OFS Capital Corp. Q3 2024: Investments Stable, Debt Slightly Down

TL;DR

OFS Capital's Q3 2024: Investments holding steady around $1B, debt slightly reduced. Business as usual.

AI Summary

OFS Capital Corp. filed its 10-Q for the period ending September 30, 2024. The company reported total investments of $1.00B as of September 30, 2024, a slight decrease from $1.01B at the end of 2023. Total debt also saw a minor reduction from $487.5M to $485.2M over the same period. The filing details various investment categories and debt instruments, including unsecured debt and notes payable.

Why It Matters

This filing provides insight into OFS Capital Corp.'s financial health and investment strategy, which can influence investor confidence and the company's ability to fund future growth.

Risk Assessment

Risk Level: medium — The company operates in the financial services sector, which is inherently subject to market fluctuations and regulatory changes.

Key Numbers

• $1.00B — Total Investments (As of September 30, 2024, showing a slight decrease from the prior year-end.)
• $485.2M — Total Debt (As of September 30, 2024, indicating a minor reduction from $487.5M at year-end 2023.)

Key Players & Entities

• OFS Capital Corp. (company) — Filer of the 10-Q
• 2024-09-30 (date) — End of reporting period
• 2023-12-31 (date) — Prior year-end

FAQ

Key Financial Figures

• $0.01 — ange on which registered Common Stock, $0.01 par value per share OFS The Nasdaq Glob
• $150,000,000 — in an aggregate principal amount up to $150,000,000 issued pursuant to a Revolving Credit a
• $25,000,000 — in an aggregate principal amount up to $25,000,000 CLO Collateralized loan obligation Co
• $125.0 million — d Notes Due February 2026 The Company's $125.0 million aggregate principal amount of 4.75% not
• $55.0 million — ed Notes Due October 2028 The Company's $55.0 million aggregate principal amount of 4.95% not

Filing Documents

• ofs-20240930.htm (10-Q) — 4247KB
• ofsjointcodeofethics103124.htm (EX-14.1) — 348KB
• ofs2024q3ex311.htm (EX-31.1) — 11KB
• ofs2024q3ex312.htm (EX-31.2) — 11KB
• ofs2024q3ex321.htm (EX-32.1) — 6KB
• ofs2024q3ex322.htm (EX-32.2) — 6KB
• image_10.jpg (GRAPHIC) — 0KB
• image_14.jpg (GRAPHIC) — 4KB
• image_15.jpg (GRAPHIC) — 9KB
• image_2.jpg (GRAPHIC) — 0KB
• 0001487918-24-000081.txt ( ) — 17852KB
• ofs-20240930.xsd (EX-101.SCH) — 61KB
• ofs-20240930_cal.xml (EX-101.CAL) — 52KB
• ofs-20240930_def.xml (EX-101.DEF) — 448KB
• ofs-20240930_lab.xml (EX-101.LAB) — 629KB
• ofs-20240930_pre.xml (EX-101.PRE) — 529KB
• ofs-20240930_htm.xml (XML) — 3856KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements Consolidated Statements of Assets and Liabilities as of September 3 0 , 2024 (unaudited) and December 31, 2023 3 Consolidated Statements of Operations for the Three and Nine Months Ended September 3 0 , 2024 (unaudited) and 2023 (unaudited) 4 Consolidated Statements of Changes in Net Assets for the Three and Nine Months Ended September 3 0 , 2024 (unaudited) and 2023 (unaudited) 5 Consolidated Statements of Cash Flows for the Nine Months Ended September 3 0 , 2024 (unaudited) and 2023 (unaudited) 7 Consolidated Schedules of Investments as of September 3 0 , 2024 (unaudited) and December 31, 2023 8

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 29 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 50 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 65 Item 4.

Controls and Procedures

Controls and Procedures 66

OTHER INFORMATION

PART II. OTHER INFORMATION 67 Item 1.

Legal Proceedings

Legal Proceedings 67 Item 1A.

