Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

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

 

For the quarterly period ended June 30, 2011

 

OR

 

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

 

For the transition period from:             to             

 

Commission File Number: 001-33723

 

Main Street Capital Corporation

(Exact name of registrant as specified in its charter)

 

Maryland

 

41-2230745

(State or other jurisdiction of incorporation or organization)

 

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

 

 

 

1300 Post Oak Boulevard, Suite 800

 

 

Houston, TX

 

77056

(Address of principal executive offices)

 

(Zip Code)

 

(713) 350-6000

(Registrant’s telephone number including area code)

 

n/a

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

 

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

 

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

 

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

 

Large accelerated filer o

 

Accelerated filer x

 

 

 

Non-accelerated filer o

 

Smaller reporting company o

 

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

 

The number of shares outstanding of the issuer’s common stock as of August 4, 2011 was 23,197,465.

 

 

 



Table of Contents

 

TABLE OF CONTENTS

 

PART I
FINANCIAL INFORMATION

 

 

 

Item 1.

Financial Statements

 

 

 

 

 

Consolidated Balance Sheets — June 30, 2011 (unaudited) and December 31, 2010

1

 

 

 

 

Consolidated Statements of Operations (unaudited) — Three and six months ended June 30, 2011 and 2010

2

 

 

 

 

Consolidated Statements of Changes in Net Assets (unaudited) — Six months ended June 30, 2011 and 2010

3

 

 

 

 

Consolidated Statements of Cash Flows (unaudited) — Six months ended June 30, 2011 and 2010

4

 

 

 

 

Consolidated Schedule of Investments (unaudited) — June 30, 2011

5

 

 

 

 

Consolidated Schedule of Investments — December 31, 2010

13

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

20

 

 

 

Item 2.

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

39

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

54

 

 

 

Item 4.

Controls and Procedures

54

 

 

 

PART II
OTHER INFORMATION

 

 

 

Item 1.

Legal Proceedings

54

 

 

 

Item 1A.

Risk Factors

54

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

54

 

 

 

Item 6.

Exhibits

55

 

 

 

 

Signatures

56

 



Table of Contents

 

PART I — FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

 

 

 

June 30, 2011

 

December 31, 2010

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Portfolio investments at fair value:

 

 

 

 

 

Control investments (cost: $187,884,250 and $161,009,443 as of June 30, 2011 and December 31, 2010, respectively)

 

$

206,162,509

 

$

174,596,394

 

Affiliate investments (cost: $79,599,578 and $65,650,789 as of June 30, 2011 and December 31, 2010, respectively)

 

103,864,454

 

80,206,804

 

Non-Control/Non-Affiliate investments (cost: $157,923,128 and $91,911,304 as of June 30, 2011 and December 31, 2010, respectively)

 

159,737,085

 

91,956,221

 

Investment in affiliated Investment Manager (cost: $4,284,042 as of June 30, 2011 and December 31, 2010)

 

1,964,649

 

2,051,655

 

 

 

 

 

 

 

Total portfolio investments (cost: $429,690,998 and $322,855,578 as of June 30, 2011 and December 31, 2010, respectively)

 

471,728,697

 

348,811,074

 

Marketable securities and idle funds investments (cost: $118,916,360 and $67,970,907 as of June 30, 2011 and December 31, 2010, respectively)

 

120,299,248

 

68,752,858

 

 

 

 

 

 

 

Total investments (cost: $548,607,358 and $390,826,485 as of June 30, 2011 and December 31, 2010, respectively)

 

592,027,945

 

417,563,932

 

 

 

 

 

 

 

Cash and cash equivalents

 

14,132,738

 

22,334,340

 

Deferred tax asset

 

 

1,958,593

 

Interest receivable and other assets

 

7,377,424

 

4,523,792

 

Deferred financing costs (net of accumulated amortization of $1,810,987 and $1,504,584 as of June 30, 2011 and December 31, 2010, respectively)

 

3,715,272

 

2,543,645

 

 

 

 

 

 

 

Total assets

 

$

617,253,379

 

$

448,924,302

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

SBIC debentures (par: $210,000,000 and $180,000,000 as of June 30, 2011 and December 31, 2010, respectively; of which $72,637,267 and $70,557,975 are recorded at fair value as of June 30, 2011 and December 31, 2010, respectively)

 

$

187,637,267

 

$

155,557,975

 

Credit facility

 

73,000,000

 

39,000,000

 

Payable for securities purchased

 

10,805,000

 

