ThZeal - The Zeal

han-20230630

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 June 30, 2023


¨			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 x 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 August 8, 2023 was 1,935,004.

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 June 3 0 , 2023 (unaudited) and December 31, 2022	3
	Consolidated Statements of Operations for the Three and Six Months Ended June 3 0 , 2023 (unaudited) and 2022 (unaudited)	4
	Consolidated Statements of Changes in Net Assets for the Three and Six Months Ended June 3 0 , 2023 (unaudited) and 2022 (unaudited)	5
	Consolidated Statements of Cash Flows for the Six Months Ended J une 3 0 , 2023 (unaudited) and 2022 (unaudited)	7
	Consolidated Schedules of Investments as of June 3 0 , 2023 (unaudited) and December 31, 2022	8
	Notes to Consolidated Financial Statements (unaudited)	21
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	52
Item 4.	Controls and Procedures	53

PART II. OTHER INFORMATION		55
Item 1.	Legal Proceedings	55
Item 1A.	Risk Factors	55
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	56
Item 3.	Defaults Upon Senior Securities	56
Item 4.	Mine Safety Disclosures	56
Item 5.	Other Information	56
Item 6.	Exhibits	57
SIGNATURES		58

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 Sub-Advisory Agreement
Affiliated Account			An account, other than the Company, managed by OFS Advisor or an affiliate of OFS Advisor
Affiliated Fund			Certain other funds, including other BDCs and registered investment companies managed by OFS Advisor or by registered investment advisers controlling, controlled by, or under common control with, OFS Advisor
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
ASC			Accounting Standards Codification, as issued by the FASB
BDC			Business Development Company under the 1940 Act
BLA			Business Loan Agreement, as amended, with Pacific Western Bank, as lender, which provides the Company with a senior secured revolving credit facility
Board			The Company's board of directors
CCO			CCO Capital, LLC, a Delaware limited liability company, the Company's dealer manager and affiliate to the Company, OFS Advisor and CIM Capital
CIM Capital			CIM Capital IC Management, LLC, an affiliate of OFS Advisor
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 its affiliates and others while engaged in offering and other contractually-defined activities
Dealer Manager Agreement			Broker dealer management agreement dated August 3, 2020, by and among the Company, OFS Advisor, International Assets Advisory, LLC and CCO, and amended and restated on February 2, 2022
EBITDA			Earnings before interest, taxes, depreciation, and amortization
ESAs			The Amended Expense Support Agreement and the Second Amended Expense Support Agreement
Exchange Act			Securities Exchange Act of 1934, as amended
FASB			Financial Accounting Standards Board

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 that 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
LIBOR			London Interbank Offered Rate

NAV			Net asset value. NAV is calculated by aggregating our consolidated total assets less consolidated total liabilities and can be expressed in the aggregate or on a per share basis
Net Loan Fees			The cumulative amount of fees, such as origination fees, discounts, premiums and amendment fees that are deferred and recognized as income over the life of the loan


Term			Explanation or Definition
Note Purchase Agreement			An agreement between the Company and a qualified institutional investor, dated November 27, 2019, in which the Company sold in a private placement the Unsecured Note
OCCI			OFS Credit Company, Inc., a Delaware corporation and a non-diversified, closed-end management investment company, for which 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, focusing primarily on investments in middle market loans and broadly syndicated loans, debt and equity positions in CLOs and other structured credit investments

OFS Capital			OFS Capital Corporation, a Delaware corporation and publicly traded BDC, for which 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 subsidiary of OFSAM Holdings, and a full-service provider of capital and leveraged finance solutions to U.S. corporations
OFSAM Holdings			Orchard First Source Asset Management Holdings, LLC, a holding company consisting of asset management businesses, including OFS Advisor, a registered investment adviser focusing primarily on investments in middle market loans and broadly syndicated loans, debt and equity positions in CLOs and other structured credit investments, and OFS CLO Management, LLC and OFS CLO II Management, LLC, each a registered investment adviser focusing primarily on investments in broadly syndicated loans
Order			An exemptive relief order from the SEC to permit us to co-invest in portfolio companies with 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
PIK			Payment-in-kind, non-cash interest or dividends payable as an addition to the loan or equity security producing the income
Portfolio Company Investment			A debt or equity investment in a portfolio company. Portfolio Company Investments exclude Structured Finance Securities
Prime Rate			United States Prime interest rate
PWB Credit Facility			A senior secured revolving credit facility, as amended, with Pacific Western Bank, as lender, that provides for borrowings to the Company in an aggregate principal amount up to $20,000,000
RIC			Regulated investment company under the Code
SEC			United States Securities and Exchange Commission
Second Amended Expense Support Agreement			Second Amended and Restated Expense Support and Conditional Reimbursement Agreement dated February 2, 2022, between the Company and OFS Advisor, agreed to and accepted by CIM Capital
Securities Act			Securities Act of 1933, as amended
SOFR			Secured Overnight Financing Rate
Structured Finance Securities			CLO mezzanine debt, CLO subordinated note, CLO loan accumulation facility positions and other CLO related investments
Sub-Advisory Agreement			Sub-Advisory Agreement dated as of August 3, 2020, by and between OFS Advisor and CIM Capital, which was terminated on February 2, 2022

Unsecured Note			An agreement, as amended, with The HCM Master Fund Limited, an exempted company incorporated with limited liability under the laws of the Cayman Islands 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;

•our ability to replicate historical results;

•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 Holdings;

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

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

•the impact of rising interest and inflation rates and the risk of recession on our business prospects and the prospects of our portfolio companies;

•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 Section 61(a)(2) of the 1940 Act and the impact of such leverage on our net investment income and results of operations;

•competition for investment opportunities;

•our plans to focus on providing first lien senior secured loans to larger borrowers and the impact of these plans on our risk profile, including our belief that the seniority of such loans in a borrower's capital structure may provide greater downside protection against adverse economic changes, including those caused by the impacts of the ongoing war between Russia and Ukraine, rising interest and elevated inflation rates, the risk of recession, and related market volatility;

•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 success of our current borrowings, and issuances of senior securities or future borrowings to fund the growth of our investment portfolio;

•the timing, form and amount of any distributions from our portfolio companies;

•the timing or amount of distribution payments to our stockholders;

•interest rate volatility, including the transition from LIBOR to SOFR and/or other alternative reference rate(s);

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

•the impact of current political, economic and industry conditions, including changes in the interest rate environment, inflation, significant market volatility, instability in the U.S. and international banking systems, ongoing supply chain and labor market disruptions, resource shortages and other conditions affecting the financial and capital markets on our business, financial condition, results of operations and the fair value of our portfolio investments;

•the impact of the ongoing war between Russia and Ukraine and general uncertainty surrounding the financial and political stability of the United States, the United Kingdom, the European Union and China;

•our ability to consummate credit facilities in the future on commercially reasonable terms, if at all;

•the impact of information technology system failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity attacks;

•our ability to generate cash from: (i) the net proceeds of the Offering; (ii) cash flows from our operations; (iii) the PWB Credit Facility and any other financing arrangements we may enter into in the future; (iv) investment repayments or dispositions; and (v) any future offerings of our equity or debt securities;

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

•the belief that our cash balances are not exposed to any significant credit risk as a result of the recent banking failures;

•the impact that environmental, social and governance matters could have on our brand and reputation and our portfolio companies;

•the fluctuation of the fair value of our investments due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value; 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, 2022, filed on March 17, 2023, and 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


	June 30, 2023		December 31, 2022
	(unaudited)
Assets:
Non-control/non-affiliate investments, at fair value (amortized cost of $53,433,467 and $55,304,651, respectively)	$	49,844,723	$	52,270,532
Cash	985,025		973,147
Interest receivable	215,592		184,346
Receivable for investments sold	1,665,000		—
Subscriptions receivable	—		206,080
Prepaid expenses and other assets	29,317		9,973
Total assets	$	52,739,657	$	53,644,078

Liabilities:
Revolving line of credit	$	15,740,000	$	15,165,000
Unsecured note (net of discount and deferred debt issuance costs of $248,347 and $284,690, respectively)	14,751,653		14,715,310

Due to advisor and affiliates (see Note 3)	612,793		716,749
Accrued professional fees	131,000		163,875
Payable for repurchase of common stock	535,888		574,941
Distribution payable	162,631		165,808
Interest payable	79,288		82,181
Other liabilities	64,922		42,267
Total liabilities	32,078,175		31,626,131

Commitments and contingencies (see Notes 3 and 6)

Net assets:
Common stock, par value of $0.001 per share; 20,000,000 shares authorized, 1,935,004 and 1,959,902 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively; 0 and 17,792 shares subscribed as of June 30, 2023 and December 31, 2022, respectively	1,935		1,977
Paid-in capital in excess of par	25,436,898		25,885,923
Total distributable earnings (losses)	(4,777,351)		(3,869,953)
Total net assets	20,661,482		22,017,947

Total liabilities and net assets	$	52,739,657	$	53,644,078

Number of shares outstanding and subscribed	1,935,004		1,977,694
Net asset value per share	$	10.68	$	11.13

See Notes to Consolidated Financial Statements (unaudited).

Hancock Park Corporate Income, Inc.

Consolidated Statements of Operations (unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Investment income
Interest income	$	2,022,349	$	1,191,164	$	3,923,642	$	2,269,016
Dividend income	4,185		—		4,357		—
Fee income	3,306		7,496		13,424		40,555
Total investment income	2,029,840		1,198,660		3,941,423		2,309,571

Operating expenses
Interest expense	605,108		305,246		1,169,823		583,135
Management fees	163,288		150,249		328,008		297,262
Incentive fees	147,016		—		271,719		—
Administrative fees	216,563		242,110		453,312		469,827
Professional fees	194,708		138,199		386,785		299,729


Other expenses	112,844		104,323		234,249		179,468
Amortization of deferred offering costs	3,410		13,555		7,232		27,729
Contractual Issuer Expenses	78,201		30,000		154,951		31,050
Total operating expenses	1,521,138		983,682		3,006,079		1,888,200
Less: Expense limitations under agreements with advisers (see Note 3)	(79,361)		(30,054)		(260,081)		(178,304)
Net operating expenses	1,441,777		953,628		2,745,998		1,709,896

Net investment income	588,063		245,032		1,195,425		599,675

Net realized and unrealized gain (loss) on investments
Net realized gain (loss) on investments	(580,256)		11,722		(499,779)		13,684
Income tax expense from realized gains on investments	—		—		(29,844)		(31,000)
Net unrealized appreciation (depreciation) on investments	328,434		(1,641,732)		(554,625)		(1,830,856)
Deferred tax expense (benefit) from net unrealized appreciation (depreciation) on investments	31,072		5,232		(31,081)		3,424
Net loss on investments	(220,750)		(1,624,778)		(1,115,329)		(1,844,748)

Net increase (decrease) in net assets resulting from operations	$	367,313	$	(1,379,746)	$	80,096	$	(1,245,073)

Net investment income per common share – basic and diluted	$	0.30	$	0.12	$	0.60	$	0.30
Net increase (decrease) in net assets resulting from operations per common share – basic and diluted	$	0.19	$	(0.69)	$	0.04	$	(0.62)
Distributions declared per common share	$	0.25	$	0.25	$	0.51	$	0.51
Basic and diluted weighted average shares outstanding and subscribed	1,971,066		2,000,333		1,982,244		2,009,186

See Notes to Consolidated Financial Statements (unaudited).

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 December 31, 2021	2,020,361	$	2,020	$	26,754,914	$	(512,511)	$	26,244,423
Net investment income	—	—		—		599,675		599,675
Net realized loss on investments, net of taxes	—	—		—		(17,316)		(17,316)
Net unrealized depreciation on investments, net of taxes	—	—		—		(1,827,432)		(1,827,432)
Tax reclassifications of permanent differences	—	—		(14,850)		14,850		—
Common stock issued or subscribed	69,867	70		910,480		—		910,550
Repurchases of common stock	(105,365)	(105)		(1,334,087)		—		(1,334,192)
Distributions to stockholders	—	—		—		(1,011,466)		(1,011,466)
Net decrease for the six month period ended June 30, 2022	(35,498)	(35)		(438,457)		(2,241,689)		(2,680,181)
Balances at June 30, 2022	1,984,863	$	1,985	$	26,316,457	$	(2,754,200)	$	23,564,242

Balances at March 31, 2022	1,973,468	$	1,973	$	26,149,015	$	(884,755)	$	25,266,233
Net investment income	—	—		—		245,032		245,032
Net realized gain on investments, net of taxes	—	—		—		11,722		11,722
Net unrealized depreciation on investments, net of taxes	—	—		—		(1,636,500)		(1,636,500)
Tax reclassifications of permanent differences	—	—		(13,500)		13,500		—
Common stock issued or subscribed	63,556	64		827,686		—		827,750
Repurchase of common stock	(52,161)	(52)		(646,744)		—		(646,796)
Distributions to stockholders	—	—		—		(503,199)		(503,199)
Net increase (decrease) for the three month period ended June 30, 2022	11,395	12		167,442		(1,869,445)		(1,701,991)
Balances at June 30, 2022	1,984,863	$	1,985	$	26,316,457	$	(2,754,200)	$	23,564,242


	Common Stock
	Number of shares	Par value		Paid-in capital in excess of par		Total distributable earnings (losses)		Total net assets
Balances at December 31, 2022	1,977,694	$	1,977	$	25,885,923	$	(3,869,953)	$	22,017,947
Net investment income	—	—		—		1,195,425		1,195,425
Net realized loss on investments, net of taxes	—	—		—		(529,623)		(529,623)
Net unrealized depreciation on investments, net of taxes	—	—		—		(585,706)		(585,706)
Tax reclassifications of permanent differences	—	—		(10,650)		10,650		—
Common stock issued	57,618	58		661,942		—		662,000
Repurchases of common stock	(100,308)	(100)		(1,100,317)		—		(1,100,417)
Distributions to stockholders	—	—		—		(998,144)		(998,144)
Net decrease for the six month period ended June 30, 2023	(42,690)	(42)		(449,025)		(907,398)		(1,356,465)
Balances at June 30, 2023	1,935,004	$	1,935	$	25,436,898	$	(4,777,351)	$	20,661,482

Balances at March 31, 2023	1,972,439	$	1,972	$	25,836,999	$	(4,650,546)	$	21,188,425
Net investment income	—	—		—		588,063		588,063
Net realized loss on investments, net of taxes	—	—		—		(580,256)		(580,256)
Net unrealized appreciation on investments, net of taxes	—	—		—		359,506		359,506
Tax reclassifications of permanent differences	—	—		(2,250)		2,250		—
Common stock issued	12,648	13		137,987		—		138,000
Repurchase of common stock	(50,083)	(50)		(535,838)		—		(535,888)
Distributions to stockholders	—	—		—		(496,368)		(496,368)
Net decrease for the three month period ended June 30, 2023	(37,435)	(37)		(400,101)		(126,805)		(526,943)
Balances at June 30, 2023	1,935,004	$	1,935	$	25,436,898	$	(4,777,351)	$	20,661,482

See Notes to Consolidated Financial Statements (unaudited).

Hancock Park Corporate Income, Inc.

