Stellus Capital Investment Corporation (NYSE: SCM) (“Stellus”, “we”, or the “Company”) today announced financial results for its fiscal quarter ended September 30, 2025.
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Robert T. Ladd, Chief Executive Officer of Stellus, stated, “I am pleased to report solid operating results for the quarter ended September 30, 2025, in which we earned U.S. GAAP net investment income of $0.32 per share, core net investment income of $0.34 per share and net realized income of $0.42 per share. During the quarter, we funded $64 million of investments and received $39 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 $318 million in distributions, equivalent to $17.75 per share, since we began operations.”
FINANCIAL HIGHLIGHTS
($ in millions, except data relating to per share amounts and shares outstanding)
Three Months Ended Nine Months Ended September30,2025 September30,2024 September30,2025 September30,2024 Amount Per Share Amount Per Share Amount Per Share Amount Per ShareNet investment income $9.14 $0.32 $10.26 $0.39 $28.48 $1.01 $32.29 $1.29Core net investment income(1) 9.65 0.34 10.62 0.40 29.93 1.06 33.59 1.34Net realized gain (loss) on investments 2.86 0.10 (3.30) (0.13) (3.96) (0.14) (21.69) (0.87)Net realized loss on foreign currency translation (0.01) – (0.02) – (0.06) – (0.08) -Loss on debt extinguishment (0.16) (0.01) – – (0.16) (0.01) – -Total realized income(2) $11.83 $0.41 $6.94 $0.26 $24.30 $0.86 $10.52 $0.42Distributions (11.43) (0.40) (10.63) (0.40) (33.89) (1.20) (30.32) (1.21)Net unrealized change in (depreciation) appreciation on investments (5.14) (0.18) 8.51 0.33 (2.51) (0.08) 26.44 1.05Net unrealized change in appreciation on foreign currency translation – – 0.01 – 0.04 – – -Benefit for taxes on unrealized depreciation on investments in taxable subsidiaries – – – – – – 0.19 0.01Net increase in net assets resulting from operations $6.69 $0.23 $15.46 $0.59 $21.83 $0.78 $37.15 $1.48Weighted average shares outstanding 28,480,472 26,326,426 28,168,527 25,066,626
(1) Core net investment income, as presented, excludes the impact of capital gains incentive fees (reversal) and income taxes, the majority of which are excise taxes. The Company believes presenting core net investment income and the related per share amount is a useful supplemental disclosure for analyzing its financial performance. However, core net investment income is a non-U.S. GAAP measure and should not be considered as a replacement for net investment income and other earnings measures presented in accordance with U.S. GAAP. A reconciliation of net investment income in accordance with U.S. GAAP to core net investment income is presented in the table below the financial statements.(2) Total realized income is the sum of net investment income, net realized gains (losses) on investments, net realized gains (losses) on foreign currency, and losses on debt extinguishment, all U.S. GAAP measures.
PORTFOLIO ACTIVITY
($ in millions, except data relating to per share amounts, shares outstanding, and number of portfolio companies)
As of As of September30,2025 December31,2024Investments at fair value $1,010.2 $953.5Total assets $1,028.6 $980.9Net assets $377.7 $369.9Shares outstanding 28,947,254 27,481,118Net asset value per share $13.05 $13.46 Three Months Ended Nine Months Ended September30,2025 September30,2024 September30,2025 September30,2024New investments $63.8 $17.8 $142.0 $112.6Repayments of investments (39.0) (15.5) (85.6) (87.3)Net activity $24.8 $2.3 $56.4 $25.3 As of As of September30,2025 December31,2024Number of portfolio company investments 115 105Number of debt investments 100 92Weighted average yield of debt and otherincome producing investments (3)Cash 9.0% 9.5%Payment-in-kind (“PIK”) 0.6% 0.4%Fee amortization 0.4% 0.4%Total 10.0% 10.3%Weighted average yield of total investments(4)Cash 8.4% 8.9%PIK 0.6% 0.4%Fee amortization 0.4% 0.4%Total 9.4% 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 September30,2025 and 2024 totaled $26.3 million and $26.5 million, respectively, most of which was interest income from portfolio investments.
