HOUSTON, March 11, 2026 /PRNewswire/ -- Stellus Capital Investment Corporation $(SCM)$ ("Stellus", "we", or the "Company") today announced financial results for its fiscal quarter and year ended December 31, 2025.
Robert T. Ladd, Chief Executive Officer of Stellus, stated, "I am pleased to report solid operating results for the quarter ended December 31, 2025, in which we earned both U.S. GAAP net and core investment income of $0.29 per share and net realized income of $0.48 per share. During the quarter, we funded $52 million of investments and received $54 million of repayments, resulting in a total portfolio of $1.01 billion at fair value. I'm also pleased to report that our investors have received a total of $333 million in distributions, equivalent to $18.27 per share, since we began operations."
FINANCIAL HIGHLIGHTS
($ in millions, except data relating to per share amounts and shares outstanding)
Three Months Ended Years Ended
---------------------------------------- ----------------------------------------
December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024
Amount Per Share Amount Per Share Amount Per Share Amount Per Share
------- ---------- ------- ---------- ------- ---------- ------- ----------
Net investment
income $8.40 $0.29 $9.64 $0.35 $36.88 $1.30 $41.93 $1.64
Core net
investment
income(1) 8.53 0.29 10.15 0.37 38.46 1.36 43.74 1.71
Net realized
gain (loss) on
investments 5.49 0.19 5.95 0.22 1.54 0.05 (15.74) (0.62)
Net realized
loss on foreign
currency
translation (0.01) -- (0.02) -- (0.07) -- (0.09) --
Loss on debt
extinguishment (0.06) - -- -- (0.23) (0.01) -- --
Total realized
income(2) $13.82 $0.48 $15.57 $0.57 $38.12 $1.34 $26.10 $1.02
Distributions (11.58) (0.40) (10.90) (0.40) (45.46) (1.60) (41.22) (1.61)
Net unrealized
change in
(depreciation)
appreciation
on investments (8.61) (0.30) (6.86) (0.25) (11.10) (0.39) 19.57 0.76
Net unrealized
change in
depreciation on
foreign
currency
translation -- -- (0.02) -- 0.03 -- (0.02) --
Benefit for
taxes on
unrealized
depreciation on
investments in
taxable
subsidiaries -- -- -- -- -- -- 0.19 0.01
Net increase in
net assets
resulting from
operations $5.21 $0.18 $8.69 $0.32 $27.05 $0.95 $45.84 $1.79
Weighted average
shares
outstanding 28,947,254 27,174,972 28,364,809 25,596,593
(1) Core net investment income, as presented, excludes the impact of capital
gains incentive fees (reversal) and income taxes, the majority of which
are excise taxes. The Company believes presenting core net investment
income and the related per share amount is a useful supplemental
disclosure for analyzing its financial performance. However, core net
investment income is a non-U.S. GAAP measure and should not be considered
as a replacement for net investment income and other earnings measures
presented in accordance with U.S. GAAP. A reconciliation of net
investment income in accordance with U.S. GAAP to core net investment
income is presented in the table below the financial statements.
(2) Total realized income is the sum of net investment income, net realized
gains (losses) on investments, net realized gains (losses) on foreign
currency, and losses on debt extinguishment, all U.S. GAAP measures.
PORTFOLIO ACTIVITY
($ in millions, except data relating to per share amounts, shares outstanding, and number of portfolio companies)
As of As of
December 31, 2025 December 31, 2024
----------------- -----------------
Investments at
fair value $1,007.6 $953.5
Total assets $1,041.3 $980.9
Net assets $371.2 $369.9
Shares
outstanding 28,947,254 27,481,118
Net asset value
per share $12.82 $13.46
Three Months Ended Years Ended
------------------------------------ ------------------------------------
December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024
----------------- ----------------- ----------------- -----------------
New investments $52.1 $17.8 $194.1 $221.2
Repayments of
investments (54.0) (15.5) (139.7) (151.8)
----------------- ----------------- ----------------- -----------------
Net activity ($1.9) $2.3 $54.4 $69.4
As of As of
December 31, 2025 December 31, 2024
----------------- -----------------
Number of
portfolio
company
investments 115 105
Number of debt
investments 100 92
Weighted average
yield of debt
and other income
producing
investments (3)
Cash 8.5 % 9.5 %
Payment-in-kind
("PIK") 0.5 % 0.4 %
Fee amortization 0.3 % 0.4 %
----------------- -----------------
Total 9.3 % 10.3 %
Weighted average
yield of total
investments(4)
Cash 7.9 % 8.9 %
PIK 0.5 % 0.4 %
Fee amortization 0.3 % 0.4 %
----------------- -----------------
Total 8.7 % 9.7 %
(3) The dollar-weighted average annualized effective yield is computed using
the effective interest rate for our debt investments and other income
producing investments, including cash and PIK interest, as well as the
accretion of deferred fees. The individual investment yields are then
weighted by the respective cost of the investments (as of the date
presented) in calculating the weighted average effective yield of the
portfolio. The dollar-weighted average annualized yield on the Company's
investments for a given period will generally be higher than what
investors in the Company's common stock would realize in a return over
the same period because the dollar-weighted average annualized yield does
not reflect the Company's expenses or any sales load that may be paid by
investors.
