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

FORM 10-Q
(Mark One)
 
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2018
or
 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______

Commission file number 814-00813

OFS CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
 
46-1339639
State or Other Jurisdiction of
 
I.R.S. Employer Identification No.
Incorporation or Organization
 
 
 
 
 
10 S. Wacker Drive, Suite 2500, Chicago, Illinois
 
60606
Address of Principal Executive Offices
 
Zip Code
 
 
 
 
(847) 734-2000
 
                                      Registrant’s Telephone Number, Including Area Code
 
 
 
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

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  ý     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.
Large accelerated filer
¨
Accelerated filer
ý
 
 
 
 
Non-accelerated filer
¨  (do not check if a smaller reporting company)
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  ý

The number of shares of the issuer’s Common Stock, $0.01 par value, outstanding as of November 1, 2018 was 13,352,824.



OFS CAPITAL CORPORATION

TABLE OF CONTENTS
 
 
Item 1.
 
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
 
 
Item 1.
Item 1A.
Item 2
Item 3.
Item 4.
Item 5.
Item 6.

2


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
Annual Distribution Requirement
Distributions to our stockholders, for each taxable year, of at least 90% of our ICTI
April 2017 Offering
The April 2017 follow-on public offering 3,625,000 shares of our common stock at an offering price of $14.57 per share.
ASC
Accounting Standards Codification, as issued by the FASB
ASU
Accounting Standards Updates, as issued by the FASB
BDC
Business Development Company under the 1940 Act
BLA
Business Loan Agreement, as amended, with Pacific Western Bank, as lender, which provides the Company with a senior secured revolving credit facility
Board
The Company's board of directors
CLO
Collateralized loan obligation
Code
Internal Revenue Code of 1986, as amended
DRIP
Distribution reinvestment plan
EBITDA
Earnings before interest, taxes, depreciation, and amortization
Exchange Act
Securities Exchange Act of 1934, as amended
FASB
Financial Accounting Standards Board
GAAP
Accounting principles generally accepted in the United States
HPCI
Hancock Park Corporate Income, Inc., a Maryland corporation and non-traded BDC for whom OFS Advisor serves as investment adviser
ICTI
Investment company taxable income, which is generally net ordinary income plus net short-term capital gains in excess of net long-term capital losses
Indicative Prices
Market quotations, prices from pricing services or bids from brokers or dealers
Investment Advisory Agreement
Investment Advisory and Management Agreement between the Company and OFS Advisor dated November 7, 2012
IPO
Initial Public Offering
LIBOR
London Interbank Offered Rate
Net Loan Fees
The cumulative amount of fees, such as discounts, premiums and amendment fees that are deferred and recognized as income over the life of the loan.
OCCI
OFS Credit Company Income, Inc., a Delaware corporation and a non-diversified, closed-end management investment company for whom OFS Advisor serves as investment adviser
OFS Advisor
OFS Capital Management, LLC, a wholly owned subsidiary of OFSAM and registered investment advisor under the 1940 Act
OFS Capital WM
OFS Capital WM, LLC, a wholly owned investment company subsidiary of the Company
OFS Services
OFS Capital Services, LLC, a wholly owned subsidiary of OFSAM and affiliate of OFS Advisor
OFSAM
Orchard First Source Asset Management, LLC, a full-service provider of capital and leveraged finance solutions to U.S. corporations
PIK
Payment-in-kind, non-cash interest or dividends payable as an addition to the loan or equity security producing the income.
Prime Rate
United States Prime interest rate
PWB Credit Facility
Senior secured revolving credit facility between the Company and Pacific Western Bank, as lender
RIC
Regulated investment company under the Code
SBA
U.S. Small Business Administration

3


Term
Explanation or Definition
SBCAA
Small Business Credit Availability Act
SBIC
A fund licensed under the SBA small business investment company program
SBIC Acquisition
The Company's acquisition of the remaining ownership interests in SBIC I LP and OFS SBIC I GP, LLC on December 4, 2013
SBIC Act
Small Business Investment Act of 1958, as amended
SBIC I LP
OFS SBIC I, LP, a wholly owned SBIC subsidiary of the Company
SEC
U.S. Securities and Exchange Commission
Securities Act
Securities Act of 1933, as amended
Stock Repurchase Program
The open market stock repurchase program for shares of the Company’s common stock under Rule 10b-18 of the Exchange Act
Transaction Price
The cost of an arm's length transaction occuring in the same security
Unsecured Notes Due April 2025
The Company’s $50.0 million aggregate principal amount of 6.375% notes due April 30, 2025
Unsecured Notes Due October 2025
The Company’s $46.0 million aggregate principal amount of 6.5% notes due October 30, 2025

