Stellus Capital Investment Corporation Reports Results for its Fourth Fiscal Quarter and Year Ended December 31, 2024

, /PRNewswire/ -- Stellus Capital Investment Corporation (NYSE:SCM) ("Stellus", "we", or the "Company") today announced financial results for its fourth fiscal quarter and year ended December 31, 2024. Robert T. Ladd, Chief Executive Officer of Stellus, stated, "I am pleased to report solid operating results for the quarter ended December 31, 2024, in which we earned U.S. GAAP net investment income of $0.35 per share and core net investment income of $0.37 per share. During the quarter, we funded $109 million of investments and received $65 million of repayments, bringing the total portfolio to $953 million at fair value. I'm also pleased to report that our investors have received a total of $288 million in aggregate distributions, equivalent to $16.69 per share, since we began operations." FINANCIAL HIGHLIGHTS($ in millions, except data relating to per share amounts and shares outstanding) Three Months Ended Year Ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Amount Per Share Amount Per Share Amount Per Share Amount Per Share Net investment income $9.64 $0.35 $11.91 $0.49 $41.93 $1.64 $42.21 $1.92 Core net investment income(1) 10.15 0.37 12.16 0.50 43.74 1.71 42.97 1.95 Net realized gain (loss) on investments 5.95 0.22 (30.54) (1.26) (15.74) (0.62) (30.21) (1.38) Net realized loss on foreign currency translation (0.02) — (0.04) — (0.09) — (0.11) — Benefit for taxes on realized loss on investments in taxable subsidiaries — — 2.99 0.12 — — 2.99 0.14 Total realized income(2) $15.57 $0.57 ($15.68) ($0.65) $26.10 $1.02 $14.88 $0.68 Distributions (10.90) (0.40) (9.65) (0.40) (41.22) (1.61) (35.53) (1.61) Net unrealized change in (depreciation) appreciation on investments (6.86) (0.25) 27.13 1.13 19.57 0.76 2.79 0.13 Net unrealized change in (depreciation) appreciation on foreign currency translation (0.02) — 0.01 — (0.02) — (0.01) — Benefit (provision) for taxes on unrealized depreciation (appreciation) on investments in taxable subsidiaries — — 0.02 — 0.19 0.01 (0.13) (0.01) Net increase in net assets resulting from operations $8.69 $0.32 $11.48 $0.48 $45.84 $1.79 $17.53 $0.80 Weighted average shares outstanding 27,174,972 24,125,642 25,596,593 22,004,648 (1) Core net investment income, as presented, excludes the impact of capital gains incentive fees (reversal) and income taxes, the majority of which are excise taxes. The Company believes presenting core net investment income and the related per share amount is a useful supplemental disclosure for analyzing its financial performance. However, core net investment income is a non-U.S. generally accepted accounting principles ("U.S. GAAP") measure and should not be considered as a replacement for net investment income and other earnings measures presented in accordance with U.S. GAAP. A reconciliation of net investment income in accordance with U.S. GAAP to core net investment income is presented in the table below the financial statements. (2) Total realized income is the sum of net investment income, net realized gains (losses) on investments, net realized gains (losses) on foreign currency, and loss on debt extinguishment; all U.S. GAAP measures. PORTFOLIO ACTIVITY($ in millions, except data relating to per share amounts, shares outstanding, and number of portfolio companies) As of As of December 31, 2024 December 31, 2023 Investments at fair value $953.5 $874.5 Total assets $980.9 $908.1 Net assets $369.9 $319.9 Shares outstanding 27,481,118 24,125,642 Net asset value per share $13.46 $13.26 Three Months Ended Year Ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 New investments $108.5 $44.2 $221.2 $183.9 Repayments of investments (64.5) (55.2) (151.8) (134.2) Net activity $44.0 ($11.0) $69.4 $49.7 As of As of December 31, 2024 December 31, 2023 Number of portfolio company investments 105 93 Number of debt investments 92 81 Weighted average yield of debt and other income producing investments(3) Cash 9.5 % 11.0 % Payment-in-kind ("PIK") 0.4 % 0.5 % Fee amortization 0.4 % 0.4 % Total 10.3 % 11.9 % Weighted average yield on total investments(4) Cash 8.9 % 10.3 % PIK 0.4 % 0.5 % Fee amortization 0.4 % 0.3 % Total 9.7 % 11.1 % (3) The dollar-weighted average annualized effective yield is computed