Gross operating expenses for the three months ended September 30, 2025 and 2024 totaled $17.6 million and $16.2 million, respectively. For the same respective periods, base management fees totaled $4.4 million and $3.9 million, income incentive fees totaled $2.2 million and $2.6 million, fees and expenses related to our borrowings totaled $8.9 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 $0.5 million and $0.4 million and other expenses totaled $1.0 million and $0.8 million. The Company waived $0.5 million and $0.0 million of income incentive fees due to the total return limitation pursuant to the terms of the Investment Advisory Agreement between the Company and the Advisor (as defined below) for the three months ended September 30, 2025 and 2024, respectively, for net operating expenses of $17.1 million and $16.2 million, respectively.
Net investment income was $9.1 million and $10.3 million, or $0.32 and $0.39 per common share based on 28,480,472 and 26,326,426 weighted average common shares outstanding for the three months ended September30,2025 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 September30,2025 and 2024 was $9.7 million and $10.6 million, or $0.34 and $0.40 per share, respectively.
For the three months ended September30,2025 and 2024, the Company's investment portfolio had a net change in unrealized (depreciation) appreciation of ($5.1) million and $8.5 million, respectively, and the Company had net realized gains (losses) of $2.9 million and ($3.3) million, respectively.
Net increase in net assets resulting from operations totaled $6.7 million and $15.5 million, or $0.23 and $0.59 per common share, based on 28,480,472 and 26,326,426 weighted average common shares outstanding for the three months ended September30,2025 and 2024, respectively.
Liquidity and Capital Resources
As of September 30, 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 September 30, 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.
As of September 30, 2025 and December 31, 2024, the Company had $167.6 million and $175.4 million in outstanding borrowings under the Credit Facility, respectively.
The Company issued 531,106 shares during the three months ended September30,2025 under the at-the-market equity program (“ATM Program”) for gross proceeds of $7.4 million. The average per share offering price of shares issued under the ATM Program during the three months ended September30,2025 was $14.00.
Distributions
For both the three months ended September30,2025 and 2024, the Company declared aggregate distributions of $0.40 per share for both periods ($11.4 million and $10.6 million in the aggregate, respectively). Tax characteristics of all distributions will be reported to stockholders on Form 1099-DIV after the end of the calendar year. 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 September30,2025:
Activity Type Date Company Name Company Description Investment Amount Instrument TypeAdd-On Investment July 28, 2025 Equine Network, LLC* Hosts competitions and provides services for the U.S. equine $ 2,122,453 Senior Secured - First Lien industryNew Investment July 31, 2025 The Millennium Alliance, LLC Facilitator of peer-to-peer events connecting companies with $ 11,500,000 Senior Secured - First Lien technology solution providers $ 100,000 Revolver Commitment $ 515,556 EquityNew Investment July 31, 2025 Elder Care Opco LLC Provider of homecare services $ 7,785,007 Senior Secured - First Lien $ 2,500,000 Delayed Draw Term Loan Commitment $ 100,000 Revolver Commitment $ 910,966 EquityAdd-On Investment August 4, 2025 Guidant Corp.* Provider of liquid metering products and integrated solutions to the $ 66,030 Equity energy infrastructure sectorAdd-On Investment August 5, 2025 MedLearning Group, LLC* Provider of continuing medical education services $ 1,000,000 Senior Secured - First LienAdd-On Investment August 21, 2025 Invincible Boat Company LLC* Manufacturer and marketer of ultra-premium saltwater fishing boats $ 531,915 Revolver CommitmentNew Investment August 22, 2025 DMD Systems Recovery, LLC Provider of IT asset disposition services $ 6,100,000 Senior Secured - First Lien $ 1,000,000 Delayed Draw Term Loan Commitment $ 100,000 Revolver Commitment $ 180,000 EquityAdd-On Investment August 29, 2025 Compost 360 Acquisition, LLC* Organic waste recycler and producer of compost, mulch, and $ 27,630 Equity engineered soilsNew Investment September 19, 2025 Champion Services Acquireco LLC Provider of commercial re-roofing and restoration services $ 12,000,000 Senior Secured - First Lien $ 100,000 Revolver Commitment $ 268,889 EquityNew Investment September 22, 2025 DFO Enterprises, LLC Manufacturer of fiber optic cable assembly equipment, consumables, $ 11,580,474 Senior Secured - First Lien and precision components $ 100,000 Revolver Commitment $ 412,252 Equity
