10-Q 1 tm2111794d1_10q.htm FORM 10-Q

 

 

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, 2021  

OR

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

 

COMMISSION FILE NUMBER: 1-35730

 

 

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 and post 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 definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): 

       
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, $0.001 par value per share, outstanding as of May 6, 2021 was 19,486,003.

 

 

 

 

STELLUS CAPITAL INVESTMENT CORPORATION 

 

 TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION  
Item 1. Financial Statements 1
  Consolidated Statements of Assets and Liabilities as of March 31, 2021 (unaudited) and December 31, 2020 2
  Consolidated Statements of Operations for the three-month periods ended  March 31, 2021 and March 31, 2020 (unaudited) 3
  Consolidated Statements of Changes in Net Assets for the three-month periods ended March 31, 2021 and March 31, 2020 (unaudited) 4
  Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2021 and March 31, 2020 (unaudited) 5
  Consolidated Schedules of Investments as of March 31, 2021 (unaudited) and December 31, 2020 7
  Notes to Unaudited Financial Statements 24
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 57
Item 3. Quantitative and Qualitative Disclosures About Market Risk 76
Item 4. Controls and Procedures 76
PART II. OTHER INFORMATION  
Item 1. Legal Proceedings 78
Item 1A.   Risk Factors 78
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 78
Item 3. Defaults Upon Senior Securities 78
Item 4. Mine Safety Disclosures 78
Item 5.    Other Information 78
Item 6.    Exhibits 78

 i

 

PART I — FINANCIAL INFORMATION

               

STELLUS CAPITAL INVESTMENT CORPORATION

               

 CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

 

   March 31,   
   2021  December 31,
     (Unaudited)      2020  
ASSETS   
Non-controlled, non-affiliated investments, at fair value (amortized cost of $719,546,960 and $658,628,966, respectively)  $714,464,472   $653,424,495 
Cash and cash equivalents   30,449,635    18,477,602 
Receivable for sales and repayments of investments   210,442    215,929 
Interest receivable   2,152,217    2,189,448 
Other receivables   25,495    25,495 
Deferred offering costs   —    90,000 
Prepaid expenses   456,315    487,188 
Total Assets  $747,758,576   $674,910,157 
LIABILITIES          
Notes payable  $97,765,674   $48,307,518 
Credit facility payable   163,342,988    171,728,405 
SBA-guaranteed debentures   205,285,585    173,167,496 
Dividends payable   1,623,187    — 
Management fees payable   1,963,861    2,825,322 
Income incentive fees payable   122,499    681,660 
Capital gains incentive fees payable   604,302    521,021 
Interest payable   1,825,427    2,144,085 
Unearned revenue   475,222    523,424 
Administrative services payable   389,005    391,491 
Deferred tax liability   527,394    359,590 
Income tax payable   92,726    724,765 
Other accrued expenses and liabilities   311,821    174,731 
Total Liabilities  $474,329,691   $401,549,508 
Commitments and contingencies (Note 7)          
Net Assets  $273,428,885   $273,360,649 
NET ASSETS          
Common stock, par value $0.001 per share (100,000,000 shares authorized; 19,486,003 issued and outstanding for both periods)  $19,486   $19,486 
Paid-in capital   276,026,667    276,026,667 
Accumulated undistributed deficit   (2,617,268)   (2,685,504)
Net Assets  $273,428,885   $273,360,649 
Total Liabilities and Net Assets  $747,758,576   $674,910,157 
Net Asset Value Per Share  $14.03   $14.03 

 2

 

STELLUS CAPITAL INVESTMENT CORPORATION

                 

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

 

   For the
three
months ended
March 31,
2021		   For the
three
months ended
March 31,
2020		 
INVESTMENT INCOME          
Interest income  $13,512,777   $14,849,588 
Other income   475,087    411,457 
Total Investment Income  $13,987,864   $15,261,045 
OPERATING EXPENSES          
Management fees  $2,963,861   $2,719,054 
Valuation fees   128,353    109,833 
Administrative services expenses   453,389    466,935 
Income incentive fees   —    1,339,637 
Capital gains incentive fees (reversal)    83,281    (880,913)
Professional fees   268,965    386,714 
Directors’ fees   91,500    132,250 
Insurance expense   117,507    93,071 
Interest expense and other fees   4,323,478    4,292,204 
Income tax expense   239,981    196,795 
Other general and administrative expenses   256,918    166,003 
Total Operating Expenses  $8,927,233   $9,021,583 
Net Investment Income  $5,060,631   $6,239,462 
Net realized gain on non-controlled, non-affiliated investments  $462,228   $1,296,793 
Loss on debt extinguishment  $(539,250)  $— 
Net change in unrealized appreciation (depreciation) on non-controlled, non-affiliated investments  $121,983   $(51,504,946)
(Provision) benefit for taxes on net unrealized gain on investments  $(167,804)  $28,959 
Net Increase (Decrease) in Net Assets Resulting from Operations  $4,937,788   $(43,939,732)
Net Investment Income Per Share  $0.26   $0.32 
Net Increase (Decrease) in Net Assets Resulting from Operations Per Share  $0.25   $(2.26)
Weighted Average Shares of Common Stock Outstanding   19,486,003    19,429,480 
Distributions Per Share  $0.25   $0.34 

