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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 June 30, 2015

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 August 7, 2015 was 49,989,475.

   


Table of Contents


TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION

Item 1.

 

Consolidated Financial Statements

   

 

Consolidated Balance Sheets—June 30, 2015 (unaudited) and December 31, 2014

  2

 

Consolidated Statements of Operations (unaudited)—Three and six months ended June 30, 2015 and 2014

  3

 

Consolidated Statements of Changes in Net Assets (unaudited)—Six months ended June 30, 2015 and 2014

  4

 

Consolidated Statements of Cash Flows (unaudited)—Six months ended June 30, 2015 and 2014

  5

 

Consolidated Schedule of Investments (unaudited)—June 30, 2015

  6

 

Consolidated Schedule of Investments—December 31, 2014

  33

 

Notes to Consolidated Financial Statements (unaudited)

  59



 


Consolidated Financial Statement Schedule


 

 

 

Consolidated Schedule of Investments in and Advances to Affiliates for the Six Months Ended June 30, 2015

  99

Item 2.

 

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

  103

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

  129

Item 4.

 

Controls and Procedures

  130


PART II
OTHER INFORMATION

Item 1.

 

Legal Proceedings

  131

Item 1A.

 

Risk Factors

  131

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

  131

Item 6.

 

Exhibits

  132

 

Signatures

  133

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

(in thousands, except shares and per share amounts)

 
  June 30,
2015
  December 31,
2014
 
 
  (Unaudited)
   
 

ASSETS

             

Portfolio investments at fair value:

   
 
   
 
 

Control investments (cost: $344,675 and $342,847 as of June 30, 2015 and December 31, 2014, respectively)

  $ 500,035   $ 469,846  

Affiliate investments (cost: $315,018 and $266,243 as of June 30, 2015 and December 31, 2014, respectively)

    327,470     278,675  

Non-Control/Non-Affiliate investments (cost: $977,915 and $832,312 as of June 30, 2015 and December 31, 2014, respectively)

    962,847     814,809  

Total portfolio investments (cost: $1,637,608 and $1,441,402 as of June 30, 2015 and December 31, 2014, respectively)

    1,790,352     1,563,330  

Marketable securities and idle funds investments (cost: $10,260 and $10,604 as of June 30, 2015 and December 31, 2014, respectively)

    8,850     9,067  

Total investments (cost: $1,647,868 and $1,452,006 as of June 30, 2015 and December 31, 2014, respectively)

    1,799,202     1,572,397  

Cash and cash equivalents

   
41,592
   
60,432
 

Interest receivable and other assets

    24,668     23,273  

Receivable for securities sold

    10,827     23,133  

Deferred financing costs (net of accumulated amortization of $7,725 and $6,462 as of June 30, 2015 and December 31, 2014, respectively)

    13,417     14,550  

Total assets

  $ 1,889,706   $ 1,693,785  

LIABILITIES

             

Credit facility

 
$

226,000
 
$

218,000
 

SBIC debentures (par: $225,000 as of June 30, 2015 and December 31, 2014, par of $75,200 is recorded at a fair value of $73,753 and $72,981 as of June 30, 2015 and December 31, 2014, respectively)

    223,553     222,781  

4.50% Notes

    175,000     175,000  

6.125% Notes

    90,810     90,823  

Payable for securities purchased

    58,256     14,773  

Deferred tax liability, net

    3,404     9,214  

Dividend payable

    8,739     7,663  

Accounts payable and other liabilities

    7,665     10,701  

Interest payable

    5,463     4,848  

Total liabilities

    798,890     753,803  

Commitments and contingencies (Note M)

   
 
   
 
 

NET ASSETS

   
 
   
 
 

Common stock, $0.01 par value per share (150,000,000 shares authorized; 49,938,534 and 45,079,150 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively)

   
499
   
451
 

Additional paid-in capital

    992,108     853,606  

Accumulated net investment income, net of cumulative dividends of $356,413 and $293,789 as of June 30, 2015 and December 31, 2014, respectively

