OFS Capital Corp
For the period ended Sep 30, 2025. Filed Oct 31, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Oct 31, 2025
OFS$3.78+1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-01.
0001487918-25-000093
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-31.
0001487918-25-000108
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 155 previous paragraphs and 164 current paragraphs.
84 unchanged; 50 reworded; 27 added; 19 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 16 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (27)
Current report
Our total outstanding debt decreased from $243.4 million at June 30, 2025 to $239.2 million at September 30, 2025. For the quarter ended September 30, 2025, our weighted-average debt interest costs increased to 6.67% compared to 6.21% for the quarter ended June 30, 2025. The increase in our weighted-average debt interest costs was primarily due to refinancing a portion of the 4.75% Unsecured Notes Due February 2026 by issuing $69.0 million of 7.50% Unsecured Notes Due July 2028 and a $25.0 million 8.00% Unsecured Note Due August 2029 and using the proceeds from these issuances to redeem $94.0 million of 4.75% Unsecured Notes Due February 2026. See “—Results of Operations” and “—Liquidity and Capital Resources” for additional information.
Current report
As of September 30, 2025, OFSCC-FS was not in compliance with certain provisions under the BNP Facility, specifically, the: (i) restriction on sales of collateral loans in circumstances where such sales would result in the failure of a coverage test; and (ii) related requirement to maintain the minimum over-collateralization ratio. On October 28, 2025, OFSCC-FS entered into a waiver agreement with the administrative agent and the required lenders, pursuant to which the events of default arising from these breaches were waived.
Current report
Non-Cash Investment Activity
Current report
During the three months ended September 30, 2025, we restructured our first lien debt investment in JP Intermediate B, LLC to, among other things, exchange our first lien debt investment for new first lien debt and common equity investments. The cost of the existing first lien debt investment was ascribed to the new investments received in the exchange, and no realized loss was recognized. As of September 30, 2025, these investments had an amortized cost of and fair value of $4.5 million and $1.5 million, respectively. On October 2, 2025 and in connection with the completion of the restructuring transaction, we also invested $0.3 million in a new first lien facility.
Current report
For the three and nine months ended September 30, 2025, loans to BayMark Health Services, Inc. with an aggregate cost and fair value of $8.9 million and $6.8 million, respectively, were placed on non-accrual status.
Current report
For the three and nine months ended September 30, 2025, our first lien debt investment in JP Intermediate B, LLC with an amortized cost and fair value of $4.5 million and $1.5 million, respectively, was restructured in exchange for a combination of a new loan and equity in the portfolio company. Following the restructuring, the loan received in the exchange with an amortized cost and fair value of $1.5 million and $1.5 million, respectively, was placed on accrual status.
Current report
For the three months ended September 30, 2025, interest income decreased by $0.5 million compared to the prior quarter, primarily due to the placement of a portfolio company on non-accrual status during the quarter and the reversal of accrued and unpaid interest from the prior quarter.
Current report
For the three months ended September 30, 2025, dividend income increased by $0.5 million compared to the prior quarter, primarily due to aggregate non-recurring cash dividends of $0.5 million from our common equity investments in Pfanstiehl Holdings, Inc. and PM Acquisition LLC.
Current report
Comparison of the nine months ended September 30, 2025 and 2024
Current report
Interest expense for the three months ended September 30, 2025 increased $0.7 million compared to the prior quarter, primarily due to refinancing a portion of our 4.75% Unsecured Notes Due February 2026 by issuing $94.0 million of new Unsecured Notes with a weighted-average coupon of 7.63% and using the proceeds from these issuances to redeem $94.0 million of our 4.75% Unsecured Notes Due February 2026. In addition, the timing delay between the issuance dates and redemption dates of the Unsecured Notes caused a one-time incurrence of $0.2 million in additional interest expense.
Current report
Comparison of the nine months ended September 30, 2025 and 2024
Current report
For the three months ended September 30, 2025, we recognized a net loss on investments of $7.8 million, primarily due to net unrealized depreciation of $4.5 million on our common equity investment in Pfanstiehl Holdings, Inc. and a net loss of $4.2 million on our Structured Finance Securities, partially offset by a net gain of $3.2 million on our debt investments.
Current report
Nine months ended September 30, 2025
Current report
Nine months ended September 30, 2024
Current report
For the nine months ended September 30, 2024, we recognized a net loss on investments of $9.7 million, primarily due to a net loss on our debt investments of $8.7 million, of which $6.4 million related to net unrealized depreciation on our current non-accrual debt investments.
Current report
During the nine months ended September 30, 2024, our common equity investment in Pfanstiehl Holdings, Inc. experienced net unrealized appreciation of $2.7 million.
Current report
Loss on Extinguishment of Debt
Current report
Three months ended September 30, 2025
Current report
During the three months ended September 30, 2025, we elected to reduce the maximum facility amount on the BNP Facility from $150.0 million to $80.0 million, and, as a result, we recognized a loss on extinguishment of debt of $0.1 million related to the acceleration of deferred borrowing costs on the commitment reduction.