4


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 an SBIC, 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;
actual and potential conflicts of interest with OFS Advisor and other affiliates of OFSAM;
constraint on investment due to access to material nonpublic information;
restrictions on our ability to enter into transactions with our affiliates;
limitations on the amount of SBA-guaranteed debentures that may be issued by an SBIC;
our ability to comply with SBA regulations and requirements;
the use of borrowed money to finance a portion of our investments;
competition for investment opportunities;
the ability of SBIC I LP and any other portfolio companies to make distributions enabling us to meet RIC requirements;
our ability to raise debt or equity capital as a BDC;
the timing, form and amount of any distributions from our portfolio companies;
the impact of a protracted decline in the liquidity of credit markets on our business;
the general economy and its impact on the industries in which we invest;
uncertain valuations of our portfolio investments; and
the effect of new or modified laws or regulations governing our operations, including the ability to incur additional leverage under the Small Business Credit Availability Act.
Although we believe that the assumptions on which these forward-looking statements are based on and 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. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Quarterly Report on Form 10-Q should not be regarded as a representation by us that our plans and objectives will be achieved. These risks and uncertainties include, among others, those described or identified in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Quarterly Report on Form 10-Q.
We have based the forward-looking statements on information available to us on the date of this Quarterly Report on Form 10-Q. Except as required by the federal securities laws, we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The forward-looking statements and projections contained in this Quarterly Reports on Form 10-Q are excluded from the safe harbor protection provided by Section 27A of the Securities Act, and Section 21E of the Exchange Act.

5


PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
OFS Capital Corporation and Subsidiaries
Consolidated Balance Sheets
(Dollar amounts in thousands, except per share data)

September 30,
2018

December 31,
2017

(unaudited)


Assets





Investments, at fair value:





Non-control/non-affiliate investments (amortized cost of $281,575 and $209,360, respectively)
$
272,764


$
197,374

Affiliate investments (amortized cost of $106,754 and $70,402, respectively)
112,305


69,557

Control investment (amortized cost of $10,306 and $10,213, respectively)
10,964


10,568

Total investments at fair value (amortized cost of $398,635 and $289,975, respectively)
396,033


277,499

Cash and cash equivalents
6,043


72,952

Interest receivable
2,637


2,734

Prepaid expenses and other assets
3,825


4,593

Total assets
$
408,538


$
357,778







Liabilities





Revolving line of credit
$
17,000


$
17,600

SBA debentures (net of deferred debt issuance costs of $2,375 and $2,657, respectively)
147,505


147,223

Unsecured notes (net of deferred debt issuance costs of $1,688 and $0, respectively)
48,312



Interest payable
976


1,596

Payable to adviser and affiliates (Note 3)
3,348


2,463

Payable for investments purchased
6,777



Accrued professional fees
686


433

Other liabilities
336


127

Total liabilities
224,940


169,442







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, 2018, and December 31, 2017, respectively
$


$

Common stock, par value of $0.01 per share, 100,000,000 shares authorized, 13,352,824 and 13,340,217 shares issued and outstanding as of September 30, 2018, and December 31, 2017, respectively
134


133

Paid-in capital in excess of par
187,846


187,398

Accumulated undistributed net investment income
7,599


9,404

Accumulated undistributed net realized gain (loss)
(9,120
)

3,881

Net unrealized depreciation on investments
(2,861
)

(12,480
)
Total net assets
183,598


188,336







Total liabilities and net assets
$
408,538


$
357,778







Number of shares outstanding
13,352,824


13,340,217

Net asset value per share
$
13.75


$
14.12


See Notes to Financial Statements.

6


OFS Capital Corporation and Subsidiaries
Consolidated Statements of Operations (unaudited)
(Dollar amounts in thousands, except per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

2018

2017

2018

2017
Investment income











Interest income:











Non-control/non-affiliate investments
$
7,424


$
5,485


$
19,508


$
14,520

Affiliate investments
2,455


1,601


7,308


5,089

Control investment
255


236


744


1,302

Total interest income
10,134


7,322


27,560


20,911

Payment-in-kind interest and dividend income:











Non-control/non-affiliate investments
178


350


524


976

Affiliate investments
308


394


1,054


1,120

Control investment
28


27


82


104

Total payment-in-kind interest and dividend income
514


771


1,660


2,200

Dividend income:











Non-control/non-affiliate investments






50

Affiliate investments


33


130


118

Control investment
58


92


185


262

Total dividend income
58


125


315


430

Fee income:











Non-control/non-affiliate investments
251


679


664


1,027

Affiliate investments
7


208


12


431

Control investment
18


17


52


135

Total fee income
276


904


728


1,593

Total investment income
10,982


9,122


30,263


25,134

Expenses











Interest expense
2,393


1,503


6,196


4,229

Management fee
1,678


1,310


4,586


3,726

Incentive fee
1,170


1,090


3,041


2,249

Professional fees
458


284


859


840

Administration fee
311


274


1,252


982

Other expenses
282


259


1,287


1,050

Total expenses before incentive fee waiver
6,292


4,720


17,221


13,076

Incentive fee waiver (see Note 3)




(22
)


Total expenses, net of incentive fee waiver
6,292


4,720


17,199


13,076

Net investment income
4,690


4,402


13,064


12,058

Net realized and unrealized gain (loss) on investments











Net realized loss on non-control/non-affiliate investments


(5,204
)

(5,003
)

(5,041
)
Net realized gain (loss) on affiliate investments


3,617


(4,018
)

4,491

Net unrealized appreciation (depreciation) on non-control/non-affiliate investments
(923
)

1,196


2,925


(7,350
)
Net unrealized appreciation (depreciation) on affiliate investments
1,223


(2,901
)

6,396


(2,243
)
Net unrealized appreciation on control investment
189


65


303


1,845

Net gain (loss) on investments
489


(3,227
)

603


(8,298
)
Net increase in net assets resulting from operations
$
5,179


$
1,175


$
13,667


$
3,760

Net investment income per common share – basic and diluted
$
0.35


$
0.33


$
0.98


$
1.00

Net increase in net assets resulting from operations per common share – basic and diluted
$
0.39


$
0.09


$
1.02


$
0.31

Distributions declared per common share
$
0.34


$
0.34


$
1.05


$
1.02

Basic and diluted weighted average shares outstanding
13,350,484


13,331,690


13,346,630


12,089,895


7


See Notes to Financial Statements.

8


OFS Capital Corporation and Subsidiaries
Consolidated Statements of Changes in Net Assets (unaudited)
(Dollar amounts in thousands)
 
Nine Months Ended September 30,
 
2018
 
2017
Increase in net assets resulting from operations:
 
 
 
Net investment income
$
13,064


$
12,058

Net realized loss on investments
(9,021
)

(550
)
Net unrealized appreciation (depreciation) on investments
9,624


(7,748
)
Net increase in net assets resulting from operations
13,667


3,760

 
 
 
 
Distributions to stockholders from:





Accumulated net investment income
(13,513
)

(12,362
)
Accumulated net realized gain (loss)
(5,036
)


Total distributions to stockholders
(18,549
)

(12,362
)
 
 
 
 
Common stock transactions:





Public offering of common stock, net of expenses

 
53,348

Reinvestment of stockholder distributions
144


132

Net increase in net assets resulting from capital transactions
144


53,480

 
 
 
 
Net increase (decrease) in net assets
(4,738
)

44,878

 
 
 
 
Net assets:





Beginning of period
188,336


143,778

End of period
$
183,598


$
188,656

 
 
 
 
Accumulated undistributed net investment income
$
7,599


$
6,942

 
 
 
 
Common stock activity:





Public offering of common stock

 
3,625,000

Common stock issued from reinvestment of stockholder distributions
12,607


9,554

Common stock issued and outstanding at beginning of period
13,340,217


9,700,297

Common stock issued and outstanding at end of period
13,352,824


13,334,851


See Notes to Financial Statements.

9


OFS Capital Corporation and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)
(Dollar amounts in thousands)
 
Nine Months Ended September 30,
 
2018
 
2017
Cash flows from operating activities
 
 
 
Net increase in net assets resulting from operations
$
13,667


$
3,760

Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:





Net realized loss on investments
9,021


550

Net unrealized depreciation (appreciation) on investments
(9,624
)

7,748

Amortization of Net Loan Fees
(992
)

(1,187
)
Amendment fees collected
79


112

Payment-in-kind interest and dividend income
(1,659
)

(2,199
)
Amortization of deferred debt issuance costs
532


402

Amortization of intangible asset
146


147

Purchase and origination of portfolio investments
(185,806
)

