Good morning and welcome to OFS Capital Corporation’s Second Quarter 2013 Earnings Conference Call. It's my pleasure to turn the call over to Ms. Mary Jensen, Vice President of Investor Relations. Ms. Jensen, you may begin.

Thank you. Good morning everyone and thank you for joining us. With me today is Glenn Pittson, our Chief Executive Officer and Bob Palmer, our Chief Financial Officer. Our earnings announcement was released this morning and we plan on filing our second quarter financial results and Form 10-Q with the SEC later today. Those documents will be accessible through the Investor Relations section of our website at ofscapital.com. Comments made during this course of the conference call and webcast contains forward-looking statements within the meaning of the Security Act of 1933 as amended. Such statements will reflect various assumptions by OFS Capital concerning anticipated results are not guarantees the future performance and are subject to known and unknown uncertainties. Uncertainties and other factors that could cause actual results to differ materially from such statements. These uncertainties and other factors are in some ways beyond management's control and include the risk factors described from time-to-time in our filings with the Securities and Exchange Commission. Although we believe that assumptions on which any forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate and as a result, the statements based on those assumptions also could be incorrect. You should not place undue reliance on these forward-looking statements. And OFS Capital undertakes no duty to update them. All forward-looking statements speak only as of the date of this call and webcast. An audio replay of the call will be available until August 15, 2013 starting approximately two hours after we conclude this morning. In addition, the website will be available for 30 days following today's call. To access the audio or webcast replays, please visit our website at ofscapital.com. With that I’ll turn the call over to Glenn.

Thanks Mary. Good morning and thank you for joining us as we address our result for fiscal quarter ended June 30th, 2013. This is our second full quarter since our IPO in November, 2012. At that time, the company converted from an LLC to a corporation. As a result, please note that the operating result for the quarter ended June 30, 2012 contained in the press release issued this morning reflects the performance of our predecessor OFS Capital, LLC prior to our IPO. This morning, we will provide an overview of our OFS Capital's investment activities and the associated highlight from the second quarter of 2013. Additionally, we will provide an update on our progress in converting our anchor investment in Tamarix Capital Partners, a small business investment company into a wholly owned drop-down SBIC fund within OFS Capital. You may have seen the press release last week which described our progress. As previously stated, OFS Capital invest in two distinct and complimentary segments for the credit markets. First, there is a senior loan fund, this fund is essentially fully invested relative to its $225 million target size, and consist of little market club loans generally in transaction where private equity sponsors involved. This pool of investment is match funded with floating rate assets financed through a floating rate credit facility with Wells Fargo. Secondly, we've the SBIC fund, this fund is less than 15% invested relative to its $225 million target size. The SBIC fund is primarily focused on directly originating assets but we'll also make opportunistic purchases of securities and transactions that have been originated by other institutions, generally the assets in this fund have a low teens fixed rate interest component complimented by equity investment in certain instances. This pool of fixed rate assets is funded through…

Thanks, Glenn. Our investment portfolio totaled $228.3 million on a fair value basis as of June 30th, 2013. The portfolio consisted of 57 portfolio companies and was comprised of first-lien senior secured debt investment in 56 borrowers with an aggregate fair value of $220 million as well as our limited partnership investment in the SBIC fund, which had a fair value of $8.3 million. The weighted average yield to fair value on senior secured debt investments was 7.23% as of June 30th, 2013. And the average portfolio company loan size was approximately $4 million. All of those loans in the senior loan vehicle are floating rates. All contain LIBOR floors and as Glenn noted, we had just one non- accrual at June 30th. A debt investment with a fair value of $3.6 million. We made senior secured debt investments in two new portfolio companies during the second quarter, and we were fully repaid on our senior debt investments in three companies that rein our portfolio at March 31st, 2013. During the second quarter, we had re-pricing amendments and nine portfolio companies within the senior loan fund. During the quarter ended June 30th, 2013 the SBIC fund invested $4.9 million in one new portfolio company. The SBIC fund ended the quarter with debt investments in five portfolio companies were $26.5 million in aggregate principal balance outstanding and equity investments of $4.6 million at fair value in the same five portfolio companies. Interest rates on the SBIC funds debt securities range from 14% to 16% including paid in time interest on four of the five debt investments. From our portfolio, we derived approximately $4.2 million in investment income in the second quarter of this year. Almost all of the investment income came from interest income on our debt investments. During the second…

