Stellus Capital Investment Corporation Reports Results For Its Fourth Fiscal Quarter And Year Ended December 31, 2022

HOUSTON, Feb. 28, 2023 /PRNewswire/ -- Stellus Capital Investment Corporation (NYSE:SCM) ("Stellus" or the "Company") today announced financial results for its fourth fiscal quarter and year ended December 31, 2022.

Robert T. Ladd, Chief Executive Officer of Stellus, stated, "I am pleased to report strong results for the quarter ended December 31, 2022, in which we more than covered our regular and additional dividends of $0.34 per share with U.S. GAAP net investment income of $0.50 per share and Core net investment income of $0.44 per share, and increased our regular dividend 43% from $0.28 per share per quarter in the fourth quarter of 2022 to $0.40 per share per quarter, payable in monthly increments beginning in the first quarter of 2023. This increase in our dividend reflects the greater earnings that we are generating in this higher interest rate environment in which our loan portfolio is over 97% floating rate and our liability structure is over 65% fixed rate."

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

	Three Months Ended		Three Months Ended		Year Ended		Year Ended
	December 31, 2022		December 31, 2021		December 31, 2022		December 31, 2021
	Amount	Per Share	Amount	Per Share	Amount	Per Share	Amount	Per Share
Net investment income	$9.71	$0.50	$5.12	$0.26	$28.59	$1.46	$19.78	$1.01
Core net investment income⁽¹⁾	8.66	0.44	6.53	0.33	26.93	1.38	23.75	1.22
Net realized (loss) gain on investments	(1.00)	(0.06)	17.11	0.88	3.66	0.19	23.71	1.22
Net realized loss on foreign currency translation	-	-	-	-	(0.01)	-	-	-
Loss on debt extinguishment	-	-	-	-	-	-	(0.54)	(0.03)
Provision for taxes on realized gain on investments in taxable subsidiaries	-	-	(2.28)	(0.12)	-	-	(2.96)	(0.15)
Total realized income⁽²⁾	$8.71	$0.44	$19.95	$1.02	$32.24	$1.65	$40.53	$2.05
Distributions	(6.67)	(0.34)	(1.18)	(0.06)	(25.42)	(1.30)	(22.22)	(1.14)
Net unrealized depreciation on investments	(4.73)	(0.24)	(10.80)	(0.55)	(17.54)	(0.90)	(6.93)	(0.36)
Net unrealized appreciation on foreign currency translation	0.06	-	-	-	0.01	-	-	-
Provision for taxes on unrealized appreciation on investments in taxable subsidiaries	(0.06)	-	1.10	0.06	(0.21)	(0.01)	0.51	0.03
Net increase in net assets resulting from operations	$3.98	0.20	$10.25	0.53	$14.49	0.74	$33.57	1.72
Weighted average shares outstanding		19,604,040		19,500,866		19,552,931		19,489,750


(1)	Core net investment income, as presented, excludes the impact of capital gains incentive fees 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. generally accepted accounting principles ("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 and number of portfolio companies)

	As of	As of
	December 31, 2022	December 31, 2021
Investments at fair value	$844.7	$772.9
Total assets	$898.2	$821.3
Net assets	$275.8	$285.1
Shares outstanding	19,666,769	19,517,595
Net asset value per share	$14.02	$14.61


	Three Months Ended	Three Months Ended	Year Ended	Year Ended
	December 31, 2022	December 31, 2021	December 31, 2022	December 31, 2021
New investments	$30.1	$144.0	$211.0	$387.3
Repayments of investments	(53.2)	(164.0)	(127.5)	(287.6)
Net activity	($23.1)	($20.0)	$83.5	$99.7

	As of	As of
	December 31, 2022	December 31, 2021
Number of portfolio company investments	85	73
Number of debt investments	73	58

Weight average yield of debt and other income producing investments ⁽³⁾
Cash	10.3 %	7.4 %
Payment-in-kind ("PIK")	0.4 %	0.2 %
Fee amortization	0.4 %	0.4 %
Total	11.1 %	8.0 %

Weighted average yield on total investments ⁽⁴⁾
Cash	9.7 %	6.9 %
Payment-in-kind ("PIK")	0.3 %	0.2 %
Fee amortization	0.4 %	0.4 %
Total	10.4 %	7.5 %


(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 of our common stock would realize in a return over the same period because the dollar-weighted average annualized yield does not reflect the Company's expense 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 loans and equity.

