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EX-32.2 - EXHIBIT 32.2 - WhiteHorse Finance, Inc.tv491503_ex32-2.htm
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EX-31.2 - EXHIBIT 31.2 - WhiteHorse Finance, Inc.tv491503_ex31-2.htm
EX-31.1 - EXHIBIT 31.1 - WhiteHorse Finance, Inc.tv491503_ex31-1.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

Form 10-Q

 

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2018

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: 814-00967

 

WHITEHORSE FINANCE, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware 45-4247759
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)

 

1450 Brickell Avenue, 31st Floor

Miami, Florida

33131
(Address of Principal Executive Offices) (Zip Code)

 

(305) 381-6999

(Registrant’s Telephone Number, Including Area Code)

 

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.  Yes x    No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).  Yes ¨    No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   ¨ Accelerated filer   x
           
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 is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).  Yes ¨    No x

 

As of May 9, 2018 the Registrant had 20,531,948 shares of common stock, $0.001 par value, outstanding.

 

 

1 

 

 

WHITEHORSE FINANCE, INC.

 

TABLE OF CONTENTS

 

    Page
Part I. Financial Information 3
Item 1. Financial Statements 3
  Consolidated Statements of Assets and Liabilities as of March 31, 2018 (Unaudited) and December 31, 2017 3
  Consolidated Statements of Operations for the three months ended March 31, 2018 (Unaudited) and 2017 (Unaudited) 4
  Consolidated Statements of Changes in Net Assets for the three months ended March 31, 2018 (Unaudited) and 2017 (Unaudited) 5
  Consolidated Statements of Cash Flows for the three months ended March 31, 2018 (Unaudited) and 2017 (Unaudited) 6
  Consolidated Schedules of Investments as of March 31, 2018 (Unaudited) and December 31, 2017 7
  Notes to the Consolidated Financial Statements (Unaudited) 15
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 32
Item 3. Quantitative and Qualitative Disclosures about Market Risk 46
Item 4. Controls and Procedures 46
Part II. Other Information 47
Item 1. Legal Proceedings 47
Item 1A. Risk Factors 47
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 50
Item 3. Defaults Upon Senior Securities 50
Item 4. Mine Safety Disclosures 50
Item 5. Other Information 50
Item 6. Exhibits 50

 

2 

 

 

Part I. Financial Information

 

Item 1. Financial Statements

 

WhiteHorse Finance, Inc.

Consolidated Statements of Assets and Liabilities

(in thousands, except share and per share data)

 

   March 31, 2018   December 31, 2017 
   (Unaudited)     
Assets        
Investments, at fair value          
Non-controlled/non-affiliate company investments  $423,309   $404,434 
Non-controlled affiliate company investments   44,433    36,246 
Total investments, at fair value (amortized cost $470,309 and $448,522, respectively)   467,742    440,680 
Cash and cash equivalents   11,992    35,219 
Restricted cash and cash equivalents   6,580    3,717 
Interest receivable   5,030    4,947 
Receivables from investments sold   463    783 
Prepaid expenses and other receivables   838    185 
Total assets  $492,645   $485,531 
           
Liabilities          
Debt  $182,317   $182,122 
Distributions payable   7,289    7,289 
Management fees payable   7,736    7,848 
Accounts payable and accrued expenses   1,064    701 
Interest payable   562    527 
Advances received from unfunded credit facilities   161    92 
Total liabilities   199,129    198,579 
           
Commitments and contingencies (See Note 7)          
           
Net assets          
Common stock, 20,531,948 shares issued and outstanding, par value $0.001 per share and 100,000,000 authorized   20    20 
Paid-in capital in excess of par   302,292    302,292 
Accumulated overdistributed net investment income   (5,495)   (6,784)
Accumulated net realized losses on investments   (734)   (734)
Accumulated net unrealized depreciation on investments   (2,567)   (7,842)
Total net assets   293,516    286,952 
Total liabilities and total net assets  $492,645   $485,531 
           
Number of shares outstanding   20,531,948    20,531,948 
Net asset value per share  $14.30   $13.98 

 

See notes to the consolidated financial statements

 

3 

 

 

WhiteHorse Finance, Inc.

