Oxford Square Capital Corp. (OXSQ): Business Model Canvas [Dec-2025 Updated]

You're digging into Oxford Square Capital Corp. (OXSQ) to see how this Business Development Company (BDC) actually prints money, and honestly, it's all about smart credit deployment and fee capture. As a seasoned analyst, I can tell you their model hinges on managing a portfolio-like the $241.5 million in investments noted in Q2 2025-to generate that eye-popping current income, hitting nearly 18.7% yield for shareholders recently. We'll break down exactly how they pair their key activity of sourcing debt with their revenue streams, which are heavily weighted toward a 14.5% weighted average yield on corporate debt, all while managing the costs like the 1.50% base management fee paid to their adviser. Keep reading to see the full nine-block map of how Oxford Square Capital Corp. structures its business for that high yield you're tracking.

Oxford Square Capital Corp. (OXSQ) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that make Oxford Square Capital Corp. (OXSQ) run, the entities that help them source deals and manage the capital. These partnerships are critical because, as a Business Development Company (BDC), their success hinges on external expertise and market access.

• Oxford Square Management, LLC (Investment Adviser)
• Oxford Funds, LLC (Administrator)
• CLO managers and sponsors for structured finance vehicles
• Underwriters and placement agents for debt and equity offerings
• Syndicated loan market participants for corporate debt sourcing

The relationship with Oxford Square Management, LLC is governed by an Investment Advisory Agreement. The Base Fee paid to the adviser is calculated at an annual rate of 1.50% based on gross assets, effective since April 1, 2016. As of July 8, 2025, the Board concluded that the current fee structure charged by Oxford Square Management to Oxford Square Capital Corp. is reasonable when compared to other BDCs with similar investment objectives.

Oxford Funds, LLC, which shares the corporate office address of 8 Sound Shore Drive, Suite 255, Greenwich, CT 06830, is also a key partner. Rosenthal, the President and Chief Operating Officer of Oxford Square Capital Corp., directly or indirectly owns or controls all equity interests of Oxford Funds.

The company relies heavily on its structured finance partnerships, specifically with CLO managers and sponsors. As of the quarter ended September 30, 2025, 37% of Oxford Square Capital Corp.'s total invested portfolio fair value was in CLO equity investments. The weighted average effective yield on these CLO equity investments, based on the start of the quarter cost for existing investments, stood at 9.7% for Q3 2025. It's important to note that as of September 30, 2025, Oxford Square Capital Corp. held no CLO debt positions.

Here's a snapshot of the CLO equity exposure and associated yields as of late 2025:

For capital raising, underwriters and placement agents are essential. In the third quarter of 2025, Oxford Square Capital Corp. completed an issuance of $74.8 million aggregate principal amount of 7.75% unsecured notes due July 2030. Earlier in 2025, for the quarter ending March 31, 2025, the company issued approximately 1.3 million shares of common stock through an "at-the-market" offering.

The sourcing of corporate debt investments connects Oxford Square Capital Corp. directly to the syndicated loan market. As of September 30, 2025, the portfolio's debt investments had a weighted average yield at current cost of 14.6%. The underlying market context for these debt investments showed loan prices at 97.06% of par and a 12-month trailing default rate of 1.47% in Q3 2025. At that same date, 47% of the total invested portfolio fair value was in first-lien secured debt.

Finance: draft the impact of the $74.8 million note issuance on the Q4 2025 base management fee calculation by Monday.

Oxford Square Capital Corp. (OXSQ) - Canvas Business Model: Key Activities

You're mapping out the core engine of Oxford Square Capital Corp. (OXSQ) as of late 2025. This is where the real work of a Business Development Company (BDC) gets done-managing the assets and keeping the capital flowing to support those assets.

The primary activity centers on the deployment and oversight of capital into corporate debt and structured products. As of the second quarter of 2025, the total fair value of the investment portfolio stood at approximately $241.4 million, spread across various asset classes.

Sourcing and underwriting are constant processes. Oxford Square Capital Corp. focuses its investment efforts on corporate debt securities and Collateralized Loan Obligation (CLO) structured finance investments that themselves own corporate debt securities. For instance, the weighted average credit rating for the underlying loans of its CLO equity tranche positions was equivalent to a Moody's corporate debt rating of between B1 and B2, with a Weighted Average Rating Factor of 2702 as of September 30, 2025. This is a key part of monitoring credit performance.

