Earnings release
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Press Release View printer - friendly version << Back Stellus Capital Investment Corporation Reports Results for its Second Fiscal Quarter Ended June 30 , 2026 August 10 , 2026 at 4:53 PM EDT HOUSTON , Aug. 10 , 2026 / PRNewswire / -- Stellus Capital Investment Corporation ( NYSE : SCM ) ( " Stellus " , " we " , or the " Company " ) today announced financial results for its fiscal quarter ended June 30 , 2026 . STELLUS CAPITAL INVESTMENT CORPORATION Robert T. Ladd , Chief Executive Officer of Stellus , stated , " I am pleased to report solid operating results for the quarter ended June 30 , 2026 , in which we earned both U.S. GAAP net investment income and core net investment income of $ 0.26 per share and net realized income of $ 0.01 per share . During the quarter , we funded $ 18 million of investments and received $ 49 million of repayments , resulting in a total portfolio of $ 968 million at fair value . I'm also pleased to report that since we announced our Share Repurchase Program in March , we have repurchased 467,317 shares at an average price of $ 8.50 per share . " FINANCIAL HIGHLIGHTS ( $ in millions , except data relating to per share amounts and shares outstanding ) Three Months Ended Six Months Ended June 30 , 2026 Amount Per Share Net investment income $ 7.53 $ 0.26 $ 9.56 June 30 , 2025 Amount Per Share $ 0.34 $ 15.03 June 30 , 2026 Amount Per Share $ 0.52 June 30 , 2025 Amount $ 19.35 Per Share $ 0.69 Core net investment income ( 1 ) 7.56 0.26 9.99 0.35 15.42 0.53 20.28 0.72 Net realized loss on investments ( 7.24 ) ( 0.25 ) ( 0.86 ) ( 0.03 ) ( 6.49 ) ( 0.22 ) ( 6.83 ) ( 0.24 ) Net realized loss on foreign currency translation ( 0.02 ) ( 0.05 ) Total realized income ( 2 ) $ 0.29 $ 0.01 $ 8.68 $ 0.31 $ 8.54 $ 0.30 $ 12.47 $ 0.45 Distributions ( 9.80 ) ( 0.34 ) ( 11.36 ) ( 0.40 ) ( 19.64 ) ( 0.68 ) ( 22.45 ) ( 0.80 ) Net unrealized change in appreciation on investments 15.90 0.55 1.44 0.05 9.35 0.32 2.63 0.09 Net unrealized change in 0.02 0.03 ( 0.03 ) 0.04 appreciation ( depreciation ) on
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foreign currency translation Net increase in net assets resulting from operations $16.21 $0.56 $10.15 $0.36 $17.86 $0.62 $15.14 $0.54 Weighted average shares outstanding 28,869,028 28,412,849 28,907,925 28,009,969 (1) Core net investment income, as presented, excludes the impact of capital gains incentive fees (reversal) and income taxes, the majority of which are excise taxes. The Company believes presenting core net investment income and the related per share amount is a useful supplemental disclosure for analyzing its financial performance. However, core net investment income is a non-U.S. GAAP measure and should not be considered as a replacement for net investment income and other earnings measures presented in accordance with U.S. GAAP. A reconciliation of net investment income in accordance with U.S. GAAP to core net investment income is presented in the table below the financial statements. (2) Total realized income is the sum of net investment income, net realized gains (losses) on investments, net realized gains (losses) on foreign currency, and losses on debt extinguishment, all U.S. GAAP measures. PORTFOLIO ACTIVITY ($ in millions, except data relating to per share amounts, shares outstanding, and number of portfolio companies) As of As of June 30, 2026 December 31, 2025 Investments at fair value $968.2 $1,007.6 Total assets $982.1 $1,041.3 Net assets $367.0 $371.2 Shares outstanding 28,672,911 28,947,254 Net asset value per share $12.80 $12.82 Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 New investments $18.0 $22.8 $45.7 $78.2 Repayments of investments (49.2) (31.6) (90.9) (46.6) Net activity ($31.2) ($8.8) ($45.2) $31.6 As of As of June 30, 2026 December 31, 2025 Number of portfolio company investments 116 115 Number of debt investments 98 100 Weighted average yield of debt and other income producing investments Cash 7.9 % 8.5 % Payment-in-kind ("PIK") 0.8 % 0.5 % Fee amortization 0.3 % 0.3 % Total 9.0 % 9.3 % Weighted average yield of total investments (3) (4)