using the effective interest rate for the Company's debt investments and other income producing investments, including cash and PIK interest, as well as the accretion of deferred fees. The individual investment yields are then weighted by the respective cost of the investments (as of the date presented) in calculating the weighted average effective yield of the portfolio. The dollar-weighted average annualized yield on the Company's investments for a given period will generally be higher than what investors in the Company's common stock would realize in a return over the same period because the dollar-weighted average annualized yield does not reflect the Company's expenses or any sales load that may be paid by investors. (4) The dollar-weighted average yield on total investments takes the same yields as calculated in the footnote above but weights them to determine the weighted average effective yield as a percentage of the Company's total investments, including non-income producing equity positions and debt investments on non-accrual status. Results of Operations Investment income for the three months ended December 31, 2024 and 2023 totaled $25.6 million and $28.0 million, respectively, most of which was interest income from portfolio investments. Gross operating expenses for the three months ended December 31, 2024 and 2023 totaled $16.0 million and $16.4 million, respectively. For the same respective periods, base management fees totaled $4.0 million and $3.9 million, income incentive fees totaled $2.4 million and $2.7 million, respectively; fees and expenses related to the Company's borrowings totaled $7.7 million and $8.0 million (including interest and amortization of deferred financing costs), respectively; administrative expenses totaled $0.5 million for both periods, income tax totaled $0.5 million and $0.3 million, respectively; and other expenses totaled $0.9 million and $1.0 million, respectively. The Company waived $0.3 million in income incentive fees due to the total return limitation for the three months ended December 31, 2023 and none for the three months ended December 31, 2024. Net investment income was $9.6 million and $11.9 million, or $0.35 and $0.49 per common share based on weighted average common shares outstanding of 27,174,972 and 24,125,642 for the three months ended December 31, 2024 and 2023, respectively. Core net investment income, which is a non-U.S. GAAP measure that excludes the capital gains incentive fee (reversal) and income tax expense accruals, for the three months ended December 31, 2024 and 2023 was $10.1 million and $12.2 million, or $0.37 and $0.50 per share, respectively. For the three months ended December 31, 2024 and 2023, the Company's investment portfolio had a net change in unrealized (depreciation) appreciation of ($6.9) million and $27.1 million, respectively, and the Company had net realized gains (losses) of $6.0 million and ($30.5) million, respectively. Net increase in net assets resulting from operations totaled $8.7 million and $11.5 million, or $0.32 and $0.48 per common share, based on weighted average common shares outstanding of 27,174,972 and 24,125,642 for the three months ended December 31, 2024 and 2023, respectively. Liquidity and Capital Resources As of December 31, 2024, 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 $315.0 million on a committed basis. As of December 31, 2024 and December 31, 2023, the Credit Facility had an accordion feature which allowed for potential future expansion of the facility size up to $350.0 million. As of December 31, 2024 and December 31, 2023, the Company had $175.4 million and $160.1 million in outstanding borrowings under the Credit Facility, respectively. The Company issued 441,754 shares during the three months ended December 31, 2024 under the At-the-Market Program ("ATM Program") for gross proceeds of $6.1 million. The average per share offering price of shares issued under the ATM Program during the three months ended December 31, 2024 was $13.86. Distributions During the three months ended December 31, 2024 and 2023, the Company declared aggregate distributions of $0.40 per share for both periods ($10.9 million and $9.6 million in the aggregate, respectively). Tax characteristics of all distributions are reported to stockholders on Form 1099-DIV. Approximately $0.5 million of the dividends declared in 2024 are expected to be characterized as long-term capital gains. None of these dividends are expected to include a return of capital. Recent Portfolio Activity The Company invested in the following portfolio companies during the three months ended December 31, 2024: Activity Type Date Company Name Company Description Investment Amount Instrument Type Add-On Investment October 9, 2024 Ledge Lounger, Inc.