WhiteHorse Finance, Inc. Announces Third Quarter 2017 Earnings Results
NEW YORK, Nov. 7, 2017 /PRNewswire/ -- WhiteHorse Finance, Inc. ("WhiteHorse Finance" or the "Company") (NASDAQ: WHF) today announced its financial results for the quarter ended September 30, 2017.
Third Quarter 2017 Summary Highlights
- New investments of $8.3 million
- Net investment income of $5.9 million
- Third quarter net investment income of $0.290 per share
- Third quarter distribution of $0.355 per share
Stuart Aronson, WhiteHorse Finance's Chief Executive Officer commented, "Our third quarter results reflect a commitment to the conservative, disciplined and diverse investment strategy that our high-quality, high-yield portfolio is built on. While these principles restricted us from completing select transactions during the quarter, which impacted our net investment income, this was done with the long-term interests of our business and our shareholders in mind. Our overall performance was still strong, as we saw an increase in NAV, and our portfolio yield held constant. We remain confident in our ability to source high-quality originations that will unlock additional growth, protect NAV, work to earn our yearly dividend, and ultimately maximize long-term shareholder value.
Portfolio and Investment Activity
As of September 30, 2017, the fair value of WhiteHorse Finance's investment portfolio was $435.3 million, compared with $437.9 million as of June 30, 2017. The portfolio at September 30, 2017 consisted of 38 positions across 31 companies with an average investment size of $11.5 million and a weighted average effective yield of 11.9%, remaining relatively flat as compared to last quarter. The majority of the portfolio was comprised of senior secured loans, and these loans were substantially all variable-rate investments (primarily indexed to LIBOR), which should continue to position the portfolio well for a potential rising interest rate environment.
During the three months ended September 30, 2017, WhiteHorse Finance made investments in one new portfolio company totaling $8.3 million. Gross proceeds from sales and repayments totaled $14.8 million for the quarter. The Company continued to be highly selective in deploying new investments.
Results of Operations
For the three months ended September 30, 2017, net investment income was approximately $5.9 million, compared with approximately $7.3 million for the same period in the prior year, representing a decrease of 19.2%. The decrease in net investment income was primarily attributable to a decrease of investment income due to lower fee income and an increase in interest expense resulting from higher interest rates and higher borrowing balances on the Company's line of credit facility as compared to the same period in the prior year. Since 2015, cumulative core net investment income, a non-GAAP financial measure, has exceeded distributions to stockholders for the last 11 quarters.(1)
For the three months ended September 30, 2017, WhiteHorse Finance reported realized and unrealized gains on investments of $3.1 million. This compares with realized and unrealized gains on investments of $1.3 million for the three months ended September 30, 2016. The increase in realized and unrealized gains on investments was primarily attributable to favorable fair value adjustments on an aggregate basis.
WhiteHorse Finance reported a net increase in net assets resulting from operations of approximately $9.1 million for the three months ended September 30, 2017, which compares with a net increase of $8.6 million for the three months ended September 30, 2016.
WhiteHorse Finance's NAV was $285.5 million, or $13.92 per share, as of September 30, 2017, as compared with $283.8 million, or $13.83 per share, reported as of June 30, 2017.
Liquidity and Capital Resources
As of September 30, 2017, WhiteHorse Finance had cash and cash equivalents of $41.9 million, as compared with $43.7 million as of June 30, 2017, inclusive of restricted cash. As of September 30, 2017, the Company also had $45.0 million of undrawn capacity under its revolving credit facility.
Distributions
On September 6, 2017, the Company declared a distribution of $0.355 per share for the quarter ended September 30, 2017, consistent for the twentieth consecutive quarter since the Company's IPO. The distribution was paid on October 3, 2017 to shareholders of record as of September 18, 2017.
Distributions are paid from taxable earnings and may include return of capital and/or capital gains. The specific tax characteristics of the distributions will be reported to stockholders on Form 1099-DIV after the end of the calendar year and in the Company's periodic reports filed with the Securities and Exchange Commission.
Conference Call
WhiteHorse Finance will host a conference call to discuss its third quarter results at 11:00 am ET on Tuesday, November 7, 2017. To access the teleconference, please dial 706-758-9224 (domestic and international) approximately 10 minutes before the teleconference's scheduled start time and reference ID #4498809. Investors may also access the call on the investor relations portion of the Company's website at www.whitehorsefinance.com.
