WHF 10-K & 10-Q changes, risk factors and insider trading

The following table illustrates the effect of leverage on returns from an investment in our common stock as of December 31, 2024,2025, assuming that we employ leverage such that our asset coverage equals (1) our actual asset coverage as of December 31, 20242025 and (2) 150%, each at various annual returns, net of expenses and as of December 31, 2024.2025. The purpose of this table is to assist investors in understanding the effects of leverage. The calculations in the table below are hypothetical and actual returns may be higher or lower than those appearing in the table below.

Based on our outstanding indebtedness of $356.0$328.5 million as of December 31, 20242025 and an average cost of funds of 6.88%, 5.375%,5.58%, 5.375%, 4.00%, 5.625%, 4.250% and 7.875%, which were the effective annualized interest rates of the Credit2025 Facility, 5.375% 2025CLO Notes, 5.375% 2026 Notes, 4.000% 2026 Notes, 5.625% 2027 Notes, 4.250% 2028 Notes and 7.875% 2028 Notes, respectively, as of that date, our investment portfolio must experience an annual return of at least 3.29%3.04% to cover annual interest payments on our outstanding indebtedness.

Based on our outstanding indebtedness of $572.3$519.6 million (equal to an assumed 150% asset coverage ratio) and an average cost of funds of 6.88%,5.90% 5.375%,5.58%, 5.375%, 4.00%, 5.625%, 4.250% and 7.875%, which were the effective annualized interest rates of the Credit Facility, 5.375% 2025 Notes,CLO Notes 5.375% 2026 Notes, 4.000% 2026 Notes, 5.625% 2027 Notes, 4.250% 2028 Notes and 7.875% 2028 Notes, respectively, as of December 31, 2024,2025, our investment portfolio must experience an annual return of at least 4.19%3.75% to cover annual interest payments on our outstanding indebtedness. The annualized interest rate of 5.90% on the Credit Facility assumes a spread on outstanding indebtedness of 2.25% plus three-month SOFR of 3.65% as of December 31, 2025.

Since we are using debt to finance investments, our net investment income will depend, in part, upon the difference between the rate at which we borrow funds and the rate at which we invest those funds. As a result, a significant change in market interest rates may have a material adverse effect on our net investment income. In periods of rising interest rates when we have debt outstanding, our cost of funds will increase, which could reduce our net investment income. See “Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

From March 2022 to July 2023, the Federal Reserve periodically raised interest rates to combat inflation concerns and maintained the same benchmark rate from July 2023 to September 2024. While the Federal Reserve cut its benchmark raterates in the third quarter of 2024 for the first time since March 2020 and indicated that there may be additional rate cuts inthrough 2025, following the most recent cut in December 2024, future reductionsreduction to benchmark rates are not certain. Additionally, there can be no assurance that the Federal Reserve will not make upwards adjustments to the federal funds rate in the future.

The 5.375% 2025 Notes mature on October 20, 2025 and bear interest at an annual rate of 5.375%. The 5.375% 2026 Notes mature on December 4, 2026 and bear interest at an annual rate of 5.375%. The 5.625% 2027 Notes mature on December 4, 2027 and bear interest at an annual rate of 5.625%. The 4.250% 2028 Notes mature on December 6, 2028 and bear interest at an annual rate of 4.25%. The 7.785% 2028 Notes mature on September 15, 2028 and bear interest at an annual rate of 7.875%. The 4.000% 2026 Notes mature on December 15, 2026 and bear interest at an annual rate of 4.00%. The Private Notes and the Public Notes are not secured by any of our assets or any of the assets of our subsidiaries and rank equally in right of payment with all of our existing and future unsubordinated, unsecured senior indebtedness. As a result, the Private Notes and the Public Notes are effectively subordinated to any secured indebtedness we or our subsidiaries have currently incurred and may incur in the future (or any indebtedness that is initially unsecured to which we subsequently grant security) to the extent of the value of the assets securing such indebtedness. In any liquidation, dissolution, bankruptcy or other similar proceeding, the holders of any of our existing or future secured indebtedness and the secured indebtedness of our subsidiaries may assert rights against the assets pledged to secure that indebtedness in order to receive full payment of their indebtedness before the assets may be used to pay other creditors, including the holders of the Private Notes and the Public Notes.

The 5.375% 2025 Notes, the 5.375% 2026 Notes, the 5.625% 2027 Notes, the 4.250% 2028 Notes, 4.000% 2026 Notes and the 7.875% 2028 Notes will mature on October 20, 2025, December 4, 2026, December 4, 2027, December 6, 2028, December 15, 2026 and September 15, 2028, respectively, unless redeemed, purchased or prepaid prior to such date by us or our affiliates in accordance with their terms. There are several circumstances under which an event of default may occur under the Note Purchase Agreements for the Private Notes or the indentures for the Public Notes, such as failure to make scheduled principal or interest payments and certain events of bankruptcy, insolvency or reorganization.

Upon a change in control event, holders of each of the Private Notes may require us to prepay for cash some or all of the respective Private Notes at a prepayment price equal to 100% of the aggregate principal amount of the 5.375% 2025 Notes, 5.375% 2026 Notes, 5.625% 2027 Notes and 4.250% 2028 Notes being prepaid, plus accrued and unpaid interest to, but not including, the date of prepayment. If a change in control were to occur, we may not have sufficient funds to prepay any such accelerated indebtedness.

