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WhiteHorse Finance(WHF) - 2023 Q4 - Annual Report
2024-03-05 21:34
Investment Advisory Agreement - The Investment Advisory Agreement was amended and restated on November 1, 2023, and will remain in effect annually if approved by the board of directors or a majority of outstanding voting securities[89]. - The board of directors unanimously approved the amendment based on factors including the quality of advisory services and comparative fee structures with similar companies[91]. - The investment advisory fee rates were deemed reasonable in relation to the services provided, with expectations for similar reviews in future amendments[93]. - The Investment Advisory Agreement allows for termination by either party with a 60-day written notice, ensuring flexibility in management relationships[89]. - The board of directors considered the anticipated profitability of the relationship with the Investment Adviser as a key factor in their decision-making process[92]. Administrative Services - WhiteHorse Administration provides essential administrative services, including financial record maintenance and NAV determination, under an agreement renewed on November 1, 2023[94]. - The company may receive fees for managerial assistance provided to portfolio companies through WhiteHorse Administration[108]. Investment Strategy and Compliance - The company may invest up to 100% of its assets in privately negotiated transactions, potentially classifying it as an "underwriter" under the Securities Act[102]. - The company has claimed an exclusion from the definition of "commodity pool operator," affirming this status through the fiscal year ending December 31, 2024[103]. - The company must ensure that qualifying assets represent at least 70% of total assets to comply with the 1940 Act[105]. - The company intends to continue qualifying as a RIC by distributing at least 90% of its investment company taxable income annually[130]. - The company must qualify as a RIC and satisfy the Annual Distribution Requirement to maintain its tax status[134]. - At least 90% of the company's gross income must derive from specific sources, including dividends and interest, to meet the 90% Income Test[134]. - The company is required to diversify its holdings, ensuring that no more than 25% of its assets are invested in securities of a single issuer[135]. - The company must distribute dividends to avoid a 4% nondeductible U.S. federal excise tax on undistributed income[132]. Financial Risks and Market Conditions - Rising interest rates are expected to increase the company's interest income, as most of its portfolio bears interest at variable rates[211]. - The company is exposed to risks from inflation, which has increased costs for its portfolio companies, potentially affecting their ability to pay interest and principal[216]. - The company engages in hedging transactions to mitigate risks associated with currency and interest rate fluctuations[217]. - The company may face tax implications if it fails to qualify as a RIC, including being taxed at regular corporate rates[147]. - The company’s portfolio primarily consists of fixed and floating rate investments, which are subject to market price fluctuations[213]. - The company may experience fluctuations in quarterly results due to various factors, including interest rates and default rates on securities[251]. - Economic downturns could lead to increased non-performing assets and decreased portfolio value, adversely affecting revenues and net income[290]. Portfolio Composition and Investment Risks - The company primarily invests in below investment grade securities, which are viewed as speculative investments due to concerns regarding the issuer's capacity to pay interest and repay principal[271]. - The company’s portfolio may be concentrated in a limited number of portfolio companies and industries, increasing the risk of significant loss if any of these companies defaults[282]. - The company invests in "unitranche" senior secured loans, which combine senior secured and subordinated financing, generally in a first-lien position, providing a blended yield between senior secured and subordinated debt[273]. - The company may hold debt securities and loans of leveraged companies that could enter bankruptcy proceedings, posing significant risks to investment returns[285]. - The company’s investments in mezzanine loans are generally subordinated to senior loans and may involve above-average risk and volatility[275]. - Portfolio companies may face financial distress, leading to uncertainty regarding the satisfaction of distressed debt, which could result in losses for the company[288]. - Rising interest rates may hinder portfolio companies' ability to repay loans, increasing the risk of defaults and negatively impacting the company's financial condition[289]. Regulatory and Compliance Challenges - Changes in laws or regulations may require the company to alter its business strategy, potentially incurring significant compliance costs[252]. - The company incurs significant expenditures to comply with Section 404 of the Sarbanes-Oxley Act, which may negatively impact financial performance and ability to make distributions[267]. - The company is restricted from participating in certain transactions with affiliates without prior approval, limiting investment opportunities[238]. - The company has adopted compliance policies to prevent violations of federal securities laws and reviews them annually[112]. Debt and Financing - The company must meet a borrowing base test of less than or equal to 60% and a market value test of at least 167.5% to make new borrowings under the Credit Facility[322]. - An event of default under the Credit Facility could prevent the company from making distributions to stockholders, adversely affecting its ability to maintain RIC status[323]. - The Private Notes and Public Notes are unsecured and effectively subordinated to any secured indebtedness incurred by the company or its subsidiaries[327]. - The company may not receive cash from WhiteHorse Credit if it does not generate sufficient cash to make distributions, impacting its ability to distribute to stockholders[319]. - The Credit Facility restricts the portfolio manager's ability to purchase and sell investments, potentially impairing performance[324]. - The company may lose management control of WhiteHorse Credit if an event of default occurs, which could lead to performance issues[325]. Valuation and Conflicts of Interest - The valuation process for non-publicly traded securities may create conflicts of interest, as the Investment Adviser determines fair value[232]. - The fair value of portfolio investments is based on unobservable inputs and significant management judgment, which may lead to material differences from actual realizable values[245]. - The company may face conflicts of interest due to arrangements with H.I.G. Capital and the Investment Committee, which may not align with stockholder interests[222]. - The allocation policy for investment opportunities will be periodically approved by the Investment Adviser and reviewed by independent directors[239]. Indenture and Note Risks - The indenture for the 4.000% 2026 Notes offers limited protection, allowing the company to incur additional indebtedness without restrictions[333]. - The company may face risks related to credit or market value deterioration in its portfolio companies, which could harm operating results[318]. - The 7.875% 2028 Notes indenture offers limited protection and does not restrict the company from incurring additional debt or engaging in corporate transactions[339]. - Upon a change in control, holders of Private Notes may require prepayment at 100% of the aggregate principal amount plus accrued interest, which could adversely affect the company's financial condition[344]. - The company may choose to prepay Private Notes when prevailing interest rates are low, specifically on or after set prepayment dates[345].
