Earnings call transcript Q1 2023

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Operator

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Horizon Technology Finance Corporation First Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded.

the Investor to Relations turn Bacon, host, now of Director and will conference your over Megan I Marketing. Thank you.

You may begin.

Megan Bacon

welcome call. today Chief Financial Thank quarter Jerry Michaud, and and to Dan Finance Officer; Technology you, Trolio, and Corporation Chief XXXX Executive conference Rob Representing are company Officer. President; the Pomeroy, Chairman Horizon first

would to point company's press XX-Q Form and on like out the earnings I are at website horizontechfinance.com. release that the available QX

everyone company. forward-looking uncertainties formal future statements, results Before Words of similar identify this I regard statements. remarks, that we or These intends remind will and forward-looking conditions. during call, forward-looking to certain in to predicting subject our including company believes, such inherent expects, the statements anticipates, the begin to the performance conference expressions are used need with the make are future as to statements

Certain the as including and are new factors from future in results in Commission, basis actual factor update Securities risk filings projected these the differ company of material a discussion events company's revise the some otherwise. with to XX-K statements, to on no could in Form XX, of XXXX. Exchange and The year ended undertakes forward-looking any or a the obligation cause the for forward-looking result these statements those whether December detailed factors company's or information,

Pomeroy. to At to this over the Rob time, I like would call turn

Rob Pomeroy

thank and your Welcome, everyone, in you for interest Horizon.

our efforts, portfolio performance quarterly markets, performance and our will financial environment. our As our then Jerry operating calls, and will our business condition. our and detail do on current we I development always operating and Dan on discuss update events our overall you will

some questions. We will then take

Management, is companies. no and capital venture Bank and question of fallout Finance will credit ecosystem efforts With the our of adviser, focus and a Signature that Silicon has quarter, There the the to quality from Valley measured the challenging Horizon approach evolve. to first on changed Horizon the redoubled originations Technology and our took portfolio Bank macroeconomic and to in collapse increasingly continue environment

challenges, the disciplined positioned on in both for are emerge the through sheet, our creates creates the from experienced challenges. navigate a those our this near the approach additional stronger will a state later long-term With in some to can we of commentary that this crisis and these strong from Jerry economy macro as successfully fallout team, presentation. challenges While and the we the investment believe provide banking little balance opportunities and company. also

for to distribution net in per due the in of our our the floating well our investment $X.XX level income Turning portfolio. results our specific portfolio higher interest excess rates generated growth on to quarter. rate investment largely share, and We of

industry. share outlook the spillover debt $X.XX our through and of Based near once or XX.X%, We per on at our $X.XX for of income on September BDC of our per share March of again of declared as achieved XX, we portfolio undistributed top quarter yield distributions the a the investments XXXX. monthly

NAV. We million $X premium raised a at from program equity to approximately of at-the-market our

grow. While and our seek strategically we backlog, have and our fund debt and capacity equity and adequate capital current we will new portfolio liquidity to backlog opportunistically as

first Our portfolio of increase at quarter but from million, year-end XX% end reduction an quarter. stood XXXX, at a year's slight $XXX from last

grow and the our of million, approved the continue to and measured in toward quarter to As so backlog us of with the to portfolio. quarter with expect we a originations took approach a committed $XXX I We do finished in opportunities providing noted, solid near-term. a base thoughtfully

did value subject companies, of we ended a and to share. difficult funding with the of most meeting certain reminder, commitments asset a We quarter milestones, our are key net portfolio our $XX.XX As per to impact our credit assist remain environment. portfolio the in some companies to in all a of with help raising at our them of quarter the constant end capital portfolio contact and see

Jerry these will more later. efforts provide color on

environment, portfolio originating and new to Given XXXX, to and positioned will closely overall selective the NII the we manage strong in believe exceed our our portfolio more we and macro remain investments. ahead, may generate continue challenges our to which backlog current is industry continue Despite in distributions.

to current we believe navigate cycle. In challenging a right economic we future, in firmly to through continue foreseeable expect we summary, team have the that environment the for while place

the our strategy the to to investments. to have grow and expertise on portfolio maintain quality carefully with sharp talent high-quality We investment execute seek credit and a to focus

