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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, 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 August 6, 2020 was 65,865,341.

   


Table of Contents


TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION

Item 1.

 

Consolidated Financial Statements

 

 

Consolidated Balance Sheets—June 30, 2020 (unaudited) and December 31, 2019

  1

 

Consolidated Statements of Operations (unaudited)—Three and six months ended June 30, 2020 and 2019

  2

 

Consolidated Statements of Changes in Net Assets (unaudited)—Six months ended June 30, 2020 and 2019

  3

 

Consolidated Statements of Cash Flows (unaudited)—Six months ended June 30, 2020 and 2019

  4

 

Consolidated Schedule of Investments (unaudited)—June 30, 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)—Six months ended June 30, 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

  132

Item 4.

 

Controls and Procedures

  133


PART II
OTHER INFORMATION

Item 1.

 

Legal Proceedings

  134

Item 1A.

 

Risk Factors

  134

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

  134

Item 6.

 

Exhibits

  135

 

Signatures

  136

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

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

 
  June 30,
2020
  December 31,
2019
 
 
  (Unaudited)
   
 

ASSETS

             

  

             

Investments at fair value:

             

Control investments (cost: $796,019 and $778,367 as of June 30, 2020 and December 31, 2019, respectively)

  $ 1,008,139   $ 1,032,721  

Affiliate investments (cost: $372,475 and $351,764 as of June 30, 2020 and December 31, 2019, respectively)

    321,709     330,287  

Non-Control/Non-Affiliate investments (cost: $1,257,360 and $1,297,587 as of June 30, 2020 and December 31, 2019, respectively)

    1,089,705     1,239,316  

Total investments (cost: $2,425,854 and $2,427,718 as of June 30, 2020 and December 31, 2019, respectively)

    2,419,553     2,602,324  

  

             

Cash and cash equivalents

    68,539     55,246  

Interest receivable and other assets

    48,865     50,458  

Receivable for securities sold

    5,650      

Deferred financing costs (net of accumulated amortization of $7,981 and $7,501 as of June 30, 2020 and December 31, 2019, respectively)

    3,188     3,521  

Total assets

  $ 2,545,795   $ 2,711,549  

LIABILITIES

             

Credit facility

 
$

315,000
 
$

300,000
 

SBIC debentures (par: $314,800 ($50,000 due within one year) and $311,800 as of June 30, 2020 and December 31, 2019, respectively)

    308,814     306,188  

5.20% Notes due 2024 (par: $325,000 as of both June 30, 2020 and December 31, 2019)

    324,541     324,595  

4.50% Notes due 2022 (par: $185,000 as of both June 30, 2020 and December 31, 2019)

    183,533     183,229  

Accounts payable and other liabilities

    17,038     24,532  

Payable for securities purchased

    4,568      

Interest payable

    7,494     7,292  

Dividend payable

    13,474     13,174  

Deferred tax liability, net

    389     16,149  

Total liabilities

    1,174,851     1,175,159  

Commitments and contingencies (Note K)

   
 
   
 
 

NET ASSETS

   
 
   
 
 

Common stock, $0.01 par value per share (150,000,000 shares authorized; 65,748,805 and 64,241,341 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively)

   
658
   
643
 

Additional paid-in capital

    1,554,928     1,512,435  

Total undistributed (overdistributed) earnings

    (184,642 )   23,312  

Total net assets

    1,370,944     1,536,390  

Total liabilities and net assets

  $ 2,545,795   $ 2,711,549  

NET ASSET VALUE PER SHARE

  $ 20.85   $ 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
June 30,
  Six Months Ended
June 30,
 
 
  2020   2019   2020   2019  

INVESTMENT INCOME:

                         

Interest, fee and dividend income:

                         

Control investments

  $ 19,327   $ 23,617   $ 38,800   $ 47,308  

Affiliate investments

    7,207     8,346     15,371     17,417  

Non-Control/Non-Affiliate investments

    25,473     29,330     53,985     57,932  

Total investment income

    52,007     61,293     108,156     122,657  

EXPENSES:

                         

Interest

    (11,898 )   (12,329 )   (24,338 )   (24,245 )

Compensation

    (4,802 )   (5,516 )   (7,300 )   (11,585 )

General and administrative

    (3,000 )   (3,160 )   (6,473 )   (6,363 )

Share-based compensation

    (2,817 )   (2,378 )   (5,654 )   (4,707 )

