Oxford Square Capital (OXSQ)2025-03-05 22:23Investment Portfolio - As of December 31, 2024, the outstanding investment in OCP CLO 2024-37, Ltd. is approximately 47.3 million[52] - As of December 31, 2024, the outstanding investment in Carlyle Global Market Strategies CLO 2021-6, Ltd. is approximately 14.8 million[54] - As of December 31, 2024, the outstanding investment in HealthChannels, Inc. is approximately 26.4 million[56] - As of December 31, 2024, the outstanding investment in Convergint Technologies, LLC is approximately 11.0 million[57] - As of December 31, 2024, the outstanding investment in Dodge Data & Analytics, LLC includes approximately 2.2 million in first lien first out senior secured notes, 15.0 million in second lien senior secured notes[58] - As of December 31, 2024, the outstanding investment in Access CIG, LLC is approximately 10.0 million[60] Income and Fees - Pre-Incentive Fee Net Investment Income for the quarter is 1.925%[77] - The Total Return Requirement is met, allowing for a Net Investment Income Incentive Fee calculation[77] - The income-related incentive fee is calculated at 0.175% based on the Pre-Incentive Fee Net Investment Income exceeding the hurdle rate[77] - Quarterly investment income, including interest and dividends, is reported at 4.00%[78] - Pre-Incentive Fee Net Investment Income after expenses is 3.425%[78] - The income-related incentive fee is calculated at 0.685% when Pre-Incentive Fee Net Investment Income exceeds both the hurdle rate and 2.1875%[79] - Capital Gains Incentive Fee is determined as 20% of realized capital gains net of losses for the year[81] - In Year 2, the Total Capital Gains Incentive Fee paid is 1.6% based on 8% realized capital gains[83] - In Year 3, the Total Capital Gains Incentive Fee paid is 2% based on 10% realized capital gains[83] Operating Expenses and Risks - The company bears all operating expenses, including advisory fees and various administrative costs[84] - The company is permitted to borrow money, allowing for potential gains or losses on investments, which increases investment risk[101] - The asset coverage requirement for senior securities was changed from 200% to 150%, allowing the company to borrow 1 of investor equity[117] - The company must distribute at least 90% of its investment company taxable income to qualify as a RIC, avoiding U.S. federal income tax on ordinary income and capital gains[103] - A 4% nondeductible U.S. federal excise tax applies on certain undistributed income unless specific distribution requirements are met[105] - The company may face significant risks due to potential conflicts of interest between itself and its management team[101] - The lack of liquidity in the company's investments may adversely affect its business operations[101] - The company's common stock price may be volatile and has traded at a discount from net asset value[101] - The company may incur risks from investments in CLO vehicles, which are less transparent than direct investments in senior loans[101] Management and Compliance - The company has no employees; its day-to-day operations are managed by Oxford Square Management[102] - The company may be forced to curtail or cease new lending and investment activities if it cannot obtain additional capital due to regulatory or market constraints[101] - The company may sell its common stock below net asset value per share under specific circumstances, including rights offerings to existing stockholders[119] - As a Business Development Company (BDC), at least 70% of the company's total assets must consist of qualifying assets at the time of acquisition[120] - The company is subject to compliance examinations by the SEC under the 1940 Act, which governs its operations[120] - The company must provide significant managerial assistance to portfolio companies, except in certain controlled circumstances[123] - The company has adopted a Code of Ethics to prevent conflicts of interest and restrict certain transactions by its personnel[124] Interest Rate and Reporting - As of December 31, 2024, all but one of the company's variable rate investments were income-producing, with rates based on the five-year U.S. Treasury note, the Prime rate, or SOFR[443] - A hypothetical increase of 300 basis points in floating interest rates could lead to a 14.6% increase in net investment income[447] - The company may hedge against interest rate fluctuations using standard hedging instruments, although this may limit benefits from lower interest rates[445] - The company is required to file annual and quarterly reports with the SEC, including audited financial statements[135] - The company has implemented compliance policies and procedures to prevent violations of federal securities laws and reviews them annually[125]