Jerry, Before that I announced into Last HTFM, entered Annual up over agreement to acquired had adviser Horizon's be on affiliate definitive LLC. coming Stockholders of it a Meeting XX. an of to quarter, investment by Horizon Horizon's turn Monroe a on word Capital May

transaction, on continue seeking the approval annual new We the at agreement closing work including to investment a meeting. management of

from near to fundraising we allow benefit broader capture as a to ability said, and overall in Monroe previously designed long-term the to of and platform. of transaction opportunities will the that As a capabilities believe result shareholder investment value us both the investment to range we Capital's enhance have access

details With over performance. Jerry? and you turn will call and Jerry now color that, on Dan I to to the more give our

Jerry Michaud

March year-end to slight including new portfolio million, as company size funded we from everyone. a $XX debt good reduction to Thanks, totaling education. investment million the In we In a focused a morning QX, in $XX our first tech saw million of XX. eight to $XXX portfolio quarter, on transactions Rob, and

given ecosystem. our the We related originating uncertainty expect and the in to underwriting capital have venture selective to remain increased tightened debt profile, investments

which yield disciplined produce in continues of during QX's and will structuring pricing was net above the quarter to our onboarding investment transactions, and reflect yield income. strong XX.X% our Our

$XX partial loan four million. experienced pay the totaling down We prepayments quarter, and one during

We lower quarter our the M&A prepayments the compared to and the second levels expect in given current XXXX, be IPO historic to of in volatility muted markets.

in is quarter our for a one of a rate the generate industry. in XX.X% the highest the rising BDC the further us of environment, helping structures yield testament interest portfolio value portfolio yields of rate to debt Our floating

portfolio in with value warrant XX As $XX XX, equity and fair companies of March million. we a positions held of

consistently end prudently As us our investments approved grow rights and most approvals portfolio quarter, certain key We value. to $XXX with strategy key structuring opportunities companies quarter potential first backlog fourth closed our new a debt $XXX our is of million of in maintaining of a In equity compared committed commitments quarter. our venture million of the $XX our the the noted, loan believe selective the subject at and we additional with and our generator warrants and and ended with portfolio. to meeting we've approach million commitments new committed funding to of our to milestones positions backlog aspect

have issues were company-specific portfolio to we in Unlike events. previous primarily portfolio credit due quarters,

made quarter's as first was venture which a primarily whole, science venture more and venture portfolio and impacted capital life difficult affected the lending companies. Our by and for capital-backed market quality exits issues macroeconomic that fundraising directly technology

in capital. banking venture-backed quarter, disappearing the capital or M&A with a and IPO significant this contributed difficulty Silicon which the of in Bank, companies finally, market closed a potential for a started of the equity And to a reduction we In greater the investment, all recession collapse venture first raise XXXX. for ongoing a spec saw crisis, to anemic market, market, Valley debt

and the to of challenges our liquidity a their investors significantly note, the positive sooner. environment result, believe understand companies cut additional extend and while we and portfolio as economic their a seeking preserve current On has costs capital

addition, fundraising creative seeing portfolio strategies. companies we In are employ more

transaction, to biotech our of completed public one and private investor lead its public companies example, which shareholder. a funded by For was large

companies also biotech funded shareholder. public its of to Another lead announced of a and large public one by private its our transaction consideration investor

fact or the debt continue A balance to look they strategic number options as of of raised our at have portfolio companies over XXXX. convertible equity in

been as All of backed it the said, XX in technology as is years. companies the for the fundraising past venture challenging that has environment

expectation difficult backed science environment XXXX. remainder fundraising persist companies technology will Our that the the and of life for for is VC

with portfolio current believe this closely the ability help We venture support, We increased companies other economic with credit ratings. have macroeconomic investors which our and to stakeholders level we to survive and raise our backed and companies environment technology them the very we recent reflected uncertainty the in will cycle. collaboration of their capital working and appropriately believe are of provide

our rated which debt of two portfolio number consisted XX, we investments seven, three debt March from of at last XX% of QX, had quarter. investments and the of increased rated and investments. end The debt As to was unchanged of one debt four rated three the

our represent credits X% rated one less of debt total than Our portfolio.

quarter $XX now while and that we as According companies environment expect VC landscape XXXX toward the the in to environment. the the of headed to there investment continue to was of we the in quarter billion back levels, venture Turning are opportunities first compared be billion first competitive PitchBook, backed capital remain to VC XXXX. to Seems $XX will in activity approximately volatile. shifts, pre-pandemic investing invested clear

