Stellus Capital Investment Corporation Reports Results for its Fourth Fiscal Quarter and Year Ended December 31, 2025
HOUSTON, March 11, 2026 /PRNewswire/ -- Stellus Capital Investment Corporation (NYSE: 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 Type
Date
Company Name
Company Description
Investment Amount
Instrument Type
Add-On Investment
October 1, 2025
The Hardenbergh Group, Inc.*
Provider of patient safety, clinical risk mitigation, and healthcare
compliance solutions
$
500,000
Senior Secured – First Lien
Add-On Investment
October 2, 2025
J.R. Watkins, LLC*
Manufacturer and distributor of home and personal care products
$
225,000
Priority Revolver Commitment
Add-On Investment
October 3, 2025
EH Real Estate Services, LLC*
Offers residential property brokerage, title & settlement, and
property and casualty insurance brokerage services to home buyers
and sellers
$
183,470
Senior Secured – First Lien
New Investment
October 17, 2025
Fidus Systems Inc.
Provider of outsourced electronic product development and
engineering services
$
4,759,099
Senior Secured – First Lien
$
3,172,733
Delayed Draw Term Loan Commitment
$
100,000
Revolver Commitment
$
267,728
Equity
Add-On Investment
October 22, 2025
Recharged Opco, LLC*
Provider of residential electrical services
$
120,000
Priority Revolver Commitment
Add-On Investment
October 27, 2025
Channel Partners Intermediateco, LLC*
Provider of outsourced marketing services
$
35,175
Revolver Commitment
Add-On Investment
November 6, 2025
Mobotrex Acquisition, LLC*
Distributor and manufacturer of intelligent traffic solution
equipment
$
3,523,787
Senior Secured – First Lien
$
1,549,698
Delayed Draw Term Loan Commitment
$
73,776
Revolver Commitment
Add-On Investment
November 6, 2025
Ad.Net Acquisition, LLC*
A digital marketing company that targets high-conversion
consumers through cost-per-click digital media advertising
$
1,896,568
Senior Secured – First Lien
$
85,027
Equity
Add-On Investment
November 12, 2025
EH Real Estate Services, LLC*
Offers residential property brokerage, title & settlement, and
property and casualty insurance brokerage services to home buyers
and sellers
$
228,112
Senior Secured – First Lien
Add-On Investment
November 19, 2025
SP L2 Holdings LLC*
Provider of premium in-pool and backyard furniture
$
14,832
Equity
Add-On Investment
December 3, 2025
BC Partners Glengarry Co-Investment
LP*
Provider of business-to-business account based marketing services
$
10,197
Equity
New Investment
December 3, 2025
Pure Upper Holdco LLC
Environmental and ambulatory cleaning services for healthcare
facilities
$
10,000,000
Senior Secured – First Lien
$
1,000,000
Delayed Draw Term Loan Commitment
$
100,000
Revolver Commitment
$
246,667
Equity
Add-On Investment
December 5, 2025
Venbrook Buyer, LLC*
An independent insurance services broker
$
471,156
Senior Secured – First Lien
Add-On Investment
December 15, 2025
SP CS Holdings LLC*
Provider of product testing and consumer insights
$
127,174
Equity
Add-On Investment
December 15, 2025
Recharged Opco, LLC*
Provider of residential electrical services
$
42,500
Priority Revolver Commitment
Add-On Investment
December 17, 2025
Carolina Topco Holdings, LP*
National commercial surface care and restoration company
$
116,033
Equity
New Investment
December 18, 2025
Pilot Power Group Acquisition, Inc.
Managed energy procurement and energy advisory services
$
12,000,000
Senior Secured – First Lien
$
366,868
Equity
Add-On Investment
December 22, 2025
Solid Surface Holdco, LLC*
National commercial surface care and restoration company
$
38,000
Revolver Commitment
New Investment
December 23, 2025
Valor Buyco, LLC
Provider of dispatched road services
$
6,000,000
Senior Secured – First Lien
$
100,000
Delayed Draw Term Loan Commitment
$
100,000
Revolver Commitment
$
430,556
Equity
Add-On Investment
December 31, 2025
Venbrook Buyer, LLC*
An independent insurance services broker
$
942,301
Senior Secured – First Lien
Add-On Investment
December 31, 2025
FairWave Holdings, LLC*
Specialty coffee platform
$
103,720
Senior 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:
Activity Type
Date
Company Name
Company Description
Proceeds Received
Realized Gain (Loss)
Instrument Type
Full Repayment
October 25, 2025
Heartland Business Systems, LLC
End-to-end information
technologies solutions provider
$
9,725,000
$
—
Senior Secured – First Lien
$
48,875
$
—
Delayed Draw Term Loan
$
824,743
$
656,088
Equity
Full Repayment
November 3, 2025
NuSource Financial Acquisition, Inc.