(4) The dollar-weighted average yield on total investments takes the same
yields as calculated in the footnote above but weights them to determine
the weighted average effective yield as a percentage of the Company's
total investments, including non-income producing equity positions and
debt investments on non-accrual status.
Results of Operations
Investment income for the three months ended December 31, 2025 and 2024 totaled $25.2 million and $25.6 million, respectively, most of which was interest income from portfolio investments.
Gross operating expenses for the three months ended December 31, 2025 and 2024 totaled $17.5 million and $16.2 million, respectively. For the same respective periods, base management fees totaled $4.5 million and $3.9 million, income incentive fees totaled $1.9 million and $2.6 million, fees and expenses related to our borrowings totaled $9.0 million and $8.0 million (including interest and amortization of deferred financing costs), administrative expenses totaled $0.6 million and $0.5 million, income tax totaled $0.2 million and $0.4 million and other expenses totaled $1.3 million and $0.8 million. The Company waived $0.7 million and $0.0 million of income incentive fees due to the total return limitation pursuant to the provisions of the Investment Advisory Agreement between the Company and the Advisor (as defined below) for the three months ended December 31, 2025 and 2024, respectively, for net operating expenses of $16.8 million and $16.2 million, respectively.
Net investment income was $8.4 million and $9.6 million, or $0.29 and $0.35 per common share based on 28,947,254 and 27,174,972 weighted average common shares outstanding for the three months ended December 31, 2025 and 2024, respectively. Core net investment income, which is a non-U.S. GAAP measure that excludes capital gains incentive fees (reversals) and income tax expense accruals, for the three months ended December 31, 2025 and 2024 was $8.5 million and $10.1 million, or $0.29 and $0.37 per share, respectively.
For the three months ended December 31, 2025 and 2024, the Company's investment portfolio had a net change in unrealized depreciation of ($8.6) million and ($6.9) million, respectively, and the Company had net realized gains of $5.5 million and $6.0 million, respectively.
Net increase in net assets resulting from operations totaled $5.2 million and $8.7 million, or $0.18 and $0.32 per common share, based on 28,947,254 and 27,174,972 weighted average common shares outstanding for the three months ended December 31, 2025 and 2024, respectively.
Liquidity and Capital Resources
As of December 31, 2025, the Company's amended senior secured revolving credit agreement with certain bank lenders and Zions Bancorporation, N.A. dba Amegy Bank, as administrative agent (as amended from time to time, the "Credit Facility") provided for borrowings in an aggregate amount of up to $335.0 million on a committed basis. As of December 31, 2025 and December 31, 2024, the Credit Facility had an accordion feature which allowed for potential future expansion of the facility size up to $365.0 million and $350.0 million, respectively.
On December 31, 2025, we prepaid the remaining $50.0 million in aggregate principal of the 4.875% fixed-rate notes due 2026 in full.
As of December 31, 2025 and December 31, 2024, the Company had $236.6 million and $175.4 million in outstanding borrowings under the Credit Facility, respectively.
Distributions
For both the three months ended December 31, 2025 and 2024, the Company declared aggregate distributions of $0.40 per share for both periods ($11.6 million and $10.9 million in the aggregate, respectively). Tax characteristics of all distributions are reported to stockholders on Form 1099-DIV. Approximately $0.0 million of the dividends declared in 2025 are expected to be characterized as long-term capital gains. None of these dividends are expected to include a return of capital.
Recent Portfolio Activity
The Company invested in the following portfolio companies during the three months ended December 31, 2025:
Activity Investment Instrument
Type Date Company Name Company Description Amount Type
----------- --------- ---------------- --------------------- ----------- -----------
Provider of patient
safety, clinical
risk mitigation,
and healthcare Senior
Add-On October 1, The Hardenbergh compliance Secured --
Investment 2025 Group, Inc.* solutions $ 500,000 First Lien
Add-On October 2, J.R. Watkins, Manufacturer and $ 225,000 Priority
Investment 2025 LLC* distributor of Revolver
home and personal Commitment
care products
Add-On October 3, EH Real Estate Offers residential $ 183,470 Senior
Investment 2025 Services, LLC* property Secured --
brokerage, title & First Lien
settlement, and
property and
casualty insurance
brokerage services
to home buyers and
sellers
