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, 2013

 

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 November 7, 2013 was 39,734,794.

 

 

 



Table of Contents

 

TABLE OF CONTENTS

 

PART I
FINANCIAL INFORMATION

 

 

 

Item 1.

Financial Statements

 

 

 

 

 

Consolidated Balance Sheets — September 30, 2013 (unaudited) and December 31, 2012

1

 

 

 

 

Consolidated Statements of Operations (unaudited) — Three and nine months ended September 30, 2013 and 2012

2

 

 

 

 

Consolidated Statements of Changes in Net Assets (unaudited) — Nine months ended September 30, 2013 and 2012

3

 

 

 

 

Consolidated Statements of Cash Flows (unaudited) — Nine months ended September 30, 2013 and 2012

4

 

 

 

 

Consolidated Schedule of Investments (unaudited) — September 30, 2013

5

 

 

 

 

Consolidated Schedule of Investments — December 31, 2012

22

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

37

 

 

 

Item 2.

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

65

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

85

 

 

 

Item 4.

Controls and Procedures

85

 

 

 

PART II
OTHER INFORMATION

 

 

 

Item 1.

Legal Proceedings

85

 

 

 

Item 1A.

Risk Factors

86

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

86

 

 

 

Item 6.

Exhibits

86

 

 

 

 

Signatures

88

 



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

(in thousands, except shares and per share amounts)

 

 

 

September 30, 2013

 

December 31, 2012

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Portfolio investments at fair value:

 

 

 

 

 

Control investments (cost: $275,407 and $217,483 as of September 30, 2013 and December 31, 2012, respectively)

 

$

349,581

 

$

278,475

 

Affiliate investments (cost: $212,953 and $142,607 as of September 30, 2013 and December 31, 2012, respectively)

 

261,229

 

178,413

 

Non-Control/Non-Affiliate investments (cost: $526,197 and $456,975 as of September 30, 2013 and December 31, 2012, respectively)

 

541,597

 

467,543

 

Investment in affiliated Investment Manager (cost: $2,668 as of December 31, 2012)

 

 

 

 

 

 

 

 

 

Total portfolio investments (cost: $1,014,557 and $819,733 as of September 30, 2013 and December 31, 2012, respectively)

 

1,152,407

 

924,431

 

Marketable securities and idle funds investments (cost: $21,195 and $28,469 as of September 30, 2013 and December 31, 2012, respectively)

 

19,963

 

28,535

 

 

 

 

 

 

 

Total investments (cost: $1,035,752 and $848,202 as of September 30, 2013 and December 31, 2012, respectively)

 

1,172,370

 

952,966

 

 

 

 

 

 

 

Cash and cash equivalents

 

17,574

 

63,517

 

Interest receivable and other assets

 

14,429

 

14,580

 

Receivable for securities sold

 

25,639

 

 

Deferred financing costs (net of accumulated amortization of $4,370 and $3,203 as of September 30, 2013 and December 31, 2012, respectively)

 

9,312

 

5,162

 

 

 

 

 

 

 

Total assets

 

$

1,239,324

 

$

1,036,225

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

SBIC debentures (par: $161,200 as of September 30, 2013 and $225,000 as of December 31, 2012, par of $75,200 and $100,000 is recorded at a fair value of $62,259 and $86,467 as of September 30, 2013 and December 31, 2012, respectively)

 

$

148,259

 

$

211,467

 

Credit facility

 

166,000

 

132,000

 

Notes payable

 

90,882

 

 

Payable for securities purchased

 

12,913

 

20,661

 

Deferred tax liability, net

 

11,110

 

11,778

 

Accounts payable and other liabilities

 

7,414

 

4,527

 

Dividend payable

 

6,353

 

5,188

 

Interest payable

 

2,217

 

3,562

 

Payable to affiliated Investment Manager

 

 

4,066

 

 

 

 

 

 

 

Total liabilities

 

445,148

 

393,249

 

 

 

 

 

 

 

Commitments and contingencies (Note M)

 

 

 

 

 

 

 

 

 

 

 

NET ASSETS

 

 

 

 

 

 

 

 

 

 

 

Common stock, $0.01 par value per share (150,000,000 shares authorized; 39,698,645 and 34,589,484 shares issued and outstanding as of September 30, 2013 and December 31, 2012, respectively)

 

397

 

346

 

Additional paid-in capital

 

688,544

 

544,136

 