*Existing portfolio company
The Company realized investments in the following portfolio companies during the three months ended September30,2025:
Activity Type Date Company Name Company Description Proceeds Received Realized Gain (Loss) Instrument TypeFull Realization July 3, 2025 EOS Fitness Holdings, LLC Gym franchise operator $ 2,799,098 $ 2,799,098 EquityFull Repayment July 31, 2025 Rogers Mechanical Contractors, HVAC and plumbing designer, $ 8,272,652 $ – Senior Secured - First Lien LLC installer, and service provider for new/existing data centers, fulfilment sortation facilities, and warehousesFull Repayment August 21, 2025 CompleteCase, LLC Provider of online uncontested $ 6,287,212 $ – Senior Secured - First Lien divorce solutionsFull Repayment September 18, 2025 Cafe Valley, Inc. Wholesale bakery serving the $ 15,284,524 $ – Senior Secured - First Lien in-store bakery, food service, club, mass, C-store and international channels
*Existing portfolio company
Events Subsequent to September 30, 2025
The Company's management has evaluated subsequent events through November 10, 2025. 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 September 30, 2025:
Activity Type Date Company Name Company Description Investment Amount Instrument TypeAdd-On Investment October 1, 2025 The Hardenbergh Group, Inc.* Provider of patient safety, clinical risk mitigation, and $ 500,000 Senior Secured - First Lien healthcare compliance solutionsAdd-On Investment October 3, 2025 EH Real Estate Services, LLC* Offers residential property brokerage, title & $ 183,470 Senior Secured - First Lien settlement, and property and casualty insurance brokerage services to home buyers and sellersAdd-On Investment October 17, 2025 J.R. Watkins, LLC* Manufacturer and distributor of home and personal $ 18,000 Priority Revolver Commitment care productsNew Investment October 17, 2025 Fidus Systems Inc. Provider of outsourced electronic product $ 4,759,099 Senior Secured - First Lien development and engineering services $ 3,172,733 Delayed Draw Term Loan Commitment $ 100,000 Revolver Commitment $ 267,728 EquityAdd-On Investment November 6, 2025 Mobotrex Acquisition, LLC* Distributor and manufacturer of intelligent traffic $ 3,523,787 Senior Secured - First Lien solution equipment $ 1,549,698 Delayed Draw Term Loan Commitment $ 73,776 Revolver CommitmentAdd-On Investment November 6, 2025 Ad.Net Acquisition, LLC* A digital marketing company that targets $ 1,896,568 Senior Secured - First Lien high-conversion consumers through cost-per-click digital media advertising $ 85,027 Equity
*Existing portfolio company
The Company realized investments in the following portfolio companies subsequent to September 30, 2025:
Activity Type Date Company Name Company Description Proceeds Received Realized Gain Instrument TypeFull Repayment October 25, 2025 Heartland Business Systems, LLC End-to-end information technologies $ 9,725,000 $ – Senior Secured - First Lien solutions provider $ 48,875 $ – Delayed Draw Term LoanFull Repayment November 3, 2025 NuSource Financial Acquisition, Inc. Provider of technology integration $ 7,014,746 $ – Unsecured and installation of teller machines, maintenance services, and security solutionsFull Realization $ 1,066,715 $ 1,066,715 Warrants
Credit Facility
The outstanding balance under the Credit Facility as of November 10, 2025 was $182.8 million.
Distributions Declared
On October 8, 2025, the Board of Directors of the Company declared a regular monthly dividend for each of October 2025, November 2025, and December 2025 as follows:
Ex-Dividend Record Payment AmountperDeclared Date Date Date Share10/8/2025 10/31/2025 10/31/2025 11/14/2025 $ 0.133310/8/2025 11/28/2025 11/28/2025 12/15/2025 $ 0.133310/8/2025 12/31/2025 12/31/2025 1/15/2026 $ 0.1333
Conference Call Information
