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What changed in Oxford Square Capital Corp.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Oxford Square Capital Corp.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+305 added−294 removedSource: 10-K (2026-03-06) vs 10-K (2025-03-05)

Top changes in Oxford Square Capital Corp.'s 2025 10-K

305 paragraphs added · 294 removed · 242 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

76 edited+8 added−12 removed183 unchanged
Biggest changeIf we are treated as receiving a deemed distribution from a CFC, we will be required to include such distribution in our investment company taxable income regardless of whether we receive any actual distributions from such CFC, and we must distribute such income to satisfy the Annual Distribution Requirement and the Excise Tax Avoidance Requirement. 21 Income inclusions from a QEF or a CFC will be “good income” for purposes of the 90% Income Test provided that they are derived in connection with our business of investing in stocks and securities or the QEF or the CFC distribute such income to us in the same taxable year to which the income is included in our income.
Biggest changeIf we are treated as receiving a deemed distribution from a CFC, we will be required to include such distribution in our investment company taxable income regardless of whether we receive any actual distributions from such CFC, and we must distribute such income to satisfy the Annual Distribution Requirement and the Excise Tax Avoidance Requirement.
Cohen has also served as Chief Executive Officer and a Director of Oxford Lane Capital Corp. (NasdaqGS: OXLC), a registered closed -end fund, and as Chief Executive Officer of its investment adviser, Oxford Lane Management, LLC, or “Oxford Lane Management,” since 2010. Since 2015 and 2018, respectively, Mr.
Cohen has also served as Chief Executive Officer and a Director of Oxford Lane Capital Corp. (NasdaqGS: OXLC), a registered closed -end fund, and as Chief Executive Officer of its investment adviser, Oxford Lane Management, LLC, or “Oxford Lane Management,” since 2010. Since 2018 and 2015, respectively, Mr.
The “Capital Gains Incentive Fee,” is determined as described above. 12 For more information about the calculation of the advisory fee under the Investment Advisory Agreement prior to effectiveness of the 2016 Fee Waiver, refer to our Annual Report on Form 10 -K for the fiscal year ended December 31, 2016. Calculation of Fees under the 2016 Fee Waiver.
The “Capital Gains Incentive Fee,” is determined as described above. For more information about the calculation of the advisory fee under the Investment Advisory Agreement prior to effectiveness of the 2016 Fee Waiver, refer to our Annual Report on Form 10 -K for the fiscal year ended December 31, 2016. 12 Calculation of Fees under the 2016 Fee Waiver.
Hypothetical Scenarios: • Year 1 = no realized capital gains or losses 15 • Year 2 = 9% realized capital gains, 0% realized capital losses, 1% unrealized depreciation and 0% unrealized appreciation • Year 3 = 12% realized capital gains, 0% realized capital losses, 2% unrealized depreciation and 2% unrealized appreciation Year 1 incentive fee • Total Incentive Fee Capital Gains = 0 • No Capital Gains Incentive Fee paid to Oxford Square Management in Year 1 Year 2 incentive fee • Total Incentive Fee Capital Gains = 8% (9% realized capital gains less 1% unrealized depreciation ) • Total Capital Gains Incentive Fee paid to Oxford Square Management in Year 2 = 20% × 8% = 1.6% Year 3 incentive fee • Total Incentive Fee Capital Gains = 10% (12% realized capital gains less 2% unrealized depreciation; unrealized appreciation has no effect ) • Total Capital Gains Incentive Fee paid to Oxford Square Management in Year 3 = 20% × 10% = 2% ____________ (*) The theoretical amounts of returns shown are based on a percentage of our total net assets and assume no leverage.
Hypothetical Scenarios: • Year 1 = no realized capital gains or losses • Year 2 = 9% realized capital gains, 0% realized capital losses, 1% unrealized depreciation and 0% unrealized appreciation • Year 3 = 12% realized capital gains, 0% realized capital losses, 2% unrealized depreciation and 2% unrealized appreciation 15 Year 1 incentive fee • Total Incentive Fee Capital Gains = 0 • No Capital Gains Incentive Fee paid to Oxford Square Management in Year 1 Year 2 incentive fee • Total Incentive Fee Capital Gains = 8% (9% realized capital gains less 1% unrealized depreciation ) • Total Capital Gains Incentive Fee paid to Oxford Square Management in Year 2 = 20% × 8% = 1.6% Year 3 incentive fee • Total Incentive Fee Capital Gains = 10% (12% realized capital gains less 2% unrealized depreciation; unrealized appreciation has no effect ) • Total Capital Gains Incentive Fee paid to Oxford Square Management in Year 3 = 20% × 10% = 2% ____________ (*) The theoretical amounts of returns shown are based on a percentage of our total net assets and assume no leverage.
We bear all other expenses of our operations and transactions, including (without limitation) fees and expenses relating to: • expenses of offering our debt and equity securities; • the investigation and monitoring of our investments, including expenses and travel fees incurred in connection with investment due diligence and on -site visits; • the cost of calculating our net asset value (“NAV”); • the cost of effecting sales and repurchases of shares of our common stock and other securities; • investment management and incentive fees payable pursuant to the Investment Advisory Agreement; • fees payable to third parties relating to, or associated with, making investments and valuing investments (including third -party valuation firms); • transfer agent, trustee and custodial fees; • interest payments and other costs related to our borrowings; • fees and expenses associated with our website, public relations and marketing efforts (including attendance at industry and investor conferences and similar events); • federal and state registration fees; • any exchange listing fees; • U.S. federal, state and local taxes; 16 • independent directors’ fees and expenses, including travel expenses, and other costs of the Board’s meetings and other costs associated with the performance of independent directors’ responsibilities; • brokerage commissions; • costs of preparing and mailing proxy statements, stockholders’ reports and notices, including annual proxy solicitations and stockholder meetings; • costs of preparing government filings, including periodic and current reports with the SEC; • fidelity bond, directors and officers/errors and omissions liability insurance and other insurance premiums; and • direct costs such as printing, mailing, long distance telephone, staff, rent, independent audits and outside legal costs and all other expenses incurred by either Oxford Funds or us in connection with administering our business, including payments under the Administration Agreement that will be based upon our allocable portion of overhead and other expenses incurred by Oxford Funds on our behalf under the Administration Agreement, including a portion of the rent and the compensation and related expenses of our Chief Financial Officer, our accounting support staff and other administrative support personnel.
We bear all other expenses of our operations and transactions, including (without limitation) fees and expenses relating to: • expenses of offering our debt and equity securities; • the investigation and monitoring of our investments, including expenses and travel fees incurred in connection with investment due diligence and on -site visits; • the cost of calculating our net asset value (“NAV”); • the cost of effecting sales and repurchases of shares of our common stock and other securities; • investment management and incentive fees payable pursuant to the Investment Advisory Agreement; • fees payable to third parties relating to, or associated with, making investments and valuing investments (including third -party valuation firms); • transfer agent, trustee and custodial fees; • interest payments and other costs related to our borrowings; • fees and expenses associated with our website, public relations and marketing efforts (including attendance at industry and investor conferences and similar events); • federal and state registration fees; • any exchange listing fees; • U.S. federal, state and local taxes; • independent directors’ fees and expenses, including travel expenses, and other costs of the Board’s meetings and other costs associated with the performance of independent directors’ responsibilities; • brokerage commissions; 16 • costs of preparing and mailing proxy statements, stockholders’ reports and notices, including annual proxy solicitations and stockholder meetings; • costs of preparing government filings, including periodic and current reports with the SEC; • fidelity bond, directors and officers/errors and omissions liability insurance and other insurance premiums; and • direct costs such as printing, mailing, long distance telephone, staff, rent, independent audits and outside legal costs and all other expenses incurred by either Oxford Funds or us in connection with administering our business, including payments under the Administration Agreement that will be based upon our allocable portion of overhead and other expenses incurred by Oxford Funds on our behalf under the Administration Agreement, including a portion of the rent and the compensation and related expenses of our Chief Financial Officer, our accounting support staff and other administrative support personnel.
Rosenthal. • Our financial condition and results of operations will depend on our ability to manage our existing portfolio and future growth effectively. • We operate in a highly competitive market for investment opportunities. • Our business model depends to a significant extent upon strong referral relationships with financial sponsors, and the inability of the senior investment professionals of our investment adviser to maintain or develop these relationships, or the failure of these relationships to generate investment opportunities, could adversely affect our business. • There will be uncertainty as to the value of our portfolio investments, which may impact our net asset value. • Our business is subject to increasingly complex corporate governance, public disclosure and accounting requirements that could adversely affect our business and financial results. 18 • A disruption in the capital markets and the credit markets could negatively affect our business. • We are permitted to borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us. • Regulations governing our operation as a BDC affect our ability to, and the way in which we raise additional capital, which may expose us to risks, including the typical risks associated with leverage. • There are significant potential conflicts of interest between OXSQ and our management team. • Our Board of Directors may change our investment objective, operating policies and strategies without prior notice or stockholder approval.
Rosenthal. • Our financial condition and results of operations will depend on our ability to manage our existing portfolio and future growth effectively. • We operate in a highly competitive market for investment opportunities. • Our business model depends to a significant extent upon strong referral relationships with financial sponsors, and the inability of the senior investment professionals of our investment adviser to maintain or develop these relationships, or the failure of these relationships to generate investment opportunities, could adversely affect our business. • There will be uncertainty as to the value of our portfolio investments, which may impact our net asset value. • Our business is subject to increasingly complex corporate governance, public disclosure and accounting requirements that could adversely affect our business and financial results. • A disruption in the capital markets and the credit markets could negatively affect our business. • We are permitted to borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us. 18 • Regulations governing our operation as a BDC affect our ability to, and the way in which we raise additional capital, which may expose us to risks, including the typical risks associated with leverage. • There are significant potential conflicts of interest between OXSQ and our management team. • Our Board of Directors may change our investment objective, operating policies and strategies without prior notice or stockholder approval.
The Net Investment Income Incentive Fee is then calculated as follows: (i) no Net Investment Income Incentive Fee is payable to Oxford Square Management in any calendar quarter in which the “Pre -Incentive Fee Net Investment Income” does not exceed the “Preferred Return Amount”; (ii) 100% of the “Pre -Incentive Fee Net Investment Income” for such quarter, if any, that exceeds the “Preferred Return Amount” but is less than or equal to a “Catch -Up Amount” determined on a quarterly basis by multiplying 2.1875% by OXSQ’s net asset value at the end of such calendar quarter; and (iii) for any quarter in which the “Pre -Incentive Fee Net Investment Income” exceeds the “Catch -Up Amount,” the Net Investment Income Incentive Fee will be calculated at the rate of 20% of the amount of the “Pre -Incentive Fee Net Investment Income” for such quarter. c.
The Net Investment Income Incentive Fee is then calculated as follows: (i) no Net Investment Income Incentive Fee is payable to Oxford Square Management in any calendar quarter in which the “Pre -Incentive Fee Net Investment Income” does not exceed the “Preferred Return Amount”; 13 (ii) 100% of the “Pre -Incentive Fee Net Investment Income” for such quarter, if any, that exceeds the “Preferred Return Amount” but is less than or equal to a “Catch -Up Amount” determined on a quarterly basis by multiplying 2.1875% by OXSQ’s net asset value at the end of such calendar quarter; and (iii) for any quarter in which the “Pre -Incentive Fee Net Investment Income” exceeds the “Catch -Up Amount,” the Net Investment Income Incentive Fee will be calculated at the rate of 20% of the amount of the “Pre -Incentive Fee Net Investment Income” for such quarter. c.
Refer to “Risk Factors — Risks Relating to our Business and Structure — Regulations governing our operation as a BDC affect our ability to, and the way in which we raise additional capital, which may expose us to risks, including the typical risks associated with leverage.” We may, however, sell our common stock at a price below net asset value per share (i) in connection with a rights offering to our existing stockholders, (ii) with the consent of the majority of our common stockholders, or (iii) under such other circumstances as the SEC may permit.
Refer to “Risk Factors — Risks Relating to our Business and Structure — Regulations governing our operation as a BDC affect our ability to, and the way in which we raise additional capital, which may expose us to risks, including the typical risks associated with leverage.” We may, however, sell our common stock at a price below net asset value per share (i) in connection with a rights offering to our existing stockholders, (ii) with the consent of the majority of our 22 common stockholders, or (iii) under such other circumstances as the SEC may permit.
We may also be prohibited under the 1940 Act from knowingly participating in certain transactions with our affiliates without the prior approval of our directors who are not interested persons and, in some cases, prior approval by the SEC. 22 We are not generally able to sell our common stock at a price below net asset value per share.
We may also be prohibited under the 1940 Act from knowingly participating in certain transactions with our affiliates without the prior approval of our directors who are not interested persons and, in some cases, prior approval by the SEC. We are not generally able to sell our common stock at a price below net asset value per share.
Our day -to-day investment operations are managed by Oxford Square Management. In addition, we reimburse Oxford Funds for an allocable portion of expenses incurred by it on our behalf under the Administration Agreement, including a portion of the rent and the compensation of our Chief Financial Officer, accounting staff and other administrative support personnel.
Our day -to-day investment operations are managed by Oxford Square Management. In addition, we reimburse Oxford Funds for an allocable portion of expenses incurred by it on our behalf under the Administration Agreement, including a portion of the rent and the compensation of our Chief Financial 19 Officer, accounting staff and other administrative support personnel.
For a description of the factors relevant to the changes in the value of the above portfolio investments for the year ended December 31, 2024, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Portfolio Grading.” Set forth below are descriptions of the ten largest portfolio investments as of December 31, 2024: OCP CLO 2024-37, Ltd.
For a description of the factors relevant to the changes in the value of the above portfolio investments for the year ended December 31, 2025, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Portfolio Grading.” Set forth below are descriptions of the ten largest portfolio investments as of December 31, 2025: OCP CLO 2024-37, Ltd.
Many of these entities may have greater financial and managerial resources than we have. For additional information concerning the competitive risks we face, refer to “Item 1A. Risk Factors — Risks Relating to Our Business and Structure — We operate in a highly competitive market for investment opportunities.” 19 EMPLOYEES We have no employees.
Many of these entities may have greater financial and managerial resources than we have. For additional information concerning the competitive risks we face, refer to “Item 1A. Risk Factors — Risks Relating to Our Business and Structure — We operate in a highly competitive market for investment opportunities.” EMPLOYEES We have no employees.
(Taxation) from New York University School of Law. • Joseph Kupka is a Managing Director of Oxford Square Management, and also holds the same position at Oxford Lane Management, the investment adviser to Oxford Lane Capital Corp., Oxford Gate Management, the investment adviser to the Oxford Gate Funds and Oxford Bridge II, LLC, and Oxford Park Management, the investment adviser to Oxford Park Income Fund, Inc.
(Taxation) from New York University School of Law. 4 • Joseph Kupka is a Managing Director of Oxford Square Management, and also holds the same position at Oxford Lane Management, the investment adviser to Oxford Lane Capital Corp., Oxford Gate Management, the investment adviser to the Oxford Gate Funds and Oxford Bridge II, LLC, and Oxford Park Management, the investment adviser to Oxford Park Income Fund, Inc.
Structured Finance Vehicles • review of indenture structures; • review of underlying collateral loans; • analysis of projected future cash flows; and • analysis of compliance with covenants. 6 Contemporaneous with our due diligence process, the investment team presents the investment proposal to our Investment Committee, which currently consists of Messrs. Cohen and Rosenthal.
Structured Finance Vehicles • review of indenture structures; • review of underlying collateral loans; • analysis of projected future cash flows; and • analysis of compliance with covenants. Contemporaneous with our due diligence process, the investment team presents the investment proposal to our Investment Committee, which currently consists of Messrs. Cohen and Rosenthal.
In the event that the second set 11 of calculations produces a higher combined Base Fee and Net Investment Income Incentive Fee for any quarterly period, those combined fees are set to the original (lower) level, calculated pursuant to the Investment Advisory Agreement.
In the event that the second set of calculations produces a higher combined Base Fee and Net Investment Income Incentive Fee for any quarterly period, those combined fees are set to the original (lower) level, calculated pursuant to the Investment Advisory Agreement.
We may also have to include in income other amounts that we have not yet received in cash, such as PIK interest and deferred loan origination fees that are paid after origination of the loan or are paid in non -cash compensation such as warrants or stock.
We 20 may also have to include in income other amounts that we have not yet received in cash, such as PIK interest and deferred loan origination fees that are paid after origination of the loan or are paid in non -cash compensation such as warrants or stock.
On August 16, 2024, 2 we entered into an amended and restated equity distribution agreement (the “Amended and Restated Equity Distribution Agreement”) with Lucid Capital Markets, LLC and Ladenburg Thalmann & Co. Inc., as the sales agents, to add Lucid Capital Markets, LLC as an additional sales agent to the Amended and Restated Equity Distribution Agreement.
On August 16, 2024, we entered into an amended and restated equity distribution agreement (the “Amended and Restated Equity Distribution Agreement”) with Lucid Capital Markets, LLC and Ladenburg Thalmann & Co. Inc., as the sales agents, to add Lucid Capital Markets, LLC as an additional sales agent to the Amended and Restated Equity Distribution Agreement.
Liquidity events may include an initial public offering, a merger or an acquisition of the company, a private sale of our equity interest to a third party, or a purchase of our equity position by the company or one of its stockholders. • Liquidation value of assets.
Liquidity events may include an initial public offering, a merger or an acquisition of the company, a private sale of our equity interest to a third party, or a purchase of our equity position by the company or one of its stockholders. 5 • Liquidation value of assets.
A CLO borrows money by issuing debt securities to investors (including junior debt securities of the type we intend to invest), and the CLO equity (which is also the CLO residual tranche) is the first to bear the risk on the underlying investment.
A CLO borrows money by issuing 1 debt securities to investors (including junior debt securities of the type we intend to invest), and the CLO equity (which is also the CLO residual tranche) is the first to bear the risk on the underlying investment.
Our Investment Committee reviews and approves each of our portfolio investments. Investment Characteristics In identifying corporate debt investments, we seek to ascertain the asset quality as well as the earnings quality of our prospective portfolio companies.
Our Investment Committee reviews and approves each of our portfolio investments. 6 Investment Characteristics In identifying corporate debt investments, we seek to ascertain the asset quality as well as the earnings quality of our prospective portfolio companies.
A “Preferred Return Amount” is calculated on a quarterly basis by multiplying 1.75% by the Company’s net asset value at the end of the immediately preceding calendar quarter. 13 b.
A “Preferred Return Amount” is calculated on a quarterly basis by multiplying 1.75% by the Company’s net asset value at the end of the immediately preceding calendar quarter. b.
In the event that the second set of calculations produces lower combined Base Fee and Net Investment Income Incentive Fee for that quarterly period, those lower combined fees are adopted for that quarterly period.
In the event that the second set of calculations produces lower combined Base Fee and 11 Net Investment Income Incentive Fee for that quarterly period, those lower combined fees are adopted for that quarterly period.
A CLO itself is highly leveraged because it borrows significant 1 amounts of money to acquire the underlying commercial loans in which it invests.
A CLO itself is highly leveraged because it borrows significant amounts of money to acquire the underlying commercial loans in which it invests.
Cohen is a member of the Board of Trustees of Connecticut College. Mr. Cohen received a B.A. in Economics from Connecticut College and an M.B.A. from Columbia University. • Saul B. Rosenthal, our President and Chief Operating Officer, has more than 20 years of experience in the capital markets, with a focus on middle -market transactions. In addition, Mr.
Cohen is a member of the Board of Trustees of Connecticut College. Mr. Cohen received a B.A. in Economics from Connecticut College and an M.B.A. from Columbia University. • Saul B. Rosenthal, our President and Chief Operating Officer, has more than twenty years of experience in the capital markets, with a focus on middle -market transactions. In addition, Mr.
Portfolio Overview We seek to create a portfolio that includes primarily senior secured loans, CLO investments, senior subordinated and junior subordinated debt investments, as well as warrants and other equity instruments we may receive in connection with such debt investments. We generally expect to invest between $5 million and $50 million in each of our portfolio companies.
Portfolio Overview We seek to create a portfolio that includes primarily senior secured loans, CLO investments, senior subordinated and junior subordinated debt investments, as well as warrants and other equity instruments we may receive in connection with such debt investments. We generally expect to invest between $5 million and $25 million in each of our portfolio companies.
In order to qualify as a RIC for U.S. federal income tax purposes, we must, among other things: • at all times during each taxable year, be registered under the 1940 Act as a management company or unit investment trust, or have in effect an election under the 1940 Act to be treated as a BDC; • derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to loans of certain securities, gains from the sale of stock or other securities, net income from certain “qualified publicly traded partnerships,” or other income derived with respect to our business of investing in such stock or securities (the “90% Income Test”); and • diversify our holdings so that at the end of each quarter of the taxable year: • at least 50% of the value of our assets consists of cash, cash equivalents, U.S. government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer; and • no more than 25% of the value of our assets is invested in (i) the securities, other than U.S. government securities or securities of other RICs, of one issuer (ii) the securities, other than securities of other RICs, of two or more issuers that are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses; or (iii) the securities of certain “qualified publicly traded partnerships” (the “Diversification Tests”). 20 We may be required to recognize taxable income in circumstances in which we do not receive cash.
In order to qualify as a RIC for U.S. federal income tax purposes, we must, among other things: • at all times during each taxable year, be registered under the 1940 Act as a management company or unit investment trust, or have in effect an election under the 1940 Act to be treated as a BDC; • derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to loans of certain securities, gains from the sale of stock or other securities, net income from certain “qualified publicly traded partnerships,” or other income derived with respect to our business of investing in such stock or securities (the “90% Income Test”); and • diversify our holdings so that at the end of each quarter of the taxable year: • at least 50% of the value of our assets consists of cash, cash equivalents, U.S. government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer; and • no more than 25% of the value of our assets is invested in (i) the securities, other than U.S. government securities or securities of other RICs, of one issuer (ii) the securities, other than securities of other RICs, of two or more issuers that are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses; or (iii) the securities of certain “qualified publicly traded partnerships” (the “Diversification Tests”).
We generally expect to invest between $5.0 million and $50.0 million in each of our portfolio investments, although this investment size may vary as the size of our capital base changes and market conditions warrant. We invest in both fixed and variable interest rate structures.
We generally expect to invest between $5.0 million and $25.0 million in each of our portfolio investments, although this investment size may vary as the size of our capital base changes and market conditions warrant. We invest in both fixed and variable interest rate structures.
Cohen has also served as Chief Executive Officer of Oxford Gate Management, LLC, or “Oxford Gate Management,” the investment adviser to Oxford Gate Master Fund, LLC, Oxford Gate, LLC and Oxford Gate (Bermuda), LLC (collectively, the “Oxford Gate Funds”), and Oxford Bridge II, LLC. Oxford Bridge II, LLC and the Oxford Gate Funds are private investment funds. Since 2023, Mr.
