18:44:00 EDT Mon 11 May 2026
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Stellus Capital Investment Corporation Reports Results for its First Fiscal Quarter Ended March 31, 2026

2026-05-11 16:05 ET - News Release

Stellus Capital Investment Corporation Reports Results for its First Fiscal Quarter Ended March 31, 2026

PR Newswire

HOUSTON, May 11, 2026 /PRNewswire/ -- Stellus Capital Investment Corporation (NYSE:SCM) ("Stellus", "we", or the "Company") today announced financial results for its fiscal quarter ended March 31, 2026.

Robert T. Ladd, Chief Executive Officer of Stellus, stated, "I am pleased to report solid operating results for the quarter ended March 31, 2026, in which we earned U.S. GAAP net investment income of $0.26 per share, core net investment income of $0.27 per share and net realized income of $0.29 per share. During the quarter, we funded $28 million of investments and received $42 million of repayments, resulting in a total portfolio of $990 million at fair value. I'm also pleased to report that our investors have received a total of $339 million in distributions, equivalent to $18.49 per share, since we began operations."

FINANCIAL HIGHLIGHTS
($ in millions, except data relating to per share amounts and shares outstanding)



                                                                                       
      
          Three Months Ended


                                                                               March 31, 2026                                         March 31, 2025


                                                                        Amount                 Per Share                     Amount                  Per Share



 Net investment income                                                  $7.50                      $0.26                       $9.79                       $0.35



 Core net investment income(1)                                           7.86                       0.27                       10.29                        0.37



 Net realized gain (loss) on investments                                 0.75                       0.03                      (5.97)                     (0.21)



 Net realized gain (loss) on foreign currency translation                                                                   (0.03)



 Total realized income(2)                                               $8.25                      $0.29                       $3.79                       $0.14



 Distributions                                                         (9.84)                    (0.34)                    (11.09)                     (0.40)



 Net unrealized change in (depreciation) appreciation on investments   (6.54)                    (0.23)                       1.20                        0.04



 Net unrealized change in depreciation on foreign currency translation (0.05)



 Net increase in net assets resulting from operations                   $1.66                      $0.06                       $4.99                       $0.18



 Weighted average shares outstanding                                                         28,947,254                                             27,602,612




 (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


                                                                     March 31, 2026                    December 31, 2025



          Investments at fair value                                         $990.0                              $1,007.6



          Total assets                                                    $1,001.3                              $1,041.3



          Net assets                                                        $363.0                                $371.2



          Shares outstanding                                            28,947,254                            28,947,254



          Net asset value per share                                         $12.54                                $12.82




                                                                                    Three Months Ended


                                                                     March 31, 2026                      March 31, 2025



          New investments                                                    $27.7                                 $55.4



          Repayments of investments                                         (41.7)                               (15.0)



          Net activity                                                     ($14.0)                                $40.4




                                                                          As of                              As of


                                                                     March 31, 2026                    December 31, 2025



          Number of portfolio company investments                              116                                   115



          Number of debt investments                                           100                                   100





          Weighted average yield of debt and other income producing
investments (3)



          Cash                                                               8.1 %                                8.5 %



          Payment-in-kind ("PIK")                                            0.6 %                                0.5 %



          Fee amortization                                                   0.3 %                                0.3 %



          Total                                                              9.0 %                                9.3 %





          Weighted average yield of total investments(4)



          Cash                                                               7.6 %                                7.9 %



          PIK                                                                0.6 %                                0.5 %



          Fee amortization                                                   0.3 %                                0.3 %



          Total                                                              8.5 %                                8.7 %




 (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 March 31, 2026 and 2025 totaled $23.3 million and $25.0 million, respectively, most of which was interest income from portfolio investments.

