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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| | |
(Mark One) | | |
⌧ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended | ||
OR | ||
◻ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from: to | ||
Commission File Number: 001-33723
Main Street Capital Corporation
(Exact name of registrant as specified in its charter)
| | |
Maryland (State or other jurisdiction of incorporation or organization) | 41-2230745 (I.R.S. Employer Identification No.) | |
1300 Post Oak Boulevard, 8th Floor | 77056 (Zip Code) |
(713) 350-6000
(Registrant'sRegistrant’s telephone number including area code)
n/a
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol | Name of Each Exchange on Which | ||
Common Stock, par value $0.01 per share | | MAIN | | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý⌧ No o◻
Indicate by check mark whether the registrant has submitted electronically 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, a smaller reporting company or an emerging growth company. See the definitions of "large“large accelerated filer," "accelerated” “accelerated filer," "smaller” “smaller reporting company"company” and "emerging“emerging growth company"company” in Rule 12b-2 of the Exchange Act. (Check one):
| | | | |||
Large accelerated filer | Accelerated filer | Non-accelerated filer | Smaller reporting company
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o◻
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o◻ No ý⌧
The number of shares outstanding of the issuer'sissuer’s common stock as of November 2, 2017August 5, 2021 was 58,097,927.68,611,006.
| | | ||
| PART I | | ||
| FINANCIAL INFORMATION | | ||
| ||||
| Consolidated Balance Sheets— | 1 | ||
| Consolidated Statements of Operations (unaudited)—Three and | 2 | ||
| Consolidated Statements of Changes in Net Assets (unaudited)— | 3 | ||
| Consolidated Statements of Cash Flows (unaudited)— | 4 | ||
| Consolidated Schedule of Investments (unaudited)— | 5 | ||
| Consolidated Schedule of Investments—December 31, | 29 | ||
| Notes to Consolidated Financial Statements (unaudited) | 52 | ||
|
| |||
Consolidated Schedules of Investments in and Advances to Affiliates (unaudited)— | 88 | |||
Item 2. |
| 99 | ||
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 119 | ||
Item 4. | Controls and Procedures |
119
|
| | ||
|
| | ||
119 | ||||
119 | ||||
Unregistered Sales of Equity Securities and Use of Proceeds | ||||
|
| |||
|
| |||
| 121 | |||
| 122 |
MAIN STREET CAPITAL CORPORATION
(dollars in thousands, except shares and per share amounts)
| | September 30, 2017 | December 31, 2016 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | (Unaudited) | | |||||||||||
ASSETS | |||||||||||||
Portfolio investments at fair value: | |||||||||||||
Control investments (cost: $527,609 and $439,674 as of September 30, 2017 and December 31, 2016, respectively) | $ | 715,873 | $ | 594,282 | |||||||||
Affiliate investments (cost: $376,957 and $394,699 as of September 30, 2017 and December 31, 2016, respectively) | 338,231 | 375,948 | |||||||||||
Non-Control/Non-Affiliate investments (cost: $1,144,962 and $1,037,510 as of September 30, 2017 and December 31, 2016, respectively) | 1,115,877 | 1,026,676 | |||||||||||
| | | | | | | | |||||||
Total investments (cost: $2,049,528 and $1,871,883 as of September 30, 2017 and December 31, 2016, respectively) | 2,169,981 | 1,996,906 | |||||||||||
Cash and cash equivalents | 30,144 | 24,480 | |||||||||||
Interest receivable and other assets | 39,374 | 35,133 | |||||||||||
Receivable for securities sold | 26,090 | 1,990 | |||||||||||
Deferred financing costs (net of accumulated amortization of $5,344 and $4,598 as of September 30, 2017 and December 31, 2016, respectively) | 4,093 | 4,718 | |||||||||||
Deferred tax asset, net | — | 9,125 | |||||||||||
| | | | | | | | |||||||
Total assets | $ | 2,269,682 | $ | 2,072,352 | |||||||||
| | | | | | | | | | | | | | |
| | | | | | | | June 30, | | December 31, | ||||
| | | | | | | | |
| 2021 |
| 2020 | ||
| | (Unaudited) | | | | ||||||||
ASSETS |
| |
|
| |
| |||||||
Investments at fair value: |
| |
|
| |
| |||||||
Control investments (cost: $882,469 and $831,490 as of June 30, 2021 and December 31, 2020, respectively) | | $ | 1,209,793 | | $ | 1,113,725 | |||||||
Affiliate investments (cost: $421,424 and $416,479 as of June 30, 2021 and December 31, 2020, respectively) | |
| 387,476 | |
| 366,301 | |||||||
Non‑Control/Non‑Affiliate investments (cost: $1,421,592 and $1,268,740 as of June 30, 2021 and December 31, 2020, respectively) | |
| 1,375,001 | |
| 1,204,840 | |||||||
Total investments (cost: $2,725,485 and $2,516,709 as of June 30, 2021 and December 31, 2020, respectively) | |
| 2,972,270 | |
| 2,684,866 | |||||||
Cash and cash equivalents | |
| 58,796 | |
| 31,919 | |||||||
Interest receivable and other assets | |
| 54,386 | |
| 49,761 | |||||||
Deferred financing costs (net of accumulated amortization of $8,975 and $8,477 as of June 30, 2021 and December 31, 2020, respectively) | |
| 4,703 | |
| 2,818 | |||||||
Total assets | | $ | 3,090,155 | | $ | 2,769,364 | |||||||
LIABILITIES | |
| | |
| | |||||||
Credit facility | $ | 355,000 | $ | 343,000 | | $ | 169,000 | | $ | 269,000 | |||
SBIC debentures (par: $274,800 and $240,000 as of September 30, 2017 and December 31, 2016, respectively) | 269,345 | 235,686 | |||||||||||
4.50% Notes (par: $175,000 as of both September 30, 2017 and December 31, 2016) | 173,435 | 172,893 | |||||||||||
6.125% Notes (par: $90,655 as of both September 30, 2017 and December 31, 2016) | 88,981 | 88,752 | |||||||||||
SBIC debentures (par: $322,000 and $309,800 as of June 30, 2021 and December 31, 2020, respectively) | |
| 314,828 | |
| 303,972 | |||||||
5.20% Notes due 2024 (par: $450,000 as of both June 30, 2021 and December 31, 2020) | |
| 451,544 | |
| 451,817 | |||||||
4.50% Notes due 2022 (par: $185,000 as of both June 30, 2021 and December 31, 2020) | |
| 184,140 | |
| 183,836 | |||||||
3.00% Notes due 2026 (par: $300,000 as of June 30, 2021) | |
| 295,230 | |
| — | |||||||
Accounts payable and other liabilities | 14,357 | 14,205 | |
| 21,709 | |
| 20,833 | |||||
Payable for securities purchased | 23,172 | 2,184 | |
| 11,226 | |
| — | |||||
Interest payable | 3,609 | 4,103 | |
| 11,878 | |
| 8,658 | |||||
Dividend payable | 10,935 | 10,048 | |
| 14,049 | |
| 13,889 | |||||
Deferred tax liability, net | 1,182 | — | |
| 11,710 | |
| 2,592 | |||||
| | | | | | | | |||||||
Total liabilities | 940,016 | 870,871 | |
| 1,485,314 | |
| 1,254,597 | |||||
Commitments and contingencies (Note M) | |||||||||||||
Commitments and contingencies (Note K) | |
| | |
| | |||||||
NET ASSETS | |
| | |
| | |||||||
Common stock, $0.01 par value per share (150,000,000 shares authorized; 57,680,789 and 54,312,444 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively) | 577 | 543 | |||||||||||
Additional paid-in capital | 1,272,175 | 1,143,883 | |||||||||||
Accumulated net investment income, net of cumulative dividends of $603,902 and $521,297 as of September 30, 2017 and December 31, 2016, respectively | 29,099 | 19,033 | |||||||||||
Accumulated net realized gain from investments (accumulated net realized gain from investments of $76,236 before cumulative dividends of $133,997 as of September 30, 2017 and accumulated net realized gain from investments of $48,394 before cumulative dividends of $107,281 as of December 31, 2016) | (57,761 | ) | (58,887 | ) | |||||||||
Net unrealized appreciation, net of income taxes | 85,576 | 96,909 | |||||||||||
| | | | | | | | |||||||
Common stock, $0.01 par value per share (150,000,000 shares authorized; 68,518,661 and 67,674,853 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively) | |
| 685 | |
| 677 | |||||||
Additional paid‑in capital | |
| 1,637,583 | |
| 1,615,940 | |||||||
Total undistributed (overdistributed) earnings | |
| (33,427) | |
| (101,850) | |||||||
Total net assets | 1,329,666 | 1,201,481 | |
| 1,604,841 | |
| 1,514,767 | |||||
| | | | | | | | |||||||
Total liabilities and net assets | $ | 2,269,682 | $ | 2,072,352 | | $ | 3,090,155 | | $ | 2,769,364 | |||
| | | | | | | | |||||||
| | | | | | |||||||||
| | | | | | | | |||||||
NET ASSET VALUE PER SHARE | $ | 23.02 | $ | 22.10 | | $ | 23.42 | | $ | 22.35 | |||
| | | | | | | | |||||||
| | | | | | |||||||||
| | | | | | | | |||||||
The accompanying notes are an integral part of these consolidated financial statements
1
MAIN STREET CAPITAL CORPORATION
Consolidated Statements of Operations
(dollars in thousands, except shares and per share amounts)
(Unaudited)
| | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||
| | | | | | | | | | | | | |||||||||||||
| | Three Months Ended | | Six Months Ended | |||||||||||||||||||||
|
| June 30, | | June 30, | |||||||||||||||||||||
|
| 2021 |
| 2020 |
| 2021 |
| 2020 | |||||||||||||||||
INVESTMENT INCOME: |
| |
|
| |
|
| |
|
| |
| |||||||||||||
Interest, fee and dividend income: |
| |
|
| |
|
| |
|
| |
| |||||||||||||
Control investments | $ | 15,145 | $ | 14,826 | $ | 42,720 | $ | 40,398 | | $ | 27,027 | | $ | 19,327 | | $ | 51,052 | | $ | 38,800 | |||||
Affiliate investments | 10,134 | 9,619 | 29,601 | 27,095 | |
| 11,005 | |
| 7,207 | |
| 22,511 | |
| 15,371 | |||||||||
Non-Control/Non-Affiliate investments | 26,507 | 22,149 | 77,623 | 63,841 | |||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||
Interest, fee and dividend income | 51,786 | 46,594 | 149,944 | 131,334 | |||||||||||||||||||||
Interest, fee and dividend income from marketable securities and idle funds investments | — | 5 | — | 174 | |||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||
Non‑Control/Non‑Affiliate investments | |
| 29,262 | |
| 25,473 | |
| 56,539 | |
| 53,985 | |||||||||||||
Total investment income | 51,786 | 46,599 | 149,944 | 131,508 | |
| 67,294 | |
| 52,007 | |
| 130,102 | |
| 108,156 | |||||||||
EXPENSES: | |
| | |
| | |
| | |
| | |||||||||||||
Interest | (9,420 | ) | (8,573 | ) | (26,820 | ) | (25,010 | ) | |
| (14,400) | |
| (11,898) | |
| (28,206) | |
| (24,338) | |||||
Compensation | (4,777 | ) | (4,309 | ) | (13,762 | ) | (12,081 | ) | |
| (6,895) | |
| (4,802) | |
| (13,216) | |
| (7,300) | |||||
General and administrative | (2,748 | ) | (2,247 | ) | (8,748 | ) | (6,808 | ) | |
| (3,417) | |
| (3,000) | |
| (6,392) | |
| (6,473) | |||||
Share-based compensation | (2,476 | ) | (2,137 | ) | (7,542 | ) | (5,977 | ) | |||||||||||||||||
Share‑based compensation | |
| (2,759) | |
| (2,817) | |
| (5,092) | |
| (5,654) | |||||||||||||
Expenses allocated to the External Investment Manager | 1,664 | 1,224 | 4,816 | 3,739 | |
| 2,572 | |
| 1,804 | |
| 4,952 | |
| 3,448 | |||||||||
| | | | | | | | | | | | | | |||||||||||||
Total expenses | (17,757 | ) | (16,042 | ) | (52,056 | ) | (46,137 | ) | |
| (24,899) | |
| (20,713) | |
| (47,954) | |
| (40,317) | |||||
| | | | | | | | | | | | | | |||||||||||||
NET INVESTMENT INCOME | 34,029 | 30,557 | 97,888 | 85,371 | |
| 42,395 | |
| 31,294 | |
| 82,148 | |
| 67,839 | |||||||||
NET REALIZED GAIN (LOSS): | |
| | |
| | |
| | |
| | |||||||||||||
Control investments | (2,848 | ) | 17,862 | 259 | 32,220 | |
| (2,320) | |
| 1,606 | |
| (13,245) | |
| (19,866) | ||||||||
Affiliate investments | (9,896 | ) | (3,447 | ) | 12,920 | 25,260 | |
| 13,913 | |
| — | |
| 9,110 | |
| (235) | |||||||
Non-Control/Non-Affiliate investments | 2,038 | (10,033 | ) | 14,663 | (22,452 | ) | |||||||||||||||||||
Marketable securities and idle funds investments | — | (96 | ) | — | (1,681 | ) | |||||||||||||||||||
Non‑Control/Non‑Affiliate investments | |
| 6,407 | |
| (10,190) | |
| 6,405 | |
| (10,348) | |||||||||||||
Realized loss on extinguishment of debt | |
| — | |
| — | |
| — | |
| (534) | |||||||||||||
Total net realized gain (loss) | |
| 18,000 | |
| (8,584) | |
| 2,270 | |
| (30,983) | |||||||||||||
NET UNREALIZED APPRECIATION (DEPRECIATION): | |
| | |
| | |
| | |
| | |||||||||||||
Control investments | |
| 30,824 | |
| (6,825) | |
| 45,084 | |
| (42,235) | |||||||||||||
Affiliate investments | |
| 9,816 | |
| (8,123) | |
| 16,232 | |
| (29,289) | |||||||||||||
Non‑Control/Non‑Affiliate investments | |
| 3,801 | |
| 28,112 | |
| 17,124 | |
| (109,620) | |||||||||||||
SBIC debentures | — | — | (5,217 | ) | — | |
| — | |
| — | |
| — | |
| 460 | ||||||||
| | | | | | | | | | | | | | |||||||||||||
Total net realized gain (loss) | (10,706 | ) | 4,286 | 22,625 | 33,347 | ||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION): | |||||||||||||||||||||||||
Portfolio investments | 16,368 | 8,376 | (4,358 | ) | (29,738 | ) | |||||||||||||||||||
Marketable securities and idle funds investments | — | 235 | — | 1,729 | |||||||||||||||||||||
SBIC debentures | (221 | ) | (801 | ) | 5,408 | (820 | ) | ||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||
Total net change in unrealized appreciation (depreciation) | 16,147 | 7,810 | 1,050 | (28,829 | ) | ||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||
Total net unrealized appreciation (depreciation) | |
| 44,441 | |
| 13,164 | |
| 78,440 | |
| (180,684) | |||||||||||||
INCOME TAXES: | |
| | |
| | |
| | |
| | |||||||||||||
Federal and state income, excise and other taxes | (799 | ) | (904 | ) | (2,489 | ) | (2,372 | ) | |
| (656) | |
| (550) | |
| (1,289) | |
| (255) | |||||
Deferred taxes | (3,772 | ) | 1,432 | (9,894 | ) | 3,390 | |
| (9,070) | |
| 8,045 | |
| (9,118) | ��� |
| 16,015 | |||||||
| | | | | | | | | | | | | | |||||||||||||
Income tax benefit (provision) | (4,571 | ) | 528 | (12,383 | ) | 1,018 | |
| (9,726) | |
| 7,495 | |
| (10,407) | |
| 15,760 | |||||||
| | | | | | | | | | | | | | |||||||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 34,899 | $ | 43,181 | $ | 109,180 | $ | 90,907 | |||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||
| | | | | | | | | | |||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 95,110 | | $ | 43,369 | | $ | 152,451 | | $ | (128,068) | |||||||||||||
NET INVESTMENT INCOME PER SHARE—BASIC AND DILUTED | $ | 0.60 | $ | 0.58 | $ | 1.74 | $ | 1.66 | | $ | 0.62 | | $ | 0.48 | | $ | 1.20 | | $ | 1.04 | |||||
| | | | | | | | | | | | | | |||||||||||||
| | | | | | | | | | |||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE—BASIC AND DILUTED | $ | 0.61 | $ | 0.82 | $ | 1.94 | $ | 1.76 | |||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||
| | | | | | | | | | |||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||
DIVIDENDS PAID PER SHARE: | |||||||||||||||||||||||||
Regular monthly dividends | $ | 0.555 | $ | 0.540 | $ | 1.665 | $ | 1.620 | |||||||||||||||||
Supplemental dividends | — | — | 0.275 | 0.275 | |||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||
Total dividends | $ | 0.555 | $ | 0.540 | $ | 1.940 | $ | 1.895 | |||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||
| | | | | | | | | | |||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS PER | | $ | 1.39 | | $ | 0.66 | | $ | 2.23 | | $ | (1.97) | |||||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING—BASIC AND DILUTED | 57,109,104 | 52,613,277 | 56,140,953 | 51,538,745 | |
| 68,514,683 | |
| 65,303,580 | |
| 68,321,701 | |
| 64,920,025 | |||||||||
The accompanying notes are an integral part of these consolidated financial statements
2
MAIN STREET CAPITAL CORPORATION
Consolidated Statements of Changes in Net Assets
(dollars in thousands, except shares)
(Unaudited)
| | Common Stock | | | Accumulated Net Realized Gain From Investments, Net of Dividends | Net Unrealized Appreciation from Investments, Net of Income Taxes | | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Accumulated Net Investment Income, Net of Dividends | | |||||||||||||||||||||||||||||||||
| | Number of Shares | Par Value | Additional Paid-In Capital | Net Unrealized Appreciation from Investments, Net of Income Taxes | ||||||||||||||||||||||||||||||||
Balances at December 31, 2015 | 50,413,744 | $ | 504 | $ | 1,011,467 | $ | 7,181 | $ | (49,653 | ) | $ | 101,395 | ||||||||||||||||||||||||
Public offering of common stock, net of offering costs | 1,996,793 | 20 | 64,239 | — | — | — | ||||||||||||||||||||||||||||||
Share-based compensation | — | — | 5,977 | — | — | — | 5,977 | |||||||||||||||||||||||||||||
Purchase of vested stock for employee payroll tax withholding | (80,750 | ) | (1 | ) | (2,592 | ) | — | — | — | (2,593 | ) | |||||||||||||||||||||||||
Dividend reinvestment | 339,544 | 3 | 10,645 | — | — | — | 10,648 | |||||||||||||||||||||||||||||
Amortization of directors' deferred compensation | — | — | 464 | — | — | — | 464 | |||||||||||||||||||||||||||||
Issuance of restricted stock, net of forfeited shares | 262,586 | 3 | (3 | ) | — | — | — | — | ||||||||||||||||||||||||||||
Dividends to stockholders | — | — | — | (54,131 | ) | (43,881 | ) | — | (98,012 | ) | ||||||||||||||||||||||||||
Cumulative-effect to retained earnings for excess tax benefit | — | — | — | — | — | 1,806 | 1,806 | |||||||||||||||||||||||||||||
Net increase (decrease) resulting from operations | — | — | — | 85,371 | 33,347 | (27,811 | ) | 90,907 | ||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Balances at September 30, 2016 | 52,931,917 | $ | 529 | $ | 1,090,197 | $ | 38,421 | $ | (60,187 | ) | $ | 75,390 | $ | 1,144,350 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | Common Stock | | Additional | | Undistributed | | | | |||||
Balances at December 31, 2016 | 54,354,857 | $ | 543 | $ | 1,143,883 | $ | 19,033 | $ | (58,887 | ) | $ | 96,909 | $ | 1,201,481 | ||||||||||||||||||||||
| | Number of | | Par | | Paid‑In | | (Overdistributed) | | Total Net | ||||||||||||||||||||||||||
|
| Shares |
| Value |
| Capital |
| Earnings |
| Asset Value | ||||||||||||||||||||||||||
Balances at December 31, 2019 |
| 64,252,937 | | $ | 643 | | $ | 1,512,435 | | $ | 23,312 | | $ | 1,536,390 | ||||||||||||||||||||||
Public offering of common stock, net of offering costs | 3,119,581 | 31 | 118,087 | — | — | — | 118,118 |
| 91,458 | |
| 1 | |
| 3,854 | |
| — | |
| 3,855 | |||||||||||||||
Share-based compensation | — | — | 7,542 | — | — | — | 7,542 | |||||||||||||||||||||||||||||
Share‑based compensation |
| — | |
| — | |
| 2,837 | |
| — | |
| 2,837 | ||||||||||||||||||||||
Purchase of vested stock for employee payroll tax withholding | (113,371 | ) | (1 | ) | (4,350 | ) | — | — | — | (4,351 | ) | | (851) | | | — | | | (29) | | | — | | | (29) | |||||||||||
Investment through issuance of unregistered shares | 11,464 | — | 442 | — | — | — | 442 | |||||||||||||||||||||||||||||
Dividend reinvestment | 158,301 | 2 | 6,085 | — | — | — | 6,087 |
| 108,722 | |
| 1 | |
| 3,929 | |
| — | |
| 3,930 | |||||||||||||||
Amortization of directors' deferred compensation | — | — | 488 | — | — | — | 488 | |||||||||||||||||||||||||||||
Amortization of directors’ deferred compensation |
| — | |
| — | |
| 238 | |
| — | |
| 238 | ||||||||||||||||||||||
Issuance of restricted stock |
| 10,383 | |
| — | |
| — | |
| — | |
| — | ||||||||||||||||||||||
Dividends to stockholders |
| — | |
| — | |
| 93 | |
| (39,706) | |
| (39,613) | ||||||||||||||||||||||
Net decrease resulting from operations |
| — | |
| — | |
| — | |
| (171,438) | |
| (171,438) | ||||||||||||||||||||||
Balances at March 31, 2020 |
| 64,462,649 | | $ | 645 | | $ | 1,523,357 | | $ | (187,832) | | $ | 1,336,170 | ||||||||||||||||||||||
Public offering of common stock, net of offering costs |
| 824,968 | |
| 9 | |
| 26,007 | |
| — | |
| 26,016 | ||||||||||||||||||||||
Share‑based compensation |
| — | | | — | | | 2,817 | | | — | | | 2,817 | ||||||||||||||||||||||
Purchase of vested stock for employee payroll tax withholding |
| (84,094) | |
| (1) | |
| (1,730) | |
| — | |
| (1,731) | ||||||||||||||||||||||
Dividend reinvestment |
| 146,229 | |
| 1 | |
| 4,158 | |
| — | |
| 4,159 | ||||||||||||||||||||||
Amortization of directors’ deferred compensation |
| — | |
| — | |
| 224 | |
| — | |
| 224 | ||||||||||||||||||||||
Issuance of restricted stock, net of forfeited shares | 225,361 | 2 | (2 | ) | — | — | — | — |
| 414,053 | |
| 4 | |
| (4) | |
| — | |
| — | ||||||||||||||
Dividends to stockholders | — | — | — | (82,605 | ) | (26,716 | ) | — | (109,321 | ) |
| — | |
| — | |
| 99 | |
| (40,179) | |
| (40,080) | ||||||||||||
Net increase (decrease) resulting from operations | — | — | — | 92,671 | 27,842 | (11,333 | ) | 109,180 | ||||||||||||||||||||||||||||
Net increase resulting from operations |
| — | |
| — | |
| — | |
| 43,369 | |
| 43,369 | ||||||||||||||||||||||
Balances at June 30, 2020 |
| 65,763,805 | | $ | 658 | | $ | 1,554,928 | | $ | (184,642) | | $ | 1,370,944 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balances at September 30, 2017 | 57,756,193 | $ | 577 | $ | 1,272,175 | $ | 29,099 | $ | (57,761 | ) | $ | 85,576 | $ | 1,329,666 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
| | | | | | | | | | | | | | | | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Balances at December 31, 2020 |
| 67,762,032 | | $ | 677 | | $ | 1,615,940 | | $ | (101,850) | | $ | 1,514,767 | ||||||||||||||||||||||
Public offering of common stock, net of offering costs | | 117,388 | |
| 2 | |
| 3,626 | |
| — | |
| 3,628 | ||||||||||||||||||||||
Share‑based compensation | | — | |
| — | |
| 2,333 | |
| — | |
| 2,333 | ||||||||||||||||||||||
Purchase of vested stock for employee payroll tax withholding | | (180) | |
| — | |
| (7) | |
| — | |
| (7) | ||||||||||||||||||||||
Dividend reinvestment | | 106,651 | |
| 1 | |
| 3,698 | |
| — | |
| 3,699 | ||||||||||||||||||||||
Amortization of directors’ deferred compensation | | — | |
| — | |
| 195 | |
| — | |
| 195 | ||||||||||||||||||||||
Issuance of restricted stock | | 15,007 | |
| — | |
| — | |
| — | |
| — | ||||||||||||||||||||||
Dividends to stockholders | | — | |
| — | |
| 96 | |
| (41,893) | |
| (41,797) | ||||||||||||||||||||||
Net increase resulting from operations | | — | |
| — | |
| - | |
| 57,346 | |
| 57,346 | ||||||||||||||||||||||
Balances at March 31, 2021 | | 68,000,898 | | $ | 680 | | $ | 1,625,881 | | $ | (86,397) | | $ | 1,540,164 | ||||||||||||||||||||||
Public offering of common stock, net of offering costs | | 231,795 | |
| 2 | |
| 9,396 | |
| — | |
| 9,398 | ||||||||||||||||||||||
Share‑based compensation | | — | |
| — | |
| 2,759 | |
| — | |
| 2,759 | ||||||||||||||||||||||
Purchase of vested stock for employee payroll tax withholding | | (114,357) | |
| (1) | |
| (4,464) | |
| — | |
| (4,465) | ||||||||||||||||||||||
Dividend reinvestment | | 91,632 | |
| 1 | |
| 3,755 | |
| — | |
| 3,756 | ||||||||||||||||||||||
Amortization of directors’ deferred compensation | | — | |
| — | |
| 163 | |
| — | |
| 163 | ||||||||||||||||||||||
Issuance of restricted stock, net of forfeited shares | | 321,821 | |
| 3 | |
| (3) | |
| — | |
| — | ||||||||||||||||||||||
Dividends to stockholders | | — | |
| — | |
| 96 | |
| (42,140) | |
| (42,044) | ||||||||||||||||||||||
Net increase resulting from operations | | — | |
| — | |
| — | |
| 95,110 | |
| 95,110 | ||||||||||||||||||||||
Balances at June 30, 2021 | | 68,531,789 | | $ | 685 | | $ | 1,637,583 | | $ | (33,427) | | $ | 1,604,841 | ||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements
3
MAIN STREET CAPITAL CORPORATION
Consolidated Statements of Cash Flows
(dollars in thousands)
(Unaudited)
| | Nine Months Ended September 30, | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | 2017 | 2016 | |||||||||||
| | | | | | | |||||||
| | Six Months Ended | |||||||||||
|
| June 30, | |||||||||||
| | 2021 |
| 2020 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | | |||||||
Net increase in net assets resulting from operations | $ | 109,180 | $ | 90,907 | |||||||||
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities: | |||||||||||||
Net increase (decrease) in net assets resulting from operations | | $ | 152,451 | | $ | (128,068) | |||||||
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: | | | | | | | |||||||
Investments in portfolio companies | (743,695 | ) | (420,036 | ) | | | (520,706) | | | (264,289) | |||
Proceeds from sales and repayments of debt investments in portfolio companies | 527,562 | 274,907 | | | 279,303 | | | 220,339 | |||||
Proceeds from sales and return of capital of equity investments in portfolio companies | 80,078 | 73,017 | | | 55,915 | | | 15,341 | |||||
Investments in marketable securities and idle funds investments | — | (523 | ) | ||||||||||
Proceeds from sales and repayments of marketable securities and idle funds investments | — | 4,316 | |||||||||||
Net change in net unrealized (appreciation) depreciation | (1,050 | ) | 28,829 | ||||||||||
Net realized gain | (22,625 | ) | (33,347 | ) | |||||||||
Net unrealized (appreciation) depreciation | | | (78,440) | | | 180,684 | |||||||
Net realized (gain) loss | | | (2,270) | | | 30,983 | |||||||
Accretion of unearned income | (12,403 | ) | (7,073 | ) | | | (6,391) | | | (5,959) | |||
Payment-in-kind interest | (4,122 | ) | (4,911 | ) | | | (4,672) | | | (1,883) | |||
Cumulative dividends | (2,711 | ) | (1,470 | ) | | | (858) | | | (1,022) | |||
Share-based compensation expense | 7,542 | 5,977 | | | 5,092 | | | 5,654 | |||||
Amortization of deferred financing costs | 2,022 | 1,931 | | | 1,494 | | | 1,353 | |||||
Deferred tax (benefit) provision | 9,894 | (3,390 | ) | | | 9,118 | | | (16,015) | ||||
Changes in other assets and liabilities: | | | | | | | |||||||
Interest receivable and other assets | (2,848 | ) | (685 | ) | | | (5,047) | | | 7,626 | |||
Interest payable | (494 | ) | (398 | ) | | | 3,220 | | | 202 | |||
Accounts payable and other liabilities | 640 | (247 | ) | | | 1,234 | | | (7,032) | ||||
Deferred fees and other | 2,050 | 1,644 | | | 2,363 | | | 1,791 | |||||
Net cash provided by (used in) operating activities | | | (108,194) | | | 39,705 | |||||||
| | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities | (50,980 | ) | 9,448 | ||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | |||||||
Proceeds from public offering of common stock, net of offering costs | 118,118 | 64,259 | | | 13,026 | | | 29,871 | |||||
Proceeds from public offering of 3.00% Notes due 2026 | | | 300,000 | | | - | |||||||
Dividends paid | (102,347 | ) | (86,655 | ) | | | (76,221) | | | (71,305) | |||
Proceeds from issuance of SBIC debentures | 60,000 | 6,000 | | | 52,200 | | | 25,000 | |||||
Repayments of SBIC debentures | (25,200 | ) | — | | | (40,000) | | | (22,000) | ||||
Proceeds from credit facility | 394,000 | 254,000 | | | 446,000 | | | 184,000 | |||||
Repayments on credit facility | (382,000 | ) | (232,000 | ) | | | (546,000) | | | (169,000) | |||
Payment of deferred loan costs and SBIC debenture fees | (1,576 | ) | (925 | ) | |||||||||
Debt issuance costs, net | | | (9,462) | | | (1,218) | |||||||
Purchases of vested stock for employee payroll tax withholding | (4,351 | ) | (2,593 | ) | | | (4,472) | | | (1,760) | |||
Other | — | (83 | ) | ||||||||||
| | | | | | | | |||||||
Net cash provided by financing activities | 56,644 | 2,003 | |||||||||||
Net cash provided by (used in) financing activities | | | 135,071 | | | (26,412) | |||||||
| | | | | | | | | | | | | | |
Net increase in cash and cash equivalents | 5,664 | 11,451 | | | 26,877 | | | 13,293 | |||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 24,480 | 20,331 | | | 31,919 | | | 55,246 | |||||
| | | | | | | | |||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 30,144 | $ | 31,782 | | $ | 58,796 | | $ | 68,539 | |||
| | | | | | | | |||||||
| | | | | | |||||||||
| | | | | | | | | | | | | | |
Supplemental cash flow disclosures: | | | | | | | |||||||
Interest paid | $ | 25,200 | $ | 23,368 | | $ | 23,427 | | $ | 22,722 | |||
Taxes paid | $ | 3,162 | $ | 1,762 | | $ | 1,609 | | $ | 1,783 | |||
Non-cash financing activities: | | | | | | | |||||||
Shares issued pursuant to the DRIP | $ | 6,087 | $ | 10,648 | | $ | 7,455 | | $ | 8,089 | |||
The accompanying notes are an integral part of these consolidated financial statements
4
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of InvestmentsSeptember
June 30, 2017
2021
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Control Investments(5) |
|
| ||||||||||||
Access Media Holdings, LLC(10) | Private Cable Operator | |||||||||||||
5% Current / 5% PIK Secured Debt (Maturity—July 22, 2020)(19) | $ | 23,529 | $ | 23,529 | $ | 19,440 | ||||||||
Preferred Member Units (7,771,500 units) | 7,665 | 150 | ||||||||||||
Member Units (45 units) | 1 | — | ||||||||||||
| | | | | | | | | | | | | | | |
| 31,195 | 19,590 | |||||||||||||
ASC Interests, LLC | Recreational and Educational Shooting Facility | |||||||||||||
11% Secured Debt (Maturity—July 31, 2018) | 1,925 | 1,917 | 1,925 | |||||||||||
Member Units (1,500 units)(8) | 1,500 | 1,820 | ||||||||||||
| | | | | | | | | | | | | | | |
| 3,417 | 3,745 | |||||||||||||
Bond-Coat, Inc. | Casing and Tubing Coating Services | |||||||||||||
12% Secured Debt (Maturity—December 28, 2017) | 11,596 | 11,586 | 11,596 | |||||||||||
Common Stock (57,508 shares) | 6,350 | 8,430 | ||||||||||||
| | | | | | | | | | | | | | | |
| 17,936 | 20,026 | |||||||||||||
Café Brazil, LLC | Casual Restaurant Group | |||||||||||||
Member Units (1,233 units)(8) | 1,742 | 5,390 | ||||||||||||
CBT Nuggets, LLC | Produces and Sells IT Training Certification Videos | |||||||||||||
Member Units (416 units)(8) | 1,300 | 71,850 | ||||||||||||
Charps, LLC | Pipeline Maintenance and Construction | |||||||||||||
12% Secured Debt (Maturity—February 3, 2022) | 18,400 | 18,217 | 18,217 | |||||||||||
Preferred Member Units (1,600 units) | 400 | 400 | ||||||||||||
| | | | | | | | | | | | | | | |
| 18,617 | 18,617 | |||||||||||||
Clad-Rex Steel, LLC | Specialty Manufacturer of Vinyl-Clad Metal | |||||||||||||
LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.74%, Secured Debt (Maturity—December 20, 2021)(9) | 13,680 | 13,558 | 13,680 | |||||||||||
Member Units (717 units)(8) | 7,280 | 8,520 | ||||||||||||
10% Secured Debt (Clad-Rex Steel RE Investor, LLC) (Maturity—December 20, 2036) | 1,188 | 1,177 | 1,177 | |||||||||||
Member Units (Clad-Rex Steel RE Investor, LLC) (800 units) | 210 | 210 | ||||||||||||
| | | | | | | | | | | | | | | |
| 22,225 | 23,587 | |||||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
| | | | | | | | | | | | | | |
Control Investments (5) | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Analytical Systems Keco Holdings, LLC | | August 16, 2019 | Manufacturer of Liquid and Gas Analyzers | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 12.00% (L+10.00%, Floor 2.00%) | 8/16/2024 | $ | 5,085 | $ | 4,838 | $ | 4,838 |
| | | | Preferred Member Units | | 3,200 | | | | | | 3,200 | | 1,370 |
| | | | Preferred Member Units | | 654 | | | | | | 654.00 | | 1,640 |
| | | | Warrants | (27) | 420 | | 8/16/2029 | | | | 316 | | - |
| | | | | | | | | | | | 9,008 | | 7,848 |
ASC Interests, LLC | | August 1, 2013 | Recreational and Educational Shooting Facility | | | | | | | | | | | |
| | | | Secured Debt | | | 13.00% | 7/31/2022 | | 1,850 | | 1,825 | | 1,825 |
| | | | Member Units | | 1,500 | | | | | | 1,500 | | 1,010 |
| | | | | | | | | | | | 3,325 | | 2,835 |
ATS Workholding, LLC | (10) | March 10, 2014 | Manufacturer of Machine Cutting Tools and Accessories | | | | | | | | | | | |
| | | | Secured Debt | (14) | | 5.00% | 8/16/2023 | | 4,902 | | 4,743 | | 2,962 |
| | | | Preferred Member Units | | 3,725,862 | | | | | | 3,726 | | - |
| | | | | | | | | | | | 8,469 | | 2,962 |
Barfly Ventures, LLC | (10) | August 31, 2015 | Casual Restaurant Group | | | | | | | | | | | |
| | | | Secured Debt | | | 7.00% | 10/31/2024 | | 711 | | 711 | | 711 |
| | | | Member Units | | 37 | | | | | | 1,584 | | 1,698 |
| | | | | | | | | | | | 2,295 | | 2,409 |
Bolder Panther Group, LLC | | December 31, 2020 | Consumer Goods and Fuel Retailer | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 10.50% (L+9.00%, Floor 1.50%) | 12/31/2025 | | 27,500 | | 27,250 | | 27,250 |
| | | | Class A Preferred Member Units | (8) | | 14.00% | | | | | 10,194 | | 10,194 |
| | | | Class B Preferred Member Units | (8) | 140,000 | 8.00% | | | | | 14,000 | | 17,420 |
| | | | | | | | | | | | 51,444 | | 54,864 |
Brewer Crane Holdings, LLC | | January 9, 2018 | Provider of Crane Rental and Operating Services | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 11.00% (L+10.00%, Floor 1.00%) | 1/9/2023 | | 8,308 | | 8,275 | | 8,275 |
| | | | Preferred Member Units | (8) | 2,950 | | | | | | 4,280 | | 5,140 |
| | | | | | | | | | | | 12,555 | | 13,415 |
Bridge Capital Solutions Corporation | | April 18, 2012 | Financial Services and Cash Flow Solutions Provider | | | | | | | | | | | |
| | | | Secured Debt | | | 13.00% | 12/11/2024 | | 8,813 | | 8,752 | | 8,752 |
| | | | Warrants | (27) | 82 | | 7/25/2026 | | | | 200 | | 1,574 |
| | | | | | | | 7/25/2026 | | | | 1,932 | | 2,156 |
| | | | Secured Debt | (30) | | 13.00% | 12/11/2024 | | 1,000 | | 1,000 | | 1,000 |
| | | | Preferred Member Units | (8) (30) | 17,742 | | | | | | 1,000 | | 1,000 |
| | | | | | | | | | | | 12,884 | | 14,482 |
5
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
CMS Minerals Investments | Oil & Gas Exploration & Production | |||||||||||||
Member Units (CMS Minerals II, LLC) (100 units)(8) | 3,491 | 2,582 | ||||||||||||
Copper Trail Energy Fund I, LP(12)(13) | Investment Partnership | |||||||||||||
LP Interests (Fully diluted 30.1%) | 2,500 | 2,500 | ||||||||||||
Datacom, LLC | Technology and Telecommunications Provider | |||||||||||||
8% Secured Debt (Maturity—May 30, 2018) | 1,350 | 1,350 | 1,350 | |||||||||||
5.25% Current / 5.25% PIK Secured Debt (Maturity—May 30, 2019)(19) | 12,133 | 12,088 | 11,370 | |||||||||||
Class A Preferred Member Units | 1,181 | 1,360 | ||||||||||||
Class B Preferred Member Units (6,453 units) | 6,030 | — | ||||||||||||
| | | | | | | | | | | | | | | |
| 20,649 | 14,080 | |||||||||||||
Gamber-Johnson Holdings, LLC | Manufacturer of Ruggedized Computer Mounting Systems | |||||||||||||
LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 12.24%, Secured Debt (Maturity—June 24, 2021)(9) | 23,680 | 23,480 | 23,680 | |||||||||||
Member Units (8,619 units)(8) | 14,844 | 22,960 | ||||||||||||
| | | | | | | | | | | | | | | |
| 38,324 | 46,640 | |||||||||||||
Garreco, LLC | Manufacturer and Supplier of Dental Products | |||||||||||||
LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.30%, Secured Debt (Maturity—March 31, 2020)(9) | 5,724 | 5,678 | 5,678 | |||||||||||
Member Units (1,200 units) | 1,200 | 1,830 | ||||||||||||
| | | | | | | | | | | | | | | |
| 6,878 | 7,508 | |||||||||||||
GRT Rubber Technologies LLC | Manufacturer of Engineered Rubber Products | |||||||||||||
LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.24%, Secured Debt (Maturity—December 19, 2019)(9) | 12,030 | 11,969 | 12,030 | |||||||||||
Member Units (5,879 units)(8) | 13,065 | 20,680 | ||||||||||||
| | | | | | | | | | | | | | | |
| 25,034 | 32,710 | |||||||||||||
Gulf Manufacturing, LLC | Manufacturer of Specialty Fabricated Industrial Piping Products | |||||||||||||
Member Units (438 units)(8) | 2,980 | 10,680 | ||||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
Café Brazil, LLC | | April 20, 2004 | Casual Restaurant Group | | | | | | | | | | | |
| | | | Member Units | (8) | 1,233 | | | | | | 1,742 | | 2,490 |
| | | | | | | | | | | | | | |
California Splendor Holdings LLC | | March 30, 2018 | Processor of Frozen Fruits | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 11.00% (L+10.00%, Floor 1.00%) | 3/30/2023 | | 28,000 | | 27,817 | | 27,817 |
| | | | Preferred Member Units | (8) | 6,725 | | | | | | 8,878 | | 8,878 |
| | | | Preferred Member Units | (8) | 6,157 | | | | | | 10,775 | | 9,138 |
| | | | | | | | | | | | 47,470 | | 45,833 |
CBT Nuggets, LLC | | June 1, 2006 | Produces and Sells IT Training Certification Videos | | | | | | | | | | | |
| | | | Member Units | (8) | 416 | | | | | | 1,300 | | 52,620 |
| | | | | | | | | | | | | | |
Centre Technologies Holdings, LLC | | January 4, 2019 | Provider of IT Hardware Services and Software Solutions | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 12.00% (L+10.00%, Floor 2.00%) | 1/4/2024 | | 9,722 | | 9,665 | | 9,665 |
| | | | Preferred Member Units | | 12,696 | | | | | | 5,840 | | 5,840 |
| | | | | | | | | | | | 15,505 | | 15,505 |
Chamberlin Holding LLC | | February 26, 2018 | Roofing and Waterproofing Specialty Contractor | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.00% (L+8.00%, Floor 1.00%) | 2/26/2023 | | 13,817 | | 13,762 | | 13,817 |
| | | | Member Units | (8) | 4,347 | | | | | | 11,440 | | 26,650 |
| | | | Member Units | (8) (30) | 1,047,146 | | | | | | 1,322 | | 1,380 |
| | | | | | | | | | | | 26,524 | | 41,847 |
Charps, LLC | | February 3, 2017 | Pipeline Maintenance and Construction | | | | | | | | | | | |
| | | | Unsecured Debt | | | 10.00% | 1/31/2024 | | 5,770 | | 4,639 | | 5,091 |
| | | | Preferred Member Units | (8) | 1,600 | | | | | | 400 | | 11,580 |
| | | | | | | | | | | | 5,039 | | 16,671 |
Clad-Rex Steel, LLC | | December 20, 2016 | Specialty Manufacturer of Vinyl-Clad Metal | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 10.50% (L+9.50%, Floor 1.00%) | 1/15/2024 | | 10,480 | | 10,385 | | 10,385 |
| | | | Member Units | (8) | 717 | | | | | | 7,280 | | 9,420 |
| | | | Secured Debt | (30) | | 10.00% | 12/20/2036 | | 1,096 | | 1,086 | | 1,086 |
| | | | Member Units | (30) | 800 | | | | | | 210 | | 530 |
| | | | | | | | | | | | 18,961 | | 21,421 |
CMS Minerals Investments | | January 30, 2015 | Oil & Gas Exploration & Production | | | | | | | | | | | |
| | | | Member Units | (8) (30) | 100 | | | | | | 2,072 | | 1,970 |
| | | | | | | | | | | | | | |
6
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Gulf Publishing Holdings, LLC | Energy Industry Focused Media and Publishing | |||||||||||||
LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.74%, Secured Debt (Maturity—September 30, 2020)(9) | 80 | 80 | 80 | |||||||||||
12.5% Secured Debt (Maturity—April 29, 2021) | 12,800 | 12,697 | 12,697 | |||||||||||
Member Units (3,681 units) | 3,681 | 4,330 | ||||||||||||
| | | | | | | | | | | | | | | |
| 16,458 | 17,107 | |||||||||||||
Harborside Holdings, LLC | Real Estate Holding Company | |||||||||||||
Member units (100 units) | 6,206 | 9,400 | ||||||||||||
Harrison Hydra-Gen, Ltd. | Manufacturer of Hydraulic Generators | |||||||||||||
Common Stock (107,456 shares) | 718 | 2,800 | ||||||||||||
HW Temps LLC | Temporary Staffing Solutions | |||||||||||||
LIBOR Plus 13.00% (Floor 1.00%), Current Coupon 14.24%, Secured Debt (Maturity July 2, 2020)(9) | 9,976 | 9,913 | 9,913 | |||||||||||
Preferred Member Units (3,200 units) | 3,942 | 3,940 | ||||||||||||
| | | | | | | | | | | | | | | |
| 13,855 | 13,853 | |||||||||||||
Hydratec, Inc. | Designer and Installer of Micro-Irrigation Systems | |||||||||||||
Common Stock (7,095 shares)(8) | 7,095 | 15,480 | ||||||||||||
IDX Broker, LLC | Provider of Marketing and CRM Tools for the Real Estate Industry | |||||||||||||
11.5% Secured Debt (Maturity—November 15, 2018) | 10,050 | 10,023 | 10,050 | |||||||||||
Member Units (5,400 units)(8) | 5,606 | 9,000 | ||||||||||||
| | | | | | | | | | | | | | | |
| 15,629 | 19,050 | |||||||||||||
Jensen Jewelers of Idaho, LLC | Retail Jewelry Store | |||||||||||||
Prime Plus 6.75% (Floor 2.00%), Current Coupon 11.00%, Secured Debt (Maturity—November 14, 2019)(9) | 4,105 | 4,062 | 4,105 | |||||||||||
Member Units (627 units)(8) | 811 | 4,460 | ||||||||||||
| | | | | | | | | | | | | | | |
| 4,873 | 8,565 | |||||||||||||
KBK Industries, LLC | Manufacturer of Specialty Oilfield and Industrial Products | |||||||||||||
10% Secured Debt (Maturity—September 28, 2020) | 750 | 750 | 750 | |||||||||||
12.5% Secured Debt (Maturity—September 28, 2020) | 5,900 | 5,900 | 5,900 | |||||||||||
Member Units (325 units)(8) | 783 | 4,060 | ||||||||||||
| | | | | | | | | | | | | | | |
| 7,433 | 10,710 | |||||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
Cody Pools, Inc. | | March 6, 2020 | Designer of Residential and Commercial Pools | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 12.25% (L+10.50%, Floor 1.75%) | 3/6/2025 | | 11,847 | | 11,752 | | 11,847 |
| | | | Preferred Member Units | | 587 | | | | | | 8,317 | | 22,200 |
| | | | | | | | | | | | 20,069 | | 34,047 |
Colonial Electric Company LLC | | March 31, 2021 | Provider of Electrical Contracting Services | | | | | | | | | | | |
| | | | Secured Debt | | | 12.00% | 3/31/2026 | | 25,200 | | 24,958 | | 24,958 |
| | | | Preferred Member Units | | 17,280 | | | | | | 7,680 | | 7,680 |
| | | | | | | | | | | | 32,638 | | 32,638 |
CompareNetworks Topco, LLC | | January 29, 2019 | Internet Publishing and Web Search Portals | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 10.00% (L+9.00%, Floor 1.00%) | 1/29/2024 | | 7,254 | | 7,220 | | 7,254 |
| | | | Preferred Member Units | (8) | 1,975 | | | | | | 1,975 | | 10,030 |
| | | | | | | | | | | | 9,195 | | 17,284 |
Copper Trail Fund Investments | (12) (13) | July 17, 2017 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests (CTMH, LP) | (31) | 38.8% | | | | | | 710 | | 710 |
| | | | | | | | | | | | | | |
Datacom, LLC | | May 30, 2014 | Technology and Telecommunications Provider | | | | | | | | | | | |
| | | | Secured Debt | | | 5.00% | 12/31/2025 | | 8,946 | | 8,121 | | 8,121 |
| | | | Preferred Member Units | | 9,000 | | | | | | 2,610 | | 2,610 |
| | | | | | | | | | | | 10,731 | | 10,731 |
Digital Products Holdings LLC | | April 1, 2018 | Designer and Distributor of Consumer Electronics | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 11.00% (L+10.00%, Floor 1.00%) | 4/1/2023 | | 17,513 | | 17,439 | | 17,439 |
| | | | Preferred Member Units | (8) | 3,857 | | | | | | 9,501 | | 9,835 |
| | | | | | | | | | | | 26,940 | | 27,274 |
Direct Marketing Solutions, Inc. | | February 13, 2018 | Provider of Omni-Channel Direct Marketing Services | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 12.00% (L+11.00%, Floor 1.00%) | 2/13/2023 | | 15,090 | | 15,024 | | 15,024 |
| | | | Preferred Stock | | 8,400 | | | | | | 8,400 | | 17,820 |
| | | | | | | | | | | | 23,424 | | 32,844 |
Gamber-Johnson Holdings, LLC | | June 24, 2016 | Manufacturer of Ruggedized Computer Mounting Systems | | | | | | | | | | | |
| | | | Secured Debt | (9) (17) | | 9.00% (L+7.00%, Floor 2.00%) | 6/24/2021 | | 20,638 | | 20,638 | | 20,638 |
| | | | Member Units | (8) | 9,042 | | | | | | 17,692 | | 56,250 |
| | | | | | | | | | | | 38,330 | | 76,888 |
Garreco, LLC | | July 15, 2013 | Manufacturer and Supplier of Dental Products | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.00% (L+8.00%, Floor 1.00%, Ceiling 1.50%) | 7/31/2022 | | 4,519 | | 4,519 | | 4,519 |
| | | | Member Units | | 1,200 | | | | | | 1,200 | | 1,760 |
| | | | | | | | | | | | 5,719 | | 6,279 |
7
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Lamb Ventures, LLC | Aftermarket Automotive Services Chain | |||||||||||||
11% Secured Debt (Maturity—July 1, 2022) | 10,079 | 10,024 | 10,024 | |||||||||||
Preferred Equity (non-voting) | 400 | 400 | ||||||||||||
Member Units (742 units)(8) | 5,273 | 6,430 | ||||||||||||
9.5% Secured Debt (Lamb's Real Estate Investment I, LLC) (Maturity—March 31, 2027) | 432 | 428 | 432 | |||||||||||
Member Units (Lamb's Real Estate Investment I, LLC) (1,000 units)(8) | 625 | 520 | ||||||||||||
| | | | | | | | | | | | | | | |
| 16,750 | 17,806 | |||||||||||||
Marine Shelters Holdings, LLC | Fabricator of Marine and Industrial Shelters | |||||||||||||
12% PIK Secured Debt (Maturity—December 28, 2017)(14) | 3,131 | 3,078 | — | |||||||||||
Preferred Member Units (3,810 units) | 5,352 | — | ||||||||||||
| | | | | | | | | | | | | | | |
| 8,430 | — | |||||||||||||
Market Force Information, LLC | Provider of Customer Experience Management Services | |||||||||||||
LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.32%, Secured Debt (Maturity—July 28, 2022)(9) | 512 | 512 | 512 | |||||||||||
LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 12.32%, Secured Debt (Maturity—July 28, 2022)(9) | 23,520 | 23,293 | 23,293 | |||||||||||
Member Units (657,113 units) | 14,700 | 14,700 | ||||||||||||
| | | | | | | | | | | | | | | |
| 38,505 | 38,505 | |||||||||||||
MH Corbin Holding LLC | Manufacturer and Distributor of Traffic Safety Products | |||||||||||||
10% Secured Debt (Maturity—August 31, 2020) | 12,775 | 12,694 | 12,694 | |||||||||||
Preferred Member Units (4,000 shares) | 6,000 | 6,000 | ||||||||||||
| | | | | | | | | | | | | | | |
| 18,694 | 18,694 | |||||||||||||
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 | |||||||||||
Member Units (3,554 units) | 1,810 | 980 | ||||||||||||
9.5% Secured Debt (Mid-Columbia Real Estate, LLC) (Maturity—May 13, 2025) | 802 | 802 | 802 | |||||||||||
Member Units (Mid-Columbia Real Estate, LLC) (500 units)(8) | 790 | 1,290 | ||||||||||||
| | | | | | | | | | | | | | | |
| 9,052 | 8,722 | |||||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
GRT Rubber Technologies LLC | | December 19, 2014 | Manufacturer of Engineered Rubber Products | | | | | | | | | | | |
| | | | Secured Debt | | | 7.09% (L+7.00%) | 12/31/2023 | | 16,775 | | 16,775 | | 16,775 |
| | | | Member Units | (8) | 5,879 | | | | | | 13,065 | | 44,900 |
| | | | | | | | | | | | 29,840 | | 61,675 |
Gulf Manufacturing, LLC | | August 31, 2007 | Manufacturer of Specialty Fabricated Industrial Piping Products | | | | | | | | | | | |
| | | | Member Units | (8) | 438 | | | | | | 2,980 | | 5,300 |
| | | | | | | | | | | | | | |
Gulf Publishing Holdings, LLC | | April 29, 2016 | Energy Industry Focused Media and Publishing | | | | | | | | | | | |
| | | | Secured Debt | (9) (17) (19) | | 10.50% (5.25% Cash, 5.25% PIK) (L+9.50%, Floor 1.00%) | 9/30/2020 | | 257 | | 257 | | 257 |
| | | | Secured Debt | (17) (19) | | 12.50% (6.25% Cash, 6.25% PIK) | 4/29/2021 | | 13,565 | | 13,565 | | 10,722 |
| | | | Member Units | | 3,681 | | | | | | 3,681 | | - |
| | | | | | | | | | | | 17,503 | | 10,979 |
Harris Preston Fund Investments | (12) (13) | October 1, 2017 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests (2717 MH, L.P.) | (31) | 49.3% | | | | | | 2,646 | | 2,749 |
| | | | | | | | | | | | | | |
Harrison Hydra-Gen, Ltd. | | June 4, 2010 | Manufacturer of Hydraulic Generators | | | | | | | | | | | |
| | | | Common Stock | | 107,456 | | | | | | 718 | | 4,850 |
| | | | | | | | | | | | | | |
J&J Services, Inc. | | October 31, 2019 | Provider of Dumpster and Portable Toilet Rental Services | | | | | | | | | | | |
| | | | Secured Debt | | | 11.50% | 10/31/2024 | | 12,000 | | 11,914 | | 12,000 |
| | | | Preferred Stock | | 2,814 | | | | | | 7,085 | | 13,050 |
| | | | | | | | | | | | 18,999 | | 25,050 |
Jensen Jewelers of Idaho, LLC | | November 14, 2006 | Retail Jewelry Store | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 10.00% (Prime+6.75%, Floor 2.00%) | 11/14/2023 | | 3,000 | | 2,980 | | 3,000 |
| | | | Member Units | (8) | 627 | | | | | | 811 | | 9,610 |
| | | | | | | | | | | | 3,791 | | 12,610 |
KBK Industries, LLC | | January 23, 2006 | Manufacturer of Specialty Oilfield and Industrial Products | | | | | | | | | | | |
| | | | Member Units | (8) | 325 | | | | | | 783 | | 13,530 |
| | | | | | | | | | | | | | |
Kickhaefer Manufacturing Company, LLC | | October 31, 2018 | Precision Metal Parts Manufacturing | | | | | | | | | | | |
| | | | Secured Debt | | | 11.50% | 10/31/2023 | | 21,215 | | 21,098 | | 21,098 |
| | | | Member Units | | 581 | | | | | | 12,240 | | 12,240 |
| | | | Secured Debt | | | 9.00% | 10/31/2048 | | 3,932 | | 3,893 | | 3,893 |
| | | | Member Units | (8) (30) | 800 | | | | | | 992 | | 1,210 |
| | | | | | | | | | | | 38,223 | | 38,441 |
8
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
MSC Adviser I, LLC(16) | Third Party Investment Advisory Services | |||||||||||||||||||||||||||
Member Units (Fully diluted 100.0%)(8) | — | 39,304 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||||||||||||||||
Market Force Information, LLC | | July 28, 2017 | Provider of Customer Experience Management Services | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | (9) | | 12.00% (L+11.00%, Floor 1.00%) | 7/28/2023 | | 3,400 | | 3,400 | | 3,400 | ||||||||||||||
| | | | Secured Debt | (14) (19) | | 12.00% PIK | 7/28/2023 | | 26,079 | | 25,952 | | 13,268 | ||||||||||||||
| | | | Member Units | | 743,921 | | | | | | 16,642 | | - | ||||||||||||||
| | | | | | | | | | | | 45,994 | | 16,668 | ||||||||||||||
MH Corbin Holding LLC | | August 31, 2015 | Manufacturer and Distributor of Traffic Safety Products | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | (19) | | 13.00% (10.00% Cash, 3.00% PIK) | 3/31/2022 | | 8,410 | | 8,384 | | 7,615 | ||||||||||||||
| | | | Preferred Member Units | | 66,000 | | | | | | 4,400 | | - | ||||||||||||||
| | | | Preferred Member Units | | 4,000 | | | | | | 6,000 | | - | ||||||||||||||
| | | | | | | | | | | | 18,784 | | 7,615 | ||||||||||||||
MS Private Loan Fund I, LP | (12) (13) | January 26, 2021 | Investment Partnership | | | | | | | | | | | | ||||||||||||||
| | | | Unsecured Debt | | | 5.00% | 6/30/2022 | | 16,220 | | 16,220 | | 16,220 | ||||||||||||||
| | | | LP Interests | (31) | 12.1% | | | | | | 285 | | 285 | ||||||||||||||
| | | | | | | | | | | | 16,505 | | 16,505 | ||||||||||||||
MSC Adviser I, LLC | (16) | November 22, 2013 | Third Party Investment Advisory Services | | | | | | | | | | | | ||||||||||||||
| | | | Member Units | (8) | | | | | | | 29,500 | | 121,730 | ||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
MSC Income Fund Inc. | (12) (13) | January 28, 2021 | Business Development Company | | | | | | | | | | | | ||||||||||||||
| | | | Unsecured Debt | | | 5.00% | 1/28/2026 | | 40,000 | | 39,630 | | 39,840 | ||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
Mystic Logistics Holdings, LLC | Logistics and Distribution Services Provider for Large Volume Mailers | | August 18, 2014 | Logistics and Distribution Services Provider for Large Volume Mailers | | | | | | | | | | | | |||||||||||||
12% Secured Debt (Maturity—August 15, 2019) | 7,768 | 7,686 | 7,768 | |||||||||||||||||||||||||
Common Stock (5,873 shares) | 2,720 | 6,590 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | Secured Debt | | | 12.00% | 1/17/2022 | | 6,709 | | 6,703 | | 6,703 | ||||
| 10,406 | 14,358 | |||||||||||||||||||||||||||
| | | | Common Stock | (8) | 5,873 | | | | | | 2,720 | | 5,920 | ||||||||||||||
| | | | | | | | | | | | 9,423 | | 12,623 | ||||||||||||||
NAPCO Precast, LLC | Precast Concrete Manufacturing | | January 31, 2008 | Precast Concrete Manufacturing | | | | | | | | | | | | |||||||||||||
LIBOR Plus 8.50%, Current Coupon 9.82%, Secured Debt (Maturity—May 31, 2019) | 11,475 | 11,433 | 11,433 | |||||||||||||||||||||||||
Member Units (2,955 units)(8) | 2,975 | 10,830 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | Member Units | (8) | 2,955 | | | | | | 2,975 | | 15,570 | ||||
| 14,408 | 22,263 | |||||||||||||||||||||||||||
