WhiteHorse Finance Q4 2025 Earnings Call - Aggressive Buybacks at Deep Discount to Narrow NAV Gap

Beau, Conference Call Operator: Standby, your meeting is about to begin. Good afternoon, everyone. Welcome to today’s WhiteHorse Finance fourth quarter 2025 earnings call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. To register to ask a question at any time, please press star 1 on your telephone, and to remove yourself from the queue, press star 2. Please note this call is being recorded, and it is now my pleasure to turn the meeting over to Mr. Rob Munnings of Rose & Company. Please go ahead, sir.

Rob Munnings, IR Representative, Rose & Company: Thank you, Beau, and thank you everyone for joining us today to discuss WhiteHorse Finance’s fourth quarter 2025 earnings results. Before we begin, I would like to remind everyone that certain statements made during this call, which are not based on historical facts, including any statements relating to financial guidance, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Because these forward-looking statements involve known and unknown risks and uncertainties, these are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. WhiteHorse Finance assumes no obligation or responsibility to update any forward-looking statements. Today’s speakers may refer to material from the WhiteHorse Finance fourth quarter 2025 earnings presentation, which was posted to our website this morning. With that, allow me to introduce WhiteHorse Finance’s CEO, Stuart Aronson.

Stuart, you may begin.

Stuart Aronson, Chief Executive Officer, WhiteHorse Finance, Inc.: Thank you, Rob. Good afternoon, everyone, and thank you for joining us today. As you’re aware, we issued our earnings this morning before the market opened. I hope you’ve had a chance to review the results for the period ending December 31, 2025, which can also be found on our website. On today’s call, I’ll begin by addressing our fourth quarter results and current market conditions. Joyson Thomas, our Chief Financial Officer, will discuss our performance in greater detail. We will open the floor for questions. Our results for the fourth quarter of 2025 reflected improved earnings and NAV performance relative to the prior quarter. Q4 GAAP net investment income and core NII was $6.6 million or $0.287 per share compared with Q3 GAAP and core NII of $6.1 million or $0.263 per share.

NAV per share at the end of Q4 was $11.68 compared to $11.41 at the end of Q3, an increase of approximately 2.4%. The increase in NAV resulted from share repurchases that were accreted to NAV by approximately $0.184 per share, as well as net realized and unrealized gains of approximately $0.077 per share, while also reflecting distributions paid during the quarter of $0.25 per share in base dividends and $0.035 per share in special dividends. We will continue our distribution policy framework that was previously discussed, where the company intends to distribute a quarterly base distribution of $0.25, as well as make potential supplemental distributions above the base level in the future pursuant to this distribution policy.

For the first quarter of 2026, the company declared a $0.01 per share supplemental distribution in addition to our base $0.25 dividend. To the extent our non-accrual and other troubled situations in our portfolio result in recoveries or if current market conditions improve and/or base rates increase and any of these factors lead to additional earnings, we will be prepared to share those incremental earnings with investors in the form of supplemental or special distributions. Turning to shareholder value, we recognize that our shares have traded at a persistent discount to NAV, we’ve been focused on taking concrete steps to improve earnings power and narrow that gap over time. Over the last several quarters, we have prioritized actions that directly support sustainable net investment income and long-term value.

First, we completed a term debt securitization through our CLO vehicle, which included $164 million of AAA-rated notes priced at 3 months SOFR plus 170 basis points. This transaction improves the stability and cost profile of a meaningful portion of our secured leverage. Second, our advisor voluntarily agreed to reduce the incentive fee on net investment income from 20% to 17.5% for the most recently completed fiscal quarter and the first quarter of 2026, providing near-term support for distributable earnings. In Q4, this voluntary reduction reduced incentive fees by approximately $200,000 and provided additional support for our quarterly distributions. The advisor may extend this voluntary reduction. However, the duration and extent of any future reductions are uncertain and will be subject to ongoing discussions with the board.

