WhiteHorse Finance, Inc.

Previous wording

We generate revenue in the form of interest payable on the debt securities that we hold and capital gains and distributions, if any, on the portfolio company investments that we originate or acquire. Our debt investments, whether in the form of senior secured loans or mezzanine loans, typically have terms of three to six years and bear interest at a fixed or floating rate based on a spread over SOFR or an equivalent index rate. Interest on debt securities is generally payable monthly or quarterly, with the amortization of principal generally being deferred for several years from the date of the initial investment. In some cases, we may also defer payments of interest for the first few years after our investment. The principal amount of the debt securities and any accrued but unpaid interest generally becomes due at the maturity date. In addition, we generate revenue in the form of commitment, origination, structuring or diligence fees, fees for providing managerial assistance and possibly consulting fees. We capitalize loan origination fees, original issue discount and market discount, and we then amortize such amounts as interest income. Upon the prepayment of a loan or debt security, we record any unamortized loan origination fees as interest income. We record prepayment premiums on loans and debt securities as fee income when earned. Dividend income is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies.

Current wording

We generate revenue in the form of interest payable on the debt securities that we hold and capital gains and distributions, if any, on the portfolio company investments that we originate or acquire. Our debt investments, whether in the form of senior secured loans or mezzanine loans, typically have terms of three to six years and bear interest at a fixed or floating rate based on a spread over SOFR or an equivalent index rate. Interest on debt securities is generally payable monthly or quarterly, with the amortization of principal generally being deferred for several years from the date of the initial investment. In some cases, we may also defer payments of interest for the first few years after our investment. The principal amount of the debt securities and any accrued but unpaid interest generally becomes due at the maturity date. In addition, we generate revenue in the form of commitment, origination, structuring or diligence fees, fees for providing managerial assistance and possibly consulting fees. We capitalize loan origination fees, original issue discount and market discount, and we then amortize such amounts as interest income. Upon the prepayment of a loan or debt security, we record any unamortized loan origination fees as interest income. We record prepayment premiums on

Previous wording

For the period January 1, 2025 through March 7, 2025, we contributed three additional assets to the STRS JV, which included one issuer of senior secured debt facilities held as of December 31, 2024.

Current wording

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

Previous wording

Net investment income for the years ended December 31, 2024 and 2023 totaled $37.2 million and $42.7 million, respectively. Net investment income decreased by $5.5 million for the year ended December 31, 2024 from the year ended December 31, 2023, as described below under “Investment Income” and “Operating Expenses”.

Current wording

Net investment income for the years ended December 31, 2025 and 2024 totaled $26.1 million and $37.2 million, respectively. Net investment income decreased by $11.1 million for the year ended December 31, 2025 from the year ended December 31, 2024, as described below under “Investment Income” and “Operating Expenses”.

Previous wording

Interest income other than PIK income, decreased $12.0 million for the year ended December 31, 2024 from the year ended December 31, 2023, primarily attributable to lower yields, investments placed on non-accrual status and lower portfolio size. For the year ended December 31, 2024, the weighted average size and weighted average yield of the debt portfolio, excluding STRS JV, was $565.8 million and 10.4%, respectively. For the year ended December 31, 2023, the weighted average size and weighted average yield of the debt portfolio, excluding STRS JV, was $612.6 million and 11.4%, respectively.

Current wording

Interest income other than PIK income, decreased $12.7 million for the year ended December 31, 2025 from the year ended December 31, 2024, primarily attributable to lower yields, investments placed on non-accrual status and lower portfolio size. For the year ended December 31, 2025, the weighted average size and weighted average yield of the debt portfolio, excluding STRS JV, was $517.5 million and 9.2%, respectively. For the year ended December 31, 2024, the weighted average size and weighted average yield of the debt portfolio, excluding STRS JV, was $584.5 million and 10.4%, respectively.

Previous wording

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.

Current wording

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.

Previous wording

Fee and dividend income decreased by $1.1 million for the year ended December 31, 2024 from the year ended December 31, 2023, due to lower non-recurring fee income. We expect to generate some level of non-recurring fee income during most quarters from prepayments, amendments and other sources.

