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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)    

ý

 

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

For the quarterly period ended March 31, 2016

OR

o

 

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

For the transition period from:                             to                              

Commission File Number: 001-33723

Main Street Capital Corporation
(Exact name of registrant as specified in its charter)

Maryland
(State or other jurisdiction of
incorporation or organization)
  41-2230745
(I.R.S. Employer
Identification No.)

1300 Post Oak Boulevard, 8th floor
Houston, TX
(Address of principal executive offices)

 

77056
(Zip Code)

(713) 350-6000
(Registrant's telephone number including area code)

n/a
(Former name, former address and former fiscal year, if changed since last report)

        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 ý    No o

        Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 o    No o

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý   Accelerated filer o   Non-accelerated filer o   Smaller reporting company o

        Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No ý

        The number of shares outstanding of the issuer's common stock as of May 5, 2016 was 51,221,175.

   


Table of Contents


TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION

Item 1.

 

Consolidated Financial Statements

   

 

Consolidated Balance Sheets—March 31, 2016 (unaudited) and December 31, 2015

  1

 

Consolidated Statements of Operations (unaudited)—Three months ended March 31, 2016 and 2015

  2

 

Consolidated Statements of Changes in Net Assets (unaudited)—Three months ended March 31, 2016 and 2015

  3

 

Consolidated Statements of Cash Flows (unaudited)—Three months ended March 31, 2016 and 2015

  4

 

Consolidated Schedule of Investments (unaudited)—March 31, 2016

  5

 

Consolidated Schedule of Investments—December 31, 2015

  35

 

Notes to Consolidated Financial Statements (unaudited)

  64

 

Consolidated Financial Statement Schedule

   

 

Consolidated Schedule of Investments in and Advances to Affiliates for the Three Months Ended March 31, 2016

  107

Item 2.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

  111

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

  131

Item 4.

 

Controls and Procedures

  132


PART II
OTHER INFORMATION

Item 1.

 

Legal Proceedings

  133

Item 1A.

 

Risk Factors

  133

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

  133

Item 6.

 

Exhibits

  133

 

Signatures

  134

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

(dollars in thousands, except shares and per share amounts)

 
  March 31,
2016
  December 31,
2015
 
 
  (Unaudited)
   
 

ASSETS

             

Portfolio investments at fair value:

             

Control investments (cost: $361,823 and $387,727 as of March 31,2016 and December 31, 2015, respectively)

  $ 520,099   $ 555,011  

Affiliate investments (cost: $376,375 and $333,728 as of March 31, 2016 and December 31, 2015, respectively)

    389,310     350,519  

Non-Control/Non-Affiliate investments (cost: $974,053 and $945,187 as of March 31, 2016 and December 31, 2015, respectively)

    908,662     894,466  

Total portfolio investments (cost: $1,712,251 and $1,666,642 as of March 31, 2016 and December 31, 2015, respectively)

    1,818,071     1,799,996  

Marketable securities and idle funds investments (cost: $1,778 and $5,407 as of March 31, 2016 and December 31, 2015, respectively)

    1,519     3,693  

Total investments (cost: $1,714,029 and $1,672,049 as of March 31, 2016 and December 31, 2015, respectively)

    1,819,590     1,803,689  

Cash and cash equivalents

    17,223     20,331  

Interest receivable and other assets

    31,786     27,737  

Receivable for securities sold

    11,458     9,901  

Deferred financing costs (net of accumulated amortization of $9,608 and $8,965 as of March 31, 2016 and December 31, 2015, respectively)

    12,651     13,267  

Deferred tax asset, net

    8,442     4,003  

Total assets

  $ 1,901,150   $ 1,878,928  

LIABILITIES

             

Credit facility

  $ 306,000   $ 291,000  

SBIC debentures (par: $225,000 as of March 31, 2016 and December,31, 2015, par of $75,200 is recorded at a fair value of $74,006 and $73,860 as of March 31, 2016 and December 31, 2015, respectively)

    223,806     223,660  

4.50% Notes

    175,000     175,000  

6.125% Notes

    90,655     90,738  

Dividend payable

    9,113     9,074  

Interest payable

    5,185     3,959  

Accounts payable and other liabilities

    5,847     12,292  

Payable for securities purchased

    8,546     2,311  

Total liabilities

    824,152     808,034  

Commitments and contingencies (Note M)

             

NET ASSETS

   
 
   
 
 

Common stock, $0.01 par value per share (150,000,000 shares authorized; 50,767,218 and 50,413,744 shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively)

    508     504  

Additional paid-in capital

    1,026,233     1,011,467  

Accumulated net investment income, net of cumulative dividends of $444,631 and $417,347 as of March 31, 2016 and December 31, 2015, respectively

    7,061     7,181  

Accumulated net realized gain from investments (accumulated net realized gain from investments of $32,608 before cumulative dividends of $68,658 as of March 31, 2016 and accumulated net realized gain from investments of $19,005 before cumulative dividends of $68,658 as of December 31, 2015)