Capital raising is essential to fuel new investments and manage the balance sheet. Oxford Square Capital Corp. actively uses its permanent capital structure. During the first half of 2025, the company executed multiple capital raises:

• Issued approximately 1.3 million shares of common stock in Q1 2025, netting proceeds of about $3.5 million.
• Issued approximately 4.9 million shares via an "at-the-market" offering in Q2 2025, resulting in net proceeds of approximately $11.6 million.
• Issued $74.8 million of 7.75% unsecured notes due July 2030 in Q3 2025.

Managing and declaring monthly common stock distributions is a core function for a Business Development Company. Oxford Square Capital Corp. maintained a consistent monthly payout policy through the second half of 2025. The declared distribution was $0.035 per share for each of the months ending October 31, November 30, and December 31, 2025. This translates to an annualized payout of $0.42 per share based on that rate. For context, the total distribution amount paid through 11 months in 2025 reached $0.385 per share.

Monitoring the credit performance of the underlying corporate borrowers is continuous, often tracked through broader market indices and internal metrics. Here's a snapshot of key credit indicators Oxford Square Capital Corp. tracks:

• The distress ratio, defined as the percentage of loans priced below 80% of PAR, ended Q2 2025 at 3.06%, slightly up from 3.02% at the end of March 2025.
• By the end of Q3 2025, the 12-month trailing default rate for the loan index increased to 1.47% by principal amount.
• Loan prices, as defined by the MSAR LSTA US Leveraged Loan Index, were at 97.06% of par as of September 30, 2025.

Oxford Square Capital Corp. (OXSQ) - Canvas Business Model: Key Resources

You're mapping out the core assets Oxford Square Capital Corp. relies on to execute its investment strategy as of late 2025. These resources are the foundation for their goal of maximizing total return through debt and CLO equity investments.

Investment portfolio of secured debt and CLO equity/debt tranches

The physical assets are the investments themselves, which Oxford Square Capital Corp. manages to generate current income and total return. As of September 30, 2025, the total invested portfolio fair value stood at $260.5 million, spread across 59 portfolio investments. The overall balance sheet supported this with Total Assets reported at $314.7 million.

The portfolio maintains a focus on senior secured loans and CLO equity, though the mix shifts based on opportunity. The structure as of the end of Q3 2025 showed:

• - Senior secured debt: 54.5% of the total invested portfolio fair value.
• - CLO equity: A key focus, with management noting they reached the maximum capacity for additions without portfolio rotation.
• - CLO debt tranches: None held as of September 30, 2025.

Yields on the deployed capital show the expected return profile from these assets:

The debt portfolio's weighted-average credit rating on a fair value basis was 2.2.

Intellectual capital of Oxford Square Management, LLC

The expertise resides with the investment adviser, Oxford Square Management, LLC, which is registered under the Investment Advisers Act of 1940. The leadership team, including CEO Mr. Jonathan H. Cohen, directs the strategy for seeking attractive risk-adjusted total return. This intellectual capital is crucial for navigating the credit markets and identifying opportunistic secondary loan positions.

Permanent capital structure as a publicly-traded BDC

Oxford Square Capital Corp. operates as a publicly-traded closed-end management investment company on the NASDAQ under the ticker OXSQ. Its status as a Business Development Company (BDC) under the Investment Company Act of 1940 defines its regulatory framework. As of September 30, 2025, the company employed leverage, with Total Debt at $151.391 million (in thousands). This resulted in a debt-to-equity ratio of 0.98x for the quarter, up from 0.73x in the prior quarter.

Financial capital raised from debt and equity markets

Oxford Square Capital Corp. actively manages its balance sheet to fund portfolio growth. In Q3 2025, the company executed significant capital structure repositioning:

• - Issued $74.8 million of 7.75% unsecured notes due July 2030 (OXSQH).
• - Repaid the remaining balance of $34.8 million of 6.25% unsecured notes due April 2026.
• - Raised net proceeds of approximately $11.8 million from the issuance of common stock through an at-the-market offering (approximately 5.4 million shares).

The total capital base, reflected in Total Assets, stood at $314.7 million as of September 30, 2025.

$25 million authorized share repurchase program (Q3 2025)

Management signaled confidence in the stock's valuation by authorizing a share repurchase program of up to $25 million. This program is valid until October 30, 2026. As of November 4, 2025, the market capitalization was reported as $147.5M.

