2022-07-13 | NDAQ:HRZN | Press release
– Original Horizon Platform Record $192 million new loans in Q2, including $137 million new loans for HRZN –
– Horizon Platform ends the quarter with a record backlog of $267 millionIncluding $221 million in HRZN commitments –
FARMINGTON, Conn., July 13, 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 second quarter ended June 30, 2022 and an update on the lending platform (“Horizon Platform”) of Horizon Technology Finance Management LLC (“HTFM”), its investment advisor.
“The Horizon Platform generated another record origination quarter despite a challenging economic environment, closing $192 million loans issued, including $137 million of loans for HRZN,” said Gerald A. Michaud, Chairman of HRZN and HTFM. “Furthermore, the Horizon brand continues to attract leading technology companies as the Horizon platform’s committed backlog hits an all-time high. $267 million investments in the form of debt, including $221 million in HRZN commitments. HRZN also received $57 million in loan prepayments during the quarter, providing additional revenue and further validating our predictive pricing strategy. There remains a clear need and demand for venture capital debt in this economic environment, and we believe the Horizon platform and HRZN remain disciplined and well positioned to continue to grow and deliver additional value to HRZN shareholders. »
Q2 2022 Portfolio Update
During the second quarter of 2022, a total of $192.4 million loans financed via the Horizon platform, including 15 loans totaling $137.2 million funded by HRZN as follows:
- $26.0 million to an existing portfolio company, Castle Creek Biosciences, Inc., a developer of gene therapies for patients with rare and serious genetic diseases, in connection with the prepayment of its existing Horizon Platform loan facility and the provision of additional loan capital.
- $15.0 million to a new holding company, Divergent Technologies Inc., a creator of an innovative global manufacturing infrastructure platform for the automotive industry.
- $12.5 million to a new portfolio company, a clinical-stage company focused on decoding the whole genome to identify optimal genetic targets to cure oncology and autoimmune diseases.
- $12.5 million to an existing holding company, NextCar Holding Company, Inc. (dba Autonomy), an online platform offering automobiles to consumers on a subscription basis.
- $10.0 million to a new holding company, a developer of a breathalyzer to detect recent cannabis use.
- $10.0 million to an existing portfolio company, IMV Inc. (NASDAQ: IMV), a clinical-stage biopharmaceutical company developing a new class of cancer immunotherapies and infectious disease vaccines.
- $10.0 million to an existing holding company, Nexii Building Solutions Inc., a green construction company that designs and manufactures low-carbon buildings and products.
- $7.5 million to a new portfolio company, Engage3, LLC, a developer of price optimization software that enables retailers and brands to profitably increase revenue and drive incremental store visits.
- $7.5 million to a new holding company, a developer of innovative medical devices and therapies to meet the changing needs of interventional specialists.
- $7.5 million to an existing holding company, Soli Organic Inc., a leading grower and marketer of fresh organic culinary herbs, supplying retailers with sustainable, USDA certified, locally grown organic products.
- $7.0 million to a new portfolio company, Swift Health Systems, Inc. (dba InBrace), a developer of teeth-straightening technology that provides an alternative to traditional braces and aligners.
- $5.0 million to an existing portfolio company, Emalex Biosciences, Inc., a clinical-stage biopharmaceutical company focused on developing treatments for central nervous system movement disorders and fluidity disorders.
- $3.75 million to a new holding company, a developer of next-generation microbial solutions for companion and food producing animals.
- $2.5 million to an existing holding company, Secure Transfusion Services, Inc., an operator of commercial blood collection centers that source and distribute vital and in-demand blood components to hospitals.
- $0.4 million to an existing company, MacuLogix, Inc., a medical device company in the optometry and ophthalmology industry.
HRZN experienced liquidity events from four holding companies in the second quarter of 2022, including principal prepayments of $56.8 million and $0.4 million of the proceeds of the warrants and price supplements, in relation to $12.0 million prepayments of principal during the first quarter of 2022:
- In April, using proceeds from a new loan from the Horizon platform, Castle Creek Biosciences, Inc. prepaid its outstanding principal balance of $25.0 million on its subprime loan facility, plus interest and payment at the end of the term. HRZN continues to hold mandates in the company.
- In May, Updater, Inc. prepaid its outstanding principal balance of $19.3 million on his subprime loan, plus interest, end-of-term payment and prepayment charges. HRZN continues to hold mandates in the company.
- In June, IDbyDNA, Inc. was acquired by Illumina, Inc. and prepaid its outstanding principal balance of $12.5 million on his subprime loan, plus interest, end-of-term payment and prepayment charges. HRZN also received proceeds totaling $0.3 million the redemption of the warrants he held in the company.
- In June, HRZN obtained a $0.1 million earnout related to its investment in Bardy Diagnostics, Inc.
Principal payments received
During the second quarter of 2022, HRZN received regular principal payments on investments totaling $4.0 millioncompared to regular capital repayments totaling $1.9 million during the first quarter of 2022.
During the quarter ended June 30, 2022HRZN closed new loan commitments totaling $203.4 million to 10 companies, against new credit commitments of $100.4 million to 11 companies in the first quarter of 2022. The other funds managed by HTFM, during the quarter, closed new loan commitments totaling $80.0 million unfunded loan approvals and commitments.
Pipeline and Term Sheets
From June 30, 2022HRZN’s unfunded loan approvals and commitments (“Committed Backlog”) have been $220.5 million to 23 companies. This compares to a committed order book of $150.8 million to 20 companies from March 31, 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 $46.5 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 $165.0 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 June 30, 2022HRZN held a portfolio of warrants and equity interests in 90 portfolio companies, including 76 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. 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 when of these debt investments. Horizon Technology Finance Management LLC is headquartered in Farmington, Connecticutwith a regional office in Pleasanton, Californiaand investment professionals located in Portland, Maine, Austin, TX, and Reston, Virginia. To learn more, please visit www.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