 3

 

 

STELLUS CAPITAL INVESTMENT CORPORATION

               

 CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (unaudited)           

 

   For the   For the 
   three   three 
   months ended   months ended 
   March 31,   March 31, 
   2021   2020 
Increase (Decrease) in Net Assets Resulting from Operations          
Net investment income  $5,060,631   $6,239,462 
Net realized gain on non-controlled, non-affiliated investments   462,228    1,296,793 
Loss on debt extinguishment   (539,250)   — 
Net change in unrealized appreciation (depreciation) on non-controlled, non-affiliated investments   121,983    (51,504,946)
(Provision) benefit for taxes on unrealized appreciation on investments   (167,804)   28,959 
Net Increase (Decrease) in Net Assets Resulting from Operations  $4,937,788   $(43,939,732)
Stockholder Distributions From:          
Net investment income  $(4,869,552)  $(6,619,297)
Total Distributions  $(4,869,552)  $(6,619,297)
Capital Share Transactions          
Issuance of common stock  $—   $4,930,467 
Sales load   —    (5,681)
Offering costs   —    (18,169)
Partial share transactions   —    (96)
Net Increase in Net Assets Resulting From Capital Share Transactions  $—   $4,906,521 
Total Increase (Decrease) in Net Assets  $68,236   $(45,652,508)
Net Assets at Beginning of Period  $273,360,649   $270,571,173 
Net Assets at End of Period  $273,428,885   $224,918,665 

 4

 

STELLUS CAPITAL INVESTMENT CORPORATION

 

 CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

 

   For the   For the 
   three   three 
   months ended   months ended 
   March 31,   March 31, 
   2021   2020 
Cash flows from operating activities          
Net increase (decrease) in net assets resulting from operations  $4,937,788   $(43,939,732)
Adjustments to reconcile net increase (decrease) in net assets from operations to net cash used in operating activities:          
Purchases of investments   (93,290,837)   (61,533,313)
Proceeds from sales and repayments of investments   33,473,269    31,763,595 
Net change in unrealized (appreciation) depreciation on investments   (121,983)   51,504,946 
Increase in investments due to PIK   (118,329)   (537,284)
Amortization of premium and accretion of discount, net   (521,051)   (538,019)
Deferred tax provision (benefit)   167,804    (28,959)
Amortization of loan structure fees   114,583    149,978 
Amortization of deferred financing costs   122,460    82,874 
Amortization of loan fees on SBA-guaranteed debentures   233,814    171,275 
Net realized gain on investments   (455,560)   (1,296,793)
Loss on debt extinguishment   539,250    — 
Changes in other assets and liabilities          
(Decrease) increase in interest receivable   37,231    (1,058,214)
Decrease in prepaid expenses   30,873    43,923 
(Decrease) increase in management fees payable   (861,461)   23,274 
Decrease in incentive fees payable   (559,161)   (126,396)
Increase (decrease) in capital gains incentive fees payable   83,281    (880,913)
(Decrease) increase in administrative services payable   (2,486)   18,949 
Decrease in interest payable   (318,658)   (1,405,298)
(Decrease) increase in unearned revenue   (48,202)   154,391 
Decrease in income tax payable   (632,039)   (747,600)
Increase in other accrued expenses and liabilities   137,090    295,218 
Net Cash Used in Operating Activities  $(57,052,324)  $(27,884,098)
Cash flows from Financing Activities          
Proceeds from the issuance of common stock  $—   $4,794,995 
Sales load for commons stock issued   —    (5,681)
Offering costs paid for common stock issued   —    (18,169)
Stockholder distributions paid   (3,246,365)   (6,445,020)
Repayment of Notes Payable   (48,875,000)   — 
Proceeds from issuance of Notes   100,000,000    — 
Financing costs from bond issuance   (2,238,553)   — 
Proceeds from SBA Debentures   33,500,000    — 
Financing costs paid on SBA Debentures   (1,615,725)   — 
Borrowings under Credit Facility   113,300,000    74,450,000 
Repayments of Credit Facility   (121,800,000)   (26,000,000)
Partial Share Redemption   —    (96)
Net Cash Provided by Financing Activities  $69,024,357   $46,776,029 
Net Increase in Cash and Cash Equivalents  $11,972,033   $18,891,931 
Cash and cash equivalents balance at beginning of period   18,477,602    16,133,315 
Cash and Cash Equivalents Balance at End of Period  $30,449,635   $35,025,246 
Supplemental and Non-Cash Activities          
Cash paid for interest expense  $4,166,438   $5,291,684 
Excise tax paid   870,000    940,000 
Shares issued pursuant to Dividend Reinvestment Plan   —    135,472 
Increase in distribution payable   1,623,187    38,805 
Decrease in deferred offering costs for Notes Payable offering   (90,000)   — 
Gain on conversion of equity investment   6,668    — 

