WhiteHorse Finance, Inc. Announces Second Quarter 2022 Earnings Results and Declares Quarterly Distribution of $0.355 Per Share

Aug 10th, 2022 7:30 EST

NEW YORK, Aug. 10, 2022 /PRNewswire/ -- WhiteHorse Finance, Inc. ("WhiteHorse Finance" or the "Company") (Nasdaq: WHF) today announced its financial results for the quarter ended June 30, 2022. In addition, the Company's board of directors has declared a distribution of $0.355 per share with respect to the quarter ending September 30, 2022. The distribution will be payable on October 4, 2022 to stockholders of record as of September 20, 2022.

Second Quarter 2022 Summary Highlights

  • Net Asset Value of $347.4 million, or $14.95 per share
  • Investment portfolio(1) totaling $766.5 million
  • STRS JV investment portfolio totaling $318.8 million
  • Gross investment deployments(2) of $48.1 million for the second quarter, including new originations of $28.9 million and $19.2 million of fundings for add-ons to existing investments
  • Net investment income of $7.9 million, or $0.339 per share
  • Core net investment income of $7.8 million, or $0.334 per share(3)
  • Second quarter distribution of $0.355 per share

Stuart Aronson, WhiteHorse Finance's Chief Executive Officer, commented, "Despite economic headwinds, our well-diversified portfolio continued to perform well this past quarter, and WhiteHorse ended the quarter with no investments on non-accrual status.  We believe, given the modest leverage levels that we underwrite our loans to, that the majority of our portfolio companies will be able to service our debt in a rising interest rate environment.  Additionally, as a result of elevated repayment activity during the quarter, we remain comfortably below our leverage targets and have capacity to redeploy capital to higher yielding assets.  While our pipeline for future deal flow is at record levels, due in part to our differentiated three-tiered sourcing approach and relationship with the leading H.I.G. platform, we have a cautious approach and are selectively taking advantage of market conditions.  Our investment portfolio is also well-positioned to benefit from a rising interest rate environment as nearly 100% of our debt portfolio is comprised of floating rate debt investments.  Combined with the reset of three-month LIBOR and SOFR contracts and the full impact of our increased ownership in the Ohio STRS JV, we expect to achieve earnings accretion in the coming quarters."

Portfolio and Investment Activity

As of June 30, 2022, the fair value of WhiteHorse Finance's investment portfolio was $766.5 million, compared with $800.4 million as of March 31, 2022. The portfolio as of June 30, 2022 consisted of 105 positions across 68 companies with a weighted average effective yield of 9.9% on income-producing debt investments. The average debt investment size (excluding investments in STRS JV (as defined below)) was $7.9 million with the overall portfolio comprised of approximately 80.3% first lien secured loans, 2.9% second lien secured loans, 3.5% equity and 13.3% in investments in STRS JV. Almost all loans were variable rate investments (primarily indexed to the London Interbank Offered Rate or Secured Overnight Financing Rate) with fixed rate securities representing only 0.4% of loans at fair value. Nearly all performing floating rate investments have interest rate floors.

During the three months ended June 30, 2022, WhiteHorse Finance made investments in four new portfolio companies for a total of $28.9 million, added a total of $19.2 million to existing portfolio companies, and made net fundings of $1.4 million to revolver loans. Proceeds from sales and repayments totaled approximately $66.1 million for the three months ended June 30, 2022, driven by five full realizations in IvyRehab Intermediate II, LLC, What If Holdings, LLC, RLJ Pro-Vac, Inc., Tensar Corporation and Education Networks of America, Inc.

In addition to the transactions discussed above, during the three months ended June 30, 2022, WhiteHorse Finance transferred assets comprised of one new portfolio company and one add-on investment, totaling $17.8 million to STRS JV in exchange for cash proceeds.

WHF STRS Ohio Senior Loan Fund LLC

As of June 30, 2022, STRS JV's portfolio totaled $318.8 million, consisted of 32 portfolio companies and had a weighted average effective yield of 8.7% on its portfolio.

Results of Operations

For the three months ended June 30, 2022, the Company's net investment income was approximately $7.9 million, compared with approximately $6.1 million for the same period in the prior year, representing an increase of approximately 29.5%. The increase in net investment income for the year-over-year period was primarily attributable to higher investment income from interest income and STRS JV due to larger portfolio sizes in both the Company and STRS JV and higher accretion income due to more repayment activities. This was partially offset by higher interest expense incurred due to higher leverage balances and higher interest rates. For the three months ended June 30, 2022, the Company's investment in STRS JV generated an annualized, gross investment yield of approximately 12.1%.

For the three months ended June 30, 2022, core net investment income(3) was $7.8 million, or $0.334 per share, compared with $7.0 million, or $0.338 per share for the same period in the prior year.

For the three months ended June 30, 2022, WhiteHorse Finance reported a net realized and unrealized loss on investments and foreign currency transactions of $0.5 million. This compares with a net realized and unrealized gain on investments and foreign currency transactions of $4.4 million for the three months ended June 30, 2021. The decrease for the year-over-year period was primarily attributable to markdowns on the portfolio in the current quarter, partially offset by a $1.7 million realized gain from the recovery proceeds received from the RCS Class B Units investment.

WhiteHorse Finance reported a net increase in net assets resulting from operations of approximately $7.3 million for the three months ended June 30, 2022, which compares with a net increase of $10.5 million the three months ended June 30, 2021.

WhiteHorse Finance's net asset value was $347.4 million, or $14.95 per share, as of June 30, 2022, compared with $347.9 million, or $14.99 per share, as of Mach 31, 2022.

Liquidity and Capital Resources

As of June 30, 2022, WhiteHorse Finance had cash and cash equivalents of $18.6 million, compared with $21.3 million as of Mach 31, 2022, inclusive of restricted cash. As of June 30, 2022, the Company also had $96.3 million of undrawn capacity under its revolving credit facility.

Distributions

The Company's Board of Directors has declared a distribution of $0.355 per share with respect to the quarter ending September 30, 2022. The distribution will be payable on October 4, 2022 to stockholders of record as of September 20, 2022.

