Robert T. Ladd, Chief Executive Officer of Stellus PBDC, stated "We are pleased to report solid operating results in the fourth quarter in which we generated $0.34 per share of net investment income and maintained a stable net asset value. During the quarter, we funded $42 million of investments and received $18 million of repayments, bringing the total portfolio to $400 million at fair value. On January 16, 2026, we declared our 2026 first quarter monthly dividend of $0.35 per share in the aggregate."
FINANCIAL HIGHLIGHTS
($ in millions, except data relating to per
share amounts and shares outstanding)
Three Months Ended
Years Ended
December 31, 2025
December 31, 2024
December 31, 2025
December 31, 2024
Amount
Per Share
Amount
Per Share
Amount
Per Share
Amount
Per Share
Net investment income
$4.17
$0.34
$3.49
$0.37
$15.10
$1.33
$15.57
$1.80
Net realized gain on investments
1.42
0.11
0.01
—
1.52
0.14
0.03
—
Net unrealized (depreciation)
appreciation included in earnings
(1.67)
(0.12)
1.39
0.14
0.40
0.04
0.88
0.11
Provision for taxes on net unrealized
appreciation on investments
(0.07)
(0.02)
(0.08)
(0.01)
(0.08)
(0.01)
(0.09)
(0.01)
Net increase in net assets resulting
from operations
$3.85
$0.31
$4.81
$0.50
$16.94
$1.50
$16.39
$1.90
Distributions
(4.47)
(0.36)
(4.53)
(0.47)
(16.51)
(1.46)
(16.96)
(1.96)
Other weighted average share adjustments(1)
—
—
—
(0.01)
—
0.01
—
0.01
Net asset value
$199.63
$15.21
$162.39
$15.16
$199.63
$15.21
$162.39
$15.16
Weighted average shares outstanding
12,424,324
9,561,014
11,316,555
8,643,493
(1) Includes the impact of different share amounts as a result of calculating certain per share data based on weighted average sharesoutstanding during the period and certain per share data based on shares outstanding as of the period end.
PORTFOLIO ACTIVITY
($ in millions)
As of
As of
December 31, 2025
December 31, 2024
Investments at fair value
$400.1
$300.7
Total assets
$404.7
$304.8
Net assets
$199.6
$162.4
Shares outstanding
13,121,397
10,715,095
Net asset value per share
$15.21
$15.16
Three Months Ended
December 31, 2025
December 31, 2024
New investments
$41.8
$52.8
Repayments of investments
(18.1)
(10.7)
Net activity
$23.7
$42.1
As of
As of
December 31, 2025
December 31, 2024
Number of portfolio company investments
74
59
Number of debt investments
71
55
Weight average yield of debt and other income producing
investments(2)
Cash
9.3 %
10.2 %
Payment-in-kind ("PIK")
0.1 %
0.2 %
Fee amortization
0.4 %
0.4 %
Total
9.8 %
10.8 %
Weighted average yield on total investments(3)
Cash
9.0 %
9.8 %
PIK
0.1 %
0.2 %
Fee amortization
0.3 %
0.3 %
Total
9.4 %
10.3 %
(2) 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.
(3) The dollar weighted average yield on total investments takes the same yields as calculated in the footnote above, but weights such yields 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.
Results of Operations
Investment income for the three months ended December 31, 2025 and 2024 totaled $9.8 million and $7.8 million, respectively, most of which was interest income from portfolio investments.
Gross operating expenses for the three months ended December 31, 2025 and 2024 totaled $6.2 million and $5.0 million, respectively. For the same periods, base management fees totaled $1.4 million and $1.0 million, income incentive fees totaled $0.7 million and $0.6 million, respectively; capital gains incentive (reversals) fees of ($0.0) million and 0.1 million, which are not currently payable, respectively; fees and expenses related to the Company's borrowings totaled $3.5 million and $2.6 million (including interest and amortization of deferred financing costs), respectively; administrative expenses totaled $0.2 million and $0.2 million, respectively and other expenses totaled $0.4 million and $0.5 million, respectively. For the three months ended December 31, 2025 and 2024, the Company's investment advisor, Stellus Private BDC Advisor, LLC (the "Advisor"), waived $0.4 million and $0.3 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 less than $0.1 million and $0.2 million of expenses pursuant to expense support and conditional reimbursements from the Advisor, respectively, for net operating expenses of $5.6 million and $4.3 million, respectively.
For the three months ended December 31, 2025 and 2024, net investment income was $4.2 million and $3.5 million, or $0.34 and $0.37 per common share based on weighted average common shares outstanding of 12,424,324 and 9,561,014, respectively.
The Company's investment portfolio had a net change in unrealized appreciation of ($1.7) million and $1.4 million for the three months ended December 31, 2025 and 2024, respectively.