    (36,050 )   (49,653 )

Net unrealized appreciation, net of income taxes

    79,246     101,395  

Total net assets

    1,076,998     1,070,894  

Total liabilities and net assets

  $ 1,901,150   $ 1,878,928  

NET ASSET VALUE PER SHARE

  $ 21.18   $ 21.24  

   

The accompanying notes are an integral part of these financial statements

1


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Operations

(dollars in thousands, except shares and per share amounts)

(Unaudited)

 
  Three Months Ended
March 31,
 
 
  2016   2015  

INVESTMENT INCOME:

             

Interest, fee and dividend income:

             

Control investments

  $ 12,615   $ 11,335  

Affiliate investments

    8,523     6,049  

Non-Control/Non-Affiliate investments

    20,737     19,421  

Interest, fee and dividend income

    41,875     36,805  

Interest, fee and dividend income from marketable securities and idle funds investments

    131     374  

Total investment income

    42,006     37,179  

EXPENSES:

             

Interest

    (8,182 )   (7,796 )

Compensation

    (3,820 )   (3,494 )

General and administrative

    (2,405 )   (1,962 )

Share-based compensation

    (1,589 )   (1,263 )

Expenses allocated to the External Investment Manager

    1,154     827  

Total expenses

    (14,842 )   (13,688 )

NET INVESTMENT INCOME

    27,164     23,491  

NET REALIZED GAIN (LOSS):

   
 
   
 
 

Control investments

    14,358      

Non-Control/Non-Affiliate investments

    818     (2,008 )

Marketable securities and idle funds investments

    (1,573 )   (112 )

Total net realized gain (loss)

    13,603     (2,120 )

NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):

             

Portfolio investments

    (27,529 )   14,204  

Marketable securities and idle funds investments

    1,457     251  

SBIC debentures

    (146 )   (693 )

Total net change in unrealized appreciation (depreciation)

    (26,218 )   13,762  

INCOME TAXES:

             

Federal and state income, excise and other taxes

    (370 )   (376 )

Deferred taxes

    2,633     667  

Income tax benefit (provision)

    2,263     291  

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

  $ 16,812   $ 35,424  

NET INVESTMENT INCOME PER SHARE—BASIC AND DILUTED

  $ 0.54   $ 0.51  

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE—BASIC AND DILUTED

  $ 0.33   $ 0.77  

DIVIDENDS PAID PER SHARE:

             

Regular monthly dividends

  $ 0.540   $ 0.510  

Supplemental dividends

         

Total dividends

  $ 0.540   $ 0.510  

WEIGHTED AVERAGE SHARES OUTSTANDING—BASIC AND DILUTED

    50,549,780     46,080,204  

   

The accompanying notes are an integral part of these financial statements

2


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Changes in Net Assets

(dollars in thousands, except shares)

(Unaudited)

 
  Common Stock    
   
  Accumulated
Net Realized
Gain From
Investments,
Net of Dividends
  Net Unrealized
Appreciation from
Investments,
Net of Income
Taxes
   
 
 
   
  Accumulated
Net Investment
Income, Net
of Dividends
   
 
 
  Number of
Shares
  Par
Value
  Additional
Paid-In
Capital
  Total Net
Asset Value
 

Balances at December 31, 2014

    45,079,150   $ 451   $ 853,606   $ 23,665   $ (20,456 ) $ 82,716   $ 939,982  

Public offering of common stock, net of offering costs

   
4,370,000
   
44
   
127,720
   
   
   
   
127,764
 

Share-based compensation

            1,263                 1,263  

Purchase of vested stock for employee payroll tax withholding

    (1,802 )       (53 )               (53 )

Dividend reinvestment

    116,330     1     3,464                 3,465  

Amortization of directors' deferred compensation

            69                 69  

Issuance of restricted stock, net of forfeited shares

    683                          

Dividends to stockholders

                (24,021 )           (24,021 )

Net increase (loss) resulting from operations

                23,491     (2,120 )   14,053     35,424  

Balances at March 31, 2015

    49,564,361   $ 496   $ 986,069   $ 23,135   $ (22,576 ) $ 96,769   $ 1,083,893  

Balances at December 31, 2015

    50,413,744   $ 504   $ 1,011,467   $ 7,181   $ (49,653 ) $ 101,395   $ 1,070,894  

Cumulative-effect to retained earnings for excess tax benefit

   
   
   
   
   
   
1,806
   
1,806
 

Public offering of common stock, net of offering costs

    321,714     3     9,778                 9,781  

Share-based compensation

            1,589                 1,589  

Dividend reinvestment

    113,631     1     3,255                 3,256  

Amortization of directors' deferred compensation

            144                 144  

Issuance of restricted stock

    900                          

Forfeited shares of terminated employees

    (3,989 )                        

Dividends to stockholders

                (27,284 )           (27,284 )

Net increase (loss) resulting from operations

                27,164     13,603     (23,955 )   16,812  

Balances at March 31, 2016

    50,846,000   $ 508   $ 1,026,233   $ 7,061   $ (36,050 ) $ 79,246   $ 1,076,998  

   

