8-K
WhiteHorse Finance, Inc. (WHF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):May 10, 2021
WhiteHorse Finance, Inc.
(Exact name of registrant as specified in itscharter)
| Delaware | 814-00967 | 45-4247759 |
|---|---|---|
| (State or other jurisdiction | (Commission | (IRS Employer |
| of incorporation) | File Number) | Identification Number) |
| 1450 Brickell Avenue, 31st Floor | ||
| --- | --- | |
| Miami, Florida | 33131 | |
| (Address of principal executive offices) | (Zip Code) |
(305) 381-6999
(Registrant’s telephone number, includingarea code)
Not Applicable
(Former Name or Former Address, if changed sincelast report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered |
|---|---|---|
| Common Stock, par value $0.001 per share | WHF | The Nasdaq Stock Market LLC <br><br>(Nasdaq Global Select Market) |
| 6.50% Notes due 2025 | WHFBZ | The Nasdaq Stock Market LLC <br><br>(Nasdaq Global Select Market) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02. Results of Operationsand Financial Condition
On May 10, 2021, WhiteHorse Finance, Inc. (the “Company”) issued a press release announcing a quarterly distribution and its financial results for the first quarter ended March 31, 2021. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 furnished herewith, is being furnished and shall not be deemed “filed” for any purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such Section. The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 furnished herewith, shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 7.01. Regulation FD Disclosure
A copy of an earnings presentation that is intended to be used by representatives of the Company is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.
The information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2 furnished herewith, is being furnished and shall not be deemed “filed” for any purpose of Section 18 of the Exchange Act, or otherwise subject to the liabilities of such Section. The information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2 furnished herewith, shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Forward-Looking Statements
This Current Report on Form 8-K, including Exhibit 99.1 and Exhibit 99.2 furnished herewith, 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 Current Report on Form 8-K 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 Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
| 99.1 | Press Release of WhiteHorse Finance, Inc. dated May 10, 2021 |
|---|---|
| 99.2 | Earnings Presentation of WhiteHorse Finance, Inc. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: May 10, 2021 | WHITEHORSE FINANCE, INC. | |
|---|---|---|
| By: | /s/ Joyson C. Thomas | |
| Joyson C. Thomas | ||
| Chief Financial Officer |
Exhibit 99.1
WhiteHorse Finance, Inc. Announces First Quarter 2021 EarningsResults and Declares Quarterly Distribution of $0.355 Per Share
NEW YORK, NY, May 10, 2021 – WhiteHorse Finance, Inc. (“WhiteHorse Finance” or the “Company”) (Nasdaq: WHF) today announced its financial results for the quarter ended March 31, 2021. Additionally, the Company announced that its board of directors has declared a distribution of $0.355 per share with respect to the quarter ending June 30, 2021. The distribution will be payable on July 2, 2021 to stockholders of record as of June 18, 2021.
First Quarter 2021 Summary Highlights
| • | Net<br>Asset Value of $314.3 million, or $15.27 per share |
|---|---|
| • | Investment<br>portfolio^(1)^ totaling $617.0 million |
| --- | --- |
| • | STRS<br>JV investment portfolio totaling $185.7 million |
| --- | --- |
| • | Gross<br>investment deployments^(2)^ of $57.7 million for the first quarter, including new originations<br>of $45.9 million and $11.8 million of fundings for add-ons to existing investments |
| --- | --- |
| • | Net<br>investment income of $7.6 million, or $0.370 per share |
| --- | --- |
| • | Core<br>net investment income^(3)^ of $7.7 million, or $0.375 per share |
| --- | --- |
| • | First<br>quarter distribution of $0.355 per share |
| --- | --- |
(1) Includes investments in WHF STRS Ohio Senior Loan Fund LLC (“STRS JV”), an unconsolidated joint venture, totaling $55.4 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.
Stuart Aronson, WhiteHorse Finance’s Chief Executive Officer commented, “We had a very active quarter in what is usually a seasonally slow period for transaction activities, successfully originating 5 first lien loans while having 10 complete realizations. This increased our allocation to first-lien senior secured loans to comprise 97 percent of our debt portfolio. Our leverage ratio decreased from the prior quarter-end due to the large realization volume, yet still within the preferrable range of above 1.0x. With the robust pipeline ahead in Q2, we hope to reach our target leverage again in a short amount of time with a strong portfolio under the current improving economic backdrop. We will remain prudent and stay true to our longstanding principles, which we believe drive our goal of enhancing shareholder value.”
Portfolio and Investment Activity
As of March 31, 2021, the fair value of WhiteHorse Finance’s investment portfolio was $617.0 million, compared with $690.7 million as of December 31, 2020. The portfolio at March 31, 2021 consisted of 90 positions across 62 companies with a weighted average effective yield of 9.6% on income-producing debt investments. The average debt investment size (excluding investments in STRS JV) was $7.1 million with the overall portfolio comprised of approximately 84.7% first lien secured loans, 2.4% second lien secured loans, 3.9% equity and 9.0% in investments in STRS JV. Almost all loans were substantially variable-rate investments (primarily indexed to the London Interbank Offered 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 March 31, 2021, WhiteHorse Finance made investments in five new portfolio companies totaling $45.9 million and added a total of $11.8 million to seven existing portfolio companies. Proceeds from sales and repayments totaled approximately $110.2 million for the quarter ended March 31, 2021, driven by ten full realizations including AG Kings Holdings Inc., Atlas Intermediate Holdings LLC, Oasis Legal Finance and Ribbon Communications Operating Company, Inc.
In addition to the transactions above, during the three months ended March 31, 2021, WhiteHorse Finance transferred assets comprised of four new portfolio companies totaling $28.9 million to STRS JV in exchange for a net investment in STRS JV of $4.3 million as well as cash proceeds of $24.6 million.
WHF STRS Ohio Senior Loan Fund LLC
As of March 31, 2021, STRS JV’s portfolio totaled $185.7 million, consisted of 22 portfolio companies and had a weighted average effective yield of 8.1% on its portfolio.
Results of Operations
For the three months ended March 31, 2021, the Company’s net investment income was approximately $7.6 million, compared with approximately $6.1 million for the same periods in the prior year, representing an increase of approximately 24.6%. The increase in net investment income for the year-over-year period was primarily attributable to higher accelerated accretion income recognized due to higher repayment activity and higher investment income generated from the Company’s investment in STRS JV, partially offset by higher incentive fees accrued for the quarter ended March 31, 2021. At March 31, 2021, the Company’s investment in STRS JV was generating an annualized, gross investment yield of approximately 14.8%.
For the three months ended March 31, 2021, core net investment income (as defined above) was $7.7 million, compared with $5.5 million for the same period in the prior year, representing an increase of approximately 40.0%.
For the three months ended March 31, 2021, WhiteHorse Finance reported net realized and unrealized gains on investments and foreign currency transactions of $0.6 million. This compares with a net realized and unrealized loss on investments and foreign currency transactions of $27.1 million for the three months ended March 31, 2020. The increase for the year-over-year period was primarily attributable to unrealized gains generated on markups in the portfolio as a result of overall market stability and price recovery from the COVID-19 pandemic, in addition to realized gains generated from sales in AG Kings Holdings Inc. and Vero Parent, Inc.
WhiteHorse Finance reported a net increase in net assets resulting from operations of approximately $8.2 million for the three months ended March 31, 2021, which compares with a net decrease of $21.0 million for the three months ended March 31, 2020.
WhiteHorse Finance’s net asset value was $314.3 million, or $15.27 per share, as of March 31, 2021, as compared with $312.9 million, or $15.23 per share, as of December 31, 2020.
Liquidity and Capital Resources
As of March 31, 2021, WhiteHorse Finance had cash and cash equivalents of $24.5 million, as compared with $15.9 million as of December 31, 2020, inclusive of restricted cash. As of March 31, 2021, the Company also had $70.4 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 June 30, 2021. The distribution will be payable on July 2, 2021 to stockholders of record as of June 18, 2021.
On March 2, 2021, the Company declared a distribution of $0.355 per share for the quarter ended March 31, 2021, consistent with distributions declared for the thirty-fourth consecutive quarter since the Company’s initial public offering. The distribution was paid on April 5, 2021 to stockholders of record as of March 26, 2021.
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 first quarter results at 1:00 p.m. ET on Monday, May 10, 2021. To access the teleconference, please dial 706-758-9224 (domestic and international) approximately 10 minutes before the teleconference’s scheduled start time and reference ID #4287043. 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 May 24, 2021. The teleconference replay can be accessed by dialing 404-537-3406 (domestic and international) and entering ID #4287043. 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 $44 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.
^(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 March 31, 2021 and March 31, 2020.
The following table provides a reconciliation of net investment income to core net investment income for the three months ended March 31, 2021 and March 31, 2020 (in thousands, except per share data):
| March 31, 2021 | March 31, 2020 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Amount | Per Share<br> <br>Amounts | Amount | Per Share<br> <br>Amounts | |||||||
| Net investment income | $ | 7,600 | $ | 0.370 | $ | 6,102 | $ | 0.297 | ||
| Net impact of costs associated with refinancing of indebtedness | - | - | - | - | ||||||
| Accrual for capital gains incentive fee | 114 | 0.005 | (626 | ) | (0.030 | ) | ||||
| Net impact of excise tax expense related to net realized gains and losses | - | - | - | - | ||||||
| Core net investment income | $ | 7,714 | $ | 0.375 | $ | 5,476 | $ | 0.267 |
WhiteHorse Finance, Inc.
