NASDAQ: OFS
OFS Capital CorpCIK 0001487918
We are an externally managed, closed-end, non-diversified management investment company and have elected to be treated as a BDC under the 1940 Act, which imposes certain investment restrictions on our portfolio. Our investment objective is to provide our stockholders with both current income and… About this business →
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Latest financial statements
From 10-Q filed Jul 31, 2026 (period ending Jun 30, 2026). As printed on the EDGAR/iXBRL face — not generated by the model.
Consolidated Statements of Operations (Unaudited)
(Dollar amounts in thousands, except per share data)
| Description | Three months ended June 30, 2026 | Three months ended June 30, 2025 | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
|---|---|---|---|---|
| Investment income | ||||
| Interest income: | ||||
| Non-control/non-affiliate investments | 6,213 | 9,621 | 13,611 | 19,201 |
| Affiliate investments | — | — | 13 | — |
| Total interest income | 6,213 | 9,621 | 13,624 | 19,201 |
| Payment-in-kind interest and dividend income: | ||||
| Non-control/non-affiliate investments | 85 | 398 | 172 | 786 |
| Affiliate investments | 514 | 297 | 1,014 | 584 |
| Total payment-in-kind interest and dividend income | 599 | 695 | 1,186 | 1,370 |
| Dividend income: | ||||
| Non-control/non-affiliate investments | 11 | 10 | 22 | 21 |
| Affiliate investments | — | — | 874 | — |
| Total dividend income | 11 | 10 | 896 | 21 |
| Fee income: | ||||
| Non-control/non-affiliate investments | 14 | 150 | 35 | 179 |
| Total investment income | 6,837 | 10,476 | 15,741 | 20,771 |
| Expenses | ||||
| Interest expense | 3,734 | 3,842 | 7,623 | 7,700 |
| Base management fee | 1,340 | 1,479 | 2,775 | 3,028 |
| Income Incentive Fee | — | 821 | 408 | 1,151 |
| Professional fees | 345 | 403 | 708 | 839 |
| Administration fee | 367 | 382 | 693 | 776 |
| Other expenses | 246 | 266 | 485 | 529 |
| Total expenses before base management fee waiver | 6,032 | 7,193 | 12,692 | 14,023 |
| Base management fee waiver (see Note 3) | (203) | — | (423) | — |
| Total expenses, net of base management fee waiver | 5,829 | 7,193 | 12,269 | 14,023 |
| Net investment income | 1,008 | 3,283 | 3,472 | 6,748 |
| Net realized and unrealized gain (loss) on investments | ||||
| Net realized loss on non-control/non-affiliate investments | (6,018) | (4,191) | (17,319) | (6,778) |
| Net unrealized appreciation (depreciation) on non-control/non-affiliate investments | (2,848) | 309 | (6,563) | (7,611) |
| Net unrealized appreciation (depreciation) on affiliate investments | 13,429 | (9,179) | 14,867 | (9,523) |
| Deferred tax (expense) benefit on net unrealized appreciation (depreciation) | (4) | 147 | (348) | 246 |
| Net gain (loss) on investments | 4,559 | (12,914) | (9,363) | (23,666) |
| Loss on extinguishment of debt | — | — | (130) | — |
| Net increase (decrease) in net assets resulting from operations | 5,567 | (9,631) | (6,021) | (16,918) |
| Earnings (loss) per common share basic and diluted | 0.42 | (0.72) | (0.44) | (1.26) |
| Basic and diluted weighted-average common shares outstanding | 13,398,078 | 13,398,078 | 13,398,078 | 13,398,078 |
Consolidated Statements of Assets and Liabilities (Unaudited)
(Dollar amounts in thousands, except per share data)
| Description | June 30, 2026 | December 31, 2025 |
|---|---|---|
| Assets | ||
| Investments, at fair value: | ||
| Non-control/non-affiliate investments (amortized cost of $247,171 and $300,748, respectively) | 181,930 | 242,070 |
| Affiliate investments (amortized cost of $28,666 and $27,652, respectively) | 115,826 | 99,945 |
| Total investments, at fair value (amortized cost of $275,837 and $328,400, respectively) | 297,756 | 342,015 |
| Cash and cash equivalents | 3,982 | 3,359 |
| Interest and dividends receivable | 525 | 719 |
| Receivable for investments sold | 280 | — |
| Prepaid expenses and other assets | 1,921 | 613 |
| Total assets | 304,464 | 346,706 |
| Liabilities | ||
| Revolving lines of credit | 36,800 | 55,450 |
| Unsecured Notes (net of deferred debt issuance costs of $2,308 and $2,812, respectively) | 146,692 | 162,188 |
| Interest payable | 2,459 | 2,269 |
| Distribution payable | 2,277 | — |
| Payable to adviser and affiliates (Note 3) | 1,692 | 2,264 |
| Other liabilities | 1,932 | 1,347 |
| Total liabilities | 191,852 | 223,518 |
| Commitments and contingencies (Note 6) | ||