Gross operating expenses for the three months ended March 31, 2026 and 2025 totaled $15.8 million and $16.4 million, respectively. For the same respective periods, base management fees totaled $4.4 million and $4.1 million, income incentive fees totaled $0.1 million and $2.1 million, fees and expenses related to our borrowings totaled $8.9 million and $8.3 million (including interest and amortization of deferred financing costs), administrative expenses totaled $0.6 million and $0.4 million, income tax totaled $0.4 million and $0.5 million and other expenses totaled $1.4 million and $1.0 million. The Company waived $0.0 million and $1.2 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 March 31, 2026 and 2025, respectively, for net operating expenses of $15.8 million and $15.2 million, respectively.

Net investment income was $7.5 million and $9.8 million, or $0.26 and $0.35 per common share based on 28,947,254 and 27,602,612 weighted average common shares outstanding for the three months ended March 31, 2026 and 2025, 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 March 31, 2026 and 2025 was $7.9 million and $10.3 million, or $0.27 and $0.37 per share, respectively.

For the three months ended March 31, 2026 and 2025, the Company's investment portfolio had a net change in unrealized (depreciation) appreciation of ($6.5) million and $1.2 million, respectively, and the Company had net realized gains (losses) of $0.8 million and ($6.0) million, respectively.

Net increase in net assets resulting from operations totaled $1.7 million and $5.0 million, or $0.06 and $0.18 per common share, based on 28,947,254 and 27,602,612 weighted average common shares outstanding for the three months ended March 31, 2026 and 2025, respectively.

Liquidity and Capital Resources

As of March 31, 2026, 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 both March 31, 2026 and December 31, 2025, the Credit Facility had an accordion feature which allowed for potential future expansion of the facility size up to $365.0 million.

As of March 31, 2026 and December 31, 2025, the Company had $241.5 million and $236.6 million in outstanding borrowings under the Credit Facility, respectively.

Distributions

For the three months ended March 31, 2026 and 2025, the Company declared aggregate distributions of $0.34 per share and $0.40 per share, respectively ($9.8 million and $11.1 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 March 31, 2026:



                 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                                                        $
      2,000,000               Senior Secured - First Lien
                                                                                 competitions for the U.S. equine industry


                                                                                                                                                             $
      43,413        
      Equity



 New Investment               January 9, 2026     Silver Corporate Holdings 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,       EH Real Estate Services, LLC*            Offers residential property brokerage, title & settlement,
                                     2026                                                     and                                                            $
      380,186               Senior Secured - First Lien
                                                                                  property and casualty insurance brokerage services to home
                                                                                  buyers
                                                                                 and sellers


  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      $
      5,743        
      Equity
                                                                                 services


  Add-On Investment              February 3,       Green Topco Holdings, LLC*               Cyber-security focused value-added reseller and associated
                                     2026                                                     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,      EH Real Estate Services, LLC*            Offers residential property brokerage, title & settlement,
                                     2026                                                     and                                                            $
      190,093               Senior Secured - First Lien
                                                                                  property and casualty insurance brokerage services to home
                                                                                  buyers
                                                                                 and sellers


  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                                                            $
      190,093               Senior Secured - First Lien
                                                                                  property and casualty insurance brokerage services to home
                                                                                  buyers
                                                                                 and sellers



 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 MSO,
                                                    LLC                          
          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


  Add-On Investment             March 24, 2026  
  Eskola LLC*                   
          Provider of commercial re-roofing services                      $
      101,429        
      Equity


          _________________________


          *Existing portfolio company

The Company realized investments in the following portfolio companies during the three months ended March 31, 2026:



              Activity Type           Date              Company Name                         Company Description             Proceeds Received              Realized
                                                                                                                                                    Gain              Instrument Type


 Full Repayment             January 23,    Camp Profiles LLC                    Provider of digital marketing    $
    12,041,875        
     $                     Senior Secured - First
                                2026                                                                                                                                  Lien
                                                                      services to small and medium-
                                                                      sized
                                                                     businesses


 Full Realization                                                                                                   $
    969,138                $
 719,138       
   Equity


