HOUSTON, March 6,
2025 /PRNewswire/ -- Stellus Private Credit BDC
("Stellus PBDC", "we", or the "Company") today announced financial
results for its fourth fiscal quarter and year ended December 31, 2024.
Robert T. Ladd, Chief Executive
Officer of Stellus PBDC, stated "We are pleased to report strong
results in the fourth quarter in which we generated $0.37 per share of net investment income and
maintained a stable net asset value. During the quarter, we funded
$53 million of investments and
received $11 million of repayments,
bringing the total portfolio to $301
million at fair value. On January 9,
2025, we declared our 2025 first quarter monthly dividend of
$0.36 per share in the
aggregate."
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FINANCIAL HIGHLIGHTS
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($ in millions, except
data relating to per share amounts and shares
outstanding)
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Three Months Ended
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Years Ended
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December 31, 2024
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December 31, 2023
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December 31, 2024
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December 31, 2023
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Amount
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Per Share
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Amount
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Per Share
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Amount
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Per Share
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Amount
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Per Share
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Net investment
income
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$3.49
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$0.37
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$3.92
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$0.56
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$15.57
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$1.80
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$12.33
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$1.96
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Net realized gain on
investments
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0.01
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—
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0.70
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0.11
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0.03
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—
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0.70
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0.11
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Net unrealized
appreciation (depreciation) included in earnings
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1.39
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0.14
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(0.22)
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(0.03)
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0.88
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0.11
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2.59
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0.41
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Provision for taxes on
net unrealized appreciation on investments
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(0.08)
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(0.01)
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(0.11)
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(0.02)
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(0.09)
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(0.01)
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(0.17)
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(0.03)
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Net increase in net
assets resulting from operations
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$4.81
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$0.50
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$4.29
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$0.62
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$16.39
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$1.90
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$15.45
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$2.46
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Distributions
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(4.53)
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(0.47)
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(3.55)
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(0.51)
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(16.96)
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(1.96)
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(11.77)
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(1.88)
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Other weighted average
share adjustments(1)
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—
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(0.01)
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—
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—
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—
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0.01
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—
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—
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Net asset
value
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$162.39
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$15.16
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$108.02
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$15.21
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$162.39
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$15.16
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$108.02
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$15.21
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Weighted average shares
outstanding
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9,561,014
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6,953,190
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8,643,493
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6,273,882
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(1)
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Includes the impact of
different share amounts as a result of calculating certain per
share data based on weighted average shares outstanding during the
period and certain per share data based on shares outstanding as of
the period end.
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PORTFOLIO
ACTIVITY
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($ in
millions)
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As of
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As of
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December 31, 2024
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December 31, 2023
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Investments at fair
value
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$300.7
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$208.6
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Total assets
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$304.8
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$211.2
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Net assets
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$162.4
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$108.0
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Shares
outstanding
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10,715,095
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7,102,136
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Net asset value per
share
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$15.16
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$15.21
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Three Months
Ended
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December 31, 2024
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December 31, 2023
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New
investments
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$52.8
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$20.9
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Repayments of
investments
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(10.7)
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(24.9)
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Net activity
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$42.1
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($4.0)
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As of
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As of
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December 31, 2024
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December 31, 2023
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Number of portfolio
company investments
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59
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39
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Number of debt
investments
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55
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37
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Weight average yield of
debt and other income producing
investments(2)
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Cash
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10.2 %
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11.8 %
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Payment-in-kind
("PIK")
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0.2 %
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0.3 %
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Fee
amortization
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0.4 %
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0.4 %
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Total
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10.8 %
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12.5 %
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Weighted average yield
on total investments(3)
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Cash
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9.8 %
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11.2 %
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PIK
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0.2 %
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0.3 %
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Fee
amortization
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0.3 %
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0.4 %
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Total
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10.3 %
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11.9 %
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(2)
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The dollar-weighted
average annualized effective yield is computed using the effective
interest rate for the Company's debt investments and other income
producing investments, including cash and PIK interest, as well as
the accretion of deferred fees. The individual investment yields
are then weighted by the respective cost of the investments (as of
the date presented) in calculating the weighted average effective
yield of the portfolio. The dollar-weighted average annualized
yield on the Company's investments for a given period will
generally be higher than what investors 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.
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(3)
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The dollar weighted
average yield on total investments takes the same yields as
calculated in the footnote above, but weights them to determine the
weighted average effective yield as a percentage of the Company's
total investments, including non-income producing equity positions
and debt investments on non-accrual status.
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Results of Operations
Investment income for the three months ended December 31, 2024 and 2023 totaled $7.8 million and $7.1
million, respectively, most of which was interest income
from portfolio investments.