At any time on or after April 20, 2025, June 4, 2026, June 4, 2027 and March 6, 2028 (each a Prepayment Date), the 5.375% 2025 Notes, 5.375% 2026 Notes, 5.625% 2027 Notes and 4.250% 2028 Notes may be prepaid, respectively, at our option, at 100% of the principal amount, together with accrued and unpaid interest to the Prepayment Date. Prior to each respective Prepayment Date, we may prepay all or any principal amount of the respective Private Notes, together with accrued and unpaid interest, subject to a make-whole premium.

We may choose to prepay the Private Notes and redeem the Public Notes from time to time, especially when prevailing interest rates are lower than the rate borne by the respective Private Notes and the Public Notes. If prevailing rates are lower at the time of prepayment, holders would not be able to reinvest the proceeds in a comparable security at an effective interest rate as high as the interest rate on the Private Notes being repaid and the Public Notes being redeemed. Our prepayment and redemption right may adversely impact holders’ ability to sell the Private Notes and the Public Notes as the applicable prepayment date and redemption date approaches. If we choose to prepay the Private Notes prior to theirthe respectivematurity datesdate of maturityDecember 15, 2026 and/or redeem the Public Notes prior to the maturity date of maturity on December 15, 2026 or September 15, 2028, we will need to obtain sufficient liquidity, through available cash, refinancings of our existing indebtedness or otherwise, to repay the principal or redemption price, together with any accrued and unpaid interest and applicable make-whole premiums, on the Private Notes and the Public Notes. For example, in September 2025, the Company repaid the 5.375% 2025 Notes in full prior to their maturity date on October 20, 2025.

On February 1, 2025, President Donald Trump announced the imposition of a 25% additional tariff on imports from Canada and Mexico as well as an additional 10% tariff on imports from China as part of a broader strategy to leverage access to American markets in exchange for concessions from other countries. On February 20, 2026, the Supreme Court announced its decision in Learning Resources Inc. v. Trump, et al., setting aside those tariffs. In response thereto, President Trump announced a 10% global tariff on all imports. The continued pursuitmaintenance of such a strategy and any judicial resistance thereto could result in changes to American trade policy, that would negatively impact our portfolio companies by subjecting them to the aforementioned material negative effects associated with tariffs and an increasingly uncertain investment environment.

We are currently operating in a period of severe capital markets disruptions and economic uncertainty which could impair our portfolio companies’ financial positions and operating results and affect the industries in which we invest and, in turn, harm our operating results.

The U.S. and global markets have, from time to time, experienced periods of disruption due to events such as terrorist attacks; acts of war; natural disasters, such as earthquakes, tsunamis, fires, floods or hurricanes; and outbreaks of epidemic, pandemic or contagious diseases. Such events have created, and continue to create, economic and political uncertainties and have contributed to recent global economic instability. In particular, the U.S. capital markets have recently experienced, and continue to experience, extreme volatility and disruption as a result of inflation, changing interest rates, the Russia-Ukraine war, U.S military action in Venezuela, conflicts in the Middle EastEast, Iran and the Gulf States and the possibility of an economic recession. These events are having an adverse impact on the ability of lenders to originate loans, the volume and type of loans originated, the ability of borrowers to make payments on their loans and the volume and type waivers given to borrowers and remedies in the event of a default, each of which could have an adverse impact on the quantity and quality of loans available to us. Unfavorable economic conditions could also increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us, which could have a material adverse effect on our business, financial condition and results of operations. See “— Continued uncertainty surrounding geopolitical and economic conditions could have a material adverse effect on our business, results of operations and financial condition.”

International security issues and adverse developments in respect thereof such as the current political tension between Russia, Ukraine and potentially western security alliances could materially adversely affect global trade and economic activity. TheU.S military action in Venezuela, and conflicts between Russia and Ukraine and in the Middle EastEast, Iran and the Gulf States have caused disruption, instability and volatility in global markets, economies and industries that could negatively impact our business, results of operations and financial condition. The conflicts have already resulted in significant volatility in certain equity, debt and currency markets, material increases in certain commodity prices, and economic uncertainty. The conflicts may escalate and its resolution is unclear. For example, the U.S. government and other governments have imposed severe sanctions against Russia and Russian interests and threatened additional sanctions and controls. Sanctions and export control laws and regulations are complex, frequently changing, and increasing in number, and they may impose additional legal compliance costs or business risks associated with our operations.

In addition, the ongoing conflicts in the Middle East and political instability in Latin America may also cause additional inflation, disrupt supply chains and potentially destabilize the region. These ongoing conflicts may also disrupt local, regional, national, and global markets and economies affected by sanctions, and it is not possible to predict how long such conflicts and any related sanctions will last. It is also not possible to predict with certainty these ongoing conflicts’ additional adverse effects on existing macroeconomic conditions, currency exchange rates, and financial markets, all of which may affect our business operations or the business operations of our portfolio companies.

In addition to the increasing geopolitical risks in Ukraine and the Latin America and the Middle East region, economic conditions across the world face continued uncertainty due to inflation, higher interest rates, global supply chain challenges, concerns of an economic recession and heightened volatility in key emerging market economies. New or continued economic deterioration will renew concerns about sovereign debt sustainability, interdependencies among financial institutions and sovereigns, and political and other risks, particularly as many global central banks implement differing monetary policy. Continued uncertainty in the external environment has led to increased concern around the near- to medium-term outlook for economic progress in the regions in which we operate, or may in the future operate, including Europe and Asia.