 Full Repayment             January 30,    Luxium Solutions,                    Manufacturer and distributor      $
    8,169,324        
     $                     Senior Secured - First
                                2026         LLC                                  of                                                                                  Lien
                                                                     high-performance advanced
                                                                     materials and assemblies


                                                                                                                  $
    1,182,247        
     $                     Delayed Draw Term Loan


 Full Repayment             February 3,    Arctiq, Inc.                         Cyber-security focused           $
    12,202,671        
     $                     Senior Secured - First
                                2026                                              value-added                                                                         Lien
                                                                      reseller and associated
                                                                      service
                                                                     provider


                                                                                                                    $
    399,965        
     $                     Delayed Draw Term Loan

Events Subsequent to March 31, 2026

The Company's management has evaluated subsequent events through May 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 March 31, 2026:



                 Activity Type          Date                  Company Name       
          
            Company Description                Investment Amount         
           Instrument Type


  Add-On Investment             April 1,       EH Real Estate Services,                Offers residential property brokerage,
                                  2026           LLC*                                    title &                                    $
   190,093               Senior Secured - First Lien
                                                                             settlement, and property and casualty
                                                                             insurance
                                                                            brokerage services to home buyers
                                                                            and sellers



 New Investment                April 3,
                                  2026          VeloSource Purchaser, LLC    
          Locum tenens staffing agency                $
   200,000               Senior Secured - First Lien


                                                                                                                                   $
   100,000               Delayed Draw Term Loan
                                                                                                                                                              Commitment


                                                                                                                                   $
   100,000        
      Revolver Commitment


                                                                                                                                    $
   18,605        
      Equity


  Add-On Investment            April 13,
                                  2026          Venbrook Buyer, LLC*                    An independent insurance services broker  $
   1,256,415               Senior Secured - First Lien



 New Investment               April 13,       Solomon AcquisitionCo, LLC              An innovative process automation and
                                  2026                                                   digital systems                          $
   4,196,557               Senior Secured - First Lien
                                                                            integrator


                                                                                                                                   $
   100,000        
      Revolver Commitment


                                                                                                                                   $
   186,807        
      Equity



 New Investment               April 27,     
 Project Freeze**                        Manufacturer of walk-in coolers, freezers,
                                  2026                                                   and                                      $
   4,000,000               Senior Secured - First Lien
                                                                            refrigeration systems


                                                                                                                                   $
   100,000               Delayed Draw Term Loan
                                                                                                                                                              Commitment


                                                                                                                                   $
   100,000        
      Revolver Commitment


                                                                                                                                   $
   324,074        
      Equity


  Add-On Investment            April 28,
                                  2026          Venbrook Buyer, LLC*                    An independent insurance services broker    $
   502,566               Senior Secured - First Lien


  Add-On Investment            April 28,       Advanced Barrier Extrusions,
                                  2026           LLC*                                   Manufacturer of flexible packaging          $
   330,250               Senior Secured - First Lien


          _________________________


          *Existing portfolio company
** The name of this portfolio company is not disclosed at this time due to confidentiality restrictions. The name of this portfolio company will be disclosed in the
Company's quarterly report for the quarter ending June 30, 2026.

The Company realized investments in the following portfolio companies subsequent to March 31, 2026:



              Activity Type          Date              Company Name                         Company Description            Proceeds Received                Realized Loss             
         Instrument Type


 Full Repayment             April 17,     Sales Benchmark Index,
                               2026         LLC                                 Provider of revenue growth      $
    11,968,656        
     $                     Senior Secured - First Lien
                                                                     management consulting
                                                                     services
                                                                     for private equity-owned
                                                                     and large
                                                                    enterprise clients


                                                                                                                  $
    443,820        
     $            
        Revolver Commitment


 Full Realization                                                                                                 $
    486,925                 (178,805) 
        Equity


