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, 2013

 

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

 

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 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 o

 

Accelerated filer x

 

 

 

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 x

 

The number of shares outstanding of the issuer’s common stock as of August 8, 2013 was 35,040,016.

 

 

 



Table of Contents

 

TABLE OF CONTENTS

 

 

 

PART I
FINANCIAL INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Financial Statements

 

 

 

 

 

 

 

 

 

Consolidated Balance Sheets — June 30, 2013 (unaudited) and December 31, 2012

 

1

 

 

 

 

 

 

 

Consolidated Statements of Operations (unaudited) — Three and six months ended June 30, 2013 and 2012

 

2

 

 

 

 

 

 

 

Consolidated Statements of Changes in Net Assets (unaudited) — Six months ended June 30, 2013 and 2012

 

3

 

 

 

 

 

 

 

Consolidated Statements of Cash Flows (unaudited) — Six months ended June 30, 2013 and 2012

 

4

 

 

 

 

 

 

 

Consolidated Schedule of Investments (unaudited) — June 30, 2013

 

5

 

 

 

 

 

 

 

Consolidated Schedule of Investments — December 31, 2012

 

19

 

 

 

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

 

32

 

 

 

 

 

Item 2.

 

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

 

59

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

 

79

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

79

 

 

 

 

 

 

 

PART II
OTHER INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

79

 

 

 

 

 

Item 1A.

 

Risk Factors

 

79

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

79

 

 

 

 

 

Item 5.

 

Other Information

 

79

 

 

 

 

 

Item 6.

 

Exhibits

 

79

 

 

 

 

 

 

 

Signatures

 

81

 



Table of Contents

 

PART I — FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

(in thousands, except shares and per share amounts)

 

 

 

June 30, 2013

 

December 31, 2012

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Portfolio investments at fair value:

 

 

 

 

 

Control investments (cost: $235,029 and $217,483 as of June 30, 2013 and December 31, 2012, respectively)

 

$

302,558

 

$

278,475

 

Affiliate investments (cost: $187,622 and $142,607 as of June 30, 2013 and December 31, 2012, respectively)

 

230,293

 

178,413

 

Non-Control/Non-Affiliate investments (cost: $567,997 and $456,975 as of June 30, 2013 and December 31, 2012, respectively)

 

581,244

 

467,543

 

Investment in affiliated Investment Manager (cost: $2,668 as of December 31, 2012)

 

 

 

 

 

 

 

 

 

Total portfolio investments (cost: $990,648 and $819,733 as of June 30, 2013 and December 31, 2012, respectively)

 

1,114,095

 

924,431

 

Marketable securities and idle funds investments (cost: $22,502 and $28,469 as of June 30, 2013 and December 31, 2012, respectively)

 

21,759

 

28,535

 

 

 

 

 

 

 

Total investments (cost: $1,013,150 and $848,202 as of June 30, 2013 and December 31, 2012, respectively)

 

1,135,854

 

952,966

 

 

 

 

 

 

 

Cash and cash equivalents

 

41,220

 

63,517

 

Interest receivable and other assets

 

12,168

 

14,580

 

Receivable for securities sold

 

31,213

 

 

Deferred financing costs (net of accumulated amortization of $3,430 and $3,203 as of June 30, 2013 and December 31, 2012, respectively)

 

7,994

 

5,162

 

 

 

 

 

 

 

Total assets

 

$

1,228,449

 

$

1,036,225

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

SBIC debentures (par: $225,000 as of June 30, 2013 and December 31, 2012, par of $100,000 is recorded at a fair value of $87,123 and $86,467 as of June 30, 2013 and December 31, 2012, respectively)

 

$

212,123

 

$

211,467

 

Credit facility

 

215,000

 

132,000

 

Notes payable

 

92,000

 

 

Payable for securities purchased

 

26,605

 

20,661

 

Deferred tax liability, net

 

11,006

 

11,778

 

Accounts payable and other liabilities

 

5,782

 

4,527

 

Interest payable

 

5,626

 

3,562

 

Dividend payable

 

4,924

 

5,188

 

Payable to affiliated Investment Manager

 

 

4,066

 

