Stellus Private Credit BDC Reports Results for its Third Fiscal Quarter Ended September 30, 2024

FINANCIAL HIGHLIGHTS

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

Three Months Ended

Nine Months Ended

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

Amount

Per Share

Amount

Per Share

Amount

Per Share

Amount

Per Share

Net investment income

$4.66

$0.49

$3.08

$0.47

$12.08

$1.45

$8.41

$1.39

Net unrealized (depreciation) appreciation included in earnings

(0.40)

(0.04)

1.05

0.16

(0.49)

(0.06)

2.81

0.47

Provision for taxes on net unrealized appreciation on investments

(0.01)

—

(0.05)

(0.01)

(0.01)

—

(0.06)

(0.01)

Net increase in net assets resulting from operations

$4.25

$0.45

$4.08

$0.62

11.58

1.39

11.16

1.85

Distributions

(4.74)

(0.50)

(3.19)

(0.48)

(12.43)

(1.49)

(8.22)

(1.36)

Other weighted average share adjustments⁽¹⁾

—

—

—

(0.02)

—

0.03

—

(0.03)

Net asset value

142.2

$15.14

104.7

$15.10

142.2

$15.14

104.7

$15.10

Weighted average shares outstanding

9,456,180

6,584,179

8,335,421

6,044,958

(1)

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. 

PORTFOLIO ACTIVITY

($ in millions)

As of

As of

September 30, 2024

December 31, 2023

Investments at fair value

$256.7

$208.6

Total assets

$262.5

$211.2

Net assets

$142.2

$108.0

Shares outstanding

9,394,977

7,102,136

Net asset value per share

$15.14

$15.21

Three Months Ended

September 30, 2024

September 30, 2023

New investments

$9.0

$27.1

Repayments of investments

(6.6)

(4.8)

Net activity

$2.4

$22.3

As of

As of

September 30, 2024

December 31, 2023

Number of portfolio company investments

50

39

Number of debt investments

47

37

Weight average yield of debt and other income producing investments ⁽²⁾

Cash

10.8 %

11.8 %

Payment-in-kind ("PIK")

0.3 %

0.3 %

Fee amortization

0.4 %

0.4 %

Total

11.5 %

12.5 %

Weighted average yield on total investments ⁽³⁾

Cash

10.3 %

11.2 %

PIK

0.3 %

0.3 %

Fee amortization

0.4 %

0.4 %

Total

11.0 %

11.9 %

(2)

The dollar-weighted average annualized effective yield is computed using the effective interest rate for our debt investments and other income producing investments, including cash and PIK interest, as well as the accretion of deferred fees. The individual investment yields are then weighted by the respective cost of the investments (as of the date presented) in calculating the weighted average effective yield of the portfolio. The dollar-weighted average annualized yield on the Company's investments for a given period will generally be higher than what investors of our common stock would realize in a return over the same period because the dollar-weighted average annualized yield does not reflect the Company's expense or any sales load that may be paid by investors.

(3)

The dollar weighted average yield on total investments takes the same yields as calculated in the footnote above, but weights them to determine the weighted average effective yield as a percentage of the Company's total investments, including non-income producing loans and equity.

Activity Type

Date

Company Name

Company Description

Investment Amount

 Instrument Type

New Investment

August 16, 2024

Bart & Associates, LLC

Provides IT modernization services for federal
customers

$

3,390,671

Senior Secured – First Lien

$

4,624,972

Delayed Draw Term Loan Commitment

$

785,847

Revolver Commitment

$

314,339

Equity

Add-On Investment

August 26, 2024

Impact Home Services LLC*

Residential garage door, electrical, and plumbing
services provider

$

869,871

Delayed Draw Term Loan Commitment

Add-On Investment

September 11, 2024

Service Minds Company, LLC*

Provider of residential electrical services

$

129,317

Revolver Commitment

Add-On Investment

September 30, 2024

The Hardenbergh Group, Inc. *

Provider of temporary professional staffing of
Medical Services Professionals, external peer review,
consulting and physician leadership solutions

$

366,253

Senior Secured – First Lien

Add-On Investment

September 30, 2024

Monitorus Holding, LLC*

Provider of media monitoring and evaluation services

$

34,111

Unsecured Convertible Bond

*

Existing portfolio company

Activity Type

Date

Company Name

Company Description

Proceeds Received

 Instrument Type

Full Repayment

September 27, 2024

EHI Buyer, Inc.*

Provider of design, engineering,
installation, and maintenance services
for building management systems

$

2,792,479

Senior Secured – First Lien

$

1,071,860

Delayed Draw Term Loan

*

Existing portfolio company

Activity Type

Date

Company Name

Company Description

Investment Amount

Instrument Type

Add-On Investment

October 18, 2024

Compost 360 Acquisition, LLC*

Organic waste recycler and producer of compost,
mulch, and engineered soils

$

40,880

Equity

New Investment

October 31, 2024

Norplex Micarta Acquisition, Inc.