If you are unable to access the live teleconference, a replay will be available beginning approximately two hours after the call's completion through November 14, 2017. The teleconference replay can be accessed by dialing 404-537-3406 (domestic and international) and entering ID #4498809. A webcast replay will also be available on the investor relations portion of the Company's website at www.whitehorsefinance.com.
About WhiteHorse Finance, Inc.
WhiteHorse Finance is a business development company that originates and invests in loans to privately held lower mid-cap companies across a broad range of industries. The Company's investment activities are managed by H.I.G. WhiteHorse Advisers, LLC, an affiliate of H.I.G. Capital, LLC, ("H.I.G. Capital"). H.I.G. Capital is a leading global alternative asset manager with $24 billion of capital under management(2) across a number of funds focused on the small and mid-cap markets. For more information about H.I.G. Capital, please visit http://www.higcapital.com. For more information about the Company, please visit http://www.whitehorsefinance.com.
Forward-Looking Statements
This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.
| (1) Net investment income and core net investment income during the three months ended December 31, 2015 were $0.237 per share and $0.352 per share, respectively. Net investment income was equal to core net investment income for every other quarter since the Company's initial public offering. Core net investment income is a non-GAAP financial measure. The Company believes that core net investment income provides useful information to investors and management because it reflects the Company's financial performance excluding the net impact of costs associated with the refinancing of the Company's revolving credit facility. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. |
| (2) Based on total capital commitments managed by H.I.G. Capital and affiliates. |
| WhiteHorse Finance, Inc. Consolidated Statements of Assets and Liabilities (in thousands, except share and per share data) |
||||||||
| September 30, 2017 |
December 31, 2016 |
|||||||
| (Unaudited) |
||||||||
| Assets |
||||||||
| Investments, at fair value |
||||||||
| Non-controlled/non-affiliate company investments |
$ |
404,752 |
$ |
385,216 |
||||
| Non-controlled affiliate company investments |
30,571 |
26,498 |
||||||
| Total investments, at fair value (amortized cost $444,896 and $427,689, |
435,323 |
411,714 |
||||||
| Cash and cash equivalents |
37,103 |
17,036 |
||||||
| Restricted cash and cash equivalents |
4,808 |
11,858 |
||||||
| Receivables from investments sold |
1,562 |
881 |
||||||
| Interest receivable |
4,538 |
3,891 |
||||||
| Prepaid expenses and other receivables |
36 |
854 |
||||||
| Total assets |
$ |
483,370 |
$ |
446,234 |
||||
| Liabilities |
||||||||
| Debt |
$ |
181,928 |
$ |
182,338 |
||||
| Distributions payable |
7,284 |
6,498 |
||||||
| Management fees payable |
6,518 |
5,476 |
||||||
| Payables for investments purchased |
— |
995 |
||||||
| Accounts payable and accrued expenses |
1,604 |
1,058 |
||||||
| Interest payable |
488 |
480 |
||||||
| Total liabilities |
197,822 |
196,845 |
||||||
| Commitments and contingencies |
||||||||
| Net assets |
||||||||
