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

FORM 10-Q

(Mark One)    

ý

 

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

For the quarterly period ended March 31, 2020

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)

        Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class   Trading Symbol   Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share   MAIN   New York Stock Exchange

        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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit 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, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

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

Emerging growth company o

        If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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

        The number of shares outstanding of the issuer's common stock as of May 7, 2020 was 64,882,949.

   


Table of Contents


TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION

Item 1.

 

Consolidated Financial Statements

   

 

Consolidated Balance Sheets—March 31, 2020 (unaudited) and December 31, 2019

  1

 

Consolidated Statements of Operations (unaudited)—Three months ended March 31, 2020 and 2019

  2

 

Consolidated Statements of Changes in Net Assets (unaudited)—Three months ended March 31, 2020 and 2019

  3

 

Consolidated Statements of Cash Flows (unaudited)—Three months ended March 31, 2020 and 2019

  4

 

Consolidated Schedule of Investments (unaudited)—March 31, 2020

  5

 

Consolidated Schedule of Investments—December 31, 2019

  30

 

Notes to Consolidated Financial Statements (unaudited)

  56

 

Consolidated Schedules of Investments in and Advances to Affiliates (unaudited)—Three months ended March 31, 2020 and 2019

  98

Item 2.

 

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

  108

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

  128

Item 4.

 

Controls and Procedures

  129


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

  132

Item 6.

 

Exhibits

  133

 

Signatures

  134

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

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

 
  March 31,
2020
  December 31,
2019
 
 
  (Unaudited)
   
 

ASSETS

             

  

             

Investments at fair value:

             

Control investments (cost: $759,425 and $778,367 as of March 31, 2020 and December 31, 2019, respectively)

  $ 978,368   $ 1,032,721  

Affiliate investments (cost: $360,891 and $351,764 as of March 31, 2020 and December 31, 2019, respectively)

    318,247     330,287  

Non-Control/Non-Affiliate investments (cost: $1,270,531 and $1,297,587 as of March 31, 2020 and December 31, 2019, respectively)

    1,076,131     1,239,316  

Total investments (cost: $2,390,847 and $2,427,718 as of March 31, 2020 and December 31, 2019, respectively)

    2,372,746     2,602,324  

  

             

Cash and cash equivalents

    54,188     55,246  

Interest receivable and other assets

    45,135     50,458  

Deferred financing costs (net of accumulated amortization of $7,736 and $7,501 as of March 31, 2020 and December 31, 2019, respectively)

    3,418     3,521  

Total assets

  $ 2,475,487   $ 2,711,549  

LIABILITIES

             

Credit facility

 
$

277,000
 
$

300,000
 

SBIC debentures (par: $304,800 ($50,000 due within one year) and $311,800 as of March 31, 2020 and December 31, 2019, respectively)

    299,146     306,188  

5.20% Notes due 2024 (par: $325,000 as of both March 31, 2020 and December 31, 2019)

    324,511     324,595  

4.50% Notes due 2022 (par: $185,000 as of both March 31, 2020 and December 31, 2019)

    183,381     183,229  

Accounts payable and other liabilities

    17,304     24,532  

Payable for securities purchased

    5,072      

Interest payable

    11,311     7,292  

Dividend payable

    13,218     13,174  

Deferred tax liability, net

    8,374     16,149  

Total liabilities

    1,139,317     1,175,159  

Commitments and contingencies (Note K)

             

NET ASSETS

   
 
   
 
 

Common stock, $0.01 par value per share (150,000,000 shares authorized; 64,462,649 and 64,241,341 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively)

   
645
   
643
 

Additional paid-in capital

    1,523,357     1,512,435  

Total undistributed (overdistributed) earnings

    (187,832 )   23,312  

Total net assets

    1,336,170     1,536,390  

Total liabilities and net assets

  $ 2,475,487   $ 2,711,549  

NET ASSET VALUE PER SHARE

  $ 20.73   $ 23.91  

   

The accompanying notes are an integral part of these consolidated financial statements

1


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Operations

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

(Unaudited)

 
  Three Months Ended March 31,  
 
  2020   2019  

INVESTMENT INCOME:

             

Interest, fee and dividend income:

             

Control investments

  $ 19,474   $ 23,691  

Affiliate investments

    8,164     9,071  

Non-Control/Non-Affiliate investments

    28,512     28,603  

Total investment income

    56,150     61,365  

EXPENSES:

             

Interest

    (12,441 )   (11,916 )

Compensation

    (2,498 )   (6,069 )

General and administrative

    (3,473 )   (3,203 )

Share-based compensation

    (2,837 )   (2,329 )

Expenses allocated to the External Investment Manager

    1,644     1,643  

Total expenses

    (19,605 )   (21,874 )

NET INVESTMENT INCOME

    36,545     39,491  

NET REALIZED GAIN (LOSS):

   
 
   
 
 

Control investments

    (21,472 )   (187 )

Affiliate investments

    (235 )   (3,241 )

Non-Control/Non-Affiliate investments

    (158 )   (2,305 )

Realized loss on extinguishment of debt

    (534 )   (5,689 )