Consolidated Statements of Assets and Liabilities
(in thousands, except share and per sharedata)
| December 31, 2020 | |||
|---|---|---|---|
| Assets | |||
| Investments, at fair value | |||
| Non-controlled/non-affiliate company investments | 546,264 | $ | 623,777 |
| Non-controlled affiliate company investments | 15,283 | 15,717 | |
| Controlled affiliate company investments | 55,440 | 51,241 | |
| Total investments, at fair value (amortized cost 629,210 and 695,429, respectively) | 616,987 | 690,735 | |
| Cash and cash equivalents | 7,701 | 8,062 | |
| Restricted cash and cash equivalents | 16,342 | 7,549 | |
| Restricted foreign currency (cost of 411 and 319, respectively) | 431 | 333 | |
| Interest and dividend receivable | 7,347 | 6,532 | |
| Amounts receivable on unsettled investment transactions | 18,619 | 4,717 | |
| Escrow receivable | 1,939 | - | |
| Receivable for common stock sold | 8 | - | |
| Prepaid expenses and other receivables | 1,132 | 1,061 | |
| Total assets | 670,506 | $ | 718,989 |
| Liabilities | |||
| Debt | 334,507 | $ | 384,880 |
| Distributions payable | 7,307 | 7,294 | |
| Management fees payable | 3,344 | 3,354 | |
| Incentive fees payable | 6,493 | 6,117 | |
| Amounts payable on unsettled investment transactions | - | 497 | |
| Interest payable | 2,249 | 1,870 | |
| Accounts payable and accrued expenses | 1,899 | 1,708 | |
| Unrealized depreciation on foreign currency forward contracts | 1 | - | |
| Advances received from unfunded credit facilities | 357 | 372 | |
| Total liabilities | 356,157 | 406,092 | |
| Commitments and contingencies | |||
| Net assets | |||
| Common stock, 20,583,835 and 20,546,032 shares issued and outstanding, par value<br> 0.001 per share, respectively, and 100,000,000 shares authorized | 21 | 21 | |
| Paid-in capital in excess of par | 300,592 | 300,002 | |
| Accumulated earnings | 13,736 | 12,874 | |
| Total net assets | 314,349 | 312,897 | |
| Total liabilities and total net assets | 670,506 | $ | 718,989 |
| Number of shares outstanding | 20,583,835 | 20,546,032 | |
| Net asset value per share | 15.27 | $ | 15.23 |
All values are in US Dollars.
WhiteHorse Finance, Inc.
Consolidated Statements of Operations
(Unaudited)
(in thousands, except share and per sharedata)
| Three months ended March 31, | ||||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Investment income | ||||||
| From non-controlled/non-affiliate company investments | ||||||
| Interest income | $ | 14,812 | $ | 13,140 | ||
| Fee income | 771 | 291 | ||||
| Dividend income | 44 | 49 | ||||
| From non-controlled affiliate company investments | ||||||
| Dividend income | 250 | 275 | ||||
| From controlled affiliate company investments | ||||||
| Interest income | 719 | 625 | ||||
| Dividend income | 1,374 | 153 | ||||
| Total investment income | 17,970 | 14,533 | ||||
| Expenses | ||||||
| Interest expense | 3,802 | 3,668 | ||||
| Base management fees | 3,344 | 3,092 | ||||
| Performance-based incentive fees | 2,042 | 441 | ||||
| Administrative service fees | 171 | 171 | ||||
| General and administrative expenses | 821 | 881 | ||||
| Total expenses | 10,180 | 8,253 | ||||
| Net investment income before excise tax | 7,790 | 6,280 | ||||
| Excise tax | 190 | 178 | ||||
| Net investment income after excise tax | 7,600 | 6,102 | ||||
| Realized and unrealized gains (losses) on investments and foreign currency transactions | ||||||
| Net realized gains (losses) | ||||||
| Non-controlled/non-affiliate company investments | 8,160 | 510 | ||||
| Non-controlled affiliate company investments | - | - | ||||
| Foreign currency transactions | 1 | (3 | ) | |||
| Foreign currency forward contracts | - | 6 | ||||
| Net realized gains (losses) | 8,161 | 513 | ||||
| Net change in unrealized appreciation (depreciation) | ||||||
| Non-controlled/non-affiliate company investments | (6,975 | ) | (22,196 | ) | ||
| Non-controlled affiliate company investments | (434 | ) | (2,001 | ) | ||
| Controlled affiliate company investments | (120 | ) | (3,953 | ) | ||
| Translation of assets and liabilities in foreign currencies | (62 | ) | 580 | |||
| Foreign currency forward contracts | (1 | ) | (1 | ) | ||
| Net change in unrealized appreciation (depreciation) | (7,592 | ) | (27,571 | ) | ||
| Net realized and unrealized losses on investments | 569 | (27,058 | ) | |||
| Net increase (decrease) in net assets resulting from operations | $ | 8,169 | $ | (20,956 | ) | |
| Per Common Share Data | ||||||
| Basic and diluted earnings (loss) per common share | $ | 0.40 | $ | (1.01 | ) | |
| Dividends and distributions declared per common share | $ | 0.36 | $ | 0.36 | ||
| Basic and diluted weighted average common shares outstanding | 20,551,565 | 20,546,032 |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
March 31, 2021
(in thousands)
| Investment Type^(1)^ | Spread<br> Above<br> Index^(2)^ | Interest<br> Rate^(3)^ | Acquisition Date^(10)^ | Maturity<br> Date | Principal/<br> Share<br> Amount | Amortized<br> Cost | Fair<br> Value^(11)^ | Fair Value<br> As A<br> Percentage<br> of Net<br> Assets | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| North America | |||||||||||||||
| Debt Investments | |||||||||||||||
| Advertising | |||||||||||||||
| SmartSign Holdings LLC | |||||||||||||||
| First Lien Secured Term Loan | L+ 7.50% | 8.50 | % | 08/21/20 | 10/11/24 | 7,724 | $ | 7,593 | $ | 7,724 | 2.46 | % | |||
| (1.00% Floor) | |||||||||||||||
| Air Freight & Logistics | |||||||||||||||
| Access USA Shipping, LLC | |||||||||||||||
| First Lien Secured Term Loan | L+ 8.00% | 9.50 | % | 02/08/19 | 02/08/24 | 5,286 | 5,241 | 5,286 | 1.68 | ||||||
| (1.50% Floor) | |||||||||||||||
| Application Software | |||||||||||||||
| Connexity, Inc. | |||||||||||||||
| First Lien Secured Term Loan | L+ 8.50% | 10.00 | % | 05/21/20 | 05/21/25 | 10,794 | 10,486 | 10,794 | 3.43 | ||||||
| (1.50% Floor) | |||||||||||||||
| Newscycle Solutions, Inc. | |||||||||||||||
| First Lien Secured Term Loan | L+ 7.00% | 8.00 | % | 06/14/19 | 12/29/22 | 3,237 | 3,205 | 3,185 | 1.01 | ||||||
| (1.00% Floor) | |||||||||||||||
| First Lien Secured Revolving Loan(7) | L+ 7.00% | 8.00 | % | 06/14/19 | 12/29/22 | 145 | 143 | 141 | 0.04 | ||||||
| (1.00% Floor) | |||||||||||||||
| TaxSlayer LLC | |||||||||||||||
| First Lien Secured Term Loan | L+ 6.50% | 7.50 | % | 12/31/20 | 12/31/26 | 6,796 | 6,666 | 6,666 | 2.12 | ||||||
| (1.00% Floor) | |||||||||||||||
| First Lien Secured Revolving Loan(7) | L+ 6.50% | 7.50 | % | 12/31/20 | 12/31/26 | - | - | - | - | ||||||
| (1.00% Floor) | |||||||||||||||
| 20,972 | 20,500 | 20,786 | 6.60 | ||||||||||||
| Automotive Retail | |||||||||||||||
| Team Car Care Holdings, LLC | |||||||||||||||
| First Lien Secured Term Loan^(12)^ | Base rate+ 7.99% | 9.01 | % | 02/26/18 | 02/23/23 | 16,007 | 15,870 | 15,650 | 4.98 | ||||||
| (1.00% Floor) |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
March 31, 2021
(in thousands)
| Building Products | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Drew Foam Companies Inc | |||||||||
| First Lien Secured Term Loan | L+ 6.50% | 7.50 | % | 12/15/20 | 11/05/25 | 7,261 | 7,124 | 7,127 | 2.27 |
| (1.00% Floor) | |||||||||
| LHS Borrower, LLC | |||||||||
| First Lien Secured Term Loan | L+ 6.75% | 7.75 | % | 09/30/20 | 09/30/25 | 9,689 | 9,493 | 9,550 | 3.04 |
| (1.00% Floor) | |||||||||
| First Lien Secured Revolving Loan^(7)^ | L+ 6.75% | 7.75 | % | 09/30/20 | 09/30/25 | 131 | 128 | 131 | 0.04 |
| (1.00% Floor) | 17,081 | 16,745 | 16,808 | 5.35 | |||||
| Cable & Satellite | |||||||||
| Bulk Midco, LLC | |||||||||
| First Lien Secured Term Loan^(15)^ | L+ 7.34% | 8.34 | % | 06/08/18 | 06/08/23 | 15,000 | 14,902 | 14,250 | 4.53 |
| (1.00% Floor) | |||||||||
| Construction & Engineering | |||||||||
| SFP Holding, Inc. | |||||||||
| First Lien Secured Delayed Draw Loan^(7)^ | L+ 6.25% | 7.25 | % | 01/25/21 | 01/24/25 | 1,054 | 1,039 | 1,050 | 0.33 |
| (1.00% Floor) | |||||||||
| First Lien Secured Revolving Loan^(7)^ | L+ 6.25% | 7.25 | % | 02/22/21 | 09/01/23 | - | - | 1 | - |
| (1.00% Floor) | |||||||||
| Tensar Corp. | |||||||||