Expenses allocated to the External Investment Manager

    1,804     1,707     3,448     3,350  

Total expenses

    (20,713 )   (21,676 )   (40,317 )   (43,550 )

NET INVESTMENT INCOME

    31,294     39,617     67,839     79,107  

NET REALIZED GAIN (LOSS):

   
 
   
 
   
 
   
 
 

Control investments

    1,606     (756 )   (19,866 )   (943 )

Affiliate investments

        789     (235 )   (2,452 )

Non-Control/Non-Affiliate investments

    (10,190 )   (2,587 )   (10,348 )   (4,892 )

Realized loss on extinguishment of debt

            (534 )   (5,689 )

Total net realized loss

    (8,584 )   (2,554 )   (30,983 )   (13,976 )

NET UNREALIZED APPRECIATION (DEPRECIATION):

                         

Control investments

    (6,825 )   10,137     (42,235 )   15,083  

Affiliate investments

    (8,123 )   (568 )   (29,289 )   1,808  

Non-Control/Non-Affiliate investments

    28,112     (4,712 )   (109,620 )   (810 )

SBIC debentures

        (233 )   460     4,945  

Total net unrealized appreciation (depreciation)          

    13,164     4,624     (180,684 )   21,026  

INCOME TAXES:

                         

Federal and state income, excise and other taxes

    (550 )   (963 )   (255 )   (1,665 )

Deferred taxes

    8,045     (2,470 )   16,015     (4,837 )

Income tax benefit (provision)

    7,495     (3,433 )   15,760     (6,502 )

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

  $ 43,369   $ 38,254   $ (128,068 ) $ 79,655  

NET INVESTMENT INCOME PER SHARE—BASIC AND DILUTED

  $ 0.48   $ 0.63   $ 1.04   $ 1.27  

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

  $ 0.66   $ 0.61   $ (1.97 ) $ 1.28  

WEIGHTED AVERAGE SHARES OUTSTANDING—BASIC AND DILUTED

    65,303,580     62,880,035     64,920,025     62,375,166  

   

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  

Public offering of common stock, net of offering costs

    245,989     2     9,416         9,418  

Share-based compensation

            2,378         2,378  

Purchase of vested stock for employee payroll tax withholding

    (90,404 )   (1 )   (3,364 )       (3,365 )

Dividend reinvestment

    133,128     1     5,392         5,393  

Amortization of directors' deferred compensation

            216         216  

Issuance of restricted stock, net of forfeited shares

    262,642     3     (3 )        

Dividends to stockholders

            114     (53,823 )   (53,709 )

Net increase resulting from operations

                38,254     38,254  

Balances at June 30, 2019

    62,925,132   $ 629   $ 1,465,679   $ 54,774   $ 1,521,082  

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  

Public offering of common stock, net of offering costs

    824,968     9     26,007         26,016  

Share-based compensation

            2,817         2,817  

Purchase of vested stock for employee payroll tax withholding

    (84,094 )   (1 )   (1,730 )       (1,731 )

Dividend reinvestment

    146,229     1     4,158         4,159  

Amortization of directors' deferred compensation

            224         224  

Issuance of restricted stock, net of forfeited shares

    414,053     4     (4 )        

Dividends to stockholders

            99     (40,179 )   (40,080 )

Net increase resulting from operations

                43,369     43,369  

Balances at June 30, 2020

    65,763,805   $ 658   $ 1,554,928   $ (184,642 ) $ 1,370,944  

   

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)

 
  Six Months Ended
June 30,
 
 
  2020   2019  

CASH FLOWS FROM OPERATING ACTIVITIES

             

Net increase (decrease) in net assets resulting from operations

  $ (128,068 ) $ 79,655  

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

    (264,289 )   (301,298 )

Proceeds from sales and repayments of debt investments in portfolio companies

    220,339     220,925  

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

    15,341     18,169  

Net unrealized (appreciation) depreciation

    180,684     (21,026 )

Net realized loss

    30,983     13,976  

Accretion of unearned income

    (5,959 )   (5,997 )

Payment-in-kind interest

    (1,883 )   (2,502 )

Cumulative dividends

    (1,022 )   (1,350 )

Share-based compensation expense

    5,654     4,707  

Amortization of deferred financing costs

    1,353     1,790  

Deferred tax (benefit) provision

    (16,015 )   4,837  

Changes in other assets and liabilities:

             

Interest receivable and other assets

    7,626     (6,792 )