 Full Repayment             April 24,     Equine Network, LLC                  Provider of equine
                               2026                                              competitions,                   $
    9,043,164        
     $                     Senior Secured - First Lien
                                                                     content, products, and
                                                                     services


                                                                                                                   $
    97,900        
     $                     Delayed Draw Term Loan
                                                                                                                                                                   Commitment


                                                                                                                  $
    166,667        
     $            
        Revolver Commitment


 Full Repayment             April 30,
                               2026        Cerebro Buyer, LLC                   Manufacturer of single-use       $
    4,526,683        
     $                     Senior Secured - First Lien
                                                                     electrodes for medical
                                                                     procedures


                                                                                                                  $
    376,902        
     $                     Delayed Draw Term Loan
                                                                                                                                                                   Commitment

Credit Facility

The outstanding balance under the Credit Facility as of May 11, 2026 was $238.4 million.

Distributions Declared

On April 14, 2026, the Board of Directors of the Company declared a regular monthly dividend for each of April 2026, May 2026, and June 2026 as follows:



                        Ex-
                      Dividend    Record   Payment           Amount per


            Declared    Date       Date      Date            Share



 4/14/2026          4/30/2026 4/30/2026 5/15/2026 $
 0.1133



 4/14/2026          5/29/2026 5/29/2026 6/15/2026 $
 0.1133



 4/14/2026          6/30/2026 6/30/2026 7/15/2026 $
 0.1133

Conference Call Information

Stellus Capital Investment Corporation will host a conference call to discuss these results on Tuesday, May 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 108816. Starting approximately two hours after the conclusion of the call, a replay will be available through Wednesday, May 20, 2026 by dialing (877) 481-4010 and entering passcode 54017. 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




                                                                                                                                                                                               (unaudited)


                                                                                                                                                                                               March 31, 2026                         December 31, 2025



          
            ASSETS



          Controlled investments, at fair value (amortized cost of $34,432,893 and $33,603,521,                                                                                 $
        12,237,127            $
        14,953,132
respectively)



          Non-controlled, affiliated investments, at fair value (amortized cost of $4,878,960 and                                                                                          3,378,350                       3,750,674
                                                                                                                                                    $4,806,660, respectively)



          Non-controlled, non-affiliated investments, at fair value (amortized cost of                                                                                                   974,379,087                     988,919,589
                                                                                                                                 $976,006,465 and $987,729,505, respectively)



          Cash and cash equivalents                                                                                                                                                        3,376,525                      25,050,156



          Receivable for sales and repayments of investments                                                                                                                                 492,000                         581,509



          Interest receivable                                                                                                                                                              6,611,848                       6,375,996



          Income tax receivable                                                                                                                                                                                           1,385,387



          Other receivables                                                                                                                                                                  149,189                          85,000



          Related party receivable                                                                                                                                                                                               20



          Deferred offering costs                                                                                                                                                             75,000



          Prepaid expenses                                                                                                                                                                   574,127                         150,843



          
            Total Assets                                                                                                                                          $
        1,001,273,253         $
        1,041,252,306



          
            LIABILITIES



          Notes Payable                                                                                                                                                        $
        122,758,915           $
        122,671,409



          Credit Facility payable                                                                                                                                                        238,276,659                     233,167,360



          SBA-guaranteed debentures                                                                                                                                                      257,151,049                     295,984,063



          Dividends payable                                                                                                                                                                3,279,724                       3,858,669



          Management fees payable                                                                                                                                                          4,392,357                       4,442,705



          Income incentive fees payable                                                                                                                                                    2,413,077                       2,317,429



          Interest payable                                                                                                                                                                 5,729,215                       6,138,076



          Related party payable                                                                                                                                                            2,335,513



          Unearned revenue                                                                                                                                                                   539,630                         582,007



          Administrative services payable                                                                                                                                                    579,529                         539,338



          Income tax payable                                                                                                                                                                  93,492



