Hancock Park Corporate Income, Inc. - FORM 10-Q

Attached files

file	filename
EX-32.2 - HPCI 2020 Q3 EXHIBIT 32.2 - Hancock Park Corporate Income, Inc.	hpci2020q3ex32-2.htm
EX-32.1 - HPCI 2020 Q3 EXHIBIT 32.1 - Hancock Park Corporate Income, Inc.	hpci2020q3ex32-1.htm
EX-31.2 - HPCI 2020 Q3 EXHIBIT 31.2 - Hancock Park Corporate Income, Inc.	hpci2020q3ex31-2.htm
EX-31.1 - HPCI 2020 Q3 EXHIBIT 31.1 - Hancock Park Corporate Income, Inc.	hpci2020q3ex31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020



¨	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 814-01185

Hancock Park Corporate Income, Inc.

(Exact name of registrant as specified in its charter)



Maryland		81-0850535
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

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
None	None	None

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 x 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	¨

Non-accelerated filer	x	Smaller reporting company	¨

Emerging growth company	x

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. x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

The number of shares of the issuer’s common stock, $0.001 par value, outstanding as of November 11, 2020 was 2,175,710.

HANCOCK PARK CORPORATE INCOME, INC.

TABLE OF CONTENTS



PART I. FINANCIAL INFORMATION		3
Item 1.	Financial Statements	3
	Consolidated Statements of Assets and Liabilities as of September 30, 2020 (unaudited), and December 31, 2019	3
	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2020 (unaudited) and 2019 (unaudited)	4
	Consolidated Statements of Changes in Net Assets for the Three and Nine Months Ended September 30, 2020 (unaudited) and 2019 (unaudited)	5
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 (unaudited) and 2019 (unaudited)	7
	Consolidated Schedules of Investments as of September 30, 2020 (unaudited) and December 31, 2019	8
	Notes to Consolidated Financial Statements (unaudited)	21
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	58
Item 4.	Controls and Procedures	59

PART II. OTHER INFORMATION		60
Item 1.	Legal Proceedings	60
Item 1A.	Risk Factors	60
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	63
Item 3.	Defaults Upon Senior Securities	64
Item 4.	Mine Safety Disclosures	64
Item 5.	Other Information	64
Item 6.	Exhibits	65
SIGNATURES		66

Defined Terms

We have used "we," "us," "our," "our company," and "the Company" to refer to Hancock Park Corporate Income, Inc. 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 July 15, 2016
Advisers Act	The Investment Advisers Act of 1940, as amended
Advisors	OFS Advisor and CIM Capital
Advisory Agreements	The Investment Advisory Agreement and CIM Sub-Advisory Agreement
Affiliated Account	Another account managed by OFS Advisor or an affiliate of OFS Advisor
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, with Pacific Western Bank, as lender, which provides the Company with a senior secured revolving credit facility
Board	The Company's board of directors
CIM Capital	CIM Capital IC Management, LLC, an affiliate of OFS Advisor, and a registered investment adviser under the Advisers Act, and sub-adviser to the Company
CIM Sub-Advisory Agreement	Sub-Advisory Agreement dated as of August 3, 2020, by and between OFS Advisor and CIM Capital
CLO	Collateralized Loan Obligation
Code	Internal Revenue Code of 1986, as amended
Company	Hancock Park Corporate Income, Inc. and its consolidated subsidiaries
Contractual Issuer Expenses	Salaries and direct expenses of OFS Advisor’s employees, employees of their affiliates and others while engaged in offering and other contractually-defined activities
Dealer Manager	CCO Capital, LLC, a Delaware limited liability company, and an affiliate of the Company
Dealer Manager Agreement	Broker dealer management agreement dated August 3, 2020 by and among the Company, OFS Advisor, International Assets Advisory, LLC and the Dealer Manager, as amended, supplemented or modified
EBITDA	Earnings before interest, taxes, depreciation, and amortization
Exchange Act	Securities Exchange Act of 1934, as amended
Expense Support Agreement	Amended and Restated Expense Support and Conditional Reimbursement Agreement, dated as of August 3, 2020, by and among the Company, OFS Advisor and CIM Capital
FASB	Financial Accounting Standards Board
Funding I	OFS Funding I, LLC, a wholly-owned subsidiary of OFSAM and an affiliate of OFS Advisor
GAAP	Accounting principles generally accepted in the United States
HPCI-MB	HPCI-MB, Inc., a wholly owned subsidiary taxed under subchapter C of the Code and generally holds the equity investments of the Company that are taxed as pass-through entities
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 July 15, 2016
IRS	Internal Revenue Service
LIBOR	London Interbank Offered Rate
Minimum Offering Requirement	The minimum capitalization requirement to commence the Offering. This was satisfied on August 30, 2016, when Funding I, a subsidiary of OFSAM, purchased 74,074 shares of our common stock in the Offering for gross proceeds of $1,000,000, or $13.50 per share
NBIP	Non-binding indicative price



Term	Explanation or Definition
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, Inc., a Delaware corporation and a non-diversified, closed-end management investment company for whom OFS Advisor serves as investment adviser
Offering	Continuous offering of up to $200,000,000 of shares of the Company's common stock
OFS Advisor	OFS Capital Management, LLC, a wholly-owned subsidiary of OFSAM and registered investment advisor under the Advisers Act
OFS Capital	OFS Capital Corporation, a Delaware corporation and publicly-traded BDC for whom OFS Advisor serves as investment advisor
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
Order	An exemptive relief order from the SEC to permit us to co-invest in portfolio companies with certain funds managed by OFS Advisor in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with certain conditions
PIK	Payment-in-kind. PIK interest and dividends are paid in the form of additional loan principal or preferred securities
Portfolio Company Investment	A debt or equity investment in a portfolio company. Portfolio Company Investments exclude Structured Finance Notes
Prime Rate	United States Prime interest rate
Prior Expense Support Agreement	Expense support and conditional reimbursement agreement dated July 15, 2016, between the Company and OFS Advisor
PWB Credit Facility	Senior secured revolving credit facility between the Company and Pacific Western Bank, as lender
Reunderwriting Analysis	A discount rate method based upon a hypothetical recapitalization of the entity given its current operating performance and current market condition
RIC	Regulated investment company under the Code
SBCAA	Small Business Credit Availability Act
SEC	U.S. Securities and Exchange Commission
Securities Act	Securities Act of 1933, as amended
Structured Finance Notes	CLO mezzanine debt and CLO subordinated debt positions.
Synthetic Rating Analysis	A discount rate method that assigns a surrogate debt rating to the entity based on known industry standards for assigning such ratings and then estimates the discount rate based on observed market yields for actual rated debt
Transaction Price	The cost of an arm's length transaction occurring in the same security
Unsecured Note	An agreement with the HCM Master Fund Limited, an exempted company incorporated with limited liability under the laws of the Cayman Island in which the Company sold in a private placement an unsecured note in an aggregate principal amount of $15,000,000

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 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 maintaining our qualification as a RIC under the Code;


•	our dependence on key personnel;


•	our ability to maintain or develop referral relationships;


•	the ability of OFS Advisor, to identify, invest in and monitor companies that meet our investment criteria;


•	the belief that the carrying amounts of our financial instruments, such as cash, receivables and payables approximate the fair value of such items due to the short maturity of such instruments and that such financial instruments are held with high credit quality institutions to mitigate the risk of loss due to credit risk;


•	actual and potential conflicts of interest with OFS Advisor and other affiliates of OFSAM;


•	constraint on investments due to access to material nonpublic information;


•	restrictions on our ability to enter into transactions with our affiliates;


•	the use of borrowed money to finance a portion of our investments, including the belief that our long-dated financing facilities affords us operational flexibility;


•	our ability to incur additional leverage pursuant to the SBCAA, and the impact of such leverage on our net investment income and results of operations;


•	competition for investment opportunities;


•	the percentage of investments that bear interest on a floating rate or fixed rate basis;


•	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;


•	interest rate volatility, including the decommissioning of LIBOR;


•	the general economy and its impact on the industries in which we invest;

•

changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets, including with respect to changes from the impact of the coronavirus (“COVID-19”) pandemic; the length and duration of the COVID-19 pandemic in the United States as well as worldwide and the magnitude of the economic impact of the outbreak; the effect of the COVID-19 pandemic on our business, financial condition, results of operations and cash flows and those of our portfolio companies (including the expectation that a shift from cash interest to PIK interest will result from concessions granted to borrowers due to the COVID-19 pandemic), including our and their ability to achieve our respective objectives; the effect of the disruptions caused by the COVID-19 pandemic on our ability to continue to effectively manage our business (including our belief that new loan activity in the market in which we operate has slowed) and on the availability of equity and debt capital and our use of borrowed money to finance a portion of our investments;


•	the belief that we have sufficient levels of liquidity to support our existing portfolio companies and deploy capital in new investment opportunities;


•	uncertain valuations of our portfolio investments, including our belief that reverting back to an equal weighting of the Reunderwriting Analysis method and Synthetic Rating Analysis method more accurately captures certain data related to the observed return of market liquidity and the historic correlative relationship between these markets; and


•	the effect of new or modified laws or regulations governing our operations.

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, 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 "Part I, Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2019 and in "Part II, Item 1A. Risk Factors" in this Quarterly Report on Form 10-Q. 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 may file with the SEC in the future, 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 Report on Form 10-Q are excluded from the safe harbor protection provided by Section 21E of the Exchange Act.

The following should be read in conjunction with our financial statements and the related notes thereto contained elsewhere in this Quarterly Report on Form 10-Q.

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

Hancock Park Corporate Income, Inc.

Consolidated Statements of Assets and Liabilities



	September 30, 2020			December 31, 2019
	(unaudited)
Assets:
Non-control/non-affiliate investments at fair value (amortized cost of $45,828,360 and $40,770,129 respectively)	$	44,451,479		$	40,124,923
Cash	1,166,759			8,814,578
Interest receivable	152,794			116,040
Receivable for investment sold	129,521			—
Prepaid expenses and other assets	65,399			41,544
Total assets	$	45,965,952		$	49,097,085

Liabilities:
Revolving line of credit	$	2,750,000		$	—
Unsecured note (net of discount and deferred debt issuance costs of $304,199 and $303,450, respectively)	14,695,801			14,696,550
Payable for investments purchased	—			4,316,624
Due to advisor and affiliates (see Note 3)	150,330			107,024
Accrued professional fees	73,335			129,135
Payable for repurchase of common stock	694,818			—
Distribution payable	542,729			583,912
Other liabilities	201,031			143,334
Total liabilities	19,108,044			19,976,579

Commitments and contingencies (see Notes 3 and 6)

Net assets:
Common stock, par value of $0.001 per share; 20,000,000 shares authorized as of September 30, 2020, and December 31, 2019; 2,160,836 and 2,239,774 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively; 3,814 and -0- shares subscribed as of September 30, 2020, and December 31, 2019, respectively	2,165			2,240
Paid-in capital in excess of par	28,887,103			29,786,761
Total distributable earnings (losses)	(2,031,360		)	(668,495		)
Total net assets	26,857,908			29,120,506

Total liabilities and net assets	$	45,965,952		$	49,097,085

Number of shares outstanding or subscribed	2,164,650			2,239,774
Net asset value per share	$	12.41		$	13.00

See Notes to Consolidated Financial Statements.

Hancock Park Corporate Income, Inc.

Consolidated Statements of Operations (unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Investment income
Interest income	$	1,027,919		$	905,172		$	3,166,684		$	2,564,538
Fee income	12,610			32,643			91,612			80,948
Total investment income	1,040,529			937,815			3,258,296			2,645,486

Operating expenses
Amortization of deferred offering costs	77,114			51,510			245,680			115,309
Contractual issuer expenses	4,712			513			5,248			6,709
Interest expense	302,774			88,033			935,800			287,052
Management fees	135,497			100,333			400,894			291,374
Incentive fees	72,366			48,938			213,843			127,004
Administrative fees	242,737			175,533			644,478			502,571
Professional fees	126,553			134,599			415,621			408,131
Insurance expense	24,495			20,606			73,204			55,502
Transfer agent fees	20,961			26,348			67,769			80,469
Other expenses	28,262			10,462			50,621			67,507
Total operating expenses	1,035,471			656,875			3,053,158			1,941,628
Less: Expense limitations under agreements with advisers (see Note 3)	(527,931		)	(255,200		)	(1,449,727		)	(775,571		)
Net operating expenses	507,540			401,675			1,603,431			1,166,057

Net investment income	532,989			536,140			1,654,865			1,479,429

Net realized and unrealized gain (loss) on investments
Net realized gain (loss) on investments	4,898			—			(585,099		)	52
Net unrealized appreciation (depreciation) on investments, net of taxes	920,127			(390,606		)	(774,400		)	37,388
Net gain (loss) on investments	925,025			(390,606		)	(1,359,499		)	37,440

Net increase in net assets resulting from operations	$	1,458,014		$	145,534		$	295,366		$	1,516,869

Net investment income per common share – basic and diluted	$	0.24		$	0.25		$	0.74		$	0.74
Net increase in net assets resulting from operations per common share – basic and diluted	$	0.66		$	0.07		$	0.13		$	0.76
Distributions declared per common share	$	0.25		$	0.26		$	0.75		$	0.78
Basic and diluted weighted average shares outstanding or subscribed	2,203,227			2,147,688			2,225,957			1,994,994

See Notes to Consolidated Financial Statements.

Hancock Park Corporate Income, Inc.

Consolidated Statements of Changes in Net Assets (unaudited)



	Common Stock
	Number of shares		Par value			Paid-in capital in excess of par			Total distributable earnings (losses)			Total net assets
Balances at January 1, 2019	1,818,799		$	1,819		$	24,200,918		$	(564,851	)	$	23,637,886
Net investment income	—		—			—			1,479,429			1,479,429
Net realized gain on investment	—		—			—			52			52
Net unrealized appreciation on investments, net of taxes	—		—			—			37,388			37,388
Tax reclassifications of permanent differences	—		—			(89,578		)	89,578			—
Common stock issued	425,953		426			5,704,465			—			5,704,891
Repurchase of common stock	(23,842	)	(24		)	(315,205		)	—			(315,229		)
Distributions to stockholders	—		—			—			(1,569,059		)	(1,569,059		)
Net increase for the period ended September 30, 2019	402,111		402			5,299,682			37,388			5,337,472
Balances at September 30, 2019	2,220,910		$	2,221		$	29,500,600		$	(527,463	)	$	28,975,358

Balances at June 30, 2019	2,092,378		$	2,092		$	27,841,302		$	(136,859	)	$	27,706,535
Net investment income	—		—			—			536,140			536,140
Net unrealized depreciation on investments, net of taxes	—		—			—			(390,606		)	(390,606		)
Tax reclassifications of permanent differences	—		—			(28,560		)	28,560			—
Common stock issued or subscribed	135,939		137			1,784,962			—			1,785,099
Repurchase of common stock	(7,407	)	(8		)	(97,104		)	—			(97,112		)
Distributions to stockholders	—		—			—			(564,698		)	(564,698		)
Net increase (decrease) for the period ended September 30, 2019	128,532		129			1,659,298			(390,604		)	1,268,823
Balances at September 30, 2019	2,220,910		$	2,221		$	29,500,600		$	(527,463	)	$	28,975,358



	Common Stock
	Number of shares		Par value			Paid-in capital in excess of par			Total distributable earnings (losses)			Total net assets
Balances at January 1, 2020	2,239,774		$	2,240		$	29,786,761		$	(668,495	)	$	29,120,506
Net investment income	—		—			—			1,654,865			1,654,865
Net realized loss on investment	—		—			—			(585,099		)	(585,099		)
Net unrealized depreciation on investments, net of taxes	—		—			—			(774,400		)	(774,400		)
Tax reclassifications of permanent differences	—		—			(13,560		)	13,560			—
Common stock issued or subscribed	66,483		67			827,675			—			827,742
Repurchase of common stock	(141,607	)	(142		)	(1,713,773		)	—			(1,713,915		)
Distributions to stockholders	—		—			—			(1,671,791		)	(1,671,791		)
Net decrease for the period ended September 30, 2020	(75,124	)	(75		)	(899,658		)	(1,362,865		)	(2,262,598		)
Balances at September 30, 2020	2,164,650		$	2,165		$	28,887,103		$	(2,031,360	)	$	26,857,908

Balances at June 30, 2020	2,188,275		$	2,188		$	29,200,524		$	(2,953,020	)	$	26,249,692
Net investment income	—		—			—			532,989			532,989
Net realized gain on investment	—		—			—			4,898			4,898
Net unrealized appreciation on investments, net of taxes	—		—			—			920,127			920,127
Tax reclassifications of permanent differences	—		—			(6,375		)	6,375			—
Common stock issued or subscribed	31,695		32			387,718			—			387,750
Repurchase of common stock	(55,320	)	(55		)	(694,764		)	—			(694,819		)
Distributions to stockholders	—		—			—			(542,729		)	(542,729		)
Net increase (decrease) for the period ended September 30, 2020	(23,625	)	(23		)	(313,421		)	921,660			608,216
Balances at September 30, 2020	2,164,650		$	2,165		$	28,887,103		$	(2,031,360	)	$	26,857,908

See Notes to Consolidated Financial Statements.

Hancock Park Corporate Income, Inc.

Consolidated Statements of Cash Flows (unaudited)



	Nine Months Ended September 30,
	2020			2019
Cash flows from operating activities
Net increase in net assets resulting from operations	$	295,366		$	1,516,869
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
Net unrealized (appreciation) depreciation on investments, net of taxes	774,400			(37,388		)
Net realized (gains) losses on investments	585,099			(52		)
Amortization of Net Loan Fees and discounts on investments	(57,016		)	(52,863		)
Amendment fees collected	1,858			631
Amortization of deferred debt issuance costs	75,160			44,654
Paid-in-kind interest and dividend income	(8,939		)	(14,758		)
Purchase of portfolio investments	(12,293,012		)	(8,151,419		)
Proceeds from principal payments on portfolio investments	4,200,695			2,441,591
Sale or redemption of portfolio investments	2,517,293			1,539,696
Changes in operating assets and liabilities:
Interest receivable	(36,754		)	15,922
Due to advisor and affiliates	43,306			199,246
Receivable for investment sold	(129,521		)	—
Payable for investments purchased	(4,316,624		)	(721,286		)
Other assets and liabilities	(46,301		)	(81,242		)
Net cash used in operating activities	(8,394,990		)	(3,300,399		)

Cash flows from financing activities
Net proceeds from issuance of common stock	779,242			5,704,891
Distributions paid to stockholders	(1,712,974		)	(1,451,605		)
Borrowings under revolving line of credit	8,750,000			7,075,000
Repayments under revolving line of credit	(6,000,000		)	(7,925,000		)
Repurchase of common stock	(1,019,097		)	(315,229		)
Payment of debt issuance costs	(50,000		)	(50,780		)
Net cash provided by financing activities	747,171			3,037,277

Net decrease in cash	(7,647,819		)	(263,122		)
Cash at beginning of period	8,814,578			1,250,296
Cash at end of period	$	1,166,759		$	987,174

Supplemental disclosure of cash flow information:
Amortization of deferred offering costs limited by investment advisor (see Note 3)	$	245,680		$	115,309
Cash paid for interest	860,597			243,587
Subscription receivable	48,500			—

See Notes to Consolidated Financial Statements.

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments (unaudited)

September 30, 2020



Portfolio Company ⁽¹⁾⁽⁸⁾ Investment Type	Industry	Interest Rate ⁽³⁾	Spread Above Index ⁽³⁾	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost			Fair Value ⁽⁴⁾			Percent of Net Assets
Non-control/Non-affiliate Investments
Debt and Equity Investments
All Star Auto Lights, Inc.	Motor Vehicle Parts (Used) Merchant Wholesalers
Senior Secured Loan		8.50%	(L +7.50%)	12/19/2019	8/20/2024	$	3,244,154	$	3,213,584		$	3,086,651		11.5	%

A&A Transfer, LLC	Construction and Mining (except Oil Well) Machinery and Equipment Merchant Wholesalers
Senior Secured Loan		8.25%	(L +6.50%)	2/7/2020	2/7/2025	1,872,000		1,847,470			1,899,045			7.1
Senior Secured Loan (Revolver) (12)		n/m (5)	(L +6.50%)	2/7/2020	2/7/2025	—		(4,130		)	3,428			—
						1,872,000		1,843,340			1,902,473			7.1
BayMark Health Services, Inc.	Outpatient Mental Health and Substance Abuse Centers
Senior Secured Loan		9.25%	(L +8.25%)	3/22/2018	3/1/2025	1,000,000		993,644			987,781			3.7

Carolina Lubes, Inc.	Automotive Oil Change and Lubrication Shops
Senior Secured Loan (6)		8.64%	(L +7.64%)	8/23/2017	8/23/2022	546,026		544,207			539,696			2.0
Senior Secured Loan (Revolver) (12)		n/m (5)	(L +7.64%)	8/23/2017	8/23/2022	—		(152		)	(932		)	—
						546,026		544,055			538,764			2.0
Chemical Resources Holdings, Inc.	Custom Compounding of Purchased Resins
Senior Secured Loan (6)		9.22%	(L +7.72%)	1/25/2019	1/25/2024	1,256,850		1,245,615			1,267,231			4.7
Common Equity (168 units) (7) (13)				1/25/2019				166,469			227,000			0.8
						1,256,850		1,412,084			1,494,231			5.5
Confie Seguros Holdings II Co.	Insurance Agencies and Brokerages
Senior Secured Loan		8.66%	(L +8.50%)	6/6/2017	11/1/2025	1,447,640		1,403,489			1,338,863			5.0

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments (unaudited)

September 30, 2020



Portfolio Company ⁽¹⁾⁽⁸⁾ Investment Type	Industry	Interest Rate ⁽³⁾	Spread Above Index ⁽³⁾	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost		Fair Value ⁽⁴⁾		Percent of Net Assets
Constellis Holdings, LLC	Other Justice, Public Order, and Safety Activities
Senior Secured Loan		8.50%	(L +7.50%)	3/27/2020	3/27/2024	$	2,650	$	2,650	$	2,677	—	%
Senior Secured Loan		12.00%	(L +11.00%)	3/27/2020	3/27/2025	3,522		3,054		3,566		—
Common Equity (1,362 units) (7)				3/27/2020				46,403		45,950		0.2
						6,172		52,107		52,193		0.2
Convergint Technologies Holdings, LLC	Security Systems Services (except Locksmiths)
Senior Secured Loan		7.50%	(L +6.75%)	9/28/2018	2/2/2026	2,393,750		2,357,739		2,265,797		8.4

Davis Vision, Inc.	Direct Health and Medical Insurance Carriers
Senior Secured Loan		7.75%	(L +6.75%)	7/16/2018	12/1/2025	1,371,000		1,350,360		1,371,000		5.0

