Financial Data and Key Metrics Changes - The net asset value per share increased by 3.9% to $11.51, up $0.43 from the prior quarter [4] - Net investment income decreased from $0.42 per share in Q1 to $0.26 per share in Q2, primarily due to non-recurring items in the previous quarter [4][8] - The GAAP leverage ratio decreased from 1.87 times at December 31 to 1.62 times at June 30 [8] - Total investment income decreased by approximately $3.1 million to $11.2 million this quarter [10] - Total expenses decreased by 10.5% to $7.7 million, mainly due to lower interest expenses [10] Business Line Data and Key Metrics Changes - The fair value of the minority equity investment in Pfanstiehl increased by $7.8 million to $70.8 million at quarter end [5] - Approximately 100% of the loan portfolio at fair value consists of senior secured loans [12] - The weighted average performing investment income yield on the interest-bearing portion of the portfolio improved slightly to 13.4%, up about 0.4% quarter-over-quarter [13] Market Data and Key Metrics Changes - The company remains cautious about new originations and notes that M&A activity remains subdued [6][12] - The overall quality of the portfolio remains stable, with 4.6% of total investments at fair value on non-accrual status at quarter's end [9] Company Strategy and Development Direction - The company is focused on increasing net investment income by converting non-interest earning equity positions into interest-earning assets [5][14] - The investment discipline emphasizes avoiding highly cyclical industries and maintaining a well-diversified loan portfolio [6][12] - The company aims to preserve capital with approximately 100% of the known portfolio at fair value being senior secured [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the uncertain interest rate environment but believes the company benefits from its balance sheet positioning [4] - The company anticipates an increase in M&A activity later in the year as clarity on interest rates improves [6] - Management expresses confidence in the overall quality and fundamentals of the portfolio, citing a long-standing investment discipline [14][15] Other Important Information - The quarterly distribution will remain at $0.34 per share for the third quarter, representing a 15.3% annualized yield based on the stock price at quarter end [8] - The adviser managing the company has a strong track record and maintains approximately 23% ownership in the company, aligning their interests with shareholders [15] Q&A Session Summary Question: What are the plans for increasing net investment income? - The company is actively exploring alternatives to monetize non-interest-bearing investments, specifically the minority equity stake in Pfanstiehl [9] Question: How is the company positioned in the current market? - The company believes its portfolio remains solid with no new non-accruals and is focused on capital preservation [14]

OFS Capital (OFS) came out with quarterly earnings of $0.26 per share, missing the Zacks Consensus Estimate of $0.29 per share. This compares to earnings of $0.38 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of -10.34%. A quarter ago, it was expected that this management investment company would post earnings of $0.35 per share when it actually produced earnings of $0.42, delivering a surprise of 20%. Over the last four quarte ...