 5

 

Stellus Capital Investment Corporation

 

Consolidated Schedule of Investments

 

March 31, 2021

 

 (unaudited)

 

Investments   Footnotes   Security   Coupon   LIBOR floor     Cash   PIK   Investment Date   Maturity  

Headquarters/  

Industry  

   Principal
Amount/ Shares		   Amortized Cost  

Fair   

Value (1)   

 

 % of Net Assets  
Non-controlled, non-affiliated investments   (2)(9)                                                            
Adams Publishing Group, LLC                                       Greenville, TN                        
Term Loan   (35)   First Lien   1M L+7.00%   1.75 %   8.75 %       8/3/2018   6/30/2023   Media: Advertising, Printing & Publishing   $ 4,802,580     4,778,041     4,802,580   1.76 %
Delayed Draw Term Loan   (35)   First Lien   1M L+7.00%   1.75 %   8.75 %       8/3/2018   6/30/2023       $ 157,202     157,202     157,202   0.06 %
Total                                                 $ 4,935,243   $ 4,959,782   1.82 %
Advanced Barrier Extrusions, LLC                                       Rhinelander, WI                        
Term Loan (SBIC)   (2)(35)   First Lien   1M L+6.50%   1.00 %   7.50 %       11/30/2020   11/30/2026   Containers, Packaging & Glass   $ 17,456,250     17,121,650     17,107,123   6.26 %
GP ABX Holdings Partnership, L.P. Common Stock   (4)   Equity                       8/8/2018             644,737 units     700,000     820,000   0.30 %
Total                                                 $ 17,821,650   $ 17,927,123   6.56 %
Anne Lewis Strategies, LLC   (20)                                   Washington, D.C                        
Term Loan (SBIC II)   (9)(35)   First Lien   3M L+6.75%   1.00 %   7.75 %       3/5/2021   3/5/2026   Services: Business   $ 11,500,000     11,273,049     11,273,049   4.12 %
SG AL Investment, LLC Common Units   (4)   Equity                       3/5/2021             1,000 units     1,000,000     1,000,000   0.37 %
Total                                                 $ 12,273,049   $ 12,273,049   4.49 %
APE Holdings, LLC                                       Deer Park, TX                        
Class A Common Units   (4)   Equity                       9/5/2014       Chemicals, Plastics, & Rubber     375,000 units     375,000     70,000   0.03 %
Atmosphere Aggregator Holdings II, LP                                       Atlanta, GA                        
Common Units   (4)   Equity                       1/26/2016       Services: Business     254,250 units     0     1,440,000   0.53 %
Stratose Aggregator Holdings, LP Common Units   (4)   Equity                       6/30/2015             750,000 units     0     4,240,000   1.55 %
Total                                                 $ 0   $ 5,680,000   2.08 %
ASC Communications, LLC   (17)                                   Chicago, IL                        
Term Loan (SBIC)   (2)(35)   First Lien   1M L+5.00%   1.00 %   6.00 %       6/29/2017   6/29/2023   Healthcare & Pharmaceuticals   $ 3,950,617     3,938,765     3,812,346   1.39 %
Term Loan   (35)   First Lien   1M L+5.00%   1.00 %   6.00 %       2/4/2019   6/29/2023       $ 6,716,049     6,669,813     6,480,988   2.37 %
ASC Communications Holdings, LLC Class A Preferred Units (SBIC)   (2)(4)   Equity                       6/29/2017             73,529 shares     48,148     370,000   0.14 %
Total                                                 $ 10,656,726   $ 10,663,334   3.90 %
BW DME Acquisition, LLC                                       Tempe, AZ                        
Term Loan (SBIC)   (2)(13)(22)   First Lien   3M L+6.00%   1.00 %   8.57 %       8/24/2017   8/24/2022   Healthcare & Pharmaceuticals   $ 16,695,804     16,524,685     16,695,804   6.11 %
BW DME Holdings, LLC, Term Loan   (6)   Unsecured   17.50%               17.50 % 6/1/2018   6/30/2020       $ 407,938     407,938     407,938   0.15 %
BW DME Holdings, LLC Class A-1 Preferred Units   (4)   Equity                       8/24/2017             1,000,000 shares     1,000,000     1,690,000   0.62 %
BW DME Holdings, LLC Class A-2 Preferred Units   (4)   Equity                       1/26/2018             937,261 shares     937,261     1,590,000   0.58 %
Total                                                 $ 18,869,884   $ 20,383,742   7.46 %

