Oxford Square Capital Corp. [OXSQ] Filings

Oxford Square Capital Corp. [OXSQ] Filings

Oxford Square Capital Corp. [OXSQL] Filings

Oxford Square Capital Corp. [OXSQZ] Filings

Oxford Square Capital Corp. [OXSQG] Filings

10-Q 1 ea164061_10q.htm 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

_______________________________

FORM 10-Q

_______________________________

COMMISSION FILE NUMBER: 814-00638

_______________________________

OXFORD SQUARE CAPITAL CORP.

(Exact name of registrant as specified in its charter)

_______________________________

		MARYLAND		20-0188736
		(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

8 SOUND SHORE DRIVE, SUITE 255
GREENWICH, CONNECTICUT 06830
(Address of principal executive office)

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

_______________________________

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

		Large accelerated filer ☐		Accelerated filer ☐
		Non-accelerated filer ☒		Smaller Reporting company ☐
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. The number of shares of the issuer’s common stock, $0.01 par value, outstanding as of November 7, 2023, was 58,129,685.

Table of Contents

OXFORD SQUARE CAPITAL CORP.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION		1
Item 1.	Financial Statements	1
	Statements of Assets and Liabilities as of September 30, 2023 (unaudited) and December 31, 2022	1
	Schedule of Investments as of September 30, 2023 (unaudited)	2
	Schedule of Investments as of December 31, 2022	10
	Statements of Operations for the three and nine months ended September 30, 2023 and 2022 (unaudited)	17
	Statements of Changes in Net Assets for the three and nine months ended September 30, 2023 and 2022 (unaudited)	18
	Statements of Cash Flows for the nine months ended September 30, 2023 and 2022 (unaudited)	19
	Notes to Financial Statements (unaudited)	20
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	47
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	65
Item 4.	Controls and Procedures	66

PART II. OTHER INFORMATION		67
Item 1.	Legal Proceedings	67
Item 1A.	Risk Factors	67
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	67
Item 3.	Defaults Upon Senior Securities	68
Item 4.	Mine Safety Disclosures	68
Item 5.	Other Information	68
Item 6.	Exhibits	68
SIGNATURES		69

Table of Contents

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

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
COMMITMENTS AND CONTINGENCIES (Note 14)
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

See Accompanying Notes.

Table of Contents

OXFORD SQUARE CAPITAL CORP.

SCHEDULE OF INVESTMENTS (unaudited)
September 30, 2023

COMPANY/INVESTMENT(1)(20)	ACQUISITION DATE	PRINCIPAL AMOUNT		COST		FAIR VALUE(2)		% of Net Assets(31)
Senior Secured Notes
Business Services
Access CIG, LLC
second lien senior secured notes, 13.41% (SOFR + 7.75%), (0.00% floor) due February 27, 2026(4)(5)(14)(30)	February 14, 2018	$	16,754,000	$	16,793,428	$	16,321,244

Convergint Technologies, LLC
first lien senior secured notes, 10.07% (SOFR + 4.75%), (0.75% floor) due March 31, 2028(4)(5)(6)(14)(25)	November 15, 2022		2,475,000		2,387,823		2,459,531
second lien senior secured notes, 12.18% (SOFR+ 6.75%), (0.75% floor) due March 29, 2029(4)(5)(14)(25)	March 18, 2021		11,000,000		10,965,735		9,680,000

Premiere Global Services, Inc.
first lien senior secured notes, 13.00% (Prime Rate + 5.50%), (1.00% floor) due September 9, 2021(4)(5)(6)(16)(17)(29)	October 1, 2019		11,821,914		11,469,896		—
replacement revolver, 13.00% (Prime Rate + 5.50%), (1.00% floor) due April 7, 2023(4)(5)(17)(28)(29)	October 1, 2019		2,452,012		2,378,999		487,472
second lien senior secured notes, 17.00% PIK (Prime Rate + 8.50%) (1.00% floor) due June 6, 2024(3)(4)(5)(17)(29)	October 1, 2019		15,991,521		9,817,795		—

Verifone Systems, Inc.
first lien senior secured notes, 9.65% (SOFR + 4.00%), (0.00% floor) due August 20, 2025(4)(5)(6)(14)(30)	August 9, 2018		13,953,793		13,517,744		12,977,027
Total Business Services				$	67,331,420	$	41,925,274	26.1	%