    11,733     23,665  

Accumulated net realized gain from investments (accumulated net realized gain from investments of $32,628 before cumulative dividends of $62,096 as of June 30, 2015 and accumulated net realized gain from investments of $40,321 before cumulative dividends of $60,777 as of December 31, 2014)

    (29,468 )   (20,456 )

Net unrealized appreciation, net of income taxes

    115,944     82,716  

Total net assets

    1,090,816     939,982  

Total liabilities and net assets

  $ 1,889,706   $ 1,693,785  

NET ASSET VALUE PER SHARE

  $ 21.84   $ 20.85  

   

The accompanying notes are an integral part of these financial statements

2


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,
 
 
  2015   2014   2015   2014  

INVESTMENT INCOME:

                         

Interest, fee and dividend income:

                         

Control investments

  $ 11,492   $ 10,546   $ 22,827   $ 19,842  

Affiliate investments

    6,961     6,085     13,010     11,725  

Non-Control/Non-Affiliate investments

    22,613     18,016     42,034     33,649  

Interest, fee and dividend income

    41,066     34,647     77,871     65,216  

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

    242     230     616     437  

Total investment income

    41,308     34,877     78,487     65,653  

EXPENSES:

                         

Interest

    (7,657 )   (5,473 )   (15,453 )   (10,759 )

Compensation

    (3,835 )   (3,717 )   (7,328 )   (6,068 )

General and administrative

    (2,098 )   (1,571 )   (4,060 )   (3,408 )

Share-based compensation

    (1,679 )   (974 )   (2,942 )   (1,826 )

Expenses charged to the External Investment Manager

    1,162     436     1,988     727  

Total expenses

    (14,107 )   (11,299 )   (27,795 )   (21,334 )

NET INVESTMENT INCOME

    27,201     23,578     50,692     44,319  

NET REALIZED GAIN (LOSS):

   
 
   
 
   
 
   
 
 

Control investments

    3,324         3,324      

Affiliate investments

    (136 )   (6,578 )   (137 )   (6,578 )

Non-Control/Non-Affiliate investments

    (8,633 )   239     (10,640 )   1,672  

Marketable securities and idle funds investments

    (128 )   (25 )   (240 )   (15 )

Total net realized loss

    (5,573 )   (6,364 )   (7,693 )   (4,921 )

NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):

                         

Portfolio investments

    15,901     17,053     30,105     23,910  

Marketable securities and idle funds investments

    (123 )   298     127     1,346  

SBIC debentures

    (80 )   (840 )   (772 )   (2,029 )

Total net change in unrealized appreciation

    15,698     16,511     29,460     23,227  

INCOME TAXES:

                         

Federal and state income, excise and other taxes

    (1,665 )   (132 )   (2,042 )   (799 )

Deferred taxes

    5,141     (3,643 )   5,810     (4,641 )

Income tax benefit (provision)

    3,476     (3,775 )   3,768     (5,440 )

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

  $ 40,802   $ 29,950   $ 76,227   $ 57,185  

NET INVESTMENT INCOME PER SHARE—BASIC AND DILUTED

  $ 0.55   $ 0.53   $ 1.06   $ 1.05  

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

  $ 0.82   $ 0.68   $ 1.59   $ 1.36  

DIVIDENDS PAID PER SHARE:

                         

Regular monthly dividends

  $ 0.525   $ 0.495   $ 1.035   $ 0.990  

Supplemental dividends

    0.275     0.275     0.275     0.275  

Total dividends

  $ 0.800   $ 0.770   $ 1.310   $ 1.265  

WEIGHTED AVERAGE SHARES OUTSTANDING—BASIC AND DILUTED

    49,883,321     44,216,906     47,992,268     42,069,669  

   

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

(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, 2013

    39,852,604   $ 398   $ 694,981   $ 22,778   $ (26,334 ) $ 100,710   $ 792,533  

Public offering of common stock, net of offering costs

   
4,600,000
   
46
   
139,651
   
   
   
   
139,697
 

Share-based compensation

            1,826                 1,826  

Purchase of vested stock for employee payroll tax withholding

    (36,425 )       (1,149 )               (1,149 )