| First Lien Secured Term Loan | L+ 6.75% | 7.75 | % | 11/20/20 | 08/20/25 | 6,983 | 6,821 | 6,918 | 2.20 |
| (1.00% Floor) | |||||||||
| 8,037 | 7,860 | 7,969 | 2.53 | ||||||
| Construction Materials | |||||||||
| Claridge Products and Equipment, LLC | |||||||||
| First Lien Secured Term Loan | L+ 6.50% | 7.50 | % | 12/30/20 | 12/29/25 | 7,980 | 7,828 | 7,828 | 2.49 |
| (1.00% Floor) | |||||||||
| First Lien Secured Revolving Loan^(7)^ | L+ 6.50% | 7.50 | % | 12/30/20 | 12/29/25 | - | - | - | - |
| (1.00% Floor) | 7,980 | 7,828 | 7,828 | 2.49 | |||||
| Consumer Finance | |||||||||
| Maxitransfers Blocker Corp | |||||||||
| First Lien Secured Term Loan | L+ 9.00% | 10.00 | % | 10/07/20 | 10/07/25 | 8,813 | 8,624 | 8,725 | 2.78 |
| (1.00% Floor) |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
March 31, 2021
(in thousands)
| First Lien Secured Revolving Loan^(4)(7)^ | L+ 9.00% | 10.00 | % | 10/07/20 | 10/07/25 | - | - | 12 | - | |
|---|---|---|---|---|---|---|---|---|---|---|
| (1.00% Floor) | 8,813 | 8,624 | 8,737 | 2.78 | ||||||
| Data Processing & Outsourced Services | ||||||||||
| Escalon Services Inc | ||||||||||
| First Lien Secured Term Loan | L+13.50% | 14.50 | % | 12/04/20 | 12/04/25 | 8,014 | 7,346 | 7,379 | 2.35 | |
| (1.00% Floor) | (1.50 | %PIK) | ||||||||
| FPT Operating Company, LLC/ | ||||||||||
| TLabs Operating Company, LLC | ||||||||||
| First Lien Secured Term Loan | L+ 8.25% | 9.25 | % | 12/23/16 | 06/07/24 | 24,467 | 24,238 | 24,224 | 7.71 | |
| (1.00% Floor) | ||||||||||
| Geo Logic Systems Ltd. ^(5)^ | ||||||||||
| First Lien Secured Term Loan^(13)^ | C +6.50% | 7.50 | % | 12/19/19 | 12/19/24 | 6,666 | 5,009 | 5,198 | 1.65 | |
| (1.00% Floor) | ||||||||||
| First Lien Secured Revolving Loan ^(7)(13)^ | C +6.50% | 7.50 | % | 12/19/19 | 12/19/24 | - | - | (2 | ) | - |
| (1.00% Floor) | 39,147 | 36,593 | 36,799 | 11.71 | ||||||
| Department Stores | ||||||||||
| Mills Fleet Farm Group, LLC | ||||||||||
| First Lien Secured Term Loan | L+ 6.00% | 7.00 | % | 10/24/18 | 10/24/24 | 13,543 | 13,303 | 13,408 | 4.27 | |
| (1.00% Floor) | ||||||||||
| Distributors | ||||||||||
| Crown Brands, LLC | ||||||||||
| Second Lien Secured Term Loan^(19)^ | L+ 10.50% | 12.00 | % | 12/15/20 | 01/08/26 | 4,453 | 4,353 | 3,562 | 1.13 | |
| (1.50% Floor) | ||||||||||
| Second Lien Secured Delayed Draw Loan^(19)^ | L+ 10.50% | 12.00 | % | 12/15/20 | 01/08/26 | 661 | 660 | 528 | 0.17 | |
| (1.50% Floor) | 5,114 | 5,013 | 4,090 | 1.30 |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
March 31, 2021
(in thousands)
| Diversified Chemicals | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sklar Holdings, Inc. | ||||||||||||
| First Lien Secured Term Loan | L+ 7.75% | 8.75 | % | 11/13/19 | 05/13/23 | 7,473 | $ | 7,346 | $ | 7,473 | 2.38 | % |
| (1.00% Floor) | ||||||||||||
| Diversified Support Services | ||||||||||||
| NNA Services, LLC | ||||||||||||
| First Lien Secured Term Loan | L+ 7.00% | 8.50 | % | 10/16/18 | 10/16/23 | 13,263 | 13,105 | 13,263 | 4.22 | |||
| (1.50% Floor) | ||||||||||||
| Education Services | ||||||||||||
| EducationDynamics, LLC | ||||||||||||
| First Lien Secured Term Loan | L+ 7.75% | 8.75 | % | 11/26/19 | 11/26/24 | 12,796 | 12,602 | 12,789 | 4.07 | |||
| (1.00% Floor) | ||||||||||||
| Health Care Facilities | ||||||||||||
| Epiphany Dermatology | ||||||||||||
| First Lien Secured Term Loan | L+ 7.50% | 8.50 | % | 12/04/20 | 06/22/23 | 3,491 | 3,415 | 3,456 | 1.10 | |||
| (1.00% Floor) | ||||||||||||
| First Lien Secured Revolving Loan ^(7)^ | L+ 7.50% | 8.50 | % | 12/04/20 | 06/22/23 | - | - | 5 | - | |||
| (1.00% Floor) | ||||||||||||
| First Lien Secured Delayed Draw Loan ^(7)^ | L+ 7.50% | 8.50 | % | 12/04/20 | 06/22/23 | - | - | 36 | 0.01 | |||
| (1.00% Floor) | ||||||||||||
| Grupo HIMA San Pablo, Inc. | ||||||||||||
| First Lien Secured Term Loan A ^(8)^ | L+ 9.00% | 9.22 | % | 05/15/19 | 04/30/19 | 3,855 | 3,855 | 2,147 | 0.68 | |||
| First Lien Secured Term Loan B^(8)^ | L+ 9.00% | 10.50 | % | 02/01/13 | 04/30/19 | 13,511 | 13,511 | 7,526 | 2.39 | |||
| (1.50% Floor) |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
March 31, 2021
(in thousands)
| Second Lien Secured Term Loan^(8)^ | N/A | 15.75 | % | 02/01/13 | 07/31/18 | 1,028 | 1,024 | - | - | |
|---|---|---|---|---|---|---|---|---|---|---|
| (2.00 | %PIK) | 21,885 | 21,805 | 13,170 | 4.18 | |||||
| Health Care Services | ||||||||||
| CHS Therapy, LLC | ||||||||||
| First Lien Secured Term Loan A | L+ 8.50% | 10.00 | % | 06/14/19 | 06/14/24 | 7,374 | 7,284 | 7,374 | 2.35 | |
| (1.50% Floor) | ||||||||||
| First Lien Secured Term Loan C | L+ 8.50% | 10.00 | % | 10/07/20 | 06/14/24 | 906 | 891 | 906 | 0.29 | |
| (1.50% Floor) | ||||||||||
| DCA Investment Holding, LLC | ||||||||||
| First Lien Secured Term Loan | L+ 6.25% | 7.00 | % | 03/11/21 | 03/12/27 | 7,060 | 6,955 | 6,955 | 2.21 | |
| (0.75% Floor) | ||||||||||
| First Lien Secured Delayed Draw Loan^(7)^ | L+ 6.25% | L+ 7.00 | % | 03/11/21 | 03/12/27 | - | - | (13 | ) | - |
| (0.75% Floor) | ||||||||||
| Ivy Rehab Holdings LLC | ||||||||||
| First Lien Secured Term Loan | L+ 6.75% | 7.75 | % | 12/04/20 | 12/04/24 | 8,833 | 8,671 | 8,768 | 2.79 | |
| (1.00% Floor) | ||||||||||
| First Lien Secured Revolving Loan ^(7)^ | L+ 6.75% | 7.75 | % | 12/04/20 | 12/04/24 | - | - | 6 | - | |
| (1.00% Floor) | ||||||||||
| First Lien Secured Delayed Draw Loan ^(7)^ | L+ 6.75% | 7.75 | % | 12/04/20 | 12/04/24 | 155 | 152 | 170 | 0.05 | |
| (1.00% Floor) | ||||||||||
| Lab Logistics, LLC | ||||||||||
| First Lien Secured Term Loan | L+ 7.25% | 8.25 | % | 10/16/19 | 11/19/25 | 1,164 | 1,141 | 1,151 | 0.37 | |
| (1.00% Floor) | ||||||||||
| First Lien Secured Delayed Draw Loan | L+ 7.25% | 8.25 | % | 10/16/19 | 09/25/23 | 5,223 | 5,198 | 5,223 | 1.66 | |
| (1.00% Floor) | ||||||||||
| PG Dental New Jersey Parent, LLC | ||||||||||
| First Lien Secured Term Loan | L+ 7.75% | 8.75 | % | 11/25/20 | 11/25/25 | 16,130 | 15,792 | 15,830 | 5.04 | |
| (1.00% Floor) |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
March 31, 2021
(in thousands)
| First Lien Secured Revolving Loan ^(7)^ | L+ 7.75% | 8.75 | % | 11/25/20 | 11/25/25 | - | - | 3 | - |
|---|---|---|---|---|---|---|---|---|---|
| (1.00% Floor) | 46,845 | 46,084 | 46,373 | 14.76 | |||||
| Home Furnishings | |||||||||
| Sure Fit Home Products, LLC | |||||||||
| First Lien Secured Term Loan^(8)^ | L+ 9.75% | 10.75 | % | 10/26/18 | 07/13/22 | 5,243 | 5,111 | 4,672 | 1.49 |
| (1.00% Floor) | |||||||||
| Interactive Media & Services | |||||||||
| What If Media Group, LLC | |||||||||
| First Lien Secured Term Loan | L+ 7.00% | 8.00 | % | 10/02/19 | 10/02/24 | 17,561 | 17,285 | 17,461 | 5.55 |
| (1.00% Floor) | |||||||||
| Internet & Direct Marketing Retail | |||||||||
| BBQ Buyer, LLC | |||||||||
| First Lien Secured Term Loan | L+ 8.00% | 9.50 | % | 08/28/20 | 08/28/25 | 12,698 | 12,412 | 12,753 | 4.06 |
| (1.50% Floor) | |||||||||
| Clarus Commerce, LLC | |||||||||
| First Lien Secured Term Loan | L+ 6.50% | 7.50 | % | 03/05/21 | 07/01/25 | 1,917 | 1,879 | 1,879 | 0.60 |
| (1.00% Floor) | |||||||||
| Luxury Brand Holdings, Inc. | |||||||||
| First Lien Secured Term Loan | L+ 7.00% | 8.00 | % | 12/04/20 | 06/04/26 | 5,985 | 5,872 | 5,926 | 1.89 |
| (1.00% Floor) | |||||||||
| Potpourri Group, Inc. | |||||||||
| First Lien Secured Term Loan | L+ 8.25% | 9.75 | % | 07/03/19 | 07/03/24 | 18,270 | 18,003 | 18,271 | 5.81 |
| (1.50% Floor) | 38,870 | 38,166 | 38,829 | 12.36 | |||||
| Investment Banking & Brokerage | |||||||||
| JVMC Holdings Corp. (f/k/a RJO Holdings Corp) | |||||||||
| First Lien Secured Term Loan | L+ 7.75% | 8.75 | % | 02/28/19 | 02/28/24 | 13,381 | 13,303 | 13,381 | 4.26 |
| (1.00% Floor) |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
March 31, 2021
(in thousands)
| IT Consulting & Other Services | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| AST-Applications Software Technology LLC | ||||||||||
| First Lien Secured Term Loan | L+ 8.00% | 9.00 | % | 01/10/17 | 01/10/23 | 4,004 | 3,977 | 4,004 | 1.27 | |
| (1.00% Floor) | (1.00 | %PIK) | ||||||||
