Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

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

 

For the quarterly period ended September 30, 2010

 

OR

 

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

 

For the transition period from:               to               

 

Commission File Number: 001-33723

 

Main Street Capital Corporation

(Exact name of registrant as specified in its charter)

 

Maryland

 

41-2230745

(State or other jurisdiction of incorporation or organization)

 

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

 

 

 

1300 Post Oak Boulevard, Suite 800

 

 

Houston, TX

 

77056

(Address of principal executive offices)

 

(Zip Code)

 

(713) 350-6000

(Registrant’s telephone number including area code)

 

n/a

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes o No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of  “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer £

 

Accelerated filer x

 

 

 

Non-accelerated filer £

 

Smaller reporting company £

 

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

 

The number of shares outstanding of the issuer’s common stock as of November 4, 2010 was 18,712,571.

 

 

 



Table of Contents

 

TABLE OF CONTENTS

 

PART I
FINANCIAL INFORMATION

 

Item 1.

Financial Statements

 

 

 

 

 

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

1

 

 

 

 

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

2

 

 

 

 

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

3

 

 

 

 

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

4

 

 

 

 

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

5

 

 

 

 

Consolidated Schedule of Investments — December 31, 2009

12

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

17

 

 

 

Item 2.

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

38

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

55

 

 

 

Item 4.

Controls and Procedures

55

 

 

 

PART II
OTHER INFORMATION

 

 

 

Item 1.

Legal Proceedings

55

 

 

 

Item 1A.

Risk Factors

55

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

55

 

 

 

Item 6.

Exhibits

55

 

 

 

 

Signatures

 

 



Table of Contents

 

PART I — FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

 

 

 

September 30, 2010

 

December 31, 2009

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Portfolio investments at fair value:

 

 

 

 

 

Control investments (cost: $160,346,215 and $59,544,719 as of September 30, 2010 and December 31, 2009, respectively)

 

$

174,110,910

 

$

66,400,667

 

Affiliate investments (cost: $55,523,049 and $39,252,445 as of September 30, 2010 and December 31, 2009, respectively)

 

68,442,197

 

46,886,202

 

Non-Control/Non-Affiliate investments (cost: $60,220,193 and $27,482,826 as of September 30, 2010 and December 31, 2009, respectively)

 

59,346,115

 

27,416,287

 

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

 

1,979,222

 

16,036,838

 

 

 

 

 

 

 

Total portfolio investments (cost: $280,373,499 and $144,279,990 as of September 30, 2010 and December 31, 2009, respectively)

 

303,878,444

 

156,739,994

 

Marketable securities and idle funds investments (cost: $46,862,426 and $3,252,954 as of September 30, 2010 and December 31, 2009, respectively)

 

46,966,349

 

3,252,954

 

 

 

 

 

 

 

Total investments (cost: $327,235,925 and $147,532,944 as of September 30, 2010 and December 31, 2009, respectively)

 

350,844,793

 

159,992,948

 

 

 

 

 

 

 

Cash and cash equivalents

 

58,334,422

 

30,619,998

 

Deferred tax asset

 

2,003,966

 

2,716,400

 

Interest receivable and other assets

 

5,050,940

 

1,509,608

 

Deferred financing costs (net of accumulated amortization of $1,375,452 and $1,071,676 as of September 30, 2010 and December 31, 2009, respectively)

 

2,669,612

 

1,611,508

 

 

 

 

 

 

 

Total assets

 

$

418,903,733

 

$

196,450,462

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

SBIC debentures (par: $180,000,000 and $65,000,000 as of September 30, 2010 and December 31, 2009, respectively; of which $72,606,150 is recorded at fair value as of September 30, 2010)

 

$

157,606,150

 

$

65,000,000

 

Investment securities trade payable

 

14,902,816

 

 

Interest payable

 

683,155

 

1,069,148

 

Dividend payable

 

2,333,265

 

 

Payable to affiliated Investment Manager

 

710,779

 