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Cash 7.4 % 7.9 % PIK 0.7 % 0.5 % Fee amortization 0.3 % 0.3 % Total 8.4 % 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 June 30, 2026 and 2025 totaled $22.3 million and $25.7 million, respectively, most of which was interest income from portfolio investments. Gross operating expenses for the three months ended June 30, 2026 and 2025 totaled $14.8 million and $17.1 million, respectively. For the same respective periods, base management fees totaled $4.4 million and $4.3 million, income incentive fees totaled $0.2 million and $2.2 million, fees and expenses related to our borrowings totaled $8.5 million and $8.7 million (including interest and amortization of deferred financing costs), administrative expenses totaled $0.6 million and $0.5 million, income tax totaled $0.0 million and $0.4 million and other expenses totaled $1.1 million and $1.0 million. The Company waived $0.0 million and $1.0 million of income incentive fees due to the total return limitation pursuant to the provisions of the Investment Advisory Agreement between the Company and the Advisor (as defined below) for the three months ended June 30, 2026 and 2025, respectively, for net operating expenses of $14.8 million and $16.1 million, respectively. Net investment income was $7.5 million and $9.6 million, or $0.26 and $0.34 per common share based on 28,869,028 and 28,412,849 weighted average common shares outstanding for the three months ended June 30, 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 June 30, 2026 and 2025 was $7.6 million and $10.0 million, or $0.26 and $0.35 per share, respectively. For the three months ended June 30, 2026 and 2025, the Company's investment portfolio had a net change in unrealized appreciation of $15.9 million and $1.4 million, respectively, and the Company had net realized losses of ($7.2) million and ($0.9) million, respectively. Net increase in net assets resulting from operations totaled $16.2 million and $10.1 million, or $0.56 and $0.36 per common share, based on 28,869,028 and 28,412,849 weighted average common shares outstanding for the three months ended June 30, 2026 and 2025, respectively. Liquidity and Capital Resources As of June 30, 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
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million on a committed basis. As of both June 30, 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 June 30, 2026 and December 31, 2025, the Company had $222.2 million and $236.6 million in outstanding borrowings under the Credit Facility, respectively. On March 3, 2026, the Company announced that its Board authorized a program for the purpose of repurchasing up to $20,0 million of its shares of common stock (the "Repurchase Program"). Under the Repurchase Program, the Company may, but is not obligated to, repurchase its outstanding common stock in the open market from time to time, provided that the Company complies with the requirements under its Code of Ethics and the guidelines specified in Rule 10b-18 of the Securities Exchange Act of 1934, as amended, including certain price, market volume and timing constraints. Unless amended or extended by the Board, the Repurchase Program will expire on the earlier of March 2, 2027 or when $20.0 million of the Company's outstanding shares of common stock have been repurchased. During the three months ended June 30, 2026, the Company repurchased 274,343 shares of its common stock under the Repurchase Program for an aggregate purchase price of $2,447,682, including commissions, at a weighted average net repurchase price of $8.92 per share. Distributions For the three months ended June 30, 2026 and 2025, the Company declared aggregate distributions of $0.34 per share and $0.40 per share, respectively ($9.8 million and $11.4 million in the aggregate, respectively). Tax characteristics of all distributions are reported to stockholders on Form 1099-DIV. 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 June 30, 2026: Activity Type Date Company Name Company Description Investment Amount Instrument Type Add-On Investment April 1, 2026 EH Real Estate Services, LLC* Offers residential property brokerage, title & settlement, and property and casualty insurance brokerage services to home buyers and sellers $ 190,093 Senior Secured – First Lien New Investment 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, 2026 Solomon AcquisitionCo, LLC An innovative process automation and digital systems integrator $ 4,196,557 Senior Secured – First Lien $ 100,000 Revolver Commitment $ 186,807 Equity
