OFS Capital Corp
For the period ended Dec 31, 2025. Filed Mar 3, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 3, 2026
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-K
Period ended 2024-12-31; filed 2025-03-04.
0001487918-25-000009
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-03.
0001487918-26-000021
Item 7. 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 233 previous paragraphs and 251 current paragraphs.
137 unchanged; 58 reworded; 48 added; 35 removed; 3 previous and 8 current paragraphs rearranged.
Tables are not compared: 25 previous and 24 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 (48)
Current report
In addition, we have submitted a new application for exemptive relief that, if granted, would supersede our existing Order and permit us to co-invest pursuant to a different set of conditions than those in our existing Order. However, there is no guarantee that the SEC will grant such application.
Current report
For the year ended December 31, 2025, our weighted-average performing income yield increased 0.2% compared to the prior year, primarily due to an increase in the effective yield of our CLO subordinated note securities, partially offset by a decrease in the income yield on our debt investments as a result of lower SOFR rates driven by Federal Reserve rate reductions.
Current report
During the year ended December 31, 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 December 31, 2025, these restructured investments had an amortized cost of and fair value of $4.5 million and $1.5 million, respectively. In connection with the completion of the restructuring transaction, we also invested $0.3 million in a new first lien facility.
Current report
Total interest income decreased $4.9 million during the year ended December 31, 2025 compared to the prior year, primarily due to a decrease in cash interest income, partially offset by an increase in accretion of interest income on CLO subordinated notes. The decrease in cash interest income compared to the prior year was primarily due to a smaller average investment portfolio, at cost, and the impact of lower SOFR rates driven by the U.S. Federal Reserve rate cuts.
Current report
During the year ended December 31, 2025, dividend income decreased $2.2 million compared to the prior year. The decrease in cash dividends was primarily due to non-recurring dividends of $1.9 million recognized during the prior year related to the sale of a preferred equity investment.
Current report
Interest expense for the year ended December 31, 2025 decreased $0.1 million compared to the prior year, primarily due to a decrease of $9.1 million in our average outstanding debt balances compared to the prior year, partially offset by an increase in the weighted-average effective interest rate of our outstanding debt related to the partial redemption of the 4.75% Unsecured Notes Due February 2026 and the issuance of $69.0 million of 7.50% Unsecured Notes Due July 2028 and a $25.0 million 8.00% Unsecured Note Due August 2029.
Current report
The Income Incentive Fee for the year ended December 31, 2025 decreased $2.4 million compared to the prior year, primarily due to a decrease in net investment income.
Current report
During the year ended December 31, 2025, our portfolio experienced net losses of $45.0 million, comprised of net unrealized depreciation of $32.8 million, net of deferred taxes, and net realized losses of $12.2 million, net of taxes.
Current report
During the year ended December 31, 2025, our net unrealized depreciation of $32.8 million, net of deferred taxes, was primarily due to net unrealized depreciation of $23.0 million on our equity investments and net unrealized depreciation of $8.9 million on our current non-accrual loans.
Current report
During the year ended December 31, 2025, we recognized net realized losses of $12.2 million, primarily due to net realized losses of $6.9 million related to the sale of Structured Finance Securities and $4.8 million related to the sale of debt investments.
Current report
During the year ended December 31, 2025, we redeemed an aggregate $109.0 million of the $125.0 million of Unsecured Notes Due February 2026, and, as a result, we recognized a loss on extinguishment of debt of $0.4 million related to the acceleration of unamortized deferred debt issuance costs and make-whole premium payments on the redeemed notes.
Current report
During the three months ended December 31, 2025, total investment income decreased $1.2 million compared to the three months ended September 30, 2025, primarily due to a decrease in non-recurring income (cash dividends, other interest income and syndication fees).
Current report
During the three months ended December 31, 2025, PIK interest income decreased $0.3 million, primarily due to the placement of a second lien debt investment on non-accrual status.
Current report
During the three months ended December 31, 2025, interest expense decreased $0.3 million primarily due to the prior quarter non-recurring timing delay between the issuance dates and redemption dates of the Unsecured Notes that caused a one-time incurrence of additional interest expense in the prior quarter.
Current report
During the three months ended December 31, 2025, our portfolio experienced net losses of $13.5 million, primarily due to net unrealized depreciation of $8.3 million on our current non-accrual debt investments and $3.4 million on our Structured Finance Securities.
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
For the three months ended December 31, 2025, the weighted average performing income yield on interest-bearing investments increased primarily due to non-recurring Net Loan Fee acceleration related to the repayment of a CLO mezzanine debt security and an increase in the effective yield of our CLO subordinate note securities.
Current report
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. On February 18, 2026, in connection with the closing of the Natixis Facility, OFSCC-FS repaid in full all outstanding obligations due, and terminated all commitments, under the BNP Facility. All liens securing the BNP Facility were released upon such repayment.
Current report
On February 18, 2026, OFSCC-FS entered into the Natixis Facility, which provides for borrowings in an aggregate principal amount up to $80.0 million. Borrowings under the Natixis Facility will bear interest at a rate based on SOFR for the applicable one- or three-month interest period, plus an applicable spread. Interest is payable quarterly in arrears. Any amounts borrowed under the Natixis Facility will mature, and all accrued and unpaid interest thereunder will be due and payable, on the earlier of: (i) February 18, 2031; or (ii) upon the occurrence of certain other events that result in accelerated maturity under the Natixis Facility.
Current report
As of December 31, 2025, we had unfunded commitments of $13.2 million to fund outstanding commitments to portfolio companies.
Current report
(2) For the year ended December 31, 2025, we estimated distributions paid to stockholders were comprised of ordinary income of 32.8% and a tax return of capital of 67.2%. The determination of the tax attributes of our distributions is made annually as of the end of our fiscal year based upon our estimated ICTI and distributions paid for the full year. Each year, if required, a statement on Form 1099-DIV identifying the source of the distribution is mailed to our stockholders.
Current report
During the year ended December 31, 2025, cash and cash equivalents decreased $2.7 million. During the year ended December 31, 2025, net cash provided by operating activities of $43.6 million was primarily driven by the repayment and sale of portfolio investments, which were partially used in connection with the net repayments of outstanding debt of $27.9 million.
Current report
The reinvestment period of the BNP Facility expired on September 30, 2025, after which the ability to access the unused commitment of the facility and make additional investments under the facility terminated. On February 18, 2026, in connection with the closing of the Natixis Facility, OFSCC-FS repaid in full all outstanding obligations due, and terminated all commitments, under the BNP Facility. All liens securing the BNP Facility were released upon such repayment.