Gross operating expenses for the three months ended December 31, 2024 and 2023 totaled $5.0 million and $4.3
million, respectively. For the same periods, base management
fees totaled $1.0 million and
$0.8 million, income incentive fees
totaled $0.6 million and $0.7 million, respectively; capital gains
incentive fees of $0.1 million and
$0.0 million, which are not currently
payable, respectively; fees and expenses related to the Company's
borrowings totaled $2.6 million and
$2.4 million, respectively (including
interest and amortization of deferred financing costs),
respectively; administrative expenses totaled $0.2 million and $0.1
million, respectively and other expenses totaled
$0.5 million and $0.3 million, respectively. For the three months
ended December 31, 2024 and 2023, the
Company's investment advisor, Stellus Private BDC Advisor, LLC
(the "Advisor"), waived $0.3 million
and $0.8 million of management fees,
respectively; $0.2 million of income
incentive fees for both periods (waived as our shares were not
listed on a national exchange), and $0.2
million and $0.1 million of
expenses pursuant to expense support and conditional reimbursements
from the Advisor, respectively, for net operating expenses of
$4.3 million and $3.2 million, respectively.
For the three months ended December 31,
2024 and 2023, net investment income was $3.5 million and $3.9 million,
or $0.37 and $0.56 per common share based on
weighted average common shares outstanding of 9,561,014 and
6,953,190, respectively.
The Company's investment portfolio had a net change in
unrealized appreciation (depreciation) of $1.4 million and ($0.2)
million for the three months ended December 31, 2024 and 2023, respectively.
For the three months ended December 31,
2024 and 2023, net increase in net assets resulting from
operations totaled $4.8 million and $4.3 million,
or $0.50 and $0.62 per common share, based on
weighted average common shares outstanding of 9,561,014 and
6,953,190, respectively.
Liquidity and Capital Resources
On September 30, 2022, the Company
entered into a senior secured revolving credit agreement with Zions
Bancorporation, N.A., dba Amegy Bank and various other lenders (the
"Credit Facility" and together with the Commitment Facility and SPV
Facility, the "Credit Facilities"). The Credit Facility, as
amended, provides for borrowings up to a maximum of $175.0 million on a committed basis with an
accordion feature that allows the Company to increase the aggregate
commitments up to $200.0 million,
subject to new or existing lenders agreeing to participate in the
increase and other customary conditions. As of December 31, 2024 and December 31, 2023, the Company had $90.5 million and $98.0
million in outstanding borrowings under the Credit Facility,
respectively.
On August 1, 2024, the Company
entered into a Loan Financing and Servicing Agreement (the "Loan
Agreement") for the SPV Facility by and among Stellus Private
Credit BDC SPV LLC ("PBDC SPV"), as borrower, the Company, as
equityholder and servicer, Deutsche Bank AG, New York Branch, as facility agent, Citibank,
N.A., as collateral agent and collateral custodian, Alter Domus (US) LLC, as collateral
administrator, and the lenders that are party thereto from time to
time. The SPV Facility provides for $50.0
million of initial commitments with an accordion feature
that allows for an additional $50.0
million of total commitments from new and existing lenders
on the same terms and conditions as the existing commitments. As of
December 31, 2024, the Company had
$50.0 million in outstanding
borrowings under the SPV Facility.
Distributions
During the three months ended December
31, 2024 and 2023, the Company declared aggregate
distributions of $0.48 per share and
$0.50, respectively, ($4.5 million and $3.6
million in the aggregate, respectively). Tax characteristics
of all distributions are reported to stockholders on Form 1099-DIV.
Approximately $0.3 million of the
dividends declared in 2024 are expected to be characterized as
long-term capital gains. None of these dividends are expected to
include a return of capital.
Recent Portfolio Activity
The Company invested in the following portfolio companies for
the three months ended December 31,
2024:
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Activity
Type
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Date
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Company
Name
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Company
Description
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Investment
Amount
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Instrument
Type
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Add-On
Investment
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October 18,
2024
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Compost 360
Acquisition, LLC*
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Organic waste recycler
and producer of compost, mulch, and engineered soils
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$
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40,880
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Equity
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New
Investment
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October 31,
2024
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Norplex Micarta
Acquisition, Inc.
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Manufacturer of
thermoset composite laminates
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$
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5,972,094
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Senior Secured – First
Lien
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$
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1,822,665
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Revolver
Commitment
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$
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427,155
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Equity
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Add-On
Investment
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November 7,
2024
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Green Intermediateco
II, Inc.*
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Cyber-security focused
value-added reseller and associated service provider
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$
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3,607,117
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Senior Secured – First
Lien
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Add-On
Investment
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November 12,
2024
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Curion Holdings,
LLC*
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Provider of product
testing and consumer insights
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$
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276,993
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Revolver
Commitment
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Add-On
Investment
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November 12,
2024
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Cerebro Buyer,
LLC*
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Manufacturer of
single-use electrodes for medical procedures
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$
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510,498
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Delayed Draw Term Loan
Commitment
|
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Add-On
Investment
|
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November 12,
2024
|
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Service Minds Company,
LLC*
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Provider of residential
electrical services
|
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$
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290,964
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Revolver
Commitment
|
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New
Investment
|
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November 14,
2025
|
|
Spectra Confectionary
Ltd.