 

 

 

 

 

 

Total liabilities

 

573,066

 

393,249

 

 

 

 

 

 

 

Commitments and contingencies (Note M)

 

 

 

 

 

 

 

 

 

 

 

NET ASSETS

 

 

 

 

 

 

 

 

 

 

 

Common stock, $0.01 par value per share (150,000,000 shares authorized; 35,014,302 and 34,589,484 shares issued and outstanding as of June 30, 2013 and December 31, 2012, respectively)

 

350

 

346

 

Additional paid-in capital

 

553,011

 

544,136

 

Accumulated net investment income, net of cumulative dividends of $159,506 and $115,401 as of June 30, 2013 and December 31, 2012, respectively

 

26,879

 

35,869

 

Accumulated net realized gain from investments (accumulated net realized gain from investments of of $10,241 before cumulative dividends of $28,993 as of June 30, 2013 and accumulated net realized gain from investments of $9,838 before cumulative dividends of $28,993 as of December 31, 2012)

 

(18,752

)

(19,155

)

Net unrealized appreciation, net of income taxes

 

93,895

 

81,780

 

 

 

 

 

 

 

Total net assets

 

655,383

 

642,976

 

 

 

 

 

 

 

Total liabilities and net assets

 

$

1,228,449

 

$

1,036,225

 

 

 

 

 

 

 

NET ASSET VALUE PER SHARE

 

$

18.72

 

$

18.59

 

 

1



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Operations

(in thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

INVESTMENT INCOME:

 

 

 

 

 

 

 

 

 

Interest, fee and dividend income:

 

 

 

 

 

 

 

 

 

Control investments

 

$

8,169

 

$

6,083

 

$

14,703

 

$

11,850

 

Affiliate investments

 

5,399

 

4,141

 

11,060

 

9,814

 

Non-Control/Non-Affiliate investments

 

13,862

 

10,101

 

27,000

 

18,248

 

Interest, fee and dividend income

 

27,430

 

20,325

 

52,763

 

39,912

 

Interest and dividends from marketable securities, idle funds and other

 

370

 

517

 

681

 

1,489

 

Total investment income

 

27,800

 

20,842

 

53,444

 

41,401

 

EXPENSES:

 

 

 

 

 

 

 

 

 

Interest

 

(5,542

)

(4,180

)

(9,424

)

(8,044

)

Compensation

 

(2,574

)

 

(2,574

)

 

General and administrative

 

(1,249

)

(554

)

(1,937

)

(1,162

)

Expenses reimbursed to affiliated Investment Manager

 

 

(2,702

)

(3,189

)

(5,359

)

Share-based compensation

 

(602

)

(580

)

(1,205

)

(1,161

)

Total expenses

 

(9,967

)

(8,016

)

(18,329

)

(15,726

)

NET INVESTMENT INCOME

 

17,833

 

12,826

 

35,115

 

25,675

 

 

 

 

 

 

 

 

 

 

 

NET REALIZED GAIN (LOSS) FROM INVESTMENTS:

 

 

 

 

 

 

 

 

 

Control investments

 

 

(96

)

 

(2,061

)

Affiliate investments

 

 

(3,732

)

 

5,500

 

Non-Control/Non-Affiliate investments

 

483

 

174

 

140

 

337

 

Marketable securities and idle funds investments

 

322

 

325

 

263

 

1,033

 

Total net realized gain (loss) from investments

 

805

 

(3,329

)

403

 

4,809

 

NET REALIZED INCOME

 

18,638

 

9,497

 

35,518

 

30,484

 

 

 

 

 

 

 

 

 

 

 

NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):

 

 

 

 

 

 

 

 

 

Portfolio investments

 

6,337

 

17,515

 

16,415

 

22,023

 

Marketable securities and idle funds investments

 

(743

)

(55

)

(810

)

(84

)

SBIC debentures

 

555

 

(1,808

)

(657

)

(1,508

)

Investment in affiliated Investment Manager

 

 

 

 

(51

)

Total net change in unrealized appreciation

 

6,149

 

15,652

 

14,948

 

20,380

 

 

 

 

 

 

 

 

 

