OFS Capital Corp
For the period ended Sep 30, 2026. Filed Oct 30, 2026.
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, 2026 · Filed Oct 30, 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-Q
Period ended 2026-06-30; filed 2026-07-31.
0001487918-26-000078
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-30.
0001487918-26-000091
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 166 previous paragraphs and 176 current paragraphs.
94 unchanged; 58 reworded; 23 added; 12 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 17 previous and 17 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 (23)
Current report
During the three months ended September 30, 2026, our second lien debt investments in BayMark Health Services, Inc. underwent a restructuring, through which our second lien debt investments were exchanged for new preferred and common equity investments. The cost of the existing second lien debt investments was ascribed to the preferred and common equity investments received in the exchange, and no realized loss was recognized. As of September 30, 2026, our preferred and common equity investments had an aggregate cost and fair value of $8.9 million and $0.1 million, respectively.
Current report
For the three months ended September 30, 2026, loans to portfolio companies with an aggregate amortized cost and fair value of $6.8 million and $2.1 million, respectively, were placed on non-accrual status. Additionally, during the three months ended September 30, 2026, loans to portfolio companies which had previously been on non-accrual status with an aggregate amortized cost and fair value of $9.1 million and $0.3 million, respectively, were restructured for new debt and equity investments in the portfolio companies. Following the restructuring, the new loan with an amortized cost and fair value of $0.6 million and $0.7 million, respectively, was placed on accrual status.
Current report
Comparison of the nine months ended September 30, 2026 and 2025
Current report
Total investment income for the nine months ended September 30, 2026 decreased $9.6 million compared to the corresponding period in the prior year, primarily due to a decrease in total interest income of $10.3 million, partially offset by an increase in total dividend income of $0.7 million. The decrease in total interest income was primarily due to the combination of a smaller interest-bearing portfolio, lower SOFR rates, and the impact of non-accrual investments.
Current report
Comparison of the nine months ended September 30, 2026 and 2025
Current report
Interest expense for the nine months ended September 30, 2026 decreased $1.4 million compared to the corresponding period in the prior year, primarily due to a lower outstanding debt balance, partially offset by a higher cost of financing.
Current report
During the three and nine months ended September 30, 2026, unrealized depreciation of $8.4 million and $8.4 million, respectively, was reclassified from debt investments to equity investments related to a debt-to-equity restructuring.
Current report
For the three months ended September 30, 2026, we recognized a net loss on investments of $11.9 million due to a net realized loss of $7.8 million and net unrealized depreciation, net of taxes, of $4.1 million.
Current report
For the quarter ended September 30, 2026, our net realized loss of $7.8 million was primarily attributable to the sale of a Structured Finance Security (Apex Credit CLO 2022-1 Ltd.), which resulted in a realized loss of $7.8 million, including $2.6 million recognized during the current quarter.
Current report
For the three months ended September 30, 2026, net unrealized depreciation, net of taxes, of $4.1 million was primarily due to depreciation of $6.8 million on our common equity investment in Pfanstiehl Holdings, Inc.
Current report
Nine months ended September 30, 2026
Current report
Nine months ended September 30, 2025
Current report
Three months ended September 30, 2026
Current report
During the three months ended September 30, 2026, we redeemed $20.0 million of the aggregate principal amount of the 7.50% Unsecured Notes Due July 2028, 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.
Current report
Nine months ended September 30, 2026
Current report
As of September 30, 2026, we had $4.0 million in outstanding unfunded commitments to portfolio companies.
Current report
On September 30, 2026, Banc of California provided a covenant waiver for the quarter ended September 30, 2026 related to the requirement of a $1.0 million minimum quarterly net investment income, after management and incentive fees. We may need covenant waivers in the future and there is no guarantee the covenant waiver will be granted.
Current report
$0.2 million. We recognized a loss on extinguishment of debt of $0.3 million related to the acceleration of unamortized deferred debt issuance costs on the redeemed notes.
Current report
Partial Monetization of Equity Interest
Current report
On October 5, 2026, SBIC I LP admitted a third-party investor (the “New Investor”) as a limited partner, which acquired approximately 56.62% of the limited partnership interests of SBIC I LP. SBIC I LP holds 400 Class A shares of Pfanstiehl Holdings, Inc., a global manufacturer of high-purity pharmaceutical ingredients. The New Investor acquired its limited partnership interests in exchange for $52.3 million paid to SBIC I LP, the entirety of which was distributed to us. Following the transaction, SBIC I LP is no longer a wholly owned subsidiary of the Company.