Results of Operations

Investment income for the years ended December 31, 2022 and 2021 totaled $75.1 million and $63.7 million, respectively, most of which was interest income from portfolio investments.

Operating expenses for the years ended December 31, 2022 and 2021, totaled $46.5 million and $43.9 million, respectively. For the same respective periods, base management fees totaled $14.8 million and $13.2 million, income incentive fees totaled $3.8 and $3.0 million, capital gains incentive (reversal) fees totaled ($2.8) million and $2.9 million, fees and expenses related to our borrowings totaled $24.5 million and $18.7 million (including interest and amortization of deferred financing costs), administrative expenses totaled $1.8 million for both periods, income tax totaled $1.2 million and $1.1 million and other expenses totaled $3.2 million for both periods.

The capital gains incentive fee had a reversal of ($2.8) million for the year ended December 31, 2022 due to the increase in unrealized losses, net of realized gains over the year. Such fees, as calculated and accrued, would not necessarily be payable under the investment advisory agreement, and may never be paid based upon the computation of incentive fees in subsequent periods. The income tax expense accrual of $1.2 million for the year ended December 31, 2022 was accrued based on estimates of undistributed taxable income, which was generated largely from net income, offset by realized losses.

Net investment income was $28.6 million and $19.8 million, or $1.46 and $1.01 per common share based on weighted average common shares outstanding of 19,552,931 and 19,489,750 for the years ended December 31, 2022 and 2021, respectively. Core net investment income, which is a non-U.S. GAAP measure that excludes the capital gains incentive fee and income tax expense accruals, for the year ended December 31, 2022 was $26.9 million, or $1.38 per share; and for the year ended December 31, 2021 was $23.7 million, or $1.22 per share.

For the years ended December 31, 2022 and 2021, the Company's investment portfolio had a net change in unrealized depreciation of ($17.5) million and ($6.9) million, respectively, and the Company had realized gains of $3.7 million and $23.7 million, respectively.

Net increase in net assets resulting from operations totaled $14.5 million and $33.6 million, or $0.74 and $1.72 per common share, based on weighted average common shares outstanding of 19,552,931 and 19,489,750 for the years ended December 31, 2022 and 2021, respectively.

Liquidity and Capital Resources

As of December 31, 2022, our amended and restated 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 $265.0 million on a committed basis. As of December 31, 2022 and 2021, the Credit Facility had an accordion feature which allowed for potential future expansion of the facility size to $280.0 million. As of December 31, 2022 and December 31, 2021, we had $199.2 million and $177.3 million in outstanding borrowings under the Credit Facility, respectively.

Distributions

During the three months December 31, 2022 and 2021, we declared aggregate distributions of $0.34 and $0.06 per share, respectively ($6.7 million and $1.2 million, respectively). During the years ended December 31, 2022 and 2021, we declared aggregate distributions of $1.30 per share and $1.14, respectively ($25.4 million and $22.2 million, respectively), Tax characteristics of all distributions are reported to stockholders on Form 1099-DIV. Approximately $3.8 million of the dividends declared in 2022 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, 2022:


Activity Type	Date	Company Name	Company Description	Investment Amount		Instrument Type
New Investment	October 12, 2022	NINJIO, LLC	Cybersecurity awareness and training platform	$	5,000,000	Senior Secured – First Lien
				$	100,000	Revolver commitment
				$	100,000	Delayed draw term loan commitment
				$	313,253	Equity
New Investment	November 16, 2022	Onpoint Industrial Services, LLC	Provider of safety, logistics, planning, and project management services to refineries and petrochemical plant	$	12,893,258	Senior Secured – First Lien
				$	606,742	Equity
New Investment	November 22, 2022	COPILOT Provider Support Services, LLC	End-to-end HUB software platform for the healthcare industry	$	5,000,000	Senior Secured – First Lien
				$	100,000	Revolver commitment
				$	285,714	Equity
Add-On Investment	December 20, 2022	USASF Blocker V LLC*	Leading integrated used car retailer and subprime auto finance company	$	200,000	Equity
Add-On Investment	December 22, 2022	Tower Arch Infolinks Media, LP*	Advertising placement partner for small to mid-sized publishers	$	1,093	Equity
New Investment	December 30, 2022	Madison Logic, Inc.	Provider of B2B account based marketing services	$	4,529,217	Senior Secured – First Lien
				$	100,000	Revolver commitment


