Item 1. Financial Statements
ITEM 1. FINANCIAL STATEMENTS
OXFORD SQUARE CAPITAL CORP.
STATEMENTS OF ASSETS AND LIABILITIES
March 31,
2026
December 31,
2025
(Unaudited)
ASSETS
Non-affiliated/non-control investments (cost: $ 372,980,864 and $ 390,403,599 , respectively)
$
235,372,463
$
251,731,345
Cash equivalents (cost of $ 40,637,084 and $ 51,236,068 , respectively)
40,637,084
51,236,068
Cash
287,628
698,579
Interest and distributions receivable
1,531,132
2,002,161
Other assets
1,029,174
1,070,958
Total assets
$
278,857,481
$
306,739,111
LIABILITIES
Notes payable – 5.50% Unsecured Notes, net of deferred issuance costs of $ 901,010 and $ 996,075 respectively
$
79,598,990
$
79,503,925
Notes payable – 7.75% Unsecured Notes, net of deferred issuance costs of $ 2,480,628 and $ 2,621,662 respectively
72,269,372
72,128,338
Securities purchased not settled
—
5,944,969
Accrued interest payable
1,703,438
1,703,438
Accrued expenses
1,030,008
1,017,581
Base Fee and Net Investment Income Incentive Fee payable to affiliate
990,631
1,036,058
Total liabilities
155,592,439
161,334,309
COMMITMENTS AND CONTINGENCIES (Note 13)
NET ASSETS
Common stock, $ 0.01 par value, 100,000,000 shares authorized; 93,449,336 and 86,060,964 shares issued and outstanding, respectively
934,494
860,610
Capital in excess of par value
535,621,842
523,040,484
Total distributable earnings/(accumulated losses)
( 413,291,294
)
( 378,496,292
)
Total net assets
123,265,042
145,404,802
Total liabilities and net assets
$
278,857,481
$
306,739,111
Net asset value per common share
$
1.32
$
1.69
The accompanying notes are an integral part of these financial statements.
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Table of Contents
OXFORD SQUARE CAPITAL CORP.
SCHEDULE OF INVESTMENTS (Unaudited)
March 31, 2026
COMPANY/INVESTMENT (1)(20)
ACQUISITION
DATE
PRINCIPAL
AMOUNT
COST
FAIR
VALUE (2)
% OF
NET
ASSETS (10)
Senior Secured Notes
Aerospace and Defense
Vantor, Inc.
first lien senior secured notes, 8.12 % (SOFR + 4.50 %), ( 0.00 % floor) due March 3, 2033 (4)(5)(14)(29)
February 27, 2026
$
10,000,000
$
9,850,658
$
9,787,500
Total Aerospace and Defense
$
9,850,658
$
9,787,500
7.9
%
Business Services
Access CIG, LLC
first lien senior secured notes, 7.70 % (SOFR + 4.00 %), ( 0.50 % floor) due August 19, 2030 (4)(6)(14)(16)
August 15, 2025
$
9,995,854
$
9,995,854
$
8,992,070
Convergint Technologies, LLC
second lien senior secured notes, 9.17 % (SOFR + 5.50 %), ( 0.75 % floor) due July 29, 2033 (4)(5)(14)(23)
July 23, 2025
10,000,000
9,953,255
9,750,000
Verifone, Inc. (f/k/a Verifone Systems, Inc.)
first lien senior secured notes, 9.18 % (SOFR + 5.25 %), ( 0.00 % floor) due August 18, 2028 (4)(5)(6)(14)(16)
March 28, 2025
13,129,863
12,211,761
12,374,896
Total Business Services
$
32,160,870
$
31,116,966
25.2
%
Food and Beverage
Shearer’s Foods, LLC
first lien senior secured notes, 6.42 % (SOFR + 2.75 %), ( 0.00 % floor) due February 12, 2031 (4)(5)(6)(14)(23)
January 31, 2024
$
9,825,936
$
9,849,342
$
9,592,570
Total Food and Beverage
$
9,849,342
$
9,592,570
7.8
%
Healthcare
HealthChannels, Inc. (f/k/a ScribeAmerica, LLC)
first lien senior secured notes, 10.25 % (Prime + 3.50 %) cash, 2.00 % PIK, ( 0.00 % floor) due January 12, 2026 (3)(4)(5)(6)(17)(26)
October 31, 2018
$
8,848,243
$
8,767,059
$
3,539,297
Performance Health Inc.
first lien senior secured notes, 7.45 % (SOFR + 3.75 %), ( 0.00 % floor) due March 19, 2032 (4)(5)(6)(14)(16)
March 24, 2025
9,937,437
9,902,384
9,689,001
Viant Medical Holdings, Inc.
first lien senior secured notes, 7.67 % (SOFR + 4.00 %), ( 0.00 % floor) due October 29, 2031 (4)(5)(6)(23)
October 16, 2024
5,925,000
5,902,226
5,917,594
Total Healthcare
$
24,571,669
$
19,145,892
15.5
%
Industrials
Highline Warren, LLC (f/k/a Highline Aftermarket, LLC)
first lien senior secured notes, 7.17 % (SOFR + 3.50 %), ( 0.75 % floor) due February 19, 2030 (4)(5)(6)(14)(16)
February 13, 2025
$
6,922,475
$
6,922,699
$
6,905,169
(continued on next page)
The accompanying notes are an integral part of these unaudited financial statements.
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OXFORD SQUARE CAPITAL CORP.
SCHEDULE OF INVESTMENTS (Unaudited) — (continued)
March 31, 2026
COMPANY/INVESTMENT (1)(20)
ACQUISITION
DATE
PRINCIPAL
AMOUNT
COST
FAIR
VALUE (2)
% OF
NET
ASSETS (10)
Senior Secured Notes – (continued)
Industrials – (continued)
Michael Baker International, Inc.
first lien senior secured notes, 7.67 % (SOFR + 4.00 %), ( 0.75 % floor) due December 1, 2028 (4)(5)(6)(14)(16)
May 22, 2024
$
9,825,625
$
9,866,852
$
9,825,625
ProMach Inc.
first lien senior secured notes, 6.42 % (SOFR + 2.75 %), ( 0.00 % floor) due October 16, 2032 (4)(5)(6)(23)
October 9, 2025
5,985,000
5,978,323
5,977,519
Total Industrials
$
22,767,874
$
22,708,313
18.4
%
Materials
Veritiv Operating Company
first lien senior secured notes, 7.70 % (SOFR + 4.00 %), ( 0.75 % floor) due November 30, 2030 (4)(5)(6)(14)(16)
December 6, 2024
$
8,902,142
$
8,899,831
$
8,657,333
Total Materials
$
8,899,831
$
8,657,333
7.0
%
Software
Dodge Construction Network LLC (f/k/a Dodge Data & Analytics, LLC)
first lien first out senior secured notes, 10.05 % (SOFR + 6.25 %), ( 0.50 % floor) due January 31, 2029 (4)(5)(6)(14)(16)
November 14, 2024
$
2,170,330
$
2,148,068
$
2,154,053
first lien second out senior secured notes, 8.55 % (SOFR + 4.75 %), ( 0.50 % floor) due February 28, 2029 (4)(5)(6)(14)(16)
November 14, 2024
3,009,642
2,562,921
2,257,232
second lien senior secured notes, 12.10 % (SOFR + 8.25 %) PIK, ( 0.50 % floor) due March 31, 2029 (3)(4)(5)(14)(16)
November 14, 2024
17,528,637
10,030,838
7,011,455
Forta, LLC (f/k/a Help/Systems Holdings, Inc.)
first lien senior secured notes, 9.76 % (SOFR + 6.00 %), ( 2.00 % floor) due May 21, 2029 (4)(5)(14)(16)
November 21, 2025
3,235,235
3,082,480
2,779,617
second lien senior secured notes, 3.76 % (SOFR, 2.00 % floor) cash, 9.00 % PIK due May 21, 2029 (3)(4)(5)(14)(16)
November 21, 2025
8,331,290
6,773,882
4,332,271
Magenta Buyer, LLC (f/k/a McAfee Enterprise, LLC)
first lien first out senior secured notes, 10.68 % (SOFR + 6.75 %), ( 0.75 % floor) due July 27, 2028 (4)(5)(16)
August 14, 2024
234,573
216,824
166,547
first lien second out senior secured notes, 10.93 % (SOFR + 7.00 %) ( 0.75 % floor) due July 27, 2028 (4)(5)(16)
August 14, 2024
1,310,350
1,032,904
537,244
first lien third out senior secured notes, 10.18 % (SOFR + 6.25 %) ( 0.75 % floor) due July 27, 2028 (4)(5)(16)
August 14, 2024
10,340,152
4,104,651
2,223,133
(continued on next page)
The accompanying notes are an integral part of these unaudited financial statements.
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OXFORD SQUARE CAPITAL CORP.
SCHEDULE OF INVESTMENTS (Unaudited) — (continued)
March 31, 2026
COMPANY/INVESTMENT (1)(20)
ACQUISITION
DATE
PRINCIPAL
AMOUNT
COST
FAIR
VALUE (2)
% OF
NET
ASSETS (10)
Senior Secured Notes – (continued)
Software – (continued)
RSA Security, LLC
first lien second out senior secured notes, 9.17 % (SOFR + 5.50 %), ( 0.00 % floor) due December 31, 2030 (4)(5)(16)
January 21, 2026
$
1,800,000
$
953,441
$
662,994
first lien third out senior secured notes, 8.00 % cash, 4.00 % PIK, due December 31, 2030 (3)(5)
January 21, 2026
3,603,551
1,292,317
1,201,172
Smartronix, LLC
first lien senior secured notes, 8.17 % (SOFR + 4.50 %), ( 0.00 % floor) due February 6, 2032 (4)(5)(6)(14)(23)
February 6, 2025
9,924,874
9,933,996
9,759,426
Tungsten Automation Corporation (f/k/a Kofax, Inc.)
first lien senior secured notes, 9.02 % (SOFR + 5.25 %), ( 0.50 % floor) due July 20, 2029 (4)(5)(6)(16)
February 1, 2023
9,731,286
9,293,709
5,975,010
Total Software
$
51,426,031
$
39,060,154
31.7
%
Telecommunication Services
ConvergeOne Holdings, Inc.
first lien senior secured notes, 9.41 % (SOFR + 5.75 %), ( 0.00 % floor) due June 4, 2030 (4)(5)(16)
June 4, 2024
$
934,808
$
901,280
$
420,664
Global Tel Link Corp.
first lien senior secured notes, 11.17 % (SOFR + 7.50 %), ( 3.00 % floor) due August 6, 2029 (4)(5)(6)(14)(23)
July 29, 2024
10,327,052
10,079,443
10,327,052
Total Telecommunication Services
$
10,980,723
$
10,747,716
8.7
%
Total Senior Secured Notes
$
170,506,998
$
150,816,444
122.4
%
Collateralized Loan Obligation – Equity Investments
Structured Finance
Allegro CLO XII, Ltd.
CLO subordinated notes, estimated yield 11.67 % due July 21, 2037 (9)(11)(12)(18)(22)
August 21, 2024
$
3,000,000
$
1,825,060
$
1,050,000
Ares XLIV CLO Ltd.
CLO subordinated notes, estimated yield 20.61 % due April 15, 2034 (9)(11)(12)(18)(22)
December 15, 2023
5,000,000
1,323,814
572,164
Atlas Senior Loan Fund XI, Ltd.
CLO subordinated notes, estimated yield 0.00 % due July 26, 2031 (9)(11)(12)(18)(22)(25)
April 5, 2019
5,725,000
1,402,272
573
Bain Capital Credit CLO 2017-2, Ltd.
CLO subordinated notes, estimated yield 7.03 % due July 25, 2037 (9)(11)(12)(18)(22)
January 17, 2024
3,086,500
1,729,673
895,085
BlueMountain CLO 2014-2 Ltd.
CLO subordinated notes, estimated yield 0.00 % due October 20, 2030 (9)(11)(12)(18)(25)
April 3, 2019
6,374,000
365,288
15,935
(continued on next page)
The accompanying notes are an integral part of these unaudited financial statements.
4
Table of Contents
OXFORD SQUARE CAPITAL CORP.
SCHEDULE OF INVESTMENTS (Unaudited) — (continued)
March 31, 2026
COMPANY/INVESTMENT (1)(20)
ACQUISITION
DATE
PRINCIPAL
AMOUNT
COST
FAIR
VALUE (2)
% OF
NET
ASSETS (10)
Collateralized Loan Obligation – Equity Investments – (continued)
Structured Finance – (continued)
BlueMountain CLO XXXI Ltd.
CLO subordinated notes, estimated yield 8.38 % due April 19, 2034 (9)(11)(12)(18)(22)
April 16, 2024
$
12,075,000
$
6,818,969
$
2,777,250
Carlyle Global Market Strategies
CLO 2021-6, Ltd.
CLO subordinated notes, estimated yield 12.22 % due January 15, 2038 (9)(11)(12)(14)(18)
June 30, 2021
29,600,000
18,578,732
9,176,000
Cedar Funding II CLO, Ltd.
CLO subordinated notes, estimated yield 6.86 % due July 22, 2038 (9)(11)(12)(13)(18)(24)
March 20, 2013
18,000,000
10,008,935
4,427,472
Cedar Funding VI CLO, Ltd.
CLO subordinated notes, estimated yield 9.63 % due April 20, 2034 (9)(11)(12)(18)
May 15, 2017
7,700,000
5,248,042
1,925,000
CIFC Funding 2014-3, Ltd.
CLO income notes, estimated yield 0.00 % due March 31, 2038 (9)(11)(12)(18)(22)(25)
January 24, 2017
1,000,000
1,876,764
440,000
Dryden 43 Senior Loan Fund
CLO subordinated notes, estimated yield 0.00 % due April 20, 2034 (9)(11)(12)(14)(18)
June 1, 2021
47,263,000
20,737,984
7,089,450
Generate CLO 10, Ltd.
CLO subordinated notes, estimated yield 16.98 % due January 22, 2038 (9)(11)(12)(14)(18)
August 13, 2025
30,000,000
21,625,923
13,500,000
Gulf Stream Meridian 5 Ltd.
CLO subordinated notes, estimated yield 13.63 % due October 15, 2039 (9)(11)(12)(18)(22)
November 15, 2023
6,625,000
3,481,017
2,327,458
Madison Park Funding XVIII, Ltd.
CLO subordinated notes, estimated yield 0.00 % due October 21, 2030 (9)(11)(12)(15)(18)(22)(25)
May 22, 2020
12,500,000
735,759
390,000
Madison Park Funding XIX, Ltd.
CLO subordinated notes, estimated yield 4.50 % due January 22, 2037 (9)(11)(12)(15)(18)(22)
May 11, 2016
5,422,500
1,680,223
1,218,436
OCP CLO 2024-37, Ltd.