There is significant uncertainty with respect to legislation, regulation and government policy at the federal level, as well as at the state and local levels. Recent events, including the 2024 U.S. presidential election, have created a climate of heightened uncertainty and introduced new and difficult-to-quantify macroeconomic and political risks with potentially far-reaching implications. The presidential administration’s changes to U.S. policy may impact, among other things, the U.S. and global economy, international trade and relations, unemployment, immigration, taxes, healthcare, the U.S. regulatory environment, inflation and other areas. Although we cannot predict the impact, if any, of these changes to our business, they could adversely affect our business, financial condition, operating results and cash flows. Until we know what policy changes are made and how those changes impact our business and the business or our competitors over the long term, we will not know if, overall, we will benefit from them or be negatively affected by them.

For the period January 1, 20252026 through March 7,6, 2025,2026, we contributed threetwo additional assets to the STRS JV, which included one issuer of senior secured debt facilities held as of December 31, 2024.2025.

PIK income increased by $1.6 million for the year ended December 31, 2024 from the year ended December 31, 2023, primarily from investments to portfolio companies Honors Holdings, LLC (d/b/a Orange Theory), MSI Information Services, Inc. and Telestream Holdings Corporation. We may invest in loans that contain a PIK interest rate provision where PIK interest is accrued at the contractual rates and added to loan principal on the reset dates to the extent such amounts are expected to be collected. For the years ended December 31, 2025 and December 31, 2024, PIK income as a percentage of total investment income was 3.0% and 7.8%, respectively.

Fee and dividend incomeincome, excluding STRS JV, decreased by $1.1$0.1 million for the year ended December 31, 20242025 from the year ended December 31, 2023, due to lower non-recurring fee income.2024. We expect to generate some level of non-recurring fee income during most quarters from prepayments, amendments and other sources. For the years ended December 31, 2025 and December 31, 2024, we earned non-recurring fee income of $2.0 million and $1.1 million, respectively.

Interest and dividend income from STRS JV increaseddecreased by $1.1$2.3 million for the year ended December 31, 20242025 from the year ended December 31, 2023,2024, primarily attributable to highera interest income earned from investmentsdecrease in base rates and portfolio companies.yields. For the year ended December 31, 2025 and December 31, 2024, the weighted average yield of the debt portfolio was 10.5% and 12.0%, respectively.

Interest expense decreased by $2.0$4.8 million for the year ended December 31, 20242025 from the year ended December 31, 2023,2024, primarily due to lower weighted average borrowing base.base and weighted average interest rate. For the year ended December 31, 2025, the weighted average outstanding borrowings were $359.2 million at a weighted average interest rate of 5.65%. For the year ended December 31, 2024, the weighted average outstanding borrowings were $376.5 million at a weighted average interest rate of 6.37%. For the year ended December 31, 2023, the weighted average outstanding borrowings were $427.2 million at a weighted average interest rate of 6.39%.

Base management fees decreased by $2.6$1.0 million for the year ended December 31, 20242025 from the year ended December 31, 2023,2024, primarily due to thea baselower management fee ratebase reductionof to$52.4 1.75% from 2.00% effective January 1, 2024.million.

Performance-based incentive fees decreased by $1.4$3.0 million for the year ended December 31, 20242025 from the year ended December 31, 2023,2024, was mainly attributable to lower pre-incentive fee net investment income. For the year ended December 31, 2025, the Company recognized an irrevocable fee waiver of $0.2 million. For the years ended December 31, 20242025 and 2023,2024, there were no capital gains incentive fee expense incurred.

General and administrative expenses increased $0.8$0.3 million for the year ended December 31, 20242025 from the year ended December 31, 2023,2024, primarily due to higher legalaudit and dealtax related expenses.fees.

For the yearyears ended December 31, 2025 and December 31, 2024, we accrued a net federal excise tax expense of $0.7 million and $1.1 million.million, For the year ended December 31, 2023, we accrued a net federal excise tax expense of $1.0 million.respectively.

As of both December 31, 20242025 and December 31, 2023,2024, we and STRS Ohio owned approximately 65.71% and 34.29%, respectively, of the LLC equity interests of STRS JV. As of both December 31, 20242025 and December 31, 2023,2024, our investment in STRS JV consisted of equity contributions and subordinated note advance commitments of $23.0 million and $92.0 million, respectively, of which $1.9 million and $7.6 million were unfunded, respectively.

As of December 31, 2024,2025, the Credit Facility provided for borrowings in an aggregate principal amount up to $335.0$100.0 million with an accordion feature which allows for the expansion of the borrowing limit up to $375.0 million, subject to consent from the Lender and other customary conditions.million. As of December 31, 2024,2025, the required minimum outstanding borrowings under the Credit Facility were $234.5$50.0 million.