 

 

INCOME TAXES:

 

 

 

 

 

 

 

 

 

Federal and state income, excise, and other taxes

 

(752

)

(601

)

(1,422

)

(1,270

)

Deferred taxes

 

(31

)

(395

)

(1,411

)

(1,602

)

Income tax provision

 

(783

)

(996

)

(2,833

)

(2,872

)

 

 

 

 

 

 

 

 

 

 

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

 

24,004

 

24,153

 

47,633

 

47,992

 

Noncontrolling interest

 

 

 

 

(54

)

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

 

$

24,004

 

$

24,153

 

$

47,633

 

$

47,938

 

 

 

 

 

 

 

 

 

 

 

NET INVESTMENT INCOME PER SHARE - BASIC AND DILUTED

 

$

0.51

 

$

0.47

 

$

1.01

 

$

0.94

 

NET REALIZED INCOME PER SHARE - BASIC AND DILUTED

 

$

0.54

 

$

0.35

 

$

1.02

 

$

1.12

 

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

 

$

0.69

 

$

0.88

 

$

1.37

 

$

1.77

 

 

 

 

 

 

 

 

 

 

 

DIVIDENDS PAID PER SHARE:

 

 

 

 

 

 

 

 

 

Regular monthly dividends

 

$

0.47

 

$

0.42

 

$

0.92

 

$

0.83

 

Supplemental dividends

 

 

 

 

0.35

 

 

 

Total

 

$

0.47

 

$

0.42

 

$

1.27

 

$

0.83

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING -

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED

 

34,803,729

 

27,365,758

 

34,751,905

 

27,118,421

 

 

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

(in thousands, except shares)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

Net Unrealized

 

 

 

 

 

Total Net

 

 

 

 

 

 

 

 

 

Accumulated

 

Net Realized

 

Appreciation from

 

 

 

 

 

Assets

 

 

 

Common Stock

 

Additional

 

Net Investment

 

Gain From

 

Investments,

 

 

 

 

 

Including

 

 

 

Number

 

Par

 

Paid-In

 

Income, Net

 

Investments,

 

Net of Income

 

Total Net

 

Noncontrolling

 

Noncontrolling

 

 

 

of Shares

 

Value

 

Capital

 

of Dividends

 

Net of Dividends

 

Taxes

 

Asset Value

 

Interest

 

Interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31, 2011

 

26,714,384

 

$

267

 

$

360,164

 

$

12,531

 

$

(20,445

)

$

53,194

 

$

405,711

 

$

5,477

 

$

411,188

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Public offering of common stock, net of offering costs

 

4,312,500

 

43

 

92,913

 

 

 

 

 

 

 

92,956

 

 

 

92,956

 

MSC II noncontrolling interest acquisition

 

229,634

 

2

 

5,328

 

 

 

 

5,330

 

(5,417

)

(87

)

Adjustment to investment in Investment Manager related to MSC II noncontrolling interest acquisition

 

 

 

(1,616

)

 

 

 

(1,616

)

 

(1,616

)

Share-based compensation

 

 

 

1,161

 

 

 

 

1,161

 

 

1,161

 

Purchase of vested stock for employee payroll tax withholding

 

(7,858

)

 

 

(199

)

 

 

 

 

 

 

(199

)

 

 

(199

)

Dividend reinvestment

 

200,961

 

2

 

4,712

 

 

 

 

4,714

 

 

4,714

 

Issuance of restricted stock

 

139,033

 

1

 

(1

)

 

 

 

 

 

 

Distributions to noncontrolling interest

 

 

 

 

 

 

 

 

(114

)

(114

)

Dividends to stockholders

 

 

 

 

(9,068

)

(13,523

)

 

(22,591

)

 

(22,591

)

Net increase resulting from operations

 

 

 

 

25,675

 

4,809

 

17,508

 

47,992

 

 

47,992

 

Noncontrolling interest

 

 

 

 

 

 

(54

)

(54

)

54

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at June 30, 2012

 

31,588,654

 

$

315

 

$

462,462

 

$

29,138

 

$

(29,159

)

$

70,648

 

$

533,404

 

$

 