In to will lenders and talent. the positioned significantly loan for available. venture best expect we bank Longer-term, believe Thus, for lenders public and we bank BDCs the venture venture less lenders, expect debt to to pricing be venture lending will refinance there void are we increase demand opportunities near-term, a banks. higher cheaper debt fill of as especially be the

the VC VC of prior second considerably than consecutive XXXX quarter, raised for fundraising which billion the terms lower was fundraising, In in pretends year. $XX for

to closed the expected in provide modest, would exit dry given exit the emerge. VC decline While and is as for IPO activity Again, coming window. expected, ongoing it markets quarters companies support the VCs appears powder portfolio VC until backed improved environment as remained current high, be

the remain for uncertainty activity the to would value backlog given exit the billion, IPO for just to $X VC the we future. exit expect muted backed continues build, Total quarter was environment foreseeable while

market debt secured debt abundant at venture will failures loan Bank investment, SVB, to debt Republic question of near-term. are the the of have Bank and terms with and there impact on now market pricing. to is senior the In no replace in that attractive a for bank continue significant Opportunities venture venture First conditions senior Signature new

the our provides potential through will opportunities cautious portfolio quality macroeconomic to and opportunities pragmatic The at advisor high ever venture through when to with new especially bar environment loans, quarters changing with least XXXX. third new grow and again, our venture a lots take higher debt venture debt However, improves. environment the of Horizon for overall to due wins, investment approach previously a second my mentioned of Horizon

current For our maintaining and to sheet backlog balance of focus taking the on pipeline. our committed managing prudently cautious now, is and a market, the approach quality squarely the

million, Our opportunities billion. committed backlog $X today our $XXX pipeline while is awarded today of advisor’s and at stands as approved of and new

ensure credit we for optimal focused outcomes ahead, on Looking quality portfolio. are to our

at selectively to there subside, our market venture us for attractive believe volatility and at to grow of advisor’s debt committed portfolio, quality pipeline will we appropriate our will begins our solutions. meantime, the backlog, As time. This looking our still long-term the be shareholder of companies the the based enable solid that to positioned In priced a XX% additional environment, portfolio continue on rate shareholders our portfolio of floating generate we believe rising our in delivering we rates remain size to for and value. and NII well is

With now over I’ll to call the turn that, Dan.

Dan Trolio

Jerry, and morning, everyone. Thanks, good

NII $X generated During the to covered markets. yield million our investments the raise our produced opportunistically access demonstrating balance while capital accretively than that ability more distributions, continued the and program our an quarter, debt successfully utilizing additional our from equity a strong sheet and ATM first of once maintaining again

additional the sheet loan keeps positioned We environment grow value thoughtfully focused in shareholder our the beyond. balance believe create us management portfolio current and well and to

$XXX leaving the of our Keybanc $XXX in million liquidity credit $XXX be and and facility available credit to million under XX, under us in New $XX outstanding consisting with facilities. capacity in $XXX our of $XX million cash had drawn $XX portfolio. to our million facility, As existing million available currently funds outstanding we ample million credit Life under We March have York million grow

our X.X:X. March debt’s balance above on was million. Our Netting leverage at position X.XX:X at ratio our potential which facilities, cash slightly stood credit of our equity at on XX and Based our investment capacity sheet, on X.XX:X, out March capacity new our target was XX. cash borrowing our our as was leverage $XXX

For year income of the we total an first increase $XX prior million, of quarter, XX% to the earned period. investment compared

quarter investments for investment rate income a our primarily on of Interest the debt debt the interest the in investments. increased increases size our average result as on portfolio variable of and higher

March of portfolio increase debt basis a investment Our XX, as at XXXX. cost XX, net stood on million from slight a $XXX December

to For the in fourth XX.X% XXXX, quarter onboarding we yields first of achieved of quarter. XX.X% compared achieved the

for XX.X% for compared to Our loan first the portfolio quarter. yield first was last quarter year’s XX.X%

$XX.X were compared quarter to first million for expenses of XXXX. the $X.X quarter Total the million in

in to million Our and million year’s interest increase borrowings expense increased interest quarter our higher the to on first average borrowings. $X.X in rates an due last $X.X from

was Our first size an quarter the in our year’s fee in up base management million million, last average from portfolio. to $X.X $X.X of due increase

