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, 2014

 

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 x

 

Accelerated filer o

 

 

 

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 7, 2014 was 44,860,874.

 

 

 



Table of Contents

 

TABLE OF CONTENTS

 

PART I

FINANCIAL INFORMATION

 

 

 

Item 1.

Financial Statements

 

 

 

 

 

Consolidated Balance Sheets — June 30, 2014 (unaudited) and December 31, 2013

1

 

 

 

 

Consolidated Statements of Operations (unaudited) — Three and six months ended June 30, 2014 and 2013

2

 

 

 

 

Consolidated Statements of Changes in Net Assets (unaudited) — Six months ended June 30, 2014 and 2013

3

 

 

 

 

Consolidated Statements of Cash Flows (unaudited) — Six months ended June 30, 2014 and 2013

4

 

 

 

 

Consolidated Schedule of Investments (unaudited) — June 30, 2014

5

 

 

 

 

Consolidated Schedule of Investments — December 31, 2013

24

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

44

 

 

 

Item 2.

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

73

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

93

 

 

 

Item 4.

Controls and Procedures

94

 

 

 

PART II

OTHER INFORMATION

 

 

 

Item 1.

Legal Proceedings

94

 

 

 

Item 1A.

Risk Factors

94

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

94

 

 

 

Item 6.

Exhibits

94

 

 

 

 

Signatures

95

 



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

(in thousands, except shares and per share amounts)

 

 

 

June 30, 2014

 

December 31, 2013

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Portfolio investments at fair value:

 

 

 

 

 

Control investments (cost: $294,687 and $277,411 as of June 30, 2014 and December 31, 2013, respectively)

 

$

395,985

 

$

356,973

 

Affiliate investments (cost: $229,132 and $242,592 as of June 30, 2014 and December 31, 2013, respectively)

 

257,950

 

268,113

 

Non-Control/Non-Affiliate investments (cost: $763,484 and $643,068 as of June 30, 2014 and December 31, 2013, respectively)

 

780,464

 

661,102

 

 

 

 

 

 

 

Total portfolio investments (cost: $1,287,303 and $1,163,071 as of June 30, 2014 and December 31, 2013, respectively)

 

1,434,399

 

1,286,188

 

Marketable securities and idle funds investments (cost: $9,212 and $14,885 as of June 30, 2014 and December 31, 2013, respectively)

 

8,974

 

13,301

 

 

 

 

 

 

 

Total investments (cost: $1,296,515 and $1,177,956 as of June 30, 2014 and December 31, 2013, respectively)

 

1,443,373

 

1,299,489

 

 

 

 

 

 

 

Cash and cash equivalents

 

30,495

 

34,701

 

Interest receivable and other assets

 

20,665

 

16,054

 

Receivable for securities sold

 

43,983

 

 

Deferred financing costs (net of accumulated amortization of $5,497 and $4,722 as of June 30, 2014 and December 31, 2013, respectively)

 

10,235

 

9,931

 

 

 

 

 

 

 

Total assets

 

$

1,548,751

 

$

1,360,175

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

SBIC debentures (par: $225,000 as of June 30, 2014 and $200,200 as of December 31, 2013, par of $75,200 is recorded at a fair value of $64,079 and $62,050 as of June 30, 2014 and December 31, 2013, respectively)

 

$

213,879

 

$

187,050

 

Credit facility

 

253,000

 

237,000

 

6.125% Notes

 

90,882

 

90,882

 

Payable for securities purchased

 

18,711

 

27,088

 

Deferred tax liability, net

 

10,581

 

5,940

 

Dividend payable

 

7,403

 

6,577

 

Accounts payable and other liabilities

 

5,889

 

10,549

 

Interest payable

 

4,996

 

2,556

 

 

 

 

 

 

 

Total liabilities

 

605,341

 

567,642

 

 

 

 

 

 

 

Commitments and contingencies (Note M)

 

 

 

 

 

 

 

 

 

 

 

NET ASSETS

 

 

 

 

 

 

 

 

 

 

 

Common stock, $0.01 par value per share (150,000,000 shares authorized; 44,869,800 and 39,852,604 shares issued and outstanding as of June 30, 2014 and December 31, 2013, respectively)

 

449

 

398

 

Additional paid-in capital

 

842,813

 

694,981

 

Accumulated net investment income, net of cumulative dividends of $251,759 and $199,140 as of June 30, 2014 and December 31, 2013, respectively