| Common stock, 20,518,104 and 18,303,890 shares issued and outstanding, |
20 |
18 |
||||||
| Paid-in capital in excess of par |
302,724 |
272,242 |
||||||
| Accumulated overdistributed net investment income |
(6,300) |
(5,423) |
||||||
| Accumulated realized losses on investments |
(686) |
(842) |
||||||
| Accumulated unrealized depreciation on investments |
(10,210) |
(16,606) |
||||||
| Total net assets |
285,548 |
249,389 |
||||||
| Total liabilities and total net assets |
$ |
483,370 |
$ |
446,234 |
||||
| Number of shares outstanding |
20,518,104 |
18,303,890 |
||||||
| Net asset value per share |
$ |
13.92 |
$ |
13.63 |
||||
| WhiteHorse Finance, Inc. Consolidated Statements of Operations (Unaudited) (in thousands, except share and per share data) |
||||||||||||||||
| Three months ended |
Nine months ended |
|||||||||||||||
| 2017 |
2016 |
2017 |
2016 |
|||||||||||||
| Investment income |
||||||||||||||||
| From non-controlled/non-affiliate company investments |
||||||||||||||||
| Interest income |
$ |
12,235 |
$ |
12,507 |
$ |
36,830 |
$ |
36,633 |
||||||||
| Fee income |
161 |
683 |
1,986 |
1,615 |
||||||||||||
| From non-controlled affiliate company investments |
||||||||||||||||
| Dividend income |
628 |
840 |
2,068 |
2,243 |
||||||||||||
| Total investment income |
13,024 |
14,030 |
40,884 |
40,491 |
||||||||||||
| Expenses |
||||||||||||||||
| Interest expense |
2,379 |
2,050 |
7,382 |
5,917 |
||||||||||||
| Base management fees |
2,481 |
2,250 |
7,133 |
6,749 |
||||||||||||
| Performance-based incentive fees |
1,487 |
1,817 |
4,852 |
5,116 |
||||||||||||
| Administrative service fees |
246 |
134 |
538 |
550 |
||||||||||||
| General and administrative expenses |
481 |
511 |
1,571 |
1,700 |
||||||||||||
| Total expenses |
7,074 |
6,762 |
21,476 |
20,032 |
||||||||||||
| Net investment income |
5,950 |
7,268 |
19,408 |
20,459 |
||||||||||||
| Realized and unrealized gains (losses) on investments |
||||||||||||||||
| Net realized gains (losses) |
||||||||||||||||
| Non-controlled/non-affiliate company investments |
133 |
660 |
156 |
(478) |
||||||||||||
| Net realized gains (losses) |
133 |
660 |
156 |
(478) |
||||||||||||
| Net change in unrealized appreciation (depreciation) |
||||||||||||||||
| Non-controlled/non-affiliate company investments |
1,390 |
1,856 |
2,323 |
3,466 |
||||||||||||
| Non-controlled affiliate company investments |
1,583 |
(1,190) |
4,073 |
(1,190) |
||||||||||||
| Net change in unrealized appreciation |
2,973 |
666 |
6,396 |
2,276 |
||||||||||||
| Net realized and unrealized gains on investments |
3,106 |
1,326 |
6,552 |
1,798 |
||||||||||||
| Net increase in net assets resulting from operations |
$ |
9,056 |
$ |
8,594 |
$ |
25,960 |
$ |
22,257 |
||||||||
| Per Common Share Data |
||||||||||||||||
| Basic and diluted earnings per common share |
$ |
0.45 |
$ |
0.47 |
$ |
1.36 |
$ |
1.22 |
||||||||
| Dividends and distributions declared per common share |
$ |
0.36 |
$ |
0.36 |
$ |
1.07 |
$ |
1.07 |
||||||||
| Basic and diluted weighted average common shares outstanding |
20,518,104 |
18,303,890 |
19,062,764 |
18,303,890 |
||||||||||||
| WhiteHorse Finance, Inc. Consolidated Schedule of Investments (Unaudited) September 30, 2017 (in thousands) |
||||||||||||||||||||||
| Investment Type(1) |
Spread |
Interest |
Maturity |
Principal/ |
Amortized |
Fair |
Fair Value |