NRI Clinical Research, LLC | Clinical Research Service Provider | |||||||||||||||||||||||||||
LIBOR Plus 6.50% (Floor 1.50%), Current Coupon 8.00%, Secured Debt (Maturity—January 15, 2018)(9) | 400 | 400 | 400 | |||||||||||||||||||||||||
14% Secured Debt (Maturity—January 15, 2018) | 4,205 | 4,205 | 4,205 | |||||||||||||||||||||||||
Warrants (251,723 equivalent units; Expiration—September 8, 2021; Strike price—$0.01 per unit) | 252 | 500 | ||||||||||||||||||||||||||
Member Units (500,000 units) | 765 | 2,500 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | ||||
| 5,622 | 7,605 | |||||||||||||||||||||||||||
NRP Jones, LLC | Manufacturer of Hoses, Fittings and Assemblies | |||||||||||||||||||||||||||
8% Current / 4% PIK Secured Debt (Maturity—December 22, 2019)(19) | 15,037 | 15,037 | 15,037 | |||||||||||||||||||||||||
Member Units (65,208 units) | 3,717 | 1,260 | ||||||||||||||||||||||||||
Nebraska Vet AcquireCo, LLC | | December 31, 2020 | Mixed-Animal Veterinary and Animal Health Product Provider | | | | | | | | | | | | ||||||||||||||
| | | | | | | | | | | | | | | Secured Debt | | | 12.00% | 12/31/2025 | | 10,500 | | 10,404 | | 10,404 | ||||
| 18,754 | 16,297 | |||||||||||||||||||||||||||
NuStep, LLC | Designer, Manufacturer and Distributor of Fitness Equipment | |||||||||||||||||||||||||||
12% Secured Debt (Maturity—January 31, 2022) | 20,600 | 20,411 | 20,411 | |||||||||||||||||||||||||
Preferred Member Units (406 units) | 10,200 | 10,200 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | Preferred Member Units | | 6,500 | | | | | | 6,500 | | 6,500 | ||||
| 30,611 | 30,611 | |||||||||||||||||||||||||||
OMi Holdings, Inc. | Manufacturer of Overhead Cranes | |||||||||||||||||||||||||||
Common Stock (1,500 shares)(8) | 1,080 | 12,740 | ||||||||||||||||||||||||||
Pegasus Research Group, LLC | Provider of Telemarketing and Data Services | |||||||||||||||||||||||||||
Member Units (460 units)(8) | 1,290 | 9,350 | ||||||||||||||||||||||||||
| | | | | | | | | | | | 16,904 | | 16,904 | ||||||||||||||
NexRev LLC | | February 28, 2018 | Provider of Energy Efficiency Products & Services | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | | | 11.00% | 2/28/2023 | | 16,661 | | 16,597 | | 16,488 | ||||||||||||||
| | | | Preferred Member Units | (8) | 86,400,000 | | | | | | 6,880 | | 3,280 | ||||||||||||||
| | | | | | | | | | | | 23,477 | | 19,768 | ||||||||||||||
9
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | | | | ||||||||||||||
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||||||||||||||||
NRI Clinical Research, LLC | | September 8, 2011 | Clinical Research Service Provider | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | | | 9.00% | 6/8/2022 | | 4,775 | | 4,747 | | 4,775 | ||||||||||||||
| | | | Member Units | (8) | 1,454,167 | | | | | | 500 | | 7,170 | ||||||||||||||
| | | | | | | | | | | | 265 | | 864 | ||||||||||||||
| | | | Warrants | (27) | 251,723 | | 6/8/2027 | | | | 252 | | 2,030 | ||||||||||||||
| | | | | | | | | | | | 5,764 | | 14,839 | ||||||||||||||
NRP Jones, LLC | | December 22, 2011 | Manufacturer of Hoses, Fittings and Assemblies | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | | | 12.00% | 3/20/2023 | | 2,080 | | 2,080 | | 2,080 | ||||||||||||||
| | | | Member Units | (8) | 65,962 | | | | | | 114 | | 114 | ||||||||||||||
| | | | | | | | | | | | 3,603 | | 3,125 | ||||||||||||||
| | | | | | | | | | | | 5,797 | | 5,319 | ||||||||||||||
NuStep, LLC | | January 31, 2017 | Designer, Manufacturer and Distributor of Fitness Equipment | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | | | 11.00% | 1/31/2022 | | 17,240 | | 17,214 | | 17,240 | ||||||||||||||
| | | | Preferred Member Units | | 406 | | | | | | 10,200 | | 12,350 | ||||||||||||||
| | | | | | | | | | | | 27,414 | | 29,590 | ||||||||||||||
OMi Holdings, Inc. | | April 1, 2008 | Manufacturer of Overhead Cranes | | | | | | | | | | | | ||||||||||||||
| | | | Common Stock | (8) | 1,500 | | | | | | 1,080 | | 18,830 | ||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
Pearl Meyer Topco LLC | | April 27, 2020 | Provider of Executive Compensation Consulting Services | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | | | 12.00% | 4/27/2025 | | 33,674 | | 33,400 | | 33,674 | ||||||||||||||
| | | | Member Units | (8) | 13,800 | | | | | | 13,000 | | 18,490 | ||||||||||||||
| | | | | | | | | | | | 46,400 | | 52,164 | ||||||||||||||
Pegasus Research Group, LLC | | January 6, 2011 | Provider of Telemarketing and Data Services | | | | | | | | | | | | ||||||||||||||
| | | | Member Units | | 460 | | | | | | 1,290 | | 8,270 | ||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
PPL RVs, Inc. | Recreational Vehicle Dealer | | June 10, 2010 | Recreational Vehicle Dealer | | | | | | | | | | | | |||||||||||||
LIBOR Plus 7.00% (Floor 0.50%), Current Coupon 8.30%, Secured Debt (Maturity—November 15, 2021)(9) | 16,100 | 15,965 | 16,100 | |||||||||||||||||||||||||
Common Stock (1,962 shares)(8) | 2,150 | 11,780 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | Secured Debt | (9) | | 7.50% (L+7.00%, Floor 0.50%) | 11/15/2022 | | 11,655 | | 11,608 | | 11,619 | ||||
| 18,115 | 27,880 | |||||||||||||||||||||||||||
Principle Environmental, LLC | Noise Abatement Service Provider | |||||||||||||||||||||||||||
13% Secured Debt (Maturity—April 30, 2020) | 7,477 | 7,335 | 7,335 | |||||||||||||||||||||||||
Preferred Member Units (19,631 units) | 4,600 | 8,220 | ||||||||||||||||||||||||||
Warrants (1,018 equivalent units; Expiration—January 31, 2021; Strike price—$0.01 per unit) | 1,200 | 420 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | Common Stock | (8) | 2,000 | | | | | | 2,150 | | 13,130 | ||||
| 13,135 | 15,975 | |||||||||||||||||||||||||||
| | | | | | | | | | | | 13,758 | | 24,749 | ||||||||||||||
Principle Environmental, LLC | | February 1, 2011 | Noise Abatement Service Provider | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | | | 13.00% | 4/30/2023 | | 6,397 | | 6,346 | | 6,346 | ||||||||||||||
| | | | Preferred Member Units | | 19,631 | | | | | | 4,600 | | 10,140 | ||||||||||||||
| | | | Common Stock | | 1,036 | | | | | | 1,200 | | 760 | ||||||||||||||
| | | | | | | | | | | | 12,146 | | 17,246 | ||||||||||||||
Quality Lease Service, LLC | Provider of Rigsite Accommodation Unit Rentals and Related Services | | June 8, 2015 | Provider of Rigsite Accommodation Unit Rentals and Related Services | | | | | | | | | | | | |||||||||||||
Zero Coupon Secured Debt (Maturity—June 8, 2020) | 7,341 | 7,341 | 6,950 | |||||||||||||||||||||||||
Member Units (1,000 units) | 2,768 | 4,838 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | Member Units | | 1,000 | | | | | | 9,813 | | 2,899 | ||||
| 10,109 | 11,788 | |||||||||||||||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
River Aggregates, LLC | Processor of Construction Aggregates | | March 30, 2011 | Processor of Construction Aggregates | | | | | | | | | | | | |||||||||||||
Zero Coupon Secured Debt (Maturity—June 30, 2018) | 750 | 686 | 686 | |||||||||||||||||||||||||
Member Units (1,150 units)(8) | 1,150 | 4,410 | ||||||||||||||||||||||||||
Member Units (RA Properties, LLC) (1,500 units) | 369 | 2,510 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | Member Units | (30) | 1,500 | | | | | | 369 | | 3,290 | ||||
| 2,205 | 7,606 | |||||||||||||||||||||||||||
SoftTouch Medical Holdings LLC | Provider of In-Home Pediatric Durable Medical Equipment | |||||||||||||||||||||||||||
LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.24%, Secured Debt (Maturity—October 31, 2019)(9) | 7,140 | 7,107 | 7,140 | |||||||||||||||||||||||||
Member Units (4,450 units)(8) | 4,930 | 9,540 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | ||||
| 12,037 | 16,680 | |||||||||||||||||||||||||||
10
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
Tedder Industries, LLC | | August 31, 2018 | Manufacturer of Firearm Holsters and Accessories | | | | | | | | | | | |
| | | | Secured Debt | | | 12.00% | 8/31/2023 | | 15,360 | | 15,286 | | 15,286 |
| | | | Preferred Member Units | | 479 | | | | | | 8,136 | | 8,136 |
| | | | | | | | | | | | 23,422 | | 23,422 |
Trantech Radiator Topco, LLC | | May 31, 2019 | Transformer Cooling Products and Services | | | | | | | | | | | |
| | | | Secured Debt | | | 12.00% | 5/31/2024 | | 8,720 | | 8,652 | | 8,652 |
| | | | Common Stock | (8) | 615 | | | | | | 4,655 | | 5,990 |
| | | | | | | | | | | | 13,307 | | 14,642 |
UnionRock Energy Fund II, LP | (12) (13) | June 15, 2020 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests | (31) | 49.6% | | | | | | 4,048 | | 4,786 |
| | | | | | | | | | | | | | |
Vision Interests, Inc. | | June 5, 2007 | Manufacturer / Installer of Commercial Signage | | | | | | | | | | | |
| | | | Secured Debt | | | 13.00% | 9/30/2022 | | 2,028 | | 2,028 | | 2,028 |
| | | | Series A Preferred Stock | | 3,000,000 | | | | | | 3,000 | | 3,000 |
| | | | | | | | | | | | 5,028 | | 5,028 |
Ziegler’s NYPD, LLC | | October 1, 2008 | Casual Restaurant Group | | | | | | | | | | | |
| | | | Secured Debt | | | 12.00% | 10/1/2022 | | 625 | | 625 | | 625 |
| | | | Secured Debt | | | 6.50% | 10/1/2022 | | 1,000 | | 1,000 | | 1,000 |
| | | | Secured Debt | | | 14.00% | 10/1/2022 | | 2,750 | | 2,750 | | 2,750 |
| | | | Preferred Member Units | | 10,072 | | | | | | 2,834 | | 2,070 |
| | | | Warrants | (27) | 587 | | 10/1/2025 | | | | 600 | | - |
| | | | | | | | | | | | 7,809 | | 6,445 |
Subtotal Control Investments (75.4% of net assets at fair value) | | | | | | | | | | | $ | 882,469 | $ | 1,209,793 |
11
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
The MPI Group, LLC | Manufacturer of Custom Hollow Metal Doors, Frames and Accessories | |||||||||||||
9% Secured Debt (Maturity—October 2, 2018) | 2,924 | 2,923 | 2,619 | |||||||||||
Series A Preferred Units (2,500 units) | 2,500 | — | ||||||||||||
Warrants (1,424 equivalent units; Expiration—July 1, 2024; Strike price—$0.01 per unit) | 1,096 | — | ||||||||||||
Member Units (MPI Real Estate Holdings, LLC) (100 units)(8) | 2,300 | 2,390 | ||||||||||||
| | | | | | | | | | | | | | | |
| 8,819 | 5,009 | |||||||||||||
Uvalco Supply, LLC | Farm and Ranch Supply Store | |||||||||||||
9% Secured Debt (Maturity—January 1, 2019) | 474 | 474 | 474 | |||||||||||
Member Units (1,867 units)(8) | 3,579 | 4,307 | ||||||||||||
| | | | | | | | | | | | | | | |
| 4,053 | 4,781 | |||||||||||||
Vision Interests, Inc. | Manufacturer / Installer of Commercial Signage | |||||||||||||
13% Secured Debt (Maturity—December 23, 2018) | 2,814 | 2,794 | 2,794 | |||||||||||
Series A Preferred Stock (3,000,000 shares) | 3,000 | 3,000 | ||||||||||||
Common Stock (1,126,242 shares) | 3,706 | — | ||||||||||||
| | | | | | | | | | | | | | | |
| 9,500 | 5,794 | |||||||||||||
Ziegler's NYPD, LLC | Casual Restaurant Group | |||||||||||||
6.5% Secured Debt (Maturity—October 1, 2019) | 1,000 | 995 | 995 | |||||||||||
12% Secured Debt (Maturity—October 1, 2019) | 300 | 300 | 300 | |||||||||||
14% Secured Debt (Maturity—October 1, 2019) | 2,750 | 2,750 | 2,750 | |||||||||||
Warrants (587 equivalent units; Expiration—September 29, 2018; Strike price—$0.01 per unit) | 600 | 190 | ||||||||||||
Preferred Member Units (10,072 units) | 2,834 | 3,400 | ||||||||||||
| | | | | | | | | | | | | | | |
| 7,479 | 7,635 | |||||||||||||
| | | | | | | | | | | | | | | |
Subtotal Control Investments (33.0% of total investments at fair value) | $ | 527,609 | $ | 715,873 | ||||||||||
| | | | | | | | | | | | | | | |
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Affiliate Investments(6) | ||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
Affiliate Investments (6) | | | | | | | | | | | | | | | ||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
AAC Holdings, Inc. | (11) | June 30, 2017 | Substance Abuse Treatment Service Provider | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | (19) | | 18.00% (10.00% Cash, 8.00% PIK) | 6/25/2025 | $ | 9,793 | $ | 9,588 | $ | 9,499 | ||||||||||||||
| | | | Common Stock | | 593,928 | | | | | | 3,148 | | 2,079 | ||||||||||||||
| | | | Warrants | (27) | 554,353 | | 12/11/2025 | | | | - | | 1,940 | ||||||||||||||
| | | | | | | | | | | | 12,736 | | 13,518 | ||||||||||||||
AFG Capital Group, LLC | Provider of Rent-to-Own Financing Solutions and Services | | November 7, 2014 | Provider of Rent-to-Own Financing Solutions and Services | | | | | | | | | | | | |||||||||||||
Warrants (42 equivalent units; Expiration—November 7, 2024; Strike price—$0.01 per unit) | $ | 259 | $ | 750 | ||||||||||||||||||||||||
Member Units (186 units)(8) | 1,200 | 3,130 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | Secured Debt | | | 10.00% | 5/25/2022 | | 318 | | 318 | | 318 | ||||
| 1,459 | 3,880 | |||||||||||||||||||||||||||
Barfly Ventures, LLC(10) | Casual Restaurant Group | |||||||||||||||||||||||||||
12% Secured Debt (Maturity—August 31, 2020) | 8,715 | 8,568 | 8,689 | |||||||||||||||||||||||||
Options (2 equivalent units) | 397 | 780 | ||||||||||||||||||||||||||
Warrant (1 equivalent unit; Expiration—August 31, 2025; Strike price—$1.00 per unit) | 473 | 440 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | Preferred Member Units | | 186 | | | | | | 1,200 | | 6,960 | ||||
| 9,438 | 9,909 | |||||||||||||||||||||||||||
| | | | | | | | | | | | 1,518 | | 7,278 | ||||||||||||||
BBB Tank Services, LLC | Maintenance, Repair and Construction Services to the Above-Ground Storage Tank Market | | April 8, 2016 | Maintenance, Repair and Construction Services to the Above-Ground Storage Tank Market | | | | | | | | | | | | |||||||||||||
LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.74%, Secured Debt (Maturity—April 8, 2021)(9) | 800 | 797 | 797 | |||||||||||||||||||||||||
15% Secured Debt (Maturity—April 8, 2021) | 4,027 | 3,995 | 3,995 | |||||||||||||||||||||||||
Member Units (800,000 units) | 800 | 580 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | Unsecured Debt | (9) (17) | | 12.00% (L+11.00%, Floor 1.00%) | 4/8/2021 | | 4,800 | | 4,800 | | 4,749 | ||||
| 5,592 | 5,372 | |||||||||||||||||||||||||||
| | | | Preferred Stock (non-voting) | (8) (19) | | 15.00% PIK | | | | | 162 | | - | ||||||||||||||
| | | | Member Units | | 800,000 | | | | | | 800 | | - | ||||||||||||||
| | | | | | | | | | | | 5,762 | | 4,749 | ||||||||||||||
Boccella Precast Products LLC | Manufacturer of Precast Hollow Core Concrete | | June 30, 2017 | Manufacturer of Precast Hollow Core Concrete | | | | | | | | | | | | |||||||||||||
LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.30%, Secured Debt (Maturity—June 30, 2022)(9) | 16,400 | 16,223 | 16,223 | |||||||||||||||||||||||||
Member Units (2,160,000 units) | 2,160 | 2,160 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | Member Units | (8) | 2,160,000 | | | | | | 2,256 | | 4,950 | ||||
| 18,383 | 18,383 | |||||||||||||||||||||||||||
Boss Industries, LLC | Manufacturer and Distributor of Air, Power and Other Industrial Equipment | |||||||||||||||||||||||||||
Preferred Member Units (2,242 units)(8) | 2,570 | 3,730 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
Buca C, LLC | | June 30, 2015 | Casual Restaurant Group | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | (9) (17) | | 10.25% (L+9.25%, Floor 1.00%) | 6/30/2020 | | 19,491 | | 19,491 | | 14,370 | ||||||||||||||
| | | | Preferred Member Units | (19) | 6 | 6.00% PIK | | | | | 4,770 | | - | ||||||||||||||
| | | | | | | | | | | | 24,261 | | 14,370 | ||||||||||||||
CAI Software LLC | | October 10, 2014 | Provider of Specialized Enterprise Resource Planning Software | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | | | 12.50% | 12/7/2023 | | 67,721 | | 67,343 | | 67,721 | ||||||||||||||
| | | | Member Units | (8) | 77,960 | | | | | | 174 | | 12,010 | ||||||||||||||
| | | | | | | | | | | | 67,517 | | 79,731 | ||||||||||||||
Chandler Signs Holdings, LLC | (10) | January 4, 2016 | Sign Manufacturer | | | | | | | | | | | | ||||||||||||||
| | | | Class A Units | | 1,500,000 | | | | | | 1,500 | | 650 | ||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
Classic H&G Holdings, LLC | | March 12, 2020 | Provider of Engineered Packaging Solutions | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | | | 10.00% | 3/12/2025 | | 19,274 | | 19,121 | | 19,274 | ||||||||||||||
| | | | Preferred Member Units | (8) | 154 | | | | | | 5,760 | | 11,760 | ||||||||||||||
| | | | | | | | | | | | 24,881 | | 31,034 | ||||||||||||||
Congruent Credit Opportunities Funds | (12) (13) | January 24, 2012 | Investment Partnership | | | | | | | | | | | | ||||||||||||||
| | | | LP Interests (Congruent Credit Opportunities Fund | (8) (31) | 17.4% | | | | | | 11,741 | | 11,362 | ||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
12
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Bridge Capital Solutions Corporation | Financial Services and Cash Flow Solutions Provider | |||||||||||||
13% Secured Debt (Maturity—July 25, 2021) | 7,500 | 5,810 | 5,810 | |||||||||||
Warrants (63 equivalent shares; Expiration—July 25, 2026; Strike price—$0.01 per share) | 2,132 | 3,370 | ||||||||||||
13% Secured Debt (Mercury Service Group, LLC) (Maturity—July 25, 2021) | 1,000 | 992 | 1,000 | |||||||||||
Preferred Member Units (Mercury Service Group, LLC) (17,742 units)(8) | 1,000 | 1,000 | ||||||||||||
| | | | | | | | | | | | | | | |
| 9,934 | 11,180 | |||||||||||||
Buca C, LLC | Casual Restaurant Group | |||||||||||||
LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.48%, Secured Debt (Maturity—June 30, 2020)(9) | 21,204 | 21,078 | 21,078 | |||||||||||
Preferred Member Units (6 units; 6% cumulative)(8)(19) | 4,115 | 4,110 | ||||||||||||
| | | | | | | | | | | | | | | |
| 25,193 | 25,188 | |||||||||||||
CAI Software LLC | Provider of Specialized Enterprise Resource Planning Software | |||||||||||||
12% Secured Debt (Maturity—October 10, 2019) | 3,483 | 3,466 | 3,483 | |||||||||||
Member Units (65,356 units)(8) | 654 | 3,040 | ||||||||||||
| | | | | | | | | | | | | | | |
| 4,120 | 6,523 | |||||||||||||
CapFusion, LLC(13) | Non-Bank Lender to Small Businesses | |||||||||||||
13% Secured Debt (Maturity—March 25, 2021)(14) | 11,320 | 10,260 | 6,678 | |||||||||||
Warrants (1,600 equivalent units; Expiration—March 24, 2026; Strike price—$0.01 per unit) | 1,200 | — | ||||||||||||
| | | | | | | | | | | | | | | |
| 11,460 | 6,678 | |||||||||||||
Chandler Signs Holdings, LLC(10) | Sign Manufacturer | |||||||||||||
12% Secured Debt (Maturity—July 4, 2021) | 4,500 | 4,466 | 4,500 | |||||||||||
Class A Units (1,500,000 units)(8) | 1,500 | 2,650 | ||||||||||||
| | | | | | | | | | | | | | | |
| 5,966 | 7,150 | |||||||||||||
Condit Exhibits, LLC | Tradeshow Exhibits / Custom Displays Provider | |||||||||||||
Member Units (3,936 units)(8) | 100 | 1,840 | ||||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
Copper Trail Fund Investments | (12) (13) | July 17, 2017 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests (Copper Trail Energy Fund I, LP) | (8) (31) | 12.4% | | | | | | 2,161 | | 1,843 |
| | | | | | | | | | | | | | |
Dos Rios Partners | (12) (13) | April 25, 2013 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests (Dos Rios Partners, LP) | (31) | 20.2% | | | | | | 6,605 | | 7,024 |
| | | | LP Interests (Dos Rios Partners - A, LP) | (31) | 6.4% | | | | | | 2,097 | | 2,230 |
| | | | | | | | | | | | 8,702 | | 9,254 |
Dos Rios Stone Products LLC | (10) | June 27, 2016 | Limestone and Sandstone Dimension Cut Stone Mining Quarries | | | | | | | | | | | |
| | | | Class A Preferred Units | (30) | 2,000,000 | | | | | | 2,000 | | 1,019 |
| | | | | | | | | | | | | | |
East Teak Fine Hardwoods, Inc. | | April 13, 2006 | Distributor of Hardwood Products | | | | | | | | | | | |
| | | | Common Stock | | 6,250 | | | | | | 480 | | 430 |
| | | | | | | | | | | | | | |
EIG Fund Investments | (12) (13) | November 6, 2015 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests (EIG Global Private Debt Fund-A, L.P.) | (8) (31) | 11.1% | | | | | | 606 | | 485 |
| | | | | | | | | | | | | | |
Freeport Financial Funds | (12) (13) | June 13, 2013 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests (Freeport Financial SBIC Fund LP) | (31) | 9.3% | | | | | | 5,974 | | 5,650 |
| | | | LP Interests (Freeport First Lien Loan Fund III LP) | (8) (31) | 6.0% | | | | | | 8,468 | | 8,004 |
| | | | | | | | | | | | 14,442 | | 13,654 |
GFG Group, LLC. | | March 31, 2021 | Grower and Distributor of a Variety of Plants and Products to Other Wholesalers, Retailers and Garden Centers | | | | | | | | | | | |
| | | | Secured Debt | | | 12.00% | 3/31/2026 | | 12,545 | | 12,426 | | 12,426 |
| | | | Preferred Member Units | (8) | 226 | | | | | | 4,900 | | 4,900 |
| | | | | | | | | | | | 17,326 | | 17,326 |
Harris Preston Fund Investments | (12) (13) | August 9, 2017 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests (HPEP 3, L.P.) | (31) | 8.2% | | | | | | 3,445 | | 4,163 |
| | | | | | | | | | | | | | |
Hawk Ridge Systems, LLC | (13) | December 2, 2016 | Value-Added Reseller of Engineering Design and Manufacturing Solutions | | | | | | | | | | | |
| | | | Secured Debt | | | 9.50% | 12/2/2023 | | 18,400 | | 18,382 | | 18,400 |
| | | | Preferred Member Units | (8) | 226 | | | | | | 2,850 | | 10,630 |
| | | | Preferred Member Units | (30) | 226 | | | | | | 150 | | 560 |
| | | | | | | | | | | | 21,382 | | 29,590 |
13
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Congruent Credit Opportunities Funds(12)(13) | Investment Partnership | |||||||||||||
LP Interests (Congruent Credit Opportunities Fund II, LP) (Fully diluted 19.8%)(8) | 5,730 | 1,515 | ||||||||||||
LP Interests (Congruent Credit Opportunities Fund III, LP) (Fully diluted 17.4%)(8) | 17,869 | 18,714 | ||||||||||||
| | | | | | | | | | | | | | | |
| 23,599 | 20,229 | |||||||||||||
Dos Rios Partners(12)(13) | Investment Partnership | |||||||||||||
LP Interests (Dos Rios Partners, LP) (Fully diluted 20.2%) | 5,996 | 6,427 | ||||||||||||
LP Interests (Dos Rios Partners—A, LP) (Fully diluted 6.4%) | 1,904 | 1,889 | ||||||||||||
| | | | | | | | | | | | | | | |
| 7,900 | 8,316 | |||||||||||||
Dos Rios Stone Products LLC(10) | Limestone and Sandstone Dimension Cut Stone Mining Quarries | |||||||||||||
Class A Units (2,000,000 units)(8) | 2,000 | 1,870 | ||||||||||||
East Teak Fine Hardwoods, Inc. | Distributor of Hardwood Products | |||||||||||||
Common Stock (6,250 shares)(8) | 480 | 630 | ||||||||||||
East West Copolymer & Rubber, LLC | Manufacturer of Synthetic Rubbers | |||||||||||||
12% Current / 2% PIK Secured Debt (Maturity—October 17, 2019)(14)(15) | 3,734 | 3,626 | — | |||||||||||
Warrants (2,510,790 equivalent units; Expiration—October 15, 2024; Strike price—$0.01 per unit) | 50 | — | ||||||||||||
| | | | | | | | | | | | | | | |
| 3,676 | — | |||||||||||||
EIG Fund Investments(12)(13) | Investment Partnership | |||||||||||||
LP Interests (EIG Global Private Debt Fund-A, L.P.) (Fully diluted 11.1%)(8) | 295 | 247 | ||||||||||||
Freeport Financial Funds(12)(13) | Investment Partnership | |||||||||||||
LP Interests (Freeport Financial SBIC Fund LP) (Fully diluted 9.3%)(8) | 5,974 | 5,519 | ||||||||||||
LP Interests (Freeport First Lien Loan Fund III LP) (Fully diluted 6.0%)(8) | 7,559 | 7,507 | ||||||||||||
| | | | | | | | | | | | | | | |
| 13,533 | 13,026 | |||||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
Houston Plating and Coatings, LLC | | January 8, 2003 | Provider of Plating and Industrial Coating Services | | | | | | | | | | | |
| | | | Unsecured Convertible Debt | | | 8.00% | 5/1/2022 | | 3,000 | | 3,000 | | 2,900 |
| | | | Member Units | (8) | 322,297 | | | | | | 2,352 | | 3,520 |
| | | | | | | | | | | | 5,352 | | 6,420 |
I-45 SLF LLC | (12) (13) | October 20, 2015 | Investment Partnership | | | | | | | | | | | |
| | | | Member Units (Fully diluted 20.0%; 24.40% profits | (8) (31) | 20.00% Fully Diluted, 24.40% Profits Interest | | | | | | 19,000 | | 15,466 |
| | | | | | | | | | | | | | |
L.F. Manufacturing Holdings, LLC | (10) | December 23, 2013 | Manufacturer of Fiberglass Products | | | | | | | | | | | |
| | | | Preferred Member Units (non-voting) | (8) (19) | | 14.00% PIK | | | | | 100 | | 100 |
| | | | Member Units | | 2,179,001 | | | | | | 2,019 | | 1,910 |
| | | | | | | | | | | | 2,119 | | 2,010 |
OnAsset Intelligence, Inc. | | April 18, 2011 | Provider of Transportation Monitoring / Tracking Products and Services | | | | | | | | | | | |
| | | | Secured Debt | (19) | | 12.00% PIK | 12/31/2022 | | 7,748 | | 7,748 | | 7,748 |
| | | | Unsecured Debt | (19) | | 10.00% PIK | 12/31/2022 | | 67 | | 67 | | 67 |
| | | | Preferred Stock | | 912 | | | | | | 1,981 | | - |
| | | | Common Stock | | 635 | | | | | | 830 | | - |
| | | | Warrants | (27) | 4,699 | | 5/10/2023 | | | | 1,089 | | - |
| | | | | | | | | | | | 11,715 | | 7,815 |
Rocaceia, LLC (Quality Lease and Rental Holdings, LLC) | | January 8, 2013 | Provider of Rigsite Accommodation Unit Rentals and Related Services | | | | | | | | | | | |
| | | | Secured Debt | (14) (32) | | 12.00% | 1/8/2018 | | 30,369 | | 29,865 | | - |
| | | | Preferred Member Units | | 250 | | | | | | 2,500 | | - |
| | | | | | | | | | | | 32,365 | | - |
SI East, LLC | | August 31, 2018 | Rigid Industrial Packaging Manufacturing | | | | | | | | | | | |
| | | | Secured Debt | | | 8.75% | 8/31/2023 | | 29,175 | | 29,030 | | 29,173 |
| | | | Preferred Member Units | (8) | 157 | | | | | | 6,000 | | 15,030 |
| | | | | | | | | | | | 35,030 | | 44,203 |
Slick Innovations, LLC | | September 13, 2018 | Text Message Marketing Platform | | | | | | | | | | | |
| | | | Secured Debt | | | 12.00% | 9/13/2023 | | 5,400 | | 5,309 | | 5,400 |
| | | | Common Stock | | 70,000 | | | | | | 700 | | 1,510 |
| | | | Warrants | (27) | 18,084 | | 9/13/2028 | | | | 181 | | 400 |
| | | | | | | | | | | | 6,190 | | 7,310 |
Superior Rigging & Erecting Co. | | August 31, 2020 | Provider of Steel Erecting, Crane Rental & Rigging Services | | | | | | | | | | | |
| | | | Secured Debt | | | 12.00% | 8/31/2025 | | 21,500 | | 21,315 | | 21,315 |
| | | | Preferred Member Units | | 1,571 | | | | | | 4,500 | | 4,500 |
| | | | | | | | | | | | 25,815 | | 25,815 |
14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
UniTek Global Services, Inc. | (11) | April 15, 2011 | Provider of Outsourced Infrastructure Services | | | | | | | | | | | |
| | | | Secured Debt | (9) (19) | | 8.50% (6.50% cash, 2.00% PIK) (2.00% PIK, L+5.50% Floor 1.00%) | 8/20/2024 | | 2,364 | | 2,349 | | 2,147 |
| | | | Secured Debt | (19) | | 15.00% PIK | 2/20/2025 | | 1,153 | | 1,153 | | 1,508 |
| | | | Preferred Stock | (8) (19) | 1,133,102 | 20.00% PIK | | | | | 1,590 | | 2,743 |
| | | | Preferred Stock | (14) (19) | 1,521,122 | 20.00% PIK | | | | | 2,188 | | - |
| | | | Preferred Stock | (14) (19) | 2,281,682 | 19.00% PIK | | | | | 3,667 | | - |
| | | | Common Stock | | 945,507 | | | | | | - | | - |
| | | | Preferred Stock | (14) (19) | 4,336,866 | 13.50% PIK | | | | | 7,924 | | - |
| | | | | | | | | | | | 18,871 | | 6,398 |
Universal Wellhead Services Holdings, LLC | (10) | October 30, 2014 | Provider of Wellhead Equipment, Designs, and Personnel to the Oil & Gas Industry | | | | | | | | | | | |
| | | | Preferred Member Units | (19) (30) | 716,949 | 14.00% PIK | | | | | 1,032 | | - |
| | | | Member Units | (30) | 4,000,000 | | | | | | 4,000 | | - |
| | | | | | | | | | | | 5,032 | | - |
Volusion, LLC | | January 26, 2015 | Provider of Online Software-as-a-Service eCommerce Solutions | | | | | | | | | | | |
| | | | Secured Debt | (17) | | 11.50% | 1/26/2020 | | 20,234 | | 20,234 | | 20,234 |
| | | | Unsecured Convertible Debt | | | 8.00% | 11/16/2023 | | 409 | | 409 | | 409 |
| | | | Preferred Member Units | | 4,876,670 | | | | | | 14,000 | | 5,990 |
| | | | Warrants | (27) | 1,831,355 | | 1/26/2025 | | | | 2,576 | | - |
| | | | | | | | | | | | 37,219 | | 26,633 |
Subtotal Affiliate Investments (24.1% of net assets at fair value) | | | | | | | | | | | $ | 421,424 | $ | 387,476 |
15
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Gault Financial, LLC (RMB Capital, LLC) | Purchases and Manages Collection of Healthcare and other Business Receivables | |||||||||||||
10.5% Secured Debt (Maturity—January 1, 2019) | 12,592 | 12,592 | 11,642 | |||||||||||
Warrants (29,032 equivalent units; Expiration—February 9, 2022; Strike price—$0.01 per unit) | 400 | — | ||||||||||||
| | | | | | | | | | | | | | | |
| 12,992 | 11,642 | |||||||||||||
Guerdon Modular Holdings, Inc. | Multi-Family and Commercial Modular Construction Company | |||||||||||||
13% Secured Debt (Maturity—August 13, 2019) | 10,708 | 10,622 | 10,622 | |||||||||||
Preferred Stock (404,998 shares) | 1,140 | 950 | ||||||||||||
Common Stock (212,033 shares) | 2,983 | — | ||||||||||||
| | | | | | | | | | | | | | | |
| 14,745 | 11,572 | |||||||||||||
Harris Preston Fund Investments(12)(13) | Investment Partnership | |||||||||||||
LP Interests (HPEP 3, L.P.) (Fully diluted 9.9%) | 943 | 943 | ||||||||||||
LP Interests (2717 MH, L.P.) (Fully diluted 7.0%) | 400 | 400 | ||||||||||||
| | | | | | | | | | | | | | | |
| 1,343 | 1,343 | |||||||||||||
Hawk Ridge Systems, LLC(13) | Value-Added Reseller of Engineering Design and Manufacturing Solutions | |||||||||||||
10% Secured Debt (Maturity—December 2, 2021) | 9,500 | 9,417 | 9,417 | |||||||||||
Preferred Member Units (226 units)(8) | 2,850 | 3,230 | ||||||||||||
Preferred Member Units (HRS Services, ULC) (226 units)(8) | 150 | 170 | ||||||||||||
| | | | | | ��� | | | | | | | | | |
| 12,417 | 12,817 | |||||||||||||
Houston Plating and Coatings, LLC | Provider of Plating and Industrial Coating Services | |||||||||||||
8% Unsecured Convertible Debt (Maturity—May 1, 2022) | 3,000 | 3,000 | 3,080 | |||||||||||
Member Units (315,756 units) | 2,179 | 5,560 | ||||||||||||
| | | | | | | | | | | | | | | |
| 5,179 | 8,640 | |||||||||||||
I-45 SLF LLC(12)(13) | Investment Partnership | |||||||||||||
Member Units (Fully diluted 20.0%; 24.4% profits interest)(8) | 16,200 | 16,897 | ||||||||||||
L.F. Manufacturing Holdings, LLC(10) | Manufacturer of Fiberglass Products | |||||||||||||
Member Units (2,179,001 units) | 2,019 | 1,850 | ||||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Meisler Operating LLC | Provider of Short-term Trailer and Container Rental | |||||||||||||
LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.80%, Secured Debt (Maturity—June 7, 2022)(9) | 16,800 | 16,626 | 16,626 | |||||||||||
Member Units (Milton Meisler Holdings LLC) (32,000 units) | 3,200 | 3,200 | ||||||||||||
| | | | | | | | | | | | | | | |
| 19,826 | 19,826 | |||||||||||||
OnAsset Intelligence, Inc. | Provider of Transportation Monitoring / Tracking Products and Services | |||||||||||||
12% PIK Secured Debt (Maturity—June 30, 2021)(19) | 4,943 | 4,943 | 4,943 | |||||||||||
10% PIK Unsecured Debt (Maturity—June 30, 2021)(19) | 47 | 47 | 47 | |||||||||||
Preferred Stock (912 shares) | 1,981 | — | ||||||||||||
Warrants (5,333 equivalent shares; Expiration—April 18, 2021; Strike price—$0.01 per share) | 1,919 | — | ||||||||||||
| | | | | | | | | | | | | | | |
| 8,890 | 4,990 | |||||||||||||
OPI International Ltd.(13) | Provider of Man Camp and Industrial Storage Services | |||||||||||||
Common Stock (20,766,317 shares) | 1,371 | — | ||||||||||||
PCI Holding Company, Inc. | Manufacturer of Industrial Gas Generating Systems | |||||||||||||
12% Secured Debt (Maturity—March 31, 2019) | 12,975 | 12,906 | 12,906 | |||||||||||
Preferred Stock (1,740,000 shares) | 1,740 | 2,610 | ||||||||||||
Preferred Stock (1,500,000 shares; 20% cumulative)(8)(19) | 3,927 | 4,550 | ||||||||||||
| | | | | | | | | | | | | | | |
| 18,573 | 20,066 | |||||||||||||
Rocaceia, LLC (Quality Lease and Rental Holdings, LLC) | Provider of Rigsite Accommodation Unit Rentals and Related Services | |||||||||||||
12% Secured Debt (Maturity—January 8, 2018)(14)(15) | 30,785 | 30,281 | 250 | |||||||||||
Preferred Member Units (250 units) | 2,500 | — | ||||||||||||
| | | | | | | | | | | | | | | |
| 32,781 | 250 | |||||||||||||
Tin Roof Acquisition Company | Casual Restaurant Group | |||||||||||||
12% Secured Debt (Maturity—November 13, 2018) | 13,010 | 12,933 | 12,933 | |||||||||||
Class C Preferred Stock (Fully diluted 10.0%; 10% cumulative)(8)(19) | 2,951 | 2,951 | ||||||||||||
| | | | | | | | | | | | | | | |
| 15,884 | 15,884 | |||||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
| | | | | | | | | | | | | | |
Non-Control/Non-Affiliate Investments (7) | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Acousti Engineering Company of Florida | (10) | November 2, 2020 | Interior Subcontractor Providing Acoustical Walls and Ceilings | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 10.00% (L+8.50%, Floor 1.50%) | 11/2/2025 | $ | 12,381 | $ | 12,261 | $ | 12,376 |
| | | | Secured Debt | (9) | | 14.00% (L+12.50%, Floor 1.50%) | 11/2/2025 | | 860 | | 851 | | 851 |
| | | | | | | | | | | | 13,112 | | 13,227 |
Adams Publishing Group, LLC | (10) | November 19, 2015 | Local Newspaper Operator | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.75% (L+7.00%, Floor 1.75%) | 7/3/2023 | | 5,358 | | 5,267 | | 5,318 |
| | | | | | | | | | | | | | |
ADS Tactical, Inc. | (11) | March 7, 2017 | Value-Added Logistics and Supply Chain Provider to the Defense Industry | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.75% (L+5.75%, Floor 1.00%) | 3/19/2026 | | 24,038 | | 23,569 | | 24,219 |
| | | | | | | | | | | | | | |
Affordable Care Holding Corp. | (10) | May 9, 2019 | Dental Support Organization | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 5.75% (L+4.75%, Floor 1.00%) | 10/22/2022 | | 14,171 | | 14,038 | | 14,162 |
| | | | | | | | | | | | | | |
American Nuts, LLC | (10) | April 10, 2018 | Roaster, Mixer and Packager of Bulk Nuts and Seeds | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.00% (L+8.00%, Floor 1.00%) | 4/10/2023 | | 12,074 | | 11,932 | | 12,074 |
| | | | | | | | | | | | | | |
American Teleconferencing Services, Ltd. | (11) | May 19, 2016 | Provider of Audio Conferencing and Video Collaboration Solutions | | | | | | | | �� | | | |
| | | | Secured Debt | (9) (14) | | 7.50% (L+6.50%, Floor 1.00%) | 6/8/2023 | | 17,350 | | 16,687 | | 7,612 |
| | | | | | | | | | | | | | |
Arcus Hunting LLC | (10) | January 6, 2015 | Manufacturer of Bowhunting and Archery Products and Accessories | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 11.00% (L+10.00%, Floor 1.00%) | 3/31/2022 | | 12,591 | | 12,493 | | 12,591 |
| | | | | | | | | | | | | | |
Arrow International, Inc | (10) | December 21, 2020 | Manufacturer and Distributor of Charitable Gaming Supplies | | | | | | | | | | | |
| | | | Secured Debt | (9) (23) | | 9.23% (L+7.98%, Floor 1.25%) | 12/21/2025 | | 9,000 | | 8,919 | | 9,000 |
| | | | | | | | | | | | | | |
ASC Ortho Management Company, LLC | (10) | August 31, 2018 | Provider of Orthopedic Services | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.50% (L+7.50%, Floor 1.00%) | 8/31/2023 | | 5,140 | | 5,092 | | 5,133 |
| | | | Secured Debt | (19) | | 13.25% PIK | 12/1/2023 | | 2,260 | | 2,239 | | 2,260 |
| | | | | | | | | | | | 7,331 | | 7,393 |
16
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
UniTek Global Services, Inc.(11) | Provider of Outsourced Infrastructure Services | |||||||||||||||||||||||||||
LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.80%, Secured Debt (Maturity—January 13, 2019)(9) | 8,535 | 8,528 | 8,535 | |||||||||||||||||||||||||
LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.80% / 1.00% PIK, Current Coupon Plus PIK 10.80%, Secured Debt (Maturity—January 13, 2019)(9)(19) | 137 | 137 | 137 | |||||||||||||||||||||||||
15% PIK Unsecured Debt (Maturity—July 13, 2019)(19) | 833 | 833 | 833 | |||||||||||||||||||||||||
Preferred Stock (2,596,567 shares; 19% cumulative)(8)(19) | 2,725 | 2,720 | ||||||||||||||||||||||||||
Preferred Stock (4,935,377 shares; 13.5% cumulative)(8)(19) | 7,115 | 7,080 | ||||||||||||||||||||||||||
Common Stock (1,075,992 shares) | — | 2,320 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | ||||
| 19,338 | 21,625 | |||||||||||||||||||||||||||
Universal Wellhead Services Holdings, LLC(10) | Provider of Wellhead Equipment, Designs, and Personnel to the Oil & Gas Industry | |||||||||||||||||||||||||||
Preferred Member Units (UWS Investments, LLC) (716,949 units) | 717 | 800 | ||||||||||||||||||||||||||
Member Units (UWS Investments, LLC) (4,000,000 units) | 4,000 | 1,230 | ||||||||||||||||||||||||||
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||||||||||||||||
ATX Networks Corp. | (11) (13) (21) | June 30, 2015 | Provider of Radio Frequency Management Equipment | | | | | | | | | | | | ||||||||||||||
| | | | | | | | | | | | | | | Secured Debt | (9) (19) | | 8.75% (7.25% Cash, 1.50% PIK) (1.50% PIK + L+6.25%, Floor 1.00%) | 12/31/2023 | | 13,352 | | 13,350 | | 12,217 | ||||
| 4,717 | 2,030 | |||||||||||||||||||||||||||
Valley Healthcare Group, LLC | Provider of Durable Medical Equipment | |||||||||||||||||||||||||||
LIBOR Plus 12.50% (Floor 0.50%), Current Coupon 13.74%, Secured Debt (Maturity—December 29, 2020)(9) | 11,846 | 11,759 | 11,759 | |||||||||||||||||||||||||
Preferred Member Units (Valley Healthcare Holding, LLC) (1,600 units) | 1,600 | 1,600 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | ||||
| 13,359 | 13,359 | |||||||||||||||||||||||||||
Volusion, LLC | Provider of Online Software-as-a-Service eCommerce Solutions | |||||||||||||||||||||||||||
11.5% Secured Debt (Maturity—January 26, 2020) | 16,734 | 15,049 | 15,049 | |||||||||||||||||||||||||
Preferred Member Units (4,876,670 units) | 14,000 | 14,000 | ||||||||||||||||||||||||||
Warrants (1,831,355 equivalent units; Expiration—January 26, 2025; Strike price—$0.01 per unit) | 2,576 | 2,240 | ||||||||||||||||||||||||||
Berry Aviation, Inc. | (10) | July 6, 2018 | Charter Airline Services | | | | | | | | | | | | ||||||||||||||
| | | | | | | | | | | | | | | Secured Debt | (19) | | 12.00% (10.50% Cash, 1.5% PIK) | 1/6/2024 | | 4,659 | | 4,634 | | 4,659 | ||||
| 31,625 | 31,289 | |||||||||||||||||||||||||||
| | | | | | | | | | | | | | | Preferred Member Units | (8) (19) (30) | 122,416 | 16.00% PIK | | | | | 156 | | 156 | ||||
Subtotal Affiliate Investments (15.6% of total investments at fair value) | $ | 376,957 | $ | 338,231 | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | Preferred Member Units | (19) (30) | 1,548,387 | 8.00% PIK | | | | | 1,671 | | 1,777 | ||||
| | | | | | | | | | | | 6,461 | | 6,592 | ||||||||||||||
BigName Commerce, LLC | (10) | May 11, 2017 | Provider of Envelopes and Complimentary Stationery Products | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | (9) | | 8.25% (L+7.25%, Floor 1.00%) | 5/11/2022 | | 1,946 | | 1,941 | | 1,946 | ||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
Binswanger Enterprises, LLC | (10) | March 10, 2017 | Glass Repair and Installation Service Provider | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | (9) | | 9.00% (L+8.00%, Floor 1.00%) | 3/9/2022 | | 12,580 | | 12,488 | | 12,580 | ||||||||||||||
| | | | Member Units | | 1,050,000 | | | | | | 1,050 | | 730 | ||||||||||||||
| | | | | | | | | | | | 13,538 | | 13,310 | ||||||||||||||
Bluestem Brands, Inc. | (11) | December 19, 2013 | Multi-Channel Retailer of General Merchandise | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | (9) | | 10.00% (L+8.50%, Floor 1.50%) | 8/28/2025 | | 5,879 | | 5,879 | | 5,849 | ||||||||||||||
| | | | Common Stock | (8) | 723,184 | | | | | | 1 | | 940 | ||||||||||||||
| | | | | | | | | | | | 5,880 | | 6,789 | ||||||||||||||
Brainworks Software, LLC | (10) | August 12, 2014 | Advertising Sales and Newspaper Circulation Software | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | (9) (14) (17) | | 12.50% (Prime+9.25%, Floor 3.25%) | 7/22/2019 | | 7,817 | | 7,817 | | 5,774 | ||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
Brightwood Capital Fund Investments | (12) (13) | July 21, 2014 | Investment Partnership | | | | | | | | | | | | ||||||||||||||
| | | | LP Interests (Brightwood Capital Fund III, LP) | (8) (31) | 1.6% | | | | | | 8,040 | | 5,018 | ||||||||||||||
| | | | LP Interests (Brightwood Capital Fund IV, LP) | (8) (31) | 0.6% | | | | | | 4,350 | | 4,350 | ||||||||||||||
| | | | | | | | | | | | 12,390 | | 9,368 | ||||||||||||||
Burning Glass Intermediate Holding Company, Inc. | (10) | June 14, 2021 | Provider of Skills-Based Labor Market Analytics | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | (9) | | 6.00% (L+5.00%, Floor 1.00%) | 6/10/2028 | | 16,892 | | 16,517 | | 16,517 | ||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
Cadence Aerospace LLC | (10) | November 14, 2017 | Aerostructure Manufacturing | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | (9) (19) | | 9.50% (4.25% Cash, 5.25% PIK) (5.25% PIK + L+3.25%, Floor 1.00%) | 11/14/2023 | | 28,409 | | 28,225 | | 26,605 | ||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
17
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Non-Control/Non-Affiliate Investments(7) | ||||||||||||||
AAC Holdings, Inc.(11) | Substance Abuse Treatment Service Provider | |||||||||||||
LIBOR Plus 6.75% (Floor 1.00%), Current Coupon 8.06%, Secured Debt (Maturity—June 30, 2023)(9) | $ | 11,826 | $ | 11,538 | $ | 11,826 | ||||||||
Adams Publishing Group, LLC(10) | Local Newspaper Operator | |||||||||||||
LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.33%, Secured Debt (Maturity—November 3, 2020)(9) | 8,572 | 8,338 | 8,411 | |||||||||||
ADS Tactical, Inc.(10) | Value-Added Logistics and Supply Chain Provider to the Defense Industry | |||||||||||||
LIBOR Plus 7.50% (Floor 0.75%), Current Coupon 8.83%, Secured Debt (Maturity—December 31, 2022)(9) | 13,014 | 12,757 | 12,757 | |||||||||||
Aethon United BR LP(10) | Oil & Gas Exploration & Production | |||||||||||||
LIBOR Plus 6.75% (Floor 1.00%), Current Coupon 7.98%, Secured Debt (Maturity—September 8, 2023)(9) | 3,438 | 3,386 | 3,386 | |||||||||||
Ahead, LLC(10) | IT Infrastructure Value Added Reseller | |||||||||||||
LIBOR Plus 6.50%, Current Coupon 7.84%, Secured Debt (Maturity—November 2, 2020) | 13,688 | 13,406 | 13,688 | |||||||||||
Allflex Holdings III Inc.(11) | Manufacturer of Livestock Identification Products | |||||||||||||
LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.31%, Secured Debt (Maturity—July 19, 2021)(9) | 14,516 | 14,443 | 14,619 | |||||||||||
American Scaffold Holdings, Inc.(10) | Marine Scaffolding Service Provider | |||||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.83%, Secured Debt (Maturity—March 31, 2022)(9) | 7,125 | 7,036 | 7,089 | |||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
California Pizza Kitchen, Inc. | (11) | August 29, 2016 | Casual Restaurant Group | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 11.50% (L+10.00%, Floor 1.50%) | 11/23/2024 | | 7,700 | | 7,338 | | 7,713 |
| | | | Secured Debt | (9) (19) | | 13.50% (1.00% Cash, 12.50% PIK) (1.00% Cash, L+11.00% PIK, Floor 1.50%) | 11/23/2024 | | 2,858 | | 2,800 | | 2,901 |
| | | | Secured Debt | (9) (19) | | 15.00% (1.00% Cash, 14.00% PIK) (1.00% Cash, L+12.50% PIK, Floor 1.50%) | 5/23/2025 | | 2,455 | | 2,455 | | 2,486 |
| | | | | | | | | | | | 12,593 | | 13,100 |
Camin Cargo Control, Inc. | (11) | June 14, 2021 | Provider of Mission Critical Inspection, Testing and Fuel Treatment Services | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.50% (L+6.50%, Floor 1.00%) | 6/4/2026 | | 16,000 | | 15,840 | | 15,920 |
| | | | | | | | | | | | | | |
Central Security Group, Inc. | (11) | December 4, 2017 | Security Alarm Monitoring Service Provider | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.00%, Floor 1.00%) | 10/16/2025 | | 6,857 | | 6,857 | | 6,411 |
| | | | Common Stock | | 329,084 | | | | | | 1,481 | | 740 |
| | | | | | | | | | | | 8,338 | | 7,151 |
Cenveo Corporation | (11) | September 4, 2015 | Provider of Digital Marketing Agency Services | | | | | | | | | | | |
| | | | Common Stock | | 322,907 | | | | | | 6,183 | | 2,301 |
| | | | | | | | | | | | | | |
Chisholm Energy Holdings, LLC | (10) | May 15, 2019 | Oil & Gas Exploration & Production | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.75% (L+6.25%, Floor 1.50%) | 5/15/2026 | | 2,857 | | 2,799 | | 2,658 |
| | | | | | | | | | | | | | |
Clarius BIGS, LLC | (10) | September 23, 2014 | Prints & Advertising Film Financing | | | | | | | | | | | |
| | | | Secured Debt | (14) (17) (19) | | 15.00% PIK | 1/5/2015 | | 2,803 | | 2,803 | | 1 |
| | | | | | | | | | | | | | |
Clickbooth.com, LLC | (10) | December 5, 2017 | Provider of Digital Advertising Performance Marketing Solutions | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.50% (L+8.50%, Floor 1.00%) | 1/31/2025 | | 7,750 | | 7,674 | | 7,750 |
| | | | | | | | | | | | | | |
Construction Supply Investments, LLC | (10) | December 29, 2016 | Distribution Platform of Specialty Construction Materials to Professional Concrete and Masonry Contractors | | | | | | | | | | | |
| | | | Member Units | (8) | 861,618 | | | | | | 3,335 | | 7,525 |
| | | | | | | | | | | | | | |
Copper Trail Fund Investments | (12) (13) | July 17, 2017 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests (CTEF I, LP) | | 375 | | | | | | - | | 103 |
| | | | | | | | | | | | | | |
Corel Corporation | (11) (13) (21) | July 24, 2019 | Publisher of Desktop and Cloud-based Software | | | | | | | | | | | |
| | | | Secured Debt | | | 5.14% (L+5.00%) | 7/2/2026 | | 23,041 | | 22,253 | | 23,085 |
| | | | | | | | | | | | | | |
18
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
American Teleconferencing Services, Ltd.(11) | Provider of Audio Conferencing and Video Collaboration Solutions | |||||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.78%, Secured Debt (Maturity—December 8, 2021)(9) | 10,873 | 10,182 | 10,519 | |||||||||||
LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.74%, Secured Debt (Maturity—June 6, 2022)(9) | 3,714 | 3,584 | 3,689 | |||||||||||
| | | | | | | | | | | | | | | |
| 13,766 | 14,208 | |||||||||||||
Anchor Hocking, LLC(11) | Household Products Manufacturer | |||||||||||||
LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.32%, Secured Debt (Maturity—June 4, 2018)(9) | 2,260 | 2,260 | 2,299 | |||||||||||
Member Units (440,620 units) | 4,928 | 3,800 | ||||||||||||
| | | | | | | | | | | | | | | |
| 7,188 | 6,099 | |||||||||||||
Apex Linen Service, Inc. | Industrial Launderers | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.24%, Secured Debt (Maturity—October 30, 2022)(9) | 2,400 | 2,400 | 2,400 | |||||||||||
13% Secured Debt (Maturity—October 30, 2022) | 14,416 | 14,345 | 14,345 | |||||||||||
| | | | | | | | | | | | | | | |
| 16,745 | 16,745 | |||||||||||||
Arcus Hunting LLC.(10) | Manufacturer of Bowhunting and Archery Products and Accessories | |||||||||||||
LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.30%, Secured Debt (Maturity—November 13, 2019)(9) | 17,138 | 17,027 | 17,138 | |||||||||||
ATI Investment Sub, Inc.(11) | Manufacturer of Solar Tracking Systems | |||||||||||||
LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.49%, Secured Debt (Maturity—June 22, 2021)(9) | 7,614 | 7,456 | 7,595 | |||||||||||
ATS Workholding, Inc.(10) | Manufacturer of Machine Cutting Tools and Accessories | |||||||||||||
LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.73%, Secured Debt (Maturity—March 10, 2019)(9) | 6,173 | 6,153 | 5,663 | |||||||||||
ATX Networks Corp.(11)(13)(21) | Provider of Radio Frequency Management Equipment | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.33%, Secured Debt (Maturity—June 11, 2021)(9) | 9,666 | 9,542 | 9,569 | |||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
Darr Equipment LP | (10) | April 15, 2014 | Heavy Equipment Dealer | | | | | | | | | | | |
| | | | Secured Debt | (19) | | 12.50% (11.50% Cash, 1.00% PIK) | 6/22/2023 | | 5,989 | | 5,989 | | 5,989 |
| | | | Warrants | (29) | 915,734 | | 12/23/2023 | | | | 474 | | - |
| | | | | | | | | | | | 6,463 | | 5,989 |
DTE Enterprises, LLC | (10) | April 13, 2018 | Industrial Powertrain Repair and Services | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 10.00% (L+8.50%, Floor 1.50%) | 4/13/2023 | | 9,324 | | 9,236 | | 9,061 |
| | | | Class AA Preferred Member Units (non-voting) | (8) (19) | | 10.00% PIK | | | | | 999 | | 999 |
| | | | Class A Preferred Member Units | | 776,316 | | | | | | 776 | | 630 |
| | | | | | | | | | | | 11,011 | | 10,690 |
Dynamic Communities, LLC | (10) | July 17, 2018 | Developer of Business Events and Online Community Groups | | | | | | | | | | | |
| | | | Secured Debt | (9) (19) | | 12.50% (6.25% Cash, 6.25% PIK) (L+11.50%, Floor 1.00%) | 7/17/2023 | | 5,639 | | 5,584 | | 5,505 |
| | | | | | | | | | | | | | |
Eastern Wholesale Fence LLC | (10) | November 19, 2020 | Manufacturer and Distributor of Residential and Commercial Fencing Solutions | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.50%, (L+6.50%, Floor 1.00%) | 10/30/2025 | | 18,976 | | 18,626 | | 18,848 |
| | | | | | | | | | | | | | |
Echo US Holdings, LLC. | (10) | November 12, 2019 | Developer and Manufacturer of PVC and Polypropylene Materials | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.88% (L+6.25%, Floor 1.63%) | 10/25/2024 | | 20,616 | | 20,530 | | 20,616 |
| | | | | | | | | | | | | | |
Electronic Transaction Consultants, LLC | (10) | July 24, 2020 | Technology Service Provider for Toll Road and Infrastructure Operators | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.50% (L+7.50%, Floor 1.00%) | 7/24/2025 | | 10,000 | | 9,845 | | 9,993 |
| | | | | | | | | | | | | | |
EnCap Energy Fund Investments | (12) (13) | December 28, 2010 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests (EnCap Energy Capital Fund VIII, L.P.) | (8) (31) | 0.1% | | | | | | 3,745 | | 1,229 |
| | | | LP Interests (EnCap Energy Capital Fund VIII Co- | (31) | 0.4% | | | | | | 2,097 | | 651 |
| | | | LP Interests (EnCap Energy Capital Fund IX, L.P.) | (8) (31) | 0.1% | | | | | | 4,336 | | 1,928 |
| | | | LP Interests (EnCap Energy Capital Fund X, L.P.) | (8) (31) | 0.1% | | | | | | 8,878 | | 7,357 |
19
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Berry Aviation, Inc.(10) | Airline Charter Service Operator | |||||||||||||
13.75% Secured Debt (Maturity—January 30, 2020) | 5,627 | 5,595 | 5,627 | |||||||||||
Common Stock (553 shares) | 400 | 880 | ||||||||||||
| | | | | | | | | | | | | | | |
| 5,995 | 6,507 | |||||||||||||
BigName Commerce, LLC(10) | Provider of Envelopes and Complimentary Stationery Products | |||||||||||||
LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.55%, Secured Debt (Maturity—May 11, 2022)(9) | 2,504 | 2,475 | 2,475 | |||||||||||
Binswanger Enterprises, LLC(10) | Glass Repair and Installation Service Provider | |||||||||||||
LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.34%, Secured Debt (Maturity—March 9, 2022)(9) | 15,383 | 15,104 | 15,104 | |||||||||||
Member Units (1,050,000 units) | 1,050 | 940 | ||||||||||||
| | | | | | | | | | | | | | | |
| 16,154 | 16,044 | |||||||||||||
Bluestem Brands, Inc.(11) | Multi-Channel Retailer of General Merchandise | |||||||||||||
LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.81%, Secured Debt (Maturity—November 6, 2020)(9) | 12,315 | 12,128 | 8,734 | |||||||||||
Brainworks Software, LLC(10) | Advertising Sales and Newspaper Circulation Software | |||||||||||||
Prime Plus 9.25% (Floor 3.25%), Current Coupon 13.50%, Secured Debt (Maturity—July 22, 2019)(9) | 6,733 | 6,700 | 6,502 | |||||||||||
Brightwood Capital Fund Investments(12)(13) | Investment Partnership | |||||||||||||
LP Interests (Brightwood Capital Fund III, LP) (Fully diluted 1.7%)(8) | 12,000 | 10,328 | ||||||||||||
LP Interests (Brightwood Capital Fund IV, LP) (Fully diluted 0.8%)(8) | 500 | 500 | ||||||||||||
| | | | | | | | | | | | | | | |
| 12,500 | 10,828 | |||||||||||||
Brundage-Bone Concrete Pumping, Inc.(11) | Construction Services Provider | |||||||||||||
10.375% Secured Debt (Maturity—September 1, 2023) | 3,000 | 2,987 | 3,090 | |||||||||||
California Pizza Kitchen, Inc.(11) | Casual Restaurant Group | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.24%, Secured Debt (Maturity—August 23, 2022)(9) | 12,902 | 12,860 | 12,816 | |||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
| | | | LP Interests (EnCap Flatrock Midstream Fund II, L.P.) | (8) (31) | 0.8% | | | | | | 6,712 | | 2,687 |
| | | | LP Interests (EnCap Flatrock Midstream Fund III, L.P.) | (8) (31) | 0.2% | | | | | | 6,953 | | 6,093 |
| | | | | | | | | | | | 32,721 | | 19,945 |
EPIC Y-Grade Services, LP | (11) | June 22, 2018 | NGL Transportation & Storage | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.00%, Floor 1.00%) | 6/30/2027 | | 6,927 | | 6,845 | | 6,027 |
| | | | | | | | | | | | | | |
Flip Electronics LLC | (10) | January 4, 2021 | Distributor of Hard-to-Find and Obsolete Electronic Components | | | | | | | | | | | |
| | | | Secured Debt | (9) (33) | | 9.17% (L+8.09%, Floor 1.00%) | 1/2/2026 | | 5,400 | | 5,293 | | 5,293 |
| | | | | | | | | | | | | | |
Fortna Acquisition Co., Inc. | (10) | July 23, 2019 | Process, Physical Distribution and Logistics Consulting Services | | | | | | | | | | | |
| | | | Secured Debt | | | 5.10% (L+5.00%) | 4/8/2025 | | 7,654 | | 7,560 | | 7,577 |
| | | | | | | | | | | | | | |
Fuse, LLC | (11) | June 30, 2019 | Cable Networks Operator | | | | | | | | | | | |
| | | | Secured Debt | | | 12.00% | 6/28/2024 | | 1,810 | | 1,810 | | 1,672 |
| | | | Common Stock | | 10,429 | | | | | | 256 | | - |
| | | | | | | | | | | | 2,066 | | 1,672 |
GeoStabilization International (GSI) | (11) | December 31, 2018 | Geohazard Engineering Services & Maintenance | | | | | | | | | | | |
| | | | Secured Debt | | | 5.35% (L+5.25%) | 12/19/2025 | | 11,167 | | 11,087 | | 11,167 |
| | | | | | | | | | | | | | |
GoWireless Holdings, Inc. | (11) | December 31, 2017 | Provider of Wireless Telecommunications Carrier Services | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.50% (L+6.50%, Floor 1.00%) | 12/22/2024 | | 18,820 | | 18,710 | | 18,839 |
| | | | | | | | | | | | | | |
Grupo Hima San Pablo, Inc. | (11) | March 7, 2013 | Tertiary Care Hospitals | | | | | | | | | | | |
| | | | Secured Debt | (9) (14) (17) | | 9.25% (L+7.00%, Floor 1.50%) | 4/30/2019 | | 4,504 | | 4,504 | | 2,197 |
| | | | Secured Debt | (14) (17) | | 13.75% | 10/15/2018 | | 2,055 | | 2,040 | | 49 |
| | | | | | | | | | | | 6,544 | | 2,246 |
GS HVAM Intermediate, LLC | (10) | October 18, 2019 | Specialized Food Distributor | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.75% (L+5.75%, Floor 1.00%) | 10/2/2024 | | 11,224 | | 11,136 | | 11,224 |
| | | | | | | | | | | | | | |
GS Operating, LLC | (10) | February 24, 2020 | Distributor of Industrial and Specialty Parts | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.00% (L+6.50%, Floor 1.50%) | 2/24/2025 | | 25,666 | | 25,293 | | 25,666 |
| | | | | | | | | | | | | | |
HDC/HW Intermediate Holdings | (10) | December 21, 2018 | Managed Services and Hosting Provider | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.50% (L+7.50%, Floor 1.00%) | 12/21/2023 | | 3,457 | | 3,419 | | 3,207 |
| | | | | | | | | | | | | | |
Heartland Dental, LLC | (10) | September 9, 2020 | Dental Support Organization | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.50% (L+6.50%, Floor 1.00%) | 4/30/2025 | | 14,888 | | 14,507 | | 15,036 |
| | | | | | | | | | | | | | |
20
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
CDHA Management, LLC(10) | Dental Services | |||||||||||||
LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.68%, Secured Debt (Maturity—December 5, 2021)(9) | 4,356 | 4,290 | 4,356 | |||||||||||
Cengage Learning Acquisitions, Inc.(11) | Provider of Educational Print and Digital Services | |||||||||||||
LIBOR Plus 4.25% (Floor 1.00%), Current Coupon 5.49%, Secured Debt (Maturity—June 7, 2023)(9) | 9,304 | 8,834 | 8,603 | |||||||||||
Cenveo Corporation(11) | Provider of Commercial Printing, Envelopes, Labels, and Printed Office Products | |||||||||||||
6% Secured Debt (Maturity—August 1, 2019) | 19,130 | 16,846 | 15,161 | |||||||||||
Charlotte Russe, Inc(11) | Fast-Fashion Retailer to Young Women | |||||||||||||
LIBOR Plus 5.50% (Floor 1.25%), Current Coupon 6.82%, Secured Debt (Maturity—May 22, 2019)(9) | 17,058 | 15,660 | 7,559 | |||||||||||
Clarius BIGS, LLC(10) | Prints & Advertising Film Financing | |||||||||||||
15% PIK Secured Debt (Maturity—January 5, 2015)(14)(17) | 2,924 | 2,924 | 88 | |||||||||||
Construction Supply Investments, LLC(10) | Distribution Platform of Specialty Construction Materials to Professional Concrete and Masonry Contractors | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.24%, Secured Debt (Maturity—June 30, 2023)(9) | 7,313 | 7,276 | 7,276 | |||||||||||
Member Units (28,000 units) | 3,723 | 3,723 | ||||||||||||
| | | | | | | | | | | | | | | |
| 10,999 | 10,999 | |||||||||||||
Covenant Surgical Partners, Inc.(11) | Ambulatory Surgical Centers | |||||||||||||
8.75% Secured Debt (Maturity—August 1, 2019) | 2,800 | 2,755 | 2,892 | |||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
Hunter Defense Technologies, Inc. | (10) | March 29, 2018 | Provider of Military and Commercial Shelters and Systems | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.00%, Floor 1.00%) | 3/29/2023 | | 34,739 | | 34,407 | | 34,739 |
| | | | | | | | | | | | | | |
HW Temps LLC | | July 2, 2015 | Temporary Staffing Solutions | | | | | | | | | | | |
| | | | Secured Debt | | | 8.00% | 3/29/2023 | | 7,964 | | 7,901 | | 7,698 |
| | | | | | | | | | | | | | |
Hybrid Promotions, LLC | (10) | June 30, 2021 | Wholesaler of Licensed, Branded and Private Label Apparel | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.25% (L+8.25%, Floor 1.00%) | 6/30/2026 | | 7,088 | | 6,946 | | 6,946 |
| | | | | | | | | | | | | | |
Hyperion Materials & Technologies, Inc. | (11) (13) (21) | September 12, 2019 | Manufacturer of Cutting and Machine Tools & Specialty Polishing Compounds | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.50% (L+5.50%, Floor 1.00%) | 8/28/2026 | | 22,163 | | 21,810 | | 22,169 |
| | | | | | | | | | | | | | |
Ian, Evan & Alexander Corporation | (10) | July 31, 2020 | Cybersecurity, Software and Data Analytics provider to the Intelligence Community | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.50% (L+8.50%, Floor 1.00%) | 7/31/2025 | | 15,904 | | 15,575 | | 15,850 |
| | | | | | | | | | | | | | |
Implus Footcare, LLC | (10) | June 1, 2017 | Provider of Footwear and Related Accessories | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.75% (L+7.75%, Floor 1.00%) | 4/30/2024 | | 18,796 | | 18,519 | | 17,567 |
| | | | | | | | | | | | | | |
Independent Pet Partners Intermediate Holdings, LLC | (10) | November 20, 2018 | Omnichannel Retailer of Specialty Pet Products | | | | | | | | | | | |
| | | | Secured Debt | (19) | | 6.20% PIK (L+6.00% PIK) | 12/22/2022 | | 6,433 | | 6,433 | | 6,433 |
| | | | Secured Debt | (19) | | 6.00% PIK | 11/20/2023 | | 17,356 | | 16,046 | | 16,046 |
| | | | Preferred Stock (non-voting) | | | | | | | | 3,235 | | 3,420 |
| | | | Preferred Stock (non-voting) | | | | | | | | - | | - |
| | | | Member Units | | 1,558,333 | | | | | | 1,558 | | - |
| | | | | | | | | | | | 27,272 | | 25,899 |
Industrial Services Acquisition, LLC | (10) | June 17, 2016 | Industrial Cleaning Services | | | | | | | | | | | |
| | | | Unsecured Debt | (19) | | 12.00% (11.25% Cash, 0.75% PIK) | 12/17/2022 | | 5,824 | | 5,790 | | 5,824 |
| | | | Preferred Member Units | (8) (19) (30) | 144 | 10.00% PIK | | | | | 116 | | 149 |
| | | | Preferred Member Units | (8) (19) (30) | 80 | 20.00% PIK | | | | | 76 | | 88 |
| | | | Member Units | (30) | 900 | | | | | | 900 | | 690 |
| | | | | | | | | | | | 6,882 | | 6,751 |
Inn of the Mountain Gods Resort and Casino | (11) | October 30, 2013 | Hotel & Casino Owner & Operator | | | | | | | | | | | |
| | | | Secured Debt | | | 9.25% | 11/30/2023 | | 6,677 | | 6,677 | | 6,460 |
| | | | | | | | | | | | | | |
Interface Security Systems, L.L.C | (10) | August 7, 2019 | Commercial Security & Alarm Services | | | | | | | | | | | |
| | | | Secured Debt | (9) (19) | | 9.75% (8.75% Cash, 1.00% PIK) (1.00% PIK + L+7.00%, Floor 1.75%) | 8/7/2023 | | 7,294 | | 7,206 | | 7,294 |
21
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
CST Industries Inc.(11) | Storage Tank Manufacturer | |||||||||||||
PRIME Plus 5.25% (Floor 2.50%), Current Coupon 9.50%, Secured Debt (Maturity—October 14, 2017)(9) | 1,590 | 1,574 | 1,590 | |||||||||||
PRIME Plus 5.25% (Floor 2.50%), Current Coupon 9.50%, Secured Debt (Maturity—May 22, 2017)(9)(17) | 9,102 | 9,102 | 8,875 | |||||||||||
| | | | | | | | | | | | | | | |
| 10,676 | 10,465 | |||||||||||||
CTVSH, PLLC(10) | Emergency Care and Specialty Service Animal Hospital | |||||||||||||
LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.32%, Secured Debt (Maturity—August 3, 2022)(9) | 12,000 | 11,883 | 11,883 | |||||||||||
Darr Equipment LP(10) | Heavy Equipment Dealer | |||||||||||||
12% Current / 2% PIK Secured Debt (Maturity—April 15, 2020)(19) | 21,455 | 21,113 | 21,164 | |||||||||||
Warrants (915,734 equivalent units; Expiration—April 15, 2024; Strike price—$1.50 per unit) | 474 | 10 | ||||||||||||
| | | | | | | | | | | | | | | |
| 21,587 | 21,174 | |||||||||||||
Digital River, Inc.(11) | Provider of Outsourced e-Commerce Solutions and Services | |||||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.82%, Secured Debt (Maturity—February 12, 2021)(9) | 15,184 | 15,102 | 15,260 | |||||||||||
Digital Room LLC(11) | Pure-Play e-Commerce Print Business | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.24%, Secured Debt (Maturity—November 21, 2022)(9) | 7,339 | 7,207 | 7,302 | |||||||||||
Drilling Info Holdings, Inc. | Information Services for the Oil and Gas Industry | |||||||||||||
Common Stock (3,788,865 shares)(8) | — | 8,410 | ||||||||||||
ECP-PF Holdings Group, Inc.(10) | Fitness Club Operator | |||||||||||||
LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.30%, Secured Debt (Maturity—November 26, 2019)(9) | 5,625 | 5,597 | 5,625 | |||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
| | | | | | | | | | | | | | |
Intermedia Holdings, Inc. | (11) | August 3, 2018 | Unified Communications as a Service | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.00%, Floor 1.00%) | 7/19/2025 | | 20,733 | | 20,657 | | 20,733 |
| | | | | | | | | | | | | | |
Invincible Boat Company, LLC. | (10) | August 28, 2019 | Manufacturer of Sport Fishing Boats | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.00% (L+6.50%, Floor 1.50%) | 8/28/2025 | | 18,598 | | 18,424 | | 18,598 |
| | | | | | | | | | | | | | |
INW Manufacturing, LLC | (11) | May 19, 2021 | Manufacturer of Nutrition and Wellness Products | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.50% (L+5.75%, Floor 0.75%) | 3/25/2027 | | 7,454 | | 7,232 | | 7,304 |
| | | | | | | | | | | | | | |
Isagenix International, LLC | (11) | June 21, 2018 | Direct Marketer of Health & Wellness Products | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.75% (L+5.75%, Floor 1.00%) | 6/14/2025 | | 5,365 | | 5,338 | | 4,404 |
| | | | | | | | | | | | | | |
Jackmont Hospitality, Inc. | (10) | May 26, 2015 | Franchisee of Casual Dining Restaurants | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.75% (L+6.75%, Floor 1.00%) | 7/30/2021 | | 3,928 | | 3,928 | | 3,219 |
| | | | | | | | | | | | | | |
Joerns Healthcare, LLC | (11) | April 3, 2013 | Manufacturer and Distributor of Health Care Equipment & Supplies | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.00%, Floor 1.00%) | 8/21/2024 | | 4,016 | | 3,963 | | 3,744 |
| | | | Common Stock | | 472,579 | | | | | | 4,429 | | 1,625 |
| | | | | | | | | | | | 8,392 | | 5,369 |
Kemp Technologies Inc. | (10) | June 27, 2019 | Provider of Application Delivery Controllers | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.00%, Floor 1.00%) | 3/29/2024 | | 16,306 | | 16,062 | | 16,306 |
| | | | Common Stock | | 903,225 | | | | | | 1,395 | | 1,905 |
| | | | | | | | | | | | 17,457 | | 18,211 |
Klein Hersh, LLC | (10) | November 13, 2020 | Executive and C-Suite Placement for the Life Sciences and Healthcare Industries | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.75% (L+8.00%, Floor 0.75%) | 11/13/2025 | | 32,094 | | 31,341 | | 32,045 |
| | | | | | | | | | | | | | |
Kore Wireless Group Inc. | (11) | December 31, 2018 | Mission Critical Software Platform | | | | | | | | | | | |
| | | | Secured Debt | | | 5.65% (L+5.50%) | 12/20/2024 | | 18,993 | | 18,915 | | 18,993 |
| | | | | | | | | | | | | | |
Larchmont Resources, LLC | (11) | August 13, 2013 | Oil & Gas Exploration & Production | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.00% (L+8.00%, Floor 1.00%) | 8/9/2021 | | 2,231 | | 2,231 | | 1,004 |
| | | | Member Units | (30) | 2,828 | | | | | | 353 | | 113 |
| | | | | | | | | | | | 2,584 | | 1,117 |
Laredo Energy VI, LP | (10) | January 15, 2019 | Oil & Gas Exploration & Production | | | | | | | | | | | |
| | | | Member Units | | 1,155,952 | | | | | | 11,560 | | 9,771 |
| | | | | | | | | | | | | | |
Lightbox Holdings, L.P. | (11) | May 23, 2019 | Provider of Commercial Real Estate Software | | | | | | | | | | | |
| | | | Secured Debt | | | 5.15% (L+5.00%) | 5/9/2026 | | 14,700 | | 14,522 | | 14,626 |
22
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
EnCap Energy Fund Investments(12)(13) | Investment Partnership | |||||||||||||
LP Interests (EnCap Energy Capital Fund VIII, L.P.) (Fully diluted 0.1%)(8) | 3,881 | 2,177 | ||||||||||||
LP Interests (EnCap Energy Capital Fund VIII Co-Investors, L.P.) (Fully diluted 0.3%) | 2,227 | 1,549 | ||||||||||||
LP Interests (EnCap Energy Capital Fund IX, L.P.) (Fully diluted 0.1%)(8) | 4,189 | 3,508 | ||||||||||||
LP Interests (EnCap Energy Capital Fund X, L.P.) (Fully diluted 0.1%)(8) | 5,522 | 5,284 | ||||||||||||
LP Interests (EnCap Flatrock Midstream Fund II, L.P.) (Fully diluted 0.8%)(8) | 5,812 | 5,611 | ||||||||||||
LP Interests (EnCap Flatrock Midstream Fund III, L.P.) (Fully diluted 0.2%) | 3,317 | 3,494 | ||||||||||||
| | | | | | | | | | | | | | | |
| 24,948 | 21,623 | |||||||||||||
Evergreen Skills Lux S.á r.l. (d/b/a Skillsoft)(11)(13) | Technology-based Performance Support Solutions | |||||||||||||
LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.49%, Secured Debt (Maturity—April 28, 2022)(9) | 6,999 | 6,872 | 5,760 | |||||||||||
Extreme Reach, Inc.(11) | Integrated TV and Video Advertising Platform | |||||||||||||
LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—February 7, 2020)(9) | 9,032 | 9,017 | 9,028 | |||||||||||
Felix Investments Holdings II(10) | Oil & Gas Exploration & Production | |||||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.81%, Secured Debt (Maturity—August 9, 2022)(9) | 3,333 | 3,264 | 3,264 | |||||||||||
Flavors Holdings Inc.(11) | Global Provider of Flavoring and Sweetening Products | |||||||||||||
LIBOR Plus 5.75% (Floor 1.00%), Current Coupon 7.08%, Secured Debt (Maturity—April 3, 2020)(9) | 13,271 | 12,763 | 12,640 | |||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
| | | | | | | | | | | | | | |
LKCM Headwater Investments I, L.P. | (12) (13) | January 25, 2013 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests | (31) | 2.3% | | | | | | 1,746 | | 3,302 |
| | | | | | | | | | | | | | |
LL Management, Inc. | (10) | May 2, 2019 | Medical Transportation Service Provider | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.25% (L+7.25%, Floor 1.00%) | 9/25/2023 | | 17,525 | | 17,364 | | 17,525 |
| | | | | | | | | | | | | | |
Logix Acquisition Company, LLC | (10) | June 24, 2016 | Competitive Local Exchange Carrier | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.75% (L+5.75%, Floor 1.00%) | 12/22/2024 | | 25,991 | | 24,572 | | 24,821 |
| | | | | | | | | | | | | | |
Looking Glass Investments, LLC | (12) (13) | July 1, 2015 | Specialty Consumer Finance | | | | | | | | | | | |
| | | | Member Units | | 3 | | | | | | 125 | | 25 |
| | | | | | | | | | | | | | |
Lulu's Fashion Lounge, LLC | (10) | August 31, 2017 | Fast Fashion E-Commerce Retailer | | | | | | | | | | | |
| | | | Secured Debt | (9) (19) | | 10.50% (8.00% Cash, 2.50% PIK) (2.50% PIK + L+7.00%, Floor 1.00%) | 8/28/2022 | | 10,837 | | 10,719 | | 9,266 |
| | | | | | | | | | | | | | |
Lynx FBO Operating LLC | (10) | September 30, 2019 | Fixed Based Operator in the General Aviation Industry | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.25% (L+5.75%, Floor 1.50%) | 9/30/2024 | | 14,055 | | 13,841 | | 14,055 |
| | | | Member Units | | 4,872 | | | | | | 687 | | 780 |
| | | | | | | | | | | | 14,528 | | 14,835 |
Mac Lean-Fogg Company | (10) | April 22, 2019 | Manufacturer and Supplier for Auto and Power Markets | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 5.38% (L+4.75%, Floor 0.625%) | 12/22/2025 | | 17,123 | | 17,030 | | 17,123 |
| | | | Preferred Stock | (19) | | 13.75% (4.50% Cash, 9.25% PIK) | | | | | 1,881 | | 1,881 |
| | | | | | | | | | | | 18,911 | | 19,004 |
Mako Steel, LP | (10) | March 15, 2021 | Self-Storage Design & Construction | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.00% (L+7.25%, Floor 0.75%) | 3/13/2026 | | 17,522 | | 17,170 | | 17,170 |
| | | | | | | | | | | | | | |
MB2 Dental Solutions, LLC | (11) | January 28, 2021 | Dental Partnership Organization | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.00%, Floor 1.00%) | 1/29/2027 | | 8,673 | | 8,520 | | 8,520 |
| | | | | | | | | | | | | | |
Mills Fleet Farm Group, LLC | (10) | October 24, 2018 | Omnichannel Retailer of Work, Farm and Lifestyle Merchandise | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.00%, Floor 1.00%) | 10/24/2024 | | 15,088 | | 14,850 | | 15,082 |
| | | | | | | | | | | | | | |
NBG Acquisition Inc | (11) | April 28, 2017 | Wholesaler of Home Décor Products | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.50% (L+5.50%, Floor 1.00%) | 4/26/2024 | | 4,042 | | 4,011 | | 3,681 |
| | | | | | | | | | | | | | |
NinjaTrader, LLC | (10) | December 18, 2019 | Operator of Futures Trading Platform | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.25% (L+6.75%, Floor 1.50%) | 12/18/2024 | | 16,875 | | 16,576 | | 16,849 |
| | | | | | | | | | | | | | |
23
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
GI KBS Merger Sub LLC(11) | Outsourced Janitorial Services to Retail/Grocery Customers | |||||||||||||
LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.32%, Secured Debt (Maturity—October 29, 2021)(9) | 6,807 | 6,728 | 6,803 | |||||||||||
LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.81%, Secured Debt (Maturity—April 29, 2022)(9) | 3,800 | 3,653 | 3,705 | |||||||||||
| | | | | | | | | | | | | | | |
| 10,381 | 10,508 | |||||||||||||
Grace Hill, LLC(10) | Online Training Tools for the Multi-Family Housing Industry | |||||||||||||
Prime Plus 5.25% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—August 15, 2019)(9) | 1,215 | 1,206 | 1,215 | |||||||||||
LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.53%, Secured Debt (Maturity—August 15, 2019)(9) | 11,465 | 11,407 | 11,465 | |||||||||||
| | | | | | | | | | | | | | | |
| 12,613 | 12,680 | |||||||||||||
Great Circle Family Foods, LLC(10) | Quick Service Restaurant Franchise | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.31%, Secured Debt (Maturity—October 28, 2019)(9) | 7,320 | 7,283 | 7,320 | |||||||||||
Grupo Hima San Pablo, Inc.(11) | Tertiary Care Hospitals | |||||||||||||
LIBOR Plus 7.00% (Floor 1.50%), Current Coupon 8.50%, Secured Debt (Maturity—January 31, 2018)(9) | 4,767 | 4,759 | 3,551 | |||||||||||
13.75% Secured Debt (Maturity—July 31, 2018) | 2,055 | 2,034 | 205 | |||||||||||
| | | | | | | | | | | | | | | |
| 6,793 | 3,756 | |||||||||||||
GST Autoleather, Inc.(11) | Automotive Leather Manufacturer | |||||||||||||
LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.65%, Secured Debt (Maturity—July 10, 2020)(9) | 19,409 | 18,909 | 15,042 | |||||||||||
Guitar Center, Inc.(11) | Musical Instruments Retailer | |||||||||||||
6.5% Secured Debt (Maturity—April 15, 2019) | 16,625 | 15,902 | 15,087 | |||||||||||
Hojeij Branded Foods, LLC(10) | Multi-Airport, Multi-Concept Restaurant Operator | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.30%, Secured Debt (Maturity—July 20, 2022)(9) | 12,000 | 11,882 | 11,925 | |||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
NNE Partners, LLC | (10) | March 2, 2017 | Oil & Gas Exploration & Production | | | | | | | | | | | |
| | | | Secured Debt | (19) | | 9.38% (4.88% Cash, 4.50% PIK) (4.50% PIK + L+4.75%) | 12/31/2023 | | 24,219 | | 24,127 | | 22,432 |
| | | | | | | | | | | | | | |
Novetta Solutions, LLC | (11) | June 21, 2017 | Provider of Advanced Analytics Solutions for Defense Agencies | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.00% (L+5.00%, Floor 1.00%) | 10/17/2022 | | 22,791 | | 22,583 | | 22,819 |
| | | | Secured Debt | (9) | | 9.50% (L+8.50%, Floor 1.00%) | 10/16/2023 | | 880 | | 880 | | 882 |
| | | | | | | | | | | | 23,463 | | 23,701 |
NTM Acquisition Corp. | (11) | July 12, 2016 | Provider of B2B Travel Information Content | | | | | | | | | | | |
| | | | Secured Debt | (9) (19) | | 8.25% (7.25% Cash, 1.00% PIK) (1.00%PIK + L+6.25%, Floor 1.00%) | 6/7/2024 | | 4,682 | | 4,682 | | 4,565 |
| | | | | | | | | | | | | | |
NWN Corporation | (10) | May 7, 2021 | Value Added Reseller and Provider of Managed Services to a Diverse Set of Industries | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.50% (L+6.50%, Floor 1.00%) | 5/7/2026 | | 41,242 | | 40,249 | | 40,249 |
| | | | | | | | | | | | | | |
Ospemifene Royalty Sub LLC | (10) | July 8, 2013 | Estrogen-Deficiency Drug Manufacturer and Distributor | | | | | | | | | | | |
| | | | Secured Debt | (14) | | 11.50% | 11/15/2026 | | 4,714 | | 4,714 | | 135 |
| | | | | | | | | | | | | | |
PaySimple, Inc. | (10) | September 9, 2019 | Leading Technology Services Commerce Platform | | | | | | | | | | | |
| | | | Secured Debt | | | 5.61% (L+5.50%) | 8/23/2025 | | 27,740 | | 27,525 | | 27,601 |
| | | | | | | | | | | | | | |
Project Eagle Holdings, LLC | (10) | July 6, 2020 | Provider of Secure Business Collaboration Software | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.25% (L+8.25%, Floor 1.00%) | 7/6/2026 | | 14,888 | | 14,536 | | 14,861 |
| | | | | | | | | | | | | | |
PT Network, LLC | (10) | November 1, 2013 | Provider of Outpatient Physical Therapy and Sports Medicine Services | | | | | | | | | | | |
| | | | Secured Debt | (9) (19) | | 8.50% (6.50% Cash, 2.00% PIK) (2.00% PIK + L+5.50%, Floor 1.00%) | 11/30/2023 | | 8,645 | | 8,645 | | 8,645 |
| | | | | | | | | | | | | | |
RA Outdoors LLC | (10) | April 8, 2021 | Software Solutions Provider for Outdoor Activity Management | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.75% (L+6.75%, Floor 1.00%) | 4/8/2026 | | 19,422 | | 19,224 | | 19,224 |
| | | | | | | | | | | | | | |
Research Now Group, Inc. and Survey Sampling International, LLC | (11) | December 31, 2017 | Provider of Outsourced Online Surveying | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.50% (L+5.50%, Floor 1.00%) | 12/20/2024 | | 20,229 | | 19,843 | | 20,043 |
| | | | | | | | | | | | | | |
24
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Hoover Group, Inc.(10)(13) | Provider of Storage Tanks and Related Products to the Energy and Petrochemical Markets | |||||||||||||
LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.48%, Secured Debt (Maturity—January 28, 2021)(9) | 8,481 | 7,977 | 7,803 | |||||||||||
Hostway Corporation(11) | Managed Services and Hosting Provider | |||||||||||||
LIBOR Plus 6.75% (Floor 1.25%), Current Coupon 8.08%, Secured Debt (Maturity—December 13, 2019)(9) | 20,150 | 19,752 | 19,621 | |||||||||||
LIBOR Plus 6.75% (Floor 1.25%), Current Coupon 8.08%, Secured Debt (Maturity—December 13, 2018)(9) | 2,433 | 2,329 | 2,293 | |||||||||||
| | | | | | | | | | | | | | | |
| 22,081 | 21,914 | |||||||||||||
Hunter Defense Technologies, Inc.(11) | Provider of Military and Commercial Shelters and Systems | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.31%, Secured Debt (Maturity—August 5, 2019)(9) | 16,381 | 15,985 | 16,258 | |||||||||||
Hydrofarm Holdings LLC(10) | Wholesaler of Horticultural Products | |||||||||||||
LIBOR Plus 7.00%, Current Coupon 8.24%, Secured Debt (Maturity—May 12, 2022) | 6,750 | 6,625 | 6,625 | |||||||||||
iEnergizer Limited(11)(13)(21) | Provider of Business Outsourcing Solutions | |||||||||||||
LIBOR Plus 6.00% (Floor 1.25%), Current Coupon 7.25%, Secured Debt (Maturity—May 1, 2019)(9) | 11,589 | 11,298 | 11,560 | |||||||||||
Implus Footcare, LLC(10) | Provider of Footwear and Related Accessories | |||||||||||||
LIBOR Plus 6.75% (Floor 1.00%), Current Coupon 8.08%, Secured Debt (Maturity—September 15, 2021)(9) | 19,372 | 19,101 | 19,101 | |||||||||||
Indivior Finance LLC(11)(13) | Specialty Pharmaceutical Company Treating Opioid Dependence | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.32%, Secured Debt (Maturity—December 19, 2019)(9) | 3,178 | 3,057 | 3,206 | |||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
RM Bidder, LLC | (10) | November 12, 2015 | Scripted and Unscripted TV and Digital Programming Provider | | | | | | | | | | | |
| | | | Member Units | | 2,779 | | | | | | 46 | | 34 |
| | | | Warrants | (26) | 187,161 | | 10/20/2025 | | | | 425 | | - |
| | | | | | | | | | | | 471 | | 34 |
RTIC Subsidiary Holdings, LLC | (10) | September 1, 2020 | Direct-To-Consumer eCommerce Provider of Outdoor Products | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.00% (L+7.75%, Floor 1.25%) | 9/1/2025 | | 17,729 | | 17,510 | | 17,700 |
| | | | | | | | | | | | | | |
Rug Doctor, LLC. | (10) | June 30, 2021 | Carpet Cleaning Products and Machinery | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.25% (L+5.25%, Floor 1.00%) | 5/16/2022 | | 9,850 | | 9,850 | | 9,850 |
| | | | | | | | | | | | | | |
SAFETY Investment Holdings, LLC | | April 29, 2016 | Provider of Intelligent Driver Record Monitoring Software and Services | | | | | | | | | | | |
| | | | Member Units | | 2,000,000 | | | | | | 2,000 | | 3,000 |
| | | | | | | | | | | | | | |
Salient Partners L.P. | (11) | June 25, 2015 | Provider of Asset Management Services | | | | | | | | | | | |
| | | | Secured Debt | (9) (14) | | 7.00% (L+6.00%, Floor 1.00%) | 8/31/2021 | | 6,251 | | 6,246 | | 2,607 |
| | | | | | | | | | | | | | |
Savers, Inc. | (11) | May 14, 2021 | For-Profit Thrift Retailer | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.50% (L+5.75%, Floor 0.75%) | 4/26/2028 | | 12,900 | | 12,773 | | 13,051 |
| | | | | | | | | | | | | | |
Staples Canada ULC | (10) (13) (21) | September 14, 2017 | Office Supplies Retailer | | | | | | | | | | | |
| | | | Secured Debt | (9) (22) | | 8.00% (L+7.00%, Floor 1.00%) | 9/12/2024 | | 17,411 | | 17,305 | | 17,282 |
| | | | | | | | | | | | | | |
Student Resource Center, LLC | (10) | June 25, 2021 | Higher Education Services | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.00% (L+8.00%, Floor 1.00%) | 6/25/2026 | | 11,250 | | 11,011 | | 11,011 |
| | | | | | | | | | | | | | |
Team Public Choices, LLC | (11) | October 28, 2019 | Home-Based Care Employment Service Provider | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.00% (L+5.00%, Floor 1.00%) | 12/18/2027 | | 13,466 | | 13,107 | | 13,399 |
| | | | | | | | | | | | | | |
Tectonic Financial, LLC | | May 15, 2017 | Financial Services Organization | | | | | | | | | | | |
| | | | Common Stock | (8) | 200,000 | | | | | | 2,000 | | 3,430 |
| | | | | | | | | | | | | | |
The Pasha Group | (11) | February 2, 2018 | Diversified Logistics and Transportation Provided | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.00% (L+8.00%, Floor 1.00%) | 1/26/2023 | | 10,169 | | 9,761 | | 10,093 |
| | | | | | | | | | | | | | |
Time Manufacturing Acquisition LLC | (11) | February 24, 2021 | Manufacturer and Distributor of Utility Equipment | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.00% (L+5.00%, Floor 1.00%) | 2/3/2023 | | 1,476 | | 1,473 | | 1,481 |
| | | | | | | | | | | | | | |
25
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
U.S. TelePacific Corp. | (11) | May 17, 2017 | Provider of Communications and Managed Services | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.00%, Floor 1.00%) | 5/2/2023 | | 17,088 | | 16,948 | | 15,807 |
| | | | | | | | | | | | | | |
USA DeBusk LLC | (10) | October 22, 2019 | Provider of Industrial Cleaning Services | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.75% (L+5.75%, Floor 1.00%) | 10/22/2024 | | 24,822 | | 24,485 | | 24,822 |
| | | | | | | | | | | | | | |
Veregy Consolidated, Inc. | (11) | November 9, 2020 | Energy Service Company | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.00%, Floor 1.00%) | 11/3/2027 | | 14,925 | | 14,536 | | 15,037 |
| | | | | | | | | | | | | | |
Vida Capital, Inc | (11) | October 10, 2019 | Alternative Asset Manager | | | | | | | | | | | |
| | | | Secured Debt | | | 6.10% (L+6.00%) | 10/1/2026 | | 17,344 | | 17,138 | | 16,737 |
| | | | | | | | | | | | | | |
Vistar Media, Inc. | (10) | February 17, 2017 | Operator of Digital Out-of-Home Advertising Platform | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 12.00% (L+10.00%, Floor 2.00%) | 4/3/2023 | | 4,622 | | 4,523 | | 4,622 |
| | | | Preferred Stock | | 70,207 | | | | | | 767 | | 1,280 |
| | | | Warrants | (25) | 69,675 | | 4/3/2029 | | | | - | | 1,290 |
| | | | | | | | | | | | 5,290 | | 7,192 |
YS Garments, LLC | (11) | August 22, 2018 | Designer and Provider of Branded Activewear | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.00%, Floor 1.00%) | 8/9/2024 | | 13,128 | | 13,049 | | 12,586 |
| | | | | | | | | | | | | | |
Zilliant Incorporated | | June 15, 2012 | Price Optimization and Margin Management Solutions | | | | | | | | | | | |
| | | | Preferred Stock | | 186,777 | | | | | | 154 | | 260 |
| | | | Warrants | (28) | 952,500 | | 6/15/2022 | | | | 1,071 | | 1,190 |
| | | | | | | | | | | | 1,225 | | 1,450 |
Short-term portfolio investments | (34) (35) | | | | | | | | | | | | | |
| | | | | | | | | | | | 57,244 | | 57,285 |
| | | | | | | | | | | | | | |
Subtotal Non-Control/Non-Affiliate Investments (85.7% of net assets at fair value) | | | | | | | | | | | $ | 1,421,592 | $ | 1,375,001 |
Total Portfolio Investments, June 30, 2021 (185.2% of net assets at fair value) | | | | | | | | | | | $ | 2,725,485 | $ | 2,972,270 |
| |
(1) | All investments are Lower Middle Market portfolio investments, unless otherwise noted. See Note C for a description of Lower Middle Market portfolio investments. All of the Company’s investments, unless otherwise noted, are encumbered either as security for the Company’s Credit Facility or in support of the SBA-guaranteed debentures issued by the Funds. |
(2) | Debt investments are income producing, unless otherwise noted. Equity and warrants are non-income producing, unless otherwise noted. |
(3) | See Note C and Schedule 12-14 for a summary of geographic location of portfolio companies. |
(4) | Principal is net of repayments. Cost is net of repayments and accumulated unearned income. |
(5) | Control investments are defined by the 1940 Act, as investments in which more than 25% of the voting securities are owned or where the ability to nominate greater than 50% of the board representation is maintained. |
(6) | Affiliate investments are defined by the 1940 Act as investments in which between 5% and 25% (inclusive) of the voting securities are owned and the investments are not classified as Control investments. |
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Industrial Services Acquisition, LLC(10) | Industrial Cleaning Services | |||||||||||||
11.25% Current / 0.75% PIK Unsecured Debt (Maturity—December 17, 2022)(19) | 4,544 | 4,467 | 4,544 | |||||||||||
Member Units (Industrial Services Investments, LLC) (900,000 units) | 900 | 810 | ||||||||||||
| | | | | | | | | | | | | | | |
| 5,367 | 5,354 | |||||||||||||
Inn of the Mountain Gods Resort and Casino(11) | Hotel & Casino Owner & Operator | |||||||||||||
9.25% Secured Debt (Maturity—November 30, 2020) | 6,249 | 5,976 | 5,624 | |||||||||||
Intertain Group Limited(11)(13)(21) | Business-to-Consumer Online Gaming Operator | |||||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.74%, Secured Debt (Maturity—April 8, 2022)(9) | 4,049 | 4,002 | 4,095 | |||||||||||
iPayment, Inc.(11) | Provider of Merchant Acquisition | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.31%, Secured Debt (Maturity—April 11, 2023)(9) | 12,000 | 11,887 | 12,150 | |||||||||||
iQor US Inc.(11) | Business Process Outsourcing Services Provider | |||||||||||||
LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.34%, Secured Debt (Maturity—April 1, 2021)(9) | 995 | 985 | 988 | |||||||||||
irth Solutions, LLC | Provider of Damage Prevention Information Technology Services | |||||||||||||
Member Units (27,893 units) | 1,441 | 1,920 | ||||||||||||
Jacent Strategic Merchandising, LLC(10) | General Merchandise Distribution | |||||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.82%, Secured Debt (Maturity—September 16, 2020)(9) | 11,239 | 11,178 | 11,239 | |||||||||||
Jackmont Hospitality, Inc.(10) | Franchisee of Casual Dining Restaurants | |||||||||||||
LIBOR Plus 6.75% (Floor 1.00%), Current Coupon 7.99%, Secured Debt (Maturity—May 26, 2021)(9) | 4,390 | 4,378 | 4,390 | |||||||||||
Jacuzzi Brands LLC(11) | Manufacturer of Bath and Spa Products | |||||||||||||
LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.33%, Secured Debt (Maturity—June 28, 2023)(9) | 3,975 | 3,898 | 3,955 | |||||||||||
26
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Joerns Healthcare, LLC(11) | Manufacturer and Distributor of Health Care Equipment & Supplies | |||||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.82% Secured Debt (Maturity—May 9, 2020)(9) | 13,387 | 13,290 | 12,556 | |||||||||||
Keypoint Government Solutions, Inc.(10) | Provider of Pre-Employment Screening Services | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.30%, Secured Debt (Maturity—April 18, 2024)(9) | 12,344 | 12,228 | 12,228 | |||||||||||
Larchmont Resources, LLC(11) | Oil & Gas Exploration & Production | |||||||||||||
LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.32%, PIK Secured Debt (Maturity—August 7, 2020)(9)(19) | 2,377 | 2,377 | 2,329 | |||||||||||
Member Units (Larchmont Intermediate Holdco, LLC) (2,828 units) | 353 | 976 | ||||||||||||
| | | | | | | | | | | | | | | |
| 2,730 | 3,305 | |||||||||||||
LifeMiles Ltd.(11)(13)(21) | Operator of Latin American Coalition Loyalty Program | |||||||||||||
LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.82%, Secured Debt (Maturity—August 18, 2022)(9) | 2,500 | 2,475 | 2,525 | |||||||||||
LKCM Headwater Investments I, L.P.(12)(13) | Investment Partnership | |||||||||||||
LP Interests (Fully diluted 2.3%) | 2,500 | 3,967 | ||||||||||||
Logix Acquisition Company, LLC(10) | Competitive Local Exchange Carrier | |||||||||||||
LIBOR Plus 8.28% (Floor 1.00%), Current Coupon 9.54%, Secured Debt (Maturity—June 24, 2021)(9)(23) | 8,358 | 8,241 | 8,358 | |||||||||||
Looking Glass Investments, LLC(12)(13) | Specialty Consumer Finance | |||||||||||||
Member Units (2.5 units) | 125 | 125 | ||||||||||||
Member Units (LGI Predictive Analytics LLC) (190,712 units)(8) | 116 | 128 | ||||||||||||
| | | | | | | | | | | | | | | |
| 241 | 253 | |||||||||||||
(7) | Non-Control/Non-Affiliate investments are defined by the 1940 Act as investments that are neither Control investments nor Affiliate investments. |
(8) | Income producing through dividends or distributions. |
(9) | Index based floating interest rate is subject to contractual minimum interest rate. A majority of the variable rate loans in the Company’s investment portfolio bear interest at a rate that may be determined by reference to either LIBOR or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate), which typically resets semi-annually, quarterly, or monthly at the borrower’s option. The borrower may also elect to have multiple interest reset periods for each loan. For each such loan, the Company has provided the weighted average annual stated interest rate in effect at June 30, 2021. As noted in this schedule, 70% of the loans (based on the par amount) contain LIBOR floors which range between 0.50% and 2.00%, with a weighted-average LIBOR floor of approximately 1.09%. |
(10) | Private Loan portfolio investment. See Note C for a description of Private Loan portfolio investments. |
(11) | Middle Market portfolio investment. See Note C for a description of Middle Market portfolio investments. |
(12) | Other Portfolio investment. See Note C for a description of Other Portfolio investments. |
(13) | Investment is not a qualifying asset as defined under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. |
(14) | Non-accrual and non-income producing investment. |
(15) | All of the Company’s portfolio investments are generally subject to restrictions on resale as “restricted securities.” |
(16) | External Investment Manager. Investment is not encumbered as security for the Company's Credit Facility or in support of the SBA-guaranteed debentures issued by the Funds. |
(17) | Maturity date is under on-going negotiations with the portfolio company and other lenders, if applicable. |
(18) | Investment fair value was determined using significant unobservable inputs, unless otherwise noted. See Note C for further discussion. |
(19) | PIK interest income and cumulative dividend income represent income not paid currently in cash. |
(20) | All portfolio company headquarters are based in the United States, unless otherwise noted. |
(21) | Portfolio company headquarters are located outside of the United States. |
(22) | In connection with the Company's debt investment in Staples Canada ULC and in an attempt to mitigate any potential adverse change in foreign exchange rates during the term of the Company's investment, the Company maintains a forward foreign currency contract with Cadence Bank to lend $21.4 million Canadian Dollars and receive $16.4 million U.S. Dollars with a settlement date of September 14, 2021. The unrealized depreciation on the forward foreign currency contract is $1.0 million as of June 30, 2021. |
(23) | The Company has entered into an intercreditor agreement that entitles the Company to the "last out" tranche of the first lien secured loans, whereby the "first out" tranche will receive priority as to the "last out" tranche with respect to payments of principal, interest, and any other amounts due thereunder. Therefore, the Company receives a higher interest rate than the contractual stated interest rate of LIBOR plus 7.25% (Floor 1.25%) per the credit agreement and the Consolidated Schedule of Investments above reflects such higher rate. |
(24) | Investment date represents the date of initial investment in the portfolio company. |
(25) | Warrants are presented in equivalent shares with a strike price of $10.92 per share. |
(26) | Warrants are presented in equivalent units with a strike price of $14.28 per unit. |
(27) | Warrants are presented in equivalent shares/units with a strike price of $0.01 per share/unit. |
(28) | Warrants are presented in equivalent shares with a strike price of $0.001 per share. |
(29) | Warrants are presented in equivalent units with a strike price of $1.50 per unit. |
(30) | Shares/Units represent ownership in an underlying Real Estate or HoldCo entity. |
(31) | Investment is not unitized. Presentation is made in percent of fully diluted ownership unless otherwise indicated. |
(32) | Portfolio company is in a bankruptcy process and, as such, the maturity date of our debt investment in this portfolio company will not be finally determined until such process is complete. As noted in footnote (14), our debt investment in this portfolio company is on non-accrual status. |
27
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
SeptemberJune 30, 20172021
(dollars in thousands)
(Unaudited)
(33) | The Company has entered into an intercreditor agreement that entitles the Company to the "last out" tranche of the first lien secured loans, whereby the "first out" tranche will receive priority as to the "last out" tranche with respect to payments of principal, interest, and any other amounts due thereunder. Therefore, the Company receives a higher interest rate than the contractual stated interest rate of LIBOR plus 7.50% (Floor 1.00%) per the credit agreement and the Consolidated Schedule of Investments above reflects such higher rate. |
(34) | Short-term portfolio investments. See Note C for a description of short-term portfolio investments. |
(35) | Short-term portfolio investments bear interest at index based floating interest rates which range from LIBOR plus 2.75% to LIBOR plus 4.75%, with LIBOR floors which range from 0% to 0.75% (with a weighted average LIBOR floor of approximately 0.14%), and with resulting interest rates which range from of 2.83% to 4.83% as of June 30, 2021. |
28
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
LSF9 Atlantis Holdings, LLC(11) | Provider of Wireless Telecommunications Carrier Services | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.24%, Secured Debt (Maturity—May 1, 2023)(9) | 8,000 | 7,904 | 8,048 | |||||||||||
Lulu's Fashion Lounge, LLC(10) | Fast Fashion E-Commerce Retailer | |||||||||||||
LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.24%, Secured Debt (Maturity—August 28, 2022)(9) | 13,636 | 13,233 | 13,534 | |||||||||||
Messenger, LLC(10) | Supplier of Specialty Stationery and Related Products to the Funeral Industry | |||||||||||||
LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.49%, Secured Debt (Maturity—September 9, 2020)(9) | 17,803 | 17,714 | 17,803 | |||||||||||
NBG Acquisition Inc(11) | Wholesaler of Home Décor Products | |||||||||||||
LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.91%, Secured Debt (Maturity—April 26, 2024)(9) | 4,430 | 4,362 | 4,408 | |||||||||||
Minute Key, Inc. | Operator of Automated Key Duplication Kiosks | |||||||||||||
12% Secured Debt (Maturity—September 19, 2019) | 16,582 | 16,350 | 16,582 | |||||||||||
Warrants (1,437,409 equivalent shares; Expiration—May 20, 2025; Strike price—$0.01 per share) | 280 | 1,050 | ||||||||||||
| | | | | | | | | | | | | | | |
| 16,630 | 17,632 | |||||||||||||
New Media Holdings II LLC(11)(13) | Local Newspaper Operator | |||||||||||||
LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.49%, Secured Debt (Maturity—July 14, 2022)(9) | 17,759 | 17,371 | 17,787 | |||||||||||
NNE Partners, LLC(10) | Oil & Gas Exploration & Production | |||||||||||||
LIBOR Plus 8.00%, Current Coupon 9.31%, Secured Debt (Maturity—March 2, 2022) | 10,500 | 10,404 | 10,404 | |||||||||||
North American Lifting Holdings, Inc.(11) | Crane Service Provider | |||||||||||||
LIBOR Plus 4.50% (Floor 1.00%), Current Coupon 5.83%, Secured Debt (Maturity—November 27, 2020)(9) | 7,765 | 6,871 | 7,163 | |||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments
December 31, 2020
(dollars in thousands)
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
| | | | | | | | | | | | | | |
Control Investments (5) | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
ASC Interests, LLC | | August 1, 2013 | Recreational and Educational Shooting Facility | | | | | | | | | | | |
| | | | Secured Debt | | | 13.00% | 7/31/2022 | $ | 1,750 | $ | 1,715 | $ | 1,715 |
| | | | Member Units | | 1,500 | | | | | | 1,500 | | 1,120 |
| | | | | | | | | | | | 3,215 | | 2,835 |
| | | | | | | | | | | | | | |
Analytical Systems Keco, LLC | | August 16, 2019 | Manufacturer of Liquid and Gas Analyzers | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 12.00% (L+10.00%, Floor 2.00%) | 8/16/2024 | | 5,155 | | 4,874 | | 4,874 |
| | | | Preferred Member Units | | 3,200 | | | | | | 3,200 | | 3,200 |
| | | | Warrants | (27) | 420 | | 8/16/2029 | | | | 316 | ��� | 10 |
| | | | | | | | | | | | 8,390 | | 8,084 |
| | | | | | | | | | | | | | |
ATS Workholding, LLC | (10) | March 10, 2014 | Manufacturer of Machine Cutting Tools and Accessories | | | | | | | | | | | |
| | | | Secured Debt | (14) | | 5.00% | 11/16/2021 | | 4,982 | | 4,824 | | 3,347 |
| | | | Preferred Member Units | | 3,725,862 | | | | | | 3,726 | | - |
| | | | | | | | | | | | 8,550 | | 3,347 |
| | | | | | | | | | | | | | |
Project BarFly, LLC | (10) | August 31, 2015 | Casual Restaurant Group | | | | | | | | | | | |
| | | | Secured Debt | | | 7.00% | 10/31/2024 | | 343 | | 343 | | 343 |
| | | | Member Units | | 37 | | | | | | 1,584 | | 1,584 |
| | | | | | | | | | | | 1,927 | | 1,927 |
| | | | | | | | | | | | | | |
Bolder Panther Group, LLC | | December 31, 2020 | Consumer Goods and Fuel Retailer | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 10.50% (L+9.00%, Floor 1.50%) | 12/31/2025 | | 27,500 | | 27,225 | | 27,225 |
| | | | Class A Preferred Member Units | (30) | | 14.00% | | | | | 10,194 | | 10,194 |
| | | | Class B Preferred Member Units | (30) | 140,000 | 8.00% | | | | | 14,000 | | 14,000 |
| | | | | | | | | | | | 51,419 | | 51,419 |
| | | | | | | | | | | | | | |
Bond-Coat, Inc. | | December 28, 2012 | Casing and Tubing Coating Services | | | | | | | | | | | |
| | | | Common Stock | | 57,508 | | | | | | 6,350 | | 2,040 |
| | | | | | | | | | | | | | |
Brewer Crane Holdings, LLC | | January 9, 2018 | Provider of Crane Rental and Operating Services | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 11.00% (L+10.00%, Floor 1.00%) | 1/9/2023 | | 8,556 | | 8,513 | | 8,513 |
| | | | Preferred Member Units | (8) | 2,950 | | | | | | 4,280 | | 5,850 |
| | | | | | | | | | | | 12,793 | | 14,363 |
| | | | | | | | | | | | | | |
Bridge Capital Solutions Corporation | | April 18, 2012 | Financial Services and Cash Flow Solutions Provider | | | | | | | | | | | |
| | | | Secured Debt | | | 13.00% | 12/11/2024 | | 8,813 | | 8,403 | | 8,403 |
| | | | Warrants | (27) | 82 | | 7/25/2026 | | | | 2,132 | | 3,220 |
| | | | Secured Debt | (30) | | 13.00% | 12/11/2024 | | 1,000 | | 998 | | 998 |
| | | | Preferred Member Units | (8) (30) | 17,742 | | | | | | 1,000 | | 1,000 |
| | | | | | | | | | | | 12,533 | | 13,621 |
| | | | | | | | | | | | | | |
29
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
September 30, 2017December 31, 2020
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Novetta Solutions, LLC(11) | Provider of Advanced Analytics Solutions for Defense Agencies | |||||||||||||
LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.34%, Secured Debt (Maturity—October 17, 2022)(9) | 9,706 | 9,359 | 9,439 | |||||||||||
NTM Acquisition Corp.(11) | Provider of B2B Travel Information Content | |||||||||||||
LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.55%, Secured Debt (Maturity—June 7, 2022)(9) | 6,268 | 6,202 | 6,236 | |||||||||||
Ospemifene Royalty Sub LLC (QuatRx)(10) | Estrogen-Deficiency Drug Manufacturer and Distributor | |||||||||||||
11.5% Secured Debt (Maturity—November 15, 2026)(14) | 5,071 | 5,071 | 1,391 | |||||||||||
P.F. Chang's China Bistro, Inc.(11) | Casual Restaurant Group | |||||||||||||
LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.24%, Secured Debt (Maturity—September 1, 2022)(9) | 5,000 | 4,852 | 4,800 | |||||||||||
Pardus Oil and Gas, LLC(11) | Oil & Gas Exploration & Production | |||||||||||||
13% PIK Secured Debt (Maturity—November 12, 2021)(19) | 2,053 | 2,053 | 1,351 | |||||||||||
5% PIK Secured Debt (Maturity—May 13, 2022)(19) | 1,029 | 1,029 | 132 | |||||||||||
Member Units (2,472 units) | 2,472 | — | ||||||||||||
| | | | | | | | | | | | | | | |
| 5,554 | 1,483 | |||||||||||||
Paris Presents Incorporated(11) | Branded Cosmetic and Bath Accessories | |||||||||||||
LIBOR Plus 8.75% (Floor 1.00%), Current Coupon 9.99%, Secured Debt (Maturity—December 31, 2021)(9) | 4,500 | 4,469 | 4,455 | |||||||||||
Parq Holdings Limited Partnership(11)(13)(21) | Hotel & Casino Operator | |||||||||||||
LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.73%, Secured Debt (Maturity—December 17, 2020)(9) | 7,500 | 7,411 | 7,481 | |||||||||||
Permian Holdco 2, Inc.(11) | Storage Tank Manufacturer | |||||||||||||
14% PIK Unsecured Debt (Maturity—October 15, 2021)(19) | 219 | 219 | 219 | |||||||||||
Preferred Stock (Permian Holdco 1, Inc.) (154,558 units) | 799 | 799 | ||||||||||||
Common Stock (Permian Holdco 1, Inc.) (154,558 units) | — | — | ||||||||||||
| | | | | | | | | | | | | | | |
| 1,018 | 1,018 | |||||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
Café Brazil, LLC | | April 20, 2004 | Casual Restaurant Group | | | | | | | | | | | |
| | | | Member Units | (8) | 1,233 | | | | | | 1,742 | | 2,030 |
| | | | | | | | | | | | | | |
California Splendor Holdings LLC | | March 30, 2018 | Processor of Frozen Fruits | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.00% (L+8.00%, Floor 1.00%) | 3/30/2023 | | 8,100 | | 8,014 | | 8,043 |
| | | | Secured Debt | (9) | | 11.00% (L+10.00%, Floor 1.00%) | 3/30/2023 | | 28,000 | | 27,854 | | 27,789 |
| | | | Preferred Member Units | (8) | 6,725 | | | | | | 8,255 | | 8,255 |
| | | | Preferred Member Units | (8) | 6,157 | | | | | | 10,775 | | 6,241 |
| | | | | | | | | | | | 54,898 | | 50,328 |
| | | | | | | | | | | | | | |
CBT Nuggets, LLC | | June 1, 2006 | Produces and Sells IT Training Certification Videos | | | | | | | | | | | |
| | | | Member Units | (8) | 416 | | | | | | 1,300 | | 46,080 |
| | | | | | | | | | | | | | |
Centre Technologies Holdings, LLC | | January 4, 2019 | Provider of IT Hardware Services and Software Solutions | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 12.00% (L+10.00%, Floor 2.00%) | 1/4/2024 | | 11,628 | | 11,549 | | 11,549 |