$

533,404

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31, 2012

 

34,589,484

 

$

346

 

$

544,136

 

$

35,869

 

$

(19,155

)

$

81,780

 

$

642,976

 

$

 

$

642,976

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

 

1,205

 

 

 

 

1,205

 

 

1,205

 

Purchase of vested stock for employee payroll tax withholding

 

(19,460

)

 

(523

)

 

 

 

(523

)

 

(523

)

Dividend reinvestment

 

173,926

 

2

 

5,580

 

 

 

 

5,582

 

 

5,582

 

Issuance of restricted stock

 

252,227

 

2

 

(2

)

 

 

 

 

 

 

Consolidation of Investment Manager

 

 

 

2,037

 

 

 

 

2,037

 

 

2,037

 

Issuances of common stock

 

18,125

 

 

578

 

 

 

 

578

 

 

578

 

Dividends to stockholders

 

 

 

 

(44,105

)

 

 

(44,105

)

 

(44,105

)

Net increase resulting from operations

 

 

 

 

35,115

 

403

 

12,115

 

47,633

 

 

47,633

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at June 30, 2013

 

35,014,302

 

$

350

 

$

553,011

 

$

26,879

 

$

(18,752

)

$

93,895

 

$

655,383

 

$

 

$

655,383

 

 

The accompanying notes are an integral part of these financial statements

 

3



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2013

 

2012

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

Net increase in net assets resulting from operations

 

$

47,633

 

$

47,992

 

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

 

 

 

 

 

Investments in portfolio companies

 

(353,620

)

(261,019

)

Proceeds from sales and repayments of debt investments

 

178,750

 

131,852

 

Proceeds from sale of equity investments in portfolio companies

 

 

26,547

 

Investments in marketable securities and idle funds investments

 

(52,503

)

(7,596

)

Proceeds from marketable securities and idle funds investments

 

42,469

 

27,212

 

Net change in unrealized appreciation

 

(14,948

)

(20,380

)

Net realized (gain) loss from investments

 

(403

)

(4,809

)

Accretion of unearned income

 

(5,079

)

(6,405

)

Payment-in-kind interest

 

(2,368

)

(1,529

)

Cumulative dividends

 

(467

)

(133

)

Share-based compensation expense

 

1,205

 

1,161

 

Amortization of deferred financing costs

 

538

 

467

 

Deferred taxes

 

1,411

 

1,622

 

Changes in other assets and liabilities:

 

 

 

 

 

Interest receivable and other assets

 

2,913

 

(346

)

Interest payable

 

2,064

 

(100

)

Payable to affiliated Investment Manager

 

(3,960

)

(2,071

)

Accounts payable and other liabilities

 

(330

)

553

 

Deferred fees and other

 

1,500

 

623

 

Net cash provided by (used in) operating activities

 

(155,195

)

(66,359

)

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

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

 

 

92,956

 

Proceeds from public offering of 6.125% Notes

 

92,000

 

 

Dividends paid to stockholders

 

(38,787

)

(17,528

)

Proceeds from credit facility

 

250,000

 

114,000

 

Repayments on credit facility

 

(167,000

)

(133,000

)

Payment of deferred loan costs and SBIC debenture fees

 

(3,370

)

(292

)

Other

 

55

 

(451

)

Net cash provided by (used in) financing activities

 

132,898

 

55,685

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

(22,297

)

(10,674

)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

63,517

 

42,650

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

41,220

 

$

31,976

 

 

 

 

 

 

 

Supplemental cash flow disclosures:

 

 

 

 

 

Interest Paid

 

$

6,827

 

$

7,677

 

Taxes paid

 

$

4,466

 

$

473

 

Non-cash financing activities:

 

 

 

 

 

Shares issued pursuant to the DRIP

 

$

5,580

 

$

4,714

 

 

The accompanying notes are an integral part of these financial statements

 

4



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2013

(in thousands)

(Unaudited)

 

Portfolio Company (1)

 

Business Description

 

Type of Investment (2) (3)

 

Principal (4)

 

Cost (4)

 

Fair Value

 

Control Investments (5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bond-Coat, Inc.