Diversified Insurance
Affinion Insurance Solutions, Inc. (f/k/a AIS Intermediate, LLC)
first lien senior secured notes, 10.63% (SOFR + 5.00%), (0.00% floor) due August 15, 2025(4)(5)(6)(14)(30)	January 7, 2021	$	14,674,895	$	14,455,691	$	14,344,710
Total Diversified Insurance				$	14,455,691	$	14,344,710	8.9	%

Healthcare
Careismatic Brands, Inc. (f/k/a New Trojan Parent, Inc.)
second lien senior secured notes, 12.68% (SOFR + 7.25%), (0.50% floor) due January 5, 2029(4)(5)(25)	January 22, 2021	$	12,000,000	$	11,951,885	$	4,560,000

HealthChannels, Inc. (f/k/a ScribeAmerica, LLC)
first lien senior secured notes, 9.93% (SOFR + 4.50%), (0.00% floor) due April 3, 2025(4)(5)(6)(14)(25)	October 31, 2018		18,857,315		18,677,472		13,841,269

(continued on next page)

See Accompanying Notes.

Table of Contents

OXFORD SQUARE CAPITAL CORP.

SCHEDULE OF INVESTMENTS (unaudited) — (continued)
September 30, 2023

COMPANY/INVESTMENT(1)(20)	ACQUISITION DATE	PRINCIPAL AMOUNT		COST		FAIR VALUE(2)		% of Net Assets(31)
Senior Secured Notes – (continued)
Healthcare – (continued)
Viant Medical Holdings, Inc.
first lien senior secured notes, 9.18% (LIBOR + 3.75%), (0.00% floor) due July 2, 2025(4)(5)(6)(14)(15)	June 26, 2018	$	9,500,000	$	9,497,563	$	9,310,000
second lien senior secured notes, 13.18% (LIBOR + 7.75%), (0.00% floor) due July 2, 2026(4)(5)(14)(15)	June 26, 2018		5,000,000		4,979,627		4,600,000
Total Healthcare				$	45,106,547	$	32,311,269	20.1	%

Software
Alvaria, Inc. (f/k/a Aspect Software, Inc.)
first lien senior secured notes, 10.88% (SOFR + 5.25%), (0.75% floor) due May 8, 2028(4)(5)(6)(14)(30)	May 18, 2021	$	7,820,000	$	7,728,431	$	5,510,285
second lien senior secured notes, 14.66% (SOFR + 9.00%), (0.75% floor) due May 7, 2029(4)(5)(14)(30)	May 3, 2021		7,000,000		6,830,466		3,150,000

Dodge Data & Analytics, LLC
first lien senior secured notes, 10.29% (SOFR + 4.75%), (0.50% floor) due February 23, 2029(4)(5)(6)(14)(30)	February 10, 2022		4,937,500		4,875,699		4,033,345
second lien senior secured notes, 13.79% (SOFR + 8.25%), (0.50% floor) due February 25, 2030(4)(5)(14)(30)	February 10, 2022		15,000,000		14,808,737		10,387,500

Help/Systems Holdings, Inc.
first lien senior secured notes, 9.47% (SOFR + 4.00%), (0.75% floor) due November 19, 2026(4)(5)(6)(14)(30)	October 6, 2022		4,458,935		4,216,514		4,269,430
second lien senior secured notes, 12.35% (SOFR + 6.75%), (0.75% floor) due November 19, 2027(4)(5)(14)(30)	October 14, 2021		8,000,000		8,005,860		6,880,000

Kofax, Inc.
first lien senior secured notes, 10.72% (SOFR + 5.25%), (0.50% floor) due July 20, 2029(4)(5)(6)(30)	February 1, 2023		4,962,500		4,651,305		4,367,000

Magenta Buyer, LLC (f/k/a McAfee Enterprise)
first lien senior secured notes, 10.63% (SOFR + 5.00%), (0.75% floor) due July 27, 2028(4)(5)(6)(14)(30)	May 17, 2022		1,974,874		1,883,952		1,471,281
second lien senior secured notes, 13.88% (SOFR + 8.25%), (0.75% floor) due July 27, 2029(4)(5)(14)(30)	October 20, 2021		14,968,714		14,927,209		6,885,608

(continued on next page)

See Accompanying Notes.

Table of Contents

OXFORD SQUARE CAPITAL CORP.