Consolidated Statements of Operations (Unaudited)

(in thousands, except share and per share data)

  

   Three months ended March 31, 
    2018    2017 
Investment income          
From non-controlled/non-affiliate company investments          
Interest income  $13,763   $12,018 
Fee income   2,192    767 
From non-controlled affiliate company investments          
Dividend income   650    790 
Total investment income   16,605    13,575 
           
Expenses          
Interest expense   2,565    2,444 
Base management fees   2,445    2,262 
Performance-based incentive fees   2,144    1,631 
Administrative service fees   175    134 
General and administrative expenses   698    582 
Total expenses   8,027    7,053 
Net investment income   8,578    6,522 
           
Realized and unrealized gains (losses) on investments          
Net realized gains          
Non-controlled/non-affiliate company investments   -    23 
Net realized gains   -    23 
Net change in unrealized appreciation (depreciation)          
Non-controlled/non-affiliate company investments   (2,911)   3,227 
Non-controlled affiliate company investments   8,186    (143)
Net change in unrealized appreciation   5,275    3,084 
Net realized and unrealized gains on investments   5,275    3,107 
Net increase in net assets resulting from operations  $13,853   $9,629 
           
Per Common Share Data          
Basic and diluted earnings per common share  $0.68   $0.53 
Dividends and distributions declared per common share  $0.36   $0.36 
Basic and diluted weighted average common shares outstanding   20,531,948    18,303,890 

 

See notes to the consolidated financial statements

 

4 

 

 

WhiteHorse Finance, Inc.

Consolidated Statements of Changes in Net Assets (Unaudited)

(in thousands, except share and per share data)

 

   Common Stock  

Paid-in

Capital in

  

Accumulated

Overdistributed Net

Investment

  

Accumulated

Net Realized

Losses

on

  

Accumulated

Net Unrealized

Depreciation on

   Total Net 
   Shares   Par amount   Excess of Par   Income   Investments   Investments   Assets 
Balance at December 31, 2016   18,303,890   $18   $272,242   $(5,423)  $(842)  $(16,606)  $249,389 
                                    
Net increase in net assets resulting from operations   -    -    -    6,522    23    3,084    9,629 
                                    
Distributions declared   -    -    -    (6,498)   -    -    (6,498)
                                    
Balance at March 31, 2017   18,303,890   $18   $272,242   $(5,399)  $(819)  $(13,522)  $252,520 
                                    
Balance at December 31, 2017   20,531,948   $20   $302,292   $(6,784)  $(734)  $(7,842)  $286,952 
                                    
Net increase in net assets resulting from operations   -    -    -    8,578    -    5,275    13,853 
                                    
Distributions declared   -    -    -    (7,289)   -    -    (7,289)
                                    
Balance at March 31, 2018   20,531,948   $20   $302,292   $(5,495)  $(734)  $(2,567)  $293,516 

 

See notes to the consolidated financial statements

 

5 

 

  

WhiteHorse Finance, Inc.

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

 

  

Three months

ended March 31,

 
   2018   2017 
Cash flows from operating activities          
Net increase in net assets resulting from operations  $13,853   $9,629 
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:          
Paid-in-kind income   (142)   (154)
Net realized gains on investments   -    (23)
Net unrealized appreciation on investments   (5,275)   (3,084)
Accretion of discount   (1,598)   (837)
Amortization of deferred financing costs   195    214 
Acquisition of investments   (85,883)   (46,046)
Proceeds from principal payments and sales of portfolio investments   65,836    30,193 
Net changes in operating assets and liabilities:          
Interest receivable   (83)   (1,770)
Prepaid expenses and other receivables   (653)   (40)
Receivable from investments sold   320    777 
Payables for investments purchased   -    (995)
Management fees payable   (112)   85 
Accounts payable and accrued expenses   363    165 
Interest payable   35    14 
Advances received from unfunded credit facilities   69    - 
Net cash used in operating activities   (13,075)   (11,872)
           