| Core BTS, Inc. | ||||||||||
| First Lien Secured Term Loan | L+ 6.75% | 8.25 | % | 02/01/21 | 08/30/25 | 3,333 | 3,269 | 3,269 | 1.04 | |
| (1.50% Floor) | ||||||||||
| First Lien Secured Delayed Draw Loan ^(7)^ | L+ 6.75% | 8.25 | % | 02/01/21 | 08/30/25 | - | - | (16 | ) | - |
| (1.50% Floor) | 7,337 | 7,246 | 7,257 | 2.31 | ||||||
| Leisure Facilities | ||||||||||
| Honors Holdings, LLC | ||||||||||
| First Lien Secured Term Loan ^(16)^ | L+ 8.48% | 9.48 | % | 09/06/19 | 09/06/24 | 9,651 | 9,502 | 8,878 | 2.82 | |
| (1.00% Floor) | (1.00 | %PIK) | ||||||||
| First Lien Secured Delayed Draw Loan^(16)^ | L+ 8.11% | 9.11 | % | 09/06/19 | 09/06/24 | 4,750 | 4,704 | 4,370 | 1.39 | |
| (1.00% Floor) | (1.00 | %PIK) | ||||||||
| Lift Brands, Inc. (aka Snap Fitness Holdings, Inc.) | ||||||||||
| First Lien Secured Term Loan A | L+ 7.50% | 8.50 | % | 06/29/20 | 06/29/25 | 5,659 | 5,585 | 5,572 | 1.77 | |
| (1.00% Floor) | ||||||||||
| First Lien Secured Term Loan B | N/A | 9.50 | % | 06/29/20 | 06/29/25 | 1,191 | 1,167 | 1,160 | 0.37 | |
| (9.50 | %PIK) | |||||||||
| First Lien Secured Term Loan C ^(9)^ | N/A | 9.50 | % | 06/29/20 | NA | 1,268 | 1,265 | 1,264 | 0.40 | |
| (9.50 | %PIK) | 22,519 | 22,223 | 21,244 | 6.75 |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
March 31, 2021
(in thousands)
| Office Services & Supplies | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Empire Office, Inc. | ||||||||||||
| First Lien Secured Term Loan | L+ 6.75% | 8.25 | % | 04/12/19 | 04/12/24 | 10,577 | $ | 10,449 | $ | 10,341 | 3.29 | % |
| (1.50% Floor) | ||||||||||||
| Packaged Foods & Meats | ||||||||||||
| Lenny & Larry's, LLC | ||||||||||||
| First Lien Secured Term Loan^(17)^ | L+ 8.41% | 9.41 | % | 05/15/18 | 05/15/23 | 10,997 | 10,907 | 10,513 | 3.34 | |||
| (1.00% Floor) | (1.72 | %PIK) | ||||||||||
| Personal Products | ||||||||||||
| Inspired Beauty Brands, Inc. | ||||||||||||
| First Lien Secured Term Loan | L+ 7.00% | 8.00 | % | 12/30/20 | 12/31/25 | 12,547 | 12,308 | 12,308 | 3.92 | |||
| (1.00% Floor) | ||||||||||||
| First Lien Secured Revolving Loan ^(7)^ | L+ 7.00% | 8.00 | % | 12/30/20 | 12/31/25 | - | - | - | - | |||
| (1.00% Floor) | 12,547 | 12,308 | 12,308 | 3.92 | ||||||||
| Property & Casualty Insurance | ||||||||||||
| Policy Services Company, LLC ^(5)^ | ||||||||||||
| First Lien Secured Term Loan | L+ 6.00% | 7.00 | % | 03/06/20 | 05/31/24 | 6,224 | 5,990 | 6,100 | 1.94 | |||
| (1.00% Floor) | ||||||||||||
| Research & Consulting Services | ||||||||||||
| Comniscient Technologies LLC | ||||||||||||
| First Lien Secured Term Loan | L+ 7.50% | 8.50 | % | 10/13/20 | 10/13/25 | 6,945 | 6,819 | 6,945 | 2.21 | |||
| (1.00% Floor) | ||||||||||||
| First Lien Secured Revolving Loan ^(7)^ | L+ 7.50% | 8.50 | % | 10/13/20 | 10/13/25 | - | - | 7 | - | |||
| (1.00% Floor) | ||||||||||||
| Nelson Worldwide, LLC | ||||||||||||
| First Lien Secured Term Loan | L+ 9.25% | 10.25 | % | 01/09/18 | 01/09/23 | 10,972 | 10,875 | 10,862 | 3.46 | |||
| (1.00% Floor) |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
March 31, 2021
(in thousands)
| ALM Media, LLC | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| First Lien Secured Term Loan | L+ 7.00% | 8.00 | % | 11/25/19 | 11/25/24 | 14,766 | 14,550 | 14,323 | 4.56 |
| (1.00% Floor) | 32,683 | 32,244 | 32,137 | 10.23 | |||||
| Restaurants | |||||||||
| LS GFG Holdings Inc. | |||||||||
| First Lien Secured Term Loan | L+ 8.00% | 9.00 | % | 11/30/18 | 11/19/25 | 10,879 | 10,147 | 10,227 | 3.25 |
| (1.00% Floor) | (2.00 | %PIK) | |||||||
| Specialized Consumer Services | |||||||||
| True Blue Car Wash, LLC | |||||||||
| First Lien Secured Term Loan | L+ 7.12% | 8.12 | % | 10/17/19 | 10/17/24 | 4,321 | 4,259 | 4,321 | 1.37 |
| (1.00% Floor) | |||||||||
| First Lien Secured Delayed Draw Loan^(7)^ | L+ 7.12% | 8.12 | % | 10/17/19 | 10/17/24 | 2,002 | 1,985 | 2,017 | 0.64 |
| (1.00% Floor) | 6,323 | 6,244 | 6,338 | 2.01 | |||||
| Specialized Finance | |||||||||
| Golden Pear Funding Assetco, LLC^(5)^ | |||||||||
| Second Lien Secured Term Loan | L+ 10.50% | 11.50 | % | 09/20/18 | 03/20/24 | 10,938 | 10,819 | 10,938 | 3.48 |
| (1.00% Floor) | |||||||||
| WHF STRS Ohio Senior Loan Fund LLC | |||||||||
| Subordinated Note^(4)(5)(7)(9)(14)^ | L+ 6.50% | 6.61 | % | 07/19/19 | N/A | 44,529 | 44,529 | 44,529 | 14.17 |
| 55,467 | 55,348 | 55,467 | 17.65 | ||||||
| Specialty Chemicals | |||||||||
| Flexitallic Group SAS | |||||||||
| First Lien Secured Term Loan | L+ 6.50% | 7.50 | % | 10/28/19 | 10/29/26 | 11,603 | 11,370 | 10,802 | 3.44 |
| (1.00% Floor) | |||||||||
| Systems Software | |||||||||
| Arcstor Midco, LLC | |||||||||
| First Lien Secured Term Loan | L+ 7.00% | 8.00 | % | 03/16/21 | 03/16/27 | 19,500 | 19,113 | 19,112 | 6.08 |
| (1.00% Floor) | |||||||||
| IDIG Parent LLC | |||||||||
| First Lien Secured Term Loan | L+ 6.50% | 7.50 | % | 02/17/21 | 12/15/26 | 8,547 | 8,466 | 8,466 | 2.69 |
| (1.00% Floor) | |||||||||
| First Lien Secured Delayed Draw Loan^(7)^ | L+ 6.50% | 7.50 | % | 02/17/21 | 12/15/26 | - | - | - | - |
| (1.00% Floor) |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
March 31, 2021
(in thousands)
| First Lien Secured Revolving Loan ^(7)^ | L+ 6.50% | 7.50 | % | 02/17/21 | 12/15/26 | - | - | - | - |
|---|---|---|---|---|---|---|---|---|---|
| (1.00% Floor) | 28,047 | 27,579 | 27,578 | 8.77 | |||||
| Technology Hardware, Storage & Peripherals | |||||||||
| Source Code Midco, LLC | |||||||||
| First Lien Secured Term Loan | L+ 8.25% | 9.25 | % | 05/04/18 | 05/04/23 | 22,010 | 21,745 | 22,010 | 7.00 |
| (1.00% Floor) | |||||||||
| Telestream Holdings Corporation | |||||||||
| First Lien Secured Term Loan | L+ 8.75% | 9.75 | % | 10/15/20 | 10/15/25 | 15,193 | 14,751 | 14,903 | 4.74 |
| (1.00% Floor) | |||||||||
| First Lien Secured Revolving Loan ^(7)^ | L+ 8.75% | 9.75 | % | 10/15/20 | 10/15/25 | - | - | 14 | - |
| (1.00% Floor) | 37,203 | 36,496 | 36,927 | 11.74 | |||||
| Trading Companies & Distributors | |||||||||
| LINC Systems, LLC | |||||||||
| First Lien Secured Term Loan | L+ 6.50% | 7.50 | % | 02/24/21 | 02/24/26 | 8,355 | 8,191 | 8,191 | 2.61 |
| (1.00% Floor) | |||||||||
| First Lien Secured Revolving Loan ^(7)^ | L+ 6.50% | 7.50 | % | 02/24/21 | 02/24/26 | - | - | - | - |
| (1.00% Floor) | 8,355 | 8,191 | 8,191 | 2.61 | |||||
| Total Debt Investments | 602,782 | 591,621 | 582,176 | 185.20 | |||||
| Equity Investments | |||||||||
| Data Processing & Outsourced Services | |||||||||
| Escalon Services Inc Warrants^(4)^ | N/A | N/A | 12/04/20 | N/A | 709 | 476 | 475 | 0.15 | |
| Diversified Support Services | |||||||||
| Quest Events, LLC Preferred Units^(4)^ | N/A | N/A | 12/28/18 | 12/08/25 | 317 | 317 | - | - | |
| ImageOne Industries, LLC Common A Units^(4)^ | N/A | N/A | 09/20/19 | N/A | 225 | - | 164 | 0.05 | |
| 317 | 164 | 0.05 | |||||||
| Health Care Services | |||||||||
| Lab Logistics Preferred Units ^(4)^ | N/A | N/A | 10/29/19 | N/A | 2 | 857 | 857 | 0.27 |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
March 31, 2021
(in thousands)
| Internet & Direct Marketing Retail | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| BBQ Buyer, LLC Shares^(4)^ | N/A | N/A | 08/28/20 | N/A | 1,100 | 1,100 | 2,200 | 0.70 | |||
| Ross-Simons Topco, LP Preferred Units^(4)^ | N/A | N/A | 12/04/20 | N/A | 600 | 600 | 600 | 0.19 | |||
| 1,700 | 2,800 | 0.89 | |||||||||
| Investment Banking & Brokerage | |||||||||||
| Arcole Holding Corp.<br> Shares ^(4)(5)(6)(18)^ | N/A | N/A | 10/01/20 | N/A | - | 6,944 | 5,713 | 1.82 | |||
| IT Consulting & Other Services | |||||||||||
| Keras Holdings, LLC Shares^(4)^ | N/A | N/A | 12/31/20 | N/A | 496 | 496 | 496 | 0.16 | |||
| Leisure Facilities | |||||||||||
| Lift Brands, Inc. (aka Snap Fitness Holdings, Inc.) Class A Common Stock^(4)^ | N/A | N/A | 06/29/20 | N/A | 2 | 1,955 | 237 | 0.08 | |||
| Lift Brands, Inc. (aka Snap Fitness Holdings, Inc.) Warrants^(4)^ | N/A | N/A | 06/29/20 | 06/28/28 | 1 | 793 | 96 | 0.03 | |||
| 2,748 | 333 | 0.11 | |||||||||
| Other Diversified Financial Services | |||||||||||