New October Fidus Systems Provider of $ 4,759,099 Senior
Investment 17, 2025 Inc. outsourced Secured --
electronic product First Lien
development and
engineering
services
$ 3,172,733 Delayed
Draw Term
Loan
Commitment
$ 100,000 Revolver
Commitment
$ 267,728 Equity
Add-On October Recharged Opco, Provider of $ 120,000 Priority
Investment 22, 2025 LLC* residential Revolver
electrical Commitment
services
Add-On October Channel Partners Provider of $ 35,175 Revolver
Investment 27, 2025 Intermediateco, outsourced Commitment
LLC* marketing
services
Add-On November Mobotrex Distributor and $ 3,523,787 Senior
Investment 6, 2025 Acquisition, manufacturer of Secured --
LLC* intelligent First Lien
traffic solution
equipment
$ 1,549,698 Delayed
Draw Term
Loan
Commitment
$ 73,776 Revolver
Commitment
Add-On November Ad.Net A digital marketing $ 1,896,568 Senior
Investment 6, 2025 Acquisition, company that Secured --
LLC* targets First Lien
high-conversion
consumers through
cost-per-click
digital media
advertising
$ 85,027 Equity
Add-On November EH Real Estate Offers residential $ 228,112 Senior
Investment 12, 2025 Services, LLC* property Secured --
brokerage, title & First Lien
settlement, and
property and
casualty insurance
brokerage services
to home buyers and
sellers
Add-On November SP L2 Holdings Provider of premium $ 14,832 Equity
Investment 19, 2025 LLC* in-pool and
backyard
furniture
Add-On December BC Partners Provider of $ 10,197 Equity
Investment 3, 2025 Glengarry business-to-busine
Co-Investment ss account based
LP* marketing
services
New December Pure Upper Holdco Environmental and $10,000,000 Senior
Investment 3, 2025 LLC ambulatory Secured --
cleaning services First Lien
for healthcare
facilities
$ 1,000,000 Delayed
Draw Term
Loan
Commitment
$ 100,000 Revolver
Commitment
$ 246,667 Equity
Add-On December Venbrook Buyer, An independent $ 471,156 Senior
Investment 5, 2025 LLC* insurance services Secured --
broker First Lien
Add-On December SP CS Holdings Provider of product $ 127,174 Equity
Investment 15, 2025 LLC* testing and
consumer insights
Add-On December Recharged Opco, Provider of $ 42,500 Priority
Investment 15, 2025 LLC* residential Revolver
electrical Commitment
services
Add-On December Carolina Topco National commercial $ 116,033 Equity
Investment 17, 2025 Holdings, LP* surface care and
restoration
company
New December Pilot Power Group Managed energy $12,000,000 Senior
Investment 18, 2025 Acquisition, procurement and Secured --
Inc. energy advisory First Lien
services
$ 366,868 Equity
Add-On December Solid Surface National commercial $ 38,000 Revolver
Investment 22, 2025 Holdco, LLC* surface care and Commitment
restoration
company
New December Valor Buyco, LLC Provider of $ 6,000,000 Senior
Investment 23, 2025 dispatched road Secured --
services First Lien
$ 100,000 Delayed
Draw Term
Loan
Commitment
$ 100,000 Revolver
Commitment
$ 430,556 Equity
Add-On December Venbrook Buyer, An independent $ 942,301 Senior
Investment 31, 2025 LLC* insurance services Secured --
broker First Lien
Add-On December FairWave Specialty coffee $ 103,720 Senior
Investment 31, 2025 Holdings, LLC* platform Secured --
First Lien
$ 579,226 Delayed
Draw Term
Loan
Commitment
*Existing portfolio company
The Company realized investments in the following portfolio companies during the three months ended December 31, 2025:
Realized
Activity Company Proceeds Gain Instrument
Type Date Company Name Description Received (Loss) Type
------------ --------- ------------- -------------- ----------- ---------- -----------
End-to-end
information
Heartland technologie Senior
Full October Business s solutions Secured --
Repayment 25, 2025 Systems, LLC provider $ 9,725,000 $ -- First Lien
Delayed
Draw Term
$ 48,875 $ -- Loan
$ 824,743 $ 656,088 Equity
Provider of
technology
integration
and
installatio
n of teller
machines,
maintenance
NuSource services,
Financial and
Full November Acquisition, security
Repayment 3, 2025 Inc. solutions $ 7,009,391 $ -- Unsecured
Full Realization $ 1,066,715 $1,066,715 Warrants
Environment
al and
ambulatory
cleaning
services
for Senior
Full December healthcare Secured --
Repayment 3, 2025 Xanitos, Inc. facilities $12,256,000 $ -- First Lien
Delayed
Draw Term
$ 2,159,481 $ -- Loan
$ 2,756,526 $1,703,048 Equity
Manufacturer
and
distributor
of
Unicat catalysts
Catalyst and other Senior
Full December Holdings, industrial Secured --
Repayment 5, 2025 LLC products $ 6,703,125 $ -- First Lien
Provider of
design,
engineering
,
installatio
n, and
maintenance
services
for
building
Full December EHI Buyer, management
Realization 8, 2025 Inc. systems $ 1,526,922 $1,305,158 Equity
*Existing portfolio company
Events Subsequent to December 31, 2025
The Company's management has evaluated subsequent events through March 11, 2026. There have been no subsequent events that require recognition or disclosure except for the following described below.
