UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM 10-K

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☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, ~~2024~~2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER: 814-00638

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OXFORD SQUARE CAPITAL CORP.

(Exact name of registrant as specified in its charter)

_______________________________

Maryland		20-0188736
(State of Incorporation)		(I.R.S. Employer Identification Number)

8 Sound Shore Drive, Suite 255
Greenwich, CT 06830
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (203) 983-5275

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange On Which Registered
Common Stock, par value $0.01 per share	OXSQ	NASDAQ Global Select Market LLC
Common stock, par value $0.01 per share	OXSQ	NASDAQ Global Select Market LLC
6.25% Notes due 2026	OXSQZ	NASDAQ Global Select Market LLC
5.50% Notes due 2028	OXSQG	NASDAQ Global Select Market LLC
7.75% Notes due 2030	OXSQH	NASDAQ Global Select Market LLC

Securities registered pursuant to Section 12(g) of the Act:
None

_______________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒.

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definition of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

		Large accelerated filer ☐		Accelerated filer ☐
		Non-accelerated filer ☒		Smaller reporting company ☐
				Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 USC. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☐ No ☒.

The aggregate market value of common stock held by non-affiliates of the Registrant on as of the last business day of the Registrant’s most recently completed second fiscal quarter, based on the closing price on that date of $2.9423 on the NASDAQ Global Select Market, was $~~165~~155,~~164~~451,~~578~~737. For the purposes of calculating this amount only, all directors and executive officers of the Registrant have been treated as affiliates. There were 6987,~~789~~510,~~527~~727 shares of the Registrant’s common stock outstanding as of ~~February~~March 272, ~~2025~~2026.

OXFORD SQUARE CAPITAL CORP.FORM 10-K FOR THE FISCAL YEARENDED DECEMBER 31, ~~2024~~2025

TABLE OF CONTENTS

		Page
PART I
ITEM 1.	BUSINESS	1
ITEM 1A.	RISK FACTORS	26
ITEM 1B.	UNRESOLVED STAFF COMMENTS	57
ITEM 1C.	~~Cybsersecurity~~CYBERSECURITY	57
ITEM 2.	PROPERTIES	58
ITEM 3.	LEGAL PROCEEDINGS	58
ITEM 4.	MINE SAFETY DISCLOSURES	58
PART II
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	59
ITEM 6.	[RESERVED]	63
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	63
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	80
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	F-1
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON ACCOUNTING AND FINANCIAL DISCLOSURE	82
ITEM 9A.	CONTROLS AND PROCEDURES	82
ITEM 9B.	OTHER INFORMATION	83
ITEM 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	83
PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	84
ITEM 11.	EXECUTIVE COMPENSATION	87
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	8889
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	90
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	9192
PART IV
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	93
ITEM 16.	FORM 10-K SUMMARY	95
SIGNATURES		96

PART I

Item 1. Business

Oxford Square Capital Corp. (“OXSQ,” “Company,” “we,” “us,” or “our”) is a closed-end, non-diversified management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). We have elected to be treated for U.S. federal income tax purposes as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”) beginning with our 2003 taxable year. Our investment objective is to maximize our portfolio’s total return. Our primary current focus is to seek an attractive risk-adjusted total return by investing primarily in corporate debt securities and, to a lesser extent collateralized loan obligation (“CLO”) structured finance investments that own corporate debt securities. CLO investments may also include warehouse facilities, which are early-stage CLO vehicles intended to aggregate loans that may be used to form the basis of a traditional CLO vehicle. We may also invest in publicly traded debt and/or equity securities. As a BDC, we may not acquire any asset other than “qualifying assets” unless, at the time we make the acquisition, the value of our qualifying assets represents at least 70% of the value of our total assets.

Our capital is generally used by our corporate borrowers to finance organic growth, acquisitions, recapitalizations and working capital. Our investment decisions are based on extensive analysis of potential portfolio companies’ business operations supported by an in-depth understanding of the quality of their recurring revenues and cash flow, variability of costs and the inherent value of their assets, including proprietary intangible assets and intellectual property. In making our CLO investments, we consider the indenture structure for that vehicle, its operating characteristics and compliance with its various indenture provisions, as well as its corporate loan-based collateral pool.

We generally expect to invest between $5.0 million and $5025.0 million in each of our portfolio investments, although this investment size may vary as the size of our capital base changes and market conditions warrant. We invest in both fixed and variable interest rate structures. We expect that our investment portfolio will be diversified among a large number of investments with few investments, if any, exceeding 5% of the total portfolio.

The structures of our investments will vary and we seek to invest across a wide range of different industries. We seek to invest in entities that, as a general matter, have been operating for at least one year prior to the date of our investment and that will, at the time of our investment, have employees and revenues, and which are cash flow positive. Many of these companies are expected to have financial backing provided by other financial or strategic sponsors at the time we make an investment. The portfolio companies in which we invest, however, will generally be considered below investment grade, and their debt securities may in turn be referred to as “junk.” A portion of our investment portfolio may consist of debt investments for which issuers are not required to make significant principal payments until the maturity of the senior loans, which could result in a substantial loss to us if such issuers are unable to refinance or repay their debt at maturity. In addition, many of the debt securities we hold typically contain interest reset provisions that may make it more difficult for a borrower to repay the loan, heightening the risk that we may lose all or part of our investment.

We also purchase portions of equity and junior debt tranches of CLO vehicles. Substantially all of the CLO vehicles in which we may invest would be deemed to be investment companies under the 1940 Act but for the exceptions set forth in section 3(c)(1) or section 3(c)(7). Structurally, CLO vehicles are entities formed to originate and/or acquire a portfolio of loans. The loans within the CLO vehicle are limited to loans which meet established credit criteria and are subject to concentration limitations in order to limit a CLO vehicle’s exposure to a single credit. A CLO vehicle is formed by raising various classes or “tranches” of debt (with the most senior tranches being rated “AAA” to the most junior tranches typically being rated “BB” or “B”) and equity. The CLO vehicles which we focus on are collateralized primarily by senior secured loans made to companies whose debt is unrated or is rated below investment grade, or “Senior Loans,” and, to a limited extent, subordinated and/or unsecured loans and bonds (together with the Senior Loans, the “CLO Assets”). CLOs generally have very little or no exposure to real estate, mortgage loans or to pools of consumer-based debt, such as credit card receivables or auto loans. Below investment grade securities, such as the CLO securities in which we primarily intend to invest, are often referred to as “junk.” In addition, the CLO equity and junior debt securities in which we invest are highly levered (with CLO equity securities typically being leveraged between nine and thirteen times), which significantly magnifies our risk of loss on such investments relative to senior debt tranches of CLOs. A CLO itself is highly leveraged because it borrows significant amounts of money to acquire the underlying commercial loans in which it invests. A CLO borrows money by issuing

~~amounts of money to acquire the underlying commercial loans in which it invests. A CLO borrows money by issuing~~ debt securities to investors (including junior debt securities of the type we intend to invest), and the CLO equity (which is also the CLO residual tranche) is the first to bear the risk on the underlying investment. Our investment strategy also includes warehouse facilities, which are financing structures intended to aggregate loans that may be used to form the basis of a CLO vehicle. Warehouse facilities typically incur leverage between four and six times prior to a CLO’s pricing. We have historically borrowed funds to make investments and may continue to do so. As a result, we are exposed to the risks of leverage, which may be considered a speculative investment technique. Borrowings, also known as leverage, magnify the potential for gain and loss on amounts invested and therefore increase the risks associated with investing in our securities. In addition, the costs associated with our borrowings, including any increase in the advisory fee payable to our investment adviser, Oxford Square Management, LLC (“Oxford Square Management”), will be borne by our common stockholders.

6.50% Unsecured Notes

On April 12, 2017, we completed an underwritten public offering of approximately $64.4 million in aggregate principal amount of our 6.50% unsecured notes due 2024, or the “6.50% Unsecured Notes.” On July 24, 2023, the Company redeemed $40.0 million in aggregate principal amount of the 6.50% Unsecured Notes. On September 11, 2023, the Company redeemed $10.0 million in aggregate principal amount of the 6.50% Unsecured Notes. On November 3, 2023, the Company redeemed $7.0 million in aggregate principal amount of the 6.50% Unsecured Notes. On December 21, 2023, the Company redeemed the remaining $7.4 million aggregate principal amount of 6.50% Unsecured Notes. For all redemptions, the notes were fully repaid at par. In connection with the December 21, 2023 redemption, the 6.50% Unsecured Notes were delisted from the NASDAQ Global Select Market. The 6.50% Unsecured Notes would have matured on March 30, 2024, and were redeemable in whole or in part at any time or from time to time at our option (on or after March 30, 2020). The 6.50% Unsecured Notes bore interest at a rate of 6.50% per year payable quarterly on March 30, June 30, September 30, and December 30 of each year. The 6.50% Unsecured Notes were listed on the NASDAQ Global Select Market under the trading symbol “OXSQL.”

6.25% Unsecured Notes

On April 3, 2019, we completed an underwritten public offering of approximately $44.8 million in aggregate principal amount of our 6.25% unsecured notes due 2026, or the “6.25% Unsecured Notes.” The 6.25% Unsecured Notes ~~will~~would ~~mature~~have matured on April 30, 2026, and ~~may~~could behave been redeemed in whole or in part at any time or from time to time at our option (on or after April 30, 2022). The 6.25% Unsecured Notes ~~bear~~bore interest at a rate of 6.25% per year payable quarterly on January 31, April 30, July 31, and October 31 of each year. ~~The~~On June 13, 2025, the Company redeemed $10.0 million in aggregate principal amount of the 6.25% Unsecured Notes. ~~are~~On ~~listed~~July 18, on2025, the ~~NASDAQ~~Company ~~Global~~redeemed ~~Select~~$10.0 million ~~Market~~in ~~under~~aggregate principal amount of the ~~trading~~6.25% ~~symbol~~Unsecured ~~“OXSQZ~~Notes.” On September 19, 2025, the Company redeemed the remaining $24.8 million in aggregate principal amount of the 6.25% Unsecured Notes. In connection with the September 19, 2025 redemption, the 6.25% Unsecured Notes were delisted from the NASDAQ Global Select Market.

5.50% Unsecured Notes

On May 20, 2021, we completed an underwritten public offering of approximately $80.5 million in aggregate principal amount of 5.50% unsecured notes due 2028, or the “5.50% Unsecured Notes.” The 5.50% Unsecured Notes will mature on July 31, 2028, and may be redeemed in whole or in part at any time or from time to time at our option (on or after May 31, 2024). The 5.50% Unsecured Notes bear interest at a rate of 5.50% per year payable quarterly on January 31, April 30, July 31, and October 31, of each year. The 5.50% Unsecured Notes are listed on the NASDAQ Global Select Market under the trading symbol “OXSQG.”

~~Rights~~7.75% ~~Offering~~Unsecured Notes

On ~~June~~August 227, ~~2023~~2025, we completed aan ~~transferable~~underwritten ~~rights~~public offering, ~~issuing~~of approximately 6$74.58 million ~~shares~~in aggregate principal amount of ~~our~~7.75% ~~common~~unsecured ~~stock~~notes atdue a2030, ~~subscription~~or ~~price~~the of“7.75% $2Unsecured Notes.66” ~~per~~The ~~share~~7.75% ~~Total~~Unsecured ~~proceeds,~~Notes ~~net~~will ofmature ~~underwriting~~on July 31, 2030, and ~~offering~~may ~~costs,~~be ~~were~~redeemed ~~approximately~~in ~~$16.0~~whole or in part at any time or from time to time at the Company’s option on or after July ~~million~~31, 2027. ~~Approximately~~The 17.75% Unsecured Notes bear interest at a rate of 7.75% per year payable quarterly on January ~~million~~31, ~~shares~~April 30, July 31, and October 31, of ~~our~~each ~~common~~year. ~~stock~~The ~~were~~7.75% ~~purchased~~Unsecured inNotes are listed on the ~~rights~~NASDAQ ~~offering~~Global bySelect ~~affiliates~~Market ofunder ~~Oxford~~the ~~Square~~trading ~~Management~~symbol “OXSQH.”

ATM Offering

On August 22, 2023, we entered into Amendment No. 1 to the Equity Distribution Agreement dated August 1, 2019 with Ladenburg Thalmann & Co. through which we may offer for sale, from time to time, up to $150.0 million of our common stock through an At-the-Market (“ATM”) offering. On August 16, 2024, we entered into an amended and restated equity distribution agreement (the “Amended and Restated Equity Distribution Agreement”) with Lucid Capital Markets, LLC and Ladenburg Thalmann & Co. Inc., as the sales agents, to add Lucid Capital Markets, LLC as an additional sales agent to the Amended and Restated Equity Distribution Agreement. We sold a total of 15,910,780 shares of common stock pursuant to the ATM offering during the year ended December 31, 2025. The total amount of capital raised net of underwriting fees and offering costs was approximately $34.8 million during the year ended December 31, 2025.

we entered into an amended and restated equity distribution agreement (the “Amended and Restated Equity Distribution Agreement”) with Lucid Capital Markets, LLC and Ladenburg Thalmann & Co. Inc., as the sales agents, to add Lucid Capital Markets, LLC as an additional sales agent to the Amended and Restated Equity Distribution Agreement. We sold a total of 10,132,282 shares of common stock pursuant to the ATM offering during the year ended December 31, 2024. The total amount of capital raised net of underwriting fees and offering costs was approximately $29.2 million during the year ended December 31, 2024.

Organizational and Regulatory Structure

Our investment activities are managed by Oxford Square Management. Oxford Square Management is an investment adviser registered under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). Oxford Square Management is owned by Oxford Funds, LLC (“Oxford Funds”), its managing member, and Charles M. Royce, a member of our Board of Directors (the “Board”) who holds a minority, non-controlling interest in Oxford Square Management. Jonathan H. Cohen, our Chief Executive Officer, and Saul B. Rosenthal, our President and Chief Operating Officer, directly or indirectly own or control all of the outstanding equity interests of Oxford Funds. Under the ~~investment~~Investment ~~advisory~~Advisory ~~agreement~~Agreement (as defined below), we have agreed to pay Oxford Square Management an annual base advisory fee based on our gross assets as well as an incentive fee based on our performance. Refer to “— Investment Advisory Agreement.”

We were founded in July 2003 and completed an initial public offering of shares of our common stock in November 2003. We are a Maryland corporation and a closed-end, non-diversified management investment company that has elected to be regulated as a BDC under the 1940 Act. As a BDC, we are required to meet certain regulatory tests, including the requirement to invest at least 70% of our total assets in eligible portfolio companies. Refer to “— Regulation as a Business Development Company.” In addition, we have elected to be treated for U.S. federal income tax purposes, and intend to qualify annually, as a RIC under ~~Subchapter M of~~ the ~~Internal Revenue~~ Code ~~of 1986, as amended (the “Code”)~~.

Set forth below is a chart detailing our organizational structure.

Our headquarters are located at 8 Sound Shore Drive, Suite 255, Greenwich, Connecticut and our telephone number is (203) 983-5275.

We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (“SEC”). This information is available on our website at http://oxfordsquarecapital.com/. The information we file with the SEC is available free of charge by contacting us at 8 Sound Shore Drive, Suite 255, Greenwich, CT 06830 or by telephone at (203) 983-5275. The SEC also maintains a website that contains reports, proxy statements and other information regarding registrants, including us, that file such information electronically with the SEC. The address of the SEC’s website is http://www.sec.gov. Information contained on our website or on the SEC’s website about us is not incorporated into this report and you should not consider information contained on our website or on the SEC’s website to be part of this report.

MARKET OVERVIEW AND OPPORTUNITY

The broader corporate loan and CLO equity markets displayed ~~modest~~weakness ~~strength~~ in ~~2024~~2025. The ~~S&P~~Morningstar/LSTA US Leveraged Loan Index ~~increased~~decreased from a price of 9697.2133% at the end of December ~~2023~~2024 to 9796.3364% at the end of December ~~2024~~2025. During ~~2024~~2025, ~~lower~~higher credit quality loans significantly outperformed ~~higher~~lower credit quality loans. For the full year, BB rated loan prices ~~increased~~decreased 0.5367%, B rated loan prices ~~increased~~decreased 0.5847%, and CCC rated loan prices ~~increased~~decreased 15.5986%. We believe that the loan market’s performance during ~~2024~~2025 was driven by investment ~~inflows~~outflows ~~into~~from the loan asset class, ~~higher~~and ~~issuance~~macroeconomic ~~in the CLO asset class~~headwinds, ~~and~~partly ~~lower~~offset ~~primary~~by ~~market~~robust issuance ~~associated with leveraged buyout and acquisition transactions, resulting~~ in ~~higher demand for existing loans in~~ the ~~secondary~~CLO ~~market~~asset class. Credit quality in the loan market ~~deteriorated~~remains challenged but improved in ~~2024~~2025 as exhibited by ana ~~increase~~decrease in the default rate to 43.7035% at the end of ~~2024~~2025 versus 34.8470% at the end of ~~2023~~2024 when including traditional defaults and out-of-court restructurings, exchanges, and sub-par buybacks. This environment presented corporate loan and CLO managers with the opportunity to buy performing assets in the primary and secondary loan markets with sufficient risk adjusted returns, ultimately accruing to the benefit of loan and CLO investments. Additionally, as we execute our corporate loan strategy of focusing primarily on small to medium size broadly syndicated loans, narrowly syndicated loans and private deals, through purchases in both the primary and secondary markets, we remain mindful of maintaining overall portfolio liquidity. We believe this strategy allows us to maintain corporate debt investments which have sufficient liquidity in order to take advantage of market opportunities.

out-of-court restructurings, exchanges, and sub-par buybacks. This environment presented corporate loan and CLO managers with the opportunity to buy performing assets in the primary and secondary loan markets with sufficient risk adjusted returns. Additionally, as we execute our corporate loan strategy of focusing primarily on small to medium size broadly syndicated loans, narrowly syndicated loans and private deals, through purchases in both the primary and secondary markets, we remain mindful of maintaining overall portfolio liquidity. We believe this strategy allows us to maintain corporate debt investments which have sufficient liquidity in order to take advantage of market opportunities.

COMPETITIVE ADVANTAGES

We believe that we are well positioned to provide financing to corporate borrowers and structured finance vehicles that, in turn, provide capital to corporate borrowers for the following reasons:

• Expertise in credit analysis and monitoring investments; and

• Established transaction sourcing network.

Expertise in credit analysis and monitoring investments

While our investment focus is on middle-market companies, we have invested, and in the future will likely continue to invest, in larger and smaller companies and in other investment structures on an opportunistic basis, including CLO investment vehicles. We believe our experience in analyzing middle-market companies and CLO investment structures, as detailed in the biographies of Oxford Square Management’s senior investment professionals, affords us a sustainable competitive advantage over lenders with limited experience in investing in these markets. In particular, we have expertise in evaluating the investment merits of middle-market companies as well as the structural features of CLO investments, and monitoring the credit risk of such investments after closing until full repayment.

• Jonathan H. Cohen, our Chief Executive Officer, has more than 25twenty-five years of experience in debt and equity research and investment. Mr. Cohen has also served as Chief Executive Officer and a Director of Oxford Lane Capital Corp. (NasdaqGS: OXLC), a registered closed-end fund, and as Chief Executive Officer of its investment adviser, Oxford Lane Management, LLC, or “Oxford Lane Management,” since 2010. Since ~~2015~~2018 and ~~2018~~2015, respectively, Mr. Cohen has also served as Chief Executive Officer of Oxford Gate ~~Management, LLC, or “Oxford Gate Management,” the investment adviser to Oxford Gate~~ Master Fund, LLC, Oxford Gate, LLC and Oxford Gate (Bermuda), LLC (collectively, the “Oxford Gate Funds”), and Oxford Bridge II, LLC and their investment adviser, Oxford Gate Management, LLC, or “Oxford Gate Management.” Oxford Bridge II, LLC and the Oxford Gate Funds are private investment funds. Since 2023, Mr. Cohen has also served as Chief Executive Officer of Oxford Park Income Fund, Inc., a ~~non-diversified~~registered closed-end ~~management investment company~~fund, and its investment adviser, Oxford Park Management, LLC, or “Oxford Park Management”. Previously, Mr. Cohen managed technology equity research groups at Wit Capital, Merrill Lynch, UBS and Smith Barney. Mr. Cohen is a member of the Board of Trustees of Connecticut College. Mr. Cohen received a B.A. in Economics from Connecticut College and an M.B.A. from Columbia University.

• Saul B. Rosenthal, our President and Chief Operating Officer, has more than 20twenty years of experience in the capital markets, with a focus on middle-market transactions. In addition, Mr. Rosenthal has served as President and a Director of Oxford Lane Capital Corp. (NasdaqGS: OXLC), a registered closed-end fund, and as President of Oxford Lane Management, since 2010. Mr. Rosenthal has also served as President of Oxford Gate Management and the Oxford Gate Funds and Oxford Bridge II, LLC, since 2015 and 2018, respectively. Since 2023, Mr. Rosenthal has also served as President of Oxford Park Income Fund, Inc., a registered closed-end fund, and its investment adviser, Oxford Park Management. Mr. Rosenthal was previously an attorney at the law firm of Shearman & Sterling LLP. Mr. Rosenthal serves on the board of the National Museum of Mathematics. Mr. Rosenthal received a B.S., magna cum laude, from the Wharton School of the University of Pennsylvania, a J.D. from Columbia University Law School, where he was a Harlan Fiske Stone Scholar, and a LL.M. (Taxation) from New York University School of Law.

served as President of Oxford Gate Management, the investment adviser to the Oxford Gate Funds and Oxford Bridge II, LLC, since 2015 and 2018, respectively. Since 2023, Mr. Rosenthal has also served as President of Oxford Park Income Fund, Inc., a non-diversified closed-end management investment company, and its investment adviser, Oxford Park Management. Mr. Rosenthal was previously an attorney at the law firm of Shearman & Sterling LLP. Mr. Rosenthal serves on the board of the National Museum of Mathematics. Mr. Rosenthal received a B.S., magna cum laude, from the Wharton School of the University of Pennsylvania, a J.D. from Columbia University Law School, where he was a Harlan Fiske Stone Scholar, and a LL.M. (Taxation) from New York University School of Law.

• Joseph Kupka is a Managing Director of Oxford Square Management, and also holds the same position at Oxford Lane Management, the investment adviser to Oxford Lane Capital Corp., Oxford Gate Management, the investment adviser to the Oxford Gate Funds and Oxford Bridge II, LLC, and Oxford Park Management, the investment adviser to Oxford Park Income Fund, Inc. Previously, he worked as a risk analyst for First Equity Card Corporation. Mr. Kupka received a B.S. in Mechanical Engineering from the University of Pennsylvania, where he was the Abel and Bernstein Class of 1945 Scholarship Recipient.

• Kevin Yonon is a Managing Director of Oxford Square Management, and also holds the same position at Oxford Lane Management, the investment adviser to Oxford Lane Capital Corp., Oxford Gate Management, the investment adviser to the Oxford Gate Funds and Oxford Bridge II, LLC, and Oxford Park Management, the investment adviser to Oxford Park Income Fund, Inc. Previously, Mr. Yonon was an Associate at Deutsche Bank Securities and prior to that he was an Analyst at Blackstone Mezzanine Partners. Before joining Blackstone, he worked as an Analyst at Merrill Lynch in the Mergers & Acquisitions group. Mr. Yonon received a B.S. in Economics with concentrations in Finance and Accounting from the Wharton School at the University of Pennsylvania, where he graduated magna cum laude, and an M.B.A. from the Harvard Business School.

Established deal sourcing network

Through the investment professionals of Oxford Square Management, we have extensive contacts and sources from which to generate investment opportunities. These contacts and sources include private equity funds, companies, brokers and bankers. We believe that senior professionals of Oxford Square Management have developed strong relationships within the investment community over their years within the banking, investment management and equity research fields.

INVESTMENT PROCESS

Identification

We identify and source new prospective corporate debt investments through brokers, investment banks and direct company relationships. We have identified several criteria that we believe are important in seeking our investment objective. These criteria provide general guidelines for our investment decisions; however, we do not require each prospective investment to meet all or any specific number of these criteria.

• Experienced management. We generally require that our portfolio companies have an experienced management team. We also prefer the portfolio companies to have in place proper incentives to induce management to succeed and to act in concert with our interests as investors, including having significant equity interests.

• Significant financial or strategic sponsor and/or strategic partner. We prefer to invest in companies in which established private equity or venture capital funds or other financial or strategic sponsors have previously invested and are willing to make an ongoing contribution to the management of the business, including participation as board members or as business advisers.

• Strong competitive position in industry. We seek to invest in companies that have developed a competitive position within their respective sector or niche of a specific industry.

• Profitable on a cash flow basis. We focus on companies that are profitable or nearly profitable on an operating cash flow basis. Typically, we would not expect to invest in start-up companies.

• Clearly defined exit strategy. Prior to making a direct corporate equity investment and/or an investment in a debt security that is accompanied by an equity-based security in a portfolio company, we analyze the potential for that company to increase the liquidity of its common equity through a future event that would enable us to realize appreciation, if any, in the value of our equity interest. Liquidity events may include an initial public offering, a merger or an acquisition of the company, a private sale of our equity interest to a third party, or a purchase of our equity position by the company or one of its stockholders.

• Liquidation value of assets. Although we do not operate as an asset-based lender, the prospective liquidation value of the assets, if any, collateralizing the debt securities that we hold is a consideration in our credit analysis. We consider both tangible assets, such as accounts receivable, inventory and equipment, and intangible assets, such as intellectual property, software code, customer lists, networks and databases.

We identify opportunities in the CLO market through our network of brokers, dealers, agent banks, collateral ~~mangers~~managers and sponsors that we have worked with for several years. The CLO vehicles which we focus on are collateralized primarily by senior secured loans made to companies whose debt is unrated or is rated below investment grade, and generally have very little or no direct exposure to real estate, mortgage loans or to pools of consumer-based debt, such as credit card receivables or auto loans.

Due Diligence

Our due diligence process generally includes some or all of the following elements:

Corporate Loans

Management team and financial sponsor

• management assessment including a review of management’s track record with respect to product development, sales and marketing, mergers and acquisitions, alliances, collaborations, research and development outsourcing and other strategic activities; and

• financial sponsor reputation, track record, experience and knowledge (where a financial sponsor is present in a transaction).

Business

• industry and competitive analysis;

• assessment of likely exit strategies; and

• potential regulatory/legal issues.

Financial condition

• detailed review of the historical financial performance and the quality of earnings;

• development of detailed pro forma financial projections; and

• review of assets and liabilities, including contingent liabilities.

Structured Finance Vehicles

• review of indenture structures;

• review of underlying collateral loans;

• analysis of projected future cash flows; and

• analysis of compliance with covenants.

Contemporaneous with our due diligence process, the investment team presents the investment proposal to our Investment Committee, which currently consists of Messrs. Cohen and Rosenthal. Our Investment Committee reviews and approves each of our portfolio investments.

Investment Characteristics

In identifying corporate debt investments, we seek to ascertain the asset quality as well as the earnings quality of our prospective portfolio companies. Frequently, we obtain a senior secured position and thus receive a perfected, first or second priority security interest in substantially all of our portfolio companies’ assets, which entitles us to a preferred position on payments in the event of liquidation. It should be noted, however, that because we are not primarily an asset-based lender, in the current economic environment, the value of collateral and security interests may dissipate rapidly. In addition, in certain investments we seek loan covenants or to participate in syndicated loans that incorporate loan covenants that assist in the early identification of risk. Our loan documents may include affirmative covenants that require the portfolio company to take specific actions such as: periodic financial reporting; notification of material events and compliance with laws; restrictive covenants that prevent portfolio companies from taking a range of significant actions such as incurring additional indebtedness or making acquisitions without our consent; covenants requiring the portfolio company to maintain or achieve specified financial ratios such as debt to cash flow and interest coverage; and operating covenants requiring them to maintain certain operational benchmarks such as minimum revenue or minimum cash flow. Our loan documents also provide protection against customary events of default such as non-payment, breach of covenant, insolvency and change of control.

In identifying CLO investments, we seek to ascertain the asset quality of the underlying collateral pool, the structural integrity of the CLO liability capital structure, the expected return profile of the CLO equity or debt tranche we are investing in, as well as the quality of the prospective collateral manager. The underlying portfolio of each CLO investment is typically diversified across approximately 100 to 250 broadly syndicated loans which are predominantly 1st lien senior secured term loans to U.S. corporations. Additionally, these collateral pools typically do not have direct exposure to real estate, mortgages, or consumer-based credit assets. Our investment focus is generally agnostic between the primary and secondary CLO markets. In both markets, we pursue opportunities which we view to have attractive optionality with regards to the ability to refinance or “reset” the CLO liability capital structure at some point in the future. A CLO “reset” typically includes an extension of the CLO’s reinvestment period in addition to the refinancing of the CLO liabilities. We continue to prefer CLO equity investments which have longer reinvestment periods which may give CLO managers additional time to rebuild collateral value from potential credit losses as well as take advantage of a potential disruption in the broader credit markets.

MONITORING RELATIONSHIPS WITH PORTFOLIO COMPANIES

Monitoring

We monitor the financial trends of each portfolio company to assess the appropriate course of action for each investment and to evaluate overall portfolio quality. We closely monitor the status and performance of each individual company on at least a quarterly and, in some cases, a monthly basis.

We have several methods of evaluating and monitoring the performance of our investments, including but not limited to the following:

• assessment of business development success, and the portfolio company’s overall adherence to its business plan; and

• review of monthly and/or quarterly financial statements and financial projections for portfolio companies.

In addition, we may from time to time identify investments that require closer monitoring or become workout assets. In such cases, we will develop a strategy for workout assets and periodically gauge our progress against that strategy. As a private debt holder, we may incur losses from our investing activities from time to time; however, we attempt, where possible, to work with troubled portfolio companies in order to recover as much of our investments as is practicable.

Portfolio Grading

We have developed a credit grading system to monitor the quality of our debt investment portfolio. We use an investment rating scale of 1 to 5. The following table provides a description of the conditions associated with each debt investment. Equity securities, including CLO equity tranches, are not graded.

Grade		Summary Description
1		Company is ahead of expectations and/or outperforming financial covenant requirements of the specific tranche and such trend is expected to continue.
2		Full repayment of the outstanding amount of OXSQ’s cost basis and interest is expected for the specific tranche.
3		Closer monitoring is required. Full repayment of the outstanding amount of OXSQ’s cost basis and interest is expected for the specific tranche.
4		A loss of interest income has occurred or is expected to occur and, in most cases, the investment is placed on non-accrual status. Full repayment of the outstanding amount of OXSQ’s cost basis is expected for the specific tranche.
5		Full repayment of the outstanding amount of OXSQ’s cost basis is not expected for the specific tranche and the investment is placed on non-accrual status.

Significant Managerial Assistance

As a BDC, we are required to offer significant managerial assistance to portfolio companies. This assistance, were it to be accepted, would typically involve monitoring the operations of portfolio companies, participating in their board and management meetings, consulting with and advising their officers and providing other organizational and financial guidance.

Portfolio Overview

We seek to create a portfolio that includes primarily senior secured loans, CLO investments, senior subordinated and junior subordinated debt investments, as well as warrants and other equity instruments we may receive in connection with such debt investments. We generally expect to invest between $5 million and $5025 million in each of our portfolio companies. We expect that our investment portfolio will be diversified among a large number of investments with few investments, if any, exceeding 5% of the total portfolio.

The following is a representative list of the industries in which we currently have ~~invested~~investments:

• ~~Aerospace~~Artificial ~~and~~Intelligence ~~Defense~~ • Business Services • Food and Beverage • Healthcare • Industrials • Materials • Software • Telecommunication Services • Structured Finance • IT Consulting

During the fiscal year ended December 31, ~~2024~~2025, we purchased approximately $~~112~~92.21 million of investments, comprised of approximately $7657.39 million in senior secured notes, approximately $3530.2 million in CLO equity and approximately $04.7 0 million in equity and other investments. As a percentage of fair value of the total invested portfolio as of December 31, ~~2024~~2025, our portfolio was invested approximately 5758.85% in senior secured notes, 4037.18% in CLO equity, and 23.17% in equity and other investments.

TEN LARGEST PORTFOLIO INVESTMENTS AS OF DECEMBER 31, ~~2024~~2025

Our ten largest portfolio company investments as of December 31, ~~2024~~2025, based on the combined fair value of the debt and equity securities (including CLO side letter related investments) we hold in each portfolio company, were as follows:

Portfolio Company	Industry	December 31, 2024
		Cost(1)		December 31, 2025
		~~($ in millions)~~		($ in millions)
		Cost(1)		FairValue(1)		Fair ValuePercentage ofTotalPortfolio(1)
Portfolio Company	Industry			Fair Value(1)		Fair Value Percentage of Total Portfolio
OCP CLO 2024-37, Ltd.	Structured Finance	$	2224.80	$	2218.71	8.7.2	%
Dryden 43 Senior Loan Fund	Structured Finance		24.9		17.0	6.5	%
Generate CLO 10, Ltd.	Structured Finance		21.7		17.7	7.0	%
Carlyle Global Market Strategies CLO 2021-6, Ltd.	Structured Finance		19.0		16.9	6.5	%
Verifone, Inc. (f/k/a Verifone Systems, Inc.)	Business Services		12.1		12.5	5.0	%
Verifone Systems, Inc.	Business Services		14.6		13.8	5.3	%
Carlyle Global Market Strategies CLO 2021-6, Ltd.	Structured Finance		18.3		12.1	4.8	%
HealthChannels, Inc. (f/k/a ScribeAmerica, LLC)	Healthcare		18.5		12.8	4.9	%
Dodge Construction Network LLC (f/k/a Dodge Data & Analytics, LLC)	Software		13.9		11.4	4.5	%
Octagon Investment Partners 49, Ltd.	Structured Finance		16.4		11.7	4.5	%
Global Tel Link Corp.	Telecommunication Services		10.1		10.3	4.1	%
Convergint Technologies, LLC	Business Services		1110.0		10.91	4.20	%
Dodge Data & Analytics, LLC	Software		10.9		10.6	4.1	%
Dryden 43 Senior Loan Fund	Structured Finance		21.9		9.9	3.9	%
Access CIG, LLC	Business Services		10.2		10.2	3.9	%
Michael Baker International, Inc.	Industrials		9.9		9.9	3.9	%
Nielsen Consumer, LLC	Business Services		10.0		10.0	3.9	%
Smartronix, LLC	Software		10.0		9.9	3.9	%
		$	~~158~~152.10	$	~~136~~121.78	5248.43	%

____________

(1) Totals may not sum due to rounding.

For a description of the factors relevant to the changes in the value of the above portfolio investments for the year ended December 31, ~~2024~~2025, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Portfolio Grading.”

Set forth below are descriptions of the ten largest portfolio investments as of December 31, ~~2024~~2025:

OCP CLO 2024-37, Ltd.

OCP CLO 2024-37, Ltd. is a collateralized loan obligation investing primarily in U.S.-based senior secured loans. As of December 31, ~~2024~~2025, approximately $27.0 million remained outstanding on our investment.

~~Dryden~~Generate 43CLO ~~Senior~~10, ~~Loan Fund~~Ltd.

~~Dryden~~Generate 43CLO ~~Senior~~10, ~~Loan~~Ltd. ~~Fund~~ is a collateralized loan obligation investing primarily in U.S.-based senior secured loans. As of December 31, ~~2024~~2025, approximately $4730.30 million remained outstanding on our investment.

Verifone, Inc. (f/k/a Verifone Systems, Inc.)

Verifone, Inc. develops technology that enables electronic payment transactions and value-added services at the point of sale. As of December 31, 2025, approximately $13.2 million remained outstanding on our investment in the first lien senior secured notes.

Carlyle Global Market Strategies CLO 2021-6, Ltd.

Carlyle Global Market Strategies CLO 2021-6, Ltd. is a collateralized loan obligation investing primarily in U.S.-based senior secured loans. As of December 31, ~~2024~~2025, approximately $29.6 million remained outstanding on our investment.

Verifone Systems, Inc.

Verifone Systems, Inc. develops technology that enables electronic payment transactions and value-added services at the point of sale. As of December 31, 2024, approximately $14.8 million remained outstanding on our investment in the first lien senior secured notes.

HealthChannels, Inc. (f/k/a ScribeAmerica, LLC)

HealthChannels, Inc. is a health-care company that offers clerical support services, including electronic medical record documentation, patient engagement, and medical coding to improve clinical outcomes. As of December 31, 2024, approximately $18.6 million remained outstanding on our investment in the first lien senior secured notes.

~~Octagon~~Dodge ~~Investment~~Construction ~~Partners~~Network 49LLC (f/k/a Dodge Data & Analytics, ~~Ltd.~~LLC)

~~Octagon~~Dodge ~~Investment~~Construction ~~Partners~~Network ~~49,~~LLC ~~Ltd.~~offers isanalytics aand ~~collateralized~~software-based ~~loan~~workflow ~~obligation~~integration ~~investing~~solutions ~~primarily~~for inthe ~~U.S.-based~~construction ~~senior secured loans~~industry. As of December 31, ~~2024~~2025, approximately $262.42 million remained outstanding on our investment in the first lien first out senior secured notes, approximately $3.0 million remained outstanding on our investment in the first lien second out senior secured notes and $17.0 million remained outstanding on our investment in the second lien senior secured notes.

Global Tel Link Corp.

Global Tel Link Corp. offers communication, intelligence, education, enterprise management, payment and deposit solutions, as well as inmate services. As of December 31, 2025, approximately $10.4 million remained outstanding on our investment in the first lien senior secured notes.

Convergint Technologies, LLC

Convergint Technologies, LLC offers security, communications, installation, fire alarm safety, and building automation systems to commercial offices, residential, government, healthcare, and educational industries. As of December 31, ~~2024~~2025, approximately $1110.0 million remained outstanding on our investment in the second lien senior secured notes.

~~Dodge~~Dryden ~~Data &~~43 ~~Analytics,~~Senior ~~LLC~~Loan Fund

~~Dodge~~Dryden ~~Data &~~43 ~~Analytics,~~Senior ~~LLC~~Loan ~~offers~~Fund ~~analytics~~is ~~and~~a ~~software-based~~collateralized ~~workflow~~loan ~~integration~~obligation ~~solutions~~investing ~~for~~primarily ~~the~~in ~~construction~~U.S.-based ~~industry~~senior secured loans. As of December 31, ~~2024~~2025, approximately $247.~~2 million remained outstanding on our investment in the first lien first out senior secured notes, approximately $~~3.0 million remained outstanding on our investment ~~in the first lien second out senior secured notes and $15~~.~~0 million remained outstanding on our investment in the second lien senior secured notes.~~

~~Access~~Michael ~~CIG~~Baker International, ~~LLC~~Inc.

~~Access~~Michael ~~CIG~~Baker International, ~~LLC~~Inc. isoffers adesigning, ~~records~~construction, planning, cost management, and ~~documents~~consulting ~~storage~~services ~~firm~~for building, civil, energy, environmental, and transportation sectors. As of December 31, ~~2024~~2025, approximately $109.19 million remained outstanding on our investment in the first lien senior secured notes.

~~Nielsen Consumer~~Smartronix, LLC

~~Nielsen Consumer~~Smartronix, LLC isoffers acloud ~~global~~computing, ~~measurement~~cyber ~~and~~security, data and analytics, ~~company~~digital ~~that~~transformation, ~~helps~~server ~~businesses~~and ~~understand~~application, ~~consumer~~robotic ~~behavior~~process automation, modeling, simulation, and ~~market~~training ~~trends~~solutions. As of December 31, ~~2024~~2025, approximately $109.09 million remained outstanding on our investment in the first lien senior secured notes.