Provider of technology integration
and installation of teller machines,
maintenance services, and security
solutions
$
7,009,391
$
—
Unsecured
Full Realization
$
1,066,715
$
1,066,715
Warrants
Full Repayment
December 3, 2025
Xanitos, Inc.
Environmental and ambulatory
cleaning services for healthcare
facilities
$
12,256,000
$
—
Senior Secured – First Lien
$
2,159,481
$
—
Delayed Draw Term Loan
$
2,756,526
$
1,703,048
Equity
Full Repayment
December 5, 2025
Unicat Catalyst Holdings, LLC
Manufacturer and distributor of
catalysts and other industrial
products
$
6,703,125
$
—
Senior Secured – First Lien
Full Realization
December 8, 2025
EHI Buyer, Inc.
Provider of design, engineering,
installation, and maintenance
services for building management
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 Type
Date
Company Name
Company Description
Investment Amount
Instrument Type
Add-On Investment
January 2, 2026
Bart & Associates, LLC*
Provider of content, information, tech-enabled
services, and hosts competitions for the U.S. equine
industry
$
2,000,000
Senior Secured – First Lien
$
43,413
Equity
New Investment
January 9, 2026
Silver Parent, LLC
Senior-care focused placement platform
$
7,130,301
Senior Secured – First Lien
$
100,000
Revolver Commitment
$
498,641
Equity
Add-On Investment
January 15, 2026
GRC Java Holdings, LLC*
Specialty coffee platform
$
42,783
Equity
Add-On Investment
January 20, 2026
EH Real Estate Services, LLC*
Offers residential property brokerage, title &
settlement, and property and casualty insurance
brokerage services to home buyers
and sellers
$
380,186
Senior Secured – First Lien
Add-On Investment
January 21, 2026
evolv Holdco, LLC*
Digital transformation consulting firm
$
8,036
Equity
Add-On Investment
February 2, 2026
BI Investors, LLC*
Provider of center-based applied behavioral analysis
therapy services
$
5,743
Equity
Add-On Investment
February 3, 2026
Green Topco Holdings, LLC*
Cyber-security focused value-added reseller and
associated service provider
$
16,598
Equity
Add-On Investment
February 3, 2026
Venbrook Buyer, LLC*
An independent insurance services broker
$
628,201
Senior Secured – First Lien
Add-On Investment
February 6, 2026
SP MWM Holdco LLC*
Provider of test and measurement services and
equipment
$
194,667
Equity
Add-On Investment
February 18, 2026
EH Real Estate Services, LLC*
Offers residential property brokerage, title &
settlement, and property and casualty insurance
brokerage services to home buyers
and sellers
$
190,093
Senior Secured – First Lien
Add-On Investment
February 25, 2026
Venbrook Buyer, LLC*
An independent insurance services broker
$
1,256,415
Senior Secured – First Lien
Add-On Investment
March 3, 2026
EH Real Estate Services, LLC*
Offers residential property brokerage, title &
settlement, and property and casualty insurance
brokerage services to home buyers
and sellers
$
190,093
Senior Secured – First Lien
New Investment
March 3, 2026
Precision Strategies, LLC
Strategic communications and marketing agency
$
6,176,011
Senior Secured – First Lien
$
100,000
Revolver Commitment
New Investment
March 6, 2026
Synergy Health Partners
Provider of orthopedic and musculoskeletal care
$
4,000,000
Senior Secured – First Lien
$
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 Type
Date
Company Name
Company Description
Proceeds Received
Realized Gain
Instrument Type
Full Repayment
January 30, 2026
Luxium Solutions, LLC
Manufacturer and distributor of
high-performance advanced
materials and assemblies
$
8,169,324
$
—
Senior Secured – First Lien
$
1,182,247
$
—
Delayed Draw Term Loan
Full Repayment
January 30, 2026
Camp Profiles LLC
Provider of digital marketing
services to small and medium-sized
businesses
$
12,041,875
$
—
Senior Secured – First Lien
Full Realization
$
969,138
$
719,138
Equity
Full Repayment
February 3, 2026
Arctiq, Inc.
Cyber-security focused value-added
reseller and associated service
provider
$
12,202,671
$
—
Senior Secured – First Lien
$
399,965
$
—
Delayed Draw Term 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
1/16/2026
1/30/2026
1/30/2026
2/13/2026
$
0.1133
1/16/2026
2/27/2026
2/27/2026
3/13/2026
$
0.1133
1/16/2026
3/31/2026
3/31/2026
4/15/2026
$
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
[email protected]
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
of shares
value
capital
(loss) 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
SOURCE Stellus Capital Investment Corporation