Total net realized loss

    (22,399 )   (11,422 )

NET UNREALIZED APPRECIATION (DEPRECIATION):

             

Control investments

    (35,410 )   4,946  

Affiliate investments

    (21,166 )   2,376  

Non-Control/Non-Affiliate investments

    (137,732 )   3,902  

SBIC debentures

    460     5,177  

Total net unrealized appreciation (depreciation)

    (193,848 )   16,401  

INCOME TAXES:

             

Federal and state income, excise and other taxes

    294     (702 )

Deferred taxes

    7,970     (2,367 )

Income tax benefit (provision)

    8,264     (3,069 )

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

  $ (171,438 ) $ 41,401  

NET INVESTMENT INCOME PER SHARE—BASIC AND DILUTED

  $ 0.57   $ 0.64  

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

  $ (2.66 ) $ 0.67  

WEIGHTED AVERAGE SHARES OUTSTANDING—BASIC AND DILUTED

    64,536,471     61,864,688  

   

The accompanying notes are an integral part of these consolidated financial statements

2


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Changes in Net Assets

(dollars in thousands, except shares)

(Unaudited)

 
  Common Stock    
   
   
 
 
   
  Total
Undistributed
(Overdistributed)
Earnings
   
 
 
  Number
of Shares
  Par
Value
  Additional
Paid-In
Capital
  Total Net
Asset Value
 

Balances at December 31, 2018

    61,264,861   $ 613   $ 1,409,945   $ 65,491   $ 1,476,049  

Public offering of common stock, net of offering costs

   
960,684
   
9
   
35,376
   
   
35,385
 

Share-based compensation

            2,329         2,329  

Dividend reinvestment

    96,189     1     3,595         3,596  

Amortization of directors' deferred compensation

            216         216  

Issuance of restricted stock

    52,043     1     (1 )        

Dividends to stockholders

            70     (36,549 )   (36,479 )

Net increase resulting from operations

                41,401     41,401  

Balances at March 31, 2019

    62,373,777   $ 624   $ 1,451,530   $ 70,343   $ 1,522,497  

Balances at December 31, 2019

    64,252,937   $ 643   $ 1,512,435   $ 23,312   $ 1,536,390  

Public offering of common stock, net of offering costs

    91,458     1     3,854         3,855  

Share-based compensation

            2,837         2,837  

Purchase of vested stock for employee payroll tax withholding

    (851 )       (29 )       (29 )

Dividend reinvestment

    108,722     1     3,929         3,930  

Amortization of directors' deferred compensation

            238         238  

Issuance of restricted stock, net of forfeited shares

    10,383                  

Dividends to stockholders

            93     (39,706 )   (39,613 )

Net decrease resulting from operations

                (171,438 )   (171,438 )

Balances at March 31, 2020

    64,462,649   $ 645   $ 1,523,357   $ (187,832 ) $ 1,336,170  

   

The accompanying notes are an integral part of these consolidated financial statements

3


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Cash Flows

(dollars in thousands)

 
  Three Months Ended March 31,  
 
  2020   2019  

CASH FLOWS FROM OPERATING ACTIVITIES

             

Net increase (decrease) in net assets resulting from operations

  $ (171,438 ) $ 41,401  

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

             

Investments in portfolio companies

    (138,608 )   (128,460 )

Proceeds from sales and repayments of debt investments in portfolio companies

    157,027     58,704  

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

    3,180     12,069  

Net unrealized (appreciation) depreciation

    193,848     (16,401 )

Net realized loss

    22,399     11,422  

Accretion of unearned income

    (3,583 )   (2,375 )

Payment-in-kind interest

    (591 )   (1,183 )

Cumulative dividends

    (542 )   (661 )

Share-based compensation expense

    2,837     2,329  

Amortization of deferred financing costs

    663     821  

Deferred tax (benefit) provision

    (7,970 )   2,367  

Changes in other assets and liabilities:

             

Interest receivable and other assets

    5,914     (6,478 )

Interest payable

    4,019     702  

Accounts payable and other liabilities

    (6,990 )   597  

Deferred fees and other

    1,198     584  

Net cash provided by (used in) operating activities

    61,363     (24,562 )

CASH FLOWS FROM FINANCING ACTIVITIES

   
 
   
 
 

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

    3,855     35,385  

Dividends paid

    (35,639 )   (32,386 )

Proceeds from issuance of SBIC debentures

    15,000      

Repayments of SBIC debentures

    (22,000 )   (24,000 )

Proceeds from credit facility

    94,000     94,000  

Repayments on credit facility

    (117,000 )   (55,000 )

Payment of deferred issuance costs and SBIC debenture fees

    (608 )   (250 )

Purchases of vested stock for employee payroll tax withholding

    (29 )    

Net cash provided by (used in) financing activities

    (62,421 )   17,749  

Net decrease in cash and cash equivalents

    (1,058 )   (6,813 )

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

    55,246     54,181  

CASH AND CASH EQUIVALENTS AT END OF PERIOD

  $ 54,188   $ 47,368  

Supplemental cash flow disclosures:

             