Current report
As of September 30, 2025, we had an unused commitment of $25.0 million under our Banc of California Credit Facility, subject to the terms of the borrowing base and other covenants. The Banc of California Credit Facility is scheduled to mature on February 28, 2026. Our liquidity position could be significantly impacted if the maturity date of this facility is not extended.
Current report
As of September 30, 2025, we had unfunded commitments of $18.3 million to 11 portfolio companies.
Current report
On August 8, 2025, we entered into the Securities Purchase Agreement, pursuant to which we sold in a private placement a $25.0 million aggregate principal amount Unsecured Note Due August 2029. The net proceeds to us from the Unsecured Note Due August 2029, after deducting discounts and offering expenses of $0.8 million, was $24.2 million. The
Current report
In connection with, and using the proceeds from, the issuance of the Unsecured Notes Due July 2028 and Unsecured Note Due August 2029, on August 11, 2025 and August 21, 2025, we redeemed $94.0 million in aggregate principal amount of the Unsecured Notes Due February 2026, which resulted in a leverage-neutral refinancing. The Unsecured Notes Due February 2026 were redeemed at 100% of their principal amount, plus accrued interest and a make-whole premium payments. We recognized a loss on extinguishment of debt of $0.3 million related to the acceleration of unamortized deferred debt issuance costs and make-whole premium payments on the redeemed notes.
Current report
On August 20, 2025, OFSCC-FS elected, effective as of August 22, 2025, to reduce the maximum facility amount of the BNP Facility from $150.0 million to $80.0 million. The reduction was made pursuant to the terms of the BNP Facility, which permits OFSCC-FS to voluntarily reduce the unused amount of the facility upon notice to the administrative agent and other applicable parties.
Current report
As of September 30, 2025, the BNP Facility had outstanding debt of $59.2 million and an effective interest rate of 7.19%. As of September 30, 2025, the unused commitment under the BNP Facility was $0, following the expiration of the reinvestment period on September 30, 2025. After September 30, 2025, principal cash flows received from the underlying collateral will be used to amortize the BNP Facility principal balance until the facility is fully repaid.
Current report
BNP Facility Waiver
Current report
As of September 30, 2025, OFSCC-FS was not in compliance with certain provisions under the BNP Facility, specifically, the: (i) restriction on sales of collateral loans in circumstances where such sales would result in the failure of a coverage test; and (ii) related requirement to maintain the minimum over-collateralization ratio. On October 28, 2025, OFSCC-FS entered into a waiver agreement with the administrative agent and the required lenders, pursuant to which the events of default arising from these breaches were waived.
Removed paragraphs (19)
Previous report
Our total outstanding debt decreased from $248.1 million at March 31, 2025 to $243.4 million at June 30, 2025. For the quarter ended June 30, 2025, our weighted-average debt interest costs remained relatively stable at 6.21% compared to 6.29% for the quarter ended March 31, 2025. See “—Liquidity and Capital Resources” and “—Recent Developments” for additional details.
Previous report
For the three and six months ended June 30, 2025, no new loans were placed on non-accrual status.
Previous report
For the three months ended June 30, 2025, interest income and dividend income increased by $0.1 million compared to the prior quarter, primarily attributable to one additional accrual day.
Previous report
Comparison of the six months ended June 30, 2025 and 2024
Previous report
Interest expense for the three months ended June 30, 2025 remained stable compared to the prior quarter.
Previous report
Comparison of the six months ended June 30, 2025 and 2024
Previous report
For the three months ended March 31, 2025, we recognized a net loss on investments of $10.8 million, primarily comprised of net losses of $8.1 million on our debt investments, of which $3.9 million related to non-accrual debt investments, and net losses of $1.5 million on our Structured Finance Securities.
Previous report
Six months ended June 30, 2025
Previous report
Six months ended June 30, 2024
Previous report
For the six months ended June 30, 2024, we recognized a net loss on investments of $7.8 million, comprised of net unrealized depreciation of $4.0 million and net realized losses of $3.5 million. The net loss during the period was primarily comprised of net unrealized depreciation of $5.8 million on our non-accrual debt investments offset, in part, by net unrealized appreciation of $4.0 million on our Structured Finance Securities.
Previous report
As of June 30, 2025, we had an unused commitment of $25.0 million under our Banc of California Credit Facility, as well as an unused commitment of $86.6 million under our BNP Facility, both of which are subject to borrowing base requirements and other covenants. On June 18, 2025, OFSCC-FS executed an amendment to the BNP Facility to extend its reinvestment period to August 31, 2025, upon which the ability to access the unused commitment of the facility terminates. The BNP Facility is scheduled to mature on June 20, 2027. If we are unable to amend the BNP Facility to extend the reinvestment period or enter into a new credit facility, our short-term liquidity will be significantly reduced.
Previous report
As of June 30, 2025, we had unfunded commitments of $16.1 million to ten portfolio companies.
Previous report
(1) The weighted-average fixed cash interest rate on the Unsecured Notes as of June 30, 2025 was 4.81%.
Previous report
Subsequent to June 30, 2025, we caused notices to be issued to the holders of the Unsecured Notes Due February 2026
Previous report
regarding the exercise of our option to redeem in aggregate $94.0 million of the issued and outstanding Unsecured Notes Due
Previous report
February 2026. See “—Recent Developments” for additional information.
