Exhibit 99.1

 

 

 

 

WhiteHorse Finance, Inc. Announces Second Quarter 2018 Earnings Results

 

 

NEW YORK, NY, August 8, 2018 – WhiteHorse Finance, Inc. (“WhiteHorse Finance” or the “Company”) (NASDAQ: WHF) today announced its financial results for the quarter ended June 30, 2018.

 

Second Quarter 2018 Summary Highlights

·New investments of $71.2 million
·Net investment income of $4.6 million, or $0.224 per share

·Core net investment income of $6.8 million, or $0.331 per share(1)
·Second quarter distribution of $0.355 per share

 

(1) 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) any excise or other income taxes related to such net realized gains and losses. 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, “Our second quarter results featured another strong increase in NAV, five originations, and a markup on our position in Aretec following news of its pending sale. Our last 15 originations have been first-lien, and our weighted-average effective yield has remained at or near 12 percent, exhibiting high credit quality and attractive returns. Our pipeline remains strong and our disciplined approach to sourcing remains a constant, as does our focus on earning our dividend on an annualized basis. Collectively these results reflect the differentiating impact of our three-tiered H.I.G. sourcing architecture.”

 

Portfolio and Investment Activity

 

As of June 30, 2018, the fair value of WhiteHorse Finance’s investment portfolio was $511.4 million, compared with $467.7 million as of March 31, 2018. The portfolio at June 30, 2018 consisted of 52 positions across 36 companies with an average investment size of $9.8 million and a weighted average effective yield on income-producing investments of 12.0%, remaining relatively flat as compared to last quarter. The majority of the portfolio was comprised of senior secured loans, and these loans were substantially all variable-rate investments (primarily indexed to LIBOR), which should continue to position the portfolio well for a rising interest rate environment.

 

During the three months ended June 30, 2018, WhiteHorse Finance invested $71.2 million across five new portfolio companies. Gross proceeds from sales and repayments totaled $42.5 million for the quarter primarily driven by full repayment on two positions. The Company remained highly selective in deploying new investments.

 

Results of Operations

 

For the three months ended June 30, 2018, net investment income was $4.6 million, compared with $6.9 million for the same period in the prior year, representing a decrease of approximately 33.3%. For the three months ended June 30, 2018, core net investment income, a non-GAAP financial measure that excludes capital gains incentive fee accruals, excise or other income taxes related to net realized gains and losses, and the associated costs of refinancing the Company’s indebtedness, was $6.8 million, compared with $6.9 million for the same period in the prior year, representing a decrease of approximately 1.4%. The decrease in net investment income compared to the same period in the prior year was primarily due to the $2.2 million accrual for capital gains incentive fee in the current period.

 

For the three months ended June 30, 2018, WhiteHorse Finance reported net realized and unrealized gains on investments of $14.4 million. This compares with realized and unrealized gains on investments of $0.3 million for the three months ended June 30, 2017. The increase in net realized and unrealized gains on investments was primarily attributable to the unrealized appreciation in the Company’s equity investment in Aretec Group, Inc. as well as other favorable fair value adjustments on an aggregate basis.

 

WhiteHorse Finance reported a net increase in net assets of $19.1 million for the three months ended June 30, 2018, which compares with a net increase of $7.3 million for the three months ended June 30, 2017.

 

 

 

  

WhiteHorse Finance’s net asset value was $305.3 million, or $14.87 per share, as of June 30, 2018, as compared with $293.5 million, or $14.30 per share, reported as of March 31, 2018.

 

Liquidity and Capital Resources

 

As of June 30, 2018, WhiteHorse Finance had cash and cash equivalents of $18.6 million, as compared with $18.6 million as of March 31, 2018, inclusive of restricted cash. As of June 30, 2018, the Company had $12.2 million of undrawn capacity under its revolving credit facility.

 

Distributions

 

On June 5, 2018, the Company declared a distribution of $0.355 per share for the quarter ended June 30, 2018, consistent for the twenty-third consecutive quarter since the Company’s IPO. The distribution was paid on July 3, 2018 to stockholders of record as of June 18, 2018.

 

Distributions are paid from taxable earnings and may include a 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.

