Company: OXLCZ
Filing Date: 2025-05-20
Form Type: N-CSR
Source: 0001213900-25-045605
Chunk: 22

Company: Oxford Lane Capital Corp.
Filing Date: 2025-05-20
Form: N-CSR
Chunk 22
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”) provision on certain investments in the Fund’s portfolio. Refer to the section below, “Payment -In-Kind,” for a description of the PIK provision and its impact on interest income. Payment-In-Kind The Fund holds debt investments in its portfolio which contain a contractual PIK provision. Certain PIK investments offer issuers the option at each payment date of making payments in cash or additional securities. PIK interest is computed at the contractual rate and is recorded as interest income. The PIK amount is added to the principal balance on the capitalization date. Upon capitalization, the PIK component is subject to the fair value estimates associated with the related investments. At the point the Fund believes PIK is not fully expected to be realized, the PIK investment will be placed on non -accrualstatus. When a PIK investment is placed on non -accrualstatus, the accrued, uncapitalized interest is reversed from the related receivable through interest income. PIK investments on non -accrualstatus are restored to accrual status once it becomes probable that PIK will be realized. Other Income Other income includes distributions from fee letters and success fees associated with portfolio investments. Distributions from fee letters are an enhancement to the return on CLO equity investments and are based upon a percentage of the collateral manager’s fees above the amortized cost and are recorded as other income when 38 OXFORD LANE CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2025 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) earned. The Fund may also earn success fees associated with its investments in CLO warehouse facilities, which are contingent upon a repayment of the warehouse by a permanent CLO securitization structure; such fees are earned and recognized when the repayment is completed. The Fund also earns other income on its cash balance, which is swept into a money market fund at the close of business each day and then returned as cash the following business day. U.S. FEDERAL INCOME TAXES The Fund intends to operate so as to continue to qualify to be taxed as a RIC under Subchapter M of the Code and, as such, to not be subject to U.S. federal income tax on the portion of its taxable income and gains timely distributed to stockholders. To qualify for RIC tax treatment, the Fund is required to distribute at least 90% of its investment company taxable income, as defined by the Code.