Good morning and welcome to Horizon Technology Finances’ Third Quarter 2013 Conference Call. (Operator Instructions). I would now like to turn the call over Michael Cimini of the IGB Group for introductions of the readings of the Safe Harbor statement. Please go ahead sir.

Thank you, and welcome to the Horizon Technology Finance third quarter 2013 conference call representing the Company today are Rob Pomeroy, Chairman and Chief Executive Officer; Jerry Michaud, President; and Chris Mathieu, Chief Financial Officer. Before we begin, I would like to point out that Q3 press release is available on the Company's website at www.horizontechnologyfinancecorp.com. Now, I'll read the following Safe Harbor statement. During this conference call, Horizon Technology Finance will make certain forward-looking statements including statements with regard to the future performance of the Company. Words such as believe, expect, anticipate, intend, or similar expressions are used to identify forward-looking statements. These statements are subject to the inherent uncertainties and predicting future results and conditions. Certain factors could cause actual results to differ on material basis from those projected in these forward-looking statements, and some of these factors are detailed in the Risk Factor discussion in the Company's filings with the SEC including Form 10-K for the year ended December 31, 2012. The Company undertakes no obligations to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Rob? At this time, I would like to turn the call over to Rob Pomeroy.

Thank you Mike. Good morning and thank you all for joining us. During the third quarter Horizon delivered strong financial results for shareholders generating high current pay interest income and earning attractive fees. We’re pleased to once again capitalize on the inherent earnings power of our dynamic venture loan portfolio. For the third quarter we earned net investment income of $3.5 million or $0.36 per share which exceeded our previously declared monthly dividends. Since implementing our current dividend strategy one year ago our NII has exceeded our dividend in three out of four quarters and in the aggregate fully covered our dividends. We remain focused on taking advantage of the inherent earnings power within our existing investment portfolio and utilizing our disciplined approach to capitalize on select new opportunities. I would like to spend a few months to discuss in more detail some of the main business drivers that contributed to our success in the quarter. First is the return that we generated on our investments, Horizon has consistently earned high yields on it's loan investments between 11% and 15% which take into account the coupon interest, amendment fees, end-of-term payments or ETPs and prepayment fees. As a reminder loan prepayments are regular feature of the venture lending model providing capital that can be redeployed into high yielding assets. For the third quarter all of these factors combined for a solid weighted average yield of 14.6%. Next is the effective use of leverage. During the third quarter we benefited from the use of cost effective leverage to increase earnings. By recently completing our first investment grade term securitization and reducing the interest rate on our revolving credit facility we have enhanced our ability to leverage new and existing investments at more favorable rates. As we take proactive measures to enhance…

Thank you Rob and good morning everyone. As we anticipated our marketing activity in the third quarter was soft compared to the first half of 2013. However there were a number of events that took place during the quarter that further impacted Q3 marketing results. First two transactions which we expected to fund in Q3 slipped into the fourth quarter and were funded in October. Second most of the funding’s in the third quarter were tranche funding’s as part of a larger commitment so actual fund transaction size the smaller for the quarter. But the third quarter’s historically is a slow quarter; July and August were particularly quite resulting in a significant decline in our pipeline during that period. Last we experienced significant competition in our life science market for late stage drug development companies that resulted in irrational pricing and transaction structures characterized by single digit yields, low warrant coverage, high valuations and covenant life time’s [ph]. We now believe that market opportunity for late stage life science opportunities is overheated due to competition from royalty funds, strategic capital and they continue to robust IPO market. We have seen a silver lining in the life science market over the last few quarters however as VCs are returning to investing an earlier stage life science companies again providing attractive lending opportunities in this segment of the life science market. Horizon has taken advantage of opportunities in this market segment over the past few quarters as reflected in the number of high quality life science companies we’ve added to our portfolio such as Microline, Inotek, (indiscernible) pharmaceutical and Tryton Medical. We expect to focus on this segment of life science market going forward as it represents opportunities to close quality transactions at attractive pricing. We will continue to monitor the late…

