Oxford Square Capital Corp

Previous wording

We generally expect to invest between $5 million and $50 million in each of our portfolio companies, although this investment size may vary proportionately as the size of our capital base changes and market conditions warrant. We expect that our investment portfolio will be diversified among a large number of investments with few investments, if any, exceeding 5.0% of the total portfolio. As of March 31, 2024, our debt

Current wording

We generally expect to invest between $5 million and $50 million in each of our portfolio companies, although this investment size may vary proportionately as the size of our capital base changes and market conditions warrant. We expect that our investment portfolio will be diversified among a large number of investments with

Previous wording

investments had stated interest rates of between 9.19% and 15.33% and maturity dates of between 0 and 82 months. In addition, our total portfolio had a weighted average annualized yield on debt investments of approximately 13.94% as of March 31, 2024.

Current wording

few investments, if any, exceeding 5.0% of the total portfolio. As of June 30, 2024, our debt investments had stated interest rates of between 9.21% and 15.44% and maturity dates of between 0 and 79 months. In addition, our portfolio had a weighted average annualized yield on debt investments of approximately 13.69% as of June 30, 2024.

Previous wording

During the three months ended March 31, 2024, U.S. loan market performance improved versus the prior quarter. U.S. loan prices, as defined by the Morningstar/LSTA US Leveraged Loan Index, increased from 96.23% of par as of December 31, 2023 to 96.69% of par as of March 31, 2024.

Current wording

During the three months ended June 30, 2024, U.S. loan market performance weakened versus the three months ended March 31, 2024. U.S. loan prices, as defined by the Morningstar/LSTA US Leveraged Loan Index, decreased from 96.69% of par as of March 31, 2024 to 96.54% of par as of June 30, 2024.

Previous wording

As of March 31, 2024, the Company’s Board of Directors approved the fair value of the Company’s investment portfolio of approximately $250.9 million in good faith in accordance with the Company’s valuation procedures.

Current wording

As of June 30, 2024, the Company’s Board of Directors approved the fair value of the Company’s investment portfolio of approximately $252.1 million in good faith in accordance with the Company’s valuation procedures.

Previous wording

The preparation of financial statements and related disclosures in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) disclosure of contingent assets and liabilities at the date of the financial statements, and (iii) revenues and expenses during the periods reported. Our critical accounting estimates, including those relating to the valuation of our investment portfolio, are described below. Actual results could materially differ from those estimates. The critical accounting estimates should be read in conjunction with our risk factors as disclosed in Item 1A. — Risk Factors contained in our Annual Report on Form 10-K for the year ended December 31, 2023. See “Note 3. Summary of Significant Accounting Policies” to our financial statements for the three months ended March 31, 2024 for more information on our critical accounting policies.

Current wording

The preparation of financial statements and related disclosures in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) disclosure of contingent assets and liabilities at the date of the financial statements, and (iii) revenues and expenses during the periods reported. Our critical accounting estimates, including those relating to the valuation of our investment portfolio, are described below. Actual results could materially differ from those estimates. The critical accounting estimates should be read in conjunction with our risk factors as disclosed in Item 1A. — Risk Factors contained in our Annual Report on Form 10-K for the year ended December 31, 2023. See “Note 3. Summary of Significant Accounting Policies” to our financial statements for the three and six months ended June 30, 2024 for more information on our critical accounting policies.

Previous wording

We fair value our investment portfolio in accordance with the provisions of ASC 820, Fair Value Measurement and Disclosure (“ASC 820”) and Rule 2a-5 under the 1940 Act. Estimates made in the preparation of our financial statements include the valuation of investments and the related amounts of unrealized appreciation and depreciation of investments recorded. We believe that there is no single definitive method for determining fair value. 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 we make.

Current wording

Our Board of Directors determines the fair value of our investment portfolio in accordance with the provisions of ASC 820, Fair Value Measurement and Disclosure (“ASC 820”) and Rule 2a-5 under the 1940 Act. Estimates made in the preparation of our financial statements include the valuation of investments and the related amounts of unrealized appreciation and depreciation of investments recorded. We believe that there is no single definitive method for determining fair value. 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 we make.