| | | | Preferred Member Units | | 12,696 | | | | | | 5,840 | | 6,160 |
| | | | | | | | | | | | 17,389 | | 17,709 |
| | | | | | | | | | | | | | |
Chamberlin Holding LLC | | February 26, 2018 | Roofing and Waterproofing Specialty Contractor | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.00% (L+8.00%, Floor 1.00%) | 2/26/2023 | | 15,212 | | 15,136 | | 15,212 |
| | | | Member Units | (8) | 4,347 | | | | | | 11,440 | | 28,070 |
| | | | Member Units | (8) (30) | 1,047,146 | | | | | | 1,322 | | 1,270 |
| | | | | | | | | | | | 27,898 | | 44,552 |
| | | | | | | | | | | | | | |
Charps, LLC | | February 3, 2017 | Pipeline Maintenance and Construction | | | | | | | | | | | |
| | | | Unsecured Debt | (19) | | 10.00% (8.67% Cash, 1.33% PIK) | 1/31/2024 | | 9,388 | | 7,641 | | 8,475 |
| | | | Secured Debt | | | 15.00% | 6/5/2022 | | 669 | | 669 | | 669 |
| | | | Preferred Member Units | (8) | 1,600 | | | | | | 400 | | 10,520 |
| | | | | | | | | | | | 8,710 | | 19,664 |
| | | | | | | | | | | | | | |
Clad-Rex Steel, LLC | | December 20, 2016 | Specialty Manufacturer of Vinyl-Clad Metal | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 10.50% (L+9.50%, Floor 1.00%) | 12/20/2021 | | 10,880 | | 10,853 | | 10,853 |
| | | | Member Units | (8) | 717 | | | | | | 7,280 | | 8,610 |
| | | | Secured Debt | (30) | | 10.00% | 12/20/2036 | | 1,111 | | 1,100 | | 1,100 |
| | | | Member Units | (30) | 800 | | | | | | 210 | | 530 |
| | | | | | | | | | | | 19,443 | | 21,093 |
| | | | | | | | | | | | | | |
CMS Minerals Investments | | January 30, 2015 | Oil & Gas Exploration & Production | | | | | | | | | | | |
| | | | Member Units | (30) | 100 | | | | | | 2,179 | | 1,624 |
| | | | | | | | | | | | | | |
30
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
September 30, 2017December 31, 2020
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Pernix Therapeutics Holdings, Inc.(10) | Pharmaceutical Royalty | |||||||||||||
12% Secured Debt (Maturity—August 1, 2020) | 3,129 | 3,129 | 1,971 | |||||||||||
Point.360(10) | Fully Integrated Provider of Digital Media Services | |||||||||||||
Warrants (65,463 equivalent shares; Expiration—July 7, 2020; Strike price—$0.75 per share) | 69 | — | ||||||||||||
Common Stock (163,658 shares) | 273 | 9 | ||||||||||||
| | | | | | | | | | | | | | | |
| 342 | 9 | |||||||||||||
PPC/SHIFT LLC(10) | Provider of Digital Solutions to Automotive Industry | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.33%, Secured Debt (Maturity—December 22, 2021)(9) | 6,869 | 6,741 | 6,869 | |||||||||||
Prowler Acquisition Corp.(11) | Specialty Distributor to the Energy Sector | |||||||||||||
LIBOR Plus 4.50% (Floor 1.00%), Current Coupon 5.83%, Secured Debt (Maturity—January 28, 2020)(9) | 11,170 | 9,607 | 9,941 | |||||||||||
PT Network, LLC(10) | Provider of Outpatient Physical Therapy and Sports Medicine Services | |||||||||||||
PRIME Plus 5.50% (Floor 2.00%), Current Coupon 9.75%, Secured Debt (Maturity—November 30, 2021)(9) | 634 | 612 | 634 | |||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.82%, Secured Debt (Maturity—November 30, 2021)(9) | 17,578 | 17,388 | 17,578 | |||||||||||
| | | | | | | | | | | | | | | |
| 18,000 | 18,212 | |||||||||||||
PSC Industrial Holdings Corp(11) | Diversified Industrial Service Provider | |||||||||||||
LIBOR Plus 4.75% (Floor 1.00%), Current Coupon 5.99%, Secured Debt (Maturity—December 5, 2020)(9) | 5,596 | 5,275 | 5,587 | |||||||||||
QBS Parent, Inc.(11) | Provider of Software and Services to the Oil & Gas Industry | |||||||||||||
LIBOR Plus 4.75% (Floor 1.00%), Current Coupon 6.06%, Secured Debt (Maturity—August 7, 2021)(9) | 14,272 | 14,104 | 13,916 | |||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
Cody Pools, Inc. | | March 6, 2020 | Designer of Residential and Commercial Pools | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 12.25% (L+10.50%, Floor 1.75%) | 3/6/2025 | | 14,216 | | 14,092 | | 14,216 |
| | | | Preferred Member Units | | 587 | | | | | | 8,317 | | 14,940 |
| | | | | | | | | | | | 22,409 | | 29,156 |
| | | | | | | | | | | | | | |
CompareNetworks Topco, LLC | | January 29, 2019 | Internet Publishing and Web Search Portals | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 12.00% (L+11.00%, Floor 1.00%) | 1/29/2024 | | 7,954 | | 7,910 | | 7,953 |
| | | | Preferred Member Units | (8) | 1,975 | | | | | | 1,975 | | 6,780 |
| | | | | | | | | | | | 9,885 | | 14,733 |
| | | | | | | | | | | | | | |
Copper Trail Fund Investments | (12) (13) | July 17, 2017 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests (CTMH, LP) | (31) | 38.8% | | | | | | 747 | | 747 |
| | | | | | | | | | | | | | |
Datacom, LLC | | May 30, 2014 | Technology and Telecommunications Provider | | | | | | | | | | | |
| | | | Secured Debt | (14) | | 8.00% | 5/31/2021 | | 1,800 | | 1,800 | | 1,615 |
| | | | Secured Debt | (14) (19) | | 10.50% PIK | 5/31/2021 | | 12,507 | | 12,475 | | 10,531 |
| | | | Class A Preferred Member Units | | - | | | | | | 1,294 | | - |
| | | | Class B Preferred Member Units | | 6,453 | | | | | | 6,030 | | - |
| | | | | | | | | | | | 21,599 | | 12,146 |
| | | | | | | | | | | | | | |
Digital Products Holdings LLC | | April 1, 2018 | Designer and Distributor of Consumer Electronics | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 11.00% (L+10.00%, Floor 1.00%) | 4/1/2023 | | 18,173 | | 18,077 | | 18,077 |
| | | | Preferred Member Units | (8) | 3,857 | | | | | | 9,501 | | 9,835 |
| | | | | | | | | | | | 27,578 | | 27,912 |
| | | | | | | | | | | | | | |
Direct Marketing Solutions, Inc. | | February 13, 2018 | Provider of Omni-Channel Direct Marketing Services | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 12.00% (L+11.00%, Floor 1.00%) | 2/13/2023 | | 15,090 | | 15,007 | | 15,007 |
| | | | Preferred Stock | | 8,400 | | | | | | 8,400 | | 19,380 |
| | | | | | | | | | | | 23,407 | | 34,387 |
| | | | | | | | | | | | | | |
Gamber-Johnson Holdings, LLC ("GJH") | | June 24, 2016 | Manufacturer of Ruggedized Computer Mounting Systems | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.00% (L+7.00%, Floor 2.00%) | 6/24/2021 | | 19,838 | | 19,807 | | 19,838 |
| | | | Member Units | (8) | 8,619 | | | | | | 14,844 | | 52,490 |
| | | | | | | | | | | | 34,651 | | 72,328 |
| | | | | | | | | | | | | | |
Garreco, LLC | | July 15, 2013 | Manufacturer and Supplier of Dental Products | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.00% (L+8.00%, Floor 1.00%, Ceiling 1.50%) | 1/31/2021 | | 4,519 | | 4,519 | | 4,519 |
| | | | Member Units | | 1,200 | | | | | | 1,200 | | 1,410 |
| | | | | | | | | | | | 5,719 | | 5,929 |
31
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
September 30, 2017December 31, 2020
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Redbox Automated Retail, LLC(11) | Operator of Home Media Entertainment Kiosks | |||||||||||||
LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.74%, Secured Debt (Maturity—September 27, 2021)(9) | 10,500 | 10,224 | 10,605 | |||||||||||
Resolute Industrial, LLC(10) | HVAC Equipment Rental and Remanufacturing | |||||||||||||
LIBOR Plus 7.62% (Floor 1.00%), Current Coupon 8.95%, Secured Debt (Maturity—July 26, 2022)(9)(24) | 17,088 | 16,759 | 16,759 | |||||||||||
Member Units (601 units) | 750 | 750 | ||||||||||||
| | | | | | | | | | | | | | | |
| 17,509 | 17,509 | |||||||||||||
RGL Reservoir Operations Inc.(11)(13)(21) | Oil & Gas Equipment and Services | |||||||||||||
LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.33%, Secured Debt (Maturity—August 13, 2021)(9) | 3,880 | 3,808 | 698 | |||||||||||
RM Bidder, LLC(10) | Scripted and Unscripted TV and Digital Programming Provider | |||||||||||||
Warrants (327,532 equivalent units; Expiration—October 20, 2025; Strike price—$14.28 per unit) | 425 | — | ||||||||||||
Member Units (2,779 units) | 46 | 25 | ||||||||||||
| | | | | | | | | | | | | | | |
| 471 | 25 | |||||||||||||
SAExploration, Inc.(10)(13)(21) | Geophysical Services Provider | |||||||||||||
Common Stock (50 shares) | 65 | — | ||||||||||||
SAFETY Investment Holdings, LLC | Provider of Intelligent Driver Record Monitoring Software and Services | |||||||||||||
Member Units (2,000,000 units) | 2,000 | 1,670 | ||||||||||||
Salient Partners L.P.(11) | Provider of Asset Management Services | |||||||||||||
LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.80%, Secured Debt (Maturity—June 9, 2021)(9) | 10,369 | 10,143 | 10,058 | |||||||||||
Sigma Electric Manufacturing Corporation(10)(13) | Manufacturer and Distributor of Electrical Fittings and Parts | |||||||||||||
LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.58%, Secured Debt (Maturity—October 13, 2021)(9) | 12,438 | 12,175 | 12,437 | |||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
| | | | | | | | | | | | | | |
GRT Rubber Technologies LLC ("GRT") | | December 19, 2014 | Manufacturer of Engineered Rubber Products | | | | | | | | | | | |
| | | | Secured Debt | | | 7.15% (L+7.00%) | 12/31/2023 | | 16,775 | | 16,775 | | 16,775 |
| | | | Member Units | (8) | 5,879 | | | | | | 13,065 | | 44,900 |
| | | | | | | | | | | | 29,840 | | 61,675 |
| | | | | | | | | | | | | | |
Gulf Manufacturing, LLC | | August 31, 2007 | Manufacturer of Specialty Fabricated Industrial Piping Products | | | | | | | | | | | |
| | | | Member Units | (8) | 438 | | | | | | 2,980 | | 4,510 |
| | | | | | | | | | | | | | |
Gulf Publishing Holdings, LLC | | April 29, 2016 | Energy Industry Focused Media and Publishing | | | | | | | | | | | |
| | | | Secured Debt | (9) (17) (19) | | 10.50% (5.25% Cash, 5.25% PIK) (L+9.50%, Floor 1.00%) | 9/30/2020 | | 250 | | 250 | | 250 |
| | | | Secured Debt | (19) | | 12.50% (6.25% Cash, 6.25% PIK) | 4/29/2021 | | 13,147 | | 13,135 | | 12,044 |
| | | | Member Units | | 3,681 | | ��� | | | | 3,681 | | - |
| | | | | | | | | | | | 17,066 | | 12,294 |
| | | | | | | | | | | | | | |
Harris Preston Fund Investments | (12) (13) | October 1, 2017 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests (2717 MH, L.P.) | (31) | 49.3% | | | | | | 2,599 | | 2,702 |
| | | | LP Interests (2717 HPP-MS, L.P.) | (31) | 49.3% | | | | | | 250 | | 250 |
| | | | | | | | | | | | 2,849 | | 2,952 |
| | | | | | | | | | | | | | |
Harrison Hydra-Gen, Ltd. | | June 4, 2010 | Manufacturer of Hydraulic Generators | | | | | | | | | | | |
| | | | Common Stock | (8) | 107,456 | | | | | | 718 | | 5,450 |
| | | | | | | | | | | | | | |
Jensen Jewelers of Idaho, LLC | | November 14, 2006 | Retail Jewelry Store | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 10.00% (Prime+6.75%, Floor 2.00%) | 11/14/2023 | | 3,400 | | 3,374 | | 3,400 |
| | | | Member Units | (8) | 627 | | | | | | 811 | | 7,620 |
| | | | | | | | | | | | 4,185 | | 11,020 |
| | | | | | | | | | | | | | |
J&J Services, Inc. | | October 31, 2019 | Provider of Dumpster and Portable Toilet Rental Services | | | | | | | | | | | |
| | | | Secured Debt | | | 11.50% | 10/31/2024 | | 12,800 | | 12,697 | | 12,800 |
| | | | Preferred Stock | | 2,814 | | | | | | 7,085 | | 12,680 |
| | | | | | | | | | | | 19,782 | | 25,480 |
| | | | | | | | | | | | | | |
KBK Industries, LLC | | January 23, 2006 | Manufacturer of Specialty Oilfield and Industrial Products | | | | | | | | | | | |
| | | | Member Units | (8) | 325 | | | | | | 783 | | 13,200 |
| | | | | | | | | | | | | | |
Kickhaefer Manufacturing Company, LLC | | October 31, 2018 | Precision Metal Parts Manufacturing | | | | | | | | | | | |
| | | | Secured Debt | | | 11.50% | 10/31/2023 | | 22,415 | | 22,269 | | 22,269 |
| | | | Member Units | | 581 | | | | | | 12,240 | | 12,240 |
| | | | Secured Debt | | | 9.00% | 10/31/2048 | | 3,948 | | 3,909 | | 3,909 |
| | | | Member Units | (8) (30) | 800 | | | | | | 992 | | 1,160 |
| | | | | | | | | | | | 39,410 | | 39,578 |
| | | | | | | | | | | | | | |
32
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
September 30, 2017December 31, 2020
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
SiTV, LLC(11) | Cable Networks Operator | |||||||||||||
10.375% Secured Debt (Maturity—July 1, 2019) | 7,304 | 4,814 | 4,948 | |||||||||||
SMART Modular Technologies, Inc.(10)(13) | Provider of Specialty Memory Solutions | |||||||||||||
LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.56%, Secured Debt (Maturity—August 8, 2022)(9) | 15,000 | 14,708 | 14,925 | |||||||||||
Sorenson Communications, Inc.(11) | Manufacturer of Communication Products for Hearing Impaired | |||||||||||||
LIBOR Plus 5.75% (Floor 2.25%), Current Coupon 8.00%, Secured Debt (Maturity—April 30, 2020)(9) | 13,268 | 13,198 | 13,359 | |||||||||||
9% Secured Debt (Maturity—October 31, 2020) | 2,666 | 2,532 | 2,600 | |||||||||||
| | | | | | | | | | | | | | | |
| 15,730 | 15,959 | |||||||||||||
Staples Canada ULC(10)(13)(21) | Office Supplies Retailer | |||||||||||||
LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.46%, Secured Debt (Maturity—September 12, 2023)(9)(22) | 20,000 | 19,604 | 19,023 | |||||||||||
Strike, LLC(11) | Pipeline Construction and Maintenance Services | |||||||||||||
LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—November 30, 2022)(9) | 9,625 | 9,363 | 9,769 | |||||||||||
LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.45%, Secured Debt (Maturity—May 30, 2019)(9) | 500 | 475 | 512 | |||||||||||
| | | | | | | | | | | | | | | |
| 9,838 | 10,281 | |||||||||||||
Subsea Global Solutions, LLC(10) | Underwater Maintenance and Repair Services | |||||||||||||
LIBOR Plus 6.00% (Floor 1.50%), Current Coupon 7.50%, Secured Debt (Maturity—March 17, 2020)(9) | 7,706 | 7,651 | 7,706 | |||||||||||
Synagro Infrastructure Company, Inc(11) | Waste Management Services | |||||||||||||
LIBOR Plus 5.25% (Floor 1.00%), Current Coupon 6.58%, Secured Debt (Maturity—August 22, 2020)(9) | 9,161 | 8,913 | 8,749 | |||||||||||
Tectonic Holdings, LLC | Financial Services Organization | |||||||||||||
Member Units (200,000 units)(8) | 2,000 | 2,000 | ||||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
Market Force Information, LLC | | July 28, 2017 | Provider of Customer Experience Management Services | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 12.00% (L+11.00%, Floor 1.00%) | 7/28/2023 | | 1,600 | | 1,600 | | 1,600 |
| | | | Secured Debt | (14) (19) | | 12.00% PIK | 7/28/2023 | | 26,079 | | 25,952 | | 13,562 |
| | | | Member Units | | 743,921 | | | | | | 16,642 | | - |
| | | | | | | | | | | | 44,194 | | 15,162 |
| | | | | | | | | | | | | | |
MH Corbin Holding LLC | | August 31, 2015 | Manufacturer and Distributor of Traffic Safety Products | | | | | | | | | | | |
| | | | Secured Debt | (19) | | 13.00% (10.00% Cash, 3.00% PIK) | 3/31/2022 | | 8,570 | | 8,527 | | 8,280 |
| | | | Preferred Member Units | | 66,000 | | | | | | 4,400 | | 2,370 |
| | | | Preferred Member Units | | 4,000 | | | | | | 6,000 | | - |
| | | | | | | | | | | | 18,927 | | 10,650 |
| | | | | | | | | | | | | | |
MSC Adviser I, LLC | (16) | November 22, 2013 | Third Party Investment | | | | | | | | | | | |
| | | | Member Units | (8) (31) | | | | | | | 29,500 | | 116,760 |
| | | | | | | | | | | | | | |
Mystic Logistics Holdings, LLC | | August 18, 2014 | Logistics and Distribution Services Provider for Large Volume Mailers | | | | | | | | | | | |
| | | | Secured Debt | | | 12.00% | 1/17/2022 | | 6,733 | | 6,723 | | 6,723 |
| | | | Common Stock | (8) | 5,873 | | | | | | 2,720 | | 8,990 |
| | | | | | | | | | | | 9,443 | | 15,713 |
| | | | | | | | | | | | | | |
NAPCO Precast, LLC | | January 31, 2008 | Precast Concrete Manufacturing | | | | | | | | | | | |
| | | | Member Units | (8) | 2,955 | | | | | | 2,975 | | 16,100 |
| | | | | | | | | | | | | | |
Nebraska Vet AcquireCo, LLC (NVS) | | December 31, 2020 | Mixed-Animal Veterinary and Animal Health Product Provider | | | | | | | | | | | |
| | | | Secured Debt | | | 12.00% | 12/31/2025 | | 10,500 | | 10,395 | | 10,395 |
| | | | Preferred Member Units | | 6,500 | | | | | | 6,500 | | 6,500 |
| | | | | | | | | | | | 16,895 | | 16,895 |
| | | | | | | | | | | | | | |
NexRev LLC | | February 28, 2018 | Provider of Energy Efficiency Products & Services | | | | | | | | | | | |
| | | | Secured Debt | | | 11.00% | 2/28/2023 | | 17,097 | | 17,016 | | 16,726 |
| | | | Preferred Member Units | (8) | 86,400,000 | | | | | | 6,880 | | 1,470 |
| | | | | | | | | | | | 23,896 | | 18,196 |
| | | | | | | | | | | | | | |
NRI Clinical Research, LLC | | September 8, 2011 | Clinical Research Service Provider | | | | | | | | | | | |
| | | | Secured Debt | | | 9.00% | 6/8/2022 | | 5,620 | | 5,572 | | 5,620 |
| | | | Warrants | (27) | 251,723 | | 6/8/2027 | | | | 252 | | 1,490 |
| | | | Member Units | (8) | 1,454,167 | | | | | | 765 | | 5,600 |
| | | | | | | | | | | | 6,589 | | 12,710 |
| | | | | | | | | | | | | | |
NRP Jones, LLC | | December 22, 2011 | Manufacturer of Hoses, Fittings and Assemblies | | | | | | | | | | | |
| | | | Secured Debt | | | 12.00% | 3/20/2023 | | 2,080 | | 2,080 | | 2,080 |
| | | | Member Units | (8) | 65,962 | | | | | | 3,717 | | 2,821 |
| | | | | | | | | | | | 5,797 | | 4,901 |
| | | | | | | | | | | | | | |
33
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
September 30, 2017December 31, 2020
(dollars in thousands)
(Unaudited)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
TE Holdings, LLC(11) | Oil & Gas Exploration & Production | |||||||||||||
Member Units (97,048 units) | 970 | 291 | ||||||||||||
TeleGuam Holdings, LLC(11) | Cable and Telecom Services Provider | |||||||||||||
LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.73%, Secured Debt (Maturity—April 12, 2024)(9) | 7,750 | 7,598 | 7,828 | |||||||||||
TGP Holdings III LLC(11) | Outdoor Cooking & Accessories | |||||||||||||
LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.33%, Secured Debt (Maturity—September 25, 2024)(9) | 8,000 | 7,920 | 8,050 | |||||||||||
LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.83%, Secured Debt (Maturity—September 25, 2025)(9) | 5,000 | 4,925 | 5,025 | |||||||||||
| | | | | | | | | | | | | | | |
| 12,845 | 13,075 | |||||||||||||
The Container Store, Inc.(11) | Operator of Stores Offering Storage and Organizational Products | |||||||||||||
LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.33%, Secured Debt (Maturity—August 15, 2021)(9) | 10,000 | 9,707 | 9,631 | |||||||||||
TMC Merger Sub Corp.(11) | Refractory & Maintenance Services Provider | |||||||||||||
LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—October 31, 2022)(9)(25) | 13,741 | 13,618 | 13,809 | |||||||||||
TOMS Shoes, LLC(11) | Global Designer, Distributor, and Retailer of Casual Footwear | |||||||||||||
LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.82%, Secured Debt (Maturity—October 30, 2020)(9) | 4,875 | 4,589 | 2,331 | |||||||||||
Turning Point Brands, Inc.(10)(13) | Marketer/Distributor of Tobacco Products | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.32%, Secured Debt (Maturity—May 17, 2022)(9)(24) | 8,458 | 8,381 | 8,436 | |||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
NuStep, LLC | | January 31, 2017 | Designer, Manufacturer and Distributor of Fitness Equipment | | | | | | | | | | | |
| | | | Secured Debt | | | 12.00% | 1/31/2022 | | 17,240 | | 17,193 | | 17,193 |
| | | | Preferred Member Units | | 406 | | | | | | 10,200 | | 10,780 |
| | | | | | | | | | | | 27,393 | | 27,973 |
| | | | | | | | | | | | | | |
OMi Holdings, Inc. | | April 1, 2008 | Manufacturer of Overhead Cranes | | | | | | | | | | | |
| | | | Common Stock | (8) | 1,500 | | | | | | 1,080 | | 20,380 |
| | | | | | | | | | | | | | |
Pearl Meyer Topco LLC | | April 27, 2020 | Provider of Executive Compensation Consulting Services | | | | | | | | | | | |
| | | | Secured Debt | | | 12.00% | 4/27/2025 | | 37,513 | | 37,202 | | 37,202 |
| | | | Member Units | (8) | 13,800 | | | | | | 13,000 | | 15,940 |
| | | | | | | | | | | | 50,202 | | 53,142 |
| | | | | | | | | | | | | | |
Pegasus Research Group, LLC | | January 6, 2011 | Provider of Telemarketing and Data Services | | | | | | | | | | | |
| | | | Member Units | (8) | 460 | | | | | | 1,290 | | 8,830 |
| | | | | | | | | | | | | | |
PPL RVs, Inc. | | June 10, 2010 | Recreational Vehicle Dealer | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.50% (L+7.00%, Floor 0.50%) | 11/15/2022 | | 11,855 | | 11,781 | | 11,806 |
| | | | Common Stock | (8) | 2,000 | | | | | | 2,150 | | 11,500 |
| | | | | | | | | | | | 13,931 | | 23,306 |
| | | | | | | | | | | | | | |
Principle Environmental, LLC (d/b/a TruHorizon Environmental Solutions) | | February 1, 2011 | Noise Abatement Service Provider | | | | | | | | | | | |
| | | | Secured Debt | | | 13.00% | 4/30/2023 | | 6,397 | | 6,335 | | 6,397 |
| | | | Preferred Member Units | (8) | 19,631 | | | | | | 4,600 | | 10,500 |
| | | | Warrants | (27) | 1,018 | | 1/31/2021 | | | | 1,200 | | 870 |
| | | | | | | | | | | | 12,135 | | 17,767 |
| | | | | | | | | | | | | | |
Quality Lease Service, LLC | | June 8, 2015 | Provider of Rigsite Accommodation Unit Rentals and Related Services | | | | | | | | | | | |
| | | | Member Units | | 1,000 | | | | | | 11,063 | | 4,460 |
| | | | | | | | | | | | | | |
River Aggregates, LLC | | March 30, 2011 | Processor of Construction Aggregates | | | | | | | | | | | |
| | | | Member Units | (30) | 1,500 | | | | | | 369 | | 3,240 |
| | | | | | | | | | | | | | |
Tedder Industries, LLC | | August 31, 2018 | Manufacturer of Firearm Holsters and Accessories | | | | | | | | | | | |
| | | | Secured Debt | | | 12.00% | 8/31/2023 | | 16,400 | | 16,301 | | 16,301 |
| | | | Preferred Member Units | | 479 | | | | | | 8,136 | | 8,136 |
| | | | | | | | | | | | 24,437 | | 24,437 |
| | | | | | | | | | | | | | |
Trantech Radiator Topco, LLC | | May 31, 2019 | Transformer Cooling Products and Services | | | | | | | | | | | |
| | | | Secured Debt | | | 12.00% | 5/31/2024 | | 8,720 | | 8,644 | | 8,644 |
| | | | Common Stock | (8) | 615 | | | | | | 4,655 | | 6,030 |
| | | | | | | | | | | | 13,299 | | 14,674 |
| | | | | | | | | | | | | | |
UnionRock Energy Fund II, LP | (12) (13) | June 15, 2020 | Oil & Gas Exploration & Production | | | | | | | | | | | |
| | | | LP Interests | (31) | 49.6% | | | | | | 2,894 | | 2,894 |
| | | | | | | | | | | | | | |
34
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
September 30, 2017December 31, 2020
(dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
Vision Interests, Inc. | | June 5, 2007 | Manufacturer / Installer of Commercial Signage | | | | | | | | | | | |
| | | | Secured Debt | (17) | | 13.00% | 9/30/2019 | | 2,028 | | 2,028 | | 2,028 |
| | | | Series A Preferred Stock | | 3,000,000 | | | | | | 3,000 | | 3,160 |
| | | | | | | | | | | | 5,028 | | 5,188 |
| | | | | | | | | | | | | | |
Ziegler's NYPD, LLC | | October 1, 2008 | Casual Restaurant Group | | | | | | | | | | | |
| | | | Secured Debt | | | 6.50% | 10/1/2022 | | 1,000 | | 1,000 | | 979 |
| | | | Secured Debt | | | 12.00% | 10/1/2022 | | 625 | | 625 | | 625 |
| | | | Secured Debt | | | 14.00% | 10/1/2022 | | 2,750 | | 2,750 | | 2,750 |
| | | | Warrants | (27) | 587 | | 10/1/2025 | | | | 600 | | - |
| | | | Preferred Member Units | | 10,072 | | | | | | 2,834 | | 1,780 |
| | | | | | | | | | | | 7,809 | | 6,134 |
| | | | | | | | | | | | | | |
Subtotal Control Investments (73.5% of net assets at fair value) | | | | | | | | | | | $ | 831,490 | $ | 1,113,725 |
35
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
TVG-I-E CMN ACQUISITION, LLC(10) | Organic Lead Generation for Online Postsecondary Schools | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.24%, Secured Debt (Maturity—November 3, 2021)(9) | 6,338 | 6,229 | 6,337 | |||||||||||
Tweddle Group, Inc.(11) | Provider of Technical Information Services to Automotive OEMs | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.31%, Secured Debt (Maturity—October 21, 2022)(9) | 6,195 | 6,086 | 6,210 | |||||||||||
U.S. TelePacific Corp.(11) | Provider of Communications and Managed Services | |||||||||||||
LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.32%, Secured Debt (Maturity—May 2, 2023)(9) | 17,955 | 17,834 | 17,533 | |||||||||||
US Joiner Holding Company(11) | Marine Interior Design and Installation | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.34%, Secured Debt (Maturity—April 16, 2020)(9) | 13,500 | 13,390 | 13,400 | |||||||||||
VIP Cinema Holdings, Inc.(11) | Supplier of Luxury Seating to the Cinema Industry | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.34%, Secured Debt (Maturity—March 1, 2023)(9) | 7,800 | 7,764 | 7,884 | |||||||||||
Virtex Enterprises, LP(10) | Specialty, Full-Service Provider of Complex Electronic Manufacturing Services | |||||||||||||
12% Secured Debt (Maturity—December 27, 2018) | 1,667 | 1,595 | 1,595 | |||||||||||
Preferred Class A Units (14 units; 5% cumulative)(8) | 333 | 904 | ||||||||||||
Warrants (11 equivalent units; Expiration—December 27, 2023; Strike price—$0.001 per unit) | 186 | 443 | ||||||||||||
| | | | | | | | | | | | | | | |
| 2,114 | 2,942 | |||||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
September 30, 2017December 31, 2020
(dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
| | | | | | | | | | | | | | |
Affiliate Investments (6) | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
AAC Holdings, Inc. | (11) | June 30, 2017 | Substance Abuse Treatment Service Provider | | | | | | | | | | | |
| | | | Secured Debt | (19) | | 18.00% (10.00% Cash, 8.00% PIK) | 6/25/2025 | | 9,406 | | 9,187 | | 9,187 |
| | | | Common Stock | | 593,928 | | | | | | 3,148 | | 3,148 |
| | | | Warrants | (27) | 554,353 | | 12/11/2025 | | | | - | | 2,938 |
| | | | | | | | | | | | 12,335 | | 15,273 |
| | | | | | | | | | | | | | |
AFG Capital Group, LLC | | November 7, 2014 | Provider of Rent-to-Own Financing Solutions and Services | | | | | | | | | | | |
| | | | Secured Debt | | | 10.00% | 5/25/2022 | | 491 | | 491 | | 491 |
| | | | Preferred Member Units | | 186 | | | | | | 1,200 | | 5,810 |
| | | | | | | | | | | | 1,691 | | 6,301 |
| | | | | | | | | | | | | | |
American Trailer Rental Group LLC | | June 7, 2017 | Provider of Short-term Trailer and Container Rental | | | | | | | | | | | |
| | | | Member Units | (30) | 73,493 | | | | | | 8,596 | | 16,010 |
| | | | | | | | | | | | | | |
BBB Tank Services, LLC | | April 8, 2016 | Maintenance, Repair and Construction Services to the Above-Ground Storage Tank Market | | | | | | | | | | | |
| | | | Unsecured Debt | (9) | | 12.00% (L+11.00%, Floor 1.00%) | 4/8/2021 | | 4,800 | | 4,773 | | 4,722 |
| | | | Preferred Stock (non-voting) | (8) (19) | | 15.00% PIK | | | | | 151 | | 151 |
| | | | Member Units | | 800,000 | | | | | | 800 | | 280 |
| | | | | | | | | | | | 5,724 | | 5,153 |
| | | | | | | | | | | | | | |
Boccella Precast Products LLC | | June 30, 2017 | Manufacturer of Precast Hollow Core Concrete | | | | | | | | | | | |
| | | | Member Units | (8) | 2,160,000 | | | | | | 2,256 | | 6,040 |
| | | | | | | | | | | | | | |
Buca C, LLC | | June 30, 2015 | Casual Restaurant Group | | | | | | | | | | | |
| | | | Secured Debt | (9) (17) | | 10.25% (L+9.25%, Floor 1.00%) | 6/30/2020 | | 19,004 | | 19,004 | | 14,256 |
| | | | Preferred Member Units | (8) (19) | 6 | 6.00% PIK | | | | | 4,770 | | - |
| | | | | | | | | | | | 23,774 | | 14,256 |
| | | | | | | | | | | | | | |
CAI Software LLC | | October 10, 2014 | Provider of Specialized Enterprise Resource Planning Software | | | | | | | | | �� | | |
| | | | Secured Debt | | | 12.50% | 12/7/2023 | | 47,474 | | 47,133 | | 47,474 |
| | | | Member Units | (8) | 77,960 | | | | | | 2,095 | | 7,190 |
| | | | | | | | | | | | 49,228 | | 54,664 |
| | | | | | | | | | | | | | |
Chandler Signs Holdings, LLC | (10) | January 4, 2016 | Sign Manufacturer | | | | | | | | | | | |
| | | | Class A Units | | 1,500,000 | | | | | | 1,500 | | 1,460 |
| | | | | | | | | | | | | | |
Charlotte Russe, Inc | (11) | May 28, 2013 | Fast-Fashion Retailer to Young Women | | | | | | | | | | | |
| | | | Common Stock | | 19,041 | | | | | | 3,141 | | - |
| | | | | | | | | | | | | | |
Classic H&G Holdings, LLC | | March 12, 2020 | Provider of Engineered Packaging Solutions | | | | | | | | | | | |
| | | | Secured Debt | | | 12.00% | 3/12/2025 | | 24,800 | | 24,583 | | 24,800 |
| | | | Preferred Member Units | (8) | 154 | | | | | | 5,760 | | 9,510 |
| | | | | | | | | | | | 30,343 | | 34,310 |
| | | | | | | | | | | | | | |
36
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Vistar Media, Inc.(10) | Operator of Digital Out-of-Home Advertising Platform | |||||||||||||
LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.33%, Secured Debt (Maturity—February 16, 2022)(9) | 3,375 | 3,088 | 3,088 | |||||||||||
Warrants (70,207 equivalent shares; Expiration—February 17, 2027; Strike price—$0.01 per share) | 331 | 331 | ||||||||||||
| | | | | | | | | | | | | | | |
| 3,419 | 3,419 | |||||||||||||
Wellnext, LLC(10) | Manufacturer of Supplements and Vitamins | |||||||||||||
LIBOR Plus 10.10% (Floor 1.00%), Current Coupon 11.34%, Secured Debt (Maturity—July 21, 2022)(9)(23) | 9,930 | 9,852 | 9,930 | |||||||||||
Wireless Vision Holdings, LLC(10) | Provider of Wireless Telecommunications Carrier Services | |||||||||||||
LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.83%, Secured Debt (Maturity—September 29, 2022)(9)(23) | 6,711 | 6,576 | 6,576 | |||||||||||
Wirepath LLC(11) | E-Commerce Provider into Connected Home Market | |||||||||||||
LIBOR Plus 5.25% (Floor 1.00%), Current Coupon 6.56%, Secured Debt (Maturity—August 5, 2024)(9) | 5,000 | 4,981 | 5,042 | |||||||||||
Zilliant Incorporated | Price Optimization and Margin Management Solutions | |||||||||||||
Preferred Stock (186,777 shares) | 154 | 260 | ||||||||||||
Warrants (952,500 equivalent shares; Expiration—June 15, 2022; Strike price—$0.001 per share) | 1,071 | 1,190 | ||||||||||||
| | | | | | | | | | | | | | | |
| 1,225 | 1,450 | |||||||||||||
| | | | | | | | | | | | | | | |
Subtotal Non-Control/Non-Affiliate Investments (51.4% of total investments at fair value) | $ | 1,144,962 | $ | 1,115,877 | ||||||||||
| | | | | | | | | | | | | | | |
Total Portfolio Investments, September 30, 2017 | $ | 2,049,528 | $ | 2,169,981 | ||||||||||
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
September 30, 2017December 31, 2020
(dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
Congruent Credit Opportunities Funds | (12) (13) | January 24, 2012 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests (Congruent Credit Opportunities Fund | (31) | 19.8% | | | | | | 4,449 | | 94 |
| | | | LP Interests (Congruent Credit Opportunities Fund | (8) (31) | 17.4% | | | | | | 11,741 | | 11,540 |
| | | | | | | | | | | | 16,190 | | 11,634 |
| | | | | | | | | | | | | | |
Copper Trail Fund Investments | (12) (13) | July 17, 2017 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests (Copper Trail Energy Fund I, LP) | (8) (31) | 12.4% | | | | | | 2,161 | | 1,782 |
| | | | | | | | | | | | | | |
Dos Rios Partners | (12) (13) | April 25, 2013 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests (Dos Rios Partners, LP) | (31) | 20.2% | | | | | | 6,605 | | 5,417 |
| | | | LP Interests (Dos Rios Partners - A, LP) | (31) | 6.4% | | | | | | 2,097 | | 1,720 |
| | | | | | | | | | | | 8,702 | | 7,137 |
| | | | | | | | | | | | | | |
East Teak Fine Hardwoods, Inc. | | April 13, 2006 | Distributor of Hardwood Products | | | | | | | | | | | |
| | | | Common Stock | | 6,250 | | | | | | 480 | | 300 |
| | | | | | | | | | | | | | |
EIG Fund Investments | (12) (13) | November 6, 2015 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests (EIG Global Private Debt Fund-A, L.P.) | (8) (31) | 11.1% | | | | | | 739 | | 526 |
| | | | | | | | | | | | | | |
Freeport Financial Funds | (12) (13) | June 13, 2013 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests (Freeport Financial SBIC Fund LP) | (31) | 9.3% | | | | | | 5,974 | | 5,264 |
| | | | LP Interests (Freeport First Lien Loan Fund III LP) | (8) (31) | 6.0% | | | | | | 10,785 | | 10,321 |
| | | | | | | | | | | | 16,759 | | 15,585 |
| | | | | | | | | | | | | | |
Harris Preston Fund Investments | (12) (13) | August 9, 2017 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests (HPEP 3, L.P.) | (31) | 8.2% | | | | | | 3,071 | | 3,258 |
| | | | | | | | | | | | | | |
Hawk Ridge Systems, LLC | (13) | December 2, 2016 | Value-Added Reseller of Engineering Design and Manufacturing Solutions | | | | | | | | | | | |
| | | | Secured Debt | | | 11.00% | 12/2/2023 | | 18,400 | | 18,366 | | 18,400 |
| | | | Preferred Member Units | (8) | 226 | | | | | | 2,850 | | 8,030 |
| | | | Preferred Member Units | (30) | 226 | | | | | | 150 | | 420 |
| | | | | | | | | | | | 21,366 | | 26,850 |
| | | | | | | | | | | | | | |
MAIN STREET CAPITAL CORPORATIONConsolidated Schedule of InvestmentsDecember 31, 2016(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Control Investments(5) |
|
| ||||||||||||
Access Media Holdings, LLC(10) | Private Cable Operator | |||||||||||||
5% Current / 5% PIK Secured Debt (Maturity—July 22, 2020)(19) | $ | 22,664 | $ | 22,664 | $ | 19,700 | ||||||||
Preferred Member Units (6,581,250 units) | 6,475 | 240 | ||||||||||||
Member Units (45 units) | 1 | — | ||||||||||||
| | | | | | | | | | | | | | | |
| 29,140 | 19,940 | |||||||||||||
Ameritech College Operations, LLC | For-Profit Nursing and Healthcare College | |||||||||||||
10% Secured Debt (Maturity—November 30, 2019) | 514 | 514 | 514 | |||||||||||
13% Secured Debt (Maturity—November 30, 2019) | 489 | 489 | 489 | |||||||||||
13% Secured Debt (Maturity—January 31, 2020) | 3,025 | 3,025 | 3,025 | |||||||||||
Preferred Member Units (294 units) | 2,291 | 2,291 | ||||||||||||
| | | | | | | | | | | | | | | |
| 6,319 | 6,319 | |||||||||||||
ASC Interests, LLC | Recreational and Educational Shooting Facility | |||||||||||||
11% Secured Debt (Maturity—July 31, 2018) | 2,100 | 2,084 | 2,100 | |||||||||||
Member Units (1,500 units)(8) | 1,500 | 2,680 | ||||||||||||
| | | | | | | | | | | | | | | |
| 3,584 | 4,780 | |||||||||||||
Bond-Coat, Inc. | Casing and Tubing Coating Services | |||||||||||||
12% Secured Debt (Maturity—December 28, 2017) | 11,596 | 11,556 | 11,596 | |||||||||||
Common Stock (57,508 shares) | 6,350 | 6,660 | ||||||||||||
| | | | | | | | | | | | | | | |
| 17,906 | 18,256 | |||||||||||||
Café Brazil, LLC | Casual Restaurant Group | |||||||||||||
Member Units (1,233 units)(8) | 1,742 | 6,040 | ||||||||||||
CBT Nuggets, LLC | Produces and Sells IT Training Certification Videos | |||||||||||||
Member Units (416 units)(8) | 1,300 | 55,480 | ||||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 20162020
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Clad-Rex Steel, LLC | Specialty Manufacturer of Vinyl-Clad Metal | |||||||||||||
LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity—December 20, 2018)(9) | 400 | 396 | 396 | |||||||||||
LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity—December 20, 2021)(9) | 14,080 | 13,941 | 13,941 | |||||||||||
Member Units (717 units) | 7,280 | 7,280 | ||||||||||||
10% Secured Debt (Clad-Rex Steel RE Investor, LLC) (Maturity—December 20, 2036) | 1,202 | 1,190 | 1,190 | |||||||||||
Member Units (Clad-Rex Steel RE Investor, LLC) (800 units) | 210 | 210 | ||||||||||||
| | | | | | | | | | | | | | | |
| 23,017 | 23,017 | |||||||||||||
CMS Minerals Investments | Oil & Gas Exploration & Production | |||||||||||||
Preferred Member Units (CMS Minerals LLC) (458 units)(8) | 2,104 | 3,682 | ||||||||||||
Member Units (CMS Minerals II, LLC) (100 units)(8) | 3,829 | 3,381 | ||||||||||||
| | | | | | | | | | | | | | | |
| 5,933 | 7,063 | |||||||||||||
Datacom, LLC | Technology and Telecommunications Provider | |||||||||||||
8% Secured Debt (Maturity—May 30, 2017) | 900 | 900 | 900 | |||||||||||
5.25% Current / 5.25% PIK Secured Debt (Maturity—May 30, 2019)(19) | 11,713 | 11,651 | 11,049 | |||||||||||
Class A Preferred Member Units | 1,181 | 1,368 | ||||||||||||
Class B Preferred Member Units (6,453 units) | 6,030 | 1,529 | ||||||||||||
| | | | | | | | | | | | | | | |
| 19,762 | 14,846 | |||||||||||||
Gamber-Johnson Holdings, LLC | Manufacturer of Ruggedized Computer Mounting Systems | |||||||||||||
LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 12.00%, Secured Debt (Maturity—June 24, 2021)(9) | 24,080 | 23,846 | 23,846 | |||||||||||
Member Units (8,619 units) | 14,844 | 18,920 | ||||||||||||
| | | | | | | | | | | | | | | |
| 38,690 | 42,766 | |||||||||||||
Garreco, LLC | Manufacturer and Supplier of Dental Products | |||||||||||||
14% Secured Debt (Maturity—January 12, 2018) | 5,250 | 5,219 | 5,219 | |||||||||||
Member Units (1,200 units) | 1,200 | 1,150 | ||||||||||||
| | | | | | | | | | | | | | | |
| 6,419 | 6,369 | |||||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
Houston Plating and Coatings, LLC | | January 8, 2003 | Provider of Plating and Industrial Coating Services | | | | | | | | | | | |
| | | | Unsecured Convertible Debt | | | 8.00% | 5/1/2022 | | 3,000 | | 3,000 | | 2,900 |
| | | | Member Units | (8) | 322,297 | | | | | | 2,352 | | 5,080 |
| | | | | | | | | | | | 5,352 | | 7,980 |
| | | | | | | | | | | | | | |
I-45 SLF LLC | (12) (13) | October 20, 2015 | Investment Partnership | | | | | | | | | | | |
| | | | Member Units (Fully diluted 20.0%; 24.40% profits | (8) (31) | 20.00% Fully Diluted, 24.40% Profits Interest | | | | | | 20,200 | | 15,789 |
| | | | | | | | | | | | | | |
L.F. Manufacturing Holdings, LLC | (10) | December 23, 2013 | Manufacturer of Fiberglass Products | | | | | | | | | | | |
| | | | Preferred Member Units (non-voting) | (8) (19) | | 14.00% PIK | | | | | 93 | | 93 |
| | | | Member Units | | 2,179,001 | | | | | | 2,019 | | 2,050 |
| | | | | | | | | | | | 2,112 | | 2,143 |
| | | | | | | | | | | | | | |
OnAsset Intelligence, Inc. | | April 18, 2011 | Provider of Transportation Monitoring / Tracking Products and Services | | | | | | | | | | | |
| | | | Secured Debt | (19) | | 12.00% PIK | 6/30/2021 | | 7,301 | | 7,301 | | 7,301 |
| | | | Unsecured Debt | (19) | | 10.00% PIK | 6/30/2021 | | 64 | | 64 | | 64 |
| | | | Preferred Stock | | 912 | | | | | | 1,981 | | - |
| | | | Warrants | (27) | 5,333 | | 4/18/2021 | | | | 1,919 | | - |
| | | | | | | | | | | | 11,265 | | 7,365 |
| | | | | | | | | | | | | | |
PCI Holding Company, Inc. | | December 18, 2012 | Manufacturer of Industrial Gas Generating Systems | | | | | | | | | | | |
| | | | Preferred Stock | | 1,500,000 | | | | | | 3,927 | | 4,130 |
| | | | | | | | | | | | | | |
Rocaceia, LLC (Quality Lease and Rental Holdings, LLC) | | January 8, 2013 | Provider of Rigsite Accommodation Unit Rentals and Related Services | | | | | | | | | | | |
| | | | Secured Debt | (14) (32) | | 12.00% | 1/8/2018 | | 30,369 | | 29,865 | | - |
| | | | Preferred Member Units | | 250 | | | | | | 2,500 | | - |
| | | | | | | | | | | | 32,365 | | - |
| | | | | | | | | | | | | | |
Salado Stone Holdings, LLC | (10) | June 27, 2016 | Limestone and Sandstone Dimension Cut Stone Mining Quarries | | | | | | | | | | | |
| | | | Class A Preferred Units | (30) | 2,000,000 | | | | | | 2,000 | | 1,250 |
| | | | | | | | | | | | | | |
Slick Innovations, LLC | | September 13, 2018 | Text Message Marketing Platform | | | | | | | | | | | ��� |
| | | | Secured Debt | | | 13.00% | 9/13/2023 | | 5,720 | | 5,605 | | 5,719 |
| | | | Common Stock | | 70,000 | | | | | | 700 | | 1,330 |
| | | | Warrants | (27) | 18,084 | | 9/13/2028 | | | | 181 | | 360 |
| | | | | | | | | | | | 6,486 | | 7,409 |
| | | | | | | | | | | | | | |
SI East, LLC | | August 31, 2018 | Rigid Industrial Packaging Manufacturing | | | | | | | | | | | |
| | | | Secured Debt | | | 9.50% | 8/31/2023 | | 32,963 | | 32,760 | | 32,962 |
| | | | Preferred Member Units | (8) | 157 | | | | | | 6,000 | | 9,780 |
| | | | | | | | | | | | 38,760 | | 42,742 |
| | | | | | | | | | | | | | |
Superior Rigging & Erecting Co. | | August 31, 2020 | Provider of Steel Erection, Crane Rental & Rigging Services | | | | | | | | | | | |
| | | | Secured Debt | | | 12.00% | 8/31/2025 | | 21,500 | | 21,298 | | 21,298 |
| | | | Preferred Member Units | | 1,473 | | | | | | 4,500 | | 4,500 |
| | | | | | | | | | | | 25,798 | | 25,798 |
| | | | | | | | | | | | | | |
38
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 20162020
(dollars in thousands)
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
UniTek Global Services, Inc. | (11) | April 15, 2011 | Provider of Outsourced Infrastructure Services | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.50% (L+6.50% Floor 1.00%) | 8/20/2024 | | 2,708 | | 2,687 | | 2,426 |
| | | | Preferred Stock | (8) (19) | 1,133,102 | 20.00% PIK | | | | | 1,441 | | 2,832 |
| | | | Preferred Stock | (8) (19) | 1,521,122 | 20.00% PIK | | | | | 2,188 | | 375 |
| | | | Preferred Stock | (19) | 2,281,682 | 19.00% PIK | | | | | 3,667 | | - |
| | | | Preferred Stock | (19) | 4,336,866 | 13.50% PIK | | | | | 7,924 | | - |
| | | | Common Stock | | 945,507 | | | | | | - | | - |
| | | | | | | | | | | | 17,907 | | 5,633 |
| | | | | | | | | | | | | | |
Universal Wellhead Services Holdings, LLC | (10) | October 30, 2014 | Provider of Wellhead Equipment, Designs, and Personnel to the Oil & Gas Industry | | | | | | | | | | | |
| | | | Preferred Member Units | (19) (30) | 716,949 | 14.00% PIK | | | | | 1,032 | | - |
| | | | Member Units | (30) | 4,000,000 | | | | | | 4,000 | | - |
| | | | | | | | | | | | 5,032 | | - |
| | | | | | | | | | | | | | |
Volusion, LLC | | January 26, 2015 | Provider of Online Software-as-a-Service eCommerce Solutions | | | | | | | | | | | |
| | | | Secured Debt | (17) | | 11.50% | 1/26/2020 | | 20,234 | | 20,234 | | 19,242 |
| | | | Unsecured Convertible Debt | | | 8.00% | 11/16/2023 | | 409 | | 409 | | 291 |
| | | | Preferred Member Units | | 4,876,670 | | | | | | 14,000 | | 5,990 |
| | | | Warrants | (27) | 1,831,355 | | 1/26/2025 | | | | 2,576 | | - |
| | | | | | | | | | | | 37,219 | | 25,523 |
| | | | | | | | | | | | | | |
Subtotal Affiliate Investments (24.2% of net assets at fair value) | | | | | | | | | | | $ | 416,479 | $ | 366,301 |
39
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
GRT Rubber Technologies LLC | Manufacturer of Engineered Rubber Products | |||||||||||||
LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—December 19, 2019)(9) | 13,274 | 13,188 | 13,274 | |||||||||||
Member Units (5,879 units)(8) | 13,065 | 20,310 | ||||||||||||
| | | | | | | | | | | | | | | |
| 26,253 | 33,584 | |||||||||||||
Gulf Manufacturing, LLC | Manufacturer of Specialty Fabricated Industrial Piping Products | |||||||||||||
9% PIK Secured Debt (Ashland Capital IX, LLC) (Maturity—June 30, 2017)(19) | 777 | 777 | 777 | |||||||||||
Member Units (438 units)(8) | 2,980 | 8,770 | ||||||||||||
| | | | | | | | | | | | | | | |
| 3,757 | 9,547 | |||||||||||||
Gulf Publishing Holdings, LLC | Energy Industry Focused Media and Publishing | |||||||||||||
12.5% Secured Debt (Maturity—April 29, 2021) | 10,000 | 9,911 | 9,911 | |||||||||||
Member Units (3,124 units) | 3,124 | 3,124 | ||||||||||||
| | | | | | | | | | | | | | | |
| 13,035 | 13,035 | |||||||||||||
Harrison Hydra-Gen, Ltd. | Manufacturer of Hydraulic Generators | |||||||||||||
Common Stock (107,456 shares)(8) | 718 | 3,120 | ||||||||||||
Hawthorne Customs and Dispatch Services, LLC | Facilitator of Import Logistics, Brokerage, and Warehousing | |||||||||||||
Member Units (500 units) | 589 | 280 | ||||||||||||
Member Units (Wallisville Real Estate, LLC) (588,210 units)(8) | 1,215 | 2,040 | ||||||||||||
| | | | | | | | | | | | | | | |
| 1,804 | 2,320 | |||||||||||||
HW Temps LLC | Temporary Staffing Solutions | |||||||||||||
LIBOR Plus 13.00% (Floor 1.00%), Current Coupon 14.00%, Secured Debt (Maturity July 2, 2020)(9) | 10,576 | 10,500 | 10,500 | |||||||||||
Preferred Member Units (3,200 units)(8) | 3,942 | 3,940 | ||||||||||||
| | | | | | | | | | | | | | | |
| 14,442 | 14,440 | |||||||||||||
Hydratec, Inc. | Designer and Installer of Micro-Irrigation Systems | |||||||||||||
Common Stock (7,095 shares)(8) | 7,095 | 15,640 | ||||||||||||
IDX Broker, LLC | Provider of Marketing and CRM Tools for the Real Estate Industry | |||||||||||||
12.5% Secured Debt (Maturity—November 15, 2018) | 10,950 | 10,904 | 10,950 | |||||||||||
Member Units (5,400 units)(8) | 5,606 | 7,040 | ||||||||||||
| | | | | | | | | | | | | | | |
| 16,510 | 17,990 | |||||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 20162020
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Indianapolis Aviation Partners, LLC | Fixed Base Operator | |||||||||||||
15% Secured Debt (Maturity—January 15, 2017) | 3,100 | 3,100 | 3,100 | |||||||||||
Warrants (1,046 equivalent units; Expiration—September 15, 2019; Strike price—$0.01 per unit) | 1,129 | 2,649 | ||||||||||||
| | | | | | | | | | | | | | | |
| 4,229 | 5,749 | |||||||||||||
Jensen Jewelers of Idaho, LLC | Retail Jewelry Store | |||||||||||||
Prime Plus 6.75% (Floor 2.00%), Current Coupon 10.25%, Secured Debt (Maturity—November 14, 2019)(9) | 4,055 | 3,996 | 4,055 | |||||||||||
Member Units (627 units)(8) | 811 | 4,460 | ||||||||||||
| | | | | | | | | | | | | | | |
| 4,807 | 8,515 | |||||||||||||
Lamb Ventures, LLC | Aftermarket Automotive Services Chain | |||||||||||||
11% Secured Debt (Maturity—May 31, 2018) | 7,657 | 7,657 | 7,657 | |||||||||||
Preferred Equity (non-voting) | 400 | 400 | ||||||||||||
Member Units (742 units)(8) | 5,273 | 5,990 | ||||||||||||
9.5% Secured Debt (Lamb's Real Estate Investment I, LLC) (Maturity—December 31, 2041) | 1,170 | 1,170 | 1,170 | |||||||||||
Member Units (Lamb's Real Estate Investment I, LLC) (1,000 units)(8) | 625 | 1,340 | ||||||||||||
| | | | | | | | | | | | | | | |
| 15,125 | 16,557 | |||||||||||||
Lighting Unlimited, LLC | Commercial and Residential Lighting Products and Design Services | |||||||||||||
8% Secured Debt (Maturity—August 22, 2017) | 1,514 | 1,514 | 1,514 | |||||||||||
Preferred Equity (non-voting) | 434 | 410 | ||||||||||||
Warrants (71 equivalent units; Expiration—June 14, 2021; Strike price—$0.01 per unit) | 54 | — | ||||||||||||
Member Units (700 units) | 100 | — | ||||||||||||
| | | | | | | | | | | | | | | |
| 2,102 | 1,924 | |||||||||||||
Marine Shelters Holdings, LLC | Fabricator of Marine and Industrial Shelters | |||||||||||||
12% PIK Secured Debt (Maturity—December 28, 2017)(14) | 9,967 | 9,914 | 9,387 | |||||||||||
Preferred Member Units (3,810 units) | 5,352 | — | ||||||||||||
| | | | | | | | | | | | | | | |
| 15,266 | 9,387 | |||||||||||||
MH Corbin Holding LLC | Manufacturer and Distributor of Traffic Safety Products | |||||||||||||
10% Secured Debt (Maturity—August 31, 2020) | 13,300 | 13,197 | 13,197 | |||||||||||
Preferred Member Units (4,000 shares) | 6,000 | 6,000 | ||||||||||||
| | | | | | | | | | | | | | | |
| 19,197 | 19,197 | |||||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
| | | | | | | | | | | | | | |
Non-Control/Non-Affiliate Investments (7) | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Acousti Engineering Company of Florida, Inc. | (10) | November 2, 2020 | Interior Subcontractor Providing Acoustical Walls and Ceilings | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 10.00% (L+8.50%, Floor 1.50%) | 10/31/2025 | | 13,000 | | 12,858 | | 12,858 |
| | | | | | | | | | | | | | |
Adams Publishing Group, LLC | (10) | November 19, 2015 | Local Newspaper Operator | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.75% (L+7.00%, Floor 1.75%) | 7/3/2023 | | 5,863 | | 5,745 | | 5,813 |
| | | | | | | | | | | | | | |
ADS Tactical, Inc. | (10) | March 7, 2017 | Value-Added Logistics and Supply Chain Provider to the Defense Industry | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.25%, Floor 0.75%) | 7/26/2023 | | 19,633 | | 19,529 | | 19,633 |
| | | | | | | | | | | | | | |
Aethon United BR LP | (10) | September 8, 2017 | Oil & Gas Exploration & Production | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.75% (L+6.75%, Floor 1.00%) | 9/8/2023 | | 9,750 | | 9,659 | | 9,544 |
| | | | | | | | | | | | | | |
Affordable Care Holding Corp. | (10) | May 9, 2019 | Dental Support Organization | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 5.75% (L+4.75%, Floor 1.00%) | 10/22/2022 | | 14,246 | | 14,066 | | 14,044 |
| | | | | | | | | | | | | | |
ALKU, LLC. | (11) | October 18, 2019 | Specialty National Staffing Operator | | | | | | | | | | | |
| | | | Secured Debt | | | 5.75% (L+5.50%) | 7/29/2026 | | 9,466 | | 9,385 | | 9,478 |
| | | | | | | | | | | | | | |
American Nuts, LLC | (10) | April 10, 2018 | Roaster, Mixer and Packager of Bulk Nuts and Seeds | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.00% (L+8.00%, Floor 1.00%) | 4/10/2023 | | 12,130 | | 11,954 | | 12,111 |
| | | | | | | | | | | | | | |
American Teleconferencing Services, Ltd. | (11) | May 19, 2016 | Provider of Audio Conferencing and Video Collaboration Solutions | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.50% (L+6.50%, Floor 1.00%) | 6/8/2023 | | 17,358 | | 16,634 | | 8,071 |
| | | | | | | | | | | | | | |
APTIM Corp. | (11) | August 17, 2018 | Engineering, Construction & Procurement | | | | | | | | | | | |
| | | | Secured Debt | | | 7.75% | 6/15/2025 | | 12,452 | | 11,063 | | 9,734 |
| | | | | | | | | | | | | | |
Arcus Hunting LLC | (10) | January 6, 2015 | Manufacturer of Bowhunting and Archery Products and Accessories | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 11.00% (L+10.00%, Floor 1.00%) | 3/31/2021 | | 11,009 | | 11,009 | | 11,009 |
| | | | | | | | | | | | | | |
Arrow International, Inc | (10) | December 21, 2020 | Manufacturer and Distributor of Charitable Gaming Supplies | | | | | | | | | | | |
| | | | Secured Debt | (9) (23) | | 9.23% (L+7.98%, Floor 1.25%) | 12/21/2025 | | 10,000 | | 9,901 | | 9,901 |
| | | | | | | | | | | | | | |
ASC Ortho Management Company, LLC | (10) | August 31, 2018 | Provider of Orthopedic Services | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.50% (L+7.50%, Floor 1.00%) | 8/31/2023 | | 5,206 | | 5,148 | | 5,149 |
| | | | Secured Debt | (19) | | 13.25% PIK | 12/1/2023 | | 2,116 | | 2,091 | | 2,116 |
| | | | | | | | | | | | 7,239 | | 7,265 |
| | | | | | | | | | | | | | |
40
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 20162020
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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 | |||||||||||
Member Units (3,554 units) | 1,810 | 2,480 | ||||||||||||
9.5% Secured Debt (Mid—Columbia Real Estate, LLC) (Maturity—May 13, 2025) | 836 | 836 | 836 | |||||||||||
Member Units (Mid—Columbia Real Estate, LLC) (250 units)(8) | 250 | 600 | ||||||||||||
| | | | | | | | | | | | | | | |
| 8,546 | 9,566 | |||||||||||||
MSC Adviser I, LLC(16) | Third Party Investment Advisory Services | |||||||||||||
Member Units (Fully diluted 100.0%)(8) | — | 30,617 | ||||||||||||
Mystic Logistics Holdings, LLC | Logistics and Distribution Services Provider for Large Volume Mailers | |||||||||||||