CLO subordinated notes, estimated yield 11.30 % due October 15, 2037 (9)(11)(12)(14)(18)(22)
September 27, 2024
27,035,000
23,925,355
15,409,950
Octagon Investment Partners 49, Ltd.
CLO subordinated notes, estimated yield 1.16 % due April 15, 2037 (9)(11)(12)(13)(14)(18)(24)
December 11, 2020
26,375,000
15,556,117
6,238,796
Reese Park CLO, Ltd.
CLO subordinated notes, estimated yield 15.02 % due January 15, 2038 (9)(11)(12)(18)(22)
August 13, 2025
16,160,000
8,554,961
4,201,600
CLO subordinated M2 fee notes, due January 15, 2038 (11)(12)(13)(22)(24)
August 13, 2025
21,008,000
548,044
516,119
(continued on next page)
The accompanying notes are an integral part of these unaudited financial statements.
5
Table of Contents
OXFORD SQUARE CAPITAL CORP.
SCHEDULE OF INVESTMENTS (Unaudited) — (continued)
March 31, 2026
COMPANY/INVESTMENT (1)(20)
ACQUISITION
DATE
PRINCIPAL
AMOUNT/
SHARES
COST
FAIR
VALUE (2)
% OF
NET
ASSETS (10)
Collateralized Loan Obligation – Equity Investments – (continued)
Structured Finance – (continued)
Sound Point CLO XVI, Ltd.
CLO subordinated notes, estimated yield 0.00 % due July 25, 2030 (9)(11)(12)(18)(25)
August 1, 2018
$
45,500,000
$
19,023,511
$
4,550
Telos CLO 2013-3, Ltd.
CLO subordinated notes, estimated yield 0.00 % due July 17, 2026 (9)(11)(12)(18)(22)(25)
January 25, 2013
14,447,790
6,207,075
1,445
Venture XX, Ltd.
CLO subordinated notes, estimated yield 0.00 % due April 15, 2027 (9)(11)(12)(15)(18)(22)(25)
July 27, 2018
3,000,000
332,779
—
Venture 35 CLO, Limited
CLO subordinated notes, estimated yield 0.00 % due October 22, 2031 (9)(11)(12)(18)(25)
December 7, 2020
5,000,000
512,144
500
Zais CLO 6, Ltd.
CLO subordinated notes, estimated yield 0.00 % due July 15, 2029 (9)(11)(12)(13)(18)(24)(25)
May 3, 2017
10,500,000
5,069,217
1,050
Total Structured Finance
$
177,167,658
$
72,178,833
58.6
%
Total Collateralized Loan Obligation – Equity Investments
$
177,167,658
$
72,178,833
58.6
%
Convertible Notes
Artificial Intelligence
Invisible Technologies, Inc.
unsecured convertible promissory note, 17.00 % PIK (3)
February 3, 2026
2,959,453
$
3,038,020
$
3,038,020
Total Artificial Intelligence
$
3,038,020
$
3,038,020
2.5
%
Total Convertible Notes
$
3,038,020
$
3,038,020
2.5
%
Common Stock
IT Consulting
UniTek Global Services, Inc.
common stock (7)
January 13, 2015
1,244,188
$
684,960
$
—
Total IT Consulting
$
684,960
$
—
0.0
%
Software
RSA Security, LLC
Class B common stock (7)
January 21, 2026
N/A
(28)
$
—
$
—
Total Software
$
—
$
—
0.0
%
Telecommunication Services
ConvergeOne Holdings, Inc.
common stock (7)
May 8, 2024
95,775
$
1,349,602
$
14,366
Total Telecommunication Services
$
1,349,602
$
14,366
0.0
%
Total Common Stock
$
2,034,562
$
14,366
0.0
%
(continued on next page)
The accompanying notes are an integral part of these unaudited financial statements.
6
Table of Contents
OXFORD SQUARE CAPITAL CORP.
SCHEDULE OF INVESTMENTS (Unaudited) — (continued)
March 31, 2026
COMPANY/INVESTMENT (1)(20)
ACQUISITION
DATE
SHARES
COST
FAIR
VALUE (2)
% OF
NET
ASSETS (10)
Simple Agreements for Future Equity (“SAFE”)
Artificial Intelligence
Infinity Constellation Inc.
SAFE Investment (7)(27)
November 25, 2025
N/A
$
4,000,000
$
4,000,000
Total Artificial Intelligence
$
4,000,000
$
4,000,000
3.2
%
Total SAFE
$
4,000,000
$
4,000,000
3.2
%
Warrants
Healthcare
Careismatic Brands, Inc. (f/k/a New Trojan Parent, Inc.)
common equity warrants ( June 13, 2029 expiry, $ 119.80 strike) (7)
June 13, 2024
62,157
$
—
$
—
Total Healthcare
$
—
$
—
0.0
%
Total Warrants
$
—
$
—
0.0
%
Preferred Stock
IT Consulting
UniTek Global Services, Inc.
Series B Preferred Stock (7)
June 26, 2019
21,427,212
$
9,002,159
$
—
Series B Senior Preferred Stock (7)
June 26, 2019
12,080,847
4,535,443
—
Series B Super Senior Preferred Stock (3)(17)(21)
June 26, 2019
8,256,840
2,592,024
5,220,800
Total IT Consulting
$
16,129,626
$
5,220,800
4.2
%
Software
RSA Security, LLC
Class A Preferred Stock (7)
January 21, 2026
N/A
(28)
$
104,000
$
104,000
Class B Preferred Stock (7)
January 21, 2026
N/A
(28)
—
—
Total Software
$
104,000
$
104,000
0.1
%
Total Preferred Stock
$
16,233,626
$
5,324,800
4.3
%
Total Investments in Securities (8)
$
372,980,864
$
235,372,463
191.0
%
Cash Equivalents
First American Government Obligations Fund – Class Z Shares, 3.54 % (19)
40,637,084
$
40,637,084
$
40,637,084
Total Cash Equivalents
$
40,637,084
$
40,637,084
33.0
%
Total Investments in Securities and Cash
Equivalents
$
413,617,948
$
276,009,547
224.0
%
____________
(1) The Company generally acquires its investments in transactions not subject to registration under the Securities Act of 1933, as amended (the “Securities Act”). These investments are generally subject to restrictions as “restricted securities” (within the meaning of the Securities Act). Unless otherwise noted, all securities were acquired in transactions not subject to registration under the Securities Act.
(2) Fair value is determined in good faith by the Board of Directors of the Company.
(3) As of March 31, 2026, the portfolio includes approximately $41.3 million of principal amount of debt investments and 8,256,840 shares of preferred stock investments which contain an active payment -in-kind (“PIK”) provision.
(4) Notes bear interest at variable rates and are subject to an interest rate floor where disclosed. The rate disclosed is as of March 31, 2026.
(5) Cost value reflects accretion of original issue discount or market discount, or amortization of premium. No income from accretion is recognized on non -accrual investments.
(6) Cost value reflects repayment of principal.
(7) Non -income producing as of March 31, 2026.
(continued on next page)
The accompanying notes are an integral part of these unaudited financial statements.
7
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OXFORD SQUARE CAPITAL CORP.
SCHEDULE OF INVESTMENTS (Unaudited) — (continued)
March 31, 2026
(8) Aggregate gross unrealized appreciation for U.S. federal income tax purposes is $3,060,873; aggregate gross unrealized depreciation for U.S. federal income tax purposes is $150,764,683. Net unrealized depreciation is $147,703,810 based upon an estimated tax cost basis of $383,076,273 as of March 31, 2026.
(9) Cost reflects accretion of effective yield less any cash distributions received or entitled to be received from collateralized loan obligation (“CLO”) equity investments.
(10) Totals may not sum due to rounding.
(11) Indicates assets that the Company believes do not represent “qualifying assets” under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”). The Company may include CLO equity side letter related investments within CLO equity subordinated notes line items, and those side letter related investments may represent qualifying assets under Section 55(a) of the 1940 Act. 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 March 31, 2026, the Company held qualifying assets that represented 74.5% of its total assets.
(12) Investment not domiciled in the United States.
(13) Fair value includes the Company’s interest in subordinated fee notes and represents discounted cash flows associated with fees earned from CLO equity investments.
(14) Aggregate investments represent greater than 5% of net assets.
(15) The CLO equity investment was optionally redeemed. Expected value of residual distributions, once received, is anticipated to be recognized as return of capital, pending any remaining amortized cost, and/or realized gain for any amounts received in excess of such amortized cost.
(16) The principal balance outstanding for this investment, in whole or in part, is indexed to 90 -day SOFR.
(17) As of March 31, 2026, this investment was on non -accrual status and no interest or dividend income has been recognized on this investment during the three months ended March 31, 2026. The aggregate fair value of these investments was approximately $8.8 million.
(18) The CLO subordinated notes and income notes are considered equity positions in CLO vehicles. Equity investments are entitled to recurring distributions which are generally equal to the remaining cash flow of the payments made by the underlying fund’s securities less contractual payments to debt holders and fund expenses. The estimated yield indicated is based on the prior quarters ending investment cost (for previously existing portfolio investments) or the original cost for those investments made during the current quarter, as well as, a current projection of the future cash flows. Such projections are periodically reviewed and adjusted, and the estimated yield may not ultimately be realized.
(19) Represents cash equivalents held in a money market fund as of March 31, 2026.
(20) The fair value of the investment was determined using significant unobservable inputs. See “Note 4. Fair Value.”
(21) The Company holds preferred stock in UniTek Global Services, Inc. that is entitled to receive cumulative preferential dividends at a rate of 20.0% per annum payable in additional shares.
(22) The investment is co -invested with the Company’s affiliates. See “Note 7. Related Party Transactions.”
(23) The principal balance outstanding for this investment, in whole or in part, is indexed to 30 -day SOFR.
(24) Cost value reflects amortization.
(25) As of March 31, 2026, the effective yield has been estimated to be 0%. The aggregate projected amount of future recurring distributions and terminal principal payment is less than the amortized investment cost.
(26) The principal balance outstanding for this investment is indexed to the greater of: (i) the federal funds rate, plus 0.50%; (ii) the prime lending rate; or (iii) the adjusted eurocurrency rate, plus 1.00%. The principal balance outstanding is also subject to a 2.00% annual PIK penalty, as the senior secured notes are past maturity.
(27) The Company’s SAFE (Simple Agreement for Future Equity) investment in Infinity Constellation Inc. is not debt (no stated interest or maturity) and provides the right to receive equity in the future upon a qualifying equity financing.
(28) The Company owns 0.27232%, 0.11486% and 0.73433% of the Class B Common stock, Class A preferred stock and Class B preferred stock, respectively, however, the quantity of shares that the Company owns has not yet been determined as of March 31, 2026.
(29) The principal balance outstanding for this investment, in whole or in part, is indexed to 180 -day SOFR.
The accompanying notes are an integral part of these unaudited financial statements.
8
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OXFORD SQUARE CAPITAL CORP.
SCHEDULE OF INVESTMENTS
December 31, 2025
COMPANY/INVESTMENT (1)(20)
ACQUISITION
DATE
PRINCIPAL
AMOUNT
COST
FAIR
VALUE (2)
% OF
NET
ASSETS (10)
Senior Secured Notes
Business Services
Access CIG, LLC
first lien senior secured notes, 7.72 % (SOFR + 4.00 %), ( 0.50 % floor) due August 19, 2030 (4)(6)(14)(23)
August 15, 2025
$
10,021,032
$
10,021,032
$
9,645,243
Convergint Technologies, LLC
second lien senior secured notes, 9.22 % (SOFR + 5.50 %), ( 0.75 % floor) due July 29, 2033 (4)(5)(14)(23)
July 23, 2025
10,000,000
9,950,843
10,050,000
Verifone, Inc. (f/k/a Verifone Systems, Inc.)
first lien senior secured notes, 9.35 % (SOFR + 5.25 %), ( 0.00 % floor) due August 18, 2028 (4)(5)(6)(14)(16)
March 28, 2025
13,162,936
12,145,783
12,471,882
Total Business Services
$
32,117,658
$
32,167,125
22.1
%
Food and Beverage
Shearer’s Foods, LLC
first lien senior secured notes, 6.47 % (SOFR + 2.75 %), ( 0.00 % floor) due February 12, 2031 (4)(5)(6)(14)(23)
January 31, 2024
$
9,850,687
$
9,874,427
$
9,837,290
Total Food and Beverage
$
9,874,427
$
9,837,290
6.8
%
Healthcare
HealthChannels, Inc. (f/k/a ScribeAmerica, LLC)
first lien senior secured notes, 10.25 % (Prime + 3.50 %) cash, 2.00 % PIK, ( 0.00 % floor) due January 12, 2026 (3)(4)(5)(6)(26)
October 31, 2018
$
8,833,722
$
8,838,455
$
6,360,280
Performance Health Inc.
first lien senior secured notes, 7.62 % (SOFR + 3.75 %), ( 0.00 % floor) due March 19, 2032 (4)(5)(6)(14)(16)
March 24, 2025
9,962,469
9,925,063
9,813,032
Viant Medical Holdings, Inc.
first lien senior secured notes, 7.72 % (SOFR + 4.00 %), ( 0.00 % floor) due October 29, 2031 (4)(5)(6)(23)
October 16, 2024
5,940,000
5,915,373
5,880,600
Total Healthcare
$
24,678,891
$
22,053,912
15.2
%
Industrials
Highline Warren, LLC (f/k/a Highline Aftermarket, LLC)
first lien senior secured notes, 7.32 % (SOFR + 3.50 %), ( 0.75 % floor) due February 19, 2030 (4)(5)(6)(16)
February 13, 2025
$
6,940,000
$
6,940,314
$
6,970,397
Michael Baker International, Inc.
first lien senior secured notes, 7.84 % (SOFR + 4.00 %), ( 0.75 % floor) due December 1, 2028 (4)(5)(6)(14)(16)
May 22, 2024
9,850,500
9,893,738
9,862,813
(continued on next page)
The accompanying notes are an integral part of these financial statements.
9
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OXFORD SQUARE CAPITAL CORP.