* Provider of premium in-pool and backyard furniture $ 34,504 Equity Add-On Investment October 18, 2024 Compost 360 Investments, LLC* Organic waste recycler and producer of compost, mulch, and engineered soils $ 49,280 Equity New Investment October 31, 2024 Norplex Micarta Acquisition, Inc. Manufacturer of thermoset composite laminates $ 13,000,000 Senior Secured – First Lien $ 500,000 Revolver Commitment $ 739,804 Equity Add-On Investment November 7, 2024 Green Intermediateco II, Inc.* Cyber-security focused value-added reseller and associated service provider $ 1,300,000 Senior Secured – First Lien Add-On Investment November 12, 2024 Curion Holdings, LLC* Provider of product testing and consumer insights $ 21,710 Revolver Commitment Add-On Investment November 12, 2024 Cerebro Buyer, LLC* Manufacturer of single-use electrodes for medical procedures $ 1,130,707 Delayed Draw Term Loan Commitment Add-On Investment November 12, 2024 Service Minds Company, LLC* Provider of residential electrical services $ 45,000 Revolver Commitment New Investment November 14, 2025 Spectra Confectionary Ltd. Manufacturer and wholesaler of confectionary products $ 5,317,225 Senior Secured – First Lien $ 297,765 Equity New Investment November 15, 2024 MBH Management, LLC Outsourced provider of physician-focused staffing solutions for post-acute facilities $ 9,476,743 Senior Secured – First Lien $ 500,000 Delayed Draw Term Loan Commitment $ 500,000 Revolver Commitment $ 646,944 Equity Add-On Investment November 20, 2024 Microbe Formulas LLC* Provider of dietary supplements and other natural solutions for detox and gut health $ 4,265,082 Senior Secured – First Lien Add-On Investment November 26, 2024 Equine Network, LLC* Provider of content, information, tech-enabled services, and hosts competitions for the U.S. equine industry $ 1,146,399 Senior Secured – First Lien $ 66,667 Revolver Commitment Add-On Investment December 2, 2024 2X LLC* Provider of outsourced digital business-to-business marketing-as-a-service $ 3,861,355 Senior Secured – First Lien Add-On Investment December 3, 2024 Camp Profiles LLC* Provider of digital marketing services to small and medium-sized businesses $ 2,250,000 Senior Secured – First Lien New Investment December 4, 2024 AMII Acquisition, LLC Franchisor of ballroom dance studios $ 8,819,468 Senior Secured – First Lien $ 500,000 Revolver Commitment $ 142,460 Equity Add-On Investment December 6, 2024 Advanced Barrier Extrusions, LLC* Manufacturer of high barrier forming $ 604,622 Revolver Commitment New Investment December 9, 2024 United States Drug Testing Laboratories, LLC Provider of drug and alcohol forensic toxicology testing $ 6,000,000 Senior Secured – First Lien $ 500,000 Delayed Draw Term Loan Commitment $ 100,000 Revolver Commitment $ 110,000 Equity New Investment December 17, 2024 iNovex Information Systems Inc. Provider of government IT services $ 7,522,184 Senior Secured – First Lien $ 100,000 Revolver Commitment New Investment December 19, 2024 Eskola, LLC Provider of commercial re-roofing services $ 7,558,348 Senior Secured – First Lien $ 6,717,083 Revolver Commitment $ 893,991 Equity Add-On Investment December 20, 2024 CEATI International, Inc.* Provider of intellectual content, technical trade programs, research groups, and conferences for utility companies $ 3,200,000 Senior Secured – First Lien New Investment December 20, 2024 CombinedCaterers, Inc. Provider of premium catering services in the Southeast $ 6,796,831 Senior Secured – First Lien $ 2,216,358 Delayed Draw Term Loan Commitment $ 100,000 Revolver Commitment $ 465,637 Equity Add-On Investment December 27, 2024 Naumann/Hobbs Material Handling Corporation II, Inc.