Oxford Square Capital Corp. (OXSQ) - Canvas Business Model: Value Propositions

You're looking at how Oxford Square Capital Corp. delivers value to its shareholders and the market, which centers heavily on generating high, consistent cash flow from specialized credit investments. This isn't about lending to Main Street; it's about providing capital to the corporate debt layer of the economy, primarily through complex structures.

High current income generation for public shareholders is a core proposition. While the prompt mentioned a yield near 18.7% in Q2 2025, the latest reported forward dividend yield as of December 5, 2025, was 22.70%. The annual dividend is stated as $0.42 per share. For the third quarter of 2025, the company reported a net investment income (NII) of approximately $5.6 million, or $0.07 per share. The declared monthly distribution rate maintained through the end of 2025 was $0.035 per share for October, November, and December 2025.

The mechanism for this income is access to diversified, non-public credit markets. Oxford Square Capital Corp. invests primarily in corporate debt securities and Collateralized Loan Obligation (CLO) structured finance investments. This gives public shareholders exposure to assets not easily accessible otherwise. Here's a look at the portfolio structure as of the end of the first quarter of 2025, which details this access:

This structure shows a heavy tilt toward senior secured assets, which is intended to manage risk while capturing attractive coupons. The weighted average yield on debt investments was reported at 14.5% in Q2 2025.

The company provides capital provision to early- and middle-stage businesses indirectly by investing in the debt and equity tranches of CLO vehicles that hold these underlying corporate loans. This is a key function of a Business Development Company (BDC). The total fair value of the investment portfolio was about $243.2 million across 61 positions at the end of Q1 2025.

Finally, the overarching value proposition is maximizing total return through current income and capital appreciation. While current income is emphasized by the high yield, the total return objective is also present, though analysts have projected a medium-term annualized total return potential of 4.6%. The company's investment objective is explicitly stated as maximizing the portfolio's total return. You see the tension between income and appreciation when looking at the results; for instance, Q3 2025 saw NII of $5.6 million but also combined net unrealized and realized losses of $7.5 million.

The key income metrics from recent quarters include:

• Total investment income for Q3 2025: $10.2 million.
• Net investment income (NII) for Q2 2025: approximately $5.5 million, or $0.08 per share.
• Net asset value (NAV) per share as of September 30, 2025: $1.95.

Finance: draft 13-week cash view by Friday.

Oxford Square Capital Corp. (OXSQ) - Canvas Business Model: Customer Relationships

The relationship Oxford Square Capital Corp. maintains with its direct owners, the public shareholders, is fundamentally transactional, governed by market mechanics and regulatory requirements.

Transactional relationship with public shareholders via NASDAQ listings

• The common stock of Oxford Square Capital Corp. trades on the NASDAQ Global Select Market LLC.
• The relationship is executed through the buying and selling of shares on this exchange.

Regular financial disclosure and investor relations (quarterly calls)

Oxford Square Capital Corp. adheres to a regular cadence of communication to keep its shareholder base informed. For instance, the company released its Q2 2025 results on August 7, 2025, and followed this with the Q3 2025 earnings release and conference call scheduled for Tuesday, November 4, 2025, at 9:00 AM Eastern time. The Q1 2025 results were released on April 25, 2025.

These disclosures provide key metrics that define the relationship:

• Net Asset Value (NAV) per share stood at $2.06 at the end of Q2 2025, declining to $1.95 by the end of Q3 2025.
• Net Investment Income (NII) for Q3 2025 totaled $3.8 million, or $0.07 per share.
• Total Investment Income (Revenue) for Q3 2025 was reported at $10.24 million.

Indirect, arms-length relationship with underlying corporate borrowers

The relationship with the actual corporate borrowers is indirect and arms-length, as Oxford Square Capital Corp. primarily invests in their debt or the debt instruments of vehicles holding that debt. The nature of this relationship is defined by the portfolio composition and yield metrics as of mid-2025.

The weighted average cash distribution yield on income-producing secured notes was 9.0% in Q2 2025.

Monthly distribution payments to maintain shareholder loyalty

Maintaining consistent monthly distributions is a core mechanism Oxford Square Capital Corp. uses to foster shareholder loyalty. The Board declared distributions of $0.035 per share for each of the months ending October, November, and December 2025. This policy was further extended, with distributions of $0.035 per share declared for January, February, and March of 2026.

This distribution level supports a dividend yield reported at 18.7% at one point. The Net Investment Income (NII) per share in Q2 2025 was $0.08, which covered the $0.035 monthly distribution for that period. The company also authorized a share repurchase program of up to $25 million in November 2025, reflecting another action aimed at enhancing shareholder value.