Previous wording

The total fair value of our investment portfolio was approximately $250.9 million and $266.9 million as of March 31, 2024, and December 31, 2023, respectively. The decrease in the value of investments during the three month period ended March 31, 2024, was due primarily to debt repayments of approximately $17.9 million, sales of investments of approximately $1.4 million, net realized losses of approximately $8.1 million, and net unrealized depreciation on our investment portfolio of approximately $0.2 million (which incorporates reductions to CLO equity cost value of $0.8 million), which were partially offset by investment acquisitions of approximately $12.1 million.

Current wording

The total fair value of our investment portfolio was approximately $252.1 million and $266.9 million as of June 30, 2024, and December 31, 2023, respectively. The decrease in the value of investments during the six month period ended June 30, 2024, was due primarily to net realized losses of approximately $38.5 million, debt repayments of approximately $32.1 million, and sales of securities of approximately $6.4 million, partially offset by purchases of approximately $40.9 million and net unrealized appreciation on our investment portfolio of approximately $27.8 million (which incorporates reductions to CLO equity cost value of approximately $7.3 million).

Previous wording

A reconciliation of the investment portfolio for the three months ended March 31, 2024 and the year ended December 31, 2023 follows:

Current wording

A reconciliation of the investment portfolio for the six months ended June 30, 2024 and the year ended December 31, 2023 follows:

Previous wording

(1) For the three months ended March 31, 2024, the reductions to CLO equity cost value of approximately $0.8 million represented the distributions received, or entitled to be received, on our investments held in CLO equity subordinated and income notes of approximately $4.8 million, plus the amortization of cost on our CLO fee notes of approximately $5,000, less the effective yield interest income recognized on our CLO equity subordinated and income notes of approximately $3.9 million. For the year ended December 31, 2023, the reductions to CLO equity cost value of approximately $15.3 million represented the distributions received, or entitled to be received, on our investments held in CLO equity subordinated and income notes of approximately $32.0 million, plus the amortization of cost on our CLO fee notes of approximately $123,000, less the effective yield interest income recognized on our CLO equity subordinated and income notes of approximately $16.8 million.

Current wording

(1) For the six months ended June 30, 2024, the reductions to CLO equity cost value of approximately $7.2 million represented the distributions received, or entitled to be received, on our investments held in CLO equity subordinated and income notes of approximately $15.0 million, plus the amortization of cost on our CLO fee notes of approximately $58,000, less the effective yield interest income recognized on our CLO equity subordinated and income notes of approximately $7.8 million. For the year ended December 31, 2023, the reductions to CLO equity cost value of approximately $15.3 million represented the distributions received, or entitled to be received, on our investments held in CLO equity subordinated and income notes of approximately $32.0 million, plus the amortization of cost on our CLO fee notes of approximately $123,000, less the effective yield interest income recognized on our CLO equity subordinated and income notes of approximately $16.8 million.

Previous wording

During the three months ended March 31, 2024 we purchased approximately $12.1 million in portfolio investments, which includes additional investments of approximately $5.3 million in existing portfolio companies and approximately $6.8 million in new portfolio companies. During the year ended December 31, 2023, we purchased approximately $11.7 million in portfolio investments, including additional investments of approximately $3.5 million in existing portfolio companies and approximately $8.2 million in new portfolio companies.

Current wording

During the six months ended June 30, 2024 we purchased approximately $40.9 million in portfolio investments, which includes additional investments of approximately $19.4 million in existing portfolio companies and approximately $21.5 million in new portfolio companies. During the year ended December 31, 2023, we purchased approximately $11.7 million in portfolio investments, including additional investments of approximately $3.5 million in existing portfolio companies and approximately $8.2 million in new portfolio companies.

Previous wording

For the three months ended March 31, 2024, we recognized proceeds from the sales of securities of approximately $1.4 million. For the year ended December 31, 2023, we recognized proceeds from the sales of securities of approximately $19.6 million. Also, during the three months ended March 31, 2024 and the year ended December 31, 2023, we had loan principal repayments of approximately $17.9 million and $15.8 million, respectively.