Consolidated Statements of Cash Flows (unaudited)


	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities
Net increase (decrease) in net assets resulting from operations	$	80,096	$	(1,245,073)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Net unrealized depreciation on investments, net of taxes	585,706		1,827,432
Net realized (gain) loss on investments	499,779		(13,684)
Income tax expense from realized gains on investments	29,844		31,000
Amortization of Net Loan Fees on investments	(228,555)		(179,000)
Amendment fees collected	9,184		11,024
Amortization of deferred debt issuance costs	37,226		36,343
Accretion of interest income on Structured Finance Securities	(741,598)		(498,748)
Paid-in-kind interest income	(17,572)		(7,578)
Purchase of portfolio investments	(2,506,953)		(13,250,908)
Proceeds from principal payments on portfolio investments	796,159		7,777,816
Proceeds from sale or redemption of portfolio investments	3,299,761		100,849
Proceeds from distributions received from portfolio investments	765,320		553,693
Changes in operating assets and liabilities:
Interest receivable	(31,246)		91,463
Interest payable	(2,893)		513
Due to advisor and affiliates	(103,956)		(93,205)
Receivable for investment sold	(1,665,000)		1,612,224
Payable for investments purchased	—		2,039,833
Other assets and liabilities	(95,713)		(233,423)
Net cash provided by (used in) operating activities	709,589		(1,439,429)

Cash flows from financing activities
Net proceeds from issuance of common stock	868,080		784,600
Distributions paid to stockholders	(1,001,321)		(1,028,393)
Borrowings under revolving line of credit	5,785,000		6,325,000
Repayments under revolving line of credit	(5,210,000)		(5,260,000)
Repurchases of common stock	(1,139,470)		(1,383,786)

Net cash used in financing activities	(697,711)		(562,579)

Net increase (decrease) in cash	11,878		(2,002,008)
Cash at beginning of period	973,147		3,246,987
Cash at end of period	$	985,025	$	1,244,979

Supplemental disclosure of cash flow information and noncash financing activities:
Amortization of deferred offering costs limited by investment advisor (see Note 3)	$	7,232	$	27,729
Cash paid for interest	1,135,490		546,278
Subscription receivable	—		125,950

See Notes to Consolidated Financial Statements (unaudited).

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments (unaudited)

June 30, 2023


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
AIDC IntermediateCo 2, LLC	Computer Systems Design Services
Senior Secured Loan		11.47%	SOFR+	6.25%	7/8/2022	7/22/2027	$	497,500	$	488,415	$	485,461	2.3	%

Allen Media, LLC (9)	Cable and Other Subscription Programming
Senior Secured Loan		10.89%	SOFR+	5.50%	9/15/2022	2/10/2027	1,237,210		1,123,006		1,071,956		5.2

All Star Auto Lights, Inc.	Motor Vehicle Parts (Used) Merchant Wholesalers
Senior Secured Loan		12.75%	SOFR+	7.25%	12/19/2019	8/20/2025	5,202,900		5,160,115		5,202,900		25.2

Astro One Acquisition Corporation	Other Miscellaneous Nondurable Goods Merchant Wholesalers
Senior Secured Loan		14.23%	L+	8.50%	1/31/2022	9/14/2029	1,000,000		901,256		370,859		1.8

Atlantis Holding, LLC (9)	Electronics and Appliance Stores
Senior Secured Loan		12.49%	SOFR+	7.25%	3/29/2022	3/31/2029	1,578,947		1,530,237		1,565,132		7.5

BayMark Health Services, Inc.	Outpatient Mental Health and Substance Abuse Centers
Senior Secured Loan		13.74%	SOFR+	8.50%	6/10/2021	6/11/2028	1,325,758		1,311,649		1,303,220		6.3
Senior Secured Loan (Delayed Draw)		13.74%	SOFR+	8.50%	6/10/2021	6/11/2028	357,657		353,815		351,576		1.7
							1,683,415		1,665,464		1,654,796		8.0
BCPE North Star US Holdco 2, Inc. (F/K/A Dessert Holdings)	Ice Cream and Frozen Dessert Manufacturing
Senior Secured Loan		12.79%	L+	7.25%	2/2/2022	6/8/2029	833,333		821,620		752,512		3.6

Boca Home Care Holdings, Inc.	Services for the Elderly and Persons with Disabilities
Senior Secured Loan (Delayed Draw)		11.99%	SOFR+	6.50%	2/25/2022	2/25/2027	1,111,532		1,099,870		1,093,152		5.3
Senior Secured Loan (Revolver) (12)		n/m (5)	SOFR+	6.50%	2/25/2022	2/25/2027	—		(943)		(2,134)		—
Common Equity (129 Class A units) (7)					2/25/2022				129,032		116,892		0.6
Preferred Equity (345 Class A units) 12.0% cash / 2.0% PIK					3/3/2023				34,464		34,483		0.2
							1,111,532		1,262,423		1,242,393		6.1

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments (unaudited)

June 30, 2023


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
Common Equity (1,362 units) (7)					3/27/2020				$	46,403	$	2,477	—	%

Convergint Technologies Holdings, LLC	Security Systems Services (except Locksmiths)
Senior Secured Loan		11.97%	SOFR+	6.75%	9/28/2018	3/30/2029	$	2,068,608	2,027,827		2,039,441		9.9

DRS Imaging Services, LLC	Data Processing, Hosting, and Related Services
Common Equity (115 units) (13)					3/8/2018				115,154		49,878		0.2

Electrical Components International, Inc.	Current-Carrying Wiring Device Manufacturing
Senior Secured Loan		13.86%	SOFR+	8.50%	4/8/2021	6/26/2026	1,322,722		1,225,002		1,254,711		6.1

Excelin Home Health, LLC	Home Health Care Services
Senior Secured Loan		15.00% cash / 2.25% PIK	SOFR+	9.50%	10/25/2018	9/30/2025	1,015,254		995,496		909,415		4.4

Honor HN Buyer Inc.	Services for the Elderly and Persons with Disabilities
Senior Secured Loan		11.14%	SOFR+	5.75%	10/15/2021	10/15/2027	847,724		835,620		845,774		4.1
Senior Secured Loan (Delayed Draw)		11.14%	SOFR+	5.75%	10/15/2021	10/15/2027	536,758		527,872		535,518		2.6
Senior Secured Loan (Revolver) (12)		13.00%	Prime +	4.75%	10/15/2021	10/15/2027	12,376		10,960		12,148		0.1
Senior Secured Loan (Delayed Draw) (12)		11.54%	SOFR+	6.00%	3/31/2023	10/15/2027	246,977		244,581		246,682		1.2
							1,643,835		1,619,033		1,640,122		8.0
Idera	Computer and Computer Peripheral Equipment and Software Merchant Wholesalers
Senior Secured Loan		12.01%	SOFR+	6.75%	1/27/2022	3/2/2029	1,000,000		1,000,000		971,693		4.7

Inergex Holdings, LLC	Other Computer Related Services
Senior Secured Loan		12.59%	SOFR+	7.00%	10/1/2018	10/1/2024	991,189		981,678		991,189		4.8
Senior Secured Loan (Revolver)		12.59%	SOFR+	7.00%	10/1/2018	10/1/2024	156,250		152,742		156,250		0.8
							1,147,439		1,134,420		1,147,439		5.6
KNS Acquisition Corp.	Electronic Shopping and Mail-Order Houses
Senior Secured Loan		11.47%	SOFR+	6.25%	7/26/2021	4/21/2027	956,250		954,577		898,209		4.3

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments (unaudited)

June 30, 2023


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

LogMeIn (9)	Data Processing, Hosting, and Related Services
Senior Secured Loan		9.94%	L+	4.75%	9/28/2022	8/31/2027	$	1,385,787	$	1,018,123	$	873,815	4.2	%

Metasource	All Other Business Support Services
Senior Secured Loan		11.47%	SOFR+	6.25%	5/17/2022	5/17/2027	691,250		685,890		635,827		3.1
Senior Secured Loan (Delayed Draw) (12)		n/m (5)	SOFR+	6.25%	5/17/2022	5/17/2027	—		(1,317)		(24,053)		(0.1)
							691,250		684,573		611,774		3.0
Milrose Consultants, LLC	Administrative Management and General Management Consulting Services
Senior Secured Loan		11.99% cash / 1.00% PIK	SOFR+	7.50%	7/16/2019	7/16/2025	3,837,034		3,837,034		3,817,514		18.5
Senior Secured Loan (Revolver) (12)		12.99%	SOFR+	7.50%	12/14/2021	7/16/2025	82,841		82,056		81,439		0.4
							3,919,875		3,919,090		3,898,953		18.9
One GI LLC	Offices of Other Holding Companies
Senior Secured Loan (Delayed Draw)		11.95%	SOFR+	6.75%	12/13/2021	12/22/2025	861,875		851,133		802,923		3.9
Senior Secured Loan (Delayed Draw) (12)		11.95%	SOFR+	6.75%	12/13/2021	12/22/2025	454,140		447,228		422,867		2.0
Senior Secured Loan (Revolver)		11.95%	SOFR+	6.75%	12/13/2021	12/22/2025	166,667		164,615		155,267		0.8
							1,482,682		1,462,976		1,381,057		6.7

RPLF Holdings, LLC	Software Publishers
Common Equity (62,365 units) (13)					1/17/2018				—		202,875		1.0

RC Buyer, Inc.	Other Automotive Mechanical and Electrical Repair and Maintenance
Senior Secured Loan		11.84%	SOFR+	6.50%	6/24/2022	7/30/2029	1,125,000		1,086,247		1,068,750		5.2

RSA Security	Computer and Computer Peripheral Equipment and Software Merchant Wholesalers
Senior Secured Loan		13.04%	L+	7.75%	4/16/2021	4/27/2029	1,000,000		990,480		808,004		3.9

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments (unaudited)

June 30, 2023


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
RumbleOn, Inc. (11)	Other Industrial Machinery Manufacturing
Senior Secured Loan		13.75%	SOFR+	8.25%	8/31/2021	8/31/2026	$	991,603	$	955,313	$	915,580	4.4	%
Senior Secured Loan (Delayed Draw)		13.75%	SOFR+	8.25%	8/31/2021	8/31/2026	300,013		297,131		277,012		1.3
Warrants (warrants to purchase up to $150,000 in stock) (7)					8/31/2021	7/25/2023 (15)			50,082		—		—
							1,291,616		1,302,526		1,192,592		5.7
Spear Education Holdings, LLC	Professional and Management Development Training
Senior Secured Loan		12.89%	SOFR+	7.50%	2/10/2023	12/15/2027	497,500		486,054		487,079		2.3

Spring Education Group, Inc. (F/K/A SSH Group Holdings, Inc.,)	Child Day Care Services
Senior Secured Loan		13.79%	L+	8.25%	7/26/2018	7/30/2026	1,241,800		1,224,457		1,214,090		5.9

SS Acquisition, LLC (6)	Sports and Recreation Instruction
Senior Secured Loan		11.92%	SOFR+	6.77%	12/30/2021	12/30/2026	625,000		620,626		626,189		3.0
Senior Secured Loan (Delayed Draw)		12.62%	SOFR+	7.47%	12/30/2021	12/30/2026	300,000		297,474		303,000		1.5
							925,000		918,100		929,189		4.5
STS Operating, Inc.	Industrial Machinery and Equipment Merchant Wholesalers
Senior Secured Loan		13.20%	SOFR+	8.00%	5/15/2018	4/30/2026	1,593,220		1,593,205		1,593,220		7.7

The Escape Game, LLC	All other amusement and recreation industries
Senior Secured Loan		12.20%	SOFR+	7.00%	12/21/2021	12/22/2024	1,499,999		1,494,174		1,514,999		7.3
Senior Secured Loan (Revolver) (12)		12.20%	SOFR+	7.00%	12/21/2021	12/22/2024	200,000		198,359		200,000		1.0
							1,699,999		1,692,533		1,714,999		8.3
Tolemar Acquisition, Inc.	Motorcycle, Bicycle, and Parts Manufacturing
Senior Secured Loan		11.23%	L+	5.75%	10/14/2021	10/14/2026	1,322,203		1,317,834		1,287,826		6.2
Senior Secured Loan (Revolver) (12)		n/m (5)	L+	5.75%	10/14/2021	10/14/2026	—		(725)		(5,735)		—
							1,322,203		1,317,109		1,282,091		6.2
Tony's Fresh Market / Cardenas Markets	Supermarkets and Other Grocery (except Convenience) Stores
Senior Secured Loan		12.09%	SOFR+	6.75%	7/20/2022	8/1/2029	1,985,000		1,881,335		1,935,375		9.4

TruGreen Limited Partnership	Landscaping Services
Senior Secured Loan		13.77%	L+	8.50%	5/13/2021	11/2/2028	1,500,000		1,533,745		1,407,846		6.8

Total Debt and Equity Investments							$	43,959,877	$	43,181,001	$	41,861,103	202.6	%

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments (unaudited)

June 30, 2023


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
Structured Finance Securities (11)
Subordinated Notes, Mezzanine Debt and Other CLO-Related Investment
Apex Credit CLO 2020 Ltd.
Subordinated Notes (2) (14)		21.16%			11/16/2020	10/20/2031	$	3,650,000	$	3,340,308	$	2,283,332	11.1	%

Apex Credit CLO 2021 Ltd
Subordinated Notes (2) (14)		18.71%			5/28/2021	7/18/2034	1,480,000		1,228,212		969,533		4.7

Apex Credit CLO 2022-1A
Subordinated Notes (2) (14)		17.27%			4/28/2022	4/22/2033	1,892,824		1,551,806		1,246,928		6.0


CLO other (10) (14)		16.51%							17,889		24,541		0.1

Elevation CLO 2021-14 Ltd
Subordinated Notes (2) (14)		15.70%			9/21/2021	10/20/2034	1,750,000		1,445,887		1,092,062		5.3

Elevation CLO 2021-15, Ltd.
Subordinated Notes (2) (14)		16.51%			12/6/2021	1/5/2035	1,250,000		916,841		684,599		3.3

Monroe Capital MML CLO X, LTD.
Mezzanine Debt - Class E-R		13.88%	SOFR+	8.75%	4/22/2022	5/20/2034	1,000,000		953,107		934,005		4.5

Regatta II Funding
Mezzanine Debt - Class DR2		12.21%	L+	6.95%	6/5/2020	1/15/2029	800,000		798,416		748,620		3.6

Total Structured Finance Securities							$	11,822,824	$	10,252,466	$	7,983,620	38.6	%

Total Investments							$	55,782,701	$	53,433,467	$	49,844,723	241.2	%

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments (unaudited)

June 30, 2023

(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)Amortized cost reflects accretion of effective yield less any cash distributions received or entitled to be received from CLO subordinated note investments. CLO subordinated note investments are entitled to recurring distributions which are generally equal to the residual cash flow of payments received on underlying securities less contractual payments to debt holders and fund expenses.

(3)A majority of the debt investments bear interest at rates determined by reference to LIBOR (L) or SOFR, and reset monthly, quarterly, or semi-annually. For all variable-rate investments, the schedule presents the spread over LIBOR or SOFR and the interest rate as of June 30, 2023. 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 in 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 or delayed draw. The Company earns unfunded commitment fees on undrawn revolving lines of credit and delayed draw facility balances, which are reported in fee income. The Company considers undrawn amounts in the determination of fair value.

(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 June 30, 2023:


Portfolio Company	Reported Interest Rate	Interest Rate per Credit Agreement	Additional Interest per Annum
SS Acquisition, LLC	11.92%	11.39%	0.53%
SS Acquisition, LLC (Delayed Draw)	12.62%	11.39%	1.23%

(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) Fair value represents discounted cash flows associated with fees earned from CLO equity related investments.

(11) Non-qualifying assets under Section 55(a) of the 1940 Act. Qualifying assets as defined in Section 55 of the 1940 Act must represent at least 70% of the Company's assets immediately following the acquisition of any additional non-qualifying assets. As of June 30, 2023, approximately 82% of the Company's assets were qualifying assets.

(12) Subject to unfunded commitments. See Note 6.

(13) Investment held by HPCI-MB, a wholly owned subsidiary of the Company subject to corporate income tax.

(14) The interest rate disclosed on CLO subordinated note investments 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 amounts and timing of terminal principal payments at the time of estimation. The estimated yield and investment cost may ultimately not be realized.

(15) Represents expiration date of the warrants.

See Notes to Consolidated Financial Statements (unaudited).