Finally, during Q4, the company repurchased approximately 1 million shares for an aggregate cost of approximately $7.4 million, which was accretive to NAV by approximately $0.184 per share. Given the continued gap in price to book. Our board has approved an incremental authorization to our share repurchase program of approximately $7.5 million, bringing the total authorization to $22.5 million with approximately $15 million still available under the authorization. This expanded program positions us to continue repurchasing shares opportunistically at prices below NAV when conditions warrant. Looking ahead, in addition to executing on portfolio repositioning and disciplined origination and building on the actions we’ve already taken, we and the board will continue to evaluate and pursue other potential avenues to enhance shareholder value.

Turning to our portfolio activity, we had gross capital deployments of $77.1 million in Q4, which was partially offset by repayments and sales of $49.6 million, resulting in net deployments of $27.5 million before the effects of transferring assets into the STRS JV. Gross capital deployments consisted of 7 new originations totaling $64 million, and the remaining amounts were deployed to fund 9 add-ons to existing investments. In addition, there were $1.2 million in net repayments on revolver commitments during the quarter. Our new originations in Q4 included a mix of sponsor and non-sponsor deals at an average underwriting leverage of approximately 4.3x EBITDA. All of our Q4 deals were first lien loans. Pricing reflected competitive market conditions, and our focus remained on structure and credit quality.

Total repayments and sales were driven by complete or partial realizations in four portfolio companies, Brooklyn Bedding, Bridgepoint Healthcare, ELM, One Call Locators, and Contemporary Services Corporation. In the case of Brooklyn Bedding and ELM, or in the cases of Brooklyn Bedding and ELM, we led new financings that took out the old financings. At the end of Q4, 99.7% of our debt portfolio was first lien. Senior secured and our portfolio continued to reflect a balanced mix of sponsor and non-sponsor investments. The weighted average effective yield on our income-producing debt investments decreased to 11% at the end of Q4 compared to 11.6% at the end of Q3, mainly due to lower spreads and lower base rates.

The weighted average effective yield on our overall portfolio also decreased to 9.1% at the end of Q4 compared to approximately 9.5% at the end of Q3. During the quarter, the BDC transferred 2 new deals and 2 existing investments to the STRS JV, totaling $19.2 million. At the end of Q4, the STRS JV portfolio had an aggregate fair value of $323.6 million and an average effective yield of 9.9%. We continue to successfully utilize the STRS JV and believe WhiteHorse Finance’s equity investment in the JV continues to provide attractive returns to our shareholders.

After net deployments and JV transfer activity, as well as net realized and unrealized gains recognized during the quarter, total investments increased from the prior quarter by $10.2 million to $578.6 million. This compares to our portfolio’s fair value of $568.4 million at the end of Q3. During the quarter, we recognized $11.3 million in net realized losses and approximately $13.1 million in net unrealized gains for an aggregate total of $1.9 million in net realized and unrealized gains in Q4.

The net realized and unrealized gains of net $1.9 million or $0.077 per share were primarily driven by a $1.1 million unrealized gain in Sklar Holdings, also known as Starco, a $0.7 million unrealized gain on Motivational Fulfillment and other net markups across the portfolio. These items were partially offset by a $0.7 million unrealized loss in Lumen LATAM. We recognized realized losses of $11.6 million, primarily driven by an $11.2 million from the Aspect Software investment restructuring and exit and $0.5 million from the partial sale of ThermoDisc. These investments were already marked down in prior periods and reflected in our fair value.

The Q4 realizations largely converted previously recognized unrealized losses into realized losses, which accordingly also resulted in a corresponding net unrealized gain of $11.6 million in the quarter. With the Aspect Software realization, those debt investments were removed from non-accrual status. Our small remaining exposure in Thermodisk was placed on non-accrual status as of quarter end, with the remaining investment already sold and exited in Q1 of 2026. Excluding the STRS JV, non-accrual investments represented 2.4% of the total debt portfolio at fair value. The remaining issuers on non-accrual at quarter end were Honors Holdings, New Cycle Solutions, PlayMonster, and Thermodisk. As always, we continue to actively manage underperforming credits, leveraging our dedicated restructuring resources and the broader capabilities of H.I.G. Subsequent to quarter end, we’ve had some credit-specific updates worth noting.