 

Recent Developments

 

On July 10, 2018, the Company notified American Stock Transfer & Trust Company, LLC, the trustee for its 6.50% senior notes due 2020 (the “Senior Notes”), of its election to redeem the $30 million aggregate principal amount of the Senior Notes outstanding, and instructed the trustee to provide notice of such redemption to the holders of the Senior Notes in accordance with the terms of the indenture agreement under which the Senior Notes are issued. The Company expects the redemption to be completed on August 9, 2018. Following the redemption, none of the Senior Notes will remain outstanding, and they will be delisted from the NASDAQ Global Select Market.

 

On July 13, 2018, WhiteHorse Finance entered into an agreement governing the issuance of $30 million aggregate principal amount of senior unsecured notes due 2023 (the “2023 Notes”), to qualified institutional investors in a private placement offering. The 2023 Notes have a fixed interest rate of 6.00% payable semiannually and are due on August 7, 2023, unless redeemed, purchased or prepaid prior to such date by the Company or its affiliates in accordance with the terms of the 2023 Notes. The closing of the transaction occurred on August 7, 2018. WhiteHorse Finance will use the net proceeds from this offering, together with cash on hand, to redeem all of its Senior Notes, as discussed above.

 

On August 1, 2018, the Company’s stockholders approved the reduced asset coverage requirements applicable to business development companies. As a result, the Company’s asset coverage ratio requirements applicable to senior securities decreased from 200% to 150%, effective August 2, 2018.

 

Conference Call

 

WhiteHorse Finance will host a conference call to discuss its second quarter at 10:00 am ET on Wednesday, August 8, 2018. To access the teleconference, please dial 706-758-9224 (domestic and international) approximately 10 minutes before the teleconference’s scheduled start time and reference ID #2791007. 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 15, 2018. The teleconference replay can be accessed by dialing 404-537-3406 (domestic and international) and entering ID # 2791007. A webcast replay will also be available on the investor relations portion of the Company’s website at www.whitehorsefinance.com.

 

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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 $25 billion of capital under management(2) 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.

 

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

 

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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 any excise or other income taxes related to such net realized gains and losses. There were no associated refinancing costs in connection with the Company’s indebtedness and no excise or other income taxes related to net realized gains and losses for the quarters ended June 30, 2018 and June 30, 2017, respectively. Additionally, the Company did not recognize any capital gains incentive fees for the quarter ended June 30, 2017.

 

The following table provides a reconciliation of net investment income to core net investment income for the three months ended June 30, 2018 and June 30, 2017 (in thousands, except per share data):

 

   June 30, 2018   June 30, 2017 
   Amount  

 Per Share

Amounts

   Amount  

 Per Share

Amounts

 
Net investment income  $4,607   $0.224   $6,936   $0.378 
Net impact of costs associated with refinancing of indebtedness   -    -    -    - 
Accrual for capital gains incentive fee   2,191    0.107    -    - 
Excise tax expense related to net realized gains and losses   -    -    -    - 
Core net investment income  $6,798   $0.331   $6,936   $0.378 

 

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WhiteHorse Finance, Inc.

Consolidated Statements of Assets and Liabilities

(in thousands, except share and per share data)

 

   June 30, 2018   December 31, 2017 
   (Unaudited)     
Assets          
Investments, at fair value          
Non-controlled/non-affiliate company investments  $454,514   $404,434 
Non-controlled affiliate company investments   56,856    36,246 
Total investments, at fair value (amortized cost $499,563 and $448,522, respectively)   511,370    440,680 
Cash and cash equivalents   14,461    35,219 
Restricted cash and cash equivalents   4,092    3,717 
Interest receivable   5,356    4,947 
Receivables from investments sold   1,702    783 
Prepaid expenses and other receivables   1,486    185 
Total assets  $538,467   $485,531 
           
Liabilities          
Debt  $215,311   $182,122 
Distributions payable   7,289    7,289 
Management fees payable   8,682    7,848 
Accounts payable and accrued expenses   1,133    701 
Interest payable   659    527 
Advances received from unfunded credit facilities   112    92 
Total liabilities   233,186    198,579 
           
