WhiteHorse Finance, Inc. Announces Third Quarter 2021 Earnings Results and Declares Quarterly Distribution of $0.355 Per Share

NEW YORK, November 9, 2021 /PRNewswire/ -- WhiteHorse Finance, Inc. ("WhiteHorse Finance" or the "Company") (Nasdaq: WHF) today announced its financial results for the quarter ended September 30, 2021. In addition, the Company's board of directors has declared a distribution of $0.355 per share with respect to the quarter ending December 31, 2021. The distribution will be payable on January 4, 2022 to stockholders of record as of December 20, 2021.

Third Quarter 2021 Summary Highlights

●Net Asset Value of $323.7 million, or $15.46 per share
●Investment portfolio(1) totaling $687.1 million
●STRS JV investment portfolio totaling $239.0 million
●Gross investment deployments(2) of $122.5 million for the third quarter, including new originations of $47.9 million and $74.6 million of fundings for refinancings and add-ons to existing investments
●Net investment income of $7.6 million, or $0.366 per share
●Core net investment income of $7.8 million, or $0.372 per share(3)
●Third quarter distribution of $0.355 per share

Recent Developments

Subsequent to the end of the quarter, the Company issued 1,900,000 shares of its common stock in a public offering at an offering price of $15.81 per share (the "Offering"). The Offering generated net proceeds of approximately $29.4 million. Under the existing underwriting agreement, the underwriters executed the option to purchase an additional 282,300 shares, generating another $4.3 million of net proceeds. The Company's aggregate net proceeds of the Offering were approximately $33.7 million, inclusive of underwriting discounts and commissions and before offering expenses.

Stuart Aronson, WhiteHorse Finance's Chief Executive Officer, commented, "Gross capital deployments remained strong in the third quarter, offset in part by continuing repayments and refinancings within the portfolio, and we maintained a high level of origination activity. In anticipation of continuing rapid capital deployment, we completed a follow-on equity offering earlier this month, netting approximately $34 million in proceeds. Our pipeline remains very healthy, and this new capital should enable us to continue to grow WhiteHorse Finance through disciplined deal sourcing. Although the lending market has become more competitive in some segments, where pricing, leverage and documentation terms have returned to pre-COVID levels, we believe that our relationship with the leading H.I.G. platform and our differentiated three-tier sourcing capabilities will continue to drive growth. Notwithstanding the competitive backdrop, we believe that we can continue to identify and close deals that meet our rigorous underwriting standards and generate strong cash flow to support our dividend and create value for our shareholders."

Portfolio and Investment Activity

As of September 30, 2021, the fair value of WhiteHorse Finance's investment portfolio was $687.1 million, compared with $670.5 million as of June 30, 2021. The portfolio as of September 30, 2021 consisted of 99 positions across 65 companies with a weighted average effective yield of 9.3% on income-producing debt investments. The average debt investment size (excluding investments in STRS JV (as defined below)) was $7.3 million with the overall portfolio comprised of approximately 82.3% first lien secured loans, 4.3% second lien secured loans, 2.9% equity and 10.5% in investments in STRS JV. Almost all loans were 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 September 30, 2021, WhiteHorse Finance made investments in four new portfolio companies totaling $47.9 million, added a total of $34.8 million to existing portfolio companies, exclusive of refinancing, and made net fundings of $0.9 million to revolver loans. Proceeds from sales and repayments, exclusive of refinancing, totaled approximately $26.1 million for the quarter ended September 30, 2021, driven by two full realizations in LS GFG Holdings Inc. and Connexity, Inc. In addition, the Company refinanced three first lien investments, NNA Services, LLC, EducationDynamics, LLC and Source Code Midco, LLC, resulting in net repayments of approximately $7.3 million. Gross receipts from refinancings were $47.1 million and gross deployments from refinancings were $39.8 million.

In addition to the transactions discussed above, during the three months ended September 30, 2021, WhiteHorse Finance transferred assets comprised of two new portfolio companies, three add-ons and the remaining portions of four previously transferred deals totaling $45.7 million to STRS JV in exchange for a net investment in STRS JV of $9.4 million as well as cash proceeds of $36.3 million.

WHF STRS Ohio Senior Loan Fund LLC

As of September 30, 2021, STRS JV's portfolio totaled $239.0 million, consisted of 27 portfolio companies and had a weighted average effective yield of 8.0% on its portfolio.