Manufacturer of thermoset composite laminates

$

5,972,094

Senior Secured – First Lien

$

1,822,665

Revolver Commitment

$

427,155

Equity

Add-On Investment

November 7, 2024

Green Intermediateco II, Inc.*

Cyber-security focused value-added reseller and
associated service provider

$

3,607,117

Senior Secured – First Lien

*

Existing portfolio company

Activity Type

Date

Company Name

Company Description

Proceeds Received

 Instrument Type

Full Repayment

November 4, 2024

Baker Manufacturing
Company, LLC*

Manufacturer of water well equipment,
specialized filtration pumps, and custom castings

5,668,459

Senior Secured – First Lien

*

Existing portfolio company

Record

Payment

Amount per

Declared

Date

Date

Share

10/10/2024

10/10/2024

10/31/2024

$

0.1600

10/10/2024

11/1/2024

11/29/2024

$

0.1600

10/10/2024

12/2/2024

12/31/2024

$

0.1600

STELLUS PRIVATE CREDIT BDC

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

September 30, 2024

(unaudited)

December 31, 2023

ASSETS

Non-controlled, non-affiliated investments, at fair value (amortized cost of
$255,095,531 and $206,513,758, respectively)

$

256,654,766

$

208,574,078

Cash and cash equivalents

3,518,021

593,685

Other receivable

144,561

—

Interest receivable

1,807,092

1,495,581

Expense reimbursement receivable from the Advisor (Note 2)

128,330

126,539

Deferred offering costs

115,952

72,875

Related party receivable

3,249

162,455

Prepaid expenses

52,145

127,019

Receivable for sales and repayments of investments

96,583

71,105

   Total Assets

$

262,520,699

$

211,223,337

LIABILITIES

Credit Facilities payable

$

117,030,797

$

97,031,517

Related party payable

51,719

—

Dividends payable

—

3,551,068

Unearned revenue

739,887

897,538

Income incentive fee payable

532,486

439,854

Capital gains incentive fee payable

167,045

261,684

Interest payable

902,052

367,093

Administrative services payable

113,714

124,958

Income tax payable

51,769

182,489

Deferred tax liability

183,857

167,865

Other accrued expenses and liabilities

520,791

177,249

   Total Liabilities

$

120,294,117

$

103,201,315

Commitments and contingencies (Note 7)

   Net Assets

$

142,226,582

$

108,022,022

NET ASSETS

Common shares of beneficial interest, par value $0.01 per share (unlimited shares
authorized; 9,394,977 and 7,102,136 issued and outstanding, respectively)

$

93,950

$

71,021

Paid-in capital

139,835,601

104,810,048

Total distributable earnings

2,297,031

3,140,953

   Net Assets

$

142,226,582

$

108,022,022

   Total Liabilities and Net Assets

$

262,520,699

$

211,223,337

   Net Asset Value Per Share

$

15.14

$

15.21

STELLUS PRIVATE CREDIT BDC

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

Three Months Ended

Nine Months Ended

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

INVESTMENT INCOME

Interest income

$

7,800,382

$

6,042,784

$

20,954,358

$

15,933,509

Other income

132,962

96,972

328,683

335,525

   Total Investment Income

$

7,933,344

$

6,139,756

$

21,283,041

$

16,269,034

OPERATING EXPENSES

Management fees

$

896,304

$

763,066

$

2,497,611

$

2,031,626

Income incentive fees

756,668

529,714

1,997,539

1,437,391

Capital gains incentive (reversal) fee

(124,713)

99,640

(94,639)

224,532

Professional fees

156,396

142,356

481,328

522,867

Organization costs

—

—

—

1,000

Amortization of deferred offering costs

61,701

25,108

157,083

123,837

Administrative services expenses

135,018

103,415

379,067

298,089

Trustees' fees

40,000

40,000

120,000

120,000

Insurance expense

20,418

20,530

60,811

60,921

Valuation fees

31,965

20,572

60,683

38,846

Interest expense and other fees

2,496,503

2,312,758

6,884,954

5,838,668

Income tax expense

—

3,953

29,274

20,643

Other general and administrative expenses

75,218

22,386

196,063

103,409

   Total Operating Expenses

$

4,545,478

$

4,083,498

$

12,769,774

$

10,821,829

   Expenses reimbursed/fees waived by Investment Advisor (Note 2)

