UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form
Amendment No. 1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number:
(Exact Name of Registrant as Specified in its Charter)
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(State or Other Jurisdiction of | (I.R.S. Employer | |||
Incorporation or Organization) | Identification No.) |
(Address of Principal Executive Offices) | (Zip Code) |
(
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on Which | ||||
Title of Each Class |
| Trading Symbol(s) |
| Registered |
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ☐ | |
Non-accelerated filer ☐ | Smaller reporting company |
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
The aggregate market value of common stock held by non-affiliates of the registrant on June 30, 2024 based on the closing price on that date of $12.27 on the Nasdaq Global Select Market was approximately $
DOCUMENTS INCORPORATED BY REFERENCE
None.
EXPLANATORY NOTE
WhiteHorse Finance, Inc., a Delaware corporation (collectively, the “Company”, which may also be referred to as “we”, “us” or “our”), is filing this Amendment No. 1 on Form 10-K/A (the “Amendment”) to amend its original Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was originally filed with the Securities and Exchange Commission (“SEC”) on March 7, 2025 (the “Original Form 10-K”). As previously disclosed in Part I, Item 4 of the Company’s Form 10-Q for the fiscal quarter ended March 31, 2025, which was filed with the SEC on May 12, 2025, for the year ended December 31, 2024, it met the threshold to be an accelerated filer and did not correctly determine that fact. Based on this failure to correctly identify our filing status for 2024, we did not obtain or file an attestation report by Crowe LLP, our independent registered public accounting firm (“Crowe”), with respect to our internal control over financial reporting in the Original Form 10-K as required by Item 308(b) of Regulation S-K. The Amendment is being filed solely to:
· | amend the cover page of the Original Form 10-K to state that we are an accelerated filer; |
· | amend and restate Part II, Item 8 of the Original Form 10-K to include Crowe’s Report of Independent Registered Public Accounting Firm, which includes an opinion on the Company’s financial statements, as defined in their report, as of December 31, 2024 and for each of the years in the three-year period ended December 31, 2024 and an opinion on the Company’s internal control over financial reporting as of December 31, 2024; |
· | amend and restate Part II, Item 9A of the Original Form 10-K to update (i) management’s evaluation of disclosure controls and procedures in paragraph (a) to provide that, as of December 31, 2024, our disclosure controls and procedures were not effective, and (ii) management’s report on internal control over financial reporting in paragraph (b) to state that Crowe has issued a report on the effectiveness of our internal control over financial reporting; and |
· | file new Exhibits 31.1, 31.2, 32.1 and 32.2, certifications of our Chief Executive Officer and Chief Financial Officer, as exhibits to this Amendment under Item 15 of Part IV hereof, pursuant to Rule 13a-14(a) and (b) of the Securities Exchange Act of 1934, as amended, and file new consents issued by Crowe related to Exhibits 99.1 and 99.2. |
Except as described above, no other changes have been made to the Original Form 10-K. This Amendment does not reflect subsequent events that may have occurred after the original filing date of the Original Form 10-K or modify or update in any way disclosures made in the Original Form 10-K, except as required to reflect the revisions discussed above. Among other things, forward-looking statements made in the Original Form 10-K have not been revised to reflect events that occurred or facts that became known to us after filing of the Original Form 10-K, and such forward-looking statements should be read in their historical context. Furthermore, this Amendment should be read in conjunction with the Original Form 10-K and with our subsequent filings with the SEC.
2
Item 8. Consolidated Financial Statements and Supplementary Data
Index to Consolidated Financial Statements
4
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Shareholders and the Board of Directors
of WhiteHorse Finance, Inc.
Miami, Florida
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated statements of assets and liabilities, including the consolidated schedules of investments, of WhiteHorse Finance, Inc. (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, changes in net assets, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes and the consolidated financial highlights for each of the five years in the period ended December 31, 2024 (collectively referred to as the “financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations, the changes in its net assets and its cash flows for each of the years in the three-year period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework: (2013) issued by COSO.
Basis for Opinions
The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. These procedures include confirmation of investments owned as of December 31, 2024 and 2023, by correspondence with the custodian, loan agent, borrower and other auditing procedures where replies were not received. We believe that our audits provide a reasonable basis for our opinions.
5
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Valuation of Level 3 Investments
As described in Notes 1, 2, 4 and 5 to the consolidated financial statements, the Company invests in senior secured loans, including first lien and second lien facilities, and may make investments at other levels of an investee’s capital structure, including mezzanine loans or equity investments, and may receive warrants to purchase common stock in connection with its debt investments. With few exceptions, these investments are classified as Level 3 investments. Level 3 investments represent approximately $619.5 million of the $642.2 million of investments held as of December 31, 2024. Management determines the fair value of the Company’s Level 3 investments by applying the methodologies outlined in Note 5 to the consolidated financial statements, using significant unobservable inputs and assumptions. Determining the fair value of these investments requires management to make judgments about the valuation methodologies to apply (i.e., market approach or income approach) and significant unobservable inputs and assumptions including, among others, discount rates, market quotes, and exit multiples.
6
We identified the valuation of Level 3 investments as a critical audit matter given the significant judgments made by management to estimate the fair value of certain debt and equity positions. This required a high degree of auditor judgment and extensive audit effort, including the involvement of auditor employed valuation specialists, who possess specialized skill and knowledge, to evaluate the appropriateness of the valuation methodologies and significant unobservable inputs and assumptions.
Our audit procedures related to the valuation of Level 3 investments included, among others:
· | Obtaining an understanding, evaluating the design, and testing the operating effectiveness of controls over the Company’s investment valuation process, including those over the valuation methodologies and significant unobservable inputs and assumptions applied. |
· | Selecting a sample of investments and, with assistance of auditor employed valuation specialists, evaluating the appropriateness of the methodology applied and reasonableness of significant unobservable inputs and assumptions, including comparable company multiples and discount rates. In several instances we developed independent fair value estimates which we compared against management’s conclusion. |
· | Evaluating subsequent events, retrospective review, and other available information, considering whether this information corroborated or contradicted the Company’s conclusions. |
/s/ Crowe LLP
As a result of affiliated fund relationships, we have served as the Company’s auditor since 2006.
June 9, 2025
7
WhiteHorse Finance, Inc.
Consolidated Statements of Assets and Liabilities
(in thousands, except share and per share data)
| December 31, 2024 |
| December 31, 2023 | |||
Assets |
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Investments, at fair value |
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Non-controlled/non-affiliate company investments | $ | | $ | | ||
Non-controlled affiliate company investments | | | ||||
Controlled affiliate company investments | | | ||||
Total investments, at fair value (amortized cost $ | | | ||||
Cash and cash equivalents | | | ||||
Restricted cash and cash equivalents | | | ||||
Restricted foreign currency (cost of $ | | | ||||
Interest and dividend receivable | | | ||||
Amounts receivable on unsettled investment transactions | | | ||||
Escrow receivable | — | | ||||
Prepaid expenses and other receivables | | | ||||
Unrealized appreciation on foreign currency forward contracts | | — | ||||
Total assets | $ | | $ | | ||
Liabilities |
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Debt (net of unamortized debt issuance costs of $ | $ | | $ | | ||
Distributions payable | | | ||||
Management fees payable | | | ||||
Incentive fees payable | | | ||||
Amounts payable on unsettled investment transactions | | — | ||||
Interest payable | | | ||||
Accounts payable and accrued expenses | | | ||||
Advances received from unfunded credit facilities | | | ||||
Unrealized depreciation on foreign currency forward contracts | — | | ||||
Total liabilities | | | ||||
Commitments and contingencies (See Note 8) |
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Net assets |
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Common stock, | | | ||||
Paid-in capital in excess of par | | | ||||
Accumulated earnings (losses) | ( | ( | ||||
Total net assets | | | ||||
Total liabilities and total net assets | $ | | $ | | ||
Number of shares outstanding | | | ||||
Net asset value per share | $ | | $ | |
See notes to the consolidated financial statements
8
WhiteHorse Finance, Inc.
Consolidated Statements of Operations
(in thousands, except share and per share data)
Year ended December 31, | |||||||||
| 2024 | 2023 | 2022 | ||||||
Investment income |
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From non-controlled/non-affiliate company investments |
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Interest income | $ | | $ | | $ | | |||
Payment-in-kind income | | | | ||||||
Fee income | | | | ||||||
Dividend income | | | | ||||||
From non-controlled affiliate company investments | |||||||||
Interest income | | — | | ||||||
Payment-in-kind income | | | | ||||||
Dividend income | — | | | ||||||
From controlled affiliate company investments | |||||||||
Interest income | | | | ||||||
Payment-in-kind income | | | — | ||||||
Dividend income | | | | ||||||
Total investment income | | | | ||||||
Expenses |
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Interest expense | | | | ||||||
Base management fees | | | | ||||||
Performance-based incentive fees | | | | ||||||
Administrative service fees | | | | ||||||
General and administrative expenses | | | | ||||||
Total expenses | | | | ||||||
Net investment income before excise tax | | | | ||||||
Excise tax | | | | ||||||
Net investment income after excise tax | | | | ||||||
Realized and unrealized gains (losses) on investments and foreign currency transactions |
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Net realized gains (losses) |
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Non-controlled/non-affiliate company investments | ( | | ( | ||||||
Non-controlled affiliate company investments | — | ( | | ||||||
Foreign currency transactions | ( | | ( | ||||||
Foreign currency forward contracts | | | — | ||||||
Net realized gains (losses) | ( | | ( | ||||||
Net change in unrealized appreciation (depreciation) |
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Non-controlled/non-affiliate company investments | | ( | ( | ||||||
Non-controlled affiliate company investments | ( | ( | ( | ||||||
Controlled affiliate company investments | ( | ( | ( | ||||||
Translation of assets and liabilities in foreign currencies | | ( | | ||||||
Foreign currency forward contracts | | ( | ( | ||||||
Net change in unrealized appreciation (depreciation) | ( | ( | ( | ||||||
Net realized and unrealized gains (losses) on investments and foreign currency transactions | ( | ( | ( | ||||||
Net increase (decrease) in net assets resulting from operations | $ | | $ | | $ | | |||
Per Common Share Data | |||||||||
Basic and diluted earnings (losses) per common share | $ | | $ | | $ | | |||
Dividends and distributions declared per common share | $ | | $ | | $ | | |||
Basic and diluted weighted average common shares outstanding | | | | ||||||
See notes to the consolidated financial statements
9
WhiteHorse Finance, Inc.
Consolidated Statements of Changes in Net Assets
(in thousands, except share and per share data)
Common Stock | ||||||||||||||
| Shares |
| Par amount |
| Paid-in Capital in Excess of Par |
| Accumulated Earnings (Losses) |
| Total Net Assets | |||||
Balance as of December 31, 2021 |
| | $ | | $ | | $ | | $ | | ||||
Stock issued in connection with public offering | — | — | — | — | — | |||||||||
Stock issued in connection with at-the-market offering |
| | — | | — | | ||||||||
Stock issued in connection with dividend reinvestment plan |
| | — | | — | | ||||||||
Net increase in net assets resulting from operations: |
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Net investment income after excise tax |
| — | — | — | | | ||||||||
Net realized gains (losses) on investments and foreign currency transactions |
| — | — | — | ( | ( | ||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions |
| — | — | — | ( | ( | ||||||||
Distributions declared |
| — | — | — | ( | ( | ||||||||
Tax reclassification of stockholders’ equity |
| — | — | ( | | — | ||||||||
Balance as of December 31, 2022 |
| | $ | | $ | | $ | ( | $ | | ||||
Net increase in net assets resulting from operations: |
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Net investment income after excise tax |
| — | — | — | | | ||||||||
Net realized gains (losses) on investments and foreign currency transactions |
| — | — | — | | | ||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions |
| — | — | — | ( | ( | ||||||||
Distributions declared |
| — | — | — | ( | ( | ||||||||
Tax reclassification of stockholders’ equity |
| — | — | ( | | — | ||||||||
Balance as of December 31, 2023 |
| | $ | | $ | | $ | ( | $ | | ||||
Net increase in net assets resulting from operations: |
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Net investment income after excise tax |
| — | — | — | | | ||||||||
Net realized gains (losses) on investments and foreign currency transactions |
| — | — | — | ( | ( | ||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions |
| — | — | — | ( | ( | ||||||||
Distributions declared |
| — | — | — | ( | ( | ||||||||
Tax reclassification of stockholders’ equity |
| — | — | ( | | — | ||||||||
Balance as of December 31, 2024 |
| | $ | | $ | | $ | ( | $ | | ||||
See notes to the consolidated financial statements
10
WhiteHorse Finance, Inc.
Consolidated Statements of Cash Flows
(in thousands)
Year ended December 31, | |||||||||
| 2024 |
| 2023 |
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| 2022 | |||
Cash flows from operating activities |
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Net increase in net assets resulting from operations | $ | | $ | | $ | | |||
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by / (used in) operating activities: |
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Payment-in-kind income |
| ( |
| ( |
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Net realized (gains) losses on investments |
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Net unrealized (appreciation) depreciation on investments |
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Net unrealized (appreciation) depreciation on translation of assets and liabilities in foreign currencies |
| ( |
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Net unrealized (appreciation) depreciation on foreign currency forward contracts | ( |
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Accretion of discount |
| ( |
| ( |
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Amortization of deferred financing costs |
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Acquisition of investments |
| ( |
| ( |
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Proceeds from principal payments and sales of portfolio investments |
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Proceeds from sales of portfolio investments to STRS JV |
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Net changes in operating assets and liabilities: |
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Interest and dividend receivable |
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| ( |
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Escrow receivable | — |
| — |
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Prepaid expenses and other receivables |
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| ( |
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Amounts receivable on unsettled investment transactions |
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| ( |
| ( | |||
Amounts payable on unsettled investment transactions |
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Management fees payable |
| ( |
| ( |
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Incentive fees payable |
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Accounts payable and accrued expenses |
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Interest payable |
| ( |
| ( |
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Advances received from unfunded credit facilities |
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Net cash provided by / (used in) operating activities |
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Cash flows from financing activities |
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Proceeds from notes issued |
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Proceeds from issuance of common stock, net of offering costs | — |
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Borrowings |
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Repayments of debt |
| ( |
| ( |
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Deferred financing costs |
| — |
| ( |
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Distributions paid to common stockholders, net of distributions reinvested |
| ( |
| ( |
| ( | |||
Net cash provided by / (used in) financing activities |
| ( |
| ( |
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Effect of exchange rate changes on cash |
| ( |
| ( |
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Net change in cash, cash equivalents and restricted cash |
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Cash, cash equivalents and restricted cash at beginning of period |
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Cash, cash equivalents and restricted cash at end of period | $ | | $ | | $ | | |||
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Supplemental and non-cash disclosure of cash flow information: |
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Interest paid | $ | | $ | | $ | | |||
Taxes, including excise tax, paid during the year |
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Supplemental noncash disclosures: |
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Distributions declared | $ | | $ | | $ | | |||
Distributions reinvested |
| — |
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Non-cash exchanges of investments | — |
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See notes to the consolidated financial statements
11
WhiteHorse Finance, Inc.
