10-K: Oxford Square Capital Corp. Details Securities in Annual 10-K Filing

Oxford Square Capital Corp. outlines its registered securities, including common stock and notes due in 2026 and 2028, in its annual 10-K filing.

Summary

• Oxford Square Capital Corp. (OXSQ) has filed its annual report on Form 10-K, detailing its registered securities as of December 31, 2024.
• The company has three classes of securities registered under Section 12 of the Securities Exchange Act of 1934: common stock, 6.25% notes due 2026, and 5.50% notes due 2028.
• As of December 31, 2024, there were 69,758,938 shares of common stock outstanding.
• The company's common stock is listed on the NASDAQ Global Select Market under the ticker symbol OXSQ.
• The 6.25% notes due 2026, with approximately $44.8 million outstanding as of December 31, 2024, are listed on the NASDAQ under the symbol OXSQZ and mature on April 30, 2026.
• The 5.50% notes due 2028, with $80.5 million outstanding as of December 31, 2024, are listed on the NASDAQ under the symbol OXSQG and mature on July 31, 2028.
• The document describes the rights and features of the common stock, including voting rights, distribution entitlements, and liquidation preferences.
• It also details the terms of the 2026 and 2028 notes, including interest rates, payment dates, redemption options, and events of default.
• The filing includes information on corporate governance matters, such as the classified board of directors, stockholder action procedures, and advance notice provisions for nominations and proposals.
• The document also discusses certain provisions of Maryland law and the company's charter and bylaws that could make it more difficult for a potential acquirer to take over the company.

Sentiment

Score: 6

Explanation: The document is primarily descriptive, outlining the company's structure, securities, and legal and regulatory environment. The sentiment is neutral, with a mix of positive aspects (listing on NASDAQ, authorized stock reclassification) and negative aspects (subordination of notes, potential for takeover attempts).

Positives

• The company has listed its common stock and notes on the NASDAQ Global Select Market, providing liquidity for investors.
• The board of directors is authorized to classify and reclassify any unissued shares of stock into other classes or series of stock without obtaining stockholder approval.
• The company's charter contains a provision limiting the liability of its directors and officers to the maximum extent permitted by Maryland law.
• The company is permitted to consolidate or merge with another entity or sell all or substantially all of its assets to another entity under certain conditions.

Negatives

• The company's 2026 and 2028 indentures do not contain provisions that give the holders protection in the event the company issues a large amount of debt or is acquired by another entity.
• The 2028 Notes are structurally subordinated to all existing and future indebtedness and other obligations of any of the Company's subsidiaries, CLO vehicles in which we hold an equity interest and financing vehicles since the 2028 Notes are obligations exclusively of Oxford Square Capital Corp. and not of any of our subsidiaries.

Risks

• The 2026 Notes are effectively subordinated to all of the company's existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness.
• The company's subsidiaries' assets will not be directly available to satisfy the claims of the company's creditors, including holders of the 2026 Notes.
• Certain provisions of Maryland law and the company's charter and bylaws could deter takeover attempts and have an adverse impact on the price of the company's common stock.
• The company is exposed to the risks of leverage, which may be considered a speculative investment technique.

Future Outlook

The company intends to continue to operate as a BDC and qualify as a RIC, distributing a minimum of 90% of its ordinary income and short-term capital gains to stockholders.

Industry Context

The document provides insight into the competitive landscape for providing financing to non-public companies, including private equity funds, venture capital funds, and traditional financial institutions.

Comparison to Industry Standards

• The document mentions that shares of BDCs have frequently traded at a market price that is less than the net asset value that is attributable to those shares.
• The document mentions that many of the entities that compete with Oxford Square Capital Corp. may have greater financial and managerial resources than the company has.

Related Party Transactions

• The company has entered into an Investment Advisory Agreement with Oxford Square Management, LLC, which is controlled by Oxford Funds, LLC and Charles M. Royce.
• The company has entered into an Administration Agreement with Oxford Funds, LLC, under which Oxford Funds provides administrative services for the company.

Stakeholder Impact

• The document outlines the rights and protections afforded to stockholders, including voting rights and distribution entitlements.
• The document also describes the terms and conditions of the company's notes, which are relevant to noteholders.

Next Steps

• The company intends to continue to operate as a BDC and qualify as a RIC.
• The company intends to distribute a minimum of 90% of its ordinary income and short-term capital gains to stockholders.

Key Dates