          Other accrued expenses and liabilities                                                                                                                                             728,572                         372,294



          
            Total Liabilities                                                                                                                                       $
        638,277,732           $
        670,073,350



          
            Commitments and contingencies (Note 7)



          
            Net Assets                                                                                                                                              $
        362,995,521           $
        371,178,956



          
            NET ASSETS



          Common stock, par value $0.001 per share (100,000,000 shares authorized; 28,947,254                                                                                      $
         28,947               $
         28,947
and 28,947,254 shares issued and outstanding, respectively)



          Paid-in capital                                                                                                                                                                397,829,793                     397,829,793



          Total distributable loss                                                                                                                                                      (34,863,219)                   (26,679,784)



          
            Net Assets                                                                                                                                              $
        362,995,521           $
        371,178,956



          
            Total Liabilities and Net Assets                                                                                                                      $
        1,001,273,253         $
        1,041,252,306



          
            Net Asset Value Per Share                                                                                                                                    $
         12.54                $
         12.82

                                                                                  
          
            STELLUS CAPITAL INVESTMENT CORPORATION

                                                                            
          
            CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)




                                                                                                                                                                                For the three months ended


                                                                                                                                                                         March 31,                                March 31,
                                                                                                                                                                          2026                                    2025



 
            INVESTMENT INCOME



 From non-controlled, affiliated investments



 Interest income                                                                                                                                             $
          45        
          $



 Payment-in-kind interest income                                                                                                                                     72,300



 From non-controlled, non-affiliated investments



 Interest income                                                                                                                                                 20,578,575                                   20,817,005



 Payment-in-kind interest income                                                                                                                                  1,602,087                                    3,310,111



 Other income                                                                                                                                                     1,039,927                                      824,542



 
            Total Investment Income                                                                                                                $
          23,292,934                        $
         24,951,658



 
            OPERATING EXPENSES



 Management fees                                                                                                                                      $
          4,392,357                         $
         4,054,726



 Valuation fees                                                                                                                                                     166,119                                      157,889



 Administrative services expenses                                                                                                                                   649,120                                      449,298



 Income incentive fees                                                                                                                                              106,709                                    2,136,491



 Professional fees                                                                                                                                                  817,727                                      418,031



 Directors' fees                                                                                                                                                    129,250                                      111,250



 Insurance expense                                                                                                                                                   93,056                                       97,090



 Interest expense and other fees                                                                                                                                  8,851,541                                    8,263,019



 Income tax expense                                                                                                                                                 360,471                                      499,547



 Other general and administrative expenses                                                                                                                          239,617                                      218,351



 
            Total Operating Expenses                                                                                                               $
          15,805,967                        $
         16,405,692



 Income incentive fee waiver                                                                                                                                       (11,061)                                 (1,242,843)



 
            Total Operating Expenses, net of fee waivers                                                                                           $
          15,794,906                        $
         15,162,849



 
            Net Investment Income                                                                                                                   $
          7,498,028                         $
         9,788,809



 Net realized gain (loss) on non-controlled, non-affiliated investments                                                                                 $
          750,410                       $
         (5,967,221)



 Net realized gain (loss) on foreign currency translations                                                                                                            3,664                                     (29,655)



 Net change in unrealized (depreciation) appreciation on controlled investments                                                                                 (3,545,377)                                      55,276



 Net change in unrealized depreciation on non-controlled, affiliated investments                                                                                  (444,624)



 Net change in unrealized (depreciation) appreciation on non-controlled, non-affiliated investments                                                             (2,558,345)                                   1,138,017



 Net change in unrealized (depreciation) appreciation on foreign currency translations                                                                             (48,020)                                       8,319



 
            Net Increase in Net Assets Resulting from Operations                                                                                    $
          1,655,736                         $
         4,993,545



 
            Net Investment Income Per Share-basic and diluted                                                                                            $
          0.26                              $
         0.35