217,422

 

Accounts payable and other liabilities

 

777,992

 

503,761

 

 

 

 

 

 

 

Total liabilities

 

177,014,157

 

66,790,331

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

NET ASSETS

 

 

 

 

 

 

 

 

 

 

 

Common stock, $0.01 par value per share (150,000,000 shares authorized; 18,666,187 and 10,842,447 issued and outstanding as of September 30, 2010 and December 31, 2009, respectively)

 

186,662

 

108,425

 

Additional paid-in capital

 

221,830,421

 

123,534,156

 

Accumulated net investment income

 

7,349,805

 

7,269,866

 

Accumulated net realized gain (loss) from investments

 

(20,545,573

)

(15,922,020

)

Net unrealized appreciation, net of income taxes

 

28,869,311

 

14,669,704

 

 

 

 

 

 

 

Total Net Asset Value

 

237,690,626

 

129,660,131

 

 

 

 

 

 

 

Noncontrolling interest

 

4,198,950

 

 

 

 

 

 

 

 

Total net assets including noncontrolling interests

 

241,889,576

 

129,660,131

 

 

 

 

 

 

 

Total liabilities and net assets

 

$

418,903,733

 

$

196,450,462

 

 

 

 

 

 

 

NET ASSET VALUE PER SHARE

 

$

12.73

 

$

11.96

 

 

The accompanying notes are an integral part of these financial statements

 

1



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Operations

(Unaudited)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

INVESTMENT INCOME:

 

 

 

 

 

 

 

 

 

Interest, fee and dividend income:

 

 

 

 

 

 

 

 

 

Control investments

 

$

4,497,476

 

$

2,519,354

 

$

12,625,127

 

$

6,353,175

 

Affiliate investments

 

1,975,131

 

1,022,440

 

5,737,576

 

3,357,997

 

Non-Control/Non-Affiliate investments

 

2,124,603

 

429,546

 

4,674,031

 

825,719

 

Total interest, fee and dividend income

 

8,597,210

 

3,971,340

 

23,036,734

 

10,536,891

 

Interest from marketable securities, idle funds and other

 

408,745

 

530,258

 

1,794,279

 

1,157,202

 

Total investment income

 

9,005,955

 

4,501,598

 

24,831,013

 

11,694,093

 

EXPENSES:

 

 

 

 

 

 

 

 

 

Interest

 

(2,283,262

)

(957,413

)

(6,388,367

)

(2,830,325

)

General and administrative

 

(367,074

)

(317,141

)

(1,038,972

)

(1,061,928

)

Expenses reimbursed to affiliated Investment Manager

 

(1,151,713

)

(226,237

)

(3,634,511

)

(306,175

)

Share-based compensation

 

(446,342

)

(375,766

)

(1,049,258

)

(767,218

)

Total expenses

 

(4,248,391

)

(1,876,557

)

(12,111,108

)

(4,965,646

)

NET INVESTMENT INCOME

 

4,757,564

 

2,625,041

 

12,719,905

 

6,728,447

 

 

 

 

 

 

 

 

 

 

 

NET REALIZED GAIN (LOSS) FROM INVESTMENTS:

 

 

 

 

 

 

 

 

 

Control investments

 

(1,868,465

)

 

(3,587,638

)

865,651

 

Non-Control/Non-Affiliate investments

 

156,476

 

 

156,476

 

 

Marketable securities and idle funds investments

 

179,633

 

158,340

 

493,581

 

613,183

 

Total net realized gain (loss) from investments

 

(1,532,356

)

158,340

 

(2,937,581

)

1,478,834

 

NET REALIZED INCOME

 

3,225,208

 

2,783,381

 

9,782,324

 

8,207,281

 

 

 

 

 

 

 

 

 

 

 

NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):

 

 

 

 

 

 

 

 

 

Portfolio investments

 

5,314,507

 

2,857,574

 

11,386,598

 

1,403,673

 

Marketable securities and idle funds investments

 

