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

NEW YORK, Aug. 9, 2021 /PRNewswire/ -- WhiteHorse Finance, Inc. ("WhiteHorse Finance" or the "Company") (Nasdaq: WHF) today announced its financial results for the quarter ended June 30, 2021. In addition, the Company's board of directors has declared a distribution of $0.355 per share with respect to the quarter ending September 30, 2021. The distribution will be payable on October 4, 2021 to stockholders of record as of September 20, 2021.

Second Quarter 2021 Summary Highlights

Net Asset Value of $319.6 million, or $15.42 per share
Investment portfolio⁽¹⁾ totaling $670.5 million
STRS JV investment portfolio totaling $209.5 million
Gross investment deployments⁽²⁾ of $103.8 million for the second quarter, including new originations of $96.3 million and $7.5 million of fundings for add-ons to existing investments
Net investment income of $6.1 million, or $0.296 per share
Core net investment income of $7.0 million, or $0.338 per share⁽³⁾
Second quarter distribution of $0.355 per share

(1) Includes investments in WHF STRS Ohio Senior Loan Fund LLC ("STRS JV"), an unconsolidated joint venture, totaling $61.9 million, at fair value.

(2) Excludes investments made in STRS JV.

(3) "Core net investment income" is a non-GAAP financial measure. The Company believes that core net investment income provides useful information to investors and management because it reflects the Company's financial performance excluding (i) the net impact of costs associated with the refinancing of the Company's indebtedness, (ii) the accrual of the capital gains incentive fee attributable to net realized and unrealized gains and losses, and (iii) excise and other income taxes related to such net realized gains and losses (net of incentive fees). The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. Additional information on core net investment income and a reconciliation of core net investment income to its most directly comparable GAAP financial measure, net investment income, are set forth in Schedule 1 hereto.

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

Portfolio and Investment Activity

As of June 30, 2021, the fair value of WhiteHorse Finance's investment portfolio was $670.5 million, compared with $617.0 million as of March 31, 2021. The portfolio as of June 30, 2021 consisted of 97 positions across 67 companies with a weighted average effective yield of 9.5% on income-producing debt investments. The average debt investment size (excluding investments in STRS JV) was $7.1 million with the overall portfolio comprised of approximately 84.0% first lien secured loans, 4.4% second lien secured loans, 2.4% equity and 9.2% in investments in STRS JV. Almost all loans were variable rate investments (primarily indexed to the London Interbank Offered Rate) with fixed rate securities representing only 0.4% of loans at fair value. Nearly all performing floating rate investments have interest rate floors.

During the three months ended June 30, 2021, WhiteHorse Finance made investments in eight new portfolio companies totaling $96.3 million and added a total of $7.5 million to six existing portfolio companies. Proceeds from sales and repayments totaled approximately $30.8 million for the quarter ended June 30, 2021, driven by two full realizations in NMFC Senior Loan Program I LLC and Comniscient Technologies LLC.

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

WHF STRS Ohio Senior Loan Fund LLC

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

Results of Operations

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

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

For the three months ended June 30, 2021, WhiteHorse Finance reported net realized and unrealized gains on investments and foreign currency transactions of $4.4 million. This compares with net realized and unrealized gains on investments and foreign currency transactions of $17.6 million for the three months ended June 30, 2020. The decrease for the year-over-year period was primarily attributable to higher prior-year unrealized gains generated on markups in the portfolio as a result of overall market stability and price recovery from the COVID-19 pandemic.

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

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

Liquidity and Capital Resources

As of June 30, 2021, WhiteHorse Finance had cash and cash equivalents of $17.8 million, as compared with $24.5 million as of March 31, 2021, inclusive of restricted cash. As of June 30, 2021, the Company also had $46.5 million of undrawn capacity under its revolving credit facility.

Distributions

The Company's Board of Directors has declared a distribution of $0.355 per share with respect to the quarter ending September 30, 2021. The distribution will be payable on October 4, 2021 to stockholders of record as of September 20, 2021.

On May 10, 2021, the Company declared a distribution of $0.355 per share for the quarter ended June 30, 2021, consistent with distributions declared for the thirty-fifth consecutive quarter since the Company's initial public offering. The distribution was paid on July 2, 2021 to stockholders of record as of June 18, 2021.

Distributions are paid from taxable earnings and may include return of capital and/or capital gains. The specific tax characteristics of the distributions will be reported to stockholders on Form 1099-DIV after the end of the calendar year and in the Company's periodic reports filed with the Securities and Exchange Commission.

Conference Call

WhiteHorse Finance will host a conference call to discuss its second quarter results at 1:00 p.m. ET on Monday, August 9, 2021. To access the teleconference, please dial 877-876-9174 (domestic and international) approximately 10 minutes before the teleconference's scheduled start time and reference Conference ID #WHFQ221. Investors may also access the call on the investor relations portion of the Company's website at www.whitehorsefinance.com.

If you are unable to access the live teleconference, a replay will be available beginning approximately two hours after the call's completion through August 16, 2021. The teleconference replay can be accessed by dialing 877-274-8339 (domestic and international). A webcast replay will also be available on the investor relations portion of the Company's website at www.whitehorsefinance.com.