On May 10, 2022, the Company declared a distribution of $0.355 per share for the quarter ended June 30, 2022, consistent with distributions declared for the thirty-ninth consecutive quarter since the Company's initial public offering. The distribution was paid on July 5, 2022 to stockholders of record as of June 20, 2022.

Distributions are paid from taxable earnings and may include return of capital and/or capital gains. The specific tax characteristics of the distributions will be reported to stockholders on Form 1099-DIV after the end of the calendar year and in the Company's periodic reports filed with the Securities and Exchange Commission.

Conference Call

WhiteHorse Finance will host a conference call to discuss its second quarter results for the period ended June 30, 2022 at 1:00 p.m. ET on Wednesday, August 10, 2022. To access the teleconference, please dial 800-459-5346 (domestic and international) approximately 10 minutes before the teleconference's scheduled start time and reference Conference ID #WHFQ222. Investors may also access the call on the investor relations portion of the Company's website at www.whitehorsefinance.com.

If you are unable to access the live teleconference, a replay will be available beginning approximately two hours after the call's completion through August 17, 2022. The teleconference replay can be accessed by dialing 800-839-6911 (domestic and international). A webcast replay will also be available on the investor relations portion of the Company's website at www.whitehorsefinance.com.

About WhiteHorse Finance, Inc.

WhiteHorse Finance is a business development company that originates and invests in loans to privately held, lower middle market companies across a broad range of industries. The Company's investment activities are managed by H.I.G. WhiteHorse Advisers, LLC, an affiliate of H.I.G. Capital, LLC, ("H.I.G. Capital"). H.I.G. Capital is a leading global alternative asset manager with $50 billion of capital under management(4) across a number of funds focused on the small and mid-cap markets. For more information about H.I.G. Capital, please visit http://www.higcapital.com. For more information about the Company, please visit http://www.whitehorsefinance.com.

Forward-Looking Statements

This press release may contain "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 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 filings with the Securities and Exchange Commission. The Company 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.

(1) Includes investments in WHF STRS Ohio Senior Loan Fund LLC ("STRS JV"), an unconsolidated joint venture, totaling $102.3 million, at fair value.

(2) Excludes investments made in STRS JV.

(3) "Core net investment income" is a non-GAAP financial measure. The Company believes that core net investment income provides useful information to investors and management because it reflects the Company's financial performance excluding (i) the net impact of costs associated with the refinancing of the Company's indebtedness, (ii) the accrual of the capital gains incentive fee attributable to net realized and unrealized gains and losses, and (iii) excise and other income taxes related to such net realized gains and losses (net of incentive fees). The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. Additional information on core net investment income and a reconciliation of core net investment income to its most directly comparable GAAP financial measure, net investment income, are set forth in Schedule 1 hereto.

(4) Based on total capital commitments managed by H.I.G. Capital and affiliates.

SCHEDULE 1

As a supplement to GAAP financial measures, the Company has provided information relating to core net investment income, which is a non-GAAP measure. This measure is provided in addition to, but not as a substitute for, net investment income determined in accordance with GAAP. The Company's non-GAAP measures may differ from similar measures by other companies, even if similar terms are used to identify such measures. Core net investment income represents net investment income adjusted to exclude the net impact of costs associated with the refinancing of the Company's indebtedness, the accrual of the capital gains incentive fee attributable to net realized and unrealized gains and losses, and excise or other income taxes related to such net realized gains and losses (net of incentive fees). There were no excise or other income taxes related to net realized gains and losses nor did the Company incur any costs with refinancing any of its indebtedness for the quarters ended June 30, 2022 and June 30, 2021.

The following table provides a reconciliation of net investment income to core net investment income for the three months ended June 30, 2022 and June 30, 2021 (in thousands, except per share data):

June 30, 2022

June 30, 2021

Amount

 Per Share

Amount

 Per Share

Amounts

Amounts

Net investment income

$

7,875

$

0.339

$

6,100

$

0.296

Net impact of costs associated with refinancing of indebtedness

-

-

-

-

Accrual for capital gains incentive fee

(106)

(0.005)

882

0.042

Net impact of excise tax expense related to net realized gains and losses

-

-

-

-

Core net investment income

$

7,769

$

0.334

$

6,982

$

0.338

WhiteHorse Finance, Inc.

Consolidated Statements of Assets and Liabilities

(in thousands, except share and per share data)

June 30, 2022

December 31, 2021

(Unaudited)

Assets

Investments, at fair value

Non-controlled/non-affiliate company investments

$

651,983

$

736,727

Non-controlled affiliate company investments

12,217

6,874

Controlled affiliate company investments

102,279

75,607

Total investments, at fair value (amortized cost $767,809 and $831,960, respectively)

766,479

819,208

Cash and cash equivalents

9,231

12,185

Restricted cash and cash equivalents

8,769

9,814

Restricted foreign currency (cost of $603 and $464, respectively)

596

469

Interest and dividend receivable

6,287

7,521

Amounts receivable on unsettled investment transactions

6,271

Escrow receivable

1,071

515

Prepaid expenses and other receivables

905

1,307

Total assets

$

799,609

$

851,019

Liabilities

Debt

$

423,235

$

475,958

Distributions payable

8,251

8,222

Management fees payable

3,908

3,766

Incentive fees payable

5,176

7,958

Amounts payable on unsettled investment transactions

7,496

Interest payable

2,117

2,087

Accounts payable and accrued expenses

1,476

2,438

Advances received from unfunded credit facilities

525

839

Total liabilities

452,184

501,268

Commitments and contingencies

Net assets

Common stock, 23,243,088 and 23,162,667 shares issued and outstanding, par value $0.001 per share, respectively, and 100,000,000 shares authorized

23

23

Paid-in capital in excess of par

340,264

339,161

Accumulated earnings

7,138

10,567

Total net assets

347,425

349,751

Total liabilities and total net assets

$

799,609

$

851,019

Number of shares outstanding

23,243,088

23,162,667

Net asset value per share

$

14.95

$

15.10

WhiteHorse Finance, Inc.