We have seen negative developments at Honors Holdings, where new year sign-ups were below budget. Based on the current information we have, we would expect a markdown in the first quarter of 2026. In addition, Outward Hound is being sold at a price that is below our fourth quarter marks based on weak performance in Q4. The gap between the Q4 mark and the anticipated recovery is approximately $3 million. On Lumen LATAM, we received updated financial information during this quarter, and we exited a portion of that position at current market values, which were below the mark in Q4. Partially offsetting these items, we’ve seen positive developments in certain credits, including Telestream, Starco, and PlayMonster. Aside from the credits on non-accrual, our portfolio continues to perform well. I would also note that we have modest exposure to internet or software companies.

The BDC software exposure across six portfolio names represents 10% of the portfolio at cost and 9% at fair value. Market conditions remain competitive, with capital availability continuing to exceed new deal supply. In the mid-market, we’re generally seeing sponsor-backed deals pricing in the SOFR plus 450-525 range, and in the lower mid-market in the SOFR plus 450-550 range, with terms varying by credit quality and structure. We have been avoiding certain large cap opportunities where we believe the market has been overheated, both in documentation and pricing. We are also highly focused on minimizing exposure to liability management executions in new investments.

For investors less familiar with the term, liability management execution or LME risk refers to the risk that a borrower can move assets away from the existing lenders and pledge them to new lenders, effectively subordinating the original senior debt. We are working to ensure that structures and documentation provided adequate protections for all the deals we do against this risk. Looking forward, we’re seeing somewhat better deal volume than this time last year. The sentiment we hear from bankers and private equity sponsors is for an increase in M&A volumes in 2026, supported by lower interest rates, abundant capital, and increased pressure on sponsors from LPs to drive realizations. At the same time, the market continues to recognize the possibility of volatility from political and geopolitical developments which could disrupt M&A activity. In the non-sponsor market, conditions remain stable and less competitive than the sponsor market.

Average leverage is approximately 4 to 4.5x, Pricing continues to be generally at SOFR plus 600 or above, with our non-sponsor portfolio performing as well as or better than the sponsor portfolio. We continue to focus significant resources on the non-sponsored market, where there are better risk returns in many cases and much less competition than what we are seeing in the on-the-run sponsor market. We currently have 21 originators covering 12 regional markets. Given market conditions, these originators are heavily focused on sourcing off-the-run sponsor deals and non-sponsor deals as we look for value in a market where there is limited deal flow and a lot of aggressiveness. Subsequent to quarter end, the BDC has closed on 2 new deals and 7 add-on investments totaling $20 million and had 1 sale on ThermoDisc totaling $1.1 million.

Following the net deployment activity to date in Q4, the capital reserve for share buybacks, the BDC’s remaining capacity is very limited. At the end of the fourth quarter, the STRS JV’s remaining capacity was approximately $55 million. Pro forma for recently mandated deals to be eventually transferred and anticipated repayments, the JV’s capacity is approximately $35 million currently. Additionally, we continue to expect a normal level of repayment activity over time. For 2026, our current estimate is that approximately 30% of the portfolio could repay over the course of the year, consistent with the typical 3 to three and a half year average life for loans. Although actual repayment timing will be driven by M&A refinancing activity and company-specific outcomes. Our pipeline remains lower than normal for this time of year. We currently have five new mandates and are working on one add-on to existing deal.

Our five mandates are all sponsor deals. While there can be no assurance that any of these deals will close, all of these credits could fit into the BDC or our JV should we elect to transact and if there is room for more assets. All the sponsor mandates have pricing of 450 to 550 over SOFR. With that, I’ll turn the call over to Joyson for additional performance details and a review of our portfolio composition. Joyson.