About WhiteHorse Finance, Inc.

WhiteHorse Finance is a business development company that originates and invests in loans to privately held, lower middle market companies across a broad range of industries. The Company's investment activities are managed by H.I.G. WhiteHorse Advisers, LLC, an affiliate of H.I.G. Capital, LLC, ("H.I.G. Capital"). H.I.G. Capital is a leading global alternative asset manager with $45 billion of capital under management⁽⁴⁾ across a number of funds focused on the small and mid-cap markets. For more information about H.I.G. Capital, please visit http://www.higcapital.com. For more information about the Company, please visit http://www.whitehorsefinance.com.

Forward-Looking Statements

This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.

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

SCHEDULE 1

As a supplement to GAAP financial measures, the Company has provided information relating to core net investment income, which is a non-GAAP measure. This measure is provided in addition to, but not as a substitute for, net investment income determined in accordance with GAAP. The Company's non-GAAP measures may differ from similar measures by other companies, even if similar terms are used to identify such measures. Core net investment income represents net investment income adjusted to exclude the net impact of costs associated with the refinancing of the Company's indebtedness, the accrual of the capital gains incentive fee attributable to net realized and unrealized gains and losses, and excise or other income taxes related to such net realized gains and losses (net of incentive fees). There were no excise or other income taxes related to net realized gains and losses nor did the Company incur any costs with refinancing any of its indebtedness for the quarters ended June 30, 2021 and June 30, 2020.

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

	June 30, 2021				June 30, 2020
	Amount		Per Share Amounts		Amount		Per Share Amounts
Net investment income	$	6,100	$	0.296	$	5,240	$	0.255
Net impact of costs associated with refinancing of indebtedness		-		-		-		-
Accrual for capital gains incentive fee		882		0.042		-		-
Net impact of excise tax expense related to net realized gains and losses		-		-		-		-
Core net investment income	$	6,982	$	0.338	$	5,240	$	0.255

WhiteHorse Finance, Inc. Consolidated Statements of Assets and Liabilities *(in thousands, except share and per share data)*

	June 30, 2021		December 31, 2020
	(Unaudited)
Assets
Investments, at fair value
Non-controlled/non-affiliate company investments	$	602,576	$	623,777
Non-controlled affiliate company investments		6,008		15,717
Controlled affiliate company investments		61,891		51,241
Total investments, at fair value (amortized cost $678,680 and $695,429, respectively)		670,475		690,735
Cash and cash equivalents		10,329		8,062
Restricted cash and cash equivalents		7,037		7,549
Restricted foreign currency (cost of $378 and $319, respectively)		397		333
Interest and dividend receivable		7,076		6,532
Amounts receivable on unsettled investment transactions		1,021		4,717
Escrow receivable		2,236		-
Prepaid expenses and other receivables		1,154		1,061
Total assets	$	699,725	$	718,989

Liabilities
Debt	$	358,719	$	384,880
Distributions payable		7,357		7,294
Management fees payable		3,357		3,354
Incentive fees payable		6,994		6,117
Amounts payable on unsettled investment transactions		-		497
Interest payable		1,848		1,870
Accounts payable and accrued expenses		1,437		1,708
Advances received from unfunded credit facilities		392		372
Total liabilities		380,104		406,092

Commitments and contingencies

Net assets
Common stock, 20,722,596 and 20,546,032 shares issued and outstanding, par value $0.001 per share, respectively, and 100,000,000 shares authorized		21		21
Paid-in capital in excess of par		302,711		300,002
Accumulated earnings		16,889		12,874
Total net assets		319,621		312,897
Total liabilities and total net assets	$	699,725	$	718,989

Number of shares outstanding		20,722,596		20,546,032
Net asset value per share	$	15.42	$	15.23

WhiteHorse Finance, Inc. Consolidated Statements of Operations (Unaudited) *(in thousands, except share and per share data)*

	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Investment income
From non-controlled/non-affiliate company investments
Interest income	$	14,148	$	12,145	$	28,960	$	25,284
Fee income		350		539		1,121		830
Dividend income		65		30		109		79
From non-controlled affiliate company investments
Dividend income		717		263		967		538
From controlled affiliate company investments
Interest income		738		606		1,457		1,231
Dividend income		1,325		240		2,699		393
Total investment income		17,343		13,823		35,313		28,355

Expenses
Interest expense		3,811		3,223		7,613		6,891
Base management fees		3,357		2,950		6,701		6,042
Performance-based incentive fees		2,628		1,311		4,670		1,752
Administrative service fees		170		171		341		342
General and administrative expenses		875		730		1,696		1,610
Total expenses		10,841		8,385		21,021		16,637

Net investment income before excise tax		6,502		5,438		14,292		11,718
Excise tax		402		198		592		376
Net investment income after excise tax		6,100		5,240		13,700		11,342

