Hancock Park Corporate Income 10-Q 2018 Q1 Quarterly report

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 March 31, 2018

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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 incorporation or organization)	(I.R.S. Employer Identification No.)

10 S. Wacker Drive, Suite 2500

Chicago, Illinois 60606

(Address of principal executive offices)

(847) 734-2000

(Registrant’s telephone number, including area code)

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    Yes  ¨     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  (do not check if a smaller reporting company)	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 May 14, 2018 was 1,098,798.

HANCOCK PARK CORPORATE INCOME, INC.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION		6
Item 1.	Financial Statements	6
	Balance Sheets as of March 31, 2018 (unaudited), and December 31, 2017	6
	Statements of Operations for the Three Months Ended March 31, 2018 (unaudited), and 2017 (unaudited)	7
	Statements of Changes in Net Assets for the Three Months Ended March 31, 2018 (unaudited), and 2017 (unaudited)	8
	Statements of Cash Flows for the Three Months Ended March 31, 2018 (unaudited), and 2017 (unaudited)	9
	Schedules of Investments as of March 31, 2018 (unaudited), and December 31, 2017
	Notes to Financial Statements (unaudited)	16
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	44
PART II. OTHER INFORMATION		45
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 3.	Defaults Upon Senior Securities	46
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	46
Item 6.	Exhibits	47
SIGNATURES		48

2

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:

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
Annual Distribution Requirement	Distributions to our stockholders, for each taxable year, of at least 90% of our ICTI
ASC	Accounting Standards Codification, as issued by the FASB
ASC Topic 820	ASC Topic 820, "Fair Value Measurement"
ASC Topic 946	ASC Topic 946, "Financial Services—Investment Companies"
ASU	Accounting Standards Updates, as issued by the FASB
BDC	Business Development Company under the 1940 Act
Board	The Company's board of directors
CLO	Collateralized Loan Obligation
Code	Internal Revenue Code of 1986, as amended
Contractual Issuer Expenses	Salaries and direct expenses of OFS Advisor’s employees, employees of their affiliates and others while engaged in offering and other contractually-defined activities
Dealer Manager	International Assets Advisory, LLC
Dealer Manager Agreement	Broker dealer management agreement dated August 1, 2016 between the Company, OFS Advisor and Dealer Manager
EBITDA	Earnings before interest, taxes, depreciation, and amortization
Exchange Act	Securities Exchange Act of 1934, as amended
Evolv	Evolv Capital Advisors LLC, a registered investment adviser under the Advisers Act, and sub-adviser to the Company
Expense Support Agreement	Expense support and conditional reimbursement agreement dated July 15, 2016, between the Company and OFS Advisor
FASB	Financial Accounting Standards Board
FDIC	Federal Deposit Insurance Corporation
Funding I	OFS Funding I, LLC, a wholly-owned subsidiary of OFSAM and an affiliate of OFS Advisor
GAAP	Accounting principles generally accepted in the United States
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
Investment Advisory Agreement	Investment advisory and management agreement between the Company and OFS Advisor, dated July 15, 2016
Investment Sub-Advisory Agreement	Investment sub-advisory agreement between the Company, OFS Advisor, and Evolv, dated July 15, 2016
IRS	Internal Revenue Service
LIBOR	London Interbank Offered Rate
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
OFSC	Orchard First Source Capital, Inc., a wholly owned subsidiary of OFSAM
OFS Capital	OFS Capital Corporation
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 full-service provider of capital and leveraged finance solutions to U.S. corporations
PIK	Payment-in-kind. PIK interest and dividends are paid in the form of additional loan principal or preferred securities.

3

RIC	Regulated investment company under the Code
SBCAA	Small Business Credit Availability Act
SEC	U.S. Securities and Exchange Commission
Securities Act	U.S. Securities Act of 1933, as amended

4

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;

• the ability of OFS Advisor, to identify, invest in and monitor companies that meet our investment criteria;

• actual and potential conflicts of interest with OFS Advisor and other affiliates of OFSAM;

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

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

• the use of borrowed money to finance a portion of our investments;

• competition for investment opportunities;

• our ability to raise debt or equity capital as a BDC;

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

• the impact of a protracted decline in the liquidity of credit markets on our business;

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

• uncertain valuations of our portfolio investments; and

• the effect of new or modified laws or regulations governing our operations, including the ability to incur additional leverage under the Small Business Credit Availability Act

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, the forward-looking statements based on 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 “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017. 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 27A of the Securities Act and 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.

5

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Hancock Park Corporate Income, Inc.

Balance Sheets

	March 31, 2018		December 31, 2017
	(unaudited)
Assets:
Non-control/non-affiliate investments at fair value (amortized cost of $8,974,981 and $5,125,032 respectively)	$	9,011,018	$	5,138,659
Cash and cash equivalents	3,635,695		6,259,541
Interest receivable	67,605		49,930
Due from investment adviser under expense limitation agreements, net (see Note 3)	581,568		265,749
Subscriptions receivable	595,802		—
Prepaid expenses and other assets	46,288		65,919
Total assets	$	13,937,976	$	11,779,798
Liabilities:
Administrative fee payable	$	315,306	$	150,976
Accrued professional fees	107,285		159,516
Distribution payable	234,074		191,613
Other accrued expenses	16,874		7,661
Total liabilities	673,539		509,766
Commitments and contingencies ($3,665,531 and $3,255,208, respectively; see Notes 3 and 6)
Net assets:
Common stock, par value of $0.001 per share; 20,000,000 shares authorized as of March 31, 2018, and December 31, 2017; 950,102 and 845,700 shares issued and outstanding as of March 31, 2018, and December 31, 2017, respectively; 44,074 and -0- shares subscribed as of March 31, 2018, and December 31, 2017, respectively	994		846
Paid-in capital in excess of par	13,221,754		11,251,552
Accumulated undistributed net investment income	5,652		4,007
Accumulated net unrealized appreciation on investments	36,037		13,627
Total net assets	13,264,437		11,270,032
Total liabilities and net assets	$	13,937,976	$	11,779,798
Number of shares outstanding or subscribed	994,175		845,700
Net asset value per share	$	13.34	$	13.33

See Notes to Financial Statements.

6

Hancock Park Corporate Income, Inc.

Statement of Operations (unaudited)

	Three Months Ended March 31,
	2018			2017
Investment income
Interest income	$	190,173		$	3,229
Payment-in-kind dividend income	2,502			—
Fee income	665			—
Total investment income	193,340			3,229
Operating expenses
Amortization of deferred offering costs	37,834			118,910
Contractual issuer expenses (see Note 3)	3,751			14,306
Management fees	22,468			1,164
Administrative fees	164,330			67,668
Professional fees	82,442			171,428
Insurance expense	18,198			28,463
Transfer agent fees	23,580			8,194
Other expenses	17,293			10,990
Total operating expenses	369,896			421,123
Less: Expense limitation under agreements with adviser (see Note 3)	(379,873		)	(432,854		)
Net operating expenses	(9,977		)	(11,731		)
Net investment income	203,317			14,960
Net unrealized appreciation on non-control/non-affiliate investments	22,410			520
Net increase in net assets resulting from operations	$	225,727		$	15,480
Net investment income per common share – basic and diluted	$	0.23		$	0.17
Net increase in net assets resulting from operations per common share – basic and diluted	$	0.25		$	0.18
Distributions declared per common share	$	0.26		$	0.18
Basic and diluted weighted average shares outstanding or subscribed	894,434			85,687

See Notes to Financial Statements.

7

Hancock Park Corporate Income, Inc.

Statement of Changes in Net Assets (unaudited)

	Three Months Ended March 31,
	2018			2017
Increase in net assets resulting from operations:
Net investment income	$	203,317		$	14,960
Net unrealized appreciation on investments	22,410			520
Net increase in net assets resulting from operations	225,727			15,480
Distributions to stockholders from:
Accumulated net investment income (see Note 7)	(234,074		)	(21,716		)
Total distributions to stockholders	(234,074		)	(21,716		)
Capital transactions:
Common stock issued or subscribed	2,002,752			379,041
Net increase in net assets resulting from capital transactions	2,002,752			379,041
Net increase in net assets	1,994,405			372,805
Net assets:
Beginning of period	11,270,032			1,045,027
End of period	$	13,264,437		$	1,417,832
Common stock activity:
Common stock outstanding, beginning of period	845,700			74,084
Common stock issued	104,401			17,187
Common stock subscribed, end of period	44,074			15,161
Common stock outstanding or subscribed at end of period	994,175			106,432

See Notes to Financial Statements.

8

Hancock Park Corporate Income, Inc.

Statement of Cash Flows (unaudited)

	Three Months Ended March 31,
	2018			2017
Cash flows from operating activities
Net increase in net assets resulting from operations	$	225,727		$	15,480
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
Net unrealized appreciation on investments	(22,410		)	(520		)
Amortization of Net Loan Fees and discounts on investments	(7,179		)	(38		)
Amortization of deferred offering costs	—			1,321
Paid-in-kind interest and dividend income	(6,858		)	—
Deferral of offering costs reimbursed to adviser	—			(670		)
Purchase of portfolio investments	(4,811,343		)	(98,500		)
Proceeds from principal payments on portfolio investments	961,180			—
Redemption of equity securities	14,251			—
Changes in operating assets and liabilities:
Interest receivable	(17,675		)	197
Due from investment adviser under expense limitation agreements, net	(315,819		)	(131,600		)
Administrative fee payable	164,330			(2,011		)
Other assets and liabilities	(23,387		)	110,492
Net cash used in operating activities	(3,839,183		)	(105,849		)
Cash flows from financing activities
Net proceeds from issuance of common stock	1,406,950			232,401
Distributions paid to stockholders	(191,613		)	—
Net cash provided by financing activities	1,215,337			232,401
Net increase (decrease) in cash and cash equivalents	(2,623,846		)	126,552
Cash and cash equivalents at beginning of period	6,259,541			974,310
Cash and cash equivalents at end of period	$	3,635,695		$	1,100,862
Supplemental disclosure of cash flow information:
Organization and offering costs, and contractual issuer expenses paid by investment adviser and its affiliates (see Note 3)	$	84,646		$	67,005
Amortization of deferred offering costs limited by investment adviser (see Note 3)	37,834			117,589

See Notes to Financial Statements.

9

Hancock Park Corporate Income, Inc.

Schedule of Investments

March 31, 2018

Portfolio Company (1) Investment Type	Industry	Interest Rate (3)	Spread Above Index (3)	Maturity	Principal Amount		Amortized Cost		Fair Value (4)		Percent of Net Assets
Non-control/Non-affiliate Investments
Aegis Acquisition, Inc.	Testing Laboratories
Senior Secured Loan		10.79%	(L +8.50%)	8/24/2021	$	580,000	$	569,775	$	554,170	4.2	%
BayMark Health Services	Outpatient Mental Health & Sub. Abuse Centers
Senior Secured Loan		10.27%	(L +8.25%)	3/1/2025	1,000,000		990,039		990,039		7.5
BJ's Wholesale Club, Inc.	Warehouse Clubs and Supercenters
Senior Secured Loan		9.19%	(L +7.50%)	2/3/2025	468,305		456,354		470,648		3.5
Carolina Lubes, Inc.	Automotive Oil Change and Lubrication Shops
Senior Secured Loan (6)		9.62%	(L +7.25%)	8/23/2022	585,353		576,011		593,769		4.4
Senior Secured Loan (Revolver)		8.94%	(L +7.25%)	8/23/2022	50,893		50,167		50,893		0.4
Preferred Equity (22 units) 14% PIK							71,201		72,615		0.5
					636,246		697,379		717,277		5.3
Cirrus Medical Staffing, Inc.	Temporary Help Services
Senior Secured Loan		10.56%	(L +8.25%)	10/19/2022	508,073		503,073		503,073		3.8
Senior Secured Loan (Revolver)		10.56%	(L +8.25%)	10/19/2022	31,757		31,757		31,757		0.2
					539,830		534,830		534,830		4.0
Confie Seguros Holdings II Co.	Insurance Agencies and Brokerages
Senior Secured Loan		11.48%	(L +9.50%)	5/8/2019	447,640		440,998		438,174		3.2
Constellis Holdings, LLC	Other Justice, Public Order, and Safety Activities
Senior Secured Loan		7.30%	(L +5.00%)	4/21/2024	24,813		24,597		25,110		0.2
Senior Secured Loan		11.30%	(L +9.00%)	4/21/2025	50,000		49,337		50,549		0.4
					74,813		73,934		75,659		0.6

10

Hancock Park Corporate Income, Inc.

