Stellus Private Credit BDC Reports Results for its Fourth Fiscal Quarter and Year Ended December 31, 2023

FINANCIAL HIGHLIGHTS

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

Three Months Ended

Three Months Ended

Year Ended

Year Ended

December 31, 2023

December 31, 2022

December 31, 2023

December 31, 2022

Amount

Per Share

Amount

Per Share

Amount

Per Share

Amount

Per Share

Net investment income

$3.92

$0.56

$1.88

$0.35

$12.33

$1.96

$4.20

$1.08

Net realized gain on investments

0.70

0.11

—

—

0.70

0.11

—

—

Net unrealized (loss) gain included in earnings

(0.22)

(0.03)

0.30

0.05

2.59

0.41

(0.52)

(0.13)

Provision for taxes on net unrealized appreciation on investments

(0.11)

(0.02)

—

—

(0.17)

(0.03)

—

—

Net increase in net assets resulting from operations

$4.29

$0.62

$2.18

$0.41

15.45

2.46

3.68

0.95

Distributions

(3.55)

(0.51)

(3.51)

(0.66)

(11.77)

(1.88)

(4.28)

(1.11)

Other weighted average share adjustments(1)

—

—

—

—

—

—

—

0.03

Net asset value

108.0

$15.21

80.3

$14.64

108.0

$15.21

80.3

$14.64

Weighted average shares outstanding

6,953,190

5,344,720

6,273,882

3,869,643

PORTFOLIO ACTIVITY

($ in millions)

As of

As of

December 31, 2023

December 31, 2022

Investments at fair value

$208.6

$157.5

Total assets

$211.2

$174.4

Net assets

$108.0

$80.3

Shares outstanding

7,102,136

5,483,433

Net asset value per share

$15.21

$14.64

Three Months Ended

Year Ended

December 31, 2023

December 31, 2023

New investments

$20.9

$89.4

Repayments of investments

(24.9)

(42.3)

Net activity

($4.0)

$47.1

As of

As of

December 31, 2023

December 31, 2022

Number of portfolio company investments

39

25

Number of debt investments

37

24

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

Cash

11.8 %

11.0 %

Payment-in-kind (“PIK”)

0.3 %

—

Fee amortization

0.4 %

0.4 %

Total

12.5 %

11.4 %

Weighted average yield on total investments (3)

Cash

11.2 %

10.7 %

Payment-in-kind (“PIK”)

0.3 %

—

Fee amortization

0.4 %

0.4 %

Total

11.9 %

11.1 %

Activity Type

Date

Company Name

Company Description

Investment Amount

 Instrument Type

Add-On Investment

October 11, 2023

Impact Home Services LLC*

Residential garage door, electrical, and plumbing services provider

$

243,675

Senior Secured – First Lien

$

7,582

Equity

Add-On Investment

October 16, 2023

Equine Network, LLC*

Provider of content, information, tech-enabled services, and hosts competitions for the U.S. equine industry

$

431,401

Senior Secured – First Lien

Add-On Investment

October 31, 2023

2X LLC*

Provider of outsourced digital B2B marketing-as-a-service

$

659,771

Senior Secured – First Lien

Add-On Investment

November 15, 2023

Monitorus Holding, LLC*

Provider of media monitoring and evaluation services

$

16,225

Unsecured Convertible Bond

Add-On Investment

November 30, 2023

Axis Portable Air, LLC*

Air conditioning, heating, and air quality equipment rental company

$

2,500,000

Delayed Draw Term Loan Commitment

Add-On Investment

December 5, 2023

Amika OpCo LLC*

Branded haircare platform

$

1,152,465

Senior Secured – First Lien

New Investment

December 7, 2023

evolv Consulting, LLC

Digital transformation consulting firm

$

5,156,250

Senior Secured – First Lien

$

1,250,000

Revolver Commitment

$

266,927

Equity

New Investment

December 12, 2023

AdCellerant LLC

Provider of outsourced digital marketing software and services

$

5,719,319

Senior Secured – First Lien

$

802,995

Revolver Commitment

$

437,006

Equity

New Investment

December 21, 2023

Michelli, LLC

Provider of test and measurement services and equipment

$

1,342,685

Senior Secured – First Lien

$

2,983,923

Delayed Draw Term Loan Commitment

$

994,641

Revolver Commitment

$

266,062

Equity

Activity Type

Date

Company Name

Company Description

Proceeds Received

Realized Gain

 Instrument Type

Full Repayment

November 30, 2023

Axis Portable Air, LLC*

Air conditioning, heating, and air quality equipment rental company

$

1,509,146

$

—

Senior Secured – First Lien

Full Repayment

November 30, 2023

Archer Systems, LLC*

Provider of mass tort settlement administrative solutions

$

7,834,418

$

—

Senior Secured – First Lien

Full Realization

December 21, 2023

International Designs Holdings LLC*

Distributor of design-oriented surfaces, appliances and architectural specialty products