Commitments and contingencies          
           
Net assets          
Common stock, 20,531,948 shares issued and outstanding, par value $0.001 per share and 100,000,000 authorized   20    20 
Paid-in capital in excess of par   302,292    302,292 
Accumulated overdistributed net investment income   (8,177)   (6,784)
Accumulated net realized losses on investments   (661)   (734)
Accumulated net unrealized appreciation (depreciation) on investments   11,807    (7,842)
Total net assets   305,281    286,952 
Total liabilities and total net assets  $538,467   $485,531 
           
Number of shares outstanding   20,531,948    20,531,948 
Net asset value per share  $14.87   $13.98 

 

 

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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, 
   2018    2017   2018    2017 
Investment income                    
From non-controlled/non-affiliate company investments                    
Interest income  $13,265   $12,577   $27,028   $24,595 
Fee income   788    1,058    2,980    1,825 
From non-controlled affiliate company investments                    
Dividend income   601    650    1,251    1,440 
Total investment income   14,654    14,285    31,259    27,860 
                     
Expenses                    
Interest expense   2,801    2,559    5,366    5,003 
Base management fees   2,607    2,390    5,052    4,652 
Performance-based incentive fees   3,891    1,734    6,035    3,365 
Administrative service fees   175    158    350    292 
General and administrative expenses   573    508    1,271    1,090 
Total expenses   10,047    7,349    18,074    14,402 
Net investment income   4,607    6,936    13,185    13,458 
                     
Realized and unrealized gains (losses) on investments                    
Net realized gains                    
Non-controlled/non-affiliate company investments   73    -    73    23 
Net realized gains   73    -    73    23 
Net change in unrealized appreciation (depreciation)                    
Non-controlled/non-affiliate company investments   1,950    (2,294)   (961)   933 
Non-controlled affiliate company investments   12,424    2,633    20,610    2,490 
Net change in unrealized appreciation   14,374    339    19,649    3,423 
Net realized and unrealized gains on investments   14,447    339    19,722    3,446 
Net increase in net assets resulting from operations  $19,054   $7,275   $32,907   $16,904 
                     
Per Common Share Data                    
Basic and diluted earnings per common share  $0.93   $0.39   $1.60   $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
   20,531,948    18,341,967    20,531,948    18,323,034 

 

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WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited)

June 30, 2018

(in thousands)

 

Investment Type(1)  Spread Above
Index(2)
  Interest
Rate(3)
  Maturity
Date
  Principal/
Share
Amount
   Amortized
Cost
   Fair
Value(10)
   Fair Value
As A
Percentage
of Net
Assets
 
North America                             
Debt Investments                             
Advertising                             
Fluent, LLC                             
First Lien Secured Term Loan  L+ 7.00%  9.09%  03/27/23   12,344   $12,344   $12,344    4.04%
   (0.50% Floor)                          
Outcome Health                             
First Lien Secured Term Loan  L+ 9.50%  11.88%  12/22/21   10,189    9,523    8,624    2.82 
   (1.00% Floor)  (3.00% PIK)                       
             22,533    21,867    20,968    6.86 
Application Software                             
Intermedia Holdings, Inc.                             
Second Lien Secured Term Loan  L+ 9.50%  12.04%  02/03/25   18,000    17,702    17,919    5.87 
   (1.00% Floor)                          
Automotive Retail                             
Team Car Care Holdings, LLC                             
First Lien Secured Term Loan(11)  base rate+ 7.99%  10.11%  02/23/23   18,453    18,066    18,122    5.94 
   (1.00% Floor)                          
First Lien Secured Revolving Loan(7)  P+ 7.00%  12.00%  02/23/23   430    421    426    0.14 
   (1.00% Floor)                          
             18,883    18,487    18,548    6.08 
Broadcasting                             
Multicultural Radio Broadcasting, Inc.                             
First Lien Secured Term Loan  L+ 8.00%  10.09%  12/28/22   18,824    18,485    18,598    6.09 
   (1.00% Floor)                          
Rural Media Group, Inc.                             
First Lien Secured Term Loan  L+ 7.85%  10.21%  12/29/22   7,089    6,961    6,989    2.29 
   (1.00% Floor)                          
             25,913    25,446    25,587    8.38 
Cable & Satellite                             
Bulk Midco, LLC                             
First Lien Secured Term Loan  L+ 7.35%  9.67%  06/08/23   15,000    14,778    14,792    4.85 
   (1.00% Floor)                          
                              
