Horizon Technology Finance Corporation Q4 FY2025 earnings call

2025 was a year of transformation. Merger with MRCC delayed to 2026, but special meeting soon and hope to close merger in weeks ahead. Monroe Capital will support post-merger company. Chief Investment Officer detailed recent business and portfolio developments, including fourth quarter funding, pipeline growth, etc. Chief Financial Officer detailed 2025 financing activities, liquidity, operating results like investment income, expenses, NAV change.

Net investment income was 18 cents per share. NAV per share ended the year at $6.98. Achieved a portfolio yield on debt investments of over 14% for the fourth quarter and nearly 16% for the full year 2025. In the fourth quarter, funded nine debt investments totaling $103 million. Ended the year with a committed and approved backlog of $154 million and portfolio returned to growth in the fourth quarter.

Board declared regular monthly distributions of 6 cents per share payable in April, May, and June of 2026. Expect merger to increase equity capital available for investment and allow taking advantage of economies of scale. Expect to originate larger venture loans with Monroe's support in 2026, bringing Horizon platform to next level.

Forward-looking statements subject to uncertainties in predicting future results. Actual results could differ materially from projected due to factors detailed in SEC filings' risk factor discussion.

Q: Can you go into more about how you decided on the new dividend level?

A: Every quarter review distribution level with board, looking at portfolio, run rate, spillover, pipeline and growth opportunities to determine sustainable level.

Q: Did you say the percent at contractual floor is 71%?

A: That is correct.

Q: Help understand earnings line quarter over quarter?

A: Quarter over quarter portfolio grew, major impact from prepayment and activity, some fundings towards end of quarter, lower prepayment rates and income related to that.

Q: Opportunity for public company financing?

A: Can be combination of refinancing existing debt and providing new capital, offering more flexible less dilutive capital structure.

Q: Color on non-accruals?

A: Working on non-accruals, improving percentage quarter over quarter, can't get into too much detail on private companies.

Q: Driver of realized loss net?

A: TALIC was small position, Nautilus was small piece, usually don't give detail on private companies.

Q: How much of 4.875% 2026 notes redeemed?

A: Full amount redeemed in January.

Q: On new dividend, support for 33-cent dividend?

A: Advisor agreed to waive $4 million of fees for four quarters following close.

Q: Conversion rate of convertible and diluted impact?

A: Conversions for converts done are at NAV, no dilution when converted at stated NAV at that time