12% Secured Debt (Maturity—August 15, 2019) | 9,176 | 9,053 | 9,176 | |||||||||||
Common Stock (5,873 shares) | 2,720 | 5,780 | ||||||||||||
| | | | | | | | | | | | | | | |
| 11,773 | 14,956 | |||||||||||||
NAPCO Precast, LLC | Precast Concrete Manufacturing | |||||||||||||
Prime Plus 2.00% (Floor 7.00%), Current Coupon 9.00%, Secured Debt (Maturity—February 1, 2019)(9) | 2,713 | 2,693 | 2,713 | |||||||||||
18% Secured Debt (Maturity—February 1, 2019) | 3,952 | 3,922 | 3,952 | |||||||||||
Member Units (2,955 units)(8) | 2,975 | 10,920 | ||||||||||||
| | | | | | | | | | | | | | | |
| 9,590 | 17,585 | |||||||||||||
NRI Clinical Research, LLC | Clinical Research Service Provider | |||||||||||||
LIBOR Plus 6.50% (Floor 1.50%), Current Coupon 8.00%, Secured Debt (Maturity—September 8, 2017)(9) | 200 | 200 | 200 | |||||||||||
14% Secured Debt (Maturity—September 8, 2017) | 4,261 | 4,228 | 4,261 | |||||||||||
Warrants (251,723 equivalent units; Expiration—September 8, 2021; Strike price—$0.01 per unit) | 252 | 680 | ||||||||||||
Member Units (1,454,167 units) | 765 | 2,462 | ||||||||||||
| | | | | | | | | | | | | | | |
| 5,445 | 7,603 | |||||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
ATX Networks Corp. | (11) (13) (21) | June 30, 2015 | Provider of Radio Frequency Management Equipment | | | | | | | | | | | |
| | | | Secured Debt | (9) (19) | | 8.75% (7.25% Cash, 1.50% PIK) (1.50% PIK + L+6.25%, Floor 1.00%) | 12/31/2023 | | 13,402 | | 13,342 | | 12,263 |
| | | | | | | | | | | | | | |
Berry Aviation, Inc. | (10) | July 6, 2018 | Charter Airline Services | | | | | | | | | | | |
| | | | Secured Debt | (19) | | 12.00% (10.50% Cash, 1.5% PIK) | 1/6/2024 | | 4,624 | | 4,595 | | 4,624 |
| | | | Preferred Member Units | (8) (19) (30) | 122,416 | 16.00% PIK | | | | | 145 | | 145 |
| | | | Preferred Member Units | (19) (30) | 1,548,387 | 8.00% PIK | | | | | 1,671 | | 904 |
| | | | | | | | | | | | 6,411 | | 5,673 |
| | | | | | | | | | | | | | |
BigName Commerce, LLC | (10) | May 11, 2017 | Provider of Envelopes and Complimentary Stationery Products | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.25% (L+7.25%, Floor 1.00%) | 5/11/2022 | | 2,044 | | 2,037 | | 2,011 |
| | | | | | | | | | | | | | |
Binswanger Enterprises, LLC | (10) | March 10, 2017 | Glass Repair and Installation Service Provider | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.50% (L+8.50%, Floor 1.00%) | 3/9/2022 | | 12,958 | | 12,798 | | 12,958 |
| | | | Member Units | | 1,050,000 | | | | | | 1,050 | | 670 |
| | | | | | | | | | | | 13,848 | | 13,628 |
| | | | | | | | | | | | | | |
BLST Operating Company, LLC. | (11) | December 19, 2013 | Multi-Channel Retailer of General Merchandise | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 10.00% (L+8.50%, Floor 1.50%) | 8/28/2025 | | 5,879 | | 5,879 | | 5,879 |
| | | | Common Stock | | 653 | | | | | | - | | - |
| | | | Warrants | (27) | 70 | | 8/28/2030 | | | | - | | - |
| | | | | | | | | | | | 5,879 | | 5,879 |
| | | | | | | | | | | | | | |
Brainworks Software, LLC | (10) | August 12, 2014 | Advertising Sales and Newspaper Circulation Software | | | | | | | | | | | |
| | | | Secured Debt | (9) (14) (17) | | 12.50% (Prime+9.25%, Floor 3.25%) | 7/22/2019 | | 7,817 | | 7,817 | | 5,332 |
| | | | | | | | | | | | | | |
Brightwood Capital Fund Investments | (12) (13) | July 21, 2014 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests (Brightwood Capital Fund III, LP) | (8) (31) | 1.6% | | | | | | 10,800 | | 8,459 |
| | | | LP Interests (Brightwood Capital Fund IV, LP) | (8) (31) | 0.6% | | | | | | 5,000 | | 4,745 |
| | | | | | | | | | | | 15,800 | | 13,204 |
| | | | | | | | | | | | | | |
Cadence Aerospace LLC | (10) | November 14, 2017 | Aerostructure Manufacturing | | | | | | | | | | | |
| | | | Secured Debt | (9) (19) | | 9.50% (4.25% Cash, 5.25% PIK) (5.25% PIK + L+3.25%, Floor 1.00%) | 11/14/2023 | | 27,703 | | 27,484 | | 26,359 |
| | | | | | | | | | | | | | |
41
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 20162020
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
NRP Jones, LLC | Manufacturer of Hoses, Fittings and Assemblies | |||||||||||||
6% Current / 6% PIK Secured Debt (Maturity—December 22, 2016)(17)(19) | 13,915 | 13,915 | 13,915 | |||||||||||
Warrants (14,331 equivalent units; Expiration—December 22, 2022; Strike price—$0.01 per unit) | 817 | 130 | ||||||||||||
Member Units (50,877 units) | 2,900 | 410 | ||||||||||||
| | | | | | | | | | | | | | | |
| 17,632 | 14,455 | |||||||||||||
OMi Holdings, Inc. | Manufacturer of Overhead Cranes | |||||||||||||
Common Stock (1,500 shares)(8) | 1,080 | 13,080 | ||||||||||||
Pegasus Research Group, LLC | Provider of Telemarketing and Data Services | |||||||||||||
Member Units (460 units)(8) | 1,290 | 8,620 | ||||||||||||
PPL RVs, Inc. | Recreational Vehicle Dealer | |||||||||||||
LIBOR Plus 7.00% (Floor 0.50%), Current Coupon 7.93%, Secured Debt (Maturity—November 15, 2021)(9) | 18,000 | 17,826 | 17,826 | |||||||||||
Common Stock (1,962 shares)(8) | 2,150 | 11,780 | ||||||||||||
| | | | | | | | | | | | | | | |
| 19,976 | 29,606 | |||||||||||||
Principle Environmental, LLC | Noise Abatement Service Provider | |||||||||||||
12% Secured Debt (Maturity—April 30, 2017) | 4,060 | 4,060 | 4,060 | |||||||||||
12% Current / 2% PIK Secured Debt (Maturity—April 30, 2017)(19) | 3,378 | 3,378 | 3,378 | |||||||||||
Preferred Member Units (19,631 units) | 4,663 | 5,370 | ||||||||||||
Warrants (1,036 equivalent units; Expiration—January 31, 2021; Strike price—$0.01 per unit) | 1,200 | 270 | ||||||||||||
| | | | | | | | | | | | | | | |
| 13,301 | 13,078 | |||||||||||||
Quality Lease Service, LLC | Provider of Rigsite Accommodation Unit Rentals and Related Services | |||||||||||||
8% PIK Secured Debt (Maturity—June 8, 2020)(19) | 7,068 | 7,068 | 7,068 | |||||||||||
Member Units (1,000 units) | 1,118 | 3,188 | ||||||||||||
| | | | | | | | | | | | | | | |
| 8,186 | 10,256 | |||||||||||||
River Aggregates, LLC | Processor of Construction Aggregates | |||||||||||||
Zero Coupon Secured Debt (Maturity—June 30, 2018) | 750 | 627 | 627 | |||||||||||
Member Units (1,150 units)(8) | 1,150 | 4,600 | ||||||||||||
Member Units (RA Properties, LLC) (1,500 units) | 369 | 2,510 | ||||||||||||
| | | | | | | | | | | | | | | |
| 2,146 | 7,737 | |||||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
California Pizza Kitchen, Inc. | (11) | August 29, 2016 | Casual Restaurant Group | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 11.50% (L+10.00%, Floor 1.50%) | 11/23/2024 | | 7,700 | | 7,288 | | 7,315 |
| | | | Secured Debt | (9) (19) | | 13.50% (1.00% Cash, 12.50% PIK) (1.00% Cash, L+11.00% PIK, Floor 1.50%) | 11/23/2024 | | 2,657 | | 2,590 | | 2,524 |
| | | | Secured Debt | (9) (19) | | 15.00% (1.00% Cash, 14.00% PIK) (1.00% Cash, L+12.50% PIK, Floor 1.50%) | 5/23/2025 | | 2,291 | | 2,291 | | 1,833 |
| | | | Common Stock | | 169,088 | | | | | | 949 | | 1,860 |
| | | | | | | | | | | | 13,118 | | 13,532 |
| | | | | | | | | | | | | | |
Central Security Group, Inc. | (11) | December 4, 2017 | Security Alarm Monitoring Service Provider | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.00%, Floor 1.00%) | 10/16/2025 | | 6,891 | | 6,891 | | 5,823 |
| | | | Common Stock | | 329,084 | | | | | | 1,481 | | 1,645 |
| | | | | | | | | | | | 8,372 | | 7,468 |
| | | | | | | | | | | | | | |
Cenveo Corporation | (11) | September 4, 2015 | Provider of Digital Marketing Agency Services | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 10.50% (L+9.50%, Floor 1.00%) | 6/7/2023 | | 5,250 | | 5,129 | | 4,909 |
| | | | Common Stock | | 177,130 | | | | | | 5,309 | | 2,613 |
| | | | | | | | | | | | 10,438 | | 7,522 |
| | | | | | | | | | | | | | |
Chisholm Energy Holdings, LLC | (10) | May 15, 2019 | Oil & Gas Exploration & Production | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.75% (L+6.25%, Floor 1.50%) | 5/15/2026 | | 3,571 | | 3,498 | | 3,274 |
| | | | | | | | | | | | | | |
Clarius BIGS, LLC | (10) | September 23, 2014 | Prints & Advertising Film Financing | | | | | | | | | | | |
| | | | Secured Debt | (14) (17) (19) | | 15.00% PIK | 1/5/2015 | | 2,832 | | 2,832 | | 31 |
| | | | | | | | | | | | | | |
Clickbooth.com, LLC | (10) | December 5, 2017 | Provider of Digital Advertising Performance Marketing Solutions | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.50% (L+8.50%, Floor 1.00%) | 1/31/2025 | | 7,850 | | 7,750 | | 7,850 |
| | | | | | | | | | | | | | |
Construction Supply Investments, LLC | (10) | December 29, 2016 | Distribution Platform of Specialty Construction Materials to Professional Concrete and Masonry Contractors | | | | | | | | | | | |
| | | | Member Units | | | | | | | | 5,637 | | 8,617 |
| | | | | | | | | | | | | | |
Copper Trail Fund Investments | (12) (13) | July 17, 2017 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests (CTEF I, LP) | | 375 | | | | | | - | | 67 |
| | | | | | | | | | | | | | |
Corel Corporation | (11) (13) (21) | July 24, 2019 | Publisher of Desktop and Cloud-based Software | | | | | | | | | | | |
| | | | Secured Debt | | | 5.23% (L+5.00%) | 7/2/2026 | | 19,403 | | 18,580 | | 19,124 |
| | | | | | | | | | | | | | |
Darr Equipment LP | (10) | April 15, 2014 | Heavy Equipment Dealer | | | | | | | | | | | |
| | | | Secured Debt | (19) | | 12.50% (11.50% Cash, 1.00% PIK) | 6/22/2023 | | 5,959 | | 5,959 | | 5,959 |
| | | | Warrants | (29) | 915,734 | | 12/23/2023 | | | | 474 | | - |
| | | | | | | | | | | | 6,433 | | 5,959 |
| | | | | | | | | | | | | | |
42
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 20162020
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
SoftTouch Medical Holdings LLC | Provider of In-Home Pediatric Durable Medical Equipment | |||||||||||||||||||||||||||
LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—October 31, 2019)(9) | 7,140 | 7,096 | 7,140 | |||||||||||||||||||||||||
Member Units (4,450 units)(8) | 4,930 | 9,170 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | ||||
| 12,026 | 16,310 | |||||||||||||||||||||||||||
The MPI Group, LLC | Manufacturer of Custom Hollow Metal Doors, Frames and Accessories | |||||||||||||||||||||||||||
9% Secured Debt (Maturity—October 2, 2018) | 2,924 | 2,922 | 2,922 | |||||||||||||||||||||||||
Series A Preferred Units (2,500 units) | 2,500 | — | ||||||||||||||||||||||||||
Warrants (1,424 equivalent units; Expiration—July 1, 2024; Strike price—$0.01 per unit) | 1,096 | — | ||||||||||||||||||||||||||
Member Units (MPI Real Estate Holdings, LLC) (100 units)(8) | 2,300 | 2,300 | ||||||||||||||||||||||||||
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||||||||||||||||
Digital River, Inc. | (11) | February 24, 2015 | Provider of Outsourced e-Commerce Solutions and Services | | | | | | | | | | | | ||||||||||||||
| | | | | | | | | | | | | | | Secured Debt | (9) | | 8.00% (L+7.00%, Floor 1.00%) | 2/12/2023 | | 13,628 | | 13,422 | | 13,560 | ||||
| 8,818 | 5,222 | |||||||||||||||||||||||||||
Uvalco Supply, LLC | Farm and Ranch Supply Store | |||||||||||||||||||||||||||
9% Secured Debt (Maturity—January 1, 2019) | 872 | 872 | 872 | |||||||||||||||||||||||||
Member Units (2,011 units)(8) | 3,843 | 4,640 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | ||||
| 4,715 | 5,512 | |||||||||||||||||||||||||||
Vision Interests, Inc. | Manufacturer / Installer of Commercial Signage | |||||||||||||||||||||||||||
13% Secured Debt (Maturity—December 23, 2018) | 2,814 | 2,814 | 2,814 | |||||||||||||||||||||||||
Series A Preferred Stock (3,000,000 shares) | 3,000 | 3,000 | ||||||||||||||||||||||||||
Common Stock (1,126,242 shares) | 3,706 | — | ||||||||||||||||||||||||||
DTE Enterprises, LLC | (10) | April 13, 2018 | Industrial Powertrain Repair and Services | | | | | | | | | | | | ||||||||||||||
| | | | | | | | | | | | | | | Secured Debt | (9) | | 10.00% (L+8.50%, Floor 1.50%) | 4/13/2023 | | 9,324 | | 9,213 | | 9,004 | ||||
| 9,520 | 5,814 | |||||||||||||||||||||||||||
Ziegler's NYPD, LLC | Casual Restaurant Group | |||||||||||||||||||||||||||
6.5% Secured Debt (Maturity—October 1, 2019) | 1,000 | 994 | 994 | |||||||||||||||||||||||||
12% Secured Debt (Maturity—October 1, 2019) | 300 | 300 | 300 | |||||||||||||||||||||||||
14% Secured Debt (Maturity—October 1, 2019) | 2,750 | 2,750 | 2,750 | |||||||||||||||||||||||||
Warrants (587 equivalent units; Expiration—September 29, 2018; Strike price—$0.01 per unit) | 600 | 240 | ||||||||||||||||||||||||||
Preferred Member Units (10,072 units) | 2,834 | 4,100 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | Class AA Preferred Member Units (non-voting) | (8) (19) | | 10.00% PIK | | | | | 951 | | 951 | ||||
| 7,478 | 8,384 | |||||||||||||||||||||||||||
| | | | | | | | | | | | | | | Class A Preferred Member Units | | 776,316 | | | | | | 776 | | 880 | ||||
Subtotal Control Investments (29.8% of total investments at fair value) | $ | 439,674 | $ | 594,282 | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | 10,940 | | 10,835 | ||||
| | | | | | | | | | | | | | | ||||||||||||||
Dynamic Communities, LLC | (10) | July 17, 2018 | Developer of Business Events and Online Community Groups | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | (9) (19) | | 12.50% (6.25% Cash, 6.25% PIK) (L+11.50%, Floor 1.00%) | 7/17/2023 | | 5,320 | | 5,256 | | 4,921 | ||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
Eastern Wholesale Fence LLC | (10) | November 19, 2020 | Manufacturer and Distributor of Residential and Commercial Fencing Solutions | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | (9) | | 7.50%, (L+6.50%, Floor 1.00%) | 10/30/2025 | | 11,857 | | 11,523 | | 11,523 | ||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
Echo US Holdings, LLC. | (10) | November 12, 2019 | Developer and Manufacturer of PVC and Polypropylene Materials | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | (9) | | 7.88% (L+6.25%, Floor 1.63%) | 10/25/2024 | | 22,190 | | 22,090 | | 22,190 | ||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
Electronic Transaction Consultants, LLC | (10) | July 24, 2020 | Technology Service Provider for Toll Road and Infrastructure Operators | | | | | | | | | | | | ||||||||||||||
| | | | Secured Debt | (9) | | 8.50% (L+7.50%, Floor 1.00%) | 7/24/2025 | | 10,000 | | 9,829 | | 9,829 | ||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
EnCap Energy Fund Investments | (12) (13) | December 28, 2010 | Investment Partnership | | | | | | | | | | | | ||||||||||||||
| | | | LP Interests (EnCap Energy Capital Fund VIII, L.P.) | (31) | 0.1% | | | | | | 3,813 | | 959 | ||||||||||||||
| | | | LP Interests (EnCap Energy Capital Fund VIII Co- | (31) | 0.4% | | | | | | 2,097 | | 465 | ||||||||||||||
| | | | LP Interests (EnCap Energy Capital Fund IX, L.P.) | (8) (31) | 0.1% | | | | | | 4,366 | | 1,291 | ||||||||||||||
| | | | LP Interests (EnCap Energy Capital Fund X, L.P.) | (8) (31) | 0.1% | | | | | | 8,720 | | 6,426 | ||||||||||||||
| | | | LP Interests (EnCap Flatrock | (8) (31) | 0.8% | | | | | | 6,706 | | 2,546 | ||||||||||||||
43
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 20162020
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Affiliate Investments(6) |
|
| ||||||||||||
AFG Capital Group, LLC | Provider of Rent-to-Own Financing Solutions and Services | |||||||||||||
Warrants (42 equivalent units; Expiration—November 7, 2024; Strike price—$0.01 per unit) | $ | 259 | $ | 670 | ||||||||||
Member Units (186 units)(8) | 1,200 | 2,750 | ||||||||||||
| | | | | | | | | | | | | | | |
| 1,459 | 3,420 | |||||||||||||
Barfly Ventures, LLC(10) | Casual Restaurant Group | |||||||||||||
12% Secured Debt (Maturity—August 31, 2020) | 5,958 | 5,860 | 5,827 | |||||||||||
Options (2 equivalent units) | 397 | 490 | ||||||||||||
Warrant (1 equivalent unit; Expiration—August 31, 2025; Strike price—$1.00 per unit) | 473 | 280 | ||||||||||||
| | | | | | | | | | | | | | | |
| 6,730 | 6,597 | |||||||||||||
BBB Tank Services, LLC | Maintenance, Repair and Construction Services to the Above-Ground Storage Tank Market | |||||||||||||
LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity—April 8, 2021)(9) | 800 | 797 | 797 | |||||||||||
15% Current Secured Debt (Maturity—April 8, 2021) | 4,027 | 3,991 | 3,991 | |||||||||||
Member Units (800,000 units) | 800 | 800 | ||||||||||||
| | | | | | | | | | | | | | | |
| 5,588 | 5,588 | |||||||||||||
Boss Industries, LLC | Manufacturer and Distributor of Air, Power and Other Industrial Equipment | |||||||||||||
Preferred Member Units (2,242 units)(8) | 2,426 | 2,800 | ||||||||||||
Bridge Capital Solutions Corporation | Financial Services and Cash Flow Solutions Provider | |||||||||||||
13% Secured Debt (Maturity—July 25, 2021) | 7,500 | 5,610 | 5,610 | |||||||||||
Warrants (63 equivalent shares; Expiration—April 18, 2022; Strike price—$0.01 per share) | 2,132 | 3,370 | ||||||||||||
13% Secured Debt (Mercury Service Group, LLC) (Maturity—July 25, 2021) | 1,000 | 991 | 1,000 | |||||||||||
Preferred Member Units (Mercury Service Group, LLC) (17,742 units)(8) | 1,000 | 1,000 | ||||||||||||
| | | | | | | | | | | | | | | |
| 9,733 | 10,980 | |||||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
Midstream Fund II, L.P.) | ||||||||||||||
| | | | LP Interests (EnCap Flatrock Midstream Fund III, L.P.) | (8) (31) | 0.2% | | | | | | 6,982 | | 5,793 |
| | | | | | | | | | | | 32,684 | | 17,480 |
| | | | | | | | | | | | | | |
Encino Acquisition Partners Holdings, Inc. | (11) | November 16, 2018 | Oil & Gas Exploration & Production | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.75% (L+6.75%, Floor 1.00%) | 10/29/2025 | | 9,000 | | 8,932 | | 8,297 |
| | | | | | | | | | | | | | |
EPIC Y-Grade Services, LP | (11) | June 22, 2018 | NGL Transportation & Storage | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.00%, Floor 1.00%) | 6/30/2027 | | 6,944 | | 6,854 | | 5,799 |
| | | | | | | | | | | | | | |
Fortna, Inc. | (10) | July 23, 2019 | Process, Physical Distribution and Logistics Consulting Services | | | | | | | | | | | |
| | | | Secured Debt | | | 5.15% (L+5.00%) | 4/8/2025 | | 7,673 | | 7,553 | | 7,486 |
| | | | | | | | | | | | | | |
Fuse, LLC | (11) | June 30, 2019 | Cable Networks Operator | | | | | | | | | | | |
| | | | Secured Debt | | | 12.00% | 6/28/2024 | | 1,810 | | 1,810 | | 1,472 |
| | | | Common Stock | | 10,429 | | | | | | 256 | | - |
| | | | | | | | | | | | 2,066 | | 1,472 |
| | | | | | | | | | | | | | |
GeoStabilization International (GSI) | (11) | December 31, 2018 | Geohazard Engineering Services & Maintenance | | | | | | | | | | | |
| | | | Secured Debt | | | 5.40% (L+5.25%) | 12/19/2025 | | 11,224 | | 11,137 | | 11,196 |
| | | | | | | | | | | | | | |
GoWireless Holdings, Inc. | (11) | December 31, 2017 | Provider of Wireless Telecommunications Carrier Services | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.50% (L+6.50%, Floor 1.00%) | 12/22/2024 | | 17,113 | | 16,988 | | 16,976 |
| | | | | | | | | | | | | | |
Grupo Hima San Pablo, Inc. | (11) | March 7, 2013 | Tertiary Care Hospitals | | | | | | | | | | | |
| | | | Secured Debt | (9) (17) | | 9.25% (L+7.00%, Floor 1.50%) | 4/30/2019 | | 4,504 | | 4,504 | | 3,375 |
| | | | Secured Debt | (17) | | 13.75% | 10/15/2018 | | 2,055 | | 2,040 | | 49 |
| | | | | | | | | | | | 6,544 | | 3,424 |
| | | | | | | | | | | | | | |
GS HVAM Intermediate, LLC | (10) | October 18, 2019 | Specialized Food Distributor | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.75% (L+5.75%, Floor 1.00%) | 10/2/2024 | | 11,053 | | 10,952 | | 11,007 |
| | | | | | | | | | | | | | |
Gexpro Services | (10) | February 24, 2020 | Distributor of Industrial and Specialty Parts | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.00% (L+6.50%, Floor 1.50%) | 2/24/2025 | | 29,180 | | 28,692 | | 28,953 |
| | | | | | | | | | | | | | |
HDC/HW Intermediate Holdings | (10) | December 21, 2018 | Managed Services and Hosting Provider | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.50% (L+7.50%, Floor 1.00%) | 12/21/2023 | | 3,474 | | 3,429 | | 3,351 |
| | | | | | | | | | | | | | |
Heartland Dental, LLC | (10) | September 9, 2020 | Dental Support Organization | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.50% (L+6.50%, Floor 1.00%) | 4/30/2025 | | 14,925 | | 14,501 | | 14,501 |
| | | | | | | | | | | | | | |
Hunter Defense Technologies, Inc. | (10) | March 29, 2018 | Provider of Military and Commercial Shelters and Systems | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.00% (L+7.00%, Floor 1.00%) | 3/29/2023 | | 35,246 | | 34,820 | | 35,246 |
| | | | | | | | | | | | | | |
44
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 20162020
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Buca C, LLC | Casual Restaurant Group | |||||||||||||
LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—June 30, 2020)(9) | 22,671 | 22,504 | 22,671 | |||||||||||
Preferred Member Units (6 units; 6% cumulative)(8)(19) | 3,937 | 4,660 | ||||||||||||
| | | | | | | | | | | | | | | |
| 26,441 | 27,331 | |||||||||||||
CAI Software LLC | Provider of Specialized Enterprise Resource Planning Software | |||||||||||||
12% Secured Debt (Maturity—October 10, 2019) | 3,683 | 3,660 | 3,683 | |||||||||||
Member Units (65,356 units)(8) | 654 | 2,480 | ||||||||||||
| | | | | | | | | | | | | | | |
| 4,314 | 6,163 | |||||||||||||
CapFusion, LLC(13) | Non-Bank Lender to Small Businesses | |||||||||||||
13% Secured Debt (Maturity—March 25, 2021) | 14,400 | 13,202 | 13,202 | |||||||||||
Warrants (1,600 equivalent units; Expiration—March 24, 2026; Strike price—$0.01 per unit) | 1,200 | 1,200 | ||||||||||||
| | | | | | | | | | | | | | | |
| 14,402 | 14,402 | |||||||||||||
Chandler Signs Holdings, LLC(10) | Sign Manufacturer | |||||||||||||
12% Secured Debt (Maturity—July 4, 2021) | 4,500 | 4,461 | 4,500 | |||||||||||
Class A Units (1,500,000 units)(8) | 1,500 | 3,240 | ||||||||||||
| | | | | | | | | | | | | | | |
| 5,961 | 7,740 | |||||||||||||
Condit Exhibits, LLC | Tradeshow Exhibits / Custom Displays Provider | |||||||||||||
Member Units (3,936 units)(8) | 100 | 1,840 | ||||||||||||
Congruent Credit OpportunitiesFunds(12)(13) | Investment Partnership | |||||||||||||
LP Interests (Congruent Credit Opportunities Fund II, LP) (Fully diluted 19.8%)(8) | 5,730 | 1,518 | ||||||||||||
LP Interests (Congruent Credit Opportunities Fund III, LP) (Fully diluted 17.4%)(8) | 15,754 | 16,181 | ||||||||||||
| | | | | | | | | | | | | | | |
| 21,484 | 17,699 | |||||||||||||
Daseke, Inc. | Specialty Transportation Provider | |||||||||||||
12% Current / 2.5% PIK Secured Debt (Maturity—July 31, 2018)(19) | 21,799 | 21,632 | 21,799 | |||||||||||
Common Stock (19,467 shares) | 5,213 | 24,063 | ||||||||||||
| | | | | | | | | | | | | | | |
| 26,845 | 45,862 | |||||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
HW Temps LLC | | July 2, 2015 | Temporary Staffing Solutions | | | | | | | | | | | |
| | | | Secured Debt | | | 12.00% | 3/29/2023 | | 9,801 | | 9,698 | | 8,994 |
| | | | | | | | | | | | | | |
Hyperion Materials & Technologies, Inc. | (11) (13) | September 12, 2019 | Manufacturer of Cutting and Machine Tools & Specialty Polishing Compounds | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.50% (L+5.50%, Floor 1.00%) | 8/28/2026 | | 22,275 | | 21,894 | | 20,813 |
| | | | | | | | | | | | | | |
Ian, Evan & Alexander Corporation (EverWatch) | (10) | July 31, 2020 | Cybersecurity, Software and Data Analytics provider to the Intelligence Community | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.50% (L+8.50%, Floor 1.00%) | 7/31/2025 | | 16,529 | | 16,158 | | 16,158 |
| | | | | | | | | | | | | | |
Implus Footcare, LLC | (10) | June 1, 2017 | Provider of Footwear and Related Accessories | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.75% (L+7.75%, Floor 1.00%) | 4/30/2024 | | 18,890 | | 18,566 | | 17,172 |
| | | | | | | | | | | | | | |
Independent Pet Partners Intermediate Holdings, LLC | (10) | November 20, 2018 | Omnichannel Retailer of Specialty Pet Products | | | | | | | | | | | |
| | | | Secured Debt | (19) | | 6.31% PIK (L+6.00% PIK) | 12/22/2022 | | 6,111 | | 6,111 | | 6,111 |
| | | | Secured Debt | (19) | | 6.00% PIK | 11/20/2023 | | 16,670 | | 15,086 | | 15,086 |
| | | | Preferred Stock (non-voting) | | | | | | | | 3,235 | | 3,235 |
| | | | Preferred Stock (non-voting) | | | | | | | | - | | - |
| | | | Member Units | | 1,558,333 | | | | | | 1,558 | | - |
| | | | | | | | | | | | 25,990 | | 24,432 |
| | | | | | | | | | | | | | |
Industrial Services Acquisition, LLC | (10) | June 17, 2016 | Industrial Cleaning Services | | | | | | | | | | | |
| | | | Unsecured Debt | (19) | | 13.00% (6.00% Cash, 7.00% PIK) | 12/17/2022 | | 5,624 | | 5,579 | | 5,624 |
| | | | Preferred Member Units | (8) (19) (30) | 144 | 10.00% PIK | | | | | 112 | | 112 |
| | | | Preferred Member Units | (8) (19) (30) | 80 | 20.00% PIK | | | | | 71 | | 71 |
| | | | Member Units | (30) | 900 | | | | | | 900 | | 530 |
| | | | | | | | | | | | 6,662 | | 6,337 |
| | | | | | | | | | | | | | |
Inn of the Mountain Gods Resort and Casino | (11) | October 30, 2013 | Hotel & Casino Owner & Operator | | | | | | | | | | | |
| | | | Secured Debt | | | 9.25% | 11/30/2023 | | 6,677 | | 6,677 | | 6,677 |
| | | | | | | | | | | | | | |
Interface Security Systems, L.L.C | (10) | August 7, 2019 | Commercial Security & Alarm Services | | | | | | | | | | | |
| | | | Secured Debt | (9) (19) | | 11.75% (8.75% Cash, 3.00% PIK) (3.00% PIK + L+7.00%, Floor 1.75%) | 8/7/2023 | | 7,245 | | 7,145 | | 7,245 |
| | | | | | | | | | | | | | |
Intermedia Holdings, Inc. | (11) | August 3, 2018 | Unified Communications as a Service | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.00%, Floor 1.00%) | 7/19/2025 | | 20,839 | | 20,755 | | 20,823 |
| | | | | | | | | | | | | | |
Invincible Boat Company, LLC. | (10) | August 28, 2019 | Manufacturer of Sport Fishing Boats | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.00% (L+6.50%, Floor 1.50%) | 8/28/2025 | | 8,876 | | 8,793 | | 8,876 |
| | | | | | | | | | | | | | |
45
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 20162020
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dos Rios Partners(12)(13) | Investment Partnership | |||||||||||||
LP Interests (Dos Rios Partners, LP) (Fully diluted 20.2%) | 5,996 | 4,925 | ||||||||||||
LP Interests (Dos Rios Partners—A, LP) (Fully diluted 6.4%) | 1,904 | 1,444 | ||||||||||||
| | | | | | | | | | | | | | | |
| 7,900 | 6,369 | |||||||||||||
Dos Rios Stone Products LLC(10) | Limestone and Sandstone Dimension Cut Stone Mining Quarries | |||||||||||||
Class A Units (2,000,000 units)(8) | 2,000 | 2,070 | ||||||||||||
East Teak Fine Hardwoods, Inc. | Distributor of Hardwood Products | |||||||||||||
Common Stock (6,250 shares)(8) | 480 | 860 | ||||||||||||
East West Copolymer & Rubber, LLC | Manufacturer of Synthetic Rubbers | |||||||||||||
12% Current / 2% PIK Secured Debt (Maturity—October 17, 2019)(19) | 9,699 | 9,591 | 8,630 | |||||||||||
Warrants (2,510,790 equivalent units; Expiration—October 15, 2024; Strike price—$0.01 per unit) | 50 | — | ||||||||||||
| | | | | | | | | | | | | | | |
| 9,641 | 8,630 | |||||||||||||
EIG Fund Investments(12)(13) | Investment Partnership | |||||||||||||
LP Interests (EIG Global Private Debt fund-A, L.P.) (Fully diluted 11.1%)(8) | 2,804 | 2,804 | ||||||||||||
EIG Traverse Co-Investment, L.P.(12)(13) | Investment Partnership | |||||||||||||
LP Interests (Fully diluted 22.2%)(8) | 9,805 | 9,905 | ||||||||||||
Freeport Financial Funds(12)(13) | Investment Partnership | |||||||||||||
LP Interests (Freeport Financial SBIC Fund LP) (Fully diluted 9.3%)(8) | 5,974 | 5,620 | ||||||||||||
LP Interests (Freeport First Lien Loan Fund III LP) (Fully diluted 6.0%)(8) | 4,763 | 4,763 | ||||||||||||
| | | | | | | | | | | | | | | |
| 10,737 | 10,383 | |||||||||||||
Gault Financial, LLC (RMB Capital, LLC) | Purchases and Manages Collection of Healthcare and other Business Receivables | |||||||||||||
10% Current Secured Debt (Maturity—January 1, 2019) | 13,046 | 13,046 | 11,079 | |||||||||||
Warrants (29,025 equivalent units; Expiration—February 9, 2022; Strike price—$0.01 per unit) | 400 | — | ||||||||||||
| | | | | | | | | | | | | | | |
| 13,446 | 11,079 | |||||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
Isagenix International, LLC | (11) | June 21, 2018 | Direct Marketer of Health & Wellness Products | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.75% (L+5.75%, Floor 1.00%) | 6/14/2025 | | 5,572 | | 5,541 | | 3,130 |
| | | | | | | | | | | | | | |
Jackmont Hospitality, Inc. | (10) | May 26, 2015 | Franchisee of Casual Dining Restaurants | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.75% (L+6.75%, Floor 1.00%) | 5/26/2021 | | 3,954 | | 3,953 | | 3,157 |
| | | | | | | | | | | | | | |
Joerns Healthcare, LLC | (11) | April 3, 2013 | Manufacturer and Distributor of Health Care Equipment & Supplies | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.00%, Floor 1.00%) | 8/21/2024 | | 4,016 | | 3,955 | | 4,016 |
| | | | Common Stock | | 472,579 | | | | | | 4,429 | | 2,795 |
| | | | | | | | | | | | 8,384 | | 6,811 |
| | | | | | | | | | | | | | |
Kemp Technologies Inc. | (10) | June 27, 2019 | Provider of Application Delivery Controllers | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.50% (L+6.50%, Floor 1.00%) | 3/29/2024 | | 17,387 | | 17,088 | | 17,387 |
| | | | Common Stock | | 1,000,000 | | | | | | 1,550 | | 1,550 |
| | | | | | | | | | | | 18,638 | | 18,937 |
| | | | | | | | | | | | | | |
Klein Hersh, LLC | (10) | November 13, 2020 | Executive and C-Suite Placement for the Life Sciences and Healthcare Industries | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.75% (L+8.00%, Floor 0.75%) | 11/13/2025 | | 35,000 | | 34,098 | | 34,098 |
| | | | | | | | | | | | | | |
Kore Wireless Group Inc. | (11) | December 31, 2018 | Mission Critical Software Platform | | | | | | | | | | | |
| | | | Secured Debt | | | 5.75% (L+5.50%) | 12/20/2024 | | 19,090 | | 19,003 | | 18,828 |
| | | | | | | | | | | | | | |
Larchmont Resources, LLC | (11) | August 13, 2013 | Oil & Gas Exploration & Production | | | | | | | | | | | |
| | | | Secured Debt | (9) (19) | | 11.00% PIK (L+10.00% PIK, Floor 1.00%) | 8/9/2021 | | 2,185 | | 2,185 | | 983 |
| | | | Member Units | (30) | 2,828 | | | | | | 353 | | 113 |
| | | | | | | | | | | | 2,538 | | 1,096 |
| | | | | | | | | | | | | | |
Laredo Energy VI, LP | (10) | January 15, 2019 | Oil & Gas Exploration & Production | | | | | | | | | | | |
| | | | Member Units | | 1,155,952 | | | | | | 11,560 | | 10,238 |
| | | | | | | | | | | | | | |
Lightbox Holdings, L.P. | (11) | May 23, 2019 | Provider of Commercial Real Estate Software | | | | | | | | | | | |
| | | | Secured Debt | | | 5.15% (L+5.00%) | 5/9/2026 | | 14,813 | | 14,623 | | 14,368 |
| | | | | | | | | | | | | | |
LKCM Headwater Investments I, L.P. | (12) (13) | January 25, 2013 | Investment Partnership | | | | | | | | | | | |
| | | | LP Interests | (31) | 2.3% | | | | | | 1,746 | | 3,524 |
| | | | | | | | | | | | | | |
LL Management, Inc. | (10) | May 2, 2019 | Medical Transportation Service Provider | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.25% (L+7.25%, Floor 1.00%) | 9/25/2023 | | 16,504 | | 16,337 | | 16,504 |
| | | | | | | | | | | | | | |
Logix Acquisition Company, LLC | (10) | June 24, 2016 | Competitive Local Exchange Carrier | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.75% (L+5.75%, Floor 1.00%) | 12/22/2024 | | 26,131 | | 24,550 | | 24,171 |
| | | | | | | | | | | | | | |
Looking Glass Investments, LLC | (12) (13) | July 1, 2015 | Specialty Consumer | | | | | | | | | | | |
| | | | Member Units | | 3 | | | | | | 125 | | 25 |
| | | | | | | | | | | | | | |
46
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 20162020
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Glowpoint, Inc. | Provider of Cloud Managed Video Collaboration Services | |||||||||||||
12% Secured Debt (Maturity—October 18, 2018) | 9,000 | 8,949 | 3,997 | |||||||||||
Common Stock (7,711,517 shares)(26) | 3,958 | 2,080 | ||||||||||||
| | | | | | | | | | | | | | | |
| 12,907 | 6,077 | |||||||||||||
Guerdon Modular Holdings, Inc. | Multi-Family and Commercial Modular Construction Company | |||||||||||||
9% Current / 4% PIK Secured Debt (Maturity—August 13, 2019)(19) | 10,708 | 10,594 | 10,594 | |||||||||||
Preferred Stock (404,998 shares) | 1,140 | 1,140 | ||||||||||||
Common Stock (212,033 shares) | 2,983 | 80 | ||||||||||||
| | | | | | | | | | | | | | | |
| 14,717 | 11,814 | |||||||||||||
Hawk Ridge Systems, LLC(13) | Value-Added Reseller of Engineering Design and Manufacturing Solutions | |||||||||||||
10% Secured Debt (Maturity—December 2, 2021) | 10,000 | 9,901 | 9,901 | |||||||||||
Preferred Member Units (226 units)(8) | 2,850 | 2,850 | ||||||||||||
Preferred Member Units (HRS Services, ULC) (226 units) | 150 | 150 | ||||||||||||
| | | | | | | | | | | | | | | |
| 12,901 | 12,901 | |||||||||||||
Houston Plating and Coatings, LLC | Provider of Plating and Industrial Coating Services | |||||||||||||
Member Units (265,756 units) | 1,429 | 4,000 | ||||||||||||
I-45 SLF LLC(12)(13) | Investment Partnership | |||||||||||||
Member units (Fully diluted 20.0%; 24.4% profits interest)(8) | 14,200 | 14,586 | ||||||||||||
Indianhead Pipeline Services, LLC | Provider of Pipeline Support Services | |||||||||||||
12% Secured Debt (Maturity—February 6, 2017) | 5,100 | 5,079 | 5,079 | |||||||||||
Preferred Member Units (33,819 units; 8% cumulative)(8)(19) | 2,339 | 2,677 | ||||||||||||
Warrants (31,928 equivalent units; Expiration—August 6, 2022; Strike price—$0.001 per unit) | 459 | — | ||||||||||||
Member Units (14,732 units) | 1 | — | ||||||||||||
| | | | | | | | | | | | | | | |
| 7,878 | 7,756 | |||||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
LSF9 Atlantis Holdings, LLC | (11) | May 17, 2017 | Provider of Wireless Telecommunications Carrier Services | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.00%, Floor 1.00%) | 5/1/2023 | | 9,206 | | 9,206 | | 9,177 |
| | | | | | | | | | | | | | |
Lulu's Fashion Lounge, LLC | (10) | August 31, 2017 | Fast Fashion E-Commerce Retailer | | | | | | | | | | | |
| | | | Secured Debt | (9) (19) | | 10.50% (8.00% Cash, 2.50% PIK) (2.50% PIK + L+7.00%, Floor 1.00%) | 8/28/2022 | | 11,152 | | 10,983 | | 9,535 |
| | | | | | | | | | | | | | |
Lynx FBO Operating LLC | (10) | September 30, 2019 | Fixed Based Operator in the General Aviation Industry | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.25% (L+5.75%, Floor 1.50%) | 9/30/2024 | | 13,613 | | 13,369 | | 13,521 |
| | | | Member Units | | 4,872 | | | | | | 687 | | 780 |
| | | | | | | | | | | | 14,056 | | 14,301 |
| | | | | | | | | | | | | | |
Mac Lean-Fogg Company | (10) | April 22, 2019 | Manufacturer and Supplier for Auto and Power Markets | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 5.63% (L+5.00%, Floor 0.625%) | 12/22/2025 | | 17,251 | | 17,149 | | 17,251 |
| | | | Preferred Stock | (8) (19) | | 13.75% (4.50% Cash, 9.25% PIK) | | | 1,870 | | 1,870 | | 1,841 |
| | | | | | | | | | | | 19,019 | | 19,092 |
| | | | | | | | | | | | | | |
MHVC Acquisition Corp. | (11) | May 8, 2017 | Provider of Differentiated Information Solutions, Systems Engineering, and Analytics | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.25% (L+5.25%, Floor 1.00%) | 4/29/2024 | | 19,797 | | 19,716 | | 19,846 |
| | | | | | | | | | | | | | |
Mills Fleet Farm Group, LLC | (10) | October 24, 2018 | Omnichannel Retailer of Work, Farm and Lifestyle Merchandise | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.00%, Floor 1.00%) | 10/24/2024 | | 13,860 | | 13,595 | | 13,609 |
| | | | | | | | | | | | | | |
NBG Acquisition Inc | (11) | April 28, 2017 | Wholesaler of Home Décor Products | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.50% (L+5.50%, Floor 1.00%) | 4/26/2024 | | 4,070 | | 4,034 | | 3,399 |
| | | | | | | | | | | | | | |
NinjaTrader, LLC | (10) | December 18, 2019 | Operator of Futures Trading Platform | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 8.25% (L+6.75%, Floor 1.50%) | 12/18/2024 | | 16,875 | | 16,543 | | 16,849 |
| | | | | | | | | | | | | | |
NNE Partners, LLC | (10) | March 2, 2017 | Oil & Gas Exploration & Production | | | | | | | | | | | |
| | | | Secured Debt | (19) | | 9.48% (4.75% Cash, 4.50% PIK) (4.50% PIK + L+4.75%) | 12/31/2023 | | 23,683 | | 23,572 | | 21,025 |
| | | | | | | | | | | | | | |
Project Eagle Holdings, LLC | (10) | July 6, 2020 | Provider of Secure Business Collaboration Software | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.25% (L+8.25%, Floor 1.00%) | 7/6/2026 | | 14,963 | | 14,583 | | 14,583 |
| | | | | | | | | | | | | | |
Novetta Solutions, LLC | (11) | June 21, 2017 | Provider of Advanced Analytics Solutions for Defense Agencies | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.00% (L+5.00%, Floor 1.00%) | 10/17/2022 | | 22,912 | | 22,629 | | 22,864 |
| | | | | | | | | | | | | | |
47
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 20162020
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
KBK Industries, LLC | Manufacturer of Specialty Oilfield and Industrial Products | |||||||||||||
10% Secured Debt (Maturity—September 28, 2017) | 1,250 | 1,250 | 1,250 | |||||||||||
12.5% Secured Debt (Maturity—September 28, 2017) | 5,900 | 5,889 | 5,889 | |||||||||||
Member Units (250 units) | 341 | 2,780 | ||||||||||||
| | | | | | | | | | | | | | | |
| 7,480 | 9,919 | |||||||||||||
L.F. Manufacturing Holdings,LLC(10) | Manufacturer of Fiberglass Products | |||||||||||||
Member Units (2,179,001 units) | 2,019 | 1,380 | ||||||||||||
OnAsset Intelligence, Inc. | Provider of Transportation Monitoring / Tracking Products and Services | |||||||||||||
12% PIK Secured Debt (Maturity—December 31, 2015)(17)(19) | 4,519 | 4,519 | 4,519 | |||||||||||
Preferred Stock (912 shares) | 1,981 | — | ||||||||||||
Warrants (5,333 equivalent shares; Expiration—April 18, 2021; Strike price—$0.01 per share) | 1,919 | — | ||||||||||||
| | | �� | | | | | | | | | | | | |
| 8,419 | 4,519 | |||||||||||||
OPI International Ltd.(13) | Provider of Man Camp and Industrial Storage Services | |||||||||||||
10% Unsecured Debt (Maturity—April 8, 2018) | 473 | 473 | 473 | |||||||||||
Common Stock (20,766,317 shares) | 1,371 | 1,600 | ||||||||||||
| | | | | | | | | | | | | | | |
| 1,844 | 2,073 | |||||||||||||
PCI Holding Company, Inc. | Manufacturer of Industrial Gas Generating Systems | |||||||||||||
12% Secured Debt (Maturity—March 31, 2019) | 13,000 | 12,898 | 13,000 | |||||||||||
Preferred Stock (1,500,000 shares; 20% cumulative)(8)(19) | 3,379 | 5,370 | ||||||||||||
| | | | | | | | | | | | | | | |
| 16,277 | 18,370 | |||||||||||||
Rocaceia, LLC (Quality Lease and Rental Holdings, LLC) | Provider of Rigsite Accommodation Unit Rentals and Related Services | |||||||||||||
12% Secured Debt (Maturity—January 8, 2018)(14)(15) | 30,785 | 30,281 | 250 | |||||||||||
Preferred Member Units (250 units) | 2,500 | — | ||||||||||||
| | | | | | | | | | | | | | | |
| 32,781 | 250 | |||||||||||||
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
NTM Acquisition Corp. | (11) | July 12, 2016 | Provider of B2B Travel Information Content | | | | | | | | | | | |
| | | | Secured Debt | (9) (19) | | 8.25% (7.25% Cash, 1.00% PIK) (1.00%PIK + L+6.25%, Floor 1.00%) | 6/7/2024 | | 4,694 | | 4,694 | | 4,224 |
| | | | | | | | | | | | | | |
Ospemifene Royalty Sub LLC (QuatRx) | (10) | July 8, 2013 | Estrogen-Deficiency Drug Manufacturer and Distributor | | | | | | | | | | | |
| | | | Secured Debt | (14) | | 11.50% | 11/15/2026 | | 4,765 | | 4,765 | | 121 |
| | | | | | | | | | | | | | |
PaySimple, Inc. | (10) | September 9, 2019 | Leading Technology Services Commerce Platform | | | | | | | | | | | |
| | | | Secured Debt | | | 5.65% (L+5.50%) | 8/23/2025 | | 24,448 | | 24,225 | | 23,959 |
| | | | | | | | | | | | | | |
PricewaterhouseCoopers Public Sector LLP | (11) | May 24, 2018 | Provider of Consulting Services to Governments | | | | | | | | | | | |
| | | | Secured Debt | | | 8.15% (L+8.00%) | 5/1/2026 | | 9,000 | | 8,969 | | 9,000 |
| | | | | | | | | | | | | | |
PT Network, LLC | (10) | November 1, 2013 | Provider of Outpatient Physical Therapy and Sports Medicine Services | | | | | | | | | | | |
| | | | Secured Debt | (9) (19) | | 8.73% (6.73% Cash, 2.00% PIK) (2.00% PIK + L+5.50%, Floor 1.00%) | 11/30/2023 | | 8,601 | | 8,601 | | 8,601 |
| | | | | | | | | | | | | | |
Research Now Group, Inc. and Survey Sampling International, LLC | (11) | December 31, 2017 | Provider of Outsourced Online Surveying | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.50% (L+5.50%, Floor 1.00%) | 12/20/2024 | | 17,930 | | 17,497 | | 17,715 |
| | | | | | | | | | | | | | |
RM Bidder, LLC | (10) | November 12, 2015 | Scripted and Unscripted TV and Digital Programming Provider | | | | | | | | | | | |
| | | | Warrants | (26) | 187,161 | | 10/20/2025 | | | | 425 | | - |
| | | | Member Units | | 2,779 | | | | | | 46 | | 26 |
| | | | | | | | | | | | 471 | | 26 |
| | | | | | | | | | | | | | |
RTIC Subsidiary Holdings, LLC | (10) | September 1, 2020 | Direct-To-Consumer eCommerce Provider of Outdoor Products | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.00% (L+7.75%, Floor 1.25%) | 9/1/2025 | | 17,260 | | 17,026 | | 17,026 |
| | | | | | | | | | | | | | |
SAFETY Investment Holdings, LLC | | April 29, 2016 | Provider of Intelligent Driver Record Monitoring Software and Services | | | | | | | | | | | |
| | | | Member Units | | 2,000,000 | | | | | | 2,000 | | 2,350 |
| | | | | | | | | | | | | | |
Salient Partners L.P. | (11) | June 25, 2015 | Provider of Asset Management Services | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.00%, Floor 1.00%) | 8/31/2021 | | 6,450 | | 6,443 | | 4,542 |
| | | | | | | | | | | | | | |
Staples Canada ULC | (10) (13) (21) | September 14, 2017 | Office Supplies Retailer | | | | | | | | | | | |
| | | | Secured Debt | (9) (22) | | 8.00% (L+7.00%, Floor 1.00%) | 9/12/2024 | | 13,032 | | 12,896 | | 12,382 |
| | | | | | | | | | | | | | |
TEAM Public Choices, LLC | (10) | October 28, 2019 | Home-Based Care Employment Service Provider | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.00% (L+5.00%, Floor 1.00%) | 12/18/2027 | | 12,500 | | 12,126 | | 12,406 |
| | | | | | | | | | | | | | |
48
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 20162020
(dollars in thousands)
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Portfolio Company (1) (20) | | Investment Date (24) | Business Description | Type of Investment (2) (3) (15) | | Shares/Units | Rate | Maturity Date | Principal (4) | Cost (4) | Fair Value (18) | |||
Tectonic Financial, Inc. | | May 15, 2017 | Financial Services Organization | | | | | | | | | | | |
| | | | Common Stock | | 200,000 | | | | | | 2,000 | | 2,800 |
| | | | | | | | | | | | | | |
TGP Holdings III LLC | (11) | September 30, 2017 | Outdoor Cooking & Accessories | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.50% (L+8.50%, Floor 1.00%) | 9/25/2025 | | 5,500 | | 5,448 | | 5,307 |
| | | | | | | | | | | | | | |
The Pasha Group | (11) | February 2, 2018 | Diversified Logistics and Transportation Provided | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 9.00% (L+8.00%, Floor 1.00%) | 1/26/2023 | | 10,162 | | 9,585 | | 9,323 |
| | | | | | | | | | | | | | |
USA DeBusk LLC | (10) | October 22, 2019 | Provider of Industrial Cleaning Services | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.75% (L+5.75%, Floor 1.00%) | 10/22/2024 | | 24,948 | | 24,561 | | 24,591 |
| | | | | | | | | | | | | | |
U.S. TelePacific Corp. | (11) | September 14, 2016 | Provider of Communications and Managed Services | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 6.50% (L+5.50%, Floor 1.00%) | 5/2/2023 | | 17,088 | | 16,913 | | 15,486 |
| | | | | | | | | | | | | | |
Veregy Consolidated, Inc. | (11) | November 9, 2020 | Energy Service Company | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.00%, Floor 1.00%) | 11/3/2027 | | 15,000 | | 14,587 | | 14,888 |
| | | | | | | | | | | | | | |
Vida Capital, Inc | (11) | October 10, 2019 | Alternative Asset Manager | | | | | | | | | | | |
| | | | Secured Debt | | | 6.15% (L+6.00%) | 10/1/2026 | | 17,853 | | 17,626 | | 17,272 |
| | | | | | | | | | | | | | |
Vistar Media, Inc. | (10) | February 17, 2017 | Operator of Digital Out-of-Home Advertising Platform | | | | | | | | | | | |
| | | | Secured Debt | (9) (19) | | 12.00% (8.50% Cash, 3.50% PIK) (3.50% PIK + L+7.50%, Floor 1.00%) | 4/3/2023 | | 4,636 | | 4,513 | | 4,636 |
| | | | Preferred Stock | | 70,207 | | | | | | 767 | | 910 |
| | | | Warrants | (25) | 69,675 | | 4/3/2029 | | | | - | | 920 |
| | | | | | | | | | | | 5,280 | | 6,466 |
| | | | | | | | | | | | | | |
YS Garments, LLC | (11) | August 22, 2018 | Designer and Provider of Branded Activewear | | | | | | | | | | | |
| | | | Secured Debt | (9) | | 7.00% (L+6.00%, Floor 1.00%) | 8/9/2024 | | 13,997 | | 13,902 | | 12,911 |
| | | | | | | | | | | | | | |
Zilliant Incorporated | | June 15, 2012 | Price Optimization and Margin Management Solutions | | | | | | | | | | | |
| | | | Preferred Stock | | 186,777 | | | | | | 154 | | 260 |
| | | | Warrants | (28) | 952,500 | | 6/15/2022 | | | | 1,071 | | 1,190 |
| | | | | | | | | | | | 1,225 | | 1,450 |
| | | | | | | | | | | | | | |
Subtotal Non-Control/Non-Affiliate Investments (79.5% of net assets at fair value) | | | | | | | | | | | | 1,268,740 | | 1,204,840 |
| | | | | | | | | | | | | | |
Total Portfolio Investments, December 31, 2020 (177.2% of net assets at fair value) | | | | | | | | | | | $ | 2,516,709 | $ | 2,684,866 |
| |
(1) | All investments are Lower Middle Market portfolio investments, unless otherwise noted. See Note C for a description of Lower Middle Market portfolio investments. All of the Company’s investments, unless otherwise noted, are encumbered either as security for the Company’s Credit Facility or in support of the SBA-guaranteed debentures issued by the Funds. |
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Tin Roof Acquisition Company | Casual Restaurant Group | |||||||||||||
12% Secured Debt (Maturity—November 13, 2018) | 13,511 | 13,385 | 13,385 | |||||||||||
Class C Preferred Stock (Fully diluted 10.0%; 10% cumulative)(8)(19) | 2,738 | 2,738 | ||||||||||||
| | | | | | | | | | | | | | | |
| 16,123 | 16,123 | |||||||||||||
UniTek Global Services, Inc.(11) | Provider of Outsourced Infrastructure Services | |||||||||||||
LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—January 13, 2019)(9) | 5,021 | 5,010 | 5,021 | |||||||||||
LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—January 13, 2019)(9) | 824 | 824 | 824 | |||||||||||
15% PIK Unsecured Debt (Maturity—July 13, 2019)(19) | 745 | 745 | 745 | |||||||||||
Preferred Stock (4,935,377 shares; 13.5% cumulative)(8)(19) | 5,814 | 6,410 | ||||||||||||
Common Stock (705,054 shares) | — | 3,010 | ||||||||||||
| | | | | | | | | | | | | | | |
| 12,393 | 16,010 | |||||||||||||
Universal Wellhead Services Holdings, LLC(10) | Provider of Wellhead Equipment, Designs, and Personnel to the Oil & Gas Industry | |||||||||||||
Preferred Member Units (UWS Investments, LLC) (716,949 units) | 717 | 720 | ||||||||||||
Member Units (UWS Investments, LLC) (4,000,000 units) | 4,000 | 610 | ||||||||||||
| | | | | | | | | | | | | | | |
| 4,717 | 1,330 | |||||||||||||
Valley Healthcare Group, LLC | Provider of Durable Medical Equipment | |||||||||||||
LIBOR Plus 12.50% (Floor 0.50%), Current Coupon 13.12%, Secured Debt (Maturity—December 29, 2020)(9) | 12,956 | 12,844 | 12,844 | |||||||||||
Preferred Member Units (Valley Healthcare Holding, LLC) (1,600 units) | 1,600 | 1,600 | ||||||||||||
| | | | | | | | | | | | | | | |
| 14,444 | 14,444 | |||||||||||||
49
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 20162020
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Volusion, LLC | Provider of Online Software-as-a-Service eCommerce Solutions | |||||||||||||
11.5% Secured Debt (Maturity—January 26, 2020) | 17,500 | 15,298 | 15,298 | |||||||||||
Preferred Member Units (4,876,670 units) | 14,000 | 14,000 | ||||||||||||
Warrants (1,831,355 equivalent units; Expiration—January 26, 2025; Strike price—$0.01 per unit) | 2,576 | 2,576 | ||||||||||||
| | | | | | | | | | | | | | | |
| 31,874 | 31,874 | |||||||||||||
| | | | | | | | | | | | | | | |
Subtotal Affiliate Investments (18.8% of total investments at fair value) | $ | 394,699 | $ | 375,948 | ||||||||||
| | | | | | | | | | | | | | | |
(2) | Debt investments are income producing, unless otherwise noted. Equity and warrants are non-income producing, unless otherwise noted. |
(3) | See Note C and Schedule 12-14 for a summary of geographic location of portfolio companies. |
(4) | Principal is net of repayments. Cost is net of repayments and accumulated unearned income. |
(5) | Control investments are defined by the 1940 Act, as investments in which more than 25% of the voting securities are owned or where the ability to nominate greater than 50% of the board representation is maintained. |
(6) | Affiliate investments are defined by the 1940 Act as investments in which between 5% and 25% (inclusive) of the voting securities are owned and the investments are not classified as Control investments. |
(7) | Non-Control/Non-Affiliate investments are defined by the 1940 Act as investments that are neither Control investments nor Affiliate investments. |
(8) | Income producing through dividends or distributions. |
(9) | Index based floating interest rate is subject to contractual minimum interest rate. A majority of the variable rate loans in the Company’s investment portfolio bear interest at a rate that may be determined by reference to either LIBOR or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate), which typically resets semi-annually, quarterly, or monthly at the borrower’s option. The borrower may also elect to have multiple interest reset periods for each loan. For each such loan, the Company has provided the weighted average annual stated interest rate in effect at December 31, 2020. As noted in this schedule, 61% of the loans (based on the par amount) contain LIBOR floors which range between 0.50% and 2.00%, with a weighted-average LIBOR floor of approximately 1.11%. |
(10) | Private Loan portfolio investment. See Note C for a description of Private Loan portfolio investments. |
(11) | Middle Market portfolio investment. See Note C for a description of Middle Market portfolio investments. |
(12) | Other Portfolio investment. See Note C for a description of Other Portfolio investments. |
(13) | Investment is not a qualifying asset as defined under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. |
(14) | Non-accrual and non-income producing investment. |
(15) | All of the Company’s portfolio investments are generally subject to restrictions on resale as “restricted securities.” |