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments

December 31, 2022


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
AIDC IntermediateCo 2, LLC	Computer Systems Design Services
Senior Secured Loan		10.44%	SOFR+	6.25%	7/8/2022	7/22/2027	$	500,000	$	489,756	$	485,701	2.2	%

Allen Media, LLC (9)	Cable and Other Subscription Programming
Senior Secured Loan		10.23%	SOFR+	5.50%	9/15/2022	2/10/2027	1,243,605		1,113,070		1,024,034		4.7

All Star Auto Lights, Inc.	Motor Vehicle Parts (Used) Merchant Wholesalers
Senior Secured Loan		12.00%	L+	7.25%	12/19/2019	8/20/2025	5,229,715		5,176,429		5,182,696		23.5

Astro One Acquisition Corporation	Other Miscellaneous Nondurable Goods Merchant Wholesalers
Senior Secured Loan		13.23%	L+	8.50%	1/31/2022	9/14/2029	1,000,000		893,372		748,798		3.4

Asurion, LLC (9)	Communication Equipment Repair and Maintenance
Senior Secured Loan		9.63%	L+	5.25%	6/28/2022	1/31/2028	2,000,000		1,670,959		1,571,660		7.1

Atlantis Holdings, LLC (9)	Electronics and Appliance Stores
Senior Secured Loan		11.83%	SOFR+	7.25%	3/29/2022	3/31/2029	1,663,158		1,607,427		1,620,332		7.4

BayMark Health Services, Inc.	Outpatient Mental Health and Substance Abuse Centers
Senior Secured Loan		13.23%	L+	8.50%	6/10/2021	6/11/2028	1,325,758		1,310,236		1,298,663		5.9
Senior Secured Loan (Delayed Draw) (12)		13.23%	L+	8.50%	6/10/2021	6/11/2028	357,657		348,642		342,066		1.6
							1,683,415		1,658,878		1,640,729		7.5
BCPE North Star US Holdco 2, Inc. (F/K/A Dessert Holdings)	Ice Cream and Frozen Dessert Manufacturing
Senior Secured Loan		11.98%	L+	7.25%	2/2/2022	6/8/2029	833,333		820,643		770,191		3.5

Boca Home Care Holdings, Inc.	Services for the Elderly and Persons with Disabilities
Senior Secured Loan (Delayed Draw)		11.33%	SOFR+	6.50%	2/25/2022	2/25/2027	954,839		946,911		920,128		4.2
Senior Secured Loan (Revolver) (12)		n/m (5)	SOFR+	6.50%	2/25/2022	2/25/2027	—		(1,071)		(4,691)		—
Common Equity (129 Class A units) (7)					2/25/2022				129,032		109,758		0.5
							954,839		1,074,872		1,025,195		4.7

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments

December 31, 2022


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
Common Equity (1,362 Common shares) (7)					3/27/2020				$	46,403	$	2,099	—	%

Convergint Technologies	Security Systems Services (except Locksmiths)
Senior Secured Loan		11.07%	SOFR+	6.75%	9/28/2018	3/30/2029	$	2,068,608	2,024,310		2,008,741		9.1

DRS Imaging Services, LLC	Data Processing, Hosting, and Related Services
Common Equity (115 units) (7) (13)					3/8/2018				115,154		159,000		0.7

Eblens Holdings, Inc.	Shoe Store
Subordinated Loan (17)		13.00% PIK	N/A		7/13/2017	10/3/2025	260,270		242,365		58,092		0.3
Subordinated Loan (17)		13.00% PIK	N/A		7/13/2017	10/3/2025	260,270		242,365		—		—
Common Equity (19 units) (12)					10/3/2022				50,000		—		—
							520,540		534,730		58,092		0.3
Electrical Components International, Inc.	Current-Carrying Wiring Device Manufacturing
Senior Secured Loan		12.88%	L+	8.50%	4/8/2021	6/26/2026	1,322,722		1,208,792		1,247,042		5.7

Excelin Home Health, LLC	Home Health Care Services
Senior Secured Loan		14.23% cash / 1.25% PIK	L+	9.50%	10/25/2018	9/30/2025	1,006,368		990,587		938,125		4.3

Honor HN Buyer Inc	Services for the Elderly and Persons with Disabilities
Senior Secured Loan		10.48%	SOFR+	5.75%	10/15/2021	10/15/2027	852,027		838,448		838,121		3.8
Senior Secured Loan (Delayed Draw) (12)		10.48%	SOFR+	5.75%	10/15/2021	10/15/2027	248,319		236,344		231,881		1.1
Senior Secured Loan (Revolver) (12)		n/m (5)	SOFR+	5.75%	10/15/2021	10/15/2027	—		(1,580)		(1,616)		—
							1,100,346		1,073,212		1,068,386		4.9
Idera	Computer and Computer Peripheral Equipment and Software Merchant Wholesalers
Senior Secured Loan		10.50%	L+	6.75%	1/27/2022	3/2/2029	1,000,000		1,000,000		933,090		4.2

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments

December 31, 2022


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
Inergex Holdings	Other Computer Related Services
Senior Secured Loan (2)		12.15% cash / 2.00% PIK	L+	7.00%	10/1/2018	10/1/2024	$	991,189	$	977,912	$	991,189	4.5	%
Senior Secured Loan (Revolver) (12)		n/m (5)			10/1/2018	10/1/2024	—		(4,894)		—		—
							991,189		973,018		991,189		4.5
KNS Acquisition Corp.	Electronic Shopping and Mail-Order Houses
Senior Secured Loan		10.42%	L+	6.25%	7/26/2021	4/21/2027	968,750		966,834		930,764		4.1

LogMeIn (9)	Data Processing, Hosting, and Related Services
Senior Secured Loan		9.14%	L+	4.75%	9/28/2022	8/31/2027	1,392,893		979,396		902,595		4.0

Metasource	All Other Business Support Services
Senior Secured Loan		10.69%	SOFR+	6.25%	5/17/2022	5/17/2027	694,750		688,674		647,898		2.9
Senior Secured Loan (12)		n/m (5)	SOFR+	6.25%	5/17/2022	5/17/2027	—		(2,060)		(20,231)		(0.1)
							694,750		686,614		627,667		2.8
Milrose Consultants, LLC	Administrative Management and General Management Consulting Services
Senior Secured Loan		11.33%	SOFR+	6.50%	7/16/2019	7/16/2025	3,849,947		3,849,946		3,782,968		17.2
Senior Secured Loan (Revolver) (12)		11.33%	SOFR+	6.50%	12/14/2021	7/16/2025	82,696		81,721		77,901		0.4
							3,932,643		3,931,667		3,860,869		17.6
One GI LLC (12)	Offices of Other Holding Companies
Senior Secured Loan		11.13%	L+	6.75%	12/13/2021	12/22/2025	866,250		853,318		812,176		3.7
Senior Secured Loan (Delayed Draw) (12)		11.14%	L+	6.75%	12/13/2021	12/22/2025	455,278		446,052		426,667		1.9
Senior Secured Loan (Revolver) (12)		n/m (5)	L+	6.75%	12/13/2021	12/22/2025	—		(2,463)		(10,404)		—
							1,321,528		1,296,907		1,228,439		5.6
RC Buyer, Inc.	Other Automotive Mechanical and Electrical Repair and Maintenance
Senior Secure Loan		11.23%	L+	6.50%	6/24/2022	7/30/2029	1,125,000		1,083,088		1,064,250		4.8

RPLF Holdings, LLC	Software Publishers
Common Equity (62,365 Class A units) (7) (13)					1/17/2018				88,917		73,264		0.3

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments

December 31, 2022


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
RSA Security	Computer and Computer Peripheral Equipment and Software Merchant Wholesalers
Senior Secured Loan		12.11%	L+	7.75%	4/16/2021	4/27/2029	$	1,000,000	$	989,670	$	752,712	3.4	%

RumbleOn, Inc. (11)	Other Industrial Machinery Manufacturing
Senior Secured Loan		12.98%	L+	8.25%	8/31/2021	8/31/2026	996,314		954,147		904,355		4.1
Senior Secured Loan (Delayed Draw) (12)		12.98%	L+	8.25%	8/31/2021	8/31/2026	301,435		297,288		261,325		1.2
Warrants (warrants to purchase up to $150,000 in common stock) (7)					8/31/2021	7/25/2023 (16)			50,082		277		—
							1,297,749		1,301,517		1,165,957		5.3
Spring Education Group, Inc. (F/K/A SSH Group Holdings, Inc.,)	Child Day Care Services
Senior Secured Loan		12.98%	L+	8.25%	7/26/2018	7/30/2026	1,241,800		1,221,651		1,199,701		5.4

SS Acquisition, LLC (6)	Sports and Recreation Instruction
Senior Secured Loan		11.10%	SOFR+	6.85%	12/30/2021	12/30/2026	625,000		620,006		613,871		2.8
Senior Secured Loan (Delayed Draw) (12)		11.84%	SOFR+	7.59%	12/30/2021	12/30/2026	250,000		247,618		243,323		1.1
							875,000		867,624		857,194		3.9
STS Operating, Inc.	Industrial Machinery and Equipment Merchant Wholesalers
Senior Secured Loan		12.38%	L+	8.00%	5/15/2018	4/30/2026	1,593,220		1,593,203		1,593,220		7.2

The Escape Game, LLC	All other amusement and recreation industries
Senior Secured Loan		11.38%			12/21/2021	12/22/2024	1,166,666		1,166,666		1,178,333		5.4
Senior Secured Loan (Revolver) (12)		n/m (5)			12/21/2021	12/22/2024	—		(2,191)		—		—
							1,166,666		1,164,475		1,178,333		5.4
Thryv (9)	Directory and Mailing List Publishers
Senior Secured Loan		12.88%	L+	8.50%	2/18/2021	3/1/2026	1,838,618		1,807,811		1,816,407		8.2

Tolemar Acquisition, Inc.	Motorcycle, Bicycle, and Parts Manufacturing
Senior Secured Loan		9.32%	L+	5.75%	10/14/2021	10/14/2026	1,328,932		1,323,878		1,328,932		6.0
Senior Secured Loan (Revolver) (12)		12.25%	PRIME+	4.75%	10/14/2021	10/14/2026	37,500		36,665		37,500		0.2
							1,366,432		1,360,543		1,366,432		6.2

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments

December 31, 2022


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
Tony's Fresh Market	Supermarkets and Other Grocery (except Convenience) Stores
Senior Secured loan		11.44%	SOFR+	6.75%	7/20/2022	8/1/2029	$	1,995,000	$	1,882,330	$	1,844,130	8.4	%

TruGreen Limited Partnership	Landscaping Services
Senior Secured Loan		12.91%	L+	8.50%	5/13/2021	11/2/2028	1,500,000		1,536,875		1,408,707		6.4

Total Debt and Equity Investments							$	46,427,888	$	45,230,736	$	43,345,742	196.9	%

Structured Finance Securities (11)
Apex Credit CLO 2020
Subordinated Notes (14) (15)		19.26%			11/16/2020	10/20/2031	$	3,650,000	$	3,266,125	$	2,633,996	11.9	%

Apex Credit CLO 2021 Ltd
Subordinated Notes (14) (15)		18.54%			5/28/2021	7/18/2034	1,480,000		1,234,427		1,053,101		4.8

Apex Credit CLO 2022-1A
Subordinated Notes (14) (15)		16.48%			4/28/2022	4/22/2033	1,892,824		1,480,489		1,519,519		6.9

CLO other (10)		16.95%							19,692		26,172		0.1

Elevation CLO 2021-14 Ltd
Subordinated Notes (14) (15)		16.05%			9/21/2021	10/20/2034	1,750,000		1,444,114		1,272,272		5.8

Elevation CLO 2021-15, Ltd.
Subordinated Notes (14) (15)		16.95%			12/6/2021	1/5/2035	1,250,000		906,083		808,448		3.7

Monroe Capital MML CLO X, LTD.
Mezzanine Debt - Class E-R		13.03%	SOFR+	8.75%	4/22/2022	5/20/2034	1,000,000		945,055		873,648		3.9

Regatta II Funding
Mezzanine bond - Class DR2		11.03%	L+	6.95%	6/5/2020	1/15/2029	800,000		777,931		737,633		3.4

Total Structured Finance Securities							$	11,822,824	$	10,073,915	$	8,924,790	40.5	%

Total Investments							$	58,250,712	$	55,304,651	$	52,270,532	237.4	%

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments

December 31, 2022

(1) 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. Equity ownership may be held in shares or units of companies affiliated with the portfolio company.

(2) The interest rate on this investment 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 this investment. The following table provides additional details on this PIK investment, including the maximum annual PIK interest rate allowed as of December 31, 2022:

Portfolio Company

Investment Type

Range of PIK
Option

Range of Cash
Option

Maximum PIK
Rate Allowed

Inergex Holdings, LLC

Senior Secured Loan

0% to 2.00%

12.15% to 14.15%

2.00%

(3) A majority of the debt investments bear interest at rates determined by reference to LIBOR (L) or SOFR, and reset monthly, quarterly, or semi-annually. For each variable-rate investment, the Company has provided the spread over the reference rate and current interest rate in effect at December 31, 2022.

(4) Unless otherwise noted in 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 or delayed draw loan. The Company generally earns unfunded commitment fees on undrawn revolving lines of credit and delayed draw term loan balances, which are reported in fee income.

(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 December 31, 2022:


Portfolio Company	Reported Interest Rate	Interest Rate per Credit Agreement	Additional Interest per Annum
SS Acquisition, LLC	11.10%	10.49%	0.61%
SS Acquisition, LLC (Delayed Draw)	11.84%	10.49%	1.35%

(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) Fair value represents discounted cash flows associated with fees earned from CLO equity related investments.

(11) Non-qualifying assets under Section 55(a) of the 1940 Act. Qualifying assets as defined in Section 55 of the 1940 Act must represent at least 70% of the Company's assets immediately following the acquisition of any additional non-qualifying assets. As of December 31, 2022, approximately 81% of the Company's assets were qualifying assets.

(12) Subject to unfunded commitments. The Company considers undrawn amounts in the determination of fair value on revolving lines of credit and delayed draw term loans. See Note 6.

(13) Investment held by HPCI-MB, a wholly owned subsidiary subject to corporate income tax.

(14) The rate disclosed on CLO subordinated note investments 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 amounts and timing of terminal principal payments at the time of estimation. The estimated yield and investment cost may ultimately not be realized.

Hancock Park Corporate Income, Inc.

Consolidated Schedule of Investments

December 31, 2022

(15) Amortized cost reflects accretion of effective yield less any cash distributions received or entitled to be received from CLO subordinated note investments. CLO subordinated note investments are entitled to recurring distributions, which are generally equal to the residual cash flow of payments received on underlying securities less contractual payments to debt holders and fund expenses.

(16) Represents expiration date of the warrants.

(17) Investment was on non-accrual status as of December 31, 2022, meaning the Company has suspended recognition of all or a portion of income on the investment. See Note 4 for further details.

See Notes to Consolidated Financial Statements (unaudited).

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements (unaudited)

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. In addition, the Company may make investments in Structured Finance Securities.

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. 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 Structured Finance Securities. Additionally, OFS Advisor serves as the adviser to separately managed accounts and sub-adviser to investment companies managed by an affiliate. From August 3, 2020 through February 1, 2022, CIM Capital, an affiliate of the Company, OFS Advisor and CCO, and a registered investment adviser, served as the Company’s sub-adviser.

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. Since August 3, 2020, CCO has served as the dealer manager in the Offering. From time to time, the Company may enter into agreements with placement agents to sell, distribute and market shares of its common stock in the Offering. The Company may pay certain placement or “finder’s” fees to placement agents engaged by the Company in connection with the Offering. In addition, investors who are purchasing shares through a placement agent may be required to pay a fee or commission directly to the placement agent.

The Company may make investments through HPCI-MB, a wholly owned and consolidated subsidiary taxed under subchapter C of the Code that generally holds the Company’s equity investments in portfolio companies 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 GAAP 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 consolidated 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. These consolidated 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, 2022, filed on March 17, 2023. 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, 2022.

Reclassifications: Certain prior period amounts have been reclassified to conform to the current period presentation in the consolidated financial statements and the accompanying notes thereto. Reclassifications did not impact net increase (decrease) in net assets resulting from operations, total assets, total liabilities or total net assets, or consolidated statements of changes in net assets and consolidated statements of cash flows classifications.

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.

Cash: The Company’s cash balances are maintained with a member bank of the Federal Deposit Insurance Corporation (“FDIC”) and at times, such balances exceed the FDIC insurance limit. The Company does not believe its cash balances are exposed to any significant credit risk. Cash balances are held in US Bank N.A. money market deposit accounts.