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Manufacturer and
wholesaler of confectionary products
|
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$
|
2,130,722
|
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Senior Secured – First
Lien
|
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|
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$
|
119,320
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Equity
|
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New
Investment
|
|
November 15,
2024
|
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MBH Management,
LLC
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Outsourced provider of
physician-focused staffing solutions for post-acute
facilities
|
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$
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3,883,303
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Senior Secured – First
Lien
|
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$
|
1,337,795
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Delayed Draw Term Loan
Commitment
|
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$
|
772,104
|
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Revolver
Commitment
|
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$
|
370,083
|
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Equity
|
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Add-On
Investment
|
|
November 20,
2024
|
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Microbe Formulas
LLC*
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Provider of dietary
supplements and other natural solutions for detox and gut
health
|
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$
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1,897,964
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Senior Secured – First
Lien
|
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Add-On
Investment
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November 26,
2024
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Equine Network,
LLC*
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Provider of content,
information, tech-enabled services, and hosts competitions for the
U.S. equine industry
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$
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517,582
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Senior Secured – First
Lien
|
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$
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141,279
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Revolver
Commitment
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Add-On
Investment
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December 2,
2024
|
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2X LLC*
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Provider of outsourced
digital business-to-business marketing-as-a-service
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$
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1,758,929
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Senior Secured – First
Lien
|
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$
|
2,828,649
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Delayed Draw Term Loan
Commitment
|
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New
Investment
|
|
December 4,
2024
|
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AMII Acquisition,
LLC
|
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Franchisor of ballroom
dance studios
|
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$
|
3,613,970
|
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Senior Secured – First
Lien
|
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$
|
556,928
|
|
Revolver
Commitment
|
|
|
|
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|
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$
|
63,758
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Equity
|
|
New
Investment
|
|
December 9,
2024
|
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United States Drug
Testing Laboratories, LLC
|
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Provider of drug and
alcohol forensic toxicology testing
|
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$
|
1,563,778
|
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Senior Secured – First
Lien
|
|
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|
|
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$
|
2,635,854
|
|
Delayed Draw Term Loan
Commitment
|
|
|
|
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|
|
|
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$
|
1,345,968
|
|
Revolver
Commitment
|
|
|
|
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|
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$
|
92,427
|
|
Equity
|
|
New
Investment
|
|
December 17,
2024
|
|
iNovex Information
Systems Inc.
|
|
Provider of government
IT services
|
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$
|
3,404,596
|
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Senior Secured – First
Lien
|
|
|
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$
|
1,369,930
|
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Revolver
Commitment
|
|
New
Investment
|
|
December 19,
2024
|
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Eskola, LLC
|
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Provider of commercial
re-roofing services
|
|
$
|
3,420,964
|
|
Senior Secured – First
Lien
|
|
|
|
|
|
|
|
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$
|
4,602,158
|
|
Revolver
Commitment
|
|
|
|
|
|
|
|
|
$
|
500,573
|
|
Equity
|
|
New
Investment
|
|
December 20,
2024
|
|
CEATI International,
Inc.*
|
|
Provider of
intellectual content, technical trade programs, research groups,
and conferences for utility companies
|
|
$
|
3,076,296
|
|
Senior Secured – First
Lien
|
|
|
|
|
CombinedCaterers,
Inc.
|
|
Provider of premium
catering services in the Southeast
|
|
$
|
1,439,876
|
|
Delayed Draw Term Loan
Commitment
|
|
|
|
|
|
|
|
|
$
|
1,119,158
|
|
Revolver
Commitment
|
|
|
|
|
|
|
|
|
$
|
285,351
|
|
Equity
|
|
New
Investment
|
|
December 30,
2024
|
|
Tiger 21,
LLC
|
|
Facilitator of
peer-to-peer wealth focused insights and events for ultra-high net
worth individuals
|
|
$
|
6,621,997
|
|
Senior Secured – First
Lien
|
|
|
|
|
|
|
|
|
$
|
1,513,228
|
|
Revolver
Commitment
|
|
|
|
|
|
|
|
|
$
|
376,429
|
|
Equity
|
|
* Existing portfolio
company
|
The Company realized investments in the following
portfolio company during the three months ended December 31, 2024:
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|
|
|
|
|
|
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
|
Events Subsequent to December 31,
2024
The Company's management has evaluated subsequent
events through March 6, 2025. There
have been no subsequent events that require recognition or
disclosure except for the following described below.