*	Existing portfolio company

The Company realized investments in the following portfolio companies during the three months ended December 31, 2022:


Activity Type	Date	Company Name	Proceeds Received		Realized Gain		Instrument Type
Full Realization	October 17, 2022	EC Defense Holdings, LLC	$	$1,450,000	$	$950,000	Equity
Full Repayment	November 16, 2022	Onpoint Industrial Services, LLC	$	$10,342,500	$	—	Senior Secured – First Lien
Full Realization			$	$669,654	$	$170,619	Equity
Full Realization	November 28, 2022	Colford Capital Holdings, LLC	$	—		($195,036)	Equity
Full Realization	December 9, 2022	Grupo HIMA San Pablo, Inc.	$	—	$	($4,109,525)	Senior Secured – Second Lien
Full Repayment	December 15, 2022	Spire Power Solutions, L.P.	$	$8,371,564	$	—	Senior Secured – First Lien
Full Realization	December 16, 2022	Skopos Financial Group, LLC	$	—	$	($1,162,544)	Equity
Full Repayment	December 22, 2022	TFH Reliability, LLC	$	$10,875,000	$	—	Senior Secured – Second Lien
Full Realization			$	$351,797	$	$98,765	Equity
Full Repayment	December 30, 2022	Madison Logic, Inc.	$	$10,586,585	$	—	Senior Secured – First Lien
Full Realization			$	$4,128,966	$	$4,128,966	Equity
Full Realization	December 30, 2022	Bromford Holdings, L.P.	$	—	$	($1,146,706)	Equity

Events Subsequent to December 31, 2022

The Company invested in the following portfolio companies subsequent to December 31, 2022:


Activity Type	Date	Company Name	Company Description	Investment Amount		Instrument Type
Add-On Investment	January 5, 2023	GP ABX Holdings Partnership, L.P.*	Manufacturer of high barrier forming web films	$	35,308	Equity
New Investment	January 23, 2023	Evriholder Acquisition, Inc.	Designer and supplier of impulse products and merchandising solutions to retailers.	$	13,000,000	Senior Secured – First Lien
				$	873,333	Equity
				$	100,000	Revolver commitment
New Investment	January 31, 2023	Red's All Natural, LLC	Premium frozen food manufacturer	$	10,916,882	Senior Secured – First Lien
				$	710,600	Equity


* Existing portfolio company

Credit Facility

The outstanding balance under the Credit Facility as of February 28, 2023 was $205.6 million.

SBA-guaranteed Debentures

The total balance of SBA-guaranteed debentures outstanding as of February 28, 2023 was $313.6 million.

Distributions Declared

On January 11, 2023, our Board of Directors declared a regular monthly distribution for each of January, February, and March 2023, as follows:


	Ex-Dividend	Record	Payment	Amount per
Declared	Date	Date	Date	Share
1/11/2023	1/30/2023	1/31/2023	2/15/2023	$	0.1333
1/11/2023	2/27/2023	2/28/2023	3/15/2023	$	0.1333
1/11/2023	3/30/2023	3/31/2023	4/14/2023	$	0.1333

Conference Call Information

Stellus Capital Investment Corporation will host a conference call to discuss these results on Wednesday, March 1, 2023 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 265440. Starting approximately two hours after the conclusion of the call, a replay will be available through Wednesday, March 15, 2023 by dialing (877) 481-4010 and entering passcode 47767. The replay will also be available on the Company's website.