Cohen has also served as Chief Executive Officer of Oxford Gate Master Fund, LLC, Oxford Gate, LLC and Oxford Gate (Bermuda), LLC (collectively, the “Oxford Gate Funds”), and Oxford Bridge II, LLC and their investment adviser, Oxford Gate Management, LLC, or “Oxford Gate Management.” Oxford Bridge II, LLC and the Oxford Gate Funds are private investment funds. Since 2023, Mr.
In particular, we have expertise in evaluating the investment merits of middle -market companies as well as the structural features of CLO investments, and monitoring the credit risk of such investments after closing until full repayment. • Jonathan H. Cohen, our Chief Executive Officer, has more than 25 years of experience in debt and equity research and investment. Mr.
In particular, we have expertise in evaluating the investment merits of middle -market companies as well as the structural features of CLO investments, and monitoring the credit risk of such investments after closing until full repayment. • Jonathan H. Cohen, our Chief Executive Officer, has more than twenty -five years of experience in debt and equity research and investment. Mr.
Typically, we would not expect to invest in start -up companies. 5 • Clearly defined exit strategy.
Typically, we would not expect to invest in start -up companies. • Clearly defined exit strategy.
We identify opportunities in the CLO market through our network of brokers, dealers, agent banks, collateral mangers and sponsors that we have worked with for several years.
We identify opportunities in the CLO market through our network of brokers, dealers, agent banks, collateral managers and sponsors that we have worked with for several years.
An eligible portfolio company is defined in the 1940 Act as any issuer which: (a) is organized under the laws of, and has its principal place of business in, the United States; (b) is not an investment company (other than a SBIC wholly owned by the BDC) or a company that would be an investment company but for certain exclusions under the 1940 Act; and (c) satisfies any of the following: i. does not have any class of securities that is traded on a national securities exchange or has a class of securities listed on a national securities exchange but has an aggregate market value of outstanding voting and non -voting common equity of less than $250 million; 23 ii. is controlled by a BDC or a group of companies including a BDC and the BDC has an affiliated person who is a director of the eligible portfolio company; or iii. is a small and solvent company having total assets of not more than $4 million and capital and surplus of not less than $2 million.
An eligible portfolio company is defined in the 1940 Act as any issuer which: (a) is organized under the laws of, and has its principal place of business in, the United States; (b) is not an investment company (other than a SBIC wholly owned by the BDC) or a company that would be an investment company but for certain exclusions under the 1940 Act; and (c) satisfies any of the following: i. does not have any class of securities that is traded on a national securities exchange or has a class of securities listed on a national securities exchange but has an aggregate market value of outstanding voting and non -voting common equity of less than $250 million; ii. is controlled by a BDC or a group of companies including a BDC and the BDC has an affiliated person who is a director of the eligible portfolio company; or iii. is a small and solvent company having total assets of not more than $4 million and capital and surplus of not less than $2 million. 23 Control, as defined by the 1940 Act, is presumed to exist where a BDC beneficially owns more than 25% of the outstanding voting securities of the portfolio company.
Cohen has also served as Chief Executive Officer of Oxford Park Income Fund, Inc., a non -diversified closed -end management investment company, and its investment adviser, Oxford Park Management, LLC, or “Oxford Park Management”. Previously, Mr. Cohen managed technology equity research groups at Wit Capital, Merrill Lynch, UBS and Smith Barney. Mr.
Cohen has also served as Chief Executive Officer of Oxford Park Income Fund, Inc., a registered closed -end fund, and its investment adviser, Oxford Park Management, LLC, or “Oxford Park Management”. Previously, Mr. Cohen managed technology equity research groups at Wit Capital, Merrill Lynch, UBS and Smith Barney. Mr.
Our primary current focus is to seek an attractive risk -adjusted total return by investing primarily in corporate debt securities and collateralized loan obligation (“CLO”) structured finance investments that own corporate debt securities.
Our primary current focus is to seek an attractive risk -adjusted total return by investing primarily in corporate debt securities and, to a lesser extent collateralized loan obligation (“CLO”) structured finance investments that own corporate debt securities.
On April 25, 2024, the Board of Directors re -approved the Investment Advisory Agreement at an in -person meeting. The Investment Advisory Agreement will automatically terminate in the event of its assignment. The Investment Advisory Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other. Refer to “Item 1A.
On April 22, 2025, the Board of Directors re -approved the Investment Advisory Agreement at an in -person meeting. The Investment Advisory Agreement will automatically terminate in the event of its assignment. The Investment Advisory Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other. Refer to “Item 1A.
The operation of the incentive fee with respect to our Pre -Incentive Fee Net Investment Income for each quarter is as follows: i. no incentive fee was payable to Oxford Square Management in any calendar quarter in which our Pre -Incentive Fee Net Investment Income did not exceed one fourth of the annual hurdle rate (approximately 8.84% for the 2024 calendar year). ii. 20% of the amount of our Pre -Incentive Fee Net Investment Income, if any, that exceeds one -fourth of the annual hurdle rate (approximately 8.84% for the 2024 calendar year) in any calendar quarter was payable to Oxford Square Management (i.e., once the hurdle rate is reached, 20% of all Pre -Incentive Fee Net Investment Income thereafter was allocated to Oxford Square Management). 3) Capital Gains Incentive Fee .
The operation of the incentive fee with respect to our Pre -Incentive Fee Net Investment Income for each quarter is as follows: i. no incentive fee was payable to Oxford Square Management in any calendar quarter in which our Pre -Incentive Fee Net Investment Income did not exceed one fourth of the annual hurdle rate (approximately 9.38% for the 2025 calendar year). ii. 20% of the amount of our Pre -Incentive Fee Net Investment Income, if any, that exceeds one -fourth of the annual hurdle rate (approximately 9.38% for the 2025 calendar year) in any calendar quarter was payable to Oxford Square Management (i.e., once the hurdle rate is reached, 20% of all Pre -Incentive Fee Net Investment Income thereafter was allocated to Oxford Square Management). 3) Capital Gains Incentive Fee .
The Code of Ethics is available on the EDGAR Database on the SEC’s website at http://www.sec.gov. You may obtain copies of the Code of Ethics, after paying a duplicating fee, by electronic request at the following email address: publicinfo@sec.gov. Our Code of Ethics is also available on our website at http://oxfordsquarecapital.com/.
You may obtain copies of the Code of Ethics, after paying a duplicating fee, by electronic request at the following email address: publicinfo@sec.gov. Our Code of Ethics is also available on our website at http://oxfordsquarecapital.com/.
Code of Ethics and Insider Trading Policy As required by the 1940 Act, we maintain a Code of Ethics and Insider Trading Policy, or “Code of Ethics,” that establishes procedures for personal investments and restricts certain transactions by our personnel. Refer to “Item 1A.
Code of Ethics and Insider Trading Policy As required by the 1940 Act, we maintain a Code of Ethics and Insider Trading Policy, or “Code of Ethics,” that establishes procedures for personal investments and restricts certain transactions by our personnel.
Rosenthal has served as President and a Director of Oxford Lane Capital Corp. (NasdaqGS: OXLC), a registered closed -end fund, and as President of Oxford Lane Management, since 2010. Mr. Rosenthal has also 4 served as President of Oxford Gate Management, the investment adviser to the Oxford Gate Funds and Oxford Bridge II, LLC, since 2015 and 2018, respectively.
Rosenthal has served as President and a Director of Oxford Lane Capital Corp. (NasdaqGS: OXLC), a registered closed -end fund, and as President of Oxford Lane Management, since 2010. Mr. Rosenthal has also served as President of Oxford Gate Management and the Oxford Gate Funds and Oxford Bridge II, LLC, since 2015 and 2018, respectively. Since 2023, Mr.
Since 2023, Mr. Rosenthal has also served as President of Oxford Park Income Fund, Inc., a non-diversified closed-end management investment company, and its investment adviser, Oxford Park Management. Mr. Rosenthal was previously an attorney at the law firm of Shearman & Sterling LLP. Mr. Rosenthal serves on the board of the National Museum of Mathematics. Mr.
Rosenthal has also served as President of Oxford Park Income Fund, Inc., a registered closed-end fund, and its investment adviser, Oxford Park Management. Mr. Rosenthal was previously an attorney at the law firm of Shearman & Sterling LLP. Mr. Rosenthal serves on the board of the National Museum of Mathematics. Mr.
As a percentage of fair value of the total invested portfolio as of December 31, 2024, our portfolio was invested approximately 57.8% in senior secured notes, 40.1% in CLO equity, and 2.1% in equity and other investments. 8 TEN LARGEST PORTFOLIO INVESTMENTS AS OF DECEMBER 31, 2024 Our ten largest portfolio company investments as of December 31, 2024, based on the combined fair value of the debt and equity securities (including CLO side letter related investments) we hold in each portfolio company, were as follows: Portfolio Company Industry December 31, 2024 ($ in millions) Cost (1) Fair Value (1) Fair Value Percentage of Total Portfolio (1) OCP CLO 2024-37, Ltd.
As a percentage of fair value of the total invested portfolio as of December 31, 2025, our portfolio was invested approximately 58.5% in senior secured notes, 37.8% in CLO equity, and 3.7% in equity and other investments. 8 TEN LARGEST PORTFOLIO INVESTMENTS AS OF DECEMBER 31, 2025 Our ten largest portfolio company investments as of December 31, 2025, based on the combined fair value of the debt and equity securities (including CLO side letter related investments) we hold in each portfolio company, were as follows: Cost (1) December 31, 2025 ($ in millions) Portfolio Company Industry Fair Value (1) Fair Value Percentage of Total Portfolio OCP CLO 2024-37, Ltd.
Treasury Notes, up to a maximum annual hurdle rate of 10.0%. The annual hurdle rates for the 2024, 2023 and 2022 calendar years, calculated as of December 31, were approximately 8.84%, 8.99%, and 6.26%, respectively, under the terms of the Investment Advisory Agreement.
Treasury Notes, up to a maximum annual hurdle rate of 10.0%. The annual hurdle rates for the 2025, 2024 and 2023 calendar years, calculated as of December 31, were approximately 9.38%, 8.84%, and 8.99%, respectively, under the terms of the Investment Advisory Agreement.
The 6.25% Unsecured Notes bear interest at a rate of 6.25% per year payable quarterly on January 31, April 30, July 31, and October 31 of each year.
The 7.75% Unsecured Notes bear interest at a rate of 7.75% per year payable quarterly on January 31, April 30, July 31, and October 31, of each year.
OCP CLO 2024 -37 , Ltd. is a collateralized loan obligation investing primarily in U.S. -based senior secured loans. As of December 31, 2024, approximately $27.0 million remained outstanding on our investment. Dryden 43 Senior Loan Fund Dryden 43 Senior Loan Fund is a collateralized loan obligation investing primarily in U.S. -based senior secured loans.
OCP CLO 2024 -37 , Ltd. is a collateralized loan obligation investing primarily in U.S. -based senior secured loans. As of December 31, 2025, approximately $27.0 million remained outstanding on our investment. Generate CLO 10, Ltd. Generate CLO 10, Ltd. is a collateralized loan obligation investing primarily in U.S. -based senior secured loans.
For example: • pursuant to Rule 13a -14 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), our Chief Executive Officer and Chief Financial Officer must certify the accuracy of the financial statements contained in our periodic reports; • pursuant to Item 307 of Regulation S -K , our periodic reports must disclose our conclusions about the effectiveness of our disclosure controls and procedures; • pursuant to Rule 13a -15 of the Exchange Act, our management must prepare a report regarding its assessment of our internal control over financial reporting; and • pursuant to Item 308 of Regulation S -K and Rule 13a -15 of the Exchange Act, our periodic reports must disclose whether there were significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. 24 The Sarbanes -Oxley Act requires us to review our current policies and procedures to determine whether we comply with the Sarbanes -Oxley Act and the regulations promulgated thereunder.
For example: • pursuant to Rule 13a -14 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), our Chief Executive Officer and Chief Financial Officer must certify the accuracy of the financial statements contained in our periodic reports; • pursuant to Item 307 of Regulation S -K , our periodic reports must disclose our conclusions about the effectiveness of our disclosure controls and procedures; • pursuant to Rule 13a -15 of the Exchange Act, our management must prepare a report regarding its assessment of our internal control over financial reporting and, to the extent that we are a “large accelerated filer” or an “accelerated filer” under Rule 12b -2 under the Exchange Act, must obtain an audit of the effectiveness of internal control over financial reporting performed by our independent registered public accounting firm; and • pursuant to Item 308 of Regulation S -K and Rule 13a -15 of the Exchange Act, our periodic reports must disclose whether there were significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. 24 The Sarbanes -Oxley Act requires us to review our current policies and procedures to determine whether we comply with the Sarbanes -Oxley Act and the regulations promulgated thereunder.
Refer to “— Regulation as a Business Development Company.” In addition, we have elected to be treated for U.S. federal income tax purposes, and intend to qualify annually, as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). Set forth below is a chart detailing our organizational structure.
Refer to “— Regulation as a Business Development Company.” In addition, we have elected to be treated for U.S. federal income tax purposes, and intend to qualify annually, as a RIC under the Code. Set forth below is a chart detailing our organizational structure.
This environment presented corporate loan and CLO managers with the opportunity to buy performing assets in the primary and secondary loan markets with sufficient risk adjusted returns, ultimately accruing to the benefit of loan and CLO investments.
This environment presented corporate loan and CLO managers with the opportunity to buy performing assets in the primary and secondary loan markets with sufficient risk adjusted returns.
We sold a total of 10,132,282 shares of common stock pursuant to the ATM offering during the year ended December 31, 2024. The total amount of capital raised net of underwriting fees and offering costs was approximately $29.2 million during the year ended December 31, 2024. Organizational and Regulatory Structure Our investment activities are managed by Oxford Square Management.
We sold a total of 15,910,780 shares of common stock pursuant to the ATM offering during the year ended December 31, 2025. The total amount of capital raised net of underwriting fees and offering costs was approximately $34.8 million during the year ended December 31, 2025. 2 Organizational and Regulatory Structure Our investment activities are managed by Oxford Square Management.
The 6.25% Unsecured Notes are listed on the NASDAQ Global Select Market under the trading symbol “OXSQZ.” 5.50% Unsecured Notes On May 20, 2021, we completed an underwritten public offering of approximately $80.5 million in aggregate principal amount of 5.50% unsecured notes due 2028, or the “5.50% Unsecured Notes.” The 5.50% Unsecured Notes will mature on July 31, 2028, and may be redeemed in whole or in part at any time or from time to time at our option (on or after May 31, 2024).
In connection with the September 19, 2025 redemption, the 6.25% Unsecured Notes were delisted from the NASDAQ Global Select Market. 5.50% Unsecured Notes On May 20, 2021, we completed an underwritten public offering of approximately $80.5 million in aggregate principal amount of 5.50% unsecured notes due 2028, or the “5.50% Unsecured Notes.” The 5.50% Unsecured Notes will mature on July 31, 2028, and may be redeemed in whole or in part at any time or from time to time at our option (on or after May 31, 2024).
Hypothetical Scenario 2 Quarterly Investment income (including interest, dividends, fees, etc.) = 2.50% Quarterly Hurdle rate = 1.75% Base Fee (1) = 0.375% Quarterly Other expenses (legal, accounting, custodian, transfer agent, etc.) = 0.2% 14 Pre -Incentive Fee Net Investment Income (investment income – (Base Fee + other expenses)) = 1.925% The Total Return Requirement is met (no Net Investment Income Incentive Fee would be payable if the Total Return Requirement were not met).
Hypothetical Scenario 2 Quarterly Investment income (including interest, dividends, fees, etc.) = 2.50% Quarterly Hurdle rate = 1.75% Base Fee (1) = 0.375% Quarterly Other expenses (legal, accounting, custodian, transfer agent, etc.) = 0.2% Pre -Incentive Fee Net Investment Income (investment income – (Base Fee + other expenses)) = 1.925% The Total Return Requirement is met (no Net Investment Income Incentive Fee would be payable if the Total Return Requirement were not met). 14 Incentive fee = 100%* Pre -Incentive Fee Net Investment Income in excess of the hurdle rate but less than 2.1875% and 20% of any Pre -Incentive Fee Net Investment Income thereafter. = 100%* (1.925% – 1.75%) = 100%* 0.175% = 0.175% Pre -Incentive Fee Net Investment Income exceeds the hurdle rate but is less than 2.1875%.
ATM Offering On August 22, 2023, we entered into Amendment No. 1 to the Equity Distribution Agreement dated August 1, 2019 with Ladenburg Thalmann & Co. through which we may offer for sale, from time to time, up to $150.0 million of our common stock through an At -the-Market (“ATM”) offering.
The 7.75% Unsecured Notes are listed on the NASDAQ Global Select Market under the trading symbol “OXSQH.” ATM Offering On August 22, 2023, we entered into Amendment No. 1 to the Equity Distribution Agreement dated August 1, 2019 with Ladenburg Thalmann & Co. through which we may offer for sale, from time to time, up to $150.0 million of our common stock through an At -the-Market (“ATM”) offering.
As of December 31, 2024, approximately $2.2 million remained outstanding on our investment in the first lien first out senior secured notes, approximately $3.0 million remained outstanding on our investment in the first lien second out senior secured notes and $15.0 million remained outstanding on our investment in the second lien senior secured notes.
As of December 31, 2025, approximately $2.2 million remained outstanding on our investment in the first lien first out senior secured notes, approximately $3.0 million remained outstanding on our investment in the first lien second out senior secured notes and $17.0 million remained outstanding on our investment in the second lien senior secured notes. Global Tel Link Corp.
Verifone Systems, Inc. develops technology that enables electronic payment transactions and value -added services at the point of sale. As of December 31, 2024, approximately $14.8 million remained outstanding on our investment in the first lien senior secured notes. HealthChannels, Inc.
As of December 31, 2025, approximately $30.0 million remained outstanding on our investment. Verifone, Inc. (f/k/a Verifone Systems, Inc.) Verifone, Inc. develops technology that enables electronic payment transactions and value -added services at the point of sale. As of December 31, 2025, approximately $13.2 million remained outstanding on our investment in the first lien senior secured notes.
Subject to the overall supervision of our Board, Oxford Square Management manages our day -to-day operations and provides investment advisory services to us.
Oxford Square Management is registered as an investment adviser under the Advisers Act. Subject to the overall supervision of our Board, Oxford Square Management manages our day -to-day operations and provides investment advisory services to us.
Credit quality in the loan market deteriorated in 2024 as exhibited by an increase in the default rate to 4.70% at the end of 2024 versus 3.84% at the end of 2023 when including traditional defaults and out -of-court restructurings, exchanges, and sub -par buybacks.
Credit quality in the loan market remains challenged but improved in 2025 as exhibited by a decrease in the default rate to 3.35% at the end of 2025 versus 4.70% at the end of 2024 when including traditional defaults and 3 out -of-court restructurings, exchanges, and sub -par buybacks.
The following is a representative list of the industries in which we have invested: • Aerospace and Defense • Business Services • Food and Beverage • Healthcare • Industrials • Materials • Software • Telecommunication Services • Structured Finance • IT Consulting During the fiscal year ended December 31, 2024, we purchased approximately $112.2 million of investments, comprised of approximately $76.3 million in senior secured notes, approximately $35.2 million in CLO equity and approximately $0.7 million in equity and other investments.
The following is a representative list of the industries in which we currently have investments: • Artificial Intelligence • Business Services • Food and Beverage • Healthcare • Industrials • Materials • Software • Telecommunication Services • Structured Finance • IT Consulting During the fiscal year ended December 31, 2025, we purchased approximately $92.1 million of investments, comprised of approximately $57.9 million in senior secured notes, approximately $30.2 million in CLO equity and approximately $4.0 million in equity and other investments.
Rosenthal.” Indemnification The Investment Advisory Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of their respective duties or by reason of the reckless disregard of their respective duties and obligations, Oxford Square Management and its officers, managers, agents, employees, controlling persons, members and any other person or entity affiliated with it, including without limitation Oxford Funds, are entitled to indemnification from OXSQ for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of Oxford Square Management’s services under the Investment Advisory Agreement or otherwise as an investment adviser of OXSQ.
Risk Factors — Risks relating to our business and structure — Our investment adviser can resign on 60 days’ notice, and we may not be able to find a suitable replacement within that time, resulting in a disruption in our operations that could adversely affect our financial condition, business and results of operations.” Indemnification The Investment Advisory Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of their respective duties or by reason of the reckless disregard of their respective duties and obligations, Oxford Square Management and its officers, managers, agents, employees, controlling persons, members and any other person or entity affiliated with it, including without limitation Oxford Funds, are entitled to indemnification from OXSQ for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of Oxford Square Management’s services under the Investment Advisory Agreement or otherwise as an investment adviser of OXSQ.
The principal address of Oxford Square Management and of Oxford Funds is 8 Sound Shore Drive, Suite 255, Greenwich, Connecticut 06830. 17 Oxford Funds is the managing member of Oxford Square Management. Charles M. Royce, a member of our Board, has a minority, non -controlling interest in Oxford Square Management.
The principal address of Oxford Square Management and of Oxford Funds is 8 Sound Shore Drive, Suite 255, Greenwich, Connecticut 06830. Oxford Funds is the managing member of Oxford Square Management. Charles M.
You may obtain our annual reports on Form 10 -K , our quarterly reports on Form 10 -Q , and our current reports on Form 8 -K on our website at http://oxfordsquarecapital.com/ free of charge as soon as reasonably practicable after we file such reports electronically with the SEC. 25 NASDAQ Global Select Market Requirements We have adopted certain policies and procedures intended to comply with the NASDAQ Global Select Market’s corporate governance rules.
You may obtain our annual reports on Form 10 -K , our quarterly reports on Form 10 -Q , and our current reports on Form 8 -K on our website at http://oxfordsquarecapital.com/ free of charge as soon as reasonably practicable after we file such reports electronically with the SEC.
The 6.50% Unsecured Notes were listed on the NASDAQ Global Select Market under the trading symbol “OXSQL.” 6.25% Unsecured Notes On April 3, 2019, we completed an underwritten public offering of approximately $44.8 million in aggregate principal amount of our 6.25% unsecured notes due 2026, or the “6.25% Unsecured Notes.” The 6.25% Unsecured Notes will mature on April 30, 2026, and may be redeemed in whole or in part at any time or from time to time at our option (on or after April 30, 2022).
The 5.50% Unsecured Notes are listed on the NASDAQ Global Select Market under the trading symbol “OXSQG.” 7.75% Unsecured Notes On August 7, 2025, we completed an underwritten public offering of approximately $74.8 million in aggregate principal amount of 7.75% unsecured notes due 2030, or the “7.75% Unsecured Notes.” The 7.75% Unsecured Notes will mature on July 31, 2030, and may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after July 31, 2027.