SCHEDULE OF INVESTMENTS — (continued)
December 31, 2025
COMPANY/INVESTMENT (1)(20)
ACQUISITION
DATE
PRINCIPAL
AMOUNT
COST
FAIR
VALUE (2)
% OF
NET
ASSETS (10)
Senior Secured Notes – (continued)
Industrials – (continued)
ProMach Inc.
first lien senior secured notes, 6.47 % (SOFR + 2.75 %), ( 0.00 % floor) due October 16, 2032 (4)(5)(6)(23)
October 9, 2025
$
3,000,000
$
2,992,511
$
3,018,750
Total Industrials
$
19,826,563
$
19,851,960
13.7
%
Materials
Veritiv Operating Company
first lien senior secured notes, 7.67 % (SOFR + 4.00 %), ( 0.75 % floor) due November 30, 2030 (4)(5)(6)(14)(16)
December 6, 2024
$
8,924,736
$
8,920,823
$
8,914,562
Total Materials
$
8,920,823
$
8,914,562
6.1
%
Software
Dodge Construction Network LLC (f/k/a Dodge Data & Analytics, LLC)
first lien first out senior secured notes, 10.25 % (SOFR + 6.25 %), ( 0.50 % floor) due January 31, 2029 (4)(5)(6)(14)(16)
November 14, 2024
$
2,175,824
$
2,150,991
$
2,181,264
first lien second out senior secured notes, 8.75 % (SOFR + 4.75 %), ( 0.50 % floor) due February 28, 2029 (4)(5)(6)(14)(16)
November 14, 2024
3,017,281
2,538,618
2,413,825
second lien senior secured notes, 12.07 % (SOFR + 8.25 %) PIK, ( 0.50 % floor) due March 31, 2029 (3)(4)(5)(14)(16)
November 14, 2024
17,015,123
9,211,125
6,806,049
Forta, LLC (f/k/a Help/Systems Holdings, Inc.)
first lien senior secured notes, 9.97 % (SOFR + 6.00 %), ( 2.00 % floor) due May 21, 2029 (4)(5)(14)(16)
November 21, 2025
3,243,343
3,080,091
2,943,334
second lien senior secured notes, 3.97 % (SOFR, 2.00 % floor) cash, 9.00 % PIK due May 21, 2029 (3)(4)(5)(14)(16)
November 21, 2025
8,140,000
6,496,312
5,291,000
Magenta Buyer, LLC (f/k/a McAfee Enterprise, LLC)
first lien first out senior secured notes, 10.85 % (SOFR + 6.75 %), ( 0.75 % floor) due July 27, 2028 (4)(5)(16)
August 14, 2024
234,573
215,207
180,621
first lien second out senior secured notes, 11.10 % (SOFR + 7.00 %) ( 0.75 % floor) due July 27, 2028 (4)(5)(16)
August 14, 2024
1,310,350
1,010,783
576,554
first lien third out senior secured notes, 10.35 % (SOFR + 6.25 %) ( 0.75 % floor) due July 27, 2028 (4)(5)(16)
August 14, 2024
10,340,152
3,767,921
2,429,936
RSA Security, LLC
second lien senior secured notes, 11.85 % (SOFR + 7.75 %), ( 0.75 % floor) due April 27, 2029 (4)(5)(16)
April 16, 2021
15,000,000
14,859,002
2,734,500
(continued on next page)
The accompanying notes are an integral part of these financial statements.
10
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OXFORD SQUARE CAPITAL CORP.
SCHEDULE OF INVESTMENTS — (continued)
December 31, 2025
COMPANY/INVESTMENT (1)(20)
ACQUISITION
DATE
PRINCIPAL
AMOUNT
COST
FAIR
VALUE (2)
% OF
NET
ASSETS (10)
Senior Secured Notes – (continued)
Software – (continued)
Smartronix, LLC
first lien senior secured notes, 8.22 % (SOFR + 4.50 %), ( 0.00 % floor) due February 6, 2032 (4)(5)(6)(14)(23)
February 6, 2025
$
9,949,937
$
9,959,596
$
9,850,438
Tungsten Automation Corporation (f/k/a Kofax, Inc.)
first lien senior secured notes, 9.19 % (SOFR + 5.25 %), ( 0.50 % floor) due July 20, 2029 (4)(5)(6)(14)(16)
February 1, 2023
9,756,431
9,287,899
8,341,749
Total Software
$
62,577,545
$
43,749,270
30.1
%
Telecommunication Services
ConvergeOne Holdings, Inc.
first lien senior secured notes, 9.52 % (SOFR + 5.75 %), ( 0.00 % floor) due June 4, 2030 (4)(5)(16)
June 4, 2024
$
934,808
$
899,579
$
373,923
Global Tel Link Corp.
first lien senior secured notes, 11.22 % (SOFR + 7.50 %), ( 3.00 % floor) due August 6, 2029 (4)(5)(6)(14)(23)
July 29, 2024
10,379,729
10,114,431
10,305,099
Total Telecommunication Services
$
11,014,010
$
10,679,022
7.3
%
Total Senior Secured Notes
$
169,009,917
$
147,253,141
101.3
%
Collateralized Loan Obligation – Equity Investments
Structured Finance
Allegro CLO XII, Ltd.
CLO subordinated notes, estimated yield 13.53 % due July 21, 2037 (9)(11)(12)(18)(22)
August 21, 2024
$
3,000,000
$
1,861,641
$
1,350,000
Ares XLIV CLO Ltd.
CLO subordinated notes, estimated yield 21.10 % due April 15, 2034 (9)(11)(12)(18)(22)
December 15, 2023
5,000,000
1,333,874
877,005
Atlas Senior Loan Fund XI, Ltd.
CLO subordinated notes, estimated yield 0.00 % due July 26, 2031 (9)(11)(12)(18)(22)(25)
April 5, 2019
5,725,000
1,402,272
14,313
Bain Capital Credit CLO 2017-2, Ltd.
CLO subordinated notes, estimated yield 13.71 % due July 25, 2037 (9)(11)(12)(18)(22)
January 17, 2024
3,086,500
1,780,067
1,111,140
BlueMountain CLO 2014-2 Ltd.
CLO subordinated notes, estimated yield 0.00 % due October 20, 2030 (9)(11)(12)(18)(25)
April 3, 2019
6,374,000
365,288
63,740
BlueMountain CLO XXXI Ltd.
CLO subordinated notes, estimated yield 16.75 % due April 19, 2034 (9)(11)(12)(18)(22)
April 16, 2024
12,075,000
7,092,735
4,226,250
Carlyle Global Market Strategies CLO 2021-6, Ltd.
CLO subordinated notes, estimated yield 13.39 % due January 15, 2038 (9)(11)(12)(14)(18)
June 30, 2021
29,600,000
18,330,018
12,136,000
(continued on next page)
The accompanying notes are an integral part of these financial statements.
11
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OXFORD SQUARE CAPITAL CORP.
SCHEDULE OF INVESTMENTS — (continued)
December 31, 2025
COMPANY/INVESTMENT (1)(20)
ACQUISITION
DATE
PRINCIPAL
AMOUNT
COST
FAIR
VALUE (2)
% OF
NET
ASSETS (10)
Collateralized Loan Obligation – Equity Investments – (continued)
Structured Finance – (continued)
Cedar Funding II CLO, Ltd.
CLO subordinated notes, estimated yield 8.60 % due July 22, 2038 (9)(11)(12)(13)(18)(24)
October 23, 2013
$
18,000,000
$
10,594,006
$
6,505,322
Cedar Funding VI CLO, Ltd.
CLO subordinated notes, estimated yield 9.77 % due April 20, 2034 (9)(11)(12)(18)
May 15, 2017
7,700,000
5,455,615
2,579,500
CIFC Funding 2014-3, Ltd.
CLO income notes, estimated yield 0.00 % due March 31, 2038 (9)(11)(12)(18)(22)(25)
January 24, 2017
1,000,000
1,906,343
530,000
Dryden 43 Senior Loan Fund
CLO subordinated notes, estimated yield 4.23 % due April 20, 2034 (9)(11)(12)(14)(18)
June 1, 2021
47,263,000
21,945,691
9,925,230
Generate CLO 10, Ltd.
CLO subordinated notes, estimated yield 18.56 % due January 22, 2038 (9)(11)(12)(14)(18)
August 13, 2025
30,000,000
21,704,094
17,700,000
Gulf Stream Meridian 5 Ltd.
CLO subordinated notes, estimated yield 15.47 % due October 15, 2039 (9)(11)(12)(18)(22)
November 15, 2023
6,625,000
3,487,610
2,713,271
Madison Park Funding XVIII, Ltd.
CLO subordinated notes, estimated yield 0.00 % due October 21, 2030 (9)(11)(12)(15)(18)(22)(25)
May 22, 2020
12,500,000
1,419,879
603,750
Madison Park Funding XIX, Ltd.
CLO subordinated notes, estimated yield 11.19 % due January 22, 2037 (9)(11)(12)(18)(22)
May 11, 2016
5,422,500
2,386,298
1,789,425
OCP CLO 2024-37, Ltd.
CLO subordinated notes, estimated yield 13.01 % due October 15, 2037 (9)(11)(12)(14)(18)(22)
September 27, 2024
27,035,000
24,028,836
18,113,450
Octagon Investment Partners 49, Ltd.
CLO subordinated notes, estimated yield 6.21 % due April 15, 2037 (9)(11)(12)(13)(14)(18)(24)
December 11, 2020
26,375,000
15,732,561
7,670,797
Reese Park CLO, Ltd.
CLO subordinated notes, estimated yield 17.42 % due January 15, 2038 (9)(11)(12)(18)(22)
August 13, 2025
16,160,000
8,497,742
6,625,600
CLO subordinated M2 fee notes, due January 15, 2038 (11)(12)(13)(22)(24)
August 13, 2025
21,008,000
580,842
552,841
Sound Point CLO XVI, Ltd.
CLO subordinated notes, estimated yield 0.00 % due July 25, 2030 (9)(11)(12)(18)(25)
August 1, 2018
45,500,000
19,023,511
4,550
Telos CLO 2013-3, Ltd.
CLO subordinated notes, estimated yield 0.00 % due July 17, 2026 (9)(11)(12)(18)(22)(25)
January 25, 2013
14,447,790
6,207,075
1,445
(continued on next page)
The accompanying notes are an integral part of these financial statements.
12
Table of Contents
OXFORD SQUARE CAPITAL CORP.
SCHEDULE OF INVESTMENTS — (continued)
December 31, 2025
COMPANY/INVESTMENT (1)(20)
ACQUISITION
DATE
PRINCIPAL
AMOUNT/
SHARES
COST
FAIR
VALUE (2)
% OF
NET
ASSETS (10)
Collateralized Loan Obligation – Equity Investments – (continued)
Structured Finance – (continued)
Telos CLO 2014-5, Ltd.
CLO subordinated notes, estimated yield 0.00 % due April 17, 2028 (9)(11)(12)(15)(18)(25)
April 11, 2014
$
28,500,000
$
18,179,226
$
—
Venture XX, Ltd.
CLO subordinated notes, estimated yield 0.00 % due April 15, 2027 (9)(11)(12)(15)(18)(22)(25)
July 27, 2018
3,000,000
332,779
—
Venture 35 CLO, Limited
CLO subordinated notes, estimated yield 0.00 % due October 22, 2031 (9)(11)(12)(18)(25)
December 7, 2020
5,000,000
512,144
12,500
Zais CLO 6, Ltd.
CLO subordinated notes, estimated yield 0.00 % due July 15, 2029 (9)(11)(12)(13)(18)(24)(25)
May 3, 2017
10,500,000
5,069,347
6,129
Total Structured Finance
$
199,229,494
$
95,112,258
65.4
%
Total Collateralized Loan Obligation – Equity Investments
$
199,229,494
$
95,112,258
65.4
%
Common Stock
IT Consulting
UniTek Global Services, Inc.
common equity (7)
January 13, 2015
1,244,188
$
684,960
$
—
Total IT Consulting
$
684,960
$
—
0.0
%
Telecommunication Services
ConvergeOne Holdings, Inc.
common equity (7)
May 8, 2024
95,775
$
1,349,602
$
359,156
Total Telecommunication Services
$
1,349,602
$
359,156
0.2
%
Total Common Stock
$
2,034,562
$
359,156
0.2
%
Simple Agreements for Future Equity (“SAFE”)
Artificial Intelligence
Infinity Constellation Inc.
SAFE Investment (7)(27)
November 25, 2025
N/A
$
4,000,000
$
4,000,000
Total Artificial Intelligence
$
4,000,000
$
4,000,000
2.8
%
Total SAFE
$
4,000,000
$
4,000,000
2.8
%
Warrants
Healthcare
Careismatic Brands, Inc. (f/k/a New Trojan Parent, Inc.)
common equity warrants ( June 13, 2029 expiry, $ 119.80 strike) (7)
June 13, 2024
62,157
$
—
$
—
Total Healthcare
$
—
$
—
0.0
%
Total Warrants
$
—
$
—
0.0
%
(continued on next page)
The accompanying notes are an integral part of these financial statements.
13
Table of Contents
OXFORD SQUARE CAPITAL CORP.
SCHEDULE OF INVESTMENTS — (continued)
December 31, 2025
COMPANY/INVESTMENT (1)(20)
ACQUISITION
DATE
SHARES
COST
FAIR
VALUE (2)
% OF
NET
ASSETS (10)
Preferred Stock
IT Consulting
UniTek Global Services, Inc.
Series B Preferred Stock (17)
June 26, 2019
21,427,212
$
9,002,159
$
—
Series B Senior Preferred Stock (17)
June 26, 2019
12,080,847
4,535,443
—
Series B Super Senior Preferred Stock (3)(17)(21)
June 26, 2019
7,863,657
2,592,024
5,006,790
Total IT Consulting
$
16,129,626
$
5,006,790
3.4
%
Total Preferred Stock
$
16,129,626
$
5,006,790
3.4
%
Total Investments in Securities (8)
$
390,403,599
$
251,731,345
173.1
%
Cash Equivalents
First American Government Obligations Fund – Class Z Shares, 3.64 % (19)
51,236,068
$
51,236,068
$
51,236,068
Total Cash Equivalents
$
51,236,068
$
51,236,068
35.2
%
Total Investments in Securities and Cash
Equivalents
$
441,639,667
$
302,967,413
208.3
%
____________
(1) The Company generally acquires its investments in transactions not subject to registration under the Securities Act of 1933, as amended (the “Securities Act”). These investments are generally subject to restrictions as “restricted securities” (within the meaning of the Securities Act). Unless otherwise noted, all securities were acquired in transactions not subject to registration under the Securities Act.
(2) Fair value is determined in good faith by the Board of Directors of the Company.
(3) As of December 31, 2025, the portfolio includes approximately $34.0 million of principal amount of debt investments and 7,863,657 shares of preferred stock investments which contain an active payment -in-kind (“PIK”) provision.
(4) Notes bear interest at variable rates and are subject to an interest rate floor where disclosed. The rate disclosed is as of December 31, 2025.
(5) Cost value reflects accretion of original issue discount or market discount, or amortization of premium.
(6) Cost value reflects repayment of principal.
(7) Non -income producing as of December 31, 2025.
(8) Aggregate gross unrealized appreciation for U.S. federal income tax purposes is $3,199,699; aggregate gross unrealized depreciation for U.S. federal income tax purposes is $147,160,305. Net unrealized depreciation is $143,960,606 based upon an estimated tax cost basis of $395,691,951 as of December 31, 2025.
(9) Cost reflects accretion of effective yield less any cash distributions received or entitled to be received from collateralized loan obligation (“CLO”) equity investments.
(10) Totals may not sum due to rounding.
(11) Indicates assets that the Company believes do not represent “qualifying assets” under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”). The Company may include CLO equity side letter related investments within CLO equity subordinated notes line items, and those side letter related investments may represent qualifying assets under Section 55(a) of the 1940 Act. 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, the Company held qualifying assets that represented 68.8% of its total assets.