DRS Imaging Services, LLC	Data Processing, Hosting, and Related Services
Senior Secured Loan (6)		10.12%	(L +9.12%)	3/8/2018	11/20/2023	1,080,577		1,074,926		1,080,577		4.0
Common Equity (115 units) (7) (13)				3/8/2018				115,154		172,000		0.6
						1,080,577		1,190,080		1,252,577		4.6
DuPage Medical Group	Offices of Physicians, Mental Health Specialists
Senior Secured Loan (9)		3.50%	(L +2.75%)	8/22/2017	8/15/2024	96,348		96,081		94,180		0.4
Senior Secured Loan		7.75%	(L +7.00%)	8/22/2017	8/15/2025	1,939,435		1,935,526		1,904,435		7.1
						2,035,783		2,031,607		1,998,615		7.5
Eblens Holdings, Inc.	Shoe Store
Subordinated Loan (2)		12.50% cash / 1.50% PIK	N/A	7/13/2017	1/13/2023	478,222		475,186		281,625		1.0
Common Equity (3,750 units) (7)				7/13/2017				37,500		—		—
						478,222		512,686		281,625		1.0
Excelin Home Health, LLC	Home Health Care Services
Senior Secured Loan		11.50%	(L +9.50%)	10/25/2018	4/25/2024	1,000,000		987,038		1,000,000		3.8

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments (unaudited)

September 30, 2020



Portfolio Company ⁽¹⁾⁽⁸⁾ Investment Type	Industry	Interest Rate ⁽³⁾	Spread Above Index ⁽³⁾	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost		Fair Value ⁽⁴⁾		Percent of Net Assets
Hyland Software, Inc.	Software Publishers
Senior Secured Loan (9)		4.00%	(L +3.25%)	10/24/2018	7/1/2024	$	21,788	$	21,766	$	21,729	0.1	%
Senior Secured Loan		7.75%	(L +7.00%)	10/24/2018	7/7/2025	333,469		334,883		331,171		1.2
						355,257		356,649		352,900		1.3
Inergex Holdings, LLC	Other Computer Related Services
Senior Secured Loan		8.00%	(L +7.00%)	10/1/2018	10/1/2024	1,097,594		1,086,399		1,024,660		3.8
Senior Secured Loan (Revolver) (12)		8.00%	(Prime +7.00%)	10/1/2018	10/1/2024	31,250		30,000		29,173		0.1
						1,128,844		1,116,399		1,053,833		3.9
Institutional Shareholder Services Inc.	Administrative Management and General Management Consulting Services
Senior Secured Loan		8.72%	(L +8.50%)	3/4/2019	3/5/2027	1,068,750		1,042,955		1,034,896		4.0

McAfee, LLC (9)	Software Publishers
Senior Secured Loan		9.50%	(L +8.50%)	11/15/2019	9/29/2025	1,500,000		1,501,635		1,515,938		5.6

Milrose Consultants, LLC	Administrative Management and General Management Consulting Services
Senior Secured Loan (6)		7.74%	(L +6.74%)	7/16/2019	7/16/2025	3,333,333		3,311,539		3,312,867		12.3

Online Tech Stores, LLC (10)	Stationery and Office Supplies Merchant Wholesalers
Subordinated Loan		13.50% PIK	N/A	2/1/2018	8/1/2023	1,128,629		1,007,141		443,341		1.7

OnSite Care, PLLC	Home Health Care Services
Senior Secured Loan (6)		8.70%	(L +7.70%)	8/10/2018	8/10/2023	1,206,281		1,196,806		1,206,281		4.5

Parfums Holding Company, Inc.	Cosmetics, Beauty Supplies, and Perfume Stores
Senior Secured Loan		9.75%	(L +8.75%)	11/16/2017	6/30/2025	2,000,000		1,985,045		1,990,007		7.4

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments (unaudited)

September 30, 2020



Portfolio Company ⁽¹⁾⁽⁸⁾ Investment Type	Industry	Interest Rate ⁽³⁾	Spread Above Index ⁽³⁾	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost		Fair Value ⁽⁴⁾		Percent of Net Assets
Pelican Products, Inc.	Unlaminated Plastics Profile Shape Manufacturing
Senior Secured Loan		8.75%	(L +7.75%)	9/24/2018	5/1/2026	$	2,000,000	$	2,007,435	$	1,927,370	7.2	%

Professional Pipe Holdings, LLC	Plumbing, Heating, and Air-Conditioning Contractors
Senior Secured Loan		8.90% cash / 1.50% PIK	(L +8.75%)	3/23/2018	3/23/2023	435,173		430,966		415,112		1.5
Common Equity (86 units) (7)				3/23/2018				85,714		61,000		0.2
						435,173		516,680		476,112		1.7
Resource Label Group, LLC	Commercial Printing (except Screen and Books)
Senior Secured Loan		5.50%	(L +4.50%)	6/7/2017	5/26/2023	68,283		67,980		66,264		0.2
Senior Secured Loan		9.50%	(L +8.50%)	6/7/2017	11/26/2023	178,571		177,266		168,480		0.6
						246,854		245,246		234,744		0.8
Rocket Software, Inc.	Software Publishers
Senior Secured Loan		8.51%	(L +8.25%)	11/20/2018	11/28/2026	1,285,406		1,267,312		1,220,769		4.5

RPLF Holdings, LLC	Software Publishers
Common Equity (45,890 units) (7) (13)				1/17/2018				45,890		76,000		0.3

SourceHOV Tax, Inc. (6)	Other Accounting Services
Senior Secured Loan		7.87%	(L +6.37%)	3/16/2020	3/17/2025	2,306,306		2,290,893		2,352,432		8.8

Spring Education Group, Inc. (F/K/A SSH Group Holdings, Inc.,)	Child Day Care Services
Senior Secured Loan		8.47%	(L +8.25%)	7/26/2018	7/30/2026	704,000		698,865		667,765		2.5

STS Operating, Inc.	Industrial Machinery and Equipment Merchant Wholesalers
Senior Secured Loan (9)		5.25%	(L +4.25%)	5/15/2018	12/11/2024	104,104		103,938		99,432		0.4
Senior Secured Loan		9.00%	(L +8.00%)	5/15/2018	4/30/2026	1,593,220		1,593,191		1,485,663		5.5
						1,697,324		1,697,129		1,585,095		5.9

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments (unaudited)

September 30, 2020



Portfolio Company ⁽¹⁾⁽⁸⁾ Investment Type	Industry	Interest Rate ⁽³⁾	Spread Above Index ⁽³⁾	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost		Fair Value ⁽⁴⁾		Percent of Net Assets
The Escape Game, LLC	All other amusement and recreation industries
Senior Secured Loan		9.75%	(L +8.75%)	12/22/2017	12/22/2022	$	500,000	$	497,785	$	467,750	1.7	%
Senior Secured Loan		9.75%	(L +8.75%)	2/14/2020	12/31/2020	166,667		165,958		155,917		0.6
Senior Secured Loan		8.00%	(L +7.00%)	7/18/2019	12/31/2020	333,333		332,960		313,700		1.2
Senior Secured Loan (Delayed Draw)		9.75%	(L +8.75%)	7/20/2018	12/22/2022	500,000		500,000		467,750		1.7
						1,500,000		1,496,703		1,405,117		5.2
Truck Hero, Inc.	Truck Trailer Manufacturing
Senior Secured Loan (9)		3.90%	(L +3.75%)	5/30/2017	4/22/2024	15,867		15,785		15,419		0.1
Senior Secured Loan		9.25%	(L +8.25%)	5/30/2017	4/21/2025	1,878,456		1,818,003		1,851,993		6.9
						1,894,323		1,833,788		1,867,412		7.0
TTG Healthcare, LLC	Diagnostic Imaging Centers
Senior Secured Loan		10.00%	(L +9.00%)	3/1/2019	3/1/2024	1,003,518		992,371		1,011,002		3.8
Preferred Equity (191 units) (7) (13)				3/1/2019				191,409		287,000		1.1
						1,003,518		1,183,780		1,298,002		4.9
Wastebuilt Environmental Solutions, LLC	Industrial Supplies Merchant Wholesalers
Senior Secured Loan		10.25%	(L +8.75%)	10/11/2018	10/11/2024	1,500,000		1,478,861		1,157,477		4.3

Xperi (9)	Semiconductor and Related Device Manufacturing
Senior Secured Loan		4.15%	(L +4.00%)	6/1/2020	6/1/2025	98,750		90,637		96,487		0.4

Total Debt and Equity Investments						$	44,124,922	$	44,263,201	$	42,845,416	159.5	%

Structured Finance Note Investments
Monroe Capital MML CLO X, LTD.
Mezzanine bond - Class E		9.08% (14)	(L +8.85%)	8/7/2020	8/20/2031 (11)	862,500		798,975		797,320		3.0

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments (unaudited)

September 30, 2020



Portfolio Company ⁽¹⁾⁽⁸⁾ Investment Type	Industry	Interest Rate ⁽³⁾	Spread Above Index ⁽³⁾	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost		Fair Value ⁽⁴⁾		Percent of Net Assets
Park Avenue Institutional Advisers CLO 2017-1 – Class D
Mezzanine bond - Class D		6.48% (14)	(L +6.22%)	6/5/2020	11/14/2029 (11)	$	100,000	$	81,282	$	89,149	0.3	%

Regatta II Funding – Class DR2
Mezzanine bond - Class DR2		7.23% (14)	(L +6.95%)	6/5/2020	1/15/2029 (11)	800,000		684,902		719,593		2.7

Total Structured Finance Note Investments						$	1,762,500	$	1,565,159	$	1,606,063	6.0	%

Total Investments						$	45,887,422	$	45,828,360	$	44,451,479	165.5	%


(1)	Equity ownership may be held in shares or units of companies affiliated with the portfolio company. The Company's investments are generally classified as "restricted securities" as such term is defined under Rule 6-03(f) of Regulation S-X or Rule 144 of the Securities Act.

(2)

The interest rate on these investments contains a PIK provision, whereby the issuer has the option to make interest payments in cash or with the issuance of additional securities as payment of the entire PIK provision. The interest rate in the schedule represents the current interest rate in effect for these investments. The following table provides additional details on these PIK investments, including the maximum annual PIK interest rate allowed as of September 30, 2020:



Portfolio Company	Investment Type	Range of PIK Option	Range of Cash Option	Maximum PIK Rate Allowed
Eblens Holdings, Inc.	Subordinated Loan	0% or 1.50%	14.00% or 12.50%	1.50%

(3)

Substantially all of the debt investments bear interest at rates determined by reference to LIBOR (L), and which are reset monthly or quarterly. For all variable-rate investments the schedule presents the spread over LIBOR and the interest rate as of September 30, 2020. All investments with a stated PIK rate require interest payments with the issuance of additional securities as payment of the entire PIK provision.


(4)	Unless otherwise noted with footnote 9, fair value was determined using significant unobservable inputs for all of the Company's investments and are considered Level 3 under GAAP. See Note 5 for further details.


(5)	Not meaningful as there is no outstanding balance on the revolver. The Company earns unfunded commitment fees on undrawn revolving lines of credit balances, which are reported in fee income. The Company considers undrawn amounts in the determination of fair value on revolving lines of credit.

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments (unaudited)

September 30, 2020


(6)	The Company has entered into a contractual arrangement with co‑lenders whereby, subject to certain conditions, it has agreed to receive its payment after the repayment of certain co‑lenders pursuant to a payment waterfall. The table below provides additional details as of September 30, 2020:



Portfolio Company	Reported Interest Rate	Interest Rate per Credit Agreement	Additional Interest per Annum
Carolina Lubes, Inc.	8.64%	8.25%	0.39%
Chemical Resources Holdings, Inc.	9.22%	7.50%	1.72%
DRS Imaging Services, LLC	10.12%	9.00%	1.12%
Milrose Consultants, LLC	7.74%	7.00%	0.74%
OnSite Care, PLLC	8.70%	7.25%	1.45%
SourceHOV Tax, Inc.	7.87%	7.00%	0.87%


(7)	Non-income producing.


(8)	Investments pledged as collateral under the PWB Credit Facility.


(9)	Fair value was determined by reference to observable inputs other than quoted prices in active markets and are considered Level 2 under GAAP. See Note 5 for further details.


(10)	Investment was on non-accrual status as of September 30, 2020, meaning the Company has suspended recognition of all or a portion of income on the investment. See Note 4 for further details.


(11)	Maturity date represents the contractual maturity date of the Structured Finance Notes. Projected cash flows, including the projected amount and timing of terminal principal payments which may be projected to occur prior to contractual maturity date, were utilized in deriving the effective yield of the investments.

(12) Subject to unfunded commitments. See Note 6 for further details.

(13) All or portion of investment held by HPCI-MB, a wholly owned subsidiary subject to corporate income tax.

(14) The rate disclosed is the estimated effective yield, generally established at purchase and re-evaluated upon receipt of distributions, and based upon projected amounts and timing of future distributions and the projected amount and timing of terminal principal payments at the time of estimation. The estimated yield and investment cost may ultimately not be realized.

See Notes to Financial Statements.

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments

December 31, 2019



Portfolio Company ⁽¹⁾ Investment Type ⁽²⁾	Industry	Interest Rate ⁽³⁾	Spread Above Index ⁽³⁾	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost			Fair Value ⁽⁴⁾			Percent of Net Assets
Non-control/Non-affiliate Investments
All Star Auto Lights, Inc.	Motor Vehicle Parts (Used) Merchant Wholesalers
Senior Secured Loan		9.40%	(L +7.50%)	12/19/2019	8/20/2024	$	3,000,000	$	2,970,229		$	2,970,229		10.2	%

Asurion, LLC (9)	Communication Equipment Repair and Maintenance
Senior Secured Loan		8.30%	(L +6.50%)	11/19/2019	8/4/2025	1,500,000		1,511,250			1,511,250			5.2

BayMark Health Services	Outpatient Mental Health and Substance Abuse Centers
Senior Secured Loan		10.21%	(L +8.25%)	3/22/2018	3/1/2025	1,000,000		992,561			1,000,000			3.4

Carolina Lubes, Inc.	Automotive Oil Change and Lubrication Shops
Senior Secured Loan (5)		9.83%	(L +7.70%)	8/23/2017	8/23/2022	557,824		555,230			563,314			1.9
Senior Secured Loan (Revolver) (7)		0.25% (11)	(L +7.25%)	8/23/2017	8/23/2022	—		(212		)	(212		)	—
						557,824		555,018			563,102			1.9
Chemical Resources Holdings, Inc.	Custom Compounding of Purchased Resins
Senior Secured Loan (5)		9.82%	(L +7.89%)	1/25/2019	1/25/2024	1,256,850		1,243,072			1,257,160			4.3
Common Equity (168 units) (6) (14)				1/25/2019				166,469			223,784			0.8
						1,256,850		1,409,541			1,480,944			5.1
Cirrus Medical Staffing, Inc.	Temporary Help Services
Senior Secured Loan (5)		10.19%	(L +8.25%)	3/5/2018	10/19/2022	820,283		813,402			806,839			2.8
Senior Secured Loan (Revolver) (7)		10.19%	(L +8.25%)	3/5/2018	10/19/2022	91,928		91,928			90,371			0.3
						912,211		905,330			897,210			3.1
Confie Seguros Holdings II Co.	Insurance Agencies and Brokerages
Senior Secured Loan		10.41%	(L +8.50%)	6/6/2017	11/1/2025	447,640		440,143			433,920			1.5

Constellis Holdings, LLC (12)	Other Justice, Public Order, and Safety Activities
Senior Secured Loan		6.93%	(L +5.00%)	4/27/2017	4/21/2024	24,438		24,281			10,079			—
Senior Secured Loan		10.93%	(L +9.00%)	4/26/2017	4/21/2025	550,000		553,529			22,500			0.1
						574,438		577,810			32,579			0.1

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments

December 31, 2019



Portfolio Company ⁽¹⁾ Investment Type ⁽²⁾	Industry	Interest Rate ⁽³⁾	Spread Above Index ⁽³⁾	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost		Fair Value ⁽⁴⁾		Percent of Net Assets
Convergint Technologies	Security Systems Services (except Locksmiths)
Senior Secured Loan		8.55%	(L +6.75%)	9/28/2018	2/2/2026	$	1,893,750	$	1,856,191	$	1,862,669	6.4	%

Davis Vision, Inc.	Direct Health and Medical Insurance Carriers
Senior Secured Loan		8.55%	(L +6.75%)	7/16/2018	12/1/2025	1,371,000		1,347,363		1,370,999		4.7

DRS Imaging Services, LLC	Data Processing, Hosting, and Related Services
Senior Secured Loan (5)		11.21%	(L +9.27%)	3/8/2018	11/20/2023	1,092,259		1,085,181		1,074,896		3.7
Common Equity (115 units) (6) (14)				3/8/2018				115,385		135,361		0.5
						1,092,259		1,200,566		1,210,257		4.2
DuPage Medical Group	Offices of Physicians, Mental Health Specialists
Senior Secured Loan (9)		4.55%	(L +2.75%)	8/22/2017	8/15/2024	97,091		96,770		96,909		0.3
Senior Secured Loan		8.80%	(L +7.00%)	8/22/2017	8/15/2025	1,590,882		1,594,381		1,590,882		5.5
						1,687,973		1,691,151		1,687,791		5.8
Eblens Holdings, Inc.	Shoe Store
Subordinated Loan (10)		12.00%	N/A	7/13/2017	1/13/2023	474,220		471,670		474,994		1.6
Common Equity (3,750 units) (6)				7/13/2017				37,500		46,925		0.2
						474,220		509,170		521,919		1.8
Excelin Home Health, LLC	Home Health Care Services
Senior Secured Loan		11.50%	(L +9.50%)	10/25/2018	4/25/2024	1,000,000		984,311		957,589		3.3

Hyland Software, Inc.	Software Publishers
Senior Secured Loan (9)		5.30%	(L +3.50%)	10/24/2018	7/1/2024	21,955		21,929		22,111		0.1
Senior Secured Loan		8.80%	(L +7.00%)	10/24/2018	7/7/2025	333,469		335,106		335,453		1.2
						355,424		357,035		357,564		1.3
Inergex Holdings	Other Computer Related Services
Senior Secured Loan		8.94%	(L +7.00%)	10/1/2018	10/1/2024	1,105,984		1,092,589		1,099,360		3.8
Senior Secured Loan (Revolver) (7)		9.06%	(L +7.00%)	10/1/2018	10/1/2024	125,000		123,516		124,251		0.4
						1,230,984		1,216,105		1,223,611		4.2

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments

December 31, 2019



Portfolio Company ⁽¹⁾ Investment Type ⁽²⁾	Industry	Interest Rate ⁽³⁾	Spread Above Index ⁽³⁾	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost		Fair Value ⁽⁴⁾		Percent of Net Assets
Institutional Shareholder Services Inc.	Administrative Management and General Management Consulting Services
Senior Secured Loan		10.44%	(L +8.50%)	3/4/2019	3/5/2027	$	1,068,750	$	1,039,942	$	1,043,849	3.6	%

McAfee, LLC (9)	Software Publishers
Senior Secured Loan		10.30%	(L +8.50%)	11/15/2019	9/29/2025	1,500,000		1,501,875		1,501,875		5.2

Milrose Consultants, LLC (5)	Administrative Management and General Management Consulting Services
Senior Secured Loan		8.14%	(L +6.20%)	7/16/2019	7/16/2025	2,000,000		1,986,156		1,981,712		6.8

Online Tech Stores, LLC	Stationery and Office Supplies Merchant Wholesalers
Subordinated Secured Loan		10.50%	N/A	2/1/2018	8/1/2023	1,020,175		1,007,141		909,902		3.1

OnSite Care, PLLC (5)	Home Health Care Services
Senior Secured Loan		9.10%	(L +7.75%)	8/10/2018	8/10/2023	1,209,375		1,197,378		1,161,457		4.0

Parfums Holding Company, Inc.	Cosmetics, Beauty Supplies, and Perfume Stores
Senior Secured Loan		10.70%	(L +8.75%)	11/16/2017	6/30/2025	2,000,000		1,982,998		1,982,998		6.8

Pelican Products, Inc.	Unlaminated Plastics Profile Shape Manufacturing
Senior Secured Loan		9.49%	(L +7.75%)	9/24/2018	5/1/2026	2,000,000		2,008,434		1,971,656		6.8

Performance Team LLC	General Warehousing and Storage
Senior Secured Loan		11.80%	(L +10.00%)	5/24/2018	11/24/2023	1,026,316		1,019,049		1,036,579		3.6

Professional Pipe Holdings, LLC	Plumbing, Heating, and Air-Conditioning Contractors
Senior Secured Loan		10.55%	(L +8.75%)	3/23/2018	3/23/2023	430,236		424,753		434,538		1.4
Common Equity (86 Class A units) (6)				3/23/2018				85,714		146,000		0.5
						430,236		510,467		580,538		1.9

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments

December 31, 2019



Portfolio Company ⁽¹⁾ Investment Type ⁽²⁾	Industry	Interest Rate ⁽³⁾	Spread Above Index ⁽³⁾	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost		Fair Value ⁽⁴⁾		Percent of Net Assets
Resource Label Group, LLC	Commercial Printing (except Screen and Books)
Senior Secured Loan		6.60%	(L +4.50%)	6/7/2017	5/26/2023	$	69,391	$	68,996	$	67,846	0.2	%
Senior Secured Loan		10.60%	(L +8.50%)	6/7/2017	11/26/2023	178,571		176,956		170,044		0.6
						247,962		245,952		237,890		0.8
Rocket Software, Inc.	Software Publishers
Senior Secured Loan (9)		6.05%	(L +4.25%)	11/20/2018	11/28/2025	136,300		135,720		132,970		0.5
Senior Secured Loan		10.05%	(L +8.25%)	11/20/2018	11/28/2026	1,285,406		1,265,107		1,248,468		4.3
						1,421,706		1,400,827		1,381,438		4.8
RPLF Holdings, LLC (6) (14)	Software Publishers
Common Equity (45,890 Class A units)				1/17/2018				45,890		33,605		0.1

SSH Group Holdings, Inc.	Child Day Care Services
Senior Secured Loan (9)		6.19%	(L +4.25%)	7/26/2018	7/30/2025	94,800		94,611		95,452		0.3
Senior Secured Loan		10.19%	(L +8.25%)	7/26/2018	7/30/2026	704,000		698,201		711,040		2.4
						798,800		792,812		806,492		2.7
STS Operating, Inc.	Industrial Machinery and Equipment Merchant Wholesalers
Senior Secured Loan		6.05%	(L +4.25%)	5/15/2018	12/11/2024	104,907		104,709		104,821		0.4
Senior Secured Loan		9.80%	(L +8.00%)	5/15/2018	4/30/2026	1,593,220		1,593,186		1,585,535		5.3
						1,698,127		1,697,895		1,690,356		5.7
The Escape Game, LLC	All other amusement and recreation industries
Senior Secured Loan		8.80%	(L +7.00%)	7/18/2019	3/31/2020	333,333		331,582		331,810		1.1
Senior Secured Loan		10.55%	(L +8.75%)	12/22/2017	12/22/2022	500,000		497,770		498,106		1.7
Senior Secured Loan (Delayed Draw)		10.55%	(L +8.75%)	7/20/2018	12/22/2022	500,000		500,000		498,106		1.7
						1,333,333		1,329,352		1,328,022		4.5
Truck Hero, Inc.	Truck Trailer Manufacturing
Senior Secured Loan		5.55%	(L +3.75%)	5/30/2017	4/22/2024	15,990		15,890		15,653		0.1
Senior Secured Loan		10.05%	(L +8.25%)	5/30/2017	4/21/2025	1,878,456		1,808,043		1,791,751		6.2
						1,894,446		1,823,933		1,807,404		6.3
TTG Healthcare, LLC	Diagnostic Imaging Centers
Senior Secured Loan		10.71%	(L +9.00%)	3/1/2019	3/1/2024	1,003,518		989,921		975,594		3.4
Preferred Equity (191 units) (6) (14)				3/1/2019				191,409		201,006		0.7
						1,003,518		1,181,330		1,176,600		4.1

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments

December 31, 2019



Portfolio Company ⁽¹⁾ Investment Type ⁽²⁾	Industry	Interest Rate ⁽³⁾	Spread Above Index ⁽³⁾	Initial Acquisition Date	Maturity	Principal Amount		Amortized Cost		Fair Value ⁽⁴⁾		Percent of Net Assets
Wastebuilt Environmental Solutions, LLC.	Industrial Supplies Merchant Wholesalers
Senior Secured Loan		10.69%	(L +8.75%)	10/11/2018	10/11/2024	$	1,500,000	$	1,474,924	$	1,410,917	4.8	%

Total Investments						$	40,507,317	$	40,770,129	$	40,124,923	137.8	%

(1) Equity ownership may be held in shares or units of companies affiliated with the portfolio company. The Company's investments are generally classified as "restricted securities" as such term is defined under Rule 6-03(f) of Regulation S-X or Rule 144 of the Securities Act.