For those wishing to participate via Live Webcast, connect via the Public Company (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, 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 Corporation

W. Todd Huskinson, Chief Financial Officer

(713) 292-5414

thuskinson@stelluscapital.com

STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES

	December 31, 2022		December 31, 2021
ASSETS
Non-controlled, non-affiliated investments, at fair value (amortized cost of $875,823,177 and $785,005,957, respectively)	$	844,733,638	$	772,873,326
Cash and cash equivalents		48,043,329		44,174,856
Receivable for sales and repayments of investments		718,794		536,105
Interest receivable		3,984,409		2,944,599
Other receivables		34,245		54,752
Deferred tax asset		—		151,278
Deferred offering costs		1,100		14,888
Prepaid expenses		667,267		512,214
Total Assets	$	898,182,782	$	821,262,018
LIABILITIES
Notes payable	$	98,549,692	$	98,102,973
Credit Facility payable		197,685,281		175,451,116
SBA-guaranteed debentures		307,895,195		244,615,903
Dividends payable		—		1,171,059
Management fees payable		7,150,407		3,454,225
Income incentive fees payable		2,464,408		1,749,130
Capital gains incentive fees payable		569,528		3,388,151
Interest payable		4,640,841		3,693,662
Related party payable		1,060,321		—
Unearned revenue		320,675		529,726
Administrative services payable		356,919		386,368
Income tax payable		1,175,373		3,269,514
Deferred tax liability		61,936		—
Other accrued expenses and liabilities		475,593		338,958
Total Liabilities	$	622,406,169	$	536,150,785
Commitments and contingencies (Note 7)
Net Assets	$	275,776,613	$	285,111,233
NET ASSETS
Common stock, par value $0.001 per share (100,000,000 shares authorized; 19,666,769 and 19,517,595 issued and outstanding, respectively	$	19,667	$	19,518
Paid-in capital		275,114,720		274,559,121
Total distributable earnings		642,226		10,532,594
Net Assets	$	275,776,613	$	285,111,233
Total Liabilities and Net Assets	$	898,182,782	$	821,262,018
Net Asset Value Per Share	$	14.02	$	14.61

STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS

	For the years ended
	December 31, 2022		December 31, 2021		December 31, 2020
INVESTMENT INCOME
Interest income	$	72,964,999	$	61,536,686	$	55,350,781
Other income		2,147,577		2,142,308		1,307,533
Total Investment Income	$	75,112,576	$	63,678,994	$	56,658,314
OPERATING EXPENSES
Management fees	$	14,848,174	$	13,169,606	$	11,084,450
Valuation fees		351,752		313,437		290,445
Administrative services expenses		1,810,576		1,798,966		1,781,603
Income incentive fees		3,782,151		3,043,470		2,527,813
Capital gains incentive (reversal) fee		(2,818,623)		2,867,131		(359,892)
Professional fees		1,103,693		1,082,917		950,716
Directors' fees		329,000		315,000		394,816
Insurance expense		503,907		482,140		384,774
Interest expense and other fees		24,469,285		18,721,058		15,950,087
Income tax expense		1,161,668		1,102,374		771,134
Other general and administrative expenses		984,309		1,006,428		890,465
Total Operating Expenses	$	46,525,892	$	43,902,527	$	34,666,411
Net Investment Income	$	28,586,684	$	19,776,467	$	21,991,903
Net realized gain (loss) on non-controlled, non-affiliated investments	$	3,660,595	$	23,710,167	$	(10,129,859)
Net realized loss on foreign currency translation		(6,091)		—		—
Loss on debt extinguishment		—		(539,250)		—
Net change in unrealized (depreciation) appreciation on non-controlled non-affiliated investments		(17,542,230)		(6,928,160)		8,555,274
Net change in unrealized appreciation on foreign currency translation		6,040		—		—
(Provision) benefit for taxes on net unrealized (appreciation) depreciation on investments		(213,214)		510,868		(224,877)
Provision for taxes on realized gain on investments		—		(2,957,220)		—
Net Increase in Net Assets Resulting from Operations	$	14,491,784		33,572,872		20,192,441
Net Investment Income Per Share—basic and diluted	$	1.46	$	1.01	$	1.13
Net Increase in Net Assets Resulting from Operations Per Share – basic and diluted	$	0.74	$	1.72	$	1.04
Weighted Average Shares of Common Stock Outstanding—basic and diluted		19,552,931		19,489,750		19,471,500
Distributions Per Share—basic and diluted	$	1.30	$	1.14	$	1.15