Current report
For U.S. federal income tax purposes, we estimate we will recognize a long-term capital gain of approximately $47 million, net of the proportional cost basis and transaction costs related to facilitating the transaction. We currently estimate that we have sufficient capital loss carryforwards to fully offset the capital gain resulting from the transaction, and thus no net capital gain, and no resulting capital gain distribution, is expected for tax year 2026. The current estimate of year-to-date 2026 U.S. federal taxable income is based on certain estimated amounts, including information received from third parties, and does not include certain income amounts that may be recognized in the remainder of the year. Accordingly, actual full-year 2026 U.S. federal taxable income will not be finally determined until our 2026 U.S. federal tax return is filed in 2027 (and, therefore, such estimate is subject to change). The determination of the tax attributes of our distributions is made annually as of the end of our fiscal year based upon our estimated taxable income 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
Litigation
Current report
On October 26, 2026, Pfanstiehl Holdings, Inc. filed a complaint in the Delaware Court of Chancery against SBIC I LP, our affiliate and former wholly owned subsidiary, and OFS SBIC I GP, LLC, its general partner and a wholly owned subsidiary of ours. The complaint challenges the transaction previously reported in our Current Report on Form 8-K filed on October 6, 2026 and asserts claims for (i) declaratory judgment that the transaction is void under the stockholder agreement governing SBIC I LP’s shares of Pfanstiehl Holdings, Inc., (ii) breach of that stockholder agreement, and (iii) breach of the implied covenant of good faith and fair dealing. The complaint seeks declaratory and injunctive relief (including an order unwinding the transaction) and unspecified damages, and fees and costs. We intend to defend the matter vigorously. Based on the information currently available, we cannot predict the outcome of this proceeding and are unable to reasonably estimate the possible loss or range of loss, if any. Costs associated with the litigation will be accrued and expensed as incurred. No amounts have been accrued as of September 30, 2026.
Removed paragraphs (12)
Previous report
For the three months ended June 30, 2026, our first lien debt investments in One GI LLC with an aggregate amortized cost and fair value of $12.5 million and $10.4 million, respectively, were placed on non-accrual status.
Previous report
For the three months ended June 30, 2026, total investment income decreased from $8.9 million in the prior quarter to $6.8 million, primarily due to decreases in interest income of $1.2 million and dividend income of $0.9 million.
Previous report
For the three months ended June 30, 2026, dividend income decreased by $0.9 million compared to the prior quarter, primarily due to a non-recurring cash dividend of $0.9 million from our common equity investment in Pfanstiehl Holdings, Inc. recognized during the prior quarter.
Previous report
Comparison of the six months ended June 30, 2026 and 2025
Previous report
Income Incentive Fees for the three months ended June 30, 2026 decreased $0.4 million compared to the prior quarter, primarily due to a decrease in our net investment income return on net assets in the current quarter.
Previous report
Comparison of the six months ended June 30, 2026 and 2025
Previous report
For the three months ended March 31, 2026, we recognized a net loss on investments of $13.9 million due to a net realized loss of $11.3 million and net unrealized depreciation, net of taxes, of $2.6 million. For the quarter ended March 31, 2026, our net realized and unrealized loss on investments of $13.9 million was primarily attributable to $10.3 million of net realized and unrealized losses on our Structured Finance Securities.
Previous report
Six months ended June 30, 2026
Previous report
Six months ended June 30, 2025
Previous report
Six months ended June 30, 2026
Previous report
As of June 30, 2026, we had unfunded commitments of $6.0 million to fund outstanding commitments to portfolio companies.
Previous report
As a BDC, we are generally not permitted to issue and sell our common stock at a price below net asset value per share. We may, however, sell our common stock, or warrants, options or rights to acquire our common stock, at a price below the then-current net asset value per share of our common stock if the Board determines that such sale is in the best interests of us and our stockholders, and if our stockholders approve such sale. On July 30, 2025, our stockholders approved a proposal to authorize us, with approval of our Board, to sell or otherwise issue shares of our common stock (during a twelve-month period) at a price below our then-current net asset value per share in one or more offerings, subject to certain limitations (including that the cumulative number of shares sold pursuant to such authority does not exceed 25% of our then outstanding common stock immediately prior to each such sale). We did not sell any shares below net asset value pursuant to the proposal approved by our stockholders.
