EX-99.1 2 tm2124475d1_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

 

 

 

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

 

NEW YORK, August 9, 2021 /PRNewswire/ -- WhiteHorse Finance, Inc. ("WhiteHorse Finance" or the "Company") (Nasdaq: WHF) today announced its financial results for the quarter ended June 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 September 30, 2021. The distribution will be payable on October 4, 2021 to stockholders of record as of September 20, 2021.

 

Second Quarter 2021 Summary Highlights

 

·Net Asset Value of $319.6 million, or $15.42 per share

·Investment portfolio(1) totaling $670.5 million

·STRS JV investment portfolio totaling $209.5 million

·Gross investment deployments(2) of $103.8 million for the second quarter, including new originations of $96.3 million and $7.5 million of fundings for add-ons to existing investments

·Net investment income of $6.1 million, or $0.296 per share

·Core net investment income of $7.0 million, or $0.338 per share(3)

·Second 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 $61.9 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, "During the second quarter, we successfully originated seven first lien loans and one second lien deal, contributing $96.3 million of gross deployment. The origination volume increased leverage to 1.14x, and our net asset value rose to $15.42 per share driven by mark-to-market gains in our portfolio, representing the second highest per share level since the Company’s initial public offering. With SureFit placed back on accrual, the investment portfolio remains strong with only one investment remaining on non-accrual status. Looking forward, the pipeline is very active for existing deal paydowns, refinancings and new deals for the second half of 2021. In this fast-paced environment, we will continue to leverage our three-tiered sourcing approach and rigorous underwriting standards to maintain and grow a healthy portfolio, generating robust cash flows to support our dividend and ultimately enhancing value for our shareholders."

 

Portfolio and Investment Activity

 

As of June 30, 2021, the fair value of WhiteHorse Finance's investment portfolio was $670.5 million, compared with $617.0 million as of March 31, 2021. The portfolio as of June 30, 2021 consisted of 97 positions across 67 companies with a weighted average effective yield of 9.5% 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 84.0% first lien secured loans, 4.4% second lien secured loans, 2.4% equity and 9.2% 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 June 30, 2021, WhiteHorse Finance made investments in eight new portfolio companies totaling $96.3 million and added a total of $7.5 million to six existing portfolio companies. Proceeds from sales and repayments totaled approximately $30.8 million for the quarter ended June 30, 2021, driven by two full realizations in NMFC Senior Loan Program I LLC and Comniscient Technologies LLC.

 

In addition to the transactions discussed above, during the three months ended June 30, 2021, WhiteHorse Finance transferred assets comprised of four new portfolio companies and three add-on investments totaling $31.8 million to STRS JV in exchange for a net investment in STRS JV of $6.6 million as well as cash proceeds of $25.2 million.

 

WHF STRS Ohio Senior Loan Fund LLC

 

As of June 30, 2021, STRS JV's portfolio totaled $209.5 million, consisted of 25 portfolio companies and had a weighted average effective yield of 8.1% on its portfolio.

 

Results of Operations

 

For the three months ended June 30, 2021, the Company's net investment income was approximately $6.1 million, compared with approximately $5.2 million for the same periods in the prior year, representing an increase of approximately 17.3%. The increase in net investment income for the year-over-year period was primarily attributable to higher interest income earned on a comparatively larger portfolio and higher investment income generated from the Company's investment in STRS JV, partially offset by higher incentive fees accrued for the quarter ended June 30, 2021. For the three months ended June 30, 2021, the Company's investment in STRS JV generated an annualized, gross investment yield of approximately 13.8%.

 

For the three months ended June 30, 2021, core net investment income (as defined above) was $7.0 million, compared with $5.2 million for the same period in the prior year, representing an increase of approximately 34.6%.

 

For the three months ended June 30, 2021, WhiteHorse Finance reported net realized and unrealized gains on investments and foreign currency transactions of $4.4 million. This compares with net realized and unrealized gains on investments and foreign currency transactions of $17.6 million for the three months ended June 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 overall market stability and price recovery from the COVID-19 pandemic.

 

WhiteHorse Finance reported a net increase in net assets resulting from operations of approximately $10.5 million for the three months ended June 30, 2021, which compares with a net increase of $22.8 million for the three months ended June 30, 2020.