Current wording

For the six months ended June 30, 2024 and the year ended December 31, 2023, we recognized proceeds from the sales of securities of approximately $4.8 million and $19.6 million, respectively. Also, during the six months ended June 30, 2024 and the year ended December 31, 2023, we had loan principal repayments of approximately $33.7 million and $15.8 million, respectively.

Previous wording

As of March 31, 2024, we had investments in debt securities of, or loans to, 20 portfolio companies, with a fair value of approximately $161.7 million, CLO equity investments of approximately $84.2 million, and other equity investments of approximately $4.9 million.

Current wording

As of June 30, 2024, we had investments in debt securities of, or loans to, 18 portfolio companies, with a fair value of approximately $165.3 million, CLO equity investments of approximately $82.3 million, and other equity investments of approximately $4.5 million.

Previous wording

The following table indicates the quarterly portfolio investment activity for the past five quarters:

Current wording

The following table indicates the quarterly portfolio investment activity for the past six quarters:

Previous wording

Qualifying assets must represent at least 70.0% of the Company’s total assets at the time of acquisition of any additional non-qualifying assets. As of March 31, 2024 and December 31, 2023, we held qualifying assets that represented 69.4% and 70.6%, respectively, of the total assets. No additional non-qualifying assets were acquired during the periods when qualifying assets were less than 70.0% of the total assets.

Current wording

Qualifying assets must represent at least 70.0% of the Company’s total assets at the time of acquisition of any additional non-qualifying assets. As of June 30, 2024 and December 31, 2023, we held qualifying assets that represented 70.8% and 70.6%, respectively, of the total assets. No additional non-qualifying assets were acquired during the periods when qualifying assets were less than 70.0% of the total assets.

Previous wording

A portion of our investments are, and will continue to be, in the grades 3, 4 or 5 categories from time to time, and, as such, we are required to work with troubled portfolio companies to improve their business and protect our investment. The number and amount of investments included in grades 3, 4 or 5 may fluctuate from period to period.

Current wording

We expect that a portion of our investments will be in the grades 3, 4 or 5 categories from time to time, and, as such, we will be required to work with troubled portfolio companies to improve their business and protect our investment. The number and amount of investments included in grades 3, 4 or 5 may fluctuate from period to period.

Previous wording

Set forth below is a comparison of our results of operations for the three months ended March 31, 2024 to the three months ended March 31, 2023.

Current wording

Set forth below is a comparison of our results of operations for the three and six months ended June 30, 2024 to the three and six months ended June 30, 2023.

Previous wording

Investment income for the three months ended March 31, 2024 and March 31, 2023 was approximately $10.7 million and $12.9 million, respectively. The following tables set forth the components of investment income for the three months ended March 31, 2024 and March 31, 2023:

Current wording

Investment income for the three months ended June 30, 2024 and June 30, 2023 was approximately $11.4 million and $13.5 million, respectively. Investment income for the six months ended June 30, 2024 and June 30, 2023 was approximately $22.1 million and $26.5 million, respectively. The following tables set forth the components of investment income for the three and six months ended June 30, 2024 and June 30, 2023:

Previous wording

The decrease in total investment income for the three months ended March 31, 2024 was primarily due to a decrease in interest income for the three months ended March 31, 2024.

Current wording

The decrease in total investment income for the three and six months ended June 30, 2024 was primarily due to an decrease in interest income for the three and six months ended June 30, 2024.

Previous wording

The total principal value of income producing debt investments as of March 31, 2024 and March 31, 2023 was approximately $218.2 million and $287.7 million, respectively. As of March 31, 2024, our debt investments had a range of stated interest rates of 9.19% and 15.33% and maturity dates of between 0 and 82 months compared to a range of stated interest rates of 8.09% and 14.83% and maturity dates of between 0 and 83 months as of March 31, 2023. In addition, our total debt portfolio had a weighted average yield on debt investments of approximately 13.94% as of March 31, 2024, compared to approximately 12.36% as of March 31, 2023. As of March 31, 2024, six debt investments in three portfolio companies were on non-accrual status with a combined fair value of approximately $2.0 million and total principal value of approximately $63.8 million. As of March 31, 2023, three debt investments in one portfolio company were on non-accrual status with a fair value of approximately $0.1 million and total principal value of approximately $28.7 million.