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New Investment April 27, 2026 OW RSG LLC Manufacturer of walk-in coolers, freezers, and refrigeration systems $ 4,000,000 Senior Secured – First Lien $ 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, 2026 Advanced Barrier Extrusions, LLC* Manufacturer of flexible packaging $ 330,250 Senior Secured – First Lien Add-On Investment June 1, 2026 Venbrook Buyer, LLC* An independent insurance services broker $ 736,152 Senior Secured – First Lien Add-On Investment June 26, 2026 Venbrook Buyer, LLC* An independent insurance services broker $ 352,052 Senior Secured – First Lien Add-On Investment June 29, 2026 Monarch Behavioral Therapy, LLC* Provider of center-based applied behavioral analysis therapy services $ 29,822 Convertible Promissory Note Add-On Investment June 30, 2026 Valor Buyco LLC* Provider of dispatched road services $ 120,000 Delayed Draw Term Loan Commitment *Existing portfolio company The Company realized investments in the following portfolio companies during the three months ended June 30, 2026: Activity Type Date Company Name Company Description Proceeds Received Realized Gain Instrument Type Full Repayment April 17, 2026 Sales Benchmark Index, LLC Provider of revenue growth management consulting services for private equity-owned and large enterprise clients $ 11,968,656 $ — Senior Secured – First Lien $ 443,820 $ — Revolver Commitment Full Realization $ 486,925 $ (178,805) Equity Full Repayment April 24, 2026 Equine Network, LLC Provider of equine competitions, content, products, and services $ 9,043,164 $ — Senior Secured – First Lien $ 97,900 $ — Delayed Draw Term Loan Commitment $ 166,667 $ — Revolver Commitment Full Repayment April 30, 2026 Cerebro Buyer, LLC Manufacturer of single-use electrodes for medical procedures $ 4,526,683 $ — Senior Secured – First Lien
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$ 376,902 $ — Delayed Draw Term Loan Commitment Full Repayment May 21, 2026 Premiere Digital Services, Inc. Provider of digital media services to the entertainment industry. $ 12,038,926 $ — Senior Secured – First Lien Full Repayment June 30, 2026 Tilley Company Distributor of specialty chemicals, oils, and lubricants into the food & beverage, lubricants, flavor and fragrances, personal care, and other chemicals end- markets $ 44,110 $ — Senior Secured – First Lien $ 13,043 $ — Revolver Commitment Events Subsequent to June 30, 2026 The Company's management has evaluated subsequent events through August 10, 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 June 30, 2026: Activity Type Date Company Name Company Description Investment Amount Instrument Type Add-On Investment July 2, 2026 Blade Landscape Investments, LLC* Regional provider of commercial landscaping services $ 5,250 Equity New Investment July 16, 2026 Emergent Software Microsoft-centric data, AI, and cloud IT services partner $ 3,197,377 Senior Secured – First Lien $ 2,664,481 Delayed Draw Term Loan Commitment $ 500,000 Revolver Commitment $ 306,732 Equity New Investment August 5, 2026 LJ Welding Automation Ltd. Manufacturer of material handling and welding automation systems $ 7,693,688 Senior Secured – First Lien $ 500,000 Revolver Commitment $ 303,470 Equity *Existing portfolio company