 

WhiteHorse Finance's net asset value was $319.6 million, or $15.42 per share, as of June 30, 2021, as compared with $314.3 million, or $15.27 per share, as of March 31, 2021.

 

Liquidity and Capital Resources

 

As of June 30, 2021, WhiteHorse Finance had cash and cash equivalents of $17.8 million, as compared with $24.5 million as of March 31, 2021, inclusive of restricted cash. As of June 30, 2021, the Company also had $46.5 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, 2021. The distribution will be payable on October 4, 2021 to stockholders of record as of September 20, 2021.

 

On May 10, 2021, the Company declared a distribution of $0.355 per share for the quarter ended June 30, 2021, consistent with distributions declared for the thirty-fifth consecutive quarter since the Company's initial public offering. The distribution was paid on July 2, 2021 to stockholders of record as of June 18, 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 second quarter results at 1:00 p.m. ET on Monday, August 9, 2021. To access the teleconference, please dial 877-876-9174 (domestic and international) approximately 10 minutes before the teleconference's scheduled start time and reference Conference ID #WHFQ221. 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 16, 2021. The teleconference replay can be accessed by dialing 877-274-8339 (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 $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.

 

(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, 2021 and June 30, 2020.

 

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

 

   June 30, 2021   June 30, 2020 
   Amount  

Per Share

Amounts

   Amount  

Per Share

Amounts

 
Net investment income  $6,100   $0.296   $5,240   $0.255 
Net impact of costs associated with refinancing of indebtedness   -    -    -    - 
Accrual for capital gains incentive fee   882    0.042    -    - 
Net impact of excise tax expense related to net realized gains and losses   -    -    -    - 
Core net investment income  $6,982   $0.338   $5,240   $0.255 

 

 

 

 

WhiteHorse Finance, Inc.

Consolidated Statements of Assets and Liabilities

(in thousands, except share and per share data)

 

   June 30, 2021   December 31, 2020 
    (Unaudited)      
Assets          
Investments, at fair value          
Non-controlled/non-affiliate company investments  $602,576   $623,777 
Non-controlled affiliate company investments   6,008    15,717 
Controlled affiliate company investments   61,891    51,241 
Total investments, at fair value (amortized cost $678,680 and $695,429, respectively)   670,475    690,735 
Cash and cash equivalents   10,329    8,062 
Restricted cash and cash equivalents   7,037    7,549 
Restricted foreign currency (cost of $378 and $319, respectively)   397    333 
Interest and dividend receivable   7,076    6,532 
Amounts receivable on unsettled investment transactions   1,021    4,717 
Escrow receivable   2,236    - 
Prepaid expenses and other receivables   1,154    1,061 
Total assets  $699,725   $718,989 
           
Liabilities          
Debt  $358,719   $384,880 
Distributions payable   7,357    7,294 
Management fees payable   3,357    3,354 
Incentive fees payable   6,994    6,117 
Amounts payable on unsettled investment transactions   -    497 
Interest payable   1,848    1,870 
Accounts payable and accrued expenses   1,437    1,708 
Advances received from unfunded credit facilities   392    372 
Total liabilities   380,104    406,092 
           
Commitments and contingencies          
           
Net assets          
Common stock, 20,722,596 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   302,711    300,002 
Accumulated earnings   16,889    12,874 
Total net assets   319,621    312,897 
Total liabilities and total net assets  $699,725   $718,989 
           
Number of shares outstanding   20,722,596    20,546,032 
Net asset value per share  $15.42   $15.23 

 

 

 

 

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, 
   2021   2020   2021   2020 
Investment income                    
From non-controlled/non-affiliate company investments                    
Interest income  $14,148   $12,145   $28,960   $25,284 
Fee income   350    539    1,121    830 
Dividend income   65    30    109    79 
From non-controlled affiliate company investments                    
Dividend income   717    263    967    538 
From controlled affiliate company investments                    
Interest income   738    606    1,457    1,231 
Dividend income   1,325    240    2,699    393 
Total investment income   17,343    13,823    35,313    28,355 
                     
Expenses                    
Interest expense   3,811    3,223    7,613    6,891 
Base management fees   3,357    2,950    6,701    6,042 
Performance-based incentive fees   2,628    1,311    4,670    1,752 
Administrative service fees   170    171    341    342 
General and administrative expenses   875    730    1,696    1,610 
Total expenses   10,841    8,385    21,021    16,637 
                     
