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

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 few investments, if any, exceeding 5.0% of the total portfolio. As of September 30, 2024, our debt investments had stated

Previous 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.

Current wording

interest rates (excluding stated interest rates on those investments on non-accrual status) of between 8.71% and 13.26% and maturity dates of between 0 and 76 months. In addition, our portfolio had a weighted average annualized yield on debt investments of approximately 14.50% as of September 30, 2024.

Previous 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.

Current wording

During the three months ended September 30, 2024, U.S. loan market performance modestly improved versus the three months ended June 30, 2024. U.S. loan prices, as defined by the Morningstar/LSTA US Leveraged Loan Index, increased from 96.54% of par as of June 30, 2024 to 96.71% of par as of September 30, 2024.

Previous 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.

Current wording

As of September 30, 2024, the Company’s Board of Directors approved the fair value of the Company’s investment portfolio of approximately $262.9 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 and six months ended June 30, 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 nine months ended September 30, 2024 for more information on our critical accounting policies.

Previous 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).

Current wording

The total fair value of our investment portfolio was approximately $262.9 million and $266.9 million as of September 30, 2024, and December 31, 2023, respectively. The decrease in the value of investments during the nine month period ended September 30, 2024, was due primarily to net realized losses of approximately $51.4 million, debt repayments of approximately $61.6 million, and sales of securities of approximately $4.8 million, partially offset by purchases of approximately $88.7 million and net unrealized appreciation on our investment portfolio of approximately $33.6 million (which incorporates reductions to CLO equity cost value of approximately $9.7 million).

Previous wording

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

Current wording

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

Previous 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.

Current wording

(1) For the nine months ended September 30, 2024, the reductions to CLO equity cost value of approximately $9.7 million represented the distributions received, or entitled to be received, on our investments held in CLO equity subordinated and income notes of approximately $21.0 million, plus the amortization of cost on our CLO fee notes of approximately $64,000, less the effective yield interest income recognized on our CLO equity subordinated and income notes of approximately $11.3 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 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.

Current wording

During the nine months ended September 30, 2024 we purchased approximately $88.7 million in portfolio investments, which includes additional investments of approximately $30.6 million in existing portfolio companies and approximately $58.1 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 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.

Current wording

For the nine months ended September 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 nine months ended September 30, 2024 and the year ended December 31, 2023, we had loan principal repayments of approximately $61.6 million and $15.8 million, respectively.

Previous 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.

Current wording

As of September 30, 2024, we had investments in debt securities of, or loans to, 18 portfolio companies, with a fair value of approximately $152.7 million, CLO equity investments of approximately $103.5 million, and other equity investments of approximately $6.8 million.

Previous wording

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

Current wording

The following table indicates the quarterly portfolio investment activity for the past seven 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 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.

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 September 30, 2024 and December 31, 2023, we held qualifying assets that represented 64.1% 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

We have adopted a credit grading system to monitor the quality of our debt investment portfolio. As of June 30, 2024 and December 31, 2023, our portfolio had a weighted average grade of 2.3 and 2.3, respectively, based upon the fair value of the debt investments in the portfolio. Equity securities and investments in CLOs are not graded.

Current wording

We have adopted a credit grading system to monitor the quality of our debt investment portfolio. As of September 30, 2024 and December 31, 2023, our portfolio had a weighted average grade of 2.4 and 2.3, respectively, based upon the fair value of the debt investments in the portfolio. Equity securities and investments in CLOs are not graded.

Previous 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.

Current wording

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

Previous 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:

Current wording

Investment income for the three months ended September 30, 2024 and September 30, 2023 was approximately $10.3 million and $13.0 million, respectively. Investment income for the nine months ended September 30, 2024 and September 30, 2023 was approximately $32.5 million and $39.5 million, respectively. The following tables set forth the components of investment income for the three and nine months ended September 30, 2024 and September 30, 2023:

Previous 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.

Current wording

The decrease in total investment income for the three and nine months ended September 30, 2024, was primarily due to a decrease in interest income for the three and nine months ended September 30, 2024.

Previous 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.

Current wording

The total principal value of income producing debt investments as of September 30, 2024, and September 30, 2023 was approximately $209.6 million and $260.2 million, respectively. As of September 30, 2024, our debt investments had a range of stated interest rates (excluding stated interest rates on those investments on non-accrual status) of 8.71% and 13.26% and maturity dates of between 0 and 76 months compared to a range of stated interest rates of 9.18% to 17.00% and maturity dates between 0 and 77 months as of September 30, 2023. In addition, our total debt portfolio had a weighted average yield on debt investments of approximately 14.50% as of September 30, 2024, compared to approximately 13.10% as of September 30, 2023. As of September 30, 2024, three debt investments in one portfolio company 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 September 30, 2023, three debt investments in one portfolio company were on non-accrual status with a combined fair value of approximately $0.5 million and total principal amount of approximately $30.3 million.

Previous 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.