ADMINISTRATION AGREEMENT Pursuant to a separate Administration Agreement, Oxford Funds furnishes us with office facilities, together with equipment and clerical, bookkeeping and record keeping services at such facilities.
Royce, a member of our Board, has a minority, non -controlling interest in Oxford Square Management. 17 ADMINISTRATION AGREEMENT Pursuant to a separate Administration Agreement, Oxford Funds furnishes us with office facilities, together with equipment and clerical, bookkeeping and record keeping services at such facilities.
In addition, the costs associated with our borrowings, including any increase in the advisory fee payable to our investment adviser, Oxford Square Management, LLC (“Oxford Square Management”), will be borne by our common stockholders. 6.50% Unsecured Notes On April 12, 2017, we completed an underwritten public offering of approximately $64.4 million in aggregate principal amount of our 6.50% unsecured notes due 2024, or the “6.50% Unsecured Notes.” On July 24, 2023, the Company redeemed $40.0 million in aggregate principal amount of the 6.50% Unsecured Notes.
In addition, the costs associated with our borrowings, including any increase in the advisory fee payable to our investment adviser, Oxford Square Management, LLC (“Oxford Square Management”), will be borne by our common stockholders. 6.25% Unsecured Notes On April 3, 2019, we completed an underwritten public offering of approximately $44.8 million in aggregate principal amount of our 6.25% unsecured notes due 2026, or the “6.25% Unsecured Notes.” The 6.25% Unsecured Notes would have matured on April 30, 2026, and could have been redeemed in whole or in part at any time or from time to time at our option (on or after April 30, 2022).
As of December 31, 2024, approximately $11.0 million remained outstanding on our investment in the second lien senior secured notes. Dodge Data & Analytics, LLC Dodge Data & Analytics, LLC offers analytics and software -based workflow integration solutions for the construction industry.
As of December 31, 2025, approximately $29.6 million remained outstanding on our investment. 9 Dodge Construction Network LLC (f/k/a Dodge Data & Analytics, LLC) Dodge Construction Network LLC offers analytics and software -based workflow integration solutions for the construction industry.
As of December 31, 2024, approximately $47.3 million remained outstanding on our investment. Carlyle Global Market Strategies CLO 2021-6, Ltd. Carlyle Global Market Strategies CLO 2021 -6 , Ltd. is a collateralized loan obligation investing primarily in U.S. -based senior secured loans. As of December 31, 2024, approximately $29.6 million remained outstanding on our investment. Verifone Systems, Inc.
Dryden 43 Senior Loan Fund Dryden 43 Senior Loan Fund is a collateralized loan obligation investing primarily in U.S. -based senior secured loans. As of December 31, 2025, approximately $47.3 million remained outstanding on our investment. Michael Baker International, Inc.
We will continue to monitor our compliance with all future listing standards that are approved by the SEC and will take actions necessary to ensure that we are in compliance therewith.
NASDAQ Global Select Market Requirements We have adopted certain policies and procedures intended to comply with the NASDAQ Global Select Market’s corporate governance rules. We will continue to monitor our compliance with all future listing standards that are approved by the SEC and will take actions necessary to ensure that we are in compliance therewith. 25
We are a Maryland corporation and a closed -end , non -diversified management investment company that has elected to be regulated as a BDC under the 1940 Act. As a BDC, we are required to meet certain regulatory tests, including the requirement to invest at least 70% of our total assets in eligible portfolio companies.
As a BDC, we are required to meet certain regulatory tests, including the requirement to invest at least 70% of our total assets in eligible portfolio companies.
Octagon Investment Partners 49, Ltd. is a collateralized loan obligation investing primarily in U.S. -based senior secured loans. As of December 31, 2024, approximately $26.4 million remained outstanding on our investment. Convergint Technologies, LLC Convergint Technologies, LLC offers security, communications, installation, fire alarm safety, and building automation systems to commercial offices, residential, government, healthcare, and educational industries.
Convergint Technologies, LLC Convergint Technologies, LLC offers security, communications, installation, fire alarm safety, and building automation systems to commercial offices, residential, government, healthcare, and educational industries. As of December 31, 2025, approximately $10.0 million remained outstanding on our investment in the second lien senior secured notes.
Under the investment advisory agreement, we have agreed to pay Oxford Square Management an annual base advisory fee based on our gross assets as well as an incentive fee based on our performance. Refer to “— Investment Advisory Agreement.” We were founded in July 2003 and completed an initial public offering of shares of our common stock in November 2003.
Under the Investment Advisory Agreement (as defined below), we have agreed to pay Oxford Square Management an annual base advisory fee based on our gross assets as well as an incentive fee based on our performance.
Failure to Qualify as a RIC If we were unable to qualify for treatment as a RIC, and certain cure provisions are not met, we would be subject to tax on all of our taxable income at regular corporate rates, regardless of whether we make any distributions to our stockholders.
Income inclusions from a QEF or a CFC will be “good income” for purposes of the 90% Income Test provided that they are derived in connection with our business of investing in stocks and securities or the QEF or the CFC distribute such income to us in the same taxable year to which the income is included in our income. 21 Failure to Qualify as a RIC If we were unable to qualify for treatment as a RIC, and certain cure provisions are not met, we would be subject to tax on all of our taxable income at regular corporate rates, regardless of whether we make any distributions to our stockholders.
Information contained on our website or on the SEC’s website about us is not incorporated into this report and you should not consider information contained on our website or on the SEC’s website to be part of this report. 3 MARKET OVERVIEW AND OPPORTUNITY The broader corporate loan and CLO equity markets displayed modest strength in 2024.
The address of the SEC’s website is http://www.sec.gov . Information contained on our website or on the SEC’s website about us is not incorporated into this report and you should not consider information contained on our website or on the SEC’s website to be part of this report.
On September 11, 2023, the Company redeemed $10.0 million in aggregate principal amount of the 6.50% Unsecured Notes. On November 3, 2023, the Company redeemed $7.0 million in aggregate principal amount of the 6.50% Unsecured Notes. On December 21, 2023, the Company redeemed the remaining $7.4 million aggregate principal amount of 6.50% Unsecured Notes.
On July 18, 2025, the Company redeemed $10.0 million in aggregate principal amount of the 6.25% Unsecured Notes. On September 19, 2025, the Company redeemed the remaining $24.8 million in aggregate principal amount of the 6.25% Unsecured Notes.
Structured Finance $ 22.8 $ 22.7 8.7 % Dryden 43 Senior Loan Fund Structured Finance 24.9 17.0 6.5 % Carlyle Global Market Strategies CLO 2021-6, Ltd. Structured Finance 19.0 16.9 6.5 % Verifone Systems, Inc. Business Services 14.6 13.8 5.3 % HealthChannels, Inc. (f/k/a ScribeAmerica, LLC) Healthcare 18.5 12.8 4.9 % Octagon Investment Partners 49, Ltd.
Structured Finance $ 24.0 $ 18.1 7.2 % Generate CLO 10, Ltd. Structured Finance 21.7 17.7 7.0 % Verifone, Inc. (f/k/a Verifone Systems, Inc.) Business Services 12.1 12.5 5.0 % Carlyle Global Market Strategies CLO 2021-6, Ltd.
The 6.50% Unsecured Notes bore interest at a rate of 6.50% per year payable quarterly on March 30, June 30, September 30, and December 30 of each year.
The 6.25% Unsecured Notes bore interest at a rate of 6.25% per year payable quarterly on January 31, April 30, July 31, and October 31 of each year. On June 13, 2025, the Company redeemed $10.0 million in aggregate principal amount of the 6.25% Unsecured Notes.
As of December 31, 2024, approximately $10.0 million remained outstanding on our investment in the first lien senior secured notes. INVESTMENT ADVISORY AGREEMENT Management Services Oxford Square Management serves as our investment adviser. Oxford Square Management is registered as an investment adviser under the Advisers Act.
Smartronix, LLC Smartronix, LLC offers cloud computing, cyber security, data and analytics, digital transformation, server and application, robotic process automation, modeling, simulation, and training solutions. As of December 31, 2025, approximately $9.9 million remained outstanding on our investment in the first lien senior secured notes. INVESTMENT ADVISORY AGREEMENT Management Services Oxford Square Management serves as our investment adviser.
The S&P/LSTA Leveraged Loan Index increased from a price of 96.21% at the end of December 2023 to 97.33% at the end of December 2024. During 2024, lower credit quality loans outperformed higher credit quality loans. For the full year, BB rated loan prices increased 0.53%, B rated loan prices increased 0.58%, and CCC rated loan prices increased 1.59%.
MARKET OVERVIEW AND OPPORTUNITY The broader corporate loan and CLO equity markets displayed weakness in 2025. The Morningstar/LSTA US Leveraged Loan Index decreased from a price of 97.33% at the end of December 2024 to 96.64% at the end of December 2025. During 2025, higher credit quality loans significantly outperformed lower credit quality loans.
Risk Factors — Risks Relating to our Business and Structure — There are significant potential conflicts of interest between OXSQ and our management team.” Our Code of Ethics generally does not permit investments by our employees in securities that may be purchased or held by us.
Our Code of Ethics generally does not permit investments by our employees in securities that may be purchased or held by us. The Code of Ethics is available on the EDGAR Database on the SEC’s website at http://www.sec.gov.
Removed
For all redemptions, the notes were fully repaid at par. In connection with the December 21, 2023 redemption, the 6.50% Unsecured Notes were delisted from the NASDAQ Global Select Market.
Added
Refer to “— Investment Advisory Agreement.” We were founded in July 2003 and completed an initial public offering of shares of our common stock in November 2003. We are a Maryland corporation and a closed -end , non -diversified management investment company that has elected to be regulated as a BDC under the 1940 Act.
Removed
The 6.50% Unsecured Notes would have matured on March 30, 2024, and were redeemable in whole or in part at any time or from time to time at our option (on or after March 30, 2020).
Added
For the full year, BB rated loan prices decreased 0.67%, B rated loan prices decreased 0.47%, and CCC rated loan prices decreased 5.86%. We believe that the loan market’s performance during 2025 was driven by investment outflows from the loan asset class and macroeconomic headwinds, partly offset by robust issuance in the CLO asset class.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe Due Diligence Requirements further require that prior to holding a securitization position, an Institutional Investor, other than the originator, sponsor or original lender, carry out a due diligence assessment which enables it to assess the risks involved, including but not limited to (a) the risk characteristics of the individual securitization position and the underlying exposures; and (b) all the structural features of the securitization that can materially impact the performance of the securitization position, including the contractual priorities of payment and priority of payment -related triggers, credit enhancements, liquidity enhancements, market value triggers, and transaction -specific definitions of default. 43 Any Institutional Investor that fails to comply with the applicable Due Diligence Requirements in respect of a securitization position which it holds may become subject to a range of regulatory sanctions including, in the case of a credit institution, investment firm, insurer or reinsurer, a punitive regulatory capital charge with respect to such securitization position, or, in certain other cases, a requirement to take corrective action.
Biggest changeThe Due Diligence Requirements further require that prior to holding a securitization position, an Institutional Investor, other than the originator, sponsor or original lender, carry out a due diligence assessment which enables it to assess the risks involved, including but not limited to (a) the risk characteristics of the individual securitization position and the underlying exposures; and (b) all the structural features of the securitization that can materially 43 impact the performance of the securitization position, including the contractual priorities of payment and priority of payment -related triggers, credit enhancements, liquidity enhancements, market value triggers, and transaction -specific definitions of default.
In the event our Board of Directors opts to reclassify a portion of our unissued shares of common stock into a class of preferred stock, those preferred 32 shares would have a preference over our common stock with respect to distributions and liquidation. The cost of any such reclassification would be borne by our existing common stockholders.
In the event our Board of Directors opts to reclassify a portion of our unissued shares of common stock into a class of preferred stock, those preferred shares 32 would have a preference over our common stock with respect to distributions and liquidation. The cost of any such reclassification would be borne by our existing common stockholders.
If we are unable to do so quickly, our operations are likely to experience a disruption, our financial condition, business and results of operations as well as our ability to pay distributions are likely to be adversely affected and the market price of our shares may decline.
If we are unable to do so quickly, our operations are likely to experience a disruption, our financial condition, business and results of operations as well as our ability to pay distributions are likely to be adversely affected and the market price of our shares may decline.
The due diligence requirements of Article 5 of the EU Securitization Regulation (the “EU Due Diligence Requirements”) apply to each investor that is an “institutional investor” (as such term is defined in the EU Securitization Regulation), being an investor which is one of the following: (a) an insurance undertaking as defined in Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking -up and pursuit of the business of Insurance and Reinsurance (Solvency II) (recast) (“Solvency II”); (b) a reinsurance undertaking as defined in Solvency II; (c) subject to certain conditions and exceptions, an institution for occupational retirement provision falling within the scope of Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision (IORPs) (the “IORP Directive”), or an investment manager or an authorized entity appointed by an institution for occupational retirement provision pursuant to the IORP Directive; (d) an alternative investment fund manager (“AIFM”) as defined in Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers that manages and/or markets alternative investment funds in the EU; (e) an undertaking for the collective investment in transferable securities (“UCITS”) management company, as defined in Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (the “UCITS Directive”); (f) an internally managed UCITS, which is an investment company authorized in accordance with the UCITS Directive and which has not designated a management company authorized under the UCITS Directive for its management; or (g) a credit institution as defined in Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms (the “CRR”) for the purposes of the CRR, or an investment firm as defined in the CRR, in each case, such investor an “EU Institutional Investor”.
The due diligence requirements of Article 5 of the EU Securitization Regulation (the “EU Due Diligence Requirements”) apply to each investor that is an “institutional investor” (as such term is defined in the EU Securitization Regulation), being an investor which is one of the following: (a) an insurance undertaking as defined in Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking -up and pursuit of the business of Insurance and Reinsurance (Solvency II) (recast) (“Solvency II”); (b) a reinsurance undertaking as defined in Solvency II; (c) subject to certain conditions and exceptions, an institution for occupational retirement provision falling within the scope of Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision (IORPs) (the “IORP Directive”), or an investment manager or an authorized entity appointed by an institution for occupational retirement provision pursuant to the IORP Directive; (d) an alternative investment fund manager (“AIFM”) as defined in Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers that manages and/or markets alternative investment funds in the EU; (e) an undertaking for the collective investment in transferable securities (“UCITS”) management company, as defined in Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (the “UCITS Directive”); (f) an internally managed UCITS, which is an investment company authorized in accordance with the UCITS Directive and which has not designated a management company authorized under the UCITS Directive for its management; or (g) a credit institution as defined in Regulation (EU) 42 No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms (the “CRR”) for the purposes of the CRR, or an investment firm as defined in the CRR, in each case, such investor an “EU Institutional Investor”.
The due diligence requirements of Article 5 of the UK Securitization Regulation (the “UK Due Diligence Requirements” and, together with the EU Due Diligence Requirements, the “Due Diligence Requirements”) apply to each investor that is an “institutional investor” (as such term is defined in the UK Securitization Regulation), 42 being an investor which is one of the following: (a) an insurance undertaking as defined in the Financial Services and Markets Act 2000 (as amended, the “FSMA”); (b) a reinsurance undertaking as defined in the FSMA; (c) an occupational pension scheme as defined in the Pension Schemes Act 1993 that has its main administration in the UK, or a fund manager of such a scheme appointed under the Pensions Act 1995 that, in respect of activity undertaken pursuant to that appointment, is authorized under the FSMA; (d) an AIFM (as defined in the Alternative Investment Fund Managers Regulations 2013 (the “AIFM Regulations”)) which markets or manages AIFs (as defined in the AIFM Regulations) in the UK; (e) a management company as defined in the FSMA; (f) a UCITS as defined by the FSMA, which is an authorized open ended investment company as defined in the FSMA; (g) a FCA investment firm as defined by the CRR as it forms part of UK domestic law by virtue of EUWA (the “UK CRR”); or (h) a CRR investment firm as defined in the UK CRR, in each case, such investor a “UK Institutional Investor” and, such investors together with EU Institutional Investors, “Institutional Investors”.
The due diligence requirements of Article 5 of the UK Securitization Regulation (the “UK Due Diligence Requirements” and, together with the EU Due Diligence Requirements, the “Due Diligence Requirements”) apply to each investor that is an “institutional investor” (as such term is defined in the UK Securitization Regulation), being an investor which is one of the following: (a) an insurance undertaking as defined in the Financial Services and Markets Act 2000 (as amended, the “FSMA”); (b) a reinsurance undertaking as defined in the FSMA; (c) an occupational pension scheme as defined in the Pension Schemes Act 1993 that has its main administration in the UK, or a fund manager of such a scheme appointed under the Pensions Act 1995 that, in respect of activity undertaken pursuant to that appointment, is authorized under the FSMA; (d) an AIFM (as defined in the Alternative Investment Fund Managers Regulations 2013 (the “AIFM Regulations”)) which markets or manages AIFs (as defined in the AIFM Regulations) in the UK; (e) a management company as defined in the FSMA; (f) a UCITS as defined by the FSMA, which is an authorized open ended investment company as defined in the FSMA; (g) a FCA investment firm as defined by the CRR as it forms part of UK domestic law by virtue of EUWA (the “UK CRR”); or (h) a CRR investment firm as defined in the UK CRR, in each case, such investor a “UK Institutional Investor” and, such investors together with EU Institutional Investors, “Institutional Investors”.
These factors include, but are not limited to, the following: • price and volume fluctuations in the overall stock market from time to time; • significant volatility in the market price and trading volume of securities of regulated investment companies, BDCs or other financial services companies; • exclusion of our common stock from certain indices could reduce the ability of certain investment funds to own our common stock and put short -term selling pressure on our common stock; • changes in regulatory policies or tax guidelines with respect to regulated investment companies or BDCs; • actual or anticipated changes in our earnings or fluctuations in our operating results or changes in the expectations of securities analysts; • general economic conditions and trends; • loss of a major funding source; or • departures of key personnel.
These factors include, but are not limited to, the following: • price and volume fluctuations in the overall stock market from time to time; • significant volatility in the market price and trading volume of securities of regulated investment companies, BDCs or other financial services companies; • exclusion of our common stock from certain indices could reduce the ability of certain investment funds to own our common stock and put short -term selling pressure on our common stock; • changes in regulatory policies or tax guidelines with respect to regulated investment companies or BDCs; • actual or anticipated changes in our earnings or fluctuations in our operating results or changes in the expectations of securities analysts; • general economic conditions and trends; 49 • loss of a major funding source; or • departures of key personnel.
Refer to “Risks relating to our business and structure — Our business and operation could be negatively affected if we become subject to any additional securities litigation or stockholder activism, which could cause us to incur significant expense, hinder execution of our investment strategy and impact our stock price.” 49 Our shares of common stock have traded at a discount from net asset value and may do so in the future.
Refer to “Risks relating to our business and structure — Our business and operation could be negatively affected if we become subject to any additional securities litigation or stockholder activism, which could cause us to incur significant expense, hinder execution of our investment strategy and impact our stock price.” Our shares of common stock have traded at a discount from net asset value and may do so in the future.
These 48 risks include changes in exchange control regulations, political and social instability, expropriation, imposition of foreign taxes, less liquid markets and less available information than is generally the case in the U.S., higher transaction costs, less government supervision of exchanges, brokers and issuers, less developed bankruptcy laws, difficulty in enforcing contractual obligations, lack of uniform accounting and auditing standards and greater price volatility.
These risks include changes in exchange control regulations, political and social instability, expropriation, imposition of foreign taxes, less liquid markets and less available information than is generally the case in the U.S., higher transaction costs, less government supervision of exchanges, brokers and issuers, less developed bankruptcy laws, difficulty in enforcing contractual obligations, lack of uniform accounting and auditing standards and greater price volatility.
It is not possible to predict the duration or extent of longer -term consequences of these conflicts, which could include further sanctions, retaliatory and escalating measures, embargoes, regional instability, geopolitical shifts and adverse effects on or involving macroeconomic conditions, the energy sector, supply chains, inflation, security conditions, currency 53 exchange rates and financial markets around the globe.
It is not possible to predict the duration or extent of longer -term consequences of these conflicts, which could include further sanctions, retaliatory and escalating measures, embargoes, regional instability, geopolitical shifts and adverse effects on or involving macroeconomic conditions, the energy sector, supply chains, inflation, security conditions, currency exchange rates and financial markets around the globe.
We will not enter into any agreements unless and 35 until we are satisfied that doing so will not raise concerns under the 1940 Act or, if such concerns exist, we have taken appropriate actions to seek board review and approval or exemptive relief for such transaction. Our Board of Directors reviews these procedures on an annual basis.
We will not enter into any agreements unless and until we are satisfied that doing so will not raise concerns under the 1940 Act or, if such concerns exist, we have taken appropriate actions to seek board review and approval or exemptive relief for such transaction. Our Board of Directors reviews these procedures on an annual basis.
We depend on the effectiveness of the information and cybersecurity policies, procedures, and capabilities maintained by our affiliates and our and their respective third -party service providers to protect their computer and telecommunications systems and the data that reside on or are transmitted through them. Substantial costs may be incurred in order to prevent any cyber incidents in the future.
We depend on the effectiveness of the information and cybersecurity policies, procedures, and capabilities maintained by our affiliates and our and their respective third -party service providers to protect their computer and telecommunications systems and the data that reside on or are transmitted through them. 55 Substantial costs may be incurred in order to prevent any cyber incidents in the future.
We and Oxford Square Management, through its managing member, Oxford Funds, will need to continue to hire, train, supervise and manage new employees. Failure to manage our future growth effectively could have a material adverse effect on our business, financial condition and results of operations. 26 We operate in a highly competitive market for investment opportunities.
We and Oxford Square Management, through its managing member, Oxford Funds, will need to continue to hire, train, supervise and manage new employees. Failure to manage our future growth effectively could have a material adverse effect on our business, financial condition and results of operations. We operate in a highly competitive market for investment opportunities.
We may not have the ability to control or direct such actions, even if our rights are adversely affected. Most of our debt investments will not fully amortize during their lifetime, which may subject us to the risk of loss of our principal in the event a portfolio company is unable to repay us prior to maturity.
We may not have the ability to control or direct such actions, even if our rights are adversely affected. 41 Most of our debt investments will not fully amortize during their lifetime, which may subject us to the risk of loss of our principal in the event a portfolio company is unable to repay us prior to maturity.
Generally, covenant -lite loans permit borrowers more opportunity to negatively impact lenders because their covenants, if any, tend to be incurrence -based , which means they are only tested and can only be breached following certain actions of the borrower, rather than by a deterioration in the borrower’s financial condition.
Generally, covenant -lite loans permit borrowers more opportunity to negatively impact lenders because their covenants, if any, tend to be incurrence -based , which means they are only tested and can only be breached following certain actions of the borrower, rather than 44 by a deterioration in the borrower’s financial condition.