Dividend reinvestment

    225,613     2     7,347                 7,349  

Amortization of directors' deferred compensation

            160                 160  

Issuance of restricted stock

    228,008     3     (3 )                

Dividends to stockholders

                (52,619 )   (1,572 )       (54,191 )

Net increase (loss) resulting from operations

                44,319     (4,921 )   17,787     57,185  

Balances at June 30, 2014

    44,869,800   $ 449   $ 842,813   $ 14,478   $ (32,827 ) $ 118,497   $ 943,410  

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

            2,942                 2,942  

Purchase of vested stock for employee payroll tax withholding

    (54,790 )   (1 )   (1,737 )               (1,738 )

Dividend reinvestment

    304,100     3     9,394                 9,397  

Amortization of directors' deferred compensation

            185                 185  

Issuance of restricted stock

    240,074     2     (2 )                

Dividends to stockholders

                (62,624 )   (1,319 )       (63,943 )

Net increase (loss) resulting from operations

                50,692     (7,693 )   33,228     76,227  

Balances at June 30, 2015

    49,938,534   $ 499   $ 992,108   $ 11,733   $ (29,468 ) $ 115,944   $ 1,090,816  

   

The accompanying notes are an integral part of these financial statements

4


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 
  Six Months Ended
June 30,
 
 
  2015   2014  

CASH FLOWS FROM OPERATING ACTIVITIES

             

Net increase in net assets resulting from operations

  $ 76,227   $ 57,185  

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

             

Investments in portfolio companies

    (483,365 )   (396,660 )

Proceeds from sales and repayments of debt investments in portfolio companies

    324,309     226,804  

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

    16,174     1,208  

Investments in marketable securities and idle funds investments

    (3,463 )   (11,901 )

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

    3,566     14,461  

Net change in unrealized appreciation

    (29,460 )   (23,227 )

Net realized loss

    7,693     4,921  

Accretion of unearned income

    (4,397 )   (6,020 )

Payment-in-kind interest

    (1,534 )   (3,051 )

Cumulative dividends

    (734 )   (752 )

Share-based compensation expense

    2,942     1,826  

Amortization of deferred financing costs

    1,263     776  

Deferred taxes

    (5,810 )   4,641  

Changes in other assets and liabilities:

             

Interest receivable and other assets

    (1,092 )   (5,122 )

Interest payable

    615     2,440  

Accounts payable and other liabilities

    (3,211 )   (4,573 )

Deferred fees and other

    1,024     586  

Net cash used in operating activities

    (99,253 )   (136,458 )

CASH FLOWS FROM FINANCING ACTIVITIES

   
 
   
 
 

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

    127,764     139,697  

Dividends paid

    (53,470 )   (46,016 )

Proceeds from issuance of SBIC debentures

        24,800  

Proceeds from credit facility

    301,000     213,000  

Repayments on credit facility

    (293,000 )   (197,000 )

Payment of deferred loan costs and SBIC debenture fees

    (130 )   (1,080 )

Purchase of vested stock for employee payroll tax withholding

    (1,738 )   (1,149 )

Other

    (13 )    

Net cash provided by financing activities

    80,413     132,252  

Net decrease in cash and cash equivalents

    (18,840 )   (4,206 )

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

    60,432     34,701  

CASH AND CASH EQUIVALENTS AT END OF PERIOD

  $ 41,592   $ 30,495  

Supplemental cash flow disclosures:

             

Interest paid

  $ 13,575   $ 7,545  

Taxes paid

  $ 2,219   $ 3,089  

Non-cash financing activities:

             

Shares issued pursuant to the DRIP

  $ 9,397   $ 7,349  

5


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments

June 30, 2015

(in thousands)

(Unaudited)

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

Control Investments(5)

 

 

 

 

                   

                           

ASC Interests, LLC

 

Recreational and Educational Shooting Facility

                       

     

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

    2,750     2,712     2,750  

     

Member Units (1,500 units)(8)

          1,500     2,230  

                  4,212     4,980  

                           

Bond-Coat, Inc.

