Good morning, ladies and gentlemen, and welcome to Horizon Technology Finance’s Second Quarter 2017 Conference Call. Today’s call is being recorded. All lines have been placed on mute. We will conduct a question-and-answer session after opening remarks. Instructions will follow at that time. I would now like to turn the call over to Ms. Megan Bacon of Horizon for introductions and the reading of the Safe Harbor statement. Please go ahead, ma’am.

Thank you and welcome to the Horizon Technology Finance second quarter 2017 conference call. Representing the Company today are Rob Pomeroy, Chairman and Chief Executive Officer; Jerry Michaud, President, and Dan Trolio, Chief Financial Officer. Before we begin, I would like to point out that the Q2 earnings press release and Form 10-Q are available on the Company’s website at horizontechfinance.com. Now, I will 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 believes, expects, anticipates, intends, or similar expressions are used to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ on a 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 Securities and Exchange Commission, including the Company’s Form 10-K for the year ended December 31, 2016. The Company undertakes no obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise. At this time, I would like to turn the call over to Rob Pomeroy.

Good morning and thank you all for joining us. In the second quarter, we continued to see strong investment activity as we are now seeing the benefits from our efforts over the previous three quarters to expand and improve Horizon’s lending platform. These efforts were made with very specific goals to grow our portfolio with quality transitions, maintain our profitability and to stabilize and improve the overall credit quality of our portfolio. Since last December, we have substantially enhanced our capabilities including the hiring of several professionals. Most recently, we added Todd McDonald as Managing Director for the Mid-Atlantic and Southeast Technology markets. Further, we have added additional talent in key areas such as portfolio management, business development, accounting and finance. In the second quarter, we funded new loans at a level that maintained our portfolio size while we experienced profitable prepayments and normal amortization. Importantly, we also increased our backlog, finishing the quarter with a committed backlog of $45 million. Jerry will provide details of our origination efforts later in this call. During the second quarter, we also continued to see the advantage of our seasoned portfolio with liquidity events from four portfolio companies, including $12.3 million in loan prepayments and realized gains from the exercise and sale of warrants. Our goal, as always, is to achieve long-term, sustainable portfolio growth without sacrificing quality. This approach has enabled us to consistently achieved strong portfolio yield, including 14.7% for the second quarter, which remains among the highest in the BDC industry. We have ample liquidity to deploy into attractive investments. Currently, we have over $61 million in liquidity including unrestricted cash and availability under our $95 million revolving credit facility. As we continue to drive increased investment activity, our focus remains on originating loans to companies in the life science,…

Thanks Rob. Good morning everyone. Greater demand for our venture loan product in our technology, life science and healthcare technology markets combined with the enhancements in our advisors origination platform over the last three quarters, have contributed to a more robust lending environment for Horizon and improved committed backlog, the largest in the last 21 quarters. In the second quarter, we originated five new loans, totaling $22 million and closed $44 million in new loan commitments. As a result, we finished the quarter with committed backlog of $45 million as we enter the second half of 2017. From a pricing perspective, we remain disciplined in the second quarter, achieving strong on-boarding yields of over 11.6%. We also generated a portfolio yield of 14.7% for the quarter compared to 15.5% in the first quarter. Horizon continues to have one of the highest yielding portfolios in the BDC industry. This is due to our ability to consistently maintain strong on-boarding yields since our inception combined with strategically pricing and structuring transactions with ETPs and prepayment fees to maximize returns received from companies exiting our portfolio. As a result, Horizon has maintained a portfolio yield on our debt investments of over 14% for eight straight quarters. As Rob mentioned, we continue to see increased pipeline activity and considerable improvement in the quality of the companies we’re looking at for potential transactions. This is due to focusing our efforts on originating loans to companies in our target markets, which have low leverage, continued support from their equity sponsors, and a plan to use our capital to achieve revenue growth, while meet development milestones. In addition to our committed backlog of $45 million at quarter-end, we are presently evaluating over $320 million in new opportunities. At the end of the second quarter, we held warrant…

