Good afternoon. My name is Brittany, and I will be your conference operator today. At this time, I would like to welcome everyone to the WhiteHorse Finance Third Quarter 2023 Earnings Conference Call. Our hosts for today's call are Stuart Aronson, Chief Executive Officer, and Joyson Thomas, Chief Financial Officer. Today's call is being recorded and will be made available for replay beginning at 4:00 P.M. Eastern Time. The replay dial-in number is 402-220-2978. No passcode is required. At this time, all participants have been placed in a listen-only mode, and the floor will be open for questions following the presentation. If you would like to ask a question at that time, please press star one on your telephone keypad. If you wish to remove yourself from the queue, press star two. It is now my pleasure to turn the call over to Jacob Moeller of Rose & Company. Please go ahead. Thank you, operator, and thank you everyone for joining us today to discuss WhiteHorse Finance's Third Quarter 2023 Earnings Results. Before we begin, I would like to remind everyone that certain statements which are not based on historical facts made during this call, 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 Third Quarter 2023 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. Thank you, Jacob, and good afternoon, everybody. Thank you all for joining us today. As you're aware, we issued our earnings this morning prior to market open, and I hope you've had a chance to review our results for the period ending September 30th, 2023, which can also be found on our website. On today's call, I'll begin by addressing our third quarter results and current market conditions. Joyson Thomas, our Chief Financial Officer, will then discuss our performance in greater detail, after which we will open the floor for questions. This afternoon, I'm pleased to report strong performance for the third quarter of 2023. Q3 GAAP net investment income and core net income was $10.8 million, or $0.465 per share, which more than covered our quarterly base dividend of $0.37 per share. This represents an increase of from Q2 GAAP and core NII of $10.6 million or $0.456 per share, and an increase of over 10% year-over-year. As you may have seen in our press release this morning, the board of directors of the BDC approved an increase to our quarterly base dividend from $0.37 per share to $0.385 per share, starting in Q4 this year. The board of directors also approved a decrease in the base management fee rate paid to H.I.G. WhiteHorse Advisers, LLC, the BDC sponsor, from 2% to 1.75%, effective January 1st, 2024. This will have a further positive effect on our financial results and our ability to cover the increased base dividend on a go-forward basis. NAV per share at the end of Q3 was $13.87, representing a 0.9% decrease from the prior quarter. NAV per share was negatively impacted by $5.4 million of net mark-to-market losses in our portfolio. These markdowns are related to company-specific performance and some of our consumer-facing portfolio companies, as well as some specific challenges on certain portfolio companies that are experiencing independent economic conditions. Turning to our portfolio activity, we continue to see steady transaction activity across our markets relevant to Q2, with market prices trending slightly down, which we believe is driving increased deal flows across the market. In Q3, gross capital deployments totaled $20.6 million, with $8.4 million funding on two new originations and the remaining $12.2 million funding add-ons to existing portfolio investments. All of our new originations in Q3 were sponsored deals with an average leverage of approximately 4.3x debt-to-EBITDA. I note that these deals were all first lien loans with spreads of 650 or higher, and an average all-in rate of 11.9%. At the end of Q3, more than 97% of our debt portfolio was first lien and senior unsecured. Our portfolio has a sponsor mix composition of approximately 2/3 sponsor and 1/3 non-sponsor. In Q3, total repayments in sales were $31.7 million, primarily driven by two complete realizations, one partial repayment, and one partial sale. In addition, there were $1.7 million in net repayments made on revolver commitments. As discussed in our last earnings call, we expect repayments to pick up towards the end of the year. We have visibility into a number of likely repayments in Q4 and will seek to redeploy capital into attractive investments. At current market pricing, we expect new assets to likely be at similar pricing to the assets that are running off. During the quarter, the BDC transferred two new deals and one add-on to the Ohio STRS JV, totaling $8.8 million, in exchange for cash of $5.1 million and $3.7 million of in-kind contribution to the JV. I'll discuss activity within the JV in more detail shortly. With repayments and sales outpacing originations during the quarter, the company's net effective leverage was reduced to 1.16 x, down from 1.25 x at the end of Q2. This is below the lower end of our target leverage range, and so long as our portfolio remains heavily, heavily concentrated in first lien loans, which have lower risks than second lien loans, we expect to continue to run the BDC at up to 1.35 x leverage. With that in mind, I'll now step back to bring our entire investment portfolio into focus. After the