Company Quick10K Filing
Quick10K
Stellus Capital Investment
10-Q 2019-09-30 Quarter: 2019-09-30
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-09-13 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-08-21 Other Events, Exhibits
8-K 2019-07-22 Shareholder Vote
8-K 2018-06-28 Shareholder Vote, Other Events
8-K 2018-04-04 Other Events
PME Pingtan Marine Enterprise 188
MRBK Mercantile Bankshares 110
ARCC Ares Capital 0
PIO Pioneer 0
PBY Pep Boys Manny Moe & Jack 0
NMFC New Mountain Finance 0
GECC Great Elm Capital 0
MRCC Monroe Capital 0
GSAH GS Acquisition Holdings 0
SAB Grupo Casa Saba 0
SCM 2019-09-30
Part I &Mdash; Financial Information Stellus Capital Investment Corporation Consolidated Statements of Assets and Liabilities
Note 1 &Mdash; Nature of Operations and Significant Accounting Policies
Note 2 &Mdash; Related Party Arrangements
Note 3 &Mdash; Distributions
Note 4 &Mdash; Equity Offerings and Related Expenses
Note 5 &Mdash; Net Increase in Net Assets per Common Share
Note 6 &Mdash; Portfolio Investments and Fair Value
Note 7 &Mdash; Commitments and Contingencies
Note 8 &Mdash; Financial Highlights
Note 9 &Mdash; Credit Facility
Note 10 &Mdash; Sba-Guaranteed Debentures
Note 11 &Mdash; Notes
Note 12 &Mdash; Subsequent Events
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II &Mdash; Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits.
EX-31.1 tm19209261_ex31-1.htm
EX-31.2 tm19209261_ex31-2.htm
EX-32.1 tm19209261_ex32-1.htm
EX-32.2 tm19209261_ex32-2.htm

Stellus Capital Investment Earnings 2019-09-30

SCM 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 tm1920926-1_10q.htm FORM 10-Q

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

 

FORM 10-Q

 

 

 

(Mark One)

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

 

For the quarterly period ended September 30, 2019

 

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
5.75% Notes Due 2022 SCA 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 x 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 x
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 x

 

The number of shares of the issuer’s Common Stock, $0.001 par value per share, outstanding as of November 6, 2019 was 18,905,959.

 

 

 

 

 

 

STELLUS CAPITAL INVESTMENT CORPORATION
TABLE OF CONTENTS
     
PART I. FINANCIAL INFORMATION  
Item 1. Financial Statements 1
  Consolidated Statements of Assets and Liabilities as of September 30, 2019 (unaudited) and December 31, 2018 2
  Consolidated Statements of Operations for the three and nine-month periods ended September 30, 2019 and 2018 (unaudited) 3
  Consolidated Statements of Changes in Net Assets for the three and nine-month periods ended September 30, 2019 and 2018 (unaudited) 4
  Consolidated Statements of Cash Flows for the nine-month periods ended September 30, 2019 and 2018 (unaudited) 5
  Consolidated Schedules of Investments as of September 30, 2019 (unaudited) and December 31, 2018 6
  Notes to Unaudited Consolidated Financial Statements 23
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 58
Item 3. Quantitative and Qualitative Disclosures About Market Risk 76
Item 4.  Controls and Procedures 77
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 79
Item 3. Defaults Upon Senior Securities 79
Item 4. Mine Safety Disclosures 79
Item 5. Other Information 79
Item 6. Exhibits 79
SIGNATURES 80

 

i

 

 

PART I — FINANCIAL INFORMATION
               
STELLUS CAPITAL INVESTMENT CORPORATION
               
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

 

   September 30,     
   2019   December 31, 
   (Unaudited)   2018 
ASSETS          
Non-controlled, affiliated investments, at fair value          
(amortized cost of $0 and $52,185, respectively)  $   $50,000 
Non-controlled, non-affiliated investments, at fair value          
(amortized cost of $594,720,716 and $502,691,464, respectively)   586,411,494    504,433,668 
Cash and cash equivalents   23,010,475    17,467,146 
Receivable for sales and repayments of investments   277,334    99,213 
Interest receivable   2,819,519    3,788,684 
Other receivables   25,495    85,246 
Deferred offering costs   210,810    18,673 
Prepaid expenses   87,356    344,621 
Total Assets  $612,842,483   $526,287,251 
LIABILITIES          
Notes payable  $47,890,418   $47,641,797 
Credit facility payable   135,022,469    98,237,227 
SBA-guaranteed debentures   146,640,606    146,387,802 
Dividends payable   2,142,048    1,807,570 
Management fees payable   2,480,918    2,183,975 
Income incentive fees payable   1,802,343    1,936,538 
Capital gains incentive fees payable   1,892,570    81,038 
Interest payable   852,080    1,863,566 
Unearned revenue   512,750    410,593 
Administrative services payable   402,360    392,191 
Deferred tax liability   103,654    67,953 
Income tax payable   717,000    316,092 
Other accrued expenses and liabilities   215,700    115,902 
Total Liabilities  $340,674,916   $301,442,244 
Commitments and contingencies (Note 7)          
Net Assets  $272,167,567   $224,845,007 
NET ASSETS          
Common stock, par value $0.001 per share (200,000,000 shares authorized; 18,905,959 and 15,953,810 issued and outstanding, respectively)  $18,906   $15,954 
Paid-in capital   269,461,191    228,160,491 
Accumulated undistributed earnings (deficit)   2,687,470    (3,331,438)
Net Assets  $272,167,567   $224,845,007 
Total Liabilities and Net Assets  $612,842,483   $526,287,251 
Net Asset Value Per Share  $14.40   $14.09 