(114,663
)
Proceeds from principal payments on portfolio investments
34,891


86,527

Proceeds from sale or redemption of portfolio investments
42,659


7,456

Changes in other operating assets and liabilities:



 
Interest receivable
97


(12
)
Interest payable
(620
)

(1,204
)
Payable to adviser and affiliates
885


228

Other assets and liabilities
797


(147
)
Net cash used in operating activities
(95,927
)

(12,482
)
 
 
 
 
Cash flows from financing activities
 
 
 
Proceeds from common stock offering, net of expenses

 
53,423

Distributions paid to stockholders
(18,405
)

(12,231
)
Borrowings under revolving line of credit
70,500


28,000

Repayments under revolving line of credit
(71,100
)

(20,400
)
Issuance of unsecured notes
48,247



Other financing activities
(224
)

(101
)
Net cash provided by financing activities
29,018


48,691

Net increase (decrease) in cash and cash equivalents
(66,909
)

36,209

   Cash and cash equivalents — beginning of period
72,952


17,659

   Cash and cash equivalents — end of period
$
6,043


$
53,868

 
 
 
 
Supplemental Disclosure of Cash Flow Information:
 
 
 
Cash paid for interest
$
6,284


$
5,031

Distributions paid by issuance of common stock
144


132


See Notes to Financial Statements.

10

OFS Capital Corporation and Subsidiaries

Consolidated Schedule of Investments
September 30, 2018
(Dollar amounts in thousands)


Portfolio Company (1)
Investment Type
 
Industry
 
Interest Rate (2)
 
Spread Above Index (2)
 
Initial Acquisition Date
 
Maturity
 
Principal Amount
 
Amortized Cost
 
Fair Value (3)
 
Percent of Net Assets
Non-control/Non-affiliate Investments
 
 




















Baymark Health Services, Inc.

Outpatient Mental Health & Sub. Abuse Centers




















Senior Secured Loan



10.35%

(L +8.25%)

3/22/2018

3/1/2025

$
4,000


$
3,963


$
3,947


2.1
%























Carolina Lubes, Inc. (4)

Automotive Oil Change and Lubrication Shops




















Senior Secured Loan (8)



10.21%

(L +7.25%)

8/23/2017

8/23/2022

20,982


20,841


21,123


11.5

Senior Secured Loan (Revolver)



9.59%

(L +7.25%)

8/23/2017

8/23/2022

1,363


1,351


1,356


0.7













22,345

 
22,192

 
22,479

 
12.2

Cirrus Medical Staffing, Inc. (4)

Temporary Help Services




















Senior Secured Loan



10.63%

(L +8.25%)

3/5/2018

10/19/2022

13,026


12,886


12,770


7.0

Senior Secured Loan (Revolver)



10.63%

(L +8.25%)

3/5/2018

10/19/2022

128


128


125


0.1













13,154


13,014


12,895


7.1

Community Intervention Services, Inc. (4) (6) (10) (11)

Outpatient Mental Health and Substance Abuse Centers




















Subordinated  Loan



7.0% cash / 6.0% PIK

N/A

7/16/2015

1/16/2021

8,924


7,639




























Confie Seguros Holdings II Co.

Insurance Agencies and Brokerages




















Senior Secured Loan



11.74%

(L +9.50%)

7/7/2015

5/8/2019

9,678


9,634


9,600


5.2
























Constellis Holdings, LLC

Other Justice, Public Order, and Safety Activities




















Senior Secured Loan



11.39%

(L +9.00%)

4/28/2017

4/21/2025

9,950


9,827


9,637


5.2
























Convergint Technologies

Security Systems Services (except Locksmiths)




















Senior Secured Loan



8.99%

(L +6.75%)

9/28/2018

2/2/2026

1,781


1,790


1,790


























Davis Vision, Inc.

Direct Health and Medical Insurance Carriers




















Senior Secured Loan



9.00%

(L +6.75%)

7/17/2018

12/1/2025

3,185


3,181


3,181


1.7

























11

OFS Capital Corporation and Subsidiaries

Consolidated Schedule of Investments - Continued
September 30, 2018
(Dollar amounts in thousands)


Portfolio Company (1)
Investment Type
 
Industry
 
Interest Rate (2)
 
Spread Above Index (2)
 
Initial Acquisition Date
 
Maturity
 
Principal Amount
 
Amortized Cost
 
Fair Value (3)
 
Percent of Net Assets
DuPage Medical Group

Offices of Physicians, Mental Health Specialists




















Senior Secured Loan



9.17%

(L +7.00%)

8/22/2017

8/15/2025

$
7,098


$
7,173


$
7,129


3.9
%























Eblens Holdings, Inc.

