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Section 1: 10-Q/A (10-Q/A)

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

___________________________________

FORM 10-Q/A
(Amendment No. 1)

___________________________________

 

(Mark One)

   
   

S

 

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

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2019

 

£

 

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

COMMISSION FILE NUMBER: 814-00638

_______________________

OXFORD SQUARE CAPITAL CORP.

(Exact name of registrant as specified in its charter)

_______________________

 

MARYLAND

 

20-0188736

   
   

(State or other jurisdiction of
incorporation or organization)

 

(I.R.S. Employer
Identification No.)

   

8 SOUND SHORE DRIVE, SUITE 255
GREENWICH, CONNECTICUT 06830

(Address of principal executive office)

(203) 983-5275

(Registrant’s telephone number, including area code)

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

6.50% Notes due 2024

 

OXSQL

 

NASDAQ Global Select Market LLC

6.25% Notes due 2026

 

OXSQZ

 

NASDAQ Global Select Market LLC

_______________________

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 S 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 an emerging growth company. See definitions 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 S

   

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. £

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. The number of shares of the issuer’s common stock, $0.01 par value, outstanding as of October 29, 2019, was 47,790,071.

 

EXPLANATORY NOTE

This Amendment No. 1 to the Form 10-Q (this “Amendment”) amends the Quarterly Report on Form 10-Q of Oxford Square Capital Corp. for the period ended September 30, 2019 (the “Form 10-Q”) filed on October 30, 2019. This Form 10-Q/A is being filed to correct a typographical error related to a footnote in the Consolidated Schedule of Investments as of September 30, 2019 in the Form 10-Q. No other changes have been made to the Consolidated Schedule of Investments.

In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended, Item 1. “Consolidated Financial Statements,” of Part I. “Financial Information,” of the Form 10-Q is hereby amended and restated in its entirety. This Amendment does not amend or otherwise update any other information in the Form 10-Q. This Amendment should be read in conjunction with the Form 10-Q. This Amendment does not modify or update the Form 10-Q and the disclosure made therein in any way other than as described above.

In addition, new certifications by our principal executive officer and principal financial officer are filed as exhibits to this Amendment.

 

OXFORD SQUARE CAPITAL CORP.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

 

1

Item 1.

 

Consolidated Financial Statements

 

1

   

Consolidated Statements of Assets and Liabilities as of September 30, 2019 (unaudited) and December 31, 2018

 

1

   

Consolidated Schedule of Investments as of September 30, 2019 (unaudited)

 

2

   

Consolidated Schedule of Investments as of December 31, 2018

 

9

   

Consolidated Statements of Operations for the three and nine months ended September 30, 2019 and 2018 (unaudited)

 

16

   

Consolidated Statements of Changes in Net Assets for the three and nine months ended September 30, 2019 and 2018 (unaudited)

 

17

   

Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018 (unaudited)

 

18

   

Notes to Consolidated Financial Statements (unaudited)

 

19

PART II. OTHER INFORMATION

 

43

Item 6.

 

Exhibits

 

43

SIGNATURES

 

44

i

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

OXFORD SQUARE CAPITAL CORP.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

 

September 30,
2019

 

December 31,
2018

   

(unaudited)

   

ASSETS

 

 

 

 

 

 

 

 

Non-affiliated/non-control investments (cost: $488,820,703 and $486,232,755, respectively)

 

$

390,882,949

 

 

$

430,496,633

 

Affiliated investments (cost: $16,135,609 and $9,126,017, respectively)

 

 

7,492,143

 

 

 

14,492,197

 

Cash equivalents

 

 

8,940,270

 

 

 

13,905,059

 

Restricted cash

 

 

2,533,069

 

 

 

3,175,805

 

Interest and distributions receivable

 

 

5,290,095

 

 

 

4,682,735

 

Other assets

 

 

633,466

 

 

 

392,784

 

Total assets

 

$

415,771,992

 

 

$

467,145,213

 

LIABILITIES

 

 

 

 

 

 

 

 

Notes payable – 6.50% Unsecured Notes, net of deferred issuance costs

 

$

62,907,724

 

 

$

62,664,863

 

Notes payable – Credit Facility, net of deferred issuance costs

 

 

47,807,531

 

 

 

85,522,569

 

Notes payable – 6.25% Unsecured Notes, net of deferred issuance costs

 

 

43,256,614

 

 

 

 

Base management fee and net investment income incentive fee payable to affiliate

 

 

1,729,152

 

 

 

3,227,456

 

Accrued interest payable

 

 

666,353

 

 

 

488,608

 

Accrued expenses

 

 

444,820

 

 

 

517,470

 

Total liabilities

 

 

156,812,194

 

 

 

152,420,966

 

COMMITMENTS AND CONTINGENCIES (Note 13)