Results of Operations

For the three months ended September 30, 2021, the Company's net investment income was approximately $7.6 million, compared with approximately $5.9 million for the same period in the prior year, representing an increase of approximately 28.8%. The increase in net investment income for the year-over-year period was primarily attributable to accelerated accretion and nonrecurring fee income recognized due to higher repayment activities as well as lesser capital gains incentive fee accrued, and partially offset by higher interest expense incurred due to higher leverage balances for the quarter ended September 30, 2021. For the three months ended September 30, 2021, the Company's investment in STRS JV generated an annualized, gross investment yield of approximately 12.6%.

For the three months ended September 30, 2021, core net investment income(3) was $7.8 million, or $0.372 per share, compared with $7.8 million, or $0.380 per share, for the same period in the prior year.

For the three months ended September 30, 2021, WhiteHorse Finance reported net realized and unrealized gains on investments and foreign currency transactions of $0.6 million. This compares with net realized and unrealized gains on investments and foreign currency transactions of $15.7 million for the three months ended September 30, 2020. The decrease for the year-over-year period was primarily attributable to higher prior-year unrealized gains generated on markups in the portfolio as a result of the market's continuing recovery from the COVID-19 pandemic.

WhiteHorse Finance reported a net increase in net assets resulting from operations of approximately $8.3 million for the three months ended September 30, 2021, which compares with a net increase of $21.6 million for the three months ended September 30, 2020.

WhiteHorse Finance's net asset value was $323.7 million, or $15.46 per share, as of September 30, 2021, as compared with $319.6 million, or $15.42 per share, as of June 30, 2021.

Liquidity and Capital Resources

As of September 30, 2021, WhiteHorse Finance had cash and cash equivalents of $16.6 million, as compared with $17.8 million as of June 30, 2021, inclusive of restricted cash. As of September 30, 2021, the Company also had $25.4 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 December 31, 2021. The distribution will be payable on January 4, 2022 to stockholders of record as of December 20, 2021. In addition, previously on October 14, 2021, the Company declared a special distribution of $0.135 per share, which will be payable on December 10, 2021 to stockholders of record as of October 29, 2021.

On August 9, 2021, the Company declared a distribution of $0.355 per share for the quarter ended September 30, 2021, consistent with distributions declared for the thirty-sixth consecutive quarter since the Company's initial public offering. The distribution was paid on October 4, 2021 to stockholders of record as of September 20, 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 third quarter results at 2:00 p.m. ET on Tuesday, November 9, 2021. To access the teleconference, please dial 877-876-9177 (domestic and international) approximately 10 minutes before the teleconference's scheduled start time and reference Conference ID #WHFQ321. 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 November 16, 2021. The teleconference replay can be accessed by dialing 888-566-0150 (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 over $45 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 $72.1 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 September 30, 2021 and September 30, 2020.

The following table provides a reconciliation of net investment income to core net investment income for the three months ended September 30, 2021 and September 30, 2020 (in thousands, except per share data):

September 30, 2021

September 30, 2020

Amount

Per Share

Amount

Per Share

Amounts

Amounts

Net investment income

$

7,639

$

0.366

$

5,930

$

0.289

Net impact of costs associated with refinancing of indebtedness

-

-

-

-

Accrual for capital gains incentive fee

127

0.006

1,870

0.091

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

-

-

-

-

Core net investment income

$

7,766

$

0.372

$

7,800

$

0.380

WhiteHorse Finance, Inc.

Consolidated Statements of Assets and Liabilities

(in thousands, except share and per share data)

September 30, 2021

December 31, 2020

(Unaudited)

Assets

Investments, at fair value

Non-controlled/non-affiliate company investments

$

608,213

$

623,777

Non-controlled affiliate company investments

6,800

15,717

Controlled affiliate company investments

72,110

51,241

Total investments, at fair value (amortized cost $695,047 and $695,429, respectively)

687,123

690,735

Cash and cash equivalents

9,579

8,062

Restricted cash and cash equivalents

6,749

7,549

Restricted foreign currency (cost of $241 and $319, respectively)

241

333

Interest and dividend receivable

7,227

6,532

Amounts receivable on unsettled investment transactions

15,489

4,717

Escrow receivable

1,827

-

Prepaid expenses and other receivables

1,162

1,061

Unrealized appreciation on foreign currency forward contracts

186

-

Total assets

$

729,583

$

718,989

Liabilities

Debt

$

379,757

$

384,880

Distributions payable

7,433

7,294

Management fees payable

3,508

3,354

Incentive fees payable

7,404

6,117

Amounts payable on unsettled investment transactions

3,380

497

Interest payable

2,201

1,870

Accounts payable and accrued expenses

1,680

1,708

Advances received from unfunded credit facilities

496

372

Total liabilities

405,859

406,092

Commitments and contingencies

Net assets

Common stock, 20,936,874 and 20,546,032 shares issued and outstanding, par value $0.001 per share, respectively, and 100,000,000 shares authorized

21

21

Paid-in capital in excess of par

305,972

300,002

Accumulated earnings

17,731

12,874

Total net assets

323,724

312,897

Total liabilities and total net assets

$

729,583

$

718,989

Number of shares outstanding

20,936,874

20,546,032

Net asset value per share

$

15.46

$

15.23

WhiteHorse Finance, Inc.