 

Casing and Tubing Coating Services

                       

     

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

    11,596     11,505     11,596  

     

Common Stock (57,508 shares)

          6,350     10,210  

                  17,855     21,806  

                           

Café Brazil, LLC

 

Casual Restaurant Group

                       

     

Member Units (1,233 units)(8)

          1,742     6,980  

                           

CBT Nuggets, LLC

 

Produces and Sells IT Training Certification Videos

                       

     

Member Units (416 units)(8)

          1,300     34,800  

                           

Ceres Management, LLC (Lambs Tire & Automotive)

 

Aftermarket Automotive Services Chain

                       

     

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

    3,738     3,738     3,738  

     

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

          4,298     4,298  

     

Member Units (5,460 units)

          5,273     3,160  

     

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

    943     943     943  

     

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

          625     1,240  

                  14,877     13,379  

                           

CMS Minerals LLC

 

Oil & Gas Exploration & Production

                       

     

Preferred Member Units (458 units)(8)

          3,441     3,441  

                           

Datacom, LLC

 

Technology and Telecommunications Provider

                       

     

8% Secured Debt (Maturity—May 30, 2016)

    675     675     675  

     

10.5% Secured Debt (Maturity—May 31, 2019)

    11,205     11,112     11,112  

     

Preferred Member Units (6,453 units)

          6,030     5,570  

                  17,817     17,357  

                           

6


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

June 30, 2015

(in thousands)

(Unaudited)

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

Garreco, LLC

 

Manufacturer and Supplier of Dental Products

                       

     

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

    5,800     5,727     5,727  

     

Member Units (1,200 units)(8)

          1,200     1,470  

                  6,927     7,197  

                           

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)

    16,541     16,390     16,390  

     

Member Units (5,879 units)(8)

          13,065     13,065  

                  29,455     29,455  

                           

Gulf Manufacturing, LLC

 

Manufacturer of Specialty Fabricated Industrial Piping Products

                       

     

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

    783     783     783  

     

Member Units (438 units)(8)

          2,980     16,540  

                  3,763     17,323  

                           

Harrison Hydra-Gen, Ltd.

 

Manufacturer of Hydraulic Generators

                       

     

12% Secured Debt (Maturity—September 4, 2015)

    5,010     5,010     5,010  

     

Preferred Stock (8% cumulative)(8)

          1,311     1,311  

     

Common Stock (107,456 shares)

          718     2,130  

                  7,039     8,451  

                           

Hawthorne Customs and Dispatch Services, LLC

 

Facilitator of Import Logistics, Brokerage, and Warehousing

                       

     

Member Units (500 units)(8)

          589     580  

     

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

          1,215     2,220  

                  1,804     2,800  

                           

Hydratec, Inc.

 

Designer and Installer of Micro-Irrigation Systems

                       

     

Common Stock (7,095 shares)(8)

          7,095     14,310  

                           

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MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

June 30, 2015

(in thousands)

(Unaudited)

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

IDX Broker, LLC

 

Provider of Marketing and CRM Tools for the Real Estate Industry

                       

     

LIBOR Plus 6.50% (Floor 1.50%), Current Coupon 8.00%, Secured Debt (Maturity—November 18, 2018)(9)

    100     100     100  

     

12.5% Secured Debt (Maturity—November 18, 2018)

    11,350     11,272     11,350  

     

Member Units (5,400 units)

          5,606     6,440  

                  16,978     17,890  

                           

Impact Telecom, Inc.