Investment Portfolio
The Company invested in the following portfolio
companies subsequent to December 31,
2024:
|
|
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|
|
|
|
|
|
|
|
|
|
Activity Type
|
|
Date
|
|
Company Name
|
|
Company Description
|
|
Investment Amount
|
|
Instrument Type
|
|
New
Investment
|
|
January 10,
2025
|
|
Pacific Shoring
Products, LLC
|
|
Manufacturer of trench
shoring and safety equipment sold to equipment rental
companies
|
|
$
|
5,327,581
|
|
Senior Secured – First
Lien
|
|
|
|
|
|
|
|
|
$
|
2,301,368
|
|
Revolver
Commitment
|
|
|
|
|
|
|
|
|
$
|
430,662
|
|
Equity
|
|
New
Investment
|
|
January 15,
2025
|
|
Environmental Remedies,
LLC
|
|
Residential asbestos
abatement provider
|
|
$
|
3,317,957
|
|
Senior Secured – First
Lien
|
|
|
|
|
|
|
|
|
$
|
2,330,762
|
|
Delayed Draw Term Loan
Commitment
|
|
|
|
|
|
|
|
|
$
|
1,383,237
|
|
Revolver
Commitment
|
|
|
|
|
|
|
|
|
$
|
113,419
|
|
Equity
|
|
New
Investment
|
|
January 16,
2025
|
|
Plus Delta Partners,
Inc.
|
|
Provider of fundraising
training and tools for higher education institutions and other
nonprofits
|
|
$
|
3,955,716
|
|
Senior Secured – First
Lien
|
|
|
|
|
|
|
|
|
$
|
3,279,635
|
|
Delayed Draw Term Loan
Commitment
|
|
|
|
|
|
|
|
|
$
|
2,561,362
|
|
Revolver
Commitment
|
|
|
|
|
|
|
|
|
$
|
208,481
|
|
Equity
|
|
New
Investment
|
|
January 24,
2025
|
|
Strategus,
LLC
|
|
Provider of connected
TV advertising services
|
|
$
|
6,013,663
|
|
Senior Secured – First
Lien
|
|
|
|
|
|
|
|
|
$
|
2,325,095
|
|
Delayed Draw Term Loan
Commitment
|
|
|
|
|
|
|
|
|
$
|
1,513,228
|
|
Revolver
Commitment
|
|
|
|
|
|
|
|
|
$
|
160,392
|
|
Equity
|
|
New
Investment
|
|
February 28,
2025
|
|
Identity Theft Guard
Solutions, Inc.
|
|
Cyber breach response
and monitoring services
|
|
$
|
7,127,072
|
|
Senior Secured – First
Lien
|
|
|
|
|
|
|
|
|
$
|
1,092,978
|
|
Revolver
Commitment
|
|
|
|
|
|
|
|
|
$
|
330,747
|
|
Equity
|
|
New
Investment
|
|
February 28,
2025
|
|
MoboTrex,
LLC
|
|
Distributor and
manufacturer of intelligent traffic solution equipment
|
|
$
|
2,092,568
|
|
Senior Secured – First
Lien
|
|
|
|
|
|
|
|
|
$
|
2,000,813
|
|
Delayed Draw Term Loan
Commitment
|
|
|
|
|
|
|
|
|
$
|
625,882
|
|
Revolver
Commitment
|
Credit Facilities
The outstanding balance under the Credit Facility
and SPV Facility as of March 6, 2025
was $120.0 million and $50.0 million, respectively.
Distributions Declared
On January 9, 2025,
our Board of Directors declared a regular monthly distribution for
each of January, February and March
2025, as follows:
|
|
|
|
|
|
|
|
|
|
Record
|
|
Payment
|
|
Amount
per
|
|
Declared
|
|
Date
|
|
Date
|
|
Share
|
|
1/9/2025
|
|
1/10/2025
|
|
1/31/2025
|
|
$
|
0.1200
|
|
1/9/2025
|
|
2/3/2025
|
|
2/28/2025
|
|
$
|
0.1200
|
|
1/9/2025
|
|
3/3/2025
|
|
3/31/2025
|
|
$
|
0.1200
|
Sale of Unregistered Securities
Since December 31, 2024, the
Company sold 97,535 common shares of beneficial interest at a price
of $15.16 per share for aggregate
proceeds of $1.5 million which
included less than $0.1 million of
organizational expense allocation pursuant to subscription
agreements entered into between the Company and investors.
About Stellus Private Credit BDC
The Company is an externally-managed, closed-end,
non-diversified investment management company that has elected to
be regulated as a business development company under the Investment
Company Act of 1940, as amended. The Company's investment objective
is to maximize the total return to its stockholders in the form of
current income and capital appreciation by investing primarily in
private 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
(including unitranche) loans and second lien loans, with
corresponding equity co-investments. The Company's investment
activities are managed by its investment adviser, Stellus Private
BDC Advisor, LLC.