$

1,296,416

$

841,075

Equity

Full Repayment

December 22, 2023

BLP Buyer, Inc.*

Distributor of lifting solutions

$

4,816,367

$

—

Senior Secured – First Lien

$

2,750,450

$

—

Senior Secured – First Lien

$

1,265,924

$

—

Senior Secured – First Lien

$

779,098

$

—

Senior Secured – First Lien

Activity Type

Date

Company Name

Company Description

Investment Amount

Instrument Type

Add-On Investment

January 9, 2024

Morgan Electrical Group Intermediate Holdings, Inc.*

Provider of commercial electrical services

$

12,854

Senior Secured – First Lien

Add-On Investment

January 12, 2024

Impact Home Services LLC*

Residential garage door, electrical, and plumbing services provider

$

28,813

Equity

Add-On Investment               

January 31, 2024

Impact Home Services LLC*

Residential garage door, electrical, and plumbing services provider

$

12,637

Equity

Add-On Investment               

February 28, 2024

Monitorus Holding, LLC*

Provider of media monitoring and evaluation services

$

38,984

Unsecured Convertible Bond

New Investment

March 11, 2024

Exec Connect Intermediate LLC

Facilitator of executive-level in-person events and remote peer-to-peer industry insights

$

1,746,286

Senior Secured – First Lien

$

254,005

Delayed Draw Term Loan Commitment

$

158,753

Revolver Commitment

$

77,109

Equity

New Investment

March 11, 2024

Titan Meter Bidco Corp.

Provider of liquid metering products and integrated solutions to the energy infrastructure sector

$

7,696,671

Senior Secured – First Lien

$

810,176

Revolver Commitment

$

395,667

Equity

Activity Type

Date

Company Name

Company Description

Proceeds Received

 Instrument Type

Full Repayment

January 8, 2024

Peltram Plumbing Holdings, LLC*

Provider of plumbing solutions.

$

6,818,700

Senior Secured – First Lien

Stellus Private Credit BDC

Record

Payment

Amount per

Declared

Date

Date

Share

1/13/2024

1/15/2024

1/31/2024

$

0.1666

1/13/2024

2/1/2024

2/29/2024

$

0.1666

1/13/2024

3/1/2024

3/29/2024

$

0.1666

December 31, 2023

December 31, 2022

ASSETS

Non-controlled, non-affiliated investments, at fair value (amortized cost of $206,513,758 and $158,022,677, respectively)

$

208,574,078

$

157,504,755

Cash and cash equivalents

593,685

15,469,823

Interest receivable

1,495,581

1,030,274

Expense reimbursement receivable from the Advisor (Note 2)

126,539

165,638

Deferred offering costs

72,875

54,394

Related party receivable

162,455

9,620

Prepaid expenses

127,019

133,004

Receivable for sales and repayments of investments

71,105

26,996

Total Assets

$

211,223,337

$

174,394,504

LIABILITIES

Credit Facilities payable

$

97,031,517

$

79,448,134

Short-term loan payable

—

11,250,000

Dividends payable

3,551,068

1,809,533

Unearned revenue

897,538

539,634

Income incentive fee payable

439,854

328,196

Capital gains incentive fee payable

261,684

—

Interest payable

367,093

563,241

Administrative services payable

124,958

66,064

Income tax payable

182,489

7,471

Deferred tax liability

167,865

—

Other accrued expenses and liabilities

177,249

119,274

Total Liabilities

$

103,201,315

$

94,131,547

Commitments and contingencies (Note 7)

Net Assets

$

108,022,022

$

80,262,957

NET ASSETS

Common shares of beneficial interest, par value $0.01 per share (unlimited shares authorized; 7,102,136 and 5,483,433 issued and outstanding, respectively)

$

71,021

$

54,834

Paid-in capital

104,810,048

80,950,845

Total distributable earnings (loss)

3,140,953

(742,722)

Net Assets

$

108,022,022

$

80,262,957

Total Liabilities and Net Assets

$

211,223,337

$

174,394,504

Net Asset Value Per Share

$

15.21

$

14.64

Year Ended

December 31, 2023

December 31, 2022

December 31, 2021

INVESTMENT INCOME

Interest income

$

22,760,669

$

7,804,783

$

—

Other income

601,776

152,173

—

Total Investment Income

$

23,362,445

$

7,956,956

$

—

OPERATING EXPENSES

Management fees

$

2,833,601

$

1,335,054

$

—

Income incentive fees

2,097,153

686,398

—

Capital gains incentive fee

261,684

—

—

Professional fees

670,800

447,045

70,800

Organization costs

1,000

90,184

416,553

Amortization of deferred offering costs

165,937

240,152

—

Administrative services expenses

417,573

226,489

—

Trustees’ fees

160,000

158,000

42,000

Insurance expense

81,438

82,045

—

Valuation fees

40,324

5,519

—

Interest expense and other fees

8,225,528

2,312,701

—

Income tax expense

44,925

7,471

—

Other general and administrative expenses

142,294

120,343

3,492

Total Operating Expenses

$

15,142,257

$

5,711,401

$

532,845

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

$

(4,101,044)