* Material handling equipment dealer and aftermarket parts and services provider $ 142,200 Equity New Investment December 30, 2024 Tiger 21, LLC Facilitator of peer-to-peer wealth focused insights and events for ultra-high net worth individuals $ 12,000,000 Senior Secured – First Lien $ 100,000 Revolver Commitment $ 564,635 Equity *Existing portfolio company The Company realized investments in the following portfolio companies during the three months ended December 31, 2024: Activity Type Date Company Name Company Description Proceeds Received Realized Gain Instrument Type Full Repayment November 4, 2024 Baker Manufacturing Company, LLC* Manufacturer of water well equipment, specialized filtration pumps, and custom castings $ 12,738,093 $ — Senior Secured – First Lien Full Realization November 5, 2024 Health Monitor Holdings, LLC* Provider of point-of-care patient engagement and marketing solutions for pharmaceutical companies $ 1,704,298 $ 651,379 Equity Full Repayment November 21, 2024 Intuitive Health, LLC* Operator of freestanding urgent care/emergency room combination facilities $ 16,647,430 $ — Senior Secured – First Lien $ 514,101 $ 514,101 Equity Full Repayment December 2, 2024 Integrated Oncology Network, LLC* Provider of radiation oncology center management services $ 17,518,143 $ — Senior Secured – First Lien *Existing portfolio company Events Subsequent to December 31, 2024 The Company's management has evaluated subsequent events through March 4, 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 December 31, 2024: Activity Type Date Company Name Company Description Investment Amount Instrument Type New Investment January 10, 2025 Pacific Shoring Products, LLC Manufacturer of trench shoring and safety equipment sold to equipment rental companies $ 8,500,000 Senior Secured – First Lien $ 100,000 Revolver Commitment $ 498,491 Equity New Investment January 15, 2025 Environmental Remedies, LLC Residential asbestos abatement provider $ 7,330,762 Senior Secured – First Lien $ 2,681,986 Delayed Draw Term Loan Commitment $ 100,000 Revolver Commitment $ 163,109 Equity New Investment January 16, 2025 Plus Delta Partners, Inc. Provider of fundraising training and tools for higher education institutions and other nonprofits $ 7,400,000 Senior Secured – First Lien $ 3,753,955 Delayed Draw Term Loan Commitment $ 100,000 Revolver Commitment $ 325,764 Equity New Investment January 24, 2025 Strategus, LLC Provider of connected TV advertising services $ 7,801,439 Senior Secured – First Lien $ 2,524,737 Delayed Draw Term Loan Commitment $ 100,000 Revolver Commitment $ 170,362 Equity Add-On Investment February 10, 2025 Florachem Corporation* Distiller and supplier of natural citrus, pine, and specialty inputs $ 877,716 Senior Secured – First Lien New Investment February 28, 2025 Identity Theft Guard Solutions, Inc. Cyber breach response and monitoring services $ 8,722,887 Senior Secured – First Lien $ 100,000 Revolver Commitment $ 352,915 Equity New Investment February 28, 2025 MoboTrex, LLC Distributor and manufacturer of intelligent traffic solution equipment $ 5,137,070 Senior Secured – First Lien $ 109,312 Delayed Draw Term Loan Commitment $ 100,000 Revolver Commitment *Existing portfolio company Credit Facility The outstanding balance under the Credit Facility as of March 4, 2025 was $230.8 million. SBA-guaranteed debentures On February 14, 2025, Stellus Capital SBIC LP prepaid all principal and accrued interest related to SBA-guaranteed debentures maturing on March 1, 2025. The outstanding balance of SBA-guaranteed debentures as of March 4, 2025 was $308.8 million. Distributions Declared On January 9, 2025, the Company's Board of Directors declared a regular monthly distribution for each of January, February and March 2025, as follows: Ex-Dividend Record Payment Amount per Declared Date Date Date Share 1/9/2025 1/31/2025 1/31/2025 2/14/2025 $ 0.1333 1/9/2025 2/28/2025 2/28/2025 3/14/2025 $ 0.1333 1/9/2025 3/31/2025 3/31/2025 4/15/2025 $ 0.1333 Conference Call Information Stellus Capital Investment Corporation will host a conference call to discuss these results on Wednesday, March 5, 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 643131. Starting approximately two hours after the conclusion of the call, a replay will be available through Wednesday, March 19, 2025 by dialing (877) 481-4010 and entering passcode 52042. 