Consolidated Statements of Cash Flows
(in thousands)
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated statements of assets and liabilities that sum to the total of the same amounts presented in the consolidated statements of cash flows:
December 31, | |||||||||
| 2024 |
| 2023 |
| 2022 | ||||
Cash and cash equivalents | $ | | $ | | $ | | |||
Restricted cash and cash equivalents |
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Restricted foreign currency | | | | ||||||
Total cash and cash equivalents, restricted cash and cash equivalents and restricted foreign currency presented in consolidated statements of cash flows | $ | | $ | | $ | | |||
See notes to the consolidated financial statements
12
Issuer
Investment Type(1)
Floor
Reference Rate(2)
Spread
Above
Index
Interest
Rate(3)
Acquisition
Date(10)
Maturity
Date
Principal/
Share
Amount
Amortized
Cost
Fair
Value(11)
Fair Value
As A
Percentage
of Net
Assets
Debt Investments
Advertising
$
$
%
—
—
—
—
—
—
—
—
Air Freight & Logistics
Application Software
—
Broadcasting
—
—
—
Broadline Retail
Building Products
See notes to the consolidated financial statements
13
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments
December 31, 2024
(in thousands)
Issuer
Investment Type(1)
Floor
Reference Rate(2)
Spread
Above
Index
Interest
Rate(3)
Acquisition
Date(10)
Maturity
Date
Principal/
Share
Amount
Amortized
Cost
Fair
Value(11)
Fair Value
As A
Percentage
of Net
Assets
Commodity Chemicals
$
$
%
Construction & Engineering
—
—
—
—
Construction Materials
Data Processing & Outsourced Services
Distributors
Diversified Chemicals
N/A
N/A
Diversified Support Services
Education Services
—
—
(
—
Electric Utilities
Health Care Facilities
See notes to the consolidated financial statements
14
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments
December 31, 2024
(in thousands)
Issuer
Investment Type(1)
Floor
Reference Rate(2)
Spread
Above
Index
Interest
Rate(3)
Acquisition
Date(10)
Maturity
Date
Principal/
Share
Amount
Amortized
Cost
Fair
Value(11)
Fair Value
As A
Percentage
of Net
Assets
Health Care Services
$
$
%
—
—
—
Health Care Supplies
Heavy Electrical Equipment
Home Furnishings
—
—
—
Household Appliances
Household Products
Industrial Machinery & Supplies & Components
—
—
—
Integrated Telecommunication Services
See notes to the consolidated financial statements
15
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments
December 31, 2024
(in thousands)
Issuer
Investment Type(1)
Floor
Reference Rate(2)
Spread
Above
Index
Interest
Rate(3)
Acquisition
Date(10)
Maturity
Date
Principal/
Share
Amount
Amortized
Cost
Fair
Value(11)
Fair Value
As A
Percentage
of Net
Assets
Interactive Media & Services
—
—
—
Leisure Facilities
$
$
%
N/A
N/A
N/A
N/A
N/A
Leisure Products
—
—
—
—
—
—
—
—
—
—
—
—
—
Life Sciences Tools & Services
Packaged Foods & Meats
—
Paper Products
Real Estate Services
See notes to the consolidated financial statements
16
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments
December 31, 2024
(in thousands)
Issuer
Investment Type(1)
Floor
Reference Rate(2)
Spread
Above
Index
Interest
Rate(3)
Acquisition
Date(10)
Maturity
Date
Principal/
Share
Amount
Amortized
Cost
Fair
Value(11)
Fair Value
As A
Percentage
of Net
Assets
Research & Consulting Services
—
—
—
Security & Alarm Services
Specialized Consumer Services
$
$
%
—
—
—
Specialized Finance
N/A
N/A
Systems Software
N/A
N/A
N/A
N/A
—
—
—
—
—
—
—
Technology Hardware, Storage & Peripherals
Transaction & Payment Processing Services
—
—
(
—
—
—
—
—
Total Debt Investments
$
$
%
Equity Investments(27)
Advertising
N/A
N/A
N/A
N/A
N/A
$
$
%
N/A
N/A
N/A
N/A
N/A
—
Air Freight & Logistics
See notes to the consolidated financial statements
17
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments
December 31, 2024
(in thousands)
Issuer
Investment Type(1)
Floor
Reference Rate(2)
Spread
Above
Index
Interest
Rate(3)
Acquisition
Date(10)
Maturity
Date
Principal/
Share
Amount
Amortized
Cost
Fair
Value(11)
Fair Value
As A
Percentage
of Net
Assets
N/A
N/A
N/A
N/A
N/A
—
—
—
—
Broadline Retail
N/A
N/A
N/A
Building Products
N/A
N/A
N/A
N/A
N/A
—
—
—
—
Construction & Engineering
N/A
N/A
N/A
N/A
N/A
Diversified Chemicals
N/A
N/A
N/A
N/A
N/A
—
$
—
$
—
—
%
N/A
N/A
N/A
—
Diversified Support Services
N/A
N/A
N/A
N/A
N/A
Education Services
N/A
N/A
N/A
N/A
N/A
—
N/A
N/A
N/A
—
—
—
Environmental & Facilities Services
N/A
N/A
N/A
N/A
N/A
Food Distributors
N/A
N/A
N/A
N/A
N/A
Household Appliances
N/A
N/A
N/A
N/A
N/A
Industrial Machinery & Supplies & Components
N/A
N/A
N/A
N/A
N/A
Interactive Media & Services
N/A
N/A
N/A
N/A
N/A
IT Consulting & Other Services
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
—
Leisure Facilities
N/A
N/A
N/A
N/A
N/A
—
—
—
—
See notes to the consolidated financial statements
18
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments
December 31, 2024
(in thousands)
Issuer |
| Investment Type(1) |
| Floor |
| Reference Rate(2) |
| Spread |
| Interest |
| Acquisition |
| Maturity |
| Principal/ |
| Amortized |
| Fair |
| Fair Value |
| ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
N/A | N/A | N/A | N/A | N/A | | | | | |||||||||||||||||
N/A | N/A | N/A | N/A | N/A | | | | — | |||||||||||||||||
| | | |||||||||||||||||||||||
Leisure Products | |||||||||||||||||||||||||
N/A | N/A | N/A | N/A | — | — | — | — | ||||||||||||||||||
N/A | N/A | N/A | N/A | N/A | | — | — | — | |||||||||||||||||
N/A | N/A | N/A | | | — | — | |||||||||||||||||||
N/A | N/A | N/A | N/A | N/A | | | — | — | |||||||||||||||||
| — | — | |||||||||||||||||||||||
Paper & Plastic Packaging Products & Materials | |||||||||||||||||||||||||
N/A | N/A | N/A | N/A | N/A | | $ | | $ | — | — | % | ||||||||||||||
| — | — | |||||||||||||||||||||||
Real Estate Services | |||||||||||||||||||||||||
N/A | N/A | N/A | | | | | |||||||||||||||||||
| | | |||||||||||||||||||||||
Research & Consulting Services | |||||||||||||||||||||||||
N/A | N/A | N/A | N/A | N/A | | | | | |||||||||||||||||
| | | |||||||||||||||||||||||
Specialized Consumer Services | |||||||||||||||||||||||||
N/A | N/A | N/A | | | | | |||||||||||||||||||
N/A | N/A | N/A | N/A | N/A | | | | — | |||||||||||||||||
| | | |||||||||||||||||||||||
Specialized Finance | |||||||||||||||||||||||||
N/A | N/A | N/A | N/A | N/A | | | | | |||||||||||||||||
| | | |||||||||||||||||||||||
Systems Software | |||||||||||||||||||||||||
N/A | N/A | N/A | N/A | N/A | | — | — | — | |||||||||||||||||
N/A | N/A | N/A | N/A | N/A | | | | | |||||||||||||||||
| | | |||||||||||||||||||||||
Total Equity Investments | $ | | $ | | | % | |||||||||||||||||||
Total Investments | $ | | $ | | | % | |||||||||||||||||||
Money market funds (included in cash and cash equivalents and restricted cash and cash equivalents) | |||||||||||||||||||||||||
Goldman Sachs Money Market Fund (CUSIP: 38141W315)(16) |
|
|
|
|
|
|
| $ | | $ | | | % | ||||||||||||
Invesco Treasury Money Market Fund (CUSIP: X9USDINVE)(16) |
|
|
|
|
|
|
| | | | |||||||||||||||
See notes to the consolidated financial statements
19
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments
December 31, 2024
(in thousands)
Issuer |
| Investment Type(1) |
| Floor |
| Reference Rate(2) |
| Spread |
| Interest |
| Acquisition |
| Maturity |
| Principal/ |
| Amortized |
| Fair |
| Fair Value |
| ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Total Money Market Funds | | | | ||||||||||||||||||||||
Total investments and money market funds | $ | | $ | | | % | |||||||||||||||||||
Forward Currency Contracts
Counterparty |
| Currency to be sold |
| Currency to be purchased |
| Settlement date |
| Unrealized |
| Unrealized | ||||||
Morgan Stanley | C$ | CAD | $ | USD | 2/4/25 | $ | | $ | — | |||||||
Total | $ | | $ | — | ||||||||||||
| (1) | Except as otherwise noted, all investments are non-controlled/non-affiliate investments as defined by the Investment Company Act of 1940, as amended (the “1940 Act”), provide collateral for the Company’s credit facility, and are domiciled in the United States. |
| (2) | The investments bear interest at a rate that may be determined by reference to the Secured Overnight Financing Rate (“SOFR”), the Canadian Overnight Repo Rate Average (“CORRA”), the Sterling Overnight Index Average (“SONIA”), or the U.S. Prime Rate (“Prime”), all of which may reset monthly, quarterly or semiannually. |
| (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 |
| (6) | Investment is a non-controlled/affiliate investment as defined by the 1940 Act. See Note 4. |
| (7) | The investment has an unfunded commitment in addition to any amounts presented in the consolidated schedule of investments as of December 31, 2024. See Note 8. |
| (8) | Preferred equity investment is a non-income producing security. |
| (9) | Security is perpetual with no defined maturity date. |
| (10) | Except as otherwise noted, all of the Company’s portfolio company investments, which as of the date of the consolidated schedule of investments represented |
| (11) | The fair value of each investment was determined using significant unobservable inputs. See Note 5. |
| (12) | The investment was comprised of two contracts, which were indexed to Prime and a different base rate, SOFR, SONIA or CORRA. |
| (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. See Note 4. |
| (15) | Investment is structured as a unitranche loan in which the Company may receive additional interest on its “last out” tranche of the portfolio company’s senior term debt, which was previously syndicated into “first out” and “last out” tranches, whereby the “first out” tranche will have priority as to the “last out” tranche with respect to payments of principal, interest and any other amounts due thereunder. |
See notes to the consolidated financial statements
20
WhiteHorse Finance, Inc.
Consolidated Schedule of Investments
December 31, 2024
(in thousands)
| (16) | The rate shown is the annualized seven-day yield as of December 31, 2024. |
| (17) | The investment is on non-accrual status. |
| (18) | 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. |
| (19) | On January 24, 2022, as part of a restructuring agreement between the Company and PlayMonster LLC, the Company’s first lien secured term loan and delayed draw loan investments to PlayMonster LLC were converted into a new first lien secured term loan, preferred stock and common stock of Playmonster Group LLC. See Note 4. |
| (20) | In March 2023, as a result of a restructuring agreement between the Company and American Crafts, LC, the Company’s investments are controlled affiliate investments, as defined by the 1940 Act. See Note 4. |
| (21) | In March 2023, as part of a restructuring agreement between the Company and Sklar Holdings, Inc (d/b/a Starco), the Company’s first lien secured term loan investment was converted into a new second lien secured term loan to Chase Products Co. (f/k/a Starco) and preferred units and common units of Pressurized Holdings, LLC (f/k/a Starco). See Note 4. |
| (22) | In January 2024, as part of a restructuring agreement between the Company and Arcstor Midco, LLC (d/b/a Arcserve (USA), LLC), the Company’s first lien secured term loan and priority first lien delayed draw loan investments in Arcstor Midco, LLC (d/b/a Arcserve (USA), LLC), converted into a new first lien secured delayed draw loan and unsecured notes in Arcserve Cayman Opco LP (d/b/a Arcserve (USA), LLC) and common equity of Arcserve Cayman GP LLC (d/b/a Arcserve (USA), LLC), and Arcserve Cayman Topco LP (d/b/a Arcserve (USA), LLC). See Note 4. |
| (23) | As part of the restructuring agreement between the Company and Arcstor Midco, LLC (d/b/a Arcserve (USA), LLC), fair value on the first lien secured delayed draw loan includes a preferred return that is earned on capital funded. |
| (24) | In September 2024, as part of a restructuring agreement between the Company and Honors Holdings, LLC (d/b/a Orange Theory), the Company’s first lien secured term loan, delayed draw loan and revolver investments to Honors Holdings, LLC (d/b/a Orange Theory) were converted into a new first lien secured term loan of Camarillo Fitness Holdings, LLC (f/k/a Honors Holdings, LLC) and common equity of H.I.G. Camarillo, L.P. (f/k/a Honors Holdings, LLC). See Note 4. |
| (25) | The issuer is domiciled in Canada. |
| (26) | The issuer is domiciled in Cayman Islands. |
| (27) | Ownership of certain equity investments may occur through a holding company or partnership. |
See notes to the consolidated financial statements
21
WHITEHORSE FINANCE, INC.
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Issuer
Investment Type(1)
Floor
Reference Rate(2)
Spread
Above
Index
Interest
Rate(3)
Acquisition
Date(10)
Maturity
Date
Principal/
Share
Amount
Amortized
Cost
Fair
Value(11)
Fair Value
As A
Percentage
of Net
Assets
Debt Investments
Air Freight & Logistics
$
$
%
—
—
—
Application Software
Automotive Retail
Broadcasting
—
—
(
—
Broadline Retail
Building Products
Commodity Chemicals
Construction & Engineering
—
—
Construction Materials
See notes to the consolidated financial statements
22
WHITEHORSE FINANCE, INC.
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Issuer
Investment Type(1)
Floor
Reference Rate(2)
Spread
Above
Index
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
$
$
%
Distributors
—
—
—
—
—
—
—
—
Diversified Chemicals
N/A
N/A
Diversified Support Services
Education Services
—
—
(
—
N/A
N/A
Electric Utilities
Environmental & Facilities Services
—
—
—
—
Health Care Facilities
—
—
(
—
Health Care Services
See notes to the consolidated financial statements
23
WHITEHORSE FINANCE, INC.
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Issuer
Investment Type(1)
Floor
Reference Rate(2)
Spread
Above
Index
Interest
Rate(3)
Acquisition
Date(10)
Maturity
Date
Principal/
Share
Amount
Amortized
Cost
Fair
Value(11)
Fair Value
As A
Percentage
of Net
Assets
Health Care Supplies
$
$
%
Heavy Electrical Equipment
Home Furnishings
—
—
—
Household Appliances
Household Products
—
—
(
—
Industrial Machinery & Supplies & Components
Integrated Telecommunication Services
Investment Banking & Brokerage
IT Consulting & Other Services
Leisure Facilities
N/A
N/A
N/A
N/A
N/A
See notes to the consolidated financial statements
24
WHITEHORSE FINANCE, INC.
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Issuer
Investment Type(1)
Floor
Reference Rate(2)
Spread
Above
Index
Interest
Rate(3)
Acquisition
Date(10)
Maturity
Date
Principal/
Share
Amount
Amortized
Cost
Fair
Value(11)
Fair Value
As A
Percentage
of Net
Assets
Leisure Products
$
$
%
—
—
—
—
Life Sciences Tools & Services
Office Services & Supplies
Real Estate Services
Research & Consulting Services
—
—
—
—
—
—
—
—
—
—
(
—
Specialized Consumer Services
—
—
—
1.00%
Specialized Finance
N/A
N/A
Systems Software
1.00%
See notes to the consolidated financial statements
25
WHITEHORSE FINANCE, INC.