INVESTMENT ADVISORY AGREEMENT

Management Services

Oxford Square Management serves as our investment adviser. Oxford Square Management is registered as an investment adviser under the Advisers Act. Subject to the overall supervision of our Board, Oxford Square Management manages our day-to-day operations and provides investment advisory services to us. Under the terms of our Investment Advisory Agreement with Oxford Square Management (the “Investment Advisory Agreement”), Oxford Square Management:

• determines the composition of our portfolio, the nature and timing of the changes to our portfolio and the manner of implementing such changes;

• identifies, evaluates and negotiates the structure of the investments we make;

• closes, monitors and services the investments we make; and

• determines what securities we will purchase, retain or sell.

Oxford Square Management’s services under the Investment Advisory Agreement are not exclusive, and it is free to furnish similar services to other entities so long as its services to us are not impaired. Oxford Square Management has agreed that, during the term of its Investment Advisory Agreement with us, it will not serve as investment adviser to any other public or private entity that utilizes a principal investment strategy of providing debt financing to middle-market companies similar to those we target.

Advisory Fee

General Terms

We pay Oxford Square Management an advisory fee for its services under the Investment Advisory Agreement consisting of a base advisory fee (the “Base Fee”) and two types of incentive fees.

The Base Fee is payable quarterly in arrears, calculated based on a percentage of the average value of our gross assets at the end of the two most recently completed calendar quarters, and appropriately prorated for any partial quarter.

The incentive fees are commonly referred to as the “income incentive fee” and the “capital gains incentive fee,” with the first fee payable quarterly in arrears and the second fee payable in arrears at the end of each calendar year.

• The first fee, which we refer to as the “Net Investment Income Incentive Fee,” is determined by reference to the Company’s “Pre-Incentive Fee Net Investment Income” (as defined below). Given that this incentive fee is payable without regard to any gain, loss or unrealized depreciation that may occur during the quarter, Oxford Square Management’s incentive fee may be payable notwithstanding a decline in net asset value that quarter.

• The second fee, which we refer to as the “Capital Gains Incentive Fee,” equals 20% of our “Incentive Fee Capital Gains,” which consists of our realized capital gains for each calendar year, computed net of all realized capital losses and unrealized capital depreciation for that calendar year. For accounting purposes under U.S. generally accepted accounting principles (“GAAP”), the Capital Gains Incentive Fee is based on a hypothetical liquidation of the Company. In such a calculation, in order to reflect the theoretical Capital Gains Incentive Fee that would have been payable for a given period as if all unrealized gains were realized, we will accrue a Capital Gains Incentive Fee based upon net realized gains and unrealized depreciation for that calendar year (in accordance with the terms of the Investment Advisory Agreement), plus unrealized appreciation on investments held at the end of the period. It should be noted that a fee so calculated and accrued would not necessarily be payable under the Investment Advisory Agreement, and may never be paid based upon the computation of Capital Gains Incentive Fees in subsequent periods. Amounts paid under the Investment Advisory Agreement will be consistent with the formula in the Investment Advisory Agreement.

The cost of both the Base Fee payable to Oxford Square Management and any incentive fees earned by Oxford Square Management are ultimately borne by our common stockholders.

Calculation of Fees under the Investment Advisory Agreement and 2016 Fee Waiver

The Investment Advisory Agreement specifies the calculation of the advisory fee payable thereunder, as described in greater detail below. However, Oxford Square Management unilaterally determined to waive, under certain circumstances, part of its total fees payable under the Investment Advisory Agreement, pursuant to a fee waiver letter effective April 1, 2016 (the “2016 Fee Waiver”).

The Investment Advisory Agreement provides for a series of calculations to be used in determining the Base Fee and Net Investment Income Incentive Fee payable to Oxford Square Management. The 2016 Fee Waiver operates by providing for a second series of calculations to be run alongside the calculations of the Base Fee and Net Investment Income Incentive Fee under the Investment Advisory Agreement. In the event that the second set of calculations produces a higher combined Base Fee and Net Investment Income Incentive Fee for any quarterly period, those combined fees are set to the original (lower) level, calculated pursuant to the Investment Advisory Agreement. In the event that the second set of calculations produces lower combined Base Fee and

~~of calculations produces a higher combined Base Fee and~~ Net Investment Income Incentive Fee for ~~any quarterly period, those combined fees are set to the original (lower) level, calculated pursuant to the Investment Advisory Agreement. In the event~~ that ~~the second set of calculations produces lower combined Base Fee and Net Investment Income Incentive Fee for that~~ quarterly period, those lower combined fees are adopted for that quarterly period. In either case, the lower level of combined fees is used for that quarter, and, accordingly, the advisory fee payable to Oxford Square Management can only be reduced, and never increased, as a result of the 2016 Fee Waiver.

Calculation of Fees under the Investment Advisory Agreement. Under the Investment Advisory Agreement, and without applying the 2016 Fee Waiver, the total advisory fee would be calculated as follows:

1) Base Fee: The Base Fee is calculated at an annual rate of 2.00% of our gross assets, and appropriately adjusted for any equity or debt capital raises, repurchases or redemptions during the current calendar quarter.

2) Net Investment Income Incentive Fee: The Net Investment Income Incentive Fee is calculated based on our “Pre-Incentive Fee Net Investment Income” for the immediately preceding calendar quarter.

a. For this purpose, “Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive from portfolio companies) accrued during the calendar quarter minus our operating expenses for the quarter (including the Base Fee, expenses payable under our administration agreement, and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind (“PIK”) interest, and zero-coupon securities), accrued income that we have not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

b. Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of our net assets at the end of the immediately preceding calendar quarter, is compared to one-fourth of an annual “hurdle rate.” The annual hurdle rate is determined as of the immediately preceding December 31st by adding 5.0% to the interest rate then payable on the most recently issued five-year U.S. Treasury Notes, up to a maximum annual hurdle rate of 10.0%. The annual hurdle rates for the ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023 calendar years, calculated as of December 31, were approximately 89.8438%, 8.9984%, and 68.2699%, respectively, under the terms of the Investment Advisory Agreement. Our net investment income (to the extent not distributed to our stockholders) used to calculate the Net Investment Income Incentive Fee was also included in the amount of our gross assets used to calculate the 2.00% Base Fee.

c. The operation of the incentive fee with respect to our Pre-Incentive Fee Net Investment Income for each quarter is as follows:

i. no incentive fee was payable to Oxford Square Management in any calendar quarter in which our Pre-Incentive Fee Net Investment Income did not exceed one fourth of the annual hurdle rate (approximately 89.8438% for the ~~2024~~2025 calendar year).

ii. 20% of the amount of our Pre-Incentive Fee Net Investment Income, if any, that exceeds one-fourth of the annual hurdle rate (approximately 89.8438% for the ~~2024~~2025 calendar year) in any calendar quarter was payable to Oxford Square Management (i.e., once the hurdle rate is reached, 20% of all Pre-Incentive Fee Net Investment Income thereafter was allocated to Oxford Square Management).

3) Capital Gains Incentive Fee. The “Capital Gains Incentive Fee,” is determined as described above.

For more information about the calculation of the advisory fee under the Investment Advisory Agreement prior to effectiveness of the 2016 Fee Waiver, refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

Calculation of Fees under the 2016 Fee Waiver. Following the effectiveness of the 2016 Fee Waiver, a second set of calculations is applied each quarter, and, if (and only if) those calculations result in a lower total advisory fee (i.e., the combination of the Base Fee and any incentive fees), they are used to calculate the total advisory fee payable to Oxford Square Management for a particular quarter. No individual element of those calculations is applicable by itself — only the totality of those calculations is considered. Generally, and as described in greater detail below, under the second set of calculations provided for by the 2016 Fee Waiver:

1) Base Fee:

a. The calculation of the Base Fee component is reduced from 2.00% to 1.50%; and

b. No Base Fee is calculated on funds received in connection with any capital raises until the funds are invested.

2) Net Investment Income Incentive Fee:

a. The calculation of our Net Investment Income Incentive Fee is revised to include a Total Return Requirement (as defined below). Under the Total Return Requirement, we are only required to pay Oxford Square Management a Net Investment Income Incentive Fee if 20% of the “cumulative net increase in net assets resulting from operations” (as defined below) — during the calendar quarter for which such fees are being calculated and the eleven (11) preceding quarters — is greater than the cumulative Net Investment Income Incentive Fees accrued and/or paid over for the same period, even when our net investment income exceeds the minimum return to our stockholders required to be achieved before Oxford Square Management is entitled to receive a Net Investment Income Incentive Fee (which minimum return is commonly referred to as the “preferred return” or “hurdle rate”);

b. The calculation of our Net Investment Income Incentive Fee incorporates a “catch-up” provision that provides that Oxford Square Management will receive 100% of our net investment income with respect to that portion of such net investment income, if any, that exceeds the preferred return but is less than 2.1875% quarterly (8.75% annualized) and 20% of any net investment income thereafter; and

c. The hurdle rate used to calculate the Net Investment Income Incentive Fee is changed from a variable rate, based on the five-year U.S. Treasury note plus 5.00% (with a maximum of 10%), to a fixed rate of 7.00%.

More specifically, for the purpose of calculating the amount of total advisory fees (if any) to be waived during a particular calendar quarter, the Base Fee and Net Investment Income Incentive Fee are calculated as follows under the 2016 Fee Waiver:

1) Base Fee: The Base Fee is calculated at an annual rate of 1.50%, adjusted pro rata for any share issuances, debt issuances, repurchases or redemptions during the current calendar quarter; provided, however, that no Base Fee is payable on the cash proceeds received by us in connection with any share or debt issuances until such proceeds have been invested in accordance with our investment objectives. The Base Fee for any partial month or quarter is pro-rated.

2) Net Investment Income Incentive Fee: The Income Incentive Fee is calculated based on the amount by which (x) the “Pre-Incentive Fee Net Investment Income” (as defined below) for the calendar quarter exceeds (y) the “Preferred Return Amount” (as defined below) for the calendar quarter.

a. A “Preferred Return Amount” is calculated on a quarterly basis by multiplying 1.75% by the Company’s net asset value at the end of the immediately preceding calendar quarter.

b. The Net Investment Income Incentive Fee is then calculated as follows:

(i) no Net Investment Income Incentive Fee is payable to Oxford Square Management in any calendar quarter in which the “Pre-Incentive Fee Net Investment Income” does not exceed the “Preferred Return Amount”;

(ii) 100% of the “Pre-Incentive Fee Net Investment Income” for such quarter, if any, that exceeds the “Preferred Return Amount” but is less than or equal to a “Catch-Up Amount” determined on a quarterly basis by multiplying 2.1875% by OXSQ’s net asset value at the end of such calendar quarter; and

(iii) for any quarter in which the “Pre-Incentive Fee Net Investment Income” exceeds the “Catch-Up Amount,” the Net Investment Income Incentive Fee will be calculated at the rate of 20% of the amount of the “Pre-Incentive Fee Net Investment Income” for such quarter.

c. There is no accumulation of amounts from quarter to quarter for the “Preferred Return Amount,” and accordingly there is no claw back of amounts previously paid to Oxford Square Management if the “Pre-Incentive Fee Net Investment Income” for subsequent quarters is below the quarterly “Preferred Return Amount”.

d. The calculation of the Company’s Net Investment Income Incentive Fee is subject to a total return requirement (the “Total Return Requirement”) that provides that a Net Investment Income Incentive Fee will not be payable to Oxford Square Management except to the extent 20% of the “cumulative net increase in net assets resulting from operations” (which is the amount, if positive, of the sum of the “Pre-Incentive Fee Net Investment Income,” realized gains and losses and unrealized appreciation and depreciation) during the calendar quarter for which such fees are being calculated and the eleven (11) preceding quarters exceeds the cumulative Net Investment Income Incentive Fees accrued and/or paid for such eleven (11) preceding quarters.

3) Capital Gains Incentive Fee. The second part of the incentive fee, the “Capital Gains Incentive Fee,” is determined as described above.

Example 1: Net Investment Income Portion of Incentive Fee for Each Calendar Quarter (applying 2016 Fee Waiver)

Hypothetical Scenario 1

Quarterly Investment income (including interest, dividends, fees, etc.) = 1.25%

Quarterly Hurdle rate = 1.75%

Base Fee(1) = 0.375%

Quarterly Other expenses (legal, accounting, custodian, transfer agent, etc.) = 0.2%

Pre-Incentive Fee Net Investment Income (investment income – (Base Fee + other expenses)) = 0.675%

Pre-Incentive Fee Net Investment Income does not exceed hurdle rate, therefore there is no income-related incentive fee.

Hypothetical Scenario 2

Quarterly Investment income (including interest, dividends, fees, etc.) = 2.50%

Quarterly Hurdle rate = 1.75%

Base Fee(1) = 0.375%

Quarterly Other expenses (legal, accounting, custodian, transfer agent, etc.) = 0.2%

Pre-Incentive Fee Net Investment Income (investment income – (Base Fee + other expenses)) = 1.925%

The Total Return Requirement is met (no Net Investment Income Incentive Fee would be payable if the Total Return Requirement were not met).

Incentive fee = 100%* Pre-Incentive Fee Net Investment Income in excess of the hurdle rate but less than 2.1875% and 20% of any Pre-Incentive Fee Net Investment Income thereafter.

= 100%* (1.925% – 1.75%)

= 100%* 0.175%

= 0.175%

Pre-Incentive Fee Net Investment Income exceeds the hurdle rate but is less than 2.1875%. Therefore the income-related incentive fee is 0.175%.

Hypothetical Scenario 3

Quarterly Investment income (including interest, dividends, fees, etc.) = 4.00%

Quarterly Hurdle rate = 1.75%

Base Fee(1) = 0.375%

Quarterly Other expenses (legal, accounting, custodian, transfer agent, etc.) = 0.2%

Pre-Incentive Fee Net Investment Income (investment income – (Base Fee + other expenses)) = 3.425%

The Total Return Requirement is met (no Net Investment Income Incentive Fee would be payable if the Total Return Requirement were not met).

Incentive fee = 100% * Pre-Incentive Fee Net Investment Income in excess of the hurdle rate but less than 2.1875% and 20% of any Pre-Incentive Fee Net Investment Income thereafter.

= 100%* (2.1875% – 1.75%) + 20%* (3.425% – 2.1875%)

= 100%* 0.4375% + 20%* 1.2375%

= 0.4375% + 0.2475%

= 0.685%

Pre-Incentive Fee Net Investment Income exceeds the hurdle rate and 2.1875%. Therefore the income-related incentive fee is 0.685%.

____________

(1) Represents 1.50% annualized Base Fee.

Example 2: Capital Gains Portion of Incentive Fee (*)

Capital Gains Incentive Fee = 20% × Incentive Fee Capital Gains (i.e., our realized capital gains for each calendar year, computed net of all realized capital losses and unrealized capital depreciation for that calendar year).

Hypothetical Scenarios:

• Year 1 = no realized capital gains or losses

• Year 2 = 9% realized capital gains, 0% realized capital losses, 1% unrealized depreciation and 0% unrealized appreciation

• Year 3 = 12% realized capital gains, 0% realized capital losses, 2% unrealized depreciation and 2% unrealized appreciation

Year 1 incentive fee		• Total Incentive Fee Capital Gains = 0
		• No Capital Gains Incentive Fee paid to Oxford Square Management in Year 1
Year 2 incentive fee		• Total Incentive Fee Capital Gains = 8%
		(9% realized capital gains less 1% unrealized depreciation)
		• Total Capital Gains Incentive Fee paid to Oxford Square Management in Year 2
		= 20% × 8%
		= 1.6%
Year 3 incentive fee		• Total Incentive Fee Capital Gains = 10%
		(12% realized capital gains less 2% unrealized depreciation; unrealized appreciation has no effect)
		• Total Capital Gains Incentive Fee paid to Oxford Square Management in Year 3
		= 20% × 10%
		= 2%

____________

(*) The theoretical amounts of returns shown are based on a percentage of our total net assets and assume no leverage. There is no guarantee that positive returns will be realized, and actual returns may vary from those shown in this example.

Payment of our Expenses

Our primary operating expenses are: (i) the payment of advisory fees under the Investment Advisory Agreement, and (ii) the allocable portion of overhead and various other expenses incurred by Oxford Funds on our behalf, including rent and the provision of personnel and facilities. Our investment advisory fee compensates Oxford Square Management for acting as our investment adviser, managing the investment and reinvestment of our assets, and, specifically for its work in identifying, evaluating, negotiating, executing and servicing our investments. We bear all other expenses of our operations and transactions, including (without limitation) fees and expenses relating to:

• expenses of offering our debt and equity securities;

• the investigation and monitoring of our investments, including expenses and travel fees incurred in connection with investment due diligence and on-site visits;

• the cost of calculating our net asset value (“NAV”);

• the cost of effecting sales and repurchases of shares of our common stock and other securities;

• investment management and incentive fees payable pursuant to the Investment Advisory Agreement;

• fees payable to third parties relating to, or associated with, making investments and valuing investments (including third-party valuation firms);

• transfer agent, trustee and custodial fees;

• interest payments and other costs related to our borrowings;

• fees and expenses associated with our website, public relations and marketing efforts (including attendance at industry and investor conferences and similar events);

• federal and state registration fees;

• any exchange listing fees;

• U.S. federal, state and local taxes;

• independent directors’ fees and expenses, including travel expenses, and other costs of the Board’s meetings and other costs associated with the performance of independent directors’ responsibilities;

• brokerage commissions;

• costs of preparing and mailing proxy statements, stockholders’ reports and notices, including annual proxy solicitations and stockholder meetings;

• costs of preparing government filings, including periodic and current reports with the SEC;

• fidelity bond, directors and officers/errors and omissions liability insurance and other insurance premiums; and

• direct costs such as printing, mailing, long distance telephone, staff, rent, independent audits and outside legal costs and all other expenses incurred by either Oxford Funds or us in connection with administering our business, including payments under the Administration Agreement that will be based upon our allocable portion of overhead and other expenses incurred by Oxford Funds on our behalf under the Administration Agreement, including a portion of the rent and the compensation and related expenses of our Chief Financial Officer, our accounting support staff and other administrative support personnel. Related expenses include but are not limited to employee benefit costs, payroll taxes and travel and training expenses. The costs associated with the functions performed by our Chief Compliance Officer are paid by us pursuant to the terms of an agreement between the Company and ACA Group, LLC, a compliance consulting firm.

All of these expenses are ultimately borne by our common stockholders.

All personnel of our investment adviser when and to the extent engaged in providing investment advisory services, and the compensation and related expenses of such personnel allocable to such services, will be provided and paid for by Oxford Funds, the investment adviser’s managing member.

Duration and Termination

Unless earlier terminated as described below, the Investment Advisory Agreement will remain in effect if approved annually by our Board or by the affirmative vote of the holders of a majority of our outstanding voting securities, including, in either case, approval by a majority of our directors who are not “interested persons” as defined in Section 2(a)(19) of the 1940 Act. On April 2522, ~~2024~~2025, the Board of Directors re-approved the Investment Advisory Agreement at an in-person meeting. The Investment Advisory Agreement will automatically terminate in the event of its assignment. The Investment Advisory Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other. Refer to “Item 1A. Risk Factors — Risks relating to our business and structure — WeOur ~~are~~investment ~~dependent~~adviser ~~upon~~can ~~Oxford~~resign ~~Square~~on ~~Management~~60 days’s ~~key~~notice, ~~management~~and ~~personnel~~we ~~for~~may ~~our~~not ~~future~~be ~~success~~able to find a suitable replacement within that time, ~~particularly~~resulting ~~Jonathan~~in ~~H. Cohen~~a disruption in our operations that could adversely affect our financial condition, business and ~~Saul~~results Bof operations. ~~Rosenthal.~~”

Indemnification

The Investment Advisory Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of their respective duties or by reason of the reckless disregard of their respective duties and obligations, Oxford Square Management and its officers, managers, agents, employees, controlling persons, members and any other person or entity affiliated with it, including without limitation Oxford Funds, are entitled to indemnification from OXSQ for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of Oxford Square Management’s services under the Investment Advisory Agreement or otherwise as an investment adviser of OXSQ.

Organization of the Investment Adviser

Oxford Square Management is a Delaware limited liability company that is registered as an investment adviser under the Advisers Act. Oxford Funds, a Delaware limited liability company, is Oxford Square Management’s managing member and provides it with all personnel necessary to manage our day-to-day operations and provide the services under the Investment Advisory Agreement. The principal address of Oxford Square Management and of Oxford Funds is 8 Sound Shore Drive, Suite 255, Greenwich, Connecticut 06830.

Oxford Funds is the managing member of Oxford Square Management. Charles M. Royce, a member of our Board, has a minority, non-controlling interest in Oxford Square Management.

ADMINISTRATION AGREEMENT

Pursuant to a separate Administration Agreement, Oxford Funds furnishes us with office facilities, together with equipment and clerical, bookkeeping and record keeping services at such facilities. Under the Administration Agreement, Oxford Funds also performs, or oversees the performance of, our required administrative services, which includes being responsible for the financial records which we are required to maintain and preparing reports to our stockholders and reports filed with the SEC. In addition, Oxford Funds assists us in determining and publishing our net asset value, overseeing the preparation and filing of our tax returns and the printing and dissemination of reports to our stockholders, and generally overseeing the payment of our expenses and the performance of administrative and professional services rendered to us by others. Payments under the Administration Agreement are based upon our allocable portion of overhead and other expenses incurred by Oxford Funds on our behalf under the Administration Agreement, including a portion of the rent and the compensation of our Chief Financial Officer, our accounting support staff and other administrative support personnel. We also reimburse Oxford Funds for the costs associated with the functions performed by our Chief Compliance Officer that Oxford Funds pays on our behalf pursuant to the terms of an agreement between us and ACA Group, LLC. The Administration Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other party.

The Administration Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of their respective duties or by reason of the reckless disregard of their respective duties and obligations, Oxford Funds and its officers, managers, agents, employees, controlling persons, members and any other person or entity affiliated with it are entitled to indemnification from OXSQ for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of Oxford Funds’ services under the Administration Agreement or otherwise as administrator for OXSQ.

Summary Risk Factors

The risk factors described below are a summary of the principal risk factors associated with an investment in us. These are not the only risks we face. You should carefully consider these risk factors, together with the risk factors set forth in Item 1A. of this Annual Report on Form 10-K and the other reports and documents filed by us with the SEC.

Risks Relating to Our Business and Structure

• Any failure on our part to maintain our status as a business development company would reduce our operating flexibility, including our ability to borrow money.

• We are dependent upon Oxford Square Management’s key management personnel for our future success, particularly Jonathan H. Cohen and Saul B. Rosenthal.

• Our financial condition and results of operations will depend on our ability to manage our existing portfolio and future growth effectively.

• We operate in a highly competitive market for investment opportunities.

• Our business model depends to a significant extent upon strong referral relationships with financial sponsors, and the inability of the senior investment professionals of our investment adviser to maintain or develop these relationships, or the failure of these relationships to generate investment opportunities, could adversely affect our business.

• There will be uncertainty as to the value of our portfolio investments, which may impact our net asset value.

• Our business is subject to increasingly complex corporate governance, public disclosure and accounting requirements that could adversely affect our business and financial results.

• A disruption in the capital markets and the credit markets could negatively affect our business.

• We are permitted to borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us.

• Regulations governing our operation as a BDC affect our ability to, and the way in which we raise additional capital, which may expose us to risks, including the typical risks associated with leverage.

• There are significant potential conflicts of interest between OXSQ and our management team.

• Our Board of Directors may change our investment objective, operating policies and strategies without prior notice or stockholder approval.

Risks Related to U.S. Federal Tax Regulation

• We will be subject to U.S. federal income tax at corporate rates, if we are unable to qualify for tax treatment as a RIC for U.S. federal income tax purposes.

Risks Relating to Our Investments

• Our investment portfolio may be concentrated in a limited number of portfolio companies, which will subject us to a risk of significant loss if any of these companies defaults on its obligations under any of its debt securities that we hold or if the sectors in which we invest experience a market downturn.

• The lack of liquidity in our investments may adversely affect our business.

• If we cannot obtain additional capital because of either regulatory or market price constraints, we could be forced to curtail or cease our new lending and investment activities, our net asset value could decrease and our level of distributions and liquidity could be affected adversely.

• Our investments in the companies that we target may be extremely risky and we could lose all or part of our investments.

• Our incentive fee may induce Oxford Square Management to use leverage and to make speculative investments.

• Our portfolio companies may incur debt that ranks equally with, or senior to, our investments in such companies.

• Our investments in CLO vehicles are riskier and less transparent to us and our stockholders than direct investments in the underlying senior loans.

Risks Relating to an Investment in Our Securities

• Our common stock price may be volatile.

• Our shares of common stock have traded at a discount from net asset value and may do so in the future.

• There is a risk that investors in our equity securities will not receive distributions or that our distributions will not grow over time and a portion of our distributions could be a return of capital.

COMPETITION

Our primary competitors to provide financing to primarily non-public companies include private equity and venture capital funds, other equity and non-equity based investment funds, including other BDCs, and investment banks and other sources of financing, including traditional financial services companies such as commercial banks and specialty finance companies. Many of these entities may have greater financial and managerial resources than we have. For additional information concerning the competitive risks we face, refer to “Item 1A. Risk Factors — Risks Relating to Our Business and Structure — We operate in a highly competitive market for investment opportunities.”

EMPLOYEES

We have no employees. Our day-to-day investment operations are managed by Oxford Square Management. In addition, we reimburse Oxford Funds for an allocable portion of expenses incurred by it on our behalf under the Administration Agreement, including a portion of the rent and the compensation of our Chief Financial Officer, accounting staff and other administrative support personnel. We will also pay the costs associated with the functions performed by our Chief Compliance Officer under the terms of an agreement between the Company and ACA Group, LLC.

Officer, accounting staff and other administrative support personnel. We will also pay the costs associated with the functions performed by our Chief Compliance Officer under the terms of an agreement between the Company and ACA Group, LLC.

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

As a BDC, we have elected to be treated, and intend to qualify annually, as a RIC under Subchapter M of the Code, beginning with our 2003 taxable year. As a RIC, we generally will not be subject to U.S. federal income tax on any ordinary income or capital gains that we timely distribute to our stockholders as dividends. To continue to qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements (as described below). In addition, to qualify for RIC tax treatment we must distribute to our stockholders, for each taxable year, at least 90% of our “investment company taxable income,” which is generally our ordinary income plus the excess of our realized net short-term capital gains over our realized net long-term capital losses (the “Annual Distribution Requirement”).

Taxation as a RIC

If we qualify as a RIC; and satisfy the Annual Distribution Requirement, then we will not be subject to U.S. federal income tax on the portion of our investment company taxable income and net capital gain (i.e., realized net long-term capital gains in excess of realized net short-term capital losses) we timely distribute to stockholders. We will be subject to U.S. federal income tax at the regular corporate rates on any income or capital gains not distributed (or deemed distributed) to our stockholders.

We will be subject to a 4% nondeductible U.S. federal excise tax on certain undistributed income unless we distribute in a timely manner an amount at least equal to the sum of (1) 98% of our net ordinary income for each calendar year, (2) 98.2% of our capital gain net income for the one-year period ending October 31 in that calendar year and (3) any income and net capital gain that we recognized in preceding years but were not distributed in such years, and on which we paid no U.S. federal income tax (the “Excise Tax Avoidance Requirement”). We generally will endeavor in each taxable year to make sufficient distributions to our stockholders to satisfy the Excise Tax Avoidance Requirement.

In order to qualify as a RIC for U.S. federal income tax purposes, we must, among other things:

• at all times during each taxable year, be registered under the 1940 Act as a management company or unit investment trust, or have in effect an election under the 1940 Act to be treated as a BDC;

• derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to loans of certain securities, gains from the sale of stock or other securities, net income from certain “qualified publicly traded partnerships,” or other income derived with respect to our business of investing in such stock or securities (the “90% Income Test”); and

• diversify our holdings so that at the end of each quarter of the taxable year:

• at least 50% of the value of our assets consists of cash, cash equivalents, U.S. government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer; and

• no more than 25% of the value of our assets is invested in (i) the securities, other than U.S. government securities or securities of other RICs, of one issuer (ii) the securities, other than securities of other RICs, of two or more issuers that are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses; or (iii) the securities of certain “qualified publicly traded partnerships” (the “Diversification Tests”).

We may be required to recognize taxable income in circumstances in which we do not receive cash. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments with PIK interest or, in certain cases, increasing interest rates or issued with warrants), we must include in income each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. We may also have to include in income other amounts that we have not yet received in cash, such as PIK interest and deferred loan origination fees that are paid after origination of the loan or are paid in non-cash compensation such as warrants or stock. Because any original issue discount or other amounts accrued will be included in our investment company taxable income for the year of accrual, we may be required to make a distribution to our stockholders in order to satisfy the Annual Distribution Requirement, even though we will not have received any corresponding cash amount. In addition, we may be required to accrue for U.S. federal income tax purposes amounts attributable to our investment in CLOs that may differ from the distributions received in respect of such investments. Although we do not presently expect to do so, we are authorized to borrow funds, to sell assets and to make taxable distributions of our stock and debt securities in order to satisfy distribution requirements. Our ability to dispose of assets to meet our distribution requirements may be limited by (1) the illiquid nature of our portfolio and/or (2) other requirements relating to our status as a RIC, including the Diversification Tests. If we dispose of assets in order to meet the Annual Distribution Requirement or the Excise Tax Avoidance Requirement, we may make such dispositions at times that, from an investment standpoint, are not advantageous. If we are unable to obtain cash from other sources to satisfy the Annual Distribution Requirement, we may fail to qualify for tax treatment as a RIC and become subject to tax as a corporation.

Under the 1940 Act, we are not permitted to make distributions to our stockholders while our debt obligations and other senior securities are outstanding unless certain “asset coverage” tests are met. If we are prohibited to make distributions, we may fail to qualify for tax treatment as a RIC and become subject to tax as an ordinary corporation.

We have purchased and may in the future purchase residual or subordinated interests in CLOs that are treated for U.S. federal income tax purposes as shares in a “passive foreign investment company” or a PFIC. We may be subject to U.S. federal income tax on our allocable share of a portion of any “excess distribution” received on, or any gain from the disposition of, such shares. Additional charges, in the nature of interest, generally will be imposed on us in respect of deferred taxes arising from any such excess distribution or gain. This additional tax and interest may apply even if we make a distribution in an amount equal to any “excess distribution” or gain from the disposition of such shares as a taxable dividend by us to our stockholders. If we elect to treat a PFIC as a “qualified electing fund” under the Code (a “QEF”), in lieu of the foregoing requirements, we will be required to include in income each year our proportionate share of the ordinary earnings and net capital gain of the QEF, even if such income is not distributed by the QEF. Alternatively, we may be able to elect to mark-to-market at the end of each taxable year our shares in a PFIC; in this case, we will recognize as ordinary income our allocable share of any increase in the value of such shares, and as ordinary loss our allocable share of any decrease in such value to the extent that any such decrease does not exceed prior increases included in our income. Under either election, we may be required to recognize in a year income in excess of distributions from PFICs and proceeds from dispositions of PFIC shares during that year, and such income will nevertheless be subject to the Annual Distribution Requirement and will be taken into account for purposes of the Excise Tax Avoidance Requirement.

If we hold more than 10% of the shares in a foreign corporation that is treated as a controlled foreign corporation or a CFC (including equity tranche investments in a CLO treated as a CFC), we may be treated as receiving a deemed distribution (taxable as ordinary income) each year from such foreign corporation in an amount equal to our pro rata share of the corporation’s income for the tax year (including both ordinary earnings and capital gains), whether or not the corporation makes an actual distribution during such year. This deemed distribution is required to be included in the income of a U.S. Stockholder (as defined below) of a CFC regardless of whether the stockholder has made a QEF election with respect to such CFC. In general, a foreign corporation will be classified as a CFC if more than 50% of the shares of the corporation, measured by reference to combined voting power or value, is owned (directly, indirectly or by attribution) by U.S. Stockholders. A “U.S. Stockholder,” for this purpose, is any U.S. person that possesses (actually or constructively) 10% or more of the combined voting power or value of all classes of shares of a corporation. If we are treated as receiving a deemed distribution from a CFC, we will be required to include such distribution in our investment company taxable income regardless of whether we receive any actual distributions from such CFC, and we must distribute such income to satisfy the Annual Distribution Requirement and the Excise Tax Avoidance Requirement.

Income inclusions from a QEF or a CFC will be “good income” for purposes of the 90% Income Test provided that they are derived in connection with our business of investing in stocks and securities or the QEF or the CFC distribute such income to us in the same taxable year to which the income is included in our income.

Failure to Qualify as a RIC

If we were unable to qualify for treatment as a RIC, and certain cure provisions are not met, we would be subject to tax on all of our taxable income at regular corporate rates, regardless of whether we make any distributions to our stockholders. Distributions would not be required, and any distributions made would be taxable to our stockholders as ordinary dividend income that, subject to certain limitations, may be eligible for the 20.0% maximum rate to the extent of our current and accumulated earnings and profits provided certain holding period and other requirements were met. Subject to certain limitations under the Code, corporate distributees would be eligible for the dividends-received deduction. Distributions in excess of our current and accumulated earnings and profits would be treated first as a return of capital to the extent of the stockholder’s adjusted tax basis, and any remaining distributions would be treated as a capital gain. To requalify as a RIC in a subsequent taxable year, we would be required to satisfy the RIC qualification requirements for that year and dispose of any earnings and profits from any year in which we failed to qualify as a RIC. Subject to a limited exception applicable to RICs that qualified as such under the Code for at least one year prior to disqualification and that requalify as a RIC no later than the second year following the nonqualifying year, we would be subject to tax on any unrealized net built-in gains in the assets held by us during the period in which we failed to qualify as a RIC that are recognized within the subsequent 5 years, unless we made a special election to pay U.S. federal income tax at corporate rates on such built-in gains at the time of our requalification as a RIC.

REGULATION AS A BUSINESS DEVELOPMENT COMPANY

General

A BDC is regulated by the 1940 Act. A BDC must be organized in the United States for the purpose of investing in or lending to primarily private companies and making managerial assistance available to them. A BDC may use capital provided by public stockholders and from other sources to invest in long-term, private investments in businesses. A BDC provides stockholders the ability to retain the liquidity of a publicly traded stock, while sharing in the possible benefits, if any, of investing in primarily privately owned companies.

We may not change the nature of our business so as to cease to be, or withdraw our election as, a BDC unless authorized by the vote of a majority of the outstanding voting securities, as required by the 1940 Act. A majority of the outstanding voting securities of a company is defined under the 1940 Act as the lesser of: (i) 67% or more of such company’s voting securities present at a meeting if more than 50% of the outstanding voting securities of such company are present or represented by proxy, or (ii) more than 50% of the outstanding voting securities of such company. We currently do not anticipate any substantial change in the nature of our business.

As with other companies regulated by the 1940 Act, a BDC must adhere to certain substantive regulatory requirements. A majority of our directors must be persons who are not “interested persons,” as that term is defined in Section 2(a)(19) the 1940 Act. Additionally, we are required to provide and maintain a bond issued by a reputable fidelity insurance company to protect the BDC. Furthermore, as a BDC, we are prohibited from protecting any director or officer against any liability to the company or our stockholders arising from willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such person’s office.

As a BDC, we are required to meet a coverage ratio of the value of total assets to total senior securities, which includes all of our borrowings and any preferred stock we may issue in the future. On April 6, 2018, the Board, including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) of the Board, approved the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act. As a result, our asset coverage requirement under the 1940 Act for senior securities was changed from 200% to 150%, effective as of April 6, 2019. In other words, under the 1940 Act, we are able to borrow $2 for investment purposes for every $1 of investor equity. We may also be prohibited under the 1940 Act from knowingly participating in certain transactions with our affiliates without the prior approval of our directors who are not interested persons and, in some cases, prior approval by the SEC.

We are not generally able to sell our common stock at a price below net asset value per share. Refer to “Risk Factors — Risks Relating to our Business and Structure — Regulations governing our operation as a BDC affect our ability to, and the way in which we raise additional capital, which may expose us to risks, including the typical risks associated with leverage.” We may, however, sell our common stock at a price below net asset value per share (i) in connection with a rights offering to our existing stockholders, (ii) with the consent of the majority of our

~~We are not generally able to sell our~~ common stock at a price below net asset value per share. Refer to “Risk Factors — Risks Relating to our Business and Structure — Regulations governing our operation as a BDC affect our ability to, and the way in which we raise additional capital, which may expose us to risks, including the typical risks associated with leverage.” We may, however, sell our common stock at a price below net asset value per share (i) in connection with a rights offering to our existing stockholders, ~~(ii) with the consent of the majority of our common stockholders,~~ or (iii) under such other circumstances as the SEC may permit. For example, we may sell our common stock, or warrants, options or rights to acquire our common stock, at a price below the then current net asset value of our common stock if our Board determines that such sale is in our best interests and the best interests of our stockholders, and our stockholders approve our policy and practice of making such sales. In any such case, under such circumstances, the price at which our common stock is to be issued and sold may not be less than a price which, in the determination of our Board, closely approximates the market value of such common stock. In addition, we may generally issue new shares of our common stock at a price below the net asset value in rights offerings to existing stockholders, in payment of distributions and in certain other limited circumstances.

We may be examined by the SEC for compliance with the 1940 Act.

As a BDC, we are subject to certain risks and uncertainties. Refer to “Item 1A. Risk Factors — Risks Relating to our Business and Structure.”

Qualifying Assets

As a BDC, we may not acquire any asset other than “qualifying assets” unless, at the time we make the acquisition, the value of our qualifying assets represent at least 70% of the value of our total assets. The principal categories of qualifying assets relevant to our business are:

(1) Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an eligible portfolio company (as defined below), or from any person who is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules as may be prescribed by the SEC.

(2) Securities of any portfolio company which we control, as defined by the 1940 Act.

(3) Securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person of the issuer, or in transactions incident thereto, if the issuer is in bankruptcy and subject to reorganization or if the issuer, immediately prior to the purchase of its securities was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements.

(4) Securities of an eligible portfolio company purchased from any person in a private transaction if there is no ready market for such securities and we already own 60% of the outstanding equity of the eligible portfolio company.

(5) Securities received in exchange for or distributed on or with respect to securities described in (1) through (4) above, or pursuant to the exercise of warrants or rights relating to such securities.

(6) Cash, cash equivalents, U.S. Government securities or high-quality debt securities maturing in one year or less from the time of investment.

An eligible portfolio company is defined in the 1940 Act as any issuer which:

(a) is organized under the laws of, and has its principal place of business in, the United States;

(b) is not an investment company (other than a SBIC wholly owned by the BDC) or a company that would be an investment company but for certain exclusions under the 1940 Act; and

i. does not have any class of securities that is traded on a national securities exchange or has a class of securities listed on a national securities exchange but has an aggregate market value of outstanding voting and non-voting common equity of less than $250 million;

ii. is controlled by a BDC or a group of companies including a BDC and the BDC has an affiliated person who is a director of the eligible portfolio company; or

iii. is a small and solvent company having total assets of not more than $4 million and capital and surplus of not less than $2 million.

Control, as defined by the 1940 Act, is presumed to exist where a BDC beneficially owns more than 25% of the outstanding voting securities of the portfolio company.