(16) | External Investment Manager. Investment is not encumbered as security for the Company's Credit Facility or in support of the SBA-guaranteed debentures issued by the Funds. |
(17) | Maturity date is under on-going negotiations with the portfolio company and other lenders, if applicable. |
(18) | Investment fair value was determined using significant unobservable inputs, unless otherwise noted. See Note C for further discussion. |
(19) | PIK interest income and cumulative dividend income represent income not paid currently in cash. |
(20) | All portfolio company headquarters are based in the United States, unless otherwise noted. |
(21) | Portfolio company headquarters are located outside of the United States. |
(22) | In connection with the Company's debt investment in Staples Canada ULC and in an attempt to mitigate any potential adverse change in foreign exchange rates during the term of the Company's investment, the Company maintains a forward foreign currency contract with Cadence Bank to lend $15.8 million Canadian Dollars and receive $12.0 million U.S. Dollars with a settlement date of September 14, 2021. The unrealized appreciation on the forward foreign currency contract is $0.4 million as of December 31, 2020. |
(23) | The Company has entered into an intercreditor agreement that entitles the Company to the "last out" tranche of the first lien secured loans, whereby the "first out" tranche will receive priority as to the "last out" tranche with respect to payments of principal, interest, and any other amounts due thereunder. Therefore, the Company receives a higher interest rate than the contractual stated interest rate of LIBOR plus 7.25% (Floor 1.25%) per the credit agreement and the Consolidated Schedule of Investments above reflects such higher rate. |
(24) | Investment date represents the date of initial investment in the portfolio company. |
(25) | Warrants are presented in equivalent shares with a strike price of $10.92 per share. |
(26) | Warrants are presented in equivalent units with a strike price of $14.28 per unit. |
(27) | Warrants are presented in equivalent shares/units with a strike price of $0.01 per share/unit. |
(28) | Warrants are presented in equivalent shares with a strike price of $0.001 per share. |
(29) | Warrants are presented in equivalent units with a strike price of $1.50 per unit. |
50
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 20162020
(dollars in thousands)
(30) | Shares/Units represent ownership in an underlying Real Estate or HoldCo entity. |
(31) | Investment is not unitized. Presentation is made in percent of fully diluted ownership unless otherwise indicated. |
(32) | Portfolio company is in a bankruptcy process and, as such, the maturity date of our debt investment in this portfolio company will not be finally determined until such process is complete. As noted in footnote (14), our debt investment in this portfolio company is on non-accrual status. |
51
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Non-Control/Non-Affiliate Investments(7) |
| |||||||||||||
Adams Publishing Group, LLC(10) | Local Newspaper Operator | |||||||||||||
LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—November 3, 2020)(9) | $ | 7,662 | $ | 7,544 | $ | 7,662 | ||||||||
Ahead, LLC(10) | IT Infrastructure Value Added Reseller | |||||||||||||
LIBOR Plus 6.50%, Current Coupon 7.50%, Secured Debt (Maturity—November 2, 2020) | 14,250 | 13,906 | 14,303 | |||||||||||
Allflex Holdings III Inc.(11) | Manufacturer of Livestock Identification Products | |||||||||||||
LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—July 19, 2021)(9) | 14,795 | 14,706 | 14,809 | |||||||||||
American Scaffold Holdings, Inc.(10) | Marine Scaffolding Service Provider | |||||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—March 31, 2022)(9) | 7,359 | 7,258 | 7,323 | |||||||||||
American Seafoods Group, LLC(11) | Catcher and Processor of Alaskan Pollock | |||||||||||||
LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—August 19, 2021)(9) | 9,634 | 9,624 | 9,634 | |||||||||||
American Teleconferencing Services, Ltd.(11) | Provider of Audio Conferencing and Video Collaboration Solutions | |||||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—December 8, 2021)(9) | 11,163 | 10,345 | 10,933 | |||||||||||
LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity—June 6, 2022)(9) | 3,714 | 3,569 | 3,569 | |||||||||||
| | | | | | | | | | | | | | | |
| 13,914 | 14,502 | |||||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2016
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Anchor Hocking, LLC(11) | Household Products Manufacturer | |||||||||||||
LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—June 4, 2018)(9) | 2,277 | 2,277 | 2,231 | |||||||||||
Member Units (440,620 units) | 4,928 | 3,305 | ||||||||||||
| | | | | | | | | | | | | | | |
| 7,205 | 5,536 | |||||||||||||
AP Gaming I, LLC(10) | Developer, Manufacturer, and Operator of Gaming Machines | |||||||||||||
LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—December 20, 2020)(9) | 7,209 | 7,099 | 7,194 | |||||||||||
Apex Linen Service, Inc. | Industrial Launderers | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—October 30, 2022)(9) | 2,400 | 2,400 | 2,400 | |||||||||||
13% Secured Debt (Maturity—October 30, 2022) | 14,416 | 14,337 | 14,337 | |||||||||||
| | | | | | | | | | | | | | | |
| 16,737 | 16,737 | |||||||||||||
Applied Products, Inc.(10) | Adhesives Distributor | |||||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—September 30, 2019)(9) | 3,527 | 3,499 | 3,518 | |||||||||||
Arcus Hunting LLC.(10) | Manufacturer of Bowhunting and Archery Products and Accessories | |||||||||||||
LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—November 13, 2019)(9) | 13,947 | 13,796 | 13,947 | |||||||||||
Artel, LLC(11) | Provider of Secure Satellite Network and IT Solutions | |||||||||||||
LIBOR Plus 7.00% (Floor 1.25%), Current Coupon 8.25%, Secured Debt (Maturity—November 27, 2017)(9) | 7,050 | 6,920 | 6,592 | |||||||||||
ATI Investment Sub, Inc.(11) | Manufacturer of Solar Tracking Systems | |||||||||||||
LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—June 22, 2021)(9) | 9,500 | 9,322 | 9,476 | |||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2016
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
ATS Workholding, Inc.(10) | Manufacturer of Machine Cutting Tools and Accessories | |||||||||||||
LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity—March 10, 2019)(9) | 6,173 | 6,146 | 5,924 | |||||||||||
ATX Networks Corp.(11)(13)(21) | Provider of Radio Frequency Management Equipment | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—June 11, 2021)(9) | 11,790 | 11,604 | 11,584 | |||||||||||
Berry Aviation, Inc.(10) | Airline Charter Service Operator | |||||||||||||
13.75% Secured Debt (Maturity—January 30, 2020) | 5,627 | 5,588 | 5,627 | |||||||||||
Common Stock (553 shares) | 400 | 820 | ||||||||||||
| | | | | | | | | | | | | | | |
| 5,988 | 6,447 | |||||||||||||
Bluestem Brands, Inc.(11) | Multi-Channel Retailer of General Merchandise | |||||||||||||
LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—November 6, 2020)(9) | 12,880 | 12,635 | 11,227 | |||||||||||
Brainworks Software, LLC(10) | Advertising Sales and Newspaper Circulation Software | |||||||||||||
Prime Plus 9.25% (Floor 3.25%), Current Coupon 13.00%, Secured Debt (Maturity—July 22, 2019)(9) | 6,733 | 6,684 | 6,733 | |||||||||||
Brightwood Capital Fund Investments(12)(13) | Investment Partnership | |||||||||||||
LP Interests (Brightwood Capital Fund III, LP) (Fully diluted 1.6%)(8) | 12,000 | 11,094 | ||||||||||||
LP Interests (Brightwood Capital Fund IV, LP) (Fully diluted 0.9%) | 500 | 500 | ||||||||||||
| | | | | | | | | | | | | | | |
| 12,500 | 11,594 | |||||||||||||
Brundage-Bone Concrete Pumping, Inc.(11) | Construction Services Provider | |||||||||||||
10.375% Secured Debt (Maturity—September 1, 2021) | 3,000 | 2,985 | 3,240 | |||||||||||
California Pizza Kitchen, Inc.(11) | Casual Restaurant Group | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—August 23, 2022)(9) | 4,988 | 4,940 | 4,976 | |||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2016
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Cenveo Corporation(11) | Provider of Commercial Printing, Envelopes, Labels, and Printed Office Products | |||||||||||||
6% Secured Debt (Maturity—August 1, 2019) | 13,130 | 11,097 | 11,719 | |||||||||||
CDHA Management, LLC(10) | Dental Services | |||||||||||||
LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—December 5, 2021)(9) | 4,491 | 4,415 | 4,415 | |||||||||||
Charlotte Russe, Inc(11) | Fast-Fashion Retailer to Young Women | |||||||||||||
LIBOR Plus 5.50% (Floor 1.25%), Current Coupon 6.75%, Secured Debt (Maturity—May 22, 2019)(9) | 14,346 | 14,141 | 8,724 | |||||||||||
Clarius BIGS, LLC(10) | Prints & Advertising Film Financing | |||||||||||||
15% PIK Secured Debt (Maturity—January 5, 2015)(14)(17) | 2,928 | 2,928 | 88 | |||||||||||
Compact Power Equipment, Inc. | Equipment / Tool Rental | |||||||||||||
12% Secured Debt (Maturity—October 1, 2017) | 4,100 | 4,095 | 4,100 | |||||||||||
Series A Preferred Stock (4,298,435 shares) | 1,079 | 4,180 | ||||||||||||
| | | | | | | | | | | | | | | |
| 5,174 | 8,280 | |||||||||||||
Compuware Corporation(11) | Provider of Software and Supporting Services | |||||||||||||
LIBOR Plus 5.25% (Floor 1.00%), Current Coupon 6.25%, Secured Debt (Maturity—December 15, 2019)(9) | 8,345 | 8,187 | 8,398 | |||||||||||
Construction Supply Investments, LLC(10) | Distribution Platform of Specialty Construction Materials to Professional Concrete and Masonry Contractors | |||||||||||||
LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity—June 30, 2023)(9) | 8,500 | 8,416 | 8,416 | |||||||||||
Member Units (20,000 units) | 2,000 | 2,000 | ||||||||||||
| | | | | | | | | | | | | | | |
| 10,416 | 10,416 | |||||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2016
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
ContextMedia Health, LLC(11) | Provider of Healthcare Media Content | |||||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—December 23, 2021)(9) | 8,000 | 7,201 | 7,320 | |||||||||||
Covenant Surgical Partners, Inc.(11) | Ambulatory Surgical Centers | |||||||||||||
8.75% Secured Debt (Maturity—August 1, 2019) | 800 | 800 | 772 | |||||||||||
CRGT Inc.(11) | Provider of Custom Software Development | |||||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—December 19, 2020)(9) | 6,366 | 6,286 | 6,382 | |||||||||||
CST Industries Inc.(11) | Storage Tank Manufacturer | |||||||||||||
LIBOR Plus 6.25% (Floor 1.50%), Current Coupon 7.75%, Secured Debt (Maturity—May 22, 2017)(9) | 9,102 | 9,084 | 9,102 | |||||||||||
Darr Equipment LP(10) | Heavy Equipment Dealer | |||||||||||||
12% Current / 2% PIK Secured Debt (Maturity—April 15, 2020)(19) | 21,130 | 20,697 | 20,748 | |||||||||||
Warrants (915,734 equivalent units; Expiration—April 15, 2024; Strike price—$1.50 per unit) | 474 | 10 | ||||||||||||
| | | | | | | | | | | | | | | |
| 21,171 | 20,758 | |||||||||||||
Digital River, Inc.(11) | Provider of Outsourced e-Commerce Solutions and Services | |||||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—February 12, 2021)(9) | 15,184 | 15,086 | 15,317 | |||||||||||
Digital Room LLC(11) | Pure-Play e-Commerce Print Business | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—November 21, 2022)(9) | 7,625 | 7,475 | 7,549 | |||||||||||
Drilling Info Holdings, Inc. | Information Services for the Oil and Gas Industry | |||||||||||||
Common Stock (3,788,865 shares) | 1,335 | 10,410 | ||||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2016
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
ECP-PF Holdings Group, Inc.(10) | Fitness Club Operator | |||||||||||||
LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—November 26, 2019)(9) | 5,625 | 5,589 | 5,625 | |||||||||||
EnCap Energy Fund Investments(12)(13) | Investment Partnership | |||||||||||||
LP Interests (EnCap Energy Capital Fund VIII, L.P.) (Fully diluted 0.1%)(8) | 3,877 | 1,955 | ||||||||||||
LP Interests (EnCap Energy Capital Fund VIII Co-Investors, L.P.) (Fully diluted 0.4%) | 2,200 | 1,225 | ||||||||||||
LP Interests (EnCap Energy Capital Fund IX, L.P.) (Fully diluted 0.1%)(8) | 3,957 | 3,680 | ||||||||||||
LP Interests (Encap Energy Capital Fund X, L.P.) (Fully diluted 0.1%) | 3,039 | 3,039 | ||||||||||||
LP Interests (EnCap Flatrock Midstream Fund II, L.P.) (Fully diluted 0.8%)(8) | 9,116 | 10,452 | ||||||||||||
LP Interests (EnCap Flatrock Midstream Fund III, L.P.) (Fully diluted 0.2%)(8) | 2,513 | 2,461 | ||||||||||||
| | | | | | | | | | | | | | | |
| 24,702 | 22,812 | |||||||||||||
Evergreen Skills Lux S.á r.l. (d/b/a Skillsoft)(11)(13) | Technology-based Performance Support Solutions | |||||||||||||
LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—April 28, 2022)(9) | 7,000 | 6,857 | 5,274 | |||||||||||
Flavors Holdings Inc.(11) | Global Provider of Flavoring and Sweetening Products and Solutions | |||||||||||||
LIBOR Plus 5.75% (Floor 1.00%), Current Coupon 6.75%, Secured Debt (Maturity—April 3, 2020)(9) | 12,483 | 12,082 | 10,174 | |||||||||||
GI KBS Merger Sub LLC(11) | Outsourced Janitorial Services to Retail/Grocery Customers | |||||||||||||
LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—October 29, 2021)(9) | 3,900 | 3,851 | 3,842 | |||||||||||
LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—April 29, 2022)(9) | 800 | 787 | 760 | |||||||||||
| | | | | | | | | | | | | | | |
| 4,638 | 4,602 | |||||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2016
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Grace Hill, LLC(10) | Online Training Tools for the Multi-Family Housing Industry | |||||||||||||
Prime Plus 5.25% (Floor 1.00%), Current Coupon 9.00%, Secured Debt (Maturity—August 15, 2019)(9) | 634 | 623 | 634 | |||||||||||
LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—August 15, 2019)(9) | 11,552 | 11,472 | 11,552 | |||||||||||
| | | | | | | | | | | | | | | |
| 12,095 | 12,186 | |||||||||||||
Great Circle Family Foods, LLC(10) | Quick Service Restaurant Franchise | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—October 28, 2019)(9) | 7,648 | 7,598 | 7,648 | |||||||||||
Grupo Hima San Pablo, Inc.(11) | Tertiary Care Hospitals | |||||||||||||
LIBOR Plus 7.00% (Floor 1.50%), Current Coupon 8.50%, Secured Debt (Maturity—January 31, 2018)(9) | 4,813 | 4,787 | 3,734 | |||||||||||
13.75% Secured Debt (Maturity—July 31, 2018) | 2,000 | 1,962 | 1,205 | |||||||||||
| | | | | | | | | | | | | | | |
| 6,749 | 4,939 | |||||||||||||
GST Autoleather, Inc.(11) | Automotive Leather Manufacturer | |||||||||||||
LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—July 10, 2020)(9) | 13,317 | 13,215 | 13,017 | |||||||||||
Guitar Center, Inc.(11) | Musical Instruments Retailer | |||||||||||||
6.5% Secured Debt (Maturity—April 15, 2019) | 14,625 | 13,890 | 13,272 | |||||||||||
Hojeij Branded Foods, LLC(10) | Multi-Airport, Multi-Concept Restaurant Operator | |||||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—July 27, 2021)(9) | 5,432 | 5,390 | 5,432 | |||||||||||
Hoover Group, Inc.(10)(13) | Provider of Storage Tanks and Related Products to the Energy and Petrochemical Markets | |||||||||||||
LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—January 28, 2021)(9) | 8,546 | 7,963 | 7,963 | |||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2016
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Horizon Global Corporation(11)(13) | Auto Parts Manufacturer | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—June 30, 2021)(9) | 9,375 | 9,249 | 9,551 | |||||||||||
Hostway Corporation(11) | Managed Services and Hosting Provider | |||||||||||||
LIBOR Plus 6.75% (Floor 1.25%), Current Coupon 8.00%, Secured Debt (Maturity—December 13, 2019)(9) | 10,577 | 10,515 | 10,028 | |||||||||||
Hunter Defense Technologies, Inc.(11) | Provider of Military and Commercial Shelters and Systems | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—August 5, 2019)(9) | 9,606 | 9,120 | 8,933 | |||||||||||
Hygea Holdings, Corp.(10) | Provider of Physician Services | |||||||||||||
LIBOR Plus 9.25%, Current Coupon 10.17%, Secured Debt (Maturity—February 24, 2019) | 7,875 | 7,381 | 7,615 | |||||||||||
Warrants (5,990,452 equivalent shares; Expiration—February 24, 2023; Strike price—$0.01 per share) | 369 | 1,530 | ||||||||||||
| | | | | | | | | | | | | | | |
| 7,750 | 9,145 | |||||||||||||
iEnergizer Limited(11)(13)(21) | Provider of Business Outsourcing Solutions | |||||||||||||
LIBOR Plus 6.00% (Floor 1.25%), Current Coupon 7.25%, Secured Debt (Maturity—May 1, 2019)(9) | 9,918 | 9,467 | 9,621 | |||||||||||
Indivior Finance LLC(11)(13) | Specialty Pharmaceutical Company Treating Opioid Dependence | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—December 19, 2019)(9) | 6,750 | 6,455 | 6,809 | |||||||||||
Industrial Container Services, LLC(10) | Steel Drum Reconditioner | |||||||||||||
LIBOR Plus 5.75% (Floor 1.00%), Current Coupon 6.75%, Secured Debt (Maturity—December 31, 2018)(9) | 8,949 | 8,932 | 8,949 | |||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2016
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Industrial Services Acquisition, LLC(10) | Industrial Cleaning Services | |||||||||||||
11.25% Current / 0.75% PIK Unsecured Debt (Maturity—December 17, 2022)(19) | 4,519 | 4,433 | 4,433 | |||||||||||
Member Units (Industrial Services Investments, LLC) (900,000 units) | 900 | 900 | ||||||||||||
| | | | | | | | | | | | | | | |
| 5,333 | 5,333 | |||||||||||||
Infinity Acquisition Finance Corp.(11) | Application Software for Capital Markets | |||||||||||||
7.25% Unsecured Debt (Maturity—August 1, 2022) | 5,700 | 5,366 | 4,802 | |||||||||||
Inn of the Mountain Gods Resort and Casino(11) | Hotel & Casino Owner & Operator | |||||||||||||
9.25% Secured Debt (Maturity—November 30, 2020) | 6,249 | 5,924 | 5,687 | |||||||||||
Intertain Group Limited(11)(13)(21) | Business-to-Consumer Online Gaming Operator | |||||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—April 8, 2022)(9) | 4,426 | 4,364 | 4,465 | |||||||||||
iPayment, Inc.(11) | Provider of Merchant Acquisition | |||||||||||||
LIBOR Plus 5.25% (Floor 1.50%), Current Coupon 6.75%, Secured Debt (Maturity—May 8, 2017)(9) | 14,918 | 14,907 | 14,395 | |||||||||||
iQor US Inc.(11) | Business Process Outsourcing Services Provider | |||||||||||||
LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—April 1, 2021)(9) | 9,812 | 9,671 | 9,413 | |||||||||||
irth Solutions, LLC | Provider of Damage Prevention Information Technology Services | |||||||||||||
Member Units (27,893 units) | 1,441 | 1,790 | ||||||||||||
Jackmont Hospitality, Inc.(10) | Franchisee of Casual Dining Restaurants | |||||||||||||
LIBOR Plus 4.25% (Floor 1.00%), Current Coupon 5.25% / 2.50% PIK, Current Coupon Plus PIK 7.75%, Secured Debt (Maturity—May 26, 2021)(9)(19) | 4,445 | 4,429 | 4,445 | |||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2016
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Joerns Healthcare, LLC(11) | Manufacturer and Distributor of Health Care Equipment & Supplies | |||||||||||||
LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—May 9, 2020)(9) | 14,655 | 14,560 | 13,776 | |||||||||||
JSS Holdings, Inc.(11) | Aircraft Maintenance Program Provider | |||||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—August 31, 2021)(9) | 12,829 | 12,562 | 12,765 | |||||||||||
Kendra Scott, LLC(11) | Jewelry Retail Stores | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—July 17, 2020)(9) | 5,578 | 5,536 | 5,550 | |||||||||||
Keypoint Government Solutions, Inc.(11) | Provider of Pre-Employment Screening Services | |||||||||||||
LIBOR Plus 6.50% (Floor 1.25%), Current Coupon 7.75%, Secured Debt (Maturity—November 13, 2017)(9) | 5,459 | 5,443 | 5,431 | |||||||||||
LaMi Products, LLC(10) | General Merchandise Distribution | |||||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—September 16, 2020)(9) | 10,735 | 10,658 | 10,735 | |||||||||||
Larchmont Resources, LLC(11) | Oil & Gas Exploration & Production | |||||||||||||
LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, PIK Secured Debt (Maturity—August 7, 2020)(9)(19) | 2,260 | 2,260 | 2,209 | |||||||||||
Member Units (Larchmont Intermediate Holdco, LLC) (2,828 units) | 353 | 1,193 | ||||||||||||
| | | | | | | | | | | | | | | |
| 2,613 | 3,402 | |||||||||||||
LKCM Headwater Investments I, L.P.(12)(13) | Investment Partnership | |||||||||||||
LP Interests (Fully diluted 2.3%) | 2,500 | 3,627 | ||||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2016
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Logix Acquisition Company, LLC(10) | Competitive Local Exchange Carrier | |||||||||||||
LIBOR Plus 8.28% (Floor 1.00%), Current Coupon 9.28%, Secured Debt (Maturity—June 24, 2021)(9)(22) | 8,593 | 8,457 | 8,593 | |||||||||||
Looking Glass Investments, LLC(12)(13) | Specialty Consumer Finance | |||||||||||||
9% Unsecured Debt (Maturity—June 30, 2020) | 188 | 188 | 188 | |||||||||||
Member Units (2.5 units) | 125 | 125 | ||||||||||||
Member Units (LGI Predictive Analytics LLC) (190,712 units)(8) | 160 | 160 | ||||||||||||
| | | | | | | | | | | | | | | |
| 473 | 473 | |||||||||||||
Messenger, LLC(10) | Supplier of Specialty Stationery and Related Products to the Funeral Industry | |||||||||||||
LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—September 9, 2020)(9) | 14,403 | 14,326 | 14,403 | |||||||||||
Minute Key, Inc. | Operator of Automated Key Duplication Kiosks | |||||||||||||
10% Current / 2% PIK Secured Debt (Maturity—September 19, 2019)(19) | 15,700 | 15,404 | 15,404 | |||||||||||
Warrants (1,437,409 equivalent shares; Expiration—May 20, 2025; Strike price—$0.01 per share) | 280 | 470 | ||||||||||||
| | | | | | | | | | | | | | | |
| 15,684 | 15,874 | |||||||||||||
Mood Media Corporation(11)(13) | Provider of Electronic Equipment | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—May 1, 2019)(9) | 14,805 | 14,645 | 14,312 | |||||||||||
New Media Holdings II LLC(11)(13) | Local Newspaper Operator | |||||||||||||
LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—June 4, 2020)(9) | 14,888 | 14,632 | 14,813 | |||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2016
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
North American Lifting Holdings, Inc.(11) | Crane Service Provider | |||||||||||||
LIBOR Plus 4.50% (Floor 1.00%), Current Coupon 5.50%, Secured Debt (Maturity—November 27, 2020)(9) | 3,865 | 3,235 | 3,375 | |||||||||||
North Atlantic Trading Company, Inc.(11) | Marketer/Distributor of Tobacco Products | |||||||||||||
LIBOR Plus 6.50% (Floor 1.25%), Current Coupon 7.75%, Secured Debt (Maturity—January 13, 2020)(9) | 9,396 | 9,343 | 9,337 | |||||||||||
Novitex Intermediate, LLC(11) | Provider of Document Management Services | |||||||||||||
LIBOR Plus 6.75% (Floor 1.25%), Current Coupon 8.00%, Secured Debt (Maturity—July 7, 2020)(9) | 9,335 | 9,175 | 8,985 | |||||||||||
NTM Acquisition Corp.(11) | Provider of B2B Travel Information Content | |||||||||||||
LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—June 7, 2022)(9) | 4,144 | 4,085 | 4,128 | |||||||||||
Ospemifene Royalty Sub LLC (QuatRx)(10) | Estrogen-Deficiency Drug Manufacturer and Distributor | |||||||||||||
11.5% Secured Debt (Maturity—November 15, 2026)(14) | 5,071 | 5,071 | 2,088 | |||||||||||
Pardus Oil and Gas, LLC(11) | Oil & Gas Exploration & Production | |||||||||||||
13% PIK Secured Debt (Maturity—November 12, 2021)(19) | 1,869 | 1,869 | 1,869 | |||||||||||
5% PIK Secured Debt (Maturity—May 13, 2022)(19) | 992 | 992 | 562 | |||||||||||
Member Units (2,472 units) | 2,472 | 970 | ||||||||||||
| | | | | | | | | | | | | | | |
| 5,333 | 3,401 | |||||||||||||
Paris Presents Incorporated(11) | Branded Cosmetic and Bath Accessories | |||||||||||||
LIBOR Plus 8.75% (Floor 1.00%), Current Coupon 9.75%, Secured Debt (Maturity—December 31, 2021)(9) | 2,000 | 1,969 | 1,960 | |||||||||||
Parq Holdings Limited Partnership(11)(13)(21) | Hotel & Casino Operator | |||||||||||||
LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—December 17, 2020)(9) | 7,500 | 7,394 | 7,388 | |||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2016
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Permian Holdco 2, Inc.(11) | Storage Tank Manufacturer | |||||||||||||
14% PIK Unsecured Debt (Maturity—October 15, 2021)(19) | 198 | 198 | 198 | |||||||||||
Preferred Stock (Permian Holdco 1, Inc.) (154,558 units) | 799 | 799 | ||||||||||||
Common Stock (Permian Holdco 1, Inc.) (154,558 units) | — | — | ||||||||||||
| | | | | | | | | | | | | | | |
| 997 | 997 | |||||||||||||
Pernix Therapeutics Holdings, Inc.(10) | Pharmaceutical Royalty | |||||||||||||
12% Secured Debt (Maturity—August 1, 2020) | 3,447 | 3,447 | 3,326 | |||||||||||
Pet Holdings ULC(11)(13)(21) | Retailer of Pet Products and Supplies to Consumers | |||||||||||||
LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—July 5, 2022)(9) | 2,494 | 2,470 | 2,503 | |||||||||||
Pike Corporation(11) | Construction and Maintenance Services for Electric Transmission and Distribution Infrastructure | |||||||||||||
LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—June 22, 2022)(9) | 14,000 | 13,720 | 14,082 | |||||||||||
Point.360(10) | Fully Integrated Provider of Digital Media Services | |||||||||||||
Warrants (65,463 equivalent shares; Expiration—July 7, 2020; Strike price—$0.75 per share) | 69 | — | ||||||||||||
Common Stock (163,658 shares) | 273 | 63 | ||||||||||||
| | | | | | | | | | | | | | | |
| 342 | 63 | |||||||||||||
Polycom, Inc.(11) | Provider of Audio and Video Communication Solutions | |||||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—September 27, 2023)(9) | 12,089 | 11,617 | 12,194 | |||||||||||
PPC/SHIFT LLC(10) | Provider of Digital Solutions to Automotive Industry | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—June 6, 2022)(9) | 7,000 | 6,852 | 6,852 | |||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2016
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Prowler Acquisition Corp.(11) | Specialty Distributor to the Energy Sector | |||||||||||||
LIBOR Plus 4.50% (Floor 1.00%), Current Coupon 5.50%, Secured Debt (Maturity—January 28, 2020)(9) | 9,519 | 7,904 | 7,044 | |||||||||||
PT Network, LLC(10) | Provider of Outpatient Physical Therapy and Sports Medicine Services | |||||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—November 30, 2021)(9) | 16,225 | 15,979 | 15,979 | |||||||||||
QBS Parent, Inc.(11) | Provider of Software and Services to the Oil & Gas Industry | |||||||||||||
LIBOR Plus 4.75% (Floor 1.00%), Current Coupon 5.75%, Secured Debt (Maturity—August 7, 2021)(9) | 11,274 | 11,201 | 11,161 | |||||||||||
Raley's(11) | Family-Owned Supermarket Chain | |||||||||||||
LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—May 18, 2022)(9) | 4,195 | 4,125 | 4,242 | |||||||||||
Redbox Automated Retail, LLC(11) | Operator of Home Media Entertainment Kiosks | |||||||||||||
LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—September 27, 2021)(9) | 15,000 | 14,581 | 14,629 | |||||||||||
Renaissance Learning, Inc.(11) | Technology-based K-12 Learning Solutions | |||||||||||||
LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—April 11, 2022)(9) | 3,000 | 2,978 | 2,987 | |||||||||||
RGL Reservoir Operations Inc.(11)(13)(21) | Oil & Gas Equipment and Services | |||||||||||||
LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—August 13, 2021)(9) | 3,910 | 3,826 | 880 | |||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2016
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
RM Bidder, LLC(10) | Scripted and Unscripted TV and Digital Programming Provider | |||||||||||||
Warrants (327,532 equivalent units; Expiration—October 20, 2025; Strike price—$14.28 per unit) | 425 | 300 | ||||||||||||
Member Units (2,779 units) | 46 | 44 | ||||||||||||
| | | | | | | | | | | | | | | |
| 471 | 344 | |||||||||||||
SAExploration, Inc.(10)(13)(21) | Geophysical Services Provider | |||||||||||||
Common Stock (50 shares) | 65 | 3 | ||||||||||||
SAFETY Investment Holdings, LLC | Provider of Intelligent Driver Record Monitoring Software and Services | |||||||||||||
Member Units (2,000,000 units) | 2,000 | 2,000 | ||||||||||||
Salient Partners L.P.(11) | Provider of Asset Management Services | |||||||||||||
LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—June 9, 2021)(9) | 10,812 | 10,538 | 10,352 | |||||||||||
School Specialty, Inc.(11) | Distributor of Education Supplies and Furniture | |||||||||||||
LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—June 11, 2019)(9) | 5,712 | 5,632 | 5,784 | |||||||||||
Sigma Electric Manufacturing Corporation(10)(13) | Manufacturer and Distributor of Electrical Fittings and Parts | |||||||||||||
LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—October 13, 2021)(9) | 12,500 | 12,200 | 12,200 | |||||||||||
Sorenson Communications, Inc.(11) | Manufacturer of Communication Products for Hearing Impaired | |||||||||||||
LIBOR Plus 5.75% (Floor 2.25%), Current Coupon 8.00%, Secured Debt (Maturity—April 30, 2020)(9) | 13,371 | 13,283 | 13,271 | |||||||||||
Strike, LLC(11) | Pipeline Construction and Maintenance Services | |||||||||||||
LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.00%, Secured Debt (Maturity—November 30, 2022)(9) | 10,000 | 9,666 | 9,864 | |||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2016
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Subsea Global Solutions, LLC(10) | Underwater Maintenance and Repair Services | |||||||||||||
LIBOR Plus 6.00% (Floor 1.50%), Current Coupon 7.50%, Secured Debt (Maturity—March 17, 2020)(9) | 5,629 | 5,588 | 5,624 | |||||||||||
Synagro Infrastructure Company, Inc(11) | Waste Management Services | |||||||||||||
LIBOR Plus 5.25% (Floor 1.00%), Current Coupon 6.25%, Secured Debt (Maturity—August 22, 2020)(9) | 4,714 | 4,659 | 4,136 | |||||||||||
Targus International, LLC(11) | Distributor of Protective Cases for Mobile Devices | |||||||||||||
15% PIK Secured Debt (Maturity—December 31, 2019)(19) | 1,140 | 1,140 | 1,140 | |||||||||||
Common Stock (Targus Cayman HoldCo Limited) (249,614 shares)(13) | 2,555 | 2,260 | ||||||||||||
| | | | | | | | | | | | | | | |
| 3,695 | 3,400 | |||||||||||||
TE Holdings, LLC(11) | Oil & Gas Exploration & Production | |||||||||||||
Member Units (97,048 units) | 970 | 728 | ||||||||||||
TeleGuam Holdings, LLC(11) | Cable and Telecom Services Provider | |||||||||||||
LIBOR Plus 4.00% (Floor 1.25%), Current Coupon 5.25%, Secured Debt (Maturity—December 10, 2018)(9) | 7,622 | 7,613 | 7,546 | |||||||||||
LIBOR Plus 7.50% (Floor 1.25%), Current Coupon 8.75%, Secured Debt (Maturity—June 10, 2019)(9) | 10,500 | 10,442 | 10,290 | |||||||||||
| | | | | | | | | | | | | | | |
| 18,055 | 17,836 | |||||||||||||
The Topps Company, Inc.(11) | Trading Cards & Confectionary | |||||||||||||
LIBOR Plus 6.00% (Floor 1.25%), Current Coupon 7.25%, Secured Debt (Maturity—October 2, 2020)(9) | 2,218 | 2,208 | 2,226 | |||||||||||
TMC Merger Sub Corp.(11) | Refractory & Maintenance Services Provider | |||||||||||||
LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—October 31, 2022)(9)(23) | 12,500 | 12,376 | 12,438 | |||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2016
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
TOMS Shoes, LLC(11) | Global Designer, Distributor, and Retailer of Casual Footwear | |||||||||||||
LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—October 30, 2020)(9) | 4,913 | 4,567 | 3,635 | |||||||||||
Travel Leaders Group, LLC(11) | Travel Agency Network Provider | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—December 7, 2020)(9) | 10,994 | 10,936 | 10,975 | |||||||||||
Truck Bodies and Equipment International, Inc.(10) | Manufacturer of Dump Truck Bodies and Dump Trailers | |||||||||||||
LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—March 31, 2021)(9) | 15,750 | 15,602 | 15,602 | |||||||||||
TVG-I-E CMN ACQUISITION, LLC(10) | Organic Lead Generation for Online Postsecondary Schools | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—November 3, 2021)(9) | 6,459 | 6,334 | 6,334 | |||||||||||
Tweddle Group, Inc.(11) | Provider of Technical Information Services to Automotive OEMs | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—October 21, 2022)(9) | 8,462 | 8,295 | 8,419 | |||||||||||
UniRush, LLC | Provider of Prepaid Debit Card Solutions | |||||||||||||
12% Secured Debt (Maturity—February 1, 2019) | 12,000 | 10,981 | 12,000 | |||||||||||
Warrants (444,725 equivalent units; Expiration—February 2, 2026; Strike price—$10.27 per unit) | 1,250 | 1,250 | ||||||||||||
| | | | | | | | | | | | | | | |
| 12,231 | 13,250 | |||||||||||||
US Joiner Holding Company(11) | Marine Interior Design and Installation | |||||||||||||
LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—April 16, 2020)(9) | 11,514 | 11,435 | 11,456 | |||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2016
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
U.S. TelePacific Corp.(10) | Provider of Communications and Managed Services | |||||||||||||
LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—February 24, 2021)(9) | 7,500 | 7,377 | 7,377 | |||||||||||
VCVH Holding Corp. (Verisk)(11) | Healthcare Technology Services Focused on Revenue Maximization | |||||||||||||
LIBOR Plus 9.25% (Floor 1.00%), Current Coupon 10.25%, Secured Debt (Maturity—June 1, 2024)(9) | 1,500 | 1,464 | 1,488 | |||||||||||
Virtex Enterprises, LP(10) | Specialty, Full-Service Provider of Complex Electronic Manufacturing Services | |||||||||||||
12% Secured Debt (Maturity—December 27, 2018) | 1,667 | 1,559 | 1,559 | |||||||||||
Preferred Class A Units (14 units; 5% cumulative)(8) | 333 | 612 | ||||||||||||
Warrants (11 equivalent units; Expiration—December 27, 2023; Strike price—$0.001 per unit) | 186 | 220 | ||||||||||||
| | | | | | | | | | | | | | | |
| 2,078 | 2,391 | |||||||||||||
Wellnext, LLC(10) | Manufacturer of Supplements and Vitamins | |||||||||||||
LIBOR Plus 9.00% (Floor 0.50%), Current Coupon 9.85%, Secured Debt (Maturity—May 23, 2021)(9) | 10,058 | 9,968 | 10,058 | |||||||||||
Western Dental Services, Inc.(11) | Dental Care Services | |||||||||||||
LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—November 1, 2018)(9) | 4,904 | 4,902 | 4,885 | |||||||||||
Wilton Brands LLC(11) | Specialty Housewares Retailer | |||||||||||||
LIBOR Plus 7.25% (Floor 1.25%), Current Coupon 8.50%, Secured Debt (Maturity—August 30, 2018)(9) | 1,153 | 1,147 | 1,093 | |||||||||||
Worley Claims Services, LLC(10) | Insurance Adjustment Management and Services Provider | |||||||||||||
LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.00%, Secured Debt (Maturity—October 31, 2020)(9) | 6,386 | 6,342 | 6,386 | |||||||||||
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2016
(dollars in thousands)
| Portfolio Company(1)(20) | Business Description | Type of Investment(2)(3) | Principal(4) | Cost(4) | Fair Value(18) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
YP Holdings LLC(11) | Online and Offline Advertising Operator | |||||||||||||
LIBOR Plus 11.00% (Floor 1.25%), Current Coupon 12.25%, Secured Debt (Maturity—June 4, 2018)(9) | 11,428 | 10,969 | 11,398 | |||||||||||
Zilliant Incorporated | Price Optimization and Margin Management Solutions | |||||||||||||
Preferred Stock (186,777 shares) | 154 | 260 | ||||||||||||
Warrants (952,500 equivalent shares; Expiration—June 15, 2022; Strike price—$0.001 per share) | 1,071 | 1,190 | ||||||||||||
| | | | | | | | | | | | | | | |
| 1,225 | 1,450 | |||||||||||||
| | | | | | | | | | | | | | | |
Subtotal Non-Control/Non-Affiliate Investments (51.4% of total investments at fair value) | $ | 1,037,510 | $ | 1,026,676 | ||||||||||
| | | | | | | | | | | | | | | |
Total Portfolio Investments, December 31, 2016 | $ | 1,871,883 | $ | 1,996,906 | ||||||||||
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2016
(dollars in thousands)
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements(Unaudited)
(Unaudited)
NOTE A—ORGANIZATION AND BASIS OF PRESENTATION
1. Organization
Main Street Capital Corporation ("MSCC"(“MSCC”) is a principal investment firm primarily focused on providing customized debt and equity financing to lower middle market ("LMM"(“LMM”) companies and debt capital to middle market ("(“Middle Market"Market”) companies. The portfolio investments of MSCC and its consolidated subsidiaries are typically made to support management buyouts, recapitalizations, growth financings, refinancings and acquisitions of companies that operate in a variety of industry sectors. MSCC seeks to partner with entrepreneurs, business owners and management teams and generally provides "one stop"“one stop” financing alternatives within its LMM portfolio. MSCC and its consolidated subsidiaries invest primarily in secured debt investments, equity investments, warrants and other securities of LMM companies based in the United States and in secured debt investments of Middle Market companies generally headquartered in the United States.
MSCC was formed in March 2007 to operate as an internally managed business development company ("BDC"(“BDC”) under the Investment Company Act of 1940, as amended (the "1940 Act"“1940 Act”). MSCC wholly owns several investment funds, including Main Street Mezzanine Fund, LP ("MSMF"), Main Street Capital II, LP ("MSC II"(“MSMF”) and Main Street Capital III, LP ("(“MSC III"III” and, collectivelytogether with MSMF, and MSC II, the "Funds"“Funds”), and each of their general partners. The Funds are each licensed as a Small Business Investment Company ("SBIC"(“SBIC”) by the United States Small Business Administration ("SBA"(“SBA”). Because MSCC is internally managed, all of the executive officers and other employees are employed by MSCC. Therefore, MSCC does not pay any external investment advisory fees, but instead directly incurs the operating costs associated with employing investment and portfolio management professionals.
MSC Adviser I, LLC (the "External“External Investment Manager"Manager”) was formed in November 2013 as a wholly owned subsidiary of MSCC to provide investment management and other services to parties other than MSCC and its subsidiaries or their portfolio companies ("(“External Parties"Parties”) and receivereceives fee income for such services. MSCC has been granted no-action relief by the Securities and Exchange Commission ("SEC"(“SEC”) to allow the External Investment Manager to register as a registered investment adviser under the Investment Advisers Act of 1940, as amended. Since the External Investment Manager conducts all of its investment management activities for External Parties, it is accounted for as a portfolio investment of MSCC and is not included as a consolidated subsidiary of MSCC in MSCC'sMSCC’s consolidated financial statements.
MSCC has elected to be treated for U.S. federal income tax purposes as a regulated investment company ("RIC"(“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"“Code”). As a result, MSCC generally will not pay corporate-level U.S. federal income taxes on any net ordinary taxable income or capital gains that it distributes to its stockholders.
MSCC has certain direct and indirect wholly owned subsidiaries that have elected to be taxable entities (the "Taxable Subsidiaries"“Taxable Subsidiaries”). The primary purpose of the Taxable Subsidiaries is to permit MSCC to hold equity investments in portfolio companies which are "pass-through"“pass-through” entities for tax purposes.
Unless otherwise noted or the context otherwise indicates, the terms "we," "us," "our,"“we,” “us,” “our,” the "Company"“Company” and "Main Street"“Main Street” refer to MSCC and its consolidated subsidiaries, which include the Funds and the Taxable Subsidiaries.
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
2. Basis of Presentation
Main Street'sStreet’s consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America ("(“U.S. GAAP"GAAP”). The Company is an investment company following accounting and reporting guidance in Financial Accounting Standards Board ("FASB"(“FASB”) Accounting Standards Codification ("ASC"(“ASC”) 946,Financial Services-Investment CompanyServices—Investment Companies (" (“ASC 946"946”). For each of the periods presented
52
herein, Main Street'sStreet’s consolidated financial statements include the accounts of MSCC and its consolidated subsidiaries. The Investment Portfolio, as used herein, refers to all of Main Street'sStreet’s investments in LMM portfolio companies, investments in Middle Market portfolio companies, Private Loan portfolio(as defined in Note C) investments, Other Portfolio (as defined in Note C) investments and the investment in the External Investment Manager (see Note“Note C—Fair Value Hierarchy for Investments and Debentures—Portfolio Composition—Investment Portfolio CompositionComposition” for additional discussion of Main Street'sStreet’s Investment Portfolio and definitions for the terms Private Loan and Other Portfolio). Main Street'sStreet’s results of operations for the three and ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, cash flows for the ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, and financial position as of SeptemberJune 30, 20172021 and December 31, 2016,2020, are presented on a consolidated basis. The effects of all intercompany transactions between Main Street and its consolidated subsidiaries have been eliminated in consolidation.
The accompanying unaudited consolidated financial statements of Main Street are presented in conformity with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and ArticleArticles 6, 10 and 12 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with U.S. GAAP are omitted. The unaudited financial statements and notes should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2020. In the opinion of management, the unaudited consolidated financial results included herein contain all adjustments, consisting solely of normal recurring accruals, considered necessary for the fair presentation of financial statements for the interim periods included herein. The results of operations for the three and ninesix months ended SeptemberJune 30, 20172021 and 20162020 are not necessarily indicative of the operating results to be expected for the full year. Also, the unaudited financial statements and notes should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2016. Financial statements prepared on a U.S. GAAP basis require management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.
Under regulations pursuant to Article 6Principles of Regulation S-X applicable to BDCs andConsolidation
Under ASC 946, Main Street is precluded from consolidating other entities in which Main Street has equity investments, including those in which it has a controlling interest, unless the other entity is another investment company. An exception to this general principle in ASC 946 occurs if Main Street holds a controlling interest in an operating company that provides all or substantially all of its services directly to Main Street or to its portfolio companies. Accordingly, as noted above, MSCC'sMSCC’s consolidated financial statements include the financial position and operating results for the Funds and the Taxable Subsidiaries. Main Street has determined that allnone of its portfolio investments do not qualify for this exception, including the investment in the External Investment Manager. Therefore, Main Street'sStreet’s Investment Portfolio is carried on the consolidated balance sheet at fair value, as discussed further in Note B,B.1., with any adjustments to fair value recognized as "Net Change in“Net Unrealized Appreciation (Depreciation)"” on the consolidated statements of operations until the investment is realized, usually upon exit, resulting in any gain or loss being recognized as a "Net“Net Realized Gain (Loss)."
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
Portfolio Investment Classification
Main Street classifies its Investment Portfolio in accordance with the requirements of the 1940 Act. Under the 1940 Act, (a) "Control Investments"“Control Investments” are defined as investments in which Main Street owns more than 25% of the voting securities or has rights to maintain greater than 50% of the board representation, (b) "Affiliate Investments"“Affiliate Investments” are defined as investments in which Main Street owns between 5% and 25% (inclusive) of the voting securities and does not have rights to maintain greater than 50% of the board representation, and (c) "Non-Control/“Non-Control/Non-Affiliate Investments"Investments” are defined as investments that are neither Control Investments nor Affiliate Investments. For purposes of determining the classification of its Investment Portfolio, Main Street has excluded consideration of any voting securities or board appointment rights held by third-party investment funds advised by the External Investment Manager.
NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. Valuation of the Investment Portfolio
Main Street accounts for its Investment Portfolio at fair value. As a result, Main Street follows the provisions of ASC 820,Fair Value Measurements and Disclosures (" (“ASC 820"820”). ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. ASC 820 requires Main Street to assume that the
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portfolio investment is to be sold in the principal market to independent market participants, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal market that are independent, knowledgeable and willing and able to transact.
Main Street'sStreet’s portfolio strategy calls for it to invest primarily in illiquid debt and equity securities issued by privately held, LMM companies and more liquid debt securities issued by Middle Market companies that are generally larger in size than the LMM companies. Main Street categorizes some of its investments in LMM companies and Middle Market companies as Private Loan portfolio investments, which are primarily debt securities in privately held companies whichthat have been originated through strategic relationships with other investment funds on a collaborative basis, and are often referred to in the debt markets as "club“club deals."” Private Loan investments are typically similar in size, structure, terms and conditions to investments Main Street holds in its LMM portfolio and Middle Market portfolio. Main Street'sStreet’s portfolio also includes Other Portfolio investments which primarily consist of investments that are not consistent with the typical profiles for its LMM portfolio investments, Middle Market portfolio investments or Private Loan portfolio investments, including investments which may be managed by third parties. Main Street'sStreet’s portfolio may also include short-term portfolio investments that are atypical of Main Street’s LMM, Middle Market and Private Loan portfolio investments in that they are intended to be a short-term deployment of capital and are more liquid than investments within the other portfolios. Main Street’s portfolio investments may be subject to restrictions on resale.
LMM investments and Other Portfolio investments generally have no established trading market while Middle Market securitiesand short-term portfolio investments generally have established markets that are not active. Private Loan investments may include investments which have no established trading market or have established markets that are not active. Main Street determines in good faith the fair value of its Investment Portfolio pursuant to a valuation policy in accordance with ASC 820 and a valuation process approved by its Board of Directors and in accordance with the 1940 Act. Main Street'sStreet’s valuation policies and processes are intended to provide a consistent basis for determining the fair value of Main Street'sStreet’s Investment Portfolio.
For LMM portfolio investments, Main Street generally reviews external events, including private mergers, sales and acquisitions involving comparable companies, and includes these events in the valuation process by using an enterprise value waterfall methodology ("Waterfall"(“Waterfall”) for its LMM equity
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
investments and an income approach using a yield-to-maturity model ("Yield-to-Maturity"(“Yield-to-Maturity”) for its LMM debt investments. For Middle Market and short-term portfolio investments, Main Street primarily uses quoted prices in the valuation process. Main Street determines the appropriateness of the use of third-party broker quotes, if any, in determining fair value based on its understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer, the depth and consistency of broker quotes and the correlation of changes in broker quotes with underlying performance of the portfolio company and other market indices. For Middle Market and Private Loan portfolio investments in debt securities for which it has determined that third-party quotes or other independent pricing are not available or appropriate, Main Street generally estimates the fair value based on the assumptions that it believes hypothetical market participants would use to value the investment in a current hypothetical sale using the Yield-to-Maturity valuation method. For its Other Portfolio equity investments, Main Street generally calculates the fair value of the investment primarily based on the net asset value ("NAV"(“NAV”) of the fund and adjusts the fair value for other factors deemed relevant that would affect the fair value of the investment. All of the valuation approaches for Main Street'sStreet’s portfolio investments estimate the value of the investment as if Main Street were to sell, or exit, the investment as of the measurement date.
These valuation approaches consider the value associated with Main Street'sStreet’s ability to control the capital structure of the portfolio company, as well as the timing of a potential exit. For valuation purposes, "control"“control” portfolio investments are composed of debt and equity securities in companies for which Main Street has a controlling interest in the equity ownership of the portfolio company or the ability to nominate a majority of the portfolio company'scompany’s board of directors. For valuation purposes, "non-control"“non-control” portfolio investments are generally composed of debt and equity securities in companies for which Main Street does not have a controlling interest in the equity ownership of the portfolio company or the ability to nominate a majority of the portfolio company'scompany’s board of directors.