 

Interest payable

 

3,717,072

 

3,194,870

 

Dividend payable

 

3,013,738

 

 

Deferred tax liability

 

953,719

 

 

Payable to affiliated Investment Manager

 

2,237,417

 

15,124

 

Accounts payable and other liabilities

 

1,261,674

 

1,173,295

 

 

 

 

 

 

 

Total liabilities

 

282,625,887

 

198,941,264

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

NET ASSETS

 

 

 

 

 

 

 

 

 

 

 

Common stock, $0.01 par value per share (150,000,000 shares authorized; 23,182,600 and 18,797,444 issued and outstanding as of June 30, 2011 and December 31, 2010, respectively)

 

231,826

 

187,975

 

Additional paid-in capital

 

300,130,851

 

224,485,165

 

Accumulated net investment income

 

7,435,312

 

9,261,405

 

Accumulated net realized loss from investments

 

(20,499,798

)

(20,541,897

)

Net unrealized appreciation, net of income taxes

 

42,833,531

 

32,141,997

 

 

 

 

 

 

 

Total Net Asset Value

 

330,131,722

 

245,534,645

 

 

 

 

 

 

 

Noncontrolling interest

 

4,495,770

 

4,448,393

 

 

 

 

 

 

 

Total net assets including noncontrolling interests

 

334,627,492

 

249,983,038

 

 

 

 

 

 

 

Total liabilities and net assets

 

$

617,253,379

 

$

448,924,302

 

 

 

 

 

 

 

NET ASSET VALUE PER SHARE

 

$

14.24

 

$

13.06

 

 

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 June 30,

 

Six Months Ended June 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

INVESTMENT INCOME:

 

 

 

 

 

 

 

 

 

Interest, fee and dividend income:

 

 

 

 

 

 

 

 

 

Control investments

 

$

6,491,097

 

$

4,532,343

 

$

12,140,859

 

$

8,127,651

 

Affiliate investments

 

3,113,091

 

1,953,832

 

5,259,510

 

3,762,445

 

Non-Control/Non-Affiliate investments

 

4,325,520

 

1,686,032

 

7,656,629

 

2,549,428

 

Total interest, fee and dividend income

 

13,929,708

 

8,172,207

 

25,056,998

 

14,439,524

 

Interest from marketable securities, idle funds and other

 

2,199,054

 

560,012

 

4,446,336

 

1,385,534

 

Total investment income

 

16,128,762

 

8,732,219

 

29,503,334

 

15,825,058

 

EXPENSES:

 

 

 

 

 

 

 

 

 

Interest

 

(3,263,807

)

(2,111,868

)

(6,166,012

)

(4,105,105

)

General and administrative

 

(599,361

)

(246,194

)

(1,106,543

)

(671,898

)

Expenses reimbursed to affiliated Investment Manager

 

(2,207,606

)

(1,330,611

)

(4,337,412

)

(2,482,798

)

Share-based compensation

 

(442,897

)

(301,458

)

(885,794

)

(602,916

)

Total expenses

 

(6,513,671

)

(3,990,131

)

(12,495,761

)

(7,862,717

)

NET INVESTMENT INCOME

 

9,615,091

 

4,742,088

 

17,007,573

 

7,962,341

 

 

 

 

 

 

 

 

 

 

 

NET REALIZED GAIN (LOSS) FROM INVESTMENTS:

 

 

 

 

 

 

 

 

 

Control investments

 

 

2,301,745

 

 

(1,719,173

)

Marketable securities and idle funds investments

 

249,654

 

353,487

 

249,654

 

313,948

 

Total net realized gain (loss) from investments

 

249,654

 

2,655,232

 

249,654

 

(1,405,225

)

NET REALIZED INCOME

 

9,864,745

 

7,397,320

 

17,257,227

 

6,557,116

 

 

 

 

 

 

 

 

 

 

 

NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):

 

 

 

 

 

 

 

 

 

Portfolio investments

 

11,524,983

 

957,432

 

15,543,567

 

6,072,091

 

Marketable securities and idle funds investments

 

519,734

 

(484,585

)

634,477

 

(231,281

)

SBIC debentures

 

(2,117,924

)

1,475,861

 

(2,079,292

)

1,757,054

 

Investment in affiliated Investment Manager

 

(45,700

)

(141,117

)

(87,006

)

(286,196

)

Total net change in unrealized appreciation

 

9,881,093

 

1,807,591

 

14,011,746

 

