Stellus Capital Investment Corporation

Good morning, ladies and gentlemen, and thank you for standing by. At this time, I would like to welcome everyone to Stellis Capital Investment Corporation's conference call to report financial results for its second fiscal quarter, ended June 30th, 2025. At this time, all participants are on a listen-only mode, and a question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded today, August 7th, 2025. It is now my pleasure to turn the floor over to Mr. Robert Ladd, Chief Executive Officer of Stellis Capital Investment Corporation. Mr. Ladd, you may begin your conference.

Yeah, thank you, Ali. Good morning, everyone, and thank you for joining our call. Welcome to our conference call covering the quarter ended June 30, 2025. Joining me this morning is Todd Huskinson, our Chief Financial Officer, who will cover important information about forward-looking statements, as well as an overview of our financial information.

Thank you, Rob. I'd like to remind everyone that today's call is being recorded. Please note that this call is the property of Stellis Capital Investment Corporation and that any unauthorized broadcast of this call in any form is strictly prohibited. Audio replay of the call will be available by using the telephone number and PIN provided in our press release announcing this call. I'd also like to turn your attention to the customary safe harbor disclosure in our press release regarding forward-looking information. Today's conference call may also include forward-looking statements and projections, and we ask that you refer to our most recent filing with the SEC for important factors that could cause actual results to differ materially from these projections. We will not update any forward-looking statements unless required by law. To obtain copies of our latest SEC filings, please visit our website at www.selluscapital.com under the Public Investors link or call us at 713-292-5400. Now I'll cover operating results for the quarter, but I'd like to start with our life-to-date activity. Since our IPO in November 2012, we've invested approximately $2.7 billion in over 210 companies. and received approximately $1.7 billion of repayments, while maintaining stable asset quality. We've paid $306 million of dividends to our investors, which represents $17.35 per share, to an investor in our IPO in November 2012, which was offered at $15 per share. Turning now to the quarterly operating results, In the second quarter, we generated $0.34 per share of GAAP net investment income, and core net investment income was $0.35 per share, which excludes estimated excise taxes. Net asset value per share decreased $0.04 during the quarter due to the reduction in spillover income. During the quarter, we issued approximately 300,000 shares for $3.9 million of proceeds under our ATM program. Year to date, we've issued approximately 900,000 shares $13.2 million, and all issuances were above net asset value. Turning to portfolio and asset quality, we ended the quarter with an investment portfolio at fair value of $985.9 million across 112 portfolio companies, slightly down from $991 million across 110 companies as of March 31st, 2025. During the second quarter, we invested $15.4 million in three new portfolio companies and had $7.4 million in other investment activity at par. We also received two full repayments totaling $21.7 million, one equity realization totaling $500,000, which resulted in a realized gain of $200,000. And we received $10.4 million of other repayments all at par. On June 30th, 98% of our loans were secured and 91% were priced at floating rates. The average loan per company is $9.2 million, and the largest overall investment is $21.2 million, both at fair value. All but one of our portfolio companies are backed by a private equity fund. Overall, our asset quality is slightly better than planned. At fair value, 84% of our portfolio is rated a 1 or a 2 or on or ahead of plan, and 16% of the portfolio is marked in an investment category of 3 or below, meaning not meeting plan or expectations. We did not add any new loans to our non-accrual list during the quarter. Currently, we have loans to five portfolio companies on non-accrual, which comprise 6.8% of the total cost and 3.8% of the fair value of the total loan portfolio, respectively, which represents a decrease from the prior quarter. With respect to capital, as a reminder, we've received a green light letter from the Small Business Administration for sellers capital SBIC3, This is an important step in the process, and we therefore expect to receive a license, although it's not guaranteed. In general, as our existing debentures are repaid, we intend to draw new leverage under the SBIC3 license to continue funding qualifying portfolio company investments. And with that, I'll turn it back over to Rob to discuss the overall outlook.