335,205

 

413,974

 

103,924

 

242,883

 

SBIC debentures

 

3,035,336

 

 

4,792,390

 

 

Investment in affiliated Investment Manager

 

(55,462

)

(390,238

)

(341,658

)

(334,920

)

Total net change in unrealized appreciation

 

8,629,586

 

2,881,310

 

15,941,254

 

1,311,636

 

 

 

 

 

 

 

 

 

 

 

Income tax (provision) benefit

 

(358,647

)

1,372,451

 

(779,907

)

789,564

 

Bargain purchase gain

 

 

 

4,890,582

 

 

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

 

11,496,147

 

7,037,142

 

29,834,253

 

10,308,481

 

Noncontrolling interest

 

(552,845

)

 

(961,740

)

 

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

 

$

10,943,302

 

$

7,037,142

 

$

28,872,513

 

$

10,308,481

 

 

 

 

 

 

 

 

 

 

 

NET INVESTMENT INCOME PER SHARE - BASIC AND DILUTED

 

$

0.28

 

$

0.25

 

$

0.81

 

$

0.69

 

NET REALIZED INCOME PER SHARE - BASIC AND DILUTED

 

$

0.19

 

$

0.26

 

$

0.62

 

$

0.84

 

DIVIDENDS PAID PER SHARE

 

$

0.38

 

$

0.38

 

$

1.13

 

$

1.13

 

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

 

$

0.65

 

$

0.66

 

$

1.87

 

$

1.05

 

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED

 

16,878,088

 

10,701,603

 

15,469,890

 

9,788,226

 

 

The accompanying notes are an integral part of these financial statements

 

2



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Changes in Net Assets

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Net

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

Net Unrealized

 

 

 

 

 

Assets

 

 

 

Common Stock

 

Additional

 

Accumulated

 

Net Realized

 

Appreciation,

 

 

 

 

 

Including

 

 

 

Number

 

Par

 

Paid-In

 

Net Investment

 

Gain (Loss)

 

Net of Income

 

Total Net

 

Noncontrolling

 

Noncontrolling

 

 

 

of Shares

 

Value

 

Capital

 

Income

 

From Investments

 

Taxes

 

Asset Value

 

Interest

 

Interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31, 2008

 

9,206,483

 

$

92,065

 

$

104,467,740

 

$

10,155,593

 

$

(6,497,098

)

$

4,137,756

 

$

112,356,056

 

$

 

$

112,356,056

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Public offering of common stock, net of offering costs

 

1,437,500

 

14,375

 

16,176,533

 

 

 

 

16,190,908

 

 

16,190,908

 

Share-based compensation

 

 

 

767,218

 

 

 

 

767,218

 

 

767,218

 

Dividend reinvestment

 

178,780

 

1,787

 

2,343,329

 

 

 

 

2,345,116

 

 

2,345,116

 

Share repurchase program

 

(164,544

)

(1,645

)

(1,615,461

)

 

 

 

(1,617,106

)

 

(1,617,106

)

Issuance of restricted stock

 

107,824

 

1,078

 

(1,078

)

 

 

 

 

 

 

Purchase of vested stock for employee payroll tax withholding

 

(16,403

)

(164

)

(251,979

)

 

 

 

(252,143

)

 

(252,143

)

Dividends to stockholders

 

 

 

 

(10,164,522

)

(871,183

)

 

(11,035,705

)

 

(11,035,705

)

Net increase resulting from operations

 

 

 

 

6,728,447

 

1,478,834

 

2,101,200

 

10,308,481

 

 

10,308,481

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at September 30, 2009

 

10,749,640

 

$

107,496

 

$

121,886,302

 

$

6,719,518

 

$

(5,889,447

)

$

6,238,956

 

$

129,062,825

 

$

 

$

129,062,825

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31, 2009

 

10,842,447

 

$

108,425

 

$

123,534,156

 

$

7,269,866

 

$

(15,922,020

)