 6

 

Stellus Capital Investment Corporation

 

Consolidated Schedule of Investments

 

March 31, 2021

 

 (unaudited)

 

Café Valley, Inc.                              Phoenix, AZ                       
Term Loan  (35)  First Lien  1M L+7.00%  1.25%  8.25%      8/28/2019  8/28/2024  Beverage, Food, & Tobacco  $ 16,033,333     15,800,550    15,632,500   5.72 %
CF Topco LLC, Common Units  (4)  Equity                 8/28/2019          9,160 shares     916,015    780,000   0.29 %
Total                                       $16,716,565   $16,412,500   6.01 %
CEATI International, Inc.   (39)                          Montreal, Quebec                       
Term Loan  (5)(35)  First Lien  3M L+6.50%  1.00%  7.50%      2/19/2021  2/19/2026  Services: Business  $ 13,500,000     13,233,673    13,233,676   4.84 %
CEATI Holdings, LP, Class A Units  (4)(5)  Equity                 2/19/2021          250,000 shares     250,000    250,000   0.09 %
Total                                       $13,483,673   $13,483,676   4.93 %
Colford Capital Holdings, LLC                              New York, NY                       
 Preferred Units  (4)(5)  Equity                 8/20/2015     Finance    38,893 units     195,036    20,000   0.01 %
CommentSold, LLC   (8)                          Huntsville, AL                       
Term Loan (SBIC)  (2)(35)  First Lien  1M+6.00%  1.00%  7.00%      11/20/2020  11/20/2026  High Tech Industries  $ 12,468,750     12,230,520    12,281,719   4.49 %
CompleteCase, LLC                              Seatlle, WA                       
Term Loan (SBIC II)  (9)(35)  First Lien  3M L+6.50%  1.00%  7.50%      12/21/2020  12/21/2025  Services: Consumer  $ 11,449,565     11,229,989    11,163,326   4.08 %
Revolver  (21)(35)  First Lien  3M L+6.50%  1.00%  7.50%      12/21/2020  12/21/2025     $ 33,333     33,333    32,500   0.01 %
CompleteCase Holdings, Inc. Class A Common Units (SBIC II)  (4)(9)  Equity                 12/21/2020          417 units     5    0   0.00 %
CompleteCase Holdings, Inc. Series A Preferred Units (SBIC II)  (4)(9)  Equity                 12/21/2020          522 units     521,734    530,000   0.19 %
Total                                       $11,785,061   $11,725,826   4.28 %
Convergence Technologies, Inc.                              Indianpolis, IN                       
Term Loan (SBIC)  (2)(35)  First Lien  3M L+6.75%  1.50%  8.25%      8/31/2018  8/30/2024  Services: Business  $ 6,964,286     6,876,265    6,923,548   2.53 %
Term Loan  (35)  First Lien  3M L+6.75%  1.50%  8.25%      2/28/2019  8/30/2024     $ 1,400,000     1,381,071    1,391,811   0.51 %
Term Loan B (SBIC)  (2)(35)  First Lien  3M L+6.75%  1.50%  8.25%      8/14/2020  8/30/2024     $ 3,731,250     3,667,053    3,709,424   1.36 %
Delayed Draw Term Loan  (35)  First Lien  3M L+6.75%  1.50%  8.25%      8/31/2018  8/30/2024     $ 5,236,607     5,236,607    5,205,976   1.90 %
Tailwind Core Investor, LLC Class A Preferred Units  (4)  Equity                 8/31/2018          5,583 units     588,813    760,000   0.28 %
Total                                        $17,749,809   $17,990,759   6.58 %
Data Centrum Communications, Inc.                              Montvale, NJ                       
Term Loan  (35)  First Lien  3M L+7.50%  1.00%  8.50%      5/15/2019  5/15/2024  Media: Advertising, Printing & Publishing  $ 15,965,625     15,753,687    15,167,344   5.55 %
Health Monitor Holdings, LLC Series A Preferred Units  (4)  Equity                 5/15/2019          1,000,000 shares     1,000,000    330,000   0.12 %
Total                                       $16,753,687   $15,497,344   5.67 %
Douglas Products Group, LP                              Liberty, MO                       
Class A Common Units  (4)  Equity                 12/27/2018     Chemicals, Plastics, & Rubber    322 shares     139,656    850,000   0.31 %
DRS Holdings III, Inc.   (10)                          St. Louis, MO                       
Term Loan  (35)  First Lien  1M  L+5.75%  1.00%  6.75%      11/1/2019  11/1/2025  Consumer Goods: Durable  $ 9,875,000     9,795,676    9,875,000   3.61 %
                                                       