Current report
(1) On February 18, 2026, in connection with the closing of the Natixis Facility, OFSCC-FS repaid in full all outstanding obligations due.
Current report
(2) As of December 31, 2025, the unused commitment under the BNP Facility was $0, following the expiration of the reinvestment period on September 30, 2025.
Current report
Unsecured Notes. At December 31, 2025 and 2024, the aggregate principal debt of our Unsecured Notes totaled $165.0 million and $180.0 million, respectively.
Current report
Issuance and Redemption of Unsecured Notes During the Year Ended December 31, 2025
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 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
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 December 30, 2025, we redeemed $15.0 million of the issued and outstanding Unsecured Notes Due February 2026, plus accrued interest.
Current report
As of December 31, 2025, we had $16.0 million of outstanding Unsecured Notes Due February 2026, which were redeemed in full on February 9, 2026. See “—Recent Developments” for additional information.
Current report
(2) On February 9, 2026, we redeemed in full the $16.0 million in aggregate principal amount of our Unsecured Notes Due February 2026. See “—Recent Developments” for additional information.
Current report
(2) On February 18, 2026, in connection with the closing of the Natixis Facility, OFSCC-FS repaid in full all outstanding obligations due, and terminated all commitments, under the BNP Facility. The maturity date of the Natixis Facility is February 18, 2031, subject to earlier termination under certain conditions set forth in the Natixis Facility.
Current report
(3) On February 9, 2026, we redeemed in full the $16.0 million in aggregate principal amount of our Unsecured Notes Due February 2026. See “—Recent Developments” for additional information.
Current report
Contractual Obligations
Current report
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. On February 18, 2026, in connection with the closing of the Natixis Facility, OFSCC-FS repaid in full all outstanding obligations due, and terminated all commitments, under the BNP Facility. All liens securing the BNP Facility were released upon such repayment.
Current report
Following the extension of our Banc of California Credit Facility executed in January 2026, and the refinancing of our BNP Facility executed in February 2026, we do not have any debt maturities until February 2028.
Current report
As of December 31, 2025, we had $16.0 million of outstanding Unsecured Notes Due February 2026 which were fully redeemed on February 9, 2026.
Current report
Off-Balance Sheet Arrangements
Showing the first 40 of 48 passages. Open the source sections for the rest.
Removed paragraphs (35)
Previous report
•the belief that the deployment of capital into Structured Finance Securities will improve our performing income yield; and
Previous report
In addition, we may file an application for an amendment to our existing Order to permit us to co-invest in our existing portfolio companies with certain affiliates that are private funds even if such other funds had not previously invested in such existing portfolio companies, subject to certain conditions. However, if filed, there is no guarantee that such application will be granted.
Previous report
For the year ended December 31, 2024, the decrease in our weighted-average performing income yield was primarily due to a decrease in the effective yield of our Structured Finance Security portfolio. During the third and fourth quarter of 2024, we began rotating our Structured Finance Security portfolio, by deploying net capital of $0.6 million into higher-yielding positions with longer average reinvestment periods remaining, which we believe will improve our performing income yield.
Previous report
During the year ended December 31, 2024, we wrote off our preferred and common equity investments in Master Cutlery, LLC, resulting in a net realized loss of $3.5 million. The net realized loss of $3.5 million was fully recognized in prior fiscal years and did not impact our NAV during the current year.
Previous report
During the year ended December 31, 2024, our first lien debt investment in GoTo Group underwent a restructuring, whereby our first lien debt investment was exchanged at a price equal to 77% of par for new first lien debt investments in the company. We recognized a realized loss of $0.7 million on the debt restructure corresponding to the amount forgiven upon the exchange.
Previous report
During the year ended December 31, 2024, our first lien debt investment in Wellful Inc. underwent a restructuring, under which our investment was restructured at an effective price equal to approximately 83.5% of par for a combination of cash consideration and a new first lien debt investment in the company. We recognized a realized loss of $1.1 million on the debt restructure corresponding to the amount forgiven upon the restructuring.
Previous report
Total interest income increased $8.4 million during the year ended December 31, 2023 compared to the prior year, primarily due to an increase in cash interest income of $6.6 million. The increase in cash interest income was primarily due to elevated reference interest rates as our loan portfolio predominately consisted of floating rate loans throughout the year.
Previous report
During the year ended December 31, 2023, total PIK interest income increased $0.9 million compared to the prior year. The increase in PIK interest income primarily related to two credit agreement amendments that increased the contractual PIK interest or converted cash interest to PIK interest.
Previous report
During the year ended December 31, 2023, dividend income increased $0.4 million compared to the prior year, primarily due to an increase of $0.7 million in preferred equity PIK dividends.
Previous report
Interest expense increased by $2.5 million during the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to an increase in our weighted-average debt interest costs from 4.8% to 6.0%. The increase in our debt interest costs was primarily due to an increase in the cost of debt on our BNP Facility resulting from variable SOFR rate increases. The BNP Facility’s effective interest rate increased to 8.3% during the year ended December 31, 2023, from 4.4% during the year ended December 31, 2022.
Previous report
Base management fee expense decreased by $0.8 million during the year ended December 31, 2023, due to a decrease in our average total assets, primarily due to our average investment portfolio at fair value decreasing to $474.5 million during the year ended December 31, 2023 from $525.8 million during the year ended December 31, 2022. The decrease in the average investment portfolio at fair value during the year ended December 31, 2023 primarily related to net repayments on portfolio investments of $63.8 million and net losses on portfolio investments of $20.4 million, respectively.
Previous report
The Income Incentive Fee increased by $2.8 million during the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to an increase in our net interest margin of $6.0 million.
Previous report
During the year ended December 31, 2023, we did not incur a Capital Gains Fee as compared to 2022, when we fully reversed the Capital Gains Fee of $1.9 million that was accrued in 2021. The Capital Gains Fee previously accrued during the year ended December 31, 2021 was neither contractually due nor payable under the terms of the Investment Advisory Agreement.
Previous report
During the year ended December 31, 2023, professional fees, administration fees and other expenses remained stable compared to the prior year at $5.0 million.
Previous report
During the year ended December 31, 2022, our portfolio experienced net losses of $25.8 million, primarily related to unrealized depreciation of $23.0 million and $14.2 million on our debt investments and Structured Finance Securities, respectively, offset by unrealized appreciation of $13.1 million on our equity investments. The unrealized depreciation on our debt investments and Structured Finance Securities was primarily due to the widening of liquid credit market spreads. Company specific performance factors on a few non-accrual investments also contributed to the unrealized depreciation on our debt investments. Our common equity investment in Pfanstiehl Holdings, Inc. experienced unrealized gains of $19.7 million during the year ended December 31, 2022.