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, 2019	19,131,746	$	19,132	$	272,117,091	$	(1,565,050)	$	270,571,173
Net investment income	—		—		—		21,991,903		21,991,903
Net realized loss on non-controlled, non-affiliated investments	—		—		—		(10,129,859)		(10,129,859)
Net change in unrealized appreciation on non-controlled, non-affiliated investments	—		—		—		8,555,274		8,555,274
Provision for taxes on unrealized appreciation on investments	—		—		—		(224,877)		(224,877)
Return of capital and other tax related adjustments	—		—		(1,090,064)		1,090,064		—
Distributions from net investment income	—		—		—		(22,402,959)		(22,402,959)
Issuance of common stock, net of offering costs	354,257		354		4,999,640		—		4,999,994
Balances at December 31, 2020	19,486,003	$	19,486	$	276,026,667	$	(2,685,504)	$	273,360,649
Net investment income	—		—		—		19,776,467		19,776,467
Net realized gain on non-controlled, non-affiliated investments	—		—		—		23,710,167		23,710,167
Loss on debt extinguishment	—		—		—		(539,250)		(539,250)
Net change in unrealized depreciation on non-controlled, non-affiliated investments	—		—		—		(6,928,160)		(6,928,160)
Benefit for taxes on unrealized depreciation on investments							510,868		510,868
Provision for taxes on realized gain on investments	—		—		—		(2,957,220)		(2,957,220)
Return of capital and other tax related adjustments	—		—		(1,861,213)		1,861,213		—
Distributions from net investment income	—		—		—		(21,201,567)		(21,201,567)
Distributions from net realized capital gains	—		—		—		(1,014,420)		(1,014,420)
Issuance of common stock, net of offering costs	31,592		32		393,667		—		393,699
Balances at 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 non-controlled, non-affiliated investments	—		—		—		3,660,595		3,660,595
Net realized loss on foreign currency translation	—		—		—		(6,091)		(6,091)
Net change in unrealized depreciation on non-controlled, non-affiliated 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	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