(2) All of the Company’s investments were qualifying assets under Section 55(a) of the 1940 Act as of the period end. Qualifying assets must represent at least 70% of the Company's assets, as defined under Section 55 of the 1940 Act, at the time of acquisition of any additional non-qualifying assets.

(3) Substantially all of the debt investments bear interest at rates determined by reference to LIBOR (L), generally between 1.7% and 2.1% at December 31, 2019, and which are reset monthly or quarterly. For all variable-rate investments the schedule presents the spread over LIBOR and the interest rate as of December 31, 2019. Unless otherwise noted, all investments with a stated PIK rate require interest payments with the issuance of additional securities as payment of the entire PIK provision.

(4) Unless otherwise noted with footnote 9, fair value was determined using significant unobservable inputs for all of the Company's investments and are considered Level 3 under GAAP. See Note 5 for further details.

(5) The Company has entered into a contractual arrangement with co‑lenders whereby, subject to certain conditions, it has agreed to receive its payment after the repayment of certain co‑lenders pursuant to a payment waterfall. The table below provides additional details as of December 31, 2019:



Portfolio Company	Reported Interest Rate	Interest Rate per Credit Agreement	Additional Interest per Annum
Carolina Lubes, Inc.	9.83%	9.35%	0.48%
Chemical Resources Holdings, Inc.	9.82%	7.93%	1.89%
DRS Imaging Services, LLC	11.21%	9.94%	1.27%
Milrose Consultants, LLC	8.14%	7.44%	0.70%
OnSite Care, PLLC	9.49%	7.96%	1.53%

(6) Non-income producing.

(7) Subject to unfunded commitments. See Note 6 for further details.

(8) Investments pledged as collateral under the PWB Credit Facility.

(9) Fair value was determined by reference to observable inputs other than quoted prices in active markets and are considered Level 2 under GAAP. See Note 5 for further details.

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments

December 31, 2019

(10) The interest rate on these investments contains a PIK provision, whereby the issuer has the option to make interest payments in cash or with the issuance of additional securities as payment of the entire PIK provision. The interest rate in the schedule represents the current interest rate in effect for these investments. The following table provides additional details on these PIK investments, including the maximum annual PIK interest rate allowed as of December 31, 2019:



Portfolio Company	Investment Type	Range of PIK Option	Range of Cash Option	Maximum PIK Rate Allowed
Eblens Holdings, Inc.	Subordinated Loan	0% or 1.00%	13.00% or 12.00%	1.00%

(11) Commitment fee on undrawn funds.

(12) Investment was on non-accrual status as of December 31, 2019, meaning the Company has ceased recognition of all or a portion of income on the investment.

See Note 4 for further details.

(14) All or portion of investment held by HPCI-MB, LLC, a wholly owned subsidiary subject to corporate income tax.

See Notes to Consolidated Financial Statements.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

Note 1. Organization

The Company is a Maryland corporation formed on December 8, 2015 as an externally managed, non-diversified, closed-end investment company. The Company has elected to be regulated as a BDC and as a RIC under Subchapter M of the Code.

The Company’s objective is to provide stockholders with current income and capital appreciation primarily through debt investments and, to a lesser extent, equity investments primarily in middle-market companies located principally in the United States. OFS Advisor, an affiliate of the Company and a registered investment adviser, manages the day-to-day operations of, and provides investment advisory services to, the Company and, effective as of August 3, 2020, CIM Capital, an affiliate of the Company, OFS Advisor and CCO Capital and a registered investment adviser, serves as the Company's sub-adviser.

In addition, OFS Advisor serves as the investment adviser to OFS Capital, a publicly traded BDC with an investment strategy similar to that of the Company. OFS Advisor also serves as the investment adviser to OCCI, a non-diversified, externally managed, closed-end management investment company that is registered as an investment company under the 1940 Act and primarily invests in the equity tranche of CLOs.

The Company intends to raise up to $200,000,000 through offering shares of its common stock to investors in a continuous offering in reliance on exemptions from the registration requirements of the Securities Act. In addition, through August 3, 2020, the Company and OFS Advisor were party to a dealer manager agreement (the "Prior Dealer Management Agreement") with International Asset Advisory, LLC ("IAA"). Placement activities were conducted by IAA and participating broker dealers who solicited subscriptions to purchase shares of the Company’s common stock. For the six months ended June 30, 2019, fees and expenses pursuant to the Dealer Manager Agreement were paid by OFS Advisor.

On August 3, 2020, the Prior Dealer Manager Agreement was amended and restated to include the Dealer Manager as an additional dealer manager for the Offering. From August 3, 2020 through August 31, 2020, the Dealer Manager and IAA served as “co-dealer managers” and, effective September 1, 2020, IAA assigned and transferred all of IAA’s rights, obligations, interests and benefits under the Dealer Manager Agreement to the Dealer Manager.

The Company may also make investments through HPCI-MB, a wholly owned subsidiary taxed under subchapter C of the Code that generally holds the equity investments of the Company that are taxed as pass-through entities.

Note 2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of presentation: The accompanying interim financial statements of the Company and related financial information have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and pursuant to ASC Topic 946, Financial Services–Investment Companies, the requirements for reporting on Form 10-Q, and Articles 6, 10 and 12 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. However, in the opinion of management, the interim financial statements include all adjustments, consisting only of normal and recurring accruals and adjustments, necessary for fair presentation as of and for the periods presented. Certain amounts in the prior period financial statements have been reclassified to conform to the current year presentation. These financial statements and notes hereto should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10 K for the year ended December 31, 2019. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the full year.

Significant Accounting Policies: The following information supplements the description of significant accounting policies contained in Note 2 to the Company's financial statements included in the Company's Annual Report on Form 10 K for the year ended December 31, 2019.

Use of estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates.

Concentration of credit risk: Aside from its debt instruments, financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits at financial institutions. At various times during the year, the Company may exceed the federally insured limits. To mitigate this risk, the Company places cash deposits only with high credit quality institutions; management believes this risk of loss is minimal. The amount of loss due to credit risk from debt investments if borrowers fail to perform according to the terms of the contracts, and the collateral or other security for those instruments proved to be of no value to the Company, is equal to the Company's recorded investment in debt instruments and the unfunded loan commitments as disclosed in Note 6.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

Offering costs: Offering costs include legal, accounting, printing and other offering expenses pertaining to the preparation of the Offering; the related dealer-manager agreement; and other underwriting expenses, which include permissible due diligence reimbursements to the Dealer Manager and participating broker-dealers. Both the Investment Advisory Agreement and CIM Sub-Advisory Agreement (together, the "Advisory Agreements") limit the Company's liability for offering costs, and the related amortization expense, during the periods in which such limitations are operative; the Investment Advisory Agreement limited offering costs through August 3, 2020, and the CIM Sub-Advisory Agreement limits offering costs thereafter. See Expense Limitation Agreements and Contractual Issuer Expenses, below, and Note 3.

Expense Limitation Agreements and Contractual Issuer Expenses: The Company benefits from the following expense limitation agreements with the Advisors: (i) portions of the Advisory Agreements, which limit offering costs as well as certain Contractual Issuer Expenses, and (ii) the Prior Expense Support Agreement and the Expense Support Agreement (together, the "ESAs"), which limit all other operating expenses; the Prior Expense Support Agreement was in effect through August 3, 2020, with the Expense Support Agreement effective thereafter. See Note 3.

Advisory Agreements

The Advisory Agreements contain provisions limiting the Company's obligation to recognize and pay (i) offering costs and (ii) other contractually-defined costs pertaining to the Offering, including (a) costs associated with technology integration between the Company’s systems and those of its participating broker-dealers; (b) permissible due diligence reimbursements, marketing expenses, which includes development of marketing materials and marketing presentations, training and educational meetings, and generally coordinating the marketing process for the Company; and (c) the salaries and direct expenses of the Advisors' employees, employees of their affiliates and others while engaged in organization, offering, and these other contractually-defined activities.

The Company recognizes a reimbursement liability for expenses limited under the Advisory Agreements as the substantive conditions for incurrence of the liability—specifically, the sale of shares, the proceeds of which may be used to pay the Advisors for unreimbursed costs—become satisfied. Any such reimbursement by the Company will be allocated first to reimburse any reimbursable expenses incurred by OFS Advisor or its affiliates that are eligible for reimbursement pursuant to the Investment Advisory Agreement, followed by reimbursement to CIM Capital pursuant to the CIM Sub-Advisory Agreement.

Expense Support Agreements

During the periods in which each ESA is in effect, each ESA limits all other operating expenses not separately limited under the Advisory Agreements, such that no portion of the Company’s distributions to stockholders will be paid from its Offering proceeds, and provides for expense reduction payments from the Advisors to the Company in any quarterly period in which the Company’s cumulative distributions to stockholders exceeds its cumulative distributable ordinary income and net realized gains ("Cumulative Taxable Income"). Cumulative distributions to stockholders may exceed Cumulative Taxable Income to the extent of cumulative tax-basis return-of-capital distributions received by the Company from its investments without resulting in an expense limitation payment from the Advisors.

The ESAs provide for reimbursement of expense reduction payments ("Reimbursement Payments") by the Company to the Advisors; however, such liability shall only accrue (i) to the extent they do not cause the then-current annualized year-to-date and quarterly "Other Operating Expense Ratio" (defined below) to exceed such ratios for the annual and quarterly periods, respectively, for which the Company will reimburse the Advisors, and (ii) if the then-current annualized rate of distribution per share equals or exceeds the annualized rate of distribution per share of the supported period for which the Company will reimburse the Advisors. The Other Operating Expense Ratio is defined as total operating expenses reported in the statement of operations excluding interest expense, management fees, incentive fees, organization cost, amortization of deferred offering costs, and Contractual Issuer Expenses as a percentage of net assets. The Advisors will not be entitled to reimbursement (i) if the Other Operating Expenses Ratio at the time of reimbursement, after consideration of the impact of reimbursement on such ratio, exceeds the Other Operating Expenses Ratio in effect at the time the expenses were reimbursed or (ii) if our current distribution rate is lower than the distribution rate for the period the expenses will be reimbursed. Any such reimbursement by the Company will be allocated first to reimburse any reimbursable expenses incurred by OFS Advisor or its affiliates that are eligible for reimbursement pursuant to the Prior Expense Support Agreement, followed by reimbursement to CIM Capital pursuant to the Expense Support Agreement.

New accounting pronouncement issued: In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 840): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”), which provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates (e.g., LIBOR) that are expected to be discontinued. ASU 2020-04 allows, among other things, certain contract modifications, such as those within the scope of Topic 310 on receivables, to be accounted as a continuation of the existing

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

contract. This ASU was effective upon the issuance and its optional relief can be applied through December 31, 2022. The Company will consider this optional guidance prospectively, if applicable.

Note 3. Related Party Transactions

Investment Advisory and Management Agreement: OFS Advisor manages the day-to-day operations of, and provides investment advisory services to, the Company pursuant to an Investment Advisory Agreement, which became effective on August 30, 2016, when the Company satisfied the Minimum Offering Requirement. Under the terms of the Investment Advisory Agreement, which are in accordance with the 1940 Act and subject to the overall supervision of the Board, OFS Advisor is responsible for sourcing potential investments, conducting research and diligence on potential investments and equity sponsors, analyzing investment opportunities, structuring investments, and monitoring investments and portfolio companies on an ongoing basis. OFS Advisor is a subsidiary of OFSAM and a registered investment advisor under the Advisers Act.

OFS Advisor receives fees for providing services, consisting of two components: a base management fee and an incentive fee. The base management fee is calculated at an annual rate of 1.25% and based on the average value of the Company’s total assets (other than cash, but including assets purchased with borrowed amounts and assets owned by any consolidated entity) at the end of the two most recently completed calendar quarters, adjusted for any share issuances or repurchases during the quarter.

The incentive fee has two parts. The first part ("Income Incentive Fee") is calculated and payable quarterly in arrears based on the Company’s pre-incentive fee net investment income for the immediately preceding calendar quarter. For this purpose, pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees such as commitment, origination and sourcing, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the quarter (including the base management fee, any expenses payable under the Administration Agreement and any interest expense and dividends paid on any outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest or dividend feature (such as OID, debt instruments with PIK interest, equity investments with accruing or PIK dividend and zero coupon securities), accrued income that the Company has not yet received in cash.

Pre-incentive fee net investment income is expressed as a rate of return on the value of the Company’s net assets (defined as total assets less indebtedness and before taking into account any incentive fees payable during the period) at the end of the immediately preceding calendar quarter. The incentive fee with respect to pre-incentive fee net income is 100.0% of the amount, if any, by which the pre-incentive fee net investment income for the immediately preceding calendar quarter exceeds a 1.75% (which is 7.0% annualized) “hurdle rate” but is less than 2.1875% (or 8.75% annually), referred to as the “catch-up” provision, and 20.0% of the amount of pre-incentive fee net investment income, if any, that exceeds 2.1875%. The “catch-up” is meant to provide OFS Advisor with 20.0% of the pre-incentive fee net investment income as if a hurdle rate did not apply if this pre-incentive fee net investment income exceeds 2.1875% in any calendar quarter.

Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Because of the structure of the incentive fee, it is possible that the Company may pay an incentive fee in a quarter in which the Company incurs a loss. For example, if the Company receives pre-incentive fee net investment income in excess of the quarterly minimum hurdle rate, the Company will pay the applicable incentive fee even if the Company has incurred a loss in that quarter due to realized and unrealized capital losses. The Company’s net investment income used to calculate this part of the incentive fee is also included in the amount of the Company’s gross assets used to calculate the base management fee. These calculations are appropriately prorated for any period of less than three months and adjusted for any share issuances or repurchases during such quarter.

The second part of the incentive fee (the “Capital Gain Fee”) will be determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), and will equal 20.0% of the Company’s aggregate realized capital gains, if any, on a cumulative basis through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation through the end of such year, less all previous amounts paid in respect of the Capital Gain Fee.

The Company accrues the Capital Gain Fee if, on a cumulative basis, the sum of net realized capital gains and (losses) plus net unrealized appreciation and (depreciation) is positive. If, on a cumulative basis, the sum of net realized capital gains (losses)

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

plus net unrealized appreciation (depreciation) decreases during a period, the Company will reverse any excess Capital Gain Fee previously accrued such that the amount of Capital Gains Fee accrued is no more than 20% of the sum of net realized capital gains (losses) plus net unrealized appreciation (depreciation).

The Investment Advisory Agreement was originally approved for a period of two years from August 30, 2016 to August 30, 2018 and, unless terminated earlier as described below, will remain in effect from year-to-year upon annual approval by the Board or by the affirmative vote of the holders of a majority of the Company’s outstanding voting securities, and, in either case, if also approved by a majority of the Company’s directors who are not “interested persons” as defined in the 1940 Act. On April 2, 2020, the Board approved the continuation of the Investment Advisory Agreement. The Investment Advisory Agreement will automatically terminate in the event of its assignment, as defined in the 1940 Act, and may be terminated by the Company or OFS Advisor without penalty upon not less than 60 days written notice to the other. The holders of a majority of our outstanding voting securities may also terminate the Investment Advisory Agreement without penalty upon not less than 60 days written notice.

Investment Sub-Advisory Agreement: CIM Capital serves as the Company’s sub-adviser pursuant to the CIM Sub-Advisory Agreement, which became effective on August 3, 2020. Pursuant to the terms of the CIM Sub-Advisory Agreement, CIM Capital evaluates and advises the Company on its private capital market strategy, including market trends and terms, provides financial and strategic planning advice and analysis, interprets market demand for products, assists in establishing the Company's operational readiness and selecting and negotiating engagements with third-party service providers, and coordinates the dissemination of customary information to interested parties.

Under the CIM Sub-Advisory Agreement, at the end of each calendar quarter, OFS Advisor shall pay CIM Capital a fee calculated by: (i) taking the total management fees (base management fees plus any incentive fees) payable to OFS Advisor by the Company for each such quarter and multiplying such amount by a fraction, the numerator of which shall equal total unlevered equity capital attributable to the sale of the Company’s common stock through the end of the quarter (the “Total Contributed Capital”) minus $29,512,462 and the denominator of which shall equal the Total Contributed Capital (such product, the “Adjusted Management Fee Amount”); and (ii) multiplying the Adjusted Management Fee Amount by 0.50. CIM Capital's fees will be paid by OFS Advisor out of the fees OFS Advisor receives from the Company pursuant to the Investment Advisory Agreement and will not impact the Company’s expenses.

Dealer Manager Agreement: Pursuant to the Dealer Manager Agreement, the Dealer Manager, an affiliate of the Company, OFS Advisor and CIM Capital, provides certain sales, promotional and marketing services to the Company in connection with the Offering. The Company pays the Dealer Manager an aggregate dealer manager fee of 3.0% of the gross proceeds from sales of the Offering.

Administration Agreement: OFS Services furnishes the Company with office facilities and equipment, necessary software licenses and subscriptions, and clerical, bookkeeping and record keeping services at such facilities pursuant to the Administration Agreement. Under the Administration Agreement, OFS Services performs, or oversees the performance of, the Company’s required administrative services, which include being responsible for the financial records that the Company is required to maintain and preparing reports to its stockholders and all other reports and materials required to be filed with the SEC or any other regulatory authority. In addition, OFS Services assists the Company in determining and publishing its net asset value, oversees the preparation and filing of its tax returns and the printing and dissemination of reports to its stockholders, and generally oversees the payment of the Company’s expenses and the performance of administrative and professional services rendered to the Company by others. Under the Administration Agreement, OFS Services also provides managerial assistance on the Company’s behalf to those portfolio companies that have accepted the Company’s offer to provide such assistance. Payment under the Administration Agreement is equal to an amount based upon the Company’s allocable portion of OFS Services’ overhead in performing its obligations under the Administration Agreement, including, but not limited to, rent, information technology services and the Company’s allocable portion of the cost of its officers, including its chief executive officer, chief financial officer, chief compliance officer, chief accounting officer, and their respective staffs. To the extent that OFS Services outsources any of its functions, the Company will pay the fees associated with such functions on a direct basis without profit to OFS Services. Amounts charged under the Administration Agreement exclude Contractual Issuer Expenses.

Equity Ownership: As of September 30, 2020, affiliates of OFS Advisor held 74,084 shares of common stock, which is approximately 3% of the Company's outstanding shares of common stock.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

Distributions paid to affiliates and expenses recognized under agreements with the Advisors, the Dealer Manager and OFS Services for the three and nine months ended September 30, 2020 and 2019 are presented below:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Base management fees	$	135,497	$	100,333	$	400,894	$	291,374
Incentive fees	72,366		48,938		213,843		127,004
Administration fees	242,737		175,533		644,478		502,571
Dealer manager fees	1,500		—		1,500		—
Reimbursements of organizational, offering and Contractual Issuer Expenses	6,375		28,560		13,560		89,578
Distributions paid to affiliates	18,380		19,447		55,896		58,341

Expense Limitation Agreements: The Advisory Agreements and ESAs limit the Company's incurred expenses. The Advisory Agreements and the ESAs are substantively identical in their terms and conditions with respect to expense limitation support provided to the Company. Expense limitations prior to August 3, 2020, were provided by OFS Advisor and expense limitations on or after August 3, 2020, are provided by CIM Capital. Expense limitations provided under the Advisory Agreements and ESAs for the three and nine months ended September 30, 2020 and 2019, are presented below:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net offering costs and Contractual Issuer Expenses limitations under the Advisory Agreements	$	75,451	$	23,463	$	237,369	$	32,440
Operating expense limitations under the ESAs	452,480		231,737		1,212,358		743,131
Net expense limitations under agreements with the Advisors	$	527,931	$	255,200	$	1,449,727	$	775,571

The Company is conditionally obligated to reimburse the Advisors for aggregate expense support provided of $4,559,180 and $4,167,383 at September 30, 2020 and December 31, 2019, respectively, as presented below:



	September 30, 2020		December 31, 2019
Unreimbursed costs under the Advisory Agreements:
Offering costs:
Unamortized as of period end	$	131,193	$	167,776
Amortized as of period end	573,678		418,283
Contractual Issuer Expenses	43,368		77,476
Total unreimbursed costs under the Advisory Agreements	748,239		663,535
Unreimbursed operating expense support under the ESAs	3,810,941		3,503,848
Total conditional reimbursement obligation under expense limitation agreements with the Advisors	$	4,559,180	$	4,167,383

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

Offering Costs and Contractual Issuer Expense Limitations: The Company is conditionally liable for offering costs and Contractual Issuer Expenses that the Advisors have incurred on its behalf under the terms of the Advisory Agreements. The Advisory Agreements entitle the Advisors to receive up to 1.5% of the gross proceeds raised in the Offering until all reimbursable offering costs and Contractual Issuer Expenses paid have been recovered. Offering expenses and Contractual Issuer Expenses incurred by the Advisors will be eligible for reimbursement for three years from the date incurred. Unreimbursed offering costs and Contractual Issuer Expenses subject to conditional reimbursement as of September 30, 2020, are summarized below:



Period incurred	Unreimbursed Total		Expiration of reimbursement eligibility ⁽¹⁾
Three months ended December 31, 2017	$	79,120	December 31, 2020
Three months ended March 31, 2018	49,363		March 31, 2021
Three months ended June 30, 2018	50,109		June 30, 20221
Three months ended September 30, 2018	26,413		September 30, 2021
Three months ended December 31, 2018	23,452		December 31, 2021
Year ended December 31, 2019	305,436		December 31, 2022
Nine months ended September 30, 2020	214,346		September 30, 2023
Total unreimbursed offering costs and Contractual Issuer Expenses	$	748,239

(1) Expenses are pooled monthly for the determination of their reimbursement expiration date and are summarized into quarterly, yearly and year-to-date pools for presentation purposes. Expirations of reimbursement eligibility for portions of each pool occurs at each month-end within the periods presented above.