Advances under the Credit Facility are based on SOFR for USD denominated borrowings plus an annual spread of 2.50%.2.25%. The Credit Facility bears interest at EurIBOR,EurIBOR for EUR denominated borrowings, CDORCORRA for CAD denominated borrowings,borrowings SONIA,and SONIA for GBP denominated borrowings, plus a spread of 2.35%2.25% on outstanding borrowings. Interest is payable quarterly in arrears. WhiteHorse Credit is required to pay a non-usage fee which accrues at 0.75%0.55% per annum on the average daily unused amount of the financing commitments, to the extent the aggregate principal amount available under the Credit Facility has not been borrowed. WhiteHorse Credit is required to pay a minimum outstanding borrowing fee which accrues at 2.25% per annum on the average daily outstanding principal borrowing amounts below the minimum funding amount. WhiteHorse Credit paid an upfront fee and incurred certain other customary costs and expenses in connection with obtaining the Credit Facility. Any amounts borrowed under the Credit Facility will mature, and all accrued and unpaid interest thereunder will beare due and payable, on NovemberJanuary 22,17, 2025.2030.

On October 20, 2020, we entered into the 2025 Note Purchase Agreement to sell in a private offering $40 million of aggregate principal amount of unsecured notes to qualified institutional investors in reliance on Section 4(a)(2) of the Securities Act. Interest on the 5.375% 2025 Notes is payable semiannually on April 20 and October 20, at a fixed, annual rate of 5.375%. This interest rate is subject to increase (up to 6.375%) in the event that, subject to certain exceptions, the 5.375% 2025 Notes cease to have an investment grade rating. The 5.375% 2025 Notes mature on October 20, 2025, unless redeemed, purchased or prepaid prior to such date by us or our affiliates in accordance with their terms. The 5.375% 2025 Notes are general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness that we may issue. The closing of the transaction occurred on October 20, 2020. We used the net proceeds from this offering to redeem existing debt. On September 29, 2025 the 5.375% 2025 Notes were fully repaid by the Company.

Under the investment company financial accounting guidance, as formally codified in Accounting Standards Codification, or ASC, Topic 946, Financial Services - Investment Companies, we are precluded from consolidating any entity other than another investment company. As provided under ASC Topic 946, we generally consolidate any investment company when we own 100% of its partners’ or members’ capital or equity units. We own a 100% equity interest in each of WhiteHorse Credit, WhiteHorse Finance (CA), LLC (“WhiteHorse California”), WHF PMA Holdco Blocker, LLC, WHF American Craft Blocker, LLC, WhiteHorse RCKC Holdings, LLC, WhiteHorse Finance CLO I, LLC and WhiteHorse Finance Holdings, LLC, which are investment companies for accounting purposes. As such, we have consolidated the accounts of WhiteHorse Credit, WhiteHorse California, WHF PMA Holdco Blocker, LLC, WHF American Craft Blocker, LLC, WhiteHorse RCKC Holdings LLC, WhiteHorse Finance CLO I, LLC and WhiteHorse Finance Holdings, LLC into our financial statements. As a result of this consolidation, the amount outstanding under the Credit Facility and the 2025 CLO Securitization is treated as our indebtedness.

The Investment Adviser, as the valuation designee, is responsible for determining the fair value of the portfolio investments that are not publicly traded, whose market prices are not readily available on a quarterly basis in good faith or any other situation where portfolio investments require a fair value determination. The Investment Adviser has retained one or more independent valuation firms to review the valuation of each portfolio investment that does not have a readily available market quotation at least once during each 12-month period. Independent valuation firms retained by the Investment Adviser provide a valuation review on approximately 25% of our investments for which market quotations are not readily available each quarter to ensure that the fair value of each investment for which a market quote is not readily available is reviewed by an independent valuation firm at least once during each 12-month period. However, the Investment Adviser does not intend to have de minimis investments of less than 1.5% of our total assets (up to an aggregate of 10% of our total assets) independently reviewed.

Our investment activities are managed by WhiteHorse Advisers and are supervised by our board of directors, a majority of whom are independent of us, WhiteHorse Advisers and its affiliates. Under the second amended and restated investment advisory agreement, which was executed by the Company on February 22, 2024 (the “Investment Advisory Agreement”),Agreement, we have agreed to pay WhiteHorse Advisers an annual base management fee based on our average consolidated gross assets as well as an incentive fee based on our investment performance. Under our administration agreement (the "Administration Agreement") with H.I.G. WhiteHorse Administration ("WhiteHorse Administration"), we have agreed to reimburse WhiteHorse Administration for our allocable portion (subject to the review and approval of our independent directors) of overhead and other expenses incurred by WhiteHorse Administration in performing its obligations under the Administration Agreement.

On MayAugust 7,10, 2026, WhiteHorse Advisers voluntarily agreed to waive and reduce the incentive fee on net investment income from its stated annual rate of 20.00% to 17.50% for the next fiscal quarter ending JuneSeptember 30, 2026.

Comparison of the Three and Six Months Ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025

Set forth below are the consolidated results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025:

Consolidated operating results for the three and six months ended MarchJune 31,30, 2026 and 2025 are as follows:

Net investment income for the three and six months ended MarchJune 31,30, 2026 totaled $5.6$4.7 million.million and $10.3 million, respectively. Net investment income for the three and six months ended MarchJune 31,30, 2025 totaled $6.8$6.6 million.million and $13.4 million, respectively. Net investment income decreased by $1.2$1.9 million and $3.1 million for the three and six months ended MarchJune 31,30, 2026 from the three and six months ended MarchJune 31,30, 2025, as described below under “Investment Income” and “Operating Expenses.”