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 the Company's website at www.stelluscapital.com, under the Events tab. A replay of the conference will be available on the Company's 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, as amended. 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 middle-market companies (typically those with $5.0 million to $50.0 million of EBITDA (earnings before interest, taxes, depreciation and amortization)) through first lien (including unitranche) loans, second lien loans and unsecured debt financing, with corresponding equity co-investments. 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 CorporationW. Todd Huskinson, Chief Financial Officer(713) 292-5414[email protected] STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES December 31, 2024 December 31, 2023 ASSETS Controlled investments at fair value (amortized cost of $17,934,808 and $17,285,138, respectively) $ 7,652,436 $ 6,175,994 Non-controlled, non-affiliated investments, at fair value (amortized cost of $943,853,898 and $884,858,412, respectively) 945,845,252 868,284,689 Cash and cash equivalents 20,058,594 26,125,741 Receivable for sales and repayments of investments 335,689 371,877 Interest receivable 4,947,765 4,882,338 Income tax receivable 1,301,965 1,588,708 Other receivables 87,995 42,995 Related party receivable 3,687 — Deferred offering costs — 7,312 Prepaid expenses 666,866 606,674 Total Assets $ 980,900,249 $ 908,086,328 LIABILITIES Notes Payable $ 99,444,355 $ 98,996,412 Credit Facility payable 172,314,315 156,564,776 SBA-guaranteed debentures 321,251,939 320,273,358 Dividends payable 3,663,233 — Management fees payable 4,034,109 2,918,536 Income incentive fees payable 3,109,560 2,885,180 Interest payable 5,281,343 5,241,164 Unearned revenue 548,626 397,725 Administrative services payable 393,513 402,151 Deferred tax liability — 188,893 Other accrued expenses and liabilities 937,316 278,345 Total Liabilities $ 610,978,309 $ 588,146,540 Commitments and contingencies (Note 7) Net Assets $ 369,921,940 $ 319,939,788 NET ASSETS Common stock, par value $0.001 per share (100,000,000 shares authorized; 27,481,118 and 24,125,642 issued and outstanding, respectively) $ 27,481 $ 24,125 Paid-in capital 379,549,272 335,918,984 Total distributable loss (9,654,813) (16,003,321) Net Assets $ 369,921,940 $ 319,939,788 Total Liabilities and Net Assets $ 980,900,249 $ 908,086,328 Net Asset Value Per Share $ 13.46 $ 13.26 STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS For the years ended December 31, 2024 December 31, 2023 December 31, 2022 INVESTMENT INCOME From controlled investments: Interest income $ 81,636 $ 37,897 $ — From non-controlled, non-affiliated investments Interest income 99,804,184 101,978,891 72,964,999 Other income 4,850,313 3,830,780 2,147,577 Total Investment Income $ 104,736,133 $ 105,847,568 $ 75,112,576 OPERATING EXPENSES Management fees $ 15,698,129 $ 15,452,347 $ 14,848,174 Valuation fees 380,239 373,628 351,752 Administrative services expenses 1,916,283 1,908,191 1,810,576 Income incentive fees 10,045,966 10,189,888 3,782,151 Capital gains incentive fee reversal — (569,528) (2,818,623) Professional fees 1,190,232 1,455,372 1,103,693 Directors' fees 412,000 406,000 329,000 Insurance expense 499,913 492,596 503,907 Interest expense and other fees 31,506,068 32,011,317 24,469,285 Income tax expense 1,808,838 1,333,452 1,161,668 Other general and administrative expenses 1,175,765 891,170 984,309 Total Operating Expenses $ 64,633,433 $ 63,944,433 $ 46,525,892 Income incentive fee waiver (1,826,893) (307,442) — Total Operating Expenses, net of fee waivers $ 62,806,540 $ 63,636,991 $ 46,525,892 Net Investment Income $ 41,929,593 $ 42,210,577 $ 28,586,684 Net realized (loss) gain on non-controlled, non-affiliated investments $ (15,737,004) $ (30,211,467) $ 3,660,595 Net realized loss on foreign currency translations (94,730) (112,481) (6,091) Net change in unrealized appreciation (depreciation) on controlled investments 826,772 (430,577) — Net change in unrealized appreciation (depreciation) on non-controlled, non-affiliated investments 18,743,637 3,222,729 (17,542,230) Net change in unrealized (depreciation) appreciation on foreign currency translations (14,755) (6,504) 6,040 Benefit (provision) for taxes on net unrealized depreciation (appreciation) on investments 188,893 (126,957) (213,214) Benefit for taxes on net realized loss on investments 