FARMINGTON, Conn., April 8, 2020 /PRNewswire/ -- Horizon Technology Finance Corporation (NASDAQ: HRZN) ("Horizon," "We," "Our" or the "Company"), a leading specialty finance company that provides capital in the form of secured loans to venture capital backed companies in the technology, life science, healthcare information and services, and sustainability industries, today provided a preliminary assessment of COVID-19's effect on the Company's operations to-date, as well as its portfolio update for the first quarter ended March 31, 2020.
"During the first quarter, we originated $50.5 million in loans, recording our eighth consecutive quarter of portfolio growth," said Gerald A. Michaud, President of Horizon. "We continue to prudently originate new loans that meet our current underwriting criteria in light of the impact of the coronavirus pandemic on the economy. We experienced liquidity events early in the quarter, which again demonstrated the power of our predictive pricing strategy. We believe we are adequately capitalized to navigate through the current environment and to continue to deliver value to our shareholders."
COVID-19's Preliminary Effects
Horizon's foremost priority is to ensure the health and well-being of its team. To that end, as the COVID-19 pandemic situation unfolded in March, Horizon promptly activated its business continuity plans, and its team is working remotely, with operations continuing uninterrupted. As a result, Horizon is closely monitoring its current portfolio companies while continuing to source new venture debt investments.
"We will continue to closely monitor the evolving economic landscape as it relates to our portfolio companies. At the same time, we will seek opportunities for companies to utilize our venture debt solutions," said Robert D. Pomeroy, Jr., Chairman and Chief Executive Officer of Horizon. "We believe our strong balance sheet, closely managed portfolio, and deep management experience will help us navigate through these challenging times."
First Quarter 2020 Portfolio Update
Horizon funded six loans during the first quarter of 2020 totaling $50.5 million:
Horizon experienced liquidity events from five portfolio companies in the first quarter of 2020, including principal prepayments of $16.4 million and warrant proceeds of $5.4 million, compared to $22.3 million of principal prepayments and $2.0 million of warrant proceeds during the fourth quarter of 2019:
Joint Venture Activity
During the first quarter of 2020, Bridge2 prepaid its outstanding principal balance of $0.5 million on its venture loan, plus interest and end-of-term payment. The joint venture also received proceeds of $0.04 million from the termination of its warrants in Bridge2.
Principal Payments Received
During the first quarter of 2020, Horizon received regularly scheduled principal payments on investments totaling $4.2 million, compared to regularly scheduled principal payments totaling $4.3 million during the fourth quarter of 2019.
During the first quarter ended March 31, 2020, Horizon closed new loan commitments totaling $55.0 million to three companies, compared to new loan commitments of $88.0 million to six companies in the fourth quarter of 2019.
As of March 31, 2020, Horizon's unfunded loan approvals and commitments ("Committed Backlog"), all priced at floating interest rates, were $44.2 million to ten companies. This compares to a Committed Backlog of $49.5 million to ten companies as of December 31, 2019. While Horizon's portfolio companies have discretion whether to draw down such commitments, the right of a portfolio company to draw down its commitment is often subject to achievement of specific milestones and other conditions to borrowing.
Capital Markets Activity – Warrant and Equity Portfolio
As of March 31, 2020, Horizon held a portfolio of warrant and equity positions in 70 portfolio companies, including 58 private companies, which provides the potential for future additional returns to Horizon's shareholders.
About Horizon Technology Finance
Horizon Technology Finance Corporation (NASDAQ: HRZN) is a leading specialty finance company that provides capital in the form of secured loans to venture capital backed companies in the technology, life science, healthcare information and services, and sustainability industries. The investment objective of Horizon is to maximize its investment portfolio's return by generating current income from the debt investments it makes and capital appreciation from the warrants it receives when making such debt investments. Headquartered in Farmington, Connecticut, Horizon also has regional offices in Pleasanton, California and Reston, Virginia. To learn more, please visit www.horizontechfinance.com.
Statements included herein 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 are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Horizon's filings with the Securities and Exchange Commission. Horizon undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.
SOURCE Horizon Technology Finance Corporation