Previous report
Subsequent to June 30, 2025, we closed the public offering of $69.0 million aggregate principal amount of our Unsecured Notes Due July 2028. See “—Recent Developments” for additional information.
Previous report
As of June 30, 2025, the effective interest rate on the BNP Facility was 8.27% and the unused commitment under the facility was $86.6 million, subject to a borrowing base and other covenants.
Previous report
On July 11, 2025, we caused notices to be issued to the holders of the Unsecured Notes Due February 2026 regarding the exercise of our option to redeem on August 11, 2025 $25.0 million of the issued and outstanding amount of such notes, plus accrued interest. On July 22, 2025, we caused notices to be issued to the holders of the Unsecured Notes Due February 2026 regarding the exercise of our option to redeem on August 21, 2025 $69.0 million of the issued and outstanding amount of such notes, plus accrued interest. The Unsecured Notes Due February 2026 will be redeemed at the greater of (a) 100% of the principal amount of the Unsecured Notes Due February 2026 to be redeemed, or (b) the sum of the present value of the remaining scheduled payments of principal and interest (exclusive of accrued and unpaid interest to each respective redemption date) on the Unsecured Notes Due February 2026 to be redeemed, discounted to each respective redemption date on a semi- annual basis (assuming a 360-day year consisting of twelve 30-day months) using the applicable Treasury Rate plus 50 basis points.
Reworded paragraphs (50)
Previous wording
Our NAV per common share decreased to $10.91 at June 30, 2025 from $11.97 at March 31, 2025, due to a net loss on investments of $0.97 per common share and our quarterly distribution of $0.34 per common share exceeding our quarterly net investment income of $0.25 per common share.
Current wording
Our NAV per common share decreased from $10.91 at June 30, 2025 to $10.17 at September 30, 2025, primarily due to a net loss on investments of $0.58 per common share and our quarterly distribution of $0.34 per common share exceeding our quarterly net investment income of $0.22 per common share.
Previous wording
For the quarter ended June 30, 2025, total investment income increased to $10.5 million from $10.3 million in the prior quarter, primarily due to an increase in non-recurring fee income of $0.1 million. See “—Results of Operations” for additional information.
Current wording
For the quarter ended September 30, 2025, total investment income increased from $10.5 million in the prior quarter to $10.6 million, primarily due to non-recurring interest and dividend income. See “—Results of Operations” for additional information.
Previous wording
For the quarter ended June 30, 2025, we recognized a net loss on investments of $12.9 million due to net unrealized depreciation, net of taxes, of $8.7 million and a net realized loss of $4.2 million. For the quarter ended June 30, 2025, our net unrealized depreciation, net of taxes, of $8.7 million was primarily attributable to net unrealized depreciation of $7.8 million on our common equity investment in Pfanstiehl Holdings, Inc. For the quarter ended June 30, 2025, our net realized loss of $4.2 million was primarily due to a net realized loss of $4.0 million recognized upon the sale of certain Structured Finance Securities, which had been primarily recognized in prior periods. As of June 30, 2025, we had non-accrual loans with an aggregate fair value of $15.2 million, or 4.0% of our total investments at fair value. See “—Portfolio Composition and Investment Activity” for additional information.
Current wording
For the quarter ended September 30, 2025, we recognized a net loss on investments of $7.8 million due to a net realized loss of $4.6 million and net unrealized depreciation, net of taxes, of $3.1 million. For the quarter ended September 30, 2025, our net realized loss of $4.6 million was primarily due to a net realized loss of $3.4 million related to the sale of a debt investment, resulting in a current quarter impact to our NAV of $1.1 million. For the quarter ended September 30, 2025, our net unrealized depreciation of $3.1 million, net of taxes, was primarily attributable to net unrealized depreciation of $4.5 million on our common equity investment in Pfanstiehl Holdings, Inc. As of September 30, 2025, we had non-accrual loans with an aggregate fair value of $23.1 million, or 6.2% of our total investments at fair value. See “—Portfolio Composition and Investment Activity” for additional information.
Previous wording
As of June 30, 2025, our asset coverage ratio of 160% exceeded the minimum asset coverage requirement of 150% under the 1940 Act, and we remained in compliance with all applicable covenants under our outstanding debt facilities. As of June 30, 2025, we had unused commitments of $25.0 million under our Banc of California Credit Facility and $86.6 million under our BNP Facility, each of which is subject to a borrowing base and other covenants. As of June 30, 2025, we had unfunded commitments of $16.1 million to ten portfolio companies. See “—Liquidity and Capital Resources” for additional information.
Current wording
As of September 30, 2025, our asset coverage ratio of 157% exceeded the minimum asset coverage requirement of 150% under the 1940 Act, and we remained in compliance with all applicable covenants under our Banc of California Credit Facility and the Unsecured Notes. As of September 30, 2025, we had an unused commitment of $25.0 million under our Banc of California Credit Facility, subject to the terms of the borrowing base and other covenants. As of September 30, 2025, we had unfunded commitments of $18.3 million to 11 portfolio companies. See “—Liquidity and Capital Resources” for additional information.