Thanks Bob. Last week, we issued a press release announcing the completion of the negotiations with third party investors and the SBIC fund. As well as the subsequent submission of relevant documents to necessary regulatory entities in order to establish a drop-down fund wholly owned by OFC Capital Corporation. As a result, there have been a few recurring questions asked by shareholders and analysts. Rather than waiting for the Q&A portion of the call, I will try to address these questions right now. The first question has been how much are you paying for third party equity in the SBIC fund. Well as of today the third party LPs are funded about $4.5 million and have given us an option through mid December of this year to acquire all of their commitments. If we close the purchase on the day we made the announcement at the end of July, the purchase price for the $4.5 million of funded commitments would be roughly $6.3 million. The final price to acquire their interest however would be dictated by the following factors. First, the final timing of the drop-down, and second the amount of drawn capital. It should be emphasized that of this capital we’d be acquiring all of the earnings of the SBIC fund since it received its license in May 2012. The only distribution made by the SBIC fund since the IPO there’s been a tax distribution of approximately $50,000 at third party investors. Keep in mind, we do believe that the fund has been performing well and that there are embedded gains as noted in our second quarter filing the fair value of our equity stake approximates a 110% of cost. The second question we've been asked is: assuming you complete the drop-down and receive exemptive relief what is OFC…

(Operator Instructions) Yes sir, our first question comes from J.T. Rogers of Janney Capital Markets. Please go ahead.

That’s correct J.T.

Did you guys add any capital there or was that investment written off in the quarter?

We did not add any capital in the fair value increased moderately.

Okay, so at least it sounds like that’s moving in at least in a positive direction. I guess switching gears is that there is a big question -- my question on Tamarix just generally I think you just mentioned that end of your prepared remarks Glenn that Tamarix made a capital call to import to potential investment, potential investment there in the pipeline, just wondering what the size of that capital call was.

It totaled approximately $3.5 million, J K and less than $1 million of that was from the third party investors

Okay, great and I would assume that the price that you pays for that funded investment assuming the SBIC closes relatively soon, it would be proportional to the $6.3 million this you would have been paying at the time of the announcement

I think that's a good way to working, I guess that be a good way for your estimates

Okay, great and I know there is probably no answer to this question but the SBA process, do you guys have any sense how long the process will take or what additional steps might need to be taken before you get SBA approval?

They have the information; they are working on it right now this much we know. And yes it's hard to estimate it is August, and but they have acknowledged that they are working on the process and it would be hard to estimate when it could be completed although I got to say the SBA has been pretty responsive with us over the last couple of years, and fairly drawn up process, they have not been the big hold up on lot of this so I think keeping my fingers crossed and hoping that well things will move along in a fairly good order.

Okay, great and then in the meantime I guess Tamarix keeps continues to deploy capital, what size of investment can they make right now in that fund?

Fund is a little shy of $100 million in its current size, and kind of have restriction of $9 million to $10 million in the individual investment. On average, we've been more into $5 million to $6 million range were the investment size have been following and quite a number of the investment we've, we've been working with either other BDCs or other SBIC funds which seems to be keeping the pace with the investment up and increasing over the last year, and we hope to – I think we like about the process is the fact it continuous to build diversity into the portfolio, and we are not picking up any really large positions or any individual credit.

I think that make sense. If and when Tamarix is consolidated, do you see their whole size or investment size increased I guess sort of how big of investment could you make and then sort of what do you guys think would be sort of practical run rate? Would that increase from sort of $9 million to $10 million cap and $5 million to $6 million average by size?