In order to create liquidity to pay the final principal 41 payment, a portfolio company typically must raise additional capital. If it is unable to raise sufficient funds to repay us, the debt investment may go into default, which may compel us to foreclose on the borrower’s assets, even if the debt investment was otherwise performing prior to maturity.
In order to create liquidity to pay the final principal payment, a portfolio company typically must raise additional capital. If it is unable to raise sufficient funds to repay us, the debt investment may go into default, which may compel us to foreclose on the borrower’s assets, even if the debt investment was otherwise performing prior to maturity.
In order to ensure that we do not engage in any prohibited transactions with any persons affiliated with us, we have implemented certain policies and procedures whereby our executive officers screen each of our transactions for any possible affiliations between the proposed portfolio investment, us, companies controlled by us and our employees and directors.
In order to ensure that we do not engage in any prohibited transactions with any persons affiliated with us, we have implemented certain policies and procedures whereby our executive officers screen each of our transactions for any possible affiliations between the proposed portfolio investment, 35 us, companies controlled by us and our employees and directors.
Despite actions of the U.S. federal government and various foreign governments, these events contributed to worsening general economic conditions that materially and adversely impacted the broader financial and credit markets and reduced the availability of debt and equity capital for the market as a whole and financial services firms in particular.
Despite actions of the U.S. federal 51 government and various foreign governments, these events contributed to worsening general economic conditions that materially and adversely impacted the broader financial and credit markets and reduced the availability of debt and equity capital for the market as a whole and financial services firms in particular.
As a result, our exposure to losses may be increased, which could result in an adverse impact on our revenues, net income and net asset value. 44 Our investments in the companies that we target may be extremely risky and we could lose all or part of our investments.
As a result, our exposure to losses may be increased, which could result in an adverse impact on our revenues, net income and net asset value. Our investments in the companies that we target may be extremely risky and we could lose all or part of our investments.
Although a secondary market may exist for our investments in CLO vehicles, the market for our investments in CLO vehicles may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods. As a result, these types of investments may be more difficult to value.
Although a secondary 47 market may exist for our investments in CLO vehicles, the market for our investments in CLO vehicles may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods. As a result, these types of investments may be more difficult to value.
In addition, our ability to incur indebtedness (including by issuing preferred stock) is limited by applicable regulations such that our asset coverage, as defined in the 1940 Act, must equal at least 150% immediately after each time we 27 incur indebtedness.
In addition, our ability to incur indebtedness (including by issuing preferred stock) is limited by applicable regulations such that our asset coverage, as defined in the 1940 Act, must equal at least 150% immediately after each time we incur indebtedness.
Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company, holders of debt instruments ranking senior to our investment in that portfolio company would typically be entitled to receive payment in full before we receive any distribution in respect of our investment.
Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company, holders of debt instruments ranking senior to our investment in that portfolio company would typically be entitled to receive payment in full 46 before we receive any distribution in respect of our investment.
Many of our competitors are substantially larger than us and have considerably greater financial, technical and marketing resources than we do. For example, some competitors may have a lower cost of funds and access to funding sources that are not available to us.
Many of our competitors are substantially larger than us and have considerably greater financial, technical and marketing resources than we do. For example, 26 some competitors may have a lower cost of funds and access to funding sources that are not available to us.
President and others in the executive branch, and new laws, regulations and interpretations could also come into effect. Any such new or changed laws or regulations could have a material adverse effect on our business, and political uncertainty could increase regulatory uncertainty in the near term.
President and others in the executive branch, and new laws, 53 regulations and interpretations could also come into effect. Any such new or changed laws or regulations could have a material adverse effect on our business, and political uncertainty could increase regulatory uncertainty in the near term.
In the event that a CLO vehicle failed these certain tests, holders of debt senior to us may be entitled to additional 47 payments that would, in turn, reduce the payments we would otherwise be entitled to receive.
In the event that a CLO vehicle failed these certain tests, holders of debt senior to us may be entitled to additional payments that would, in turn, reduce the payments we would otherwise be entitled to receive.
The full impact of any such risks is uncertain and difficult to predict. 51 Capital markets volatility and instability have also occurred in the past and may occur in the future.
The full impact of any such risks is uncertain and difficult to predict. Capital markets volatility and instability have also occurred in the past and may occur in the future.
This greater net asset value decrease would also tend to cause a greater decline in the market price for the common stock.
This greater 50 net asset value decrease would also tend to cause a greater decline in the market price for the common stock.
Any decline in the net asset value of our investments would be borne entirely by the holders of common 50 stock.
Any decline in the net asset value of our investments would be borne entirely by the holders of common stock.
These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States.
These developments, or the perception that more of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States.
Terrorist acts, acts of war, natural disasters, or disease outbreaks, pandemics or other public health crises may cause periods of market instability and volatility and may disrupt the operations of us and our portfolio companies for extended periods of time.
Terrorist acts, acts of war, geopolitical tensions, natural disasters, or disease outbreaks, pandemics or other public health crises may cause periods of market instability and volatility and may disrupt the operations of us and our portfolio companies for extended periods of time.
Our business operations rely upon secure information technology systems for data processing, storage, 55 and reporting.
Our business operations rely upon secure information technology systems for data processing, storage, and reporting.
The 5.50% Unsecured Notes are our general unsecured obligations, rank equally in right of payment with our future senior unsecured debt, and rank senior in right of payment to any potential subordinated debt, should any be issued in the future. 30 Illustration.
The 5.50% Unsecured Notes are our general unsecured obligations, rank equally in right of payment with our future senior unsecured debt, and rank senior in right of payment to any potential subordinated debt, should any be issued in the future.
Any disruptions resulting from such conflicts and any future conflict (including cyberattacks, espionage or the use or threatened use of nuclear weapons) or resulting from actual or threatened responses to such actions could cause disruptions to any of our portfolio companies located in Europe or the Middle East or that have substantial business relationships with companies in affected regions.
Any disruptions resulting from such conflicts and any future conflict (including cyberattacks, espionage or the use or threatened use of nuclear weapons) or resulting from actual or threatened responses to such actions could cause disruptions to any of our portfolio companies located in affected regions or that have substantial business relationships with companies in affected regions.
These impacts can be exacerbated by failures of governments and societies to adequately respond to an emerging event or threat. 52 Uncertainty can result in or coincide with, among other things: increased volatility in the financial markets for securities, derivatives, loans, credit and currency; a decrease in the reliability of market prices and difficulty in valuing assets (including portfolio company assets); greater fluctuations in spreads on debt investments and currency exchange rates; increased risk of default (by both government and private obligors and issuers); further social, economic, and political instability; nationalization of private enterprise; greater governmental involvement in the economy or in social factors that impact the economy; changes to governmental regulation and supervision of the loan, securities, derivatives and currency markets and market participants and decreased or revised monitoring of such markets by governments or self -regulatory organizations and reduced enforcement of regulations; limitations on the activities of investors in such markets; controls or restrictions on foreign investment, capital controls and limitations on repatriation of invested capital; the significant loss of liquidity and the inability to purchase, sell and otherwise fund investments or settle transactions (including, but not limited to, a market freeze); unavailability of currency hedging techniques; substantial, and in some periods extremely high rates of inflation, which can last many years and have substantial negative effects on credit and securities markets as well as the economy as a whole; recessions; and difficulties in obtaining and/or enforcing legal judgments.
Uncertainty can result in or coincide with, among other things: increased volatility in the financial markets for securities, derivatives, loans, credit and currency; a decrease in the reliability of market prices and difficulty in valuing assets (including portfolio company assets); greater fluctuations in spreads on debt investments and currency exchange rates; increased risk of default (by both government and private obligors and issuers); further social, economic, and political instability; nationalization of private enterprise; greater governmental involvement in the economy or in social factors that impact the economy; changes to governmental regulation and supervision of the loan, securities, derivatives and currency markets and market participants and decreased or revised monitoring of 52 such markets by governments or self -regulatory organizations and reduced enforcement of regulations; limitations on the activities of investors in such markets; controls or restrictions on foreign investment, capital controls and limitations on repatriation of invested capital; the significant loss of liquidity and the inability to purchase, sell and otherwise fund investments or settle transactions (including, but not limited to, a market freeze); unavailability of currency hedging techniques; substantial, and in some periods extremely high rates of inflation, which can last many years and have substantial negative effects on credit and securities markets as well as the economy as a whole; recessions; and difficulties in obtaining and/or enforcing legal judgments.
On May 20, 2021, the Company completed an underwritten public offering of approximately $80.5 million in aggregate principal amount of 5.50% Unsecured Notes. The 5.50% Unsecured Notes will mature on July 31, 2028, and may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after May 31, 2024.
On May 20, 2021, we completed an underwritten public offering of approximately $80.5 million in aggregate principal amount of 5.50% Unsecured Notes. The 5.50% Unsecured Notes will mature on July 31, 2028, and may be redeemed in whole or in part at any time or from time to time at our option on or after May 31, 2024.
Our portfolio must have an annual return of at least 2.62% in order to cover the annual interest payments on our current borrowings. If we are unable to comply with the covenants or restrictions in our borrowings, our business could be materially adversely affected.
Our portfolio must have an annual return of at least 3.64% in order to cover the annual interest payments on our current borrowings. If we are unable to comply with the covenants or restrictions in our borrowings, our business could be materially adversely affected.
The 6.25% Unsecured Notes bear interest at a rate of 6.25% per year payable quarterly on January 31, April 30, July 31, and October 31, of each year.
The 7.75% Unsecured Notes bear interest at a rate of 7.75% per year payable quarterly on January 31, April 30, July 31, and 30 October 31, of each year.
As of December 31, 2024, the CLO vehicles in which we were invested had average leverage of 6.49 times and ranged from approximately 0.41 times to 9.69 times levered. In particular, investors in CLO vehicles indirectly bear risks of the underlying debt investments held by such CLO vehicles.
As of December 31, 2025, the CLO vehicles in which we were invested had average leverage of 6.69 times and ranged from approximately 0.10 times to 10.88 times levered. In particular, investors in CLO vehicles indirectly bear risks of the underlying debt investments held by such CLO vehicles.
The 6.25% Unsecured Notes are our general unsecured obligations, rank equally in right of payment with our future senior unsecured debt, and rank senior in right of payment to any potential subordinated debt, should any be issued in the future.
The 7.75% Unsecured Notes are our general unsecured obligations, rank equally in right of payment with our future senior unsecured debt, and rank senior in right of payment to any potential subordinated debt, should any be issued in the future. Illustration.
In addition, if a portfolio company goes bankrupt, even though we may have structured our interest as senior debt, depending on the facts and circumstances, including the extent to which we actually provided significant “managerial assistance” to that portfolio company, a bankruptcy court might recharacterize our debt holding and subordinate all or a portion of our claim to that of other creditors.
In addition, if a portfolio company goes bankrupt, even though we may have structured our interest as senior debt, depending on the facts and circumstances, including the extent to which we actually provided significant “managerial assistance” to that portfolio company, a bankruptcy court might recharacterize our debt holding and subordinate all or a portion of our claim to that of other creditors. 45 Inflation may adversely affect our and our portfolio companies’ business, results of operations and financial condition.
In the case of debt ranking equally with debt securities in which we invest, we would have to share on an equal basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company. 46 In addition, we will not be in a position to control any portfolio company by investing in its debt securities.
In the case of debt ranking equally with debt securities in which we invest, we would have to share on an equal basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.
Any of these factors could depress economic activity and restrict our portfolio companies’ access to suppliers or customers and have a material adverse effect on their business, financial condition and results of operations, which in turn would negatively impact us. Internal and external cyber threats, as well as other disasters, could impair our ability to conduct business effectively.
Any of these factors could depress economic activity and restrict our portfolio companies’ access to suppliers or customers and have a material adverse effect on their business, financial condition and results of operations, which in turn would negatively impact us.
Assumed total return on our portfolio (net of expenses) (10.0 )% (5.0 )% 0.0 % 5.0 % 10.0 % Corresponding return to stockholder (1) (23.5 )% (14.2 )% (4.9 )% 4.4 % 13.8 % ____________ (1) Assumes $299.7 million in total assets and $125.3 million in total debt principal outstanding, which reflects our total assets and total debt outstanding as of December 31, 2024, and a cost of funds of approximately 6.26%.
Assumed total return on our portfolio (net of expenses) (10.0 )% (5.0 )% 0.0 % 5.0 % 10.0 % Corresponding return to stockholder (1) (28.8 )% (18.2 )% (7.7 )% 2.9 % 13.4 % ____________ (1) Assumes $306.7 million in total assets and $155.3 million in total debt principal outstanding, which reflects our total assets and total debt outstanding as of December 31, 2025, and a cost of funds of approximately 7.20%.
Such dilution could be substantial. If we issue preferred stock, the net asset value and market value of our common stock will likely become more volatile. We cannot assure you that the issuance of preferred stock would result in a higher yield or return to the holders of the common stock.
We cannot assure you that the issuance of preferred stock would result in a higher yield or return to the holders of the common stock. The issuance of preferred stock would likely cause the net asset value and market value of the common stock to become more volatile.
While the Adviser does not currently use AI to make investment recommendations, the use of AI could also exacerbate or create new and unpredictable risks to our business, the Adviser’s business, and the business of our portfolio companies, including by potentially significantly disrupting the markets in which we and our portfolio companies operate or subjecting us, our portfolio companies and the Adviser to increased competition and regulation, which could materially and adversely affect business, financial condition or results of operations of us, our portfolio companies and the Adviser.
The use of AI could also exacerbate or create new and unpredictable risks to our business, Oxford Square Management’s business, and the business of our portfolio companies, including by potentially significantly disrupting the markets in which we and our portfolio companies operate or subjecting us, our portfolio companies and Oxford Square Management to increased competition and regulation, which could materially and adversely 56 affect business, financial condition or results of operations of us, our portfolio companies and Oxford Square Management.
Our charter permits our Board of Directors to reclassify any authorized but unissued shares of stock into one or more classes of preferred stock. We are currently authorized to issue up to 100,000,000 shares of common stock, of which 69,789,527 shares are issued and outstanding as of February 27, 2025.
Our charter permits our Board of Directors to reclassify any authorized but unissued shares of stock into one or more classes of preferred stock. We are currently authorized to issue up to 100,000,000 shares of common stock, of which 87,510,727 shares are issued and outstanding as of March 2, 2026.
In addition to the factors described above, other factors described herein that may affect market, economic and geopolitical conditions, and thereby adversely affect the Company including, without limitation, economic slowdown in the United States and internationally, changes in interest rates and/or a lack of availability of credit in the United States and internationally, commodity price volatility and changes in law and/or regulation, and uncertainty regarding government and regulatory policy.
Our business and operations may be adversely affected by market, economic and geopolitical conditions, and thereby adversely affect the Company including, without limitation, economic slowdown in the United States and internationally, changes in interest rates and/or a lack of availability of credit in the United States and internationally, commodity price volatility and changes in law and/or regulation, and uncertainty regarding government and regulatory policy.
In addition, the use of AI by bad actors could heighten the sophistication and effectiveness of cyber and security attacks experienced by our portfolio companies and the Adviser.
The use of AI by bad actors could heighten the security vulnerabilities and sophistication and effectiveness of cyber and security attacks experienced by our portfolio companies and Oxford Square Management.
Conversely, if interest rates decrease, we may earn less interest income from investments and our cost of funds will also decrease, which could result in lower net investment income. From time to time, we may also enter into certain 40 hedging transactions to mitigate our exposure to changes in interest rates.
Conversely, if interest rates decrease, we may earn less interest income from investments and our cost of funds will also decrease, which could result in lower net investment income.
Further, inflation could make it difficult to extend the maturity of, or refinance existing indebtedness or obtain new indebtedness on favorable terms. Certain of our portfolio companies may be impacted by inflation.
These events could limit our investment originations, limit our ability to grow and negatively impact our operating results. Further, inflation could make it difficult to extend the maturity of, or refinance existing indebtedness or obtain new indebtedness on favorable terms. Certain of our portfolio companies may be impacted by inflation.
The issuance of preferred stock would likely cause the net asset value and market value of the common stock to become more volatile. If the distribution rate on the preferred stock were to approach the net rate of return on our investment portfolio, the benefit of leverage to the holders of the common stock would be reduced.
If the distribution rate on the preferred stock were to approach the net rate of return on our investment portfolio, the benefit of leverage to the holders of the common stock would be reduced.
Moreover, the re -appearance of market conditions similar to those experienced from 2008 through 2009 for any substantial length of time or worsened market conditions, including as a result of U.S. government shutdowns or the perceived creditworthiness of the United States, could make it difficult for us to borrow money or to extend the maturity of or refinance any indebtedness we may have under similar terms and any failure to do so could have a material adverse effect on our business.
Such conditions may occur for a prolonged period of time, and may materially worsen in the future, including as a result of U.S. government shutdowns or the perceived creditworthiness of the United States, could make it difficult for us to borrow money or to extend the maturity of or refinance any indebtedness we may have under similar terms and any failure to do so could have a material adverse effect on our business.
On April 3, 2019, we completed an underwritten public offering of approximately $44.8 million in aggregate principal amount of 6.25% Unsecured Notes. The 6.25% Unsecured Notes will mature on April 30, 2026, and may be redeemed in whole or in part at any time or from time to time at our option on or after April 30, 2022.
On August 7, 2025, we completed an underwritten public offering of approximately $74.8 million in aggregate principal amount of 7.75% Unsecured Notes. The 7.75% Unsecured Notes will mature on July 31, 2030, and may be redeemed in whole or in part at any time or from time to time at our option on or after July 31, 2027.
Structured investments, particularly the subordinated interests in which we intend to invest, are less liquid than many other types of securities and may be more volatile than the leveraged corporate loans underlying the CLO vehicles we intend to target.
Additionally, changes in the underlying leveraged corporate loans held by a CLO vehicle may cause payments on the instruments we hold to be reduced, either temporarily or permanently. 48 Structured investments, particularly the subordinated interests in which we intend to invest, are less liquid than many other types of securities and may be more volatile than the leveraged corporate loans underlying the CLO vehicles we intend to target.
The illiquidity of our investments may make it difficult for us to sell such investments if required. As a result, we may realize significantly less than the value at which we have recorded our investments.
Any inability to raise capital could have a negative effect on our business, financial condition and results of operations. 27 The illiquidity of our investments may make it difficult for us to sell such investments if required. As a result, we may realize significantly less than the value at which we have recorded our investments.
Recent technological advances in AI pose risks to the Company, the Adviser, and our portfolio investments. The Company and our portfolio investments could also be exposed to the risks of AI if third -party service providers or any counterparties, whether or not known to the Company, also use AI in their business activities.
We and our portfolio investments could also be exposed to the risks of AI if third -party service providers or any counterparties, whether or not known to us, also use AI in their business activities. We and our portfolio companies may not be in a position to control the use of AI technology in third -party products or services.
Sustained inflation could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events could limit 45 our investment originations, limit our ability to grow and negatively impact our operating results.
Inflation could negatively impact our business, including our ability to access the debt markets on favorable terms, or could negatively impact our portfolio companies. Sustained inflation could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us.
The debt capital that will be available, if at all, may be at a higher cost and on less favorable terms and conditions in the future. Any inability to raise capital could have a negative effect on our business, financial condition and results of operations.
The debt capital that will be available, if at all, may be at a higher cost and on less favorable terms and conditions in the future.
The extent and duration or escalation of such conflicts, resulting sanctions and resulting future market disruptions are impossible to predict, but could be significant.
Losses from terrorist attacks are generally uninsurable. Geopolitical conflicts and resulting market volatility, could also adversely affect the Company’s business, operating results, and financial condition. The extent and duration or escalation of such conflicts, resulting sanctions and resulting future market disruptions are impossible to predict, but could be significant.
If such banking institutions were to fail, we could lose all or a portion of those amounts held in excess of such insurance limitations.
Cash held by us and by our portfolio companies in non -interest-bearing and interest -bearing operating accounts may exceed the FDIC insurance limits. If such banking institutions were to fail, we or our portfolio companies could lose all or a portion of those amounts held in excess of such FDIC insurance limitations.
AI technology and its applications, including in the private investment and financial sectors, continue to develop rapidly, and it is impossible to predict the future risks that may arise from such developments. We are subject to risks related to corporate social responsibility. Our business faces increasing public scrutiny related to environmental, social and governance (“ESG”) activities.
AI technology and its applications, including in the private investment and financial sectors, continue to develop rapidly, and it is impossible to predict the future risks that may arise from such developments. We maintain our cash at financial institutions, often in balances that exceed federally insured limits.
We are subject to risks associated with artificial intelligence and machine learning technology Artificial intelligence, including machine learning and similar tools and technologies that collect, aggregate, analyze or generate data or other materials, or collectively, AI, and its current and potential future applications including in the private investment and financial industries, as well as the legal and regulatory frameworks within which AI operates, continue to rapidly evolve.
AI and its current and potential future applications including in the private investment and financial industries, as well as the legal and regulatory frameworks within which AI operates, continue to rapidly evolve.
For example, from 2008 to 2009, the global capital markets were unstable as evidenced by the lack of liquidity in the debt capital markets, significant write -offs in the financial services sector, the re -pricing of credit risk in the broadly syndicated credit market and the failure of major financial institutions.
At various times, such disruptions in the past have resulted in, and may in the future result in, a lack of liquidity in the debt capital markets, significant write -offs in the financial services sector, the re -pricing of credit risk in the broadly syndicated credit market and the failure of major financial institutions.
A return of capital distribution could cause a stockholder to recognize a capital gain from the sale of our common stock even if the stockholder sells its shares for less than the original purchase price. Your interest in us may be diluted if you do not fully exercise your subscription rights in any rights offering.
A return of capital distribution could cause a stockholder to recognize a capital gain from the sale of our common stock even if the stockholder sells its shares for less than the original purchase price. If we issue preferred stock, the net asset value and market value of our common stock will likely become more volatile.
Energy companies could also be affected by the potential for lawsuits against or taxes or other regulatory costs imposed on greenhouse gas emitters, based on links drawn between greenhouse gas emissions and climate change. Changes to United States tariff and import/export regulations may have a negative effect on our portfolio companies and, in turn, harm us.
Changes to United States tariff and import/export regulations may have a negative effect on our portfolio companies and, in turn, harm us.
Removed
On October 13, 2016, we filed an exemptive application with the SEC to permit us to co -invest with funds or entities managed by Oxford Square Management or its affiliates in certain negotiated transactions where co -investing would otherwise be prohibited under the 1940 Act.
Added
On January 6, 2026, we received an updated form of co -investment exemptive relief from the SEC to allow certain managed funds and investment vehicles, each of whose investment adviser is Oxford Square Management or an investment adviser controlling, controlled by or under common control with Oxford Square Management, to participate in negotiated co -investment transactions where doing so is consistent with regulatory requirements and other pertinent factors, and pursuant to the conditions of the exemptive relief (the “Co -Investment Order”).