Current wording

Fee and dividend income, excluding STRS JV, decreased by $0.1 million for the year ended December 31, 2025 from the year ended December 31, 2024. We expect to generate some level of non-recurring fee income during most

Previous wording

Interest expense decreased by $2.0 million for the year ended December 31, 2024 from the year ended December 31, 2023, primarily due to lower weighted average borrowing base. 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%.

Current wording

Interest expense decreased by $4.8 million for the year ended December 31, 2025 from the year ended December 31, 2024, primarily due to lower weighted average borrowing 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%.

Previous wording

Base management fees decreased by $2.6 million for the year ended December 31, 2024 from the year ended December 31, 2023, primarily due to the base management fee rate reduction to 1.75% from 2.00% effective January 1, 2024.

Current wording

Base management fees decreased by $1.0 million for the year ended December 31, 2025 from the year ended December 31, 2024, primarily due to a lower management fee base of $52.4 million.

Previous wording

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

Current wording

Performance-based incentive fees decreased by $3.0 million for the year ended December 31, 2025 from the year ended December 31, 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, 2025 and 2024, there were no capital gains incentive fee expense incurred.

Previous wording

General and administrative expenses increased $0.8 million for the year ended December 31, 2024 from the year ended December 31, 2023, primarily due to higher legal and deal related expenses.

Current wording

General and administrative expenses increased $0.3 million for the year ended December 31, 2025 from the year ended December 31, 2024, primarily due to audit and tax fees.

Previous wording

Depending on the level of taxable income earned in a tax year, we may choose to retain taxable income in excess of current year distributions into the next tax year in an amount less than what would trigger payments of U.S. federal income tax under Subchapter M of the Code. We may then be required to incur a 4% excise tax on such income. To the extent that we determine that our estimated current year annual taxable income may exceed estimated current year distributions, we accrue excise tax, if any, on estimated excess taxable income as taxable income is earned.

Current wording

Depending on the level of taxable income earned in a tax year, we may choose to retain taxable income in excess of current year distributions into the next tax year in an amount less than what would trigger payments of U.S. federal income tax under Subchapter M of the Code. We may then be required to incur a 4% excise tax on such income. To the

Previous wording

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

Current wording

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

Previous wording

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 December 31, 2024 and December 31, 2023, we had commitments to fund approximately $26.4 million and $21.4 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.

Current wording

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 December 31, 2025 and December 31, 2024, we had commitments to fund approximately $41.0 million and $26.4 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.

Previous wording

Our operating activities provided cash and cash equivalents of $90.4 million during the year ended December 31, 2023, primarily from the net proceeds received from realizations and repayments on our investments, partially offset by acquisition of investments and cash used from the net change in working capital. Our financing activities used cash and cash equivalents of $92.1 million during the year ended December 31, 2023, primarily due to repayments on the 6.000% 2023 Notes, Credit Facility and the payment of distributions to stockholders.

Current wording

Our operating activities provided cash and cash equivalents of $77.3 million during the year ended December 31, 2025, primarily from the net proceeds received from realizations and repayments on our investments, partially offset by acquisition of investments and cash used from the net change in working capital. Our financing activities used cash and cash equivalents of $75.4 million during the year ended December 31, 2025, primarily due to repayments on the Credit Facility, 5.375% 2025 Notes, purchases of common stock, and the payment of distributions to stockholders.

Previous wording

As of December 31, 2023, we had cash and cash equivalent resources of $24.5 million, including $13.7 million of restricted cash. As of December 31, 2023, we had approximately $138.5 million undrawn and available to be drawn under the Credit Facility based on the collateral and portfolio quality requirements stipulated in the related credit agreement.

Current wording

As of December 31, 2025, we had cash and cash equivalent resources of $29.7 million, including $22.7 million of restricted cash. As of December 31, 2025, we had approximately $100.0 million undrawn and available to be drawn under the Credit Facility based on the collateral and portfolio quality requirements stipulated in the related credit agreement. As of December 31, 2025 due to borrowing base limitations, approximately $43.8 million was available to be drawn under the Credit Facility based on these requirements.