 

 

 

 

 

 

 

 

NET ASSETS

 

 

 

 

 

 

 

 

Common stock, $0.01 par value, 100,000,000 shares authorized; 47,790,071 and 47,650,959 shares issued and outstanding, respectively

 

 

477,900

 

 

 

476,509

 

Capital in excess of par value

 

 

457,806,441

 

 

 

456,970,560

 

Total distributable earnings / (accumulated losses)

 

 

(199,324,543

)

 

 

(142,722,822

)

Total net assets

 

 

258,959,798

 

 

 

314,724,247

 

Total liabilities and net assets

 

$

415,771,992

 

 

$

467,145,213

 

Net asset value per common share

 

$

5.42

 

 

$

6.60

 

See Accompanying Notes.

1

OXFORD SQUARE CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS
September 30, 2019

COMPANY/INVESTMENT(1)(20)

 

PRINCIPAL
AMOUNT

 

COST

 

FAIR 
VALUE
(2)

 

% OF NET
ASSETS

Senior Secured Notes

 

 

   

 

   

 

     

 

Aerospace and Defense

 

 

   

 

   

 

     

 

Novetta, LLC

 

 

   

 

   

 

     

 

first lien senior secured notes, 7.12% (LIBOR + 5.00%), (1.00% floor) due October 16, 2022(4)(5)(6)(15)(21)

 

$

5,485,880

 

$

5,439,368

 

$

5,355,590

   

 

Total Aerospace and Defense

 

 

   

$

5,439,368

 

$

5,355,590

 

2.1

%

   

 

   

 

   

 

     

 

Business Services

 

 

   

 

   

 

     

 

Access CIG, LLC

 

 

   

 

   

 

     

 

first lien senior secured notes, 6.07% (LIBOR + 3.75%), (0.00% floor) due February 27, 2025(4)(5)(6)(14)(16)(21)

 

$

492,503

 

$

492,503

 

$

485,426

   

 

second lien senior secured notes, 10.07% (LIBOR + 7.75%), (0.00% floor) due February 27, 2026(4)(5)(14)(16)(21)

 

 

16,754,000

 

 

16,849,076

 

 

16,670,230

   

 

   

 

   

 

   

 

     

 

Convergint Technologies, LLC

 

 

   

 

   

 

     

 

second lien senior secured notes, 8.86% (LIBOR + 6.75%), (0.75% floor) due February 2, 2026(4)(5)(15)(21)

 

 

1,500,000

 

 

1,493,047

 

 

1,440,000

   

 

   

 

   

 

   

 

     

 

Imagine! Print Solutions

 

 

   

 

   

 

     

 

second lien senior secured notes, 10.87% (LIBOR + 8.75%), (1.00% floor) due June 21, 2023(4)(5)(15)(21)

 

 

15,000,000

 

 

14,857,297

 

 

7,275,000

   

 

   

 

   

 

   

 

     

 

OMNIA Partners, Inc.

 

 

   

 

   

 

     

 

first lien senior secured notes, 6.08% (LIBOR + 3.75%), (0.00% floor) due May 23, 2025(4)(5)(6)(14)(16)(21)

 

 

5,925,054

 

 

5,926,121

 

 

5,836,178

   

 

second lien senior secured notes, 9.83% (LIBOR + 7.50%), (0.00% floor) due May 22, 2026(4)(5)(14)(16)(21)

 

 

14,000,000

 

 

13,940,158

 

 

13,685,000

   

 

   

 

   

 

   

 

     

 

Premiere Global Services, Inc.

 

 

   

 

   

 

     

 

first lien senior secured notes, 8.72% (LIBOR + 6.50%), (1.00% floor) due December 8, 2021(4)(5)(6)(16)(21)(27)

 

 

14,318,924

 

 

13,639,750

 

 

8,820,457

   

 

second lien senior secured notes, 11.84% (LIBOR + 9.50%), (1.00% floor) due June 6, 2022(4)(5)(16)(17)(21)(28)

 

 

10,000,000

 

 

9,817,795

 

 

2,400,000

   

 

   

 

   

 

   

 

     

 

Verifone Systems, Inc.

 

 

   

 

   

 

     

 

first lien senior secured notes, 6.14% (LIBOR + 4.00%), (0.00% floor) due August 20, 2025(4)(5)(6)(16)(21)

 

 

6,947,500

 

 

6,917,274

 

 

6,634,863

   

 

Total Business Services

 

 

   

$

83,933,021

 

$

63,247,154

 

24.4

%

   

 

   

 

   

 

     

 

Diversified Insurance

 

 

   

 

   

 

     

 

AmeriLife Group LLC

 

 

   

 

   

 

     

 

second lien senior secured notes, 11.11% (LIBOR + 9.00%), (0.00% floor) due June 11, 2027(4)(5)(6)(15)(21)

 

$

10,000,000

 

$

9,900,692

 

$

9,937,500

   

 

Total Diversified Insurance

 

 

   

$

9,900,692

 

$

9,937,500

 

3.8

%

(continued on next page)

See Accompanying Notes.

