WhiteHorse Finance, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>WhiteHorse Finance, Inc. has filed its 2023 annual report (10-K) detailing its financial performance and operations for the fiscal year ending December 31, 2023.</b>

AI Summary

WhiteHorse Finance, Inc. (WHFCL) filed a Annual Report (10-K) with the SEC on March 5, 2024. WhiteHorse Finance, Inc. filed its 2023 Form 10-K on March 5, 2024. The filing covers the fiscal year ending December 31, 2023. The company is incorporated in Delaware. Its principal business address is 1450 Brickell Avenue, 31st Floor, Miami, FL 33131. The SEC file number for this filing is 814-00967.

Why It Matters

For investors and stakeholders tracking WhiteHorse Finance, Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of WhiteHorse Finance's financial health, investment portfolio, and strategic direction for the past fiscal year, crucial for investors to assess performance and future prospects. The detailed information within the 10-K allows stakeholders to understand the company's regulatory compliance, risk exposures, and operational strategies, enabling informed investment decisions.

Risk Assessment

Risk Level: medium — WhiteHorse Finance, Inc. shows moderate risk based on this filing. The company operates in the financial services sector, which is subject to significant regulatory oversight and market volatility, as indicated by the numerous industry-specific tags and the nature of a 10-K filing.

Analyst Insight

Investors should review the detailed financial statements and risk factors in the 10-K to understand WhiteHorse Finance's performance and potential risks.

Key Numbers

• 20231231 — Fiscal Year End (Period covered by the report)
• 20240305 — Filed As Of Date (Date the report was filed)
• 98 — Public Document Count (Number of documents in the filing)
• 454247759 — IRS Number (Company's IRS identification number)

Key Players & Entities

• WhiteHorse Finance, Inc. (company) — Filer name
• 0001552198 (company) — Central Index Key
• DE (company) — State of Incorporation
• Miami (company) — Business Address City
• FL (company) — Business Address State
• 33131 (company) — Business Address Zip
• 814-00967 (regulator) — SEC File Number
• 20240305 (date) — Filing Date

FAQ

Industry Context

WhiteHorse Finance, Inc. operates as a business development company (BDC) that provides debt and equity capital to lower middle market companies. The filing is a standard annual report for publicly traded companies.

Regulatory Implications

As a BDC, WhiteHorse Finance is subject to regulations under the Investment Company Act of 1940, which governs its investment activities and capital structure.

What Investors Should Do

1. Review the full 10-K filing for detailed financial statements and management's discussion and analysis.
2. Analyze the company's investment portfolio and industry concentrations disclosed in the report.
3. Assess the risk factors section for potential challenges and uncertainties facing the company.

Key Dates

• 2024-03-05: 10-K Filing — Submission of the annual report for the fiscal year ending December 31, 2023.
• 2023-12-31: Fiscal Year End — End date of the reporting period.

Year-Over-Year Comparison

This is the initial 10-K filing for the fiscal year 2023, following previous filings which would have been for prior fiscal years.

Key Financial Figures

• $0.001 — Registered Common Stock, par value $0.001 per share WHF The Nasdaq Stock Mark
• $12.70 — ed on the closing price on that date of $12.70 on the Nasdaq Global Select Market was
• $40 million — al; " 5.375% 2025 Notes " refer to the $40 million aggregate principal amount of 5.375% un
• $10 million — es; " 5.375% 2026 Notes " refer to the $10 million aggregate principal amount of 5.375% un
• $25 million — es; " 4.250% 2028 Notes " refer to the $25 million aggregate principal amount of 4.25% uns
• $75 million — ts " 4.000% 2026 Notes " refer to the $75 million aggregate principal amount of 4.00% uns
• $34.5 million — 21; " 7.875% 2028 Notes " refer to the $34.5 million aggregate principal amount of 7.875% un
• $30 million — 28 Notes; " 2020 Notes " refer to the $30 million senior notes issued on July 23, 2013 an
• $35 million — ust 9, 2018; "2025 Notes" refer to the $35 million aggregate principal amount of 6.50% uns
• $335 million — and " Credit Facility " refers to the $335 million secured revolving credit facility betwe
• $50 million — ompanies with enterprise values between $50 million and $350 million. Our investment object
• $350 million — terprise values between $50 million and $350 million. Our investment objective is to generat
• $696.2 million — n aggregate fair value of approximately $696.2 million. As of December 31, 2022, our investmen
• $760.2 million — n aggregate fair value of approximately $760.2 million. As of both dates, the majority of our
• $55 billion — 3, H.I.G. Capital managed approximately $55 billion of capital (based on regulatory assets