(12) Investment not domiciled in the United States.
(13) Fair value includes the Company’s interest in subordinated fee notes and represents discounted cash flows associated with fees earned from CLO equity investments.
(14) Aggregate investments represent greater than 5% of net assets.
(15) The CLO equity investment was optionally redeemed. Expected value of residual distributions, once received, is anticipated to be recognized as return of capital, pending any remaining amortized cost, and/or realized gain for any amounts received in excess of such amortized cost.
(16) The principal balance outstanding for this investment, in whole or in part, is indexed to 90 -day SOFR.
(continued on next page)
The accompanying notes are an integral part of these financial statements.
14
Table of Contents
OXFORD SQUARE CAPITAL CORP.
SCHEDULE OF INVESTMENTS — (continued)
December 31, 2025
(17) As of December 31, 2025, this preferred equity investment was on non -accrual status and no dividend income has been recognized on this investment during the year ended December 31, 2025. The aggregate fair value of these investments was approximately $5.0 million.
(18) The CLO subordinated notes and income notes are considered equity positions in CLO vehicles. Equity investments are entitled to recurring distributions which are generally equal to the remaining cash flow of the payments made by the underlying fund’s securities less contractual payments to debt holders and fund expenses. The estimated yield indicated is based on the prior quarters ending investment cost (for previously existing portfolio investments) or the original cost for those investments made during the current quarter, as well as, a current projection of the future cash flows. Such projections are periodically reviewed and adjusted, and the estimated yield may not ultimately be realized.
(19) Represents cash equivalents held in a money market fund as of December 31, 2025.
(20) The fair value of the investment was determined using significant unobservable inputs. See “Note 3. Fair Value.”
(21) The Company holds preferred stock in UniTek Global Services, Inc. that is entitled to receive cumulative preferential dividends at a rate of 20.0% per annum payable in additional shares.
(22) The investment is co -invested with the Company’s affiliates. See “Note 7. Related Party Transactions.”
(23) The principal balance outstanding for this investment, in whole or in part, is indexed to 30 -day SOFR.
(24) Cost value reflects amortization.
(25) As of December 31, 2025, the effective yield has been estimated to be 0%. The aggregate projected amount of future recurring distributions and terminal principal payment is less than the amortized investment cost.
(26) The principal balance outstanding for this investment is indexed to the greater of: (i) the federal funds rate, plus 0.50%; (ii) the prime lending rate; or (iii) the adjusted eurocurrency rate, plus 1.00%. The principal balance outstanding is also subject to a 2.00% annual PIK penalty, as the senior secured notes are past maturity.
(27) The Company’s SAFE investment in Infinity Constellation Inc. is not debt (no stated interest or maturity) and provides the right to receive equity in the future upon a qualifying equity financing.
The accompanying notes are an integral part of these financial statements.
15
Table of Contents
OXFORD SQUARE CAPITAL CORP.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months
Ended
March 31,
2026
Three Months
Ended
March 31,
2025
INVESTMENT INCOME
From non-affiliated/non-control investments:
Interest income – debt investments (1)
$
4,318,750
$
4,826,404
Interest income – debt investments – PIK (1)
786,922
708,351
Income from securitization vehicles and investments
3,224,198
3,956,053
Other income
612,808
670,242
Total investment income from non-affiliated/non-control investments
8,942,678
10,161,050
Total investment income
8,942,678
10,161,050
EXPENSES
Interest expense
2,791,255
1,959,287
Base Fee
990,631
1,058,785
Professional fees
346,627
323,452
Compensation expense
246,930
239,577
General and administrative
312,666
355,259
Excise tax
104,778
120,816
Total expenses before incentive fees
4,792,887
4,057,176
Net Investment Income Incentive Fees
—
—
Total incentive fees
—
—
Total expenses
4,792,887
4,057,176
Net investment income
4,149,791
6,103,874
NET CHANGE IN UNREALIZED APPRECIATION/(DEPRECIATION) AND REALIZED LOSSES ON INVESTMENT TRANSACTIONS
Net change in unrealized appreciation/(depreciation) on investments:
Non-Affiliate/non-control investments
1,063,853
( 1,366,018
)
Affiliated investments
—
( 700,878
)
Total net change in unrealized appreciation/(depreciation) on investments
1,063,853
( 2,066,896
)
Net realized losses:
Non-affiliated/non-control investments
( 30,738,465
)
( 12,158,495
)
Total net realized losses
( 30,738,465
)
( 12,158,495
)
Net change in unrealized and realized losses
( 29,674,612
)
( 14,225,391
)
Net decrease in net assets resulting from operations
$
( 25,524,821
)
$
( 8,121,517
)
Net increase in net assets resulting from net investment income per common share (Basic and Diluted):
$
0.05
$
0.09
Net decrease in net assets resulting from operations per common share (Basic and Diluted):
$
( 0.29
)
$
( 0.12
)
Weighted average shares of common stock outstanding (Basic and Diluted):
88,278,112
69,984,752
Distributions per share
$
0.105
$
0.105
____________
(1) Change in prior period was made to conform to the current period presentation.
The accompanying notes are an integral part of these unaudited financial statements.
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OXFORD SQUARE CAPITAL CORP.
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
Three Months
Ended
March 31,
2026
Three Months
Ended
March 31,
2025
Decrease in net assets from operations:
Net investment income…
$
4,149,791
$
6,103,874
Net change in unrealized appreciation/(depreciation) on investments
1,063,853
( 2,066,896
)
Net realized losses
( 30,738,465
)
( 12,158,495
)
Net decrease in net assets resulting from operations
( 25,524,821
)
( 8,121,517
)
Distributions to stockholders
Distributions from net investment income
( 9,270,181
)
( 7,349,702
)
Tax return of capital distributions
—
—
Total distributions to stockholders
( 9,270,181
)
( 7,349,702
)
Capital share transactions:
Issuance of common stock (net of underwriting fees and offering costs of $ 159,741 and $ 108,958 , respectively)
12,305,801
3,464,649
Reinvestment of distributions
349,441
223,400
Net increase in net assets from capital share transactions
12,655,242
3,688,049
Total decrease in net assets
( 22,139,760
)
( 11,783,170
)
Net assets at beginning of period
145,404,802
160,665,480
Net assets at end of period
$
123,265,042
$
148,882,310
Capital share activity:
Shares issued
7,183,267
1,341,138
Shares issued from reinvestment of distributions
205,105
87,090
Net increase in capital share activity
7,388,372
1,428,228
The accompanying notes are an integral part of these unaudited financial statements.
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OXFORD SQUARE CAPITAL CORP.
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months
Ended
March 31,
2026
Three Months
Ended
March 31,
2025
CASH FLOWS FROM OPERATING ACTIVITIES
Net decrease in net assets resulting from operations
$
( 25,524,821
)
$
( 8,121,517
)
Adjustments to reconcile net decrease in net assets resulting from operations to net cash (used in)/provided by operating activities:
Accretion of discounts on investments
( 994,796
)
( 870,249
)
Accretion of discount on notes payable and deferred debt issuance costs
236,100
152,557
PIK income
( 786,922
)
( 839,332
)
Purchases of investments
( 21,754,423
)
( 18,529,963
)
Repayments of principal
392,831
8,684,540
Proceeds from the sale of investments
—
9,177,794
Net realized losses on investments
30,738,465
12,158,495
Reductions to CLO equity cost value
3,882,610
1,721,862
Net change in unrealized (appreciation)/depreciation on investments
( 1,063,853
)
2,066,896
Decrease in interest and distributions receivable
471,029
297,681
Decrease in other assets
41,784
188,228
Decrease in Base Fee and Net Investment Income Incentive Fee payable
( 45,427
)
( 157,180
)
Increase in accrued expenses
12,427
58,045
Net cash (used in)/provided by operating activities
( 14,394,996
)
5,987,857
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions paid (net of stock issued under distribution reinvestment plan of $ 349,441 and $ 223,400 , respectively, and distributions payable)
( 8,920,740
)
( 7,126,302
)
Proceeds from issuance of common stock
12,465,542
3,573,607
Underwriting fees and offering costs for the issuance of common stock
( 159,741
)
( 108,958
)
Net cash provided by/(used in) financing activities
3,385,061
( 3,661,653
)
Net (decrease)/increase in cash and cash equivalents
( 11,009,935
)
2,326,204
Cash and cash equivalents, beginning of period
51,934,647
34,926,468
Cash and cash equivalents, end of period
$
40,924,712
$
37,252,672
NON-CASH FINANCING ACTIVITIES
Value of shares issued in connection with distribution reinvestment plan
$
349,441
$
223,400
SUPPLEMENTAL DISCLOSURES
Cash paid for interest
$
2,555,156
$
1,806,730
Securities sold not settled
$
—
$
1,589,875
Securities purchased not settled
$
—
$
9,516,875
The accompanying notes are an integral part of these unaudited financial statements.
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 1. UNAUDITED INTERIM FINANCIAL STATEMENTS
Interim financial statements of Oxford Square Capital Corp. (“OXSQ” or the “Company”), are prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10 -Q and Articles 6, 10 and 12 of Regulation S -X . Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with GAAP are omitted. In the opinion of management, the unaudited financial results included herein contain all adjustments, consisting solely of normal accruals, considered necessary for the fair statement of the results for the interim period included herein. The current period’s results of operations are not necessarily indicative of results that may be achieved for the year. The interim financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10 -K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission (“SEC”) on March 6, 2026.
NOTE 2. ORGANIZATION
The Company was incorporated under the General Corporation Laws of the State of Maryland (“MGCL”) on July 21, 2003 and is a closed -end investment company. The Company has elected to be regulated as a business development company (“BDC”) under the 1940 Act. In addition, the Company has elected to be treated for tax purposes as a regulated investment company (“RIC”), under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”) beginning with its 2003 taxable year. The Company’s investment objective is to maximize its total return, by investing primarily in corporate debt securities and, to a lesser extent, CLOs, which are structured finance investments that own corporate debt securities.
The Company’s investment activities are managed by Oxford Square Management, LLC (“Oxford Square Management”). Oxford Square Management is an investment adviser registered under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). Oxford Square Management is owned by Oxford Funds, LLC (“Oxford Funds”), its managing member, and Charles M. Royce, a member of the Company’s Board of Directors (the “Board” or “Board of Directors”) who holds a minority, non -controlling interest in Oxford Square Management. Under the investment advisory agreement with Oxford Square Management (the “Investment Advisory Agreement”), the Company has agreed to pay Oxford Square Management an annual base investment advisory fee (the “Base Fee”) based on its gross assets as well as an incentive fee based on its performance. For further details, please refer to “Note 7. Related Party Transactions.”
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The Company follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services — Investment Companies .
In the normal course of business, the Company enters into a variety of undertakings containing a variety of warranties and indemnifications that may expose the Company to some risk of loss. The risk of future loss arising from such undertakings, while not quantifiable, is expected to be remote.
USE OF ESTIMATES
The financial statements have been prepared in accordance with GAAP, which requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates, and these differences could be material.
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
CONSOLIDATION
As provided under Regulation S -X and ASC Topic 946 -810 , Consolidation (“ASC 946 -810 ”), the Company will generally not consolidate its investment in a company other than a wholly -owned investment company or a controlled operating company whose business consists of providing services to the Company for the periods during which it was held.
CASH AND CASH EQUIVALENTS
Cash consists of deposits held at the Company’s custodian bank. Cash equivalents consist of highly liquid investments, such as money market funds, with original maturities of three months or less. The Company places its cash equivalents with financial institutions and, at times, cash held in bank accounts may exceed the Federal Deposit Insurance Corporation insured limit. Cash equivalents are classified as Level 1 assets and are included on the Company’s schedule of investments. Certain cash equivalents are carried at cost or amortized cost, which approximates fair value, and investments held in money market funds are valued at their net asset value (“NAV”) per share.
INVESTMENT VALUATION
The Company’s Board of Directors determines the fair value of the Company’s investments in accordance with the provisions of ASC 820, Fair Value Measurement (“ASC 820”) and Rule 2a -5 under the 1940 Act (“Rule 2a -5 ”). Estimates made in the preparation of the Company’s financial statements include the valuation of investments and the related amounts of unrealized appreciation and depreciation of investments recorded. The Company believes that there is no single definitive method for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments the Company makes. The Board of Directors values the Company’s investments for which market quotations are not readily available at fair value as determined in good faith by the Board of Directors on at least a quarterly basis. ASC 820 clarified the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition.
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a three -tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, which includes inputs such as quoted prices for similar securities in active markets and quoted prices for identical securities in markets that are not active; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company considers the attributes of current market conditions on an on -going basis and has determined that due to the general illiquidity of the market for its investment portfolio, whereby little or no market data exists, all of the Company’s investments are based upon Level 3 inputs as of March 31, 2026 and December 31, 2025.
The Board of Directors determines the value of its investment portfolio each quarter. In connection with that determination, members of Oxford Square Management’s portfolio management team prepare a quarterly analysis of each portfolio investment using the most recent portfolio company financial statements, forecasts and other relevant financial and operational information. The Company has and may continue to engage third -party valuation firms to provide assistance in valuing certain of its syndicated loans and bilateral investments, including related equity investments, although the Board of Directors ultimately determines the appropriate valuation of each such investment. Changes in fair value, as described above, are recorded in the statements of operations as net change in unrealized appreciation/depreciation on investments.
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Syndicated Loans (Including Senior Secured Notes)
In accordance with ASC 820, the Company’s valuation procedures specifically provide for the review of indicative quotes supplied by the large agent banks that make a market for each security. However, the marketplace from which the Company obtains indicative bid quotes for purposes of determining the fair value of its syndicated loan investments has shown attributes of illiquidity as described by ASC 820. During such periods of illiquidity, when the Company believes that the non -binding indicative bids received from agent banks for certain syndicated loan investments that it owns may not be determinative of their fair value, or when no market indicative quote is available, the Company has and may continue to engage third -party valuation firms to provide assistance in valuing certain syndicated investments that the Company owns. The third -party valuation firms may use the income or market approach in arriving at a valuation. Unobservable inputs utilized could include discount rates derived from estimated credit spreads and earnings before interest, taxes, depreciation, and amortization (“EBITDA”) multiples. In addition, Oxford Square Management analyzes each syndicated loan by reviewing the portfolio company’s financial statements, covenant compliance and recent trading activity in the security, if known, and other business developments related to the portfolio company. All available information, including non -binding indicative bids which may not be determinative of fair value, is presented to the Company’s Valuation Committee (the “Valuation Committee”) to consider in its determination of fair value. In some instances, there may be limited trading activity in a security even though the market for the security is considered not active. In such cases, the Valuation Committee will consider the number of trades, the size and timing of each trade, and other circumstances around such trades, to the extent such information is available, in its determination of fair value. The Valuation Committee will evaluate the impact of such additional information, and factor it into its consideration of the fair value that is indicated by the analysis provided by third -party valuation firms, if any. When we receive warrants or other equity securities at nominal or no additional cost in connection with a new syndicated loan investment, or due to a restructuring of an existing investment, the cost basis in the new investments will be allocated between the new debt securities and any such warrants or other equity securities received at the time of origination/restructuring. These investments may be subsequently valued using a multitude of methods, including, but not limited to, intrinsic value methods, Black -Scholes models, and Monte Carlo option pricing models. All information is presented to the Board for its determination of fair value of these investments.