| SFS Global Holding Company Warrants^(4)^ | N/A | N/A | 06/28/18 | 12/28/25 | - | - | - | - | |||
| Sigue Corporation Warrants^(4)^ | N/A | N/A | 06/28/18 | 12/28/25 | 22 | 2,890 | 3,492 | 1.11 | |||
| 2,890 | 3,492 | 1.11 | |||||||||
| Specialized Finance | |||||||||||
| NMFC Senior Loan Program I LLC Units ^(4)(5)(6)^ | N/A | N/A | 06/10/14 | 08/31/22 | 10,000 | 10,029 | 9,570 | 3.04 | |||
| WHF STRS Ohio Senior Loan Fund LLC Interests ^(4)(5)(7)(14)^ | N/A | N/A | 07/19/19 | N/A | 11,132 | 11,132 | 10,911 | 3.47 | |||
| 21,161 | 20,481 | 6.51 | |||||||||
| Total Equity Investments | 37,589 | 34,811 | 11.07 | ||||||||
| Total Investments | $ | 629,210 | $ | 616,987 | 196.27 | % |
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
March 31, 2021
(in thousands)
Forward Currency Contracts
| Currency to be | Currency to be | Unrealized | Unrealized | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Counterparty | sold | purchased | Settlement date | appreciation () | depreciation () | |||||
| Morgan Stanley | C$ | 105 | CAD | $ | 83 | USD | 04/28/2021 | ) | ||
| ) |
All values are in US Dollars.
| (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 Canadian Dollar Offered Rate (“CDOR” or “C”) or the U.S. Prime Rate as published by the Wall Street Journal (“Prime” or “P”). The one, three and six-month LIBOR were 0.1%, 0.2% and 0.2%, respectively, as of March 31, 2021. The Prime was 3.25% as of March 31, 2021. The CDOR was 0.4% as of March 31, 2021. |
| --- | --- |
| (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 86% 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 March 31, 2021. |
| --- | --- |
| (8) | The investment is on non-accrual status. |
| --- | --- |
| (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 196% of the Company’s net assets or 92% 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 Spread Above Index and Interest Rate presented represent the weighted average of both contracts. |
| --- | --- |
| (13) | Principal amount is denominated in Canadian dollars. |
| --- | --- |
| (14) | Investment is a controlled affiliate investment as defined by the<br> 1940 Act. On January 14, 2019, the Company entered into an agreement with State Teachers Retirement System of Ohio, a public pension<br> fund established under Ohio law (“STRS Ohio”), to create STRS JV, a joint venture, which invests primarily in senior<br> 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 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 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 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. |
| --- | --- |
Contacts
Stuart Aronson
WhiteHorse Finance, Inc.
212-506-0500
saronson@higwhitehorse.com
or
Joyson Thomas
WhiteHorse Finance, Inc.
305-379-2322
jthomas@higwhitehorse.com
or
Sean Silva
Prosek Partners
646-818-9122
ssilva@prosek.com
Source: WhiteHorse Finance, Inc.
Exhibit 99.2
Earnings Presentation Quarter Ended March 31, 2021 WhiteHorse Finance, Inc. NASDAQ: WHF (Common Stock) NASDAQ: WHFBZ (6.50% Notes due 2025)
1 References in this presentation to “WHF”, “we”, “us”, “our” and “the Company” refer to WhiteHorse Finance, Inc. This presentation and the information and views included herein do not constitute investment advice, or a recommendation or a n o ffer to enter into any transaction with the Company or any of its affiliates. Investors are advised to consider carefully the Company’s investment objectives, r isk s, charges and expenses before investing in the Company’s securities. Our annual reports on Form 10 - K, quarterly reports on Form 10 - Q and current reports on Fo rm 8 - K, which have been filed with the Securities and Exchange Commission (“SEC”), contain this and other information about the Company and should be read car efully before investing in the Company’s securities. The information in this presentation is not complete and may be changed. This presentation is not an of fer to sell the Company’s securities and is not soliciting an offer to buy the Company’s securities in any jurisdiction where such offer or sale is not permitted. A shelf registration statement relating to the Company’s securities is on file with the SEC. A public offering of the Company ’s securities may be made only by means of a prospectus and a related prospectus supplement, copies of which may be obtained by writing the Company at 1450 Bri cke ll Avenue, 31st Floor, Miami, FL 33131, Attention: Investor Relations, or by calling (305) 381 - 6999; copies may also be obtained by visiting EDGAR on the SEC’ s website at http://www.sec.gov . Forward Looking Statements Some of the statements in this presentation constitute forward - looking statements, which relate to future events or the Company’ s future performance or financial condition. The forward - looking statements contained in this presentation involve risks and uncertainties, including statements as to: the Company’s future operating results; changes in political, economic or industry conditions, the interest rate environment or conditions affecti ng the financial and capital markets, which could result in changes to the value of the Company’s assets; the impact of the COVID - 19 pandemic and its effects on the C ompany’s and its portfolio companies’ results of operations and financial condition; the Company’s business prospects and the prospects of its prospecti ve portfolio companies; the impact of investments that the Company expects to make; the impact of increased competition; the Company’s contractual arrangements and relationships with third parties; the dependence of the Company’s future success on the general economy and its impact on the industries in which the Com pany invests; the ability of the Company’s prospective portfolio companies to achieve their objectives; the relative and absolute performance of the Company’s in vestment adviser; the Company’s expected financings and investments; the adequacy of the Company’s cash resources and working capital; the timing o f c ash flows, if any, from the operations of the Company’s prospective portfolio companies; and the impact of future acquisitions and divestitures. Such forward - looking statements may include statements preceded by, followed by or that otherwise include the words “may,” “migh t,” “will,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “potential,” “plan” or similar words. The Company has based the forward - looking statements included in this presentation on information available to us on the date of this presentation, and the Company assumes no obligation to update any such forward - looking statements. Actual results could differ materially from those implied or expressed in the Company’s forward - looking statements for any reason, and future results could differ materially from historical performance. Al though the Company undertakes no obligation to revise or update any forward - looking statements, whether as a result of new information, future events or other wise, you are advised to consult any additional disclosures that are made directly to you or through reports that the Company in the future may file with the SEC , including annual reports on Form 10 - K, quarterly reports on Form 10 - Q and current reports on Form 8 - K. For a further discussion of factors that could cause the Company’s future results to differ materially from any forward - looking statements, see the section entitled “Risk Factors” in the annual reports on Form 10 - K and q uarterly reports on Form 10 - Q we file with the SEC. Important Information and Forward Looking Statements
2 WhiteHorse Finance Snapshot Company: WhiteHorse Finance, Inc. (“WhiteHorse Finance” or the “Company”) : Equity Ticker: NASDAQ: WHF Market Cap: $320.3MM (1) NAV / Share: $15.27 Portfolio Fair Value: $617.0MM Current Dividend Yield: 9.1% (1)(2) ; consistent quarterly dividends of $0.355 per share since 2012 IPO (1) Based on May 7, 2021 share price of $15.56 (2) Based on LTM dividend rate, excluding special dividends, relative to closing share price. External Manager: Affiliate of H.I.G. Capital, LLC (“H.I.G. Capital” or “H.I.G.”)