Accumulated net investment income, net of cumulative dividends of $181,149 and $115,401 as of September 30, 2013 and December 31, 2012, respectively

 

17,939

 

35,869

 

Accumulated net realized gain from investments (accumulated net realized gain from investments of $7,244 before cumulative dividends of $32,192 as of September 30, 2013 and accumulated net realized gain from investments of $9,838 before cumulative dividends of $28,993 as of December 31, 2012)

 

(24,948

)

(19,155

)

Net unrealized appreciation, net of income taxes

 

112,244

 

81,780

 

 

 

 

 

 

 

Total net assets

 

794,176

 

642,976

 

 

 

 

 

 

 

Total liabilities and net assets

 

$

1,239,324

 

$

1,036,225

 

 

 

 

 

 

 

NET ASSET VALUE PER SHARE

 

$

20.01

 

$

18.59

 

 

The accompanying notes are an integral part of these financial statements

 

1



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Operations

(in thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

INVESTMENT INCOME:

 

 

 

 

 

 

 

 

 

Interest, fee and dividend income:

 

 

 

 

 

 

 

 

 

Control investments

 

$

8,840

 

$

5,991

 

$

23,543

 

$

17,841

 

Affiliate investments

 

6,453

 

4,838

 

17,514

 

14,652

 

Non-Control/Non-Affiliate investments

 

13,974

 

12,015

 

40,974

 

30,263

 

Interest, fee and dividend income

 

29,267

 

22,844

 

82,031

 

62,756

 

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

 

392

 

110

 

1,073

 

1,599

 

Total investment income

 

29,659

 

22,954

 

83,104

 

64,355

 

EXPENSES:

 

 

 

 

 

 

 

 

 

Interest

 

(5,922

)

(3,923

)

(15,346

)

(11,967

)

Compensation

 

(2,575

)

 

(5,148

)

 

General and administrative

 

(1,533

)

(595

)

(3,471

)

(1,757

)

Expenses reimbursed to affiliated Investment Manager

 

 

(2,215

)

(3,189

)

(7,574

)

Share-based compensation

 

(2,152

)

(699

)

(3,357

)

(1,860

)

Total expenses

 

(12,182

)

(7,432

)

(30,511

)

(23,158

)

NET INVESTMENT INCOME

 

17,477

 

15,522

 

52,593

 

41,197

 

 

 

 

 

 

 

 

 

 

 

NET REALIZED GAIN (LOSS):

 

 

 

 

 

 

 

 

 

Control investments

 

(2,635

)

122

 

(2,635

)

(1,940

)

Affiliate investments

 

780

 

 

780

 

5,500

 

Non-Control/Non-Affiliate investments

 

(1,164

)

128

 

(1,024

)

478

 

Marketable securities and idle funds investments

 

22

 

277

 

285

 

1,297

 

SBIC debentures

 

(4,775

)

 

(4,775

)

 

Total net realized gain (loss)

 

(7,772

)

527

 

(7,369

)

5,335

 

NET REALIZED INCOME

 

9,705

 

16,049

 

45,224

 

46,532

 

 

 

 

 

 

 

 

 

 

 

NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):

 

 

 

 

 

 

 

 

 

Portfolio investments

 

14,475

 

22,096

 

30,889

 

44,120

 

Marketable securities and idle funds investments

 

(490

)

(151

)

(1,300

)

(235

)

SBIC debentures

 

4,839

 

(1,858

)

4,183

 

(3,367

)

Investment in affiliated Investment Manager

 

 

 

 

(51

)

Total net change in unrealized appreciation

 

18,824

 

20,087

 

33,772

 

40,467

 

 

 

 

 

 

 

 

 

 

 

INCOME TAXES:

 

 

 

 

 

 

 

 

 

Federal and state income, excise, and other taxes

 

(371

)

 

(1,793

)

(1,006

)

Deferred taxes

 

(104

)

(4,169

)

(1,515

)

(6,035

)

Income tax provision

 

(475

)

(4,169

)

(3,308

)

(7,041

)

 

 

 

 

 

 

 

 

 

 

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

 

28,054

 

31,967

 

75,688

 

79,958

 

Noncontrolling interest

 

 

 

 

(54

)

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

 

$

28,054

 

$

31,967

 

$

75,688

 

$

79,904

 

 

 

 

 

 

 

 

 

 

 

NET INVESTMENT INCOME PER SHARE - BASIC AND DILUTED

 