Previous report
Non-GAAP Financial Measure – Adjusted Net Investment Income
Previous report
On a supplemental basis, we disclose Adjusted NII (including on a per share basis), which is a financial measure calculated and presented on basis other than in accordance with GAAP. Adjusted NII represents net investment income, excluding the capital gains incentive fee, in periods in which such expense occurs. GAAP requires recognition of a capital gains incentive fee in our financial statements when aggregate net realized and unrealized capital gains, if any, on a cumulative basis is positive from the date of the election to be a BDC through the reporting date. Such fees are subject to further conditions specified in the Investment Advisory Agreement, principally related to the realization of such net gains, before OFS Advisor is entitled to payment, and such recognized fees are subject to the risk of reversal should unrealized gains diminish to become losses. Management believes that Adjusted NII is a useful indicator of operations exclusive of any net capital gains incentive fee, as net investment income does not include the net gains, realized or unrealized, associated with the capital gains incentive fee.
Previous report
Management believes Adjusted NII facilitates the analysis of our results of operations and provides greater transparency into the determination of incentive fees. Adjusted NII is not meant as a substitute for net investment income determined in accordance with GAAP and should be considered in the context of the entirety of our reported results of operations, financial position and cash flows determined in accordance with GAAP.
Previous report
The following table provides a reconciliation from net investment income (the most comparable GAAP measure) to Adjusted NII for the years ended December 31, 2024, 2023 and 2022 (dollar amounts in thousands, except per share data):
Previous report
During the year ended December 31, 2022, we reversed the previously accrued Capital Gains Fees of $1.9 million due to a reduction in net unrealized appreciation on the investment portfolio. Although these non-GAAP financial measures are intended to enhance investors’ understanding of our business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP.
Previous report
During the three months ended December 31, 2024, cash interest income decreased $0.8 million compared to the three months ended September 30, 2024, primarily due to a smaller average investment portfolio, at cost, and a reduction in reference interest rates as our loan portfolio predominately consisted of floating rate loans.
Previous report
During the three months ended December 31, 2024, dividend income increased $0.6 million, primarily due to a non-recurring cash dividend of $0.5 million from our common equity investment in Pfanstiehl Holdings, Inc.
Previous report
During the three months ended December 31, 2024, our portfolio experienced net gains of $21.4 million, primarily due to net unrealized appreciation of $15.6 million on our common equity investment in Pfanstiehl Holdings, Inc.
Previous report
For the three months ended September 30, 2024, we recognized a net loss on investments of $1.9 million, primarily comprised of aggregate net losses of $5.6 million on our loans and Structured Finance Securities, and partially offset by net gains of $3.7 million on our equity securities.
Previous report
For the three months ended December 31, 2024, the weighted average performing income yield on interest-bearing investments increased primarily due to the rotation of our Structured Finance Security portfolio into higher-yielding positions with longer average reinvestment periods remaining during the current and prior quarter.
Previous report
Prior to surrendering our SBIC license on April 17, 2024, our use of cash held by SBIC I LP was restricted by SBA regulation, including limitations on the amount of cash SBIC I LP could distribute to the Parent.
Previous report
During the year ended December 31, 2022, cash and cash equivalents decreased $28.1 million, primarily due to the use of $31.1 million in financing activities. Our net cash used by financing activities primarily related to the redemption of $19.0 million in SBA debentures and $15.4 million of distributions paid to stockholders, respectively.
Previous report
On June 24, 2022, OFSCC-FS amended the BNP Facility to, among other things: (i) extend the reinvestment period under the BNP Facility for three years from June 20, 2022 to June 20, 2025; (ii) extend the maturity date under the BNP Facility from June 20, 2024 to June 20, 2027; (iii) convert the benchmark interest rate from LIBOR to SOFR; (iv) increase the applicable margin by 0.40% on all classes of loans; and (v) increase the applicable margin floor from 1.925% to 2.65%.
Previous report
Unsecured Notes. At December 31, 2024 and 2023, the Unsecured Notes totaled $180.0 million in aggregate principal debt. During the years ended December 31, 2024 and 2023, we did not issue, redeem or repurchase any Unsecured Notes.
Previous report
(1) The weighted-average fixed cash interest rate on the Unsecured Notes as of December 31, 2024 was 4.81%.
Previous report
The reinvestment period of the BNP Facility ends on June 20, 2025, upon which the ability to access the unused commitment of the facility terminates. 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
Long-term contractual obligations, such as our BNP Facility that matures in 2027 and has $67.4 million outstanding at December 31, 2024, can be repaid by selling OFSCC-FS portfolio investments that have a fair value of $143.0 million at December 31, 2024. A portion of the OFSCC-FS portfolio includes Broadly Syndicated Loans in larger portfolio companies that generally can be sold over a relatively short period to generate cash. We cannot, however, be certain that this source of funds will be available and upon terms acceptable to us in sufficient amounts in the future. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize significantly less than its current fair value and incur significant realized losses on our invested capital.
Previous report
As of December 31, 2024, we had $180.0 million of outstanding Unsecured Notes, of which $125.0 million matures on February 10, 2026. The Unsecured Notes Due February 2026 can be repaid by issuing additional senior securities to refinance the debt. If we refinance the Unsecured Notes Due February 2026 by issuing additional senior securities, current market rates for similar debt are higher than the stated rate of 4.75% on the Unsecured Notes Due February 2026.
Previous report
On January 28, 2025, Jeffrey A. Cerny notified our Board of his intention to retire. Mr. Cerny’s resignation as Chief Financial Officer and Treasurer is effective on March 31, 2025. The resignation was not in any way related to a disagreement with us on any matter relating to our operations, policies, practices or otherwise. Mr. Cerny will remain on the Board as a Class III Director.
Previous report
On January 28, 2025, our Board voted to appoint Kyle Spina as Chief Financial Officer and Treasurer of the Company, effective as of March 31, 2025, to fill the vacancy created by the resignation of Mr. Cerny.