Net investment income before excise tax   6,502    5,438    14,292    11,718 
Excise tax   402    198    592    376 
Net investment income after excise tax   6,100    5,240    13,700    11,342 
                     
Realized and unrealized gains (losses) on investments and foreign currency transactions                    
Net realized gains (losses)                    
Non-controlled/non-affiliate company investments   (555)   (77)   7,605    433 
Non-controlled-affiliate company investments   -    -    -    - 
Foreign currency transactions   (4)   70    (3)   67 
Foreign currency forward contracts   (4)   (6)   (4)   - 
Net realized gains (losses)   (563)   (13)   7,598    500 
Net change in unrealized appreciation (depreciation)                    
Non-controlled/non-affiliate company investments   4,407    15,841    (2,568)   (6,355)
Non-controlled affiliate company investments   755    871    321    (1,130)
Controlled affiliate company investments   (149)   1,111    (269)   (2,842)
Translation of assets and liabilities in foreign currencies   (40)   (237)   (102)   343 
Foreign currency forward contracts   1    (2)   -    (3)
Net change in unrealized appreciation (depreciation)   4,974    17,584    (2,618)   (9,987)
Net realized and unrealized gains (losses) on investments   4,411    17,571    4,980    (9,487)
Net increase in net assets resulting from operations  $10,511   $22,811   $18,680   $1,855 
                     
Per Common Share Data                    
Basic and diluted earnings per common share  $0.51   $1.11   $0.91   $0.09 
Dividends and distributions declared per common share  $0.36   $0.36   $0.71   $0.71 
Basic and diluted weighted average common shares Outstanding   20,626,340    20,546,032    20,589,159    20,546,032 

 

 

 

 

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited)

June 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   7,705   $7,583   $7,705    2.41%
                          7,705    7,583    7,705    2.41 
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   5,083    5,043    5,083    1.59 
                          5,083    5,043    5,083    1.59 
Application Software                                          
Atlas Purchaser, Inc. (dba Aspect Software)  Second Lien Secured Term Loan   0.75%  L+ 9.00%   9.75%  05/06/21  05/06/29   15,000    14,558    14,558    4.55 
Connexity, Inc.  First Lien Secured Term Loan   1.50%  L+ 8.50%   10.00%  05/21/20  05/21/25   9,454    9,234    9,454    2.96 
Newscycle Solutions, Inc.  First Lien Secured Term Loan   1.00%  L+ 7.00%   8.00%  06/14/19  12/29/22   3,229    3,202    3,217    1.01 
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+ 6.50%   7.50%  12/31/20  12/31/26   6,779    6,655    6,655    2.08 
TaxSlayer LLC(7)  First Lien Secured Revolving Loan   1.00%  L+ 6.50%   7.50%  12/31/20  12/31/26   -    -    -    - 
                          34,631    33,817    34,052    10.65 