effects of net repayments and STRS JV transfers, as well as $5.4 million in net mark-to-market changes, $0.3 million in realized losses, and $1.2 million of accretion, the fair value of our investment portfolio was $706.8 million at the end of Q3. This compares to our portfolio fair value of $728.4 million at the end of the previous quarter. The weighted average effective yield on our income-producing debt investments increased to 13.6% as of the end of Q3, from 13.4% at the end of Q2. The variance was primarily driven by an increase in the portfolio's base rate. We continue to utilize the STRS JV successfully. The JV generated investment income to the BDC of approximately $3.9 million in Q3, up from $3.7 million in Q2. As of September 30th, the fair value of the JV's portfolio was $313 million, and at the end of Q3, the JV's portfolio had an average unlevered yield of 12.2%, unchanged from the end of Q2 and up from 8.8% at the end of Q3 of 2022. The year-over-year increase in unlevered yield is primarily due to rising base rates as well. The JV is currently producing an average annual return on equity in the mid-teens to the BDC, so we believe that WhiteHorse's equity investment in the JV provides very attractive returns for shareholders. Transitioning to the BDC's portfolio more broadly, there were some markdowns in the portfolio in Q3, as I mentioned earlier. As we've shared before, we are seeing some pressure on our portfolio and the general economy as well, primarily in the consumer segment. We remain vigilant in monitoring our portfolio companies, and we have not seen demand weakness in other sectors, including general industrial, B2B, healthcare, TMT, or financial services. Additionally, our portfolio includes mostly non-cyclical or light cyclical borrowers, and we hold no direct exposure to oil and gas, auto or restaurants, and very little exposure in the construction sector. The vast majority of our deals have strong covenant protection, and we are finding that in most cases, private equity firms we partnered with are supporting their credits with new cash or contingent equity as needed. The BDC's Q3 mark-to-market declines were driven by our investments in Arcserve Midco, American Crafts, Multinational Marketing and PlayMonster. These declines were partially offset by net mark-to-market increases in various other portfolio investments. As mentioned on our last call, our investment in Crown Brands, a second lien loan, was moved to non-accrual in Q2. Although Crown Brands continues to make interest payments, we expect that the investment will remain on non-accrual until the company achieves its projected performance levels. American Crafts first lien delayed draw term loans were placed on non-accrual status in July, resulting in an impact of approximately $0.013 per share of net NII for the quarter. Our investments in PlayMonster and Arcserve remain on non-accrual as well, and we are in the midst of an active restructuring to try and resolve Arcserve. We do remain optimistic in our ability to effectively navigate and turn around troubled investments. WhiteHorse and H.I.G. Capital have a proven ability to leverage our collective resources and expertise to turn around investments with the objective of minimizing losses and preserving capital. We're actively working with our portfolio companies to improve their performance. As an example, the performance of Starco Holdings, which began to improve during the third quarter as a result of H.I.G.'s efforts in operating the company. Similarly, last quarter, I mentioned our successful exit from our previously troubled investment in Argo, which produced approximately a 1.25x return on the original invested capital. At the end of the third quarter, investments on non-accrual totaled 2.8% of our total portfolio at fair value. Across the portfolio, generally, we see balanced activity in terms of credit performance. Roughly 50% of our portfolio companies are performing better than they were at closing. Approximately 35% are performing below where they were at closing, and the balance is performing more or less in line with closing levels. Turning to the broader lending market, we saw the direct lending markets begin to shift back in the direction of normal market activity during Q2, and this trend continued through Q3, with the markets continuing to treat lower mid-market companies more conservatively than mid-market companies. In the lower mid-market, we're seeing deals being levered at 3.5x-5x, with loan-to-value running up to 50%. We are seeing leverage in mid-market deals of 4x-5.5x, a little bit higher, with loan-to-value a little bit higher as well, typically up to 55%, although many of the deals are at 50% and below LTV. For sponsor deals, pricing on lower mid-market deals is typically within a range of SOFR 600-SOFR 650, and in the middle market, SOFR 575-625. The non-sponsor market hasn't moved much. It is still typically 2.5x-4x on leverage, and under 50% loan to value. Non-sponsor pricing still tends to be SOFR 650 and above, pretty consistently. We think the Fed is succeeding in slowing the economy, and we expect a mild to moderate recession in 2024. We remain conservative in our expectations and factor in a downturn equivalent to 2008 and 2009 in all of our investment decisions. WhiteHorse has consistently and deliberately