Collateralized Loan Obligations — Debt and Equity
The Company has acquired debt and equity positions in CLO investment vehicles and can purchase CLO warehouse facilities. These investments are special purpose financing vehicles. In valuing such investments, the Company considers the indicative prices provided by a recognized industry pricing service as a primary source, and the implied yield of such prices, supplemented by actual trades executed in the market at or around period -end , as well as the indicative prices provided by the broker who arranges transactions in such investment vehicles. The Company also considers those instances in which the record date for an equity distribution payment falls on or before the last day of the period, and the likelihood that a prospective purchaser would require a downward adjustment to the indicative price representing substantially all of the pending distribution. Additional factors include any available information on other relevant transactions including firm bids and offers in the market and information resulting from bids -wanted-in-competition . In addition, the Company considers the operating metrics of the specific investment vehicle, including compliance with collateralization tests, defaulted and restructured securities, and payment defaults, if any. In periods of illiquidity and volatility, the Company may rely more heavily on other qualities and metrics, including but not limited to, the collateral manager, time left in the reinvestment period, expected cash flows and overcollateralization ratios, instead of the Company’s generated valuation yields.
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Oxford Square Management or the Valuation Committee may request an additional analysis by a third -party firm to assist in the valuation process of CLO investment vehicles. All information is presented to the Board for its determination of fair value of these investments.
Bilateral Investments (Including Equity)
Bilateral investments (as defined below) for which market quotations are readily available are valued by an independent pricing agent or market maker. If such market quotations are not readily available, under the valuation procedures approved by the Board, upon the recommendation of the Valuation Committee, a third -party valuation firm will prepare valuations for each of the Company’s bilateral investments that, when combined with all other investments in the same portfolio company, have a value as of the previous quarter of greater than or equal to 2.0 % of its total assets as of the previous quarter. In addition, in those instances where a third -party valuation is prepared for a portfolio investment which meets the parameters noted above, the frequency of those third -party valuations is based upon the grade assigned to each such security under its credit grading system as follows: Grade 1, at least annually; Grade 2, at least semi -annually ; Grades 3, 4, and 5, at least quarterly. Bilateral investments which do not meet the parameters above are not required to have a third -party valuation and, in those instances, a valuation analysis will be prepared by Oxford Square Management. The Company may also value a recently purchased investment at cost, unless such valuation, in the judgement of the Valuation Committee, does not represent fair value. All information is presented to the Board for its determination of fair value of these investments.
The term “Bilateral investments” means debt and equity investments directly negotiated between the Company and a portfolio company, but excludes syndicated loans (i.e., corporate loans arranged by an agent on behalf of a company, portions of which are held by multiple investors in addition to OXSQ).
Refer to “Note 4. Fair Value” in the notes to the Company’s financial statements for more information on investment valuation and the Company’s portfolio of investments.
INVESTMENT INCOME
Interest Income
Interest income is recorded on an accrual basis using the contractual rate applicable to each debt investment and includes the accretion of market discounts and/or original issue discount (“OID”) and amortization of market premiums. Discounts from and premiums to par value on securities purchased are accreted/amortized into interest income over the life of the respective security using the effective yield method. The amortized cost of investments represents the original cost adjusted for the accretion of discounts and amortization of premiums, if any.
Interest income also includes a payment -in-kind (“PIK”) component on certain investments in the Company’s portfolio. Refer to the section below, “Payment -In-Kind ,” for a description of PIK income and its impact on interest income.
Payment-In-Kind
The Company has debt and preferred stock investments in its portfolio that contain contractual PIK provisions. PIK interest and preferred stock dividends are computed at their contractual rates and are accrued into income and recorded as interest and dividend income, respectively. The PIK amounts are added to the principal balances on the capitalization dates. Upon capitalization, the PIK portions of the investments are valued at their respective fair values. If the Company believes that PIK is not fully expected to be realized, the PIK investment would be placed on non -accrual status. When a PIK investment is placed on non -accrual status, the accrued, uncapitalized interest or dividends would be reversed from the related receivable through interest or dividend
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
income, respectively. PIK investments on non -accrual status are restored to accrual status once it becomes probable that such PIK will be ultimately collectible in cash. For the three months ended March 31, 2026, approximately $ 787,000 of PIK interest was recognized as interest income. For the three months ended March 31, 2025, approximately $ 708,000 of PIK interest was recognized as interest income and approximately $ 131,000 of PIK was recognized as other income. For the three months ended March 31, 2026 and 2025, the Company did not recognize PIK dividend income on its preferred stock investments.
Income from Securitization Vehicles and Investments
Income from investments in the equity class securities of CLO vehicles (typically income notes or subordinated notes) is recorded using the effective interest method in accordance with the provisions of ASC 325 -40 , Beneficial Interests in Securitized Financial Assets , based upon estimated cash flows, amounts and timing, including those CLO equity investments that have not made their inaugural distribution for the relevant period end. The Company monitors the expected residual payments, and effective yield is determined and updated periodically, as needed. Accordingly, investment income recognized on CLO equity securities in the statements of operations differs from both the tax -basis investment income and from the cash distributions actually received by the Company during the period.
The Company also records income on its investments in CLO warehouse facilities based on a stated rate per the underlying note purchase agreement plus accrued interest or, if there is no stated rate, then an estimated rate is calculated using a base case model projecting the timing of the ramp -up of the CLO warehouse facility. For the three months ended March 31, 2026 and 2025, no income was recognized related to CLO warehouse facilities. As of March 31, 2026 and December 31, 2025, the Company did not hold any investments in CLO warehouse facilities.
Other Income
Other income includes prepayment, amendment, and other fees earned by the Company’s loan investments, distributions from fee letters and success fees associated with portfolio investments. Distributions from fee letters are an enhancement to the return on a CLO equity investment and are based upon a percentage of the collateral manager’s fees above the amortized cost, and are recorded as other income when earned. The Company may also earn success fees associated with its investments in certain securitization vehicles or CLO warehouse facilities, which are contingent upon a repayment of the warehouse by a permanent CLO securitization structure; such fees are earned and recognized when the repayment is completed. The Company also earns other income on its cash equivalents balance, which represents cash invested in a money market fund.
Preferred Stock Dividends
The Company holds preferred stock investments in its portfolio that contain cumulative preferred dividends that accumulate quarterly. The Company will generally record cumulative preferred dividends as investment income when they are received or declared by the portfolio company’s board of directors or upon any voluntary or involuntary liquidation, dissolution or winding up of the portfolio company, and are collectible. As of March 31, 2026, the Company’s preferred equity investments in one of its portfolio companies were on non -accrual status, which had an aggregate fair value of approximately $ 5.2 million. As of December 31, 2025, the Company’s preferred equity investments in one of its portfolio companies were on non -accrual status, which had an aggregate fair value of approximately $ 5.0 million. There were no cumulative preferred dividends recorded as dividend income during the three months ended March 31, 2026 and 2025, as the Company deemed them to be uncollectible.
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Non-Accrual Investments
Investments are generally placed on non -accrual status when there is reasonable doubt that principal or interest or dividends will be collected in full and the Company will generally cease recognizing interest or dividend income on that investment for financial reporting purposes until all principal and interest or dividends have been brought current through payment or due to restructuring such that the interest or dividend income is deemed to be collectible. The Company generally restores non -accrual investments to accrual status when past due principal and interest or dividend is paid and, in the Company’s judgment, is likely to remain current. As of March 31, 2026, the Company had one debt investment that was on non -accrual status. As of December 31, 2025, the Company did not have any debt investments that were on non -accrual status.
DEFERRED DEBT ISSUANCE COSTS
Deferred debt issuance costs consist of fees and expenses incurred in connection with the closing or amending of credit facilities and debt offerings, and are capitalized at the time of payment. These costs are amortized using the straight line method over the terms of the respective credit facilities and debt securities. The amortized expenses are included in interest expense in the Company’s financial statements. The unamortized deferred debt issuance costs on debt offerings are included on the Company’s statements of assets and liabilities as a direct deduction from the related debt liability, whereas unamortized deferred debt issuance costs associated with credit facilities, if any, are included within other assets. Upon early termination or partial principal pay down of debt, or a credit facility, the unamortized costs related to such debt are accelerated into realized losses on extinguishment of debt on the Company’s statements of operations.
EQUITY OFFERING COSTS
Equity offering costs consist of fees and expenses incurred in connection with the registration and public offer and sale of the Company’s common stock, including legal, audit and printing fees. These costs are deferred at the time of incurrence and are subsequently charged as a reduction to capital when the offering takes place or as shares are issued. Deferred costs are periodically reviewed and expensed if the related registration is no longer active.
SHARE REPURCHASES
From time to time, the Board may authorize a share repurchase program under which shares are purchased in open market transactions. Since the Company is incorporated in Maryland, MGCL requires share repurchases to be accounted for as a share retirement. The cost of repurchased shares is charged against capital on the settlement date.
On October 30, 2025, the Board of Directors authorized a 12 -month share repurchase program (the “Share Repurchase Program”). Under the Share Repurchase Program, the Company may repurchase, during the 12 -month period commencing on October 30, 2025, up to $ 25.0 million in the aggregate of the Company’s outstanding common stock in the open market. The timing, manner, price and amount of any share repurchases will be determined by the Company, in its discretion, based upon the evaluation of economic and market conditions, the Company’s stock price, applicable legal, contractual and regulatory requirements and other factors. 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 the Company to repurchase any specific number of shares, and the Company cannot assure stockholders that any shares will be repurchased under the Share Repurchase Program. The Share Repurchase Program may be suspended, extended, modified or discontinued at any time. As of March 31, 2026 and December 31, 2025, no shares were repurchased under the Share Repurchase Program.
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
SECURITIES TRANSACTIONS
Securities transactions are recorded on the trade date. Realized gains and losses on investments sold are recorded on the basis of specific identification. An optional redemption (“optionally redeemed”) feature of a CLO allows a majority of the holders of the equity securities issued by the CLO issuer, after the end of a specified non -call period, to cause the redemption of the secured notes issued by the CLO with proceeds paid either through the liquidation of the CLO’s assets or through a refinancing with new debt. The optional redemption is effectively a voluntary prepayment of the secured debt issued by the CLO prior to the stated maturity of such debt. Distributions received on CLO equity investments where the optional redemption feature has been exercised are first applied to the remaining cost basis until it is reduced to zero, after which distributions are recorded as realized gains. In the event a redeemed CLO indenture is discharged, any remaining cost after applying any final cash payment will be recorded as a realized loss.
U.S. FEDERAL INCOME TAXES
The Company intends to operate so as to qualify to be taxed as a RIC under Subchapter M of the Code and, as such, to not be subject to U.S. federal income tax on the portion of its taxable income and gains timely distributed to stockholders. To qualify for RIC tax treatment, the Company is required to distribute at least 90 % of its investment company taxable income annually, meet certain source -of-income requirements annually and certain diversification requirements quarterly and file Form 1120 -RIC , as defined by the Code.
Because U.S. federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future. Differences in classification may also result from the treatment of short -term gains as ordinary income for tax purposes.
The Company recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained, assuming examination by tax authorities. Through March 31, 2026, management has analyzed the Company’s tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions expected to be taken in the Company’s 2025 or 2026 tax returns. The Company identifies its major tax jurisdictions as U.S. Federal and the state of Connecticut. The Company did not have any uncertain tax positions that met the recognition measurement criteria of ASC 740 -10-25 , Income Taxes , nor did the Company have any unrecognized tax benefits as of the periods presented herein. The Company files tax returns with the Internal Revenue Service and the state of Connecticut. Generally, each of the last three tax returns filed remains subject to examination by taxing authorities.
For tax purposes, the cost basis of the portfolio investments as of March 31, 2026 and December 31, 2025, was approximately $ 383,076,273 and $ 395,691,951 , respectively.
RECENT ACCOUNTING PRONOUNCEMENTS
In November 2024, the FASB issued ASU 2024 -03 , “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures” (“ASU 2024 -03 ”), which requires public business entities to disclose disaggregated expense details in their income statements, including categories such as employee compensation, depreciation, and amortization. The update aims to enhance transparency by requiring tabular disclosures and qualitative descriptions for unspecified amounts. Additionally, entities must report total selling
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
expenses and their definitions annually. The standard is effective for annual periods beginning after December 15, 2026, with interim periods following in 2027, and early adoption is permitted. The Company is currently assessing the impact of this guidance, however, the Company does not expect a material impact on its financial statements.
NOTE 4. FAIR VALUE
The Company’s assets measured at fair value by investment type on a recurring basis as of March 31, 2026 were as follows:
Assets ($ in millions)
Fair Value Measurements at Reporting Date Using
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Senior Secured Notes
$
—
$
—
$
150.8
$
150.8
CLO Equity
—
—
72.2
72.2
Equity and Other Investments
—
—
12.4
12.4
Total Investments at fair value
—
—
235.4
235.4
Cash equivalents
40.6
—
—
40.6
Total assets at fair value
$
40.6
$
—
$
235.4
$
276.0
The Company’s assets measured at fair value by investment type on a recurring basis as of December 31, 2025 were as follows:
Assets ($ in millions)
Fair Value Measurements at Reporting Date Using
Total
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Senior Secured Notes
$
—
$
—
$
147.3
$
147.3
CLO Equity
—
—
95.1
95.1
Equity and Other Investments
—
—
9.4
9.4
Total Investments at fair value (1)
—
—
251.7
251.7
Cash equivalents
51.2
—
—
51.2
Total assets at fair value (1)
$
51.2
$
—
$
251.7
$
303.0
____________
(1) Totals may not sum due to rounding.
Significant Unobservable Inputs for Level 3 Investments
The following tables provide quantitative information about the Company’s Level 3 fair value measurements as of March 31, 2026 and December 31, 2025, respectively. The Company’s Valuation Policy, which was previously approved by the Board of Directors, establishes parameters for the sources and types of valuation analysis, as well
26
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 4. FAIR VALUE (cont.)
as the methodologies and inputs that the Company uses in determining fair value. If the Valuation Committee or Oxford Square Management determines that additional techniques, sources or inputs are appropriate or necessary in a given situation, such additional analysis will be undertaken. The tables, therefore, are not all -inclusive , but provide information on the significant Level 3 inputs that are pertinent to the Company’s fair value measurements. The weighted average calculations in the tables below are based on fair values for all debt related calculations and CLO equity.