Oxford Square Capital Corp. (OXSQ) - Canvas Business Model: Channels

You're looking at how Oxford Square Capital Corp. gets its offerings and information out to the market as of late 2025. It's a mix of traditional exchange listings, capital markets activity, and digital disclosures. Here's the quick math on the primary channels they use to connect with investors and raise capital.

The most direct channel for common shareholders is the public stock exchange listing. Oxford Square Capital Corp. common stock trades under the ticker symbol OXSQ on the NASDAQ-GS (Global Select Market).

The company also uses specific tickers for its notes, which are key debt channels for investors. These include OXSQG and OXSQH. As of early December 2025, the common stock was trading around $1.84 per share. This price point sits between the 52-week low of $1.56 and the 52-week high of $2.87. The market capitalization was approximately $149.46 million as of November 2025, based on roughly 81.67 million shares outstanding.

For raising capital, Oxford Square Capital Corp. relies heavily on investment banks and brokers for debt and equity offerings. A significant recent example is the public offering priced on August 1, 2025, involving $65 million in unsecured notes carrying a 7.75% interest rate, due in 2030, which trade under OXSQH. This is layered on top of existing debt, such as the $80.5 million of 5.50% notes due July 2028 (OXSQG) as of September 30, 2025. Equity capital has also been raised through the market, with approximately 4.9 million shares issued via an at-the-market offering in Q2 2025, netting proceeds of about $11.6 million.

Investor communication and regulatory transparency flow through the Investor Relations website and mandatory SEC filings. The company makes its latest financial data available digitally. For instance, the Q3 2025 results were announced via press release on November 4, 2025, and the corresponding 10-Q filing followed around November 7, 2025.

You can track the key financial metrics released through these channels:

• Net Asset Value (NAV) per share as of September 30, 2025: $1.95.
• Total Assets as of September 30, 2025: $314.7 million.
• Net Investment Income (NII) for Q3 2025: $5.6 million.
• Monthly common stock distribution rate declared for early 2026: $0.035 per share.

The investment portfolio itself is accessed and managed through the syndicated loan and CLO primary/secondary markets, which is where the company deploys capital. The deployment activity in Q3 2025 saw $58.1 million in new investments.

Here is a breakdown of the investment portfolio composition as of September 30, 2025, which reflects the assets being channeled through these markets:

The weighted average grade for debt investments, based on fair value as of September 30, 2025, was 2.2. The company's leverage channel is reflected in its debt-to-equity ratio, which stood at 0.98x as of September 30, 2025.

The core trading and information channels for Oxford Square Capital Corp. are:

• Public Listing: NASDAQ-GS (Common Stock: OXSQ).
• Debt Instruments: Notes trading as OXSQG and OXSQH.
• Capital Raising: Use of investment banks for offerings, such as the recent $65 million note issuance.
• Regulatory Disclosure: Quarterly 10-Q filings and Current Reports (8-K) available via the IR website.

Finance: draft 13-week cash view by Friday.

Oxford Square Capital Corp. (OXSQ) - Canvas Business Model: Customer Segments

You're looking at who Oxford Square Capital Corp. serves, which really boils down to three distinct groups that fuel its investment engine. Honestly, understanding these segments is key to seeing where the money comes from and where it goes.

The first group is the capital providers-the people and funds buying Oxford Square Capital Corp. stock because they want that high dividend yield. As of the latest data in 2025, the ownership structure shows a heavy reliance on individual investors. Retail investors hold a commanding 83.87% of the company, while institutional shareholders account for 7.29%. Insiders hold 8.84%. This means the dividend policy is definitely geared toward satisfying a large retail base seeking income, even as the company's Market Cap stood at $150.54 million with 81.67 million shares outstanding.

The next two segments are on the investment side, where Oxford Square Capital Corp. deploys that capital, primarily through Collateralized Loan Obligations (CLOs). The CLO issuers and managers are the entities that create the structured vehicles Oxford Square Capital Corp. invests in. The scale of this commitment is significant; as of June 30, 2025, the fair value of CLO equity investments was approximately $89.3 million. This is a core focus, representing about 38% of the total invested portfolio fair value.