Forward-Looking Statements
Statements included herein may contain "forward-looking
statements" which relate to future performance or financial
condition. Statements other than statements of historical facts
included in this press release may constitute forward-looking
statements and are not guarantees of future performance or results
and involve a number of assumptions, risks and uncertainties, which
change over time. Actual results may differ materially from those
anticipated in any forward-looking statements as a result of a
number of factors, including those described from time to time in
filings by the Company with the Securities and Exchange Commission
including the final prospectus that will be filed with the
Securities and Exchange Commission. The Company undertakes no duty
to update any forward-looking statement made herein. All
forward-looking statements speak only as of the date of this press
release.
Contacts
Stellus Private Credit BDC
W. Todd Huskinson, Chief Financial
Officer
(713) 292-5414
thuskinson@stelluscapital.com
|
STELLUS PRIVATE CREDIT BDC
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF ASSETS AND
LIABILITIES
|
|
|
December 31, 2024
|
|
December 31, 2023
|
|
ASSETS
|
|
|
|
|
|
|
|
Non-controlled,
non-affiliated investments, at fair value (amortized cost of
$297,791,269 and $206,513,758, respectively)
|
|
$
|
300,732,065
|
|
$
|
208,574,078
|
|
Cash and cash
equivalents
|
|
|
2,144,116
|
|
|
593,685
|
|
Other
receivable
|
|
|
4,340
|
|
|
—
|
|
Interest
receivable
|
|
|
1,367,849
|
|
|
1,495,581
|
|
Expense reimbursement
receivable from the Advisor (Note 2)
|
|
|
161,473
|
|
|
126,539
|
|
Deferred offering
costs
|
|
|
127,983
|
|
|
72,875
|
|
Related party
receivable
|
|
|
2,004
|
|
|
162,455
|
|
Prepaid
expenses
|
|
|
164,350
|
|
|
127,019
|
|
Receivable for sales
and repayments of investments
|
|
|
86,896
|
|
|
71,105
|
|
Total
Assets
|
|
$
|
304,791,076
|
|
$
|
211,223,337
|
|
LIABILITIES
|
|
|
|
|
|
|
|
Credit Facilities
payable
|
|
$
|
138,692,860
|
|
$
|
97,031,517
|
|
Dividends
payable
|
|
|
—
|
|
|
3,551,068
|
|
Unearned
revenue
|
|
|
921,629
|
|
|
897,538
|
|
Management fees
payable
|
|
|
648,149
|
|
|
—
|
|
Income incentive fee
payable
|
|
|
452,186
|
|
|
439,854
|
|
Capital gains incentive
fee payable
|
|
|
306,229
|
|
|
261,684
|
|
Interest
payable
|
|
|
613,821
|
|
|
367,093
|
|
Administrative services
payable
|
|
|
109,027
|
|
|
124,958
|
|
Income tax
payable
|
|
|
51,427
|
|
|
182,489
|
|
Deferred tax
liability
|
|
|
259,455
|
|
|
167,865
|
|
Other accrued expenses
and liabilities
|
|
|
348,413
|
|
|
177,249
|
|
Total
Liabilities
|
|
$
|
142,403,196
|
|
$
|
103,201,315
|
|
Commitments and
contingencies (Note 7)
|
|
|
|
|
|
|
|
Net
Assets
|
|
$
|
162,387,880
|
|
$
|
108,022,022
|
|
NET
ASSETS
|
|
|
|
|
|
|
|
Common shares of
beneficial interest, par value $0.01 per share (unlimited shares
authorized; 10,715,095 and 7,102,136 issued and outstanding,
respectively)
|
|
$
|
107,151
|
|
$
|
71,021
|
|
Paid-in
capital
|
|
|
159,483,435
|
|
|
104,810,048
|
|
Total distributable
earnings
|
|
|
2,797,294
|
|
|
3,140,953
|
|
Net
Assets
|
|
$
|
162,387,880
|
|
$
|
108,022,022
|
|
Total Liabilities
and Net Assets
|
|
$
|
304,791,076
|
|
$
|
211,223,337
|
|
Net Asset Value Per
Share
|
|
$
|
15.16
|
|
$
|
15.21
|
|
STELLUS PRIVATE CREDIT BDC
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
December 31, 2024
|
|
December 31, 2023
|
|
December 31, 2022
|
|
INVESTMENT
INCOME
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
$
|
28,560,141
|
|
$
|
22,760,669
|
|
$
|
7,804,783
|
|
Other income
|
|
|
478,544
|
|
|
601,776
|
|
|
152,173
|
|
Total Investment
Income
|
|
$
|
29,038,685
|
|
$
|
23,362,445
|
|
$
|
7,956,956
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
Management
fees
|
|
$
|
3,469,835
|
|
$
|