Joyson Thomas, Chief Financial Officer, WhiteHorse Finance, Inc.: Thanks, Stuart. Thanks, everyone, for joining today’s call. During the quarter, we recorded GAAP net investment income and core NII of $6.6 million or $0.287 per share. This compares with Q3 GAAP NII and core NII of $6.1 million or $0.263 per share, as well as our previously declared fourth quarter base distribution of $0.25 per share. Q4 fee income was approximately $0.8 million, primarily due to higher prepayment fee activity relative to the prior quarter. For the quarter, we reported a net increase in net assets resulting from operations of $8.4 million. Our risk ratings during the quarter showed that approximately 85.9% of our portfolio positions either carried a one or two rating, an increase from the 81.8% reported in the prior quarter.

Upgrades during the quarter included investments in Telestream and Max Solutions. Downgrades during the quarter included moving our positions in Outward Hound from a 4 to a 5 rating as well as ThermoDisc from a 3 to a 5 rating, given those investments anticipated exit values in Q1. As a reminder, a 1 rating indicates that a company has seen its risk of loss reduced relative to initial expectations, and a 2 rating indicates the company is performing according to such initial expectations. Regarding the BDC specifically, we continue to utilize the platform as a complement to the BDC. As Stuart mentioned earlier, we transferred 2 new deals and 2 existing investments during the fourth quarter to the STRS JV, totaling $19.2 million.

As of December 31, 2025, the JV’s portfolio held positions in 43 portfolio companies with an aggregate fair value of $323.6 million, compared to an aggregate fair value of $341.5 million as of September 30, 2025. Leverage for the JV at the end of Qfour was approximately 1.07 times, compared with 1.24 times at the end of the prior quarter. The investment in the JV continues to be accretive for BDC’s earnings, generating a low teens return on equity. During Qfour, income recognized from our JV investment aggregated to approximately $3.8 million, compared to approximately $3.6 million reported in Qthree.

As we have noted in prior calls, the yield on our investment in the JV may fluctuate period over period as a result of a number of factors, including the timing and amount of additional capital investments, changes in asset yields in the underlying portfolio, and the overall credit performance of the JV’s investment portfolio. Turning to our balance sheet now. We had cash resources of approximately $29.7 million at the end of Q4, including $22.7 million in restricted cash. As of December 31st, 2025, the company’s asset coverage ratio for borrowed amounts, as defined by the 1940 Act, was 179.1%, which was above the minimum asset coverage ratio of 150%.

Our Q4 net effective debt-to-equity ratio after adjusting for cash on hand was approximately 1.15 times, compared with 1.07 times from the prior quarter. In regards to our share repurchase program, as Stuart noted earlier, our board approved a $7.5 million increase to the existing authorization, bringing the total share repurchase program to $22.5 million, with approximately $15 million of that still to be used. I’d like to also highlight that in addition to the company share repurchase activity, certain company insiders and other individuals and H.I.G. affiliate employees also purchased shares in the open market during the prior quarter, including 87,000 shares by certain officers and directors of WhiteHorse Finance, as disclosed on Form 4 filings. This demonstrates their view of WhiteHorse Finance’s valuation.

Before I conclude and open up the call to questions, I’d like to discuss our recent distributions and corresponding distribution policy. This morning, we announced that our board declared a first quarter base distribution of $0.25 per share. Consistent with our existing distribution framework, the board also evaluated and declared a supplemental $0.01 per share distribution in addition to the regular quarterly distribution. The distributions will be payable on April 6, 2026, to stockholders of record as of March 12, 2026.

As a reminder, the frameworks of board will use to determine supplemental distribution, if any, will be calculated as the lesser of, 1, 50% of the quarter’s earnings that is in excess of the quarterly base distribution, and 2, an amount that results in no more than a $0.15 per share decline in NAV per share over the current quarter and preceding quarter. Earnings for the purpose of measuring the excess over the quarter’s base distribution is net investment income. The NAV decline measurement is inclusive of the supplemental distribution calculated, and to be clear, is measured over the two most recently completed quarters. We believe this formulaic supplemental distribution framework allows us to maximize distributions to our shareholders while preserving the stability of our NAV, a factor that we do believe to be an important driver of shareholder economics over time.