The corporate borrowers are the ultimate recipients of financing, though Oxford Square Capital Corp. accesses them indirectly through the CLOs. The quality of the underlying assets in these CLOs gives you a sense of the borrower profile. For its CLO equity positions as of September 30, 2025, the Weighted Average Rating Factor (WARF) was 2702. Here's a quick look at how the investment portfolio was structured to serve these needs as of mid-2025, which shows the direct financing component:

The direct lending component, which targets those early- and middle-stage businesses, involved investments in debt securities or loans to 20 portfolio companies as of June 30, 2025. These debt investments carried stated interest rates between 7.08% and 12.70%. The secured debt portion of the total portfolio was about 61% as of Q1 2025, split between 48% first-lien and 13% second-lien positions. This mix shows a clear preference for senior secured assets, even when financing smaller enterprises through the CLO wrapper or directly.

The capital raised from shareholders directly supports these activities. For instance, in Q3 2025, Oxford Square Capital Corp. completed an offering of notes totaling $74.8 million. This new capital is what helps them continue to deploy funds into the CLO structures and direct corporate loans, keeping the flow to the underlying borrowers active. The net investment income for Q3 2025 was approximately $5.6 million, or $0.07 per share. Finance: draft the next quarter's CLO equity cash distribution yield projection by next Tuesday.

Oxford Square Capital Corp. (OXSQ) - Canvas Business Model: Cost Structure

You're looking at the expenses that drive the operations for Oxford Square Capital Corp. (OXSQ) as of mid-to-late 2025, based on the latest reported figures, primarily from the second quarter of 2025.

The cost structure is heavily influenced by fees paid to the Investment Adviser and the cost of its outstanding debt. For the quarter ended June 30, 2025, the total expenses were approximately $4.0 million.

Key components of the cost structure include:

• The Base Management Fee paid to the Investment Adviser is set at 1.50% of the average value of Oxford Square Capital Corp.'s gross assets, calculated quarterly in arrears.
• Interest expense on outstanding debt is a significant component. For Q2 2025, the reported interest expense was $1,929,045. This cost relates to various borrowings, including the existence of the 7.75% unsecured notes due July 31, 2030 (NasdaqGS: OXSQH). As of June 30, 2025, the principal amount of debt outstanding was $115.3 million.
• Incentive fees are performance-based and subject to a Total Return Requirement. The structure dictates that a net investment income incentive fee is not payable unless the Pre-Incentive Fee Net Investment Income exceeds the Preferred Return Amount. Furthermore, the fee is subject to a total return requirement, meaning the fee is only payable if the cumulative net increase in net assets resulting from operations over the current quarter and the preceding eleven quarters exceeds the cumulative incentive fees accrued or paid for that same period.

Here is a snapshot comparing key expense and debt-related figures from Q2 2025:

The debt portfolio as of Q2 2025 included notes with coupons such as 6.25% (due April 2026) and 5.50% (due July 2028), alongside the pricing of $65 million of 7.75% notes due 2030 during the quarter.

Oxford Square Capital Corp. (OXSQ) - Canvas Business Model: Revenue Streams

You're looking at how Oxford Square Capital Corp. actually brings in the cash to support its operations and distributions as of late 2025. Honestly, for a Business Development Company like Oxford Square Capital Corp., the revenue streams are pretty concentrated, which is typical for this asset class.

The lion's share of the money comes from the interest payments on the corporate debt it holds. For the second quarter of 2025, the weighted average yield on its debt investments was right at 14.5%. That's the core engine. By the third quarter of 2025, that debt investment yield actually ticked up a bit to 14.6%, showing the portfolio was earning a bit more on the underlying loans, even as the overall Net Asset Value per share faced pressure.

Here's a quick look at the key income drivers and the resulting top-line number we saw in Q3 2025:

The second major piece of the puzzle is the income generated from its positions in Collateralized Loan Obligations (CLOs), specifically the equity and junior debt tranches. These are riskier but offer higher potential returns when the underlying loans perform well. You saw the effective yield on CLO equity move from 8.8% in Q2 2025 up to 9.7% in Q3 2025, which helped drive the overall investment income higher sequentially.

To be fair, the cash received from these CLO equity positions, which is what really matters for distributions, showed a different picture in Q2 2025:

• Cash distribution yield on cash-generating CLO equity (Q2 2025): 13.8%.
• Cash distribution yield on cash-generating CLO equity (Q1 2025): 15.5%.

As for other potential revenue sources, like fee income charged directly to portfolio companies for management or advisory services, that stream remains negligible. For Oxford Square Capital Corp. as of late 2025, the fee income component is currently minimal or zero.

Finance: draft the Q4 2025 projected investment income based on current portfolio size and yields by next Tuesday.