The accompanying notes are an integral part of these financial statements

3


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Cash Flows

(dollars in thousands)

(Unaudited)

 
  Three Months Ended
March 31,
 
 
  2016   2015  

CASH FLOWS FROM OPERATING ACTIVITIES

             

Net increase in net assets resulting from operations

  $ 16,812   $ 35,424  

Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:

             

Investments in portfolio companies

    (113,945 )   (256,046 )

Proceeds from sales and repayments of debt investments in portfolio companies

    69,028     143,122  

Proceeds from sales and return of capital of equity investments in portfolio companies

    21,891     5,952  

Investments in marketable securities and idle funds investments

        (2,047 )

Proceeds from sales and repayments of marketable securities and idle funds investments

    559     1,304  

Net change in net unrealized appreciation (depreciation)

    26,218     (13,762 )

Net realized (gain) loss

    (13,603 )   2,120  

Accretion of unearned income

    (1,921 )   (2,018 )

Payment-in-kind interest

    (1,303 )   (806 )

Cumulative dividends

    (321 )   (376 )

Share-based compensation expense

    1,589     1,263  

Amortization of deferred financing costs

    644     629  

Deferred tax (benefit) provision

    (2,633 )   (291 )

Changes in other assets and liabilities:

             

Interest receivable and other assets

    (2,390 )   (746 )

Interest payable

    1,226     761  

Accounts payable and other liabilities

    (6,269 )   (7,729 )

Deferred fees and other

    632     627  

Net cash used in operating activities

    (3,786 )   (92,619 )

CASH FLOWS FROM FINANCING ACTIVITIES

   
 
   
 
 

Proceeds from public offering of common stock, net of offering costs

    9,781     127,764  

Dividends paid

    (23,990 )   (19,545 )

Proceeds from credit facility

    70,000     156,000  

Repayments on credit facility

    (55,000 )   (210,000 )

Other

    (113 )   (17 )

Net cash provided by financing activities

    678     54,202  

Net decrease in cash and cash equivalents

    (3,108 )   (38,417 )

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

    20,331     60,432  

CASH AND CASH EQUIVALENTS AT END OF PERIOD

  $ 17,223   $ 22,015  

Supplemental cash flow disclosures:

             

Interest paid

  $ 6,282   $ 6,406  

Taxes paid

  $ 1,172   $ 1,934  

Non-cash financing activities:

             

Shares issued pursuant to the DRIP

  $ 3,256   $ 3,465  

   

The accompanying notes are an integral part of these financial statements

4


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments

March 31, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Control Investments(5)

 

 

 

 

                   

                           

Access Media Holdings, LLC(10)

 

Private Cable Operator

 

 

                   

     

5.00% Current / 5.00% PIK Secured Debt (Maturity—July 22, 2020)

  $ 21,825   $ 21,825   $ 20,651  

     

Preferred Member Units (5,265,000 units; 12% cumulative)

          5,159     2,130  

     

Member Units (45 units)

          1      

                  26,985     22,781  

                           

AmeriTech College, LLC

 

For-Profit Nursing and Healthcare College

                       

     

10% Secured Debt (Maturity—May 15, 2016)

    514     514     514  

     

10% Secured Debt (Maturity—November 30, 2019)

    489     489     489  

     

10% Secured Debt (Maturity—January 31, 2020)

    3,025     3,025     3,025  

     

Preferred Member Units (294 units; 5%)(8)

          2,291     2,291  

                  6,319     6,319  

                           

ASC Interests, LLC

 

Recreational and Educational Shooting Facility

 

 

                   

     

11% Secured Debt (Maturity—July 31, 2018)

    2,250     2,225     2,250  

     

Member Units (1,500 units)(8)

          1,500     2,560  

                  3,725     4,810  

                           

Bond-Coat, Inc.

 

Casing and Tubing Coating Services

 

 

                   

     

12% Secured Debt (Maturity—December 28, 2017)

    11,596     11,530     11,596  

     

Common Stock (57,508 shares)

          6,350     7,490  

                  17,880     19,086  

                           

Café Brazil, LLC

 

Casual Restaurant Group

                       

     

Member Units (1,233 units)(8)

          1,742     6,570  

                           

CBT Nuggets, LLC

 

Produces and Sells IT Training Certification Videos

 

 

                   

     

Member Units (416 units)(8)

          1,300     45,750  

                           

CMS Minerals LLC

 

Oil & Gas Exploration & Production

 

 

                   

     

Preferred Member Units (458 units)(8)

          2,530     5,750  

                           

5


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

March 31, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Datacom, LLC

 

Technology and Telecommunications Provider

 

 

                   

     

5.25% Current / 5.25% PIK Secured Debt (Maturity—May 31, 2019)

    11,256     11,178     10,810  

     

Class A Preferred Member Units (15% cumulative)(8)

          1,181     1,224  

     

