Stellus Capital Investment Corp Files 2023 Annual Report

TL;DR

<b>Stellus Capital Investment Corp has filed its 2023 10-K annual report.</b>

AI Summary

Stellus Capital Investment Corp (SCM) filed a Annual Report (10-K) with the SEC on March 4, 2024. Stellus Capital Investment Corp filed its 10-K annual report for the fiscal year ending December 31, 2023. The filing was submitted on March 4, 2024. The company's principal business address is 4400 Post Oak Parkway, Suite 2200, Houston, TX 77027. The company's fiscal year ends on December 31. The filing is a public document with 106 pages.

Why It Matters

For investors and stakeholders tracking Stellus Capital Investment Corp, this filing contains several important signals. This 10-K filing provides a comprehensive overview of Stellus Capital Investment Corp's financial performance and business operations for the fiscal year 2023. Investors and stakeholders can use this report to assess the company's financial health, strategic direction, and potential risks.

Risk Assessment

Risk Level: — Stellus Capital Investment Corp shows moderate risk based on this filing. The filing is a standard annual report (10-K) and does not contain immediate red flags or urgent disclosures.

Analyst Insight

Review the detailed financial statements and risk factors within the 10-K to understand Stellus Capital Investment Corp's performance and outlook.

Key Players & Entities

• Stellus Capital Investment Corp (company) — Filer name
• SCM (company) — Ticker symbol
• 20231231 (date) — Fiscal year end
• 20240304 (date) — Filing date
• 4400 Post Oak Parkway, Suite 2200, Houston, TX 77027 (address) — Business address

FAQ

Industry Context

Stellus Capital Investment Corp operates as a business development company (BDC), typically investing in debt and equity of middle-market companies.

Regulatory Implications

As a BDC, Stellus Capital Investment Corp is subject to regulations under the Investment Company Act of 1940 and other SEC rules governing public companies.

What Investors Should Do

1. Analyze the financial statements for revenue, net income, and asset growth.
2. Review the 'Risk Factors' section for potential challenges and uncertainties.
3. Examine management's discussion and analysis (MD&A) for strategic insights.

Key Dates

• 2023-12-31: Fiscal Year End — Marks the end of the reporting period for the 10-K.
• 2024-03-04: Filing Date — Date the 10-K was officially submitted to the SEC.

Year-Over-Year Comparison

This is the initial filing analyzed, so no comparison to a previous filing is available.

Key Financial Figures

• $0.001 — ch Registered Common Stock, par value $0.001 per share New York Stock Exchange S
• $5 million — -market companies (typically those with $5 million to $50 million of EBITDA (earnings befo
• $50 million — ies (typically those with $5 million to $50 million of EBITDA (earnings before interest, ta
• $250 m — ve a market capitalization of less than $250 million, in each case organized and with
• $175 m — uaranteed by the SBA up to a maximum of $175 million, subject to required capitalizati
• $350.0 m — vailable to a "family" of SBIC funds is $350.0 million, subject to SBA approval . SBA-gu
• $325.0 million — e test by permitting us to borrow up to $325.0 million more than we would otherwise be able to
• $30 m — erally range in size from $5 million to $30 million, and we may also selectively inve
• $784.6 million — 11.1 % (a) As of December 31, 2023, $784.6 million of our debt investments at fair value w
• $18.1 million — mber 31, 2023, 4 Table of Contents $18.1 million of our debt investments at fair value w

Filing Documents

• scm-20231231x10k.htm (10-K) — 16437KB
• scm-20231231xex23d1.htm (EX-23.1) — 2KB
• scm-20231231xex31d1.htm (EX-31.1) — 13KB
• scm-20231231xex31d2.htm (EX-31.2) — 13KB
• scm-20231231xex32d1.htm (EX-32.1) — 6KB
• scm-20231231xex32d2.htm (EX-32.2) — 6KB
• scm-20231231xex97d1.htm (EX-97.1) — 32KB
• scm-20231231x10k002.jpg (GRAPHIC) — 9KB
• scm-20231231x10k007.jpg (GRAPHIC) — 70KB
• 0001558370-24-002368.txt (&nbsp;) — 40033KB
• scm-20231231.xsd (EX-101.SCH) — 155KB
• scm-20231231_cal.xml (EX-101.CAL) — 77KB
• scm-20231231_def.xml (EX-101.DEF) — 554KB
• scm-20231231_lab.xml (EX-101.LAB) — 897KB
• scm-20231231_pre.xml (EX-101.PRE) — 661KB
• scm-20231231x10k_htm.xml (XML) — 8307KB

BUSINESS

BUSINESS 1 ITEM 1A.

RISK FACTORS

RISK FACTORS 34 ITEM 1B. UNRESOLVED STAFF COMMENTS 68 ITEM 1C. CYBERSECURITY 68 ITEM 2.

PROPERTIES

PROPERTIES 69 ITEM 3.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 69 ITEM 4. MINE SAFETY DISCLOSURES 69 PART II. ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 70 ITEM 6. [RESERVED] 73 ITEM 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 74 ITEM 7A. QUANTITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK 94 ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 96 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 164 ITEM 9A.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 164 ITEM 9B. OTHER INFORMATION 165 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 166 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 167 ITEM 11.

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION 167 ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 167 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 167 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 167 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 168

SIGNATURES

SIGNATURES 173 Table of Contents PART I

Business

Item 1. Business Except as otherwise indicated, the terms "we," "us," "our," and the "Company" refer to Stellus Capital Investment Corporation; and "Stellus Capital Management," the "Advisor" or the "Administrator" refer to our investment adviser and administrator, Stellus Capital Management, LLC. General We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company ("BDC") under the Investment Company Act of 1940, as amended (the "1940 Act"). We were organized as a Maryland corporation on May 8, 2012, and formally commenced operations on November 7, 2012. We originate and invest primarily in private middle-market companies (typically those with $5 million to $50 million of EBITDA (earnings before interest, taxes, depreciation and amortization)) through first lien (including unitranche), second lien, and unsecured debt financing, often with corresponding equity co-investments. Unitranche structures may combine characteristics of first lien senior secured as well as second lien and/or subordinated loans, and our unitranche loans will expose us to the risks associated with second lien and subordinated loans to the extent we invest in the "last-out" tranche. Unsecured debt includes senior unsecured and subordinated loans. Our investment activities are managed by our investment adviser, Stellus Capital Management, an investment advisory firm led by Robert T. Ladd and its other senior investment professionals. We source investments primarily through the extensive network of relationships that the senior investment professionals of Stellus Capital Management have developed with financial sponsor firms, financial institutions, middle-market companies, management teams and other professional intermediaries. The companies in which we invest are typically highly leveraged, and in most cases, our investments in such companies will not be rated by national rating agencies. If such

View Full Filing

View this 10-K filing on SEC EDGAR