Shoe Store




















Subordinated Loan (11)



12.0% cash / 1.0% PIK

N/A

7/13/2017

1/13/2023

8,897


8,828


8,783


4.8

Common Equity (71,250 Class A units) (10)







7/13/2017






713


726


0.4













8,897


9,541


9,509


5.2

Elgin Fasteners Group

Bolt, Nut, Screw, Rivet, and Washer Manufacturing




















Senior Secured Loan



8.89%

(L +6.50%)

10/31/2011

8/27/2018 (5)

3,699


3,699


3,570


1.9
























Envocore Holding, LLC (FKA LRI Holding, LLC) (4)

Electrical Contractors and Other Wiring Installation Contractors




















Senior Secured Loan



11.63%

(L +9.25%)

6/30/2017

6/30/2022

17,344


17,230


16,996


9.3

Preferred Equity (238,095 Series B units) (10)







6/30/2017






300


251


0.1

Preferred Equity (13,315 Series C units) (10)







8/13/2018






13


13















17,344


17,543


17,260


9.4

GGC Aerospace Topco L.P.

Other Aircraft Parts and Auxiliary Equipment Manufacturing




















Senior Secured Loan



11.07%

(L +8.75%)

12/29/2017

9/8/2024

5,000


4,889


4,933


2.7

Common Equity (368,852 Class A units) (10)







12/29/2017






450


416


0.2

Common Equity (40,984 Class B units) (10)







12/29/2017






50


21















5,000


5,389


5,370


2.9

JBR Clinical Research, Inc. (4) (8)

Research and Development in the Social Sciences and Humanities




















Senior Secured Loan



9.34%

(L +6.25%)

8/2/2018

8/2/2023

13,100


13,100


13,100


7.1
























MAI Holdings, Inc. (4)

Printing Machinery and Equipment Manufacturing




















Senior Secured Loan



9.50%

N/A

6/21/2018

6/1/2023

5,000


5,000


4,978


2.7
























Maverick Healthcare Equity, LLC (4)

Home Health Equipment Rental




















Preferred Equity (1,250,000 units) (10)







12/10/2014






900


26



Common Equity (1,250,000 Class A units) (10)







12/10/2014


























900


26




12

OFS Capital Corporation and Subsidiaries

Consolidated Schedule of Investments - Continued
September 30, 2018
(Dollar amounts in thousands)


Portfolio Company (1)
Investment Type
 
Industry
 
Interest Rate (2)
 
Spread Above Index (2)
 
Initial Acquisition Date
 
Maturity
 
Principal Amount
 
Amortized Cost
 
Fair Value (3)
 
Percent of Net Assets
My Alarm Center, LLC (4) (10) (13)

Security Systems Services (except Locksmiths)




















Preferred Equity (1,485 Class A units), 8% PIK







7/14/2017






$
1,571


$
1,316


0.7
%
Preferred Equity (1,198 Class B units)







7/14/2017






1,198





Preferred Equity (335 Class Z units)







9/12/2018






325


1,038


0.6

Common Equity (64,149 units)







7/14/2017


























3,094


2,354


1.3

O2 Holdings, LLC (4)

Fitness and Recreational Sports Centers




















Senior Secured Loan



15.27%

(L +13.00%)

9/2/2016

9/30/2019

13,910


13,662


13,927


7.6
























Online Tech Stores, LLC (4)

Stationary & Office Supply Merchant Wholesaler




















Subordinated Loan



10.50% cash / 1.0% PIK

N/A

2/1/2018

8/1/2023

16,106


15,825


15,919


8.7
























OnSite Care, PLLC (4) (8)

Home Health Care Services




















Senior Secured Loan



10.14%

(L +6.25%)

8/10/2018

8/10/2023

7,100


7,031


7,031


3.8
























Parfums Holding Company, Inc.

Cosmetics, Beauty Supplies, and Perfume Stores




















Senior Secured Loan



11.00%

(L +8.75%)

11/16/2017

6/30/2025

6,320


6,334


6,383


3.5




















Pelican Products, Inc.

