Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

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

 

For the quarterly period ended June 30, 2010

 

OR

 

£         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

 

41-2230745

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

 

1300 Post Oak Boulevard, Suite 800

 

 

Houston, TX

 

77056

(Address of principal executive offices)

 

(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 x No £

 

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 £ No £

 

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 £

 

Accelerated filer x

 

 

 

Non-accelerated filer £

 

Smaller reporting company £

 

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 outstanding of the issuer’s common stock as of August 5, 2010 was 15,387,474.

 

 

 



Table of Contents

 

TABLE OF CONTENTS

 

PART I

FINANCIAL INFORMATION

 

 

 

Item 1.

Financial Statements

 

 

 

 

 

Consolidated Balance Sheets — June 30, 2010 (unaudited) and December 31, 2009

2

 

 

 

 

Consolidated Statements of Operations (unaudited) — Three and six months ended June 30, 2010 and 2009

3

 

 

 

 

Consolidated Statements of Changes in Net Assets (unaudited) — Six months ended June 30, 2010 and 2009

4

 

 

 

 

Consolidated Statements of Cash Flows (unaudited) — Six months ended June 30, 2010 and 2009

5

 

 

 

 

Consolidated Schedule of Investments (unaudited) — June 30, 2010

6

 

 

 

 

Consolidated Schedule of Investments — December 31, 2009

13

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

18

 

 

 

Item 2.

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

38

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

55

 

 

 

Item 4.

Controls and Procedures

55

 

 

 

PART II
OTHER INFORMATION

 

 

 

Item 1.

Legal Proceedings

55

 

 

 

Item 1A.

Risk Factors

55

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

55

 

 

 

Item 6.

Exhibits

56

 

 

 

 

Signatures

57

 



Table of Contents

 

PART I — FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

1



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

 

 

 

June 30, 2010

 

December 31, 2009

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Portfolio investments at fair value:

 

 

 

 

 

Control investments (cost: $162,917,430 and $59,544,719 as of June 30, 2010 and December 31, 2009, respectively)

 

$

172,397,494

 

$

66,400,667

 

Affiliate investments (cost: $56,781,172 and $39,252,445 as of June 30, 2010 and December 31, 2009, respectively)

 

68,844,498

 

46,886,202

 

Non-Control/Non-Affiliate investments (cost: $65,260,055 and $27,482,826 as of June 30, 2010 and December 31, 2009, respectively)

 

64,211,930

 

27,416,287

 

Investment in affiliated Investment Manager (cost: $4,284,042 and $18,000,000 as of June 30, 2010 and December 31, 2009, respectively)

 

2,034,684

 

16,036,838

 

 

 

 

 

 

 

Total portfolio investments (cost: $289,242,699 and $144,279,990 as of June 30, 2010 and December 31, 2009, respectively)

 

307,488,606

 

156,739,994

 

Marketable securities and idle funds investments (cost: $15,131,509 and $3,252,954 as of June 30, 2010 and December 31, 2009, respectively)

 

14,900,228

 

3,252,954

 

 

 

 

 

 

 

Total investments (cost: $304,374,208 and $147,532,944 as of June 30, 2010 and December 31, 2009, respectively)

 

322,388,834

 

159,992,948

 

 

 

 

 

 

 

Cash and cash equivalents

 

4,730,165

 

30,619,998

 

Deferred tax asset

 

2,633,758

 

2,716,400

 

Interest receivable and other assets

 

3,311,579

 

1,509,608

 

Deferred financing costs (net of accumulated amortization of $1,267,546 and $1,071,676 as of June 30, 2010 and December 31, 2009, respectively)

 

1,425,950

 

1,611,508

 

 

 

 

 

 

 

Total assets

 

$

334,490,286

 

$

196,450,462

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

SBIC debentures (par: $145,000,000 and $65,000,000 as of June 30, 2010 and December 31, 2009, respectively; of which $61,139,538 is recorded at fair value as of June 30, 2010)

 

$

126,139,538

 

$

65,000,000

 

Line of credit

 

12,500,000

 

 

Interest payable

 

2,646,143

 

1,069,148

 

Dividend payable

 

1,901,630

 

 

Payable to affiliated Investment Manager

 

601,853

 

217,422

 

Accounts payable and other liabilities

 

1,262,193

 

503,761

 

 

 

 

 

 

 

Total liabilities

 

145,051,357

 

66,790,331

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

NET ASSETS

 

 

 

 

 

 

 

 

 

 

 

Common stock, $0.01 par value per share (150,000,000 shares authorized; 15,213,053 and 10,842,447 issued and outstanding as of June 30, 2010 and December 31, 2009, respectively)

 

152,130

 

108,425

 

Additional paid-in capital

 