 

 2 

 

 

STELLUS CAPITAL INVESTMENT CORPORATION
                             
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

 

   For the   For the   For the   For the 
   three   three   nine   nine 
   months ended   months ended   months ended   months ended 
   September 30,   September 30,   September 30,   September 30, 
   2019   2018   2019   2018 
INVESTMENT INCOME                    
Interest income  $15,134,874   $13,859,431   $42,366,134   $36,804,945 
Other income   380,353    628,192    1,154,277    1,214,116 
Total Investment Income  $15,515,227   $14,487,623   $43,520,411   $38,019,061 
OPERATING EXPENSES                    
Management fees  $2,480,918   $2,172,948   $7,007,925   $5,970,867 
Valuation fees   109,296    132,325    238,246    287,042 
Administrative services expenses   425,849    348,901    1,246,754    1,008,293 
Income incentive fees   1,583,145    1,565,301    4,339,813    3,846,441 
Capital gains incentive fees   533,920    651,231    1,811,533    1,173,250 
Professional fees   166,802    289,125    840,683    982,384 
Directors' fees   83,000    73,000    300,000    244,000 
Insurance expense   87,601    87,601    259,947    259,947 
Interest expense and other fees   3,774,316    3,440,115    10,808,373    8,917,739 
Income tax expense   350,549        705,677     
Other general and administrative expenses   121,172    117,102    413,742    516,509 
Total Operating Expenses  $9,716,568   $8,877,649   $27,972,693   $23,206,472 
Net Investment Income  $5,798,659   $5,609,974   $15,547,718   $14,812,589 
Net realized gain on non-controlled, non-affiliated investments  $6,200,367   $2,771,817   $19,142,603   $5,183,050 
Net change in unrealized appreciation (depreciation) on non-controlled, non-affiliated investments  $(3,534,972)  $529,552   $(10,051,426)  $3,805,406 
Net change in unrealized appreciation (depreciation) on non-controlled, affiliated investments       (1,667)   2,185    65,000 
Benefit (provision) for taxes on net unrealized gain on investments  $4,200   $(25,159)  $(35,701)  $(34,353)
Net Increase in Net Assets Resulting from Operations  $8,468,254   $8,884,517   $24,605,379   $23,831,692 
Net Investment Income Per Share  $0.31   $0.35   $0.86   $0.93 
Net Increase in Net Assets Resulting from Operations Per Share  $0.45   $0.56   $1.36   $1.49 
Weighted Average Shares of Common Stock Outstanding   18,905,959    15,953,810    18,056,271    15,953,491 
Distributions Per Share  $0.34   $0.34   $1.02   $1.02 

 

 3 

 

 

STELLUS CAPITAL INVESTMENT CORPORATION
                           
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (unaudited)

 

   For the   For the   For the   For the 
   three   three   nine   nine 
   months ended   months ended   months ended   months ended 
   September 30,   September 30,   September 30,   September 30, 
   2019   2018   2019   2018 
Increase in Net Assets Resulting from Operations                    
Net investment income  $5,798,659   $5,609,974   $15,547,718   $14,812,589 
Net realized gain on investments   6,200,367    2,771,817    19,142,603    5,183,050 
Net change in unrealized appreciation (depreciation) on non-controlled, non-affiliated investments   (3,534,972)   462,885    (10,051,426)   3,805,406 
Net change in unrealized appreciation on non-controlled, affiliated investments       65,000    2,185    65,000 
Benefit (provision) for taxes on unrealized appreciation on investments   4,200    (25,159)   (35,701)   (34,353)
Net Increase in Net Assets Resulting from Operations  $8,468,254   $8,884,517   $24,605,379   $23,831,692 
                     
Decrease in Net Assets from Stockholder Distributions  $(6,426,113)  $(5,422,686)  $(18,586,471)  $(16,267,868)
Capital Share Transactions                    
Issuance of common stock  $   $   $42,599,510   $94,788 
Sales load           (1,003,731)    
Offering costs           (293,072)    
Partial share transactions   (237)   (202)   945    (770)
Net Increase (Decrease) in Net Assets Resulting From Capital Share Transactions  $(237)  $(202)  $41,303,652   $94,018 
Total Increase in Net Assets  $2,041,904   $3,461,629   $47,322,560   $7,657,842 
Net Assets at Beginning of Period  $270,125,663   $224,443,455   $224,845,007   $220,247,242 
Net Assets at End of Period  $272,167,567   $227,905,084   $272,167,567   $227,905,084 

 

 4 

 

 