Thanks, Jerry, and good morning everyone. I will now briefly discuss our financial results for the second quarter of 2017. Our total investment income for the second quarter was $5.9 million as compared to $9.1 million for the second quarter of 2016. The decrease is primarily due to the lower interest income on investments, resulting from the smaller average size of our loan portfolio. Onboarding yields in our portfolio were 11.6% for the current period. Our portfolio yield for the second quarter was 14.7% as compared to 15.5% for the last year’s second quarter. Turning to our expenses. Total expenses were $3.1 million for the second quarter, a 33% decrease as compared to $4.7 million in the second quarter of 2016. Included in these expenses is interest expense which decreased 28% on a year-over-year basis, mainly due to a decrease in average borrowings. Our base management fee decreased 29% year-over-year to $0.9 million compared to $1.2 million in the prior year period. This change was primarily due to a decrease in the average size of our investment portfolio. In addition, incentive fee expense for the second quarter was subject to the incentive fee cap and deferral mechanism under our investment management agreement. This resulted in $200,000 of reduced incentive fee expense and additional net investment income. Professional fees, and general and administrative expenses, which consist primarily of legal and audit fees, remained flat for the second quarter, compared to the second quarter of 2016. We earned net investment income of $0.24 per share for the second quarter as compared to $0.39 per share for the second quarter of 2016 and $0.29 per share for the first quarter of this year. After paying distributions of $0.30 per share and earning $0.24 per share for the quarter, the Company’s undistributed spillover income…

[Operator Instructions] The first question comes from Leslie Vandergrift from Raymond James. Your line is open. Please go ahead.

We just had a first question on the new nonaccrual Interleukin Genetics. So, last quarter, it was marked at almost 98.4% there. But, it looks like the payments for April, May and June had already been deferred until that FDA test -- or, excuse me, the next approval process was going through. And since that didn’t happen, obviously we have the markdown this quarter. But, how early was it determined to push those payments back with that, before May or after?

Yes. The timing here in inter-quarter is sort of interesting. We did make the additional advance in April, alongside the equity investors. And we’re working towards an outcome that would have given the company second life, became that we really determined that that process was not going to be fruitful in June. And so, the reversal to nonaccrual happened late in the quarter.

Okay. And then on that, I know that it was announced -- that are liquidating instead because of that. So, how far long are we in that process and how much of that is taken into account at the end of quarter mark, down to 75%?

Yes. So, they have engaged consultants and are working towards of orderly liquidation process, which is kicking off sort of now. We expect it will be concluded over the next -- in the third and fourth quarter. And our mark reflects our expectations from that process.

Okay. And then, I know you talked about the increase in portfolio to get the target leverage of that 60 million. So, what is the short-term next quarter, next two quarters target versus the long-term, which I believe is [ph] about 75% debt to equity there?

So, if you build a portfolio, one new loan at a time, less one prepay or normal amortization at a time. So, it’s too early for us in the quarter to say, where we’ll exactly end up. But as we said in our prepared comments, we’re encouraged by both, the level of our committed backlog and the quantity and quality of the transactions we’re looking at.

And then, just a final quick question. I know that you said on the -- in second quarter, there was no more share repurchases. Are you seeing opportunities to do more of that in the third quarter so far?

We always make the determination based on whether we think that investment is the right one for the Company, our shareholders. And of course that’s dependent on the price and other opportunities we have, and it has to happen within the window on which we can do it.

Our next question comes from Jonathan Bock from Wells Fargo. Your line is open. Please go ahead. Fin O’Shea: Hi, guys. Fin O’Shea for Jonathan this morning. Thanks for taking our question. I just had a quick follow-up to Leslie question on Interleukin. Given the situation you described, why was the follow-on investment only 8% PIK versus your outstanding, much richer investment and why invest alongside equity at that rate?

So, these are the decisions as venture lenders we make, we co-lend it with the equity investors to try to get to a better outcome. And we thought that that was in our best interest long-term. Fin O’Shea: And then I guess sort of a similar one on the Celsion that was the one of the improvements this quarter where you also had a follow-on but at a much -- that one was also all PIK which generally isn’t indicative of improvement in the company unless you’re sort of shoring it up. So, any sort of commentary on how that one came to improve and did have to do with your investment?

It’s pretty much the same answer. We were in a position where we could help the company progress and we are investing alongside both existing and new investors. And so a portion of our new is PIK interest but we are in the secured position.

Our next question comes from Ryan Lynch from KBW. Your line is open. Please go ahead.

If I look at you guys’ historical committed backlog and fundings, at 12/31, you guys had about $21 million backlog, you closed $26 million in Q1; at 3/31, you had about $11 million backlog, close $22 million in second quarter. I look today, about $45 million backlog; it’s one of the biggest I have seen for you all. I mean, if I look at backlog relative to fundings, I mean you guys have funded in the next -- the following quarter about as -- the level of funding that’s equaled or have been greater than the amount of backlog. So, I mean, is it reasonable to expect that in Q3, you could have $40 million plus of fundings in the quarter?

The answer to that is that one of the things that we have always -- we have been focused on is improving, not just the quantity of our backlog but quality of our backlog. And we have a couple other transactions that we have entered into, are significantly larger to later stage companies that actually again we are co-investing. And those transactions also have milestones, those have tranche. And the timing in which those milestones get met, could happen within the next two quarters but they also, may fall into next year as well. Let me just -- the answer is, -- your assumptions are actually pretty good, it could fall within the $40 million range but some of that could slip too. And I just want to be -- make it worth it.

