– The Horizon platform is born $106 million new credits in Q3, including $89 million new loans for HRZN –
– Horizon Platform ends the quarter with a record backlog of $309 millionIncluding $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 private equity-backed companies. risk in the technology, life sciences, information and health services and sustainability industries, today presented its portfolio update for the third quarter ended September 30, 2022 and an update on the lending platform (“Horizon Platform”) of Horizon Technology Finance Management LLC (“HTFM”), its investment advisor.
“The Horizon platform had another strong quarter of portfolio origination and growth as demand for risky debt solutions remained strong,” said Gerald A. Michaud, Chairman of HRZN and HTFM. “During the quarter, the Horizon platform funded $106 million of loans including $89 million loans for HRZN. In addition, the committed order book of the Horizon platform reached an all-time high $309 million investments in the form of debt, including $252 million in HRZN commitments – further validation of the power of the Horizon brand. HRZN also received $22 million in loan prepayments during the quarter, providing additional and accelerated revenue through prepayment charges and end-of-term payments. Despite the macro environment, demand for venture capital debt continues to be robust, and the 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 loans financed via the Horizon platform, including seven loans totaling $88.5 million funded by HRZN as follows:
- $30.0 million to a new holding 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 holding company, a developer of space simulation and analysis solutions to avoid collisions of satellites and other assets.
- $17.5 million to a new portfolio company, a clinical-stage company specializing in cancer immunotherapies and infectious disease vaccines.
- $14.0 million to a new holding company, provider of a global platform of biopharmaceutical and medtech regulated digital health solutions.
- $2.5 million to a new holding company, providing a returns technology platform for retailers and brands.
- $2.5 million to an existing holding company, Sonex Health, Inc., a developer of technology, education and training programs for ultrasound-guided procedures.
- $2.0 million to an existing holding company, Branded Online, Inc. (dba Nogin), a company offering commerce as a service to consumer and lifestyle brands.
HRZN experienced liquidity events from five holding companies in the third quarter of 2022, including principal prepayments of $22.0 millioncompared to $56.8 million prepayments of principal during the second quarter of 2022:
- In July, the Company agreed to release its liens on the assets of MLogix (MABC), LLC, successor in title to MacuLogix, Inc., in connection with the sale of MABC’s assets to LumiThera, Inc. In exchange for such release , HRZN received in cash $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 its subprime loans, plus interest, end-of-term payments and prepayment charges. HRZN exercised its warrants as part of the merger and now owns shares of NOGN.
- In August, HRZN received $0.1 million proceeds from Xyra, LLC in connection with a prior sale of certain assets of a subsidiary of HRZN to Xyra.
- In August, HRZN sold its stake 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 his subprime loan, plus interest, end-of-term payment and prepayment charges. HRZN continues to hold mandates in PRST.
Principal payments received
During the third quarter of 2022, HRZN received regular principal payments on investments totaling $4.5 millioncompared to regular capital repayments totaling $4.0 million during the second quarter of 2022.
During the quarter ended September 30, 2022HRZN closed new loan commitments totaling $156.0 million to eight companies, against new credit commitments of $203.4 million to 10 companies in the second quarter of 2022. The other funds managed by HTFM, during the quarter, closed new loan commitments totaling $31.0 million unfunded loan approvals and commitments.
Pipeline and Term Sheets
From September 30, 2022HRZN’s unfunded loan approvals and commitments (“Committed Backlog”) have been $252.0 million to 26 companies. This compares to a committed order book of $220.5 million to 23 companies in June 30, 2022. HRZN’s portfolio companies have the discretion to withdraw such covenants and a portfolio company’s right to withdraw its covenant is often subject to the achievement of specific milestones and other borrowing conditions. Accordingly, there can be no assurance that any or all of these transactions will be financed by HRZN. The other funds managed by HTFM ended the quarter with a total of $57.0 million unfunded loan approvals and commitments.
During the quarter, HTFM received signed term sheets which are in the process of being approved, which may result in the Horizon platform delivering up to a total of $60.0 million 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 the investment policy. allocation of HTFM. Accordingly, there can be no assurance that any or all of these transactions will be completed or financed by HRZN.
Portfolio of warrants and shares
From September 30, 2022HRZN held a portfolio of warrants and equity interests in 93 portfolio companies, including 77 private companies, which provides the potential for future incremental returns to HRZN shareholders.
About Horizon Technology Financing
Horizon Technology Finance Corporation (NASDAQ: HRZN) is a leading specialty finance company that provides capital in the form of secured loans to venture-backed companies in the technology, life sciences, health information and services and sustainability. 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 warrants it receives when these borrowed investments. Horizon is headquartered in Farmington, Connecticutwith a regional office in Pleasanton, Californiaand investment professionals located in Austin, TX, Chicago, Ill., Reston, Virginia and Portland, Maine. To learn more, please visit horizontechfinance.com.
Statements included in this press release 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 do not constitute are not guarantees of future performance, conditions or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements due to a number of factors, including those described from time to time in Horizon’s filings with the Securities and Exchange Commission. Horizon assumes no obligation to update any forward-looking statements made herein. All forward-looking statements speak only as of the date of this press release.
SOURCE Horizon Technology Finance Corporation