7,311,668

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

(1,962,206

)

(36,686

)

(3,162,612

)

(421,260

)

Bargain purchase gain

 

 

 

 

4,890,582

 

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

 

17,783,632

 

9,168,225

 

28,106,361

 

18,338,106

 

Noncontrolling interest

 

(157,600

)

(295,559

)

(157,600

)

(408,895

)

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

 

$

17,626,032

 

$

8,872,666

 

$

27,948,761

 

$

17,929,211

 

 

 

 

 

 

 

 

 

 

 

NET INVESTMENT INCOME PER SHARE - BASIC AND DILUTED

 

$

0.41

 

$

0.31

 

$

0.79

 

$

0.53

 

NET REALIZED INCOME PER SHARE - BASIC AND DILUTED

 

$

0.42

 

$

0.49

 

$

0.80

 

$

0.44

 

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

 

$

0.77

 

$

0.59

 

$

1.32

 

$

1.22

 

DIVIDENDS PAID PER SHARE

 

$

0.39

 

$

0.38

 

$

0.77

 

$

0.75

 

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED

 

23,015,718

 

15,147,091

 

21,128,360

 

14,754,121

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Unrealized

 

 

 

 

 

Total Net

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

Appreciation from

 

 

 

 

 

Assets

 

 

 

Common Stock

 

Additional

 

Accumulated

 

Net Realized

 

Investments,

 

 

 

 

 

Including

 

 

 

Number

 

Par

 

Paid-In

 

Net Investment

 

Loss From

 

Net of Income

 

Total Net

 

Noncontrolling

 

Noncontrolling

 

 

 

of Shares

 

Value

 

Capital

 

Income

 

Investments

 

Taxes

 

Asset Value

 

Interest

 

Interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 offering of common stock, net of offering costs

 

2,875,000

 

28,750

 

40,079,845

 

 

 

 

40,108,595

 

 

40,108,595

 

Share-based compensation

 

 

 

602,916

 

 

 

 

602,916

 

 

602,916

 

Dividend reinvestment

 

248,803

 

2,487

 

3,793,741

 

 

 

 

3,796,228

 

 

3,796,228

 

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

 

 

 

 

(11,331,527

)

(1,349,863

)

 

(12,681,390

)

 

(12,681,390

)

Net increase resulting from operations

 

 

 

 

7,962,341

 

(1,405,225

)

6,890,408

 

13,447,524

 

 

13,447,524

 

Noncontrolling interest

 

 

 

 

 

 

(408,895

)

(408,895

)

408,895

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at June 30, 2010

 

15,213,053

 

$

152,130

 

$

174,375,323

 

$

8,791,262

 

$

(18,677,108

)

$

21,151,217

 

$

185,792,824

 

$

3,646,105

 

$

189,438,929

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31, 2010

 

18,797,444

 

$

187,975

 

$

224,485,165

 

$

9,261,405

 

$

(20,541,897

)

$

32,141,997

 

$

245,534,645

 

$

4,448,393

 

$

249,983,038

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Public offering of common stock, net of offering costs

 

4,025,000

 

40,250

 

70,309,656

 

 

 

 

70,349,906

 

 

70,349,906

 

Share-based compensation

 

 

 

885,794

 

 

 

 

885,794

 

 

885,794

 

Dividend reinvestment

 

235,844

 

2,358

 

4,451,479

 

 

 

 

4,453,837

 

 

4,453,837

 

Issuance of restricted stock

 

124,312

 

1,243

 

(1,243

)

 

 

 

 

 

 

Distributions to noncontrolling interest

 

 

 

 

 

 

 

 

(110,223

)

(110,223

)

Dividends to stockholders

 

 

 

 

(18,833,666

)

(207,555

)

 

(19,041,221

)

 

(19,041,221

)

Net increase resulting from operations

 

 

 

 

17,007,573

 

249,654

 

10,849,134

 

28,106,361

 

 

28,106,361

 

Noncontrolling interest

 

 

 

 

 

 

(157,600

)

(157,600

)

157,600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at June 30, 2011

 

23,182,600

 

$

231,826

 

$

300,130,851

 

$

7,435,312

 

$

(20,499,798

)

$

42,833,531

 

$

330,131,722

 

$

4,495,770

 

$

334,627,492

 

 

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)

 

 

 

Six Months Ended June 30,

 

 

 

2011

 

2010

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

Net increase in net assets resulting from operations

 

$

28,106,361

 

$

18,338,106

 