STELLUS CAPITAL INVESTMENT CORPORATION
       
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

 

   For the   For the 
   nine   nine 
   months ended   months ended 
   September 30,   September 30, 
   2019   2018 
Cash flows from operating activities          
Net Increase in net assets resulting from operations  $24,605,379   $23,831,692 
Adjustments to reconcile net increase in net assets resulting from          
operations to net cash used in operating activities:          
Purchases of investments   (172,852,479)   (198,335,218)
Proceeds from sales and repayments of investments   101,491,694    102,813,575 
Net change in unrealized depreciation (appreciation) on investments   10,049,241    (3,870,406)
Increase in investments due to PIK   (378,119)   (491,628)
Amortization of premium and accretion of discount, net   (1,273,680)   (1,152,487)
Deferred tax provision   35,701    34,353 
Amortization of loan structure fees   377,741    329,483 
Amortization of deferred financing costs   248,621    251,525 
Amortization of loan fees on SBA-guaranteed debentures   452,804    471,658 
Net realized gain on investments   (19,142,603)   (5,183,050)
Changes in other assets and liabilities          
Decrease (increase) in interest receivable   969,165    (187,804)
Decrease (increase) in other receivable   59,751    (135,246)
Decrease in prepaid expenses   257,265    235,300 
Increase (decrease) in management fees payable   296,943    (198,644)
Increase (decrease) in incentive fees payable   (134,195)   1,424,286 
Increase in capital gains incentive fees payable   1,811,532    1,173,250 
Increase in administrative services payable   10,169    58,384 
Decrease in interest payable   (1,011,486)   (341,880)
Increase in unearned revenue   102,157    164,757 
Increase in income tax payable   400,908     
Increase (decrease) in other accrued expenses and liabilities   99,798    (114,346)
Net Cash Used in Operating Activities  $(53,523,693)  $(79,222,446)
Cash flows from Financing Activities          
Proceeds from the issuance of common stock  $42,599,510   $ 
Sales load for common stock issued   (1,003,731)    
Offering costs paid for common stock   (485,209)   (17,898)
Stockholder distributions paid   (18,251,993)   (16,172,181)
Proceeds from SBA Debentures       60,000,000 
Financing costs paid on SBA Debentures   (200,000)   (2,055,000)
Borrowings under Credit Facility   173,000,000    188,300,000 
Repayments of Credit Facility   (136,500,000)   (145,750,000)
Financing costs paid on Credit Facility   (92,500)   (310,000)
Partial share transactions   945    (770)
Net Cash Provided by Financing Activities  $59,067,022   $83,994,151 
Net Increase in Cash and Cash Equivalents  $5,543,329   $4,771,705 
Cash and cash equivalents balance at beginning of period   17,467,146    25,110,718 
Cash and Cash Equivalents Balance at End of Period  $23,010,475   $29,882,423 
Supplemental and Non-Cash Activities          
Cash paid for interest expense  $10,735,379   $8,201,952 
Excise tax paid   280,000    27,717 
Shares issued pursuant to Dividend Reinvestment Plan       94,788 
Increase in distribution payable   334,478    899 
Increase in deferred offering costs   192,137     

 

 5 

 

 

 

Stellus Capital Investment Corporation

 

Consolidated Schedule of Investments (unaudited)

 

September 30, 2019

 