Interest payable

    202     2,115  

Accounts payable and other liabilities

    (7,032 )   4,085  

Deferred fees and other

    1,791     1,226  

Net cash provided by operating activities

    39,705     12,520  

CASH FLOWS FROM FINANCING ACTIVITIES

   
 
   
 
 

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

    29,871     44,803  

Proceeds from public offering of 5.20% Notes due 2024

        250,000  

Dividends paid

    (71,305 )   (80,247 )

Proceeds from issuance of SBIC debentures

    25,000      

Repayments of SBIC debentures

    (22,000 )   (24,000 )

Proceeds from credit facility

    184,000     201,000  

Repayments on credit facility

    (169,000 )   (380,000 )

Payment of deferred issuance costs and SBIC debenture fees

    (1,218 )   (4,344 )

Purchases of vested stock for employee payroll tax withholding

    (1,760 )   (3,365 )

Net cash provided by (used in) financing activities

    (26,412 )   3,847  

Net increase in cash and cash equivalents

    13,293     16,367  

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

    55,246     54,181  

CASH AND CASH EQUIVALENTS AT END OF PERIOD

  $ 68,539   $ 70,548  

Supplemental cash flow disclosures:

             

Interest paid

  $ 22,722   $ 20,279  

Taxes paid

  $ 1,783   $ 1,672  

Operating non-cash activities:

             

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

  $   $ 5,240  

Non-cash financing activities:

             

Shares issued pursuant to the DRIP

  $ 8,089   $ 8,989  

   

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

4


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments

June 30, 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   $ 3,937  

         

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

          9,375     (284 )

         

Member Units (45 units)

          1      

                      33,204     3,653  

                               

ASC Interests, LLC

  August 1, 2013  

Recreational and Educational Shooting Facility

                       

         

13.00% Secured Debt (Maturity—July 31, 2022)

    1,650     1,606     1,606  

         

Member Units (1,500 units)

          1,500     1,050  

                      3,106     2,656  

                               

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)

    5,295     4,976     4,976  

         

Preferred Member Units (3,200 units)

          3,200     3,890  

         

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

          316     510  

                      8,492     9,376  

                               

ATS Workholding, LLC(10)

  March 10, 2014  

Manufacturer of Machine Cutting Tools and Accessories

                       

         

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

    4,919     4,729     3,965  

         

Preferred Member Units (3,725,862 units)

          3,726      

                      8,455     3,965  

                               

Bond-Coat, Inc.

  December 28, 2012  

Casing and Tubing Coating Services

                       

         

Common Stock (57,508 shares)

          6,350     6,830  

                               

Brewer Crane Holdings, LLC

  January 9, 2018  

Provider of Crane Rental and Operating Services

                       

         

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.00%, Secured Debt (Maturity—January 9, 2023)(9)

    8,804     8,751     8,751  

         

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

          4,280     4,280  

                      13,031     13,031  

                               

Bridge Capital Solutions Corporation

  April 18, 2012  

Financial Services and Cash Flow Solutions Provider

                       

         

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

    8,813     8,085     8,085  

         

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  

                      12,214     13,402  

                               

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)

June 30, 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 9.50%, Secured Debt (Maturity—March 30, 2023)(9)

    15,679     15,573     15,534  

         

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.50%, Secured Debt (Maturity—March 30, 2023)(9)

    28,000     27,827     27,762  

         

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

          7,706     7,706  

         

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

          10,775     5,781  

                      61,881     56,783  

                               

CBT Nuggets, LLC ("CBT")

  June 1, 2006  

Produces and Sells IT Training Certification Videos

                       

         

Member Units (416 units)(8)

          1,300     46,060  

                               

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)

    11,934     11,843     11,843  

         

Preferred Member Units (12,696 units)

          5,840     5,840  

                      17,683     17,683  

                               

Chamberlin Holding LLC

  February 26, 2018  

Roofing and Waterproofing Specialty Contractor

                       

         

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.00%, Secured Debt (Maturity—February 26, 2023)(9)

    17,773     17,666     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  

                      30,153     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     8,130  

                      2,400     10,130  

                               

Clad-Rex Steel, LLC

  December 20, 2016  

Specialty Manufacturer of Vinyl-Clad Metal

                       

         

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity—December 20, 2021)(9)

    10,880     10,841     10,841  

         

Member Units (717 units)(8)

          7,280     8,610  

         

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

    1,124     1,113     1,113  

         

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

          210     460  

                      19,444     21,024  

                               