$

14,669,704

 

$

129,660,131

 

$

 

$

129,660,131

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MSC II exchange offer and related transactions

 

1,246,803

 

12,468

 

20,080,623

 

4,890,582

 

 

 

24,983,673

 

3,237,210

 

28,220,883

 

Public offerings of common stock, net of offering costs

 

6,095,000

 

60,950

 

85,864,532

 

 

 

 

85,925,482

 

 

85,925,482

 

Share-based compensation

 

 

 

1,049,258

 

 

 

 

1,049,258

 

 

1,049,258

 

Dividend reinvestment

 

347,474

 

3,474

 

5,388,728

 

 

 

 

5,392,202

 

 

5,392,202

 

Issuance of restricted stock

 

157,277

 

1,573

 

(1,573

)

 

 

 

 

 

 

Purchase of vested stock for employee payroll tax withholding

 

(22,814

)

(228

)

(369,345

)

 

 

 

(369,573

)

 

(369,573

)

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

 

 

 

(13,715,958

)

 

 

 

(13,715,958

)

 

(13,715,958

)

Dividends to stockholders

 

 

 

 

(17,530,548

)

(1,685,972

)

 

(19,216,520

)

 

(19,216,520

)

Net increase resulting from operations

 

 

 

 

12,719,905

 

(2,937,581

)

15,161,347

 

24,943,671

 

 

24,943,671

 

Noncontrolling interest

 

 

 

 

 

 

(961,740

)

(961,740

)

961,740

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at September 30, 2010

 

18,666,187

 

$

186,662

 

$

221,830,421

 

$

7,349,805

 

$

(20,545,573

)

$

28,869,311

 

$

237,690,626

 

$

4,198,950

 

$

241,889,576

 

 

The accompanying notes are an integral part of these financial statements

 

3



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2010

 

2009

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

Net increase in net assets resulting from operations:

 

$

29,834,253

 

$

10,308,481

 

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

 

 

 

 

 

Net change in unrealized (appreciation)

 

(17,364,223

)

(1,311,636

)

Net realized (gain) loss from investments

 

2,937,581

 

(1,478,834

)

Bargain purchase gain

 

(4,890,582

)

 

Accretion of unearned income

 

(1,574,423

)

(457,835

)

Net payment-in-kind interest accrual

 

(1,412,345

)

(458,738

)

Share-based compensation expense

 

1,049,258

 

767,218

 

Amortization of deferred financing costs

 

319,473

 

324,935

 

Deferred taxes

 

629,607

 

(64,427

)

Other

 

1,422,969

 

(732,326

)

Changes in other assets and liabilities:

 

 

 

 

 

Interest receivable and other assets

 

(943,967

)

(247,416

)

Interest payable

 

(1,729,091

)

(818,463

)

Payable to affiliated Investment Manager

 

493,357

 

(90,284

)

Accounts payable and other liabilities

 

(52,279

)

(1,188,536

)

Net cash provided by operating activities

 

8,719,588

 

4,552,139

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

Investments in portfolio companies

 

(91,665,945

)

(16,540,965

)

Investments in marketable securities and idle funds investments

 

(62,004,440

)

(72,925,566

)

Cash acquired in MSC II exchange offer

 

2,489,920

 

 

Proceeds from marketable securities and idle funds investments

 

29,154,403

 

44,036,959

 

Principal payments received on loans and debt securities

 

20,922,671

 

7,580,630

 

Proceeds from sale of equity securities and related notes

 

3,151,500

 

 

Net cash used in investing activities

 

(97,951,891

)

(37,848,942

)

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

Share repurchase program

 

 

(1,617,106

)

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

 

85,925,482

 

16,190,908

 

Dividends paid to stockholders

 

(11,491,053

)

(8,472,560

)

Net change in DRIP deposit

 

 

400,000

 

Proceeds from issuance of SBIC debentures

 

45,000,000

 

 

Proceeds from line of credit

 