174,375,323

 

123,534,156

 

Accumulated net investment income

 

8,791,262

 

7,269,866

 

Accumulated net realized gain (loss) from investments

 

(18,677,108

)

(15,922,020

)

Net unrealized appreciation from investments, net of income taxes

 

21,151,217

 

14,669,704

 

 

 

 

 

 

 

Total Net Asset Value

 

185,792,824

 

129,660,131

 

 

 

 

 

 

 

Noncontrolling interest

 

3,646,105

 

 

 

 

 

 

 

 

Total net assets including noncontrolling interests

 

189,438,929

 

129,660,131

 

 

 

 

 

 

 

Total liabilities and net assets

 

$

334,490,286

 

$

196,450,462

 

 

 

 

 

 

 

NET ASSET VALUE PER SHARE

 

$

12.21

 

$

11.96

 

 

The accompanying notes are an integral part of these financial statements

 

2



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Operations

(Unaudited)

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

INVESTMENT INCOME:

 

 

 

 

 

 

 

 

 

Interest, fee and dividend income:

 

 

 

 

 

 

 

 

 

Control investments

 

$

4,532,343

 

$

1,831,201

 

$

8,127,651

 

$

3,833,821

 

Affiliate investments

 

1,953,832

 

1,166,501

 

3,762,445

 

2,335,557

 

Non-Control/Non-Affiliate investments

 

1,686,032

 

258,218

 

2,549,428

 

396,173

 

Total interest, fee and dividend income

 

8,172,207

 

3,255,920

 

14,439,524

 

6,565,551

 

Interest from marketable securities, idle funds and other

 

560,012

 

344,150

 

1,385,534

 

626,944

 

Total investment income

 

8,732,219

 

3,600,070

 

15,825,058

 

7,192,495

 

EXPENSES:

 

 

 

 

 

 

 

 

 

Interest

 

(2,111,868

)

(941,577

)

(4,105,105

)

(1,872,912

)

General and administrative

 

(246,194

)

(430,114

)

(671,898

)

(744,787

)

Expenses reimbursed to affiliated Investment Manager

 

(1,330,611

)

(45,513

)

(2,482,798

)

(79,938

)

Share-based compensation

 

(301,458

)

(195,726

)

(602,916

)

(391,452

)

Total expenses

 

(3,990,131

)

(1,612,930

)

(7,862,717

)

(3,089,089

)

NET INVESTMENT INCOME

 

4,742,088

 

1,987,140

 

7,962,341

 

4,103,406

 

 

 

 

 

 

 

 

 

 

 

NET REALIZED GAIN (LOSS) FROM INVESTMENTS:

 

 

 

 

 

 

 

 

 

Control investments

 

2,301,745

 

98,050

 

(1,719,173

)

865,651

 

Marketable securities and idle funds investments

 

353,487

 

328,220

 

313,948

 

454,843

 

Total net realized gain (loss) from investments

 

2,655,232

 

426,270

 

(1,405,225

)

1,320,494

 

NET REALIZED INCOME

 

7,397,320

 

2,413,410

 

6,557,116

 

5,423,900

 

 

 

 

 

 

 

 

 

 

 

NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):

 

 

 

 

 

 

 

 

 

Portfolio investments

 

957,432

 

1,951,647

 

6,072,091

 

(1,453,901

)

Marketable securities and idle funds investments

 

(484,585

)

182,969

 

(231,281

)

(171,091

)

SBIC debentures

 

1,475,861

 

 

1,757,054

 

 

Investment in affiliated Investment Manager

 

(141,117

)

(283,277

)

(286,196

)

55,318

 

Total net change in unrealized appreciation (depreciation)

 

1,807,591

 

1,851,339

 

7,311,668

 

(1,569,674

)

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

(36,686

)

(525,612

)

(421,260

)

(582,887

)

Bargain purchase gain

 

 

 

4,890,582

 

 

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

 

9,168,225

 

3,739,137

 

18,338,106

 

3,271,339

 

Noncontrolling interest

 

(295,559

)

 

(408,895

)

 

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ATTRIBUTABLE TO COMMON STOCK

 

$

8,872,666

 

$

3,739,137

 

$

17,929,211

 

$

3,271,339

 

 

 

 

 

 

 

 

 

 

 

NET INVESTMENT INCOME PER SHARE - BASIC AND DILUTED

 

$

0.31

 

$

0.21

 

$

0.53

 

$

0.44

 

NET REALIZED INCOME PER SHARE - BASIC AND DILUTED

 

$

0.49

 

$

0.25

 

$

0.44

 

$

0.58

 

DIVIDENDS PAID PER SHARE

 

$

0.38

 

$

0.38

 

$

0.75

 

$

0.75

 