Reworded paragraphs (58)
Previous wording
Our NAV per common share increased from $8.16 at March 31, 2026 to $8.41 at June 30, 2026, due to a net gain on investments of $0.34 per common share, partially offset by our quarterly distribution of $0.17 per common share exceeding our quarterly net investment income of $0.08 per common share.
Current wording
Our NAV per common share decreased from $8.41 at June 30, 2026 to $7.38 at September 30, 2026, primarily due to a net loss on investments of $0.89 per common share and our quarterly distribution of $0.17 per common share exceeding our quarterly net investment income of $0.05 per common share.
Previous wording
For the quarter ended June 30, 2026, total investment income decreased from $8.9 million in the prior quarter to $6.8 million, primarily due to a decrease in interest and dividend income. See “—Results of Operations” for additional information.
Current wording
For the quarter ended September 30, 2026, total investment income decreased from $6.8 million in the prior quarter to $5.9 million, primarily due to a decrease in interest income, partially offset by an increase in non-recurring fee income. See “—Results of Operations” for additional information.
Previous wording
Our total outstanding debt decreased from $202.5 million at March 31, 2026 to $185.8 million at June 30, 2026. The decrease of $16.7 million in our total outstanding debt during the quarter ended June 30, 2026 was due to net paydowns on our revolving credit facilities. For the quarter ended June 30, 2026, our weighted-average debt interest costs of 7.41% remained stable compared to 7.34% for the quarter ended March 31, 2026. See “—Results of Operations” and “—Liquidity and Capital Resources” for additional information.
Current wording
Our total outstanding debt decreased from $185.8 million at June 30, 2026 to $154.4 million at September 30, 2026. During the quarter ended September 30, 2026, our total outstanding debt decreased by $31.4 million due to the redemption of $20.0 million of our 7.50% Unsecured Notes Due July 2028 and net repayments of $11.4 million under our Natixis Facility. For the quarter ended September 30, 2026, our weighted-average debt interest costs of 7.65% increased compared to 7.41% for the quarter ended June 30, 2026. See “—Results of Operations” and “—Liquidity and Capital Resources” for additional information.
Previous wording
For the quarter ended June 30, 2026, we recognized a net gain on investments of $4.6 million due to net unrealized appreciation, net of taxes, of $10.6 million, partially offset by a net realized loss of $6.0 million. For the quarter ended June 30, 2026, our net unrealized appreciation of $10.6 million was primarily due to appreciation of $14.1 million on our common equity investment in Pfanstiehl Holdings, Inc. Our net realized loss of $6.0 million during the quarter ended June 30, 2026 was primarily related to an aggregate loss of $4.8 million on the sale of Structured Finance Securities. As of June 30, 2026, we had non-accrual loans with an aggregate fair value of $21.4 million, or 7.2% of our total investments at fair value. See “—Portfolio Composition and Investment Activity” for additional information.
Current wording
For the quarter ended September 30, 2026, we recognized a net loss on investments of $11.9 million due to a net realized loss of $7.8 million and net unrealized depreciation, net of taxes, of $4.1 million. Our net realized loss of $7.8 million during the quarter ended September 30, 2026 was primarily attributable to the sale of a Structured Finance Security (Apex Credit CLO 2022-1 Ltd.), which resulted in a realized loss of $7.8 million, including $2.6 million recognized during the current quarter. For the quarter ended September 30, 2026, net unrealized depreciation of $4.1 million was primarily due to depreciation of $6.8 million on our common equity investment in Pfanstiehl Holdings, Inc. See “—Recent Developments—Partial Monetization of Equity Interest” for additional information. As of September 30, 2026, we had non-accrual loans with an aggregate fair value of $23.4 million, or 9.3% of our total investments at fair value. See “—Portfolio Composition and Investment Activity” for additional information.
