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Stellus Capital Investment Corp_March 31, 2025

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER: 814-00971

STELLUS CAPITAL INVESTMENT CORPORATION

(Exact Name of Registrant as Specified in Its Charter)


Maryland		46-0937320
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

4400 Post Oak Parkway, Suite 2200

Houston, Texas 77027

(Address of Principal Executive Offices) (Zip Code)

(713) 292-5400

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	SCM	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the issuer’s Common Stock, par value $0.001 per share, outstanding as of May 12, 2025 was 28,416,148.

Table of Contents

STELLUS CAPITAL INVESTMENT CORPORATION

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Assets and Liabilities as of March 31, 2025 (unaudited) and December 31, 2024	1
	Consolidated Statements of Operations for the three month periods ended March 31, 2025 and 2024 (unaudited)	2
	Consolidated Statements of Changes in Net Assets for the three month periods ended March 31, 2025 and 2024 (unaudited)	3
	Consolidated Statements of Cash Flows for the three month periods ended March 31, 2025 and 2024 (unaudited)	4
	Consolidated Schedules of Investments as of March 31, 2025 (unaudited) and December 31, 2024	5
	Notes to Unaudited Financial Statements	36
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	68
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	85
Item 4.	Controls and Procedures	86
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	87
Item 1A.	Risk Factors	87
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	87
Item 3.	Defaults Upon Senior Securities	87
Item 4.	Mine Safety Disclosures	87
Item 5.	Other Information	87
Item 6.	Exhibits	88
SIGNATURES		89

Table of Contents

PART I — FINANCIAL INFORMATION

STELLUS CAPITAL INVESTMENT CORPORATION

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES


	March 31, 2025
	(unaudited)		December 31, 2024
ASSETS
Controlled investments at fair value (amortized cost of $17,934,808 for both periods)	$	7,707,712	$	7,652,436
Non-controlled, non-affiliated investments, at fair value (amortized cost of $979,896,856 and $943,853,898, respectively)		983,396,065		945,845,252
Cash and cash equivalents		10,888,821		20,058,594
Receivable for sales and repayments of investments		446,586		335,689
Interest receivable		6,229,272		4,947,765
Income tax receivable		2,383,725		1,301,965
Other receivables		108,750		87,995
Related party receivable		—		3,687
Prepaid expenses		576,553		666,866
Total Assets	$	1,011,737,484	$	980,900,249
LIABILITIES
Notes Payable	$	99,554,505	$	99,444,355
Credit Facility payable		219,057,554		172,314,315
SBA-guaranteed debentures		305,190,923		321,251,939
Dividends payable		3,750,689		3,663,233
Management fees payable		4,054,726		4,034,109
Income incentive fees payable		1,651,506		3,109,560
Interest payable		1,492,428		5,281,343
Related party payable		1,290,893		—
Unearned revenue		620,803		548,626
Administrative services payable		380,523		393,513
Other accrued expenses and liabilities		1,926,752		937,316
Total Liabilities	$	638,971,302	$	610,978,309
Commitments and contingencies (Note 7)
Net Assets	$	372,766,182	$	369,921,940
NET ASSETS
Common stock, par value $0.001 per share (100,000,000 shares authorized; 28,137,203 and 27,481,118 issued and outstanding, respectively)	$	28,137	$	27,481
Paid-in capital		388,486,702		379,549,272
Total distributable loss		(15,748,657)		(9,654,813)
Net Assets	$	372,766,182	$	369,921,940
Total Liabilities and Net Assets	$	1,011,737,484	$	980,900,249
Net Asset Value Per Share	$	13.25	$	13.46

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STELLUS CAPITAL INVESTMENT CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)


	For the three months ended
	March 31, 2025		March 31, 2024
INVESTMENT INCOME
From controlled investments:
Interest income	$	—	$	81,636
From non-controlled, non-affiliated investments
Interest income		24,127,116		24,956,851
Other income		824,542		958,262
Total Investment Income	$	24,951,658	$	25,996,749
OPERATING EXPENSES
Management fees	$	4,054,726	$	3,852,233
Valuation fees		157,889		156,507
Administrative services expenses		449,298		490,901
Income incentive fees		2,136,491		2,509,110
Professional fees		418,031		339,627
Directors’ fees		111,250		108,250
Insurance expense		97,090		124,989
Interest expense and other fees		8,263,019		7,767,573
Income tax expense		499,547		370,719
Other general and administrative expenses		218,351		245,275
Total Operating Expenses	$	16,405,692	$	15,965,184
Income incentive fee waiver		(1,242,843)		(204,351)
Total Operating Expenses, net of fee waivers	$	15,162,849	$	15,760,833
Net Investment Income	$	9,788,809	$	10,235,916
Net realized loss on non-controlled, non-affiliated investment	$	(5,967,221)	$	(20,384,731)
Net realized loss on foreign currency translations		(29,655)		(25,106)
Net change in unrealized appreciation on controlled investments		55,276		536,570
Net change in unrealized appreciation on non-controlled, non-affiliated investments		1,138,017		22,982,020
Net change in unrealized appreciation (depreciation) on foreign currency translations		8,319		(3,602)
Provision for taxes on net unrealized appreciation on investments		—		(192,607)
Net Increase in Net Assets Resulting from Operations	$	4,993,545	$	13,148,460
Net Investment Income Per Share—basic and diluted	$	0.35	$	0.42
Net Increase in Net Assets Resulting from Operations Per Share – basic and diluted	$	0.18	$	0.54
Weighted Average Shares of Common Stock Outstanding—basic and diluted		27,602,612		24,125,642
Distributions Per Share—basic and diluted	$	0.40	$	0.40

Table of Contents

STELLUS CAPITAL INVESTMENT CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (unaudited)


	Common Stock					Total
	Number	Par		Paid-in		distributable
	of shares	value		capital		(loss)		Net Assets
Balances at December 31, 2023	24,125,642	$	24,125	$	335,918,984	$	(16,003,321)	$	319,939,788
Net investment income	—		—		—		10,235,916		10,235,916
Net realized loss on investments	—		—		—		(20,384,731)		(20,384,731)
Net realized loss on foreign currency translations	—		—		—		(25,106)		(25,106)
Net change in unrealized appreciation on investments	—		—		—		23,518,590		23,518,590
Net change in unrealized depreciation on foreign currency translations	—		—		—		(3,602)		(3,602)
Provision for taxes on unrealized appreciation on investments	—		—		—		(192,607)		(192,607)
Distributions from net investment income	—		—		—		(9,647,844)		(9,647,844)
Balances at March 31, 2024	24,125,642	$	24,125	$	335,918,984	$	(12,502,705)	$	323,440,404

Balances at December 31, 2024	27,481,118	$	27,481	$	379,549,272	$	(9,654,813)	$	369,921,940
Net investment income	—		—		—		9,788,809		9,788,809
Net realized loss on investments	—		—		—		(5,967,221)		(5,967,221)
Net realized loss on foreign currency translations	—		—		—		(29,655)		(29,655)
Net change in unrealized appreciation on investments	—		—		—		1,193,293		1,193,293
Net change in unrealized depreciation on foreign currency translations	—		—		—		8,319		8,319
Distributions from net investment income	—		—		—		(11,087,389)		(11,087,389)
Issuance of common stock, net of offering costs⁽¹⁾	656,085		656		8,937,430		—		8,938,086
Balances at March 31, 2025	28,137,203	$	28,137	$	388,486,702	$	(15,748,657)	$	372,766,182

(1) See Note 4 to the consolidated financial statements contained herein for more information on offering costs.

Table of Contents

STELLUS CAPITAL INVESTMENT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)


	For three months ended
	March 31, 2025		March 31, 2024
Cash flows from operating activities
Net increase in net assets resulting from operations	$	4,993,545	$	13,148,460
Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities:
Purchases of investments		(55,415,263)		(28,516,430)
Proceeds from sales and repayments of investments		14,986,423		31,169,595
Net change in unrealized appreciation on investments		(1,193,293)		(23,518,590)
Net change in unrealized (appreciation) depreciation on foreign currency translations		(8,319)		3,602
Increase in investments due to PIK		(976,479)		(750,054)
Amortization of premium and accretion of discount, net		(715,755)		(702,543)
Deferred tax provision		—		192,607
Amortization of loan structure fees		315,618		264,707
Amortization of deferred financing costs		110,150		111,374
Amortization of loan fees on SBA-guaranteed debentures		188,984		314,055
Net realized loss on investments		5,967,221		20,384,731
Changes in other assets and liabilities
Increase in interest receivable		(1,281,507)		(1,602,062)
Increase in income tax receivable		(1,081,760)		(1,085,022)
Increase in other receivables		(20,755)		—
Decrease in related party receivables		3,687		—
Decrease in prepaid expenses		90,313		21,256
Increase (decrease) in management fees payable		20,617		(1,066,303)
Decrease in income incentive fees payable		(1,458,054)		(140,107)
(Decrease) increase in administrative services payable		(12,990)		22,897
Decrease in interest payable		(3,788,915)		(3,748,120)
Increase in related party payable		1,290,893		—
Increase in unearned revenue		72,177		14,589
Increase (decrease) in other accrued expenses and liabilities		989,436		(61,688)
Net Cash (Used) Provided in Operating Activities	$	(36,924,026)	$	4,456,954
Cash flows from Financing Activities
Proceeds from the issuance of common stock	$	9,256,982	$	—
Sales load for common stock issued		(138,908)		—
Offering costs paid for common stock issued		(179,988)		(5,209)
Stockholder distributions paid		(10,999,933)		(6,431,896)
Repayments of SBA-guaranteed debentures		(16,250,000)		—
Financing costs paid on Credit Facility		—		(49,969)
Borrowings under Credit Facility		67,700,000		50,000,000
Repayments of Credit Facility		(21,633,900)		(25,333,900)
Net Cash Provided by Financing Activities	$	27,754,253	$	18,179,026
Net (Decrease) Increase in Cash and Cash Equivalents	$	(9,169,773)	$	22,635,980
Cash and Cash Equivalents Balance at Beginning of Period	$	20,058,594	$	26,125,741
Cash and Cash Equivalents Balance at End of Period	$	10,888,821	$	48,761,721
Supplemental and Non-Cash Activities
Cash paid for interest expense	$	11,437,182	$	10,825,557
Income and excise tax paid		1,581,307		1,455,741
Increase in distributions payable		87,456		3,215,948
Increase in deferred offering costs		—		5,209
Exchange of investments		1,663,301		8,256,411

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

March 31, 2025

(unaudited)


															Principal						% of
												Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK⁽⁸⁾		Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
Control investments (23)
EH Real Estate Services, LLC														Skokie, IL
Term Loan A-1	(16)	First Lien		15.00	%	-	%	-	%	-	%	9/3/2021	9/3/2026	FIRE: Real Estate	$	1,882,226		1,882,226		291,745	0.08	%
Term Loan A-2	(16)	First Lien		15.00	%	-	%	-	%	-	%	4/3/2023	9/3/2026			650,943		650,943		100,896	0.03	%
Term Loan A-3	(16)	First Lien		15.00	%	-	%	-	%	-	%	6/7/2023	9/3/2026			230,678		230,678		35,755	0.01	%
Term Loan A-4	(16)	First Lien		15.00	%	-	%	-	%	-	%	7/12/2023	9/3/2026			1,505,537		1,505,537		1,505,537	0.40	%
Term Loan A-5	(16)	First Lien		15.00	%	-	%	-	%	-	%	1/8/2024	9/3/2026			5,710,182		5,710,182		5,710,182	1.53	%
Revolver	(16)(22)	First Lien		15.00	%	-	%	-	%	-	%	10/3/2023	9/3/2026			63,597		63,597		63,597	0.02	%
EH Holdco, LLC Common Units		Equity										10/3/2023				15,356		3		-	0.00	%
EH Holdco, LLC Series A Preferred Units		Equity										9/3/2021				7,892		7,891,642		-	0.00	%
Total																	$	17,934,808	$	7,707,712	2.07	%
Total Control investments																	$	17,934,808	$	7,707,712	2.07	%
Non-controlled, non-affiliated investments	(4)(5)
2X LLC														Berwyn, PA
Term Loan	(11)	First Lien	3M SOFR+	5.00	%	2.00	%	9.30	%			6/5/2023	6/5/2028	Services: Business	$	5,417,705		5,321,643		5,390,616	1.45	%
Term Loan	(11)	First Lien	3M SOFR+	5.00	%	2.00	%	9.30	%			10/31/2023	6/5/2028			1,426,662		1,399,715		1,419,529	0.38	%
Term Loan	(11)	First Lien	3M SOFR+	5.00	%	2.00	%	9.30	%			12/2/2024	6/5/2028			3,842,049		3,788,954		3,822,839	1.03	%
Revolver	(9)(11)	First Lien	3M SOFR+	5.00	%	2.00	%	9.30	%			6/5/2023	6/5/2028			42,500		42,500		42,288	0.01	%
2X Investors LP Class A Units		Equity										6/5/2023				58,949		176,915		1,280,170	0.34	%
Total																	$	10,729,727	$	11,955,442	3.21	%
Ad.Net Acquisition, LLC	(9)													Los Angeles, CA
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.00	%	1.00	%	10.56	%			5/7/2021	5/7/2026	Services: Business	$	15,003,676		14,944,374		15,003,677	4.02	%
Revolver	(11)	First Lien	3M SOFR+	6.00	%	1.00	%	10.56	%			5/7/2021	5/7/2026			854,217		854,217		854,217	0.23	%
Ad.Net Holdings, Inc. Series A Common Stock (SBIC II)	(5)	Equity										5/7/2021				7,794		77,941		0	0.00	%
Ad.Net Holdings, Inc. Series A Preferred Stock (SBIC II)	(5)	Equity										5/7/2021				7,015		701,471		742,327	0.20	%
Total																	$	16,578,003	$	16,600,221	4.45	%
AdCellerant LLC	(9)													Denver, CO
Term A Loan (SBIC II)	(5)(11)	First Lien	1M SOFR+	6.00	%	2.00	%	10.32	%			12/12/2023	12/12/2028	Media: Advertising, Printing & Publishing	$	9,875,000		9,718,428		9,776,250	2.62	%
AdCellerant Holdings, LLC Serires A Units		Equity										12/12/2023				728,710		728,710		577,851	0.16	%
Total																	$	10,447,138	$	10,354,101	2.78	%
ADS Group Opco, LLC														Lakewood, CO
Term Loan (SBIC II)	(5)(25)	First Lien		5.00	%	-	%	-	%	-	%	6/4/2021	12/31/2027	Aerospace & Defense	$	12,851,659		12,778,192		9,895,777	2.65	%
Priority Revolver (SBIC II)	(5)(9)(25)	First Lien		5.00	%	-	%	-	%	-	%	9/30/2024	12/31/2027			24,887		24,887		49,774	0.01	%
ADS Group Topco, LLC Class A Units		Equity										6/4/2021				77,626		288,691		-	0.00	%
ADS Group Topco, LLC Class B Units		Equity										6/4/2021				56,819		211,309		-	0.00	%
ADS Group Topco, LLC Class D Units		Equity										9/30/2024				432		-		-	0.00	%
ADS Group Topco, LLC Class Y Units		Equity										4/11/2023				48,216		165,027		-	0.00	%
ADS Group Topco, LLC Class Z Units		Equity										6/15/2022				72,043		267,929		-	0.00	%
Total																	$	13,736,035	$	9,945,551	2.66	%
Advanced Barrier Extrusions, LLC														Rhinelander, WI
Term Loan B (SBIC)	(4)(11)(13)	First Lien	1M SOFR+	9.50	%	1.00	%	-	%	-	%	11/30/2020	11/30/2026	Containers, Packaging, & Glass	$	16,843,750		16,733,670		3,031,876	0.81	%
Super Priority Term Loan (SBIC)	(4)(13)	First Lien		15.00	%			-	%	-	%	12/6/2024	11/30/2026			795,882		970,378		2,387,646	0.64	%
Super Priority Term Loan (SBIC)	(4)(13)	First Lien		15.00	%			-	%	-	%	2/5/2025	11/30/2026			875,000		875,000		2,625,000	0.71
Super Priority Term Loan (SBIC)	(4)(13)	First Lien		15.00	%			-	%	-	%	3/26/2025	11/30/2026			500,000		500,000		1,500,000	0.41
Term Loan A (SBIC)	(4)(13)	First Lien	1M SOFR+	9.50	%	1.00	%	-	%	-	%	3/26/2025	11/30/2026			2,607,637		565,204		469,375	0.14
Revolver (SBIC)	(4)(13)	First Lien	1M SOFR+	9.50	%	1.00	%	-	%	-	%	3/26/2025	11/30/2026			1,558,434		337,789		280,518	0.09
GP ABX Holdings Partnership, L.P. Partner Interests		Equity										8/8/2018				644,737		528,395		-	0.00	%
GP ABX Holdings Partnership, L.P. Series B Preferred Interests		Equity										1/5/2023				1,562		156,182		-	0.00	%
Total																	$	20,666,618	$	10,294,415	2.80	%
AGT Robotique Inc.	(9)													Trois Rivieres, Canada
Term Loan	(11)	First Lien	3M SOFR+	5.25	%	1.00	%	9.55	%			6/24/2024	6/22/2029	Capital Equipment	$	10,646,479		10,458,011		10,486,782	2.81	%
Total																	$	10,458,011	$	10,486,782	2.81	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

March 31, 2025

(unaudited)


															Principal						% of
												Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK		Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
American Refrigeration, LLC	(9)													Jacksonville, FL
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.25	%	1.50	%	10.55	%			3/31/2023	3/31/2028	Capital Equipment	$	8,110,164		7,974,299		8,110,164	2.18	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.25	%	1.50	%	10.55	%			3/31/2023	3/31/2028			99,000		98,035		99,000	0.03	%
AR-USA Holdings, LLC Class A Units		Equity										3/31/2023				141		135,778		219,793	0.06	%
Total																	$	8,208,112	$	8,428,957	2.27	%
AMII Acquisition, LLC	(9)													Coral Gables, FL
Term Loan (SBIC II )	(5)(11)	First Lien	3M SOFR+	4.75	%	1.50	%	9.05	%			12/4/2024	12/4/2029	Services: Consumer	$	8,797,419		8,672,288		8,665,458	2.32	%
AMII Holdings, LP Class B Units		Equity										12/3/2024				14,246		142,460		152,156	0.04	%
Total																	$	8,814,748	$	8,817,614	2.36	%
Amika OpCo LLC	(9)													Brooklyn, NY
Term Loan	(11)	First Lien	6M SOFR+	5.25	%	0.75	%	9.62	%			7/1/2022	7/1/2029	Consumer Goods: Non-Durable	$	94,638		93,323		94,638	0.03	%
Term Loan	(11)	First Lien	6M SOFR+	5.75	%	0.75	%	10.33	%			12/5/2023	7/1/2029			9,584,569		9,427,310		9,584,569	2.57	%
Ishtar Co-Invest-B LP Partnership Interests		Equity										7/1/2022				77,778		38,133		297,220	0.08	%
Oshun Co-Invest-B LP Partnership Interests		Equity										7/1/2022				22,222		21,141		84,919	0.02	%
Total																	$	9,579,907	$	10,061,346	2.70	%
Anne Lewis Strategies, LLC	(9)													Washington, DC
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.00	%	2.00	%	10.30	%			3/5/2021	5/9/2028	Services: Business	$	9,038,404		8,996,650		9,038,404	2.42	%
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.00	%	2.00	%	10.30	%			4/15/2022	5/9/2028			2,820,612		2,804,691		2,820,612	0.76	%
SG AL Investment, LLC Common Units	(6)	Equity										3/5/2021				1,000		390,053		3,374,747	0.91	%
SG AL Investment, LLC Common-A Units		Equity										12/22/2023				239		492,905		985,826	0.26	%
Total																	$	12,684,299	$	16,219,589	4.35	%
APE Holdings, LLC														Deer Park, TX
Class A Units		Equity										9/5/2014		Chemicals, Plastics, & Rubber		375,000		375,000		12,651	0.00	%
Total																	$	375,000	$	12,651	0.00	%
Atmosphere Aggregator Holdings II, L.P.														Atlanta, GA
Common Units	(6)	Equity										1/26/2016		Services: Business		254,250		-		2,352,178	0.63	%
Stratose Aggregator Holdings, L.P. Common Units	(6)	Equity										6/30/2015				750,000		-		8,624,653	2.31	%
Total																	$	-	$	10,976,831	2.94	%
ArborWorks, LLC														Oakhurst, CA
Term Loan	(11)	First Lien	1M SOFR+	6.50	%	1.00	%	-	%	10.92	%	11/6/2023	11/6/2028	Environmental Industries	$	3,595,292		3,595,292		3,595,292	0.96	%
Revolver	(9)	First Lien		15.00	%			-	%	15.00	%	11/6/2023	11/6/2028			742,007		742,007		742,007	0.20	%
ArborWorks Intermediate Holdco, LLC Class A-1 Preferred Units		Equity										11/6/2023				16,037		3,610,847		4,781,869	1.28	%
ArborWorks Intermediate Holdco, LLC Class B-1 Preferred Units		Equity										11/6/2023				16,037		-		-	0.00	%
ArborWorks Intermediate Holdco, LLC Class A-1 Common Units		Equity										11/6/2023				1,923		-		-	0.00	%
Total																	$	7,948,146	$	9,119,168	2.44	%
Axis Portable Air, LLC	(9)													Phoenix, AZ
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	5.25	%	2.00	%	9.55	%			3/22/2022	3/22/2028	Capital Equipment	$	9,381,250		9,277,166		9,381,250	2.52	%
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	5.25	%	2.00	%	9.55	%			4/17/2023	3/22/2028			1,869,940		1,844,637		1,869,940	0.50	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	5.25	%	2.00	%	9.55	%			3/22/2022	3/22/2028			98,750		98,160		98,750	0.03	%
Axis Air Parent, LLC Preferred Units		Equity										3/22/2022				4,436		443,636		1,804,491	0.48	%
Total																	$	11,663,599	$	13,154,431	3.53	%
Baker Manufacturing Company, LLC														Evansville, IN
BSC Blue Water Holdings, LLC Series A Units (SBIC II)	(5)	Equity										7/5/2022		Capital Equipment		743,770		743,770		994,182	0.27	%
Total																	$	743,770	$	994,182	0.27	%
Bart & Associates, LLC	(9)													McLean, VA
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	5.00	%	1.00	%	9.30	%			8/16/2024	8/16/2030	High Tech Industries	$	8,898,009		8,753,435		8,853,519	2.38	%
Revolver	(11)	First Lien	3M SOFR+	5.00	%	1.00	%	9.30	%			8/16/2024	8/16/2030			209,335		209,335		208,288	0.06	%
B&A Partners Holding, LLC Series A Preferred Units		Equity										8/16/2024				418,671		418,671		436,897	0.12	%
Total																	$	9,381,441	$	9,498,704	2.56	%
BL Products Parent, L.P.														Houston, TX
Class A Units		Equity										2/1/2022		Capital Equipment		879,060		983,608		1,366,995	0.37	%
Total																	$	983,608	$	1,366,995	0.37	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

March 31, 2025

(unaudited)


														Principal						% of
											Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK	Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
Café Valley, Inc.													Phoenix, AZ
Term Loan	(11)	First Lien	3M SOFR+	7.24	%	2.00	%	11.54	%		8/28/2019	8/28/2026	Beverage & Food	$	15,328,571		15,328,571		15,328,571	4.12	%
CF Topco LLC Units		Equity									8/28/2019				9,160		916,015		1,927,649	0.52	%
Total																$	16,244,586	$	17,256,220	4.64	%
Camp Profiles LLC	(9)												Boston, MA
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	5.25	%	1.00	%	9.70	%		9/3/2021	9/3/2026	Media: Advertising, Printing & Publishing	$	9,891,250		9,824,901		9,891,250	2.65	%
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	5.25	%	1.00	%	9.70	%		12/3/2024	9/3/2026			2,244,375		2,216,349		2,244,375	0.60	%
CIVC VI-A 829 Blocker, LLC Units		Equity									9/3/2021				250		250,000		783,881	0.21	%
Total																$	12,291,250	$	12,919,506	3.46	%
Carolinas Buyer, Inc.	(9)												Charlotte, NC
Term Loan	(4)(11)	First Lien	3M SOFR+	5.25	%	1.50	%	9.55	%		12/20/2024	12/20/2030	Beverage & Food	$	6,796,831		6,681,555		6,694,879	1.80	%
Carolinas Holdings, L.P. Class A Units		Equity									12/20/2024				466		465,637		434,981	0.12	%
Total																$	7,147,192	$	7,129,860	1.92	%
CEATI International Inc.	(7)(9)												Montreal, Canada
Term Loan	(11)	First Lien	3M SOFR+	6.00	%	1.00	%	10.30	%		2/19/2021	12/31/2027	Services: Business	$	8,417,994		8,381,912		8,375,904	2.25	%
Term Loan	(11)	First Lien	3M SOFR+	6.00	%	1.00	%	10.30	%		12/20/2024	12/31/2027			3,192,000		3,165,807		3,176,040	0.85	%
CEATI Holdings, LP Class A Units		Equity									2/19/2021				250,000		132,919		249,497	0.07	%
Total																$	11,680,638	$	11,801,441	3.17	%
Cerebro Buyer, LLC	(9)												Columbia, SC
Term Loan	(11)	First Lien	1M SOFR+	5.00	%	1.00	%	9.32	%		3/15/2023	3/15/2029	Healthcare & Pharmaceuticals	$	4,526,683		4,443,275		4,526,683	1.21	%
Cerebro Holdings Partnership, L.P. Series A Partner Interests		Equity									3/15/2023				62,961		62,961		74,030	0.02	%
Cerebro Holdings Partnership, L.P. Series B Partner Interests		Equity									3/15/2023				341,091		333,925		401,057	0.11	%
Total																$	4,840,161	$	5,001,770	1.34	%
CF Arch Holdings LLC													Houston, TX
Class A Units	(6)	Equity									8/10/2022		Services: Business		100,000		88,511		156,304	0.04	%
Total																$	88,511	$	156,304	0.04	%
CF512, Inc.	(9)												Blue Bell, PA
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.00	%	1.00	%	10.51	%		9/1/2021	9/1/2026	Media: Advertising, Printing & Publishing	$	13,325,602		13,236,216		13,192,346	3.55	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.00	%	1.00	%	10.49	%		9/1/2021	9/1/2026			2,877,566		2,867,536		2,848,790	0.76	%
Revolver	(11)	First Lien	1M SOFR+	6.00	%	1.00	%	10.34	%		9/1/2021	9/1/2026			9,000		9,000		8,910	0.00	%
StellPen Holdings, LLC Membership Interests		Equity									9/1/2021				220,930		220,930		153,219	0.04	%
Total																$	16,333,682	$	16,203,265	4.35	%
Channel Partners Intermediateco, LLC													Tampa Bay, FL
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	7.00	%	2.00	%	11.55	%		2/24/2022	2/7/2027	Retail	$	13,084,185		13,027,991		13,018,764	3.50	%
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	7.00	%	2.00	%	11.55	%		3/27/2023	2/7/2027			1,668,382		1,659,289		1,660,040	0.45	%
Revolver	(11)	First Lien	3M SOFR+	7.00	%	2.00	%	11.54	%		2/24/2022	2/7/2027			100,000		100,000		99,500	0.03	%
Total																$	14,787,280	$	14,778,304	3.98	%
CompleteCase, LLC	(9)												Seattle, WA
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.95	%		12/21/2020	12/21/2025	Services: Consumer	$	6,561,535		6,538,372		6,561,535	1.76	%
CompleteCase Holdings, Inc. Class A Common Stock (SBIC II)	(5)	Equity									12/21/2020				417		5		-	0.00	%
CompleteCase Holdings, Inc. Series A Preferred Stock (SBIC II)	(5)	Equity									12/21/2020				522		521,734		184,786	0.05	%
CompleteCase Holdings, Inc. Class A Common Stock		Equity									4/27/2023				89		1		-	0.00	%
CompleteCase Holdings, Inc. Series C Preferred Stock		Equity									4/27/2023				111		111,408		111,409	0.03	%
Total																$	7,171,520	$	6,857,730	1.84	%
Compost 360 Acquisition, LLC	(9)												Tampa, FL
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.80	%		8/2/2023	8/2/2028	Environmental Industries	$	9,451,174		9,276,577		9,167,639	2.46	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.80	%		8/2/2023	8/2/2028			1,037,841		1,025,512		1,006,706	0.27	%
Revolver	(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.80	%		8/2/2023	8/2/2028			80,167		80,167		77,762	0.02	%
Compost 360 Investments, LLC Class A Units		Equity									8/2/2023				3,124		300,041		203,452	0.05	%
Total																$	10,682,297	$	10,455,559	2.80	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

March 31, 2025

(unaudited)


															Principal						% of
												Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK		Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
COPILOT Provider Support Services, LLC	(9)													Maitland, FL
Term Loan	(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.95	%			11/22/2022	11/22/2027	Healthcare & Pharmaceuticals	$	4,875,000		4,816,160		4,850,625	1.30	%
Revolver	(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.95	%			11/22/2022	11/22/2027			28,333		28,333		28,191	0.01	%
QHP Project Captivate Blocker, Inc. Common Stock		Equity										11/22/2022				4		285,714		230,124	0.06	%
Total																	$	5,130,207	$	5,108,940	1.37	%
Craftable Intermediate II Inc.	(9)													Dallas, TX
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	5.75	%	1.50	%	10.05	%			6/30/2023	6/30/2028	High Tech Industries	$	9,957,669		9,814,897		9,957,669	2.67	%
Gauge Craftable LP Partnership Interests		Equity										6/30/2023				626,690		626,690		991,400	0.27	%
Total																	$	10,441,587	$	10,949,069	2.94	%
Curion Holdings, LLC	(9)													Chicago, IL
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.50	%	1.00	%	10.70	%	0.25	%	7/29/2022	7/29/2027	Services: Business	$	12,738,466		12,604,700		12,483,697	3.35	%
Revolver	(11)	First Lien	3M SOFR+	6.50	%	1.00	%	10.70	%	0.25	%	7/29/2022	7/29/2027			86,245		86,245		84,520	0.02	%
SP CS Holdings LLC Class A Units		Equity										7/29/2022				739,999		739,999		597,216	0.16	%
Total																	$	13,430,944	$	13,165,433	3.53	%
DTE Holding Company, LLC														Roselle, IL
Class A-2 Units		Equity										4/13/2018		Energy: Oil & Gas		776,316		466,204		-	0.00	%
Class AA Units		Equity										4/13/2018				723,684		723,684		-	0.00	%
Total																	$	1,189,888	$	-	0.00	%
EHI Buyer, Inc.														Grand Prarie, TX
EHI Group Holdings, L.P. Class A Units		Equity										7/31/2023		Environmental Industries		618		430,653		1,120,686	0.30	%
Total																	$	430,653	$	1,120,686	0.30	%
Elliott Aviation, LLC														Moline, IL
Term Loan	(11)	First Lien	1M SOFR+	8.00	%	2.00	%	-	%	12.32	%	1/31/2020	12/31/2025	Aerospace & Defense	$	8,827,723		8,827,723		8,562,891	2.30	%
Term Loan		Unsecured		15.00	%	-	%	-	%	15.00	%	10/26/2023	12/31/2026			68,293		68,293		-	0.00	%
Revolver A	(11)	First Lien	1M SOFR+	8.00	%	2.00	%	-	%	12.32	%	1/31/2020	12/31/2025			1,458,531		1,458,531		1,414,775	0.38	%
Revolver B	(11)	First Lien	1M SOFR+	8.00	%	2.00	%	-	%	12.32	%	3/1/2023	12/31/2025			686,822		686,822		666,217	0.18	%
Revolver C (Priority)	(11)	First Lien	1M SOFR+	8.00	%	2.00	%	-	%	12.32	%	3/7/2025	12/31/2025			937,784		937,784		937,784	0.25	%
SP EA Holdings LLC Class A Units		Equity										1/31/2020				1,048,896		901,489		-	0.00	%
Total																	$	12,880,642	$	11,581,667	3.11	%
Environmental Remedies, LLC	(9)													Hayward, CA
Term Loan	(11)	First Lien	3M SOFR+	5.25	%	1.50	%	9.55	%			1/15/2025	1/15/2030	Services: Business	$	7,330,762		7,189,747		7,189,747	1.93	%
ERI Parent Holdings, LLC Class A Units		Equity										1/15/2025				163,109		163,109		163,109	0.04	%
Total																	$	7,352,856	$	7,352,856	1.97	%
EOS Fitness Holdings, LLC														Phoenix, AZ
Class A Preferred Units		Equity										12/30/2014		Hotel, Gaming, & Leisure		118		-		-	0.00	%
Class B Common Units		Equity										12/30/2014				3,017		-		1,017,174	0.27	%
Total																	$	-	$	1,017,174	0.27	%
Equine Network, LLC														Boulder, CO
Term A Loan (SBIC)	(4)(11)	First Lien	1M SOFR+	6.50	%	1.00	%	10.94	%			5/22/2023	5/22/2028	Hotel, Gaming, & Leisure	$	7,002,425		6,872,021		7,002,425	1.88	%
Revolver	(11)	First Lien	1M SOFR+	6.50	%	1.00	%	10.94	%			5/22/2023	5/22/2028			166,667		166,667		166,667	0.04	%
Delayed Draw Term Loan	(11)	First Lien	1M SOFR+	6.50	%	1.00	%	10.94	%			5/22/2023	5/22/2028			98,902		98,902		98,902	0.03	%
Total																	$	7,137,590	$	7,267,994	1.95	%
Eskola LLC														Morristown, TN
Last Out Term Loan	(10)(12)	First Lien	3M SOFR+	5.00	%	1.50	%	9.91	%			12/19/2024	12/19/2029	Construction & Building	$	7,539,452		7,412,612		7,350,966	1.97	%
Last Out Delayed Draw Term Loan	(10)(12)	First Lien	3M SOFR+	5.00	%	1.50	%	9.91	%			12/19/2024	12/19/2029			2,791,787		2,771,664		2,721,992	0.73	%
Eskola Holdings, LLC Class A Units	(6)	Equity										12/19/2024				314		893,747		857,622	0.23	%
Total																	$	11,078,023	$	10,930,580	2.93	%
evolv Consulting, LLC	(9)													Dallas, TX
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.81	%			12/7/2023	12/7/2028	Services: Business	$	9,875,000		9,717,362		9,825,625	2.64	%
evolv Holdco, LLC Preferred Units		Equity										12/7/2023				473,485		473,485		498,613	0.13	%
Total																	$	10,190,847	$	10,324,238	2.77	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

March 31, 2025

(unaudited)


															Principal						% of
												Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK		Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
hV GS Acquisition, LP Class A Interests														Anaheim, CA
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.75	%	1.50	%	11.20	%			1/23/2023	1/24/2028	Consumer Goods: Durable	$	12,346,263		12,149,142		12,284,532	3.30	%
Revolver	(9)	First Lien	1M SOFR+	6.75	%	1.50	%	11.17	%			1/23/2023	1/24/2028		$	52,000		52,000		51,740	0.01	%
KEJ Holdings LP Class A Units		Equity										1/23/2023				873,333		873,333		1,043,068	0.28	%
Total																	$	13,074,475	$	13,379,340	3.59	%
Exacta Land Surveyors, LLC	(20)													Cleveland, OH
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.75	%	1.50	%	10.20	%	1.00	%	2/8/2019	7/31/2025	Services: Business	$	16,311,416		16,311,416		15,414,289	4.15	%
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.75	%	1.50	%	10.20	%	1.00	%	7/15/2022	7/31/2025			991,925		991,925		937,369	0.25	%
Term Loan		Unsecured								15.00	%	4/22/2024	6/30/2026			100,211		100,211		89,689	0.02	%
SP ELS Holdings LLC Class A Units		Equity										2/8/2019				1,338,661		1,124,414		259,460	0.07	%
Total																	$	18,527,966	$	16,700,807	4.49	%
Exigo, LLC	(9)													Dallas, TX
Term Loan	(11)	First Lien	1M SOFR+	6.25	%	1.00	%	10.67	%			3/16/2022	3/16/2027	Services: Business	$	8,699,328		8,641,532		8,655,831	2.33	%
Gauge Exigo Coinvest, LLC Common Units		Equity										3/16/2022				377,535		377,535		376,573	0.10	%
Total																	$	9,019,067	$	9,032,404	2.43	%
FairWave Holdings, LLC	(9)													Kansas City, MO
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.50	%	1.50	%	10.80	%			4/1/2024	4/1/2029	Beverage & Food	$	7,539,112		7,395,017		7,426,025	1.99	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.50	%	1.50	%	10.80	%			4/1/2024	4/1/2029			2,661,121		2,632,559		2,621,204	0.70	%
GRC Java Holdings, LLC Class A Units		Equity										4/1/2024				2,856		285,572		475,310	0.13	%
Total																	$	10,313,148	$	10,522,539	2.82	%
FiscalNote Boards LLC	(7)(9)													Toronto, Canada
Term Loan	(11)	First Lien	1M SOFR+	5.50	%	1.00	%	9.82	%			3/11/2024	3/12/2029	Services: Business	$	4,122,462		4,053,698		4,040,013	1.08	%
FCP-Connect Holdings LLC Class A Common Shares		Equity										5/28/2024				284		-		-	0.00	%
FCP-Connect Holdings LLC Series A Preferred Shares		Equity										5/28/2024				284		190,382		183,461	0.05	%
Total																	$	4,244,080	$	4,223,474	1.13	%
Florachem Corporation	(9)													Jacksonville, FL
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.50	%	1.00	%	10.95	%			4/29/2022	4/29/2028	Chemicals, Plastics, & Rubber	$	9,725,000		9,612,989		9,725,000	2.61	%
Term Loan	(11)	First Lien	3M SOFR+	6.50	%	1.00	%	10.95	%			2/10/2025	4/29/2028			877,716		860,910		877,716	0.24	%
Revolver	(11)	First Lien	3M SOFR+	6.50	%	1.00	%	10.95	%			4/29/2022	4/29/2028			89,333		89,333		89,333	0.02	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.50	%	1.00	%	10.95	%			4/29/2022	4/29/2028			53,078		53,078		53,078	0.01	%
SK FC Holdings, L.P. Class A Units		Equity										4/29/2022				362		362,434		514,107	0.14	%
Total																	$	10,978,744	$	11,259,234	3.02	%
General LED OPCO, LLC														San Antonio, TX
Term Loan	(11)	Second Lien	3M SOFR+	9.00	%	1.50	%	13.40	%			5/1/2018	3/31/2026	Services: Business	$	4,500,000		4,487,138		4,410,000	1.18	%
Total																	$	4,487,138	$	4,410,000	1.18	%
Green Intermediateco II, Inc.														Irvine, CA
Term Loan	(11)	First Lien	3M SOFR+	6.00	%	2.00	%	10.30	%			8/8/2023	8/8/2028	High Tech Industries	$	11,002,698		10,799,081		10,892,671	2.92	%
Term Loan	(11)	First Lien	1M SOFR+	6.00	%	2.00	%	10.32	%			11/6/2024	8/8/2028			1,293,500		1,269,933		1,280,565	0.34	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.00	%	2.00	%	10.30	%			8/8/2023	8/8/2028			403,026		399,166		398,996	0.11	%
Green Topco Holdings, LLC Class A Units	(6)	Equity										8/8/2023				271,401		202,628		346,391	0.09	%
Total																	$	12,670,808	$	12,918,623	3.46	%
GS HVAM Intermediate, LLC	(9)													Carlsbad, CA
Term Loan	(11)	First Lien	3M SOFR+	6.50	%	1.00	%	10.95	%			10/18/2019	2/28/2026	Beverage & Food	$	12,220,404		12,213,424		12,220,404	3.28	%
Revolver	(11)	First Lien	3M SOFR+	6.50	%	1.00	%	10.94	%			10/18/2019	2/28/2026			1,617,424		1,617,424		1,617,424	0.43	%
HV GS Acquisition, LP Class A Interests		Equity										10/2/2019				2,144		563,209		4,898,343	1.31	%
Total																	$	14,394,057	$	18,736,171	5.02	%
Guidant Corp.	(9)													Erie, PA
Term Loan	(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.80	%			3/11/2024	3/12/2029	Energy: Oil & Gas	$	9,928,927		9,637,930		9,928,927	2.66	%
Titan Meter Topco LP Class A Units		Equity										3/11/2024				515,578		515,578		630,533	0.17	%
Total																	$	10,153,508	$	10,559,460	2.83	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