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)                                                                            
Abrasive Products & Equipment, LLC, et al                                               Deer Park, TX                                
Term Loan (SBIC)   (2)(12)   Second Lien   3M L+10.50%     1.00 %     12.61 %           9/5/2014   3/5/2021   Chemicals, Plastics, & Rubber   $ 5,325,237     $ 5,313,647     $ 4,952,471       1.82 %
APE Holdings, LLC Class A Common Units   (4)   Equity                               9/5/2014             375,000 units       375,000       140,000       0.05 %
Total                                                           $ 5,688,647     $ 5,092,471       1.87 %
Adams Publishing Group, LLC   (3)                                           Greenville, TN                                
Term Loan   (12)   First Lien   3M L+7.50%     1.00 %     9.78 %           8/3/2018   6/30/2023   Media: Advertising, Printing & Publishing   $ 5,693,205       5,646,537       5,579,340       2.05 %
Delayed Draw Term Loan   (12)   First Lien   3M L+7.50%     1.00 %     9.61 %           8/3/2018   6/30/2023       $ 180,495       180,495       176,885       0.06 %
Total                                                           $ 5,827,032     $ 5,756,225       2.11 %
Advanced Barrier Extrusions, LLC   (8)                                           Rhinelander, WI                                
Term Loan (SBIC)   (2)(12)   First Lien   3M L+5.75%     1.00 %     7.86 %           8/8/2018   8/8/2023   Containers, Packaging & Glass   $ 11,314,500       11,133,080       10,861,920       3.99 %
GP ABX Holdings Partnership, L.P. Common Stock   (4)   Equity                               8/8/2018             250,000 units       250,000       290,000       0.11 %
Total                                                           $ 11,383,080     $ 11,151,920       4.10 %
Apex Environmental Resources Holdings, LLC                                               Amsterdam, OH                                
Common Units   (4)   Equity                               10/30/2015       Environmental Industries     945 shares       945       0       0.00 %
Preferred Units   (4)   Equity                               10/30/2015             945 shares       945,179       230,000       0.08 %
Total                                                           $ 946,124     $ 230,000       0.08 %
APG Intermediate Sub 2 Corp.                                               Castle Rock, CO                                
Term Loan   (13)(22)   First Lien   1M L+6.00%     1.00 %     9.36 %           11/30/2018   11/30/2023   Aerospace & Defense   $ 9,925,000       9,730,892       9,627,250       3.54 %
APG Holdings, LLC Class A Preferred Units   (4)   Equity                               11/30/2018             1,127,652 units       1,127,652       1,050,000       0.39 %
Total                                                           $ 10,858,544     $ 10,677,250       3.93 %
Atmosphere Aggregator Holdings II, LP                                               Atlanta, GA                                
Common Units   (4)   Equity                               1/26/2016       Services: Business     254,250 units       0       1,100,000       0.40 %
Atmosphere Aggregator Holdings, LP Common Units   (4)   Equity                               6/30/2015             750,000 units       0       3,250,000       1.19 %
Total                                                           $ 0     $ 4,350,000       1.59 %
ASC Communications, LLC   (7)                                           Chicago, IL                                
Term Loan (SBIC)   (2)(12)   First Lien   1M L+5.75%     1.00 %     7.79 %           6/29/2017   6/29/2023   Healthcare & Pharmaceuticals   $ 4,567,901       4,540,324       4,522,222       1.66 %
Term Loan   (12)   First Lien   1M L+5.75%     1.00 %     7.79 %           2/4/2019   6/29/2023       $ 7,765,432       7,681,044       7,687,778       2.82 %
ASC Communications Holdings, LLC Class A Preferred Units (SBIC)   (2)(4)   Equity                               6/29/2017             73,529 shares       99,965       700,000       0.26 %
Total                                                           $ 12,321,333     $ 12,910,000       4.74 %

 

 6 

 

 

Stellus Capital Investment Corporation

 

Consolidated Schedule of Investments (unaudited)

 

September 30, 2019

 

BFC Solmetex, LLC   (23)                                           Nashville, TN                                
Revolver   (12)(19)   First Lien   3M L+6.25%     1.00 %     8.36 %           4/2/2018   9/26/2023   Environmental Industries   $ 1,466,993       1,466,993       1,408,313       0.52 %
Term Loan (SBIC)   (2)(12)   First Lien   3M L+6.25%     1.00 %     8.36 %           4/2/2018   9/26/2023       $ 11,622,372       11,489,157       11,157,477       4.10 %