Concentration of credit risk: Aside from the Company’s investments, financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits at financial institutions. At various times during

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements (unaudited)

the year, the Company exceeds the federally insured limit. The Company places cash deposits only with high credit quality institutions that it believes will mitigate the risk of loss due to credit risk. The amount of loss due to credit risk from its investments, if borrowers completely fail to perform according to the terms of the contracts, is equal to the sum of the Company’s recorded investments and the unfunded commitments disclosed in Note 6.

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. 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’s services under the Investment Advisory Agreement are not exclusive to the Company 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 the Company are not impaired. OFS Advisor also serves as the investment adviser to OFS Capital and OCCI.

OFS Advisor receives fees for providing services to the Company, 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.

The incentive fee has two parts. The first part of the incentive fee (“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. The Income Incentive Fee is calculated before the determination of any operating expense limitation under the ESAs, as further described below.

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 at the end of such year, less all previous amounts paid in respect of the Capital Gain Fee. Since inception through June 30, 2023, the Company has not made a Capital Gain Fee payment.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements (unaudited)

The Company accrues the Capital Gain Fee if, on a cumulative basis, the sum of net realized capital gains (losses) plus net unrealized appreciation (depreciation) is positive. An accrued Capital Gain Fee relating to net unrealized appreciation is deferred, and not due to OFS Advisor, until the close of the year in which such gains are realized. If, on a cumulative basis, the sum of net realized capital gains (losses) 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 Gain 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 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. The Board most recently approved the continuation of the Investment Advisory Agreement on April 5, 2023. 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.

Sub-Advisory Agreement: Effective August 3, 2020, OFS Advisor engaged CIM Capital to serve the Company as sub-adviser in accordance with the Sub-Advisory Agreement. Pursuant to the terms of the Sub-Advisory Agreement, CIM Capital evaluated and advised the Company on private capital market strategy, including market trends and terms, provided financial and strategic planning advice and analysis, interpreted market demand for products, assisted in establishing the Company's operational readiness and selecting and negotiating engagements with third-party service providers, and coordinated the dissemination of customary information to interested parties. On February 2, 2022, OFS Advisor and CIM Capital entered into an agreement to terminate the Sub-Advisory Agreement.

Dealer Manager Agreement: Pursuant to the Dealer Manager Agreement, CCO provides certain sales, promotional and marketing services to the Company in connection with the Offering. The Company pays CCO an aggregate dealer manager fee of an amount up to 3.0% of the gross proceeds from sales of the Offering. CCO may, in its discretion, reallow a portion of the dealer manager fee to participating broker-dealers in support 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. The Board most recently approved the continuation of the Administration Agreement on April 5, 2023. 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’s 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 June 30, 2023, affiliates of OFS Advisor held 74,084 shares of common stock, which is approximately 3.8% of the Company’s outstanding shares of common stock.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements (unaudited)

Expenses recognized under agreements with OFS Advisor, CCO and OFS Services and distributions paid to affiliates for the three and six months ended June 30, 2023 and 2022 are presented below:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Management fees	$	163,288	$	150,249	$	328,008	$	297,262
Incentive fees	147,016		—		271,719		—
Administrative fees	216,563		242,110		453,312		469,827
Dealer manager fees	1,500		27,000		7,100		29,700
Reimbursements of offering and Contractual Issuer Expenses	2,250		13,500		10,650		14,850
Distributions paid to affiliates	18,803		18,803		37,605		37,605

Expense Limitation Agreements:

The table below presents the contractual agreements between the Company and OFS Advisor and affiliates that provide or provided expense limitation for the period August 3, 2020 to date. The expense limitation clauses in these agreements were substantially identical, and as of June 30, 2023, all amounts are conditionally reimbursable to OFS Advisor for three years from the date such support is provided.

Offering Costs and Contractual Issuer Expenses (collectively, the “Advisory Agreements”)

All Other
Operating Expenses
(collectively, the “ESAs”)

From August 3, 2020 to February 1, 2022

Sub-Advisory Agreement

Amended Expense Support Agreement

From February 2, 2022

Investment Advisory Agreement

Second Amended Expense Support Agreement

OFS Advisor’s obligation to provide expense support to the Company can be terminated at any time.

Expense limitations provided under the Advisory Agreements and ESAs for the three and six months ended June 30, 2023 and 2022, are presented below:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net offering costs and Contractual Issuer Expenses limitations under the Advisory Agreements	$	79,361	$	30,054	$	151,533	$	43,928
Operating expense limitations under the ESAs	—		—		108,548		134,376
Total expense limitations	$	79,361	$	30,054	$	260,081	$	178,304

As of June 30, 2023 and December 31, 2022, the Company is conditionally obligated to reimburse OFS Advisor for aggregate expense support as follows:


	June 30, 2023		December 31, 2022
Unreimbursed costs under the Advisory Agreements	$	630,389	$	650,768
Unreimbursed operating expense support under the ESAs	2,280,708		2,932,038
Total conditional reimbursement obligation under expense limitation agreements	$	2,911,097	$	3,582,806

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements (unaudited)

Offering Costs and Contractual Issuer Expense Limitations: The Company is conditionally liable for offering costs and Contractual Issuer Expenses that OFS Advisor and affiliates have incurred, or OFS Advisor expects to incur on its behalf, throughout the Offering. The Investment Advisory Agreement entitles OFS Advisor 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.

Unreimbursed offering costs and Contractual Issuer Expenses subject to conditional reimbursement as of June 30, 2023, are summarized below:

Period Incurred

Unreimbursed
Total

Expiration of Reimbursement

Eligibility(1)

Three months ended September 30, 2020

24,300

September 30, 2023

Three months ended December 31, 2020

7,722

December 31, 2023

Year ended December 31, 2021

57,588

December 31, 2024

Year ended December 31, 2022

375,824

December 31, 2025

Six months ended June 30, 2023

164,955

June 30, 2026

Total unreimbursed offering costs and Contractual Issuer Expenses

630,389

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

All Other Operating Expenses: All other operating expenses, not separately limited under the Advisory Agreements, are limited under the Second Amended Expense Support Agreement to provide that no distribution by the Company is deemed to be a return of capital contributed by its stockholders. For additional details, see the Company’s Annual Report on Form 10 K for the year ended December 31, 2022.

Unreimbursed support for operating expenses provided under the ESAs and conditions for reimbursement to OFS Advisor as of June 30, 2023, are 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 September 30, 2020	$	452,480	6.7%	6.2%	7.2%	September 30, 2023
Three months ended December 31, 2020	404,258		6.6%	6.2%	7.2%	December 31, 2023
Three months ended March 31, 2021	253,800		6.5%	6.8%	7.2%	March 31, 2024
Three months ended June 30, 2021	264,533		7.6%	6.8%	7.1%	June 30, 2024
Three months ended September 30, 2021	652,774		6.8%	6.8%	7.1%	September 30, 2024
Three months ended December 31, 2021(2)	—		n/a	n/a	n/a	n/a
Three months ended March 31, 2022	134,376		7.2%	8.1%	7.0%	March 31, 2025
Three months ended June 30, 2022(2)	—		n/a	n/a	n/a	n/a
Three months ended September 30, 2022(2)	—		n/a	n/a	n/a	n/a
Three months ended December 31, 2022	9,939		8.5%	8.1%	7.8%	December 31, 2025
Three months ended March 31, 2023	108,548		10.2%	n/a(3)	8.0%	March 31, 2026
Three months ended June 30, 2023(2)	—		n/a	n/a	n/a	n/a
Total unreimbursed operating expense limitations provided under the ESAs	$	2,280,708

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements (unaudited)

(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) OFS Advisor was not required to provide the Company support for operating expenses.

(3) 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, 2023.

As of June 30, 2023, the Company has not been required to reimburse OFS Advisor for a previously provided operating expense support payment.

Note 4. Investments

As of June 30, 2023, the Company had loans to 30 portfolio companies, of which 100% were senior secured loans at fair value. The Company also had equity investments in five portfolio companies and investments in seven Structured Finance Securities. As of June 30, 2023, the Company’s 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	$	42,805,866	80.1	%	207.2	%	$	41,454,498	83.2	%	200.6	%

Preferred equity investments	34,464		0.1		0.2		34,483		0.1		0.2
Common equity and warrant investments	340,671		0.6		1.6		372,122		0.7		1.8
Total Portfolio Company Investments	43,181,001		80.8		209.0		41,861,103		84.0		202.6
Structured Finance Securities	10,252,466		19.2		49.6		7,983,620		16.0		38.6
Total investments	$	53,433,467	100.0	%	258.6	%	$	49,844,723	100.0	%	241.2	%

As of June 30, 2023, all of the Company’s debt and equity investments were domiciled in the United States, while its Structured Finance Securities were domiciled in the Cayman Islands. These Structured Finance Securities generally hold underlying portfolios of investments in companies 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
All Other Business Support Services	$	684,573	1.3	%	3.3	%	$	611,775	1.2	%	3.0	%
Security Systems Services (except Locksmiths)	2,027,827		3.8		9.8		2,039,441		4.1		9.9

Arts, Entertainment, and Recreation
All Other Amusement and Recreation Industries	1,692,533		3.2		8.2		1,714,999		3.4		8.3
Landscaping Services	1,533,745		2.9		7.4		1,407,846		2.8		6.8


Education Services
Sports and Recreation Instruction	918,100		1.7		4.4		929,189		1.9		4.5
Professional and Management Development Training	486,054		0.9		2.4		487,079		1.0		2.4



Health Care and Social Assistance
Child Day Care Services	1,224,457		2.3		5.9		1,214,090		2.4		5.9

Home Health Care Services	995,496		1.9		4.8		909,415		1.8		4.4

Outpatient Mental Health and Substance Abuse Centers	1,665,464		3.1		8.1		1,654,796		3.3		7.9
Services for the Elderly and Persons with Disabilities	2,881,456		5.4		13.9		2,882,515		5.8		14.0

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements (unaudited)


			Percentage of Total						Percentage of Total
	Amortized Cost		Amortized Cost		Net Assets		Fair Value		Fair Value		Net Assets
Information
Cable and Other Subscription Programming	$	1,123,006	2.1	%	5.4	%	$	1,071,956	2.2	%	5.2	%
Data Processing, Hosting, and Related Services	1,133,277		2.1		5.5		923,693		1.9		4.5

Software Publishers	—		—		—		202,875		0.4		1.0
Management of Companies and Enterprises
Offices of Other Holding Companies	1,462,976		2.7		7.1		1,381,057		2.8		6.7
Manufacturing

Current-Carrying Wiring Device Manufacturing	1,225,002		2.3		5.9		1,254,711		2.5		6.1

Ice Cream and Frozen Dessert Manufacturing	821,620		1.5		4.0		752,512		1.5		3.6

Motorcycle, Bicycle, and Parts Manufacturing	1,317,109		2.5		6.4		1,282,091		2.6		6.2
Other Industrial Machinery Manufacturing	1,302,526		2.4		6.3		1,192,592		2.4		5.8




Other Services (except Public Administration)



Other Automotive Mechanical and Electrical Repair and Maintenance	1,086,247		2.0		5.3		1,068,750		2.1		5.2
Professional, Scientific, and Technical Services
Administrative Management and General Management Consulting Services	3,919,090		7.3		19.0		3,898,953		7.8		18.9

Computer Systems Design Services	488,415		0.9		2.4		485,461		1		2.3


Other Computer Related Services	1,134,420		2.1		5.5		1,147,439		2.3		5.6



Public Administration
Other Justice, Public Order, and Safety Activities	46,403		0.1		0.2		2,477		—		—
Retail Trade

Electronics and Appliance Stores	1,530,237		2.9		7.4		1,565,132		3.1		7.6
Electronic Shopping and Mail-Order Houses	954,577		1.8		4.6		898,209		1.8		4.3


Supermarkets and Other Grocery (except Convenience) Stores	1,881,335		3.5		9.1		1,935,375		3.9		9.4


Wholesale Trade

Computer and Computer Peripheral Equipment and Software Merchant Wholesalers	1,990,480		3.7		9.6		1,779,697		3.6		8.6

Industrial Machinery and Equipment Merchant Wholesalers	1,593,205		3.0		7.7		1,593,220		3.2		7.7

Motor Vehicle Parts (Used) Merchant Wholesalers	5,160,115		9.7		25.0		5,202,899		10.5		25.0
Other Miscellaneous Nondurable Goods Merchant Wholesalers	901,256		1.7		4.4		370,859		0.7		1.8

Total Portfolio Company Investments	$	43,181,001	80.8	%	209.0	%	$	41,861,103	84.0	%	202.6	%
Structured Finance Securities	10,252,466		19.2		49.6		7,983,620		16.0		38.6
Total investments	$	53,433,467	100.0	%	258.6	%	$	49,844,723	100.0	%	241.2	%

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements (unaudited)

As of December 31, 2022, the Company had loans to 32 portfolio companies, of which 99.9% were senior secured loans and 0.1% were subordinated loans, at fair value. The Company also had equity investments in six portfolio companies and seven investments in Structured Finance Securities.

As of December 31, 2022, the Company's 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	$	44,266,418	80.0	%	201.0	%	$	42,943,250	82.2	%	195.0	%
Subordinated debt investments	484,730		0.9		2.2		58,092		0.1		0.3

Common equity and warrant investments	479,588		0.9		2.2		344,400		0.7		1.6
Total debt and equity investments	45,230,736		81.8		205.4		43,345,742		83.0		196.9
Structured Finance Securities	10,073,915		18.2		45.8		8,924,790		17.0		40.5
Total investments	$	55,304,651	100.0	%	251.2	%	$	52,270,532	100.0	%	237.4	%

As of December 31, 2022, all of the Company’s debt and equity investments were domiciled in the United States, while its Structured Finance Securities were domiciled in the Cayman Islands. These Structured Finance Securities generally hold underlying portfolios of investments in companies 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
All Other Business Support Services	$	686,614	1.2	%	3.1	%	$	627,667	1.2	%	2.9	%
Landscaping Services	1,536,875		2.8		7.0		1,408,707		2.7		6.4
Security Systems Services (except Locksmiths)	2,024,310		3.7		9.2		2,008,741		3.8		9.1

Arts, Entertainment, and Recreation
All other amusement and recreation industries	1,164,476		2.1		5.3		1,178,333		2.3		5.4


Education Services
Sports and Recreation Instruction	867,624		1.6		3.9		857,194		1.6		3.9
Health Care and Social Assistance
Child Day Care Services	1,221,651		2.2		5.5		1,199,701		2.3		5.4

Home Health Care Services	990,587		1.8		4.5		938,125		1.8		4.3

Outpatient Mental Health and Substance Abuse Centers	1,658,878		3.0		7.5		1,640,729		3.1		7.5
Services for the Elderly and Persons with Disabilities	2,148,085		3.9		9.8		2,093,582		4.0		9.5


Information
Cable and Other Subscription Programming	1,113,070		2.0		5.1		1,024,034		2.0		4.7
Data Processing, Hosting, and Related Services	1,094,550		2.0		5.0		1,061,595		2.0		4.8
Directory and Mailing List Publishers	1,807,811		3.3		8.2		1,816,407		3.5		8.2
Software Publishers	88,917		0.2		0.4		73,264		0.1		0.3



Management of Companies and Enterprises
Offices of Other Holding Companies	1,296,908		2.3		5.9		1,228,439		2.4		5.6
Manufacturing

Current-Carrying Wiring Device Manufacturing	1,208,792		2.2		5.5		1,247,042		2.4		5.7

Ice Cream and Frozen Dessert Manufacturing	820,643		1.5		3.7		770,191		1.5		3.5

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements (unaudited)


			Percentage of Total						Percentage of Total
	Amortized Cost		Amortized Cost		Net Assets		Fair Value		Fair Value		Net Assets
Motorcycle, Bicycle, and Parts Manufacturing	$	1,360,544	2.5	%	6.2	%	$	1,366,432	2.7	%	6.2	%
Other Industrial Machinery Manufacturing	1,301,517		2.4		5.9		1,165,958		2.2		5.3







Other Services (except Public Administration)


Communication Equipment Repair and Maintenance	1,670,959		3.0		7.6		1,571,660		3.0		7.1
Other Automotive Mechanical and Electrical Repair and Maintenance	1,083,088		2.0		4.9		1,064,250		2.0		4.8
Professional, Scientific, and Technical Services
Administrative Management and General Management Consulting Services	3,931,667		7.0		17.9		3,860,868		7.4		17.5
Computer Systems Design Services	489,756		0.9		2.2		485,701		0.9		2.2
Other Computer Related Services	973,017		1.8		4.4		991,189		1.9		4.5

Public Administration
Other Justice, Public Order, and Safety Activities	46,403		0.1		0.2		2,099		—		—
Retail Trade

Electronics and Appliance Stores	1,607,427		2.8		7.3		1,620,332		3.1		7.4
Electronic Shopping and Mail-Order Houses	966,834		1.7		4.4		930,764		1.8		4.2

Shoe Store	534,730		1.0		2.4		58,092		0.1		0.3
Supermarkets and Other Grocery (except Convenience) Stores	1,882,330		3.4		8.5		1,844,130		3.5		8.4


Wholesale Trade

Computer and Computer Peripheral Equipment and Software Merchant Wholesalers	1,989,670		3.6		9.0		1,685,802		3.3		7.7
Industrial Machinery and Equipment Merchant Wholesalers	1,593,203		2.9		7.2		1,593,220		3.0		7.2

Motor Vehicle Parts (Used) Merchant Wholesalers	5,176,429		9.3		23.5		5,182,696		9.9		23.5
Other Miscellaneous Nondurable Goods Merchant Wholesalers	893,370		1.6		4.1		748,797		1.4		3.4

Total debt and equity investments	$	45,230,736	81.8	%	205.4	%	$	43,345,742	83.0	%	196.9	%
Structured Finance Securities	10,073,915		18.2		45.8		8,924,790		17.0		40.5
Total investments	$	55,304,651	100.0	%	251.2	%	$	52,270,532	100.0	%	237.4	%

Non-Accrual Loans: Management reviews, for placement on non-accrual status, all loans that become past due on principal and interest, and/or when there is reasonable doubt that principal, cash interest, or PIK interest will be collected. When a loan is placed on non-accrual status, unpaid interest is credited to income and reversed. Additionally, Net Loan Fees are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments subsequently received on non-accrual investments may be recognized as income or applied to principal depending upon management’s judgment. 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, in the judgment of management, the investments are estimated to be fully collectible as to all principal and interest. As of June 30, 2023, the Company had no loans on non-accrual status, and as of December 31, 2022, the aggregate amortized cost and fair value of loans on non-accrual status with respect to all interest and Net Loan Fee amortization was $484,730 and $58,092, respectively.