 

14,478

 

22,778

 

Accumulated net realized gain from investments (accumulated net realized gain from investments of $12,194 before cumulative dividends of $45,021 as of June 30, 2014 and accumulated net realized gain from investments of $17,115 before cumulative dividends of $43,449 as of December 31, 2013)

 

(32,827

)

(26,334

)

Net unrealized appreciation, net of income taxes

 

118,497

 

100,710

 

 

 

 

 

 

 

Total net assets

 

943,410

 

792,533

 

 

 

 

 

 

 

Total liabilities and net assets

 

$

1,548,751

 

$

1,360,175

 

 

 

 

 

 

 

NET ASSET VALUE PER SHARE

 

$

21.03

 

$

19.89

 

 

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 June 30,

 

Six Months Ended June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

INVESTMENT INCOME:

 

 

 

 

 

 

 

 

 

Interest, fee and dividend income:

 

 

 

 

 

 

 

 

 

Control investments

 

$

10,546

 

$

8,169

 

$

19,842

 

$

14,703

 

Affiliate investments

 

6,085

 

5,399

 

11,725

 

11,060

 

Non-Control/Non-Affiliate investments

 

18,016

 

13,862

 

33,649

 

27,000

 

Interest, fee and dividend income

 

34,647

 

27,430

 

65,216

 

52,763

 

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

 

230

 

370

 

437

 

681

 

Total investment income

 

34,877

 

27,800

 

65,653

 

53,444

 

EXPENSES:

 

 

 

 

 

 

 

 

 

Interest

 

(5,473

)

(5,542

)

(10,759

)

(9,424

)

Compensation

 

(3,717

)

(2,574

)

(6,068

)

(2,574

)

General and administrative

 

(1,571

)

(1,249

)

(3,408

)

(1,937

)

Share-based compensation

 

(974

)

(602

)

(1,826

)

(1,205

)

Expenses charged to the External Investment Manager

 

436

 

 

727

 

 

Expenses reimbursed to Internal Investment Manager

 

 

 

 

(3,189

)

Total expenses

 

(11,299

)

(9,967

)

(21,334

)

(18,329

)

NET INVESTMENT INCOME

 

23,578

 

17,833

 

44,319

 

35,115

 

 

 

 

 

 

 

 

 

 

 

NET REALIZED GAIN (LOSS):

 

 

 

 

 

 

 

 

 

Affiliate investments

 

(6,578

)

 

(6,578

)

 

Non-Control/Non-Affiliate investments

 

239

 

483

 

1,672

 

140

 

Marketable securities and idle funds investments

 

(25

)

322

 

(15

)

263

 

Total net realized gain (loss)

 

(6,364

)

805

 

(4,921

)

403

 

NET REALIZED INCOME

 

17,214

 

18,638

 

39,398

 

35,518

 

 

 

 

 

 

 

 

 

 

 

NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):

 

 

 

 

 

 

 

 

 

Portfolio investments

 

17,053

 

6,337

 

23,910

 

16,415

 

Marketable securities and idle funds investments

 

298

 

(743

)

1,346

 

(810

)

SBIC debentures

 

(840

)

555

 

(2,029

)

(657

)

Total net change in unrealized appreciation

 

16,511

 

6,149

 

23,227

 

14,948

 

 

 

 

 

 

 

 

 

 

 

INCOME TAXES:

 

 

 

 

 

 

 

 

 

Federal and state income, excise, and other taxes

 

(132

)

(752

)

(799

)

(1,422

)

Deferred taxes

 

(3,643

)

(31

)

(4,641

)

(1,411

)

Income tax provision

 

(3,775

)

(783

)

(5,440

)

(2,833

)

 

 

 

 

 

 

 

 

 

 

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

 

$

29,950

 

$

24,004

 

$

57,185

 

$

47,633

 

 

 

 

 

 

 

 

 

 

 

NET INVESTMENT INCOME PER SHARE - BASIC AND DILUTED

 

$

0.53

 

$

0.51

 

$

1.05

 

$

1.01

 

NET REALIZED INCOME PER SHARE - BASIC AND DILUTED

 

$

0.39

 

$

0.54

 

$

0.94

 

$

1.02

 

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE - BASIC AND DILUTED

 

$

0.68

 

$

0.69

 

$

1.36

 

$

1.37

 

 

 

 

 

 

 

 