Reworded paragraphs (58)
Previous wording
•the belief that the seniority of our debt investments in a borrower’s capital structure may provide greater downside protection against adverse economic changes, including those caused by the impacts of interest rate and inflation rate changes, the ongoing war between Russia and Ukraine, instability in the U.S. and international banking systems, the agenda of the new U.S. presidential administration, including the potential impact of tariff enactment and tax reductions, the risk of recession or a shutdown of U.S. government services, and related market volatility on our business, our portfolio companies, our industry and the global economy;
Current wording
•the belief that the seniority of our debt investments in a borrower’s capital structure may provide greater downside protection against adverse economic changes, including those caused by the impacts of interest rate and inflation rate changes, the ongoing war between Russia and Ukraine, the escalated armed conflict and heightened regional tensions in the Middle East, activity in South America, instability in the U.S. and international banking systems, the agenda of the U.S. presidential administration, including the impact of tariff enactment and tax reductions, trade disputes with other countries, the risk of recession or the impact of the prolonged shutdown of U.S. government services, and related market volatility on our business, our portfolio companies, our industry and the global economy;
Previous wording
•the impact of the ongoing war between Russia and Ukraine, and general uncertainty surrounding the financial and political stability of the United States, the United Kingdom, the European Union and China;
Current wording
•the general uncertainty surrounding the financial and political stability of the United States, the United Kingdom, the Middle East, the European Union, South America and China;
Previous wording
•the fluctuation of the fair value of our investments due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value;
Current wording
•the fluctuation of the fair value of our investments due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value; and
Previous wording
Our NAV per common share increased from $12.09 at December 31, 2023 to $12.85 at December 31, 2024, primarily due to net gains on our investment portfolio of $11.7 million, or $0.87 per common share. For the year ended December 31, 2024, our aggregate distributions of $1.36 per common share exceeded our net investment income of $1.25 per common share.
Current wording
Our NAV per common share decreased from $12.85 at December 31, 2024 to $9.19 at December 31, 2025, primarily due to net losses on our investment portfolio of $45.0 million, or $3.35 per common share. For the year ended December 31, 2025, our aggregate distributions of $1.19 per common share exceeded our net investment income of $0.92 per common share.
Previous wording
During the year ended December 31, 2024, net investment income decreased $3.4 million compared to the prior year. The decrease in net investment income was primarily due to a decrease in total investment income of $9.0 million, partially offset by a decrease in total expenses of $5.5 million. See“—Results of Operations” for additional details.
Current wording
During the year ended December 31, 2025, net investment income decreased $4.3 million compared to the prior year. During the year ended December 31, 2025, total investment income decreased by $7.3 million, primarily due to a decrease in interest income of $4.9 million, while total expenses decreased by $2.9 million, primarily due to a decrease in incentive fees of $2.4 million. See“—Results of Operations” for additional details.
Previous wording
Our weighted-average performing income yield on interest-bearing investments decreased from 13.9% during the year ended December 31, 2023 to 13.4% during the year ended December 31, 2024. The decrease in our income yield was primarily due to a decrease in the effective yield of our Structured Finance Security portfolio related to the aging of subordinated note securities. See “—Portfolio Composition and Investment Activity’for additional details.
Current wording
Our weighted-average performing income yield on interest-bearing investments increased from 13.4% during the year ended December 31, 2024 to 13.6% during the year ended December 31, 2025. The increase in our income yield was primarily due to an increase in the effective yield of our Structured Finance Security portfolio, and partially offset by a decrease in the yield of our debt investments. See “—Portfolio Composition and Investment Activity’for additional details.
Previous wording
Our total outstanding debt decreased from $302.4 million at December 31, 2023 to $248.4 million at December 31, 2024. Our weighted-average debt interest costs increased from 6.0% during the year ended December 31, 2023 to 6.4% for the year ended December 31, 2024, primarily due to the full repayment of our SBA debentures on March 1, 2024, which carried a low effective interest rate of 3.26%, and an increase in the cost of debt on our BNP Facility. As of December 31, 2024, we had outstanding debt of $126.0 million contractually maturing in February 2026, which comprised 51% of our total outstanding debt. See“—Liquidity and Capital Resources—Contractual Obligations and Off-Balance Sheet Arrangements” for additional details.
Current wording
Our total outstanding debt decreased from $248.4 million at December 31, 2024 to $220.5 million at December 31, 2025, primarily due to decreases in the outstanding debt balances of our BNP Facility and Unsecured Notes. Our weighted-average debt interest costs increased from 6.4% during the year ended December 31, 2024 to 6.6% for the year ended December 31, 2025, primarily due to the redemption of the 4.75% Unsecured Notes Due February 2026 and the issuance of $69.0 million of 7.50% Unsecured Notes Due July 2028 and a $25.0 million 8.00% Unsecured Note Due August 2029. See“—Liquidity and Capital Resources—Contractual Obligations and Off-Balance Sheet Arrangements” and “—Recent Developments” for additional details.
Previous wording
During the year ended December 31, 2024, our portfolio experienced net gains of $11.7 million, comprised of net unrealized appreciation of $28.9 million, partially offset by net realized losses of $17.1 million. During the year ended December 31, 2024, our net gain of $11.7 million was primarily driven by net unrealized appreciation of $18.4 million in our common equity investment in Pfanstiehl Holdings, Inc., partially offset by net unrealized depreciation of $6.6 million on our current non-accrual loans. As of December 31, 2024, our portfolio had non-accrual loans with an aggregate fair value of $20.8 million, or 9.3% of our total loan portfolio at fair value, compared to non-accrual loans with an aggregate fair value of $12.1 million, or 4.8% of our total loan portfolio at fair value, at December 31, 2023.
Current wording
During the year ended December 31, 2025, our portfolio experienced net losses of $45.0 million, comprised of net unrealized depreciation, net of deferred tax expense, of $32.8 million and net realized losses, net of tax expense, of $12.2 million. During the year ended December 31, 2025, our net unrealized depreciation of $32.8 million was primarily driven by net unrealized depreciation of $23.0 million on our equity investments and net unrealized depreciation of $8.9 million on our current non-accrual loans. During the year ended December 31, 2025, our net realized loss was primarily due to net realized losses of $6.9 million and $4.8 million related to the sale of Structured Finance Securities and debt investments, respectively. As of December 31, 2025, our portfolio had non-accrual loans with an aggregate fair value of $14.4 million, or 4.2% of our total investments at fair value, compared to non-accrual loans with an aggregate fair value of $20.8 million, or 5.1% of our total investments at fair value, at December 31, 2024.