Previous wording
As of June 30, 2026, the aggregate amount outstanding of the senior securities issued by us was $185.8 million, for which our asset coverage ratio was 161%, exceeding the minimum asset coverage requirement of 150% under the 1940 Act. As of June 30, 2026, we remained in compliance with all applicable covenants under our outstanding debt facilities. As of June 30, 2026, we had unused commitments of $15.0 million under our Banc of California Credit Facility, and $43.2 million under our Natixis Facility, each of which is subject to a borrowing base and other covenants. As of June 30, 2026, we had unfunded commitments of $6.0 million to fund outstanding commitments to portfolio companies. See “—Liquidity and Capital Resources” for additional information.
Current wording
As of September 30, 2026, the aggregate amount outstanding of the senior securities issued by us was $154.4 million, for which our asset coverage ratio was 164%, exceeding the minimum asset coverage requirement of 150% under the 1940 Act. As of September 30, 2026, we remained in compliance with all applicable covenants under our Natixis Facility and our Banc of California Credit Facility (after giving effect to the minimum quarterly net investment income covenant waiver). As of September 30, 2026, we had unused commitments of $15.0 million under our Banc of California Credit Facility, and $54.6 million under our Natixis Facility, each of which is subject to a borrowing base and other covenants. As of September 30, 2026, we had $4.0 million in outstanding unfunded commitments to portfolio companies. See “—Liquidity and Capital Resources” for additional information.
Previous wording
On July 28, 2026, the Board declared a distribution of $0.17 per share for the third quarter of 2026, payable on October 5, 2026 to stockholders of record as of September 18, 2026.
Current wording
On October 27, 2026, the Board declared a distribution of $0.17 per share for the fourth quarter of 2026, payable on January 7, 2027 to stockholders of record as of December 18, 2026.
Previous wording
On April 17, 2026 and June 23, 2026, OFS Advisor agreed to waive a portion of its base management fee for the quarters ended March 31, 2026 and June 30, 2026, respectively, 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. These waivers differ from prior periods where
Current wording
On April 17, 2026, June 23, 2026 and September 16, 2026, OFS Advisor agreed to waive a portion of its base management fee for the quarters ended March 31, 2026, June 30, 2026 and September 30, 2026, respectively, 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. These waivers differ from prior periods where OFS Advisor had contractually agreed to reduce its base management fee for the entire year at the beginning of the year. As of September 30, 2026, there is no active ongoing fee waiver or reduction agreement in place with OFS Advisor for the remainder of 2026.
Previous wording
As of June 30, 2026, the fair value of our debt investment portfolio totaled $147.0 million in 33 portfolio companies, of which approximately 97% and 3% were first lien and second lien debt investments, respectively. We also had equity investments in 13 portfolio companies with a fair value of approximately $116.7 million and 10 investments in Structured Finance Securities with a fair value of approximately $34.1 million. As of June 30, 2026, we had unfunded commitments of $6.0 million to fund outstanding commitments to 12 portfolio companies. Set forth in the tables and charts below is selected information with respect to our portfolio as of June 30, 2026 and December 31, 2025.
Current wording
As of September 30, 2026, the fair value of our debt investment portfolio totaled $111.1 million in 31 portfolio companies, of which approximately 97% and 3% were first lien and second lien debt investments, respectively. We also had equity investments in 14 portfolio companies with a fair value of approximately $113.9 million and nine investments in Structured Finance Securities with a fair value of approximately $27.1 million. As of September 30, 2026, we had $4.0 million in outstanding unfunded commitments to 11 portfolio companies. Set forth in the tables and charts below is selected information with respect to our portfolio as of September 30, 2026 and December 31, 2025.
Previous wording
As of June 30, 2026, our common equity investment in Pfanstiehl Holdings, Inc., a global manufacturer of high-purity pharmaceutical ingredients, accounted for 31.8% and 84.0% 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 $94.3 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.
Current wording
As of September 30, 2026, our common equity investment in Pfanstiehl Holdings, Inc., a global manufacturer of high-purity pharmaceutical ingredients, accounted for 34.8% and 88.7% 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 $87.5 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. See “—Recent Developments—Partial Monetization of Equity Interest” for additional information.
Previous wording
The following table presents weighted-average yield metrics for our portfolio as of June 30, 2026 and March 31, 2026:
Current wording
The following table presents weighted-average yield metrics for our portfolio for the three months ended September 30, 2026 and June 30, 2026:
Previous wording
For the three months ended June 30, 2026, the weighted-average performing income yield on interest-bearing investments decreased to 12.1% from 12.5% during the prior quarter. This decrease was primarily attributable to the reversal of previously accrued interest income on debt investments to one portfolio company placed on non-accrual status during the quarter and a decrease in the effective yields of our Structured Finance Securities.