Previous wording
On July 29, 2025, the Board declared a distribution of $0.34 per share for the third quarter of 2025, payable on September 30, 2025 to stockholders of record as of September 19, 2025.
Current wording
On October 28, 2025, the Board declared a distribution of $0.17 per share for the fourth quarter of 2025, payable on December 31, 2025 to stockholders of record as of December 19, 2025.
Previous wording
As of June 30, 2025, the fair value of our debt investment portfolio totaled $211.3 million in 35 portfolio companies, of which approximately 85% and 15% were first lien and second lien debt investments, respectively. We also had equity investments in 15 portfolio companies with a fair value of approximately $98.9 million and 15 investments in Structured Finance Securities with a fair value of $72.6 million. As of June 30, 2025, we had unfunded commitments of $16.1 million to ten portfolio companies. Set forth in the tables and charts below is selected information with respect to our portfolio as of June 30, 2025 and December 31, 2024.
Current wording
As of September 30, 2025, the fair value of our debt investment portfolio totaled $205.6 million in 33 portfolio companies, of which approximately 88% and 12% were first lien and second lien debt investments, respectively. We also had equity investments in 16 portfolio companies with a fair value of approximately $98.4 million and 14 investments in Structured Finance Securities with a fair value of $66.2 million. As of September 30, 2025, we had unfunded commitments of $18.3 million to 11 portfolio companies. Set forth in the tables and charts below is selected information with respect to our portfolio as of September 30, 2025 and December 31, 2024.
Previous wording
As of June 30, 2025, our common equity investment in Pfanstiehl Holdings, Inc., a global manufacturer of high-purity pharmaceutical ingredients, accounted for 21.7% and 56.8% of our total portfolio at fair value and our total net assets, respectively. The value of this investment is substantially comprised of unrealized appreciation of $82.8 million. The valuation’s unobservable inputs incorporate discounts for the minority-interest and illiquid nature of the security; however, the valuation, in accordance with fair value concepts, does not directly factor in inputs related to a potential forced sale or non-orderly transaction that could be executed in the future, and that may be specific to the entity’s objectives, and are not representative of market-participant assumptions that would otherwise be utilized in an orderly transaction.
Current wording
As of September 30, 2025, our common equity investment in Pfanstiehl Holdings, Inc., a global manufacturer of high-purity pharmaceutical ingredients, accounted for 21.2% and 57.6% of our total portfolio at fair value and our total net assets, respectively. The value of this investment is substantially comprised of unrealized appreciation of $78.2 million. The valuation’s unobservable inputs incorporate discounts for the minority-interest and illiquid nature of the security; however, the valuation, in accordance with fair value concepts, does not directly factor in inputs related to a potential forced sale or non-orderly transaction that could be executed in the future, and that may be specific to the entity’s objectives, and are not representative of market-participant assumptions that would otherwise be utilized in an orderly transaction.
Previous wording
As of June 30, 2025, approximately 4.6% and 12.1% of our total portfolio at fair value and net assets, respectively, were comprised of Structured Finance Securities managed by a single adviser.
Current wording
As of September 30, 2025, approximately 4.0% and 10.9% of our total portfolio at fair value and net assets, respectively, were comprised of Structured Finance Securities managed by a single adviser.
Previous wording
For the three months ended June 30, 2025, the weighted-average performing income yield on interest-bearing investments increased to 13.6% from 13.4% during the prior quarter, primarily due to a 21 basis point increase in earned yields on our debt investments. As of June 30, 2025, 90% of our total loan portfolio, at fair value, consisted of variable rate investments, generally indexed to SOFR. See additional information under “Item 3. Quantitative and Qualitative Disclosures About Market Risk”.
Current wording
For the three months ended September 30, 2025, the weighted-average performing income yield on interest-bearing investments decreased to 13.3% from 13.6% during the prior quarter. This decrease is primarily attributable to a 72 basis point decrease in the performing income yield on our debt investments, which was primarily due to the net impact of non-accrual activity during the quarter. As of September 30, 2025, 89% of our total loan portfolio, at fair value, consisted of variable rate investments, generally indexed to SOFR. See additional information under “Item 3. Quantitative and Qualitative Disclosures About Market Risk”.
Previous wording
(1) As of June 30, 2025 and December 31, 2024, first lien debt investments include unitranche investments (which are loans that combine both senior and subordinated debt, in a first lien position) with an amortized cost and fair value of $134.5 million and $125.5 million, respectively, and $128.1 million and $119.2 million, respectively.
Current wording
(1) As of September 30, 2025 and December 31, 2024, first lien debt investments include unitranche investments (which are loans that combine both senior and subordinated debt, in a first lien position) with an amortized cost and fair value of $139.1 million and $128.7 million, respectively, and $128.1 million and $119.2 million, respectively.
Previous wording
As of June 30, 2025, 100% of our loan portfolio and 55% of our total portfolio consisted of first lien and second lien loans, based on fair value.
Current wording
As of September 30, 2025, 100% of our loan portfolio and 56% of our total portfolio consisted of first lien and second lien loans, based on fair value.