In assessing distributions, we also consider our taxable income relative to amounts that we have distributed during the year when setting our overall dividend. Our current estimate of undistributed taxable income, sometimes referred to as our spillover, as of the end of Q4 2025 is approximately $27.6 million, and pro forma for our distribution already made in January 2026 is approximately $21.6 million. We continue to believe that having a healthy level of spillover income is beneficial to the long-term stability of our base dividend. We will continue to monitor our undistributed earnings and balance these levels against prudent capital management considerations. As we said previously, we will continue to evaluate our quarterly distribution, both in near and medium term, based on the core earnings power of our portfolio in addition to other relevant factors that may warrant consideration.

With that, I’ll now turn the call back over to the operator for your questions. Operator?

Beau, Conference Call Operator: Thank you, sir. Ladies and gentlemen, at this time, if you have any questions, please press star one. You can remove yourself from the queue by pressing star two. Once again, that’s star one for questions, we’ll pause for one moment to allow everyone a chance to join the queue. We’ll go first today to Rick Shane with J.P. Morgan.

Rick Shane / Christopher Nolan / Robert Dodd, Equity Analyst / Analyst, J.P. Morgan / Ladenburg Thalmann / Raymond James: Hey guys, thanks for taking my question. Look, solid quarter, stock is still trading, you know, 40%-plus discount to NAV. You have announced an increase to the repurchase. I am curious, this is not gonna be a shock given all the questions that I’ve asked over and over again on earnings calls, how are you balancing the opportunity in terms of what’s out there for new deployment versus the attractiveness of your stock? As we think about that, can you just give us a sense of how you’re gonna be managing leverage as well?

Stuart Aronson, Chief Executive Officer, WhiteHorse Finance, Inc.: Yes. Thanks for the questions, Rick. The simple answer is, at the current trading levels or really anything close to the current trading levels, we think our stock represents a very attractive purchase, which is why the board originally authorized the $15 million buyback and why insiders, including myself, have been buying shares at or near current levels. Given how far the shares had traded down, and given the success of the buyback in the last quarter, the board authorized an increased amount for buybacks. We have very limited availability of capital for new on-balance sheet transactions. The JV generates a higher return, we are still doing some JV transactions.

As long as the shares are continuing to trade at this type of discount, one of the best things we can do with our capital is to buy the shares. Also that it wasn’t in your question, but I’ll highlight, we in the board are viscerally aware of the significance of the discount, and are looking at options that we can try to avail ourselves of to improve the earnings of the BDC, and/or improve value to shareholders.

Rick Shane / Christopher Nolan / Robert Dodd, Equity Analyst / Analyst, J.P. Morgan / Ladenburg Thalmann / Raymond James: I appreciate that. Again, I mean, look, I think the challenge ultimately is, I think you would suggest that of your investment options, buying the stock at this discount for yourselves might be the most attractive. In general, we’ve seen BDCs struggle with that approach. Is the expectation if we see, you know, net runoff in the portfolio that that capital will largely be redeployed into repurchases at this point? Is that how we should be thinking about things? How will you balance that?

Stuart Aronson, Chief Executive Officer, WhiteHorse Finance, Inc.: The board is gonna continue to evaluate the trading price vis-à-vis the NAV and make decisions with the management to try to optimize performance for the shareholders. That is why even though we had enough capital to continue the buyback into the next quarter, the board wanted to send a message to shareholders by increasing the capital by another $7.5 million. Each quarter, the board will look at the trading level and the market to determine what it thinks the best use of capital would be. At the moment, as opposed to putting assets on the balance sheet, we are primarily focused on repurchasing shares at currently, as you said, a 40% or more discount to NAV, which is very accretive to both NAV and also accretive to NII.