Cash flows from financing activities          
Borrowings   33,600    33,395 
Repayment of debt   (33,600)   (23,805)
Distributions paid to common stockholders, net of distributions reinvested   (7,289)   (6,498)
Net cash (used in) provided by financing activities   (7,289)   3,092 
           
Net change in cash, cash equivalents and restricted cash   (20,364)   (8,780)
Cash, cash equivalents and restricted cash at beginning of period   38,936    28,894 
Cash, cash equivalents and restricted cash at end of period  $18,572   $20,114 
           
Supplemental disclosure of cash flow information:          
Interest paid  $2,335   $2,216 

 

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:

 

   March 31, 
   2018   2017 
Cash and cash equivalents  $11,992   $15,577 
Restricted cash   6,580    4,537 
Total cash, cash equivalents and restricted cash presented in consolidated statements of cash flows  $18,572   $20,114 

 

See notes to the consolidated financial statements

 

6 

 

 

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited)

March 31, 2018

(in thousands)

 

Investment Type(1)  Spread
Above Index(2)
  Interest
Rate(3)
  Maturity
Date
  Principal/
Share
Amount
   Amortized
Cost
   Fair
Value(10)
   Fair Value
As A
Percentage
of Net
Assets
 
North America                             
Debt Investments                             
Advertising                             
Fluent, LLC                             
First Lien Secured Term Loan  L+ 7.00%  8.87% 03/27/23   12,500   12,500   12,500    4.26%
   (0.50% Floor)                          
Outcome Health                             
First Lien Secured Term Loan  L+ 9.50%  11.44% 12/22/21   11,298    10,457    9,716    3.31 
   (1.00% Floor)  (3.00%  PIK)                      
             23,798    22,957    22,216    7.57 
Application Software                             
Intermedia Holdings, Inc.                             
Second Lien Secured Term Loan  L+ 9.50%  11.27% 02/03/25   18,000    17,691    17,892    6.10 
   (1.00% Floor)                          
Automotive Retail                             
Team Car Care Holdings, LLC                             
First Lien Secured Term Loan(4)  L+ 8.00%  9.89% 02/23/23   18,453    18,045    18,078    6.16 
   (1.00% Floor)                          
First Lien Secured Revolving Loan(4)(7)  L+ 7.00%  11.75% 02/23/23   -    -    3    - 
   (1.00% Floor)                          
             18,453    18,045      18,081     6.16 
Broadcasting                             
Multicultural Radio Broadcasting, Inc.                             
First Lien Secured Term Loan  L+ 8.00%  9.89% 12/28/22   19,920    19,542    19,580    6.67 
   (1.00% Floor)                          
Rural Media Group, Inc.                             
First Lien Secured Term Loan  L+ 6.75%  9.63% 12/29/22   7,133    6,998    7,008    2.39 
   (1.00% Floor)                          
First Lien Secured Delayed Draw Loan(7)  L+ 6.75%  9.63% 12/29/22   -    -    4    - 
   (1.00% Floor)                          
             27,053    26,540    26,592    9.06 
Data Processing & Outsourced Services                             
FPT Operating Company, LLC/                             
   TLabs Operating Company, LLC                             
First Lien Secured Term Loan  L+ 8.25%  9.91% 12/23/21   23,156    22,848    22,925    7.81 
   (1.00% Floor)                          
Department Stores                             
Mills Fleet Farm Group, LLC                             
Second Lien Secured Term Loan  L+ 9.75%  11.63% 02/26/23   7,146    7,043    7,146    2.43 
   (1.00% Floor)                          
Diversified Support Services                             
Account Control Technology Holdings, Inc.                             
First Lien Secured Term Loan(4)  L+ 8.50%  10.27% 04/28/22   11,576    11,303    11,381    3.88 
   (1.00% Floor)                          
ImageOne Industries, LLC                             
First Lien Secured Term Loan  L+ 7.50%  9.39% 01/11/23   7,607    7,461    7,493    2.55 
   (1.00% Floor)                          
First Lien Secured Revolving Loan(7)  L+ 6.50%  11.25% 01/11/23   -    -    8    - 
   (1.00% Floor)                          
Sitel Worldwide Corporation                             
Second Lien Secured Term Loan  L+ 9.50%  11.25% 09/18/22   8,670    8,559    8,757    2.98 
   (1.00% Floor)                          
             27,853    27,323    27,639    9.41 

