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• A publicly traded Blackstone for mid-sized private companies.
• A Goldman Sachs for middle-market private company financing.

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• Debt Financing: Provides capital to middle-market companies through various loan structures, including senior secured and subordinated debt.
• Equity Investments: Invests in the equity securities of portfolio companies, often alongside debt instruments, to gain ownership participation.

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Major Customers of OFS Capital (OFS)

OFS Capital (OFS) operates as a business development company (BDC), which means it primarily provides financing solutions, such as debt and equity capital, to other companies. Therefore, its "customers" are the businesses in which it invests.

Based on its most recent SEC filings (e.g., 10-K for the fiscal year ended December 31, 2023), OFS Capital's major investments (which can be considered its "customer" companies in the context of capital provision) primarily consist of privately held, middle-market companies. As such, none of these companies have publicly traded stock symbols.

Some of OFS Capital's significant portfolio companies include:

• AeroFlexx I, LLC
• PrimePay, LLC
• First American Payment Systems, L.P.
• GlobalTranz Enterprises, Inc.
• Connecture, Inc.

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• KPMG LLP
• BNY Mellon (Symbol: BK)
• American Stock Transfer & Trust Company, LLC
• Dechert LLP

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Bilal Rashid, Chairman & CEO

Mr. Rashid has served as Chairman of the Board and Chief Executive Officer of OFS Capital Corporation since 2014. He is also Chairman of the Board, President, and Chief Executive Officer of Hancock Park Corporate Income, Inc. and OFS Credit Company, Inc. He has over 25 years of experience in investing related to corporate credit and structured credit, debt capital markets, and investment banking. Mr. Rashid has advised and arranged financing for investment management companies and commercial finance companies, including business development companies. Prior to joining Orchard First Source Capital, Inc. ("OFSC") in 2008, Mr. Rashid was a managing director in the global markets and investment banking division at Merrill Lynch. Before Merrill Lynch, he was a vice president at Natixis Capital Markets, which he joined from Canadian Imperial Bank of Commerce ("CIBC"). Earlier in his career, he worked as an investment analyst in the project finance area at the International Finance Corporation, part of the World Bank, and as a financial analyst at Lehman Brothers.

Kyle Spina, Chief Financial Officer

Mr. Spina currently serves as the Chief Financial Officer and Treasurer of OFS Capital Corporation, as well as Hancock Park Corporate Income, Inc. and OFS Credit Company, Inc. He oversees the finance and accounting functions for these entities and has over 15 years of experience in public and private accounting. Prior to joining OFSC in April 2021, Mr. Spina held multiple controllership roles, including Assistant Controller of Credit Funds for Thoma Bravo, LP from 2020 to 2021 and Controller and Accounting Manager for Fidus Investment Corporation from 2016 to 2020. He began his career in public accounting from 2009 to 2016, including serving as an Audit Manager at BDO, focusing on audits of public companies.

Tod Reichert, Managing Director, General Counsel & Chief Administrative Officer

Mr. Reichert oversees the legal and operational functions of the firm. He has over 25 years of experience as a strategic business partner, providing advice on general corporate governance and transactional matters, with a focus on securities laws, compliance, corporate finance, debt and equity investments, and mergers and acquisitions.

Ken Brown, Managing Director

Mr. Brown is responsible for leading the underwriting and credit monitoring functions and managing relationships with Agent/Investment Banks for the Broadly Syndicated Loan Group. He is also a member of the Structured Credit Investment Committee. Mr. Brown has more than 25 years of experience working in leveraged finance and public accounting.

Glen Ostrander, Managing Director

Mr. Ostrander focuses on capital markets-related activities, strategic initiatives, and structured products investment activities of the firm. He has over 25 years of experience in banking and debt capital markets relating to securitization, corporate credit, and structured credit. Prior to joining OFSC, Mr. Ostrander worked within the Global Markets & Investment Banking division at Merrill Lynch.

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Economic and Market Conditions

OFS Capital is highly susceptible to global economic, political, and market conditions, which can negatively impact its business, access to capital, and financial performance. Factors such as fluctuating interest rates, high inflation, and geopolitical tensions pose substantial challenges. Rising interest rates, while potentially increasing portfolio yields, also elevate the company's borrowing costs, thereby reducing profitability. These broader economic headwinds can also affect the financial health and operating margins of the middle-market companies in which OFS Capital invests.

Credit Risk and Portfolio Performance

The company is exposed to significant credit risk arising from its investments, particularly in middle-market companies. A deterioration in economic conditions or specific industry challenges, such as potential impacts on the manufacturing sector from tariffs, could lead to an increase in non-accrual loans. Non-accrual loans directly reduce interest income and the quality of OFS Capital's revenue stream. For example, markdowns in equity investments, including a notable net unrealized depreciation on a single large position like Pfanstiehl Holdings, Inc., have materially impacted the company’s Net Asset Value (NAV). The company's Net Investment Income (NII) has also shown declines, raising concerns about its ability to support distributions.

Leverage Risks

OFS Capital operates with a debt-heavy balance sheet, and its leverage is reportedly higher than the average for Business Development Companies (BDCs). This elevated use of debt magnifies both potential gains and losses, significantly increasing investment risks, especially during periods of market downturns or rising interest rates. High leverage increases interest expense risk and can impact the company's financial flexibility and ability to manage debt maturities or raise additional capital under volatile market conditions.