Class B Preferred Member Units (6,453 units)

          6,030     4,602  

                  18,389     16,636  

                           

Garreco, LLC

 

Manufacturer and Supplier of Dental Products

                       

     

14% Secured Debt (Maturity—January 12, 2018)

    5,800     5,745     5,745  

     

Member Units (1,200 units)

          1,200     1,090  

                  6,945     6,835  

                           

GRT Rubber Technologies LLC

 

Manufacturer of Engineered Rubber Products

                       

     

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—December 19, 2019)(9)

    13,903     13,793     13,903  

     

Member Units (5,879 units)

          13,065     18,030  

                  26,858     31,933  

                           

Gulf Manufacturing, LLC

 

Manufacturer of Specialty Fabricated Industrial Piping Products

 

 

                   

     

9% PIK Secured Debt (Ashland Capital IX, LLC) (Maturity—June 30, 2017)

    777     777     777  

     

Member Units (438 units)(8)

          2,980     10,960  

                  3,757     11,737  

                           

Harrison Hydra-Gen, Ltd.

 

Manufacturer of Hydraulic Generators

                       

     

Common Stock (107,456 shares)

          718     2,700  

                           

Hawthorne Customs and Dispatch Services, LLC

 

Facilitator of Import Logistics, Brokerage, and Warehousing

 

 

                   

     

Member Units (500 units)(8)

          589     280  

     

Member Units (Wallisville Real Estate, LLC) (588,210 units)(8)

          1,215     2,220  

                  1,804     2,500  

                           

6


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

March 31, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

HW Temps LLC

 

Temporary Staffing Solutions

                       

     

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity July 2, 2020)(9)

    9,976     9,888     9,888  

     

Preferred Member Units (3,200 units)(8)

          3,942     4,950  

                  13,830     14,838  

                           

Hydratec, Inc.

 

Designer and Installer of Micro-Irrigation Systems

 

 

                   

     

Common Stock (7,095 shares)(8)

          7,095     15,410  

                           

IDX Broker, LLC

 

Provider of Marketing and CRM Tools for the Real Estate Industry

                       

     

12.5% Secured Debt (Maturity—November 15, 2018)

    11,350     11,286     11,350  

     

Member Units (5,400 units)

          5,606     6,440  

                  16,892     17,790  

                           

Indianapolis Aviation Partners, LLC

 

Fixed Base Operator

                       

     

15% Secured Debt (Maturity—July 15, 2016)

    3,100     3,100     3,100  

     

Warrants (1,046 equivalent units)

          1,129     2,540  

                  4,229     5,640  

                           

Jensen Jewelers of Idaho, LLC

 

Retail Jewelry Store

                       

     

Prime Plus 6.75% (Floor 2.00%), Current Coupon 10.25%, Secured Debt (Maturity—November 14, 2016)(9)

    4,405     4,386     4,405  

     

Member Units (627 units)(8)

          811     5,200  

                  5,197     9,605  

                           

Lamb's Venture, LLC

 

Aftermarket Automotive Services Chain

                       

     

11% Secured Debt (Maturity—May 31, 2018)

    7,849     7,849     7,849  

     

Preferred Equity (non-voting)

          328     328  

     

Member Units (742 units)

          5,273     5,160  

     

9.5% Secured Debt (Lamb's Real Estate Investment I, LLC) (Maturity—October 1, 2025)

    906     906     906  

     

Member Units (Lamb's Real Estate Investment I, LLC) (1,000 units)(8)

          625     1,240  

                  14,981     15,483  

                           

7


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

March 31, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Lighting Unlimited, LLC

 

Commercial and Residential Lighting Products and Design Services

                       

     

8% Secured Debt (Maturity—August 22, 2016)

    1,514     1,514     1,514  

     

Preferred Equity (non-voting)

          434     430  

     

Warrants (71 equivalent units)

          54     30  

     

Member Units (700 units)

          100     260  

                  2,102     2,234  

                           

Marine Shelters Holdings, LLC (LoneStar Marine Shelters)

 

Fabricator of Marine and Industrial Shelters

                       

     

12% PIK Secured Debt (Maturity—December 28, 2017)

    9,330     9,252     8,910  

     

Preferred Member Units (3,810 units)

          5,352     3,801  

                  14,604     12,711  

                           

MH Corbin Holding LLC

 

Manufacturer and distributor of traffic safety products

                       

     

10% Secured Debt (Maturity—August 31, 2020)

    13,825     13,701     13,701  

     

Preferred Member Units (4,000 shares)

          6,000     6,000  

                  19,701     19,701  

                           

Mid-Columbia Lumber Products, LLC

 

Manufacturer of Finger-Jointed Lumber Products

                       

     

10% Secured Debt (Maturity—December 18, 2017)

    1,750     1,750     1,750  

     

12% Secured Debt (Maturity—December 18, 2017)

    3,900     3,900     3,900  

     

Member Units (2,829 units)

          1,244     2,420  

     

9.5% Secured Debt (Mid—Columbia Real Estate, LLC) (Maturity—May 13, 2025)