Current wording
For the three months ended September 30, 2026, the weighted-average performing income yield on interest-bearing investments increased to 13.1% from 12.1% during the prior quarter. This increase was primarily attributable to an increase in non-recurring prepayment fees and Net Loan Fees related to the full repayment of certain debt investments.
Previous wording
Weighted-average yields of our investments are 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 yields will remain at their current levels. As of June 30, 2026, 93% 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
Weighted-average yields of our investments are 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 yields will remain at their current levels. As of September 30, 2026, 92% of our total loan and mezzanine debt investments, 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
As of June 30, 2026 and December 31, 2025, 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 $123.4 million and $106.4 million, respectively, and $130.3 million and $116.3 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.
Current wording
As of September 30, 2026 and December 31, 2025, 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 $86.6 million and $70.0 million, respectively, and $130.3 million and $116.3 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 June 30, 2026, 100% of our loan portfolio and 49% of our total portfolio consisted of first lien and second lien loans, based on fair value.
Current wording
As of September 30, 2026, 100% of our loan portfolio and 44% of our total portfolio consisted of first lien and second lien loans, based on fair value.
Previous wording
As of June 30, 2026, the three largest industries of our Portfolio Company Investments by fair value, were: (1) Manufacturing (40.9%); (2) Health Care and Social Assistance (15.4%); and (3) Real Estate and Rental and Leasing (8.4%), totaling an aggregate of approximately 64.7% 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, 2026, the three largest industries of our Portfolio Company Investments by fair value, were: (1) Manufacturing (43.7%); (2) Real Estate and Rental and Leasing (11.6%); and (3) Professional, Scientific, and Technical Services (10.1%), totaling an aggregate of approximately 65.4% 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, 2026, the aggregate amortized cost and fair value of non-performing Structured Finance Securities were $7.2 million and $1.1 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%, because the remaining residual distributions are anticipated to be recognized as a return of capital. As of September 30, 2026, the aggregate amortized cost and fair value of non-performing Structured Finance Securities was $6.9 million and $1.0 million, respectively.
Previous wording
During the six months ended June 30, 2026, we sold Structured Finance Securities for net proceeds of $11.0 million, resulting in an aggregate net realized loss of $6.1 million.
Current wording
During the nine months ended September 30, 2026, we sold Structured Finance Securities for net proceeds of $13.4 million, resulting in an aggregate net realized loss of $13.9 million.
Previous wording
The following is a summary of our investment activity for the three months ended June 30, 2026 and March 31, 2026, and the six months ended June 30, 2026 and 2025 (dollar amounts in thousands):
Current wording
The following is a summary of our investment activity for the three months ended September 30, 2026 and June 30, 2026, and the nine months ended September 30, 2026 and 2025 (dollar amounts in thousands):
Previous wording
During the six months ended June 30, 2026, our first lien debt investment in Redstone HoldCo 2 LP (F/K/A RSA Security) underwent a restructuring through which our first lien debt investment was exchanged for a combination of new first lien debt investments in the portfolio company at a price equal to 63% of par. In connection with the transaction, we recognized a realized loss of $0.6 million on the debt restructure corresponding to the amount forgiven upon the exchange. As of June 30, 2026, our new first lien debt investments had an aggregate amortized cost of and fair value of $1.1 million and $1.0 million, respectively.
Current wording
During the nine months ended September 30, 2026, our first lien debt investment in Redstone HoldCo 2 LP underwent a restructuring through which our first lien debt investment was exchanged for a combination of new first lien debt investments in the portfolio company at a price equal to 63% of par. In connection with the transaction, we recognized a realized loss of $0.6 million on the debt restructure corresponding to the amount forgiven upon the exchange. As of September 30, 2026, our new first lien debt investments had an aggregate amortized cost and fair value of $1.1 million and $1.0 million, respectively.