Bonded Filter Co. LLC, Term Loan (SBIC)   (2)(12)   First Lien   3M L+6.25%     1.00 %     8.36 %           4/2/2018   9/26/2023       $ 1,207,977       1,194,131       1,159,658       0.43 %
Total                                                           $ 14,150,281     $ 13,725,448       5.05 %
BW DME Acquisition, LLC                                               Tempe, AZ                                
Term Loan (SBIC)   (2)(13)(22)   First Lien   3M L+6.00%     1.00 %     9.76 %           8/24/2017   8/24/2022   Healthcare & Pharmaceuticals   $ 16,695,804       16,367,611       16,361,888       6.01 %
BW DME Holdings, LLC, Term Loan   (6)   Unsecured   17.50%                     17.50 %   6/1/2018   12/31/2019       $ 315,584       315,584       315,584       0.12 %
BW DME Holdings, LLC Class A-1 Preferred Units   (4)   Equity                               8/24/2017             1,000,000 shares       1,000,000       1,140,000       0.42 %
BW DME Holdings, LLC Class A-2 Preferred Units   (4)   Equity                               1/26/2018             937,261 shares       937,261       1,060,000       0.39 %
Total                                                           $ 18,620,456     $ 18,877,472       6.94 %
Café Valley, Inc.                                               Phoenix, AZ                                
Term Loan   (12)   First Lien   3M L+6.00%     1.25 %     8.11 %           8/28/2019   8/28/2024   Beverage, Food, & Tobacco   $ 17,619,048       17,271,496       17,271,496       6.35 %
CF Topco LLC, Common Units   (4)   Equity                               8/28/2019             8,810 shares       880,952       880,952       0.32 %
Total                                                           $ 18,152,448     $ 18,152,448       6.67 %
C.A.R.S. Protection Plus, Inc.                                               Murrysville, PA                                
Term Loan   (12)   First Lien   1M L+8.50%     0.50 %     10.55 %           12/31/2015   12/31/2020   Automotive   $ 94,003       93,447       94,003       0.03 %
Term Loan (SBIC)   (2)(12)   First Lien   3M L+8.50%     0.50 %     10.55 %           12/31/2015   12/31/2020       $ 7,332,210       7,288,808       7,332,210       2.69 %
CPP Holdings LLC Class A Common Units   (4)   Equity                               12/31/2015             149,828 shares       149,828       240,000       0.09 %
Total                                                           $ 7,532,083     $ 7,666,213       2.81 %
Colford Capital Holdings, LLC                                               New York, NY                                
 Preferred Units   (4)(5)   Equity                               8/20/2015       Finance     38,893 units       195,037       20,000       0.01 %
Condor Borrower, LLC                                               Clifton, NJ                                
Term Loan   (12)   Second Lien   3M L+8.75%     1.00 %     11.01 %           10/27/2017   4/27/2025   Software   $ 13,750,000       13,526,864       13,268,750       4.88 %
Condor Top Holdco Limited Convertible Preferred Shares   (4)   Equity                               10/27/2017             500,000 shares       442,197       320,000       0.12 %
Condor Holdings Limited Preferred Shares, Class B   (4)   Equity                               10/27/2017             500,000 shares       57,804       40,000       0.01 %
Total                                                           $ 14,026,865     $ 13,628,750       5.01 %
Convergence Technologies, Inc.                                               Indianpolis, IN                                
Term Loan (SBIC)   (2)(12)   First Lien   3M L+6.75%     1.50 %     8.86 %           8/31/2018   8/30/2024   Services: Business   $ 7,071,429       6,950,423       7,036,071       2.59 %
Term Loan   (12)   First Lien   3M L+6.75%     1.50 %     8.86 %           2/28/2019   8/30/2024       $ 1,421,429       1,395,413       1,414,321       0.52 %
Delayed Draw Term Loan   (12)   First Lien   3M L+6.75%     1.50 %     8.86 %           8/31/2018   8/30/2024       $ 5,316,964       5,316,964       5,290,379       1.94 %
Tailwind Core Investor, LLC Class A Preferred Units   (4)   Equity                               8/31/2018             4,275 units       429,614       430,000       0.16 %
Total                                                           $ 14,092,414     $ 14,170,771       5.21 %
Data Centrum Communications, Inc.                                               Montvale, NJ                                
Term Loan   (12)   First Lien   3M L+5.50%     1.00 %     7.60 %           5/15/2019   5/15/2024   Media: Advertising, Printing & Publishing   $ 16,209,375       15,906,911       15,885,188       5.84 %
Health Monitor Holdings, LLC Seires A Preferred Units   (4)   Equity                               5/15/2019             1,000,000 shares       1,000,000       1,050,000       0.39 %
Total                                                           $ 16,906,911     $ 16,935,188       6.23 %