Previous wording
As of June 30, 2025, the three largest industries of our Portfolio Company Investments by fair value, were: (1) Manufacturing (35.3%); (2) Health Care and Social Assistance (20.3%); and (3) Administrative and Support and Waste Management and Remediation Services (6.8%), totaling an aggregate of approximately 62.4% of our Portfolio Company Investment portfolio. For a full summary of our investment portfolio by industry, see “Item 1—Financial Statements—Note 4.”
Current wording
As of September 30, 2025, the three largest industries of our Portfolio Company Investments by fair value, were: (1) Manufacturing (32.6%); (2) Health Care and Social Assistance (20.8%); and (3) Real Estate and Rental and Leasing (7.3%), totaling an aggregate of approximately 60.7% of our Portfolio Company Investment portfolio. For a full summary of our investment portfolio by industry, see “Item 1—Financial Statements—Note 4.”
Previous wording
Non-performing Structured Finance Securities are securities that have not been optionally redeemed and have an effective yield of 0.0%, as remaining residual distributions are anticipated to be recognized as a return of capital. As of June 30, 2025, the amortized cost and fair value ofnon-performing Structured Finance Securities were$2.4 million and $0.5 million, respectively.
Current wording
Non-performing Structured Finance Securities are securities that have not been optionally redeemed and have an effective yield of 0.0%, as remaining residual distributions are anticipated to be recognized as a return of capital. As of September 30, 2025, the amortized cost and fair value ofnon-performing Structured Finance Securities were$2.4 million and $0.4 million, respectively.
Previous wording
During the six months ended June 30, 2025, we sold Structured Finance Securities for aggregate net proceeds of $8.5 million, resulting in an aggregate net realized loss of $5.7 million, of which $1.2 million was recognized during the six months ended June 30, 2025.
Current wording
During the nine months ended September 30, 2025, we decreased our exposure to Structured Finance Securities by selling certain securities for aggregate net proceeds of $12.0 million, resulting in an aggregate net realized loss of $6.9 million.
Previous wording
The following is a summary of our investment activity for the three months ended June 30, 2025 and March 31, 2025, and the six months ended June 30, 2025 and 2024 (dollar amounts in thousands):
Current wording
The following is a summary of our investment activity for the three months ended September 30, 2025 and June 30, 2025, and the nine months ended September 30, 2025 and 2024 (dollar amounts in thousands):
Previous wording
Management reviews, for placement on non-accrual status, all loans and CLO mezzanine debt investments that become past due on principal and interest, and/or when there is reasonable doubt that principal or interest will be collected. When a loan is placed on non-accrual status, accrued and unpaid cash interest is reversed. Additionally, Net Loan Fees are no longer recognized as of the date the loan is placed on non-accrual status. Depending upon management’s judgment, interest payments subsequently received on non-accrual investments may be recognized as interest income or applied as a reduction to amortized cost. Interest accruals and Net Loan Fee amortization are resumed on non-accrual investments only when they are brought current with respect to principal and interest payments and, in the judgment of management, it is probable that the Company will collect all principal and interest from the investment.
Current wording
Management reviews, for placement on non-accrual status, all loans and CLO mezzanine debt investments that become past due on principal and interest, and/or when there is reasonable doubt that principal or interest will be collected. When a loan is placed on non-accrual status, accrued and unpaid cash interest is reversed. Additionally, Net Loan Fees are no longer recognized as of the date the loan is placed on non-accrual status. Depending upon management’s judgment, interest payments subsequently received on non-accrual investments may be recognized as interest income or applied as a reduction to amortized cost. Interest accruals and Net Loan Fee amortization are resumed on non-accrual investments only when they are brought current with respect to principal and interest payments or until a restructuring occurs, and, in the judgment of management, it is probable that the Company will collect all principal and interest from the investment.
Previous wording
Comparison of the three months ended June 30, 2025 and March 31, 2025 and comparison of the six months ended June 30, 2025 and 2024
Current wording
Comparison of the three months ended September 30, 2025 and June 30, 2025 and comparison of the nine months ended September 30, 2025 and 2024
Previous wording
Consolidated operating results for the three months ended June 30, 2025 and March 31, 2025 and the six months ended June 30, 2025 and 2024 are as follows (in thousands):
Current wording
Consolidated operating results for the three months ended September 30, 2025 and June 30, 2025 and the nine months ended September 30, 2025 and 2024 are as follows (in thousands):
Previous wording
For the three months ended June 30, 2025, total investment income increased to $10.5 million from $10.3 million in the prior quarter, primarily due to an increase in non-recurring fee income of $0.1 million.
Current wording
For the three months ended September 30, 2025, total investment income increased from $10.5 million in the prior quarter to $10.6 million, primarily due to an increase in non-recurring income (cash dividends, acceleration of Net Loan Fee amortization and other interest income), partially offset by a decrease in cash interest income.
Previous wording
Fee income is primarily comprised of unused fees, prepayment fees and syndication fees that generally result from periodic transactions rather than from holding portfolio investments, and are considered non-recurring. We receive syndication fees on investments where OFS Advisor sources, structures, and arranges the lending group. For the three months ended June 30, 2025, we recognized syndication fee income of $0.1 million, compared to no syndication fees for the three months ended March 31, 2025.
