Oxford Square Capital (US:OXSQ)2025-11-07 01:06Investment Portfolio - As of September 30, 2025, the fair value of the Company's investment portfolio was approximately $260.5 million[245] - The total fair value of the investment portfolio as of September 30, 2025, was approximately $260.5 million, a slight decrease from $260.9 million as of December 31, 2024[256] - As of September 30, 2025, the company had investments in debt securities or loans to 19 portfolio companies, with a fair value of approximately $142.0 million[262] - The fair value of senior secured notes was $142.0 million, representing 54.5% of the total portfolio as of September 30, 2025[265] - The company’s CLO equity investments increased to approximately $113.2 million as of September 30, 2025, from $104.6 million as of December 31, 2024[265] Investment Strategy - The investment strategy includes seeking attractive risk-adjusted total returns primarily through corporate debt securities and CLOs[236] - The Company generally expects to invest between $5 million and $25 million in each portfolio company[238] Debt Investments - The weighted average annualized yield on debt investments was approximately 14.60% as of September 30, 2025[239] - Debt investments had stated interest rates ranging from 6.91% to 12.75% with maturity dates between 2 and 94 months[239] - The weighted average yield on debt investments was approximately 14.60% as of September 30, 2025, compared to 14.50% in 2024[278] - The weighted average stated interest rate on all of the company's debt outstanding as of September 30, 2025, was 6.58%[305] Financial Performance - Total investment income for the three months ended September 30, 2025, was approximately $10.2 million, a decrease of 1.0% from $10.3 million for the same period in 2024[274] - For the nine months ended September 30, 2025, total investment income was approximately $29.9 million, down 7.9% from $32.5 million in 2024[276] - Interest income for the three months ended September 30, 2025, was approximately $5.2 million, a decrease of 15.7% from $6.1 million in 2024[274] - Net investment income for the three months ended September 30, 2025, was approximately $5.6 million, down 9.7% from $6.2 million in 2024[294] - The net decrease in net assets resulting from operations for the three months ended September 30, 2025, was approximately $2.1 million, compared to a decrease of $0.9 million in 2024[296] - For the nine months ended September 30, 2025, the company recognized net realized losses on investments of approximately $14.5 million[292] - The company reported net realized losses on investments of approximately $14.5 million for the nine months ended September 30, 2025, compared to $96.2 million for the year ended December 31, 2024[258] Cash and Capital Management - As of September 30, 2025, cash and cash equivalents were approximately $50.8 million, an increase from approximately $34.9 million as of December 31, 2024[299] - For the nine months ended September 30, 2025, net cash used in operating activities was approximately $15.6 million, reflecting purchases of investments of approximately $86.2 million[299] - The company raised approximately $27.4 million from the issuance of common stock through its ATM program during the nine months ended September 30, 2025[302] - The total amount of capital raised net of underwriting fees and offering costs was approximately $26.9 million during the nine months ended September 30, 2025[302] Debt Obligations and Risks - The company has contractual obligations of $155.3 million, with $80.5 million due within one year and $74.8 million due in 1-3 years[300] - The company is exposed to leverage risks due to borrowing funds for investments, which may magnify potential gains and losses[241] - The company is subject to financial market risks, including changes in interest rates, which can affect net interest income and investment portfolio value[326] - A hypothetical increase of 300 basis points in base rates could lead to a 13.2% increase in net investment income[329] Regulatory and Compliance - The Company operates as a closed-end management investment company and is regulated as a business development company (BDC)[236] - The company is required to distribute at least 90% of its ordinary income and short-term capital gains to avoid corporate level tax[309] - The investment advisory agreement is with Oxford Square Management, which is controlled by Oxford Funds[315] - The company has implemented policies to screen transactions for potential conflicts of interest with related parties[321] - The company has adopted a Code of Business Conduct and Ethics to avoid conflicts of interest among its officers and directors[322] - The allocation policy for investment opportunities among affiliated entities is based on various factors, including cash availability and investment size[318] - The company has applied for a new exemptive relief order to allow for negotiated co-investment transactions alongside certain regulated funds[320] Distributions and Shareholder Actions - Total distributions for fiscal 2024 are projected at $0.42 per share, with a total of $0.105 per share declared for each quarter[324] - The company has authorized a share repurchase program allowing for the repurchase of up to $25.0 million of common stock over a 12-month period starting October 30, 2025[324] Operating Expenses - Operating expenses for the three months ended September 30, 2025, increased to approximately $4.7 million, up 11.9% from $4.2 million in 2024[280] - The principal value of income-producing debt investments decreased to approximately $180.6 million as of September 30, 2025, from $209.6 million in 2024[278]