Previous wording
As of December 31, 2024, our common equity investment in Pfanstiehl Holdings, Inc., a global manufacturer of high-purity pharmaceutical ingredients, accounted for 21.8% of our portfolio at fair value and 51.8% of our total net assets, respectively. Primarily due to an improvement in financial operating performance during the year ended December 31, 2024, the fair value of our investment in the common equity of Pfanstiehl Holdings, Inc. increased by $18.4 million, or $1.37 per common share, to $89.3 million. The value of this investment is substantially comprised of unrealized appreciation of $89.1 million. The valuation of this investment is based on significant unobservable inputs. A deterioration or improvement in the operating performance of the company or other factors underlying the valuation of this investment could have a material impact on our NAV.
Current wording
As of December 31, 2025, our common equity investment in Pfanstiehl Holdings, Inc., a global manufacturer of high-purity pharmaceutical ingredients, accounted for 23.2% of our portfolio at fair value and 64.5% of our total net assets, respectively. During the year ended December 31, 2025, the fair value of our investment in the common equity of Pfanstiehl Holdings, Inc. decreased by $9.9 million, or $0.74 per common share, to $79.4 million. The value of this investment is substantially comprised of unrealized appreciation of $79.2 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, is based on assumptions applicable to an orderly transaction between market participants and does not reflect the impact of a forced sale or entity-specific liquidity constraints. As a result, there can be no assurance that we would be able to realize this value in a timely manner, or at all. A deterioration or improvement in the operating performance of the company or other factors underlying the valuation of this investment could have a material impact on our NAV.
Previous wording
At December 31, 2024, our asset coverage ratio of 169% 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 December 31, 2024, we had unused commitments of $24.0 million under our Banc of California Credit Facility and $82.7 million under our BNP Facility, each of which are subject to a borrowing base and other covenants. As of December 31, 2024, we had unfunded investment commitments of $18.8 million to 10 issuers.
Current wording
As of December 31, 2025, the aggregate amount outstanding of the senior securities issued by us was $220.5 million, for which our asset coverage was 156%, exceeding our minimum asset coverage requirement of 150% under the 1940 Act. As of December 31, 2025, we remained in compliance with all applicable covenants under our outstanding debt facilities. As of December 31, 2025, we had an unused commitment of $20.5 million under our Banc of California Credit Facility, subject to the terms of the borrowing base and other covenants. As of December 31, 2025, we had unfunded investment commitments of $13.2 million to fund outstanding commitments to portfolio companies.
Previous wording
On February 26, 2025, the Board declared a distribution of $0.34 per share for the first quarter of 2025, payable on March 31, 2025, to stockholders of record as of March 21, 2025.
Current wording
On February 26, 2026, the Board declared a distribution of $0.17 per share for the first quarter of 2026, payable on March 31, 2026, to stockholders of record as of March 20, 2026.
Previous wording
CLO Subordinated Notes and Loan Accumulation Facilities: Interest income on our CLO subordinated note securities is recognized in accordance with ASC Subtopic 325-40, Beneficial Interests in Securitized Financial Assets(“ASC 325-40”), which contemplates estimating an effective yield to expected redemption utilizing estimated future cash flows from the investment. The expected cash flows of the underlying portfolio and to our security are developed utilizing a number of assumptions, including, among others, estimates of default rates, prepayment rates, redemption timing, reinvestment prices, and liquidation-redemption price. These assumptions, and correspondingly the estimated cash flows and accretable yields, are reviewed and updated at each payment date, generally quarterly. These assumed cash flows represent significant estimates and are subject to a reasonable possibility of near-term changes due to economic and credit market conditions, and the effect of these changes could be material. The Company ultimately may not realize income accreted on CLO subordinated note securities. The valuation of our Structured Finance Securities makes use of similar assumptions, plus a discount rate assumption, to develop estimated cash flows that are discounted to estimated net present value.
Current wording
CLO Subordinated Notes and Loan Accumulation Facilities: Interest income on our CLO subordinated note securities is recognized in accordance with ASC Subtopic 325-40, Beneficial Interests in Securitized Financial Assets(“ASC 325-40”), which contemplates estimating an effective yield to expected redemption utilizing estimated future cash flows from the investment. The expected cash flows of the underlying portfolio and to our security are developed utilizing a number of assumptions, including, among others, estimates of default rates, prepayment rates, redemption timing, reinvestment prices, and liquidation-redemption price. These assumptions, and correspondingly the estimated cash flows and accretable yields, are reviewed and updated at each payment date, generally quarterly. These assumed cash flows represent significant estimates and are subject to a reasonable possibility of near-term changes due to economic and credit market conditions, and the effect of these changes could be material. We ultimately may not realize income accreted on CLO subordinated note securities. The valuation of our Structured Finance Securities makes use of similar assumptions, plus a discount rate assumption, to develop estimated cash flows that are discounted to estimated net present value.
Previous wording
An optional redemption feature of a CLO allows a majority of the holders of the CLO subordinated notes issued by the CLO issuer, after the end of a specified non-call period, to cause the redemption of the CLO subordinated notes issued by the CLO with proceeds paid through either the liquidation of the CLO’s assets or a refinancing with new debt. The optional redemption is effectively a voluntary prepayment of the CLO subordinated notes issued by the CLO prior to the stated maturity of such securities. When the optional redemption feature has been exercised on a CLO subordinated note, distributions received are first recorded as a return of capital until its cost basis is reduced to zero and thereafter recorded as realized gains. The principal amount of the CLO subordinated notes is not reduced for distributions received until the security is fully redeemed. Commencing on the optional redemption date, we cease accruing income on our CLO subordinated notes that will be redeemed.
Current wording
An optional redemption feature of a CLO allows a majority of the holders of the CLO subordinated notes issued by the CLO issuer, after the end of a specified non-call period, to cause the redemption of the CLO subordinated notes issued by the CLO with proceeds paid through either the liquidation of the CLO’s assets or through a refinancing with new debt. The optional redemption is effectively a voluntary prepayment of the CLO subordinated notes issued by the CLO prior to the stated maturity of such securities. When the optional redemption feature has been exercised on a CLO subordinated note, distributions received are first recorded as a return of capital until its cost basis is reduced to zero and recorded as realized gains thereafter. The principal amount of the CLO subordinated notes is not reduced for distributions received until the security is fully redeemed. Commencing on the optional redemption date, we cease accruing income on our CLO subordinated notes that will be redeemed. CLO subordinated notes that have been optionally redeemed are realized when the deal has been fully liquidated and discharged.
Previous wording
Non-accrual Loans: We review, for placement on non-accrual status, all loans and CLO mezzanine debt investments when they 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. Interest income and 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 management’s judgment, it is probable that we will collect all principal and interest from the investment.