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

 

 

 

 

 

Net change in unrealized appreciation

 

(14,011,746

)

(7,311,668

)

Net realized (gain) loss from investments

 

(249,654

)

1,405,225

 

Bargain purchase gain

 

 

(4,890,582

)

Accretion of unearned income

 

(2,699,360

)

(1,092,705

)

Net payment-in-kind interest accrual 

 

(2,014,999

)

(429,153

)

Share-based compensation expense

 

885,794

 

602,916

 

Amortization of deferred financing costs

 

306,403

 

195,868

 

Deferred taxes

 

2,912,311

 

(185

)

Changes in other assets and liabilities:

 

 

 

 

 

Interest receivable and other assets

 

(1,400,332

)

(1,204,605

)

Interest payable

 

522,202

 

233,897

 

Payable to affiliated Investment Manager

 

2,222,293

 

384,431

 

Accounts payable and other liabilities

 

88,379

 

431,922

 

Deferred fees and other

 

737,240

 

689,700

 

Net cash provided by operating activities

 

15,404,892

 

7,353,167

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

Investments in portfolio companies

 

(116,120,574

)

(85,739,245

)

Principal payments received on loans and debt securities in portfolio companies

 

19,627,346

 

2,670,737

 

Proceeds from sale of equity investments and related notes in portfolio companies

 

375,906

 

3,151,500

 

Cash acquired in MSC II exchange offer

 

 

2,489,920

 

Investments in marketable securities and idle funds investments

 

(77,953,572

)

(30,734,400

)

Proceeds from marketable securities and idle funds investments

 

29,276,393

 

19,546,235

 

Net cash used in investing activities

 

(144,794,501

)

(88,615,253

)

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

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

 

70,349,906

 

40,108,595

 

Distributions to noncontrolling interest

 

(110,223

)

 

Dividends paid to stockholders

 

(11,573,646

)

(6,983,532

)

Proceeds from issuance of SBIC debentures

 

30,000,000

 

10,000,000

 

Proceeds from credit facility

 

99,000,000

 

30,650,000

 

Repayments on credit facility

 

(65,000,000

)

(18,150,000

)

Payment of deferred loan costs and SBIC debenture fees

 

(1,478,030

)

(252,810

)

Net cash provided by financing activities

 

121,188,007

 

55,372,253

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

(8,201,602

)

(25,889,833

)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

22,334,340

 

30,619,998

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

14,132,738

 

$

4,730,165

 

 

The accompanying notes are an integral part of these financial statements

 

4



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2011

(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, 2013)

 

 

 

1,700,000

 

1,698,240

 

1,700,000

 

Member Units (Fully diluted 41.0%) (7)

 

 

 

 

 

41,837

 

2,860,220

 

 

 

 

 

 

 

1,740,077

 

4,560,220

 

 

 

 

 

 

 

 

 

 

 

California Healthcare Medical Billing, Inc.

 

Healthcare Billing and Records Management

 

 

 

 

 

 

 

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

 

 

 

7,803,000

 

7,419,403

 

7,718,351

 

Warrants (Fully diluted 20.1%)

 

 

 

 

 

1,193,333

 

3,380,333

 

Common Stock (Fully diluted 9.7%)

 

 

 

 

 

1,176,667

 

1,390,000

 

 

 

 

 

 

 

9,789,403

 

12,488,684

 

 

 

 

 

 

 

 

 

 

 

CBT Nuggets, LLC

 

Produces and Sells IT Certification Training Videos

 

 

 

 

 

 

 

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

 

 

 

2,725,000

 

2,725,000

 

2,725,000

 

Member Units (Fully diluted 40.8%) (7)

 

 

 

 

 

1,299,520

 

4,360,000

 

 

 

 

 

 

 

4,024,520

 

7,085,000

 

 

 

 

 

 

 

 

 

 

 

Ceres Management, LLC (Lambs)

 

Aftermarket Automotive Services Chain

 

 

 

 

 

 

 

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

 

 

 

4,000,000

 

3,970,924

 

3,970,924

 

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

 

 

 

1,225,000

 

1,225,000

 

1,225,000

 

Class B Member Units (15% cumulative) (Non-voting) (7)

 

 

 

 

 

2,409,667

 

2,409,667

 

Member Units (Fully diluted 100%)

 

 

 

 

 

1,813,333

 

390,000

 

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

 

 

 

 

 

625,000

 

750,000

 

 

 

 

 

 

 

10,043,924

 