  

See notes to consolidated financial statements

 

7 

 

 

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited) - (continued)

March 31, 2018

(in thousands)

 

Investment Type(1)  Spread
Above Index(2)
  Interest
Rate(3)
  Maturity
Date
  Principal/
Share
Amount
   Amortized
Cost
   Fair
Value(10)
   Fair Value
As A
Percentage
of Net
Assets
 
Environmental & Facilities Services                             
Montrose Environmental Group, Inc.                             
Second Lien Secured Term Loan  L+ 9.50%  11.27% 09/30/20   8,500    $8,359    $8,350    2.84%
   (1.00% Floor)                          
Food Retail                             
AG Kings Holdings, Inc.                             
First Lien Secured Term Loan  L+ 9.95%  12.25% 08/10/21   13,510    13,117    13,105    4.46 
   (1.00% Floor)                          
Crews of California, Inc.                             
First Lien Secured Term Loan  L+ 11.00%  12.78% 11/20/19   16,681    16,576    16,513    5.63 
   (1.00% Floor)  (1.00%  PIK)                      
First Lien Secured Revolving Loan  L+ 11.00%  12.78% 11/20/19   5,132    5,090    5,080    1.73 
   (1.00% Floor)  (1.00%  PIK)                      
First Lien Secured Delayed Draw Loan  L+ 11.00%  12.78% 11/20/19   4,834    4,796    4,785    1.63 
   (1.00% Floor)  (1.00%  PIK)                      
             40,157    39,579    39,483    13.45 
Health Care Facilities                             
Grupo HIMA San Pablo, Inc.                             
First Lien Secured Term Loan  L+ 9.00%  10.50% 01/31/18   14,250    14,250    11,129    3.79 
   (1.50% Floor)                          
Second Lien Secured Term Loan(8)  N/A  15.75% 07/31/18   1,028    1,025    119    0.04 
      (2.00%  PIK)                     
             15,278    15,275    11,248    3.83 
Internet Retail                             
Clarus Commerce, LLC                             
First Lien Secured Term Loan  L+ 8.62%  10.51%  03/09/23  17,100   16,899   16,895    5.76
   (1.00% Floor)                          
Internet Software & Services                             
London Trust Media Incorporated                             
First Lien Secured Term Loan  L+ 8.00%  9.77%  02/01/23   11,500    11,334    11,344    3.86 
   (1.00% Floor)                          
StackPath, LLC & Highwinds Capital, Inc.                             
Second Lien Secured Term Loan  L+ 9.50%  11.29%  02/02/24   18,000    17,624    17,640    6.01 
   (1.00% Floor)                          
             29,500    28,958    28,984    9.87 
Investment Banking & Brokerage                             
JVMC Holdings Corp. (f/k/a RJO Holdings Corp)                             
First Lien First Out Secured Term Loan  L+ 8.02%  9.90%  05/05/22   12,994    12,754    12,994    4.43 
   (1.00% Floor)                          
First Lien Last Out Secured Term Loan  L+ 12.00%  13.88%  05/05/22   4,813    4,724    4,813    1.64 
   (1.00% Floor)                          
             17,807    17,478    17,807    6.07 
IT Consulting & Other Services                             
AST-Applications Software Technology LLC                             
First Lien Secured Term Loan  L+ 9.00%  10.89%  01/10/23   4,171    4,092    4,004    1.36 
   (1.00% Floor)  (2.00% PIK)                       

 

See notes to consolidated financial statements

 

8 

 

 

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited) - (continued)

March 31, 2018

(in thousands)

 

Investment Type(1)  Spread
Above Index(2)
 Interest
Rate(3)
  Maturity
Date
  Principal/
Share
Amount
   Amortized
Cost
   Fair
Value(10)
   Fair Value
As A
Percentage
of Net
Assets
 