Stellus Capital Investment Corporation will host a conference call to discuss these results on Wednesday, November 12, 2025 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 118871. Starting approximately two hours after the conclusion of the call, a replay will be available through Wednesday, November 26, 2025 by dialing (877) 481-4010 and entering passcode 53167. 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 CORPORATIONCONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES September30,2025 (unaudited) December31,2024ASSETSControlled investments at fair value (amortized cost of $33,202,703 $ 13,568,095 $ 7,652,436and $17,934,808, respectively)Non-controlled, non-affiliated investments, at fair value (amortized cost of 996,641,541 945,845,252$986,914,541 and $943,853,898, respectively)Cash and cash equivalents 9,024,020 20,058,594Receivable for sales and repayments of investments 437,552 335,689Interest receivable 7,047,686 4,947,765Income tax receivable 1,522,198 1,301,965Other receivables 99,111 87,995Related party receivable 22,500 3,687Prepaid expenses 281,634 666,866Total Assets $ 1,028,644,337 $ 980,900,249LIABILITIESNotes Payable $ 172,522,707 $ 99,444,355Credit Facility payable 163,995,602 172,314,315SBA-guaranteed debentures 295,805,634 321,251,939Dividends payable 3,858,669 3,663,233Management fees payable 4,401,305 4,034,109Income incentive fees payable 2,642,033 3,109,560Interest payable 5,912,375 5,281,343Related party payable 136,535 -Unearned revenue 640,637 548,626Administrative services payable 507,139 393,513Other accrued expenses and liabilities 491,374 937,316Total Liabilities $ 650,914,010 $ 610,978,309Commitments and contingencies (Note 7)Net Assets $ 377,730,327 $ 369,921,940NET ASSETSCommon stock, par value $0.001 per share (100,000,000 shares authorized; 28,947,254 $ 28,947 $ 27,481and 27,481,118 shares issued and outstanding, respectively)Paid-in capital 399,410,630 379,549,272Total distributable loss (21,709,250) (9,654,813)Net Assets $ 377,730,327 $ 369,921,940Total Liabilities and Net Assets $ 1,028,644,337 $ 980,900,249Net Asset Value Per Share $ 13.05 $ 13.46
STELLUS CAPITAL INVESTMENT CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) For the three months ended For the nine months ended September30,2025 September30,2024 September30,2025 September30,2024INVESTMENT INCOMEFrom controlled investments:Interest income $ – $ – $ – $ 81,636From non-controlled, non-affiliated investmentsInterest income 23,634,587 24,403,375 69,923,357 72,969,302Payment-in-kind interest income 1,378,166 934,986 3,870,717 2,490,854Other income 1,262,956 1,159,898 3,129,895 3,579,415Total Investment Income $ 26,275,709 $ 26,498,259 $ 76,923,969 $ 79,121,207OPERATING EXPENSESManagement fees $ 4,401,305 $ 3,959,554 $ 12,735,472 $ 11,664,020Valuation fees 172,364 151,535 368,760 343,753Administrative services expenses 592,409 469,274 1,515,991 1,441,436Income incentive fees 2,166,047 2,564,922 6,460,613 7,616,562Professional fees 395,098 312,034 1,125,937 847,866Directors' fees 93,250 93,250 297,750 315,750Insurance expense 99,248 126,362 295,006 376,840Interest expense and other fees 8,949,075 7,956,403 25,892,109 23,840,473Income tax expense 515,686 360,192 1,444,184 1,304,948Other general and administrative expenses 227,037 245,043 945,690 908,185Total Operating Expenses $ 17,611,519 $ 16,238,569 $ 51,081,512 $ 48,659,833Income incentive fee waiver (471,251) – (2,643,020) (1,826,893)Total Operating Expenses, net of fee waivers $ 17,140,268 $ 16,238,569 $ 48,438,492 $ 46,832,940Net Investment Income $ 9,135,441 $ 10,259,690 $ 28,485,477 $ 32,288,267Net realized loss on controlled investments $ – $ – $ (1,132,576) $ -Net realized gain (loss) on non-controlled, non-affiliated 2,867,155 (3,297,615) (2,827,517) (21,689,864)investmentsNet realized loss on foreign currency translations (9,422) (22,095) (59,080) (76,990)Loss on debt extinguishment (164,762) – (164,762) -Net change in unrealized appreciation on controlled 51,367 248,746 1,397,134 923,505investmentsNet change in unrealized (depreciation) appreciation on (5,187,426) 8,255,272 (3,906,233) 25,512,422non-controlled, non-affiliated investmentsNet change in unrealized (depreciation) appreciation on (325) 14,588 38,540 5,099foreign currency translationsBenefit for taxes on net unrealized depreciation on investments – – – 188,893Benefit for taxes on net realized loss on investments – 2,221 – 2,221Net Increase in Net Assets Resulting from Operations $ 6,692,028 $ 15,460,807 $ 21,830,983 $ 37,153,553Net Investment Income Per Share-basic and diluted $ 0.32 $ 0.39 $ 1.01 $ 1.29Net Increase in Net Assets Resulting from Operations $ 0.23 $ 0.59 $ 0.78 $ 1.48Per Share - basic and dilutedWeighted Average Shares of Common Stock 28,480,472 26,326,426 28,168,527 25,066,626Outstanding-basic and dilutedDistributions Per Share-basic and diluted $ 0.40 $ 0.40 $ 1.20 $ 1.21
