Stellus Capital Investment Corporation Reports Results for its Fourth Fiscal Quarter and Year Ended December 31, 2025
PR Newswire
HOUSTON, March 11, 2026
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 | (8.61) | (0.30) | (6.86) | (0.25) | (11.10) | (0.39) | 19.57 | 0.76 | |||
Net unrealized change in depreciation on foreign | — | — | (0.02) | — | 0.03 | — | (0.02) | — | |||
Benefit for taxes on unrealized depreciation on | — | — | — | — | — | — | 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 | ||||||||
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 | ||||||||
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 | $ | 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 | $ | 183,470 | Senior Secured – First Lien | |||||
New Investment | October 17, 2025 | Fidus Systems Inc. | Provider of outsourced electronic product development and | $ | 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 | $ | 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 | $ | 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 | $ | 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 | 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 | $ | 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 | $ | 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 | $ | 7,009,391 | $ | — | Unsecured | ||||||
Full Realization | $ | 1,066,715 | $ | 1,066,715 | Warrants | |||||||||
Full Repayment | December 3, 2025 | Xanitos, Inc. | Environmental and ambulatory | $ | 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 | $ | 6,703,125 | $ | — | Senior Secured – First Lien | ||||||
Full Realization | December 8, 2025 | EHI Buyer, Inc. | Provider of design, engineering, | $ | 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 | $ | 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 & | $ | 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 | $ | 5,743 | Equity | |||||
Add-On Investment | February 3, 2026 | Green Topco Holdings, LLC* | Cyber-security focused value-added reseller and | $ | 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 | $ | 194,667 | Equity | |||||
Add-On Investment | February 18, 2026 | EH Real Estate Services, LLC* | Offers residential property brokerage, title & | $ | 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 & | $ | 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 | $ | 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 | $ | 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 | $ | 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
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, | $ | 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 | 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 | $ | 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 | (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 | — | 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 | $ | 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 | — | — | — | 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