Overview of WhiteHorse Finance, Inc. 3 Portfolio at Fair Value ($MM) NAV + Cumulative Dividends per share Note: As of December 31 st of each respective year presented, unless otherwise noted. (1) Based on total capital commitments managed by H.I.G. Capital and affiliates. (2) Based on fair value. Does not include investments in STRS JV. Source: Company filings ▪ WhiteHorse Finance, Inc. is a publicly listed Business Development Company (“BDC”) that completed its IPO in December 2012 ▪ WhiteHorse Finance’s investment activities are managed by H.I.G. WhiteHorse Advisers, LLC, an affiliate of H.I.G. Capital, a lea ding global alternative asset manager with more than $44Bn of capital under management (1) ▪ Principally focused on originating senior secured loans to performing lower middle market companies with individual enterpris e v alues generally between $50MM and $350MM ▪ Diversified investment portfolio totaling $617.0 MM as of March 31, 2021 ▪ Investments across 90 positions in 62 portfolio companies as of March 31, 2021 − Average Investment Size (2) : $6.4MM (Average Debt Investment Size (2) : $7.1MM) − Largest Portfolio Company Investment (2) : $24.2MM ▪ Invested $1,936MM in 160 transactions since December 2012 IPO ▪ The Company and State Teachers Retirement System of Ohio (“STRS Ohio”), a public pension fund established under Ohio law, par tne red to create WHF STRS Ohio Senior Loan Fund LLC (“STRS JV”), a joint venture formed to invest in directly originated, senior secured first and se cond lien term loans. $15.44 $16.69 $17.99 $17.70 $19.42 $25.48 $23.98 $21.19 $ 27.02 $180.5 $272.4 $403.5 $415.3 $411.7 $440.7 $469.6 $589.7 $690.7 $617.0 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 2021 $ 27.42 $15.30 $15.16 $15.04 $13.33 $13.63 $13.98 $15.35 $15.23 $15.23 $15.27 $0.11 $1.53 $2.95 $4.37 $5.79 $7.21 $8.63 $10.25 $11.79 $12.15 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 2021 Net asset value Cumulative dividends paid (including special dividends)
4 Overview of WhiteHorse Finance, Inc. (continued) Note: As of March 3 1, 2021 unless otherwise noted. (1) Reflects life - to - date since IPO, and may exclude follow - on transactions and investments in STRS JV made via asset transfers in - k ind. (2) Across 88 investments. Does not include investments in STRS JV. (3) Reflects weighted average effective yield of income - producing debt investments. Weighted average effective yield for entire port folio, including equities and investments in STRS JV, as of March 31, 2021, is 9.7%. Weighted average effective yield is computed by dividing (a) annualized interest income (including interest in com e resulting from the amortization of fees and discounts) by (b) the weighted average cost of investments. (4) Measured at origination based on WHF’s underwriting leverage. Does not include investments in STRS JV. (5) Does not include the Company’s investments in STRS JV. ▪ Generate attractive risk - adjusted return in all market conditions by originating and investing in senior secured loans to performing lower middle market companies and leveraging the knowledge of H.I.G. Capital ▪ Differentiated proprietary deal flow from over 50 dedicated deal professionals sourcing through direct coverage of financial sponsors and intermediaries ▪ Rigorous credit process focused on fundamental analysis with emphasis on downside protection and cash flow visibility ▪ 11 - person investment committee with more than 250 years of industry experience ▪ Investment strategy focused on first lien and second lien senior secured investments in lower middle market companies with a target hold size of $5MM to $25MM Summary Stats: Invested Capital since IPO: $1,936MM (1) Number of Investments Made: ~ 160 (1) Average Investment Size: ~$6.4 MM (2) All - in Yield : 9.6% (3) Net Debt / EBITDA of Current Portfolio Companies: ~4.0x (4) Secured Debt as a % of Total Debt : 100% (5) Investment Strategy
5 Summary of Quarterly Results Fiscal Quarter Highlights ▪ Total investments at fair value decreased to $617.0 million in Q1 2021 as compared to $690.7 million in Q4 2020. ▪ The Company made investments in five new portfolio companies for gross deployments of $45.9 million as well as funded add - on investments totaling $11.8 million. ▪ The Company transferred four investments to the STRS JV totaling $28.9 million and had additional sales and principal repayme nts of $110.2 million. ▪ The weighted average effective yield on income - producing investments at the end of Q1 2021 was approximately 9.6% as compared to approximately 9.9% at the end of the prior quarter. ▪ Q1 net investment income (“NII”) was $7.6 million, or $0.370 per share, which compares to Q4 NII of $6.9 million, or $0.335 p er share. ▪ Q1 Core NII (1) after adjusting for an approximate $0.1 million capital gains incentive fee accrual, was $7.7 million, or $0.375 per share, compared with the quarterly distribution of $0.355 per share. This compares with Q4 Core NII of $7.1 million, or $0.348 per s har e. ▪ Net unrealized losses on investments for Q1 2021 were $7.5 million and were primarily driven by reversals of unrealized gains up on the AG Kings Holdings, Inc. realization and fair value decreases on our investments in Grupo HIMA San Pablo, Inc. and Arcole Holding Corporation, partially offset by unrealized gains in BBQ Buyer LLC, LS GFG Holdings Inc. and FPT Operating Company, LLC. ▪ NAV per share at the end of Q1 2021 was $15.27 per share compared to $15.23 per share reported at the end of Q4 2020. ▪ Gross leverage levels decreased during the quarter to 1.08x from 1.25x at the end of Q4 2020. Cash on - hand at the end of Q1 2021 was $24.5 million resulting in net leverage of 1.00x as compared to 1.20x at the end of Q4 2020. ▪ As of March 31, 2021, STRS JV had total assets of $185.7 million. The return to the Company on its investment in STRS JV at t he end of Q1 2021 was 14.8%. (1) Core net investment income is a non - GAAP financial measure. Refer to next slide for components and discussion of core net invest ment income. Additional information on core net investment income and a reconciliation of core net investment income to its most directly comparable GAAP financial measure, net investment income, can also be found by accessing the earnings releases posted to the Company’s website at http://www.whitehorsefinance.com.
6 Quarterly Operating Highlights Note: N umbers may not foot due to rounding. (1) Total investment income includes investment income (e.g., interest and dividends) from investments in STRS JV. (2) Net of fee waivers, if any. (3) Core net investment income is a non - GAAP financial measure. The Company believes that core net investment income provides useful information to investors and management because it reflects the Company's financial performance excluding (i) the net impact of costs associated with the refinancing of the Company's indebtedness, (ii) the acc rua l of the capital gains incentive fee attributable to realized and unrealized gains and losses, and (iii) certain excise or other income taxes (net of incentive fees). The presentation of this additional information is not me ant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. Additional information on core net investment income and a reconciliation of core net investment income to its most directly com parable GAAP financial measure, net investment income, can be found by accessing the earnings releases posted to the Company’s website at http://www.whitehorsefinance.com . Source: Company filings Unaudited Quarterly Financials Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 (USD in MM, expect per share data) Total Investment Income (1) 17.4$ 14.5$ 13.8$ 16.5$ 16.8$ 18.0$ Expenses Interest Expenses 3.7 3.7 3.2 2.8 3.5 3.8 Base Management Fees (2) 3.1 3.1 2.9 3.1 3.4 3.3 Performance-based Incentive Fees 2.2 0.4 1.3 3.8 2.0 2.0 Other Expenses 0.7 1.2 1.2 0.9 1.1 1.3 Total Expenses 9.7 8.4 8.6 10.6 10.0 10.4 Net Investment Income 7.7$ 6.1$ 5.2$ 5.9$ 6.8$ 7.6$ Net Realized and Unrealized Gain / (Loss) 1.1 (27.1) 17.6 15.7 1.3 0.6 Net Increase in Net Assets from Operations 8.8$ (21.0)$ 22.8$ 21.6$ 8.1$ 8.2$ Per Share Net Investment Income (NII) 0.37$ 0.30$ 0.26$ 0.29$ 0.34$ 0.37$ Core NII (3) 0.39$ 0.27$ 0.26$ 0.38$ 0.35$ 0.38$ Net Realized and Unrealized Gain / (Loss) 0.05$ (1.31)$ 0.85$ 0.77$ 0.06$ 0.03$ Earnings 0.42$ (1.01)$ 1.11$ 1.06$ 0.40$ 0.40$ Dividends Declared 0.355$ 0.355$ 0.355$ 0.355$ 0.355$ 0.355$ Core NII Dividend Coverage 108% 75% 72% 107% 98% 106%
7 Quarterly Balance Sheet Highlights Note: Numbers may not foot due to rounding (1) Includes Restricted Cash. (2) Calculated as Total Gross Debt Outstanding divided by Total Net Assets. (3) Net Leverage Ratio is defined as debt outstanding less cash, divided by total net assets. (4) Fundings, exits and repayments may include cash flows on revolver investments as well as non - cash transactions (e.g., PIK, equit y issuances). Unaudited Quarterly Financials Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 (USD in MM, expect per share data) Assets Investments at Fair Value 589.7$ 557.1$ 547.4$ 595.3$ 690.7$ 617.0$ Cash and Equivalents (1) 27.5 28.1 20.9 22.9 15.9 24.5 Other Assets 14.0 6.7 6.6 7.6 12.3 29.0 Total Assets 631.2$ 591.9$ 574.9$ 625.8$ 719.0$ 670.5$ Liabilities Debt (net of issuance costs) 298.9 291.1 252.7 291.9 384.9 334.5 Other Liabilities 19.3 16.1 22.0 19.3 21.2 21.7 Total Liabilities 318.3$ 307.2$ 274.7$ 311.2$ 406.1$ 356.2$ Total Net Assets 313.0$ 284.7$ 300.2$ 314.6$ 312.9$ 314.3$ Total Liabilities and Net Assets 631.2$ 591.9$ 574.9$ 625.8$ 719.0$ 670.5$ Net Asset Value per Share 15.23$ 13.86$ 14.61$ 15.31$ 15.23$ 15.27$ Leverage Ratio (2) 0.97x 1.04x 0.86x 0.94x 1.25x 1.08x Net Leverage Ratio (3) 0.88x 0.94x 0.79x 0.87x 1.20x 1.00x Gross Fundings (4) 155.4 27.6 39.3 59.3 176.5 72.4 Exits and Repayments (4) (95.8) (33.6) (67.7) (28.1) (84.4) (149.8) Net Fundings 59.6$ (6.0)$ (28.4)$ 31.2$ 92.1$ (77.4)$