8,745,591

 

 

 

 

 

 

 

 

 

 

 

Condit Exhibits, LLC

 

Tradeshow Exhibits/Custom Displays

 

 

 

 

 

 

 

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

 

 

 

4,660,948

 

4,626,472

 

4,626,472

 

Warrants (Fully diluted 47.9%)

 

 

 

 

 

320,000

 

220,000

 

 

 

 

 

 

 

4,946,472

 

4,846,472

 

 

 

 

 

 

 

 

 

 

 

Currie Acquisitions, LLC

 

Consumer Products

 

 

 

 

 

 

 

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

 

 

 

4,750,000

 

4,039,149

 

3,039,149

 

Warrants (Fully diluted 47.3%)

 

 

 

 

 

2,566,204

 

 

 

 

 

 

 

 

6,605,353

 

3,039,149

 

 

 

 

 

 

 

 

 

 

 

Gulf Manufacturing, LLC

 

Industrial Metal Fabrication

 

 

 

 

 

 

 

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

 

 

 

1,185,131

 

1,185,131

 

1,185,131

 

Member Units (Fully diluted 34.2%) (7)

 

 

 

 

 

2,979,813

 

8,560,000

 

 

 

 

 

 

 

4,164,944

 

9,745,131

 

 

 

 

 

 

 

 

 

 

 

Harrison Hydra-Gen, Ltd.

 

Manufacturer of Hydraulic Generators

 

 

 

 

 

 

 

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

 

 

 

5,737,375

 

5,082,668

 

5,400,000

 

Preferred stock (8% cumulative) (7)

 

 

 

 

 

1,040,222

 

1,040,222

 

Warrants (Fully diluted 35.2%)

 

 

 

 

 

717,640

 

1,360,000

 

 

 

 

 

 

 

6,840,530

 

7,800,222

 

 

 

 

 

 

 

 

 

 

 

Hawthorne Customs & Dispatch Services, LLC

 

Transportation/ Logistics

 

 

 

 

 

 

 

Member Units (Fully diluted 59.1%) (7)

 

 

 

 

 

692,500

 

1,300,000

 

Member Units (Wallisville Real Estate, LLC) (Fully diluted 59.1%) (7)

 

 

 

 

 

1,214,784

 

1,214,784

 

 

 

 

 

 

 

1,907,284

 

2,514,784

 

 

 

 

 

 

 

 

 

 

 

Hydratec, Inc.

 

Agricultural Services

 

 

 

 

 

 

 

Common Stock (Fully diluted 92.5%) (7)

 

 

 

 

 

7,089,911

 

10,414,911

 

 

 

 

 

 

 

 

 

 

 

Indianapolis Aviation Partners, LLC

 

FBO / Aviation Support Services

 

 

 

 

 

 

 

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

 

 

 

4,500,000

 

4,178,150

 

4,350,000

 

Warrants (Fully diluted 30.1%)

 

 

 

 

 

1,129,286

 

1,270,286

 

 

 

 

 

 

 

5,307,436

 

5,620,286

 

 

5



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2011

(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%, Current Coupon 5.25%, Secured Debt (Maturity - November 14, 2013)

 

 

 

2,260,000

 

2,258,575

 

2,260,000

 

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

 

 

 

2,344,896

 

2,343,198

 

2,344,896

 

Member Units (Fully diluted 60.8%) (7)

 

 

 

 

 

811,000

 

1,750,000

 

 

 

 

 

 

 

5,412,773

 

6,354,896

 

 

 

 

 

 

 

 

 

 

 

Lighting Unlimited, LLC

 

Commercial and Residential Lighting Products and Design Services

 

 

 

 

 

 

 

8% Secured Debt (Maturity - August 22, 2012)

 

 

 

2,000,000

 

1,972,676

 

1,972,676

 

Preferred Stock (non-voting)

 

 

 

 

 

510,098

 

510,098

 

Warrants (Fully diluted 7.07%)

 

 

 

 

 

54,000

 

 

Common Stock (Fully diluted 70.0%)

 

 

 

 

 

100,000

 

100,000

 

 

 

 

 

 

 

2,636,774

 

2,582,774

 

 

 

 

 

 

 

 

 

 

 

Mid-Columbia Lumber Products, LLC

 

Specialized Lumber Products

 

 

 

 

 

 

 

10% Secured Debt (Maturity - April 1, 2012)

 

 

 

1,250,000

 

1,250,000

 

1,250,000

 

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

 

 

 