 

Telecommunications Services Provider

                       

     

LIBOR Plus 6.50% (Floor 2.00%), Current Coupon 8.50%, Secured Debt (Maturity—May 31, 2018)(9)

    1,575     1,570     1,570  

     

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

    22,500     15,893     15,893  

     

Warrants (5,516,667 equivalent shares)

          8,000     4,160  

                  25,463     21,623  

                           

Indianapolis Aviation Partners, LLC

 

Fixed Base Operator

                       

     

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

    3,100     3,065     3,100  

     

Warrants (1,046 equivalent units)

          1,129     2,540  

                  4,194     5,640  

                           

Jensen Jewelers of Idaho, LLC

 

Retail Jewelry Store

                       

     

Prime Plus 6.75% (Floor 2.00%), Current Coupon 10.00%, Secured Debt (Maturity—November 14, 2016)(9)

    4,355     4,311     4,355  

     

Member Units (627 units)(8)

          811     4,600  

                  5,122     8,955  

                           

Lighting Unlimited, LLC

 

Commercial and Residential Lighting Products and Design Services

                       

     

8% Secured Debt (Maturity—August 22, 2015)

    1,514     1,514     1,514  

     

Preferred Equity (non-voting)

          434     434  

     

Warrants (71 equivalent units)

          54     40  

     

Member Units (700 units)(8)

          100     420  

                  2,102     2,408  

                           

Marine Shelters Holdings, LLC (LoneStar Marine Shelters)

 

Fabricator of Marine and Industrial Shelters

                       

     

6% Current / 6% PIK Secured Debt (Maturity—December 28, 2017)

    8,648     8,548     8,548  

     

Preferred Member Units (3,810 units)

          5,352     5,352  

                  13,900     13,900  

                           

8


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

June 30, 2015

(in thousands)

(Unaudited)

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

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)(8)

          1,244     7,390  

     

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

    904     904     904  

     

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

          250     550  

                  8,048     14,494  

                           

MSC Adviser I, LLC(16)

 

Third Party Investment Advisory Services

                       

     

Member Units (Fully diluted 100.0%)(8)

              29,930  

                           

Mystic Logistics, Inc

 

Logistics and Distribution Services Provider for Large Volume Mailers

                       

     

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

    10,000     9,808     10,000  

     

Common Stock (5,873 shares)(8)

          2,720     6,580  

                  12,528     16,580  

                           

NAPCO Precast, LLC

 

Precast Concrete Manufacturing

                       

     

Prime Plus 2.00% (Floor 7.00%), Current Coupon 9.00%, Secured Debt (Maturity—September 1, 2015)(9)

    625     623     625  

     

Prime Plus 2.00% (Floor 7.00%), Current Coupon 9.00%, Secured Debt (Maturity—February 1, 2016)(9)

    2,923     2,919     2,923  

     

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

    4,468     4,453     4,468  

     

Member Units (2,955 units)(8)

          2,975     8,440  

                  10,970     16,456  

                           

NRI Clinical Research, LLC

 

Clinical Research Service Provider

                       

     

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

    4,740     4,640     4,640  

     

Warrants (251,723 equivalent units)

          252     160  

     

Member Units (1,454,167 units)

          765     816  

                  5,657     5,616  

                           

NRP Jones, LLC

 

Manufacturer of Hoses, Fittings and Assemblies

                       

     

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

    13,224     12,823     12,823  

     

Warrants (14,331 equivalent units)

          817     740  

     

Member Units (50,877 units)(8)

          2,900     2,480  

                  16,540     16,043  

                           

9


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

June 30, 2015

(in thousands)

(Unaudited)

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 (1,500 shares)(8)

          1,080     13,420  

                           

Pegasus Research Group, LLC (Televerde)

 

Provider of Telemarketing and Data Services

                       

     

Member Units (460 units)(8)

          1,290     6,490  

                           

PPL RVs, Inc.

 

Recreational Vehicle Dealer

                       

     

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

    9,960     9,960     9,960  

     

Common Stock (1,962 shares)

          2,150     8,430  

                  12,110     18,390  

                           

Principle Environmental, LLC

 

Noise Abatement Service Provider

                       

     

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

    4,060     3,921     4,060  

     

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

    3,277     3,267     3,277  

     

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

          4,663     9,560  

     

Warrants (1,036 equivalent units)

          1,200     530  

                  13,051     17,427  

                           

Quality Lease Service, LLC

 

Provider of Rigsite Accommodation Unit Rentals and Related Services

                       

     

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

    6,250     6,250     6,250  

     

Member Units (1,000 units)

          430     2,500  

                  6,680     8,750  

                           