Interest paid

  $ 7,729   $ 10,362  

Taxes paid

  $ 1,466   $ 1,340  

Operating non-cash activities:

             

Right-of-use assets obtained in exchange for operating lease liabilities

  $ 5,240   $ 5,240  

Non-cash financing activities:

             

Shares issued pursuant to the DRIP

  $ 3,930   $ 3,596  

   

The accompanying notes are an integral part of these consolidated financial statements

4


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments

March 31, 2020

(dollars in thousands)

Portfolio Company(1)(20)
  Investment Date(26)
  Business Description
  Type of Investment(2)(3)(25)
  Principal(4)
  Cost(4)
  Fair Value(18)
 
   

Control Investments(5)

     

 

 

 

                   

                               

Access Media Holdings, LLC(10)

  July 22, 2015  

Private Cable Operator

                       

         

10.00% PIK Secured Debt (Maturity—July 22, 2020)(14)(19)

  $ 23,828   $ 23,828   $ 4,425  

         

Preferred Member Units (9,481,500 units)(24)

          9,375     (284 )

         

Member Units (45 units)

          1      

                      33,204     4,141  

                               

ASC Interests, LLC

  August 1, 2013  

Recreational and Educational Shooting Facility

                       

         

12.50% Secured Debt (Maturity—July 31, 2022)

    1,650     1,602     1,602  

         

Member Units (1,500 units)

          1,500     1,050  

                      3,102     2,652  

                               

Analytical Systems Keco, LLC

  August 16, 2019  

Manufacturer of Liquid and Gas Analyzers

                       

         

LIBOR Plus 10.00% (Floor 2.00%), Current Coupon 12.00%, Secured Debt (Maturity—August 16, 2024)(9)

    5,495     5,158     5,158  

         

Preferred Member Units (3,200 units)

          3,200     4,060  

         

Warrants (420 equivalent shares; Expiration—August 16, 2029; Strike price—$0.01 per share)

          316     540  

                      8,674     9,758  

                               

ATS Workholding, LLC(10)

  March 10, 2014  

Manufacturer of Machine Cutting Tools and Accessories

                       

         

5% Secured Debt (Maturity—November 16, 2021)

    4,919     4,697     3,933  

         

Preferred Member Units (3,725,862 units)

          3,726      

                      8,423     3,933  

                               

Bond-Coat, Inc.

  December 28, 2012  

Casing and Tubing Coating Services

                       

         

Common Stock (57,508 shares)

          6,350     7,020  

                               

Brewer Crane Holdings, LLC

  January 9, 2018  

Provider of Crane Rental and Operating Services

                       

         

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.58%, Secured Debt (Maturity—January 9, 2023)(9)

    8,928     8,870     8,870  

         

Preferred Member Units (2,950 units)(8)

          4,280     4,280  

                      13,150     13,150  

                               

Bridge Capital Solutions Corporation

  April 18, 2012  

Financial Services and Cash Flow Solutions Provider

                       

         

13.00% Secured Debt (Maturity—December 11, 2024)

    8,813     7,938     7,938  

         

Warrants (82 equivalent shares; Expiration—July 25, 2026; Strike price—$0.01 per share)

          2,132     3,320  

         

13.00% Secured Debt (Mercury Service Group, LLC) (Maturity—December 11, 2024)

    1,000     997     997  

         

Preferred Member Units (Mercury Service Group, LLC) (17,742 units)(8)

          1,000     1,000  

                      12,067     13,255  

                               

Café Brazil, LLC

  April 20, 2004  

Casual Restaurant Group

                       

         

Member Units (1,233 units)(8)

          1,742     2,180  

                               

5


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 2020

(dollars in thousands)

Portfolio Company(1)(20)
  Investment Date(26)
  Business Description
  Type of Investment(2)(3)(25)
  Principal(4)
  Cost(4)
  Fair Value(18)
 
   

California Splendor Holdings LLC

  March 30, 2018  

Processor of Frozen Fruits

                       

         

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—March 30, 2023)(9)

    1,429     1,314     1,416  

         

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 12.00%, Secured Debt (Maturity—March 30, 2023)(9)

    28,000     27,814     27,749  

         

Preferred Member Units (6,725 units)(8)

          7,434     7,434  

         

Preferred Member Units (6,157 units)(8)

          10,775     5,781  

                      47,337     42,380  

                               

CBT Nuggets, LLC ("CBT")

  June 1, 2006  

Produces and Sells IT Training Certification Videos

                       

         

Member Units (416 units)

          1,300     47,620  

                               

Centre Technologies Holdings, LLC

  January 4, 2019  

Provider of IT Hardware Services and Software Solutions

                       

         

LIBOR Plus 10.00% (Floor 2.00%), Current Coupon 12.00%, Secured Debt (Maturity—January 4, 2024)(9)

    12,087     11,990     11,990  

         

Preferred Member Units (12,696 units)

          5,840     5,840  

                      17,830     17,830  

                               

Chamberlin Holding LLC

  February 26, 2018  

Roofing and Waterproofing Specialty Contractor

                       

         

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.63%, Secured Debt (Maturity—February 26, 2023)(9)

