Ofs Capital Corp

This management proposal asks stockholders to authorize the Company to issue shares of common stock at prices below the then-current NAV per share for a 12-month period, subject to Board approval and a per-sale cap that no issuance exceed 25% of outstanding common stock immediately prior to each such sale. Management seeks this authority to preserve flexibility to raise equity quickly during periods of market stress or volatility when attractive investment or acquisition opportunities may arise and when debt financing may be expensive or unavailable. The proposal is rooted in regulatory requirements: the 1940 Act requires stockholder authorization and certain board determinations for sales below NAV, and the Company proposes specific conditions (independent director approval, consultation with underwriters to ensure price approximates market value less commissions, and the 25% per-sale cap) to comply with those rules. The Board frames the authority as a pragmatic risk-management and opportunity-capture tool that could enhance the Company’s ability to invest, maintain required asset coverage ratios, and repay borrowings, thereby supporting dividend capacity and long-term NAV growth. The Company discloses clear dilution risks and provides hypothetical examples showing NAV and ownership dilution under various offering sizes and discounts, and it acknowledges there is no limit on the depth of discount under the authorized framework. The Board also considered conflicts of interest — notably that higher asset values increase advisory fees payable to OFS Advisor — and concluded that the potential benefits to stockholders outweigh such detriments, while committing to independent director oversight and compliance with SEC guidance. Although the Company states it has no immediate plans to issue shares below NAV, approval would give management discretion to act quickly if market opportunities justify issuance; this raises governance considerations about scope and safeguards because no further shareholder approval would be required for subsequent issuances within the authorization period. For sophisticated investors evaluating the proposal, key issues include the quality and transparency of the Board’s pre-sale valuation process, the independence and diligence of the independent directors in making best-interests determinations, the potential for meaningful dilution especially if large offerings or deep discounts are used, and how proceeds would be allocated between investments and debt reduction in practice.