River Aggregates, LLC

 

Processor of Construction Aggregates

                       

     

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

    750     524     524  

     

Member Units (1,150 units)(8)

          1,150     3,760  

     

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

          369     2,300  

                  2,043     6,584  

                           

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)

    8,330     8,256     8,256  

     

Member Units (4,450 units)(8)

          4,930     4,930  

                  13,186     13,186  

                           

10


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

June 30, 2015

(in thousands)

(Unaudited)

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

Southern RV, LLC

 

Recreational Vehicle Dealer

                       

     

13% Secured Debt (Maturity—August 8, 2018)

    11,400     11,280     11,400  

     

Member Units (1,680 units)(8)

          1,680     6,670  

     

13% Secured Debt (Southern RV Real Estate, LLC) (Maturity—August 8, 2018)

    3,250     3,216     3,250  

     

Member Units (Southern RV Real Estate, LLC) (480 units)

          480     540  

                  16,656     21,860  

                           

The MPI Group, LLC

 

Manufacturer of Custom Hollow Metal Doors, Frames and Accessories

                       

     

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

    2,924     2,920     2,920  

     

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

          2,500     980  

     

Warrants (1,424 equivalent units)

          1,096      

     

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

          2,300     2,230  

                  8,816     6,130  

                           

Travis Acquisition LLC

 

Manufacturer of Aluminum Trailers

                       

     

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

    3,743     3,691     3,744  

     

Member Units (7,282 units)

          7,100     14,110  

                  10,791     17,854  

                           

Uvalco Supply, LLC

 

Farm and Ranch Supply Store

                       

     

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

    1,520     1,520     1,520  

     

Member Units (1,006 units)(8)

          1,113     3,350  

                  2,633     4,870  

                           

Vision Interests, Inc.

 

Manufacturer / Installer of Commercial Signage

                       

     

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

    3,154     3,128     3,128  

     

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

          3,000     3,550  

     

Common Stock (1,126,242 shares)

          3,706     210  

                  9,834     6,888  

                           

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      

     

Member units (10,072 units)

          2,834     2,130  

                  7,676     6,372  

Subtotal Control Investments (27.8% of total investments at fair value)

    344,675     500,035  

                           

11


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

June 30, 2015

(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)

    12,160     11,787     11,787  

     

Warrants (42 equivalent units)

          259     259  

     

Member Units (186 units)

          1,200     1,200  

                  13,246     13,246  

                           

Boss Industries, LLC

 

Manufacturer and Distributor of Air Compressors, Auxiliary Power Units, Gas Booster Systems and Vapor Recovery Systems

                       

     

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

          2,000     2,340  

                           

Bridge Capital Solutions Corporation

 

Financial Services and Cash Flow Solutions Provider

                       

     

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

    7,000     6,854     6,854  

     

Warrants (22 equivalent shares)

          200     1,020  

                  7,054     7,874  

                           

Buca C, LLC

 

Restaurants

                       

     

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

    25,200     24,951     24,951  

     

Preferred Member Units (6 units)(8)

          3,600     3,600  

                  28,551     28,551  

                           

CAI Software LLC

 

Provider of Specialized Enterprise Resource Planning Software

                       

     

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

    5,400     5,352     5,352  

     

Member Units (65,356 units)(8)

          654     840  

                  6,006     6,192  

                           

Condit Exhibits, LLC

 

Tradeshow Exhibits / Custom Displays Provider

                       

     

Member Units (3,936 units)(8)

          100     770  

                           

Congruent Credit Opportunities Funds(12)(13)

 

Investment Partnership

                       

     

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

          15,743     14,559  

     

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

          9,450     9,450  

                  25,193     24,009  

                           

12


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

June 30, 2015

(in thousands)

(Unaudited)

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

Daseke, Inc.