    870     870     870  

     

Member Units (Mid—Columbia Real Estate, LLC) (250 units)(8)

          250     550  

                  8,014     9,490  

                           

MSC Adviser I, LLC(16)

 

Third Party Investment Advisory Services

                       

     

Member Units (Fully diluted 100.0%)(8)

              27,792  

                           

Mystic Logistics Holdings, LLC

 

Logistics and Distribution Services Provider for Large Volume Mailers

                       

     

12% Secured Debt (Maturity—August 15, 2019)

    9,448     9,292     9,448  

     

Common Stock (5,873 shares)(8)

          2,720     5,390  

                  12,012     14,838  

                           

8


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

March 31, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

NAPCO Precast, LLC

 

Precast Concrete Manufacturing

                       

     

Prime Plus 2.00% (Floor 7.00%), Current Coupon 9.00%, Secured Debt (Maturity—February 1, 2019)(9)

    3,069     3,039     3,069  

     

18% Secured Debt (Maturity—February 1, 2019)

    4,471     4,427     4,471  

     

Member Units (2,955 units)(8)

          2,975     9,060  

                  10,441     16,600  

                           

NRI Clinical Research, LLC

 

Clinical Research Service Provider

                       

     

14% Secured Debt (Maturity—September 8, 2017)

    4,510     4,443     4,443  

     

Warrants (251,723 equivalent units)

          252     380  

     

Member Units (1,454,167 units)

          765     1,422  

                  5,460     6,245  

                           

NRP Jones, LLC

 

Manufacturer of Hoses, Fittings and Assemblies

                       

     

6% Current / 6% PIK Secured Debt (Maturity—December 22, 2016)

    13,293     13,082     13,082  

     

Warrants (14,331 equivalent units)

          817     150  

     

Member Units (50,877 units)

          2,900     490  

                  16,799     13,722  

                           

OMi Holdings, Inc.

 

Manufacturer of Overhead Cranes

                       

     

Common Stock (1,500 shares)

          1,080     14,570  

                           

Pegasus Research Group, LLC (Televerde)

 

Provider of Telemarketing and Data Services

                       

     

Member Units (460 units)(8)

          1,290     8,030  

                           

PPL RVs, Inc.

 

Recreational Vehicle Dealer

                       

     

11.1% Secured Debt (Maturity—July 1, 2016)

    9,710     9,710     9,710  

     

Common Stock (1,962 shares)

          2,150     10,060  

                  11,860     19,770  

                           

Principle Environmental, LLC

 

Noise Abatement Service Provider

                       

     

12% Secured Debt (Maturity—April 30, 2017)

    4,060     4,060     4,060  

     

12% Current / 2% PIK Secured Debt (Maturity—April 30, 2017)

    3,327     3,327     3,327  

     

Preferred Member Units (19,631 units)(8)

          4,663     4,600  

     

Warrants (1,036 equivalent units)

          1,200     120  

                  13,250     12,107  

                           

9


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

March 31, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Quality Lease Service, LLC

 

Provider of Rigsite Accommodation Unit Rentals and Related Services

                       

     

8% PIK Secured Debt (Maturity—June 8, 2020)

    6,664     6,664     6,664  

     

Member Units (1,000 units)

          568     2,638  

                  7,232     9,302  

                           

River Aggregates, LLC

 

Processor of Construction Aggregates

                       

     

Zero Coupon Secured Debt (Maturity—June 30, 2018)

    750     573     573  

     

Member Units (1,150 units)(8)

          1,150     4,090  

     

Member Units (RA Properties, LLC) (1,500 units)

          369     2,440  

                  2,092     7,103  

                           

SoftTouch Medical Holdings LLC

 

Home Provider of Pediatric Durable Medical Equipment

                       

     

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—October 31, 2019)(9)

    8,075     8,014     8,075  

     

Member Units (4,450 units)(8)

          4,930     7,480  

                  12,944     15,555  

                           

The MPI Group, LLC

 

Manufacturer of Custom Hollow Metal Doors, Frames and Accessories

                       

     

9% Secured Debt (Maturity—October 2, 2018)

    2,924     2,921     2,921  

     

Series A Preferred Units (2,500 units; 10% Cumulative)

          2,500     690  

     

Warrants (1,424 equivalent units)

          1,096      

     

Member Units (MPI Real Estate Holdings, LLC) (100% Fully diluted)(8)

          2,300     2,300  

                  8,817     5,911  

                           

Travis Acquisition LLC

 

Manufacturer of Aluminum Trailers

                       

     

12% Secured Debt (Maturity—August 30, 2018)

    3,398     3,360     3,398  

     

Member Units (7,282 units)

          7,100     17,320  

                  10,460     20,718  

                           

Uvalco Supply, LLC

 

Farm and Ranch Supply Store

                       

     

9% Secured Debt (Maturity—January 1, 2019)

    1,207     1,207     1,207  

     

Member Units (2,011 units)(8)

          3,843     5,710  

                  5,050     6,917  

                           

10


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

March 31, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Vision Interests, Inc.