Current wording

The total principal value of income producing debt investments as of June 30, 2024 and June 30, 2023 was approximately $221.0 million and $274.4 million, respectively. As of June 30, 2024, our debt investments had a range of stated interest rates of 9.21% and 15.44% and maturity dates of between 0 and 79 months compared to a range of stated interest rates of 8.94% to 15.26% and maturity dates between 0 and 80 months as of June 30, 2023. In addition, our total debt portfolio had a weighted average yield on debt investments of approximately 13.69% as of June 30, 2024, compared to approximately 12.85% as of June 30, 2023. As of June 30, 2024, three debt investments were on non-accrual status with a combined fair value of approximately $0.5 million and total principal amount of approximately $31.6 million. As of June 30, 2023, three debt investments were on non-accrual status with a combined fair value of approximately $0.5 million and total principal amount of approximately $29.2 million.

Previous wording

Income from securitization vehicles for the three months ended March 31, 2024 and March 31, 2023, was approximately $3.9 million and $4.4 million, respectively. The total principal outstanding on our investments in CLOs as of March 31, 2024 and March 31, 2023, was approximately $314.7 million and $363.1 million, respectively. The weighted average yield on CLO equity investments as of March 31, 2024 and March 31, 2023, was approximately 9.5% and 9.1%, respectively.

Current wording

Income from securitization vehicles for the three months ended June 30, 2024 and June 30 2023, was approximately $3.9 million and $4.3 million, respectively. Income from securitization vehicles for the six months ended June 30, 2024 and June 30, 2023, was approximately $7.8 million and $8.7 million, respectively. The total principal outstanding on our investments in CLOs as of June 30, 2024 and June 30, 2023, was approximately $320.9 million and $347.1 million, respectively. The weighted average yield on CLO equity investments as of June 30, 2024 and June 30, 2023, was approximately 9.36% and 9.22%, respectively.

Previous wording

Total expenses, including taxes, for the three months ended March 31, 2024 and 2023, were approximately $4.1 million and $6.5 million, respectively. These amounts consisted of base management fees, interest expense, professional fees, compensation expense, general and administrative expenses, excise tax, and incentive fees. That decrease is primarily due to lower interest expense, base management fees, and incentive fees, partially offset by greater excise tax expense.

Current wording

Total expenses, including excise tax, for the three months ended June 30, 2024 and 2023, were approximately $3.7 million and $6.8 million, respectively. Total expenses for the six months ended June 30, 2024 and 2023, were approximately $7.9 million and $13.3 million, respectively. These amounts consisted of base management fees, interest expense, professional fees, compensation expense, general and administrative expenses, net investment income incentive fees, and excise tax. That decrease for the three and six months ended June 30, 2024 was primarily due to lower net investment income incentive fees and interest expense, partially offset by a decrease in base management fees.

Previous wording

The base management fee for the three months ended March 31, 2024 was approximately $1.0 million compared with $1.2 million for the three months ended March 31, 2023. That decrease for the three months ended March 31, 2024 was due largely to a decrease in the weighted average gross assets.

Current wording

The base management fee for the three months ended June 30, 2024 was approximately $1.0 million compared with $1.3 million for the three months ended June 30, 2023. The base management fee for the six months ended June 30, 2024 was approximately $2.0 million compared with $2.4 million for the six months ended June 30, 2023. That decrease for the three and six months ended June 30, 2024 was due largely to a decrease in weighted average gross assets.

Previous wording

There was no net investment income incentive fee for the three months ended March 31, 2024. The net investment income incentive fee for the three months ended March 31, 2023 was approximately $1.2 million. That decrease for the three months ended March 31, 2024 was due to the Company’s performance not exceeding the total return requirement.

Current wording

There were no net investment income incentive fees for the three and six months ended June 30, 2024, due to the total return requirement. The net investment income incentive fees for the three and six months ended June 30, 2023 were approximately $1.3 million and $2.5 million respectively.