chosen to deploy capital into deals with more conservative terms, and as such, has built a portfolio that we believe is well equipped to withstand a potential economic downturn. For this reason, the deals that we're working on are mostly non-cyclical or light cyclicals, and we continue to be highly selective about which credits we will enter at the BDC. For deals that have even moderate leverage. Sorry, for deals that have even a moderate degree of cyclicality, we are trying to keep leverage at under 4x. In general, we're seeing a continuing rebound in terms of both deal volume and quality, and our pipeline activity levels remain high. Our three-tier sourcing architecture continues to provide the BDC with differentiated capabilities, and we continue to derive significant advantages from the shared resources and affiliation with HIG, who is a leader in the mid-market and lower mid-market. WhiteHorse has nearly 70 investment professionals located in 11 regional markets across North America. The strength of the origination pipeline enables us to be very conservative in our deal selection. Following repayment activity in Q3, the BDC balance sheet has approximately $15 million of capacity for new assets at our target leverage level range. The JV has approximately $30 million of capacity, supplementing the BDC's existing capacity. With the move in markets, deals that are priced below SOFR 6.50 are targeted for the JV. Those priced at 6.50 and above are largely targeted for the BDC balance sheet. We're actively working on 10 new mandates and conducting due diligence on them. In addition, we have mandates for five add-ons to existing credits. While there can be no assurance that any of these deals will close, a number of these mandates would fit within the BDC or our JV, should we elect to transact. Subsequent to quarter end, we have closed three new originations and one add-on to an existing portfolio company, with several more pending, and three of these investments being transferred to the JV during the fourth quarter. We remain cautiously optimistic for the final quarter of 2023 and into the new year. Despite sustained concerns of economic softening, we believe continued execution of our three-tiered sourcing approach and rigorous underwriting standards leaves WhiteHorse well positioned to navigate any future potential economic challenges, and we hope to continue delivering for our shareholders. With that, I'll turn the call over to Joyson for additional performance details and a review of our portfolio composition. Joyson? Thanks, Stuart, and thank you everyone for joining today's call. During the quarter, we recorded GAAP net investment income and Core NII of $10.8 million, or $0.465 per share. This compares with Q2 GAAP NII and Core NII of $10.6 million, or $0.456 per share, and our previously declared quarterly distribution of $0.37 per share. Q3 fee income decreased quarter-over-quarter to $0.4 million in Q3 from $0.9 million in Q2. Q3 amounts are highlighted by amendment fees generated from investments in Ardurra Holdings, Lab Logistics, and Trimlight, as well as a $0.1 million prepayment fee from PFS. For the quarter, we reported a net increase in net assets resulting from operations of $5.6 million. Our risk ratings during the quarter showed that 78.2% of our portfolio positions carried either a one or two rating, slightly higher than the 76.3% reported in the prior quarter. As a reminder, a one rating indicates that a company has seen its risk of loss reduced relative to initial expectations, and a two rating indicates a company is performing according to initial expectations. In the quarter, we also downgraded our investments in PlayMonster to a five rating, and this is the only investment that carries a five risk rating across the portfolio. Regarding the JV specifically, we continued to grow that investment. As Stuart mentioned earlier, we transferred two new deals and one add-on transaction, totaling $8.8 million, in exchange for cash proceeds of $5.1 million and a $3.7 million in-kind investment in the JV. As of September 30th, 2023, the JV's portfolio held positions in 32 portfolio companies, with an aggregate fair value of $313 million, compared to 32 portfolio companies at an aggregate fair value of $324.5 million as of June 30th, 2023. Subsequent to the end of the quarter, the company transferred three investments to the JV, including two new portfolio companies. The investment in the JV continues to be accreted to the BDC's earnings and is generating a mid-teens return. 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, the changes in asset yields in the underlying portfolio, as well as the overall credit performance of the JV's investment portfolio. Turning to our balance sheet, we had cash resources of approximately $29.8 million at the end of Q3, including $19.2 million in restricted cash and approximately $126.4 million of undrawn capacity available under a revolving credit facility. As of September 30th, 2023, the company's asset coverage ratio for borrowed amounts, as defined by the 1940 Act, was 179.9%, which was above the minimum asset coverage ratio of 150%. Our Q3 net effective debt to equity ratio, after adjusting for cash on hand, was 1.16 x, as compared to 1.25x in the prior quarter. As discussed on our prior earnings call, during Q3, we repaid $30 