 

Casing and Tubing Coating Services

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

14,750

 

14,565

 

14,565

 

 

 

 

 

Common Stock (Fully diluted 43.4%)

 

 

 

6,350

 

7,150

 

 

 

 

 

 

 

 

 

20,915

 

21,715

 

 

 

 

 

 

 

 

 

 

 

 

 

Café Brazil, LLC

 

Casual Restaurant Group

 

 

 

 

 

 

 

 

 

 

 

 

 

Member Units (Fully diluted 69.0%) (8)

 

 

 

1,742

 

6,770

 

 

 

 

 

 

 

 

 

 

 

 

 

California Healthcare Medical Billing, Inc.

 

Outsourced Billing and Revenue Cycle Management

 

 

 

 

 

 

 

 

 

 

 

 

 

12% Secured Debt (Maturity - October 17, 2015)

 

8,103

 

7,942

 

8,094

 

 

 

 

 

Warrants (Fully diluted 21.3%)

 

 

 

1,193

 

3,380

 

 

 

 

 

Common Stock (Fully diluted 9.8%)

 

 

 

1,177

 

1,560

 

 

 

 

 

 

 

 

 

10,312

 

13,034

 

 

 

 

 

 

 

 

 

 

 

 

 

CBT Nuggets, LLC

 

Produces and Sells IT Training Certification Videos

 

 

 

 

 

 

 

 

 

 

 

 

 

Member Units (Fully diluted 41.6%) (8)

 

 

 

1,300

 

9,650

 

 

 

 

 

 

 

 

 

 

 

 

 

Ceres Management, LLC (Lambs Tire & Automotive)

 

Aftermarket Automotive Services Chain

 

 

 

 

 

 

 

 

 

 

 

 

 

14% Secured Debt (Maturity - May 31, 2018)

 

4,000

 

4,000

 

4,000

 

 

 

 

 

Class B Member Units (12% cumulative) (8)

 

 

 

3,100

 

3,100

 

 

 

 

 

Member Units (Fully diluted 100.0%)

 

 

 

5,273

 

510

 

 

 

 

 

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

 

1,041

 

1,041

 

1,041

 

 

 

 

 

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

 

 

 

625

 

730

 

 

 

 

 

 

 

 

 

14,039

 

9,381

 

 

 

 

 

 

 

 

 

 

 

 

 

Condit Exhibits, LLC

 

Tradeshow Exhibits / Custom Displays

 

 

 

 

 

 

 

 

 

 

 

 

 

13% Current / 5% PIK Secured Debt (Maturity - July 1, 2013)

 

4,661

 

4,661

 

4,661

 

 

 

 

 

Warrants (Fully diluted 47.9%)

 

 

 

320

 

1,400

 

 

 

 

 

 

 

 

 

4,981

 

6,061

 

 

 

 

 

 

 

 

 

 

 

 

 

Gulf Manufacturing, LLC

 

Manufacturer of Specialty Fabricated Industrial Piping Products

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

919

 

919

 

919

 

 

 

 

 

Member Units (Fully diluted 34.2%) (8)

 

 

 

2,980

 

12,660

 

 

 

 

 

 

 

 

 

3,899

 

13,579

 

 

 

 

 

 

 

 

 

 

 

 

 

Harrison Hydra-Gen, Ltd.

 

Manufacturer of Hydraulic Generators

 

 

 

 

 

 

 

 

 

 

 

 

 

9% Secured Debt (Maturity - June 4, 2015)

 

4,896

 

4,591

 

4,896

 

 

 

 

 

Preferred Stock (8% cumulative) (8)

 

 

 

1,124

 

1,124

 

 

 

 

 

Common Stock (Fully diluted 34.5%) (8)

 

 

 

718

 

1,340

 

 

 

 

 

 

 

 

 

6,433

 

7,360

 

 

 

 

 

 

 

 

 

 

 

 

 

Hawthorne Customs and Dispatch Services, LLC

 

Facilitator of Import Logistics, Brokerage, and Warehousing

 

 

 

 

 

 

 

 

 

 

 

 

 

Member Units (Fully diluted 47.6%) (8)

 

 

 

589

 

440

 

 

 

 

 

Member Units (Wallisville Real Estate, LLC) (Fully diluted 59.1%) (8)

 

 

 

1,215

 

1,890

 

 

 

 

 

 

 

 

 

1,804

 

2,330

 

 

5



Table of Contents

 

Portfolio Company (1)

 

Business Description

 

Type of Investment (2) (3)

 

Principal (4)

 

Cost (4)

 

Fair Value

 

Hydratec, Inc.