Previous wording

Professional fees, consisting of legal, consulting, valuation, audit and tax fees, were approximately $312,000 for the three months ended March 31, 2024, compared to approximately $336,000 for the three months ended March 31, 2023. That decrease for the three months ended March 31, 2024 was primarily due to lower legal fees.

Current wording

Professional fees, consisting of legal, consulting, valuation, audit and tax fees, were approximately $491,000 for the three months ended June 30, 2024, compared to approximately $282,000 for the three months ended June 30, 2023. Professional fees were approximately $803,000 for the six months ended June 30, 2024, compared to approximately $618,000 for the six months ended June 30, 2023.

Previous wording

Compensation expense was approximately $207,000 for the three months ended March 31, 2024, compared to approximately $267,000 for the three months ended March 31, 2023. Compensation expense reflects the allocation of compensation expenses for the services of our Chief Financial Officer, accounting personnel, and other administrative support staff.

Current wording

Compensation expense was approximately $174,000 for the three months ended June 30, 2024, compared to approximately $190,000 for the three months ended June 30, 2023. Compensation expense was approximately $381,000 for the six months ended June 30, 2024, compared to approximately $457,000 for the six months ended June 30, 2023. Compensation expense reflects the allocation of compensation expenses for the services of our Chief Financial Officer, accounting personnel, and other administrative support staff.

Previous wording

General and administrative expenses, consisting primarily of directors’ fees, insurance, listing fees, transfer agent and custodian fees, office supplies, facilities costs and other expenses, was approximately $347,000 for the three months ended March 31, 2024, compared to approximately $373,000 for the three months ended March 31, 2023. Office supplies, facilities costs and other expenses are allocated to us under the terms of the Administration Agreement.

Current wording

General and administrative expenses, consisting primarily of directors’ fees, insurance, listing fees, transfer agent and custodian fees, office supplies, facilities costs, and other expenses, were approximately $448,000 for the three months ended June 30, 2024, compared to approximately $430,000 for the three months ended June 30, 2023. General and administrative expenses were approximately $794,000 for the six months ended June 30, 2024, compared to approximately $803,000 for the six months ended June 30, 2023. Office supplies, facilities costs and other expenses are allocated to us under the terms of the Administration Agreement.

Previous wording

There was no net investment income incentive fee (“Net Investment Income Incentive Fee”) recorded for the three months ended March 31, 2024. The Net Investment Income Incentive Fee recorded for the three months ended March 31, 2023 was approximately $1.2 million. The Net Investment Income Incentive Fee is calculated and payable quarterly in arrears based on the amount by which (x) the “Pre-Incentive Fee Net Investment Income” for the immediately preceding calendar quarter exceeds (y) the “Preferred Return Amount” for the calendar quarter. For this purpose, “Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income accrued during the calendar quarter minus our operating expenses for the quarter (including the Base Fee, expenses payable under the Administration Agreement with Oxford Funds, and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Refer to “Note 7. Related Party Transactions” in the notes to our financial statements.

Current wording

There was no net investment income incentive fee (“Net Investment Income Incentive Fee”) recorded for the three and six months ended June 30, 2024. The net investment income incentive fee (“Net Investment Income Incentive Fee”) recorded for the three and six months ended June 30, 2023 was approximately $1.3 million and $2.5 million, respectively. The Net Investment Income Incentive Fee is calculated and payable quarterly in arrears based on the amount by which (x) the “Pre-Incentive Fee Net Investment Income” for the immediately preceding calendar quarter exceeds (y) the “Preferred Return Amount” for the calendar quarter. For this purpose, “Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income accrued during the calendar quarter minus our operating expenses for the quarter (including the Base Fee, expenses payable under the Administration Agreement with Oxford Funds, and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Refer to “Note 7. Related Party Transactions” in the notes to our financial statements.