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Issuer |
| Investment Type(1) |
| Floor |
| Reference Rate(2) |
| Spread |
| Interest |
| Acquisition |
| Maturity |
| Principal/ |
| Amortized |
| Fair |
| Fair Value |
| ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Technology Hardware, Storage & Peripherals | |||||||||||||||||||||||||
| $ | | $ | | | % | |||||||||||||||||||
1.00% | | | | | |||||||||||||||||||||
| | | |||||||||||||||||||||||
Wireless Telecommunication Services | |||||||||||||||||||||||||
| | | | ||||||||||||||||||||||
| | | | ||||||||||||||||||||||
| | | |||||||||||||||||||||||
Total Debt Investments | $ | | $ | | | % | |||||||||||||||||||
Equity Investments(22) | |||||||||||||||||||||||||
Advertising | |||||||||||||||||||||||||
N/A | N/A | N/A | N/A | N/A | | $ | | $ | | | % | ||||||||||||||
N/A | N/A | N/A | N/A | N/A | | | | — | |||||||||||||||||
| | | |||||||||||||||||||||||
Air Freight & Logistics | |||||||||||||||||||||||||
N/A | N/A | N/A | N/A | N/A | | | — | — | |||||||||||||||||
| — | — | |||||||||||||||||||||||
Broadline Retail | |||||||||||||||||||||||||
N/A | N/A | N/A | | | | | |||||||||||||||||||
| | | |||||||||||||||||||||||
Building Products | |||||||||||||||||||||||||
N/A | N/A | N/A | N/A | N/A | | | | | |||||||||||||||||
| | | |||||||||||||||||||||||
Construction & Engineering | |||||||||||||||||||||||||
N/A | N/A | N/A | N/A | N/A | | | | | |||||||||||||||||
| | | |||||||||||||||||||||||
Diversified Chemicals | |||||||||||||||||||||||||
N/A | N/A | N/A | N/A | N/A | — | — | — | — | |||||||||||||||||
N/A | N/A | N/A | N/A | — | | | | ||||||||||||||||||
| | | |||||||||||||||||||||||
Diversified Financial Services | |||||||||||||||||||||||||
N/A | N/A | N/A | N/A | — | — | — | — | ||||||||||||||||||
N/A | N/A | N/A | N/A | | | | | ||||||||||||||||||
| | | |||||||||||||||||||||||
Diversified Support Services | |||||||||||||||||||||||||
N/A | N/A | N/A | N/A | N/A | | | | | |||||||||||||||||
| | | |||||||||||||||||||||||
Education Services | |||||||||||||||||||||||||
N/A | N/A | N/A | | | | — | |||||||||||||||||||
| | — | |||||||||||||||||||||||
Environmental & Facilities Services | |||||||||||||||||||||||||
N/A | N/A | N/A | N/A | N/A | | | | | |||||||||||||||||
| | | |||||||||||||||||||||||
See notes to the consolidated financial statements
26
WHITEHORSE FINANCE, INC.
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Issuer
Investment Type(1)
Floor
Reference Rate(2)
Spread
Above
Index
Interest
Rate(3)
Acquisition
Date(10)
Maturity
Date
Principal/
Share
Amount
Amortized
Cost
Fair
Value(11)
Fair Value
As A
Percentage
of Net
Assets
Household Appliances
N/A
N/A
N/A
N/A
N/A
$
$
%
Industrial Machinery & Supplies & Components
N/A
N/A
N/A
N/A
N/A
Interactive Media & Services
N/A
N/A
N/A
N/A
N/A
IT Consulting & Other Services
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
—
Leisure Facilities
N/A
N/A
N/A
N/A
N/A
—
N/A
N/A
N/A
N/A
N/A
—
—
Leisure Products
N/A
N/A
N/A
—
—
N/A
N/A
N/A
N/A
N/A
—
—
N/A
N/A
N/A
N/A
—
—
—
—
N/A
N/A
N/A
N/A
N/A
—
—
—
—
—
Paper & Plastic Packaging Products & Materials
N/A
N/A
N/A
N/A
N/A
Real Estate Services
N/A
N/A
N/A
Specialized Consumer Services
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Research & Consulting Services
N/A
N/A
N/A
N/A
N/A
Specialized Finance
N/A
N/A
N/A
N/A
N/A
Total Equity Investments
$
$
%
Total Investments
$
$
%
See notes to the consolidated financial statements
27
WHITEHORSE FINANCE, INC.
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
Forward Currency Contracts
Counterparty |
| Currency to be sold |
| Currency to be purchased |
| Settlement date |
| Unrealized |
| Unrealized | ||||||
Morgan Stanley | C$ | CAD | $ | USD | 2/7/24 | $ | — | $ | ( | |||||||
Total | $ | — | $ | ( | ||||||||||||
| (1) | Except as otherwise noted, all investments are non-controlled/non-affiliate investments as defined by the Investment Company Act of 1940, as amended (the “1940 Act”), and provide collateral for the Company’s credit facility. |
| (2) | The investments bear interest at a rate that may be determined by reference to the Secured Overnight Financing Rate (“SOFR” or “S”), the Canadian Dollar Offered Rate (“CDOR” or “C”), the Sterling Overnight Index Average (“SONIA”), or the U.S. Prime Rate (“Prime” or “P”) which may reset monthly, quarterly or semiannually. |
| (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 |
| (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 December 31, 2023. See Note 8. |
| (8) | Preferred equity investment is a non-income producing security. |
| (9) | Security is perpetual with no defined maturity date. |
| (10) | Except as otherwise noted, all of the Company’s portfolio company investments, which as of the date of the consolidated schedule of investments represented |
| (11) | The fair value of each investment was determined using significant unobservable inputs. See Note 5. |
| (12) | The investment was comprised of two contracts, which were indexed to P and a different base rate, SOFR, SONIA or CDOR. |
| (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. See Note 4. |
| (15) | Investment is structured as a unitranche loan in which the Company may receive additional interest on its “last out” tranche of the portfolio company’s senior term debt, which was previously syndicated into “first out” and “last out” tranches, whereby the “first out” tranche will have priority as to the “last out” tranche with respect to payments of principal, interest and any other amounts due thereunder. |
| (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 |
| (17) | The investment is on non-accrual status. |
| (18) | 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. |
| (19) | On January 24, 2022, as part of a restructuring agreement between the Company and PlayMonster LLC, the Company’s first lien secured term loan and delayed draw loan investments to PlayMonster LLC were converted into a new first lien secured term loan, preferred stock and common stock of Playmonster Group LLC. See Note 4. |
| (20) | In March 2023, as a result of a restructuring agreement between the Company and American Crafts, LC, the Company’s investments are controlled affiliate investments, as defined by the 1940 Act. See Note 4. |
See notes to the consolidated financial statements
28
WHITEHORSE FINANCE, INC.
Consolidated Schedule of Investments
December 31, 2023
(in thousands)
| (21) | In March 2023, as part of a restructuring agreement between the Company and Sklar Holdings, Inc (d/b/a Starco), the Company’s first lien secured term loan investment was converted into a new second lien secured term loan to Chase Products Co. (f/k/a Starco) and preferred units and common units of Pressurized Holdings, LLC (f/k/a Starco). See Note 4. |
| (22) | Ownership of certain equity investments may occur through a holding company or partnership. |
| (23) | The issuer is domiciled in Canada. |
See notes to the consolidated financial statements
29
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
NOTE 1 – ORGANIZATION
WhiteHorse Finance, Inc. (“WhiteHorse Finance” and, together with its subsidiaries, the “Company”) is an externally managed, non-diversified, closed-end management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for tax purposes, WhiteHorse Finance elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). WhiteHorse Finance’s common stock trades on the Nasdaq Global Select Market under the symbol “WHF.”
The Company’s investment objective is to generate attractive risk-adjusted returns primarily by originating and investing in senior secured loans, including first lien and second lien facilities, to performing lower middle market companies across a broad range of industries that typically are based on a floating interest such as SOFR plus a spread and typically have a term of to
WhiteHorse Finance’s investment activities are managed by H.I.G. WhiteHorse Advisers, LLC (“WhiteHorse Advisers” or the “Investment Adviser”). H.I.G. WhiteHorse Administration, LLC (“WhiteHorse Administration” or the “Administrator”) provides administrative services necessary for the Company to operate.
Engaging in commodity interest transactions such as swap transactions or futures contracts for the Company may cause WhiteHorse Advisers to fall within the definition of “commodity pool operator” under the Commodity Exchange Act (the “CEA”) and related regulations promulgated by the U.S. Commodity Futures Trading Commission (the “CFTC”). On January 23, 2020, WhiteHorse Advisers claimed an exclusion from the definition of the term “commodity pool operator” under the CEA and the CFTC regulations in connection with its management of the Company (the “Exclusion”) and, therefore, WhiteHorse Advisers is not subject to CFTC registration or regulation under the CEA as a commodity pool operator with respect to its management of the Company. WhiteHorse Advisers has affirmed the Exclusion on January 14, 2025 and intends to continue to affirm the Exclusion on an annual basis.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation: The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of WhiteHorse Finance and its wholly owned subsidiaries, WhiteHorse Finance Credit I, LLC (“WhiteHorse Credit”), and its subsidiary WhiteHorse Finance (CA), LLC (“WhiteHorse California”), WHF PMA Holdco Blocker, LLC, WHF American Craft Blocker, LLC, WhiteHorse RCKC Holdings, LLC, WhiteHorse Finance Holdings, LLC and WhiteHorse Finance CLO I, LLC. The Company meets the definition of an investment company under Accounting Standards Codification (“ASC”) Topic 946, Financial Services - Investment Companies, and therefore applies the accounting and reporting guidance discussed therein to its consolidated financial statements. The classifications included in the consolidated schedule of investments represent, in management’s opinion, as to the most meaningful presentation of the Company’s investment portfolio. All significant intercompany balances and transactions have been eliminated.
Additionally, the accompanying consolidated financial statements and related financial information have been prepared pursuant to the requirements for reporting on Form 10-K and Articles 6, 10 and 12 of Regulation S-X. In the opinion of management, the consolidated financial statements reflect all adjustments, consisting solely of normal recurring accruals considered necessary for the fair presentation of financial results as of and for the periods presented.
Principles of Consolidation: Under the investment company rules and regulations pursuant to ASC Topic 946, WhiteHorse Finance is precluded from consolidating any entity other than another investment company. As provided under ASC Topic 946, WhiteHorse Finance generally consolidates any investment company when it owns
30
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
partners’ or members’ capital or equity units. The Company does not consolidate its investment in STRS JV or any of its controlled affiliate investments. See further description in Note 4.
Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the financial statements. Actual results could differ from those estimates.
Fair Value of Financial Instruments: The Company determines the fair value of its financial instruments in accordance with ASC Topic 820, Fair Value Measurements and Disclosures. ASC Topic 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC Topic 820, the Company has categorized its financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument. Therefore, when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at the measurement date.
The Company values its investments in accordance with the 1940 Act and Rule 2a-5 thereunder, which sets forth the requirements for determining fair value in good faith. Pursuant to Rule 2a-5, the board of directors has designated the Investment Adviser to determine the fair value of the Company’s investments. The board of directors oversees the Investment Adviser’s performance of its valuation responsibilities, and in support of this oversight, the Investment Adviser provides periodic reports to the Company’s board of directors related to the fair valuation process. The Investment Adviser carries out its responsibilities as valuation designee primarily through its valuation committee (the “Valuation Committee”), assisted by third-party valuation firms, administrative personnel, and other service providers, as appropriate. The Valuation Committee consists of a number of representatives from different functions of the Investment Adviser. The Investment Adviser conducts the fair valuation process on a quarterly basis, subject to the oversight of the Company’s board of directors through the audit committee, using consistently applied valuation procedures. In accordance with the Company’s valuation procedures, the Investment Adviser performs periodic testing of the appropriateness and accuracy of fair value methodologies, and has established a process for approving, monitoring, and evaluating independent pricing service providers. Effective September 8, 2022, the board of directors designated the Investment Adviser as the Company’s valuation designee.
Investments that are not publicly traded or for which market prices are not readily available will be valued based on the input of the Investment Adviser and independent third-party valuation firms engaged to review Company investments. These external reviews are used by the Company’s Investment Adviser, subject to the oversight of the board of directors, to review the Company’s internal valuation of investments during the year.
Investment Transactions: The Company records investment transactions on a trade date basis. These transactions may settle subsequent to the trade date depending on the transaction type. Certain expenses related to legal and tax consultation, due diligence, rating fees, valuation expenses and independent collateral appraisals may arise when the Company makes certain investments. These expenses are recognized in the consolidated statements of operations as they are incurred.
Foreign currency translation: The Company’s books and records are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis:
| (1) | cash and cash equivalents, restricted cash and cash equivalents, fair value of investments, interest receivable, and other assets and liabilities — at the spot exchange rate on the last business day of the period; and |
| (2) | purchases and sales of investments, income and expenses — at the exchange rates prevailing on the respective dates of such transactions. |
31
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
Although net assets and fair values are presented based on the applicable foreign exchange rates described above, the Company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in fair values of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. Fluctuations arising from the translation of assets other than investments and liabilities are included with the net change in unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies on the consolidated statements of operations.
Foreign security and currency transactions may involve certain considerations and risks not typically associated with investing in U.S. companies. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices to be more volatile than those of comparable U.S. companies or U.S. government securities.
Revenue Recognition: The Company’s revenue recognition policies are as follows:
Sales: Realized gains or losses on the sales of investments are calculated by using the specific identification method.
Investment Income: Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. The Company may also receive closing, commitment, prepayment, amendment and other fees from portfolio companies in the ordinary course of business.
Dividend income is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies.
Closing fees associated with investments in portfolio companies are deferred and recognized as interest income over the respective terms of the applicable loans. Upon the prepayment of a loan or debt security, any unamortized loan closing fees are recorded as part of interest income. Commitment fees are based upon the undrawn portion committed by the Company and are recorded as interest income on an accrual basis. Prepayment, amendment and other fees are recognized when earned, generally when such fees are receivable, and are included in fee income on the consolidated statements of operations.
The Company may invest in loans that contain a PIK interest rate provision. PIK interest is accrued at the contractual rates and added to loan principal on the reset dates to the extent such amounts are expected to be collected.
Non-accrual loans: Loans are placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected. The Company may conclude that non-accrual status is not required if the loan has sufficient collateral value and is in the process of collection. Accrued interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current.
Restricted Cash and Cash Equivalents: Restricted cash and cash equivalents include amounts that are collected and held by the trustee appointed as custodian of the assets securing the Credit Facility (as defined in Note 6). Restricted cash is held by the trustee for the payment of interest expense and principal on the outstanding borrowings or reinvestment into new assets. Restricted cash that represents interest or fee income is transferred to unrestricted cash accounts by the trustee generally once a quarter after the payment of operating expenses and amounts due under the Credit Facility.
32
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
Offering Costs: The Company may incur legal, accounting, regulatory, investment banking and other costs in relation to equity offerings. Offering costs are deferred and charged against paid-in capital in excess of par on completion of the related offering.
Deferred Financing Costs: Deferred financing costs represent fees and other direct incremental costs incurred in connection with the Company’s borrowings. These amounts are amortized and are included in interest expense in the consolidated statements of operations over the estimated life of the borrowings. Deferred financing costs are presented in the consolidated statements of assets and liabilities as a direct reduction from the carrying amount of the related debt liability.
Income Taxes: The Company elected to be treated as a RIC under Subchapter M of the Code. In order to maintain its status as a RIC, among other requirements, the Company is required to distribute dividends for U.S. federal income tax purposes to its stockholders each taxable year generally of an amount at least equal to 90% of the sum of ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, out of the assets legally available for distribution. In addition, the Company will incur a nondeductible excise tax equal to 4% of the amount by which (1) 98% of ordinary income for the calendar year (taking into account certain deferrals and elections), (2) 98.2% of capital gains in excess of capital losses, adjusted for certain ordinary losses, for the one-year period ending on October 31 of the calendar year and (3) any ordinary income and capital gain income for preceding years that were not distributed during such years and on which the Company incurred no U.S. federal income tax exceed distributions for the year. The Company accrues estimated excise tax on the amount, if any, that estimated taxable income is expected to exceed the level of stockholder distributions described above.