Quantitative Information about Level 3 Fair Value Measurements
Impact to
Fair Value
from an
Increase
in Input (2)
Assets ($ in millions)
Fair Value
as of
March 31,
2026
Valuation
Techniques/
Methodologies
Unobservable
Input
Range/Weighted
Average (1)
Senior Secured
Notes
$
150.8
Market quotes
NBIB (3)
21.5% – 100.0%/78.6%
NA
CLO Equity
68.7
Market quotes
NBIB (3)
0.0% – 57.0%/21.4%
NA
1.9
Discounted cash flow (5)
Discount rate (6)
20.3% – 27.0%/23.9%
Decrease
1.6
Liquidation Net Asset Value (9)
NBIB (3)
0.0% – 22.5%/7.7%
NA
Equity and Other
7.1
Recent transactions
Actual trade/payoff (10)
0.0% – 102.7%/92.3%
NA
Investments
5.2
Enterprise value (7)
Market multiples (8)
9.0x – 10.0x/9.5x
Increase
0.0
Market quotes
NBIB (3)
$0.15/ncm (4)
NA
Total Fair Value for
Level 3 Investments (11)
$
235.4
____________
(1) Weighted averages are calculated based on fair value of investments.
(2) The impact on the fair value measurement of an increase in each unobservable input is in isolation. The discount rate is the rate used to discount future cash flows in a discounted cash flow calculation. An increase in the discount rate, in isolation, would result in a decrease in the fair value measurement. Market multiples refer to the input (often derived from the value of a comparable company) that is multiplied by the historic and/or expected EBITDA of a company in order to estimate the company’s value. An increase in the market multiples, in isolation, would result in an increase in the fair value measurement.
(3) The Company generally uses prices provided by an independent pricing service, or broker or agent bank non -binding indicative bid prices (“NBIB”), on or near the valuation date as the primary basis for the fair value determinations for syndicated notes, and CLO debt and equity investments, which may be adjusted for pending equity distributions as of valuation date. These bid prices are non -binding and may not be determinative of fair value. Each bid price is evaluated by the Valuation Committee in conjunction with additional information compiled by Oxford Square Management, including financial performance, recent business developments, and, in the case of CLO debt and equity investments, performance and covenant compliance information as provided by the independent trustee.
(4) The calculation of weighted average for a range of values, for a single investment within a given asset category, is not considered to provide a meaningful representation (“ncm”).
(5) The Company calculates the fair value of certain CLO equity investments based upon the net present value of expected contractual payment streams discounted using estimated market yields for the equity tranche of the respective CLO vehicle. The Company also considers those investments in which the record date for an equity distribution payment falls on or before the last day of the period, and the likelihood that a prospective purchaser would require an adjustment to the transaction price representing substantially all of the pending distribution.
(6) Discount rate represents the rate at which future cash flows are discounted to calculate a present value, reflecting market assumptions for risk.
(7) Enterprise value is defined as the total value of a company, including debt and cash. For senior secured notes and equity investments, third -party valuation firms evaluate the financial and operational information of the portfolio companies that the Company provides to them, as well as independent market and industry information that they consider appropriate in forming an opinion as to the fair value of the Company’s securities. In those instances where the carrying value and/or
27
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 4. FAIR VALUE (cont.)
internal credit rating of the investment does not require the use of a third -party valuation firm, a valuation is prepared by Oxford Square Management, which may include liquidation analysis or which may utilize a subsequent transaction to provide an indication of fair value.
(8) Market multiples represent an estimation of where market participants might value an enterprise based upon information available for comparable companies in the market.
(9) The fair value of those CLO equity positions which have been optionally redeemed are generally valued using a liquidation net asset value basis which represents the estimated expected residual value of the CLO as of the end of the period.
(10) Prices provided by independent pricing services are evaluated in conjunction with actual trades and payoffs and, in certain cases, the value represented by actual trades or payoffs may be more representative of fair value as determined by the Valuation Committee.
(11) Totals may not sum due to rounding.
Quantitative Information about Level 3 Fair Value Measurements
Impact to
Fair Value
from an
Increase
in Input (2)
Assets ($ in millions)
Fair Value
as of
December 31,
2025
Valuation
Techniques/
Methodologies
Unobservable
Input
Range/Weighted
Average (1)
Senior Secured Notes
$
147.3
Market quotes
NBIB (3)
18.2% – 100.6%/78.3%
NA
CLO Equity
91.2
Market quotes
NBIB (3)
0.0% – 67.0%/27.4%
NA
2.1
Discounted cash flow (5)
Discount rate (6)
14.5% – 25.9%/22.3%
Decrease
1.8
Liquidation Net Asset Value (9)
NBIB (3)
0.0% – 33.0%/4.8%
NA
Equity and Other Investments
0.4
Market quotes
NBIB (3)
$3.75/ncm (4)
NA
4.0
Recent Transactions
Actual trade/payoff (10)
100.0%/ncm (4)
NA
5.0
Enterprise value (7)
Market multiples (8)
8.8x – 9.8x/9.3x
Increase
Total Fair Value for
Level 3 Investments
$
251.7
____________
(1) Weighted averages are calculated based on fair value of investments.
(2) The impact on the fair value measurement of an increase in each unobservable input is in isolation. The discount rate is the rate used to discount future cash flows in a discounted cash flow calculation. An increase in the discount rate, in isolation, would result in a decrease in the fair value measurement. Market multiples refer to the input (often derived from the value of a comparable company) that is multiplied by the historic and/or expected EBITDA of a company in order to estimate the company’s value. An increase in the market multiples, in isolation, would result in an increase in the fair value measurement.
(3) The Company generally uses prices provided by an independent pricing service, or broker or agent bank non -binding indicative bid prices (“NBIB”), on or near the valuation date as the primary basis for the fair value determinations for syndicated notes, and CLO debt and equity investments, which may be adjusted for pending equity distributions as of valuation date. These bid prices are non -binding and may not be determinative of fair value. Each bid price is evaluated by the Valuation Committee in conjunction with additional information compiled by Oxford Square Management, including financial performance, recent business developments, and, in the case of CLO debt and equity investments, performance and covenant compliance information as provided by the independent trustee.
(4) The calculation of weighted average for a range of values, for a single investment within a given asset category, is not considered to provide a meaningful representation (“ncm”).
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 4. FAIR VALUE (cont.)
(5) The Company calculates the fair value of certain CLO equity investments based upon the net present value of expected contractual payment streams discounted using estimated market yields for the equity tranche of the respective CLO vehicle. The Company also considers those investments in which the record date for an equity distribution payment falls on or before the last day of the period, and the likelihood that a prospective purchaser would require an adjustment to the transaction price representing substantially all of the pending distribution.
(6) Discount rate represents the rate at which future cash flows are discounted to calculate a present value, reflecting market assumptions for risk.
(7) Enterprise value is defined as the total value of a company, including debt and cash. For senior secured notes and equity investments, third -party valuation firms evaluate the financial and operational information of the portfolio companies that the Company provides to them, as well as independent market and industry information that they consider appropriate in forming an opinion as to the fair value of the Company’s securities. In those instances where the carrying value and/or internal credit rating of the investment does not require the use of a third -party valuation firm, a valuation is prepared by Oxford Square Management, which may include liquidation analysis or which may utilize a subsequent transaction to provide an indication of fair value.
(8) Market multiples represent an estimation of where market participants might value an enterprise based upon information available for comparable companies in the market.
(9) The fair value of those CLO equity positions which have been optionally redeemed are generally valued using a liquidation net asset value basis which represents the estimated expected residual value of the CLO as of the end of the period.
(10) Prices provided by independent pricing services are evaluated in conjunction with actual trades and payoffs and, in certain cases, the value represented by actual trades or payoffs may be more representative of fair value as determined by the Valuation Committee.
(11) Totals may not sum due to rounding.
Financial Instruments Disclosed, But Not Carried, At Fair Value
The following table presents the carrying value and fair value of the Company’s financial liabilities disclosed, but not carried, at fair value as of March 31, 2026, and the level of each financial liability within the fair value hierarchy:
($ in millions)
Carrying
Value (1)
Fair
Value (2)
Level 1
Level 2
Level 3
5.50% Unsecured Notes
$
79.6
$
76.5
$
—
$
76.5
$
—
7.75% Unsecured Notes
72.3
74.8
—
74.8
—
Total (3)
$
151.9
$
151.2
$
—
$
151.2
$
—
____________
(1) Carrying value is net of unamortized deferred debt issuance costs. Unamortized deferred debt issuance costs associated with the 5.50 % Unsecured Notes totaled approximately $ 0.9 million as of March 31, 2026. Unamortized deferred debt issuance costs associated with the 7.75 % Unsecured Notes totaled approximately $ 2.5 million as of March 31, 2026.
(2) For the 5.50 % Unsecured Notes and the 7.75 % Unsecured Notes, fair value is based upon the closing price on the last day of the period. The 5.50 % Unsecured Notes and the 7.75 % Unsecured Notes are listed on the NASDAQ Global Select Market (trading symbol “OXSQG”, and “OXSQH”, respectively).
(3) Totals may not sum due to rounding.
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 4. FAIR VALUE (cont.)
The following table presents the carrying value and fair value of the Company’s financial liabilities disclosed, but not carried, at fair value as of December 31, 2025 and the level of each financial liability within the fair value hierarchy:
($ in millions)
Carrying
Value (1)
Fair
Value (2)
Level 1
Level 2
Level 3
5.50% Unsecured Notes
$
79.5
$
77.8
$
—
$
77.8
$
—
7.75% Unsecured Notes
72.1
76.2
—
76.2
—
Total
$
151.6
$
154.0
$
—
$
154.0
$
—
____________
(1) Carrying value is net of unamortized deferred debt issuance costs. Unamortized deferred debt issuance costs associated with the 5.50 % Unsecured Notes totaled approximately $ 1.0 million as of December 31, 2025. Unamortized deferred debt issuance costs associated with the 7.75 % Unsecured Notes totaled approximately $ 2.6 million as of December 31, 2025.
(2) For the 5.50 % Unsecured Notes and 7.75 % Unsecured Notes, fair value is 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).
A reconciliation of the fair value of investments for the three months ended March 31, 2026, utilizing significant unobservable inputs, is as follows:
($ in millions)
Senior
Secured
Notes
CLO
Equity
Equity and
Other
Investments
Total (2)
Balance at December 31, 2025
$
147.3
$
95.1
$
9.4
$
251.7
Realized losses included in earnings
( 12.6
)
( 18.2
)
—
( 30.7
)
Net unrealized appreciation/(depreciation) included in earnings
2.1
( 0.9
)
( 0.1
)
1.1
Accretion of discounts
1.0
—
—
1.0
Purchases
12.9
—
3.0
15.8
Repayments and sales
( 0.4
)
—
—
( 0.4
)
Transfers between asset classes
( 0.1
)
—
0.1
—
Reductions to CLO equity cost value (1)
—
( 3.9
)
—
( 3.9
)
PIK income
0.7
—
0.1
0.8
Transfers in and/or (out) of level 3
—
—
—
—
Balance at March 31, 2026 (2)
$
150.8
$
72.2
$
12.4
$
235.4
Net change in unrealized depreciation on level 3 investments still held as of March 31, 2026
$
( 10.1
)
$
( 19.1
)
$
( 0.1
)
$
( 29.3
)
____________
(1) Reduction to CLO equity cost value of approximately $ 3.9 million represented the distributions received, or entitled to be received, on the Company’s investments held in CLO equity subordinated and income notes of approximately $ 7.1 million, plus the amortization of cost of the Company’s CLO fee notes of approximately $ 38,000 , less the effective yield interest income recognized on the Company’s CLO equity subordinated and income notes of approximately $ 3.2 million.
(2) Totals may not sum due to rounding.
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 4. FAIR VALUE (cont.)
A reconciliation of the fair value of investments for the year ended December 31, 2025, utilizing significant unobservable inputs, is as follows:
($ in millions)
Senior
Secured
Notes
CLO
Equity
Equity
and Other
Investments
Total (2)
Balance at December 31, 2024
$
150.7
$
104.6
$
5.6
$
260.9
Net realized (losses)/gains included in earnings
( 14.4
)
( 2.8
)
0.4
( 16.8
)
Net unrealized appreciation/(depreciation) included in earnings
5.0
( 29.1
)
( 0.2
)
( 24.3
)
Accretion of discount
2.9
—
—
2.9
Purchases
57.9
30.2
4.0
92.1
Repayments and Sales
( 57.9
)
—
( 0.5
)
( 58.4
)
Reductions to CLO equity cost value (1)
—
( 7.7
)
—
( 7.7
)
PIK income
3.2
—
—
3.2
Transfers in and/or (out) of level 3
—
—
—
—
Balance at December 31, 2025 (2)
$
147.3
$
95.1
$
9.4
$
251.7
Net change in unrealized depreciation on level 3 investments still held as of December 31, 2025
$
( 11.3
)
$
( 32.0
)
$
( 0.1
)
$
( 43.4
)
____________
(1) Reduction to CLO equity cost value of approximately $ 7.7 million represented the distributions received, or entitled to be received, on the Company’s investments held in CLO equity subordinated and income notes of approximately $ 24.1 million, plus the amortization of cost of the Company’s CLO fee notes of approximately $ 57,000 , less the effective yield interest income recognized on the Company’s CLO equity subordinated and income notes of approximately $ 16.5 million.
(2) Totals may not sum due to rounding.
The following table shows the fair value of the Company’s portfolio of investments by asset class as of March 31, 2026 and December 31, 2025:
($ in millions)
March 31, 2026
December 31, 2025
Investments at
Fair Value
Percentage of
Total Portfolio
Investments at
Fair Value
Percentage of
Total Portfolio
Senior Secured Notes
$
150.8
64.0
%
$
147.3
58.5
%
CLO Equity
72.2
30.7
%
95.1
37.8
%
Equity and Other Investments
12.4
5.3
%
9.4
3.7
%
Total (1)
$
235.4
100.0
%
$
251.7
100.0
%
____________
(1) Totals may not sum due to rounding.
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 5. CASH AND CASH EQUIVALENTS
At March 31, 2026 and December 31, 2025, respectively, cash and cash equivalents were as follows:
March 31,
2026
December 31,
2025
Cash
$
287,628
$
698,579
Cash Equivalents
40,637,084
51,236,068
Total Cash and Cash Equivalents
$
40,924,712
$
51,934,647
For further details regarding the composition of cash and cash equivalents refer to “Note 3. Summary of Significant Accounting Policies.”
NOTE 6. BORROWINGS
In accordance with the 1940 Act, with certain limited exceptions, the Company is only allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 150 %, immediately after such borrowing. As of March 31, 2026 and December 31, 2025, the Company’s asset coverage for borrowed amounts was 177 % and 191 %, respectively.