 

Manufacturer / Installer of Commercial Signage

                       

     

13% Secured Debt (Maturity—December 23, 2016)

    3,071     3,057     3,057  

     

Series A Preferred Stock (3,000,000 shares)

          3,000     3,550  

     

Common Stock (1,126,242 shares)

          3,706     211  

                  9,763     6,818  

                           

Ziegler's NYPD, LLC

 

Casual Restaurant Group

                       

     

6.5% Secured Debt (Maturity—October 1, 2019)

    1,000     992     992  

     

12% Secured Debt (Maturity—October 1, 2019)

    500     500     500  

     

14% Secured Debt (Maturity—October 1, 2019)

    2,750     2,750     2,750  

     

Warrants (587 equivalent units)

          600     150  

     

Preferred Member Units (10,072 units)

          2,834     3,400  

                  7,676     7,792  

Subtotal Control Investments (28.6% of total investments at fair value)

  $ 361,823   $ 520,099  

11


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

March 31, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Affiliate Investments(6)

 

 

 

 

                   

                           

AFG Capital Group, LLC

 

Provider of Rent-to-Own Financing Solutions and Services

                       

     

11% Secured Debt (Maturity—November 7, 2019)

  $ 12,960   $ 12,629   $ 12,808  

     

Warrants (42 equivalent units)

          259     530  

     

Member Units (186 units)

          1,200     2,180  

                  14,088     15,518  

                           

Barfly Ventures, LLC(10)

 

Casual Restaurant Group

                       

     

12% Secured Debt (Maturity—August 31, 2020)

    4,121     4,045     3,952  

     

Options (2 equivalent units)

          397     470  

     

Warrant (1 equivalent unit)

          473     240  

                  4,915     4,662  

                           

Boss Industries, LLC

 

Manufacturer and Distributor of Air, Power and Other Industrial Equipment

                       

     

Preferred Member Units (2,242 units)(8)

          2,290     2,450  

                           

Bridge Capital Solutions Corporation

 

Financial Services and Cash Flow Solutions Provider

                       

     

13% Secured Debt (Maturity—April 18, 2017)

    7,000     6,910     7,000  

     

Warrants (22 equivalent shares)

          200     1,380  

                  7,110     8,380  

                           

Buca C, LLC

 

Casual Restaurant Group

                       

     

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—June 30, 2020)(9)

    25,530     25,309     25,530  

     

Preferred Member Units (6 units; 6% cumulative)(8)

          3,766     5,770  

                  29,075     31,300  

                           

CAI Software LLC

 

Provider of Specialized Enterprise Resource Planning Software

                       

     

12% Secured Debt (Maturity—October 10, 2019)

    4,340     4,307     4,340  

     

Member Units (65,356 units)(8)

          654     1,300  

                  4,961     5,640  

                           

CapFusion, LLC

 

Business Lender

                       

     

13% Secured Debt (Maturity—March 25, 2021)

    9,600     8,302     8,302  

     

Warrants (1,600 equivalent units)

          1,200     1,200  

                  9,502     9,502  

                           

12


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

March 31, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Chandler Signs Holdings, LLC(10)

 

Sign Manufacturer

                       

     

12% Secured Debt (Maturity—July 4, 2021)

    4,500     4,456     4,456  

     

Class A Units (1,500,000 units)

          1,500     1,500  

                  5,956     5,956  

                           

Condit Exhibits, LLC

 

Tradeshow Exhibits / Custom Displays Provider

                       

     

Member Units (3,936 units)(8)

          100     1,010  

                           

Congruent Credit Opportunities Funds(12)(13)

 

Investment Partnership

                       

     

LP Interests (Congruent Credit Opportunities Fund II, LP) (Fully diluted 19.8%)(8)

          5,778     1,649  

     

LP Interests (Congruent Credit Opportunities Fund III, LP) (Fully diluted 17.4%)(8)

          12,020     11,903  

                  17,798     13,552  

                           

Daseke, Inc.

 

Specialty Transportation Provider

                       

     

12% Current / 2.5% PIK Secured Debt (Maturity—July 31, 2018)

    21,388     21,156     21,388  

     

Common Stock (19,467 shares)

          5,213     22,660  

                  26,369     44,048  

                           

Dos Rios Partners(12)(13)

 

Investment Partnership

                       

     

LP Interests (Dos Rios Partners, LP) (Fully diluted 20.2%)

          4,174     2,582  

     

LP Interests (Dos Rios Partners—A, LP) (Fully diluted 6.4%)

          1,325     988  

                  5,499     3,570  

                           

East Teak Fine Hardwoods, Inc.