Portfolio Highlights 8 Note: Not a guarantee of future performance or investment pace. (1) Does not include investments in STRS JV. (2) Calculated based on funded principal amounts of debt investments. ( 3) Weighted average effective yield is computed by dividing (a) annualized interest income (including interest income resulting fro m the amortization of fees and discounts) by (b) the weighted average cost of investments. (4) In Q1 2020, BW Gas & Convenience Holdings, LLC was changed from Sponsor to Non - Sponsor classification for all periods report ed. (5) Includes STRS JV Subordinated Note. Source: Company filings ($ in MM, except per share data) Portfolio Investment Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Total Fair Value of Investments 589.7$ 557.1$ 547.4$ 595.3$ 690.7$ 617.0$ Number of Portfolio Investments 66 65 68 73 99 90 Number of Portfolio Companies 51 52 53 54 67 62 Average Investment Size(1) 8.7$ 8.2$ 7.6$ 7.7$ 6.6$ 6.4$ Average Borrower Size(1) 11.1 10.1 9.6 10.3 9.7 9.2 Average Debt Investment Size(1) 10.0$ 9.3$ 8.8$ 8.8$ 7.3$ 7.1$ Fair Value as a Percentage of Principal(1)(2) 95.6% 92.2% 92.0% 93.5% 94.4% 96.3% Total Portfolio Effective Yield (3) Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Weighted average effective yield on income-producing debt investments(1) 10.4% 9.9% 9.6% 9.9% 9.9% 9.6% Weighted average effective yield on total portfolio 9.9% 9.1% 8.6% 9.2% 9.4% 9.7% Portfolio Composition - Floating vs. Fixed Investments (Debt Investments at Fair Value)(1) Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Percentage of fixed rate investments 0.0% 0.0% 0.4% 0.4% 0.2% 0.4% Percentage of floating rate investments 100.0% 100.0% 99.6% 99.6% 99.8% 99.6% Portfolio Composition - Sponsor vs. Non-Sponsor (Fair Value)(1)(4) Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Sponsor 53.1% 49.4% 50.7% 52.4% 58.1% 64.5% Non-Sponsor 46.9% 50.6% 49.3% 47.6% 41.9% 35.5% Total Portfolio Composition by Instrument Type (Fair Value) Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 First lien secured loans 81.0% 80.4% 82.9% 83.1% 85.2% 84.7% Second lien secured loans 10.5% 9.7% 5.5% 5.0% 4.0% 2.4% Subordinated debt 0.1% 0.0% 0.0% STRS JV 5.6% 7.6% 8.9% 8.5% 7.4% 9.0% Equity 2.8% 2.4% 2.7% 3.3% 3.4% 3.9% Investments on Non-Accrual Status (Debt Investments) Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Fair Value of Investments on Non-accrual Status 7.7$ 20.7$ 39.0$ 18.7$ 11.6$ 14.3$ Cost of Investments on Non-accrual Status 13.9$ 31.6$ 38.8$ 21.7$ 14.7$ 23.5$ % of Investments on Non-accrual Status (Based on Fair Value of Debt Investments) (5) 1.4% 3.9% 7.4% 3.3% 1.8% 2.5% % of Investments on Non-accrual Status (Based on Cost of Debt Investments)(5) 2.4% 5.5% 7.2% 3.8% 2.2% 4.0%
Portfolio Trends Historical Portfolio Trends 9 % Floating and % Fixed (Based on Fair Value) % Instrument Type (Based on Fair Value) % Sponsored / Non - Sponsored (Based on Fair Value) % Non Accruals (Based on Fair Value of Debt Investments) (1) Note: As of end of each year/quarter presented, unless otherwise noted; percentages may not add up to 100% due to rounding. Not a guarantee of future performance or investment pace. (1) Except as otherwise indicated, non - zero values <0.05%. Based on fair value of debt investments, including STRS JV Subordinated N ote. 55% 52% 60% 52% 77% 81% 85% 85% 40% 43% 33% 39% 21% 11% 4% 2% 5% 5% 7% 9% 3% 3% 3% 4% 6% 7% 9% 2014 2015 2016 2017 2018 2019 2020 Q1 2021 % First Lien Loans % Second Lien Loans % Equity STRS JV 96.1% 97.1% 99.8% 99.9% 100.0% 100.0% 99.8% 99.6% 3.9% 2.9% 0.2% 0.1% 0.2% 0.4% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 2014 2015 2016 2017 2018 2019 2020 Q1 2021 Floating Fixed 33% 28% 32% 32% 44% 53% 58% 65% 67% 72% 68% 68% 56% 47% 42% 35% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 2014 2015 2016 2017 2018 2019 2020 Q1 2021 Sponsor Non-Sponsor 4.1% 1.7% 1.4% 3.9% 7.4% 3.3% 1.8% 2.5% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 % of Investments on NonAccrual
10 Note: As of March 31, 2021, unless otherwise noted; percentages may not add up to 100% due to rounding. (1) Does not include investments in STRS JV. Industry classifications based on GICS. Composition by Borrower (Based on Fair Value) Composition by Industry (1) (Based on Fair Value) 100% of WHF loans are senior secured Borrower and Industry Diversity 9.0% 3.9% 3.6% 3.1% 3.0% 2.8% 2.6% 2.5% 2.4% 2.4% 64.7% STRS JV Future Payment Technologies, L.P. Source Code Midco, LLC Arcstor Midco, LLC Potpourri Group, Inc. What If Media Group, LLC PG Dental New Jersey Parent, LLC Team Car Care Holdings, LLC (Heartland Auto) BBQ Buyer, LLC Telestream Holdings Corporation Other 8.4% 7.4% 6.6% 6.6% 5.7% 4.9% 3.8% 3.7% 3.7% 3.4% 3.1% 3.0% 39.6% Health Care Services Internet & Direct Marketing Retail Data Processing & Outsourced Services Technology Hardware, Storage & Peripherals Research & Consulting Services Systems Software Leisure Facilities Application Software Specialized Finance Investment Banking & Brokerage Interactive Media & Services Building Products Other STRS JV
Effective Yield & Dividend Coverage Debt Portfolio Effective Yield and Borrower Leverage (1) From IPO to March 31, 2021 11 Core NII (2) to Dividend Coverage (3) Note: Amounts may not foot due to rounding. (1) Portfolio leverage is based on investment leverage at inception. (2) 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 realized and unrealized gains and losses, and (iii) certain excise or other income taxes (net of incentive fees). The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial r es ults prepared in accordance with GAAP. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial resul ts 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, can be found by acc essing the earnings releases posted to the Company’s website at http://www.whitehorsefinance.com (3) Does not include special dividends. (4) WHF’s dividend coverage was impacted in 3Q 2017 by the timing of deployment of the equity issuance of ~$31mm in June 2017. Source: Company filings Covered by $0.01 Missed by $0.10 Covered by $0.02 Missed by $0.07 (4) Covered by $0.07 Missed by $0.02 Missed by $0.03 Missed by $0.01 Covered by $0.04 Covered by $0.01 Covered by $ 0.03 Covered by $ 0.05 Covered by $ 0.03 Missed by $0.09 Missed by $0.01 $0.38 $0.29 $0.33 $0.42 $0.33 $0.35 $0.40 $0.37 $0.36 $0.40 $0.39 $0.27 $0.26 $0.38 $0.35 $0.38 $0.36 $0.36 $0.36 $0.36 $0.36 $0.36 $0.36 $0.36 $0.36 $0.36 $0.36 $0.36 $0.36 $0.36 $0.36 $0.36 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Core NII per share Dividends per share Covered by $ 0.02 2.8x 2.4x 4.1x 3.4x 3.4x 2.1x 4.5x 3.0x 3.8x 2.3x 3.1x 2.7x 3.0x 3.6x 2.9x 3.4x 3.2x 3.5x 3.4x 3.4x 3.2x 3.3x 3.3x 3.5x 3.6x 3.6x 3.6x 3.6x 3.7x 3.8x 3.7x 3.8x 4.0x 15.5% 14.9% 13.1% 11.8% 11.7% 11.1% 10.7% 11.3% 11.4% 11.7% 11.6% 11.8% 11.9% 11.9% 12.1% 11.8% 11.8% 11.9% 11.9% 11.9% 12.0% 12.0% 11.9% 11.9% 11.7% 11.3% 11.1% 10.4% 9.9% 9.6% 9.9% 9.9% 9.6% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Borrower Leverage through WHF Security Effective Yield
Yield & Interest Rate Economic Analysis 12 (1) Weighted average effective yield is computed by dividing (a) annualized interest income (including interest income resulting fro m the amortization of fees and discounts) by (b) the weighted average cost of investments. (2) Income yield is calculated as (a) the actual amount earned on earning investments, including interest and fee income but excl udi ng amortization of capitalized fees and discounts. (3) Calculated as (a) effective yield less (b) weighted average cost of debt. (4) The weighted average cost of debt is calculated as (a) the actual amount of expenses incurred on debt obligations divided by (b) the daily average of total debt obligations. 11.9% 11.9% 11.9% 12.0% 12.0% 11.9% 11.9% 11.7% 11.3% 11.1% 10.4% 9.9% 9.6% 9.9% 9.9% 9.6% 11.4% 11.5% 11.5% 11.5% 11.5% 11.4% 11.5% 11.4% 11.0% 10.7% 10.0% 9.5% 9.1% 9.4% 9.4% 9.1% 7.5% 7.5% 7.8% 7.2% 6.8% 7.1% 6.7% 6.0% 5.7% 5.7% 5.5% 5.2% 5.4% 6.2% 6.1% 5.7% 4.4% 4.4% 4.1% 4.7% 5.1% 4.7% 5.2% 5.7% 5.6% 5.4% 4.9% 4.7% 4.2% 3.7% 3.8% 3.8% 1.2% 1.3% 1.4% 1.7% 2.1% 2.3% 2.5% 2.7% 2.6% 2.3% 2.3% 1.7% 1.0% 0.3% 0.2% 0.2% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Effective Yield(1) Income Yield(2) Net Investment Spread(3) Weighted Average Cost of Debt(4) 3-Month London Interbank Offered Rate ("LIBOR")
Investment Performance Ratings 13 Investment Performance Ratings (% of Portfolio at Fair Value) Rating 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 2021 1 6.3% 2.3% 22.2% 21.9% 2 100.0% 92.4% 100.0% 90.3% 87.0% 83.9% 80.1% 83.3% 61.1% 62.4% 3 7.6% 7.9% 13.0% 16.1% 13.6% 13.1% 15.0% 14.1% 4 0.0% 0.0% 0.0% 0.6% 1.6% 5 1.8% 0.0% 1.3% 1.1% - 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Investment Perfomance Rating Definitions Rating Definition 1 The portfolio company's risk of loss has been reduced relative to initial expectations. 2 The portfolio company is meeting initial expectations with regard to performance and outlook. 3 The investment's risk of loss has increased relative to initial expectation. 4 Investment principal is at a material risk of not being fully repaid. 5 Investment is in payment default and has significant risk of not receiving full repayment.