3,900,000

 

3,872,028

 

3,900,000

 

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

 

 

 

1,084,800

 

1,084,800

 

1,084,800

 

Warrants (Fully diluted 9.2%)

 

 

 

 

 

250,000

 

890,000

 

Member Units (Fully diluted 42.9%)

 

 

 

 

 

812,000

 

930,000

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

250,000

 

810,000

 

 

 

 

 

 

 

7,518,828

 

8,864,800

 

 

 

 

 

 

 

 

 

 

 

NAPCO Precast, LLC

 

Precast Concrete Manufacturing

 

 

 

 

 

 

 

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

 

 

 

5,923,077

 

5,873,252

 

5,923,077

 

Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - February 1, 2013) (8)

 

 

 

3,384,615

 

3,372,167

 

3,384,615

 

Member Units (Fully diluted 35.3%) (7)

 

 

 

 

 

2,020,000

 

3,510,000

 

 

 

 

 

 

 

11,265,419

 

12,817,692

 

 

 

 

 

 

 

 

 

 

 

NTS Holdings, Inc.

 

Trench & Traffic Safety Equipment

 

 

 

 

 

 

 

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

 

 

 

6,000,000

 

5,967,193

 

5,967,193

 

Preferred stock (12% cumulative) (7)

 

 

 

 

 

11,251,405

 

11,251,405

 

Common Stock (Fully diluted 72.3%)

 

 

 

 

 

1,621,255

 

190,000

 

 

 

 

 

 

 

18,839,853

 

17,408,598

 

 

 

 

 

 

 

 

 

 

 

OMi Holdings, Inc.

 

Manufacturer of Overhead Cranes

 

 

 

 

 

 

 

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

 

 

 

9,770,000

 

9,729,276

 

9,729,276

 

Common Stock (Fully diluted 48.0%)

 

 

 

 

 

1,080,000

 

1,300,000

 

 

 

 

 

 

 

10,809,276

 

11,029,276

 

 

 

 

 

 

 

 

 

 

 

Pegasus Research Group, LLC (Televerde)

 

Telemarketing and Data Services

 

 

 

 

 

 

 

13% Current / 3% PIK Secured Debt (Maturity - January 6, 2016)

 

 

 

6,342,002

 

6,261,422

 

6,261,422

 

Member Units (Fully diluted 43.7%)

 

 

 

 

 

1,250,000

 

1,250,000

 

 

 

 

 

 

 

7,511,422

 

7,511,422

 

 

 

 

 

 

 

 

 

 

 

PPL RVs, Inc.

 

Recreational Vehicle Parts and Consignment

 

 

 

 

 

 

 

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

 

 

 

5,750,000

 

5,677,710

 

5,750,000

 

Member Units (Fully diluted 50.1%)

 

 

 

 

 

2,150,000

 

3,250,000

 

 

 

 

 

 

 

7,827,710

 

9,000,000

 

 

 

 

 

 

 

 

 

 

 

Principle Environmental, LLC

 

Noise Abatement Products/Services

 

 

 

 

 

 

 

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

 

 

 

5,500,000

 

4,271,016

 

4,271,016

 

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

 

 

 

500,000

 

490,000

 

490,000

 

Warrants (Fully diluted 15%)

 

 

 

 

 

1,200,000

 

1,200,000

 

Member Units (Fully diluted 25%)

 

 

 

 

 

2,000,000

 

2,000,000

 

 

 

 

 

 

 

7,961,016

 

7,961,016

 

 

 

 

 

 

 

 

 

 

 

River Aggregates, LLC

 

Construction Aggregates

 

 

 

 

 

 

 

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

 

 

 

3,500,000

 

3,314,494

 

3,314,494

 

Warrants (Fully diluted 10%)

 

 

 

 

 

122,500

 

122,500

 

Member Units (Fully diluted 45%)

 

 

 

 

 

550,000

 

550,000

 

 

 

 

 

 

 

3,986,994

 

3,986,994

 

 

 

 

 

 

 

 

 

 

 

The MPI Group, LLC

 

Manufacturer of Custom
Hollow Metal Doors,
Frames and Accessories

 

 

 

 

 

 

 

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

 

 

 

1,022,013

 

1,016,675

 

1,016,675

 

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

 

 

 

5,252,500

 

5,112,604

 

5,112,604

 

Warrants (Fully diluted 47.1%)

 

 

 

 

 

895,943

 

 

 

 

 

 

 

 

7,025,222

 