CMS Minerals Investments

  January 30, 2015  

Oil & Gas Exploration & Production

                       

         

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

          2,260     1,638  

                               

6


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

June 30, 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 12.25%, Secured Debt (Maturity—March 6, 2025)(9)

    15,800     15,650     15,650  

         

Preferred Member Units (587 units)

          8,317     8,317  

                      23,967     23,967  

                               

CompareNetworks Topco, LLC

  January 29, 2019  

Internet Publishing and Web Search Portals

                       

         

LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 12.00%, Secured Debt (Maturity—January 29, 2024)(9)

    8,014     7,950     7,950  

         

Preferred Member Units (1,975 units)

          1,975     4,080  

                      9,925     12,030  

                               

Copper Trail Fund Investments(12)(13)

  July 17, 2017  

Investment Partnership

                       

         

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

          762     762  

                               

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 11.00%, Secured Debt (Maturity—April 1, 2023)(9)

    18,960     18,841     18,165  

         

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

          9,501     4,595  

                      28,342     22,760  

                               

Direct Marketing Solutions, Inc.

  February 13, 2018  

Provider of Omni-Channel Direct Marketing Services

                       

         

LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 12.00%, Secured Debt (Maturity—February 13, 2023)(9)

    15,247     15,146     15,247  

         

Preferred Stock (8,400 shares)

          8,400     20,060  

                      23,546     35,307  

                               

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)

    19,838     19,777     19,838  

         

Member Units (8,619 units)(8)

          14,844     53,240  

                      34,621     73,078  

                               

7


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

June 30, 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 9.43%, Secured Debt (Maturity—January 31, 2021)(9)

    4,519     4,519     4,519  

         

Member Units (1,200 units)

          1,200     1,700  

                      5,719     6,219  

                               

GRT Rubber Technologies LLC ("GRT")

  December 19, 2014  

Manufacturer of Engineered Rubber Products

                       

         

LIBOR Plus 7.00%, Current Coupon 7.17%, 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  

                               

Gulf Manufacturing, LLC

  August 31, 2007  

Manufacturer of Specialty Fabricated Industrial Piping Products

                       

         

Member Units (438 units)(8)

          2,980     4,800  

                               

Gulf Publishing Holdings, LLC

  April 29, 2016  

Energy Industry Focused Media and Publishing

                       

         

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 5.25% / 5.25% PIK, Current Coupon Plus PIK 10.50%, Secured Debt (Maturity—September 30, 2020)(9)(19)

    243     243     243  

         

6.25% Current / 6.25% PIK Secured Debt (Maturity—April 29, 2021)(19)

    12,735     12,707     11,616  

         

Member Units (3,681 units)

          3,681      

                      16,631     11,859  

                               

Harborside Holdings, LLC

  March 20, 2017  

Real Estate Holding Company

                       

         

Member units (100 units)

          6,606     7,660  

                               

Harris Preston Fund Investments(12)(13)

  October 1, 2017  

Investment Partnership

                       

         

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

          2,735     2,977  

                               

Harrison Hydra-Gen, Ltd.

  June 4, 2010  

Manufacturer of Hydraulic Generators

                       

         

Common Stock (107,456 shares)(8)

          718     5,640  

                               

Jensen Jewelers of Idaho, LLC

  November 14, 2006  

Retail Jewelry Store

                       

         

Prime Plus 6.75% (Floor 2.00%), Current Coupon 10.00%, Secured Debt (Maturity—November 14, 2023)(9)

    3,850     3,816     3,800  

         

Member Units (627 units)(8)

          811     7,270  

                      4,627     11,070  

                               

J&J Services, Inc.

  October 31, 2019  

Provider of Dumpster and Portable Toilet Rental Services

                       

         

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

    15,200     15,065     15,200  

         

Preferred Stock (2,814 shares)

          7,085     9,900  

                      22,150     25,100  

                               

KBK Industries, LLC

  January 23, 2006  

Manufacturer of Specialty Oilfield and Industrial Products

                       

         

Member Units (325 units)(8)

          783     13,140  

                               

8


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

June 30, 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)
 
   

Kickhaefer Manufacturing Company, LLC

  October 31, 2018  

Precision Metal Parts Manufacturing

                       

         

9.50% Current / 2.00% PIK Secured Debt (Maturity—October 31, 2023)(19)

    25,488     25,297     25,297  

         

Member Units (581 units)

          12,240     11,450  

         