In addition, a BDC must have been organized and have its principal place of business in the United States and must be operated for the purpose of making investments in eligible portfolio companies, or in other securities that are consistent with its purpose as a BDC.

Significant Managerial Assistance

BDCs generally must offer to make available to the issuer of the securities significant managerial assistance, except in circumstances where either (i) the BDC controls such issuer of securities or (ii) the BDC purchases such securities in conjunction with one or more other persons acting together and one of the other persons in the group makes available such managerial assistance. Making available managerial assistance means, among other things, any arrangement whereby the BDC offers to provide, and, if accepted, does so provide, significant guidance and counsel concerning the management, operations or business objectives and policies of a portfolio company. The Administrator or its affiliate provides such managerial assistance on our behalf to portfolio companies that request this assistance.

Code of Ethics and Insider Trading Policy

As required by the 1940 Act, we maintain a Code of Ethics and Insider Trading Policy, or “Code of Ethics,” that establishes procedures for personal investments and restricts certain transactions by our personnel. ~~Refer to “Item 1A. Risk Factors — Risks Relating to our Business and Structure — There are significant potential conflicts of interest between OXSQ and our management team.”~~ Our Code of Ethics generally does not permit investments by our employees in securities that may be purchased or held by us. The Code of Ethics is available on the EDGAR Database on the SEC’s website at http://www.sec.gov. You may obtain copies of the Code of Ethics, after paying a duplicating fee, by electronic request at the following email address: [email protected]. Our Code of Ethics is also available on our website at http://oxfordsquarecapital.com/.

Compliance Policies and Procedures

We and Oxford Square Management have adopted and implemented written policies and procedures reasonably designed to prevent violation of the federal securities laws, and are required to review these compliance policies and procedures annually for their adequacy and the effectiveness of their implementation, and to designate a Chief Compliance Officer to be responsible for administering the policies and procedures.

Sarbanes-Oxley Act of 2002

The Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) imposes a wide variety of regulatory requirements on publicly-held companies and their insiders. Many of these requirements affect us. For example:

• pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), our Chief Executive Officer and Chief Financial Officer must certify the accuracy of the financial statements contained in our periodic reports;

• pursuant to Item 307 of Regulation S-K, our periodic reports must disclose our conclusions about the effectiveness of our disclosure controls and procedures;

• pursuant to Rule 13a-15 of the Exchange Act, our management must prepare a report regarding its assessment of our internal control over financial reporting and, to the extent that we are a “large accelerated filer” or an “accelerated filer” under Rule 12b-2 under the Exchange Act, must obtain an audit of the effectiveness of internal control over financial reporting performed by our independent registered public accounting firm; and

• pursuant to Item 308 of Regulation S-K and Rule 13a-15 of the Exchange Act, our periodic reports must disclose whether there were significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

The Sarbanes-Oxley Act requires us to review our current policies and procedures to determine whether we comply with the Sarbanes-Oxley Act and the regulations promulgated thereunder. We will continue to monitor our compliance with all regulations that are adopted under the Sarbanes-Oxley Act and will take actions necessary to ensure that we are in compliance therewith.

Proxy Voting Policies and Procedures

We have delegated our proxy voting responsibility to our investment adviser, Oxford Square Management. The Proxy Voting Policies and Procedures of Oxford Square Management are set forth below. The guidelines are reviewed periodically by Oxford Square Management, and, accordingly, are subject to change.

Introduction

As an investment adviser registered under the Advisers Act, Oxford Square Management has a fiduciary duty to act solely in the best interests of its clients. As part of this duty, Oxford Square Management recognizes that it must vote client securities in a timely manner free of conflicts of interest and in the best interests of its clients.

These policies and procedures for voting proxies for Oxford Square Management’s investment advisory clients are intended to comply with Section 206 of, and Rule 206(4)-6 under, the Advisers Act.

Proxy Policies

Oxford Square Management will vote proxies relating to our portfolio securities in the best interests of the Company’s stockholders. Oxford Square Management will review on a case-by-case basis each proposal submitted to a stockholder vote to determine its impact on the portfolio securities held by us. Although Oxford Square Management will generally vote against proposals that may have a negative impact on our portfolio securities, it may vote for such a proposal if there exist compelling long-term reasons to do so. Oxford Square Management will abstain from voting only in unusual circumstances and where there is a compelling reason to do so.

The proxy voting decisions of Oxford Square Management are made by the senior officers of Oxford Square Management who are responsible for monitoring each of our investments. To ensure that its vote is not the product of a conflict of interest, Oxford Square Management requires that: (i) anyone involved in the decision making process disclose to Oxford Square Management’s Chief Compliance Officer any potential conflict that he or she is aware of and any contact that he or she has had with any interested party regarding a proxy vote; and (ii) employees involved in the decision making process or vote administration are prohibited from revealing how Oxford Square Management intends to vote on a proposal without the prior approval of the Chief Compliance Officer and senior management in order to reduce any attempted influence from interested parties.

Proxy Voting Records

You may obtain information about how Oxford Square Management voted proxies by making a written request for proxy voting information to: Chief Compliance Officer, Oxford Square Management, LLC, 8 Sound Shore Drive, Suite 255, Greenwich, CT 06830.

Periodic Reporting and Audited Financial Statements

We have registered our common stock under the Exchange Act, and have reporting obligations thereunder, including the requirement that we file annual and quarterly reports with the SEC. In accordance with the requirements of the Exchange Act, this annual report contains financial statements audited and reported on by our independent registered public accounting firm. You may obtain our annual reports on Form 10-K, our quarterly reports on Form 10-Q, and our current reports on Form 8-K on our website at http://oxfordsquarecapital.com/ free of charge as soon as reasonably practicable after we file such reports electronically with the SEC.

NASDAQ Global Select Market Requirements

We have adopted certain policies and procedures intended to comply with the NASDAQ Global Select Market’s corporate governance rules. We will continue to monitor our compliance with all future listing standards that are approved by the SEC and will take actions necessary to ensure that we are in compliance therewith.

Item 1A. Risk Factors

Investing in our securities involves a number of significant risks. In addition to the other information contained in this Annual Report on Form 10-K, you should consider carefully the following information before making an investment in our securities. The risk factors described below are the principal risk factors associated with an investment in our securities, as well as those factors generally associated with a business development company with investment objectives, investment policies, capital structure or trading markets similar to ours, including the risks associated with investing in a portfolio of small and developing or financially troubled businesses. Additional risks and uncertainties not presently known to us or not presently deemed material by us might also impair our operations and performance. If any of the following events occur, our business, financial condition and results of operations could be materially and adversely affected. In such case, our net asset value and the trading price of our securities could decline, and you may lose all or part of your investment.

RISKS RELATING TO OUR BUSINESS AND STRUCTURE

Any failure on our part to maintain our status as a BDC would reduce our operating flexibility, including our ability to borrow money.

If we do not remain a BDC, we might be regulated as a closed-end investment company under the 1940 Act, which would subject us to substantially more regulatory restrictions under the 1940 Act and correspondingly decrease our operating flexibility, including our ability to borrow money.

We are dependent upon Oxford Square Management’s key management personnel for our future success, particularly Jonathan H. Cohen and Saul B. Rosenthal.

We depend on the diligence, skill and network of business contacts of the senior management of Oxford Square Management. The senior management, together with other investment professionals, will evaluate, negotiate, structure, close, monitor and service our investments. Our future success will depend to a significant extent on the continued service and coordination of the senior management team, particularly Jonathan H. Cohen, the Chief Executive Officer of Oxford Square Management, and Saul B. Rosenthal, the President and Chief Operating Officer of Oxford Square Management. Neither Mr. Cohen nor Mr. Rosenthal will devote all of their business time to our operations, and both will have other demands on their time as a result of their other activities. Neither Mr. Cohen nor Mr. Rosenthal is subject to an employment contract. The departure of either of these individuals could have a material adverse effect on our ability to achieve our investment objective. In addition, due to Oxford Square Management’s relatively small staff size, the departure of any of Oxford Square Management’s personnel, including investment, accounting and compliance professionals, could have a material adverse effect on us.

Our financial condition and results of operations will depend on our ability to manage our existing portfolio and future growth effectively.

Our ability to achieve our investment objective will depend on our ability to manage our existing investment portfolio and to grow, which will depend, in turn, on our investment adviser’s ability to identify, analyze, invest in and finance companies that meet our investment criteria, and our ability to raise and retain debt and equity capital. Accomplishing this result on a cost-effective basis is largely a function of our investment adviser’s structuring of the investment process, its ability to provide competent, attentive and efficient services to us and our access to financing on acceptable terms.

We and Oxford Square Management, through its managing member, Oxford Funds, will need to continue to hire, train, supervise and manage new employees. Failure to manage our future growth effectively could have a material adverse effect on our business, financial condition and results of operations.

We operate in a highly competitive market for investment opportunities.

A large number of entities compete with us to make the types of investments that we make. We compete with a large number of hedge funds and CLO investment vehicles, other equity and non-equity based investment funds, including other BDCs, investment banks and other sources of financing, including traditional financial services companies such as commercial banks and specialty finance companies. Many of our competitors are substantially larger than us and have considerably greater financial, technical and marketing resources than we do. For example, some competitors may have a lower cost of funds and access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, many of our competitors are not subject to the regulatory restrictions that the 1940 Act imposes on us as a BDC. If we are unable to source attractive investments, we may hold a greater percentage of our assets in cash than anticipated, which could impact potential returns on our portfolio. There can be no assurance that the competitive pressures we face will not have a material adverse effect on our business, financial condition and results of operations. Also, as a result of this competition, we may not be able to take advantage of attractive investment opportunities from time to time, and we can offer no assurance that we will be able to identify and make investments that are consistent with our investment objective.

some competitors may have a lower cost of funds and access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, many of our competitors are not subject to the regulatory restrictions that the 1940 Act imposes on us as a BDC. If we are unable to source attractive investments, we may hold a greater percentage of our assets in cash than anticipated, which could impact potential returns on our portfolio. There can be no assurance that the competitive pressures we face will not have a material adverse effect on our business, financial condition and results of operations. Also, as a result of this competition, we may not be able to take advantage of attractive investment opportunities from time to time, and we can offer no assurance that we will be able to identify and make investments that are consistent with our investment objective.

Our business model depends to a significant extent upon strong referral relationships with financial sponsors, and the inability of the senior investment professionals of our investment adviser to maintain or develop these relationships, or the failure of these relationships to generate investment opportunities, could adversely affect our business.

We expect that the principals of our investment adviser will maintain and develop their relationships with financial sponsors, brokers and agents and we will rely to a significant extent upon these relationships to provide us with potential investment opportunities. If the senior investment professionals of our investment adviser fail to maintain their existing relationships or develop new relationships with other sponsors or sources of investment opportunities, we will not be able to grow our investment portfolio. In addition, individuals with whom the senior investment professionals of our investment adviser have relationships are not obligated to provide us with investment opportunities, and, therefore, there is no assurance that such relationships will generate investment opportunities for us. If our investment adviser is unable to source investment opportunities, we may hold a greater percentage of our assets in cash than anticipated, which could impact potential returns on our portfolio.

There will be uncertainty as to the value of our portfolio investments, which may impact our net asset value.

A large percentage of our portfolio investments are in the form of securities that are not publicly traded. The fair value of securities and other investments that are not publicly traded may not be readily determinable. We value these securities on a quarterly basis in accordance with our valuation policy, which is consistent with U.S. generally accepted accounting principles (“GAAP”). Our board of directors utilizes the services of third-party valuation firms to aid it in determining the fair value of certain securities. The board of directors discusses valuations and determines the fair value in good faith based on the input of our investment adviser and the respective third-party valuation firms. The factors that may be considered in fair value pricing our investments include the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings, the markets in which the portfolio company does business, comparisons to publicly traded companies, discounted cash flow and other relevant factors. Because such valuations, and particularly valuations of private securities and private companies, are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, our determinations of fair value may differ materially from the values that would have been used if a ready market for these securities existed. Our net asset value could be adversely affected if our determinations regarding the fair value of our investments were materially higher than the values that we ultimately realize upon the disposal of such securities.

Market conditions affect debt and equity capital markets in the U.S. and abroad and may in the future have a negative impact on our business and operations.

Equity capital may be difficult to raise because, subject to some limited exceptions which apply to us, as a BDC we are generally not able to issue additional shares of our common stock at a price less than net asset value. In addition, our ability to incur indebtedness (including by issuing preferred stock) is limited by applicable regulations such that our asset coverage, as defined in the 1940 Act, must equal at least 150% immediately after each time we incur indebtedness. The debt capital that will be available, if at all, may be at a higher cost and on less favorable terms and conditions in the future. Any inability to raise capital could have a negative effect on our business, financial condition and results of operations.

incur indebtedness. The debt capital that will be available, if at all, may be at a higher cost and on less favorable terms and conditions in the future. Any inability to raise capital could have a negative effect on our business, financial condition and results of operations.

The illiquidity of our investments may make it difficult for us to sell such investments if required. As a result, we may realize significantly less than the value at which we have recorded our investments. In addition, significant changes in the capital markets, including periods of extreme volatility and disruption, have had, and may in the future have, a negative effect on the valuations of our investments and on the potential for liquidity events involving our investments. An inability to raise capital, and any required sale of our investments for liquidity purposes, could have a material adverse impact on our business, financial condition or results of operations.

Further downgrades of the U.S. credit rating, impending automatic spending cuts or another government shutdown could negatively impact our liquidity, financial condition and earnings.

U.S. debt ceiling and budget deficit concerns have increased the possibility of additional credit-rating downgrades and economic slowdowns, or a recession in the United States. Although U.S. lawmakers passed legislation to raise the federal debt ceiling on multiple occasions, ratings agencies have lowered or threatened to lower the long-term sovereign credit rating on the United States. The impact of this or any further downgrades to the U.S. government’s sovereign credit rating or its perceived creditworthiness could adversely affect the U.S. and global financial markets and economic conditions. Absent further quantitative easing by the Federal Reserve, these developments could cause interest rates and borrowing costs to rise, which may negatively impact our ability to access the debt markets on favorable terms. In addition, disagreement over the federal budget has caused the U.S. federal government to shut down for periods of time. Continued adverse political and economic conditions could have a material adverse effect on our business, financial condition and results of operations.

Our business is subject to increasingly complex corporate governance, public disclosure and accounting requirements that could adversely affect our business and financial results.

We are subject to changing rules and regulations of federal and state government as well as the stock exchange on which our common stock is listed. These entities, including the Public Company Accounting Oversight Board, the SEC and the NASDAQ Stock Market, have issued a significant number of new and increasingly complex requirements and regulations over the course of the last several years and continue to develop additional regulations and requirements in response to laws enacted by Congress. Our efforts to comply with these requirements have resulted in, and are likely to continue to result in, an increase in expenses and a diversion of management’s time from other business activities.

A disruption in the capital markets and the credit markets could negatively affect our business.

As a BDC, we seek to maintain our ability to raise additional capital for investment purposes. Without sufficient access to the capital markets or credit markets, we may not be able to pursue new business opportunities. Disruptive conditions in the financial industry and the impact of new legislation in response to those conditions could restrict our business operations and could adversely impact our results of operations and financial condition.

Our ability to grow our business could be impaired by an inability to access the capital markets or to enter into new credit facilities. Reflecting concern about the stability of the financial markets, many lenders and institutional investors have reduced or ceased providing funding to borrowers. This market disruption and tightening of credit has led to increased market volatility and widespread reduction of business activity generally. If we are unable to raise additional equity capital or consummate new credit facilities on terms that are acceptable to us, we may not be able to initiate significant originations.

These situations may arise due to circumstances that we may be unable to control, such as access to the credit markets, a severe decline in the value of the U.S. dollar, another economic downturn or an operational problem that affects third parties or us, and could materially harm our business. Even though such conditions have improved broadly and significantly over the short-term, adverse conditions in particular sectors of the financial markets could adversely impact our business over the long-term.

Even in the event the value of your investment declines, the Base Fee and, in certain circumstances, the Net Investment Income Incentive Fee will still be payable.

The Base Fee is calculated as a percentage of our gross assets at a specific time. Accordingly, the Base Fee will be payable regardless of whether the value of our gross assets and/or your investment have decreased. Moreover, a portion of the incentive fee is payable if our net investment income for a calendar quarter exceeds a designated hurdle rate. Although this portion of the incentive fee (the Net Investment Income Incentive Fee) is subject to the Total Return Requirement, the Net Investment Income Incentive Fee may still be payable during a quarter with net capital losses. Accordingly, this portion of our adviser’s incentive fee may also be payable notwithstanding a decline in net asset value that quarter. In addition, in the event we recognize PIK loan interest or PIK preferred dividends in excess of our available capital, we may be required to liquidate assets in order to pay a portion of the incentive fee. Oxford Square Management, however, is not required to reimburse us for the portion of any fees attributable to accrued deferred loan interest or dividends in the event of a default or other non-payment by the obligor.

Price declines and illiquidity in the corporate debt markets have adversely affected, and may continue to adversely affect, the fair value of our portfolio investments, reducing our net asset value through increased net unrealized depreciation. Any unrealized depreciation that we experience on our loan portfolio may be an indication of future realized losses, which could reduce our income available for distribution and could adversely affect our ability to service our outstanding borrowings.

As a BDC, we are required to carry our investments at fair value as determined in good faith by or under the direction of our Board of Directors. Decreases in fair values of our investments are recorded as unrealized depreciation. Any unrealized depreciation in our loan portfolio could be an indication of a portfolio company’s inability to meet its repayment obligations to us with respect to the affected loans. This could result in realized losses in the future and ultimately in reductions of our income available for distribution in future periods and could materially adversely affect our ability to service our outstanding borrowings. Depending on market conditions, we may incur substantial losses in future periods, which could have a material adverse impact on our business, financial condition and results of operations.

PIK interest/dividend payments we receive will increase our assets under management and, as a result, will increase the amount of Base Fee and incentive fees payable by us to our investment adviser.

Certain of our debt and preferred stock investments contain provisions providing for the payment of contractual PIK interest or dividends. Because PIK interest/dividends results in an increase in the size of the loan/preferred stock balance of the underlying investment, the receipt by us of PIK interest/dividend will have the effect of increasing our assets under management. As a result, because the Base Fee that we pay to our investment adviser is based on the value of our gross assets, the receipt by us of PIK interest/dividend will result in an increase in the amount of the Base Fee payable by us. In addition, any such increase in an investment balance due to the receipt of PIK interest/dividend will cause such investment to accrue interest/dividend on the higher investment balance, which will result in an increase in our pre-incentive fee net investment income and, as a result, a potential increase in incentive fees that are payable by us to our investment adviser.

Our investment adviser is not obligated to reimburse us for any part of the incentive fee it receives that is based on accrued income that we never receive.

Part of the incentive fee payable by us to our investment adviser that relates to our net investment income is computed and paid on income that may include interest that has been accrued but not yet received in cash, such as market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero-coupon securities. If a portfolio company defaults on a loan that is structured to provide accrued interest, it is possible that accrued interest previously used in the calculation of the incentive fee will become uncollectible. Our investment adviser will not be under any obligation to reimburse us for any part of the incentive fee it received that was based on accrued income that we never receive as a result of a default by an entity on the obligation that resulted in the accrual of such income.

Our investment adviser can resign on 60 days’ notice, and we may not be able to find a suitable replacement within that time, resulting in a disruption in our operations that could adversely affect our financial condition, business and results of operations.

Our investment adviser has the right, under our investment advisory agreement, to resign at any time upon 60 days’ written notice, whether we have found a replacement or not. If our investment adviser resigns, we may not be able to find a new investment adviser or hire internal management with similar expertise and ability to provide the same or equivalent services on acceptable terms within 60 days, or at all. If we are unable to do so quickly, our operations are likely to experience a disruption, our financial condition, business and results of operations as well as our ability to pay distributions are likely to be adversely affected and the market price of our shares may decline. In addition, the coordination of our internal management and investment activities is likely to suffer if we are unable to identify and reach an agreement with a single institution or group of executives having the expertise possessed by our investment adviser and its affiliates. Even if we are able to retain comparable management, whether internal or external, the integration of such management and their lack of familiarity with our investment objective may result in additional costs and time delays that may adversely affect our financial condition, business and results of operations.

We are permitted to borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us.

Borrowings, also known as leverage, magnify the potential for gain or loss on amounts invested and, therefore, increase the risks associated with investing in our securities. We may borrow from and issue senior debt securities to banks, insurance companies, and other lenders. Lenders of these senior securities have fixed dollar claims on our assets that are superior to the claims of our common stockholders. If the value of our assets increases, then leveraging would cause the net asset value attributable to our common stock to increase more sharply than it would have had we not leveraged. Conversely, if the value of our assets decreases, leveraging would cause net asset value to decline more sharply than it otherwise would have had we not leveraged. Similarly, any increase in our income in excess of interest payable on the borrowed funds would cause our net income to increase more than it would without the leverage, while any decrease in our income would cause net income to decline more sharply than it would have had we not borrowed. Such a decline could negatively affect our ability to make common stock distribution payments. Leverage is generally considered a speculative investment technique. Our ability to service any debt that we incur will depend largely on our financial performance and will be subject to prevailing economic conditions and competitive pressures. Moreover, as the Base Fee (and a portion of the incentive fee) payable to Oxford Square Management will be payable on our gross assets, including those assets acquired through the use of leverage, Oxford Square Management may have a financial incentive to incur leverage which may not be consistent with our stockholders’ interests. In addition, our common stockholders will bear the burden of any increase in our expenses as a result of leverage, including any increase in the Base Fee (and incentive fee) payable to Oxford Square Management.

Our asset coverage requirement under the 1940 Act for senior securities is 150%, effective as of April 6, 2019. If we incur additional leverage, general interest rate fluctuations may have a more significant negative impact on our investments and investment opportunities than they would have absent such additional incurrence, and, accordingly, may have a material adverse effect on our investment objectives and rate of return on investment capital.

On ~~April~~May 320, ~~2019~~2021, we completed an underwritten public offering of approximately $4480.85 million in aggregate principal amount of 65.2550% Unsecured Notes. The 65.2550% Unsecured Notes will mature on ~~April~~July 3031, ~~2026~~2028, and may be redeemed in whole or in part at any time or from time to time at our option on or after ~~April~~May 3031, ~~2022~~2024. The 65.2550% Unsecured Notes bear interest at a rate of 65.2550% per year payable quarterly on January 31, April 30, July 31, and October 31, of each year. The 65.2550% Unsecured Notes are our general unsecured obligations, rank equally in right of payment with our future senior unsecured debt, and rank senior in right of payment to any potential subordinated debt, should any be issued in the future.

On ~~May~~August 207, ~~2021~~2025, ~~the~~we ~~Company~~ completed an underwritten public offering of approximately $8074.58 million in aggregate principal amount of 57.5075% Unsecured Notes. The 57.5075% Unsecured Notes will mature on July 31, ~~2028~~2030, and may be redeemed in whole or in part at any time or from time to time at ~~the~~our ~~Company’s~~ option on or after ~~May~~July 31, ~~2024~~2027. The 57.5075% Unsecured Notes bear interest at a rate of 57.5075% per year payable quarterly on January 31, April 30, July 31, and October 31, of each year. The 5.50% Unsecured Notes are our general unsecured obligations, rank equally in right of payment with our future senior unsecured debt, and rank senior in right of payment to any potential subordinated debt, should any be issued in the future.

October 31, of each year. The 7.75% Unsecured Notes are our general unsecured obligations, rank equally in right of payment with our future senior unsecured debt, and rank senior in right of payment to any potential subordinated debt, should any be issued in the future.

Illustration. The following table illustrates the effect of leverage on returns from an investment in our common stock assuming various annual returns on the portfolio, net of expenses. The calculations in the table below are hypothetical and actual returns may be higher or lower than those appearing in the table below.

	Assumed total return on our portfolio (net of expenses)
	(10.0	)%	(5.0	)%	0.0	%	5.0	%	10.0	%
Corresponding return to stockholder(1)	(2328.58	)%	(1418.2	)%	(47.97	)%	42.49	%	13.84	%

____________

(1) Assumes $~~299~~306.7 million in total assets and $~~125~~155.3 million in total debt principal outstanding, which reflects our total assets and total debt outstanding as of December 31, ~~2024~~2025, and a cost of funds of approximately 67.2620%.

Our portfolio must have an annual return of at least 23.6264% in order to cover the annual interest payments on our current borrowings.

If we are unable to comply with the covenants or restrictions in our borrowings, our business could be materially adversely affected.

Our borrowings may include covenants, among others, that, subject to exceptions, restrict our ability to pay distributions, create liens on assets, make investments, make acquisitions and engage in mergers or consolidations. Complying with these restrictions may prevent us from taking actions that we believe would help us grow our business or are otherwise consistent with our investment objective. These restrictions could also limit our ability to plan for or react to market conditions or meet extraordinary capital needs or otherwise restrict corporate activities. In addition, certain covenants or restrictions could limit our ability to make distributions to our stockholders in certain circumstances, which could result in us failing to qualify for tax treatment as a RIC and thus becoming subject to U.S. federal income tax at corporate rates (and any applicable state and local taxes).

The breach of any of the covenants or restrictions, unless cured within the applicable grace period, would result in a default under our borrowings that would permit the lender thereunder to declare all amounts outstanding to be due and payable. In such an event, we may not have sufficient assets to repay such indebtedness. As a result, any default could have serious consequences to our financial condition. An event of default or an acceleration under any future borrowings also cause a cross-default or cross-acceleration of another debt instrument or contractual obligation, which would adversely impact our liquidity.

The terms of our future borrowings may contractually limit our ability to incur additional indebtedness.

We will need additional capital to fund new investments and grow our portfolio of investments. We intend to access the capital markets periodically to issue debt or equity securities or borrow from financial institutions in order to obtain such additional capital. We believe that having the flexibility to incur additional leverage could augment the returns to our stockholders and would be in the best interests of our stockholders. Contractual leverage limitations under our future borrowings may limit our ability to incur additional indebtedness. An inability on our part to access additional leverage could limit our ability to take advantage of the benefits described above related to our ability to incur additional leverage and could decrease our earnings, if any, which would have an adverse effect on our results of operations and the value of our shares of common stock.

We may need to raise additional capital to grow because we must distribute most of our income.

We may need additional capital to fund growth in our investments. We expect to issue equity securities and expect to borrow from financial institutions in the future. A reduction in the availability of new capital could limit our ability to grow. We must distribute at least 90% of our investment company taxable income to our stockholders to maintain our tax treatment as a RIC. As a result, any such cash earnings may not be available to fund investment originations. We expect to borrow from financial institutions and issue additional debt and equity securities. If we fail to obtain funds from such sources or from other sources to fund our investments, it could limit our ability to grow, which may have an adverse effect on the value of our securities. In addition, as a BDC, our ability to borrow or issue preferred stock may be restricted if our total assets are less than 150% of our total borrowings and preferred stock.

Regulations governing our operation as a BDC affect our ability to, and the way in which we raise additional capital, which may expose us to risks, including the typical risks associated with leverage.

Our ability to grow our business requires a substantial amount of capital, which we may acquire from the following sources:

Senior Securities and Other Indebtedness

We may issue debt securities or preferred stock and/or borrow money from banks or other financial institutions, which we refer to collectively as “senior securities,” up to the maximum amount permitted by the 1940 Act. Under the provisions of the 1940 Act, we are permitted, as a BDC, to issue senior securities in amounts such that our asset coverage ratio, as defined in the 1940 Act, equals at least 150% immediately after each issuance of senior securities.

This requirement of sustaining a 150% asset coverage ratio limits the amount that we may borrow. Because we will continue to need capital to grow our loan and investment portfolio, this limitation may prevent us from incurring debt. Further additional debt financing may not be available on favorable terms, if at all, or may be restricted by the terms of our debt facilities. If we are unable to incur additional debt, we may be required to raise additional equity at a time when it may be disadvantageous to do so.

As a result of the issuance of senior securities, including preferred stock and debt securities, we are exposed to typical risks associated with leverage, including an increased risk of loss and an increase in expenses, which are ultimately borne by our common stockholders. Because we may incur leverage to make investments, a decrease in the value of our investments would have a greater negative impact on the value of our common stock. When we issue debt securities or preferred stock, it is likely that such securities will be governed by an indenture or other instrument containing covenants restricting our operating flexibility. In addition, such securities may be rated by rating agencies, and in obtaining a rating for such securities, we may be required to abide by operating and investment guidelines that could further restrict our operating flexibility. Refer to “— We are permitted to borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us” for a description of our outstanding senior securities.

Our ability to pay distributions or issue additional senior securities may be restricted if our asset coverage ratio is not at least 150%. If the value of our assets declines, we may be unable to satisfy this test. If that happens, we may be required to sell a portion of our investments and, depending on the nature of our leverage, repay a portion of our indebtedness at a time when such sales may be disadvantageous. Furthermore, any amounts that we use to service our indebtedness would not be available for distributions to our common stockholders.

Common Stock

We are not generally able 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 of our common stock if our Board of Directors determines that such sale is in the best interests of the Company and its stockholders, and our stockholders approve such sale.

In certain limited circumstances, we may also issue shares at a price below net asset value in connection with a transferable rights offering so long as: (1) the offer does not discriminate among stockholders; (2) we use our best efforts to ensure an adequate trading market exists for the rights; and (3) the ratio of the offering does not exceed one new share for each three rights held. If we raise additional funds by issuing more common stock or senior securities convertible into, or exchangeable for, our common stock, the percentage ownership of our stockholders at that time would decrease and they may experience dilution. Moreover, we can offer no assurance that we will be able to issue and sell additional equity securities in the future, on favorable terms or at all.

Our Board of Directors is authorized to reclassify any unissued shares of common stock into one or more classes of preferred stock, which could convey special rights and privileges to its owners.

Our charter permits our Board of Directors to reclassify any authorized but unissued shares of stock into one or more classes of preferred stock. We are currently authorized to issue up to 100,000,000 shares of common stock, of which 6987,~~789~~510,~~527~~727 shares are issued and outstanding as of ~~February~~March 272, ~~2025~~2026. In the event our Board of Directors opts to reclassify a portion of our unissued shares of common stock into a class of preferred stock, those preferred shares

~~shares~~ would have a preference over our common stock with respect to distributions and liquidation. The cost of any such reclassification would be borne by our existing common stockholders. The class voting rights of any preferred shares we may issue could make it more difficult for us to take some actions that may, in the future, be proposed by our Board of Directors and/or the holders of our common stock, such as a merger, exchange of securities, liquidation, or alteration of the rights of a class of our securities, if these actions were perceived by the holders of preferred shares as not in their best interests. The issuance of preferred shares convertible into shares of common stock might also reduce the net income and net asset value per share of our common stock upon conversion. These effects, among others, could have an adverse effect on your investment in our common stock.

A change in interest rates may adversely affect our profitability and we may expose ourselves to risks if we engage in hedging transactions to mitigate changes in interest rates.

Currently, all of the debt investments in our investment portfolio are at variable rates. In addition, our CLO equity investments are sensitive to risks associated with changes in interest rates. Although we have not done so in the past, we may in the future choose to hedge against interest rate fluctuations by using standard hedging instruments such as futures, forward contracts, options and interest rate swaps, caps, collars and floors to seek to hedge against fluctuations in the relative values of our portfolio positions from changes in market interest rates. Hedging against a decline in the values of our portfolio positions does not eliminate the possibility of fluctuations in the values of such positions or prevent losses if the values of such positions decline. However, such hedging can establish other positions designed to gain from those same developments, thereby offsetting the decline in the value of such portfolio positions. Such hedging transactions may also limit the opportunity for gain if the values of the underlying portfolio positions should increase. It may not be possible to hedge against an interest rate fluctuation that is so generally anticipated that we are not able to enter into a hedging transaction at an acceptable price.

The success of our hedging transactions will depend on our ability to correctly predict movements in interest rates. Therefore, while we may enter into such transactions to seek to reduce interest rate risks, unanticipated changes in interest rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions being hedged may vary. Moreover, for a variety of reasons, we may not seek to establish a perfect correlation between such hedging instruments and the portfolio holdings being hedged. Any such imperfect correlation may prevent us from achieving the intended hedge and expose us to risk of loss. To the extent we engage in hedging transactions, we also face the risk that counterparties to the derivative instruments we hold may default, which may expose us to unexpected losses from positions where we believed that our risk had been appropriately hedged. These activities may limit our ability to participate in the benefits of lower interest rates with respect to the hedged portfolio. Adverse developments resulting from changes in interest rates or hedging transactions could have a material adverse effect on our business, financial condition and results of operations. Also, we have limited experience in entering into hedging transactions, and we will initially have to purchase or develop such expertise if we choose to employ hedging strategies in the future.

Our ability to enter into transactions involving derivatives and financial commitment transactions may be limited.

Through comprehensive new global regulatory regimes impacting derivatives (e.g., the Dodd-Frank Act, European Market Infrastructure Regulation (“EMIR”), Markets in Financial Investments Regulation (“MIFIR”)/Markets in Financial Instruments Directive (“MIFID II”)), certain over-the-counter derivatives transactions in which we may engage are either now or will soon be subject to various requirements, such as mandatory central clearing of transactions which include additional margin requirements and in certain cases trading on electronic platforms, pre-and post-trade transparency reporting requirements and mandatory bi-lateral exchange of initial margin for non-cleared swaps. The Dodd-Frank Act also created new categories of regulated market participants, such as “swap dealers,” “security-based swap dealers,” “major swap participants,” and “major security-based swap participants” who are subject to significant new capital, registration, recordkeeping, reporting, disclosure, business conduct and other regulatory requirements. The European Unions (“EU”) and some other jurisdictions are implementing similar requirements. Because these requirements are new and evolving (and some of the rules are not yet final), their ultimate impact remains unclear. However, even if the Company itself is not located in a particular jurisdiction or directly subject to the jurisdiction’s derivatives regulations, we may still be impacted to the extent we enter into a derivatives transaction with a regulated market participant or counterparty that is organized in that jurisdiction or otherwise subject to that jurisdiction’s derivatives regulations.

Based on information available as of the date of this annual report on Form 10-K, the effect of such requirements will be likely to (directly or indirectly) increase our overall costs of entering into derivatives transactions. In particular, new margin requirements, position limits and significantly higher capital charges resulting from new global capital regulations, even if not directly applicable to us, may cause an increase in the pricing of derivatives transactions entered into by market participants to whom such requirements apply or affect our overall ability to enter into derivatives transactions with certain counterparties. Such new global capital regulations and the need to satisfy the various requirements by counterparties are resulting in increased funding costs, increased overall transaction costs, and significantly affecting balance sheets, thereby resulting in changes to financing terms and potentially impacting our ability to obtain financing. Administrative costs, due to new requirements such as registration, recordkeeping, reporting, and compliance, even if not directly applicable to us, may also be reflected in our derivatives transactions. New requirements to trade certain derivatives transactions on electronic trading platforms and trade reporting requirements may lead to (among other things) fragmentation of the markets, higher transaction costs or reduced availability of derivatives, and/or a reduced ability to hedge, all of which could adversely affect the performance of certain of our trading strategies. In addition, changes to derivatives regulations may impact the tax and/or accounting treatment of certain derivatives, which could adversely impact us.

In November 2020, the SEC adopted new rules regarding the ability of a BDC (or a registered investment company) to use derivatives and other transactions that create future payment or delivery obligations. BDCs that use derivatives would be subject to a value-at-risk leverage limit, certain other derivatives risk management program and testing requirements and requirements related to board reporting. These new requirements would apply unless the BDC qualified as a “limited derivatives user,” as defined in the SEC’s adopted rules. The Company intends to operate under the limited derivatives user exemption of Rule 18f-4 and has adopted written policies and procedures reasonably designed to manage the Company’s derivatives risk pursuant to Rule 18f-4. A BDC that enters into reverse repurchase agreements or similar financing transactions would need to aggregate the amount of indebtedness associated with the reverse repurchase agreements or similar financing transactions could either (i) comply with the asset coverage requirements of the Section 18 of the 1940 Act when engaging in reverse repurchase agreements or (ii) choose to treat such agreements as derivative transactions under the adopted rule. Under the adopted rule, a BDC may enter into an unfunded commitment agreement that is not a derivatives transaction, such as an agreement to provide financing to a portfolio company, if the BDC has a reasonable belief, at the time it enters into such an agreement, that it will have sufficient cash and cash equivalents to meet its obligations with respect to all of its unfunded commitment agreements, in each case as it becomes due. If the BDC cannot meet this test, it is required to treat unfunded commitments as a derivatives transaction subject to the requirements of the rule. Collectively, these requirements may limit our ability to use derivatives and/or enter into certain other financial contracts.

There are significant potential conflicts of interest between the Company and its management team.

In the course of our investing activities, we pay management and incentive fees to Oxford Square Management, and reimburse Oxford Funds for certain expenses it incurs on our behalf. As a result, investors in our common stock invest on a “gross” basis and receive distributions on a “net” basis after expenses, resulting in, among other things, a lower rate of return than one might achieve through direct investments. As a result of this arrangement, there may be times when the management team of Oxford Square Management has interests that differ from those of our stockholders, giving rise to a conflict.

Oxford Square Management receives a quarterly incentive fee based, in part, on our “Pre-Incentive Fee Net Investment Income,” if any, for the immediately preceding calendar quarter. This incentive fee is subject to a quarterly hurdle rate before providing an incentive fee return to Oxford Square Management. To the extent we or Oxford Square Management are able to exert influence over our portfolio companies, the quarterly pre-incentive fee may provide Oxford Square Management with an incentive to induce our portfolio companies to accelerate or defer interest or other obligations owed to us from one calendar quarter to another.

In addition, our executive officers and directors, and the executive officers of Oxford Square Management, and its managing member, Oxford Funds, serve or may serve as officers and directors of entities that operate in a line of business similar to our own. Accordingly, they may have obligations to investors in those entities, the fulfillment of which might not be in the best interests of us or our stockholders. Charles M. Royce, a member of our Board of Directors, holds a minority, non-controlling interest in our investment adviser.

Messrs. Cohen and Rosenthal currently serve as Chief Executive Officer and President, respectively, of Oxford Lane Capital Corp., a non-diversified closed-end management investment company that currently invests primarily in CLO debt and equity tranches, and its investment adviser, Oxford Lane Management. Messrs. Cohen and Rosenthal also currently serve as Chief Executive Officer and President, respectively, of Oxford Park Income Fund, Inc., a non-diversified closed-end management investment company that invests primarily in equity and junior debt tranches of CLO vehicles, and its investment adviser, Oxford Park Management. Messrs. Cohen and Rosenthal also currently serve as Chief Executive Officer and President, respectively, of Oxford Gate Management, the investment adviser to the Oxford Gate Funds and Oxford Bridge II, LLC. Oxford Bridge II, LLC and Oxford Gate Funds are private funds that invest principally in CLO debt and equity. Oxford Funds is the managing member of Oxford Park Management, Oxford Lane Management and Oxford Gate Management. As a result, certain conflicts of interest may arise with respect to the management of our portfolio by Messrs. Cohen and Rosenthal, on the one hand, and the obligations of Messrs. Cohen and Rosenthal to manage the portfolios of Oxford Lane Capital Corp., Oxford Park Income Fund, Inc., Oxford Bridge II, LLC and the Oxford Gate Funds, respectively, on the other hand. In addition, Bruce L. Rubin, our Chief Financial Officer, Corporate Secretary and Treasurer, currently serves in similar capacities for Oxford Lane Capital Corp. and Oxford Park Income Fund, Inc. Mr. Rubin also currently serves as the Chief Financial Officer and Secretary of Oxford Lane Management, Oxford Square Management, Oxford Gate Management, LLC, Oxford Park Management and Oxford Funds. Further, Mr. Gerald Cummins, our Chief Compliance Officer, currently serves in similar capacities for Oxford Lane Management, Oxford Lane Capital Corp., Oxford Square Management, Oxford Gate Management, Oxford Park Income Fund, Inc. and Oxford Park Management. Because of these possible conflicts of interest, these individuals may direct potential business and investment opportunities to other entities rather than to us or such individuals may undertake or otherwise engage in activities or conduct on behalf of such other entities that is not in, or which may be adverse to, our best interests.