|||||||||||||||
| North America |
||||||||||||||||||||||
| Debt Investments |
||||||||||||||||||||||
| Advertising |
||||||||||||||||||||||
| Fluent, LLC (f/k/a Fluent |
||||||||||||||||||||||
| First Lien Secured Term |
L+ 11.50% |
12.74% |
12/08/20 |
$ |
25,971 |
$ |
25,644 |
$ |
25,971 |
$ |
9.10 |
% |
||||||||||
| Intersection Acquisition, LLC |
||||||||||||||||||||||
| First Lien Secured Term |
L+ 12.25% |
13.58% |
09/15/20 |
15,202 |
15,113 |
15,050 |
5.27 |
|||||||||||||||
| Outcome Health |
||||||||||||||||||||||
| First Lien Secured Term |
L+ 6.50% |
7.75% |
12/22/21 |
16,241 |
14,887 |
16,079 |
5.63 |
|||||||||||||||
| 57,414 |
55,644 |
57,100 |
20.00 |
|||||||||||||||||||
| Application Software |
||||||||||||||||||||||
| Intermedia Holdings, Inc. |
||||||||||||||||||||||
| Second Lien Secured Term |
L+ 9.50% |
10.81% |
02/03/25 |
18,000 |
17,668 |
17,759 |
6.22 |
|||||||||||||||
| Auto Parts & Equipment |
||||||||||||||||||||||
| Crowne Group, LLC |
||||||||||||||||||||||
| First Lien Secured Term |
L+ 9.25% |
10.57% |
05/26/21 |
12,125 |
11,818 |
12,121 |
4.24 |
|||||||||||||||
| Broadcasting |
||||||||||||||||||||||
| Multicultural Radio |
||||||||||||||||||||||
| First Lien Secured Term |
L+ 10.50% |
11.74% |
06/27/19 |
13,820 |
13,820 |
13,752 |
4.82 |
|||||||||||||||
| Data Processing & Outsourced Services |
||||||||||||||||||||||
| FPT Operating Company, LLC/ |
||||||||||||||||||||||
| TLabs Operating Company, |
||||||||||||||||||||||
| First Lien Secured Term |
L+ 8.25% |
9.49% |
12/23/21 |
23,453 |
23,100 |
23,336 |
8.17 |
|||||||||||||||
| Department Stores |
||||||||||||||||||||||
| Mills Fleet Farm Group, LLC |
||||||||||||||||||||||
| Second Lien Secured Term |
L+ 9.75% |
10.99% |
02/26/23 |
7,146 |
7,033 |
7,145 |
2.50 |
|||||||||||||||
| Diversified Support Services |
||||||||||||||||||||||
| Account Control Technology |
||||||||||||||||||||||
| First Lien Secured Term |
L+ 8.50% |
9.81% |
04/28/22 |
17,575 |
17,111 |
17,089 |
5.98 |
|||||||||||||||
| Climate Pros, Inc. |
||||||||||||||||||||||
| First Lien Secured Term |
L+ 10.00% |
11.32% |
02/28/22 |
3,985 |
3,915 |
3,985 |
1.40 |
|||||||||||||||
| Sitel Worldwide Corporation |
||||||||||||||||||||||
| Second Lien Secured Term |
L+ 9.50% |
10.81% |
09/18/22 |
8,670 |
8,547 |
8,651 |
3.03 |
|||||||||||||||
| 30,230 |
29,573 |
29,725 |
10.41 |
|||||||||||||||||||
| Environmental & Facilities Services |
||||||||||||||||||||||
| Montrose Environmental |
||||||||||||||||||||||
| Second Lien Secured Term |
L+ 9.50% |
10.74% |
09/30/20 |
8,500 |
8,330 |
8,330 |
2.92 |
|||||||||||||||
| WhiteHorse Finance, Inc. Consolidated Schedule of Investments (Unaudited) - (continued) September 30, 2017 (in thousands) |
||||||||||||||||||||||
| Investment Type(1) |
Spread |
Interest |
Maturity |
Principal/ |
Amortized |
Fair |
Fair Value |
|||||||||||||||
| Food Retail |
||||||||||||||||||||||
| AG Kings Holdings, Inc. |
||||||||||||||||||||||
| First Lien Secured Term |
L+ 9.95% |
11.28% |
08/10/21 |
$ |
13,720 |
$ |
13,262 |
$ |
13,583 |
4.76 |
% |
|||||||||||
| Crews of California, Inc. |
||||||||||||||||||||||
| First Lien Secured Term |
L+ 11.00% |
12.23% |
11/20/19 |
17,025 |
16,886 |
16,944 |
5.93 |
|||||||||||||||
| First Lien Secured Revolving Loan |
L+ 11.00% |
12.23% |
11/20/19 |