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

    3,964     3,924     3,924  

         

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

          992     1,160  

                      42,453     41,831  

                               

Market Force Information, LLC

  July 28, 2017  

Provider of Customer Experience Management Services

                       

         

12.00% PIK Secured Debt (Maturity—July 28, 2023)(14)(19)

    26,079     25,952     14,255  

         

Member Units (743,921 units)

          16,642      

                      42,594     14,255  

                               

MH Corbin Holding LLC

  August 31, 2015  

Manufacturer and Distributor of Traffic Safety Products

                       

         

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

    8,730     8,671     8,670  

         

Preferred Member Units (66,000 shares)

          4,400     3,430  

         

Preferred Member Units (4,000 shares)

          6,000      

                      19,071     12,100  

                               

Mid-Columbia Lumber Products, LLC

  December 18, 2006  

Manufacturer of Finger-Jointed Lumber Products

                       

         

Member Units (7,874 units)

          4,239      

         

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

          1,499     2,130  

                      5,738     2,130  

                               

MSC Adviser I, LLC(16)

  November 22, 2013  

Third Party Investment Advisory Services

                       

         

Member Units (Fully diluted 100.0%)(8)

              69,080  

                               

Mystic Logistics Holdings, LLC

  August 18, 2014  

Logistics and Distribution Services Provider for Large Volume Mailers

                       

         

10.00% Secured Debt (Maturity—January 17. 2022)

    6,974     6,959     6,959  

         

Common Stock (5,873 shares)(8)

          2,720     10,390  

                      9,679     17,349  

                               

NAPCO Precast, LLC

  January 31, 2008  

Precast Concrete Manufacturing

                       

         

Member Units (2,955 units)(8)

          2,975     10,930  

                               

NexRev LLC

  February 28, 2018  

Provider of Energy Efficiency Products & Services

                       

         

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

    17,533     17,433     15,732  

         

Preferred Member Units (86,400,000 units)

          6,880      

                      24,313     15,732  

                               

9


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

June 30, 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)
 
   

NRI Clinical Research, LLC

  September 8, 2011  

Clinical Research Service Provider

                       

         

10.50% Secured Debt (Maturity—June 8, 2022)

    7,000     6,921     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  

                      7,938     13,711  

                               

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     3,120  

                      10,093     9,496  

                               

NuStep, LLC

  January 31, 2017  

Designer, Manufacturer and Distributor of Fitness Equipment

                       

         

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

    19,640     19,564     19,564  

         

Preferred Member Units (406 units)

          10,200     10,200  

                      29,764     29,764  

                               

OMi Holdings, Inc.

  April 1, 2008  

Manufacturer of Overhead Cranes

                       

         

Common Stock (1,500 shares)(8)

          1,080     18,030  

                               

Pearl Meyer Topco LLC

  April 27, 2020  

Provider of Executive Compensation Consulting Services

                       

         

12.00% Secured Debt (Maturity—April 27, 2025)

    35,000     34,663     34,663  

         

Member Units (13,800 units)(8)

          13,000     13,000  

                      47,663     47,663  

                               

Pegasus Research Group, LLC

  January 6, 2011  

Provider of Telemarketing and Data Services

                       

         

Member Units (460 units)(8)

          1,290     9,960  

                               

PPL RVs, Inc.

  June 10, 2010  

Recreational Vehicle Dealer

                       

         

LIBOR Plus 8.75% (Floor 0.50%), Current Coupon 10.18% Secured Debt (Maturity—November 15, 2022)(9)

    12,105     12,004     12,004  

         

Common Stock (1,962 shares)

          2,150     11,140  

                      14,154     23,144  

                               

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

  February 1, 2011  

Noise Abatement Service Provider

                       

         

13.00% Secured Debt (Maturity—April 30, 2023)

    6,397     6,324     6,397  

         

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

          4,600     12,910  

         

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

          1,200     1,070  

                      12,124     20,377  

                               

Quality Lease Service, LLC

  June 8, 2015  

Provider of Rigsite Accommodation Unit Rentals and Related Services

                       

         

Member Units (1,000 units)

          11,313     5,780  

                               

10


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

June 30, 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)
 
   

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     3,320  

                      2,269     10,202  

                               

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     16,286     16,286  

         

Preferred Member Units (479 units)

          8,136     8,136  

                      25,062     25,062  

                               

Trantech Radiator Topco, LLC

  May 31, 2019  

Transformer Cooling Products and Services

                       