36,650,000

 

 

Repayments on line of credit

 

(36,650,000

)

 

Purchase of vested stock for employee payroll tax withholding

 

(369,573

)

(252,143

)

Payment of deferred loan costs and SBIC debenture fees

 

(2,118,129

)

(110,423

)

Net cash provided by financing activities

 

116,946,727

 

6,138,676

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

27,714,424

 

(27,158,127

)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

30,619,998

 

35,374,826

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

58,334,422

 

$

8,216,699

 

 

The accompanying notes are an integral part of these financial statements

 

4



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2010

(Unaudited)

 

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

 

Industry

 

Principal (6)

 

Cost (6)

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Control Investments (3)

 

 

 

 

 

 

 

 

 

Café Brazil, LLC

 

Casual Restaurant Group

 

 

 

 

 

 

 

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

 

 

$

2,100,000

 

$

2,095,365

 

$

2,100,000

 

Member Units (7) (Fully diluted 41.0%)

 

 

 

 

 

41,837

 

1,990,000

 

 

 

 

 

 

 

2,137,202

 

4,090,000

 

 

 

 

 

 

 

 

 

 

 

California Healthcare Medical Billing, Inc.

 

Healthcare Billing and Records Management

 

 

 

 

 

 

 

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

 

 

4,500,000

 

4,416,485

 

4,416,485

 

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

 

 

 

2,303,000

 

2,069,734

 

2,129,633

 

Common Stock (Fully diluted 9.8%)

 

 

 

 

 

1,176,667

 

1,540,000

 

Warrants (Fully diluted 19.6%)

 

 

 

 

 

1,093,333

 

3,600,333

 

 

 

 

 

 

 

8,756,219

 

11,686,451

 

 

 

 

 

 

 

 

 

 

 

CBT Nuggets, LLC

 

Produces and Sells IT Certification Training Videos

 

 

 

 

 

 

 

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

 

 

2,800,000

 

2,780,447

 

2,792,180

 

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

 

 

1,175,000

 

1,175,000

 

1,175,000

 

Member Units (7) (Fully diluted 39.9%)

 

 

 

 

 

1,299,520

 

3,330,000

 

 

 

 

 

 

 

5,254,967

 

7,297,180

 

 

 

 

 

 

 

 

 

 

 

Ceres Management, LLC (Lambs)

 

Aftermarket Automotive Services Chain

 

 

 

 

 

 

 

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

 

 

4,000,000

 

3,961,558

 

3,961,558

 

Member Units (Fully diluted 70%)

 

 

 

 

 

1,813,333

 

1,890,000

 

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

 

 

 

 

 

1,207,631

 

1,207,631

 

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

 

 

 

1,225,000

 

1,225,000

 

1,225,000

 

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

 

 

 

 

 

625,000

 

625,000

 

 

 

 

 

 

 

8,832,522

 

8,909,189

 

 

 

 

 

 

 

 

 

 

 

Condit Exhibits, LLC

 

Tradeshow Exhibits/ Custom Displays

 

4,555,370

 

4,510,901

 

4,510,901

 

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

 

Warrants (Fully diluted 46.9%)

 

 

 

 

 

320,000

 

50,000

 

 

 

 

 

 

 

4,830,901

 

4,560,901

 

 

 

 

 

 

 

 

 

 

 

Currie Acquisitions, LLC

 

Manufacturer of Electric Bicycles/Scooters

 

 

 

 

 

 

 

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

 

 

4,750,000

 

3,940,023

 

3,940,023

 

Warrants (Fully diluted 47.3%)

 

 

 

 

 

2,566,204

 

2,566,204

 

 

 

 

 

 

 

6,506,227

 

6,506,227

 

 

 

 

 

 

 

 

 

 

 

Gulf Manufacturing, LLC

 

Industrial Metal Fabrication

 

 

 

 

 

 

 

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

 

 

3,960,000

 

3,960,000

 

3,960,000

 

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

 

 

 

1,840,000

 

1,803,286

 

1,835,238

 

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

 

 

 

1,420,784

 

1,420,784

 

1,420,784

 

Member Units (7) (Fully diluted 34.2%)

 

 

 

 

 

2,979,813

 

5,250,000

 

 

 

 

 

 

 

10,163,883

 

12,466,022

 

 

 

 

 

 

 

 

 

 

 

Harrison Hydra-Gen, Ltd.