STELLUS CAPITAL INVESTMENT CORPORATIONCONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (unaudited) CommonStock Total Number Par Paid-in distributable ofshares value capital (loss) NetAssetsBalances at December31,2023 24,125,642 $ 24,125 $ 335,918,984 $ (16,003,321) $ 319,939,788Net investment income – – – 10,235,916 10,235,916Net realized loss on investments – – – (20,384,731) (20,384,731)Net realized loss on foreign currency translations – – – (25,106) (25,106)Net change in unrealized appreciation on investments – – – 23,518,590 23,518,590Net change in unrealized depreciation on foreign currency translations – – – (3,602) (3,602)Provision for taxes on unrealized appreciation on investments – – – (192,607) (192,607)Distributions from net investment income – – – (9,647,844) (9,647,844)Balances at March 31,2024 24,125,642 $ 24,125 $ 335,918,984 $ (12,502,705) $ 323,440,404Net investment income – – – 11,792,661 11,792,661Net realized gain on investments – – – 1,992,482 1,992,482Net realized loss on foreign currency translations – – – (29,789) (29,789)Net change in unrealized depreciation on investments – – – (5,586,681) (5,586,681)Net change in unrealized depreciation on foreign currency translations – – – (5,887) (5,887)Benefit for taxes on unrealized depreciation on investments – – – 381,500 381,500Distributions from net investment income – – – (10,049,073) (10,049,073)Issuance of common stock, net of offering costs(1) 1,855,356 1,856 25,248,020 – 25,249,876Balances at June30,2024 25,980,998 $ 25,981 $ 361,167,004 $ (14,007,492) $ 347,185,493Net investment income – – – 10,259,690 10,259,690Net realized loss on investments – – – (3,297,615) (3,297,615)Net realized loss on foreign currency translation – – – (22,095) (22,095)Net change in unrealized appreciation on investments – – – 8,504,018 8,504,018Net change in unrealized appreciation on foreign currency translations – – – 14,588 14,588Benefit for taxes on net realized loss on investments – – – 2,221 2,221Distributions from net investment income – – – (10,625,512) (10,625,512)Issuance of common stock, net of offering costs(1) 1,058,366 1,058 14,263,441 – 14,264,499Balances at September30,2024 27,039,364 $ 27,039 $ 375,430,445 $ (9,172,197) $ 366,285,287Balances at December31,2024 27,481,118 $ 27,481 $ 379,549,272 $ (9,654,813) $ 369,921,940Net investment income – – – 9,788,809 9,788,809Net realized loss on investments – – – (5,967,221) (5,967,221)Net realized loss on foreign currency translations – – – (29,655) (29,655)Net change in unrealized appreciation on investments – – – 1,193,293 1,193,293Net change in unrealized depreciation on foreign currency translations – – – 8,319 8,319Distributions from net investment income – – – (11,087,389) (11,087,389)Issuance of common stock, net of offering costs(1) 656,085 656 8,937,430 – 8,938,086Balances at March 31,2025 28,137,203 $ 28,137 $ 388,486,702 $ (15,748,657) $ 372,766,182Net investment income – – – 9,561,227 9,561,227Net realized loss on investments – – – (860,027) (860,027)Net realized loss on foreign currency translations – – – (20,003) (20,003)Net change in unrealized appreciation on investments – – – 1,433,667 1,433,667Net change in unrealized appreciation on foreign currency translations – – – 30,546 30,546Distributions from net investment income – – – (11,363,618) (11,363,618)Issuance of common stock, net of offering costs(1) 278,945 279 3,822,637 – 3,822,916Balances at June 30,2025 28,416,148 $ 28,416 $ 392,309,339 $ (16,966,865) $ 375,370,890Net investment income – – – 9,135,441 9,135,441Net realized gain on investments – – – 2,867,155 2,867,155Net realized loss on foreign currency translations – – – (9,422) (9,422)Loss on debt extinguishment – – – (164,762) (164,762)Net change in unrealized depreciation on investments – – – (5,136,059) (5,136,059)Net change in unrealized depreciation on foreign currency translations – – – (325) (325)Distributions from net investment income – – – (11,434,413) (11,434,413)Issuance of common stock, net of offering costs(1) 531,106 531 7,101,291 – 7,101,822Balances at September 30,2025 28,947,254 $ 28,947 $ 399,410,630 $ (21,709,250) $ 377,730,327