Investment Portfolio
The Company invested in the following portfolio companies subsequent to December 31, 2025:
Activity Company Investment Instrument
Type Date Company Name Description Amount Type
----------- --------- ------------ ----------------- ----------- -----------
Provider of
content,
information,
tech-enabled
services, and
hosts
competitions
Bart & for the U.S. Senior
Add-On January 2, Associates, equine Secured --
Investment 2026 LLC* industry $ 2,000,000 First Lien
$ 43,413 Equity
New January 9, Silver Senior-care $ 7,130,301 Senior
Investment 2026 Parent, LLC focused Secured --
placement First Lien
platform
$ 100,000 Revolver
Commitment
$ 498,641 Equity
Add-On January GRC Java Specialty $ 42,783 Equity
Investment 15, 2026 Holdings, coffee
LLC* platform
Add-On January EH Real Offers $ 380,186 Senior
Investment 20, 2026 Estate residential Secured --
Services, property First Lien
LLC* brokerage,
title &
settlement,
and property
and casualty
insurance
brokerage
services to
home buyers
and sellers
Add-On January evolv Holdco, Digital $ 8,036 Equity
Investment 21, 2026 LLC* transformation
consulting
firm
Add-On February BI Investors, Provider of $ 5,743 Equity
Investment 2, 2026 LLC* center-based
applied
behavioral
analysis
therapy servic
es
Add-On February Green Topco Cyber-security $ 16,598 Equity
Investment 3, 2026 Holdings, focused
LLC* value-added
reseller and
associated
service
provider
Add-On February Venbrook An independent $ 628,201 Senior
Investment 3, 2026 Buyer, LLC* insurance Secured --
services First Lien
broker
Add-On February SP MWM Holdco Provider of $ 194,667 Equity
Investment 6, 2026 LLC* test and
measurement
services and
equipment
Add-On February EH Real Offers $ 190,093 Senior
Investment 18, 2026 Estate residential Secured --
Services, property First Lien
LLC* brokerage,
title &
settlement,
and property
and casualty
insurance
brokerage
services to
home buyers
and sellers
Add-On February Venbrook An independent $ 1,256,415 Senior
Investment 25, 2026 Buyer, LLC* insurance Secured --
services First Lien
broker
Add-On March 3, EH Real Offers $ 190,093 Senior
Investment 2026 Estate residential Secured --
Services, property First Lien
LLC* brokerage,
title &
settlement,
and property
and casualty
insurance
brokerage
services to
home buyers
and sellers
New March 3, Precision Strategic $ 6,176,011 Senior
Investment 2026 Strategies, communications Secured --
LLC and marketing First Lien
agency
$ 100,000 Revolver
Commitment
New March 6, Synergy Provider of $ 4,000,000 Senior
Investment 2026 Health orthopedic and Secured --
Partners musculoskeleta First Lien
l care
$ 500,000 Delayed
Draw Term
Loan
Commitment
$ 100,000 Revolver
Commitment
$ 136,634 Equity
*Existing portfolio company
The Company realized investments in the following portfolio companies subsequent to December 31, 2025:
Activity Company Company Proceeds Realized Instrument
Type Date Name Description Received Gain Type
------------ --------- ----------- ----------------- ----------- --------- -----------
Manufacturer
and
distributor of
high-performan
Luxium ce advanced Senior
Full January Solutions, materials and Secured --
Repayment 30, 2026 LLC assemblies $ 8,169,324 $ -- First Lien
Delayed
Draw Term
$ 1,182,247 $ -- Loan
Provider of
digital
marketing
services to
Camp small and Senior
Full January Profiles medium-sized Secured --
Repayment 30, 2026 LLC businesses $12,041,875 $ -- First Lien
Full Realization $ 969,138 $ 719,138 Equity
Cyber-security
focused
value-added
reseller and
associated Senior
Full February service Secured --
Repayment 3, 2026 Arctiq, Inc. provider $12,202,671 $ -- First Lien
Delayed
Draw Term
$ 399,965 $ -- Loan
Credit Facility
The outstanding balance under the Credit Facility as of March 11, 2026 was $253.9 million.
SBA-guaranteed debentures
On February 27, 2026, the SBIC I subsidiary repaid all principal and accrued interest related to SBA-guaranteed debentures maturing on March 1, 2026. The outstanding balance of SBA-guaranteed debentures as of March 11, 2026 was $260.0 million.
Distributions Declared
On January 16, 2026, the Board of Directors of the Company declared a regular monthly dividend for each of January 2026, February 2026, and March 2026 as follows:
Ex-Dividend Record Payment Amount per
Declared Date Date Date Share
---------- ------------ ---------- ---------- ------------
2/13/20
1/16/2026 1/30/2026 1/30/2026 26 $ 0.1133
3/13/20
1/16/2026 2/27/2026 2/27/2026 26 $ 0.1133
4/15/20
1/16/2026 3/31/2026 3/31/2026 26 $ 0.1133
Acquisition of Stellus Capital Management
On February 5, 2026, we announced that Stellus Capital Management entered into a definitive agreement with P10 Intermediate Holdings, LLC, an affiliate of Ridgepost Capital, Inc. (formerly known as P10, Inc.) ("Ridgepost"), pursuant to which Ridgepost will acquire Stellus Capital Management, our external investment adviser (the "Transaction").