2

OXFORD SQUARE CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS — (continued)
September 30, 2019

COMPANY/INVESTMENT(1)(20)

 

PRINCIPAL
AMOUNT

 

COST

 

FAIR 
VALUE
(2)

 

% OF NET
ASSETS

Senior Secured Notes – (continued)

 

 

   

 

   

 

     

 

Education

 

 

   

 

   

 

     

 

Edmentum, Inc. (f/k/a Plato, Inc.)

 

 

   

 

   

 

     

 

first lien senior secured notes, 6.76% (LIBOR + 4.50%), (1.00% floor) Cash, 4.00% PIK due June 9,
2021(3)(4)(5)(6)(16)(21)

 

$

6,046,068

 

$

6,017,090

 

$

5,320,540

   

 

Total Education

 

 

   

$

6,017,090

 

$

5,320,540

 

2.1

%

   

 

   

 

   

 

     

 

Financial Intermediaries

 

 

   

 

   

 

     

 

First American Payment Systems

 

 

   

 

   

 

     

 

second lien senior secured notes, 12.81% (LIBOR + 10.50%), (1.00% floor) due July 5, 2024(4)(5)(16)(21)(22)

 

$

1,500,000

 

$

1,467,295

 

$

1,498,125

   

 

   

 

   

 

   

 

     

 

Shift4 Payments, LLC (f/k/a Lighthouse Network, LLC)

 

 

   

 

   

 

     

 

first lien senior secured notes, 6.76% (LIBOR + 4.50%), (1.00% floor) due November 30, 2024(4)(5)(6)(14)(16)(21)

 

 

3,438,750

 

 

3,426,034

 

 

3,430,153

   

 

second lien senior secured notes, 10.76% (LIBOR + 8.50%), (1.00% floor) due November 30, 2025(4)(5)(14)(16)(21)

 

 

16,490,000

 

 

16,346,117

 

 

16,118,975

   

 

Total Financial Intermediaries

 

 

   

$

21,239,446

 

$

21,047,253

 

8.1

%

   

 

   

 

   

 

     

 

Healthcare

 

 

   

 

   

 

     

 

Keystone Acquisition Corp.

 

 

   

 

   

 

     

 

first lien senior secured notes, 7.58% (LIBOR + 5.25%), (1.00% floor) due May 1, 2024(4)(5)(6)(14)(16)(21)

 

$

7,476,943

 

$

7,448,711

 

$

7,308,712

   

 

second lien senior secured notes, 11.58% (LIBOR + 9.25%), (1.00% floor) due May 1, 2025(4)(5)(14)(16)(21)

 

 

13,000,000

 

 

12,866,997

 

 

12,610,000

   

 

   

 

   

 

   

 

     

 

Viant Medical Holdings, Inc.

 

 

   

 

   

 

     

 

first lien senior secured notes, 6.08% (LIBOR + 3.75%), (0.00% floor) due July 2, 2025(4)(5)(6)(14)(16)(21)

 

 

9,900,000

 

 

9,899,530

 

 

9,231,750

   

 

second lien senior secured notes, 10.08% (LIBOR + 7.75%), (0.00% floor) due July 2, 2026(4)(5)(14)(16)(21)

 

 

5,000,000

 

 

4,955,337

 

 

4,625,000

   

 

   

 

   

 

   

 

     

 

Healthport Technologies, LLC

 

 

   

 

   

 

     

 

first lien senior secured notes, 6.36% (LIBOR + 4.25%), (1.00% floor) due December 1, 2021(4)(5)(6)(15)(21)

 

 

12,435,065

 

 

10,893,775

 

 

11,346,997

   

 

   

 

   

 

   

 

     

 

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

 

 

   

 

   

 

     

 

first lien senior secured notes, 6.70% (LIBOR + 4.50%), (0.00% floor) due April 3, 2025(4)(5)(6)(15)(21)

 

 

9,886,998

 

 

9,823,774

 

 

9,676,899

   

 

Total Healthcare

 

 

   

$

55,888,124

 

$

54,799,358

 

21.2

%

   

 

   

 

   

 

     

 

Logistics

 

 

   

 

   

 

     

 

Capstone Logistics Acquisition, Inc.

 

 

   

 

   

 

     

 

first lien senior secured notes, 6.61% (LIBOR + 4.50%), (1.00% floor) due October 7, 2021(4)(5)(6)(15)(21)

 

$

12,917,066

 

$

12,901,216

 

$

12,775,753

   

 

Total Logistics

 

 

   

$

12,901,216

 

$

12,775,753

 

4.9

%

(continued on next page)

See Accompanying Notes.