5,107 |
5,051 |
5,082 |
1.78 |
|||||||||||||||
| First Lien Secured Delayed Draw Loan |
L+ 11.00% |
12.23% |
11/20/19 |
4,934 |
4,883 |
4,910 |
1.72 |
|||||||||||||||
| 40,786 |
40,082 |
40,519 |
14.19 |
|||||||||||||||||||
| Health Care Facilities |
||||||||||||||||||||||
| Grupo HIMA San Pablo, Inc. |
||||||||||||||||||||||
| First Lien Secured Term |
L+ 9.00% |
10.50% |
01/31/18 |
14,300 |
14,280 |
12,474 |
4.37 |
|||||||||||||||
| Second Lien Secured Term |
N/A |
15.75% |
07/31/18 |
1,027 |
1,020 |
240 |
0.08 |
|||||||||||||||
| 15,327 |
15,300 |
12,714 |
4.45 |
|||||||||||||||||||
| Internet Retail |
||||||||||||||||||||||
| Clarus Commerce, LLC |
||||||||||||||||||||||
| First Lien Secured Term |
L+ 10.17% |
11.41% |
03/17/21 |
6,000 |
5,917 |
6,000 |
2.10 |
|||||||||||||||
| Internet Software & Services |
||||||||||||||||||||||
| StackPath, LLC & Highwinds |
||||||||||||||||||||||
| Second Lien Secured Term |
L+ 9.50% |
10.81% |
02/02/24 |
18,000 |
17,592 |
17,667 |
6.19 |
|||||||||||||||
| Investment Banking and Brokerage |
||||||||||||||||||||||
| JVMC Holdings Corp. |
||||||||||||||||||||||
| First Lien First Out Secured Term |
L+ 8.02% |
9.26% |
05/05/22 |
13,331 |
13,055 |
13,198 |
4.62 |
|||||||||||||||
| First Lien Last Out Secured Term |
L+ 12.00% |
13.24% |
05/05/22 |
4,938 |
4,835 |
4,888 |
1.71 |
|||||||||||||||
| 18,269 |
17,890 |
18,086 |
6.33 |
|||||||||||||||||||
| IT Consulting & Other Services |
||||||||||||||||||||||
| AST-Applications Software |
||||||||||||||||||||||
| First Lien Secured Term |
L+ 9.00% |
10.24% |
01/10/23 |
4,919 |
4,817 |
4,526 |
1.59 |
|||||||||||||||
| Office Services & Supplies |
||||||||||||||||||||||
| Katun Corporation |
||||||||||||||||||||||
| Second Lien Secured Term |
L+ 11.25% |
12.49% |
01/25/21 |
4,422 |
4,400 |
4,390 |
1.54 |
|||||||||||||||
| Oil & Gas Exploration & Production |
||||||||||||||||||||||
| Caelus Energy Alaska O3, LLC |
||||||||||||||||||||||
| Second Lien Secured Term |
L+ 7.50% |
8.82% |
04/15/20 |
13,000 |
12,921 |
10,737 |
3.76 |
|||||||||||||||
| Other Diversified Financial Services |
||||||||||||||||||||||
| Sigue Corporation(4) |
||||||||||||||||||||||
| Second Lien Secured Term |
L+ 11.50% |
12.83% |
12/27/18 |
25,000 |
24,876 |
24,395 |
8.54 |
|||||||||||||||
| The Pay-O-Matic Corp. |
||||||||||||||||||||||
| First Lien Secured Term |
L+ 11.00% |
12.23% |
04/02/18 |
12,259 |
12,175 |
12,222 |
4.28 |
|||||||||||||||
| 37,259 |
37,051 |
36,617 |
12.82 |
|||||||||||||||||||
| WhiteHorse Finance, Inc. Consolidated Schedule of Investments (Unaudited) - (continued) September 30, 2017 (in thousands) |
|||||||||||||||||||||||||
| Investment Type(1) |
Spread |
Interest |
Maturity |
Principal/ |
Amortized |
Fair |
Fair Value |
||||||||||||||||||
| Research & Consulting Services |
|||||||||||||||||||||||||
| Project Time & Cost, LLC |
|||||||||||||||||||||||||
| First Lien Secured Term |
L+ 12.00% |
13.24% |
10/09/20 |
$ |
9,404 |
$ |
9,291 |
$ |
8,968 |
3.14 |
% |
||||||||||||||
| Specialized Consumer Services |
|||||||||||||||||||||||||
| Pre-Paid Legal Services, Inc. |
|||||||||||||||||||||||||
| Second Lien Secured Term |
L+ 9.00% |
10.25% |
07/01/20 |
19,000 |
18,903 |
19,144 |
6.70 |
||||||||||||||||||
| Specialized Finance |
|||||||||||||||||||||||||
| Golden Pear Funding III, LLC(5) |