The following table summarizes our investment income for the three and six months ended MarchJune 31,30, 2026 and 2025:

Interest income other than PIK income, decreased $2.7$3.5 million and $6.2 million for the three and six months ended MarchJune 31,30, 2026 from the three and six months ended MarchJune 31,30, 2025, primarily attributable to lower yields, investments placed on non-accrual status and lower portfolio size. For the three and six months ended MarchJune 31,30, 2026, the weighted average size of the debt portfolio, excluding STRS JV, and the weighted average cash yield on income producing investments, excluding STRS JV, was $443.8$435.6 million and 9.0%,$443.9 million, and 8.6% and 8.8%, respectively. For the three and six months ended MarchJune 31,30, 2025, the weighted average size of the debt portfolio, excluding STRS JV, and the weighted average cash yield on income producing investments, excluding STRS JV, was $568.5$549.6 million and 9.0%$553.7 million, and 8.9% and 8.9%, respectively.

PIK income decreased by $0.1 million for the three months ended MarchJune 31,30, 2026 from the three months ended MarchJune 31,30, 2025. PIK income earned for the three months ended MarchJune 31,30, 2026 was primarily derived from investments in Midwest Texas Tea CA, LLC (d/b/a US Petroleum Partners, LLC) of $0.1 million and Camp Facility Services Holdings, LLC (d/b/a Camp Construction Services, Inc.) of $0.1 million and various investments aggregating $0.4 million. PIK income decreased by $0.2 million for the six months ended June 30, 2026 from the six months ended June 30, 2025. PIK income earned for the threesix months ended MarchJune 31,30, 20252026 was primarily derived from investments in MotivationalCamp Marketing,Facility Services Holdings, LLC (d/b/a MotivationalCamp FulfillmentConstruction Services, Inc.) of $0.2 millionmillion, Claridge Products and ChaseEquipment, ProductsLLC Co.of $0.1 million, Snap Fitness Holdings, Inc. (fd/kb/a StarcoLift Brands, Inc.) of $0.1 million and various investments aggregating $0.7 million.

We may invest in loans that contain a PIK interest rate provision where PIK interest is accrued at the contractual rates and added to loan principal on the reset dates to the extent such amounts are expected to be collected. For the three and six months ended MarchJune 31,30, 2026, PIK income as a percentage of total investment income was 3.9%.3.7% and 3.8%, respectively. For the three and six months ended MarchJune 31,30, 2025, PIK income as a percentage of total investment income was 3.7%.3.5% and 3.6%, respectively.

Fee and dividend income decreased by $0.1$0.6 million and $0.7 million for the three and six months ended MarchJune 31,30, 2026 from the three and six months ended MarchJune 31,30, 2025. We expect to generate some level of non-recurring fee income during most quarters from prepayments, amendments and other sources. For the three and six months ended MarchJune 31,30, 2026, we earned non-recurring fee income of $0.3$0.1 million and $0.4 million. For the three and six months ended MarchJune 31,30, 2025, we earned non-recurring fee income of $0.4$0.7 million and $1.1 million.

Interest and dividend income from STRS JV decreased by $0.1$0.2 million and $0.3 million for the three and six months ended MarchJune 31,30, 2026 from the three months ended MarchJune 31,30, 2025, primarily attributable to a decrease in base rates and portfolio yields, partially offset by a larger investment portfolio.

The following table summarizes our expenses for the three and six months ended MarchJune 31,30, 2026 and 2025:

Interest expense decreased by $1.2$1.3 million and $2.5 million for the three and six months ended MarchJune 31,30, 2026 from the three and six months ended MarchJune 31,30, 2025, primarily due to lower weighted average borrowing base and weighted average interest rate. For the three and six months ended MarchJune 31,30, 2026, the weighted average outstanding borrowings were $328.5 million atand a weighted average interest rate of 5.35%. For the three months ended March 31, 2025, the weighted average outstanding borrowings were $366.5$328.5 million at a weighted average interest rate of 5.77%.5.24% and 5.27%, respectively. For the three and six months ended June 30, 2025, the weighted average outstanding borrowings were $371.3 million and $370.6 million at a weighted average interest rate of 5.72% and 5.79%, respectively.

Base management fees decreased by $0.3 million and $0.6 million for the three and six months ended MarchJune 31,30, 2026 from the three months ended MarchJune 31,30, 2025, primarily due to lower gross assets.

Performance-based incentive fees decreased by $0.5$0.6 million and $1.2 million for the three and six months ended MarchJune 31,30, 2026 from the three and six months ended MarchJune 31,30, 2025, primarily due to lower pre-incentive fee net investment income. For the three and six months ended MarchJune 31,30, 2026, the Company recognized an irrevocable fee waiver of $0.2$0.1 million.million and $0.3 million, respectively. For the three and six months ended MarchJune 31,30, 2026 and 2025, there were no capital gains incentive fee expenses incurred.

Excise tax was $0.1 million and $0.1$0.2 million for the three and six months ended MarchJune 31,30, 20262026, respectively. Excise tax was $0.2 million and March$0.3 31,million for the three and six months ended June 30, 2025, respectively. As of MarchJune 31,30, 2026 and December 31, 2025, we accrued a net federal excise tax expense of $0.9$0.3 million and $0.8 million, respectively.