Expense Support Agreement: Unreimbursed support for operating expenses provided under the ESAs and subject to conditional reimbursement as of September 30, 2020, is summarized below:



			Other Operating Expense Ratio
Supported period	Amount of expense limitation		Annualized for the quarter limitation was provided		Annual for year limitation was provided		Annualized rate of distribution per share ⁽¹⁾	Expiration of reimbursement eligibility
Three months ended December 31, 2017	$	316,379	8.1	%	18.1	%	7.0%	December 31, 2020
Three months ended March 31, 2018	369,270		10.1	%	7.2	%	7.0%	March 31, 2021
Three months ended June 30, 2018	320,732		8.2	%	7.2	%	7.0%	June 30, 2021
Three months ended September 30, 2018	275,339		6.9	%	7.2	%	7.0%	September 30, 2021
Three months ended December 31, 2018	188,188		5.3	%	7.2	%	7.0%	December 31, 2021
Three months ended March 31, 2019	272,547		6.1	%	5.5	%	7.0%	March 31, 2022
Three months ended June 30, 2019	238,847		5.7	%	5.5	%	7.0%	June 30, 2022
Three months ended September 30, 2019	231,737		5.1	%	5.5	%	7.1%	September 30, 2022
Three months ended December 31, 2019	385,544		4.9	%	5.5	%	7.2%	December 31, 2022
Three months ended March 31, 2020	334,160		5.9	%	n/m⁽²⁾		7.2%	March 31, 2023
Three months ended June 30, 2020	425,718		6.1	%	n/m⁽²⁾		7.2%	June 30, 2023
Three months ended September 30, 2020	452,480		6.7	%	n/m⁽²⁾		7.2%	September 30, 2023
Total unreimbursed operating expense limitations provided under the ESAs	$	3,810,941


(1)	The annualized rate of distributions per share is expressed as a percentage equal to the annualized distribution amount as of the end of the applicable period (which is calculated by annualizing the regular quarterly cash distribution per share as of such date without compounding), divided by our Offering price per share as of such date.


(2)	Not meaningful. Annual Other Operating Expense Ratio upon which reimbursement is conditioned is based on the full-year results, and will not be determined until after December 31, 2020.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

Amounts Due to OFS Advisor and its Affiliates: Amounts due to OFS Advisor and its affiliates of $150,330 and $107,024 reported in the consolidated statements of assets and liabilities as of September 30, 2020 and December 31, 2019, respectively, represent amounts payable under the Advisory Agreements and Administration Agreement net of amounts receivable under the ESAs.

Note 4. Investments

As of September 30, 2020, the Company had loans to 33 portfolio companies, of which 98% were senior secured loans and 2% were subordinated loans, at fair value, as well as common and preferred equity investments in seven of these portfolio companies. The Company also held only equity in one portfolio company in which it did not hold a debt investment and three Structured Finance Note investments. At September 30, 2020, investments consisted of the following:



			Percentage of Total						Percentage of Total
	Amortized Cost		Amortized Cost		Net Assets		Fair Value		Fair Value		Net Assets
Senior secured debt investments ⁽¹⁾	$	42,092,335	91.9	%	156.6	%	$	41,251,500	92.9	%	153.5	%
Subordinated debt investments	1,482,327		3.2		5.5		724,966		1.6		2.7
Preferred equity investments	191,409		0.4		0.7		287,000		0.6		1.1
Common equity investments	497,130		1.1		1.9		581,950		1.3		2.2
Total debt and equity investments	$	44,263,201	96.6	%	164.7	%	$	42,845,416	96.4	%	159.5	%
Structured Finance Notes	1,565,159		3.4		5.8		1,606,063		3.6		6.0
Total investments	$	45,828,360	100.0	%	170.5	%	$	44,451,479	100.0	%	165.5	%

(1) Includes debt investments, typically referred to as unitranche, in which we have entered into contractual arrangements with co-lenders whereby, subject to certain conditions, we have agreed to receive our principal payments after the repayment of certain co‑lenders pursuant to a payment waterfall. Amortized cost and fair value of these investments were $9,663,986 and $9,759,084, respectively.

At September 30, 2020, all of the Company’s debt and equity investments were domiciled in the United States, while its Structured Finance Notes were domiciled in the Cayman Islands. Structured Finance Notes generally hold underling portfolios of investments in companies domiciled in the United States of America. Geographic composition is determined by the location of the corporate headquarters of the portfolio company. The industry compositions of the Company’s portfolio were as follows:



			Percentage of Total						Percentage of Total
	Amortized Cost		Amortized Cost		Net Assets		Fair Value		Fair Value		Net Assets
Administrative and Support and Waste Management and Remediation Services
Security Systems Services (except Locksmiths)	$	2,357,739	5.1	%	8.8	%	$	2,265,797	5.1	%	8.4	%
Arts, Entertainment, and Recreation
All Other Amusement and Recreation Industries	1,496,703		3.3		5.6		1,405,117		3.2		5.2
Construction
Plumbing, Heating, and Air-Conditioning Contractors	516,680		1.1		1.9		476,112		1.1		1.7
Finance and Insurance
Direct Health and Medical Insurance Carriers	1,350,360		2.9		5.0		1,371,000		3.1		5.1
Insurance Agencies and Brokerages	1,403,489		3.1		5.2		1,338,863		3.0		5.0
Health Care and Social Assistance
Child Day Care Services	698,865		1.5		2.6		667,765		1.5		2.5
Diagnostic Imaging Centers	1,183,780		2.6		4.4		1,298,002		2.9		4.9
Home Health Care Services	2,183,844		4.8		8.1		2,206,281		5.0		8.2
Offices of Physicians, Mental Health Specialists	2,031,607		4.4		7.6		1,998,615		4.5		7.5

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements



			Percentage of Total						Percentage of Total
	Amortized Cost		Amortized Cost		Net Assets		Fair Value		Fair Value		Net Assets
Outpatient Mental Health and Substance Abuse Centers	$	993,644	2.2	%	3.7	%	$	987,781	2.2	%	3.7	%
Information
Data Processing, Hosting, and Related Services	1,190,080		2.6		4.4		1,252,577		2.8		4.6
Software Publishers	3,171,487		6.9		11.8		3,165,607		7.1		11.7
Manufacturing
Commercial Printing (except Screen and Books)	245,246		0.5		0.9		234,744		0.5		0.8
Custom Compounding of Purchased Resins	1,412,084		3.1		5.3		1,494,231		3.4		5.6
Semiconductor and Related Device Manufacturing	90,637		0.2		0.3		96,487		0.2		0.4
Truck Trailer Manufacturing	1,833,788		4.0		6.8		1,867,412		4.2		7.0
Unlaminated Plastics Profile Shape Manufacturing	2,007,435		4.4		7.5		1,927,370		4.3		7.2
Other Services (except Public Administration)
Automotive Oil Change and Lubrication Shops	544,055		1.2		2.0		538,764		1.2		2.0
Professional, Scientific, and Technical Services
Administrative Management and General Management Consulting Services	4,354,494		9.6		16.2		4,347,764		9.8		16.2
Other Accounting Services	2,290,893		5.0		8.5		2,352,432		5.3		8.8
Other Computer Related Services	1,116,399		2.4		4.2		1,053,833		2.4		3.9
Public Administration
Other Justice, Public Order, and Safety Activities	52,107		0.1		0.2		52,193		0.1		0.2
Retail Trade
Cosmetics, Beauty Supplies, and Perfume Stores	1,985,045		4.3		7.4		1,990,007		4.5		7.4
Shoe Store	512,686		1.1		1.9		281,625		0.6		1.0
Wholesale Trade
Construction and Mining (except Oil Well) Machinery and Equipment Merchant Wholesalers	1,843,340		4.0		6.9		1,902,473		4.3		7.1
Industrial Machinery and Equipment Merchant Wholesalers	1,697,129		3.7		6.3		1,585,095		3.6		5.9
Industrial Supplies Merchant Wholesalers	1,478,861		3.2		5.5		1,157,477		2.6		4.3
Motor Vehicle Parts (Used) Merchant Wholesalers	3,213,583		7.1		12.0		3,086,651		6.9		11.5
Stationery and Office Supplies Merchant Wholesalers	1,007,141		2.2		3.7		443,341		1.0		1.7
Total debt and equity investments	$	44,263,201	96.6	%	164.7	%	$	42,845,416	96.4	%	159.5	%
Structured Finance Notes	1,565,159		3.4		5.8		1,606,063		3.6		6.0
Total investments	$	45,828,360	100.0	%	170.6	%	$	44,451,479	100.0	%	165.5	%

As of December 31, 2019, the Company had loans to 33 portfolio companies, of which 96% were senior secured loans and 4% were subordinated loans, at fair value, as well as equity investments in five of these portfolio companies. The Company also

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

held an equity investment in a portfolio company in which it did not hold a debt investment. At December 31, 2019, investments consisted of the following:



			Percentage of Total						Percentage of Total
	Amortized Cost		Amortized Cost		Net Assets		Fair Value		Fair Value		Net Assets
Senior secured debt investments ⁽¹⁾	$	38,648,951	94.8	%	132.7	%	$	37,953,346	94.5	%	130.4	%
Subordinated debt investments	1,478,811		3.6		5.1		1,384,896		3.5		4.8
Preferred equity investments	191,409		0.5		0.7		201,006		0.5		0.7
Common equity investments	450,958		1.1		1.5		585,675		1.5		2.0
Total	$	40,770,129	100.0	%	140.0	%	$	40,124,923	100.0	%	137.9	%

(1) Includes debt investments in which we have entered into contractual arrangements with co-lenders whereby, subject to certain conditions, we have agreed to receive our principal payments after the repayment of certain co-lenders pursuant to a payment waterfall. Amortized cost and fair value of these investments were $6,067,017 and $6,038,539, respectively.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

At December 31, 2019, all of the Company’s investments were domiciled in the United States. Geographic composition is determined by the location of the corporate headquarters of the portfolio company. The industry compositions of the Company’s portfolio were as follows:



			Percentage of Total						Percentage of Total
	Amortized Cost		Amortized Cost		Net Assets		Fair Value		Fair Value		Net Assets
Administrative and Support and Waste Management and Remediation Services
Security Systems Services (except Locksmiths)	$	1,856,192	4.6	%	6.4	%	$	1,862,669	4.6	%	6.4	%
Temporary Help Services	905,329		2.2		3.1		897,210		2.2		3.1
Arts, Entertainment, and Recreation
All other amusement and recreation industries	1,329,352		3.3		4.6		1,328,022		3.3		4.6
Construction
Plumbing, Heating, and Air-Conditioning Contractors	510,467		1.3		1.8		580,538		1.4		2.0
Health Care and Social Assistance
Child Day Care Services	792,812		1.9		2.7		806,492		2.0		2.8
Diagnostic Imaging Centers	1,181,330		2.9		4.1		1,176,600		2.9		4.0
Home Health Care Services	2,181,688		5.4		7.5		2,119,046		5.3		7.3
Offices of Physicians, Mental Health Specialists	1,691,151		4.1		5.8		1,687,791		4.2		5.8
Outpatient Mental Health and Substance Abuse Centers	992,562		2.4		3.4		1,000,000		2.5		3.4
Information
Data Processing, Hosting, and Related Services	1,200,566		2.9		4.1		1,210,257		3.0		4.2
Software Publishers	3,305,628		8.1		11.3		3,274,482		8.2		11.2
Finance and Insurance
Direct Health and Medical Insurance Carriers	1,347,363		3.3		4.6		1,370,999		3.4		4.7
Insurance Agencies and Brokerages	440,144		1.1		1.5		433,920		1.1		1.5
Manufacturing
Commercial Printing (except Screen and Books)	245,952		0.6		0.8		237,890		0.6		0.8
Custom Compounding of Purchased Resins	1,409,541		3.5		4.8		1,480,944		3.7		5.1
Truck Trailer Manufacturing	1,823,933		4.5		6.3		1,807,404		4.5		6.2
Unlaminated Plastics Profile Shape Manufacturing	2,008,434		4.8		6.9		1,971,656		4.9		6.8
Other Services (except Public Administration)
Automotive Oil Change and Lubrication Shops	555,017		1.4		1.9		563,102		1.4		1.9
Communication Equipment Repair and Maintenance	1,511,250		3.7		5.2		1,511,250		3.8		5.2
Professional, Scientific, and Technical Services
Administrative Management and General Management Consulting Services	3,026,099		7.4		10.4		3,025,561		7.6		10.4

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements



			Percentage of Total						Percentage of Total
	Amortized Cost		Amortized Cost		Net Assets		Fair Value		Fair Value		Net Assets
Other Computer Related Services	$	1,216,104	3.0	%	4.2	%	$	1,223,611	3.0	%	4.2	%
Public Administration
Other Justice, Public Order, and Safety Activities	577,810		1.4		2.0		32,579		0.1		0.1
Retail Trade
Cosmetics, Beauty Supplies, and Perfume Stores	1,982,998		4.9		6.8		1,982,998		4.9		6.8
Shoe Store	509,170		1.2		1.7		521,919		1.3		1.8
Transportation and Warehousing
General Warehousing and Storage	1,019,049		2.5		3.5		1,036,579		2.6		3.6
Wholesale Trade
Industrial Machinery and Equipment Merchant Wholesalers	1,697,896		4.2		5.8		1,690,356		4.2		5.8
Industrial Supplies Merchant Wholesalers	1,474,924		3.6		5.1		1,410,917		3.5		4.8
Motor Vehicle Parts (Used) Merchant Wholesalers	2,970,229		7.3		10.2		2,970,229		7.5		10.2
Stationery and Office Supplies Merchant Wholesalers	1,007,141		2.5		3.5		909,902		2.3		3.1
	$	40,770,129	100.0	%	140.0	%	$	40,124,923	100.0	%	137.8	%

When there is reasonable doubt that principal, cash interest, or PIK interest will be collected, loan investments are placed on non-accrual status and the Company will generally cease recognizing cash interest, PIK interest, or Net Loan Fee amortization, as applicable. Interest accruals and Net Loan Fee amortization are resumed on non-accrual investments only when they are brought current with respect to principal, interest and when, in the judgment of management, the investments are estimated to be fully collectible as to all principal. At September 30, 2020, the aggregate amortized cost and fair value of loans on non-accrual status with respect to all interest and Net Loan Fee amortization was $1,007,141 and $443,341, respectively, and $577,810 and $32,579, respectively, at December 31, 2019.

On March 27, 2020, the Company's debt investments in Constellis Holdings, LLC were restructured, pursuant to which the Company converted its non-accrual debt investments into two new debt investments and 1,362 shares of common equity. The cost and fair value of debt investments received were $6,174 and $6,172, respectively, and the cost and fair value of the shares of common equity received were $46,403 and $46,410, respectively. For the nine months ended September 30, 2020, the Company recognized a realized loss of $526,444 on the restructuring, which was fully recognized as an unrealized loss as of December 31, 2019.

Note 5. Fair Value of Financial Instruments

The Company’s investments are valued as determined by the Board. These fair values are determined in accordance with a documented valuation policy and a consistently applied valuation process.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair values are determined with models or other valuation techniques, valuation inputs, and assumptions market participants would use in pricing an asset or liability. Valuation inputs are organized in a hierarchy that gives the highest priority to prices for identical assets or liabilities quoted in active markets (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of inputs in the fair value hierarchy are described below:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

Level 2: Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified term, a Level 2 input must be observable for substantially the full term of the asset or liability. Level 2 inputs include: (i) quoted prices for similar assets or liabilities in active markets, (ii) quoted prices for identical or similar assets or liabilities in markets that are not active, (iii)

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

inputs other than quoted prices that are observable for the asset or liability, and (iv) inputs that are derived principally from or corroborated by observable market data.

Level 3: Unobservable inputs for the asset or liability, and situations where there is little, if any, market activity for the asset or liability at the measurement date.

The inputs into the determination of fair value are based upon the best information under the circumstances and may require significant judgment or estimation by management. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. The Company generally categorizes its investment portfolio into Level 2 and Level 3 of the hierarchy.

The Company assesses the levels of the investments at each measurement date, and transfers between levels are recognized on the measurement date. Senior securities with a fair value of $114,851 and $114,851 were transferred from Level 3 to Level 2 during the three and nine months ended September 30, 2020, respectively. Senior securities with a fair value of $0 and $3,927,041 were transferred from Level 3 to Level 2 during the three and nine months ended September 30, 2019, respectively.

Due to the inherent uncertainty of determining the fair value of Level 3 investments, the fair value of the investments may differ significantly from the values that would have been used had a ready market or observable inputs existed for such investments and may differ materially from the values that may ultimately be received or settled. Further, such investments are generally subject to legal and other restrictions, or otherwise are less liquid than publicly traded instruments. If the Company were required to liquidate a portfolio investment in a forced or liquidation sale, the Company might realize significantly less than the value at which such investment had previously been recorded. The Company’s investments are subject to market risk, which is the potential for changes in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments are traded.

The following tables present the Company's investment portfolio measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019:



Security	Level 1		Level 2		Level 3		Fair Value at September 30, 2020
Debt investments	$	—	$	1,843,185	$	40,133,281	$	41,976,466
Equity investments	—		—		868,950		868,950
Structured Finance Notes	—		—		1,606,063		1,606,063
	$	—	$	1,843,185	$	42,608,294	$	44,451,479



Security	Level 1		Level 2		Level 3		Fair Value at December 31, 2019
Debt investments	$	—	$	3,360,575	$	35,977,667	$	39,338,242
Equity investments	—		—		786,681		786,681
	$	—	$	3,360,575	$	36,764,348	$	40,124,923

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

The following tables provide quantitative information about valuation techniques and the Company’s significant inputs to the Company’s Level 3 fair value measurements as of September 30, 2020 and December 31, 2019. In addition to the techniques and inputs noted in the tables below, according to the Company’s valuation policy, the Company may also use other valuation techniques and methodologies when determining the Company’s fair value measurements. The tables below provide information on the significant Level 3 inputs as they relate to the Company’s fair value measurements.



	Fair Value at September 30, 2020		Valuation techniques	Unobservable input	Range (Weighted average)
Debt investments:
Senior secured	$	39,402,072	Discounted cash flow	Discount rates	7.01% - 24.42% (10.19%)
Senior secured	6,243		Market approach	EBITDA multiples	8.00x - 8.00x (8.00x)
Subordinated	724,966		Market approach	EBITDA multiples	3.87x - 7.50x (6.09x)

Structured Finance Notes⁽³⁾:
Mezzanine debt	1,606,063		Discounted cash flow	Discount rates	8.60% - 10.50% (9.79%)
				Constant Default Rate⁽¹⁾	0.00% - 2.00% (1.01%)
				Constant Default Rate⁽²⁾	3.00% - 3.00% (3.00%)
				Recovery Rate	60.00% - 60.00% (60.00%)
Equity investments:
Preferred equity	287,000		Market approach	EBITDA multiples	7.50x - 7.50x (7.50x)
Common equity and warrants	581,950		Market approach	EBITDA multiples	3.75x - 9.00x (6.47x)

	$	42,608,294

(1) Constant default rates for the next nine months.

(2) Constant default rates for the nine months following the next nine months.

(3) The cash flows utilized in the discounted cash flow calculations assume liquidation at current market prices and redeployment of proceeds on all assets currently in default and all assets below specified fair value thresholds.



	Fair Value at December 31, 2019		Valuation techniques	Unobservable input	Range (Weighted average)
Debt investments:
Senior secured	$	31,600,042	Discounted cash flow	Discount rates	5.64% - 35.00% (10.53%)
Senior secured	22,500		Market approach	EBITDA multiples	8.09x - 8.09x (8.09x)
Senior secured	2,970,229		Market approach	Transaction Price

Subordinated	1,384,896		Discounted cash flow	Discount rates	13.83% - 18.86% (17.14%)

Equity investments:
Preferred equity	201,006		Market approach	EBITDA multiples	9.02x - 9.02x (9.02x)
Common equity	585,675		Market approach	EBITDA multiples	4.50x - 10.75x (6.35x)
	$	36,764,348

Averages in the preceding two tables were weighted by the fair value of the related instruments.

Changes in market credit spreads or events impacting the credit quality of the underlying portfolio company (both of which could impact the discount rate), among other things, could have a significant impact on debt fair value. Due to the wide range of

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful.