 

 

 

DIVIDENDS PAID PER SHARE:

 

 

 

 

 

 

 

 

 

Regular monthly dividends

 

$

0.495

 

$

0.465

 

$

0.990

 

$

0.920

 

Supplemental dividends

 

0.275

 

 

0.275

 

0.350

 

Total dividends

 

$

0.770

 

$

0.465

 

$

1.265

 

$

1.270

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED

 

44,216,906

 

34,803,729

 

42,069,669

 

34,751,905

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

Net Realized

 

Appreciation from

 

 

 

 

 

Common Stock

 

Additional

 

Net Investment

 

Gain From

 

Investments,

 

 

 

 

 

Number

 

Par

 

Paid-In

 

Income, Net

 

Investments,

 

Net of Income

 

Total Net

 

 

 

of Shares

 

Value

 

Capital

 

of Dividends

 

Net of Dividends

 

Taxes

 

Asset Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31, 2012

 

34,589,484

 

$

346

 

$

544,136

 

$

35,869

 

$

(19,155

)

$

81,780

 

$

642,976

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

 

1,205

 

 

 

 

1,205

 

Purchase of vested stock for employee payroll tax withholding

 

(19,460

)

 

(523

)

 

 

 

(523

)

Dividend reinvestment

 

173,926

 

2

 

5,580

 

 

 

 

5,582

 

Issuance of restricted stock

 

252,227

 

2

 

(2

)

 

 

 

 

Consolidation of Internal Investment Manager

 

 

 

2,037

 

 

 

 

2,037

 

Issuances of common stock

 

18,125

 

 

578

 

 

 

 

578

 

Dividends to stockholders

 

 

 

 

(44,105

)

 

 

(44,105

)

Net increase resulting from operations

 

 

 

 

35,115

 

403

 

12,115

 

47,633

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at June 30, 2013

 

35,014,302

 

$

350

 

$

553,011

 

$

26,879

 

$

(18,752

)

$

93,895

 

$

655,383

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31, 2013

 

39,852,604

 

$

398

 

$

694,981

 

$

22,778

 

$

(26,334

)

$

100,710

 

$

792,533

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Public offering of common stock, net of offering costs

 

4,600,000

 

46

 

139,651

 

 

 

 

139,697

 

Share-based compensation

 

 

 

1,826

 

 

 

 

1,826

 

Purchase of vested stock for employee payroll tax withholding

 

(36,425

)

 

(1,149

)

 

 

 

(1,149

)

Dividend reinvestment

 

225,613

 

2

 

7,347

 

 

 

 

7,349

 

Amortization of directors’ deferred compensation

 

 

 

160

 

 

 

 

160

 

Issuance of restricted stock

 

228,008

 

3

 

(3

)

 

 

 

 

Dividends to stockholders

 

 

 

 

(52,619

)

(1,572

)

 

(54,191

)

Net increase (loss) resulting from operations

 

 

 

 

44,319

 

(4,921

)

17,787

 

57,185

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at June 30, 2014

 

44,869,800

 

$

449

 

$

842,813

 

$

14,478

 

$

(32,827

)

$

118,497

 

$

943,410

 

 

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)

 

 

 

Six Months Ended June 30,

 

 

 

2014

 

2013

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

Net increase in net assets resulting from operations

 

$

57,185

 

$

47,633

 

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

 

 

 

 

 

Investments in portfolio companies

 

(396,660

)

(353,620

)

Proceeds from sales and repayments of debt investments in portfolio companies

 

226,804

 

178,750

 

Proceeds from sales of equity investments in portfolio companies

 

1,208

 

 

Investments in marketable securities and idle funds investments

 

(11,901

)

(52,503

)

Proceeds from sales and repayments of marketable securities and idle funds investments

 

14,461

 

42,469

 

Net change in unrealized appreciation

 

(23,227

)

(14,948

)

Net realized (gain) loss

 

4,921

 

(403

)

Accretion of unearned income

 

(6,020

)

(5,079

)

Payment-in-kind interest

 

(3,051

)

(2,368

)

Cumulative dividends

 

(752

)

(467

)

Share-based compensation expense

 

1,826

 

1,205

 

Amortization of deferred financing costs

 

776

 

538

 

Deferred taxes

 

4,641

 

1,411

 

Changes in other assets and liabilities:

 

 

 

 

 

Interest receivable and other assets

 

(5,122

)