Rick Shane / Christopher Nolan / Robert Dodd, Equity Analyst / Analyst, J.P. Morgan / Ladenburg Thalmann / Raymond James: Got it. Really appreciate the clarity of the answers. Thank you, guys.

Stuart Aronson, Chief Executive Officer, WhiteHorse Finance, Inc.: No problem.

Beau, Conference Call Operator: Thank you. We’ll go next now to Christopher Nolan with Ladenburg Thalmann.

Speaker 0: Hi. Following up on the previous question, what measure does the board use to compare the performance of WhiteHorse BDC to its peers?

Stuart Aronson, Chief Executive Officer, WhiteHorse Finance, Inc.: We look at a whole series of metrics. Joyce, and I may pass it to you to highlight what those metrics are. We look at return on the share price. We look at costs that the BDC incurs versus others, and we look at our trading level vis-à-vis the discount to NAV compared to other BDCs. Joyce, did I miss any there that are important?

Rick Shane / Christopher Nolan / Robert Dodd, Equity Analyst / Analyst, J.P. Morgan / Ladenburg Thalmann / Raymond James: No. I think I would just add also just that the dividend yield relative to NAV, obviously based on our own analyses on what the core earnings power of the portfolio is.

Speaker 0: Okay. Do you guys feel that your exposure to the JV senior loan funds effectively takes a first lien investment on the scheduled investments, puts it into the JV, and suddenly you are in a subordinate position because you’re holding equity in the JV? Is that a correct analysis?

Stuart Aronson, Chief Executive Officer, WhiteHorse Finance, Inc.: We put leverage on the JV, and we are subordinated to that leverage. That is correct.

Speaker 0: You’re in a subordinate position. You’re getting a mid-teens return. Do you think in the current environment, which is sensitive to the asset quality of private credit, that part of the discount in your share price could be the fact that the market’s looking at these SLF positions and saying they’re second lien, and they’re giving the appropriate haircut?

Stuart Aronson, Chief Executive Officer, WhiteHorse Finance, Inc.: We haven’t heard that from any of our covering analysts, nor have we heard that directly from any shareholders. The JV portfolio is remarkably clean, in terms of performance. And while we do have leverage on the JV and leverage on the BDC, that leverage is against a pool of first lien assets. Modest leverage against first lien assets is frankly a very common thing in the direct lending market and the BDC market. If we heard from shareholders, or covering analysts that the STRS JV, was a reason or a key reason for the share discount, we would certainly take that information in, communicate it to the board, and make decisions based on that.

Again, so far, I’ve gotten no feedback that would indicate that that would account for the discount to the discount to NAV of the trading level.

Speaker 0: Got it. Okay. Your stock is trading roughly almost a 16% dividend yield on the stock price.

Stuart Aronson, Chief Executive Officer, WhiteHorse Finance, Inc.: Yeah.

Speaker 0: On the, on the new NAV, it’s roughly trading a 9% yield, which is okay. Your stock price is, you know, 50%, 60% of book. I mean, there has to be a real big issue, and the only thing that’s left there is most likely the portfolio. I’m just putting it out there. I mean, anyhow, thank you very much.

Stuart Aronson, Chief Executive Officer, WhiteHorse Finance, Inc.: Chris, I would tell you that we strive to be transparent and realistic in our marks. That is why historically you’ve seen some assets that mark down and continue to mark down, but other assets that get marked down and then get marked up, which include names like Telestream, Chase, and I mentioned this quarter, we’re seeing positive news also on PlayMonster. Too early yet to know whether there’ll be a markup. We agree that the discount to the NAV is extreme, and we are trying to take action to improve shareholder value, starting with the share buyback and also with the refinancing of the leverage at a cheaper rate. We are talking to advisors about anything else we can do that would improve value for shareholders.

Speaker 0: No argument on the, on the marks. I think what you guys are doing in terms of repurchases is definitely awesome. I hope you continue the waiver and the repurchases. I think it’s a great use of capital.

Stuart Aronson, Chief Executive Officer, WhiteHorse Finance, Inc.: Thank you.