The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statement is the largest benefit or expense that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. Any tax positions not deemed to satisfy the more-likely-than-not threshold are reversed and recorded as tax benefit or tax expense, as appropriate, in the current year. Management has analyzed the Company’s tax positions, and the Company has concluded that the Company did
Penalties or interest that may be assessed related to any income taxes would be classified as general and administrative expenses on the consolidated statements of operations. The Company had
Dividends and Distributions: Dividends and distributions to common stockholders are recorded on the ex-dividend date. Quarterly distribution payments are determined by the Company’s board of directors and are paid from taxable earnings estimated by management and may include a return of capital and/or capital gains. Net realized capital gains, if any, are distributed at least annually, although the Company may decide to retain such capital gains for investment.
The Company maintains an “opt out” dividend reinvestment plan (“DRIP”) for common stockholders. As a result, if the Company declares a distribution or other dividend, stockholders’ cash distributions will be automatically reinvested in additional shares of common stock, unless they specifically “opt out” of the DRIP so as to receive cash distributions.
Earnings per Share: The Company calculates earnings per share as earnings available to stockholders divided by the weighted average number of shares outstanding during the period.
33
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
Risks and Uncertainties: In the normal course of business, the Company generally encounters two significant types of economic risks including credit and market. Credit risk is the risk of default on the Company’s investments that result from an issuer’s, borrower’s or derivative counterparty’s inability or unwillingness to make contractually required payments. Market risk reflects changes in the value of investments due to changes in interest rates, spreads or other market factors, including the value of the collateral underlying investments held by the Company. Management believes that the carrying value of the Company’s investments are fairly stated, taking into consideration these risks along with estimated collateral values, payment histories and other market information.
Reclassifications: Certain amounts in the consolidated financial statements have been reclassified. These reclassifications had no material impact on the Company’s consolidated financial position, results of operations or cash flows as previously reported.
Segment Reporting: In accordance with ASC Topic 280, Segment Reporting, or ASC 280, the Company has determined that it has a single operating and reporting segment. As a result, the Company’s segment accounting policies are the same as described herein and the Company does not have any intra-segment sales and transfers of assets.
Recent Accounting Pronouncements: In November 2023, the FASB issued ASU 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” or ASU 2023-07. ASU 2023-07 enhances the disclosures required for reportable segments on an annual and interim basis. ASU 2023-07 is effective on a retrospective basis for annual periods beginning after December 15, 2023, for interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted. Management has adopted ASU 2023-07 effective December 31, 2024 and application of the guidance did not have a material impact on the Company’s consolidated financial statements. See Note 13 for more information on the adoption of ASU 2023-07.
In November 2024, the Financial Accounting Standards Board issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires public business entities to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to financial statements. The objective of this guidance is to enhance transparency and comparability by providing more detailed disaggregation of expenses presented in the income statement. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of the adoption of ASU 2024-03 on its consolidated financial statements.
NOTE 3 - FORWARD CURRENCY CONTRACTS
The Company may enter into foreign currency forward contracts from time to time to facilitate settlement of purchases and sales of investments denominated in foreign currencies and to economically hedge the impact that an adverse change in foreign exchange rates would have on the value of the Company’s investments denominated in foreign currencies. A foreign currency forward contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. These contracts are marked-to-market by recognizing the difference between the contract forward exchange rate and the forward market exchange rate on the last day of the period presented as unrealized appreciation or depreciation. Realized gains or losses are recognized when forward contracts are settled. Risks arise as a result of the potential inability of the counterparties to meet the terms of their contracts. The Company attempts to limit counterparty risk by only dealing with well-known counterparties.
The Company utilizes forward foreign currency exchange contracts to protect itself against fluctuations in exchange rates. The Company may choose to renew contracts quarterly unless otherwise settled by the Company or the counterparty.
34
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
The following table provides a breakdown of our forward currency contracts for the years ended December 31, 2024, 2023 and 2022.
Year ended December 31, | |||||||||
($ in thousands) |
| 2024 | 2023 | 2022 | |||||
Realized gain (loss) on forward currency contracts | $ | | $ | | $ | ( | |||
Unrealized appreciation (depreciation) on forward currency contracts | | ( | — | ||||||
Total net realized and unrealized gains (losses) on forward currency contracts | $ | | $ | ( | $ | ( | |||
The value associated with unrealized gain or loss on open contracts is included in unrealized appreciation or depreciation on forward currency contracts within the consolidated statements of assets and liabilities. Open contracts as of December 31, 2024 were as follows:
Counterparty |
| Currency to be sold |
| Currency to be purchased |
| Settlement date |
| Unrealized |
| Unrealized | ||||||
Morgan Stanley | C$ | CAD | $ | USD | 2/4/25 | $ | | $ | — | |||||||
Total | $ | | $ | — | ||||||||||||
The value associated with unrealized gain or loss on open contracts is included in unrealized appreciation or depreciation on forward currency contracts within the consolidated statements of assets and liabilities. Open contracts as of December 31, 2023 were as follows:
Counterparty |
| Currency to be sold |
| Currency to be purchased |
| Settlement date |
| Unrealized |
| Unrealized | ||||||
Morgan Stanley | C$ | CAD | $ | USD | 2/7/24 | $ | — | $ | ( | |||||||
Total | $ | — | $ | ( | ||||||||||||
The following table is a summary of the average USD notional exposure to foreign currency forward contracts for the years ended December 31, 2024 and 2023:
Year ended December 31, | |||||||
Average USD notional outstanding |
|
| 2024 | 2023 | |||
Forward currency contracts | $ | | $ | | |||
The foreign currency forward contracts open at the end of the period are generally indicative of the volume of activity during the period. The value associated with unrealized gain or loss on open contracts is included in unrealized appreciation or depreciation on forward currency contracts within the consolidated statements of assets and liabilities.
35
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
Offsetting of Derivative Instruments
The Company has derivative instruments that are subject to master netting agreements. These agreements include provisions to offset positions with the same counterparty in the event of default by one of the parties. The Company’s unrealized appreciation or depreciation on derivative instruments are reported as gross assets and liabilities, respectively, in the consolidated statements of assets and liabilities. The following tables present the Company’s assets and liabilities related to derivatives by counterparty, net of amounts available for offset under a master netting arrangement and net of any collateral received or pledged by the Company for such assets and liabilities as of December 31, 2024 and 2023.
As of December 31, 2024 | |||||||||||||||||||||||||||
Counterparty ($ in thousands) |
| Derivative Assets |
| Derivative |
| Derivatives |
| Non-cash |
| Non-cash |
| Cash Collateral |
| Cash Collateral |
| Net Amount of |
| Net Amount of | |||||||||
Morgan Stanley (CAD) | $ | | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | | $ | — | |||||||||
Total | $ | | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | | $ | — | |||||||||
| (1) | In some instances, the actual amount of the collateral received and/or pledged may be more than the amount shown due to overcollateralization. |
| (2) | Net amount of derivative assets represents the net amount due from the counterparty to the Company in the event of default. |
| (3) | Net amount of derivative liabilities represents the net amount due from the Company to the counterparty in the event of default. |
As of December 31, 2023 | |||||||||||||||||||||||||||
Counterparty ($ in thousands) |
| Derivative Assets |
| Derivative |
| Derivatives |
| Non-cash |
| Non-cash |
| Cash Collateral |
| Cash Collateral |
| Net Amount of |
| Net Amount of | |||||||||
Morgan Stanley (CAD) | $ | — | $ | | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | | |||||||||
Total | $ | — | $ | | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | | |||||||||
| (1) | In some instances, the actual amount of the collateral received and/or pledged may be more than the amount shown due to overcollateralization. |
| (2) | Net amount of derivative assets represents the net amount due from the counterparty to the Company in the event of default. |
| (3) | Net amount of derivative liabilities represents the net amount due from the Company to the counterparty in the event of default. |
36
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
NOTE 4 - INVESTMENTS
Investments consisted of the following:
As of December 31, 2024 | As of December 31, 2023 | |||||||||||
| Amortized Cost |
| Fair Value |
| Amortized Cost |
| Fair Value | |||||
First lien secured loans | $ | | $ | | $ | | $ | | ||||
Second lien secured loans |
| |
| |
| |
| | ||||
Unsecured loans | |
| | |
| | ||||||
Subordinated Note to STRS JV |
| |
| |
| |
| | ||||
Equity (excluding STRS JV) |
| |
| |
| |
| | ||||
Equity in STRS JV |
| |
| |
| |
| | ||||
Total | $ | | $ | | $ | | $ | | ||||
37
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
The following table shows the portfolio composition by industry grouping at fair value:
Industry ($ in thousands) | As of December 31, 2024 | As of December 31, 2023 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
Advertising |
| $ | |
| | % | $ | |
| | % |
Air Freight & Logistics | | | | | |||||||
Application Software | | | | | |||||||
Automotive Retail | — | — | | | |||||||
Broadcasting | | | | | |||||||
Broadline Retail | | | | | |||||||
Building Products | | | | | |||||||
Commodity Chemicals | | | | | |||||||
Construction & Engineering | | | | | |||||||
Construction Materials | | | | | |||||||
Data Processing & Outsourced Services | | | | | |||||||
Distributors | | | | | |||||||
Diversified Chemicals | | | | | |||||||
Diversified Financial Services | — | — | | | |||||||
Diversified Support Services | | | | | |||||||
Education Services | | | | | |||||||
Electric Utilities | | | | | |||||||
Environmental & Facilities Services | | | | | |||||||
Food Distributors | | | — | — | |||||||
Health Care Facilities | | | | | |||||||
Health Care Services | | | | | |||||||
Health Care Supplies | | | | | |||||||
Heavy Electrical Equipment | | | | | |||||||
Home Furnishings | | | | | |||||||
Household Appliances | | | | | |||||||
Household Products | | | | | |||||||
Industrial Machinery & Supplies & Components | | | | | |||||||
Integrated Telecommunication Services | | | | | |||||||
Interactive Media & Services | | | | | |||||||
Investment Banking & Brokerage | — | — | | | |||||||
IT Consulting & Other Services | | | | | |||||||
Leisure Facilities | | | | | |||||||
Leisure Products | | | | | |||||||
Life Sciences Tools & Services | | | | | |||||||
Office Services & Supplies | — | — | | | |||||||
Packaged Foods & Meats | | | — | — | |||||||
Paper & Plastic Packaging Products & Materials | — | — | | — | |||||||
Paper Products | | | — | — | |||||||
Real Estate Services | | | | | |||||||
Research & Consulting Services | | | | | |||||||
Security & Alarm Services | | | — | — | |||||||
Specialized Consumer Services | | | | | |||||||
Specialized Finance(1) | — | — | — | — | |||||||
38
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
Industry ($ in thousands) | As of December 31, 2024 | As of December 31, 2023 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
Systems Software | | | | | |||||||
Technology Hardware, Storage & Peripherals | | | | | |||||||
Transaction & Payment Processing Services | | | — | — | |||||||
Wireless Telecommunication Services | — | — | | | |||||||
Total(1) | $ | | | % | $ | | | % | |||
| (1) | Excludes investments in STRS JV. |
As of December 31, 2024, the portfolio companies underlying the investments are all located in the United States and its territories, except for Arcserve Cayman Opco LP, Arcserve Cayman GP LLC, Arcserve Cayman Topco LP and Alvaria Holdco (Cayman), which are domiciled in Cayman Islands, and Trimlite Buyer, LLC, which is domiciled in Canada. As of December 31, 2023, the portfolio companies underlying the investments are all located in the United States and its territories, except for Trimlite Buyer, LLC, which is domiciled in Canada. As of December 31, 2024 and December 31, 2023, the weighted average remaining term of the Company’s debt investments, excluding non-accrual investments, was approximately
As of December 31, 2024 the total cost basis of non-accrual loans was $
39
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
An affiliated company is generally a portfolio company in which the Company owns 5% or more of its voting securities. A controlled affiliated company is generally a portfolio company in which the Company owns more than 25% of its voting securities or has the power to exercise control over its management or policies (including through a management agreement). The following table presents the schedule of investments in and advances to affiliated and controlled persons (as defined by the 1940 Act) as of and for the year ended December 31, 2024:
Dividends, | Beginning | Net Change in | Ending Fair | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
interest and PIK | Fair Value as of | Net | Unrealized | Value as of | |||||||||||||||||||
Type of | included in | December 31, | Gross | Gross | Realized | Appreciation | December 31, | ||||||||||||||||
Affiliated Person(1) | Asset |
| income |
| 2023 |
| Additions(2) |
| Reductions(3) |
| Gain (Loss) |
| (Depreciation) |
| 2024 | ||||||||
Non-controlled affiliates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
$ | | $ | — | $ | | $ | — | $ | — | $ | | $ | | ||||||||||
|
| — |
| |
| — |
| — |
| |
| | |||||||||||
|
| — |
| |
| — |
| — |
| |
| | |||||||||||
— |
| — |
| — |
| — |
| — |
| — |
| — | |||||||||||
— |
| — |
| |
| — |
| — |
| ( |
| | |||||||||||
|
| — |
| |
| — |
| — |
| |
| | |||||||||||
— |
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|
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| — |
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| | ||||||||||
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| — | ||||||||||
|
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| | |||||||||||
— |
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| — |
| — |
| — |
| — | |||||||||||
— |
| |
| — |
| — |
| — |
| |
| | |||||||||||
Total Non-controlled affiliates | $ | | $ | | $ | | $ | — | $ | — | $ | ( | $ | | |||||||||
40
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
Dividends, | Beginning | Net Change in | Ending Fair | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
interest and PIK | Fair Value as of | Net | Unrealized | Value as of | |||||||||||||||||||
Type of | included in | December 31, | Gross | Gross | Realized | Appreciation | December 31, | ||||||||||||||||
Affiliated Person(1) | Asset |
| income |
| 2023 |
| Additions(2) |
| Reductions(3) |
| Gain (Loss) |
| (Depreciation) |
| 2024 | ||||||||
Controlled affiliates | |||||||||||||||||||||||
$ | | $ | — | $ | | $ | — | $ | — | $ | ( | $ | | ||||||||||
| — | | — | — | ( | — | |||||||||||||||||
| | | — | — | ( | — | |||||||||||||||||
( | | — | — | — | ( | — | |||||||||||||||||
— | | — | — | — | ( | — | |||||||||||||||||
— | | — | — | — | ( | — | |||||||||||||||||
— | — | — | — | — | — | — | |||||||||||||||||
— | — | — | — | — | — | — | |||||||||||||||||
| | | — | — | — | — | | ||||||||||||||||
|
| |
| |
| — |
| — |
| — |
| ( |
| | |||||||||
Total Controlled affiliates |
|
| $ | | $ | | $ | | $ | — | $ | — | $ | ( | $ | | |||||||
* | The Company and STRS Ohio are the members of STRS JV, a joint venture formed as a Delaware limited liability company that is not consolidated by either member for financial reporting purposes. The members make investments in STRS JV in the form of limited liability company (“LLC”) equity interests and interest-bearing subordinated notes as STRS JV makes investments, and all portfolio and other material decisions regarding STRS JV must be submitted to STRS JV’s board of managers which is comprised of an equal number of members appointed by each of the Company and STRS Ohio. Because management of STRS JV is shared equally between the Company and STRS Ohio, the Company does not believe it controls STRS JV for purposes of the 1940 Act or otherwise. |
| (1) | Refer to the consolidated schedule of investments for the principal amount, industry classification and other security detail of each portfolio company. |
| (2) | Gross additions may include increases in the cost basis of investments resulting from new portfolio investments, PIK, an exchange of existing investments for new investments and the transfers of an existing portfolio company into this category from a different category. |
| (3) | Gross reductions may include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, an exchange of existing investments for new investments and the transfers of an existing portfolio company from this category to a different category. |
41
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
In January 2024, as part of a restructuring agreement between the Company and Arcstor Midco, LLC (d/b/a Arcserve (USA), the Company’s first lien secured term loan and priority first lien delayed draw loan investments in Arcstor Midco, LLC (d/b/a Arcserve (USA), converted into a new first lien secured delayed draw loan and unsecured notes in Arcserve Cayman Opco LP (d/b/a Arcserve (USA), LLC) and common equity of Arcserve Cayman GP LLC (d/b/a Arcserve (USA), LLC) and Arcserve Cayman Topco LP (d/b/a Arcserve (USA), LLC).