Current wording

Income from securitization vehicles for the three months ended September 30, 2024 and September 30 2023, was approximately $3.5 million and $4.1 million, respectively. Income from securitization vehicles for the nine months ended September 30, 2024 and September 30, 2023, was approximately $11.3 million and $12.8 million, respectively. The total principal outstanding on our investments in CLOs as of September 30, 2024 and September 30, 2023, was approximately $354.4 million and $312.3 million, respectively. The weighted average yield on CLO equity investments as of September 30, 2024 and September 30, 2023, was approximately 9.6% and 9.7%, respectively.

Previous 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.

Current wording

Total expenses for the three months ended September 30, 2024 and 2023, were approximately $4.2 million and $6.6 million, respectively. Total expenses for the nine months ended September 30, 2024 and 2023, were approximately $12.0 million and $19.9 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 nine months ended September 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

Expenses before incentive fees for the three and six months ended June 30, 2024 were approximately $3.7 million and $7.9 million. For the three and six months ended June 30, 2023, expenses before incentive fees were approximately $5.5 million and $10.8 million respectively.

Current wording

Expenses before incentive fees for the three and nine months ended September 30, 2024 were approximately $4.2 million and $12.0 million. For the three and nine months ended September 30, 2023, expenses before incentive fees were approximately $5.4 million and $16.2 million respectively.

Previous 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.

Current wording

The base management fee for the three months ended September 30, 2024 was approximately $1.1 million compared with $1.2 million for the three months ended September 30, 2023. The base management fee for the nine months ended September 30, 2024 was approximately $3.1 million compared with $3.6 million for the nine months ended September 30, 2023. Those decreases for the three and nine months ended September 30, 2024 were due largely to decreases in weighted average gross assets.

Previous 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.

Current wording

There were no net investment income incentive fees for the three and nine months ended September 30, 2024, due to the total return requirement. The net investment income incentive fees for the three and nine months ended September 30, 2023 were approximately $1.2 million and $3.7 million respectively.

Previous wording

Interest expense for the three months ended June 30, 2024, was approximately $2.0 million, which primarily relates to our 5.50% unsecured notes due 2028 (the “5.50% Unsecured Notes”) and 6.25% unsecured notes due 2026 (the “6.25% Unsecured Notes”). Interest expense for the three months ended June 30, 2023, was approximately $3.1 million, which primarily relates to our 5.50% Unsecured Notes, 6.25% Unsecured Notes, and 6.50% unsecured notes due 2024.

Current wording

Interest expense for the three months ended September 30, 2024, was approximately $2.0 million, which primarily relates to our 5.50% unsecured notes due 2028 (the “5.50% Unsecured Notes”) and 6.25% unsecured notes due 2026 (the “6.25% Unsecured Notes”). Interest expense for the three months ended September 30, 2023, was approximately $2.5 million, which primarily relates to our 5.50% Unsecured Notes, 6.25% Unsecured Notes, and 6.50% unsecured notes due 2024. Interest expense for the nine months ended September 30, 2024, was approximately $5.9 million, which primarily relates to our 5.50% Unsecured Notes and 6.25% Unsecured Notes. Interest expense for the nine months ended September 30, 2023, was approximately $8.7 million, which primarily relates to our 5.50% Unsecured Notes, 6.25% Unsecured Notes, and 6.50% unsecured notes due 2024. The decreases in interest expense for the three and nine months ended September 30, 2024 were primarily due to the full repayment of the 6.50% unsecured notes due 2024 throughout the year ended December 31, 2023.

Previous 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.

Current wording

Professional fees, consisting of legal, consulting, valuation, audit and tax fees, were approximately $359,000 for the three months ended September 30, 2024, compared to approximately $479,000 for the three months ended September 30, 2023. Professional fees were approximately $1.2 million for the nine months ended September 30, 2024, compared to approximately $1.1 million for the nine months ended September 30, 2023.

Previous 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.

Current wording

Compensation expense was approximately $209,000 for the three months ended September 30, 2024, compared to approximately $205,000 for the three months ended September 30, 2023. Compensation expense was approximately $591,000 for the nine months ended September 30, 2024, compared to approximately $662,000 for the nine months ended September 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, 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.

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 $395,000 for the three months ended September 30, 2024, compared to approximately $458,000 for the three months ended September 30, 2023. General and administrative expenses were approximately $1.2 million for the nine months ended September 30, 2024, compared to approximately $1.3 million for the nine months ended September 30, 2023. Office supplies, facilities costs and other expenses are allocated to us under the terms of the Administration Agreement.

Previous wording

Excise tax was approximately $(374,000) for the three months ended June 30, 2024, compared to $300,000 for the three months ended June 30, 2023. Excise tax was approximately $(48,000) for the six months ended June 30, 2024, compared to $300,000 for the six months ended June 30, 2023. The current quarter accrual reflects reversals of previously overestimated excise tax.