 

 7 

 

Stellus Capital Investment Corporation

 

Consolidated Schedule of Investments (unaudited)

 

September 30, 2019

 

Douglas Products Group, LP                                               Liberty, MO                                
Class A Common Units   (4)   Equity                               12/27/2018       Chemicals, Plastics, & Rubber     322 shares       139,656       520,000       0.19 %
Dream II Holdings, LLC                                               Boca Raton, FL                                
Common Units   (4)   Equity                               10/20/2014       Services: Consumer     250,000 units       242,304       0       0.00 %
DTE Enterprises, LLC   (18)                                           Roselle, IL                                
Term Loan   (12)   First Lien   3M L+7.50%     1.50 %     9.69 %           4/13/2018   4/13/2023   Energy: Oil & Gas   $ 11,491,941       11,318,849       11,491,941       4.22 %
DTE Holding Company, LLC Common Shares, Class A-2   (4)   Equity                               4/13/2018             776,316 shares       466,204       1,080,000       0.40 %
DTE Holding Company, LLC Preferred Shares, Class AA   (4)   Equity                               4/13/2018             723,684 shares       723,684       1,010,000       0.37 %
Total                                                           $ 12,508,737     $ 13,581,941       4.99 %
Empirix Inc.                                               Billerica, MA                                
Empirix Holdings I, Inc. Common Shares, Class A   (4)   Equity                               11/1/2013       Software     1,304 shares       1,304,232       0       0.00 %
Empirix Holdings I, Inc. Common Shares, Class B   (4)   Equity                               11/1/2013             1,317,406 shares       13,174       0       0.00 %
Total                                                           $ 1,317,406     $ 0       0.00 %
Energy Labs Inc.                                               Houston, TX                                
Energy Labs Holding Corp. Common Stock   (4)   Equity                               9/29/2016       Energy: Oil & Gas     598 shares       598,182       780,000       0.29 %
Exacta Land Surveyors, LLC   (14)(25)                                           Cleveland, OH                                
Term Loan (SBIC)   (2)(12)   First Lien   3M L+5.75%     1.50 %     7.86 %           2/8/2019   2/8/2024   Services: Business   $ 16,926,875       16,621,988       16,588,338       6.09 %
SP ELS Holdings LLC, Class A Common Units   (4)   Equity                               2/8/2019             1,069,143 shares       1,069,143       1,100,000       0.40 %
Total                                                           $ 17,691,131     $ 17,688,338       6.49 %
EOS Fitness OPCO Holdings, LLC                                               Phoenix, AZ                                
EOS Fitness Holdings, LLC Preferred Units   (4)   Equity                               12/30/2014       Hotel, Gaming, & Leisure     118 shares       0       450,000       0.17 %
EOS Fitness Holdings, LLC Class B Common Units   (4)   Equity                               12/30/2014             3,017 shares       0       10,000       0.00 %
Total                                                           $ 0     $ 460,000       0.17 %
Fast Growing Trees, LLC   (16)                                           Fort Mill, SC                                
Term Loan (SBIC)   (2)(12)   First Lien   3M L+7.75%     1.00 %     9.86 %           2/5/2018   02/05/23   Retail   $ 19,192,490       18,917,515       18,328,828       6.73 %
SP FGT Holdings, LLC, Class A Common   (4)   Equity                               2/5/2018             1,000,000 shares       1,000,000       760,000       0.28 %
Total                                                           $ 19,917,515     $ 19,088,828       7.01 %
FB Topco, Inc.                                               Camden, NJ                                
Term Loan   (13)(22)   First Lien   3M L+6.35%     1.00 %     10.77 %           6/27/2018   4/24/2023   Education   $ 20,856,549       20,525,323       20,126,570       7.39 %
Delayed Draw Term Loan   (13)(22)   First Lien   3M L+6.35%     1.00 %     10.81 %           6/27/2018   4/24/2023       $ 1,143,451       1,143,451       1,103,430       0.41 %
Total                                                           $ 21,668,774     $ 21,230,000       7.80 %
Furniture Factory Outlet, LLC                                               Fort Smith, AR                                
Term Loan       First Lien   7.00%             7.00 %           6/10/2016   6/10/2021   Consumer Goods: Durable   $ 14,801,785       14,659,412       12,803,544       4.70 %
Furniture Factory Holdings, LLC Term Loan   (6)   Unsecured   11.00%                     11.00 %   6/10/2016   2/3/2021       $ 147,231       147,231       0       0.00 %
Furniture Factory Ultimate Holdings, LP Common Units   (4)   Equity                               6/10/2016             13,445 shares       94,569       0       0.00 %
Total                                                           $ 14,901,212     $ 12,803,544       4.70 %
GK Holdings, Inc.                                               Cary, NC                                
Term Loan   (12)   Second Lien   3M L+10.25%     1.00 %     12.35 %           1/30/2015   1/30/2022   Education   $ 5,000,000       4,957,957       4,375,000       1.61 %
General LED OPCO, LLC                                               San Antonio, TX                                
Term Loan   (12)   Second Lien   3M L+9.00%     1.50 %     11.11 %           5/1/2018   11/1/2023   Services: Business   $ 4,500,000       4,428,657       4,207,500       1.55 %
Good Source Solutions, Inc.                                               Carlsbad, CA                                
Term Loan   (13)(22)   First Lien   3M L+6.00%     1.00 %     10.29 %           6/29/2018   6/29/2023   Beverage, Food, & Tobacco   $ 18,500,000       18,204,146       18,500,000       6.80 %
HV GS Acquisition, LLC Class A Preferred Units   (4)   Equity                               6/29/2018             1,000 shares       1,000,000       780,000       0.29 %
HV GS Acquisition, LLC Class B Common Units   (4)   Equity                               6/29/2018             28,125 shares       0       0       0.00 %
Total                                                           $ 19,204,146     $ 19,280,000       7.09 %

 8 

 

Stellus Capital Investment Corporation

 

Consolidated Schedule of Investments (unaudited)

 

September 30, 2019

 