The following table shows the breakdown of net realized gains and losses on investments for the three and six months ended MarchJune 31,30, 2026 and 2025:

The following table shows the breakdown in the changes in unrealized appreciation and depreciation of investments for the three and six months ended MarchJune 31,30, 2026 and 2025:

We may become a party to financial instruments with off-balance sheet risk in the normal course of our business to meet the financial needs of our portfolio companies. These instruments may include commitments to extend credit and involve elements of liquidity and credit risk in excess of the amount recognized on the consolidated statements of assets and liabilities. As of MarchJune 31,30, 2026 and December 31, 2025, we had commitments to fund approximately $39.0$35.8 million and $41.0 million, respectively, of revolving lines of credit or delayed draw facilities to our portfolio companies. We reasonably believe that we have sufficient assets to adequately cover and allow us to satisfy our outstanding unfunded commitments.

Our operating activities provided cash and cash equivalents of $28.2$15.3 million during the threesix months ended MarchJune 31,30, 2026, primarily from realizations and repayments on our investments, partially offset from acquisition of investments and cash used from the net change in working capital. Our financing activities used cash and cash equivalents of $8.6$16.9 million during the threesix months ended MarchJune 31,30, 2026, primarily due to payment of distributions to stockholders and purchases of common stock.

Our operating activities usedprovided cash and cash equivalents of $7.0$14.7 million during the threesix months ended MarchJune 31,30, 2025, primarily from realizations and repayments on our investments, partially offset from acquisition of investments and cash used from the net change in working capital the net proceeds, partially offset from realizations and repayments on our investments.capital. Our financing activities used cash and cash equivalents of $1.2$9.3 million during the threesix months ended MarchJune 31,30, 2025, primarily due to payment of distributions to stockholders,stockholders offsetand withrepayment of net fundingsborrowings on the Credit Facility.Facility, offset with the issuance of the 2025 CLO Notes.

As of MarchJune 31,30, 2026, we had cash and cash equivalent resources of $49.4$28.1 million, including $37.6$19.6 million of restricted cash. As of MarchJune 31,30, 2026, we had approximately $50.0 million undrawn under the Credit Facility based on the collateral and portfolio quality requirements stipulated in the related credit agreement. As of MarchJune 31,30, 2026, due to borrowing base limitations, approximately $45.7$39.8 million was available to be drawn under the Credit Facility based on these requirements.

In January 2019, we and STRS Ohio formed a joint venture, STRS JV, that invests primarily in senior secured loans, including first lien and second lien facilities, to performing lower middle market companies across a broad range of industries that typically carry a floating interest index rate based on SOFR, or an equivalent index rate and have a term of three to six years. STRS JV invests in portfolio companies in the same industries in which we may directly invest. STRS JV was formed as a Delaware LLC and is not consolidated by either us or STRS Ohio for financial reporting purposes. On July 19, 2019, STRS JV formally launched operations. As of MarchJune 31,30, 2026, STRS JV had total assets of $337.2$350.3 million. As of December 31, 2025, STRS JV had total assets of $335.9 million.

We provide capital to STRS JV in the form of LLC equity interests and subordinated notes. In February 2023, we increased our capital commitment to the STRS JV in the amount of an additional $15.0 million, bringing our total capital commitment to the STRS JV to $115.0 million, comprised of $92.0 million of subordinated notes and $23.0 million of LLC equity interests. We previously increased our capital commitment in February 2022 to the STRS JV in the amount of an additional $25.0 million, bringing our then total capital commitment to the STRS JV to $100.0 million, comprised of $80.0 million of subordinated notes and $20.0 million of LLC equity interests.

As of both MarchJune 31,30, 2026 and December 31, 2025, we and STRS Ohio owned approximately 65.71% and 34.29%, respectively, of the LLC equity interests of STRS JV. As of bothJune March30, 31,2026, 2026our investment in STRS JV consisted of equity contributions and subordinated note advance commitments of $23.0 million and $92.0 million, respectively, of which $1.4 million and $5.7 million were unfunded, respectively. As of December 31, 2025, our investment in STRS JV consisted of equity contributions and subordinated note advance commitments of $23.0 million and $92.0 million, respectively, of which $1.9 million and $7.6 million were unfunded, respectively.

Below is a summary of STRS JV’s portfolio as of MarchJune 31,30, 2026 and December 31, 2025:

See Note 4 to our consolidated financial statements for further discussion on STRS JV’s portfolio and selected balance sheet information as of MarchJune 31,30, 2026 and December 31, 2025 and selected statement of operations information for the three and six months ended MarchJune 31,30, 2026 and 2025.

On March 31, 2023, we entered into an equity distribution agreement,agreement or (the “Equity Distribution Agreement,Agreement”), with WhiteHorse Advisers, WhiteHorse Administration and B. Riley Securities, Inc., as the sales agent, or the Sales Agent, in connection with the sale of shares of our common stock, with an aggregate offering price of up to $35.0 million. The Equity Distribution Agreement provides that we may offer and sell shares of our common stock from time to time through the Sales Agent in amounts and at times to be determined by us (the “ATM Offering”).us. Actual sales will depend on a variety of factors to be determined by us from time to time, including market conditions and the trading price of our common stock. We expect to use all or substantially all of the net proceeds from the ATM OfferingProgram to invest in portfolio companies in accordance with our investment objective and strategies and for general corporate purposes.