Schedule of Investments

March 31, 2018

Portfolio Company (1) Investment Type	Industry	Interest Rate (3)	Spread Above Index (3)	Maturity	Principal Amount		Amortized Cost		Fair Value (4)		Percent of Net Assets
DRS Imaging Services, LLC,	Data Processing, Hosting, and Related Services
Senior Secured Loan		12.55%	(L +10.50%)	3/8/2023	$	553,846	$	543,370	$	543,370	4.1	%
Common Equity (46 units) (7)							46,154		46,154		0.3
					553,846		589,524		589,524		4.4
DuPage Medical Group	Offices of Physicians, Mental Health Specialists
Senior Secured Loan		4.59%	(L +2.75%)	8/15/2024	99,501		99,046		99,536		0.8
Senior Secured Loan		8.78%	(L +7.00%)	8/15/2025	400,000		396,305		402,308		3.0
					499,501		495,351		501,844		3.8
Eblens Holdings, Inc.	Shoe Store
Subordinated Loan		12.00% cash / 1.00% PIK	N/A	1/13/2023	465,874		457,623		458,806		3.5
Common Equity (3,750 units) (7)							37,500		40,388		0.3
					465,874		495,123		499,194		3.8
Online Tech Stores, LLC	Stationery and Office Supplies Merchant Wholesalers
Subordinated Loan		10.50% cash / 1.00% PIK	N/A	8/1/2023	1,001,583		982,171		982,171		7.4
Parfums Holding Company, Inc.	Cosmetics, Beauty Supplies, and Perfume Stores
Senior Secured Loan		11.06%	(L +8.75%)	6/30/2025	480,000		476,291		479,431		3.6
Professional Pipe Holdings, LLC	Plumbing, Heating, and Air-Conditioning Contractors
Senior Secured Loan		12.11%	(L +10.25%)	3/23/2023	514,286		504,051		504,051		3.8
Common Equity (86 units) (7)							85,714		85,714		0.6
					514,286		589,765		589,765		4.4
Rack Merger Sub Inc	Packaging Machinery Manufacturing
Senior Secured Loan		9.07%	(L +7.25%)	10/3/2022	178,889		174,945		177,584		1.3

11

Hancock Park Corporate Income, Inc.

Schedule of Investments

March 31, 2018

Portfolio Company (1) Investment Type	Industry	Interest Rate (3)	Spread Above Index (3)	Maturity	Principal Amount		Amortized Cost		Fair Value (4)		Percent of Net Assets
Resource Label Group, LLC	Commercial Printing (except Screen and Books)
Senior Secured Loan		6.80%	(L +4.50%)	5/26/2023	$	70,460	$	69,852	$	69,948	0.5	%
Senior Secured Loan		10.80%	(L +8.50%)	11/26/2023	178,571		176,230		175,842		1.3
					249,031		246,082		245,790		1.8
RPLF Holdings, LLC	Software Publishers
Common Equity (45,890 units) (7)							45,890		45,890		0.3
The Escape Game, LLC	All other amusement and recreation industries
Senior Secured Loan		10.64%	(L +8.75%)	12/22/2022	500,000		492,726		494,110		3.7
TravelCLICK, Inc.	Computer Systems Design and Related Services
Senior Secured Loan		9.63%	(L +7.75%)	11/6/2021	150,606		150,369		150,606		1.1
Truck Hero, Inc.	Truck Trailer Manufacturing
Senior Secured Loan		6.22%	(L +4.00%)	4/21/2024	16,277		16,134		16,440		0.1
Senior Secured Loan		10.47%	(L +8.25%)	4/21/2025	453,456		457,301		457,872		3.5
					469,733		473,435		474,312		3.6
Total Investments					$	8,810,183	$	8,974,981	$	9,011,018	67.5	%

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

(2) Reserved.

(3) Substantially all of the debt investments bear interest at rates that determined by reference to LIBOR (L), and which are reset monthly or quarterly. For all variable-rate investments the schedule presents the spread over LIBOR and the interest rate as of March 31, 2018. All investments with a stated PIK rate require interest payments with the issuance of additional securities as payment of the entire PIK provision.

(4) Fair value was determined using significant unobservable inputs for all of the Company's investments. See Note 5 for further details.

(5) Reserved.

(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 reported interest rate of 9.62% at March 31, 2018, includes additional interest of 0.68% per annum as specified under the contractual arrangement among the Company and the co‑lenders.

(7) Non-income producing.

12

Hancock Park Corporate Income, Inc.

Schedule of Investments

December 31, 2017

Portfolio Company (1) Investment Type (2)	Industry	Interest Rate (3)	Spread Above Index (3)	Maturity	Principal Amount		Amortized Cost		Fair Value (4)		Percent of Net Assets
Non-control/Non-affiliate Investments
Aegis Acquisition, Inc.	Testing Laboratories
Senior Secured Loan		10.17%	(L +8.50%)	8/24/2021	$	480,000	$	473,120	$	468,910	4.2	%
BJ's Wholesale Club, Inc.	Warehouse Clubs and Supercenters
Senior Secured Loan		8.95%	(L +7.50%)	2/3/2025	468,306		455,924		457,964		4.1
Carolina Lubes, Inc.	Automotive Oil Change and Lubrication Shops
Senior Secured Loan (5)		9.28%	(L +7.25%)	8/23/2022	589,286		579,658		589,836		5.2
Senior Secured Loan (Revolver)		8.59%	(L +7.25%)	8/23/2022	13,393		12,647		13,468		0.1
Preferred Equity (26 units) 14% PIK							82,953		81,889		0.7
					602,679		675,258		685,193		6.0
Confie Seguros Holdings II Co.	Insurance Agencies and Brokerages
Senior Secured Loan		10.98%	(L +9.50%)	5/8/2019	447,640		439,515		435,546		3.9
Constellis Holdings, LLC	Other Justice, Public Order, and Safety Activities
Senior Secured Loan		6.69%	(L +5.00%)	4/21/2024	24,875		24,651		25,128		0.2
Senior Secured Loan		10.69%	(L +9.00%)	4/21/2025	50,000		49,314		49,844		0.4
					74,875		73,965		74,972		0.6
DuPage Medical Group	Offices of Physicians, Mental Health Specialists
Senior Secured Loan		4.42%	(L +2.75%)	8/15/2024	99,750		99,277		99,773		0.9
Senior Secured Loan		8.42%	(L +7.00%)	8/15/2025	400,000		396,181		393,072		3.5
					499,750		495,458		492,845		4.4

13

Hancock Park Corporate Income, Inc.

Schedule of Investments

December 31, 2017

Portfolio Company (1) Investment Type (2)	Industry	Interest Rate (3)	Spread Above Index (3)	Maturity	Principal Amount		Amortized Cost		Fair Value (4)		Percent of Net Assets
Eblens Holdings, Inc.	Shoe Store
Subordinated Loan		12.00% cash / 1.00% PIK	N/A	1/13/2023	$	464,712	$	456,254	$	459,278	4.1	%
Common Equity (3,750 units) (6)							37,500		40,581		0.4
					464,712		493,754		499,859		4.5
Parfums Holding Company, Inc.	Cosmetics, Beauty Supplies, and Perfume Stores
Senior Secured Loan		10.45%	(L +8.75%)	6/30/2025	480,000		476,164		473,420		4.2
Rack Merger Sub Inc	Packaging Machinery Manufacturing
Senior Secured Loan		8.75%	(L +7.25%)	10/3/2022	183,333		179,071		183,333		1.6
Resource Label Group, LLC	Commercial Printing (except Screen and Books)
Senior Secured Loan		6.19%	(L +4.50%)	5/26/2023	70,818		70,177		70,159		0.6
Senior Secured Loan		10.19%	(L +8.50%)	11/26/2023	178,571		176,128		176,558		1.6
					249,389		246,305		246,717		2.2
The Escape Game, LLC	All other amusement and recreation industries
Senior Secured Loan		10.28%	(L +8.75%)	12/20/2022	500,000		492,541		496,271		4.4
TravelCLICK, Inc.	Computer Systems Design and Related Services
Senior Secured Loan		9.32%	(L +7.75%)	11/6/2021	150,606		150,353		150,606		1.3
Truck Hero, Inc.	Truck Trailer Manufacturing
Senior Secured Loan		5.64%	(L +4.00%)	4/21/2024	16,318		16,169		16,339		0.1
Senior Secured Loan		9.89%	(L +8.25%)	4/21/2025	453,456		457,435		456,684		4.1
					469,774		473,604		473,023		4.2
Total Investments					$	5,071,064	$	5,125,032	$	5,138,659	45.6	%

(1) Equity ownership may be held in shares or units of companies affiliated with the portfolio company. As of December 31, 2017, all investments were non-control/non-affiliate investments.

14

Hancock Park Corporate Income, Inc.

Schedule of Investments

December 31, 2017

(2) All of the Company’s investments were qualifying assets under Section 55(a) of the 1940 Act as of the period end. Qualifying assets must represent at least 70% of the Company's assets, as defined under Section 55 of the 1940 Act, at the time of acquisition of any additional non-qualifying assets.

(3) All investments that bear interest at a variable rate are indexed to LIBOR (L), which are reset monthly or quarterly. The Company has provided the spread over LIBOR and current interest rate in effect at December 31, 2017. All investments with a stated PIK rate require interest payments with the issuance of additional securities as payment of the entire PIK provision.

(4) Fair value was determined using significant unobservable inputs for all of the Company's investments. See Note 5 for further details.

(5) 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 reported interest rate of 9.28% at December 31, 2017, includes additional interest of 0.69% per annum as specified under the contractual arrangement among the Company and the co‑lenders.

(6) Non-income producing.

15

Hancock Park Corporate Income, Inc.

Notes to Financial Statements

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 business development company under the 1940 Act and as a regulated investment company under Subchapter M of the Code.

The Company’s objective is to provide stockholders with current income and capital appreciation through its strategic investment focus primarily on debt investments and, to a lesser extent, equity investments primarily in middle-market companies principally in the United States. OFS Advisor manages the day-to-day operations of, and provides investment advisory services to, the Company. OFS Advisor, an affiliate of the Company, a registered investment adviser, and a subsidiary of OFSAM, serves as investment adviser to the Company, and Evolv, a registered investment adviser, serves as sub-adviser to the Company. OFS Advisor also serves as the investment adviser to CLO funds and other assets, including OFS Capital. OFS Capital is a publicly traded BDC with an investment strategy similar to the Company's.