The following tables present changes in the investment measured at fair value using Level 3 inputs for the nine months ended September 30, 2020 and 2019:



	Senior Secured Debt Investments			Subordinated Debt Investments			Preferred Equity		Common Equity			Structured Finance Notes		Total
Level 3 assets, January 1, 2020	$	34,592,771		$	1,384,896		$	201,006	$	585,675		$	—	$	36,764,348
Net unrealized appreciation (depreciation) on investments	(114,953		)	(663,445		)	85,994		(50,128		)	40,903		(701,629		)
Net realized loss on investments	(572,253		)	—			—		—			—		(572,253		)
Amortization of Net Loan Fees	68,022			705			—		—			15,348		84,075
Paid-in-kind interest income	4,937			4,002			—		—			—		8,939
Proceeds from principal payments on portfolio investments	(4,197,505		)	—			—		—			—		(4,197,505		)
Sale of portfolio investments	(800,983		)	—			—		—			—		(800,983		)
Purchase of portfolio investments	10,590,200			—			—		—			1,549,812		12,140,012
Conversion from debt investment to equity investment (Note 4)	(46,403		)	—			—		46,403			—		—
Amendment fees collected	(667		)	(1,192		)	—		—			—		(1,859		)
Transfers out of Level 3	(114,851		)	—			—		—					(114,851		)
Level 3 assets, September 30, 2020	$	39,408,315		$	724,966		$	287,000	$	581,950		$	1,606,063	$	42,608,294



	Senior Secured Debt Investments			Subordinated Debt Investments			Preferred Equity		Common Equity		Total
Level 3 assets, January 1, 2019	$	26,391,677		$	1,450,840		$	—	$	258,984	$	28,101,501
Net unrealized appreciation (depreciation) on investments	(149,978		)	(17,302		)	6,591		214,778		54,089
Net realized gain on investments	52			—			—		—		52
Amortization of Net Loan Fees	46,085			3,349			—		—		49,434
Paid-in-kind interest and dividend income	3,516			11,242			—		—		14,758
Proceeds from principal payments on portfolio investments	(2,441,591		)	—			—		—		(2,441,591		)
Sale or redemption of portfolio investments	(1,539,696		)	—			—		—		(1,539,696		)
Purchase of portfolio investments	7,793,541			—			191,409		166,469		8,151,419
Transfers out of Level 3	(3,927,041		)	—			—		—		(3,927,041		)
Level 3 assets, September 30, 2019	$	26,176,565		$	1,448,129		$	198,000	$	640,231	$	28,462,925

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

The net unrealized appreciation (depreciation) reported in the Company’s consolidated statements of operations for the nine months ended September 30, 2020 and 2019, attributable to the Company’s assets still held at those respective period ends was as follows:



	Period ended September 30,
	2020			2019
Senior secured debt investments	$	(682,959	)	$	(172,081	)
Subordinated debt investments	(663,445		)	(17,302		)
Preferred equity	85,994			6,591
Common equity	(49,897		)	214,778
Structured Finance Notes	40,903			—
Net unrealized appreciation (depreciation) on investments held	$	(1,269,404	)	$	31,986

Other Financial Assets and Liabilities

The Company provides disclosure of the fair value of financial instruments for which it is practical to estimate such value. The Company believes that the carrying amounts of its other financial instruments, such as cash, receivables and payables, approximate the fair value of such items due to the short maturity of such instruments. The PWB Credit Facility is a variable rate instrument and fair value approximates book value as of September 30, 2020 and December 31, 2019.

The following tables present the fair value measurements of the Company's debt and indicate the fair value hierarchy of the significant unobservable inputs utilized by the Company to determine such fair values as of September 30, 2020 and December 31, 2019:



	September 30, 2020
Description	Level 1		Level 2		Level 3 ⁽¹⁾		Total
PWB Credit Facility	$	—	$	—	$	2,750,000	$	2,750,000
Unsecured Note	—		—		15,634,037		15,634,037
Total debt, at fair value	$	—	$	—	$	18,384,037	$	18,384,037



	December 31, 2019
Description	Level 1		Level 2		Level 3 ⁽¹⁾		Total
PWB Credit Facility	$	—	$	—	$	—	$	—
Unsecured Note	—		—		14,641,555		14,641,555
Total debt, at fair value	$	—	$	—	$	14,641,555	$	14,641,555

(1) For Level 3 measurements, fair value is estimated by discounting remaining payments using current market rates for similar instruments at the measurement date and considering such factors as the legal maturity date.

The following table sets forth the carrying values and fair values of the Company’s debt as of September 30, 2020 and December 31, 2019:



	As of September 30, 2020				As of December 31, 2019
Description	Carrying Value		Fair Value		Carrying Value		Fair Value
PWB Credit Facility	$	2,750,000	$	2,750,000	$	—	$	—
Unsecured Note	14,695,801		15,634,037		14,696,550		14,641,555
Total debt	$	17,445,801	$	18,384,037	$	14,696,550	$	14,641,555

The information presented should not be interpreted as an estimate of the fair value of the entire Company since fair value measurements are only required for a portion of the Company’s assets and liabilities. Due to the wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

Note 6. Commitments and Contingencies

The Company has the following unfunded commitments to portfolio companies as of September 30, 2020 and December 31, 2019, respectively:



Name of Portfolio Company	Investment Type	September 30, 2020		December 31, 2019
A&A Transfer, LLC	Senior Secured Loan (Revolver)	$	237,303	$	—
Carolina Lubes, Inc.	Senior Secured Loan (Revolver)	80,357		80,357
Inergex Holdings, LLC	Senior Secured Loan (Revolver)	156,250		62,500
		$	473,910	$	142,857

From time to time, the Company is involved in legal proceedings in the normal course of its business. Although the outcome of such litigation cannot be predicted with any certainty, management is of the opinion, based on the advice of legal counsel, that final disposition of any litigation should not have a material adverse effect on the financial position of the Company as of September 30, 2020.

In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties that provide general indemnification. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. The Company believes the risk of any material obligation under these indemnifications to be low.

Note 7. Borrowings

PWB Credit Facility: The Company has a $10.0 million credit commitment under its PWB Credit Facility, maturing February 28, 2021, of which $2.8 million was drawn as of September 30, 2020. The effective interest rate on the PWB Credit Facility was 6.20% at September 30, 2020. The unfunded commitment under the PWB Credit Facility was $7.2 million as of September 30, 2020 and is available, subject to a borrowing base and other covenants. All investments are pledged as collateral under the PWB Credit Facility.

Unsecured Note: As of September 30, 2020, the Company's Unsecured Note had an aggregate outstanding principal of $15.0 million. The Unsecured Note has a fixed interest rate of 6.50% and is due on November 27, 2024. The effective interest rate on the Unsecured Note was 6.99% at September 30, 2020.

The Unsecured Note contains customary terms and conditions for unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a business development company within the meaning of the 1940 Act, and minimum asset coverage ratio. The Note Purchase Agreement also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, certain judgements and orders, and certain events of bankruptcy.

The Company's interest expense, average outstanding borrowing and weighted average interest expense on the Company's debt are presented below:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
PWB Credit Facility	$	40,587		$	88,033		$	155,297		$	287,052
Unsecured Note	262,187			—			780,503			—
Total interest expense⁽¹⁾	$	302,774		$	88,033		$	935,800		$	287,052

Average dollar borrowings	$	16,684,239		$	4,315,761		$	17,513,686		$	4,723,443
Weighted average interest rate	6.91		%	8.16		%	6.88		%	8.10		%

(1) Interest expense is inclusive of interest on the outstanding balance, commitment fees on undrawn amounts, and the amortization of deferred debt issuance costs.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

Note 8. Federal Income Tax

The Company has elected to be taxed as a RIC under Subchapter M of the Code. The determination of the tax attributes of the Company's distributions is made annually as of the end of its fiscal year based on its ICTI and distributions for the full year.

The Company records reclassifications to its capital accounts for permanent and temporary differences between the GAAP and tax treatment of components of income and the bases of assets and liabilities.

The tax-basis of portfolio investments and net unrealized appreciation (depreciation) on investments did not materially differ from their GAAP basis as of September 30, 2020 and December 31, 2019, respectively.

For further information, see the Company's Annual Report on Form 10-K for the year ended December 31, 2019.

Note 9. Financial Highlights

The following is a schedule of financial highlights for the three and nine months ended September 30, 2020 and 2019:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Per share operating performance:
Net asset value per share at beginning of period	$	12.00		$	13.24		$	13.00		$	13.00
Net investment income ⁽⁶⁾	0.24			0.25			0.74			0.74
Net realized loss on non-control/non-affiliate investments⁽⁶⁾	—			—			(0.26		)	—
Net unrealized appreciation (depreciation) on non-control/non-affiliate investments, net of taxes ⁽⁶⁾	0.42			(0.18		)	(0.35		)	0.02
Total from investment operations	0.66			0.07			0.13			0.76
Distributions ⁽¹⁾	(0.25		)	(0.26		)	(0.75		)	(0.78		)
Issuance of common stock ^{(2) (6)}	—			—			0.03			0.07
Net asset value per share at end of period	$	12.41		$	13.05		$	12.41		$	13.05
Total return based on net asset value ⁽³⁾⁽⁸⁾	5.5		%	0.5		%	1.5		%	6.5		%
Shares outstanding or subscribed at end of period	2,164,650			2,220,910			2,164,650			2,220,910
Weighted average shares outstanding or subscribed	2,203,227			2,147,688			2,225,957			1,994,994
Ratio/Supplemental Data
Average net asset value ⁽⁴⁾	$	26,553,800		$	28,340,947		$	27,246,418		$	26,518,454
Net asset value at end of period	$	26,857,908		$	28,975,358		$	26,857,908		$	28,975,358
Net investment income	$	532,989		$	536,140		$	1,654,865		$	1,479,429
Ratio of total net operating expenses to average net assets ⁽⁵⁾	7.6		%	5.7		%	7.8		%	5.9		%
Ratio of net investment income to average net assets ⁽⁵⁾	8.0		%	7.6		%	8.1		%	7.4		%
Portfolio turnover ⁽⁷⁾	0.8		%	3.0		%	15.9		%	13.0		%

(1)

The per share data for distributions is the actual amount of distributions declared per share during the period. The determination of the tax attributes of the Company’s distributions is made annually as of the end of its fiscal year based upon its ICTI for the full year and distributions paid for the full year. The Company anticipates its distributions to be comprised 100% from net investment income.


(2)	The issuance of common stock on a per share basis reflects the incremental net asset value change as a result of the issuance of common stock shares in the Company’s continuous public offering and the dilutive or anti-dilutive impact from significant changes in weighted-average shares outstanding during the period.


(3)	Calculated as ending net asset value less beginning net asset value, adjusting for distributions reinvested at the Company’s most recent quarter-end net asset value prior to the respective payment date of the distributions.


(4)	Based on the average of the net asset value at the beginning and end of the indicated period and if applicable the preceding calendar quarters.


(5)	Annualized.


(6)	Calculated on the average share method.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements


(7)	Portfolio turnover rate is calculated using the lesser of period-to-date sales and principal payments or period-to-date purchases over the average of the invested assets at fair value.


(8)	Not annualized.

Note 10. Capital Transactions

Common stock transactions

Below is a summary of transactions with respect to shares of the Company’s common stock issued or subscribed in the Offering during the nine months ended September 30, 2020 and 2019:



	Nine Months Ended September 30,
	2020				2019
	Shares	Amount			Shares	Amount
Gross proceeds from the Offering	66,483	$	903,992		425,953	$	5,973,635
Commissions and dealer manager fees	—	(76,250		)	—	(390,780		)
Dealer manager fees paid by OFS Advisor	—	—			—	122,036
Net proceeds to the Company	66,483	$	827,742		425,953	$	5,704,891

From May 19, 2017 through June 30, 2019, OFS Advisor paid the dealer manager fee on sales of shares of the Company's common stock in the Offering. Payments of dealer manager fees by OFS Advisor were not subject to reimbursement by the Company. The Company has agreed to pay the dealer manager fees on sales of shares of our common stock in the Offering subsequent to June 30, 2019.

Distributions

The following table reflects the cash distributions per share that the Company declared on its common stock during the nine months ended September 30, 2020 and 2019. Stockholders of record as of each respective record date were entitled to receive the distribution.

Date Declared

Record Dates

Payment Date

Monthly Per Share Amount

Cash

Distribution

Nine Months Ended September 30, 2019

January 29, 2019

January 29, 2019, February 26, 2019 and March 27, 2019

April 15, 2019

0.0875

489,716

April 26, 2019

April 26, 2019, May 29, 2019 and June 26, 2019

July 15, 2019

0.0875

514,645

July 29, 2019

July 29, 2019, August 28, 2019 and September 26, 2019

October 15, 2019

0.0875

564,698

Nine Months Ended September 30, 2020

January 29, 2020

January 29, 2020, February 26, 2020 and March 27, 2020

April 15, 2020

0.0875

589,261

April 28, 2020

July 15, 2020

0.0825

182,996

May 27, 2020

July 15, 2020

0.0792

177,251

June 25, 2020

June 26, 2020

July 15, 2020

0.0822

179,554

July 28, 2020

July 29, 2020

October 15, 2020

0.0810

177,250

August 26, 2020

August 27, 2020

October 15, 2020

0.0825

182,672

September 25, 2020

September 28, 2020

October 15, 2020

0.0846

182,807

The per share distribution amount was $0.7545 and $0.7875 for the nine months ended September 30, 2020 and September 30, 2019, respectively.

The above distributions were funded, in part, through the reimbursement of certain operating expenses by the Advisors under the ESAs. The ESAs are designed to ensure no portion of the Company's distribution to stockholders will be paid from Offering proceeds, and will provide for expense reduction payments to the Company in any quarterly period in which the Company's cumulative distributions to stockholders exceeds the Company's cumulative ICTI and net realized gains. The ESAs may be terminated by the Advisors, without payment of any penalty, with or without notice to the Company.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

Repurchases of Shares

The following table summarizes the common stock repurchases by the Company as of September 30, 2020:



	Number of Shares	Amount
November 6, 2018 through December 31, 2018	18,425	$	243,030
January 1, 2019 through April 5, 2019 ⁽¹⁾	7,407	98,296
April 6, 2019 through June 30, 2019	9,029	119,821
July 1, 2019 through September 30, 2019	7,407	97,111
October 1, 2019 through December 31, 2019	15,597	204,317
January 1, 2020 through April 3, 2020 ⁽²⁾	32,622	364,383
April 4, 2020 through June 30, 2020	53,665	654,713
July 1, 2020 through September 30, 2020	55,320	694,819

(1) The Company's February 11, 2019 tender offer that was originally scheduled to expire on March 27, 2019, was amended to extend the offer period to April 5, 2019.

(2) The Company's February 21, 2020 tender offer that was originally schedule to expire on March 27, 2020, was amended to extend the offer period to April 3, 2020.

All repurchased shares were retired upon acquisition.

Note 11. Subsequent Events Not Disclosed Elsewhere

As of September 30, 2020, the Company's subscription receivable in prepaid expenses and other assets of $48,500 was subsequently settled on October 5, 2020.

Subsequent to September 30, 2020, the Company sold an additional 11,060 common shares for additional net proceeds of $140,650.

On October 27, 2020, the Board declared a distribution of $0.0846 per common share, which represents a 7.2% distribution yield, payable on January 15, 2021, to stockholders of record on October 28, 2020.

On November 10, 2020, the Board approved a tender offer, commencing on November 30, 2020, to purchase 2.5% of the weighted average number of shares of the outstanding Common Stock for the trailing 12-month period ending September 30, 2020.

COVID-19

The Company evaluated events subsequent to September 30, 2020 through November 12, 2020. On March 11, 2020, the World Health Organization declared the novel coronavirus as a pandemic, and on March 13, 2020 the United States declared a national emergency with respect to the COVID-19 pandemic. The outbreak of the COVID-19 pandemic has severely impacted global economic activity and caused significant volatility and negative pressure in financial markets. The COVID-19 pandemic and the preventative measures taken to contain or mitigate its spread have caused, and are continuing to cause, business shutdowns, cancellations of events and travel, significant reductions in demand for certain goods and services, reductions in business activity and financial transactions, supply chain interruptions, and overall economic and financial market instability both globally and in the United States. Such effects will likely continue for the duration of the pandemic, which is uncertain, and for some period thereafter. The outbreak could have a continued adverse impact on economic and market conditions on a global scale. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of the COVID-19 pandemic. Nevertheless, the ongoing COVID-19 pandemic presents material uncertainty and risks with respect to the underlying value of the Company’s portfolio companies, the Company’s business, financial condition, results of operations and cash flows, such as the potential negative impact to financing arrangements, increased costs of operations, changes in law and/or regulation, and uncertainty regarding government and regulatory policy. Further, the operational and financial performance of the portfolio companies in which the Company makes investments have been, and may continue to be, significantly impacted by the COVID-19 pandemic, which in turn has, and may continue to have, an impact on the valuation of the Company’s investments.

Accordingly, the Company cannot predict the full extent to which its business, financial condition, results of operations and cash flows will be affected at this time. The potential impact to the Company’s results will depend to a large extent on future developments and new information that may emerge regarding the duration and severity of the COVID-19 pandemic and the

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements

actions taken by authorities and other entities to contain the coronavirus or treat its impact, all of which are beyond the Company’s control.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto contained elsewhere in this Quarterly Report on Form 10-Q. For additional overview information on the Company, see "Item 1. Business" in our Annual Report on Form 10-K for the year ended December 31, 2019.

Overview

Key performance metrics are presented below:



	September 30, 2020		December 31, 2019
Net asset value per common share	$	12.41	$	13.00



	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net investment income per common share	$	0.24	$	0.25	$	0.74	$	0.74
Net increase in net assets resulting from operations per common share	0.66		0.07		0.13		0.76
Distributions declared per common share	0.25		0.26		0.75		0.78

Our portfolio experienced net gains of $925,025, or $0.42 per share, during the three months ended September 30, 2020, principally due to the return of liquidity to the broadly syndicated loan market and tighter credit spreads in the underlying market. Net investment income per share remained consistent compared to the corresponding prior year quarter. Weighted average yield on debt and Structured Finance Notes for the three months ended September 30, 2020 declined to 8.96% from 10.99% in the quarter ending September 30, 2019, primarily due to the decrease in LIBOR and the placement of our loan to Online Tech Stores, LLC on non-accrual status. However, our weighted average interest costs decreased to 6.91% from 8.16% due to the issuance of the Unsecured Note and the decrease in Prime Rate.

Since OFS Advisor implemented its business continuity plan in mid-March 2020, the entire team has effectively transitioned to remote work and we are currently capable of maintaining our normal functionality to complete our operational requirements.

We are actively monitoring our portfolio companies throughout this period of economic uncertainty, including assessing our portfolio companies' operational and liquidity outlook. During the quarter, portfolio companies paid down credit commitments of $299,803. As of September 30, 2020, we had unfunded commitments of $473,910 to three portfolio companies. Also, all of our performing loans as of June 30, 2020 satisfied their third quarter 2020 interest payments. We believe new loan activity in the market in which we operate is below historical levels and we observed a decrease in origination and underwriting activity during the second and third quarters; however, the number of deals currently being reviewed and evaluated has increased to its highest level since the beginning of the COVID-19 pandemic. During the three months ended September 30, 2020, we purchased one Structured Finance Note for an aggregate cost of $797,812, and completed a $1,323,333 million follow-on investment in a portfolio company.

At September 30, 2020, our asset coverage ratio was 251% and we remained in compliance with all applicable financial covenant thresholds under our outstanding debt and our minimum asset coverage requirement under the 1940 Act. As of September 30, 2020, we had an unfunded commitment of $7.2 million under our PWB Credit Facility. Based on fair values and equity capital at September 30, 2020, we could access our entire commitment under the PWB Credit Facility and have an asset coverage ratio of 207%. We continue to believe that we have sufficient levels of liquidity to support our existing portfolio companies and selectively deploy capital in new investment opportunities in this challenging environment.

On October 27, 2020, our Board declared a distribution of $0.0846 per common share, payable on January 15, 2021, to stockholders of record on October 28, 2020.

We cannot predict the full impact of the COVID-19 pandemic, including its duration in the United States and worldwide, and the magnitude of the economic impact of the outbreak, including the impact of travel restrictions, business closures and other quarantine measures imposed on service providers and other individuals by various local, state, and federal governmental authorities, as well as non-U.S. governmental authorities. As such, we are unable to predict the duration of any business and supply-chain disruptions, the extent to which the COVID-19 pandemic will negatively affect our portfolio companies’ operating results or the impact that such disruptions may have on our results of operations and financial condition.

Depending on the duration and extent of the disruption to the operations of our portfolio companies, we expect that certain portfolio companies will experience financial distress and possibly default on their financial obligations to us and their other capital providers. Some of our portfolio companies have significantly curtailed business operations, furloughed or laid off employees and terminated service providers and deferred capital expenditures, which could impair their business on a permanent basis. These developments would likely result in a decrease in the value of our investment in any such portfolio company.

We are also subject to financial risks, including changes in market interest rates. As of September 30, 2020, approximately $43 million (principal amount) of our debt investments bore interest at variable rates, which are generally LIBOR-based, and many of which are subject to reference-rate floors. In connection with the COVID-19 pandemic, and primarily during the second quarter of 2020, the U.S. Federal Reserve and other central banks reduced certain interest rates and LIBOR decreased. A prolonged reduction in interest rates will reduce our gross investment income and could result in a decrease in our net investment income if such decreases in LIBOR are not offset by a corresponding increase in the spread over LIBOR that we earn on our portfolio investments, a decrease in our operating expenses, including with respect to our income incentive fee, or a decrease in the interest rate of our floating interest rate liabilities indexed to LIBOR. As of September 30, 2020, the majority of our variable rate debt investments are subject to the base rate floor, partially mitigating the impact of the recent decrease in LIBOR on our gross investment income.

We will continue to monitor the rapidly evolving situation relating to the COVID-19 pandemic and guidance from U.S. and international authorities, including federal, state and local public health authorities and may take additional actions based on their recommendations. In these circumstances, there may be developments outside our control requiring us to adjust our plan of operation. As such, given the dynamic nature of this situation, we cannot reasonably estimate the impact of the COVID-19 pandemic on our financial condition, results of operations or cash flows in the future. However, to the extent our portfolio companies continue to be adversely impacted by the COVID-19 pandemic, our future net investment income, financial condition, results of operations and the fair value of our portfolio investments may be materially adversely impacted.

Related Party Transactions

We have entered into a number of business relationships with affiliated or related parties, including the following:

•

The Investment Advisory Agreement with OFS Advisor to manage our operating and investment activities. Under the Investment Advisory Agreement we have agreed to pay OFS Advisor an annual base management fee based on the average value of our total assets (other than cash but including assets purchased with borrowed amounts and including assets owned by any consolidated entity) as well as an incentive fee based on our investment performance. See "Item 1. Financial Statements –– Notes to Financial Statements – Note 3."


•	The CIM Sub-Advisory Agreement with CIM Capital, an affiliate of OFS Advisor, to assist OFS Advisor with the management of our activities and operations. See "Item 1. Financial Statements –– Notes to Financial Statements – Note 2 and Note 3."


•	The Dealer Manager Agreement with CCO Capital, LLC, an affiliate of OFS Advisor and CIM Capital, to provide sales, promotional and marketing services to us in connection with the Offering. See "Item 1. Financial Statements –– Notes to Financial Statements – Note 3."


•	The Administration Agreement with OFS Services, an affiliate of OFS Advisor, to provide us with the office facilities and administrative services necessary to conduct our operations. See "Item 1. Financial Statements – Notes to Financial Statements – Note 3."

•

Expense Limitation Agreements: OFS Advisor, and effective August 3, 2020, CIM Capital, limit the Company's incurred expenses under two agreements: (1) the Investment Advisory Agreement, which contains provisions limiting organization and offering costs, and Contractual Issuer Expenses; and (2) an Expense Support Agreement, which limits all other operating expenses. Both agreements contain conditions under which we may become obligated to reimburse OFS Advisor or CIM Capital for expense limitations provided thereunder. See "Item 1. Financial Statements – Notes to Financial Statements – Note 2 and Note 3."

