8-K: Oxford Square Capital Reports Q4 & FY25 Results, NAV Declines

Sentiment:

Quarterly and Annual Financial Results 3 March 2026 8:26 AM

📋All filings for Oxford Square Capital CORP

Oxford Square Capital Corp. announced its fourth quarter and fiscal year 2025 financial results, revealing a significant decline in net asset value per share and a net decrease in net assets from operations, alongside the declaration of future common stock distributions.

Capital raiseDuring the fourth quarter of 2025, the company issued approximately 4.3 million shares of common stock pursuant to an at-the-market offering.This offering resulted in net proceeds of approximately $7.9 million after deducting sales agents' commissions and offering expenses.

Worse than expectedNet asset value (NAV) per share significantly declined to $1.69, a notable drop from $1.95 in the prior quarter and $2.30 at the end of the previous fiscal year.The company reported a net decrease in net assets resulting from operations of $12.9 million for Q4 2025 and a substantial $18.7 million for the full year 2025, reversing the positive trend seen in 2024.Net investment income (NII) decreased both quarter-over-quarter and year-over-year, indicating reduced earnings power.Total expenses increased both quarter-over-quarter and year-over-year, impacting profitability.Total returns based on both market value (-11.92%) and net asset value (-8.26%) for the full year 2025 were negative, contrasting with positive NAV returns in 2024.

Summary

Net asset value (NAV) per share decreased to $1.69 as of December 31, 2025, down from $1.95 on September 30, 2025, and $2.30 at the end of 2024.
Net investment income (NII) for Q4 2025 was approximately $5.4 million, or $0.07 per share, a slight decrease from $5.6 million in Q3 2025.
Total investment income for Q4 2025 was approximately $10.4 million, an increase from $10.2 million in Q3 2025.
Total expenses for Q4 2025 increased to approximately $5.0 million, compared to $4.7 million in Q3 2025.
The company recorded a net decrease in net assets resulting from operations of approximately $12.9 million for Q4 2025, driven by $5.4 million NII, $2.3 million net realized losses, and $16.0 million net unrealized depreciation.
For the full fiscal year 2025, the company reported a net decrease in net assets resulting from operations of approximately $18.7 million, a significant shift from a $5.9 million increase in 2024.
Distributions of $0.035 per share were declared for the months ending April 30, 2026, May 31, 2026, and June 30, 2026.
During Q4 2025, investment activity included purchases of approximately $18.0 million and repayments of approximately $7.4 million, with no sales.
Approximately 4.3 million shares of common stock were issued through an at-the-market offering in Q4 2025, generating net proceeds of approximately $7.9 million.
As of December 31, 2025, preferred equity investments in one portfolio company with an aggregate fair value of approximately $5.0 million were on non-accrual status.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative report due to the significant decline in Net Asset Value, a net decrease in net assets from operations, and reduced net investment income, despite maintaining distributions. The increase in non-accrual investments and overall negative returns are concerning.

Positives

Total investment income for Q4 2025 slightly increased to approximately $10.4 million from $10.2 million in Q3 2025.
Net realized losses for the full year 2025 were approximately $17.0 million, a significant reduction compared to $96.2 million in 2024.
The company successfully raised approximately $7.9 million in net proceeds from an at-the-market common stock offering during Q4 2025.
Distributions on common stock were maintained at $0.035 per share for the upcoming three months (April, May, June 2026).

Negatives

Net asset value (NAV) per share significantly declined to $1.69 as of December 31, 2025, from $1.95 on September 30, 2025, and $2.30 at the end of 2024.
The company reported a net decrease in net assets resulting from operations of approximately $12.9 million for Q4 2025 and $18.7 million for the full year 2025, a reversal from an increase in 2024.
Net investment income (NII) for Q4 2025 decreased slightly to $5.4 million from $5.6 million in Q3 2025, and full-year NII decreased to $22.6 million in 2025 from $26.4 million in 2024.
Total expenses increased to approximately $5.0 million in Q4 2025 from $4.7 million in Q3 2025, and full-year expenses rose to $17.7 million in 2025 from $16.2 million in 2024.
The weighted average effective yield of CLO equity investments decreased to 8.6% as of December 31, 2025, from 9.7% as of September 30, 2025.
Net unrealized depreciation on investments was substantial, totaling approximately $16.0 million in Q4 2025 and $24.3 million for the full year 2025, a significant shift from appreciation in 2024.
Preferred equity investments in one portfolio company with a fair value of approximately $5.0 million were on non-accrual status as of December 31, 2025.
Total liabilities increased to $161.3 million as of December 31, 2025, from $139.1 million as of December 31, 2024, primarily due to an increase in notes payable.