Previous wording

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 December 31, 2024, STRS JV had total assets of $309.1 million. As of December 31, 2023, STRS JV had total assets of $332.2 million.

Current wording

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 December 31, 2025, STRS JV had total assets of $335.9 million. As of December 31, 2024, STRS JV had total assets of $309.1 million.

Previous wording

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.

Current wording

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

Previous wording

As of both December 31, 2024 and December 31, 2023, 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, 2024 and December 31, 2023, 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.

Current wording

As of both December 31, 2025 and December 31, 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, 2025 and December 31, 2024, our investment in STRS JV consisted of equity contributions and subordinated note advance commitments of $23.0 million and $92.0 million, of which $1.9 million and $7.6 million were unfunded, respectively.

Previous wording

STRS JV is managed by a four-person board of managers, two of whom are selected by us and two of whom are selected by STRS Ohio. All material decisions with respect to STRS JV, including those involving its investment portfolio, require unanimous approval of a quorum of the board of managers. Quorum is defined as (i) the presence of two members of the board of managers; provided that at least one individual is present that was elected, designated or

Current wording

STRS JV is managed by a four-person board of managers, two of whom are selected by us and two of whom are selected by STRS Ohio. All material decisions with respect to STRS JV, including those involving its investment portfolio, require unanimous approval of a quorum of the board of managers. Quorum is defined as (i) the presence of two members of the board of managers; provided that at least one individual is present that was elected, designated or appointed by each member; (ii) the presence of three members of the board of managers; provided that the individual that was elected, designated or appointed by the member with only one individual present is entitled to cast two votes on each matter; or (iii) the presence of four members of the board of managers; provided that two individuals are present that were elected, designated or appointed by each member.

Previous wording

As of December 31, 2024, the Credit Facility provided for borrowings in an aggregate principal amount up to $335.0 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. As of December 31, 2024, the required minimum outstanding borrowings under the Credit Facility were $234.5 million.

Current wording

As of December 31, 2025, the Credit Facility provided for borrowings in an aggregate principal amount up to $100.0 million. As of December 31, 2025, the required minimum outstanding borrowings under the Credit Facility were $50.0 million.

Previous wording

Advances under the Credit Facility are based on SOFR for USD denominated borrowings plus an annual spread of 2.50%. The Credit Facility bears interest at EurIBOR, for EUR denominated borrowings, CDOR for CAD denominated borrowings, SONIA, for GBP denominated borrowings, plus a spread of 2.35% on outstanding borrowings. Interest is payable quarterly in arrears. WhiteHorse Credit is required to pay a non-usage fee which accrues at 0.75% 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 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 be due and payable, on November 22, 2025.

Current wording

Prior to the Credit Facility amendment on January 17, 2025, advances under the Credit Facility were based on SOFR for USD denominated borrowings plus an annual spread of 2.50%. The Credit Facility bore interest at EurIBOR for EUR denominated borrowings, CORRA for CAD denominated borrowings and SONIA for GBP denominated borrowings, plus a spread of 2.35% on outstanding borrowings. Interest is payable quarterly in arrears. WhiteHorse Credit was required to pay a non-usage fee which accrues at 0.75% 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 paid an upfront fee and incurred certain other customary costs and expenses in connection with obtaining the Credit Facility.

Previous wording

As of December 31, 2023, there was $196.5 million in outstanding borrowings under the Credit Facility and, based on collateral and portfolio requirements stipulated in the Credit Facility agreement, approximately $138.5 million was available to be drawn on such date. The Credit Facility is secured by all of the assets of WhiteHorse Credit, which included loans with a fair value of $572.1 million as of December 31, 2023.

Current wording

As of December 31, 2025, there was no outstanding borrowings under the Credit Facility and, based on collateral and portfolio requirements stipulated in the Credit Facility agreement, approximately $100.0 million was available to be drawn on such date. The Credit Facility is secured by all of the assets of WhiteHorse Credit, which included loans with a fair value of $139.5 million as of December 31, 2025. As of December 31, 2025, due to borrowing base limitations, approximately $43.8 million was available to be drawn under the Credit Facility based on these requirements.