Realized and unrealized gains (losses) on investments and foreign currency transactions
Net realized gains (losses)
Non-controlled/non-affiliate company investments		(555)		(77)		7,605		433
Non-controlled-affiliate company investments		-		-		-		-
Foreign currency transactions		(4)		70		(3)		67
Foreign currency forward contracts		(4)		(6)		(4)		-
Net realized gains (losses)		(563)		(13)		7,598		500
Net change in unrealized appreciation (depreciation)
Non-controlled/non-affiliate company investments		4,407		15,841		(2,568)		(6,355)
Non-controlled affiliate company investments		755		871		321		(1,130)
Controlled affiliate company investments		(149)		1,111		(269)		(2,842)
Translation of assets and liabilities in foreign currencies		(40)		(237)		(102)		343
Foreign currency forward contracts		1		(2)		-		(3)
Net change in unrealized appreciation (depreciation)		4,974		17,584		(2,618)		(9,987)
Net realized and unrealized gains (losses) on investments		4,411		17,571		4,980		(9,487)
Net increase in net assets resulting from operations	$	10,511	$	22,811	$	18,680	$	1,855

Per Common Share Data
Basic and diluted earnings per common share	$	0.51	$	1.11	$	0.91	$	0.09
Dividends and distributions declared per common share	$	0.36	$	0.36	$	0.71	$	0.71
Basic and diluted weighted average common shares Outstanding		20,626,340		20,546,032		20,589,159		20,546,032

WhiteHorse Finance, Inc. Consolidated Schedule of Investments (Unaudited) June 30, 2021 *(in thousands)*

Issuer	Investment Type⁽¹⁾	Floor	Spread Above Index⁽²⁾	Interest Rate⁽³⁾	Acquisition Date⁽¹⁰⁾	Maturity Date	Principal/ Share Amount		Amortized Cost		Fair Value⁽¹¹⁾		Fair Value As A Percentage of Net Assets
North America
Debt Investments
Advertising
SmartSign Holdings LLC	First Lien Secured Term Loan	1.00%	L+ 7.50%	8.50%	08/21/20	10/11/24		7,705	$	7,583	$	7,705		2.41	%
								7,705		7,583		7,705		2.41
Air Freight & Logistics
Access USA Shipping, LLC	First Lien Secured Term Loan	1.50%	L+ 8.00%	9.50%	02/08/19	02/08/24		5,083		5,043		5,083		1.59
								5,083		5,043		5,083		1.59
Application Software
Atlas Purchaser, Inc. (dba Aspect Software)	Second Lien Secured Term Loan	0.75%	L+ 9.00%	9.75%	05/06/21	05/06/29		15,000		14,558		14,558		4.55
Connexity, Inc.	First Lien Secured Term Loan	1.50%	L+ 8.50%	10.00%	05/21/20	05/21/25		9,454		9,234		9,454		2.96
Newscycle Solutions, Inc.	First Lien Secured Term Loan	1.00%	L+ 7.00%	8.00%	06/14/19	12/29/22		3,229		3,202		3,217		1.01
Newscycle Solutions, Inc.⁽⁷⁾	First Lien Secured Revolving Loan	1.00%	L+ 7.00%	8.00%	06/14/19	12/29/22		169		168		168		0.05
TaxSlayer LLC	First Lien Secured Term Loan	1.00%	L+ 6.50%	7.50%	12/31/20	12/31/26		6,779		6,655		6,655		2.08
TaxSlayer LLC⁽⁷⁾	First Lien Secured Revolving Loan	1.00%	L+ 6.50%	7.50%	12/31/20	12/31/26		-		-		-		-
								34,631		33,817		34,052		10.65
Automotive Retail
Team Car Care Holdings, LLC⁽¹²⁾	First Lien Secured Term Loan	1.02%	Base rate+ 7.99%	9.01%	02/26/18	02/23/23		15,678		15,561		15,629		4.89
								15,678		15,561		15,629		4.89
Building Products
Drew Foam Companies Inc	First Lien Secured Term Loan	1.00%	L+ 6.50%	7.50%	11/05/20	11/05/25		7,244		7,115		7,118		2.23
LHS Borrower, LLC	First Lien Secured Term Loan	1.00%	L+ 6.75%	7.75%	09/30/20	09/30/25		9,567		9,385		9,496		2.97
LHS Borrower, LLC⁽⁷⁾	First Lien Secured Revolving Loan	1.00%	L+ 6.75%	7.75%	09/30/20	09/30/25		-		-		7		-
								16,811		16,500		16,621		5.20
Cable & Satellite
Bulk Midco, LLC⁽¹⁵⁾	First Lien Secured Term Loan	1.00%	L+ 7.34%	8.34%	06/08/18	06/08/23		15,000		14,913		14,250		4.46
								15,000		14,913		14,250		4.46
Construction & Engineering
SFP Holding, Inc.	First Lien Secured Term Loan	1.00%	L+ 6.25%	7.25%	06/22/21	09/01/23		2,295		2,246		2,272		0.71
Tensar Corp.	First Lien Secured Term Loan	1.00%	L+ 6.75%	7.75%	11/20/20	08/20/25		6,965		6,813		6,930		2.17
								9,260		9,059		9,202		2.88
Construction Materials
Claridge Products and Equipment, LLC	First Lien Secured Term Loan	1.00%	L+ 6.50%	7.50%	12/30/20	12/29/25		7,960		7,817		7,846		2.45
Claridge Products and Equipment, LLC⁽⁷⁾	First Lien Secured Revolving Loan	1.00%	L+ 6.50%	7.50%	12/30/20	12/29/25		-		-		3		-
								7,960		7,817		7,849		2.45
Commodity Chemicals
Flexitallic Group SAS	First Lien Secured Term Loan	1.00%	L+ 6.50%	7.50%	10/28/19	10/29/26		11,893		11,671		11,299		3.54
								11,893		11,671		11,299		3.54
Consumer Finance
Maxitransfers Blocker Corp	First Lien Secured Term Loan	1.00%	L+ 8.50%	9.50%	10/07/20	10/07/25		8,757		8,580		8,657		2.71
Maxitransfers Blocker Corp⁽⁴⁾⁽⁷⁾	First Lien Secured Revolving Loan	1.00%	L+ 8.50%	9.50%	10/07/20	10/07/25		-		-		9		-
								8,757		8,580		8,666		2.71
Data Processing & Outsourced Services
Escalon Services Inc	First Lien Secured Term Loan	1.00%	L+ 13.50%	14.50% (13.00% Cash + 1.50% PIK)	12/04/20	12/04/25		8,024		7,394		7,661		2.40
FPT Operating Company, LLC/ TLabs Operating Company, LLC	First Lien Secured Term Loan	1.00%	L+ 8.25%	9.25%	12/23/16	06/07/24		24,312		24,095		24,155		7.56
Geo Logic Systems Ltd.^(5)(12)(13)	First Lien Secured Term Loan	1.00%	C+ 6.50%	7.50%	12/19/19	12/19/24		6,623		4,982		5,236		1.64
Geo Logic Systems Ltd. ^(5)(7)(13)	First Lien Secured Revolving Loan	1.00%	C+ 6.50%	7.50%	12/19/19	12/19/24		-		-		(2)		-
E-Phoenix Acquisition Co. Inc. (dba Integreon)	First Lien Secured Term Loan	1.00%	L+ 5.75%	6.75%	06/23/21	06/23/27		9,000		8,888		8,888		2.78
								47,959		45,359		45,938		14.38