Data Processing & Outsourced Services                             
FPT Operating Company, LLC/                             
TLabs Operating Company, LLC                             
First Lien Secured Term Loan  L+ 8.25%  10.23%  12/23/21   23,008    22,723    22,681    7.43 
   (1.00% Floor)                          
Department Stores                             
Mills Fleet Farm Group, LLC                             
Second Lien Secured Term Loan  L+ 9.75%  11.84%  02/26/23   7,146    7,048    7,146    2.34 
   (1.00% Floor)                          
Diversified Support Services                             
Account Control Technology Holdings, Inc.                             
First Lien Secured Term Loan  L+ 8.50%  11.11%  04/28/22   7,585    7,418    7,535    2.47 
   (1.00% Floor)                          
ImageOne Industries, LLC                             
First Lien Secured Term Loan  L+ 8.00%  10.09%  01/11/23   7,416    7,282    7,387    2.42 
   (1.00% Floor)                          
Sitel Worldwide Corporation                             
Second Lien Secured Term Loan  L+ 9.50%  11.88%  09/18/22   8,670    8,565    8,757    2.87 
   (1.00% Floor)                          
             23,671    23,265    23,679    7.76 
Environmental & Facilities Services                             
Montrose Environmental Group, Inc.                             
Second Lien Secured Term Loan  L+ 9.50%  11.86%  09/30/20   8,500    8,373    8,404    2.75 
   (1.00% Floor)                          
Food Retail                             
AG Kings Holdings, Inc.                             
First Lien Secured Term Loan  L+ 9.95%  12.29%  08/10/21   13,113    12,761    12,758    4.18 
   (1.00% Floor)                          

 

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WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited) - (continued)

June 30, 2018

(in thousands)

 

Investment Type(1)  Spread Above
Index(2)
  Interest
Rate(3)
  Maturity
Date
  Principal/
Share
Amount
   Amortized
Cost
   Fair
Value(10)
   Fair Value
As A
Percentage
of Net
Assets
 