Current wording
Fee income is primarily comprised of unused fees, prepayment fees and syndication fees that generally result from periodic transactions rather than from holding portfolio investments, and are considered non-recurring. We receive syndication fees on investments where OFS Advisor sources, structures, and arranges the lending group. For the three months ended September 30, 2025 and June 30, 2025, we recognized syndication fee income of $0.1 million and $0.1 million, respectively.
Previous wording
Total investment income for the six months ended June 30, 2025 decreased $4.6 million compared to the corresponding period in the prior year, primarily due to decreases in total dividend income of $2.4 million and total interest income of $2.3 million.
Current wording
Total investment income for the nine months ended September 30, 2025 decreased $5.0 million compared to the corresponding period in the prior year, primarily due to decreases in total interest income of $3.3 million and total dividend income of $1.8 million.
Previous wording
Operating expenses for the three months ended June 30, 2025 and March 31, 2025, and the six months ended June 30, 2025 and 2024 are presented below (in thousands):
Current wording
Operating expenses for the three months ended September 30, 2025 and June 30, 2025, and the nine months ended September 30, 2025 and 2024 are presented below (in thousands):
Previous wording
Income Incentive Fees for the three months ended June 30, 2025 increased $0.5 million compared to the prior quarter, primarily due to an increase in net investment income return on net assets in the current quarter.
Current wording
Income Incentive Fees for the three months ended September 30, 2025 decreased $0.2 million compared to the prior quarter, primarily due to a decrease in net investment income return on net assets in the current quarter.
Previous wording
Interest expense for the six months ended June 30, 2025 decreased $1.0 million compared to the corresponding period in the prior year, primarily due to a decrease in the average outstanding debt balance from $273.1 million during the corresponding period in the prior year to $248.5 million during the current year.
Current wording
Interest expense for the nine months ended September 30, 2025 decreased $0.5 million compared to the corresponding period in the prior year, primarily due to a decrease in the average outstanding debt balance from $265.0 million during the corresponding period in the prior year to $255.8 million during the current year.
Previous wording
Net loss on investments, inclusive of realized and unrealized gains (losses), by investment type for the three months ended June 30, 2025 and March 31, 2025, and the six months ended June 30, 2025 and 2024 were as follows (in thousands):
Current wording
Net loss on investments, inclusive of realized and unrealized gains (losses), and net of current and deferred income taxes, by investment type for the three months ended September 30, 2025 and June 30, 2025, and the nine months ended September 30, 2025 and 2024 were as follows (in thousands):
Previous wording
Net gain (loss) on investments for the six months ended June 30, 2025 and 2024
Current wording
Net gain (loss) on investments for the nine months ended September 30, 2025 and 2024
Previous wording
For the six months ended June 30, 2025, we recognized a net loss on investments of $23.7 million, comprised of net unrealized depreciation of $17.1 million and net realized losses of $6.8 million. The net unrealized depreciation during the period was primarily due to depreciation of $6.3 million on our common equity investment in Pfanstiehl Holdings, Inc. and $5.6 million on our non-accrual debt investments.
Current wording
For the nine months ended September 30, 2025, we recognized a net loss on investments of $31.4 million, comprised of net unrealized depreciation of $20.0 million and net realized losses of $11.4 million. The net unrealized depreciation during the period was primarily due to depreciation of $10.8 million on our common equity investment in Pfanstiehl Holdings, Inc. and $4.0 million on our non-accrual debt investments. The net realized loss of $11.4 million during the period was primarily due to a net realized loss of $6.9 million on our Structured Finance Securities.
Previous wording
Issuance of Unsecured Notes Due July 2028
Current wording
During the three months ended September 30, 2025, we redeemed $94.0 million of the aggregate $125.0 million of Unsecured Notes Due February 2026, and, as a result, we recognized a loss on extinguishment of debt of $0.3 million related to the acceleration of unamortized deferred debt issuance costs and make-whole premium payments on the redeemed notes.
Previous wording
As of June 30, 2025, we held cash and cash equivalents of $10.2 million, which included $2.7 million held by OFSCC-FS. Distributions from OFSCC-FS to the Parent are restricted by the terms and conditions of the BNP Facility. During the six months ended June 30, 2025, the Parent received $4.9 million in cash distributions from OFSCC-FS.
Current wording
As of September 30, 2025, we held cash and cash equivalents of $5.0 million, which included $2.5 million held by OFSCC-FS. Distributions from OFSCC-FS to the Parent are restricted by the terms and conditions of the BNP Facility. During the nine months ended September 30, 2025, the Parent received $7.9 million in cash distributions from OFSCC-FS.
Previous wording
On June 18, 2025, OFSCC-FS executed an amendment to the BNP facility to extend the reinvestment period of the BNP Facility from June 20, 2025 to August 31, 2025, upon which the ability to access the unused commitment of the facility terminates. The BNP Facility is scheduled to mature on June 20, 2027. If we are unable to amend the BNP Facility to extend the reinvestment period or enter into a new credit facility, our short-term liquidity will be significantly reduced.