 

Designer and Installer of Micro-Irrigation Systems

 

 

 

 

 

 

 

 

 

 

 

 

 

Prime Plus 1%, Current Coupon 9%, Secured Debt (Maturity - October 31, 2013) (9)

 

375

 

375

 

375

 

 

 

 

 

Common Stock (Fully diluted 94.2%) (8)

 

 

 

7,095

 

13,350

 

 

 

 

 

 

 

 

 

7,470

 

13,725

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact Telecom, Inc.

 

Telecommunications Services

 

 

 

 

 

 

 

 

 

 

 

 

 

LIBOR Plus 4.50%, Current Coupon 6.50%, Secured Debt (Maturity - May 31, 2018)

 

2,500

 

2,493

 

2,493

 

 

 

 

 

13% Secured Debt (Maturity - May 31, 2018)

 

22,500

 

14,233

 

14,233

 

 

 

 

 

Warrants (Fully diluted 40.0%)

 

 

 

8,000

 

8,000

 

 

 

 

 

 

 

 

 

24,726

 

24,726

 

 

 

 

 

 

 

 

 

 

 

 

 

Indianapolis Aviation Partners, LLC

 

Fixed Base Operator

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

3,850

 

3,734

 

3,850

 

 

 

 

 

Warrants (Fully diluted 30.1%)

 

 

 

1,129

 

1,940

 

 

 

 

 

 

 

 

 

4,863

 

5,790

 

 

 

 

 

 

 

 

 

 

 

 

 

Jensen Jewelers of Idaho, LLC

 

Retail Jewelry Store

 

 

 

 

 

 

 

 

 

 

 

 

 

Prime Plus 2%, Current Coupon 5.25%, Secured Debt (Maturity - November 14, 2013) (9)

 

1,597

 

1,597

 

1,597

 

 

 

 

 

13% Current / 6% PIK Secured Debt (Maturity - November 14, 2013)

 

1,657

 

1,657

 

1,657

 

 

 

 

 

Member Units (Fully diluted 60.8%) (8)

 

 

 

811

 

2,770

 

 

 

 

 

 

 

 

 

4,065

 

6,024

 

 

 

 

 

 

 

 

 

 

 

 

 

Lighting Unlimited, LLC

 

Commercial and Residential Lighting Products and Design Services

 

 

 

 

 

 

 

 

 

 

 

 

 

8% Secured Debt (Maturity - August 22, 2014)

 

1,784

 

1,784

 

1,784

 

 

 

 

 

Preferred Stock (non-voting)

 

 

 

476

 

162

 

 

 

 

 

Warrants (Fully diluted 7.1%)

 

 

 

54

 

 

 

 

 

 

Common Stock (Fully diluted 70.0%) (8)

 

 

 

100

 

 

 

 

 

 

 

 

 

 

2,414

 

1,946

 

 

 

 

 

 

 

 

 

 

 

 

 

Marine Shelters Holdings, LLC (LoneStar Marine Shelters)

 

Fabricator of Marine and Industrial Shelters

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

10,250

 

10,060

 

10,060

 

 

 

 

 

Preferred Stock (Fully diluted 26.7%)

 

 

 

3,750

 

3,750

 

 

 

 

 

 

 

 

 

13,810

 

13,810

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

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

 

994

 

994

 

994

 

 

 

 

 

Warrants (Fully diluted 9.2%)

 

 

 

90

 

800

 

 

 

 

 

Member Units (Fully diluted 42.9%)

 

 

 

1,042

 

3,850

 

 

 

 

 

Member Units (Mid - Columbia Real Estate, LLC) (Fully diluted 50.0%) (8)

 

 

 

250

 

270

 

 

 