Crews of California, Inc.                             
First Lien Secured Term Loan  L+ 11.00%  13.07%  11/20/19   16,508   $16,421   $16,343    5.35%
   (1.00% Floor)  (1.00% PIK)                       
First Lien Secured Revolving Loan  L+ 11.00%  13.07%  11/20/19   5,145    5,109    5,094    1.67 
   (1.00% Floor)  (1.00% PIK)                       
First Lien Secured Delayed Draw Loan  L+ 11.00%  13.07%  11/20/19   4,784    4,752    4,736    1.55 
   (1.00% Floor)  (1.00% PIK)                       
             39,550    39,043    38,931    12.75 
Health Care Facilities                             
Grupo HIMA San Pablo, Inc.                             
First Lien Secured Term Loan  L+ 9.00%  11.37%  05/31/19   14,250    14,250    11,229    3.68 
   (1.50% Floor)                          
Second Lien Secured Term Loan(8)  N/A  15.75%  07/31/18   1,028    1,024    103    0.03 
      (2.00% PIK)                       
             15,278    15,274    11,332    3.71 
Health Care Services                             
PMA Holdco, LLC                             
First Lien Secured Term Loan  L+ 7.50%  9.84%  06/28/23   15,063    14,744    14,743    4.83 
   (1.00% Floor)                          
Internet Retail                             
Clarus Commerce, LLC                             
First Lien Secured Term Loan  L+ 8.59%  10.69%  03/09/23   17,100    16,909    16,903    5.54 
   (1.00% Floor)                          
Internet Software & Services                             
London Trust Media Incorporated                             
First Lien Secured Term Loan  L+ 8.00%  10.36%  02/01/23   11,213    11,058    11,054    3.62 
   (1.00% Floor)                          
StackPath, LLC & Highwinds Capital, Inc.                             
Second Lien Secured Term Loan  L+ 9.50%  12.01%  02/02/24   18,000    17,640    17,726    5.81 
   (1.00% Floor)                          
             29,213    28,698    28,780    9.43 
Investment Banking & Brokerage                             
JVMC Holdings Corp. (f/k/a RJO Holdings Corp)                             
First Lien First Out Secured Term Loan  L+ 8.02%  10.11%  05/05/22   12,825    12,603    12,825    4.20 
   (1.00% Floor)                          
First Lien Last Out Secured Term Loan  L+ 12.00%  14.09%  05/05/22   4,750    4,668    4,750    1.56 
   (1.00% Floor)                          
             17,575    17,271    17,575    5.76 
IT Consulting & Other Services                             
AST-Applications Software Technology LLC                             
First Lien Secured Term Loan  L+ 9.00%  11.09%  01/10/23   4,192    4,118    4,067    1.33 
   (1.00% Floor)  (2.00% PIK)                       
Leisure Facilities                             
Planet Fit Indy 10 LLC                             
First Lien Incremental Term Loan  L+ 7.25%  9.58%  03/07/22   1,925    1,909    1,925    0.63 
   (1.00% Floor)                          
First Lien Initial Delayed Draw Loan  L+ 7.25%  9.56%  03/07/22   6,183    6,160    6,183    2.03 
   (1.00% Floor)                          
First Lien Initial Term Loan  L+ 7.25%  9.57%  03/07/22   131    130    131    0.04 
   (1.00% Floor)                          
Lift Brands, Inc.                             
First Lien Secured Term Loan  L+ 7.00%  9.09%  04/16/23   10,913    10,693    10,697    3.50 
   (1.00% Floor)                          
First Lien Secured Revolving Loan(7)  L+ 7.00%  9.09%  04/16/23   -    -    -    - 
   (1.00% Floor)                          
             19,152    18,892    18,936    6.20 
Oil & Gas Exploration & Production                             
Caelus Energy Alaska O3, LLC                             
Second Lien Secured Term Loan  L+ 7.50%  9.83%  04/15/20   13,000    12,945    11,794    3.86 
   (1.25% Floor)                          
Other Diversified Financial Services                             
Sigue Corporation(4)                             
Second Lien Secured Term Loan  L+ 12.00%  14.33%  12/27/18   25,000    24,951    24,000    7.86 
   (1.00% Floor)                          

 

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WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited) - (continued)

June 30, 2018

(in thousands)

 

Investment Type(1)  Spread Above
Index(2)
  Interest
Rate(3)
  Maturity
Date
  Principal/
Share
Amount
   Amortized
Cost
   Fair
Value(10)
   Fair Value
As A
Percentage
of Net
Assets
 
Packaged Foods & Meats                             
Lenny & Larry's, LLC                             
    First Lien Secured Term Loan  L+ 6.86%  8.93%  05/15/23   13,543   $13,279   $13,273    4.35%
   (1.00% Floor)                          
Research & Consulting Services                             
Nelson Worldwide, LLC                             
First Lien Secured Term Loan  L+ 8.00%  10.33%  01/09/23   17,666    17,266    17,290    5.66 
   (1.00% Floor)                          
First Lien Secured Revolving Loan(7)  L+ 8.00%  10.33%  01/09/23   1,234    1,206    1,210    0.40 
   (1.00% Floor)                          
             18,900    18,472    18,500    6.06 
Security & Alarm Services                             
SecurAmerica, LLC                             
First Lien Secured Term Loan  L+ 8.50%  10.81%  11/17/22   11,320    11,072    11,102    3.64 
   (1.00% Floor)                          
Specialized Finance                             
Golden Pear Funding III, LLC(5)                             
Second Lien Secured Term Loan  L+ 11.25%  13.61%  06/25/20   25,000    24,884    24,907    8.16 
   (1.00% Floor)                          
Second Lien Secured Revolving Loan(7)  L+ 11.25%  13.61%  06/25/20   -    -    2    - 
   (1.00% Floor)                          
Oasis Legal Finance, LLC(5)                             
Second Lien Secured Term Loan  L+ 10.75%  12.73%  03/09/22   20,000    19,732    20,000    6.55 
   (1.00% Floor)                          
             45,000    44,616    44,909    14.71 
Technology Hardware, Storage & Peripherals                             
Source Code Midco, LLC                             
First Lien Secured Term Loan  L+ 8.75%  11.11%  05/04/23   14,545    14,193    14,182    4.65 
   (1.00% Floor)                          
First Lien Secured Revolving Loan(7)  L+ 8.75%  11.09%  05/04/23   582    568    567    0.19 
   (1.00% Floor)                          
             15,127    14,761    14,749    4.84 
Trucking                             
Sunteck / TTS Holdings, LLC                             
Second Lien Secured Term Loan  L+ 9.00%  11.34%  06/15/22   3,500    3,456    3,500    1.15 
   (1.00% Floor)                          
Total Debt Investments            465,167    458,190    452,818    148.34 
                              