Our continue first quarter the per will along portfolio’s increase predictive spillover distributions. larger undistributed XXXX. portfolio, our covers with first first The share. per the quarter. income to million, pricing XX last our that the fourth fee of March XXXX per $X.XX NII $X.XX generating was Net up the quarter of $X in performance XXXX from to of us base We company’s quarter of anticipate year’s interest and per income as that our record in incentive was a our million for compared in $X.XX $X.X share share investment share for was $X.XX enable rates strategy,

said prepayments have we we’ll throughout previously, experience the year. As

expect our historical today’s be to levels. in However, below environment, we prepayments

activities our first quarter. the portfolio for Summarize

were New with $XX prepayments in originations in million, total and principal $XXX investment principal million a of ended $X offset pay which portfolio We $XX totaled scheduled payments, and the downs. quarter million. million by partial

we environment, with selective to origination. in respect macro to remain expect near-term the the Given

value consisted As that million. debt our investments September XXXX, in remain covered Based with of fair XX providing equity by value distributions fair of companies and declared over XX, of the with time. share We $XX upon investment portfolio distributions XXX August July, for $X.XX an of investments average of companies warrant our income in other monthly our and per portfolio $XXX a March an are net outlook with of shareholders to for million Board our committed and XXXX. average

quarterly net $XX.XX compared investment December and and Our XX, NAV of distributions as paid adjustments a reduction as value, of to partially $X.XX March share fair to per on due income. primarily XXXX. XXXX, of March was XX by NAV in The was $XX.XX XX, of as basis our $XX.XX offset

XXX% of increase that of as to As coupons at we’ve rates investments, noted, with rate debt principle interests their consistently interest floors. our structured with balances our floating rates interest outstanding are rise

in As portfolio of March debt of benefit our additional from applicable rate. will their base XX% XX, increases

this be to take opening at you This remarks. happy concludes our We’ll questions may time. have

Operator

Thank you. first Instructions] is with Ladenburg Our Thalmann. [Operator Nolan Christopher question from

Christopher Nolan

the burns seeing portfolio Signature Bank? Hi. and question. and guess, Thanks taking Silicon given up my implosion cash Bank is of of the for holding I Valley headcount terms my question in real that? and things levels following change you how’s Are like

Jerry Michaud

true. was the Yes. is that Hi, actually, Chris, this Jerry. of Yes, that some I on before bank definitely I going is crisis. think

muted longer they’re that in restricted as they’ve as support with. or investments the We capital less either less ecosystem, the all they levels to that are are meaning work at seeing companies their level funds, VC highly can and across have of board to lower Venture to make have portfolio liquidity liquidity been. portfolio they’re firms obviously liquidity their companies certain exit having markets given

are the period time. continue today, living I of environment and will all for that’s So some in in think that which we

positive not On our about note seen well more a portfolio at creative operations ways portfolio, cash about in create difficult, I and also as say, so burn, support that. quite more raise try more little We’ve but have volatile more in efficiently being actually on significantly companies – to their difficult, value their continue should to operating bit religious to our in as gotten least continue liquidity market. very a to to much

that expect we continue. So to

also, their very see performance. to their are companies say investors with these in portfolio engaged operating very closely would along continue are working our with We I companies, who wanting

but to of low I’m engage these and public Another it’s opportunities, certainly positive companies beginning raise sector science to biotech hand. they’re we the those on bit news, where the one life money so valuations and to strategics see consistently some to a more starting at trend are starting yet, say side gotten difficult look – have for that to it’s ready not of on

On valuations getting attractive. the other very their hand, are

pharmaceutical well companies attracting both strategic investors. knowledgeable they’re biotech as So as type

that in them development. say investors portfolio to were of gone the valuations public had our because so So that that’s to but money private couple from they just amount ready of substantial and put private a we’ve I’m transactions felt on that not took have in to continue the with trend, a attractive being clinical

is money, all marketplace, created are market happening of the extension they’re the which raise in their that and increased. And in a less as volatility. have to of money isn’t raising So Companies very it’s but raising at money, year different has runway we lot were ago. so has a they a than velocity so long, that

lot that’s going for a a there’s and that we’re focus be so while. of And to on where

is to, of But had portfolio difficult that never that banks there XXXX, something this uncertain what’s I companies of really compared to you point have ecosystem like whole through these the to they’re say say And marketplace the thing, very to of that don’t less splash know venture out. look like things that’s going kind market, available the over seeing these in don’t and engagement and bank that. how say – I sort as the happened other have kind and debt we’ve companies how of banks the they’re are to make to actually products taken what some their other know going have these We credit revolving we have and or like today. announced

there’s uncertainty there. So

be And for so, a volatile XXXX. it’s to market going

numerous people well have I would staffed experienced final who been on comment a we just with credit through lot that of are is, cycles.

our working and to other companies a move these And and trying great their stakeholders, with such, and help investors doing portfolio so, they’re forward. job companies

Christopher Nolan

acquisition about of sheet expect the vehicles? Horizon doing by said you the the follow start manager pending Monroe off and to Capital, a we type given more balance environment everything As of should up, given

Dan Trolio

has to past for of additional strategy co-invest had to a Dan. drivers look of at. continue the Yes, this going and the the Hi, at value at to part looked for co-invest sheet to advisor before to public the vehicles the is and Horizon. balance with In can and us see as we’ve of is Rob one the And you off Chris. vehicles It with we allow sheet, that we’ve Horizon allow company. it mentioned, used transaction we’re shareholders one been

a strategic it is So of ours. initiative

And going continue that forward. so we’ll do to

Christopher Nolan

Thank That’s it for me. you.

