AP NEWS

Oxford Square Capital Corp. Announces Results of Operations for the Quarter Ended June 30, 2018 and Announces Quarterly Distribution of $0.20 per Share

July 31, 2018

GREENWICH, Conn., July 31, 2018 (GLOBE NEWSWIRE) -- Oxford Square Capital Corp. (NasdaqGS: OXSQ) (NasdaqGS:OXSQL) (“OXSQ,” the “Company,” “we,” “us” or “our”) announced today its financial results for the quarter ended June 30, 2018, and announced a distribution of $0.20 per share for the quarter ending September 30, 2018.

-- As of June 30, 2018, net asset value per share was $7.56 compared with the net asset value per share as of March 31, 2018 of $7.60, and a net asset value per share as of December 31, 2017 of $7.55. -- For the quarter ended June 30, 2018 we recorded net investment income of approximately $7.7 million, or $0.15 per share compared with approximately $8.7 million or $0.17 per share for the quarter ended March 31, 2018. We recorded net realized losses of approximately $1.0 million, and net unrealized appreciation of approximately $0.3 million for the quarter ended June 30, 2018. In total, we had a net increase in net assets from operations of approximately $6.9 million, or approximately $0.14 per share, for the quarter ended June 30, 2018 compared with approximately $11.5 million, or $0.22 per share for the quarter ended March 31, 2018. -- Our core net investment income (“Core NII”) for the quarter ended June 30, 2018 was $9.1 million, or approximately $0.18 per share compared with approximately $7.6 million or $0.15 per share for the quarter ended March 31, 2018. o Core NII represents net investment income adjusted for additional cash distributions received, or entitled to be received (if any, in either case), on our collateralized loan obligation (“CLO”) equity investments and also excludes any capital gains incentive fees we recognize but have no obligation to pay in any period. See additional information under “Supplemental Information Regarding Core Net Investment Income” below. o While our experience has been that cash flow distributions have historically represented useful indicators of our CLO equity investments’ annual taxable income during certain periods, we believe that current and future cash flow distributions may represent less accurate indicators of taxable income with respect to our CLO equity investments than they have in the past. Accordingly, our taxable income may be materially different than either GAAP NII or Core NII. -- Total investment income for the second quarter of 2018 amounted to approximately $12.5 million, which represents a decrease of approximately $0.8 million from the first quarter of 2018. o For the quarter ended June 30, 2018, we recorded investment income from our portfolio as follows: -- approximately $5.9 million from our debt investments, -- approximately $6.1 million from our CLO equity investments, and -- approximately $0.5 million from all other sources. -- Our total expenses for the quarter ended June 30, 2018 were approximately $4.8 million, up by approximately $0.2 million compared to the first quarter of 2018. This increase is primarily attributable to higher professional fees. -- During the second quarter of 2018: o We made investments of approximately $87.9 million in corporate loan investments and $0.9 million in CLO debt investments. o We received or were entitled to receive proceeds of approximately $43.7 million from repayments and amortization payments on our debt investments, and $0.2 million from sales of our CLO equity investments. -- As of June 30, 2018, the following metrics applied (note that none of these values represent a total return to shareholders): o The weighted average yield of our debt investments was approximately 9.7% at current cost, compared with 9.9% as of March 31, 2018. o The weighted average effective yield of our CLO equity investments at current cost was approximately 14.5%, compared with 15.9% as of March 31, 2018. o The weighted average cash distribution yield of our CLO equity investments at current cost was approximately 18.0%, compared with 15.5% as of March 31, 2018. -- Our weighted average credit rating on a fair value basis was 2.0 at the end of the second quarter of 2018 (compared to 2.1 at the end of the first quarter of 2018). -- As of June 30, 2018, we had no investments on non-accrual status. -- On July 26, 2018, our board of directors declared the following distribution on our common stock:

Quarter Ending Record Date Payment Date Amount Per Share ------------------ ------------------ ------------------ ---------------- September 30, 2018 September 14, 2018 September 28, 2018 $0.20 ------------------ ------------------ ------------------ ----------------

-- On February 5, 2018, the Board of Directors authorized a stock repurchase program of $25 million. Since inception of the program through June 30, 2018 we repurchased approximately 2.1 million shares of our common stock at a weighted average share price of $6.41 per share totaling approximately $13.3 million. Through June 30, 2018, our stock repurchase program has produced an accretion of approximately $0.05 per share. -- On June 21, 2018, we announced that Oxford Square Funding 2018, LLC, a special purpose vehicle that is a wholly-owned subsidiary of the Company, entered into a credit facility (the “Facility”) with Citibank. Pricing under the Facility is based on 3-month LIBOR plus 2.25% per year. Pursuant to the terms of the credit agreement governing the Facility, we have borrowed approximately $95.2 million. The Facility will mature on June 21, 2020.