 

Specialty Transportation Provider

                       

     

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

    20,984     20,697     20,984  

     

Common Stock (19,467 shares)

          5,213     22,660  

                  25,910     43,644  

                           

Dos Rios Partners(12)(13)

 

Investment Partnership

                       

     

LP Interests (Dos Rios Partners, LP) (Fully diluted 20.2%)(8)

          2,325     1,312  

     

LP Interests (Dos Rios Partners—A, LP) (Fully diluted 6.4%)(8)

          738     417  

                  3,063     1,729  

                           

East Teak Fine Hardwoods, Inc.

 

Distributor of Hardwood Products

                       

     

Common Stock (5,000 shares)(8)

          480     860  

                           

East West Copolymer & Rubber, LLC

 

Manufacturer of Synthetic Rubbers

                       

     

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

    9,600     9,449     9,449  

     

Warrants (1,823,278 equivalent units)

          50     50  

                  9,499     9,499  

                           

Freeport Financial SBIC Fund LP(12)(13)

 

Investment Partnership

                       

     

LP Interests (Fully diluted 9.9%)(8)

          5,140     5,140  

                           

Gault Financial, LLC (RMB Capital, LLC)

 

Purchases and Manages Liquidation of Distressed Assets

                       

     

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

    13,046     12,820     10,854  

     

Warrants (29,025 equivalent units)

          400      

                  13,220     10,854  

                           

Glowpoint, Inc.

 

Provider of Cloud Managed Video Collaboration Services

                       

     

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

    100     102     102  

     

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

    9,000     8,919     8,919  

     

Common Stock (7,711,517 shares)

          3,958     6,120  

                  12,979     15,141  

                           

Guerdon Modular Holdings, Inc.

 

Multi-Family and Commercial Modular Construction Company

                       

     

11% Secured Debt (Maturity—August 13, 2019)

    10,400     10,267     10,267  

     

Common Stock (170,577 shares)

          2,983     2,983  

                  13,250     13,250  

                           

13


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

June 30, 2015

(in thousands)

(Unaudited)

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

Houston Plating and Coatings, LLC

 

Provider of Plating and Industrial Coating Services

                       

     

Member Units (248,082 units)(8)

          996     11,470  

                           

Indianhead Pipeline Services, LLC

 

Provider of Pipeline Support Services

                       

     

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

    6,450     6,239     6,239  

     

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

          2,157     2,157  

     

Warrants (31,928 equivalent units)

          459      

     

Member Units (14,732 units)

          1      

                  8,856     8,396  

                           

irth Solutions, LLC

 

Provider of Damage Prevention Information Technology Services

                       

     

Member Units (128 units)(8)

          624     6,300  

                           

KBK Industries, LLC

 

Manufacturer of Specialty Oilfield and Industrial Products

                       

     

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

    6,250     6,217     6,250  

     

Member Units (250 units)(8)

          341     4,570  

                  6,558     10,820  

                           

L.F. Manufacturing Holdings, LLC(10)

 

Manufacturer of Fiberglass Products

                       

     

Member Units (2,000,000 units)(8)

          2,019     1,855  

                           

MPS Denver, LLC

 

Specialty Card Printing

                       

     

Member Units (13,800 units)

          1,130     1,130  

                           

OnAsset Intelligence, Inc.

 

Provider of Transportation Monitoring / Tracking Products and Services

                       

     

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

    3,772     3,772     3,772  

     

Preferred Stock (912 shares; 7% cumulative)(8)

          1,981     1,380  

     

Warrants (5,333 equivalent shares)

          1,919      

                  7,672     5,152  

                           

OPI International Ltd.(13)

 

Provider of Man Camp and Industrial Storage Services

                       

     

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

    244     244     244  

     

Common Stock (20,766,317 shares)

          1,371     3,200  

                  1,615     3,444  

                           

PCI Holding Company, Inc.

 

Manufacturer of Industrial Gas Generating Systems

                       

     

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

          2,496     5,092  

                           

14


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

June 30, 2015

(in thousands)

(Unaudited)

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

Radial Drilling Services Inc.

 

Oil and Gas Lateral Drilling Technology Provider

                       

     

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

    4,200     3,886     2,918  

     

Warrants (316 equivalent shares)

          758      

                  4,644     2,918  

                           

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  

                           

Samba Holdings, Inc.