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ATTRIBUTABLE TO COMMON STOCK PER SHARE - BASIC AND DILUTED

 

$

0.59

 

$

0.39

 

$

1.22

 

$

0.35

 

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED

 

15,147,091

 

9,520,314

 

14,754,121

 

9,323,968

 

 

The accompanying notes are an integral part of these financial statements

 

3



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Changes in Net Assets

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Unrealized

 

 

 

 

 

Total Net

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

Appreciation from

 

 

 

 

 

Assets

 

 

 

Common Stock

 

Additional

 

Accumulated

 

Net Realized

 

Investments,

 

 

 

 

 

Including

 

 

 

Number

 

Par

 

Paid-In

 

Net Investment

 

Gain (Loss)

 

Net of Income

 

Total Net

 

Noncontrolling

 

Noncontrolling

 

 

 

of Shares

 

Value

 

Capital

 

Income

 

From Investments

 

Taxes

 

Asset Value

 

Interest

 

Interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31, 2008

 

9,206,483

 

$

92,065

 

$

104,467,740

 

$

10,155,593

 

$

(6,497,098

)

$

4,137,756

 

$

112,356,056

 

$

 

$

112,356,056

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend reinvestment

 

79,193

 

791

 

979,785

 

 

 

 

980,576

 

 

980,576

 

Public offering of common stock, net of offering costs

 

1,437,500

 

14,375

 

16,200,919

 

 

 

 

16,215,294

 

 

16,215,294

 

Share repurchase program

 

(164,544

)

(1,645

)

(1,615,461

)

 

 

 

(1,617,106

)

 

(1,617,106

)

Share-based compensation

 

 

 

391,452

 

 

 

 

391,452

 

 

391,452

 

Dividends to stockholders

 

 

 

 

(6,304,083

)

(712,843

)

 

(7,016,926

)

 

(7,016,926

)

Net increase resulting from operations

 

 

 

 

4,103,406

 

1,320,494

 

(2,152,561

)

3,271,339

 

 

3,271,339

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at June 30, 2009

 

10,558,632

 

$

105,586

 

$

120,424,435

 

$

7,954,916

 

$

(5,889,447

)

$

1,985,195

 

$

124,580,685

 

$

 

$

124,580,685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31, 2009

 

10,842,447

 

$

108,425

 

$

123,534,156

 

$

7,269,866

 

$

(15,922,020

)

$

14,669,704

 

$

129,660,131

 

$

 

$

129,660,131

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MSC II exchange offer and related transactions

 

1,246,803

 

12,468

 

20,080,623

 

4,890,582

 

 

 

24,983,673

 

3,237,210

 

28,220,883

 

Public offering of common stock, net of offering costs

 

2,875,000

 

28,750

 

40,079,845

 

 

 

 

40,108,595

 

 

40,108,595

 

Share-based compensation

 

 

 

602,916

 

 

 

 

602,916

 

 

602,916

 

Dividend reinvestment

 

248,803

 

2,487

 

3,793,741

 

 

 

 

3,796,228

 

 

3,796,228

 

Adjustment to investment in Investment Manager related to the MSC II Exchange Offer

 

 

 

(13,715,958

)

 

 

 

(13,715,958

)

 

(13,715,958

)

Dividends to stockholders

 

 

 

 

(11,331,527

)

(1,349,863

)

 

(12,681,390

)

 

(12,681,390

)

Net increase resulting from operations

 

 

 

 

7,962,341

 

(1,405,225

)

6,890,408

 

13,447,524

 

 

13,447,524

 

Noncontrolling interest

 

 

 

 

 

 

(408,895

)

(408,895

)

408,895

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at June 30, 2010

 

15,213,053

 

$

152,130

 

$

174,375,323

 

$

8,791,262

 

$

(18,677,108

)

$

21,151,217

 

$

185,792,824

 

$

3,646,105

 

$

189,438,929

 

 

The accompanying notes are an integral part of these financial statements

 

4



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2010

 

2009

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

Net increase in net assets resulting from operations:

 

$

18,338,106

 

$

3,271,339

 

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

 

 

 

 

 

Net change in unrealized (appreciation) depreciation

 

(7,311,668

)

1,569,674

 

Net realized (gain) loss from investments

 

1,405,225

 

(1,320,494

)

Bargain purchase gain

 

(4,890,582

)

 

Accretion of unearned income

 

(1,092,705

)

(309,996

)

Net payment-in-kind interest accrual

 

(429,153

)

(291,475

)

Share-based compensation expense

 

602,916

 

391,452

 

Amortization of deferred financing costs

 

195,868

 

202,054

 

Deferred taxes

 

(185

)

743,676

 

Changes in other assets and liabilities:

 

 