Pursuant to the terms of the Transaction, Stellus Capital Management will continue to be managed by its current partners, who will retain control of its day-to-day operations, including investment decisions and investment committee processes, and Stellus Capital Management will continue to serve as our external investment adviser. Consummation of the Transaction will result in a change of control of Stellus Capital Management, which will result in an assignment and corresponding termination of the Investment Advisory Agreement under the 1940 Act. Our Board and stockholders will therefore be asked to approve a new investment advisory agreement with Stellus Capital Management (the "New Investment Advisory Agreement"), the terms of which are expected to remain the same as the Investment Advisory Agreement, other than the initial term of the New Investment Advisory Agreement. Closing of the Transaction is expected to occur mid-2026 and is subject to customary conditions for a transaction of this nature. If approved, the New Investment Advisory Agreement will take effect following the closing of the
Transaction.
Stellus Capital Investment Corporation Adopts Stock Repurchase Program
Today the Company announced that its board of directors has authorized a program for the purpose of repurchasing up to $20.0 million of its shares of common stock, par value $0.001 (the "Repurchase Program"). Under the Repurchase Program, the Company may, but is not obligated to, repurchase its outstanding common stock in the open market from time to time provided that the Company complies with the prohibitions under its Code of Ethics and the guidelines specified in Rule 10b-18 of the Securities Exchange Act of 1934, as amended, including certain price, market volume and timing constraints. Unless amended or extended by the Company's board of directors, the Company expects the Repurchase Program to be in place until the earlier of March 2, 2027 or until $20.0 million of the Company's outstanding shares of common stock have been repurchased.
The Company's board of directors authorized the Repurchase Program because it believes the sustained market volatility and uncertainty may cause the Company's common stock to be undervalued from time to time. The timing and number of shares to be repurchased will depend on a number of factors, including market conditions and alternative investment opportunities. In addition, any repurchases will be conducted in accordance with the Investment Company Act of 1940, as amended. The Company has not yet been active in the Repurchase Program and there are no assurances that it will engage in repurchases, but if market conditions warrant, the Company now has the ability to take advantage of situations where the Company's management believes share repurchases would be advantageous to the Company and to its shareholders.
Conference Call Information
Stellus Capital Investment Corporation will host a conference call to discuss these results on Thursday, March 12, 2026 at 10:00 AM, Central Time. The conference call will be led by Robert T. Ladd, Chief Executive Officer, and W. Todd Huskinson, Chief Financial Officer, Chief Compliance Officer, Treasurer, and Secretary.
For those wishing to participate by telephone, please dial (888) 506-0062. Use passcode 401700. Starting approximately two hours after the conclusion of the call, a replay will be available through Friday, March 20, 2026 by dialing (877) 481-4010 and entering passcode 53704. The replay will also be available on the Company's website.
For those wishing to participate via Live Webcast, connect via the Public (SCIC) section of our website at www.stelluscapital.com, under the Events tab. A replay of the conference will be available on our website for approximately 90 days.
About Stellus Capital Investment Corporation
The Company is an externally managed, closed-end, non-diversified investment management company that has elected to be regulated as a business development company under the Investment Company Act of 1940. The Company's investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation by investing primarily in private lower middle-market companies (typically those with $5.0 million to $50.0 million of EBITDA (earnings before interest, taxes, depreciation and amortization)) with a focus on investing through first lien (including unitranche) loans, often with a corresponding equity investment. The Company's investment activities are managed by its investment adviser, Stellus Capital Management. To learn more about Stellus Capital Investment Corporation, visit www.stelluscapital.com under the "Public (SCIC)" tab.
Forward-Looking Statements
Statements included herein may contain "forward-looking statements" which relate to future performance or financial condition. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of assumptions, risks and uncertainties, which change over time. Actual results may differ materially from those anticipated in any forward-looking statements as a result of a number of factors, including those described from time to time in filings by the Company with the Securities and Exchange Commission including the final prospectus that will be filed with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.