Previous wording

The expense attributable to the capital gains incentive fee (the “Capital Gains Incentive Fee”), as reported under GAAP, is calculated as if the Company’s entire portfolio had been liquidated at period end, and therefore is calculated on the basis of net realized and unrealized gains and losses at the end of each period. That expense (or the reversal of such an expense) related to that hypothetical liquidation of the portfolio (and assuming no other changes in realized or unrealized gains and losses) would only become payable to our investment adviser in the event of a complete liquidation of our portfolio as of period end and the termination of the Investment Advisory Agreement on such date. For the three months ended March 31, 2024 and 2023, no accrual was required as a result of the impact of accumulated net unrealized depreciation and net realized losses on our portfolio.

Current wording

The expense attributable to the capital gains incentive fee (the “Capital Gains Incentive Fee”), as reported under GAAP, is calculated as if the Company’s entire portfolio had been liquidated at period end, and therefore is calculated on the basis of net realized and unrealized gains and losses at the end of each period. That expense (or the reversal of such an expense) related to that hypothetical liquidation of the portfolio (and assuming no other changes in realized or unrealized gains and losses) would only become payable to our investment adviser in the event of a complete liquidation of our portfolio as of period end and the termination of the Investment Advisory Agreement on such date. For the three and six months ended June 30, 2024 and 2023, no accrual was required as a result of the impact of accumulated net unrealized depreciation and net realized losses on our portfolio.

Previous wording

The amount of the Capital Gains Incentive Fee which will actually be payable is determined in accordance with the terms of the Investment Advisory Agreement and is calculated as of the end of each calendar year (or upon termination of the Investment Advisory Agreement). The terms of the Investment Advisory Agreement state that the Capital Gains Incentive Fee calculation is based on net realized gains, if any, offset by gross unrealized depreciation for the calendar year. No effect is given to gross unrealized appreciation in this calculation. For the three months ended March 31, 2024 and 2023, such an accrual was not required under the terms of the Investment Advisory Agreement.

Current wording

The amount of the Capital Gains Incentive Fee which will actually be payable is determined in accordance with the terms of the Investment Advisory Agreement and is calculated as of the end of each calendar year (or upon termination of the Investment Advisory Agreement). The terms of the Investment Advisory Agreement state that the Capital Gains Incentive Fee calculation is based on net realized gains, if any, offset by gross unrealized depreciation for the calendar year. No effect is given to gross unrealized appreciation in this calculation. For the three and six months ended June 30, 2024 and 2023, such an accrual was not required under the terms of the Investment Advisory Agreement.

Previous wording

For the three months ended March 31, 2024, our net change in unrealized depreciation was approximately $0.2 million, composed of $6.9 million in gross unrealized appreciation, $15.3 million in gross unrealized depreciation and approximately $8.2 million relating to the reversal of prior period net unrealized depreciation as investment gains and losses were realized. This includes net unrealized appreciation of approximately $0.8 million resulting from reductions to the cost value of our CLO equity investments representing the difference between distributions received, or entitled to be received, on our investments held in CLO equity subordinated notes and fee notes, of approximately $4.8 million and the effective yield interest income recognized on our CLO equity subordinated notes and the amortized cost adjusted income on our CLO equity fee notes of approximately $3.9 million. The most significant components of the net change in unrealized depreciation during the three months ended March 31, 2024, were as follows (in millions):

Current wording

For the three months ended June 30, 2024, our net change in unrealized appreciation was approximately $28.0 million, composed of $9.2 million in gross unrealized appreciation, $11.8 million in gross unrealized depreciation and approximately $30.6 million relating to the reversal of prior period net unrealized depreciation as investment gains and losses were realized. This includes net unrealized appreciation of approximately $6.4 million resulting from reductions to the cost value of our CLO equity investments representing the difference between distributions received, or entitled to be received, on our investments held in CLO equity subordinated notes and fee notes, of approximately $10.2 million and the effective yield interest income recognized on our CLO equity subordinated notes and the amortized cost adjusted income on our CLO equity fee notes of approximately $3.8 million. The most significant components of the net change in unrealized appreciation during the three months ended June 30, 2024, were as follows (in millions):