Consolidated Statements of Operations

(Unaudited)

(in thousands, except share and per share data)

Three months ended June 30, 

Six months ended June 30, 

2022

2021

2022

2021

Investment income

From non-controlled/non-affiliate company investments

Interest income

$

16,028

$

14,148

$

32,769

$

28,960

Fee income

679

350

1,141

1,121

Dividend income

79

65

168

109

From non-controlled affiliate company investments

Interest income

73

133

Dividend income

109

717

240

967

From controlled affiliate company investments

Interest income

1,459

738

2,586

1,457

Dividend income

1,573

1,325

2,997

2,699

Total investment income

20,000

17,343

40,034

35,313

Expenses

Interest expense

4,945

3,811

9,719

7,613

Base management fees

3,908

3,357

7,859

6,701

Performance-based incentive fees

1,837

2,628

3,264

4,670

Administrative service fees

170

170

341

341

General and administrative expenses

1,088

875

2,036

1,696

Total expenses

11,948

10,841

23,219

21,021

Net investment income before excise tax

8,052

6,502

16,815

14,292

Excise tax

175

402

399

592

Net investment income after excise tax

7,877

6,100

16,416

13,700

Realized and unrealized gains (losses) on investments and foreign currency transactions

Net realized gains (losses)

Non-controlled/non-affiliate company investments

686

(555)

(17,498)

7,605

Non-controlled affiliate company investments

1,725

1,725

Foreign currency transactions

(61)

(4)

(342)

(3)

Foreign currency forward contracts

(8)

(4)

(8)

(4)

Net realized gains (losses)

2,342

(563)

(16,123)

7,598

Net change in unrealized appreciation (depreciation)

Non-controlled/non-affiliate company investments

(4,546)

4,407

12,570

(2,568)

Non-controlled affiliate company investments

(586)

755

(2,206)

321

Controlled affiliate company investments

1,502

(149)

1,672

(269)

Translation of assets and liabilities in foreign currencies

756

(40)

727

(102)

Foreign currency forward contracts

4

1

Net change in unrealized appreciation (depreciation)

(2,870)

4,974

12,763

(2,618)

Net realized and unrealized gains (losses) on investments and foreign currency transactions

(528)

4,411

(3,360)

4,980

Net increase in net assets resulting from operations

$

7,349

$

10,511

$

13,056

$

18,680

Per Common Share Data

Basic and diluted earnings per common share

$

0.32

$

0.51

$

0.56

$

0.91

Dividends and distributions declared per common share

$

0.36

$

0.36

$

0.71

$

0.71

Basic and diluted weighted average common shares outstanding

23,240,651

20,626,340

23,215,792

20,589,159

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited)

June 30, 2022

(in thousands)

Issuer

Investment Type(1)

Floor

SpreadAboveIndex(2)

InterestRate(3)

AcquisitionDate(10)

MaturityDate

Principal/ShareAmount

AmortizedCost

FairValue(11)

Fair ValueAs APercentageof NetAssets

North America

Debt Investments

Air Freight & Logistics

Access USA Shipping, LLC (d/b/a MyUS.com)

First Lien Secured Term Loan

1.50 %

L+ 8.00%

9.67 %

02/08/19

02/08/24

4,791

$

4,768

$

4,791

1.38

%

Motivational Marketing, LLC (d/b/a Motivational Fulfillment)

First Lien Secured Term Loan

1.00 %

L+ 6.25%

7.50 %

07/12/21

07/12/26

11,135

10,956

10,914

3.14

Motivational Marketing, LLC (d/b/a Motivational Fulfillment)(7)

First Lien Secured Revolving Loan

1.00 %

L+ 6.25%

7.50 %

07/12/21

07/12/26

(4)

15,724

15,701

4.52

Application Software

Atlas Purchaser, Inc. (d/b/a Aspect Software)

Second Lien Secured Term Loan

0.75 %

L+ 9.00%

11.19 %

05/03/21

05/07/29

15,000

14,614

13,890

3.99

Naviga Inc. (f/k/a Newscycle Solutions, Inc.)

First Lien Secured Term Loan

1.00 %

L+ 7.00%

9.25 %

06/14/19

12/29/22

3,197

3,188

3,197

0.92

Naviga Inc. (f/k/a Newscycle Solutions, Inc.)(7)(12)

First Lien Secured Revolving Loan

1.00 %

Base rate+ 6.38%

10.41 %

06/14/19

12/29/22

183

183

183

0.05

17,985

17,270

4.96

Asset Management & Custody Banks

JZ Capital Partners Ltd.(4)(5)

First Lien Secured Term Loan

1.00 %

L+ 7.00%

8.21 %

01/26/22

01/26/27

10,286

10,098

10,196

2.93

JZ Capital Partners Ltd.(4)(5)(7)

First Lien Secured Delayed Draw Loan

1.00 %

L+ 7.00%

8.21 %

01/26/22

01/26/27

55

0.02

10,098

10,251

2.95

Automotive Retail

Team Car Care Holdings, LLC (Heartland Auto)(12)

First Lien Secured Term Loan

1.00 %

Base rate+ 7.98%

9.04 %

02/16/18

06/28/24

14,825

14,753

14,791

4.26

14,753

14,791

4.26

Broadcasting

Coastal Television Broadcasting Group LLC

First Lien Secured Term Loan

1.00 %

SF+ 6.50%

8.02 %

12/30/21

12/30/26

8,191

8,044

8,041

2.31

Coastal Television Broadcasting Group LLC(7)

First Lien Secured Revolving Loan

1.00 %

SF+ 6.50%

8.02 %

12/30/21

12/30/26

8,044

8,041

2.31

Building Products

PFB Holdco, Inc. (d/b/a PFB Corporation)(13)

First Lien Secured Term Loan

1.00 %

C+ 6.50%

7.73 %

12/17/21

12/17/26

8,982

6,900

6,903

1.98

PFB Holdco, Inc. (d/b/a PFB Corporation)(7)(13)

