Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

November 7, 2023

OXFORD SQUARE CAPITAL CORP.

(Exact name of registrant as specified in its charter)

Maryland		814-00638		20-0188736
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

8 Sound Shore Drive, Suite 255

Greenwich, CT 06830

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (203) 983-5275

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	OXSQ	NASDAQ Global Select Market LLC
6.50% Notes due 2024	OXSQL	NASDAQ Global Select Market LLC
6.25% Notes due 2026	OXSQZ	NASDAQ Global Select Market LLC
5.50% Notes due 2028	OXSQG	NASDAQ Global Select Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition

On November 7, 2023, Oxford Square Capital Corp. (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2023. The text of the press release is included as Exhibit 99.1 to this Form 8-K.

The information set forth under this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information set forth under this Item 2.02, including Exhibit 99.1, shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, unless it is specifically incorporated by reference therein.

Item 7.01 Regulation FD Disclosure

On November 7, 2023, the Company issued a press release, included herewith as Exhibit 99.1, announcing the declaration of distributions for the months ending January 31, 2024, February 29, 2024, and March 31, 2024. Additionally, on November 7, 2023, the Company made available on its website, www.oxfordsquarecapital.com, supplemental investor information with respect to the aforementioned earnings press release.

The information disclosed under this Item 7.01, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information provided herein shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d)

Exhibits.

Exhibit No.		Description
99.1		Press release dated November 7, 2023
104		Cover Page Interactive Data File (embedded within the inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: November 8, 2023	OXFORD SQUARE CAPITAL CORP.

	By:	/s/ Saul B. Rosenthal
		Saul B. Rosenthal
		President

Exhibit 99.1

Oxford Square Capital Corp. Announces Net Asset Value and Selected Financial Results for the Quarter Ended September 30, 2023 and Declaration of Distributions on Common Stock for the Months Ending January 31, February 29, and March 31, 2024.

GREENWICH, CT – 11/7/2023 –Oxford Square Capital Corp. (NasdaqGS: OXSQ) (NasdaqGS: OXSQL) (NasdaqGS: OXSQZ) (NasdaqGS: OXSQG) (the “Company,” “we,” “us” or “our”) announced today its financial results and related information for the quarter ended September 30, 2023.

On November 2, 2023, our Board of Directors declared the following distributions on our common stock:

Month Ending	Record Date	Payment Date	Amount Per Share
January 31, 2024	January 17, 2024	January 31, 2024	$0.035
February 29, 2024	February 15, 2024	February 29, 2024	$0.035
March 31, 2024	March 15, 2024	March 29, 2024	$0.035

Net asset value (“NAV”) per share as of September 30, 2023 stood at $2.78, compared with a NAV per share on June 30, 2023 of $2.88.

Net investment income (“NII”) was approximately $6.4 million, or $0.11 per share, for the quarter ended September 30, 2023, compared with approximately $6.7 million, or $0.13 per share, for the quarter ended June 30, 2023.

Total investment income for the quarter ended September 30, 2023 amounted to approximately $13.0 million, compared with approximately $13.5 million for the quarter ended June 30, 2023.

For the quarter ended September 30, 2023 we recorded investment income from our portfolio as follows:

$8.5 million from our debt investments;

$4.1 million from our CLO equity investments; and

$0.5 million from other income.

Our total expenses for the quarter ended September 30, 2023 were approximately $6.6 million, compared with total expenses of approximately $6.8 million for the quarter ended June 30, 2023.

As of September 30, 2023, the following metrics applied (note that none of these metrics represented a total return to shareholders):

The weighted average yield of our debt investments was 13.1% at current cost, compared with 12.8% as of June 30, 2023;

The weighted average effective yield of our CLO equity investments at current cost was 9.7%, compared with 9.2% as of June 30, 2023; and

The weighted average cash distribution yield of our cash income producing CLO equity investments at current cost was 20.1%, compared with 18.4% as of June 30, 2023.

For the quarter ended September 30, 2023, we recorded a net increase in net assets resulting from operations of approximately $6.7 million, consisting of:

NII of approximately $6.4 million;

Net realized losses of approximately $13.6 million; and

Net unrealized appreciation of approximately $13.9 million.