Oxford Square Management, Oxford Lane Management, Oxford Gate Management, and Oxford Park Management are subject to a written policy with respect to the allocation of investment opportunities among the Company, Oxford Lane Capital Corp., Oxford Park Income Fund, Inc., Oxford Bridge II, LLC and the Oxford Gate Funds. Where investments are suitable for more than one entity, the allocation policy generally provides that, depending on size and subject to current and anticipated cash availability, the absolute size of the investment as well as its relative size compared to the total assets of each entity, current and anticipated weighted average costs of capital, and whether the proposed investment is an add-on investment to an existing investment, among other factors, an investment amount will be determined by the adviser to each entity. If the investment opportunity is sufficient for each entity to receive its investment amount, then each entity receives the investment amount; otherwise, the investment amount is reduced pro rata.

On ~~October 13~~January 6, ~~2016~~2026, we ~~filed~~received an updated form of co-investment exemptive ~~application~~relief ~~with~~from the SEC to ~~permit~~allow uscertain tomanaged ~~co-invest~~funds ~~with~~and ~~funds~~investment orvehicles, ~~entities~~each ~~managed~~of bywhose investment adviser is Oxford Square Management or ~~its~~an ~~affiliates~~investment inadviser ~~certain~~controlling, controlled by or under common control with Oxford Square Management, to participate in negotiated co-investment transactions where ~~co-investing~~doing ~~would~~so ~~otherwise~~is beconsistent ~~prohibited~~with ~~under~~regulatory ~~the~~requirements ~~1940~~and ~~Act.~~other Onpertinent ~~June 14~~factors, ~~2017,~~and pursuant to the ~~SEC~~conditions ~~issued~~of anthe ~~order~~exemptive ~~permitting~~relief (the ~~Company~~“Co-Investment ~~and~~Order”). ~~certain~~The ofCo-Investment ~~its~~Order, ~~affiliates~~which supersedes the co-investment order issued to ~~complete~~us ~~negotiated~~on June 14, 2017, is a new form of co-investment ~~transactions~~exemptive inrelief ~~portfolio~~that ~~companies,~~adopts ~~subject~~a tomore ~~certain~~flexible ~~conditions,~~requirement orthat ~~the~~allocations be “~~Order.”~~fair ~~Subject~~and equitable” to ~~satisfaction~~us ofand ~~certain~~that ~~conditions~~Oxford toSquare ~~the~~Management ~~Order,~~considers the ~~Company~~interests ~~and certain~~ of ~~its~~us ~~affiliates~~and ~~are~~other ~~now~~affiliated ~~permitted,~~1940 ~~together~~Act-regulated ~~with~~funds ~~any~~that ~~future~~rely ~~BDCs,~~on ~~registered~~the ~~closed~~Co-~~end~~Investment ~~funds~~Order ~~and~~in ~~certain~~allocations ~~private~~and ~~funds,~~which ~~each~~minimizes ofcertain ~~whose~~board ~~investment~~approval ~~adviser~~requirements isas ~~Oxford~~compared ~~Square’s~~to ~~investment~~the ~~adviser~~prior orform anof co-investment ~~adviser~~exemptive ~~controlling,~~relief. ~~controlled~~Among byother things, or under ~~common~~the ~~control~~Co-Investment ~~with~~Order, ~~Oxford~~the ~~Square~~terms, ~~Management~~conditions, price, class of securities to ~~co-invest~~be purchased in ~~negotiated~~respect of a particular investment, ~~opportunities~~the ~~where~~date ~~doing~~on sowhich ~~would~~such ~~otherwise~~investment is to be ~~prohibited~~made ~~under~~and ~~the~~any ~~1940~~registration ~~Act~~rights applicable thereto, ~~providing~~must ~~the~~be ~~Company’s~~generally ~~stockholders~~the ~~with~~same ~~access~~for tous aand ~~broader~~each ~~array~~other ofparticipating ~~investment~~affiliated ~~opportunities~~entity. ~~Pursuant~~The torequirements of the Co-Investment Order, we(including ~~are~~any ~~permitted~~requirements tofor ~~co-invest~~board inapproval ~~such~~thereunder), ~~investment~~as ~~opportunities~~well ~~with~~as ~~our~~other ~~affiliates~~regulatory ifrequirements aassociated ~~“required~~with ~~majority”~~us ~~(as~~and ~~defined~~other inaffiliated ~~Section 57(o) of the~~ 1940 Act)-regulated offunds ~~our~~that ~~independent~~rely ~~directors~~on ~~make~~the ~~certain~~Co-Investment ~~conclusions~~Order, inpotentially ~~connection~~will ~~with~~impact athe ~~co-~~investment ~~transaction,~~allocations ~~including,~~among ~~but~~participating ~~not~~entities ~~limited to~~(including, ~~that~~for ~~(1)~~ the ~~terms~~avoidance of ~~the~~doubt, ~~potential~~us) ~~co-investment~~or ~~transaction,~~otherwise ~~including~~impact ~~the~~allocation ~~consideration~~results. toAny bechanges ~~paid,~~to ~~are~~the ~~reasonable~~Co-Investment ~~and~~Order ~~fair~~or tothe usrules and ~~our~~other ~~stockholders~~guidance ~~and~~promulgated doby ~~not~~the ~~involve~~SEC ~~overreaching~~and inits ~~respect~~staff ofunder usthe or1940 ~~our~~Act ~~stockholders~~could onimpact ~~the~~allocations ~~part~~made ofavailable ~~any~~to ~~person~~us ~~concerned,~~ and ~~(2) the~~thereby ~~potential~~affect ~~co-investment~~(and ~~transaction~~potentially isdecrease) ~~consistent~~the ~~with~~allocation ~~the~~made ~~interests~~to ofus ~~our~~or ~~stockholders~~otherwise ~~and~~impact isthe ~~consistent~~process ~~with~~for ~~our~~allocations ~~then-current~~in ~~investment~~transactions ~~objective~~in ~~and~~which ~~strategies~~we participate.

us, companies controlled by us and our employees and directors. We will not enter into any agreements unless and until we are satisfied that doing so will not raise concerns under the 1940 Act or, if such concerns exist, we have taken appropriate actions to seek board review and approval or exemptive relief for such transaction. Our Board of Directors reviews these procedures on an annual basis.

We have also adopted a Code of Business Conduct and Ethics which applies to our senior officers, including our Chief Executive Officer and Chief Financial Officer, as well as all of our officers, directors and employees. Our Code of Business Conduct and Ethics requires that all employees and directors avoid any conflict, or the appearance of a conflict, between an individual’s personal interests and our interests. Pursuant to our Code of Business Conduct and Ethics, each employee and director must disclose any conflicts of interest, or actions or relationships that might give rise to a conflict. Our Audit Committee is charged with approving any waivers under our Code of Business Conduct and Ethics. As required by the NASDAQ Global Select Market corporate governance listing standards, the Audit Committee of our Board of Directors is also required to review and approve any transactions with related parties (as such term is defined in Item 404 of Regulation S-K).

Changes in laws or regulations governing our operations may adversely affect our business.

Changes in the laws or regulations, or the interpretations of the laws and regulations, which govern BDCs, RICs or non-depository commercial lenders could significantly affect our operations and our cost of doing business. We are subject to federal, state and local laws and regulations and are subject to judicial and administrative decisions that affect our operations, including our loan originations, maximum interest rates, fees and other charges, disclosures to portfolio companies, the terms of secured transactions, collection and foreclosure procedures, and other trade practices. If these laws, regulations or decisions change, or if we expand our business into jurisdictions that have adopted more stringent requirements than those in which we currently conduct business, then we may have to incur significant expenses in order to comply or we may have to restrict our operations. In addition, if we do not comply with applicable laws, regulations and decisions, then we may lose licenses needed for the conduct of our business and be subject to civil fines and criminal penalties, any of which could have a material adverse effect upon our business results of operations or financial condition.

If we do not invest a sufficient portion of our assets in qualifying assets, we could fail to qualify as a business development company or be precluded from investing according to our current business strategy.

As a BDC, we may not acquire any assets other than “qualifying assets” unless, at the time of such acquisition, at least 70% of our total assets are qualifying assets.

We believe that most of our portfolio investments will constitute qualifying assets. However, we may be precluded from investing in what we believe are attractive investments if such investments are not qualifying assets for purposes of the 1940 Act. If we do not invest a sufficient portion of our assets in qualifying assets, we could lose our status as a BDC, which would have a material adverse effect on our business, financial condition and results of operations. Similarly, these rules could prevent us from making follow-on investments in existing portfolio companies (which could result in the dilution of our position) or could require us to dispose of investments at inappropriate times in order to comply with the 1940 Act. If we need to dispose of such investments quickly, it would be difficult to dispose of such investments on favorable terms. For example, we may have difficulty in finding a buyer and, even if we do find a buyer, we may have to sell the investments at a substantial loss.

Provisions of the Maryland General Corporation Law and of our charter and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock.

The Maryland General Corporation Law and our charter and bylaws contain provisions that may discourage, delay or make more difficult a change in control of the Company or the removal of our directors. We are subject to the Maryland Business Combination Act, subject to any applicable requirements of the 1940 Act. Our Board of Directors has adopted a resolution exempting from the Business Combination Act any business combination between us and any other person, subject to prior approval of such business combination by our board, including approval by a majority of our disinterested directors. If the resolution exempting business combinations is repealed or our board does not approve a business combination, the Business Combination Act may discourage third parties from trying to acquire control of us and increases the difficulty of consummating such an offer. Our bylaws exempt from the Maryland Control Share Acquisition Act acquisitions of our stock by any person. If we amend our bylaws to repeal

the exemption from the Control Share Acquisition Act (in accordance with any applicable law, rules or regulations), the Control Share Acquisition Act also may make it more difficult for a third party to obtain control of us and increases the difficulty of consummating such a transaction.

We have also adopted measures that may make it difficult for a third party to obtain control of us, including provisions of our charter classifying our board of directors in three classes serving staggered three-year terms, and authorizing our board of directors to classify or reclassify shares of our stock in one or more classes or series, to cause the issuance of additional shares of our stock and to amend our charter without stockholder approval to increase or decrease the number of shares of stock that we have authority to issue. These provisions, as well as other provisions of our charter and bylaws, may delay, defer or prevent a transaction or a change in control that might otherwise be in the best interests of our stockholders.

The foregoing provisions are expected to discourage certain coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to negotiate first with our Board of Directors. However, these provisions may deprive a stockholder of the opportunity to sell such stockholder’s shares at a premium to a potential acquirer. We believe that the benefits of these provisions outweigh the potential disadvantages of discouraging any such acquisition proposals because, among other things, the negotiation of such proposals may improve their terms. Our Board of Directors has considered both the positive and negative effects of the foregoing provisions and determined that they are in the best interest of our stockholders.

Our Board of Directors may change our investment objective, operating policies and strategies without prior notice or stockholder approval.

Our Board of Directors has the authority to modify or waive certain of our operating policies and strategies without prior notice (except as required by the 1940 Act) and without stockholder approval. However, absent stockholder approval, we may not change the nature of our business so as to cease to be, or withdraw our election as a BDC. We cannot predict the effect any changes to our current operating policies and strategies would have on our business, operating results and value of our stock. Nevertheless, the effects may adversely affect our business and impact our ability to make distributions.

Our business and operation could be negatively affected if we become subject to any securities litigation or stockholder activism, which could cause us to incur significant expense, hinder execution of our investment strategy and impact our stock price.

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against such company. Stockholder activism, which could take many forms or arise in a variety of situations, has been increasing in the BDC space. While we are currently not subject to any securities litigation, due to the volatility of our stock price and for a variety of other reasons, we may in the future become the target of additional securities litigation and the subject of additional stockholder activism. If at any time our current Investment Advisory Agreement is terminated we may not be able to find a new investment adviser or hire internal management with similar expertise and ability to provide the same or equivalent services on acceptable terms. If we are unable to do so quickly, our operations are likely to experience a disruption, our financial condition, business and results of operations as well as our ability to pay distributions are likely to be adversely affected and the market price of our shares may decline.

Securities litigation and stockholder activism, including potential proxy contests, could result in substantial costs and divert management’s and our Board of Directors’ attention and resources from our business. Additionally, such securities litigation and stockholder activism could give rise to perceived uncertainties as to our future, adversely affect our relationships with service providers and make it more difficult to attract and retain qualified personnel. Also, we may be required to incur significant legal fees and other expenses related to any securities litigation and activist stockholder matters. Further, our stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and stockholder activism.

RISKS RELATED TO U.S. FEDERAL INCOME TAX

We will be subject to U.S. federal income tax at corporate rates, if we are unable to qualify for tax treatment as a RIC for U.S. federal income tax purposes.

To remain entitled to the tax benefits accorded to RICs under the Code, we must meet certain income source, asset diversification and Annual Distribution Requirements. In order to qualify as a RIC, we must derive each taxable year at least 90% of our gross income from dividends, interest, payments with respect to certain securities loans, gains from the sale of stock or other securities, or other income derived with respect to our business of investing in such stock or securities. The Annual Distribution Requirement for a RIC is satisfied if we distribute at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, to our stockholders on an annual basis. Because we use debt financing, we are subject to certain asset coverage ratio requirements under the 1940 Act and financial covenants under loan and credit agreements that could, under certain circumstances, restrict us from making distributions necessary to satisfy the Annual Distribution Requirement. If we are unable to obtain cash from other sources, we may fail to qualify for special tax treatment as a RIC and, thus, may be subject to U.S. federal income tax at corporate rates on all of our income.

To qualify as a RIC, we must also meet certain asset diversification requirements at the end of each quarter of our taxable year. Failure to meet these tests may result in our having to dispose of certain investments quickly in order to prevent the loss of RIC treatment. Because most of our investments will be in private companies, any such dispositions could be made at disadvantageous prices and may result in substantial losses. If we fail to qualify for tax treatment as a RIC for any reason and remain or become subject to U.S. federal income tax at corporate rates, the resulting corporate taxes could substantially reduce our net assets, the amount of income available for distribution and the amount of our distributions. Such a failure would have a material adverse effect on us and our stockholders.

Our investments in CLOs may be subject to special anti-deferral provisions that could result in us incurring tax or recognizing income prior to receiving cash distributions related to such income.

We have purchased and may in the future purchase residual or subordinated interests in CLOs that are treated for U.S. federal income tax purposes as shares in a passive foreign investment company or PFIC. If we acquire investments in a PFIC (including equity tranche investments in CLOs that are PFICs), we may be subject to U.S. federal income tax on a portion of any “excess distribution” or gain from the disposition of such shares. Additional charges, in the nature of interest, generally will be imposed on us in respect of deferred taxes arising from any such excess distribution or gain. This additional tax and interest may apply even if we make a distribution in an amount equal to any “excess distribution” or gain from the disposition of such shares as a taxable dividend by us to our stockholders. Certain elections may be available to mitigate or eliminate such tax on excess distributions, but such elections (if available) will generally require us to recognize our share of the PFICs income for each year regardless of whether we receive any distributions from such PFICs. We must nonetheless distribute such income to maintain our tax treatment as a RIC.

If we hold more than 10% of the shares in a foreign corporation that is treated as a controlled foreign corporation or CFC (including equity tranche investments in a CLO treated as CFC), we may be treated as receiving a deemed distribution (taxable as ordinary income) each year from such foreign corporation in an amount equal to our pro rata share of the corporation’s income for the tax year (including both ordinary earnings and capital gains). If we are required to include such deemed distributions from a CFC in our income, we will be required to distribute such income to maintain our RIC tax treatment regardless of whether or not the CFC makes an actual distribution during such year.

If we are required to include amounts in income prior to receiving distributions representing such income, we may have to sell some of our investments at times and/or at prices we would not consider advantageous, raise additional debt or equity capital or forgo new investment opportunities for this purpose. If we are not able to obtain cash from other sources, we may fail to qualify for RIC tax treatment and thus become subject to U.S. federal income tax at corporate rates.

If we do not receive timely distributions from our CLO investments, we may fail to qualify as a RIC.

We are required to include in our taxable income our proportionate share of the income of certain CLO investments to the extent that such CLOs are PFICs for which we have made a qualifying electing fund, or “QEF,” election or are CFCs. To the extent that such CLOs do not distribute all of their earnings and profits on a current basis, we may fail to satisfy the 90% Income Test and thus fail to qualify as a RIC. Income inclusions from a QEF or a CFC will be “good income” for purposes of the 90% Income Test provided that they are derived in connection with our business of investing in stocks and securities or the QEF or the CFC distribute such income to us in the same taxable year to which the income is included in our income.

The CLOs in which we invest may be subject to withholding tax if they fail to comply with certain reporting requirements.

Legislation commonly referred to as the “Foreign Account Tax Compliance Act,” or “FATCA,” generally imposes a 30% withholding tax on payments of certain types of income to foreign financial institutions (“FFIs”) unless such FFIs either: (i) enter into an agreement with the U.S. Treasury to report certain required information with respect to accounts held by certain specified U.S. persons (or held by foreign entities that have certain specified U.S. persons as substantial owners) or (ii) reside in a jurisdiction that has entered into an intergovernmental agreement (“IGA”) with the United States to collect and share such information and are in compliance with the terms of such IGA and any enabling legislation or regulations. The types of income subject to the tax include U.S. source interest and dividends. While the Code would also require withholding on payments of the gross proceeds from the sale of any property that could produce U.S. source interest or dividends, the U.S. Treasury Department has indicated its intent to eliminate this requirement in subsequent proposed regulations, which state that taxpayers may rely on the proposed regulations until final regulations are issued. The information required to be reported includes the identity and taxpayer identification number of each account holder that is a specified U.S. person and transaction activity within the holder’s account. In addition, subject to certain exceptions, FATCA also imposes a 30% withholding on certain payments to certain foreign entities that are not FFIs unless such foreign entities certify that they do not have a greater than 10% owner that is a specified U.S. person or provide the withholding agent with identifying information on each greater than 10% owner that is a specified U.S. person. Most CLO vehicles in which we invest will be treated as FFIs for this purpose, and therefore will be required to comply with these reporting requirements to avoid the 30% withholding. If a CLO vehicle in which we invest fails to properly comply with these reporting requirements, it could reduce the amounts available to distribute to equity and junior debt holders in such CLO vehicle, which could materially and adversely affect our operating results and cash flows.

We may have difficulty paying our required distributions if we recognize income before or without receiving cash representing such income.

For U.S. federal income tax purposes, we will include in income certain amounts that we have not yet received in cash, such as original issue discount (“OID”), which may arise if we receive warrants in connection with the making of a loan or possibly in other circumstances, or contracted PIK interest, which represents contractual interest added to the loan balance and due at the end of the loan term. In addition, we may be required to accrue for U.S. federal income tax purposes amounts attributable to our investment in CLOs that may differ from the distributions received in respect of such investments. We also may be required to include in income certain other amounts that we will not receive in cash.

Because in certain cases we may recognize income before or without receiving cash representing such income, we may have difficulty satisfying the Annual Distribution Requirement applicable to RICs. Accordingly, we may have to sell some of our investments at times we would not consider advantageous, raise additional debt or equity capital, reduce new investments or make taxable distributions of our stock or debt securities to meet that distribution requirement. If we are not able to obtain cash from other sources, we may fail to qualify for RIC tax treatment and thus be subject to U.S. federal income tax at corporate rates.

In addition, OID income for certain portfolio investments may or may not be included as a factor in the determination of the fair value of such investments.

RISKS RELATING TO OUR INVESTMENTS

Our investment portfolio may be concentrated in a limited number of portfolio companies, which will subject us to a risk of significant loss if any of these companies defaults on its obligations under any of its debt securities that we hold or if the sectors in which we invest experience a market downturn.

A consequence of our limited number of investments is that the aggregate returns we realize may be significantly adversely affected if a small number of investments perform poorly or if we need to write down the value of any one investment. Beyond the asset diversification requirements applicable to RICs, we do not have fixed guidelines for diversification, and our investments could be concentrated in relatively few issuers. While we have historically focused on the technology sector, we are actively seeking new investment opportunities outside this sector that otherwise meet our investment criteria. As a result, a market downturn, including a downturn in the sectors in which we invest, could materially adversely affect us.

The lack of liquidity in our investments may adversely affect our business.

As stated above, our investments are generally not in publicly traded securities. Substantially all of these securities are subject to legal and other restrictions on resale or will otherwise be less liquid than publicly traded securities. For example, there is a limited secondary market for any of our investments in warehouse facilities and our investments in warehouse facilities are less liquid than our investments in CLOs. The illiquidity of our investments may make it difficult for us to sell such investments if the need arises. Also, if we are required to liquidate all or a portion of our portfolio quickly, we may realize significantly less than the value at which we have previously recorded our investments.

In addition, because we generally invest in debt securities with a term of up to seven years and generally intend to hold such investments until maturity of the debt, we do not expect realization events, if any, to occur in the near-term. We expect that our holdings of equity securities may require several years to appreciate in value, and we can offer no assurance that such appreciation will occur.

If we cannot obtain additional capital because of either regulatory or market price constraints, we could be forced to curtail or cease our new lending and investment activities, our net asset value could decrease and our level of distributions and liquidity could be affected adversely.

Our ability to secure additional financing and satisfy our financial obligations under indebtedness outstanding from time to time will depend upon our future operating performance, which is subject to the prevailing general economic and credit market conditions, including interest rate levels and the availability of credit generally, and financial, business and other factors, many of which are beyond our control. The worsening of current economic and capital market conditions could have a material adverse effect on our ability to secure financing on favorable terms, if at all.

If we are unable to obtain debt capital, then our equity investors will not benefit from the potential for increased returns on equity resulting from leverage to the extent that our investment strategy is successful and we may be limited in our ability to make new commitments or fundings to our portfolio companies.

We are exposed to risks associated with changes in interest rates.

General interest rate fluctuations may have a substantial negative impact on our investments and our investment returns and, accordingly, may have a material adverse effect on our investment objective and our net investment income.

Because we will borrow money and may issue debt securities or preferred stock to make investments, our net investment income is dependent upon the difference between the rate at which we borrow funds or pay interest or dividends on such debt securities or preferred stock and the rate at which we invest these funds. In periods of rising interest rates, our interest income will increase as the majority of our portfolio bears interest at variable rates while our cost of funds will also increase, which could result in an increase to our net investment income. Conversely, if interest rates decrease, we may earn less interest income from investments and our cost of funds will also decrease, which could result in lower net investment income. ~~From~~Additionally, ~~time~~in toperiods ~~time~~of declining interest rates, wethe ~~may~~rate ~~also~~of ~~enter~~prepayments ~~into~~has ~~certain~~historically tended to increase (as does price fluctuation) as borrowers are motivated to pay off debt

and refinance at new lower rates. During such periods, we would expect reinvestment of the prepayment proceeds by us to generally be at lower rates of return than the return on the assets that were prepaid. From time to time, we may also enter into certain hedging transactions to mitigate our exposure to changes in interest rates. However, we cannot assure you that such transactions will be successful in mitigating our exposure to interest rate risk. There can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.

Rising interest rates may also increase the cost of debt for our underlying portfolio companies, which could adversely impact their financial performance and ability to meet ongoing obligations to us. Also, an increase in interest rates available to investors could make an investment in our shares less attractive if we are not able to pay dividends at a level that provides a similar return, which could reduce the value of our shares.

Subordinated liens on collateral securing debt investments that we will make to our portfolio companies may be subject to control by senior creditors with first priority liens. If there is a default, the value of the collateral may not be sufficient to repay in full both the first priority creditors and us.

Certain debt investments that we make in portfolio companies will be secured on a second priority basis by the same collateral securing senior debt of such companies. The first priority liens on the collateral will secure the portfolio company’s obligations under any outstanding senior debt and may secure certain other future debt that may be permitted to be incurred by the portfolio company under the agreements governing the debt. The holders of obligations secured by the first priority liens on the collateral will generally control the liquidation of and be entitled to receive proceeds from any realization of the collateral to repay their obligations in full before us. In addition, the value of the collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. We can offer no assurance that the proceeds, if any, from the sale or sales of all of the collateral would be sufficient to satisfy the debt obligations secured by the second priority liens after payment in full of all obligations secured by the first priority liens on the collateral. If such proceeds are not sufficient to repay amounts outstanding under the debt obligations secured by the second priority liens, then we, to the extent not repaid from the proceeds of the sale of the collateral, will only have an unsecured claim against the portfolio company’s remaining assets, if any. Similarly, investments in “last out” pieces of tranched first lien 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 tranched loan with respect to payment of principal, interest and other amounts.

We may also make unsecured debt investments in portfolio companies, meaning that such investments will not benefit from any interest in collateral of such companies. Liens on such portfolio companies’ collateral, if any, will secure the portfolio company’s obligations under its outstanding secured debt and may secure certain future debt that is permitted to be incurred by the portfolio company under its secured debt agreements. The holders of obligations secured by such liens will generally control the liquidation of, and be entitled to receive proceeds from, any realization of such collateral to repay their obligations in full before us. In addition, the value of such collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. We can offer no assurance that the proceeds, if any, from sales of such collateral would be sufficient to satisfy our unsecured debt obligations after payment in full of all secured debt obligations. If such proceeds were not sufficient to repay the outstanding secured debt obligations, then our unsecured claims would rank equally with the unpaid portion of such secured creditors’ claims against the portfolio company’s remaining assets, if any.

The rights we may have with respect to the collateral securing the debt investments we make in our portfolio companies with senior debt outstanding, or first-out pieces of tranched first lien debt, may also be limited pursuant to the terms of one or more inter-creditor agreements that we enter into with the holders of senior debt. Under such an inter-creditor agreement, at any time that obligations that have the benefit of the first priority liens are outstanding, any of the following actions that may be taken in respect of the collateral will be at the direction of the holders of the obligations secured by the first priority liens: the ability to cause the commencement of enforcement proceedings against the collateral; the ability to control the conduct of such proceedings; the approval of amendments to collateral documents; releases of liens on the collateral; and waivers of past defaults under collateral documents. We may not have the ability to control or direct such actions, even if our rights are adversely affected.

Most of our debt investments will not fully amortize during their lifetime, which may subject us to the risk of loss of our principal in the event a portfolio company is unable to repay us prior to maturity.

~~payment,~~Most aof ~~portfolio~~our ~~company~~debt ~~typically~~investments ~~must~~will ~~raise~~not ~~additional~~fully ~~capital.~~amortize Ifduring ittheir ~~is unable to raise sufficient funds to repay us~~lifetime, ~~the debt investment may go into default,~~ which may ~~compel~~subject us to ~~foreclose~~the onrisk ~~the~~of ~~borrower’s~~loss ~~assets,~~of ~~even~~our ifprincipal in the ~~debt~~event ~~investment~~a ~~was~~portfolio ~~otherwise~~company ~~performing~~is ~~prior~~unable to ~~maturity.~~repay ~~This may prevent~~ us ~~from~~prior ~~immediately~~to ~~obtaining full recovery on the debt investment and may prevent or delay the reinvestment of the investment proceeds in other, possibly more profitable investments~~maturity.

Most of our debt investments are not structured to fully amortize during their lifetime. Accordingly, if a portfolio company has not previously pre-paid its debt investment to us, a significant portion of the principal amount due on such a debt investment may be due at maturity. In order to create liquidity to pay the final principal payment, a portfolio company typically must raise additional capital. If it is unable to raise sufficient funds to repay us, the debt investment may go into default, which may compel us to foreclose on the borrower’s assets, even if the debt investment was otherwise performing prior to maturity. This may prevent us from immediately obtaining full recovery on the debt investment and may prevent or delay the reinvestment of the investment proceeds in other, possibly more profitable investments.

Our portfolio companies may prepay loans, which may reduce our yields if capital returned cannot be invested in transactions with equal or greater expected yields.

The loans in our investment portfolio may be prepaid at any time, generally with little advance notice. Whether a loan is prepaid will depend both on the continued positive performance of the portfolio company and the existence of favorable financing market conditions that allow such company the ability to replace existing financing with less expensive capital. As market conditions change, we do not know when, and if, prepayment may be possible for each portfolio company. In some cases, the prepayment of a loan may reduce our achievable yield if the capital returned cannot be invested in transactions with equal or greater expected yields, which could have a material adverse effect on our business, financial condition and results of operations.

The application of the risk retention rules to CLOs may have broader effects on the CLO and loan markets in general, potentially resulting in fewer or less desirable investment opportunities for the Company.

The securitization industry in both European Union (“EU”) and the United Kingdom (“UK”) has also undergone a number of significant changes in the past few years. Regulation (EU) 2017/2402 relating to a European framework for simple, transparent and standardized securitization (as amended by Regulation (EU) 2021/557 and as further amended from time to time, the “EU Securitization Regulation”) applies to certain specified EU investors, and Regulation (EU) 2017/2402 relating to a European framework for simple, transparent and standardized securitization in the form in effect on 31 December 2020 (which forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (as amended, the “EUWA”)) (as amended by the Securitization (Amendment) (EU Exit) Regulations 2019 and as further amended from time to time, the “UK Securitization Regulation” and, together with the EU Securitization Regulation, the “Securitization Regulations”) applies to certain specified UK investors, in each case, who are investing in a “securitization” (as such term is defined under each Securitization Regulation).

The due diligence requirements of Article 5 of the EU Securitization Regulation (the “EU Due Diligence Requirements”) apply to each investor that is an “institutional investor” (as such term is defined in the EU Securitization Regulation), being an investor which is one of the following: (a) an insurance undertaking as defined in Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (recast) (“Solvency II”); (b) a reinsurance undertaking as defined in Solvency II; (c) subject to certain conditions and exceptions, an institution for occupational retirement provision falling within the scope of Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision (IORPs) (the “IORP Directive”), or an investment manager or an authorized entity appointed by an institution for occupational retirement provision pursuant to the IORP Directive; (d) an alternative investment fund manager (“AIFM”) as defined in Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers that manages and/or markets alternative investment funds in the EU; (e) an undertaking for the collective investment in transferable securities (“UCITS”) management company, as defined in Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (the “UCITS Directive”); (f) an internally managed UCITS, which is an investment company authorized in accordance with the UCITS Directive and which has not designated a management company authorized under the UCITS Directive for its management; or (g) a credit institution as defined in Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms (the “CRR”) for the purposes of the CRR, or an investment firm as defined in the CRR, in each case, such investor an “EU Institutional Investor”.

~~being~~No an575/2013 ~~investor which is one~~ of the ~~following:~~European ~~(a) an~~Parliament ~~insurance undertaking as defined in the Financial Services~~ and Markets Act 2000 (as amended, the “FSMA”); (b) a reinsurance undertaking as defined in the FSMA; (c) an occupational pension scheme as defined in the Pension Schemes Act 1993 that has its main administration in the UK, or a fund manager of ~~such a scheme appointed under~~ the ~~Pensions~~Council ~~Act 1995 that, in respect~~ of ~~activity~~26 ~~undertaken pursuant to that appointment, is authorized under the FSMA; (d)~~June an2013 ~~AIFM~~on ~~(as~~prudential ~~defined~~requirements infor ~~the~~credit ~~Alternative~~institutions ~~Investment~~and ~~Fund~~investment ~~Managers~~firms ~~Regulations 2013~~ (the “~~AIFM Regulations~~CRR”)) ~~which~~for ~~markets or manages AIFs (as defined in~~ the ~~AIFM~~purposes Regulations) in the UK; (e) a management company as defined in the FSMA; (f) a UCITS as defined by the FSMA, which is an authorized open ended investment company as defined in the FSMA; (g) a FCA investment firm as defined by the CRR as it forms part of ~~UK domestic law by virtue of EUWA (~~the ~~“UK~~ CRR~~”);~~, or ~~(h) a~~an ~~CRR~~ investment firm as defined in the UK CRR, in each case, such investor aan “UKEU Institutional Investor” ~~and, such investors together with EU Institutional Investors, “Institutional Investors”~~.

The due diligence requirements of Article 5 of the UK Securitization Regulation (the “UK Due Diligence Requirements” and, together with the EU Due Diligence Requirements, the “Due Diligence Requirements”) apply to each investor that is an “institutional investor” (as such term is defined in the UK Securitization Regulation), being an investor which is one of the following: (a) an insurance undertaking as defined in the Financial Services and Markets Act 2000 (as amended, the “FSMA”); (b) a reinsurance undertaking as defined in the FSMA; (c) an occupational pension scheme as defined in the Pension Schemes Act 1993 that has its main administration in the UK, or a fund manager of such a scheme appointed under the Pensions Act 1995 that, in respect of activity undertaken pursuant to that appointment, is authorized under the FSMA; (d) an AIFM (as defined in the Alternative Investment Fund Managers Regulations 2013 (the “AIFM Regulations”)) which markets or manages AIFs (as defined in the AIFM Regulations) in the UK; (e) a management company as defined in the FSMA; (f) a UCITS as defined by the FSMA, which is an authorized open ended investment company as defined in the FSMA; (g) a FCA investment firm as defined by the CRR as it forms part of UK domestic law by virtue of EUWA (the “UK CRR”); or (h) a CRR investment firm as defined in the UK CRR, in each case, such investor a “UK Institutional Investor” and, such investors together with EU Institutional Investors, “Institutional Investors”.

Among other things, the applicable Due Diligence Requirements require that prior to holding a “securitization position” (as defined in each Securitization Regulation) an Institutional Investor (other than the originator, sponsor or original lender) has verified that:

(1) the originator, sponsor or original lender will retain on an ongoing basis a material net economic interest which, in any event, shall be not less than five per cent. in the securitization, determined in accordance with Article 6 of the applicable Securitization Regulation, and has disclosed the risk retention to such Institutional Investor;

(2) (in the case of each EU Institutional Investor only) the originator, sponsor or securitization special purpose entity (“SSPE”) has, where applicable, made available the information required by Article 7 of the EU Securitization Regulation in accordance with the frequency and modalities provided for thereunder;

(3) (in the case of each UK Institutional Investor only) the originator, sponsor or SSPE:

(i) if established in the UK has, where applicable, made available the information required by Article 7 of the UK Securitization Regulation (the “UK Transparency Requirements”) in accordance with the frequency and modalities provided for thereunder; or

(ii) if established in a country other than the UK, where applicable, made available information which is substantially the same as that which it would have made available under the UK Transparency Requirements if it had been established in the UK, and has done so with such frequency and modalities as are substantially the same as those with which it would have made information available under the UK Transparency Requirements if it had been established in the UK; and

(4) in the case of each Institutional Investor, where the originator or original lender either (i) is not a credit institution or an investment firm (each as defined in the applicable Securitization Regulation) or (ii) is established in a third country (being (x) in respect of the EU Securitization Regulation, a country other than an EU member state, or (y) in respect of the UK Securitization Regulation, a country other than the UK), the originator or original lender grants all the credits giving rise to the underlying exposures on the basis of sound and well-defined criteria and clearly established processes for approving, amending, renewing and financing those credits and has effective systems in place to apply those criteria and processes in order to ensure that credit-granting is based on a thorough assessment of the obligor’s creditworthiness.

The Due Diligence Requirements further require that prior to holding a securitization position, an Institutional Investor, other than the originator, sponsor or original lender, carry out a due diligence assessment which enables it to assess the risks involved, including but not limited to (a) the risk characteristics of the individual securitization position and the underlying exposures; and (b) all the structural features of the securitization that can materially impact the performance of the securitization position, including the contractual priorities of payment and priority of payment-related triggers, credit enhancements, liquidity enhancements, market value triggers, and transaction-specific definitions of default.

impact the performance of the securitization position, including the contractual priorities of payment and priority of payment-related triggers, credit enhancements, liquidity enhancements, market value triggers, and transaction-specific definitions of default.

Any Institutional Investor that fails to comply with the applicable Due Diligence Requirements in respect of a securitization position which it holds may become subject to a range of regulatory sanctions including, in the case of a credit institution, investment firm, insurer or reinsurer, a punitive regulatory capital charge with respect to such securitization position, or, in certain other cases, a requirement to take corrective action.

To the extent a CLO is structured in compliance with the Securitization Regulations, the Company’s ability to invest in the CLO equity of such CLOs could be limited, or the Company could be required to hold its investment for the life of the CLO. If a CLO has not been structured to comply with the Securitization Regulations, it will limit the ability of Institutional Investors to purchase CLO securities, which may adversely affect the price and liquidity of the securities (including the CLO equity) in the secondary market. Additionally, the Securitization Regulations and any regulatory uncertainty in relation thereto may reduce the issuance of new CLOs and reduce the liquidity provided by CLOs to the leveraged loan market generally. Reduced liquidity in the loan market could reduce investment opportunities for collateral managers, which could negatively affect the return of the Company’s investments. Any reduction in the volume and liquidity provided by CLOs to the leveraged loan market could also reduce opportunities to redeem or refinance the securities comprising a CLO in an optional redemption or refinancing and could negatively affect the ability of obligors to refinance their collateral obligations, either of which developments could increase defaulted obligations above historic levels.

The Japanese Financial Services Agency (the “JFSA”) published a risk retention rule as part of the regulatory capital regulation of certain categories of Japanese investors seeking to invest in securitization transactions (the “JRR Rule”). The JRR Rule mandates an “indirect” compliance requirement, meaning that certain categories of Japanese investors will be required to apply higher risk weighting to securitization exposures they hold unless the relevant originator commits to hold a retention interest equal to at least 5% of the exposure of the total underlying assets in the transaction (the “Japanese Retention Requirement”) or such investors determine that the underlying assets were not “inappropriately originated.” The Japanese investors to which the JRR Rule applies include banks, bank holding companies, credit unions (shinyo kinko), credit cooperatives (shinyo kumiai), labor credit unions (rodo kinko), agricultural credit cooperatives (nogyo kyodo kumiai), ultimate parent companies of large securities companies and certain other financial institutions regulated in Japan (such investors, “Japanese Affected Investors”). Such Japanese Affected Investors may be subject to punitive capital requirements and/or other regulatory penalties with respect to investments in securitizations that fail to comply with the Japanese Retention Requirement.

The JRR Rule became effective on March 31, 2019. At this time, there are a number of unresolved questions and no established line of authority, precedent or market practice that provides definitive guidance with respect to the JRR Rule, and no assurances can be made as to the content, impact or interpretation of the JRR Rule. In particular, the basis for the determination of whether an asset is “inappropriately originated” remains unclear and, therefore, unless the JFSA provides further specific clarification, it is possible that CLO securities the Company purchases may contain assets deemed to be “inappropriately originated” and, as a result, may not be exempt from the Japanese Retention Requirement. The JRR Rule or other similar requirements may deter Japanese Affected Investors from purchasing CLO securities, which may limit the liquidity of CLO securities and, in turn, adversely affect the price of such CLO securities in the secondary market. Whether and to what extent the JFSA may provide further clarification or interpretation as to the JRR Rule is unknown.