Consolidated Statements of Operations (Unaudited)

(in thousands, except share and per share data)

Three months ended September 30,

Nine months ended September 30,

2021

2020

2021

2020

Investment income

From non-controlled/non-affiliate company investments

Interest income

$

15,199

$

14,222

$

44,159

$

39,506

Fee income

1,224

741

2,344

1,571

Dividend income

35

21

144

101

From non-controlled affiliate company investments

Dividend income

76

263

1,042

800

From controlled affiliate company investments

Interest income

905

682

2,362

1,913

Dividend income

939

568

3,638

961

Total investment income

18,378

16,497

53,689

44,852

Expenses

Interest expense

3,842

2,770

11,456

9,661

Base management fees

3,508

3,069

10,209

9,110

Performance-based incentive fees

2,069

3,819

6,739

5,571

Administrative service fees

171

171

512

512

General and administrative expenses

896

601

2,592

2,212

Total expenses

10,486

10,430

31,508

27,066

Net investment income before excise tax

7,892

6,067

22,181

17,786

Excise tax

253

137

845

513

Net investment income after excise tax

7,639

5,930

21,336

17,273

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

Net realized gains (losses)

Non-controlled/non-affiliate company investments

109

635

7,714

1,069

Non-controlled affiliate company investments

-

-

-

-

Foreign currency transactions

(206)

(1)

(209)

66

Foreign currency forward contracts

1

(25)

(3)

(25)

Net realized gains (losses)

(96)

609

7,502

1,110

Net change in unrealized appreciation (depreciation)

Non-controlled/non-affiliate company investments

(1,370)

12,659

(3,937)

6,303

Non-controlled affiliate company investments

792

999

1,112

(131)

Controlled affiliate company investments

860

1,526

591

(1,316)

Translation of assets and liabilities in foreign currencies

263

(92)

161

251

Foreign currency forward contracts

187

3

186

-

Net change in unrealized appreciation (depreciation)

732

15,095

(1,887)

5,107

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

636

15,704

5,615

6,217

Net increase in net assets resulting from operations

$

8,275

$

21,634

$

26,951

$

23,490

Per Common Share Data

Basic and diluted earnings per common share

$

0.40

$

1.06

$

1.30

$

1.15

Dividends and distributions declared per common share

$

0.36

$

0.36

$

1.07

$

1.07

Basic and diluted weighted average common shares outstanding

20,851,435

20,546,032

20,677,545

20,546,032

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited)

September 30, 2021

(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

Advertising

SmartSign Holdings LLC

First Lien Secured Term Loan

1.00%

L+ 7.50%

8.50%

08/21/20

10/11/24

7,686

$

7,573

$

7,686

2.37

%

7,686

7,573

7,686

2.37

Air Freight & Logistics

Access USA Shipping, LLC

First Lien Secured Term Loan

1.50%

L+ 8.00%

9.50%

02/08/19

02/08/24

5,010

4,975

5,010

1.55

Motivational Marketing, LLC

First Lien Secured Term Loan

1.00%

L+ 6.25%

7.25%

07/12/21

07/12/26

11,818

11,592

11,590

3.58

Motivational Marketing, LLC(7)(12)

First Lien Secured Revolving Loan

1.75%

L+ 5.92%

7.67%

07/12/21

07/12/26

906

889

888

0.27

17,734

17,456

17,488

5.40

Application Software

Atlas Purchaser, Inc (dba Aspect Software)

Second Lien Secured Term Loan

0.75%

L+ 9.00%

9.75%

05/03/21

05/07/29

15,000

14,572

14,700

4.54

Newscycle Solutions, Inc

First Lien Secured Term Loan

1.00%

L+ 7.00%

8.00%

06/14/19

12/29/22

3,221

3,198

3,208

0.99

Newscycle Solutions, Inc(7)

First Lien Secured Revolving Loan

1.00%

L+ 7.00%

8.00%

06/14/19

12/29/22

169

168

168

0.05

TaxSlayer LLC

First Lien Secured Term Loan

1.00%

L+ 6.00%

7.00%

12/31/20

12/31/26

6,762

6,643

6,666

2.06

TaxSlayer LLC(7)