Previous wording

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.

Current wording

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.

Previous wording

As of December 31, 2023, our investment portfolio consisted primarily of senior secured loans across 116 positions in 72 companies with an aggregate fair value of $696.2 million. As of December 31, 2023, 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 fixed-rate loan investments representing 0.9% based on fair value. As of December 31, 2023, our portfolio had an average investment size of $5.2 million based on fair value and average debt investment size of $6.7 million, with investment sizes ranging from zero to $21.7 million and a weighted average effective yield of 12.4% (and a weighted average effective yield on income-producing debt investments of 13.7%).

Current wording

As of December 31, 2025, our investment portfolio consisted primarily of senior secured loans across 129 positions in 68 companies with an aggregate fair value of $578.6 million. As of December 31, 2025, 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 fixed-rate loan investments representing 1.3% based on fair value. As of December 31, 2025, our portfolio had an average investment size of $3.7 million based on fair value and average debt investment size of $5.2 million, with investment sizes ranging from zero to $20.0 million and a weighted average effective yield of 9.1% (and a weighted average effective yield on income-producing debt investments of 11.0%).

Previous wording

For the year ended December 31, 2023, we invested $145.0 million in new and existing portfolio companies, offset by repayments and sales of $197.6 million. Proceeds from sales totaled $79.5 million while repayments included $11.3 million of scheduled repayments and $106.8 million of unscheduled repayments.

Current wording

For the year ended December 31, 2025, we invested $191.7 million in new and existing portfolio companies, offset by repayments and sales of $249.7 million. Proceeds from sales totaled $87.5 million while repayments included $24.9 million of scheduled repayments and $137.3 million of unscheduled repayments.

Previous wording

During the year ended December 31, 2024 we declared distributions of $1.785 per share for total distributions of $41.5 million. During the year ended December 31, 2023 we declared distributions of $1.550 per share for total distributions of $36.0 million. We monitor available net investment income to determine if a return of capital for taxation purposes may occur for the fiscal year.

Current wording

During the year ended December 31, 2025 we declared distributions of $1.44 per share for total distributions of $36.6 million. During the year ended December 31, 2024 we declared distributions of $1.785 per share for total distributions of $41.5 million. We monitor available net investment income to determine if a return of capital for taxation purposes may occur for the fiscal year.

Previous wording

liabilities, revenues and expenses. Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ. We have identified the following as critical accounting policies and estimates.

Current wording

The preparation of our financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ. We have identified the following as critical accounting policies and estimates.

Previous wording

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 is treated as our indebtedness.

Current wording

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 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 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.

Previous wording

We value our investments in accordance with ASC Topic 820 -Fair Value Measurements and Disclosures. ASC Topic 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about assets and liabilities measured at fair value. ASC Topic 820’s definition of fair value focuses on exit price in the principal, or most advantageous, market and prioritizes the use of market-based inputs over entity-specific inputs within a measurement of fair value.

Current wording

We value our investments in accordance with ASC Topic 820 -Fair Value Measurements and Disclosures. ASC Topic 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about assets and liabilities measured at fair value. ASC Topic 820’s definition of fair value focuses on exit price in the principal, or most

Previous wording

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.

Current wording

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.

Previous wording

Fair value for each investment is derived using a combination of valuation methodologies that, in the judgment of the investment committee of the investment adviser are most relevant to such investment, including being based on one or more of the following: (i) market prices obtained from market makers for which the investment committee has deemed there to be enough breadth (number of quotes) and depth (firm bids) to be indicative of fair value, (ii) the price paid or realized in a completed transaction or binding offer received in an arm’s-length transaction, (iii) a discounted cash flow analysis, (iv) the guideline public company method, (v) the similar transaction method or (vi) the option pricing method.

Current wording

Fair value for each investment is derived using a combination of valuation methodologies that, in the judgment of the investment committee of the investment adviser are most relevant to such investment, including being based on one or more of the following: (i) market prices obtained from market makers for which the investment committee has deemed there to be enough breadth (number of quotes) and depth (firm bids) to be indicative of fair value, (ii) the price