    17,773     17,657     17,773  

         

Member Units (4,347 units)(8)

          11,440     24,150  

         

Member Units (Chamberlin Langfield Real Estate, LLC) (1,047,146 units)(8)

          1,047     920  

                      30,144     42,843  

                               

Charps, LLC

  February 3, 2017  

Pipeline Maintenance and Construction

                       

         

15.00% Secured Debt (Maturity—June 5, 2022)

    2,000     2,000     2,000  

         

Preferred Member Units (1,600 units)(8)

          400     7,560  

                      2,400     9,560  

                               

Clad-Rex Steel, LLC

  December 20, 2016  

Specialty Manufacturer of Vinyl-Clad Metal

                       

         

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 11.08%, Secured Debt (Maturity—December 20, 2021)(9)

    10,880     10,835     10,880  

         

Member Units (717 units)(8)

          7,280     8,610  

         

10.00% Secured Debt (Clad-Rex Steel RE Investor, LLC) (Maturity—December 20, 2036)

    1,131     1,120     1,131  

         

Member Units (Clad-Rex Steel RE Investor, LLC) (800 units)

          210     460  

                      19,445     21,081  

                               

CMS Minerals Investments

  January 30, 2015  

Oil & Gas Exploration & Production

                       

         

Member Units (CMS Minerals II, LLC) (100 units)(8)

          2,333     1,455  

                               

6


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 2020

(dollars in thousands)

Portfolio Company(1)(20)
  Investment Date(26)
  Business Description
  Type of Investment(2)(3)(25)
  Principal(4)
  Cost(4)
  Fair Value(18)
 
   

Cody Pools, Inc.

  March 6, 2020  

Designer of Residential and Commercial Pools

                       

         

LIBOR Plus 10.50% (Floor 1.75%), Current Coupon 12.50%, Secured Debt (Maturity—March 6, 2025)(9)

    16,000     15,842     15,842  

         

Preferred Member Units (587 units)

          8,317     8,317  

                      24,159     24,159  

                               

CompareNetworks Topco, LLC

  January 29, 2019  

Internet Publishing and Web Search Portals

                       

         

LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 12.63%, Secured Debt (Maturity—January 29, 2024)(9)

    8,014     7,945     7,945  

         

Preferred Member Units (1,975 units)

          1,975     3,430  

                      9,920     11,375  

                               

Copper Trail Fund Investments(12)(13)

  July 17, 2017  

Investment Partnership

                       

         

LP Interests (CTMH, LP) (Fully diluted 38.8%)

          792     792  

                               

Datacom, LLC

  May 30, 2014  

Technology and Telecommunications Provider

                       

         

8.00% Secured Debt (Maturity—May 31, 2021)(14)

    1,800     1,800     1,615  

         

10.50% PIK Secured Debt (Maturity—May 31, 2021)(14)(19)

    12,507     12,475     10,142  

         

Class A Preferred Member Units

          1,294      

         

Class B Preferred Member Units (6,453 units)

          6,030      

                      21,599     11,757  

                               

Digital Products Holdings LLC

  April 1, 2018  

Designer and Distributor of Consumer Electronics

                       

         

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.63%, Secured Debt (Maturity—April 1, 2023)(9)

    19,290     19,160     17,795  

         

Preferred Member Units (3,857 shares)(8)

          9,501     2,378  

                      28,661     20,173  

                               

Direct Marketing Solutions, Inc.

  February 13, 2018  

Provider of Omni-Channel Direct Marketing Services

                       

         

LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 12.63%, Secured Debt (Maturity—February 13, 2023)(9)

    15,482     15,371     15,482  

         

Preferred Stock (8,400 shares)

          8,400     20,060  

                      23,771     35,542  

                               

Gamber-Johnson Holdings, LLC ("GJH")

  June 24, 2016  

Manufacturer of Ruggedized Computer Mounting Systems

                       

         

LIBOR Plus 6.50% (Floor 2.00%), Current Coupon 8.50%, Secured Debt (Maturity—June 24, 2021)(9)

    18,238     18,180     18,238  

         

Member Units (8,619 units)(8)

          14,844     53,240  

                      33,024     71,478  

                               

7


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 2020

(dollars in thousands)

Portfolio Company(1)(20)
  Investment Date(26)
  Business Description
  Type of Investment(2)(3)(25)
  Principal(4)
  Cost(4)
  Fair Value(18)
 
   

Garreco, LLC

  July 15, 2013  

Manufacturer and Supplier of Dental Products

                       

         

LIBOR Plus 8.00% (Floor 1.00%, Ceiling 1.50%), Current Coupon 9.50%, Secured Debt (Maturity—January 31, 2021)(9)

    4,519     4,518     4,518  

         

Member Units (1,200 units)

          1,200     2,080  

                      5,718     6,598  

                               

GRT Rubber Technologies LLC ("GRT")

  December 19, 2014  

Manufacturer of Engineered Rubber Products

                       

         

LIBOR Plus 7.00%, Current Coupon 8.58%, Secured Debt (Maturity—December 31, 2023)

    16,775     16,775     16,775  

         

Member Units (5,879 units)(8)

          13,065     45,430  

                      29,840     62,205  

                               

Guerdon Modular Holdings, Inc.