Current wording
Non-Accrual Loans: We review, for placement on non-accrual status, all loans and CLO mezzanine debt investments when they 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. PIK income that has been contractually capitalized to the principal balance of the investment prior to the non-accrual designation date is not reserved against interest or dividend income, but rather is assessed through the valuation of the investment with corresponding adjustments to unrealized appreciation/depreciation, as applicable. Interest income and 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 management’s judgment, it is probable that we will collect all principal and interest from the investment.
Previous wording
Acquisition Cost of Investments: Our middle-market lending activities may involve the acquisition of multiple financial instruments or rights either in an initial transaction, or in subsequent or “follow-on” transactions, including amendments to existing securities. These financial instruments can include loans, preferred and common stock, warrants, or membership interests in limited liability companies. Acquired rights can include fixed or variable fees that can be either guaranteed or contingent upon operating performance of the underlying portfolio companies. Moreover, these fees may be payable in cash or additional securities. The revenue recognized on these instruments is a function of the fee or other consideration allocated to them, including amounts allocated to loan syndication fees at the time of acquisition.
Current wording
Acquisition Cost of Investments: Our lending activities may involve the acquisition of multiple financial instruments or rights either in an initial transaction, or in subsequent or “follow-on” transactions, including amendments to existing securities. These financial instruments can include loans, preferred and common stock, warrants, or membership interests in limited liability companies. Acquired rights can include fixed or variable fees that can be either guaranteed or contingent upon operating performance of the underlying portfolio companies. Moreover, these fees may be payable in cash or additional securities. The revenue recognized on these instruments is a function of the fee or other consideration allocated to them, including amounts allocated to loan syndication fees at the time of acquisition.
Previous wording
Fair value estimates. As of December 31, 2024, total investments of $409.7 million, representing approximately 96% of our total assets, were carried at fair value on the consolidated statement of assets and liabilities. As discussed more fully in“Item 8. Financial Statements and Supplementary Data—Note 2”, GAAP requires us to categorize fair value measurements according to a three-level valuation hierarchy. The hierarchy gives the highest priority to quoted, active market prices for identical assets and liabilities (Level 1) and the lowest priority to valuation techniques that require significant management judgment because one or more of the significant inputs are unobservable in the market place (Level 3). All of our investments carried at fair value are classified as Level 2 and Level 3, with 95% of our investments classified as Level 3 as of December 31,
Current wording
Fair value estimates. As of December 31, 2025, total investments of $342.0 million, representing approximately 99% of our total assets, were carried at fair value on the consolidated statements of assets and liabilities. As discussed more fully in“Item 8. Financial Statements and Supplementary Data—Note 2”, GAAP requires us to categorize fair value measurements according to a three-level valuation hierarchy. The hierarchy gives the highest priority to quoted, active market prices for identical assets and liabilities (Level 1) and the lowest priority to valuation techniques that require significant management judgment because one or more of the significant inputs are unobservable in the market place (Level 3). All of our investments carried at fair value are classified as either Level 2 and Level 3, with 96% of our investments classified as Level 3 as of December 31, 2025. In accordance with our investment strategy, we typically do not hold equity securities or other instruments that are actively traded on an exchange (Level 1).
Previous wording
For the years ending December 31, 2024, 2023 and 2022, OFS Advisor agreed to reduce its base management fee attributable to all of the OFSCC-FS Assets to 0.25% per quarter (1.00% annualized) of the average value of the OFSCC-FS Assets (other than cash and cash equivalents but including assets purchased with borrowed amounts) at the end of the two most recently completed calendar quarters. OFS Advisor’s base management fee reduction is renewable on an annual basis and OFS Advisor is not entitled to recoup the amount of the base management fee reduced with respect to the OFSCC-FS Assets. OFS Advisor most recently renewed the agreement to reduce its base management fee for the 2025 calendar year on January 8, 2025.
Current wording
For the years ending December 31, 2025, 2024 and 2023, OFS Advisor agreed to reduce its base management fee attributable to all of the OFSCC-FS Assets to 0.25% per quarter (1.00% annualized) of the average value of the OFSCC-FS Assets (other than cash and cash equivalents but including assets purchased with borrowed amounts) at the end of the two most recently completed calendar quarters. OFS Advisor’s base management fee reduction is renewable on an annual basis and OFS Advisor is not entitled to recoup the amount of the base management fee reduced with respect to the OFSCC-FS Assets.
Previous wording
The 1940 Act generally prohibits BDCs from making certain negotiated co-investments with certain affiliates absent an order from the SEC permitting the BDC to do so. On August 4, 2020, we received our existing Order, which superseded a previous order that we received on October 12, 2016, and provides us with greater flexibility to enter into co-investment transactions with certain Affiliated Funds in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with certain conditions. We are generally permitted to co-invest with Affiliated Funds if, under the terms of the Order, a “required majority” (as defined in Section 57(o) of the 1940 Act) of our independent directors make certain conclusions in connection with a co-investment transaction, including that: (1) the terms of the transaction, including the consideration to be paid, are reasonable and fair to us and our stockholders and do not involve overreaching in respect of us or our stockholders on the part of any person concerned;
Current wording
The 1940 Act generally prohibits BDCs from making certain negotiated co-investments with certain affiliates absent an order from the SEC permitting the BDC to do so. On August 4, 2020, we received our existing Order, which superseded a previous order that we received on October 12, 2016, and provides us with greater flexibility to enter into co-investment transactions with certain Affiliated Funds in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with certain conditions. We are generally permitted to co-invest with Affiliated Funds if, under the terms of the Order, a “required majority” (as defined in Section 57(o) of the 1940 Act) of our independent directors make certain conclusions in connection with a co-investment transaction, including that: (1) the terms of the transaction, including the consideration to be paid, are reasonable and fair to us and our stockholders and do not involve overreaching in respect of us or our stockholders on the part of any person concerned; (2) the transaction is consistent with the interests of our stockholders and is consistent with our investment objective and strategies; (3) the investment by our affiliates would not disadvantage us, and our participation would not be on a basis different from or less advantageous than that on which our affiliates are investing; and (4) the proposed investment by us would not benefit OFS Advisor, the other Affiliated Funds that are participating in the investment, or any affiliated person of any of them (other than parties to the transaction), except to the extent permitted by the exemptive relief and applicable law, including the limitations set forth in Section 57(k) of the 1940 Act.