We may be subject to risks associated with our investments in covenant-lite loans

We have made and may in the future make or obtain significant exposure to covenant-lite loans, which generally are loans that do not require a borrower to comply with financial maintenance covenants, and may not include terms that allow the lender to monitor the financial performance of the borrower, including financial ratios, and declare a default if certain financial criteria are breached. While these loans may still contain other collateral protections, a covenant-lite loan may carry more risk than a covenant-heavy loan made by the same borrower as it does not require the borrower to provide affirmation that certain specific financial tests have been satisfied on a routine basis as is generally required under a covenant-heavy loan agreement. Generally, covenant-lite loans permit borrowers more opportunity to negatively impact lenders because their covenants, if any, tend to be incurrence-based, which means they are only tested and can only be breached following certain actions of the borrower, rather than by a deterioration in the borrower’s financial condition. Our investment in or exposure to a covenant-lite loan may potentially hinder our ability to reprice credit risk associated with the issuer and reduce our ability to restructure a problematic loan and mitigate potential loss. As a result, our exposure to losses may be increased, which could result in an adverse impact on our revenues, net income and net asset value.

by a deterioration in the borrower’s financial condition. Our investment in or exposure to a covenant-lite loan may potentially hinder our ability to reprice credit risk associated with the issuer and reduce our ability to restructure a problematic loan and mitigate potential loss. As a result, our exposure to losses may be increased, which could result in an adverse impact on our revenues, net income and net asset value.

Our investments in the companies that we target may be extremely risky and we could lose all or part of our investments.

Although a prospective portfolio company’s assets are one component of our analysis when determining whether to provide debt capital, we generally do not base investment decisions primarily on the liquidation value of a company’s balance sheet assets. Instead, given the nature of the companies that we invest in, we also review the company’s historical and projected cash flows, equity capital and “soft” assets, including intellectual property (patented and non-patented), databases, business relationships (both contractual and non-contractual) and the like. Accordingly, considerably higher levels of overall risk will likely be associated with our portfolio compared with that of a traditional asset-based lender whose security consists primarily of receivables, inventories, equipment and other tangible assets. Interest rates payable by our portfolio companies may not compensate for these additional risks, any of which could cause us to lose part or all of our investment.

Specifically, investment in certain of the companies that we are invested in involves a number of significant risks, including:

• these companies may have limited financial resources and may be unable to meet their obligations under their debt securities that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of us realizing any value from the liquidation of such collateral;

• they may have limited operating histories, narrower product lines and smaller market shares than larger businesses, which may tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic downturns;

• because many of them tend to be privately owned, there is generally little publicly available information about these businesses; therefore, although Oxford Square Management’s agents will perform “due diligence” investigations on these portfolio companies, their operations and their prospects, we may not learn all of the material information we need to know regarding these businesses;

• some of these companies are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on our portfolio company and, in turn, on us;

• some of these companies may have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position; and

• many of these companies may be more susceptible to economic recessions or downturns than other better capitalized companies that operate in less capital-intensive industries.

A portfolio company’s failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, termination of its loans and foreclosure on its assets, which could trigger cross-defaults under other agreements and jeopardize our portfolio company’s ability to meet its obligations under the debt securities that we hold. We may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting portfolio company. In addition, if a portfolio company goes bankrupt, even though we may have structured our interest as senior debt, depending on the facts and circumstances, including the extent to which we actually provided significant “managerial assistance” to that portfolio company, a bankruptcy court might recharacterize our debt holding and subordinate all or a portion of our claim to that of other creditors.

Inflation may adversely affect our and our portfolio companies’ business, results of operations and financial condition.

~~our~~Inflation ~~investment~~may ~~originations,~~adversely ~~limit~~affect our ~~ability to grow~~ and ~~negatively impact~~ our ~~operating~~portfolio ~~results.~~companies’ ~~Further~~business, ~~inflation~~results ~~could make it difficult to extend the maturity~~ of, oroperations ~~refinance~~and ~~existing~~financial ~~indebtedness or obtain new indebtedness on favorable terms~~condition.

Inflation could negatively impact our business, including our ability to access the debt markets on favorable terms, or could negatively impact our portfolio companies. Sustained inflation could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events could limit our investment originations, limit our ability to grow and negatively impact our operating results. Further, inflation could make it difficult to extend the maturity of, or refinance existing indebtedness or obtain new indebtedness on favorable terms.

Certain of our portfolio companies may be impacted by inflation. If such portfolio companies are unable to pass any increases in their costs along to their customers, it could adversely affect their results and impact their ability to pay interest and principal on our loans. In addition, any projected future decreases in our portfolio companies’ operating results due to inflation could adversely impact the fair value of those investments. Any decreases in the fair value of our investments could result in future unrealized losses and therefore reduce our net assets resulting from operations.

Our failure to make follow-on investments in our portfolio companies could impair the value of our investment portfolio.

Following an initial investment in a portfolio company, we may make additional investments in that portfolio company as “follow-on” investments, in order to: (i) increase or maintain in whole or in part our equity ownership percentage; (ii) exercise warrants, options or convertible securities that were acquired in the original or subsequent financing; or (iii) attempt to preserve or enhance the value of our investment.

We may elect not to make follow-on investments or otherwise lack sufficient funds to make those investments. We have the discretion to make any follow-on investments, subject to the availability of capital resources. The failure to make follow-on investments may, in some circumstances, jeopardize the continued viability of a portfolio company and our initial investment, or may result in a missed opportunity for us to increase our participation in a successful operation. Even if we have sufficient capital to make a desired follow-on investment, we may elect not to make a follow-on investment because we may not want to increase our concentration of risk, because we prefer other opportunities, or because we are inhibited by compliance with BDC requirements or the desire to maintain our tax status.

Our incentive fee may induce Oxford Square Management to use leverage and to make speculative investments.

The incentive fee payable by us to Oxford Square Management may create an incentive for Oxford Square Management to use leverage and to make investments on our behalf that are risky or more speculative than would be the case in the absence of such compensation arrangement. The way in which the incentive fee on “Pre-Incentive Fee Net Investment Income” is determined, which is calculated as a percentage of the return on invested capital, may encourage Oxford Square Management to use leverage to increase the return on our equity capital. Under certain circumstances, the use of leverage may increase the likelihood of default, which would disfavor holders of our common stock. Similarly, because Oxford Square Management may also receive an incentive fee based, in part, upon the capital gains realized on our investments, the investment adviser may invest more than would otherwise be appropriate in companies whose securities are likely to yield capital gains, compared to income producing securities. Such a practice could result in our investing in more speculative securities than would otherwise be the case, which could result in higher investment losses, particularly during an economic downturn.

Our portfolio companies may incur debt that ranks equally with, or senior to, our investments in such companies.

We intend to invest primarily in senior debt securities, but may also invest in subordinated debt securities, issued by our portfolio companies. In some cases, portfolio companies will be permitted to have other debt that ranks equally with, or senior to, the debt securities in which we invest. By their terms, such debt instruments may provide that the holders thereof are entitled to receive payment of interest or principal on or before the dates on which we are entitled to receive payments in respect of the debt securities in which we invest. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company, holders of debt instruments ranking senior to our investment in that portfolio company would typically be entitled to receive payment in full before we receive any distribution in respect of our investment. After repaying such senior creditors, such portfolio company may not have any remaining assets to use for repaying its obligations to us. In the case of debt ranking equally with debt securities in which we invest, we would have to share on an equal basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.

before we receive any distribution in respect of our investment. After repaying such senior creditors, such portfolio company may not have any remaining assets to use for repaying its obligations to us. In the case of debt ranking equally with debt securities in which we invest, we would have to share on an equal basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.

In addition, we will not be in a position to control any portfolio company by investing in its debt securities. As a result, we are subject to the risk that a portfolio company in which we invest may make business decisions with which we disagree and the management of such companies, as representatives of the holders of their common equity, may take risks or otherwise act in ways that do not best serve our interests as debt investors.

We may not realize gains from our equity investments.

When we invest in debt securities, we may acquire warrants or other equity securities as well. However, the equity interests we receive may not appreciate in value and, in fact, may decline in value. Accordingly, we may not be able to realize gains from our equity interests, and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we experience.

Because we generally do not hold controlling equity interests in our portfolio companies, we may not be in a position to exercise control over our portfolio companies or to prevent decisions by the managements of our portfolio companies that could decrease the value of our investments.

Although we have taken and may in the future take controlling equity positions in our portfolio companies from time to time, we generally do not do so. As a result, we are subject to the risk that a portfolio company may make business decisions with which we disagree, and the stockholders and management of a portfolio company may take risks or otherwise act in ways that are adverse to our interests. Due to the lack of liquidity for the debt and equity investments that we typically hold in our portfolio companies, we may not be able to dispose of our investments in the event we disagree with the actions of a portfolio company, and may therefore suffer a decrease in the value of our investments.

Our investments in CLO vehicles are riskier and less transparent to us and our stockholders than direct investments in the underlying senior loans.

We have invested in equity and junior debt tranches issued by CLO vehicles. Generally, there may be less information available to us regarding the underlying debt investments held by such CLO vehicles than if we had invested directly in the debt of the underlying companies. As a result, our stockholders may not know the details of the underlying securities of the CLO vehicles in which we will invest. Our CLO investments will also be subject to the risk of leverage associated with the debt issued by such CLOs and the repayment priority of senior debt holders in such CLO vehicles. Additionally, CLOs in which we invest are often governed by a complex series of legal documents and contracts. As a result, the risk of dispute over interpretation or enforceability of the documentation may be higher relative to other types of investments. For example, some documents governing the loans underlying our CLO investments may allow for “priming transactions,” in connection with which majority lenders or debtors can amend loan documents to the detriment of other lenders, amend loan documents in order to move collateral, or amend documents in order to facilitate capital outflow to other parties/subsidiaries in a capital structure, any of which may adversely affect the rights and security priority of the CLOs in which we are invested.

The accounting and tax implications of such investments are complicated. In particular, reported earnings from the equity tranche investments of these CLO vehicles are recorded under GAAP based upon an effective yield calculation. Current taxable earnings on these investments, however, will generally not be determinable until after the end of the fiscal year of each individual CLO vehicle that ends within the Company’s fiscal year, even though the investments are generating cash flow. In general, the tax treatment of these investments may result in higher distributable earnings in the early years and a capital loss at maturity, while for reporting purposes the totality of cash flows are reflected in a constant yield to maturity.

Some instruments issued by CLO vehicles may not be readily marketable and may be subject to restrictions on resale. Securities issued by CLO vehicles are generally not listed on any U.S. national securities exchange and no active trading market may exist for the securities of CLO vehicles in which we may invest. Although a secondary market may exist for our investments in CLO vehicles, the market for our investments in CLO vehicles may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods. As a result, these types of investments may be more difficult to value.

Failure by a CLO vehicle in which we are invested to satisfy certain tests will harm our operating results.

~~payments~~market ~~that~~may ~~would,~~exist infor ~~turn,~~our ~~reduce~~investments ~~the~~in ~~payments~~CLO ~~we would otherwise be entitled to receive. Separately~~vehicles, ~~we may incur expenses to~~ the ~~extent~~market ~~necessary~~for toour ~~seek~~investments ~~recovery~~in ~~upon~~CLO ~~default~~vehicles ~~or to negotiate new terms, which~~ may ~~include~~be ~~the~~subject ~~waiver~~to ofirregular ~~certain~~trading ~~financial covenants~~activity, ~~with~~wide abid/ask ~~defaulting~~spreads ~~CLO~~and ~~vehicle~~extended ortrade ~~any~~settlement ~~other investment we may make~~periods. IfAs ~~any~~a ofresult, these ~~occur,~~types itof ~~could~~investments ~~materially~~may ~~and~~be ~~adversely~~more ~~affect~~difficult ~~our~~to ~~operating results and cash flows~~value.

Failure by a CLO vehicle in which we are invested to satisfy certain tests will harm our operating results.

The failure by a CLO vehicle in which we invest to satisfy certain financial covenants, specifically those with respect to adequate collateralization and/or interest coverage tests, could lead to a reduction in its payments to us. In the event that a CLO vehicle failed these certain tests, holders of debt senior to us may be entitled to additional payments that would, in turn, reduce the payments we would otherwise be entitled to receive. Separately, we may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms, which may include the waiver of certain financial covenants, with a defaulting CLO vehicle or any other investment we may make. If any of these occur, it could materially and adversely affect our operating results and cash flows.

Our financial results may be affected adversely if one or more of our significant equity or junior debt investments in a CLO vehicle defaults on its payment obligations or fails to perform as we expect or if the market price fluctuates significantly in such illiquid investments.

As a BDC, we may not acquire equity and junior debt investments in CLO vehicles unless, at the time of such acquisition, at least 70% of our total assets are “qualifying assets.” CLO vehicles that we invest in are typically very highly levered, and therefore, the junior debt and equity tranches that we invest in are subject to a higher degree of risk of total loss. As of December 31, ~~2024~~2025, the CLO vehicles in which we were invested had average leverage of 6.4969 times and ranged from approximately 0.4110 times to 910.6988 times levered. In particular, investors in CLO vehicles indirectly bear risks of the underlying debt investments held by such CLO vehicles. We will generally have the right to receive payments only from the CLO vehicles, and will generally not have direct rights against the underlying borrowers or the entity that sponsored the CLO vehicle. While the CLO vehicles we have and continue to target generally enable the investor to acquire interests in a pool of leveraged corporate loans without the expenses associated with directly holding the same investments, we will generally indirectly pay a proportionate share of the CLO vehicles’ administrative and other expenses. Although it is difficult to predict whether the prices of indices and securities underlying CLO vehicles will rise or fall, these prices (and, therefore, the prices of the CLO vehicles) will be influenced by the same types of political and economic events that affect issuers of securities and capital markets generally. The failure by a CLO vehicle in which we invest to satisfy certain financial covenants, including as a result of political and economic events not directly associated with the leveraged corporate loans held by the CLO, and specifically those with respect to adequate collateralization and/or interest coverage tests, could lead to a reduction in its payments to us. In the event that a CLO vehicle failed those tests, holders of debt senior to us may be entitled to additional payments that would, in turn, reduce the payments we would otherwise be entitled to receive. Separately, we may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting CLO vehicle or any other investment we may make. If any of these occur, it could materially and adversely affect our operating results and cash flows.

The interests we intend to acquire in CLO vehicles will likely be thinly traded or have only a limited trading market. CLO vehicles are typically privately offered and sold, even in the secondary market. As a result, investments in CLO vehicles may be characterized as illiquid securities. In addition to the general risks associated with investing in debt securities, CLO vehicles carry additional risks, including, but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make interest or other payments; (ii) the quality of the collateral may decline in value or default; (iii) the fact that our investments in CLO tranches will likely be subordinate to other senior classes of note tranches thereof; and (iv) the complex structure of the security may not be fully understood at the time of investment and may produce disputes with the CLO vehicle or unexpected investment results. Our net asset value may also decline over time if our principal recovery with respect to CLO equity investments is less than the price we paid for those investments.

Investments in structured vehicles, including equity and junior debt instruments issued by CLO vehicles, involve risks, including credit risk and market risk. Changes in interest rates and credit quality may cause significant price fluctuations. Additionally, changes in the underlying leveraged corporate loans held by a CLO vehicle may cause payments on the instruments we hold to be reduced, either temporarily or permanently.

Structured investments, particularly the subordinated interests in which we intend to invest, are less liquid than many other types of securities and may be more volatile than the leveraged corporate loans underlying the CLO vehicles we intend to target. Fluctuations in interest rates may also cause payments on the tranches of CLO vehicles that we hold to be reduced, either temporarily or permanently.

Investments in foreign securities formed under the laws of the Cayman Islands may involve significant risks in addition to the risks inherent in U.S. investments.

Our investment strategy involves investments in securities issued by foreign entities, including foreign CLO vehicles that are formed under the laws of the Cayman Islands. Investing in foreign entities formed under the laws of the Cayman Islands may expose us to additional risks not typically associated with investing in U.S. issues. These risks include changes in exchange control regulations, political and social instability, expropriation, imposition of foreign taxes, less liquid markets and less available information than is generally the case in the U.S., higher transaction costs, less government supervision of exchanges, brokers and issuers, less developed bankruptcy laws, difficulty in enforcing contractual obligations, lack of uniform accounting and auditing standards and greater price volatility. Further, we, and the CLO vehicles in which we invest, may have difficulty enforcing creditor’s rights in foreign jurisdictions, such as the Cayman Islands. In addition, the underlying companies of the CLO vehicles in which we invest may be foreign, which may create greater exposure for us to foreign economic developments.

risks include changes in exchange control regulations, political and social instability, expropriation, imposition of foreign taxes, less liquid markets and less available information than is generally the case in the U.S., higher transaction costs, less government supervision of exchanges, brokers and issuers, less developed bankruptcy laws, difficulty in enforcing contractual obligations, lack of uniform accounting and auditing standards and greater price volatility. Further, we, and the CLO vehicles in which we invest, may have difficulty enforcing creditor’s rights in foreign jurisdictions, such as the Cayman Islands. In addition, the underlying companies of the CLO vehicles in which we invest may be foreign, which may create greater exposure for us to foreign economic developments.

Although we expect that most of our investments will be U.S. dollar-denominated, any investments denominated in a foreign currency will be subject to the risk that the value of a particular currency will change in relation to one or more other currencies. Among the factors that may affect currency values are trade balances, the level of short-term interest rates, differences in relative values of similar assets in different currencies, long-term opportunities for investment and capital appreciation, and political developments. We may employ hedging techniques to minimize these risks, but we can offer no assurance that we will, in fact, hedge currency risk, or that if we do, such strategies will be effective.

We will have no influence on management of underlying investments managed by non-affiliated third party CLO collateral managers.

We are not responsible for and have no influence over the asset management of the portfolios underlying the CLO investments we hold as those portfolios are managed by non-affiliated third party CLO collateral managers. Similarly, we are not responsible for and have no influence over the day-to-day management, administration or any other aspect of the issuers of the individual securities. As a result, the values of the portfolios underlying our CLO investments could decrease as a result of decisions made by third party CLO collateral managers.

RISKS RELATING TO AN INVESTMENT IN OUR SECURITIES

Our common stock price may be volatile.

The trading price of our common stock may fluctuate substantially depending on many factors, some of which are beyond our control and may not be directly related to our operating performance. These factors include, but are not limited to, the following:

• price and volume fluctuations in the overall stock market from time to time;

• significant volatility in the market price and trading volume of securities of regulated investment companies, BDCs or other financial services companies;

• exclusion of our common stock from certain indices could reduce the ability of certain investment funds to own our common stock and put short-term selling pressure on our common stock;

• changes in regulatory policies or tax guidelines with respect to regulated investment companies or BDCs;

• actual or anticipated changes in our earnings or fluctuations in our operating results or changes in the expectations of securities analysts;

• general economic conditions and trends;

• loss of a major funding source; or

• departures of key personnel.

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against such company. Due to the potential volatility of our stock price, we may therefore be the target of securities litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and resources from our business. Refer to “Risks relating to our business and structure — Our business and operation could be negatively affected if we become subject to any additional securities litigation or stockholder activism, which could cause us to incur significant expense, hinder execution of our investment strategy and impact our stock price.”

Our shares of common stock have traded at a discount from net asset value and may do so in the future.

Shares of BDCs have frequently traded at a market price that is less than the net asset value that is attributable to those shares. Our common stock has traded below our net asset value and could trade at a discount to net asset value at any time in the future. The possibility that our shares of common stock may trade at a discount from net asset value over the long term is separate and distinct from the risk that our net asset value will decrease.

If our common stock trades below its net asset value, we will generally not be able to issue additional shares of our common stock at its market price without first obtaining the approval for such issuance from our stockholders and our independent directors. If additional funds are not available to us, we could be forced to curtail or cease our new lending and investment activities, and our net asset value could decrease and our level of distributions could be impacted. Our net asset value may also decline over time if our principal recovery with respect to CLO equity investments is less than the price that we paid for those investments.

There is a risk that investors in our equity securities will not receive distributions or that our distributions will not grow over time and a portion of our distributions could be a return of capital.

We intend to make distributions to our stockholders out of assets legally available for distribution. We cannot assure you that we will achieve investment results that will allow us to make a specified level of cash distributions or year-to-year increases in cash distributions. Our ability to pay distributions could be adversely affected by the impact of one or more of the risk factors described in this Annual Report on Form 10-K as well as any amendments reflected in subsequent filings with the SEC. In addition, all distributions are and will be paid at the discretion of our Board of Directors and will depend on our earnings, financial condition, maintenance of our RIC status, compliance with applicable BDC regulations and such other factors as our Board of Directors could deem relevant from time to time. If we declare a distribution and if more stockholders opt to receive cash distributions rather than participate in our dividend reinvestment plan, we could be forced to sell some of our investments in order to make cash distribution payments. To the extent we make distributions to stockholders that include a return of capital, such portion of the distribution essentially constitutes a return of the stockholder’s investment. Although such return of capital is generally not currently taxable, such distributions would generally decrease a stockholder’s basis in our common stock and could therefore increase such stockholder’s tax liability for capital gains upon the future sale or other disposition of such common stock. A return of capital distribution could cause a stockholder to recognize a capital gain from the sale of our common stock even if the stockholder sells its shares for less than the original purchase price.

Your interest in us may be diluted if you do not fully exercise your subscription rights in any rights offering.

In the event we issue subscription rights or warrants to purchase shares of our common stock, stockholders who do not fully exercise their rights or warrants should expect that they will, at the completion of the offer, own a smaller proportional interest in us than would otherwise be the case if they fully exercised their rights or warrants. We cannot state precisely the amount of any such dilution in share ownership because we do not know at this time what proportion of the shares will be purchased as a result of the offer.

In addition, if the subscription price is less than our net asset value per share, then our stockholders would experience an immediate dilution of the aggregate net asset value of their shares as a result of the offer. The amount of any decrease in net asset value is not predictable because it is not known at this time what the subscription price, warrant exercise price or net asset value per share will be on the expiration date of such rights offering or what proportion of the shares will be purchased as a result of the offer. Such dilution could be substantial.

If we issue preferred stock, the net asset value and market value of our common stock will likely become more volatile.

We cannot assure you that the issuance of preferred stock would result in a higher yield or return to the holders of the common stock. The issuance of preferred stock would likely cause the net asset value and market value of the common stock to become more volatile. If the distribution rate on the preferred stock were to approach the net rate of return on our investment portfolio, the benefit of leverage to the holders of the common stock would be reduced. If the distribution rate on the preferred stock were to exceed the net rate of return on our portfolio, the leverage would result in a lower rate of return to the holders of common stock than if we had not issued preferred stock. Any decline in the net asset value of our investments would be borne entirely by the holders of common stock. Therefore, if the market value of our portfolio were to decline, the leverage would result in a greater decrease in net asset value to the holders of common stock than if we were not leveraged through the issuance of preferred stock. This greater

~~stock. Therefore, if the market value of our portfolio were to decline, the leverage would result in a greater decrease in~~ net asset value ~~to the holders of common stock than if we were not leveraged through the issuance of preferred stock. This greater net asset value~~ decrease would also tend to cause a greater decline in the market price for the common stock. We might be in danger of failing to maintain the required asset coverage of the preferred stock or of losing our ratings, if any, on the preferred stock or, in an extreme case, our current investment income might not be sufficient to meet the distribution requirements on the preferred stock. In order to counteract such an event, we might need to liquidate investments in order to fund a redemption of some or all of the preferred stock. In addition, we would pay (and the holders of common stock would bear) all costs and expenses relating to the issuance and ongoing maintenance of the preferred stock, including a likely higher advisory fee. Holders of preferred stock may have different interests than holders of common stock and may at times have disproportionate influence over our affairs.

Holders of any preferred stock we might issue would have the right to elect members of our Board of Directors and class voting rights on certain matters.

Holders of any preferred stock we might issue, voting separately as a single class, would have the right to elect two members of our Board of Directors at all times and in the event distributions become two full years in arrears would have the right to elect a majority of the directors until such arrearage is completely eliminated. In addition, preferred stockholders have class voting rights on certain matters, including changes in fundamental investment restrictions and conversion to open-end status, and accordingly can veto any such changes. Restrictions imposed on the declarations and payment of distributions or other distributions to the holders of our common stock and preferred stock, both by the 1940 Act and by requirements imposed by rating agencies, if any, or the terms of our credit facilities, if any, might impair our ability to maintain our tax treatment as a RIC for U.S. federal income tax purposes. While we would intend to redeem our preferred stock to the extent necessary to enable us to distribute our income as required to maintain our qualification as a RIC, there can be no assurance that such actions could be effected in time to meet the tax requirements.

The net asset value per share of our common stock may be diluted if we sell shares of our common stock in one or more offerings at prices below the then current net asset value per share of our common stock.

If we were to sell shares of our common stock below its then current net asset value per share, such sales would result in an immediate dilution to the net asset value per share of our common stock. This dilution would occur as a result of the sale of shares at a price below the then current net asset value per share of our common stock and a proportionately greater decrease in the stockholders’ interest in our earnings and assets and their voting interest in us than the increase in our assets resulting from such issuance. Because the number of shares of common stock that could be so issued and the timing of any issuance is not currently known, the actual dilutive effect cannot be predicted.

Further, if our current stockholders do not purchase any shares to maintain their percentage interest, regardless of whether such offering is above or below the then current net asset value per share, their voting power will be diluted. For example, if we sell an additional 10% of our common shares at a 10% discount from net asset value, a stockholder who does not participate in that offering for its proportionate interest will suffer net asset value dilution of up to 1.0% or $10 per $1,000 of net asset value.

GENERAL RISKS

We are operating in a period of capital markets volatility and economic uncertainty. The conditions have materially and adversely affected debt and equity capital markets in the United States, and any future volatility or instability in capital markets may have a negative impact on our business and operations.

~~From~~Our ~~time~~business toand ~~time,~~operations ~~capital markets~~ may ~~experience~~be ~~periods~~adversely ofaffected ~~volatility~~by ~~and instability for a variety of reasons. In addition to the factors described above, other factors described herein that may affect~~ market, economic and geopolitical conditions, and thereby adversely affect the Company including, without limitation, economic slowdown in the United States and internationally, changes in interest rates and/or a lack of availability of credit in the United States and internationally, commodity price volatility and changes in law and/or regulation, and uncertainty regarding government and regulatory policy. The full impact of any such risks is uncertain and difficult to predict.

Capital markets volatility and instability have also occurred in the past and may occur in the future. At various times, such disruptions in the past have resulted in, and may in the future result in, a lack of liquidity in the debt capital markets, significant write-offs in the financial services sector, the re-pricing of credit risk in the broadly syndicated credit market and the failure of major financial institutions. Despite actions of the U.S. federal

Capital markets volatility and instability have also occurred in the past and may occur in the future. For example, from 2008 to 2009, the global capital markets were unstable as evidenced by the lack of liquidity in the debt capital markets, significant write-offs in the financial services sector, the re-pricing of credit risk in the broadly syndicated credit market and the failure of major financial institutions. Despite actions of the U.S. federal government and various foreign governments, these events contributed to worsening general economic conditions that materially and adversely impacted the broader financial and credit markets and reduced the availability of debt and equity capital for the market as a whole and financial services firms in particular. ~~There have been more recent periods of volatility and there can be no assurance that adverse market conditions will not repeat themselves in the future.~~ Furthermore, uncertainty between the United States and other countries with respect to trade policies, treaties and tariffs, among other factors, have caused volatility in the global markets, and we cannot assure you that these market conditions will not continue or worsen in the future. Terrorist acts, acts of war, geopolitical tensions, natural disasters, or disease outbreaks, pandemics or other public health crises may cause periods of market instability and volatility and may disrupt the operations of us and our portfolio companies for extended periods of time. If similar adverse and volatile market conditions repeat in the future, we and other companies in the financial services sector may have to access, if available, alternative markets for debt and equity capital in order to grow. Equity capital may be particularly difficult to raise during periods of adverse or volatile market conditions because, subject to some limited exceptions, as a BDC, we are generally not able to issue additional shares of our common stock at a price less than the net asset value per share without first obtaining approval for such issuance from our stockholders and our Board of Directors, including all of our directors who are not “interested persons” of the Company, as defined in the 1940 Act.

~~Moreover,~~Such ~~the re-appearance of market~~ conditions ~~similar~~may tooccur ~~those experienced from 2008 through 2009~~ for ~~any~~a ~~substantial~~prolonged ~~length~~period of time, orand ~~worsened~~may ~~market~~materially ~~conditions~~worsen in the future, including as a result of U.S. government shutdowns or the perceived creditworthiness of the United States, could make it difficult for us to borrow money or to extend the maturity of or refinance any indebtedness we may have under similar terms and any failure to do so could have a material adverse effect on our business. The debt capital that will be available to us in the future, if any, may be at a higher cost and on less favorable terms and conditions than would currently be available. If we are unable to raise or refinance debt, stockholders may not benefit from the potential for increased returns on equity resulting from leverage and we may be limited in our ability to make new commitments or to fund existing commitments to our portfolio companies.

Given the periods of extreme volatility and dislocation in the capital markets from time to time, many BDCs have faced, and may in the future face, a challenging environment in which to raise or access capital. In addition, significant changes in the capital markets, including the extreme volatility and disruption over the past several years, has had, and may in the future have, a negative effect on asset valuations and on the potential for liquidity events. While most of our investments will not be publicly traded, applicable accounting standards require us to assume as part of our valuation process that our investments are sold in a principal market to market participants (even if we plan on holding an investment through to maturity). As a result, volatility in the capital markets can adversely affect the valuations of our investments. Further, the illiquidity of our investments may make it difficult for us to sell such investments to access capital if required. As a result, we could realize significantly less than the value at which we have recorded our investments if we were required to sell them for liquidity purposes. In addition, a prolonged period of market illiquidity may cause us to reduce the volume of loans and debt securities we originate and/or fund and adversely affect the value of our portfolio investments, which could have a material and adverse effect on our business, financial condition, results of operations and cash flows. An inability to raise or access capital could have a material adverse impact on our business, financial condition or results of operations.

Political, social and economic uncertainty creates and exacerbates risks.

Social, political, economic and other conditions and events (such as natural disasters, epidemics and pandemics, terrorism, conflicts and social unrest) will occur that create uncertainty and have significant impacts on issuers, industries, governments and other systems, including the financial markets, to which companies and their investments are exposed. As global systems, economies and financial markets are increasingly interconnected, events that once had only local impact are now more likely to have regional or even global effects. Events that occur in one country, region or financial market will, more frequently, adversely impact issuers in other countries, regions or markets, including in established markets such as the United States. These impacts can be exacerbated by failures of governments and societies to adequately respond to an emerging event or threat.

Uncertainty can result in or coincide with, among other things: increased volatility in the financial markets for securities, derivatives, loans, credit and currency; a decrease in the reliability of market prices and difficulty in valuing assets (including portfolio company assets); greater fluctuations in spreads on debt investments and currency exchange rates; increased risk of default (by both government and private obligors and issuers); further social, economic, and political instability; nationalization of private enterprise; greater governmental involvement in the economy or in social factors that impact the economy; changes to governmental regulation and supervision of the loan, securities, derivatives and currency markets and market participants and decreased or revised monitoring of such markets by governments or self-regulatory organizations and reduced enforcement of regulations; limitations on the activities of investors in such markets; controls or restrictions on foreign investment, capital controls and limitations on repatriation of invested capital; the significant loss of liquidity and the inability to purchase, sell and otherwise fund investments or settle transactions (including, but not limited to, a market freeze); unavailability of currency hedging techniques; substantial, and in some periods extremely high rates of inflation, which can last many years and have substantial negative effects on credit and securities markets as well as the economy as a whole; recessions; and difficulties in obtaining and/or enforcing legal judgments.

Global economic, regulatory and market conditions may adversely affect our business, results of operations and financial condition, including our revenue growth and profitability.

From time to time, social and political tensions in the United States and around the world, may contribute to increased market volatility, may have long-term effects on the U.S. and worldwide financial markets, and may cause economic uncertainties or deterioration in the United States and worldwide. For example, U.S. and global capital markets experienced extreme volatility and disruption during the economic downturn that began in mid-2007, and the U.S. economy was in a recession for several consecutive calendar quarters during the same period.

Market and economic disruptions have affected, and may in the future affect, consumer confidence levels and spending, personal bankruptcy rates, levels of incurrence and default on consumer debt and home prices, among other factors. Uncertainty between the United States and other countries with respect to trade policies, treaties and tariffs, among other factors, have caused disruptions in the global markets, including markets in which we participate. We cannot assure you that these market conditions will not continue or worsen in the future. Furthermore, we cannot assure you that market disruptions in Europe, including the increased cost of funding for certain governments and financial institutions, will not impact the global economy, and we cannot assure you that assistance packages will be available, or if available, be sufficient to stabilize countries and markets in Europe or elsewhere affected by a financial crisis. To the extent uncertainty regarding any economic recovery in Europe negatively impacts consumer confidence and consumer credit factors, our business, financial condition and results of operations could be significantly and adversely affected.

Increased geopolitical unrest, terrorist attacks, or acts of war may affect any market for our common stock, impact the businesses in which we invest, and harm our business, operating results, and financial conditions.

Terrorist activity and the continued threat of terrorism and acts of civil or international hostility, both within the United States and abroad, as well as ongoing military and other actions and heightened security measures in response to these types of threats, may cause significant volatility and declines in the global markets, loss of life, property damage, disruptions to commerce and reduced economic activity, which may negatively impact the businesses in which we invest directly or indirectly and, in turn, could have a material adverse impact on our business, operating results, and financial condition. Losses from terrorist attacks are generally uninsurable.

~~The~~Geopolitical ~~Israel-Hamas~~conflicts ~~war~~ and ~~the conflict between Russia and Ukraine and in the Middle East, and~~ resulting market volatility, could also adversely affect the Company’s business, operating results, and financial condition. The extent and duration or escalation of such conflicts, resulting sanctions and resulting future market disruptions are impossible to predict, but could be significant. Any disruptions resulting from such conflicts and any future conflict (including cyberattacks, espionage or the use or threatened use of nuclear weapons) or resulting from actual or threatened responses to such actions could cause disruptions to any of our portfolio companies located in ~~Europe~~affected orregions ~~the Middle East~~ or that have substantial business relationships with companies in affected regions. It is not possible to predict the duration or extent of longer-term consequences of these conflicts, which could include further sanctions, retaliatory and escalating measures, embargoes, regional instability, geopolitical shifts and adverse effects on or involving macroeconomic conditions, the energy sector, supply chains, inflation, security conditions, currency exchange rates and financial markets around the globe. Any such market disruptions could affect our portfolio companies’ operations and, as a result, could have a material adverse effect on our business, financial condition and results of operations.

exchange rates and financial markets around the globe. Any such market disruptions could affect our portfolio companies’ operations and, as a result, could have a material adverse effect on our business, financial condition and results of operations.

Changes in laws or regulations governing our operations may adversely affect our business or cause us to alter our business strategy.

We and our portfolio companies are subject to regulation by laws at the local, state, and federal levels. These laws and regulations, as well as their interpretation, could change from time to time, including as the result of interpretive guidance or other directives from the U.S. President and others in the executive branch, and new laws, regulations and interpretations could also come into effect. Any such new or changed laws or regulations could have a material adverse effect on our business, and political uncertainty could increase regulatory uncertainty in the near term.

regulations and interpretations could also come into effect. Any such new or changed laws or regulations could have a material adverse effect on our business, and political uncertainty could increase regulatory uncertainty in the near term.

Changes to the laws and regulations governing our permitted investments may require a change to our investment strategy. Such changes could differ materially from our strategies and plans as set forth in this report and may shift our investment focus from the areas of expertise of Oxford Square Management. Thus, any such changes, if they occur, could have a material adverse effect on our results of operations and the value of your investment in us.

Legislative changes, any other significant changes in economic or tax policy and/or government programs, as well as any future such changes could have a material adverse impact on us and on our investments.

The ~~effect~~outcome of ~~global~~the ~~climate~~U.S. ~~change~~presidential, ~~may~~congressional ~~impact~~and other elections creates significant uncertainty with respect to the ~~operations~~legal, oftax and regulatory regime in which we and our portfolio companies will operate.

~~There~~Changes ~~may~~in bethe ~~evidence~~composition of ~~global~~the ~~climate change~~U.S. ~~Climate~~government ~~change~~following ~~creates~~an ~~physical~~election ~~and~~could ~~financial~~result ~~risk~~in ~~and~~changes ~~some~~to ofU.S. ~~our~~and ~~portfolio~~non-U.S. ~~companies~~fiscal, ~~may~~tax beand ~~adversely~~other ~~affected~~policies, byas ~~climate~~well ~~change.~~as ~~For example,~~ the ~~needs~~global offinancial ~~customers~~markets ofgenerally. ~~energy~~Any ~~companies~~significant ~~vary~~changes ~~with~~in ~~weather~~economic ~~conditions~~policy, ~~primarily~~the ~~temperature~~regulation ~~and~~of ~~humidity. To~~ the ~~extent~~asset ~~weather~~management ~~conditions~~industry, ~~are~~international ~~affected~~trade bypolicy ~~climate~~and/or ~~change~~tax law, ~~energy~~among ~~use~~other things, could ~~increase~~have ora ~~decrease~~material ~~depending~~adverse impact on ~~the~~us ~~duration~~ and ~~magnitude~~our ~~of any changes~~investments. ~~Increases~~General fluctuations in the ~~cost~~market prices of ~~energy~~securities ~~could~~and ~~adversely~~interest ~~affect~~rates ~~the~~could ~~cost~~affect ~~of operations of~~ our ~~portfolio~~investment ~~companies~~opportunities ifand the ~~use~~value of ~~energy~~our ~~products~~investments. orWe ~~services~~could isalso ~~material~~be toaffected ~~their~~by ~~business.~~difficult Aconditions ~~decrease~~ in ~~energy~~the ~~use~~capital ~~due~~markets toand ~~weather~~any ~~changes~~overall ~~may~~weakening ~~affect some~~ of ~~our~~the ~~portfolio companies’~~ financial ~~condition,~~services ~~through decreased revenues~~industry. ~~Extreme~~Ongoing ~~weather~~disruptions ~~conditions~~ in ~~general~~the ~~require~~global ~~more~~credit ~~system~~markets ~~backup,~~could ~~adding~~affect toissuers’ ~~costs,~~ability ~~and~~to ~~can~~pay ~~contribute~~debts toand ~~increased~~obligations ~~system~~on ~~stresses,~~a ~~including~~timely ~~service interruptions~~basis. ~~Energy~~If ~~companies~~defaults ~~could~~occur, ~~also~~we becould ~~affected~~lose byboth ~~the~~invested ~~potential~~capital ~~for~~in, ~~lawsuits~~and ~~against~~anticipated orprofits ~~taxes or other regulatory costs imposed on greenhouse gas emitters~~from, ~~based~~any onaffected ~~links drawn between greenhouse gas emissions and climate change~~investments.

While the current U.S. administration has signaled a reduced emphasis on regulation, past U.S. administrations supported an enhanced regulatory agenda. Changes in regulation can impose greater costs on certain sectors, including financial services, or otherwise impact the competitive environment for obligors, which could adversely impact us and our clients.

Changes to United States tariff and import/export regulations may have a negative effect on our portfolio companies and, in turn, harm us.