$

0.47

 

$

0.49

 

$

1.48

 

$

1.44

 

NET REALIZED INCOME PER SHARE - BASIC AND DILUTED

 

$

0.26

 

$

0.51

 

$

1.27

 

$

1.62

 

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

 

$

0.76

 

$

1.01

 

$

2.13

 

$

2.79

 

 

 

 

 

 

 

 

 

 

 

DIVIDENDS PAID PER SHARE:

 

 

 

 

 

 

 

 

 

Regular monthly dividends

 

$

0.47

 

$

0.44

 

$

1.38

 

$

1.26

 

Supplemental dividends

 

0.20

 

 

0.55

 

 

Total

 

$

0.67

 

$

0.44

 

$

1.93

 

$

1.26

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED

 

37,144,693

 

31,578,742

 

35,558,266

 

28,615,877

 

 

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

(in thousands, except shares)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

Net Unrealized

 

 

 

 

 

Total Net

 

 

 

 

 

 

 

 

 

Accumulated

 

Net Realized

 

Appreciation from

 

 

 

 

 

Assets

 

 

 

Common Stock

 

Additional

 

Net Investment

 

Gain From

 

Investments,

 

 

 

 

 

Including

 

 

 

Number

 

Par

 

Paid-In

 

Income, Net

 

Investments,

 

Net of Income

 

Total Net

 

Noncontrolling

 

Noncontrolling

 

 

 

of Shares

 

Value

 

Capital

 

of Dividends

 

Net of Dividends

 

Taxes

 

Asset Value

 

Interest

 

Interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31, 2011

 

26,714,384

 

$

267

 

$

360,164

 

$

12,531

 

$

(20,445

)

$

53,194

 

$

405,711

 

$

5,477

 

$

411,188

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Public offering of common stock, net of offering costs

 

4,312,500

 

43

 

92,950

 

 

 

 

 

 

 

92,993

 

 

 

92,993

 

MSC II noncontrolling interest acquisition

 

229,634

 

2

 

5,328

 

 

 

 

5,330

 

(5,417

)

(87

)

Adjustment to investment in Investment Manager related to MSC II noncontrolling interest acquisition

 

 

 

(1,616

)

 

 

 

(1,616

)

 

(1,616

)

Share-based compensation

 

 

 

1,860

 

 

 

 

1,860

 

 

1,860

 

Purchase of vested stock for employee payroll tax withholding

 

(40,549

)

 

 

(1,012

)

 

 

 

 

 

 

(1,012

)

 

 

(1,012

)

Dividend reinvestment

 

264,331

 

2

 

6,468

 

 

 

 

6,471

 

 

6,471

 

Issuance of restricted stock

 

139,033

 

1

 

(1

)

 

 

 

 

 

 

Distributions to noncontrolling interest

 

 

 

 

 

 

 

 

(114

)

(114

)

Dividends to stockholders

 

 

 

 

(22,439

)

(14,048

)

 

(36,487

)

 

(36,487

)

Net increase resulting from operations

 

 

 

 

41,197

 

5,335

 

33,426

 

79,958

 

 

79,958

 

Noncontrolling interest

 

 

 

 

 

 

(54

)

(54

)

54

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at September 30, 2012

 

31,619,333

 

$

315

 

$

464,141

 

$

31,289

 

$

(29,158

)

$

86,566

 

$

553,154

 

$

 

$

553,154

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31, 2012

 

34,589,484

 

$

346

 

$

544,136

 

$

35,869

 

$

(19,155

)

$

81,780

 

$

642,976

 

$

 

$

642,976

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Public offering of common stock, net of offering costs

 

4,600,000

 

46

 

131,407

 

 

 

 

131,453

 

 

131,453

 

Share-based compensation

 

 

 

3,357

 

 

 

 

3,357

 

 

3,357

 

Purchase of vested stock for employee payroll tax withholding

 

(62,025

)

(1

)

(1,764

)

 

 

 

(1,765

)

 

(1,765

)

Dividend reinvestment

 

278,166

 

3

 

8,727

 

 

 

 

8,730

 

 

8,730

 

Other

 

 

 

69

 

 

 

 

69

 

 

69

 

Issuance of restricted stock

 

274,895

 

3

 

(3

)

 

 

 

 

 

 

Consolidation of Investment Manager

 

 

 

2,037

 

 

 

 

2,037

 

 

2,037

 

Issuances of common stock

 