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The Company realized investments in the following portfolio companies subsequent to June 30, 2026: Activity Type Date Company Name Company Description Proceeds Received Instrument Type Full Repayment July 1, 2026 General LED OPCO, LLC Provider of LED lighting systems and modules $ 4,500,000 Senior Secured – Second Lien Full Repayment July 27, 2026 MacKenzie-Childs Acquisition, Inc. Lifestyle home décor brand $ 86,331 Senior Secured – First Lien Full Repayment July 30, 2026 U.S. Expediters, LLC Reseller of CPAP machines and accessories $ 14,236,513 Senior Secured – First Lien Credit Facility The outstanding balance under the Credit Facility as of August 10, 2026 was $211.7 million. SBA Licensing On July 14, 2026, we received a license from the SBA for the SBIC III subsidiary, which allows us to contribute $125.0 million of equity and draw up to $250.0 million of SBA-guaranteed debentures, subject to the increased family of funds limit of $475.0 million across all of our SBIC subsidiaries and applicable SBA regulations and policies. Distributions Declared On July 16, 2026, the Board of Directors of the Company declared a regular monthly dividend for each of July 2026, August 2026, and September 2026 as follows: Record Payment Amount per Declared Date Date Share July 16, 2026 July 31, 2026 August 14, 2026 $ 0.0833 July 16, 2026 August 31, 2026 September 15, 2026 $ 0.0833 July 16, 2026 September 30, 2026 October 15, 2026 $ 0.0833 Share Repurchase Program Since June 30, 2026, we repurchased 192,974 shares of our common stock under the Repurchase Program at a weighted-average purchase price of $7.95 per share. Conference Call Information Stellus Capital Investment Corporation will host a conference call to discuss these results on Tuesday, August 11, 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 218557. Starting approximately two hours after the conclusion of the call, a replay will be available through
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Tuesday, August 25, 2026 by dialing (877) 481-4010 and entering passcode 54324. 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. Stellus Capital Management, LLC was acquired by Ridgepost Capital, LLC on June 22, 2026. Ridgepost Capital, LLC's parent company, Ridgepost Capital, Inc., is a reporting company listed on the New York Stock Exchange. Please reference Ridgepost Capital, Inc.'s periodic filings with the U.S. Securities and Exchange Commission for additional information. 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) June 30, 2026 December 31, 2025 ASSETS Controlled investments, at fair value (amortized cost of $34,691,986 and $33,603,521, respectively) $ 11,573,435 $ 14,953,132 Non-controlled, affiliated investments, at fair value (amortized cost of $29,323,333 and $4,806,660, respectively) 32,257,658 3,750,674
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Non-controlled, non-affiliated investments, at fair value (amortized cost of $913,612,730 and $987,729,505, respectively) 924,415,324 988,919,589 Cash and cash equivalents 5,138,950 25,050,156 Receivable for sales and repayments of investments 2,166,620 581,509 Interest receivable 5,973,539 6,375,996 Income tax receivable — 1,385,387 Other receivables 66,430 85,000 Related party receivable — 20 Deferred offering costs 75,000 — Prepaid expenses 457,821 150,843 Total Assets $ 982,124,777 $ 1,041,252,306 LIABILITIES 2030 Notes Payable $ 122,897,963 $ 122,671,409 Credit Facility payable 219,221,522 233,167,360 SBA-guaranteed debentures 257,304,593 295,984,063 Dividends payable 3,248,641 3,858,669 Management fees payable 4,393,771 4,442,705 Income incentive fees payable 889,986 2,317,429 Interest payable 5,569,922 6,138,076 Unearned revenue 496,577 582,007 Administrative services payable 517,253 539,338 Income tax payable 56,518 — Other accrued expenses and liabilities 570,085 372,294 Total Liabilities $ 615,166,831 $ 670,073,350 Commitments and contingencies (Note 7) Net Assets $ 366,957,946 $ 371,178,956 NET ASSETS Common stock, par value $0.001 per share (100,000,000 shares authorized; 28,672,911 and 28,947,254 shares issued and outstanding, respectively) $ 28,673 $ 28,947 Paid-in capital 395,382,385 397,829,793 Total distributable loss (28,453,112) (26,679,784) Net Assets $ 366,957,946 $ 371,178,956 Total Liabilities and Net Assets $ 982,124,777 $ 1,041,252,306 Net Asset Value Per Share $ 12.80 $ 12.82 STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) For the three months ended For the six months ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 INVESTMENT INCOME From non-controlled, affiliated investments Interest income $ 1,016 $ — $ 1,061 $ — Payment-in-kind interest income 559,310 — 631,610 — From non-controlled, non-affiliated investments Interest income 19,864,060 23,134,800 39,811,025 46,285,437 Payment-in-kind interest income 1,159,038 1,519,405 3,392,735 2,495,884