During the third quarter of 2023, we did not make any new investments and received approximately $16.1 million from sales and repayments of investments.

Our weighted average credit rating was 2.2 based on total fair value and 2.5 based on total principal amount as of September 30, 2023, compared with a weighted average credit rating of 2.2 based on total fair value and 2.5 based on total principal amount as of June 30, 2023.

As of September 30, 2023, we had three debt investments (in one portfolio company) on non-accrual status, with a combined fair value of approximately $490,000. Also, as of September 30, 2023, our preferred equity investments in one of our portfolio companies were on non-accrual status, which had an aggregate fair value of approximately $7.7 million.

For the quarter ended September 30, 2023, we issued a total of approximately 1.4 million shares of common stock pursuant to an “at-the-market” offering. After deducting the sales agent’s commissions and offering expenses, this resulted in net proceeds of approximately $4.4 million. The common stock issuance resulted in net accretion to shareholders of approximately $0.01 per share of NAV for the quarter. As of September 30, 2023, we had approximately 58.0 million shares of common stock outstanding.

We will hold a conference call to discuss third quarter results today, Tuesday, November 7^th, 2023 at 9:00 AM ET. The toll-free dial-in number is 1-833-470-1428, access code number 495860. There will be a recording available for 30 days. If you are interested in hearing the recording, please dial 1-866-813-9403. The replay pass-code number is 176763.

A presentation containing further detail regarding our quarterly results of operations has been posted under the Investor Relations section of our website at www.oxfordsquarecapital.com.

OXFORD SQUARE CAPITAL CORP.

STATEMENTS OF ASSETS AND LIABILITIES

	September 30, 2023			December 31, 2022
	(unaudited)
ASSETS
Non-affiliated/non-control investments (cost: $443,889,440 and $495,000,997, respectively)	$	277,807,167		$	310,347,097
Affiliated investments (cost: $16,836,822 and $16,836,822, respectively)		7,709,623			4,349,818
Cash and cash equivalents		12,410,909			9,019,164
Interest and distributions receivable		4,036,483			3,492,716
Other assets		1,031,723			785,640
Total assets	$	302,995,905		$	327,994,435
LIABILITIES
Notes payable – 6.50% Unsecured Notes, net of deferred issuance costs of $36,343 and $405,657, respectively	$	14,333,882		$	63,964,568
Notes payable – 6.25% Unsecured Notes, net of deferred issuance costs of $602,377 and $776,766, respectively		44,188,373			44,013,984
Notes payable – 5.50% Unsecured Notes, net of deferred issuance costs of $1,865,397 and $2,153,762 respectively		78,634,603			78,346,238
Base Fee and Net Investment Income Incentive Fee payable to affiliate		2,360,018			1,323,573
Accrued interest payable		1,207,082			1,216,109
Accrued expenses		1,376,886			458,001
Total liabilities		142,100,844			189,322,473

NET ASSETS
Common stock, $0.01 par value, 100,000,000 shares authorized; 57,958,446 and 49,844,796 shares issued and outstanding, respectively		579,584			498,447
Capital in excess of par value		455,703,275			434,737,950
Total distributable earnings/(accumulated losses)		(295,387,798	)		(296,564,435	)
Total net assets		160,895,061			138,671,962
Total liabilities and net assets	$	302,995,905		$	327,994,435
Net asset value per common share	$	2.78		$	2.78

OXFORD SQUARE CAPITAL CORP.

STATEMENTS OF OPERATIONS
(unaudited)