WhiteHorse Finance, Inc. Consolidated Schedule of Investments (Unaudited) June 30, 2021 *(in thousands)*

Issuer	Investment Type⁽¹⁾	Floor	Spread Above Index⁽²⁾	Interest Rate⁽³⁾	Acquisition Date⁽¹⁰⁾	Maturity Date	Principal/ Share Amount		Amortized Cost		Fair Value⁽¹¹⁾		Fair Value As A Percentage of Net Assets
Department Stores
Mills Fleet Farm Group, LLC	First Lien Secured Term Loan	1.00%	L+ 6.00%	7.00%	10/24/18	10/24/24		13,538	$	13,308	$	13,538		4.24	%
								13,538		13,308		13,538		4.24
Distributors
Crown Brands, LLC⁽¹⁹⁾	Second Lien Secured Term Loan	1.50%	L+ 10.50%	12.00%	12/15/20	01/08/26		4,379		4,287		3,673		1.15
Crown Brands, LLC⁽¹⁹⁾	Second Lien Secured Delayed Draw Loan	1.50%	L+ 10.50%	12.00%	12/15/20	01/08/26		650		650		545		0.17
								5,029		4,937		4,218		1.32
Diversified Chemicals
Sklar Holdings, Inc.	First Lien Secured Term Loan	1.00%	L+ 7.75%	8.75%	11/13/19	05/13/23		7,451		7,335		7,451		2.33
								7,451		7,335		7,451		2.33
Diversified Support Services
NNA Services, LLC	First Lien Secured Term Loan	1.50%	L+ 7.00%	8.50%	10/16/18	10/16/23		13,174		13,032		13,174		4.12
								13,174		13,032		13,174		4.12
Education Services
EducationDynamics, LLC	First Lien Secured Term Loan	1.00%	L+ 7.75%	8.75%	11/26/19	11/26/24		12,232		12,059		12,232		3.83
								12,232		12,059		12,232		3.83
Electronic Equipment & Instruments
LMG Holdings, Inc.	First Lien Secured Term Loan	1.00%	L+ 6.50%	7.50%	04/30/21	04/30/26		6,836		6,704		6,704		2.10
LMG Holdings, Inc.⁽⁷⁾	First Lien Secured Revolving Loan	1.00%	L+ 6.50%	7.50%	04/30/21	04/30/26		-		-		-		-
								6,836		6,704		6,704		2.10
Health Care Facilities
Epiphany Dermatology	First Lien Secured Term Loan	1.00%	L+ 7.50%	8.50%	12/04/20	06/22/23		3,483		3,415		3,431		1.07
Epiphany Dermatology⁽⁷⁾	First Lien Secured Revolving Loan	1.00%	L+ 7.50%	8.50%	12/04/20	06/22/23		-		-		2		-
Epiphany Dermatology⁽⁷⁾	First Lien Secured Delayed Draw Loan	1.00%	L+ 7.50%	8.50%	12/04/20	06/22/23		-		-		14		-
Grupo HIMA San Pablo, Inc.⁽⁸⁾	First Lien Secured Term Loan A	N/A	L+ 9.00%	9.18%	05/05/19	04/30/19		3,855		3,855		2,146		0.67
Grupo HIMA San Pablo, Inc.⁽⁸⁾	First Lien Secured Term Loan B	1.50%	L+ 9.00%	10.50%	02/01/13	04/30/19		13,511		13,511		7,521		2.35
Grupo HIMA San Pablo, Inc.⁽⁸⁾	Second Lien Secured Term Loan	N/A	L+ 15.75%	15.75% (13.75% Cash + 2.00% PIK)	02/01/13	07/31/18		1,028		1,024		-		-
								21,877		21,805		13,114		4.09
Health Care Services
CHS Therapy, LLC	First Lien Secured Term Loan A	1.50%	L+ 8.50%	10.00%	06/14/19	06/14/24		7,326		7,244		7,325		2.29
CHS Therapy, LLC	First Lien Secured Term Loan C	1.50%	L+ 8.50%	10.00%	10/07/20	06/14/24		901		886		901		0.28