STELLUS CAPITAL INVESTMENT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the years ended
	December 31, 2022		December 31, 2021		December 31, 2020
Cash flows from operating activities
Net increase in net assets resulting from operations	$	14,491,784	$	33,572,872	$	20,192,441
Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities:
Purchases of investments		(211,010,869)		(387,281,160)		(152,007,165)
Proceeds from sales and repayments of investments		127,548,194		287,639,512		128,627,422
Net change in unrealized depreciation (appreciation) on investments		17,542,230		6,928,160		(8,555,274)
Net change in unrealized appreciation foreign currency translations		(5,897)		—		—
Increase in investments due to PIK		(1,357,177)		(939,030)		(664,992)
Amortization of premium and accretion of discount, net		(2,519,462)		(2,412,991)		(2,098,788)
Deferred tax provision (benefit)		213,214		(510,868)		224,877
Amortization of loan structure fees		567,375		518,930		647,872
Amortization of deferred financing costs		446,719		444,153		333,316
Amortization of loan fees on SBA-guaranteed debentures		1,227,952		1,088,132		701,068
Net realized (gain) loss on investments		(3,660,595)		(23,703,499)		10,129,859
Loss on debt extinguishment		—		539,250		—
Changes in other assets and liabilities
(Increase) decrease in interest receivable		(1,039,810)		(755,151)		725,262
Decrease (increase) in other receivable		20,507		(29,257)		—
Increase in prepaid expenses		(155,053)		(25,026)		(118,967)
Increase in management fees payable		3,696,182		628,903		129,542
Increase (decrease) in income incentive fees payable		715,278		1,067,470		(936,849)
(Decrease) increase in capital gains incentive fees payable		(2,818,623)		2,867,130		(359,892)
Decrease in administrative services payable		(29,449)		(5,123)		(21,787)
Increase (decrease) in interest payable		947,179		1,549,577		(178,229)
Increase in related party payable		1,060,321		—		—
(Decrease) increase in unearned revenue		(209,051)		6,302		(36,344)
(Decrease) increase in income tax payable		(2,094,141)		2,544,749		(192,235)
Increase (decrease) in other accrued expenses and liabilities		136,635		164,227		(28,730)
Net Cash Used in Operating Activities	$	(56,286,557)	$	(76,102,738)	$	(3,487,593)
Cash flows from Financing Activities
Proceeds from the issuance of common stock	$	2,158,540	$	449,515	$	4,794,994
Sales load for common stock issued		(31,066)		(2,489)		(18,169)
Offering costs paid for common stock issued		(517,054)		(53,327)		(95,681)
Stockholder distributions paid		(26,594,095)		(21,044,928)		(24,341,646)
Repayment of Notes		—		(48,875,000)		—
Proceeds from issuance of Notes		—		100,000,000		—
Financing costs paid on Notes		—		(2,237,835)		—
Proceeds from SBA-guaranteed debentures		63,600,000		73,500,000		15,500,000
Financing costs paid on SBA-guaranteed debentures		(1,548,660)		(3,139,725)		(577,425)
Financing costs paid on Credit facility		(193,635)		(136,219)		(1,880,099)
Borrowings under Credit Facility		149,888,800		268,700,000		120,950,000
Repayments of Credit Facility		(126,607,800)		(265,360,000)		(108,500,000)
Partial share redemption		—		—		(94)
Net Cash Provided by Financing Activities	$	60,155,030	$	101,799,992	$	5,831,880
Net Increase in Cash and Cash Equivalents	$	3,868,473	$	25,697,254	$	2,344,287
Cash and Cash Equivalents Balance at Beginning of Period		44,174,856		18,477,602		16,133,315
Cash and Cash Equivalents Balance at End of Period	$	48,043,329	$	44,174,856	$	18,477,602
Supplemental and Non-Cash Activities
Cash paid for interest expense	$	21,280,060	$	15,099,656	$	14,441,061
Income and excise tax paid		3,255,809		1,445,000		940,000
Shares issued pursuant to Dividend Reinvestment Plan		—		—		228,943
(Decrease) increase in dividends payable		(1,171,059)		1,171,059		(2,167,630)
(Decrease) increase in deferred offering costs		(13,788)		(75,112)		90,000
Gain on conversion of equity investment		—		6,668		—

Reconciliation of Core Net Investment Income (Unaudited)

	Three Months Ended	Three Months Ended	Year Ended	Year Ended
	December 31, 2022	December 31, 2021	December 31, 2022	December 31, 2021
Net investment income	$9,708,610	$5,116,721	$28,586,684	$19,776,467
Capital gains incentive fee	(1,146,074)	1,026,559	(2,818,623)	2,867,131
Income tax expense	94,900	383,505	1,161,668	1,102,374
Core net investment income	$8,657,436	$6,526,785	$26,929,729	$23,745,972

Per share amounts:
Net investment income per share	$0.50	$0.26	$1.46	$1.01
Core net investment income per share	$0.44	$0.33	$1.38	$1.22

Reconciliation of Realized Net Investment Income (Unaudited)

	Three Months Ended	Three Months Ended	Year Ended	Year Ended
	December 31, 2022	December 31, 2021	December 31, 2022	December 31, 2021
Net investment income	$9,708,610	$5,116,721	$28,586,684	$19,776,467
Net realized (loss) gain on investments	(998,222)	17,108,282	3,660,595	23,710,167
Net realized gain (loss) on foreign currency translation	1,935	—	(6,091)	—
Loss on debt extinguishment	—	—	—	(539,250)
Provision for taxes on realized gain on investments	—	(2,276,193)	—	(2,957,220)
Total Realized Net Investment Income	$8,712,323	$19,948,810	$32,241,188	$39,990,164

Per share amounts:
Net investment income per share	$0.50	$0.26	$1.46	$1.01
Realized net investment income per share	$0.44	$1.02	$1.65	$2.05

View original content to download multimedia:https://www.prnewswire.com/news-releases/stellus-capital-investment-corporation-reports-results-for-its-fourth-fiscal-quarter-and-year-ended-december-31-2022-301758816.html

SOURCE Stellus Capital Investment Corporation

First published on Wed, Mar 1, 2023

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