 

 

 

Interest receivable and other assets

 

(1,204,605

)

(527,092

)

Interest payable

 

233,897

 

1,875

 

Accounts payable to investment manager

 

384,431

 

 

Accounts payable and other liabilities

 

431,922

 

(707,916

)

Net cash provided by operating activities

 

6,663,467

 

3,023,097

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

Investments in portfolio companies

 

(85,049,545

)

(6,613,657

)

Investments in marketable securities and idle funds investments

 

(30,734,400

)

(31,842,149

)

Cash acquired in MSC II exchange offer

 

2,489,920

 

 

Proceeds from marketable securities and idle funds investments

 

19,546,235

 

20,517,609

 

Principal payments received on loans and debt securities

 

2,670,737

 

4,778,280

 

Proceeds from sale of equity securities and related notes

 

3,151,500

 

 

Net cash used in investing activities

 

(87,925,553

)

(13,159,917

)

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

Share repurchase program

 

 

(1,617,106

)

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

 

40,108,595

 

16,345,401

 

Dividends paid to stockholders

 

(6,983,532

)

(5,842,991

)

Net change in DRIP deposit

 

 

400,000

 

Proceeds from issuance of SBIC debentures

 

10,000,000

 

 

Proceeds from line of credit

 

30,650,000

 

 

Repayments on line of credit

 

(18,150,000

)

 

Payment of deferred loan costs and SBIC debenture fees

 

(252,810

)

(110,423

)

Net cash provided by financing activities

 

55,372,253

 

9,174,881

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

(25,889,833

)

(961,939

)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

30,619,998

 

35,374,826

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

4,730,165

 

$

34,412,887

 

 

The accompanying notes are an integral part of these financial statements

 

5



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2010

 

Portfolio Company/Type of Investment (1) (2)

 

Industry

 

Principal (6)

 

Cost (6)

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Control Investments (3)

 

 

 

 

 

 

 

 

 

PPL RVs, Inc.

 

RV Aftermarket Consignment/Parts

 

 

 

 

 

 

 

18% Secured Debt (Maturity - June 10, 2015)

 

 

6,250,000

 

6,159,249

 

6,159,249

 

Member Units (Fully diluted 53.3%)

 

 

 

 

 

2,150,000

 

2,150,000

 

 

 

 

 

 

 

8,309,249

 

8,309,249

 

 

 

 

 

 

 

 

 

 

 

Advantage Millwork Company, Inc.

 

Manufacturer/Distributor of Wood Doors

 

 

 

 

 

 

 

12% Secured Debt (Maturity - February 5, 2012)

 

 

7,666,667

 

4,770,657

 

3,000,000

 

Warrants (Fully diluted 30.5%)

 

 

 

 

 

97,808

 

 

 

 

 

 

 

 

4,868,465

 

3,000,000

 

 

 

 

 

 

 

 

 

 

 

Café Brazil, LLC

 

Casual Restaurant Group

 

 

 

 

 

 

 

12% Secured Debt (Maturity - April 20, 2011)

 

 

2,350,000

 

2,342,702

 

2,350,597

 

Member Units (7) (Fully diluted 41.0%)

 

 

 

 

 

41,837

 

1,770,000

 

 

 

 

 

 

 

2,384,539

 

4,120,597

 

 

 

 

 

 

 

 

 

 

 

California Healthcare Medical Billing, Inc.

 

Healthcare Billing and Records Management

 

 

 

 

 

 

 

12% Secured Debt (Maturity - October 17, 2013)

 

 

2,410,000

 

2,366,342

 

2,366,342

 

12% Current / 6% PIK Secured Debt (Maturity - October 17, 2013)

 

 

2,303,000

 

2,058,223

 

2,129,333

 

Common Stock (Fully diluted 9.8%)

 

 

 

 

 

1,176,667

 

1,460,000

 

Warrants (Fully diluted 19.6%)

 

 

 

 

 

1,093,333

 

3,410,333

 

 

 

 

 

 

 

6,694,565

 

9,366,008

 

 

 

 

 

 

 

 

 

 

 

CBT Nuggets, LLC

 

Produces and Sells IT Certification Training Videos

 

 

 

 

 

 

 

14% Secured Debt (Maturity - December 31, 2013)

 

 

2,800,000

 

2,784,162

 

2,800,000

 

10% Secured Debt (Maturity - March 31, 2012)

 

 

1,175,000

 

1,175,000

 

1,175,000

 

Member Units (7) (Fully diluted 39.9%)

 

 

 

 

 

1,299,520

 

3,110,000

 

 

 

 

 

 

 

5,258,682

 

7,085,000

 

 

 

 

 

 

 

 

 

 

 

Ceres Management, LLC (Lambs)