March 31, 2025

(unaudited)


															Principal						% of
												Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK		Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
Heartland Business Systems, LLC														Little Chute, WI
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.70	%			8/26/2022	8/26/2027	Services: Business	$	9,750,000		9,643,878		9,750,000	2.62	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.70	%			8/26/2022	8/26/2027			49,000		48,700		49,000	0.01	%
AMCO HBS Holdings, LP Class A Units		Equity										8/26/2022				2,861		219,823		486,977	0.13	%
Total																	$	9,912,401	$	10,285,977	2.76	%
Husk AcquireCo Inc.														Vaughan, Canada
Term Loan	(11)	First Lien	6M SOFR+	5.75	%	1.50	%	10.16	%			11/14/2024	11/15/2029	Beverage & Food	$	5,303,932		5,229,418		5,250,893	1.41	%
SK Spectra Holdings LP Class A Units		Equity										11/15/2024				298		297,765		311,681	0.08	%
Total																	$	5,527,183	$	5,562,574	1.49	%
HV Watterson Holdings, LLC	(9)													Schaumburg, IL
Term Loan		First Lien		12.00	%	-	%	8.00	%	4.00	%	12/17/2021	12/17/2026	Services: Business	$	13,506,562		13,403,567		13,236,431	3.55	%
Revolver		First Lien		12.00	%	-	%	8.00	%	4.00	%	12/17/2021	12/17/2026			98,974		98,974		96,995	0.03	%
Delayed Draw Term Loan		First Lien		12.00	%	-	%	8.00	%	4.00	%	12/17/2021	12/17/2026			328,109		326,663		321,547	0.09	%
HV Watterson Parent, LLC Class A Units		Equity										12/17/2021				1,632		1,631,591		135,186	0.04	%
Total																	$	15,460,795	$	13,790,159	3.71	%
I2P Holdings, LLC														Cleveland, OH
Series A Preferred Units		Equity										1/31/2018		Services: Business		750,000		-		3,423,789	0.92	%
Total																	$	-	$	3,423,789	0.92	%
Identity Theft Guard Solutions, Inc.	(9)													Portland, OR
Term Loan	(11)	First Lien	3M SOFR+	5.50	%	1.50	%	9.81	%			2/28/2025	2/28/2030	Services: Business	$	8,722,887		8,550,663		8,550,663	2.29	%
IDX Parent, LLC Class A-2 Units		Equity										2/28/2025				352,915		352,915		352,915	0.09	%
Total																	$	8,903,578	$	8,903,578	2.38	%
Impact Home Services LLC	(9)													Tampa, FL
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.80	%			4/28/2023	4/28/2028	Services: Consumer	$	5,833,003		5,732,923		5,599,683	1.50	%
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.80	%			10/11/2023	4/28/2028			531,622		521,871		510,357	0.14	%
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.80	%			6/30/2023	4/28/2028			265,137		260,466		254,532	0.07	%
Revolver	(11)(17)	First Lien	3M SOFR+	6.50	%	2.00	%	10.80	%			4/28/2023	4/28/2028			82,500		82,500		79,200	0.02	%
Impact Holdings Georgia LLC Class A Units		Equity										4/28/2023				375		375,156		-	0.00	%
Impact Holdings Georgia LLC Class A-1 Units		Equity										1/31/2024				38		37,962		20,934	0.01	%
Total																	$	7,010,878	$	6,464,706	1.74	%
Infolinks Media Buyco, LLC														Ridgewood, NJ
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	5.50	%	1.00	%	9.80	%			11/1/2021	11/1/2026	Media: Advertising, Printing & Publishing	$	7,168,033		7,114,933		7,168,033	1.92	%
Term Loan	(11)	First Lien	3M SOFR+	5.50	%	1.00	%	9.80	%			6/6/2024	11/1/2026			2,440,641		2,415,089		2,440,641	0.65	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	5.50	%	1.00	%	9.80	%			11/1/2021	11/1/2026			1,459,013		1,451,187		1,459,013	0.39	%
Tower Arch Infolinks Media, LP LP Interests	(15)	Equity										10/28/2021				456,577		209,942		844,195	0.23	%
Total																	$	11,191,151	$	11,911,882	3.19	%
Informativ, LLC	(9)													Fresno, CA
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	5.50	%	1.00	%	9.95	%			7/30/2021	7/30/2026	High Tech Industries	$	8,373,089		8,322,466		8,331,224	2.23	%
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	5.50	%	1.00	%	9.95	%			3/31/2022	7/30/2026			6,312,355		6,269,082		6,280,793	1.68	%
Credit Connection Holdings, LLC Series A Units	(6)	Equity										7/30/2021				804,384		682,150		1,192,404	0.32	%
Total																	$	15,273,698	$	15,804,421	4.23	%
Inoapps Bidco, LLC	(9)													Houston, TX
Term Loan B	(11)	First Lien	3M SONIA+	5.75	%	1.00	%	10.35	%			2/15/2022	2/15/2027	High Tech Industries	£	9,725,000	$	13,074,709	$	12,446,755	3.34	%
Revolver	(11)	First Lien	1M SOFR+	5.75	%	1.00	%	10.19	%			2/15/2022	2/15/2027			82,000		82,000		81,590	0.02	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	5.75	%	1.00	%	10.30	%			2/15/2022	2/15/2027			81,250		80,870		80,844	0.02	%
Inoapps Holdings, LLC Series A-1 Preferred Units		Equity										2/15/2022				739,844		783,756		1,028,173	0.28	%
Total																	$	14,021,335	$	13,637,362	3.66	%
iNovex Information Systems Incorporated	(9)													Columbia, MD
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	5.25	%	1.00	%	9.55	%			12/17/2024	12/17/2030	Services: Business	$	7,503,378		7,394,301		7,353,310	1.97	%
Revolver	(11)	First Lien	1M SOFR+	5.25	%	1.00	%	9.57	%			12/17/2024	12/17/2030			42,000		42,000		41,160	0.01	%
Total																	$	7,436,301	$	7,394,470	1.98	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

March 31, 2025

(unaudited)


															Principal						% of
												Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK		Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
Invincible Boat Company LLC														Opa Locka, FL
Term Loan	(11)	First Lien	1M SOFR+	7.50	%	1.50	%	11.97	%			8/28/2019	12/31/2026	Consumer Goods: Durable	$	5,304,170		5,295,053		4,959,399	1.33	%
Term Loan (SBIC II)	(5)(11)	First Lien	1M SOFR+	7.50	%	1.50	%	11.97	%			8/28/2019	12/31/2026			4,896,157		4,887,650		4,577,907	1.23	%
Term Loan (SBIC II)	(5)(11)	First Lien	1M SOFR+	7.50	%	1.50	%	11.97	%			6/1/2021	12/31/2026			1,089,128		1,086,627		1,018,335	0.27	%
Revolver	(11)	First Lien	1M SOFR+	7.50	%	1.50	%	11.97	%			8/28/2019	12/31/2026			1,063,830		1,063,830		994,681	0.27	%
Warbird Parent Holdco, LLC Class A Units		Equity										8/28/2019				1,362,575		1,299,691		202,169	0.05	%
Total																	$	13,632,851	$	11,752,491	3.15	%
J.R. Watkins, LLC														San Francisco
Term Loan (SBIC)	(4)(19)	First Lien		12.00	%	-	%	-	%	-	%	12/22/2017	5/3/2026	Consumer Goods: Non-Durable	$	13,597,208		13,597,208		2,855,414	0.77	%
Priority Revolver (SBIC)	(4)(9)(19)	First Lien		5.00	%	-	%	-	%	-	%	5/3/2024	5/3/2026			1,125,000		1,125,000		2,250,000	0.60	%
J.R. Watkins Holdings, Inc. Class A Preferred Stock		Equity										12/22/2017				1,133		1,132,576		-	0.00	%
Total																	$	15,854,784	$	5,105,414	1.37	%
Ledge Lounger, Inc.														Katy, TX
Term Loan A (SBIC)	(4)(11)	First Lien	3M SOFR+	7.50	%	1.00	%	10.95	%	1.00	%	11/9/2021	11/9/2027	Consumer Goods: Durable	$	7,439,279		7,384,292		6,918,529	1.86	%
Revolver	(11)	First Lien	3M SOFR+	7.50	%	1.00	%	10.95	%	1.00	%	11/9/2021	11/9/2027			83,654		83,654		77,798	0.02	%
SP L2 Holdings LLC Class A Units (SBIC)	(4)	Equity										11/9/2021				375,000		375,000		-	0.00	%
SP L2 Holdings LLC Class C Units (SBIC)	(4)	Equity										10/9/2024				140,834		34,504		-	0.00	%
Total																	$	7,877,450	$	6,996,327	1.88	%
Lightning Intermediate II, LLC	(9)													Jacksonville, FL
Term Loan (SBIC)	(4)(11)	First Lien	6M SOFR+	6.50	%	1.00	%	11.03	%			6/6/2022	6/6/2027	Consumer Goods: Non-Durable	$	12,424,809		12,301,411		12,362,685	3.32	%
Gauge Vimergy Coinvest, LLC Units		Equity										6/6/2022				399		391,274		273,026	0.07	%
Total																	$	12,692,685	$	12,635,711	3.39	%
Luxium Solutions, LLC														Deerfield Beach, OH
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.55	%			5/10/2024	12/1/2027	High Tech Industries	$	8,231,527		8,134,020		8,190,369	2.20	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.55	%			5/10/2024	12/1/2027			1,191,248		1,183,931		1,185,292	0.32	%
Total																	$	9,317,951	$	9,375,661	2.52	%
MacKenzie-Childs Acquisition, Inc.	(9)													Aurora, NY
Term Loan	(11)	First Lien	3M SOFR+	5.50	%	1.00	%	9.95	%			9/2/2022	9/2/2027	Consumer Goods: Durable	$	88,553		87,820		87,667	0.02	%
Revolver	(11)	First Lien	PRIME+	4.50	%	1.00	%	12.00	%			9/2/2022	9/2/2027	Consumer Goods: Durable	$	20,000		20,000		19,800	0.01	%
MacKenzie-Childs Investment, LP Partnership Interests		Equity										9/2/2022				100,000		100,000		159,642	0.04	%
Total																	$	207,820	$	267,109	0.07	%
Madison Logic Holdings, Inc.	(9)													New York, NY
Term Loan	(11)	First Lien	1M SOFR+	7.00	%	1.00	%	11.32	%			12/30/2022	12/30/2028	Media: Advertising, Printing & Publishing	$	3,591,331		3,524,763		3,447,678	0.92	%
Term Loan	(11)	First Lien	1M SOFR+	7.50	%	1.00	%			11.84	%	12/30/2022	12/30/2028			897,833		881,191		861,920	0.23	%
BC Partners Glengarry Co-Investment LP Class 1 Interests		Equity										7/7/2023				394,767		394,767		188,208	0.05	%
Total																	$	4,800,721	$	4,497,806	1.21	%
MBH Management LLC	(9)													Washington, DC
Term Loan (SBIC II)	(5)(11)	First Lien	1M SOFR+	5.25	%	1.50	%	9.57	%			11/15/2024	11/15/2029	Healthcare & Pharmaceuticals	$	9,453,051		9,276,032		9,263,990	2.49	%
MBH Parent, LLC Common Units		Equity										11/15/2024				646,944		646,944		693,898	0.19	%
Total																	$	9,922,976	$	9,957,888	2.68	%
MedLearning Group, LLC	(9)													New York, NY
Term Loan	(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.55	%			3/26/2024	12/30/2027	Healthcare & Pharmaceuticals	$	4,296,048		4,229,103		4,231,607	1.14	%
Term Loan	(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.55	%			3/26/2024	12/30/2027			2,518,053		2,478,814		2,480,282	0.67	%
Term Loan	(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.55	%			3/26/2024	12/30/2027			2,056,122		2,024,167		2,025,280	0.54	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.55	%			3/26/2024	12/30/2027			487,815		483,273		480,498	0.13	%
Total																	$	9,215,357	$	9,217,667	2.48	%
Michelli, LLC	(9)													New Orleans, LA
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	5.75	%	2.00	%	10.05	%			12/21/2023	12/21/2028	Capital Equipment	$	4,937,500		4,858,354		4,888,125	1.31	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	5.75	%	2.00	%	10.05	%			12/21/2023	12/21/2028			3,866,778		3,832,851		3,828,110	1.03	%
SP MWM Holdco LLC Class A Units		Equity										12/21/2023				509,215		509,215		502,469	0.13	%
Total																	$	9,200,420	$	9,218,704	2.47	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

March 31, 2025

(unaudited)


															Principal						% of
												Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK		Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
Microbe Formulas LLC	(9)													Meridian, ID
Term Loan (SBIC II)	(5)(11)	First Lien	1M SOFR+	5.75	%	1.00	%	10.17	%			4/4/2022	4/3/2028	Consumer Goods: Non-Durable	$	7,575,773		7,533,118		7,575,773	2.03	%
Term Loan (SBIC II)	(5)(11)	First Lien	1M SOFR+	5.75	%	1.00	%	10.17	%			11/20/2024	4/3/2028			4,243,756		4,224,286		4,243,756	1.14	%
Total																	$	11,757,404	$	11,819,529	3.17	%
Mobotrex Acquisition, LLC	(9)													Davenport, IA
Term Loan	(11)	First Lien	3M SOFR+	5.00	%	1.00	%	9.31	%			2/28/2025	6/7/2030	Wholesale	$	5,137,070		5,060,939		5,060,939	1.36	%
Total																	$	5,060,939	$	5,060,939	1.36	%
MOM Enterprises, LLC	(9)													Richmond, CA
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.48	%	2.00	%	10.78	%			5/19/2021	5/19/2026	Consumer Goods: Non-Durable	$	15,849,167		15,763,928		15,769,922	4.24	%
MBliss SPC Holdings, LLC Units		Equity										5/19/2021				933,333		933,333		918,735	0.25	%
Total																	$	16,697,261	$	16,688,657	4.49	%
Monarch Behavioral Therapy, LLC	(9)													Addison, TX
Term Loan (SBIC)	(4)(11)	First Lien	1M SOFR+	5.00	%	1.00	%	9.32	%			6/6/2024	6/6/2030	Healthcare & Pharmaceuticals	$	6,713,900		6,593,262		6,646,761	1.78	%
Revolver	(11)	First Lien	1M SOFR+	5.00	%	1.00	%	9.33	%			6/6/2024	6/6/2030			397,495		397,495		393,520	0.11	%
Delayed Draw Term Loan	(11)	First Lien	1M SOFR+	5.00	%	1.00	%	9.32	%			6/6/2024	6/6/2030			605,794		599,968		599,736	0.16	%
BI Investors, LLC Class A Units		Equity										6/6/2024				4,286		424,738		430,788	0.12	%
Total																	$	8,015,463	$	8,070,805	2.17	%
Monitorus Holding, LLC	(7)													London, UK
Term Loan	(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.81	%			5/24/2022	5/24/2027	Media: Diversified & Production	$	106,248		105,762		105,186	0.03	%
Revolver	(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.81	%			5/24/2022	5/24/2027		€	106,498		115,781		114,623	0.03	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.81	%			5/24/2022	5/24/2027		€	106,248		106,985		105,915	0.03	%
Sapphire Aggregator S.a r.l. Convertible Bonds	(14)	Unsecured		7.80	%	-	%	-	%	7.80	%	3/1/2024	6/30/2025		€	13,223		14,357		14,160	0.00	%
Sapphire Aggregator S.a r.l. Convertible Bonds	(14)	Unsecured		8.00	%	-	%	-	%	8.00	%	9/30/2024	12/21/2025		€	11,629		13,002		12,453	0.00	%
Sapphire Aggregator S.a r.l. Convertible Bonds	(14)	Unsecured		8.00	%	-	%	-	%	8.00	%	1/31/2025	3/31/2026		€	8,977		9,454		9,613	0.00	%
Sapphire Aggregator S.a r.l. Class A Shares		Equity										9/1/2022				557,689		11,156		10,875	0.00	%
Sapphire Aggregator S.a r.l. Class B Shares		Equity										9/1/2022				557,682		11,156		10,875	0.00	%
Sapphire Aggregator S.a r.l. Class C Shares		Equity										9/1/2022				557,682		11,156		10,875	0.00	%
Sapphire Aggregator S.a r.l. Class D Shares		Equity										9/1/2022				557,682		11,156		10,875	0.00	%
Sapphire Aggregator S.a r.l. Class E Shares		Equity										9/1/2022				557,682		11,156		10,875	0.00	%
Sapphire Aggregator S.a r.l. Class F Shares		Equity										9/1/2022				557,682		11,156		10,875	0.00	%
Sapphire Aggregator S.a r.l. Class G Shares		Equity										9/1/2022				557,682		11,156		10,875	0.00	%
Sapphire Aggregator S.a r.l. Class H Shares		Equity										9/1/2022				557,682		11,156		10,875	0.00	%
Sapphire Aggregator S.a r.l. Class I Shares		Equity										9/1/2022				557,682		11,156		10,875	0.00	%
Sapphire Aggregator S.a r.l. Shares		Equity										3/31/2025				1,229,834		6,651		22,261	0.01	%
Total																	$	472,396	$	482,086	0.10	%
Morgan Electrical Group Intermediate Holdings, Inc.	(9)													Freemont, CA
Term Loan	(11)	First Lien	1M SOFR+	6.25	%	1.50	%	10.57	%			8/3/2023	8/3/2029	Construction & Building	$	4,383,946		4,305,605		4,340,107	1.16	%
Delayed Draw Term Loan	(11)	First Lien	1M SOFR+	6.25	%	1.50	%	10.57	%			8/3/2023	8/3/2029			1,701,307		1,685,364		1,684,294	0.45	%
Morgan Electrical Group Holdings, LLC Series A-2 Preferred Units		Equity										8/3/2023				380		380,330		279,018	0.07	%
Total																	$	6,371,299	$	6,303,419	1.68	%
Naumann/Hobbs Material Handling Corporation II, Inc.														Phoenix, AZ
Term Loan	(11)	First Lien	3M SOFR+	6.75	%	1.50	%	11.05	%			8/30/2019	8/30/2025	Services: Business	$	8,077,833		8,072,241		7,875,887	2.11	%
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.75	%	1.50	%	11.05	%			8/30/2019	8/30/2025			5,093,912		5,090,424		4,966,564	1.33	%
Revolver	(11)	First Lien	3M SOFR+	6.75	%	1.50	%	11.05	%			8/30/2019	8/30/2025			1,763,033		1,763,033		1,718,957	0.46	%
Naumann Hobbs Holdings, L.P. Class A-1 Units		Equity										9/29/2022				123		220,379		-	0.00	%
Naumann Hobbs Holdings, L.P. Class A-2 Units		Equity										9/29/2022				123		220,379		-	0.00	%
Naumann Hobbs Holdings, L.P. Class B Units		Equity										12/27/2024				142		142,200		622,830	0.17	%
Total																	$	15,508,656	$	15,184,238	4.07	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

March 31, 2025

(unaudited)


															Principal						% of
												Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK		Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
NINJIO, LLC	(9)													Westlake Village, CA
Term Loan	(11)	First Lien	3M SOFR+	6.25	%	1.50	%	10.55	%			10/12/2022	10/12/2027	Media: Diversified & Production	$	4,962,500		4,905,210		4,962,500	1.33	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.25	%	1.50	%	10.55	%			10/12/2022	10/12/2027			100,000		99,263		100,000	0.03	%
NINJIO Holdings, LLC Units		Equity										10/12/2022				184		313,253		350,757	0.09	%
Gauge NINJIO Blocker LLC Preferred Units		Equity										9/22/2023				14		14,470		21,616	0.01	%
Total																	$	5,332,196	$	5,434,873	1.46	%
Norplex Micarta Acquisition, Inc.														Postville, IA
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	5.25	%	1.50	%	9.54	%			10/31/2024	10/31/2029	Chemicals, Plastics, & Rubber	$	12,967,500		12,725,031		12,708,150	3.41	%
Revolver	(11)	First Lien	PRIME+	4.25	%	1.50	%	11.75	%			10/31/2024	10/31/2029		$	46,667		46,667		45,734	0.01	%
Norplex Micarta Parent, LP Preferred Units		Equity										10/31/2024				739,804		739,804		715,187	0.19	%
Total																	$	13,511,502	$	13,469,071	3.61	%
NS412, LLC														Dallas, TX
Term Loan	(11)	Second Lien	3M SOFR+	8.50	%	1.00	%	12.90	%			5/6/2019	5/6/2026	Services: Consumer	$	7,615,000		7,597,000		7,538,850	2.02	%
NS Group Holding Company, LLC Class A Units		Equity										5/6/2019				782		795,002		720,955	0.19	%
Total																	$	8,392,002	$	8,259,805	2.21	%
NuSource Financial Acquisition, Inc.														Eden Prairie, MN
Term Loan (SBIC II)	(5)	Unsecured		13.75	%	-	%	8.00	%	5.75	%	1/29/2021	1/31/2027	Services: Business		6,579,854		6,547,210		6,579,854	1.77	%
NuSource Holdings, Inc. Warrants (SBIC II)	(5)	Equity										1/29/2021				54,966		-		389,361	0.10	%
Total																	$	6,547,210	$	6,969,215	1.87	%
Onpoint Industrial Services, LLC														Deer Park, TX
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	7.00	%	1.75	%	11.30	%			11/16/2022	11/16/2027	Services: Business	$	12,351,615		12,202,124		12,351,615	3.31	%
Spearhead TopCo, LLC Class A Units		Equity										11/16/2022				606,742		606,742		1,036,035	0.28	%
Total																	$	12,808,866	$	13,387,650	3.59	%
Pacific Shoring Holdings, LLC	(9)													Santa Rosa, CA
Term Loan	(11)	First Lien	3M SOFR+	5.25	%	1.50	%	9.55	%			1/10/2025	1/10/2030	Capital Equipment	$	8,500,000		8,356,943		8,356,943	2.24	%
Revolver	(11)	First Lien	3M SOFR+	5.25	%	1.50	%	9.55	%			1/10/2025	1/10/2030			13,333		13,333		13,109	0.00	%
PSP Ultimate Holding, LP Class A Units		Equity										1/10/2025				10,606		498,491		498,491	0.13	%
Total																	$	8,868,767	$	8,868,543	2.37	%
PCP MT Aggregator Holdings, L.P.	(7)													Oak Brook, IL
Common Units		Equity										3/29/2019		Finance		825,020		119,281		5,370,188	1.44	%
Total																	$	119,281	$	5,370,188	1.44	%
PCS Software, Inc.	(9)													Shenandoah, TX
Term Loan	(11)	First Lien	3M SOFR+	6.00	%	1.50	%	10.45	%			7/1/2019	1/1/2026	Transportation & Logistics	$	13,882,311		13,882,311		13,812,899	3.71	%
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.00	%	1.50	%	10.45	%			7/1/2019	1/1/2026			1,820,631		1,820,631		1,811,528	0.49	%
Revolver	(11)	First Lien	3M SOFR+	6.00	%	1.50	%	10.45	%			7/1/2019	1/1/2026			1,318,143		1,318,143		1,311,552	0.35	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.00	%	1.50	%	10.45	%			7/1/2019	1/1/2026			960,000		960,000		955,200	0.26	%
PCS Software Parent, LLC Class A Common Units		Equity										9/16/2022				471,211		9,995		350,617	0.09	%
Total																	$	17,991,080	$	18,241,796	4.90	%
Pearl Media Holdings, LLC	(24)													Garland, TX
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.25	%	2.00	%	10.70	%			8/31/2022	8/31/2027	Media: Advertising, Printing & Publishing	$	8,657,878		8,563,646		8,528,010	2.29	%
Total																	$	8,563,646	$	8,528,010	2.29	%
Peltram Group Holdings LLC														Auburn, WA
Class A Units		Equity										12/30/2021		Construction & Building		508,516		492,499		530,415	0.14	%
Total																	$	492,499	$	530,415	0.14	%
Plus Delta Buyer LLC	(9)													Carlsbad, CA
Term Loan	(11)	First Lien	3M SOFR+	5.25	%	1.50	%	9.55	%			1/16/2025	1/16/2031	Services: Business	$	7,400,000		7,255,029		7,255,029	1.95	%
Plus Delta Parent LLC Class A Units		Equity										1/16/2025				325,765		325,764		325,765	0.09	%
Total																	$	7,580,793	$	7,580,794	2.04	%
Premiere Digital Services, Inc.	(9)													Los Angeles, CA
Term Loan	(11)	First Lien	1M SOFR+	5.25	%	1.00	%	9.57	%			11/3/2021	11/3/2026	Media: Broadcasting & Subscription	$	12,164,658		12,142,342		12,164,658	3.26	%
Premiere Digital Holdings, Inc. Common Stock		Equity										10/18/2018				5,000		-		2,246,758	0.60	%
Total																	$	12,142,342	$	14,411,416	3.86	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

March 31, 2025

(unaudited)


															Principal						% of
												Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK		Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
Red's All Natural, LLC														Franklin, TN
Term Loan (SBIC II)	(5)(10)(12)	First Lien	3M SOFR+	4.50	%	1.50	%	9.58	%			1/31/2023	1/31/2029	Beverage & Food	$	8,815,327		8,688,353		8,815,327	2.36	%
Centeotl Co-Invest B, LP Common Units		Equity										1/31/2023				710,600		710,600		701,277	0.19	%
Total																	$	9,398,953	$	9,516,604	2.55	%
RIA Advisory Borrower, LLC	(9)													Coral Gables, FL
Term Loan	(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.94	%			5/1/2023	8/2/2027	High Tech Industries	$	5,880,000		5,806,712		5,880,000	1.58	%
Revolver	(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.94	%			5/1/2023	8/2/2027			85,543		85,543		85,543	0.02	%
RIA Advisory Aggregator, LLC Class A Units		Equity										5/1/2023				104,425		165,078		213,242	0.06	%
RIA Products Aggregator, LLC Class A Units		Equity										5/1/2023				81,251		78,390		78,390	0.02	%
Total																	$	6,135,723	$	6,257,175	1.68	%
Rogers Mechanical Contractors, LLC	(9)													Atlanta, GA
Term Loan	(11)	First Lien	6M SOFR+	5.75	%	1.00	%	10.41	%			4/28/2021	9/28/2028	Construction & Building	$	8,272,652		8,228,808		8,272,652	2.22	%
Total																	$	8,228,808	$	8,272,652	2.22	%
Said Intermediate, LLC	(9)													Boston, MA
Term Loan	(11)	First Lien	1M SOFR+	5.50	%	1.00	%	9.82	%			6/13/2024	6/13/2029	Media: Advertising, Printing & Publishing	$	7,424,416		7,294,821		7,238,806	1.94	%
FCP-Said Holdings, LLC Class A Common Shares		Equity										6/13/2024				804		-		-	0.00	%
FCP-Said Holdings, LLC Series A Preferred Shares		Equity										6/13/2024				852		350,649		233,020	0.06	%
Total																	$	7,645,470	$	7,471,826	2.00	%
Sales Benchmark Index, LLC														Dallas, TX
Term Loan	(11)	First Lien	3M SOFR+	6.00	%	2.00	%	10.50	%			1/7/2020	7/7/2026	Services: Business	$	12,112,898		12,112,898		12,112,898	3.25	%
Revolver	(9)(11)	First Lien	3M SOFR+	5.00	%	2.00	%	9.50	%			1/7/2020	7/7/2026	Services: Business	$	443,820		443,820		443,820	0.12	%
SBI Holdings Investments LLC Class A Units		Equity										1/7/2020				66,573		665,730		626,457	0.17	%
Total																	$	13,222,448	$	13,183,175	3.54	%
Service Minds Company, LLC														Bradenton, FL
Term Loan	(26)	First Lien		12.50	%			-	%	-	%	2/7/2022	2/7/2028	Services: Consumer	$	5,324,759		5,270,585		2,875,370	0.77	%
Revolver	(18)(26)	First Lien		12.50	%			-	%	-	%	2/7/2022	2/7/2028			83,115		83,115		44,882	0.01	%
Priority Revolver	(18)(26)	First Lien		12.50	%			-	%	-	%	7/2/2024	2/7/2028			20,223		20,223		40,446	0.01	%
Priority Revolver	(18)(26)	First Lien		12.50	%			-	%	-	%	9/13/2024	2/7/2028			20,000		20,000		40,000	0.01	%
Priority Revolver	(18)(26)	First Lien		12.50	%			-	%	-	%	11/12/2024	2/7/2028			45,000		45,000		90,000	0.02	%
Priority Revolver	(18)(26)	First Lien		12.50	%			-	%	-	%	1/3/2025	2/7/2028			10,000		10,000		20,000	0.01	%
Priority Revolver	(18)(26)	First Lien		12.50	%			-	%	-	%	2/7/2025	2/7/2028			31,000		31,000		62,000	0.02	%
Delayed Draw Term Loan	(26)	First Lien		12.50	%			-	%	-	%	2/7/2022	2/7/2028			98,473		97,897		53,175	0.01	%
Total																	$	5,577,820	$	3,225,873	0.86	%
Simpler Trading, LLC	-9													Austin, TX
Term Loan (SBIC)	(4)	First Lien		10.00	%	-	%	-	%			12/28/2021	3/21/2030	Education	$	2,658,002		2,658,002		2,658,002	0.71	%
Simpler Trading, LLC Preferred Units (SBIC)		Equity										3/21/2025				1,657		1,656,650		1,295,056	0.35	%
Simpler Ultimate Holdings, LLC Class A Units (SBIC)		Equity										3/21/2025				281,936		281,936		-	0.00	%
Total																	$	4,596,588	$	3,953,058	1.06	%
Strategus, LLC	(9)													Englewood, CO
Term Loan	(11)	First Lien	3M SOFR+	5.25	%	1.00	%	9.55	%			1/27/2025	1/27/2031	Media: Advertising, Printing & Publishing	$	7,801,439		7,667,714		7,667,714	2.06	%
CIVIC Strategus Blocker, LLC Class A Units		Equity										1/27/2025				170		170,362		170,362	0.05	%
Total																	$	7,838,076	$	7,838,076	2.11	%
TAC LifePort Holdings, LLC														Woodland, WA
Common Units		Equity										3/1/2021		Aerospace & Defense		546,543		513,825		1,320,538	0.35	%
Total																	$	513,825	$	1,320,538	0.35	%
Teckrez, LLC	(9)													Jacksonville, FL
Term Loan	(11)	First Lien	1M SOFR+	6.75	%	2.00	%	11.17	%			5/24/2024	11/30/2028	Chemicals, Plastics, & Rubber	$	4,272,579		4,217,799		4,229,853	1.13	%
Revolver	(11)	First Lien	1M SOFR+	6.75	%	2.00	%	11.17	%			5/24/2024	11/30/2028			1,297,999		1,297,999		1,285,019	0.34	%
HH-Teckrez Parent, LP Preferred Units		Equity														90,139		90,139		119,219	0.03	%
Total																	$	5,605,937	$	5,634,091	1.50	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

March 31, 2025

(unaudited)


															Principal						% of
												Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK		Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
The Hardenbergh Group, Inc.	(9)													Livonia, MI
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.90	%			8/7/2023	8/7/2028	Healthcare & Pharmaceuticals	$	10,344,369		10,153,464		10,344,369	2.78	%
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.90	%			9/30/2024	8/7/2028			800,011		785,666		800,011	0.21	%
BV HGI Holdings, L.P. Class A Units		Equity										8/7/2023				434,504		434,504		421,291	0.11	%
Total																	$	11,373,634	$	11,565,671	3.10	%
Tiger 21, LLC	(9)													New York, NY
Term Loan	(11)	First Lien	3M SOFR+	5.00	%	1.00	%	9.30	%			12/30/2024	12/30/2030	Services: Consumer	$	11,970,000		11,738,036		11,730,600	3.15	%
Tiger 21 Blocker, Inc. Class A-3 Common Stock		Equity										12/30/2024				565		564,635		626,244	0.17	%
Total																	$	12,302,671	$	12,356,844	3.32	%
Tilley Distribution, Inc.	(9)													Baltimore, MD
Term Loan	(11)	First Lien	3M SOFR+	6.00	%	1.00	%	10.45	%			4/1/2022	12/31/2026	Chemicals, Plastics, & Rubber	$	92,366		91,776		89,133	0.02	%
Revolver	(11)	First Lien	3M SOFR+	6.00	%	1.00	%	10.45	%			4/1/2022	12/31/2026			13,043		13,043		12,586	0.00	%
Total																	$	104,819	$	101,719	0.02	%
TradePending OpCo Aggregator, LLC	(9)													Carrboro, NC
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.25	%	2.00	%	10.70	%			3/2/2021	3/2/2026	High Tech Industries	$	9,503,030		9,459,542		9,503,030	2.55	%
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.25	%	2.00	%	10.70	%			8/4/2023	3/2/2026			2,429,945		2,409,786		2,429,945	0.65	%
Revolver	(11)	First Lien	3M SOFR+	6.25	%	2.00	%	10.70	%			3/2/2021	3/2/2026			33,333		33,333		33,333	0.01	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.25	%	2.00	%	10.70	%			8/4/2023	3/2/2026			678,420		675,455		678,420	0.18	%
TradePending Holdings, LLC Series A Units		Equity										3/2/2021				908,333		947,699		1,953,910	0.52	%
TradePending Holdings, LLC Series A-1 Units		Equity										8/4/2023				132,783		260,254		390,381	0.10	%
Total																	$	13,786,069	$	14,989,019	4.01	%
TriplePoint Acquisition Holdings LLC	(9)													Columbus, OH
Term Loan	(11)	First Lien	3M SOFR+	5.25	%	1.00	%	9.55	%			5/31/2024	5/31/2029	Construction & Building	$	5,316,317		5,223,815		5,316,317	1.43	%
TriplePoint Holdco LLC Class A Units	(6)	Equity										5/31/2024				557,968		539,717		1,101,005	0.30	%
Total																	$	5,763,532	$	6,417,322	1.73	%
Unicat Catalyst Holdings, LLC	(21)													Alvin, TX
Term Loan	(11)	First Lien	1M SOFR+	6.50	%	1.00	%	10.92	%			4/27/2021	4/27/2026	Chemicals, Plastics, & Rubber	$	6,796,875		6,762,669		6,796,875	1.82	%
Unicat Catalyst, LLC Class A Units		Equity										4/27/2021				7,500		750,000		671,950	0.18	%
Unicat Catalyst, LLC Class A-1 Units		Equity										12/13/2023				701		38,683		46,663	0.01	%
Total																	$	7,551,352	$	7,515,488	2.01	%
U.S. Expediters, LLC	(9)													Stafford, TX
Term Loan	(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.75	%			12/22/2021	12/22/2026	Healthcare & Pharmaceuticals	$	14,422,855		14,309,172		13,485,369	3.62	%
Cathay Hypnos LLC Units		Equity										12/22/2021				1,737,087		1,353,155		462,118	0.12	%
Total																	$	15,662,327	$	13,947,487	3.74	%
USDTL AcquisitionCo, Inc.	(9)													Des Plaines, IL
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	5.25	%	1.50	%	9.55	%			12/9/2024	12/9/2030	Healthcare & Pharmaceuticals	$	5,985,000		5,870,133		5,865,300	1.57	%
Revolver	(11)	First Lien	3M SOFR+	5.25	%	1.50	%	9.55	%			12/9/2024	12/9/2030			8,000		8,000		7,840	0.00	%
USDTL Holdings, LLC Preferred Units		Equity										12/9/2024				110		110,000		120,523	0.03	%
Total																	$	5,988,133	$	5,993,663	1.60	%
Venbrook Buyer, LLC														Los Angeles, CA
Term Loan B (SBIC)	(4)	First Lien		12.75	%			4.25	%	8.50	%	3/13/2020	3/13/2026	Services: Business	$	14,878,862		14,828,295		14,283,708	3.83	%
Term Loan B		First Lien		12.75	%			4.25	%	8.50	%	3/13/2020	3/13/2026			169,292		168,717		162,520	0.04	%
Revolver		First Lien		12.75	%			4.25	%	8.50	%	3/13/2020	3/13/2026			2,628,434		2,628,434		2,523,297	0.68	%
Delayed Draw Term Loan		First Lien		12.75	%			4.25	%	8.50	%	3/13/2020	3/13/2026			5,073,487		5,063,467		4,870,548	1.31	%
Venbrook Holdings, LLC Convertible Term Loan	(14)	Unsecured		10.00	%	-	%	-	%	10.00	%	3/31/2022	12/20/2028			111,701		111,701		-	0.00	%
Venbrook Holdings, LLC Common Units		Equity										3/13/2020				822,758		819,262		-	0.00	%
Total																	$	23,619,876	$	21,840,073	5.86	%
WER Holdings, LLC	(9)													Sugar Hill, GA
Term Loan (SBIC)	(4)(11)	First Lien	6M SOFR+	5.50	%	1.00	%	9.95	%			4/11/2024	4/11/2030	Services: Business	$	2,683,883		2,636,718		2,630,205	0.71	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	5.50	%	1.00	%	9.79	%			4/11/2024	4/11/2030			822,320		814,423		805,874	0.22	%
Blade Landscape Investments, LLC Class A Units		Equity														1,803		180,300		190,939	0.05	%
Total																	$	3,631,441	$	3,627,018	0.98	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

March 31, 2025

(unaudited)


														Principal						% of
											Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK	Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
Whisps Holdings LP													Elgin, IL
Class A Units		Equity									4/18/2019		Beverage & Food		500,000		500,000		-	0.00	%
Class A-1 Units		Equity									3/6/2023				280,939		182,610		-	0.00	%
Total																$	682,610	$	-	0.00	%
Xanitos, Inc.	(9)												Newtown Square, PA
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.50	%	1.00	%	10.95	%		6/25/2021	6/25/2026	Healthcare & Pharmaceuticals	$	12,320,000		12,248,926		12,320,000	3.31	%
Revolver	(11)	First Lien	3M SOFR+	6.50	%	1.00	%	10.95	%		6/25/2021	6/25/2026			115,000		115,000		115,000	0.03	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.50	%	1.00	%	10.95	%		6/25/2021	6/25/2026			2,170,699		2,163,896		2,170,699	0.58	%
Pure TopCo, LLC Class A Units		Equity													442,133		1,053,478		1,490,221	0.40	%
Total																$	15,581,300	$	16,095,920	4.32	%
Total Non-control, non-affiliated investments																$	979,896,856	$	983,396,065	263.81	%
Total Investments																$	997,831,664	$	991,103,777	265.88	%
LIABILITIES IN EXCESS OF OTHER ASSETS																		$	(618,337,595)	(165.88)	%
NET ASSETS																		$	372,766,182	100.00	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

March 31, 2025

(unaudited)

(1)

See Note 1 to the consolidated financial statements contained herein for a discussion of the methodologies used to value securities in the portfolio. All investments are valued using significant unobservable inputs, which are considered level 3 under the fair value hierarchy.