2,221 2,987,847 — Net Increase in Net Assets Resulting from Operations $ 45,844,627 17,533,167 14,491,784 Net Investment Income Per Share—basic and diluted $ 1.64 $ 1.92 $ 1.46 Net Increase in Net Assets Resulting from Operations Per Share – basic and diluted $ 1.79 $ 0.80 $ 0.74 Weighted Average Shares of Common Stock Outstanding—basic and diluted 25,596,593 22,004,648 19,552,931 Distributions Per Share—basic and diluted $ 1.61 $ 1.61 $ 1.30 STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS Common Stock Total Number Par Paid-in distributable of shares value capital (loss) earnings Net Assets Balances as of December 31, 2021 19,517,595 $ 19,518 $ 274,559,121 $ 10,532,594 $ 285,111,233 Net investment income — — — 28,586,684 28,586,684 Net realized gain on investments — — — 3,660,595 3,660,595 Net realized loss on foreign currency translation — — — (6,091) (6,091) Net change in unrealized depreciation on investments — — — (17,542,230) (17,542,230) Net change in unrealized appreciation on foreign currency translations — — — 6,040 6,040 Provision for taxes on unrealized appreciation on investments — — — (213,214) (213,214) Return of capital and other tax related adjustments — — (1,040,884) 1,040,884 — Distributions from net investment income — — — (21,633,343) (21,633,343) Distributions from net realized capital gains — — — (3,789,693) (3,789,693) Issuance of common stock, net of offering costs(1) 149,174 149 1,596,483 — 1,596,632 Balances at December 31, 2022 19,666,769 $ 19,667 $ 275,114,720 $ 642,226 $ 275,776,613 Net investment income — — — 42,210,577 42,210,577 Net realized loss on investments — — — (30,211,467) (30,211,467) Net realized loss on foreign currency translation — — — (112,481) (112,481) Net change in unrealized appreciation on investments — — — 2,792,152 2,792,152 Net change in unrealized depreciation on foreign currency translations — — — (6,504) (6,504) Provision for taxes on unrealized appreciation on investments — — — (126,957) (126,957) Benefit for taxes on realized loss on investments — — — 2,987,847 2,987,847 Return of capital and other tax related adjustments — — (1,348,766) 1,348,766 — Distributions from net investment income — — — (35,080,734) (35,080,734) Distributions from net realized capital gains — — — (446,746) (446,746) Issuance of common stock, net of offering costs(1) 4,458,873 4,458 62,153,030 — 62,157,488 Balances at December 31, 2023 24,125,642 $ 24,125 $ 335,918,984 $ (16,003,321) $ 319,939,788 Net investment income — — — 41,929,593 41,929,593 Net realized loss on investments — — — (15,737,004) (15,737,004) Net realized loss on foreign currency translation — — — (94,730) (94,730) Net change in unrealized appreciation on investments — — — 19,570,409 19,570,409 Net change in unrealized depreciation on foreign currency translations — — — (14,755) (14,755) Provision for taxes on unrealized appreciation on investments — — — 188,893 188,893 Benefit for taxes on realized loss on investments — — — 2,221 2,221 Return of capital and other tax related adjustments — — (1,727,556) 1,727,556 — Distributions from net investment income — — — (40,679,308) (40,679,308) Distributions from net realized capital gains — — — (544,367) (544,367) Issuance of common stock, net of offering costs(1) 3,355,476 3,356 45,357,844 — 45,361,200 Balances at December 31, 2024 27,481,118 $ 27,481 $ 379,549,272 $ (9,654,813) $ 369,921,940 _________________ (1) See Note 4 to the Consolidated Financial Statements on Form 10-K filed with the Securities and Exchange Commission on March 4, 2025 for more information on offering costs. STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 2024 December 31, 2023 December 31, 2022 Cash flows from operating activities Net increase in net assets resulting from operations $ 45,844,627 $ 17,533,167 $ 14,491,784 Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities: Purchases of investments (221,154,933) (183,858,762) (211,010,869) Proceeds from sales and repayments of investments 151,834,875 134,223,224 127,548,194 Net change in unrealized (appreciation) depreciation on investments (19,570,409) (2,792,152) 17,542,230 Net change in unrealized depreciation (appreciation) on foreign currency translations 14,755 6,360 (5,897) Increase in investments due to PIK (3,310,111) (3,799,843) (1,357,177) Amortization of premium and