DTE Enterprises, LLC   (18)                          Roselle, IL                       
Term Loan  (6)(35)  First Lien  6M L+8.50%  1.50%  9.50%  0.50%  4/13/2018  4/13/2023  Energy: Oil & Gas  $ 9,332,758     9,245,385    8,539,474   3.12 %
DTE Holding Company, LLC Common Shares, Class A-2  (4)  Equity                 4/13/2018          776,316 shares     466,204    220,000   0.08 %

 7

 

Stellus Capital Investment Corporation

 

Consolidated Schedule of Investments

 

March 31, 2021

 

 (unaudited)

 

DTE Holding Company, LLC Preferred Shares, Class AA  (4)  Equity                 4/13/2018          723,684 shares     723,684    200,000   0.07 %
Total                                       $10,435,273   $8,959,474   3.27 %
Elliott Aviation, LLC                              Moline, IL                       
Term Loan  (35)  First Lien  3M L+6.00%  1.75%  7.75%      1/31/2020  1/31/2025  Aerospace & Defense  $ 18,309,375     18,015,707    17,943,188   6.56 %
Revolver  (3)(35)  First Lien  3M L+6.00%  1.75%  7.75%      1/31/2020  1/31/2025     $ 1,350,000     1,350,000    1,323,000   0.48 %
SP EA Holdings, LLC Preferred Shares, Class A  (4)  Equity                 1/31/2020          900,000 shares     900,000    510,000   0.19 %
Total                                       $20,265,707   $19,776,188   7.23 %
Empirix Holdings I, Inc.                              Billerica, MA                       
Common Shares, Class A  (4)  Equity                 11/1/2013     Software    1,304 shares     1,304,232    1,830,000   0.67 %
Common Shares, Class B  (4)  Equity                 11/1/2013          1,317,406 shares     13,174    20,000   0.01 %
Total                                       $1,317,406   $1,850,000   0.68 %
Energy Labs Holding Corp.                              Houston, TX                       
 Common Stock  (4)  Equity                 9/29/2016     Energy: Oil & Gas    598 shares     598,182    820,000   0.30 %
Exacta Land Surveyors, LLC   (23)(25)                          Cleveland, OH                       
Term Loan (SBIC)  (2)(35)  First Lien  3M L+5.75%  1.50%  7.25%      2/8/2019  2/8/2024  Services: Business  $ 16,671,875     16,462,299    16,421,797   6.01 %
SP ELS Holdings LLC, Class A Common Units  (4)  Equity                 2/8/2019          1,069,143 shares     1,069,143    690,000   0.25 %
Total                                       $17,531,442   $17,111,797   6.26 %
EOS Fitness Holdings, LLC                              Phoenix, AZ                       
 Preferred Units  (4)  Equity                 12/30/2014     Hotel, Gaming, & Leisure    118 shares     0    0   0.00 %
Class B Common Units  (4)  Equity                 12/30/2014          3,017 shares     0    0   0.00 %
Total                                       $0   $0   0.00 %
Fast Growing Trees, LLC   (16)                          Fort Mill, SC                       
Term Loan (SBIC)  (2)(35)  First Lien  3M L+6.75%  1.00%  7.75%      2/5/2018  02/05/23  Retail  $ 14,992,490     14,866,242    14,992,490   5.48 %
SP FGT Holdings, LLC, Class A Common  (4)  Equity                 2/5/2018          1,000,000 shares     978,511    3,420,000   1.25 %
Total                                        $15,844,753   $18,412,490   6.73 %
FB Topco, Inc.                              Camden, NJ                       
Term Loan  (13)(22)  First Lien  6M L+6.35%  1.00%  9.52%      6/27/2018  4/24/2023  Education  $ 20,540,541     20,334,097    20,437,838   7.47 %
Delayed Draw Term Loan  (13)(22)  First Lien  6M L+6.35%  1.00%  9.55%      6/27/2018  4/24/2023     $ 1,126,213     1,126,213    1,120,582   0.41 %
Total                                       $21,460,310   $21,558,420   7.88 %
GK Holdings, Inc.                              Cary, NC                       
Term Loan  (33)(35)  Second Lien  3M L+10.25%  1.00%  0.00%      1/30/2015  1/20/2022  Education  $ 5,000,000     4,983,748    2,900,000   1.06 %
General LED OPCO, LLC   (40)                          San Antonio, TX                       
Term Loan  (35)  Second Lien  3M L+9.00%  1.50%  0.00%      5/1/2018  11/1/2023  Services: Business  $ 4,500,000     4,451,831    3,645,000   1.33 %
GS HVAM Intermediate, LLC                              Carlsbad, CA                       
Term Loan  (35)  First Lien  1M L+5.75%  1.00%  6.75%      10/18/2019  10/2/2024  Beverage, Food, & Tobacco  $ 12,862,942     12,766,331    12,862,942   4.70 %
Revolver  (34)(35)  First Lien  1M L+5.75%  1.00%  6.75%      10/18/2019  10/2/2024     $ 1,007,576     1,007,576    1,007,576   0.37 %
HV GS Acquisition, LP Class A Interests  (4)  Equity                 6/29/2018          1,796 shares     1,618,844    1,990,000   0.73 %
Total                                       $15,392,751   $15,860,518   5.80 %