OFS Advisor’s services under the Investment Advisory Agreement are not exclusive to us and OFS Advisor is free to furnish similar services to other entities, including other BDCs affiliated with OFS Advisor, so long as its services to us are not impaired. OFS Advisor also serves as the investment adviser to CLO funds and other assets, including OFS Capital and OCCI. OFS Advisor provides sub-advisory services to CMFT Securities Investments, LLC, a wholly owned subsidiary of CIM Real Estate Finance Trust, Inc., a corporation that qualifies as a real estate investment trust. Additionally, OFS Advisor serves as sub-adviser to CIM Real Assets & Credit Fund, a newly organized externally managed registered investment company that operates as an interval fund that invests primarily in a combination of real estate, credit and related investments.

The 1940 Act generally prohibits BDCs from making certain negotiated co-investments with certain affiliates absent an order from the SEC permitting the BDC to do so. On August 4, 2020, we received exemptive relief from the SEC to permit us to co-invest in portfolio companies with certain other funds, including other BDCs and registered investment companies, managed by OFS Advisor (the “Affiliated Funds”) in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors, subject to compliance with certain conditions (the “Order”). The Order superseded a previous order we received on October 12, 2016 and provides us with greater flexibility to enter into co-investment transactions with Affiliated Funds. Pursuant to the Order, we are generally permitted to co-invest with Affiliated Funds if a “required majority” (as defined in Section 57(o) of the 1940 Act) of our independent directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transactions, including the consideration to be paid, are reasonable and fair to us and our stockholders and do not involve overreaching in respect of us or our stockholders on the part of any person concerned and (2) the transaction is consistent with the interests of our stockholders and is consistent with our investment objective and strategies.

In addition, pursuant to an exemptive order issued by the SEC on April 8, 2020 and applicable to all BDCs, through at least December 31, 2020, the Company may, subject to the satisfaction of certain conditions, co-invest in its existing portfolio companies with certain other funds managed by OFS Advisor or its affiliates, even if such other fund has not previously invested in such existing portfolio company. Without this order, the Company generally would not be able to participate in such co-investments unless the affiliated fund had previously acquired securities of the portfolio company in a co-investment transaction with the Company.

Conflicts may arise when an account managed by OFS Advisor makes an investment in conjunction with an investment being made by another account managed by OFS Advisor or an affiliate of OFS Advisor (each, an "Affiliated Account"), or in a transaction where an Affiliated Account has already made an investment. Investment opportunities are, from time to time, appropriate for more than one account in the same, different or overlapping securities of a portfolio company’s capital structure. Conflicts arise in determining the terms of investments, particularly where these accounts may invest in different types of securities in a single portfolio company. Potential conflicts arise when addressing, among other things, questions as to whether payment obligations and covenants should be enforced, modified or waived, or whether debt should be restructured, modified or refinanced. For additional information see "Item 1A. Business — Conflicts of Interest" and "Item 1A. Risk Factors — Risks Related to Our Business and Structure — We have potential conflicts of interest related to obligations that OFS Advisor or its affiliates may have to other clients" in our Annual Report on Form 10-K for the year ended December 31, 2019.

Critical Accounting Policies and Estimates

Our critical accounting policies and estimates are those relating to revenue recognition, expense limitation agreements and fair value estimates. Management has discussed the development and selection of each critical accounting policy and estimate with the Audit Committee of the Board. For descriptions of our revenue recognition and fair value policies, see "Item 8. Financial Statements – Notes to Financial Statements – Note 2" and "Management's Discussion and Analysis – Critical Accounting Policies and Significant Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2019.

Fair value estimates. Our approach to fair value estimates was significantly adjusted in response to the economic uncertainty associated with the spread of the COVID-19 pandemic. Our use of NBIP includes an assessment of whether a sufficient number of market quotations are available or whether a sufficient number of indicative prices from pricing services or brokers or dealers have been received, and whether the depth of the markets from which those quotes were received is sufficient to transact at those prices in amounts approximating our positions in such assets. Moreover, these assessments are generally based on a 90-day moving average of our depth and liquidity metrics. The 90-day moving average generally counters the effects of intermittent quoting activity observed at month- and quarter-ends, irregular quoting activity that tends to artificially inflate our market depth and liquidity metrics. We observed significant declines in market liquidity beginning in the middle of March 2020 and concluded the 90-day moving average was not representative of current market conditions given the significant market dislocation during this period. Accordingly, we adjusted our depth and liquidity assessment to one based on a 5-day moving average of the metrics in our liquidity assessments as of March 31, 2020, and partially reverted, utilizing a 60-day moving average, in our September 30, 2020, assessments, as liquidity continued to return to the loan market. One measure of liquidity in the broadly syndicated loan market is the average bid-ask spread on the Refinitiv Market Overall (North America) Loan Index which narrowed to 1.53 points at September 30, 2020, from 3.41 points at March 31, 2020, but has not yet returned to its long-term historic average of 1.0. These changes to our depth and liquidity metrics, as well as changes in the level of the metrics themselves, led to the transfer of two instruments with an aggregate amortized cost and fair value of $119,723 and $114,851, respectively, from a fair value estimate based on models and Level 3 inputs to estimates based on Level 2 NBIP inputs during the three months ended September 30, 2020.

We also adjusted our Level 3 fair value models throughout this period of heightened economic uncertainty. Our processes included assessments of the impact of the COVID-19 pandemic on the financial condition, results of operations or

cash flows of our portfolio companies. Initially, such forward-looking assessments were fragmentary; however, as such forward-looking estimates became more reliable, such information was directly incorporated into our fair value models. In circumstances in which reliable forward-looking information was unavailable, we considered the market impact on performance-metric multiples and related impact on enterprise values. Additionally, management observed a decrease in the historic correlation between market spreads used in our synthetic debt rating method and those used in our reunderwriting analysis. These market spreads, though highly correlated before the onset of the COVID-19 pandemic, relate to different segments of the lending market primarily on the basis of borrower size, the synthetic debt rating method based on market spreads for larger borrowers with rated debt, and the reunderwring analysis market spreads for what are considered middle-market borrowers. Given the break-down in this relationship, management concluded the relative weight given to each of these methods required adjustment to correspond to the market most closely associated with the subject investment. Accordingly, we decreased the weighting for the synthetic debt rating method and increased the weighting for the reunderwriting analysis in the current period year, from an equal rating at December 31, 2019 to generally a weighting of 10/90 at March 31, 2020, and partially reverting to a weighting of 25/75 at June 30, 2020. We believe the overweighting to the reunderwriting analysis during this period more accurately captured the market in which these instruments are exchanged. As of September 30, 2020, we have fully reverted to an equal weighting of these models as we have observed a return, in all significant respects, of the historical correlative relationship between these markets.

The following table illustrates the impact of our fair value measures if we selected the low or high end of the range of values for all investments at September 30, 2020:



	Fair Value at September 30, 2020		Range of Fair Value
Investment Type	Fair Value at September 30, 2020		Low-end		High-end
Debt investments:
Senior secured	$	41,251,500	$	40,746,213	$	41,740,152
Subordinated	724,966		617,534		826,042

Structured Finance Notes:
Mezzanine debt	1,606,063		1,564,026		1,648,100

Equity investments:
Preferred equity	287,000		251,000		323,000
Common equity	581,950		483,673		674,180
	$	44,451,479	$	43,662,446	$	45,211,474

Portfolio Composition and Investment Activity

Portfolio Composition

The following table summarizes the composition of our Portfolio Company Investments as of September 30, 2020 and December 31, 2019:



	September 30, 2020				December 31, 2019
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Senior secured debt investments ⁽¹⁾	$	42,092,335	$	41,251,500	$	38,648,951	$	37,953,346
Subordinated debt investments	1,482,327		724,966		1,478,811		1,384,896
Preferred equity investments	191,409		287,000		191,409		201,006
Common equity investments	497,130		581,950		450,958		585,675
	$	44,263,201	$	42,845,416	$	40,770,129	$	40,124,923
Total number of portfolio companies	34		34		34		34

(1)

Includes debt investments, typically referred to as unitranche, in which we have entered into a contractual arrangement with co‑lenders whereby, subject to certain conditions, we have agreed to receive our principal payments after the repayment of certain co‑lenders pursuant to a payment waterfall. At September 30, 2020, the aggregate amortized cost and fair value of these investments was $9,663,986 and $9,759,084, respectively.

As of September 30, 2020, all of our senior secured debt investments were floating rate loans and our subordinated debt investments were fixed rate loans. Approximately 96% of our Portfolio Company Investments at fair value, are senior securities of the borrower, rather than in the subordinated securities, preferred equity or common equity. We believe the seniority of our debt investments in the borrowers' capital structures may provide greater downside protection against the impact of the COVID-19 pandemic.

As of September 30, 2020, the three largest industries of our Portfolio Company Investments by fair value, were (1) Wholesale Trade of 18.4%, (2) Professional, Scientific, and Technical Services of 17.5%, and (3) Health Care and Social Assistance of 16.1%, totaling approximately 52.0% of the investment portfolio. We have limited exposure to the Retail Trade industry, approximately 5.1%, which has been significantly impacted by the COVID-19 pandemic. For a full summary of our investment portfolio by industry, see "Item 1–Financial Statements–Note 4."

The following table presents our debt investment portfolio by investment size as of September 30, 2020 and December 31, 2019:



	Amortized Cost								Fair Value
	September 30, 2020				December 31, 2019				September 30, 2020				December 31, 2019
Up to $1,000,000	$	5,820,361	13.4	%	$	7,737,315	19.3	%	$	5,024,762	12.0	%	$	7,171,472	18.2	%
$1,000,000 to $1,500,000	13,680,567		31.4		13,360,333		33.3		13,147,047		31.3		13,198,830		33.6
$1,500,000 to $2,000,000	8,860,937		20.3		14,051,452		35.0		12,786,910		30.5		14,026,055		35.6
Greater than $2,000,000	15,212,797		34.9		4,978,662		12.4		11,017,747		26.2		4,941,885		12.6
Total	$	43,574,662	100.0	%	$	40,127,762	100.0	%	$	41,976,466	100.0	%	$	39,338,242	100.0	%

The weighted average yield on total investments⁽¹⁾was 8.55% and 9.93% at September 30, 2020 and December 31, 2019, respectively. The following table displays the composition of our performing debt investments and Structured Finance Note portfolio by yield range and its weighted average yields as of September 30, 2020 and December 31, 2019:



	September 30, 2020								December 31, 2019
	Senior Secured		Subordinated		Structured Finance				Senior Secured		Subordinated
Yield Range	Debt		Debt		Notes		Total		Debt		Debt		Total
Less than 8%	6.3	%	—	%	49.0	%	7.8	%	1.7	%	—	%	1.7	%
8% - 10%	71.3		—		51.0		69.8		45.9		—		44.2
10% - 12%	20.1		—		—		19.1		47.1		—		45.3
12% - 14%	2.3		100.0		—		3.3		5.3		100.0		8.8
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Weighted average yield - performing debt and Structured Finance Note investments ⁽²⁾	9.16	%	13.54	%	8.14	%	9.17	%	10.15	%	12.57	%	10.24	%
Weighted average yield - total debt and Structured Finance Note investments ⁽³⁾	9.16	%	4.34	%	8.14	%	8.96	%	10.00	%	12.57	%	10.09	%

(1) Weighted average yield on total investments is computed as (a) the sum of (i) the annual stated accruing interest on our debt investments at the balance sheet date, plus the annualized accretion of Net Loan Fees, plus the effective yield on our performing preferred equity investments, (ii) plus the annual effective yield on Structured Finance Notes, divided by (b) amortized cost of our total investment portfolio, including assets in non-accrual status as of the balance sheet date.

(2) The weighted average yield on our performing debt and Structured Finance Note investments is computed as (a) the sum of (i) the annual stated accruing interest on debt investments plus the annualized accretion of Net Loan Fees; and (ii) the annual effective yield on Structured Finance Notes divided by (b) amortized cost of our debt and Structured Finance Note investments, excluding debt investments in non-accrual status as of the balance sheet date.

(3) The weighted average yield on our total debt and Structured Finance Note investments is computed as (a) the sum of (i) the annual stated accruing interest plus the annualized accretion of Net Loan Fees and (ii) plus the annual effective yield on Structured Finance Notes divided by (b) amortized cost of our debt and Structured Finance Note investments, including debt investments in non-accrual status as of the balance sheet date.

The weighted average yield on senior secured debt investments decreased approximately 99 basis point during the nine months ended September 30, 2020, primarily as a result of an effective yield of 8.4% on new investments in new portfolio companies and a decrease in LIBOR. During the nine months ended September 30, 2020, the weighted average yield on our total subordinated debt decreased 8.23% due to the change in status of Online Tech Stores, LLC to non-accrual.

The weighted average yield of our investments is not the same as a return on investment for our stockholders but rather the gross investment income from our investment portfolio before the payment of all of our fees and expenses. There can be no assurance that the weighted average yield will remain at its current level.

Investment Activity

The following is a summary of our investment activity for the three and nine months ended September 30, 2020:



	Three Months Ended September 30, 2020				Nine Months Ended September 30, 2020
	Debt Investments		Equity Investments		Debt Investments		Equity Investments
Investments in new portfolio companies	$	—	$	—	$	6,278,807	$	—
Investments in existing portfolio companies:
Follow-on investments	1,323,333		—		3,983,300		—
Restructured investments	—		—		10,147		46,403
Delayed draw / revolver funding	—		—		424,543		—
Total investments in existing portfolio companies	1,323,333		—		4,417,990		46,403
Total investments in new and existing portfolio companies	$	1,323,333	$	—	$	10,696,797	$	46,403
Number of new portfolio company investments	—		—		4		—
Number of existing portfolio company investments	1		—		15		1
Proceeds from principal payments	$	347,218	—		$	4,200,695	—
Proceeds from investments sold or redeemed	—		—		2,517,293		—
Total proceeds from principal payments, equity distributions and investments sold	$	347,218	$	—	$	6,717,988	$	—

Notable investments in new portfolio companies during the nine months ended September 30, 2020, include A&A Transfer, LLC. ($2.0 million senior secured loan), Milrose Consultants, LLC ($1.3 million senior secured loan) and SourceHOV Tax, Inc. ($2.3 million senior secured loan).

We also invested $1,549,812 in Structured Finance Notes with a weighted average annual effective yield of 8.14% during the nine months ended September 30, 2020.

Non-cash investment activity

On March 27, 2020, our debt investments in Constellis Holdings, LLC were restructured. We converted our non-accrual debt investments into two new debt investments and 1,362 shares of common equity. The cost and fair value of debt investments received were $6,174 and $6,172, respectively, and the cost and fair value of the shares of common equity received were $46,403 and $46,410, respectively. For the nine months ended September 30, 2020, we recognized a realized loss on the restructuring of $526,444, which was fully recognized as an unrealized loss as of December 31, 2019.

The following is a summary of our investment activity for nine months ended September 30, 2019:



	Three Months Ended September 30, 2019				Nine Months Ended September 30, 2019
	Debt Investments		Equity Investments		Debt Investments		Equity Investments
Investments in new portfolio companies	$	1,985,000	$	—	$	5,245,045	$	357,878
Investments in existing portfolio companies:
Follow-on investments	328,333		—		1,927,044		—
Delayed draw / revolver funding	12,500		—		621,452		—
Total investments in existing portfolio companies	340,833		—		2,548,496		—
Total investments in new and existing portfolio companies	$	2,325,833	$	—	$	7,793,541	$	357,878
Number of new portfolio company investments	1		—		4		2
Number of existing portfolio company investments	2		—		12		—
Proceeds from principal payments	$	953,404	$	—	$	2,441,591	$	—
Proceeds from investments sold or redeemed	—		—		1,539,696		—
Total proceeds from principal payments, equity distributions and investments sold	$	953,404	$	—	$	3,981,287	$	—

Notable investments in new portfolio companies during the nine months ended September 30, 2019, included Chemical Resources Holdings, Inc. ($1.2 million senior secured loan and $0.2 million common equity), TTG Healthcare, LLC ($1.0 million senior secured loan and $0.2 million preferred stock), Institutional Shareholder Services, Inc. ($1.0 million senior secured loan) and Milrose Consultants, LLC ($2.0 million senior secured loan).

The weighted-average yield of debt investments in new portfolio companies during the nine months ended September 30, 2019 was 10.4%.

Our level of investment activity may vary substantially from period to period depending on various factors, including, but not limited to, the amount of debt and equity capital available to middle market companies, the level of merger and acquisition activity and the general economic and competitive environment in which we make investments. We believe new loan activity in the market in which we operate is below historical levels and we observed a decrease in origination and underwriting activity during the second and third quarters; however, the number of deals currently being reviewed and evaluated has increased to its highest level since the beginning of the COVID-19 pandemic. During the three months ended September 30, 2020, we purchased one Structured Finance Note for an aggregate cost of $797,812 and completed a $1,323,333 million follow-on investment in a portfolio company.

We categorize debt investments into seven risk categories based on relevant information about the ability of borrowers to service their debt. For additional information regarding our risk categories, see “Item 1. Business–Portfolio Review/Risk Monitoring” in our Annual Report on Form 10-K for the year ended December 31, 2019. The following table shows the classification of our debt securities of portfolio companies, by credit risk rating as of September 30, 2020 and December 31, 2019.



	Debt Investments, at Fair Value
Risk Category	September 30, 2020				December 31, 2019
1 (Low Risk)	$	—	—	%	$	—	—	%
2 (Below Average Risk)	—		—		1,036,579		2.6
3 (Average)	39,672,667		94.5		37,359,182		95.0
4 (Special Mention)	1,860,457		4.4		909,902		2.3
5 (Substandard)	443,341		1.1		10,079		—
6 (Doubtful)	—		—		22,500		0.1
7 (Loss)	—		—		—		—
	$	41,976,465	100.0	%	$	39,338,242	100.0	%

Changes in the distribution of our debt investments across risk categories during the nine months ended September 30, 2020 were a result of new debt investments, the receipt of amortization payments on existing debt investments, repayment of certain debt investments in full, changes in the fair value of our existing debt investments and realized gains on the sale of investments. Risk rating changes included debt investments from risk category 3 to risk category 4, with a total amortized cost and fair value of $2,385,013 and $1,854,214, respectively, as well as the risk rating change in a debt investment from risk category 4 to risk category 5, with an amortized cost and fair value of $1,007,141 and $443,341, respectively.

Non-Accrual Loans

When there is reasonable doubt that principal, cash interest, or PIK interest will be collected, loan investments are placed on non-accrual status and the Company will generally cease recognizing cash interest, PIK interest, or Net Loan Fee amortization, as applicable. Interest accruals and Net Loan Fee amortization are resumed on non-accrual investments only when they are brought current with respect to principal, interest and when, in the judgment of management, the investments are estimated to be fully collectible as to all principal. During the nine months ended September 30, 2020, our debt investment in Online Tech Stores, LLC, with an amortized cost of $1,007,141, was placed on non-accrual status, while our debt investment in Constellis Holdings, LLC was restructured and removed from non-accrual status. At September 30, 2020, the aggregate amortized cost and fair value of loans on non-accrual status with respect to all interest and Net Loan Fee amortization was $1,007,141 and $443,341, respectively, and $577,810 and $32,579 at December 31, 2019, respectively.

Results of Operations

Our key financial measures are described in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations–Results of Operations–Key Financial Measures" in our Annual Report on Form 10-K for the year ended December 31, 2019. The following is a discussion of the key financial measures that management uses in reviewing the performance of our operations.

We do not believe that our historical operating performance is necessarily indicative of our future results of operations. We are primarily focused on debt investments in middle-market and larger companies in the United States and, to a lesser extent, equity investments, including warrants and other minority equity securities. Moreover, as a BDC and a RIC, we will also be subject to certain constraints on our operations, including, but not limited to, limitations imposed by the 1940 Act and the Code. For the reasons described above, the results of operations described below may not necessarily be indicative of the results we expect to report in future periods.

Net increase in net assets resulting from operations can vary substantially from period to period for various reasons, including the recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, annual comparisons of net increase in net assets resulting from operations may not be meaningful.

Comparison of the Three and Nine Months Ended September 30, 2020, and 2019

Operating results for the three and nine months ended September 30, 2020 and 2019, are as follows:

Investment Income



	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Interest income	$	1,027,919	$	905,172	$	3,166,684	$	2,564,538
Fee income	12,610		32,643		91,612		80,948
Total investment income	$	1,040,529	$	937,815	$	3,258,296	$	2,645,486

Investment income for the three and nine months ended September 30, 2020 consisted primarily of interest income on our debt investments and syndication fee income. The increase in interest income for three and nine months ended September 30, 2020 compared to the corresponding periods in the prior year was primarily due to the growth in our portfolio from the deployment of funds raised through our Offering and the deployment of funds from the Unsecured Note into portfolio securities. Fee income for the three months ended September 30, 2020, compared to the corresponding prior year period, decreased due to a reduction in syndication fees. Fee income for the nine months ended September 30, 2020, compared to the corresponding prior year period, increased due to an additional prepayment fees.

Due to the COVID-19 pandemic and the impact to our borrowers, we have experienced, and expect to continue to experience, a partial shift from cash interest to PIK interest as a result of concessions granted to borrowers to support the borrowers' liquidity. During the three months ended September 30, 2020, we amended a loan to increase the PIK rate, and amended one loan to convert third quarter cash interest into PIK interest; however, this interest was not recognized in income in the third quarter due to reasonable doubt as to whether it would be collected. We believe new loan activity in the market in which we operate is below historical levels and we observed a decrease in origination and underwriting activity during the second and third quarters; however, the number of deals currently being reviewed and evaluated has increased to its highest level since the beginning of the COVID-19 pandemic. During the three months ended September 30, 2020, we purchased one Structured Finance Note for an aggregate cost of $797,812 and completed a $1,323,333 million follow-on investment in a portfolio company.

Gross Expenses. Our gross expenses are limited under the Advisory Agreements and the ESAs; see "—Expense Limitations." Investment expenses shown with respect to each governing expense limitation agreement for the three and nine months ended September 30, 2020 and 2019, are presented below:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Expenses subject to limitation under the Advisory Agreements:
Amortization of deferred offering costs	$	77,114	$	51,510	$	245,680	$	115,309
Contractual issuer expenses	4,712		513		5,248		6,709
Total expenses subject to limitation under the Advisory Agreements	81,826		52,023		250,928		122,018
Expenses subject to limitation under the ESAs:
Interest expense	302,774		88,033		935,800		287,052
Management fees	135,497		100,333		400,894		291,374
Incentive fees	72,366		48,938		213,843		127,004
Administration fee	242,737		175,533		644,478		502,571
Professional fees	126,553		134,599		415,621		408,131
Insurance expense	24,495		20,606		73,204		55,502
Transfer agent fees	20,961		26,348		67,769		80,469
Other expenses	28,262		10,462		50,621		67,507
Total expenses subject to limitation under the ESAs	953,645		604,852		2,802,230		1,819,610
Total expenses	$	1,035,471	$	656,875	$	3,053,158	$	1,941,628

Expenses Limited under the Advisory Agreements

Offering Expenses. The Advisors incurred, on our behalf, offering costs of $44,512 and $84,556 during the three months ended September 30, 2020 and 2019, respectively, which are deferred and amortized over the twelve months following incurrence. Offering costs for the three and nine months ended September 30, 2020 and 2019, relate to ordinary due diligence and development of distribution platforms for our common stock.