Portfolio Concentration: As of June 30, 2023 and December 31, 2022, approximately 22% and 22%, respectively, of the Company’s net assets were comprised of Structured Finance Securities managed by a single adviser.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements (unaudited)

As of June 30, 2023, the Company’s senior secured debt investment in All Star Auto Lights, Inc. accounted for 10% and 25% of its total portfolio at fair value and its total net assets, respectively.

As of June 30, 2023, the Company’s senior secured debt investment in Milrose Consultants, LLC accounted for 8% and 19% of its total portfolio at fair value and its total net assets, respectively.

Note 5. Fair Value of Financial Instruments

The Company’s investments are carried at fair value and determined in accordance with a documented valuation policy that is applied in a consistent manner. On September 7, 2022, pursuant to Rule 2a-5 of the 1940 Act (“Rule 2a-5”), the Board designated OFS Advisor as the valuation designee to perform fair value determinations relating to the Company’s investments, commencing with the quarter ended September 30, 2022, and, as prescribed in Rule 2a-5, the Board maintains oversight of OFS Advisor in its capacity as valuation designee.

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) 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 management to exercise significant judgment or estimation. 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 3, and to a lesser extent Level 2, 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. The following table presents the Company’s transfers of Level 2 and Level 3 debt investments for the three and six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Transfers from Level 2 to Level 3	$	808,004	$	947,888	$	—	$	—
Transfers from Level 3 to Level 2	—		—		—		—

Transfers between levels during the reporting periods were due to availability of reliable Indicative Prices in those periods.

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 as a result of economic and political developments, including impacts from rising interest rates and elevated inflation rates, the ongoing war between Russia and Ukraine, instability in the U.S. and international banking systems, the risk of recession and related market volatility. Market risk is directly impacted by the volatility and liquidity in the markets in which certain investments are traded and can affect the fair value of the Company's investments.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements (unaudited)

The following tables present the Company's investment portfolio measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022, respectively:


Security	Level 1		Level 2		Level 3		Fair Value as of June 30, 2023
Debt investments	$	—	$	3,510,903	$	37,943,595	$	41,454,498
Equity investments	—		—		406,605		406,605
Structured Finance Securities	—		—		7,983,620		7,983,620
	$	—	$	3,510,903	$	46,333,820	$	49,844,723


Security	Level 1		Level 2		Level 3		Fair Value as of December 31, 2022
Debt investments	$	—	$	6,935,028	$	36,066,314	$	43,001,342
Equity investments	—		—		344,400		344,400
Structured Finance Securities	—		—		8,924,790		8,924,790
	$	—	$	6,935,028	$	45,335,504	$	52,270,532

The following tables provide quantitative information about valuation techniques and the Company’s unobservable inputs to its Level 3 fair value measurements as of June 30, 2023 and December 31, 2022. In addition to the techniques and unobservable inputs noted in the tables below and, in accordance with OFS Advisor’s valuation policy, OFS Advisor, as valuation designee, may also use other valuation techniques and methodologies when determining the fair value measurements of the Company’s investment assets.

Fair Value as of June 30, 2023

Valuation techniques

Unobservable input

Range
(Weighted average)

Debt investments:

Senior secured

37,572,736

Discounted cash flow

Discount rates

10.41% - 51.91% (14.15%)

Senior secured

370,859

Market approach

Revenue multiples

1.50x - 1.50x (1.50x)

Structured Finance Securities:

Subordinated notes and other CLO equity related investments(1)

6,300,995

Discounted cash flow

Discount rates

9.68% - 43.00% (31.77%)

Constant default rate

2.00% - 2.00% (2.00%)

Recovery rate

65.00% - 65.00% (65.00%)

Mezzanine debt

1,682,625

Discounted cash flow

Discount margin

8.95% - 10.25% (9.67%)

Constant default rate

2.00% - 3.00% (2.56%)

Recovery rate

65.00% - 65.00% (65.00%)

Equity investments:

Preferred equity

34,483

Market approach

EBITDA multiples

8.00x - 8.00x (8.00x)

Common equity and warrants

372,122

Market approach

EBITDA multiples

5.34x - 17.00x (12.73x)

46,333,820

(1) The cash flows utilized in the discounted cash flow calculations assume: (i) immediate liquidation of (a) certain distressed investments and (b) all investments currently in default held by the issuing CLO at their current market prices; and (ii) redeployment of proceeds at the issuing CLO’s assumed reinvestment rate.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements (unaudited)

Fair Value as of December 31, 2022

Valuation techniques

Unobservable input

Range
(Weighted average)

Debt investments:

Senior secured

35,930,321

Discounted cash flow

Discount rates

10.21% - 20.71% (13.44%)

Senior secured

77,901

Market approach

Revenue multiples

0.46x - 0.46x (0.46x)

Subordinated

58,092

Market approach

EBITDA multiples

10.5x - 10.5x (10.5x)

Structured Finance Securities:

Subordinated notes and other CLO equity related investments(1)

7,313,509

Discounted cash flow

Discount rates

9.68% - 24.00% (18.78%)

Constant default rate

2.00% - 2.00% (2.00%)

Recovery rate

65.00% - 65.00% (65.00%)

Mezzanine debt

1,611,281

Discounted cash flow

Discount margin

9.15% - 11.60% (10.48%)

Constant default rate

2.00% - 3.00% (2.54%)

Recovery rate

65.00% - 65.00% (65.00%)

Equity investments:

Common equity and warrants

344,400

Market approach

EBITDA multiples

3.72x - 11.75x (8.29x)

45,335,504

(1) The cash flows utilized in the discounted cash flow calculations assume: (i) liquidation of (a) certain distressed investments and (b) all investments currently in default held by the issuing CLO at their current market prices; and (ii) redeployment of proceeds at the issuing CLO’s assumed reinvestment rate.

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), as well as changes in EBITDA and/or EBITDA multiples, among other things, could have a significant impact on fair values, with the fair value of a particular debt investment susceptible to change in inverse relation to the changes in the discount rate. Changes in EBITDA and/or EBITDA multiples, as well as changes in the discount rate, could have a significant impact on fair values, with the fair value of an equity investment susceptible to change in tandem with the changes in EBITDA and/or EBITDA multiples, and in inverse relation to changes in the discount rate. Due to the wide range of approaches used in developing input assumptions to these 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 (unaudited)

The following tables present changes in the investment measured at fair value using Level 3 inputs for the six months ended June 30, 2023 and 2022, respectively:


	Senior Secured Debt Investments		Subordinated Debt Investments		Preferred Equity		Common Equity and Warrants		Structured Finance Securities		Total
Level 3 assets, December 31, 2022	$	36,008,222	$	58,092	$	—	$	344,400	$	8,924,790	$	45,335,504
Net unrealized appreciation (depreciation) on investments	(111,372)		426,638		19		166,639		(1,119,722)		(637,798)
Net realized gain (loss) on investments	—		(484,730)		—		16,070		—		(468,660)
Amortization of Net Loan Fees	95,721		—		—		—		28,537		124,258
Paid-in-kind interest income	17,572		—		—		—		—		17,572
Accretion of interest income on Structured Finance Securities	—		—		—		—		741,598		741,598
Proceeds from principal payments on portfolio investments	(511,103)		—		—		—		—		(511,103)

Purchase of portfolio investments	2,453,739		—		34,464		18,750		—		2,506,953
Proceeds from distributions received from portfolio investments	—		—		—		(173,737)		(591,583)		(765,320)

Amendment fees collected	(9,184)		—		—		—		—		(9,184)


Level 3 assets, June 30, 2023	$	37,943,595	$	—	$	34,483	$	372,122	$	7,983,620	$	46,333,820


	Senior Secured Debt Investments		Subordinated Debt Investments		Preferred Equity		Common Equity and Warrants		Structured Finance Notes		Total
Level 3 assets, December 31, 2021	$	31,733,653	$	476,279	$	—	$	360,220	$	9,995,693	$	42,565,845
Net unrealized depreciation on investments	(588,377)		(101,928)		—		(97,901)		(993,806)		(1,782,012)
Net realized loss on investments	(210)		—		—		—		—		(210)
Amortization of Net Loan Fees	101,529		327		—		—		72,887		174,743
Paid-in-kind interest income	6,367		1,211		—		—		—		7,578
Accretion of interest income on Structured Finance Notes	—		—		—		—		498,748		498,748
Proceeds from principal payments on portfolio investments	(5,197,459)		—		—		—		(2,500,000)		(7,697,459)
Sale or redemption of portfolio investments	(100,849)		—		—		—		—		(100,849)
Purchase of portfolio investments	9,760,259		—		—		129,032		2,434,117		12,323,408
Proceeds from distributions received from portfolio investments	—		—		—		—		(553,693)		(553,693)

Amendment fees collected	(11,024)		—		—		—		—		(11,024)


Level 3 assets, June 30, 2022	$	35,703,889	$	375,889	$	—	$	391,351	$	8,953,946	$	45,425,075

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements (unaudited)

The net unrealized appreciation (depreciation) reported in the Company’s consolidated statements of operations for the six months ended June 30, 2023 and 2022, attributable to the Company’s Level 3 assets still held at those respective period ends, was as follows:


	Six Months Ended June 30,
	2023		2022
Senior secured debt investments	$	(111,373)	$	(520,933)
Subordinated debt investments	—		(101,929)
Preferred equity	19		—
Common equity and warrants	116,640		(97,901)
Structured Finance Securities	(1,119,721)		(947,426)
Net unrealized depreciation on investments held	$	(1,114,435)	$	(1,668,189)

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 financial instruments. The PWB Credit Facility is a variable rate instrument and fair value is estimated to approximate carrying value as of June 30, 2023 and December 31, 2022.

The following tables present the fair value measurements of the Company’s debt, organized by the fair value hierarchy of the significant unobservable inputs utilized by the Company to determine such fair values as of June 30, 2023 and December 31, 2022:


	June 30, 2023
Description	Level 1		Level 2		Level 3(1)		Total
PWB Credit Facility	$	—	$	—	$	15,740,000	$	15,740,000
Unsecured Note	—		—		13,589,561		13,589,561
Total debt, at fair value	$	—	$	—	$	29,329,561	$	29,329,561


	December 31, 2022
Description	Level 1		Level 2		Level 3(1)		Total
PWB Credit Facility	$	—	$	—	$	15,165,000	$	15,165,000
Unsecured Note	—		—		12,985,186		12,985,186
Total debt, at fair value	$	—	$	—	$	28,150,186	$	28,150,186

(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 June 30, 2023 and December 31, 2022:


	June 30, 2023				December 31, 2022
Description	Carrying Value(1)		Fair Value		Carrying Value(1)		Fair Value
PWB Credit Facility	$	15,740,000	$	15,740,000	$	15,165,000	$	15,165,000
Unsecured Note	14,751,653		13,589,561		14,715,310		12,985,186
Total debt	$	30,491,653	$	29,329,561	$	29,880,310	$	28,150,186

(1) Carrying value is calculated as the outstanding principal amount less unamortized discount and deferred debt issuance costs.

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 (unaudited)

Note 6. Commitments and Contingencies

As of June 30, 2023 and December 31, 2022, the Company had outstanding commitments to fund investments under various undrawn revolvers and other credit facilities totaling $1,411,920 and $3,097,992, respectively.

Legal and regulatory proceedings: 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 June 30, 2023.

Additionally, the Company is subject to periodic inspection by regulators to assess compliance with applicable regulations.

Indemnifications: 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: On September 12, 2018, the Company entered into the PWB Credit Facility. The PWB Credit Facility bears interest at a variable rate of the Prime Rate plus a 0.75% margin and includes an unused commitment fee for any unused portion in excess of $3,000,000, equal to 0.50% per annum on any unused portion, payable monthly in arrears.

On September 7, 2022, the Company amended the PWB Credit Facility to, among other things: (i) increase the maximum amount available under the PWB Credit Facility from $15,000,000 to $20,000,000; (ii) increase the advance rate from 35% to 50%; (iii) increase the minimum net asset value covenant from $10,000,000 to $15,000,000; (iv) increase the covenant requiring minimum quarterly net investment income after the management/incentive fees from $200,000 to $300,000; and (v) extend the maturity date from February 28, 2023 to August 31, 2024. Fees and legal costs incurred in connection with the PWB Credit Facility are amortized over the life of the facility.

The maximum availability of the PWB Credit Facility is equal to 50% 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 Company has made customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities.

As of June 30, 2023 and December 31, 2022, the Company had $15,740,000 and $15,165,000, respectively, of outstanding debt under the PWB Credit Facility. As of June 30, 2023, the unused commitment under the PWB Credit Facility was $4,260,000, subject to a borrowing base and other covenants.

For the three and six months ended June 30, 2023 and 2022, the components of interest expense, cash paid for interest, average interest rates and average outstanding balances for the PWB Credit Facility were as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Stated interest expense(1)	$	380,245		$	80,825		$	720,097		$	134,292
Amortization of debt issuance costs	442			—			883			—
Total interest and debt financing costs	$	380,687		$	80,825		$	720,980		$	134,292
Cash paid for interest expense	$	389,730		$	80,716		$	722,990		$	133,778
Effective interest rate	8.94		%	6.14		%	8.76		%	5.97		%
Average outstanding balance	$	17,040,000		$	5,268,846		$	16,468,039		$	4,498,370

(1) Stated interest expense includes unused fees.

Unsecured Note: On November 27, 2019, the Company entered into the Note Purchase Agreement under which the Company sold the Unsecured Note. On September 23, 2021, the Company executed an amendment to the Unsecured Note which, among other things: (i) extended the scheduled maturity date of the Unsecured Note from November 27, 2024 to November 27, 2026; and (ii) reduced the coupon rate of the Unsecured Note from 6.50% to 5.50%. In addition, the Company may, at its option, upon notice to the purchaser, redeem at any time all, or from time to time, any part of, the Unsecured Note, in an amount not less than 10% of the aggregate principal amount of the Unsecured Note then outstanding in the case of a partial redemption, at 100% of the principal amount so redeemed, together with interest on such Unsecured Note accrued to, but excluding, the date of redemption, and with no redemption settlement amount paid by the Company in connection with any such redemption. Fees and legal costs incurred with the Unsecured Note are amortized over the life of the facility.