Grupo HIMA San Pablo, Inc., et al                                               San Juan, PR                                
Term Loan   (12)(27)   First Lien   3M L+7.00%     1.50 %     9.27 %           2/1/2013   1/31/2018   Healthcare & Pharmaceuticals   $ 4,503,720       4,503,720       3,693,051       1.36 %
Term Loan   (15)(27)   Second Lien   13.75%             0.00 %           2/1/2013   7/31/2018       $ 4,109,524       4,109,524       287,667       0.11 %
Total                                                           $ 8,613,244     $ 3,980,718       1.47 %
ICD Intermediate Holdco 2, LLC                                               San Francisco, CA                                
Term Loan (SBIC)   (2)(5)(12)   Second Lien   3M L+9.00%     1.00 %     11.11 %           1/1/2018   7/1/2024   Finance   $ 10,000,000       9,841,351       10,000,000       3.67 %
ICD Holdings, LLC, Class A Preferred   (4)(5)   Equity                               1/1/2018             9,962 shares       496,405       990,000       0.36 %
Total                                                           $ 10,337,756     $ 10,990,000       4.03 %
Integrated Oncology Network, LLC   (29)(30)                                           Newport Beach, CA                                
Term Loan   (12)   First Lien   3M L+5.50%     1.50 %     7.66 %           7/17/2019   6/24/2024   Healthcare & Pharmaceuticals   $ 16,678,899       16,359,213       16,359,212       6.01 %
Invincible Boat Company, LLC   (28)                                           Opa Locka, FL                                
Term Loan (SBIC II)   (9)(12)   First Lien   3M L+6.50%     1.50 %     8.61 %           8/28/2019   8/28/2025   Consumer Goods: Durable   $ 6,000,000       5,881,286       5,881,286       2.16 %
Term Loan   (12)   First Lien   3M L+6.50%     1.50 %     8.61 %           8/28/2019   8/28/2025       $ 6,500,000       6,297,180       6,297,180       2.31 %
Invincible Parent Holdco, LLC Class A Common Units   (4)   Equity                               8/28/2019             1,000,000 shares       1,000,000       1,000,000       0.37 %
Total                                                           $ 13,178,466     $ 13,178,466       4.84 %
J.R. Watkins, LLC                                               San Francisco, CA                                
Revolver   (12)   First Lien   1M L+6.50%     1.25 %     8.55 %           12/22/2017   12/22/2022   Consumer Goods: non-durable   $ 1,750,000       1,750,000       1,618,750       0.59 %
Term Loan (SBIC)   (2)(12)   First Lien   1M L+6.50%     1.25 %     8.55 %           12/22/2017   12/22/2022       $ 12,281,250       12,110,394       11,360,156       4.17 %
J.R. Watkins Holdings, Inc. Class A Preferred   (4)   Equity                               12/22/2017             1,133 shares       1,132,576       510,000       0.19 %
Total                                                           $ 14,992,970     $ 13,488,906       4.95 %
Jurassic Acquisiton Corp.                                               Sparks, MD                                
Term Loan   (12)   First Lien   1M L+4.50%     0.00 %     7.55 %           12/28/2018   11/15/2024   Metals & Mining   $ 17,368,750       17,136,522       17,368,750       6.38 %
Kelleyamerit Holdings, Inc.                                               Walnut Creek, CA                                
Term Loan (SBIC)   (2)(13)(22)   First Lien   3M L+7.50%     1.00 %     10.21 %           3/30/2018   3/30/2023   Automotive   $ 9,750,000       9,602,695       9,555,000       3.51 %
Keais Records Service, LLC                                               Houston, TX                                
Keais Holdings, LLC Class A Units   (4)   Equity                               12/22/2016       Services: Business     148,335 units       724,566       960,000       0.35 %
KidKraft, Inc.                                               Dallas, TX                                
Term Loan   (6)   Second Lien   12.00%             11.00 %     1.00 %   9/30/2016   3/30/2022   Consumer Goods: Durable   $ 9,479,761       9,378,767       9,242,767       3.40 %
Lynx FBO Operating, LLC   (31)                                           Houston, TX                                
Term Loan   (12)   First Lien   3M L+5.75%     1.50 %     7.86 %           9/30/2019   9/30/2024   Aerospace & Defense   $ 13,750,000       13,475,000       13,475,000       4.95 %
Lynx FBO Investments, LLC Class A-1 Common Units   (4)   Equity                               9/30/2019             3,704 shares       500,040       500,040       0.18 %
Total                                                           $ 13,975,040     $ 13,975,040       5.13 %
Madison Logic, Inc.                                               New York, NY                                
Term Loan (SBIC)   (2)(12)   First Lien   1M L+8.00%     0.50 %     10.04 %           11/30/2016   11/30/2021   Media: Broadcasting & Subscription   $ 4,610,087       4,587,629       4,610,087       1.69 %
Madison Logic Holdings, Inc. Common Stock (SBIC)   (2)(4)   Equity                               11/30/2016             5,000 shares       50,000       50,000       0.02 %
Madison Logic Holdings, Inc. Series A Preferred Stock (SBIC)   (2)(4)   Equity                               11/30/2016             4,500 shares       450,000       420,000       0.15 %
Total                                                           $ 5,087,629     $ 5,080,087       1.86 %

 

 9 

 

 

Stellus Capital Investment Corporation

 

Consolidated Schedule of Investments (unaudited)

 

September 30, 2019

 