And then, one on the dividend sustainability. I mean, you guys recently reduced the dividend few quarters ago; so far in Q1 and then in Q2 earnings have been blow the dividend. Can you just talk about or walk through how do we get from the most recent quarter of earnings of the $0.24 per share, which included only a partial incentive fee payment which helped out by about $0.02, so a full incentive fee would actually be lower than that. How do we get from this $0.24 per share up to the $0.30 quarterly dividend, or is it even -- is that number or is the quarterly dividend of $0.30 even sustainable?

Yes. Our Board sets the dividend based on our goal, and having setting distributions we can cover over time by NII. I think the drivers to get to dividend coverage or to work back towards our target leverage and maintain a normal pace of prepayments and the income that comes from those. And so when we set the dividends, we do it consistent with our goal of being able to cover our dividend with NII over time.

Our next question comes from Christopher Testa from National Securities. Your line is open. Please go ahead.

Just in relation to ScoreBig, obviously that took a decent hit this quarter. I’m just curious, how often do the projections for the payments we see, how often are you recalibrating [ph] those [technical difficulty] and is there a potential for this to go down further and also is this a similar process evaluating digital [ph] signals were up?

Chris, this is Dan. In relation to ScoreBig, we have monthly contact with the company and we get monthly performance as we’re always in full contact with our portfolio companies. So, we will review that on a monthly and on a quarterly basis. And throughout that process, the company will work with us and provide us forecasting as the document requires on annual basis. So, it is within our fair value policy and to be looked at quarterly.

Okay. And just with the tech banks and your commentary on, you guys still seeing competition from them. I’m just curious, if you could provide some additional color on whether these are the usual suspects or whether there is any new ones, and just how aggressive they’re being in terms of leverage they’re standing relative to last year?

Yes. The question, it is the same players; there aren’t any new engines, at least on the banking side that we’re seeing materially impact the market. So, really, it’s more about them competing with each other, which is driving up leverage a little bit, but really it’s more about pricing. And so that has both the positive and negative impact relative to what we do. We are finding that they are far more interested today than say a year ago of actually participating with us and much of what we do, because that allows them to be aggressive relative to pricing and win portions of transactions without having to drive up their own leverage. So, that has a very positive effect. Where it is negative effect is when their competing head-to-head and on transactions which are relatively, generally speaking not as -- not large transactions, so, they’re in the $10 million or below range, then those transactions become very competitive from a venture -- lender standpoint, compared to what the banks are willing to do.

Got it. And just curious, I know you’ve provided the quarter to-date kind of summary information on originations and prepayments. But are you seeing from now on potentially prepayments slowing down or sort of burnout of refi in your opinion in the portfolio, or do you expect this time will stand fine what historically?

Yes. I mean, it’s difficult to say; these are very dynamic companies. They are built to be acquired or go public and the timing of those events generally come up pretty quickly at any quarter. So, I mean, I think if you look historically at our prepayment activity, $15 million range would be kind of a normal quarter. And so sometimes, as I think in the first quarter, we had significantly higher prepayment than that. Second quarter was pretty much as we would have expected, and I kind of see normalization relative that going forward.

And just on the repurchases, I know you guys extended the $5 million program past couple of quarters. Just with originations being light and levered so well, how should we think about the appetite for doing repurchases? Is the multiple [ph] or extremely attractive for you to do this or as investment activity remains slow, is this something that you would do maybe at 90% of book or 85%? Just any color there is appreciated.

We don’t have a target price at which we would buy but it’s a combination of the return profile and attractiveness of investments, is the alternate use of the corporate liquidity versus where we think the stock price is -- would be of really good price for us to buy. So that’s a decision we make again within the window when we have that opportunity.

Our next question comes from Casey Alexander from Compass Point. Your line is open. Please go ahead.

Two quarters ago you said the scenario analysis around ScoreBig anticipated a payback period of three to five years. What is the payback period now?

It’s probably still in the three to five, maybe -- but a little bit longer.

Sorry. The payback period, the scenario analysis is the same, but the value got marked down substantially?

It’s more on the timing of when the payments are occurring. So, now, with the forecast and a slower ramp from when it was initially projected by the companies that has taken over the ScoreBig name in the ticket website. So, the timing in the -- when we will be collecting those payments has slowed in the earlier part of the projections. And that’s why…

What were you paid this quarter?

We have not been paid anything; they are still working through ramping up the website and all the features to it.

Thank you. I’m showing no further questions at this time. I would like hand the conference back over to Mr. Robert Pomeroy, Chairman and CEO for closing remarks.