In September 2024, as part of a restructuring and partial foreclosure agreement between the Company and Honors Holdings, LLC (d/b/a Orange Theory), the Company’s first lien secured term loan, first lien delayed draw loan and revolver investments in Honors Holdings, LLC, which had a historical cost basis of $
The following table presents the schedule of investments in and advances to affiliated and controlled affiliated persons (as defined by the 1940 Act) as of and for the year ended December 31, 2023:
Dividends, interest | Beginning | Net Change in | Ending Fair | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
and PIK | Fair Value as of | Net | Unrealized | Value as of | |||||||||||||||||||
Type of | included in | December 31, | Realized | Appreciation | December 31, | ||||||||||||||||||
Affiliated Person(1) | Asset |
| income |
| 2022 |
| Purchases |
| Sales |
| Gain (Loss) |
| (Depreciation) |
| 2023 | ||||||||
Non-controlled affiliates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
$ | | $ | | $ | — | $ | ( | $ | ( | $ | | $ | — | ||||||||||
|
| |
| |
| — |
| — |
| ( |
| | |||||||||||
| ( |
| |
| — |
| — |
| — |
| ( |
| | ||||||||||
| — |
| — |
| — |
| — |
| — |
| — |
| — | ||||||||||
| — |
| — |
| — |
| — |
| — |
| — |
| — | ||||||||||
|
| — |
| |
| — |
| — |
| ( |
| | |||||||||||
— |
| — |
| — |
| — |
| — |
| — |
| — | |||||||||||
— |
| — |
| |
| — |
| — |
| ( |
| | |||||||||||
Total Non-controlled affiliates | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | |||||||||
42
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
Dividends, interest | Beginning | Net Change in | Ending Fair | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
and PIK | Fair Value as of | Net | Unrealized | Value as of | |||||||||||||||||||
Type of | included in | December 31, | Realized | Appreciation | December 31, | ||||||||||||||||||
Affiliated Person(1) | Asset |
| income |
| 2022 |
| Purchases |
| Sales |
| Gain (Loss) |
| (Depreciation) |
| 2023 | ||||||||
Controlled affiliates | |||||||||||||||||||||||
$ | | $ | — | $ | | $ | — | $ | — | $ | ( | $ | | ||||||||||
| — | | — | — | ( | | |||||||||||||||||
| — | | — | — | ( | | |||||||||||||||||
| — | | — | — | ( | | |||||||||||||||||
— | — | — | — | — | — | — | |||||||||||||||||
— | — | — | — | — | — | — | |||||||||||||||||
| | | | — | — | — | | ||||||||||||||||
|
| |
| |
| |
| — |
| — |
| |
| | |||||||||
Total Controlled affiliates |
|
| $ | | $ | | $ | | $ | — | $ | — | $ | ( | $ | | |||||||
* | The Company and STRS Ohio are the members of STRS JV, a joint venture formed as a Delaware limited liability company that is not consolidated by either member for financial reporting purposes. The members make investments in STRS JV in the form of limited liability company (“LLC”) equity interests and interest-bearing subordinated notes as STRS JV makes investments, and all portfolio and other material decisions regarding STRS JV must be submitted to STRS JV’s board of managers which is comprised of an equal number of members appointed by each of the Company and STRS Ohio. Because management of STRS JV is shared equally between the Company and STRS Ohio, the Company does not believe it controls STRS JV for purposes of the 1940 Act or otherwise. |
| (1) | Refer to the consolidated schedule of investments for the principal amount, industry classification and other security detail of each portfolio company. |
| (2) | Gross additions may include increases in the cost basis of investments resulting from new portfolio investments, PIK, an exchange of existing investments for new investments and the transfers of an existing portfolio company into this category from a different category. |
| (3) | Gross reductions may include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, an exchange of existing investments for new investments and the transfers of an existing portfolio company from this category to a different category. |
In March 2023, as a result of a restructuring agreement between the Company and American Crafts, LC, the Company’s investments are controlled affiliate investments, as defined by the 1940 Act.
In March 2023, as part of a restructuring agreement between the Company and Sklar Holdings, Inc (d/b/a Starco), the Company’s first lien secured term loan investment to Sklar Holdings, Inc, with a total cost basis of $
43
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
WHF STRS Ohio Senior Loan Fund LLC
On January 14, 2019, the Company entered into an LLC operating agreement with STRS Ohio to co-manage a newly formed joint venture investment company, STRS JV, a Delaware LLC. STRS Ohio and the Company committed to provide up to $
In February 2023, the Company increased its commitment to the STRS JV in the amount of an additional $
In February 2022, the Company increased its capital commitment to the STRS JV in the amount of an additional $
As of December 31, 2024 and December 31, 2023, STRS JV had total assets of $
The Company provides capital to STRS JV in the form of LLC equity interests and through interest-bearing subordinated notes. As of both December 31, 2024 and December 31, 2023, the Company and STRS Ohio owned
The Company and STRS Ohio each appoint two members to STRS JV’s four-person board of managers. All material decisions with respect to STRS JV, including those involving its investment portfolio, require unanimous approval of a quorum of the board of managers. Quorum is defined as (i) the presence of two members of the board of managers; provided that at least one individual is present that was elected, designated or appointed by each member; (ii) the presence of three members of the board of managers; provided that the individual that was elected, designated or appointed by the member with only one individual present shall be entitled to cast two votes on each matter; or (iii) the presence of four members of the board of managers; provided that two individuals are present that were elected, designated or appointed by each member.
On July 19, 2019, STRS JV entered into a $
44
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
euros. On July 15, 2021, the terms of the STRS JV Credit Facility were amended to, among other things, allow STRS JV to reduce the applicable margins for interest rates to
On March 11, 2022, the terms of the STRS JV Credit Facility were further amended to, among other things, (i) permanently increase STRS Credit’s availability under the Credit Facility from $
On January 13, 2023, the terms of the STRS JV Credit Facility were further amended to, among other things, (i) permanently increase STRS Credit’s availability under the STRS JV Credit Facility from $
On May 18, 2023, the terms of the STRS JV Credit Facility were further amended to, among other things, (i) effective June 6, 2023 apply an annual interest rate equal to applicable SOFR plus
On November 26, 2024, the terms of the STRS JV Credit Facility were further amended to, among other things, (i) reduce the spread from
As of December 31, 2024, the STRS JV Credit Facility had $
As of December 31, 2023, the STRS JV Credit Facility had $
45
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
Below is a listing of STRS JV’s individual investments as of December 31, 2024:
Issuer
Investment Type(1)
Floor
Reference Rate(2)
Spread
Above
Index
Interest
Rate(3)
Acquisition
Date(4)
Maturity
Date
Principal/
Share
Amount
Amortized
Cost
Fair
Value(5)
Fair Value As A
Percentage of Members' Equity
Debt Investments
Advertising
$
$
%
—
—
—
Aerospace & Defense
—
—
—
Air Freight & Logistics
—
—
—
Broadline Retail
—
—
(
(
Building Products
Construction & Engineering
—
—
—
—
—
—
Data Processing & Outsourced Services
—
—
—
46
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
Issuer
Investment Type(1)
Floor
Reference Rate(2)
Spread
Above
Index
Interest
Rate(3)
Acquisition
Date(4)
Maturity
Date
Principal/
Share
Amount
Amortized
Cost
Fair
Value(5)
Fair Value As A
Percentage of Members' Equity
Distributors
$
$
%
—
—
—
—
—
—
—
—
—
—
Diversified Support Services
—
—
—
Electrical Components & Equipment
—
—
—
—
Environmental & Facilities Services
Food Distributors
Health Care Facilities
—
—
—
Health Care Services
—
—
—
47
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
Issuer
Investment Type(1)
Floor
Reference Rate(2)
Spread
Above
Index
Interest
Rate(3)
Acquisition
Date(4)
Maturity
Date
Principal/
Share
Amount
Amortized
Cost
Fair
Value(5)
Fair Value As A
Percentage of Members' Equity
Health Care Supplies
$
$
%
—
—
—
—
—
—
Household Appliances
IT Consulting & Other Services
—
—
—
—
—
—
—
—
—
Packaged Foods & Meats
Paper & Plastic Packaging Products & Materials
—
—
—
—
—
(
—
48
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
Issuer
Investment Type(1)
Floor
Reference Rate(2)
Spread
Above
Index
Interest
Rate(3)
Acquisition
Date(4)
Maturity
Date
Principal/
Share
Amount
Amortized
Cost
Fair
Value(5)
Fair Value As A
Percentage of Members' Equity
Pharmaceuticals
$
$
%
Real Estate Services
Research & Consulting Services
—
—
(
—
Technology Hardware, Storage & Peripherals
Wireless Telecommunication Services
—
—
—
Total Investments
$
$
%
Money market funds (included in cash and cash equivalents and restricted cash and cash equivalents)
Goldman Sachs Money Market Fund (CUSIP: 38141W315)(12)
$
$
%
Invesco Treasury Money Market Fund (CUSIP: X9USDINVE)(12)
Total Money Market Funds
Total Investments and Money Market Funds
$
$
%
49
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
Forward Currency Contracts
Counterparty |
| Currency to be sold |
| Currency to be purchased |
| Settlement date |
| Unrealized |
| Unrealized | |||||
Morgan Stanley | C$ | | CAD | $ | 2/7/2024 | $ | — | $ | ( | ||||||
Morgan Stanley | € | | EUR | $ | 2/7/2024 | — | ( | ||||||||
Morgan Stanley | £ | | GBP | $ | 2/7/2024 | — | ( | ||||||||
Total | $ | — | $ | ( | |||||||||||
| (1) | Except as noted, all investments provide collateral for the STRS JV Credit Facility and are domiciled in the United States. |
| (2) | The investments bear interest at a rate that may be determined by reference SOFR, CDOR, SONIA, Prime, EurIBOR, which resets monthly, quarterly or semiannually. |
| (3) | The interest rate is the “all-in-rate” including the current index and spread, the fixed rate, and the PIK interest rate, as the case may be. |
| (4) | Except as otherwise noted, all of the STRS JV’s portfolio company investments, which as of the date of the portfolio represented |
| (5) | The fair value of each investment was determined using significant unobservable inputs. |
| (6) | The investment or a portion of the investment does not provide collateral for the STRS JV Credit Facility. |
| (7) | The issuer is domiciled in Canada. |
| (8) | Principal amount is denominated in GBP and the issuer is domiciled in the United Kingdom. |
| (9) | Principal amount is denominated in Euros. |
| (10) | Principal amount is denominated in CAD. |
| (11) | The investment was comprised of two contracts, which were indexed to Prime and a different base rate, SOFR, SONIA or CDOR. The Floor, Spread Above Index and Interest Rate presented represent the weighted average of both contracts. |
| (12) | The rate shown is the annualized seven-day yield as of December 31, 2024. |
| (13) | Investment is structured as a unitranche loan in which the STRS JV may receive additional interest on its “last out” tranche of the portfolio company’s senior term debt, which was previously syndicated into “first out” and “last out” tranches, whereby the “first out” tranche will have priority as to the “last out” tranche with respect to payments of principal, interest and any other amounts due thereunder. |
50
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
Below is a listing of STRS JV’s individual investments as of December 31, 2023:
Issuer
Investment Type(1)
Floor
Reference Rate(2)
Spread
Above
Index
Interest
Rate(3)
Acquisition
Date(4)
Maturity
Date
Principal/
Share
Amount
Amortized
Cost
Fair
Value(5)
Fair Value As A
Percentage of Members' Equity
Debt Investments
Advertising
$
$
%
—
—
—
Air Freight & Logistics
—
—
—
—
Broadline Retail
—
—
(
—
Building Products
Construction & Engineering
—
—
—
Data Processing & Outsourced Services
—
—
—
Diversified Support Services
—
—
—
—
51
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
Issuer
Investment Type(1)
Floor
Reference Rate(2)
Spread
Above
Index
Interest
Rate(3)
Acquisition
Date(4)
Maturity
Date
Principal/
Share
Amount
Amortized
Cost
Fair
Value(5)
Fair Value As A
Percentage of Members' Equity
Electronic Equipment & Instruments
$
$
%
—
—
—
Environmental & Facilities Services
—
—
(
—
Health Care Services
—
—
—
Health Care Supplies
—
—
—
—
—
—
—
Household Appliances
Industrial Machinery & Supplies & Components
Investment Banking & Brokerage
52
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
Issuer
Investment Type(1)
Floor
Reference Rate(2)
Spread
Above
Index
Interest
Rate(3)
Acquisition
Date(4)
Maturity
Date
Principal/
Share
Amount
Amortized
Cost
Fair
Value(5)
Fair Value As A
Percentage of Members' Equity
IT Consulting & Other Services
$
$
%
11.59% (11.34% Cash + 0.25% PIK)
—
—
—
—
—
—
Packaged Foods & Meats
11.96% (11.21% Cash + 0.75% PIK)
Paper & Plastic Packaging Products & Materials
—
—
(
—
—
—
(
—
—
—
—
—
Personal Care Products
Pharmaceuticals
53
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
Issuer |
| Investment Type(1) |
| Floor |
| Reference Rate(2) |
| Spread |
| Interest |
| Acquisition |
| Maturity |
| Principal/ |
| Amortized |
| Fair |
| Fair Value As A | |||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Real Estate Services | |||||||||||||||||||||||||
| $ | | $ | | | % | |||||||||||||||||||
| | | | ||||||||||||||||||||||
| | | | ||||||||||||||||||||||
| | | | ||||||||||||||||||||||
| | | | ||||||||||||||||||||||
| | | |||||||||||||||||||||||
Research & Consulting Services | |||||||||||||||||||||||||
| | | | ||||||||||||||||||||||
| | | | ||||||||||||||||||||||
| | | | ||||||||||||||||||||||
| | | | ||||||||||||||||||||||
| | | | ||||||||||||||||||||||
| | | | ||||||||||||||||||||||
| | | | ||||||||||||||||||||||
— | — | — | — | ||||||||||||||||||||||
| | | |||||||||||||||||||||||
Technology Hardware, Storage & Peripherals | |||||||||||||||||||||||||
| | | | ||||||||||||||||||||||
| | | | ||||||||||||||||||||||
| | | |||||||||||||||||||||||
Wireless Telecommunication Services | |||||||||||||||||||||||||
| | | | ||||||||||||||||||||||
— | — | — | — | ||||||||||||||||||||||
| | | |||||||||||||||||||||||
Total Investments | $ | | $ | | | % | |||||||||||||||||||
54
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
Forward Currency Contracts
Counterparty |
| Currency to be sold |
| Currency to be purchased |
| Settlement date |
| Unrealized |
| Unrealized | |||||
Morgan Stanley | C$ | CAD | $ | 1/27/2023 | $ | — | $ | ( | |||||||
Morgan Stanley | € | | EUR | $ | 1/27/2023 | — | ( | ||||||||
Morgan Stanley | £ | GBP | $ | 1/27/2023 | — | ( | |||||||||
Total | $ | — | $ | ( | |||||||||||
| (1) | Except as noted, all investments provide collateral for the STRS JV Credit Facility. |
| (2) | The investments bear interest at a rate that may be determined by reference to LIBOR, which resets monthly, quarterly or semiannually, SOFR, CDOR, Prime, or EurIBOR. |
| (3) | The interest rate is the “all-in-rate” including the current index and spread, the fixed rate, and the PIK interest rate, as the case may be. |
| (4) | Except as otherwise noted, all of the STRS JV’s portfolio company investments, which as of the date of the portfolio represented |
| (5) | The fair value of each investment was determined using significant unobservable inputs. |
| (6) | The investment or a portion of the investment does not provide collateral for the STRS JV Credit Facility. |
| (7) | The issuer is domiciled in Canada. |
| (8) | Principal amount is denominated in GBP. |
| (9) | Principal amount is denominated in Euros. |
| (10) | Principal amount is denominated in CAD. |
| (11) | The investment was comprised of two contracts, which were indexed to Prime and a different base rate, SOFR, SONIA or CDOR. The Floor, Spread Above Index and Interest Rate presented represent the weighted average of both contracts. |
| (12) | Principal amount is non-USD denominated and is based in British pounds. At the option of the borrower, amounts borrowed under the delayed draw term loan commitment can be U.S. dollars, Canadian dollars or British pounds. |
| (13) | Investment is structured as a unitranche loan in which the STRS JV may receive additional interest on its “last out” tranche of the portfolio company’s senior term debt, which was previously syndicated into “first out” and “last out” tranches, whereby the “first out” tranche will have priority as to the “last out” tranche with respect to payments of principal, interest and any other amounts due thereunder. |
| (14) | The issuer is domiciled in the United Kingdom. |
As of December 31, 2024, the portfolio companies underlying the STRS JV investments are all located in the United States and its territories except for Geo Logic Systems Ltd., which is domiciled in Canada, and Cennox Holdings Limited which is domiciled in the United Kingdom. As of December 31, 2023, the portfolio companies underlying the STRS JV investments are all located in the United States and its territories except for Geo Logic Systems Ltd., which is domiciled in Canada, and Cennox Holdings Limited and Solar Holdings Bidco Limited, which are domiciled in the United Kingdom.