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. In addition, the Company and OFS Advisor have entered into a dealer manager agreement with the Dealer Manager. Placement activities are conducted by the Dealer Manager and participating broker dealers who solicit subscriptions to purchase shares of the Company’s common stock. Fees and expenses paid pursuant to the Dealer Manager Agreement are paid in part by the Company and in part by OFS Advisor.

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 generally accepted accounting principles in the United States of America for interim financial information and pursuant to Accounting Standards Codification 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 interim 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. Certain amounts in the prior period financial statements have been reclassified to conform to the current year presentation. These 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 10K for the year ended December 31, 2017. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the full year.

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.

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 2017 Annual Report on Form 10K.

Concentration of credit risk: Aside from its debt instruments, financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits at financial institutions. At various times during the year, the Company may exceed the federally insured limits. To mitigate this risk, the Company places cash deposits only with high credit quality institutions. Management believes this risk of loss is minimal. The amount of loss due to credit risk from debt investments if borrowers fail to perform according to the terms of the contracts, and the collateral or other security for those instruments proved to be of no value to the Company, is equal to the Company's recorded investment in debt instruments and the unfunded loan commitments as disclosed in Note 6.

New accounting standards:In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The guidance in this ASU supersedes the revenue recognition requirements in Revenue Recognition (Topic 605). Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in ASU No. 2014-09 are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The adoption of this guidance did not have a material impact on the Company’s financial statements. The Company did not adopt any other new accounting pronouncements during the three months ended March 31, 2018 that had or is expected to have a material impact to the Company's financial statements.

The following table discusses recently issued ASUs, as issued by the FASB yet to be adopted by the Company:

16

Hancock Park Corporate Income, Inc.

Notes to Financial Statements

Standard	Description	Effect of Adoption on the the financial statements
Standards that are not yet adopted
ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities	Shortens the amortization period for certain purchased callable debt securities held at a premium to the earliest call date. Securities held at a discount are to continue to be amortized to maturity.	Annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the ASU in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. The adoption of ASU 2017-08 is not expected to have a material effect on the Company's financial statements.
ASU 2017-12, Derivatives and Hedging, Targeted Improvements to Accounting for Hedging Activities	Eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires, for qualifying hedges, the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. Additionally, the guidance also expands an entity's ability to apply hedge accounting for nonfinancial and financial risk components, simplifies the hedge documentation and hedge effectiveness assessment requirements, and modifies certain disclosure requirements.	Annual reporting periods beginning after December 15, 2018, including interim periods within those years. Early adoption is permitted. The Company is currently evaluating the impact this ASU will have on the Company’s financial position or disclosures.

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, when the Company satisfied the Minimum Offering Requirement. Under the terms of the Investment Advisory Agreement, which are in accordance with the 1940 Act and subject to the overall supervision of the Company’s 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 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 CLO funds and other assets, including OFS Capital, a publicly traded BDC with an investment strategy similar to the Company.

OFS Advisor receives fees for providing services, consisting of two components: a base management fee and an incentive fee. From August 30, 2016, the effective date of the Investment Advisory Agreement, through May 19, 2017, the base management fee was calculated at an annual rate of 2.0% and based on the average value of the Company’s total assets (other than cash and cash equivalents but including assets purchased with borrowed amounts and including assets owned by any consolidated entity) at the end of the two most recently completed calendar quarters, adjusted for any share issuances or repurchases during the quarter. On May 19, 2017, OFS Advisor agreed to permanently reduce the base management fee from 2.0% per annum to 1.25% per annum. The sub-adviser will continue to receive the amount of management fees allocated to it pursuant to the Investment Sub-Advisory Agreement, subject to the reduced base management fee.

The base management fee is payable quarterly in arrears and was $22,468 and $1,164, for the three months ended March 31, 2018 and 2017, respectively.

17

Hancock Park Corporate Income, Inc.

Notes to Financial Statements

The incentive fee has two parts. The first part ("Part One") 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.

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 ("Part Two") 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 through the end of such year, less all previous amounts paid in respect of the Capital Gain Fee.

The Company accrues the Capital Gain Fee if, on a cumulative basis, the sum of net realized capital gains and (losses) plus net unrealized appreciation and (depreciation) is positive. 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 Gains Fee accrued is no more than 20% of the sum of net realized capital gains (losses) plus net unrealized appreciation (depreciation).

Unless terminated earlier as described below, the Investment Advisory Agreement will remain in effect for a period of two years from August 30, 2016, and will remain in effect from year-to-year thereafter if approved annually by the Company’s board of directors 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 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.

Investment Sub-Advisory Agreement: Evolv serves as the Company’s sub-adviser pursuant to the Investment Sub-Advisory Agreement, which became effective on August 30, 2016, when the Minimum Offering Requirement was satisfied. Evolv assists OFS Advisor with the management of the Company’s activities and operations. On an annualized basis, Evolv earns 20% of the fees paid by the Company to OFS Advisor under the Investment Advisory Agreement with respect to each year, which, when due, are payable by OFS Advisor to Evolv quarterly in arrears. In addition, certain registered representatives of Evolv are also representatives of the dealer manager of the Offering.

Unless terminated earlier as described below, the Investment Sub-Advisory Agreement will remain in effect for a period of two years from August 30, 2016, and will remain in effect from year-to-year thereafter if approved annually by the Company’s board of directors, including a majority of the Company’s directors who are not interested persons, or by the affirmative vote of the holders of a majority of the Company’s outstanding voting securities. The Investment Sub-Advisory Agreement may be

18

Hancock Park Corporate Income, Inc.

Notes to Financial Statements

terminated at any time by Evolv upon not less than 60 days’ prior written notice to the Company and OFS Advisor, or by the Company or OFS Advisor upon not less than 60 days’ prior written notice to Evolv and upon (i) the vote of a majority of the Company's outstanding voting securities or (ii) the vote of a majority of the Company’s board of directors, including a majority of the independent directors. The Investment Sub-Advisory Agreement will automatically terminate in the event of its assignment. For the three year period following termination of the Investment Sub-Advisory Agreement, other than for cause, as such term is defined in the Investment Sub-Advisory Agreement, Evolv will be entitled to receive from OFS Advisor a percentage (up to 20%) of the management fee and incentive fees received by OFS Advisor with respect to every quarter in such three-year period.

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. 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.

Administrative fees were $164,330 and $67,668, for the three months ended March 31, 2018 and 2017, respectively.

Expense Limitation Agreements: OFS Advisor limits the Company's incurred expenses under two agreements: the Investment Advisory Agreement, which contains provisions limiting organization and offering costs, and Contractual Issuer Expenses; and an Expense Support Agreement, which limits all other operating expenses. Expense limitations provided under the Investment Advisory Agreement and Expense Support Agreement for the three months ended March 31, 2018 and 2017, are presented below:

	Three Months Ended March 31,
	2018		2017
Organization and offering costs, and Contractual Issuer Expenses limitations under Investment Advisory Agreement	$	10,603	$	126,459
Operating expense limitations under Expense Support Agreement	369,270		306,395
Total expense limitations under agreements with OFS Advisor	$	379,873	$	432,854

19

Hancock Park Corporate Income, Inc.

Notes to Financial Statements

The Company is conditionally obligated to reimburse OFS Advisor for aggregate expense support provided of $3,075,896 and $2,688,244 at March 31, 2018, and December 31, 2017, respectively, as presented below:

	March 31, 2018		December 31, 2017
Unreimbursed costs under Investment Advisory Agreement:
Organization costs	$	323,117	$	332,044
Offering costs:
Unamortized as of balance sheet date	95,924		88,146
Amortized as of balance sheet date	425,977		409,933
Contractual Issuer Expenses	233,011		229,525
Unreimbursed operating expense support under Expense Support Agreement	1,997,867		1,628,596
Total conditional reimbursement obligation under expense limitation agreements with OFS Advisor	$	3,075,896	$	2,688,244

At March 31, 2018, the Company was due $581,568 from OFS Advisor under the Expense Support Agreement, net of $35,103 owed for management fees and $68,978 owed under the reimbursement provisions of the Investment Advisory Agreement. The conditional reimbursement provisions of the Investment Advisory Agreement and Expense Support Agreement are discussed below.

Organization and Offering Costs, and Contractual Issuer Expense Limitations:The Company is conditionally liable to for organizational and offering costs, and Contractual Issuer Expenses that OFS Advisor and its affiliates have incurred on its behalf under the terms of the Investment Advisory Agreement. The Investment Advisory Agreement entitles OFS Advisor to receive up to 1.5% of the gross proceeds raised in the Offering until all reimbursable organization and offering costs paid by OFS Advisor and its affiliates have been recovered. Organization and offering expenses incurred by OFS Advisor or its affiliates will be eligible for reimbursement for three years from the date incurred. Unreimbursed organization and offering costs, and Contractual Issuer Expenses as of March 31, 2018, are summarized below:

Period incurred	Unreimbursed Total
Period from December 8, 2015 (inception) through December 31, 2015	$	4,507
Three months ended March 31, 2016	333,798
Three months ended June 30, 2016	268,183
Three months ended September 30, 2016	177,768
Three months ended December 31, 2016	35,649
Three months ended March 31, 2017	50,512
Three months ended June 30, 2017	35,369
Three months ended September 30, 2017	43,760
Three months ended December 31, 2017	79,120
Three months ended March 31, 2018	49,363
Total unreimbursed organization and offering costs, and Contractual Issuer Expenses	$	1,078,029

Expense Support Agreement: The Expense Support Agreement is designed to ensure no portion of the Company’s distribution to stockholders will be paid from its Offering proceeds, and provides for expense-reduction payments from OFS Advisor to the Company in any quarterly period in which the Company’s cumulative distributions to stockholders exceeds its cumulative distributable ordinary income and net realized gains ("Cumulative Taxable Income"). Cumulative distributions to stockholders may exceed Cumulative Taxable Income to the extent of cumulative tax-basis return-of-capital distributions received by the Company from its investments without resulting in an expense limitation payment from OFS Advisor. The Expense Support Agreement provides for reimbursement of these payments by the Company to OFS Advisor, however, such liability shall only accrue (i) to the extent they do not cause the then-current annualized year-to-date and quarterly "Other Operating Expense Ratio" (defined below) to exceed such ratios for the annual and quarterly periods, respectively, for which the Company will reimburse OFS Advisor as presented in the table below, and (ii) if the then-current annualized rate of distribution per share

20

Hancock Park Corporate Income, Inc.

Notes to Financial Statements

equals or exceeds the annualized rate of distribution per share of the supported period for which the Company will reimburse OFS Advisor. The Other Operating Expense Ratio is defined as total operating expenses reported in the statement of operations excluding interest expense, management fees, incentive fees, organization cost, amortization of deferred offering costs, and Contractual Issuer Expenses as a percentage of net assets. Payments under the Expense Support Agreement will be eligible for reimbursement for three years from the date accrued.

Unreimbursed support for operating expenses provided under the Expense Support Agreement as of March 31, 2018, is 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)
Three months ended September 30, 2016	$	237,837	75.2	%	102.7	%	7.0%(2)
Three months ended December 31, 2016	169,115		64.3	%	102.7	%	7.0%(2)
Three months ended March 31, 2017	306,395		82.0	%	18.1	%	7.0%
Three months ended June 30, 2017	283,883		19.0	%	18.1	%	7.0%
Three months ended September 30, 2017	314,988		10.7	%	18.1	%	7.0%
Three months ended December 31, 2017	316,379		8.1	%	18.1	%	7.0%
Three months ended March 31, 2018	369,270		10.1	%	n/m(3)		7.0%
Total unreimbursed operating expense limitations provided under Expense Support Agreement	$	1,997,867

(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 public offering price per share as of such date.