Thanks Jerry and good morning everybody. Our consolidated financial results for the three months ended September 30, 2013 has been presented in our earnings release distributed after the market closed yesterday. We also filed our Form 10Q with the SEC last night. For the three months ended September 30, total investment income increased 31% to $8.7 million compared to 6.6 million for the third quarter of 2012. This increase was primarily due to the increased average size of our loan portfolio. The new portfolio companies funded in the third quarter had an average onboarding yield of 12.3%. Total investment income for the quarter included $8.2 million from interest income on investments as well as approximately $500,000 of fee income associated with loan prepayments totaling $7.5 million from three of our portfolio companies. For the nine months ended September 30, total investment income increased 33%, it's $24.9 million compared to 18.7 million for the first nine months of 2012. Total investment income for the first nine months of 2013 consisted of 24 million an interest income on investments with the remainder consisting of fee income, future loan prepayments in the second and third quarter. For the third quarter our portfolio yield was 14.6% compared to 13.6% for the third quarter of 2012. The portfolio yield for the nine months period ended September 30, 2013 and 2012 was 14.1% and 13.9% respectively. The primary changes from quarter-to-quarter to portfolio yields are driven by the timing of new loan funding’s and timing and extend of loan prepayments within the portfolio. The company’s total expenses were 5.1 million for the third quarter of 2013 as compared to 3.7 million for the third quarter of 2012. Total expenses for each period consisted of interest expense, management incentive and administrative fees and to a lesser extent…

Thank you Chris. We’re pleased by our performance for the third quarter which demonstrates the earnings power of our dynamic venture loan portfolio. I want to emphasize that management remains focused on optimizing the capital that we have available to us by deploying that capital to grow efficiently and profitably into a diverse mix of quality, high yielding assets. We have no intention of raising equity capital in current levels, we will remain patient as we endeavor to reduce our leverage, maintain an appropriate level of investments and extract profits from our portfolio. Profits will come from double digit coupons, fees, ETPs and ultimately from monetizing our warrant position as opportunities present themselves. We will also continue to enhance our profitability by improving the cost and efficiency of our debt capital as evidenced by our new partnership with Key Equipment Finance. In doing so we intend to strengthen Horizon’s leading industry brand and drive long term shareholder value. Before we open the floor for questions I would like to note that we plan to hold our next conference call to report fourth quarter results during the week of March 10, 2014. We will be happy to take questions you may have at this time.

(Operator Instructions). Our first question comes from (indiscernible) of KBW. Your line is open.

With the amendment of your Wells facility should we expect those existing fees associated with that facility to be expense [ph] in the fourth quarter as hard that amendment or would those new fees, would those existing fees rollover to the new facility?

So the structure of the transaction was an amendment and modification where KeyBank came in and took the place of Wells rather than closing down the old facility and creating a new one. So essentially it's a replacement, there is a slight accounting impact where it's about a nickel impact in the fourth quarter for the transition from one lender to the other.

Okay so now you would expect basically the same kind of those amortization of origination fees the experience in 2013 or the key facility.

Correct.

Okay. And then Chris I don’t know if I heard you long but did you say you guys expected $10 million to $15 million of negative net portfolio growth in the fourth quarter?

That’s correct.

It's 5 to-

5 to 15.

5 million to 15 million, okay.

On a net basis.

Yeah and then you guys take (indiscernible) on non-accruals you guys had about a $2 million write-down in this market about a $3 million. Looks like they filed for Chapter 7 bankruptcy on Monday and I saw their only assets were really primarily intellectual property. So was this liquidation you know of the company you know factored into your second quarter evaluation or could this be further downside to your third quarter mark?

When we fair value of the assets we use a scenario approach which included in our expectation that they would file Chapter 7.

Our next question comes from Fin O'Shea of Raymond James. Your line is open.