DCA Investment Holding, LLC	First Lien Secured Term Loan	0.75%	L+ 6.25%	7.00%	03/12/21	03/12/27		7,060		6,959		6,959		2.18
DCA Investment Holding, LLC⁽⁷⁾	First Lien Secured Delayed Draw Loan	0.75%	L+ 6.25%	7.00%	03/12/21	03/12/27		-		-		-		-
Ivy Rehab Holdings LLC	First Lien Secured Term Loan	1.00%	L+ 6.75%	7.75%	12/04/20	12/04/24		8,811		8,660		8,811		2.76
Ivy Rehab Holdings LLC⁽⁷⁾	First Lien Secured Revolving Loan	1.00%	L+ 6.75%	7.75%	12/04/20	12/04/24		-		-		9		-
Ivy Rehab Holdings LLC⁽⁷⁾	First Lien Secured Delayed Draw Loan	1.00%	L+ 6.75%	7.75%	12/04/20	12/04/24		377		370		398		0.12
Lab Logistics, LLC	First Lien Secured Term Loan	1.00%	L+ 7.25%	8.25%	10/16/19	09/25/23		1,161		1,141		1,153		0.36
Lab Logistics, LLC	First Lien Secured Delayed Draw Loan	1.00%	L+ 7.25%	8.25%	10/16/19	09/25/23		5,210		5,188		5,210		1.63
PG Dental New Jersey Parent, LLC	First Lien Secured Term Loan	1.00%	L+ 7.75%	8.75%	11/25/20	11/25/25		16,089		15,770		15,903		4.98
PG Dental New Jersey Parent, LLC⁽⁷⁾	First Lien Secured Revolving Loan	1.00%	L+ 7.75%	8.75%	11/25/20	11/25/25		-		-		10		-
								46,935		46,218		46,679		14.60
Heavy Electrical Equipment
PPS CR Acquisition, Inc. (dba Power Plant Services)	First Lien Secured Term Loan	1.00%	L+ 6.25%	7.25%	06/25/21	06/25/26		11,179		10,956		10,956		3.43
PPS CR Acquisition, Inc. (dba Power Plant Services)⁽⁷⁾	First Lien Secured Revolving Loan	1.00%	L+ 7.25%	8.25%	06/25/21	06/25/24		104		102		102		0.03
								11,283		11,058		11,058		3.46
Home Furnishings
Sure Fit Home Products, LLC	First Lien Secured Term Loan	1.00%	L+ 9.75%	10.75%	04/12/21	07/13/23		4,982		4,868		4,434		1.39
								4,982		4,868		4,434		1.39
Household Products
The Kyjen Company, LLC (dba Outward Hound)	First Lien Secured Term Loan	1.00%	L+ 6.50%	7.50%	04/05/21	04/05/26		11,460		11,297		11,297		3.53
The Kyjen Company, LLC (dba Outward Hound)⁽⁷⁾	First Lien Secured Revolving Loan	1.00%	L+ 6.50%	7.50%	04/05/21	04/05/26		385		379		379		0.12
								11,845		11,676		11,676		3.65
Interactive Media & Services
What If Media Group, LLC	First Lien Secured Term Loan	1.00%	L+ 7.00%	8.00%	10/02/19	10/02/24		17,448		17,194		17,356		5.43
								17,448		17,194		17,356		5.43
Internet & Direct Marketing Retail
BBQ Buyer, LLC	First Lien Secured Term Loan	1.50%	L+ 8.00%	9.50%	08/28/20	08/28/25		12,666		12,396		12,878		4.03
Luxury Brand Holdings, Inc.	First Lien Secured Term Loan	1.00%	L+ 6.50%	7.50%	12/04/20	06/04/26		5,970		5,863		5,970		1.87
Potpourri Group, Inc.	First Lien Secured Term Loan	1.50%	L+ 8.25%	9.75%	07/03/19	07/03/24		18,151		17,905		18,151		5.68
								36,787		36,164		36,999		11.58

WhiteHorse Finance, Inc. Consolidated Schedule of Investments (Unaudited) June 30, 2021 *(in thousands)*

