.
Liquidity Events and Partial Paydowns
HRZN experienced a liquidity event from one portfolio company in
the second quarter of 2024, consisting of a principal prepayment of
$33.8 million, compared to $18.7 million of principal prepayments
during the first quarter of 2024:
- In May, Divergent Technologies, Inc. (“Divergent”) paid its
outstanding principal balance of $33.8 million on its venture loan,
plus interest, end-of-term payment and prepayment fee. HRZN
continues to hold warrants in Divergent.
HRZN also received prepayments of principal from five portfolio
companies in the aggregate amount of $11.4 million during the
second quarter of 2024, compared to $1.1 million of prepayments of
principal during the first quarter of 2024.
Principal Payments Received
During the second quarter of 2024, HRZN received regularly
scheduled principal payments on investments totaling $11.8 million,
compared to regularly scheduled principal payments totaling $10.5
million during the first quarter of 2024.
Commitments
During the quarter ended June 30, 2024, HRZN closed new loan
commitments totaling $12.5 million to two companies, compared to
new loan commitments of $37.5 million to three companies in the
first quarter of 2024.
Pipeline and Term Sheets
As of June 30, 2024, HRZN’s unfunded loan approvals and
commitments (“Committed Backlog”) were $137.5 million to 13
companies. This compares to a Committed Backlog of $168.2 million
to 14 companies at HRZN as of March 31, 2024. HRZN’s portfolio
companies have discretion whether to draw down such commitments and
the right of a portfolio company to draw down its commitment is
often subject to achievement of specific milestones and other
conditions to borrowing. Accordingly, there is no assurance that
any or all of these transactions will be funded by HRZN.
During the quarter, HTFM received signed term sheets that are in
the approval process, which may result in the Horizon Platform
providing up to an aggregate of $50.0 million of new debt
investments. These opportunities are subject to underwriting
conditions including, but not limited to, the completion of due
diligence, negotiation of definitive documentation and investment
committee approval, as well as compliance with HTFM’s allocation
policy. Accordingly, there is no assurance that any or all of these
transactions will be completed or funded by HRZN.
Warrant and Equity Portfolio
As of June 30, 2024, HRZN held a portfolio of warrant and equity
positions in 99 portfolio companies, including 88 private
companies, which provides the potential for future additional
returns to HRZN’s shareholders.
About Horizon Technology Finance
Horizon Technology Finance Corporation (NASDAQ: HRZN),
externally managed by Horizon Technology Finance Management LLC, an
affiliate of Monroe Capital, is a leading specialty finance company
that provides capital in the form of secured loans to venture
capital backed companies in the technology, life science,
healthcare information and services, and sustainability industries.
The investment objective of Horizon is to maximize its investment
portfolio’s return by generating current income from the debt
investments it makes and capital appreciation from the warrants it
receives when making such debt investments. Horizon is
headquartered in Farmington, Connecticut, with a regional office in
Pleasanton, California, and investment professionals located
throughout the U.S. Monroe Capital is an $18 billion asset
management firm specializing in private credit markets across
various strategies, including direct lending, technology finance,
venture debt, opportunistic, structured credit, real estate and
equity. To learn more, please visit horizontechfinance.com.
Forward-Looking Statements
Statements included herein may constitute “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Statements other than statements of historical
facts included in this press release may constitute forward-looking
statements and are not guarantees of future performance, condition
or results and involve a number of risks and uncertainties. Actual
results may differ materially from those in the forward-looking
statements as a result of a number of factors, including those
described from time to time in the Company’s filings with the
Securities and Exchange Commission. Horizon undertakes no duty to
update any forward-looking statement made herein. All
forward-looking statements speak only as of the date of this press
release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240710271649/en/
Investor Relations: ICR Garrett Edson ir@horizontechfinance.com
(646) 200-8885
Media Relations: ICR Chris Gillick HorizonPR@icrinc.com (646)
677-1819
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