million of unsecured notes, paying 6% interest that had matured with existing cash on hand, as well as proceeds drawn from our JPM revolving credit facility. Later on in the quarter, we successfully completed a new unsecured notes issuance of $34.5 million in the aggregate, paying 7.875% interest per annum, with the proceeds received from the debt offering used to pay down our revolving credit facility. Relative to the current interest rates on borrowings under our secured bank credit facility, the financing cost of this unsecured notes offering was lower and thus accretive to earnings, while also improving our secured-to-unsecured ratio and further creating a capital structure less dependent on secured bank financing. The new unsecured notes have a contractual maturity date of September 15th, 2028, and may be called in whole or in part at any time after September 15th, 2025, which will afford us flexibility in the future should interest rates change to a declining rate environment. Before I conclude and open up the call to questions, I'd like to again highlight our distributions. This morning, we announced that our board declared an increase to our quarterly base distribution, beginning with the fourth quarter distribution, to $0.385 per share, an increase from $0.37 per share from the prior quarter. This follows the decrease. Excuse me. This follows an increase in our dividend earlier this year from $0.355 per share dividend rate that has been in place since the BDC's IPO, representing an aggregate increase in our dividend of 8.5% since the start of 2023. These actions speak to both the consistent earnings strength of the platform, as well as our resilient deal sourcing capabilities and being able to create a well-balanced portfolio, generating consistent current income. As was announced on our Q1 2023 earnings call, our board also implemented a formulaic supplemental quarterly distribution program. For the third quarter, the board did not declare a supplemental distribution, which is consistent with our formulaic supplemental distribution framework. We believe this framework allows us to maximize distributions to our shareholders while preserving the stability of our NAV, a factor that we believe to be an important driver of shareholder economics over time. The upcoming distribution, the 45th consecutive quarterly distribution paid since our IPO in December 2012, with all those distributions at or above a rate of $0.355 per share per quarter, will be payable on January 3rd, 2024, to stockholders of record as of December 20th, 2023. As we said previously, we will continue to evaluate our quarterly distribution, both in the 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 over to the operator for your questions. Operator? Thank you. At this time, if you would like to ask a question, please press the star and one on your touchtone phone. You may remove yourself from the queue at any time by pressing star and two. Once again, that is star and one if you would like to ask a question, and we will take our first question from Mickey Schleien with Ladenburg. Your line is open. Yes, good afternoon, everyone. Stuart, in the upper middle market, we're seeing somewhat of a dislocation in terms of supply and demand, whereby, you know, the CLO market is bumpy, you know, closed at times, but there's a lot of private debt capital available. But M&A volumes are down and, due to, you know, interest rates as high as they are and economic uncertainty. So that's causing spreads to decline somewhat. I'm curious whether that's trickling down into, you know, the middle market and lower middle market, where you tend to operate. Yeah, Mickey, you're exactly right, and spreads have moderated a bit. I would say over the course of the year, we've seen—you know, compared to the end of 2022, we've seen spreads come down 50-75 basis points. That said, we're doing senior secured deals at the top of the capital structure, usually with covenants, and we're generally commanding yields, including the amortization of the closing fee of about 12% or even 13%. And on a historical basis, being able to do senior debt at 12%-13% is extremely, extremely attractive. Which is, of course, one of the reasons why what you said is true, that the M&A activity has slowed down because senior debt is so expensive. But yeah, we have seen spreads moderate a bit, but we still see this market environment as being very attractive because most lenders in the marketplace are concerned around economic softening next year. And as a result, the underwriting standards being applied in the market are much more appropriate and balanced than they were in a vintage like 2021. So overall, we see very attractive risk return in this market. And as I mentioned earlier, volumes have picked up very significantly for us in Q4, and we have 15 or more deals that we're actively working on with mandates, trying to get them closed. Stuart, in terms of those volumes, and you may have mentioned this in the prepared remarks, but is that being stimulated by sort of more acceptance of the current rate environment, you know, the higher for longer regime, and at least the understanding amongst investors that you know, there's less uncertainty as to where rates may go over the medium term, or is there something else that's driving that increased volume? We think