| Net assets | ||
| Preferred stock, par value of $0.01 per share, 2,000,000 shares authorized, -0- shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively | — | — |
| Common stock, par value of $0.01 per share, 100,000,000 shares authorized, 13,398,078 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively | 134 | 134 |
| Paid-in capital in excess of par | 174,195 | 174,195 |
| Total accumulated losses | (61,717) | (51,141) |
| Total net assets | 112,612 | 123,188 |
| Total liabilities and net assets | 304,464 | 346,706 |
| Number of common shares outstanding | 13,398,078 | 13,398,078 |
| Net asset value per share | 8.41 | 9.19 |
Consolidated Statements of Cash Flows (Unaudited)
(Dollar amounts in thousands)
| Description | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
|---|---|---|
| Cash flows from operating activities | ||
| Net decrease in net assets resulting from operations | (6,021) | (16,918) |
| Adjustments to reconcile net decrease in net assets resulting from operations to net cash provided by operating activities: | ||
| Net realized loss on investments, net of taxes | 17,319 | 6,778 |
| Loss on extinguishment of debt | 130 | — |
| Net unrealized (appreciation) depreciation on investments, net of deferred taxes | (7,956) | 16,888 |
| Amortization of Net Loan Fees | (245) | (395) |
| Amendment fees received | 42 | 58 |
| Payment-in-kind interest and dividend income | (1,186) | (1,407) |
| Accretion of interest income on Structured Finance Securities | (4,533) | (5,844) |
| Amortization of deferred debt issuance costs | 722 | 743 |
| Purchase and origination of portfolio investments | (4,256) | (22,918) |
| Proceeds from principal payments on portfolio investments | 9,955 | 8,165 |
| Proceeds from sale or redemption of portfolio investments | 30,512 | 18,413 |
| Proceeds from distributions received from portfolio investments | 4,859 | 6,934 |
| Changes in operating assets and liabilities: | ||
| Interest and dividend receivable | 194 | 458 |
| Receivable for investments sold | (280) | 9,247 |
| Interest payable | 190 | (36) |
| Payable to adviser and affiliates | (572) | (286) |
| Payable for investments purchased | — | (1,802) |
| Other assets and liabilities | 271 | 153 |
| Net cash provided by operating activities | 39,145 | 18,231 |
| Cash flows from financing activities | ||
| Distributions paid to common stockholders | (2,278) | (9,111) |
| Borrowings under revolving lines of credit | 75,200 | 15,250 |
| Repayments under revolving lines of credit | (93,850) | (20,200) |
| Redemption of Unsecured Notes | (16,000) | — |
| Payment of deferred financing costs | (1,594) | — |
| Net cash used in financing activities | (38,522) | (14,061) |
| Net increase in cash and cash equivalents | 623 | 4,170 |
| Cash and cash equivalents | ||
| Beginning of period | 3,359 | 6,068 |
| End of period | 3,982 | 10,238 |
| Supplemental Disclosure of Cash Flow Information: | ||
| Cash paid for interest | 6,711 | 6,993 |
Amounts as printed on the EDGAR/iXBRL face — (Dollar amounts in thousands, except per share data); (Dollar amounts in thousands). Labels, columns, and figures are the filing face, not a GAAP stencil. Interactive statements & notes on EDGAR ↗
About OFS Capital Corp
Source: Item 1 (Business) from the 10-K filed March 3, 2026. Description as filed by the company with the SEC.
Item 1. Business
GENERAL
We are an externally managed, closed-end, non-diversified management investment company and have elected to be treated as a BDC under the 1940 Act, which imposes certain investment restrictions on our portfolio. Our investment objective is to provide our stockholders with both current income and capital appreciation primarily through debt investments and, to a lesser extent, equity investments. Our investment strategy is to maintain a credit investment portfolio focused primarily on middle-market companies in the United States. We use the term “middle-market” to refer to companies that may exhibit one or more of the following characteristics: number of employees between 150 and 2,000; revenues between $15 million and $300 million; annual EBITDA between $5 million and $50 million; generally, private companies owned by private equity firms or owners/operators; and enterprise value between $10 million and $500 million. For additional information about how we define the middle-market, see “—Investment Criteria/Guidelines.”