Filing Documents

• whf-20231231x10k.htm (10-K) — 14045KB
• whf-20231231xex10d5.htm (EX-10.5) — 56KB
• whf-20231231xex21d1.htm (EX-21.1) — 7KB
• whf-20231231xex23d1.htm (EX-23.1) — 5KB
• whf-20231231xex23d2.htm (EX-23.2) — 5KB
• whf-20231231xex31d1.htm (EX-31.1) — 16KB
• whf-20231231xex31d2.htm (EX-31.2) — 16KB
• whf-20231231xex32d1.htm (EX-32.1) — 7KB
• whf-20231231xex32d2.htm (EX-32.2) — 7KB
• whf-20231231xex97d1.htm (EX-97.1) — 30KB
• whf-20231231xex99d1.htm (EX-99.1) — 7KB
• whf-20231231xex99d2.htm (EX-99.2) — 2816KB
• whf-20231231x10k007.jpg (GRAPHIC) — 11KB
• whf-20231231x10k011.jpg (GRAPHIC) — 95KB
• 0001558370-24-002482.txt (&nbsp;) — 51874KB
• whf-20231231.xsd (EX-101.SCH) — 137KB
• whf-20231231_cal.xml (EX-101.CAL) — 55KB
• whf-20231231_def.xml (EX-101.DEF) — 625KB
• whf-20231231_lab.xml (EX-101.LAB) — 680KB
• whf-20231231_pre.xml (EX-101.PRE) — 597KB
• whf-20231231x10k_htm.xml (XML) — 11777KB

Business

Business 4 Item 1A.

Risk Factors

Risk Factors 30 Item 1B. Unresolved Staff Comments 76 Item 1C. Cybersecurity 77 Item 2.

Properties

Properties 78 Item 3.

Legal Proceedings

Legal Proceedings 78 Item 4. Mine Safety Disclosures 78 Part II. Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 79 Item 6. Reserved 84 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 84 Item 7A. Quantitative and Qualitative Disclosure about Market Risk 110 Item 8. Consolidated Financial Statements and Supplementary Data 112 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 178 Item 9A.

Controls and Procedures

Controls and Procedures 178 Item 9B. Other Information 179 Item 9C . Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 179 Part III. Item 10. Directors, Executive Officers and Corporate Governance 179 Item 11.

Executive Compensation

Executive Compensation 184 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 185 Item 13. Certain Relationships and Related Transactions, and Director Independence 187 Item 14. Principal Accounting Fees and Services 187 Part IV. Item 15 . Exhibits and Financial Statements 188 Item 16. Form 10-K Summary 191

Signatures

Signatures 192 2 Table of Contents PART I In this annual report on Form 10-K, except as otherwise indicated, the terms: " we, " " us, " " our, " the " Company " and " WhiteHorse Finance " refer (unless the context otherwise requires) to WhiteHorse Finance, Inc., a Delaware corporation, and its consolidated subsidiaries, WhiteHorse Credit (as defined below) and WhiteHorse California (as defined below); " H.I.G. Capital " refers (unless the context otherwise requires), collectively, to H.I.G. Capital, L.L.C., a Delaware limited liability company, and its affiliates. H.I.G. Capital employs all of WhiteHorse Finance ' s investment professionals, as well as those of WhiteHorse Advisers (as defined below), WhiteHorse Administration (as defined below) and their respective affiliates; " WhiteHorse Credit " refers to WhiteHorse Finance Credit I, LLC, a special purpose Delaware limited liability company and a wholly owned subsidiary of WhiteHorse Finance; " WhiteHorse California " refers to WhiteHorse Finance (CA), LLC, a special purpose Delaware limited liability company and a wholly owned subsidiary of WhiteHorse Credit; " WhiteHorse Advisers " and the " Investment Adviser " refer to H.I.G. WhiteHorse Advisers, LLC, a Delaware limited liability company and an affiliate of H.I.G. Capital; " WhiteHorse Administration " and the " Administrator " refer to H.I.G. WhiteHorse Administration, LLC, a Delaware limited liability company and an affiliate of H.I.G. Capital; " 5.375% 2025 Notes " refer to the $40 million aggregate principal amount of 5.375% unsecured notes due 2025 privately issued on October 20, 2020 to qualified institutional investors in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended; " 2025 Note Purchase Agreement " refers to the note purchase agreement, dated October 20, 2020, governing the issuance and sale of the 5.375% 2025 Notes; " 5.375% 2026 Notes " refer to the $10 million aggregate principal amount of 5.375% unsecured n

Business

Item 1. Business General We are an externally managed, non-diversified, closed-end management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940, as amended, or the 1940 Act. In addition, for tax purposes, we have elected to be treated as a regulated investment company, or RIC, under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code, and intend to qualify annually for such treatment. We are a direct lender targeting debt investments in privately held, lower middle market companies located in the United States. We define the lower middle market as those companies with enterprise values between $50 million and $350 million. Our investment objective is to generate attractive risk-adjusted returns primarily by originating and investing in senior secured loans, including first lien and second lien facilities, to performing lower middle market companies across a broad range of industries. Such loans typically are based on a floating interest rate index such as the Secured Overnight Financing Rate, or SOFR, plus a spread and typically have a term of three to six years. While we focus principally on originating senior secured loans to lower middle market companies, we may also make opportunistic investments at other levels of a company's capital structure, including mezzanine loans or equity interests, and in companies outside of the U.S. based lower middle market, to the extent we believe the investment presents an opportunity to achieve an attractive risk-adjusted return. We also may receive warrants to purchase common stock in connection with our debt investments. We generate current income through the receipt of interest payments, as well as origination and other fees, capital appreciation and dividends. We invest primarily in loans and securities that are rated below investment grade by rating agencies or that may be rated below investment grade if they were so rated

View Full Filing

View this 10-K filing on SEC EDGAR