         

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

    8,880     8,794     8,867  

         

Common Stock (615 shares)(8)

          4,655     7,680  

                      13,449     16,547  

                               

UnionRock Energy Fund II, LP(12)(13)

  June 15, 2020  

Oil & Gas Exploration & Production

                       

         

LP Interests (Fully diluted 49.6%)

          2,894     2,894  

                               

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     3,460  

                      5,028     5,488  

                               

Ziegler's NYPD, LLC

  October 1, 2008  

Casual Restaurant Group

                       

         

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

    1,000     1,000     899  

         

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

    625     625     625  

         

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

    2,750     2,750     2,366  

         

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  

                      7,809     5,029  

Subtotal Control Investments (73.5% of net assets at fair value)

                    $ 796,019   $ 1,008,139  

11


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

June 30, 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)

    664     664     664  

         

Preferred Member Units (186 units)

          1,200     5,170  

                      1,864     5,834  

                               

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     13,060  

                               

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 12.00%, (Maturity—April 8, 2021)(9)

    4,800     4,734     4,684  

         

Preferred Stock (non-voting)(8)

          141     141  

         

Member Units (800,000 units)

          800     210  

                      5,675     5,035  

                               

Boccella Precast Products LLC

  June 30, 2017  

Manufacturer of Precast Hollow Core Concrete

                       

         

Member Units (2,160,000 units)(8)

          2,256     5,980  

                               

Buca C, LLC

  June 30, 2015  

Casual Restaurant Group

                       

         

LIBOR Plus 9.25% (Floor 1.00%), Current Coupon 10.25%, Secured Debt (Maturity—June 30, 2020)(9)(17)

    19,004     19,004     17,104  

         

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

          4,770     765  

                      23,774     17,869  

                               

CAI Software LLC

  October 10, 2014  

Provider of Specialized Enterprise Resource Planning Software

                       

         

12.50% Secured Debt (Maturity—December 7, 2023)

    28,644     28,452     28,644  

         

Member Units (70,764 units)(8)

          1,102     5,930  

                      29,554     34,574  

                               

Chandler Signs Holdings, LLC(10)

  January 4, 2016  

Sign Manufacturer

                       

         

Class A Units (1,500,000 units)

          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)

    26000     25,753     25,753  

         

Preferred Member Units (154 units)

          5,760     5,760  

                      31,513     31,513  

                               

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     12,504  

                      17,799     13,359  

                               

12


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

June 30, 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)
 
   

Copper Trail Fund Investments(12)(13)

  July 17, 2017  

Investment Partnership

                       

         

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

          2,248     1,822  

                               

Dos Rios Partners(12)(13)

  April 25, 2013  

Investment Partnership

                       

         

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

          6,605     7,288  

         

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

          2,097     2,314  

                      8,702     9,602  

                               

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)

          756     595  

                               

Freeport Financial Funds(12)(13)

  June 13, 2013  

Investment Partnership

                       

         

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

          5,974     5,154  

         

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

          10,785     10,571  

                      16,759     15,725  

                               

Fuse, LLC(11)

  June 30, 2019  

Cable Networks Operator

                       

         

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

    1,939     1,939     1,601  

         

Common Stock (10,429 shares)

          256     256  

                      2,195     1,857  

                               

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 7.00%, Secured Debt (Maturity—December 2, 2021)(9)

    600     600     600  

         

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

    13,400     13,350     13,400  

         

Preferred Member Units (226 units)(8)

          2,850     7,320  

         

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

          150     390  

                      16,950     21,710  

                               

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     3,260  

         

Member Units (322,297 units)(8)

          2,352     7,220  

                      5,352     10,480  

                               

I-45 SLF LLC(12)(13)

  October 20, 2015  

Investment Partnership

                       

         

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

          20,200     13,953  

                               

13


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

June 30, 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)
 
   

L.F. Manufacturing Holdings, LLC(10)

  December 23, 2013  

Manufacturer of Fiberglass Products

                       

         

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

          87     87  

         

Member Units (2,179,001 units)

          2,019     2,050  

                      2,106     2,137  

                               

OnAsset Intelligence, Inc.

  April 18, 2011  

Provider of Transportation Monitoring / Tracking Products and Services

                       

         

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

    6,873     6,873     6,873  

         

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

    61     61     61  

         

Preferred Stock (912 shares)

          1,981      

         

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

          1,919      

                      10,834     6,934  

                               

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