 

Manufacturer of Hydraulic Generators

 

 

 

 

 

 

 

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

 

 

6,000,000

 

5,226,636

 

5,226,636

 

Warrants (Fully diluted 35.2%)

 

 

 

 

 

717,640

 

717,640

 

Mandatorily Redeemable Preferred Stock

 

 

 

 

 

1,000,000

 

1,000,000

 

 

 

 

 

 

 

6,944,276

 

6,944,276

 

 

 

 

 

 

 

 

 

 

 

Hawthorne Customs & Dispatch Services, LLC

 

Transportation/ Logistics

 

 

 

 

 

 

 

Member Units (7) (Fully diluted 59.2%)

 

 

 

 

692,500

 

1,070,000

 

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

 

 

 

 

 

1,214,784

 

1,214,784

 

 

 

 

 

 

 

1,907,284

 

2,284,784

 

 

 

 

 

 

 

 

 

 

 

Hydratec Holdings, LLC

 

Agricultural Services

 

 

 

 

 

 

 

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

 

 

 

2,995,244

 

2,957,183

 

2,957,183

 

Member Units (Fully diluted 85.1%) (7)

 

 

 

 

 

4,100,000

 

6,190,000

 

 

 

 

 

 

 

7,057,183

 

9,147,183

 

 

 

 

 

 

 

 

 

 

 

Indianapolis Aviation Partners, LLC

 

FBO / Aviation Support Services

 

 

 

 

 

 

 

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

 

 

4,500,000

 

4,122,268

 

4,350,000

 

Warrants (Fully diluted 30.2%)

 

 

 

 

 

1,129,286

 

1,750,286

 

 

 

 

 

 

 

5,251,554

 

6,100,286

 

 

5



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2010

(Unaudited)

 

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

 

Industry

 

Principal (6)

 

Cost (6)

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Control Investments (3)

 

 

 

 

 

 

 

 

 

Jensen Jewelers of Idaho, LLC

 

Retail Jewelry

 

 

 

 

 

 

 

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

 

 

 

2,610,000

 

2,604,762

 

2,610,000

 

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

 

 

 

2,694,896

 

2,687,362

 

2,694,896

 

Member Units (7)  (Fully diluted 60.8%)

 

 

 

 

 

811,000

 

1,010,000

 

 

 

 

 

 

 

6,103,124

 

6,314,896

 

 

 

 

 

 

 

 

 

 

 

Mid-Columbia Lumber Products, LLC

 

Specialized Lumber Products

 

 

 

 

 

 

 

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

 

 

375,000

 

375,000

 

375,000

 

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

 

 

 

3,900,000

 

3,779,484

 

3,796,751

 

Member Units (Fully diluted 26.7%)

 

 

 

 

 

500,000

 

670,000

 

Warrants (Fully diluted 25.5%)

 

 

 

 

 

250,000

 

640,000

 

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

 

 

 

1,118,700

 

1,118,700

 

1,118,700

 

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

 

 

 

 

 

250,000

 

250,000

 

 

 

 

 

 

 

6,273,184

 

6,850,451

 

 

 

 

 

 

 

 

 

 

 

NAPCO Precast, LLC

 

Precast Concrete  Manufacturing

 

 

 

 

 

 

 

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

 

 

5,923,077

 

5,854,278

 

5,923,077

 

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

 

 

 

3,384,615

 

3,366,877

 

3,384,615

 

Member Units (7) (Fully diluted 35.3%)

 

 

 

 

 

2,020,000

 

4,580,000

 

 

 

 

 

 

 

11,241,155

 

13,887,692

 

 

 

 

 

 

 

 

 

 

 

NTS Holdings, Inc.