(2)

Debt investments are income producing and equity securities are non-income producing, unless otherwise noted.

(3)

Par amount is presented for debt investments, while the number of shares or units owned is presented for equity investments. Par amount is denominated in U.S. Dollars (“$”) unless otherwise noted, Euro (“€”), or Great British Pound (“£”).

(4)

Investments held by the SBIC I subsidiary (as defined in Note 1 to the consolidated financial statements contained herein), which include $747,859 of cash and $237,838,625 of investments (at cost), are excluded from the obligations to the lenders of the Credit Facility (as defined in Note 9). Stellus Capital Investment Corporation’s (the “Company”) obligations to the lenders of the Credit Facility are secured by a first priority security interest in all investments and cash and cash equivalents, except for cash and investments held by the SBIC subsidiaries (as defined in Note 1).

(5)

Investments held by the SBIC II subsidiary (as defined in Note 1 to the consolidated financial statements contained herein), which include $6,594,054 of cash and $272,287,699 of investments (at cost), are excluded from the obligations to the lenders of the Credit Facility. The Company’s obligations to the lenders of the Credit Facility are secured by a first priority security interest in all investments and cash and cash equivalents, except for cash and investments held by the SBIC subsidiaries.

(6)

Security is income producing through dividends or distributions.

(7)

The investment is not a “qualifying asset” under the Investment Company Act of 1940, as amended (the "1940 Act"). The Company may not acquire any non-qualifying assets unless, at the time of the acquisition, qualifying assets represent at least 70% of the Company’s total assets. Qualifying assets represent approximately 95.3% of the Company’s total assets as of March 31, 2025.

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

March 31, 2025

(unaudited)

(8)

Represents a PIK interest security. At the option of the issuer, interest can be paid in cash or cash and PIK interest. The percentage of PIK interest shown is the maximum PIK interest that can be elected by the issuer.

(9)

March 31, 2025, the Company had the following outstanding revolver and delayed draw term loan commitments:

(10)


				Unused
		Unfunded		Commitment
Investments	Security	Commitment		Fee	Maturity
2X LLC	Revolver	$	57,500	0.50%	June 5, 2028
Ad.Net Acquisition, LLC	Revolver		444,803	0.50%	May 7, 2026
AdCellerant LLC	Revolver		875,995	0.50%	December 12, 2028
ADS Group Opco, LLC	Revolver		44,231	0.00%	December 31, 2027
AGT Robotique Inc.	Revolver		1,526,600	0.50%	June 22, 2029
American Refrigeration, LLC	Revolver		100,000	0.50%	March 31, 2028
AMII Acquisition, LLC	Revolver		500,000	0.50%	December 4, 2029
Amika OpCo LLC *	Revolver		100,000	0.50%	July 1, 2028
Anne Lewis Strategies, LLC	Revolver		50,000	0.50%	May 9, 2028
ArborWorks, LLC	Revolver		1,287,652	0.00%	November 6, 2028
Axis Portable Air LLC	Revolver		100,000	0.50%	March 22, 2028
Bart & Associates, LLC	Revolver		837,342	0.50%	August 16, 2030
Bart & Associates, LLC	Delayed Draw Term Loan		1,733,387	1.00%	August 16, 2030
Camp Profiles LLC	Revolver		100,000	0.50%	September 3, 2026
Carolinas Buyer, Inc.	Delayed Draw Term Loan		2,216,358	1.00%	December 20, 2030
Carolinas Buyer, Inc.	Revolver		100,000	0.50%	December 20, 2030
CEATI International Inc.	Revolver		100,000	0.50%	December 31, 2027
Cerebro Buyer, LLC	Delayed Draw Term Loan		1,130,707	1.00%	March 15, 2029
Cerebro Buyer, LLC	Revolver		100,000	0.50%	March 15, 2029
CF512, Inc.	Revolver		91,000	0.50%	September 1, 2026
CompleteCase, LLC	Revolver		166,667	0.50%	December 21, 2025
Compost 360 Acquisition, LLC	Revolver		19,833	0.50%	August 2, 2028
COPILOT Provider Support Services, LLC	Revolver		71,667	0.50%	November 22, 2027
Craftable Intermediate II Inc.	Revolver		100,000	0.50%	June 30, 2028
Curion Holdings, LLC	Revolver		35,499	0.50%	July 29, 2027
Environmental Remedies, LLC	Delayed Draw Term Loan		2,681,986	0.50%	January 15, 2030
Environmental Remedies, LLC	Revolver		100,000	0.50%	January 15, 2030
Eskola, LLC	Delayed Draw Term Loan**		3,918,298	1.00%	December 19, 2029
evolv Consulting, LLC	Revolver		1,363,636	0.50%	December 7, 2028
Evriholder Acquisition, Inc.	Revolver		48,000	0.50%	January 24, 2028
Exigo, LLC	Revolver		100,000	0.50%	March 16, 2027
FairWave Holdings, LLC	Revolver		1,142,290	0.50%	April 1, 2029
FiscalNote Boards LLC	Delayed Draw Term Loan		627,139	1.00%	March 12, 2029
FiscalNote Boards LLC	Revolver		391,962	0.50%	March 12, 2029
Florachem Corporation	Revolver		10,667	0.50%	April 29, 2028
GS HVAM Intermediate, LLC	Revolver		1,034,091	0.50%	February 28, 2026
Guidant Corp.	Revolver		1,055,707	0.50%	March 12, 2029
HV Watterson Holdings, LLC	Revolver		1,026	0.50%	December 17, 2026
Identity Theft Guard Solutions, Inc.	Revolver		100,000	0.50%	February 28, 2030
Impact Home Services LLC	Delayed Draw Term Loan		1,571,984	1.00%	April 28, 2028
Informativ, LLC	Revolver		100,000	0.50%	July 30, 2026
Inoapps Bidco, LLC	Revolver		18,000	0.50%	February 15, 2027

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

March 31, 2025

(unaudited)


				Unused
		Unfunded		Commitment
Investments	Security	Commitment		Fee	Maturity
iNovex Information Systems Incorporated	Revolver	$	58,000	0.50%	December 17, 2030
J.R. Watkins, LLC	Revolver		322,425	0.00%	May 3, 2026
Lightning Intermediate II, LLC	Revolver		100,000	0.50%	June 6, 2027
MacKenzie-Childs Acquisition, Inc.	Revolver		80,000	0.50%	September 2, 2027
Madison Logic Holdings, Inc.	Revolver		52,632	0.50%	December 30, 2027
MBH Management LLC	Delayed Draw Term Loan		500,000	1.00%	November 15, 2029
MBH Management LLC	Revolver		500,000	0.50%	November 15, 2029
MedLearning Group, LLC	Delayed Draw Term Loan		1,956,150	1.00%	December 30, 2027
Michelli, LLC	Revolver		1,296,076	0.50%	December 21, 2028
Microbe Formulas LLC	Revolver		100,000	0.50%	April 3, 2028
Mobotrex Acquisition, LLC	Delayed Draw Term Loan		109,312	1.00%	June 7, 2030
Mobotrex Acquisition, LLC	Revolver		100,000	0.50%	June 7, 2030
MOM Enterprises, LLC	Revolver		100,000	0.50%	May 19, 2026
Monarch Behavioral Therapy, LLC	Delayed Draw Term Loan		476,993	1.00%	June 6, 2030
Monarch Behavioral Therapy, LLC	Revolver		325,223	0.50%	June 6, 2030
Morgan Electrical Group Intermediate Holdings, Inc.	Revolver		100,000	0.50%	August 3, 2029
NINJIO, LLC	Revolver		100,000	0.50%	October 12, 2027
Norplex Micarta Acquisition, Inc.	Revolver		453,333	0.50%	October 31, 2029
Pacific Shoring Holdings, LLC	Revolver		86,667	0.50%	January 10, 2030
Plus Delta Buyer LLC	Delayed Draw Term Loan		3,753,955	1.00%	January 16, 2031
Plus Delta Buyer LLC	Revolver		100,000	0.50%	January 16, 2031
Premiere Digital Services, Inc.	Revolver		576,923	0.50%	November 3, 2026
RIA Advisory Borrower, LLC	Revolver		14,457	0.50%	August 2, 2027
Rogers Mechanical Contractors, LLC	Revolver		83,333	0.50%	September 28, 2028
Said Intermediate, LLC	Revolver		1,168,831	0.50%	June 13, 2029
Sales Benchmark Index, LLC	Revolver		665,730	0.50%	July 26, 2026
Simpler Trading, LLC	Revolver		20,000	0.50%	December 28,2027
Strategus, LLC	Delayed Draw Term Loan		2,524,737	1.00%	January 27, 2031
Strategus, LLC	Revolver		100,000	0.50%	January 27, 2031
Teckrez, LLC	Revolver		144,222	1.00%	November 30, 2028
The Hardenbergh Group, Inc.	Revolver		100,000	0.50%	August 6, 2028
Tiger 21, LLC	Revolver		100,000	0.50%	December 30, 2030
Tilley Distribution, Inc.	Revolver		86,957	0.50%	December 31, 2026
TradePending OpCo Aggregator, LLC	Revolver		66,667	0.50%	March 2, 2026
TriplePoint Acquisition Holdings LLC	Delayed Draw Term Loan		1,339,123	1.00%	May 31, 2029
TriplePoint Acquisition Holdings LLC	Revolver		743,957	0.50%	May 31, 2029
U.S. Expediters, LLC	Revolver		30,000	0.50%	December 22, 2026
USDTL AcquisitionCo, Inc.	Delayed Draw Term Loan		500,000	1.00%	December 9, 2030
USDTL AcquisitionCo, Inc.	Revolver		92,000	0.50%	December 9, 2030
WER Holdings, LLC	Delayed Draw Term Loan		514,059	1.00%	April 11, 2030
WER Holdings, LLC***	Revolver		401,608	0.50%	April 11, 2030
Xanitos, Inc.	Revolver		85,000	0.50%	June 25, 2026
	Total Unfunded Debt Commitments	$	46,182,397

(a)

* Included in this investment is a Line of Credit in the amount of $4,861, with a Line of Credit rate of 5.25% and a maturity of July 1, 2028.

** This a last-out delayed draw term loan with contractual rates higher than the applicable rates.

*** Included in this investment is a Line of Credit in the amount of $41,071, with a Line of Credit rate of 5.50% and a maturity of April 11, 2030.

(10)

This loan is a unitranche investment.

(11)

These loans include an interest rate floor feature, which is lower than the applicable rates; therefore, the floor is not in effect.

(12)

These loans are last-out term loans with contractual rates higher than the applicable rates; therefore, the floor is not in effect.

(13)

Investment has been on non-accrual since November 1, 2024.

(14)

This loan is convertible to common units at maturity or at the election of the majority of holders.

(15)

Excluded from the investment is an uncalled capital commitment in an amount not to exceed $293,423.

(16)

Investment has been on non-accrual since the later of January 1, 2023 or the investment date.

(17)

Excluded from the investment is an undrawn revolver commitment in an amount not to exceed $17,500 with an unfunded rate of 0.50% and a maturity of April 28, 2028. The Company has full discretion to fund the revolver commitment.

(18)

The Company has full discretion to fund the revolver commitment, with an unfunded rate of 0.00% and a maturity of February 7, 2028.

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

March 31, 2025

(unaudited)

(19)

Investment has been on non-accrual since January 1, 2024.

(20)

Excluded from the investment is an undrawn revolver commitment in an amount not to exceed $2,000,000, with an unfunded rate of 0.50% and a maturity of April 27, 2026. The Company has full discretion to fund the revolver commitment.

(21)

Excluded from the investment is an undrawn revolver commitment in an amount not to exceed $2,000,000, with an unfunded rate of 0.00% and a maturity of April 27, 2026. The Company has full discretion to fund the revolver commitment.

(22)

Excluded from the investment is an undrawn revolver commitment in an amount not to exceed $2,200,821, with an unfunded rate of 0.00% and a maturity of September 3, 2026. The Company has full discretion to fund the revolver commitment.

(23)

Control investments are defined by the 1940 Act as investments in which more than 25% of the voting securities are owned or where the ability to nominate greater than 50% of the board representation is maintained.


														Amount of Interest
			December 31, 2024		Gross Additions		Gross Reductions	Amount of Realized		Amount of Unrealized		March 31, 2025		Credited to Income
Investments	Security		Value		(a)		(b)	Gain (loss)		Gain (loss)		Value		(c)
EH Real Estate Services, LLC
Term Loan A-1	First Lien	$	254,101	$	-	$	-	$	-	$	37,644	$	291,745	-
Term Loan A-2	First Lien		87,877		-		-		-		13,019		100,896	-
Term Loan A-3	First Lien		31,142		-		-		-		4,613		35,755	-
Term Loan A-4	First Lien		1,505,537		-		-		-		-		1,505,537	-
Term Loan A-5	First Lien		5,710,182		-		-		-		-		5,710,182	-
Revolver	First Lien		63,597		-		-		-		-		63,597	-
EH Holdco, LLC Common Units	Equity		-		-		-		-		-		-	-
EH Holdco, LLC Series A Preferred Units	Equity		-		-		-		-		-		-	-
Total Control Investments		$	7,652,436	$	-	$	-	$	-	$	55,276	$	7,707,712	-

(a) Gross additions include increases in the cost basis of investments resulting from new investments, follow-on investments, payment-in-kind interest or dividends, the amortization of any unearned income or discounts on debt investments, as applicable.

(b) Gross reductions include decreases in the cost basis of investments resulting from principal repayments, sales and return of capital.

(c) Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in the Control category.

(24)	Excluded from the investment is an undrawn revolver commitment in an amount not to exceed $100,000, with an unfunded rate of 0.00% and a maturity of August 31, 2027. The Company has full discretion to fund the revolver commitment.

(25)	Investment has been on non-accrual since the later of September 1, 2024 or the investment date.

(26)

Investment has been on non-accrual since the later of August 21, 2024 or the investment date. Excluded from the investment is an undrawn revolver commitment in an amount not to exceed $69,453, with an unfunded rate of 0.00% and a maturity of December 31, 2027. The Company has full discretion to fund the revolver commitment.

Abbreviation Legend

PIK — Payment-In-Kind

PRIME — U.S. Prime Rate

SOFR — Secured Overnight Financing Rate

SONIA — Sterling Overnight Index Average

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

December 31, 2024


															Principal						% of
												Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK		Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
Control investments (23)
EH Real Estate Services, LLC														Skokie, IL
Term Loan A-1	(16)	First Lien		15.00	%	-	%	-	%	-	%	9/3/2021	9/3/2026	FIRE: Real Estate	$	1,882,226		1,882,226		254,101	0.07	%
Term Loan A-2	(16)	First Lien		15.00	%	-	%	-	%	-	%	4/3/2023	9/3/2026			650,943		650,943		87,877	0.02	%
Term Loan A-3	(16)	First Lien		15.00	%	-	%	-	%	-	%	6/7/2023	9/3/2026			230,678		230,678		31,142	0.01	%
Term Loan A-4	(16)	First Lien		15.00	%	-	%	-	%	-	%	7/12/2023	9/3/2026			1,505,537		1,505,537		1,505,537	0.41	%
Term Loan A-5	(16)	First Lien		15.00	%	-	%	-	%	-	%	1/8/2024	9/3/2026			5,710,182		5,710,182		5,710,182	1.54	%
Revolver	(16)(22)	First Lien		15.00	%	-	%	-	%	-	%	10/3/2023	9/3/2026			63,597		63,597		63,597	0.02	%
EH Holdco, LLC Common Units		Equity										10/3/2023				15,356		3		-	0.00	%
EH Holdco, LLC Series A Preferred Units		Equity										9/3/2021				7,892		7,891,642		-	0.00	%
Total																	$	17,934,808	$	7,652,436	2.07	%
Total Control investments																	$	17,934,808	$	7,652,436	2.07	%
Non-controlled, non-affiliated investments	(4)(5)
2X LLC	(9)													Berwyn, PA
Term Loan	(11)	First Lien	3M SOFR+	5.00	%	2.00	%	9.33	%			6/5/2023	6/5/2028	Services: Business	$	5,431,456		5,329,224		5,404,299	1.46	%
Term Loan	(11)	First Lien	3M SOFR+	5.00	%	2.00	%	9.33	%			10/31/2023	6/5/2028			1,430,283		1,401,610		1,423,132	0.38	%
Term Loan	(11)	First Lien	3M SOFR+	5.00	%	2.00	%	9.33	%			12/2/2024	6/5/2028			3,851,702		3,795,049		3,832,443	1.04	%
Revolver	(11)	First Lien	3M SOFR+	5.00	%	2.00	%	9.33	%			6/5/2023	6/5/2028			12,500		12,500		12,438	0.00	%
2X Investors LP Class A Units		Equity										6/5/2023				58,949		589,496		779,253	0.21	%
Total																	$	11,127,879	$	11,451,565	3.09	%
Ad.Net Acquisition, LLC	(9)													Los Angeles, CA
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.00	%	1.00	%	10.59	%			5/7/2021	5/7/2026	Services: Business	$	15,042,647		14,971,098		15,042,647	4.07	%
Revolver	(11)	First Lien	3M SOFR+	6.00	%	1.00	%	10.59	%			5/7/2021	5/7/2026			854,217		854,217		854,217	0.23	%
Ad.Net Holdings, Inc. Series A Common Stock (SBIC II)	(5)	Equity										5/7/2021				7,794		77,941		68,620	0.02	%
Ad.Net Holdings, Inc. Series A Preferred Stock (SBIC II)	(5)	Equity										5/7/2021				7,015		701,471		617,581	0.17	%
Total																	$	16,604,727	$	16,583,065	4.49	%
AdCellerant LLC	(9)													Denver, CO
Term A Loan (SBIC II)	(5)(11)	First Lien	1M SOFR+	6.00	%	2.00	%	10.38	%			12/12/2023	12/12/2028	Media: Advertising, Printing & Publishing	$	9,900,000		9,734,838		9,850,500	2.66	%
AdCellerant Holdings, LLC Serires A Units		Equity										12/12/2023				728,710		728,710		633,353	0.17	%
Total																	$	10,463,548	$	10,483,853	2.83	%
ADS Group Opco, LLC														Lakewood, CO
Term Loan (SBIC II)	(5)(25)	First Lien		5.00	%	-	%	-	%	-	%	6/4/2021	12/31/2027	Aerospace & Defense	$	12,851,659		12,764,381		10,474,102	2.83	%
Revolver (SBIC II)	(5)(9)(25)	First Lien		5.00	%	-	%	-	%	-	%	9/30/2024	12/31/2027			9,260		9,260		7,547	0.00	%
ADS Group Topco, LLC Class A Units		Equity										6/4/2021				77,626		288,691		-	0.00	%
ADS Group Topco, LLC Class B Units		Equity										6/4/2021				56,819		211,309		-	0.00	%
ADS Group Topco, LLC Class D Units		Equity										9/30/2024				432		-		-	0.00	%
ADS Group Topco, LLC Class Y Units	(6)	Equity										4/11/2023				48,216		165,027		-	0.00	%
ADS Group Topco, LLC Class Z Units		Equity										6/15/2022				72,043		267,929		-	0.00	%
Total																	$	13,706,597	$	10,481,649	2.83	%
Advanced Barrier Extrusions, LLC														Rhinelander, WI
Term Loan B (SBIC)	(4)(11)(13)	First Lien	1M SOFR+	9.50	%	1.00	%	-	%	-	%	11/30/2020	11/30/2026	Containers, Packaging, & Glass	$	16,843,750		16,718,372		12,464,374	3.38	%
Term Loan (SBIC)	(4)(13)	First Lien		15.00	%	-	%	-	%	-	%	12/6/2024	12/20/2024			604,622		604,622		447,420	0.13	%
GP ABX Holdings Partnership, L.P. Partner Interests		Equity										8/8/2018				644,737		528,395		-	0.00	%
GP ABX Holdings Partnership, L.P. Series B Preferred Interests		Equity										1/5/2023				1,562		156,182		-	0.00	%
Total																	$	18,007,571	$	12,911,794	3.51	%
AGT Robotique Inc.	(7)(9)													Trois Rivieres, Canada
Term Loan	(11)	First Lien	3M SOFR+	5.25	%	1.00	%	9.58	%			6/24/2024	6/22/2029	Capital Equipment	$	10,673,296		10,476,264		10,513,197	2.84	%
Total																	$	10,476,264	$	10,513,197	2.84	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

December 31, 2024


															Principal						% of
												Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK		Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
AMII Acquisition, LLC	(9)													Coral Gables, FL
Term Loan (SBIC II )	(5)(11)	First Lien	3M SOFR+	4.75	%	1.50	%	9.08	%			12/4/2024	12/4/2029	Services: Consumer	$	8,819,468		8,688,867		8,688,867	2.35	%
AMII Holdings, LP Class B Units		Equity										12/3/2024				14,246		142,460		142,460	0.04	%
Total																	$	8,831,327	$	8,831,327	2.39	%
Amika OpCo LLC	(9)													Brooklyn, NY
Term Loan	(11)	First Lien	6M SOFR+	5.25	%	0.75	%	9.65	%			7/1/2022	7/1/2029	Consumer Goods: Non-Durable	$	94,638		93,260		94,638	0.03	%
Term Loan	(11)	First Lien	6M SOFR+	5.75	%	0.75	%	10.33	%			12/5/2023	7/1/2029			9,608,834		9,444,289		9,608,834	2.60	%
Ishtar Co-Invest-B LP Partnership Interests	(6)	Equity										7/1/2022				77,778		38,133		228,190	0.06	%
Oshun Co-Invest-B LP Partnership Interests	(6)	Equity										7/1/2022				22,222		21,141		65,196	0.02	%
Total																	$	9,596,823	$	9,996,858	2.71	%
Anne Lewis Strategies, LLC	(9)													Washington, DC
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.00	%	2.00	%	10.33	%			3/5/2021	5/9/2028	Services: Business	$	9,096,354		9,044,354		9,096,354	2.46	%
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.00	%	2.00	%	10.33	%			4/15/2022	5/9/2028			2,838,697		2,818,874		2,838,697	0.77	%
SG AL Investment, LLC Common Units	(6)	Equity										3/5/2021				1,000		416,800		3,794,487	1.03	%
SG AL Investment, LLC Common-A Units		Equity										12/22/2023				239		492,905		985,826	0.27	%
Total																	$	12,772,933	$	16,715,364	4.53	%
APE Holdings, LLC														Deer Park, TX
Class A Units		Equity										9/5/2014		Chemicals, Plastics, & Rubber		375,000		375,000		25,745	0.01	%
Total																	$	375,000	$	25,745	0.01	%
Atmosphere Aggregator Holdings II, L.P.														Atlanta, GA
Common Units	(6)	Equity										1/26/2016		Services: Business		254,250		-		2,779,048	0.75	%
Stratose Aggregator Holdings, L.P. Common Units	(6)	Equity										6/30/2015				750,000		-		8,197,783	2.22	%
Total																	$	-	$	10,976,831	2.97	%
ArborWorks, LLC														Oakhurst, CA
Term Loan	(11)(17)	First Lien	1M SOFR+	6.50	%	1.00	%	-	%	-	%	11/6/2023	11/6/2028	Environmental Industries	$	3,461,538		3,461,538		3,288,461	0.89	%
Revolver	(9)(17)	First Lien		15.00	%	-	%	-	%	-	%	11/6/2023	11/6/2028			700,195		700,195		665,185	0.18	%
ArborWorks Intermediate Holdco, LLC Class A-1 Preferred Units		Equity										11/6/2023				16,037		3,610,847		2,750,612	0.74	%
ArborWorks Intermediate Holdco, LLC Class B-1 Preferred Units		Equity										11/6/2023				16,037		-		-	0.00	%
ArborWorks Intermediate Holdco, LLC Class A-1 Common Units		Equity										11/6/2023				1,923		-		-	0.00	%
Total																	$	7,772,580	$	6,704,258	1.81	%
Axis Portable Air, LLC	(9)													Phoenix, AZ
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	5.75	%	2.00	%	10.23	%			3/22/2022	3/22/2028	Capital Equipment	$	9,405,000		9,293,207		9,405,000	2.54	%
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	5.75	%	2.00	%	10.23	%			4/17/2023	3/22/2028			1,874,674		1,847,626		1,874,674	0.51	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	5.75	%	1.00	%	10.23	%			3/22/2022	3/22/2028			99,000		98,368		99,000	0.03	%
Axis Air Parent, LLC Preferred Units		Equity										3/22/2022				4,436		443,636		1,596,690	0.43	%
Total																	$	11,682,837	$	12,975,364	3.51	%
Baker Manufacturing Company, LLC														Evansville, IN
BSC Blue Water Holdings, LLC Series A Units (SBIC II)	(5)	Equity										7/5/2022		Capital Equipment		743,770		743,770		920,343	0.25	%
Total																	$	743,770	$	920,343	0.25	%
Bart & Associates, LLC	(9)													McLean, VA
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	5.25	%	1.00	%	9.58	%			8/16/2024	8/16/2030	High Tech Industries	$	8,920,366		8,770,557		8,875,764	2.40	%
Revolver	(11)	First Lien	3M SOFR+	5.25	%	1.00	%	9.58	%			8/16/2024	8/16/2030			104,668		104,668		104,145	0.03	%
B&A Partners Holding, LLC Series A Preferred Units		Equity										8/16/2024				418,671		418,671		393,458	0.11	%
Total																	$	9,293,896	$	9,373,367	2.54	%
BL Products Parent, L.P.														Houston, TX
Class A Units		Equity										2/1/2022		Capital Equipment		879,060		983,608		1,443,497	0.39	%
Total																	$	983,608	$	1,443,497	0.39	%
Café Valley, Inc.														Phoenix, AZ
Term Loan	(11)	First Lien	3M SOFR+	7.24	%	2.00	%	11.57	%			8/28/2019	8/28/2026	Beverage & Food	$	15,372,619		15,372,618		15,372,619	4.16	%
CF Topco LLC Units		Equity										8/28/2019				9,160		916,015		1,801,833	0.49	%
Total																	$	16,288,633	$	17,174,452	4.65	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

December 31, 2024


														Principal						% of
											Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK	Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
Camp Profiles LLC	(9)												Boston, MA
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	5.25	%	1.00	%	9.73	%		9/3/2021	9/3/2026	Media: Advertising, Printing & Publishing	$	9,916,875		9,839,972		9,916,875	2.68	%
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	5.25	%	1.00	%	9.73	%		12/3/2024	9/3/2026			2,250,000		2,217,644		2,250,000	0.61	%
CIVC VI-A 829 Blocker, LLC Units		Equity									9/3/2021				250		250,000		770,951	0.21	%
Total																$	12,307,616	$	12,937,826	3.50	%
Carolinas Buyer, Inc.	(9)												Charlotte, NC
Term Loan	(4)(11)	First Lien	3M SOFR+	5.25	%	1.50	%	9.60	%		12/20/2024	12/20/2030	Beverage & Food	$	6,796,831		6,677,886		6,677,886	1.81	%
Carolinas Holdings, L.P. Class A Units		Equity									12/20/2024				466		465,637		465,633	0.13	%
Total																$	7,143,523	$	7,143,519	1.94	%
CEATI International Inc.	(7)(9)												Montreal, Canada
Term Loan	(11)	First Lien	3M SOFR+	6.00	%	1.00	%	10.33	%		2/19/2021	12/31/2027	Services: Business	$	8,439,915		8,394,322		8,439,915	2.28	%
Term Loan	(11)	First Lien	3M SOFR+	6.00	%	1.00	%	10.35	%		12/20/2024	12/31/2027			3,200,000		3,171,714		3,200,000	0.87	%
CEATI Holdings, LP Class A Units	(6)	Equity									2/19/2021				250,000		132,919		272,853	0.07	%
Total																$	11,698,955	$	11,912,768	3.22	%
Cerebro Buyer, LLC	(9)												Columbia, SC
Term Loan	(11)	First Lien	1M SOFR+	5.00	%	1.00	%	9.36	%		3/15/2023	3/15/2029	Healthcare & Pharmaceuticals	$	4,526,683		4,439,292		4,526,683	1.22	%
Cerebro Holdings Partnership, L.P. Series A Partner Interests		Equity									3/15/2023				62,961		62,961		71,365	0.02	%
Cerebro Holdings Partnership, L.P. Series B Partner Interests	(6)	Equity									3/15/2023				341,091		333,925		386,619	0.10	%
Total																$	4,836,178	$	4,984,667	1.34	%
CF Arch Holdings LLC													Houston, TX
Class A Units		Equity									8/10/2022		Services: Business		100,000		100,000		197,987	0.05	%
Total																$	100,000	$	197,987	0.05	%
CF512, Inc.	(9)												Blue Bell, PA
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.00	%	1.00	%	10.69	%		9/1/2021	9/1/2026	Media: Advertising, Printing & Publishing	$	13,360,125		13,256,520		13,293,324	3.59	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.00	%	1.00	%	10.52	%		9/1/2021	9/1/2026			2,885,002		2,873,374		2,870,577	0.78	%
StellPen Holdings, LLC Membership Interests		Equity									9/1/2021				220,930		220,930		181,659	0.05	%
Total																$	16,350,824	$	16,345,560	4.42	%
Channel Partners Intermediateco, LLC	(9)												Tampa Bay, FL
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	7.00	%	2.00	%	11.93	%		2/24/2022	2/7/2027	Retail	$	13,117,995		13,054,902		12,986,815	3.51	%
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	7.00	%	2.00	%	11.93	%		3/27/2023	2/7/2027			1,672,682		1,662,516		1,655,955	0.45	%
Revolver	(11)	First Lien	1M SOFR+	7.00	%	2.00	%	11.44	%		2/24/2022	2/7/2027			81,667		81,667		80,850	0.02	%
Total																$	14,799,085	$	14,723,620	3.98	%
CompleteCase, LLC	(9)												Seattle, WA
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.98	%		12/21/2020	12/21/2025	Services: Consumer	$	6,584,450		6,553,762		6,551,528	1.77	%
CompleteCase Holdings, Inc. Class A Common Stock (SBIC II)	(5)	Equity									12/21/2020				417		5		1	0.00	%
CompleteCase Holdings, Inc. Series A Preferred Stock (SBIC II)	(5)	Equity									12/21/2020				522		521,734		137,569	0.04	%
CompleteCase Holdings, Inc. Class A Common Stock		Equity									4/27/2023				89		1		-	0.00	%
CompleteCase Holdings, Inc. Series C Preferred Stock		Equity									4/27/2023				111		111,408		29,376	0.01	%
Total																$	7,186,910	$	6,718,474	1.82	%
Compost 360 Acquisition, LLC	(9)												Tampa, FL
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.83	%		8/2/2023	8/2/2028	Environmental Industries	$	9,475,162		9,289,539		9,190,907	2.48	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.83	%		8/2/2023	8/2/2028			1,037,841		1,024,868		1,006,706	0.27	%
Revolver	(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.83	%		8/2/2023	8/2/2028			86,000		86,000		83,420	0.02	%
Compost 360 Investments, LLC Class A Units		Equity									8/2/2023				3,124		300,041		222,957	0.06	%
Total																$	10,700,448	$	10,503,990	2.83	%
COPILOT Provider Support Services, LLC	(9)												Maitland, FL
Term Loan	(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.98	%		11/22/2022	11/22/2027	Healthcare & Pharmaceuticals	$	4,887,500		4,823,845		4,863,063	1.31	%
Revolver	(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.98	%		11/22/2022	11/22/2027			28,333		28,333		28,191	0.01	%
QHP Project Captivate Blocker, Inc. Common Stock		Equity									11/22/2022				4		285,714		184,176	0.05	%
Total																$	5,137,892	$	5,075,430	1.37	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

December 31, 2024


															Principal						% of
												Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK		Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
Craftable Intermediate II Inc.	(9)													Dallas, TX
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.50	%	1.50	%	10.83	%			6/30/2023	6/30/2028	High Tech Industries	$	9,982,878		9,830,912		9,982,878	2.70	%
Gauge Craftable LP Partnership Interests		Equity										6/30/2023				626,690		626,690		991,476	0.27	%
Total																	$	10,457,602	$	10,974,354	2.97	%
Curion Holdings, LLC	(9)													Chicago, IL
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.73	%			7/29/2022	7/29/2027	Services: Business	$	12,766,151		12,619,342		12,702,320	3.43	%
Revolver	(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.73	%			7/29/2022	7/29/2027			86,211		86,211		85,780	0.02	%
SP CS Holdings LLC Class A Units		Equity										7/29/2022				739,999		739,999		795,702	0.22	%
Total																	$	13,445,552	$	13,583,802	3.67	%
DRS Holdings III, Inc.	(9)													St. Louis, MO
Term Loan	(11)	First Lien	1M SOFR+	6.25	%	1.00	%	10.71	%			11/1/2019	11/1/2025	Consumer Goods: Durable	$	8,586,464		8,571,140		8,586,464	2.32	%
Total																	$	8,571,140	$	8,586,464	2.32	%
DTE Holding Company, LLC														Roselle, IL
Class A-2 Units		Equity										4/13/2018		Energy: Oil & Gas		776,316		466,204		-	0.00	%
Class AA Units		Equity										4/13/2018				723,684		723,684		-	0.00	%
Total																	$	1,189,888	$	-	0.00	%
EHI Buyer, Inc.														Grand Prarie, TX
EHI Group Holdings, L.P. Class A Units	(6)	Equity										7/31/2023		Environmental Industries		618		430,653		1,073,808	0.29	%
Total																	$	430,653	$	1,073,808	0.29	%
Elliott Aviation, LLC														Moline, IL
Term Loan	(11)	First Lien	1M SOFR+	6.00	%	2.00	%	10.51	%	2.00	%	1/31/2020	6/30/2025	Aerospace & Defense	$	8,712,311		8,709,082		8,276,695	2.24	%
Term Loan		Unsecured		15.00	%	-	%	-	%	15.00	%	10/26/2023	1/31/2026			65,807		65,807		49,355	0.01	%
Revolver A	(11)	First Lien	1M SOFR+	6.00	%	2.00	%	10.51	%	2.00	%	1/31/2020	6/30/2025			1,439,463		1,439,463		1,367,490	0.37	%
Revolver B	(11)	First Lien	1M SOFR+	6.00	%	2.00	%	10.51	%	2.00	%	3/1/2023	6/30/2025			677,843		677,843		643,951	0.17	%
SP EA Holdings LLC Class A Units		Equity										1/31/2020				1,048,896		901,489		-	0.00	%
Total																	$	11,793,684	$	10,337,491	2.79	%
EOS Fitness Holdings, LLC														Phoenix, AZ
Class A Preferred Units		Equity										12/30/2014		Hotel, Gaming, & Leisure		118		-		-	0.00	%
Class B Common Units		Equity										12/30/2014				3,017		-		889,366	0.24	%
Total																	$	-	$	889,366	0.24	%
Equine Network, LLC	(9)													Boulder, CO
Term A Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.50	%	1.00	%	11.28	%			5/22/2023	5/22/2028	Hotel, Gaming, & Leisure	$	7,020,201		6,881,178		7,020,201	1.90	%
Revolver	(11)	First Lien	1M SOFR+	6.50	%	1.00	%	10.97	%			5/22/2023	5/22/2028			133,333		133,333		133,333	0.04	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.50	%	1.00	%	11.35	%			5/22/2023	5/22/2028			99,150		99,150		99,150	0.03	%
Total																	$	7,113,661	$	7,252,684	1.97	%
Eskola LLC	(9)													Morristown, TN
Last Out Term Loan	(10)(12)	First Lien	3M SOFR+	5.00	%	1.50	%	9.96	%			12/19/2024	12/19/2029	Construction & Building	$	7,558,348		7,426,077		7,426,077	2.01	%
Last Out Delayed Draw Term Loan	(10)(12)	First Lien	3M SOFR+	5.00	%	1.50	%	9.94	%			12/19/2024	12/19/2029			2,798,784		2,777,793		2,749,805	0.74	%
Eskola Holdings, LLC Class A Units		Equity										12/19/2024				314		893,991		893,738	0.24	%
Total																	$	11,097,861	$	11,069,620	2.99	%
evolv Consulting, LLC	(9)													Dallas, TX
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.50	%	2.00	%	11.09	%			12/7/2023	12/7/2028	Services: Business	$	9,900,000		9,733,850		9,850,500	2.66	%
evolv Holdco, LLC Preferred Units		Equity										12/7/2023				473,485		473,485		430,948	0.12	%
Total																	$	10,207,335	$	10,281,448	2.78	%
Evriholder Acquisition, Inc.	(9)													Anaheim, CA
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.75	%	1.50	%	11.23	%			1/23/2023	1/24/2028	Consumer Goods: Durable	$	12,426,869		12,213,973		12,426,869	3.36	%
KEJ Holdings LP Class A Units		Equity										1/23/2023				873,333		873,333		1,376,994	0.37	%
Total																	$	13,087,306	$	13,803,863	3.73	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