	Three Months Ended September 30, 2023			Three Months Ended September 30, 2022			Nine Months Ended September 30, 2023			Nine Months Ended September 30, 2022
INVESTMENT INCOME
From non-affiliated/non-control investments:
Interest income – debt investments	$	8,453,240		$	6,805,339		$	25,546,580		$	17,730,026
Income from securitization vehicles and investments		4,106,071			4,402,463			12,814,866			12,906,127
Other income		486,043			190,330			1,138,686			567,400
Total investment income from non-affiliated/non-control investments		13,045,354			11,398,132			39,500,132			31,203,553
Total investment income		13,045,354			11,398,132			39,500,132			31,203,553
EXPENSES
Interest expense		2,530,321			3,090,535			8,703,638			9,263,853
Base Fee		1,183,941			1,408,729			3,601,275			4,580,413
Professional fees		478,833			417,390			1,096,641			1,072,843
Compensation expense		205,348			234,517			662,472			689,350
General and administrative		458,328			438,943			1,261,650			1,195,174
Excise tax		573,686			252,172			873,686			252,172
Total expenses before incentive fees		5,430,457			5,842,286			16,199,362			17,053,805
Net Investment Income Incentive Fees		1,176,079			—			3,705,387			—
Total expenses		6,606,536			5,842,286			19,904,749			17,053,805
Net investment income		6,438,818			5,555,846			19,595,383			14,149,748
Net change in unrealized appreciation/(depreciation) on investments:
Non-Affiliate/non-control investments		14,613,632			(17,373,881	)		18,571,627			(77,909,718	)
Affiliated investments		(712,830	)		615,332			3,359,805			1,418,432
Total net change in unrealized appreciation/(depreciation) on investments		13,900,802			(16,758,549	)		21,931,432			(76,491,286	)
Net realized (losses)/gains:
Non-affiliated/non-control investments		(13,480,114	)		55,787			(16,811,422	)		(437,978	)
Extinguishment of debt		(166,670	)		—			(166,670	)		—
Total net realized (losses)/gains		(13,646,784	)		55,787			(16,978,092	)		(437,978	)
Net increase/(decrease) in net assets resulting from operations	$	6,692,836		$	(11,146,916	)	$	24,548,723		$	(62,779,516	)
Net increase in net assets resulting from net investment income per common share (Basic and Diluted):	$	0.11		$	0.11		$	0.37		$	0.28
Net increase/(decrease) in net assets resulting from operations per common share (Basic and Diluted):	$	0.12		$	(0.22	)	$	0.47		$	(1.26	)
Weighted average shares of common stock outstanding (Basic and Diluted):		56,764,866			49,773,782			52,413,834			49,737,216
Distributions per share	$	0.225		$	0.105		$	0.435		$	0.315

FINANCIAL HIGHLIGHTS – (unaudited)

	Three Months Ended September 30, 2023			Three Months Ended September 30, 2022			Nine Months Ended September 30, 2023			Nine Months Ended September 30, 2022
Per Share Data
Net asset value at beginning of period	$	2.88		$	3.67		$	2.78		$	4.92
Net investment income⁽¹⁾		0.11			0.11			0.37			0.28
Net realized and unrealized gains/(losses)⁽²⁾		0.01			(0.33	)		0.10			(1.54	)
Net increase/(decrease) in net asset value from operations		0.12			(0.22	)		0.47			(1.26	)
Distributions per share from net investment income		(0.23	)		(0.15	)		(0.44	)		(0.32	)
Tax return of capital distributions⁽³⁾		—			0.04			—			—
Total distributions		(0.23	)		(0.11	)		(0.44	)		(0.32	)
Effect of shares issued, gross		0.01			—			(0.03	)		—
Net asset value at end of period	$	2.78		$	3.34		$	2.78		$	3.34
Per share market value at beginning of period	$	2.65		$	3.64		$	3.12		$	4.08
Per share market value at end of period	$	3.01		$	3.01		$	3.01		$	3.01
Total return based on Market Value⁽⁴⁾		22.17	%		(14.79	)%		10.99	%		(19.90	)%
Total return based on Net Asset Value⁽⁵⁾		4.34	%		(6.13	)%		15.65	%		(25.71	)%
Shares outstanding at end of period		57,958,446			49,800,274			57,958,446			49,800,274

Ratios/Supplemental Data⁽⁸⁾
Net assets at end of period (000’s)	$	160,895		$	166,548		$	160,895		$	166,548
Average net assets (000’s)	$	160,397		$	174,670		$	148,132		$	206,324
Ratio of expenses to average net assets⁽⁶⁾		15.40	%		12.95	%		17.72	%		10.98	%
Ratio of net investment income to average net assets⁽⁶⁾		17.13	%		13.16	%		17.83	%		9.18	%
Portfolio turnover rate⁽⁷⁾		—	%		3.53	%		2.64	%		16.42	%

(1)

Represents per share net investment income for the period, based upon weighted average shares outstanding.