 8

 

Stellus Capital Investment Corporation

 

Consolidated Schedule of Investments

 

March 31, 2021

 

 (unaudited)

 

Grupo HIMA San Pablo, Inc., et al                              San Juan, PR                       
Term Loan  (27)(35)(41)  First Lien  3M L+7.00%  1.50%  0.00%      2/1/2013  1/31/2018  Healthcare & Pharmaceuticals  $ 4,503,720     4,503,720    2,341,935   0.86 %
Term Loan  (15)(27)  Second Lien  13.75%      0.00%      2/1/2013  7/31/2018     $ 4,109,524     4,109,524    0   0.00 %
Total                                       $8,613,244   $2,341,935   0.86 %
I2P Holdings, LLC                              Cleveland, OH                       
Series A Preferred  (4)  Equity                 1/31/2018     Services: Business    750,000 shares     750,000    3,890,000   1.42 %
Ian, Evan & Alexander Corporation   (36)                          Reston, VA                       
Term Loan (SBIC)  (2)(35)  First Lien  3M L+8.50%  1.00%  9.50%      7/31/2020  7/31/2025  Services: Business  $ 7,049,279     6,923,287    6,978,786   2.55 %
EC Defense Holdings, Class B Units (SBIC)  (2)(4)  Equity                 7/31/2020          20,054 shares     500,000    670,000   0.25 %
Total                                       $7,423,287   $7,648,786   2.80 %
ICD Holdings, LLC                              San Francisco, CA                       
 Class A Preferred  (4)(5)  Equity                 1/1/2018          9,962 shares     464,616    2,320,000   0.85 %
Industry Dive, Inc.   (37)                          Washington, D.C.                       
Term Loan  (SBIC)  (2)(35)  First Lien  1M L+6.25%  1.00%  7.25%      7/17/2020  8/30/2024  Services: Business  $ 6,998,213     6,878,131    6,928,231   2.53 %
Integrated Oncology Network, LLC   (30)                          Newport Beach, CA                       
Term Loan  (35)  First Lien  3M L+5.50%  1.50%  7.00%      7/17/2019  6/24/2024  Healthcare & Pharmaceuticals  $ 16,428,716     16,201,502    16,428,716   6.01 %
Revolver  (35)  First Lien  3M L+5.50%  1.50%  7.00%      7/17/2019  6/24/2024     $ 553,517     553,517    553,517   0.20 %
Total                                       $16,755,019   $16,982,233   6.21 %
Interstate Waste Services, Inc.                              Amsterdam, OH                       
Common Units  (4)  Equity                 10/30/2015     Environmental Industries    21,925 shares     946,125    370,000   0.14 %
Intuitive Health, LLC                              Plano, TX                       
Term Loan (SBIC II)  (9)(35)  First Lien  3M L+6.00%  1.50%  7.50%      10/18/2019  10/18/2024  Healthcare & Pharmaceuticals  $ 5,925,000     5,835,437    5,925,000   2.17 %
Term Loan  (35)  First Lien  3M L+6.00%  1.50%  7.50%      10/18/2019  10/18/2024     $ 11,356,250     11,184,587    11,356,250   4.15 %
Legacy Parent, Inc. Class A Common Units  (4)  Equity                 10/30/2020          58 shares     125,000    130,000       
Total                                       $17,145,024   $17,411,250   6.32 %
Invincible Boat Company, LLC   (28)                          Opa Locka, FL                       
Term Loan (SBIC II)  (9)(35)  First Lien  3M L+6.50%  1.50%  8.00%      8/28/2019  8/28/2025  Consumer Goods: Durable  $ 5,469,818     5,384,170    5,469,818   2.00 %
Term Loan  (35) First Lien  3M L+6.50%  1.50%  8.00%      8/28/2019  8/28/2025     $ 5,925,636     5,779,075    5,925,636   2.17 %
Invincible Parent Holdco, LLC Class A Common Units  (4)  Equity                 8/28/2019          1,000,000 shares     968,105    600,000   0.22 %
Total                                       $12,131,350   $11,995,454   4.39 %
J.R. Watkins, LLC                              San Francisco, CA                       
Term Loan (SBIC)  (2)(6)  First Lien  10.00%      7.00%  3.00%  12/22/2017  12/22/2022  Consumer Goods: non-durable  $ 12,310,854     12,213,466    12,310,854   4.50 %
J.R. Watkins Holdings, Inc. Class A Preferred  (4)  Equity                 12/22/2017          1,133 shares     1,132,576    730,000   0.27 %
Total                                       $13,346,042   $13,040,854   4.77 %