~~There~~The U.S. government has ~~been~~indicated ~~ongoing~~its ~~discussion~~intent, made proposals and ~~commentary~~taken ~~regarding~~actions ~~potential~~to ~~significant~~alter ~~changes~~its approach to ~~United States~~international trade ~~policies,~~policy ~~treaties~~ and ~~tariffs.~~in ~~There~~some iscases ~~significant~~to ~~uncertainty~~renegotiate, ~~about~~or ~~the~~potentially ~~future~~terminate, ~~relationship~~existing ~~between~~bilateral ~~the~~or ~~United States~~multi-lateral ~~and~~trade ~~other~~agreements ~~countries~~and treaties with ~~respect~~foreign tocountries. ~~the~~Some ~~trade~~foreign ~~policies~~governments, ~~treaties~~including ~~and~~China, have instituted retaliatory tariffs on certain U.S. goods. These developments, or the perception that ~~any~~more of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States. Any of these factors could depress economic activity and restrict our portfolio companies’ access to suppliers or customers and have a material adverse effect on their business, financial condition and results of operations, which in turn would negatively impact us.

There is uncertainty as to further actions that may be taken under the current U.S. presidential administration with respect to U.S. trade policy. Further governmental actions related to the imposition of tariffs or other trade barriers, or changes to international trade agreements or policies, could further increase costs, decrease margins, reduce the competitiveness of products and services offered by current and future portfolio companies and adversely affect the revenues and profitability of companies whose businesses rely on goods imported from outside of the United States.

Internal and external cyber threats, as well as other disasters, could impair our ability to conduct business effectively.

The occurrence of a disaster such as a cyber-attack against us or against a third-party that has access to our data or networks, a natural catastrophe, an industrial accident, a terrorist attack or war, disease pandemics, events unanticipated in our disaster recovery systems, or a support failure from external providers, could have an adverse effect on our ability to conduct business and on our results of operations and financial condition, particularly if those events affect our computer-based data processing, transmission, storage, and retrieval systems or destroy data.

We depend heavily upon computer systems to perform necessary business functions. Despite our implementation of a variety of security measures, our computers, networks, and data, like those of other companies, could be subject to cyber-attacks and unauthorized access, use, alteration, or destruction, such as from physical and electronic break-ins or unauthorized tampering. If one or more of these events occurs, it could potentially jeopardize the confidential, proprietary and other information processed, stored in, and transmitted through our computer systems and networks. Such an attack could cause interruptions or malfunctions in our operations, which could result in financial losses, litigation, regulatory penalties, client dissatisfaction or loss, reputational damage, and increased costs associated with mitigation of damages and remediation.

Third parties with which we do business may also be sources of cybersecurity or other technological risk. We outsource certain functions and these relationships allow for the storage and processing of our information, as well as client, counterparty, employee, and borrower information. While we engage in actions to reduce our exposure resulting from outsourcing, ongoing threats may result in unauthorized access, loss, exposure, destruction, or other cybersecurity incident that affects our data, resulting in increased costs and other consequences as described above.

Certain of our service providers may be impacted by hybrid work policies adopted by companies following the COVID-19 pandemic, which are obstructing the regular functioning of business workforces (including requiring employees to work from external locations and their homes).

We are highly dependent on information systems and systems failures could significantly disrupt our business, which may, in turn, negatively affect the market price of our common stock and our ability to pay distributions.

Our business is highly dependent on our and third parties’ communications and information systems. Any failure or interruption of those systems, including as a result of the termination of an agreement with any third-party service providers, could cause delays or other problems in our activities. Our financial, accounting, data processing, backup or other operating systems and facilities may fail to operate properly or become disabled or damaged as a result of a number of factors including events that are wholly or partially beyond our control and adversely affect our business. There could be:

• sudden electrical or telecommunications outages;

• natural disasters such as earthquakes, tornadoes and hurricanes;

• events arising from local or larger scale political or social matters, including terrorist acts; and

• cyber-attacks

These events, in turn, could have a material adverse effect on our operating results and negatively affect the market price of our common stock and our ability to pay distributions to our stockholders.

Cybersecurity risks and cyber incidents may adversely affect our business or the businesses of our portfolio companies by causing disruptions to our operations or to the operations of our portfolio companies, a compromising or corruption of our confidential information or the confidential information of our portfolio companies and/or damage to our business relationships or the business relationships of our portfolio companies, all of which could negatively impact the business, financial condition and operating results of us or our portfolio companies.

A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of the information resources of us, Oxford Square Management or our portfolio companies. These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to our or Oxford Square Management’s information systems or those of our portfolio companies for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption. Oxford Square Management’s employees may be the target of fraudulent calls, emails and other forms of activities. The result of these incidents may include disrupted operations, misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation and damage to business relationships. Our business operations rely upon secure information technology systems for data processing, storage, and reporting. We depend on the effectiveness of the information and cybersecurity policies, procedures, and capabilities maintained by our affiliates and our and their respective third-party service providers to protect their computer and telecommunications systems and the data that reside on or are transmitted through them.

and reporting. We depend on the effectiveness of the information and cybersecurity policies, procedures, and capabilities maintained by our affiliates and our and their respective third-party service providers to protect their computer and telecommunications systems and the data that reside on or are transmitted through them.

Substantial costs may be incurred in order to prevent any cyber incidents in the future. The costs related to cyber or other security threats or disruptions may not be fully insured or indemnified by other means. As our and our portfolio companies’ reliance on technology has increased, so have the risks posed to our information systems, both internal and those provided by Oxford Square Management and third-party service providers, and the information systems of our portfolio companies. Oxford Square Management has implemented processes, procedures and internal controls to help mitigate cybersecurity risks and cyber intrusions, but these measures, as well as our increased awareness of the nature and extent of a risk of a cyber incident, do not guarantee that a cyber incident will not occur and/or that our financial results, operations or confidential information will not be negatively impacted by such an incident. In addition, cybersecurity continues to be a key priority for regulators around the world, and some jurisdictions have enacted laws requiring companies to notify individuals or the general investing public of data security breaches involving certain types of personal data, including the SEC, which, on July 26, 2023, adopted amendments requiring the prompt public disclosure of certain cybersecurity breaches. If we fail to comply with the relevant laws and regulations, we could suffer financial losses, a disruption of our business, liability to investors, regulatory intervention or reputational damage.

We are subject to risks associated with artificial intelligence and machine learning technology

Artificial intelligence (“AI”) refers to computer systems capable of performing tasks that typically require human intelligence, including but not limited to machine learning, ~~and~~natural ~~similar~~language ~~tools~~processing, and generative and agentic AI technologies. ~~that~~These ~~collect,~~systems ~~aggregate,~~are ~~analyze~~designed orto ~~generate~~analyze data, orlearn ~~other~~from ~~materials~~patterns, ormake ~~collectively,~~decisions and solve problems. AI, and its current and potential future applications including in the private investment and financial industries, as well as the legal and regulatory frameworks within which AI operates, continue to rapidly evolve. Investors should be aware that the use of AI tools, while potentially beneficial, presents a range of risks and may result in material adverse consequences (including the risks discussed in further detail below) for us or our third-party service providers or counterparties, and no assurance can be given that any controls adopted to govern the use of AI will fully mitigate the risks associated with AI technologies.

~~Recent~~AI ~~technological~~tools ~~advances~~may inproduce AIinaccurate, ~~pose~~biased, ~~risks~~insufficient, todiscriminatory, ~~the Company~~misleading, ~~the Adviser~~incomplete, ~~and~~undetectable ~~our~~manipulative ~~portfolio~~or ~~investments.~~otherwise ~~The~~flawed ~~Company~~responses ~~and~~due ~~our~~to ~~portfolio~~(among ~~investments~~other ~~could~~things) ~~also~~limitations bein ~~exposed~~training todata, ~~the~~algorithmic ~~risks~~design ofor AIoperational ifoversight. ~~third-party~~Such ~~service~~deficiencies ~~providers~~may orresult ~~any~~in ~~counterparties~~operational errors, ~~whether~~investment orlosses, ~~not~~reputational, ~~known~~financial, toor ~~the~~social ~~Company~~harm, ~~also~~legal ~~use~~liability, AIregulatory inscrutiny ~~their~~or ~~business~~other ~~activities~~adverse effects. WeThe deployment and ~~our~~supervision ~~portfolio~~of ~~companies~~AI tools may ~~not~~increase beoperational inand acompliance ~~position~~risks. toInappropriate ~~control the~~ use of AI ~~technology~~tools inor ~~third-party~~overreliance ~~products~~on orAI ~~services~~outputs without adequate human oversight may further exacerbate these risks.

~~Use~~The oflegal AIand ~~could~~regulatory ~~include~~environment ~~the~~relating ~~input~~to ofAI ~~confidential~~is ~~information~~uncertain inand ~~contravention~~evolving ofand ~~applicable~~future ~~policies~~changes, ~~contractual~~such oras ~~other~~those ~~obligations~~related orto ~~restrictions~~privacy, ~~resulting~~data inprotection ~~such confidential information becoming part accessible by other third-party AI applications~~ and ~~users.~~intellectual ~~While~~property, ~~the~~could ~~Adviser~~have ~~does~~an ~~not~~impact ~~currently~~on ~~use AI to make investment recommendations,~~ the use of AI ~~could~~and ~~also~~existing ~~exacerbate~~ or ~~create~~emerging ~~new~~technologies ~~and~~that ~~unpredictable~~could ~~risks~~impact tous. ~~our~~It ~~business,~~is ~~the~~possible ~~Adviser’s~~that ~~business,~~future ~~and~~changes ~~the business of our portfolio companies, including by potentially significantly disrupting the markets~~ in ~~which~~applicable welegal and ~~our~~regulatory ~~portfolio~~requirements ~~companies~~could ~~operate~~increase orcompliance ~~subjecting~~costs. ~~us,~~Any ~~our~~of ~~portfolio~~these ~~companies~~risks ~~and the Adviser to increased competition and regulation, which~~ could ~~materially and~~ adversely affect ~~business, financial condition or results of operations of~~ us~~, our portfolio companies and the Adviser~~. ~~In addition~~Additionally, ~~the~~regulatory ~~use~~actions ofor AIlegal bychallenges ~~bad~~may ~~actors~~impose ~~could~~restrictions ~~heighten~~or ~~the~~obligations ~~sophistication~~that ~~and~~affect ~~effectiveness~~operational ofefficiency ~~cyber~~or ~~and~~compliance ~~security attacks experienced by our portfolio companies and the Adviser~~posture.

~~Independent~~The ofmisuse ~~its context~~ of ~~use,~~ AI ~~technology~~tools, iswhether ~~generally~~intentional ~~highly~~or ~~reliant on the collection and analysis of large amounts of data~~inadvertent, ~~and~~may itexpose isus ~~not possible or practicable~~ to ~~incorporate~~additional ~~all~~risks. ~~relevant~~In ~~data~~addition, ~~into~~AI ~~the~~tools ~~model~~and ~~that AI~~ technology ~~utilizes~~are toevolving ~~operate.~~rapidly ~~Certain data in such models will inevitably contain a degree of inaccuracy~~ and ~~error — potentially materially so — and could otherwise be inadequate or flawed, which would be likely to degrade~~ the ~~effectiveness~~integration of AI ~~technology.~~in Tosystems ~~the~~and ~~extent~~operations ~~that~~create wenew orrisks ~~our~~that ~~portfolio~~can ~~investments~~be ~~are~~difficult ~~exposed~~ to ~~the~~assess ~~risks~~and ~~of AI use, any such inaccuracies or errors could have adverse impacts on the Company or our investments~~anticipate.

AIWe ~~technology~~ and ~~its~~our ~~applications,~~portfolio ~~including~~investments incould also be exposed to the ~~private~~risks ~~investment~~of ~~and~~AI ~~financial~~if ~~sectors~~third-party service providers or any counterparties, ~~continue~~whether toor ~~develop~~not ~~rapidly~~known to us, also use AI in their business activities. We and itour isportfolio ~~impossible~~companies may not be in a position to ~~predict~~control the ~~future~~use ~~risks~~of ~~that~~AI ~~may~~technology ~~arise~~in ~~from~~third-party ~~such~~products ~~developments~~or services.

WeThe ~~are~~use ~~subject~~of tothird-party and open-source AI tools (if any) can pose additional risks ~~related~~relating to ~~corporate~~data ~~social~~protection ~~responsibility~~and information security, including the potential exposure of confidential information to unauthorized recipients and the misuse of intellectual property, which could adversely affect us.

~~Our~~The ~~business~~use ~~faces~~of ~~increasing~~AI ~~public~~could ~~scrutiny~~also ~~related~~exacerbate toor ~~environmental,~~create ~~social~~new and ~~governance~~unpredictable ~~(“ESG”)~~risks ~~activities.~~to Weour ~~risk~~business, ~~damage~~Oxford toSquare ~~our~~Management’s ~~brand~~business, and ~~reputation~~the ifbusiness weof ~~fail~~our toportfolio ~~act~~companies, ~~responsibly~~including by potentially significantly disrupting the markets in awhich ~~number~~we ofand ~~areas,~~our ~~such~~portfolio ascompanies ~~environmental~~operate ~~stewardship~~or subjecting us, ~~corporate~~our ~~governance~~portfolio companies and ~~transparency~~Oxford Square Management to increased competition and ~~considering~~regulation, ~~ESG~~which ~~factors~~could inmaterially ~~our~~and ~~investment~~adversely

~~processes.~~affect ~~Adverse~~business, ~~incidents~~financial ~~with~~condition ~~respect~~or toresults ~~ESG~~of ~~activities~~operations ~~could impact the value~~ of us, our ~~brand,~~portfolio ~~the~~companies ~~cost~~and ofOxford ~~our~~Square ~~operations~~Management. ~~and~~The ~~relationships~~use ~~with~~of ~~investors,~~AI ~~all~~by ofbad ~~which~~actors could ~~adversely~~heighten ~~affect~~the ~~our~~security ~~business~~vulnerabilities and ~~results~~sophistication and effectiveness of ~~operations.~~cyber ~~Additionally,~~and ~~new~~security ~~regulatory~~attacks ~~initiatives~~experienced ~~related~~by toour ~~ESG~~portfolio ~~could~~companies ~~adversely~~and ~~affect~~Oxford ~~our~~Square ~~business~~Management.

AI technology and its applications, including in the private investment and financial sectors, continue to develop rapidly, and it is impossible to predict the future risks that may arise from such developments.

We maintain our cash at financial institutions, often in balances that exceed federally insured limits.

~~Our~~Cash ~~cash is~~ held inby ~~accounts~~us atand aby ~~U.S. banking~~our ~~institution~~portfolio ~~that~~companies ~~we believe is of high quality. Cash held~~ in non-interest-bearing and interest-bearing operating accounts may exceed the ~~Federal Deposit Insurance Corporation (“~~FDIC”) insurance limits. If such banking institutions were to fail, we or our portfolio companies could lose all or a portion of those amounts held in excess of such FDIC insurance limitations. ~~While~~In ~~the~~addition, ~~FDIC~~actual ~~took~~events ~~control~~involving oflimited ~~two such banking institutions~~liquidity, ~~Silicon Valley Bank (“SVB”)~~defaults, onnon-performance ~~March 10,~~or ~~2023~~other ~~and~~adverse ~~Signature~~developments ~~Bank~~that ~~(“Signature”)~~affect onfinancial ~~March 12~~institutions, ~~2023,~~transactional wecounterparties ~~did not have any accounts with SVB~~ or ~~Signature~~other ~~and~~companies ~~therefore~~in ~~did~~the ~~not~~financial ~~experience~~services ~~any~~industry ~~specific~~or ~~risk~~the offinancial ~~loss.~~services Asindustry ~~the~~generally, ~~FDIC~~or ~~continues~~concerns toor ~~address~~rumors ~~the~~about ~~situation~~any ~~with~~events ~~SVB,~~of ~~Signature~~these ~~Bank~~kinds ~~and~~or other ~~similarly~~similar ~~situated banking institutions~~risks, ~~the~~have ~~risk of loss~~ in ~~excess~~the ofpast ~~insurance~~and ~~limitations has generally increased. Any material loss that we~~ may ~~experience~~ in the future ~~could~~lead ~~have~~to anmarket-wide ~~adverse~~liquidity ~~effect~~problems, onwhich ~~our~~could ~~ability~~adversely toaffect ~~pay~~ our ~~operational expenses or make other payments~~ and ~~may require us to move~~ our ~~accounts~~portfolio tocompanies’ ~~other banks~~business, ~~which~~financial ~~could~~condition, ~~cause~~results aof ~~temporary~~operations, ~~delay~~or ~~in making payments to our vendors and employees and cause other operational inconveniences~~prospects.

Although we assess our and our portfolio companies’ banking relationships as we believe necessary or appropriate, our and our portfolio companies’ access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our respective current and projected future business operations could be significantly impaired by factors that affect us or our portfolio companies, the financial institutions with which we, or our portfolio companies have arrangements directly, or the financial services industry or economy in general. These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry. These factors could involve financial institutions or financial services industry companies with which we or our portfolio companies have financial or business relationships, but could also include factors involving financial markets or the financial services industry generally. In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us or our portfolio companies to acquire financing on acceptable terms or at all.

Item 1B. Unresolved Staff Comments

Not applicable.

Item 1C. Cybersecurity

The Company has processes in place to assess, identify, and manage material risks from cybersecurity threats. The Company’s business is dependent on the communications and information systems of Oxford Funds and other third-party service providers. Oxford Funds manages the day-to-day operations of the Company and has implemented a cybersecurity program that applies to the Company and its operations.

Cybersecurity Program Overview

Oxford Funds has instituted a cybersecurity program designed to identify, assess, and manage cyber risks applicable to the Company and assists with the oversight of other third party service providers and their cybersecurity programs. The cyber risk management program involves risk assessments, implementation of security measures, and ongoing monitoring of systems and networks, including networks on which the Company relies. Oxford Funds actively monitors the current threat landscape in an effort to identify material risks ~~arising~~to the Company from new and evolving cybersecurity threats, including ~~material~~threats ~~risks~~arising ~~faced~~from bynew ~~the~~technologies, ~~Company~~such as generative artificial intelligence.

The Company relies on Oxford Funds to engage external experts, including cybersecurity assessors and consultants to evaluate cybersecurity measures and risk management processes, including those applicable to the Company.

The Company relies on Oxford Funds’ risk management program and processes, which include cyber risk assessments.

The Company depends on and engages various third parties, including suppliers, vendors, and service providers, to operate its business. The Company relies on its Officers and the expertise of risk management and information technology personnel of Oxford Funds when identifying and overseeing risks from cybersecurity threats, including risks from third parties.

Board Oversight of Cybersecurity Risks

The Board provides strategic oversight on cybersecurity matters, including risks associated with cybersecurity threats. The Board receives periodic updates from its Chief Compliance Officer (“CCO”), which incorporates updates provided by the Head of Information Technology of Oxford Funds, regarding the overall state of Oxford Funds’ cybersecurity program, information on the current threat landscape, and risks from cybersecurity threats and cybersecurity incidents impacting the Company.

Management’s Role in Cybersecurity Risk Management

The Company’s management, including the Company’s CCO and the Head of Information Technology of Oxford Funds, manages the Company’s cybersecurity program. The President and CCO of the Company oversee the Company’s oversight function generally and rely on Oxford Funds’ Head of Information Technology to manage the assessment and management of material risks from cybersecurity threats. The Head of Information Technology has more than 910 years of experience in actively managing cybersecurity and information security programs for financial services companies with complex information systems. The CCO has been responsible for his oversight function as CCO to the Company for 910 years and has worked in the financial services industry for more than 35 years, during which time the CCO has gained expertise in assessing and managing risk applicable to the Company.

Management of the Company is informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents impacting the Company, including through the receipt of notifications from service providers and reliance on communications with risk management, legal, information technology, and/or compliance personnel of Oxford Funds.

Assessment of Cybersecurity Risk

The potential impact of risks from cybersecurity threats on the Company are assessed on an ongoing basis, and how such risks could materially affect the Company’s business strategy, operational results, and financial condition are regularly evaluated. During the reporting period, the Company has not identified any risks from cybersecurity threats, including as a result of previous cybersecurity incidents, that the Company believes have materially affected, or are reasonably likely to materially affect, the Company, including its business strategy, operational results, and financial condition.

Item 2. Properties

We do not own any real estate or other physical properties materially important to our operation. Our headquarters are located at 8 Sound Shore Drive, Suite 255, Greenwich, Connecticut, where we occupy our office space pursuant to our Administration Agreement with Oxford Funds. We believe that our office facilities are suitable and adequate for our business as it is presently conducted.

Item 3. Legal Proceedings

We are not currently subject to any pending material legal proceedings. From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

PRICE RANGE OF COMMON STOCK AND DISTRIBUTIONS

Our common stock is traded on the Nasdaq Global Select Market under the symbol “OXSQ.” The following table sets forth, for each fiscal quarter during the last two fiscal years, the net asset value, or “NAV,” per share of our common stock, the high and low intraday sales prices for our common stock, such sales prices as a percentage of NAV per share and quarterly distributions per share.

			Price Range				Premium or(Discount)ofHigh SalesPrice toNAV(2)		Premium or(Discount)ofLow SalesPrice toNAV(2)		DistributionsPer Share(3)
	NAV(1)		High		Low
Fiscal 2026
First Quarter (through March 2, 2026)		*	$	1.98	$	1.72	*		*		$	0.105
Fiscal 2025
First Quarter (through February 27, 2025)		*	$	2.87	$	2.44	*		*		$	0.105
Fourth Quarter	$	1.69	$	2.05	$	1.56	21.3	%	(7.7	)%	$	0.105
Third Quarter	$	1.95	$	2.42	$	1.56	24.1	%	(20.0	)%	$	0.105
Second Quarter	$	2.06	$	2.64	$	2.14	28.2	%	3.9	%	$	0.105
First Quarter	$	2.09	$	2.87	$	2.44	37.1	%	16.7	%	$	0.105
Fiscal 2024
Fourth Quarter	$	2.30	$	2.99	$	2.40	30.0	%	4.3	%	$	0.105
Third Quarter	$	2.35	$	3.10	$	2.74	31.9	%	16.6	%	$	0.105
Second Quarter	$	2.43	$	3.29	$	2.91	35.4	%	19.8	%	$	0.105
First Quarter	$	2.42	$	3.22	$	2.85	33.1	%	17.8	%	$	0.105
Fiscal 2023
Fourth Quarter	$	2.55	$	3.12	$	2.82	22.4	%	10.6	%	$	0.105
Third Quarter	$	2.78	$	3.29	$	2.68	18.3	%	(3.6	)%	$	0.225
Second Quarter	$	2.88	$	3.20	$	2.60	11.1	%	(9.7	)%	$	0.105
First Quarter	$	2.80	$	3.70	$	3.00	32.1	%	7.1	%	$	0.105

____________

* Net asset value has not yet been calculated for this period.

(1) Net asset value per share is determined as of the last day in the relevant quarter and therefore may not reflect the net asset value per share on the date of the high and low sales prices. The net asset values shown are based on outstanding shares at the end of each period.

(2) Calculated as the respective high or low intraday sales price divided by NAV and subtracting 1.

(3) Represents the cash distributions, including dividends, dividends reinvested and returns of capital, if any, per share that we have declared on our common stock in the specified quarter.

On ~~February~~March 272, ~~2025~~2026, the last reported sales price of our common stock was $21.8082 per share. As of ~~February~~March 272, ~~2025~~2026, we had ~~124~~123 stockholders of record.

Shares of BDCs may trade at a market price that is less than the value of the net assets attributable to those shares. The possibility that our shares of common stock will trade at a discount from net asset value or at premiums that are unsustainable over the long term are separate and distinct from the risk that our net asset value will decrease. Our shares of common stock have traded both at a premium and a discount to the net assets attributable to those shares. As of ~~February~~March 272, ~~2025~~2026, our shares of common stock traded at a premium equal to approximately 217.7% of the net asset value per share as of December 31, ~~2024~~2025. It is not possible to predict whether the shares offered hereby will trade at, above, or below net asset value.

Distributions

We currently intend to distribute a minimum of 90% of our ordinary income and short-term capital gains (net of short-term capital losses), if any, on a quarterly basis to our stockholders, in accordance with our election to be treated, and intention to qualify annually, as a RIC under Subchapter M of the Code. For a more detailed discussion of the requirements under Subchapter M, please refer to the discussion in “Business — Certain ~~U.S. Federal~~

U.S. Federal Income Tax Considerations” set forth above. In order to qualify as a RIC, we are required, under Subchapter M of the Code, to distribute at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses to our stockholders on an annual basis.

A written statement identifying the nature of our distributions for tax reporting purposes was posted on our website. The final determination of the nature of distribution can only be made upon the filing of our tax return. We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of these distributions from time to time. In addition, we may be limited in our ability to make distributions due to the asset coverage requirements applicable to us as a BDC under the 1940 Act. If we do not distribute a certain percentage of our income annually, we will suffer adverse tax consequences, including possible loss of RIC tax treatment. We cannot assure stockholders that they will receive any distributions.

To the extent our taxable earnings fall below the total amount of our distributions for that fiscal year, a portion of those distributions may be deemed a tax return of capital to our stockholders. Thus, the source of a distribution to our stockholders may be the original capital invested by the stockholder rather than our taxable ordinary income or capital gains. Stockholders should read any written disclosure accompanying a distribution payment carefully and should not assume that the source of any distribution is taxable ordinary income or capital gains.

Recent Sales of Unregistered Securities

We did not engage in unregistered sales of equity securities during the year ended December 31, ~~2024~~2025, however, we issued a total of ~~326~~391,~~184~~246 shares of common stock under our distribution reinvestment plan. This issuance was not subject to the registration requirements of the Securities Act of 1933, as amended. The aggregate value for the shares of common stock issued under the distribution reinvestment plan was approximately $0.98 million.

Issuer Purchases of Equity Securities

~~During~~On October 30, 2025, the ~~year~~Board ~~ended~~of ~~December 31~~Directors authorized a 12-month share repurchase program (the “Share Repurchase Program”). Under the Share Repurchase Program, ~~2024~~we may repurchase, noduring the 12-month period commencing on October 30, 2025, up to $25.0 million in the aggregate of our outstanding common stock ~~was~~in the open market. The timing, manner, price and amount of any share repurchases will be determined by us, in our discretion, based upon the evaluation of economic and market conditions, our stock price, applicable legal, contractual and regulatory requirements and other factors. The Share Repurchase Program is expected to be in effect until October 30, 2026, unless extended or until the aggregate repurchase amount has been expended. The Share Repurchase Program does not require us to repurchase any specific number of shares, and we cannot assure stockholders that any shares will be repurchased under the Share Repurchase Program. The Share Repurchase Program may be suspended, extended, modified or discontinued at any time.

During the year ended December 31, 2025, no common stock was repurchased.

Performance Graph

The graph below compares the cumulative stockholder return on our common stock with that of the NASDAQ Composite Index and the NASDAQ Financial 100, as we do not believe there is an appropriate index of companies with an investment strategy similar to our own with which to compare the return on our common stock, for the period from December 31, ~~2019~~2020 through December 31, ~~2024~~2025. The graph assumes that, on December 31, ~~2019~~2020, a person invested $100 in each of our common stock, the NASDAQ Composite Index and the NASDAQ Financial 100, which includes the 100 largest domestic and international financial organizations listed on the NASDAQ Stock Market based on market capitalization. The NASDAQ Financial 100 contains banks and savings institutions and related holding companies, insurance companies, broker-dealers, investment companies and financial services organizations.

The graph measures cumulative total stockholder return, which takes into account both changes in stock price and distributions. It assumes that distributions paid are reinvested in like securities.

The graph and the information furnished under this Part II Item 5 of this Form 10-K shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act. The stock price performance included in the below graph is not necessarily indicative of future stock price performance.

FEES AND EXPENSES

The following table is intended to assist you in understanding the costs and expenses that you will bear directly or indirectly. We caution you that some of the percentages indicated in the table below are estimates and may vary. Except where the context suggests otherwise, whenever this Annual Report on Form 10-K contains a reference to fees or expenses paid by “us” or “OXSQ,” or that “we” will pay fees or expenses, you will indirectly bear such fees or expenses as an investor in OXSQ.

Stockholder transaction expenses:
Sales load (as a percentage of offering price)	—	%(1)
Offering expenses borne by our common stockholders (as a percentage of offering price)	—	%(2)
Distribution reinvestment plan expenses	—	%(3)
Total stockholder transaction expenses (as a percentage of offering price)	—	%
Annual expenses (as a percentage of net assets attributable to our common stock):
Base management fee	2.4974	%(4)
Incentive fees payable under our investment advisory agreement	—	%(5)
Interest payments on borrowed funds	35.7372	%(6)
Other expenses	2.0330	%(3)(7)
Total annual expenses	810.2476	%(8)(9)

____________

(1) If applicable, the prospectus or prospectus supplement relating to an offering of our securities will disclose the applicable sales load and the “Example” will be updated accordingly.

(2) If applicable, the prospectus or prospectus supplement relating to an offering of our securities will disclose the applicable offering expenses and total stockholder transaction expenses as a percentage of the offering price.

(3) The expenses of the distribution reinvestment plan are included in “other expenses.” The plan administrator’s fees will be paid by us. We will not charge any brokerage charges or other charges to stockholders who participate in the plan. However, your own broker may impose brokerage charges in connection with your participation in the plan.

(4) Assumes gross assets (which equals the total assets on our Statements of Assets and Liabilities adjusted as described in this footnote) of $~~349~~356.7 million and $~~125~~155.3 million of leverage (including $4474.8 million in aggregate principal of our 67.2575% Unsecured Notes and $80.5 million in aggregate principal of our 5.50% Unsecured Notes in each case, as of December 31, ~~2024~~2025), and assumes net assets of $~~210~~195.74 million (which has been adjusted to reflect the net issuance of an additional $50.0 million of common stock). For purposes of this table, the SEC requires our base management fee to be calculated as a percentage of our net assets. Our base management fee under the Investment Advisory Agreement, however, is based on our gross assets, which is defined as all the assets of Oxford Square Capital Corp., including those acquired using borrowings for investment purposes. As a result, to the extent we use additional leverage, it would have the effect of increasing our base management fee as a percentage of our net assets. See Item 1. Business — Investment Advisory Agreement in this Annual Report on Form 10-K.

(5) Assumes no annual incentive fees earned by Oxford Square Management. Oxford Square Management did not earn incentive fees during the year ended December 31, ~~2024~~2025, due to the Total Return Requirement described under Item 1. Business — Investment Advisory Agreement — Advisory Fee in this Annual Report on Form 10-K. In subsequent periods, incentive fees may be earned by Oxford Square Management if, and to the extent that, we earn greater investment income through our investments in portfolio companies and realize additional gains upon the sale of investments in such companies. For a detailed discussion of the calculation of the incentive fees, see Item 1 — Business — Investment Advisory Agreement — Advisory Fee in this Annual Report on Form 10-K.

(6) Assumes that we have $~~125~~155.3 million of outstanding principal borrowings as of December 31, ~~2024~~2025. The calculation also assumes an effective interest rate of 68.7752% (including amortization of deferred issuance costs) on the approximately $4474.8 million of 67.2575% Unsecured Notes outstanding as of December 31, ~~2024~~2025, and an effective interest rate of 5.98% (including amortization of deferred issuance costs) on the approximately $80.5 million of 5.50% Unsecured Notes outstanding as of December 31, ~~2024~~2025. This table includes all of the commitment fees, interest expense and amortized financing costs of the 67.2575% Unsecured Notes and 5.50% Unsecured Notes, as well as the fees and expenses of issuing and servicing any other borrowings or leverage that the Company expects to incur during the 12 months following the filing of this Annual Report on Form 10-K. We may issue preferred stock, which may be considered a form of leverage, pursuant to the registration statement of which the prospectus forms a part, although we have no current plans to do so during the 12 months following the Annual Report on Form 10-K.

(7) “Other expenses” are based on the actual expenses for the year ended December 31, ~~2024~~2025, and adjusted for any new and non-recurring expenses, such as an assumed issuance of an additional $50.0 million of common stock. These expenses include certain expenses allocated to the Company under the Investment Advisory Agreement, such as travel expenses incurred in connection with the investigation and monitoring of our investments. In the event of a debt restructuring or extinguishment, we may incur a loss comprised of deferred financing costs which may cause actual expenses to exceed those amounts projected in the table.

(8) “Total annual expenses” is presented as a percentage of net assets attributable to common stockholders, because the holders of shares of our common stock (and not the holders of our debt securities or preferred stock, if any) bear all of our fees and expenses. The indirect expenses associated with the Company’s CLO equity investments are not included in the fee table presentation, but if such expenses were included in the fee table presentation then OXSQ’s total annual expenses would have been 1316.5667%.

(9) Totals may not sum due to rounding.

Example

The following example demonstrates the projected dollar amount of total cumulative expenses that would be incurred over various periods with respect to a hypothetical investment in our common stock. In calculating the following expense amounts, we have assumed that our annual operating expenses would remain at the levels set forth in the table above.

	1 Year		3 Years		5 Years		10 Years
You would pay the following expenses on a $1,000 investment, assuming a 5% annual return(1)	$	81105	$	~~235~~296	$	~~380~~466	$	~~702~~812
You would pay the following expenses on a $1,000 investment, assuming a 5% annual return entirely from realized gains(2)	$	90114	$	~~260~~318	$	~~416~~496	$	~~750~~846

____________

(1) Assumes that we will not realize any capital gains computed net of all realized capital losses and unrealized capital depreciation.

(2) Assumes no unrealized capital depreciation and a 5% annual return resulting entirely from net realized capital gains and not otherwise deferrable under the terms of the Investment Advisory Agreement and therefore subject to the incentive fee based on capital gains. Because our investment strategy involves investments that generate primarily current income, we believe that a 5% annual return resulting entirely from net realized capital gains is unlikely.

The example and the expenses in the tables above should not be considered a representation of our future expenses, and actual expenses may be greater or less than those shown. Moreover, while the example assumes, as required by the SEC, a 5.0% annual return, our performance will vary and may result in a return greater or less than 5.0%. The income incentive fee under our Investment Advisory Agreement, which, assuming a 5% annual return, would either not be payable or would have an insignificant impact on the expense amounts shown above, is not included in the example. If we achieve sufficient returns on our investments to trigger an income incentive fee of a material amount, our expenses, and returns to our investors, would be higher. In addition, while the example assumes reinvestment of all distributions at net asset value, participants in our distribution reinvestment plan may receive shares valued at the market price in effect at that time. This price may be at, above or below net asset value. See “Distribution Reinvestment Plan” for additional information regarding our distribution reinvestment plan.

Item 6. [Reserved]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about Oxford Square Capital Corp., our current and prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” and variations of these words and similar expressions are intended to identify forward-looking statements. The forward-looking statements contained in this Annual Report on Form 10-K involve risks and uncertainties, including statements as to:

• our future operating results, including our ability to achieve objectives;

• our business prospects and the prospects of our portfolio companies;

• the impact of investments that we expect to make;

• our contractual arrangements and relationships with third parties;

• the dependence of our future success on the general economy and its impact on the industries in which we invest;

• the ability of our portfolio companies and CLO investments to achieve their objectives;

• the valuation of our investments in portfolio companies and CLOs, particularly those having no liquid trading market;

• market conditions and our ability to access alternative debt markets and additional debt and equity capital;

• our expected financings and investments;

• the adequacy of our cash resources and working capital;

• the timing of cash flows, if any, from the operations of our portfolio companies and CLO investments; and

• the ability of our investment adviser to locate suitable investments for us and monitor and administer our investments.

These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation:

• angeneral economic, ~~downturn~~political ~~could~~and ~~impair~~industry ~~our~~trends ~~portfolio companies’~~ and ~~CLO~~other ~~investments’~~external ~~ability~~factors, toincluding ~~continue~~government toshutdowns ~~operate,~~and ~~which~~uncertainty ~~could~~surrounding ~~lead to~~ the ~~loss~~financial ofand ~~some~~political orstability ~~all~~ of ~~our~~the ~~investments~~United inStates ~~such portfolio companies~~ and ~~CLO~~other ~~investments~~countries;

• a contraction of available credit and/or an inability to access the equity markets could impair our lending and investment activities;

• interest rate volatility could adversely affect our results, particularly because we use leverage as part of our investment strategy;

• inflation and its impact on our investment activities and the industries in which we invest;

• currency fluctuations could adversely affect the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars;

• the impact of information technology system failures, data security breaches, data privacy compliance, network disruptions and cybersecurity attacks; and

• the risks, uncertainties and other factors we identify in Item 1A. Risk Factors and elsewhere in this Annual Report on Form 10-K and in our filings with the SEC.

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. Important assumptions include our ability to originate new loans and investments, certain margins and levels of profitability and the availability of additional capital. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this annual report on Form 10-K should not be regarded as a representation by us that our plans and objectives will be achieved. These risks and uncertainties include those described or identified in Item 1A. Risk Factors and elsewhere in this annual report on Form 10-K. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this annual report on Form 10-K.

The following analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto contained elsewhere in this Form 10-K.

OVERVIEW

Our investment objective is to maximize our portfolio’s total return. Our primary focus is to seek an attractive risk-adjusted total return by investing primarily in corporate debt securities and, to a lesser extent, in CLOs, which are structured finance investments that own corporate debt securities. CLO investments may also include warehouse facilities, which are early-stage CLO vehicles intended to aggregate loans that may be used to form the basis of a traditional CLO vehicle. We operate as a closed-end, non-diversified management investment company and have elected to be regulated as a BDC under the 1940 Act. We have elected to be treated for tax purposes as a RIC, under the Code.

Our investment activities are managed by Oxford Square Management, a registered investment adviser under the Investment Advisers Act of 1940, as amended. Oxford Square Management is owned by Oxford Funds, its managing member, and a related party, Charles M. Royce, a member of our Board who holds a minority, non-controlling interest in Oxford Square Management. Jonathan H. Cohen, our Chief Executive Officer, and Saul B. Rosenthal, our President, are the controlling members of Oxford Funds. Under the Investment Advisory ~~Agreement, we have agreed to pay Oxford Square Management an annual Base Fee calculated on gross assets,~~

Agreement, we have agreed to pay Oxford Square Management an annual Base Fee calculated on gross assets, and an incentive fee based upon our performance. Under the Administration Agreement, we have agreed to pay or reimburse Oxford Funds, as administrator, for certain expenses incurred in operating the Company. Our executive officers and directors, and the executive officers of Oxford Square Management and Oxford Funds, serve or may serve as officers and directors of entities that operate in a line of business similar to our own. Accordingly, they may have obligations to investors in those entities, the fulfillment of which might not be in the best interests of us or our stockholders.

We generally expect to invest between $5 million and $5025 million in each of our portfolio companies, although this investment size may vary proportionately as the size of our capital base changes and market conditions warrant. We expect that our investment portfolio will be diversified among a large number of investments with few investments, if any, exceeding 5.0% of the total portfolio. As of December 31, ~~2024~~2025, our debt investments ~~(excluding debt investments on non-accrual status)~~ had stated interest rates of between 76.6147% and 1312.1397% and maturity dates of between 3 and 8291 months. In addition, our total portfolio had a weighted average annualized yield on debt investments of approximately 1514.7653% as of December 31, ~~2024~~2025.

The weighted average annualized yield of our debt investments is not the same as a return on investment for our stockholders but, rather, relates to a portion of our investment portfolio and is calculated before the payment of all of our fees and expenses. The weighted average annualized yield was computed using the effective interest rates as of December 31, ~~2024~~2025, including accretion of OID and excluding any debt investments on non-accrual status. There can be no assurance that the weighted average annualized yield will remain at its current level.