Our investment strategy focuses primarily on investments in middle-market companies in the United States, including investments in senior secured loans, which are comprised of first lien, second lien and unitranche loans, as well as investments in subordinated loans and, to a lesser extent, common stock, preferred stock and other equity securities. Our investments may be directly originated or may be purchased on a secondary basis in the U.S. leveraged loan market for Broadly Syndicated Loans (as defined below). As a BDC, we must not acquire any assets other than “qualifying assets” as specified in the 1940 Act unless, at the time the acquisition is made, at least 70% of our assets, as defined by the 1940 Act, are qualifying assets (with certain limited exceptions). Qualifying assets include investments in “eligible portfolio companies.” Under the relevant SEC rules, the term “eligible portfolio company” includes all private companies, companies whose securities are not listed on a national securities exchange, and certain public companies that have listed their securities on a national securities exchange and have a market capitalization of less than $250 million, in each case organized in the United States. Conversely, we may invest up to 30% of our portfolio in opportunistic investments not otherwise eligible under BDC regulations. Specifically, as part of this 30% basket, we may consider investments in investment funds that are operating pursuant to certain exceptions to the 1940 Act and in advisers to similar investment funds, as well as in debt or equity of middle-market portfolio companies located outside of the United States, and debt and equity of public companies that do not meet the definition of eligible portfolio companies because their market capitalization of publicly traded equity securities exceeds the levels provided for in the 1940 Act. We have made, and may continue to make, opportunistic investments in Structured Finance Securities and other non-qualifying assets (discussed below), consistent with our investment strategy. As of December 31, 2025 and 2024, approximately 81% and 80% of our investments were qualifying assets, respectively.
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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 comprised of first lien loans and second lien loans, respectively. As of December 31, 2025, the fair value of our equity investments totaled $100.6 million in 15 portfolio companies, and the fair value of our 14 Structured Finance Security investments totaled $61.6 million.
We execute on our investment strategy, in part, through OFSCC-FS, which established the Natixis Facility on February 18, 2026. 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. On a stand-alone basis, OFSCC-FS held approximately $125.0 million and $151.0 million in total assets as of December 31, 2025 and 2024, respectively, which accounted for approximately 36% and 35% of our consolidated total assets, respectively.
We also execute our investment strategy, in part, by investing in Structured Finance Securities. We believe OFS Advisor is uniquely positioned, given its expertise in structured credit and managing CLOs, to make opportunistic investments in Structured Finance Securities, through which we aim to target attractive risk-adjusted returns. During the years ended December 31, 2025 and 2024, we purchased $19.6 million and $27.4 million of Structured Finance Securities, respectively.
We historically had executed our investment strategy, in part, through SBIC I LP, a former licensee under the SBA’s SBIC program. On March 1, 2024, SBIC I LP fully repaid its outstanding SBA debentures totaling $31.9 million, and, on April 17, 2024, surrendered its license to operate as a SBIC.
A BDC is generally not permitted to incur indebtedness unless, immediately after such borrowing, it has an asset coverage ratio for total borrowings of at least 200% (i.e., the amount of debt may not exceed 50% of the value of its assets). However, Section 61(a)(2) of the 1940 Act permits BDCs to be subject to a minimum asset coverage ratio of 150%, if specific
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conditions are satisfied, when issuing senior securities (i.e., the amount of debt may not exceed 66 2/3% of the value of its assets).
On May 3, 2018, our Board, including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) thereof, approved the application of the reduced asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act. As a result, effective May 3, 2019, our minimum required asset coverage ratio decreased from 200% to 150%. See “Part 1, Item 1A. Risk Factors—Risks Related to our Business and Structure—We are subject to reduced asset coverage for borrowings, which increases the maximum amount of leverage we may incur.”
Consistent with our strategy to maintain a leveraged portfolio primarily comprised of credit investments, our total outstanding debt of $220.5 million and $248.4 million resulted in a statutory asset coverage ratio of 156% and 169% as of December 31, 2025 and December 31, 2024, respectively.
We have elected to be treated for tax purposes as a RIC under Subchapter M of the Code. To continue to qualify for tax treatment as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements. Pursuant to this election, we generally are not required to pay corporate-level taxes on any income we distribute to our stockholders as dividends.
Our investment activities are managed by OFS Advisor and supervised by our Board, a majority of whom are independent of us, OFS Advisor and its affiliates. Under the Investment Advisory Agreement, we have agreed to pay OFS Advisor an annual base management fee based on the average value of our total assets (other than cash and cash equivalents but including assets purchased with borrowed funds and including assets owned by any consolidated entity) as well as an incentive fee based on our investment performance. OFS Advisor also serves as the investment adviser to other funds, including HPCI and OCCI. Additionally, OFS Advisor provides advisory and sub-advisory services to various funds, including: (i) CMFT Securities Investments, LLC, a wholly owned subsidiary of CIM Real Estate Finance Trust, Inc., a corporation that qualifies as a real estate investment trust; and (ii) CIM Real Assets & Credit Fund, an externally managed registered investment company under the 1940 Act that operates as an interval fund and invests primarily in a combination of real estate, credit and related investments. See “