Leisure Facilities                              
Planet Fit Indy 10 LLC                              
First Lien Incremental Term Loan  L+ 7.25%   9.55%  03/07/22   1,930   1,912   1,911    0.65% 
   (1.00% Floor)                           
First Lien Initial Delayed Draw Loan(7)  L+ 7.25%   9.23%  03/07/22   2,658    2,633    2,629    0.90 
   (1.00% Floor)                           
First Lien Initial Term Loan  L+ 7.25%   9.28%  03/07/22   131    131    130    0.04 
   (1.00% Floor)                           
              4,719    4,676    4,670    1.59 
Oil & Gas Exploration & Production                              
Caelus Energy Alaska O3, LLC                              
Second Lien Secured Term Loan  L+ 7.50%   9.68%  04/15/20   13,000    12,937    11,631    3.96 
   (1.25% Floor)                           
Other Diversified Financial Services                              
Sigue Corporation(4)                              
Second Lien Secured Term Loan  L+ 11.50%   13.81%  12/27/18   25,000    24,926    23,125    7.88 
   (1.00% Floor)                           
The Pay-O-Matic Corp.                              
First Lien Secured Term Loan  L+ 13.00%   14.69%  04/02/18   11,829    11,829    11,889    4.05 
   (1.00% Floor)                           
              36,829    36,755    35,014    11.93 
Research & Consulting Services                              
Nelson Worldwide, LLC                              
First Lien Secured Term Loan  L+ 8.00%   9.70%  01/09/23   17,710    17,287    17,312    5.90 
   (1.00% Floor)                           
First Lien Secured Revolving Loan(7)  L+ 8.00%   9.70%  01/09/23   1,234    1,205    1,208    0.41 
   (1.00% Floor)                           
              18,944    18,492    18,520    6.31 
Security & Alarm Services                              
SecurAmerica, LLC                              
First Lien Secured Term Loan  L+ 9.50%   11.48%  11/17/22   11,320    11,058    11,114    3.79 
   (1.00% Floor)                           
Specialized Consumer Services                              
Pre-Paid Legal Services, Inc.                              
Second Lien Secured Term Loan  L+ 9.00%   10.88%  07/01/20   19,000    18,921    18,999    6.47 
   (1.25% Floor)                           

  

See notes to consolidated financial statements

 

9 

 

 

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments (Unaudited) - (continued)

March 31, 2018

(in thousands)

 

Investment Type(1)  Spread
Above Index(2)
  Interest
Rate(3)
  Maturity
Date
  Principal/
Share
Amount
   Amortized
Cost
   Fair
Value(10)
   Fair Value
As A
Percentage
of Net
Assets
Specialized Finance                             
Golden Pear Funding III, LLC(5)                             
Second Lien Secured Term Loan  L+ 11.25%  13.02%  06/25/20   25,000   24,869   24,500    8.35
   (1.00% Floor)                          
Second Lien Secured Revolving Loan  L+ 11.25%  13.02%  06/25/20   5,000    4,974    4,900    1.67 
   (1.00% Floor)                          
Oasis Legal Finance, LLC(5)                             
Second Lien Secured Term Loan  L+ 10.75%  12.41%  03/09/22   20,000    19,714    20,000    6.81 
   (1.00% Floor)                          
             50,000    49,557    49,400    16.83 
Trucking                             
Sunteck / TTS Holdings, LLC                             
Second Lien Secured Term Loan  L+ 9.00%  11.12%  06/15/22   3,500    3,453    3,500    1.19 
   (1.00% Floor)                          
Total Debt Investments            435,284    428,936    422,110    143.79 
                              
Equity Investments                             
Advertising                             
Cogint, Inc. (f/k/a IDI, Inc.)(4)(9)  N/A  N/A  12/08/25  187   560   467    0.16
                              