Previous wording
Comparison of the three months ended June 30, 2026 and March 31, 2026 and comparison of the six months ended June 30, 2026 and 2025
Current wording
Comparison of the three months ended September 30, 2026 and June 30, 2026 and comparison of the nine months ended September 30, 2026 and 2025
Previous wording
Consolidated operating results for the three months ended June 30, 2026 and March 31, 2026, and the six months ended June 30, 2026 and 2025 are as follows (in thousands):
Current wording
Consolidated operating results for the three months ended September 30, 2026 and June 30, 2026, and the nine months ended September 30, 2026 and 2025 are as follows (in thousands):
Previous wording
Total investment income for the six months ended June 30, 2026 decreased $5.0 million compared to the corresponding period in the prior year, primarily due to a decrease in total interest income of $6.0 million, partially offset by an increase in total dividend income of $1.1 million.
Current wording
For the three months ended September 30, 2026, total investment income decreased from $6.8 million in the prior quarter to $5.9 million, primarily due to a decrease in interest income of $1.1 million, partially offset by an increase in non-recurring fee income of $0.2 million.
Previous wording
For the three months ended June 30, 2026, interest income decreased by $1.2 million compared to the prior quarter, primarily due to a smaller average debt investment portfolio, at cost, the placement of loans to a portfolio company on non-accrual status and a decrease in the effective yields on our Structured Finance Securities.
Current wording
For the three months ended September 30, 2026, interest income decreased by $1.1 million compared to the prior quarter, primarily due to a smaller average debt investment portfolio, at cost, the placement of loans to portfolio companies on non-accrual status, and lower CLO subordinated note 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.
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, 2026, total fee income increased by $0.2 million compared to the prior quarter, primarily due to an increase in prepayment fees related to the full repayment of certain debt investments.
Previous wording
Operating expenses for the three months ended June 30, 2026 and March 31, 2026, and the six months ended June 30, 2026 and 2025 are presented below (in thousands):
Current wording
Operating expenses for the three months ended September 30, 2026 and June 30, 2026, and the nine months ended September 30, 2026 and 2025 are presented below (in thousands):
Previous wording
Interest expense for the three months ended June 30, 2026 decreased $0.2 million compared to the prior quarter, primarily due to a decrease of $13.0 million in our average outstanding debt balances compared to the prior quarter. During the quarter ended June 30, 2026, we reduced the aggregate outstanding balance of our revolving credit facilities by $16.7 million.
Current wording
Interest expense for the three months ended September 30, 2026 decreased $0.6 million compared to the prior quarter, primarily due to a decrease of $37.2 million in our average outstanding debt balances compared to the prior quarter. During the quarter ended September 30, 2026, we redeemed $20.0 million of our 7.50% Unsecured Notes Due July 2028 and reduced the outstanding balance of our Natixis Facility by $11.4 million.
Previous wording
For the three months ended June 30, 2026, the base management fee waiver of $0.2 million was due to OFS Advisor agreeing to waive 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.
Current wording
For the three months ended September 30, 2026, the base management fee waiver of $0.2 million was due to the waiver by OFS Advisor of 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.
Previous wording
Total expenses, net of the base management fee waivers, for the six months ended June 30, 2026 decreased $1.8 million compared to the corresponding period in the prior year.
Current wording
Total expenses, net of the base management fee waivers, for the nine months ended September 30, 2026 decreased $4.1 million compared to the corresponding period in the prior year.
Previous wording
Base management fees, net of the fee waivers, for the six months ended June 30, 2026 decreased $0.7 million compared to the corresponding period in the prior year, primarily due to a decrease in our total investment portfolio, at fair value.
Current wording
Base management fees, net of the fee waivers, for the nine months ended September 30, 2026 decreased $1.0 million compared to the corresponding period in the prior year, primarily due to a decrease in our total investment portfolio, at fair value.
Previous wording
Income Incentive Fees for the six months ended June 30, 2026 decreased $0.7 million compared to the corresponding period in the prior year, primarily due to a decrease in our net investment income of $3.3 million.
Current wording
Income Incentive Fees for the nine months ended September 30, 2026 decreased $1.4 million compared to the corresponding period in the prior year, primarily due to a decrease in our net investment income of $5.5 million.
Previous wording
Net gain (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 June 30, 2026 and March 31, 2026, and the six months ended June 30, 2026 and 2025 were as follows (in thousands):
Current wording
Net gain (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, 2026 and June 30, 2026, and the nine months ended September 30, 2026 and 2025 were as follows (in thousands):
Previous wording
Net gain (loss) on investments for the six months ended June 30, 2026 and 2025
Current wording
Net gain (loss) on investments for the nine months ended September 30, 2026 and 2025
Previous wording
For the six months ended June 30, 2026, we recognized a net loss on investments of $9.4 million, comprised of net realized losses of $17.3 million, partially offset by net unrealized appreciation of $8.0 million.