the increased volume is due to a combination of factors. Number one, the markets are demonstrating strong appetite for low cyclicality companies, so enterprise valuations on those companies have been very strong. We've seen companies selling for 12x-17 x if they're non-cyclical. Now that that's going on, there are more people willing to come to market to sell. There has also been an acceptance among people who own cyclical companies, that those companies are probably worth one-two turns less than they were one and a half-two years ago. That acceptance by sellers, that valuations on cyclical companies have come down, is helping more transactions actually occur. We're seeing the cyclicals trade, Mickey, at 6.5x-8x. We're seeing light cyclicals trade, typically 9x-11 x, and we're seeing non-cyclicals trade, typically 12x-17x. I appreciate that, Stuart. That's really helpful. Those are all my questions this afternoon. Thanks for your time. Thank you, Mickey. Bye-bye. Thank you. We'll take our next question from Melissa Wedel with JP Morgan. Your line is open. Good afternoon. Thanks for taking my questions today. Wanted to dig into the decision to lower the base management fee from 2% to 1.75%. Certainly something I expect shareholders will applaud. I'm curious how your team got to 1.75%. Did you consider other levels? Can you just walk us through that? Thank you. Sure. The board of directors did an analysis of the BDC market in general, but also an analysis of comparable BDCs who were similar in size to us, and also similar in mission of what they do. And we concluded that 1.75% was the appropriate, or the board decided that the appropriate market level was 1.75%, and HIG agreed to continue to manage and run the company for that lower fee. Okay. Thank you. Thank you. We'll take our next question from Robert Dodd with Raymond James. Your line is open. Hi, guys. Hi, Stuart. Hi, Robert. Sorry. One of the questions... In your prepared remarks, you talked, you expect a mild to potentially moderate recession in 2024, which, you know, there's a potential wide range of things that could happen in 2024. One is no recession or maybe moderate. How much does that view affect your concerns about, for example, PlayMonster, American Crafts, some of the more stressed credits? So the more stressed the credit is before a recession, the more trouble it's likely to have in one. So would you say if there is no recession, would that have a material positive change in your view on outlook for those stressed credits, or can you give us any indications there? American Crafts and PlayMonster are both already suffering from a softness in consumer demand, that has been going on, for a while now. We are working with both of those companies to, cut costs and, optimize value, and, if there's a stronger economy next year, then we're currently envisioning, that could, be positive for both of those credits, which are driven or, or impacted directly by consumer appetite. But we do think we have those assets marked as of the end of the quarter, at levels that were reflective of current market conditions, and as I indicated, those current market conditions are pretty soft. Got it. I appreciate that. And then on the 1.75, that's more than the over one turn leverage, the 1.25. That's... There's not a lot of comps that are at 1.25, right? The 1.75, I could see. The 1.25, I mean, those that have a lower management fee over a turn leverage tend to be one. So can you give us any thoughts on why the 0.25 there? I mean, it's marginal, like, because obviously only applies to a very small piece of the capital base in effect. But any thoughts on why that relative to most in the industry are one, if they have anything on that front? Yeah. All I can tell you is that in discussions with the board, the reduction on the core management fee from 2% to 1.75% was considered to be the main focus, and the board felt comfortable that the 1.25% on assets over 1x leverage was a reasonable rate, given what we do and the labor content that goes into the transactions that we originate, Mickey. Not Mickey, I'm sorry, Robert. No worries. Last one from me. On the non-sponsor piece of the portfolio, which is down to basically a third now, I think, if I'm finding the right line of participation. Would you expect over the next 12-24 months that to rise, or is that going to continue, relatively speaking, to decline as a share of the portfolio, on a forward basis here? Our originations pipeline has been and continues to be about 1/3 non-sponsor and 2/3 sponsor. So I would expect that ratio in the portfolio to remain fairly stable based on what we're seeing right now. Got it. Thank you. No problem. Thank you. We have reached our allotted time for questions. I will turn the program back over to our presenters for any additional or closing remarks. I appreciate everybody's time today. As always, if there are more questions that we can answer, we're happy to answer them either offline, or get indications prior to the calls of the types of things that shareholders or analysts would like to hear from us. We wanna be as transparent as possible, and we'll continue to do that, going forward. So thank you, everyone, for your time. Thank you. This does conclude today's program. Thank you for your participation. You may disconnect at any time, and have a wonderful day.