As of December 31, 2024 and December 31, 2023, STRS JV had
55
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
Below is certain summarized financial information for STRS JV as of December 31, 2024 and December 31, 2023 and for the years ended December 31, 2024, 2023 and 2022:
Selected Balance Sheet Information ($ in thousands) | As of December 31, 2024 | As of December 31, 2023 | ||||
Assets |
|
|
|
| ||
Investments, at fair value (amortized cost of $ | $ | | $ | | ||
Cash and cash equivalents |
| |
| | ||
Interest receivable | | | ||||
Amounts receivable on unsettled investment transactions | | | ||||
Unrealized appreciation on foreign currency forward contracts | | — | ||||
Other assets |
| |
| | ||
Total assets | $ | | $ | | ||
Liabilities |
|
|
|
| ||
Credit facility (net of unamortized debt issuance costs of $ | $ | | $ | | ||
Note payable to members |
| |
| | ||
Interest payable on credit facility |
| |
| | ||
Interest payable on notes to members |
| |
| | ||
Unrealized depreciation on foreign currency forward contracts | — | | ||||
Other liabilities |
| |
| | ||
Total liabilities |
| |
| | ||
Members’ equity |
| |
| | ||
Total liabilities and members’ equity | $ | | $ | | ||
Year Ended December 31, | |||||||||
Selected Statement of Operations Information ($ in thousands) |
| 2024 | 2023 |
| 2022 | ||||
Interest and fee income | $ | | $ | | $ | | |||
Total investment income | $ | | $ | | $ | | |||
Interest expense on credit facility |
| |
| |
| | |||
Interest expense on notes to members |
| |
| |
| | |||
Administrative fee |
| |
| |
| | |||
Other expenses |
| |
| |
| | |||
Total expenses | $ | | $ | | $ | | |||
Net investment income |
| |
| |
| | |||
Net realized gains (losses) on investments and foreign currency transactions |
| |
| |
| | |||
Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions |
| |
| |
| ( | |||
Net increase in members’ equity resulting from operations | $ | | $ | | $ | | |||
56
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
NOTE 5 – FAIR VALUE MEASUREMENTS
Accounting standards establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active public markets that the entity has the ability to access as of the measurement date.
Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about what market participants would use in pricing an asset or liability.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, a financial instrument’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the financial instrument.
A review of the fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in or out of the Level 3 category as of the beginning of the quarter in which the reclassifications occur. During the year ended December 31, 2024 and year ended December 31, 2023, there were no changes in the observability of valuation inputs that would have resulted in a reclassification of assets between any levels.
Fair value for each investment is derived using a combination of valuation methodologies that, in the judgment of the Investment Committee are most relevant to such investment, including, without limitation, being based on one or more of the following: (i) market prices obtained from market makers for which the Investment Committee has deemed there to be enough breadth (number of quotes) and depth (firm bids) to be indicative of fair value, (ii) the price paid or realized in a completed transaction or binding offer received in an arm’s-length transaction, (iii) a discounted cash flow analysis, (iv) the guideline public company method, (v) the similar transaction method or (vi) the option pricing method.
The following table presents investments (as shown on the consolidated schedule of investments) that were measured at fair value as of December 31, 2024:
| Level 1 |
| Level 2 |
| Level 3 |
| Total | |||||
First lien secured loans | $ | — | $ | — | $ | | $ | | ||||
Second lien secured loans |
| — |
| — |
| |
| | ||||
Unsecured loans | — |
| — |
| |
| | |||||
Subordinated Note to STRS JV |
| — |
| — |
| |
| | ||||
Equity (excluding STRS JV) |
| — |
| — |
| |
| | ||||
Equity in STRS JV(1) |
| — |
| — |
| — |
| | ||||
Total investments | $ | — | $ | — | $ | | $ | | ||||
| (1) | The Company’s equity investment in STRS JV is measured using the net asset value per share as a practical expedient for fair value, and thus has not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated statements of assets and liabilities. |
The Company’s money market funds (included in cash and cash equivalents and restricted cash and cash equivalents), which were valued at $
The Company’s forward currency contracts, which were valued at $
57
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
The following table presents investments (as shown on the consolidated schedule of investments) that were measured at fair value as of December 31, 2023:
| Level 1 |
| Level 2 |
| Level 3 | Total | ||||||
First lien secured loans | $ | — | $ | — | $ | | $ | | ||||
Second lien secured loans |
| — |
| — |
| |
| | ||||
Unsecured loans | — |
| — |
| |
| | |||||
Subordinated Note to STRS JV |
| — |
| — |
| |
| | ||||
Equity (excluding STRS JV) |
| — |
| — |
| |
| | ||||
Equity in STRS JV(1) |
| — |
| — |
| — |
| | ||||
Total investments | $ | — | $ | — | $ | | $ | | ||||
| (1) | The Company’s equity investment in STRS JV is measured using the NAV per share as a practical expedient for fair value, and thus has not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated statements of assets and liabilities. |
The Company’s money market funds (included in cash and cash equivalents and restricted cash and cash equivalents), which were valued at $
The Company’s forward currency contracts, which were valued at ($
The following table presents the changes in investments measured at fair value using Level 3 inputs for the year ended December 31, 2024:
| First Lien |
| Second Lien |
|
| Subordinated |
|
| ||||||||||
Secured | Secured | Unsecured | Notes to STRS | Total | ||||||||||||||
Year ended December 31, 2024 | Loans | Loans | Loans | JV | Equity | Investments | ||||||||||||
Fair value, beginning of period | $ | |
| $ | |
| $ | |
| $ | |
| $ | | $ | | ||
Funding of investments |
| |
|
| — |
| — |
|
| — |
|
| |
| | |||
Non-cash interest income |
| |
|
| |
| |
|
| — |
|
| — |
| | |||
Accretion of discount |
| |
|
| |
| |
|
| — |
|
| — |
| | |||
Proceeds from paydowns and sales |
| ( |
|
| ( |
| — |
|
| — |
|
| ( |
| ( | |||
Conversions |
| ( |
|
| ( |
| |
|
| — |
|
| |
| — | |||
| ( |
|
| ( |
| — |
|
| — |
|
| ( |
| ( | ||||
| ( |
|
| |
| |
|
| — |
|
| ( |
| ( | ||||
Fair value, end of period | $ | |
| $ | |
| $ | |
| $ | |
| $ | | $ | | ||
Change in unrealized appreciation (depreciation) on investments still held as of December 31, 2024 | $ | ( | $ | | $ | | $ | — | $ | ( | $ | ( | ||||||
58
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
The following table presents the changes in investments measured at fair value using Level 3 inputs for the year ended December 31, 2023:
| First Lien |
| Second Lien |
|
| Subordinated |
|
| ||||||||||
Secured | Secured | Unsecured | Notes to STRS | Total | ||||||||||||||
Year ended December 31, 2023 | Loans | Loans | Notes | JV | Equity | Investments | ||||||||||||
Fair value, beginning of period | $ | |
| $ | |
| $ | |
| $ | |
| $ | | $ | | ||
Funding of investments |
| |
|
| — |
| — |
|
| |
|
| |
| | |||
Non-cash interest income |
| |
|
| |
| — |
|
| — |
|
| — |
| | |||
Accretion of discount (premium) |
| |
|
| |
| — |
|
| — |
|
| — |
| | |||
Proceeds from paydowns and sales |
| ( |
|
| ( |
| — |
|
| — |
|
| ( |
| ( | |||
Conversions |
| ( |
|
| |
| — |
|
| — |
|
| |
| — | |||
Realized gains (losses) |
| ( |
|
| |
| — |
|
| — |
|
| ( |
| ( | |||
Net unrealized appreciation (depreciation) |
| ( |
|
| ( |
| — |
|
| — |
|
| ( |
| ( | |||
Fair value, end of period | $ | |
| $ | |
| $ | |
| $ | |
| $ | | $ | | ||
Change in unrealized appreciation (depreciation) on investments still held as of December 31, 2023 | $ | ( | $ | ( | $ | — | $ | — | $ | ( | $ | ( | ||||||
The significant unobservable inputs used in the fair value measurement of the Company’s investments are the discount rate, market quotes and exit multiples. An increase or decrease in the discount rate in isolation would result in significantly lower or higher fair value measurement, respectively. An increase or decrease in the market quote for an investment would in isolation result in significantly higher or lower fair value measurement, respectively. An increase or decrease in the exit multiple would in isolation result in significantly higher or lower fair value measurement, respectively. As the fair value of a debt investment diverges from par, which would generally be the case for non-accrual loans, the fair value measurement of that investment is more susceptible to volatility from changes in exit multiples as a significant unobservable input.
59
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
The following tables summarize the significant unobservable inputs the Company used to value the majority of its investments categorized within Level 3 as of December 31, 2024 and December 31, 2023. The tables are not intended to be all-inclusive, but instead capture the significant unobservable inputs relevant to the Company’s determination of fair values. These ranges represent the significant unobservable inputs that were used in the valuation of each type of investment, but they do not represent a range of values for any one investment.
Fair Value as of | Valuation | Unobservable | Range | ||||||
Investment Type | December 31, 2024 | Techniques | Inputs | (Weighted Average)(1) | |||||
First lien secured loans | $ | | Discounted cash flow analysis | Discount Rate | |||||
| Recent transaction | Transaction Price | |||||||
| Enterprise value analysis | EBITDA Multiple | |||||||
| Enterprise value analysis | Revenue Multiple | |||||||
| Expected repayment | Transaction Price | |||||||
| Collateral analysis | Recovery Rate | |||||||
| Market quotations | Broker quoted price | |||||||
| Option pricing Model | Volatility | |||||||
Second lien secured loans | | Discounted cash flow analysis | Discount rate | ||||||
Unsecured loans | | Discounted cash flow analysis | Discount rate | ||||||
Subordinated Notes to STRS JV | | Enterprise value analysis | n/a | n/a | |||||
Common equity | | Enterprise value analysis | EBITDA multiple | ||||||
| Enterprise value analysis | Revenue Multiple | |||||||
Preferred equity | | Enterprise value analysis | EBITDA multiple | ||||||
Warrant | | Enterprise value analysis | EBITDA multiple | ||||||
Total Level 3 Investments | $ | |
| (1) | Unobservable inputs were weighted by the relative fair value of the investments. |
Fair Value as of | Valuation | Unobservable | Range | ||||||
Investment Type | December 31, 2023 | Techniques | Inputs | (Weighted Average)(1) | |||||
First lien secured loans | $ | | Discounted cash flow analysis | Discount rate | |||||
| Recent transaction | Transaction price | |||||||
| Enterprise value analysis | EBITDA multiple | |||||||
| Option pricing Model | Volatility | |||||||
Second lien secured loans | | Discounted cash flow analysis | Discount rate | ||||||
| Enterprise value analysis | EBITDA multiple | |||||||
Unsecured loans | | Enterprise value analysis | EBITDA multiple | ||||||
Subordinated Notes to STRS JV | | Enterprise value analysis | n/a | n/a | |||||
Common equity | | Discounted cash flow analysis | Discount rate | ||||||
| Enterprise value analysis | EBITDA multiple | |||||||
| Recent transaction | Transaction price | |||||||
Preferred equity | | Discounted cash flow analysis | Discount rate | ||||||
| Enterprise value analysis | EBITDA multiple | |||||||
Warrant | | Discounted cash flow analysis | Discount rate | ||||||
Total Level 3 Investments | $ | |
| (1) | Unobservable inputs were weighted by the relative fair value of the investments. |
Valuation of investments may be determined by weighting various valuation techniques. Significant judgment is required in selecting the assumptions used to determine the fair values of these investments. The valuation methods selected for a particular investment are based on the circumstances and on the sufficiency of data available to measure fair value. If more than one valuation method is used to measure fair value, the results are evaluated and weighted, as appropriate, considering the reasonableness of the range indicated by those results. A fair value measurement is the point within that range that is most representative of fair value in the circumstances.
The availability of observable inputs can vary depending on the financial instrument and is affected by a wide variety of factors, including, for example, the nature of the instrument, whether the instrument is traded on an active exchange or in the secondary market and the current market conditions. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires a greater degree of judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for financial instruments classified as Level 3.
60
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
The determination of fair value using the selected methodologies takes into consideration a range of factors including the price at which the investment was acquired, the nature of the investment, local market conditions, trading values on public and private exchanges for comparable securities, current and projected operating performance and financing transactions subsequent to the acquisition of the investment, compliance with agreed upon terms and covenants, and assessment of credit ratings of an underlying borrower. These valuation methodologies involve a significant degree of judgment to be exercised.
As it relates to investments which do not have an active public market, there is no single standard for determining the estimated fair value. Valuations of privately held investments are inherently uncertain, and they may fluctuate over short periods of time and may be based on estimates. The determination of fair value may differ materially from the values that would have been used if a ready market for these investments existed.
In some cases, fair value for such investments is best expressed as a range of values derived utilizing different methodologies from which a single estimate may then be determined. Consequently, fair value for each investment may be derived using a combination of valuation methodologies that, in the judgment of the investment professionals, are most relevant to such investment. The selected valuation methodologies for a particular investment are consistently applied on each measurement date. However, a change in a valuation methodology or its application from one measurement date to another is possible if the change results in a measurement that is equally or more representative of fair value in the circumstances.