Automotive Retail                                          
Team Car Care Holdings, LLC(12)  First Lien Secured Term Loan   1.02%  Base rate+ 7.99%   9.01%  02/26/18  02/23/23   15,678    15,561    15,629    4.89 
                          15,678    15,561    15,629    4.89 
Building Products                                          
Drew Foam Companies Inc  First Lien Secured Term Loan   1.00%  L+ 6.50%   7.50%  11/05/20  11/05/25   7,244    7,115    7,118    2.23 
LHS Borrower, LLC  First Lien Secured Term Loan   1.00%  L+ 6.75%   7.75%  09/30/20  09/30/25   9,567    9,385    9,496    2.97 
LHS Borrower, LLC(7)  First Lien Secured Revolving Loan   1.00%  L+ 6.75%   7.75%  09/30/20  09/30/25   -    -    7    - 
                          16,811    16,500    16,621    5.20 
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    14,913    14,250    4.46 
                          15,000    14,913    14,250    4.46 
Construction & Engineering                                          
SFP Holding, Inc.  First Lien Secured Term Loan   1.00%  L+ 6.25%   7.25%  06/22/21  09/01/23   2,295    2,246    2,272    0.71 
Tensar Corp.  First Lien Secured Term Loan   1.00%  L+ 6.75%   7.75%  11/20/20  08/20/25   6,965    6,813    6,930    2.17 
                          9,260    9,059    9,202    2.88 
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   7,960    7,817    7,846    2.45 
Claridge Products and Equipment, LLC(7)  First Lien Secured Revolving Loan   1.00%  L+ 6.50%   7.50%  12/30/20  12/29/25   -    -    3    - 
                          7,960    7,817    7,849    2.45 
Commodity Chemicals                                          
Flexitallic Group SAS  First Lien Secured Term Loan   1.00%  L+ 6.50%   7.50%  10/28/19  10/29/26   11,893    11,671    11,299    3.54 
                          11,893    11,671    11,299    3.54 
Consumer Finance                                          
Maxitransfers Blocker Corp  First Lien Secured Term Loan   1.00%  L+ 8.50%   9.50%  10/07/20  10/07/25   8,757    8,580    8,657    2.71 
Maxitransfers Blocker Corp(4)(7)  First Lien Secured Revolving Loan   1.00%  L+ 8.50%   9.50%  10/07/20  10/07/25   -    -    9    - 
                          8,757    8,580    8,666    2.71 
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   8,024    7,394    7,661    2.40 
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   24,312    24,095    24,155    7.56 
Geo Logic Systems Ltd.(5)(12)(13)  First Lien Secured Term Loan   1.00%  C+ 6.50%   7.50%  12/19/19  12/19/24   6,623    4,982    5,236    1.64 
Geo Logic Systems Ltd. (5)(7)(13)  First Lien Secured Revolving Loan   1.00%  C+ 6.50%   7.50%  12/19/19  12/19/24   -    -    (2)   - 
E-Phoenix Acquisition Co. Inc. (dba Integreon)  First Lien Secured Term Loan   1.00%  L+ 5.75%   6.75%  06/23/21  06/23/27   9,000    8,888    8,888    2.78 
                          47,959    45,359    45,938    14.38 