First Lien Secured Revolving Loan

1.00%

L+ 6.00%

7.00%

12/31/20

12/31/26

-

-

3

-

25,152

24,581

24,745

7.64

Automotive Retail

Team Car Care Holdings, LLC(12)

First Lien Secured Term Loan

1.03%

Base rate+ 7.99%

9.02%

02/16/18

06/28/24

15,516

15,413

15,392

4.75

15,516

15,413

15,392

4.75

Building Products

Drew Foam Companies Inc

First Lien Secured Term Loan

1.00%

L+ 6.25%

7.25%

11/05/20

11/05/25

7,225

7,104

7,153

2.21

LHS Borrower, LLC

First Lien Secured Term Loan

1.00%

L+ 6.75%

7.75%

09/30/20

09/30/25

9,506

9,336

9,436

2.91

LHS Borrower, LLC(7)

First Lien Secured Revolving Loan

1.00%

L+ 6.75%

7.75%

09/30/20

09/30/25

-

-

6

-

Trimlite Buyer LLC(5)(13)

First Lien Secured Term Loan

1.00%

C+ 6.50%

7.50%

07/27/21

07/27/26

23,122

18,070

17,900

5.53

Trimlite Buyer LLC(5)(7)(13)

First Lien Secured Revolving Loan

1.00%

C+ 6.50%

7.50%

07/27/21

07/27/26

-

-

-

-

39,853

34,510

34,495

10.65

Cable & Satellite

Bulk Midco, LLC(15)

First Lien Secured Term Loan

1.00%

L+ 7.34%

8.34%

06/08/18

06/08/23

15,000

14,924

14,419

4.45

15,000

14,924

14,419

4.45

Construction & Engineering

Tensar Corp

First Lien Secured Term Loan

1.00%

L+ 6.75%

7.75%

11/20/20

08/20/25

6,948

6,805

6,948

2.15

6,948

6,805

6,948

2.15

Construction Materials

Claridge Products and Equipment, LLC

First Lien Secured Term Loan

1.00%

L+ 6.50%

7.50%

12/30/20

12/29/25

7,659

7,529

7,521

2.32

Claridge Products and Equipment, LLC(7)

First Lien Secured Revolving Loan

1.00%

L+ 6.50%

7.50%

12/30/20

12/29/25

-

-

-

-

7,659

7,529

7,521

2.32

Commodity Chemicals

Flexitallic Group SAS

First Lien Secured Term Loan

1.00%

L+ 7.50%

8.50% (8.00% Cash + 0.50% PIK)

10/28/19

10/29/26

15,742

15,038

15,191

4.69

15,742

15,038

15,191

4.69

Consumer Finance

Maxitransfers Blocker Corp

First Lien Secured Term Loan

1.00%

L+ 8.50%

9.50%

10/07/20

10/07/25

8,701

8,535

8,701

2.69

Maxitransfers Blocker Corp(4)(7)

First Lien Secured Revolving Loan

1.00%

L+ 8.50%

9.50%

10/07/20

10/07/25

-

-

20

0.01

8,701

8,535

8,721

2.70

Data Processing & Outsourced Services

Escalon Services Inc

First Lien Secured Term Loan

1.00%

L+ 13.50%

14.50% (13.00% Cash + 1.50% PIK)

12/04/20

12/04/25

8,035

7,442

7,932

2.45

FPT Operating Company, LLC/ TLabs Operating Company, LLC

First Lien Secured Term Loan

1.00%

L+ 8.25%

9.25%

12/23/16

06/07/24

24,156

23,953

24,028

7.42

32,191

31,395

31,960

9.87

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited)

September 30, 2021

(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

Department Stores

Mills Fleet Farm Group, LLC

First Lien Secured Term Loan

1.00%

L+ 6.25%

7.25%

10/24/18

10/24/24

13,538

$

13,320

$

13,538

4.18

%

13,538

13,320

13,538

4.18

Distributors

Crown Brands, LLC(19)

Second Lien Secured Term Loan

1.50%

L+ 10.50%

12.00%

12/15/20

01/08/26

4,380

4,293

3,504

1.08

Crown Brands, LLC(19)

Second Lien Secured Delayed Draw Loan

1.50%

L+ 10.50%

12.00%

12/15/20

01/08/26

650

650

520

0.16

5,030

4,943

4,024

1.24

Diversified Chemicals

Sklar Holdings, Inc

First Lien Secured Term Loan

1.00%

L+ 7.75%

8.75%

11/13/19

05/13/23

7,429

7,323

7,429

2.29

7,429

7,323

7,429

2.29

Diversified Support Services

NNA Services, LLC

First Lien Secured Term Loan

1.00%

L+ 6.75%

7.75%

08/27/21

08/27/26

11,667

11,524

11,522

3.56

11,667

11,524

11,522

3.56

Education Services

EducationDynamics, LLC

First Lien Secured Term Loan

1.00%

L+ 7.00%

8.00% (7.50% Cash + 0.50% PIK)