Unlaminated Plastics Profile Shape Manufacturing




















Senior Secured Loan



9.85%

(L +7.75%)

9/24/2018

5/1/2026

4,969


4,987


4,987


2.7
























Performance Team LLC (4)

General Warehousing and Storage




















Senior Secured Loan



12.23%

(L +10.00%)

5/24/2018

11/24/2023

20,300


20,110


20,320


11.1
























Planet Fitness Midwest LLC (4)

Fitness and Recreational Sports Centers




















Subordinated Loan



13.00%

N/A

6/16/2016

12/16/2021

5,000


4,971


5,025


2.7

























13

OFS Capital Corporation and Subsidiaries

Consolidated Schedule of Investments - Continued
September 30, 2018
(Dollar amounts in thousands)


Portfolio Company (1)
Investment Type
 
Industry
 
Interest Rate (2)
 
Spread Above Index (2)
 
Initial Acquisition Date
 
Maturity
 
Principal Amount
 
Amortized Cost
 
Fair Value (3)
 
Percent of Net Assets
PM Acquisition LLC

All Other General Merchandise Stores
















Senior Secured Loan



11.50% cash / 2.5% PIK

N/A

9/30/2017

10/29/2021

$
5,527


$
5,467


$
5,491


3.0
%
Common Equity (499 units) (10) (13)







9/30/2017






499


280


0.2













5,527


5,966


5,771


3.2

Resource Label Group, LLC

Commercial Printing (except Screen and Books)




















Senior Secured Loan



10.84%

(L +8.50%)

6/7/2017

11/26/2023

4,821


4,764


4,747


2.6
























RPLF Holdings, LLC (10) (13)

Software Publishers




















Common Equity (254,110 Class A units)







1/17/2018






254


302


0.2
























Security Alarm Financing Enterprises, L.P. (4) (14)

Security Systems Services (except Locksmiths)




















Subordinated Loan



14.00% cash / 3.38% PIK

(L +15.00%)

10/14/2016

6/19/2020

12,694


12,636


12,790


7.0

 
 
 
 
 
 
 


 
 
 
 
 
 
 
 
 
 
Sentry Centers Holdings, LLC

Other Professional, Scientific, and Technical Services




















Senior Secured Loan (15)



13.70%

(L +11.50%)

1/25/2016

7/24/2020

8,863


8,801


8,787


4.8

Common Equity (5,000 Series C units) (10) (13)



 
 
 

3/31/2014
 
 
 



500


988


0.5













8,863


9,301


9,775


5.3

Southern Technical Institute, LLC (4) (6) (10)

Colleges, Universities, and Professional Schools




















Subordinated Loan



6.00% PIK

N/A

6/27/2018

12/31/2021

1,494







Other







6/27/2018























1,494







SSH Group Holdings, Inc.,

Child Day Care Services




















Senior Secured Loan



6.59%

(L +4.25%)

7/26/2018

7/30/2025

984


982


982


0.5

Senior Secured Loan



10.59%

(L +8.25%)

7/26/2018

7/30/2026

7,216


7,145


7,145


3.9













8,200


8,127


8,127


4.4

Stancor, L.P. (4)

Pump and Pumping Equipment Manufacturing




















Preferred Equity (1,250,000 Class A units), 8% PIK (10)







8/19/2014






1,501


1,654


0.9















1,501


1,654


0.9


14

OFS Capital Corporation and Subsidiaries

Consolidated Schedule of Investments - Continued
September 30, 2018
(Dollar amounts in thousands)


Portfolio Company (1)
Investment Type
 
Industry
 
Interest Rate (2)
 
Spread Above Index (2)
 
Initial Acquisition Date
 
Maturity
 
Principal Amount
 
Amortized Cost
 
Fair Value (3)
 
Percent of Net Assets
STS Operating, Inc.

Industrial Machinery and Equipment Merchant Wholesalers




















Senior Secured Loan



6.49%

(L +4.25%)

5/16/2018

12/11/2024

$
640


$
638


$
634


0.3
%
Senior Secured Loan



10.24%

(L +8.00%)

5/15/2018

4/30/2026

9,073


9,069


8,903


4.8













9,713


9,707


9,537


5.1

The Escape Game, LLC (4)

Other amusement and recreation industries




















Senior Secured Loan



10.98%

(L +8.75%)

12/22/2017

12/22/2022

7,000


6,956


6,874


3.7

Senior Secured Loan (Delayed Draw)



10.98%



7/20/2018

12/22/2022

2,333


2,333


2,292


1.2













9,333


9,289


9,166


4.9

Truck Hero, Inc.

Truck Trailer Manufacturing




















Senior Secured Loan



10.46%

(L +8.25%)

5/30/2017

4/21/2025

7,014


6,975


7,083


3.9