 
            Net Increase in Net Assets Resulting from Operations Per Share - basic and diluted                                                           $
          0.06                              $
         0.18



 
            Weighted Average Shares of Common Stock Outstanding-basic and diluted                                                                              28,947,254                                   27,602,612



 
            Distributions Per Share-basic and diluted                                                                                                    $
          0.34                              $
         0.40

                                                                           
 
            STELLUS CAPITAL INVESTMENT CORPORATION

                                                                         
 
   CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (unaudited)




                                                                                                                                                Common Stock                                         Total


                                                                                                                                        Number                      Par               Paid-in                     distributable


                                                                                                                                      of shares                     value               capital                     (loss)                        Net Assets



 
            Balances at December 31, 2024                                                                                         27,481,118            $
 27,481      $
 379,549,272         $
     (9,654,813)            $
     369,921,940



 Net investment income                                                                                                                                                                                9,788,809                      9,788,809



 Net 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                      1,193,293



 Net change in unrealized depreciation on foreign currency translations                                                                                                                                   8,319                          8,319



 Distributions 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                                                8,938,086



 
            Balances at March 31, 2025                                                                                            28,137,203            $
 28,137      $
 388,486,702        $
     (15,748,657)            $
     372,766,182





 
            Balances at December 31, 2025                                                                                         28,947,254            $
 28,947      $
 397,829,793        $
     (26,679,784)            $
     371,178,956



 Net investment income                                                                                                                                                                                7,498,028                      7,498,028



 Net realized gain on investments                                                                                                                                                                       750,410                        750,410



 Net realized gain on foreign currency translation                                                                                                                                                        3,664                          3,664



 Net change in unrealized depreciation on investments                                                                                                                                               (6,548,346)                   (6,548,346)



 Net change in unrealized depreciation on foreign currency translations                                                                                                                                (48,020)                      (48,020)



 Distributions from net investment income                                                                                                                                                           (9,839,171)                   (9,839,171)



 
            Balances at March 31, 2026                                                                                            28,947,254            $
 28,947      $
 397,829,793        $
     (34,863,219)            $
     362,995,521

                                                                                          
          
            STELLUS CAPITAL INVESTMENT CORPORATION

                                                                              
          
            CONSOLIDATED STATEMENTS OF CASH FLOWS
             (unaudited)


                                                                                                                                                                                        For the three months ended


                                                                                                                                                                               March 31, 2026                            March 31, 2025



 
            Cash Flows from Operating Activities



 Net increase in net assets resulting from operations                                                                                                                      $
       1,655,736                $
       4,993,545



 Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities:



 Purchases of investments                                                                                                                                                        (27,664,251)                     (55,415,263)



 Proceeds from sales and repayments of investments                                                                                                                                 41,713,484                        14,986,423



 Net change in unrealized depreciation (appreciation) on investments                                                                                                                6,548,346                       (1,193,293)



 Net change in unrealized depreciation (appreciation) on foreign currency translations                                                                                                 48,020                           (8,319)



 Increase in investments due to payment-in-kind income                                                                                                                            (1,674,387)                        (976,479)



 Amortization of premium and accretion of discount, net                                                                                                                             (713,561)                        (715,755)



 Amortization of loan structure fees                                                                                                                                                  254,298                           315,618



 Amortization of deferred financing costs                                                                                                                                             134,684                           110,150



 Amortization of discount on Notes Payable                                                                                                                                             33,248



 Amortization of premium on Notes Payable                                                                                                                                            (30,426)



 Amortization of loan fees on SBA-guaranteed debentures                                                                                                                               166,986                           188,984



 Net realized (gain) loss on investments                                                                                                                                            (750,410)                        5,967,221



 Changes in other assets and liabilities



 Increase in interest receivable                                                                                                                                                    (235,852)                      (1,281,507)



 Decrease (increase) in income tax receivable                                                                                                                                       1,385,387                       (1,081,760)



