WHFCL

• The Board reset the quarterly base distribution to $0.25 per share, representing an implied 8.8% annualized yield. The adviser voluntarily reduced the incentive fee on net investment income from 20% to 17.5% for the next 2 fiscal quarters. A share buyback program of up to $15 million was approved. - Portfolio activity: Gross deployments of $19.3 million, net repayments of $31.2 million. New originations included 2 deals with an average leverage of ~3.5x EBITDA. Total repayments and sales were driven by realizations in 5 portfolio positions. The debt portfolio was 99.2% first lien, senior secured, with 65% sponsor and 35% nonsponsor ownership. - Realized and unrealized losses: $1.8 million in net realized losses and ~$4.9 million in net unrealized losses. Mark-to-market losses were driven by write-downs in Alvaria and Camarillo Fitness, partially offset by a markup in Motivational Marketing. - Lending market: M&A activity slow, competitive environment; nonsponsor market less competitive with higher pricing premium; focus on nonsponsor market for better risk returns. Pipeline had 6 new mandates and 3 add-ons.

• The Board declared a fourth quarter base distribution of $0.25 per share. - The adviser's incentive fee is reduced to 17.5% for the next 2 fiscal quarters. - A share buyback program up to $15 million is in place. The distribution policy considers supplemental distributions based on earnings excess over base distribution and NAV decline preservation.

In the third quarter of 2025, WhiteHorse Finance reported GAAP net investment income and core NII of $6.1 million or $0.263 per share, compared to $6.6 million or $0.282 per share in Q2. NAV per share at the end of Q3 was $11.41, a ~3.6% decrease from the prior quarter. Gross deployments in Q3 were $19.3 million, offset by elevated repayments and sales of $50.5 million, resulting in net repayments of $31.2 million. The weighted average effective yield on income-producing debt investments decreased to 11.6% from 11.9% in Q2. The STRS JV had an aggregate fair value of $341.5 million and an average effective yield of 10.3% compared to 10.6% in Q2. Net investments decreased by $60.9 million to $568.4 million, with net realized and unrealized losses totaling $6.7 million in Q3.

• Impact of interest rate cuts and continued spread compression on earnings. - Material markdowns on some credits leading to losses. - Uncertain deal flow affecting deployment and potential returns. - Risk of underperformance impacting ability to maintain distributions.

Q: How is the new $0.25 dividend being approached and is it a long-term base level?

A: The Board set the new base dividend after considering interest rates, market spreads, and earnings power, believing it's a reliable long-term level if market projections hold.

Q: On the fee waiver, why the level and time frame, and any longer-term consideration?

A: The Board and manager agreed to waive 2.5% for 2 quarters, with future consideration based on BDC performance.

Q: On BDC and JV capacity, turnaround prospects for stressed assets?

A: Nonaccrual deals likely remain nonaccrual for 12-24 months; some credits like Playmonster are turning around but take time.

Q: Sponsor vs nonsponsor track record in terms of outcomes?

A: Nonsponsor deals have lower leverage and fewer payment defaults historically; most nonaccrual accounts are sponsored deals.

Q: On incentive fee beyond Q1 2026 and share repurchases with slow deal flow?

A: Board may seek further incentive fee reductions if there's underperformance; share repurchases are aggressive due to significant discount to NAV.