  August 13, 2014  

Multi-Family and Commercial Modular Construction Company

                       

         

Preferred Stock (404,998 shares)

          1,140      

         

Common Stock (212,033 shares)

          2,983      

         

Warrants (6,208,877 equivalent shares; Expiration—April 25, 2028; Strike price—$0.01 per share)

               

                      4,123      

                               

Gulf Manufacturing, LLC

  August 31, 2007  

Manufacturer of Specialty Fabricated Industrial Piping Products

                       

         

Member Units (438 units)(8)

          2,980     5,250  

                               

Gulf Publishing Holdings, LLC

  April 29, 2016  

Energy Industry Focused Media and Publishing

                       

         

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 11.08%, Secured Debt (Maturity—September 30, 2020)(9)

    240     240     240  

         

12.50% Secured Debt (Maturity—April 29, 2021)

    12,535     12,500     12,361  

         

Member Units (3,681 units)

          3,681      

                      16,421     12,601  

                               

Harborside Holdings, LLC

  March 20, 2017  

Real Estate Holding Company

                       

         

Member units (100 units)

          6,506     9,560  

                               

Harris Preston Fund Investments(12)(13)

  October 1, 2017  

Investment Partnership

                       

         

LP Interests (2717 MH, L.P.) (Fully diluted 49.3%)

          2,735     3,157  

                               

Harrison Hydra-Gen, Ltd.

  June 4, 2010  

Manufacturer of Hydraulic Generators

                       

         

Common Stock (107,456 shares)(8)

          718     6,360  

                               

IDX Broker, LLC

  November 15, 2013  

Provider of Marketing and CRM Tools for the Real Estate Industry

                       

         

11.00% Secured Debt (Maturity—November 15, 2020)

    12,600     12,571     12,600  

         

Preferred Member Units (5,607 units)(8)

          5,952     17,900  

                      18,523     30,500  

                               

8


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 2020

(dollars in thousands)

Portfolio Company(1)(20)
  Investment Date(26)
  Business Description
  Type of Investment(2)(3)(25)
  Principal(4)
  Cost(4)
  Fair Value(18)
 
   

Jensen Jewelers of Idaho, LLC

  November 14, 2006  

Retail Jewelry Store

                       

         

Prime Plus 6.75% (Floor 2.00%), Current Coupon 11.50%, Secured Debt (Maturity—November 14, 2023)(9)

    3,900     3,864     3,848  

         

Member Units (627 units)(8)

          811     7,800  

                      4,675     11,648  

                               

J&J Services, Inc.

  October 31, 2019  

Provider of Dumpster and Portable Toilet Rental Services

                       

         

11.50% Secured Debt (Maturity—October 31, 2024)

    17,600     17,437     17,437  

         

Preferred Stock (2,814 shares)

          7,160     7,160  

                      24,597     24,597  

                               

KBK Industries, LLC

  January 23, 2006  

Manufacturer of Specialty Oilfield and Industrial Products

                       

         

Member Units (325 units)(8)

          783     15,030  

                               

Kickhaefer Manufacturing Company, LLC

  October 31, 2018  

Precision Metal Parts Manufacturing

                       

         

11.50% Secured Debt (Maturity—October 31, 2023)

    25,360     25,156     25,156  

         

Member Units (581 units)

          12,240     11,450  

         

9.00% Secured Debt (Maturity—October 31, 2048)

    3,971     3,932     3,932  

         

Member Units (KMC RE Investor, LLC) (800 units)(8)

          992     1,160  

                      42,320     41,698  

                               

Market Force Information, LLC

  July 28, 2017  

Provider of Customer Experience Management Services

                       

         

8.00% PIK Secured Debt (Maturity—July 28, 2022)(19)

    2,786     2,786     2,322  

         

12.00% PIK Secured Debt (Maturity—July 28, 2022)(19)

    23,292     23,165     17,519  

         

Member Units (743,921 units)

          16,642      

                      42,593     19,841  

                               

MH Corbin Holding LLC

  August 31, 2015  

Manufacturer and Distributor of Traffic Safety Products

                       

         

13.00% Current Secured Debt (Maturity—March 31, 2022)

    8,810     8,743     8,742  

         

Preferred Member Units (66,000 shares)

          4,400     4,370  

         

Preferred Member Units (4,000 shares)

          6,000      

                      19,143     13,112  

                               

Mid-Columbia Lumber Products, LLC

  December 18, 2006  

Manufacturer of Finger-Jointed Lumber Products

                       

         

Member Units (7,874 units)

          4,239      

         

9.50% Secured Debt (Mid-Columbia Real Estate, LLC) (Maturity—May 13, 2025)

    689     689     689  

         

Member Units (Mid-Columbia Real Estate, LLC) (500 units)(8)

          790     1,640  

                      5,718     2,329  

                               

MSC Adviser I, LLC(16)

  November 22, 2013  

Third Party Investment Advisory Services

                       

         

Member Units (Fully diluted 100.0%)(8)