Previous wording

For the three months ended March 31, 2023, our net change in unrealized depreciation was approximately $0.2 million, composed of $7.8 million in gross unrealized appreciation and $8.0 million in gross unrealized depreciation. This includes net unrealized appreciation of approximately $3.0 million resulting from reductions to the cost value of our CLO equity investments representing the difference between distributions received, or entitled to be received, on our investments held in CLO equity subordinated notes and fee notes, of approximately $7.3 million and the effective yield interest income recognized on our CLO equity subordinated notes and the amortized cost adjusted income on our CLO equity fee notes of approximately $4.3 million. The most significant components of the net change in unrealized depreciation during the three months ended March 31, 2023, were as follows (in millions):

Current wording

For the six months ended June 30, 2024, our net change in unrealized appreciation was approximately $27.8 million, composed of $9.6 million in gross unrealized appreciation, $15.8 million in gross unrealized depreciation and approximately $33.9 million relating to the reversal of prior period net unrealized depreciation as investment gains and losses were realized. This includes net unrealized appreciation of approximately $7.2 million resulting from reductions to the cost value of our CLO equity investments representing the difference between distributions received, or entitled to be received, on our investments held in CLO equity subordinated notes and fee notes, of approximately $15.0 million and the effective yield interest income recognized on our CLO equity subordinated notes and the amortized cost adjusted income on our CLO equity fee notes of approximately $7.8 million. The most significant components of the net change in unrealized appreciation during the six months ended June 30, 2024, were as follows (in millions):

Previous wording

For the three months ended March 31, 2024, the net decrease in net assets resulting from operations per common share was $0.03 (basic and diluted), compared to a net increase in net assets resulting from operations per share of $0.13 (basic and diluted) for the three months ended March 31, 2023.

Current wording

For the three months and six months ended June 30, 2024, the net increase in net assets resulting from net investment income per common share was $0.13 and $0.24 (basic and diluted), compared to the net increase in net assets resulting from net investment income per share of $0.13 and $0.26 (basic and diluted) for the three and six months ended June 30, 2023.

Previous wording

Net decrease in net assets resulting from operations for the three months ended March 31, 2024 was approximately $1.8 million compared with a net increase in net assets resulting from operations of approximately $6.3 million for the three months ended March 31, 2023.

Current wording

Net increase in net assets resulting from operations for the three months ended June 30, 2024 was approximately $5.3 million compared with a net increase in net assets resulting from operations of approximately $11.6 million for the three months ended June 30, 2023.

Previous wording

For the three months ended March 31, 2024, the net increase in net assets resulting from net investment income per common share was $0.11 (basic and diluted), compared to the net increase in net assets resulting from net investment income per share of $0.13 (basic and diluted) for the three months ended March 31, 2023. The per share decrease was primarily due to a decrease in investment income, partially offset by a decrease in Net Investment Income Incentive Fees.

Current wording

For the three months ended June 30, 2024, the net increase in net assets resulting from operations per common share was $0.09 (basic and diluted), compared to a net increase in net assets resulting from operations per share of $0.23 (basic and diluted) for the three months ended June 30, 2023. For the six months ended June 30, 2024, the net increase in net assets resulting from operations per common share was $0.06 (basic and diluted), compared to a net increase in net assets resulting from operations per share of $0.36 (basic and diluted) for the six months ended June 30, 2023.

Previous wording

As of March 31, 2024, cash and cash equivalents were approximately $20.9 million as compared to approximately $5.7 million as of December 31, 2023. For the three months ended March 31, 2024, net cash provided by operating activities for the period, consisting primarily of the items described in “— Results of Operations,” was approximately $20.3 million, largely reflecting repayments of principal of approximately $17.9 million, net realized losses of approximately $8.1 million, and sales of investments of approximately $1.4 million, partially offset by cash purchases of investments of approximately $8.1 million. For the three months ended March 31, 2024, net cash used in financing activities was approximately $5.1 million, reflecting the payment of distributions of approximately $6.1 million, partially offset by the issuance of common stock in connection with our ATM program of approximately $0.9 million.