 

 

 

 

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited)

June 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+ 6.00%   7.00%  10/24/18  10/24/24   13,538   $13,308   $13,538    4.24%
                          13,538    13,308    13,538    4.24 
Distributors                                          
Crown Brands, LLC(19)  Second Lien Secured Term Loan   1.50%  L+ 10.50%   12.00%  12/15/20  01/08/26   4,379    4,287    3,673    1.15 
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    545    0.17 
                          5,029    4,937    4,218    1.32 
Diversified Chemicals                                          
Sklar Holdings, Inc.  First Lien Secured Term Loan   1.00%  L+ 7.75%   8.75%  11/13/19  05/13/23   7,451    7,335    7,451    2.33 
                          7,451    7,335    7,451    2.33 
Diversified Support Services                                          
NNA Services, LLC  First Lien Secured Term Loan   1.50%  L+ 7.00%   8.50%  10/16/18  10/16/23   13,174    13,032    13,174    4.12 
                          13,174    13,032    13,174    4.12 
Education Services                                          
EducationDynamics, LLC  First Lien Secured Term Loan   1.00%  L+ 7.75%   8.75%  11/26/19  11/26/24   12,232    12,059    12,232    3.83 
                          12,232    12,059    12,232    3.83 
Electronic Equipment & Instruments                                          
LMG Holdings, Inc.  First Lien Secured Term Loan   1.00%  L+ 6.50%   7.50%  04/30/21  04/30/26   6,836    6,704    6,704    2.10 
LMG Holdings, Inc.(7)  First Lien Secured Revolving Loan   1.00%  L+ 6.50%   7.50%  04/30/21  04/30/26   -    -    -    - 
                          6,836    6,704    6,704    2.10 
Health Care Facilities                                          
Epiphany Dermatology  First Lien Secured Term Loan   1.00%  L+ 7.50%   8.50%  12/04/20  06/22/23   3,483    3,415    3,431    1.07 
Epiphany Dermatology(7)  First Lien Secured Revolving Loan   1.00%  L+ 7.50%   8.50%  12/04/20  06/22/23   -    -    2    - 
Epiphany Dermatology(7)  First Lien Secured Delayed Draw Loan   1.00%  L+ 7.50%   8.50%  12/04/20  06/22/23   -    -    14    - 
Grupo HIMA San Pablo, Inc.(8)  First Lien Secured Term Loan A   N/A   L+ 9.00%   9.18%  05/05/19  04/30/19   3,855    3,855    2,146    0.67 
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    7,521    2.35 
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    -    - 
                          21,877    21,805    13,114    4.09 
Health Care Services                                          
CHS Therapy, LLC  First Lien Secured Term Loan A   1.50%  L+ 8.50%   10.00%  06/14/19  06/14/24   7,326    7,244    7,325    2.29 
CHS Therapy, LLC  First Lien Secured Term Loan C   1.50%  L+ 8.50%   10.00%  10/07/20  06/14/24   901    886    901    0.28 
DCA Investment Holding, LLC  First Lien Secured Term Loan   0.75%  L+ 6.25%   7.00%  03/12/21  03/12/27   7,060    6,959    6,959    2.18 
DCA Investment Holding, LLC(7)  First Lien Secured Delayed Draw Loan   0.75%  L+ 6.25%   7.00%  03/12/21  03/12/27   -    -    -    - 
Ivy Rehab Holdings LLC  First Lien Secured Term Loan   1.00%  L+ 6.75%   7.75%  12/04/20  12/04/24   8,811    8,660    8,811    2.76 
Ivy Rehab Holdings LLC(7)  First Lien Secured Revolving Loan   1.00%  L+ 6.75%   7.75%  12/04/20  12/04/24   -    -    9    - 
Ivy Rehab Holdings LLC(7)  First Lien Secured Delayed Draw Loan   1.00%  L+ 6.75%   7.75%  12/04/20  12/04/24   377    370    398    0.12 
Lab Logistics, LLC  First Lien Secured Term Loan   1.00%  L+ 7.25%   8.25%  10/16/19  09/25/23   1,161    1,141    1,153    0.36 
Lab Logistics, LLC  First Lien Secured Delayed Draw Loan   1.00%  L+ 7.25%   8.25%  10/16/19  09/25/23   5,210    5,188    5,210    1.63 
PG Dental New Jersey Parent, LLC  First Lien Secured Term Loan   1.00%  L+ 7.75%   8.75%  11/25/20  11/25/25   16,089    15,770    15,903    4.98 
PG Dental New Jersey Parent, LLC(7)  First Lien Secured Revolving Loan   1.00%  L+ 7.75%   8.75%  11/25/20  11/25/25   -    -    10    - 
                          46,935    46,218    46,679    14.60 
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   11,179    10,956    10,956    3.43 
PPS CR Acquisition, Inc. (dba Power Plant Services)(7)  First Lien Secured Revolving Loan   1.00%  L+ 7.25%   8.25%  06/25/21  06/25/24   104    102    102    0.03 
                          11,283    11,058    11,058    3.46 
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   4,982    4,868    4,434    1.39 
                          4,982    4,868    4,434    1.39 
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   11,460    11,297    11,297    3.53 
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    379    379    0.12 
                          11,845    11,676    11,676    3.65 
Interactive Media & Services                                          
What If Media Group, LLC  First Lien Secured Term Loan   1.00%  L+ 7.00%   8.00%  10/02/19  10/02/24   17,448    17,194    17,356    5.43 
                          17,448    17,194    17,356    5.43 
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   12,666    12,396    12,878    4.03 
Luxury Brand Holdings, Inc.  First Lien Secured Term Loan   1.00%  L+ 6.50%   7.50%  12/04/20  06/04/26   5,970    5,863    5,970    1.87 
Potpourri Group, Inc.  First Lien Secured Term Loan   1.50%  L+ 8.25%   9.75%  07/03/19  07/03/24   18,151    17,905    18,151    5.68 
                          36,787    36,164    36,999    11.58 

 

 

 

 

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited)