 9

 

Stellus Capital Investment Corporation

 

Consolidated Schedule of Investments

 

March 31, 2021

 

 (unaudited)

 

Jurassic Acquisiton Corp.                              Sparks, MD                       
Term Loan  (12)  First Lien  3M L+5.50%  0.00%  5.70%      12/28/2018  11/15/2024  Metals & Mining  $ 17,106,250     16,937,047    17,106,250   6.26 %
Kelleyamerit Holdings, Inc.                              Walnut Creek, CA                       
Term Loan (SBIC)  (2)(13)(22)  First Lien  1M L+6.50%  1.00%  8.87%      12/24/2020  12/24/2025  Automotive  $ 9,750,000     9,565,339    9,506,250   3.48 %
Term Loan  (13)(22)  First Lien  1M L+6.50%  1.00%  8.87%      12/24/2020  12/24/2025     $ 1,500,000     1,471,591    1,462,500   0.53 %
Total                                       $11,036,930   $10,968,750   4.01 %
KidKraft, Inc.   (38)                          Dallas, TX                       
Term Loan  (22)(29)  First Lien  3M L+5.00%  1.00%  6.00%      9/30/2016  8/15/2022  Consumer Goods: Durable  $ 1,580,768     1,580,768    1,580,768   0.58 %
KidKraft Group Holdings, LLC Preferred B Units  (4)  Equity                 4/3/2020          4,000,000 shares     4,000,000    4,000,000   1.46 %
Total                                       $5,580,768   $5,580,768   2.04 %
Lynx FBO Operating, LLC   (31)                          Houston, TX                       
Term Loan  (35)  First Lien  3M L+5.75%  1.50%  7.25%      9/30/2019  9/30/2024  Aerospace & Defense  $ 13,588,942     13,385,564    13,588,942   4.97 %
Lynx FBO Investments, LLC Class A-1 Common Units  (4)  Equity                 9/30/2019          4,288 shares     593,480    680,000   0.25 %
Total                                       $13,979,044   $14,268,942   5.22 %
Madison Logic, Inc.                              New York, NY                       
Term Loan (SBIC)  (2)(35)  First Lien  1M L+6.50%  1.00%  7.50%      2/4/2021  5/31/2023  Media: Broadcasting & Subscription  $ 3,816,247     3,798,418    3,798,418   1.39 %
Madison Logic Holdings, Inc. Common Stock (SBIC)  (2)(4)  Equity                 11/30/2016          5,000 shares     50,000    110,000   0.04 %
Madison Logic Holdings, Inc. Series A Preferred Stock (SBIC)  (2)(4)  Equity                 11/30/2016          4,500 shares     450,000    980,000   0.36 %
Total                                       $4,298,418   $4,888,418   1.79 %
Mobile Acquisition Holdings, LP                              Santa Clara, CA                       
Class A Common Units  (4)  Equity                 11/1/2016     Software    750 units     455,385    2,500,000   0.91 %
Munch’s Supply, LLC                              New Lenox, IL                       
Term Loan  (35)  First Lien  3M L+6.25%  1.00%  7.25%      4/11/2019  4/11/2024  Capital Equipment  $ 7,210,743     7,163,798    7,210,743   2.64 %
Term Loan (SBIC)  (2)(35)  First Lien  3M L+6.25%  1.00%  7.25%      3/31/2021  4/11/2024     $ 4,000,000     3,920,000    4,000,000   1.46 %
Delayed Draw Term Loan  (35)  First Lien  3M L+6.25%  1.00%  7.25%      4/11/2019  4/11/2024     $ 2,158,590     2,128,324    2,158,590   0.79 %
Cool Supply Holdings, LLC Class A Common Units  (4)  Equity                 4/11/2019          500,000 units     496,362    620,000   0.23 %
Total                                       $13,708,484   $13,989,333   5.12 %
Naumann/Hobbs Material Handling Corporation II, Inc.   (32)                          Phoenix, AZ                       
Term Loan (SBIC II)  (9)(35)  First Lien  3M L+6.25%  1.50%  7.75%      8/30/2019  8/30/2024  Services: Business  $ 5,796,664     5,712,437    5,796,664   2.12 %
Term Loan  (35)  First Lien  3M L+6.25%  1.50%  7.75%      8/30/2019  8/30/2024     $ 9,192,245     9,058,680    9,192,245   3.36 %
CGC NH, Inc. Common Units  (4)  Equity                 8/30/2019          123 shares     440,758    580,000   0.21 %
Total                                       $15,211,875   $15,568,909   5.69 %
NGS US Finco, LLC                              Bradford, PA                       
Term Loan (SBIC)  (2)(35)  Second Lien  1M L+8.50%  1.00%  9.50%      10/1/2018  4/1/2026  Utilities: Oil & Gas  $ 10,000,000     9,888,426    9,850,000   3.60 %
NS412, LLC                              Dallas, TX                       
Term Loan  (35)  Second Lien  3M L+8.50%  1.00%  9.50%      5/6/2019  11/6/2025  Services: Consumer  $ 7,615,000     7,497,956    7,424,625   2.72 %