2,913

 

Interest payable

 

2,440

 

2,064

 

Payable to affiliated Internal Investment Manager

 

 

(3,960

)

Accounts payable and other liabilities

 

(4,573

)

(330

)

Deferred fees and other

 

586

 

1,500

 

Net cash used in operating activities

 

(136,458

)

(155,195

)

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

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

 

139,697

 

 

Proceeds from public offering of 6.125% Notes

 

 

92,000

 

Dividends paid to stockholders

 

(46,016

)

(38,787

)

Proceeds from issuance of SBIC debentures

 

24,800

 

 

Proceeds from credit facility

 

213,000

 

250,000

 

Repayments on credit facility

 

(197,000

)

(167,000

)

Payment of deferred loan costs and SBIC debenture fees

 

(1,080

)

(3,370

)

Purchase of vested stock for employee payroll tax withholding

 

(1,149

)

(523

)

Other

 

 

578

 

Net cash provided by financing activities

 

132,252

 

132,898

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

(4,206

)

(22,297

)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

34,701

 

63,517

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

30,495

 

$

41,220

 

 

 

 

 

 

 

Supplemental cash flow disclosures:

 

 

 

 

 

Interest paid

 

$

7,545

 

$

6,827

 

Taxes paid

 

$

3,089

 

$

4,466

 

Non-cash financing activities:

 

 

 

 

 

Shares issued pursuant to the DRIP

 

$

7,349

 

$

5,580

 

 

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, 2014

(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)

 

3,275

 

3,219

 

3,219

 

 

 

 

 

Member Units (Fully diluted 48.4%) (8)

 

 

 

1,500

 

1,660

 

 

 

 

 

 

 

 

 

4,719

 

4,879

 

 

 

 

 

 

 

 

 

 

 

 

 

Bond-Coat, Inc.

 

Casing and Tubing Coating Services

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

13,570

 

13,430

 

13,570

 

 

 

 

 

Common Stock (Fully diluted 43.8%)

 

 

 

6,350

 

10,500

 

 

 

 

 

 

 

 

 

19,780

 

24,070

 

 

 

 

 

 

 

 

 

 

 

 

 

Café Brazil, LLC

 

Casual Restaurant Group

 

 

 

 

 

 

 

 

 

 

 

 

 

Member Units (Fully diluted 69.0%) (8)

 

 

 

1,742

 

6,980

 

 

 

 

 

 

 

 

 

 

 

 

 

California Healthcare Medical Billing, Inc.

 

Outsourced Billing and Revenue Cycle Management

 

 

 

 

 

 

 

 

 

 

 

 

 

9% Secured Debt (Maturity - October 17, 2016)

 

8,703

 

8,535

 

8,703

 

 

 

 

 

Warrants (Fully diluted 21.5%)

 

 

 

1,193

 

3,480

 

 

 

 

 

Common Stock (Fully diluted 9.6%)

 

 

 

1,177

 

1,460

 

 

 

 

 

 

 

 

 

10,905

 

13,643

 

 

 

 

 

 

 

 

 

 

 

 

 

CBT Nuggets, LLC

 

Produces and Sells IT Training Certification Videos

 

 

 

 

 

 

 

 

 

 

 

 

 

Member Units (Fully diluted 41.6%) (8)

 

 

 

1,300

 

20,450

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

 

 

3,808

 

3,808

 

 

 

 

 

Member Units (Fully diluted 65.0%)

 

 

 

5,273

 

1,190

 

 

 

 

 

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

 

992

 

992

 

992

 

 

 

 

 

Member Units (Lamb’s Real Estate Investment I, LLC) (Fully diluted 100.0%) (8)

 

 

 

625

 

1,110

 

 

 

 

 

 

 

 

 

14,698

 

11,100

 

 

 

 

 

 

 

 

 

 

 

 

 

Datacom, LLC

 

Technology and Telecommunications Provider

 

 

 

 

 

 

 

 

 

 

 

 

 

8% Secured Debt (Maturity - May 31, 2015)

 

360

 

356

 

356

 

 

 

 

 

10.5% Secured Debt (Maturity - May 31, 2019)

 

11,205

 

11,094

 

11,094

 

 

 

 

 

Member Units (Fully diluted 37.6%)

 

 

 

6,030

 

6,030

 

 

 

 

 

 

 

 

 

17,480

 

17,480

 

 

 

 

 

 