June 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		 
Investment Banking & Brokerage                                            
JVMC Holdings Corp. (f/k/a RJO Holdings Corp)  First Lien Secured Term Loan   1.00%   L+ 7.25%    8.25%  02/28/19  02/28/24   13,163   $13,093   $13,163    4.12%
                            13,163    13,093    13,163    4.12 
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   3,988    3,965    3,988    1.25 
Cennox Holdings Limited(5)(13)  First Lien Secured Term Loan   1.00%   L+ 6.00%    7.00%  05/04/21  05/04/26   2,880    3,928    3,906    1.22 
Cennox Holdings Limited(5)(7)(12)(13)  First lien Secured Revolving Loan   2.50%   L+ 5.33%    7.83%  05/04/21  05/04/26   432    588    586    0.18 
Core BTS, Inc.  First Lien Secured Term Loan   1.50%   L+ 6.75%    8.25%  02/01/21  08/30/25   3,325    3,264    3,289    1.03 
Core BTS, Inc.  First Lien Secured Delayed Draw Loan   1.50%   L+ 6.75%    8.25%  02/01/21  08/30/25   1,663    1,631    1,628    0.51 
                            12,288    13,376    13,397    4.19 
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    9,300    9,156    2.86 
Honors Holdings, LLC(16)  First Lien Secured Delayed Draw Loan   1.00%   L+ 7.62%    8.62% (8.04% Cash + 0.58% PIK)   09/06/19  09/06/24   4,649    4,606    4,509    1.41 
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   5,659    5,589    5,571    1.74 
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   1,219    1,196    1,187    0.37 
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 
                            22,235    21,956    21,641    6.76 
Leisure Products                                            
PlayMonster LLC  First Lien Secured Term Loan   1.00%   L+ 6.00%    7.00%  06/07/21  06/07/26   6,000    5,882    5,882    1.84 
PlayMonster LLC(7)  First Lien Secured Delayed Draw Loan   1.00%   L+ 6.00%    7.00%  06/07/21  06/07/26   -    -    -    - 
                            6,000    5,882    5,882    1.84 
Office Services & Supplies                                            
American Crafts, L.C.  First Lien Secured Term Loan   1.00%   L+ 8.50%    9.50%  05/28/21  05/28/26   8,500    8,375    8,373    2.62 
Empire Office, Inc.  First Lien Secured Term Loan   1.50%   L+ 6.75%    8.25%  04/12/19  04/12/24   8,795    8,697    8,795    2.75 
                            17,295    17,072    17,168    5.37 
Packaged Foods & Meats                                            
Lenny & Larry's, LLC(17)  First Lien Secured Term Loan   1.00%   L+ 8.41%    9.41% (7.69% Cash + 1.72% PIK)   05/15/18  05/15/23   11,046    10,966    10,554    3.30 
                            11,046    10,966    10,554    3.30 
Personal Products                                            
Inspired Beauty Brands, Inc.  First Lien Secured Term Loan   1.00%   L+ 7.00%    8.00%  12/30/20  12/30/25   12,475    12,250    12,250    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   -    -    -    - 
                            12,475    12,250    12,250    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   6,062    5,851    5,940    1.86 
                            6,062    5,851    5,940    1.86 
Research & Consulting Services                                            
ALM Media, LLC  First Lien Secured Term Loan   1.00%   L+ 7.00%    8.00%  11/25/19  11/25/24   14,527    14,330    14,091    4.41 
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   10,639    10,558    10,533    3.30 
                            25,166    24,888    24,624    7.71 
Restaurants                                            
LS GFG Holdings Inc.  First Lien Secured Term Loan   1.00%   L+ 8.00%    9.00% (7.00% Cash + 2.00% PIK)   11/30/18  11/19/25   10,842    10,155    10,842    3.39 
                            10,842    10,155    10,842    3.39 
Specialized Consumer Services                                            
True Blue Car Wash, LLC  First Lien Secured Term Loan   1.00%   L+ 7.12%    8.12%  10/17/19  10/17/24   4,293    4,236    4,293    1.34 
True Blue Car Wash, LLC(7)  First Lien Secured Delayed Draw Loan   1.00%   L+ 7.12%    8.12%  10/17/19  10/17/24   2,943    2,913    2,942    0.92 
                            7,236    7,149    7,235    2.26 
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    10,829    10,938    3.42 
WHF STRS Ohio Senior Loan Fund LLC(4)(5)(7)(9)(14)  Subordinated Note   N/A    L+ 6.50%    6.59%  07/19/19  N/A   49,809    49,809    49,809    15.58 
                            60,747    60,638    60,747    19.00 
Systems Software                                            
IDIG Parent LLC  First Lien Secured Term Loan   1.00%   L+ 6.50%    7.50%  02/17/21  12/15/26   4,263    4,224    4,223    1.32 
IDIG Parent LLC(7)  First Lien Secured Delayed Draw Loan   1.00%   L+ 6.50%    7.50%  02/17/21  12/15/26   -    -    -    - 
IDIG Parent LLC(7)  First Lien Secured Revolving Loan   1.00%   L+ 6.50%    7.50%  02/17/21  12/15/26   -    -    -    - 
                            4,263    4,224    4,223    1.32 