(2) Agreed-upon annualized distribution rate per share for the purposes of determining reimbursement eligibility. No distribution was actually declared or paid from inception through December 31, 2016.

(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, 2018.

Note 4. Investments

As of March 31, 2018, the Company had loans to 18 portfolio companies, of which 83% were senior secured loans and 17% were subordinated loans, at fair value, as well as equity investments in five of these portfolio companies. At March 31, 2018, investments consisted of the following:

	Amortized Cost		Percentage of Net Assets		Fair Value		Percentage of Net Assets
Senior secured debt investments	$	7,248,728	54.6	%	$	7,279,280	54.8	%
Subordinated debt investments	1,439,794		10.9		1,440,977		10.9
Preferred equity	156,915		1.2		158,329		1.2
Common equity	129,544		1.0		132,432		1.0
Total	$	8,974,981	67.7	%	$	9,011,018	67.9	%

21

Hancock Park Corporate Income, Inc.

Notes to Financial Statements

At March 31, 2018, all of the Company’s investments were 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:						Percentage of:
	Amortized Cost		Amortized Cost		Net Assets		Fair Value		Fair Value		Net Assets
Administrative and Support and Waste Management and Remediation Services
Temporary Help Services	$	534,830	6.1	%	4.1	%	$	534,830	6.0	%	4.1	%
Arts, Entertainment, and Recreation
All Other Amusement and Recreation Industries	492,726		5.5		3.7		494,110		5.5		3.7
Construction
Plumbing, Heating, and Air-Conditioning Contractors	589,765		6.6		4.4		589,765		6.5		4.4
Finance and Insurance
Insurance Agencies and Brokerages	440,998		4.9		3.3		438,174		4.9		3.3
Health Care and Social Assistance
Offices of Physicians, Mental Health Specialists	495,351		5.5		3.7		501,844		5.6		3.8
Outpatient Mental Health and Substance Abuse Centers	990,039		11.0		7.5		990,039		11.0		7.5
Information
Data Processing, Hosting, and Related Services	589,524		6.6		4.4		589,524		6.5		4.4
Software Publishers	45,890		0.5		0.3		45,890		0.5		0.3
Manufacturing
Commercial Printing (except Screen and Books)	246,082		2.7		1.9		245,790		2.7		1.9
Packaging Machinery Manufacturing	174,945		1.9		1.3		177,584		2.0		1.3
Truck Trailer Manufacturing	473,435		5.3		3.6		474,312		5.3		3.6
Other Services (except Public Administration)
Automotive Oil Change and Lubrication Shops	697,379		7.8		5.3		717,277		8.0		5.4
Professional, Scientific, and Technical Services
Computer Systems Design and Related Services	150,369		1.7		1.1		150,606		1.7		1.1
Testing Laboratories	569,775		6.3		4.3		554,170		6.1		4.2
Public Administration
Other Justice, Public Order, and Safety Activities	73,934		0.8		0.6		75,659		0.8		0.6
Retail Trade
Cosmetics, Beauty Supplies, and Perfume Stores	476,291		5.3		3.6		479,431		5.3		3.6
Warehouse Clubs and Supercenters	456,354		5.1		3.4		470,648		5.2		3.5
Shoe Store	495,123		5.5		3.7		499,194		5.5		3.8
Wholesale Trade
Stationery and Office Supplies Merchant Wholesalers	982,171		10.9		7.4		982,171		10.9		7.4
	$	8,974,981	100.0	%	67.6	%	$	9,011,018	100.0	%	67.9	%

22

Hancock Park Corporate Income, Inc.

Notes to Financial Statements

As of December 31, 2017, the Company had loans to 13 portfolio companies, of which 91% were senior secured loans and 9% were subordinated loans, at fair value, as well as equity investments in two of these portfolio companies. At December 31, 2017, investments consisted of the following:

	Amortized Cost		Percentage of Net Assets		Fair Value		Percentage of Net Assets
Senior secured debt investments	$	4,548,325	40.4	%	$	4,556,911	40.4	%
Subordinated debt investments	456,254		4.0		459,278		4.1
Preferred equity	82,953		0.7		81,889		0.7
Common equity	37,500		0.3		40,581		0.4
Total	$	5,125,032	45.4	%	$	5,138,659	45.6	%

At December 31, 2017, all of the Company’s investments were 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:						Percentage of:
	Amortized Cost		Amortized Cost		Net Assets		Fair Value		Fair Value		Net Assets
Arts, Entertainment, and Recreation
All other amusement and recreation industries	$	492,541	9.6	%	4.4	%	$	496,271	9.7	%	4.4	%
Health Care and Social Assistance
Offices of Physicians, Mental Health Specialists	495,458		9.7		4.4		492,845		9.6		4.4
Finance and Insurance
Insurance Agencies and Brokerages	439,515		8.7		4.0		435,546		8.5		3.8
Professional, Scientific, and Technical Services
Computer Systems Design and Related Services	150,353		2.9		1.3		150,606		2.9		1.3
Testing Laboratories	473,120		9.2		4.2		468,910		9.1		4.2
Manufacturing
Commercial Printing (except Screen and Books)	246,305		4.8		2.2		246,717		4.8		2.2
Packaging Machinery Manufacturing	179,071		3.5		1.6		183,333		3.6		1.6
Truck Trailer Manufacturing	473,604		9.2		4.2		473,023		9.2		4.2
Other Services (except Public Administration)
Automotive Oil Change and Lubrication Shops	675,258		13.2		6.0		685,193		13.3		6.1
Public Administration
Other Justice, Public Order, and Safety Activities	73,965		1.4		0.7		74,972		1.5		0.7
Retail Trade
Cosmetics, Beauty Supplies, and Perfume Stores	476,164		9.3		4.2		473,420		9.2		4.2
Warehouse Clubs and Supercenters	455,924		8.9		4.0		457,964		8.9		4.1
Shoe Store	493,754		9.6		4.4		499,859		9.7		4.4
	$	5,125,032	100.0	%	45.6	%	$	5,138,659	100.0	%	45.6	%

Note 5. Fair Value of Financial Instruments

The Company’s investments are valued at fair value as determined in good faith by Company management under the supervision, and review and approval of the Board. These fair values are determined in accordance with a documented valuation policy and a consistently applied multi-step valuation process as described below:

• For each debt investment, a basic credit risk rating review process is completed. The risk rating on every credit facility is reviewed and either reaffirmed or revised by OFS Advisor’s investment committee.

23

Hancock Park Corporate Income, Inc.

Notes to Financial Statements

• Each portfolio company or investment is valued by OFS Advisor.

• The preliminary valuations are documented and are then submitted to OFS Advisor’s investment committee for ratification.

• Third-party valuation firm(s) provide valuation services as requested, by reviewing the investment committee’s preliminary valuations. OFS Advisor’s investment committee’s preliminary fair value conclusions on each of the Company’s assets for which sufficient market quotations are not readily available are reviewed and assessed by a third-party valuation firm at least once in every 12-month period, and more often as determined by the audit committee of the Company’s Board or required by the Company’s valuation policy. Such valuation assessment may be in the form of positive assurance, range of values or other valuation method based on the discretion of the Company’s Board.

• The audit committee of the Board reviews the preliminary valuations of OFS Advisor’s investment committee and independent valuation firms and, if appropriate, recommends the approval of the valuations by the Board.

• The Company’s Board discusses valuations and determines the fair value of each investment in the portfolio in good faith based on the input of OFS Advisor, the audit committee and, where appropriate, the respective independent valuation firm.

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 significant management 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 assesses the levels of the investments at each measurement date, and transfers between levels are recognized on the measurement date. All of the Company’s investments, which are measured at fair value, were categorized as Level 3 based upon the lowest level of significant input to the valuations. There were no transfers among Level 1, 2 and 3 for three months ended March 31, 2018 and 2017.

Each quarter, for investments for which unadjusted quoted prices in active markets are not available, the Company assesses whether market quotations, prices from pricing services or bids from brokers or dealers (collectively, "Indicative Prices") are available, as well as the Company's ability to transact at such Indicative Prices. Investments for which sufficient Indicative Prices exist are generally valued consistent with such Indicative Prices. The Company periodically corroborates observed Indicative Prices with its actual investment purchase prices and/or other valuation techniques, such as the discounted cash flow method described below. Based on the corroborating analysis and the experience of the Company’s management in purchasing and selling these investments, the Company believes that these Indicative Prices may be reasonable indicators of fair value. In certain instances, the Company may partially rely on Indicative Prices when the Company determines such Indicative Prices are not of sufficient strength to rely on as the sole indication of fair value. In such instances, the Company applies a weighting factor to the Indicative Price and an alternative fair value analysis, typically a discounted cash flow analysis. The weighting factor placed on an Indicative Price is applied consistently based upon its relative strength, which considers, among other factors, and when available, the depth and liquidity of the Indicative Price. Weighting factors are not significant to the overall fair value measurement, but rather are applied to incorporate relevant market data when available.

24

Hancock Park Corporate Income, Inc.

Notes to Financial Statements

In addition, each quarter, the Company assesses whether an arm’s length transaction occurred in the same security, including the Company's new investments during the quarter, the cost of which (“Transaction Prices”), may be considered a reasonable indication of fair value for up to three months after the transaction date.

Due to the private nature of this marketplace (meaning actual transactions are not publicly reported), and the non-binding nature of the Indicative Prices, and the general inability to observe the input for the full length of the term of an investment, the Company believes that these valuation inputs are classified as Level 3 within the fair value hierarchy.

In the absence of sufficient, actionable Indicative Prices or Transaction Prices, as an indication of fair value, and consistent with the policies and methodologies adopted by the Board, the Company performs detailed valuations of its debt and equity investments, including an analysis on the Company’s unfunded loan commitments, using both the market and income approaches as appropriate. There is no one methodology to estimate fair value and, in fact, for any one portfolio company, fair value is generally best expressed as a range of values. The Company may also engage one or more independent valuation firm(s) to conduct independent appraisals of its investments to develop the range of values, from which the Company derives a single estimate of value. Under the income approach, the Company typically prepares and analyzes discounted cash flow models to estimate the present value of future cash flows of either an individual debt investment or of the underlying portfolio company itself.

The primary method used to estimate the fair value of the Company's debt investments is the discounted cash flow method. However, if there is deterioration in credit quality or a debt investment is in workout status, the Company may consider other methods in determining the fair value, including the value attributable to the debt investment from the enterprise value of the portfolio company or the proceeds that would be received in a liquidation analysis. The discounted cash flow approach to determining fair value (or a range of fair values) involves applying an appropriate discount rate(s) to the estimated future cash flows using various relevant factors depending on investment type, including the latest arm’s length or market transactions involving the subject security, a benchmark credit spread or other indication of market yields, and company performance. The valuation based on the inputs determined to be the most reasonable and probable is used as the fair value of the investment, which may include a weighting factor applied to multiple valuation methods. The determination of fair value using these methodologies may take into consideration a range of factors including, but not limited to, the price at which the investment was acquired, the nature of the investment, local market conditions, trading values on public exchanges for comparable securities, current and projected operating performance, financing transactions subsequent to the acquisition of the investment and anticipated financing transactions after the valuation date.