Current wording

Excise tax was approximately $144,000 for the three months ended September 30, 2024, compared to $574,000 for the three months ended September 30, 2023. Excise tax was approximately $96,000 for the nine months ended September 30, 2024, compared to $874,000 for the nine months ended September 30, 2023.

Previous 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.

Current wording

There was no net investment income incentive fee (“Net Investment Income Incentive Fee”) recorded for the three and nine months ended September 30, 2024. The Net Investment Income Incentive Fee recorded for the three and nine months ended September 30, 2023 was approximately $1.2 million and $3.7 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 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.

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

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 and six months ended June 30, 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 nine months ended September 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 June 30, 2024, we recognized net realized losses on investments of approximately $30.4 million, which reflects the extinguishment of two senior secured loans which were previously on non-accrual status, a sale of a CLO equity investment, and an extinguishment of a CLO equity investment.

Current wording

For the three months ended September 30, 2024, we recognized net realized losses on investments of approximately $12.9 million, which reflects the extinguishment upon a recapitalization of two senior secured loans in a single portfolio company.

Previous 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):

Current wording

For the three months ended September 30, 2024, our net change in unrealized appreciation was approximately $5.8 million, composed of $6.2 million in gross unrealized appreciation, $12.2 million in gross unrealized depreciation and approximately $11.8 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 $2.5 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 $6.0 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 $3.5 million. The most significant components of the net change in unrealized appreciation during the three months ended September 30, 2024, were as follows (in millions):

Previous wording

For the six months ended June 30, 2024, we recognized net realized losses on investments of approximately $38.5 million, which reflects the extinguishment of two senior secured loans which were previously on non-accrual status, a sale of multiple CLO equity investments, and an extinguishment of a CLO equity investment.

Current wording

For the nine months ended September 30, 2024, we recognized net realized losses on investments of approximately $51.4 million, which reflects the extinguishment upon a recapitalization of two senior secured loans in a single portfolio company, the extinguishment of two senior secured loans which were previously on non-accrual status, a sale of multiple CLO equity investments, and an extinguishment of a CLO equity investment.

Previous 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):

Current wording

For the nine months ended September 30, 2024, our net change in unrealized appreciation was approximately $33.6 million, composed of $7.9 million in gross unrealized appreciation, $20.1 million in gross unrealized depreciation and approximately $45.9 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 $9.7 million resulting from reductions to the cost value of our CLO equity investments representing the difference between distributions received, or entitled to be received, on our investments held in CLO equity subordinated notes and fee notes, of approximately $21.0 million and the effective yield interest

Previous wording

Net investment income for the three months ended June 30, 2024 and June 30, 2023 was approximately $7.7 million and $6.7 million, respectively. Net investment income for the six months ended June 30, 2024 and June 30, 2023 was approximately $14.3 million and $13.2 million, respectively. That increase in net investment income was primarily due to a decrease in net investment income incentive fees and interest expense, partially offset by a decrease in interest income and income from securitization vehicles and investments.

Current wording

Net investment income for the three months ended September 30, 2024 and September 30, 2023 was approximately $6.2 million and $6.4 million, respectively. Net investment income for the nine months ended September 30, 2024 and September 30, 2023 was approximately $20.4 million and $19.6 million, respectively. The decrease in net investment income for each of the three and nine month respective periods ended September 30, 2024 was primarily due to lower interest income and income from securitization vehicles and investments, partially offset by a decrease in net investment income incentive fees and interest expense and an increase in other income.

Previous 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.

Current wording

For the three months and nine months ended September 30, 2024, the net increase in net assets resulting from net investment income per common share was $0.10 and $0.33 (basic and diluted), compared to the net increase in net assets resulting from net investment income per share of $0.11 and $0.37 (basic and diluted) for the three and nine months ended September 30, 2023.

Previous 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.

Current wording

Net decrease in net assets resulting from operations for the three months ended September 30, 2024 was approximately $0.9 million compared with a net increase in net assets resulting from operations of approximately $6.7 million for the three months ended September 30, 2023.

Previous wording

Net increase in net assets resulting from operations for the six months ended June 30, 2024 was approximately $3.5 million compared with a net increase in net assets resulting from operations of approximately $17.9 million for the six months ended June 30, 2023.

Current wording

Net increase in net assets resulting from operations for the nine months ended September 30, 2024 was approximately $2.6 million compared with a net increase in net assets resulting from operations of approximately $24.5 million for the nine months ended September 30, 2023.

Previous 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.

Current wording

For the three months ended September 30, 2024, the net decrease in net assets resulting from operations per common share was $0.01 (basic and diluted), compared to a net increase in net assets resulting from operations per share of $0.12 (basic and diluted) for the three months ended September 30, 2023. For the nine months ended September 30, 2024, the net increase in net assets resulting from operations per common share was $0.04 (basic and diluted), compared to a net increase in net assets resulting from operations per share of $0.47 (basic and diluted) for the nine months ended September 30, 2023.