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 first fiscal quarter ended March 31, 2026. At this time, all participants are in a listen-only mode. 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. This conference is being recorded today, May 12, 2026. It is now my pleasure to turn the call over to Mr. Robert Ladd, Chief Executive Officer of Stellis Capital Investment Corporation. Mr. Ladd, you may begin your conference.

Okay. Thank you, Holly. Good morning, everyone, and thank you for joining the call. Welcome to our conference call covering the quarter-ended March 31, 2026. We have six topics to cover this morning. First, the financial results for the quarter, portfolio and asset quality, outlook update, opportunities with Rich Vose Capital, our share buyback program, and future growth in the portfolio. 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 the 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 pen provided in our press release announcing this call. I'd also like to call 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 forward-looking statements unless required by law. To obtain copies of our latest SEC filings, please visit our website at www.stelliscapital.com under the Public Investors link, or call us at 713-292-5400. Now we'll cover our operating results for the quarter, but we'd like to start with our life-to-date activity. Since our IPO in November 2012, we've invested approximately $2.8 billion in over 225 companies and received approximately $1.8 billion of repayments while maintaining stable asset quality. We've paid $339 million of dividends to our investors, which represents $18.49 per share to an investor in our IPO in November 2012. In the first quarter, we generated 26 cents per share of GAAP net investment income, and core net investment income was 27 cents per share, which excludes estimated excise taxes. During the quarter, we also realized gains of $750,000 on one equity position, which resulted in total realized income for the quarter of 29 cents per share. Net asset value decreased 28 cents per share during the quarter from two components. The first was $0.08 per share of dividend payments that exceeded earnings, which was necessary to continue to pay out the spillover balance from 2025. The second was a net realized and unrealized loss of $0.20 per share related primarily to debt investments. We ended the quarter with an investment portfolio at fair value of $990 million across 116 portfolio companies, a decrease from $1.01 billion across 115 portfolio companies as of December 31st, 2025. During the first quarter, we invested $18 million in three new portfolio companies and had $9 million in other investment activity at par. We also received three full repayments totaling $35 million, won equity realization, which resulted in a realized gain of $750,000 and received $6.6 million of other repayments. On March 31st, 99% of our loans were secured and 92% were priced at floating rates. The average loan per company is $9 million and the largest overall investment is $18.5 million, both at fair value. Substantially, all of our portfolio companies are backed by a private equity firm. Overall, our asset quality is slightly better than planned. At fair value, 81% of our portfolio is rated a 1 or a 2 or on or ahead of plan, and 19% of the portfolio is marked at an investment category of 3 or below, meaning not meeting plan or expectations. We added one new loan to our non-accrual list during the quarter. Currently, we have six loans of loans to six portfolio companies on non-accrual, which comprise 9.2% of the total cost and 5.2% of the fair value of the total investment portfolio, respectively, which represents a slight increase from the prior quarter. We recognize that the level of non-accrual loans is higher than we would like. We're focused on reducing the number and dollar magnitude of these loans. We're actively working each position and are making progress in exiting the positions or bringing them back onto an accrual status. There's been much speculation about the impact of artificial intelligence on large scale SaaS software industry. As we mentioned on our last call, Stellis does not have exposure to the large scale SaaS software sector. We do have portfolio companies in the software and information they provide, and many cases deal with proprietary data. We believe AI will enable these in many of our portfolio companies across a variety of industry sectors to improve the speed of information. Each of these companies is rated on our risk rating system as either a 1 or 2, meaning on plan or ahead of plan. And now I'd like to turn the call back over to Rob to cover a number of other topics.