Mobileum, Inc.                                               Santa Clara, CA                                
Mobile Acquisition Holdings, LP Class A Common Units   (4)   Equity                               11/1/2016       Software     750 units       455,385       1,970,000       0.72 %
Munch's Supply, LLC   (20)                                           New Lenox, IL                                
Term Loan   (12)   First Lien   3M L+6.25%     1.00 %     8.60 %           4/11/2019   4/11/2024   Capital Equipment   $ 7,980,000       7,906,776       7,820,400       2.87 %
Cool Supply Holdings, LLC Class A Common Units   (4)   Equity                               4/11/2019             500,000 units       498,779       420,000       0.15 %
Total                                                           $ 8,405,555     $ 8,240,400       3.02 %
National Trench Safety, LLC, et al                                               Houston, TX                                
Term Loan (SBIC)   (2)   Second Lien   11.50%             11.50 %           3/31/2017   3/31/2022   Construction & Building   $ 10,000,000       9,899,571       10,000,000       3.67 %
NTS Investors, LP Class A Common Units   (4)   Equity                               3/31/2017             2,335 units       500,000       490,000       0.18 %
Total                                                           $ 10,399,571     $ 10,490,000       3.85 %
Naumann/Hobbs Material Handling Corporation II, Inc.   (32)                                           Phoenix, AZ                                
Term Loan (SBIC II)   (9)(12)   First Lien   3M L+6.25%     1.50 %     8.36 %           8/30/2019   8/30/2024   Services: Business   $ 6,000,000       5,881,623       5,881,623       2.16 %
Term Loan   (12)   First Lien   3M L+6.25%     1.50 %     8.36 %           8/30/2019   8/30/2024       $ 9,514,692       9,326,972       9,326,972       3.43 %
CGC NH, Inc. Common Units   (4)   Equity                               8/30/2019             123 shares       440,758       440,758       0.16 %
Total                                                           $ 15,649,353     $ 15,649,353       5.75 %
NGS US Finco, LLC                                               Bradford, PA                                
Term Loan (SBIC)   (2)(12)   Second Lien   1M L+8.50%     1.00 %     10.54 %           10/1/2018   4/1/2026   Utilities: Oil & Gas   $ 10,000,000       9,864,257       9,800,000       3.60 %
NS412, LLC                                               Dallas, TX                                
Term Loan   (12)   Second Lien   3M L+8.50%     1.00 %     10.61 %           5/6/2019   11/6/2025   Services: Consumer   $ 7,615,000       7,469,807       7,424,625       2.73 %
NS Group Holding Company, LLC Class A Common Units   (4)   Equity                               5/6/2019             750 shares       750,000       900,000       0.33 %
Total                                                           $ 8,219,807     $ 8,324,625       3.06 %
Nutritional Medicinals, LLC   (24)                                           Centerville, OH                                
Term Loan   (12)   First Lien   3M L+6.00%     1.00 %     8.11 %           11/15/2018   11/15/2023   Healthcare & Pharmaceuticals   $ 15,383,750       15,123,306       14,845,319       5.45 %
Functional Aggregator, LLC Common Units   (4)   Equity                               11/15/2018             12,500 shares       1,250,000       1,080,000       0.40 %
Total                                                           $ 16,373,306     $ 15,925,319       5.85 %
PCP MT Aggregator Holdings, L.P.                                               Oak Brook, IL                                
Common LP Units   (4)   Equity                               3/29/2019       Finance     750,000 shares       0       750,000       0.28 %
PCS Software, Inc.   (11)(33)                                           Shenandoah, Tx                                
Term Loan (SBIC)   (2)(12)   First Lien   3M L+5.75%     1.50 %     7.86 %           7/1/2019   7/1/2024   Transportation & Logistics   $ 1,995,000       1,956,719       1,956,719       0.72 %
Term Loan   (12)   First Lien   3M L+5.75%     1.50 %     7.86 %           7/1/2019   7/1/2024       $ 15,211,875       14,919,980       14,919,980       5.48 %
PCS Software Holdings, LLC Class A Preferred Units   (4)   Equity                               7/1/2019             325,000 shares       325,000       325,000       0.12 %
Total                                                           $ 17,201,699     $ 17,201,699       6.32 %

 

 10 

 

 

Stellus Capital Investment Corporation

 

Consolidated Schedule of Investments (unaudited)

 

September 30, 2019

 

Premiere Digital Services, Inc.                                               Los Angeles, CA                                
Term Loan (SBIC)   (2)(13)(22)   First Lien   3M L+5.50%     1.50 %     8.87 %           10/18/2018   10/18/2023   Media: Broadcasting & Subscription   $ 8,250,000       8,048,351       7,920,000       2.91 %
Term Loan   (13)(22)   First Lien   3M L+5.50%     1.50 %     8.87 %           10/18/2018   10/18/2023       $ 2,428,772       2,369,408       2,331,621       0.86 %
Premiere Digital Holdings, Inc., Common Stock   (4)   Equity                               10/18/2018             5,000 shares       50,000       50,000       0.02 %
Premiere Digital Holdings, Inc., Preferred Stock   (4)   Equity                               10/18/2018             4,500 shares       450,000       470,000       0.17 %
Total                                                           $ 10,917,759     $ 10,771,621       3.96 %
Price for Profit, LLC   (17)                                           Cleveland, OH                                
Term Loan (SBIC)   (2)(12)   First Lien   3M L+6.50%     1.00 %     8.61 %           1/31/2018   1/31/2023   Services: Business   $ 3,943,829       3,887,843       3,943,829       1.45 %
I2P Holdings, LLC, Series A Preferred   (4)   Equity                               1/31/2018             750,000 shares       750,000       2,680,000       0.98 %
Total                                                           $ 4,637,843     $ 6,623,829       2.43 %
Protect America, Inc.                                               Austin TX                                
Term Loan (SBIC)   (2)(6)(12)(26)   Second Lien   3M L+7.75%     1.00 %     0.00 %           8/30/2017   10/30/2020   Services: Consumer   $ 17,979,749       17,814,850       12,406,027       4.56 %
Skopos Financial, LLC                                               Irving, TX                                
Term Loan   (5)   Unsecured   12.00%             12.00 %           1/31/2014   1/31/2021   Finance   $ 15,500,000       15,500,000       15,345,000       5.64 %
Skopos Financial Group, LLC Series A Preferred Units   (4)(5)   Equity                               1/31/2014             1,120,684 units       1,162,544       1,110,000       0.41 %
Total                                                           $ 16,662,544     $ 16,455,000       6.05 %
Specified Air Solutions, LLC                                               Buffalo, NY