$

(1,952,196)

$

—

Net Operating Expenses

$

11,041,213

$

3,759,205

$

532,845

Net Investment Income

$

12,321,232

$

4,197,751

$

(532,845)

Net realized gain on non-controlled, non-affiliated investments

$

841,075

$

—

$

—

Net realized gain on foreign currency translation

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

2,566,523

(538,883)

—

Net change in unrealized appreciation on foreign currency translations

11,719

20,961

—

Provision for taxes on net unrealized gain on investments

(167,865)

—

—

Net Increase (Decrease) in Net Assets Resulting from Operations

$

15,454,039

$

3,681,779

$

(532,845)

Net Investment Income Per Share – basic and diluted

$

1.96

$

1.08

$

N/A

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

$

2.46

$

0.95

$

N/A

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

6,273,882

3,869,643

N/A

Distributions Per Share – basic and diluted

$

1.88

$

1.11

$

N/A

Common Shares of

Beneficial Interest

Total

Number of 

Par

Paid-in 

distributable

shares

value

capital

(loss) gain

Net Assets

Balances at December 31, 2020

—

$

—

$

—

$

—

$

—

Net investment loss

—

—

—

(532,845)

(532,845)

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

For the period

For the

from Inception

year ended

through

December 31, 2023

December 31, 2022

December 31, 2022

Cash Flows from Operating Activities

Net increase (decrease) in net assets resulting from operations

$

15,454,039

$

3,681,779

$

(532,845)

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

Purchases of investments

(89,322,601)

(168,326,016)

—

Proceeds from sales and repayments of investments

42,260,585

10,474,408

—

Net change in unrealized (appreciation) depreciation on investments

(2,566,523)

538,883

—

Net change in unrealized appreciation foreign currency translations

(11,719)

(20,961)

—

Increase in investments due to PIK

(129,990)

—

—

Amortization of premium and accretion of discount, net

(502,109)

(198,065)

—

Deferred tax provision

167,865

—

—

Amortization of loan structure fees

586,127

478,626

—

Amortization of deferred offering costs

165,937

240,152

—

Net realized gain on investments

(841,075)

—

—

Changes in other assets and liabilities

Increase in interest receivable

(465,307)

(1,030,274)

—

Increase in deferred offering costs

—

—

(139,570)

Increase in related party receivable

(152,835)

(9,620)

—

Decrease (increase) in expense reimbursements receivable from the Advisor

39,099

(165,638)

—

Decrease (increase) in prepaid expenses

5,985

(39,356)

(93,648)

(Decrease) increase in due to affiliate

—

(460,085)

460,085

Increase in professional fees payable

—

—

263,978

(Decrease) increase in trustees’ fees payable

—

(42,000)

42,000

Increase in administrative services payable

58,894

66,064

—

(Decrease) increase in interest payable

(196,148)

563,241

—

Increase in income incentive fees payable

111,658

328,196

—

Increase in capital gains incentive fees payable

261,684

—

—

Increase in unearned revenue

357,904

539,634

—

Increase in income tax payable

175,018

7,471

—

Increase (decrease) in other accrued expenses and liabilities

57,975

(144,704)

—

Net Cash Used in Operating Activities

$

(34,485,537)

$

(153,518,265)

$

—

Cash Flows from Financing Activities

Proceeds from issuance of common shares of beneficial interest

$

24,073,114

$

81,393,893

$

—

Offering costs paid for common shares of beneficial interest issued

(184,418)

(154,976)

—

Stockholder distributions paid

(10,026,553)

(2,470,337)

—

Borrowings under Credit Facilities

169,750,000

124,762,500

—

Repayments of Credit Facilities

(152,365,000)

(44,147,500)

—

Financing costs paid on Credit Facilities

(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

$

19,609,399

$

168,988,088

$

—

Net (Decrease) Increase in Cash and Cash Equivalents

$

(14,876,138)

$

15,469,823

$

—

Cash and Cash Equivalents Balance at Beginning of Period

15,469,823

—

—

Cash and Cash Equivalents Balance at End of Period

$

593,685

$

15,469,823

$

—

Supplemental and Non-Cash Activities

Cash paid for interest expense

$

7,835,549

$

1,270,834

$

—

Income and excise tax paid

12,895

—

—

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

623,113

43,894

—

Increase in dividends payable

5,360,601

1,809,533

—