We have historically borrowed funds to make investments and may continue to borrow funds to make investments. As a result, we are exposed to the risks of leverage, which may be considered a speculative investment technique. Borrowings, also known as leverage, magnify the potential for gain and loss on amounts invested and therefore increase the risks associated with investing in our securities. In addition, the costs associated with our borrowings, including any increase in the management fee payable to Oxford Square Management, will be borne by our common stockholders.

In addition, as a BDC under the 1940 Act, we are required to make available significant managerial assistance, for which we may receive fees, to our portfolio companies. This assistance could involve, among other things, monitoring the operations of our portfolio companies, participating in board and management meetings, consulting with and advising officers of portfolio companies and providing other organizational and financial guidance. These fees would be generally non-recurring, however in some instances they may have a recurring component. We have received no fee income for managerial assistance to date.

To the extent possible, we will generally seek to invest in loans that are collateralized by a security interest in the borrower’s assets or guaranteed by a principal to the transaction. Interest payments, if not deferred, are normally payable quarterly with most debt investments having scheduled principal payments on a monthly or quarterly basis. When we receive a warrant to purchase stock in a portfolio company, the warrant will typically have a nominal strike price, and will entitle us to purchase a modest percentage of the borrower’s stock.

PORTFOLIO COMPOSITION AND INVESTMENT ACTIVITY

The total fair value of our investment portfolio was approximately $~~260~~251.9 7 million and $~~266~~260.9 million as of December 31, ~~2024~~2025 and December 31, ~~2023~~2024, respectively. The decrease in the value of investments during the year ended December 31, ~~2024~~2025 was due primarily to repayments of principal of approximately $7547.0 6 million, sales of securities totaling approximately $1110.8 7 million, ~~and~~ realized losses of approximately $9616.28 million, ~~partially~~and ~~offset by a net change in~~ unrealized ~~appreciation~~depreciation ~~on our investment portfolio~~ of ~~approximately~~ $7524.7 3 million (which incorporates reductions to CLO equity cost value of $137.0 7 million), ~~and~~partially offset by purchases of investments of approximately $~~112~~92.2 1 million. Refer to the table below, which reconciles the investment portfolio for the year ended December 31, ~~2024~~2025 and the year ended December 31, ~~2023~~2024.

A reconciliation of the investment portfolio for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 follows:

($ in millions)	December 31,~~2024~~2025			December 31,~~2023~~2024
Beginning investment portfolio	$	~~266~~260.9		$	~~314~~266.79
Portfolio investments acquired		~~112~~92.21			11112.72
Debt repayments		(7547.06	)		(1575.80	)
Sales of securities		(1110.87	)		(1911.68	)
Reductions to CLO equity cost value(1)		(137.07	)		(1513.30	)
Accretion of discounts on investments		12.79			1.17
PIK income		03.52			—0.5
Net change in unrealized appreciation/(depreciation) on investments		75(24.73	)		775.17
Net realized losses on investments		(9616.28	)		(1796.12	)
Ending investment portfolio(2)	$	~~260~~251.97		$	~~266~~260.9

____________

(1) For the year ended December 31, ~~2024~~2025, the reductions to CLO equity cost value of approximately $137.0 7 million represented the distributions received, or entitled to be received, on our investments held in CLO equity subordinated and income notes of approximately $2824.4 1 million, plus the amortization of cost on our CLO fee notes of approximately $7157,000, less the effective yield interest income recognized on our CLO equity subordinated and income notes of approximately $1516.4 5 million. For the year ended December 31, ~~2023~~2024, the reductions to CLO equity cost value of approximately $1513.3 0 million represented the distributions received, or entitled to be received, on our investments held in CLO equity subordinated and income notes of approximately $3228.0 4 million, plus the amortization of cost on our CLO fee notes of approximately $~~123~~71,000, less the effective yield interest income recognized on our CLO equity subordinated and income notes of approximately $1615.8 4 million.

(2) Totals may not sum due to rounding.

During the year ended December 31, ~~2024~~2025, we purchased approximately $~~112~~92.2 1 million in portfolio investments, including additional investments of approximately $3130.0 9 million in existing portfolio companies and approximately $8161.2 million in new portfolio companies. During the year ended December 31, ~~2023~~2024, we purchased approximately $11112.7 2 million in portfolio investments, including additional investments of approximately $331.5 0 million in existing portfolio companies and approximately $881.2 million in new portfolio companies.

In certain instances, we receive payments based on scheduled amortization of the outstanding balances. In addition, we receive principal repayments of some of our investments prior to their scheduled maturity date. The frequency or volume of these repayments may fluctuate significantly from period to period.

For the years ended December 31, ~~2024~~2025 and December 31, ~~2023~~2024, we had loan principal repayments of approximately $7547.0 6 million and approximately $1575.8 0 million, respectively. The repayments during the year ended December 31, ~~2024~~2025 were as follows ($ in millions):

Portfolio Company	~~2024Repayments~~2025Repayments
Global Tel Link Corp.	$	16.9
Convergint Technologies, LLC	$	11.0
Access CIG, LLC		1610.92
Viant Medical Holdings, Inc.		14.5
Nielsen Consumer, LLC		10.0
Affinion Insurance Solutions, Inc. (f/k/a AIS Intermediate, LLC)		14.3
Pro Mach Inc.		6.0
CLEAResult Consulting, Inc.		7.7
Kaman Corporation		6.0
Convergint Technologies, LLC		2.4
Verifone, Inc. (f/k/a Verifone Systems, Inc.)		1.7
McAfee Enterprise, LLC (f/k/a Magenta Buyer, LLC)		0.7
Forta, LLC (f/k/a Help/Systems Holdings, Inc.)		1.2
Alvaria, Inc. (f/k/a Aspect Software, Inc.)		0.6
Net all others		1.5
Dodge Data & Analytics, LLC		0.3
Total repayments	$	47.6
HealthChannels, Inc. (f/k/a ScribeAmerica, LLC)		0.2
Net all others		0.5
Total repayments	$	75.0

Portfolio activity also reflects sales of securities in the amounts of approximately $1110.87 million and approximately $1911.68 million for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 respectively. The sales during the year ended December 31, ~~2024~~2025 were as follows ($ in millions):

Portfolio Company	~~2024Sales~~2025Sales
Quest Software, Inc.	$	7.0
HealthChannels, Inc. (f/k/a ScribeAmerica, LLC)	$	8.2
Veritas USA, Inc.		3.4
Quest Software, Inc.		1.6
Octagon Investment Partners 49, Ltd.		1.4
Alvaria, Inc. (f/k/a Aspect Software, Inc.)		1.0
Total sales	$	11.8
Total sales(1)	$	10.7

As of December 31, 2024, we had investments in debt securities of, or loans to, 21 portfolio companies, with a fair value of approximately $150.7 million, CLO equity investments of approximately $104.6 million and equity and other investments of approximately $5.6 million. As of December 31, 2023, we had investments in debt securities of, or loans to, 19 portfolio companies, with a fair value of approximately $179.5 million, CLO equity investments of approximately $82.2 million and equity and other investments of approximately $5.3 million.

The following table indicates the quarterly portfolio investment activity for the years ended December 31, 2024 and 2023:

($ in millions)	Purchases ofInvestments		Repayments ofPrincipal		Sales ofInvestments		Reductions toCLO EquityCost(1)
Quarter ended
December 31, 2024	$	25.1	$	15.0	$	7.0	$	3.3
September 30, 2024		47.7		27.9		—		2.5
June 30, 2024		27.3		14.3		3.4		6.3
March 31, 2024		12.1		17.9		1.4		0.8
Total(2)	$	112.2	$	75.0	$	11.8	$	13.0
December 31, 2023	$	3.5	$	0.8	$	3.7	$	2.8
September 30, 2023		—		14.2		1.9		5.1
June 30, 2023		—		0.4		13.9		4.4
March 31, 2023		8.2		0.3		—		3.0
Total(2)	$	11.7	$	15.8	$	19.6	$	15.3

____________

(1) Total may not sum due to rounding.

As of December 31, 2025, we had investments in debt securities of, or loans to, 19 portfolio companies, with a fair value of approximately $147.3 million, CLO equity investments of approximately $95.1 million, and equity and other investments of approximately $9.4 million. As of December 31, 2024, we had investments in debt securities of, or loans to, 21 portfolio companies, with a fair value of approximately $150.7 million, CLO equity investments of approximately $104.6 million and equity and other investments of approximately $5.6 million.

The following table indicates the quarterly portfolio investment activity for the years ended December 31, 2025 and 2024:

($ in millions)	Purchases of Investments		Repayments of Principal		Sales of Investments		Reductions to CLO Equity Cost(1)
Quarter ended
December 31, 2025	$	18.0	$	7.4	$	—	$	2.5
September 30, 2025		58.1		31.3		—		1.7
June 30, 2025		—		0.2		—		1.8
March 31, 2025		16.0		8.7		10.7		1.7
Total	$	92.1	$	47.6	$	10.7	$	7.7

December 31, 2024	$	25.1	$	15.0	$	7.0	$	3.3
September 30, 2024		47.7		27.9		—		2.5
June 30, 2024		27.3		14.3		3.4		6.3
March 31, 2024		12.1		17.9		1.4		0.8
Total(2)	$	112.2	$	75.0	$	11.8	$	13.0

____________

(1) Represents reductions to CLO equity cost value (representing distributions received, or entitled to be received, in excess of effective yield interest income and amortized cost adjusted CLO fee note income).

(2) Totals may not sum due to rounding.

The following table shows the fair value of our portfolio of investments by asset class as of December 31, ~~2024~~2025 and ~~2023~~2024:

($ in millions)	December 31, ~~2024~~2025				December 31, ~~2023~~2024
	Investments atFair Value		Percentage ofTotal Portfolio		Investments atFair Value		Percentage ofTotal Portfolio
Senior Secured Notes	$	~~150~~147.73	5758.85	%	$	~~179~~150.57	6757.28	%
CLO Equity		~~104~~95.61	4037.18	%		82104.26	3040.81	%
Equity and Other Investments		59.64	23.17	%		5.36	2.01	%
Total(1)	$	~~260~~251.97	100.0	%	$	~~266~~260.9	100.0	%

____________

(1) Totals may not sum due to rounding.

Qualifying assets must represent at least 70% of the Company’s total assets at the time of acquisition of any additional non-qualifying assets. As of December 31, ~~2024~~2025 and ~~2023~~2024, we held qualifying assets that represented 6368.8% and 7063.68%, respectively, of the total assets. No additional non-qualifying assets were acquired during the periods, if any, when qualifying assets were less than 70% of the total assets.

The following table shows our portfolio of investments by industry at fair value, in millions, as of December 31, ~~2024~~2025 and ~~2023~~2024:

	December 31, 2024				December 31, 2023
	December 31, 2025				December 31, 2024
	Investments atFair Value		Percentage ofFair Value		Investments atFair Value		Percentage ofFair Value
	($ in millions)				($ in millions)
Structured finance(1)	$	~~104~~95.61	4037.27	%	$	82104.26	3040.82	%
Business services		45.5	17.4	%		43.0	16.1	%
Software		43.7	17.4	%		42.0	16.1	%
Software		42.0	16.1	%		66.0	24.7	%
Business services		32.2	12.8	%		45.5	17.4	%
Healthcare		1822.91	78.28	%		2818.49	~~10.~~7.2	%
Industrials		1619.09	67.19	%		—16.0	—6.1	%
Food and Beverage		10.0	3.8	%		—	—	%
Telecommunication services		11.0	4.4	%		7.2	2.8	%
Telecommunication Services		7.2	2.8	%		20.9	7.8	%
Food and beverage		9.8	3.9	%		10.0	3.8	%
Aerospace and Defense		6.0	2.3	%		—	—	%
Materials		8.9	3.5	%		6.0	2.3	%
Materials		6.0	2.3	%		—	—	%
IT consulting		5.0	2.0	%		4.6	1.8	%
IT Consulting		4.6	1.8	%		5.3	2.0	%
Artificial intelligence		4.0	1.6	%		—	—	%
Diversified Insurance		—	—	%		13.9	5.2	%
Aerospace and defense		—	—	%		6.0	2.3	%
Utilities		—	—	%		7.2	2.7	%
Total(2)	$	251.7	100.0	%	$	260.9	100.0	%
Total(2)	$	260.9	100.0	%	$	266.9	100.0	%

____________

(1) Reflects our equity investments in CLOs as of December 31, ~~2024~~2025 and December 31, ~~2023~~2024, respectively.

(2) Totals may not sum due to rounding.

The following tables present the top ten industries (based upon Moody’s industry classifications) of the aggregate holdings of the CLOs included in our portfolio, based on par value, as of December 31, ~~2024~~2025 and December 31, ~~2023~~2024.

Top Ten Industries	December 31,~~2024~~ 2025
High tech industries	1211.09	%
Healthcare & pharmaceuticals	10.3	%
Business services	10.7	%
Banking, finance, insurance & real estate	10.15	%
Business services	9.7	%
Healthcare & pharmaceuticals	9.7	%
Hotels, gaming & leisure	45.93	%
Media: broadcasting & subscription	4.2	%
Beverage, food & tobacco	4.0	%
Construction & building	43.15	%
Chemicals, plastics & rubber	4.0	%
Consumer services	3.4	%
Telecommunications	3.9	%
Chemicals, plastics & rubber	3.2	%
Consumer services	3.5	%
Aerospace & defense	3.1	%
Total	6665.73	%

Top Ten Industries	December 31,~~2023~~ 2024
High tech industries	1112.30	%
Healthcare & pharmaceuticals	10.13	%
Banking, finance, insurance & real estate	910.91	%
Business services	9.47	%
Media: broadcasting & subscription	5.6	%
Hotels, gaming & leisure	4.9	%
Telecommunications	4.9	%
Media: broadcasting & subscription	4.2	%
Hotels, gaming & leisure	4.4	%
Construction & building	4.1	%
Chemicals, plastics & rubber	34.90	%
Beverage, food & tobacco	3.7	%
Telecommunications	3.9	%
Construction & building	3.5	%
Consumer services	3.5	%
Total	66.7	%

PORTFOLIO GRADING

We have adopted a credit grading system to monitor the quality of our debt investment portfolio. Equity securities are not graded. As of December 31, ~~2024~~2025 and ~~2023~~2024 our portfolio had a weighted average grade of 2.32 and 2.3, respectively, based upon the fair value of the debt investments in the portfolio.

At December 31, ~~2024~~2025 and ~~2023~~2024, our debt investment portfolio was graded as follows:

($ in millions)		December 31, 2025
Grade	Summary Description	Principal Value		Percentage of Debt Portfolio		Portfolio at Fair Value		Percentage of Debt Portfolio
1	Company is ahead of expectations and/or outperforming financial covenant requirements of the specific tranche and such trend is expected to continue.	$	—	—	%	$	—	—	%
2	Full repayment of the outstanding amount of OXSQ’s cost basis and interest is expected for the specific tranche.		129.1	68.7	%		123.2	83.7	%
3	Closer monitoring is required. Full repayment of the outstanding amount of OXSQ’s cost basis and interest is expected for the specific tranche.		58.9	31.3	%		24.1	16.3	%
4	A loss of interest income has occurred or is expected to occur and, in most cases, the investment is placed on non-accrual status. Full repayment of the outstanding amount of OXSQ’s cost basis is expected for the specific tranche.		—	—	%		—	—	%
5	Full repayment of the outstanding amount of OXSQ’s cost basis is not expected for the specific tranche and the investment is placed on non-accrual status		—	—	%		—	—	%
	Total	$	188.0	100.0	%	$	147.3	100.0	%

($ in millions)		December 31, 2024
Grade	Summary Description	Principal Value		Percentage of Debt Portfolio		Portfolio at Fair Value		Percentage of Debt Portfolio
1	Company is ahead of expectations and/or outperforming financial covenant requirements of the specific tranche and such trend is expected to continue.	$	—	—	%	$	—	—	%
2	Full repayment of the outstanding amount of OXSQ’s cost basis and interest is expected for the specific tranche.		117.5	58.2	%		112.2	74.5	%
3	Closer monitoring is required. Full repayment of the outstanding amount of OXSQ’s cost basis and interest is expected for the specific tranche.		82.0	40.6	%		38.0	25.2	%
4	A loss of interest income has occurred or is expected to occur and, in most cases, the investment is placed on non-accrual status. Full repayment of the outstanding amount of OXSQ’s cost basis is expected for the specific tranche.		—	—	%		—	—	%
5	Full repayment of the outstanding amount of OXSQ’s cost basis is not expected for the specific tranche and the investment is placed on non-accrual status		2.5	1.2	%		0.5	0.3	%
	Total	$	202.0	100.0	%	$	150.7	100.0	%

($ in millions)		December 31, 2023
Grade	Summary Description	Principal Value		Percentage of Debt Portfolio		Portfolio at Fair Value		Percentage of Debt Portfolio
1	Company is ahead of expectations and/or outperforming financial covenant requirements of the specific tranche and such trend is expected to continue.	$	—	—	%	$	—	—	%
2	Full repayment of the outstanding amount of OXSQ’s cost basis and interest is expected for the specific tranche.		175.5	60.4	%		134.5	74.9	%
3	Closer monitoring is required. Full repayment of the outstanding amount of OXSQ’s cost basis and interest is expected for the specific tranche.		72.3	24.8	%		43.3	24.1	%
4	A loss of interest income has occurred or is expected to occur and, in most cases, the investment is placed on non-accrual status. Full repayment of the outstanding amount of OXSQ’s cost basis is expected for the specific tranche.		—	—	%		—	—	%
5	Full repayment of the outstanding amount of OXSQ’s cost basis is not expected for the specific tranche and the investment is placed on non-accrual status.		42.9	14.8	%		1.7	1.0	%
	Total	$	290.7	100.0	%	$	179.5	100.0	%

We expect that a portion of our investments will be in the Grades 3, 4 or 5 categories from time to time, and, as such, we will be required to work with troubled portfolio companies to improve their business and protect our investment. The number and amount of investments included in Grade 3, 4 or 5 may fluctuate from year to year.

RESULTS OF OPERATIONS

Set forth below is a comparison of our results of operations for the years ended December 31, ~~2024~~2025 and ~~2023~~2024. For information regarding results of operations for the year ended December 31, ~~2022~~2023, refer to Part II Item 7 in our Form 10-K for the year ended December 31, ~~2023~~2024, as filed with the SEC on March 195, ~~2024~~2025, which is incorporated by reference herein.

Investment Income

The following table sets forth the components of investment income for the years ended December 31, ~~2024~~2025 and ~~2023~~2024:

	December 31,2024		December 31,2023
	Year Ended December 31, 2025		Year Ended December 31, 2024
Interest Income
Interest income
Stated interest income	$	2215,~~453~~344,~~772~~666	$	3222,~~434~~453,~~732~~772
PIK interest income		~~462~~2,~~883~~853,987		—462,883
Original issue discount and market discount income		12,~~688~~863,~~134~~204		1,~~094~~688,~~874~~134
Discount income derived from unscheduled remittances at par		~~324~~29,~~498~~368		62324,~~560~~498
Total interest income	$	2421,~~929~~091,~~287~~225	$	3324,~~592~~929,~~166~~287
Income from securitization vehicles and investments	$	1516,~~403~~452,~~586~~752	$	1615,~~796~~403,~~699~~586
Other income
Fee letters	$	~~661~~536,~~281~~998	$	~~649~~661,~~260~~281
Money market fund income and all other fees		12,~~689~~257,~~051~~898		~~786~~1,~~056~~689,051
Total other income	$	2,~~350~~794,~~332~~896	$	12,~~435~~350,~~316~~332
Total investment income	$	4240,~~683~~338,~~205~~873	$	5142,~~824~~683,~~181~~205

The decrease in total investment income of approximately $92.13 million for the year ended December 31, ~~2024~~2025 from the year ended December 31, ~~2023~~2024 was largely due to a decrease of stated interest income from our debt investments (approximately $107.01 million) resulting from ~~multiple~~ restructurings and refinancings that occurred during the year ended December 31, ~~2024~~2025, ~~and~~ a decrease in floating interest rates, and lower average outstanding principal of debt investments. That decrease was partially offset by an increase in ~~money~~income ~~market~~from ~~fund~~securitization ~~income~~vehicles ~~from~~and ~~overnight~~investments ~~invested~~of ~~cash~~approximately ~~interest~~$1.0 million, ~~earned~~as well as an increase in other income of approximately $0.94 million.

The total principal outstanding on income producing debt investments as of December 31, ~~2024~~2025 and December 31, ~~2023~~2024 was approximately $~~199~~188.50 million and $~~247~~199.75 million, respectively. As of December 31, ~~2024~~2025, our income producing debt investments had stated interest rates of between 76.6147% and 1312.1397% and maturity dates of between 3 and 8291 months. As of December 31, ~~2023~~2024, our income producing debt investments had stated interest rates of between 97.2261% and 1613.0013% and maturity dates of between 03 and 7482 months. In addition, our total portfolio had a weighted average yield on debt investments of approximately 1514.7653% as of December 31, ~~2024~~2025, compared to a weighted average yield on debt investments of 1315.3076% as of December 31, ~~2023~~2024.

Operating Expenses

The following table sets forth the components of operating expenses for the years ended December 31, ~~2024~~2025 and ~~2023~~2024:

	December 31,2024		December 31,2023
	December 31, 2025		December 31, 2024
Interest expense	$	79,~~847~~244,~~320~~234	$	107,~~825~~847,~~877~~320
Base Fee		4,~~310~~184,~~484~~721		4,~~613~~310,~~664~~484
Professional fees		1,~~537~~557,~~434~~637		1,~~426~~537,~~098~~434
Compensation expense		~~746~~950,~~762~~164		~~825~~746,~~226~~762
General and administrative		~~597~~615,~~883~~660		~~638~~597,~~350~~883
Director’s fees		~~417~~408,500		~~429~~417,500
Insurance		308,552		329,892
Excise tax		354,957		216,528
Transfer agent and custodian fees		260,330		246,562
Insurance		267,450		308,552
Excise Tax		216,528		1,423,686
Transfer agent and custodian fees		162,626		260,330
Net Investment Income Incentive Fees		—		3,705,387
Total operating expenses	$	17,745,949	$	16,242,793
Total operating expenses	$	16,242,793	$	24,464,242

Total operating expenses for the year ended December 31, ~~2024~~2025 ~~decreased~~increased by approximately $81.25 million compared to the year ended December 31, ~~2023~~2024. The ~~decrease~~increase in ~~2024~~2025 is attributable primarily to ~~lower~~higher ~~Net Investment Income Incentive Fees, excise tax, and~~ interest expense.

Interest expense ~~decreased~~increased by approximately $31.04 million in ~~2024~~2025 compared to ~~2023. The decrease in~~ 2024 ~~was due to the full paydown of the 6~~.~~50%~~ ~~Unsecured Notes throughout 2023.~~ The aggregate accrued interest on existing debt which remained payable as of December 31, ~~2024~~2025 and ~~2023~~2024 was approximately $1.7 million and $1.2 million, respectively.

The Base Fee decreased by approximately $0.31 million infor ~~2024~~the year ended December 31, 2025 compared to ~~2023~~the year ended December 31, 2024, due to lower average adjusted gross assets in ~~2024~~2025. The Base Fee which remained payable to Oxford Square Management as of December 31, ~~2024~~2025 and ~~2023~~2024 was approximately $1.20 million and $1.02 million, respectively.

Compensation expense was approximately $~~747~~950,000 for the year ended December 31, ~~2024~~2025, compared to approximately $~~825~~747,000 for the year ended December 31, ~~2023,~~2024. ~~reflecting~~Compensation expense reflects the allocation of ~~compensation~~salaries ~~expenses~~ for the services of our Chief Financial Officer, accounting personnel, and other administrative support staff. As of December 31, ~~2024~~2025, ~~and~~there ~~2023~~was approximately $26,000 of compensation expense payable. As of December 31, 2024, there was no compensation expense payable.

General and administrative expenses, which consist primarily of market data services, listing fees, office supplies, facilities costs and other miscellaneous expenses were approximately $~~598~~616,000 for the year ended December 31, ~~2024~~2025 and ~~decreased~~increased by approximately $4018,000 from the year ended December 31, ~~2023~~2024. Office supplies, facilities costs and other expenses are allocated to us under the terms of the Administration Agreement.

There was no Net Investment Income Incentive Fee for the years ~~year~~ ended December 31, 2025 and 2024, primarily as a result of the Net Investment Income Incentive Fee being reduced as the result of the Total Return Requirement. ~~Net Investment Income Incentive Fees for the year ended December 31, 2023 were approximately $3.7 million.~~ The Net Investment Income Incentive Fee is calculated and payable quarterly in arrears based on the amount by which (x) the “Pre-Incentive Fee Net Investment Income” for the immediately preceding calendar quarter exceeds (y) the “Preferred Return Amount” for the calendar quarter. For this purpose, “Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income accrued during the calendar quarter minus our operating expenses for the quarter (including the Base Fee, expenses payable under the Administration Agreement with Oxford Funds, and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Refer to “Note 7. Related Party Transactions” in the notes to our financial statements.

The expense attributable to the capital gains incentive fee, as reported under GAAP, is calculated as if the Company’s entire portfolio had been liquidated at period end, and therefore is calculated on the basis of net realized and unrealized gains and losses at the end of each period. That expense (or the reversal of such an expense) related to that hypothetical liquidation of the portfolio (and assuming no other changes in realized or unrealized gains and losses) would only become payable to our investment adviser in the event of a complete liquidation of our portfolio

as of period end and the termination of the Investment Advisory Agreement on such date. For the years ended December 31, ~~2024~~2025 and ~~2023~~2024, no accrual was required as a result of the impact of accumulated net unrealized depreciation and net realized losses on our portfolio.

The amount of the Capital Gains Incentive Fee which will actually be payable is determined in accordance with the terms of the Investment Advisory Agreement and is calculated as of the end of each calendar year (or upon termination of the Investment Advisory Agreement). The terms of the Investment Advisory Agreement state that the Capital Gains Incentive Fee calculation is based on net realized gains, if any, offset by gross unrealized depreciation for the calendar year. No effect is given to gross unrealized appreciation in this calculation.

Realized and Unrealized Gains/Losses on Investments

For the year ended December 31, 2025, we recognized net realized losses on investments of approximately $16.8 million, which primarily represents sales and restructurings of senior secured notes.

For the year ended December 31, 2025, our net change in unrealized depreciation was approximately $24.3 million, comprised of approximately $2.0 million in gross unrealized appreciation, approximately $45.3 million in gross unrealized depreciation and approximately $19.0 million relating to the reversal of prior period net unrealized depreciation as investment gains and losses were realized. This includes net unrealized appreciation of approximately $7.7 million resulting from reductions to the cost value of our CLO equity investments representing the difference between distributions received, or entitled to be received, on our investments held in CLO equity subordinated notes and fee notes, of approximately $24.1 million and the effective yield interest income recognized on our CLO equity subordinated notes and the amortized cost adjusted income on our CLO equity fee notes of approximately $16.5 million.

The components of the net change in unrealized appreciation/(depreciation) during the year ended December 31, 2025 were as follows ($ in millions):

Portfolio Company	Changes in Unrealized Depreciation
Generate CLO 10, Ltd.	$	(4.0	)
Carlyle Global Market Strategies CLO 2021-6, Ltd.		(4.1	)
RSA Security, LLC		(4.1	)
Dryden 43 Senior Loan Fund		(4.2	)
OCP CLO 2024-37, Ltd.		(5.8	)
Net all other		(2.1	)
Total	$	(24.3	)

For the year ended December 31, 2024, we recognized net realized losses on investments of approximately $96.2 million, which primarily represents losses incurred upon the extinguishment of multiple reorganized and refinanced senior secured notes upon transfer into new reorganized/refinanced securities, as well as the write off of two senior secured notes which were previously on non-accrual status.

For the year ended December 31, 2024, our net change in unrealized appreciation was approximately $75.7 million, comprised of approximately $7.1 million in gross unrealized appreciation, approximately $17.1 million in gross unrealized depreciation and approximately $85.7 million relating to the reversal of prior period net unrealized depreciation as investment gains and losses were realized. This includes net unrealized appreciation of approximately $13.0 million resulting from reductions to the cost value of our CLO equity investments representing the difference between distributions received, or entitled to be received, on our investments held in CLO equity subordinated notes and fee notes, of approximately $28.4 million and the effective yield interest income recognized on our CLO equity subordinated notes and the amortized cost adjusted income on our CLO equity fee notes of approximately $15.3 million.

The components of the net change in unrealized appreciation/(depreciation) during the year ended December 31, 2024 were as follows ($ in millions):

Portfolio Company	Changes inUnrealizedAppreciation
Premiere Global Services, Inc.	$	21.3
ConvergeOne Holdings, Inc.		13.8
McAfee Enterprise, LLC (f/k/a Magenta Buyer, LLC)		10.5
Careismatic Brands, LLC		10.4
Dodge Data & Analytics, LLC		9.0
Net all other		10.7
Total	$	75.7

For the year ended December 31, 2023, we recognized net realized losses on investments of approximately $17.1 million, which primarily represents sales of multiple CLO equity investments.

For the year ended December 31, 2023, our net change in unrealized appreciation was approximately $7.1 million, composed of approximately $16.6 million in gross unrealized appreciation, approximately $28.7 million in gross unrealized depreciation and approximately $19.2 million relating to the reversal of prior period net unrealized depreciation as investment gains and losses were realized. This includes net unrealized appreciation of approximately $15.3 million resulting from reductions to the cost value of our CLO equity investments representing the difference between distributions received, or entitled to be received, on our investments held in CLO equity subordinated notes and fee notes, of approximately $32.0 million and the effective yield interest income recognized on our CLO equity subordinated notes and the amortized cost adjusted income on our CLO equity fee notes of approximately $16.7 million.

The components of the net change in unrealized appreciation/(depreciation) during the year ended December 31, ~~2023~~2024 were as follows ($ in millions):

Portfolio Company	Changes in Unrealized Appreciation~~/ (Depreciation)~~
Nassau 2019-I Ltd.	$	9.4
Premiere Global Services, Inc.	$	21.3
Telos CLO 2013-4, Ltd.		4.9
ConvergeOne Holdings, Inc.		13.8
THL Credit Wind River 2012-1 CLO, Ltd.		2.9
McAfee Enterprise, LLC (f/k/a Magenta Buyer, LLC)		10.5
Carlyle Global Market Strategies CLO 2021-6, Ltd.		2.7
Careismatic Brands, LLC		10.4
Global Tel Link Corp.		2.2
Dodge Data & Analytics, LLC		9.0
Alvaria, Inc. (f/k/a Aspect Software, Inc.)		(3.2	)
Net all other		10.7
Dodge Data & Analytics, LLC		(3.3	)
Total	$	75.7
ConvergeOne Holdings, Inc.		(3.5	)
Careismatic Brands, LLC		(6.2	)
Magenta Buyer, LLC (f/k/a McAfee Enterprise)		(6.3	)
Net all other		7.5
Total	$	7.1

Net Increase in Net Assets Resulting from Net Investment Income

Net investment income for the year ended December 31, ~~2024~~2025 was approximately $2622.46 million, compared to $2726.4 million for the year ended December 31, ~~2023~~2024. The change was primary the result of ~~lower~~higher operating expenses, ~~partially~~and ~~offset by~~ a decrease in investment income, as discussed above. For the year ended December 31, ~~2024~~2025, the net increase in net assets resulting from net investment income per common share was $0.4230 (basic and diluted), compared to $0.5142 (basic and diluted) for the year ended December 31, ~~2023~~2024, based on the weighted average common shares outstanding for the respective periods.

Net Decrease/Increase in Net Assets Resulting from Operations

Net ~~increase~~decrease in net assets resulting from operations for the year ended December 31, ~~2024~~2025 was approximately $518.97 million, compared to a net increase of $175.29 million for year ended December 31, ~~2023~~2024. The change year over year was largely due to approximately $2041.63 million of net realized and unrealized losses for the year ended December 31, ~~2024~~2025, compared to approximately $1020.16 million of net realized and unrealized losses for the year ended December 31, ~~2023~~2024, as discussed above. For the year ended December 31, ~~2024~~2025, the net ~~increase~~decrease in net assets resulting from operations per common share was $0.0925 (basic and diluted), compared to a net increase in net assets per common share of $0.3209 (basic and diluted) for the year ended December 31, ~~2023~~2024, based on the weighted average common shares outstanding for the respective periods.

LIQUIDITY AND CAPITAL RESOURCES

During the year ended December 31, ~~2024~~2025, cash and cash equivalents increased from approximately $534.79 million at the beginning of the period to approximately $3451.9 million at the end of the period. Net cash ~~provided~~used byin operating activities for the year ended December 31, ~~2024~~2025, consisting primarily of the items described in “— Results of Operations,” was approximately $2513.7 million, largely reflecting purchases of new investments of approximately $98.2 million, offset by repayments of principal of approximately $7547.06 million, proceeds from the sale of investments of approximately $1110.87 million and reductions to CLO equity cost value of approximately $137.07 million~~, partially offset by purchases of new investments of approximately $100~~.~~2 million.~~ During the year ended December 31, ~~2024~~2025, net cash provided by financing activities was approximately $330.57 million, reflecting the proceeds from issuance of common stock from our ATM program (net of underwriting fees and offering costs) of approximately $2934.28 million and net proceeds from the issuance of 7.75% Unsecured Notes of approximately $71.9 million, partially offset by the payment of distributions of approximately $31.3 million and principal repayment of 6.25% Unsecured Notes of approximately $44.8 million.

Contractual Obligations

We have certain obligations with respect to the investment advisory and administration services we receive. Refer to “— Overview”. We incurred approximately $4.32 million for the Base Fee and approximately $1.78 million for administrative services for the year ended December 31, ~~2024~~2025. Refer to “Note 7. Related Party Transactions” in the notes to our financial statements.

~~A summary of our significant contractual payment obligations is as follows as of December 31, 2024. Refer to “Note 5. Borrowings” in the notes to our financial statements.~~73

Contractual obligations (in millions)	PrincipalAmount		Payments Due by Period
			Less than1 year		1 – 3 years		3 – 5 years		More than5 years
Long-term debt obligations:
6.25% Unsecured Notes	$	44.8	$	—	$	44.8	$	—	$	—
5.50% Unsecured Notes		80.5		—		—		80.5		—
	$	125.3	$	—	$	44.8	$	80.5	$	—

A summary of our significant contractual payment obligations is as follows as of December 31, 2025. Refer to “Note 5. Borrowings” in the notes to our financial statements.

			Payments Due by Period
Contractual obligations (in millions)	Principal Amount		Less than 1 year		1 – 3 years		3 – 5 years		More than 5 years
Long-term debt obligations:
7.75% Unsecured Notes	$	74.8	$	—	$	—	$	74.8	$	—
5.50% Unsecured Notes		80.5		—		80.5		—		—
	$	155.3	$	—	$	80.5	$	74.8	$	—

Share Issuance and Repurchase Programs

On August 22, 2023, we entered into Amendment No. 1 to the Equity Distribution Agreement dated August 1, 2019 with Ladenburg Thalmann & Co. through which we may offer for sale, from time to time, up to $150.0 million of our common stock through an ATM offering. On August 16, 2024, we entered into an amended and restated equity distribution agreement (the “Amended and Restated Equity Distribution Agreement”) with Lucid Capital Markets, LLC and Ladenburg Thalmann & Co. Inc., as the sales agents, to add Lucid Capital Markets, LLC as an additional sales agent to the Amended and Restated Equity Distribution Agreement. We sold a total of 1015,~~132~~910,~~282~~780 shares of common stock pursuant to the ATM offering during the year ended December 31, ~~2024~~2025. The total amount of capital raised net of underwriting fees and offering costs was approximately $2934.28 million during the year ended December 31, ~~2024~~2025.

On October 30, 2025, the Board of Directors authorized a 12-month Share repurchase Program. Under the Share Repurchase Program, we may repurchase, during the 12-month period commencing on October 30, 2025, up to $25.0 million in the aggregate of our outstanding common stock in the open market. The timing, manner, price and amount of any share repurchases will be determined by us, in our discretion, based upon the evaluation of economic and market conditions, our stock price, applicable legal, contractual and regulatory requirements and other factors. The Share Repurchase Program is expected to be in effect until October 30, 2026, unless extended or until the aggregate repurchase amount has been expended. The Share Repurchase Program does not require us to repurchase any specific number of shares, and we cannot assure stockholders that any shares will be repurchased under the Share Repurchase Program. The Share Repurchase Program may be suspended, extended, modified or discontinued at any time. During the fiscal year ended December 31, 2025, we did not repurchase any shares of our common stock pursuant to the Share Repurchase Program.

Borrowings

In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, is at least 150% immediately after such borrowing. As of December 31, ~~2024~~2025, our asset coverage for borrowed amounts was approximately ~~227~~191%. As of December 31, ~~2023~~2024, our asset coverage for borrowed amounts was approximately ~~219~~227%.

The following are our outstanding principal amounts, carrying values and fair values of our borrowings as of December 31, ~~2024~~2025 and December 31, ~~2023~~2024. The fair value of the 65.2550% Unsecured Notes, 7.75% Unsecured Notes, and 56.5025% Unsecured Notes are based upon the closing price on the last day of the period. The 65.2550% Unsecured Notes and 57.5075% Unsecured Notes are listed on the NASDAQ Global Select Market (trading symbol “~~OXSQZ~~OXSQG” and “~~OXSQG~~OXSQH”, respectively). The 6.25% Unsecured Notes were formerly listed on the NASDAQ Global Select Market under the trading symbol “OXSQZ” until they were fully repaid and delisted on September 19, 2025.

($ in millions)	As of
	As of
	December 31, 2024						December 31, 2023
	December 31, 2025						December 31, 2024
	PrincipalAmount		CarryingValue		Fair Value		PrincipalAmount		CarryingValue		Fair Value
($ in millions)	PrincipalAmount		CarryingValue		Fair Value		PrincipalAmount		CarryingValue		Fair Value
6.25% Unsecured Notes	$	44.8	$	44.5	$	44.4	$	44.8	$	44.2	$	42.9
5.50% Unsecured Notes	$	80.5	$	79.5	$	77.8	$	80.5	$	79.1	$	74.7
5.50% Unsecured Notes		80.5		79.1		74.7		80.5		78.7		72.5
7.75% Unsecured Notes		74.8		72.1		76.2		—		—		—
Total(1)	$	125.3	$	123.6	$	119.1	$	125.3	$	123.0	$	115.4
6.25% Unsecured Notes		—		—		—		44.8	$	44.5	$	44.4
Total	$	155.3	$	151.6	$	154.0	$	125.3	$	123.6	$	119.1

____________

(1) Totals may not sum due to rounding.

The weighted average stated interest rate and weighted average maturity on all our debt outstanding as of December 31, ~~2024~~2025 were 56.7758% and 23.85 years, respectively, and as of December 31, ~~2023~~2024 were 5.77% and 32.8 years, respectively. The aggregate accrued interest which remained payable as of December 31, ~~2024~~2025, ~~and~~was ~~2023~~approximately $1.7 million. The aggregate accrued interest which remained payable as of December 31, 2024, was approximately $1.2 million.