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements (unaudited)

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 a 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.

On each of June 30, 2023 and December 31, 2022, the Company’s Unsecured Note had an aggregate outstanding principal of $15,000,000.


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Stated interest expense	$	206,250		$	206,250		$	412,500		$	412,500
Amortization of debt issuance costs	18,171			18,171			36,343			36,343
Total interest and debt financing costs	$	224,421		$	224,421		$	448,843		$	448,843
Cash paid for interest expense	$	206,250		$	206,250		$	412,500		$	412,500
Effective interest rate	5.98		%	5.98		%	5.98		%	5.98		%
Average outstanding balance	$	15,000,000		$	15,000,000		$	15,000,000		$	15,000,000

For the three and six months ended June 30, 2023 and 2022, the average dollar borrowings and weighted average effective interest rate on the Company’s outstanding borrowings were as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Average dollar borrowings	$	32,040,000		$	20,268,846		$	31,468,039		$	19,498,370
Weighted average effective interest rate	7.55		%	6.02		%	7.43		%	5.98		%

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements (unaudited)

Note 8. Financial Highlights

The following is a schedule of financial highlights for the three and six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Per share operating performance:
Net asset value per share at beginning of period	$	10.74		$	12.80		$	11.13		$	12.99
Net investment income(1)	0.30			0.12			0.60			0.30
Net realized gain (loss), net of taxes(1)	(0.29)			0.01			(0.27)			(0.01)
Net unrealized appreciation (depreciation), net of taxes(1)	0.18			(0.82)			(0.29)			(0.91)
Total income (loss) from operations	0.19			(0.69)			0.04			(0.62)
Distributions(2)	(0.25)			(0.25)			(0.51)			(0.51)
Issuance and repurchase of common stock(1)(3)	—			0.01			0.02			0.01
Net asset value per share at end of period	$	10.68		$	11.87		$	10.68		$	11.87
Total return based on net asset value(4)(5)	1.8		%	(5.3)		%	0.6		%	(4.8)		%
Shares outstanding and subscribed at end of period	1,935,004			1,984,863			1,935,004			1,984,863
Weighted average shares outstanding and subscribed	1,971,066			2,000,333			1,982,244			2,009,186
Ratio/Supplemental Data
Average net asset value(6)	$	20,924,954		$	24,415,238		$	21,289,285		$	25,024,966
Net asset value at end of period	$	20,661,482		$	23,564,242		$	20,661,482		$	23,564,242
Net investment income	$	588,063		$	245,032		$	1,195,425		$	599,675
Ratio of net operating expenses to average net assets(7)	27.6		%	15.6		%	25.8		%	13.7		%
Ratio of net investment income to average net assets(7)	11.2		%	4.0		%	11.2		%	4.8		%
Portfolio turnover(8)	2.5		%	14.3		%	4.9		%	18.2		%

(1)Calculated on the average share method.

(2)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 estimated 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.

(3)The issuance of common stock on a per share basis reflects the incremental net asset value change as a result of the issuance of shares of common stock in the Offering, the retirement of shares from the Company’s repurchases of common stock and the dilutive or anti-dilutive impact from significant changes in weighted-average shares outstanding during the year.

(4)Calculated as ending net asset value less beginning net asset value, adjusting for cumulative monthly distributions reinvested at the Company’s quarter-end net asset value.

(5)Not annualized.

(6)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.

(7)Annualized.

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

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements (unaudited)

Note 9. Capital Transactions

Common stock transactions

Below is a summary of transactions with respect to shares of the Company’s common stock issued or subscribed for in the Offering during the three and six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
Gross proceeds from the Offering	12,648	$	150,000	63,556	$	900,000	57,618	$	710,000	69,867	$	990,000
Commissions and dealer manager fees	—	(12,000)		—	(72,250)		—	(48,000)		—	(79,450)
Net proceeds to the Company	12,648	$	138,000	63,556	$	827,750	57,618	$	662,000	69,867	$	910,550

Repurchases of Shares

The following table summarizes the common stock repurchases by the Company for the three and six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
Repurchase of common stock	50,083	$	535,888	52,161	$	646,796	100,308	$	1,100,417	105,365	$	1,334,192

All repurchased shares were retired upon acquisition.

Distributions

The following table reflects the cash distributions per share that the Company declared on its common stock during the six months ended June 30, 2023 and 2022. 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
Six Months Ended June 30, 2022
January 26, 2022	January 27, 2022	April 15, 2022	$	0.0846	$	170,923
February 23, 2022	February 24, 2022	April 15, 2022	0.0846		170,923
March 28, 2022	March 29, 2022	April 15, 2022	0.0846		166,421
April 26, 2022	April 27, 2022	July 15, 2022	0.0846		166,956
May 25, 2022	May 26, 2022	July 15, 2022	0.0846		169,174
June 27, 2022	June 28, 2022	July 15, 2022	0.0846		167,069
Total			$	0.5076	$	1,011,466

Six Months Ended June 30, 2023
January 26, 2023	January 27, 2023	February 6, 2023	$	0.0846	$	167,313
February 23, 2023	February 24, 2023	March 6, 2023	0.0846		167,595
March 29, 2023	March 29, 2023	April 5, 2023	0.0846		166,868
April 25, 2023	April 26, 2023	May 5, 2023	0.0846		166,868
May 26, 2023	May 26, 2023	June 5, 2023	0.0846		166,868
June 28, 2023	June 28, 2023	July 5, 2023	0.0846		162,632
Total			$	0.5076	$	998,144

The above distributions were funded, in part, through the reimbursement of certain operating expenses under the ESAs. The Second Amended Expense Support Agreement is designed to ensure no portion of the Company’s distribution to stockholders will be paid from Offering proceeds, such that no distribution is deemed to be a return of capital contributed by its stockholders, and will provide for expense reduction payments to the Company in any quarterly period in which the Company's aggregate

Hancock Park Corporate Income, Inc.

Notes to Consolidated Financial Statements (unaudited)

distributions to stockholders exceeds the Company’s cumulative ICTI and net realized gains. The Second Amended Expense Support Agreement may be terminated by OFS Advisor, without payment of any penalty, with or without notice to the Company. However, the Second Amended Expense Support Agreement is subordinated to the PWB Credit Facility, and prior to cancelling the Second Amended Expense Support Agreement, OFS Advisor must provide Pacific Western Bank with 30 days advance written notice of termination of the Second Amended Expense Support Agreement.

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 estimated ICTI for the full year and distributions paid for the full year. Each year, a statement on Form 1099-DIV identifying the tax character of distributions is mailed to the Company’s stockholders.

Note 10. Subsequent Events Not Disclosed Elsewhere

On July 27, 2023, the Board declared a distribution of $0.0846 per common share, which represents an 8.4% distribution yield based on the Company’s common stock offering price as of July 28, 2023, payable on August 7, 2023 to stockholders of record on July 27, 2023.

On August 8, 2023, the Board approved a tender offer, commencing on August 30, 2023, to purchase 2.5% of the weighted average number of shares of the outstanding common stock for the trailing 12-month period ending June 30, 2023.

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, 2022, filed on March 17, 2023.

Overview

Key performance metrics per common share are presented below:


	June 30, 2023		March 31, 2023
Net asset value	$	10.68	$	10.74


	Three Months Ended				Six Months Ended
	June 30, 2023		March 31, 2023		June 30, 2023		June 30, 2022
Net investment income	$	0.30	$	0.30	$	0.60	$	0.30
Net increase (decrease) in net assets resulting from operations	0.19		(0.14)		0.04		(0.62)
Distributions declared	0.25		0.25		0.51		0.51

Our NAV per common share decreased from $10.74 at March 31, 2023 to $10.68 at June 30, 2023, primarily due to a net loss on investments of $220,750, or $0.11 per common share. For the quarter ended June 30, 2023, net investment income of $0.30 per common share exceeded our distributions of $0.25 per common share declared during the quarter .

For the quarter ended June 30, 2023, total investment income increased $118,257, or $0.06 per common share, compared to the prior quarter, primarily due to an increase in interest income. Interest income increased $121,056 compared to the prior quarter, primarily due to an increase in our portfolio’s weighted-average performing income yield to 14.9% from 13.8% in the prior quarter. The increase in our weighted-average performing income yield was primarily due to rising interest rates, as 100% of our loan portfolio at fair value consisted of floating rate loans. We continue to believe that our loan portfolio is well positioned and will continue to produce strong net investment income and perform well in the current interest rate environment.

For the quarter ended June 30, 2023, net loss on investments of $220,750 was primarily due to unrealized depreciation of $566,822 on our Structured Finance Securities, partially offset by unrealized appreciation of $479,668 on our senior secured debt investments.

As of June 30, 2023, no loans were on non-accrual status. During the quarter ended June 30, 2023, we wrote-off our non-accrual loan and equity investment in Eblens Holdings, Inc., resulting in a realized loss of $553,480, of which $476,638 was previously recognized in prior fiscal years, with $18,750 and $76,842 recognized during the three and six months ended June 30, 2023, respectively.

For the quarter ended June 30, 2023, our weighted-average debt interest costs increased to 7.55% compared to 7.31% for the quarter ended March 31, 2023, due to an increase in the cost of debt on our PWB Credit Facility resulting from Prime Rate increases. As of June 30, 2023, 49% of our total outstanding debt was fixed rate and contractually matures in 2026.

As of June 30, 2023, our asset coverage ratio of 167% exceeded the minimum asset coverage requirement under the 1940 Act of 150%, and we remained in compliance with all applicable covenants under our outstanding debt facilities. As of June 30, 2023, we had access to $4,260,000 under our PWB Credit Facility, subject to a borrowing base and other covenants, and based on our regulatory asset coverage ratio, we could access our entire unused line of credit and remain in compliance with asset coverage ratio requirements. As of June 30, 2023, we had unfunded loan commitments of $1,411,920 to seven portfolio companies. We continue to believe that we have sufficient levels of liquidity to support our existing portfolio companies and operate our business in this challenging environment.

On July 27, 2023, our Board declared a $0.0846 per common share distribution, which represents an 8.4% distribution yield based on our common stock offering price as of July 28, 2023, payable on August 7, 2023 to stockholders of record on July 27, 2023.

On August 8, 2023, our Board approved a tender offer, commencing on August 30, 2023, to purchase 2.5% of the weighted average number of shares of the outstanding common stock for the trailing 12-month period ending June 30, 2023.

We are also subject to financial risks, including changes in market interest rates. As of June 30, 2023, all of our debt investments bore interest at variable rates. We have prepared and planned for the transition away from LIBOR by incorporating alternate reference rates, including SOFR, to be used in our credit agreements. As of June 30, 2023, approximately $35.7

million (aggregate fair value) of our debt investments, or 86%, have transitioned from LIBOR to SOFR with minimal impact to us.

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 Consolidated Financial Statements – Note 3.”

•From August 3, 2020 through February 2, 2022, the 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 Consolidated Financial Statements – Note 3.”

•The Dealer Manager Agreement with CCO, 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 Consolidated 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 Consolidated Financial Statements – Note 3.”

•Expense Limitation Agreements: OFS Advisor limits our incurred expenses under the (1) Investment Advisory Agreement that contains provisions limiting organization and offering costs and Contractual Issuer Expenses and (2) Second Amended Expense Support Agreement that limits all other operating expenses. From August 3, 2020 through February 1, 2022, CIM Capital limited our incurred expenses under the (i) Sub-Advisory Agreement that contained provisions limiting organization and offering costs and Contractual Issuer Expenses and (ii) Amended Expense Support Agreement that limited all other operating expenses. All current agreements contain conditions pursuant to which we may become obligated to reimburse OFS Advisor for expense limitations provided thereunder. See “Item 1. Financial Statements — Notes to Consolidated Financial Statements – 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 OFS Capital and OCCI. OFS Advisor provides sub-advisory services to (i) 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 and (ii) CIM Real Assets & Credit Fund, an 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 our existing Order, which superseded a previous order that we received on October 12, 2016, and provides us with greater flexibility to enter into co-investment transactions with certain 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. We are generally permitted to co-invest with Affiliated Funds if, under the terms of our existing Order, 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 transaction, 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, we may file an application for an amendment to our existing Order to permit us to participate in follow-on investments in our existing portfolio companies with private funds that do not hold any investments in such existing portfolio companies. However, if filed, there is no guarantee that such application will be granted.

Conflicts may arise when an account managed by OFS Advisor makes an investment in conjunction with an investment being made by 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 1. Business — Regulation — Conflicts of Interest” and “Item 1A. Risk Factors — Risks Related to OFS Advisor and its Affiliates — 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, 2022, filed on March 17, 2023.

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 Consolidated Financial Statements - Note 2” and “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Significant Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2022, filed on March 17, 2023.

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 as of June 30, 2023:


	Fair Value as of June 30, 2023		Range of Fair Value
Investment Type			Low-end		High-end
Debt investments:
Senior secured	$	41,454,498	$	40,821,574	$	42,090,466


Structured Finance Securities:
Subordinated notes and other CLO equity related investments	6,300,995		5,997,252		6,604,739
Mezzanine debt	1,682,625		1,646,793		1,718,457


Equity investments:
Preferred equity	34,483		34,483		34,483
Common equity and warrants	372,122		325,353		418,891
	$	49,844,723	$	48,825,455	$	50,867,036

Portfolio Composition and Investment Activity

Portfolio Composition

The following table summarizes the composition of our investment portfolio as of June 30, 2023 and December 31, 2022:


	June 30, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Senior secured debt investments	$	42,805,866	$	41,454,498	$	44,266,418	$	42,943,250
Subordinated debt investments	—		—		484,730		58,092
Preferred equity investments	34,464		34,483		—		—
Common equity and warrant investments	340,671		372,122		479,588		344,400
Total Portfolio Company Investments	$	43,181,001	$	41,861,103	$	45,230,736	$	43,345,742
Structured Finance Securities	10,252,466		7,983,620		10,073,915		8,924,790
Total Investments	$	53,433,467	$	49,844,723	$	55,304,651	$	52,270,532
Total number of Portfolio Companies and Structured Finance Securities	40		40		42		42

As of June 30, 2023, all of our debt investments were floating rate loans and 99% of our Portfolio Company Investments at fair value are senior secured debt investments. We believe the seniority of our debt investments in the borrowers’ capital structures may provide greater downside protection against adverse economic changes, including those

caused by the impacts of the ongoing war between Russia and Ukraine, rising interest and elevated inflation rates, instability in the U.S. and international banking systems, the risk of recession and related market volatility.

As of June 30, 2023, the three largest industries of our Portfolio Company Investments by fair value, were (1) Wholesale Trade of 18.0%, (2) Health Care and Social Assistance of 13.3% and (3) Professional, Scientific and Technical Services of 11.1%, totaling an aggregate of approximately 42.4% of the investment portfolio. For a full summary of our investment portfolio by industry, see “Item 1–Financial Statements–Note 4.”

The following table presents our five largest investments by portfolio company based on fair value as of June 30, 2023:


Issuer	Type	Amortized Cost		Fair Value		% of Total Portfolio, at Fair Value
All Star Auto Lights, Inc.	Debt	$	5,160,115	$	5,202,900	10.4	%
Milrose Consultants, LLC	Debt	3,919,090		3,898,953		7.8
Apex Credit CLO 2020 Ltd.	Structured Finance Security	3,340,308		2,283,332		4.6
Convergint Technologies Holdings, LLC	Debt	2,027,827		2,039,441		4.1
Tony's Fresh Market / Cardenas Markets	Debt	1,881,335		1,935,375		3.9
Total		$	16,328,675	$	15,360,001	30.8	%

As of June 30, 2023, approximately 9.0% and 21.8% of our total portfolio at fair value and net assets, respectively, were comprised of Structured Finance Securities managed by a single adviser.