Operator

from Riley. is Bryce with B. question next Our Rowe

Bryce Rowe

maybe to there. Wanted morning. Good of Thanks. on questioning line follow-up Chris’

the quarter-over-quarter. see some You Can them rating, category you just us the into move within two keep help then internal the what’s to move credits speak? to about to and credits two Thanks. certainly guys seven change five talked those think into there the understandable or credits in risk why into in category try the understand, about the and maybe or perhaps Xs to so help us to moved happening Xs move

Jerry Michaud

Yes. Hi, Jerry. this is

the and So, in different raise the to in as of to the fundraising company capital much try given ways as their but sources. to liquidity, companies value have manage they which have volatility from – also today use want to

taking ability company’s to to uncertainty. the do approach given that We’re conservative much a more

it’s an moved So some through our – rated bucket, have – two so in term they’re companies sheets. – we’ve those as actually are of example, a that

a ago. certain to as not a they close? will But as get year would’ve it It’s been

– so liquidity. will and need And they that

felt two the moved associated are whether was into So close, companies them company to uncertainty, we or that. are our them process the a has that portfolio money as of money was we where at looked the there and raising how it to raise real rated in getting companies bucket. have and having those money with and that greater raising risks across we looked across Any

into during and is across they into liquidity companies what a be them rated the and they’re we I going inflection a of three. and board, because relative then may to get whole see with – back as rated deal going of course they to And three going to capital, we’re that may year two there’s we’re move in done the out bucket to this two moving see the the starting we category, them point suspect we move point but to an the industry. also And get raising lower where

So, we’ll of that kind activity the probably of the more year. course see of during

Bryce Rowe

Okay.

Jerry Michaud

I’m sorry.

seeing asked to lot the of sustainability, the as four And also in certain side, life strategic the you positions industries. so liquidity three deals include and too. – credits, side also done relates marketplace it – have a rated starting include would IP are on companies into it that we had strong we’re there see especially really getting to You coming that and technology on in science are would more

So there interest. is

given that spark that meaning thing of meaning strategics IPO if start one low is there I investing firms opening be we trend valuations done, actually But seeing of experience are an that’s kinds don’t life might financing in, a not knowledge science coming coming on capital some is based done. a I’m And venture great to private companies, see in market and more getting the yet. say have get going these deal that. transactions

actually able really through new venture so And companies through transactions. positions or IP are continue investment strong capital to money raise either to strategic with

Bryce Rowe

Great. Jerry, color. time Appreciate the good a morning. this that’s

Jerry Michaud

Yes, Bryce.

Operator

[Operator Instructions] KBW. next Lynch from Ryan question is Our with

Ryan Lynch

to it. question Hey, first valuation good the process wanted I behind start on and portfolio morning. company-specific

most on for in financials, Canada. this the protection in I bankruptcy press in, release, looks it their or like million debt. it's around, of $XX looking XX, of filing $XX You balance when cash look million like From bankruptcy they in at Canada sheet IMV mentioned as was have and looks of your outsider December recent an

that assume is last of I $XX balance cash. of over than million now the that less would somewhat cash four months

protection, bankruptcy curious was close given market much announcement I just the to them higher and balance par. filing it's of balance pretty your is versus debt So for cash

you final would arrived love the of thought and number? your what guys behind at hear how valuation process was I to kind just So that

Jerry Michaud

Sure.

bit. I'll appreciate little talk let a Let little and the company valuation me Ryan, a maybe just But about question. get Dan the the bit I into

Chapter in company that gives bankruptcy located traded them what They're traded speed, protections us ongoing called U.S., for essentially operations. to Canada. did up filing. – everybody bring They the And to kind of Act, in on IMV They biotechnology a CCAA. not some Company's is Creditors that a their just is to filed it's XX NASDAQ. ahead Arrangement AACC of the publicly relative So inform

they have announced filing in well We and their they – with strategic even obviously, are filings. and in, their that looking they have been discussions that are them. before doing They at alternatives, were

