– Horizon platform originates $106 million of New Loans in Q3, Including $89 million of New Loans for HRZN –
– The Horizon platform ends the quarter with a record accumulation of commitments from $309 millionIncluded $252 million in HRZN Commitments –
FARMINGTON, Conn., October 12, 2022 /PRNewswire/ — Horizon Technology Finance Corporation (NASDAQ: HRZN) (“HRZN” or the “Company”), a leading specialty finance company that provides capital in the form of secured loans to venture capital-backed companies in technology, life, health care information and services, and sustainability industries, today provided its portfolio update for the completed third quarter September 30, 2022 and an update on the lending platform (“Horizon Platform”) from Horizon Technology Finance Management LLC (“HTFM”), your investment advisor.
“The Horizon platform had another strong quarter of originations and portfolio growth as demand for risky debt solutions remained strong,” he said. Gerald A. Michaud, president of HRZN and HTFM. “In the quarter, the Horizon Platform financed $106 million of loans including $89 million of loans for HRZN. Additionally, Horizon Platform committed backlog grew to a record $309 million of debt investments, including $252 million in HRZN Commitments: further validation of the power of the Horizon brand. HRZN also received $22 million in credit prepayments during the quarter, providing additional and accelerated income through prepayment installments and end-of-term payments. Despite the macro environment, demand for venture debt remains strong, and Horizon Platform and HRZN remain well positioned to deliver smart growth and additional value to HRZN shareholders.”
Q3 2022 Portfolio Update
During the third quarter of 2022, a total of $105.5 million of loans financed through the Horizon Platform, including seven loans totaling $88.5 million funded by HRZN as follows:
- $30.0 million to a new portfolio company, Kodiak Robotics, Inc., a developer of autonomous long-haul trucks designed to make the freight industry safer and more efficient.
- $20.0 million to a new portfolio company, a developer of spatial analysis and simulation solutions to avoid collisions of satellites and other assets.
- $17.5 million to a new portfolio company, a clinical-stage company focused on cancer immunotherapies and infectious disease vaccines.
- $14.0 million to a new portfolio company, a provider of a global platform for biopharma and medical technology regulated digital health solutions.
- $2.5 million to a new portfolio company, a provider of a returns technology platform for retailers and brands.
- $2.5 million to an existing portfolio company, Sonex Health, Inc., a developer of technology, education and training programs for ultrasound-guided procedures.
- $2.0 million to an existing portfolio company, Branded Online, Inc. (dba Nogin), a company that provides commerce as a service to consumer and lifestyle brands.
HRZN experienced liquidity events from five portfolio companies in the third quarter of 2022, including prepayments of capital of $22.0 millioncompared to $56.8 million of prepayments of capital during the second quarter of 2022:
- In July, the Company agreed to release its liens on the assets of MLogix (MABC), LLC, successor-in-interest to MacuLogix, Inc., in connection with the sale of the MABC assets to LumiThera, Inc. In exchange for such release, HRZN received cash from $0.6 millioncommon stock of the acquirer, as well as the potential for future cash royalty payments from the sale of goods and services related to the assets sold.
- In August, Branded Online, Inc. (dba Nogin) merged with Software Acquisition Group Inc. III (NASDAQ: NOGN) and prepaid its outstanding principal balance of $14.5 million on your subprime loans, plus interest, late payments, and prepayment fees. HRZN exercised its guarantees in connection with the merger and now owns shares in NOGN.
- In August, HRZN received $0.1 million in income from Xyra, LLC in connection with a prior sale of certain assets of a subsidiary of HRZN to Xyra.
- In August, HRZN sold its equity investment in Zeta Global Holdings Corp. (NYSE: ZETA) for gross proceeds of $0.1 million.
- In September, E La Carte, Inc. dba Presto merged with Ventoux CCM Acquisition Corp. (NASDAQ: PRST) and prepaid its outstanding principal balance of $7.5 million on your risk loan, plus interest, payment at the end of the term and prepayment fee. HRZN continues to have arrest warrants at PRST.
Principal payments received
During the third quarter of 2022, HRZN received regularly scheduled principal payments on investments totaling $4.5 millioncompared to regularly scheduled principal payments totaling $4.0 million during the second quarter of 2022.
During the quarter ended September 30, 2022HRZN closed new loan commitments for a total of $156.0 million to eight companies, facing new loan commitments of $203.4 million to 10 companies in the second quarter of 2022. The other managed funds of HTFM, during the quarter, closed new credit commitments for a total of $31.0 million of unfunded loan approvals and commitments.
Pipeline and term sheets
From September 30, 2022HRZN unfunded loan approvals and commitments (“Delay Committed”) were $252.0 million to 26 companies. This is compared to a Compromised Backlog of $220.5 million to 23 companies from June 30, 2022. HRZN Holding Companies have the discretion to withdraw such commitments and a Holding Company’s right to withdraw its commitment is often subject to the achievement of specific milestones and other conditions to the loan. Accordingly, there is no guarantee that any or all of these transactions will be financed by HRZN. HTFM’s other managed funds ended the quarter with a total of $57.0 million of unfunded loan approvals and commitments.
During the quarter, HTFM received signed term sheets that are in the approval process, which may result in Horizon Platform providing up to a total of $60.0 million of new debt investments. These opportunities are subject to underwriting conditions including, but not limited to, completion of due diligence, negotiation of final documentation and investment committee approval, as well as compliance with HTFM’s allocation policy. Accordingly, there is no guarantee that any or all of these transactions will be completed or financed by HRZN.
Portfolio of Guarantees and Shares
From September 30, 2022HRZN had a portfolio of guarantees and equity positions in 93 portfolio companies, including 77 private companies, offering the potential for additional future returns for HRZN shareholders.
About Horizon Technology Finance
Horizon Technology Finance Corporation (NASDAQ: HRZN) is a leading specialty finance company that provides capital in the form of secured loans to venture capital-backed companies in the technology, life sciences, health information and services, and sustainability industries. Horizon’s investment objective is to maximize the return on its investment portfolio by generating current income from the debt investments it makes and capital appreciation from the collateral it receives in making those debt investments. Horizon is headquartered in Farmington, Conn.with a regional office in Pleasanton, Californiaand investment professionals located in austin, texas, Chicago, Ill., Reston, Va. Y Portland, Maine. For more information, visit horizonchfinance.com.
Statements contained herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical fact included in this press release may constitute forward-looking statements and are not future performance guarantees. 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 Horizon’s filings with the Securities and Exchange Commission. Horizon undertakes no obligation to update any forward-looking statements made in this document. All forward-looking statements speak only as of the date of this press release.
SOURCE Horizon Technology Finance Corporation