I just had a question on the credit quality of the portfolio. We saw there has been an uptick in level of lien [ph] loans by about 4.5 million and you know more than offset by floor [ph] loans going at about 14 million, you could just get us some detail on those.

Yes so the primary movements there were the increase in value for one non-accrual loans ACT which I spoke to in the body of my script, and so as a result of it's increase in value fair value the percentage wise, those are primary difference.

Our next question comes from (inaudible) of Wells Fargo. Your line is open.

I really appreciate the market color guys and as we have seen then you referenced IPO is accelerating in 3Q and quarter-to-date, how does this impact the demand for your debt and also the prospects for your loan monetization’s?

So actually it's you know we have gone through these cycles you know over a very long period of time and so we, they all tend to at the end of the day kind of look the same after when you get chance to look back at it and then what we’re beginning to see is you know later stage companies that were waiting for either better public markets or better M&A environment are now having that opportunity to get some liquidity and what the result of that has historically being, we’re beginning to see it now as well as we see this become far more optimistic and capable by the way of raising additional capital and deploying that in earlier stage asset so while the later stage deals that we may have had an opportunity to finance had the IPO market or M&A market then less attractive, those deals start to get out and go away but on the other side of that we start seeing lots of really good opportunities in earlier stage companies across you know the various market sectors and that is exactly what we’re seeing now. I would particularly point out the life science market where we’re seeing really high quality life science fields that are relatively you know in earlier stages that are getting funded and that’s something that market has had trouble raising capital over the last couple of years because most of the money was in fact going into late stage companies. So we’re pretty optimistic that where we’re losing deals on the top we’re going to gain you know we will be gaining deals on the bottom side. So where it could impact is the size of the transactions because obviously earlier stage deals A, don’t need as much capital and don’t qualify for much capital so the transaction sizes might be on average a little bit smaller but generally speaking I think overall the dollar opportunity for investment we’re seeing actually starting to get stronger from both the lower end of the market right up through you know the middle part of the market. So we’re pretty optimistic going into 2014 especially what I’ve just seen here on the fourth quarter is there will be ample opportunity and market capacity for us to meet our funding goals.

And on the earlier stage deals would it fair to assume that the typical structure on these would be U.S. the sole lender given the smaller size or would you be perhaps (indiscernible) or someone else?

Yeah you raised a very interesting question. You know if you look at what we were able to accomplish in the first three quarters of last year after we completed our bond offering and then sequentially be follow on equity offering. We were able to deploy all of that capital extremely efficient within the transactions where we you know we were able to source the deals and essentially fund most of that on our own nickel. We knew coming into this year that liquidity was going to be a challenge for us. We even though we got approval to do an equity offering below NAV we had pretty early on decided to you know try to manage the capital we have and efficiently deploy that and so started that strategy you know we have been partnering on a lot of transaction this year that has allowed us to stay in the market, price the deals appropriately and get high quality yields on transaction. So we’re doing that a lot more this year and that has effectively allowed us to be very aggressive and very active in the marketplace.

Our next question comes from Merrill Ross of Wunderlich Securities. Your line is open.

I was wondering if there was any commonality in the non-accruals and similarities or differences in what you expect them to you know workout particularly of the new one that came on this quarter.

No each one is unique, they have been in different markets and got to the position of non-accrual for very different reasons but once that are can be anticipated in the venture lending space so these are not unusual but they happen but there is no commonality.

So a follow-up, and switching to a more positive topic. How would you define your franchise now in getting new investments or new commitments? Is it more a function of your following up with VC partners that you know have previously sent deals to you or is this more partnering up you know with other lenders who are you know more active in the business now than they were then?

Yes so it's the latter, we are still seeing a significant in-flow of referrals from the venture capital community that we have, have been working with for you know over 20 years now as a management team. Most of the partnering we’re doing, we’re bringing partners into our transaction. It's almost exclusive but they have maybe you know one or two, it's (indiscernible) but for the most part we’re the ones we’re generating the opportunities and bringing in partners as we see a need to do that.