 

Aftermarket Automotive Services Chain

 

 

 

 

 

 

 

14% Secured Debt (Maturity - May 31, 2013)

 

 

4,000,000

 

3,958,653

 

3,958,653

 

Member Units (Fully diluted 70%)

 

 

 

 

1,813,333

 

1,970,000

 

Class B Member Units (15% cumulative compounding quarterly) (Non-voting)

 

 

 

 

 

922,076

 

922,076

 

9.5% Secured Debt (Lamb’s Real Estate Investment I, LLC) (Maturity - August 31, 2014)

 

 

 

1,125,000

 

1,125,000

 

1,125,000

 

Member Units (7) (Lamb’s Real Estate Investment I, LLC) (Fully diluted 100%)

 

 

 

 

 

625,000

 

625,000

 

 

 

 

 

 

 

8,444,062

 

8,600,729

 

 

 

 

 

 

 

 

 

 

 

Condit Exhibits, LLC

 

Tradeshow Exhibits/Custom Displays

 

 

 

 

 

 

 

9% current / 9% PIK Secured Debt (Maturity - July 1, 2013)

 

 

4,452,182

 

4,404,678

 

4,404,678

 

Warrants (Fully diluted 46.9%)

 

 

 

 

 

320,000

 

50,000

 

 

 

 

 

 

 

4,724,678

 

4,454,678

 

 

 

 

 

 

 

 

 

 

 

Currie Acquisitions, LLC

 

 

 

 

 

 

 

 

 

12% Secured Debt (Maturity - March 1, 2015)

 

Manufacturer of Electric Bicycles/Scooters

 

4,750,000

 

3,909,638

 

3,909,638

 

Warrants (Fully diluted 47.3%)

 

 

 

 

2,566,204

 

2,566,204

 

 

 

 

 

 

 

6,475,842

 

6,475,842

 

 

 

 

 

 

 

 

 

 

 

Gulf Manufacturing, LLC

 

Industrial Metal Fabrication

 

 

 

 

 

 

 

8% Secured Debt (Maturity - August 31, 2014)

 

 

4,300,000

 

4,300,000

 

4,300,000

 

13% Secured Debt (Maturity - August 31, 2012)

 

 

 

2,000,000

 

1,956,075

 

1,995,238

 

9% PIK Secured Debt (Maturity - June 30, 2017)

 

 

 

1,420,784

 

1,420,784

 

1,420,784

 

Member Units (7) (Fully diluted 34.2%)

 

 

 

 

 

2,979,813

 

4,382,078

 

 

 

 

 

 

 

10,656,672

 

12,098,100

 

 

 

 

 

 

 

 

 

 

 

Harrison Hydra-Gen, Ltd.

 

Manufacturer of Hydraulic Generators

 

 

 

 

 

 

 

12% Secured Debt (Maturity - June 4, 2015)

 

 

6,000,000

 

5,199,216

 

5,199,216

 

Warrants (Fully diluted 35.2%)

 

 

 

 

717,640

 

717,640

 

Mandatorily Redeemable Preferred Stock

 

 

 

 

 

1,000,000

 

1,000,000

 

 

 

 

 

 

 

6,916,856

 

6,916,856

 

 

6



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2010

 

Portfolio Company/Type of Investment (1) (2)

 

Industry

 

Principal (6)

 

Cost (6)

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Control Investments (3)

 

 

 

 

 

 

 

 

 

Hawthorne Customs & Dispatch Services, LLC

 

Transportation/ Logistics

 

 

 

 

 

 

 

Member Units (7) (Fully diluted 59.2%)

 

 

 

 

 

692,500

 

990,000

 

Member Units (Wallisville Real Estate, LLC) (7) (Fully diluted 59.2%)

 

 

 

 

 

1,214,784

 

1,214,784

 

 

 

 

 

 

 

1,907,284

 

2,204,784

 

 

 

 

 

 

 

 

 

 

 

Hydratec Holdings, LLC

 

Agricultural Services

 

 

 

 

 

 

 

12.5% Secured Debt (Maturity - October 31, 2012)

 

 

 

2,995,244

 

2,963,459

 

2,963,459

 

Prime plus 1% Secured Debt (Maturity - October 31, 2012)

 

 

 

350,000

 

339,667

 

339,667

 

Member Units (Fully diluted 85.1%)

 

 

 

 

 

4,100,000

 

6,190,000

 

 

 

 

 

 

 

7,403,126

 

9,493,126

 

 

 

 

 

 

 

 

 

 

 

Indianapolis Aviation Partners, LLC

 

FBO / Aviation Support Services

 

 

 

 

 

 

 

12% Secured Debt (Maturity - September 15, 2014)

 

 

4,500,000

 

