Horizon Technology Finance Provides Third Quarter 2021 Portfolio Update
FARMINGTON, Connecticut., October 6, 2021 / PRNewswire / – Horizon Technology Finance Corporation (NASDAQ: HRZN) (âHRZNâ or the âCompanyâ), a leading specialty finance company that provides capital in the form of secured loans to venture capital-backed companies in the fields of technology, life sciences, information and health services and sustainable development industries, today presented the update of its portfolio for the closed third quarter September 30, 2021 and an update on the lending platform (“Horizon Platform”) of Horizon Technology Finance Management LLC (“HTFM”), its investment advisor.
âWe had an excellent third quarter as the power of the Horizon brand and Horizon lending platform led to a quarterly record of $ 141 million loan arrangements, including $ 99 million loans for HRZN, âsaid Gerald A. Michaud, president of HTFM. âThe Horizon platform also ended the quarter with a committed order book of $ 123 million debt investments, including $ 101 million in HRZN’s commitments, a reflection of the fact that emerging and innovative companies and their investors continue to find in Horizon’s subprime loans the right solution for their capital needs. We are delighted that the increased financing capacity of the Horizon platform has helped generate high quality loans for HRZN, while maintaining a diversified portfolio of debt investments for HRZN. ”
âIn addition, HRZN has received $ 50 million prepayments of loans during the quarter, providing additional commission income and accelerated interest income and further validating our predictive pricing strategy, âadded Mr. Michaud. portfolio to continue to grow and deliver value to HRZN shareholders. ”
Third quarter 2021 portfolio update
During the third quarter of 2021, a total of $ 141.4 million loans financed via the Horizon platform, including 15 loans totaling $ 98.9 million funded by HRZN as follows:
- $ 22.5 million to a new holding company, Nexii Building Solutions Inc., a green building technology company focused on creating environmentally friendly, sustainable, profitable and disaster resistant buildings.
- $ 15.0 million to an existing holding company, Avalo Therapeutics, Inc. (fka Cerecor, Inc.) (NASDAQ: AVTX), a biopharmaceutical company focused on the development and commercialization of treatments for rare immunological, immuno-oncological and genetic disorders.
- $ 15.0 million to an existing holding company, TemperPack Technologies, Inc., a manufacturer of durable insulated packaging for perishable last mile deliveries.
- $ 12.5 million to a new holding company, Dropoff, Inc., a same-day delivery service for healthcare and other companies.
- $ 7.5 million to a new holding company, Stealth BioTherapeutics Inc. (NASDAQ: MITO), a developer of therapies to treat mitochondrial dysfunction associated with genetic mitochondrial diseases and common diseases of aging.
- $ 5.0 million to a new holding company, Spineology, Inc., a developer of anatomy-preserving technology solutions for use in lumbar spinal fusion procedures.
- $ 5.0 million to a new holding company, Branded Online, Inc. (dba Nogin), a business as a service company to consumer and lifestyle brands.
- $ 5.0 million to a new holding company, RepTrak Holdings, Inc., a developer of data analytics to help companies improve and protect their corporate reputation.
- $ 3.0 million to an existing holding company, Primary Kids, Inc., an online brand of baby and children’s clothing.
- $ 2.5 million to a new holding company, Embody, Inc., a developer of collagen biofabrication techniques and products for sports medicine.
- $ 2.5 million to an existing holding company, a developer of a software-defined composable infrastructure platform.
- $ 2.5 million to a new holding company, a developer of plant-based foods.
- $ 0.9 million to existing holding companies.
HRZN experienced liquidity events of five portfolio companies in the third quarter of 2021, including prepayments of principal of $ 50.4 million and receipt of the product of the mandates totaling $ 1.6 million, compared to $ 38.1 million prepayments of principal and $ 2.8 million proceeds from warrants and shares during the second quarter of 2021:
- In July, Revinate, Inc. prepaid its outstanding principal balance of $ 10.0 million on his subprime loan, plus interest, end-of-term payment and prepayment charges. HRZN continues to hold warrants in the company.
- In August, Bardy Diagnostics, Inc. was acquired by Hill-Rom Holdings, Inc. and prepaid its outstanding principal balance of $ 25.0 million on his subprime loan, plus interest, end-of-term payment, prepayment and success fees. HRZN also received a product totaling $ 1.2 million the reimbursement of the vouchers it held in the company.
- In September, Silk Technologies, Inc. prepaid its outstanding principal balance of $ 9.5 million on his subprime loan, plus interest, end-of-term payment and prepayment charges. HRZN continues to hold warrants in the company.
- In September, OutboundEngine, Inc. was acquired by Elm Street Technology, LLC and prepaid its outstanding principal balance of $ 5.9 million on his subprime loan, plus interest, end-of-term payment and prepayment charges. HRZN will receive a product totaling $ 0.3 million the reimbursement of the vouchers it held in the company.
- In September, HRZN received a $ 0.5 million costs of successful investment in Silkroad Technology, Inc.
Principal payments received
During the third quarter of 2021, HRZN received regular principal payments on investments totaling $ 3.2 million, compared to regular capital repayments totaling $ 3.0 million during the second quarter of 2021.
During the quarter ended September 30, 2021, HRZN closed new loan commitments totaling $ 91.0 million to 11 companies, against new loan commitments of $ 96.8 million to eight companies in the second quarter of 2021.
Pipeline and Term Sheets
From September 30, 2021, the approvals and commitments of unfunded loans from HRZN (âcommitted backlogâ), for the most part priced at variable interest rates, were $ 100.6 million to 21 companies. This compares to a committed order book of $ 143.5 million to 21 companies from June 30, 2021. HRZN portfolio companies have the discretion to withdraw such commitments and the right of a portfolio company to withdraw its commitment is often subject to the completion of specific milestones and other borrowing conditions. Therefore, there can be no assurance that some or all of these transactions will be funded by HRZN. The other funds managed by HTFM ended the quarter with a total of $ 22.5 million unfunded loan approvals and commitments.
During the quarter, HTFM received signed term sheets that are in the process of being approved, which may cause the Horizon platform to provide up to a total of $ 140.0 million new investments in debt. These opportunities are subject to subscription conditions including, but not limited to, the performance of due diligence, negotiation of final documentation and approval of the investment committee, as well as compliance with the policy. allocation of HTFM. Therefore, there can be no assurance that any or all of these transactions will be carried out or funded by HRZN.
Capital Markets Activity – Warrants and Equity Portfolio
From September 30, 2021, HRZN held a portfolio of warrants and equity interests in 75 portfolio companies, including 63 private companies, which offers potential for additional future returns to HRZN shareholders.
About Horizon Technology Finance
Horizon Technology Finance Corporation (NASDAQ: HRZN) is a leading specialty finance company providing capital in the form of secured loans to venture-backed companies in the technology, life sciences, health information and services and sustainable development. HRZN’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 during of these debt investments. Horizon Technology Finance Management LLC is headquartered in Farmington, Connecticut, with a regional office in Pleasanton, California, and investment professionals located in Portland, Maine, Austin, Texas, and Reston, Virginia. For more information, please visit www.horizontechfinance.com.
Statements included in this document 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 statements. guarantees future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from forward-looking statements due to a number of factors, including those described from time to time in documents filed by Horizon with the Securities and Exchange Commission. Horizon assumes no obligation to update any forward-looking statements contained in this document. All forward-looking statements speak only as of the date of this press release.
SOURCE Horizon Technology Finance Corporation