Current wording
For the nine months ended September 30, 2026, we recognized a net loss on investments of $21.3 million, comprised of net realized losses of $25.1 million, partially offset by net unrealized appreciation, net of taxes, of $3.9 million. The net loss on investments during the period was primarily due to net realized and unrealized losses of $19.9 million on our Structured Finance Securities.
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
During the six months ended June 30, 2026, we fully repaid and terminated the BNP Facility, and, as a result, we recognized a loss on extinguishment of debt of $0.1 million related to the acceleration of deferred financing costs.
Current wording
During the nine months ended September 30, 2026, we fully repaid and terminated the BNP Facility, and, as a result, we recognized a loss on extinguishment of debt of $0.1 million related to the acceleration of deferred financing costs.
Previous wording
During the six months ended June 30, 2026, we amended the Banc of California Credit Facility to, among other things, reduce the maximum facility amount from $25.0 million to $15.0 million, and, as a result, we recognized a loss on extinguishment of debt of less than $0.1 million related to the acceleration of deferred financing costs.
Current wording
During the nine months ended September 30, 2026, we amended the Banc of California Credit Facility to, among other things, reduce the maximum facility amount from $25.0 million to $15.0 million, and, as a result, we recognized a loss on extinguishment of debt of less than $0.1 million related to the acceleration of deferred financing costs.
Previous wording
As of June 30, 2026, we held cash and cash equivalents of $4.0 million, which included $2.9 million held by OFSCC-FS. Distributions from OFSCC-FS to the Parent are restricted by the terms and conditions of the Natixis Facility.
Current wording
As of September 30, 2026, we held cash and cash equivalents of $3.1 million, which included $1.7 million held by OFSCC-FS. Distributions from OFSCC-FS to the Parent are restricted by the terms and conditions of the Natixis Facility.
Previous wording
As of June 30, 2026, we had an unused commitment of $15.0 million under our Banc of California Credit Facility, as well as an unused commitment of $43.2 million under our Natixis Facility, both of which are subject to borrowing base requirements and other covenants.
Current wording
As of September 30, 2026, we had an unused commitment of $15.0 million under our Banc of California Credit Facility, as well as an unused commitment of $54.6 million under our Natixis Facility, both of which are subject to borrowing base requirements and other covenants.
Previous wording
As of June 30, 2026, the aggregate amount outstanding of the senior securities issued by us was $185.8 million, for which our asset coverage was 161%, 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, 2026, the aggregate amount outstanding of the senior securities issued by us was $154.4 million, for which our asset coverage was 164%, 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
Cash from net investment income includes all other cash flows from operating activities reported in our statements of cash flows. Net purchases and originations/repayments and sales of portfolio investments includes the purchase and origination of portfolio investments, proceeds from principal payments on portfolio investments, proceeds from sale or redemption of portfolio investments, changes in receivable for investments sold, payable from investments purchased as reported in our statements of cash flows, as well as differences in proceeds from distributions received from Structured Finance Securities relative to accretion of interest income on Structured Finance Securities.
Current wording
Cash from net investment income includes all other cash flows from operating activities reported in our statements of cash flows. Net purchases and originations/repayments and sales of portfolio investments includes the purchase and origination of portfolio investments, proceeds from principal payments on portfolio investments, proceeds from sale or redemption of portfolio investments, changes in receivable for investments sold, payable for investments purchased as reported in our statements of cash flows, as well as differences in proceeds from distributions received from Structured Finance Securities relative to accretion of interest income on Structured Finance Securities.
Showing the first 40 of 58 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
On August 28, 2026, we issued notices to the holders of the Unsecured Notes Due July 2028 regarding the exercise of our option to redeem on September 29, 2026, $20.0 million of the issued and outstanding amount of such notes, plus accrued interest of
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
OFS Advisor had contractually agreed to reduce its base management fee for the entire year at the beginning of the year. As of June 30, 2026, there is no active ongoing fee waiver or reduction agreement in place with OFS Advisor for the remainder of 2026.
Previous report — wording carried elsewhere
Bancof 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, foreign loans, 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 our partnership interests in SBIC I LP.