First Lien Secured Revolving Loan

1.00 %

C+ 6.50%

7.73 %

12/17/21

12/17/26

7

PFB Holdco, Inc. (d/b/a PFB Corporation)

First Lien Secured Term Loan

1.00 %

L+ 6.50%

7.50 %

12/17/21

12/17/26

2,187

2,148

2,155

0.62

PFB Holdco, Inc. (d/b/a PFB Corporation)(7)

First Lien Secured Revolving Loan

1.00 %

L+ 6.50%

7.50 %

12/17/21

12/17/26

1

Trimlite Buyer LLC (d/b/a Trimlite LLC)(5)(13)

First Lien Secured Term Loan

1.00 %

C+ 6.50%

9.18 %

07/27/21

07/27/26

22,688

17,784

17,345

4.99

26,832

26,411

7.59

Cable & Satellite

Bulk Midco, LLC(15)(24)

First Lien Secured Term Loan

1.00 %

L+ 7.17%

8.67 %

06/08/18

06/08/23

14,922

14,880

14,326

4.12

14,880

14,326

4.12

Commodity Chemicals

Flexitallic Group SAS

First Lien Secured Term Loan

1.00 %

L+ 7.50%

9.75% (9.25% Cash + 0.50% PIK)

10/28/19

10/29/26

15,682

15,078

15,333

4.41

15,078

15,333

4.41

Construction Materials

Claridge Products and Equipment, LLC

First Lien Secured Term Loan

1.00 %

L+ 6.50%

8.75 %

12/30/20

12/29/25

7,601

7,495

7,508

2.15

Claridge Products and Equipment, LLC(7)(12)

First Lien Secured Revolving Loan

1.00 %

Base rate+ 5.93%

9.06 %

12/30/20

12/29/25

891

882

872

0.25

8,377

8,380

2.40

Consumer Finance

Maxitransfers Blocker Corp.

First Lien Secured Term Loan

1.00 %

L+ 8.50%

10.75 %

10/07/20

10/07/25

8,367

8,237

8,367

2.41

Maxitransfers Blocker Corp.(4)(7)

First Lien Secured Revolving Loan

1.00 %

L+ 8.50%

10.75 %

10/07/20

10/07/25

16

8,237

8,383

2.41

Data Processing & Outsourced Services

Escalon Services Inc.

First Lien Secured Term Loan

1.00 %

L+ 10.31%

11.72% (10.22% Cash + 1.50% PIK)

12/04/20

12/04/25

17,247

$

16,514

$

17,592

5.06

%

Future Payment Technologies, L.P.

First Lien Secured Term Loan

1.00 %

L+ 8.25%

9.31 %

12/23/16

06/07/24

23,533

23,371

23,533

6.77

39,885

41,125

11.83

Department Stores

Mills Fleet Farm Group, LLC

First Lien Secured Term Loan

1.00 %

L+ 6.25%

7.92 %

10/24/18

10/24/24

13,172

12,992

13,172

3.79

12,992

13,172

3.79

Distributors

Crown Brands LLC

First Lien Secured Term Loan

1.00 %

SF+ 8.00%

9.05 %

04/22/22

12/09/25

357

357

357

0.10

Crown Brands LLC(19)

Second Lien Secured Term Loan

1.50 %

L+ 10.50%

12.17 %

12/15/20

01/08/26

4,384

4,312

2,850

0.82

Crown Brands LLC(19)

Second Lien Secured Delayed Draw Loan

1.50 %

L+ 10.50%

12.19 %

12/15/20

01/08/26

651

651

423

0.12

5,320

3,630

1.04

Diversified Chemicals

Manchester Acquisition Sub LLC (d/b/a Draslovka Holding AS)

First Lien Secured Term Loan

0.75 %

SF+ 5.75%

7.30 %

11/16/21

11/16/26

7,960

7,572

7,571

2.18

Sklar Holdings, Inc. (d/b/a Starco)

First Lien Secured Term Loan

1.00 %

L+ 9.75%

10.75% (8.75% Cash + 2.00% PIK)

11/13/19

05/13/23

7,371

7,299

7,003

2.02

14,871

14,574

4.20

Diversified Support Services

NNA Services, LLC

First Lien Secured Term Loan

1.00 %

L+ 6.75%

9.00 %

08/27/21

08/27/26

11,448

11,329

11,357

3.27

11,329

11,357

3.27

Education Services

EducationDynamics, LLC

First Lien Secured Term Loan

1.00 %

L+ 7.00%

8.60% (8.10% Cash + 0.50% PIK)

09/15/21

09/15/26

13,186

12,964

13,169

3.78

EducationDynamics, LLC(4)(7)

First Lien Secured Delayed Draw Loan

1.00 %

L+ 7.00%

8.60% (8.10% Cash + 0.50% PIK)

09/15/21

09/15/26

27

0.01

EducationDynamics, LLC(7)

First Lien Secured Revolving Loan

1.00 %

L+ 7.00%

8.60% (8.10% Cash + 0.50% PIK)

09/15/21

09/15/26

19

0.01

EducationDynamics, LLC(4)

Subordinated Unsecured Term Loan

N/A

4.00 %

4.00 %

09/15/21

03/15/27

167

167

167

0.05

13,131

13,382

3.85

Electric Utilities

CleanChoice Energy, Inc. (d/b/a CleanChoice)

First Lien Secured Term Loan

1.00 %

L+ 7.25%

8.29 %

10/12/21

10/12/26

10,500

10,320

10,352

2.98

10,320

10,352

2.98

Environmental & Facilities Services

Industrial Specialty Services USA LLC

First Lien Secured Term Loan

1.00 %

L+ 6.25%

8.50 %

12/31/21

12/31/26

11,947

11,732

11,595

3.34

Industrial Specialty Services USA LLC(7)