Removed
On June 14, 2017, the SEC issued an order permitting the Company and certain of its affiliates to complete negotiated co -investment transactions in portfolio companies, subject to certain conditions, or the “Order.” Subject to satisfaction of certain conditions to the Order, the Company and certain of its affiliates are now permitted, together with any future BDCs, registered closed -end funds and certain private funds, each of whose investment adviser is Oxford Square’s investment adviser or an investment adviser controlling, controlled by, or under common control with Oxford Square Management, to co -invest in negotiated investment opportunities where doing so would otherwise be prohibited under the 1940 Act, providing the Company’s stockholders with access to a broader array of investment opportunities.
Added
The Co -Investment Order, which supersedes the co -investment order issued to us on June 14, 2017, is a new form of co -investment exemptive relief that adopts a more flexible requirement that allocations be “fair and equitable” to us and that Oxford Square Management considers the interests of us and other affiliated 1940 Act -regulated funds that rely on the Co -Investment Order in allocations and which minimizes certain board approval requirements as compared to the prior form of co -investment exemptive relief.
Removed
Pursuant to the Order, we are permitted to co -invest in such investment opportunities with our affiliates if a “required majority” (as defined in Section 57(o) of the 1940 Act) of our independent directors make certain conclusions in connection with a co -investment transaction, including, but not limited to, that (1) the terms of the potential co -investment transaction, including the consideration to be paid, are reasonable and fair to us and our stockholders and do not involve overreaching in respect of us or our stockholders on the part of any person concerned, and (2) the potential co -investment transaction is consistent with the interests of our stockholders and is consistent with our then -current investment objective and strategies.
Added
Among other things, under the Co -Investment Order, the terms, conditions, price, class of securities to be purchased in respect of a particular investment, the date on which such investment is to be made and any registration rights applicable thereto, must be generally the same for us and each other participating affiliated entity.
Removed
Inflation may adversely affect our and our portfolio companies’ business, results of operations and financial condition. Inflation could negatively impact our business, including our ability to access the debt markets on favorable terms, or could negatively impact our portfolio companies.
Added
The requirements of the Co -Investment Order (including any requirements for board approval thereunder), as well as other regulatory requirements associated with us and other affiliated 1940 Act -regulated funds that rely on the Co -Investment Order, potentially will impact the investment allocations among participating entities (including, for the avoidance of doubt, us) or otherwise impact allocation results.
Removed
Changes in interest rates and credit quality may cause significant price fluctuations. Additionally, changes in the underlying leveraged corporate loans held by a CLO vehicle may cause payments on the instruments we hold to be reduced, either temporarily or permanently.
Added
Any changes to the Co -Investment Order or the rules and other guidance promulgated by the SEC and its staff under the 1940 Act could impact allocations made available to us and thereby affect (and potentially decrease) the allocation made to us or otherwise impact the process for allocations in transactions in which we participate.
Removed
In the event we issue subscription rights or warrants to purchase shares of our common stock, stockholders who do not fully exercise their rights or warrants should expect that they will, at the completion of the offer, own a smaller proportional interest in us than would otherwise be the case if they fully exercised their rights or warrants.
Added
Additionally, in periods of declining interest rates, the rate of prepayments has historically tended to increase (as does price fluctuation) as borrowers are motivated to pay off debt 40 and refinance at new lower rates.
Removed
We cannot state precisely the amount of any such dilution in share ownership because we do not know at this time what proportion of the shares will be purchased as a result of the offer.
Added
During such periods, we would expect reinvestment of the prepayment proceeds by us to generally be at lower rates of return than the return on the assets that were prepaid. From time to time, we may also enter into certain hedging transactions to mitigate our exposure to changes in interest rates.
Removed
In addition, if the subscription price is less than our net asset value per share, then our stockholders would experience an immediate dilution of the aggregate net asset value of their shares as a result of the offer.
Added
Any Institutional Investor that fails to comply with the applicable Due Diligence Requirements in respect of a securitization position which it holds may become subject to a range of regulatory sanctions including, in the case of a credit institution, investment firm, insurer or reinsurer, a punitive regulatory capital charge with respect to such securitization position, or, in certain other cases, a requirement to take corrective action.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+2 added−0 removed9 unchanged
Biggest changeThe cyber risk management program involves risk assessments, implementation of security measures, and ongoing monitoring of systems and networks, including networks on which the Company relies. Oxford Funds actively monitors the current threat landscape in an effort to identify material risks arising from new and evolving cybersecurity threats, including material risks faced by the Company.
Biggest changeOxford Funds actively monitors the current threat landscape in an effort to identify material risks to the Company from new and evolving cybersecurity threats, including threats arising from new technologies, such as generative artificial intelligence.
The Company relies on Oxford Funds to engage external experts, including cybersecurity assessors and consultants to evaluate cybersecurity measures and risk management processes, including those applicable to the Company. The Company relies on Oxford Funds’ risk management program and processes, which include cyber risk assessments.
The Company relies on Oxford Funds to engage external experts, including cybersecurity assessors and consultants to evaluate cybersecurity measures and risk management processes, including those applicable to the Company. 57 The Company relies on Oxford Funds’ risk management program and processes, which include cyber risk assessments.
The CCO has been responsible for his oversight function as CCO to the Company for 9 years and has worked in the financial services industry for more than 35 years, during which time the CCO has gained expertise in assessing and managing risk applicable to the Company.
The CCO has been responsible for his oversight function as CCO to the Company for 10 years and has worked in the financial services industry for more than 35 years, during which time the CCO has gained expertise in assessing and managing risk applicable to the Company.
The Head of Information Technology has more than 9 years of experience in actively managing cybersecurity and information security programs for financial services companies with complex information systems.
The Head of Information Technology has more than 10 years of experience in actively managing cybersecurity and information security programs for financial services companies with complex information systems.
The Board receives periodic updates from its Chief Compliance Officer (“CCO”), which incorporates updates provided by the Head of Information Technology of Oxford Funds, regarding the overall state of Oxford Funds’ cybersecurity program, information on the current threat landscape, and risks from cybersecurity threats and cybersecurity incidents impacting the Company. 57 Management’s Role in Cybersecurity Risk Management The Company’s management, including the Company’s CCO and the Head of Information Technology of Oxford Funds, manages the Company’s cybersecurity program.
The Board receives periodic updates from its Chief Compliance Officer (“CCO”), which incorporates updates provided by the Head of Information Technology of Oxford Funds, regarding the overall state of Oxford Funds’ cybersecurity program, information on the current threat landscape, and risks from cybersecurity threats and cybersecurity incidents impacting the Company.
Added
The cyber risk management program involves risk assessments, implementation of security measures, and ongoing monitoring of systems and networks, including networks on which the Company relies.
Added
Management’s Role in Cybersecurity Risk Management The Company’s management, including the Company’s CCO and the Head of Information Technology of Oxford Funds, manages the Company’s cybersecurity program.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

17 edited+4 added−0 removed32 unchanged
Biggest changePrice Range Premium or (Discount) of High Sales Price to NAV (2) Premium or (Discount) of Low Sales Price to NAV (2) Distributions Per Share (3) NAV (1) High Low Fiscal 2025 First Quarter (through February 27, 2025) * $ 2.87 $ 2.44 * * $ 0.105 Fiscal 2024 Fourth Quarter $ 2.30 $ 2.99 $ 2.40 30.0 % 4.3 % $ 0.105 Third Quarter $ 2.35 $ 3.10 $ 2.74 31.9 % 16.6 % $ 0.105 Second Quarter $ 2.43 $ 3.29 $ 2.91 35.4 % 19.8 % $ 0.105 First Quarter $ 2.42 $ 3.22 $ 2.85 33.1 % 17.8 % $ 0.105 Fiscal 2023 Fourth Quarter $ 2.55 $ 3.12 $ 2.82 22.4 % 10.6 % $ 0.105 Third Quarter $ 2.78 $ 3.29 $ 2.68 18.3 % (3.6 )% $ 0.225 Second Quarter $ 2.88 $ 3.20 $ 2.60 11.1 % (9.7 )% $ 0.105 First Quarter $ 2.80 $ 3.70 $ 3.00 32.1 % 7.1 % $ 0.105 ____________ * Net asset value has not yet been calculated for this period.
Biggest changePrice Range Premium or (Discount) of High Sales Price to NAV (2) Premium or (Discount) of Low Sales Price to NAV (2) Distributions Per Share (3) NAV (1) High Low Fiscal 2026 First Quarter (through March 2, 2026) * $ 1.98 $ 1.72 * * $ 0.105 Fiscal 2025 Fourth Quarter $ 1.69 $ 2.05 $ 1.56 21.3 % (7.7 )% $ 0.105 Third Quarter $ 1.95 $ 2.42 $ 1.56 24.1 % (20.0 )% $ 0.105 Second Quarter $ 2.06 $ 2.64 $ 2.14 28.2 % 3.9 % $ 0.105 First Quarter $ 2.09 $ 2.87 $ 2.44 37.1 % 16.7 % $ 0.105 Fiscal 2024 Fourth Quarter $ 2.30 $ 2.99 $ 2.40 30.0 % 4.3 % $ 0.105 Third Quarter $ 2.35 $ 3.10 $ 2.74 31.9 % 16.6 % $ 0.105 Second Quarter $ 2.43 $ 3.29 $ 2.91 35.4 % 19.8 % $ 0.105 First Quarter $ 2.42 $ 3.22 $ 2.85 33.1 % 17.8 % $ 0.105 ____________ * Net asset value has not yet been calculated for this period.
For a more detailed discussion of the requirements under Subchapter M, please refer to the discussion in “Business — Certain U.S. Federal 59 Income Tax Considerations” set forth above.
For a more detailed discussion of the requirements under Subchapter M, please refer to the discussion in “Business — Certain 59 U.S. Federal Income Tax Considerations” set forth above.
Oxford Square Management did not earn incentive fees during the year ended December 31, 2024, due to the Total Return Requirement described under Item 1. Business — Investment Advisory Agreement — Advisory Fee in this Annual Report on Form 10 -K .
Oxford Square Management did not earn incentive fees during the year ended December 31, 2025, due to the Total Return Requirement described under Item 1. Business — Investment Advisory Agreement — Advisory Fee in this Annual Report on Form 10 -K .
The graph assumes that, on December 31, 2019, a person invested $100 in each of our common stock, the NASDAQ Composite Index and the NASDAQ Financial 100, which includes the 100 largest domestic and international financial organizations listed on the NASDAQ Stock Market based on market capitalization.
The graph assumes that, on December 31, 2020, a person invested $100 in each of our common stock, the NASDAQ Composite Index and the NASDAQ Financial 100, which includes the 100 largest domestic and international financial organizations listed on the NASDAQ Stock Market based on market capitalization.
(7) “Other expenses” are based on the actual expenses for the year ended December 31, 2024, and adjusted for any new and non -recurring expenses, such as an assumed issuance of an additional $50.0 million of common stock.
(7) “Other expenses” are based on the actual expenses for the year ended December 31, 2025, and adjusted for any new and non -recurring expenses, such as an assumed issuance of an additional $50.0 million of common stock.
Performance Graph The graph below compares the cumulative stockholder return on our common stock with that of the NASDAQ Composite Index and the NASDAQ Financial 100, as we do not believe there is an appropriate index of companies with an investment strategy similar to our own with which to compare the return on our common stock, for the period from December 31, 2019 through December 31, 2024.
Performance Graph The graph below compares the cumulative stockholder return on our common stock with that of the NASDAQ Composite Index and the NASDAQ Financial 100, as we do not believe there is an appropriate index of companies with an investment strategy similar to our own with which to compare the return on our common stock, for the period from December 31, 2020 through December 31, 2025.
This table includes all of the commitment fees, interest expense and amortized financing costs of the 6.25% Unsecured Notes and 5.50% Unsecured Notes, as well as the fees and expenses of issuing and servicing any other borrowings or leverage that the Company expects to incur during the 12 months following the filing of this Annual Report on Form 10 -K .
This table includes all of the commitment fees, interest expense and amortized financing costs of the 7.75% Unsecured Notes and 5.50% Unsecured Notes, as well as the fees and expenses of issuing and servicing any other borrowings or leverage that the Company expects to incur during the 12 months following the filing of this Annual Report on Form 10 -K .
For a detailed discussion of the calculation of the incentive fees, see Item 1 — Business — Investment Advisory Agreement — Advisory Fee in this Annual Report on Form 10 -K . (6) Assumes that we have $125.3 million of outstanding principal borrowings as of December 31, 2024.
For a detailed discussion of the calculation of the incentive fees, see Item 1 — Business — Investment Advisory Agreement — Advisory Fee in this Annual Report on Form 10 -K . (6) Assumes that we have $155.3 million of outstanding principal borrowings as of December 31, 2025.
The indirect expenses associated with the Company’s CLO equity investments are not included in the fee table presentation, but if such expenses were included in the fee table presentation then OXSQ’s total annual expenses would have been 13.56%. (9) Totals may not sum due to rounding.
The indirect expenses associated with the Company’s CLO equity investments are not included in the fee table presentation, but if such expenses were included in the fee table presentation then OXSQ’s total annual expenses would have been 16.67%. (9) Totals may not sum due to rounding.
Stockholder transaction expenses: Sales load (as a percentage of offering price) — % (1) Offering expenses borne by our common stockholders (as a percentage of offering price) — % (2) Distribution reinvestment plan expenses — % (3) Total stockholder transaction expenses (as a percentage of offering price) — % Annual expenses (as a percentage of net assets attributable to our common stock): Base management fee 2.49 % (4) Incentive fees payable under our investment advisory agreement — % (5) Interest payments on borrowed funds 3.73 % (6) Other expenses 2.03 % (3) (7) Total annual expenses 8.24 % (8)(9) ____________ (1) If applicable, the prospectus or prospectus supplement relating to an offering of our securities will disclose the applicable sales load and the “Example” will be updated accordingly.
Stockholder transaction expenses: Sales load (as a percentage of offering price) — % (1) Offering expenses borne by our common stockholders (as a percentage of offering price) — % (2) Distribution reinvestment plan expenses — % (3) Total stockholder transaction expenses (as a percentage of offering price) — % Annual expenses (as a percentage of net assets attributable to our common stock): Base management fee 2.74 % (4) Incentive fees payable under our investment advisory agreement — % (5) Interest payments on borrowed funds 5.72 % (6) Other expenses 2.30 % (3) (7) Total annual expenses 10.76 % (8)(9) ____________ (1) If applicable, the prospectus or prospectus supplement relating to an offering of our securities will disclose the applicable sales load and the “Example” will be updated accordingly.
Recent Sales of Unregistered Securities We did not engage in unregistered sales of equity securities during the year ended December 31, 2024, however, we issued a total of 326,184 shares of common stock under our distribution reinvestment plan. This issuance was not subject to the registration requirements of the Securities Act of 1933, as amended.
Recent Sales of Unregistered Securities We did not engage in unregistered sales of equity securities during the year ended December 31, 2025, however, we issued a total of 391,246 shares of common stock under our distribution reinvestment plan. This issuance was not subject to the registration requirements of the Securities Act of 1933, as amended.
Our shares of common stock have traded both at a premium and a discount to the net assets attributable to those shares. As of February 27, 2025, our shares of common stock traded at a premium equal to approximately 21.7% of the net asset value per share as of December 31, 2024.
Our shares of common stock have traded both at a premium and a discount to the net assets attributable to those shares. As of March 2, 2026, our shares of common stock traded at a premium equal to approximately 7.7% of the net asset value per share as of December 31, 2025.
(4) Assumes gross assets (which equals the total assets on our Statements of Assets and Liabilities adjusted as described in this footnote) of $349.7 million and $125.3 million of leverage (including $44.8 million in aggregate principal of our 6.25% Unsecured Notes and $80.5 million in aggregate principal of our 5.50% Unsecured Notes in each case, as of December 31, 2024), and assumes net assets of $210.7 million (which has been adjusted to reflect the net issuance of an additional $50.0 million of common stock).
(4) Assumes gross assets (which equals the total assets on our Statements of Assets and Liabilities adjusted as described in this footnote) of $356.7 million and $155.3 million of leverage (including $74.8 million in aggregate principal of our 7.75% Unsecured Notes and $80.5 million in aggregate principal of our 5.50% Unsecured Notes in each case, as of December 31, 2025), and assumes net assets of $195.4 million (which has been adjusted to reflect the net issuance of an additional $50.0 million of common stock).
On February 27, 2025, the last reported sales price of our common stock was $2.80 per share. As of February 27, 2025, we had 124 stockholders of record. Shares of BDCs may trade at a market price that is less than the value of the net assets attributable to those shares.
On March 2, 2026, the last reported sales price of our common stock was $1.82 per share. As of March 2, 2026, we had 123 stockholders of record. Shares of BDCs may trade at a market price that is less than the value of the net assets attributable to those shares.
In calculating the following expense amounts, we have assumed that our annual operating expenses would remain at the levels set forth in the table above. 1 Year 3 Years 5 Years 10 Years You would pay the following expenses on a $1,000 investment, assuming a 5% annual return (1) $ 81 $ 235 $ 380 $ 702 You would pay the following expenses on a $1,000 investment, assuming a 5% annual return entirely from realized gains (2) $ 90 $ 260 $ 416 $ 750 ____________ (1) Assumes that we will not realize any capital gains computed net of all realized capital losses and unrealized capital depreciation.
In calculating the following expense amounts, we have assumed that our annual operating expenses would remain at the levels set forth in the table above. 1 Year 3 Years 5 Years 10 Years You would pay the following expenses on a $1,000 investment, assuming a 5% annual return (1) $ 105 $ 296 $ 466 $ 812 You would pay the following expenses on a $1,000 investment, assuming a 5% annual return entirely from realized gains (2) $ 114 $ 318 $ 496 $ 846 ____________ (1) Assumes that we will not realize any capital gains computed net of all realized capital losses and unrealized capital depreciation.
The calculation also assumes an effective interest rate of 6.77% (including amortization of deferred issuance costs) on the approximately $44.8 million of 6.25% Unsecured Notes outstanding as of December 31, 2024, and an effective interest rate of 5.98% (including amortization of deferred issuance costs) on the approximately $80.5 million of 5.50% Unsecured Notes outstanding as of December 31, 2024.
The calculation also assumes an effective interest rate of 8.52% (including amortization of deferred issuance costs) on the approximately $74.8 million of 7.75% Unsecured Notes outstanding as of December 31, 2025, and an effective interest rate of 5.98% (including amortization of deferred issuance costs) on the approximately $80.5 million of 5.50% Unsecured Notes outstanding as of December 31, 2025.
The aggregate value for the shares of common stock issued under the distribution reinvestment plan was approximately $0.9 million. Issuer Purchases of Equity Securities During the year ended December 31, 2024, no common stock was repurchased.
The aggregate value for the shares of common stock issued under the distribution reinvestment plan was approximately $0.8 million. Issuer Purchases of Equity Securities On October 30, 2025, the Board of Directors authorized a 12 -month share repurchase program (the “Share Repurchase Program”).
Added
Under the Share Repurchase Program, we may repurchase, during the 12 -month period commencing on October 30, 2025, up to $25.0 million in the aggregate of our outstanding common stock in the open market.
Added
The timing, manner, price and amount of any share repurchases will be determined by us, in our discretion, based upon the evaluation of economic and market conditions, our stock price, applicable legal, contractual and regulatory requirements and other factors.
Added
The Share Repurchase Program is expected to be in effect until October 30, 2026, unless extended or until the aggregate repurchase amount has been expended. The Share Repurchase Program does not require us to repurchase any specific number of shares, and we cannot assure stockholders that any shares will be repurchased under the Share Repurchase Program.
Added
The Share Repurchase Program may be suspended, extended, modified or discontinued at any time. During the year ended December 31, 2025, no common stock was repurchased.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe have until October 15, 2025 to file our U.S. federal income tax return for the year ended December 31, 2024. 75 The following table reflects the cash distributions, including distributions reinvested, if any, per share that we have paid on our common stock since the beginning of the 2022 fiscal year through 2024: Date Declared Record Date Payment Date Total Distributions GAAP net investment income Distributions in excess of/ (less than) GAAP net investment income (1) Fiscal 2024 (1) August 8, 2024 December 17, 2024 December 31, 2024 $ 0.035 $ N/A $ — August 8, 2024 November 15, 2024 November 29, 2024 0.035 N/A — August 8, 2024 October 17, 2024 October 31, 2024 0.035 N/A — Total (Fourth Quarter 2024) 0.105 0.09 0.02 April 25, 2024 September 16, 2024 September 30, 2024 0.035 N/A $ — April 25, 2024 August 16, 2024 August 30, 2024 0.035 N/A — April 25, 2024 July 17, 2024 July 31, 2024 0.035 N/A — Total (Third Quarter 2024) 0.105 0.10 0.01 March 14, 2024 June 14, 2024 June 28, 2024 0.035 N/A — March 14, 2024 May 17, 2024 May 31, 2024 0.035 N/A — March 14, 2024 April 16, 2024 April 30, 2024 0.035 N/A — Total (Second Quarter 2024) 0.105 0.13 (0.02 ) November 2, 2023 March 15, 2024 March 29, 2024 0.035 N/A — November 2, 2023 February 15, 2024 February 29, 2024 0.035 N/A — November 2, 2023 January 17, 2024 January 31, 2024 0.035 N/A — Total (First Quarter 2024) 0.105 0.11 (0.01 ) Total (2024) $ 0.420 ​ (1) $ 0.42 ​ (4) $ 0.00 ​ (4) Fiscal 2023 August 3, 2023 December 15, 2023 December 29, 2023 $ 0.035 $ N/A $ — August 3, 2023 November 16, 2023 November 30, 2023 0.035 N/A — August 3, 2023 October 17, 2023 October 31, 2023 0.035 N/A — Total (Fourth Quarter 2023) 0.105 0.13 (0.03 ) August 3, 2023 (5) September 15, 2023 September 29, 2023 $ 0.120 $ N/A $ — April 25, 2023 September 15, 2023 September 29, 2023 0.035 N/A — April 25, 2023 August 17, 2023 August 31, 2023 0.035 N/A — April 25, 2023 July 17, 2023 July 31, 2023 0.035 N/A — Total (Third Quarter 2023) 0.225 0.11 0.12 March 16, 2023 June 16, 2023 June 30, 2023 $ 0.035 $ N/A $ — March 16, 2023 May 17, 2023 May 31, 2023 0.035 N/A — March 16, 2023 April 14, 2023 April 28, 2023 0.035 N/A — Total (Second Quarter 2023) 0.105 0.13 (0.03 ) October 20, 2022 March 17, 2023 March 31, 2023 $ 0.035 $ N/A $ — October 20, 2022 February 14, 2023 February 28, 2023 0.035 N/A — October 20, 2022 January 17, 2023 January 31, 2023 0.035 N/A — Total (First Quarter 2023) 0.105 0.13 (0.03 ) Total (2023) $ 0.540 $ 0.51 ​ (2)(4) $ 0.03 ​ (2) Fiscal 2022 July 21, 2022 December 16, 2022 December 30, 2022 $ 0.035 $ N/A $ — July 21, 2022 November 16, 2022 November 30, 2022 0.035 N/A — July 21, 2022 October 17, 2022 October 31, 2022 0.035 N/A — Total (Fourth Quarter 2022) 0.105 0.13 (0.03 ) April 21, 2022 September 16, 2022 September 30, 2022 $ 0.035 $ N/A $ — April 21, 2022 August 17, 2022 August 31, 2022 0.035 N/A — April 21, 2022 July 15, 2022 July 29, 2022 0.035 N/A — Total (Third Quarter 2022) 0.105 0.11 (0.01 ) March 1, 2022 June 16, 2022 June 30, 2022 $ 0.035 $ N/A $ — March 1, 2022 May 17, 2022 May 31, 2022 0.035 N/A — March 1, 2022 April 15, 2022 April 29, 2022 0.035 N/A — Total (Second Quarter 2022) 0.105 0.09 0.02 76 Date Declared Record Date Payment Date Total Distributions GAAP net investment income Distributions in excess of/ (less than) GAAP net investment income (1) October 22, 2021 March 17, 2022 March 31, 2022 $ 0.035 $ N/A $ — October 22, 2021 February 14, 2022 February 28, 2022 0.035 N/A — October 22, 2021 January 17, 2022 January 31, 2022 0.035 N/A — Total (First Quarter 2022) 0.105 0.09 0.02 Total (2022) $ 0.420 ​ (3) $ 0.42 $ — ____________ (1) The tax characterization of cash distributions for the year ended December 31, 2024 will not be known until the tax return for such year is finalized.