Issuer	Investment Type⁽¹⁾	Floor	Spread Above Index⁽²⁾	Interest Rate⁽³⁾	Acquisition Date⁽¹⁰⁾	Maturity Date	Principal/ Share Amount	Amortized Cost		Fair Value⁽¹¹⁾		Fair Value As A Percentage of Net Assets
Investment Banking & Brokerage
JVMC Holdings Corp. (f/k/a RJO Holdings Corp)	First Lien Secured Term Loan	1.00%	L+ 7.25%	8.25%	02/28/19	02/28/24	13,163	$	13,093	$	13,163		4.12	%
							13,163		13,093		13,163		4.12
IT Consulting & Other Services
AST-Applications Software Technology LLC	First Lien Secured Term Loan	1.00%	L+ 8.00%	9.00% (8.00% Cash + 1.00% PIK)	01/10/17	01/10/23	3,988		3,965		3,988		1.25
Cennox Holdings Limited^(5)(13)	First Lien Secured Term Loan	1.00%	L+ 6.00%	7.00%	05/04/21	05/04/26	2,880		3,928		3,906		1.22
Cennox Holdings Limited^{(5)(7)(12)(13)}	First lien Secured Revolving Loan	2.50%	L+ 5.33%	7.83%	05/04/21	05/04/26	432		588		586		0.18
Core BTS, Inc.	First Lien Secured Term Loan	1.50%	L+ 6.75%	8.25%	02/01/21	08/30/25	3,325		3,264		3,289		1.03
Core BTS, Inc.	First Lien Secured Delayed Draw Loan	1.50%	L+ 6.75%	8.25%	02/01/21	08/30/25	1,663		1,631		1,628		0.51
							12,288		13,376		13,397		4.19
Leisure Facilities
Honors Holdings, LLC⁽¹⁶⁾	First Lien Secured Term Loan	1.00%	L+ 7.81%	8.81% (8.31% Cash + 0.50% PIK)	09/06/19	09/06/24	9,440		9,300		9,156		2.86
Honors Holdings, LLC⁽¹⁶⁾	First Lien Secured Delayed Draw Loan	1.00%	L+ 7.62%	8.62% (8.04% Cash + 0.58% PIK)	09/06/19	09/06/24	4,649		4,606		4,509		1.41
Lift Brands, Inc. (aka Snap Fitness Holdings, Inc.)	First Lien Secured Term Loan A	1.00%	L+ 7.50%	8.50%	06/29/20	06/29/25	5,659		5,589		5,571		1.74
Lift Brands, Inc. (aka Snap Fitness Holdings, Inc.)	First Lien Secured Term Loan B	N/A	9.50%	9.50% (0.00% Cash + 9.50% PIK)	06/29/20	06/29/25	1,219		1,196		1,187		0.37
Lift Brands, Inc. (aka Snap Fitness Holdings, Inc.)⁽⁹⁾	First Lien Secured Term Loan C	N/A	9.50%	9.50% (0.00% Cash + 9.50% PIK)	06/29/20	NA	1,268		1,265		1,218		0.38
							22,235		21,956		21,641		6.76
Leisure Products
PlayMonster LLC	First Lien Secured Term Loan	1.00%	L+ 6.00%	7.00%	06/07/21	06/07/26	6,000		5,882		5,882		1.84
PlayMonster LLC⁽⁷⁾	First Lien Secured Delayed Draw Loan	1.00%	L+ 6.00%	7.00%	06/07/21	06/07/26	-		-		-		-
							6,000		5,882		5,882		1.84
Office Services & Supplies
American Crafts, L.C.	First Lien Secured Term Loan	1.00%	L+ 8.50%	9.50%	05/28/21	05/28/26	8,500		8,375		8,373		2.62
Empire Office, Inc.	First Lien Secured Term Loan	1.50%	L+ 6.75%	8.25%	04/12/19	04/12/24	8,795		8,697		8,795		2.75
							17,295		17,072		17,168		5.37
Packaged Foods & Meats
Lenny & Larry's, LLC⁽¹⁷⁾	First Lien Secured Term Loan	1.00%	L+ 8.41%	9.41% (7.69% Cash + 1.72% PIK)	05/15/18	05/15/23	11,046		10,966		10,554		3.30
							11,046		10,966		10,554		3.30
Personal Products
Inspired Beauty Brands, Inc.	First Lien Secured Term Loan	1.00%	L+ 7.00%	8.00%	12/30/20	12/30/25	12,475		12,250		12,250		3.83
Inspired Beauty Brands, Inc.⁽⁷⁾	First Lien Secured Revolving Loan	1.00%	L+ 7.00%	8.00%	12/30/20	12/30/25	-		-		-		-
							12,475		12,250		12,250		3.83
Property & Casualty Insurance
Policy Services Company, LLC ⁽⁵⁾	First Lien Secured Term Loan	1.00%	L+ 6.00%	7.00%	03/06/20	05/31/24	6,062		5,851		5,940		1.86
							6,062		5,851		5,940		1.86
Research & Consulting Services
ALM Media, LLC	First Lien Secured Term Loan	1.00%	L+ 7.00%	8.00%	11/25/19	11/25/24	14,527		14,330		14,091		4.41
Nelson Worldwide, LLC	First Lien Secured Term Loan	1.00%	L+ 10.25%	11.25% (10.25% Cash + 1.00% PIK)	01/09/18	01/09/23	10,639		10,558		10,533		3.30
							25,166		24,888		24,624		7.71
Restaurants
LS GFG Holdings Inc.	First Lien Secured Term Loan	1.00%	L+ 8.00%	9.00% (7.00% Cash + 2.00% PIK)	11/30/18	11/19/25	10,842		10,155		10,842		3.39
							10,842		10,155		10,842		3.39
Specialized Consumer Services
True Blue Car Wash, LLC	First Lien Secured Term Loan	1.00%	L+ 7.12%	8.12%	10/17/19	10/17/24	4,293		4,236		4,293		1.34
True Blue Car Wash, LLC⁽⁷⁾	First Lien Secured Delayed Draw Loan	1.00%	L+ 7.12%	8.12%	10/17/19	10/17/24	2,943		2,913		2,942		0.92
							7,236		7,149		7,235		2.26
Specialized Finance
Golden Pear Funding Assetco, LLC⁽⁵⁾	Second Lien Secured Term Loan	1.00%	L+ 10.50%	11.50%	09/20/18	03/20/24	10,938		10,829		10,938		3.42
WHF STRS Ohio Senior Loan Fund LLC^{(4)(5)(7)(9)(14)}	Subordinated Note	N/A	L+ 6.50%	6.59%	07/19/19	N/A	49,809		49,809		49,809		15.58
							60,747		60,638		60,747		19.00
Systems Software
IDIG Parent LLC	First Lien Secured Term Loan	1.00%	L+ 6.50%	7.50%	02/17/21	12/15/26	4,263		4,224		4,223		1.32
IDIG Parent LLC⁽⁷⁾	First Lien Secured Delayed Draw Loan	1.00%	L+ 6.50%	7.50%	02/17/21	12/15/26	-		-		-		-
IDIG Parent LLC⁽⁷⁾	First Lien Secured Revolving Loan	1.00%	L+ 6.50%	7.50%	02/17/21	12/15/26	-		-		-		-
							4,263		4,224		4,223		1.32