First Lien Secured Revolving Loan

1.00 %

L+ 6.25%

7.71 %

12/31/21

12/31/26

1,016

998

984

0.28

12,730

12,579

3.62

Health Care Facilities

Bridgepoint Healthcare, LLC

First Lien Secured Term Loan

1.00 %

L+ 7.75%

8.94 %

10/05/21

10/05/26

10,701

10,518

10,508

3.02

Bridgepoint Healthcare, LLC(7)

First Lien Secured Delayed Draw Loan

1.00 %

L+ 7.75%

8.94 %

10/05/21

10/05/26

(8)

Bridgepoint Healthcare, LLC(7)

First Lien Secured Revolving Loan

1.00 %

L+ 7.75%

8.94 %

10/05/21

10/05/26

(2)

10,518

10,498

3.02

Health Care Services

CHS Therapy, LLC

First Lien Secured Term Loan A

1.50 %

L+ 9.00%

11.25% (10.75% Cash + 0.50% PIK)

06/14/19

06/14/24

7,164

7,111

7,164

2.06

CHS Therapy, LLC

First Lien Secured Term Loan C

1.50 %

L+ 9.00%

11.25% (10.75% Cash + 0.50% PIK)

10/07/20

06/14/24

881

872

881

0.25

Lab Logistics, LLC

First Lien Secured Term Loan

1.00 %

SF+ 7.25%

8.63 %

10/16/19

09/25/23

5,515

5,445

5,450

1.57

Lab Logistics, LLC

First Lien Secured Delayed Draw Loan

1.00 %

L+ 7.25%

8.25 %

10/16/19

09/25/23

5,157

5,145

5,157

1.48

PG Dental New Jersey Parent, LLC

First Lien Secured Term Loan

1.00 %

L+ 9.75%

11.07% (9.57% Cash + 1.50% PIK)

11/25/20

11/25/25

14,787

14,565

13,548

3.90

PG Dental New Jersey Parent, LLC(7)

First Lien Secured Revolving Loan

1.00 %

L+ 9.75%

11.07% (9.57% Cash + 1.50% PIK)

11/25/20

11/25/25

352

$

346

$

298

0.09

%

33,484

32,498

9.35

Health Care Supplies

ABB/Con-cise Optical Group LLC (d/b/a ABB Optical Group, LLC)

First Lien Secured Term Loan

0.75 %

L+ 7.50%

8.26 %

02/23/22

02/23/28

21,682

21,171

21,096

6.07

ABB/Con-cise Optical Group LLC (d/b/a ABB Optical Group, LLC)(7)(12)

First Lien Secured Revolving Loan

0.75 %

Base rate+ 6.51%

11.22 %

02/23/22

02/23/28

1,970

1,923

1,916

0.55

23,094

23,012

6.62

Heavy Electrical Equipment

PPS CR Acquisition, Inc. (d/b/a Power Plant Services)

First Lien Secured Term Loan

1.00 %

L+ 6.25%

8.50 %

06/25/21

06/25/26

11,067

10,891

10,953

3.15

PPS CR Acquisition, Inc. (d/b/a Power Plant Services)(7)

First Lien Secured Revolving Loan

1.00 %

L+ 6.25%

8.50 %

06/25/21

06/25/24

104

103

112

0.03

10,994

11,065

3.18

Home Furnishings

Sleep OpCo LLC (d/b/a Brooklyn Bedding LLC)

First Lien Secured Term Loan

1.00 %

L+ 6.50%

7.51 %

10/12/21

10/12/26

19,934

19,592

19,655

5.66

Sleep OpCo LLC (d/b/a Brooklyn Bedding LLC)(7)

First Lien Secured Revolving Loan

1.00 %

L+ 6.50%

7.51 %

10/12/21

10/12/26

8

Sure Fit Home Products, LLC

First Lien Secured Term Loan

1.00 %

L+ 9.75%

12.01 %

04/12/21

07/13/23

4,807

4,751

4,086

1.18

24,343

23,749

6.84

Household Appliances

Token Buyer, Inc. (d/b/a Therm-O-Disc, Inc.)

First Lien Secured Term Loan

0.50 %

SF+ 6.00%

7.63 %

05/26/22

05/31/29

6,180

5,691

5,686

1.64

5,691

5,686

1.64

Household Products

The Kyjen Company, LLC (d/b/a Outward Hound)

First Lien Secured Term Loan

1.00 %

L+ 6.50%

7.99 %

04/05/21

04/05/26

11,345

11,217

11,062

3.18

The Kyjen Company, LLC (d/b/a Outward Hound)(7)

First Lien Secured Revolving Loan

1.00 %

L+ 6.50%

7.95 %

04/05/21

04/05/26

704

696

683

0.20

11,913

11,745

3.38

Industrial Machinery

Project Castle, Inc. (d/b/a Material Handling Systems, Inc.)

First Lien Secured Term Loan

0.50 %

L+ 5.50%

6.90 %

06/09/22

06/01/29

8,376

7,496

7,559

2.18

7,496

7,559

2.18

Interactive Media & Services

MSI Information Services, Inc.

First Lien Secured Term Loan

1.00 %

SF+ 7.75%

9.38 %

04/25/22

04/24/26

7,950

7,798

7,791

2.24

MSI Information Services, Inc.(7)(12)

First Lien Secured Revolving Loan

1.00 %

Base rate+ 6.84%

11.30 %

04/25/22

04/24/26

481

472

471

0.14

8,270

8,262

2.38

Internet & Direct Marketing Retail

BBQ Buyer, LLC (d/b/a BBQ Guys)

First Lien Secured Term Loan

1.50 %

L+ 10.00%

11.67% (9.67% Cash + 2.00% PIK)

08/28/20

08/28/25

12,686

12,484

12,528

3.61

BBQ Buyer, LLC (d/b/a BBQ Guys)

First Lien Secured Delayed Draw Loan

1.50 %

L+ 10.00%

11.67% (9.67% Cash + 2.00% PIK)

04/29/22

08/28/25

2,586

2,543

2,560

0.74

Luxury Brand Holdings, Inc. (d/b/a Ross-Simons, Inc.)