Biggest changeWe have until October 15, 2026 to file our U.S. federal income tax return for the year ended December 31, 2025. 75 The following table reflects the cash distributions, including distributions reinvested, if any, per share that we have paid on our common stock since the beginning of the 2023 fiscal year through 2025: Date Declared Record Date Payment Date Total Distributions GAAP Net Investment Income Distributions in Excess of/ (Less than) GAAP Net Investment Income (1) Fiscal 2025 (1) July 30, 2025 December 17, 2025 December 31, 2025 $ 0.035 $ N/A $ — July 30, 2025 November 14, 2025 November 28, 2025 0.035 N/A — July 30, 2025 October 17, 2025 October 31, 2025 0.035 N/A — Total (Fourth Quarter 2025) 0.105 0.07 0.04 April 22, 2025 September 16, 2025 September 30, 2025 0.035 N/A $ — April 22, 2025 August 15, 2025 August 29, 2025 0.035 N/A — April 22, 2025 July 17, 2025 July 31, 2025 0.035 N/A — Total (Third Quarter 2025) 0.105 0.07 0.04 February 27, 2025 June 16, 2025 June 30, 2025 0.035 N/A — February 27, 2025 May 16, 2025 May 30, 2025 0.035 N/A — February 27, 2025 April 16, 2025 April 30, 2025 0.035 N/A — Total (Second Quarter 2025) 0.105 0.08 0.03 October 31, 2024 March 17, 2025 March 31, 2025 0.035 N/A — October 31, 2024 February 14, 2025 February 28, 2025 0.035 N/A — October 31, 2024 January 17, 2025 January 31, 2025 0.035 N/A — Total (First Quarter 2025) 0.105 0.09 0.02 Total (2025) $ 0.420 ​ (1) $ 0.30 ​ (4) $ 0.12 ​ (4) Fiscal 2024 (1) August 8, 2024 December 17, 2024 December 31, 2024 $ 0.035 $ N/A $ — August 8, 2024 November 15, 2024 November 29, 2024 0.035 N/A — August 8, 2024 October 17, 2024 October 31, 2024 0.035 N/A — Total (Fourth Quarter 2024) 0.105 0.09 0.02 April 25, 2024 September 16, 2024 September 30, 2024 0.035 N/A $ — April 25, 2024 August 16, 2024 August 30, 2024 0.035 N/A — April 25, 2024 July 17, 2024 July 31, 2024 0.035 N/A — Total (Third Quarter 2024) 0.105 0.10 0.01 March 14, 2024 June 14, 2024 June 28, 2024 0.035 N/A — March 14, 2024 May 17, 2024 May 31, 2024 0.035 N/A — March 14, 2024 April 16, 2024 April 30, 2024 0.035 N/A — Total (Second Quarter 2024) 0.105 0.13 (0.02 ) November 2, 2023 March 15, 2024 March 29, 2024 0.035 N/A — November 2, 2023 February 15, 2024 February 29, 2024 0.035 N/A — November 2, 2023 January 17, 2024 January 31, 2024 0.035 N/A — Total (First Quarter 2024) 0.105 0.11 (0.01 ) Total (2024) $ 0.420 ​ (2) $ 0.42 ​ (4) $ 0.00 Fiscal 2023 August 3, 2023 December 15, 2023 December 29, 2023 $ 0.035 $ N/A $ — August 3, 2023 November 16, 2023 November 30, 2023 0.035 N/A — August 3, 2023 October 17, 2023 October 31, 2023 0.035 N/A — Total (Fourth Quarter 2023) 0.105 0.13 (0.03 ) August 3, 2023 (5) September 15, 2023 September 29, 2023 $ 0.120 $ N/A $ — April 25, 2023 September 15, 2023 September 29, 2023 0.035 N/A — April 25, 2023 August 17, 2023 August 31, 2023 0.035 N/A — April 25, 2023 July 17, 2023 July 31, 2023 0.035 N/A — Total (Third Quarter 2023) 0.225 0.11 0.12 March 16, 2023 June 16, 2023 June 30, 2023 $ 0.035 $ N/A $ — March 16, 2023 May 17, 2023 May 31, 2023 0.035 N/A — March 16, 2023 April 14, 2023 April 28, 2023 0.035 N/A — Total (Second Quarter 2023) 0.105 0.13 (0.03 ) 76 Date Declared Record Date Payment Date Total Distributions GAAP Net Investment Income Distributions in Excess of/ (Less than) GAAP Net Investment Income (1) October 20, 2022 March 17, 2023 March 31, 2023 $ 0.035 $ N/A $ — October 20, 2022 February 14, 2023 February 28, 2023 0.035 N/A — October 20, 2022 January 17, 2023 January 31, 2023 0.035 N/A — Total (First Quarter 2023) 0.105 0.13 (0.03 ) Total (2023) $ 0.540 ​ (3) $ 0.51 ​ (4) $ 0.03 ____________ (1) The tax characterization of cash distributions for the year ended December 31, 2025 will not be known until the tax return for such year is finalized.
Under the Investment Advisory Agreement, we have agreed to pay Oxford Square Management an annual Base Fee calculated on gross assets, 64 and an incentive fee based upon our performance. Under the Administration Agreement, we have agreed to pay or reimburse Oxford Funds, as administrator, for certain expenses incurred in operating the Company.
Under the Investment Advisory 64 Agreement, we have agreed to pay Oxford Square Management an annual Base Fee calculated on gross assets, and an incentive fee based upon our performance. Under the Administration Agreement, we have agreed to pay or reimburse Oxford Funds, as administrator, for certain expenses incurred in operating the Company.
Our critical accounting 78 estimates, including those relating to the valuation of our investment portfolio, are described below. Actual results could materially differ from those estimates. The critical accounting estimates should be read in conjunction with our risk factors as disclosed in “Item 1A.
Our critical accounting estimates, including those relating to the valuation of our investment portfolio, are described below. Actual results could materially differ from those estimates. The critical accounting estimates should be read in conjunction with our risk factors as disclosed in “Item 1A.
Risk Factors.” See Note 2 to our financial statements for the year ended December 31, 2024 for more information on our critical accounting policies. Investment Valuation We fair value our investment portfolio in accordance with the provisions of ASC 820, Fair Value Measurement and Disclosure (“ASC 820”) and Rule 2a -5 under the 1940 Act.
Risk Factors.” See Note 2 to our financial statements for the year ended December 31, 2025 for more information on our critical accounting policies. Investment Valuation We fair value our investment portfolio in accordance with the provisions of ASC 820, Fair Value Measurement and Disclosure (“ASC 820”) and Rule 2a -5 under the 1940 Act.
We consider the attributes of current market conditions on an on -going basis and have determined that due to the general illiquidity of the market for our investment portfolio, whereby little or no market data exists, substantially all of our fair valued investments are measured based upon Level 3 inputs as of December 31, 2024 and December 31, 2023.
We consider the attributes of current market conditions on an on -going basis and have determined that due to the general illiquidity of the market for our investment portfolio, whereby little or no market data exists, substantially all of our fair valued investments are measured based upon Level 3 inputs as of December 31, 2025 and December 31, 2024.
The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Company’s investment performance and may be subject to change based on tax regulations. (2) Cash distributions for the year ended December 31, 2023 represented 100% net investment income and therefore there was no tax return of capital.
The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Company’s investment performance and may be subject to change based on tax regulations. (2) Cash distributions for the year ended December 31, 2024 represented 100% net investment income and therefore there was no tax return of capital.
The weighted average annualized yield was computed using the effective interest rates as of December 31, 2024, including accretion of OID and excluding any debt investments on non -accrual status. There can be no assurance that the weighted average annualized yield will remain at its current level.
The weighted average annualized yield was computed using the effective interest rates as of December 31, 2025, including accretion of OID and excluding any debt investments on non -accrual status. There can be no assurance that the weighted average annualized yield will remain at its current level.
(2) Totals may not sum due to rounding. The following tables present the top ten industries (based upon Moody’s industry classifications) of the aggregate holdings of the CLOs included in our portfolio, based on par value, as of December 31, 2024 and December 31, 2023.
(2) Totals may not sum due to rounding. The following tables present the top ten industries (based upon Moody’s industry classifications) of the aggregate holdings of the CLOs included in our portfolio, based on par value, as of December 31, 2025 and December 31, 2024.
(3) Cash distributions for the year ended December 31, 2022 represented 100% net investment income and therefore there was no tax return of capital. (4) Totals may not sum due to rounding. (5) Special distribution.
(3) Cash distributions for the year ended December 31, 2023 represented 100% net investment income and therefore there was no tax return of capital. (4) Totals may not sum due to rounding. (5) Special distribution.
The number and amount of investments included in Grade 3, 4 or 5 may fluctuate from year to year. RESULTS OF OPERATIONS Set forth below is a comparison of our results of operations for the years ended December 31, 2024 and 2023.
The number and amount of investments included in Grade 3, 4 or 5 may fluctuate from year to year. RESULTS OF OPERATIONS Set forth below is a comparison of our results of operations for the years ended December 31, 2025 and 2024.
We generally expect to invest between $5 million and $50 million in each of our portfolio companies, although this investment size may vary proportionately as the size of our capital base changes and market conditions warrant.
We generally expect to invest between $5 million and $25 million in each of our portfolio companies, although this investment size may vary proportionately as the size of our capital base changes and market conditions warrant.
Equity securities are not graded. As of December 31, 2024 and 2023 our portfolio had a weighted average grade of 2.3 and 2.3, respectively, based upon the fair value of the debt investments in the portfolio.
Equity securities are not graded. As of December 31, 2025 and 2024 our portfolio had a weighted average grade of 2.2 and 2.3, respectively, based upon the fair value of the debt investments in the portfolio.
For the years ended December 31, 2024 and 2023, no accrual was required as a result of the impact of accumulated net unrealized depreciation and net realized losses on our portfolio.
For the years ended December 31, 2025 and 2024, no accrual was required as a result of the impact of accumulated net unrealized depreciation and net realized losses on our portfolio.
The final determination of the source of all distributions in 2024 will be made after year -end and the amounts represented may be materially different from the amounts disclosed in the final Form 1099 -DIV notice.
The final determination of the source of all distributions in 2025 will be made after year -end and the amounts represented may be materially different from the amounts disclosed in the final Form 1099 -DIV notice.
For the year ended December 31, 2024, the amounts and sources of distributions reported are only estimates and are not being provided for U.S. tax reporting purposes.
For the year ended December 31, 2025, the amounts and sources of distributions reported are only estimates and are not being provided for U.S. tax reporting purposes.
Top Ten Industries December 31, 2024 High tech industries 12.0 % Healthcare & pharmaceuticals 10.3 % Banking, finance, insurance & real estate 10.1 % Business services 9.7 % Hotels, gaming & leisure 4.9 % Media: broadcasting & subscription 4.2 % Construction & building 4.1 % Chemicals, plastics & rubber 4.0 % Telecommunications 3.9 % Consumer services 3.5 % Total 66.7 % Top Ten Industries December 31, 2023 High tech industries 11.3 % Healthcare & pharmaceuticals 10.1 % Banking, finance, insurance & real estate 9.9 % Business services 9.4 % Media: broadcasting & subscription 5.6 % Telecommunications 4.9 % Hotels, gaming & leisure 4.4 % Chemicals, plastics & rubber 3.9 % Beverage, food & tobacco 3.7 % Construction & building 3.5 % Total 66.7 % 68 PORTFOLIO GRADING We have adopted a credit grading system to monitor the quality of our debt investment portfolio.
Top Ten Industries December 31, 2025 High tech industries 11.9 % Business services 10.7 % Banking, finance, insurance & real estate 10.5 % Healthcare & pharmaceuticals 9.7 % Hotels, gaming & leisure 5.3 % Beverage, food & tobacco 4.0 % Construction & building 3.5 % Consumer services 3.4 % Chemicals, plastics & rubber 3.2 % Aerospace & defense 3.1 % Total 65.3 % Top Ten Industries December 31, 2024 High tech industries 12.0 % Healthcare & pharmaceuticals 10.3 % Banking, finance, insurance & real estate 10.1 % Business services 9.7 % Hotels, gaming & leisure 4.9 % Media: broadcasting & subscription 4.2 % Construction & building 4.1 % Chemicals, plastics & rubber 4.0 % Telecommunications 3.9 % Consumer services 3.5 % Total 66.7 % 68 PORTFOLIO GRADING We have adopted a credit grading system to monitor the quality of our debt investment portfolio.
Borrowings In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, is at least 150% immediately after such borrowing. As of December 31, 2024, our asset coverage for borrowed amounts was approximately 227%.
Borrowings In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, is at least 150% immediately after such borrowing. As of December 31, 2025, our asset coverage for borrowed amounts was approximately 191%.
The following table indicates the quarterly portfolio investment activity for the years ended December 31, 2024 and 2023: ($ in millions) Purchases of Investments Repayments of Principal Sales of Investments Reductions to CLO Equity Cost (1) Quarter ended December 31, 2024 $ 25.1 $ 15.0 $ 7.0 $ 3.3 September 30, 2024 47.7 27.9 — 2.5 June 30, 2024 27.3 14.3 3.4 6.3 March 31, 2024 12.1 17.9 1.4 0.8 Total (2) $ 112.2 $ 75.0 $ 11.8 $ 13.0 December 31, 2023 $ 3.5 $ 0.8 $ 3.7 $ 2.8 September 30, 2023 — 14.2 1.9 5.1 June 30, 2023 — 0.4 13.9 4.4 March 31, 2023 8.2 0.3 — 3.0 Total (2) $ 11.7 $ 15.8 $ 19.6 $ 15.3 ____________ (1) Represents reductions to CLO equity cost value (representing distributions received, or entitled to be received, in excess of effective yield interest income and amortized cost adjusted CLO fee note income).
The following table indicates the quarterly portfolio investment activity for the years ended December 31, 2025 and 2024: ($ in millions) Purchases of Investments Repayments of Principal Sales of Investments Reductions to CLO Equity Cost (1) Quarter ended December 31, 2025 $ 18.0 $ 7.4 $ — $ 2.5 September 30, 2025 58.1 31.3 — 1.7 June 30, 2025 — 0.2 — 1.8 March 31, 2025 16.0 8.7 10.7 1.7 Total $ 92.1 $ 47.6 $ 10.7 $ 7.7 December 31, 2024 $ 25.1 $ 15.0 $ 7.0 $ 3.3 September 30, 2024 47.7 27.9 — 2.5 June 30, 2024 27.3 14.3 3.4 6.3 March 31, 2024 12.1 17.9 1.4 0.8 Total (2) $ 112.2 $ 75.0 $ 11.8 $ 13.0 ____________ (1) Represents reductions to CLO equity cost value (representing distributions received, or entitled to be received, in excess of effective yield interest income and amortized cost adjusted CLO fee note income).
For information regarding results of operations for the year ended December 31, 2022, refer to Part II Item 7 in our Form 10 -K for the year ended December 31, 2023 , as filed with the SEC on March 19, 2024, which is incorporated by reference herein.
For information regarding results of operations for the year ended December 31, 2023, refer to Part II Item 7 in our Form 10-K for the year ended December 31, 2024 , as filed with the SEC on March 5, 2025, which is incorporated by reference herein.
Contractual obligations (in millions) Principal Amount Payments Due by Period Less than 1 year 1 – 3 years 3 – 5 years More than 5 years Long-term debt obligations: 6.25% Unsecured Notes $ 44.8 $ — $ 44.8 $ — $ — 5.50% Unsecured Notes 80.5 — — 80.5 — $ 125.3 $ — $ 44.8 $ 80.5 $ — Share Issuance and Repurchase Programs On August 22, 2023, we entered into Amendment No. 1 to the Equity Distribution Agreement dated August 1, 2019 with Ladenburg Thalmann & Co. through which we may offer for sale, from time to time, up to $150.0 million of our common stock through an ATM offering.
Payments Due by Period Contractual obligations (in millions) Principal Amount Less than 1 year 1 – 3 years 3 – 5 years More than 5 years Long-term debt obligations: 7.75% Unsecured Notes $ 74.8 $ — $ — $ 74.8 $ — 5.50% Unsecured Notes 80.5 — 80.5 — — $ 155.3 $ — $ 80.5 $ 74.8 $ — Share Issuance and Repurchase Programs On August 22, 2023, we entered into Amendment No. 1 to the Equity Distribution Agreement dated August 1, 2019 with Ladenburg Thalmann & Co. through which we may offer for sale, from time to time, up to $150.0 million of our common stock through an ATM offering.
For the year ended December 31, 2024, the net increase in net assets resulting from net investment income per common share was $0.42 (basic and diluted), compared to $0.51 (basic and diluted) for the year ended December 31, 2023, based on the weighted average common shares outstanding for the respective periods.
For the year ended December 31, 2025, the net increase in net assets resulting from net investment income per common share was $0.30 (basic and diluted), compared to $0.42 (basic and diluted) for the year ended December 31, 2024, based on the weighted average common shares outstanding for the respective periods.
The forward -looking statements contained in this Annual Report on Form 10 -K involve risks and uncertainties, including statements as to: • our future operating results, including our ability to achieve objectives; • our business prospects and the prospects of our portfolio companies; • the impact of investments that we expect to make; • our contractual arrangements and relationships with third parties; • the dependence of our future success on the general economy and its impact on the industries in which we invest; • the ability of our portfolio companies and CLO investments to achieve their objectives; • the valuation of our investments in portfolio companies and CLOs, particularly those having no liquid trading market; • market conditions and our ability to access alternative debt markets and additional debt and equity capital; • our expected financings and investments; • the adequacy of our cash resources and working capital; • the timing of cash flows, if any, from the operations of our portfolio companies and CLO investments; and • the ability of our investment adviser to locate suitable investments for us and monitor and administer our investments. 63 These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward -looking statements, including without limitation: • an economic downturn could impair our portfolio companies’ and CLO investments’ ability to continue to operate, which could lead to the loss of some or all of our investments in such portfolio companies and CLO investments; • a contraction of available credit and/or an inability to access the equity markets could impair our lending and investment activities; • interest rate volatility could adversely affect our results, particularly because we use leverage as part of our investment strategy; • inflation and its impact on our investment activities and the industries in which we invest; • currency fluctuations could adversely affect the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars; • the impact of information technology system failures, data security breaches, data privacy compliance, network disruptions and cybersecurity attacks; and • the risks, uncertainties and other factors we identify in Item 1A.
The forward -looking statements contained in this Annual Report on Form 10 -K involve risks and uncertainties, including statements as to: • our future operating results, including our ability to achieve objectives; • our business prospects and the prospects of our portfolio companies; • the impact of investments that we expect to make; • our contractual arrangements and relationships with third parties; • the dependence of our future success on the general economy and its impact on the industries in which we invest; • the ability of our portfolio companies and CLO investments to achieve their objectives; • the valuation of our investments in portfolio companies and CLOs, particularly those having no liquid trading market; • market conditions and our ability to access alternative debt markets and additional debt and equity capital; • our expected financings and investments; • the adequacy of our cash resources and working capital; • the timing of cash flows, if any, from the operations of our portfolio companies and CLO investments; and • the ability of our investment adviser to locate suitable investments for us and monitor and administer our investments. 63 These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward -looking statements, including without limitation: • general economic, political and industry trends and other external factors, including government shutdowns and uncertainty surrounding the financial and political stability of the United States and other countries; • a contraction of available credit and/or an inability to access the equity markets could impair our lending and investment activities; • interest rate volatility could adversely affect our results, particularly because we use leverage as part of our investment strategy; • inflation and its impact on our investment activities and the industries in which we invest; • currency fluctuations could adversely affect the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars; • the impact of information technology system failures, data security breaches, data privacy compliance, network disruptions and cybersecurity attacks; and • the risks, uncertainties and other factors we identify in Item 1A.
The fair value of the 6.25% Unsecured Notes and 5.50% Unsecured Notes are based upon the closing price on the last day of the period. The 6.25% Unsecured Notes and 5.50% Unsecured Notes are listed on the NASDAQ Global Select Market (trading symbol “OXSQZ” and “OXSQG”, respectively).
The fair value of the 5.50% Unsecured Notes, 7.75% Unsecured Notes, and 6.25% Unsecured Notes are based upon the closing price on the last day of the period. The 5.50% Unsecured Notes and 7.75% Unsecured Notes are listed on the NASDAQ Global Select Market (trading symbol “OXSQG” and “OXSQH”, respectively).
Qualifying assets must represent at least 70% of the Company’s total assets at the time of acquisition of any additional non -qualifying assets. As of December 31, 2024 and 2023, we held qualifying assets that represented 63.8% and 70.6%, respectively, of the total assets.
Qualifying assets must represent at least 70% of the Company’s total assets at the time of acquisition of any additional non -qualifying assets. As of December 31, 2025 and 2024, we held qualifying assets that represented 68.8% and 63.8%, respectively, of the total assets.
For the year ended December 31, 2024, the net increase in net assets resulting from operations per common share was $0.09 (basic and diluted), compared to a net increase in net assets per common share of $0.32 (basic and diluted) for the year ended December 31, 2023, based on the weighted average common shares outstanding for the respective periods.