Previous wording
Portfolio Composition. As of December 31, 2024, the fair value of our debt investment portfolio totaled $224.2 million in 36 portfolio companies, of which 85% and 15% were first lien and second lien loans, respectively. We also held equity investments in 15 portfolio companies with a fair value of $108.6 million and 18 investments in Structured Finance Securities with a fair value of $76.9 million.
Current wording
Portfolio Composition. As of December 31, 2025, the fair value of our debt investment portfolio totaled $179.8 million in 34 portfolio companies, of which 95% and 5% were first lien and second lien loans, respectively. We also held equity investments in 15 portfolio companies with a fair value of $100.6 million and 14 investments in Structured Finance Securities with a fair value of $61.6 million. Certain portfolio investments represent a larger percentage of our total assets or net assets and may involve longer expected holding periods or more limited liquidity alternatives than smaller positions, which management and the Board consider in connection with portfolio monitoring and valuation.
Previous wording
The weighted-average yield of our investments is not the same as a return on investment for our stockholders, but rather the gross investment income from our investment portfolio before the payment of all of our fees and expenses. There can be no assurance that the weighted-average yield will remain at its current level. As of December 31, 2024, 91% of our total loan portfolio, at fair value, consisted of variable rate investments, generally indexed to SOFR. See additional information under “Item 7A. Quantitative and Qualitative Disclosures About Market Risk.”
Current wording
The weighted-average yield of our investments is not the same as a return on investment for our stockholders, but rather the gross investment income from our investment portfolio before the payment of all of our fees and expenses. There can be no assurance that the weighted-average yield will remain at its current level. As of December 31, 2025, 89% of our total loan portfolio, at fair value, consisted of variable rate investments, generally indexed to SOFR. See additional information under “Item 7A. Quantitative and Qualitative Disclosures About Market Risk.”
Previous wording
(1) Includes unitranche investments (which are loans that combine both senior and subordinated debt, in a first lien position), as of December 31, 2024, with an amortized cost and fair value of $128.1 million and $119.2 million, respectively. As of December 31, 2023, the amortized cost and fair value of unitranche investments was $141.3 million and $131.3 million, respectively.
Current wording
(1) Includes unitranche investments (which are loans that combine both senior and subordinated debt, in a first lien position), as of December 31, 2025, with an amortized cost and fair value of $130.3 million and $116.3 million, respectively. As of December 31, 2024, the amortized cost and fair value of unitranche investments was $128.1 million and $119.2 million, respectively. Unitranche loans generally provide leverage levels comparable to a combination of first lien and second lien or subordinated loans. Investments in “last out” pieces of unitranche loans will be similar to second lien loans in that such investments will be junior in priority to the “first out” piece of the same unitranche loan with respect to payment of principal and interest.
Previous wording
As of December 31, 2024, 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 December 31, 2025, 100% of our loan portfolio and 53% of our total portfolio consisted of first lien and second lien loans, based on fair value.
Previous wording
As of December 31, 2024, the three largest industries of our debt and equity investments by fair value, were (1) Manufacturing (36.7%), (2) Health Care and Social Assistance (20.1%) and (3) Administrative and Support and Waste Management and Remediation Services (6.5%) totaling approximately 63.3% of our debt and equity investment portfolio. For a full summary of our investment portfolio by industry, see“Note 4, Investments” to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of this report.
Current wording
As of December 31, 2025, the three largest industries of our debt and equity investments by fair value, were (1) Manufacturing (34.6%), (2) Health Care and Social Assistance (17.5%) and (3) Real Estate and Rental and Leasing (8.0%), totaling approximately 60.1% of our debt and equity investment portfolio. For a full summary of our investment portfolio by industry, see“Note 4, Investments” to the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of this report.
Previous wording
As of December 31, 2024, approximately 4.7% and 11.2% 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 December 31, 2025, approximately 4.9% and 13.6% of our total portfolio at fair value and net assets, respectively, were comprised of Structured Finance Securities managed by a single adviser.
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 December 31, 2024, the amortized cost and fair value of non-performing Structured Finance Securities were $9.4 million and $3.4 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 December 31, 2025, the amortized cost and fair value of non-performing Structured Finance Securities were $2.3 million and $0.2 million, respectively.
Previous wording
During the year ended December 31, 2024, we sold Structure Finance Securities for aggregate net proceeds of $20.1 million and recognized a realized loss of $3.5 million.
Current wording
During the year ended December 31, 2025, we sold certain Structure Finance Securities for aggregate net proceeds of $12.0 million, resulting in an aggregate net realized loss of $6.9 million, of which $1.5 million was recognized in the current year net of reversal for previously recognized unrealized depreciation.
Previous wording
During the year ended December 31, 2024, we restructured our first lien debt investments in Avison Young Inc. to, among other things, exchange our first lien debt investments for new first lien debt investments, preferred equity and common equity. The cost of the existing first lien debt investments was ascribed to the new investments received in the exchange, and no realized loss was recognized. We also invested an incremental $0.8 million in new-issue first lien debt.
Current wording
During the year ended December 31, 2025, we restructured our first lien debt and common equity investments in SSJA Bariatric Management LLC, to, among other things, exchange our first lien debt and common equity investments for new first lien debt and common equity. The cost of the existing first lien debt and common equity investments was ascribed to the new investments received in the exchange, and no realized loss was recognized. As of December 31, 2025, these investments had an amortized cost and fair value of $13.5 million and $5.5 million, respectively. In connection with the completion of the restructuring transaction, we also invested $0.2 million in a new first lien facility.
Previous wording
During the year ended December 31, 2023, we recognized total PIK income of $2.6 million, which represented 4.6% of total investment income. During the year ended December 31, 2022, we recognized total PIK income of $1.0 million, which represented 2.0% of total investment income.
Current wording
During the year ended December 31, 2025, we recognized total PIK income of $2.7 million, which represented 6.7% of total investment income. During the year ended December 31, 2024, we recognized total PIK income of $2.7 million, which represented 5.7% of total investment income.
Previous wording
During the year ended December 31, 2024, dividend income increased $2.3 million compared to the prior year, primarily due to an increase of $2.4 million in cash dividends. The increase in cash dividends was primarily due to non-recurring dividends of $1.9 million from TRS Services, LLC million recognized upon the sale of our preferred equity investment as well as a $0.5 million increase in dividends from our common equity investment in Pfanstiehl Holdings, Inc.
Current wording
During the year ended December 31, 2024, dividend income increased $2.3 million compared to the prior year, primarily due to an increase of $2.4 million in cash dividends. The increase in cash dividends was primarily due to non-recurring dividends of $1.9 million from TRS Services, LLC recognized upon the sale of our preferred equity investment, as well as a $0.5 million increase in dividends from our common equity investment in Pfanstiehl Holdings, Inc.