|||||||||||||||||||||||||
| Second Lien Secured Term |
L+ 10.25% |
11.56% |
06/25/20 |
25,000 |
24,841 |
24,797 |
8.68 |
||||||||||||||||||
| Second Lien Secured |
L+ 10.25% |
11.56% |
06/25/20 |
5,000 |
4,968 |
4,959 |
1.74 |
||||||||||||||||||
| Oasis Legal Finance, LLC(5) |
|||||||||||||||||||||||||
| Second Lien Secured Term |
L+ 10.75% |
11.99% |
03/09/22 |
20,000 |
19,677 |
20,000 |
7.00 |
||||||||||||||||||
| 50,000 |
49,486 |
49,756 |
17.42 |
||||||||||||||||||||||
| Trucking |
|||||||||||||||||||||||||
| Sunteck / TTS Holdings, LLC |
|||||||||||||||||||||||||
| Second Lien Secured Term |
L+ 9.00% |
10.32% |
06/15/22 |
3,500 |
3,447 |
3,456 |
1.21 |
||||||||||||||||||
| Total Debt Investments |
410,574 |
404,083 |
401,848 |
140.72 |
|||||||||||||||||||||
| Equity Investments |
|||||||||||||||||||||||||
| Advertising |
|||||||||||||||||||||||||
| Cogint, Inc. (f/k/a IDI, Inc.) |
N/A |
N/A |
12/08/25 |
187 |
- |
243 |
0.09 |
||||||||||||||||||
| Food Retail |
|||||||||||||||||||||||||
| Crews of California, Inc. |
N/A |
N/A |
12/31/24 |
- |
- |
1,544 |
0.54 |
||||||||||||||||||
| Nicholas & Associates, LLC |
N/A |
N/A |
12/31/24 |
3 |
- |
248 |
0.09 |
||||||||||||||||||
| Pinnacle Management Group, LLC |
N/A |
N/A |
12/31/24 |
3 |
- |
551 |
0.19 |
||||||||||||||||||
| RC3 Enterprises, LLC Warrants(4) |
N/A |
N/A |
12/31/24 |
3 |
- |
138 |
0.05 |
||||||||||||||||||
| 9 |
- |
2,481 |
0.87 |
||||||||||||||||||||||
| Other Diversified Financial Services |
|||||||||||||||||||||||||
| Aretec Group, Inc. (4)(5)(6) |
N/A |
N/A |
N/A |
536 |
20,693 |
12,329 |
4.32 |
||||||||||||||||||
| Specialized Finance |
|||||||||||||||||||||||||
| NMFC Senior Loan Program I |
N/A |
N/A |
06/13/20 |
20,000 |
20,120 |
18,242 |
6.39 |
||||||||||||||||||
| Trucking |
|||||||||||||||||||||||||
| Fox Rent A Car, Inc. Warrants(4) |
N/A |
N/A |
N/A |
- |
- |
180 |
0.06 |
||||||||||||||||||
| Total Equity Investments |
20,732 |
40,813 |
33,475 |
11.73 |
|||||||||||||||||||||
| Total Investments |
$ |
431,306 |
$ |
444,896 |
$ |
435,323 |
152.45 |
||||||||||||||||||
| (1) |
Except as otherwise noted, all investments are non-controlled/non-affiliate investments as defined by the Investment Company Act of 1940, as amended (the "1940 Act"), and provide collateral for the Company's credit facility. |
| (2) |
The investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate ("LIBOR" or "L"), which resets monthly, quarterly or semiannually. The 1, 3 and 6 month LIBOR were 1.2%, 1.3% and 1.5%, respectively, as of September 30, 2017. |
| (3) |
The interest rate is the "all-in-rate" including the current index and spread, the fixed rate, and the payment-in-kind ("PIK") interest rate, as the case may be. |
| (4) |
The investment or a portion of the investment does not provide collateral for the Company's credit facility. |
| (5) |
Not a qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of total assets. Qualifying assets represented 83% of total assets as of the date of the consolidated schedule of investments. |
| (6) |
Investment is a non-controlled/affiliate investment as defined by the 1940 Act. |
| (7) |
The fair value of the investment was determined using significant unobservable inputs. |
SOURCE WhiteHorse Finance, Inc.
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