Food Retail                             
Crews of California, Inc. Warrants (4)  N/A  N/A  12/31/24   -    -    6    0.00 
Nicholas & Associates, LLC Warrants(4)  N/A  N/A  12/31/24   3    -    131    0.04 
Pinnacle Management Group, LLC Warrants(4)  N/A  N/A  12/31/24   3    -    131    0.04 
RC3 Enterprises, LLC Warrants(4)  N/A  N/A  12/31/24   3    -    131    0.04 
             9    -    399    0.12 
                              
Internet Software & Services                             
Red Violet, Inc.(4)(9)  N/A  N/A  N/A   25    -    152    0.05 
                              
Other Diversified Financial Services                             
Aretec Group, Inc. (4)(5)(6)  N/A  N/A  N/A   536    20,693    25,141    8.57 
                              
RCS Creditor Trust Class B Units(4)(6)  N/A  N/A  N/A   143    -    543    0.18 
             679    20,693    25,684    8.75 
Specialized Finance                             
NMFC Senior Loan Program I LLC Units (4)(5)(6)  N/A  N/A  06/13/20   20,000    20,120    18,750    6.39 
                              
Trucking                             
Fox Rent A Car, Inc. Warrants(4)  N/A  N/A  N/A   -    -    180    0.06 
                              
Total Equity Investments            20,900    41,373    45,632    15.53 
                              
Total Investments           456,184   $470,309   $467,742    159.32

 

 

(1) Except as otherwise noted, all investments are non-controlled/non-affiliate investments as defined by the Investment Company Act of 1940, as amended (the “1940 Act”), and provide collateral for the Company’s credit facility.

 

(2) The investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”), which resets monthly, quarterly or semiannually, or the U.S. Prime Rate as published by the Wall Street Journal (“Prime” or “P”). The one, three and six-month LIBOR were 1.9%, 2.0% and 2.3%, respectively, as of March 31, 2018. The Prime was 4.8% as of March 31, 2018.

 

(3) The interest rate is the “all-in-rate” including the current index and spread, the fixed rate, and the payment-in-kind (“PIK”) interest rate, as the case may be.

 

(4) The investment or a portion of the investment does not provide collateral for the Company’s credit facility.

 

(5) Not a qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of total assets. Qualifying assets represented 81% of total assets as of the date of the consolidated schedule of investments.

 

(6) Investment is a non-controlled/affiliate investment as defined by the 1940 Act.

 

(7) The investment has an unfunded commitment in addition to any amounts presented in the consolidated schedule of investments as of March 31, 2018. See Note 7.

 

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

 

(9) The fair value of the investment was determined using observable inputs. See Note 4.

 

(10) Except as otherwise noted, the fair value of each investment was determined using significant unobservable inputs. See Note 4.

 

See notes to consolidated financial statements

 

10 

 

 

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments

December 31, 2017

(in thousands) 

 

Investment Type(1)  Spread Above
Index(2)
  Interest
Rate(3)
  Maturity
Date
  Principal/
Share
Amount
   Amortized
Cost
   Fair
Value(7)
   Fair Value
As A
Percentage
of Net
Assets
 
