Oxford Square Capital Corp. [OXSQG] Filings

Oxford Square Capital Corp. [OXSQG] Filings

Oxford Square Capital Corp. [OXSQ] Filings

Oxford Square Capital Corp. [OXSQZ] Filings

10-Q 1 ea0210294-01_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
6.25% 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 August 12, 2024, was 63,757,860.

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 June 30, 2024 (Unaudited) and December 31, 2023	1
	Schedule of Investments as of June 30, 2024 (Unaudited)	2
	Schedule of Investments as of December 31, 2023	9
	Statements of Operations for the three and six months ended June 30, 2024 and 2023 (Unaudited)	16
	Statements of Changes in Net Assets for the three and six months ended June 30, 2024 and 2023 (Unaudited)	17
	Statements of Cash Flows for the six months ended June 30, 2024 and 2023 (Unaudited)	18
	Notes to Financial Statements (Unaudited)	19
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	45
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	62
Item 4.	Controls and Procedures	62

PART II. OTHER INFORMATION		64
Item 1.	Legal Proceedings	64
Item 1A.	Risk Factors	64
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	64
Item 3.	Defaults Upon Senior Securities	64
Item 4.	Mine Safety Disclosures	64
Item 5.	Other Information	64
Item 6.	Exhibits	65
SIGNATURES		66

Table of Contents

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

OXFORD SQUARE CAPITAL CORP.

STATEMENTS OF ASSETS AND LIABILITIES

	June 30, 2024			December 31, 2023
	(Unaudited)
ASSETS
Non-affiliated/non-control investments (cost: $397,523,375 and $440,069,822, respectively)	$	249,566,370		$	261,614,335
Affiliated investments (cost: $16,836,822 and $16,836,822, respectively)		2,543,665			5,276,092
Cash and cash equivalents		30,014,406			5,740,553
Securities sold, not settled		3,402,645			—
Interest and distributions receivable		3,274,499			3,976,408
Other assets		1,383,299			1,060,384
Total assets	$	290,184,884		$	277,667,772
LIABILITIES
Notes payable – 6.25% Unsecured Notes, net of deferred issuance costs of $427,349 and $543,609, respectively		44,363,401			44,247,141
Notes payable – 5.50% Unsecured Notes, net of deferred issuance costs of $1,575,975 and $1,768,219, respectively		78,924,025			78,731,781
Securities purchased, not settled		10,852,405			—
Base Fee and Net Investment Income Incentive Fee payable to affiliate		1,023,352			1,012,389
Accrued interest payable		1,204,487			1,204,487
Accrued expenses		1,405,182			1,163,349
Total liabilities		137,772,852			126,359,147
COMMITMENTS AND CONTINGENCIES (Note 13)
NET ASSETS
Common stock, $0.01 par value, 100,000,000 shares authorized; 62,705,628 and 59,300,472 shares issued and outstanding, respectively		627,056			593,005
Capital in excess of par value		468,341,856			458,121,381
Total distributable earnings/(accumulated losses)		(316,556,880	)		(307,405,761	)
Total net assets		152,412,032			151,308,625
Total liabilities and net assets	$	290,184,884		$	277,667,772
Net asset value per common share	$	2.43		$	2.55

The accompanying notes are an integral part of these unaudited financial statements.

Table of Contents

OXFORD SQUARE CAPITAL CORP.

SCHEDULE OF INVESTMENTS (Unaudited)
June 30, 2024

COMPANY/INVESTMENT(1)(20)	ACQUISITION DATE	PRINCIPAL AMOUNT		COST		FAIR VALUE(2)		% of Net Assets(10)
Senior Secured Notes
Business Services
Access CIG, LLC
first lien senior secured notes, 10.33% (SOFR + 5.00%), (0.50% floor) due August 18, 2028(4)(5)(6)(14)(30)	January 18, 2024	$	8,173,897	$	8,208,168	$	8,235,201

Convergint Technologies, LLC
first lien senior secured notes, 10.09% (SOFR + 4.75%), (0.75% floor) due March 31, 2028(4)(5)(6)(14)(25)	November 15, 2022		2,456,249		2,381,781		2,462,390
second lien senior secured notes, 12.21% (SOFR+ 6.75%), (0.75% floor) due March 29, 2029(4)(5)(14)(25)	March 18, 2021		11,000,000		10,975,131		10,725,000

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		486,634
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		17,332,459		9,817,795		—

Verifone Systems, Inc.
first lien senior secured notes, 9.60% (SOFR + 4.00%), (0.00% floor) due August 20, 2025(4)(5)(6)(14)(30)	August 9, 2018		14,838,658		14,552,312		12,241,893
Total Business Services				$	59,784,082	$	34,151,118	22.4	%

Food and Beverage
Shearer’s Foods, LLC
first lien senior secured notes, 9.34% (SOFR + 4.00%), (0.00% floor) due January 31, 2031(4)(5)(6)(14)(25)	January 31, 2024	$	8,000,000	$	8,021,532	$	8,060,000
Total Food and Beverage				$	8,021,532	$	8,060,000	5.3	%

Healthcare
HealthChannels, Inc. (f/k/a ScribeAmerica, LLC)
first lien senior secured notes, 9.96% (SOFR + 4.50%), (0.00% floor) due April 3, 2025(4)(5)(6)(14)(25)	October 31, 2018	$	18,676,966	$	18,583,772	$	12,980,491

Viant Medical Holdings, Inc.
first lien senior secured notes, 9.21% (SOFR + 3.75%), (0.00% floor) due July 2, 2025(4)(5)(6)(14)(25)	June 26, 2018		9,425,000		9,422,774		9,318,969
second lien senior secured notes, 13.21% (SOFR + 7.75%), (0.00% floor) due July 2, 2026(4)(5)(14)(25)	June 26, 2018		5,000,000		4,985,815		4,956,250
Total Healthcare				$	32,992,361	$	27,255,710	17.9	%

(continued on next page)

The accompanying notes are an integral part of these unaudited financial statements.