2,833,601
|
|
$
|
1,335,054
|
|
Income incentive
fees
|
|
|
2,602,793
|
|
|
2,097,153
|
|
|
686,398
|
|
Capital gains incentive
fee
|
|
|
44,545
|
|
|
261,684
|
|
|
—
|
|
Professional
fees
|
|
|
747,853
|
|
|
670,800
|
|
|
447,045
|
|
Organization
costs
|
|
|
—
|
|
|
1,000
|
|
|
90,184
|
|
Amortization of
deferred offering costs
|
|
|
225,050
|
|
|
165,937
|
|
|
240,152
|
|
Administrative services
expenses
|
|
|
523,823
|
|
|
417,573
|
|
|
226,489
|
|
Trustees'
fees
|
|
|
160,000
|
|
|
160,000
|
|
|
158,000
|
|
Insurance
expense
|
|
|
81,685
|
|
|
81,438
|
|
|
82,045
|
|
Valuation
fees
|
|
|
64,498
|
|
|
40,324
|
|
|
5,519
|
|
Interest expense and
other fees
|
|
|
9,505,536
|
|
|
8,225,528
|
|
|
2,312,701
|
|
Income tax
expense
|
|
|
32,183
|
|
|
44,925
|
|
|
7,471
|
|
Other general and
administrative expenses
|
|
|
262,575
|
|
|
142,294
|
|
|
120,343
|
|
Total Operating
Expenses
|
|
$
|
17,720,376
|
|
$
|
15,142,257
|
|
$
|
5,711,401
|
|
Expenses
reimbursed/fees waived by Investment Advisor (Note
2)
|
|
$
|
(4,253,904)
|
|
$
|
(4,101,044)
|
|
$
|
(1,952,196)
|
|
Net Operating
Expenses
|
|
$
|
13,466,472
|
|
$
|
11,041,213
|
|
$
|
3,759,205
|
|
Net Investment
Income
|
|
$
|
15,572,213
|
|
$
|
12,321,232
|
|
$
|
4,197,751
|
|
Net realized gain
(loss) on non-controlled, non-affiliated investments
|
|
$
|
—
|
|
$
|
841,075
|
|
$
|
—
|
|
Net realized gain on
foreign currency translation
|
|
|
30,648
|
|
|
24,343
|
|
|
1,950
|
|
Provision for taxes on
realized gain on investments
|
|
|
—
|
|
|
(142,988)
|
|
|
—
|
|
Net change in
unrealized appreciation (depreciation) on non-controlled,
non-affiliated investments
|
|
|
906,234
|
|
|
2,566,523
|
|
|
(538,883)
|
|
Net change in
unrealized (depreciation) appreciation on foreign currency
translations
|
|
|
(25,757)
|
|
|
11,719
|
|
|
20,961
|
|
Provision for taxes on
net unrealized gain on investments
|
|
|
(91,591)
|
|
|
(167,865)
|
|
|
—
|
|
Net Increase in Net
Assets Resulting from Operations
|
|
$
|
16,391,747
|
|
$
|
15,454,039
|
|
$
|
3,681,779
|
|
Net Investment
Income Per Share – basic and diluted
|
|
$
|
1.80
|
|
$
|
1.96
|
|
$
|
1.08
|
|
Net Increase in Net
Assets Resulting from Operations Per Share – basic and
diluted
|
|
$
|
1.90
|
|
$
|
2.46
|
|
$
|
0.95
|
|
Weighted Average
Common Shares of Beneficial Interest Outstanding – basic and
diluted
|
|
|
8,643,493
|
|
|
6,273,882
|
|
|
3,869,643
|
|
Distributions Per
Share – basic and diluted
|
|
$
|
1.96
|
|
$
|
1.88
|
|
$
|
1.11
|
|
STELLUS PRIVATE CREDIT BDC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CHANGES IN NET
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares of
|
|
|
|
|
|
|
|
|
|
|
|
Beneficial Interest
|
|
|
|
|
Total
|
|
|
|
|
Number of
|
|
Par
|
|
Paid-in
|
|
distributable
|
|
|
|
|
shares
|
|
value
|
|
capital
|
|
(loss)
gain
|
|
Net Assets
|
|
Balances at
December 31, 2021
|
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(532,845)
|
|
$
|
(532,845)
|
|
Net investment
income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,197,751
|
|
|
4,197,751
|
|
Net realized gain on
foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,950
|
|
|
1,950
|
|
Net change in
unrealized depreciation on non-controlled, non-affiliated
investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(538,883)
|
|
|
(538,883)
|
|
Net change in
unrealized appreciation on foreign currency translations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,961
|
|
|
20,961
|
|
Return of capital and
other tax related adjustments
|
|
—
|
|
|
—
|
|
|
(388,214)
|
|
|
388,214
|
|
|
—
|
|
Distributions from net
investment income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,279,870)
|
|
|
(4,279,870)
|
|
Issuance of common
shares of beneficial interest
|
|
5,483,433
|
|
|
54,834
|
|
|
81,339,059
|
|
|
—
|
|
|
81,393,893
|
|
Balances at