The primary method used to estimate the fair value of the Company's equity securities is the market approach. Under the market approach, the Company estimates the enterprise value of portfolio companies. Typically, the enterprise value of a private company is based on multiples of EBITDA, net income, revenues, or other relevant basis. The valuation based on the inputs determined to be the most reasonable and probable is used as the fair value of the investment, which may include a weighting factor applied to multiple valuation methods. In estimating the enterprise value of a portfolio company, the Company analyzes various factors consistent with industry practice, including, but not limited to, the price at which the investment was acquired, the nature of the investment, local market conditions, trading values on public exchanges for comparable securities, portfolio companies’ historical and projected financial results, applicable market trading and transaction comparables, the nature and realizable value of any collateral, financing transactions subsequent to the acquisition of the investment and anticipated financing transactions after the valuation date.

Application of these valuation methodologies involves a significant degree of judgment by management. 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. Market risk is the potential for changes in the value due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments are traded.

The following table provides quantitative information about the Company’s significant Level 3 fair value input to the Company’s fair value measurement as of March 31, 2018, and December 31, 2017. In addition to the technique and input noted in the tables below, according to the Company’s valuation policy, the Company may also use other valuation techniques and methodologies when determining the Company’s fair value measurements. The table below is not intended to be exhaustive, but rather provides information on the significant Level 3 inputs as they relate to the Company’s fair value measurements.

25

Hancock Park Corporate Income, Inc.

Notes to Financial Statements

	Fair Value at March 31, 2018 (1)		Valuation techniques	Unobservable input	Range (Weighted average)
Debt investments:
Senior secured	$	4,060,625	Discounted cash flow	Discount rate	5.72% - 15.08% (11.88%)
Subordinated	458,806		Discounted cash flow	Discount rate	14.32% - 14.32% (14.32%)
Equity investments:
Preferred equity	72,615		Market approach	EBITDA multiples	8.95x - 8.95x (8.95x)
Common equity	40,388		Market approach	EBITDA multiples	7.90x - 7.90x (7.90x)

(1) Excludes $3,218,655, $982,171, $85,714, and $92,044 of senior secured debt investments, subordinated debt investment, preferred equity, and common equity, respectively, valued at a Transaction Price.

	Fair Value at December 31, 2017 (1)		Valuation techniques	Unobservable input	Range (Weighted average)
Debt investments:
Senior secured	$	3,403,004	Discounted cash flow	Discount rate	5.45% - 14.65% (11.22%)
	457,964		Indicative Prices	Broker-dealers' quotes	N/A
Subordinated	459,278		Discounted cash flow	Discount rate	14.20% - 14.20% (14.20%)
Equity investments:
Preferred equity	81,889		Market approach	EBITDA multiples	8.95x - 8.95x (8.95x)
Common equity	40,581		Market approach	EBITDA multiples	7.90x - 7.90x (7.90x)

(1) Excludes $695,943 of senior secured debt investments valued at a Transaction Price.

Changes in market credit spreads or the credit quality of the underlying portfolio company (both of which could impact the discount rate), among other things, could have a significant impact on debt fair value. 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.

26

Hancock Park Corporate Income, Inc.

Notes to Financial Statements

The following tables present changes in the investment measured at fair value using Level 3 inputs for the three months ended March 31, 2018:

	Senior Secured Debt Investments			Subordinated Debt Investments			Preferred Equity			Common Equity			Total
Level 3 assets, January 1, 2018	$	4,556,911		$	459,278		$	81,889		$	40,581		$	5,138,659
Net unrealized appreciation on investments	21,969			(1,841		)	2,475			(193		)	22,410
Amortization of Net Loan Fees	6,384			795			—			—			7,179
Paid-in kind interest and dividend income	1,611			2,745			2,502			—			6,858
Proceeds from principal payments on portfolio investments	(961,180		)	—			—			—			(961,180		)
Sale/redemption of portfolio investments	—			—			(14,251		)	—			(14,251		)
Purchase of portfolio investments	3,653,585			980,000			85,714			92,044			4,811,343
Level 3 assets, March 31, 2018	$	7,279,280		$	1,440,977		$	158,329		$	132,432		$	9,011,018

Net unrealized appreciation for the three months ended March 31, 2018, reported in the Company’s statements of operations attributable to the Company’s Level 3 asset held at period end was $22,410.

	Senior Secured Debt Investments
Level 3 assets, January 1, 2017	$	98,652
Net unrealized appreciation on investments	520
Amortization of Net Loan Fees	38
Purchase of portfolio investments	150,000
Level 3 assets, March 31, 2017	$	249,210

GAAP requires disclosure of the fair value of financial instruments for which it is practical to estimate such value, and the methods and significant assumptions used to estimate fair value. This requirement excludes non-financial assets and liabilities. Accordingly, the required fair value disclosures provide only a partial estimate of the fair value of the Company. The Company believes that the carrying amounts of its other financial instruments such as cash, and accounts receivable and payable approximate the fair value of such items due to the short maturity of such instruments.

Note 6. Commitments and Contingencies

Unfunded commitments to the Company's portfolio companies as of March 31, 2018, were as follows:

Name of Portfolio Company	Investment Type	March 31, 2018
Carolina Lubes, Inc.	Senior Secured Revolver	$	29,464
Cirrus Medical Staffing, Inc.	Senior Secured Revolver	60,171
The Escape Game, LLC	Senior Secured Loan	500,000
		$	589,635

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 March 31, 2018.

27

Hancock Park Corporate Income, Inc.

Notes to Financial Statements

In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties that provide general indemnifications. 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 occurred. The Company believes the risk of any material obligation under these indemnifications to be low.

Note 7. Federal Income Tax

The determination of the tax attributes of the Company’s distributions is made annually as of the end of its fiscal year based on its ICTI and distributions for the full year. If the tax characteristics of the Company’s $234,074 distributions declared during 2018, were determined as of March 31, 2018, all distributions would be ordinary income.

The Company records reclassifications to its capital accounts related to permanent differences between the GAAP and tax treatment of net investment income and realized gains and losses. Reclassifications for the three months ended March 31, 2018 and 2017, were as follows:

	Three Months Ended March 31,
	2018			2017
Paid-in capital in excess of par	$	(30,983	)	$	(6,757	)
Undistributed net investment income	30,983			6,757

The tax-basis cost of investments and associated tax-basis gross unrealized appreciation (depreciation) inherent in the fair value of investments as of March 31, 2018, and December 31, 2017, were as follows:

	March 31, 2018			December 31, 2017
Tax-basis amortized cost of investments	$	8,969,330		$	5,121,025
Tax-basis gross unrealized appreciation on investments	60,501			32,435
Tax-basis gross unrealized depreciation on investments	(18,813		)	(14,801		)
Tax-basis net unrealized appreciation on investments	41,688			17,634
Fair value of investments	$	9,011,018		$	5,138,659

28

Hancock Park Corporate Income, Inc.

Notes to Financial Statements

Note 8. Financial Highlights

The following is a schedule of financial highlights for the three months ended March 31, 2018 and 2017:

	Three Months Ended March 31,
	2018			2017
Per share data:
Net asset value per share at beginning of period	$	13.33		$	13.33
Distributions (1)	(0.26		)	—
Net investment income	0.23			0.17
Net unrealized appreciation on non-control/non-affiliate investments	0.02			0.01
Issuance of common stock (2)	0.02			(0.19		)
Net asset value per share at end of period	$	13.34		$	13.32
Total return based on net asset value (3)	2.0		%	(0.1		)%
Shares issued or subscribed at end of period	994,175			106,432
Weighted average shares issued or subscribed	894,434			85,687
Ratio/Supplemental Data
Average net asset value (4)	$	12,267,235		$	1,231,430
Net asset value at end of period	$	13,264,437		$	1,417,832
Net investment income	$	203,317		$	14,960
Ratio of total operating expenses to average net assets (5)	(0.3		)%	(3.8		)%
Ratio of net investment income to average net assets (5)	6.6		%	4.9		%
Portfolio turnover	13.6		%	—		%

(1) The per share data for distributions is the actual amount of distributions declared per share during the period.

(2) 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 Company’s continuous public offering and the dilutive or anti-dilutive impact from significant changes in weighted-average shares outstanding during the period.

(3) Calculation is ending net asset value less beginning net asset value, adjusting for distributions reinvested at the Company’s most recent quarter-end net asset value prior to the respective payment date of the distributions.

(4) Based on net asset values as the end of the indicated and preceding calendar quarter.

(5) Annualized.

Note 9. Capital Transactions

Common stock transactions

Below is a summary of transactions with respect to shares of the Company’s common stock issued in the Offering during the three months ended March 31, 2018 and 2017:

	Three Months Ended March 31,
	2018				2017
	Shares	Amount			Shares	Amount
Gross proceeds from the Offering	148,475	$	2,065,530		28,047	$	407,000
Commissions and dealer manager fees	—	(124,744		)	—	(27,959		)
Dealer manager fees paid by OFS Advisor	—	61,966			—	—
Net proceeds to the Company	148,475	$	2,002,752		28,047	$	379,041

On May 19, 2017, OFS Advisor agreed to pay the dealer manager fee on subsequent sales of shares of our common stock in the Offering. Payments of dealer manager fees by OFS Advisor are not subject to reimbursement by the Company.

29

Hancock Park Corporate Income, Inc.

Notes to Financial Statements

Distributions

The following table reflects the cash distributions per share that the Company declared on its common stock during the three months ended March 31, 2018 and 2017. Stockholders of record as of each respective record date were entitled to receive the distribution.

Date Declared	Record Dates	Payment Date	Amount Per Share		Cash Distribution
Three Months Ended March 31, 2018
January 29, 2018	January 29, 2018, February 26, 2018, March 28, 2018	April 16, 2018	$	0.0875	$	234,074
Three Months Ended March 31, 2017
January 31, 2017	January 31, 2017	April 21, 2017	$	0.0875	$	6,859
February 27, 2017	February 28, 2017, March 31, 2017	April 21, 2017	0.0875		14,857

The above distributions were funded, in part, through the reimbursement of certain operating expenses by OFS Advisor under the Expense Support Agreement. The Expense Support Agreement is designed to ensure no portion of the Company's distribution to stockholders will be paid from Offering proceeds, and will provide for expense reduction payments to the Company in any quarterly period in which the Company's cumulative distributions to stockholders exceeds the Company's cumulative ICTI and net realized gains. The Expense Support Agreement may be terminated by OFS Advisor, without payment of any penalty, with or without notice to the Company.

Note 10. Subsequent Events Not Disclosed Elsewhere

On April 2, 2018, the Company collected $595,802 related to subscriptions receivable as of March 31, 2018. Subsequently, the Company sold an additional 104,622 common shares for additional net proceeds of $1,412,900.

On April 26, 2018, the Board declared a distribution of $0.0875 per common share, payable on July 16, 2018, to stockholders of record on each of April 26, 2018, May 29, 2018, and June 27, 2018.

30

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.

Overview

We are an externally managed, closed-end, non-diversified management investment company and have elected to be treated as a BDC under the 1940 Act. We were formed on December 8, 2015, as a corporation under the laws of Maryland. Our investment objective is to provide our stockholders with both current income and capital appreciation primarily through debt investments and, to a lesser extent, equity investments. Our investment strategy focuses primarily on investments in middle-market companies in the United States. We use the term “middle-market” to refer to companies that may exhibit one or more of the following characteristics: number of employees between 150 and 2,000; revenues between $15 million and $300 million; annual EBITDA, between $3 million and $50 million; generally, private companies owned by private equity firms or owners/operators; and enterprise value between $10 million and $500 million. For additional information about how we define the middle-market, see "Item 1. Business—Investment Criteria/Guidelines" in our Annual Report on Form 10-K for the year ended December 31, 2017.