3

OXFORD SQUARE CAPITAL CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS — (continued)
September 30, 2019

COMPANY/INVESTMENT(1)(20)

 

PRINCIPAL
AMOUNT

 

COST

 

FAIR 
VALUE
(2)

 

% OF NET
ASSETS

Senior Secured Notes – (continued)

 

 

   

 

   

 

     

 

Software

 

 

   

 

   

 

     

 

ECI Software Solutions, Inc.

 

 

   

 

   

 

     

 

first lien senior secured notes, 6.58% (LIBOR + 4.25%), (1.00% floor) due September 27, 2024(4)(5)(6)(14)(16)(21)

 

$

4,924,623

 

$

4,936,266

 

$

4,898,473

   

 

second lien senior secured notes, 10.33% (LIBOR + 8.00%), (1.00% floor) due September 29, 2025(4)(5)(14)(16)(21)

 

 

15,000,000

 

 

14,914,528

 

 

14,400,000

   

 

   

 

   

 

   

 

     

 

Help/Systems Holdings, Inc.

 

 

   

 

   

 

     

 

first lien senior secured notes, 6.08% (LIBOR + 3.75%), (0.00% floor) due March 28, 2025(4)(5)(6)(14)(16)(21)

 

 

3,950,000

 

 

3,957,209

 

 

3,935,188

   

 

second lien senior secured notes, 10.08% (LIBOR + 7.75%), (0.00% floor) due March 27, 2026(4)(5)(14)(16)(21)

 

 

15,500,000

 

 

15,484,031

 

 

15,480,625

   

 

   

 

   

 

   

 

     

 

Quest Software, Inc.

 

 

   

 

   

 

     

 

first lien senior secured notes, 6.51% (LIBOR + 4.25%), (0.00% floor) due May 16, 2025(4)(5)(6)(14)(16)(21)

 

 

5,955,000

 

 

5,929,329

 

 

5,880,563

   

 

second lien senior secured notes, 10.51% (LIBOR + 8.25%), (0.00% floor) due May 18, 2026(4)(5)(14)(16)(21)

 

 

15,000,000

 

 

14,865,062

 

 

14,677,500

   

 

Total Software

 

 

   

$

60,086,425

 

$

59,272,349

 

22.9

%

   

 

   

 

   

 

     

 

Telecommunications Services

 

 

   

 

   

 

     

 

Global Tel Link Corp.

 

 

   

 

   

 

     

 

second lien senior secured notes, 10.36% (LIBOR + 8.25%), (0.00% floor) due November 29, 2026(4)(5)(14)(15)

 

$

17,000,000

 

$

16,717,537

 

$

16,054,460

   

 

Total Telecommunication Services

 

 

   

$

16,717,537

 

$

16,054,460

 

6.2

%

   

 

   

 

   

 

     

 

Utilities

 

 

   

 

   

 

     

 

CLEAResult Consulting, Inc.

 

 

   

 

   

 

     

 

first lien senior secured notes, 5.71% (LIBOR + 3.50%), (0.00% floor) due August 8, 2025(4)(5)(6)(15)(21)

 

$

4,950,000

 

$

4,928,333

 

$

4,809,767

   

 

second lien senior secured notes, 9.46% (LIBOR + 7.25%), (0.00% floor) due August 10, 2026(4)(5)(15)(21)

 

 

7,650,000

 

 

7,674,793

 

 

7,497,000

   

 

Total Utilities

 

 

   

$

12,603,126

 

$

12,306,767

 

4.8

%

Total Senior Secured Notes

 

 

   

$

284,726,045

 

$

260,116,724

 

100.5

%

   

 

   

 

   

 

     

 

Collateralized Loan Obligation – Debt Investments

 

 

   

 

   

 

     

 

Structured Finance

 

 

   

 

   

 

     

 

Galaxy XXVIII CLO, Ltd.

 

 

   

 

   

 

     

 

CLO secured class F notes, 10.78% (LIBOR + 8.48%), due July 15, 2031(4)(5)(11)(12)(15)

 

$

1,000,000

 

$

931,983

 

$

865,600

   

 

Total Structured Finance

 

 

   

$

931,983

 

$

865,600

 

0.3

%

Total Collateralized Loan Obligation – Debt Investments

 

 

   

$

931,983

 

$

865,600

 

0.3

%

   

 

   

 

   

 

     

 

Collateralized Loan Obligation – Equity Investments

 

 

   

 

   

 

     

 

Structured Finance

 

 

   

 

   

 

     

 

AMMC CLO XI, Ltd.