 10

 

Stellus Capital Investment Corporation

 

Consolidated Schedule of Investments

 

March 31, 2021

 

(unaudited)

 

NS Group Holding Company, LLC Class A Common Units     (4)   Equity                                   5/6/2019                   750 shares       750,000       530,000       0.19 %
Total                                                                         $ 8,247,956     $ 7,954,625       2.91 %
NuMet Machining Techniques, LLC                                                             Birmingham, UK                                
Term Loan     (5)(35)     Second Lien     1M L+9.00%       2.00 %     11.00 %           11/5/2019       5/5/2026     Aerospace & Defense   $ 12,675,000       12,467,955       11,977,875       4.38 %
Bromford Industries Limited Term Loan     (5)(35)     Second Lien     1M L+9.00%       2.00 %     11.00 %           11/5/2019       5/5/2026         $ 7,800,000       7,668,470       7,371,000       2.70 %
Bromford Holdings, L.P. Class A Membership Units     (4)(5)     Equity                                   11/5/2019                   866,629 shares       866,629       160,000       0.06 %
Bromford Holdings, L.P. Class D Membership Units     (4)(5)     Equity                                   3/18/2021                   280,078 shares       280,078       280,000       0.10 %
Total                                                                         $ 21,283,132     $ 19,788,875       7.24 %
NuSource Financial, LLC                                                             Eden Prairie, MN                                
Term Loan (SBIC II)     (9)(35)     First Lien     1M L+9.00%       1.00 %     10.00 %           1/29/2021       1/29/2026     Services: Business   $ 11,250,000       11,030,757       11,030,757       4.03 %
NuSource Financial Acquisition, Inc. (SBIC II)     (9)     Unsecured     13.75%               13.75 %           1/29/2021       7/29/2026         $ 4,750,000       4,656,923       4,657,431       1.70 %
NuSource Holdings, Inc., Warrants (SBIC II)     (4)(9)     Equity                                   1/29/2021                   54,966 shares       0       0       0.00 %
Total                                                                         $ 15,687,680     $ 15,688,188       5.73 %
Nutritional Medicinals, LLC     (24)                                                       Centerville, OH                                
Term Loan     (35)     First Lien     3M L+6.00%       1.00 %     7.00 %           11/15/2018       11/15/2023     Healthcare & Pharmaceuticals   $ 13,231,701       13,080,454       13,231,701       4.84 %
Functional Aggregator, LLC Common Units     (4)     Equity                                   11/15/2018