18,125

 

 

578

 

 

 

 

578

 

 

578

 

Dividends to stockholders

 

 

 

 

(65,748

)

(3,199

)

 

(68,947

)

 

(68,947

)

Net increase resulting from operations

 

 

 

 

47,818

 

(2,594

)

30,464

 

75,688

 

 

75,688

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at September 30, 2013

 

39,698,645

 

$

397

 

$

688,544

 

$

17,939

 

$

(24,948

)

$

112,244

 

$

794,176

 

$

 

$

794,176

 

 

The accompanying notes are an integral part of these financial statements

 

3



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2013

 

2012

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

Net increase in net assets resulting from operations

 

$

75,688

 

$

79,958

 

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

 

 

 

 

 

Investments in portfolio companies

 

(533,435

)

(397,912

)

Proceeds from sales and repayments of debt investments

 

325,150

 

246,138

 

Proceeds from sale of equity investments in portfolio companies

 

1,336

 

25,869

 

Investments in marketable securities and idle funds investments

 

(53,102

)

(7,596

)

Proceeds from marketable securities and idle funds investments

 

44,395

 

33,502

 

Net change in unrealized appreciation

 

(33,772

)

(40,467

)

Net realized (gain) loss

 

7,369

 

(5,335

)

Accretion of unearned income

 

(7,721

)

(9,263

)

Payment-in-kind interest

 

(3,517

)

(2,405

)

Cumulative dividends

 

(1,000

)

1,745

 

Share-based compensation expense

 

3,357

 

1,860

 

Amortization of deferred financing costs

 

1,167

 

802

 

Deferred taxes

 

1,515

 

5,650

 

Changes in other assets and liabilities:

 

 

 

 

 

Interest receivable and other assets

 

1,009

 

(1,160

)

Interest payable

 

(1,345

)

(2,787

)

Payable to affiliated Investment Manager

 

(3,960

)

(1,489

)

Accounts payable and other liabilities

 

1,376

 

316

 

Deferred fees and other

 

2,558

 

1,428

 

Net cash used in operating activities

 

(172,932

)

(71,146

)

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

Proceeds from credit facility

 

360,000

 

170,000

 

Repayments on credit facility

 

(326,000

)

(174,000

)

Proceeds from issuance of SBIC debentures

 

 

5,000

 

Repayments of SBIC debentures

 

(63,800

)

(16,000

)

Proceeds from public offering of 6.125% Notes

 

92,000

 

 

Repurchases of 6.125% Notes

 

(1,108

)

 

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

 

131,453

 

92,993

 

Dividends paid to stockholders

 

(59,052

)

(28,879

)

Payment of deferred loan costs and SBIC debenture fees

 

(5,317

)

(571

)

Other

 

(1,187

)

(463

)

Net cash provided by financing activities

 

126,989

 

48,080

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

(45,943

)

(23,066

)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

63,517

 

42,650

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

17,574

 

$

19,584

 

 

 

 

 

 

 

Supplemental cash flow disclosures:

 

 

 

 

 

Interest Paid

 

$

15,558

 

$

13,953

 

Taxes paid

 

$

4,803

 

$

561

 

Non-cash financing activities:

 

 

 

 

 

Shares issued pursuant to the DRIP

 

$

8,730

 

$

6,471

 

 

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, 2013

(in thousands)

(Unaudited)

 

Portfolio Company (1)

 

Business Description

 

Type of Investment (2) (3)

 

Principal (4)

 

Cost (4)

 

Fair Value

 

Control Investments (5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASC Interests, LLC

 

Recreational and Educational Shooting Facility

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

3,500

 

3,432

 

3,432

 

 

 

 

 

Member Units (Fully diluted 48.4%)

 

 

 

1,500

 

1,500

 

 

 

 

 

 

 

 

 

4,932

 

4,932

 

 

 

 

 

 

 

 

 

 

 

 

 

Bond-Coat, Inc.

 

Casing and Tubing Coating Services

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

14,750

 

14,573

 

14,750

 

 

 

 

 

Common Stock (Fully diluted 42.9%)

 

 

 

6,220

 

7,750

 

 

 

 

 

 

 

 

 

20,793

 

22,500

 

 

 

 

 

 

 

 

 

 

 

 

 

Café Brazil, LLC

 

Casual Restaurant Group

 

 

 

 

 

 

 

 

 

 

 

 

 

Member Units (Fully diluted 69.0%) (8)

 

 

 

1,742

 

6,770

 

 

 

 

 

 

 

 

 

 

 

 

 

California Healthcare Medical Billing, Inc.