North America                             
Debt Investments                             
Advertising                             
Fluent, LLC (f/k/a Fluent Acquisition II, LLC)                             
First Lien Secured Term Loan  L+ 11.50%
(0.50% Floor)
  13.05%
(1.00% PIK)
  12/08/20   25,650   $25,352   $25,651    8.94%
Outcome Health                             
First Lien Secured Term Loan  L+ 6.50%
(1.00% Floor)
  8.13%  12/22/21   14,853    13,667    12,372    4.31 
             40,503    39,019    38,023    13.25 
Application Software                             
Intermedia Holdings, Inc.                             
Second Lien Secured Term Loan  L+ 9.50%
(1.00% Floor)
  10.88%  02/03/25   18,000    17,680    17,892    6.24 
Auto Parts & Equipment                             
Crowne Group, LLC                             
First Lien Secured Term Loan  L+ 9.25%
(1.00% Floor)
  10.73%  05/26/21   12,031    11,747    12,031    4.19 
Broadcasting                             
Multicultural Radio Broadcasting, Inc.                             
First Lien Secured Term Loan  L+ 8.00%
(1.00% Floor)
  9.56%  12/28/22   20,000    19,601    19,600    6.83 
Rural Media Group, Inc.                             
First Lien Secured Term Loan  P+ 5.75%
(1.00% Floor)
  10.25%  12/29/22   7,133    6,991    6,991    2.44 
First Lien Secured Delayed Draw Loan(8)  P+ 5.75%
(1.00% Floor)
  10.25%  12/29/22                
             27,133    26,592    26,591    9.27 
Data Processing & Outsourced Services                             
FPT Operating Company, LLC/                             
TLabs Operating Company, LLC                             
First Lien Secured Term Loan  L+ 8.25%
(1.00% Floor)
  9.61%  12/23/21   23,305    22,975    23,188    8.08 
Department Stores                             
Mills Fleet Farm Group, LLC                             
Second Lien Secured Term Loan  L+ 9.75%
(1.00% Floor)
  11.32%  02/26/23   7,146    7,038    7,146    2.49 
Diversified Support Services                             
Account Control Technology Holdings, Inc.                             
First Lien Secured Term Loan(4)  L+ 8.50%
(1.00% Floor)
  9.88%  04/28/22   14,329    13,971    14,180    4.94 
Sitel Worldwide Corporation                             
Second Lien Secured Term Loan  L+ 9.50%
(1.00% Floor)
  10.88%  09/18/22   8,670    8,553    8,651    3.01 
             22,999    22,524    22,831    7.95 
Environmental & Facilities Services                             
Montrose Environmental Group, Inc.                             
Second Lien Secured Term Loan  L+ 9.50%
(1.00% Floor)
  10.88%  09/30/20   8,500    8,345    8,423    2.94 

 

See notes to consolidated financial statements

  

11 

 

 

WhiteHorse Finance, Inc.

Consolidated Schedule of Investments - (continued)

December 31, 2017

(in thousands)

 

Investment Type(1)  Spread Above
Index(2)
  Interest
Rate(3)
  Maturity
Date
  Principal/
Share
Amount
   Amortized
Cost
   Fair
Value(7)
   Fair Value
As A
Percentage
of Net
Assets
 
Food Retail                             
AG Kings Holdings, Inc.                             
First Lien Secured Term Loan  L+ 9.95%
(1.00% Floor)
  11.64%  08/10/21   13,615   $13,190   $13,479    4.70%
Crews of California, Inc.                             
First Lien Secured Term Loan  L+ 11.00%
(1.00% Floor)
  12.48%
(1.00% PIK)
  11/20/19   16,853    16,732    16,516    5.76 
First Lien Secured Revolving Loan  L+ 11.00%
(1.00% Floor)
  12.48%
(1.00% PIK)
  11/20/19   5,119    5,070    5,017    1.75 
First Lien Secured Delayed Draw Loan  L+ 11.00%
(1.00% Floor)
  12.48%
(1.00% PIK)
  11/20/19   4,884    4,840    4,786    1.67 
             40,471    39,832    39,798    13.88 
Health Care Facilities                             
Grupo HIMA San Pablo, Inc.                             
First Lien Secured Term Loan  L+ 9.00%
(1.50% Floor)
  10.50%  01/31/18   14,250    14,245    12,430    4.33 
Second Lien Secured Term Loan  N/A  15.75%
(2.00% PIK)
  07/31/18   1,027    1,023    239    0.08 
             15,277    15,268    12,669    4.41 
Internet Retail                             
Clarus Commerce, LLC                             
First Lien Secured Term Loan  L+ 9.77%
(1.00% Floor)
  11.34%  03/17/21   6,000    5,923    6,000    2.09 
Internet Software & Services                             
StackPath, LLC & Highwinds Capital, Inc.                             
Second Lien Secured Term Loan  L+ 9.50%
(1.00% Floor)
  10.88%  02/02/24   18,000    17,608    17,576    6.13 
Investment Banking & Brokerage                             
JVMC Holdings Corp. (f/k/a RJO Holdings Corp)&nbs