December 31, 2024


															Principal						% of
												Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK		Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
Exacta Land Surveyors, LLC	(20)													Cleveland, OH
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	5.75	%	1.50	%	10.23	%	1.00	%	2/8/2019	7/31/2025	Services: Business	$	16,313,133		16,313,132		15,334,344	4.16	%
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	5..75	%	1.50	%	10.23	%	1.00	%	7/15/2022	7/31/2025			991,945		991,945		932,428	0.25	%
Term Loan		Unsecured								15.00	%	4/22/2024	6/30/2026			100,211		100,211		80,169	0.02	%
SP ELS Holdings LLC Class A Units		Equity										2/8/2019				1,338,661		1,124,414		227,350	0.06	%
Total																	$	18,529,702	$	16,574,291	4.49	%
Exigo, LLC	(9)													Dallas, TX
Term Loan	(11)	First Lien	1M SOFR+	6.25	%	1.00	%	10.71	%			3/16/2022	3/16/2027	Services: Business	$	8,721,980		8,657,351		8,678,370	2.36	%
Gauge Exigo Coinvest, LLC Common Units		Equity										3/16/2022				377,535		377,535		353,743	0.10	%
Total																	$	9,034,886	$	9,032,113	2.46	%
FairWave Holdings, LLC	(9)													Kansas City, MO
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.50	%	1.50	%	10.83	%			4/1/2024	4/1/2029	Beverage & Food	$	7,558,150		7,406,992		7,444,778	2.01	%
Revolver	(11)	First Lien	3M SOFR+	6.50	%	1.50	%	10.83	%			4/1/2024	4/1/2029			656,817		656,817		646,965	0.17	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.50	%	1.50	%	10.83	%			4/1/2024	4/1/2029			1,688,532		1,669,955		1,663,204	0.45	%
GRC Java Holdings, LLC Class A Units		Equity										4/1/2024				2,856		285,572		371,158	0.10	%
Total																	$	10,019,336	$	10,126,105	2.73	%
FiscalNote Boards LLC	(7)(9)													Toronto, Canada
Term Loan	(11)	First Lien	1M SOFR+	5.25	%	1.00	%	9.61	%			3/11/2024	3/12/2029	Services: Business	$	4,279,247		4,204,427		4,193,662	1.13	%
FCP-Connect Holdings LLC Class A Common Shares		Equity										5/28/2024				284		-		-	0.00	%
FCP-Connect Holdings LLC Series A Preferred Shares		Equity										5/28/2024				284		190,382		218,894	0.06	%
Total																	$	4,394,809	$	4,412,556	1.19	%
Florachem Corporation	(9)													Jacksonville, FL
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.50	%	1.00	%	10.98	%			4/29/2022	4/29/2028	Chemicals, Plastics, & Rubber	$	9,750,000		9,630,079		9,750,000	2.64	%
Revolver	(11)	First Lien	3M SOFR+	6.50	%	1.00	%	10.98	%			4/29/2022	4/29/2028			66,667		66,667		66,667	0.02	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.50	%	1.00	%	10.98	%			4/29/2022	4/29/2028			53,213		53,213		53,213	0.01	%
SK FC Holdings, L.P. Class A Units		Equity										4/29/2022				362		362,434		613,507	0.17	%
Total																	$	10,112,393	$	10,483,387	2.84	%
General LED OPCO, LLC														San Antonio, TX
Term Loan	(11)	Second Lien	3M SOFR+	9.00	%	1.50	%	13.43	%			5/1/2018	3/31/2026	Services: Business	$	4,500,000		4,484,133		4,410,000	1.19	%
Total																	$	4,484,133	$	4,410,000	1.19	%
Green Intermediateco II, Inc.														Irvine, CA
Term Loan	(11)	First Lien	3M SOFR+	6.00	%	2.00	%	10.33	%			8/8/2023	8/8/2028	High Tech Industries	$	11,030,624		10,814,754		10,920,318	2.95	%
Term Loan	(11)	First Lien	1M SOFR+	6.00	%	2.00	%	10.36	%			11/6/2024	8/8/2028			1,296,750		1,271,726		1,283,783	0.35	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.00	%	2.00	%	10.33	%			8/8/2023	8/8/2028			404,046		399,952		400,006	0.11	%
Green Topco Holdings, LLC Class A Units	(6)	Equity										8/8/2023				271,401		219,664		362,217	0.10	%
Total																	$	12,706,096	$	12,966,324	3.51	%
GS HVAM Intermediate, LLC	(9)													Carlsbad, CA
Term Loan	(11)	First Lien	3M SOFR+	6.50	%	1.00	%	11.24	%			10/18/2019	2/28/2026	Beverage & Food	$	12,260,275		12,251,602		12,260,275	3.31	%
Revolver	(11)	First Lien	3M SOFR+	6.50	%	1.00	%	11.16	%			10/18/2019	2/28/2026			2,174,242		2,174,242		2,174,242	0.59	%
HV GS Acquisition, LP Class A Interests	(6)	Equity										10/2/2019				2,144		563,209		4,852,169	1.31	%
Total																	$	14,989,053	$	19,286,686	5.21	%
Guidant Corp.	(9)													Erie, PA
Term Loan	(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.83	%			3/11/2024	3/12/2029	Energy: Oil & Gas	$	9,954,000		9,648,493		9,954,000	2.69	%
Titan Meter Topco LP Class A Units		Equity										3/11/2024				515,578		515,578		774,031	0.21	%
Total																	$	10,164,071	$	10,728,031	2.90	%
Heartland Business Systems, LLC														Little Chute, WI
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.73	%			8/26/2022	8/26/2027	Services: Business	$	9,775,000		9,658,966		9,775,000	2.64	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.73	%			8/26/2022	8/26/2027			49,125		48,799		49,125	0.01	%
AMCO HBS Holdings, LP Class A Units	(6)	Equity										8/26/2022				2,861		219,823		616,165	0.17	%
Total																	$	9,927,588	$	10,440,290	2.82	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

December 31, 2024


															Principal						% of
												Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK		Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
Husk AcquireCo Inc.														Vaughan, Canada
Term Loan	(7)(11)	First Lien	6M SOFR+	5.75	%	1.50	%	10.16	%			11/14/2024	11/15/2029	Beverage & Food	$	5,317,225		5,239,463		5,239,463	1.42	%
SK Spectra Holdings LP Class A Units		Equity										11/15/2024				298		297,765		297,765	0.08	%
Total																	$	5,537,228	$	5,537,228	1.50	%
HV Watterson Holdings, LLC	(9)													Schaumburg, IL
Term Loan		First Lien		12.00	%	-	%	8.00	%	4.00	%	12/17/2021	12/17/2026	Services: Business	$	13,372,834		13,256,191		13,105,377	3.54	%
Revolver		First Lien		12.00	%	-	%	8.00	%	4.00	%	12/17/2021	12/17/2026			97,994		97,994		96,034	0.03	%
Delayed Draw Term Loan		First Lien		12.00	%	-	%	8.00	%	4.00	%	12/17/2021	12/17/2026			324,861		323,234		318,364	0.09	%
HV Watterson Parent, LLC Class A Units		Equity										12/17/2021				1,632		1,631,591		394,674	0.11	%
Total																	$	15,309,010	$	13,914,449	3.77	%
I2P Holdings, LLC														Cleveland, OH
Series A Preferred Units		Equity										1/31/2018		Services: Business		750,000		-		3,618,142	0.98	%
Total																	$	-	$	3,618,142	0.98	%
Impact Home Services LLC	(9)													Tampa, FL
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.83	%			4/28/2023	4/28/2028	Services: Consumer	$	5,847,846		5,740,907		5,643,171	1.53	%
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.83	%			10/11/2023	4/28/2028			532,972		522,558		514,318	0.14	%
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.83	%			6/30/2023	4/28/2028			265,811		260,822		256,508	0.07	%
Revolver	(11)(27)	First Lien	3M SOFR+	6.50	%	2.00	%	10.83	%			4/28/2023	4/28/2028			82,500		82,500		79,613	0.02	%
Impact Holdings Georgia LLC Class A Units		Equity										4/28/2023				375		375,156		-	0.00	%
Impact Holdings Georgia LLC Class A-1 Units		Equity										1/31/2024				38		37,962		23,001	0.01	%
Total																	$	7,019,905	$	6,516,611	1.77	%
Infolinks Media Buyco, LLC														Ridgewood, NJ
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	5.50	%	1.00	%	9.83	%			11/1/2021	11/1/2026	Media: Advertising, Printing & Publishing	$	7,168,033		7,107,521		7,168,033	1.94	%
Term Loan	(11)	First Lien	3M SOFR+	5.50	%	1.00	%	9.83	%			6/6/2024	11/1/2026			2,440,641		2,411,660		2,440,641	0.66	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	5.50	%	1.00	%	9.83	%			11/1/2021	11/1/2026			1,462,725		1,453,825		1,462,725	0.40	%
Tower Arch Infolinks Media, LP LP Interests	(6)(15)	Equity										10/28/2021				452,781		208,809		682,924	0.18	%
Total																	$	11,181,815	$	11,754,323	3.18	%
Informativ, LLC	(9)													Fresno, CA
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	5.50	%	1.00	%	9.98	%			7/30/2021	7/30/2026	High Tech Industries	$	8,394,781		8,335,177		8,394,781	2.27	%
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	5.50	%	1.00	%	9.98	%			3/31/2022	7/30/2026			6,328,624		6,277,694		6,328,624	1.71	%
Credit Connection Holdings, LLC Series A Units		Equity										7/30/2021				804,384		804,384		1,456,662	0.39	%
Total																	$	15,417,255	$	16,180,067	4.37	%
Inoapps Bidco, LLC	(9)													Houston, TX
Term Loan B	(11)	First Lien	3M SONIA+	5.75	%	1.00	%	10.56	%			2/15/2022	2/15/2027	High Tech Industries	£	9,750,000	$	13,094,801	$	12,114,950	3.28	%
Revolver	(11)	First Lien	1M SOFR+	5.75	%	1.00	%	10.22	%			2/15/2022	2/15/2027			80,000		80,000		80,000	0.02	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	5.75	%	1.00	%	10.60	%			2/15/2022	2/15/2027			81,458		81,032		81,458	0.02	%
Inoapps Holdings, LLC Series A-1 Preferred Units		Equity										2/15/2022				739,844		783,756		1,001,613	0.27	%
Total																	$	14,039,589	$	13,278,021	3.59	%
iNovex Information Systems Incorporated	(9)													Columbia, MD
Term Loan (SBIC II)	(5)(11)	First Lien	1M SOFR+	5.25	%	1.00	%	9.63	%			12/17/2024	12/17/2030	Services: Business	$	7,522,184		7,409,351		7,409,351	2.00	%
Revolver	(11)	First Lien	1M SOFR+	5.25	%	1.00	%	9.61	%			12/17/2024	12/17/2030			28,000		28,000		27,580	0.01	%
Total																	$	7,437,351	$	7,436,931	2.01	%
Invincible Boat Company LLC														Opa Locka, FL
Term Loan	(11)	First Lien	1M SOFR+	7.50	%	1.50	%	12.01	%			8/28/2019	12/31/2026	Consumer Goods: Durable	$	5,342,606		5,328,007		5,182,328	1.40	%
Term Loan (SBIC II)	(5)(11)	First Lien	1M SOFR+	7.50	%	1.50	%	12.01	%			8/28/2019	12/31/2026			4,931,637		4,918,069		4,783,688	1.29	%
Term Loan (SBIC II)	(5)(11)	First Lien	1M SOFR+	7.50	%	1.50	%	12.01	%			6/1/2021	12/31/2026			1,096,691		1,092,703		1,063,790	0.29	%
Revolver	(11)	First Lien	1M SOFR+	7.50	%	1.50	%	12.01	%			8/28/2019	12/31/2026			1,063,830		1,063,830		1,031,915	0.28	%
Warbird Parent Holdco, LLC Class A Units		Equity										8/28/2019				1,362,575		1,299,691		367,676	0.10	%
Total																	$	13,702,300	$	12,429,397	3.36	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

December 31, 2024


															Principal						% of
												Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK		Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
J.R. Watkins, LLC														San Francisco,CA
Term Loan (SBIC)	(4)(19)	First Lien		12.00	%	-	%	-	%	-	%	12/22/2017	5/3/2026	Consumer Goods: Non-Durable	$	13,597,208		13,597,207		2,855,414	0.77	%
Revolver (SBIC)	(4)(9)(19)	First Lien		5.00	%	-	%	-	%	-	%	5/3/2024	5/3/2026			1,125,000		1,125,000		236,250	0.06	%
J.R. Watkins Holdings, Inc. Class A Preferred Stock		Equity										12/22/2017				1,133		1,132,576		-	0.00	%
Total																	$	15,854,783	$	3,091,664	0.83	%
Ledge Lounger, Inc.	(9)													Katy, TX
Term Loan A (SBIC)	(4)(11)	First Lien	3M SOFR+	6.50	%	1.00	%	10.98	%	1.00	%	11/9/2021	11/9/2027	Consumer Goods: Durable	$	7,439,791		7,376,964		7,030,602	1.90	%
Revolver	(11)	First Lien	3M SOFR+	6.50	%	1.00	%	10.98	%	1.00	%	11/9/2021	11/9/2027			58,443		58,443		55,229	0.01	%
SP L2 Holdings LLC Class A Units (SBIC)	(4)	Equity										11/9/2021				375,000		375,000		-	0.00	%
SP L2 Holdings LLC Class C Units (SBIC)	(4)	Equity										10/9/2024				140,834		34,504		-	0.00	%
Total																	$	7,844,911	$	7,085,831	1.91	%
Lightning Intermediate II, LLC	(9)													Jacksonville, FL
Term Loan (SBIC)	(4)(11)	First Lien	6M SOFR+	6.50	%	1.00	%	11.03	%			6/6/2022	6/6/2027	Consumer Goods: Non-Durable	$	12,899,115		12,758,237		12,834,619	3.47	%
Gauge Vimergy Coinvest, LLC Units		Equity										6/6/2022				399		391,274		125,618	0.03	%
Total																	$	13,149,511	$	12,960,237	3.50	%
Luxium Solutions, LLC														Deerfield, OH
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.58	%			5/10/2024	12/1/2027	High Tech Industries	$	8,252,261		8,147,122		8,211,000	2.22	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.58	%			5/10/2024	12/1/2027			1,194,249		1,186,357		1,188,278	0.32	%
Total																	$	9,333,479	$	9,399,278	2.54	%
MacKenzie-Childs Acquisition, Inc.	(9)													Aurora, NY
Term Loan	(11)	First Lien	3M SOFR+	6.00	%	1.00	%	10.48	%			9/2/2022	9/2/2027	Consumer Goods: Durable	$	88,553		87,756		88,553	0.02	%
MacKenzie-Childs Investment, LP Partnership Interests		Equity										9/2/2022				100,000		100,000		100,282	0.03	%
Total																	$	187,756	$	188,835	0.05	%
Madison Logic Holdings, Inc.	(9)													New York, NY
Term Loan	(11)	First Lien	1M SOFR+	7.00	%	1.00	%	11.34	%			12/30/2022	12/30/2028	Media: Advertising, Printing & Publishing	$	3,579,241		3,507,484		3,471,864	0.94	%
Term Loan	(11)	First Lien	1M SOFR+	7.50	%	1.00	%			11.84	%	12/30/2022	12/30/2028			894,810		876,871		867,966	0.23	%
BC Partners Glengarry Co-Investment LP Class 1 Interests	(6)	Equity										7/7/2023				394,767		394,767		214,870	0.06	%
Total																	$	4,779,122	$	4,554,700	1.23	%
MBH Management LLC	(9)													Washington, DC
Term Loan (SBIC II)	(5)(11)	First Lien	1M SOFR+	5.25	%	1.50	%	9.61	%			11/15/2024	11/15/2029	Healthcare & Pharmaceuticals	$	9,476,743		9,291,975		9,291,975	2.51	%
MBH Parent, LLC Common Units		Equity										11/15/2024				646,944		646,944		646,944	0.17	%
Total																	$	9,938,919	$	9,938,919	2.68	%
MedLearning Group, LLC	(9)													New York, NY
Term Loan	(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.58	%			3/26/2024	12/30/2027	Healthcare & Pharmaceuticals	$	4,306,952		4,234,800		4,242,348	1.15	%
Term Loan	(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.58	%			3/26/2024	12/30/2027			2,524,493		2,482,201		2,486,626	0.67	%
Term Loan	(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.58	%			3/26/2024	12/30/2027			2,061,314		2,026,873		2,030,394	0.55	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.58	%			3/26/2024	12/30/2027			489,038		484,148		481,702	0.13	%
Total																	$	9,228,022	$	9,241,070	2.50	%
Michelli, LLC	(9)													New Orleans, LA
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	5.75	%	2.00	%	10.08	%			12/21/2023	12/21/2028	Capital Equipment	$	4,950,000		4,866,492		4,925,250	1.33	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	5.75	%	2.00	%	10.08	%			12/21/2023	12/21/2028			3,876,499		3,840,682		3,857,117	1.04	%
SP MWM Holdco LLC Class A Units		Equity										12/21/2023				509,215		509,215		589,463	0.16	%
Total																	$	9,216,389	$	9,371,830	2.53	%
Microbe Formulas LLC	(9)													Meridian, ID
Term Loan (SBIC II)	(5)(11)	First Lien	1M SOFR+	5.75	%	1.00	%	10.21	%			4/4/2022	4/3/2028	Consumer Goods: Non-Durable	$	7,575,773		7,530,069		7,575,773	2.05	%
Term Loan (SBIC II)	(5)(11)	First Lien	1M SOFR+	5.75	%	1.00	%	10.22	%			11/20/2024	4/3/2028			4,254,419		4,233,579		4,254,419	1.15	%
Total																	$	11,763,648	$	11,830,192	3.20	%
MOM Enterprises, LLC	(9)													Richmond, CA
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.48	%	2.00	%	10.81	%			5/19/2021	5/19/2026	Consumer Goods: Non-Durable	$	15,890,333		15,787,537		15,810,880	4.27	%
Revolver	(11)	First Lien	3M SOFR+	6.48	%	2.00	%	10.81	%			5/19/2021	5/19/2026			37,500		37,500		37,313	0.01	%
MBliss SPC Holdings, LLC Units		Equity										5/19/2021				933,333		933,333		746,138	0.20	%
Total																	$	16,758,370	$	16,594,331	4.48	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

December 31, 2024


															Principal						% of
												Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK		Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
Monarch Behavioral Therapy, LLC	(9)													Addison, TX
Term Loan (SBIC)	(4)(11)	First Lien	1M SOFR+	5.00	%	1.00	%	9.36	%			6/6/2024	6/6/2030	Healthcare & Pharmaceuticals	$	6,730,812		6,605,639		6,663,504	1.80	%
Revolver	(11)	First Lien	1M SOFR+	5.00	%	1.00	%	9.34	%			6/6/2024	6/6/2030			36,136		36,136		35,775	0.01	%
Delayed Draw Term Loan	(11)	First Lien	1M SOFR+	5.00	%	1.00	%	9.36	%			6/6/2024	6/6/2030			382,715		378,952		378,888	0.10	%
BI Investors, LLC Class A Units	(6)	Equity										6/6/2024				4,286		424,738		434,111	0.12	%
Total																	$	7,445,465	$	7,512,278	2.03	%
Monitorus Holding, LLC	(7)													London, UK
Term Loan	(11)	First Lien	3M SOFR+	7.00	%	1.00	%	11.59	%			5/24/2022	5/24/2027	Media: Diversified & Production	$	106,248		105,711		105,186	0.03	%
Revolver	(11)	First Lien	3M SOFR+	7.00	%	1.00	%	11.59	%			5/24/2022	5/24/2027		€	106,498		115,781		114,623	0.03	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	7.00	%	1.00	%	11.59	%			5/24/2022	5/24/2027		€	106,248		107,237		106,165	0.03	%
Sapphire Aggregator S.a r.l. Convertible Bonds	(14)	Unsecured		8.00	%	-	%	-	%	8.00	%	11/15/2023	3/31/2025		€	6,030		6,473		6,216	0.00	%
Sapphire Aggregator S.a r.l. Convertible Bonds	(14)	Unsecured		8.00	%	-	%	-	%	8.00	%	3/1/2024	6/30/2025		€	12,241		13,291		12,620	0.00	%
Sapphire Aggregator S.a r.l. Convertible Bonds	(14)	Unsecured		8.00	%	-	%	-	%	8.00	%	9/30/2024	12/21/2025		€	11,629		13,002		11,989	0.00	%
Sapphire Aggregator S.a r.l. Class A Shares		Equity										9/1/2022				557,689		11,156		12,326	0.00	%
Sapphire Aggregator S.a r.l. Class B Shares		Equity										9/1/2022				557,682		11,156		12,326	0.00	%
Sapphire Aggregator S.a r.l. Class C Shares		Equity										9/1/2022				557,682		11,156		12,326	0.00	%
Sapphire Aggregator S.a r.l. Class D Shares		Equity										9/1/2022				557,682		11,156		12,326	0.00	%
Sapphire Aggregator S.a r.l. Class E Shares		Equity										9/1/2022				557,682		11,156		12,326	0.00	%
Sapphire Aggregator S.a r.l. Class F Shares		Equity										9/1/2022				557,682		11,156		12,326	0.00	%
Sapphire Aggregator S.a r.l. Class G Shares		Equity										9/1/2022				557,682		11,156		12,326	0.00	%
Sapphire Aggregator S.a r.l. Class H Shares		Equity										9/1/2022				557,682		11,156		12,326	0.00	%
Sapphire Aggregator S.a r.l. Class I Shares		Equity										9/1/2022				557,682		11,156		12,326	0.00	%
Total																	$	461,899	$	467,733	0.09	%
Morgan Electrical Group Intermediate Holdings, Inc.	(9)													Fremont, CA
Term Loan	(11)	First Lien	1M SOFR+	6.25	%	1.50	%	10.61	%			8/3/2023	8/3/2029	Construction & Building	$	4,395,044		4,313,186		4,373,069	1.18	%
Delayed Draw Term Loan	(11)	First Lien	1M SOFR+	6.25	%	1.50	%	10.61	%			8/3/2023	8/3/2029			1,705,604		1,688,941		1,697,076	0.46	%
Morgan Electrical Group Holdings, LLC Series A-2 Preferred Units		Equity										8/3/2023				380		380,330		308,668	0.08	%
Total																	$	6,382,457	$	6,378,813	1.72	%
Naumann/Hobbs Material Handling Corporation II, Inc.														Phoenix, AZ
Term Loan	(11)	First Lien	3M SOFR+	6.75	%	1.50	%	11.08	%			8/30/2019	8/30/2025	Services: Business	$	8,125,763		8,116,850		8,044,505	2.17	%
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.75	%	1.50	%	11.08	%			8/30/2019	8/30/2025			5,124,136		5,118,576		5,072,895	1.37	%
Revolver	(11)	First Lien	3M SOFR+	6.75	%	1.50	%	11.08	%			8/30/2019	8/30/2025			1,763,033		1,763,033		1,745,403	0.47	%
Naumann Hobbs Holdings, L.P. Class A-1 Units		Equity										9/29/2022				123		220,379		-	0.00	%
Naumann Hobbs Holdings, L.P. Class A-2 Units		Equity										9/29/2022				123		220,379		-	0.00	%
Naumann Hobbs Holdings, L.P. Class B Units		Equity										12/27/2024				142		142,200		937,078	0.25	%
Total																	$	15,581,417	$	15,799,881	4.26	%
NINJIO, LLC	(9)													Westlake Village, CA
Term Loan	(11)	First Lien	3M SOFR+	6.50	%	1.50	%	11.08	%			10/12/2022	10/12/2027	Media: Diversified & Production	$	4,962,500		4,900,478		4,962,500	1.34	%
Revolver	(11)	First Lien	3M SOFR+	6.50	%	1.50	%	11.08	%			10/12/2022	10/12/2027			33,333		33,333		33,333	0.01	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.50	%	1.50	%	11.08	%			10/12/2022	10/12/2027			100,000		99,204		100,000	0.03	%
NINJIO Holdings, LLC Units		Equity										10/12/2022				184		313,253		314,702	0.09	%
Gauge NINJIO Blocker LLC Preferred Units		Equity										9/22/2023				14		14,470		56,585	0.02	%
Total																	$	5,360,738	$	5,467,120	1.49	%
Norplex Micarta Acquisition, Inc.	(9)													Postville, IA
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	5.25	%	1.50	%	9.84	%			10/31/2024	10/31/2029	Chemicals, Plastics, & Rubber	$	13,000,000		12,746,682		12,746,682	3.45	%
Norplex Micarta Parent, LP Preferred Units		Equity										10/31/2024				739,804		739,804		739,804	0.20	%
Total																	$	13,486,486	$	13,486,486	3.65	%
NS412, LLC														Dallas, TX
Term Loan	(11)	Second Lien	3M SOFR+	8.75	%	1.00	%	13.18	%			5/6/2019	5/6/2026	Services: Consumer	$	7,615,000		7,589,599		7,538,850	2.04	%
NS Group Holding Company, LLC Class A Units		Equity										5/6/2019				782		795,002		598,221	0.16	%
Total																	$	8,384,601	$	8,137,071	2.20	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

December 31, 2024


															Principal						% of
												Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK		Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
NuSource Financial Acquisition, Inc.														Eden Prairie, MN
Term Loan (SBIC II)	(5)	Unsecured		13.75	%	-	%	8.00	%	5.75	%	1/29/2021	1/31/2027	Services: Business	$	6,484,567		6,448,091		6,452,144	1.74	%
NuSource Holdings, Inc. Warrants (SBIC II)	(5)	Equity										1/29/2021				54,966		-		-	0.00	%
Total																	$	6,448,091	$	6,452,144	1.74	%
Onpoint Industrial Services, LLC														Deer Park, TX
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	7.00	%	1.75	%	11.33	%			11/16/2022	11/16/2027	Services: Business	$	12,351,615		12,190,355		12,351,615	3.34	%
Spearhead TopCo, LLC Class A Units		Equity										11/16/2022				606,742		606,742		986,938	0.27	%
Total																	$	12,797,097	$	13,338,553	3.61	%
PCP MT Aggregator Holdings, L.P.	(7)													Oak Brook, IL
Common Units		Equity										3/29/2019		Finance		825,020		119,281		5,092,459	1.38	%
Total																	$	119,281	$	5,092,459	1.38	%
PCS Software, Inc.	(9)													Shenandoah, TX
Term Loan	(11)	First Lien	3M SOFR+	6.00	%	1.50	%	10.48	%			7/1/2019	1/1/2026	Transportation & Logistics	$	13,882,311		13,882,310		13,812,899	3.73	%
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.00	%	1.50	%	10.48	%			7/1/2019	1/1/2026			1,820,631		1,820,631		1,811,528	0.49	%
Revolver	(11)	First Lien	3M SOFR+	6.00	%	1.50	%	10.48	%			7/1/2019	1/1/2026			571,195		571,195		568,339	0.15	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.00	%	1.50	%	10.48	%			7/1/2019	1/1/2026			960,000		960,000		955,200	0.26	%
PCS Software Parent, LLC Class A Common Units		Equity										9/16/2022				471,211		9,995		384,522	0.10	%
Total																	$	17,244,131	$	17,532,488	4.73	%
Pearl Media Holdings, LLC	(24)													Garland, TX
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.25	%	2.00	%	10.73	%			8/31/2022	8/31/2027	Media: Advertising, Printing & Publishing	$	8,680,556		8,577,517		8,593,750	2.32	%
Total																	$	8,577,517	$	8,593,750	2.32	%
Peltram Group Holdings LLC														Auburn, WA
Class A Units	(6)	Equity										12/30/2021		Construction & Building		508,516		492,499		693,537	0.19	%
Total																	$	492,499	$	693,537	0.19	%
Premiere Digital Services, Inc.	(9)													Los Angeles, CA
Term Loan	(11)	First Lien	1M SOFR+	5.25	%	1.00	%	9.59	%			11/3/2021	11/3/2026	Media: Broadcasting & Subscription	$	12,196,092		12,170,577		12,196,092	3.30	%
Premiere Digital Holdings, Inc. Common Stock		Equity										10/18/2018				5,000		-		2,118,619	0.57	%
Total																	$	12,170,577	$	14,314,711	3.87	%
Red's All Natural, LLC														Franklin, TN
Last Out Term Loan (SBIC II)	(5)(10)(12)	First Lien	3M SOFR+	4.50	%	1.50	%	9.88	%			1/31/2023	1/31/2029	Beverage & Food	$	8,815,327		8,681,968		8,815,327	2.38	%
Centeotl Co-Invest B, LP Common Units		Equity										1/31/2023				710,600		710,600		818,825	0.22	%
Total																	$	9,392,568	$	9,634,152	2.60	%
RIA Advisory Borrower, LLC	(9)													Coral Gables, FL
Term Loan	(11)	First Lien	3M SOFR+	6.50	%	2.00	%	11.22	%			5/1/2023	8/2/2027	High Tech Industries	$	5,895,000		5,815,274		5,895,000	1.59	%
Revolver	(11)	First Lien	3M SOFR+	6.50	%	2.00	%	11.22	%			5/1/2023	8/2/2027			26,114		26,114		26,114	0.01	%
RIA Advisory Aggregator, LLC Class A Units		Equity										5/1/2023				104,425		165,078		127,378	0.03	%
RIA Products Aggregator, LLC Class A Units		Equity										5/1/2023				81,251		78,390		78,390	0.02	%
Total																	$	6,084,856	$	6,126,882	1.65	%
Rogers Mechanical Contractors, LLC	(9)													Atlanta, GA
Term Loan	(11)	First Lien	6M SOFR+	6.25	%	1.00	%	10.91	%			4/28/2021	9/28/2028	Construction & Building	$	8,668,481		8,619,680		8,581,796	2.32	%
Total																	$	8,619,680	$	8,581,796	2.32	%
Said Intermediate, LLC	(9)													Boston, MA
Term Loan	(11)	First Lien	1M SOFR+	5.50	%	1.00	%	9.86	%			6/13/2024	6/13/2029	Media: Advertising, Printing & Publishing	$	7,443,117		7,307,325		7,331,470	1.98	%
FCP-Said Holdings, LLC Class A Common Shares		Equity										6/13/2024				804		-		-	0.00	%
FCP-Said Holdings, LLC Series A Preferred Shares		Equity										6/13/2024				852		350,649		290,102	0.08	%
Total																	$	7,657,974	$	7,621,572	2.06	%
Sales Benchmark Index, LLC	(9)													Dallas, TX
Term Loan	(11)	First Lien	3M SOFR+	6.00	%	2.00	%	10.53	%			1/7/2020	7/7/2026	Services: Business	$	12,148,958		12,144,103		12,148,958	3.28	%
SBI Holdings Investments LLC Class A Units		Equity										1/7/2020				66,573		665,730		627,734	0.17	%
Total																	$	12,809,833	$	12,776,692	3.45	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

December 31, 2024


															Principal						% of
												Investment		Headquarters/	Amount/		Amortized		Fair		Net
Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK		Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
Service Minds Company, LLC														Bradenton, FL
Term Loan	(11)(26)	First Lien	PRIME+	7.50	%	1.00	%	-	%	-	%	2/7/2022	2/7/2028	Services: Consumer	$	5,431,921		5,373,590		3,340,631	0.90	%
Revolver	(11)(18)(26)	First Lien	PRIME+	7.50	%	1.00	%	-	%	-	%	2/7/2022	2/7/2028			83,533		83,533		51,373	0.01	%
Revolver	(11)(18)(26)	First Lien	PRIME+	7.50	%	1.00	%	-	%	-	%	7/2/2024	2/7/2028			20,223		20,223		20,223	0.01	%
Revolver	(11)(18)(26)	First Lien	PRIME+	7.50	%	1.00	%	-	%	-	%	9/13/2024	2/7/2028			20,000		20,000		20,000	0.01	%
Revolver	(11)(18)(26)	First Lien	PRIME+	7.50	%	1.00	%	-	%	-	%	11/12/2024	2/7/2028			45,000		45,000		45,000	0.01	%
Delayed Draw Term Loan	(11)(26)	First Lien	PRIME+	7.50	%	1.00	%	-	%	-	%	2/7/2022	2/7/2028			99,116		98,498		60,956	0.02	%
Total																	$	5,640,844	$	3,538,183	0.96	%
TAC LifePort Holdings, LLC														Woodland, WA
Common Units	(6)	Equity										3/1/2021		Aerospace & Defense		546,543		513,825		804,951	0.22	%
Total																	$	513,825	$	804,951	0.22	%
Teckrez, LLC	(9)													Jacksonville, FL
Term Loan	(11)	First Lien	1M SOFR+	6.75	%	2.00	%	11.21	%			5/24/2024	11/30/2028	Chemicals, Plastics, & Rubber	$	4,283,396		4,225,574		4,261,979	1.15	%
Revolver	(11)	First Lien	1M SOFR+	6.75	%	2.00	%	11.21	%			5/24/2024	11/30/2028			721,110		721,110		717,504	0.19	%
HH-Teckrez Parent, LP Preferred Units		Equity														90,139		90,139		127,187	0.03	%
Total																	$	5,036,823	$	5,106,670	1.37	%
The Hardenbergh Group, Inc.	(9)													Livonia, MI
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.93	%			8/7/2023	8/7/2028	Healthcare & Pharmaceuticals	$	10,370,624		10,168,144		10,370,624	2.80	%
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.50	%	2.00	%	10.93	%			9/30/2024	8/7/2028			802,021		786,798		802,021	0.22	%
BV HGI Holdings, L.P. Class A Units		Equity										8/7/2023				434,504		434,504		337,963	0.09	%
Total																	$	11,389,446	$	11,510,608	3.11	%
Tiger 21, LLC	(9)													New York, NY
Term Loan	(11)	First Lien	3M SOFR+	5.00	%	1.00	%	9.32	%			12/30/2024	12/30/2030	Services: Consumer	$	12,000,000		11,760,000		11,760,000	3.18	%
Tiger 21 Blocker, Inc. Class A-3 Common Stock		Equity										12/30/2024				565		564,635		564,635	0.15	%
Total																	$	12,324,635	$	12,324,635	3.33	%
Tilley Distribution, Inc.	(9)													Baltimore, MD
Term Loan	(11)	First Lien	3M SOFR+	6.00	%	1.00	%	10.48	%			4/1/2022	12/31/2026	Chemicals, Plastics, & Rubber	$	92,610		91,943		89,369	0.02	%
Total																	$	91,943	$	89,369	0.02	%
Trade Education Acquisition, L.L.C.														Austin, TX
Term Loan (SBIC)	(4)(28)	First Lien		-	%	1.00	%	-	%			12/28/2021	12/28/2027	Education	$	9,944,460		9,836,078		5,320,286	1.44	%
Revolver	(9)(28)	First Lien	1M SOFR+	9.25	%	1.00	%	-	%			12/28/2021	12/28/2027			39,000		39,000		20,865	0.01	%
Trade Education Holdings, L.L.C. Class A Units		Equity										12/28/2021				662,660		662,660		-	0.00	%
Total																	$	10,537,738	$	5,341,151	1.45	%
TradePending OpCo Aggregator, LLC	(9)													Carrboro, NC
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.25	%	2.00	%	10.73	%			3/2/2021	3/2/2026	High Tech Industries	$	9,527,778		9,473,791		9,527,778	2.58	%
Term Loan (SBIC II)	(5)(11)	First Lien	3M SOFR+	6.25	%	2.00	%	10.73	%			8/4/2023	3/2/2026			2,436,128		2,411,250		2,436,128	0.66	%
Revolver	(11)	First Lien	3M SOFR+	6.25	%	2.00	%	10.73	%			3/2/2021	3/2/2026			33,333		33,333		33,333	0.01	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.25	%	2.00	%	10.73	%			8/4/2023	3/2/2026			680,137		676,477		680,137	0.18	%
TradePending Holdings, LLC Series A Units	(6)	Equity										3/2/2021				908,333		947,699		1,973,113	0.53	%
TradePending Holdings, LLC Series A-1 Units		Equity										8/4/2023				132,783		260,254		520,010	0.14	%
Total																	$	13,802,804	$	15,170,499	4.10	%
TriplePoint Acquisition Holdings LLC	(9)													Columbus, OH
Term Loan	(11)	First Lien	3M SOFR+	5.50	%	1.00	%	9.83	%			5/31/2024	5/31/2029	Construction & Building	$	5,329,708		5,232,677		5,303,059	1.43	%
TriplePoint Holdco LLC Class A Units	(6)	Equity										5/31/2024				557,968		549,818		953,034	0.26	%
Total																	$	5,782,495	$	6,256,093	1.69	%
Unicat Catalyst Holdings, LLC	(21)													Alvin, TX
Term Loan	(11)	First Lien	1M SOFR+	6.50	%	1.00	%	10.96	%			4/27/2021	4/27/2026	Chemicals, Plastics, & Rubber	$	6,843,750		6,801,773		6,843,750	1.85	%
Unicat Catalyst, LLC Class A Units		Equity										4/27/2021				7,500		750,000		819,105	0.22	%
Unicat Catalyst, LLC Class A-1 Units		Equity										12/13/2023				701		38,683		53,090	0.01	%
Total																	$	7,590,456	$	7,715,945	2.08	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

December 31, 2024


Investments	Footnotes	Security⁽²⁾	Coupon			Floor		Cash		PIK		Date	Maturity	Industry	Shares⁽³⁾		Cost		Value⁽¹⁾		Assets
U.S. Expediters, LLC	(9)													Stafford, TX
Term Loan	(11)	First Lien	3M SOFR+	6.25	%	1.00	%	10.78	%			12/22/2021	12/22/2026	Healthcare & Pharmaceuticals	$	14,460,123		14,331,044		14,315,522	3.87	%
Cathay Hypnos LLC Units		Equity										12/22/2021				1,737,087		1,353,155		975,688	0.26	%
Total																	$	15,684,199	$	15,291,210	4.13	%
USDTL AcquisitionCo, Inc.	(9)													Des Plaines, IL
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	5.25	%	1.50	%	9.58	%			12/9/2024	12/9/2030	Healthcare & Pharmaceuticals	$	6,000,000		5,881,196		5,881,196	1.59	%
Revolver	(11)	First Lien	3M SOFR+	5.25	%	1.50	%	9.58	%			12/9/2024	12/9/2030			20,000		20,000		19,604	0.01	%
USDTL Holdings, LLC Preferred Units		Equity										12/9/2024				110		110,000		109,998	0.03	%
Total																	$	6,011,196	$	6,010,798	1.63	%
Venbrook Buyer, LLC														Los Angeles, CA
Term Loan B (SBIC)	(4)(11)	First Lien	3M SOFR+	8.50	%	1.50	%	5.48	%	7.50	%	3/13/2020	3/13/2026	Services: Business	$	14,603,639		14,541,079		13,873,457	3.75	%
Term Loan B	(11)	First Lien	3M SOFR+	8.50	%	1.50	%	5.48	%	7.50	%	3/13/2020	3/13/2026			166,160		165,448		157,852	0.04	%
Revolver	(11)	First Lien	3M SOFR+	8.50	%	1.50	%	5.48	%	7.50	%	3/13/2020	3/13/2026			2,579,814		2,579,814		2,450,823	0.66	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	8.50	%	1.50	%	5.48	%	7.50	%	3/13/2020	3/13/2026			4,979,640		4,967,241		4,730,658	1.28	%
Venbrook Holdings, LLC Convertible Term Loan	(14)	Unsecured		10.00	%	-	%	-	%	10.00	%	3/31/2022	12/20/2028			108,991		108,991		-	0.00	%
Venbrook Holdings, LLC Common Units		Equity										3/13/2020				822,758		819,262		-	0.00	%
Total																	$	23,181,835	$	21,212,790	5.73	%
WER Holdings, LLC	(9)													Sugar Hill, GA
Term Loan (SBIC)	(4)(11)	First Lien	6M SOFR+	5.50	%	1.00	%	9.95	%			4/11/2024	4/11/2030	Services: Business	$	2,690,643		2,641,658		2,650,283	0.72	%
Revolver	(11)	First Lien	3M SOFR+	5.50	%	1.00	%	9.83	%			4/11/2024	4/11/2030			133,870		133,870		131,862	0.04	%
Delayed Draw Term Loan	(11)	First Lien	1M SOFR+	5.50	%	1.00	%	9.87	%			4/11/2024	4/11/2030			824,382		816,172		812,016	0.22	%
Blade Landscape Investments, LLC Class A Units		Equity														1,803		180,300		192,289	0.05	%
Total																	$	3,772,000	$	3,786,450	1.03	%
Whisps Holdings LP														Elgin, IL
Class A Units		Equity										4/18/2019		Beverage & Food		500,000		500,000		-	0.00	%
Class A-1 Units		Equity										3/6/2023				182,610		182,610		-	0.00	%
Total																	$	682,610	$	-	0.00	%
Xanitos, Inc.	(9)													Newtown Square, PA
Term Loan (SBIC)	(4)(11)	First Lien	3M SOFR+	6.50	%	1.00	%	10.98	%			6/25/2021	6/25/2026	Healthcare & Pharmaceuticals	$	12,352,000		12,267,321		12,352,000	3.34	%
Revolver	(11)	First Lien	3M SOFR+	6.50	%	1.00	%	10.98	%			6/25/2021	6/25/2026			140,000		140,000		140,000	0.04	%
Delayed Draw Term Loan	(11)	First Lien	3M SOFR+	6.50	%	1.00	%	10.98	%			6/25/2021	6/25/2026			2,176,309		2,168,201		2,176,309	0.59	%
Pure TopCo, LLC Class A Units		Equity														442,133		1,053,478		1,245,129	0.34	%
Total																	$	15,629,000	$	15,913,438	4.31	%
Total Non-control, non-affiliated investments																	$	943,853,898	$	945,845,252	255.69	%
Total Investments																	$	961,788,706	$	953,497,688	257.76	%
LIABILITIES IN EXCESS OF OTHER ASSETS																			$	(583,575,748)	(157.76)	%
NET ASSETS																			$	369,921,940	100.00	%

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

December 31, 2024

(1)

See Note 1 to the consolidated financial statements contained herein for a discussion of the methodologies used to value securities in the portfolio.