During the three and six months ended MarchJune 31,30, 2026, we repurchased additional common stock after deducting commissions, in the aggregate of $3.0$2.6 million and $5.6 million, afterrespectively. deductingAs commissionsof andJune $12.130, 2026, $9.5 million remained available under the Repurchase Program.

Our wholly owned subsidiary WhiteHorse Credit I, LLC, or WhiteHorse Credit initially, entered into the Credit Facility on December 23, 2015. As of MarchJune 31,30, 2026 and December 31, 2025, the Credit Facility had a maximum borrowing capacity of $50.0 million and $100.0 million, respectively. The reinvestment period for the Credit Facility expires on January 17, 2028 and the maturity date for the Credit Facility is January 17, 2030.

As of MarchJune 31,30, 2026, the Credit Facility provided for borrowings in an aggregate principal amount up to $50.0 million. As of MarchJune 31,30, 2026, the required minimum outstanding borrowings under the Credit Facility were $25.0 million.

As of MarchJune 31,30, 2026, there were no outstanding borrowings under the Credit Facility and, based on collateral and portfolio requirements stipulated in the Credit Facility agreement, approximately $50.0 million was undrawn in credit facility on such date. The Credit Facility is secured by all of the assets of WhiteHorse Credit, which included loans with a fair value of $126.6$118.1 million as of MarchJune 31,30, 2026.

The following table presents additional information on the 2025 CLO Notes issued in the 2025 CLO Securitization as of MarchJune 31,30, 2026 and December 31, 2025:

As part of the 2025 CLO Securitization, the Company entered into master loan sale agreements that provide for the sale of assets on the 2025 CLO Securitization closing date as well as for future sales from the Company to WHF CLO. The 2025 CLO Securitization is collateralized and secured by a diversified portfolio of senior secured loans or participation interests therein with the potential for reinvestment in (i) first and second lien loans or participation interests therein, (ii) corporate bonds or (iii) loans made to a debtor-in-possession pursuant to Section 364 of the Bankruptcy Code (“DIP loans”). Through May 25, 2029, all principal collections received on the underlying collateral may be used by WHF CLO to purchase new collateral (allowing the Company to maintain the initial leverage obtained in the 2025 CLO Securitization) under the direction of H.I.G. Capital, L.L.C., an affiliate of the Investment Advisor,Adviser, in its capacity as the collateral manager to WHF CLO (the “CLO Investment Manager”), and in accordance with the Company’s investment strategy and subject to customary conditions set forth in the documents governing the 2025 CLO Securitization; any fees that the CLO Investment Manager would otherwise be entitled to for providing such services has been waived. The 2025 CLO Notes are scheduled to mature on May 5, 2037; however, they may be redeemed by the Company, at the written direction of (i) a majority of the Subordinated Notes (with the consent of the CLO Investment Manager) or (ii) the CLO Investment Manager (with the consent of a majority of the 2025 Subordinated CLO Notes), in each case, on any business day on or after June 10, 2027.

As of MarchJune 31,30, 2026, there were 3236 portfolio companies with a total fair value of approximately $261.7$296.0 million securing the 2025 CLO Securitization. As of December 31, 2025, there were 35 portfolio companies with a total fair value of approximately $294.6 million securing the 2025 CLO Securitization. The pool of loans in the 2025 CLO Securitization must meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements.

On December 4, 2020, we entered into the 2026 Note Purchase Agreement to sell in a private offering $10 million of aggregate principal amount of unsecured notes to qualified institutional investors in reliance on Section 4(a)(2) of the Securities Act. Interest on the 5.375% 2026 Notes is payable semiannually on June 4 and December 4, at a fixed, annual rate of 5.375%. This interest rate is subject to increase (up to 6.375%) in the event that, subject to certain exceptions, the 5.375% 2026 Notes cease to have an investment grade rating. The 5.375% 2026 Notes mature on December 4, 2026, unless redeemed, purchased or prepaid prior to such date by us or our affiliates in accordance with their terms. The 5.375% 2026 Notes are general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness that we may issue. The closing of the transaction occurred on December 4, 2020.

On December 4, 2020, we entered into the 2027 Note Purchase Agreement to sell in a private offering $10 million of aggregate principal amount of unsecured notes to qualified institutional investors in reliance on Section 4(a)(2) of the Securities Act. Interest on the 5.625% 2027 Notes is payable semiannually on June 4 and December 4, at a fixed, annual rate of 5.625%. This interest rate is subject to increase (up to 6.625%) in the event that, subject to certain exceptions, the 5.625% 2027 Notes cease to have an investment grade rating. The 5.625% 2027 Notes mature on December 4, 2027, unless redeemed, purchased or prepaid prior to such date by us or our affiliates in accordance with their terms. The 5.625% 2027 Notes are general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness that we may issue. The closing of the transaction occurred on December 4, 2020.

On December 6, 2021, we entered into the 2028 Note Purchase Agreement to sell in a private offering $25 million of aggregate principal amount of unsecured notes to qualified institutional investors in reliance on Section 4(a)(2) of the Securities Act. Interest on the 4.250% 2028 Notes is payable semiannually on June 6 and December 6, at a fixed, annual rate of 4.25%. This interest rate is subject to increase (up to 5.25%) in the event that, subject to certain exceptions, the 4.250% 2028 Notes cease to have an investment grade rating. The 4.250% 2028 Notes mature on December 6, 2028, unless redeemed, purchased or prepaid prior to such date by us or our affiliates in accordance with their terms. The 4.250% 2028 Notes are general unsecured obligations that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness that we may issue. The closing of the transaction occurred on December 6, 2021.