For the three months ended December 31, 2025 and 2024, net increase in net assets resulting from operations totaled $3.9 million and $4.8 million, or $0.31 and $0.50 per common share, based on weighted average common shares outstanding of 12,424,324 and 9,561,014, 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"). The Credit Facility, as amended, provides for borrowings up to a maximum of $300.0 million on a committed basis. As of December 31, 2025 and December 31, 2024, the Company had $128.6 million and $90.5 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") 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"). The SPV Facility, as amended, provides for $75.0 million of initial commitments with an accordion feature that allows for an additional $25.0 million of total commitments from new and existing lenders on the same terms and conditions as the existing commitments. As of December 31, 2025 and December 31, 2024, the Company had $75.0 million and $50.0 million in outstanding borrowings under the SPV Facility, respectively.
For the three months ended December 31, 2025, the Company sold 412,586 common shares of beneficial interest at a weighted-average price of $15.26 per share for aggregate net proceeds of $6.3 million, which included less than $0.1 million of organizational expense allocation pursuant to subscription agreements entered into between the Company and investors during the three months ended December 31, 2025. Additionally, for the three months ended December 31, 2025, the Company called $7.5 million pursuant to capital draw down subscription agreements between the Company and its shareholders. The transaction resulted in the issuance of 491,481 common shares of beneficial interest at a price of $15.26 per share. Lastly, the Company purchased 176,879 common shares of beneficial interest were validly tendered and not withdrawn prior to the expiration of the tender offer during the three months ended December 31, 2025 at a price equal to $15.25 per Share for an aggregate purchase price of approximately $2.7 million.
Distributions
During the three months ended December 31, 2025 and 2024, the Company declared aggregate distributions of $0.36 per share and $0.50, respectively ($4.5 million in the aggregate for both periods). Tax characteristics of all distributions are reported to stockholders on Form 1099-DIV. Tax characteristics of all distributions are reported to stockholders on Form 1099-DIV. Approximately $0.3 million of the dividends declared in 2025 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, 2025:
Activity Type
Date
Company Name
Company Description
Investment Amount
Instrument Type
Add-On Investment
October 1, 2025
The Hardenbergh Group, Inc.*
Provider of patient safety, clinical risk mitigation, and
healthcare compliance solutions
$
1,241,645
Senior Secured, First Lien
New Investment
October 17, 2025
Fidus Systems Inc.
Provider of outsourced electronic product
development and engineering services
$
3,023,836
Senior Secured, First Lien
$
2,015,890
Delayed Draw Term Loan Commitment
$
1,446,825
Revolver Commitment
$
216,218
Equity
Add-On Investment
October 22, 2025
Recharged Opco, LLC*
Provider of residential electrical services
$
775,904
Priority Revolver Commitment
Add-On Investment
October 27, 2025
Channel Partners Intermediateco, LLC*
Provider of outsourced marketing services
$
277,083
Revolver Commitment
Add-On Investment
November 6, 2025
Mobotrex Acquisition, LLC*
Distributor and manufacturer of intelligent traffic
solution equipment
$
1,435,403
Senior Secured, First Lien
$
1,668,789
Delayed Draw Term Loan Commitment
$
461,751
Revolver Commitment
Add-On Investment
December 3, 2025
BC Partners Glengarry Co-Investment LP*
Provider of business-to-business account based
marketing services
$
11,916
Equity
New Investment
December 3, 2025
Pure Upper Holdco LLC
Environmental and ambulatory cleaning services for
healthcare facilities
$
4,472,417
Senior Secured, First Lien
$
1,647,733
Delayed Draw Term Loan Commitment
$
1,859,584
Revolver Commitment
$
178,183
Equity
Add-On Investment
December 15, 2025
SP CS Holdings LLC*
Provider of product testing and consumer insights
$
59,038
Equity
Add-On Investment
December 15, 2025
Recharged Opco, LLC*
Provider of residential electrical services
$
274,800
Priority Revolver Commitment
Add-On Investment
December 17, 2025
Carolina Topco Holdings, LP*
National commercial surface care and restoration
company
$
67,784
Equity
New Investment
December 18, 2025
Pilot Power Group Acquisition, Inc.
Managed energy procurement and energy advisory
services
$
9,000,000
Senior Secured, First Lien
$
275,151
Equity
Add-On Investment
December 19, 2025
Curion Holdings, LLC
Provider of product testing and consumer insights
$
2,053,573
Senior Secured, First Lien
Add-On Investment
December 22, 2025
Solid Surface Holdco, LLC*
National commercial surface care and restoration company
$
1,000,000
Senior Secured, First Lien
$
509,581
Revolver Commitment
New Investment
December 23, 2025
Valor Buyco
Provider of dispatched road services
$
2,918,359
Senior Secured, First Lien
$
2,646,753
Delayed Draw Term Loan Commitment
$
1,497,245
Revolver Commitment
$
490,441
Equity
Add-On Investment
December 31, 2025
FairWave Holdings, LLC*
Specialty coffee platform
$
49,707
Senior Secured, First Lien
$
252,134
Delayed Draw Term Loan Commitment
* Existing portfolio company
The Company realized the following portfolio companies for the three months ended December 31, 2025:
Activity Type
Date
Company Name
Company Description
Proceeds Received