 

Outsourced Billing and Revenue Cycle Management

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

8,103

 

7,958

 

8,094

 

 

 

 

 

Warrants (Fully diluted 21.3%)

 

 

 

1,193

 

3,380

 

 

 

 

 

Common Stock (Fully diluted 9.8%)

 

 

 

1,177

 

1,560

 

 

 

 

 

 

 

 

 

10,328

 

13,034

 

 

 

 

 

 

 

 

 

 

 

 

 

CBT Nuggets, LLC

 

Produces and Sells IT Training Certification Videos

 

 

 

 

 

 

 

 

 

 

 

 

 

Member Units (Fully diluted 41.6%) (8)

 

 

 

1,300

 

10,950

 

 

 

 

 

 

 

 

 

 

 

 

 

Ceres Management, LLC (Lambs Tire & Automotive)

 

Aftermarket Automotive Services Chain

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

4,000

 

4,000

 

4,000

 

 

 

 

 

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

 

 

 

3,437

 

3,437

 

 

 

 

 

Member Units (Fully diluted 100.0%)

 

 

 

5,273

 

1,000

 

 

 

 

 

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

 

1,029

 

1,029

 

1,029

 

 

 

 

 

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

 

 

 

625

 

1,130

 

 

 

 

 

 

 

 

 

14,364

 

10,596

 

 

 

 

 

 

 

 

 

 

 

 

 

Garreco, LLC

 

Manufacturer and Supplier of Dental Products

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

5,800

 

5,689

 

5,689

 

 

 

 

 

Member Units (Fully diluted 32.0%)

 

 

 

1,200

 

1,200

 

 

 

 

 

 

 

 

 

6,889

 

6,889

 

 

 

 

 

 

 

 

 

 

 

 

 

Gulf Manufacturing, LLC

 

Manufacturer of Specialty Fabricated Industrial Piping Products

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

919

 

919

 

919

 

 

 

 

 

Member Units (Fully diluted 34.2%) (8)

 

 

 

2,980

 

12,660

 

 

 

 

 

 

 

 

 

3,899

 

13,579

 

 

 

 

 

 

 

 

 

 

 

 

 

Harrison Hydra-Gen, Ltd.

 

Manufacturer of Hydraulic Generators

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

4,896

 

4,624

 

4,896

 

 

 

 

 

Preferred Stock (8% cumulative) (8)

 

 

 

1,145

 

1,145

 

 

 

 

 

Common Stock (Fully diluted 34.4%) (8)

 

 

 

718

 

1,340

 

 

 

 

 

 

 

 

 

6,487

 

7,381

 

 

5



Table of Contents

 

Portfolio Company (1)

 

Business Description

 

Type of Investment (2) (3)

 

Principal (4)

 

Cost (4)

 

Fair Value

 

Hawthorne Customs and Dispatch Services, LLC

 

Facilitator of Import Logistics, Brokerage, and Warehousing

 

 

 

 

 

 

 

 

 

 

 

 

 

Member Units (Fully diluted 47.6%) (8)

 

 

 

589

 

440

 

 

 

 

 

Member Units (Wallisville Real Estate, LLC) (Fully diluted 59.1%) (8)

 

 

 

1,215

 

1,890

 

 

 

 

 

 

 

 

 

1,804

 

2,330

 

 

 

 

 

 

 

 

 

 

 

 

 

Hydratec, Inc.

 

Designer and Installer of Micro-Irrigation Systems

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock (Fully diluted 95.9%) (8)

 

 

 

7,095

 

13,050

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact Telecom, Inc.

 

Telecommunications Services

 

 

 

 

 

 

 

 

 

 

 

 

 

LIBOR Plus 4.50%, Current Coupon 6.50%, Secured Debt (Maturity - May 31, 2018) (9)

 

2,500

 

2,493

 

2,493

 

 

 

 

 

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

 

22,500

 

14,454

 

14,454

 

 

 

 

 

Warrants (Fully diluted 40.0%)

 

 

 

8,000

 

8,000

 

 

 

 

 

 

 

 

 

24,947

 

24,947

 

 

 

 

 

 

 

 

 

 

 

 

 

Indianapolis Aviation Partners, LLC

 

Fixed Base Operator

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

3,700

 