6,129,279

 

 

6



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2011

(Unaudited)

 

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

 

Industry

 

Principal (6)

 

Cost (6)

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Control Investments (3)

 

 

 

 

 

 

 

 

 

Thermal & Mechanical Equipment, LLC

 

Heat Exchange / Filtration Products and Services

 

 

 

 

 

 

 

Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - September 25, 2014) (8)

 

 

 

1,415,540

 

1,407,768

 

1,407,768

 

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

 

 

 

4,509,680

 

4,455,564

 

4,509,680

 

Member Units (Fully diluted 50.0%) (7)

 

 

 

 

 

1,000,000

 

3,720,000

 

 

 

 

 

 

 

6,863,332

 

9,637,448

 

 

 

 

 

 

 

 

 

 

 

Uvalco Supply, LLC

 

Farm and Ranch Supply

 

 

 

 

 

 

 

Member Units (Fully diluted 42.8%) (7)

 

 

 

 

 

1,113,243

 

2,060,000

 

 

 

 

 

 

 

 

 

 

 

Van Gilder Insurance Corporation

 

Insurance Brokerage

 

 

 

 

 

 

 

8% Secured Debt (Maturity - January 31, 2016)

 

 

 

1,890,445

 

1,864,206

 

1,864,206

 

13% Secured Debt (Maturity - January 31, 2016)

 

 

 

6,150,000

 

4,906,126

 

4,906,126

 

Warrants (Fully diluted 10%)

 

 

 

 

 

1,208,643

 

1,208,643

 

Common Stock (Fully diluted 15.51%)

 

 

 

 

 

2,499,876

 

2,499,876

 

 

 

 

 

 

 

10,478,851

 

10,478,851

 

 

 

 

 

 

 

 

 

 

 

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

 

6,322,651

 

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

 

 

 

760,000

 

740,587

 

740,587

 

Warrants (Fully diluted 38.2%)

 

 

 

 

 

160,010

 

 

Common Stock (Fully diluted 22.3%)

 

 

 

 

 

372,000

 

 

 

 

 

 

 

 

9,697,408

 

7,063,238

 

 

 

 

 

 

 

 

 

 

 

Ziegler’s NYPD, LLC

 

Casual Restaurant Group

 

 

 

 

 

 

 

Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - October 31, 2013) (8)

 

 

 

1,000,000

 

994,928

 

994,928

 

13% Current / 5% PIK Secured Debt (Maturity - October 31, 2013)

 

 

 

4,923,793

 

4,881,347

 

4,881,347

 

Warrants (Fully diluted 46.6%)

 

 

 

 

 

600,000

 

539,500

 

 

 

 

 

 

 

6,476,275

 

6,415,775

 

 

 

 

 

 

 

 

 

 

 

Subtotal Control Investments (34.8% of total investments at fair value)

 

 

 

 

 

187,884,250

 

206,162,509

 

 

7



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2011

(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% Secured Debt (Maturity - May 31, 2012)

 

 

 

3,297,783

 

3,283,052

 

3,283,052

 

Warrants (Fully diluted 19.6%)

 

 

 

 

 

49,990

 

2,230,000

 

 

 

 

 

 

 

3,333,042

 

5,513,052

 

 

 

 

 

 

 

 

 

 

 

Audio Messaging Solutions, LLC

 

Audio Messaging Services

 

 

 

 

 

 

 

12% Secured Debt (Maturity - June 16, 2016)

 

 

 

14,560,000

 

14,008,544

 

14,426,000

 

Warrants (Fully diluted 9.8%)

 

 

 

 

 

886,933

 

2,110,000

 

 

 

 

 

 

 

14,895,477

 

16,536,000

 

 

 

 

 

 

 

 

 

 

 

Compact Power Equipment Centers LLC

 

Light to Medium Duty Equipment Rental

 

 

 

 

 

 

 

6% Current / 6% PIK Secured Debt (Maturity - December 30, 2014)

 

 

 

2,769,142

 

2,743,190

 

2,743,190

 

Series A Member Units (8% cumulative) (7)

 

 

 

 

 

820,110

 

820,110

 

Member Units (Fully diluted 10.6%)

 

 

 

 

 

1,147

 

1,147

 

 

 

 

 

 

 

3,564,447

 

3,564,447

 

 

 

 

 

 

 

 

 

 

 

DrillingInfo, Inc.