The largest size I would say would be closer to $20-ish million, once it become $225 million fund knock on wood, and but our original projection we're kind of looking in the range of $10 million size transactions. In practice, we haven't really holding back on our investment at all, we kind a like the diversification, we're getting through our current process. So I am kind of – the deals we've in backlog right now are kind of $6 million, $7-ish million investment, so I think our average would be coming down little bit may be to $7 million from the Tamarix offer about on the road show. And I think we can keep our investment pace up and create more diversification in the portfolio. So that's a current thinking right now, but we'll see how the market develops over the next couple of months as we work our way through the drop-down process.

Great and I guess you guys you've added a couple of new investments. One investment amongst is that a sort of good pace and it's hard to predict and it's little bit lumpy but one or two investments, how does your pace of investments change now that you are adding additional folks.

I would really with this current strategy I am hoping that we are doing at least two investments a month. Kind of in a range I described

Great, and then in terms of Tamarix right now, do they have access to SBIC debenture and I guess if so how much?

They're presently $90 million of debenture outstanding as part of this capital call we do intend to be making a capital call under debenture program and that I help support the new investments.

Okay, that's great. And then I guess once it's consolidated I mean my understanding is you have to put the equity in first before you get access to the debentures, would you expect to take the equity invested in the SBIC fund up to the $75 million right away and then have access to the $450 million or what's your thinking on that?

We're going to wait, before we discuss that we're going to wait until we get the final approval from the SBA. There is a tech note called techno 13 which gives you some credit for your current capital base in the BDC, so I want to see exactly how the SBA looks at that and what latitude they'll give us as far as working with unfunded commitments versus funded commitments. If we have put to all the capital and we get that invested as quickly as possible because we don't want that money sitting just been a money market account somewhere. We will do our best to manage that process. But we will wait till we hear back from the SBA as far as what latitude we have there. So, am I addressing your question?

I think so. I guess you guys are just kind of – if you can get access to the debentures, if you are giving credit for unfunded commitments in terms of I guess going after additional debentures, you would seek to $75 million if not you might do it more of a share program so that you are not all equity and then you are putting on debt towards the end – okay

Right, we will do it, yes.

Okay, great. And then just one last question before I get back in the queue. In terms of fundingness I mean it seems like you have availability under your current line of credit. Would you use that to fund the equity investment in the SBIC subsidiary, or would you look at equity or both?

Well, we've generated a bit of cash flow on a going basis as you might know in Bob's note. How much in just repayment that we receive in the senior loan fund in the past quarter-over-quarter?

About $26 million

So we see a bit cash flow coming out, it's kind of bit of liquid portfolio. So, we have net cash coming in on fairly regular basis. Additionally, we do have the borrowing availability; we kind of kept our asset covered ratio under control here to let us avail ourselves to that. So we have been trying to set ourselves up to create take the capital. So we can act at the time the drop-downs approved and we get some clear idea as to exactly what the rule would be as far as our investment of capital into the SBIC fund. But I think we get our liquidity fund to places to invest there on to the Wells Fargo facility and then secondly under just a normal liquidity we get as a portfolio through amortization payment, repayments and what not.

Okay, great, I'll hop back in the queue. Thank you.

Our next question comes from Chris Kotowski of Oppenheimer & Company. Please go ahead. Chris Kotowski – Oppenheimer: Good morning. You are going a little fast when you are describing the agreement with the third party holders. And till when did you say your option to purchase their $4.5 million stake lasted?

It's being held up into to the middle of December Chris Kotowski – Oppenheimer: Mid of December. Okay, so presumably your expectation is that they – the final drop-down gets approve significantly shorter than that. Is there a plan B if that drop down isn't granted by them?

The management team has a lot of money invested in this as you know in the company. And yes we do have multiple ideas as to how to create earnings in the BDC if this doesn't work but I don't think it would be useful for us to discuss that in anyway share perform right now because, we've been comfortable in the process right now. Chris Kotowski – Oppenheimer: Okay, and lastly I think you said there are roughly 23rd party holders? Did they all sign on?