3,609

 

3,700

 

 

 

 

 

Warrants (Fully diluted 30.1%)

 

 

 

1,129

 

1,940

 

 

 

 

 

 

 

 

 

4,738

 

5,640

 

 

 

 

 

 

 

 

 

 

 

 

 

Jensen Jewelers of Idaho, LLC

 

Retail Jewelry Store

 

 

 

 

 

 

 

 

 

 

 

 

 

Prime Plus 2%, Current Coupon 5.25%, Secured Debt (Maturity - November 14, 2013) (9)

 

1,548

 

1,548

 

1,548

 

 

 

 

 

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

 

1,607

 

1,607

 

1,607

 

 

 

 

 

Member Units (Fully diluted 60.8%) (8)

 

 

 

811

 

3,720

 

 

 

 

 

 

 

 

 

3,966

 

6,875

 

 

 

 

 

 

 

 

 

 

 

 

 

Lighting Unlimited, LLC

 

Commercial and Residential Lighting Products and Design Services

 

 

 

 

 

 

 

 

 

 

 

 

 

8% Secured Debt (Maturity - August 22, 2014)

 

1,730

 

1,730

 

1,730

 

 

 

 

 

Preferred Stock (non-voting)

 

 

 

468

 

280

 

 

 

 

 

Warrants (Fully diluted 7.1%)

 

 

 

54

 

 

 

 

 

 

Common Stock (Fully diluted 70.0%) (8)

 

 

 

100

 

 

 

 

 

 

 

 

 

 

2,352

 

2,010

 

 

 

 

 

 

 

 

 

 

 

 

 

Marine Shelters Holdings, LLC (LoneStar Marine Shelters)

 

Fabricator of Marine and Industrial Shelters

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

10,250

 

10,068

 

10,068

 

 

 

 

 

Preferred Stock (Fully diluted 26.7%)

 

 

 

3,750

 

3,750

 

 

 

 

 

 

 

 

 

13,818

 

13,818

 

 

6



Table of Contents

 

Portfolio Company (1)

 

Business Description

 

Type of Investment (2) (3)

 

Principal (4)

 

Cost (4)

 

Fair Value

 

Mid-Columbia Lumber Products, LLC

 

Manufacturer of Finger-Jointed Lumber Products

 

 

 

 

 

 

 

 

 

 

 

 

 

10% Secured Debt (Maturity - December 18, 2017)

 

1,750

 

1,750

 

1,750

 

 

 

 

 

12% Secured Debt (Maturity - December 18, 2017)

 

3,900

 

3,900

 

3,900

 

 

 

 

 

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

 

983

 

983

 

983

 

 

 

 

 

Member Units (Fully diluted 54.0%)

 

 

 

1,132

 

5,290

 

 

 

 

 

Member Units (Mid - Columbia Real Estate, LLC) (Fully diluted 50.0%) (8)

 

 

 

250

 

440

 

 

 

 

 

 

 

 

 

8,015

 

12,363

 

 

 

 

 

 

 

 

 

 

 

 

 

NAPCO Precast, LLC

 

Precast Concrete Manufacturing

 

 

 

 

 

 

 

 

 

 

 

 

 

Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - September 1, 2015) (9)

 

2,750

 

2,697

 

2,697

 

 

 

 

 

Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - February 1, 2016) (9)

 

2,923

 

2,890

 

2,890

 

 

 

 

 

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

 

4,468

 

4,413

 

4,413

 

 

 

 

 

Member Units (Fully diluted 44.0%)

 

 

 

2,975

 

5,100

 

 

 

 

 

 

 

 

 

12,975

 

15,100

 

 

 

 

 

 

 

 

 

 

 

 

 

NRI Clinical Research, LLC

 

Clinical Research Center

 

 

 

 

 

 

 

 

 

 

 

 

 

14% Secured Debt (Maturity - September 8, 2016)

 

4,520

 

4,335

 

4,335

 

 

 

 

 

Warrants (Fully diluted 12.5%) (8)

 

 

 

252

 

480

 

 

 

 

 

Member Units (Fully diluted 24.8%) (8)

 

 

 

500

 

960

 

 

 

 

 

 

 

 

 

5,087

 

5,775

 

 

 

 

 

 

 

 

 

 

 

 

 

NRP Jones, LLC

 

Manufacturer of Hoses, Fittings and Assemblies

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

12,100

 

11,334

 

12,100

 

 

 

 

 

Warrants (Fully diluted 12.2%)

 

 

 

817

 

1,420

 

 

 

 

 

Member Units (Fully diluted 43.2%) (8)

 

 

 

2,900

 

5,050

 

 

 

 

 

 

 

 

 

15,051

 

18,570

 

 

 

 

 

 

 

 

 

 

 

 

 

OMi Holdings, Inc.