 

 

 

 

 

 

 

Garreco, LLC

 

Manufacturer and Supplier of Dental Products

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

5,700

 

5,605

 

5,605

 

 

 

 

 

Member Units (Fully diluted 32.0%) (8)

 

 

 

1,200

 

1,200

 

 

 

 

 

 

 

 

 

6,805

 

6,805

 

 

 

 

 

 

 

 

 

 

 

 

 

Gulf Manufacturing, LLC

 

Manufacturer of Specialty Fabricated Industrial Piping Products

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

744

 

744

 

744

 

 

 

 

 

Member Units (Fully diluted 32.1%) (8)

 

 

 

2,980

 

14,800

 

 

 

 

 

 

 

 

 

3,724

 

15,544

 

 

 

 

 

 

 

 

 

 

 

 

 

Harrison Hydra-Gen, Ltd.

 

Manufacturer of Hydraulic Generators

 

 

 

 

 

 

 

 

 

 

 

 

 

9% Secured Debt (Maturity - June 4, 2015)

 

5,487

 

5,337

 

5,487

 

 

 

 

 

Preferred Stock (8% cumulative) (8)

 

 

 

1,214

 

1,214

 

 

 

 

 

Common Stock (Fully diluted 34.4%) (8)

 

 

 

718

 

1,760

 

 

 

 

 

 

 

 

 

7,269

 

8,461

 

 

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

 

220

 

 

 

 

 

Member Units (Wallisville Real Estate, LLC) (Fully diluted 59.2%) (8)

 

 

 

1,215

 

2,050

 

 

 

 

 

 

 

 

 

1,804

 

2,270

 

 

 

 

 

 

 

 

 

 

 

 

 

Hydratec, Inc.

 

Designer and Installer of Micro-Irrigation Systems

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock (Fully diluted 95.9%) (8)

 

 

 

7,095

 

13,720

 

 

 

 

 

 

 

 

 

 

 

 

 

IDX Broker, LLC

 

Provider of Marketing and CRM Tools for the Real Estate Industry

 

 

 

 

 

 

 

 

 

 

 

 

 

12.5% Secured Debt (Maturity - November 18, 2018)

 

10,571

 

10,475

 

10,475

 

 

 

 

 

Member Units (Fully diluted 60.1%)

 

 

 

5,029

 

5,029

 

 

 

 

 

 

 

 

 

15,504

 

15,504

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact Telecom, Inc.

 

Telecommunications Services Provider

 

 

 

 

 

 

 

 

 

 

 

 

 

LIBOR Plus 6.50% (Floor 2.00%), Current Coupon 8.50%, Secured Debt (Maturity - May 31, 2018) (9)

 

1,575

 

1,569

 

1,569

 

 

 

 

 

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

 

22,500

 

15,207

 

15,207

 

 

 

 

 

Warrants (Fully diluted 40.0%)

 

 

 

8,000

 

7,440

 

 

 

 

 

 

 

 

 

24,776

 

24,216

 

 

 

 

 

 

 

 

 

 

 

 

 

Indianapolis Aviation Partners, LLC

 

Fixed Base Operator

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

3,250

 

3,228

 

3,250

 

 

 

 

 

Warrants (Fully diluted 30.1%)

 

 

 

1,129

 

2,541

 

 

 

 

 

 

 

 

 

4,357

 

5,791

 

 

 

 

 

 

 

 

 

 

 

 

 

Jensen Jewelers of Idaho, LLC

 

Retail Jewelry Store

 

 

 

 

 

 

 

 

 

 

 

 

 

Prime Plus 6.75% (Floor 3.25%), Current Coupon 10.00%, Secured Debt (Maturity - November 14, 2016) (9)

 

3,955

 

3,906

 

3,955

 

 

 

 

 

Member Units (Fully diluted 60.8%) (8)

 

 

 

811

 

3,440

 

 

 

 

 

 

 

 

 

4,717

 

7,395

 

 

 

 

 

 

 

 

 

 

 

 

 

Lighting Unlimited, LLC

 

Commercial and Residential Lighting Products and Design Services

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

1,568

 

1,568

 

1,568

 

 

 

 

 

Preferred Stock (non-voting)

 

 

 

442

 

442

 

 

 

 

 

Warrants (Fully diluted 7.1%)

 

 

 

54

 

40

 

 

 

 

 

Common Stock (Fully diluted 70.0%) (8)