(2)

Debt investments are income producing and equity securities are non-income producing, unless otherwise noted.

(3)

(4)

Investments held by the SBIC I subsidiary (as defined in Note 1 to the consolidated financial statements contained herein), which include $16,925,317 of cash and $240,789,911 of investments (at cost), are excluded from the obligations to the lenders of the Credit Facility (as defined in Note 9). Stellus Capital Investment Corporation’s (the “Company”) obligations to the lenders of the Credit Facility are secured by a first priority security interest in all investments and cash and cash equivalents, except for cash and investments held by the SBIC subsidiaries (as defined in Note 1 to the consolidated financial statements contained herein).

(5)

Investments held by the SBIC II subsidiary (as defined in Note 1 to the consolidated financial statements contained herein), which include $2,793,535 of cash and $272,646,904 of investments (at cost), are excluded from the obligations to the lenders of the Credit Facility. The Company’s obligations to the lenders of the Credit Facility are secured by a first priority security interest in all investments and cash and cash equivalents, except for cash and investments held by the SBIC subsidiaries.

(6)

Security is income producing through dividends or distributions.

(7)

The investment is not a “qualifying asset” under the Investment Company Act of 1940, as amended. The Company may not acquire any non-qualifying assets unless, at the time of the acquisition, qualifying assets represent at least 70% of the Company’s total assets. Qualifying assets represent approximately 95.2% of the Company’s total assets as of December 31, 2024.

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

December 31, 2024

(8)

(9)

At December 31, 2024, the Company had the following outstanding revolver and delayed draw term loan commitments:


				Unused
		Unfunded		Commitment
Investments	Security	Commitment		Fee	Maturity
2X LLC	Revolver	$	87,500	0.50%	June 5, 2028
Ad.Net Acquisition, LLC	Revolver		444,803	0.50%	May 7, 2026
AdCellerant LLC	Revolver		875,995	0.50%	December 12, 2028
ADS Group Opco, LLC	Revolver		60,149	0.00%	December 31, 2027
AGT Robotique Inc.	Revolver		1,526,600	0.50%	June 22, 2029
American Refrigeration, LLC	Revolver		100,000	0.50%	March 31, 2028
AMII Acquisition, LLC	Revolver		500,000	0.50%	December 4, 2029
Amika OpCo LLC *	Revolver		100,000	0.50%	July 1, 2028
Anne Lewis Strategies, LLC	Revolver		50,000	0.50%	May 9, 2028
ArborWorks, LLC	Revolver		1,325,032	0.00%	November 6, 2028
Axis Portable Air LLC	Revolver		100,000	0.50%	March 22, 2028
Bart & Associates, LLC	Revolver		942,010	0.50%	August 16, 2030
Bart & Associates, LLC	Delayed Draw Term Loan		1,733,387	1.00%	August 16, 2030
Camp Profiles LLC	Revolver		100,000	0.50%	September 3, 2026
Carolinas Buyer, Inc.	Delayed Draw Term Loan		2,216,358	1.00%	December 20, 2030
Carolinas Buyer, Inc.	Revolver		100,000	0.50%	December 20, 2030
CEATI International Inc.	Revolver		100,000	0.50%	December 31, 2027
Cerebro Buyer, LLC	Delayed Draw Term Loan		1,130,707	1.00%	March 15, 2029
Cerebro Buyer, LLC	Revolver		100,000	0.50%	March 15, 2029
CF512, Inc.	Revolver		100,000	0.50%	September 1, 2026
Channel Partners Intermediateco, LLC	Revolver		18,333	0.50%	February 7, 2027
CompleteCase, LLC	Revolver		166,667	0.50%	December 21, 2025
Compost 360 Acquisition, LLC	Revolver		14,000	0.50%	August 2, 2028
COPILOT Provider Support Services, LLC	Revolver		71,667	0.50%	November 22, 2027
Craftable Intermediate II Inc.	Revolver		100,000	0.50%	June 30, 2028
Curion Holdings, LLC	Revolver		35,499	0.50%	July 29, 2027
DRS Holdings III, Inc.	Revolver		909,091	0.50%	November 1, 2025
Equine Network, LLC	Revolver		33,333	0.50%	May 22, 2028
Eskola, LLC**	Delayed Draw Term Loan		3,918,298	1.00%	December 19, 2029
evolv Consulting, LLC	Revolver		1,363,636	0.50%	December 7, 2028
Evriholder Acquisition, Inc.	Revolver		100,000	0.50%	January 24, 2028
Exigo, LLC	Revolver		100,000	0.50%	March 16, 2027
FairWave Holdings, LLC	Delayed Draw Term Loan		976,811	0.50%	April 1, 2029
FairWave Holdings, LLC	Revolver		485,473	0.50%	April 1, 2029
FiscalNote Boards LLC	Delayed Draw Term Loan		627,139	1.00%	March 12, 2029
FiscalNote Boards LLC	Revolver		391,962	0.50%	March 12, 2029
Florachem Corporation	Revolver		33,333	0.50%	April 29, 2028
GS HVAM Intermediate, LLC	Revolver		477,273	0.50%	February 28, 2026
Guidant Corp.	Revolver		1,055,707	0.50%	March 12, 2029
HV Watterson Holdings, LLC	Revolver		2,006	0.50%	December 17, 2026
Impact Home Services LLC	Delayed Draw Term Loan		1,571,984	1.00%	April 28, 2028

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

December 31, 2024


				Unused
		Unfunded		Commitment
Investments	Security	Commitment		Fee	Maturity
Informativ, LLC	Revolver	$	100,000	0.50%	July 30, 2026
Inoapps Bidco, LLC	Revolver		20,000	0.50%	February 15, 2027
iNovex Information Systems Incorporated	Revolver		72,000	0.50%	December 17, 2030
J.R. Watkins, LLC	Revolver		337,433	0.00%	May 3, 2026
Ledge Lounger, Inc.	Revolver		24,915	0.50%	November 9, 2027
Lightning Intermediate II, LLC	Revolver		100,000	0.50%	June 6, 2027
MacKenzie-Childs Acquisition, Inc.	Revolver		100,000	0.50%	September 2, 2027
Madison Logic Holdings, Inc.	Revolver		52,632	0.50%	December 30, 2027
MBH Management LLC	Delayed Draw Term Loan		500,000	1.00%	November 15, 2029
MBH Management LLC	Revolver		500,000	0.50%	November 15, 2029
MedLearning Group, LLC	Delayed Draw Term Loan		1,956,150	1.00%	December 30, 2027
Michelli, LLC	Revolver		1,296,076	0.50%	December 21, 2028
Microbe Formulas LLC	Revolver		100,000	0.50%	April 3, 2028
MOM Enterprises, LLC	Revolver		62,500	0.50%	May 19, 2026
Monarch Behavioral Therapy, LLC	Delayed Draw Term Loan		701,036	1.00%	June 6, 2030
Monarch Behavioral Therapy, LLC	Revolver		686,582	0.50%	June 6, 2030
Morgan Electrical Group Intermediate Holdings, Inc.	Delayed Draw Term Loan		1,145,662	1.00%	August 3, 2029
Morgan Electrical Group Intermediate Holdings, Inc.	Revolver		100,000	0.50%	August 3, 2029
NINJIO, LLC	Revolver		66,667	0.50%	October 12, 2027
Norplex Micarta Acquisition, Inc.	Revolver		500,000	0.50%	October 31, 2029
PCS Software, Inc.	Revolver		746,948	0.50%	January 1, 2026
Premiere Digital Services, Inc.	Revolver		576,923	0.50%	November 3, 2026
RIA Advisory Borrower, LLC	Revolver		73,886	0.50%	August 2, 2027
Rogers Mechanical Contractors, LLC	Revolver		83,333	0.50%	September 28, 2028
Said Intermediate, LLC	Revolver		1,168,831	0.50%	June 13, 2029
Sales Benchmark Index, LLC	Revolver		1,109,551	0.50%	July 26, 2026
Teckrez, LLC	Revolver		721,110	1.00%	November 30, 2028
The Hardenbergh Group, Inc.	Revolver		100,000	0.50%	August 6, 2028
Tiger 21, LLC	Revolver		100,000	0.50%	December 30, 2030
Tilley Distribution, Inc.	Revolver		100,000	0.50%	December 31, 2026
Trade Education Acquisition, L.L.C.	Revolver		41,000	0.50%	December 28,2027
TradePending OpCo Aggregator, LLC	Revolver		66,667	0.50%	March 2, 2026
TriplePoint Acquisition Holdings LLC	Delayed Draw Term Loan		1,339,123	1.00%	May 31, 2029
TriplePoint Acquisition Holdings LLC	Revolver		743,957	0.50%	May 31, 2029
U.S. Expediters, LLC	Revolver		30,000	0.50%	December 22, 2026
USDTL AcquisitionCo, Inc.	Delayed Draw Term Loan		500,000	1.00%	December 9, 2030
USDTL AcquisitionCo, Inc.	Revolver		80,000	0.50%	December 9, 2030
WER Holdings, LLC	Delayed Draw Term Loan		514,059	1.00%	April 11, 2030
WER Holdings, LLC***	Revolver		267,739	0.50%	April 11, 2030
Xanitos, Inc.	Revolver		60,000	0.50%	June 25, 2026
	Total Unfunded Debt Commitments	$	40,989,533

* Included in this investment is Line of Credit in the amount of $4,861, with Line of Credit rate of 5.25% and a maturity of July 1, 2028.

** This a last-out delayed draw term loan with contractual rates higher than the applicable rates.

*** Included in this investment is Line of Credit in the amount of $41,071, with Line of Credit rate of 5.50% and a maturity of April 11, 2030.

(10)

This loan is a unitranche investment.

(11)

These loans include an interest rate floor feature which is lower than the applicable rates; therefore, the floor is not in effect.

(12)

These loans are last-out term loans with contractual rates higher than the applicable rates; therefore, the floor is not in effect.

(13)

Investment has been on non-accrual since November 1, 2024.

(14)

This loan is convertible to common units at maturity or at the majority of holders.

(15)

Excluded from the investment is an uncalled capital commitment in an amount not to exceed $297,219.

(16)

Investment has been on non-accrual since the later of January 1, 2023 or the investment date.Investment has been on non-accrual since November 6, 2023.

(17)

Investment has been on non-accrual since November 6, 2023.

Table of Contents

Stellus Capital Investment Corporation

Consolidated Schedule of Investments

December 31, 2024

(18)

The Company has full discretion to fund the revolver commitment, with an unfunded rate of 0.00% and a maturity of February 7, 2028. As of December 31, 2024, there was no undrawn revolver commitment.

(19)

Investment has been on non-accrual since January 1, 2024.

(20)

(21)

Excluded from the investment is an undrawn revolver commitment in an amount not to exceed $1,500,000, with an unfunded rate of 0.00% and a maturity of July 31, 2025. The Company has full discretion to fund the revolver commitment.

(22)

(23)


														Amount of Interest
			December 31, 2023		Gross Additions		Gross Reductions	Amount of Realized		Amount of Unrealized		December 31, 2024		Credited to Income
Investments	Security		Value		(a)		(b)	Gain (loss)		Gain (loss)		Value		(c)
EH Real Estate Services, LLC
Term Loan A-1	First Lien	$	-	$	1,882,226	$	-	$	-	$	(1,628,125)	$	254,101	-
Term Loan A-1 (SBIC)	First Lien		3,042,204		-		(5,255,564)		-		2,213,360		-	81,636
Term Loan A-2	First Lien		325,059		80,664		-		-		(317,846)		87,877	-
Term Loan A-2 (SBIC)	First Lien		650,118		-		(1,140,558)		-		490,440		-	-
Term Loan A-3	First Lien		111,979		34,223		-		-		(115,060)		31,142	-
Term Loan A-3 (SBIC)	First Lien		223,959		-		(392,910)		-		168,951		-	-
Term Loan A-4	First Lien		496,828		1,003,691		-		-		5,018		1,505,537	-
Term Loan A-4 (SBIC)	First Lien		993,654		-		(1,003,691)		-		10,037		-	-
Term Loan A-5	First Lien		-		5,710,182		-		-		-		5,710,182	-
Revolver	First Lien		332,190		68,434		(337,027)		-		-		63,597	-
EH Holdco, LLC Common Units	Equity		3		-		-		-		(3)		-	-
EH Holdco, LLC Series A Preferred Units	Equity		-		-		-		-		-		-	-
Total Control Investments		$	6,175,994	$	8,779,420	$	(8,129,750)	$	-	$	826,772	$	7,652,436	81,636

(b) Gross reductions include decreases in the cost basis of investments resulting from principal repayments, sales and return of capital.

(c) Represents the total amount of interest, fees or dividends credited to income for the portion of the year an investment was included in the Control category.

(24)	Excluded from the investment is an undrawn revolver commitment in an amount not to exceed $100,000, with an unfunded rate of 0.00% and a maturity of August 31, 2027. The Company has full discretion to fund the revolver commitment.

(25)	Investment has been on non-accrual since the later of September 1, 2024 or the investment date.

(26)	Investment has been on non-accrual since the later of August 21, 2024 or the investment date.

(27)	Excluded from the investment is an undrawn revolver commitment in an amount not to exceed $17,500 with an unfunded rate of 0.50% and a maturity of April 28, 2028. The Company has full discretion to fund the revolver commitment.

(28)	Investment has been on non-accrual since June 1, 2024.

Abbreviation Legend

BSBY — Bloomberg Short-Term Bank Yield Index

PIK — Payment-In-Kind

SOFR — Secured Overnight Financing Rate

SONIA — Sterling Overnight Index Average

Table of Contents

STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

NOTE 1 — NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Stellus Capital Investment Corporation (“we”, “us”, “our” and the “Company”) was formed as a Maryland corporation on May 18, 2012 (“Inception”) and is an externally managed, closed-end, non-diversified investment management company. The Company is applying the guidance of Accounting Standards Codification (“ASC”) Topic 946, Financial Services Investment Companies (“ASC Topic 946”). The Company has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), and has elected to be treated, qualifies, and intends to qualify annually to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), for U.S. federal income tax purposes. The Company’s investment activities are managed by its investment adviser, Stellus Capital Management, LLC (“Stellus Capital” or the “Advisor”).

As of March 31, 2025, the Company had issued a total of 28,137,203 shares and raised $407,773,355 in gross proceeds since Inception, incurring an aggregate of $12,496,575 in offering expenses and sales load fees. Additionally, the Company has received $672,917 in offering expenses reimbursements from the Advisor for net proceeds from offerings of $395,949,697. The Company’s shares are currently listed on the New York Stock Exchange under the symbol “SCM”. See Note 4 to the consolidated financial statements contained herein for further details.

The Company has established the following wholly owned subsidiaries: SCIC — Consolidated Blocker, Inc., SCIC — Invincible Blocker 1, Inc., SCIC — SKP Blocker 1, Inc., SCIC — APE Blocker 1, Inc., SCIC — Venbrook Blocker, Inc., SCIC — CC Blocker 1, Inc., SCIC — ERC Blocker 1, Inc., and SCIC — Hollander Blocker 1, Inc., which are structured as Delaware entities, to hold equity or equity-like investments in portfolio companies organized as limited liability companies, or LLCs (or other forms of pass-through entities) (collectively, the “Taxable Subsidiaries”). The Taxable Subsidiaries are consolidated for U.S. generally accepted accounting principles (“U.S. GAAP”) reporting purposes, and the portfolio investments held by them are included in the consolidated financial statements.

On June 14, 2013, the Company formed Stellus Capital SBIC, LP (the “SBIC I subsidiary”), a Delaware limited partnership, and its general partner, Stellus Capital SBIC GP, LLC, a Delaware limited liability company, as wholly owned subsidiaries of the Company. On June 20, 2014, the SBIC I subsidiary received a license from the U.S. Small Business Administration (“SBA”) to operate as a Small Business Investment Company (“SBIC”) under Section 301(c) of the Small Business Investment Act of 1958, as amended (the “SBIC Act”). The SBIC I subsidiary and its general partner are consolidated for U.S. GAAP reporting purposes, and the portfolio investments held by it are included in the consolidated financial statements.

On November 29, 2018, the Company formed Stellus Capital SBIC II, LP (the “SBIC II subsidiary”), a Delaware limited partnership. On August 14, 2019, the SBIC II subsidiary received a license from the SBA to operate as an SBIC under Section 301(c) of the SBIC Act. The SBIC II subsidiary and its general partner, Stellus Capital SBIC GP, LLC, are consolidated for U.S. GAAP reporting purposes, and the portfolio investments held by it are included in the consolidated financial statements.

The SBIC licenses allow the SBIC I subsidiary and SBIC II subsidiary (together, “the SBIC subsidiaries”) to obtain leverage by issuing SBA-guaranteed debentures, subject to the issuance of a capital commitment by the SBA and other customary procedures. SBA-guaranteed debentures are non-recourse, interest only debentures with interest payable semi-annually and have a ten-year maturity. The principal amount of SBA-guaranteed debentures is not required to be paid prior to maturity but may be prepaid at any time without penalty. The interest rate of SBA-guaranteed debentures is fixed on a semi-annual basis at a market-driven spread over U.S. Treasury Notes with 10-year maturities. The SBA, as a creditor, will have a superior claim to the SBIC subsidiaries’ assets over the Company’s stockholders in the event the Company liquidates one or both of the SBIC subsidiaries or the SBA exercises its remedies under the SBA-guaranteed debentures issued by the SBIC subsidiaries upon an event of default. For the SBIC I subsidiary, SBA regulations limit the amount that the SBIC I subsidiary may borrow to a maximum of $150,000,000 when it has at least $75,000,000 in regulatory capital, as such term is defined by the SBA. For the SBIC II subsidiary, SBA regulations limit the amounts that the SBIC II subsidiary may borrow to

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STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

$175,000,000 when it has at least $87,500,000 in regulatory capital, as such term is defined by the SBA. For two or more SBICs under common control, the maximum amount of outstanding SBA-guaranteed debentures cannot exceed $350,000,000.

As of both March 31, 2025 and December 31, 2024, the SBIC I subsidiary had $75,000,000 in regulatory capital. As of both March 31, 2025 and December 31, 2024, the SBIC II subsidiary had $87,500,000 in regulatory capital.

As of March 31, 2025 and December 31, 2024, the SBIC I subsidiary had $133,750,000 and $150,000,000 of SBA-guaranteed debentures outstanding, respectively. As of both March 31, 2025 and December 31, 2024, the SBIC II subsidiary had $175,000,000 of SBA-guaranteed debentures outstanding. See footnotes (4) and (5) of the Consolidated Schedule of Investments for additional information regarding the treatment of investments in the SBIC subsidiaries with respect to the Credit Facility (as defined in Note 9).

Under the 1940 Act, the Company is allowed to incur a maximum asset coverage ratio of 150% if certain requirements are met, including the approval of a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) of the Company’s Board of Directors (the “Board”) and the approval of the Company’s stockholders. On April 4, 2018, the Board, including a “required majority” of the Board, approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act. At the Company’s 2018 annual meeting of stockholders, the Company’s stockholders also approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act. As a result, the asset coverage ratio requirement applicable to the Company was decreased from 200% to 150%, effective June 29, 2018. The amount of leverage that the Company employs at any time depends on its assessment of the market and other factors at the time of any proposed borrowing. As of March 31, 2025, the Company’s asset coverage ratio was 216%.

The Company’s investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation through debt and related equity investments in lower middle-market companies. The Company seeks to achieve its investment objective by originating and investing primarily in private U.S. lower 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, second lien, unitranche and unsecured debt financings, often with corresponding equity co-investments. The Company sources investments primarily through the extensive network of relationships that the principals of Stellus Capital have developed with financial sponsor firms, financial institutions, lower middle-market companies, management teams and other professional intermediaries.

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared on the accrual basis of accounting in conformity with generally accepted accounting principles in the U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, certain disclosures accompanying the annual financial statements prepared in accordance with U.S. GAAP are omitted. The unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

In the opinion of management, the unaudited consolidated financial results included herein contain all adjustments, consisting solely of normal recurring accruals, considered necessary for the fair presentation of the financial statements for the interim periods included herein. The results of operations for the three months ended March 31, 2025 and March 31, 2024 are not necessarily indicative of the operating results to be expected for the full year. Also, the unaudited consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2024.

In accordance with Regulation S-X under the Exchange Act, the Company does not consolidate portfolio company investments. The accounting records of the Company are maintained in U.S. dollars.

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STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

Economic Developments

Economic activity has continued to accelerate across sectors and regions. Nonetheless, the Company has observed and continues to observe supply chain interruptions, labor resource shortages, commodity inflation, fluctuating interest rates, bank impairments and failures, economic sanctions in response to international conflicts and instances of geopolitical, economic and financial market instability in the United States and abroad, including as a result of the imposition of tariffs in the United States or its trading partners. One or more of these factors may contribute to increased market volatility and may have long- and short-term effects in the United States and worldwide financial markets.

Portfolio Investment Classification

The Company classifies its portfolio investments in accordance with the requirements of the 1940 Act as follows: (a) “Control Investments” are defined as investments in which the Company owns more than 25% of the voting securities or has rights to maintain greater than 50% of the board representation, (b) “Affiliate Investments” are defined as investments in which the Company owns between 5% and 25% of the voting securities and does not have rights to maintain greater than 50% of the board representation, and (c) “Non-controlled, non-affiliate investments” are defined as investments that are neither Control Investments or Affiliate Investments.

Cash and Cash Equivalents

As of March 31, 2025, cash balances totaling $106,289, including foreign currency of $90 (acquisition cost of $90), did not exceed Federal Deposit Insurance Corporation ("FDIC") insurance protection levels of $250,000. In addition, as of March 31, 2025, the Company held $10,782,532 in cash equivalents in money market mutual funds, which are carried at net asset value, which is considered a Level 1 valuation technique. All of the Company’s cash deposits are held at large established high credit quality financial institutions, and management believes that risk of loss associated with any uninsured balances is remote.

Cash consists of bank demand deposits. The Company deem certain money market mutual funds, U.S. Treasury Bills, and other high-quality, short-term debt securities as cash equivalents.

Fair Value Measurements

The Company accounts for all of its financial instruments at fair value in accordance with ASC Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework used to measure fair value, and requires disclosures for fair value measurements, including the categorization of financial instruments into a three-level hierarchy based on the transparency of valuation inputs. ASC Topic 820 requires disclosure of the fair value of financial instruments for which it is practical to estimate such value. The Company believes that the carrying amounts of its financial instruments related to receivables and payables approximate the fair value of these items due to the short maturity of these instruments, which are considered Level 2 in the fair value hierarchy.

The Credit Facility, SBA-guaranteed debentures, and Notes Payable (as defined in Note 11) are carried at amortized cost in the Consolidated Statements of Assets and Liabilities. As of March 31, 2025, the estimated fair value of the Credit Facility approximates the carrying value because the interest rates adjust to the current market interest rate (Level 3 classification). Valuation techniques and significant inputs used to determine fair value include Company details; credit, market and liquidity risk and events; financial health of the Company; place in the capital structure; interest rate; and terms and conditions of the Credit Facility. The estimated fair value of the SBA-guaranteed debentures and Notes Payable was determined by discounting projected remaining payments using market interest rates for borrowings of the Company and entities with similar credit risks at the measurement date. At the measurement date, the estimated fair values of the SBA-guaranteed debentures and Notes Payable as prepared for disclosure purposes was $289,802,340 (Level 3 classification) and $97,814,000 (Level 2 classification), respectively. See Note 6 to the consolidated financial statements contained herein for further discussion regarding the fair value measurements and hierarchy.

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STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

Consolidation

As permitted under Regulation S-X under the Exchange Act and ASC Topic 946, the Company generally does not consolidate its investments in a portfolio company other than an investment company subsidiary. Accordingly, the Company consolidated the results of the SBIC subsidiaries and the Taxable Subsidiaries. All intercompany balances have been eliminated upon consolidation.

Use of Estimates

The preparation of the Consolidated Statements of Assets and Liabilities in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ materially. Additionally, as explained in Note 1, the consolidated financial statements include investments in the portfolio whose values have been determined in good faith by the Board, pursuant to procedures approved by the Board, in the absence of readily ascertainable market values. Because of the inherent uncertainty of the investment portfolio valuations, those estimated values may differ materially from the values that would have been determined had a ready market for the securities existed.

Deferred Financing Costs

Deferred financing costs, prepaid loan fees on SBA-guaranteed debentures and prepaid loan structure fees consist of fees and expenses paid in connection with the closing of the Credit Facility, Notes Payable and SBA-guaranteed debentures, and are capitalized at the time of payment. These costs are amortized using the straight-line method over the term of the respective instrument and are presented as an offset to the corresponding debt on the Consolidated Statements of Assets and Liabilities.

Offering Costs

Deferred offering costs consist of fees and expenses incurred in connection with the offer and sale of the Company’s common stock, including legal, accounting and printing fees and other related expenses, as well as costs incurred in connection with the filing of a shelf registration statement and related prospectuses. These costs are capitalized when incurred and recognized as a reduction of offering proceeds when the offering is consummated and shown on the Consolidated Statements of Changes in Net Assets as a reduction to Paid-in capital.

Investments

Rule 2a-5 under the 1940 Act (“Rule 2a-5”) establishes requirements for determining the fair value of a BDC’s investments in good faith for purposes of the 1940 Act. Rule 2a-5 permits boards of directors of BDCs to designate certain parties to perform fair value determinations, subject to oversight of the board of directors and compliance with certain conditions. Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a board of directors must determine the fair value of a security. Rule 31a-4 under the 1940 Act (“Rule 31a-4”) establishes additional recordkeeping requirements related to fair value determinations. While the Board has not elected to designate the Advisor as the valuation designee, the Company has adopted certain revisions to its valuation policies and procedures in order to comply with the applicable requirements of Rule 2a-5 and Rule 31a-4.

As a BDC, the Company will generally invest in illiquid loans and securities, including debt and equity securities of private lower middle-market companies. Section 2(a)(41) of the 1940 Act requires that a BDC value its assets as follows: (i) the third-party price for securities for which a market quotation is readily available; and (ii) for all other securities and assets, fair value, as determined in good faith under procedures adopted by a BDC's board or valuation designee, as applicable. Under procedures established by the Board, the Company values investments for which market quotations are readily available at such market quotations. The Company obtains these

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STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

market values from an independent pricing service or at the midpoint of the bid and ask prices obtained from at least two brokers or dealers (if available; otherwise, by a principal market maker or a primary market dealer). Debt and equity securities that are not publicly traded or whose market prices are not readily available will be valued at fair value as determined in good faith by the Board. Such determination of fair value may involve subjective judgments and estimates. The Company also engages independent valuation providers to review the valuation of each portfolio investment that does not have a readily available market quotation at least twice annually.

Debt and equity investments purchased within approximately 90 days of the valuation date will be valued at cost plus accreted discount, or minus amortized premium, which approximates fair value. With respect to unquoted securities, the Board values each investment considering, among other measures, discounted cash flow models, comparisons of financial ratios of peer companies that are public and other factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, the Board uses the pricing indicated by the external event to corroborate and/or assist in the valuation. Because the Company expects that there will not be a readily available market quotation for many of the investments in its portfolio, the Company expects to value most of its portfolio investments at fair value as determined in good faith by the Board using a documented valuation policy and a consistently applied valuation process. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market quotation, the fair value of the Company’s investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material. In following these approaches, the types of factors that will be taken into account in fair value pricing investments include, as relevant, but are not limited to:available current market data, including relevant and applicable market trading and transaction comparables;

●

applicable market yields and multiples;

●

financial covenants;

●

call protection provisions;

●

information rights;

●

the nature and realizable value of any collateral;

●

the portfolio company’s ability to make payments, its earnings and discounted cash flows and the markets in which it does business;

●

comparisons of financial ratios of peer companies that are public;

●

comparable merger and acquisition transactions; and

●

the principal market and enterprise values.

Revenue Recognition

The Company records interest income on an accrual basis to the extent such interest is deemed collectible. Payment-in-kind (“PIK”) interest represents contractual interest accrued and added to the loan balance that generally becomes due at maturity. The Company will not accrue any form of interest on loans and debt securities if it has reason to doubt its ability to collect such interest. Loan origination fees, original issue discount and market discount or premium are capitalized, and the Company then accretes or amortizes such amounts using the effective interest method as interest income. Upon the prepayment of a loan or debt security, any unamortized loan origination

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STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

fee is recorded as interest income. The Company records prepayment premiums on loans and debt securities as other income. Dividend income, if any, will be recognized on the ex-dividend date.

A presentation of the interest income the Company has earned from its portfolio companies for the three months ended March 31, 2025 and 2024 is as follows:


	For the three months ended
	March 31, 2025		March 31, 2024
Loan interest	$	22,350,506	$	22,991,087
PIK income		976,479		750,054
Fee amortization income⁽¹⁾		761,383		771,741
Fee income acceleration⁽²⁾		38,748		525,605
Total Interest Income	$	24,127,116	$	25,038,487

(1)	Includes amortization of fees on unfunded commitments.

(2)	Unamortized loan origination fees recognized upon full or partial realization of investment.

To maintain the Company’s treatment as a RIC, substantially all of this income must be paid to stockholders in the form of distributions, even if the Company has not collected any cash.

Management considers portfolio company specific circumstances as well as other economic factors in determining the collectability of interest income. As of March 31, 2025, the Company had loans to five portfolio companies that were on non-accrual status, which represented approximately 6.7% of our loan portfolio at cost and 4.0% at fair value. As of December 31, 2024, the Company had loans to seven portfolio companies that were on non-accrual status, which represented approximately 8.3% of the Company’s loan portfolio at cost and 5.4% at fair value. As of March 31, 2025 and December 31, 2024, $7,815,837 and $6,509,852, respectively, of income from investments on non-accrual had not been accrued. If a loan or debt security’s status significantly improves regarding the debtor’s ability to service the debt or other obligations, or if a loan or debt security is sold or written off, the Company will remove it from non-accrual status.

Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation

Realized gains or losses are measured by the difference between the net proceeds from the repayment, sale or disposition and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.

Foreign currency amounts are translated into U.S. Dollars (USD) on the following basis:

●

fair value of investment securities, other assets and liabilities—at the spot exchange rate on the last business day of the period; and

●

purchases and sales of investment securities, income and expenses—at the rates of exchange prevailing on the respective dates of such investment transactions, income or expenses.

Investment Transaction Costs

Costs that are material and associated with an investment transaction, including legal expenses, are included in the cost basis of purchases and deducted from the proceeds of sales unless such costs are reimbursed by the borrower.

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STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

Receivables and Payables for Unsettled Securities Transactions

The Company records all investments on a trade date basis.

U.S. Federal Income Taxes

The Company has elected and intends to qualify annually to be treated as a RIC under Subchapter M of the Code. To qualify as a RIC, among other things, the Company generally is required to timely distribute to its stockholders at least 90% of investment company taxable income, as defined by the Code, for each year. So long as the Company maintains its status as a RIC, it generally will not be subject to U.S. federal income tax on any ordinary income or capital gains that it distributes at least annually to its stockholders as dividends. Rather, any tax liability related to income earned by the Company represents obligations of the Company’s investors and will not be reflected in the Consolidated Financial Statements of the Company.

To avoid a 4% U.S federal excise tax on undistributed earnings, the Company is required to distribute each calendar year the sum of (i) 98% of its ordinary income for such calendar year, (ii) 98.2% the amount by which the Company’s capital gain exceeds its capital loss (adjusted for certain ordinary losses) for the one-year period ending October 31 in that calendar year, and (iii) certain undistributed amounts from previous years on which the Company paid no U.S. federal income tax, or the “Excise Tax Avoidance Requirement”. For this purpose, however, any net ordinary income or capital gain net income retained by the Company that is subject to U.S. federal income tax for the tax year ending in that calendar year will be considered to have been distributed by year end (or earlier if estimated taxes are paid). The Company, at its discretion, may choose not to distribute all its taxable income for the calendar year and pay a non-deductible 4% excise tax on this income. If the Company chooses to do so, all other things being equal, this would increase expenses and reduce the amount of cash available to be distributed to stockholders. To the extent that the Company determines that its estimated current year annual taxable income will be in excess of estimated current year dividend distributions from such taxable income, the Company accrues excise taxes on estimated excess taxable income as taxable income is earned.

Current income tax expense for the three months ended March 31, 2025 of $499,547 was mostly related to excise and franchise taxes. Income tax expense for the three months ended March 31, 2024 of $370,719 was mostly related to excise and franchise taxes.

The Company evaluates tax positions taken or expected to be taken while preparing its tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions deemed to meet a “more-likely-than-not” threshold would be recorded as a tax benefit or expense in the applicable period. As of March 31, 2025 and December 31, 2024, the Company had not recorded a liability for any unrecognized tax positions. Management’s evaluation of uncertain tax positions may be subject to review and adjustment at a later date based upon factors including, but not limited to, an on-oing analysis of tax laws, regulations and interpretations thereof. The Company’s policy is to include interest and penalties related to income taxes, if applicable, in general and administrative expenses. Any expenses for the three months ended March 31, 2025 and 2024 were de minimis.

The Taxable Subsidiaries are direct wholly owned subsidiaries of the Company that have elected to be treated as corporations for U.S. federal income tax purposes, and as a result, the income of Taxable Subsidiaries is subject to U.S. federal income tax at corporate rates. The Taxable Subsidiaries permit the Company to hold equity investments in portfolio companies that are “pass through” entities for tax purposes and continue to comply with the “source-of-income” requirements contained in RIC tax provisions of the Code. The Taxable Subsidiaries are not consolidated with the Company for income tax purposes and may generate income tax expense, benefit, and the related tax assets and liabilities, as a result of their ownership of certain portfolio investments. The income tax expense, or benefit, if any, and related tax assets and liabilities of the Taxable Subsidiaries are reflected in the Company’s consolidated financial statements.

The Taxable Subsidiaries use the liability method in accounting for income taxes. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, using statutory tax rates in effect for the year in which the temporary differences are expected to reverse. A valuation allowance is provided against deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.

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STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses. Taxable income generally excludes net unrealized appreciation or depreciation, as investment gains or losses are not included in taxable income until they are realized.

For the three months ended March 31, 2025, the Company did not record deferred income tax benefit or provision related to the Taxable Subsidiaries. For the three months ended March 31, 2024, the Company recorded deferred income tax provision of ($192,607) related to the Taxable Subsidiaries. In addition, as of both March 31, 2025 and December 31, 2024, the Company had a net deferred tax liability of $0.

Earnings per Share

Basic per share calculations are computed utilizing the weighted average number of shares of the Company’s common stock outstanding for the period. The Company has no common stock equivalents. As a result, there is no difference between diluted earnings per share and basic per share amounts.

Paid In Capital

The Company records the proceeds from the sale of shares of its common stock on a net basis to (i) capital stock and (ii) paid in capital in excess of par value, excluding all commissions and marketing support fees.

Distributable (Loss) Earnings

The components that make up distributable (loss) earnings on the Consolidated Statements of Assets and Liabilities as of March 31, 2025 and December 31, 2024 were as follows:


	March 31, 2025		December 31, 2024
Accumulated net realized loss from investments, net of cumulative dividends of $30,352,761 for both periods	$	(47,234,928)	$	(41,267,707)
Net realized loss on foreign currency translations		(242,956)		(213,301)
Net unrealized depreciation on non-controlled, non-affiliated investments and cash equivalents, net of deferred tax liability of $0 for both periods		(6,119,007)		(7,312,300)
Net unrealized depreciation on foreign currency translations		(6,900)		(15,219)
Accumulated undistributed net investment income		37,855,134		39,153,714
Total distributable loss	$	(15,748,657)	$	(9,654,813)

Recently Issued Accounting Standards

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”). The amendments in this update require more disaggregated information on income taxes paid. ASU 2023-09 is effective for years beginning after December 15, 2024. Early adoption is permitted; however, the Company has not elected to adopt this provision as of the date of the financial statements contained in this quarterly report on Form 10-Q. The Company is still assessing the impact of the new guidance. However, it does not expect ASU 2023-09 to have a material impact on the Consolidated Financial Statements and the notes thereto.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (“ASU 2024-03”), which requires disaggregated disclosure of certain costs and expenses, including purchases of inventory, employee compensation, depreciation, amortization and depletion, within relevant income statement captions. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning with the first quarter ended March 31, 2028. Early

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STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

adoption and retrospective application is permitted. The Company is currently assessing the impact of this guidance, however, the Company does not expect a material impact on its consolidated financial statements.

See Note 13 to the consolidated financial statements contained herein for further discussion regarding recently issued accounting standards.

From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted by the Company as of the specified effective date. The Company believes the impact of the recently issued standards and any that are not yet effective will not have a material impact on its consolidated financial statements upon adoption.

NOTE 2 — RELATED PARTY ARRANGEMENTS

Investment Advisory Agreement

The Company has entered into an investment advisory agreement (the “Investment Advisory Agreement”) with Stellus Capital, pursuant to which Stellus Capital serves as its investment adviser. Pursuant to this agreement, the Company has agreed to pay to Stellus Capital an annual base management fee of 1.75% of gross assets, including assets purchased with borrowed funds or other forms of leverage and excluding cash and cash equivalents, and an incentive fee.