4,104,892

 

4,350,000

 

Warrants (Fully diluted 30.2%)

 

 

 

 

 

1,129,286

 

1,480,286

 

 

 

 

 

 

 

5,234,178

 

5,830,286

 

 

 

 

 

 

 

 

 

 

 

Jensen Jewelers of Idaho, LLC

 

Retail Jewelry

 

 

 

 

 

 

 

Prime Plus 2% Secured Debt (Maturity - November 14, 2011)

 

 

 

2,610,000

 

2,603,599

 

2,610,000

 

13% current / 6% PIK Secured Debt (Maturity - November 14, 2011)

 

 

 

2,694,896

 

2,685,700

 

2,694,896

 

Member Units (7)  (Fully diluted 60.8%)

 

 

 

 

 

811,000

 

1,010,000

 

 

 

 

 

 

 

6,100,299

 

6,314,896

 

 

 

 

 

 

 

 

 

 

 

Mid-Columbia Lumber Products, LLC

 

Specialized Lumber Products

 

 

 

 

 

 

 

Prime Plus 1% Secured Debt (Maturity - October 1, 2010)

 

 

375,000

 

373,333

 

373,333

 

12% Secured Debt (Maturity - December 18, 2011)

 

 

 

3,900,000

 

3,757,475

 

3,798,418

 

Member Units (Fully diluted 26.7%)

 

 

 

 

 

500,000

 

610,000

 

Warrants (Fully diluted 25.5%)

 

 

 

 

 

250,000

 

580,000

 

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

 

 

 

1,130,000

 

1,130,000

 

1,130,000

 

Member Units (Mid - Columbia Real Estate, LLC) (Fully diluted 50.0%)

 

 

 

 

 

250,000

 

250,000

 

 

 

 

 

 

 

6,260,808

 

6,741,751

 

 

 

 

 

 

 

 

 

 

 

NAPCO Precast, LLC

 

Precast Concrete Manufacturing

 

 

 

 

 

 

 

18% Secured Debt (Maturity - February 1, 2013)

 

 

5,923,077

 

5,848,516

 

5,923,077

 

Prime Plus 2% Secured Debt (Maturity - February 1, 2013) (8)

 

 

 

3,384,615

 

3,365,193

 

3,384,615

 

Member Units (7) (Fully diluted 35.3%)

 

 

 

 

 

2,020,000

 

4,740,000

 

 

 

 

 

 

 

11,233,709

 

14,047,692

 

 

 

 

 

 

 

 

 

 

 

NTS Holdings, Inc.

 

Trench & Traffic Safety Equipment

 

 

 

 

 

 

 

12% Secured Debt (Maturity - April 30, 2015)

 

 

6,000,000

 

5,960,861

 

5,960,861

 

Member Units (7) (Fully diluted 72.3%)

 

 

 

 

 

1,688,451

 

144,641

 

Preferred stock (7) (12% cumulative, compounded quarterly)

 

 

 

 

 

10,046,571

 

10,046,571

 

 

 

 

 

 

 

17,695,883

 

16,152,073

 

 

 

 

 

 

 

 

 

 

 

OMi Holdings, Inc.

 

Manufacturer of Overhead Cranes

 

 

 

 

 

 

 

12% Secured Debt (Maturity - April 1, 2013)

 

 

10,370,000

 

10,305,433

 

10,305,433

 

Common Stock (Fully diluted 48%)

 

 

 

 

 

1,080,000

 

270,000

 

 

 

 

 

 

 

11,385,433

 

10,575,433

 

 

 

 

 

 

 

 

 

 

 

The MPI Group, LLC

 

Manufacturer of Custom Hollow Metal Doors, Frames and Accessories

 

 

 

 

 

 

 

9% Secured Debt (Maturity — October 2, 2013)

 

 

200,000

 

198,701

 

198,701

 

12% Secured Debt (Maturity — October 2, 2013)

 

 

5,000,000

 

4,809,686

 

4,809,686

 

Warrants (Fully diluted 47.1%)

 

 

 

 

895,943

 

400,000

 

 

 

 

 

 

 

5,904,330

 

5,408,387

 

 

 

 

 

 

 

 

 

 

 

Thermal & Mechanical Equipment, LLC

 

Heat Exchange / Filtration Products and Services

 

 

 

 

 

 

 

13% current / 5% PIK Secured Debt (Maturity - September 25, 2014)

 

 

5,575,220

 

5,494,570

 

5,575,220

 

Prime plus 2% Secured Debt (Maturity - September 25, 2014) (8)

 

 

 

1,750,000

 

1,737,968

 

1,737,968

 

Warrants (Fully diluted 50.0%)

 

 

 

 

 

1,000,000

 

1,890,000

 

 

 

 

 

 

 

8,232,538

 

9,203,188

 

 

7



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2010

 

Portfolio Company/Type of Investment (1) (2)

 

Industry

 

Principal (6)

 

Cost (6)

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Control Investments (3)

 

 

 

 

 

 

 

 

 

Uvalco Supply, LLC

 

Farm and Ranch Supply

 

 

 

 

 

 

 

Member Units (Fully diluted 39.6%) (7)

 

 

 

 

1,113,243

 

1,150,000

 

 

 

 

 

 

 

 

 

 

 

Vision Interests, Inc.