So their this inform that and to of on company had very – is their if Again, pretty filing not of found at to a positive you working But some go with. did us clinical been Monday, website they've we at we've on closely trials. rest you the they their their look world. out data if with actually happen look technology, the

so was technology, believe this and not their time us, just a point probably that over in strategic believe they at is get with but there process. is, again, but they're this inflection through deal where best – they discussed done way And interest this to the

we as they it, is, why go that route. so to And this understand decided

little talk Dan valuation. bit about let the I'll a

Dan Trolio

Yes. Not much public more appreciate digging I to do in. doing add as you're as the and the information far

a we over working them that quarters, number mentioned, And soft to get of all we them landing. number with with been looking at. look work there's just to opportunities of they're Jerry discussions and and our companies, have of a and As like a

to our additional those of on we at number. so are based all to the on going is that on public of a to. And filing our time private that that use And fair obviously value information and knowledge number the and privy conversations, of how the discussions have the we basically get information, we there's the based position that not public

Ryan Lynch

deal it's going to know, strategic there's in some But of to sounds on you the liquidated based achieve It Okay. have it have greater if where sort just like be recovery for there to much sounds marked. deal there's unless the done would done. Is or like guys it to assume? financials, be it strategic fair a I loss you that don't sounds like order a

Dan Trolio

their and that in working they announced Well, their on public are strategic release filing they deals.

Ryan Lynch

Okay.

lot question But not balance for I capital for uncommon if never and is hear time reasons. important to commitment be in these other committed just you a this had But this being unfunded environment, over not commitments guys of number I'm these commitments unfunded have of liquidity of guys your uncommon just and $XXX The $XXX a million. lenders. is so you about was to – would lot I venture funded venture have of wondering total level to so It's love see an those million, higher borrowers, unfunded down you to wondering, I'm where expect borrowers, of for one? and by scarce just various current a for drawn

And it's number what that unfunded like can guys of milestone of sort at unencumbered out your like the – then maybe or And where that to have two, will will. on down commitments you million of approval? you today. have are whether draw of all $XXX commitments What number a borrowers their those are subject

Jerry Michaud

I Yes. milestones, draw requires of our is obviously very it's far The a bottom over many line to. certain committed something Brian, Good we're to paying pretty those met. think – is of on XX% kind almost attention backlog is milestones be of are some question, open close actually portion pretty small out. And

So at it might be, as number, example, meeting XXXX. of the an end revenue XXXX

meeting are milestones. available a that tranches there continually based of And on could number be

much pretty some quarter. And of did by we've in the it's companies again, driven last the milestones meet that. and So fundings we seen

meet We those where they milestone to some have meet and we're were fact, date, to draws didn't by milestones actually those. companies significant expired transactions. a fund and met happy they had In did that a certain

milestones funding the the – And expired. so

sits And now. backlog how that's so it's right – kind the of

how do reasonably doing in how credits much number well. see to are four certainly of have them but in you'll of – portfolio and our we three that not with And milestones and get or rated are, that – those fact, a do

so hope value meet that And milestones drivers. our those because they is those are

Ryan Lynch

Okay. That's helpful. more. And had then one I just

new you're cautious guys high be that to funding deals you're You probably Obviously, in I slightly environment. leverage you know uncertain the your very are doing risk-adjusted today, end extremely said good the deals the return of I be to target quality, and pretty going just above guys the that today, range. are upper are going given you selective think, deals.

at What middle So the slightly up to kind bring end leverage end? look of you Or range, range? operating I'm your kind or you are just of guys intend to leverage you the actually of you are still if you the lower foresee wondering though, guys down looking you Do back to be of at do the upper where there? leverage half of target XXXX. above to thinking more

Dan Trolio

Ryan, Yes, fair to probably that comfortable range net X.XX cushion it's the remainder There's between plenty this to we this I regulatory regulatory for at X:X range. cap. We're say will around the XXXX. of be of think

Ryan Lynch

I time All Okay. appreciate today. the right,

Dan Trolio

Thank you.

Operator

There to are for back turn closing you. further now Pomeroy, no I the will Robert questions. Chairman remarks. CEO, Thank call and

Rob Pomeroy

support conclude Thank you Horizon, for joining appreciate This forward in morning. us this continued and all you and your interest We soon. again call. speaking with will look our we to

Operator

conference. participation. for you concludes your Thank today's This

may time. your You this at lines disconnect

Horizon Technology Finance (HRZN) 3 May 232023 Q1 Earnings call transcript