For the three months ended March 31, 2025, the Company recorded an expense for base management fees of $4,054,726. For the three months ended March 31, 2024, the Company recorded an expense for base management fees of $3,852,233. As of March 31, 2025 and December 31, 2024, $4,054,726 and $4,034,109 of such management fess, respectively, were payable to Stellus Capital.

The incentive fee has two components, the investment income incentive fee and the capital gains incentive fee, as follows:

Investment Income Incentive Fee

The investment income component of the incentive fee (“Income Incentive Fee”) is calculated, and payable to the Advisor, quarterly in arrears based on the Company’s pre-incentive fee net investment income for the immediately preceding calendar quarter, subject to a cumulative total return requirement and to deferral of non-cash amounts. The pre-incentive fee net investment income, which is expressed as a rate of return on the value of the Company’s net assets attributable to the Company’s common stock, for the immediately preceding calendar quarter, will have a 2.0% (which is 8.0% annualized) hurdle rate (also referred to as the “Hurdle”). Pre-incentive fee net investment income means interest income, dividend income and any other income accrued during the calendar quarter, minus the Company’s operating expenses for the quarter excluding the incentive fee. Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with PIK interest and zero coupon securities), accrued income that the Company has not yet received in cash. The Advisor receives no incentive fee for any calendar quarter in which the Company’s pre-incentive fee net investment income does not exceed the Hurdle. Subject to the cumulative total return requirement described below, the Advisor receives 100% of the Company’s pre-incentive fee net investment income for any calendar quarter with respect to that portion of the pre-incentive net investment income for such quarter, if any, that exceeds the Hurdle but is less than 2.5% (which is 10.0% annualized) of net assets (also referred to as the “Catch-up”) and 20.0% of the Company’s pre-incentive fee net investment income for such calendar quarter, if any, greater than 2.5% (10.0% annualized) of net assets.

The foregoing Income Incentive Fee is subject to a total return requirement, which provides that no incentive fee in respect of the Company’s pre-incentive fee net investment income is payable except to the extent 20.0% of the cumulative net increase in net assets resulting from operations over the then current and 11 preceding calendar quarters exceeds the cumulative incentive fees accrued and/or paid for the 11 preceding quarters. In other words, any Income Incentive Fee that is payable in a calendar quarter is limited to the lesser of (i) 20% of the amount by which the Company’s pre-incentive fee net investment income for such calendar quarter exceeds the 2.0% hurdle, subject to the Catch-up, and (ii) (x) 20% of the cumulative net increase in net assets resulting from operations for the then current

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STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

and 11 preceding quarters minus (y) the cumulative incentive fees accrued and/or paid for the 11 preceding calendar quarters. For the foregoing purpose, the “cumulative net increase in net assets resulting from operations” is the amount, if positive, of the sum of pre-incentive fee net investment income, realized gains and losses and unrealized appreciation and depreciation of the Company for the then current and 11 preceding calendar quarters. In addition, the Advisor is not paid the portion of such incentive fee that is attributable to deferred interest until the Company actually receives such interest in cash.

For the three months ended March 31, 2025, the Company incurred $2,136,491 of Income Incentive Fees. For the three months ended March 31, 2024, the Company incurred $2,509,110 of Income Incentive Fees. As of March 31, 2025 and December 31, 2024, $1,651,506 and $3,109,560, respectively, of such Income Incentive Fees were payable to the Advisor, of which $828,462 and $2,351,703, respectively, were currently payable (as explained below). As of March 31, 2025 and December 31, 2024, $823,044 and $757,857, respectively, of Income Incentive Fees incurred but not paid by the Company were generated from deferred interest (i.e. PIK, certain discount accretion and deferred interest) and are not payable until such amounts are received by the Company in cash. For the three months ended March 31, 2025 and 2024, $1,242,843 and $204,351, respectively, of Income Incentive Fees accrued but not paid by the Company were permanently written off due to the Cumulative Pre-Incentive Fee Net Return limitation.

Capital Gains Incentive Fee

The Company also pays the Advisor an incentive fee based on capital gains (the “Capital Gains Incentive Fee”). The Capital Gains Incentive Fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the investment management agreement, as of the termination date). The Capital Gains Incentive Fee is equal to 20.0% of the Company’s cumulative aggregate realized capital gains from Inception through the end of that calendar year, computed net of the cumulative aggregate realized capital losses and cumulative aggregate unrealized capital depreciation through the end of such year. The aggregate amount of any previously paid Capital Gains Incentive Fee is subtracted from such Capital Gains Incentive Fee calculated.

U.S. GAAP requires that the Capital Gains Incentive Fee accrual considers the cumulative aggregate realized gains and losses and unrealized capital appreciation or depreciation of investments and other financial instruments in the calculation, as an incentive fee would be payable if such realized gains and losses and unrealized capital appreciation or depreciation were realized, even though such unrealized capital appreciation or depreciation is not permitted to be considered in calculating the Capital Gains Incentive Fee actually payable under the Investment Advisory Agreement. There can be no assurance that unrealized appreciation or depreciation will be realized in the future. Accordingly, such fees, as calculated and accrued, may not necessarily be payable under the Investment Advisory Agreement, and may never be paid based upon the computation of incentive fees in subsequent periods.

For both the three months ended March 31, 2025 and 2024, the Company did not incur any Capital Gains Incentive Fee. As of March 31, 2025 and December 31, 2024, no Capital Gains Incentive Fees were accrued.

The following tables summarize the components of the incentive fees discussed above:


	For the three months ended
	March 31, 2025		March 31, 2024
Investment income incentive fees incurred	$	2,136,491	$	2,509,110
Income incentive fee waiver		(1,242,843)		(204,351)
Incentive fees expense	$	893,648	$	2,304,759


	March 31, 2025		December 31, 2024
Investment income incentive fee currently payable	$	828,462	$	2,351,703
Investment income incentive fee deferred		823,044		757,857
Incentive fee payable	$	1,651,506	$	3,109,560

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STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

Director Fees

For the three months ended March 31, 2025, the Company recorded an expense relating to independent director fees of $111,250. For the three months ended March 31, 2024, the Company recorded an expense relating to independent director fees of $108,250. As of both March 31, 2025 and December 31, 2024, the Company had no unpaid independent director fees.

Co-Investment Pursuant to SEC Order

On May 9, 2022, the Company received a new exemptive order (the “Order”) that superseded prior co-investment exemptive relief orders and permits the Company to co-invest with additional types of private funds, other BDCs, and registered investment companies managed by Stellus Capital or an adviser that is controlled, controlling, or under common control with Stellus Capital, subject to the conditions included therein. Pursuant to the Order, a “required majority” (as defined in Section 57(o) of the 1940 Act) of the Company’s independent directors must make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the proposed transaction, including the consideration to be paid, are reasonable and fair to the Company and its stockholders and do not involve overreaching of the Company or its stockholders on the part of any person concerned; (2) the transaction is consistent with the interests of the Company’s stockholders and is consistent with its investment objectives and strategies; (3) the investment by the Company’s affiliates would not disadvantage the Company, and the Company’s participation would not be on a basis different from or less advantageous than that on which the Company’s affiliates are investing and (4) the proposed investment by the Company would not benefit the Advisor, the other affiliated funds that are participating in the investment, or any affiliated person of any of them (other than parties to the transaction), except to the extent permitted by the exemptive relief and applicable law, including the limitations set forth in Section 57(k) of the 1940 Act.

The Company co-invests, subject to the conditions in the Order, with a private BDC and private credit funds managed by Stellus Capital or an affiliate thereof that have investment strategies that are similar or identical to the Company’s investment strategy, and the Company may co-invest with other BDCs, registered investment companies and private credit funds managed by Stellus Capital or an adviser that is controlled, controlling, or under common control with Stellus Capital in the future. The Company believes that such co-investments may afford it additional investment opportunities and an ability to achieve greater diversification.

Administrative Agent

The Company serves as the administrative agent on certain investment transactions, including co-investments with its affiliates under the Order. As of March 31, 2025, there was $1,290,893 due to related parties related to interest paid by a borrower to the Company as administrative agent, which is included in “Related party payable” on the Consolidated Statement of Assets and Liabilities. As of December 31, 2024, there was no cash due to related parties related to interest paid by a borrower to a Company as administrative agent. Additionally, as of March 31, 2025, there was $1,461,467 due to other investment funds related to interest paid by a borrower to the Company as administrative agent, which is included in “Other accrued expenses and liabilities” on the Consolidated Statement of Assets and Liabilities. As of December 31, 2024, there was no cash due to other investment funds related to interest paid by a borrower to the Company as administrative agent.

License Agreement

The Company has entered into a license agreement with Stellus Capital under which Stellus Capital has agreed to grant the Company a non-exclusive, royalty-free license to use the name “Stellus Capital.” Under this agreement, the Company has a right to use the “Stellus Capital” name for so long as Stellus Capital or one of its affiliates remains its investment adviser. Other than with respect to this limited license, the Company has no legal right to the “Stellus Capital” name. This license agreement will remain in effect for so long as the Investment Advisory Agreement with Stellus Capital is in effect.

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STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

Administration Agreement

The Company has entered into an administration agreement (the “Administration Agreement”) with Stellus Capital, pursuant to which Stellus Capital furnishes the Company with office facilities and equipment and provides the Company with the clerical, bookkeeping, recordkeeping and other administrative services necessary to conduct day-to-day operations. Under this Administration Agreement, Stellus Capital performs, or oversees the performance of, its required administrative services, which includes, among other things, being responsible for the financial records which the Company is required to maintain and preparing reports to its stockholders and reports filed with the SEC.

For the three months ended March 31, 2025 and 2024, the Company recorded expenses of $370,974 and $389,595, respectively, related to the Administration Agreement, which are included in “Administrative services expenses” on the Consolidated Statements of Operations. As of March 31, 2025 and December 31, 2024, $370,974 and $413,678, respectively, remained payable to Stellus Capital relating to the Administration Agreement, which are included in “Administrative services payable” on the Consolidated Statements of Assets and Liabilities.

Indemnification

The Investment Advisory Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations under the Investment Advisory Agreement, Stellus Capital and its officers, managers, partners, agents, employees, controlling persons and members, and any other person or entity affiliated with it, are entitled to indemnification from the Company for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of Stellus Capital’s services under the Investment Advisory Agreement or otherwise as the Company’s investment adviser.

The Company has also entered into indemnification agreements with its directors. The indemnification agreements are intended to provide the Company’s directors the maximum indemnification permitted under Maryland law and the 1940 Act. Each indemnification agreement provides that the Company shall indemnify the director who is a party to the agreement (an “Indemnitee”), including the advancement of legal expenses, if, by reason of his or her corporate status, the Indemnitee is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed proceeding, other than a proceeding by or in the right of the Company.

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STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

NOTE 3 — DISTRIBUTIONS

Distributions are generally declared by the Company’s Board each calendar quarter and recognized as distribution liabilities on the declaration date. The stockholder distributions, if any, are determined by the Board. Any distribution to stockholders will be declared out of assets legally available for distribution.

For the three months ended March 31, 2025 and 2024, the Company declared aggregate distributions of $0.40 per share on its common stock for both periods. The distributions declared for the three months ended March 31, 2025 differ from the amounts disclosed in the Statements of Operations as a result of calculating certain per share data based on weighted average shares outstanding during the period and certain per share data based on shares outstanding as of the period end. The Company has declared aggregate distributions of $16.95 per share on its common stock since Inception as described below:


Date Declared	Record Date	Payment Date	Per Share⁽¹⁾
Fiscal 2012			$	0.18
Fiscal 2013			$	1.36
Fiscal 2014			$	1.42
Fiscal 2015			$	1.36
Fiscal 2016			$	1.36
Fiscal 2017	Various		$	1.36
Fiscal 2018			$	1.36
Fiscal 2019			$	1.36
Fiscal 2020			$	1.15
Fiscal 2021			$	1.14
Fiscal 2022			$	1.30
Fiscal 2023			$	1.60
Fiscal 2024			$	1.60
Fiscal 2025
January 9, 2025	January 31, 2025	February 14, 2025	$	0.1333
January 9, 2025	February 28, 2025	March 14, 2025	$	0.1333
January 9, 2025	March 31, 2025	April 15, 2025	$	0.1333
Total			$	16.95

(1)	Distributions for fiscal years 2012 through 2024 are shown in aggregate amounts.

The Company has adopted an “opt out” dividend reinvestment plan (“DRIP”), pursuant to which a stockholder whose shares are held in his own name will receive distributions in shares of the Company’s common stock under the Company’s DRIP unless it elects to receive distributions in cash. Stockholders whose shares are held in the name of a broker or the nominee of a broker may have distributions reinvested only if such service is provided by the broker or the nominee, or if the broker of the nominee permits participation in the DRIP.

Although distributions paid in the form of additional shares of the Company’s common stock will generally be subject to U.S. federal, state and local taxes in the same manner as cash distributions, investors participating in the Company’s DRIP will not receive any corresponding cash distributions with which to pay any such applicable taxes. Any distributions reinvested through the issuance of shares through the Company’s DRIP will increase the Company’s gross assets on which the base management fee and the incentive fee are determined and paid to Stellus Capital. The Company did not issue any new shares in connection with the DRIP during either of the three months ended March 31, 2025 or 2024.

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STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

NOTE 4 — EQUITY OFFERINGS AND RELATED EXPENSES

The table below illustrates the number of common stock shares the Company issued since Inception through various equity offerings and pursuant to the Company’s DRIP.


												Average
	Number of	Gross		Underwriting		Offering		Fees Covered		Net		Offering
Issuance of Common Stock	Shares	Proceeds⁽¹⁾⁽²⁾		fees		Expenses		by Advisor		Proceeds⁽³⁾		Price
Year ended December 31, 2012	12,035,023	$	180,522,093	$	4,959,720	$	835,500	$	—	$	174,726,873	$	14.90
Year ended December 31, 2013	63,998		899,964		—		—		—		899,964		14.06
Year ended December 31, 2014	380,936		5,485,780		75,510		29,904		—		5,380,366		14.47
Year ended December 31, 2017	3,465,922		48,741,406		1,358,880		307,021		—		47,075,505		14.06
Year ended December 31, 2018	7,931		93,737		—		—		—		93,737		11.85
Year ended December 31, 2019	3,177,936		45,862,995		1,015,127		559,261		37,546		44,326,153		14.43
Year ended December 31, 2020	354,257		5,023,843		5,680		84,592		66,423		4,999,994		14.40
Year ended December 31, 2021	31,592		449,515		6,744		53,327		4,255		393,699		14.23
Year ended December 31, 2022	149,174		2,070,935		31,066		530,842		87,605		1,596,632		13.88
Year ended December 31, 2023	4,458,873		62,871,349		943,248		247,701		477,088		62,157,488		14.10
Year ended December 31, 2024	3,355,476		46,494,756		698,166		435,390		—		45,361,200		13.86
Three months ended March 31, 2025	656,085		9,256,982		138,908		179,988		—		8,938,086		14.11
Total	28,137,203	$	407,773,355	$	9,233,049	$	3,263,526	$	672,917	$	395,949,697

(1)	Net of partial share transactions. Such share transactions impacted gross proceeds by ($94), $757, ($1,051), ($142), ($31) and ($29) in 2020, 2019, 2018, 2017, 2016 and 2015, respectively.

(2)

Includes common shares issued under the DRIP of $228,943 and $94,788 during the years ended December 31, 2020 and 2018, respectively; $0 for the three months ended March 31, 2025 and years ended December 31, 2024, 2023, 2022, 2021, 2019, 2017, 2016 and 2015, and $390,505, $938,385, and $113,000 for the years ended December 31, 2014, 2013, and 2012, respectively.

(3)

Total Net Proceeds per this equity table will differ from the Consolidated Statements of Assets and Liabilities as of March 31, 2025 and December 31, 2024 in the amount of $7,434,858, which represents a cumulative tax reclassification of stockholders’ equity in accordance with U.S. GAAP. This reclassification reduces paid-in capital and increases (decreases) distributable earnings (loss) (by increasing (decreasing) accumulated undistributed gain (deficit)).

On November 16, 2021, the Company entered into an equity distribution agreement, as amended and restated on August 29, 2022 (the “2021 Equity Distribution Agreement”), with Keefe Bruyette & Woods, Inc. and Raymond James & Associates, Inc., as sales agents and/or principal thereunder. Under the 2021 Equity Distribution Agreement, the Company was permitted to issue and sell, from time to time, up to $50,000,000 in aggregate offering price of shares of common stock, par value $0.001 per share, with the intention to use the net proceeds from this at-the-market sales program to repay certain outstanding indebtedness and make investments in portfolio companies in accordance with its investment objective and strategies.

On August 11, 2023, the Company entered into an equity distribution agreement (the “2023 Equity Distribution Agreement” and together with the 2021 Equity Distribution Agreement, the "Equity Distribution Agreements") with Keefe Bruyette & Woods, Inc. and Raymond James & Associates, Inc., as sales agents and/or principal thereunder. Under the 2023 Equity Distribution Agreement, the Company may issue and sell, from time to time, up to $100,000,000 in aggregate offering price of shares of common stock, par value $0.001 per share, with the intention to use the net proceeds from this at-the-market sales program to repay certain outstanding indebtedness and make investments in portfolio companies in accordance with its investment objective and strategies. Upon execution of the 2023 Equity Distribution Agreement, the Company no longer sold any shares under the 2021 Equity Distribution Agreement. The Company refers to its issuance and sale of shares under the Equity Distribution Agreements as the "ATM Program".

The Company issued 656,085 shares during the three months ended March 31, 2025 under the ATM Program, for gross proceeds of $9,256,982 and underwriting fees and other expenses of $318,896. The average per share offering price of shares issued in the ATM Program during the three months ended March 31, 2025 was $14.11. The Company did not issue any shares during the three months ended March 31, 2024 under the ATM Program. The Advisor agreed to reimburse the Company for underwriting fees and expenses incurred in

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STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

connection with the ATM Program to the extent the per share price of the shares to the public, less underwriting fees, was less than the then-current net asset value per share. For the three months ended March 31, 2025, the Advisor was not required to reimburse underwriting fees and expenses, as all shares were issued at a premium to net asset value.

NOTE 5 — NET INCREASE IN NET ASSETS PER COMMON SHARE

The following information sets forth the computation of net increase in net assets resulting from operations per common share for the three months ended March 31, 2025 and 2024.


	For the three months ended
	March 31, 2025		March 31, 2024
Net increase in net assets resulting from operations	$	4,993,545	$	13,148,460
Weighted average common shares		27,602,612		24,125,642
Net increase in net assets resulting from operations per share	$	0.18	$	0.54

NOTE 6 — PORTFOLIO INVESTMENTS AND FAIR VALUE

In accordance with the authoritative guidance on fair value measurements and disclosures under U.S. GAAP, the Company discloses the fair value of its investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The guidance establishes three levels of the fair value hierarchy as follows:

Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 — Quoted prices in markets that are not considered to be active or financial instruments for which significant inputs are observable, either directly or indirectly; and

Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

The level of an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by management.

The Company considers whether the volume and level of activity for the asset or liability have significantly decreased and identifies transactions that are not orderly in determining fair value. Accordingly, if the Company determines that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value. Valuation techniques such as an income approach might be appropriate to supplement or replace a market approach in those circumstances.

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STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

At March 31, 2025, the Company had investments in 110 portfolio companies. The composition of its investments as of March 31, 2025 was as follows:


	Cost		Fair Value
Senior Secured – First Lien⁽¹⁾	$	918,052,733	$	888,500,654
Senior Secured – Second Lien		12,084,138		11,948,850
Unsecured Debt		6,864,228		6,705,769
Equity		60,830,565		83,948,504
Total Investments	$	997,831,664	$	991,103,777

(1)

Includes unitranche investments, which accounted for 1.9% of the Company’s portfolio at fair value. Unitranche structures may combine characteristics of first lien senior secured, as well as second lien and/or subordinated loans. The Company’s unitranche loans will expose it to certain risk associated with second lien and subordinated loans to the extent it invests in the “last-out” tranche.

At December 31, 2024, the Company had investments in 105 portfolio companies. The composition of its investments as of December 31, 2024 was as follows:


	Cost		Fair Value
Senior Secured – First Lien⁽¹⁾	$	884,322,462	$	856,096,255
Senior Secured – Second Lien		12,073,732		11,948,850
Unsecured Debt		6,755,866		6,612,493
Equity		58,636,646		78,840,090
Total Investments	$	961,788,706	$	953,497,688

(1)

Includes unitranche investments, which accounted for 2.0% of the Company’s portfolio at fair value. Unitranche structures may combine characteristics of first lien senior secured, as well as second lien and/or subordinated loans. The Company’s unitranche loans will expose it to certain risk associated with second lien and subordinated loans to the extent it invests in the “last-out” tranche.

The Company’s investment portfolio may contain loans that are in the form of lines of credit or revolving credit facilities, which require the Company to provide funding when requested by portfolio companies in accordance with the terms of the underlying loan agreements. As of both March 31, 2025 and December 31, 2024, the Company had 72 of such investments with aggregate unfunded commitments of $46,475,820 and $41,286,752, respectively. The Company maintains sufficient liquidity (through cash on hand and available borrowings under the Credit Facility) to fund such unfunded loan commitments should the need arise.

The aggregate gross unrealized appreciation and depreciation and the aggregate cost and fair value of the Company’s portfolio company securities as of March 31, 2025 and December 31, 2024 were as follows:


	March 31, 2025		December 31, 2024
Aggregate cost of portfolio company securities	$	997,831,664	$	961,788,706
Gross unrealized appreciation of portfolio company securities		54,928,043		47,590,719
Gross unrealized depreciation of portfolio company securities		(61,047,050)		(54,903,019)
Gross unrealized appreciation on foreign currency translations of portfolio company securities		7,032		3,973
Gross unrealized depreciation on foreign currency translations of portfolio company securities		(615,912)		(982,691)
Aggregate fair value of portfolio company securities	$	991,103,777	$	953,497,688

Table of Contents

STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

The fair values of the Company’s investments disaggregated into the three levels of the fair value hierarchy based upon the lowest level of significant input used in the valuation of the Company’s investments as of March 31, 2025 were as follows:


	Quoted Prices
	in Active
	Markets		Significant Other		Significant
	for Identical		Observable		Unobservable
	Securities		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Senior Secured – First Lien	$	—	$	—	$	888,500,654	$	888,500,654
Senior Secured – Second Lien		—		—		11,948,850		11,948,850
Unsecured Debt		—		—		6,705,769		6,705,769
Equity		—		—		83,948,504		83,948,504
Total Investments	$	—	$	—	$	991,103,777	$	991,103,777


	Quoted Prices
	in Active
	Markets		Significant Other		Significant
	for Identical		Observable		Unobservable
	Securities		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Senior Secured – First Lien	$	—	$	—	$	856,096,255	$	856,096,255
Senior Secured – Second Lien		—		—		11,948,850		11,948,850
Unsecured Debt		—		—		6,612,493		6,612,493
Equity		—		—		78,840,090		78,840,090
Total Investments	$	—	$	—	$	953,497,688	$	953,497,688

The aggregate values of Level 3 portfolio investments changed during the three months ended March 31, 2025 as follows:


	Senior Secured		Senior Secured
	Loans-First		Loans-Second		Unsecured
	Lien		Lien		Debt		Equity		Total
Fair value at beginning of period	$	856,096,255	$	11,948,850	$	6,612,493	$	78,840,090	$	953,497,688
Purchases of investments		53,612,094		—		9,456		3,457,015		57,078,565
PIK interest		874,807		—		101,672		—		976,479
Sales and redemptions		(15,806,481)		—		(6,601)		(926,809)		(16,739,891)
Realized losses		(5,651,668)		—		—		(336,282)		(5,987,950)
Change in unrealized (depreciation) appreciation included in earnings⁽¹⁾		(1,691,253)		(10,407)		(16,478)		2,911,431		1,193,293
Change in unrealized appreciation on foreign currency included in earnings		365,384		—		1,395		3,059		369,838
Amortization of premium and accretion of discount, net		701,516		10,407		3,832		—		715,755
Fair value at end of period	$	888,500,654	$	11,948,850	$	6,705,769	$	83,948,504	$	991,103,777

(1)	Includes reversal of positions during the three months ended March 31, 2025.

There were no Level 3 transfers during the three months ended March 31, 2025.

Table of Contents

STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

The aggregate values of Level 3 portfolio investments changed during the year ended December 31, 2024 as follows:


	Senior Secured		Senior Secured
	Loans-First		Loans-Second		Unsecured
	Lien		Lien		Debt		Equity		Total
Fair value at beginning of period	$	774,789,320	$	21,957,500	$	5,956,280	$	71,757,583	$	874,460,683
Purchases of investments		213,545,132		—		117,066		7,492,735		221,154,933
PIK interest		2,824,403		—		485,708		—		3,310,111
Sales and redemptions		(126,924,841)		(9,782,348)		—		(14,985,096)		(151,692,285)
Realized (losses) gains		(1,580,768)		(20,475,000)		—		6,212,362		(15,843,406)
Change in unrealized (depreciation) appreciation included in earnings⁽¹⁾		(9,026,597)		20,187,185		40,312		8,369,509		19,570,409
Change in unrealized depreciation on foreign currency included in earnings		(169,778)		—		(1,778)		(7,003)		(178,559)
Amortization of premium and accretion of discount, net		2,639,384		61,513		14,905		—		2,715,802
Fair value at end of period	$	856,096,255	$	11,948,850	$	6,612,493	$	78,840,090	$	953,497,688

(1)	Includes reversal of positions during the year ended December 31, 2024.

There were no Level 3 transfers during the year ended December 31, 2024.

Table of Contents

STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

The following is a summary of geographical concentration in the Company’s investment portfolio as of March 31, 2025:


					% of Total
					Investments at
	Cost		Fair Value		Fair Value
California	$	183,759,361	$	180,143,989	18.18	%
Texas		154,718,968		153,093,310	15.45	%
Florida		109,257,282		104,818,655	10.58	%
Illinois		67,687,101		57,608,822	5.81	%
Pennsylvania		52,798,217		54,814,087	5.53	%
Arizona		43,416,841		46,612,063	4.70	%
New York		36,106,476		36,400,772	3.67	%
Ohio		33,609,449		35,917,579	3.62	%
Colorado		39,158,839		35,405,722	3.57	%
Canada		31,909,912		32,074,271	3.24	%
District of Columbia		22,607,275		26,177,477	2.64	%
Georgia		11,860,249		22,876,501	2.31	%
North Carolina		20,933,261		22,118,879	2.23	%
Wisconsin		30,579,019		20,580,392	2.08	%
Massachusetts		19,936,720		20,391,332	2.06	%
Tennessee		20,476,976		20,447,184	2.06	%
Iowa		18,572,441		18,530,010	1.87	%
New Jersey		11,191,151		11,911,882	1.20	%
Idaho		11,757,404		11,819,529	1.19	%
Michigan		11,373,634		11,565,671	1.17	%
Missouri		10,313,148		10,522,539	1.06	%
Virginia		9,381,441		9,498,704	0.96	%
Louisiana		9,200,420		9,218,704	0.93	%
Oregon		8,903,578		8,903,578	0.90	%
Washington		8,177,844		8,708,683	0.88	%
Maryland		7,541,120		7,496,189	0.76	%
Minnesota		6,547,210		6,969,215	0.70	%
South Carolina		4,840,161		5,001,770	0.50	%
Indiana		743,770		994,182	0.10	%
United Kingdom		472,396		482,086	0.05	%
Total Investments	$	997,831,664	$	991,103,777	100.00	%

Table of Contents

STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

The following is a summary of geographical concentration in the Company’s investment portfolio as of December 31, 2024:


					% of Total
					Investments
	Cost		Fair Value		at Fair Value
Texas	$	159,028,754	$	154,041,942	16.15	%
California		160,285,777		152,583,692	16.00	%
Florida		108,434,730		104,718,969	10.98	%
Illinois		66,486,029		56,591,435	5.94	%
Pennsylvania		53,271,774		54,438,594	5.71	%
Arizona		43,552,887		46,839,063	4.91	%
New York		36,116,358		36,306,098	3.81	%
Ohio		33,645,676		35,847,804	3.76	%
Canada		32,107,256		32,375,749	3.40	%
Colorado		31,283,806		28,218,186	2.96	%
Wisconsin		27,935,159		23,352,084	2.45	%
District of Columbia		22,711,852		26,654,283	2.80	%
Georgia		12,391,680		23,345,077	2.45	%
North Carolina		20,946,327		22,314,018	2.34	%
Tennessee		20,490,429		20,703,772	2.17	%
Massachusetts		19,965,590		20,559,398	2.16	%
Missouri		18,590,476		18,712,569	1.96	%
Iowa		13,486,486		13,486,486	1.41	%
Idaho		11,763,648		11,830,192	1.24	%
New Jersey		11,181,815		11,754,323	1.23	%
Michigan		11,389,446		11,510,608	1.21	%
Louisiana		9,216,389		9,371,830	0.98	%
Virginia		9,293,896		9,373,367	0.98	%
Washington		8,193,234		8,216,962	0.86	%
Maryland		7,529,294		7,526,300	0.79	%
Minnesota		6,448,091		6,452,144	0.68	%
South Carolina		4,836,178		4,984,667	0.52	%
Indiana		743,770		920,343	0.10	%
United Kingdom		461,899		467,733	0.05	%
Total Investments	$	961,788,706	$	953,497,688	100.00	%

Table of Contents

STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

The following is a summary of industry concentration in the Company’s investment portfolio as of March 31, 2025:


					% of Total
					Investments at
	Cost		Fair Value		Fair Value
Services: Business	$	243,646,441	$	258,489,176	26.08	%
High Tech Industries		91,028,612		93,430,034	9.43	%
Healthcare & Pharmaceuticals		85,729,558		84,959,811	8.57	%
Media: Advertising, Printing & Publishing		79,111,134		79,724,472	8.04	%
Beverage & Food		63,707,729		68,723,968	6.93	%
Consumer Goods: Non-Durable		66,582,041		56,310,657	5.68	%
Capital Equipment		50,126,287		52,518,594	5.30	%
Services: Consumer		49,269,639		45,982,572	4.64	%
Chemicals, Plastics, & Rubber		38,127,354		37,992,254	3.83	%
Construction & Building		31,934,161		32,454,388	3.27	%
Consumer Goods: Durable		34,792,596		32,395,267	3.27	%
Aerospace & Defense		27,130,502		22,847,756	2.31	%
Environmental Industries		19,061,096		20,695,413	2.09	%
Transportation & Logistics		17,991,080		18,241,796	1.84	%
Retail		14,787,280		14,778,304	1.49	%
Media: Broadcasting & Subscription		12,142,342		14,411,416	1.45	%
Energy: Oil & Gas		11,343,396		10,559,460	1.07	%
Containers, Packaging, & Glass		20,666,618		10,294,415	1.04	%
Hotel, Gaming, & Leisure		7,137,590		8,285,168	0.84	%
FIRE: Real Estate		17,934,808		7,707,712	0.78	%
Media: Diversified & Production		5,804,592		5,916,959	0.60	%
Finance		119,281		5,370,188	0.54	%
Wholesale		5,060,939		5,060,939	0.51	%
Education		4,596,588		3,953,058	0.40	%
Total Investments	$	997,831,664	$	991,103,777	100.00	%

Table of Contents

STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

The following is a summary of industry concentration in the Company’s investment portfolio as of December 31, 2024:


					% of Total
					Investments
	Cost		Fair Value		at Fair Value
Services: Business	$	219,665,133	$	234,908,112	24.64	%
High Tech Industries		91,135,577		93,468,792	9.81	%
Healthcare & Pharmaceuticals		85,300,317		85,478,418	8.97	%
Media: Advertising, Printing & Publishing		71,318,416		72,291,584	7.58	%
Beverage & Food		64,052,951		68,902,142	7.23	%
Consumer Goods: Non-Durable		67,123,135		54,473,282	5.71	%
Services: Consumer		49,388,222		46,066,301	4.83	%
Capital Equipment		41,322,214		43,647,466	4.58	%
Consumer Goods: Durable		43,393,413		42,094,390	4.41	%
Chemicals, Plastics, & Rubber		36,693,101		36,907,602	3.87	%
Construction & Building		32,374,992		32,979,859	3.46	%
Aerospace & Defense		26,014,106		21,624,091	2.27	%
Environmental Industries		18,903,681		18,282,056	1.92	%
Transportation & Logistics		17,244,131		17,532,488	1.84	%
Retail		14,799,085		14,723,620	1.54	%
Media: Broadcasting & Subscription		12,170,577		14,314,711	1.50	%
Containers, Packaging, & Glass		18,007,571		12,911,794	1.35	%
Energy: Oil & Gas		11,353,959		10,728,031	1.13	%
Hotel, Gaming, & Leisure		7,113,661		8,142,050	0.85	%
FIRE: Real Estate		17,934,808		7,652,436	0.80	%
Media: Diversified & Production		5,822,637		5,934,853	0.62	%
Education		10,537,738		5,341,151	0.56	%
Finance		119,281		5,092,459	0.53	%
Total Investments	$	961,788,706	$	953,497,688	100.00	%

Table of Contents

STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

The following provides quantitative information about the Company’s Level 3 fair value measurements as of March 31, 2025:


Description:	Fair Value		Valuation Technique	Unobservable Inputs	Range (Average)⁽¹⁾⁽³⁾
First lien debt	$	833,408,937	Income approach⁽²⁾	HY credit spreads	-9.06% to 9.82% (-0.10%)
				Risk free rates	-1.95% to 2.25% (0.19%)
			Market approach⁽²⁾	Market multiples	4.6x to 26.3x (12.0x)⁽⁴⁾
	$	55,091,717	Transaction value	Transaction price	N/A

Second lien debt	$	11,948,850	Income approach⁽²⁾	HY credit spreads	-0.11% to 0.64% (0.17%)
				Risk free rates	-0.53% to -0.05% (-0.23%)
			Market approach⁽²⁾	Market multiples	5.3 to 11.8x (9.4x)⁽⁴⁾

Unsecured debt	$	6,669,543	Income approach⁽²⁾	HY credit spreads	1.54% to 1.54% (1.52%)
				Risk free rates	-0.50% to -0.50% (-0.49%)
	$	36,226	Transaction value	Transaction price	N/A

Equity investments	$	70,265,931	Market approach⁽⁵⁾	EBITDA multiple	3.5x to 18.3x (10.4x)
	$	13,682,573	Transaction value	Transaction price	N/A

Total Long Term Level 3 Investments	$	991,103,777

(1)	Weighted average based on fair value as of March 31, 2025.

(2)	Included but not limited to (a) the market approach, which is used to determine sufficient enterprise value, and (b) the income approach, which is based on discounting future cash flows using an appropriate market yield.

(3)

The Company calculates the price of the loan by discounting future cash flows, which include forecasted future BSBY, SOFR, or SONIA rates based on the published forward curve at the valuation date, using an appropriate yield calculated as of the valuation date. This yield is calculated based on the loan’s yield at the original investment and is adjusted as of the valuation date based on: changes in comparable credit spreads, changes in risk free interest rates (per swap rates), and changes in credit quality (via an estimated shadow rating). Significant movements in any of these factors could result in a significantly lower or higher fair value measurement. As an example, the “Range (Average)” for first lien debt instruments in the table above indicates that the change in the HY spreads between the date a loan closed and the valuation date ranged from (9.06)% ( (906) basis points) to 9.82% (982 basis points). The average of all changes was (0.10)% ( (10) basis points).

(4)	Median of LTM (last twelve months) EBITDA multiples of comparable companies.

(5)

The significant unobservable input used in the fair value measurement of the Company’s equity investments is the Multiple. Significant increases (decreases) in the Multiple in isolation would result in a significantly higher (lower) fair value measurement. To determine the Multiple for the market approach, the Company considers current market trading and/or transaction multiple, portfolio company performance (financial ratios) relative to public and private peer companies and leverage levels, among other factors. Changes in one or more of these factors can have a similar directional change on other factors in determining the appropriate Multiple to use in the market approach.

Table of Contents

STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

The following provides quantitative information about Level 3 fair value measurements as of December 31, 2024:


Description:	Fair Value		Valuation Technique	Unobservable Inputs	Range (Average)⁽¹⁾⁽³⁾
First lien debt	$	778,177,769	Income approach⁽²⁾	HY credit spreads	-3.39% to 8.32% (-0.54%)
				Risk free rates	-1.18% to 2.44% (0.19%)
			Market approach⁽²⁾	Market multiples	4.6x to 26.3x (13.3x)(4)
	$	77,918,486	Transaction value	Transaction price	N/A

Second lien debt	$	11,948,850	Income approach⁽²⁾	HY credit spreads	-0.72% to -0.32% (-0.46%)
				Risk free rates	-0.35% to 0.14% (-0.04%)
			Market approach⁽²⁾	Market multiples	5.3 to 11.8x (9.4x)(4)

Unsecured debt	$	6,581,668	Income approach⁽²⁾	HY credit spreads	0.18% to 0.18% (0.18%)
				Risk free rates	-0.18% to -0.18% (-0.18%)
	$	30,825	Transaction value	Transaction price	N/A

Equity investments	$	64,002,282	Market approach⁽⁵⁾	EBITDA multiple	3.5x to 18.3x (10.4x)
	$	14,837,808	Transaction value	Transaction price	N/A

Total Long Term Level 3 Investments	$	953,497,688

(1)	Weighted average based on fair value as of December 31, 2024.

(2)	Inclusive of but not limited to (a) the market approach, which is used to determine sufficient enterprise value, and (b) the income approach, which is based on discounting future cash flows using an appropriate market yield.

(3)

The Company calculates the price of the loan by discounting future cash flows, which include forecasted future BSBY, SOFR, or SONIA rates based on the published forward curve at the valuation date, using an appropriate yield calculated as of the valuation date. This yield is calculated based on the loan’s yield at the original investment and is adjusted as of the valuation date based on: changes in comparable credit spreads, changes in risk free interest rates (per swap rates), and changes in credit quality (via an estimated shadow rating). Significant movements in any of these factors would result in a significantly lower or higher fair value measurement. As an example, the “Range (Average)” for a first lien debt instruments in the table above indicates that the change in the HY spreads between the date a loan closed and the valuation date ranged from (3.39)% (339) basis points) to 8.32% (832 basis points). The average of all changes was (0.54)% ( (54) basis points).

(4)	Median of LTM (last twelve months) EBITDA multiples of comparable companies.

(5)

The primary significant unobservable input used in the fair value measurement of the Company’s equity investments is the Multiple. Significant increases (decreases) in the Multiple in isolation would result in a significantly higher (lower) fair value measurement. To determine the Multiple for the market approach, the Company considers current market trading and/or transaction multiple, portfolio company performance (financial ratios) relative to public and private peer companies and leverage levels, among other factors. Changes in one or more of these factors can have a similar directional change on other factors in determining the appropriate Multiple to use in the market approach.

NOTE 7 — COMMITMENTS AND CONTINGENCIES

The Company is currently not subject to any material legal proceedings, nor, to its knowledge, is any material legal proceeding threatened against it. From time to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of its rights under contracts with its portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, the Company does not expect that these proceedings will have a material effect upon its business, financial condition or results of operations.