The following table presents the principal amount and fair value of the Company’s borrowings as of December 31, 2024 and December 31, 2023. As of December 31, 2024 and December 31, 2023, the Credit Facility (as defined in Note 6) approximates its carrying value presented net of unamortized debt issuances costs and issuance discount, net of accretion. The fair value of the Company’s
As of December 31, 2024 | As of December 31, 2023 | |||||||||||||
Fair | ||||||||||||||
| Value Level |
| Principal Amount Outstanding |
| Fair Value |
| Principal Amount Outstanding |
| Fair Value | |||||
JPM Credit Facility |
| 3 | $ | | $ | | $ | | $ | | ||||
| 3 |
| |
| | | | |||||||
3 | | |
| |
| | ||||||||
| 3 |
| |
| |
| |
| | |||||
| 3 |
| |
| | |
| | ||||||
3 | |
| | | | |||||||||
3 | | | |
| | |||||||||
$ | | $ | | $ | | $ | | |||||||
61
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
NOTE 6 – BORROWINGS
Historically, the 1940 Act has permitted the Company to issue “senior securities,” including borrowing money from banks or other financial institutions, only in amounts such that its asset coverage, as defined in the 1940 Act, equals at least
Total borrowings outstanding and available as of December 31, 2024, were as follows:
| Maturity |
| Rate |
| Principal Amount Outstanding |
| Amortized Cost |
| Available | ||||
JPM Credit Facility(1) |
| 11/22/2025 |
| S+ | % | $ | | $ | | $ | | ||
| 10/20/2025 |
| | % |
| |
| |
| — | |||
| 12/4/2026 |
| | % |
| |
| |
| — | |||
| 12/15/2026 |
| | % |
| |
| |
| — | |||
| 12/4/2027 |
| | % |
| |
| |
| — | |||
12/6/2028 | | % | | | — | ||||||||
9/15/2028 | | % | | | — | ||||||||
Total debt |
| $ | | $ | | $ | | ||||||
| (1) | All foreign denominated principal borrowings have been converted to USD using the exchange rates as of the applicable reporting date. |
Total borrowings outstanding and available as of December 31, 2023, were as follows:
| Maturity |
| Rate |
| Principal Amount Outstanding |
| Amortized Cost |
| Available | ||||
JPM Credit Facility(1) |
| 11/22/2025 |
| S+ | % | $ | | $ | | $ | | ||
| 10/20/2025 |
| | % |
| |
| |
| — | |||
| 12/4/2026 |
| | % |
| |
| |
| — | |||
| 12/15/2026 |
| | % |
| |
| |
| — | |||
| 12/4/2027 |
| | % |
| |
| |
| — | |||
12/6/2028 | | % | | | — | ||||||||
9/15/2028 | | % | | | — | ||||||||
Total debt |
| $ | | $ | | $ | | ||||||
| (1) | All foreign denominated principal borrowings have been converted to USD using the exchange rates as of the applicable reporting date. |
Credit Facility: On December 23, 2015, WhiteHorse Credit entered into a revolving credit and security agreement with JPMorgan, as administrative agent and lender.
On January 4, 2022, the terms of the Credit Facility were amended to, among other things, continue to establish a temporary upsize to the borrowing capacity under the Credit Facility, which allowed WhiteHorse Credit to borrow up to $
On February 4, 2022, the terms of the Credit Facility were further amended to, among other things (i) increase WhiteHorse Credit’s availability under the Credit Facility from $
62
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
amount from $
On March 30, 2022, the terms of the Credit Facility were further amended to, among other things: (i) increase WhiteHorse Credit’s availability under the Credit Facility from $
On April 12, 2023, the terms of the Credit Facility were further amended to, among other things, (i) apply an annual interest rate equal to the applicable base rate plus
On November 21, 2024, the terms of the Credit Facility were amended to extend the reinvestment period by one month to from November 22, 2024 to December 22, 2024.
On December 19, 2024, the terms of the Credit Facility were amended to extend the reinvestment period by one month to from December 22, 2024 to January 22, 2025.
The Credit Facility bears interest at SOFR plus
Under the Credit Facility, the Company has made certain customary representations and warranties and is required to comply with various covenants, including leverage restrictions, reporting requirements and other customary requirements for similar credit facilities.
As of December 31, 2024, the Company had $
As of December 31, 2023, the Company had $
63
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
64
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
NOTE 7 - RELATED PARTY TRANSACTIONS
Investment Advisory Agreement: WhiteHorse Advisers serves as the Company’s investment adviser in accordance with the terms of an investment advisory agreement. On November 1, 2023, at an in-person meeting, the Company’s board of directors approved an amended and restated investment advisory agreement, which was executed by the Company on February 22, 2024 (the “Investment Advisory Agreement”). The Company’s board of directors most recently re-approved the Investment Advisory Agreement on October 30, 2024. Subject to the overall supervision of the Company’s board of directors, WhiteHorse Advisers manages the day-to-day operations of, and provides investment management services to, the Company. Under the terms of the Investment Advisory Agreement, WhiteHorse Advisers:
| ● | determines the composition of the investment portfolio, the nature and timing of the changes to the portfolio and the manner of implementing such changes; |
| ● | identifies, evaluates and negotiates the structure of the investments the Company makes (including performing due diligence on the Company’s prospective portfolio companies); and |
| ● | closes, monitors and administers the investments the Company makes, including the exercise of any voting or consent rights. |
In addition, WhiteHorse Advisers provides the Company with access to personnel and an Investment Committee. Under the Investment Advisory Agreement, the Company pays WhiteHorse Advisers a fee for investment management services consisting of a base management fee and an incentive fee. The Investment Advisory Agreement may be terminated by either party without penalty upon
Base Management Fee
Effective January 1, 2024, the base management fee is calculated at an annual rate equal to
65
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
Prior to January 1, 2024, the base management fee is calculated at an annual rate of
The following table details our management fee expenses for the years ended December 31, 2024, 2023 and 2022:
Year ended December 31, | |||||||||
Management Fees ($ in thousands) |
| 2024 | 2023 | 2022 | |||||
Base management fees | $ | | $ | | $ | | |||
Total management fees | $ | | $ | | $ | | |||
As of December 31, 2024 and December 31, 2023, management fees payable on the consolidated statements of assets and liabilities were $
Performance-based Incentive Fee
The performance-based incentive fee consists of
The calculations of these
Each quarterly incentive fee is subject to the Incentive Fee Cap (as defined below) and a deferral mechanism through which the investment adviser may recap a portion of such deferred incentive fees, which is referred to together as the “Incentive Fee Cap and Deferral Mechanism.”
This limitation is accomplished by subjecting each incentive fee payable to a cap, which is referred to as the “Incentive Fee Cap.” The Incentive Fee Cap in any quarter is equal to (a) 20.0% of Cumulative Pre-Incentive Fee Net Return during the Incentive Fee Look-back Period less (b) cumulative incentive fees of any kind paid to the investment adviser during the Incentive Fee Look-back Period. To the extent the Incentive Fee Cap is zero or a negative value in any quarter, the Company will pay
The “Cumulative Pre-Incentive Fee Net Return” refers to the sum of (a) Pre-Incentive Fee Net Investment Income (as defined below) for each period during the Incentive Fee Look-back Period and (b) the sum of cumulative realized capital gains, cumulative realized capital losses, cumulative unrealized capital depreciation and cumulative unrealized capital appreciation during the applicable Incentive Fee Look-back Period.
The first component, which is income-based (the “Income Incentive Fee”), is calculated and payable quarterly in arrears and is determined based on Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter, subject to the Incentive Fee Cap and Deferral Mechanism. For this purpose, “Pre-Incentive Fee Net Investment Income” means, in each case on a consolidated basis, interest income, distribution income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees received from
66
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
portfolio companies) accrued during the calendar quarter, minus the Company’s operating expenses for the quarter (including the base management fee, expenses payable under the administration agreement (the “Administration Agreement”), any interest expense and any dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.
The operation of the first component of the incentive fee for each quarter is as follows:
| ● |
| ● | 100% of Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Rate but is less than 2.1875% in any calendar quarter (8.75% annualized) is payable to the Company’s investment adviser. This portion of the Company’s Pre-Incentive Fee Net Investment Income (which exceeds the Hurdle Rate but is less than 2.1875%) is referred to as the “catch-up.” The effect of the catch-up is that, if such Pre-Incentive Fee Net Investment Income exceeds 2.1875% in any calendar quarter, the investment adviser will receive 20% of such Pre-Incentive Fee Net Investment Income as if the Hurdle Rate did not apply; and |
| ● | 20% of the amount of such Pre-Incentive Fee Net Investment Income, if any, that exceeds 2.1875% in any calendar quarter (8.75% annualized) is payable to the Company’s investment adviser (once the Hurdle Rate is reached and the catch-up is achieved, 20% of all Pre-Incentive Fee Net Investment Income). |
The portion of such incentive fee that is attributable to deferred interest (such as PIK interest or original issue discount) will be paid to the investment adviser, together with interest from the date of deferral to the date of payment, only if and to the extent that the Company actually receives such interest in cash, and any accrual will be reversed if and to the extent such interest is reversed in connection with any write-off or similar treatment of the investment giving rise to any deferred interest accrual. Any reversal of such amounts would reduce net income for the quarter by the net amount of the reversal (after taking into account the reversal of incentive fees payable) and would result in a reduction and possibly elimination of the incentive fees for such quarter.
There is no accumulation of amounts on the Hurdle Rate from quarter to quarter and, accordingly, there is no clawback of amounts previously paid if subsequent quarters are below the quarterly Hurdle Rate and there is no delay of payment if prior quarters are below the quarterly Hurdle Rate. Since the Hurdle Rate is fixed, as interest rates rise, it will be easier for the investment adviser to surpass the Hurdle Rate and receive an incentive fee based on Pre-Incentive Fee Net Investment Income.
Net investment income used to calculate this component of the incentive fee is also included in the amount of consolidated gross assets used to calculate the base management fee. These calculations will be appropriately prorated for any period of less than three months and adjusted for any share issuances or repurchases during the current quarter.
The second component, the capital gains component of the incentive fee (the “Capital Gains Incentive Fee”), which is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), commenced on January 1, 2013, and equals 20% of cumulative aggregate realized capital gains from January 1 through the end of each calendar year, computed net of aggregate cumulative realized capital losses and aggregate cumulative unrealized capital depreciation through the end of each year (the “Capital Gains Incentive Fee Base”), less the aggregate amount of any previously paid capital gains incentive fees and subject to the Incentive Fee Cap and Deferral Mechanism. If such amount is negative, then no capital gains incentive fee will be payable for the year. Additionally, if the Investment Advisory Agreement is terminated as of a date that is not a calendar year end, the termination date will be treated as though it were a calendar year end for purposes of calculating and paying the capital gains incentive fee. The capital gains component of the incentive fee is not subject to any minimum return to stockholders.
In accordance with GAAP, the Company is also required to include the aggregate unrealized capital appreciation on investments in the calculation and accrue a capital gains incentive fee on a quarterly basis if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Advisory Agreement. If the Capital Gains Incentive Fee Base, adjusted as required by GAAP to include unrealized capital appreciation, is positive at the end of a reporting period, then GAAP requires the Company to accrue a Capital Gains Incentive Fee equal to 20% of such amount, less the aggregate amount of any Capital Gains Incentive Fees previously paid and Capital Gains Incentive Fees accrued under GAAP in all prior periods. If such amount is negative, then there is no accrual for such period. The
67
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
resulting accrual under GAAP in a given period may result in either additional expense (if such cumulative amount is greater than in the prior period) or a reversal of previously recorded expense (if such cumulative amount is less than in the prior period). There can be no assurance that such unrealized capital appreciation will be realized in the future.
Because of the structure of the incentive fee, it is possible that the Company may pay an incentive fee in a quarter where it incurs a loss subject to the Incentive Fee Cap and Deferral Mechanism. For example, if the Company receives Pre-Incentive Fee Net Investment Income in excess of the Hurdle Rate, it will pay the applicable Income Incentive Fee even after incurring a loss in that quarter due to realized and unrealized capital losses.
The following table provides a breakdown of the performance-based incentive fees for the years ended December 31, 2024, 2023 and 2022:
Year ended December 31, | |||||||||
Performance-based Incentive Fees ($ in thousands) |
| 2024 | 2023 | 2022 | |||||
Income incentive fee | $ | | $ | | $ | | |||
Capital gains incentive fee | — | — | ( | ||||||
Total performance-based incentive fees | $ | | $ | | $ | | |||
As of December 31, 2024 and December 31, 2023, incentive fees payable on the consolidated statements of assets and liabilities were $
Administration Agreement: Pursuant to the Administration Agreement, WhiteHorse Administration furnishes the Company with office facilities, equipment and clerical, bookkeeping and record keeping services to enable the Company to operate. Under the Administration Agreement, WhiteHorse Administration performs, or oversees the performance of, the Company’s required administrative services, which include being responsible for the financial records which the Company is required to maintain and preparing reports to its stockholders and reports filed with the U.S. Securities and Exchange Commission. In addition, WhiteHorse Administration assists the Company in determining and publishing its net asset value, oversees the preparation and filing of its tax returns and the printing and dissemination of reports to its stockholders and generally oversees the payment of the Company’s expenses and the performance of administrative and professional services rendered to the Company by others. Payments under the Administration Agreement equal an amount based upon the Company’s allocable portion of WhiteHorse Administration’s overhead in performing its obligations under the Administration Agreement, including rent and the Company’s allocable portion of the cost of its chief financial officer and chief compliance officer along with their respective staffs. Under the Administration Agreement, WhiteHorse Administration also provides on the Company’s behalf managerial assistance to those portfolio companies to which the Company is required to provide such assistance. The Administration Agreement may be terminated by either party without penalty upon
Substantially all the Company’s payments of operating expenses to third parties were made by a related party, for which such third party received reimbursement from the Company.
During each of the years ended December 31, 2024, 2023 and 2022, the Company incurred allocated administrative service fees of $
Co-investments with Related Parties: As of December 31, 2024 and December 31, 2023, no officers or employees affiliated with or employed by WhiteHorse Advisers and its related entities maintained any co-investments in the Company’s investments.
As of December 31, 2024 and December 31, 2023, certain funds affiliated with WhiteHorse Advisers and its related entities maintained co-investments in the Company’s investments of $
STRS JV: For the year ended December 31, 2024 and December 31, 2023, the Company sold $
68
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
NOTE 8 - COMMITMENTS AND CONTINGENCIES
Commitments: In the normal course of business, the Company is party to financial instruments with off-balance-sheet risk to meet the financing needs of its borrowers. These financial instruments include commitments to extend credit and involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated statement of assets and liabilities. The Company attempts to limit its credit risk by conducting extensive due diligence and obtaining collateral where appropriate.