WhiteHorse Finance, Inc. Consolidated Schedule of Investments (Unaudited) June 30, 2021 *(in thousands)*

Issuer	Investment Type⁽¹⁾	Floor	Spread Above Index⁽²⁾	Interest Rate⁽³⁾	Acquisition Date⁽¹⁰⁾	Maturity Date	Principal/ Share Amount		Amortized Cost		Fair Value⁽¹¹⁾		Fair Value As A Percentage of Net Assets
Technology Hardware, Storage & Peripherals
Arcstor Midco, LLC	First Lien Secured Term Loan	1.00%	L+ 7.00%	8.00%	03/16/21	03/16/27		19,451	$	19,081	$	19,081		5.97	%
Source Code Midco, LLC	First Lien Secured Term Loan	1.00%	L+ 8.25%	9.25%	05/04/18	05/04/23		21,700		21,470		21,700		6.79
Telestream Holdings Corporation	First Lien Secured Term Loan	1.00%	L+ 8.75%	9.75%	10/15/20	10/15/25		15,155		14,738		14,882		4.66
Telestream Holdings Corporation⁽⁷⁾	First Lien Secured Revolving Loan	1.00%	L+ 8.75%	9.75%	10/15/20	10/15/25		-		-		14		-
								56,306		55,289		55,677		17.42
Trading Companies & Distributors
LINC Systems, LLC	First Lien Secured Term Loan	1.00%	L+ 6.50%	7.50%	02/24/21	02/24/26		4,167		4,090		4,090		1.28
LINC Systems, LLC⁽⁷⁾	First Lien Secured Revolving Loan	1.00%	L+ 6.50%	7.50%	02/24/21	02/24/26		-		-		-		-
								4,167		4,090		4,090		1.28

Total Debt Investments								659,445	$	649,140	$	642,360		200.95	%

Equity Investments
Data Processing & Outsourced Services
Escalon Services Inc⁽⁴⁾	Warrants	N/A	N/A	N/A	12/04/20	N/A		709	$	476	$	482		0.15	%
										476		482		0.15
Diversified Support Services
Quest Events, LLC⁽⁴⁾	Preferred Units	N/A	N/A	N/A	12/28/18	12/08/25		317		317		-		-
ImageOne Industries, LLC⁽⁴⁾	Common A Units	N/A	N/A	N/A	09/20/19	N/A		225		-		164		0.05
										317		164		0.05
Health Care Services
Lab Logistics⁽⁴⁾	Preferred Units	N/A	N/A	N/A	10/29/19	N/A		2		857		905		0.28
										857		905		0.28
Internet & Direct Marketing Retail
BBQ Buyer, LLC⁽⁴⁾	Shares	N/A	N/A	N/A	08/28/20	N/A		1,100		1,100		2,728		0.85
Ross-Simons Topco, LP⁽⁴⁾	Preferred Units	N/A	N/A	N/A	12/04/20	N/A		600		600		840		0.26
										1,700		3,568		1.11
Investment Banking & Brokerage
Arcole Holding Corp.^{(4)(5)(6)(18)}	Shares	N/A	N/A	N/A	10/01/20	N/A		-		6,944		6,008		1.88
										6,944		6,008		1.88
IT Consulting & Other Services
CX Holdco LLC⁽⁴⁾	Common Units	N/A	N/A	N/A	05/04/21	N/A		660		660		660		0.21
Keras Holdings, LLC⁽⁴⁾	Shares	N/A	N/A	N/A	12/31/20	N/A		496		496		496		0.16
										1,156		1,156		0.37
Leisure Facilities
Lift Brands, Inc. (aka Snap Fitness Holdings, Inc.)⁽⁴⁾	Class A Common Stock	N/A	N/A	N/A	06/29/20	N/A		2		1,955		184		0.06
Lift Brands, Inc. (aka Snap Fitness Holdings, Inc.)⁽⁴⁾	Warrants	N/A	N/A	N/A	06/29/20	06/28/28		1		793		75		0.02
										2,748		259		0.08
Other Diversified Financial Services
SFS Global Holding Company⁽⁴⁾	Warrants	N/A	N/A	N/A	06/28/18	12/28/25		-		-		-		-
Sigue Corporation⁽⁴⁾	Warrants	N/A	N/A	N/A	06/28/18	12/28/25		22		2,890		3,491		1.09
										2,890		3,491		1.09
Specialized Finance
WHF STRS Ohio Senior Loan Fund^{(4)(5)(7)(14)}	LLC Interests	N/A	N/A	N/A	07/19/19	N/A		12,452		12,452		12,082		3.78
										12,452		12,082		3.78