 

Distributor of Hardwood Products

                       

     

Common Stock (6,250 shares)(8)

          480     860  

                           

East West Copolymer & Rubber, LLC

 

Manufacturer of Synthetic Rubbers

                       

     

12% Secured Debt (Maturity—October 17, 2019)

    9,600     9,470     9,470  

     

Warrants (2,510,790 equivalent units)

          50     50  

                  9,520     9,520  

                           

EIG Traverse Co-Investment, L.P.(12)(13)

 

Investment Partnership

                       

     

LP Interests (Fully diluted 6.6%)(8)

          9,805     9,805  

                           

Freeport Financial Funds(12)(13)

 

Investment Partnership

                       

     

LP Interests (Freeport Financial SBIC Fund LP) (Fully diluted 9.3%)(8)

          5,974     5,768  

     

LP Interests (Freeport First Lien Loan Fund III LP) (Fully diluted 6.0%)(8)

          3,564     3,564  

                  9,538     9,332  

                           

13


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

March 31, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Gault Financial, LLC (RMB Capital, LLC)

 

Purchases and Manages Liquidation of Distressed Assets

                       

     

10% Secured Debt (Maturity—November 21, 2016)

    13,046     12,936     10,969  

     

Warrants (29,025 equivalent units)

          400      

                  13,336     10,969  

                           

Glowpoint, Inc.

 

Provider of Cloud Managed Video Collaboration Services

                       

     

8% Secured Debt (Maturity—October 18, 2018)

    400     397     397  

     

12% Secured Debt (Maturity—October 18, 2018)

    9,000     8,934     8,640  

     

Common Stock (7,711,517 shares)

          3,958     3,010  

                  13,289     12,047  

                           

Guerdon Modular Holdings, Inc.

 

Multi-Family and Commercial Modular Construction Company

                       

     

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—August 13, 2019)(9)

    960     946     946  

     

13% Secured Debt (Maturity—August 13, 2019)

    10,400     10,300     10,300  

     

Common Stock (212,033 shares)

          2,983     1,210  

                  14,229     12,456  

                           

Houston Plating and Coatings, LLC

 

Provider of Plating and Industrial Coating Services

                       

     

Member Units (248,082 units)(8)

          996     6,080  

                           

I-45 SLF LLC(12)(13)

 

Investment Partnership

                       

     

Member units (Fully diluted 20.0%; 24.4% profits interest)(8)

          9,200     9,036  

                           

Indianhead Pipeline Services, LLC

 

Provider of Pipeline Support Services

                       

     

12% Secured Debt (Maturity—February 6, 2017)

    5,775     5,660     5,660  

     

Preferred Member Units (33,819 units; 8% cumulative)(8)

          2,320     2,569  

     

Warrants (31,928 equivalent units)

          459      

     

Member Units (14,732 units)

          1      

                  8,440     8,229  

                           

KBK Industries, LLC

 

Manufacturer of Specialty Oilfield and Industrial Products

                       

     

12.5% Secured Debt (Maturity—September 28, 2017)

    5,900     5,878     5,900  

     

Member Units (250 units)(8)

          341     3,510  

                  6,219     9,410  

                           

14


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

March 31, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

L.F. Manufacturing Holdings, LLC(10)

 

Manufacturer of Fiberglass Products

                       

     

Member Units (2,179,001 units)(8)

          2,019     1,670  

                           

MPS Denver, LLC

 

Specialty Card Printing

                       

     

Member Units (13,800 units)

          1,130     840  

                           

OnAsset Intelligence, Inc.

 

Provider of Transportation Monitoring / Tracking Products and Services

                       

     

12% PIK Secured Debt (Maturity—December 31, 2015)(17)

    4,129     4,129     4,129  

     

Preferred Stock (912 shares; 7% cumulative)

          1,981     1,380  

     

Warrants (5,333 equivalent shares)

          1,919      

                  8,029     5,509  

                           

OPI International Ltd.(13)

 

Provider of Man Camp and Industrial Storage Services

                       

     

10% Unsecured Debt (Maturity—April 8, 2018)

    473     473     473  

     

Common Stock (20,766,317 shares)

          1,371     3,200  

                  1,844     3,673  

                           

PCI Holding Company, Inc.

 

Manufacturer of Industrial Gas Generating Systems

                       

     

12% Secured Debt (Maturity—March 31, 2019)

    13,000     12,870     12,870  

     

Preferred Stock (1,500,000 shares; 20% cumulative)(8)

          2,904     4,090  

                  15,774     16,960  

                           

Radial Drilling Services Inc.

 

Oil and Gas Lateral Drilling Technology Provider

                       

     

12% Secured Debt (Maturity—November 22, 2016)(14)

    4,200     3,946     1,505  

     

Warrants (316 equivalent shares)

          758      

                  4,704     1,505  

                           

Rocaceia, LLC (Quality Lease and Rental Holdings, LLC)

 

Provider of Rigsite Accommodation Unit Rentals and Related Services

                       

     

12% Secured Debt (Maturity—January 8, 2018)(14)(18)

    30,785     30,281     250  

     

Preferred Member Units (250 units)

          2,500      

                  32,781     250  

                           

15


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

March 31, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Samba Holdings, Inc.