 

 

 

 

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited)

June 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		 
Technology Hardware, Storage & Peripherals                                          
Arcstor Midco, LLC  First Lien Secured Term Loan   1.00%  L+ 7.00%   8.00%  03/16/21  03/16/27   19,451   $19,081   $19,081    5.97%
Source Code Midco, LLC  First Lien Secured Term Loan   1.00%  L+ 8.25%   9.25%  05/04/18  05/04/23   21,700    21,470    21,700    6.79 
Telestream Holdings Corporation  First Lien Secured Term Loan   1.00%  L+ 8.75%   9.75%  10/15/20  10/15/25   15,155    14,738    14,882    4.66 
Telestream Holdings Corporation(7)  First Lien Secured Revolving Loan   1.00%  L+ 8.75%   9.75%  10/15/20  10/15/25   -    -    14    - 
                          56,306    55,289    55,677    17.42 
Trading Companies & Distributors                                          
LINC Systems, LLC  First Lien Secured Term Loan   1.00%  L+ 6.50%   7.50%  02/24/21  02/24/26   4,167    4,090    4,090    1.28 
LINC Systems, LLC(7)  First Lien Secured Revolving Loan   1.00%  L+ 6.50%   7.50%  02/24/21  02/24/26   -    -    -    - 
                          4,167    4,090    4,090    1.28 
                                           
Total Debt Investments                         659,445   $649,140   $642,360    200.95%
                                           
Equity Investments                                          
Data Processing & Outsourced Services                                          
Escalon Services Inc(4)  Warrants   N/A     N/A   N/A     12/04/20  N/A   709   $476   $482    0.15%
                               476    482    0.15 
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 
Health Care Services                                          
Lab Logistics(4)  Preferred Units   N/A     N/A   N/A     10/29/19  N/A   2    857    905    0.28 
                               857    905    0.28 
Internet & Direct Marketing Retail                                          
BBQ Buyer, LLC(4)  Shares   N/A     N/A   N/A     08/28/20  N/A   1,100    1,100    2,728    0.85 
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    3,568    1.11 
Investment Banking & Brokerage                                          
Arcole Holding Corp.(4)(5)(6)(18)  Shares   N/A     N/A   N/A     10/01/20  N/A   -    6,944    6,008    1.88 
                               6,944    6,008    1.88 
IT Consulting & Other Services                                          
CX Holdco LLC(4)  Common Units   N/A     N/A   N/A     05/04/21  N/A   660    660    660    0.21 
Keras Holdings, LLC(4)  Shares   N/A     N/A   N/A     12/31/20  N/A   496    496    496    0.16 
                               1,156    1,156    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    3,491    1.09 
                               2,890    3,491    1.09 
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   12,452    12,452    12,082    3.78 
                               12,452    12,082    3.78 
                                           
Total Equity Investments                             $29,540   $28,115    8.79%
                                           
Total Investments                             $678,680   $670,475    209.74%

 

 

 

 

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited)

June 30, 2021

(in thousands)

 

Forward Currency Contracts

 

                 Unrealized    Unrealized 
Counterparty   Currency to be
sold		    Currency to be
purchased		   Settlement date   appreciation
($)		    depreciation
($)		 
Morgan Stanley  C$86 CAD   $67 USD   07/28/2021  $-   $- 
                $-   $- 

 

(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 0.1%, 0.1% and 0.2%, respectively, as of June 30, 2021. The one, three and six-month GBP LIBOR were all 0.1% as of June 30, 2021. The CDOR and Prime was 0.4% and 3.25%, respectively, as of June 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 86.5% 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 June 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 209.8% of the Company’s net assets or 95.8% 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 or British Pounds.

 

(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.

 

 

 

 

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

 

Alex Jorgensen

Prosek Partners

646-818-9059

ajorgensen@prosek.com

 

Source: WhiteHorse Finance, Inc.