09/15/21

09/14/26

13,385

13,119

13,118

4.05

EducationDynamics, LLC(7)

First Lien Secured Delayed Draw Loan

1.00%

L+ 7.00%

8.00% (7.50% Cash + 0.50% PIK)

09/15/21

09/14/26

-

-

-

-

EducationDynamics, LLC(7)

First Lien Secured Revolving Loan

1.00%

L+ 7.00%

8.00% (7.50% Cash + 0.50% PIK)

09/15/21

09/14/26

-

-

-

-

EducationDynamics, LLC(4)

Subordinated Unsecured Term Loan

N/A

4.00%

4.00%

09/15/21

03/15/27

167

167

167

0.05

13,552

13,286

13,285

4.10

Electronic Equipment & Instruments

LMG Holdings, Inc

First Lien Secured Term Loan

1.00%

L+ 6.50%

7.50%

04/30/21

04/30/26

6,819

6,694

6,704

2.07

LMG Holdings, Inc(7)

First Lien Secured Revolving Loan

1.00%

L+ 6.50%

7.50%

04/30/21

04/30/26

-

-

1

-

6,819

6,694

6,705

2.07

Health Care Facilities

Epiphany Dermatology

First Lien Secured Term Loan

1.00%

L+ 7.50%

8.50%

12/04/20

06/22/23

3,474

3,415

3,446

1.06

Epiphany Dermatology(7)

First Lien Secured Revolving Loan

1.00%

L+ 7.50%

8.50%

12/04/20

06/22/23

-

-

4

-

Epiphany Dermatology(7)

First Lien Secured Delayed Draw Loan

1.00%

L+ 7.50%

8.50%

12/04/20

06/22/23

1,195

1,175

1,202

0.37

Grupo HIMA San Pablo, Inc(8)

First Lien Secured Term Loan A

N/A

L+ 9.00%

9.13%

05/05/19

04/30/19

3,855

3,855

1,927

0.60

Grupo HIMA San Pablo, Inc(8)

First Lien Secured Term Loan B

1.50%

L+ 9.00%

10.50%

02/01/13

04/30/19

13,511

13,511

6,756

2.09

Grupo HIMA San Pablo, Inc(8)

Second Lien Secured Term Loan

N/A

L+ 15.75%

15.75% (13.75% Cash + 2.00% PIK)

02/01/13

07/31/18

1,028

1,024

-

-

23,063

22,980

13,335

4.12

Health Care Services

CHS Therapy, LLC

First Lien Secured Term Loan A

1.50%

L+ 9.00%

10.50% (10.00% Cash + 0.50% PIK)

06/14/19

06/14/24

7,281

7,206

7,281

2.25

CHS Therapy, LLC

First Lien Secured Term Loan C

1.50%

L+ 9.00%

10.50% (10.00% Cash + 0.50% PIK)

10/07/20

06/14/24

895

882

895

0.28

DCA Investment Holding, LLC

First Lien Secured Term Loan

0.75%

L+ 6.25%

7.00%

03/12/21

03/12/27

7,042

6,946

6,944

2.15

DCA Investment Holding, LLC(7)

First Lien Secured Delayed Draw Loan

0.75%

L+ 6.25%

7.00%

03/12/21

03/12/27

340

337

337

0.10

IvyRehab Intermediate II, LLC

First Lien Secured Term Loan

1.00%

L+ 6.75%

7.75%

12/04/20

12/04/24

17,410

17,143

17,280

5.34

IvyRehab Intermediate II, LLC(7)

First Lien Secured Delayed Draw Loan

1.00%

L+ 6.75%

7.75%

12/04/20

12/04/24

1,553

1,529

1,553

0.48

IvyRehab Intermediate II, LLC(7)

First Lien Secured Revolving Loan

1.00%

L+ 6.75%

7.75%

12/04/20

12/04/24

-

-

9

-

Lab Logistics, LLC

First Lien Secured Term Loan

1.00%

L+ 7.25%

8.25%

10/16/19

09/25/23

1,158

1,141

1,155

0.36

Lab Logistics, LLC

First Lien Secured Delayed Draw Loan

1.00%

L+ 7.25%

8.25%

10/16/19

09/25/23

5,197

5,177

5,197

1.61

PG Dental New Jersey Parent, LLC

First Lien Secured Term Loan

1.00%

L+ 9.00%

10.00% (8.75% Cash + 1.25% PIK)