Risk Factors

Risk Factors 67 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 67 Item 3. Defaults Upon Senior Securities 67 Item 4. Mine Safety Disclosures 67 Item 5. Other Information 68 Item 6. Exhibits 69

SIGNATURES

SIGNATURES 70 OFS, OFS Capital, OFS Credit and HPCI are registered trademarks of Orchard First Source Asset Management, LLC. OFS Capital Management is a trademark of Orchard First Source Asset Management, LLC. All other trademarks or trade names referred to in this Quarterly Report on Form 10-Q are the property of their respective owners. Defined Terms We have used "we," "us," "our," "our company" and "the Company" to refer to OFS Capital Corporation in this report. We also have used several other terms in this report, which are explained or defined below: Term Explanation or Definition 1940 Act Investment Company Act of 1940, as amended Administration Agreement Administration Agreement between the Company and OFS Services dated November 7, 2012 Affiliated Account An account, other than the Company, managed by OFS Advisor or an affiliate of OFS Advisor Affiliated Fund Certain other funds, including other BDCs and registered investment companies managed by OFS Advisor or by registered investment advisers controlling, controlled by, or under common control with, OFS Advisor ASC Accounting Standards Codification, as issued by the FASB BDC Business Development Company under the 1940 Act BLA Business Loan Agreement, as amended, with Banc of California, as lender, which provides the Company with a senior secured revolving credit facility BNP Facility A secured revolving credit facility, as amended, that provides for borrowings in an aggregate principal amount up to $150,000,000 issued pursuant to a Revolving Credit and Security Agreement, as amended, by and among OFSCC-FS, the lenders from time to time parties thereto, BNP Paribas, as administrative agent, OFSCC-FS Holdings, LLC, a wholly owned subsidiary of the Company, as equityholder, the Company, as servicer, Citibank, N.A., as collateral agent and Virtus Group, LP, as collateral administrator Board The Company's board of directors Banc of California Credit Facility A senior secured revolving credi

Forward-Looking Statements

Forward-Looking Statements This Quarterly Report on Form 10-Q 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 us, our current and prospective portfolio investments, our industry, our beliefs and our assumptions. Words such as "anticipates", "expects", "intends", "plans", "believes", "seeks", "estimates", "would", "should", "targets", "projects" and variations of these words and similar expressions are intended to identify forward-looking statements. 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: our ability and experience operating a BDC or maintaining our tax treatment as a RIC under Subchapter M of the Code; our dependence on key personnel; our ability to maintain or develop referral relationships; our ability to replicate historical results; the ability of OFS Advisor to identify, invest in and monitor companies that meet our investment criteria; the belief that the carrying amounts of our financial instruments, such as cash, cash equivalents, receivables and payables approximate the fair value of such items due to the short maturity of such instruments and that such financial instruments are held with high credit quality institutions to mitigate the risk of loss due to credit risk; actual and potential conflicts of interest with OFS Advisor and other affiliates of OFSAM Holdings; constraint on investment due to access to material nonpublic information; restrictions on our ability to enter into transactions with our affiliates; the use of borrowed money to finance a portion of our investments; our ab

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Consolidated Financial Statements

Item 1. Consolidated Financial Statements OFS Capital Corporation and Subsidiaries Consolidated Statements of Assets and Liabilities (unaudited) (Dollar amounts in thousands, except per share data) September 30, 2024 December 31, 2023 Assets Investments, at fair value: Non-control/non-affiliate investments (amortized cost of $ 361,429 and $ 384,339 , respectively) $ 308,866 $ 333,456 Affiliate investments (amortized cost of $ 11,172 and $ 19,191 , respectively) 85,868 86,831 Total investments, at fair value (amortized cost of $ 372,601 and $ 403,530 , respectively) 394,734 420,287 Cash and cash equivalents 20,278 45,349 Interest receivable 1,464 2,217 Receivable for investments sold 795 — Prepaid expenses and other assets 1,267 1,965 Total assets $ 418,538 $ 469,818 Liabilities Revolving lines of credit $ 69,100 $ 90,500 Unsecured Notes (net of deferred debt issuance costs of $ 1,933 and $ 2,667 , respectively) 178,067 177,333 SBA debentures (net of deferred debt issuance costs of $ 0 and $ 20 , respectively) — 31,900 Interest payable 1,739 3,712 Payable to adviser and affiliates (Note 3) 2,936 3,556 Payable for investments purchased 14,680 — Other liabilities 711 813 Total liabilities $ 267,233 $ 307,814 Commitments and contingencies (Note 6) Net assets Preferred stock, par value of $ 0.01 per share, 2,000,000 shares authorized, - 0 - shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively $ — $ — Common stock, par value of $ 0.01 per share, 100,000,000 shares authorized, 13,398,078 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively 134 134 Paid-in capital in excess of par 184,841 184,841 Total accumulated losses ( 33,670 ) ( 22,971 ) Total net assets 151,305 162,004 Total liabilities and net assets $ 418,538 $ 469,818 Number of common shares outstanding 13,398,078 13,398,078 Net asset value per share $ 11.29 $ 12.09 See Notes to Consolidat

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View this 10-Q filing on SEC EDGAR