accretion of discount, net (2,715,802) (2,749,543) (2,519,462) Deferred tax (benefit) provision (188,893) 126,957 213,214 Amortization of loan structure fees 1,140,079 657,323 567,375 Amortization of deferred financing costs 447,943 446,720 446,719 Amortization of loan fees on SBA-guaranteed debentures 978,582 1,255,753 1,227,952 Net realized loss (gain) on investments 15,737,004 30,211,467 (3,660,595) Changes in other assets and liabilities Increase in interest receivable (65,427) (897,929) (1,039,810) Decrease (increase) in income tax receivable 286,743 (1,588,708) — (Increase) decrease in other receivables (45,000) (8,750) 20,507 Increase in related party receivables (3,687) — — (Increase) decrease in prepaid expenses (60,192) 60,593 (155,053) Increase (decrease) in management fees payable 1,115,573 (4,231,871) 3,696,182 Increase in income incentive fees payable 224,380 420,772 715,278 Decrease in capital gains incentive fees payable — (569,528) (2,818,623) (Decrease) increase in administrative services payable (8,638) 45,232 (29,449) Increase in interest payable 40,179 600,323 947,179 (Decrease) increase in related party payable — (1,060,321) 1,060,321 Increase (decrease) in unearned revenue 150,901 77,050 (209,051) Decrease in income tax payable — (1,175,373) (2,094,141) Increase (decrease) in other accrued expenses and liabilities 658,971 (197,248) 136,635 Net Cash Used in Operating Activities $ (28,648,480) $ (17,265,087) $ (56,286,557) Cash flows from Financing Activities Proceeds from the issuance of common stock $ 46,494,756 $ 63,348,436 $ 2,158,540 Sales load for common stock issued (698,166) (943,248) (31,066) Offering costs paid for common stock issued (428,078) (253,913) (517,054) Stockholder distributions paid (37,560,442) (35,527,480) (26,594,095) Proceeds from SBA-guaranteed debentures — 11,400,000 63,600,000 Financing costs paid on SBA-guaranteed debentures — (277,590) (1,548,660) Financing costs paid on Credit Facility (691,137) (2,663,106) (193,635) Borrowings under Credit Facility 187,900,000 108,400,000 149,888,800 Repayments of Credit Facility (172,435,600) (148,135,600) (126,607,800) Net Cash Provided (Used) by Financing Activities $ 22,581,333 $ (4,652,501) $ 60,155,030 Net Decrease in Cash and Cash Equivalents $ (6,067,147) $ (21,917,588) $ 3,868,473 Cash and Cash Equivalents Balance at Beginning of Period 26,125,741 48,043,329 44,174,856 Cash and Cash Equivalents Balance at End of Period $ 20,058,594 $ 26,125,741 $ 48,043,329 Supplemental and Non-Cash Activities Cash paid for interest expense $ 28,899,285 $ 29,051,198 $ 21,280,060 Income and excise tax paid 1,808,838 2,508,825 3,255,809 (Decrease) increase in distributions payable 3,663,233 — (1,171,059) (Decrease) increase in deferred offering costs (7,312) 6,212 (13,788) Exchange of investments 8,256,411 3,610,846 — Reconciliation of Core Net Investment Income (1) (Unaudited) Three Months Ended Year Ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Net investment income $9,641,326 $11,908,914 $41,929,593 $42,210,577 Capital gains incentive reversal — — — (569,528) Income tax expense 503,890 251,395 1,808,838 1,333,452 Core net investment income $10,145,216 $12,160,309 $43,738,431 $42,974,501 Per share amounts: Net investment income per share $0.35 $0.49 $1.64 $1.92 Core net investment income per share $0.37 $0.50 $1.71 $1.95 Reconciliation of Realized Net Investment Income (2) (Unaudited) Three Months Ended Year Ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Net investment income $9,641,326 $11,908,914 $41,929,593 $42,210,577 Net realized gain (loss) on investments 5,952,860 (30,536,249) (15,737,004) (30,211,467) Net realized loss on foreign currency translation (17,740) (39,699) (94,730) (112,481) Benefit for taxes on realized loss on investments — 2,987,847 2,221 2,987,847 Total Realized Net Investment Income (Loss) $15,576,446 ($15,679,187) $26,100,080 $14,874,476 Per share amounts: Net investment income per share $0.35 $0.49 $1.64 $1.92 Realized net investment income (loss) per share $0.56 ($0.65) $1.02 $0.68 SOURCE Stellus Capital Investment Corporation WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Stellus Capital Investment Corporation Reports Results for its Fourth Fiscal Quarter and Year Ended December 31, 2024

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