Supplemental Information Regarding Core Net Investment Income

On a supplemental basis, we provide information relating to core net investment income, which is a non-GAAP measure. This measure is provided in addition to, but not as a substitute for, net investment income determined in accordance with GAAP. Our non-GAAP measures may differ from similar measures by other companies, even if similar terms are used to identify such measures. Core net investment income represents net investment income adjusted for additional cash distributions received, or entitled to be received (if any, in either case), on our CLO equity investments (excluding those cash distributions believed to represent a return of capital) and also excludes any capital gains incentive fees we recognize but have no obligation to pay in any period. The Company did not recognize any capital gains incentive fees for the quarter ended June 30, 2018.

Income from investments in the “equity” class securities of CLO vehicles, for GAAP purposes, is recorded using the effective interest method based upon an effective yield to the expected redemption utilizing estimated cash flows compared to the cost, resulting in an effective yield for the investment; the difference between the actual cash received or distributions entitled to be received and the effective yield calculation is an adjustment to cost. Accordingly, investment income recognized on CLO equity securities in the GAAP statement of operations differs from the cash distributions actually received by us during the period (referred to below as “CLO equity adjustments”).

Further, in order to continue to qualify to be taxed as a regulated investment company (“RIC”), we are required, among other things, to distribute at least 90% of our investment company taxable income annually. Therefore, core net investment income may provide a better indication of estimated taxable income for a reporting period than does GAAP net investment income, although we can offer no assurance that will be the case as the ultimate tax character of our earnings cannot be determined until tax returns are prepared after the end of a fiscal year. We note that these non-GAAP measures may not be useful indicators of taxable earnings, particularly during periods of market disruption and volatility and our taxable income may differ materially from our core net investment income.

The following table provides a reconciliation of net investment income to core net investment income for the three months ended June 30, 2018 and June 30, 2017:

June 30, 2018 June 30, 2017 ----------------------- ----------------------- Amount Per Share Amount Per Share Amounts Amounts ------------ --------- ------------ --------- Net investment income $ 7,688,011 $ 0.154 $ 8,046,907 $ 0.156 CLO equity adjustments 1,413,926 0.028 1,737,958 0.034 - --------- - ----- - --------- - ----- Core net investment income $ 9,101,937 $ 0.182 $ 9,784,865 $ 0.190 - --------- - ----- - --------- - -----

We will host a conference call to discuss our second quarter results today, Tuesday, July 31, 2018 at 09:00 AM ET. Please call 1-888-339-0740 to participate. A replay of the conference call will be available for approximately 30 days. The replay number is 1-877-344-7529, and the replay passcode is 10122752.

A presentation containing further detail regarding our quarterly results of operations has been posted under the Investor Relations section of our website at www.oxfordsquarecapital.com.

The following financial statements are unaudited and without footnotes. Readers who would like additional information should obtain our Form 10-Q for the period ended June 30, 2018, and subsequent reports on Form 10-Q as they are filed.

OXFORD SQUARE CAPITAL CORP. CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (unaudited) June 30, 2018 December 31, 2017 (unaudited) -------------- - -------------- - ASSETS Non-affiliated/non-control investments (cost: $450,822,337 @ 6/30/18; $ 432,929,878 $ 400,223,439 $418,990,080 @ 12/31/17) Affiliated investments (cost: $10,450,787 @ 6/30/18; $10,528,740 @ 20,004,363 18,218,787 12/31/17) Cash equivalents 124,238,303 30,013,842 Restricted cash 1,856,479 — Interest and distributions receivable 3,757,276 5,085,494 Other assets 758,301 579,694 ------------ - ------------ - Total assets $ 583,544,600 $ 454,121,256 ------------ - ------------ - LIABILITIES Notes payable – Credit Facility, net of deferred issuance costs $ 94,983,678 $ — Notes payable – 6.50% Unsecured Notes, net of deferred issuance costs 62,501,177 62,340,159 Securities purchased not settled 49,359,978 — Base management fee and net investment income incentive fee payable to 2,582,101 2,706,099 affiliate Accrued interest payable 132,735 11,621 Accrued expenses 577,207 644,735 ------------ - ------------ - Total liabilities 210,136,876 65,702,614 ------------ - ------------ - NET ASSETS Common stock, $0.01 par value, 100,000,000 shares authorized; 49,407,609 494,076 514,794 and 51,479,409 shares issued and outstanding, respectively Capital in excess of par value 516,037,155 529,297,749 Distributions in excess of net investment income (28,782,735 ) (25,072,262 ) Net unrealized depreciation on investments (8,338,923 ) (11,076,594 ) Accumulated net realized losses on investments (100,764,733 ) (100,007,929 ) Accumulated realized losses on extinguishment of debt (5,237,116 ) (5,237,116 ) ------------ - ------------ - Total net assets 373,407,724 388,418,642 ------------ - ------------ - Total liabilities and net assets $ 583,544,600 $ 454,121,256 ------------ - ------------ - Net asset value per common share $ 7.56 $ 7.55