 

Manufacturer of Overhead Cranes

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock (Fully diluted 48.0%)

 

 

 

1,080

 

11,270

 

 

 

 

 

 

 

 

 

 

 

 

 

Pegasus Research Group, LLC (Televerde)

 

Telemarketing and Data Services

 

 

 

 

 

 

 

 

 

 

 

 

 

15% Secured Debt (Maturity - January 6, 2016)

 

4,991

 

4,955

 

4,991

 

 

 

 

 

Member Units (Fully diluted 43.7%) (8)

 

 

 

1,250

 

4,860

 

 

 

 

 

 

 

 

 

6,205

 

9,851

 

 

 

 

 

 

 

 

 

 

 

 

 

PPL RVs, Inc.

 

Recreational Vehicle Dealer

 

 

 

 

 

 

 

 

 

 

 

 

 

11.1% Secured Debt (Maturity - June 10, 2015)

 

8,010

 

7,971

 

8,010

 

 

 

 

 

Common Stock (Fully diluted 51.1%)

 

 

 

2,150

 

6,810

 

 

 

 

 

 

 

 

 

10,121

 

14,820

 

 

 

 

 

 

 

 

 

 

 

 

 

Principle Environmental, LLC

 

Noise Abatement Services

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

3,506

 

3,027

 

3,506

 

 

 

 

 

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

 

4,351

 

4,294

 

4,338

 

 

 

 

 

Warrants (Fully diluted 14.6%)

 

 

 

1,200

 

3,860

 

 

 

 

 

Member Units (Fully diluted 22.6%) (8)

 

 

 

1,863

 

6,150

 

 

 

 

 

 

 

 

 

10,384

 

17,854

 

 

 

 

 

 

 

 

 

 

 

 

 

River Aggregates, LLC

 

Processor of Construction Aggregates

 

 

 

 

 

 

 

 

 

 

 

 

 

12% Secured Debt (Maturity - June 30, 2018) (14)

 

500

 

500

 

500

 

 

 

 

 

Zero Coupon Secured Debt (Maturity - June 30, 2018) (14)

 

750

 

413

 

413

 

 

 

 

 

Member Units (Fully diluted 38.3%)

 

 

 

1,150

 

 

 

 

 

 

Member Units (RA Properties, LLC) (Fully diluted 50.0%)

 

 

 

269

 

269

 

 

 

 

 

 

 

 

 

2,332

 

1,182

 

 

7



Table of Contents

 

Portfolio Company (1)

 

Business Description

 

Type of Investment (2) (3)

 

Principal (4)

 

Cost (4)

 

Fair Value

 

Southern RV, LLC

 

Recreational Vehicle Dealer

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

11,400

 

11,233

 

11,233

 

 

 

 

 

Member Units (Fully diluted 50.2%)

 

 

 

1,680

 

1,680

 

 

 

 

 

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

 

3,250

 

3,202

 

3,202

 

 

 

 

 

Member Units (Southern RV Real Estate, LLC) (Fully diluted 55.69%)

 

 

 

480

 

480

 

 

 

 

 

 

 

 

 

16,595

 

16,595

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

1,079

 

1,079

 

880

 

 

 

 

 

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

 

5,639

 

5,639

 

4,600

 

 

 

 

 

Warrants (Fully diluted 52.3%)

 

 

 

1,096

 

 

 

 

 

 

 

 

 

 

7,814

 

5,480

 

 

 

 

 

 

 

 

 

 

 

 

 

Thermal and Mechanical Equipment, LLC

 

Commercial and Industrial Engineering Services

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

818

 

817

 

818

 

 

 

 

 

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

 

2,607

 

2,595

 

2,607

 

 

 

 

 

Member Units (Fully diluted 52.6%) (8)

 

 

 

1,000

 

10,080

 

 

 

 

 

 

 

 

 

4,412

 

13,505

 

 

 

 

 

 

 

 

 

 

 

 

 

Travis Acquisition LLC

 

Manufacturer of Aluminum Trailers

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

9,200

 

9,018