First Lien Secured Term Loan

1.00 %

L+ 6.50%

7.74 %

12/04/20

06/04/26

5,910

5,826

5,873

1.69

Potpourri Group, Inc.

First Lien Secured Term Loan

1.50 %

L+ 8.25%

9.75 %

07/03/19

07/03/24

16,920

16,767

16,920

4.87

37,620

37,881

10.91

Investment Banking & Brokerage

JVMC Holdings Corp. (fka RJO Holdings Corp)

First Lien Secured Term Loan

1.00 %

L+ 7.00%

8.67 %

02/28/19

02/28/24

12,295

12,254

12,295

3.54

12,254

12,295

3.54

IT Consulting & Other Services

ATSG, Inc.

First Lien Secured Term Loan

1.00 %

L+ 6.50%

7.91 %

11/12/21

11/12/26

13,921

$

13,678

$

13,708

3.95

%

13,678

13,708

3.95

Leisure Facilities

Honors Holdings, LLC (d/b/a Orange Theory)(16)(24)

First Lien Secured Term Loan

1.00 %

L+ 7.69%

9.35% (8.85% Cash + 0.50% PIK)

09/06/19

09/06/24

9,440

9,329

9,345

2.69

Honors Holdings, LLC (d/b/a Orange Theory)(16)(24)

First Lien Secured Delayed Draw Loan

1.00 %

L+ 7.73%

9.05% (8.55% Cash + 0.50% PIK)

09/06/19

09/06/24

4,649

4,616

4,603

1.32

Lift Brands, Inc. (d/b/a Snap Fitness)

First Lien Secured Term Loan A

1.00 %

L+ 7.50%

9.17 %

06/29/20

06/29/25

5,603

5,550

5,546

1.60

Lift Brands, Inc. (d/b/a Snap Fitness)

First Lien Secured Term Loan B

N/A

9.50 %

9.50% (0.00% Cash + 9.50% PIK)

06/29/20

06/29/25

1,330

1,313

1,303

0.38

Snap Fitness Holdings, Inc. (d/b/a Lift Brands, Inc.)(9)

First Lien Secured Term Loan C

N/A

9.50 %

9.50% (0.00% Cash + 9.50% PIK)

06/29/20

NA

1,268

1,265

1,084

0.31

22,073

21,881

6.30

Leisure Products

Playmonster Group LLC(6)(20)(22)

First Lien Secured Term Loan

1.00 %

L+ 8.00%

9.08% (1.08% Cash + 8.00% PIK)

01/24/22

06/08/26

3,489

3,489

3,489

1.00

3,489

3,489

1.00

Life Sciences Tools & Services

LSCS Holdings, Inc. (d/b/a Eversana Life Science Services, LLC)

Second Lien Secured Term Loan

0.50 %

L+ 8.00%

10.25 %

11/23/21

12/16/29

5,000

4,930

4,900

1.41

4,930

4,900

1.41

Office Services & Supplies

American Crafts, LC

First Lien Secured Term Loan

1.00 %

L+ 8.50%

10.17 %

05/28/21

05/28/26

8,245

8,149

8,030

2.31

American Crafts, LC

First Lien Secured Delayed Draw Loan

1.00 %

L+ 8.50%

10.17 %

01/25/22

05/28/26

1,385

1,360

1,359

0.39

Empire Office, Inc.

First Lien Secured Term Loan

1.50 %

L+ 6.50%

8.17 %

04/12/19

04/12/24

12,231

12,118

12,072

3.47

Empire Office, Inc.(4)(7)

First Lien Secured Delayed Draw Loan

1.50 %

L+ 6.50%

8.17 %

08/17/21

04/12/24

(56)

(0.02)

21,627

21,405

6.15

Packaged Foods & Meats

Lenny & Larry's, LLC(17)(24)

First Lien Secured Term Loan

1.00 %

L+ 8.38%

9.70% (7.99% Cash + 1.71% PIK)

05/15/18

05/15/23

11,188

11,151

10,909

3.15

11,151

10,909

3.15

Personal Products

Inspired Beauty Brands, Inc.

First Lien Secured Term Loan

1.00 %

L+ 7.00%

8.41 %

12/30/20

12/30/25

11,960

11,792

11,841

3.41

Inspired Beauty Brands, Inc.(7)

First Lien Secured Revolving Loan

1.00 %

L+ 7.00%

8.41 %

12/30/20

12/30/25

2

Sunless, Inc.

First Lien Secured Term Loan

1.00 %

L+ 6.50%

8.75 %

06/30/22

08/13/25

2,097

2,055

2,055

0.59

13,847

13,898

4.00

Research & Consulting Services

Aeyon LLC(24)

First Lien Secured Term Loan

1.00 %

SF+ 8.88%

10.07 %

02/10/22

02/10/27

8,955

8,790

8,812

2.54

ALM Media, LLC

First Lien Secured Term Loan

1.00 %

L+ 6.50%

8.17 %

11/25/19

11/25/24

13,781

13,649

13,643

3.93

Nelson Worldwide, LLC

First Lien Secured Term Loan

1.00 %

L+ 10.25%

11.29% (10.29% Cash + 1.00% PIK)

01/09/18

01/09/23

9,411

9,386

9,309

2.68

31,825

31,764

9.15

Specialized Consumer Services

Camp Facility Services Holdings, LLC (d/b/a Camp Construction Services, Inc.)