While our investment strategy focuses primarily on middle-market companies in the United States, including senior secured loans, which includes first-lien, second-lien and unitranche loans as well as subordinated loans and, to a lesser extent, warrants and other equity securities, we also may invest up to 30% of our portfolio in opportunistic investments of non-eligible portfolio companies. 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 of middle-market 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 intend to raise up to $200,000,000 through the Offering, in reliance on exemptions from the registration requirements of the Securities Act. Placement activities are conducted by our officers and OFS Advisor. In addition, we have entered, and may enter, into additional agreements with placement agents or broker-dealers to solicit investor capital commitments (“Capital Commitments”). In particular, we and OFS Advisor have entered into the Dealer Manager Agreement with Dealer Manager and certain participating broker-dealers to solicit Capital Commitments. Fees and expenses paid pursuant to these agreements will be paid in part by us and in part by OFS Advisor. On August 30, 2016, Funding I, a subsidiary of OFSAM, purchased 74,074 shares of our common stock in the Offering for gross proceeds of $1,000,000 ("Minimum Offering Requirement"), or $13.50 per share. No selling commissions or dealer manager fees were paid by us in connection with this purchase. On May 19, 2017, OFS Advisor agreed to pay the dealer manager fee on subsequent sales of shares of our common stock in the Offering. Payments of dealer manager fees by OFS Advisor are not subject to reimbursement by us. Since commencing operations on August 30, 2016, we have sold a total of 1,098,798 shares of common stock for total gross proceeds of $15,127,330.

Our investment activities are managed by OFS Advisor and supervised by our Board, a majority of whom are independent of us, OFS Advisor and its affiliates. Under the Investment Advisory Agreement we have agreed to pay OFS Advisor an annual base management fee, and an incentive fee based on our investment performance. From August 30, 2016, the effective date of the Investment Advisory Agreement, through May 19, 2017, the base management fee was calculated at an annual rate of 2.0% and based on the average value of our total assets (other than cash and cash equivalents but including assets purchased with borrowed amounts and including assets owned by any entity) at the end of the two most recently completed calendar quarters, adjusted for any share issuances or repurchases during the quarter. On May 19, 2017, OFS Advisor agreed to permanently reduce the base management fee from 2.0% per annum to 1.25% per annum. Our sub-adviser will continue to receive the amount of management fees allocated to it pursuant to the Investment Sub-Advisory Agreement, subject to the reduced base management fee. OFS Advisor also serves as the investment adviser to CLO funds and other assets, including OFS Capital, a publicly traded BDC with an investment strategy similar to the Company's. Evolv, a registered investment adviser, serves as our sub-adviser pursuant to the Investment Sub-Advisory Agreement.

We have also entered into an Administration Agreement with OFS Services. Under our Administration Agreement, we have agreed to reimburse OFS Services for our allocable portion (subject to the review and approval of our independent directors) of overhead and other expenses incurred by OFS Services in performing its obligations under the Administration Agreement.

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

31

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.

We are permitted to borrow money from time to time within the levels permitted by the 1940 Act which generally prohibits us from incurring indebtedness unless immediately after such borrowing we have an asset coverage for total borrowings of at least 200% (i.e., the amount of debt may not exceed 50% of the value of our assets). On March 23, 2018, the Consolidated Appropriations Act of 2018, which includes the SBCAA, was signed into law. The SBCAA amends the 1940 Act to permit a BDC to reduce the required minimum asset coverage ratio applicable to it from 200% to 150%, subject to certain requirements described therein. We may borrow money when the terms and conditions available are favorable to do so and are aligned with our investment strategy and portfolio composition. The use of borrowed funds or the proceeds of preferred stock to make investments would have its own specific benefits and risks, and all of the costs of borrowing funds or issuing preferred stock would be borne by holders of our common stock.

We have elected to be treated for federal income tax purposes, and intend to qualify annually, as a RIC under the Code. To qualify as a RIC, we must, among other things, meet certain source-of-income and assets diversification requirements. Pursuant to these elections, we generally will not have to pay corporate-level taxes on any income we distribute to our stockholders.

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 October 12, 2016, we received exemptive relief from the SEC to permit us to co-invest in portfolio companies with certain other funds managed by OFS Advisor, including OFS Capital (“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 (the “Order”). Pursuant to the Order, we are generally permitted to co-invest with Affiliated Funds if 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 transactions, including the consideration to be paid, are reasonable and fair to us and our stockholders and do not involve overreaching by 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. As a result of the exemptive relief, there could be significant overlap in our investment portfolio and the investment portfolios of OFS Capital and/or other funds established by OFS Advisor that could avail themselves of the exemptive relief.

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 and cash equivalents 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 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 Financial Statements – Note 3".

• Expense Limitation Agreements: OFS Advisor limits the Company's incurred expenses under two agreements: the Investment Advisory Agreement, which contains provisions limiting organization and offering costs, and Contractual Issuer Expenses; and an Expense Support Agreement, which limits all other operating expenses. Both agreement contain conditions under which we may become obligated to reimburse OFS advisor for expense limitations provided thereunder. See "Item 1. Financial Statements – Notes to 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 CLO funds and other assets, including OFS Capital, a publicly traded BDC with an investment strategy similar to the Company.

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 of Directors. For descriptions of our revenue recognition and fair value policies, see "Item 8. Financial Statements – Notes to Financial Statements – Note 2" and "Management's Discussion and

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Analysis – Critical Accounting Policies and Significant Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2017.

Fair value estimates. The following table illustrates the sensitivity of our fair value measures to reasonably likely changes to the estimated discount rate and EBITDA multiple inputs used in our investment valuations at March 31, 2018:

	Fair Value at March 31, 2018		Weighted average discount rate/EBITDA multiple at March 31, 2018	Discount rate sensitivity				EBITDA multiple sensitivity
Valuation Method / Investment Type				-10% Weighted average		+10% Weighted average		+0.5x		-0.5x
Discounted cash flow
Debt investments:
Senior Secured	$	4,060,625	11.88%	$	4,145,334	$	3,920,512	N/A		N/A
Subordinated	458,806		14.32%	$	475,192	$	438,381	N/A		N/A
Enterprise value
Equity investments:
Preferred equity	$	72,615	8.95x	N/A		N/A		$	72,615	$	72,615
Common equity	40,388		7.90x	N/A		N/A		45,276		35,383

The table above presents the impact to our debt investment fair value accounting measures by uniformly modifying our discount rate valuation input. This discount rate sensitivity measures included in the table do not present the estimated effect of hypothetical changes in actual, observed interest rates, which would affect the cash flows from many of the underlying investments as they are indexed to LIBOR, the operating environment of many of our portfolio companies, and other factors, as well as our estimates of the discount rate valuation input. The effect of hypothetical changes in actual, observed interest rates on our fair value measures is not subject to reasonable estimation.

Portfolio Composition and Investment Activity

Portfolio Composition

The following table summarizes the composition of our investment portfolio as of March 31, 2018, and December 31, 2017:

	March 31, 2018				December 31, 2017
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Senior secured debt investments (1)	$	7,248,728	$	7,279,280	$	4,548,325	$	4,556,911
Subordinated debt investments	1,439,794		1,440,977		456,254		459,278
Preferred equity investments	156,915		158,329		82,953		81,889
Common equity investments	129,544		132,432		37,500		40,581
	$	8,974,981	$	9,011,018	$	5,125,032	$	5,138,659
Total number of portfolio companies	19		19		13		13

(1) Includes debt investment in which we have entered into a contractual arrangement with co‑lenders whereby, subject to certain conditions, we have agreed to receive our principal payments after the repayment of certain co‑lenders pursuant to a payment waterfall. At March 31, 2018, the aggregate amortized cost and fair value of this investment was $576,011 and $593,769, respectively.

As of March 31, 2018, and December 31, 2017, all of our senior secured debt investments were floating rate loans and our subordinated debt investments were fixed rate loans. The average amortized cost and fair value of our debt investments in each portfolio company was $482,696 and $484,459, respectively.

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Our portfolio companies were domiciled in the United States ("U.S.") at March 31, 2018, and December 31, 2017. The following table shows the portfolio composition by U.S. geographic region at amortized cost and fair value and as a percentage of total investments; the geographic composition is determined by the location of the portfolio company's corporate headquarters:

	Amortized Cost								Fair Value
	March 31, 2018				December 31, 2017				March 31, 2018				December 31, 2017
South - US	$	4,194,530	46.7	%	$	1,961,189	38.3	%	$	4,201,640	46.6	%	$	1,972,063	38.3	%
Northeast - U.S.	2,388,496		26.6		1,755,266		34.2		2,412,877		26.8		1,765,182		34.4
West - U.S.	1,423,169		15.9		439,515		8.6		1,420,345		15.8		435,546		8.5
Midwest - US	968,786		10.8		969,062		18.9		976,156		10.8		965,868		18.8
Total	$	8,974,981	100.0	%	$	5,125,032	100.0	%	$	9,011,018	100.0	%	$	5,138,659	100.0	%

As of March 31, 2018, our investment portfolio’s three largest industries by fair value, were (1) Outpatient Mental Health and Substance Abuse Centers of 11%, (2) Stationery and Office Supplies Merchant Wholesalers of 10.8%, and (3) Automotive Oil Change and Lubrication Shops of 8%, totaling approximately 29.8% 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 debt investment portfolio by investment size as of March 31, 2018 and December 31, 2017:

	Amortized Cost								Fair Value
	March 31, 2018				December 31, 2017				March 31, 2018				December 31, 2017
Up to $450,000	$	1,086,328	12.4	%	$	1,089,209	21.8	%	$	1,087,813	12.5	%	$	1,091,174	21.8	%
$450,000 to $475,000	1,387,412		16.0		1,858,902		37.1		1,403,766		16.1		2,332,595		46.5
$475,000 to $500,000	1,464,368		16.9		1,464,163		29.3		973,541		11.2		989,116		19.7
Greater than $500,000	4,750,414		54.7		592,305		11.8		5,255,137		60.2		603,304		12.0
Total	$	8,688,522	100.0	%	$	5,004,579	100.0	%	$	8,720,257	100.0	%	$	5,016,189	100.0	%

The following table displays the composition of our debt investment portfolio by weighted average yield as of March 31, 2018 and December 31, 2017:

	March 31, 2018						December 31, 2017
	Senior Secured		Subordinated		Total		Senior Secured		Subordinated		Total
Weighted Average Yield (1)	Debt		Debt		Debt		Debt		Debt		Debt
Less than 8%	3.0	%	—	%	2.4	%	4.6	%	—	%	4.3	%
8% - 10%	16.9		—		14.1		48.9		—		44.4
10% - 12%	59.6		—		49.8		36.8		—		33.4
12% - 14%	20.5		100.0		33.7		9.7		100.0		17.9
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Weighted average yield	11.04	%	13.81	%	11.50	%	10.17	%	13.79	%	10.50	%

(1) The weighted average yield on our debt investments is computed as (a) the annual stated accruing interest on our debt investments at the balance sheet date, plus the annualized accretion of Net Loan Fees divided by (b) amortized cost of our debt investments as of the balance sheet date.

The weighted average yield on senior secured debt investments increased approximately 87 basis points from during the three months ended March 31, 2018, as a result of net investments in new and existing portfolio companies. The remainder is attributable to increases in reference rates on variable-rate investments, predominantly three-month LIBOR.

The weighted average yield on total investments was 11.25% and 10.22% at March 31, 2018 and December 31, 2017, respectively. Weighted average yield on total investments is computed as (a) the annual stated accruing interest on our debt investments at the balance sheet date, plus the annualized accretion of Net Loan Fees, plus the effective yield on our

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performing preferred equity investments, divided by (b) amortized cost of our total investment portfolio, including assets in non-accrual status as of the balance sheet date. The weighted average yield of our investments is 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 yield will remain at its current level.