Net Asset Value Trends 14 *As a supplement to GAAP financial measures, the Company has provided this non - GAAP measure. The Company believes that this non - GAAP financial measure is useful as it highlights the changes in NAV per share of common stock for each quarter excluding the impact of special dividends that were paid and sh ows the pro forma to the Company’s NAV per share after payment of regular distributions . Net Asset Value Per Share $15.43 $15.55 $15.59 15.00 15.30 15.16 15.04 13.33 13.63 13.98 15.35 15.23 15.23 15.27 $13.00 $13.50 $14.00 $14.50 $15.00 $15.50 $16.00 Net Asset Value if No Special Dividends Were Paid* Net Asset Value
NAV Per Share Bridge 15 Net Realized and Unrealized Gains : $0.03 Note: N umbers may not foot due to rounding. 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 acc rua l of the capital gains incentive fee attributable to realized and unrealized gains and losses, and (iii) certain excise or other income taxes (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 com parable GAAP financial measure, net investment income, can be found by accessing the earnings releases posted to the Company’s website at http://www.whitehorsefinance.com . So urce : Company filings Dividend Coverage: $0.02
Leverage Migration 16 12/31/2020 QtQ Change 03/31/2021 Outstanding Debt: Outstanding Debt: $390.2 ($50.6) $339.6 Driven by paydowns and sales of portfolio investments NAV: NAV: $312.9 +$1.4 $314.3 Driven by higher accelerated accretion income due to higher repayment activity Leverage Ratio: Leverage Ratio: 1.25x 1.08x Note: Numbers may not foot due to rounding. ($ in MM) Borrowings $35.1 Acquisition of Investments $72.4 Sales & Principal Payments 149.8 Debt Paydown 85.8 Net Investment Income 7.6 Dividend Payment 7.3 Sale of Common Stock 0.6 Other Balance Sheet Changes 19.0 Balance Sheet Cash 8.5 Total $193.1 Total $193.1 Sources Uses
Note: As of end of each quarter presented, unless otherwise noted. Not a guarantee of future performance or investment pace. (1) As of March 31, 2021 WHF had $5.1MM of deferred debt issuance costs. (2) Gross leverage excluding cash. 3 Current Debt Outstanding (as of March 31, 2021) ($ in MM) Commitment Outstanding (1) Weighted Average Interest Rate Maturity Additional Information Revolving Credit Facility $285.0 ($65 Accordion Feature) $214.6 L+2.50% payable quarterly 2024 2023 Private Notes $30.0 $30.0 6.00% payable semi - annually; unsecured 2023 2025 Private Notes $40.0 $40.0 5.375% payable semi - annually; unsecured 2025 2025 Public Notes $35.0 $35.0 6.50% payable quarterly; unsecured 2025 NASDAQ: WHFBZ 2026 Private Notes $10.0 $10.0 5.375% payable semi - annually; unsecured 2026 2027 Private Notes $10.0 $10.0 5.625% payable quarterly; unsecured 2027 Total Debt $410.0 $339.6 3.9% weighted average cost of debt Total Shareholders’ Equity/Net Assets $314.3 NA Funding Profile 17 Gross Debt to Equity (2) 1.0x - 1.25x Target Leverage ($ in MM) 0.65x 0.64x 0.63x 0.71x 0.62x 0.57x 0.57x 0.79x 0.75x 0.97x 1.04x 0.86x 0.94x 1.25x 1.08x 0.00x 0.50x 1.00x Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Debt/ Equity
18 Appendix
19 COVID - 19 Portfolio Exposure 1Q21 WhiteHorse Finance, Inc. STRS JV Note: Fair values are as of March 31, 2021 and may not foot due to rounding; percentages may not add up to 100% due to roundi ng. (1) Categories of High, Moderate, Low/Moderate and Low can and will change over time as more data becomes available. These catego riz ations are based on estimates and current information available as of May 6, 2021 and are subject to change without notice. (2) Within any given category, there is variation in the amount of exposure. For example, not all Lows or Moderates are the same . (3) Low/Moderate category is used for portfolio companies where impact so far has been low, but it is believed that this might ri se to moderate over time. ($ in MM) High , 8.1% Moderate , 16.6% Low/Moderate , 3.6% Low , 62.6% High , 0.7% Moderate , 0.8% Low/Moderate , 1.1% Low , 6.4% STRS JV, 9.0% WHF Fair Value % of FV Very High $ - 0.0% High 50.2 8.1% Moderate 102.7 16.6% Low/Moderate 22.3 3.6% Low 386.4 62.6% STRS JV 55.4 9.0% Total $ 617.0 100.0% STRS JV Fair Value % of FV Very High -$ 0.0% High 14.8 8.0% Moderate 16.1 8.6% Low/Moderate 22.8 12.3% Low 132.0 71.1% Total 185.7$ 100.0%
Origination Footprint ( March 31 , 2021) Regional Direct Origination Footprint ▪ Scope of H.I.G. WhiteHorse market coverage results in consistent investment activity levels regardless of market conditions ▪ Dedicated direct lending team of over 50 investment and origination professionals ▪ Regional footprint with 24 dedicated direct lending originators in 12 North American offices ▪ Global platform of approximately 435 investment professionals across 18 offices in 9 countries and 3 continents ▪ Additional 24 generalist business development professionals dedicated to sourcing proprietary opportunities in the lower to m idd le market 20
Note: As of end of each quarter presented, unless otherwise noted. Not a guarantee of future performance or investment pace. May not foot due to rounding. (1) As of March 31, 202 1 STRS JV had $ 1.9 of deferred debt issuance costs. 3 ($ in MM) Commitment Outstanding (1) Weighted Average Interest Rate Maturity Revolving Credit Facility $175.0 ($75 Accordion Feature) $101.2 L+2.55% payable quarterly 2024 Subordinated Note $100.0 $74.2 L+6.50% payable quarterly N/A Total Debt $275.0 $175.4 4.4% weighted average cost of debt Equity $25.0 $18.2 N/A N/A STRS JV Key Terms and Funding Profile 21 Key Terms ▪ WHF and STRS Ohio have c ommitted to provide up to $125 million in subordinated notes and equity to STRS JV, with STRS Ohio providing $50 million and WHF providing $75 million. ▪ WHF and STRS Ohio share voting control 50%/50% . ▪ Equity ownership 60% WHF and 40% STRS ▪ An affiliate of H.I.G. provides day - to - day administrative oversight Current Debt Outstanding (as of March 31, 2021) ($ in MM)
22 Note: As of March 31, 2021, unless otherwise noted; percentages may not add up to 100% due to rounding. (1) Industry classifications based on GICS. Composition by Borrower (Based on Fair Value) Composition by Industry (1) (Based on Fair Value) 100% of STRS JV loans are senior secured STRS JV Borrower and Industry Diversity 7.3% 7.0% 6.3% 6.2% 6.0% 5.9% 5.6% 5.3% 5.2% 5.0% 40.2% Marlin DTC-LS Midco 2, LLC (Clarus) SFP Holding, Inc. (Summit) KSM Consulting LLC Pluto Acquisition Topco, LLC Geo Logic Systems Ltd. TOUR Intermediate Holdings, LLC Quest Events, LLC FR Flow Control CB LLC LHS Borrower, LLC SmartSign Holdings LLC Other 13.6% 13.2% 9.0% 7.3% 6.3% 6.2% 6.0% 5.9% 5.6% 5.3% 5.0% 4.0% 12.6% Packaged Foods & Meats Construction & Engineering Building Products Internet & Direct Marketing Retail IT Consulting & Other Services Human Resource & Employment Services Data Processing & Outsourced Services Investment Banking & Brokerage Diversified Support Services Industrial Machinery Advertising Technology Hardware, Storage & Peripherals Other
Origination Pipeline Funnel (1) 23 Note: Percentages may not add up to 100% due to rounding. (1) Origination Pipeline figures reflect 2014 through March 31, 2021. Three tier sourcing platform, generating meaningful investable opportunities for WhiteHorse Finance Over 50 WhiteHorse deal professionals dedicated to sourcing and underwriting for WHF 24 person business development team seeks opportunities from H.I.G.’s proprietary database of over 21,000 contacts (telephonic salesforce) ▪ With access to H.I.G. Capital’s extensive sourcing network, the Company is able to capitalize on attractive self - originated lowe r middle market transactions as compared to the broadly syndicated market ▪ Directly originated loans to lower middle market companies typically generate more attractive risk - adjusted returns relative to larger, broadly syndicated credits Typical Underwriting Process: 3 - 6 months Opportunities Reviewed Initial Due Diligence Term Sheets Delivered Closed Transactions Deals being sourced by approximately 435 Investment Professionals across H.I.G.’s platform 6,810 100.0% 1,686 24.8% 433 6.4% 146 2.1% Total % of Sourced
24 Corporate Data Board of Directors Investment Committee Corporate Officers Research Coverage Corporate Counsel John Bolduc Sami Mnaymneh Stuart Aronson Sarkis Sherbetchyan Dechert LLP Chairman of the Board Founder and Co-CEO of H.I.G. Capital Chief Executive Officer B. Riley FBR New York, NY Stuart Aronson Anthony Tamer Marco Collazos Melissa Wedel Corporate Headquarters Director Founder and Co-CEO of H.I.G. Capital Chief Compliance Officer J.P. Morgan 1450 Brickell Avenue 31st Floor Jay Carvell Stuart Aronson Joyson Thomas Mickey Schleien Miami, FL 33131 Director Chief Executive Officer and Director Chief Financial Officer Ladenburg Thalmann & Co. Inc. Transfer Agent Kevin F. Burke Mark Bernier Chris Kotowski American Stock Transfer & Independent Director Managing Director of WhiteHorse Capital Oppenheimer & Co. Trust Company, LLC New York, NY Rick P. Frier John Bolduc Robert Dodd Independent Director Chairman of the Board, Executive Managing Raymond James Investor Relations Contact Director of H.I.G. Capital 1450 Brickell Avenue Rick D. Puckett 31st Floor Independent Director Jay Carvell Attention: Investor Relations Managing Director of WhiteHorse Capital Miami, FL 33131 G. Stacy Smith (305) 381-6999 Independent Director Javier Casillas Managing Director of WhiteHorse Capital Independent Registered Public Accounting Firm Pankaj Gupta Crowe LLP Global Head of Originations and Managing Director of WhiteHorse Capital New York, NY David Indelicato Securities Listing Managing Director of WhiteHorse Capital NASDAQ: WHF Brian Schwartz Please visit our website at: Co-President of H.I.G. Capital www.whitehorsefinance.com John Yeager Managing Director of WhiteHorse Capital