December 31, 2022
|
|
5,483,433
|
|
$
|
54,834
|
|
$
|
80,950,845
|
|
$
|
(742,722)
|
|
$
|
80,262,957
|
|
Net investment
income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,321,232
|
|
|
12,321,232
|
|
Net realized gain on
non-controlled, non-affiliated investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
841,075
|
|
|
841,075
|
|
Net realized gain on
foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,343
|
|
|
24,343
|
|
Provision for taxes on
realized gain on investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(142,988)
|
|
|
(142,988)
|
|
Net change in
unrealized appreciation on non-controlled, non-affiliated
investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,566,523
|
|
|
2,566,523
|
|
Net change in
unrealized appreciation on foreign currency translations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,719
|
|
|
11,719
|
|
Provision for taxes on
net unrealized gain on investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(167,865)
|
|
|
(167,865)
|
|
Return of capital and
other tax related adjustments
|
|
—
|
|
|
—
|
|
|
(197,724)
|
|
|
197,724
|
|
|
—
|
|
Distributions from net
investment income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,768,088)
|
|
|
(11,768,088)
|
|
Issuance of common
shares of beneficial interest
|
|
1,618,703
|
|
|
16,187
|
|
|
24,056,927
|
|
|
—
|
|
|
24,073,114
|
|
Balances at
December 31, 2023
|
|
7,102,136
|
|
$
|
71,021
|
|
$
|
104,810,048
|
|
$
|
3,140,953
|
|
$
|
108,022,022
|
|
Net investment
income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,572,213
|
|
|
15,572,213
|
|
Net realized gain on
foreign currency translation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,648
|
|
|
30,648
|
|
Net change in
unrealized appreciation on non-controlled, non-affiliated
investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
906,234
|
|
|
906,234
|
|
Net change in
unrealized depreciation on foreign currency translations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,757)
|
|
|
(25,757)
|
|
Provision for taxes on
net unrealized gain on investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(91,591)
|
|
|
(91,591)
|
|
Return of capital and
other tax related adjustments
|
|
—
|
|
|
—
|
|
|
(221,350)
|
|
|
221,350
|
|
|
—
|
|
Distributions from net
investment income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,701,939)
|
|
|
(16,701,939)
|
|
Distributions from net
realized capital gains
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(254,817)
|
|
|
(254,817)
|
|
Issuance of common
shares of beneficial interest
|
|
4,119,031
|
|
|
41,191
|
|
|
62,556,970
|
|
|
—
|
|
|
62,598,161
|
|
Redemption of common
shares of beneficial interest
|
|
(506,072)
|
|
|
(5,061)
|
|
|
(7,662,233)
|
|
|
—
|
|
|
(7,667,294)
|
|
Balances at
December 31, 2024
|
|
10,715,095
|
|
$
|
107,151
|
|
$
|
159,483,435
|
|
$
|
2,797,294
|
|
$
|
162,387,880
|
|
STELLUS PRIVATE CREDIT BDC
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
For the years
ended
|
|
|
December 31, 2024
|
|
December 31, 2023
|
|
December 31, 2022
|
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
Net increase in net
assets resulting from operations
|
|
$
|
16,391,747
|
|
$
|
15,454,039
|
|
$
|
3,681,779
|
|
Adjustments to
reconcile net increase in net assets from operations to net cash
used in operating activities:
|
|
|
|
|
|
|
|
|
|
|
Purchases of
investments
|
|
|
(119,805,183)
|
|
|
(89,322,601)
|
|
|
(168,326,016)
|
|
Proceeds from sales
and repayments of investments
|
|
|
30,250,267
|
|
|
42,260,585
|
|
|
10,474,408
|
|
Net change in
unrealized (appreciation) depreciation on investments
|
|
|
(906,234)
|
|
|
(2,566,523)
|
|
|
538,883
|
|
Net change in
unrealized depreciation (appreciation) foreign currency
translations
|
|
|
25,757
|
|
|
(11,719)
|
|
|
(20,961)
|
|
Increase in