Table of Contents

OXFORD SQUARE CAPITAL CORP.

SCHEDULE OF INVESTMENTS (Unaudited) — (continued)
June 30, 2024

COMPANY/INVESTMENT(1)(20)	ACQUISITION DATE	PRINCIPAL AMOUNT		COST		FAIR VALUE(2)		% of Net Assets(10)
Senior Secured Notes – (continued)
Industrials
Michael Baker International, Inc.
first lien senior secured notes, 10.09% (SOFR + 4.75%), (0.00% floor) due December 1, 2028(4)(5)(14)(25)	May 22, 2024	$	8,000,000	$	8,047,500	$	8,010,000
Total Industrials				$	8,047,500	$	8,010,000	5.3	%

Software
Alvaria, Inc. (f/k/a Aspect Software, Inc.)
first lien second out senior secured notes, 6.44% (SOFR + 1.00%) cash, 6.50% PIK, (0.75% floor) due May 5, 2028(3)(4)(5)(15)(25)	March 20, 2024	$	2,145,423	$	1,621,365	$	1,367,707
first lien third out tranche A senior secured notes, 7.44% (SOFR + 2.00%) cash, 5.50% PIK, (0.75% floor) due May 5, 2028(3)(4)(5)(15)(25)	March 20, 2024		4,991,757		2,440,169		1,247,939
first lien third out tranche B senior secured notes, 12.46% (SOFR + 7.00%), (0.75% floor) due May 5, 2028(4)(5)(15)(25)	March 20, 2024		2,800,000		1,583,608		849,324
first lien fourth out senior secured notes, 12.46% (SOFR + 7.00%), (0.75% floor) due May 5, 2028(4)(5)(15)(25)	March 20, 2024		2,800,000		732,833		280,000

Dodge Data & Analytics, LLC
first lien senior secured notes, 10.23% (SOFR + 4.75%), (0.50% floor) due February 23, 2029(4)(5)(6)(14)(30)	February 10, 2022		4,900,000		4,845,482		3,577,000
second lien senior secured notes, 13.73% (SOFR + 8.25%), (0.50% floor) due February 25, 2030(4)(5)(14)(30)	February 10, 2022		15,000,000		14,823,953		6,450,000

Help/Systems Holdings, Inc.
first lien senior secured notes, 9.43% (SOFR + 4.00%), (0.75% floor) due November 19, 2026(4)(5)(6)(14)(30)	October 6, 2022		4,424,280		4,234,355		3,981,852
second lien senior secured notes, 12.20% (SOFR + 6.75%), (0.75% floor) due November 19, 2027(4)(5)(14)(30)	October 14, 2021		8,000,000		8,003,774		6,180,000

Kofax, Inc.
first lien senior secured notes, 10.68% (SOFR + 5.25%), (0.50% floor) due July 20, 2029(4)(5)(6)(14)(30)	February 1, 2023		9,907,304		9,281,489		9,213,793

Magenta Buyer, LLC (f/k/a McAfee Enterprise)
first lien senior secured notes, 10.59% (SOFR + 5.00%), (0.75% floor) due July 27, 2028(4)(5)(6)(30)	May 17, 2022		1,959,799		1,880,927		1,081,162
second lien senior secured notes, 13.84% (SOFR + 8.25%), (0.75% floor) due July 27, 2029(4)(5)(30)	October 20, 2021		14,968,714		14,930,821		4,490,614

(continued on next page)

The accompanying notes are an integral part of these unaudited financial statements.

Table of Contents

OXFORD SQUARE CAPITAL CORP.

SCHEDULE OF INVESTMENTS (Unaudited) — (continued)
June 30, 2024

COMPANY/INVESTMENT(1)(20)	ACQUISITION DATE	PRINCIPAL AMOUNT		COST		FAIR VALUE(2)		% of Net Assets(10)
Senior Secured Notes – (continued)
Software – (continued)
Quest Software, Inc.
first lien senior secured notes, 9.73% (SOFR + 4.25%), (0.50% floor) due February 1, 2029(4)(5)(6)(14)(30)	January 20, 2022	$	2,947,500	$	2,926,702	$	2,181,150
second lien senior secured notes, 12.98% (SOFR + 7.50%), (0.50% floor) due February 1, 2030(4)(5)(14)(30)	January 20, 2022		20,000,000		19,769,611		10,100,000

RSA Security, LLC
second lien senior secured notes, 13.21% (SOFR + 7.75%), (0.75% floor) due April 27, 2029(4)(5)(14)(25)	April 16, 2021		15,000,000		14,816,885		12,075,000
Total Software				$	101,891,974	$	63,075,541	41.4	%

Telecommunication Services
ConvergeOne Holdings, Inc.
first lien senior secured notes, 11.08% (SOFR + 5.75%), (0.00% floor) due June 4, 2030(4)(5)(30)	June 4, 2024	$	934,808	$	891,067	$	920,786

Global Tel Link Corp.
second lien senior secured notes, 15.44% (SOFR + 10.00%), (0.00% floor) due November 29, 2026(4)(5)(14)(25)	November 20, 2018		17,000,000		16,879,041		16,226,500
Total Telecommunication Services				$	17,770,108	$	17,147,286	11.3	%

Utilities

Oxford Square Capital Corp. [OXSQG] Filings
Oxford Square Capital Corp. [OXSQ] Filings
Oxford Square Capital Corp. [OXSQZ] Filings
10-Q	[2024-08-14]
10-Q	[2024-05-03]
10-K	[2024-03-19]
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 June 30, 2024

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