 

 

 

100

 

360

 

 

 

 

 

 

 

 

 

2,164

 

2,410

 

 

 

 

 

 

 

 

 

 

 

 

 

Marine Shelters Holdings, LLC (LoneStar Marine Shelters)

 

Fabricator of Marine and Industrial Shelters

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

10,250

 

10,094

 

10,094

 

 

 

 

 

Preferred Stock (Fully diluted 26.7%)

 

 

 

3,750

 

3,750

 

 

 

 

 

 

 

 

 

13,844

 

13,844

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

949

 

949

 

949

 

 

 

 

 

Member Units (Fully diluted 56.6%) (8)

 

 

 

1,244

 

10,650

 

 

 

 

 

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

 

 

 

250

 

440

 

 

 

 

 

 

 

 

 

8,093

 

17,689

 

 

 

 

 

 

 

 

 

 

 

 

 

MSC Adviser I, LLC

 

Third Party Investment Advisory Services

 

 

 

 

 

 

 

 

 

 

 

 

 

Member Units (Fully diluted 100.0%) (8)

 

 

 

 

4,760

 

 

6



Table of Contents

 

Portfolio Company (1)

 

Business Description

 

Type of Investment (2) (3)

 

Principal (4)

 

Cost (4)

 

Fair Value

 

NAPCO Precast, LLC

 

Precast Concrete Manufacturing

 

 

 

 

 

 

 

 

 

 

 

 

 

Prime Plus 2% (Floor 7.00%), Current Coupon 9%, Secured Debt (Maturity - September 1, 2015) (9)

 

2,750

 

2,717

 

2,750

 

 

 

 

 

Prime Plus 2% (Floor 7.00%), Current Coupon 9%, Secured Debt (Maturity - February 1, 2016) (9)

 

1,438

 

1,427

 

1,433

 

 

 

 

 

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

 

4,468

 

4,429

 

4,468

 

 

 

 

 

Member Units (Fully diluted 44.0%) (8)

 

 

 

2,975

 

6,240

 

 

 

 

 

 

 

 

 

11,548

 

14,891

 

 

 

 

 

 

 

 

 

 

 

 

 

NRI Clinical Research, LLC

 

Clinical Research Service Provider

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

4,991

 

4,849

 

4,849

 

 

 

 

 

Warrants (Fully diluted 10.0%)

 

 

 

252

 

160

 

 

 

 

 

Member Units (Fully diluted 26.7%)

 

 

 

671

 

722

 

 

 

 

 

 

 

 

 

5,772

 

5,731

 

 

 

 

 

 

 

 

 

 

 

 

 

NRP Jones, LLC

 

Manufacturer of Hoses, Fittings and Assemblies

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

12,151

 

11,482

 

12,151

 

 

 

 

 

Warrants (Fully diluted 12.2%)

 

 

 

817

 

1,070

 

 

 

 

 

Member Units (Fully diluted 43.2%) (8)

 

 

 

2,900

 

3,590

 

 

 

 

 

 

 

 

 

15,199

 

16,811

 

 

 

 

 

 

 

 

 

 

 

 

 

OMi Holdings, Inc.

 

Manufacturer of Overhead Cranes

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock (Fully diluted 48.0%) (8)

 

 

 

1,080

 

13,420

 

 

 

 

 

 

 

 

 

 

 

 

 

Pegasus Research Group, LLC (Televerde)

 

Provider of Telemarketing and Data Services

 

 

 

 

 

 

 

 

 

 

 

 

 

9% Secured Debt (Maturity - January 6, 2016)

 

3,791

 

3,772

 

3,791

 

 

 

 

 

Member Units (Fully diluted 42.7%) (8)

 

 

 

1,250

 

5,020

 

 

 

 

 

 

 

 

 

5,022

 

8,811

 

 

 

 

 

 

 

 

 

 

 

 

 

PPL RVs, Inc.