$

(1,276,857)

$

(1,022,379)

$

(3,566,605)

$

(2,952,608)

   Net Operating Expenses

$

3,268,621

$

3,061,119

$

9,203,169

$

7,869,221

   Net Investment Income

$

4,664,723

$

3,078,637

$

12,079,872

$

8,399,813

   Net realized gain on foreign currency translation

$

5,522

$

8,599

20,367

19,920

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

(424,614)

1,054,344

(508,252)

2,801,721

   Net change in unrealized appreciation (depreciation) on foreign currency translations

20,336

(9,918)

7,167

(3,725)

   Provision for taxes on net unrealized gain on investments

(19,791)

(56,622)

(15,993)

(56,622)

   Net Increase in Net Assets Resulting from Operations

$

4,246,176

$

4,075,040

$

11,583,161

$

11,161,107

   Net Investment Income Per Share – basic and diluted

$

0.49

$

0.47

$

1.45

$

1.39

   Net Increase in Net Assets Resulting from Operations Per Share – basic and diluted

$

0.45

$

0.62

$

1.39

$

1.85

   Weighted Average Common Shares of Beneficial Interest Outstanding – basic and diluted

9,456,180

6,584,179

8,335,421

6,044,958

   Distributions Per Share – basic and diluted

$

0.50

$

0.48

$

1.49

$

1.36

STELLUS PRIVATE CREDIT BDC

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (unaudited)

Common Shares of

Beneficial Interest

Total

Number of 

Par

Paid-in 

distributable

shares

value

capital

(loss) gain

Net Assets

Balances at December 31, 2022

5,483,433

$

54,834

$

80,950,845

$

(742,722)

$

80,262,957

Net investment income

—

—

—

2,637,999

2,637,999

Net realized gain on foreign currency translation

—

—

—

3,475

3,475

Net change in unrealized depreciation on non-controlled, non-affiliated investments

—

—

—

(72,026)

(72,026)

Net change in unrealized appreciation on foreign currency translations

—

—

—

6,220

6,220

Distributions from net investment income

—

—

—

(2,306,409)

(2,306,409)

Issuance of common shares of beneficial interest

349,546

3,496

5,115,958

—

5,119,454

Balances at March 31, 2023

5,832,979

$

58,330

$

86,066,803

$

(473,463)

$

85,651,670

Net investment income

—

—

—

2,683,177

2,683,177

Net realized gain on foreign currency translation

—

—

—

7,846

7,846

Net change in unrealized appreciation on non-controlled, non-affiliated investments

—

—

—

1,819,403

1,819,403

Net change in unrealized depreciation on foreign currency translation

—

—

—

(27)

(27)

Distributions from net investment income

—

—

—

(2,720,486)

(2,720,486)

Issuance of common shares of beneficial interest

349,945

3,499

5,152,116

—

5,155,615

Balances at June 30, 2023

6,182,924

$

61,829

$

91,218,919

$

1,316,450

$

92,597,198

Net investment income

—

—

—

3,078,637

3,078,637

Net realized gain on foreign currency translation

—

—

—

8,599

8,599

Net change in unrealized appreciation on non-controlled, non-affiliated investments

—

—

—

1,054,344

1,054,344

Net change in unrealized depreciation on foreign currency translations

—

—

—

(9,918)

(9,918)

Provision for taxes on net unrealized gain on investments

—

—

—

(56,622)

(56,622)

Distributions from net investment income

—

—

—

(3,190,125)

(3,190,125)

Issuance of common shares of beneficial interest

752,130

7,522

11,260,016

—

11,267,538

Balances at September 30, 2023

6,935,054

$

69,351

$

102,478,935

$

2,201,365

$

104,749,651

Balances at December 31, 2023

7,102,136

$

71,021

$

104,810,048

$

3,140,953

$

108,022,022

Net investment income

—

—

—

3,552,515

3,552,515

Net realized gain on foreign currency translation

—

—

—

8,442

8,442

Net change in unrealized appreciation on non-controlled, non-affiliated investments

—

—

—

333,461

333,461

Net change in unrealized depreciation on foreign currency translations

—

—

—

(8,881)

(8,881)

Benefit for taxes on net unrealized loss on investments

—

—

—

45,885

45,885

Distributions from net investment income

—

—

—

(3,610,362)

(3,610,362)

Issuance of common shares of beneficial interest

255,902

2,559

3,901,680

—

3,904,239

Balances at March 31, 2024

7,358,038

$

73,580

$

108,711,728

$

3,462,013

$

112,247,321

Net investment income

—

—

—

3,862,634

3,862,634

Net realized gain on foreign currency translation

—

—

—

6,403

6,403

Net change in unrealized depreciation on non-controlled, non-affiliated investments