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, 2017. All of our debt investments were classified as a risk category 3 as of March 31, 2018, and December 31, 2017.

Investment Activity

The following is a summary of our investment activity for the three months ended March 31, 2018 and 2017:

	Three Months Ended March 31,
	2018				2017
	Debt Investments		Equity Investments		Debt Investments		Equity Investments
Investments in new portfolio companies	$	4,468,328	$	177,758	$	150,000	$	—
Investments in existing portfolio companies:
Follow-on investments	96,000		—		—		—
Refinanced investments	—		—		—		—
Delayed draw / revolver funding	69,257		—		—		—
Total investments in existing portfolio companies	165,257		—		—		—
Total investments in new and existing portfolio companies	$	4,633,585	$	177,758	$	150,000	$	—
Number of new portfolio company investments	6		3		1		—
Number of existing portfolio company investments	1		—		—		—
Proceeds from principal payments	$	961,180	$	—	$	—	$	—
Proceeds from investments sold or redeemed	—		14,251		—		—
Total proceeds from principal payments, equity distributions and investments sold	$	961,180	$	14,251	$	—	$	—

Results of Operations

Key Financial Measures

The following is a discussion of the key financial measures that management employs in reviewing the performance of our operations.

Total Investment Income. We generate revenue in the form of interest income on debt investments and dividend income from our equity investments. Our debt investments typically have a term of three to eight years and bear interest at fixed and floating rates. In some cases, our investments provide for deferred interest or dividend payments, PIK interest, or PIK dividends (meaning interest or dividends paid in the form of additional principal amount of the loan or equity security instead of in cash). We also generate revenue in the form of management, valuation, and other contractual fees, which is recognized as the related services are rendered. In the general course of business, we receive certain fees from portfolio companies which are non-recurring in nature. Such non-recurring fees include prepayment fees on certain loans repaid prior to their scheduled due date, which are recognized as earned when received, and fees for capital structuring services from certain co-lenders, which are recognized as earned upon closing of the investment. Net Loan Fees are capitalized, and accreted or amortized over the life of the loan as interest income. When we receive principal payments on a loan in an amount that exceeds its amortized cost, we will also recognize the excess principal payment as income in the period it is received.

Expenses. Our primary operating expenses include professional fees, the payment of fees to OFS Advisor under the Investment Advisory Agreement, our allocable portion of overhead expenses under the Administration Agreement and other operating costs described below. Additionally, we will pay interest expense on any outstanding debt under any new credit facility or other debt instrument we may enter into. We will bear all other out-of-pocket costs and expenses of our operations and transactions, whether incurred by us directly or on our behalf by a third party, including:

• the cost of calculating our net asset value, including the cost of any third-party valuation services;

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• the cost of effecting sales and repurchases of shares of our common stock and other securities;

• fees payable to third parties relating to making investments, including out-of-pocket fees and expenses associated with performing due diligence and reviews of prospective investments;

• transfer agent and custodial fees;

• out-of-pocket fees and expenses associated with marketing efforts;

• federal and state registration fees and any stock exchange listing fees;

• U.S. federal, state and local taxes;

• independent directors’ fees and expenses;

• brokerage commissions;

• fidelity bond, directors’ and officers’ liability insurance and other insurance premiums;

• direct costs, such as printing, mailing and long-distance telephone;

• fees and expenses associated with independent audits and outside legal costs;

• costs associated with our reporting and compliance obligations under the 1940 Act and other applicable U.S. federal and state securities laws; and

• other expenses incurred by either OFS Services or us in connection with administering our business.

Net Gain (Loss) on Investments. Net gain (loss) on investments consists of the sum of: (a) realized gains and losses from the sale of debt or equity securities, or the redemption of equity securities; and (b) net unrealized appreciation or depreciation on debt and equity investments. In the period in which a realized gain or loss is recognized, such gain or loss will generally be offset by the reversal of previously recognized unrealized appreciation or depreciation, and the net gain recognized in that period will generally be smaller. The accumulated net unrealized appreciation or depreciation on debt securities is also reversed when those investments are redeemed or paid off prior to maturity. In such instances, the reversal of accumulated unrealized appreciation or depreciation will be reported as a net loss or gain, respectively, and may be partially offset by the acceleration of any premium or discount on the debt security, which is reported in interest income, and any prepayment fees on the debt security, which is reported in fee income.

We could experience fluctuations in our quarterly operating results due to a number of factors, including the interest rate payable on the debt securities we acquire, the default rate on such securities, the level of our expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, distributions from our portfolio companies, the degree to which we encounter competition in our markets and general economic conditions. In light of these factors, results for any period should not be relied upon as being indicative of performance in future periods. Moreover, as a BDC and a RIC, we will also be subject to certain constraints on our operations, including, but not limited to, limitations imposed by the 1940 Act and the Code.

Net increase 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, annual comparisons of net increase in net assets resulting from operations may not be meaningful.

Comparison of the three months ended March 31, 2018, and 2017

Operating results for the three months ended March 31, 2018 and 2017, are as follows:

Investment Income

	Three Months Ended March 31,
	2018		2017
Interest income	$	190,173	$	3,229
Payment-in-kind dividend income	2,502		—
Fee income	665		—
Total investment income	$	193,340	$	3,229

Investment income for the three months ended March 31, 2018, consisted primarily of interest income on our debt investments, payment-in-kind dividend on preferred equity securities, and fee income and was $193,340 and $3,229, respectively. The increase in interest income and PIK dividends is primarily due to the growth in our portfolio from the

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deployment of Offering proceeds. Additionally, the weighted-average yield on our portfolio increased from 9.97% at March 31, 2017, to 11.25% at March 31, 2018. See "—Portfolio Composition and Investment Activity".

Gross Expenses. Our gross expenses are limited under the Investment Management Agreement and the Expense Support Agreement; see "—Expense Limitations". Investment expenses by governing expense limitation agreement three months ended March 31, 2018 and 2017, are presented below:

	Three Months Ended March 31,
	2018		2017
Expenses subject to limitation under Investment Advisory Agreement:
Amortization of deferred offering costs	$	37,834	$	118,910
Contractual issuer expenses	3,751		14,306
Total expenses subject to limitation under Investment Advisory Agreement	41,585		133,216
Expenses subject to limitation under Expense Support Agreement:
Management fees	22,468		1,164
Administration fee	164,330		67,668
Professional fees	82,442		171,428
Insurance expense	18,198		28,463
Transfer agent fees	23,580		8,194
Other expenses	17,293		10,990
Total expenses subject to limitation under Expense Support Agreement	328,311		287,907
Total expenses	$	369,896	$	421,123

Expenses Limited under the Investment Management Agreement

Offering Expenses. We incurred offering costs of $45,612 and $36,206 during the three months ended March 31, 2018 and 2017, respectively. Offering costs incurred prior to the commencement of the Offering on July 18, 2016, were deferred and then amortized on a straight-line basis over twelve months from July 18, 2016. All offering costs incurred subsequent to July 18, 2016, are deferred and amortized over a twelve month period from the date incurred. Offering costs for the three months ended March 31, 2018 and 2017, include legal fees incurred related to ordinary due diligence and developing distribution platforms for our common stock. Offering costs for the three months ended March 31, 2017, also include non-recurring legal fees related to establishing custody agreements with clearing broker-dealers to permit their custody of our common stock.

Amortization of offering costs was $37,834 and $118,910 for the three months ended March 31, 2018, respectively. Higher amortization expense in the three months ended March 31, 2017, relate to the amortization of costs that accumulated through July 18, 2016, and amortized over the following year.

Contractual Issuer Expenses. We incurred Contractual Issuer Expenses of $3,751 and $14,306 for the three months ended March 31, 2018 and 2017, respectively, related to salaries and direct expenses of personnel of OFS Advisor and its affiliates directly involved in the activities enumerated above in offering expenses.

Expenses Limited under the Expense Support Agreement

Management Fees. We incurred management fees of $22,468 and $1,164, for the three months ended March 31, 2018 and 2017. respectively, due to an increase in our management fee base (generally total assets less cash and subscriptions receivable) as a result of growth in our portfolio from the deployment of Offering proceeds.

Administrative Fees. We incurred administrative fees of $164,330 and $67,668 for the three months ended March 31, 2018 and 2017, respectively. Administrative fees are primarily related to accounting and record-keeping services, and preparation and filing of required periodic reports with the SEC. The increase in the administrative fee is attributable to the growth in the complexity of the company, which has necessitated greater number of SEC filings and investment valuations, and greater time to prepare periodic SEC filings as they became more complex, as well as greater time for compliance with co-investment regulations as our portfolio has grown.

Professional Fees. We incurred professional fees of $82,442 and $171,428 for the three months ended March 31, 2018 and 2017, respectively. Professional fees includes fees for our attorneys, independent accountants and consultants. The higher professional fees in 2017 related to initial costs as an operating company.

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Expense Limitations

Expense Limitations under Investment Advisory Agreement. Organization and offering expenses, and Contractual Issuer Expenses for the three months ended March 31, 2018, have been limited to amounts reimbursed to OFS Advisor under the terms of the Investment Advisory Agreement or $30,982. This amount consisted of organization costs, Contractual Issuer Expenses and fully amortized deferred offering expenses. Organization and offering expenses, and Contractual Issuer Expenses for the three months ended March 31, 2017, have been limited to $6,757. We reimbursed OFS Advisor $4,498 in organization costs and Contractual Issuer Expenses during the three months ended March 31, 2017, which reduced other expense limitations for that period and resulted in net recognition of expense. We also reimbursed OFS Advisor $1,607 in offering costs during the three months ended March 31, 2017, of which $938 was amortized at the time of reimbursement, and reduced the expense limitations for that period and resulted in net recognition of expense. The remaining $670 was unamortized at the time of reimbursement and was reported as deferred offering costs on the March 31, 2017, balance sheet from where it continued to amortize in accordance with its original amortization period, and was not subject to further limitation under expense limitation agreements with OFS Advisor. We do not expect reimbursement of unamortized offering expenses, necessitating the added complexity of recognizing such expenses on our balance sheet, for the foreseeable future.

The determination of expense limitations under the Investment Advisory Agreement is presented below.

	Three Months Ended March 31,
	2018			2017
Total expenses limited under Investment Advisory Agreement	$	41,585		$	133,216
Organization costs, amortization of deferred offering costs, and Contractual Issuer Expenses reimbursed and incurred:
Reimbursement of organization costs	(8,927		)	(4,210		)
Reimbursement of amortized offering costs	(21,790		)	(938		)
Amortization of reimbursed deferred offering costs	—			(1,321		)
Reimbursement of Contractual Issuer Expenses	(265		)	(288		)
Organization costs, amortization of deferred offering costs, and Contractual Issuer Expenses reimbursed and incurred	(30,982		)	(6,757		)
Expense limitation under the Investment Advisory Agreement	$	10,603		$	126,459

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Expense Limitations under Expense Support Agreement. Gross operating expenses (operating expenses exclusive of organization and offering expenses, and Contractual Issuer Expenses, and before limitations) are subject to limitation under the 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 unsupported investment company taxable income (expense) and the amount of the declared distribution; the Expense Support Agreement provides expense support such that distributions are not paid from Offering proceeds. The determination of expense limitation under the Expense Support Agreement for the three months ended March 31, 2018 and 2017, is presented below.