11/25/20

11/25/25

15,398

15,110

14,782

4.57

PG Dental New Jersey Parent, LLC(7)

First Lien Secured Revolving Loan

1.00%

L+ 9.00%

10.00% (8.75% Cash + 1.25% PIK)

11/25/20

11/25/25

-

-

(20)

(0.01)

56,274

55,471

55,413

17.13

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited)

September 30, 2021

(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

Heavy Electrical Equipment

PPS CR Acquisition, Inc (dba Power Plant Services)

First Lien Secured Term Loan

1.00%

L+ 6.25%

7.25%

06/25/21

06/25/26

11,151

$

10,940

$

10,940

3.38

%

PPS CR Acquisition, Inc (dba Power Plant Services)(7)

First Lien Secured Revolving Loan

1.00%

L+ 6.25%

7.25%

06/25/21

06/25/24

104

103

100

0.03

11,255

11,043

11,040

3.41

Home Furnishings

Sure Fit Home Products, LLC

First Lien Secured Term Loan

1.00%

L+ 9.75%

10.75%

04/12/21

07/13/23

4,947

4,848

4,419

1.37

4,947

4,848

4,419

1.37

Household Products

The Kyjen Company, LLC (dba Outward Hound)

First Lien Secured Term Loan

1.00%

L+ 6.50%

7.50%

04/05/21

04/05/26

11,432

11,277

11,348

3.51

The Kyjen Company, LLC (dba Outward Hound)(7)

First Lien Secured Revolving Loan

1.00%

L+ 6.50%

7.50%

04/05/21

04/05/26

385

380

385

0.12

11,817

11,657

11,733

3.63

Interactive Media & Services

What If Media Group, LLC

First Lien Secured Term Loan

1.00%

L+ 6.50%

7.50%

10/02/19

10/02/24

18,972

18,709

18,857

5.83

18,972

18,709

18,857

5.83

Internet & Direct Marketing Retail

BBQ Buyer, LLC

First Lien Secured Term Loan

1.50%

L+ 8.00%

9.50%

08/28/20

08/28/25

12,634

12,382

12,846

3.97

Luxury Brand Holdings, Inc

First Lien Secured Term Loan

1.00%

L+ 6.50%

7.50%

12/04/20

06/04/26

5,955

5,854

5,955

1.84

Marlin DTC-LS Midco 2, LLC

First Lien Secured Term Loan

1.00%

L+ 6.50%

7.50%

08/06/21

07/01/25

4,277

4,194

4,193

1.30

Potpourri Group, Inc

First Lien Secured Term Loan

1.50%

L+ 8.25%

9.75%

07/03/19

07/03/24

17,263

17,048

17,263

5.33

40,129

39,478

40,257

12.44

Investment Banking & Brokerage

JVMC Holdings Corp (f/k/a RJO Holdings Corp)

First Lien Secured Term Loan

1.00%

L+ 6.75%

7.75%

02/28/19

02/28/24

12,946

12,884

12,946

4.00

12,946

12,884

12,946

4.00

IT Consulting & Other Services

AST-Applications Software Technology LLC

First Lien Secured Term Loan

1.00%

L+ 8.00%

9.00% (8.00% Cash + 1.00% PIK)

01/10/17

01/10/23

3,973

3,954

3,973

1.23

Core BTS, Inc

First Lien Secured Term Loan

1.50%

L+ 6.75%

8.25%

02/01/21

08/30/25

3,317

3,260

3,279

1.01

Core BTS, Inc

First Lien Secured Delayed Draw Loan

1.50%

L+ 6.75%

8.25%

02/01/21

08/30/25

1,658

1,627

1,623

0.50

8,948

8,841

8,875

2.74

Leisure Facilities

Honors Holdings, LLC(16)

First Lien Secured Term Loan

1.00%

L+ 7.81%

8.81% (8.31% Cash + 0.50% PIK)

09/06/19

09/06/24

9,440

9,307

9,213

2.85

Honors Holdings, LLC(16)

First Lien Secured Delayed Draw Loan

1.00%

L+ 7.60%

8.60% (8.10% Cash + 0.50% PIK)

09/06/19

09/06/24

4,649

4,609

4,537

1.40

Lift Brands, Inc (aka Snap Fitness Holdings, Inc)

First Lien Secured Term Loan A

1.00%

L+ 7.50%

8.50%

06/29/20

06/29/25

5,645

5,579

5,556

1.72

Lift Brands, Inc (aka Snap Fitness Holdings, Inc)

First Lien Secured Term Loan B

N/A

9.50%

9.50% (0.00% Cash + 9.50% PIK)