Financial Performance - The net asset value (NAV) per common share increased to $11.51 at June 30, 2024, from $11.08 at March 31, 2024, due to a net gain on investments of $0.51 per common share[120] - Total investment income decreased to $11.2 million for the quarter ended June 30, 2024, down from $14.2 million in the prior quarter, primarily due to a $2.4 million decrease in dividend income[120] - Net investment income for the three months ended June 30, 2024, was $3.4 million, compared to $5.6 million in the prior quarter[141] - For the three months ended June 30, 2024, total investment income decreased to $11.2 million from $14.2 million in the prior quarter, primarily due to a decrease in total dividend income of $2.4 million and interest income of $0.5 million[142] - For the six months ended June 30, 2024, total investment income decreased by $3.4 million compared to the same period in the prior year, mainly due to a decrease in total interest income of $5.2 million[143] - Cash from net investment income for the six months ended June 30, 2024, was $6.2 million, a decrease of $2.9 million compared to the same period in 2023[153] Debt and Financing - The total outstanding debt decreased to $249.1 million at June 30, 2024, from $258.5 million at March 31, 2024, due to repayments of $9.4 million on the BNP Facility[120] - The weighted-average debt interest costs increased to 6.5% for the quarter ended June 30, 2024, compared to 6.3% for the prior quarter[120] - The company had unused commitments of $25.0 million under the Banc of California Credit Facility and $80.9 million under the BNP Facility as of June 30, 2024[120] - The effective interest rate on the Banc of California Credit Facility was 9.25% as of June 30, 2024, with a maturity date extended to February 28, 2026[156] - The effective interest rate on the BNP Facility was 9.07% as of June 30, 2024, with $69.1 million drawn and an unused commitment of $80.9 million[158] - Approximately 50% of the company's outstanding debt matures in 2027 and beyond, with 72% carrying fixed interest rates[162] Investment Portfolio - A net gain on investments of $6.9 million was recognized for the quarter ended June 30, 2024, primarily due to net unrealized appreciation of $11.3 million[120] - The fair value of the debt investment portfolio totaled $236.9 million in 40 portfolio companies as of June 30, 2024, with approximately 85% being first lien debt investments[125] - Total Portfolio Company Investments amounted to $322.537 million at fair value as of June 30, 2024, compared to $341.242 million at the end of 2023[130] - The three largest industries by fair value in the Portfolio Company Investments were Manufacturing (29.8%), Health Care and Social Assistance (20.6%), and Wholesale Trade (12.9%), totaling approximately 63.3%[131] - The classification of debt investments by credit risk rating showed that 80.5% were rated as Average, with a fair value of $190.782 million[135] - As of June 30, 2024, approximately 100% of the loan portfolio and 59% of the total portfolio consisted of first lien and second lien loans, providing greater downside protection against adverse economic changes[130] Distributions and Shareholder Returns - The Board declared a distribution of $0.34 per share for the third quarter of 2024, payable on September 30, 2024[120] - The company is required to distribute at least 90% of its taxable income to maintain its RIC status[163] - The company did not make any repurchases of common stock during the six months ended June 30, 2024, with approximately $9.6 million remaining under the Stock Repurchase Program[160] Operational Metrics - The asset coverage ratio was 162% as of June 30, 2024, exceeding the minimum requirement of 150% under the 1940 Act[120] - Total expenses for the three months ended June 30, 2024, were $7.7 million, a decrease from $8.6 million in the prior quarter[144] - Interest expense for the three months ended June 30, 2024, decreased to $4.1 million from $4.6 million in the prior quarter, due to a reduction in average outstanding debt balances[144] - The total net increase in net assets resulting from operations for the three months ended June 30, 2024, was $10.3 million, compared to a net decrease of $9.0 million in the prior quarter[141] Cash and Liquidity - As of June 30, 2024, the company held cash and cash equivalents of $5.6 million, with an unused commitment of $25.0 million under the Banc of California Credit Facility and $80.9 million under the BNP Facility[149] - The company had $5.6 million in cash and cash equivalents and unused commitments of $25.0 million under the Banc of California Credit Facility and $80.9 million under the BNP Facility[162] Market Conditions and Risks - The company may incur significant realized losses if required to liquidate portfolio investments in a forced sale[162] - Non-performing Structured Finance Securities had an amortized cost of $3.5 million and a fair value of $1.7 million as of June 30, 2024[131] - The company recognized a realized loss of $0.7 million on the debt restructure of its first lien debt investment in GoTo Group during the six months ended June 30, 2024[134] - The company recognized a net realized loss of $2.4 million on its second lien debt investment in Astro One Acquisition Corporation[137]

What first stands out to me is that OFS is very diverse in nature and spreads its exposure across many different industries. The manufacturing sector makes up the largest allocation of their portfolio, making up 28%. This is closely followed by health care and social assistance, making up 20.1% of the portfolio. The portfolio is spread across 14 different sectors and has 43 different obligors. Their strategy is to avoid exposure to any sectors that have cyclical vulnerability. Additionally, this level of di ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number 814-00813 OFS CAPITAL CORPORATION (Exact name of registrant as specified in its charter) Delaware 46-1339639 State o ...

Exhibit 99.1 OFS CAPITAL CORPORATION ANNOUNCES FIRST QUARTER 2024 FINANCIAL RESULTS DECLARES SECOND QUARTER DISTRIBUTION OF $0.34 PER SHARE Chicago, IL - May 2, 2024 - OFS Capital Corporation (NASDAQ: OFS) ("OFS Capital," the "Company," "we," "us," or "our") today announced its financial results for the fiscal quarter ended March 31, 2024. FIRST QUARTER FINANCIAL HIGHLIGHTS OTHER RECENT EVENTS | SELECTED FINANCIAL HIGHLIGHTS (unaudited) | | | Three Months Ended | | | --- | --- | --- | --- | --- | | (Per com ...

1 Despite Mr. Ressler's involvement in each, none of CIM, OFS, or Orchard Capital Ventures has the benefit of any cross-guarantee. None of these entities are entitled to draw on the capital of any other, and no guarantee of the liabilities of any such entity by any other such entity should be inferred from their relationship. 2 Includes OFSAM Holdings, its predecessor entity, and its direct and indirect subsidiaries. 3 As of September 30, 2023. See Important Disclosures on page 1. 4 As of December 31, 2023. ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-K (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER: 814-00813 OFS Capital Corporation (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 46-1339639 (State or jurisdiction of incorporation or organization) 10 S. ...