 

Provider of Intelligent Driver Record Monitoring Software and Services

                       

     

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

    26,304     26,129     26,304  

     

Common Stock (170,963 shares)

          2,087     10,270  

                  28,216     36,574  

                           

Tin Roof Acquisition Company

 

Casual Restaurant Group

                       

     

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

    14,100     13,885     13,885  

     

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

          2,355     2,355  

                  16,240     16,240  

                           

Universal Wellhead Services Holdings, LLC(10)

 

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

                       

     

Class A Units (4,000,000 units)(8)

          4,000     3,250  

                           

Volusion, LLC

 

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

                       

     

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

    17,500     16,080     16,080  

     

Warrants (950,618 equivalent units)

          1,400     1,400  

     

Preferred Member Units (4,876,670 units)

          14,000     14,000  

                  31,480     31,480  

Subtotal Affiliate Investments (18.2% of total investments at fair value)

    315,018     327,470  

15


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

June 30, 2015

(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)

 

 

                   

                           

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     10,075     10,229  

                           

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)

    2,256     2,214     2,109  

                           

AM3 Pinnacle Corporation(10)

 

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

                       

     

10% Secured Debt (Maturity—October 22, 2018)

    22,172     22,048     19,548  

     

Common Stock (60,240 shares)

          2,000      

                  24,048     19,548  

                           

AmeriTech College, LLC

 

For-Profit Nursing and Healthcare College

                       

     

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

    685     685     685  

     

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

    4,235     4,235     3,700  

                  4,920     4,385  

                           

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)

    7,947     7,834     7,977  

                           

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)

    2,312     2,312     2,306  

     

Member Units (440,620 units)

          4,928     3,892  

                  7,240     6,198  

                           

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)

    9,913     9,708     9,899  

                           

16


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

June 30, 2015

(in thousands)

(Unaudited)

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

Applied Products, Inc.(10)

 

Adhesives Distributor

                       

     

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

    5,888     5,828     5,828  

                           

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)

    9,866     9,743     9,743  

                           

Artel, LLC(11)

 

Provider of Secure Satellite Network and IT Solutions

                       

     

LIBOR Plus 6.00% (Floor 1.25%), Current Coupon 7.25%, Secured Debt (Maturity—November 27, 2017)(9)

    8,515     8,364     8,323  

                           

ATS Workholding, Inc.(10)

 

Manufacturer of Machine Cutting Tools and Accessories

                       

     

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—March 10, 2019)(9)

    6,651     6,605     6,605  

                           

ATX Networks Corp.(11)(13)

 

Provider of Radio Frequency Management Equipment

                       

     

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—June 14, 2021)(9)

    15,000     14,700     14,963  

                           

Berry Aviation, Inc.(10)

 

Airline Charter Service Operator

                       

     

12.00% Current / 1.75% PIK Secured Debt (Maturity—January 20, 2020)

    5,627     5,574     5,574  

     

Common Stock (553 shares)

          400     400  

                  5,974     5,974  

                           

Bioventus LLC(10)

 

Production of Orthopedic Healing Products

                       

     

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.00%, Secured Debt (Maturity—April 10, 2020)(9)

    5,000     4,910     5,000  

                           

Blackbrush Oil and Gas LP(11)

 

Oil & Gas Exploration

                       

     

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—July 30, 2021)(9)

    4,000     3,973     3,715  

                           

Blackhawk Specialty Tools LLC(11)

 

Oilfield Equipment & Services

                       

     

LIBOR Plus 5.25% (Floor 1.25%), Current Coupon 6.50%, Secured Debt (Maturity—August 1, 2019)(9)

    6,058     6,028     5,877  

                           

17


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

June 30, 2015

(in thousands)

(Unaudited)

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

Blue Bird Body Company(11)

 

School Bus Manufacturer

                       

     

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—June 26, 2020)(9)

    11,213     11,068     11,241  

                           

Bluestem Brands, Inc.(11)(13)

 

Multi-Channel Retailer of General Merchandise

                       

     

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—November 6, 2020)(9)

    6,981