Under the Waterfall valuation method, Main Street estimates the enterprise value of a portfolio company using a combination of market and income approaches or other appropriate valuation methods, such as considering recent transactions in the equity securities of the portfolio company or third-party valuations of the portfolio company, and then performs a waterfall calculation by allocating the enterprise value over the portfolio company'scompany’s securities in order of
54
their preference relative to one another. The enterprise value is the fair value at which an enterprise could be sold in a transaction between two willing parties, other than through a forced or liquidation sale. Typically, privateprivately held companies are bought and sold based on multiples of earnings before interest, taxes, depreciation and amortization ("EBITDA"(“EBITDA”), cash flows, net income, revenues, or in limited cases, book value. There is no single methodology for estimating enterprise value. For any one portfolio company, enterprise value is generally described as a range of values from which a single estimate of enterprise value is derived. In estimating the enterprise value of a portfolio company, Main Street analyzes various factors including the portfolio company'scompany’s historical and projected financial results. Due to SEC deadlines for Main Street'sStreet’s quarterly and annual financial reporting, the operating results of a portfolio company used in the current period valuation are generally the results from the period ended three months prior to such valuation date and may include unaudited, projected, budgeted or pro forma financial information and may require adjustments for non-recurring items or to normalize the operating results that may require significant judgment in its determination.determining. In addition, projecting future financial results requires significant judgment regarding future growth assumptions. In evaluating the operating results, Main Street also analyzes the impact of exposure to litigation, loss of customers or other contingencies. After determining the appropriate enterprise value, Main Street allocates the enterprise
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
value to investments in order of the legal priority of the various components of the portfolio company'scompany’s capital structure. In applying the Waterfall valuation method, Main Street assumes the loans are paid off at the principal amount in a change in control transaction and are not assumed by the buyer, which Main Street believes is consistent with its past transaction history and standard industry practices.
Under the Yield-to-Maturity valuation method, Main Street also uses the income approach to determine the fair value of debt securities based on projections of the discounted future free cash flows that the debt security will likely generate, including analyzing the discounted cash flows of interest and principal amounts for the debt security, as set forth in the associated loan agreements, as well as the financial position and credit risk of the portfolio company. Main Street'sStreet’s estimate of the expected repayment date of its debt securities is generally the maturity date of the instrument, as Main Street generally intends to hold its loans and debt securities to maturity. The Yield-to-Maturity analysis also considers changes in leverage levels, credit quality, portfolio company performance, changes in market based interest rates and other factors. Main Street will generally use the value determined by the Yield-to-Maturity analysis as the fair value for that security; however, because of Main Street'sStreet’s general intent to hold its loans to maturity, the fair value will not exceed the principal amount of the debt security valued using the Yield-to-Maturity valuation method. A change in the assumptions that Main Street uses to estimate the fair value of its debt securities using the Yield-to-Maturity valuation method could have a material impact on the determination of fair value. If there is deterioration in credit quality or if a debt security is in workout status, Main Street may consider other factors in determining the fair value of the debt security, including the value attributable to the debt security from the enterprise value of the portfolio company or the proceeds that would most likely be received in a liquidation analysis.
Under the NAV valuation method, for an investment in an investment fund that does not have a readily determinable fair value, Main Street measures the fair value of the investment predominately based on the NAV of the investment fund as of the measurement date and adjusts the investment'sinvestment’s fair value for factors known to Main Street that would affect that fund'sfund’s NAV, including, but not limited to, fair values for individual investments held by the fund if Main Street holds the same investment or for a publicly traded investment. In addition, in determining the fair value of the investment, Main Street considers whether adjustments to the NAV are necessary in certain circumstances, based on the analysis of any restrictions on redemption of Main Street'sStreet’s investment as of the measurement date, recent actual sales or redemptions of interests in the investment fund, and expected future cash flows available to equity holders, including the rate of return on those cash flows compared to an implied market return on equity required by market participants, or other uncertainties surrounding Main Street'sStreet’s ability to realize the full NAV of its interests in the investment fund.
Pursuant to its internal valuation process and the requirements under the 1940 Act, Main Street performs valuation procedures on each of its portfolio investments quarterly. In addition to its internal valuation process, in arriving at estimates of fair value for its investments in its LMM portfolio companies, Main Street, among other things, consults with a nationally recognized independent financial advisory services firm. The nationally recognized independent financial advisory services firm analyzes and provides observations, recommendations and an assurance certification regarding the Company'sCompany’s determinations of the fair value of its LMM portfolio company investments. The nationally recognized independent financial advisory services firm is generally consulted relative to Main Street'sStreet’s investments in each LMM portfolio company at least once every calendar year, and for Main Street'sStreet’s investments in new LMM portfolio companies, at least once in the twelve-month period subsequent to the initial investment. In certain instances, Main Street may determine that it is not cost-effective, and as a result is not in its stockholders'stockholders’ best interest, to consult with the nationally recognized independent
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
financial advisory services firm on its investments in one or more
55
LMM portfolio companies. Such instances include, but are not limited to, situations where the fair value of Main Street'sStreet’s investment in a LMM portfolio company is determined to be insignificant relative to the total Investment Portfolio. Main Street consulted with and received an assurance certification from its independent financial advisory services firm in arriving at Main Street'sStreet’s determination of fair value on its investments in a total of 3831 LMM portfolio companies for the ninesix months ended SeptemberJune 30, 2017,2021, representing approximately 65%52% of the total LMM portfolio at fair value as of SeptemberJune 30, 2017,2021, and on a total of 4628 LMM portfolio companies for the ninesix months ended SeptemberJune 30, 2016,2020, representing approximately 75%47% of the total LMM portfolio at fair value as of SeptemberJune 30, 2016.2020. Excluding its investments in new LMM portfolio companies which havethat, as of June 30, 2021 and 2020, as applicable, had not been in the Investment Portfolio for at least twelve months subsequent to the initial investment as of September 30, 2017 and 2016, as applicable, and its investments in the LMM portfolio companies that were not reviewed because their equityor whose primary purpose is publicly traded or they holdto own real estate for which a third-party appraisal is obtained on at least an annual basis, the percentage of the LMM portfolio reviewed and certified by itsMain Street’s independent financial advisory services firm for the ninesix months ended SeptemberJune 30, 20172021 and 20162020 was 72%55% and 80%53% of the total LMM portfolio at fair value as of SeptemberJune 30, 20172021 and 2016,2020, respectively.
For valuation purposes, all of Main Street'sStreet’s Middle Market portfolio investments are non-control investments. To the extent sufficient observable inputs are available to determine fair value, Main Street uses observable inputs to determine the fair value of these investments through obtaining third-party quotes or other independent pricing. For Middle Market portfolio investments for which it has determined that third-party quotes or other independent pricing are not available or appropriate, Main Street generally estimates the fair value based on the assumptions that it believes hypothetical market participants would use to value such Middle Market debt investments in a current hypothetical sale using the Yield-to-Maturity valuation method and such Middle Market equity investments in a current hypothetical sale using the Waterfall valuation method. Because the vast majority of the Middle Market portfolio investments are typically valued using third-party quotes or other independent pricing services (including 96%94% and 94%90% of the Middle Market portfolio investments as of SeptemberJune 30, 20172021 and December 31, 2016,2020, respectively), Main Street generally does not generally consult with any financial advisory services firms in connection with determining the fair value of its Middle Market investments.
For valuation purposes, all of Main Street'sStreet’s Private Loan portfolio investments are non-control investments. For Private Loan portfolio investments for which it has determined that third-party quotes or other independent pricing are not available or appropriate, Main Street generally estimates the fair value based on the assumptions that it believes hypothetical market participants would use to value such Private Loan debt investments in a current hypothetical sale using the Yield-to-Maturity valuation method and such Private Loan equity investments in a current hypothetical sale using the Waterfall valuation method.
In addition to its internal valuation process, in arriving at estimates of fair value for its investments in its Private Loan portfolio companies, Main Street, among other things, consults with a nationally recognized independent financial advisory services firm. The nationally recognized independent financial advisory services firm analyzes and provides observations and recommendations and an assurance certification regarding the Company'sCompany’s determinations of the fair value of its Private Loan portfolio company investments. The nationally recognized independent financial advisory services firm is generally consulted relative to Main Street'sStreet’s investments in each Private Loan portfolio company at least once every calendar year, and for Main Street'sStreet’s investments in new Private Loan portfolio companies, at least once in the twelve-month period subsequent to the initial investment. In certain
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
instances, Main Street may determine that it is not cost-effective, and as a result is not in its stockholders'stockholders’ best interest, to consult with the nationally recognized independent financial advisory services firm on its investments in one or more Private Loan portfolio companies. Such instances include, but are not limited to, situations where the fair value of Main Street'sStreet’s investment in a Private Loan portfolio company is determined to be insignificant relative to the total Investment Portfolio. Main Street consulted with and received an assurance certification from its independent financial advisory services firm in arriving at its determination of fair value on its investments in a total of 1926 Private Loan portfolio companies for the ninesix months ended SeptemberJune 30, 2017,2021, representing approximately 44%45% of the total Private Loan portfolio at fair value as of SeptemberJune 30, 2017,2021, and on a total of 2021 Private Loan portfolio companies for the ninesix months ended SeptemberJune 30, 2016,2020, representing approximately 56%37% of the total Private Loan portfolio at fair value as of SeptemberJune 30, 2016.2020. Excluding its investments in new Private Loan portfolio companies which havethat, as of June 30, 2021 and 2020, as applicable, had not been in the Investment Portfolio for at least twelve months subsequent to the initial investment as of September 30, 2017 and 2016, as applicable, andits investments in its Private Loan portfolio companies that were not reviewed because the investment is valued based upon third-party quotes or other independent pricing, the percentage of the Private Loan portfolio reviewed and certified by itsMain Street’s independent financial advisory services firm for the ninesix months ended SeptemberJune 30, 20172021 and 20162020 was 74%60% and 80%45% of the total Private Loan portfolio at fair value as of SeptemberJune 30, 20172021 and 2016,2020, respectively.
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For valuation purposes, all of Main Street'sStreet’s short-term portfolio investments are non-control investments. To the extent sufficient observable inputs are available to determine fair value, Main Street uses observable inputs to determine the fair value of these investments through obtaining third-party quotes or other independent pricing. Because all of the short-term portfolio investments are typically valued using third-party quotes or other independent pricing services, Main Street generally does not consult with any financial advisory services firms in connection with determining the fair value of its short-term portfolio investments.
For valuation purposes, all of Main Street’s Other Portfolio investments are non-control investments. Main Street'sStreet’s Other Portfolio investments comprised 4.6%5.2% and 5.0%3.6% of Main Street'sStreet’s Investment Portfolio at fair value as of SeptemberJune 30, 20172021 and December 31, 2016,2020, respectively. Similar to the LMM investment portfolio, market quotations for Other Portfolio equity investments are generally not readily available. For its Other Portfolio equity investments, Main Street generally determines the fair value of itsthese investments using the NAV valuation method. For its Other Portfolio debt investments for which it has determined that third-party quotes or other independent pricing are not available or appropriate, Main Street generally estimates the fair value based on the assumptions that it believes hypothetical market participants would use to value such Other Portfolio debt investments in a current hypothetical sale using the Yield-to-Maturity valuation method. For its Other Portfolio debt investments for which third-party quotes or other independent pricing are available and appropriate, Main Street determines the fair value of these investments through obtaining third-party quotes or other independent pricing to the extent that these inputs are available and appropriate to determine fair value.
For valuation purposes, Main Street'sStreet’s investment in the External Investment Manager is a control investment. Market quotations are not readily available for this investment, and as a result, Main Street determines the fair value of the External Investment Manager using the Waterfall valuation method under the market approach. In estimating the enterprise value, Main Street analyzes various factors, including the entity'sentity’s historical and projected financial results, as well as its size, marketability and performance relative to the population of market comparables. This valuation approach estimates the value of the investment as if Main Street were to sell, or exit, the investment. In addition, Main Street considers its ability to control the capital structure of the company, as well as the timing of a potential exit, in connection with determining the fair value of the External Investment Manager.
Due to the inherent uncertainty in the valuation process, Main Street'sStreet’s determination of fair value for its Investment Portfolio may differ materially from the values that would have been determined had a ready market for the securities existed. In addition, changes in the market environment, portfolio company performance and other events that may occur over the lives of the investments may cause the
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
gains or losses ultimately realized on these investments to be materially different than the valuations currently assigned. Main Street determines the fair value of each individual investment and records changes in fair value as unrealized appreciation or depreciation.
Main Street uses an internally developed portfolio investment rating system in connection with its investment oversight, portfolio management and analysis and investment valuation procedures for its LMM portfolio companies. This system takes into account both quantitative and qualitative factors of the LMM portfolio company and the investments held therein.
The BoardSEC recently adopted new Rule 2a-5 under the 1940 Act, which permits a BDC’s board of Directors of Main Street has the final responsibility for overseeing, reviewing and approving, in good faith, Main Street's determination ofdirectors to designate its executive officers or investment adviser as a valuation designee to determine the fair value for its Investment Portfolio,investment portfolio, subject to the active oversight of the board. Main Street’s Board of Directors has approved policies and procedures pursuant to Rule 2a-5 (the “Valuation Procedures”) and has designated a group of its executive officers to serve as well as itsthe Board’s valuation procedures, consistent with 1940 Act requirements.designee. Main Street adopted the Valuation Procedures effective April 1, 2021. Main Street believes its Investment Portfolio as of SeptemberJune 30, 20172021 and December 31, 20162020 approximates fair value as of those dates based on the markets in which Main Streetit operates and other conditions in existence on those reporting dates.
2. Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results may differ from these estimates under different conditions or assumptions. Additionally, as explained in Note B.1., the consolidated financial statements include investments in the Investment Portfolio whose values have been estimated by Main Street, with the oversight, reviewpursuant to valuation policies and approvalprocedures approved and overseen by Main Street'sStreet’s Board of Directors, in the absence of readily ascertainable market values. Because of the inherent uncertainty of the Investment Portfolio valuations, those estimated values may differ materially from the values that would have been determined had a ready market for the securities existed.
The COVID-19 pandemic, and the related effect on the U.S. and global economies, has impacted, and threatens to continue to impact, the businesses and operating results of certain of Main Street’s portfolio companies, as well as
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market interest rate spreads. As a result of these and other current effects of the COVID-19 pandemic, as well as the uncertainty regarding the extent and duration of its impact, the valuation of Main Street’s Investment Portfolio has been experiencing increased volatility since the beginning of the COVID-19 pandemic.
3. Cash and Cash Equivalents
Cash and cash equivalents consist of cash and highly liquid investments with an original maturity of three months or less at the date of purchase. Cash and cash equivalents are carried at cost, which approximates fair value.
At SeptemberJune 30, 2017,2021, cash balances totaling $26.5$55.9 million exceeded Federal Deposit Insurance Corporation insurance protection levels, subjecting the Company to risk related to the uninsured balance. All of the Company'sCompany’s cash deposits are held at large established high credit quality financial institutions and management believes that the risk of loss associated with any uninsured balances is remote.
4. Interest, Dividend and Fee Income
Main Street records interest and dividend income on the accrual basis to the extent amounts are expected to be collected. Dividend income is recorded as dividends are declared by the portfolio company or at the point an obligation exists for the portfolio company to make a distribution. In accordance with Main Street'sStreet’s valuation policies, Main Street evaluates accrued interest and dividend income periodically for collectability. When a loan or debt security becomes 90 days or more past due, and if Main Street otherwise does not expect the debtor to be able to service all of its debt or other
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
obligations, Main Street will generally place the loan or debt security on non-accrual status and cease recognizing interest income on that loan or debt security until the borrower has demonstrated the ability and intent to pay contractual amounts due. If a loan or debt security'ssecurity’s status significantly improves regarding the debtor'sdebtor’s ability to service the debt or other obligations, or if a loan or debt security is sold or written off, Main Street removes it from non-accrual status.
As of SeptemberJune 30, 2017,2021, Main Street'sStreet’s total Investment Portfolio had sixnine investments on non-accrual status, which comprised approximately 0.4%1.2% of its fair value and 2.7%3.9% of its cost. As of December 31, 2016,2020, Main Street'sStreet’s total Investment Portfolio had fourseven investments on non-accrual status, which comprised approximately 0.6%1.3% of its fair value and 3.0%3.6% of its cost.
Main Street holds certain debt and preferred equity instruments in its Investment Portfolio that contain payment-in-kind ("PIK"(“PIK”) interest and cumulative dividend provisions. The PIK interest, computed at the contractual rate specified in each debt agreement, is periodically added to the principal balance of the debt and is recorded as interest income. Thus, the actual collection of this interest may be deferred until the time of debt principal repayment. Cumulative dividends are recorded as dividend income, and any dividends in arrears are added to the balance of the preferred equity investment. The actual collection of these dividends in arrears may be deferred until such time as the preferred equity is redeemed or sold. To maintain RIC tax treatment (as discussed in Note B.9. below), these non-cash sources of income may need to be paid out to stockholders in the form of distributions, even though Main Street may not have collected the PIK interest and cumulative dividends in cash. For the three months ended June 30, 2021 and 2020, (i) approximately 3.4% and 2.5%, respectively, of Main Street’s total investment income was attributable to PIK interest income not paid currently in cash and (ii) approximately 0.6% and 0.9%, respectively, of Main Street’s total investment income was attributable to cumulative dividend income not paid currently in cash. For the six months ended June 30, 2021 and 2020, (i) approximately 3.6% and 1.7%, respectively, of Main Street’s total investment income was attributable to PIK interest income not paid currently in cash and (ii) approximately 0.7% and 0.9%, respectively, of Main Street’s total investment income was attributable to cumulative dividend income not paid currently in cash. Main Street stops accruing PIK interest and cumulative dividends and writes off any accrued and uncollected interest and dividends in arrears when it determines that such PIK interest and dividends in arrears are no longer collectible. For the three months ended September 30, 2017 and 2016, (i) approximately 1.9% and 4.0%, respectively, of Main Street's total investment income was attributable to PIK interest income not paid currently in cash and (ii) approximately 1.8% and 1.8%, respectively, of Main Street's total investment income was attributable to cumulative dividend income not paid currently in cash. For the nine months ended September 30, 2017 and 2016, (i) approximately 2.7% and 3.7%, respectively, of Main Street's total investment income was attributable to PIK interest income not paid currently in cash and (ii) approximately 1.8% and 1.1%, respectively, of Main Street's total investment income was attributable to cumulative dividend income not paid currently in cash.
Main Street may periodically provide services, including structuring and advisory services, to its portfolio companies or other third parties. For services that are separately identifiable and evidence exists to substantiate fair value, fee income is recognized as earned, which is generally when the investment or other applicable transaction closes. Fees received in connection with debt financing transactions for services that do not meet these criteria are treated as debt origination fees and are deferred and accreted into income over the life of the financing.
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MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
A presentation of thetotal investment income Main Street received from its Investment Portfolio in each of the periods presented is as follows:
| | | | | | | | | | | | | |||||||||||||
| | Three Months Ended | | Six Months Ended | |||||||||||||||||||||
| | June 30, | | June 30, | |||||||||||||||||||||
|
| 2021 |
| 2020 |
| 2021 |
| 2020 | |||||||||||||||||
| | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||
| | (dollars in thousands) | ||||||||||||||||||||||||
| | (dollars in thousands) | |||||||||||||||||||||||
Interest, fee and dividend income: | | | | | | | | | | | | | |||||||||||||
Interest income | $ | 39,814 | $ | 35,580 | $ | 117,340 | $ | 101,181 | | $ | 45,944 | | $ | 41,574 | | $ | 89,416 | | $ | 86,450 | |||||
Dividend income | 10,088 | 9,730 | 25,198 | 25,094 | |
| 18,619 | |
| 7,795 | |
| 36,316 | |
| 15,836 | |||||||||
Fee income | 1,884 | 1,284 | 7,406 | 5,059 | |
| 2,731 | |
| 2,638 | |
| 4,370 | |
| 5,870 | |||||||||
| | | | | | | | | | | | | | |||||||||||||
Total interest, fee and dividend income | $ | 51,786 | $ | 46,594 | $ | 149,944 | $ | 131,334 | | $ | 67,294 | | $ | 52,007 | | $ | 130,102 | | $ | 108,156 | |||||
5. Deferred Financing Costs
Deferred financing costs include commitment fees and other costs related to Main Street'sStreet’s multi-year revolving credit facility (the "Credit Facility", as discussed further in Note F)“Credit Facility”) and its unsecured notes, (as discussed further in Note G), as well as the commitment fees and leverage fees (approximately 3.4% of the total commitment and draw amounts, as applicable) on the SBIC debentures (as discusseddebentures. See further discussion of Main Street’s debt in Note E) which are not accounted for under the fair value option under ASC 825 (as discussed further in Note B.11.).E. Deferred financing costs in connection with the Credit Facility are capitalized as an asset. Deferred financing costs in connection with all other debt arrangements not using the fair value option are a direct deduction from the related debt liability.
6. Equity Offering Costs
The Company'sCompany’s offering costs are charged against the proceeds from equity offerings when the proceeds are received.
7. Unearned Income—Debt Origination Fees and Original Issue Discount and Discounts / Premiums to Par Value
Main Street capitalizes debt origination fees received in connection with financings and reflects such fees as unearned income netted against the applicable debt investments. The unearned income from the fees is accreted into income based on the effective interest method over the life of the financing.
In connection with its portfolio debt investments, Main Street sometimes receives nominal cost warrants or warrants with an exercise price below the fair value of the underlying equity (together, "nominal“nominal cost equity"equity”) that are valued as part of the negotiation process with the particular portfolio company. When Main Street receives nominal cost equity, Main Street allocates its cost basis in its investment between its debt security and its nominal cost equity at the time of origination based on amounts negotiated with the particular portfolio company. The allocated amounts are based upon the fair value of the nominal cost equity, which is then used to determine the allocation of cost to the debt security. Any discount recorded on a debt investment resulting from this allocation is reflected as unearned income, which is netted against the applicable debt investment, and accreted into interest income based on the effective interest method over the life of the debt investment. The actual collection of this interest is deferred until the time of debt principal repayment.
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
Main Street may also purchase debt securities at a discount or at a premium to the par value of the debt security. In the case of a purchase at a discount, Main Street records the investment at the par value of the debt security net of the discount, and the discount is accreted into interest income based on the effective interest method over the life of the debt investment. In the case of a purchase at a premium, Main Street records the investment at the par value of the debt security plus the premium, and the premium is amortized as a reduction to interest income based on the effective interest method over the life of the debt investment.
To maintain RIC tax treatment (as discussed in Note B.9. below), these non-cash sources of income may need to be paid out to stockholders in the form of distributions, even though Main Street may not have collected the interest income. For the three months ended SeptemberJune 30, 20172021 and 2016,2020, approximately 3.8%2.4% and 3.2%2.6%, respectively, of Main Street'sStreet’s total investment income was attributable to interest income from the accretion of discounts associated with debt
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investments, net of any premium reduction. For the ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, approximately 3.7%2.4% and 3.0%2.6%, respectively, of Main Street'sStreet’s total investment income was attributable to interest income from the accretion of discounts associated with debt investments, net of any premium reduction.
8. Share-Based Compensation
Main Street accounts for its share-based compensation plans using the fair value method, as prescribed by ASC 718,Compensation—Stock Compensation. Accordingly, for restricted stock awards, Main Street measures the grant date fair value based upon the market price of its common stock on the date of the grant and amortizes the fair value of the awards as share-based compensation expense over the requisite service period, which is generally the vesting term.
Effective January 1, 2016, Main Street elected early adoption ofhas also adopted Accounting Standards Update ("ASU"(“ASU”) 2016-09,Compensation—Stock Compensation: Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09," as discussed further below in Note B.13.). ASU 2016-09, which requires that all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit in the income statement and no longernot delay recognition of a tax benefit until the tax benefit is realized through a reduction to taxes payable. TheAccordingly, the tax effects of exercised or vested awards should beare treated as discrete items in the reporting period in which they occur. Additionally, ASU 2016-09 allows an entity to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest, net of forfeitures, (current GAAP) or account for forfeitures when they occur. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. As such, Main Street recorded a $1.8 million adjustment to "Net Unrealized Appreciation, Net of Income Taxes" on the consolidated balance sheet to capture the cumulative tax effect as of January 1, 2016. Main Street has elected to account for forfeitures as they occur and this change had no impact on its consolidated financial statements. The additional amendments (cash flows classification, minimum statutory tax withholding requirements and classification of awards as either a liability or equity) did not have an effect on Main Street's consolidated financial statements.
Table of Contentsoccur.
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
9. Income Taxes
MSCC has elected to be treated for U.S. federal income tax purposes as a RIC. MSCC'sMSCC’s taxable income includes the taxable income generated by MSCC and certain of its subsidiaries, including the Funds, which are treated as disregarded entities for tax purposes. As a RIC, MSCC generally will not pay corporate-level U.S. federal income taxes on any net ordinary taxable income or capital gains that MSCC distributes to its stockholders. MSCC must generally distribute at least 90% of its "investment“investment company taxable income"income” (which is generally its net ordinary taxable income and realized net short-term capital gains in excess of realized net long-term capital losses) and 90% of its tax-exempt income to maintain its RIC status (pass-through tax treatment for amounts distributed). As part of maintaining RIC status, undistributed taxable income (subject to a 4% non-deductible U.S. federal excise tax) pertaining to a given fiscal year may be distributed up to 12 months subsequent to the end of that fiscal year, provided such dividends are declared on or prior to the later of (i) the filing of the U.S. federal income tax return for the applicable fiscal year or (ii) the fifteenth day of the ninth month following the close of the year in which such taxable income was generated.
The Taxable Subsidiaries primarily hold certain portfolio investments for Main Street. The Taxable Subsidiaries permit Main Street to hold equity investments in portfolio companies which are "pass-through"“pass-through” entities for tax purposes and to continue to comply with the "source-income"“source-of-income” requirements contained in the RIC tax provisions of the Code. The Taxable Subsidiaries are consolidated with Main Street for U.S. GAAP financial reporting purposes, and the portfolio investments held by the Taxable Subsidiaries are included in Main Street'sStreet’s consolidated financial statements as portfolio investments and recorded at fair value. The Taxable Subsidiaries are not consolidated with MSCC for income tax purposes and may generate income tax expense, or benefit, and tax assets and liabilities, as a result of their ownership of certain portfolio investments. The taxable income, or loss, of the Taxable Subsidiaries may differ from itstheir book income, or loss, due to temporary book and tax timing differences and permanent differences. The Taxable Subsidiaries are each taxed at their normal corporate tax rates based on their taxable income. The income tax expense, or benefit, if any, and the related tax assets and liabilities, of the Taxable Subsidiaries are reflected in Main Street'sStreet’s consolidated financial statements.
The External Investment Manager is an indirect wholly owned subsidiary of MSCC owned through a Taxable Subsidiary and is a disregarded entity for tax purposes. The External Investment Manager has entered into a tax sharing agreement with its Taxable Subsidiary owner. Since the External Investment Manager is accounted for as a portfolio investment of MSCC and is not included as a consolidated subsidiary of MSCC in MSCC'sMSCC’s consolidated financial statements, and as a result of the tax sharing agreement with its Taxable Subsidiary owner, for its stand-alone financial reporting purposes the External Investment Manager is treated as if it is taxed at normal corporate tax rates based on its taxable income and, as a result of its activities, may generate income tax expense or benefit. The income tax expense, or benefit, if any, and the related tax assets and liabilities, of the External Investment Manager are reflected in the External Investment Manager'sManager’s separate financial statements.
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The Taxable Subsidiaries and the External Investment Manager use the liability method in accounting for income taxes. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements, using statutory tax rates in effect for the year in which the temporary differences are expected to reverse. A valuation allowance is provided, if necessary, against deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses. Taxable income generally excludes net unrealized appreciation or depreciation, as investment gains or losses are not included in taxable income until they are realized.
10. Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation
Realized gains or losses are measured by the difference between the net proceeds from the sale or redemption of an investment or a financial instrument and the cost basis of the investment or financial instrument, without regard to unrealized appreciation or depreciation previously recognized, and includes investments written-off during the period net of recoveries and realized gains or losses from in-kind redemptions. Net change in unrealized appreciation or depreciation reflects the net change in the fair value of the Investment Portfolio and financial instruments and the reclassification of any prior period unrealized appreciation or depreciation on exited investments and financial instruments to realized gains or losses.
11. Fair Value of Financial Instruments
Fair value estimates are made at discrete points in time based on relevant information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Main Street believes that the carrying amounts of its financial instruments, consisting of cash and cash equivalents, receivables, payables and other liabilities approximate the fair values of such items due to the short-term nature of these instruments.
As part of Main Street's acquisition of the majority of the equity interests of MSC II in January 2010 (the "MSC II Acquisition"), Main Street electedTo estimate the fair value option under ASC 825,Financial Instruments ("ASC 825") relating to accounting forof Main Street’s multiple tranches of unsecured debt obligations at theirinstruments as disclosed in Note E – Debt, Main Street uses quoted market prices. For the estimated fair value of Main Street’s SBIC debentures, Main Street uses the Yield-to-Maturity valuation method based on projections of the discounted future free cash flows that the debt security will likely generate, including both the discounted cash flows of the associated interest and principal amounts for the MSC II SBIC debentures acquired as part of the acquisition accounting related to the MSC II Acquisition and values those obligations as discussed further in Note C. In order to provide for a more consistent basis of presentation, Main Street has continued to elect the fair value option for SBIC debentures issued by MSC II subsequent to the MSC II Acquisition. When the fair value option is elected for a given SBIC debenture, the deferred loan costs associated with the debenture are fully expensed in the current period to "Net Change in Unrealized Appreciation (Depreciation)—SBIC debentures" as part of the fair value adjustment. Interest incurred in connection with SBIC debentures which are valued at fair value is included in interest expense.debt security.
12. Earnings per Share
Basic and diluted per share calculations are computed utilizing the weighted-average number of shares of common stock outstanding for the period. In accordance with ASC 260,Earnings Per Share, the unvested shares of restricted stock awarded pursuant to Main Street'sStreet’s equity compensation plans are participating securities and, therefore, are included in the basic earnings per share calculation. As a result, for all periods presented, there is no difference between diluted earnings per share and basic earnings per share amounts.
13. Recently Issued or Adopted Accounting Standards
In May 2014,March 2020, the FASB issued ASU 2014-09,Revenue from Contracts2020-04, “Reference rate reform (Topic 848)—Facilitation of the effects of reference rate reform on financial reporting.” The amendments in this update provide optional expedients and exceptions for applying U.S. GAAP to certain contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform and became effective upon issuance for all entities. The Company has agreements that have LIBOR as a reference rate with Customers (Topic 606). ASU 2014-09 supersedescertain portfolio companies and also with certain lenders. Many of these agreements include language for choosing an alternative successor rate if LIBOR reference is no longer considered to be appropriate. Contract modifications are required to be evaluated in determining whether the revenue recognition requirements under ASC 605,Revenue Recognition,modifications result in the establishment of new contracts or the continuation of existing contracts. The Company adopted this amendment in March 2020 and plans to apply the amendments in this update to account for contract modifications due to changes in reference rates when LIBOR reference is no longer used. The Company
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continues to evaluate the impact that the amendments in this update will have on its consolidated financial statements and disclosures when applied.
MAIN STREET CAPITAL CORPORATION
NotesIn May 2020, the SEC published Release No. 33-10786 (the “May 2020 Release”), Amendments to Consolidated Financial Statements (Continued)
(Unaudited)
Disclosures about Acquired and most industry-specific guidance throughoutDisposed Businesses, announcing its adoption of rules amending Rule 1-02(w)(2) under Regulation S-X used in the Industry Topicsdetermination of a significant subsidiary specific to investment companies, including BDCs. In part, the rules adopted pursuant to the May 2020 Release eliminated the use of the ASC. The core principleasset test, and amended the income and investment tests for determining whether an unconsolidated subsidiary requires additional disclosure in the footnotes of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Under the new guidance, an entity is required to perform the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The new guidance will significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. Additionally, the guidance requires improved disclosures as to the nature, amount, timing and uncertainty of revenue that is recognized. In March 2016, the FASB issued ASU 2016-08,Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarified the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10,Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarified the implementation guidance regarding performance obligations and licensing arrangements. In May 2016, the FASB issued ASU No. 2016-12,Revenue from Contracts with Customers (Topic 606)—Narrow-Scope Improvements and Practical Expedients, which clarified guidance on assessing collectability, presenting sales tax, measuring noncash consideration, and certain transition matters. In December 2016, the FASB issued ASU No. 2016-20,Revenue from Contracts with Customers (Topic 606)—Technical Corrections and Improvements, which provided disclosure relief, and clarified the scope and application of the new revenue standard and related cost guidance. The new guidance will be effective for the annual reporting period beginning after December 15, 2017, including interim periods within that reporting period. Early adoption would be permitted for annual reporting periods beginning after December 15, 2016. Main Street expects to identify similar performance obligations under ASC 606 as compared with deliverables and separate units of account previously identified. As a result, Main Street expects timing of its revenue recognition to remain the same.
In April 2015, the FASB issued ASU 2015-03,Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires debt financing costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the related debt liability, similar to the presentation of debt discounts. Additionally in August 2015, the FASB issued ASU 2015-15,Interest—Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, which provides further clarification on the same topic and states that the SEC would not object to the deferral and presentation of debt issuance costs as an asset and subsequent amortization of the deferred costs over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement.financial statements. Main Street adopted the guidance for debt arrangements that are not line-of-credit arrangements as ofrules pursuant to the May 2020 Release during the quarter ended June 30, 2017. Comparative financial statements of prior interim and annual periods have been adjusted to apply the new method retrospectively. As a result of the adoption, Main Street reclassified $7.9 million of deferred financing costs assets to a direct deduction from the related debt liability on the consolidated balance sheet as of December 31, 2016.2020. The adoption of this guidance had no impact on net assets, the consolidated statements of operations or the consolidated statements of cash flows.
In May 2015, the FASB issued ASU 2015-07,Fair Value Measurements—Disclosures for Certain Entities that Calculate Net Asset Value per Share. This amendment updates guidance intended to
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
eliminate the diversity in practice surrounding how investments measured at net asset value under the practical expedient with future redemption dates have been categorized in the fair value hierarchy. Under the updated guidance, investments for which fair value is measured at net asset value per share using the practical expedient should no longer be categorized in the fair value hierarchy, while investments for which fair value is measured at net asset value per share but the practical expedient is not applied should continue to be categorized in the fair value hierarchy. The updated guidance requires retrospective adoption for all periods presented and is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. Main Street adopted this standard during the three months ended March 31, 2016. There was no impact of the adoption of this new accounting standardthese rules on Main Street'sStreet’s consolidated financial statements as nonewas not material.
In December 2020, the SEC published Release No. IC-34084 (the “December 2020 Release”) Use of Derivatives by Registered Investment Companies and Business Development Companies, announcing its investments are measured throughadoption of Rule 18f-4 and amendment of Rule 6c-11 under the 1940 Act to provide an updated, comprehensive approach to the regulation of registered investment companies’, including BDCs’, use of derivatives and address investor protection concerns. In part, the practical expedient.
In February 2016,rules adopted pursuant to the FASB issued ASU 2016-02,Leases, which requires lesseesDecember 2020 Release require that funds using derivatives generally will have to recognizeadopt a derivatives risk management program that a derivatives risk manager administers and that the fund’s board of directors oversees, and comply with an outer limit on the balance sheetfund leverage. Funds that use derivatives only in a right-of-use asset, representing its rightlimited manner will not be subject to use the underlying asset for the lease term,these requirements, but they will have to adopt and a lease liability for all leases with terms greater than 12 months. The guidance also requires qualitativeimplement policies and quantitative disclosuresprocedures reasonably designed to assessmanage the amount, timing,fund’s derivatives risks. Funds also will be subject to reporting and uncertainty of cash flows arising from leases. The standard requires the use of a modified retrospective transition approach, which includes a number of optional practical expedients that entities may elect to apply. The new guidance is effective for annual periods beginning after December 15, 2018, and interim periods therein. Early application is permitted. Whilerecordkeeping requirements regarding their derivatives use. Main Street continues to assessadopted the effect of adoption, Main Street currently believes the most significant change relatesrules pursuant to the recognition of a new right-of-use asset and lease liability on its consolidated balance sheet for its office space operating lease. Main Street currently has one operating lease for office space and does not expect a significant change in the leasing activity between now and adoption. See further discussion of the operating lease obligation in Note M.
In March 2016, the FASB issued ASU 2016-09, which is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new guidance is effective for annual periods beginning after December 15, 2016, and interim periods therein. Early application is permitted. Main Street elected to early adopt this standard2020 Release during the three monthsquarter ended March 31, 2016. See further discussion2021. As Main Street is a limited user of derivatives, the impact of the adoption of this standard in Note B.8.
In August 2016,these rules on the FASB issued ASU 2016-15,Statement of Cash Flows (Topic 230), which is intended to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2017, and interim periods therein. Early application is permitted. The impact of the adoption of this new accounting standard on Main Street's consolidated financial statements iswas not expected to be material.
From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted by Main Street as of the specified effective date. Main Street believes that the impact of recently issued standards and any that are not yet effective will not have a material impact on its consolidated financial statements upon adoption.
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
NOTE C—FAIR VALUE HIERARCHY FOR INVESTMENTS AND DEBENTURES—PORTFOLIO COMPOSITION
ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and enhances disclosure requirements for fair value measurements. Main Street accounts for its investments at fair value.
Fair Value Hierarchy
In accordance with ASC 820, Main Street has categorized its investments based on the priority of the inputs to the valuation technique into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical investments (Level 1) and the lowest priority to unobservable inputs (Level 3).
Investments recorded on Main Street'sStreet’s balance sheet are categorized based on the inputs to the valuation techniques as follows:
Level 1—Investments whose values are based on unadjusted quoted prices for identical assets in an active market that Main Street has the ability to access (examples include investments in active exchange-traded equity securities and investments in most U.S. government and agency securities).
Level 2—Investments whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the investment. Level 2 inputs include the following:
| ● | Quoted prices for similar assets in active markets (for example, investments in restricted stock); |
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| ● | Quoted prices for identical or similar assets in non-active markets (for example, investments in thinly traded public companies); |
| ● | Pricing models whose inputs are observable for substantially the full term of the investment (for example, market interest rate indices); and |
| ● | Pricing models whose inputs are derived principally from, or corroborated by, observable market data through correlation or other means for substantially the full term of the investment. |
Level 3—Investments whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement (for example, investments in illiquid securities issued by privateprivately held companies). These inputs reflect management'smanagement’s own assumptions about the assumptions a market participant would use in pricing the investment.
As required by ASC 820, when the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, unrealized appreciation and depreciation related to such investments categorized within the Level 3 tables below may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3). Main Street conducts reviews of
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
fair value hierarchy classifications on a quarterly basis. During the classification process, Main Street may determine that it is appropriate to transfer investments between fair value hierarchy Levels. These transfers occur when Main Street has concluded that it is appropriate for the classification of an individual asset to be changed due to a change in the factors used to determine the selection of the Level. Any such changes are deemed to be effective during the quarter in which the transfer occurs.
As of SeptemberJune 30, 2017,2021 and December 31, 2020, all of Main Street'sStreet’s LMM portfolio investments consisted of illiquid securities issued by private companies. As a result, as of September 30, 2017,privately held companies and the fair value determination for all of Main Street's LMM portfoliothese investments primarily consisted of unobservable inputs. As a result, all of Main Street'sStreet’s LMM portfolio investments were categorized as Level 3 as of SeptemberJune 30, 2017. As of December 31, 2016, all of Main Street's LMM portfolio investments except for the equity investment in one portfolio company consisted of illiquid securities issued by private companies. The investment which was the exception was in a company with publicly traded equity. As a result, as of December 31, 2016, the fair value determination for Main Street's LMM portfolio investments primarily consisted of unobservable inputs. The fair value determination for the publicly traded equity security consisted of observable inputs in non-active markets for which sufficient observable inputs were available to determine the fair value. As a result, all of Main Street's LMM portfolio investments were categorized as Level 3 as of December 31, 2016, except for the one publicly traded equity security which was categorized as Level 2.
As of September 30, 20172021 and December 31, 2016,2020.
As of June 30, 2021 and December 31, 2020, Main Street'sStreet’s Middle Market portfolio investments consisted primarily of investments in secured and unsecured debt investments and independently rated debt investments. The fair value determination for these investments consisted of a combination of observable inputs in non-active markets for which sufficient observable inputs were not available to determine the fair value of these investments and unobservable inputs. As a result, all of Main Street'sStreet’s Middle Market portfolio investments were categorized as Level 3 as of SeptemberJune 30, 20172021 and December 31, 2016.2020.
As of SeptemberJune 30, 20172021 and December 31, 2016,2020, Main Street's Street’s private loan (“Private LoanLoan”) portfolio investments primarily consisted of investments in interest-bearing secured debt investments. The fair value determination for these investments consisted of a combination of observable inputs in non-active markets for which sufficient observable inputs were not available to determine the fair value of these investments and unobservable inputs. As a result, all of Main Street'sStreet’s Private Loan portfolio investments were categorized as Level 3 as of SeptemberJune 30, 20172021 and December 31, 2016.2020.
As of SeptemberJune 30, 20172021 and December 31, 2016,2020, Main Street'sStreet’s Other Portfolio investments consisted of illiquid securities issued by private companies. Theprivately held companies and the fair value determination for these investments primarily consisted of unobservable inputs. As a result, all of Main Street'sStreet’s Other Portfolio investments were categorized as Level 3 as of SeptemberJune 30, 20172021 and December 31, 2016.2020.
As of June 30, 2021, Main Street held several short-term portfolio investments consisting primarily of investments in secured debt investments and independently rated debt investments. The fair value determination for these investments consisted of available observable inputs in non-active markets sufficient to determine the fair value of these investments. As a result, all of Main Street’s short-term portfolio investments were categorized as Level 2 as of June 30, 2021. Main Street did not hold any short-term portfolio investments as of December 31, 2020.
The fair value determination of each portfolio investment categorized as Level 3 required one or more of the following unobservable inputs:
| ● | Financial information obtained from each portfolio company, including unaudited statements of operations and balance sheets for the most recent period available as compared to budgeted numbers; |
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MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
| ● | Current and projected financial condition of the portfolio company; |
| ● | Current and projected ability of the portfolio company to service its debt obligations; |
| ● | Type and amount of collateral, if any, underlying the investment; |
| ● | Current financial ratios (e.g., fixed charge coverage ratio, interest coverage ratio and net debt/EBITDA ratio) applicable to the investment; |
| ● | Current liquidity of the investment and related financial ratios (e.g., current ratio and quick ratio); |
| ● | Pending debt or capital restructuring of the portfolio company; |
| ● | Projected operating results of the portfolio company; |
| ● | Current information regarding any offers to purchase the investment; |
| ● | Current ability of the portfolio company to raise any additional financing as needed; |
| ● | Changes in the economic environment which may have a material impact on the operating results of the portfolio company; |
| ● | Internal occurrences that may have an impact (both positive and negative) on the operating performance of the portfolio company; |
| ● | Qualitative assessment of key management; |
| ● | Contractual rights, obligations or restrictions associated with the investment; and |
| ● | Other factors deemed relevant. |
The use of collateral, if any, underlyingsignificant unobservable inputs creates uncertainty in the investment;
reporting date. The significant unobservable inputs used in the fair value measurement of Main Street'sStreet’s LMM equity securities, which are generally valued through an average of the discounted cash flow technique and the market comparable/enterprise value technique (unless one of these approaches is determined to not be appropriate), are (i) EBITDA multiples and (ii) the weighted-average cost of capital ("WACC"(“WACC”). Significant increases (decreases) in EBITDA multiple inputs in isolation would result in a significantly higher (lower) fair value measurement. On the contrary, significant increases (decreases) in WACC inputs in isolation would result in a significantly lower (higher) fair value measurement. The significant unobservable inputs used in the fair value measurement of Main Street'sStreet’s LMM, Middle Market and Private Loan and Other Portfolio debt securities are (i) risk adjusted discount rates used in the Yield-to-Maturity valuation technique (described in Note(see “Note B.1.—Valuation of the Investment Portfolio)Portfolio”) and (ii) the percentage of expected principal recovery. Significant increases (decreases) in any of these discount rates in isolation would result in a significantly lower (higher) fair value measurement. Significant increases (decreases) in any of these expected principal recovery percentages in isolation would result in a significantly higher (lower) fair value measurement. However, due to the nature of certain investments, fair value measurements may be based on other criteria, such as third-party appraisals of collateral and fair values as determined by independent third parties, which are not presented in the tables below.
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MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
The following tables provide a summary of the significant unobservable inputs used to fair value Main Street'sStreet’s Level 3 portfolio investments as of SeptemberJune 30, 20172021 and December 31, 2016:2020:
| | | | | | | | | | | | | | |
|
| Fair Value as of |
| |
| |
| |
| |
| |
| |
| | June 30, | | | | | | | | | | |
| |
Type of | | 2021 | | | | Significant | | | | Weighted | | |
| |
Investment |
| (in thousands) | | Valuation Technique | | Unobservable Inputs | | Range(3) | | Average(3) | | Median(3) | | |
Equity investments | | $ | 916,145 |
| Discounted cash flow |
| WACC |
| 9.6% - 20.6% |
| 14.0 | % | 14.8 | % |
| | | |
| Market comparable / Enterprise Value |
| EBITDA multiple (1) |
| 4.5x - 8.5x(2) |
| 6.7x |
| 6.1x | |
Debt investments | | $ | 1,508,135 |
| Discounted cash flow |
| Risk adjusted discount factor |
| 5.8% - 15.7%(2) |
| 10.0 | % | 10.0 | % |
| | | | | |
| Expected principal recovery percentage |
| 0.0% - 100.0% |
| 99.6 | % | 100.0 | % |
Debt investments | | $ | 490,705 |
| Market approach |
| Third‑party quote |
| 43.9 - 101.5 |
| 97.2 |
| 99.5 | |
Total Level 3 investments | | $ | 2,914,985 | | | | | | | | | | | |
| (1) | EBITDA may include proforma adjustments and/or other addbacks based on specific circumstances related to each investment. |
| (2) | Range excludes outliers that are greater than one standard deviation from the mean. Including these outliers, the range for EBITDA multiple is 2.2x - 15.0x and the range for risk adjusted discount factor is 4.4% - 38.0%. |
| (3) | Does not include investments for which the valuation technique does not include the use of the applicable fair value input. |
Type of Investment | Fair Value as of September 30, 2017 (in thousands) | Valuation Technique | Significant Unobservable Inputs | Range(3) | Weighted Average(3) | Median(3) | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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| Fair Value as of |
| |
| |
| |
| |
| |
| |||||||||||||||||
| | December 31, | | | | | | | | | | |
| |||||||||||||||||
Type of | | 2020 | | | | Significant | | | | Weighted | | |
| |||||||||||||||||
Investment |
| (in thousands) | | Valuation Technique | | Unobservable Inputs | | Range(3) | | Average(3) | | Median(3) | | |||||||||||||||||
Equity investments | $ | 606,493 | Discounted cash flow | WACC | 9.9% - 22.7% | 12.4% | 12.8% | | $ | 877,732 |
| Discounted cash flow |
| WACC |
| 9.4% - 21.0% |
| 14.3 | % | 15.0 | % | |||||||||
| Market comparable / Enterprise Value | EBITDA multiple(1) | 4.5x - 8.5x(2) | 7.3x | 6.0x | ||||||||||||||||||||||||||
Debt investments | $ | 893,108 | Discounted cash flow | Risk adjusted discount factor | 7.1% - 15.2%(2) | 10.9% | 10.6% | |||||||||||||||||||||||
| Expected principal recovery percentage | 3.0% - 100.0% | 99.8% | 100.0% | |||||||||||||||||||||||||||
| | | |
| Market comparable / Enterprise Value |
| EBITDA multiple (1) |
| 4.5x - 8.5x(2) |
| 7.0x |
| 6.1x | | ||||||||||||||||
Debt investments | $ | 670,380 | Market approach | Third-party quote | 10.0 - 103.3 | | $ | 1,339,079 |
| Discounted cash flow |
| Risk adjusted discount factor |
| 7.4% - 15.3%(2) |
| 10.6 | % | 10.8 | % | |||||||||||
| | | | | | | | | | | | | | | | |
| Expected principal recovery percentage |
| 0.0% - 100.0% |
| 99.4 | % | 100.0 | % | ||||||
Debt investments | | $ | 468,055 |
| Market approach |
| Third‑party quote |
| 45.0 - 100.3 |
| 94.7 |
| 96.5 | | ||||||||||||||||
Total Level 3 investments | $ | 2,169,981 | | $ | 2,684,866 | | | | | | | | | | | | ||||||||||||||
| (1) | EBITDA may include proforma adjustments and/or other addbacks based on specific circumstances related to each investment. |
| (2) | Range excludes outliers that are greater than one standard deviation from the mean. Including these outliers, the range for EBITDA multiple is 2.2x - 15.0x and the range for risk adjusted discount factor is 5.4% - 29.5%. |
| (3) | Does not include investments for which the valuation technique does not include the use of the applicable fair value input. |
65
Type of Investment | Fair Value as of December 31, 2016 (in thousands) | Valuation Technique | Significant Unobservable Inputs | Range(3) | Weighted Average(3) | Median(3) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity investments | $ | 567,003 | Discounted cash flow | WACC | 10.4% - 23.1% | 13.0% | 13.7% | |||||||||
| Market comparable / Enterprise Value | EBITDA multiple(1) | 4.5x - 8.5x(2) | 7.1x | 6.0x | ||||||||||||
Debt investments | $ | 808,895 | Discounted cash flow | Risk adjusted discount factor | 7.4% - 15.9%(2) | 11.8% | 11.6% | |||||||||
| Expected principal recovery percentage | 3.0% - 100.0% | 99.7% | 100.0% | |||||||||||||
Debt investments | $ | 618,928 | Market approach | Third-party quote | 22.5 - 108.0 | |||||||||||
| | | | | | | | | | | | | | | | | |
Total Level 3 investments | $ | 1,994,826 | ||||||||||||||
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
The following tables provide a summary of changes in fair value of Main Street'sStreet’s Level 3 portfolio investments for the nine monthsix-month periods ended SeptemberJune 30, 20172021 and 20162020 (amounts in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | Net | | | | | | | | | | |
| | Fair Value | | Transfers | | | | | | | | Changes | | Net | | | | | Fair Value | |||||
| | as of | | Into | | | | | | | | from | | Unrealized | | | | | as of | |||||
Type of |
| December 31, |
| Level 3 |
| Redemptions/ |
| New |
| Unrealized |
| Appreciation | | | |
| June 30, | |||||||
Investment |
| 2020 |
| Hierarchy |
| Repayments |
| Investments |
| to Realized |
| (Depreciation) |
| Other(1) |
| 2021 | ||||||||
Debt | | $ | 1,807,134 | | $ | — | | $ | (282,896) | | $ | 457,028 | | $ | 9,781 | | $ | 11,278 | | $ | (3,485) | | $ | 1,998,840 |
Equity | | | 866,734 | | | — | | | (49,565) | | | 20,584 | | | 5,177 | | | 57,120 | | | 5,515 | | | 905,565 |
Equity Warrant | | | 10,998 | | | — | | | — | | | — | | | 1,128 | | | 484 | | | (2,030) | | | 10,580 |
| | $ | 2,684,866 | | $ | — | | $ | (332,461) | | $ | 477,612 | | $ | 16,086 | | $ | 68,882 | | $ | — | | $ | 2,914,985 |
| (1) | Includes the impact of non-cash conversions. These transactions represent non-cash investing activities. See additional cash flow information at the consolidated statements of cash flows. |
| | | | | | | | | | | | | | | | | | | | | | | | |
|
| | |
| | |
| | |
| | |
| Net |
| | |
| | |
| | | |
| | Fair Value | | Transfers | | | | | | | | Changes | | Net | | | | | Fair Value | |||||
| | as of | | Into | | | | | | | | from | | Unrealized | | | | | as of | |||||
Type of | | December 31, | | Level 3 | | Redemptions/ | | New | | Unrealized | | Appreciation | | | | | June 30, | |||||||
Investment | | 2019 | | Hierarchy | | Repayments | | Investments |
| to Realized | | (Depreciation) | | Other(1) | | 2020 | ||||||||
Debt | | $ | 1,782,575 | | $ | — | | $ | (256,050) | | $ | 225,646 | | $ | 29,876 | | $ | (124,365) | | $ | (12,268) | | $ | 1,645,414 |
Equity | |
| 809,538 | |
| — | |
| (21,380) | |
| 45,061 | |
| (1,112) | |
| (80,261) | |
| 12,268 | |
| 764,114 |
Equity Warrant | |
| 10,211 | |
| — | |
| (1,096) | |
| — | |
| 1,096 | |
| (186) | |
| — | |
| 10,025 |
| | $ | 2,602,324 | | $ | — | | $ | (278,526) | | $ | 270,707 | | $ | 29,860 | | $ | (204,812) | | $ | — | | $ | 2,419,553 |
| (1) | Includes the impact of non-cash conversions. These transactions represent non-cash investing activities. See additional cash flow information at the consolidated statements of cash flows. |
Type of Investment | Fair Value as of December 31, 2016 | Transfers Into Level 3 Hierarchy | Redemptions/ Repayments | New Investments | Net Changes from Unrealized to Realized | Net Unrealized Appreciation (Depreciation) | Other(1) | Fair Value as of September 30, 2017 | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Debt | $ | 1,427,823 | $ | — | $ | (556,538 | ) | $ | 701,633 | $ | 12,988 | $ | (16,362 | ) | $ | (6,056 | ) | $ | 1,563,488 | ||||||
Equity | 549,453 | — | (41,250 | ) | 68,286 | (27,562 | ) | 39,244 | 6,873 | 595,044 | |||||||||||||||
Equity Warrant | 17,550 | — | (3,261 | ) | 331 | (1,542 | ) | (812 | ) | (817 | ) | 11,449 | |||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 1,994,826 | $ | — | $ | (601,049 | ) | $ | 770,250 | $ | (16,116 | ) | $ | 22,070 | $ | — | $ | 2,169,981 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Type of Investment | Fair Value as of December 31, 2015 | Transfers Into Level 3 Hierarchy | Redemptions/ Repayments | New Investments | Net Changes from Unrealized to Realized | Net Unrealized Appreciation (Depreciation) | Other(1) | Fair Value as of September 30, 2016 | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Debt | 1,265,544 | — | (289,261 | ) | 385,476 | 34,567 | (3,893 | ) | (5,998 | ) | 1,386,435 | ||||||||||||||
Equity | 519,966 | — | (14,797 | ) | 61,543 | (59,681 | ) | 3,821 | 5,998 | 516,850 | |||||||||||||||
Equity Warrant | 10,646 | — | (1,011 | ) | 4,750 | 1,011 | (574 | ) | — | 14,822 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1,796,156 | — | (305,069 | ) | 451,769 | (24,103 | ) | (646 | ) | — | 1,918,107 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
As of September
At June 30, 20172021 and December 31, 2016, the fair value determination for the SBIC debentures recorded at fair value primarily consisted of unobservable inputs. As a result, the SBIC debentures which are recorded at fair value were categorized as Level 3.2020, Main Street determines the fair value of these instruments primarily using a Yield-to-Maturity approach that analyzes the discounted cash flows of interest and principal for each SBIC debenture recorded at fair value based on estimated market interest rates for debt instruments of similar structure, terms, and maturity. Main Street's estimate of the expected repayment date of principal for each SBIC debenture recorded at fair value is the legal maturity date of the instrument. The significant unobservable inputs used in the fair value measurement of Main Street's SBIC debentures recorded at fair value are the estimated market interest rates used to fair value each debenture using the yield valuation technique described above. Significant increases (decreases) in the estimated market interest rates in isolation would result in a significantly lower (higher) fair value measurement.