 

Trench & Traffic Safety Equipment

 

 

 

 

 

 

 

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

 

 

6,000,000

 

5,962,373

 

5,962,373

 

Member Units (7) (Fully diluted 72.3%)

 

 

 

 

 

1,621,255

 

656,000

 

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

 

 

 

 

 

10,336,288

 

10,336,288

 

 

 

 

 

 

 

17,919,916

 

16,954,661

 

 

 

 

 

 

 

 

 

 

 

OMi Holdings, Inc.

 

Manufacturer of Overhead Cranes

 

 

 

 

 

 

 

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

 

 

10,370,000

 

10,310,527

 

10,310,527

 

Common Stock (Fully diluted 48%)

 

 

 

 

 

1,080,000

 

270,000

 

 

 

 

 

 

 

11,390,527

 

10,580,527

 

 

 

 

 

 

 

 

 

 

 

PPL RVs, Inc.

 

RV Aftermarket Consignment/Parts

 

 

 

 

 

 

 

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

 

 

6,250,000

 

6,162,087

 

6,162,087

 

Member Units (Fully diluted 53.3%)

 

 

 

 

 

2,150,000

 

2,150,000

 

 

 

 

 

 

 

8,312,087

 

8,312,087

 

 

 

 

 

 

 

 

 

 

 

The MPI Group, LLC

 

Manufacturer of Custom Hollow Metal Doors, Frames and Accessories

 

 

 

 

 

 

 

4.5% current / 4.5% PIK Secured Debt (Maturity — October 2, 2013)

 

 

501,875

 

494,924

 

494,924

 

6% current / 6% PIK Secured Debt (Maturity — October 2, 2013)

 

 

5,025,000

 

4,846,695

 

4,846,695

 

Warrants (Fully diluted 47.1%)

 

 

 

 

895,943

 

400,000

 

 

 

 

 

 

 

6,237,562

 

5,741,619

 

 

 

 

 

 

 

 

 

 

 

Thermal & Mechanical Equipment, LLC

 

Heat Exchange / Filtration Products and Services

 

 

 

 

 

 

 

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

 

 

5,575,220

 

5,497,771

 

5,575,220

 

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

 

 

 

1,750,000

 

1,738,553

 

1,738,553

 

Warrants (Fully diluted 50.0%)

 

 

 

 

 

1,000,000

 

1,890,000

 

 

 

 

 

 

 

8,236,324

 

9,203,773

 

 

 

 

 

 

 

 

 

 

 

Uvalco Supply, LLC

 

Farm and Ranch Supply

 

 

 

 

 

 

 

Member Units (Fully diluted 39.6%) (7)

 

 

 

 

 

1,113,243

 

1,460,000

 

 

 

 

 

 

 

 

 

 

 

Vision Interests, Inc.

 

Manufacturer/Installer of Commercial Signage

 

 

 

 

 

 

 

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

 

 

9,400,000

 

8,424,811

 

8,022,651

 

2.6% current /10.4% PIK Secured Debt (Maturity - June 5, 2016)

 

 

 

660,000

 

638,739

 

638,739

 

Common Stock (Fully diluted 22.3%)

 

 

 

 

 

372,000

 

 

Warrants (Fully diluted 38.2%)

 

 

 

 

 

160,010

 

 

 

 

 

 

 

 

9,595,560

 

8,661,390

 

 

6



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2010

(Unaudited)

 

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

 

Industry

 

Principal (6)

 

Cost (6)

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Control Investments (3)

 

 

 

 

 

 

 

 

 

Ziegler’s NYPD, LLC

 

Casual Restaurant Group

 

 

 

 

 

 

 

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

 

 

 

1,000,000

 

993,458

 

993,458

 

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

 

 

 

4,740,973

 

4,687,857

 

4,687,857

 

Warrants (Fully diluted 47.6%)

 

 

 

 

 

600,000

 

470,000

 

 

 

 

 

 

 

6,281,315

 

6,151,315

 

 

 

 

 

 

 

 

 

 

 

Subtotal Control Investments

 

 

 

 

 

160,346,215

 

174,110,910

 

 

7



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2010

(Unaudited)

 

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

 

Industry

 

Principal (6)

 

Cost (6)

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Affiliate Investments (4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

American Sensor Technologies, Inc.