 

Provider of Intelligent Driver Record Monitoring Software and Services

                       

     

12.5% Secured Debt (Maturity—November 17, 2016)

    23,762     23,684     23,762  

     

Common Stock (170,963 shares)

          2,087     30,220  

                  25,771     53,982  

                           

Tin Roof Acquisition Company

 

Casual Restaurant Group

                       

     

12% Secured Debt (Maturity—November 13, 2018)

    13,889     13,717     13,717  

     

Class C Preferred Stock (Fully diluted 10.0%; 10% cumulative)(8)

          2,539     2,539  

                  16,256     16,256  

                           

UniTek Global Services, Inc.(11)

 

Provider of Outsourced Infrastructure Services

                       

     

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—January 13, 2019)(9)

    2,826     2,826     2,812  

     

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50% / 1.00% PIK, Current Coupon Plus PIK 10.50%, Secured Debt (Maturity—January 13, 2019)(9)

    1,264     1,264     1,258  

     

15% PIK Unsecured Debt (Maturity—July 13, 2019)

    666     666     662  

     

Preferred Stock (4,935,377 shares)

          4,935     5,800  

     

Common Stock (705,054 shares)

              1,120  

                  9,691     11,652  

                           

Universal Wellhead Services Holdings, LLC(10)

 

Provider of Wellhead Equipment, Designs, and Personnel to the Oil & Gas Industry

                       

     

Class A Preferred Units (4,000,000 units; 4.5% cumulative)(8)

          4,000     2,020  

                           

Volusion, LLC

 

Provider of Online Software-as-a-Service eCommerce Solutions

                       

     

10.5% Secured Debt (Maturity—January 26, 2020)

    17,500     16,261     16,261  

     

Preferred Member Units (4,876,670 units)

          14,000     14,000  

     

Warrants (950,618 equivalent units)

          1,400     1,400  

                  31,661     31,661  

Subtotal Affiliate Investments (21.4% of total investments at fair value)

  $ 376,375   $ 389,310  

16


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

March 31, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Non-Control/Non-Affiliate Investments(7)

             

                           

AccuMED Corp.(10)

 

Medical Device Contract Manufacturer

 

 

                   

     

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—October 29, 2020)(9)

  $ 10,352   $ 10,255   $ 10,255  

                           

Adams Publishing Group, LLC(10)

 

Local Newspaper Operator

                       

     

LIBOR Plus 6.75% (Floor 1.00%), Current Coupon 7.75%, Secured Debt (Maturity—November 3, 2020)(9)

    9,263     9,097     9,089  

                           

Ahead, LLC(10)

 

IT Infrastructure Value Added Reseller

                       

     

LIBOR Plus 6.50%, Current Coupon 7.10%, Secured Debt (Maturity—November 2, 2020)

    14,813     14,398     14,442  

                           

Allflex Holdings III Inc.(11)

 

Manufacturer of Livestock Identification Products

                       

     

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—July 19, 2021)(9)

    10,150     10,082     9,757  

                           

AM General LLC(11)

 

Specialty Vehicle Manufacturer

                       

     

LIBOR Plus 9.00% (Floor 1.25%), Current Coupon 10.25%, Secured Debt (Maturity—March 22, 2018)(9)

    2,175     2,145     1,620  

                           

AM3 Pinnacle Corporation(10)

 

Provider of Comprehensive Internet, TV and Voice Services for Multi-Dwelling Unit Properties

                       

     

Common Stock (60,240 shares)

          2,000      

                           

American Seafoods Group, LLC(11)

 

Catcher-Processor of Alaskan Pollock

                       

     

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—August 19, 2021)(9)

    9,875     9,864     9,616  

                           

AMF Bowling Centers, Inc.(11)

 

Bowling Alley Operator

                       

     

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—September 18, 2021)(9)

    7,887     7,786     7,769  

                           

17


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

March 31, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
  Business Description
  Type of Investment(2)(3)
  Principal(4)
  Cost(4)
  Fair Value
 
   

Anchor Hocking, LLC(11)

 

Household Products Manufacturer

                       

     

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—June 4, 2018)(9)

    2,294     2,294     2,128  

     

Member Units (440,620 units)

          4,928     3,084  

                  7,222     5,212  

                           

AP Gaming I, LLC(10)

 

Developer, Manufacturer, and Operator of Gaming Machines

                       

     

LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—December 20, 2020)(9)

    11,314     11,116     10,522  

                           

Apex Linen Service, Inc.

 

Industrial Launderers

                       

     

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—October 30, 2022)(9)

    1,600     1,600     1,600  

     

13% Secured Debt (Maturity—October 30, 2022)

    12,000     11,927     11,927  

                  13,527     13,527  

                           

Applied Products, Inc.(10)

 

Adhesives Distributor

                       

     

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—September 30, 2019)(9)

    4,684     4,642     4,565  

                           

Arcus Hunting LLC.(10)

 

Manufacturer of Bowhunting and Archery Products and Accessories

                       

     

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—November 13, 2019)(9)

    11,973     11,826