Table of Contents

STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

As of March 31, 2025, the Company had $46,182,397 in unfunded debt commitments and $293,423 in unfunded equity commitments to 72 existing portfolio companies. As of December 31, 2024, the Company had $40,989,533 in unfunded debt commitments and $297,219 in unfunded equity commitments to 71 existing portfolio companies. As of March 31, 2025, the Company had sufficient liquidity (through cash on hand and available borrowings under the Credit Facility) to fund such unfunded loan commitments should the need arise.

NOTE 8 — FINANCIAL HIGHLIGHTS


	For the three months ended

	March 31, 2025			March 31, 2024
	(unaudited)			(unaudited)
Per Share Data:⁽¹⁾
Net asset value at beginning of period	$	13.46		$	13.26
Net investment income		0.35			0.42
Change in unrealized appreciation on investments		0.04			0.98
Net realized loss		(0.21)			(0.85)
Provision for taxes on net unrealized appreciation on investments		—			(0.01)
Total from operations	$	0.18		$	0.54
Sales load		(0.01)			—
Offering costs		(0.01)			—
Stockholder distributions from:
Net investment income		(0.40)			(0.40)
Accretive effect of stock offerings (issuing shares above net asset value per share)		0.01			—
Other⁽⁶⁾		0.02			0.01
Net asset value at end of period	$	13.25		$	13.41
Per share market value at end of period	$	14.00		$	13.08
Total return based on market value⁽²⁾		4.60	%		3.72	%
Weighted average shares outstanding for the period		27,602,612			24,125,642
Ratio/Supplemental Data:⁽¹⁾
Net assets at end of period	$	372,766,182		$	323,440,404
Weighted average net assets	$	371,525,216		$	319,978,256
Annualized ratio of gross operating expenses to net assets⁽⁵⁾		17.91	%		20.07	%
Annualized ratio of net operating expenses to net assets⁽⁵⁾⁽⁶⁾		16.55	%		19.82	%
Annualized ratio of interest expense and other fees to net assets		9.02	%		9.74	%
Annualized ratio of net investment income before fee waiver to net assets⁽⁵⁾		9.33	%		12.57	%
Annualized ratio of net investment income to net assets⁽⁵⁾		10.69	%		12.83	%
Portfolio turnover⁽³⁾		1.54	%		13.07	%
Notes payable	$	100,000,000		$	100,000,000
Credit Facility payable	$	221,813,920		$	184,650,119
SBA-guaranteed debentures	$	308,750,000		$	325,000,000
Asset coverage ratio⁽⁴⁾		2.16	x		2.14	x

(1)	Based on weighted average shares of common stock outstanding for the period.

(2)	Total return on market value is based on the change in market price per share since the end of the prior year and assumes enrollment in the Company’s DRIP. The total returns are not annualized.

(3)	Portfolio turnover is calculated as the lesser of purchases or sales and repayments of investments divided by average portfolio balance and is not annualized.

(4)	Asset coverage ratio is equal to total assets less all liabilities and indebtedness not represented by senior securities over the aggregate amount of the senior securities. SBA-guaranteed debentures are excluded from the numerator and denominator.

(5)

These ratios include the impact of income tax benefit (provision) on net unrealized depreciation (appreciation) in Taxable Subsidiaries of $0 and ($192,607) for the three months ended March 31, 2025 and 2024, respectively, which are not reflected in total operating expenses or net investment income. The impact of the tax benefit (provision) on net unrealized depreciation (appreciation) to weighted average net assets for the three months ended March 31, 2025 and 2024 is 0.00% and (0.24)%, respectively.

Table of Contents

STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

(6)	Includes the impact of different share amounts as a result of calculating certain per share data based on weighted average shares outstanding during the period and certain per share data based on shares outstanding as of the period end.

NOTE 9 — CREDIT FACILITY

On October 11, 2017, the Company entered into a senior secured revolving credit agreement, as amended, dated as of October 10, 2017, that was amended and restated on December 21, 2021, February 28, 2022, May 13, 2022, November 21, 2023 and October 30, 2024, with Zions Bancorporation, N.A., dba Amegy Bank and various other lenders (the “Credit Facility”).

The Credit Facility provides for borrowings up to a maximum of $315,000,000 on a committed basis with an accordion feature that allows the Company to increase the aggregate commitments up to $350,000,000, subject to new or existing lenders agreeing to participate in the increase and other customary conditions.

Pursuant to the Fourth Amendment to Amended and Restated Senior Secured Revolving Credit Agreement, the Credit Facility will bear interest, subject to the Company’s election, on a per annum basis equal to (i) term SOFR plus 2.50% (or 2.75% during certain periods in which the Company’s asset coverage ratio is equal to or below 1.90 to 1.00) plus a SOFR credit spread adjustment (0.10% for one-month term SOFR and 0.15% for three-month term SOFR), with a 0.25% SOFR floor, or (ii) 1.50% (or 1.75% during certain periods in which the Company’s asset coverage ratio is equal to or below 1.90 to 1.00) plus an alternate base rate based on the highest of the prime rate (subject to a 3% floor), Federal Funds Rate plus 0.50% and one-month term SOFR plus 1.00%. The Company pays unused commitment fees of 0.50% per annum on the unused lender commitments under the Credit Facility. Interest is payable monthly or quarterly in arrears. The commitment to fund the revolver expires on November 21, 2027, after which the Company may no longer borrow under the Credit Facility and must begin repaying principal equal to 1/12 of the aggregate amount outstanding under the Credit Facility each month. Any amounts borrowed under the Credit Facility will mature, and all accrued and unpaid interest thereunder will be due and payable, on November 21, 2028.

The Company’s obligations to the lenders are secured by a first priority security interest in its portfolio of securities and cash not held at the SBIC subsidiaries, but excluding short term investments. The Credit Facility contains certain covenants, including but not limited to: (i) maintaining a minimum liquidity test of at least $10,000,000, including cash, liquid investments and undrawn availability, (ii) maintaining an asset coverage ratio of at least 1.67 to 1.00, (iii) maintaining a minimum stockholder’s equity, and (iv) maintaining a minimum interest coverage ratio of at least 1.75 to 1.00. As of March 31, 2025 and December 31, 2024, the Company was in compliance with these covenants.

As of March 31, 2025 and December 31, 2024, $221,813,920 and $175,386,301, respectively, was outstanding under the Credit Facility. The carrying amount of the amount outstanding under the Credit Facility approximates its fair value. The fair value of the Credit Facility is determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of the Credit Facility is estimated based upon market interest rates for our own borrowings or entities with similar credit risk, adjusted for nonperformance risk, if any. The Company has incurred costs of $7,321,527 in connection with the current Credit Facility, which are being amortized over the life of the facility. Additionally, $341,979 of costs from a prior credit facility will continue to be amortized over the life of the Credit Facility. As of March 31, 2025 and December 31, 2024, $2,756,366 and $3,071,986 of such prepaid loan structure fees and administration fees had yet to be amortized, respectively. These prepaid loan fees are presented on our Consolidated Statements of Assets and Liabilities as a deduction from the debt liability.

Table of Contents

STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

The following is a summary of the Credit Facility, net of prepaid loan structure fees:


	March 31, 2025		December 31, 2024
Credit Facility payable	$	221,813,920	$	175,386,301
Prepaid loan structure fees		(2,756,366)		(3,071,986)
Credit Facility payable, net of prepaid loan structure fees	$	219,057,554	$	172,314,315

Interest is paid monthly or quarterly in arrears. The following table summarizes the interest expense and amortized loan fees on the Credit Facility for the three months ended March 31, 2025 and 2024:


	For the three months ended
	March 31, 2025			March 31, 2024
Interest expense	$	3,889,157		$	3,238,636
Loan fee amortization		315,618			264,707
Total interest and financing expenses	$	4,204,775		$	3,503,343
Weighted average interest rate		7.2	%		8.5	%
Effective interest rate (including fee amortization)		7.7	%		9.1	%
Average debt outstanding	$	220,384,693		$	154,110,158
Cash paid for interest and unused fees	$	3,811,021		$	3,180,209

NOTE 10 — SBA-GUARANTEED DEBENTURES

Due to the SBIC subsidiaries’ status as licensed SBICs, the Company has the ability to issue debentures guaranteed by the SBA at favorable interest rates. Under the regulations applicable to SBIC funds, a single licensee can have outstanding debentures guaranteed by the SBA subject to a regulatory leverage limit, up to two times the amount of the SBIC’s regulatory capital, as such term is defined by the SBA’s regulations applicable to SBICs. As of March 31, 2025 and December 31, 2024, the SBIC I subsidiary had $75,000,000 in regulatory capital and $133,750,000 and $150,000,000 of SBA-guaranteed debentures outstanding, respectively.

As of both March 31, 2025 and December 31, 2024, the SBIC II subsidiary had $87,500,000 in regulatory capital. As of both March 31, 2025 and December 31, 2024, the SBIC II subsidiary had $175,000,000 of SBA-guaranteed debentures outstanding.

On August 12, 2014, the Company obtained exemptive relief from the SEC to permit it to exclude the debt of the SBIC subsidiaries guaranteed by the SBA from its asset coverage test under the 1940 Act. The exemptive relief provides the Company with increased flexibility under the asset coverage test by permitting it to borrow up to $325,000,000 more than it would otherwise be able to absent the receipt of this exemptive relief.

On a stand-alone basis, the SBIC subsidiaries held $494,497,221 and $510,105,270 in assets at March 31, 2025 and December 31, 2024, respectively, which accounted for approximately 48.9% and 52.0% of the Company’s total consolidated assets, respectively.

Debentures guaranteed by the SBA have fixed interest rates that equal prevailing 10-year U.S. Treasury Note rates plus a market spread and have a maturity of ten years with interest payable semi-annually. The principal amount of the SBA-guaranteed debentures is not required to be paid before maturity, but may be pre-paid at any time with no prepayment penalty. SBA-guaranteed debentures drawn before October 1, 2019 incur upfront fees of 3.425%, which consists of a 1.00% commitment fee and a 2.425% issuance discount, which are amortized over the life of the SBA-guaranteed debentures. SBA-guaranteed debentures are also subject to certain fees payable by the SBICs at the time such debentures are drawn. SBA-guaranteed debentures drawn after October 1, 2019 incur upfront fees of 3.435%, which consists of a 1.00% commitment fee and a 2.435% issuance discount, which are amortized over the life of the SBA-guaranteed debentures. Once pooled, which occurs in March and September of each applicable year, the SBA-guaranteed debentures bear interest at a fixed rate that is set to the current 10-year treasury rate plus a spread at each pooling date.

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STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

The following tables summarize the SBIC subsidiaries’ aggregate SBA-guaranteed debentures outstanding as of March 31, 2025:


Issuance Date	Licensee	Maturity Date	Debenture Amount		Interest Rate		SBA Annual Charge
June 29, 2015	SBIC I subsidiary	September 1, 2025	$	9,750,000	2.83	%	0.36	%
October 22, 2015	SBIC I subsidiary	March 1, 2026		6,500,000	2.51	%	0.36	%
October 22, 2015	SBIC I subsidiary	March 1, 2026		1,500,000	2.51	%	0.74	%
November 10, 2015	SBIC I subsidiary	March 1, 2026		8,800,000	2.51	%	0.74	%
November 18, 2015	SBIC I subsidiary	March 1, 2026		1,500,000	2.51	%	0.74	%
November 25, 2015	SBIC I subsidiary	March 1, 2026		8,800,000	2.51	%	0.74	%
December 16, 2015	SBIC I subsidiary	March 1, 2026		2,200,000	2.51	%	0.74	%
December 29, 2015	SBIC I subsidiary	March 1, 2026		9,700,000	2.51	%	0.74	%
November 28, 2017	SBIC I subsidiary	March 1, 2028		25,000,000	3.19	%	0.22	%
April 27, 2018	SBIC I subsidiary	September 1, 2028		40,000,000	3.55	%	0.22	%
July 30, 2018	SBIC I subsidiary	September 1, 2028		17,500,000	3.55	%	0.22	%
September 25, 2018	SBIC I subsidiary	March 1, 2029		2,500,000	3.11	%	0.22	%
Total SBIC I subsidiary SBA-guaranteed Debentures			$	133,750,000


Issuance Date	Licensee	Maturity Date	Debenture Amount		Interest Rate		SBA Annual Charge
October 17, 2019	SBIC II subsidiary	March 1, 2030	$	6,000,000	2.08	%	0.09	%
November 15, 2019	SBIC II subsidiary	March 1, 2030		5,000,000	2.08	%	0.09	%
December 17, 2020	SBIC II subsidiary	March 1, 2031		9,000,000	1.67	%	0.09	%
December 17, 2020	SBIC II subsidiary	March 1, 2031		6,500,000	1.67	%	0.27	%
February 16, 2021	SBIC II subsidiary	March 1, 2031		13,500,000	1.67	%	0.27	%
February 26, 2021	SBIC II subsidiary	March 1, 2031		10,000,000	1.67	%	0.27	%
March 2, 2021	SBIC II subsidiary	March 1, 2031		10,000,000	1.67	%	0.27	%
April 21, 2021	SBIC II subsidiary	September 1, 2031		10,000,000	1.30	%	0.27	%
May 14, 2021	SBIC II subsidiary	September 1, 2031		6,700,000	1.30	%	0.27	%
May 28, 2021	SBIC II subsidiary	September 1, 2031		7,300,000	1.30	%	0.27	%
July 23, 2021	SBIC II subsidiary	September 1, 2031		16,000,000	1.30	%	0.27	%
February 25, 2022	SBIC II subsidiary	March 1, 2032		10,000,000	2.94	%	0.27	%
March 29, 2022	SBIC II subsidiary	September 1, 2032		10,000,000	4.26	%	0.27	%
April 1, 2022	SBIC II subsidiary	September 1, 2032		6,670,000	4.26	%	0.27	%
April 12, 2022	SBIC II subsidiary	September 1, 2032		6,665,000	4.26	%	0.27	%
April 21, 2022	SBIC II subsidiary	September 1, 2032		6,665,000	4.26	%	0.27	%
June 30, 2022	SBIC II subsidiary	September 1, 2032		3,600,000	4.26	%	0.27	%
July 28, 2022	SBIC II subsidiary	September 1, 2032		6,400,000	4.26	%	0.27	%
September 9, 2022	SBIC II subsidiary	March 1, 2033		6,000,000	5.17	%	0.27	%
November 9, 2022	SBIC II subsidiary	March 1, 2033		7,600,000	5.17	%	0.27	%
August 8, 2023	SBIC II subsidiary	September 1, 2033		9,120,000	5.69	%	0.27	%
September 19, 2023	SBIC II subsidiary	March 1, 2034		2,280,000	5.04	%	0.27	%
Total SBIC II subsidiary SBA-guaranteed Debentures			$	175,000,000
Total SBA-guaranteed Debentures			$	308,750,000

The fair values of the SBA-guaranteed debentures are determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair values of the SBA-guaranteed debentures are estimated based upon market interest rates for our own

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STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

borrowings or entities with similar credit risk, adjusted for nonperformance risk, if any As of March 31, 2025 and December 31, 2024, the SBA-guaranteed debentures would be deemed to be Level 3, as defined in Note 6.

As of both March 31, 2025 and December 31, 2024, the Company has incurred $11,148,750 in financing costs related to the SBA-guaranteed debentures since receiving its licenses, which were recorded as prepaid loan fees. As of March 31, 2025 and December 31, 2024, $3,559,077 and $3,748,061 of prepaid financing costs had yet to be amortized, respectively. These prepaid loan fees are presented on the Consolidated Statements of Assets and Liabilities as a deduction from the debt liability.

The following is a summary of the SBA-guaranteed debentures, net of prepaid loan fees:


	March 31, 2025		December 31, 2024
SBA-guaranteed Debentures payable	$	308,750,000	$	325,000,000
Prepaid loan fees		(3,559,077)		(3,748,061)
SBA-guaranteed Debentures, net of prepaid loan fees	$	305,190,923	$	321,251,939

The following table summarizes the interest expense and amortized fees on the SBA-guaranteed debentures for the three months ended March 31, 2025 and 2024:


	For the three months ended
	March 31, 2025			March 31, 2024
Interest expense	$	2,540,360		$	2,614,051
Debenture fee amortization		188,984			314,055
Total interest and financing expenses	$	2,729,344		$	2,928,106
Weighted average interest rate		3.3	%		3.2	%
Effective interest rate (including fee amortization)		3.5	%		3.6	%
Average debt outstanding	$	316,694,444		$	325,000,000
Cash paid for interest	$	5,188,661		$	5,201,848

NOTE 11 — NOTES

On January 14, 2021, the Company issued $100,000,000 in aggregate principal amount of 4.875% fixed-rate notes due 2026 (the “Notes Payable”). The Notes Payable will mature on March 30, 2026 and may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after December 31, 2025, at a redemption price equal to 100% of the outstanding principal, plus accrued and unpaid interest. Interest on the Notes Payable is payable semi-annually beginning September 30, 2021. As of both March 31, 2025 and December 31, 2024, the aggregate carrying amount of the Notes Payable was approximately $100,000,000. The Notes Payable are institutional, non-traded notes.

In connection with the issuance and maintenance of the Notes Payable, the Company incurred $2,327,835 of fees, which are being amortized over the term of the Notes Payable. As of March 31, 2025 and December 31, 2024, $445,495 and $555,645 of prepaid financing costs had yet to be amortized, respectively. These financing costs are presented on the Consolidated Statements of Assets and Liabilities as a deduction from the debt liability.

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STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

The following table summarizes the interest expense and deferred financing costs on the Notes Payable for the three months ended March 31, 2025 and 2024:


	For the three months ended
	March 31, 2025			March 31, 2024
Interest expense	$	1,218,750		$	1,224,750
Deferred financing costs		110,150			111,374
Total interest and financing expenses	$	1,328,900		$	1,336,124
Weighted average interest rate		4.9	%		4.9	%
Effective interest rate (including fee amortization)		5.4	%		5.4	%
Average debt outstanding	$	100,000,000		$	100,000,000
Cash paid for interest	$	2,437,500		$	2,443,500

The following is a summary of the Notes Payable, net of deferred financing costs:


	March 31, 2025		December 31, 2024
Notes Payable	$	100,000,000	$	100,000,000
Deferred financing costs		(445,495)		(555,645)
Notes Payable, net of deferred financing costs	$	99,554,505	$	99,444,355

The indenture and supplements thereto relating to the Notes Payable contain certain covenants, including but not limited to (i) a requirement that the Company comply with the asset coverage requirements of the 1940 Act or any successor provisions, and (ii) a requirement to provide financial information to the holders of the notes and the trustee under the indenture if the Company should no longer be subject to the reporting requirements under the Exchange Act. As of March 31, 2025 and 2024, the Company was in compliance with these covenants.

NOTE 12 — SUBSEQUENT EVENTS

The Company’s management has evaluated subsequent events through the date of issuance of the financial statements included herein. There have been no subsequent events that require recognition or disclosure in these financial statements except for the following described below.

Investment Portfolio

The Company invested in the following portfolio companies subsequent to March 31, 2025:


Activity Type	Date	Company Name	Company Description	Investment Amount		Instrument Type
Add-On Investment	April 8, 2025	TriplePoint Acquisition Holdings LLC*	Provider of HVAC, plumbing, and other mechanical and industrial services	$	1,773,809	Senior Secured – First Lien
Add-On Investment	May 5, 2025	FairWave Holdings, LLC*	Specialty coffee platform	$	19,336	Equity
Add-On Investment	May 8, 2025	Unicat Catalyst Holdings, LLC*	Manufacturer and distributor of catalysts and other industrial products	$	13,961	Equity

* Existing portfolio company

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STELLUS CAPITAL INVESTMENT CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(unaudited)

The Company realized the following portfolio company investment subsequent to March 31, 2025:


Activity Type	Date	Company Name	Company Description	Proceeds Received		Realized Gain		Instrument Type
Full Repayment	April 8, 2025	Florachem Corporation	Distiller and supplier of natural citrus, pine, and specialty inputs	$	9,725,000	$	—	Senior Secured – First Lien
				$	53,078	$	—	Delayed Draw Term Loan Commitment
				$	100,000	$	—	Revolver Commitment
				$	514,107	$	151,674	Equity

Credit Facility

The outstanding balance under the Credit Facility as of May 12, 2025 was $147,500,000.

7.250% Notes due 2030

On April 1, 2025, the Company issued $75,000,000 million in aggregate principal amount of 7.250% Notes due 2030 (the “7.250% Notes”). The 7.250% Notes bear interest at a rate of 7.250% per year payable semi-annually in arrears on April 1 and October 1 of each year, commencing October 1, 2025. The 7.250% Notes will mature on April 1, 2030, unless previously redeemed or repurchased in accordance with their terms. The 7.250% Notes are the direct unsecured obligations of the Company and rank pari passu with the Company’s existing and future unsecured, unsubordinated indebtedness, including the Notes Payable; senior to any series of preferred stock that the Company may issue in the future; senior to any of the Company’s future indebtedness that expressly provides it is subordinated to the 7.250% Notes; effectively subordinated to all of the Company’s existing and future secured indebtedness (including indebtedness that is initially unsecured to which the Company subsequently grants security), to the extent of the value of the assets securing such indebtedness, including, without limitation, borrowings under the Credit Facility; and structurally subordinated to all existing and future indebtedness and other obligations of any of the Company’s existing or future subsidiaries.

In connection with the 7.250% Notes, the Company and U.S. Bank Trust Company, National Association (as successor-in-interest to U.S. Bank National Association), as trustee (the “Trustee”), entered into a Fourth Supplemental Indenture (the “Fourth Supplemental Indenture”) to the Base Indenture, dated May 5, 2014, between the Company and the Trustee (together with the Fourth Supplemental Indenture, the “Indenture”).

The Indenture contains certain covenants, including covenants requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a)(2) of the 1940 Act, or any successor provisions whether or not the Company continues to be subject to such provisions of the 1940 Act, but giving effect, in either case, to any exemptive relief granted to the Company by the SEC and certain other exceptions, and to provide financial information to the holders of the 7.250% Notes and the Trustee if the Company should no longer be subject to the reporting requirements under the Exchange Act. These covenants are subject to important limitations and exceptions that are set forth in the Indenture.

Dividends Declared

On April 4, 2025, the Board declared a regular monthly dividend for each of April 2025, May 2025, and June 2025 as follows:


	Ex-Dividend	Record	Payment	Amount per
Declared	Date	Date	Date	Share
4/4/2025	4/30/2025	4/30/2025	5/15/2025	$	0.1333
4/4/2025	5/30/2025	5/30/2025	6/13/2025	$	0.1333
4/4/2025	6/30/2025	6/30/2025	7/15/2025	$	0.1333

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NOTE 13 — REPORTABLE SEGMENTS

ASU 2023-07

In November 2023, the FASB issued ASU 2023-07 - Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 enhances the disclosures required for reportable segments on an annual and interim basis. ASU 2023-07 is effective on a retrospective basis for annual periods beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07 as of December 31, 2024 and has applied ASU 2023-07 retrospectively for the three months ended March 31, 2025 and 2024. The adoption of ASU 2023-07 impacted the financial statement disclosures of the Company and did not impact the Company’s financial position or the results of its operations. An operating segment is defined as a component of a public entity that engages in business activities from which it may recognize revenues and incur expenses, has operating results that are regularly reviewed by the public entity’s chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance, and has discrete financial information available. The Company operates under one operating segment and reporting unit, investment management. The CODM is the Chief Executive Officer of the Company, who is responsible for determining the Company’s investment strategy, capital allocation, expense structure, and significant transactions impacting the Company. The operating expenses as disclosed on the consolidated statement of operations represent the significant expense categories that are provided to the CODM. Key metrics considered by the CODM in making decisions on the allocation of invested capital include, but are not limited to, net investment income and net increase in net assets resulting from operations that is reported on the Consolidated Statement of Operations, fair value of investments as disclosed on the Consolidated Schedule of Investments, as well as distributions made to the Company’s shareholders.

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements, which relate to future events or Stellus Capital Investment Corporation’s (“we”, “us”, “our” and the “Company”) future performance or financial condition. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties, including statements as to:

●

our future operating results;

●

our business prospects and the prospects of our portfolio companies;

●

the effect of investments that we expect to make;

●

our contractual arrangements and relationships with third parties;

●

actual and potential conflicts of interest with Stellus Capital Management, LLC (“Stellus Capital” or the “Advisor”);

●

the dependence of our future success on the general economy and its effect on the industries in which we invest;

●

the impact of interest rate volatility on our business and our portfolio companies;

●

the ability of our portfolio companies to achieve their objectives;

●

the use of borrowed money to finance a portion of our investments;

●

the adequacy of our financing sources and working capital;

●

the timing of cash flows, if any, from the operations of our portfolio companies;

●

the ability of Stellus Capital to locate suitable investments for us and to monitor and administer our investments;

●

the ability of Stellus Capital to attract and retain highly talented professionals;

●

our ability to maintain our qualification as a regulated investment company (“RIC”) and as a business development company (“BDC”); and

●

the effect of future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in our operating areas, particularly with respect to BDC or RICs.

Such forward-looking statements may include statements preceded by, followed by or that otherwise include the words “may,” “might,” “will,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “potential,” “plan” or similar words.

We have based the forward-looking statements included in this quarterly report on Form 10-Q on information available to us on the date of this quarterly report on Form 10-Q. Actual results could differ materially from those anticipated in our forward-looking statements, and future results could differ materially from historical performance. We undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law or U.S. Securities and Exchange Commission (“SEC”) rule or regulation. You are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

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Overview

We were organized as a Maryland corporation on May 18, 2012, and formally commenced operations on November 7, 2012. Our investment objective is to maximize the total return to our stockholders in the form of current income and capital appreciation through debt and related equity investments in lower middle-market companies.

We are an externally managed, non-diversified, closed-end investment company that has elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (the “1940 Act”). Our investment activities are managed by our investment adviser, Stellus Capital.

As a BDC, we are required to comply with certain regulatory requirements. For instance, as a BDC, we must not acquire any assets other than “qualifying assets” specified in the 1940 Act unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets. Qualifying assets include investments in “eligible portfolio companies” (as defined in the 1940 Act). Under the relevant SEC rules, the term “eligible portfolio company” includes all private operating companies, operating companies whose securities are not listed on a national securities exchange, and certain public operating companies that have listed their securities on a national securities exchange and have a market capitalization of less than $250 million, in each case organized and with their principal place of business in the United States.

We have elected, qualified, and intend to continue to qualify annually to be treated for tax purposes as a RIC under Subchapter M of the internal Revenue Code of 1986, as amended (the “Code”). To maintain our qualification as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements. As of March 31, 2025, we were in compliance with the RIC requirements. As a RIC, we generally will not have to pay corporate-level U.S. federal income taxes on any income we distribute to our stockholders.

On March 23, 2018, the Small Business Credit Availability Act (the “SBCAA”) was signed into law, which included various changes to regulations under the federal securities laws that impact BDCs. The SBCAA included changes to the 1940 Act to allow BDCs to decrease their asset coverage requirement to 150% from 200% subject to certain circumstances.

On April 4, 2018, the board of directors of the Company (the “Board”), including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) of the Board, approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act. At our 2018 annual meeting of stockholders our stockholders also approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act. As a result, the asset coverage ratio applicable to us was decreased from 200% to 150%, effective June 29, 2018, which effectively increased the amount of leverage we may incur. As of March 31, 2025, our asset coverage ratio was 216%. The amount of leverage that we employ at any time depends on our assessment of the market and other factors at the time of any proposed borrowing.

Economic Developments

Economic activity has continued to accelerate across sectors and regions. Nonetheless, we have observed and continue to observe supply chain interruptions, labor resource shortages, commodity inflation, fluctuating interest rates, bank impairments and failures, economic sanctions in response to international conflicts and instances of geopolitical, economic and financial market instability in the United States and abroad, including as a result of the imposition of tariffs in the United States or its trading partners. One or more of these factors may contribute to increased market volatility and may have long- and short-term effects in the United States and worldwide financial markets.

Portfolio Composition and Investment Activity

Portfolio Composition

We originate and invest primarily in privately held lower middle-market companies (typically those with $5.0 million to $50.0 million of EBITDA) with a focus on investing through first lien (including unitranche) loans, often with a corresponding equity investment.

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As of March 31, 2025, we had $991.1 million (at fair value) invested in 110 portfolio companies. As of March 31, 2025, our portfolio included approximately 90% of first lien debt, 1% of second lien debt, 1% of unsecured debt and 8% of equity investments at fair value. The composition of our investments at cost and fair value as of March 31, 2025 was as follows:


	Cost		Fair Value
Senior Secured – First Lien⁽¹⁾	$	918,052,733	$	888,500,654
Senior Secured – Second Lien		12,084,138		11,948,850
Unsecured Debt		6,864,228		6,705,769
Equity		60,830,565		83,948,504
Total Investments at Fair Value	$	997,831,664	$	991,103,777

(1)

Includes unitranche investments, which account for 1.9% of our portfolio at fair value. Unitranche structures may combine characteristics of first lien senior secured, as well as second lien and/or subordinated loans. Our unitranche loans may expose us to certain risk associated with second lien and subordinated loans to the extent we invest in the “last-out” tranche.

As of December 31, 2024, we had $953.5 million (at fair value) invested in 105 portfolio companies. As of December 31, 2024, our portfolio included approximately 90% of first lien debt, 1% of second lien debt, 1% of unsecured debt and 8% of equity investments at fair value. The composition of our investments at cost and fair value as of December 31, 2024 was as follows:


	Cost		Fair Value
Senior Secured – First Lien⁽¹⁾	$	884,322,462	$	856,096,255
Senior Secured – Second Lien		12,073,732		11,948,850
Unsecured Debt		6,755,866		6,612,493
Equity		58,636,646		78,840,090
Total Investments at Fair Value	$	961,788,706	$	953,497,688

(1)

Includes unitranche investments, which account for 2.0% of our portfolio at fair value. Unitranche structures may combine characteristics of first lien senior secured, as well as second lien and/or subordinated loans. Our unitranche loans may expose us to certain risk associated with second lien and subordinated loans to the extent we invest in the “last-out” tranche.

Our investment portfolio may contain loans that are in the form of lines of credit or revolving credit facilities, which require us to provide funding when requested by portfolio companies in accordance with the terms and conditions of the underlying loan agreements. As of March 31, 2025 and December 31, 2024, we had unfunded commitments of $46.5 million and $41.3 million, respectively, to provide financing to 72 and 71 portfolio companies, respectively. As of March 31, 2025, we had sufficient liquidity (through cash on hand and available borrowings under the Credit Facility (as defined below) to fund such unfunded commitments should the need arise.

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The following is a summary of geographical concentration in our investment portfolio as of March 31, 2025:


					% of Total
					Investments at
	Cost		Fair Value		Fair Value
California	$	183,759,361	$	180,143,989	18.18	%
Texas		154,718,968		153,093,310	15.45	%
Florida		109,257,282		104,818,655	10.58	%
Illinois		67,687,101		57,608,822	5.81	%
Pennsylvania		52,798,217		54,814,087	5.53	%
Arizona		43,416,841		46,612,063	4.70	%
New York		36,106,476		36,400,772	3.67	%
Ohio		33,609,449		35,917,579	3.62	%
Colorado		39,158,839		35,405,722	3.57	%
Canada		31,909,912		32,074,271	3.24	%
District of Columbia		22,607,275		26,177,477	2.64	%
Georgia		11,860,249		22,876,501	2.31	%
North Carolina		20,933,261		22,118,879	2.23	%
Wisconsin		30,579,019		20,580,392	2.08	%
Massachusetts		19,936,720		20,391,332	2.06	%
Tennessee		20,476,976		20,447,184	2.06	%
Iowa		18,572,441		18,530,010	1.87	%
New Jersey		11,191,151		11,911,882	1.20	%
Idaho		11,757,404		11,819,529	1.19	%
Michigan		11,373,634		11,565,671	1.17	%
Missouri		10,313,148		10,522,539	1.06	%
Virginia		9,381,441		9,498,704	0.96	%
Louisiana		9,200,420		9,218,704	0.93	%
Oregon		8,903,578		8,903,578	0.90	%
Washington		8,177,844		8,708,683	0.88	%
Maryland		7,541,120		7,496,189	0.76	%
Minnesota		6,547,210		6,969,215	0.70	%
South Carolina		4,840,161		5,001,770	0.50	%
Indiana		743,770		994,182	0.10	%
United Kingdom		472,396		482,086	0.05	%
Total Investments at Fair Value	$	997,831,664	$	991,103,777	100.00	%

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The following is a summary of geographical concentration of in investment portfolio as of December 31, 2024:


					% of Total
					Investments at
	Cost		Fair Value		Fair Value
Texas	$	159,028,754	$	154,041,942	16.15	%
California		160,285,777		152,583,692	16.00	%
Florida		108,434,730		104,718,969	10.98	%
Illinois		66,486,029		56,591,435	5.94	%
Pennsylvania		53,271,774		54,438,594	5.71	%
Arizona		43,552,887		46,839,063	4.91	%
New York		36,116,358		36,306,098	3.81	%
Ohio		33,645,676		35,847,804	3.76	%
Canada		32,107,256		32,375,749	3.40	%
Colorado		31,283,806		28,218,186	2.96	%
Wisconsin		27,935,159		23,352,084	2.45	%
District of Columbia		22,711,852		26,654,283	2.80	%
Georgia		12,391,680		23,345,077	2.45	%
North Carolina		20,946,327		22,314,018	2.34	%
Tennessee		20,490,429		20,703,772	2.17	%
Massachusetts		19,965,590		20,559,398	2.16	%
Missouri		18,590,476		18,712,569	1.96	%
Iowa		13,486,486		13,486,486	1.41	%
Idaho		11,763,648		11,830,192	1.24	%
New Jersey		11,181,815		11,754,323	1.23	%
Michigan		11,389,446		11,510,608	1.21	%
Louisiana		9,216,389		9,371,830	0.98	%
Virginia		9,293,896		9,373,367	0.98	%
Washington		8,193,234		8,216,962	0.86	%
Maryland		7,529,294		7,526,300	0.79	%
Minnesota		6,448,091		6,452,144	0.68	%
South Carolina		4,836,178		4,984,667	0.52	%
Indiana		743,770		920,343	0.10	%
United Kingdom		461,899		467,733	0.05	%
	$	961,788,706	$	953,497,688	100.00	%

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The following is a summary of industry concentration in our investment portfolio as of March 31, 2025:


					% of Total
					Investments at
	Cost		Fair Value		Fair Value
Services: Business	$	243,646,441	$	258,489,176	26.08	%
High Tech Industries		91,028,612		93,430,034	9.43	%
Healthcare & Pharmaceuticals		85,729,558		84,959,811	8.57	%
Media: Advertising, Printing & Publishing		79,111,134		79,724,472	8.04	%
Beverage & Food		63,707,729		68,723,968	6.93	%
Consumer Goods: Non-Durable		66,582,041		56,310,657	5.68	%
Capital Equipment		50,126,287		52,518,594	5.30	%
Services: Consumer		49,269,639		45,982,572	4.64	%
Chemicals, Plastics, & Rubber		38,127,354		37,992,254	3.83	%
Construction & Building		31,934,161		32,454,388	3.27	%
Consumer Goods: Durable		34,792,596		32,395,267	3.27	%
Aerospace & Defense		27,130,502		22,847,756	2.31	%
Environmental Industries		19,061,096		20,695,413	2.09	%
Transportation & Logistics		17,991,080		18,241,796	1.84	%
Retail		14,787,280		14,778,304	1.49	%
Media: Broadcasting & Subscription		12,142,342		14,411,416	1.45	%
Energy: Oil & Gas		11,343,396		10,559,460	1.07	%
Containers, Packaging, & Glass		20,666,618		10,294,415	1.04	%
Hotel, Gaming, & Leisure		7,137,590		8,285,168	0.84	%
FIRE: Real Estate		17,934,808		7,707,712	0.78	%
Media: Diversified & Production		5,804,592		5,916,959	0.60	%
Finance		119,281		5,370,188	0.54	%
Wholesale		5,060,939		5,060,939	0.51	%
Education		4,596,588		3,953,058	0.40	%
Total	$	997,831,664	$	991,103,777	100.00	%

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The following is a summary of industry concentration in our investment portfolio as of December 31, 2024:


					% of Total
					Investments at
	Cost		Fair Value		Fair Value
Services: Business	$	219,665,133	$	234,908,112	24.64	%
High Tech Industries		91,135,577		93,468,792	9.81	%
Healthcare & Pharmaceuticals		85,300,317		85,478,418	8.97	%
Media: Advertising, Printing & Publishing		71,318,416		72,291,584	7.58	%
Beverage & Food		64,052,951		68,902,142	7.23	%
Consumer Goods: Non-Durable		67,123,135		54,473,282	5.71	%
Services: Consumer		49,388,222		46,066,301	4.83	%
Capital Equipment		41,322,214		43,647,466	4.58	%
Consumer Goods: Durable		43,393,413		42,094,390	4.41	%
Chemicals, Plastics, & Rubber		36,693,101		36,907,602	3.87	%
Construction & Building		32,374,992		32,979,859	3.46	%
Aerospace & Defense		26,014,106		21,624,091	2.27	%
Environmental Industries		18,903,681		18,282,056	1.92	%
Transportation & Logistics		17,244,131		17,532,488	1.84	%
Retail		14,799,085		14,723,620	1.54	%
Media: Broadcasting & Subscription		12,170,577		14,314,711	1.50	%
Containers, Packaging, & Glass		18,007,571		12,911,794	1.35	%
Energy: Oil & Gas		11,353,959		10,728,031	1.13	%
Hotel, Gaming, & Leisure		7,113,661		8,142,050	0.85	%
FIRE: Real Estate		17,934,808		7,652,436	0.80	%
Media: Diversified & Production		5,822,637		5,934,853	0.62	%
Education		10,537,738		5,341,151	0.56	%
Finance		119,281		5,092,459	0.53	%
	$	961,788,706	$	953,497,688	100.00	%

At March 31, 2025, our average portfolio company investment at amortized cost and fair value was approximately $9.1 million and $9.0 million, respectively, and our largest portfolio company investment at amortized cost and fair value was $23.6 million and $21.8 million, respectively. At December 31, 2024, our average portfolio company investment at amortized cost and fair value was approximately $9.2 million and $9.2 million, respectively, and our largest portfolio company investment at amortized cost and fair value was approximately $23.2 million and $21.2 million, respectively.

At March 31, 2025 and December 31, 2024, 91.4% and 94.5% of our debt investments bore interest based on floating rates (subject to interest rate floors) and 8.6% and 5.5% bore interest at fixed rates, respectively.

The weighted average yield on all of our debt investments as of both March 31, 2025 and December 31, 2024 was approximately 10.3%. The weighted average yield on all of our investments, including non-income producing equity positions, as of March 31, 2025 and December 31, 2024 was approximately 9.6% and 9.7%, respectively. The weighted average yield was computed using the effective interest rates for all of our debt investments, including accretion of original issue discount. The weighted average yield of our debt investments is not the same as a return on investment for our stockholders, but rather relates to a portion of our investment portfolio and is calculated before the payment of all of our subsidiaries’ fees and expenses.