Current wording
The reinvestment period of the BNP Facility expired on September 30, 2025, after which the ability to access the unused commitment of the facility terminated. If we are unable to enter into a new credit facility, our short-term liquidity will be constrained. The BNP Facility is scheduled to mature on June 20, 2027.
Previous wording
As of June 30, 2025, the aggregate amount outstanding of the senior securities issued by us was $243.4 million, for which our asset coverage was 160%, exceeding our minimum asset coverage requirement of 150% under the 1940 Act. The asset coverage ratio for a class of senior securities representing indebtedness is calculated as our consolidated total assets, less all liabilities and indebtedness not represented by senior securities, divided by total senior securities representing indebtedness.
Current wording
As of September 30, 2025, the aggregate amount outstanding of the senior securities issued by us was $239.2 million, for which our asset coverage was 157%, exceeding our minimum asset coverage requirement of 150% under the 1940 Act. The asset coverage ratio for a class of senior securities representing indebtedness is calculated as our consolidated total assets, less all liabilities and indebtedness not represented by senior securities, divided by total senior securities representing indebtedness.
Previous wording
For the six months ended June 30, 2025, cash from net investment income of $6.0 million remained stable compared to the six months ended June 30, 2024.
Current wording
For the nine months ended September 30, 2025, cash from net investment income decreased by $1.9 million compared to the nine months ended September 30, 2024.
Previous wording
During the six months ended June 30, 2025, net repayments and sales of portfolio investments of $12.2 million were primarily due to $36.9 million of cash we received from principal repayments, sales on our portfolio investments and the proceeds from distributions received from Structured Finance Securities, net of accretion of interest income on Structured Finance Securities, partially offset by $24.7 million of cash we used to purchase portfolio investments. During the six months ended June 30, 2024, net repayments and sales of portfolio investments of $16.5 million were primarily due to $28.8 million of cash we received from principal repayments, sales on our portfolio investments and the net proceeds from distributions received from Structured Finance Securities and accretion of interest income on Structured Finance Securities, partially offset by $12.3 million of cash we used to purchase portfolio investments. See “—Portfolio Composition and Investment Activity—Investment Activity.”
Current wording
During the nine months ended September 30, 2025, net repayments and sales of portfolio investments of $17.3 million were primarily due to $60.1 million of cash we received from principal repayments, sales on our portfolio investments and the proceeds from distributions received from Structured Finance Securities, net of accretion of interest income on Structured Finance Securities, partially offset by $42.8 million of cash we used to purchase portfolio investments. During the nine months ended September 30, 2024, net repayments and sales of portfolio investments of $33.1 million were primarily due to $79.2 million of cash we received from principal repayments, sales on our portfolio investments and the net proceeds from distributions received from Structured Finance Securities and accretion of interest income on Structured Finance Securities, partially offset by $46.1 million of cash we used to purchase portfolio investments. See “—Portfolio Composition and Investment Activity—Investment Activity.”
Previous wording
As of June 30, 2025, approximately 23% of our outstanding debt matures in more than two years and 74% of our outstanding debt carries fixed interest rates and is unsecured. The issuance of $69.0 million of our Unsecured Notes Due July 2028 on July 23, 2025 extended our debt maturities.
Current wording
As of September 30, 2025, we had $239.2 million of outstanding debt with a weighted-average effective interest rate of 7.03%. As of September 30, 2025, approximately 62% of our outstanding debt matures in more than two years and 75% of our outstanding debt is unsecured.
Previous wording
We are party to the BLA with Banc of California, as lender, to provide us with a senior secured revolving credit facility, or the Banc of California Credit Facility, which is available for general corporate purposes including investment funding and is scheduled to mature on February 28, 2026. The Banc of California Credit Facility currently bears interest at a variable Prime Rate plus a 0.25% margin, with a 5.00% floor, and an annual commitment fee of 0.50% based on the maximum principal amount of the facility. As of June 30, 2025, the effective interest rate on the Banc of California Credit Facility was 8.25%. The maximum availability of the Banc of California Credit Facility is equal to 50% of the aggregate outstanding principal amount of eligible loans included in the borrowing base, which typically excludes Structured Finance Securities and as otherwise specified in the BLA. The Banc of California Credit Facility is guaranteed by OFSCC-MB and secured by all of our and OFSCC-MB’s current and future assets, excluding assets held by OFSCC-FS and SBIC I LP and our partnership interests in SBIC I LP.
Current wording
We are party to the BLA with Banc of California, as lender, to provide us with a senior secured revolving credit facility, or the Banc of California Credit Facility, which is available for general corporate purposes including investment funding and is scheduled to mature on February 28, 2026. The Banc of California Credit Facility currently bears interest at a variable Prime Rate plus a 0.25% margin, with a 5.00% floor, and an annual commitment fee of 0.50% based on the maximum principal amount of the facility. As of September 30, 2025, the effective interest rate on the Banc of California Credit Facility was 7.75%. The maximum availability of the Banc of California Credit Facility is equal to 50% of the aggregate outstanding principal amount of eligible loans included in the borrowing base, which typically excludes Structured Finance Securities and non-performing loans, and as otherwise specified in the BLA. The Banc of California Credit Facility is guaranteed by OFSCC-MB and secured by all of our and OFSCC-MB’s current and future assets, excluding assets held by OFSCC-FS and SBIC I LP and our partnership interests in SBIC I LP.