The tables below summarize the components of interest expense for the years ended December 31, ~~2024~~2025 and ~~2023~~2024:

($ in thousands)	Year Ended December 31, 2024
	Year Ended December 31, 2025
	StatedInterestExpense		Amortizationof DeferredDebt IssuanceCosts		Loss onExtinguishment		Total
($ in thousands)	StatedInterestExpense		Amortizationof DeferredDebt IssuanceCosts		Loss onExtinguishment		Total(1)
6.25% Unsecured Notes	$	2,799.4	$	233.8		—		3,033.2
5.50% Unsecured Notes	$	4,427.5	$	385.5	$	—	$	4,813.0
5.50% Unsecured Notes		4,427.5		386.6		—		4,814.1
7.75% Unsecured Notes		2,317.3		228.8		—		2,546.0
Total	$	7,226.9	$	620.4	$	—	$	7,847.3
6.25% Unsecured Notes		1,741.5		143.7		166.1		2,051.3
Total(1)	$	8,486.2	$	758.0	$	166.1	$	9,410.4

($ in thousands)	Year Ended December 31, 2023
	Year Ended December 31, 2024
	StatedInterestExpense		Amortizationof DeferredDebt IssuanceCosts		Loss onExtinguishment		Total
($ in thousands)	StatedInterestExpense		Amortizationof DeferredDebt IssuanceCosts		Loss onExtinguishment		Total
6.50% Unsecured Notes	$	2,765.0	$	215.3	$	190.4	$	3,170.6
6.25% Unsecured Notes	$	2,799.4	$	233.8	$	—	$	3,033.2
6.25% Unsecured Notes		2,799.4		233.2		—		3,032.6
5.50% Unsecured Notes		4,427.5		386.6		—		4,814.1
5.50% Unsecured Notes		4,427.5		385.5		—		4,813.0
Total	$	7,226.9	$	620.4	$	—	$	7,847.3
Total	$	9,991.9	$	834.0	$	190.4	$	11,016.2

____________

(1) Totals may not sum due to rounding

Distributions

In order to qualify for tax treatment as a RIC, we are required, under Subchapter M of the Code, to distribute at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses to our stockholders on an annual basis.

We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of these distributions from time to time. In addition, we may be limited in our ability to make distributions due to the asset coverage requirements applicable to us as a BDC under the 1940 Act. If we do not distribute a certain percentage of our income annually, we will suffer adverse tax consequences, including possible loss of favorable RIC tax treatment. We cannot assure stockholders that they will receive any distributions.

To the extent our taxable earnings fall below the total amount of our distributions for that fiscal year, a portion of those distributions may be deemed a return of capital to our stockholders. Thus, the source of a distribution to our stockholders may be the original capital invested by the stockholder rather than our taxable ordinary income or capital gains. Stockholders should read any written disclosure accompanying a distribution payment carefully and should not assume that the source of any distribution is taxable ordinary income or capital gains. The final determination of the nature of our distributions can only be made upon the filing of our tax return. We have until October 15, ~~2025~~2026 to file our U.S. federal income tax return for the year ended December 31, ~~2024~~2025.

The following table reflects the cash distributions, including distributions reinvested, if any, per share that we have paid on our common stock since the beginning of the ~~2022~~2023 fiscal year through ~~2024~~2025:

Date Declared	Record Date	Payment Date	~~TotalDistributions~~Total Distributions			GAAP ~~netinvestmentincome~~Net Investment Income			Distributions ~~inexcess~~in Excess of/(~~less~~Less than) GAAP ~~netinvestmentincome~~Net Investment Income(1)
Fiscal 2025(1)
July 30, 2025	December 17, 2025	December 31, 2025	$	0.035		$	N/A		$	—
July 30, 2025	November 14, 2025	November 28, 2025		0.035			N/A			—
July 30, 2025	October 17, 2025	October 31, 2025		0.035			N/A			—
Total (Fourth Quarter 2025)				0.105			0.07			0.04
April 22, 2025	September 16, 2025	September 30, 2025		0.035			N/A		$	—
April 22, 2025	August 15, 2025	August 29, 2025		0.035			N/A			—
April 22, 2025	July 17, 2025	July 31, 2025		0.035			N/A			—
Total (Third Quarter 2025)				0.105			0.07			0.04
February 27, 2025	June 16, 2025	June 30, 2025		0.035			N/A			—
February 27, 2025	May 16, 2025	May 30, 2025		0.035			N/A			—
February 27, 2025	April 16, 2025	April 30, 2025		0.035			N/A			—
Total (Second Quarter 2025)				0.105			0.08			0.03
October 31, 2024	March 17, 2025	March 31, 2025		0.035			N/A			—
October 31, 2024	February 14, 2025	February 28, 2025		0.035			N/A			—
October 31, 2024	January 17, 2025	January 31, 2025		0.035			N/A			—
Total (First Quarter 2025)				0.105			0.09			0.02
Total (2025)			$	0.420	(1)	$	0.30	(4)	$	0.12	(4)
Fiscal 2024(1)
August 8, 2024	December 17, 2024	December 31, 2024	$	0.035		$	N/A		$	—
August 8, 2024	November 15, 2024	November 29, 2024		0.035			N/A			—
August 8, 2024	October 17, 2024	October 31, 2024		0.035			N/A			—
Total (Fourth Quarter 2024)				0.105			0.09			0.02
April 25, 2024	September 16, 2024	September 30, 2024		0.035			N/A		$	—
April 25, 2024	August 16, 2024	August 30, 2024		0.035			N/A			—
April 25, 2024	July 17, 2024	July 31, 2024		0.035			N/A			—
Total (Third Quarter 2024)				0.105			0.10			0.01
March 14, 2024	June 14, 2024	June 28, 2024		0.035			N/A			—
March 14, 2024	May 17, 2024	May 31, 2024		0.035			N/A			—
March 14, 2024	April 16, 2024	April 30, 2024		0.035			N/A			—
Total (Second Quarter 2024)				0.105			0.13			(0.02	)
November 2, 2023	March 15, 2024	March 29, 2024		0.035			N/A			—
November 2, 2023	February 15, 2024	February 29, 2024		0.035			N/A			—
November 2, 2023	January 17, 2024	January 31, 2024		0.035			N/A			—
Total (First Quarter 2024)				0.105			0.11			(0.01	)
Total (2024)			$	0.420	(12)	$	0.42	(4)	$	0.00	~~(4)~~
Fiscal 2023
August 3, 2023	December 15, 2023	December 29, 2023	$	0.035		$	N/A		$	—
August 3, 2023	November 16, 2023	November 30, 2023		0.035			N/A			—
August 3, 2023	October 17, 2023	October 31, 2023		0.035			N/A			—
Total (Fourth Quarter 2023)				0.105			0.13			(0.03	)
August 3, 2023(5)	September 15, 2023	September 29, 2023	$	0.120		$	N/A		$	—
April 25, 2023	September 15, 2023	September 29, 2023		0.035			N/A			—
April 25, 2023	August 17, 2023	August 31, 2023		0.035			N/A			—
April 25, 2023	July 17, 2023	July 31, 2023		0.035			N/A			—
Total (Third Quarter 2023)				0.225			0.11			0.12
March 16, 2023	June 16, 2023	June 30, 2023	$	0.035		$	N/A		$	—
March 16, 2023	May 17, 2023	May 31, 2023		0.035			N/A			—
March 16, 2023	April 14, 2023	April 28, 2023		0.035			N/A			—
Total (Second Quarter 2023)				0.105			0.13			(0.03	)
October 20, 2022	March 17, 2023	March 31, 2023	$	0.035		$	N/A		$	—
October 20, 2022	February 14, 2023	February 28, 2023		0.035			N/A			—
October 20, 2022	January 17, 2023	January 31, 2023		0.035			N/A			—
Total (First Quarter 2023)				0.105			0.13			(0.03	)
Total (2023)			$	0.540		$	0.51	(2)(4)	$	0.03	(2)
Fiscal 2022
July 21, 2022	December 16, 2022	December 30, 2022	$	0.035		$	N/A		$	—
July 21, 2022	November 16, 2022	November 30, 2022		0.035			N/A			—
July 21, 2022	October 17, 2022	October 31, 2022		0.035			N/A			—
Total (Fourth Quarter 2022)				0.105			0.13			(0.03	)
April 21, 2022	September 16, 2022	September 30, 2022	$	0.035		$	N/A		$	—
April 21, 2022	August 17, 2022	August 31, 2022		0.035			N/A			—
April 21, 2022	July 15, 2022	July 29, 2022		0.035			N/A			—
Total (Third Quarter 2022)				0.105			0.11			(0.01	)
March 1, 2022	June 16, 2022	June 30, 2022	$	0.035		$	N/A		$	—
March 1, 2022	May 17, 2022	May 31, 2022		0.035			N/A			—
March 1, 2022	April 15, 2022	April 29, 2022		0.035			N/A			—
Total (Second Quarter 2022)				0.105			0.09			0.02

Date Declared	Record Date	Payment Date	~~TotalDistributions~~Total Distributions			GAAP ~~netinvestmentincome~~Net Investment Income			~~Distributions inexcess of/(less than)GAAP netinvestmentincome(1)~~	Distributions in Excess of/(Less than) GAAP Net Investment Income(1)
October 22, 2021	March 17, 2022	March 31, 2022	$	0.035		$	N/A		$	—
October 20, 2022	March 17, 2023	March 31, 2023	$	0.035		$	N/A			$	—
October 22, 2021	February 14, 2022	February 28, 2022		0.035			N/A			—
October 20, 2022	February 14, 2023	February 28, 2023		0.035			N/A				—
October 22, 2021	January 17, 2022	January 31, 2022		0.035			N/A			—
October 20, 2022	January 17, 2023	January 31, 2023		0.035			N/A				—
Total (First Quarter 2022)				0.105			0.09			0.02
Total (First Quarter 2023)				0.105			0.13				(0.03	)
Total (2022)			$	0.420	(3)	$	0.42		$	—
Total (2023)			$	0.540	(3)	$	0.51	(4)		$	0.03

____________

(1) The tax characterization of cash distributions for the year ended December 31, ~~2024~~2025 will not be known until the tax return for such year is finalized. For the year ended December 31, ~~2024~~2025, the amounts and sources of distributions reported are only estimates and are not being provided for U.S. tax reporting purposes. The final determination of the source of all distributions in ~~2024~~2025 will be made after year-end and the amounts represented may be materially different from the amounts disclosed in the final Form 1099-DIV notice. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Company’s investment performance and may be subject to change based on tax regulations.

(2) Cash distributions for the year ended December 31, ~~2023~~2024 represented 100% net investment income and therefore there was no tax return of capital.

(3) Cash distributions for the year ended December 31, ~~2022~~2023 represented 100% net investment income and therefore there was no tax return of capital.

(4) Totals may not sum due to rounding.

(5) Special distribution.

RELATED PARTIES

We have a number of business relationships with affiliated or related parties, including the following:

• We have entered into the Investment Advisory Agreement with Oxford Square Management. Oxford Square Management is controlled by Oxford Funds, its managing member. In addition to Oxford Funds, Oxford Square Management is owned by Charles M. Royce, a member of our Board, who holds a minority, non-controlling interest in Oxford Square Management as the non-managing member. Oxford Funds, as the managing member of Oxford Square Management, manages the business and internal affairs of Oxford Square Management. In addition, Oxford Funds provides us with office facilities and administrative services pursuant to the Administration Agreement.

• Messrs. Cohen and Rosenthal also currently serve as Chief Executive Officer and President, respectively, at Oxford Gate Management, the investment adviser to the Oxford Gate Funds and Oxford Bridge II, LLC. Oxford Funds is the managing member of Oxford Gate Management. In addition, Bruce L. Rubin serves as the Chief Financial Officer and Secretary, and Gerald Cummins serves as the Chief Compliance Officer, respectively, of Oxford Gate Management.

• Messrs. Cohen and Rosenthal currently serve as Chief Executive Officer and President, respectively, of Oxford Lane Capital Corp., a non-diversified closed-end management investment company that invests primarily in equity and junior debt tranches of CLO vehicles, and its investment adviser, Oxford Lane Management. Oxford Funds provides Oxford Lane Capital Corp. with office facilities and administrative services pursuant to an administration agreement and also serves as the managing member of Oxford Lane Management. In addition, Bruce L. Rubin serves as the Chief Financial Officer, Treasurer and Corporate Secretary of Oxford Lane Capital Corp. and Chief Financial Officer and Treasurer of Oxford Lane Management, and Mr. Cummins serves as the Chief Compliance Officer of Oxford Lane Capital Corp. and Oxford Lane Management.

• Messrs. Cohen and Rosenthal currently serve as Chief Executive Officer and President, respectively, of Oxford Park Income Fund, Inc., a non-diversified closed-end management investment company that invests primarily in equity and junior debt tranches of CLO vehicles, and its investment adviser, Oxford Park Management. Oxford Funds provides Oxford Park Income Fund, Inc. with office facilities and administrative services pursuant to an administration agreement and also serves as the managing member of Oxford Park Management. In addition, Bruce L. Rubin serves as the Chief Financial Officer, Treasurer and Corporate Secretary of Oxford Park Income Fund, Inc. and Chief Financial Officer and Treasurer of Oxford Park Management, and Mr. Cummins serves as the Chief Compliance Officer of Oxford Park Income Fund, Inc. and Oxford Park Management.

As a result, certain conflicts of interest may arise with respect to the management of our portfolio by Messrs. Cohen and Rosenthal on the one hand, and the obligations of Messrs. Cohen and Rosenthal to manage Oxford Lane Capital Corp., Oxford Park Income Fund, Inc., Oxford Bridge II, LLC and the Oxford Gate Funds, respectively, on the other hand.

Oxford Square Management, Oxford Lane Management, Oxford Park Management and Oxford Gate Management are subject to a written policy with respect to the allocation of investment opportunities among the Company, Oxford Lane Capital Corp., Oxford Park Income Fund, Inc., Oxford Bridge II, LLC and the Oxford Gate Funds. Where investments are suitable for more than one entity, the allocation policy generally provides that, depending on size and subject to current and anticipated cash availability, the absolute size of the investment as well as its relative size compared to the total assets of each entity, current and anticipated weighted average costs of capital, among other factors, an investment amount will be determined by the adviser to each entity. IfOn ~~the~~January ~~investment~~6, ~~opportunity~~2026, iswe ~~sufficient~~received ~~for~~an ~~each~~updated ~~entity~~form toof ~~receive its~~ co-investment ~~amount,~~exemptive ~~then~~relief ~~each~~from ~~entity~~the ~~receives~~SEC ~~the~~to ~~investment~~allow ~~amount;~~certain ~~otherwise,~~managed ~~the~~funds and investment ~~amount~~vehicles, iseach ~~reduced~~of ~~pro~~whose ~~rata.~~investment Onadviser ~~June 14,~~is ~~2017,~~Oxford ~~the~~Square ~~Securities~~Management ~~and~~or ~~Exchange~~an ~~Commission~~investment ~~issued~~adviser ~~the~~controlling, ~~Order~~controlled ~~permitting~~by ~~the~~or ~~Company~~under ~~and~~common ~~certain~~control ofwith ~~its~~Oxford ~~affiliates~~Square Management, to ~~complete~~participate in negotiated co-investment transactions inwhere ~~portfolio~~doing ~~companies,~~so ~~subject~~is toconsistent ~~certain~~with ~~conditions.~~regulatory ~~Subject~~requirements toand ~~satisfaction~~other ofpertinent ~~certain~~factors, ~~conditions~~and pursuant to the ~~Order,~~conditions of the ~~Company~~Co-Investment ~~and~~Order. ~~certain~~The ofCo-Investment ~~its~~Order, ~~affiliates~~which ~~are~~supersedes ~~now~~the ~~permitted,~~co-investment ~~together~~order ~~with~~issued ~~any~~to ~~future~~us ~~BDCs~~on June 14, ~~registered~~2017, ~~closed-end~~is ~~funds~~a ~~and~~new ~~certain~~form ~~private~~of ~~funds,~~co-investment ~~each~~exemptive ofrelief ~~whose~~that ~~investment~~adopts ~~adviser~~a ismore ~~the~~flexible ~~Company’s~~requirement ~~investment~~that ~~adviser~~allocations orbe an“fair ~~investment~~and ~~adviser~~equitable” ~~controlling,~~to ~~controlled~~us ~~by,~~and orthat ~~under~~Oxford ~~common~~Square ~~control~~Management ~~with~~considers the ~~Company’s~~interests ~~investment~~of ~~adviser,~~us toand ~~co-invest~~other inaffiliated ~~negotiated~~1940 ~~investment~~Act-regulated ~~opportunities~~funds ~~where~~that ~~doing~~rely soon ~~would~~the ~~otherwise~~Co-Investment beOrder ~~prohibited~~in ~~under~~allocations ~~the~~and ~~1940~~which ~~Act,~~minimizes ~~providing~~certain ~~the~~board ~~Company’s~~approval ~~stockholders~~requirements ~~with~~as ~~access~~compared to athe ~~broader~~prior ~~array~~form of co-investment ~~opportunities~~exemptive relief. ~~Pursuant~~Among toother things, under the Co-Investment Order, wethe ~~are~~terms, ~~permitted~~conditions, price, class of securities to ~~co-invest~~be purchased in respect of a particular investment, the date on which such investment ~~opportunities~~is ~~with~~to ~~our~~be ~~affiliates~~made ifand aany ~~“required~~registration ~~majority”~~rights ~~(as~~applicable ~~defined~~thereto, inmust ~~Section 57(o) of~~be generally the ~~1940~~same ~~Act)~~for ofus ~~our~~and ~~independent~~each ~~directors~~other ~~make~~participating ~~certain~~affiliated ~~conclusions~~entity. inThe ~~connection~~requirements ~~with~~of athe coCo-~~investment~~Investment ~~transaction,~~Order (including, ~~but~~any ~~not~~requirements ~~limited~~for ~~to,~~board ~~that~~approval (1thereunder) ~~the~~, ~~terms~~as ofwell ~~the~~as ~~potential~~other coregulatory requirements associated with us and other affiliated 1940 Act-~~investment~~regulated ~~transaction~~funds that rely on the Co-Investment Order, ~~including~~potentially will impact the ~~consideration~~investment toallocations beamong ~~paid~~participating entities (including, ~~are~~for ~~reasonable~~the ~~and~~avoidance ~~fair~~of todoubt, us) ~~and~~or ~~our~~otherwise ~~stockholders~~impact ~~and~~allocation doresults. ~~not~~Any ~~involve~~changes ~~overreaching~~to inthe ~~respect~~Co-Investment ofOrder us or ~~our~~the ~~stockholders~~rules onand ~~the~~other ~~part~~guidance ofpromulgated ~~any~~by ~~person~~the ~~concerned,~~SEC and ~~(2)~~ its staff under the ~~potential~~1940 ~~co-investment~~Act ~~transaction~~could isimpact ~~consistent~~allocations ~~with~~made ~~the~~available ~~interests~~to ofus ~~our~~and ~~stockholders~~thereby affect (and ispotentially ~~consistent~~decrease) ~~with~~the ~~our~~allocation ~~then-current~~made ~~investment~~to ~~objective~~us ~~and~~or ~~strategies~~otherwise impact the process for allocations in transactions in which we participate.

In the ordinary course of business, we may enter into transactions with portfolio companies that may be considered related party transactions. In order to ensure that we do not engage in any prohibited transactions with any persons affiliated with us, we have implemented certain policies and procedures whereby our executive officers screen each of our transactions for any possible affiliations between the proposed portfolio investment, us, companies controlled by us and our employees and directors. We will not enter into any agreements unless and until we are satisfied that doing so will not raise concerns under the 1940 Act or, if such concerns exist, we have taken appropriate actions to seek board review and approval or exemptive relief for such transaction. Our Board reviews these procedures on an annual basis.

We have also adopted a Code of Business Conduct and Ethics which applies to our senior officers, including our Chief Executive Officer and Chief Financial Officer, as well as all of our officers, directors and employees. Our Code of Business Conduct and Ethics requires that all employees and directors avoid any conflict, or the appearance of a conflict, between an individual’s personal interests and our interests. Pursuant to our Code of Business Conduct and Ethics, each employee and director must disclose any conflicts of interest, or actions or relationships that might give rise to a conflict. Our Audit Committee is charged with approving any waivers under our Code of Business Conduct and Ethics. As required by the NASDAQ Global Select Market corporate governance listing standards, the Audit Committee of our Board is also required to review and approve any transactions with related parties (as such term is defined in Item 404 of Regulation S-K).

Information concerning related party transactions is included in the financial statements and related notes, appearing elsewhere in this annual report on Form 10-K.

CRITICAL ACCOUNTING ESTIMATES

~~estimates,~~CRITICAL ~~including~~ACCOUNTING those relating to the valuation of our investment portfolio, are described below. Actual results could materially differ from those estimates. The critical accounting estimates should be read in conjunction with our risk factors as disclosed in “Item 1A. Risk Factors.” See Note 2 to our financial statements for the year ended December 31, 2024 for more information on our critical accounting policies.ESTIMATES

The preparation of financial statements and related disclosures in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) disclosure of contingent assets and liabilities at the date of the financial statements, and (iii) revenues and expenses during the periods reported. Our critical accounting estimates, including those relating to the valuation of our investment portfolio, are described below. Actual results could materially differ from those estimates. The critical accounting estimates should be read in conjunction with our risk factors as disclosed in “Item 1A. Risk Factors.” See Note 2 to our financial statements for the year ended December 31, 2025 for more information on our critical accounting policies.

Investment Valuation

We fair value our investment portfolio in accordance with the provisions of ASC 820, Fair Value Measurement and Disclosure (“ASC 820”) and Rule 2a-5 under the 1940 Act. Estimates made in the preparation of our financial statements include the valuation of investments and the related amounts of unrealized appreciation and depreciation of investments recorded. We believe that there is no single definitive method for determining fair value. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make.

ASC 820-10 clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820-10 also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

• Level 1, defined as observable inputs such as quoted prices in active markets;

• Level 2, which includes inputs such as quoted prices for similar securities in active markets and quoted prices for identical securities in markets that are not active; and

• Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

We consider the attributes of current market conditions on an on-going basis and have determined that due to the general illiquidity of the market for our investment portfolio, whereby little or no market data exists, substantially all of our fair valued investments are measured based upon Level 3 inputs as of December 31, ~~2024~~2025 and December 31, ~~2023~~2024.

Our Board of Directors determines the value of our investment portfolio each quarter. In connection with that determination, members of Oxford Square Management’s portfolio management team prepare a quarterly analysis of each portfolio investment using the most recent portfolio company financial statements, forecasts and other relevant financial and operational information. We may also engage a third-party valuation firm to provide assistance in valuing certain of our syndicated loans and bilateral investments, including related equity investments, although our Board of Directors ultimately determines the appropriate valuation of each such investment. Changes in fair value, as described above, are recorded in the statements of operations as net change in unrealized appreciation/depreciation.

Our corporate loan portfolio investments are valued using several valuation processes. The quantitative inputs and data points that determine which method to utilize to value any given investment include, but are not limited to:

• Bid/offer prices;

• Depth, which is defined as the number of securities firms that make a market in a respective corporate syndicated loan and contribute data on the corporate syndicated loan to market data providers;

• Liquidity score, which is a metric to help market participants ascertain their ability to exit a position within a given time frame and near a prevailing indicative price, which provides a benchmark of liquidity risk;

• Financial performance of the underlying portfolio company;

• Recent business developments;

• Covenant compliance; and

• Recent transactions.

In instances where secondary market data is limited, we may engage a third-party valuation firm to independently determine an estimate of fair value. Currently, we have a single company valued via a third-party valuation firm. This valuation method employs a waterfall method whereby the enterprise value (“EV”) of the company is estimated based on company financial performance inputs, such as EBITDA, and publicly traded comparable company multiples. The EV is then attributed to each debt tranche, preferred equity tranche, and common equity, in order of seniority, to arrive at a valuation for our holdings. Generally speaking, as estimated EV increases, the fair value of our investments will also increase. As market multiples and EBITDA increase, estimated EV will also increase.

In valuing our CLO debt and equity investments, we consider the indicative prices provided by a recognized industry pricing service as a primary source, and the implied yield of such prices, supplemented by actual trades executed in the market at or around period-end, as well as the indicative prices provided by brokers who arrange transactions in such investment vehicles. We also consider those instances in which the record date for an equity distribution payment falls on the last day of the period, and the likelihood that a prospective purchaser would require a downward adjustment to the indicative price representing substantially all of the pending distribution. Additional factors include any available information on other relevant transactions including firm bids and offers in the market and information resulting from bids-wanted-in-competition. In addition, we consider the operating metrics of the specific investment vehicle, including compliance with collateralization tests, defaulted and restructured securities, and payment defaults, if any. We calculate the fair value of certain CLO equity investments based upon the net present value of expected contractual payment streams discounted using estimated market yields for the equity tranche of the respective CLO vehicle. Oxford Square Management or the Valuation Committee may request an additional analysis by a third-party firm to assist in the valuation process of CLO investment vehicles. All information is presented to our Board for its determination of fair value of these investments.

Recently Issued Accounting Standards

See “Note 17. Recent Accounting Pronouncements” to our financial statements for a description of recent accounting pronouncements, including the impact on our financial statements.

RECENT DEVELOPMENTS

The following distributions payable to stockholders are shown below:

Date Declared	Record Dates	Payable Dates	Per Share ~~DistributionAmount~~Distribution Amount Declared
October 31, 2024	January 17, 2025	January 31, 2025	$0.035
October 30, 2025	January 16, 2026	January 30, 2026	$0.035
October 31, 2024	February 14, 2025	February 28, 2025	$0.035
October 30, 2025	February 13, 2026	February 27, 2026	$0.035
October 31, 2024	March 17, 2025	March 31, 2025	$0.035
October 30, 2025	March 17, 2026	March 31, 2026	$0.035
February 27, 2025	April 16, 2025	April 30, 2025	$0.035
February 26, 2026	April 16, 2026	April 30, 2026	$0.035
February 27, 2025	May 16, 2025	May 30, 2025	$0.035
February 26, 2026	May 15, 2026	May 29, 2026	$0.035
February 27, 2025	June 16, 2025	June 30, 2025	$0.035
February 26, 2026	June 16, 2026	June 30, 2026	$0.035

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are subject to financial market risks, including changes in interest rates. As of December 31, ~~2024~~2025, all ~~but one~~ of our variable rate investments were income producing. The variable rates are generally based upon the five-year U.S. Department of Treasury note, the Prime rate, or SOFR, and, in the case of our bilateral investments, are generally reset annually, whereas our non-bilateral investments generally reset quarterly. We expect that future debt investments will generally be made at variable rates. Many of the variable rate investments contain interest rate floors.

Interest rate risk is defined as the sensitivity of our current and future earnings to interest rate volatility, including relative changes in different interest rates, variability of spread relationships, the difference in re-pricing intervals between our assets and liabilities and the effect that interest rates may have on our cash flows. Changes in the general level of interest rates can affect our net interest income, which is the difference between the interest income earned on interest earning assets and our interest expense incurred in connection with our interest-bearing debt and liabilities. Changes in interest rates can also affect, among other things, our ability to acquire leveraged loans, high yield bonds and other debt investments and the value of our investment portfolio.

We may in the future hedge against interest rate fluctuations by using standard hedging instruments such as futures, options and forward contracts. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in the benefits of lower interest rates with respect to the investments in our portfolio with fixed interest rates.

Based on our Statements of Assets and Liabilities as of December 31, ~~2024~~2025, the following table shows the annualized impact on net investment income of hypothetical base rate changes in interest rates for our settled investments (considering interest rate floors for floating rate instruments), excluding CLO equity investments. The base interest rate case assumes the rates on our portfolio investments remain unchanged from the actual effective interest rates as of December 31, ~~2024~~2025. These hypothetical calculations are based on a model of the investments in our portfolio, held as of December 31, ~~2024~~2025, and are only adjusted for assumed changes in the underlying base interest rates. Although management believes that this analysis is indicative of our existing interest rate sensitivity, it does not adjust for changes in the credit quality, size and composition of our portfolio, and other business developments, including a change in the level of our borrowings, that could affect the net increase (or decrease) in net assets resulting from operations. Accordingly, no assurances can be given that actual results would not differ materially from the results under this hypothetical analysis.

Hypothetical Change in Floating Interest Rates	~~EstimatedPercentagechange~~Estimated ~~inInvestmentIncome~~Percentage Change in Investment Income
Up 300 basis points	1413.65	%
Up 200 basis points	9.80	%
Up 100 basis points	4.95	%
Down 100 basis points	(4.94	)%
Down 200 basis points	(98.67	)%
Down 300 basis points	(1412.47	)%

Item 8. Financial Statements and Supplementary Data

Index to Financial Statements

		Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)		F-2
Statements of Assets and Liabilities as of December 31, 2024 and December 31, 2023		F-4
Statements of Assets and Liabilities as of December 31, 2025 and December 31, 2024		F-4
Schedule of Investments as of December 31, 2024		F-5
Schedule of Investments as of December 31, 2025		F-5
Schedule of Investments as of December 31, 2023		F-13
Schedule of Investments as of December 31, 2024		F-11
Statements of Operations for the years ended December 31, 2024, December 31, 2023 and December 31, 2022		F-20
Statements of Operations for the years ended December 31, 2025, December 31, 2024 and December 31, 2023		F-19
Statements of Changes in Net Assets for the years ended December 31, 2024, December 31, 2023 and December 31, 2022		F-21
Statements of Changes in Net Assets for the years ended December 31, 2025, December 31, 2024 and December 31, 2023		F-20
Statements of Cash Flows for the years ended December 31, 2024, December 31, 2023 and December 31, 2022		F-22
Statements of Cash Flows for the years ended December 31, 2025, December 31, 2024 and December 31, 2023		F-21
Notes to Financial Statements		F-2322

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Oxford Square Capital Corp.

Opinion on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedule of investments, of Oxford Square Capital Corp. (the “Company”) as of December 31, ~~2024~~2025 and ~~2023~~2024, and the related statements of operations, of changes in net assets and of cash flows for each of the three years in the period ended December 31, ~~2024~~2025, including the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2024~~2025 and ~~2023~~2024, and the results of its operations, changes in its net assets and its cash flows for each of the three years in the period ended December 31, ~~2024~~2025 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the ~~audit~~audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of December 31, ~~2024~~2025 and ~~2023~~2024 by correspondence with the custodian, agent banks, and portfolio company investees; when replies were not received from portfolio company investees, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of Syndicated Loan (Including Senior Secured Notes) and Collateralized Loan Obligation (“CLO”) Equity Level 3 Investments

As described in Notes 2 and 3 to the financial statements, the Company’s fair value of syndicated loans (comprised of senior secured notes) and CLO equity investments was $~~150~~147.73 million and $~~104~~95.61 million, respectively, as of December 31, ~~2024~~2025. Management applies judgment to the specific facts and circumstances of each level 3 investment when determining fair value, which involves the use of significant unobservable inputs with respect to (i) for syndicated loan investments: non-binding indicative bids received from agent banks, discount rates derived from estimated credit spreads, EBITDA multiples, and recent trading activity, and (ii) for CLO equity

F-2

~~derived from estimated credit spreads, EBITDA multiples, and recent trading activity, and (ii) for CLO equity~~ investments: indicative prices provided by a recognized industry pricing service, and the implied yield of such prices, supplemented by actual trades executed in the market at or around period- end, as well as indicative prices provided by brokers who arrange the transactions. For syndicated loan investments, when determining fair value, management also analyzes each syndicated loan by reviewing the portfolio company’s financial statements, covenant compliance and other business developments. For CLO equity investments, management considers, among other factors, operating metrics of the specific investment vehicle, including compliance with collateralization tests, defaulted and restructured securities, and payment defaults in determining fair value. The principal considerations for our determination that performing procedures relating to the valuation of syndicated loan and CLO equity level 3 investments is a critical audit matter are (i) the significant judgment by management when developing the fair value estimates of syndicated loans and CLO equity level 3 investments, (ii) the high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant unobservable inputs, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included, among others (i) developing an independent fair value estimate by obtaining independent pricing from third-party vendors, when available, and comparing management’s estimate to the independent estimate to evaluate the reasonableness of management’s estimate, and/or (ii) for a selection of investments, professionals with specialized skill and knowledge were used to assist in developing an independent range of prices using available market inputs, independently constructed models and independently determined significant unobservable inputs, and comparing management’s estimate to the independent range of prices to evaluate the reasonableness of management’s estimate. Developing an independent range of prices involved testing the completeness and accuracy of data provided by management.

Income from Securitization Vehicles and Investments

As described in Notes 2 and 8 to the financial statements, the Company recorded income from securitization vehicles and investments of $1516.45 million for the year ended December 31, ~~2024~~2025, which represents income from investments in the equity class securities of CLO vehicles (typically income notes or subordinated notes). The Company’s income from securitization vehicles and investments is recorded using the effective interest method based upon estimated cash flows, amounts and timing, including those CLO equity investments that have not made their inaugural distribution for the relevant period end. The principal considerations for our determination that performing procedures relating to the income from securitization vehicles and investments is a critical audit matter are (i) the significant judgment by management when developing the estimates of the income from securitization vehicles and investments; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to estimated cash flows, amounts and timing used in the effective interest method; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included, among others (i) testing management’s process for developing the estimates of the income from securitization vehicles and investments; (ii) evaluating the appropriateness of the effective interest method; (iii) testing the completeness and accuracy of data used by management in the effective interest method; and (iv) the involvement of professionals with specialized skill and knowledge were used to assist in (a) calculating the effective yield for a selection of securities and (b) evaluating the reasonableness of management’s significant assumptions related to estimated cash flows, amounts and timing.

/s/ PricewaterhouseCoopers LLPNew York, New YorkMarch 5, ~~2025~~ 2026

We have served as the Company’s auditor since 2003.

F-3

OXFORD SQUARE CAPITAL CORP.

STATEMENTS OF ASSETS AND LIABILITIES

	December 31, 2024			December 31, 2023
	December 31, 2025			December 31, 2024
ASSETS
Non-affiliated/non-control investments (cost: $358,356,496 and $440,069,822, respectively)	$	256,238,759		$	261,614,335
Non-affiliated/non-control investments (cost: $390,403,599 and $358,356,496, respectively)	$	251,731,345		$	256,238,759
Affiliated investments (cost: $16,836,822 and $16,836,822, respectively)		4,614,100			5,276,092
Affiliated investments (cost of $0 and $16,836,822, respectively)		—			4,614,100
Cash and cash equivalents		34,926,468			5,740,553
Cash equivalents (cost of $51,236,068 and $34,433,088, respectively)		51,236,068			34,433,088
Interest and distributions receivable		2,724,049			3,976,408
Cash		698,579			493,380
Other assets		1,227,598			1,060,384
Interest and distributions receivable		2,002,161			2,724,049
Total assets	$	299,730,974		$	277,667,772
Other assets		1,070,958			1,227,598
Total assets	$	306,739,111		$	299,730,974
LIABILITIES
Notes payable – 6.25% Unsecured Notes, net of deferred issuance costs of $309,812 and $543,609, respectively	$	44,480,938		$	44,247,141
Notes payable – 5.50% Unsecured Notes, net of deferred issuance costs of $996,075 and $1,381,619, respectively		79,503,925			79,118,381
Notes payable – 5.50% Unsecured Notes, net of deferred issuance costs of $1,381,619 and $1,768,219, respectively		79,118,381			78,731,781
Notes payable – 7.75% Unsecured Notes, net of deferred issuance costs of $2,621,662 and $0, respectively		72,128,338			—
Securities purchased, not settled		12,027,463			—
Notes payable – 6.25% Unsecured Notes, net of deferred issuance costs of $0 and $309,812, respectively…		—			44,480,938
Base Fee and Net Investment Income Incentive Fee payable to affiliate		1,215,964			1,012,389
Securities purchased, not settled		5,944,969			12,027,463
Accrued interest payable		1,~~204~~703,~~487~~438			1,204,487
Accrued expenses		1,018,261			1,163,349
Base Fee and Net Investment Income Incentive Fee payable to affiliate		1,036,058			1,215,964
Total liabilities		139,065,494			126,359,147
Accrued expenses		1,017,581			1,018,261
Total liabilities		161,334,309			139,065,494
COMMITMENTS AND CONTINGENCIES (Note 9)
NET ASSETS
Common stock, $0.01 par value, 100,000,000 shares authorized; 69,758,938 and 59,300,472 shares issued and outstanding, respectively		697,590			593,005
Common stock, $0.01 par value, 100,000,000 shares authorized; 86,060,964 and 69,758,938 shares issued and outstanding, respectively		860,610			697,590
Capital in excess of par value		~~487~~523,~~943~~040,~~476~~484			~~458~~487,~~121~~943,~~381~~476
Total distributable earnings/(accumulated losses)		(~~327~~378,~~975~~496,~~586~~292	)		(~~307~~327,~~405~~975,~~761~~586	)
Total net assets		~~160~~145,~~665~~404,~~480~~802			~~151~~160,~~308~~665,~~625~~480
Total liabilities and net assets	$	~~299~~306,~~730~~739,~~974~~111		$	~~277~~299,~~667~~730,~~772~~974
Net asset value per common share	$	21.3069		$	2.5530

The accompanying notes are an integral part of these financial statements.

F-4

OXFORD SQUARE CAPITAL CORP.

SCHEDULE OF INVESTMENTS
December 31, 2025

COMPANY/INVESTMENT(1)(20)	ACQUISITION DATE	PRINCIPAL AMOUNT		COST		FAIR VALUE(2)		% of Net Assets(10)
Senior Secured Notes
Business Services
Access CIG, LLC
first lien senior secured notes, 7.72% (SOFR + 4.00%), (0.50% floor) due August 19, 2030(4)(6)(14)(23)	August 15, 2025	$	10,021,032	$	10,021,032	$	9,645,243

Convergint Technologies, LLC
second lien senior secured notes, 9.22% (SOFR+ 5.50%), (0.75% floor) due July 29, 2033(4)(5)(14)(23)	July 23, 2025		10,000,000		9,950,843		10,050,000

Verifone, Inc. (f/k/a Verifone Systems, Inc.)
first lien senior secured notes, 9.35% (SOFR + 5.25%), (0.00% floor) due August 18, 2028(4)(5)(6)(14)(16)	March 28, 2025		13,162,936		12,145,783		12,471,882
Total Business Services				$	32,117,658	$	32,167,125	22.1	%

Food and Beverage
Shearer’s Foods, LLC
first lien senior secured notes, 6.47% (SOFR + 2.75%), (0.00% floor) due February 12, 2031(4)(5)(6)(14)(23)	January 31, 2024	$	9,850,687	$	9,874,427	$	9,837,290
Total Food and Beverage				$	9,874,427	$	9,837,290	6.8	%

Healthcare
HealthChannels, Inc. (f/k/a ScribeAmerica, LLC)
first lien senior secured notes, 10.25% (Prime + 3.50%) cash, 2.00% PIK, (0.00% floor) due January 12, 2026(3)(4)(5)(6)(26)	October 31, 2018	$	8,833,722	$	8,838,455	$	6,360,280

Performance Health Inc.
first lien senior secured notes, 7.62% (SOFR + 3.75%), (0.00% floor) due March 19, 2032(4)(5)(6)(14)(16)	March 24, 2025		9,962,469		9,925,063		9,813,032

Viant Medical Holdings, Inc.
first lien senior secured notes, 7.72% (SOFR + 4.00%), (0.00% floor) due October 29, 2031(4)(5)(6)(23)	October 16, 2024		5,940,000		5,915,373		5,880,600

Filing Compare · Oxford Square Capital Corp.