SHAREHOLDER ALERT:Pomerantz Law Firm Reminds Shareholders with Losses on their Investment in Capitala Finance Corporation of Class Action Lawsuit and Upcoming Deadline

NEW YORK, Feb 10, 2018 (BUSINESS WIRE) —
Pomerantz LLP announces that a class action lawsuit has been filed
against Capitala Finance Corporation (“Capitala” or the “Company”)

CPTA, -1.74%

and certain of its officers. The class action, filed in
United States District Court, for the Central District of California,
Western Division, and docketed under 18-cv-00052, is on behalf of a
class consisting of investors who purchased or otherwise acquired
Capitala securities, seeking to recover compensable damages caused by
defendants’ violations of the Securities Exchange Act of 1934.

If you are a shareholder who purchased Capitala securities between
January 4, 2016, and August 7, 2017, both dates inclusive, you have
until February 26, 2018, to ask the Court to appoint you as Lead
Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com.
To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com
or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who
inquire by e-mail are encouraged to include their mailing address,
telephone number, and the number of shares purchased.

[Click
here to join this class action]

Capitala Finance Corporation is a business development company that
invests primarily in first and second liens, subordinated debt and, to a
lesser extent, equity securities issued by lower and traditional
middle-market companies.

Capitala Investment Advisors, LLC (“Capitala Investment Advisors”)
manages the Company’s investment activities. The Company’s Board of
Directors supervises the Company’s investment activities. The Company’s
executive officers are part of Capitala Investment Advisors’ management
team.

Under the Company’s investment advisory agreement with Capitala
Investment Advisors (the “Investment Advisory Agreement”), the Company
pays Capitala Investment Advisors an annual base management fee based on
the Company’s gross assets as well as an incentive fee based on the
Company’s performance.

On January 4, 2016, the Company announced that Capitala Investment
Advisors agreed to voluntarily waive its quarterly incentive fee.

The Complaint alleges that throughout the Class Period, Defendants made
materially false and misleading statements regarding the Company’s
business, operational and compliance policies. Specifically, Defendants
made false and/or misleading statements and/or failed to disclose that:
(i) Capitala Investment Advisors had been losing professional talent in
both underwriting and portfolio management due to the waiving of its
incentive fee; (ii) such loss of talent negatively impacted the quality
of the Company’s investment portfolio; and (iii) as a result, Capitala’s
public statements were materially false and misleading at all relevant
times.

On August 7, 2017, the Company revealed during aftermarket hours that
six of its investments were on non-accrual status—twice as many as in
the previous quarter.

On August 8, 2017, the Company’s Chief Executive Officer Joseph B. Alala
III revealed that Capitala Investment Advisors had been losing
professional talent in underwriting and portfolio management since
waiving its incentive fee, which resulted in a rising number of
nonaccrual investments.

On this news, shares of the Company fell $3.82 per share, or
approximately 30%, over the next three trading days to close at $8.99
per share on August 10, 2017, damaging investors.

The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and
Paris, is acknowledged as one of the premier firms in the areas of
corporate, securities, and antitrust class litigation. Founded by the
late Abraham L. Pomerantz, known as the dean of the class action bar,
the Pomerantz Firm pioneered the field of securities class actions.
Today, more than 80 years later, the Pomerantz Firm continues in the
tradition he established, fighting for the rights of the victims of
securities fraud, breaches of fiduciary duty, and corporate misconduct.
The Firm has recovered numerous multimillion-dollar damages awards on
behalf of class members. See www.pomerantzlaw.com

View source version on businesswire.com: http://www.businesswire.com/news/home/20180210005032/en/

SOURCE: Pomerantz LLP

Pomerantz LLP
Robert S. Willoughby, 888-476-6529 Ext. 9980
rswilloughby@pomlaw.com

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