For the year ended December 31, 2025, the net decrease in net assets resulting from operations per common share was $0.25 (basic and diluted), compared to a net increase in net assets per common share of $0.09 (basic and diluted) for the year ended December 31, 2024, based on the weighted average common shares outstanding for the respective periods.
In addition, we receive principal repayments of some of our investments prior to their scheduled maturity date. The frequency or volume of these repayments may fluctuate significantly from period to period. For the years ended December 31, 2024 and December 31, 2023, we had loan principal repayments of approximately $75.0 million and approximately $15.8 million, respectively.
In addition, we receive principal repayments of some of our investments prior to their scheduled maturity date. The frequency or volume of these repayments may fluctuate significantly from period to period. For the years ended December 31, 2025 and December 31, 2024, we had loan principal repayments of approximately $47.6 million and approximately $75.0 million, respectively.
Full repayment of the outstanding amount of OXSQ’s cost basis is expected for the specific tranche. — — % — — % 5 Full repayment of the outstanding amount of OXSQ’s cost basis is not expected for the specific tranche and the investment is placed on non-accrual status. 42.9 14.8 % 1.7 1.0 % Total $ 290.7 100.0 % $ 179.5 100.0 % 69 We expect that a portion of our investments will be in the Grades 3, 4 or 5 categories from time to time, and, as such, we will be required to work with troubled portfolio companies to improve their business and protect our investment.
Full repayment of the outstanding amount of OXSQ’s cost basis is expected for the specific tranche. — — % — — % 5 Full repayment of the outstanding amount of OXSQ’s cost basis is not expected for the specific tranche and the investment is placed on non-accrual status 2.5 1.2 % 0.5 0.3 % Total $ 202.0 100.0 % $ 150.7 100.0 % 69 We expect that a portion of our investments will be in the Grades 3, 4 or 5 categories from time to time, and, as such, we will be required to work with troubled portfolio companies to improve their business and protect our investment.
As of December 31, 2023, our asset coverage for borrowed amounts was approximately 219%. The following are our outstanding principal amounts, carrying values and fair values of our borrowings as of December 31, 2024 and December 31, 2023.
As of December 31, 2024, our asset coverage for borrowed amounts was approximately 227%. The following are our outstanding principal amounts, carrying values and fair values of our borrowings as of December 31, 2025 and December 31, 2024.
Refer to the table below, which reconciles the investment portfolio for the year ended December 31, 2024 and the year ended December 31, 2023. 65 A reconciliation of the investment portfolio for the years ended December 31, 2024 and 2023 follows: ($ in millions) December 31, 2024 December 31, 2023 Beginning investment portfolio $ 266.9 $ 314.7 Portfolio investments acquired 112.2 11.7 Debt repayments (75.0 ) (15.8 ) Sales of securities (11.8 ) (19.6 ) Reductions to CLO equity cost value (1) (13.0 ) (15.3 ) Accretion of discounts on investments 1.7 1.1 PIK income 0.5 — Net change in unrealized appreciation/(depreciation) on investments 75.7 7.1 Net realized losses on investments (96.2 ) (17.1 ) Ending investment portfolio (2) $ 260.9 $ 266.9 ____________ (1) For the year ended December 31, 2024, the reductions to CLO equity cost value of approximately $13.0 million represented the distributions received, or entitled to be received, on our investments held in CLO equity subordinated and income notes of approximately $28.4 million, plus the amortization of cost on our CLO fee notes of approximately $71,000, less the effective yield interest income recognized on our CLO equity subordinated and income notes of approximately $15.4 million.
Refer to the table below, which reconciles the investment portfolio for the year ended December 31, 2025 and the year ended December 31, 2024. 65 A reconciliation of the investment portfolio for the years ended December 31, 2025 and 2024 follows: ($ in millions) December 31, 2025 December 31, 2024 Beginning investment portfolio $ 260.9 $ 266.9 Portfolio investments acquired 92.1 112.2 Debt repayments (47.6 ) (75.0 ) Sales of securities (10.7 ) (11.8 ) Reductions to CLO equity cost value (1) (7.7 ) (13.0 ) Accretion of discounts on investments 2.9 1.7 PIK income 3.2 0.5 Net change in unrealized appreciation/(depreciation) on investments (24.3 ) 75.7 Net realized losses on investments (16.8 ) (96.2 ) Ending investment portfolio (2) $ 251.7 $ 260.9 ____________ (1) For the year ended December 31, 2025, the reductions to CLO equity cost value of approximately $7.7 million represented the distributions received, or entitled to be received, on our investments held in CLO equity subordinated and income notes of approximately $24.1 million, plus the amortization of cost on our CLO fee notes of approximately $57,000, less the effective yield interest income recognized on our CLO equity subordinated and income notes of approximately $16.5 million.
The quantitative inputs and data points that determine which method to utilize to value any given investment include, but are not limited to: • Bid/offer prices; • Depth, which is defined as the number of securities firms that make a market in a respective corporate syndicated loan and contribute data on the corporate syndicated loan to market data providers; • Liquidity score, which is a metric to help market participants ascertain their ability to exit a position within a given time frame and near a prevailing indicative price, which provides a benchmark of liquidity risk; • Financial performance of the underlying portfolio company; • Recent business developments; • Covenant compliance; and • Recent transactions. 79 In instances where secondary market data is limited, we may engage a third -party valuation firm to independently determine an estimate of fair value.
The quantitative inputs and data points that determine which method to utilize to value any given investment include, but are not limited to: • Bid/offer prices; • Depth, which is defined as the number of securities firms that make a market in a respective corporate syndicated loan and contribute data on the corporate syndicated loan to market data providers; • Liquidity score, which is a metric to help market participants ascertain their ability to exit a position within a given time frame and near a prevailing indicative price, which provides a benchmark of liquidity risk; • Financial performance of the underlying portfolio company; 79 • Recent business developments; • Covenant compliance; and • Recent transactions.
Full repayment of the outstanding amount of OXSQ’s cost basis and interest is expected for the specific tranche. 72.3 24.8 % 43.3 24.1 % 4 A loss of interest income has occurred or is expected to occur and, in most cases, the investment is placed on non-accrual status.
Full repayment of the outstanding amount of OXSQ’s cost basis and interest is expected for the specific tranche. 58.9 31.3 % 24.1 16.3 % 4 A loss of interest income has occurred or is expected to occur and, in most cases, the investment is placed on non-accrual status.
LIQUIDITY AND CAPITAL RESOURCES During the year ended December 31, 2024, cash and cash equivalents increased from approximately $5.7 million at the beginning of the period to approximately $34.9 million at the end of the period.
LIQUIDITY AND CAPITAL RESOURCES During the year ended December 31, 2025, cash and cash equivalents increased from approximately $34.9 million at the beginning of the period to approximately $51.9 million at the end of the period.
Realized and Unrealized Gains/Losses on Investments For the year ended December 31, 2024, we recognized net realized losses on investments of approximately $96.2 million, which primarily represents losses incurred upon the extinguishment of multiple reorganized and refinanced senior secured notes upon transfer into new reorganized/refinanced securities, as well as the write off of two senior secured notes which were previously on non -accrual status.
(5.8 ) Net all other (2.1 ) Total $ (24.3 ) For the year ended December 31, 2024, we recognized net realized losses on investments of approximately $96.2 million, which primarily represents losses incurred upon the extinguishment of multiple reorganized and refinanced senior secured notes upon transfer into new reorganized/refinanced securities, as well as the write off of two senior secured notes which were previously on non -accrual status.
At December 31, 2024 and 2023, our debt investment portfolio was graded as follows: ($ in millions) December 31, 2024 Grade Summary Description Principal Value Percentage of Debt Portfolio Portfolio at Fair Value Percentage of Debt Portfolio 1 Company is ahead of expectations and/or outperforming financial covenant requirements of the specific tranche and such trend is expected to continue. $ — — % $ — — % 2 Full repayment of the outstanding amount of OXSQ’s cost basis and interest is expected for the specific tranche. 117.5 58.2 % 112.2 74.5 % 3 Closer monitoring is required.
At December 31, 2025 and 2024, our debt investment portfolio was graded as follows: ($ in millions) December 31, 2025 Grade Summary Description Principal Value Percentage of Debt Portfolio Portfolio at Fair Value Percentage of Debt Portfolio 1 Company is ahead of expectations and/or outperforming financial covenant requirements of the specific tranche and such trend is expected to continue. $ — — % $ — — % 2 Full repayment of the outstanding amount of OXSQ’s cost basis and interest is expected for the specific tranche. 129.1 68.7 % 123.2 83.7 % 3 Closer monitoring is required.
The change year over year was largely due to approximately $20.6 million of net realized and unrealized losses for the year ended December 31, 2024, compared to approximately $10.1 million of net realized and unrealized losses for the year ended December 31, 2023, as discussed above.
The change year over year was largely due to approximately $41.3 million of net realized and unrealized losses for the year ended December 31, 2025, compared to approximately $20.6 million of net realized and unrealized losses for the year ended December 31, 2024, as discussed above.
The aggregate accrued interest which remained payable as of December 31, 2024 and 2023, was approximately $1.2 million.
The aggregate accrued interest which remained payable as of December 31, 2025, was approximately $1.7 million. The aggregate accrued interest which remained payable as of December 31, 2024, was approximately $1.2 million.
RECENT DEVELOPMENTS The following distributions payable to stockholders are shown below: Date Declared Record Dates Payable Dates Per Share Distribution Amount Declared October 31, 2024 January 17, 2025 January 31, 2025 $0.035 October 31, 2024 February 14, 2025 February 28, 2025 $0.035 October 31, 2024 March 17, 2025 March 31, 2025 $0.035 February 27, 2025 April 16, 2025 April 30, 2025 $0.035 February 27, 2025 May 16, 2025 May 30, 2025 $0.035 February 27, 2025 June 16, 2025 June 30, 2025 $0.035
RECENT DEVELOPMENTS The following distributions payable to stockholders are shown below: Date Declared Record Dates Payable Dates Per Share Distribution Amount Declared October 30, 2025 January 16, 2026 January 30, 2026 $0.035 October 30, 2025 February 13, 2026 February 27, 2026 $0.035 October 30, 2025 March 17, 2026 March 31, 2026 $0.035 February 26, 2026 April 16, 2026 April 30, 2026 $0.035 February 26, 2026 May 15, 2026 May 29, 2026 $0.035 February 26, 2026 June 16, 2026 June 30, 2026 $0.035
PORTFOLIO COMPOSITION AND INVESTMENT ACTIVITY The total fair value of our investment portfolio was approximately $260.9 million and $266.9 million as of December 31, 2024 and December 31, 2023, respectively.
PORTFOLIO COMPOSITION AND INVESTMENT ACTIVITY The total fair value of our investment portfolio was approximately $251.7 million and $260.9 million as of December 31, 2025 and December 31, 2024, respectively.
Full repayment of the outstanding amount of OXSQ’s cost basis is expected for the specific tranche. — — % — — % 5 Full repayment of the outstanding amount of OXSQ’s cost basis is not expected for the specific tranche and the investment is placed on non-accrual status 2.5 1.2 % 0.5 0.3 % Total $ 202.0 100.0 % $ 150.7 100.0 % ($ in millions) December 31, 2023 Grade Summary Description Principal Value Percentage of Debt Portfolio Portfolio at Fair Value Percentage of Debt Portfolio 1 Company is ahead of expectations and/or outperforming financial covenant requirements of the specific tranche and such trend is expected to continue. $ — — % $ — — % 2 Full repayment of the outstanding amount of OXSQ’s cost basis and interest is expected for the specific tranche. 175.5 60.4 % 134.5 74.9 % 3 Closer monitoring is required.
Full repayment of the outstanding amount of OXSQ’s cost basis is expected for the specific tranche. — — % — — % 5 Full repayment of the outstanding amount of OXSQ’s cost basis is not expected for the specific tranche and the investment is placed on non-accrual status — — % — — % Total $ 188.0 100.0 % $ 147.3 100.0 % ($ in millions) December 31, 2024 Grade Summary Description Principal Value Percentage of Debt Portfolio Portfolio at Fair Value Percentage of Debt Portfolio 1 Company is ahead of expectations and/or outperforming financial covenant requirements of the specific tranche and such trend is expected to continue. $ — — % $ — — % 2 Full repayment of the outstanding amount of OXSQ’s cost basis and interest is expected for the specific tranche. 117.5 58.2 % 112.2 74.5 % 3 Closer monitoring is required.
The following table shows the fair value of our portfolio of investments by asset class as of December 31, 2024 and 2023: ($ in millions) December 31, 2024 December 31, 2023 Investments at Fair Value Percentage of Total Portfolio Investments at Fair Value Percentage of Total Portfolio Senior Secured Notes $ 150.7 57.8 % $ 179.5 67.2 % CLO Equity 104.6 40.1 % 82.2 30.8 % Equity and Other Investments 5.6 2.1 % 5.3 2.0 % Total (1) $ 260.9 100.0 % $ 266.9 100.0 % ____________ (1) Totals may not sum due to rounding.
The following table shows the fair value of our portfolio of investments by asset class as of December 31, 2025 and 2024: ($ in millions) December 31, 2025 December 31, 2024 Investments at Fair Value Percentage of Total Portfolio Investments at Fair Value Percentage of Total Portfolio Senior Secured Notes $ 147.3 58.5 % $ 150.7 57.8 % CLO Equity 95.1 37.8 % 104.6 40.1 % Equity and Other Investments 9.4 3.7 % 5.6 2.1 % Total (1) $ 251.7 100.0 % $ 260.9 100.0 % ____________ (1) Totals may not sum due to rounding.
For the year ended December 31, 2023, the reductions to CLO equity cost value of approximately $15.3 million represented the distributions received, or entitled to be received, on our investments held in CLO equity subordinated and income notes of approximately $32.0 million, plus the amortization of cost on our CLO fee notes of approximately $123,000, less the effective yield interest income recognized on our CLO equity subordinated and income notes of approximately $16.8 million.
For the year ended December 31, 2024, the reductions to CLO equity cost value of approximately $13.0 million represented the distributions received, or entitled to be received, on our investments held in CLO equity subordinated and income notes of approximately $28.4 million, plus the amortization of cost on our CLO fee notes of approximately $71,000, less the effective yield interest income recognized on our CLO equity subordinated and income notes of approximately $15.4 million.
This includes net unrealized appreciation of approximately $13.0 million resulting from reductions to the cost value of our CLO equity investments representing the difference between distributions received, or entitled to be received, on our investments held in CLO equity subordinated notes and fee notes, of approximately $28.4 million and the effective yield interest income recognized on our CLO equity subordinated notes and the amortized cost adjusted income on our CLO equity fee notes of approximately $15.3 million.
This includes net unrealized appreciation of approximately $7.7 million resulting from reductions to the cost value of our CLO equity investments representing the difference between distributions received, or entitled to be received, on our investments held in CLO equity subordinated notes and fee notes, of approximately $24.1 million and the effective yield interest income recognized on our CLO equity subordinated notes and the amortized cost adjusted income on our CLO equity fee notes of approximately $16.5 million.
No additional non -qualifying assets were acquired during the periods, if any, when qualifying assets were less than 70% of the total assets. 67 The following table shows our portfolio of investments by industry at fair value, in millions, as of December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Investments at Fair Value Percentage of Fair Value Investments at Fair Value Percentage of Fair Value ($ in millions) ($ in millions) Structured finance (1) $ 104.6 40.2 % $ 82.2 30.8 % Business services 45.5 17.4 % 43.0 16.1 % Software 42.0 16.1 % 66.0 24.7 % Healthcare 18.9 7.2 % 28.4 10.7 % Industrials 16.0 6.1 % — — % Food and Beverage 10.0 3.8 % — — % Telecommunication Services 7.2 2.8 % 20.9 7.8 % Aerospace and Defense 6.0 2.3 % — — % Materials 6.0 2.3 % — — % IT Consulting 4.6 1.8 % 5.3 2.0 % Diversified Insurance — — % 13.9 5.2 % Utilities — — % 7.2 2.7 % Total (2) $ 260.9 100.0 % $ 266.9 100.0 % ____________ (1) Reflects our equity investments in CLOs as of December 31, 2024 and December 31, 2023, respectively.
No additional non -qualifying assets were acquired during the periods, if any, when qualifying assets were less than 70% of the total assets. 67 The following table shows our portfolio of investments by industry at fair value, in millions, as of December 31, 2025 and 2024: December 31, 2025 December 31, 2024 Investments at Fair Value Percentage of Fair Value Investments at Fair Value Percentage of Fair Value ($ in millions) ($ in millions) Structured finance (1) $ 95.1 37.7 % $ 104.6 40.2 % Software 43.7 17.4 % 42.0 16.1 % Business services 32.2 12.8 % 45.5 17.4 % Healthcare 22.1 8.8 % 18.9 7.2 % Industrials 19.9 7.9 % 16.0 6.1 % Telecommunication services 11.0 4.4 % 7.2 2.8 % Food and beverage 9.8 3.9 % 10.0 3.8 % Materials 8.9 3.5 % 6.0 2.3 % IT consulting 5.0 2.0 % 4.6 1.8 % Artificial intelligence 4.0 1.6 % — — % Aerospace and defense — — % 6.0 2.3 % Total (2) $ 251.7 100.0 % $ 260.9 100.0 % ____________ (1) Reflects our equity investments in CLOs as of December 31, 2025 and December 31, 2024, respectively.
Net Increase in Net Assets Resulting from Operations Net increase in net assets resulting from operations for the year ended December 31, 2024 was approximately $5.9 million, compared to a net increase of $17.2 million for year ended December 31, 2023.
Net Decrease/Increase in Net Assets Resulting from Operations Net decrease in net assets resulting from operations for the year ended December 31, 2025 was approximately $18.7 million, compared to a net increase of $5.9 million for year ended December 31, 2024.
Compensation expense was approximately $747,000 for the year ended December 31, 2024, compared to approximately $825,000 for the year ended December 31, 2023, reflecting the allocation of compensation expenses for the services of our Chief Financial Officer, accounting personnel, and other administrative support staff. As of December 31, 2024 and 2023, there was no compensation expense payable.
Compensation expense was approximately $950,000 for the year ended December 31, 2025, compared to approximately $747,000 for the year ended December 31, 2024. Compensation expense reflects the allocation of salaries for the services of our Chief Financial Officer, accounting personnel, and other administrative support staff. As of December 31, 2025, there was approximately $26,000 of compensation expense payable.
The tables below summarize the components of interest expense for the years ended December 31, 2024 and 2023: ($ in thousands) Year Ended December 31, 2024 Stated Interest Expense Amortization of Deferred Debt Issuance Costs Loss on Extinguishment Total 6.25% Unsecured Notes $ 2,799.4 $ 233.8 — 3,033.2 5.50% Unsecured Notes 4,427.5 386.6 — 4,814.1 Total $ 7,226.9 $ 620.4 $ — $ 7,847.3 ($ in thousands) Year Ended December 31, 2023 Stated Interest Expense Amortization of Deferred Debt Issuance Costs Loss on Extinguishment Total 6.50% Unsecured Notes $ 2,765.0 $ 215.3 $ 190.4 $ 3,170.6 6.25% Unsecured Notes 2,799.4 233.2 — 3,032.6 5.50% Unsecured Notes 4,427.5 385.5 — 4,813.0 Total $ 9,991.9 $ 834.0 $ 190.4 $ 11,016.2 Distributions In order to qualify for tax treatment as a RIC, we are required, under Subchapter M of the Code, to distribute at least 90% of our ordinary income and realized net short -term capital gains in excess of realized net long -term capital losses to our stockholders on an annual basis.
The tables below summarize the components of interest expense for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 ($ in thousands) Stated Interest Expense Amortization of Deferred Debt Issuance Costs Loss on Extinguishment Total (1) 5.50% Unsecured Notes $ 4,427.5 $ 385.5 $ — $ 4,813.0 7.75% Unsecured Notes 2,317.3 228.8 — 2,546.0 6.25% Unsecured Notes 1,741.5 143.7 166.1 2,051.3 Total (1) $ 8,486.2 $ 758.0 $ 166.1 $ 9,410.4 Year Ended December 31, 2024 ($ in thousands) Stated Interest Expense Amortization of Deferred Debt Issuance Costs Loss on Extinguishment Total 6.25% Unsecured Notes $ 2,799.4 $ 233.8 $ — $ 3,033.2 5.50% Unsecured Notes 4,427.5 386.6 — 4,814.1 Total $ 7,226.9 $ 620.4 $ — $ 7,847.3 ____________ (1) Totals may not sum due to rounding Distributions In order to qualify for tax treatment as a RIC, we are required, under Subchapter M of the Code, to distribute at least 90% of our ordinary income and realized net short -term capital gains in excess of realized net long -term capital losses to our stockholders on an annual basis.
In addition, our total portfolio had a weighted average annualized yield on debt investments of approximately 15.76% as of December 31, 2024.
In addition, our total portfolio had a weighted average annualized yield on debt investments of approximately 14.53% as of December 31, 2025.
During the year ended December 31, 2023, we purchased approximately $11.7 million in portfolio investments, including additional investments of approximately $3.5 million in existing portfolio companies and approximately $8.2 million in new portfolio companies. In certain instances, we receive payments based on scheduled amortization of the outstanding balances.
During the year ended December 31, 2024, we purchased approximately $112.2 million in portfolio investments, including additional investments of approximately $31.0 million in existing portfolio companies and approximately $81.2 million in new portfolio companies. In certain instances, we receive payments based on scheduled amortization of the outstanding balances.
Net cash provided by operating activities for the year ended December 31, 2024, consisting primarily of the items described in “— Results of Operations,” was approximately $25.7 million, largely reflecting repayments of principal of approximately $75.0 million, proceeds from the sale of investments of approximately $11.8 million and reductions to CLO equity cost value of approximately $13.0 million, partially offset by purchases of new investments of approximately $100.2 million.
Net cash used in operating activities for the year ended December 31, 2025, consisting primarily of the items described in “— Results of Operations,” was approximately $13.7 million, largely reflecting purchases of new investments of approximately $98.2 million, offset by repayments of principal of approximately $47.6 million, proceeds from the sale of investments of approximately $10.7 million and reductions to CLO equity cost value of approximately $7.7 million.
(2) Totals may not sum due to rounding. During the year ended December 31, 2024, we purchased approximately $112.2 million in portfolio investments, including additional investments of approximately $31.0 million in existing portfolio companies and approximately $81.2 million in new portfolio companies.
(2) Totals may not sum due to rounding. During the year ended December 31, 2025, we purchased approximately $92.1 million in portfolio investments, including additional investments of approximately $30.9 million in existing portfolio companies and approximately $61.2 million in new portfolio companies.