WhiteHorse Finance(WHF) - 2023 Q4 - Earnings Call Transcript
2024-02-29 20:45
WhiteHorse Finance (NASDAQ:WHF) Q4 2023 Results Conference Call February 29, 2024 1:00 PM ET Company Participants Jacob Moeller - Rose & Company Stuart Aronson - Chief Executive Officer Joyson Thomas - Chief Financial Officer Conference Call Participants Mickey Schleien - Ladenburg Bryce Rowe - B. Riley Erik Zwick - Hovde Group Melissa Wedel - JPMorgan Operator Good afternoon. My name is Angela, and I will be your conference operator today. At this time, I would like to welcome everyone to the WhiteHorse Fi ...
WhiteHorse Finance(WHF) - 2023 Q4 - Annual Results
2024-02-29 12:30
Exhibit 99.1 WhiteHorse Finance, Inc. Announces Fourth Quarter and Full Year 2023 Earnings Results and Declares Quarterly Distribution of $0.385 Per Share NEW YORK, February 29, 2024 /PRNewswire/ -- WhiteHorse Finance, Inc. ("WhiteHorse Finance" or the "Company") (Nasdaq: WHF) today announced its financial results for the year ended December 31, 2023. In addition, the Company's board of directors has declared a distribution of $0.385 per share with respect to the quarter ending March 31, 2024. The distribut ...
WhiteHorse Finance(WHF) - 2023 Q3 - Earnings Call Transcript
2023-11-09 23:29
WhiteHorse Finance, Inc. (NASDAQ:WHF) Q3 2023 Results Conference Call November 9, 2023 2:00 PM ET Company Participants Stuart Aronson - CEO Joyson Thomas - CFO Conference Call Participants Jacob Moeller - Rose & Company Melissa Wedel - JP Morgan Mickey Schleien - Ladenburg Robert Dodd - Raymond James Operator Good afternoon. My name is Britney, and I will be your conference operator today. At this time, I would like to welcome everyone to the WhiteHorse Finance Third Quarter 2023 Earnings Conference Call. ...
WhiteHorse Finance(WHF) - 2023 Q3 - Quarterly Report
2023-11-09 12:34
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 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) (State or ...
WhiteHorse Finance(WHF) - 2023 Q2 - Earnings Call Transcript
2023-08-08 17:09
WhiteHorse Finance (NASDAQ:WHF) Q2 2023 Earnings Conference Call August 8, 2023 9:00 AM ET Company Participants Jacob Moeller – Rose & Company Stuart Aronson – Chief Executive Officer Joyson Thomas – Chief Financial Officer Conference Call Participants Sean-Paul Adams – Raymond James Mitchel Penn – Oppenheimer Erik Zwick – Hovde Group Operator Good morning. My name is Mike, and I will be your conference operator today. At this time, I would like to welcome everyone to the WhiteHorse Finance Second Quarter 2 ...
WhiteHorse Finance(WHF) - 2023 Q2 - Earnings Call Presentation
2023-08-08 17:01
| --- | --- | |-----------------------------------------------------------------------------|-------| | | | | | | | | | | | | | WhiteHorse Finance, Inc. Earnings Presentation Quarter Ended June 30, 2023 | | | | | NASDAQ: WHF (Common Stock) Important Information and Forward Looking Statements 1 References in this presentation to "WHF", "we", "us", "our" and "the Company" refer to WhiteHorse Finance, Inc. This presentation and the information and views included herein do not constitute investment advice, or a ...
WhiteHorse Finance(WHF) - 2023 Q2 - Quarterly Report
2023-08-08 11:33
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 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 45-42 ...
WhiteHorse Finance(WHF) - 2023 Q1 - Earnings Call Transcript
2023-05-09 23:16
WhiteHorse Finance, Inc. (NASDAQ:WHF) Q1 2023 Earnings Conference Call May 9, 2023 1:00 PM ET Company Participants Robert Brinberg - Rose & Co. Stuart Aronson - CEO & Director Joyson Thomas - CFO & Principal Accounting Officer Conference Call Participants Mickey Schleien - Ladenburg Thalmann & Co. Robert Dodd - Raymond James & Associates Erik Zwick - Hovde Group Bryce Rowe - B. Riley Securities Melissa Wedel - JPMorgan Chase & Co. Operator Good afternoon. My name is Shelby, and I will be your conference ope ...
WhiteHorse Finance(WHF) - 2023 Q1 - Quarterly Report
2023-05-09 21:16
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 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 45-4 ...