Risks

The press release contains forward-looking statements subject to inherent uncertainties in predicting future results and conditions, and actual results could differ materially due to factors identified in SEC filings.

Future Outlook

The filing contains a standard forward-looking statement disclaimer, noting inherent uncertainties in predicting future results and conditions, and that actual results could differ materially from projections. No specific forward-looking guidance or estimates were provided beyond this general statement.

Industry Context

StockSavvy.ai notes that BDCs like Oxford Square Capital Corp., which invest in syndicated bank loans and CLO vehicles, are highly sensitive to credit market conditions and interest rate environments. The reported decline in NAV, net decrease in net assets from operations, and reduced CLO equity yields could reflect broader challenges in the credit markets, such as increased defaults or spread widening, or specific underperformance within the company's portfolio. The presence of non-accrual investments further underscores potential stress in underlying credit exposures, a common concern for BDCs navigating periods of economic uncertainty.

Related Party Transactions

Base Fee and Net Investment Income Incentive Fee payable to affiliate amounted to $1,036,058 as of December 31, 2025.

Stakeholder Impact

Shareholders are negatively impacted by the significant decrease in Net Asset Value per share and negative total returns for the year, although distributions have been maintained.
Creditors are impacted by the increase in total liabilities, particularly notes payable, which grew from $139.1 million to $161.3 million year-over-year.

Next Steps

A conference call was held on March 3, 2026, at 9:00 AM ET to discuss the fourth quarter results.
Supplemental investor information regarding the earnings press release has been made available on the company's website at www.oxfordsquarecapital.com.

Key Dates

Date	Description
December 31, 2021	End of fiscal year, NAV per share $4.92, Net investment income per common share $0.32, Total return based on Market Value 47.38%, Total return based on Net Asset Value 17.36%.
December 31, 2022	End of fiscal year, NAV per share $2.78, Net investment income per common share $0.42, Net decrease in net assets from operations $(1.72), Total return based on Market Value (14.11)%, Total return based on Net Asset Value (34.96)%.
December 31, 2023	End of fiscal year, NAV per share $2.55, Net investment income per common share $0.51, Net increase in net assets from operations $0.32, Total return based on Market Value 9.34%, Total return based on Net Asset Value 11.15%.
December 31, 2024	End of fiscal year, NAV per share $2.30, Net investment income per common share $0.42, Net increase in net assets from operations $0.09, Total return based on Market Value (1.64)%, Total return based on Net Asset Value 6.67%.
September 30, 2025	End of third quarter, NAV per share $1.95, Net investment income approximately $5.6 million or $0.07 per share, Total investment income approximately $10.2 million, Total expenses approximately $4.7 million.
December 31, 2025	End of fourth quarter and fiscal year, NAV per share $1.69, Net investment income approximately $5.4 million or $0.07 per share, Total investment income approximately $10.4 million, Total expenses approximately $5.0 million, Net decrease in net assets from operations approximately $12.9 million.
February 26, 2026	Board of Directors declared distributions on common stock for April, May, and June 2026.
March 3, 2026	Date of 8-K report, company issued press release announcing financial results and distributions, company made supplemental investor information available on its website, conference call held to discuss fourth quarter results.
April 16, 2026	Record date for the distribution for the month ending April 30, 2026.
April 30, 2026	Payment date for the distribution for the month ending April 30, 2026.
May 15, 2026	Record date for the distribution for the month ending May 31, 2026.
May 29, 2026	Payment date for the distribution for the month ending May 31, 2026.
June 16, 2026	Record date for the distribution for the month ending June 30, 2026.
June 30, 2026	Payment date for the distribution for the month ending June 30, 2026.

Recommendation

sell

The significant decline in Net Asset Value per share, coupled with a net decrease in net assets from operations and a reduction in net investment income, indicates deteriorating financial performance. The negative total returns based on both market value and NAV for the year, along with increased expenses and non-accrual investments, suggest fundamental challenges. While distributions are maintained, the underlying financial health points to potential further erosion of shareholder value, warranting a sell recommendation for risk-averse investors.

Keywords

Business Development Company, BDC, CLO, Collateralized Loan Obligation, Debt Investments, Equity Investments, Financial Results, Net Asset Value, Distributions, OXSQ, NASDAQ

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