(2)

Net realized and unrealized gains/(losses) include rounding adjustments to reconcile change in net asset value per share.

(3)

Management monitors available taxable earnings, including net investment income and realized capital gains, to determine if a tax return of capital may occur for the year. To the extent the Company’s taxable earnings fall below the total amount of the Company’s distributions for that fiscal year, a portion of those distributions may be deemed a tax return of capital to the Company’s stockholders. The ultimate tax character of the Company’s earnings cannot be determined until tax returns are prepared after the end of the fiscal year. The amounts and sources of distributions reported are only estimates (based on an average of the reported tax character historically) and are not being provided for U.S. tax reporting purposes.

(4)

Total return based on market value equals the increase or decrease of ending market value over beginning market value, plus distributions, divided by the beginning market value, assuming distribution reinvestment prices obtained under the Company’s distribution reinvestment plan, excluding any discounts. Total return is not annualized.

(5)

Total return based on net asset value equals the increase or decrease of ending net asset value over beginning net asset value, plus distributions, divided by the beginning net asset value. Total return is not annualized.

(6)

Ratios for the three and nine months ended September 30, 2023 are annualized and include non-recurring expenses, including excise tax of 0.36% and 0.59% of average net assets, respectively, which are not annualized.

(7)

Portfolio turnover rate is calculated using the lesser of the year-to-date cash investment sales and debt repayments or year-to-date cash investment purchases over the average of the total investments at fair value.

(8)

The following table provides supplemental performance ratios (annualized) measured for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30, 2023			Three Months Ended September 30, 2022			Nine Months Ended September 30, 2023			Nine Months Ended September 30, 2022
Ratio of expenses to average net assets:
Operating expenses before incentive fees		12.47	%		12.95	%		14.38	%		10.98	%
Net investment income incentive fees		2.93	%		—	%		3.34	%		—	%
Ratio of expenses, excluding interest expense to average net assets		9.09	%		5.87	%		9.89	%		4.99	%

About Oxford Square Capital Corp.

Oxford Square Capital Corp. is a publicly-traded business development company principally investing in syndicated bank loans and debt and equity tranches of collateralized loan obligation (“CLO”) vehicles. CLO investments may also include warehouse facilities, which are financing structures intended to aggregate loans that may be used to form the basis of a CLO vehicle.

Forward-Looking Statements

This press release contains forward-looking statements subject to the inherent uncertainties in predicting future results and conditions. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should also be considered to be forward-looking statements. These statements are not guarantees of future performance, conditions or results and involve a number of risks and uncertainties. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements. These factors are identified from time to time in our filings with the Securities and Exchange Commission. We undertake no obligation to update such statements to reflect subsequent events, except as may be required by law.

Contact:

Bruce Rubin

203-983-5280

Cover	Nov. 07, 2023
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 07, 2023
Entity File Number	814-00638
Entity Registrant Name	OXFORD SQUARE CAPITAL CORP.
Entity Central Index Key	0001259429
Entity Tax Identification Number	20-0188736
Entity Incorporation, State or Country Code	MD
Entity Address, Address Line One	8 Sound Shore Drive
Entity Address, Address Line Two	Suite 255
Entity Address, City or Town	Greenwich
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06830
City Area Code	203
Local Phone Number	983-5275
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Common stock, par value $0.01 per share
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	OXSQ
Security Exchange Name	NASDAQ
6.50% Notes due 2024
Title of 12(b) Security	6.50% Notes due 2024
Trading Symbol	OXSQL
Security Exchange Name	NASDAQ
6.25% Notes due 2026
Title of 12(b) Security	6.25% Notes due 2026
Trading Symbol	OXSQZ
Security Exchange Name	NASDAQ
5.50% Notes due 2028
Title of 12(b) Security	5.50% Notes due 2028
Trading Symbol	OXSQG
Security Exchange Name	NASDAQ