SCHEDULE OF INVESTMENTS (unaudited) — (continued)
September 30, 2023

COMPANY/INVESTMENT(1)(20)	ACQUISITION DATE	PRINCIPAL AMOUNT		COST		FAIR VALUE(2)		% of Net Assets(31)
Senior Secured Notes – (continued)
Software – (continued)
Quest Software, Inc.
first lien senior secured notes, 9.77% (SOFR + 4.25%), (0.50% floor) due February 1, 2029(4)(5)(6)(14)(30)	January 20, 2022	$	2,970,000	$	2,946,232	$	2,472,525
second lien senior secured notes, 13.02% (SOFR + 7.50%), (0.50% floor) due February 1, 2030(4)(5)(14)(30)	January 20, 2022		20,000,000		19,748,247		13,600,000

RSA Security, LLC
second lien senior secured notes, 13.18% (SOFR + 7.75%), (0.75% floor) due April 27, 2029(4)(5)(14)(25)	April 16, 2021		15,000,000		14,791,215		9,600,000

Veritas USA, Inc.
first lien senior secured notes, 10.43% (SOFR + 5.00%), (1.00% floor) due September 1, 2025(4)(5)(6)(25)	June 24, 2022		3,965,870		3,466,525		3,450,307
Total Software				$	108,880,392	$	76,077,281	47.3	%

Telecommunication Services
ConvergeOne Holdings, Inc.
first lien senior secured notes, 10.37% (LIBOR + 5.00%), (0.00% floor) due January 4, 2026(4)(5)(6)(10)	June 4, 2021	$	5,253,387	$	5,223,940	$	3,204,566
second lien senior secured notes, 13.87% (LIBOR + 8.50%), (0.00% floor) due January 4, 2027(4)(5)(10)	June 3, 2021		15,000,000		14,549,897		3,801,600

Global Tel Link Corp.
second lien senior secured notes, 15.52% (SOFR + 10.00%), (0.00% floor) due November 29, 2026(4)(5)(14)(30)	November 20, 2018		17,000,000		16,848,664		14,790,000
Total Telecommunication Services				$	36,622,501	$	21,796,166	13.5	%

Utilities
CLEAResult Consulting, Inc.
second lien senior secured notes, 12.67% (SOFR + 7.25%), (0.00% floor) due August 10, 2026(4)(5)(25)	August 3, 2018	$	7,650,000	$	7,657,050	$	7,210,125

Oxford Square Capital Corp. [OXSQ] Filings
Oxford Square Capital Corp. [OXSQL] Filings
Oxford Square Capital Corp. [OXSQZ] Filings
Oxford Square Capital Corp. [OXSQG] Filings
10-Q	[2023-11-08]
10-Q	[2023-08-10]
10-Q	[2023-05-02]
10-K	[2023-03-23]
10-Q	[2022-11-08]
10-Q	[2022-07-28]
10-Q	[2022-04-28]
10-K	[2022-03-07]
10-Q	[2021-10-28]
10-Q	[2021-07-29]
10-Q	[2021-04-29]
10-K	[2021-03-22]
10-Q	[2020-10-28]
10-Q	[2020-07-29]
10-Q	[2020-04-29]
10-K	[2020-02-26]
10-Q	[2019-10-30]
10-Q	[2019-07-31]
10-Q	[2019-05-01]
10-K	[2019-02-28]
10-Q	[2018-10-31]
10-Q	[2018-08-01]
10-Q	[2018-05-02]
10-K	[2018-03-01]
10-Q	[2017-11-02]
10-Q	[2017-08-08]
10-Q	[2017-05-08]
10-K	[2017-03-03]
10-Q	[2016-11-07]
10-Q	[2016-08-05]
10-Q	[2016-05-05]
10-K	[2016-03-10]
10-Q	[2015-11-09]
10-Q	[2015-08-07]
10-Q	[2015-05-11]
10-K	[2015-03-04]
10-Q	[2014-11-06]
10-Q	[2014-08-08]
10-Q	[2014-05-12]
10-K	[2014-03-17]
10-Q	[2013-11-12]
10-Q	[2013-08-08]
10-Q	[2013-05-09]
10-K	[2013-03-13]
10-Q	[2012-11-09]
10-Q	[2012-08-03]
10-Q	[2012-05-10]
10-K	[2012-03-15]

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED September 30, 2023

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934