Previous wording
As of June 30, 2025, we hadno outstanding indebtedness and an unused commitment of $25.0 million under the Banc of California Credit Facility, subject to a borrowing base and other covenants.
Current wording
As of September 30, 2025, we hadno outstanding indebtedness and an unused commitment of $25.0 million under the Banc of California Credit Facility, subject to the terms of the borrowing base and other covenants.
Previous wording
In order to, among other things, reduce future cash interest payments, as well as future amounts due at maturity or upon redemption, we may, from time to time, purchase the Unsecured Notes for cash in open market purchases and/or privately negotiated transactions. We will evaluate any such transactions in light of then-existing market conditions, taking into account our current liquidity, prospects for future access to capital, contractual restrictions and other factors. The amounts involved in any such transactions, individually or in the aggregate, may be material. During the six months ended June 30, 2025, no outstanding Unsecured Notes were repurchased.
Current wording
In order to, among other things, reduce future cash interest payments, as well as future amounts due at maturity or upon redemption, we may, from time to time, purchase the Unsecured Notes for cash in open market purchases and/or privately negotiated transactions. We will evaluate any such transactions in light of then-existing market conditions, taking into account our current liquidity, prospects for future access to capital, contractual restrictions and other factors. The amounts involved in any such transactions, individually or in the aggregate, may be material. During the nine months ended September 30, 2025, no outstanding Unsecured Notes were repurchased.
Previous wording
Redemption of Unsecured Notes Due 2026
Current wording
Issuance and Redemption of Unsecured Notes
Previous wording
On July 23, 2025, we closed the public offering of $69.0 million aggregate principal amount of our Unsecured Notes Due July 2028, which included $9.0 million of aggregate principal amount related to the underwriters’ option to cover overallotments. The estimated net proceeds to us from the Unsecured Notes Due July 2028, after deducting underwriting fees of $1.4 million and estimated offering expenses of $0.3 million, was approximately $67.3 million. The Unsecured Notes Due July 2028 bear interest at a stated rate of 7.50% and will mature on July 31, 2028. We may redeem the Unsecured Notes Due July 2028 in whole or in part at any time, or from time to time, on or after July 31, 2026.
Current wording
On July 23, 2025, we closed the public offering of $69.0 million aggregate principal amount of our Unsecured Notes Due July 2028, which included $9.0 million of aggregate principal amount related to the underwriters’ option to cover overallotments. The net proceeds to us from the Unsecured Notes Due July 2028, after deducting underwriting fees of $1.4 million and offering expenses of $0.3 million, was $67.3 million. The Unsecured Notes Due July 2028 bear interest at a stated rate of 7.50% and will mature on July 31, 2028. We may redeem the Unsecured Notes Due July 2028 in whole or in part at any time, or from time to time, on or after July 31, 2026.
Previous wording
On June 18, 2025, OFSCC-FS executed an amendment to the BNP facility to extend the reinvestment period under the BNP Facility from June 20, 2025 to August 31, 2025.
Current wording
On June 20, 2019, OFSCC-FS entered into the BNP Facility, which originally provided for borrowings in an aggregate principal amount up to $150.0 million and was later reduced to $80.0 million through its reinvestment period. On June 18, 2025, OFSCC-FS executed an amendment to the BNP Facility to extend the reinvestment period under the facility from June 20, 2025 to August 31, 2025. On August 25, 2025, OFSCC-FS executed an amendment to the BNP Facility to extend the reinvestment period under the facility from August 31, 2025 to September 30, 2025. The reinvestment period (and the ability to access the undrawn facility commitment and make additional investments) expired on September 30, 2025. In connection with the expiration of the reinvestment period, and effective September 30, 2025, we are no longer subject to an unused commitment fee on the facility.
Showing the first 40 of 50 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Income Incentive Fees for the nine months ended September 30, 2025 decreased $1.4 million compared to the corresponding period in the prior year, primarily due to a decrease in net investment income return on net assets during the current year.
Current report — wording carried from elsewhere
Unsecured Note Due August 2029 bears interest at a stated rate of 8.00% and will mature on August 8, 2029. We may redeem the Unsecured Note Due August 2029 in whole or in part at any time.
Current report — wording carried from elsewhere
Effective September 30, 2025, the reinvestment period of the BNP Facility expired, after which the ability to access the unused commitment of the facility terminated. The BNP Facility is scheduled to mature on June 20, 2027. If we are unable to enter into a new credit facility, our short-term liquidity will be constrained.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
As of June 30, 2025, we had $243.4 million of outstanding debt with a weighted-average effective interest rate of 6.13%.
Previous report — wording carried elsewhere
(3) We may redeem the Unsecured Notes Due February 2026 in whole or in part at any time, or from time to time. We may be required to pay a “make-whole” premium on redemptions dated prior to November 10, 2025. We may redeem the Unsecured Notes Due October 2028 in whole or in part at any time.