—

—

—

(417,099)

(417,099)

Net change in unrealized depreciation on foreign currency translations

—

—

—

(4,288)

(4,288)

Provision for taxes on net unrealized gain on investments

—

—

—

(42,087)

(42,087)

Distributions from net investment income

—

—

—

(4,075,936)

(4,075,936)

Issuance of common shares of beneficial interest

2,032,499

20,325

31,035,613

—

31,055,938

Balances at June 30, 2024

9,390,537

$

93,905

$

139,747,341

$

2,791,640

$

142,632,886

Net investment income

—

—

—

4,664,723

4,664,723

Net realized gain on foreign currency translation

—

—

—

5,522

5,522

Net change in unrealized depreciation on non-controlled, non-affiliated investments

—

—

—

(424,614)

(424,614)

Net change in unrealized appreciation on foreign currency translations

—

—

—

20,336

20,336

Provision for taxes on net unrealized gain on investments

—

—

—

(19,791)

(19,791)

Distributions from net investment income

—

—

—

(4,740,785)

(4,740,785)

Issuance of common shares of beneficial interest

377,534

3,776

5,751,834

—

5,755,610

Redemption of common shares of beneficial interest

(373,094)

(3,731)

(5,663,574)

—

(5,667,305)

Balances at September 30, 2024

9,394,977

$

93,950

$

139,835,601

$

2,297,031

$

142,226,582

STELLUS PRIVATE CREDIT BDC

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

Nine Months Ended

September 30, 2024

September 30, 2023

Cash Flows from Operating Activities

Net increase in net assets resulting from operations

$

11,583,161

$

11,161,107

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

   Purchases of investments

(67,038,045)

(68,472,583)

   Proceeds from sales and repayments of investments

19,584,247

17,370,805

   Net change in unrealized depreciation (appreciation) on investments

508,252

(2,801,721)

   Net change in unrealized (appreciation) depreciation foreign currency translations

(7,167)

3,725

   Increase in investments due to PIK

(671,421)

(217)

   Amortization of premium and accretion of discount, net

(482,032)

(359,012)

   Deferred tax provision

15,992

56,622

   Amortization of loan structure fees

231,435

442,513

   Amortization of deferred offering costs

157,083

123,837

Changes in other assets and liabilities

   Increase in interest receivable

(311,511)

(472,546)

   Increase in other receivable

(144,561)

—

   Decrease (increase) in related party receivable

159,206

(126,946)

   (Increase) decrease in expense reimbursements receivable from the Advisor

(1,791)

82,895

   Decrease in prepaid expenses

74,874

107,581

   Increase in related party payable

51,719

—

   (Decrease) increase in administrative services payable

(11,244)

35,267

   Increase (decrease) in interest payable

534,959

(276,647)

   Increase in income incentive fees payable

92,632

24,946

   (Decrease) increase in capital gains incentive fees payable

(94,639)

224,532

   (Decrease) increase in unearned revenue

(157,651)

324,516

   (Decrease) increase in income tax payable

(130,720)

12,343

   Increase in other accrued expenses and liabilities

343,542

5,278

Net Cash Used in Operating Activities

$

(35,713,680)

$

(42,533,705)

Cash Flows from Financing Activities

   Proceeds from issuance of common shares of beneficial interest

$

40,715,787

$

21,542,607

   Offering costs paid for common shares of beneficial interest issued

(200,160)

(134,882)

   Purchase of common shares of beneficial interest in tender offer

(5,667,305)

—

   Stockholder distributions paid

(15,978,151)

(6,836,428)

   Borrowings under Credit Facilities

131,300,000

96,600,000

   Repayments of Credit Facilities

(110,700,000)

(71,415,000)

   Financing costs paid on Credit Facilities

(832,155)

(352,744)

   Short-term loan repayments

—

(11,250,000)

Net Cash Provided by Financing Activities

$

38,638,016

$

28,153,553

Net Increase (Decrease) in Cash and Cash Equivalents

$

2,924,336

$

(14,380,152)

Cash and Cash Equivalents Balance at Beginning of Period

593,685

15,469,823

Cash and Cash Equivalents Balance at End of Period

$

3,518,021

$

1,089,671

Supplemental and Non-Cash Activities

   Cash paid for interest expense

$

6,118,560

$

5,672,802

   Income and excise tax paid

159,994

11,045

   Increase in deferred offering costs

43,077

8,300

   Value of common shares of beneficial interest issued pursuant to Dividend Reinvestment Plan

1,185,787

442,606

   (Decrease) increase in dividends payable

(3,551,068)

1,380,592