Exhibit 99.1 OFS CAPITAL CORPORATION ANNOUNCES FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL RESULTS DECLARES FIRST QUARTER 2024 DISTRIBUTION OF $0.34 PER SHARE Chicago, IL - March 4, 2024 - OFS Capital Corporation (Nasdaq: OFS) ("OFS Capital," "we," "us," or "our") today announced its financial results for the fiscal quarter and year ended December 31, 2023. FOURTH QUARTER FINANCIAL HIGHLIGHTS OTHER RECENT EVENTS | SELECTED FINANCIAL HIGHLIGHTS (unaudited) | | Quarter Ended | | | | --- | --- | --- | --- | -- ...

Financial Performance - As of September 30, 2023, the net asset value (NAV) per common share decreased to $12.74 from $12.94 at June 30, 2023, primarily due to unrealized depreciation on investments of $0.26 per common share[140]. - For the quarter ended September 30, 2023, total investment income increased to $14.7 million from $14.5 million in the prior quarter, driven by a $0.2 million increase in interest income[141]. - The net investment income for the three months ended September 30, 2023, was $5.390 million, an increase from $5.123 million in the previous quarter[174]. - The company recognized a net loss on investments of $3.4 million for the quarter, primarily due to net unrealized depreciation of $3.5 million on debt and equity investments[143]. - The company experienced a net loss on investments of $3.395 million for the three months ended September 30, 2023, compared to a loss of $7.087 million in the previous quarter[174]. - During the nine months ended September 30, 2023, the portfolio experienced net losses of $11.6 million, primarily due to net unrealized depreciation of $6.7 million on common equity investments[189]. - Adjusted Net Investment Income for the three months ended September 30, 2023, was $5.390 million, or $0.40 per share[195]. Investment Portfolio - As of September 30, 2023, the fair value of the debt investment portfolio totaled $279.2 million across 43 portfolio companies, with approximately 99% being senior secured loans[154]. - The total portfolio company investments amounted to $373.958 million at fair value as of September 30, 2023, compared to $412.058 million as of December 31, 2022[162]. - The ten largest investments accounted for 49.6% of the total portfolio at fair value, with Pfanstiehl Holdings, Inc. being the largest equity investment valued at $77.1 million[156]. - Approximately 99% of the loan portfolio and 61% of the total portfolio consisted of senior secured loans based on fair value as of September 30, 2023[162]. - The three largest industries by fair value in the portfolio were Manufacturing (28.1%), Health Care and Social Assistance (19.3%), and Wholesale Trade (14.0%), totaling 61.4% of the portfolio[163]. Debt and Financing - The weighted-average debt interest costs increased to 6.1% compared to 6.0% for the quarter ended June 30, 2023, due to rising costs on the BNP Facility from SOFR rate increases[142]. - The company had an unused commitment of $25.0 million under the PWB Credit Facility and $58.9 million under the BNP Facility as of September 30, 2023[197]. - The effective interest rate on the PWB Credit Facility was 8.80% as of September 30, 2023, with an unused commitment of $25.0 million[212]. - The BNP Facility had $91.1 million drawn as of September 30, 2023, with an effective interest rate of 8.67%[218][220]. - The company has $31.9 million of outstanding SBA debentures maturing in 2025, with a fair value of the SBIC I LP investment portfolio at $143.3 million[230]. Asset Coverage and Compliance - As of September 30, 2023, the asset coverage ratio was 163%, exceeding the minimum requirement of 150% under the 1940 Act[145]. - The minimum required asset coverage ratio was decreased from 200% to 150% effective May 3, 2019[224]. - The aggregate amount outstanding of senior securities issued was $303.0 million, with an asset coverage ratio of 163%[226]. Cash and Liquidity - As of September 30, 2023, the company held cash of $15.9 million, including $8.4 million held by SBIC I LP and $4.0 million held by OFSCC-FS[196]. - The company continues to monitor liquidity risks associated with potential bank failures and maintains cash balances with U.S. Bank N.A and Citibank N.A[228]. - As of September 30, 2023, the approximate dollar value of shares remaining that may be purchased under the Stock Repurchase Program was $9.6 million[225]. Operational Metrics - Operating expenses for the three months ended September 30, 2023, totaled $9.261 million, a decrease from $9.403 million in the prior quarter[179]. - Interest expense for the three months ended September 30, 2023, decreased by $0.1 million compared to the prior quarter, primarily due to a reduction in the average outstanding debt balance[180]. - Total fee income decreased by $0.1 million compared to the prior quarter due to no syndication fees recognized during the current quarter[177]. Future Outlook - The company plans to fund growth through current borrowings, follow-on equity offerings, and issuances of senior securities[221]. - The company expects potential challenges in extending the PWB Credit Facility due to the merger between Banc of California and Pacific Western Bank[214]. - Interest rate sensitivity analysis indicates that a 100 basis point increase in interest rates could result in a net change of $1.702 million in earnings[242].