Yeah. We have 100% consent. To tell you a little bit on that. The process took a little while because they like the investment, they like the team, they like I think running so it took a little while to shake these intercessory. But which is good I mean which is good that they like the fund and helping group performing. So yeah but we have a 100% of the third party holders signed into this. Chris Kotowski – Oppenheimer: Okay and then obviously your net investment income is still currently way below the dividend even though you’ve waived part of your base management fees. And how do you see dividend policy relative to net investment income and is there a way to extent the fee waivers given that its obviously taken a bit longer than expected to fully ramp towards the kind of net investment income run rate consistent with the dividend.

Thanks Chris. I mean look shareholder value is our number one priority here and we do strive always to do those things that we believe to be in the best interest of our shareholders within this plan set our management team by virtue of its 30% ownership at the company’s common stock is very well aligned. At this time, as we focus our efforts on obtaining approval from the SBA as well exemptive relief from the SBA, both of which are key elements in building long-term profitability for our company and value for our shareholders. We're not contemplating reduction in our dividend and neither are we contemplating extending the reduced management fee beyond October 31st. Chris Kotowski – Oppenheimer: Okay, that’s it for me, thank you.

Thanks, Chris.

(Operator Instructions) There appears to be no more questions. So at this time I’d like to turn the conference back over to the management team for any final remarks that -- actually it looks we do have a follow-up from Mr. Rogers from Janney Capital Markets. Please go ahead. J.T. Rogers – Janney Capital Markets: Thanks. I was just wondering if you could talk little bit more I know you don’t want to talk about maybe a pipeline number for Tamarix but just sort of just what the typical deals look like, where the deals are coming from generally, and then maybe just sort of what your hit rate has been between the deals you looked at and deals you’ve closed?

I haven’t looked at the hit ratio on a while and our intension is really not to start talking about that, but the transactions we're looking at size wise I think I was mentioning were kind of in the $6 to $7 million size. They look a lot like the other ones that are in the portfolio low teens kind of 12% cash returns, a couple of points intake equity tickers across the board, so they’re looking like that. Right now there is let say three transactions kicking around that we're trying to get set up for funding. One of them I just got a note today that the competitor showed up that’s why we don’t like to talk about these things. But then again two days ago another deal was showing up that they were talking like on the term sheet, so it just moves so prudently. And I really don’t like to talk about these numbers until they become a reality. And I think once the drop down occurs maybe we could start to make, create a little more clarity on the pipeline but at this point I think it just really not to mention is on average looks like in the sixth or seventh size. A general look of these deals, they are same kind of pricing parameters we described to you on the road show, and what I talked about today. And there is really been no big change in any of that at this point. But then as I mentioned in the prepared remarks, I think our backlog has been building our morning calls on Monday, I’ve been taking a lot longer to get through the deals. We have a couple of more, we have more origination people out there on a regular basis, and we're getting to look a bit more in the market more. We're spending a bit more time working with our friends and competitors in the market out there which is kind of created a greater diversity deal flow J.T. Rogers – Janney Capital Markets: Okay and then I guess looking at right I guess going maybe back to the hit rate question, and you talked about may be closing two deals a month. Say you’re putting $14 million to work per month and $225 million I guess is the ultimate size of the SBIC fund, I get to about 12 to 14 months to fully ramp that. Is that net of what you’ve already invested? Is that a reasonable assumption or just sort of in your own mind would you need to want to sort of hedge that number and say it might will take longer or less time?

I will guarantee you it will take longer or less time as you just said. So it's hard to provide any real concrete estimates as to how this goes. We have been expanding our pipeline; the deal flow has been picked up. I’m feeling pretty comfortable on that front but as far as giving you a real hard estimate on that I think it wouldn't be appropriate for me to do that with the shareholders right now. J.T. Rogers – Janney Capital Markets: Okay well then thank you. Thanks for taking my question.

I appreciate you asking those questions. We are all set?

And this concludes our question and answer session. I’d like to turn the conference back over to the management team for any final remarks.

Okay, well thanks for everyone for listening in on today’s call. We look forward to speaking to you in three months maybe with a little different story for you, but we’ll talk about that with you when we get there. Thanks again.

The conference has now concluded and we thank you all for attending today’s presentation. You may now disconnect your lines and have a wonderful day.