Contacts
Stellus Capital Investment Corporation
W. Todd Huskinson, Chief Financial Officer
(713) 292-5414
thuskinson@stelluscapital.com
STELLUS CAPITAL INVESTMENT CORPORATION
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
December 31, 2025 December 31, 2024
------------------- -------------------
ASSETS
Controlled investments at fair
value (amortized cost of
$33,603,521 and $17,934,808,
respectively) $ 14,953,132 $ 7,652,436
Non-controlled, affiliated
investments, at fair value
(amortized cost of
$4,806,660) 3,750,674 --
Non-controlled, non-affiliated
investments, at fair value
(amortized cost of
$987,729,505 and $943,853,898,
respectively) 988,919,589 945,845,252
Cash and cash equivalents 25,050,156 20,058,594
Receivable for sales and
repayments of investments 581,509 335,689
Interest receivable 6,375,996 4,947,765
Income tax receivable 1,385,387 1,301,965
Other receivables 85,000 87,995
Related party receivable 20 3,687
Prepaid expenses 150,843 666,866
--------------- ---------------
Total Assets $ 1,041,252,306 $ 980,900,249
--------------- ---------------
LIABILITIES
Notes Payable $ 122,671,409 $ 99,444,355
Credit Facility payable 233,167,360 172,314,315
SBA-guaranteed debentures 295,984,063 321,251,939
Dividends payable 3,858,669 3,663,233
Management fees payable 4,442,705 4,034,109
Income incentive fees payable 2,317,429 3,109,560
Interest payable 6,138,076 5,281,343
Unearned revenue 582,007 548,626
Administrative services payable 539,338 393,513
Other accrued expenses and
liabilities 372,294 937,316
--------------- ---------------
Total Liabilities $ 670,073,350 $ 610,978,309
--------------- ---------------
Commitments and contingencies
(Note 7)
--------------- ---------------
Net Assets $ 371,178,956 $ 369,921,940
=============== ===============
NET ASSETS
Common stock, par value $0.001
per share (100,000,000 shares
authorized; 28,947,254 and
27,481,118 shares issued and
outstanding, respectively) $ 28,947 $ 27,481
Paid-in capital 397,829,793 379,549,272
Total distributable loss (26,679,784) (9,654,813)
--------------- ---------------
Net Assets $ 371,178,956 $ 369,921,940
--------------- ---------------
Total Liabilities and Net
Assets $ 1,041,252,306 $ 980,900,249
=============== ===============
Net Asset Value Per Share $ 12.82 $ 13.46
=============== ===============
STELLUS CAPITAL INVESTMENT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended
-------------------------------------------------------------
December 31, 2025 December 31, 2024 December 31, 2023
------------------- ------------------- -------------------
INVESTMENT INCOME
From controlled
investments:
Interest income $ -- $ 81,636 $ 37,897
From non-controlled,
affiliated
investments
Interest income $ 8,990 $ -- $ --
Payment-in-kind
interest income 217,434 -- --
From non-controlled,
non-affiliated
investments
Interest income $ 91,999,416 $ 96,494,073 $ 98,177,254
Payment-in-kind
interest income 5,538,838 3,310,111 3,801,637
Other income 4,374,272 4,850,313 3,830,780
--------------- --------------- --- --------------
Total Investment
Income $ 102,138,950 $ 104,736,133 $ 105,847,568
--------------- --------------- --- --------------
OPERATING EXPENSES
Management fees $ 17,178,177 $ 15,698,129 $ 15,452,347
Valuation fees 407,358 380,239 373,628
Administrative
services expenses 2,134,816 1,916,283 1,908,191
Income incentive
fees 8,393,139 10,045,966 10,189,888
Capital gains
incentive fee
(reversal) -- -- (569,528)
Professional fees 1,940,744 1,190,232 1,455,372
Directors' fees 409,000 412,000 406,000
Insurance expense 396,862 499,913 492,596
Interest expense and
other fees 34,943,265 31,506,068 32,011,317
Income tax expense 1,580,338 1,808,838 1,333,452
Other general and
administrative
expenses 1,182,690 1,175,765 891,170
--------------- --------------- --- --------------
Total Operating
Expenses $ 68,566,389 $ 64,633,433 $ 63,944,433
Income incentive fee
waiver (3,310,981) (1,826,893) (307,442)
--------------- --------------- --- --------------
Total Operating
Expenses, net of
fee waivers $ 65,255,408 $ 62,806,540 $ 63,636,991
--------------- --------------- --- --------------
Net Investment
Income $ 36,883,542 $ 41,929,593 $ 42,210,577
--------------- --------------- --- --------------
Net realized loss on
controlled
investments $ (1,132,576) $ -- $ --
Net realized loss
on non-controlled,
affiliated
investments (6,314,327) -- --
Net realized gain
(loss) on
non-controlled,
non-affiliated
investments 8,977,487 (15,737,004) (30,211,467)
Net realized loss on
foreign currency
translations (68,844) (94,730) (112,481)
Loss on debt
extinguishment (226,095) -- --
Net change in
unrealized
appreciation
(depreciation) on
controlled
investments 4,395,102 826,772 (430,577)
Net change in
unrealized
appreciation on
non-controlled,
affiliated
investments 4,140,601 -- --
Net change in
unrealized
(depreciation)
appreciation on
non-controlled,
non-affiliated
investments (19,642,634) 18,743,637 3,222,729
Net change in
unrealized
appreciation
(depreciation) on
foreign currency
translations 33,073 (14,755) (6,504)
Benefit (provision)
for taxes on net
unrealized
depreciation
(appreciation) on
investments -- 188,893 (126,957)
Benefit for taxes on
net realized loss
on investments -- 2,221 2,987,847