($ in millions) As of December 31, 2024 December 31, 2023 Principal Amount Carrying Value Fair Value Principal Amount Carrying Value Fair Value 6.25% Unsecured Notes $ 44.8 $ 44.5 $ 44.4 $ 44.8 $ 44.2 $ 42.9 5.50% Unsecured Notes 80.5 79.1 74.7 80.5 78.7 72.5 Total (1) $ 125.3 $ 123.6 $ 119.1 $ 125.3 $ 123.0 $ 115.4 ____________ (1) Totals may not sum due to rounding. 74 The weighted average stated interest rate and weighted average maturity on all our debt outstanding as of December 31, 2024 were 5.77% and 2.8 years, respectively, and as of December 31, 2023 were 5.77% and 3.8 years, respectively.
As of December 31, 2025 December 31, 2024 ($ in millions) Principal Amount Carrying Value Fair Value Principal Amount Carrying Value Fair Value 5.50% Unsecured Notes $ 80.5 $ 79.5 $ 77.8 $ 80.5 $ 79.1 $ 74.7 7.75% Unsecured Notes 74.8 72.1 76.2 — — — 6.25% Unsecured Notes — — — 44.8 $ 44.5 $ 44.4 Total $ 155.3 $ 151.6 $ 154.0 $ 125.3 $ 123.6 $ 119.1 74 The weighted average stated interest rate and weighted average maturity on all our debt outstanding as of December 31, 2025 were 6.58% and 3.5 years, respectively, and as of December 31, 2024 were 5.77% and 2.8 years, respectively.
The change was primary the result of lower operating expenses, partially offset by a decrease in investment income, as discussed above.
The change was primary the result of higher operating expenses and a decrease in investment income, as discussed above.
CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements and related disclosures in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) disclosure of contingent assets and liabilities at the date of the financial statements, and (iii) revenues and expenses during the periods reported.
Information concerning related party transactions is included in the financial statements and related notes, appearing elsewhere in this annual report on Form 10 -K . 78 CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements and related disclosures in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) disclosure of contingent assets and liabilities at the date of the financial statements, and (iii) revenues and expenses during the periods reported.
For the year ended December 31, 2023, our net change in unrealized appreciation was approximately $7.1 million, composed of approximately $16.6 million in gross unrealized appreciation, approximately $28.7 million in gross unrealized depreciation and approximately $19.2 million relating to the reversal of prior period net unrealized depreciation as investment gains and losses were realized.
For the year ended December 31, 2025, our net change in unrealized depreciation was approximately $24.3 million, comprised of approximately $2.0 million in gross unrealized appreciation, approximately $45.3 million in gross unrealized depreciation and approximately $19.0 million relating to the reversal of prior period net unrealized depreciation as investment gains and losses were realized.
As of December 31, 2023, we had investments in debt securities of, or loans to, 19 portfolio companies, with a fair value of approximately $179.5 million, CLO equity investments of approximately $82.2 million and equity and other investments of approximately $5.3 million.
As of December 31, 2025, we had investments in debt securities of, or loans to, 19 portfolio companies, with a fair value of approximately $147.3 million, CLO equity investments of approximately $95.1 million, and equity and other investments of approximately $9.4 million.
We sold a total of 10,132,282 shares of common stock pursuant to the ATM offering during the year ended December 31, 2024. The total amount of capital raised net of underwriting fees and offering costs was approximately $29.2 million during the year ended December 31, 2024.
We sold a total of 15,910,780 shares of common stock pursuant to the ATM offering during the year ended December 31, 2025. The total amount of capital raised net of underwriting fees and offering costs was approximately $34.8 million during the year ended December 31, 2025.
We expect that our investment portfolio will be diversified among a large number of investments with few investments, if any, exceeding 5.0% of the total portfolio. As of December 31, 2024, our debt investments (excluding debt investments on non -accrual status) had stated interest rates of between 7.61% and 13.13% and maturity dates of between 3 and 82 months.
We expect that our investment portfolio will be diversified among a large number of investments with few investments, if any, exceeding 5.0% of the total portfolio. As of December 31, 2025, our debt investments had stated interest rates of between 6.47% and 12.97% and maturity dates of between 3 and 91 months.
(f/k/a ScribeAmerica, LLC) 0.2 Net all others 0.5 Total repayments $ 75.0 66 Portfolio activity also reflects sales of securities in the amounts of approximately $11.8 million and approximately $19.6 million for the years ended December 31, 2024 and 2023 respectively.
(f/k/a Verifone Systems, Inc.) 1.7 Forta, LLC (f/k/a Help/Systems Holdings, Inc.) 1.2 Net all others 1.5 Total repayments $ 47.6 66 Portfolio activity also reflects sales of securities in the amounts of approximately $10.7 million and approximately $11.8 million for the years ended December 31, 2025 and 2024 respectively.
As of December 31, 2024, our income producing debt investments had stated interest rates of between 7.61% and 13.13% and maturity dates of between 3 and 82 months. As of December 31, 2023, our debt investments had stated interest rates of between 9.22% and 16.00% and maturity dates of between 0 and 74 months.
As of December 31, 2025, our income producing debt investments had stated interest rates of between 6.47% and 12.97% and maturity dates of between 3 and 91 months. As of December 31, 2024, our income producing debt investments had stated interest rates of between 7.61% and 13.13% and maturity dates of between 3 and 82 months.
The aggregate accrued interest on existing debt which remained payable as of December 31, 2024 and 2023 was approximately $1.2 million. The Base Fee decreased by approximately $0.3 million in 2024 compared to 2023 due to lower average adjusted gross assets in 2024.
The Base Fee decreased by approximately $0.1 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, due to lower average adjusted gross assets in 2025. The Base Fee which remained payable to Oxford Square Management as of December 31, 2025 and 2024 was approximately $1.0 million and $1.2 million, respectively.
Investment Income The following table sets forth the components of investment income for the years ended December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Interest Income Stated interest income $ 22,453,772 $ 32,434,732 PIK interest income 462,883 — Original issue discount and market discount income 1,688,134 1,094,874 Discount income derived from unscheduled remittances at par 324,498 62,560 Total interest income 24,929,287 33,592,166 Income from securitization vehicles and investments 15,403,586 16,796,699 Other income Fee letters 661,281 649,260 Money market fund income and all other fees 1,689,051 786,056 Total other income 2,350,332 1,435,316 Total investment income $ 42,683,205 $ 51,824,181 The decrease in total investment income of approximately $9.1 million for the year ended December 31, 2024 from the year ended December 31, 2023 was largely due to a decrease of stated interest income from our debt investments (approximately $10.0 million) resulting from multiple restructurings and refinancings that occurred during the year ended December 31, 2024 and a decrease in floating interest rates.
Investment Income The following table sets forth the components of investment income for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 Year Ended December 31, 2024 Interest income Stated interest income $ 15,344,666 $ 22,453,772 PIK interest income 2,853,987 462,883 Original issue discount and market discount income 2,863,204 1,688,134 Discount income derived from unscheduled remittances at par 29,368 324,498 Total interest income $ 21,091,225 $ 24,929,287 Income from securitization vehicles and investments $ 16,452,752 $ 15,403,586 Other income Fee letters $ 536,998 $ 661,281 Money market fund income and all other fees 2,257,898 1,689,051 Total other income $ 2,794,896 $ 2,350,332 Total investment income $ 40,338,873 $ 42,683,205 The decrease in total investment income of approximately $2.3 million for the year ended December 31, 2025 from the year ended December 31, 2024 was largely due to a decrease of stated interest income from our debt investments (approximately $7.1 million) resulting from restructurings and refinancings that occurred during the year ended December 31, 2025, a decrease in floating interest rates, and lower average outstanding principal of debt investments.
That decrease was partially offset by an increase in money market fund income from overnight invested cash interest earned of approximately $0.9 million. The total principal outstanding on income producing debt investments as of December 31, 2024 and December 31, 2023 was approximately $199.5 million and $247.7 million, respectively.
That decrease was partially offset by an increase in income from securitization vehicles and investments of approximately $1.0 million, as well as an increase in other income of approximately $0.4 million. The total principal outstanding on income producing debt investments as of December 31, 2025 and December 31, 2024 was approximately $188.0 million and $199.5 million, respectively.
The decrease in the value of investments during the year ended December 31, 2024 was due primarily to repayments of principal of approximately $75.0 million, sales of securities totaling approximately $11.8 million, and realized losses of approximately $96.2 million, partially offset by a net change in unrealized appreciation on our investment portfolio of approximately $75.7 million (which incorporates reductions to CLO equity cost value of $13.0 million) and purchases of investments of approximately $112.2 million.
The decrease in the value of investments during the year ended December 31, 2025 was due primarily to repayments of principal of approximately $47.6 million, sales of securities totaling approximately $10.7 million, realized losses of approximately $16.8 million, and unrealized depreciation of $24.3 million (which incorporates reductions to CLO equity cost value of $7.7 million), partially offset by purchases of investments of approximately $92.1 million.
In addition, our total portfolio had a weighted average yield on debt investments of approximately 15.76% as of December 31, 2024, compared to a weighted average yield on debt investments of 13.30% as of December 31, 2023. 70 Operating Expenses The following table sets forth the components of operating expenses for the years ended December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Interest expense $ 7,847,320 $ 10,825,877 Base Fee 4,310,484 4,613,664 Professional fees 1,537,434 1,426,098 Compensation expense 746,762 825,226 General and administrative 597,883 638,350 Director’s fees 417,500 429,500 Insurance 308,552 329,892 Transfer agent and custodian fees 260,330 246,562 Excise Tax 216,528 1,423,686 Net Investment Income Incentive Fees — 3,705,387 Total operating expenses $ 16,242,793 $ 24,464,242 Total operating expenses for the year ended December 31, 2024 decreased by approximately $8.2 million compared to the year ended December 31, 2023.
In addition, our total portfolio had a weighted average yield on debt investments of approximately 14.53% as of December 31, 2025, compared to a weighted average yield on debt investments of 15.76% as of December 31, 2024. 70 Operating Expenses The following table sets forth the components of operating expenses for the years ended December 31, 2025 and 2024: December 31, 2025 December 31, 2024 Interest expense $ 9,244,234 $ 7,847,320 Base Fee 4,184,721 4,310,484 Professional fees 1,557,637 1,537,434 Compensation expense 950,164 746,762 General and administrative 615,660 597,883 Director’s fees 408,500 417,500 Excise tax 354,957 216,528 Insurance 267,450 308,552 Transfer agent and custodian fees 162,626 260,330 Total operating expenses $ 17,745,949 $ 16,242,793 Total operating expenses for the year ended December 31, 2025 increased by approximately $1.5 million compared to the year ended December 31, 2024.
The components of the net change in unrealized appreciation/(depreciation) during the year ended December 31, 2024 were as follows ($ in millions): Portfolio Company Changes in Unrealized Appreciation Premiere Global Services, Inc. $ 21.3 ConvergeOne Holdings, Inc. 13.8 McAfee Enterprise, LLC (f/k/a Magenta Buyer, LLC) 10.5 Careismatic Brands, LLC 10.4 Dodge Data & Analytics, LLC 9.0 Net all other 10.7 Total $ 75.7 For the year ended December 31, 2023, we recognized net realized losses on investments of approximately $17.1 million, which primarily represents sales of multiple CLO equity investments.
This includes net unrealized appreciation of approximately $13.0 million resulting from reductions to the cost value of our CLO equity investments representing the difference between distributions received, or entitled to be received, on our investments held in CLO equity subordinated notes and fee notes, of approximately $28.4 million and the effective yield interest income recognized on our CLO equity subordinated notes and the amortized cost adjusted income on our CLO equity fee notes of approximately $15.3 million. 72 The components of the net change in unrealized appreciation/(depreciation) during the year ended December 31, 2024 were as follows ($ in millions): Portfolio Company Changes in Unrealized Appreciation Premiere Global Services, Inc. $ 21.3 ConvergeOne Holdings, Inc. 13.8 McAfee Enterprise, LLC (f/k/a Magenta Buyer, LLC) 10.5 Careismatic Brands, LLC 10.4 Dodge Data & Analytics, LLC 9.0 Net all other 10.7 Total $ 75.7 Net Increase in Net Assets Resulting from Net Investment Income Net investment income for the year ended December 31, 2025 was approximately $22.6 million, compared to $26.4 million for the year ended December 31, 2024.
The sales during the year ended December 31, 2024 were as follows ($ in millions): Portfolio Company 2024 Sales Quest Software, Inc. $ 7.0 Veritas USA, Inc. 3.4 Octagon Investment Partners 49, Ltd. 1.4 Total sales $ 11.8 As of December 31, 2024, we had investments in debt securities of, or loans to, 21 portfolio companies, with a fair value of approximately $150.7 million, CLO equity investments of approximately $104.6 million and equity and other investments of approximately $5.6 million.
As of December 31, 2024, we had investments in debt securities of, or loans to, 21 portfolio companies, with a fair value of approximately $150.7 million, CLO equity investments of approximately $104.6 million and equity and other investments of approximately $5.6 million.
During the year ended December 31, 2024, net cash provided by financing activities was approximately $3.5 million, reflecting the proceeds from issuance of common stock from our ATM program (net of underwriting fees and offering costs) of approximately $29.2 million, partially offset by the payment of distributions of approximately $25.8 million. 73 Contractual Obligations We have certain obligations with respect to the investment advisory and administration services we receive.
During the year ended December 31, 2025, net cash provided by financing activities was approximately $30.7 million, reflecting the proceeds from issuance of common stock from our ATM program (net of underwriting fees and offering costs) of approximately $34.8 million and net proceeds from the issuance of 7.75% Unsecured Notes of approximately $71.9 million, partially offset by the payment of distributions of approximately $31.3 million and principal repayment of 6.25% Unsecured Notes of approximately $44.8 million.
The EV is then attributed to each debt tranche, preferred equity tranche, and common equity, in order of seniority, to arrive at a valuation for our holdings. Generally speaking, as estimated EV increases, the fair value of our investments will also increase. As market multiples and EBITDA increase, estimated EV will also increase.
This valuation method employs a waterfall method whereby the enterprise value (“EV”) of the company is estimated based on company financial performance inputs, such as EBITDA, and publicly traded comparable company multiples. The EV is then attributed to each debt tranche, preferred equity tranche, and common equity, in order of seniority, to arrive at a valuation for our holdings.
General and administrative expenses, which consist primarily of listing fees, office supplies, facilities costs and other miscellaneous expenses were approximately $598,000 for the year ended December 31, 2024 and decreased by approximately $40,000 from the year ended December 31, 2023. Office supplies, facilities costs and other expenses are allocated to us under the terms of the Administration Agreement.
As of December 31, 2024, there was no compensation expense payable. General and administrative expenses, which consist primarily of market data services, listing fees, office supplies, facilities costs and other miscellaneous expenses were approximately $616,000 for the year ended December 31, 2025 and increased by approximately $18,000 from the year ended December 31, 2024.
Refer to “— Overview”. We incurred approximately $4.3 million for the Base Fee and approximately $1.7 million for administrative services for the year ended December 31, 2024. Refer to “Note 7. Related Party Transactions” in the notes to our financial statements. A summary of our significant contractual payment obligations is as follows as of December 31, 2024.
Related Party Transactions” in the notes to our financial statements. 73 A summary of our significant contractual payment obligations is as follows as of December 31, 2025. Refer to “Note 5. Borrowings” in the notes to our financial statements.
There was no Net Investment Income Incentive Fee for the year ended December 31, 2024, primarily as a result of the Net Investment Income Incentive Fee being reduced as the result of the Total Return Requirement. Net Investment Income Incentive Fees for the year ended December 31, 2023 were approximately $3.7 million.
Office supplies, facilities costs and other expenses are allocated to us under the terms of the Administration Agreement. There was no Net Investment Income Incentive Fee for the years ended December 31, 2025 and 2024, primarily as a result of the Net Investment Income Incentive Fee being reduced as the result of the Total Return Requirement.
The Base Fee which remained payable to Oxford Square Management as of December 31, 2024 and 2023 was approximately $1.2 million and $1.0 million, respectively.
The increase in 2025 is attributable primarily to higher interest expense. Interest expense increased by approximately $1.4 million in 2025 compared to 2024. The aggregate accrued interest on existing debt which remained payable as of December 31, 2025 and 2024 was approximately $1.7 million and $1.2 million, respectively.
The repayments during the year ended December 31, 2024 were as follows ($ in millions): Portfolio Company 2024 Repayments Global Tel Link Corp. $ 16.9 Access CIG, LLC 16.9 Viant Medical Holdings, Inc. 14.5 Affinion Insurance Solutions, Inc.
The repayments during the year ended December 31, 2025 were as follows ($ in millions): Portfolio Company 2025 Repayments Convergint Technologies, LLC $ 11.0 Access CIG, LLC 10.2 Nielsen Consumer, LLC 10.0 Pro Mach Inc. 6.0 Kaman Corporation 6.0 Verifone, Inc.
Removed
(f/k/a AIS Intermediate, LLC) 14.3 CLEAResult Consulting, Inc. 7.7 Convergint Technologies, LLC 2.4 McAfee Enterprise, LLC (f/k/a Magenta Buyer, LLC) 0.7 Alvaria, Inc. (f/k/a Aspect Software, Inc.) 0.6 Dodge Data & Analytics, LLC 0.3 HealthChannels, Inc.
Added
The sales during the year ended December 31, 2025 were as follows ($ in millions): Portfolio Company 2025 Sales HealthChannels, Inc. (f/k/a ScribeAmerica, LLC) $ 8.2 Quest Software, Inc. 1.6 Alvaria, Inc. (f/k/a Aspect Software, Inc.) 1.0 Total sales (1) $ 10.7 ____________ (1) Total may not sum due to rounding.
Removed
The decrease in 2024 is attributable primarily to lower Net Investment Income Incentive Fees, excise tax, and interest expense. Interest expense decreased by approximately $3.0 million in 2024 compared to 2023. The decrease in 2024 was due to the full paydown of the 6.50% Unsecured Notes throughout 2023.
Added
Realized and Unrealized Gains/Losses on Investments For the year ended December 31, 2025, we recognized net realized losses on investments of approximately $16.8 million, which primarily represents sales and restructurings of senior secured notes.
Removed
This includes net unrealized appreciation of approximately $15.3 million resulting from reductions to the cost value of our CLO equity investments representing the difference between distributions received, or entitled to be received, on our investments held in CLO equity subordinated notes and fee notes, of approximately $32.0 million and the effective yield interest income recognized on our CLO equity subordinated notes and the amortized cost adjusted income on our CLO equity fee notes of approximately $16.7 million. 72 The components of the net change in unrealized appreciation/(depreciation) during the year ended December 31, 2023 were as follows ($ in millions): Portfolio Company Changes in Unrealized Appreciation/ (Depreciation) Nassau 2019-I Ltd. $ 9.4 Telos CLO 2013-4, Ltd. 4.9 THL Credit Wind River 2012-1 CLO, Ltd. 2.9 Carlyle Global Market Strategies CLO 2021-6, Ltd. 2.7 Global Tel Link Corp. 2.2 Alvaria, Inc.
Added
The components of the net change in unrealized appreciation/(depreciation) during the year ended December 31, 2025 were as follows ($ in millions): Portfolio Company Changes in Unrealized Depreciation Generate CLO 10, Ltd. $ (4.0 ) Carlyle Global Market Strategies CLO 2021-6, Ltd. (4.1 ) RSA Security, LLC (4.1 ) Dryden 43 Senior Loan Fund (4.2 ) OCP CLO 2024-37, Ltd.
Removed
(f/k/a Aspect Software, Inc.) (3.2 ) Dodge Data & Analytics, LLC (3.3 ) ConvergeOne Holdings, Inc.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInterest rate risk is defined as the sensitivity of our current and future earnings to interest rate volatility, including relative changes in different interest rates, variability of spread relationships, the difference in re -pricing intervals between our assets and liabilities and the effect that interest rates may have on our cash flows.
Biggest changeMany of the variable rate investments contain interest rate floors. 80 Interest rate risk is defined as the sensitivity of our current and future earnings to interest rate volatility, including relative changes in different interest rates, variability of spread relationships, the difference in re -pricing intervals between our assets and liabilities and the effect that interest rates may have on our cash flows.
Changes in interest rates can also affect, among other things, our ability to acquire leveraged loans, high yield bonds and other debt investments and the value of our investment portfolio. 80 We may in the future hedge against interest rate fluctuations by using standard hedging instruments such as futures, options and forward contracts.
Changes in interest rates can also affect, among other things, our ability to acquire leveraged loans, high yield bonds and other debt investments and the value of our investment portfolio. We may in the future hedge against interest rate fluctuations by using standard hedging instruments such as futures, options and forward contracts.
Based on our Statements of Assets and Liabilities as of December 31, 2024, the following table shows the annualized impact on net investment income of hypothetical base rate changes in interest rates for our settled investments (considering interest rate floors for floating rate instruments), excluding CLO equity investments.
Based on our Statements of Assets and Liabilities as of December 31, 2025, the following table shows the annualized impact on net investment income of hypothetical base rate changes in interest rates for our settled investments (considering interest rate floors for floating rate instruments), excluding CLO equity investments.
The base interest rate case assumes the rates on our portfolio investments remain unchanged from the actual effective interest rates as of December 31, 2024. These hypothetical calculations are based on a model of the investments in our portfolio, held as of December 31, 2024, and are only adjusted for assumed changes in the underlying base interest rates.
The base interest rate case assumes the rates on our portfolio investments remain unchanged from the actual effective interest rates as of December 31, 2025. These hypothetical calculations are based on a model of the investments in our portfolio, held as of December 31, 2025, and are only adjusted for assumed changes in the underlying base interest rates.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are subject to financial market risks, including changes in interest rates. As of December 31, 2024, all but one of our variable rate investments were income producing. The variable rates are generally based upon the five -year U.S.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are subject to financial market risks, including changes in interest rates. As of December 31, 2025, all of our variable rate investments were income producing. The variable rates are generally based upon the five -year U.S.
Department of Treasury note, the Prime rate, or SOFR, and, in the case of our bilateral investments, are generally reset annually, whereas our non -bilateral investments generally reset quarterly. We expect that future debt investments will generally be made at variable rates. Many of the variable rate investments contain interest rate floors.
Department of Treasury note, the Prime rate, or SOFR, and, in the case of our bilateral investments, are generally reset annually, whereas our non -bilateral investments generally reset quarterly. We expect that future debt investments will generally be made at variable rates.
Hypothetical Change in Floating Interest Rates Estimated Percentage change in Investment Income Up 300 basis points 14.6 % Up 200 basis points 9.8 % Up 100 basis points 4.9 % Down 100 basis points (4.9 )% Down 200 basis points (9.6 )% Down 300 basis points (14.4 )% 81
Hypothetical Change in Floating Interest Rates Estimated Percentage Change in Investment Income Up 300 basis points 13.5 % Up 200 basis points 9.0 % Up 100 basis points 4.5 % Down 100 basis points (4.4 )% Down 200 basis points (8.7 )% Down 300 basis points (12.7 )% 81

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