Previous wording
The Income Incentive Fee for the year ended December 31, 2024 decreased $0.9 million compared to the prior year, primarily due to a decrease in our average interest-bearing investment portfolio, at cost, which reduced our net investment income during the current year.
Current wording
The Income Incentive Fee for the year ended December 31, 2024 decreased $0.9 million compared to the prior year, primarily due to a decrease in our average interest-bearing investment portfolio, at cost, which reduced our net investment income return on net assets during the current year.
Previous wording
During the year ended December 31, 2024, our portfolio experienced net gains of $11.7 million, comprised of net unrealized appreciation of $28.9 million, net of taxes, partially offset by net realized losses of $17.1 million, net of taxes.
Current wording
During the year ended December 31, 2024, our portfolio experienced net gains of $11.7 million, comprised of net unrealized appreciation of $28.9 million, net of deferred taxes, partially offset by net realized losses of $17.1 million, net of taxes.
Previous wording
During the year ended December 31, 2024, our net unrealized appreciation of $28.9 million, net of taxes, primarily related to net unrealized appreciation of $18.4 million in the common equity investment in Pfanstiehl Holdings, Inc. as well as the reversal of previously recognized unrealized depreciation on exited investments.
Current wording
During the year ended December 31, 2024, our net unrealized appreciation of $28.9 million, net of deferred taxes, primarily related to net unrealized appreciation of $18.4 million in the common equity investment in Pfanstiehl Holdings, Inc. as well as the reversal of previously recognized unrealized depreciation on exited investments.
Previous wording
During the year ended December 31, 2022, we redeemed $19.0 million of SBA debentures and, as a result, we recognized a loss on extinguishment of debt of $0.1 million related to the acceleration of unamortized deferred borrowing costs and prepaid (or breakage) interest on the redeemed debentures.
Current wording
During the year ended December 31, 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.
Previous wording
During the three months ended December 31, 2024, total expenses increased $0.3 million compared to the prior quarter, primarily due to an aggregate increase in base management fees and the Income Incentive Fee of $0.2 million.
Current wording
During the three months ended December 31, 2025, total expenses decreased $0.9 million compared to the prior quarter, primarily due to a decrease in the Income Incentive Fee of $0.6 million.
Previous wording
Net realized and unrealized gain (loss) on investments. Net gain (loss) by investment type for the three months ended December 31, 2024 and September 30, 2024 were as follows (in thousands):
Current wording
Net realized and unrealized loss on investments. Net loss by investment type for the three months ended December 31, 2025 and September 30, 2025 were as follows (in thousands):
Previous wording
Net gain (loss) on investments for the three months ended December 31, 2024
Current wording
Net loss on investments for the three months ended December 31, 2025
Previous wording
Net gain (loss) on investments for the three months ended September 30, 2024
Current wording
Net loss on investments for the three months ended September 30, 2025
Previous wording
At December 31, 2024, we held cash of $6.1 million, which includes $4.8 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 year ended December 31, 2024, the Parent received $11.4 million in cash distributions from OFSCC-FS.
Current wording
At December 31, 2025, we held cash of $3.4 million, which includes $2.4 million held by OFSCC-FS. Distributions from OFSCC-FS to the Parent were restricted by the terms and conditions of the BNP Facility. During the year ended December 31, 2025, the Parent received $10.4 million in cash distributions from OFSCC-FS.
Previous wording
At December 31, 2024, we had an unused commitment of $24.0 million under our Banc of California Credit Facility, as well as an unused commitment of $82.7 million under the BNP Facility, both of which are subject to borrowing base requirements and other covenants.
Current wording
At December 31, 2025, we had an unused commitment of $20.5 million under our Banc of California Credit Facility, subject to the terms of the borrowing base and other covenants.
Previous wording
As of December 31, 2024, the aggregate amount outstanding of the senior securities issued by us was $248.4 million, for which our asset coverage was 169%, exceeding our minimum assert 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 December 31, 2025, the aggregate amount outstanding of the senior securities issued by us was $220.5 million, for which our asset coverage was 156%, 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.
Showing the first 40 of 58 pairs. Open the source sections for the rest.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
•the belief that our cash and cash equivalent balances are not exposed to any significant credit risk;
Current report — wording carried from elsewhere
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 may receive syndication fees on investments where OFS Advisor sources, structures and arranges the lending group. During the year ended December 31, 2025, total fee income decreased $0.1 million compared to the prior year, primarily due to a decrease in syndication fees.
Current report — wording carried from elsewhere
Base management fee expense for the year ended December 31, 2025 decreased $0.2 million compared to the prior year, primarily due to our average investment portfolio at fair value decreasing from $404.7 million during the year ended December 31, 2024 to $381.5 million during the year ended December 31, 2025.
Current report — wording carried from elsewhere
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. As of December 31, 2025, OFSCC-MB and us held aggregate investments of $140.5 million, at fair value.
Current report — wording carried from elsewhere
(1) On January 9, 2026, we amended the Banc of California Credit Facility to extend the maturity date from February 28, 2026 to February 28, 2028.
Current report — wording carried from elsewhere
On January 9, 2026, we amended the Banc of California Credit Facility to extend the maturity date from February 28, 2026 to February 28, 2028.
Current report — wording carried from elsewhere
(1) On January 9, 2026, we amended the Banc of California Credit Facility to extend the maturity date from February 28, 2026 to February 28, 2028.
Current report — wording carried from elsewhere
On January 9, 2026, we amended the Banc of California Credit Facility to extend the maturity date from February 28, 2026 to February 28, 2028.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
In accordance with our investment strategy, we typically do not hold equity securities or other instruments that are actively traded on an exchange (Level 1).
Previous report — wording carried elsewhere
(2) the transaction is consistent with the interests of our stockholders and is consistent with our investment objective and strategies; (3) the investment by our affiliates would not disadvantage us, and our participation would not be on a basis different from or less advantageous than that on which our affiliates are investing; and (4) the proposed investment by us would not benefit OFS Advisor, the other Affiliated Funds that are participating in the investment, or any affiliated person of any of them (other than parties to the transaction), except to the extent permitted by the exemptive relief and applicable law, including the limitations set forth in Section 57(k) of the 1940 Act.
Previous report — wording carried elsewhere
During the year ended December 31, 2023, total fee income decreased $0.6 million compared to the prior year, primarily due to a decrease in syndication and prepayment fees.