Current wording

As of June 30, 2024, cash and cash equivalents were approximately $30.0 million as compared to approximately $5.7 million as of December 31, 2023. For the six months ended June 30, 2024, net cash provided by operating activities for the period, consisting primarily of the items described in “— Results of Operations,” was approximately $26.7 million, largely reflecting net realized losses from investments of approximately $38.5 million, proceeds from principal repayments and sales of investments of approximately $33.6 million, partially offset by purchases of investments of approximately $28.5 million and net change in unrealized appreciation of approximately $27.8 million. For the six months ended June 30, 2024, net cash used in financing activities was approximately $2.4 million, reflecting the payment of distributions of approximately $12.2 million, partially offset by the net proceeds of the issuance of common stock in connection with our at-the-market (“ATM”) program of approximately $9.8 million.

Previous wording

On August 22, 2023, we entered into Amendment No. 1 to that certain Equity Distribution Agreement dated August 1, 2019 with Ladenburg Thalmann & Co. through which we may offer for sale, from time to time, up to $150.0 million of our common stock through an At-the-Market (“ATM”) offering. We issued a total of

Current wording

On August 22, 2023, we entered into Amendment No. 1 to that certain Equity Distribution Agreement dated August 1, 2019 with Ladenburg Thalmann & Co. through which we may offer for sale, from time to time, up to $150.0 million of our common stock through an At-the-Market (“ATM”) offering. We issued a total of 2,932,908 and 3,257,030 shares of common stock pursuant to the ATM offering during the three and six months ended June 30, 2024, respectively. The total amount of capital raised net of underwriting fees and offering costs was approximately $8.9 million and $9.8 million during the three and six months ended June 30, 2024, respectively.

Previous wording

From time to time, the Board may authorize a share repurchase program under which shares are purchased in open market transactions. Since we are 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. During the three months ended March 31, 2024 and 2023, we were not authorized to repurchase any shares of outstanding common stock.

Current wording

From time to time, the Board may authorize a share repurchase program under which shares are purchased in open market transactions. Since we are 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. During the three and six months ended June 30, 2024 and 2023, we were not authorized to repurchase any shares of outstanding common stock.

Previous wording

In accordance with the 1940 Act, with certain limited exceptions, as of March 31, 2024, we were only allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, was at least 150%, immediately after such borrowing. As of March 31, 2024 and December 31, 2023, our asset coverage for borrowed amounts was approximately 213% and 219%, respectively.

Current wording

In accordance with the 1940 Act, with certain limited exceptions, as of June 30, 2024, we were only allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, was at least 150%, immediately after such borrowing. As of June 30, 2024 and December 31, 2023, our asset coverage for borrowed amounts was approximately 220% and 219%, respectively.

Previous wording

The weighted average stated interest rate and weighted average maturity on all of the Company’s debt outstanding as of March 31, 2024, were 5.77% and 3.5 years, respectively, and as of December 31, 2023, were 5.77% and 3.8 years, respectively.

Current wording

The weighted average stated interest rate and weighted average maturity on all of the Company’s debt outstanding as of June 30, 2024, were 5.77% and 3.3 years, respectively, and as of December 31, 2023, were 5.77% and 3.8 years, respectively.

Previous wording

(1) The tax characterization of cash distributions for the year ending December 31, 2024 and year ended December 31, 2023 will not be known until the tax return for such years are finalized. For the year ending December 31, 2024 and year ended December 31, 2023, the amounts and sources of distributions reported are only estimates and are not being provided for U.S. tax reporting purposes. The final determination of the source of all distributions in 2024 and 2023 will be made after year-end and the amounts represented may be materially different from the amounts disclosed in the final Form 1099-DIV notice. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the our investment performance and may be subject to change based on tax regulations.

Current wording

(1) The tax characterization of cash distributions for the year ending December 31, 2024 and year ended December 31, 2023 will not be known until the tax return for such years are finalized. For the year ending December 31, 2024 and year ended December 31, 2023, the amounts and sources of distributions reported are only estimates and are not being provided for U.S. tax reporting purposes. The final determination of the source of all distributions in 2024 and 2023 will be made after year-end and the amounts represented may be materially different from the amounts disclosed in the final Form 1099-DIV notice. The actual amounts and sources of the amounts for tax reporting purposes will depend upon our investment performance and may be subject to change based on tax regulations.