 

Manufacturer/Installer of Commercial Signage

 

 

 

 

 

 

 

2.6% current /10.4% PIK Secured Debt (Maturity - June 6, 2016)

 

 

9,400,000

 

8,424,811

 

8,022,651

 

2.6% current /10.4% PIK Secured Debt (Maturity - June 5, 2012)

 

 

 

560,000

 

538,630

 

538,630

 

Common Stock (Fully diluted 22.3%)

 

 

 

 

 

372,000

 

 

Warrants (Fully diluted 38.2%)

 

 

 

 

 

160,010

 

 

 

 

 

 

 

 

9,495,451

 

8,561,281

 

 

 

 

 

 

 

 

 

 

 

Ziegler’s NYPD, LLC

 

Casual Restaurant Group

 

 

 

 

 

 

 

Prime plus 2% Secured Debt (Maturity - October 1, 2013) (8)

 

 

1,000,000

 

992,990

 

992,990

 

13% current / 5% PIK Secured Debt (Maturity - October 1, 2013)

 

 

 

4,680,906

 

4,624,548

 

4,624,548

 

Warrants (Fully diluted 47.6%)

 

 

 

 

 

600,000

 

670,000

 

 

 

 

 

 

 

6,217,538

 

6,287,538

 

 

 

 

 

 

 

 

 

 

 

Subtotal Control Investments

 

 

 

 

 

162,917,430

 

172,397,494

 

 

8



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2010

 

Portfolio Company/Type of Investment (1) (2)

 

Industry

 

Principal (6)

 

Cost (6)

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Affiliate Investments (4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

American Sensor Technologies, Inc.

 

Manufacturer of Commercial/Industrial Sensors

 

 

 

 

 

 

 

9% current / 2% PIK Secured Debt (Maturity - May 31, 2012)

 

 

3,606,322

 

3,571,609

 

3,571,609

 

Warrants (Fully diluted 19.6%)

 

 

 

 

 

49,990

 

1,010,000

 

 

 

 

 

 

 

3,621,599

 

4,581,609

 

 

 

 

 

 

 

 

 

 

 

Audio Messaging Solutions, LLC

 

Audio Messaging Services

 

 

 

 

 

 

 

12% Secured Debt (Maturity - May 8, 2014)

 

 

5,516,000

 

5,153,823

 

5,264,000

 

Warrants (Fully diluted 8.4%)

 

 

 

 

 

468,373

 

1,120,000

 

 

 

 

 

 

 

5,622,196

 

6,384,000

 

 

 

 

 

 

 

 

 

 

 

Compact Power Equipment Centers, LLC

 

Light to Medium Duty Equipment Rental

 

 

 

 

 

 

 

12% Secured Debt (Maturity - September 23, 2014)

 

 

3,000,000

 

2,964,615

 

2,964,615

 

Member Units (Fully diluted 11.5%)

 

 

 

 

 

1,147

 

1,147

 

 

 

 

 

 

 

2,965,762

 

2,965,762

 

 

 

 

 

 

 

 

 

 

 

DrillingInfo, Inc.

 

Information Services for the Oil and Gas Industry

 

 

 

 

 

 

 

12% Secured Debt (Maturity - November 20, 2014)

 

 

8,000,000

 

6,729,411

 

7,770,000

 

Member Units (Fully diluted 2.1%)

 

 

 

 

1,085,325

 

1,230,325

 

Warrants (Fully diluted 5.0%)

 

 

 

 

 

1,250,000

 

2,930,000

 

 

 

 

 

 

 

9,064,736

 

11,930,325

 

 

 

 

 

 

 

 

 

 

 

East Teak Fine Hardwoods, Inc.