STELLUS CAPITAL INVESTMENT CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) For the nine months ended September30,2025 September30,2024Cash Flows from Operating ActivitiesNet increase in net assets resulting from operations $ 21,830,983 $ 37,153,553Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities:Purchases of investments (141,983,167) (112,624,812)Proceeds from sales and repayments of investments 85,635,632 87,308,914Net change in unrealized depreciation (appreciation) on investments 2,509,099 (26,435,927)Net change in unrealized appreciation on foreign currency translations (37,811) (5,099)Increase in investments due to PIK (3,870,717) (2,490,856)Amortization of premium and accretion of discount, net (2,172,972) (2,045,992)Deferred tax benefit – (188,893)Amortization of loan structure fees 954,033 825,891Amortization of deferred financing costs 447,751 335,345Amortization of discount on Notes Payable 63,395 -Amortization of loan fees on SBA-guaranteed debentures 553,695 784,763Net realized loss on investments 3,960,093 21,689,864Loss on debt extinguishment 164,762 -Changes in other assets and liabilitiesIncrease in interest receivable (2,099,921) (1,389,856)Increase in income tax receivable (220,233) (228,663)Increase in other receivables (11,116) (25,000)Increase in related party receivables (18,813) -Decrease in prepaid expenses 385,232 349,950Increase in management fees payable 367,196 1,041,018(Decrease) increase in income incentive fees payable (467,527) 269,396Increase (decrease) in administrative services payable 113,626 (1,118)Increase (decrease) in interest payable 631,032 (3,988,133)Increase in related party payable 136,535 1,898,854Increase in unearned revenue 92,011 152,623(Decrease) increase in other accrued expenses and liabilities (445,942) 718,139Net Cash (Used) Provided in Operating Activities $ (33,483,144) $ 3,103,961Cash Flows from Financing ActivitiesProceeds from the issuance of common stock $ 20,588,960 $ 40,370,901Sales load for common stock issued (308,998) (606,145)Offering costs paid for common stock issued (417,138) (243,067)Stockholder distributions paid (33,689,984) (26,718,082)Proceeds from issuance of Notes Payable 125,000,000 -Repayment of Notes Payable (50,000,000) -Premium from issuance of Notes Payable 648,000 -Discount from issuance of Notes Payable (770,250) -Financing costs paid on Notes Payable (2,475,306) -Repayments of SBA-guaranteed debentures (26,000,000) -Financing costs paid on Credit Facility (1,525,014) (101,348)Borrowings under Credit Facility 198,900,000 122,400,000Repayments of Credit Facility (207,501,700) (125,751,700)Net Cash Provided by Financing Activities $ 22,448,570 $ 9,350,559Net (Decrease) Increase in Cash and Cash Equivalents $ (11,034,574) $ 12,454,520Cash and Cash Equivalents Balance at Beginning of Period $ 20,058,594 $ 26,125,741Cash and Cash Equivalents Balance at End of Period $ 9,024,020 $ 38,580,261Supplemental and Non-Cash ActivitiesCash paid for interest expense $ 24,940,287 $ 25,882,607Income and excise tax paid 1,664,417 1,533,611Exchange of investments 1,663,301 8,256,411
Reconciliation of Core Net Investment Income(1)(Unaudited) Three Months Ended Nine Months Ended September30,2025 September30,2024 September30,2025 September30,2024Net investment income $9,135,441 $10,259,690 $28,485,477 $32,288,267Income tax expense 515,686 360,192 1,444,184 1,304,948Core net investment income $9,651,127 $10,619,882 $29,929,661 $33,593,215Per share amounts:Net investment income per share $0.32 $0.39 $1.01 $1.29Core net investment income per share $0.34 $0.40 $1.06 $1.34
Reconciliation of Realized Net Investment Income(2)(Unaudited) Three Months Ended Nine Months Ended September30,2025 September30,2024 September30,2025 September30,2024Net investment income $9,135,441 $10,259,690 $28,485,477 $32,288,267Net realized gain (loss) on investments 2,867,155 (3,297,615) (3,960,093) (21,689,864)Net realized loss on foreign currency translation (9,422) (22,095) (59,080) (76,990)Benefit for taxes on net realized loss on investments – 2,221 – 2,221Loss on debt extinguishment (164,762) – (164,762) -Total realized net investment income $11,828,412 $6,942,201 $24,301,542 $10,523,634Per share amounts:Net investment income per share $0.32 $0.39 $1.01 $1.29Realized net investment income per share $0.42 $0.26 $0.86 $0.42
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