OXFORD SQUARE CAPITAL CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three Months Three Months Six Months Six Months Ended Ended Ended Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 -------------- -------------- -------------- -------------- INVESTMENT INCOME From non-affiliated investments: Interest income – debt investments $ 5,851,355 $ 6,717,197 $ 11,673,092 $ 13,789,404 Income from securitization vehicles and 6,100,764 9,426,014 12,903,628 17,995,617 investments Other income 465,203 768,682 1,087,186 1,510,171 - ---------- - - ---------- - - ---------- - - ---------- - Total investment income from non-affiliated 12,417,322 16,911,893 25,663,906 33,295,192 investments - ---------- - - ---------- - - ---------- - - ---------- - From affiliated investments: Interest income – debt investments 101,400 100,260 201,616 182,441 - ---------- - - ---------- - - ---------- - - ---------- - Total investment income from affiliated 101,400 100,260 201,616 182,441 investments - ---------- - - ---------- - - ---------- - - ---------- - Total investment income 12,518,722 17,012,153 25,865,522 33,477,633 - ---------- - - ---------- - - ---------- - - ---------- - EXPENSES Base management fee 1,742,391 2,182,173 3,422,205 4,452,175 Interest expense 1,250,694 4,128,335 2,376,774 7,433,918 Professional fees 348,159 589,841 505,077 1,342,234 Compensation expense 216,133 203,339 476,222 438,373 General and administrative 433,624 651,417 834,195 1,217,163 - ---------- - - ---------- - - ---------- - - ---------- - Total expenses before incentive fee 3,991,001 7,755,105 7,614,473 14,883,863 - ---------- - - ---------- - - ---------- - - ---------- - Net investment income incentive fee 839,710 1,210,141 1,839,942 2,263,621 Capital gains incentive fee — — — — - ---------- - - ---------- - - ---------- - - ---------- - Total incentive fees 839,710 1,210,141 1,839,942 2,263,621 - ---------- - - ---------- - - ---------- - - ---------- - Total expenses 4,830,711 8,965,246 9,454,415 17,147,484 - ---------- - - ---------- - - ---------- - - ---------- - Net investment income 7,688,011 8,046,907 16,411,107 16,330,149 - ---------- - - ---------- - - ---------- - - ---------- - Net change in unrealized appreciation/depreciation on investments Non-Affiliated investments (2,477,460 ) 1,499,946 874,142 10,759,231 Affiliated investments 2,737,099 (466,884 ) 1,863,529 (78,111 ) ---------- - ---------- - ---------- - ---------- - Total net change in unrealized 259,639 1,033,062 2,737,671 10,681,120 appreciation/depreciation on investments - ---------- - - ---------- - - ---------- - - ---------- - Net realized gains/(losses) Non-Affiliated investments (1,045,739 ) 542,959 (756,804 ) (4,925,712 ) Extinguishment of debt — (505,032 ) — (913,702 ) - ---------- - - ---------- - - ---------- - - ---------- - Total net realized gains/(losses) (1,045,739 ) 37,927 (756,804 ) (5,839,414 ) - ---------- - - ---------- - - ---------- - - ---------- - Net increase in net assets resulting from $ 6,901,911 $ 9,117,896 $ 18,391,974 $ 21,171,855 operations - ---------- - - ---------- - - ---------- - - ---------- - Net increase in net assets resulting from net investment income per common share: (Basic and Diluted) $ 0.15 $ 0.16 $ 0.32 $ 0.32 Net increase in net assets resulting from operations per common share: (Basic and Diluted) $ 0.14 $ 0.18 $ 0.36 $ 0.41 Weighted average shares of common stock outstanding: Basic 50,086,563 51,479,409 50,640,236 51,479,409 Diluted 50,086,563 59,727,707 50,640,236 59,727,707 Distributions per share $ 0.20 $ 0.20 $ 0.40 $ 0.40

OXFORD SQUARE CAPITAL CORP.