                              
Equity Investments                             
Advertising                             
Fluent, Inc. (f/k/a Cogint, Inc.)(4)(9)  N/A  N/A  12/08/25   187    560    457    0.15 
                              
Food Retail                             
Crews of California, Inc. Warrants (4)  N/A  N/A  12/31/24   -    -    8    - 
Nicholas & Associates, LLC Warrants(4)  N/A  N/A  12/31/24   3    -    153    0.05 
Pinnacle Management Group, LLC Warrants(4)  N/A  N/A  12/31/24   3    -    153    0.05 
RC3 Enterprises, LLC Warrants(4)  N/A  N/A  12/31/24   3    -    153    0.05 
             9    -    467    0.15 
                              
Health Care Services                             
PMA Holdco, LLC Warrants(4)  N/A  N/A  N/A   8    -    345    0.11 
                              
Other Diversified Financial Services                             
Aretec Group, Inc. (4)(5)(6)  N/A  N/A  N/A   536    20,693    37,363    12.24 
                              
RCS Creditor Trust Class B Units(4)(6)  N/A  N/A  N/A   143    -    535    0.18 
                              
SFS Global Holding Company Warrants(4)  N/A  N/A  N/A   -    -    -    - 
                              
Sigue Corporation Warrants(4)  N/A  N/A  N/A   6    -    327    0.11 
             685    20,693    38,225    12.53 

 

9 

 

 

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited) - (continued)

June 30, 2018

(in thousands)

 

Investment Type(1)  Spread Above
Index(2)
  Interest
Rate(3)
  Maturity
Date
  Principal/
Share
Amount
   Amortized
Cost
   Fair
Value(10)
   Fair Value
As A
Percentage
of Net
Assets
 
Specialized Finance                             
NMFC Senior Loan Program I LLC Units (4)(5)(6)  N/A  N/A  06/13/20   20,000   $20,120   $18,958    6.21%
                              
Trucking                             
Fox Rent A Car, Inc. Warrants(4)  N/A  N/A  N/A   -    -    100    0.03 
                              
Total Equity Investments            20,889    41,373    58,552    19.18 
                              
Total Investments            486,056   $499,563   $511,370    167.52%

 

(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, or the U.S. Prime Rate as published by the Wall Street Journal (“Prime” or “P”). The one, three and six-month LIBOR were 2.1%, 2.3% and 2.5%, respectively, as of June 30, 2018. The Prime was 5.0% as of June 30, 2018.

 

(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 81%, 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, 2018.

 

(8) The investment is on non-accrual status.

 

(9) The fair value of the investment was determined using observable inputs.

 

(10) Except as otherwise noted, the fair value of each investment was determined using significant unobservable inputs.

 

(11) 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.

 

10 

 

 

Contacts

 

WhiteHorse Finance, Inc.

Stuart Aronson, 212-506-0500

saronson@higwhitehorse.com

 

or

 

WhiteHorse Finance, Inc.

Edward J. Giordano, 305-379-2322

egiordano@higwhitehorse.com

 

or

 

Prosek Partners

Sean Silva, 646-493-9632

ssilva@prosek.com

 

Source: WhiteHorse Finance, Inc.

 

11 

 

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