As of December 31, 2024 and December 31, 2023, the balance of unfunded commitments to extend credit was $
69
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
The following table summarizes the Company’s unfunded commitments as of December 31, 2024 and December 31, 2023:
Unfunded Commitments ($ in thousands) |
| As of December 31, 2024 |
| As of December 31, 2023 | ||
Revolving Loan Commitments: | ||||||
Barrett Purchaser LLC (d/b/a SIB Development and Consulting, Inc.) | $ | — | $ | | ||
Branford Filtration, LLC (d/b/a Clean Solutions Group) | — | | ||||
Bridgepoint Healthcare, LLC | | | ||||
BUSA Acquisition Co. (d/b/a BankCard USA Merchant Services Inc.) | | — | ||||
Claridge Products and Equipment, LLC | | | ||||
Coastal Television Broadcasting Group LLC | | | ||||
EducationDynamics, LLC | | | ||||
Gulf Winds International Acquisition LLC (d/b/a Gulf Winds International, Inc.) | | | ||||
HC Salon Holdings, Inc. (d/b/a Hair Cuttery) | — | | ||||
Leviathan Intermediate Holdco, LLC | | | ||||
LogicMonitor, Inc. | | — | ||||
Midwest Texas Tea CA, LLC (d/b/a US Petroleum Partners, LLC) | | | ||||
Motivational Marketing, LLC (d/b/a Motivational Fulfillment) | — | | ||||
MSI Information Services, Inc. | — | | ||||
M&M OpCo, LLC (d/b/a Escalent, Inc.) | | | ||||
Naviga Inc. (f/k/a Newscycle Solutions, Inc.) | — | | ||||
PANOS Brands, LLC | | — | ||||
Ribbon Communications Operating Company, Inc. (d/b/a Ribbon Communications Inc.) | | — | ||||
Salon Republic Holdings, LLC (d/b/a Salon Republic, LLC) | | | ||||
Sleep OpCo LLC (d/b/a Brooklyn Bedding LLC) | | | ||||
Surge Amuze Holdings Inc. (d/b/a Amuze Products II, Inc.) | | — | ||||
Telestream Holdings Corporation | | | ||||
The Kyjen Company, LLC (d/b/a Outward Hound) | — | | ||||
TOT Group, Inc. (d/b/a Netevia Group LLC) | | — | ||||
Trailhead Media LLC | | — | ||||
W&A Intermediate Co., LLC (d/b/a Wakefield & Associates, LLC) | | — | ||||
W Electric Intermediate Holdings, LLC (d/b/a Westinghouse Electric Corporation) | | — | ||||
Zephyr Buyer, L.P. (d/b/a The Weather Company, LLC) | | — | ||||
Total unfunded revolving loan commitments | | | ||||
Delayed Draw Loan Commitments: | ||||||
Arcserve Cayman Opco LP (d/b/a Arcserve (USA), LLC) | | — | ||||
Avision Holdings, LLC (d/b/a Avision Sales Group) | | — | ||||
Banner Acquisition Holdings, LLC (d/b/a Banner Industries, Inc.) | — | | ||||
Barrett Purchaser LLC (d/b/a SIB Development and Consulting, Inc.) | — | | ||||
Kelso Industries LLC | | — | ||||
Midwest Texas Tea CA, LLC (d/b/a US Petroleum Partners, LLC) | — | | ||||
Salon Republic Holdings, LLC (d/b/a Salon Republic, LLC) | | | ||||
StoicLane MidCo, LLC (d/b/a StoicLane Inc.) | — | | ||||
Surge Amuze Holdings Inc. (d/b/a Amuze Products II, Inc.) | | — | ||||
TOT Group, Inc. (d/b/a Netevia Group LLC) | | — | ||||
Trailhead Media LLC | | — | ||||
W&A Intermediate Co., LLC (d/b/a Wakefield & Associates, LLC) | | — | ||||
Total unfunded delayed draw loan commitments | | | ||||
Total Unfunded Commitments | $ | | $ | | ||
70
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
As of both December 31, 2024 and December 31, 2023, the Company had commitments to fund equity interests and subordinated notes in STRS JV of $
Indemnification: In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties that provide general indemnifications. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not occurred. The Company expects the risk of any future obligation under these indemnifications to be remote.
Legal Proceedings: In the normal course of business, the Company, WhiteHorse Advisers and WhiteHorse Administrator may be subject to legal and regulatory proceedings that are generally incidental to its ongoing operations. While there can be no assurance of the ultimate disposition of any such proceedings, the Company does not believe any such disposition will have a material adverse effect on the Company’s consolidated financial statements.
NOTE 9 - STOCKHOLDERS’ EQUITY
On March 31, 2023, the Company launched an “at-the-market” offering (the “ATM Program”) by entering into an Equity Distribution Agreement with B. Riley Securities, Inc. pursuant to which the Company may offer and sell, from time to time, through B. Riley Securities, Inc., as the sales agent, shares of its common stock having an aggregate offering amount of up to $
71
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
NOTE 10 - FINANCIAL HIGHLIGHTS
The following is a schedule of financial highlights:
| Year Ended December 31, |
| ||||||||||||||
| 2024 |
| 2023 |
| 2022 |
| 2021 |
| 2020 |
| ||||||
Per share data:(1) |
|
|
|
|
|
|
|
|
| |||||||
Net asset value, beginning of period | $ | |
| $ | |
| $ | |
| $ | |
| $ | | ||
Net investment income |
| |
|
| |
| |
| |
| | |||||
Net realized and unrealized gains (losses) on investments and foreign currency transactions |
| ( |
|
| ( |
| ( |
| |
| | |||||
Net increase in net assets resulting from operations |
| |
|
| |
| |
| |
| | |||||
Distributions declared from net investment income |
| ( |
|
| ( |
| ( |
| ( |
| ( | |||||
Net asset value, end of period | $ | |
| $ | |
| $ | |
| $ | |
| $ | | ||
Total annualized return based on market value(2) |
| ( | % |
| ( | % | ( | % | | % | ( | % | ||||
Total annualized return based on net asset value |
| | % |
| | % | | % | | % | | % | ||||
Net assets, end of period | $ | | $ | | $ | | $ | | $ | | ||||||
Per share market value at end of period | $ | | $ | | $ | | $ | | $ | | ||||||
Shares outstanding end of period |
| |
| |
| |
| |
| | ||||||
Ratios/Supplemental Data:(3) |
|
|
|
|
|
|
|
|
|
| ||||||
Ratio of expenses before incentive fees to average net assets(4) |
| | % |
| | % |
| | % |
| | % |
| | % | |
Ratio of incentive fees to average net assets |
| | % |
| | % |
| | % |
| | % |
| | % | |
Ratio of total expenses to average net assets(4) |
| | % |
| | % |
| | % |
| | % |
| | % | |
Ratio of net investment income to average net assets(4) |
| | % |
| | % |
| | % |
| | % |
| | % | |
Portfolio turnover ratio |
| | % |
| | % |
| | % |
| | % |
| | % | |
| (1) | Based on actual number of shares outstanding at the end of the period or the weighted average shares outstanding for the period, unless otherwise noted, as appropriate. |
| (2) | Total return is based on the change in market price per share during the period and takes into account distributions, if any, reinvested in accordance with the DRIP. |
| (3) | With the exception of the portfolio turnover rate, ratios are reported on an annualized basis. |
| (4) | Calculated using total expenses, including income tax provision. |
Financial highlights are calculated for each securities class taken as a whole. An individual stockholder’s return and ratios may vary based on the timing of capital transactions.
72
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
NOTE 11 - CHANGE IN NET ASSETS RESULTING FROM OPERATIONS PER COMMON SHARE
The following information sets forth the computation of the basic and diluted per share net increase or decrease in net assets resulting from operations:
Year Ended December 31, | ||||||||
($ in thousands except share and per share amounts) |
| 2024 |
| 2023 | 2022 | |||
Net increase (decrease) in net assets resulting from operations | $ | | $ | | $ | | ||
Weighted average shares outstanding |
| |
| |
| | ||
Basic and diluted per share net increase (decrease) in net assets resulting from operations | $ | | $ | | $ | | ||
NOTE 12 – INCOME TAXES
The Company has elected to be treated as a RIC under Subchapter M of the Code, and as a result must distribute substantially all of its taxable income. Accordingly,
The Company distributed
Distributions from net investment income and distributions from net realized capital gains are determined in accordance with U.S. federal tax regulations, which may differ from amounts determined in accordance with GAAP and those differences could be material. These book-to-tax differences are either temporary or permanent in nature. Reclassifications due to permanent book-tax differences have no impact on net assets. Such reclassifications have been reflected in the consolidated statements of changes in net assets.
The reconciliation of net increase in net assets resulting from operations to taxable income is as follows:
| Year ended December 31, | ||||||||
($ in thousands) | 2024 |
| 2023 |
| 2022 | ||||
Net increase (decrease) in net assets resulting from operations | $ | | $ | | $ | | |||
Change in net unrealized (appreciation) depreciation on investments and foreign currency |
| |
| |
| | |||
Other book-to-tax differences |
| |
| |
| | |||
Taxable income before deductions for distributions | $ | | $ | | $ | | |||
The tax character of distributions was as follows:
| Year ended December 31, |
| ||||||||||||||
($ in thousands) | 2024 |
| 2023 |
| 2022 |
| ||||||||||
Ordinary income | $ | |
| | % | $ | |
| | % | $ | |
| | % | |
Return of capital |
| — |
| — |
| — |
| — |
| — |
| — | ||||
Long-term capital gains |
| — |
| — |
| — |
| — |
| — |
| — | ||||
Total distributions | $ | |
| | % | $ | |
| | % | $ | |
| | % | |
The Company may make certain adjustments to the classification of stockholders’ equity as a result of permanent book-to-tax differences. During the current fiscal year, permanent differences primarily due to nondeductible federal taxes resulted in a net increase in accumulated undistributed net investment income and a net decrease in paid-in capital.
73
WHITEHORSE FINANCE, INC.
Notes To Consolidated Financial Statements
December 31, 2024
(in thousands, except share and per share data)
As of December 31, 2024, 2023 and 2022, the tax basis components of distributable earnings were as follows:
| Year ended December 31, | ||||||||
($ in thousands) | 2024 |
| 2023 |
| 2022 | ||||
Ordinary income | $ | | $ | | $ | | |||
Accumulated capital and other losses |
| ( |
| — |
| — | |||
Net unrealized (depreciation) appreciation on investments and foreign currency |
| ( |
| ( |
| ( | |||
Distributions deferred |
| — |
| — |
| — | |||
Total (accumulated deficit) distributable earnings – tax basis | $ | ( | $ | ( | $ | | |||
There were
For tax purposes, net capital losses may be carried over to offset future capital gains, if any. The Company is permitted to carry forward capital losses incurred for an unlimited period, and such losses will retain their character as either short-term or long-term capital losses. As of December 31, 2024 and 2023, the Company had $
As of December 31, 2024, the cost of investments for U.S. federal income tax purposes was $
The Company did not have any uncertain tax positions that met the recognition or measurement criteria of ASC 740-10-25, Income Taxes, nor did the Company have any unrecognized tax benefits as of the period presented herein. Although the Company files federal and state tax returns, its major tax jurisdiction is federal. Tax returns for each of the federal tax years since 2020 remain subject to examination by the Internal Revenue Service.
NOTE 13 – SEGMENT REPORTING
The Company operates through a single reporting segment, with an investment strategy to generate current income and, to a lesser extent, capital appreciation primarily through direct origination of senior secured debt and select equity investments. The Chief Operating Decision Maker (“CODM”), who are the Company’s chief executive officer and chief financial officer, are responsible for assessing performance and allocating resources on behalf of the Company. The CODM assesses performance and makes operating decisions of the Company on a consolidated basis primarily based on the Company’s net increase (decrease) in net assets resulting from operations. In addition to various other factors and metrics, the CODM utilizes net increase (decrease) in net assets resulting from operations as a key metric in implementing investment policy decisions and in evaluating the Company’s distribution policy. As the Company operates as a single reporting segment, the segment assets are reflected on the accompanying consolidated statement of assets and liabilities as “total assets” and the significant segment expenses are listed on the accompanying consolidated statement of operations.
NOTE 14 - SUBSEQUENT EVENTS
Management has evaluated events that have occurred after the balance sheet date but before the consolidated financial statements are issued and other than the items discussed below, the Company has determined that there were no additional subsequent events requiring adjustment or disclosure in the consolidated financial statements.
On January 17, 2025, the terms of the Credit Facility were amended to, among other things, (i) reduce the applicable margins for interest rates to
74
PART II
Item 9A. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
For the year ended December 31, 2024 (the end of the period covered by this report), we met the threshold to be an accelerated filer and did not correctly determine that fact. Based on this failure to correctly identify our filing status for 2024, we did not obtain or file an attestation report by Crowe LLP with respect to our internal control over financial reporting in our Original Form 10-K as required by Item 308(b) of Regulation S-K. After a review, our management, including our chief executive officer and chief financial officer, concluded that, as of December 31, 2024, our disclosure controls and procedures were not effective with respect to our filing status determination. They also determined that such oversight did not evidence any generalized deficiency in our disclosure controls and procedures or a deficiency in our internal control over financial reporting. Our management has taken steps to remediate our disclosure controls and procedures as they pertain to this incident, and we do not expect any recurrence of the issue. Management also assessed the effectiveness of our internal control over financial reporting as of December 31, 2024 as discussed in (b) and concluded WhiteHorse Finance’s internal control over financial reporting was effective.
(b) Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system is a process designed to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements.
WhiteHorse Finance’s internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions recorded necessary to permit the preparation of financial statements in accordance with GAAP. Our policies and procedures also provide reasonable assurance that receipts and expenditures are being made only in accordance with authorizations of management and the directors of WhiteHorse Finance, and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness as to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of WhiteHorse Finance’s internal control over financial reporting as of December 31, 2024. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework issued in 2013. Based on the assessment, management believes that, as of December 31, 2024, our internal control over financial reporting is effective based on those criteria.
WhiteHorse Finance’s registered public accounting firm has issued an audit report on the effectiveness of WhiteHorse Finance’s internal control over financial reporting. This report appears on page 5.
(c) Changes in Internal Control Over Financial Reporting
Management has not identified any change in our internal control over financial reporting that occurred during the fourth fiscal quarter of 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
75
PART IV
Item 15. Exhibits and Financial Statement Schedules
The following documents are filed as part of this annual report on Form 10-K:
Number | ||
3.1 | ||
3.2 | ||
4.1 | ||
4.2 | ||
4.3 | ||
4.4 | Form of 6.50% Notes due 2025 (incorporated herein by reference to Exhibit 4.2) | |
4.5 | ||
4.6 | ||
4.7 | ||
4.8 | ||
4.9 | ||
10.1 | ||
10.2 | ||
10.3 | ||
10.4 | ||
10.5 | ||
10.6 | ||
76
10.7 | ||
10.8 | ||
10.9 | ||
10.10 | ||
10.11 | ||
10.12 | ||
10.13 | ||
10.14 | ||
10.15 | ||
10.16 | ||
10.17 | ||
10.18 | ||
77
10.19 | ||
14.1 | ||
14.2 | ||
19.1 | ||
21.1 | ||
23.1* | ||
23.2* | ||
24 | ||
31.1* | ||
31.2* | ||
32.1* | ||
32.2* | ||
97.1 | ||
99.1 | ||
99.2 | ||
101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
* | Filed herewith |
78
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
|
| WhiteHorse Finance, Inc. |
|
|
|
Dated: June 9, 2025 | By | /s/ Stuart Aronson |
|
| Name: Stuart Aronson |
|
| Title: Chief Executive Officer |
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Stuart Aronson and Joyson C. Thomas as his true and lawful attorneys-in-fact, each with full power of substitution, for him in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact or their substitute or substitutes may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature |
| Title |
| Date |
/s/ Stuart Aronson | Chief Executive Officer and Director | June 9, 2025 | ||
Stuart Aronson | (Principal Executive Officer) | |||
/s/ Joyson C. Thomas | Chief Financial Officer | June 9, 2025 | ||
Joyson C. Thomas | (Principal Financial and Accounting | |||
/s/ John Bolduc | Chairman of the Board of Directors | June 9, 2025 | ||
John Bolduc | ||||
/s/ Jay Carvell | Director | June 9, 2025 | ||
Jay Carvell | ||||
/s/ Rick P. Frier | Director | June 9, 2025 | ||
Rick P. Frier | ||||
/s/ Rick D. Puckett | Director | June 9, 2025 | ||
Rick D. Puckett | ||||
/s/ G. Stacy Smith | Director | June 9, 2025 | ||
G. Stacy Smith | ||||
/s/ John P. Volpe | Director | June 9, 2025 | ||
John P. Volpe |
79