FINANCIAL HIGHLIGHTS - UNAUDITED

Financial highlights for the three and six months ended June 30, 2018 and June 30, 2017 are as follows:

Three Months Three Months Six Months Six Months Ended Ended Ended Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 -------------- --------------- -------------- -------------- Per Share Data Net asset value as of beginning of period $ 7.60 $ 7.53 $ 7.55 $ 7.50 - ---------- - ---------- - ---------- - ---------- Net investment income(1) 0.15 0.16 0.32 0.32 Net realized and unrealized (losses)/gains(2) (0.01 ) 0.02 0.04 0.09 - ---------- - ---------- - ---------- - ---------- Net change in net asset value from operations 0.14 0.18 0.36 0.41 - ---------- - ---------- - ---------- - ---------- Distributions per share from net investment (0.20 ) (0.20 ) (0.40 ) (0.40 ) income Distributions based on weighted average share — — — — impact - ---------- - ---------- - ---------- - ---------- Total distributions(3) (0.20 ) (0.20 ) (0.40 ) (0.40 ) Effect of shares repurchased, gross 0.02 — 0.05 — - ---------- - ---------- - ---------- - ---------- Net asset value at end of period $ 7.56 $ 7.51 $ 7.56 $ 7.51 - ---------- - ---------- - ---------- - ---------- Per share market value at beginning of period $ 6.11 $ 7.38 $ 5.74 $ 6.61 Per share market value at end of period $ 6.90 $ 6.34 $ 6.90 $ 6.34 Total return based on market value(4) 16.20 % (11.38 )% 27.74 % 1.62 % Total return based on net asset value(5) 2.11 % 2.34 % 5.43 % 5.43 % Shares outstanding at end of period 49,407,609 51,479,409 49,407,609 51,479,409 Ratios/Supplemental Data(8) Net assets at end of period (000’s) 373,408 386,573 373,408 386,573 Average net assets (000’s) 379,613 387,162 383,506 387,017 Ratio of operating expenses to average net 5.09 % 9.26 % 4.93 % 8.86 % assets(6) Ratio of net investment income to average net 8.10 % 8.31 % 8.56 % 8.44 % assets(6) Portfolio turnover rate(7) 10.73 % 18.36 % 15.22 % 25.23 %

(1) Represents per share net investment income for the period, based upon average shares outstanding. (2) Net realized and unrealized gains include rounding adjustments to reconcile change in net asset value per share. Management monitors available taxable earnings, including net investment income and realized capital gains, to determine if a tax return of capital may occur for the year. To the extent the Company’s (3) taxable earnings fall below the total amount of the Company’s distributions for that fiscal year, a portion of those distributions may be deemed a tax return of capital to the Company’s stockholders. The ultimate tax character of the Company’s earnings cannot be determined until tax returns are prepared after the end of the fiscal year. Total return based on market value equals the increase or decrease of ending market value over beginning (4) market value, plus distributions, divided by the beginning market value, assuming distribution reinvestment prices obtained under the Company’s distribution reinvestment plan, excluding any discounts. Total return is not annualized. Total return based on net asset value equals the increase or decrease of ending net asset value over (5) beginning net asset value, plus distributions, divided by the beginning net asset value. Total return is not annualized. (6) Annualized. Portfolio turnover rate is calculated using the lesser of the year-to-date cash investment sales and (7) debt repayments or year-to-date cash investment purchases over the average of the total investments at fair value. (8) The following table provides supplemental performance ratios (annualized) measured for the three and six months ended June 30, 2018 and June 30, 2017:

Three Three Six Six Months Months Months Months Ended Ended Ended Ended June June June June 30, 30, 30, 30, 2018 2017 2018 2017 ------- ------- ------- ------- Ratio of expenses to average net assets: Operating expenses before incentive fees 4.21 % 8.01 % 3.97 % 7.69 % Net investment income incentive fees 0.88 % 1.25 % 0.96 % 1.17 % Ratio of expenses, excluding interest expense 3.77 % 5.00 % 3.69 % 5.02 %

About Oxford Square Capital Corp. Oxford Square Capital Corp. is a publicly-traded business development company principally investing in syndicated bank loans and debt and equity tranches of collateralized loan obligation vehicles. CLO investments may also include warehouse facilities, which are financing structures intended to aggregate loans that may be used to form the basis of a CLO vehicle.

Forward-Looking Statements This press release contains forward-looking statements subject to the inherent uncertainties in predicting future results and conditions. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should also be considered to be forward-looking statements. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements. These factors are identified from time to time in our filings with the Securities and Exchange Commission. We undertake no obligation to update such statements to reflect subsequent events, except as may be required by law.

Contact:Bruce Rubin203-983-5280

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