OXSQH · Oxford Square Capital Corp.

Oxford Square Capital Corp.’s Q1 2026 results reflect pronounced deterioration in operating fundamentals and portfolio health. While net investment income remained positive at $4.1 million ($0.05/share), it declined 23% sequentially — driven by lower total investment income ($8.9M vs. $10.4M in Q4 2025), particularly from CLO equity investments ($3.2M vs. $3.96M) and debt interest ($4.3M vs. $4.8M). The $30.7 million in net realized losses — over three times the prior quarter’s $12.2M — dominated the income statement, resulting in a $25.5 million net decrease in net assets, compared to $8.1 million in Q4 2025. This loss pressure, combined with only $1.1 million in net unrealized appreciation, caused NAV to fall sharply to $1.32 — a 22% decline from $1.69 — underscoring material valuation stress. Credit quality concerns intensified: two positions totaling $8.7 million in fair value were placed on non-accrual status, including a $3.5 million debt investment and $5.2 million in preferred equity. Though the Company maintained its $0.035 monthly distribution pace — implying full coverage by Q1 NII ($0.05/share) — the sustainability of payouts is increasingly contingent on capital preservation rather than recurring income, especially given the widening gap between NII and NAV erosion. The $12.3 million ATM issuance added dilution without reversing the downward trend in per-share metrics, and the absence of forward guidance in Exhibit 99.1 leaves investors without clarity on near-term stabilization efforts.