The following are the Company’s outstanding principal amounts, carrying values and fair values of the Company’s borrowings as of March 31, 2026 and December 31, 2025. The fair value of the 5.50 % Unsecured Notes is based upon the closing price on the last day of the period. The 5.50 % Unsecured Notes are listed on the NASDAQ Global Select Market (trading symbol “OXSQG”). The fair value of the 7.75 % Unsecured Notes is based upon the closing price on the last day of the period. The 7.75 % Unsecured Notes are listed on the NASDAQ Global Select Market (trading symbol “OXSQH”).
($ in millions)
As of
March 31, 2026
December 31, 2025
Principal
Amount
Carrying
Value (1)
Fair
Value
Principal
Amount
Carrying
Value (1)
Fair
Value
5.50% Unsecured Notes
$
80.5
$
79.6
$
76.5
$
80.5
$
79.5
$
77.8
7.75% Unsecured Notes
74.8
72.3
74.8
74.8
72.1
76.2
Total (2)
$
155.3
$
151.9
$
151.2
$
155.3
$
151.6
$
154.0
____________
(1) The Carrying Value represents the aggregate principal amount outstanding less the unamortized deferred issuance costs. As of March 31, 2026, the total unamortized deferred issuance costs for the 5.50 % Unsecured Notes and 7.75 % Unsecured Notes were approximately $ 0.9 million and $ 2.5 million, respectively. As of December 31, 2025, the total unamortized deferred issuance costs for the 5.50 % Unsecured Notes and 7.75 % Unsecured Notes were approximately $ 1.0 million, and $ 2.6 million, respectively.
(2) Totals may not sum due to rounding .
For the three months ended March 31, 2026, the weighted average principal amount of debt outstanding and weighted average annualized effective interest rate was approximately $ 155.3 million and 7.29 %, respectively. For the year ended December 31, 2025, the weighted average principal amount of debt outstanding and weighted average annualized effective interest rate was approximately $ 138.2 million and 6.69 %, respectively.
The weighted average stated interest rate and weighted average maturity on the Company’s borrowings as of March 31, 2026 were 6.58 % and 3.3 years, respectively, and as of December 31, 2025 were 6.58% and 3.5 years, respectively.
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 6. BORROWINGS (cont.)
The tables below summarize the components of interest expense for the three months ended March 31, 2026 and March 31, 2025, respectively:
($ in thousands)
Three Months Ended March 31, 2026
Stated Interest
Expense
Amortization of
Deferred Debt
Issuance Costs
Total
5.50% Unsecured Notes
$
1,106.9
$
95.1
$
1,202.0
7.75% Unsecured Notes
1,448.3
141.0
1,589.3
Total
$
2,555.2
$
236.1
$
2,791.3
($ in thousands)
Three Months Ended March 31, 2025
Stated Interest
Expense
Amortization of
Deferred Debt
Issuance Costs
Total (1)
6.25% Unsecured Notes
$
699.9
$
57.5
$
757.4
5.50% Unsecured Notes
1,106.9
95.1
1,202.0
Total (1)
$
1,806.8
$
152.6
$
1,959.3
____________
(1) Totals may not sum due to rounding.
Notes Payable — 5.50% Unsecured Notes Due 2028 (the “5.50% Unsecured Notes”)
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. The 5.50 % Unsecured Notes bear interest at a rate of 5.50 % per year payable quarterly on January 31, April 30, July 31, and October 31, of each year. The 5.50 % Unsecured Notes are listed on the NASDAQ Global Select Market under the trading symbol “OXSQG.”
The aggregate accrued interest payable on the 5.50 % Unsecured Notes as of March 31, 2026 was approximately $ 0.7 million. As of March 31, 2026 and December 31, 2025 the Company had unamortized deferred debt issuance costs of approximately $ 0.9 million and $ 1.0 million, respectively, relating to the 5.50 % Unsecured Notes. The deferred debt issuance costs are being amortized over the term of the 5.50 % Unsecured Notes and are included in interest expense in the statements of operations. The cash paid and the effective annualized interest rate for the periods ended March 31, 2026 and March 31, 2025 were approximately $ 1.1 million and 6.06 %, respectively.
Notes Payable — 7.75% Unsecured Notes Due 2030 (the “7.75% Unsecured Notes”)
On August 7, 2025, the Company completed an underwritten public offering of approximately $ 74.8 million in aggregate principal amount of 7.75 % unsecured notes due 2030. 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 . 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. The 7.75 % Unsecured Notes are listed on the NASDAQ Global Select Market under the trading symbol “OXSQH.”
The aggregate accrued interest payable on the 7.75 % Unsecured Notes as of March 31, 2026 was approximately $ 1.0 million. As of March 31, 2026 and December 31, 2025 the Company had unamortized deferred debt issuance costs of approximately $ 2.5 million and $ 2.6 million, respectively, relating to the 7.75 % Unsecured
33
Table of Contents
OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 6. BORROWINGS (cont.)
Notes. The deferred debt issuance costs are being amortized over the term of the 7.75 % Unsecured Notes and are included in interest expense in the statements of operations. The cash paid and the effective annualized interest rate for the period ended March 31, 2026 were approximately $ 1.4 million and 8.62 %, respectively.
Notes Payable — 6.25% Unsecured Notes Due 2026 (the “6.25% Unsecured Notes”)
On April 3, 2019, the Company completed an underwritten public offering of approximately $ 44.8 million in aggregate principal amount of 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 the Company’s option on or after April 30, 2022. 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. 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. In connection with the September 19, 2025 redemption, the 6.25 % Unsecured Notes were delisted from the NASDAQ Global Select Market.
The aggregate accrued interest payable on the 6.25 % Unsecured Notes as of March 31, 2025 was approximately $ 467,000 . As of March 31, 2025, the Company had unamortized deferred debt issuance costs of approximately $ 252,000 relating to the 6.25 % Unsecured Notes. The deferred debt issuance costs were being amortized over the term of the 6.25 % Unsecured Notes and are included in interest expense in the statements of operations. The cash paid and the effective annualized interest rate for the three months ended March 31, 2025 were approximately $ 700,000 and 6.86 %, respectively.
NOTE 7. RELATED PARTY TRANSACTIONS
The Company pays Oxford Square Management a fee for its services under the Investment Advisory Agreement consisting of — a base investment advisory fee (the “Base Fee”) based on its gross assets, as described below, and two types of incentive fees. The cost of both the Base Fee and any incentive fees earned by Oxford Square Management are ultimately borne by the Company’s common stockholders.
As described in greater detail under Item 1. Business — Investment Advisory Agreement — Advisory Fee in its Annual Report on Form 10 -K for the year ended December 31, 2025, the Company first calculates the Base Fee and any incentive fee under the terms of the Investment Advisory Agreement, then calculates the Base Fee and any incentive fee under the terms of the fee waiver letter unilaterally adopted by Oxford Square Management, effective April 1, 2016 (the “2016 Fee Waiver”), and, finally, adopts the lower of two combined results as the total fees payable to Oxford Square Management.
Base Fee
The Base Fee is payable quarterly in arrears, calculated based on a percentage of the average value of the Company’s gross assets at the end of the two most recently completed calendar quarters, and appropriately prorated for any partial quarter. Accordingly, the Base Fee will be payable regardless of whether the value of the Company’s gross assets has decreased during the quarter.
Under the terms of the Investment Advisory Agreement, the Base Fee is calculated at an annual rate of 2.00 %, and appropriately adjusted for any equity or debt capital raises, repurchases, or redemptions during the current calendar quarter.
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Table of Contents
OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 7. RELATED PARTY TRANSACTIONS (cont.)
Under the terms of the 2016 Fee Waiver, for the purpose of calculating the amount of total advisory fees (if any) to be waived during a particular calendar quarter, the Base Fee (as a portion of the total calculation) is calculated at an annual rate of 1.50 %, and adjusted pro rata for any share issuances, debt issuances, repurchases or redemptions during the current calendar quarter; provided, however, that no Base Fee is payable on the cash proceeds received by the Company in connection with any share or debt issuances until such proceeds have been invested in accordance with the Company’s investment objectives.
The following table represents the portion of the total advisory fee ascribed to the Base Fee (pursuant to the 2016 Fee Waiver calculation) for the three months ended March 31, 2026 and 2025, respectively:
($ in millions)
Three Months
Ended
March 31,
2026
Three Months
Ended
March 31,
2025
Base Fee
$
1.0
$
1.1
The Base Fee payable to Oxford Square Management as of March 31, 2026 and December 31, 2025 was approximately $ 1.0 million and $ 1.0 million, respectively.
Incentive Fee
The incentive fees are commonly referred to as the “Income Incentive Fee” and the “Capital Gains Incentive Fee,” with the first fee payable quarterly in arrears and the second fee payable in arrears at the end of each calendar year.
Net Investment Income Incentive Fee
The first fee (the “Net Investment Income Incentive Fee”), is determined by reference to the Company’s “Pre -Incentive Fee Net Investment Income” (as defined below). Given that this incentive fee is payable without regard to any gain, loss or unrealized depreciation that may occur during the quarter, Oxford Square Management’s incentive fee may be payable notwithstanding a decline in net asset value that quarter.
Under the terms of the Investment Advisory Agreement, the Net Investment Income Incentive Fee is calculated based on the Company’s “Pre -Incentive Fee Net Investment Income” for the immediately preceding calendar quarter.
• For this purpose, “Pre -Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter minus the Company’s operating expenses for the quarter (including the Base Fee, expenses payable under the administration agreement, and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre -Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with PIK interest, and zero coupon securities), accrued income that we have not yet received in cash. Pre -Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.
• Pre -Incentive Fee Net Investment Income, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding calendar quarter, is compared to one -fourth of an annual “hurdle rate.” The annual hurdle rate is determined as of the immediately preceding December 31 st by adding 5.0 % to the interest rate then payable on the most recently issued five -year
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 7. RELATED PARTY TRANSACTIONS (cont.)
U.S. Treasury Notes, up to a maximum annual hurdle rate of 10.0 %. The annual hurdle rates for the 2026 and 2025 calendar years, calculated as of the immediately preceding December 31 st , were 8.73 % and 9.38 % respectively, under the terms of the Investment Advisory Agreement. The Company’s net investment income (to the extent not distributed to stockholders) used to calculate the Net Investment Income Incentive Fee was also included in the amount of gross assets used to calculate the 2 % Base Fee.
a. The operation of the incentive fee with respect to the Company’s Pre -Incentive Fee Net Investment Income for each quarter is as follows:
i. no incentive fee is payable to Oxford Square Management in any calendar quarter in which the Pre -Incentive Fee Net Investment Income does not exceed one fourth of the annual hurdle rate ( 8.73 % for the 2026 calendar year).
ii. 20 % of the amount of the Pre -Incentive Fee Net Investment Income, if any, that exceeds one -fourth of the annual hurdle rate ( 8.73 % for the 2026 calendar year) in any calendar quarter is payable to Oxford Square Management (i.e., once the hurdle rate is reached, 20 % of all Pre -Incentive Fee Net Investment Income thereafter will be allocated to Oxford Square Management).
Under the terms of the 2016 Fee Waiver, for the purpose of calculating the amount of total advisory fees (if any) to be waived during a particular calendar quarter, the Income Incentive Fee (as a portion of the total calculation) is calculated based on the amount by which (x) the “Pre -Incentive Fee Net Investment Income” (as defined above) for the calendar quarter exceeds (y) the “Preferred Return Amount” (as defined below) for the calendar quarter.
a. 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. The Net Investment Income Incentive Fee is then calculated as follows:
(a) 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”;
(b) 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
(c) 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 20 % of the amount of the “Pre -Incentive Fee Net Investment Income” for such quarter.
c. There is no accumulation of amounts from quarter to quarter for the “Preferred Return Amount,” and accordingly there is no claw back of amounts previously paid to Oxford Square Management if the “Pre -Incentive Fee Net Investment Income” for subsequent quarters is below the quarterly “Preferred Return Amount,” and there is no delay of payment of incentive fees to Oxford Square Management if the “Pre -Incentive Fee Net Investment Income” for prior quarters is below the quarterly “Preferred Return Amount” for the quarter for which the calculation is being made.
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 7. RELATED PARTY TRANSACTIONS (cont.)
d. The calculation of the Company’s Net Investment Income Incentive Fee is subject to a total return requirement that provides that a Net Investment Income Incentive Fee will not be payable to Oxford Square Management except to the extent 20 % of the “cumulative net increase in net assets resulting from operations” (which is the amount, if positive, of the sum of the “Pre -Incentive Fee Net Investment Income,” realized gains and losses and unrealized appreciation and depreciation) during the calendar quarter for which such fees are being calculated and the eleven (11) preceding quarters exceeds the cumulative Net Investment Income Incentive Fees accrued and/or paid for such eleven (11) preceding quarters.
In the event that the advisory fee calculations under the 2016 Fee Waiver produce a higher combined Base Fee and Net Investment Income Incentive Fee for any quarterly period, the combined fees are set to the original (lower) level, calculated pursuant to the Investment Advisory Agreement. In the event that advisory fee calculations under the 2016 Fee Wavier produce a 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 either case, the lower level of combined fees is used for that quarter, and, accordingly, the advisory fee payable to Oxford Square Management can only be reduced, and never increased, as a result of the 2016 Fee Waiver.
The following table represents the portion of the total advisory fee ascribed to Net Investment Income Incentive Fees (pursuant to the 2016 Fee Waiver calculation) for the three months ended March 31, 2026 and 2025, respectively.
($ in millions)
Three Months
Ended
March 31,
2026
Three Months
Ended
March 31,
2025
Net Investment Income Incentive Fee
$
—
$
—
There was no Net Investment Income Incentive Fee payable to Oxford Square Management as of March 31, 2026 and December 31, 2025.
Capital Gains Incentive Fee
The Capital Gains Incentive Fee, which is calculated identically under the Investment Advisory Agreement and under the 2016 Fee Waiver, is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), and equals 20 % of the Company’s “Incentive Fee Capital Gains,” which consists of its realized capital gains for each calendar year, computed net of all realized capital losses and unrealized capital depreciation for that calendar year. For accounting purposes only, in order to reflect the theoretical Capital Gains Incentive Fee that would be payable for a given period as if all unrealized gains were realized, the Company will accrue a Capital Gains Incentive Fee based upon net realized gains and unrealized depreciation for that calendar year (in accordance with the terms of the Investment Advisory Agreement), plus unrealized appreciation on investments held at the end of the period. It should be noted that a fee so calculated and accrued would not necessarily be payable under the Investment Advisory Agreement, and may never be paid based upon the computation of Capital Gains Incentive Fees in subsequent periods. Amounts paid under the Investment Advisory Agreement will be consistent with the formula reflected in the Investment Advisory Agreement.
The amount of Capital Gains Incentive Fee expense related to the hypothetical liquidation of the portfolio (and assuming no other changes in realized or unrealized gains and losses) would only become payable to Oxford Square Management in the event of a complete liquidation of the Company’s portfolio as of period end and the termination of the Investment Advisory Agreement on such date. Also, it should be noted that the Capital Gains Incentive Fee expense fluctuates with the Company’s overall investment results.