On August 24, 2023, the Company completed a public offering of 7.875% 2028 Notes in aggregate principal amount of $30 million, the net proceeds of which were used to fund investments in debt and equity securities and repay outstanding indebtedness under its revolving credit facility. Additionally, the offering included an overallotment feature for up to an additional $4.5 million of aggregate principal amount under the same terms as the initial offering. On August 31, 2023, the underwriters fully exercised their option to purchase an additional $4.5 million, bringing the aggregate principal amount of the 7.875% 2028 Notes to $34.5 million. Interest on the 7.875% 2028 Notes is paid quarterly on March 15, June 15, September 15 and December 15 each year, at an annual rate of 7.875%. The 7.875% 2028 Notes will mature on September 15, 2028 and may be redeemed in whole or in part at any time, or from time to time, at the Company’s option on or after September 15, 2025. The 7.875% 2028 Notes are direct unsecured obligations and are structurally subordinate to borrowings under the Credit Facility and 2025 CLO Securitization and will rank pari passu with all outstanding and future unsecured unsubordinated indebtedness we may issue. The 7.875% 2028 Notes are listed on the Nasdaq Global Select Market under the trading symbol “WHFCL”.

As of MarchJune 31,30, 2026, our investment portfolio consisted primarily of senior secured loans across 128131 positions in 6567 companies with an aggregate fair value of $543.0$569.2 million. As of MarchJune 31,30, 2026, the majority of our portfolio was comprised of senior secured loans to lower middle market borrowers and nearly all of those loans were variable-rate investments (primarily indexed to SOFR) with five fixed-rate loan investments representing 1.4% based on fair value. As of MarchJune 31,30, 2026, our portfolio had an average investment size of $3.5$3.6 million based on fair value and average debt investment size of $4.8$4.9 million, with investment sizes ranging from zero to $20.2$20.4 million and a weighted average effective yield of 8.7%8.8% (and a weighted average effective yield on income-producing debt investments of 10.8%).

For the threesix months ended MarchJune 31,30, 2026, we invested $28.1$58.6 million in new and existing portfolio companies, offset by repayments and sales of $58.9$69.9 million. Proceeds from sales totaled $30.0$35.5 million while repayments included $2.0$3.8 million of scheduled repayments and $26.9$30.6 million of unscheduled repayments.

For the threesix months ended MarchJune 31,30, 2025, we invested $47.2$90.5 million in new and existing portfolio companies, offset by repayments and sales of $37.5$100.5 million. Proceeds from sales totaled $18.5$42.5 million while repayments included $1.4$3.1 million of scheduled repayments and $17.6$54.9 million of unscheduled repayments.

During the three and six months ended MarchJune 31,30, 2026, we declared to stockholders distributions of $0.26$0.25 and $0.51 per share for total distributions of $5.8$5.4 million.million and $11.1 million, respectively. During the three and six months ended MarchJune 31,30, 2025, we declared to stockholders distributions of $0.385 and $0.77 per share for total distributions of $8.9 million.million and $17.9 million, respectively.

To the extent our taxable earnings fall below the total amount of our distributions for a fiscal year, a portion of those distributions may be deemed a return of capital to our stockholders for U.S. federal income tax purposes. Thus, the source of a distribution to our stockholders may be the original capital invested by the stockholder rather than our income or gains. During the threesix months ended MarchJune 31,30, 2026, we estimate that distributions to stockholders included $5.8$11.1 million of ordinary income, for tax purposes, based on earnings for the fiscal year ended December 31, 2025 and current earnings for the threesix months ended MarchJune 31,30, 2026. The specific tax characteristics of the distribution are reported to stockholders subject to tax reporting on Form 1099-DIV after the end of each calendar year and in our periodic reports with the SEC. Stockholders should read any written disclosure accompanying a distribution payment carefully and should not assume that the source of any distribution is our ordinary income or gains.

Under the investment company financial accounting guidance, as formally codified in Accounting Standards Codification, or ASC, Topic 946, Financial Services - Investment Companies, we are precluded from consolidating any entity other than another investment company. As provided under ASC Topic 946, we generally consolidate any investment company when we own 100% of its partners’ or members’ capital or equity units. We own a 100% equity interest in each of WhiteHorse Credit, WhiteHorse Finance (CA), LLC (“WhiteHorse California”), WHF American Craft Blocker, LLC, WhiteHorse RCKC Holdings, LLC, WhiteHorse FinanceWHF CLO I, LLC and WhiteHorse Finance Holdings, LLC, which are investment companies for accounting purposes. As such, we have consolidated the accounts of WhiteHorse Credit, WhiteHorse California, WHF American Craft Blocker, LLC, WhiteHorse RCKC Holdings LLC, WhiteHorse FinanceWHF CLO I, LLC and WhiteHorse Finance Holdings, LLC into our financial statements. As a result of this consolidation, the amount outstanding under the Credit Facility and the 2025 CLO Securitization is treated as our indebtedness.