--------------- --------------- --- --------------
Net Increase in Net
Assets Resulting
from Operations $ 27,045,329 45,844,627 17,533,167
=============== =============== === ==============
Net Investment
Income Per
Share--basic and
diluted $ 1.30 $ 1.64 $ 1.92
=============== =============== === ==============
Net Increase in Net
Assets Resulting
from Operations Per
Share -- basic and
diluted $ 0.95 $ 1.79 $ 0.80
=============== =============== === ==============
Weighted Average
Shares of Common
Stock
Outstanding--basic
and diluted 28,364,809 25,596,593 22,004,648
--------------- =============== === ==============
Distributions Per
Share--basic and
diluted $ 1.60 $ 1.61 $ 1.61
=============== =============== === ==============
STELLUS CAPITAL INVESTMENT CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
Common Stock Total
-------------------
Number Par Paid-in distributable
(loss)
of shares value capital earnings Net Assets
---------- ------- ------------ ------------- -------------
Balances as of
December 31, 2022 19,666,769 $19,667 $275,114,720 $ 642,226 $ 275,776,613
========== ====== =========== ============ ============
Net investment
income -- -- -- 42,210,577 42,210,577
Net realized loss
on investments -- -- -- (30,211,467) (30,211,467)
Net realized loss
on foreign
currency
translation -- -- -- (112,481) (112,481)
Net change in
unrealized
appreciation on
investments -- -- -- 2,792,152 2,792,152
Net change in
unrealized
depreciation on
foreign currency
translations -- -- -- (6,504) (6,504)
Provision for taxes
on unrealized
appreciation on
investments -- -- -- (126,957) (126,957)
Benefit for taxes
on realized loss
on investments -- -- -- 2,987,847 2,987,847
Return of capital
and other tax
related
adjustments -- -- (1,348,766) 1,348,766 --
Distributions from
net investment
income -- -- -- (35,080,734) (35,080,734)
Distributions from
net realized
capital gains -- -- -- (446,746) (446,746)
Issuance of common
stock, net of
offering costs(1) 4,458,873 4,458 62,153,030 -- 62,157,488
---------- ------ ----------- ------------ ------------
Balances at
December 31, 2023 24,125,642 $24,125 $335,918,984 $(16,003,321) $ 319,939,788
========== ====== =========== ============ ============
Net investment
income -- -- -- 41,929,593 41,929,593
Net realized loss
on investments -- -- -- (15,737,004) (15,737,004)
Net realized loss
on foreign
currency
translation -- -- -- (94,730) (94,730)
Net change in
unrealized
appreciation on
investments -- -- -- 19,570,409 19,570,409
Net change in
unrealized
depreciation on
foreign currency
translations -- -- -- (14,755) (14,755)
Provision for taxes
on unrealized
appreciation on
investments -- -- -- 188,893 188,893
Benefit for taxes
on realized loss
on investments -- -- -- 2,221 2,221
Return of capital
and other tax
related
adjustments -- -- (1,727,556) 1,727,556 --
Distributions from
net investment
income -- -- -- (40,679,308) (40,679,308)
Distributions from
net realized
capital gains -- -- -- (544,367) (544,367)
Issuance of common
stock, net of
offering costs(1) 3,355,476 3,356 45,357,844 -- 45,361,200
---------- ------ ----------- ------------ ------------
Balances at
December 31, 2024 27,481,118 $27,481 $379,549,272 $ (9,654,813) $ 369,921,940
========== ====== =========== ============ ============
Net investment
income -- -- -- 36,883,542 36,883,542
Net realized gain
on investments -- -- -- 1,530,584 1,530,584
Net realized loss
on foreign
currency
translation -- -- -- (68,844) (68,844)
Loss on debt
extinguishment -- -- -- (226,095) (226,095)
Net change in
unrealized
depreciation on
investments -- -- -- (11,106,931) (11,106,931)
Net change in
unrealized
appreciation on
foreign currency
translations -- -- -- 33,073 33,073
Return of capital
and other tax
related
adjustments -- -- (1,391,127) 1,391,127 --
Distributions from
net investment
income -- -- -- (45,461,427) (45,461,427)
Issuance of common
stock, net of
offering costs(1) 1,466,136 1,466 19,671,648 -- 19,673,114
---------- ------ ----------- ------------ ------------
Balances at
December 31, 2025 28,947,254 $28,947 $397,829,793 $(26,679,784) $ 371,178,956
========== ====== =========== ============ ============
STELLUS CAPITAL INVESTMENT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended
-------------------------------------------------------------
December 31, 2025 December 31, 2024 December 31, 2023
------------------- ------------------- -------------------
Cash Flows from
Operating
Activities
Net increase in
net assets
resulting from
operations $ 27,045,329 $ 45,844,627 $ 17,533,167
Adjustments to
reconcile net
increase in net
assets from
operations to
net cash used in
operating
activities:
Purchases of
investments (194,071,248) (221,154,933) (183,858,762)
Proceeds from
sales and
repayments of
investments 139,652,991 151,834,875 134,223,224
Net change in
unrealized
depreciation
(appreciation)
on investments 11,106,931 (19,570,409) (2,792,152)
Net change in
unrealized
(appreciation)
depreciation on
foreign currency
translations (33,073) 14,755 6,360
Increase in
investments due
to
payment-in-kind
income (5,756,272) (3,310,111) (3,799,843)
Amortization of
premium and
accretion of
discount, net (2,891,683) (2,715,802) (2,749,543)
Deferred tax