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 7. RELATED PARTY TRANSACTIONS (cont.)
There were no Capital Gains Incentive Fees based on hypothetical liquidation for the three months ended March 31, 2026 and 2025. There were no accrued Capital Gains Incentive Fees payable to Oxford Square Management as of March 31, 2026 and December 31, 2025.
Administration Agreement
The Company has also entered into the Administration Agreement with Oxford Funds under which Oxford Funds provides administrative services for the Company. The Company pays Oxford Funds an allocable portion of overhead and other expenses incurred by Oxford Funds on its behalf under the Administration Agreement, including a portion of the rent and the compensation of the Chief Financial Officer, accounting staff and other administrative support personnel, which creates potential conflicts of interest that the Board must monitor. The Company also reimburses Oxford Funds for the costs associated with the functions performed by the Company’s Chief Compliance Officer that Oxford Funds pays on the Company’s behalf pursuant to the terms of an agreement between the Company and ACA Group, LLC.
Oxford Square Management is controlled by Oxford Funds, its managing member. Charles M. Royce, a member of the Board, holds a minority, non -controlling interest in Oxford Square Management. Oxford Funds manages the business and internal affairs of Oxford Square Management. Jonathan H. Cohen, the Company’s Chief Executive Officer, as well as a Director, is the Chief Executive Officer of Oxford Square Management and managing member of Oxford Funds. Saul B. Rosenthal, the Company’s President and Chief Operating Officer, is also the President and Chief Operating Officer of Oxford Square Management and a member of Oxford Funds. Messrs. Cohen and Rosenthal together control the equity interests in Oxford Funds.
For the three months ended March 31, 2026 and 2025, the Company incurred approximately $ 247,000 and $ 240,000 , respectively, in compensation expenses for the services of employees allocated to the administrative activities of the Company, pursuant to the Administration Agreement with Oxford Funds. In addition, the Company incurred approximately $ 15,000 and $ 14,000 for facility costs allocated under the Administration Agreement for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, approximately $ 77,000 of accrued compensation expenses was payable under the Administration Agreement. As of December 31, 2025, approximately $ 26,000 of accrued compensation expenses was payable under the Administration Agreement.
Co-Investment Exemptive Relief
On January 6, 2026, the Company 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”). The Co -Investment Order, which supersedes the co -investment order issued to the Company 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 the Company and that Oxford Square Management considers the interests of the Company 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. 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 the Company and each other participating affiliated entity. The requirements of the Co -Investment Order (including any requirements for board approval thereunder), as well as other regulatory requirements associated with the Company and other affiliated 1940 Act -regulated funds that rely on the Co -Investment Order, potentially will impact the investment allocations among participating entities
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 7. RELATED PARTY TRANSACTIONS (cont.)
(including, for the avoidance of doubt, the Company) or otherwise impact allocation results. 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 the Company and thereby affect (and potentially decrease) the allocation made to us or otherwise impact the process for allocations in transactions in which the Company participates.
NOTE 8. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted net increase/(decrease) in net assets resulting from net investment income and operations per share for the three months ended March 31, 2026 and 2025, respectively:
Three Months
Ended
March 31,
2026
Three Months
Ended
March 31,
2025
Net investment income
$
4,149,791
$
6,103,874
Weighted average common shares outstanding
88,278,112
69,984,752
Net increase in net assets resulting from net investment income per common share
$
0.05
$
0.09
Net decrease in net assets resulting from operations
$
( 25,524,821
)
$
( 8,121,517
)
Net decrease in net assets resulting from operations per common share
$
( 0.29
)
$
( 0.12
)
NOTE 9. DISTRIBUTIONS
The Company intends to continue to operate so as to qualify to be taxed as a RIC under the Code and, as such, the Company would not be subject to federal income tax on the portion of its taxable income and gains distributed to stockholders. To qualify to be taxed as a RIC, the Company is required, among other requirements, to distribute at least 90 % of its annual investment company taxable income, as defined by the Code. The amount to be paid out as a distribution each quarter is determined by the Board and is based upon the annual taxable income estimated by the management of the Company. Income calculated in accordance with U.S. federal income tax regulations differs substantially from GAAP income. To the extent that the Company’s cumulative undistributed taxable earnings fall below the amount of distributions declared, however, a portion of the total amount of the Company’s distributions for the fiscal year may be deemed a return of capital for tax purposes to the Company’s stockholders.
The Company intends to comply with the applicable provisions of the Code pertaining to RICs to make distributions of taxable income sufficient to relieve it of substantially all federal income taxes. The Company, at its discretion, may carry forward taxable income in excess of calendar year distributions and pay a 4 % excise tax on such income. The Company will accrue excise tax on estimated excess taxable income, if any, as required. The Company has accrued approximately $ 524,000 of estimated excise tax payable for estimated excise tax on undistributed taxable income as of March 31, 2026. This amount is included in “Accrued Expenses” on the Statements of Assets and Liabilities.
The Company has adopted an “opt out” distribution reinvestment plan for its common stockholders. As a result, if the Company makes a cash distribution, then stockholders’ cash distributions will be automatically reinvested in additional shares of its common stock, unless they specifically “opt out” of the distribution reinvestment plan so as to receive cash distributions. During the three months ended March 31, 2026 and 2025, the Company issued 205,105 and 87,090 shares, respectively, of common stock for approximately $ 349,000 and $ 223,000 , respectively, to stockholders in connection with the distribution reinvestment plan. For the three months ended March 31, 2026, the Company paid distributions of approximately $ 9.3 million, or $ 0.105 per share. For the year ended December 31, 2025, the Company paid distributions of approximately $ 32.1 million, or $ 0.42 per share.
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 9. DISTRIBUTIONS (cont.)
Under the Regulated Investment Company Modernization Act of 2010 (the “Act”), the Company is permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre -enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre -enactment capital loss carryforwards may be more likely to expire unused. Additionally, post -enactment capital losses that are carried forward will retain their character as either short -term or long -term losses rather than being considered all short -term as under previous law.
The tax character of distributions for the three months ended March 31, 2026 and 2025, represented, on an estimated basis, $ 0.105 per share from ordinary income. For the three months ended March 31, 2026 and 2025, the amounts and sources of distributions reported are only estimates (based on an average of the reported tax character historically) and are not being provided for U.S. federal income tax reporting purposes. The timing and character of distributions for U.S. federal income tax purposes (which are determined in accordance with the U.S. federal tax rules which may differ from GAAP) may be materially different than the historical information the Company used in providing the estimates herein. The ultimate tax character of distributions during 2026 and 2025 is unknown until the Company’s tax returns are filed, and the amounts represented may be materially different from the amounts disclosed in the final Form 1099 -DIV notices. 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.
NOTE 10. NET ASSET VALUE PER SHARE
The Company’s net asset value per share as of March 31, 2026, and December 31, 2025, was $ 1.32 and $ 1.69 , respectively. In determining the Company’s net asset value per share, the Board determined in good faith the fair value of the Company’s portfolio investments for which reliable market quotations are not readily available.
NOTE 11. SHARE ISSUANCE AND REPURCHASE PROGRAMS
On August 22, 2023, the Company entered into Amendment No. 1 to the Equity Distribution Agreement dated August 1, 2019 with Ladenburg Thalmann & Co. through which the Company may offer for sale, from time to time, up to $ 150.0 million of the Company’s common stock through an At -the-Market (“ATM”) offering. On August 16, 2024, the Company 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. The Company sold a total of 7,183,267 shares of common stock pursuant to the ATM offering during the three months ended March 31, 2026. The total amount of capital raised net of underwriting fees and offering costs was approximately $ 12.3 million during the three months ended March 31, 2026. The Company sold a total of 1,341,138 shares of common stock pursuant to the ATM offering during the three months ended March 31, 2025. The total amount of capital raised net of underwriting fees and offering costs was approximately $ 3.5 million during the three months ended March 31, 2025.
From time to time, the Board may authorize a share repurchase program under which shares are purchased in open market transactions. Since the Company is incorporated in Maryland, MGCL requires share repurchases to be accounted for as a share retirement. The cost of repurchased shares is charged against capital on the settlement date.
On October 30, 2025, the Board of Directors authorized a 12 -month Share Repurchase Program. Under the Share Repurchase Program, the Company may repurchase, during the 12 -month period commencing on October 30, 2025, up to $ 25.0 million in the aggregate of the Company’s outstanding common stock in the open market. The timing, manner, price and amount of any share repurchases will be determined by the Company, in its discretion, based upon the evaluation of economic and market conditions, the Company’s stock price, applicable legal, contractual and regulatory requirements and other factors. The Share Repurchase Program is expected to be in effect
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 11. SHARE ISSUANCE AND REPURCHASE PROGRAMS (cont.)
until October 30, 2026, unless extended or until the aggregate repurchase amount has been expended. The Share Repurchase Program does not require the Company to repurchase any specific number of shares, and the Company cannot assure stockholders that any shares will be repurchased under the Share Repurchase Program. The Share Repurchase Program may be suspended, extended, modified or discontinued at any time. During the three months ended March 31, 2026, no shares were repurchased under the Share Repurchase Program.
During the three months ended March 31, 2025, the Company was not authorized to repurchase any shares of outstanding common stock.
NOTE 12. INVESTMENT INCOME
The following table sets forth the components of investment income for the three months ended March 31, 2026 and 2025, respectively:
Three Months
Ended
March 31,
2026
Three Months
Ended
March 31,
2025
Interest income – debt investments
Stated interest income
$
3,317,518
$
3,960,281
Original issue discount and market discount income
994,796
870,249
Discount income/(amortization of premium) derived from unscheduled remittances at par
6,436
( 4,126
)
Total interest income – debt investments (1)
$
4,318,750
$
4,826,404
Interest income – debt investments – PIK (1)
$
786,922
$
708,351
Income from securitization vehicles and investments
$
3,224,198
$
3,956,053
Commitment, amendment and other fee income
Fee letters
$
203,583
$
145,678
Money market fund income and all other fees (2)
409,225
524,564
Total commitment, amendment and other fee income
$
612,808
$
670,242
Total investment income
$
8,942,678
$
10,161,050
____________
(1) Change in prior period was made to conform to the current period presentation.
(2) For the three months ended March 31, 2025, the Company earned approximately $ 131,000 of PIK fees.
The 1940 Act requires that a BDC offer significant managerial assistance to its portfolio companies. The Company may receive fee income for managerial assistance it renders to portfolio companies in connection with its investments. For the three months ended March 31, 2026 and 2025, the Company received no fee income for managerial assistance.
NOTE 13. COMMITMENTS AND CONTINGENCIES
In the normal course of business, the Company enters into a variety of undertakings containing a variety of warranties and indemnifications that may expose the Company to some risk of loss. The risk of future loss arising from such undertakings, while not quantifiable, is expected to be remote. As of March 31, 2026, the Company did not have any commitments to purchase additional debt investments.
The Company is not currently subject to any material legal proceedings. From time to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the Company’s rights under contracts with its portfolio companies. While the outcome of these legal proceedings, if any, cannot be predicted with certainty, the Company does not expect that these proceedings will have a material effect upon its results of operations and financial condition.
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 14. FINANCIAL HIGHLIGHTS
Financial highlights for the three months ended March 31, 2026 and 2025, respectively, are as follows:
Three Months
Ended
March 31,
2026
Three Months
Ended
March 31,
2025
Per Share Data
Net asset value at beginning of period
$
1.69
$
2.30
Net investment income (1)
0.05
0.09
Net realized and unrealized losses (2)
( 0.31
)
( 0.20
)
Net decrease in net asset value from operations
( 0.26
)
( 0.11
)
Distributions per share from net investment income
( 0.11
)
( 0.11
)
Tax return of capital distributions (3)
—
—
Total distributions
( 0.11
)
( 0.11
)
Effect of shares issued
0.00
0.01
Net asset value at end of period
$
1.32
$
2.09
Per share market value at beginning of period
$
1.76
$
2.44
Per share market value at end of period
$
1.77
$
2.61
Total return based on market value (4)
6.87
%
11.39
%
Total return based on net asset value (5)
( 15.68
)%
( 4.57
)%
Shares outstanding at end of period
93,449,336
71,187,166
Ratios/Supplemental Data
Net assets at end of period (000’s)
$
123,265
$
148,882
Average net assets (000’s)
$
131,833
$
153,493
Ratio of expenses to average net assets (6)
14.54
%
10.57
%
Ratio of expenses, excluding interest expense to average net assets (6)
6.07
%
5.47
%
Ratio of net investment income to average net assets (6)
12.59
%
15.91
%
Portfolio turnover rate (7)
0.16
%
6.26
%
____________
(1) Represents per share net investment income for the period, based upon weighted average shares outstanding.
(2) Net realized and unrealized losses include rounding adjustments to reconcile change in net asset value per share.
(3) Management monitors available taxable earnings, including net investment income and realized capital gains, to determine if a tax return of capital may occur for the year. To the extent the Company’s taxable earnings fall below the total amount of the Company’s distributions for that fiscal year, a portion of those distributions may be deemed a tax return of capital to the Company’s stockholders. The ultimate tax character of the Company’s earnings cannot be determined until tax returns are prepared after the end of the fiscal year. The amounts and sources of distributions reported are only estimates (based on an average of the reported tax character historically) and are not being provided for U.S. tax reporting purposes.
(4) Total return based on market value equals the increase or decrease of ending market value over beginning market value, plus distributions, divided by the beginning market value, assuming distribution reinvestment prices obtained under the Company’s distribution reinvestment plan. Total return is not annualized.
(5) Total return based on net asset value equals the increase or decrease of ending net asset value over beginning net asset value, plus distributions, divided by the beginning net asset value. Total return is not annualized.
(6) Annualized.
(7) Portfolio turnover rate is calculated using the lesser of the year -to-date investment sales and debt repayments or year -to-date investment purchases over the average of the total investments at fair value.
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OXFORD SQUARE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 15. SEGMENT REPORTING
The Company operates as a single operating and reporting segment and its primary business objective is to maximize its investment portfolio’s total return. The chief operating decision maker (“CODM”) is a combination of the Company’s chief executive officer and president. The CODM evaluates performance through the Company’s net asset value, net investment income and net increase/decrease in net assets resulting from operations. These performance measures also aid the CODM in providing information to the Board of Directors for the process of determining the amount of distributions to be distributed to the Company’s stockholders. The Company’s significant segment expenses are listed on the accompanying statements of operations.
NOTE 16. SUBSEQUENT EVENTS
The Board declared the following distributions payable to stockholders as shown below:
Date Declared
Record Date
Payable Date
Per Share Distribution
Amount Declared
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
April 27, 2026
July 17, 2026
July 31, 2026
$ 0.035
April 27, 2026
August 17, 2026
August 31, 2026
$ 0.035
April 27, 2026
September 16, 2026
September 30, 2026
$ 0.035
The Company’s management evaluated subsequent events through the date of issuance of these financial statements and noted no other events that necessitate adjustments to or disclosure in the financial statements.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.