06/29/20

06/29/25

1,249

1,227

1,227

0.38

Lift Brands, Inc (aka Snap Fitness Holdings, 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

1,218

0.38

22,251

21,987

21,751

6.73

Leisure Products

PlayMonster LLC

First Lien Secured Term Loan

1.00%

L+ 6.00%

7.00%

06/07/21

06/07/26

6,000

5,888

5,580

1.72

PlayMonster LLC(7)

First Lien Secured Delayed Draw Loan

1.00%

L+ 6.00%

7.00%

06/07/21

06/07/26

-

-

(158)

(0.05)

6,000

5,888

5,422

1.67

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited)

September 30, 2021

(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

Office Services & Supplies

American Crafts, LC

First Lien Secured Term Loan

1.00%

L+ 8.50%

9.50%

05/28/21

05/28/26

8,392

$

8,280

$

8,278

2.56

%

Empire Office, Inc

First Lien Secured Term Loan

1.50%

L+ 6.75%

8.25%

04/12/19

04/12/24

12,868

12,700

12,786

3.95

Empire Office, Inc(7)

First Lien Secured Delayed Draw Loan

1.50%

L+ 6.75%

8.25%

08/17/21

04/12/24

-

-

(2)

-

21,260

20,980

21,062

6.51

Packaged Foods & Meats

Lenny & Larry's, LLC(17)

First Lien Secured Term Loan

1.00%

L+ 8.40%

9.40% (7.68% Cash + 1.72% PIK)

05/15/18

05/15/23

11,094

11,025

10,814

3.34

11,094

11,025

10,814

3.34

Personal Products

Inspired Beauty Brands, Inc

First Lien Secured Term Loan

1.00%

L+ 7.00%

8.00%

12/30/20

12/30/25

12,397

12,185

12,397

3.83

Inspired Beauty Brands, Inc(7)

First Lien Secured Revolving Loan

1.00%

L+ 7.00%

8.00%

12/30/20

12/30/25

-

-

9

-

12,397

12,185

12,406

3.83

Property & Casualty Insurance

Policy Services Company, LLC (5)

First Lien Secured Term Loan

1.00%

L+ 6.00%

7.00%

03/06/20

05/31/24

6,046

5,854

5,562

1.72

6,046

5,854

5,562

1.72

Research & Consulting Services

ALM Media, LLC

First Lien Secured Term Loan

1.00%

L+ 6.50%

7.50%

11/25/19

11/25/24

14,372

14,191

14,134

4.37

Nelson Worldwide, LLC

First Lien Secured Term Loan

1.00%

L+ 10.25%

11.25% (10.25% Cash + 1.00% PIK)

01/09/18

01/09/23

10,333

10,268

10,230

3.16

24,705

24,459

24,364

7.53

Specialized Consumer Services

HC Salon Holdings, Inc

First Lien Secured Term Loan

1.00%

L+ 8.00%

9.00%

09/30/21

09/24/26

11,667

11,433

11,433

3.53

HC Salon Holdings, Inc(7)

First Lien Secured Revolving Loan

1.00%

L+ 8.00%

9.00%

09/30/21

09/24/26

-

-

-

-

True Blue Car Wash, LLC

First Lien Secured Term Loan

1.00%

L+ 6.82%

7.82%

10/17/19

10/17/24

8,256

8,129

8,181

2.53

True Blue Car Wash, LLC(7)

First Lien Secured Delayed Draw Loan

1.00%

L+ 6.82%

7.82%

10/17/19

10/17/24

2,924

2,896

2,922

0.90

22,847

22,458

22,536

6.96

Specialized Finance

Golden Pear Funding Assetco, LLC(5)

Second Lien Secured Term Loan

1.00%

L+ 10.50%

11.50%

09/20/18

03/20/24

10,938

10,839

10,938

3.38

WHF STRS Ohio Senior Loan Fund LLC(4)(5)(7)(9)(14)

Subordinated Note

N/A

L+ 6.50%

6.58%

07/19/19

N/A

57,297

57,297

57,297

17.70

68,235

68,136

68,235

21.08

Systems Software

Arcstor Midco, LLC

First Lien Secured Term Loan

1.00%

L+ 7.00%

8.00%

03/16/21

03/16/27

19,403

19,050

19,179

5.92

19,403

19,050

19,179

5.92

Technology Hardware, Storage & Peripherals

Source Code Midco, LLC

First Lien Secured Term Loan

1.00%

L+ 6.50%

7.50%

07/30/21

07/30/27

7,648

7,500

7,499

2.32

Source Code Midco, LLC(7)