As of March 31, 2025 and December 31, 2024, we had cash and cash equivalents of $10.9 million and $20.1 million, respectively.

Investment Activity

During the three months ended March 31, 2025, we made an aggregate of $55.4 million of investments in seven new portfolio companies and five existing portfolio companies. During the three months ended March 31, 2025, we received an aggregate of $15.0 million in proceeds from repayments of our investments.

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During the three months ended March 31, 2024, we made an aggregate of $28.5 million of investments in three new portfolio companies and eight existing portfolio companies. During the three months ended March 31, 2024, we received an aggregate of $31.2 million in proceeds from repayments of our investments.

Our level of investment activity can vary substantially from period to period depending on many factors, including the amount of debt and equity capital to lower middle-market companies, the level of merger and acquisition activity, the general economic environment and the competitive environment for the types of investments we make.

Asset Quality

In addition to various risk management and monitoring tools, Stellus Capital uses an investment rating system to characterize and monitor the credit profile and expected level of returns on each investment in our portfolio. This investment rating system uses a five-level numeric scale. The following is a description of the conditions associated with each investment category:

●

Investment Category 1 is used for investments that are performing above expectations, and whose risks remain favorable compared to the expected risk at the time of the original investment.

●

Investment Category 2 is used for investments that are performing within expectations and whose risks remain neutral compared to the expected risk at the time of the original investment. All new loans are initially rated 2.

●

Investment Category 3 is used for investments that are performing below expectations and that require closer monitoring, but where no loss of return or principal is expected. Portfolio companies with a rating of 3 may be out of compliance with financial covenants.

●

Investment Category 4 is used for investments that are performing substantially below expectations and whose risks have increased substantially since the original investment. These investments are often in work out. Investments with a rating of 4 are those for which some loss of return but no loss of principal is expected.

●

Investment Category 5 is used for investments that are performing substantially below expectations and whose risks have increased substantially since the original investment. These investments are almost always in work out. Investments with a rating of 5 are those for which some loss of return and principal is expected.


	As of March 31, 2025					As of December 31, 2024
	(dollars in millions)					(dollars in millions)
					Number of					Number of
			% of Total		Portfolio			% of Total		Portfolio
Investment Category	Fair Value		Portfolio		Companies⁽¹⁾	Fair Value		Portfolio		Companies⁽¹⁾
1	$	255.0	26	%	27	$	227.2	24	%	24
2		575.0	58	%	63		564.5	59	%	61
3		120.8	12	%	13		112.0	12	%	11
4		31.2	3	%	4		41.3	4	%	5
5		9.1	1	%	4		8.5	1	%	5
Total	$	991.1	100	%	111	$	953.5	100	%	106

(1)	One portfolio company appears in two categories as of both March 31, 2025 and December 31, 2024.

Loans and Debt Securities on Non-Accrual Status

We will not accrue interest on loans and debt securities if we have reason to doubt our ability to collect such interest. As of March 31, 2025, we had loans to five portfolio companies that were on non-accrual status, which represented approximately 6.7% of our loan portfolio at cost and 4.0% at fair value. As of December 31, 2024, we had loans to seven portfolio companies that were on non-accrual status, which represented approximately 8.3% of our loan portfolio at cost and 5.4% at fair value. As of March 31, 2025 and December 31, 2024, $7.8 million and $6.5 million of income from investments on non-accrual had not been accrued, respectively.

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Results of Operations

An important measure of our financial performance is net increase (decrease) in net assets resulting from operations, which includes net investment income (loss), net realized gain (loss) and net unrealized appreciation (depreciation). Net investment income (loss) is the difference between our income from interest, dividends, fees and other investment income and our operating expenses, including interest on borrowed funds. Net realized gain (loss) on investments is the difference between the proceeds received from dispositions of portfolio investments and their amortized cost. Net unrealized appreciation (depreciation) on investments is the net change in the fair value of our investment portfolio.

Comparison of the Three Months Ended March 31, 2025 and 2024

Revenues

We generate revenue in the form of interest income on debt investments and capital gains and distributions, if any, on investment securities that we may acquire in portfolio companies. Our debt investments typically have a term of five to seven years and bear interest primarily at floating rates. Interest on our debt securities is generally payable quarterly. Payments of principal on our debt investments may be amortized over the stated term of the investment, deferred for several years or due entirely at maturity. In some cases, our debt investments may pay interest in-kind, or PIK interest. Any outstanding principal amount of our debt securities and any accrued but unpaid interest will generally become due at the maturity date. The level of interest income we receive is directly related to the balance of interest-bearing investments multiplied by the weighted average yield of our investments. We expect that the total dollar amount of interest and any dividend income that we earn will increase as the size of our investment portfolio increases. In addition, we may generate revenue in the form of prepayment fees, commitment, loan origination, structuring or due diligence fees, fees for providing significant managerial assistance and consulting fees.

The following shows the breakdown of investment income for the three months ended March 31, 2025 and 2024 (in millions).


	For the three months ended
	March 31, 2025		March 31, 2024
Interest income⁽¹⁾	$	23.1	$	23.8
PIK interest		1.0		0.8
Miscellaneous fees⁽¹⁾		0.9		1.5
Total	$	25.0	$	26.0

(1)	For the three months ended March 31, 2025 and 2024, we recognized $0.1 million and $0.8 million, respectively, of non-recurring income related to early repayments and amendments to specific loan positions.

The decrease in investment income for the three months ended March 31, 2025 was due primarily to a decrease in prevailing market rates on our loans, typically in reference to the Secured Overnight Financing Rate (“SOFR”), and a decrease in non-recurring income, partially offset by an increase in our principal debt outstanding.

Expenses

Our primary operating expenses include the payment of fees to Stellus Capital under the investment advisory agreement, our allocable portion of overhead expenses under the administration agreement and other operating costs described below. We bear all other out-of-pocket costs and expenses of our operations and transactions, which may include:

●

organization and offering costs;

●

valuing our assets and calculating our net asset value (including the cost and expenses of any independent valuation firm);

●

fees and expenses payable to third parties, including agents, consultants or other advisors, in monitoring financial and legal affairs for us and in monitoring our investments and performing due diligence on our prospective portfolio companies or otherwise relating to, or associated with, evaluating and making investments;

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●

interest payable on debt, if any, incurred to finance our investments and expenses related to unsuccessful portfolio acquisition efforts;

●

offerings of our commons stock and other securities;

●

base management and incentive fees;

●

administration fees and expenses, if any, payable under the administration agreement (including our allocable portion of Stellus Capital’s overhead in performing its obligations under the administration agreement, including rent and the allocable portion of the cost of our chief financial officer and chief compliance officer and their respective staffs);

●

transfer agent and custodial fees and expenses;

●

U.S. federal and state registration fees;

●

all costs of registration and listing our securities on any securities exchange;

●

U.S. federal, state and local taxes;

●

independent directors’ fees and expenses;

●

costs of preparing and filing reports or other documents required by the SEC or other regulators;

●

costs of any reports, proxy statements or other notices to stockholders, including printing costs;

●

costs and fees associated with any fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums;

●

direct costs and expenses of administration and operation, including printing, mailing, long distance telephone, copying, secretarial and other staff, independent auditors and outside legal costs;

●

proxy voting expenses; and

●

all other expenses incurred by us or Stellus Capital in connection with administering our business.

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The following shows the breakdown of operating expenses for the three months ended March 31, 2025 and 2024 (in millions).


	For the three months ended
	March 31, 2025		March 31, 2024
Operating Expenses
Management fees	$	4.1	$	3.9
Valuation fees		0.2		0.2
Administrative services expenses		0.4		0.5
Income incentive fees		2.1		2.5
Professional fees		0.4		0.3
Directors’ fees		0.1		0.1
Insurance expense		0.1		0.1
Interest expense and other fees		8.3		7.8
Income tax expense		0.5		0.4
Other general and administrative expenses		0.2		0.2
Total Operating Expenses	$	16.4	$	16.0
Income incentive fee waiver		(1.2)		(0.2)
Total Operating Expenses, net of fee waivers	$	15.2	$	15.8

The decrease in operating expenses for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was due to the income incentive fee waiver, offset by increased management fees, interest expense and other fees due to overall portfolio growth.

Net Investment Income

For the three months ended March 31, 2025, net investment income was $9.8 million, or $0.35 per common share (based on 27,602,612 weighted average shares outstanding for the three months ended March 31, 2025).

For the three months ended March 31, 2024, net investment income was $10.2 million, or $0.42 per common share (based on 24,125,642 weighted average shares outstanding for the three months ended March 31, 2024).

Net investment income for the three months ended March 31, 2025 decreased compared to the three months endedMarch 31, 2024 as a result of decreased interest income as explained in the “Revenues” section above, offset by lower operating expenses as explained in the “Expenses” section above.

Net Realized Gains and Losses

We measure net realized gains or losses by the difference between the net proceeds from the repayment, sale or other disposition and the amortized cost basis of the investment, using the specific identification method, without regard to unrealized appreciation or depreciation previously recognized.

Proceeds from repayments of investments and amortization of certain other investments for the three months ended March 31, 2025 totaled $15.0 million and net realized losses totaled ($6.0) million.

Proceeds from repayments of investments and amortization of certain other investments for the three months ended March 31, 2024 totaled $31.2 million and net realized losses totaled ($20.4) million.

Net Change in Unrealized Appreciation of Investments

Net change in unrealized appreciation primarily reflects the change in portfolio investment values during the reporting period, including the reversal of previously recorded appreciation or depreciation when gains or losses are realized.

Net change in unrealized appreciation on investments and cash equivalents for the three months ended March 31, 2025 and 2024 totaled $1.2 million and $23.5 million, respectively.

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The change in unrealized appreciation over the respective periods was due to reversals of previous write-downs that were realized and company-specific investment write-downs, offset by company-specific write-ups.

Provision for Taxes on Unrealized Investments

We have direct wholly owned subsidiaries that have elected to be taxable entities (the “Taxable Subsidiaries”). The Taxable Subsidiaries permit us to hold equity investments in portfolio companies, which are “pass through” entities for U.S. federal income tax purposes and continue to comply with the “source income” requirements contained in RIC tax provisions of the Code. The Taxable Subsidiaries are not consolidated with us for U.S. federal income tax purposes and may generate U.S. federal income tax expense, benefit, and the related tax assets and liabilities, as a result of their ownership of certain portfolio investments. The U.S. federal income tax expense, or benefit, if any, and related tax assets and liabilities are reflected in our consolidated financial statements. For the three months ended March 31, 2025 and 2024, we recognized a provision for income tax on unrealized investments of $0.0 million and ($0.2) million for the Taxable Subsidiaries, respectively. As of both March 31, 2025 and December 31, 2024, there was $0.0 million of deferred tax liabilities on the Consolidated Statements of Assets and Liabilities.

Net Increase in Net Assets Resulting from Operations

For the three months ended March 31, 2025, net increase in net assets resulting from operations totaled $5.0 million, or $0.18 per common share (based on 27,602,612 weighted average shares outstanding for the three months ended March 31, 2025).

For the three months ended March 31, 2024, net increase in net assets resulting from operations totaled $13.1 million, or $0.54 per common share (based on 24,125,642 weighted average shares outstanding for the three months ended March 31, 2024).

The net increase in net assets between the respective periods was due to lower unrealized appreciation, partially offset by lower realized losses in the current year.

Financial Condition, Liquidity and Capital Resources

Cash Flows from Operating and Financing Activities

Our operating activities used net cash of $36.9 million for the three months ended March 31, 2025, primarily in connection with the purchase of portfolio investments, partially offset by and sales and repayments of portfolio investments. Our financing activities for the three months ended March 31, 2025 provided cash of $27.8 million, primarily from proceeds from our ATM Program and net borrowings on our Credit Facility, partially offset by repayments of SBA-guaranteed debentures.

Our operating activities provided net cash of $4.5 million for the three months ended March 31, 2024, primarily in connection with sales and repayments of portfolio investments, offset by the purchase of portfolio investments. Our financing activities for the three months ended March 31, 2024 provided cash of $18.2 million, primarily from proceeds from net borrowings on our Credit Facility for the purchase of portfolio investments.

Liquidity and Capital Resources

Our liquidity and capital resources are derived from the Credit Facility, Notes Payable, SBA-guaranteed debentures and cash flows from operations, including investment sales and repayments, the ATM Program (as defined below), and income earned. Our primary use of funds from operations includes investments in portfolio companies and other operating expenses we incur, as well as the payment of dividends to the holders of our common stock. We used, and expect to continue to use, these capital resources as well as proceeds from turnover within our portfolio and from public and private offerings of securities to finance our investment activities.

Although we expect to fund the growth of our investment portfolio through the net proceeds from future public and private equity offerings and issuances of senior securities or future borrowings to the extent permitted by the 1940 Act, our plans to raise capital may not be successful. In this regard, if our common stock trades at a price below our then-current net asset value per share, we may be limited in our ability to raise equity capital given that we cannot sell our common stock at a price below net asset value per share unless our stockholders approve such a sale and our Board makes certain determinations in connection therewith. A proposal, approved by our stockholders at our 2024 annual stockholders meeting, authorizes us to sell up to 25% of our outstanding common shares at a price equal

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to or below the then current net asset value per share in one or more offerings. This authorization will expire on the earlier of (i) June 20, 2025, the one-year anniversary of our 2024 annual stockholders meeting, and (ii) the date of our 2025 annual stockholder meeting. We would need similar future approval from our stockholders to issue shares below the then current net asset value per share any time after the expiration of the current approval. In addition, we intend to distribute between 90% and 100% of our taxable income to our stockholders in order to satisfy the requirements applicable to RICs under Subchapter M of the Code. Consequently, we may not have the funds or the ability to fund new investments, to make additional investments in our portfolio companies, to fund our unfunded commitments to portfolio companies or to repay borrowings. In addition, the illiquidity of our portfolio investments may make it difficult for us to sell these investments when desired and, if we are required to sell these investments, we may realize significantly less than their recorded value.

Also, as a BDC, we generally are required to meet an asset coverage ratio of total assets, less liabilities and indebtedness not represented by senior securities, over the aggregate amount of the senior securities, which include all of our borrowings and any outstanding preferred stock, of at least 150% effective June 29, 2018 (at least 200% prior to June 29, 2018). This requirement limits the amount that we may borrow. We have received exemptive relief from the SEC to permit us to exclude the debt of the Stellus Capital SBIC, LP (the “SBIC I subsidiary”) and Stellus Capital SBIC II, LP (the “SBIC II subsidiary”) (collectively, the “SBIC subsidiaries”) guaranteed by the U.S. Small Business Administration (“SBA”) from the definition of senior securities in the asset coverage test under the 1940 Act. We were in compliance with the asset coverage ratios at all times. As of March 31, 2025 and December 31, 2024, our asset coverage ratio was 216% and 234%, respectively. The amount of leverage that we employ will depend on our assessment of market conditions and other factors at the time of any proposed borrowing, such as the maturity, covenant package and rate structure of the proposed borrowings, our ability to raise funds through the issuance of shares of our common stock and the risks of such borrowings within the context of our investment outlook. Ultimately, we only intend to use leverage if the expected returns from borrowing to make investments will exceed the cost of such borrowing. As of March 31, 2025 and December 31, 2024, we had cash and cash equivalents of $10.9 million and $20.1 million, respectively.

Credit Facility

On October 11, 2017, we entered into a senior secured revolving credit agreement, as amended, dated as of October 10, 2017, that was amended and restated on December 21, 2021, February 28, 2022, May 13, 2022, November 21, 2023 and October 30, 2024, with Zions Bancorporation, N.A., dba Amegy Bank and various other lenders (the “Credit Facility”).

The Credit Facility provides for borrowings up to a maximum of $315.0 million on a committed basis with an accordion feature that allows us to increase the aggregate commitments up to $350.0 million, subject to new or existing lenders agreeing to participate in the increase and other customary conditions.

Pursuant to the Fourth Amendment to the Amended and Restated Senior Secured Revolving Credit Agreement, the Credit Facility will bear interest, subject to our election, on a per annum basis equal to (i) term SOFR plus 2.50% (or 2.75% during certain periods in which our asset coverage ratio is equal to or below 1.90 to 1.00) plus a SOFR credit spread adjustment (0.10% for one-month term SOFR and 0.15% for three-month term SOFR), with a 0.25% SOFR floor, or (ii) 1.50% (or 1.75% during certain periods in which the our asset coverage ratio is equal to or below 1.90 to 1.00) plus an alternate base rate based on the highest of the prime rate (subject to a 3% floor), Federal Funds Rate plus 0.50% and one-month term SOFR plus 1.00%. We pay unused commitment fees of 0.50% per annum on the unused lender commitments under the Credit Facility. Interest is payable monthly or quarterly in arrears. The commitment to fund the revolver expires on November 21, 2027, after which we may no longer borrow under the Credit Facility and must begin repaying principal equal to 1/12 of the aggregate amount outstanding under the Credit Facility each month. Any amounts borrowed under the Credit Facility will mature, and all accrued and unpaid interest thereunder will be due and payable, on November 21, 2028.

Our obligations to the lenders are secured by a first priority security interest in our portfolio of securities and cash not held at the SBIC subsidiaries, but excluding short term investments. The Credit Facility contains certain covenants, including but not limited to: (i) maintaining a minimum liquidity test of at least $10.0 million, including cash, liquid investments and undrawn availability, (ii) maintaining an asset coverage ratio of at least 1.67 to 1.0, (iii) maintaining a minimum stockholder’s equity, and (iv) maintaining a minimum interest coverage ratio of at least 1.75 to 1.00. As of March 31, 2025 and December 31, 2024, we were in compliance with these covenants.

As of March 31, 2025 and December 31, 2024, $221.8 million and $175.4 million, respectively, was outstanding under the Credit Facility. The carrying amount of the amount outstanding under the Credit Facility approximates its fair value. The fair value of the Credit

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Facility is determined in accordance with Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of the Credit Facility is estimated based upon market interest rates for our own borrowings or entities with similar credit risk, adjusted for nonperformance risk, if any. We incurred costs of $7.3 million in connection with the current Credit Facility, which are being amortized over the life of the facility. Additionally, $0.3 million of costs from a prior credit facility will continue to be amortized over the remaining life of the Credit Facility. As of March 31, 2025 and December 31, 2024, $2.8 million and $3.1 million of such prepaid loan structure fees and administration fees had yet to be amortized, respectively. These prepaid loan fees are presented on the Consolidated Statements of Assets and Liabilities as a deduction from the debt liability.

Interest is paid quarterly in arrears. The following table summarizes the interest expense and amortized loan fees on the Credit Facility for the three months ended March 31, 2025 and 2024 (dollars in millions):


	For the three months ended
	March 31, 2025			March 31, 2024
Interest expense	$	3.9		$	3.2
Loan fee amortization		0.3			0.3
Total interest and financing expenses	$	4.2		$	3.5
Weighted average interest rate		7.2	%		8.5	%
Effective interest rate (including fee amortization)		7.7	%		9.1	%
Average debt outstanding	$	220.4		$	154.1
Cash paid for interest and unused fees	$	3.8		$	3.2

SBA-Guaranteed Debentures

Due to the SBIC subsidiaries’ status as Small Business Investment Companies (“SBICs”), we have the ability to issue debentures guaranteed by the SBA at favorable interest rates (“SBA-guaranteed debentures”). Under the regulations applicable to SBICs, a single licensee can have outstanding SBA-guaranteed debentures, subject to a regulatory leverage limit, up to two times the amount of regulatory capital. As of March 31, 2025 and December 31, 2024, the SBIC I subsidiary had $75.0 million in “regulatory capital”, as such term is defined by the SBA, and $133.8 million and $150.0 million of SBA-guaranteed debentures outstanding, respectively.

As of both March 31, 2025 and December 31, 2024, the SBIC II subsidiary had $87.5 million in regulatory capital. As of both March 31, 2025 and December 31, 2024, the SBIC II subsidiary had $175.0 million of SBA-guaranteed debentures outstanding.

On August 12, 2014, we obtained exemptive relief from the SEC to permit us to exclude the debt of the SBIC subsidiaries guaranteed by the SBA from our 150% asset coverage test under the 1940 Act. The exemptive relief provides us with increased flexibility under the 150% asset coverage test by permitting us to borrow up to $325.0 million more than we would otherwise be able to absent the receipt of this exemptive relief.

On a stand-alone basis, the SBIC subsidiaries held $494.5 million and $510.1 million in assets at March 31, 2025 and December 31, 2024, respectively, which accounted for approximately 48.9% and 52.0% of our total consolidated assets, respectively.

SBA-guaranteed debentures have fixed interest rates that equal prevailing 10-year U.S. Treasury Note rates plus a market spread and have a maturity of ten years with interest payable semi-annually. The principal amount of the debentures is not required to be paid before maturity but may be pre-paid at any time with no prepayment penalty. SBA-guaranteed debentures drawn before October 1, 2019 incur upfront fees of 3.425%, which consists of a 1.00% commitment fee and a 2.425% issuance discount, which are amortized over the life of the SBA-guaranteed debentures. SBA-guaranteed debentures drawn after October 1, 2019 incur upfront fees of 3.435%, which consists of a 1.00% commitment fee and a 2.435% issuance discount, which are amortized over the life of the SBA-guaranteed debentures. Once pooled, which occurs in March and September of each applicable year, the SBA-guaranteed debentures bear interest at a fixed rate that is set to the current 10-year treasury rate plus a spread at each pooling date.

The fair values of the SBA-guaranteed debentures are determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of the SBA-guaranteed debentures is estimated based upon market interest rates for our own

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borrowings or entities with similar credit risk, adjusted for nonperformance risk, if any. At March 31, 2025 and December 31, 2024, the SBA-guaranteed debentures would be deemed to be Level 3, as defined in Note 6 to the Consolidated Financial Statements.

As of March 31, 2025, we have incurred $11.1 million in financing costs related to the SBA-guaranteed debentures since the SBIC subsidiaries received their licenses, which were recorded as prepaid loan fees. As of March 31, 2025 and December 31, 2024, $3.6 million and $3.7 million of prepaid financing costs had yet to be amortized, respectively. These prepaid loan fees are presented on the Consolidated Statements of Assets and Liabilities as a deduction from the debt liability.

The following table summarizes the interest expense and amortized fees on the SBA-guaranteed debentures for the three months ended March 31, 2025 and 2024 (dollars in millions):


	For the three months ended
	March 31, 2025			March 31, 2024
Interest expense	$	2.5		$	2.6
Debenture fee amortization		0.2			0.3
Total interest and financing expenses	$	2.7		$	2.9
Weighted average interest rate		3.3	%		3.2	%
Effective interest rate (including fee amortization)		3.5	%		3.6	%
Average debt outstanding	$	316.7		$	325.0
Cash paid for interest	$	5.2		$	5.2

Notes Offering

On January 14, 2021, we issued $100.0 million in aggregate principal amount of 4.875% fixed-rate notes due 2026 (the “Notes Payable”). The Notes Payable will mature on March 30, 2026 and may be redeemed in whole or in part at any time or from time to time at our option on or after December 31, 2025 at a redemption price equal to 100% of the outstanding principal, plus accrued and unpaid interest. Interest is payable semi-annually beginning September 30, 2021.

As of both March 31, 2025 and December 31, 2024, the aggregate carrying amount of the Notes Payable were approximately $100.0 million. The Notes Payable are institutional, non-traded notes.

In connection with the issuance of the Notes Payable, we have incurred $2.3 million of fees, which are being amortized over the term of the Notes Payable, of which $0.4 million and $0.6 million remains to be amortized as of March 31, 2025 and December 31, 2024, respectively. These financing costs are presented on the Consolidated Statements of Assets and Liabilities as a deduction from the debt liability.

The following table summarizes the interest expense and deferred financing costs on the Notes Payable for the three months ended March 31, 2025 and 2024 (dollars in millions):


	For the three months ended
	March 31, 2025			March 31, 2024
Interest expense	$	1.2		$	1.2
Deferred financing costs		0.1			0.1
Total interest and financing expenses	$	1.3		$	1.3
Weighted average interest rate		4.9	%		4.9	%
Effective interest rate (including fee amortization)		5.4	%		5.4	%
Average debt outstanding	$	100.0		$	100.0
Cash paid for interest	$	2.4		$	2.4

ATM Program

On August 11, 2023, we entered into an equity distribution agreement (the “Equity Distribution Agreement”) with Keefe Bruyette & Woods, Inc. and Raymond James & Associates, Inc., as sales agents and/or principal thereunder. Under the Equity Distribution Agreement, we may issue and sell, from time to time, up to $100,000,000 in aggregate offering price of shares of our common stock, par

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value $0.001 per share, with the intention to use the net proceeds from this at-the-market sales program to repay certain outstanding indebtedness and make investments in portfolio companies in accordance with its investment objective and strategies. We refer to our issuance and sale of shares under the Equity Distribution Agreement as the “ATM Program.”

We issued 656,085 shares during the three months ended March 31, 2025 under the ATM Program for gross proceeds of $9.3 million and underwriting fees and other expenses of $0.3 million. The average per share offering price of shares issued in the ATM Program during the three months ended March 31, 2025 was $14.11. We did not issue any shares during the three months ended March 31, 2024 under the ATM Program. The Advisor agreed to reimburse us for underwriting fees and expenses to the extent the per share price of the shares to the public, less underwriting fees, was less then net asset value per share. For the three months ended March 31, 2025, the Advisor was not required to reimburse underwriting fees as all shares were issued at a premium to net asset value.

Off-Balance Sheet Arrangements

We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. As of March 31, 2025, we had $46.2 million in unfunded debt commitments and $0.3 million in unfunded equity commitments to 72 existing portfolio companies. As of December 31, 2024, we had $41.0 million in unfunded debt commitments and $0.3 million in unfunded equity commitments to 71 existing portfolio companies. As of March 31, 2025, we had sufficient liquidity (through cash on hand and available borrowings under the Credit Facility) to fund such unfunded loan commitments should the need arise.

Regulated Investment Company Status and Dividends

We have elected, have qualified, and intend to qualify annually to be treated for U.S. federal income tax purposes as a RIC under Subchapter M of the Code. So long as we maintain our qualification as a RIC, we will not be taxed on our investment company taxable income or realized net capital gains, to the extent that such taxable income or gains are distributed, or deemed to be distributed, to stockholders as dividends on a timely basis.

Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized appreciation or depreciation until realized. Distributions declared and paid by us in a year may differ from taxable income for that year as such dividends may include the distribution of current year taxable income or the distribution of prior year taxable income carried forward into and distributed in the current year. Distributions also may include returns of capital.

To qualify for RIC tax treatment, we must, among other things, distribute, with respect to each taxable year, at least 90% of our investment company net taxable income (i.e., our net ordinary income and our realized net short-term capital gains in excess of realized net long-term capital losses, if any). If we maintain our qualification as a RIC, we must also satisfy certain distribution requirements each calendar year in order to avoid a federal excise tax on our undistributed earnings of a RIC. As of December 31, 2024, we had $45.4 million of undistributed taxable income that will be carried forward toward distributions paid during the year ending December 31, 2024.

We intend to distribute to our stockholders between 90% and 100% of our annual taxable income (which includes our taxable interest and fee income). However, the covenants contained in the Credit Facility may prohibit us from making distributions to our stockholders, and, as a result, could hinder our ability to satisfy the distribution requirement. In addition, we may retain for investment some or all of our net taxable capital gains (i.e., realized net long-term capital gains in excess of realized net short-term capital losses) and treat such amounts as deemed distributions to our stockholders. If we do this, our stockholders will be treated as if they received actual distributions of the capital gains we retained and then reinvested the net after-tax proceeds in our common stock. Our stockholders also may be eligible to claim tax credits (or, in certain circumstances, tax refunds) equal to their allocable share of the tax we paid on the capital gains deemed distributed to them. To the extent our taxable earnings for a fiscal taxable year fall below the total amount of our dividends for that fiscal year, a portion of those dividend distributions may be deemed a return of capital to our stockholders.

We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of these distributions from time to time. In addition, we may be limited in our ability to make distributions due to the asset coverage test for borrowings applicable to us as a business development company under the 1940 Act and due to provisions in Credit Facility. We cannot assure stockholders that they will receive any distributions or distributions at a particular level.

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In accordance with certain applicable U.S. Treasury regulations and private letter rulings issued by the Internal Revenue Service (the “IRS”), a RIC may treat a distribution of its own stock as fulfilling its RIC distribution requirements if each stockholder may elect to receive his or her entire distribution in either cash or stock of the RIC, subject to a limitation that the aggregate amount of cash to be distributed to all stockholders must be at least 20% of the aggregate declared distribution. If too many stockholders elect to receive cash, each stockholder electing to receive cash must receive a pro rata amount of cash (with the balance of the distribution paid in stock). In no event will any stockholder, electing to receive cash, receive less than 20% of his or her entire distribution in cash.

If these and certain other requirements are met, for U.S. federal income tax purposes, the amount of the dividend paid in stock will be equal to the amount of cash that could have been received instead of stock. We have no current intention of paying dividends in shares of our stock in accordance with these U.S. Treasury regulations or private letter rulings. However, we continue to monitor the Company’s liquidity position and the overall economy and will continue to assess whether it would be in our and our shareholders best interest to take advantage of the IRS rulings.

Recent Accounting Pronouncements

See Note 1 to the consolidated financial statements contained herein for a description of recent accounting pronouncements, if any, including the expected dates of adoption and the anticipated impact on the financial statements.

Critical Accounting Policies

See Note 1 to the consolidated financial statements contained herein for a description of our critical accounting policies.

Subsequent Events

Our management has evaluated subsequent events through the date of issuance of the financial statements included herein. There have been no subsequent events that require recognition or disclosure in these financial statements except for the following described below.

Investment Portfolio

We invested in the following portfolio companies subsequent to March 31, 2025:


Activity Type	Date	Company Name	Company Description	Investment Amount		Instrument Type
Add-On Investment	April 8, 2025	TriplePoint Acquisition Holdings LLC*	Provider of HVAC, plumbing, and other mechanical and industrial services	$	1,773,809	Senior Secured – First Lien
Add-On Investment	May 5, 2025	FairWave Holdings, LLC*	Specialty coffee platform	$	19,336	Equity
Add-On Investment	May 8, 2025	Unicat Catalyst Holdings, LLC*	Manufacturer and distributor of catalysts and other industrial products	$	13,961	Equity

* Existing portfolio company

We realized the following portfolio company investment subsequent to March 31, 2025:


Activity Type	Date	Company Name	Company Description	Proceeds Received		Realized Gain		Instrument Type
Full Repayment	April 8, 2025	Florachem Corporation	Distiller and supplier of natural citrus, pine, and specialty inputs	$	9,725,000	$	—	Senior Secured – First Lien
				$	53,078	$	—	Delayed Draw Term Loan Commitment
				$	100,000	$	—	Revolver Commitment
				$	514,107	$	151,674	Equity

Credit Facility

The outstanding balance under the Credit Facility as of May 12, 2025 was $147.5 million.

7.250% Notes due 2030

On April 1, 2025, we issued $75.0 million in aggregate principal amount of 7.250% Notes due 2030 (the “7.250% Notes”). The 7.250% Notes bear interest at a rate of 7.250% per year payable semi-annually in arrears on April 1 and October 1 of each year, commencing October 1, 2025. The 7.250% Notes will mature on April 1, 2030, unless previously redeemed or repurchased in accordance with their terms. The 7.250% Notes are the direct unsecured obligations of our and rank pari passu with our existing and future unsecured,

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unsubordinated indebtedness, including the Notes Payable; senior to any series of preferred stock that we may issue in the future; senior to any of our future indebtedness that expressly provides it is subordinated to the 7.250% Notes; effectively subordinated to all of our existing and future secured indebtedness (including indebtedness that is initially unsecured to which we subsequently grants security), to the extent of the value of the assets securing such indebtedness, including, without limitation, borrowings under the Credit Facility; and structurally subordinated to all existing and future indebtedness and other obligations of any of our existing or future subsidiaries.

In connection with the 7.250% Notes, we and U.S. Bank Trust Company, National Association (as successor-in-interest to U.S. Bank National Association), as trustee (the “Trustee”), entered into a Fourth Supplemental Indenture (the “Fourth Supplemental Indenture”) to the Base Indenture, dated May 5, 2014, between us and the Trustee (together with the Fourth Supplemental Indenture, the “Indenture”).

The Indenture contains certain covenants, including covenants requiring us to comply with Section 18(a)(1)(A) as modified by Section 61(a)(2) of the 1940 Act, or any successor provisions whether or not we continue to be subject to such provisions of the 1940 Act, but giving effect, in either case, to any exemptive relief granted to us by the SEC and certain other exceptions, and to provide financial information to the holders of the 7.250% Notes and the Trustee if we should no longer be subject to the reporting requirements under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These covenants are subject to important limitations and exceptions that are set forth in the Indenture.

Dividend Declared

On April 4, 2025, the Board declared a regular monthly dividend for each of April 2025, May 2025, and June 2025 as follows:


	Ex-Dividend	Record	Payment	Amount per
Declared	Date	Date	Date	Share
4/4/2025	4/30/2025	4/30/2025	5/15/2025	$	0.1333
4/4/2025	5/30/2025	5/30/2025	6/13/2025	$	0.1333
4/4/2025	6/30/2025	6/30/2025	7/15/2025	$	0.1333

Item 3.Quantitative and Qualitative Disclosures About Market Risk

We are subject to financial market risks, including changes in interest rates. In March 2022, the Federal Reserve raised interest rates for the first time since December 2018, and subsequently raised interest rates several times, most recently in July 2023, bringing the target for the federal funds rate to 5.25% - 5.50%, the highest since January 2001. In September 2024, the Federal Reserve began easing its policy, most recently lowering the federal funds rate to a target range of 4.25% - 4.50% in December 2024. As of March 31, 2025 and December 31, 2024, 91.4% and 98% of the loans in our portfolio bore interest at a floating rate, respectively. These floating rate loans typically bear interest in reference to SOFR, which is indexed to 30-day or 90-day SOFR rates, subject to an interest rate floor. As of both March 31, 2025 and December 31, 2024, the weighted average interest rate floor on our floating rate loans was 1.46%.

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Assuming that the consolidated statement of assets and liabilities as of March 31, 2025 was to remain constant and no actions were taken to alter the existing interest rate sensitivity, the following table shows the annual impact on net income of changes in interest rates:


	($ in millions)
	Interest			Interest		Net Interest
Change in Basis Points⁽²⁾	Income			Expense⁽³⁾		Income⁽¹⁾
Up 200 basis points	$	16.7	$	(4.4)	$	12.3
Up 150 basis points		12.5		(3.3)		9.2
Up 100 basis points		8.3		(2.2)		6.1
Up 50 basis points		4.2		(1.1)		3.1
Down 50 basis points		(4.2)		1.1		(3.1)
Down 100 basis points		(8.3)		2.2		(6.1)
Down 150 basis points		(12.5)		3.3		(9.2)
Down 200 basis points		(16.7)		4.4		(12.3)

(1)	Excludes the impact of incentive fees based on pre-incentive fee net investment income. See Note 2 to the consolidated financial statements contained herein for more information on the incentive fee.

(2)	At March 31, 2025, the three-month SOFR rate was 429 basis points. This table assumes floating rates would not fall below zero.

(3)	Includes the impact of the 25 bps SOFR floor in place on the Credit Facility.

Although we believe that this measure is indicative of our sensitivity to interest rate changes, it does not adjust for potential changes in credit quality, size and composition of the assets on the balance sheet and other business developments that could affect net increase in net assets resulting from operations. Accordingly, no assurances can be given that actual results would not differ materially from the potential outcome simulated by this estimate. We may hedge against interest rate fluctuations by using standard hedging instruments such as futures, options and forward contacts subject to the requirements of the 1940 Act. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in the benefits of lower interest rates with respect to our portfolio of investments. For the three months ended March 31, 2025 and 2024, we did not engage in hedging activities.

Item 4.Controls and Procedures

(a)	Evaluation of Disclosure Controls and Procedures

The Company’s management, under the supervision and with the participation of various members of management, including its Chief Executive Officer and its Chief Financial Officer, has evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) of the Exchange Act as of the end of the period covered by this report. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective as of the end of the period covered by this report.

(b)	Changes in Internal Control Over Financial Reporting

The Company’s management did not identify any change in the Company’s internal control over financial reporting that occurred during the three months ended March 31, 2025 that has materially affected, or is reasonable likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1.Legal Proceedings

We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us or our subsidiaries. From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.

Item 1A.Risk Factors

Investing in our securities involves a number of significant risks. In addition to the other information set forth in this quarterly report on Form 10-Q, you should carefully consider the risk factors discussed in “Item 1A. Risk Factors” of Annual Report on Form 10-K filed with the SEC on March 4, 2025, all of which could materially affect our business, financial condition and/or results of operations. Although the risks described in our other SEC filings referenced above represent the principal risks associated with an investment in us, they are not the only risks we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, might materially and adversely affect our business, financial condition and/or results of operations.

During the three months ended March 31, 2025, there have been no material changes to the risk factors discussed in our SEC filings referenced above.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

We did not engage in unregistered sales of equity securities during the three months ended March 31, 2025.

No shares were issued under the distribution reinvestment program during either of the three months ended March 31, 2025 and 2024.

Item 3.Defaults Upon Senior Securities

Not applicable.

Item 4.Mine Safety Disclosures

Not applicable.

Item 5.Other Information

(a)

None.

(b)

None.

(c)

Rule 10b5-1 Trading Plans

During the three months ended March 31, 2025, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

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Item 6.Exhibits.

The following exhibits are filed as part of this report or hereby incorporated by reference to exhibits filed with the SEC:


Exhibit Number		Description
3.1		Articles of Amendment and Restatement (Incorporated by reference to Exhibit (a)(1) to the Registrant’s Registration Statement on Form N-2 (File No. 333-184195), filed on October 23, 2012).

3.2		Bylaws (Incorporated by reference to Exhibit (b)(1) to the Registrant’s Registration Statement on Form N-2 (File No. 333-184195), filed on October 23, 2012).

4.1		Form of Stock Certificate (Incorporated by reference to Exhibit (d) to the Registrant’s Registration Statement on Form N-2 (File No. 333-184195), filed on October 23, 2012).

4.2		Fourth Supplemental Indenture, dated as of April 1, 2025, by and between Stellus Capital Investment Corporation and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee (Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 814-00971), filed on April 2, 2025).

4.3		Form of Global Note with respect to the 7.250% Notes due 2030 (Incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No. 814-00971), filed on April 2, 2025).

31.1		Chief Executive Officer Certification pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

31.2		Chief Financial Officer Certification pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

32.1		Chief Executive Officer Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

32.2		Chief Financial Officer Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

101.INS*		XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File — The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

*	Filed herewith

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: May 12, 2025	STELLUS CAPITAL INVESTMENT CORPORATION

	By:	/s/ Robert T. Ladd
		Name:	Robert T. Ladd
		Title:	Chief Executive Officer and President

	By:	/s/ W. Todd Huskinson
		Name:	W. Todd Huskinson
		Title:	Chief Financial Officer