DEF 14A: OFS Credit Company Announces 2024 Annual Meeting of Stockholders

OFS Credit Company will hold its 2024 Annual Meeting of Stockholders on August 15, 2024, to elect directors and ratify the selection of KPMG LLP as its independent registered public accounting firm.

Summary

• OFS Credit Company, Inc. will hold its 2024 Annual Meeting of Stockholders on August 15, 2024, in Chicago.
• Stockholders of record as of June 20, 2024, are entitled to vote.
• The meeting's purposes include electing two Class III directors: Mr. Jeffrey A. Cerny (elected by common and preferred stockholders voting together) and Ms. Kathleen M. Griggs (elected by preferred stockholders voting as a single class).
• The meeting will also ratify the selection of KPMG LLP as the company's independent registered public accounting firm for the fiscal year ending October 31, 2024.
• The company is providing access to proxy materials online, mailing a Notice of Internet Availability of Proxy Materials to many stockholders.
• Stockholders can vote online, by phone, or by mail.
• As of June 20, 2024, there were 16,174,054 shares of Common Stock and 2,440,000 shares of Preferred Stock outstanding.
• Thomas J. Herzfeld Advisors, Inc. beneficially owns 8.26% of the Common Stock.
• Karpus Management, Inc. beneficially owns 23.32% of the Preferred Stock.
• Eagle Point Credit Management LLC beneficially owns 13.15% of the Preferred Stock.

Sentiment

Score: 7

Explanation: The document is primarily informational and procedural, outlining the details of the upcoming annual meeting. The sentiment is neutral to slightly positive due to the routine nature of the event and the company's adherence to corporate governance standards.

Positives

• The company is utilizing a resource-conscious and cost-efficient distribution process for proxy materials by providing online access.
• All directors attended the 2023 annual meeting of stockholders, demonstrating their commitment.
• The board of directors has a Lead Independent Director to ensure independence and enhance management oversight.
• The company has established audit, compensation, and nominating and corporate governance committees, all comprised of independent directors.
• The company has a Code of Business Conduct and Insider Trading Policy in place.
• The company received exemptive relief from the SEC to permit co-investment in portfolio companies with certain other funds managed by OFS Advisor.

Negatives

• The incentive fee structure with OFS Advisor may create an incentive to invest in certain types of securities or increase debt outstanding more than would be the case in the absence of such compensation arrangement.
• Conflicts of interest may arise due to OFS Advisor and its affiliates managing other assets and funds with similar or overlapping investment strategies.
• The company is prohibited under the 1940 Act from participating in certain transactions with its affiliates without prior approval.
• The company may not be given the opportunity to participate in certain investments made by investment funds managed by OFS Advisor and its affiliates.

Risks

• The determination of fair value and unrealized gains and losses in the portfolio is subjective and dependent on a valuation process undertaken by OFS Advisor.
• Conflicts of interest may arise when the company makes an investment in conjunction with an investment being made by another account managed by OFS Advisor.
• Cybersecurity risks, including potential breaches of information technology systems, pose a threat to the company.
• The board of directors oversight function cannot eliminate all risks or ensure that particular events do not adversely affect the value of investments.

Future Outlook

The board of directors will continue to review corporate governance policies and practices and compare them to those suggested by various authorities and the practices of other public companies.

Management Comments

• Bilal Rashid, Chairman of the Board of Directors, President and Chief Executive Officer, expressed gratitude for stockholders' ongoing support and interest in OFS Credit Company, Inc.

Industry Context

This announcement is typical for publicly traded companies, particularly investment companies, as they are required to hold annual meetings to elect directors and address other corporate matters.

Comparison to Industry Standards

• The corporate governance practices described, such as having independent directors and audit, compensation, and nominating committees, are standard for publicly traded companies and align with Nasdaq listing requirements.
• The fee structure with OFS Advisor, including a base management fee and incentive fee, is common in the investment management industry, particularly for business development companies (BDCs).
• The related-party transaction disclosures are consistent with regulatory requirements for investment companies under the 1940 Act.

Corporate Governance

Related Party Transactions

• The company has entered into an Investment Advisory and Management Agreement with OFS Advisor, paying a base management fee and incentive fee.
• The company has entered into a license agreement with Orchard First Source Asset Management, LLC (OFSAM) for the use of the name OFS.
• The company has entered into an Administration Agreement with OFS Capital Services, LLC (OFS Services) for office facilities, equipment, and administrative services.
• OFS Advisor and its affiliates manage other assets and funds, which may create conflicts of interest.
• The company is prohibited under the 1940 Act from participating in certain transactions with its affiliates without prior approval.

Stakeholder Impact

• Stockholders have the opportunity to vote on the election of directors and the ratification of the independent registered public accounting firm.
• The company's corporate governance practices aim to ensure that OFS Credit is managed for the long-term benefit of its stockholders.
• The company's privacy policy outlines how it collects, uses, and shares non-public personal information of its stockholders.
• The company's risk management processes aim to protect the value of investments and ensure responsible decision-making.

Next Steps

• Stockholders are encouraged to vote their shares by proxy online, by phone, or by mail.
• The company will hold the 2024 Annual Meeting of Stockholders on August 15, 2024.
• The board of directors will reconsider its appointment of KPMG LLP if the ratification proposal is not approved at the Annual Meeting.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Directors, KPMG, Stockholders, OFS Credit Company, Corporate Governance, Investment Advisory, Related Party Transactions