              61,580  

                               

9


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 2020

(dollars in thousands)

Portfolio Company(1)(20)
  Investment Date(26)
  Business Description
  Type of Investment(2)(3)(25)
  Principal(4)
  Cost(4)
  Fair Value(18)
 
   

Mystic Logistics Holdings, LLC

  August 18, 2014  

Logistics and Distribution Services Provider for Large Volume Mailers

                       

         

12.00% Secured Debt (Maturity—January 17. 2022)(17)

    6,974     6,957     6,957  

         

Common Stock (5,873 shares)(8)

          2,720     10,190  

                      9,677     17,147  

                               

NAPCO Precast, LLC

  January 31, 2008  

Precast Concrete Manufacturing

                       

         

Member Units (2,955 units)(8)

          2,975     11,910  

                               

NexRev LLC

  February 28, 2018  

Provider of Energy Efficiency Products & Services

                       

         

11.00% PIK Secured Debt (Maturity—February 28, 2023)(19)

    17,533     17,425     15,724  

         

Preferred Member Units (86,400,000 units)(8)

          6,880      

                      24,305     15,724  

                               

NRI Clinical Research, LLC

  September 8, 2011  

Clinical Research Service Provider

                       

         

LIBOR Plus 6.50% (Floor 1.50%), Current Coupon 8.00%, Secured Debt (Maturity—June 8, 2022)(9)

    500     500     500  

         

9.00% Secured Debt (Maturity—June 8, 2022)

    7,000     6,912     7,000  

         

Warrants (251,723 equivalent units; Expiration—June 8, 2027; Strike price—$0.01 per unit)

          252     1,390  

         

Member Units (1,454,167 units)(8)

          765     5,321  

                      8,429     14,211  

                               

NRP Jones, LLC

  December 22, 2011  

Manufacturer of Hoses, Fittings and Assemblies

                       

         

12.00% Secured Debt (Maturity—March 20, 2023)

    6,376     6,376     6,376  

         

Member Units (65,962 units)(8)

          3,717     3,490  

                      10,093     9,866  

                               

NuStep, LLC

  January 31, 2017  

Designer, Manufacturer and Distributor of Fitness Equipment

                       

         

12.00% Secured Debt (Maturity—January 31, 2022)

    19,640     19,554     19,554  

         

Preferred Member Units (406 units)

          10,200     10,200  

                      29,754     29,754  

                               

OMi Holdings, Inc.

  April 1, 2008  

Manufacturer of Overhead Cranes

                       

         

Common Stock (1,500 shares)(8)

          1,080     18,030  

                               

Pegasus Research Group, LLC

  January 6, 2011  

Provider of Telemarketing and Data Services

                       

         

Member Units (460 units)

          1,290     9,960  

                               

PPL RVs, Inc.

  June 10, 2010  

Recreational Vehicle Dealer

                       

         

LIBOR Plus 8.75% PIK (Floor 0.50%), Current Coupon 10.66% PIK, Secured Debt (Maturity—November 15, 2022)(9)(19)

    12,105     11,991     11,991  

         

Common Stock (1,962 shares)

          2,150     10,620  

                      14,141     22,611  

                               

10


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 2020

(dollars in thousands)

Portfolio Company(1)(20)
  Investment Date(26)
  Business Description
  Type of Investment(2)(3)(25)
  Principal(4)
  Cost(4)
  Fair Value(18)
 
   

Principle Environmental, LLC (d/b/a TruHorizon Environmental Solutions)

  February 1, 2011  

Noise Abatement Service Provider

                       

         

13.00% Secured Debt (Maturity—April 30, 2020)

    6,397     6,392     6,397  

         

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

          4,600     13,740  

         

Warrants (1,018 equivalent units; Expiration—January 31, 2021; Strike price—$0.01 per unit)

          1,200     1,140  

                      12,192     21,277  

                               

Quality Lease Service, LLC

  June 8, 2015  

Provider of Rigsite Accommodation Unit Rentals and Related Services

                       

         

Member Units (1,000 units)

          11,313     6,249  

                               

River Aggregates, LLC

  March 30, 2011  

Processor of Construction Aggregates

                       

         

Zero Coupon Secured Debt (Maturity—June 30, 2018)(17)

    750     750     722  

         

Member Units (1,150 units)(8)

          1,150     6,160  

         

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

          369     3,249  

                      2,269     10,131  

                               

Tedder Industries, LLC

  August 31, 2018  

Manufacturer of Firearm Holsters and Accessories

                       

         

12.00% Secured Debt (Maturity—August 31, 2020)

    640     640     640  

         

12.00% Secured Debt (Maturity—August 31, 2023)

    16,400     16,279     16,279  

         

Preferred Member Units (479 units)

          8,136     8,136  

                      25,055     25,055  

                               

Trantech Radiator Topco, LLC

  May 31, 2019  

Transformer Cooling Products and Services

                       

         

12.00% Secured Debt (Maturity—May 31, 2024)

    8,880     8,789     8,789  

         

Common Stock (615 shares)(8)

          4,655     6,619  

                      13,444     15,408  

                               

Vision Interests, Inc.