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Other income 719,448 1,042,397 1,759,375 1,866,939 Total Investment Income $ 22,302,872 $ 25,696,602 $ 45,595,806 $ 50,648,260 OPERATING EXPENSES Management fees $ 4,393,770 $ 4,279,441 $ 8,786,127 $ 8,334,167 Valuation fees 44,995 38,507 211,114 196,396 Administrative services expenses 550,235 474,284 1,199,355 923,582 Income incentive fees 150,863 2,158,075 257,572 4,294,566 Professional fees 283,474 312,808 1,101,201 730,839 Directors' fees 84,250 93,250 213,500 204,500 Insurance expense 102,057 98,668 195,113 195,758 Interest expense and other fees 8,585,467 8,680,015 17,437,008 16,943,034 Income tax expense 29,685 428,951 390,156 928,498 Other general and administrative expenses 585,510 500,302 825,127 718,653 Total Operating Expenses $ 14,810,306 $ 17,064,301 $ 30,616,273 $ 33,469,993 Income incentive fee waiver (38,583) (928,926) (49,644) (2,171,769) Total Operating Expenses, net of fee waivers $ 14,771,723 $ 16,135,375 $ 30,566,629 $ 31,298,224 Net Investment Income $ 7,531,149 $ 9,561,227 $ 15,029,177 $ 19,350,036 Net realized loss on controlled investments $ — $ (1,132,576) $ — $ (1,132,576) Net realized (loss) gain on non-controlled, non-affiliated investments (7,243,523) 272,549 (6,493,113) (5,694,672) Net realized (loss) gain on foreign currency translations (1,811) (20,003) 1,853 (49,658) Net change in unrealized (depreciation) appreciation on controlled investments (922,785) 1,290,491 (4,468,162) 1,345,767 Net change in unrealized appreciation on non-controlled, affiliated investments 3,913,525 — 3,468,901 — Net change in unrealized appreciation on non-controlled, non-affiliated investments 12,908,698 143,176 10,350,353 1,281,193 Net change in unrealized appreciation (depreciation) on foreign currency translations 21,045 30,546 (26,975) 38,865 Net Increase in Net Assets Resulting from Operations $ 16,206,298 $ 10,145,410 $ 17,862,034 $ 15,138,955 Net Investment Income Per Share—basic and diluted $ 0.26 $ 0.34 $ 0.52 $ 0.69 Net Increase in Net Assets Resulting from Operations Per Share – basic and diluted $ 0.56 $ 0.36 $ 0.62 $ 0.54 Weighted Average Shares of Common Stock Outstanding—basic and diluted 28,869,028 28,412,849 28,907,925 28,009,969 Distributions Per Share—basic and diluted $ 0.34 $ 0.40 $ 0.68 $ 0.80 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
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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 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 Net investment income — — — 9,561,227 9,561,227 Net realized loss on investments — — — (860,027) (860,027) Net realized loss on foreign currency translations — — — (20,003) (20,003) Net change in unrealized appreciation on investments — — — 1,433,667 1,433,667 Net change in unrealized appreciation on foreign currency translations — — — 30,546 30,546 Provision for taxes on unrealized appreciation on investments — — — — — Distributions from net investment income — — — (11,363,618) (11,363,618) Issuance of common stock, net of offering costs 278,945 279 3,822,637 — 3,822,916 Balances at June 30, 2025 28,416,148 $ 28,416 $ 392,309,339 $ (16,966,865) $ 375,370,890 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 Net investment income — — — 7,531,149 7,531,149 Net realized loss on investments — — — (7,243,523) (7,243,523) Net realized loss on foreign currency translation — — — (1,811) (1,811) Net change in unrealized appreciation on investments — — — 15,899,438 15,899,438 Net change in unrealized appreciation on foreign currency translations — — — 21,045 21,045 Distributions from net investment income — — — (9,796,191) (9,796,191) (1) (1)
