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

Published: Aug. 10, 2022 at 6:30 AM CDT

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


Spread
Above
Index(2)


Interest
Rate(3)


Acquisition
Date(10)


Maturity
Date


Principal/
Share
Amount


Amortized
Cost


Fair
Value(11)


Fair Value
As A
Percentage
of Net
Assets


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 Aronson
WhiteHorse Finance, Inc.
212-506-0500
saronson@higwhitehorse.com

or

Joyson Thomas
WhiteHorse Finance, Inc.
305-379-2322
jthomas@higwhitehorse.com

or

Robert Brinberg
Rose & Company
212-257-5932
whitehorse@roseandco.com

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SOURCE WhiteHorse Finance, Inc.

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