 

Recreational Vehicle Dealer

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

7,860

 

7,836

 

7,860

 

 

 

 

 

Common Stock (Fully diluted 51.1%)

 

 

 

2,150

 

8,160

 

 

 

 

 

 

 

 

 

9,986

 

16,020

 

 

 

 

 

 

 

 

 

 

 

 

 

Principle Environmental, LLC

 

Noise Abatement Service Provider

 

 

 

 

 

 

 

 

 

 

 

 

 

12% Secured Debt (Maturity - April 30, 2017)

 

4,105

 

3,714

 

4,105

 

 

 

 

 

12% Current / 2% PIK Secured Debt (Maturity - April 30, 2017)

 

2,721

 

2,689

 

2,721

 

 

 

 

 

Warrants (Fully diluted 5.0%)

 

 

 

1,200

 

720

 

 

 

 

 

Preferred Equity (Fully diluted 65.6%) (8)

 

 

 

4,663

 

11,830

 

 

 

 

 

 

 

 

 

12,266

 

19,376

 

 

 

 

 

 

 

 

 

 

 

 

 

River Aggregates, LLC

 

Processor of Construction Aggregates

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

500

 

500

 

500

 

 

 

 

 

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

 

750

 

448

 

448

 

 

 

 

 

Member Units (Fully diluted 38.3%)

 

 

 

1,150

 

1,390

 

 

 

 

 

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

 

 

 

369

 

369

 

 

 

 

 

 

 

 

 

2,467

 

2,707

 

 

 

 

 

 

 

 

 

 

 

 

 

Southern RV, LLC

 

Recreational Vehicle Dealer

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

11,400

 

11,252

 

11,252

 

 

 

 

 

Member Units (Fully diluted 50.2%) (8)

 

 

 

1,680

 

3,460

 

 

 

 

 

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

 

3,250

 

3,208

 

3,208

 

 

 

 

 

Member Units (Southern RV Real Estate, LLC) (Fully diluted 55.7%)

 

 

 

480

 

470

 

 

 

 

 

 

 

 

 

16,620

 

18,390

 

 

 

 

 

 

 

 

 

 

 

 

 

The MPI Group, LLC

 

Manufacturer of Custom Hollow Metal Doors, Frames and Accessories

 

 

 

 

 

 

 

 

 

 

 

 

 

4.5% Current / 4.5% PIK Secured Debt (Maturity - July 1, 2014)

 

1,079

 

1,079

 

880

 

 

 

 

 

6% Current / 6% PIK Secured Debt (Maturity - July 1, 2014)

 

5,845

 

5,845

 

4,806

 

 

 

 

 

Warrants (Fully diluted 52.3%)

 

 

 

1,096

 

 

 

 

 

 

 

 

 

 

8,020

 

5,686

 

 

7



Table of Contents

 

Portfolio Company (1)

 

Business Description

 

Type of Investment (2) (3)

 

Principal (4)

 

Cost (4)

 

Fair Value

 

Travis Acquisition LLC

 

Manufacturer of Aluminum Trailers

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

8,970

 

8,812

 

8,970

 

 

 

 

 

Member Units (Fully diluted 65.5%)

 

 

 

7,100

 

11,410

 

 

 

 

 

 

 

 

 

15,912

 

20,380

 

 

 

 

 

 

 

 

 

 

 

 

 

Uvalco Supply, LLC

 

Farm and Ranch Supply Store

 

 

 

 

 

 

 

 

 

 

 

 

 

9% Secured Debt (Maturity - January 1, 2019)

 

1,987

 

1,987

 

1,987

 

 

 

 

 

Member Units (Fully diluted 42.8%) (8)

 

 

 

1,113

 

3,680

 

 

 

 

 

 

 

 

 

3,100

 

5,667

 

 

 

 

 

 

 

 

 

 

 

 

 

Vision Interests, Inc.

 

Manufacturer / Installer of Commercial Signage

 

 

 

 

 

 

 

 

 

 

 

 

 

13% Secured Debt (Maturity - December 23, 2016)

 

3,204

 

3,164

 

3,164

 

 

 

 

 

Series A Preferred Stock (Fully diluted 50.9%)

 

 

 

3,000

 

2,100

 

 

 

 

 

Common Stock (Fully diluted 19.1%)

 

 

 

3,706

 

 

 

 

 

 

 

 

 

 

9,870

 

5,264

 

 

 

 

 

 

 

 

 

 

 

 

 

Ziegler’s NYPD, LLC

 

Casual Restaurant Group

 

 

 

 

 

 

 

 

 

 

 

 

 

Prime Plus 2% (Floor 7.00%), Current Coupon 9%, Secured Debt (Maturity - October 1, 2018) (9)

 

1,000

 

1,000

 

1,000

 

 

 

 

 

9% Current / 9% PIK Secured Debt (Maturity - October 1, 2018)