First Lien Secured Term Loan

1.00 %

L+ 6.50%

8.10 %

11/16/21

11/16/27

12,838

12,607

12,624

3.63

Camp Facility Services Holdings, LLC (d/b/a Camp Construction Services, Inc.)(4)(7)

First Lien Secured Delayed Draw Loan

1.00 %

L+ 6.50%

8.10 %

11/16/21

11/16/27

5

HC Salon Holdings, Inc. (d/b/a Hair Cuttery)

First Lien Secured Term Loan

1.00 %

L+ 8.00%

10.25 %

09/30/21

09/30/26

11,579

11,382

11,579

3.33

HC Salon Holdings, Inc. (d/b/a Hair Cuttery)(7)

First Lien Secured Revolving Loan

1.00 %

L+ 8.00%

10.25 %

09/30/21

09/30/26

12

True Blue Car Wash, LLC(24)

First Lien Secured Term Loan

1.00 %

SF+ 6.85%

8.47 %

10/17/19

10/17/24

10,035

9,930

9,943

2.86

True Blue Car Wash, LLC(7)(24)

First Lien Secured Delayed Draw Loan

1.00 %

SF+ 6.50%

7.98 %

10/17/19

10/17/24

3,358

$

3,308

$

3,310

0.95

%

37,227

37,473

10.77

Specialized Finance

WHF STRS Ohio Senior Loan Fund LLC(4)(5)(9)(14)

Subordinated Note

N/A

L+ 6.50%

7.62 %

07/19/19

N/A

80,000

80,000

80,000

23.03

80,000

80,000

23.03

Systems Software

Arcstor Midco, LLC (d/b/a Arcserve (USA), LLC

First Lien Secured Term Loan

1.00 %

L+ 7.00%

9.25 %

03/16/21

03/16/27

19,256

18,954

17,909

5.15

18,954

17,909

5.15

Technology Hardware, Storage & Peripherals

Telestream Holdings Corporation

First Lien Secured Term Loan

1.00 %

SF+ 9.25%

10.59 %

10/15/20

10/15/25

15,926

15,583

15,899

4.58

Telestream Holdings Corporation(7)

First Lien Secured Revolving Loan

1.00 %

SF+ 9.25%

10.59 %

10/15/20

10/15/25

530

519

546

0.16

Telestream Holdings Corporation(7)

First Lien Secured Delayed Draw Loan

1.00 %

SF+ 9.25%

10.59 %

05/12/22

10/15/25

16,102

16,445

4.74

Total Debt Investments

$

721,166

$

717,089

206.35

%

Equity Investments(23)

Advertising

Avision Holdings, LLC (d/b/a Avision Sales Group)(4)

Class A LLC Interests

N/A

N/A

N/A

12/15/21

N/A

201

$

251

$

185

0.05

%

251

185

0.05

Air Freight & Logistics

Motivational CIV, LLC (d/b/a Motivational Fulfillment)(4)

Class B Units

N/A

N/A

N/A

07/12/21

N/A

1,250

1,250

650

0.19

1,250

650

0.19

Building Products

PFB Holdco, Inc. (d/b/a PFB Corporation)(4)(13)

Class A Units

N/A

N/A

N/A

12/17/21

N/A

1

423

576

0.17

423

576

0.17

Data Processing & Outsourced Services

Escalon Services Inc.(4)

Warrants

N/A

N/A

N/A

12/04/20

N/A

709

476

2,183

0.63

476

2,183

0.63

Diversified Support Services

Quest Events, LLC(4)

Preferred Units

N/A

N/A

N/A

12/28/18

12/08/25

324

324

53

0.02

ImageOne Industries, LLC(4)

Common A Units

N/A

N/A

N/A

09/20/19

N/A

227

2

120

0.03

326

173

0.05

Education Services

Eddy Acquisitions, LLC (d/b/a EducationDynamics, LLC)(4)

Preferred Units

N/A

12.00 %

12.00 %

09/15/21

N/A

167

167

167

0.05

167

167

0.05

Environmental & Facilities Services

BPII-JL Group Holdings LP (d/b/a Juniper Landscaping Holdings LLC)(4)

Class A Units

N/A

N/A

N/A

12/29/21

N/A

83

825

800

0.23

825

800

0.23

Health Care Services

Lab Logistics, LLC(4)(21)

Preferred Units

N/A

14.00 %

14.00% PIK

10/29/19

N/A

2

857

1,141

0.33

857

1,141

0.33

Industrial Machinery

BL Products Parent, LP (d/b/a Bishop Lifting Products, Inc.)(4)

Class A Units

N/A

N/A

N/A

02/01/22

N/A

667

667

667

0.19

667

667

0.19

Interactive Media & Services

What If Media Group, LLC(4)

Common Units

N/A

N/A

N/A

07/02/21

N/A

851

$

851

$

2,068

0.60

%

851

2,068

0.60

Internet & Direct Marketing Retail

BBQ Buyer, LLC (d/b/a BBQ Guys)(4)

Shares

N/A

N/A

N/A

08/28/20

N/A

1,100

1,100

2,255

0.65

Ross-Simons Topco, LP (d/b/a Ross-Simons, Inc.)(4)

Preferred Units

N/A

8.00 %

8.00% PIK

12/04/20

N/A

600

514

840

0.24

1,614

3,095

0.89

Investment Banking & Brokerage

Arcole Holding Corporation(4)(5)(6)(18)

Shares

N/A

N/A

N/A

10/01/20

N/A

6,944

6,475

1.86

6,944

6,475

1.86

IT Consulting & Other Services

CX Holdco LLC (d/b/a Cennox Inc.)(4)

Common Units

N/A

N/A

N/A

05/04/21

N/A

972

972

1,554

0.45

Keras Holdings, LLC (d/b/a KSM Consulting, LLC)(4)

Shares

N/A

N/A

N/A

12/31/20

N/A

496

496

496

0.14

1,468

2,050

0.59

Leisure Facilities

Snap Fitness Holdings, Inc. (d/b/a Lift Brands, Inc.)(4)

Class A Common Stock

N/A

N/A

N/A

06/29/20

N/A

2

1,941

183

0.05

Snap Fitness Holdings, Inc. (d/b/a Lift Brands, Inc.)(4)

Warrants

N/A

N/A

N/A

06/29/20

06/28/28

1

793

74

0.02

2,734

257

0.07

Leisure Products

Playmonster Group Equity, Inc. (d/b/a PlayMonster Group LLC)(4)(6)(8)(22)

Preferred Stock

N/A

14.00 %

14.00% PIK

01/24/22

N/A

36

3,600

2,253

0.66

Playmonster Group Equity, Inc. (d/b/a PlayMonster Group LLC)(4)(6)(22)