 

 

 

 

 

 

8,026

 

11,564

 

 

 

 

 

 

 

 

 

 

 

 

 

NAPCO Precast, LLC

 

Precast Concrete Manufacturing

 

 

 

 

 

 

 

 

 

 

 

 

 

Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - February 1, 2016) (9)

 

2,923

 

2,886

 

2,886

 

 

 

 

 

18% Secured Debt (Maturity - February 1, 2016)

 

4,468

 

4,408

 

4,408

 

 

 

 

 

Member Units (Fully diluted 44.0%)

 

 

 

2,975

 

4,790

 

 

 

 

 

 

 

 

 

10,269

 

12,084

 

 

 

 

 

 

 

 

 

 

 

 

 

NRI Clinical Research, LLC

 

Clinical Research Center

 

 

 

 

 

 

 

 

 

 

 

 

 

14% Secured Debt (Maturity - September 8, 2016)

 

4,595

 

4,395

 

4,395

 

 

 

 

 

Warrants (Fully diluted 12.5%) (8)

 

 

 

252

 

480

 

 

 

 

 

Member Units (Fully diluted 24.8%) (8)

 

 

 

500

 

960

 

 

 

 

 

 

 

 

 

5,147

 

5,835

 

 

 

 

 

 

 

 

 

 

 

 

 

NRP Jones, LLC

 

Manufacturer of  Hoses, Fittings and Assemblies

 

 

 

 

 

 

 

 

 

 

 

 

 

12% Secured Debt (Maturity - December 22, 2016)

 

12,100

 

11,288

 

12,100

 

 

 

 

 

Warrants (Fully diluted 12.2%)

 

 

 

817

 

1,250

 

 

 

 

 

Member Units (Fully diluted 43.2%) (8)

 

 

 

2,900

 

4,410

 

 

 

 

 

 

 

 

 

15,005

 

17,760

 

 

6



Table of Contents

 

Portfolio Company (1)

 

Business Description

 

Type of Investment (2) (3)

 

Principal (4)

 

Cost (4)

 

Fair Value

 

OMi Holdings, Inc.

 

Manufacturer of  Overhead Cranes

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock (Fully diluted 48.0%)

 

 

 

1,080

 

8,740

 

 

 

 

 

 

 

 

 

 

 

 

 

Pegasus Research Group, LLC (Televerde)

 

Telemarketing and Data Services

 

 

 

 

 

 

 

 

 

 

 

 

 

15% Secured Debt (Maturity - January 6, 2016)

 

4,991

 

4,952

 

4,991

 

 

 

 

 

Member Units (Fully diluted 43.7%) (8)

 

 

 

1,250

 

4,800

 

 

 

 

 

 

 

 

 

6,202

 

9,791

 

 

 

 

 

 

 

 

 

 

 

 

 

PPL RVs, Inc.

 

Recreational Vehicle Dealer

 

 

 

 

 

 

 

 

 

 

 

 

 

11.1% Secured Debt (Maturity - June 10, 2015)

 

8,310

 

8,265

 

8,310

 

 

 

 

 

Common Stock (Fully diluted 51.1%)

 

 

 

2,150

 

6,080

 

 

 

 

 

 

 

 

 

10,415

 

14,390

 

 

 

 

 

 

 

 

 

 

 

 

 

Principle Environmental, LLC

 

Noise Abatement Services

 

 

 

 

 

 

 

 

 

 

 

 

 

12% Secured Debt (Maturity - February 1, 2016)

 

3,506

 

2,987

 

3,506

 

 

 

 

 

12% Current / 2% PIK Secured Debt (Maturity - February 1, 2016)

 

3,931

 

3,878

 

3,925

 

 

 

 

 

Warrants (Fully diluted 14.2%)

 

 

 

1,200

 

3,860

 

 

 

 

 

Member Units (Fully diluted 22.6%)

 

 

 

1,863

 

6,150

 

 

 

 

 

 

 

 

 

9,928

 

17,441

 

 

 

 

 

 

 

 

 

 

 

 

 

River Aggregates, LLC

 

Processor of Construction Aggregates

 

 

 

 

 

 

 