  June 5, 2007  

Manufacturer / Installer of Commercial Signage

                       

         

13.00% Secured Debt (Maturity—September 30, 2019)(17)

    2,028     2,028     2,028  

         

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

          3,000     3,459  

         

Common Stock (1,126,242 shares)

          3,706     170  

                      8,734     5,657  

                               

Ziegler's NYPD, LLC

  October 1, 2008  

Casual Restaurant Group

                       

         

6.50% Secured Debt (Maturity—October 1, 2020)

    1,006     1,006     904  

         

12.00% Secured Debt (Maturity—October 1, 2020)

    631     631     631  

         

14.00% Secured Debt (Maturity—October 1, 2020)

    2,783     2,783     2,504  

         

Warrants (587 equivalent units; Expiration—October 1, 2020; Strike price—$0.01 per unit)

          600      

         

Preferred Member Units (10,072 units)

          2,834     1,139  

                      7,854     5,178  

Subtotal Control Investments (73.2% of net assets at fair value)

  $ 759,425   $ 978,368  

11


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 2020

(dollars in thousands)

Portfolio Company(1)(20)
  Investment Date(26)
  Business Description
  Type of Investment(2)(3)(25)
  Principal(4)
  Cost(4)
  Fair Value(18)
 
   
                                 

Affiliate Investments(6)

     

 

 

 

                   

                               

AFG Capital Group, LLC

  November 7, 2014  

Provider of Rent-to-Own Financing Solutions and Services

                       

         

10.00% Secured Debt (Maturity—May 25, 2022)

  $ 751   $ 751   $ 751  

         

Preferred Member Units (186 units)

          1,200     5,060  

                      1,951     5,811  

                               

American Trailer Rental Group LLC

  June 7, 2017  

Provider of Short-term Trailer and Container Rental

                       

         

Member Units (Milton Meisler Holdings LLC) (73,493 units)

          8,596     12,950  

                               

BBB Tank Services, LLC

  April 8, 2016  

Maintenance, Repair and Construction Services to the Above-Ground Storage Tank Market

                       

         

LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 12.58%, (Maturity—April 8, 2021)(9)

    4,800     4,716     4,665  

         

Preferred Stock (non-voting)(8)

          136     136  

         

Member Units (800,000 units)

          800     210  

                      5,652     5,011  

                               

Boccella Precast Products LLC

  June 30, 2017  

Manufacturer of Precast Hollow Core Concrete

                       

         

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.91%, Secured Debt (Maturity—June 30, 2022)(9)

    12,880     12,757     12,880  

         

Member Units (2,160,000 units)(8)

          2,256     5,660  

                      15,013     18,540  

                               

Buca C, LLC

  June 30, 2015  

Casual Restaurant Group

                       

         

LIBOR Plus 9.25% (Floor 1.00%), Current Coupon 10.61%, Secured Debt (Maturity—June 30, 2020)(9)

    19,004     18,992     16,984  

         

Preferred Member Units (6 units; 6% cumulative)(8)(19)

          4,770     765  

                      23,762     17,749  

                               

CAI Software LLC

  October 10, 2014  

Provider of Specialized Enterprise Resource Planning Software

                       

         

11.00% Secured Debt (Maturity—December 7, 2023)

    9,144     9,065     9,144  

         

Member Units (66,968 units)(8)

          751     5,270  

                      9,816     14,414  

                               

Chandler Signs Holdings, LLC(10)

  January 4, 2016  

Sign Manufacturer

                       

         

Class A Units (1,500,000 units)(8)

          1,500     2,540  

                               

Charlotte Russe, Inc(11)

  May 28, 2013  

Fast-Fashion Retailer to Young Women

                       

         

Common Stock (19,041 shares)

          3,141      

                               

Classic H&G Holdings, LLC

  March 12, 2020  

Provider of Engineered Packaging Solutions

                       

         

12.00% Secured Debt (Maturity—March 12, 2025)

    26,000     25,743     25,743  

         

Preferred Member Units (154 units)

          5,760     5,760  

                      31,503     31,503  

                               

12


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 2020

(dollars in thousands)

Portfolio Company(1)(20)
  Investment Date(26)
  Business Description
  Type of Investment(2)(3)(25)
  Principal(4)
  Cost(4)
  Fair Value(18)
 
   
                                 

Congruent Credit Opportunities Funds(12)(13)

  January 24, 2012  

Investment Partnership

                       

         

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

          5,210     855  

         

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

          12,589     11,574  

                      17,799     12,429  

                               

Copper Trail Fund Investments(12)(13)

  July 17, 2017  

Investment Partnership

                       

         

LP Interests (Copper Trail Energy Fund I, LP) (Fully diluted 12.4%)(8)

          1,997     2,362  

                               

Dos Rios Partners(12)(13)

  April 25, 2013  

Investment Partnership

                       

         

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

          5,846     6,848  

         

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

          1,856     2,174  

                      7,702     9,022  

                               

East Teak Fine Hardwoods, Inc.