Pursuant to the terms of the CIM Sub-Advisory Agreement, beginning August 3, 2020, CIM Capital assumed responsibility for bearing costs relating to the Offering.

Amortization of offering costs were $77,114 and $245,680 for the three and nine months ended September 30, 2020, respectively, compared to $51,510 and $115,309 for the three and nine months ended September 30, 2019, respectively. Higher amortization expense in the three and nine months ended September 30, 2020 relate to additional monthly costs of developing distribution platforms of the Offering.

Contractual Issuer Expenses. Contractual Issuer Expenses remained stable in the three and nine months ended September 30, 2020, compared to the corresponding prior year periods as the marketing of the fund by the Advisors’ employees and employees of their affiliates remained consistent.

Pursuant to the terms of the CIM Sub-Advisory Agreement, beginning August 3, 2020, CIM Capital assumed responsibility for bearing Contractual Issuer Expenses.

Expenses Limited under the ESAs

Interest expense increased due to the average dollar amount of borrowings outstanding of $16,684,239 and $17,513,686 during the three and nine months ended September 30, 2020, respectively, primarily due to the issuance of the Unsecured Note.

Management and incentive fees increased for the three and nine months ended September 30, 2020, compared to the corresponding prior year periods as a result of growth in our portfolio and investment activity from the deployment of Offering proceeds and the Unsecured Note. Administrative fees are primarily related to accounting and record-keeping services, and preparation and filing of required periodic reports with the SEC. Administrative fees for the three and nine months ended September 30, 2020, compared to the corresponding prior year periods rose due to an increase in our allocable portion of OFS Services's personnel and software costs.

Professional fees include fees for our attorneys, independent accountants and consultants. Professional fees remained stable compared to the corresponding periods.

General and administrative expenses, including insurance, transfer agent and other expenses were $73,718 and $191,594 for the three and nine months ended September 30, 2020, respectively, compared to $57,416 and $203,478 for the

three and nine months ended September 30, 2019, respectively. For the nine months ended September 30, 2020, the decrease in general and administrative expenses was primarily due to a decrease in taxes.

Expense Limitations

Expense Limitations under the Advisory Agreements. We reimbursed the Advisors $6,375 and $13,560 for offering expenses and Contractual Issuer Expenses for the three and nine months ended September 30, 2020, respectively, compared to $28,560 and $89,578 for the three and nine months ended September 30, 2019, respectively. This amount consisted of Contractual Issuer Expenses and offering expenses incurred in prior periods by the Advisors on our behalf.

We are conditionally obligated to pay the Advisors up to 1.5% of the gross proceeds raised in the Offering until all reimbursable offering costs and Contractual Issuer Expenses paid by the Advisors have been recovered. Reimbursable offering costs and Contractual Issuer Expenses were $748,239 as of September 30, 2020.

CIM Capital will be entitled to receive reimbursement from us for offering costs and Contractual Issuer Expenses paid on our behalf, after August 3, 2020 up to 1.5% of the aggregate gross proceeds of the Offering, after offering costs and Contractual Issuer Expenses incurred prior to August 3, 2020 have expired or have been reimbursed. Offering expenses and Contractual Issuer Expenses incurred by CIM Capital or its affiliates will be eligible for reimbursement for three years from the date incurred. Any such reimbursement by us will be allocated first to reimburse any reimbursable expenses incurred by OFS Advisor or its affiliates that are eligible for reimbursement pursuant to the Advisory Agreements.

The determination of expense limitations under the Advisory Agreements are presented below.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Total expenses limited under the Advisory Agreements	$	81,826		$	52,023		$	250,928		$	122,018
Offering costs and Contractual Issuer Expenses reimbursed and incurred	(6,375		)	(28,560		)	(13,559		)	(89,578		)
Net offering costs and Contractual Issuer Expenses limitations under the Advisory Agreements	$	75,451		$	23,463		$	237,369		$	32,440

Expense Limitations under the ESAs. Gross operating expenses (operating expenses exclusive of organization and offering expenses, and Contractual Issuer Expenses, and before limitations) are subject to limitation under the ESAs. The Advisors' obligation to provide such expense support is a function of declared distributions on our common stock, and the amount of support provided is determined by reference to investment company taxable income (expense) and net realized gains (losses) prior to expense limitation, and the amount of declared distributions; the ESAs provide expense support such that distributions are not paid from Offering proceeds. The determination of expense limitation under the ESAs for the three and nine months ended September 30, 2020 and 2019, are presented below.



	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Total investment income	$	1,040,529	$	937,815	$	3,258,296	$	2,645,486
Expenses limited under the ESAs ⁽¹⁾:
Interest expense, base management fees, and incentive fees	510,637		237,304		1,550,537		705,430
Other operating expenses as defined in the ESAs ⁽²⁾	439,643		367,548		1,248,326		1,114,180
Total expenses limited under the ESAs	950,280		604,852		2,798,863		1,819,610
Net investment income prior to expense limitation	90,249		332,963		459,433		825,876
Net realized gain (loss) in ICTI	—		—		—		52
ICTI prior to expense limitation	90,249		332,963		459,433		825,928
Declared distributions	542,729		564,700		1,671,791		1,569,059
Expense limitation under ESAs	$	452,480	$	231,737	$	1,212,358	$	743,131


(1)	Expense limitation under the ESAs exclude organization costs, amortization of deferred offering costs, Contractual Issuer Expenses, and the related expense support under the Advisory Agreements as such items are permanent differences between GAAP and taxable income. See “Item 8. Financial Statements–Notes to Financial Statements–Note 8” in our Annual Report on Form 10-K.

(2)

Generally defined in the ESAs as our operating expenses determined in accordance with GAAP excluding organization and offering expenses, Contractual Issuer Expenses, interest expenses, and base management fees, and incentive fees. Other operating expenses exclude operating expenses of HPCI-MB. The annualized ratio of other operating expenses to net assets at the time of support and annual ratio for the year in which support is provided constitute conditions for reimbursement to the Advisors. See "Item 1. Financial Statements–Notes to Financial Statements–Note 2 and Note 3."

Expense support provided by the Advisors is reimbursable for three years from the date incurred. Expense limitation under both the Advisory Agreements and the ESAs are cancelable at any time.

Net realized and unrealized gain (loss) on investments

Three and nine months ended September 30, 2020

We recognized net unrealized appreciation of $887,942 on our debt and Structured Finance Note investments in the third quarter, primarily due to the return of liquidity to the broadly syndicated loan market and tighter credit spreads in underlying market. One measure of liquidity in the broadly syndicated loan market is the average bid-ask spread on the Refinitiv Market Overall (North America) Loan Index which narrowed to 1.53 points at September 30, 2020 from 3.41 points at March 31, 2020, but has not yet returned to its long-term historic average of 1.0. Additionally, we recognized a realized gain of $4,898 on the sale of a broadly syndicated loan.

We recognized net unrealized appreciation of $32,185 on our equity investments during the three months ended September 30, 2020, primarily due to our common equity investments in Chemical Resources Holdings, Inc. and DRS Imaging Services, LLC.

Our portfolio experienced net unrealized losses of $774,400 during the nine months ended September 30, 2020, primarily due to the adverse economic effects of the COVID-19 pandemic on market conditions and the overall economy, and the related declines in quoted loan prices that have not yet fully recovered, as well as unrealized depreciation of $196,885 and $257,377 related to our debt investments in Eblens Holdings, Inc. and Wastebuilt Environmental Solutions, LLC, respectively.

Three and nine months ended September 30, 2019

We recognized net unrealized depreciation of $356,121 and $149,978 on senior secured investments for the three and nine months ended September 30, 2019, respectively, primarily as a result of negative company-specific performance factors in Constellis Holding, LLC and Online Tech Stores, LLC.

We recognized net unrealized appreciation of $221,369 on common and preferred stock for the nine months ended September 30, 2019, primarily due to the positive impact of portfolio company-specific performance factors in DRS Imaging Services, LLC and Professional Pipe Holdings, LLC.

Liquidity and Capital Resources

At September 30, 2020, we held cash of $1,166,759 and had $7.2 million of unfunded commitments under our $10 million PWB Credit Facility that is available subject to a borrowing base and other covenants. Based on fair values and equity capital at September 30, 2020, we could access our entire PWB Credit Facility and have an asset coverage ratio of 208%. We continue to believe that we have sufficient levels of liquidity to support our existing portfolio companies and selectively deploy capital in new investment opportunities in this challenging environment.

Sources and Uses of Cash

We expect to generate cash primarily from (i) the net proceeds of the Offering, (ii) cash flows from our operations, including net amounts received from the Advisors, (iii) the PWB Credit Facility and any other financing arrangements we may enter into in the future and (iv) any future offerings of our equity or debt securities. We may fund a portion of our investments through borrowings from banks, including the PWB Credit Facility, and issuances of senior securities. Our primary use of cash will be for (i) investments in portfolio companies and other investments to comply with certain portfolio diversification requirements, (ii) the cost of operations (including paying the Advisors), (iii) debt service of any borrowings, including the Unsecured Note and (iv) cash distributions to the holders of our stock. These principal sources and uses of cash and liquidity are presented below:



	Nine Months Ended September 30,
	2020			2019
Cash from net investment income	$	1,626,179		$	1,591,019
Net purchases and originations of portfolio investments	(10,021,169		)	(4,891,418		)
Net cash used in operating activities	(8,394,990		)	(3,300,399		)
Net proceeds from issuances of common stock	779,242			5,704,891
Repurchase of common stock	(1,019,097		)	(315,229		)
Net borrowings (repayments) under revolving line of credit	2,750,000			(850,000		)
Common stock distributions paid	(1,712,974		)	(1,451,605		)
Payment of debt issuance costs	(50,000		)	(50,780		)
Net change in cash	$	(7,647,819	)	$	(263,122	)

We used $8,394,990 and $3,300,399 in cash from operating activities for the nine months ended September 30, 2020 and 2019, respectively. As of September 30, 2020, the principal source of operating liquidity was investment income collected. The increase in total investment income collected is due to the growth in our portfolio from the deployment of Offering proceeds and the deployment of funds from the Unsecured Note into portfolio securities. Net cash used in operating activities decreased $5,094,591 over the corresponding period primarily due to an increase in net investment purchases of $5,129,751. Net cash used in operating activities benefited from the positive cash flow impact of expense limitations under the Advisory Agreements and ESAs of $1,449,727 and $775,571 for the nine months ended September 30, 2020 and 2019, respectively, which reduced the net amount paid to the Advisors. Expense support and limitation under both the Advisory Agreements and the ESAs are cancelable at any time.

All of our performing loans as of June 30, 2020 satisfied their third quarter 2020 interest payments.

Net purchases and origination of portfolio investments relates to the deployment of Offering proceeds. See "—Portfolio Composition and Investment Activity."

We collected $779,242 and $5,704,891 from the sale of our common stock during the nine months ended September 30, 2020 and 2019, respectively. Offering proceeds are net of aggregate commissions and dealer manager fees of $74,750 and $390,780 for the nine months ended September 30, 2020 and 2019, respectively, of which $0 and $122,036, respectively, were paid by OFS Advisor.

During the nine months ended September 30, 2020, we paid $1,712,974 in dividends to common stockholders and, subsequent to September 30, 2020, we paid $542,729 in dividends to our common stockholders.

Borrowings

PWB Credit Facility: The PWB Credit Facility is available for general corporate purposes including investment funding and is scheduled to mature on February 28, 2021. The maximum availability of the PWB Credit Facility is equal to

35% of the aggregate outstanding principal amount of eligible loans included in the borrowing base, which excludes subordinated loan investments and as otherwise specified in the BLA. The PWB Credit Facility bears interest at a variable rate of the Prime Rate plus a 0.75% margin, with a 5.50% floor, and includes an unused commitment fee equal to 0.50% per annum for any unused portion in excess of $3.0 million, payable monthly in arrears. As of September 30, 2020, the stated interest rate on the PWB Credit Facility was 5.50%. The PWB Credit Facility bore an effective interest rate of 6.20%, inclusive of interest on the outstanding balance, commitment fees on undrawn amounts, and the amortization of deferred financing costs.

Our PWB Credit Facility is a $10.0 million revolving line of credit, of which $2.8 million was drawn as of September 30, 2020. As of September 30, 2020, the unfunded commitment under the PWB Credit Facility was $7.2 million, that is available, subject to a borrowing base and other covenants. As of September 30, 2020, we were in compliance with the applicable covenants under the PWB Credit Facility.

Unsecured Note: On November 27, 2019, we entered into an agreement with a qualified institutional investor ("Note Purchase Agreement") pursuant to which we issued the Unsecured Note. The purchase price of the Unsecured Note was $14,700,000 after deducting the offering price discount. The Unsecured Note has a fixed interest rate of 6.50% and is due on November 27, 2024, unless redeemed, purchased or prepaid prior to such date by us or its affiliates in accordance with its terms. Interest on the Unsecured Note is due quarterly. In addition,we are obligated to repay the Unsecured Note at par if certain change in control events occur. The Unsecured Note is a general unsecured obligation that ranks pari passu with all outstanding and future unsecured unsubordinated indebtedness we may issue.

The Note Purchase Agreement contains customary terms and conditions for unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of our status as a business development company within the meaning of the 1940 Act, and minimum asset coverage ratio. The Note Purchase Agreement also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, certain judgments and orders, and certain events of bankruptcy. As of September 30, 2020, we were in compliance with the applicable covenants under the Note Purchase Agreement.

As of September 30, 2020, the Unsecured Note had the following terms and balances:



	Principal		Unamortized Discount and Issuance Costs		Stated Interest Rate		Effective Interest Rate ⁽¹⁾		Maturity	2020 Interest Expense ⁽²⁾
Unsecured Note	$	15,000,000	$	304,199	6.50	%	6.99	%	11/27/24	$	780,503

(1) The effective interest rate on the Unsecured Note includes deferred debt issuance cost amortization.

(2) Interest expense includes debt issuance costs amortization of $49,253 for the nine months ended September 30, 2020.

Other Liquidity Matters

We expect to fund the growth of our investment portfolio through the private placement of our common shares and issuances of senior securities or future borrowings to the extent permitted by the 1940 Act. We cannot assure stockholders that our plans to raise capital will be successful. In addition, we intend to distribute to our stockholders substantially all of our taxable income in order to satisfy the requirements applicable to RICs under Subchapter M of the Code. Consequently, we may not have the ability to fund new investments or make additional investments in our portfolio companies. The illiquidity of our portfolio investments may make it difficult for us to sell these investments when desired and, if we are required to sell these investments, we may realize significantly less than their recorded value.

In addition, as a BDC, we generally will be required to meet a coverage ratio of total assets, less liabilities and indebtedness not represented by senior securities, to total senior securities, which include all of any borrowings or outstanding preferred stock of at least 200% (or 150% if certain requirements are met). This requirement limits the amount that we may borrow. To fund growth in our investment portfolio in the future, we anticipate needing to raise additional capital from various sources, including the equity markets and the securitization or other debt-related markets, which may or may not be available on favorable terms, if at all.

On November 6, 2018, a “required majority” (as defined in Section 57(o) of the 1940 Act) our Board approved the application of a reduced 150% asset coverage ratio to us. In accordance with the SBCAA, we extended to each of our stockholders as of November 6, 2018, an offer to repurchase the equity securities held by such stockholders with 25% of such equity securities to be repurchased in each of the four quarters following November 6, 2018. As a result, the asset coverage ratio test applicable to us decreased from 200% to 150%, effective November 6, 2019.

As of September 30, 2020, the aggregate amount of senior securities outstanding was $17.8 million, for which our asset coverage was 251%. The asset coverage ratio for a class of senior securities representing indebtedness is calculated as our

consolidated total assets, less all liabilities and indebtedness not represented by senior securities, divided by total senior securities representing indebtedness.

Contractual Obligations

We, with approval of our Board, entered into the Investment Advisory Agreement, the ESAs, the CIM Sub-Advisory Agreement, and the Administration Agreement. See "Item 1. Financial Statements – Notes to Financial Statements – Note 3."

The following table shows our contractual obligations as of September 30, 2020 (in thousands):



	Payments due by period
Contractual Obligation	Total		Less than year		1-3 years		3-5 years		After 5 years
PWB Credit Facility ⁽¹⁾	$	2,750,000	$	2,750,000	$	—	$	—	$	—
Unsecured Note⁽²⁾	15,000,000		—		—		15,000,000		—
Total	$	17,750,000	$	2,750,000	$	—	$	15,000,000	$	—

(1) The PWB Credit Facility is scheduled to mature on February 28, 2021.

(2) The Unsecured Note is scheduled to mature on November 27, 2024.

We continue to believe our long-dated financing, with approximately 85% of our total debt contractually maturing in

2024, affords us operational flexibility.

Off-Balance Sheet Arrangements

Amounts Conditionally Reimbursable to OFS Advisor.

The Advisors have incurred organizational and offering costs and Contractual Issuer Expenses, of which $748,239 and $663,534 were unreimbursed as of September 30, 2020 and December 31, 2019, respectively. We remain conditionally liable for organization and offering costs incurred by the Advisors on our behalf. See "Item 1. Financial Statements – Notes to FInancial Statements – Note 3."

Pursuant to the terms of the CIM Sub-Advisory Agreement, beginning August 3, 2020, CIM Capital assumed responsibility for bearing costs relating to the Offering.

The Advisors have provided aggregate operating expense support of $3,810,941 and $3,503,848 as of September 30, 2020 and December 31, 2019, respectively. We remain conditionally liable for operating expense support provided by the Advisors. See "Item 1. Financial Statements – Notes to Financial Statements – Note 2 and Note 3."

On August 3, 2020, the Expense Support Agreement was amended to, among other things, require CIM Capital to pay future expense support payments on behalf of us.

Unfunded Commitments.

We may become a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. These instruments may include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the balance sheet. We had $473,910 of total unfunded commitments to three portfolio companies at September 30, 2020. See "Item 1. Financial Statements – Notes to Financial Statements – Note 6."

Distributions

We have elected to be taxed as a RIC under Subchapter M of the Code. In order to maintain our status as a RIC, we are required to distribute annually to our stockholders at least 90% of our ICTI, as defined by the Code. Additionally, to avoid a 4% excise tax on undistributed earnings we are required to distribute each calendar year the sum of (i) 98% of our ordinary income for such calendar year (ii) 98.2% of our net capital gains for the one-year period ending October 31 of that calendar year, and (iii) any income recognized, but not distributed, in preceding years and on which we paid no federal income tax. Maintenance of our RIC status also requires adherence to certain source of income and asset diversification requirements. Generally, a RIC is entitled to deduct dividends it pays to its stockholders from its income to determine “taxable income.” Taxable income includes our taxable interest, dividend and fee income, and taxable net capital gains. Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized appreciation or depreciation, as gains or losses are not included in taxable income until they are realized. In addition, gains realized for financial reporting purposes may differ from gains included in taxable income as a result of our election to recognize gains using installment sale treatment, which generally results in the deferment of gains for tax purposes until notes or other amounts, including amounts held in escrow, received as consideration from the sale of investments are collected in cash. Taxable income includes non-cash income, such as changes in accrued and reinvested interest

and dividends, which includes contractual PIK interest, and the amortization of discounts and fees. Cash collections of income resulting from contractual PIK interest and dividends or the amortization of discounts and fees generally occur upon the repayment of the loans or debt securities that include such items. Non-cash taxable income is reduced by non-cash expenses, such as realized losses and depreciation, and amortization expense.

We do not currently qualify as a “publicly offered regulated investment company,” as defined in the Code. Accordingly, stockholders will be taxed as though they received a distribution of some of the our expenses. A “publicly offered regulated investment company” is a RIC whose shares are either (i) continuously offered pursuant to a public offering, (ii) regularly traded on an established securities market, or (iii) held by at least 500 persons at all times during the taxable year. We anticipate that we will not qualify as a publicly offered RIC for the 2020 tax year, and we cannot determine when we will qualify as a publicly offered RIC. Since we are not a publicly offered RIC, a non-corporate stockholder’s allocable portion of our affected expenses, including a portion of our management fees, will be treated as an additional distribution to the stockholder. A non-corporate stockholder’s allocable portion of these expenses are treated as miscellaneous itemized deductions that are not currently deductible by such stockholders.

Our Board maintains a variable dividend policy with the objective of distributing four quarterly distributions in an amount not less than 90-100% of our taxable quarterly income or potential annual income for a particular year. In addition, at the end of the year, we may also pay an additional special dividend, or fifth dividend, such that we may distribute approximately all of our annual taxable income in the year it was earned, while maintaining the option to spill over our excess taxable income to a following year. Each year, a statement on Form 1099-DIV identifying the source of the distribution is mailed to the Company’s stockholders.

Our distributions through June 30, 2020 were funded through expense limitation payments by OFS Advisor under the Prior Expense Support Agreement and, and our distributions may in the future, be funded through expense limitation payments by CIM Capital under the Expense Support Agreement. The Expense Support Agreement is designed to ensure no portion of our distribution to stockholders will be paid from Offering proceeds, and provides for expense limitation payments to us in any quarterly period our cumulative distributions to stockholders exceeds the Company's cumulative ICTI and net realized gains. Any such distributions funded through expense limitation payments are not based on our investment performance, and can only be sustained if we achieve positive investment performance in future periods and/or CIM Capital continues to make such payments. The Expense Support Agreement may be terminated by us or CIM Capital, without payment of any penalty, upon written notice to us.

Share Repurchases

On November 6, 2018, a "required majority" (as defined in Section 57(o) of the 1940 Act) of our Board approved the application of a reduced 150% asset coverage ratio to us. In accordance with the SBCAA, we extended to each of our stockholders as of November 6, 2018, an offer to repurchase the equity securities held by such stockholders, with 25% of such equity securities to be repurchased in each of the four quarters following November 6, 2018. As a result, effective November 6, 2019, the asset coverage ratio test applicable to us was decreased from 200% to 150%. Additionally, in each fiscal quarter subsequent to November 6, 2019, the Board has approved tender offers to purchase, in each case, 2.5% of the weighted average number of shares of the outstanding common stock for the trailing 12-month period.

The repurchase offer allowed our stockholders to sell their shares back to us at a price equal to the most recently disclosed net asset value per share of our common stock immediately prior to the date of repurchase. See "Item 1. Financial Statements – Notes to Financial Statements – Note 10" for details on share repurchases.

Recent Developments

On October 27, 2020, our Board declared a distribution of $0.0846 per common share, payable on January 15, 2021, to stockholders of record on October 28, 2020.