Structured Finance Securities

The following table summarizes the composition of our Structured Finance Securities as of June 30, 2023 and December 31, 2022:


	June 30, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Subordinated notes and other CLO equity related investments	$	8,500,943	$	6,300,995	$	8,350,929	$	7,313,508
Mezzanine debt	1,751,523		1,682,625		1,722,986		1,611,281

Total Structured Finance Securities	$	10,252,466	$	7,983,620	$	10,073,915	$	8,924,789

As of June 30, 2023 and December 31, 2022, there were no non-performing Structured Finance Securities. Non-performing Structured Finance Securities are securities that had an effective yield of 0.0%. Our Structured Finance Securities managed by a single advisor experienced unrealized depreciation of $846,109, or $0.43 per common share, during the six months ended June 30, 2023.

Portfolio Yields

The following table presents weighted-average yields metrics for our portfolio as of June 30, 2023 and March 31, 2023, respectively:


	For the Three Months Ended
	June 30, 2023		March 31, 2023
Weighted-average performing income yield(1):
Debt investments	14.3	%	13.1	%
Structured Finance Securities	17.6		17.1
Interest-bearing investments	14.9	%	13.8	%

Weighted-average realized yield(2):
Interest-bearing investments	14.8	%	13.7	%

(1) Performing income yield is calculated as (a) the actual amount earned on performing interest-bearing investments, including interest, prepayment fees and amortization of Net Loan Fees, divided by (b) the weighted-average of total performing interest-bearing investments at amortized cost.

(2) Realized yield is calculated as (a) the actual amount earned on interest-bearing investments, including interest, prepayment fees and amortization of Net Loan Fees, divided by (b) the weighted-average of total interest-bearing investments at amortized cost, in each case, including debt investments on non-accrual status and non-income producing Structured Finance Securities.

For the quarter ended June 30, 2023, the weighted average realized yield increased primarily due to rising interest rates as 100% of our loan portfolio at fair value consisted of floating rate loans.

Weighted-average yields of our investments are 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 yields will remain at their current levels.

Investment Activity

The following is a summary of our investment activity for the three and six months ended June 30, 2023:


	Three Months Ended June 30, 2023		Six Months Ended June 30, 2023

Investments in debt and equity securities	$	1,263,792	$	2,506,953
Investments in Structured Finance Securities	—		—
Total investment purchases and originations	$	1,263,792	$	2,506,953

Proceeds from principal payments on portfolio investments	$	497,679	$	796,159
Proceeds from sale or redemption of portfolio investments	3,299,761		3,299,761
Proceeds from distributions received from portfolio investments	402,677		765,320
Total proceeds from principal payments, sales or redemptions, and distributions received from portfolio investments	$	4,200,117	$	4,861,240

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, 2022. The following table shows the classification of our debt securities of portfolio companies by credit risk rating as of June 30, 2023 and December 31, 2022:


	Debt Investments
	June 30, 2023						December 31, 2022
Risk Category	Amortized Cost		Fair Value		% of Debt Investments, at Fair Value		Amortized Cost		Fair Value		% of Debt Investments, at Fair Value
1 (Low Risk)	$	—	$	—	—	%	$	—	$	—	—	%
2 (Below Average Risk)	—		—		—		—		—		—
3 (Average)	40,909,114		40,174,224		96.9		43,373,046		42,194,452		98.1
4 (Special Mention)	1,896,752		1,280,274		3.1		1,378,102		806,890		1.9
5 (Substandard)	—		—		—		—		—		—
6 (Doubtful)	—		—		—		—		—		—
7 (Loss)	—		—		—		—		—		—
	$	42,805,866	$	41,454,498	100.0	%	$	44,751,148	$	43,001,342	100.0	%

Non-Accrual Loans

Management reviews, for placement on non-accrual status, all loans that become past due on principal and interest, and/or when there is reasonable doubt that principal, cash interest, or PIK interest will be collected. When a loan is placed on non-accrual status, unpaid interest is credited to income and reversed. Additionally, Net Loan Fees are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments subsequently received on non-accrual investments may be recognized as income or applied to principal depending upon management’s judgment. 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, in the judgment of management, the investments are estimated to be fully collectible as to all principal and interest. During the quarter ended June 30, 2023, no new loans were placed on non-accrual status. As of June 30, 2023, we had no loans on non-accrual status, and as of December 31, 2022, the aggregate amortized cost and fair value of loans on non-accrual status with respect to all interest and Net Loan Fee amortization was $484,730 and $58,092, 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, 2022, filed on March 17, 2023. 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. In addition, we may make investments in Structured Finance Securities. Moreover, as a BDC and a RIC, we are also 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 (decrease) 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, comparisons of net increase (decrease) in net assets resulting from operations may not be meaningful.

The following analysis compares our quarterly results of operations to the preceding quarter, as well as our year-to-date results of operations to the corresponding period in the prior year. We believe a comparison of our current quarterly results to the preceding quarter is more meaningful and transparent than a comparison to the corresponding prior-year quarter as our results of operations are not influenced by seasonal factors the latter comparison is designed to elicit and highlight.

Comparison of the three months ended June 30, 2023 and March 31, 2023 and six months ended June 30, 2023 and 2022


	Three Months Ended				Six Months Ended
	June 30, 2023		March 31, 2023		June 30, 2023		June 30, 2022
Interest income	$	2,022,349	$	1,901,293	$	3,923,642	$	2,269,016
Dividend income	4,185		172		4,357		—
Fee income	3,306		10,118		13,424		40,555
Total investment income	2,029,840		1,911,583		3,941,423		2,309,571
Total operating expenses	1,521,138		1,484,941		3,006,079		1,888,200
Expense limitations	(79,361)		(180,720)		(260,081)		(178,304)
Net investment income	588,063		607,362		1,195,425		599,675
Net loss on investments	(220,750)		(894,579)		(1,115,329)		(1,844,748)
Net increase (decrease) in net assets resulting from operations	$	367,313	$	(287,217)	$	80,096	$	(1,245,073)

Investment Income. For the three months ended June 30, 2023, interest income increased $121,056 due to an increase in our portfolio’s weighted-average performing income yield to 14.9% compared to 13.8% for the prior quarter, primarily due to rising floating base rates. We believe our loan portfolio will continue to produce strong interest income in the current interest rate environment.

Gross Expenses. Our gross expenses are limited under the Advisory Agreements and ESAs. Operating expenses shown with respect to each governing expense limitation agreement for the three months ended June 30, 2023 and March 31, 2023 and the six months ended June 30, 2023 and 2022 are presented below:


	Three Months Ended				Six Months Ended
	June 30, 2023		March 31, 2023		June 30, 2023		June 30, 2022
Expenses subject to limitation under the Advisory Agreements:
Amortization of deferred offering costs	$	3,410	$	3,822	$	7,232	$	27,729
Contractual Issuer Expenses	78,201		76,750		154,951		31,050
Total expenses subject to limitation under the Advisory Agreements	81,611		80,572		162,183		58,779

Expenses subject to limitation under the ESAs:
Interest expense	605,108		564,715		1,169,823		583,135
Management fees	163,288		164,720		328,008		297,262
Incentive fees	147,016		124,703		271,719		—
Administrative fees	216,563		236,749		453,312		469,827
Professional fees	194,708		192,077		386,785		299,729

Other expenses	112,271		121,373		233,644		179,169
Total expenses subject to limitation under the ESAs	1,438,954		1,404,337		2,843,291		1,829,122
HPCI-MB operating expenses	573		32		605		299
Total operating expenses	$	1,521,138	$	1,484,941	$	3,006,079	$	1,888,200

Expenses Limited under the Advisory Agreements

OFS Advisor incurred, on our behalf, offering costs of $10,005 and $-0- during the three months ended June 30, 2023 and March 31, 2023, respectively. For the six months ended June 30, 2023 and 2022, offering costs incurred were $10,005 and $15,500, respectively.

OFS Advisor incurred, on our behalf, Contractual Issuer Expenses of $154,951 and $31,050 for the six months ended June 30, 2023 and 2022, respectively. The increase in Contractual Issuer Expenses is due to the direct involvement of OFS Advisor’s employees and employees of its affiliates in the Offering process.

Expense limitations provided under the Advisory Agreements associated with offering costs and expenses for the three months ended June 30, 2023 and March 31, 2023 and the six months ended June 30, 2023 and 2022 are presented below:


	Three Months Ended				Six Months Ended
	June 30, 2023		March 31, 2023		June 30, 2023		June 30, 2022
Total expenses limited under the Advisory Agreements	$	81,611	$	80,572	$	162,183	$	58,779





Reimbursed offering costs and Contractual Issuer Expenses	(2,250)		(8,400)		(10,650)		(14,850)
Net offering costs and Contractual Issuer Expenses limitations under the Advisory Agreements	$	79,361	$	72,172	$	151,533	$	43,929

We are conditionally obligated to pay OFS Advisor up to 1.5% of the gross proceeds raised in the Offering until all reimbursable offering costs and Contractual Issuer Expenses paid by OFS Advisor and their affiliates have been recovered. As of June 30, 2023, reimbursable offering costs and Contractual Issuer Expenses were $630,389.

Expenses Limited under the ESAs.

For the three months ended June 30, 2023 and March 31, 2023

For the three months ended June 30, 2023, total expenses subject to limitation under the ESAs remained stable compared to the prior quarter.

Interest expense for the three months ended June 30, 2023 increased $40,393 compared to the prior quarter, primarily due to the increase in the effective interest rate on our PWB Credit Facility resulting from Prime Rate increases.

For the six months ended June 30, 2023 and 2022

For the six months ended June 30, 2023, total expenses subject to limitation under the ESAs increased $1,014,169 compared to the corresponding period in the prior year, primarily due to an increase of $586,688 in interest expense.

Management and incentive fees for the six months ended June 30, 2023 increased $302,465 compared to the corresponding period in the prior year, primarily due to an increase in the fair value of the investment portfolio and net investment income.

Gross operating expenses (operating expenses excluding offering expenses and Contractual Issuer Expenses, and before limitations) are subject to limitation under the Second Amended Expense Support Agreement. OFS Advisor’s 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 Second Amended Expense Support Agreement provides expense support such that distributions are not paid from Offering proceeds. The determination of expense limitation under the ESAs for the three months ended June 30, 2023 and March 31, 2023 and six months ended June 30, 2023 and 2022 are presented below:


	Three Months Ended				Six Months Ended
	June 30, 2023		March 31, 2023		June 30, 2023		June 30, 2022
Total investment income	$	2,029,840	$	1,911,583	$	3,941,423	$	2,309,571
Expenses limited under the ESAs(1):
Interest expense, management fees and incentive fees	915,412		854,138		1,769,550		880,397
Other operating expenses as defined in the ESAs(2)	523,542		550,199		1,073,741		949,024
Total expenses limited under the ESAs	1,438,954		1,404,337		2,843,291		1,829,421
Net investment income prior to limitation	590,886		507,246		1,098,132		480,150
Differences in recognition of ICTI and GAAP net investment income(3)	(94,518)		(114,018)		(208,536)		396,940

ICTI prior to expense limitation(4)	496,368		393,228		889,596		877,090
Declared distributions	496,368		501,776		998,144		1,011,466
Expense limitation under ESAs	$	—	$	108,548	$	108,548	$	134,376

(1)Expense limitation under ESAs exclude organization costs, amortization of deferred offering costs, Contractual Issuer Expenses, and the related expense support under the Advisory Agreements, and other operating expenses of HPCI-MB as such expenses are permanent differences between GAAP net investment income and ICTI. See “Item 8. Financial Statements–Notes to Consolidated 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 expense, base management fees, and incentive fees. Excludes expenses incurred at HPCI-MB, which do not affect ICTI. The annualized ratio of other operating expenses to net assets for the period in which support is provided, and the annual ratio for the year in which support is provided, constitute conditions for reimbursement to OFS Advisor. See “Item 8. Financial Statements–Note 3” in our Annual Report on Form 10-K.

(3)Includes temporary and permanent differences between GAAP net investment income and estimated ICTI, such as HPCI-MB earnings-and-profits distributions to the RIC, taxable investment and debt modifications, and non-deductible excise tax.

(4)ICTI is estimated on an annual basis and cannot be finalized until we file our tax return in the following year. Such provision-to-return true-ups, if any, are reflected in the following year’s ICTI for purposes of the ESA calculation.

Expense support provided by OFS Advisor is reimbursable for three years from the date incurred. Expense limitation under both the Investment Advisory Agreement and Second Amended Expense Support Agreement can be terminated by OFS Advisor, without payment of any penalty, with or without notice to us at any time.

Net realized and unrealized gain (loss) on investments

Net gain (loss) on investments for the three months ended June 30, 2023 and March 31, 2023

For the three months ended June 30, 2023, net loss on investments of $220,750 was primarily due to unrealized depreciation of $566,822 on our Structured Finance Securities, partially offset by unrealized appreciation of $479,668 on our senior secured debt investments. Unrealized depreciation of $566,822 on our Structured Finance Securities was due to widening of liquid credit market spreads and credit deterioration in the underlying CLO portfolios.

During the three months ended June 30, 2023, we wrote-off our non-accrual loan and equity investment in Eblens Holdings, Inc., resulting in a realized loss of $553,480, of which $476,638 was previously recognized in prior fiscal years, with $18,750 and $76,842 recognized during the three and six months ended June 30, 2023, respectively.

For the quarter ended March 31, 2023, net loss on investments of $894,579 was primarily due to unrealized depreciation of $565,961 and $552,899 on our debt investments and Structured Finance Securities, respectively, partially offset by unrealized appreciation of $235,801 on our equity investments.

Net gain (loss) on investments for the six months ended June 30, 2023 and 2022

During the six months ended June 30, 2023, net loss on investments of $1,115,329 was primarily due to unrealized depreciation of $1,119,721 on our Structured Finance Securities, partially offset by net gains of $178,386 on our equity investments. During the six months ended June 30, 2023, our Structured Finance Securities managed by a single advisor experienced unrealized depreciation of $846,109.

During the six months ended June 30, 2022, our portfolio experienced net losses of $1,844,748, primarily due to net unrealized depreciation of $837,050 on our debt and equity investments and net unrealized depreciation of $993,806 on our Structured Finance Securities. Net losses of $993,806 on our Structured Finance Securities were primarily a result of aggregate unrealized depreciation of $597,615 on our investments in Apex Credit CLO 2020 Ltd and Elevation CLO 2021-14 Ltd. Net unrealized depreciation during the six months ended June 30, 2022 was primarily due to widening of liquid credit market spreads.

Liquidity and Capital Resources

As of June 30, 2023, we held cash of $985,025 and had $4,260,000 of unfunded commitments under our $20,000,000 PWB Credit Facility that was available, subject to a borrowing base and other covenants. Based on our regulatory asset coverage ratio as of June 30, 2023, we could access our full unused line of credit of $4,260,000 under the PWB Credit Facility, subject to the provisions of the borrowing base as of any borrowing date, and remain in compliance with asset coverage ratio requirements. We continue to believe that we have sufficient levels of liquidity to operate our business 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; (iii) the PWB Credit Facility and any other financing arrangements we may enter into in the future; (iv) investment repayments or dispositions; and (v) 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 OFS Advisor); (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:


	Six Months Ended
	June 30, 2023		June 30, 2022
Cash from net investment income(1)	$	761,900	$	225,812
Net (purchases and originations) repayments of portfolio investments(1)	(52,311)		(1,665,241)
Net cash provided by (used in) operating activities	709,589		(1,439,429)
Net proceeds from issuances of common stock	868,080		784,600
Distributions paid to stockholders	(1,001,321)		(1,028,393)
Net borrowings under revolving line of credit	575,000		1,065,000
Repurchases of common stock	(1,139,470)		(1,383,786)

Net cash used in financing activities	(697,711)		(562,579)
Net change in cash	$	11,878	$	(2,002,008)

(1) Net purchases and originations/repayments and sales of portfolio investments includes the purchase and origination of portfolio investments, proceeds from principal payments on portfolio investments, proceeds from sale or redemption of portfolio investments, changes in receivables for investments sold, payable from investments purchased as reported in our statements of cash flows, as well as the excess of proceeds from distributions received from Structured Finance Securities over accretion of interest income on Structured Finance Securities. Cash from net investment income includes all other cash flows from operating activities reported in our statements of cash flows.