  April 13, 2006  

Distributor of Hardwood Products

                       

         

Common Stock (6,250 shares)

          480     300  

                               

EIG Fund Investments(12)(13)

  November 6, 2015  

Investment Partnership

                       

         

LP Interests (EIG Global Private Debt Fund—A, L.P.) (Fully diluted 11.1%)(8)

          723     562  

                               

Freeport Financial Funds(12)(13)

  June 13, 2013  

Investment Partnership

                       

         

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

          5,974     5,039  

         

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

          10,945     9,633  

                      16,919     14,672  

                               

Fuse, LLC(11)

  June 30, 2019  

Cable Networks Operator

                       

         

12% Secured Debt (Maturity—June 28, 2024)

    1,939     1,939     1,939  

         

Common Stock (10,429 shares)

          256     256  

                      2,195     2,195  

                               

Harris Preston Fund Investments(12)(13)

  August 9, 2017  

Investment Partnership

                       

         

LP Interests (HPEP 3, L.P.) (Fully diluted 8.2%)

          2,819     2,819  

                               

Hawk Ridge Systems, LLC(13)

  December 2, 2016  

Value-Added Reseller of Engineering Design and Manufacturing Solutions

                       

         

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.58%, Secured Debt (Maturity—December 2, 2021)(9)

    600     600     600  

         

11.00% Secured Debt (Maturity—December 2, 2021)

    13,400     13,342     13,400  

         

Preferred Member Units (226 units)(8)

          2,850     7,320  

         

Preferred Member Units (HRS Services, ULC) (226 units)

          150     390  

                      16,942     21,710  

                               

13


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 2020

(dollars in thousands)

Portfolio Company(1)(20)
  Investment Date(26)
  Business Description
  Type of Investment(2)(3)(25)
  Principal(4)
  Cost(4)
  Fair Value(18)
 
   
                                 

Houston Plating and Coatings, LLC

  January 8, 2003  

Provider of Plating and Industrial Coating Services

                       

         

8.00% Unsecured Convertible Debt (Maturity—May 1, 2022)

    3,000     3,000     3,690  

         

Member Units (322,297 units)(8)

          2,352     8,840  

                      5,352     12,530  

                               

I-45 SLF LLC(12)(13)

  October 20, 2015  

Investment Partnership

                       

         

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

          17,000     9,751  

                               

L.F. Manufacturing Holdings, LLC(10)

  December 23, 2013  

Manufacturer of Fiberglass Products

                       

         

Preferred Member Units (non-voting; 14% cumulative)(8)(19)

          84     84  

         

Member Units (2,179,001 units)

          2,019     2,050  

                      2,103     2,134  

                               

OnAsset Intelligence, Inc.

  April 18, 2011  

Provider of Transportation Monitoring / Tracking Products and Services

                       

         

12.00% PIK Secured Debt (Maturity—June 30, 2021)(19)

    6,671     6,671     6,671  

         

10.00% PIK Unsecured Debt (Maturity—June 30, 2021)(19)

    60     60     60  

         

Preferred Stock (912 shares)

          1,981      

         

Warrants (5,333 equivalent shares; Expiration—April 18, 2021; Strike price—$0.01 per share)

          1,919      

                      10,631     6,731  

                               

PCI Holding Company, Inc.

  December 18, 2012  

Manufacturer of Industrial Gas Generating Systems

                       

         

12.00% Current, Secured Debt (Maturity—March 31, 2020)(17)

    11,356     11,356     11,356  

         

Preferred Stock (1,740,000 shares) (non-voting)

          1,740     4,350  

         

Preferred Stock (1,500,000 shares)

          3,927     3,940  

                      17,023     19,646  

                               

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

  January 8, 2013  

Provider of Rigsite Accommodation Unit Rentals and Related Services

                       

         

12.00% Secured Debt (Maturity—January 8, 2018)(14)(15)

    30,369     29,865      

         

Preferred Member Units (250 units)

          2,500      

                      32,365      

                               

Salado Stone Holdings, LLC(10)

  June 27, 2016  

Limestone and Sandstone Dimension Cut Stone Mining Quarries

                       

         

Class A Preferred Units (Salado Acquisition, LLC) (2,000,000 units)

          2,000     430  

                               

SI East, LLC

  August 31, 2018  

Rigid Industrial Packaging Manufacturing

                       

         

9.50% Current, Secured Debt (Maturity—August 31, 2023)

    32,963     32,705     32,963  

         

Preferred Member Units (157 units)(8)

          6,000     8,650  

                      38,705     41,613  

                               

14


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 2020

(dollars in thousands)

Portfolio Company(1)(20)
  Investment Date(26)
  Business Description
  Type of Investment(2)(3)(25)
  Principal(4)
  Cost(4)
  Fair Value(18)
 
   
                                 

Slick Innovations, LLC

  September 13, 2018  

Text Message Marketing Platform

                       

         

14.00% Current, Secured Debt (Maturity—September 13, 2023)

    6,360     6,206     6,206  

         

Common Stock (70,000 shares)(8)

          700     1,080  

         

Warrants (18,084 equivalent units; Expiration—September 13, 2028; Strike price—$0.01 per unit)

          181     290