On November 10, 2020, our Board approved a tender offer, commencing on November 30, 2020, to purchase 2.5% of the weighted average number of shares of the outstanding Common Stock for the trailing 12-month period.

We evaluated events subsequent to September 30, 2020 through November 12, 2020. On March 11, 2020, the World Health Organization declared the novel coronavirus as a pandemic, and on March 13, 2020 the United States declared a national emergency with respect to the COVID-19 pandemic. The outbreak of the COVID-19 pandemic has severely impacted global economic activity and caused significant volatility and negative pressure in financial markets. The COVID-19 pandemic and the preventative measures taken to contain or mitigate its spread have caused, and are continuing to cause, business shutdowns, cancellations of events and travel, significant reductions in demand for certain goods and services, reductions in business activity and financial transactions, supply chain interruptions, and overall economic and financial market instability both globally and in the United States. Such effects will likely continue for the duration of the pandemic, which is uncertain, and for some period thereafter. The outbreak could have a continued adverse impact on economic and market conditions on a

global scale. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of the COVID-19 pandemic. Nevertheless, the ongoing COVID-19 pandemic presents material uncertainty and risks with respect to the underlying value of our portfolio companies, our business, financial condition, results of operations and cash flows, such as the potential negative impact to financing arrangements, increased costs of operations, changes in law and/or regulation, and uncertainty regarding government and regulatory policy. Further, the operational and financial performance of the portfolio companies in which we make investments have been, and may continue to be, significantly impacted by the COVID-19 pandemic, which in turn has, and may continue to have, an impact the valuation of our investments.

Accordingly, we cannot predict the full extent to which our business, financial condition, results of operations and cash flows will be affected at this time. The potential impact to our results will depend to a large extent on future developments and new information that may emerge regarding the duration and severity of the COVID-19 pandemic and the actions taken by authorities and other entities to contain the coronavirus or treat its impact, all of which are beyond our control.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our market risks reported in our Annual Report on Form 10-K for the year ended December 31, 2019; however, uncertainty with respect to the economic effects of the COVID-19 outbreak has introduced significant volatility in the financial markets, and the effect of the volatility could materially impact our market risks. In addition, in a prolonged low interest rate environment, including a reduction of LIBOR to zero, our net interest margin will be compressed and adversely affect our operating results. For additional information concerning the COVID-19 outbreak and its potential impact on our business and our operating results, see Part II - Other information, Item 1A. Risk Factors.

Our outstanding Unsecured Note bears interest at a fixed rate. Our PWB Credit Facility has a floating interest rate provision based on the Prime Rate with a 5.50% interest rate floor, which resulted in an stated interest rate of 5.50% as of September 30, 2020. Assuming that the interim, unaudited Statement of Assets and Liabilities as of September 30, 2020 were to remain constant and that we took no actions to alter our existing interest rate sensitivity, the following table shows the annualized impact of hypothetical base rate changes in interest rates:



Basis point increase	Interest income		Interest expense		Net increase in net investment income
25	$	11,828	$	—	$	11,828
50	23,882		—		23,882
75	43,533		—		43,533
100	118,650		—		118,650
125	206,651		—		206,651



Basis point decrease	Interest income			Interest expense		Net decrease in net investment income
25	$	(10,030	)	$	—	$	(10,030	)
50	n/m (1)			n/m (1)		n/m (1)
75	n/m (1)			n/m (1)		n/m (1)
100	n/m (1)			n/m (1)		n/m (1)
125	n/m (1)			n/m (1)		n/m (1)

(1) Not meaningful.

Item 4. Controls and Procedures

Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2020. The term “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of the Company’s disclosure controls and procedures as of September 30, 2020, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the quarter ended September 30, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

We, OFS Advisor and OFS Services, are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us. From time to time, we may be a party to certain legal proceedings incidental to the normal course of our business, including the enforcement of our rights under contracts with our portfolio companies. Furthermore, third parties may try to seek to impose liability on us in connection with the activities of our portfolio companies. Our business is also subject to extensive regulation, which may result in regulatory proceedings against us. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.

Item 1A. Risk Factors

Investing in our common stock may be speculative and involves a high degree of risk. In addition to the other information contained in this Quarterly Report on Form 10-Q, including our financial statements, and the related notes, schedules and exhibits, you should carefully consider the risk factors described in "Part I – Item 1A. Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

Other than the risks described below, there have been no material changes from the risk factors previously disclosed in "Part I – Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2019. However, the risks below and disclosed in our Annual Report on Form 10-K, may be, and will continue to be, heightened or exacerbated by the COVID-19 pandemic and any worsening of the economic environment, The risks previously disclosed in our Annual Report on Form 10-K should be read together with the other information disclosed elsewhere in this Quarterly Report on Form 10-Q and our other reports filed with the SEC.

Events outside of our control, including public health crises such as the COVID-19 pandemic, have and will continue to negatively affect the results of our operations.

Periods of market volatility may continue in response to pandemics, such as the COVID-19 pandemic, or other events outside of our control. These types of events have and will continue to adversely affect our operating results. In December 2019, COVID-19, caused by a novel strain of the coronavirus, surfaced in Wuhan, China. In March 2020, the outbreak of COVID-19 was recognized as a pandemic by the World Health Organization. Shortly thereafter, the President of the United States declared a National Emergency throughout the United States attributable to such outbreak. The outbreak has become increasingly widespread globally and in the United States, including in the markets in which we operate. We have been and continue to assess the effects of the COVID-19 pandemic on our borrowers and are taking steps to help mitigate the adverse consequences to each of their businesses. As a result of the COVID-19 pandemic, we have and may continue to experience difficulty collecting timely interest and principal payments from our borrowers, our asset values have and may continue to decline, and certain of our outstanding loans may need to be extended or restructured. We have held discussions with our borrowers and they have expressed their general concern about the uncertain economic conditions. The impact to our results will depend to a large extent on future developments and new information that may emerge regarding the duration of the COVID-19 pandemic and the actions taken by authorities and other entities to contain the COVID-19 pandemic or treat its impact, all of which are beyond our control. Though the magnitude of the impact remains to be seen, our borrowers and by extension our operating results will be adversely impacted by the COVID-19 pandemic.

In addition to adverse United States domestic and global macroeconomic effects, including the adverse impacts on our portfolio companies and investment assets, the COVID-19 pandemic has caused, and will continue to cause, a reduction in our ability to access capital through the capital markets and through our credit facilities, and has otherwise adversely impacted, and will continue to impact, the operation of our business. The COVID-19 pandemic has also caused, and will continue to cause, substantial disruption to our employees, investors, business partners, referral sources, borrowers and prospective borrowers through self-isolation, travel limitations, business restrictions, and otherwise. Many areas within the United States have imposed mandatory closures for businesses not deemed to be essential, and it is currently unclear for how long such closures will last. Though all of OFS Advisor's employees are able to work remotely, these closures have nevertheless affected many of our borrowers and many businesses through which we seek new borrowers, resulting in significant declines in new loans and investments. These effects, individually or in the aggregate, have, and will continue to, adversely impact our business, financial condition, operating results and cash flows and such adverse impacts may be material.

Any of the foregoing factors, or other cascading effects of the COVID-19 pandemic that are not currently foreseeable, could materially increase our costs, negatively impact our investment income and damage our results of operations and our liquidity position, possibly to a significant degree. The duration of any such impacts cannot be predicted.

The effects of the outbreak of COVID-19 have negatively affected the global economy, the United States economy and the global financial markets, and have and may continue to disrupt our operations and our borrowers' operations, which have and may continue to adversely impact our business, financial condition and results of operations.

The ongoing COVID-19 global and national health emergency has caused significant disruption in the international and United States economies and financial markets. On March 11, 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. The spread of COVID-19 has caused illness, quarantines, cancellation of events and travel, business and school shutdowns, reduction in business activity and financial transactions, labor shortages, supply chain interruptions and overall economic and financial market instability. The United States now has the world’s most reported COVID-19 cases, and all 50 states and the District of Columbia have reported cases of infected individuals. A majority of states, including Illinois, where we are headquartered, have declared states of emergency. This has resulted in an unprecedented slow-down in economic activity and a related increase in unemployment. Since the beginning of the COVID-19 pandemic, more than 55 million people have filed claims for unemployment, and stock markets have experienced increased volatility and, in particular, BDC stocks have significantly declined in value. In response to the COVID-19 pandemic, the Federal Reserve Board has reduced the benchmark fed funds rate to a target range of 0% to 0.25%, and the yields on 10 and 30-year treasury notes have declined to historic lows. The federal banking agencies have encouraged financial institutions to prudently work with affected borrowers. Certain industries have been particularly hard-hit, including the travel and hospitality industry, the restaurant industry and the retail industry. Finally, the spread of the coronavirus has caused OFS Advisor to modify its business practices, including employee travel, employee work locations, and cancellation of physical participation in meetings, events and conferences. OFS Advisor may take further actions as may be required by government authorities or that it determines are in the best interests of its employees, customers and business partners.

Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the full impact of the COVID-19 pandemic on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated and when and how the economy may be reopened.

As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations:


•	demand for our services may decline, making it difficult to grow assets and income;


•	if the economy is unable to substantially reopen, and high levels of unemployment continue for an extended period of time, loan delinquencies, loan non-accruals, problem assets, and bankruptcies may increase, resulting in increased charges and reduced income;


•	collateral for loans may decline in value, which could cause loan losses to increase;


•	our fair values may continue to decrease if borrowers experience financial difficulties, which will adversely affect our net income;


•	increased amendments and/or restructuring to the terms or our portfolio company loan agreements, which may increase the amount of PIK interest, and defer the collection of cash interest and/or increase the risk of default;


•	the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us;


•	as the result of the decline in the Federal Reserve Board’s target federal funds rate, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and reducing net income;


•	a material decrease in net income or a net loss over several quarters could result in a decrease in the rate of our quarterly cash dividend;


•	we rely on third party vendors for certain services and the unavailability of a critical service due to the COVID-19 outbreak could have an adverse effect on us; and


•	reduction in our ability to access capital, including our credit facilities, may cause a distressed liquidity position and result in a decrease or inability to pay dividends.

Moreover, our future success and profitability substantially depends on the management skills of our executive officers and directors, many of whom have held officer and director positions with us for many years. The unanticipated loss or unavailability of our executive officers or directors or key employees of OFS Advisor due to the outbreak could harm our ability to operate our business or execute our business strategy. We may not be successful in finding and integrating suitable successors in the event of key employee loss or unavailability.

Any one or a combination of the factors identified above has and could continue to negatively impact our business, financial condition and results of operations and prospects.

Due to the COVID-19 pandemic or other disruptions in the economy, we may not be able to increase our dividends and may reduce or defer our dividends and choose to incur US federal excise tax in order preserve cash and maintain flexibility.

As a BDC, we are not required to make any distributions to stockholders other than in connection with our election to be taxed as a RIC under subchapter M of the Code. In order to maintain our tax treatment as a RIC, we must distribute to stockholders for each taxable year at least 90% of our investment company taxable income (i.e., net ordinary income plus realized net short-term capital gains in excess of realized net long-term capital losses). If we qualify for taxation as a RIC, we generally will not be subject to corporate-level US federal income tax on our investment company taxable income and net capital gains (i.e., realized net long-term capital gains in excess of realized net short-term capital losses) that we timely distribute to stockholders. We will be subject to a 4% US federal excise tax on undistributed earnings of a RIC unless we distribute each calendar year at least the sum of (i) 98.0% of our ordinary income for the calendar year, (ii) 98.2% of our capital gains in excess of capital losses for the one-year period ending on October 31 of the calendar year, and (iii) any ordinary income and net capital gains for preceding years that were not distributed during such years and on which we paid no federal income tax.

Under the Code, we may satisfy certain of our RIC distributions with dividends paid after the end of the current year. In particular, if we pay a distribution in January of the following year that was declared in October, November, or December of the current year and is payable to shareholders of record in the current year, the dividend will be treated for all US federal tax purposes as if it were paid on December 31 of the current year. In addition, under the Code, we may pay dividends, referred to as “spillover dividends,” that are paid during the following taxable year that will allow us to maintain our qualification for taxation as a RIC and eliminate our liability for corporate-level U.S. federal income tax. Under these spillover dividend procedures, we may defer distribution of income earned during the current year until December of the following year. For example, we may defer distributions of income earned during 2020 until as late as December 31, 2021. However, if we choose to pay a spillover dividend, we will still incur the 4% U.S. federal excise tax on some or all of the distribution.

Due to the COVID-19 pandemic or other disruptions in the economy, we anticipate that we may take certain actions with respect to the timing and amounts of our distributions in order to preserve cash and maintain flexibility. For example, we anticipate that we will not be able to increase our dividends. In addition, we may reduce our dividends and/or defer our dividends to the following taxable year. If we defer our dividends, we may choose to utilize the spillover dividend rules discussed above and incur the 4% U.S. federal excise tax on such amounts. To further preserve cash, we may combine these reductions or deferrals of dividends with one or more distributions that are payable partially in our stock.

We may in the future choose to pay distributions in our own stock, in which case stockholders may be required to pay tax in excess of the cash they receive.

We distribute taxable distributions that are payable in cash or shares of our common stock at the election of each stockholder. In accordance with guidance issued by the Internal Revenue Service, a publicly traded RIC should generally be eligible to treat a distribution of its own stock as fulfilling its RIC distribution requirements if each stockholder is permitted to elect to receive his or her distribution in either cash or stock of the RIC (even where there is a limitation on the percentage of the distribution payable in cash, provided that the limitation is at least 20% or some lesser amount, if permitted by subsequent guidance), subject to the satisfaction of certain guidelines. If too many stockholders elect to receive their distributions in cash, each such stockholder would receive a pro rata share of the total cash to be distributed and would receive the remainder of their distribution in shares of stock. If this and certain other requirements are met, for U.S. federal income tax purposes, the amount of the distribution paid in stock generally will be a taxable distribution in an amount equal to the amount of cash that could have been received instead of stock. If we decide to make any distributions consistent with this guidance that are payable in part in our stock, stockholders receiving such distribution would be required to include the full amount of the distribution (whether received in cash, our stock, or a combination thereof) as ordinary income (or as long-term capital gain to the extent such distribution is properly designated as a capital gain dividend) to the extent of our current and accumulated earnings and profits for United States federal income tax purposes. As a result, a U.S. stockholder may be required to pay tax with respect to such dividends in excess of any cash received. If a U.S. stockholder sells the stock it receives as a dividend in order to pay this tax, it may be subject to transaction fees (e.g., broker fees or transfer agent fees) and the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in stock. In addition, if a significant number of our stockholders determine to sell shares of our stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our stock.

Uncertainty relating to the LIBOR calculation process and transition timing may adversely affect the value of any portfolio of LIBOR-indexed, floating-rate debt securities.

Uncertainty relating to the LIBOR calculation process may adversely affect the value of any portfolio of LIBOR-indexed, floating-rate debt securities. Concerns have been publicized that some of the member banks surveyed by the British Bankers' Association (“BBA”) in connection with the calculation of LIBOR across a range of maturities and currencies may have been under-reporting or otherwise manipulating the inter-bank lending rate applicable to them in order to profit on their derivatives positions or to avoid an appearance of capital insufficiency or adverse reputational or other consequences that may have resulted from reporting inter-bank lending rates higher than those they actually submitted. A number of BBA member banks have entered into settlements with their regulators and law enforcement agencies with respect to alleged manipulation of LIBOR, and investigations by regulators and governmental authorities in various jurisdictions are ongoing. Actions by the BBA, regulators or law enforcement agencies may result in changes to the manner in which LIBOR is determined. Uncertainty as to the nature of such potential changes may adversely affect the market for LIBOR-based securities, including our potential portfolio of LIBOR-indexed, floating-rate debt securities. In addition, any further changes or reforms to the determination or supervision of LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR, which could have an adverse impact on the market for LIBOR-based securities or the value of our potential portfolio of LIBOR indexed, floating-rate debt securities.

On July 27, 2017, the United Kingdom’s Financial Conduct Authority (the “FCA”), which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. It is expected that a transition away from the widespread use of LIBOR to alternative rates will occur over the course of the next several years. As a result of this transition, interest rates on financial instruments tied to LIBOR rates, as well as the revenue and expenses associated with those financial instruments, may be adversely affected. Further, any uncertainty regarding the continued use and reliability of LIBOR as a benchmark interest rate could adversely affect the value of our financial instruments tied to LIBOR rates. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, is considering replacing U.S. dollar LIBOR with a new index calculated by short term repurchase agreements, backed by Treasury securities, called the Secured Overnight Financing Rate (“SOFR”). The first publication of SOFR was released in April 2018. Whether or not SOFR attains market traction as a LIBOR replacement remains a question and the future of LIBOR at this time is uncertain.

Additionally, on July 12, 2019 the Staff of the SEC’s Division of Corporate Finance, Division of Investment Management, Division of Trading and Markets, and Office of the Chief Accountant issued a statement about the potentially significant effects on financial markets and market participants when LIBOR is discontinued in 2021 and no longer available as a reference benchmark rate. The Staff encouraged all market participants to identify contracts that reference LIBOR and begin transitions to alternative rates. On December 30, 2019, the SEC’s Chairman, Division of Corporate Finance and Office of the Chief Accountant issued a statement to encourage audit committees in particular to understand management’s plans to identify and address the risks associated with the elimination of LIBOR, and, specifically, the impact on accounting and financial reporting and any related issues associated with financial products and contracts that reference LIBOR, as the risks associated with the discontinuation of LIBOR and transition to an alternative reference rate will be exacerbated if the work is not completed in a timely manner.

In addition, on March 25, 2020, the FCA stated that although the central assumption that firms cannot rely on LIBOR being published after the end of 2021 has not changed, the outbreak of COVID-19 has impacted the timing of many firms’ transition planning, and the FCA will continue to assess the impact of the COVID-19 pandemic on transition timelines and update the marketplace as soon as possible. It is unclear if after 2021 LIBOR will cease to exist or if new methods of calculating LIBOR will be established such that it continues to exist after 2021.

The elimination of LIBOR or any other changes or reforms to the determination or supervision of LIBOR could have an adverse impact on the market for or value of any LIBOR-linked securities, loans, and other financial obligations or extensions of credit held by or due to us, or on our overall financial condition or results of operations. If LIBOR ceases to exist, we may need to renegotiate the credit agreements extending beyond 2021 with our portfolio companies that utilize LIBOR as a factor in determining the interest rate to replace LIBOR with the new standard that is established.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three month period ended September 30, 2020, we sold 29,740 shares of our common stock for gross proceeds of $425,000, or a weighted average price of $14.29 per share, to investors who participated in the Offering and each of whom met the criteria of an “accredited investor” as defined in Rule 501 of Regulation D under the Securities Act.

The offer and sale of the Company’s common stock in the Offering was exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of, and Rule 506 of Regulation D under, the Securities Act. We paid $35,750 in

commissions in connection with the sale of the shares. On May 19, 2017, OFS Advisor agreed to pay the dealer manager fee on sales of shares of our common stock in the Offering. Effective July 1, 2019, we pay the dealer manager fee on sales of shares of our common stock in the Offering. Previous payments of dealer manager fees by OFS Advisor are not subject to reimbursement by us.

Because shares of our common stock have been acquired by investors in one or more transactions "not involving a public offering," they are "restricted securities" and may be required to be held indefinitely. Our common stock may not be sold, transferred, assigned, pledged or otherwise disposed of unless: (i) the transferor provides OFS Advisor with at least 10 days written notice of the transfer; (ii) the transfer is made in accordance with applicable securities laws; and (iii) the transferee agrees in writing to be bound by these restrictions and the other restrictions imposed on the common stock and to execute such other instruments or certifications as are reasonably required by us. Accordingly, an investor must be willing to bear the economic risk of investment in the common stock until we are liquidated. No sale, transfer, assignment, pledge or other disposition, whether voluntary or involuntary, of the common shares may be made except by registration of the transfer on our books.

On November 6, 2018, a “required majority” (as defined in Section 57(o) of the 1940 Act) of our Board approved the application of a reduced 150% asset coverage ratio to us. In accordance with the SBCAA, we extended to each of our stockholders as of November 6, 2018, an offer to repurchase the equity securities held by such stockholders, with 25% of such equity securities to be repurchased in each of the four quarters following November 6, 2018. As a result, effective November 6, 2019, the asset coverage ratio test applicable to us decreased from 200% to 150%. Additionally, in each fiscal quarter subsequent to November 6, 2019, the Board approved tender offers to purchase, in each case, 2.5% of the weighted average number of shares of the outstanding Common Stock for the trailing 12-month period.

The following table summarizes the common stock repurchases by us as of September 30, 2020:



	Number of Shares	Amount
November 6, 2018 through December 31, 2018	18,425	$	243,030
January 1, 2019 through April 5, 2019 ⁽¹⁾	7,407	98,296
April 6, 2019 through June 30, 2019	9,029	119,821
July 1, 2019 through September 30, 2019	7,407	97,111
October 1, 2019 through December 31, 2019	15,597	204,317
January 1, 2020 through April 3, 2020 ⁽²⁾	32,622	364,383
April 4, 2020 through June 30, 2020	53,665	654,713
July 1, 2020 through September 30, 2020	55,320	694,819

(1) The Company's February 11, 2019 tender offer that was originally scheduled to expire on March 27, 2019, was amended to extend the offer period to April 5, 2019.

(2) The Company's February 21, 2020 tender offer that was originally schedule to expire on March 27, 2020, was amended to extend the offer period to April 3, 2020.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

Listed below are the exhibits that are filed as part of this report (according to the number assigned to them in Item 601 of Regulation S-K):



		Incorporated by Reference
Exhibit Number	Description	Form and SEC File No.	Filing Date with SEC	Filed with this 10-Q

10.1	Sub-Advisory Agreement, dated as of August 3, 2020, by and between OFS Capital Management, LLC and CIM Capital IC Management, LLC.	Form 8-K	August 3, 2020

10.2	Amended and Restated Expense Support and Conditional Reimbursement Agreement, dated as of August 3, 2020, by and among Hancock Park Corporate Income, Inc., OFS Capital Management, LLC and CIM Capital IC Management, LLC.	Form 8-K	August 3, 2020
11.1	Computation of Per Share Earnings			+

31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended			*

31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended			*

32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002			†

32.2	Certificate of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002			†



+	Included in the statements of operations contained in this report
*	Filed herewith.
†	Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



Dated: November 13, 2020	HANCOCK PARK CORPORATE INCOME, INC.

	By:	/s/ Bilal Rashid
	Name:	Bilal Rashid
	Title:	Chief Executive Officer

	By:	/s/ Jeffrey A. Cerny
	Name:	Jeffrey A. Cerny
	Title:	Chief Financial Officer

Hancock Park Corporate Income, Inc. - FORM 10-Q - November 13, 2020

Attached files

Hancock Park Corporate Income, Inc. Reports