Company: OXLCZ
Filing Date: 2025-02-19
Form Type: 424B2
Source: 0001213900-25-015045
Chunk: 91

Company: Oxford Lane Capital Corp.
Filing Date: 2025-02-19
Form: 424B2
Chunk 91
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 that taxable earnings for any fiscal year are less than the amount of the distributions paid during the year, there would be a tax return of capital to stockholders. Distributions in excess of current and accumulated taxable earnings and profits will generally not be taxable to the stockholders, because a tax return of capital represents a return of a portion of a stockholder’s original investment in our common stock, net of fund fees and expenses, to the extent of a stockholder’s basis in our stock. Generally, a tax return of capital will reduce an investor’s basis in our stock for federal tax purposes, which will result in the stockholder recognizing additional gain (or less loss) when the stock is sold. Assuming that a stockholder holds our stock as a capital asset, any such additional gain would be a capital gain. Stockholders should not assume that the source of all distributions is from our net profits and stockholders may periodically receive the payment of a distribution consisting of a return of capital.The tax character of any distributions will be determined after the end of the fiscal year. Tax matters are very complicated and the tax consequences to an investor of an investment in our shares will depend on the facts of its particular situation. We encourage investors to consult their own tax advisors regarding the specific consequences of such an investment, including tax reporting requirements, the applicability of federal, state, local and foreign tax laws, eligibility for the benefits of any applicable tax treaty and the effect of any possible changes in the tax laws. Distribution Policy Oxford Lane is subject to significant and variable differences between its accounting income under GAAP and its taxable income particularly as it relates to our CLO equity investments. We invest in CLO entities which generally constitute PFICs and which are subject to complex tax rules; the calculation of taxable income attributed to a CLO equity investment can be dramatically different from the calculation of income for financial reporting purposes under GAAP. Taxable income is based upon the distributable share of earnings as determined under tax regulations for each CLO equity investment, which may be consistent with the cash flows generated by those investments (although significant differences are possible), while accounting income is currently based upon an effective yield calculation (this requires the calculation of a yield to expected redemption date based upon an estimation of the amount and timing of future cash flows, including recurring cash flows as well as future principal repayments). Our final taxable earnings for the fiscal year ended March 31, 2024 will not be known until our tax returns are filed but our experience has been that cash flows from CLO equity