(benefit)
provision -- (188,893) 126,957
Amortization of
loan structure
fees 1,212,581 1,140,079 657,323
Amortization of
deferred
financing costs 692,393 447,943 446,720
Amortization of
discount on
Notes Payable 96,093 -- --
Amortization of
premium on Notes
Payable (29,855) -- --
Amortization of
loan fees on
SBA-guaranteed
debentures 732,124 978,582 1,255,753
Net realized
(gain) loss on
investments (1,530,584) 15,737,004 30,211,467
Loss on debt
extinguishment 226,095 -- --
Changes in other
assets and
liabilities
Increase in
interest
receivable (1,428,231) (65,427) (897,929)
(Increase)
decrease in
income tax
receivable (83,422) 286,743 (1,588,708)
Decrease
(increase) in
other
receivables 2,995 (45,000) (8,750)
Decrease
(increase) in
related party
receivables 3,667 (3,687) --
Decrease
(increase) in
prepaid
expenses 516,023 (60,192) 60,593
Increase
(decrease) in
management fees
payable 408,596 1,115,573 (4,231,871)
(Decrease)
increase in
income incentive
fees payable (792,131) 224,380 420,772
Decrease in
capital gains
incentive fees
payable -- -- (569,528)
Increase
(decrease) in
administrative
services
payable 145,825 (8,638) 45,232
Increase in
interest
payable 856,733 40,179 600,323
Decrease in
related party
payable -- -- (1,060,321)
Increase in
unearned
revenue 33,381 150,901 77,050
Decrease in
income tax
payable -- -- (1,175,373)
(Decrease)
increase in
other accrued
expenses and
liabilities (565,022) 658,971 (197,248)
--------------- --------------- ---------------
Net Cash Used in
Operating
Activities $ (24,449,764) $ (28,648,480) $ (17,265,087)
--------------- --------------- ---------------
Cash Flows from
Financing
Activities
Proceeds from the
issuance of
common stock $ 20,588,960 $ 46,494,756 $ 63,348,436
Sales load for
common stock
issued (308,998) (698,166) (943,248)
Offering costs
paid for common
stock issued (606,848) (428,078) (253,913)
Stockholder
distributions
paid (45,265,991) (37,560,442) (35,527,480)
Proceeds from
issuance of
Notes Payable 124,877,750 -- --
Repayment of
Notes Payable (100,060,870) -- --
Financing costs
paid on Notes
Payable (2,574,553) -- --
Repayments of
SBA-guaranteed
debentures (26,000,000) -- 11,400,000
Financing costs
paid on
SBA-guaranteed
debentures -- -- (277,590)
Financing costs
paid on Credit
Facility (1,622,524) (691,137) (2,663,106)
Borrowings under
Credit Facility 300,550,000 187,900,000 108,400,000
Repayments of
Credit Facility (240,135,600) (172,435,600) (148,135,600)
--------------- --------------- ---------------
Net Cash Provided
(Used) by
Financing
Activities $ 29,441,326 $ 22,581,333 $ (4,652,501)
--------------- --------------- ---------------
Net Increase
(Decrease) in
Cash and Cash
Equivalents $ 4,991,562 $ (6,067,147) $ (21,917,588)
--------------- --------------- ---------------
Cash and Cash
Equivalents
Balance at
Beginning of
Period 20,058,594 26,125,741 48,043,329
--------------- --------------- ---------------
Cash and Cash
Equivalents
Balance at End of
Period $ 25,050,156 $ 20,058,594 $ 26,125,741
=============== =============== ===============
Supplemental and
Non-Cash
Activities
Cash paid for
interest
expense $ 31,383,195 $ 28,899,285 $ 29,051,198
Income and excise
tax paid 1,663,760 1,808,838 2,508,825
Exchange of
investments 1,663,301 8,256,411 3,610,846
Reconciliation of Core Net Investment Income(1)
(Unaudited)
Three Months Ended Years Ended
------------------------------------ ------------------------------------
December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024
----------------- ----------------- ----------------- -----------------
Net
investment
income $8,398,065 $9,641,326 $36,883,542 $41,929,593
Income tax
expense 136,154 503,890 1,580,338 1,808,838
----------------- ----------------- ----------------- -----------------
Core net
investment
income $8,534,219 $10,145,216 $38,463,880 $43,738,431
================= ================= ================= =================
Per share
amounts:
Net
investment
income per
share $0.29 $0.35 $1.30 $1.64
Core net
investment
income per
share $0.29 $0.37 $1.36 $1.71
Reconciliation of Realized Net Investment Income(2)
(Unaudited)
Three Months Ended Years Ended
------------------------------------ ------------------------------------
December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024
----------------- ----------------- ----------------- -----------------
Net investment
income $8,398,065 $9,641,326 $36,883,542 $41,929,593
Net realized
gain (loss) on
investments 5,490,677 5,952,860 1,530,584 (15,737,004)
Net realized
loss on foreign
currency
translation (9,764) (17,740) (68,844) (94,730)
Benefit for
taxes on net
realized loss
on investments -- -- -- 2,221
Loss on debt
extinguishment (61,333) -- (226,095) --
----------------- ----------------- ----------------- -----------------
Total realized
net investment
income $13,817,645 $15,576,446 $38,119,187 $26,100,080
================= ================= ================= =================
Per share
amounts:
Net investment
income per
share $0.29 $0.35 $1.30 $1.64
Realized net
investment
income per
share $0.48 $0.57 $1.34 $1.02
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SOURCE Stellus Capital Investment Corporation
(END) Dow Jones Newswires
March 11, 2026 16:52 ET (20:52 GMT)