 

Manufacturer of Commercial/ Industrial Sensors

 

 

 

 

 

 

 

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

 

 

3,020,385

 

2,994,826

 

2,994,826

 

Warrants (Fully diluted 19.6%)

 

 

 

 

 

49,990

 

1,540,000

 

 

 

 

 

 

 

3,044,816

 

4,534,826

 

 

 

 

 

 

 

 

 

 

 

Audio Messaging Solutions, LLC

 

Audio Messaging Services

 

 

 

 

 

 

 

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

 

 

 

5,460,000

 

5,117,777

 

5,208,000

 

Warrants (Fully diluted 8.4%)

 

 

 

 

 

468,373

 

1,180,000

 

 

 

 

 

 

 

5,586,150

 

6,388,000

 

 

 

 

 

 

 

 

 

 

 

Compact Power Equipment Centers, LLC

 

Light to Medium Duty Equipment Rental

 

 

 

 

 

 

 

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

 

 

3,000,000

 

2,966,224

 

2,966,224

 

Member Units (Fully diluted 11.5%)

 

 

 

 

 

1,147

 

1,147

 

 

 

 

 

 

 

2,967,371

 

2,967,371

 

 

 

 

 

 

 

 

 

 

 

DrillingInfo, Inc.

 

Information Services for the Oil and Gas Industry

 

 

 

 

 

 

 

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

 

 

8,000,000

 

6,779,861

 

7,770,000

 

Member Units (Fully diluted 2.1%)

 

 

 

 

 

1,085,325

 

1,230,325

 

Warrants (Fully diluted 5.0%)

 

 

 

 

 

1,250,000

 

2,930,000

 

 

 

 

 

 

 

9,115,186

 

11,930,325

 

 

 

 

 

 

 

 

 

 

 

East Teak Fine Hardwoods, Inc.

 

Hardwood Products

 

 

 

 

 

 

 

Common Stock (Fully diluted 5.0%)

 

 

 

 

 

480,318

 

380,000

 

 

 

 

 

 

 

 

 

 

 

Houston Plating & Coatings, LLC

 

Plating & Industrial Coating Services

 

 

 

 

 

 

 

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

 

 

300,000

 

300,000

 

300,000

 

Member Units (7) (Fully diluted 11.1%)

 

 

 

 

 

335,000

 

2,885,000

 

 

 

 

 

 

 

635,000

 

3,185,000

 

 

 

 

 

 

 

 

 

 

 

KBK Industries, LLC

 

Specialty Manufacturer of Oilfield and Industrial Products

 

 

 

 

 

 

 

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

 

 

5,250,000

 

5,213,893

 

5,213,893

 

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

 

 

639,940

 

639,940

 

639,940

 

Member Units (7) (Fully diluted 19.3%)

 

 

 

 

340,833

 

1,500,333

 

 

 

 

 

 

 

6,194,666

 

7,354,166

 

 

 

 

 

 

 

 

 

 

 

Laurus Healthcare, LP

 

Healthcare Facilities / Services

 

 

 

 

 

 

 

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

 

 

2,275,000

 

3,062,500

 

3,062,500

 

Warrants (Fully diluted 14.1%)

 

 

 

 

79,505

 

3,860,000

 

 

 

 

 

 

 

3,142,005

 

6,922,500

 

 

 

 

 

 

 

 

 

 

 

Lighting Unlimited, LLC

 

Commercial and Residential Lighting Products and Design Services