Common Stock

N/A

N/A

N/A

01/24/22

N/A

72

460

4,060

2,253

0.66

Other Diversified Financial Services

SFS Global Holding Company (d/b/a Sigue Corporation)(4)

Warrants

N/A

N/A

N/A

06/28/18

12/28/25

Sigue Corporation(4)

Warrants

N/A

N/A

N/A

06/28/18

12/28/25

22

2,890

3,489

1.00

2,890

3,489

1.00

Specialized Consumer Services

Camp Facility Services Parent, LLC (d/b/a Camp Construction Services, Inc.)(4)

Preferred Units

N/A

10.00 %

10.00% PIK

11/16/21

N/A

15

840

882

0.26

840

882

0.26

Specialized Finance

WHF STRS Ohio Senior Loan Fund(4)(5)(14)

LLC Interests

N/A

N/A

N/A

07/19/19

N/A

20,000

20,000

22,279

6.41

20,000

22,279

6.41

Total Equity Investments

$

46,643

$

49,390

14.23

%

Total Investments

$

767,809

$

766,479

220.58

%

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited)

June 30, 2022

(in thousands)

Counterparty

Currency to be sold

Currency to be purchased

Settlement date

Unrealized appreciation

Unrealized depreciation

Morgan Stanley

C$

80 CAD

$

62 USD

 7/29/22

$

$

Total

$

$

(1)

Except as otherwise noted, all investments are non-controlled/non-affiliate investments as defined by the Investment Company Act of 1940, as amended (the "1940 Act"), and provide collateral for the Company's credit facility.

(2)

The investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate ("LIBOR" or "L"), which resets monthly, quarterly or semiannually, the Secured Overnight Financing Rate ("SOFR" or "SF"), the Canadian Dollar Offered Rate ("CDOR" or "C"), Canada Prime Rate ("CP") or the U.S. Prime Rate ("Prime" or "P").

(3)

The interest rate is the "all-in-rate" including the current index and spread, the fixed rate, and the payment-in-kind ("PIK") interest rate, as the case may be.

(4)

The investment or a portion of the investment does not provide collateral for the Company's credit facility.

(5)

Not a qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of total assets. Qualifying assets represented 82.9% of total assets as of the date of the consolidated schedule of investments.

(6)

Investment is a non-controlled/affiliate investment as defined by the 1940 Act.

(7)

The investment has an unfunded commitment in addition to any amounts presented in the consolidated schedule of investments as of June 30, 2022.

(8)

Preferred equity investment is a non-income producing security.

(9)

Security is perpetual with no defined maturity date.

(10)

Except as otherwise noted, all of the Company's portfolio company investments, which as of the date of the consolidated schedule of investments represented 220.6% of the Company's net assets or 95.9% of the Company's total assets, are subject to legal restrictions on sales.

(11)

The fair value of each investment was determined using significant unobservable inputs.

(12)

The investment was comprised of two contracts, which were indexed to different base rates, L and P, respectively. The Floor, Spread Above Index and Interest Rate presented represent the weighted average of both contracts.

(13)

Principal amount is non-USD denominated and is based in Canadian dollars.

(14)

Investment is a controlled affiliate investment as defined by the 1940 Act. On January 14, 2019, the Company entered into an agreement with State Teachers Retirement System of Ohio, a public pension fund established under Ohio law ("STRS Ohio"), to create WHF STRS Ohio Senior Loan Fund, LLC ("STRS JV"), a joint venture, which invests primarily in senior secured first and second lien term loans.

(15)

In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest in the amount of 2.75% on its "last out" tranche of the portfolio company's senior term debt, which was previously syndicated into "first out" and "last out" tranches, whereby the "first out" tranche will have priority as to the "last out" tranche with respect to payments of principal, interest and any other amounts due thereunder.

(16)

In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest in the amount of 3.50% on its "last out" tranche of the portfolio company's senior term debt, which was previously syndicated into "first out" and "last out" tranches, whereby the "first out" tranche will have priority as to the "last out" tranche with respect to payments of principal, interest and any other amounts due thereunder.

(17)

In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest in the amount of 3.00% on its "last out" tranche of the portfolio company's senior term debt, which was previously syndicated into "first out" and "last out" tranches, whereby the "first out" tranche will have priority as to the "last out" tranche with respect to payments of principal, interest and any other amounts due thereunder.

(18)

On October 1, 2020, as part of a restructuring agreement between the Company and Arcole Acquisition Corp, the Company's investments in first lien secured term loans to Arcole Acquisition Corp were converted into common shares of Arcole Holding Corp.

(19)

At the option of the issuer, interest can be paid in cash or cash and PIK. The issuer may elect to pay up to 2.00% PIK.

(20)

At the option of the issuer, interest can be paid in cash or cash and PIK. The issuer may elect to pay up to 9.00% PIK.

(21)

Investment earns 14.00% that converts to PIK on an annual basis and is recorded in interest and dividend receivable in the consolidated statements of assets and liabilities.

(22)

On January 24, 2022, as part of a restructuring agreement between the Company and PlayMonster LLC, the Company's first lien secured term loan and delayed draw loan investments to PlayMonster LLC were converted into a new first lien secured term loan, preferred stock and common stock of Playmonster Group LLC.

(23)

Ownership of certain equity investments may occur through a holding company or partnership.

(24)

Investment is structured as a unitranche loan in which the Company may receive additional interest on its "last out" tranche of the portfolio company's senior term debt, which was previously syndicated into "first out" and "last out" tranches, whereby the "first out" tranche will have priority as to the "last out" tranche with respect to payments of principal, interest and any other amounts due thereunder.

Contacts

Stuart AronsonWhiteHorse Finance, Inc.212-506-0500[email protected]

or

Joyson ThomasWhiteHorse Finance, Inc.305-379-2322[email protected]

or

Robert BrinbergRose & Company212-257-5932[email protected]

SOURCE WhiteHorse Finance, Inc.

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