Our next question comes from Matthew Howlett of UBS. Your line is open.

Just to follow-up on the comments you know maybe it to be raise capital. I know a lot has changed as the Special Stockholder Meeting and can we just sort of kind of look at it like the improved liquidity position of the company since then, the new facilities in place the improved outlook on the portfolio and the warrant but does the explain the more of the comments as it relates to capital?

We have as Chris mentioned we have adequate capital to deploy based on available cash and to the return of capital from prepayments and normal amortization. So we’re very comfortable trying to optimize the existing portfolio and try to stay as fully investors as we can. We’re also trying to reduce the leverage by deploying the cash that we raised from securitization but trying to get back down to you know our target leverage of 0.8 to 1 now. Matthew Howlett – UBS: Right, can one presume that with the stock still well below NAV and you know this stability in the portfolio last year I mean that you wouldn’t look to raise capital at meaningful discount the book I mean is that something that at this point is off the table?

Our goal is to not issue shares below NAV as we’ve stated we have no intension to selling shares at the current levels. Matthew Howlett – UBS: And then with the, you know with the real improvement with the facilities and you know the securitization could you revisit the SVIC [ph] at some point again, I mean do you look at it as a natural progression with a company given you know your larger peer which is trading well above book seems to be really utilizing those facilities?

Yeah as we have stated before we really have no intention of reapplying for the SVI [ph] license at this time.

Our next question comes from Casey Alexander of Gilford Securities. Your line is open.

The Key facility, am I correct is the commitment strong by 25 million from what it was under Wells?

That’s correct it's-

And is that intended to reduce the non-use fee?

That is one of the bio-products of it, yes.

Okay and is the advance rate any different than what you had under Wells?

The advance rate is almost identical; it's 50% on eligible assets. The big difference is that we have a shift in the breakdown between first and second lien eligible asset. So it's now substantially improved that we can have more second lien business that previously had to be targeted for either securitization or the Fortress facility and with this improved eligibility for second lien to assets we now see a much better path to put that on the Key facility.

And just to make sure I hate to ask this I think this is the third time you’ve to answer this but projected 5 million to 15 million of net negative portfolio growth for Q4 is that correct?

Net portfolio decrease, yes the 5 to 15.

We have also mentioned those, we anticipated as much and that includes the anticipation of some prepays in the fourth quarter.

My last question is that the few income associated with the prepays in this quarter was you know reasonably quite a bit higher than it was in the second quarter although the absolute level of prepays was pretty reasonably lower than it was in the second quarter. Was it something unusual about the fee structures and the deals that came this quarter or last quarter that account for that difference?

Yes. So prepayments are almost always structured in declining value so our early prepayments in the life of a loan tend to be in the 4% or 5% range of the principal outstanding at that time and so the prepayments that occurred were earlier in the life cycle. If you had a loan that would say for a year, three or a four year loan it might only be 1% or 2% prepayment penalty in this case for these deals.

All right that makes sense and lastly the discussion about the later stage life science being overheated I mean is that your expectation that you’re going to get refi-ed out of a number of your later stage life science deals that you’re holding now?

I wouldn’t say it's our expectation that happens because if the company’s decide through an IPO that that wouldn’t necessarily result us on being prepaid. So I wouldn’t say that that’s something that we expect you know we did see a couple of transactions in that market though we were prepaid this year. But I wouldn’t say that this is you know kind of run on the bank as it relates to that. First of all if you look at all that science portfolio it is a pretty strong blend of not just late stage but you know early and middle stage companies as well. So I’m not overly concerned about that going into 2014.

I’m showing no further questions. At this time I would like to turn the call back over to Rob Pomeroy for any further remarks.

I want to thank everyone again for joining us on today’s call and following the Horizon story. We look forward to sharing our progress with you in the future.

This concludes Horizon Technology Finance Corporation’s conference call. Thank you and have a great day.