	Three Months Ended March 31,
	2018			2017
Total investment income	$	193,340		$	3,229
Expenses limited under the Expense Support Agreement (1):
Interest expense, base management fees, and incentive fees	22,468			1,164
Other operating expenses as defined in the Expense Support Agreement (2)	305,843			286,743
Total expenses limited under the Expense Support Agreement	328,311			287,907
Temporary differences in recognition of ICTI and GAAP net investment income (1)	224			—
Unsupported investment company taxable income (loss)	(135,195		)	(284,678		)
Declared distributions	234,075			21,716
Expense limitation under Expense Support Agreement	$	369,270		$	306,394

(1) Expense limitation under Expense Support Agreement is generally based on ICTI, which excludes organization costs, amortization of deferred offering costs, Contractual Issuer Expenses, and the related expense support under the Investment Advisory Agreement as such items are permanent differences between GAAP and taxable income. PIK dividends are excluded from the determination of ICTI until collected. See“Item 8. Financial Statements–Notes to Financial Statements–Note 7” in our Annual Report on Form 10-K.

(2) Generally defined in the Expense Support Agreement as our operating expenses determined in accordance with GAAP excluding organization and offering expenses, Contractual Issuer Expenses, interested expenses, and base management fees, and incentive fees. The annualized ratio of other operating expenses to net assets at the time of support and annual ratio for the year in which support is provided constitute conditions for reimbursement to OFS Advisor. See "Item 1. Financial Statements–Notes to Financial Statements–Note 3."

Expense limitation under both the Investment Advisory Agreement and the Expense Support Agreement is cancelable at any time.

Net unrealized appreciation on non-control/non-affiliate investments

Net unrealized appreciation on non-control/non-affiliate investments for the three months ended March 31, 2018, is principally due to market activity observed in the broadly-syndicated loans held by the Company.

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Liquidity and Capital Resources

Sources and Uses of Cash and Cash Equivalents

We expect to generate cash primarily from (i) the net proceeds of the Offering, (ii) cash flows from our operations, (iii) any financing arrangements we may enter into in the future and (iv) any future offerings of our equity or debt securities. We may fund a portion of our investments through borrowings from banks 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 and (iv) cash distributions to the holders of our stock. These principal sources and uses of cash and liquidity are presented below:

	Three Months Ended March 31,
	2018			2017
Total investment income collected	$	175,665		$	3,426
Net cash provided by OFS Advisor under expense limitation agreements	53,451			174,795
Investment expenses paid	(232,387		)	(185,570		)
Net purchases and origination of portfolio investments	(3,835,912		)	(98,500		)
Net cash used in operating activities	(3,839,183		)	(105,849		)
Proceed from issuances of common stock	1,406,950			232,401
Cash distributions paid	(191,613		)	—
Net change in cash and cash equivalents	$	(2,623,846	)	$	126,552

We used $3,839,183 and $105,849 in cash from operating activities for the three months ended March 31, 2018 and 2017, respectively. The principal source of operating liquidity is investment income collected and expense support received from OFS Advisor through the Investment Advisory Agreement and the Expense Support Agreement. The increase in total investment income collected is due to the growth in our portfolio from the deployment of Offering proceeds. The decline in cash provided by OFS Advisor is due to the timing of settlement of fourth quarter expense support provided under the Investment Advisory and the Expense Support Agreements. Settlement typically follows the filing of our period reports with the SEC. We filed our Annual Report on Form 10-K on March 30, 2018, the last business day of the quarter and, consequently, did not settle the expense support amounts until after quarter end.

Investment expenses paid for the three months ended March 31, 2018 increase $48,929 from the comparable period in 2017, due to the timing of payments of professional fees. OFS Advisor did not direct us to settle amounts due to our administrator during three months ended March 31, 2018, thereby reducing investment expenses paid by $150,976.

Net purchases and origination of portfolio investments relates to the deployment of Offering proceeds. See "—Portfolio Composition and Investment Activity".

We collected $1,406,950 and $232,401 from the sale of our common stock during the three months ended March 31, 2018 and 2017, respectively. Offering proceeds are net of aggregate commissions and dealer manager fees of $80,061 and $12,600 the three months ended March 31, 2018 and 2017, respectively, of which $43,311 and $-0-, respectively, were paid by OFS Advisor. On April 2, 2018, we collected $595,802 related to subscriptions receivable as of March 31, 2018 .

During the three months ended March 31, 2018, we paid $191,613 in dividends to common stockholders, and subsequent to March 31, 2018, we paid $234,074 dividend to our common stockholders.

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 funds or 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 recorded value.

In addition, as a BDC, we generally will be required to meet a coverage ratio of total assets, less liabilities and indebtedness not represented by senior securities, to total senior securities, which include all of any borrowings or outstanding preferred stock (of which we had none at March 31, 2018, and December 31, 2017) of at least 200% (or 150% if certain requirements are met). This requirement limits the amount that we may borrow. To fund growth in our investment portfolio in

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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.

Contractual Obligations

On July 15, 2016, we, with approval by our board of directors, entered into the Investment Advisory Agreement, the Expense Support Agreement, the Investment Sub-Advisory Agreement, and the Administration Agreement. See “Item 1. Financial Statements – Notes to Financial Statements – Note 3.”

Off-Balance Sheet Arrangements

Amounts Conditionally Reimbursable to OFS Advisor.

OFS Advisor and its affiliates have incurred organizational and offering costs, and Contractual Issuer Expenses related to the Company of which $1,078,029 and $1,059,648 were unreimbursed as of March 31, 2018, and December 31, 2017, respectively. We remain conditionally liable for organization and offering costs incurred by OFS Advisor and its affiliates on our behalf. See “Item 1. Financial Statements – Notes to FInancial Statements – Note 3.”

OFS Advisor has provided aggregate operating expense support of $1,997,867 and $1,628,596 as of March 31, 2018, and December 31, 2017, respectively. We remain conditionally liable for operating expense support provided by OFS Advisor. See “Item 1. Financial Statements – Notes to Financial Statements – Note 3.”

Unfunded Commitments.

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. We had $589,635 of total unfunded commitments to three portfolio companies at March 31, 2018.

Distributions

Our board of directors maintains a variable dividend policy with the objective of distributing four quarterly distributions in an amount not less than 90-100% of our taxable quarterly income or potential annual income for a particular year. In addition, at the end of the year, we may also pay an additional special dividend, or fifth 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 have elected to be taxed as a RIC under Subchapter M of the Code. 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 distributions to date were, and our distributions may in the future, be funded through expense limitation payments by OFS Advisor under the Expense Support Agreement. The 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 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 Expense Support Agreement may be terminated by us or OFS Advisor, without payment of any penalty, upon written notice to us.

Share Repurchases

Subject to the discretion of our board of directors, we may commence tender offers to allow 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. Any such repurchases would be limited to approximately 10% of the weighted average number of our outstanding shares in any 12-month period.

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Recent Developments

On April 26, 2018, the Board declared a distribution of $0.0875 per common share, payable on July 16, 2018, to stockholders of record on each of April 26, 2018, May 29, 2018, and June 27, 2018.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our market risks reported in our Annual Report on Form 10-K for the year ended December 31, 2017.

Assuming that the interim, unaudited balance sheet as of March 31, 2018, 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 increase in net investment income
50	$	45,964	$	—	$	45,964
100	83,187		—		83,187
150	120,411		—		120,411
200	157,634		—		157,634
250	194,858		—		194,858

Basis point decrease	Interest income			Interest expense		Net decrease in net investment income
50	$	(28,484	)	$	—	$	(28,484	)
100	(62,895		)	—		(62,895		)
150	(75,447		)	—		(75,447		)
200	(75,447		)	—		(75,447		)
250	(75,447		)	—		(75,447		)

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Item 4.  Controls and Procedures

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 March 31, 2018. 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 March 31, 2018, the Company’s chief executive officer and chief financial officer concluded that, as of such date, the Company’s disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2018, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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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 future portfolio companies. Furthermore, third parties may try to seek to impose liability on us in connection with the activities of our future 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, 2017, 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 also may materially and adversely affect our business, financial condition and/or operating results.

Other than the risk 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 for the year ended December 31, 2017, which should be read together with the other risk factors and information disclosed elsewhere in this Quarterly Report on Form 10-Q and our other reports filed with the SEC.

We may receive the approval of our board of directors to be subject to 150% Asset Coverage.

The 1940 Act generally prohibits us from incurring indebtedness unless immediately after such borrowing we have an asset coverage for total borrowings of at least 200% (i.e., the amount of debt may not exceed 50% of the value of our assets). However, recent legislation has modified the 1940 Act by allowing a BDC to increase the maximum amount of leverage it may incur from an asset coverage ratio of 200% to an asset coverage ratio of 150%, if certain requirements are met. Under the legislation, we are allowed to increase our leverage capacity if stockholders representing at least a majority of the votes cast, when quorum is met, approve a proposal to do so. If we receive stockholder approval, we would be allowed to increase our leverage capacity on the first day after such approval. Alternatively, the legislation allows a “required majority” (as defined in Section 57(o) of the 1940 Act) of our directors to approve an increase in our leverage capacity, and such approval would become effective after one year from the date of approval. In either case, we would be required to make certain disclosures on our website and in SEC filings regarding, among other things, the receipt of approval to increase our leverage, our leverage capacity and usage, and risks related to leverage. In addition, because our common stock is not listed on a national securities exchange, if we receive approval to increase the maximum amount of leverage we may incur to an asset coverage ratio of 150% from an asset coverage ratio of 200%, then we must offer to repurchase all of our common stock held by stockholders as of the date of such approval.

Leverage magnifies the potential for loss on investments in our indebtedness and on invested equity capital. As we use leverage to partially finance our investments, you will experience increased risks of investing in our securities. If the value of our assets increases, then the additional leverage would cause the net asset value attributable to our common stock to increase more sharply than it would have had we not increased our leverage. Conversely, if the value of our assets decreases, the additional leverage would cause net asset value to decline more sharply than it otherwise would have had we not increased our leverage. Similarly, any increase in our income in excess of interest payable on the borrowed funds would cause our net investment income to increase more than it would without the additional leverage, while any decrease in our income would cause net investment income to decline more sharply than it would have had we not increased our leverage. Such a decline could negatively affect our ability to pay common stock dividends, scheduled debt payments or other payments related to our securities. Leverage is generally considered a speculative investment technique. See “Risk Factors  – Risks Related to Our Business and Structure – We may finance our investments with borrowed money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us” in our Annual Report on Form 10-K for the year ended December 31, 2017.

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In addition, the ability of BDCs to increase their leverage will increase the capital available to BDCs and thus competition for the investments that we seek to make. This may negatively impact pricing on the investments that we do make and adversely affect our net investment income and results of operations.

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

During the three month period ended March 31, 2018, we sold 148,475 shares of our common stock for gross proceeds of $2,065,530, or a weighted average price of $13.91 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. We paid $62,778 in commissions in connection with the sale of the shares. OFS Advisor paid commissions of $61,966.

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 shares 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 shares 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 shares 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.

Item 3.  Defaults Upon Senior Securities

Not applicable.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information

Not applicable.

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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
11.1	Computation of Per Share Earnings			+
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended			*
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended			*
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002			†
32.2	Certificate of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002			†

+	Included in the statements of operations contained in this report
*	Filed herewith.
†	Furnished herewith.

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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: May 15, 2018	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

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EXHIBIT INDEX

		Incorporated by Reference
Exhibit Number	Description	Form and SEC File No.	Filing Date with SEC	Filed with this 10-Q
11.1	Computation of Per Share Earnings			+
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended			*
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended			*
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002			†
32.2	Certificate of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002			†

+	Included in the statements of operations contained in this report
*	Filed herewith.
†	Furnished herewith.

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