investments due to PIK
|
|
|
(1,059,816)
|
|
|
(129,990)
|
|
|
—
|
|
Amortization of
premium and accretion of discount, net
|
|
|
(678,569)
|
|
|
(502,109)
|
|
|
(198,065)
|
|
Deferred tax
provision
|
|
|
91,590
|
|
|
167,865
|
|
|
—
|
|
Amortization of loan
structure fees
|
|
|
306,387
|
|
|
586,127
|
|
|
478,626
|
|
Amortization of
deferred offering costs
|
|
|
225,050
|
|
|
165,937
|
|
|
240,152
|
|
Net realized gain on
investments
|
|
|
—
|
|
|
(841,075)
|
|
|
—
|
|
Changes in other assets
and liabilities
|
|
|
|
|
|
|
|
|
|
|
Decrease (increase) in
interest receivable
|
|
|
127,732
|
|
|
(465,307)
|
|
|
(1,030,274)
|
|
Increase in other
receivable
|
|
|
(4,340)
|
|
|
—
|
|
|
—
|
|
Decrease (increase) in
related party receivable
|
|
|
160,451
|
|
|
(152,835)
|
|
|
(9,620)
|
|
(Increase) decrease in
expense reimbursements receivable from the Advisor
|
|
|
(34,934)
|
|
|
39,099
|
|
|
(165,638)
|
|
(Increase) decrease in
prepaid expenses
|
|
|
(37,331)
|
|
|
5,985
|
|
|
(39,356)
|
|
Decrease in due to
affiliate
|
|
|
—
|
|
|
—
|
|
|
(460,085)
|
|
Decrease in trustees'
fees payable
|
|
|
—
|
|
|
—
|
|
|
(42,000)
|
|
(Decrease) increase in
administrative services payable
|
|
|
(15,931)
|
|
|
58,894
|
|
|
66,064
|
|
Increase (decrease) in
interest payable
|
|
|
246,728
|
|
|
(196,148)
|
|
|
563,241
|
|
Increase in income
management fees payable
|
|
|
648,149
|
|
|
—
|
|
|
—
|
|
Increase in income
incentive fees payable
|
|
|
12,332
|
|
|
111,658
|
|
|
328,196
|
|
Increase in capital
gains incentive fees payable
|
|
|
44,545
|
|
|
261,684
|
|
|
—
|
|
Increase in unearned
revenue
|
|
|
24,091
|
|
|
357,904
|
|
|
539,634
|
|
(Decrease) increase in
income tax payable
|
|
|
(131,062)
|
|
|
175,018
|
|
|
7,471
|
|
Increase (decrease) in
other accrued expenses and liabilities
|
|
|
171,164
|
|
|
57,975
|
|
|
(144,704)
|
|
Net Cash Used in
Operating Activities
|
|
$
|
(73,947,410)
|
|
$
|
(34,485,537)
|
|
$
|
(153,518,265)
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of common shares of beneficial interest
|
|
$
|
62,598,161
|
|
$
|
24,073,114
|
|
$
|
81,393,893
|
|
Offering costs paid
for common shares of beneficial interest issued
|
|
|
(280,158)
|
|
|
(184,418)
|
|
|
(154,976)
|
|
Purchase of common
shares of beneficial interest in tender offer
|
|
|
(7,667,294)
|
|
|
—
|
|
|
—
|
|
Stockholder
distributions paid
|
|
|
(20,507,824)
|
|
|
(10,026,553)
|
|
|
(2,470,337)
|
|
Borrowings under
Credit Facilities
|
|
|
184,300,000
|
|
|
169,750,000
|
|
|
124,762,500
|
|
Repayments of Credit
Facilities
|
|
|
(141,850,000)
|
|
|
(152,365,000)
|
|
|
(44,147,500)
|
|
Financing costs paid
on Credit Facilities
|
|
|
(1,095,044)
|
|
|
(387,744)
|
|
|
(1,645,492)
|
|
Short-term loan
borrowings
|
|
|
—
|
|
|
4,500,000
|
|
|
11,250,000
|
|
Short-term loan
repayments
|
|
|
—
|
|
|
(15,750,000)
|
|
|
—
|
|
Net Cash Provided by
Financing Activities
|
|
$
|
75,497,841
|
|
$
|
19,609,399
|
|
$
|
168,988,088
|
|
Net Increase
(Decrease) in Cash and Cash Equivalents
|
|
$
|
1,550,431
|
|
$
|
(14,876,138)
|
|
$
|
15,469,823
|
|
Cash and Cash
Equivalents Balance at Beginning of Period
|
|
|
593,685
|
|
|
15,469,823
|
|
|
—
|
|
Cash and Cash
Equivalents Balance at End of Period
|
|
$
|
2,144,116
|
|
$
|
593,685
|
|
$
|
15,469,823
|
|
Supplemental and
Non-Cash Activities
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
expense
|
|
$
|
8,952,421
|
|
$
|
7,835,549
|
|
$
|
1,270,834
|
|
Income and excise tax
paid
|
|
|
163,245
|
|
|
12,895
|
|
|
—
|
|
Value of common shares
of beneficial interest issued pursuant to Dividend Reinvestment
Plan
|
|
|
1,683,161
|
|
|
623,113
|
|
|
43,894
|
|
(Decrease) increase in
dividends payable
|
|
|
(3,551,068)
|
|
|
1,741,535
|
|
|
1,809,533
|
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SOURCE Stellus Private Credit BDC