 

Hardwood Products

 

 

 

 

 

 

 

Common Stock (Fully diluted 5.0%)

 

 

 

 

 

480,318

 

500,000

 

 

 

 

 

 

 

 

 

 

 

Houston Plating & Coatings, LLC

 

Plating & Industrial Coating Services

 

 

 

 

 

 

 

Prime plus 2% Secured Debt (Maturity - July 18, 2013)

 

 

300,000

 

300,000

 

300,000

 

Member Units (7) (Fully diluted 11.1%)

 

 

 

 

335,000

 

2,835,000

 

 

 

 

 

 

 

635,000

 

3,135,000

 

 

 

 

 

 

 

 

 

 

 

KBK Industries, LLC

 

Specialty Manufacturer of Oilfield and Industrial Products

 

 

 

 

 

 

 

14% Secured Debt (Maturity - January 23, 2011)

 

 

5,250,000

 

5,186,647

 

5,186,647

 

10% Secured Debt (Maturity - March 31, 2011)

 

 

764,940

 

764,940

 

764,940

 

Member Units (7) (Fully diluted 19.3%)

 

 

 

 

340,833

 

1,340,333

 

 

 

 

 

 

 

6,292,420

 

7,291,920

 

 

 

 

 

 

 

 

 

 

 

Laurus Healthcare, LP

 

Healthcare Facilities / Services

 

 

 

 

 

 

 

13% Secured Debt (Maturity - May 7, 2012)

 

 

3,325,000

 

3,325,000

 

3,325,000

 

Warrants (Fully diluted 14.1%)

 

 

 

 

 

79,505

 

3,350,000

 

 

 

 

 

 

 

3,404,505

 

6,675,000

 

 

 

 

 

 

 

 

 

 

 

Lighting Unlimited, LLC

 

Commercial and Residential Lighting Products and Design Services

 

 

 

 

 

 

 

Prime Plus 1% Secured Debt (Maturity - August 22, 2012) (8)

 

 

1,083,331

 

1,078,334

 

1,078,334

 

12% current / 2% PIK Secured Debt (Maturity - August 22, 2012)

 

 

1,751,136

 

1,704,973

 

1,704,973

 

Warrants (Fully diluted 17.0%)

 

 

 

 

 

54,000

 

54,000

 

 

 

 

 

 

 

2,837,307

 

2,837,307

 

 

 

 

 

 

 

 

 

 

 

Merrick Systems, Inc.

 

Software and Information Technology

 

 

 

 

 

 

 

13% Secured Debt (Maturity - May 6, 2015)

 

 

3,000,000

 

2,506,500

 

2,506,500

 

Warrants (Fully diluted 6.5%)

 

 

 

 

450,000

 

450,000

 

 

 

 

 

 

 

2,956,500

 

2,956,500

 

 

9



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2010

 

Portfolio Company/Type of Investment (1) (2)

 

Industry

 

Principal (6)

 

Cost (6)

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Affiliate Investments (4)

 

 

 

 

 

 

 

 

 

Olympus Building Services, Inc.

 

Custodial/Facilities Services

 

 

 

 

 

 

 

12% Secured Debt (Maturity - March 27, 2014)

 

 

3,150,000

 

2,961,161

 

3,050,000

 

12% Current / 3% PIK Secured Debt (Maturity - March 27, 2014)

 

 

 

1,444,495

 

1,444,495

 

1,444,495

 

Warrants (Fully diluted 22.5%)

 

 

 

 

 

470,000

 

930,000

 

 

 

 

 

 

 

4,875,656

 

5,424,495

 

 

 

 

 

 

 

 

 

 

 

Schneider Sales Management, LLC

 

Sales Consulting and Training

 

 

 

 

 

 

 

13% Secured Debt (Maturity - October 15, 2013)

 

 

3,333,323

 

3,244,295

 

2,720,000

 

Warrants (Fully diluted 13.3%)

 

 

 

 

 

45,000

 

 

 

 

 

 

 

 

3,289,295

 

2,720,000

 

 

 

 

 

 

 

 

 

 

 

Walden Smokey Point, Inc.

 

Specialty Transportation/Logistics

 

 

 

 

 

 

 

14% current / 4% PIK Secured Debt (Maturity - December 30, 2013)

 

 

8,492,765

 

8,366,355

 

8,366,355

 

Common Stock (Fully diluted 12.6%)

 

 

 

 

 

1,426,667

 

2,430,000

 

 

 

 

 

 

 

9,793,022

 

10,796,355

 

 

 

 

 

 

 

 

 

 

 

WorldCall, Inc.

 

Telecommunication/Information Services

 

 

 

 

 

 

 

13% Secured Debt (Maturity - April 22, 2011)

 

 

646,225

 

646,225

 

646,225

 

Common Stock (Fully diluted 9.9%)

 

 

 

 

 

296,631

 

 

 

 

 

 

 

 

942,856

 

646,225

 

 

 

 

 

 

 

 

 

 

 

Subtotal Affiliate Investments

 

 

 

 

 

56,781,172

 

68,844,498

 

 

10



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2010

 

Portfolio Company/Type of Investment (1) (2)

 

Industry

 

Principal (6)