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Repurchase of common stock, net of commissions (274,343) (274) (2,447,408) — (2,447,682) Balances at June 30, 2026 28,672,911 $ 28,673 $ 395,382,385 $ (28,453,112) $ 366,957,946 STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) For the six months ended June 30, 2026 June 30, 2025 Cash Flows from Operating Activities Net increase in net assets resulting from operations $ 17,862,034 $ 15,138,955 Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities: Purchases of investments (45,678,450) (78,230,159) Proceeds from sales and repayments of investments 90,888,206 46,638,287 Net change in unrealized appreciation on investments (9,351,092) (2,626,960) Net change in unrealized depreciation (appreciation) on foreign currency translations 26,975 (38,865) Increase in investments due to payment-in-kind income (3,392,735) (2,492,551) Amortization of premium and accretion of discount, net (1,383,610) (1,437,223) Amortization of loan structure fees 511,422 634,745 Amortization of deferred financing costs 270,866 303,468 Amortization of discount on Notes Payable 67,121 31,434 Amortization of premium on Notes Payable (61,432) — Amortization of loan fees on SBA-guaranteed debentures 320,530 371,260 Net realized loss on investments 6,493,113 6,827,248 Changes in other assets and liabilities Decrease (increase) in interest receivable 402,457 (921,344) Decrease (increase) in income tax receivable 1,385,387 (743,732) Decrease in other receivables 18,570 70,495 Decrease in related party receivables 20 3,687 (Increase) decrease in prepaid expenses (306,978) 218,975 (Decrease) increase in management fees payable (48,934) 245,332 Decrease in income incentive fees payable (1,427,443) (1,057,366) (Decrease) increase in administrative services payable (22,085) 22,297 (Decrease) increase in interest payable (568,154) 1,248,079 Increase in related party payable — 1,088,287 (Decrease) increase in unearned revenue (85,430) 127,664 Increase in income tax payable 56,518 — Increase in other accrued expenses and liabilities 197,791 1,322,363 Net Cash Provided by (Used in) Operating Activities $ 56,174,667 $ (13,255,624) Cash Flows from Financing Activities Proceeds from the issuance of common stock $ — $ 13,153,366 Sales load for common stock issued — (197,464) Offering costs paid for common stock issued (75,000) (303,959) Payment for repurchase of common stock (2,436,708) — Commission for repurchase of common stock (10,975) — Stockholder distributions paid (20,245,390) (22,326,367) Financing costs paid on Notes Payable (50,000) (1,698,806) (1)
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Repayments of SBA-guaranteed debentures (39,000,000) (16,250,000) Borrowings under Credit Facility 92,200,000 104,400,000 Repayments of Credit Facility (106,467,800) (117,817,800) Net Cash (Used in) Provided by Financing Activities $ (76,085,873) $ 33,188,720 Net (Decrease) Increase in Cash and Cash Equivalents $ (19,911,206) $ 19,933,096 Cash and Cash Equivalents Balance at Beginning of Period $ 25,050,156 $ 20,058,594 Cash and Cash Equivalents Balance at End of Period $ 5,138,950 $ 39,991,690 Supplemental and Non-Cash Activities Cash paid for interest expense $ 16,896,905 $ 14,354,048 Income and excise tax refund, net (1,051,749) 1,672,230 Exchange of investments 8,670,888 1,663,301 Reconciliation of Core Net Investment Income (Unaudited) Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Net investment income $7,531,149 $9,561,227 $15,029,177 $19,350,036 Income tax expense 29,685 428,951 390,156 928,498 Core net investment income $7,560,834 $9,990,178 $15,419,333 $20,278,534 Per share amounts: Net investment income per share $0.26 $0.34 $0.52 $0.69 Core net investment income per share $0.26 $0.35 $0.53 $0.72 Reconciliation of Realized Net Investment Income (Unaudited) Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Net investment income $7,531,149 $9,561,227 $15,029,177 $19,350,036 Net realized loss on investments (7,243,523) (860,027) (6,493,113) (6,827,248) Net realized (loss) gain on foreign currency translation (1,811) (20,003) 1,853 (49,658) Total realized net investment income $285,815 $8,681,197 $8,537,917 $12,473,130 Per share amounts: Net investment income per share $0.26 $0.34 $0.52 $0.69 Realized net investment income per share $0.01 $0.31 $0.30 $0.45 View original content to download multimedia: https://www.prnewswire.com/news-releases/stellus- capital-investment-corporation-reports-results-for-its-second-fiscal-quarter-ended-june-30-2026- 302847513.html SOURCE Stellus Capital Investment Corporation (1) (2)