 

 

 

 

 

 

12% Secured Debt (Maturity - March 30, 2016) (14)

 

3,860

 

3,662

 

2,250

 

 

 

 

 

Warrants (Fully diluted 20.0%)

 

 

 

202

 

 

 

 

 

 

Member Units (Fully diluted 40.0%)

 

 

 

550

 

 

 

 

 

 

Member Units (RA Properties, LLC) (Fully diluted 50.0%)

 

 

 

269

 

269

 

 

 

 

 

 

 

 

 

4,683

 

2,519

 

 

 

 

 

 

 

 

 

 

 

 

 

The MPI Group, LLC

 

Manufacturer of Custom Hollow Metal Doors, Frames and Accessories

 

 

 

 

 

 

 

 

 

 

 

 

 

4.5% Current / 4.5% PIK Secured Debt (Maturity - October 2, 2013)

 

1,079

 

1,079

 

1,079

 

 

 

 

 

6% Current / 6% PIK Secured Debt (Maturity - October 2, 2013)

 

5,639

 

5,621

 

5,451

 

 

 

 

 

Warrants (Fully diluted 52.3%)

 

 

 

1,096

 

 

 

 

 

 

 

 

 

 

7,796

 

6,530

 

 

 

 

 

 

 

 

 

 

 

 

 

Thermal and Mechanical Equipment, LLC

 

Commercial and Industrial Engineering Services

 

 

 

 

 

 

 

 

 

 

 

 

 

Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - September 25, 2014) (9)

 

818

 

816

 

818

 

 

 

 

 

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

 

2,607

 

2,593

 

2,607

 

 

 

 

 

Member Units (Fully diluted 52.6%) (8)

 

 

 

1,000

 

10,080

 

 

 

 

 

 

 

 

 

4,409

 

13,505

 

 

 

 

 

 

 

 

 

 

 

 

 

Uvalco Supply, LLC

 

Farm and Ranch Supply Store

 

 

 

 

 

 

 

 

 

 

 

 

 

Member Units (Fully diluted 42.8%) (8)

 

 

 

1,113

 

3,230

 

 

 

 

 

 

 

 

 

 

 

 

 

Van Gilder Insurance Corporation

 

Insurance Brokerage

 

 

 

 

 

 

 

 

 

 

 

 

 

8% Current / 3% PIK Secured Debt (Maturity - January 31, 2014)

 

878

 

878

 

878

 

 

 

 

 

8% Current / 3% PIK Secured Debt (Maturity - January 31, 2016)

 

1,187

 

1,177

 

1,177

 

 

 

 

 

13% Current / 3% PIK Secured Debt (Maturity - January 31, 2016)

 

6,243

 

5,518

 

5,518

 

 

 

 

 

Warrants (Fully diluted 10.0%)

 

 

 

1,209

 

1,510

 

 

 

 

 

Common Stock (Fully diluted 15.5%)

 

 

 

2,500

 

2,350

 

 

 

 

 

 

 

 

 

11,282

 

11,433

 

 

 

 

 

 

 

 

 

 

 

 

 

Vision Interests, Inc.

 

Manufacturer / Installer of Commercial Signage

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

3,204

 

3,152

 

3,152

 

 

 

 

 

Series A Preferred Stock (Fully diluted 50.9%)

 

 

 

3,000

 

2,000

 

 

 

 

 

Common Stock (Fully diluted 19.1%)

 

 

 

3,706

 

60

 

 

 

 

 

 

 

 

 

9,858

 

5,212

 

 

 

 

 

 

 

 

 

 

 

 

 

Ziegler’s NYPD, LLC

 

Casual Restaurant Group

 

 

 

 

 

 

 

 

 

 

 

 

 

Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - October 1, 2013) (9)

 

1,000

 

999

 

999

 

 

 

 

 

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

 

5,449

 

5,444

 

5,444

 

 

 

 

 

Warrants (Fully diluted 46.6%)

 

 

 

600

 

180

 

 

 

 

 

 

 

 

 

7,043

 

6,623

 

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal Control Investments (26.6% of total investments at fair value)

 

 

 

235,029

 

302,558

 

 

7