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OFS Capital (OFS) primarily operates within the U.S. middle-market lending space, providing debt and, to a lesser extent, equity financing to private companies. Their main product and service offerings include senior secured loans (such as first-lien, second-lien, and unitranche loans), subordinated loans (often referred to as junior capital or mezzanine financing), and minority equity investments.

The addressable market for OFS Capital's main products and services can be broadly captured by the private credit market and its components, predominantly within the United States.

• U.S. Private Credit Market: The U.S. private credit market, which encompasses direct lending and includes senior secured and junior capital solutions, was estimated to be around $1.1 trillion in 2024. Other sources indicate the U.S. private credit market reached approximately $1.25 trillion in 2024 and is estimated at $1.67 trillion in 2025. Projections suggest substantial growth, potentially reaching $3.5 trillion by 2028. This market is primarily concentrated in the United States, accounting for about three-quarters of the global private credit market.
• U.S. Senior Secured Loan Market: A significant component of private credit, the U.S. leveraged loan market (largely consisting of senior secured loans) was approximately $1.4 trillion in total outstanding issuance at the end of December 2021. The market for sub-investment grade senior loans is currently estimated at $1.4 trillion. The global senior secured loan market was $1.8 trillion as of 2024.
• U.S. Middle Market Lending: OFS Capital specifically targets U.S. middle-market companies, generally defined as those with annual EBITDA between $5 million and $50 million. There are approximately 200,000 middle-market companies in the U.S., with over 90% falling into the lower middle market segment. Total sponsored middle-market lending (including both syndicated and direct lending) in the U.S. amounted to $151 billion in 2022, while overall middle-market lending reached $280 billion in the same year. Syndicated middle-market loan volume alone was $159.6 billion in 2024.

Given that OFS Capital's investments are primarily within the private credit and direct lending segments of the U.S. middle market, the combined addressable market for their debt and equity products within the United States is substantial, with the private credit market alone estimated to be between $1.1 trillion and $1.67 trillion in 2024-2025 and projected to grow significantly in the coming years.

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OFS Capital (OFS) has several expected drivers of future revenue growth over the next two to three years, primarily stemming from its core business of providing capital to middle-market companies. These drivers include:

1. Expansion of Middle-Market Debt Portfolio through New Originations and Add-on Investments: OFS Capital specializes in direct and fund investments, primarily focusing on debt capital for U.S.-based middle-market companies. The company consistently emphasizes its focus on originating new middle-market debt investments and pursuing "add-on opportunities for growth with our existing issuers." For example, in Q3 2025, OFS committed $8.3 million to a new middle-market debt investment. Continued successful origination and expansion of its loan portfolio will directly increase interest income, a primary component of revenue.
2. Conversion of Unfunded Commitments into Income-Generating Assets: The company holds unfunded commitments to its portfolio companies, which represent future deployments of capital. As of Q3 2025, OFS Capital had $18.3 million in unfunded commitments, and in Q1 2025, it had $13.8 million. The strategic deployment and conversion of these commitments into active, interest-bearing loans will contribute to future revenue growth.
3. Favorable Interest Rate Trends Impacting Floating-Rate Loan Portfolio: A substantial portion of OFS Capital's loan portfolio (approximately 89% as of September 30, 2025) is floating rate. While recent interest rate cuts have led to "net interest margin compression," a stabilization or future increase in interest rates would positively impact the interest income generated from these floating-rate assets, thereby driving revenue growth.
4. Strategic Management and Performance of Structured Finance and Equity Investments: Beyond its core senior secured loans, OFS Capital's investment portfolio also includes structured finance securities (23% in Q3 2025) and equity securities (8% in Q3 2025). While these segments have recently experienced some depreciation, effective management and strategic decisions leading to positive performance, including non-recurring dividend and fee income, can contribute to overall revenue.

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Share Repurchases

• OFS Capital has an authorized Stock Repurchase Program allowing for the repurchase of up to $10.0 million of its outstanding common stock.
• The program's authorization was extended on April 30, 2024, and is expected to remain in place through May 22, 2026.
• While no shares were repurchased under the formal program in recent periods, the company purchased shares to satisfy Dividend Reinvestment Plan (DRIP) obligations, amounting to approximately $166,000 for the six months ended June 30, 2024, and $112,000 for the six months ended June 30, 2023.

Share Issuance

• The number of common shares outstanding has remained consistent at 13,398,078 from at least December 31, 2022, through October 28, 2025, indicating no significant net share issuance during this period.
• On July 30, 2025, stockholders approved a proposal to authorize the company to issue shares of common stock at a price below its then-current net asset value per share, up to 25% of the outstanding common stock, to raise equity capital for investments.

Outbound Investments

• OFS Capital, as a Business Development Company (BDC), primarily focuses on making debt and, to a lesser extent, equity investments in privately held middle-market companies within the United States.
• As of December 31, 2024, the total investment portfolio at fair value was $409.7 million, comprising $224.2 million in debt investments, $108.6 million in equity investments, and $76.9 million in structured finance securities.
• The company targets individual investments ranging from $3 million to $35 million per transaction.