First Lien Secured Delayed Draw Loan

1.00%

L+ 7.00%

8.00%

07/30/21

07/30/27

-

-

-

-

Telestream Holdings Corporation

First Lien Secured Term Loan

1.00%

L+ 8.75%

9.75%

10/15/20

10/15/25

15,117

14,725

14,966

4.62

Telestream Holdings Corporation(7)

First Lien Secured Revolving Loan

1.00%

L+ 8.75%

9.75%

10/15/20

10/15/25

371

361

382

0.12

23,136

22,586

22,847

7.06

Total Debt Investments

675,942

$

661,368

$

652,122

201.45

%

Equity Investments

Air Freight & Logistics

Motivational CIV, LLC (dba Motivational Marketing, LLC)(4)

Class B Units

N/A

N/A

N/A

07/12/21

N/A

1,250

$

1,250

$

1,250

0.39

%

1,250

1,250

0.39

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited)

September 30, 2021

(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

Data Processing & Outsourced Services

Escalon Services Inc(4)

Warrants

N/A

N/A

N/A

12/04/20

N/A

709

$

476

$

914

0.28

%

476

914

0.28

Diversified Support Services

Quest Events, LLC(4)

Preferred Units

N/A

N/A

N/A

12/28/18

12/08/25

317

317

-

-

ImageOne Industries, LLC(4)

Common A Units

N/A

N/A

N/A

09/20/19

N/A

225

-

164

0.05

317

164

0.05

Education Services

EducationDynamics, LLC(4)

Preferred Units

N/A

N/A

N/A

09/15/21

N/A

167

167

167

0.05

167

167

0.05

Health Care Services

Lab Logistics(4)(20)

Preferred Units

N/A

14.00%

14.00% PIK

10/29/19

N/A

2

857

934

0.29

857

934

0.29

Interactive Media & Services

What If Media Group, LLC(4)

Common Units

N/A

N/A

N/A

07/02/21

N/A

8

850

850

0.26

850

850

0.26

Internet & Direct Marketing Retail

BBQ Buyer, LLC(4)

Shares

N/A

N/A

N/A

08/28/20

N/A

1,100

1,100

3,311

1.02

Ross-Simons Topco, LP(4)

Preferred Units

N/A

N/A

N/A

12/04/20

N/A

600

600

840

0.26

1,700

4,151

1.28

Investment Banking & Brokerage

Arcole Holding Corp.(4)(5)(6)(18)

Shares

N/A

N/A

N/A

10/01/20

N/A

-

6,944

6,800

2.10

6,944

6,800

2.10

IT Consulting & Other Services

CX Holdco LLC(4)

Common Units

N/A

N/A

N/A

05/04/21

N/A

660

660

660

0.20

Keras Holdings, LLC(4)

Shares

N/A

N/A

N/A

12/31/20

N/A

496

496

546

0.17

1,156

1,206

0.37

Leisure Facilities

Lift Brands, Inc (aka Snap Fitness Holdings, Inc)(4)

Class A Common Stock

N/A

N/A

N/A

06/29/20

N/A

2

1,955

184

0.06

Lift Brands, Inc (aka Snap Fitness Holdings, Inc)(4)

Warrants

N/A

N/A

N/A

06/29/20

06/28/28

1

793

75

0.02

2,748

259

0.08

Other Diversified Financial Services

SFS Global Holding Company(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

3,493

1.08

2,890

3,493

1.08

Specialized Finance

WHF STRS Ohio Senior Loan Fund(4)(5)(7)(14)

LLC Interests

N/A

N/A

N/A

07/19/19

N/A

14,324

14,324

14,813

4.58

14,324

14,813

4.58

Total Equity Investments

$

33,679

$

35,001

10.81

%

Total Investments

$

695,047

$

687,123

212.26

%

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited)

September 30, 2021

(in thousands)

Forward Currency Contracts

Counterparty

Currency to be sold

Currency to be purchased

Settlement date

Unrealized
appreciation

Unrealized
depreciation

Morgan Stanley

C$

24,385 CAD

$

19,440 USD

10/28/21

$

186

$

-

Total

$

186

$

-

(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 USD LIBOR were 0.08%, 0.13% and 0.16%, respectively, as of September 30, 2021. The CDOR and Prime was 0.45% and 3.25%, respectively, as of September 30, 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 84.5% 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 September 30, 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 212.3% of the Company's net assets or 94.2% 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 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) 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.

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

Source: WhiteHorse Finance, Inc.

Attachments

  • Original document
  • Permalink

Disclaimer

WhiteHorse Finance Inc. published this content on 09 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 November 2021 13:23:14 UTC.