 Increase in other receivables                                                                                                                                                       (64,189)                         (20,755)



 Decrease in related party receivables                                                                                                                                                     20                             3,687



 (Increase) decrease in prepaid expenses                                                                                                                                            (423,284)                           90,313



 (Decrease) increase in management fees payable                                                                                                                                      (50,348)                           20,617



 Increase (decrease) in income incentive fees payable                                                                                                                                  95,648                       (1,458,054)



 Increase (decrease) in administrative services payable                                                                                                                                40,191                          (12,990)



 Decrease in interest payable                                                                                                                                                       (408,861)                      (3,788,915)



 Increase in related party payable                                                                                                                                                  2,335,513                         1,290,893



 (Decrease) increase in unearned revenue                                                                                                                                             (42,377)                           72,177



 Increase in income tax payable                                                                                                                                                        93,492



 Increase in other accrued expenses and liabilities                                                                                                                                   356,278                           989,436



 
            Net Cash Provided by (Used in) Operating Activities                                                                                                         $
       22,803,385             $
       (36,924,026)



 
            Cash Flows from Financing Activities



 Proceeds from the issuance of common stock                                                                                                                         
 $                                     $
       9,256,982



 Sales load for common stock issued                                                                                                                                                                                  (138,908)



 Offering costs paid for common stock issued                                                                                                                                         (75,000)                        (179,988)



 Stockholder distributions paid                                                                                                                                                  (10,418,116)                     (10,999,933)



 Financing costs paid on Notes Payable                                                                                                                                               (50,000)



 Repayments of SBA-guaranteed debentures                                                                                                                                         (39,000,000)                     (16,250,000)



 Borrowings under Credit Facility                                                                                                                                                  58,100,000                        67,700,000



 Repayments of Credit Facility                                                                                                                                                   (53,033,900)                     (21,633,900)



 
            Net Cash (Used in) Provided by Financing Activities                                                                                                       $
       (44,477,016)              $
       27,754,253



 
            Net Decrease in Cash and Cash Equivalents                                                                                                                 $
       (21,673,631)             $
       (9,169,773)



 
            Cash and Cash Equivalents Balance at Beginning of Period                                                                                                    $
       25,050,156               $
       20,058,594



 
            Cash and Cash Equivalents Balance at End of Period                                                                                                           $
       3,376,525               $
       10,888,821



 
            Supplemental and Non-Cash Activities



 Cash paid for interest expense                                                                                                                                            $
       8,701,862               $
       11,437,182



 Income and excise tax refund, net                                                                                                                                                (1,118,408)                        1,581,307



 Exchange of investments                                                                                                                                                            1,999,529                         1,663,301

  
   
            Reconciliation of Core Net Investment Income
 
 
         (1)

                                          
          (Unaudited)




                                                                                    Three Months Ended


                                                                     March 31, 2026                     March 31,
                                                                                                           2025



   Net investment income                                                $7,498,028                     $9,788,809



   Income tax expense                                                      360,471                        499,547



   Core net investment income                                           $7,858,499                    $10,288,356





   
            Per share amounts:



   Net investment income per share                                           $0.26                          $0.35



   Core net investment income per share                                      $0.27                          $0.37

  
        
            Reconciliation of Realized Net Investment Income
 
 
 (2)

                                                 
          (Unaudited)




                                                                                          Three Months Ended


                                                                                March 31,                     March 31,
                                                                                   2026                           2025



   Net investment income                                                      $7,498,028                     $9,788,809



   Net realized gain (loss) on investments                                       750,410                    (5,967,221)



   Net realized gain on foreign currency translation                               3,664                       (29,655)



   Total realized net investment income                                       $8,252,102                     $3,791,933





   
            Per share amounts:



   Net investment income per share                                                 $0.26                          $0.35



   Realized net investment income per share                                        $0.29                          $0.14

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SOURCE Stellus Capital Investment Corporation

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