Total Equity Investments									$	29,540	$	28,115		8.79	%

Total Investments									$	678,680	$	670,475		209.74	%

WhiteHorse Finance, Inc.
Consolidated Schedule of Investments (Unaudited)
June 30, 2021
(in thousands)

Forward Currency Contracts

Currency to be

Unrealized

Counterparty

sold

purchased

Settlement date

appreciation ($)

depreciation ($)

Morgan Stanley

86 CAD

67 USD

07/28/2021

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

(2)

The investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate ("LIBOR" or "L"), which resets monthly, quarterly or semiannually, the Canadian Dollar Offered Rate ("CDOR" or "C"), or the U.S. Prime Rate as published by the Wall Street Journal ("Prime" or "P"). The one, three and six-month USD LIBOR were 0.1%, 0.1% and 0.2%, respectively, as of June 30, 2021. The one, three and six-month GBP LIBOR were all 0.1% as of June 30, 2021. The CDOR and Prime was 0.4% and 3.25%, respectively, as of June 30, 2021.

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

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

(5)

Not a qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of total assets. Qualifying assets represented 86.5% of total assets as of the date of the consolidated schedule of investments.

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

(7)	The investment has an unfunded commitment in addition to any amounts presented in the consolidated schedule of investments as of June 30, 2021.

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

(9)	Security is perpetual with no defined maturity date.

(10)	Except as otherwise noted, all of the Company's portfolio company investments, which as of the date of the consolidated schedule of investments represented 209.8% of the Company's net assets or 95.8% of the Company's total assets, are subject to legal restrictions on sales.

(11)	The fair value of each investment was determined using significant unobservable inputs.

(12)	The investment was comprised of two contracts, which were indexed to different base rates, L and P, respectively. The Spread Above Index and Interest Rate presented represent the weighted average of both contracts.

(13)	Principal amount is non-USD denominated and is based in Canadian dollars or British Pounds.

(14)

Investment is a controlled affiliate investment as defined by the 1940 Act. On January 14, 2019, the Company entered into an agreement with State Teachers Retirement System of Ohio, a public pension fund established under Ohio law ("STRS Ohio"), to create WHF STRS Ohio Senior Loan Fund, LLC ("STRS JV"), a joint venture, which invests primarily in senior secured first and second lien term loans.

(15)

In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest in the amount of 2.75% on its "last out" tranche of the portfolio company's senior term debt, which was previously syndicated into "first out" and "last out" tranches, whereby the "first out" tranche will have priority as to the "last out" tranche with respect to payments of principal, interest and any other amounts due thereunder.

(16)

In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest in the amount of 3.50% on its "last out" tranche of the portfolio company's senior term debt, which was previously syndicated into "first out" and "last out" tranches, whereby the "first out" tranche will have priority as to the "last out" tranche with respect to payments of principal, interest and any other amounts due thereunder.

(17)

In addition to the interest earned based on the stated interest rate of this security, the Company is entitled to receive an additional interest in the amount of 3.00% on its "last out" tranche of the portfolio company's senior term debt, which was previously syndicated into "first out" and "last out" tranches, whereby the "first out" tranche will have priority as to the "last out" tranche with respect to payments of principal, interest and any other amounts due thereunder.

(18)	On October 1, 2020, as part of a restructuring agreement between the Company and Arcole Acquisition Corp, the Company's investments in first lien secured term loans to Arcole Acquisition Corp were converted into common shares of Arcole Holding Corp.

(19)	At the option of the issuer, interest can be paid in cash or cash and PIK. The issuer may elect to pay up to 2.00% PIK.

Contacts

Stuart Aronson
WhiteHorse Finance, Inc.
212-506-0500
saronson@higwhitehorse.com

Joyson Thomas
WhiteHorse Finance, Inc.
305-379-2322
jthomas@higwhitehorse.com

Alex Jorgensen
Prosek Partners
646-818-9059
ajorgensen@prosek.com

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