Our operating activities provided $709,589 and used $1,439,429 in cash for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, the principal source of operating liquidity was investment income collected. Net cash used in operating activities benefited from the positive cash flow impact of expense limitations under the Advisory Agreements and ESAs of $260,081 and $178,304 for the six months ended June 30, 2023 and 2022, respectively, which reduced the net amount paid to the Advisors. Expense support and limitation under both the Investment Advisory Agreement and the Second Amended Expense Support Agreement are cancelable at any time. However, the Second Amended Expense Support Agreement is subordinated to the PWB Credit Facility, and prior to cancelling the Second Amended Expense Support Agreement, OFS Advisor must provide Pacific Western Bank with 30 days advance written notice of such termination.

Net purchases and origination of portfolio investments relates to the investment activity of our portfolio. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Portfolio Composition and Investment Activity.”

We received proceeds of $868,080 and $784,600 from the sale of our common stock during the six months ended June 30, 2023 and 2022, respectively. Offering proceeds are net of aggregate commissions and dealer manager fees of $65,920 and $70,400 for the six months ended June 30, 2023 and 2022, respectively.

During the six months ended June 30, 2023 and 2022, we paid $1,139,470 and $1,383,786, respectively, in connection with our tender offers to repurchase shares of our common stock. Subsequent to June 30, 2023, we paid $535,888 in connection with our second quarter 2023 tender offer to repurchase shares of our common stock.

During the six months ended June 30, 2023, we paid $1,001,321 in dividends to common stockholders and, subsequent to June 30, 2023 and through August 10, 2023, we paid $326,332 in dividends to our common stockholders.

During the six months ended June 30, 2022, we paid $1,028,393 in dividends to common stockholders and, subsequent to June 30, 2022 and through August 10, 2022, we paid $671,118 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 August 31, 2024. The maximum amount available to borrow under the PWB Credit Facility is equal to 50% 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 4.25% floor, and includes an unused commitment fee equal to 0.50% per annum for any unused portion in excess of $3,000,000, payable monthly in arrears. As of June 30, 2023, the stated interest rate on the PWB Credit Facility was 9.00%. As of June 30, 2023, the PWB Credit Facility bore an effective interest rate of 9.14%, 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 $20,000,000 revolving line of credit, of which $15,740,000 was drawn as of June 30, 2023. As of June 30, 2023, the unfunded commitment under the PWB Credit Facility was $4,260,000, that was available, subject to a borrowing base and other covenants. As of June 30, 2023, we were in compliance in all material respects with the applicable covenants under the PWB Credit Facility.

On July 25, 2023, Banc of California and Pacific Western Bank announced the signing of a definitive merger agreement. It is uncertain whether we will be able to extend the PWB Credit Facility or negotiate a new facility with the new entity, or an alternative lender, which could impact our future ability to access liquidity and could have a material adverse effect on our business, liquidity, financial condition, results of operations and ability to pay distributions to our stockholders.

Unsecured Note. On November 27, 2019, we entered into the Note Purchase Agreement pursuant to which we issued a $15,000,000 Unsecured Note. The purchase price of the Unsecured Note was $14,700,000 after deducting the offering price discount. Interest on the Unsecured Note is due quarterly. On September 23, 2021, we executed an amendment to the Unsecured Note which, among other things: (i) extended the scheduled maturity date of the Unsecured Note from November 27, 2024 to November 27, 2026; and (ii) reduced the coupon rate of the Unsecured Note from 6.50% to 5.50%. 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 a 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 June 30, 2023, we were in compliance in all material respects with the applicable covenants under the Note Purchase Agreement.

As of June 30, 2023, the Unsecured Note had the following terms and balances:


	Principal		Unamortized Discount and Issuance Costs		Stated Interest Rate		Effective Interest Rate(1)		Maturity
Unsecured Note	$	15,000,000	$	248,347	5.50	%	5.98	%	11/27/2026

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

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 current fair value and incur significant realized losses on our invested capital.

From time to time, we may enter into agreements with placement agents to sell, distribute and market shares of our common stock in the Offering. We may pay certain placement or “finder’s” fees to placement agents engaged by us in connection with the Offering. In addition, investors who are purchasing shares through a placement agent may be required to pay a fee or commission directly to the placement agent.

BDCs are generally required to meet a coverage ratio of total assets, less liabilities and indebtedness not represented by senior securities, to total senior securities. 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. Effective November 6, 2019, the asset coverage ratio test applicable to us was reduced from 200% to 150%.

As of June 30, 2023, the aggregate amount of senior securities outstanding was $30,740,000, for which our asset coverage was 167%. The asset coverage ratio for a class of senior securities representing indebtedness is calculated by aggregating our consolidated total assets, less all liabilities and indebtedness not represented by senior securities, divided by total senior securities representing indebtedness.

In addition, as a BDC, we must not acquire any assets other than “qualifying assets” specified in the 1940 Act unless, at the time the acquisition is made, at least 70% of our assets, as defined by the 1940 Act, are qualifying assets (with certain limited exceptions). Qualifying assets include investments in “eligible portfolio companies.” Under the relevant SEC rules, the term “eligible portfolio company” includes all private companies, companies whose securities are not listed on a national securities exchange, and certain public companies that have listed their securities on a national securities exchange and have a market capitalization of less than $250 million, in each case organized in the United States. Conversely, we may invest up to 30% of our portfolio in opportunistic investments not otherwise eligible under BDC regulations. Specifically, as part of this 30% basket, we may consider investments in investment funds that are operating pursuant to certain exceptions to the 1940 Act and in advisers to similar investment funds, as well as in debt or equity of middle-market portfolio companies located outside of the United States and debt and equity of public companies that do not meet the definition of eligible portfolio companies because their market capitalization of publicly traded equity securities exceeds the levels provided for in the 1940 Act. We have made, and may continue to make, opportunistic investments in Structured Finance Securities and other non-qualifying assets, consistent with our investment strategy. As of June 30, 2023, approximately 82% of our investments were qualifying assets.

We continue to monitor the instability in the current banking environment arising from recent bank failures. If the banks and financial institutions with whom we have credit facilities enter into receivership, undergo consolidation or become insolvent in the future, our liquidity may be reduced significantly. At various times, our cash balances at third-party financial institutions exceed the federally insured limit. Our cash balances are retained in custodian accounts with U.S. Bank N.A., and

we do not believe they are exposed to any significant credit risk. We continue to monitor our portfolio and believe the deposit risk and counterparty risk to be minimal.

Contractual Obligations

We, with approval of our Board, entered into the Investment Advisory Agreement, the Second Amended Expense Support Agreement, the Dealer Manager Agreement and the Administration Agreement. See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Note 1 and Note 3."

As of June 30, 2023, we had $985,025 of cash, as well as unfunded commitments under our PWB Credit Facility of $4,260,000, to meet our short-term contractual obligations, such as $1,411,920 in outstanding commitments to fund investments under various undrawn revolvers and other credit facilities. Long-term contractual obligations, such as our PWB Credit Facility that matures in August 2024 and had $15,740,000 outstanding as of June 30, 2023, can be repaid by selling portfolio investments that have a fair value of $49,844,723 as of June 30, 2023. The investment portfolio includes broadly syndicated loans that can be sold over a relatively short period to generate cash. We cannot, however, be certain that this source of funds will be available and upon terms acceptable to us in sufficient amounts in the future.

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. There is no guarantee that these amounts will be funded to the borrowing party now or in the future. We continue to believe that we have sufficient levels of liquidity to support our existing portfolio companies and will meet these unfunded commitments by using our cash on hand or utilizing our available borrowings under the PWB Credit Facility. In addition, we generally hold broadly syndicated loans in larger portfolio companies that can be sold over a relatively short period to generate cash.

Off-Balance Sheet Arrangements

Amounts Conditionally Reimbursable to OFS Advisor. OFS Advisor and affiliates have incurred offering costs and Contractual Issuer Expenses, of which $630,389 and $650,768 were unreimbursed as of June 30, 2023 and December 31, 2022, respectively. We remain conditionally liable to OFS Advisor for organization and offering costs incurred on our behalf. See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Note 3.”

OFS Advisor and affiliates have provided aggregate unreimbursed and unexpired operating expense support of $2,280,708 and $2,932,038 as of June 30, 2023 and December 31, 2022, respectively. We remain conditionally liable to OFS Advisor for operating expense support provided to us. See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Note 3.”

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.

Our Board maintains a variable dividend policy with the objective of distributing twelve monthly distributions in an amount not less than 90-100% of our annual taxable income for a particular year. In addition, during the year, we may pay a special 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. We may choose to retain a portion of our taxable income in any year and pay the 4% U.S. federal excise tax on the retained amounts. Each year, a statement on Form 1099-DIV identifying the source of the distribution is mailed to the Company’s stockholders.

Expense limitation payments under the ESAs have supported a majority of our historical distributions, and our distributions may, in the future, be funded through expense limitation payments by OFS Advisor under the Second Amended Expense Support Agreement. The Second Amended 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 in which 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 OFS Advisor continues to make such payments. The Second Amended Expense Support Agreement may be terminated by us or OFS Advisor, without payment of any penalty, upon written notice to us.

Share Repurchases

Since November 2018, the Board has approved quarterly tender offers to purchase shares of our outstanding common stock. Since November 2019, we have conducted quarterly 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 offers 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 Consolidated Financial Statements – Note 9” for details on share repurchases.

Recent Developments

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are subject to financial market risks, including changes in interest rates and the valuations of our investment portfolio. The economic effects of the ongoing war between Russia and Ukraine, rising interest and elevated inflation rates, ongoing supply chain and labor market disruptions, instability in the U.S. and international banking systems and the risk of recession has introduced significant volatility in the financial markets, and the effects of this volatility has impacted and could continue to impact our market risks. For additional information concerning risks and their potential impact on our business and our operating results, see “Part I — Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed on March 17, 2023.

Investment Valuation Risk

Because there is not a readily available market value for most of the investments in our portfolio, we value a significant portion of our portfolio investments at fair value as determined in good faith by OFS Advisor, as valuation designee, based, in part, on independent third-party valuation firms that have been engaged at the direction of OFS Advisor to assist in the valuation of each portfolio investment without a readily available market quotation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of our investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that we may ultimately realize. Further, some investments may be subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize significantly less than its current fair value. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Estimates” as well as Notes 2 and 5 to our consolidated financial statements for the six months ended June 30, 2023 for more information relating to our investment valuation.

Interest Rate Risk

Changes in interest rates, including any further interest rate increases approved by the U.S. Federal Reserve, and elevated inflation rates may affect both our cost of funding and the valuation of our investment portfolio. As of June 30, 2023, 100% of our debt investments, at fair value, bore interest at floating interest rates and contain interest rate re-set provisions that adjust applicable interest rates to current rates on a periodic basis. Historically, the interest rates on our debt investments with floating interest rates have been based on a floating LIBOR, but will continue to transition away from LIBOR to SOFR. As of

June 30, 2023, approximately $35.7 million (aggregate fair value) of our debt investments, or 86%, have transitioned from LIBOR to SOFR with minimal impact to us.

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, which resulted in a stated interest rate of 9.00% as of June 30, 2023.

Interest rate sensitivity refers to the change in our earnings that may result from changes in the level of interest rates as of June 30, 2023. As of June 30, 2023, 1-month and 3-month SOFR were 5.14% and 5.27%, respectively, and certain loan contracts in our investment portfolio have not reset to the current market rate. Assuming that the interim, unaudited Statement of Assets and Liabilities as of June 30, 2023 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 change
25	$	87,443	$	(39,897)	$	47,546
50	208,501		(79,793)		128,708
75	329,559		(119,690)		209,869
100	450,617		(159,586)		291,031
125	571,675		(199,483)		372,192


Basis point decrease	Interest income		Interest expense		Net change
25	$	(154,673)	$	39,897	$	(114,776)
50	(275,731)		79,793		(195,938)
75	(396,789)		119,690		(277,099)
100	(517,847)		159,586		(358,261)
125	(638,905)		199,483		(439,422)

Credit Risk

We generally endeavor to minimize our risk of exposure by limiting the counterparties with which we enter into financial transactions to reputable financial institutions. As of June 30, 2023 and December 31, 2022, we held our cash balances with third-party financial institutions, and such balances are in excess of the Federal Deposit Insurance Corporation insured limit. We seek to mitigate this exposure by monitoring the credit standing of these financial institutions.

Inflation Risk

Inflation is likely to continue in the near to medium-term, particularly in the U.S., with the possibility that monetary policy may continue to tighten in response. Persistent inflationary pressures could affect our portfolio companies’ profit margins.

Item 4. Controls and Procedures

Evaluation of Disclosure 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 June 30, 2023. 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 June 30, 2023, 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

During the quarter ended June 30, 2023, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are 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, 2022, filed on March 17, 2023 (the “Annual Report on Form 10-K”), 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 may also 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. 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.

Adverse developments in the credit markets may impair our ability to secure debt financing.

During the economic downturn in the United States that began in mid-2007, many commercial banks and other financial institutions stopped lending or significantly curtailed their lending activity. In addition, in an effort to stem losses and reduce their exposure to segments of the economy deemed to be high risk, some financial institutions limited routine refinancing and loan modification transactions and even reviewed the terms of existing facilities to identify bases for accelerating the maturity of existing lending facilities. We expect the current interest rate and high inflationary environments to continue, and it is possible the U.S. economy may enter an economic recession. As a result, it may be difficult for us to obtain desired financing to finance the growth of our investments on acceptable economic terms, or at all.

If we are unable to consummate credit facilities on commercially reasonable terms, or if the banks and financial institutions with whom we have credit facilities enter into receivership, undergo consolidation or become insolvent in the future, our liquidity may be reduced significantly. On July 25, 2023, Banc of California and Pacific Western Bank announced the signing of a definitive merger agreement. It is uncertain whether we will be able to extend the PWB Credit Facility or negotiate a new facility with the new entity, or an alternative lender, which could impact our future ability to access liquidity and could have a material adverse effect on our business, liquidity, financial condition, results of operations and ability to pay distributions to our stockholders. If we are unable to repay amounts outstanding under any facility we may enter into and are declared in default or are unable to renew or refinance any such facility, it would limit our ability to initiate significant originations or to operate our business in the normal course. These situations may arise due to circumstances that we may be unable to control, such as inaccessibility of the credit markets, a severe decline in the value of the U.S. dollar, a further economic downturn or an operational problem that affects third parties or us, and could materially damage our business. Moreover, we are unable to predict when economic and market conditions may become more favorable. Even if such conditions improve broadly and significantly over the long term, adverse conditions in particular sectors of the financial markets could adversely impact our business.

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

Sales of Unregistered Securities

During the three month period ended June 30, 2023, we sold 12,648 shares of our common stock for gross proceeds of $150,000, or a weighted average price of $11.86 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.

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.

Issuer Purchases of Equity Securities

Since November 2018, the Board has approved quarterly tender offers to purchase shares of our outstanding common stock. Since November 2019, we have conducted quarterly 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 offers allowed our stockholders to sell their shares back to us at a price equal to the most recently determined net asset value per share of our common stock immediately prior to the date of repurchase.

The following table summarizes the common stock repurchases by us for the three months ended June 30, 2023:


Three Months Ended June 30, 2023	Number of Shares	Amount
April 1, 2023 through April 30, 2023	—	$	—
May 1, 2023 through May 31, 2023	—	—
June 1, 2023 through June 30, 2023	50,083	535,888

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

(a) Not applicable.

(b) Not applicable.

(c) During the three months ended June 30, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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

3.1

Certificate of Incorporation of Hancock Park Corporate Income

Form 10-12G (000-55552)

December 21, 2015

3.2

Form of Articles of Amendment and Restatement of Hancock Park Corporate Income, Inc.

Form 10-12G/A (000-55552)

February 8, 2016

3.3

First Amended and Restated Bylaws of Hancock Park Corporate Income

8-K (814-001185)

August 24, 2017

31.1

Certification of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act

31.2

Certification of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

†

32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

†

101

Inline XBRL Document Set for the consolidated financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)


*			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: August 11, 2023	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