Speaker 0: My point is, this is an elephant in the room. It’s effectively a second lien position. At a time when financial services companies or the sector is under scrutiny, BDCs, in my humble opinion, tend to be valued more on a discounted value of their NAV, which, you know, leads to haircuts in terms of the asset qual the type of assets in the book. That’s just my $0.02. Thank you for taking my questions.

Stuart Aronson, Chief Executive Officer, WhiteHorse Finance, Inc.: Thank you, Chris.

Beau, Conference Call Operator: Thank you. Just a quick reminder, ladies and gentlemen, star 1 for further questions today. We’ll go next now to Robert Dodd with Raymond James.

Robert Dodd, Equity Analyst, Raymond James: Good afternoon. Thanks for the question. You mentioned an active M&A market, but also a lower than normal pipeline currently. Any further insight into what we should expect in terms of timing or pacing of both repayments and originations for the year? Are there any catalysts down the line that might drive more activity?

Stuart Aronson, Chief Executive Officer, WhiteHorse Finance, Inc.: Yes. Just to be clear, we have had noticeably better activity and volume in Q1 of this year so far than we had in Q1 of last year. As we sit here now in early March, the pipeline that we have looking forward March into April, is not as strong as it was at this time last year. You’ll also remember or I’ll remind folks that at this time last year, there was a fair amount of optimism in terms of M&A activity coming back, and then the tariff issues arose, which threw a real monkey wrench into a lot of people’s plans on the M&A side.

There is once again optimism from the bankers we are speaking to and from the private equity shops we’re speaking to, regarding likely activity, M&A activity in 2026, for the reasons that I highlighted in my call, including lower interest rates and abundant capital with pricing on that capital being at or near all-time lows. As we’ve seen just in the past couple of days, things can certainly happen on the geopolitical side, that were not forecast, and can have an impact on M&A activity. We currently are projecting, based on what we see, improved M&A activity for the year.

We think that that could lead to slightly better pricing in the marketplace, but that slightly better pricing is likely to be offset by rate cuts, whether it’s 1 or 2, which I think is the current conventional wisdom, or whether it’s 3 or 4, driven by leadership of the Fed, likely changing in May.

Robert Dodd, Equity Analyst, Raymond James: Got it. Appreciate the detail. In that pipeline, is there any sort of shift in the kinds of deals that you’re seeing, maybe in terms of sponsor, non-sponsor, incumbent versus new borrowers or LTVs, anything along those lines?

Stuart Aronson, Chief Executive Officer, WhiteHorse Finance, Inc.: We’re seeing fewer deals that are straight repricings because the lower pricing has now been in the marketplace for about a year and a half to 2 years. We are seeing more new M&A deals. In terms of sponsor, non-sponsor, we finished the year with a couple of non-sponsor deals in Q4. The non-sponsor pipeline has been lighter than normal here in the first quarter of 2026. We do think that the non-sponsor market in general is more appealing than the sponsor market right now, largely because in the sponsor market, there are over 200 active direct lenders, but in the non-sponsor market, at least in the mid-market and lower mid-market, we see fewer than 10 shops who actively originate non-sponsor mid-market and lower mid-market deals.

It’s a much less competitive market, and as evidenced by the non-sponsor deals that we did in Q4, we are getting still pricing of 600, 650 or even 700 on non-sponsor deals at modest leverage and modest loan to value.

Robert Dodd, Equity Analyst, Raymond James: Got it. Thanks for the color.

Stuart Aronson, Chief Executive Officer, WhiteHorse Finance, Inc.: No problem.

Beau, Conference Call Operator: Thank you. Ladies and gentlemen, just one final reminder, star one, please, for any further questions today, and we’ll pause for just one moment. Gentlemen, it appears we have no further questions this afternoon, that will bring us to the conclusion of today’s conference call. Ladies and gentlemen, I’d like to thank you all so much for joining the WhiteHorse Finance, Inc. fourth quarter 2025 earnings call. Again, thanks so much for joining us, and we wish you all a great day.