 

Information Services for the Oil and Gas Industry

 

 

 

 

 

 

 

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

 

 

 

8,000,000

 

6,943,909

 

8,000,000

 

8.75% Secured Debt (Maturity - April 18, 2016)

 

 

 

750,000

 

750,000

 

750,000

 

Warrants (Fully diluted 4.9%)

 

 

 

 

 

1,250,000

 

8,330,000

 

Common Stock (Fully diluted 2.4%)

 

 

 

 

 

1,335,325

 

3,930,325

 

 

 

 

 

 

 

10,279,234

 

21,010,325

 

 

 

 

 

 

 

 

 

 

 

East Teak Fine Hardwoods, Inc.

 

Hardwood Products

 

 

 

 

 

 

 

Common Stock (Fully diluted 5.0%)

 

 

 

 

 

480,318

 

330,000

 

 

 

 

 

 

 

 

 

 

 

Houston Plating & Coatings, LLC

 

Plating & Industrial Coating Services

 

 

 

 

 

 

 

Prime Plus 2%, Current Coupon 5.25%, Debt (Maturity - July 18, 2013)

 

 

 

300,000

 

300,000

 

300,000

 

Member Units (Fully diluted 11.1%) (7)

 

 

 

 

 

335,000

 

3,605,000

 

 

 

 

 

 

 

635,000

 

3,905,000

 

 

 

 

 

 

 

 

 

 

 

IRTH Holdings, LLC

 

Utility Technology Services

 

 

 

 

 

 

 

12% Secured Debt (Maturity - December 29, 2015)

 

 

 

5,683,940

 

5,588,476

 

5,683,940

 

Member Units (Fully diluted 22.3%)

 

 

 

 

 

850,000

 

1,570,000

 

 

 

 

 

 

 

6,438,476

 

7,253,940

 

 

 

 

 

 

 

 

 

 

 

KBK Industries, LLC

 

Specialty Manufacturer of Oilfield and Industrial Products

 

 

 

 

 

 

 

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

 

 

 

264,940

 

264,940

 

264,940

 

14% Secured Debt (Maturity - January 23, 2014)

 

 

 

5,250,000

 

5,250,000

 

5,250,000

 

Member Units (Fully diluted 18.8%) (7)

 

 

 

 

 

340,833

 

2,180,000

 

 

 

 

 

 

 

5,855,773

 

7,694,940

 

 

 

 

 

 

 

 

 

 

 

Laurus Healthcare, LP

 

Healthcare Facilities / Services

 

 

 

 

 

 

 

9% Secured Debt (Maturity - May 12, 2016)

 

 

 

6,150,000

 

6,150,000

 

6,150,000

 

Class A and C Units (Fully diluted 13.1%) (7)

 

 

 

 

 

79,505

 

5,360,000

 

 

 

 

 

 

 

6,229,505

 

11,510,000

 

 

 

 

 

 

 

 

 

 

 

Merrick Systems, Inc.

 

Software and Information Technology

 

 

 

 

 

 

 

13% Secured Debt (Maturity - May 5, 2015)

 

 

 

2,900,000

 

2,491,742

 

2,680,000

 

Warrants (Fully diluted 6.5%)

 

 

 

 

 

450,000

 

880,000

 

 

 

 

 

 

 

2,941,742

 

3,560,000

 

 

 

 

 

 

 

 

 

 

 

Olympus Building Services, Inc.

 

Custodial/Facilities Services

 

 

 

 

 

 

 

12% Secured Debt (Maturity - March 27, 2014)

 

 

 

3,150,000

 

2,952,389

 

3,050,000

 

12% Current / 3% PIK Secured Debt (Maturity - March 27, 2014)

 

 

 

998,843

 

998,843

 

998,843

 

Warrants (Fully diluted 22.5%)

 

 

 

 

 

470,000

 

600,000

 

 

 

 

 

 

 

4,421,232

 

4,648,843

 

 

 

 

 

 

 

 

 

 

 

OnAsset Intelligence, Inc.

 

Transportation Monitoring/Tracking Services

 

 

 

 

 

 

 

12% Secured Debt (Maturity - October 18, 2012)

 

 

 

1,500,000

 

697,470

 

697,470

 

Preferred Stock (7% cumulative) (Fully diluted 5.75%) (7)

 

 

 

 

 

1,521,585

 

1,521,585

 

Warrants (Fully diluted 4.0%)

 

 

 

 

 

830,000

 

830,000

 

 

 

 

 

 

 

3,049,055

 

3,049,055

 

 

8



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2011

(Unaudited)

 

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