The following tables provide a summary of the significant unobservable inputs used to fair value Main Street's Level 3 SBIC debentures as of September 30, 2017 and December 31, 2016 (amounts in thousands):
Type of Instrument | Fair Value as of September 30, 2017 | Valuation Technique | Significant Unobservable Inputs | Range | Weighted Average | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
SBIC debentures | $ | 49,412 | Discounted cash flow | Estimated market interest rates | 4.1% - 4.9% | 4.3 | % | ||||||
Type of Instrument | Fair Value as of December 31, 2016 | Valuation Technique | Significant Unobservable Inputs | Range | Weighted Average | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
SBIC debentures | $ | 74,803 | Discounted cash flow | Estimated market interest rates | 3.4% - 5.3% | 4.2 | % | ||||||
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
The following tables provide a summary of changes for the Level 3 SBIC debentures recorded at fair value for the nine month periods ended September 30, 2017 and 2016 (amounts in thousands):
Type of Instrument | Fair Value as of December 31, 2016 | Repayments | Net Realized Loss | New SBIC Debentures | Net Unrealized (Appreciation) Depreciation | Fair Value as of September 30, 2017 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
SBIC debentures at fair value | $ | 74,803 | $ | (25,200 | ) | $ | 5,217 | $ | — | $ | (5,408 | ) | $ | 49,412 | |||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Type of Instrument | Fair Value as of December 31, 2015 | Repayments | Net Realized Loss | New SBIC Debentures | Net Unrealized (Appreciation) Depreciation | Fair Value as of September 30, 2016 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
SBIC debentures at fair value | $ | 73,860 | $ | — | $ | — | $ | — | $ | 820 | $ | 74,680 | |||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
At September 30, 2017 and December 31, 2016, Main Street'sStreet’s investments and SBIC debentures at fair value were categorized as follows in the fair value hierarchy for ASC 820 purposes:
| | | | | | | | | | | | |
| | | | | Fair Value Measurements | |||||||
| | | | | (in thousands) | |||||||
|
| | |
| Quoted Prices in |
| | |
| Significant | ||
| | | |
| Active Markets for |
| Significant Other |
| Unobservable | |||
| | | |
| Identical Assets |
| Observable Inputs |
| Inputs | |||
At June 30, 2021 | | Fair Value |
| (Level 1) | | (Level 2) |
| (Level 3) | ||||
LMM portfolio investments | | $ | 1,341,331 | | $ | — | | $ | — | | $ | 1,341,331 |
Middle Market portfolio investments | |
| 434,745 | |
| — | |
| — | |
| 434,745 |
Private Loan portfolio investments | |
| 863,621 | |
| — | |
| — | |
| 863,621 |
Other Portfolio investments | |
| 153,558 | |
| — | |
| — | |
| 153,558 |
External Investment Manager | |
| 121,730 | |
| — | |
| — | |
| 121,730 |
Short-term portfolio investments | | | 57,285 | | | — | | | 57,285 | | | — |
Total investments | | $ | 2,972,270 | | $ | — | | $ | 57,285 | | $ | 2,914,985 |
| | | | | | | | | | | | |
|
| | | | Fair Value Measurements | |||||||
| | | | | (in thousands) | |||||||
| | | | | Quoted Prices in | | | | | Significant | ||
| | | |
| Active Markets for |
| Significant Other | | Unobservable | |||
| | | |
| Identical Assets |
| Observable Inputs |
| Inputs | |||
At December 31, 2020 | | Fair Value |
| (Level 1) |
| (Level 2) |
| (Level 3) | ||||
LMM portfolio investments | | $ | 1,285,524 | | $ | — | | $ | — | | $ | 1,285,524 |
Middle Market portfolio investments | |
| 445,609 | |
| — | |
| — | |
| 445,609 |
Private Loan portfolio investments | |
| 740,370 | |
| — | |
| — | |
| 740,370 |
Other Portfolio investments | |
| 96,603 | |
| — | |
| — | |
| 96,603 |
External Investment Manager | |
| 116,760 | |
| — | |
| — | |
| 116,760 |
Total investments | | $ | 2,684,866 | | $ | — | | $ | — | | $ | 2,684,866 |
66
| | | Fair Value Measurements | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | (in thousands) | |||||||||||
At September 30, 2017 | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||
LMM portfolio investments | $ | 938,042 | $ | — | $ | — | $ | 938,042 | |||||
Middle Market portfolio investments | 607,476 | — | — | 607,476 | |||||||||
Private Loan portfolio investments | 485,929 | — | — | 485,929 | |||||||||
Other Portfolio investments | 99,230 | — | — | 99,230 | |||||||||
External Investment Manager | 39,304 | — | — | 39,304 | |||||||||
| | | | | | | | | | | | | | |
Total portfolio investments | 2,169,981 | — | — | 2,169,981 | |||||||||
Marketable securities and idle funds investments | — | — | — | — | |||||||||
| | | | | | | | | | | | | | |
Total investments | $ | 2,169,981 | $ | — | $ | — | $ | 2,169,981 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
SBIC debentures at fair value | $ | 49,412 | $ | — | $ | — | $ | 49,412 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
| | | Fair Value Measurements | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | (in thousands) | |||||||||||
At December 31, 2016 | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||
LMM portfolio investments | $ | 892,592 | $ | — | $ | 2,080 | $ | 890,512 | |||||
Middle Market portfolio investments | 630,578 | — | — | 630,578 | |||||||||
Private Loan portfolio investments | 342,867 | — | — | 342,867 | |||||||||
Other Portfolio investments | 100,252 | — | — | 100,252 | |||||||||
External Investment Manager | 30,617 | — | — | 30,617 | |||||||||
| | | | | | | | | | | | | | |
Total portfolio investments | 1,996,906 | — | 2,080 | 1,994,826 | |||||||||
Marketable securities and idle funds investments | — | — | — | — | |||||||||
| | | | | | | | | | | | | | |
Total investments | $ | 1,996,906 | $ | — | $ | 2,080 | $ | 1,994,826 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
SBIC debentures at fair value | $ | 74,803 | $ | — | $ | — | $ | 74,803 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Investment Portfolio Composition
Main Street'sStreet’s LMM portfolio investments primarily consist of secured debt, equity warrants and direct equity investments in privately held, LMM companies based in the United States. Main Street'sStreet’s LMM portfolio companies generally have annual revenues between $10 million and $150 million, and its LMM investments generally range in size from $5 million to $50 million. The LMM debt investments are typically secured by either a first or second priority lien on the assets of the portfolio company, generally bear interest atcan include either fixed rates,or floating rate terms and generally have a term of between five and seven years from the original investment date. In most LMM portfolio investments, Main Street receives nominally priced equity warrants and/or makes direct equity investments in connection with a debt investment.
Main Street'sStreet’s Middle Market portfolio investments primarily consist of direct investments in or secondary purchases of interest-bearing debt securities in privately held companies based in the United States that are generally larger in size than the companies included in Main Street'sStreet’s LMM portfolio. Main Street'sStreet’s Middle Market portfolio companies generally have annual revenues between $150 million and $1.5 billion, and its Middle Market investments generally range in size from $3 million to $15$20 million. Main Street'sStreet’s Middle Market portfolio debt investments are generally secured by either a first or second priority lien on the assets of the portfolio company and typically have a term of between three and seven years from the original investment date.
Main Street's private loan ("Street’s Private Loan")Loan portfolio investments are primarily debt securities in privately held companies whichthat have been originated through strategic relationships with other investment funds on a collaborative basis, and are often referred to in the debt markets as "club“club deals."” Private Loan investments are typically similar in size, structure, terms and conditions to investments Main Street holds in its LMM portfolio and Middle Market portfolio. Main Street'sStreet’s Private Loan portfolio debt investments are generally secured by either a first or second priority lien on the assets of the portfolio company and typically have a term of between three and seven years from the original investment date.
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
Main Street's other portfolio ("Street’s Other Portfolio")Portfolio investments primarily consist of investments whichthat are not consistent with the typical profiles for its LMM, Middle Market andor Private Loan portfolio investments, including investments which may be managed by third parties. In the Other Portfolio, Main Street may incur indirect fees and expenses in connection with investments managed by third parties, such as investments in other investment companies or private funds. For Other Portfolio investments, Main Street generally receives distributions related to the assets held by the portfolio company. Those assets are typically expected to be liquidated over a five to tenten-year period.
Based upon Main Street’s liquidity and capital structure management activities, Main Street’s Investment Portfolio may also include short-term portfolio investments that are atypical of Main Street’s LMM, Middle Market and Private Loan portfolio investments in that they are intended to be a short-term deployment of capital. Those assets are typically expected to be liquidated in one year period.or less. These short-term investments are not expected to be a significant portion of the overall Investment Portfolio.
Main Street'sStreet’s external asset management business is conducted through its External Investment Manager. The External Investment Manager earns management fees based on the assets of the funds under management for external parties and may earn incentive fees, or a carried interest, based on the performance of the fundsassets managed. Main Street entered into an agreement with the External Investment Manager to share employees in connection with its asset management business generally, and specifically for its relationship with MSC Income Fund, Inc. (“MSC Income”), formerly known as HMS Income Fund, Inc. ("HMS Income"). Through this agreement, Main Street shares employees with the External Investment Manager, including their related infrastructure, business relationships, management expertise and capital raising capabilities, andcapabilities. Main Street allocates the related expenses to the External Investment Manager pursuant to the sharing agreement. Main Street'sStreet’s total expenses for the three months ended September 30, 2017 and 2016 are net of expenses allocated to the External Investment Manager for the three months ended June 30, 2021 and 2020 of $1.7$2.6 million and $1.2$1.8 million, respectively. Main Street's total expensesrespectively, and for the ninesix months ended SeptemberJune 30, 20172021 and 2016 are net2020 of expenses allocated to the External Investment Manager of $4.8$5.0 million and $3.7$3.4 million, respectively.
Investment income, consisting of interest, dividends and fees, can fluctuate dramatically due to various factors, including the level of new investment activity, repayments of debt investments or sales of equity interests. Investment income in any given year could also be highly concentrated among several portfolio companies. For the three and ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, Main Street did not record investment income from any single portfolio company in excess of 10% of total investment income.
67
The following tables provide a summary of Main Street'sStreet’s investments in the LMM, Middle Market and Private Loan portfolios as of SeptemberJune 30, 20172021 and December 31, 20162020 (this information
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
excludes the Other Portfolio, short-term portfolio investments and the External Investment Manager, all of which are discussed further below):
| | | | | | | | | | |
|
| As of June 30, 2021 |
| |||||||
| | LMM (a) | | Middle Market | | Private Loan |
| |||
| | (dollars in millions) |
| |||||||
Number of portfolio companies | | | 69 |
| | 39 |
| | 69 | |
Fair value | | $ | 1,341.3 |
| $ | 434.7 |
| $ | 863.6 | |
Cost | | $ | 1,110.9 |
| $ | 473.2 |
| $ | 884.0 | |
Debt investments as a % of portfolio (at cost) | | | 66.9 | % | | 93.4 | % | | 94.9 | % |
Equity investments as a % of portfolio (at cost) | | | 33.1 | % | | 6.6 | % | | 5.1 | % |
% of debt investments at cost secured by first priority lien | | | 98.6 | % | | 97.0 | % | | 97.2 | % |
Weighted-average annual effective yield (b) | | | 11.4 | % | | 7.7 | % | | 8.4 | % |
Average EBITDA (c) | | $ | 5.4 |
| $ | 74.3 |
| $ | 51.7 | |
| (a) | At June 30, 2021, Main Street had equity ownership in approximately 99% of its LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was approximately 39%. |
| (b) | The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of June 30, 2021, including amortization of deferred debt origination fees and accretion of original issue discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual status. The weighted-average annual effective yield is higher than what an investor in shares of Main Street’s common stock will realize on its investment because it does not reflect Main Street’s expenses or any sales load paid by an investor. |
| (c) | The average EBITDA is calculated using a simple average for the LMM portfolio and a weighted-average for the Middle Market and Private Loan portfolios. These calculations exclude certain portfolio companies, including three LMM portfolio companies, one Middle Market portfolio company and three Private Loan portfolio companies, as EBITDA is not a meaningful valuation metric for Main Street’s investments in these portfolio companies, and those portfolio companies whose primary purpose is to own real estate. |
| | | | | | | | | ||||||||||||
|
| As of December 31, 2020 |
| |||||||||||||||||
| | LMM (a) | | Middle Market | | Private Loan |
| |||||||||||||
| | As of September 30, 2017 | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | LMM(a) | Middle Market | Private Loan | |||||||||||||||||
| | (dollars in millions) | |||||||||||||||||||
| | (dollars in millions) |
| |||||||||||||||||
Number of portfolio companies | 71 | 68 | 56 | | 70 |
| | 42 |
| | 63 | | ||||||||
Fair value | $ | 938.0 | $ | 607.5 | $ | 485.9 | | $ | 1,285.5 |
| $ | 445.6 |
| $ | 740.4 | | ||||
Cost | $ | 804.6 | $ | 633.8 | $ | 505.6 | | $ | 1,104.6 |
| $ | 488.9 |
| $ | 769.0 | | ||||
% of portfolio at cost—debt | 68.1% | 96.9% | 94.5% | |||||||||||||||||
% of portfolio at cost—equity | 31.9% | 3.1% | 5.5% | |||||||||||||||||
Debt investments as a % of portfolio (at cost) | | 65.8 | % | | 93.0 | % | | 93.8 | % | |||||||||||
Equity investments as a % of portfolio (at cost) | | 34.2 | % | | 7.0 | % | | 6.2 | % | |||||||||||
% of debt investments at cost secured by first priority lien | 96.3% | 90.2% | 91.5% | | 98.1 | % | | 92.4 | % | | 95.4 | % | ||||||||
Weighted-average annual effective yield(b) | 11.9% | 8.7% | 9.3% | |||||||||||||||||
Average EBITDA(c) | $ | 4.3 | $ | 84.8 | $ | 38.0 | ||||||||||||||
Weighted-average annual effective yield (b) | | 11.6 | % | | 7.9 | % | | 8.7 | % | |||||||||||
Average EBITDA (c) | | $ | 5.3 |
| $ | 76.5 |
| $ | 58.1 | | ||||||||||
| (a) | At December 31, 2020, Main Street had equity ownership in approximately 99% of its LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was approximately 38%. |
| (b) | The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of December 31, 2020, including amortization of deferred debt origination fees and accretion of original issue discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual status. The weighted-average annual effective yield is higher than what an investor in shares of Main Street’s common stock will realize on its investment because it does not reflect Main Street’s expenses or any sales load paid by an investor. |
| (c) | The average EBITDA is calculated using a simple average for the LMM portfolio and a weighted-average for the Middle Market and Private Loan portfolios. These calculations exclude certain portfolio companies, including three LMM portfolio companies, one Middle Market portfolio company and four Private Loan portfolio companies, as |
68
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
portfolio companies, and those portfolio companies whose primary purpose is to own real estate.
| EBITDA is not a meaningful valuation metric for Main Street’s investments in these portfolio companies, and those portfolio companies whose primary purpose is to own real estate. |
| | As of December 31, 2016 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| | LMM(a) | Middle Market | Private Loan | |||||||
| | (dollars in millions) | |||||||||
Number of portfolio companies | 73 | 78 | 46 | |||||||
Fair value | $ | 892.6 | $ | 630.6 | $ | 342.9 | ||||
Cost | $ | 760.3 | $ | 646.8 | $ | 357.7 | ||||
% of total investments at cost—debt | 69.1% | 97.2% | 93.5% | |||||||
% of total investments at cost—equity | 30.9% | 2.8% | 6.5% | |||||||
% of debt investments at cost secured by first priority lien | 92.1% | 89.1% | 89.0% | |||||||
Weighted-average annual effective yield(b) | 12.5% | 8.5% | 9.6% | |||||||
Average EBITDA(c) | $ | 5.9 | $ | 98.6 | $ | 22.7 | ||||
As of SeptemberJune 30, 2017,2021, Main Street had Other Portfolio investments in elevenfourteen companies, collectively totaling approximately $99.2$153.6 million in fair value and approximately $105.6$170.6 million in cost basis and which comprised approximately 4.6%5.2% of Main Street'sStreet’s Investment Portfolio at fair value. As of December 31, 2016,2020, Main Street had Other Portfolio investments in tentwelve companies, collectively totaling approximately $100.3$96.6 million in fair value and approximately $107.1$124.7 million in cost basis and which comprised approximately 5.0%3.6% of Main Street'sStreet’s Investment Portfolio at fair value.
As of June 30, 2021, Main Street had short-term portfolio investments in ten companies, collectively totaling approximately $57.3 million in fair value and approximately $57.2 million in cost basis and which comprised approximately 1.9% of Main Street’s Investment Portfolio at fair value. As of December 31, 2020, Main Street held no short-term investments.
As discussed further in Note A.1., Main Street holds an investment in the External Investment Manager, a wholly owned subsidiary that is treated as a portfolio investment. As of SeptemberJune 30, 2017,2021, there was no$29.5 million cost basis in this investment and the investment had a fair value of approximately $39.3$121.7 million, which comprised approximately 1.8%4.1% of Main Street'sStreet’s Investment Portfolio at fair value. As of December 31, 2016,2020, there was no$29.5 million cost basis in this investment and the investment had a fair value of approximately $30.6$116.8 million, which comprised approximately 1.5%4.3% of Main Street'sStreet’s Investment Portfolio at fair value.
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
The following tables summarize the composition of Main Street'sStreet’s total combined LMM portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments at cost and fair value by type of investment as a percentage of the total combined LMM portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments, as of SeptemberJune 30, 20172021 and December 31, 20162020 (this information excludes the Other Portfolio, short-term portfolio investments and the External Investment Manager).
| | | | | | ||||||||
Cost: | September 30, 2017 | December 31, 2016 |
| June 30, 2021 |
| December 31, 2020 | | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
First lien debt | 78.2% | 76.1% |
| 80.1 | % | 77.0 | % | | |||||
Equity | 14.8% | 14.5% |
| 17.6 | % | 19.0 | % | | |||||
Second lien debt | 5.8% | 7.7% |
| 1.3 | % | 2.7 | % | | |||||
Equity warrants | 0.8% | 1.1% |
| 0.4 | % | 0.5 | % | | |||||
Other | 0.4% | 0.6% |
| 0.6 | % | 0.8 | % | | |||||
| | | | | | | | |
| 100.0 | % | 100.0 | % | |
| 100.0% | 100.0% | ||||||||||||
| | | | | | | | |||||||
| | | | | | |||||||||
| | | | | | | | |||||||
| | | | | | ||||||||
Fair Value: | September 30, 2017 | December 31, 2016 |
| June 30, 2021 |
| December 31, 2020 | |
| |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
First lien debt | 71.1% | 68.7% |
| 71.9 | % | 70.0 | % |
| |||||
Equity | 22.5% | 22.6% |
| 26.0 | % | 26.4 | % |
| |||||
Second lien debt | 5.4% | 7.2% |
| 1.1 | % | 2.4 | % |
| |||||
Equity warrants | 0.6% | 0.9% |
| 0.4 | % | 0.4 | % |
| |||||
Other | 0.4% | 0.6% |
| 0.6 | % | 0.8 | % |
| |||||
| | | | | | | | |
| 100.0 | % | 100.0 | % |
|
| 100.0% | 100.0% | ||||||||||||
| | | | | | | | |||||||
| | | | | | |||||||||
| | | | | | | | |||||||
The following tables summarize the composition of Main Street'sStreet’s total combined LMM portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments by geographic region of the United States and other countries at cost and fair value as a percentage of the total combined LMM portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments, as of SeptemberJune 30, 20172021 and December 31, 20162020 (this
69
information excludes the Other Portfolio, short-term portfolio investments and the External Investment Manager). The geographic composition is determined by the location of the corporate headquarters of the portfolio company.
| | | | | | |
Cost: |
| June 30, 2021 |
| December 31, 2020 | |
|
Northeast |
| 23.3 | % | 22.6 | % |
|
Southwest |
| 22.8 | % | 24.3 | % |
|
West |
| 20.8 | % | 21.0 | % |
|
Midwest |
| 16.8 | % | 18.2 | % |
|
Southeast |
| 14.2 | % | 12.8 | % |
|
Canada |
| 2.1 | % | 1.1 | % |
|
|
| 100.0 | % | 100.0 | % |
|
| | | | | | |
Fair Value: |
| June 30, 2021 |
| December 31, 2020 | |
|
Southwest |
| 23.5 | % | 24.7 | % |
|
Northeast |
| 22.4 | % | 21.7 | % |
|
West |
| 21.7 | % | 21.4 | % |
|
Midwest |
| 17.8 | % | 19.7 | % |
|
Southeast |
| 12.6 | % | 11.5 | % |
|
Canada |
| 2.0 | % | 1.0 | % |
|
|
| 100.0 | % | 100.0 | % |
|
Cost: | September 30, 2017 | December 31, 2016 | |||||
|---|---|---|---|---|---|---|---|
Southwest | 26.4% | 29.7% | |||||
Midwest | 23.1% | 23.0% | |||||
West | 18.9% | 16.1% | |||||
Northeast | 15.1% | 14.8% | |||||
Southeast | 13.1% | 13.1% | |||||
Canada | 2.3% | 1.7% | |||||
Other Non-United States | 1.1% | 1.6% | |||||
| | | | | | | | |
| 100.0% | 100.0% | ||||||
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
Fair Value: | September 30, 2017 | December 31, 2016 | |||||
|---|---|---|---|---|---|---|---|
Southwest | 26.6% | 31.0% | |||||
West | 21.6% | 18.3% | |||||
Midwest | 21.4% | 21.2% | |||||
Northeast | 14.8% | 13.9% | |||||
Southeast | 12.5% | 12.7% | |||||
Canada | 2.0% | 1.4% | |||||
Other Non-United States | 1.1% | 1.5% | |||||
| | | | | | | | |
| 100.0% | 100.0% | ||||||
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Main Street'sStreet’s LMM portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments are in companies conducting business in a variety of industries. The following tables summarize the composition of Main Street'sStreet’s total combined LMM portfolio investments, Middle Market portfolio investments and
70
Private Loan portfolio investments by industry at cost and fair value
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
as of SeptemberJune 30, 20172021 and December 31, 20162020 (this information excludes the Other Portfolio, short-term portfolio investments and the External Investment Manager).
| | | | | |
Cost: | | June 30, 2021 | | December 31, 2020 | |
Construction & Engineering |
| 6.9 | % | 6.0 | % |
Machinery |
| 5.9 | % | 6.4 | % |
Health Care Providers & Services |
| 5.3 | % | 5.1 | % |
Internet Software & Services |
| 5.3 | % | 5.2 | % |
Aerospace & Defense |
| 5.1 | % | 5.9 | % |
Software |
| 5.1 | % | 4.4 | % |
Professional Services |
| 5.0 | % | 5.1 | % |
Energy Equipment & Services |
| 4.7 | % | 4.5 | % |
Leisure Equipment & Products |
| 4.4 | % | 4.2 | % |
Specialty Retail |
| 4.3 | % | 3.1 | % |
Commercial Services & Supplies |
| 3.8 | % | 4.7 | % |
IT Services |
| 3.4 | % | 4.0 | % |
Diversified Telecommunication Services |
| 3.4 | % | 2.6 | % |
Communications Equipment |
| 3.1 | % | 3.3 | % |
Hotels, Restaurants & Leisure |
| 2.5 | % | 2.6 | % |
Food Products |
| 2.4 | % | 2.6 | % |
Oil, Gas & Consumable Fuels |
| 2.3 | % | 3.2 | % |
Building Products |
| 2.3 | % | 1.4 | % |
Tobacco |
| 2.1 | % | 2.2 | % |
Media |
| 2.0 | % | 2.1 | % |
Diversified Financial Services |
| 2.0 | % | 2.1 | % |
Distributors |
| 1.8 | % | 2.1 | % |
Electronic Equipment, Instruments & Components |
| 1.6 | % | 1.9 | % |
Computers & Peripherals |
| 1.6 | % | 1.5 | % |
Containers & Packaging |
| 1.4 | % | 1.6 | % |
Life Sciences Tools & Services |
| 1.3 | % | 1.4 | % |
Household Durables |
| 1.3 | % | 1.3 | % |
Diversified Consumer Services |
| 1.3 | % | 1.0 | % |
Trading Companies & Distributors |
| 1.0 | % | 1.2 | % |
Transportation Infrastructure |
| 1.0 | % | 1.0 | % |
Electrical Equipment | | 1.0 | % | 0.8 | % |
Food & Staples Retailing | | 0.9 | % | 1.0 | % |
Other (1) | | 4.5 | % | 4.5 | % |
|
| 100.0 | % | 100.0 | % |
| (1) | Includes various industries with each industry individually less than 1.0% of the total combined LMM portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments at each date. |
Cost: | September 30, 2017 | December 31, 2016 | |||||
|---|---|---|---|---|---|---|---|
Energy Equipment & Services | 6.9% | 7.5% | |||||
Hotels, Restaurants & Leisure | 6.6% | 6.5% | |||||
Machinery | 6.3% | 5.6% | |||||
Construction & Engineering | 6.1% | 5.3% | |||||
Specialty Retail | 5.2% | 4.4% | |||||
Media | 4.5% | 5.7% | |||||
Commercial Services & Supplies | 4.5% | 5.0% | |||||
Electronic Equipment, Instruments & Components | 4.2% | 4.5% | |||||
Professional Services | 3.6% | 1.4% | |||||
Health Care Providers & Services | 3.5% | 3.0% | |||||
Diversified Telecommunication Services | 3.1% | 3.3% | |||||
Leisure Equipment & Products | 3.1% | 0.9% | |||||
IT Services | 3.0% | 3.9% | |||||
Diversified Consumer Services | 2.9% | 2.8% | |||||
Internet Software & Services | 2.7% | 3.6% | |||||
Computers & Peripherals | 2.7% | 2.2% | |||||
Software | 2.2% | 2.6% | |||||
Health Care Equipment & Supplies | 2.0% | 2.3% | |||||
Communications Equipment | 2.0% | 2.3% | |||||
Aerospace & Defense | 2.0% | 0.9% | |||||
Distributors | 1.9% | 1.1% | |||||
Diversified Financial Services | 1.9% | 2.3% | |||||
Food Products | 1.9% | 2.6% | |||||
Building Products | 1.9% | 2.1% | |||||
Oil, Gas & Consumable Fuels | 1.8% | 1.2% | |||||
Auto Components | 1.6% | 3.0% | |||||
Construction Materials | 1.6% | 0.7% | |||||
Internet & Catalog Retail | 1.3% | 0.7% | |||||
Road & Rail | 1.0% | 1.5% | |||||
Real Estate Management & Development | 1.0% | 0.7% | |||||
Air Freight & Logistics | 1.0% | 1.0% | |||||
Consumer Finance | 0.7% | 1.5% | |||||
Other(1) | 5.3% | 7.9% | |||||
| | | | | | | | |
| 100.0% | 100.0% | ||||||
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
71
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
| | | | | | |||||||
Fair Value: | September 30, 2017 | December 31, 2016 | | June 30, 2021 | | December 31, 2020 | | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
Machinery | 7.4% | 6.7% |
| 7.5 | % | 8.1 | % | |||||
Construction & Engineering |
| 6.9 | % | 6.1 | % | |||||||
Software |
| 5.6 | % | 4.6 | % | |||||||
Health Care Providers & Services |
| 5.2 | % | 5.2 | % | |||||||
Specialty Retail |
| 4.8 | % | 3.4 | % | |||||||
Aerospace & Defense |
| 4.7 | % | 5.7 | % | |||||||
Internet Software & Services |
| 4.6 | % | 4.5 | % | |||||||
Leisure Equipment & Products |
| 4.2 | % | 4.0 | % | |||||||
Professional Services |
| 4.0 | % | 4.0 | % | |||||||
Diversified Consumer Services |
| 3.7 | % | 3.0 | % | |||||||
Commercial Services & Supplies |
| 3.6 | % | 4.5 | % | |||||||
IT Services |
| 3.2 | % | 3.8 | % | |||||||
Energy Equipment & Services |
| 3.2 | % | 3.0 | % | |||||||
Diversified Telecommunication Services |
| 3.1 | % | 2.0 | % | |||||||
Computers & Peripherals |
| 2.9 | % | 2.9 | % | |||||||
Communications Equipment |
| 2.5 | % | 2.7 | % | |||||||
Media |
| 2.4 | % | 2.5 | % | |||||||
Diversified Financial Services |
| 2.2 | % | 2.3 | % | |||||||
Building Products |
| 2.2 | % | 1.4 | % | |||||||
Food Products |
| 2.2 | % | 2.2 | % | |||||||
Tobacco |
| 2.1 | % | 2.1 | % | |||||||
Hotels, Restaurants & Leisure | 6.5% | 6.5% |
| 1.9 | % | 2.0 | % | |||||
Construction & Engineering | 6.2% | 5.6% | ||||||||||
Diversified Consumer Services | 6.2% | 5.5% | ||||||||||
Energy Equipment & Services | 5.7% | 5.8% | ||||||||||
Specialty Retail | 5.2% | 4.6% | ||||||||||
Commercial Services & Supplies | 4.2% | 5.0% | ||||||||||
Media | 4.1% | 5.2% | ||||||||||
Oil, Gas & Consumable Fuels |
| 1.8 | % | 2.7 | % | |||||||
Distributors |
| 1.8 | % | 2.1 | % | |||||||
Containers & Packaging |
| 1.7 | % | 1.7 | % | |||||||
Life Sciences Tools & Services |
| 1.2 | % | 1.4 | % | |||||||
Household Durables |
| 1.2 | % | 1.3 | % | |||||||
Construction Materials |
| 1.2 | % | 1.4 | % | |||||||
Trading Companies & Distributors |
| 1.0 | % | 1.2 | % | |||||||
Electronic Equipment, Instruments & Components | 3.8% | 3.9% | | 0.9 | % | 1.3 | % | |||||
Professional Services | 3.5% | 1.3% | ||||||||||
Health Care Providers & Services | 3.3% | 2.9% | ||||||||||
IT Services | 3.1% | 3.7% | ||||||||||
Computers & Peripherals | 3.0% | 2.3% | ||||||||||
Leisure Equipment & Products | 2.9% | 0.9% | ||||||||||
Diversified Telecommunication Services | 2.7% | 2.5% | ||||||||||
Internet Software & Services | 2.6% | 3.5% | ||||||||||
Software | 2.2% | 2.6% | ||||||||||
Health Care Equipment & Supplies | 2.1% | 2.4% | ||||||||||
Communications Equipment | 2.0% | 2.3% | ||||||||||
Aerospace & Defense | 1.9% | 0.8% | ||||||||||
Diversified Financial Services | 1.8% | 2.3% | ||||||||||
Distributors | 1.8% | 1.1% | ||||||||||
Food Products | 1.8% | 2.4% | ||||||||||
Building Products | 1.8% | 1.9% | ||||||||||
Construction Materials | 1.8% | 1.0% | ||||||||||
Oil, Gas & Consumable Fuels | 1.5% | 1.1% | ||||||||||
Auto Components | 1.4% | 2.9% | ||||||||||
Air Freight & Logistics | 1.2% | 1.1% | ||||||||||
Real Estate Management & Development | 1.1% | 0.7% | ||||||||||
Internet & Catalog Retail | 1.1% | 0.6% | ||||||||||
Road & Rail | 1.0% | 2.5% | ||||||||||
Consumer Finance | 0.6% | 1.3% | ||||||||||
Other(1) | 4.5% | 7.1% | ||||||||||
Transportation Infrastructure | | 0.9 | % | 1.0 | % | |||||||
Other (1) | | 5.6 | % | 5.9 | % | |||||||
| | | | | | | | | | 100.0 | % | 100.0 | % |
| 100.0% | 100.0% | |||||||||||
| | | | | | | | ||||||
| | | | | | ||||||||
| | | | | | | | ||||||
| (1) | Includes various industries with each industry individually less than 1.0% of the total combined LMM portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments at each date. |
At SeptemberJune 30, 20172021 and December 31, 2016,2020, Main Street had no portfolio investment that was greater than 10% of the Investment Portfolio at fair value.
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
Unconsolidated Significant Subsidiaries
In accordance with Rules 3-09 and 4-08(g) of Regulation S-X, Main Street must determine which ofevaluating its unconsolidated controlled portfolio companies if any, are considered "significant subsidiaries." In evaluating these unconsolidated controlled portfolio companies,in accordance with Regulation S-X, there are threetwo tests utilizedthat Main Street must utilize to determine if any of Main Street'sStreet’s Control Investments (as defined in Note A, including those unconsolidated portfolio companies defined as Control Investments in which Main Street does not own greater than 50% of the voting securities)securities or maintain greater than 50% of the board representation) are considered significant subsidiaries: the investment test the asset test and the income test. Rule 3-09 of Regulation S-X, as interpretedThe investment test is generally measured by dividing Main Street’s investment in the Control Investment by the SEC,value of Main Street’s total investments. The income test is generally measured by dividing the absolute value of the combined sum of total investment income, net realized gain (loss) and net unrealized appreciation (depreciation) from the relevant Control Investment for the period being tested by the absolute value of Main Street’s change in net assets resulting from operations for the same period. Regulation S-X requires Main Street to include (1) separate audited financial statements of an unconsolidated majority-owned subsidiary (Control Investments in which Main Street owns greater than 50% of the voting securities) in an annual report if any of the three tests exceed 20% of Main Street's total investments at fair value, total assets or total income, respectively. Rule 4-08(g) of Regulation S-X requiresand (2) summarized financial information of a Control Investment in an annual report if any of the three tests exceeds 10% of Main Street's annual total amounts and Rule 10-01(b)(1) of Regulation S-X requires summarized financial information in a quarterly report, respectively, if anycertain thresholds of
72
the threeinvestment or income tests exceeds 20% of Main Street's year-to-date total amounts.are exceeded and the unconsolidated portfolio company qualifies as a significant subsidiary.
As of SeptemberJune 30, 20172021 and December 31, 2016,2020, Main Street had no single investment that represented greater than 20% of its total Investment Portfolio at fair value and no singlequalified as a significant subsidiary under either the investment whose total assets represented greater than 20% of its total assets. After performing theor income test for the nine months ended September 30, 2017 and 2016, Main Street determined that the income from no single investment generated more than 20% of Main Street's total income.tests.
NOTE D—EXTERNAL INVESTMENT MANAGER
As discussed further in Note A.1.,A.1 and Note C, the External Investment Manager provides investment management and other services to External Parties. The External Investment Manager is accounted for as a portfolio investment of MSCC since the External Investment Manager conducts all of its investment management activities for External Parties.
During May 2012, Main Street entered into an investment sub-advisory agreement with HMS Adviser, LP ("(“HMS Adviser"Adviser”), which iswas the investment advisoradviser to HMSMSC Income a non-listed BDC,at the time, to provide certain investment advisory services to HMS Adviser. In December 2013, after obtaining required no-action relief from the SEC to allow it to own a registered investment adviser, Main Street assigned the sub-advisory agreement to the External Investment Manager since the fees received from such arrangement could otherwise have negative consequences on MSCC'sMSCC’s ability to meet the source-of-income requirement necessary for it to maintain its RIC tax treatment. Under the investment sub-advisory agreement, the External Investment Manager iswas entitled to 50% of the annual base management fee and the incentive fees earned by HMS Adviser under its advisory agreement with MSC Income. Effective October 30, 2020, the External Investment Manager and HMS Income.Adviser consummated the transactions contemplated by that certain asset purchase agreement by and among the External Investment Manager, HMS Adviser and the other parties thereto whereby the External Investment Manager became the sole investment adviser and administrator to MSC Income pursuant to an Investment Advisory and Administrative Services Agreement entered into between the External Investment Manager and MSC Income (the “Advisory Agreement”). The Advisory Agreement includes a 1.75% annual management fee, reduced from 2.00%, and the same incentive fee as under MSC Income’s prior advisory agreement with HMS Adviser, with the External Investment Manager receiving 100% of such fee income (increased from 50% previously).
As described more fully in Note L – Related Party Transactions, the External Investment Manager launched a new private fund, MS Private Loan Fund I, LP, a private investment fund with a strategy to co-invest with Main Street in Private Loan portfolio investments (the “Private Loan Fund”), in December 2020. The External Investment Manager has conditionally agreedentered into an Investment Management Agreement in December 2020 with the Private Loan Fund, pursuant to waive a limited amount ofwhich the External Investment Manager provides investment advisory and management services to the Private Loan Fund in exchange for an asset-based fee and certain incentive fees otherwise earned. fees.
During the three months ended SeptemberJune 30, 20172021 and 2016,2020, the External Investment Manager earned $2.8$4.2 million and $2.5$2.3 million, respectively, ofin base management fees (net of fees waived, if any) underfee income. No incentive fee income was earned in the sub-advisory agreement with HMS Adviser.three months ended June 30, 2021 and 2020. During the ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, the External Investment Manager earned $8.1 million and $7.1$4.8 million, respectively, ofin base management fees (net of fees waived, if any) under the sub-advisory agreement with HMS Adviser.
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
The investmentfee income. No incentive fee income was earned in the External Investment Manager is accounted for using fair value accounting, with the fair value determined by Main Streetsix months ended June 30, 2021 and approved, in good faith, by Main Street's Board of Directors. 2020.
Main Street determines the fair value of the External Investment Manager using the Waterfall valuation method under the market approach (see further discussion in Note B.1.). Any change in fair value of the investment in the External Investment Manager is recognized on Main Street'sStreet’s consolidated statements of operations in "Net Change in“Net Unrealized Appreciation (Depreciation)—PortfolioControl investments."”
The External Investment Manager is an indirect wholly owned subsidiary of MSCC owned through a Taxable Subsidiary and is a disregarded entity for tax purposes. The External Investment Manager has entered into a tax sharing agreement with its Taxable Subsidiary owner. Since the External Investment Manager is accounted for as a portfolio investment of MSCC and is not included as a consolidated subsidiary of MSCC in MSCC'sMSCC’s consolidated financial statements, and as a result of the tax sharing agreement with its Taxable Subsidiary owner, for financial reporting purposes the External Investment Manager is treated as if it is taxed at normal corporate tax rates based on its taxable income and, as a result of its activities, may generate income tax expense or benefit. Main Street owns the External Investment Manager through the Taxable Subsidiary to allow MSCC to continue to comply with the "source-income"“source-of-income” requirements contained in the RIC tax provisions of the Code. The taxable income, or loss, of the External Investment
73
Manager may differ from its book income, or loss, due to temporary book and tax timing differences and permanent differences. As a result of the above described financial reporting and tax treatment, the External Investment Manager provides for any income tax expense, or benefit, and any tax assets or liabilities in its separate financial statements.
Main Street shares employees with the External Investment Manager and allocates costs related to such shared employees to the External Investment Manager generally based on a combination of the direct time spent, new investment origination activity and assets under management, depending on the nature of the expense. For the three months ended SeptemberJune 30, 20172021 and 2016,2020, Main Street allocated $1.7$2.6 million and $1.2$1.8 million of total expenses, respectively, to the External Investment Manager. For the ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, Main Street allocated $4.8$5.0 million and $3.7$3.4 million of total expenses, respectively, to the External Investment Manager. The total contribution of the External Investment Manager to Main Street'sStreet’s net investment income consists of the combination of the expenses allocated to the External Investment Manager and the dividend income receivedearned from the External Investment Manager. For the three months ended SeptemberJune 30, 20172021 and 2016,2020, the total contribution to Main Street'sStreet’s net investment income was $2.4$3.8 million and $2.0$2.2 million, respectively. For the ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, the total contribution to Main Street'sStreet’s net investment income was $6.9$7.4 million and $5.8$4.5 million, respectively.
Summarized financial information from the separate financial statements of the External Investment Manager as of
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
September June 30, 20172021 and December 31, 20162020 and for the three and ninesix months ended SeptemberJune 30, 2017 and 20162021and 2020 is as follows:
| | | | | | |
| | As of | | As of | ||
| | June 30, | | December 31, | ||
|
| 2021 |
| 2020 | ||
| | (dollars in thousands) | ||||
Cash | | $ | — | | $ | — |
Accounts receivable—advisory clients | |
| 4,238 | |
| 3,520 |
Total assets | | $ | 4,238 | | $ | 3,520 |
Accounts payable to MSCC and its subsidiaries | | $ | 2,968 | | $ | 2,423 |
Dividend payable to MSCC and its subsidiaries | |
| 1,270 | |
| 1,097 |
Equity | |
| — | |
| — |
Total liabilities and equity | | $ | 4,238 | | $ | 3,520 |
| | | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | | ||||||||
| | June 30, | | June 30, | | ||||||||
|
| 2021 |
| 2020 |
| 2021 |
| 2020 |
| ||||
| | (dollars in thousands) | | ||||||||||
Management fee income | | $ | 4,212 | | $ | 2,323 | | $ | 8,115 | | $ | 4,822 | |
Incentive fees | |
| — | |
| — | |
| — | |
| — | |
Total revenues | |
| 4,212 | |
| 2,323 | |
| 8,115 | |
| 4,822 | |
Expenses allocated from MSCC or its subsidiaries: | | | | |
|
| | | | |
|
| |
Salaries, share‑based compensation and other personnel costs | | | (2,073) | | | (1,127) | | | (4,116) | | | (2,187) | |
Other G&A expenses | | | (499) | | | (677) | | | (836) | | | (1,261) | |
Total allocated expenses | |
| (2,572) | |
| (1,804) | |
| (4,952) | |
| (3,448) | |
Pre‑tax income | |
| 1,640 | |
| 519 | |
| 3,163 | |
| 1,374 | |
Tax expense | |
| (370) | |
| (123) | |
| (714) | |
| (318) | |
Net income | | $ | 1,270 | | $ | 396 | | $ | 2,449 | | $ | 1,056 | |
74
| | As of September 30, 2017 | As of December 31, 2016 | |||||
|---|---|---|---|---|---|---|---|
| | (dollars in thousands) | ||||||
Cash | $ | — | $ | — | |||
Accounts receivable—HMS Income | 2,842 | 2,496 | |||||
| | | | | | | | |
Total assets | $ | 2,842 | $ | 2,496 | |||
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Accounts payable to MSCC and its subsidiaries | $ | 2,007 | $ | 1,635 | |||
Dividend payable to MSCC and its subsidiaries | 712 | 719 | |||||
Taxes payable | 123 | 142 | |||||
Equity | — | — | |||||
| | | | | | | | |
Total liabilities and equity | $ | 2,842 | $ | 2,496 | |||
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | 2017 | 2016 | 2017 | 2016 | |||||||||
| | | | (dollars in thousands) | ||||||||||
Management fee income | $ | 2,789 | $ | 2,471 | $ | 8,083 | $ | 7,058 | |||||
Expenses allocated from MSCC or its subsidiaries: Salaries, share-based compensation and other personnel costs | (1,033 | ) | (833 | ) | (2,978 | ) | (2,522 | ) | |||||
Other G&A expenses | (631 | ) | (391 | ) | (1,838 | ) | (1,217 | ) | |||||
| | | | | | | | | | | | | | |
Total allocated expenses | (1,664 | ) | (1,224 | ) | (4,816 | ) | (3,739 | ) | |||||
| | | | | | | | | | | | | | |
Pre-tax income | 1,125 | 1,247 | 3,267 | 3,319 | |||||||||
Tax expense | (413 | ) | (454 | ) | (1,135 | ) | (1,210 | ) | |||||
| | | | | | | | | | | | | | |
Net income | $ | 712 | $ | 793 | $ | 2,132 | $ | 2,109 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
NOTE E—DEBT
Summary of debt as of June 30, 2021 is as follows:
| | | | | | | | | | | | |
|
| Outstanding Balance |
| Unamortized Debt Issuance (Costs)/Premiums |
| Recorded Value |
| Estimated Fair Value (1) | ||||
| | (in thousands) | ||||||||||
SBIC Debentures | | $ | 322,000 | | $ | (7,172) | | $ | 314,828 | | $ | 315,059 |
Credit Facility | | | 169,000 | | | — | | | 169,000 | | | 169,000 |
4.50% Notes due in 2022 | | | 185,000 | | | (860) | | | 184,140 | | | 193,140 |
5.20% Notes due 2024 | | | 450,000 | | | 1,544 | | | 451,544 | | | 489,780 |
3.00% Notes due 2026 | | | 300,000 | | | (4,770) | | | 295,230 | | | 307,950 |
Total Debt | | $ | 1,426,000 | | $ | (11,258) | | $ | 1,414,742 | | $ | 1,474,929 |
| (1) | Estimated fair value for outstanding debt if Main Street had adopted the fair value option under ASC 825. See discussion of the methods used to estimate the fair value of Main Street’s debt in Note B.11. – Fair Value of Financial Instruments. |
Summary of debt as of December 31, 2020 is as follows:
| | | | | | | | | | | | |
|
| Outstanding Balance |
| Unamortized Debt Issuance (Costs)/Premiums |
| Recorded Value |
| Estimated Fair Value (1) | ||||
| | (in thousands) | ||||||||||
SBIC Debentures | | $ | 309,800 | | $ | (5,828) | | $ | 303,972 | | $ | 309,907 |
Credit Facility | | | 269,000 | | | — | | | 269,000 | | | 269,000 |
4.50% Notes due 2022 | | | 185,000 | | | (1,164) | | | 183,836 | | | 194,938 |
5.20% Notes due 2024 | | | 450,000 | | | 1,817 | | | 451,817 | | | 488,102 |
Total Debt | | $ | 1,213,800 | | $ | (5,175) | | $ | 1,208,625 | | $ | 1,261,947 |
| (1) | Estimated fair value for outstanding debt if Main Street had adopted the fair value option under ASC 825. See discussion of the methods used to estimate the fair value of Main Street’s debt in Note B.11. – Fair Value of Financial Instruments. |
Summarized interest expense for the three and six months ended June 30, 2021 and 2020 is as follows (in thousands):
| | | | | | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended June 30, | ||||||||
|
| 2021 |
| 2020 |
| 2021 |
| 2020 | ||||
SBIC Debentures | | $ | 2,557 | | $ | 2,986 | | $ | 5,298 | | $ | 6,004 |
Credit Facility | | | 1,408 | | | 2,424 | | | 2,374 | | | 5,363 |
4.50% Notes Due 2022 | | | 2,233 | | | 2,233 | | | 4,466 | | | 4,466 |
5.20% Notes Due 2024 | | | 5,713 | | | 4,255 | | | 11,430 | | | 8,505 |
3.00% Notes due in 2026 | | | 2,489 | | | — | | | 4,638 | | | — |
Total Interest Expense | | $ | 14,400 | | $ | 11,898 | | $ | 28,206 | | $ | 24,338 |
SBIC DEBENTURESDebentures
Due to each of the Funds' status as a licensedUnder existing SBIC Main Street hasregulations, SBA-approved SBICs under common control have the ability to issue through the Funds, debentures guaranteed by the SBA up to a regulatory maximum amount of $350.0 million through its three existing SBIC licenses.million. Main Street’s SBIC debentures payable, under existing SBA-approved commitments, were $274.8$322.0 million and $240.0$309.8 million at SeptemberJune 30, 2017
75
2021 and December 31, 2016,2020, respectively. SBIC debentures provide for interest to be paid semiannually, with principal due at the applicable 10-year maturity date of each debenture. During the ninesix months ended SeptemberJune 30, 2017,2021, Main Street issued $60.0$52.2 million of SBIC debentures and opportunistically prepaid $25.2$40.0 million of existing SBIC debentures that were scheduled to mature over the next year as part of an effort to manage the maturity dates of the oldest SBIC debentures, leaving $75.2 million of additional capacity under Main Street's SBIC licenses as of September 30, 2017. As a result of this prepayment, Main Street recognized a realized loss of $5.2 million due to the previously recognized gain recorded as a result of recording the MSC II debentures at fair value on the date of the acquisition of MSC II. The effect of the realized loss is offset by the reversal of all previously recognized unrealized depreciation due to fair
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
value adjustments since the date of the acquisition.debentures. Main Street expects to issue new SBIC debentures under the SBIC program in the future in an amount up to the regulatory maximum amount of $350.0 million for affiliated SBIC funds. The weighted-average annual interest rate on the SBIC debentures was 3.8%2.9% and 4.1%3.4% as of SeptemberJune 30, 20172021 and December 31, 2016,2020, respectively. The first principal maturity due under the existing SBIC debentures is in 20192023, and the weighted-average remaining duration as of SeptemberJune 30, 20172021 was approximately 5.86.3 years. For the three months ended September 30, 2017 and 2016, Main Street recognized interest expense attributable to the SBIC debentures of $2.7 million and $2.5 million, respectively. For the nine months ended September 30, 2017 and 2016, Main Street recognized interest expense attributable to the SBIC debentures of $7.7 million and $7.5 million, respectively. Main Street has incurred upfront leverage and other miscellaneous fees of approximately 3.4% of the debenture principal amount. In accordance with SBASBIC regulations, the Funds are precluded from incurring additional non-SBIC debt without the prior approval of the SBA.
As of SeptemberJune 30, 2017, the recorded value of2021, the SBIC debentures was $269.3 million which consisted of (i) $49.4 million recorded at fair value or $0.6 million less than the $50.0 million par value of the SBIC debentures issued in MSC II, (ii) $149.8$147.0 million par value of SBIC debentures outstanding held inissued by MSMF, with a recorded value of $147.4$143.8 million that was net of unamortized debt issuance costs of $2.4$3.2 million and (iii) $75.0(ii) $175.0 million par value of SBIC debentures outstanding held inissued by MSC III with a recorded value of $72.6$171.0 million that was net of unamortized debt issuance costs of $2.4$4.0 million. As of September 30, 2017, if Main Street had adopted the fair value option under ASC 825 for all of its SBIC debentures, Main Street estimates the fair value of its SBIC debentures would be approximately $256.0 million or $18.8 million less than the $274.8 million par value of the SBIC debentures.
NOTE F—CREDIT FACILITYCredit Facility
Main Street maintains the Credit Facility to provide additional liquidity to support its investment and operational activities. TheAs of June 30, 2021, the Credit Facility was amended in September 2017 to increaseincluded total commitments to $585.0of $855.0 million from a diversified group of fifteen lenders. The Credit Facility matures18 lenders, held a maturity date in September 2021April 2026 and containscontained an accordion feature which allowsallowed Main Street to increase the total commitments under the facility to up to $750.0$1,200.0 million from new and existing lenders on the same terms and conditions as the existing commitments.
BorrowingsAs of June 30, 2021, borrowings under the Credit Facility bearbore interest, subject to Main Street'sStreet’s election and resetting on a monthly basis on the first of each month, on a per annum basis at a rate equal to the applicable LIBOR rate (1.23%(0.1% as of Septemberthe most recent reset date for the period ended June 30, 2017)2021) plus (i) 1.875% (or the applicable base rate (Prime Rate of 4.25%3.25% as of SeptemberJune 30, 2017)2021) plus 0.875%) as long as Main Street maintains an investment grade rating and meets certain agreed upon excess collateral and maximum leverage requirements or (ii) 2.0% (or the applicable base rate plus 1.0%) if Main Street maintains an investment grade rating but does not meet certain excess collateral and maximum leverage requirements or (iii) 2.25% (or the applicable base rate plus 1.25%) if Main Street does not maintain an investment grade rating.otherwise. Main Street pays unused commitment fees of 0.25% per annum on the unused lender commitments under the Credit Facility. The Credit Facility is secured by a first lien on the assets of MSCC and its subsidiaries, excluding the equity ownership or assets of the Funds and the External Investment Manager. TheAs of June 30, 2021, the Credit Facility containscontained certain affirmative and negative covenants, including but not limited to: (i) maintaining a minimum availability of at least 10% of the borrowing base,liquidity, (ii) maintaining an interest coverage ratio of at least 2.0 to 1.0, (iii) maintaining an asset coverage ratio (tangible net worth to Credit Facility borrowings) of at least 1.5 to 1.0, and (iv) maintaining a minimum tangible net worth. The Credit Facility is providedworth and (v) maintaining a minimum asset coverage ratio of 200% with respect to the consolidated assets (with certain limitations on a revolving basis through its final maturity datethe contribution of equity in September 2021,financing subsidiaries as specified therein) of MSCC and
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
contains two, one-year extension options which could extend the final maturity by up to two years, subject to certain conditions, including lender approval.
At September 30, 2017, Main Street had $355.0 million in borrowings outstandingguarantors under the Credit Facility. Facility to the secured debt of MSCC and the guarantors.
As of SeptemberJune 30, 2017, if Main Street had adopted the fair value option under ASC 825 for its Credit Facility, Main Street estimates its fair value would approximate its recorded value. Main Street recognized interest expense related to the Credit Facility, including unused commitment fees and amortization of deferred issuance costs, of $3.1 million and $2.5 million for the three months ended September 30, 2017 and 2016, respectively, and $8.3 million and $6.7 million for the nine month periods ended September 30, 2017 and 2016, respectively. As of September 30, 2017,2021, the interest rate on the Credit Facility was 3.1%2.0% (based on the LIBOR rate of 0.1% as of the most recent reset date plus 1.875%). The average interest rate for borrowings under the Credit Facility was 3.1%2.0% and 2.9%2.4% for the three and nine months ended SeptemberJune 30, 2017.2021 and 2020, respectively, and 2.0% and 3.0% for the six months ended June 30, 2021 and 2020, respectively. As of SeptemberJune 30, 2017,2021, Main Street was in compliance with all financial covenants of the Credit Facility.
NOTE G—NOTES
6.125%4.50% Notes due 2022
In April 2013,November 2017, Main Street issued $92.0$185.0 million including the underwriters full exercise of their option to purchase additional principal amounts to cover over-allotments, in aggregate principal amount of 6.125%4.50% unsecured notes due December 1, 2022 (the “4.50% Notes due 2023 (the "6.125% Notes"2022”) at an issue price of 99.16%. The 6.125%4.50% Notes due 2022 are unsecured obligations and rank pari passu with Main Street'sStreet’s current and future unsecured indebtedness; senior to any of its future indebtedness that expressly provides it is subordinated to the 6.125%4.50% Notes due 2022; effectively subordinated to all of its existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness, including borrowings under its Credit Facility; and structurally subordinated to all existing and future indebtedness and other obligations of any of its subsidiaries, including without limitation, the indebtedness of the Funds. The 4.50%
76
Notes due 2022 may be redeemed in whole or in part at any time at Main Street’s option subject to certain make-whole provisions. The 4.50% Notes due 2022 bear interest at a rate of 4.50% per year payable semiannually on June 1 and December 1 of each year. The total net proceeds from the 4.50% Notes due 2022, resulting from the issue price and after underwriting discounts and estimated offering expenses payable, were approximately $182.2 million. Main Street may from time to time repurchase the 4.50% Notes due 2022 in accordance with the 1940 Act and the rules promulgated thereunder.
The indenture governing the 4.50% Notes due 2022 (the “4.50% Notes Indenture”) contains certain covenants, including covenants requiring Main Street’s compliance with (regardless of whether Main Street is subject to) the asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a)(1) of the 1940 Act, as well as covenants requiring Main Street to provide financial information to the holders of the 4.50% Notes due 2022 and the trustee if Main Street ceases to be subject to the reporting requirements of the Exchange Act. These covenants are subject to limitations and exceptions that are described in the 4.50% Notes Indenture. As of June 30, 2021, Main Street was in compliance with these covenants.
5.20% Notes due 2024
In April 2019, Main Street issued $250.0 million in aggregate principal amount of 5.20% unsecured notes due May 1, 2024 (the “5.20% Notes”) at an issue price of 99.125%. Subsequently, in December 2019, Main Street issued an additional $75.0 million aggregate principal amount of the 5.20% Notes at an issue price of 105.0% and, in July 2020, Main Street issued an additional $125.0 million aggregate principal amount at an issue price of 102.674%. The 5.20% Notes issued in December 2019 and July 2020 have identical terms as, and are a part of a single series with, the 5.20% Notes issued in April 2019. The 5.20% Notes are unsecured obligations and rank pari passu with Main Street’s current and future unsecured indebtedness; senior to any of its future indebtedness that expressly provides it is subordinated to the 5.20% Notes; effectively subordinated to all of its existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness, including borrowings under its Credit Facility; and structurally subordinated to all existing and future indebtedness and other obligations of any of its subsidiaries, including without limitation, the indebtedness of the Funds. The 6.125%5.20% Notes mature on April 1, 2023, and may be redeemed in whole or in part at any time or from time to time at Main Street'sStreet’s option on or after April 1, 2018.subject to certain make-whole provisions. The 6.125%5.20% Notes bear interest at a rate of 6.125%5.20% per year payable quarterlysemiannually on January 1, April 1, JulyMay 1 and OctoberNovember 1 of each year. The total net proceeds to Main Street from the 6.125%5.20% Notes, resulting from the issue price and after underwriting discountsnet issue price premiums and estimated offering expenses payable, by Main Street, were approximately $89.0$451.4 million. Main Street has listed the 6.125% Notes on the New York Stock Exchange under the trading symbol "MSCA." Main Street may from time to time repurchase the 6.125%5.20% Notes in accordance with the 1940 Act and the rules promulgated thereunder. As of September 30, 2017, the outstanding balance of the 6.125% Notes was $90.7 million and the recorded value of $89.0 million was net of unamortized debt issuance costs of $1.7 million. As of September 30, 2017, if Main Street had adopted the fair value option under ASC 825 for the 6.125% Notes, Main Street estimates the fair value would be approximately $93.9 million. Main Street recognized interest expense related to the 6.125% Notes, including amortization of deferred issuance costs, of $1.5 million for each of the three months ended September 30, 2017 and 2016, and $4.4 million for each of the nine months ended September 30, 2017 and 2016.
The indenture governing the 6.125%5.20% Notes (the "6.125%“5.20% Notes Indenture"Indenture”) contains certain covenants, including covenants requiring Main Street'sStreet’s compliance with (regardless of whether Main Street is subject to) the asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a)(1) of the 1940 Act, as well as covenants requiring Main Street to provide financial information to the holders of the 6.125%5.20% Notes and the Trusteetrustee if Main Street ceases to be subject to the reporting requirements of the Securities Exchange Act of 1934.Act. These covenants are subject to
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
limitations and exceptions that are described in the 6.125%5.20% Notes Indenture. As of SeptemberJune 30, 2017,2021, Main Street was in compliance with these covenants.
4.50%
3.00% Notes due 2026
In November 2014,January 2021, Main Street issued $175.0$300.0 million in aggregate principal amount of 4.50%3.00% unsecured notes due 2019July 14, 2026 (the "4.50% Notes"“3.00% Notes”) at an issue price of 99.53%99.004%. The 4.50%total net proceeds from the 3.00% Notes, resulting from the issue price and after underwriting discounts and estimated offering expenses payable, were approximately $294.8 million. The 3.00% Notes are unsecured obligations and rank pari passu with Main Street'sStreet’s current and future unsecured indebtedness; senior to any of its future indebtedness that expressly provides it is subordinated to the 4.50%3.00% Notes; effectively subordinated to all of its existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness, including borrowings under its Credit Facility; and structurally subordinated to all existing and future indebtedness and other obligations of any of its subsidiaries, including without limitation, the indebtedness of the Funds. The 4.50%3.00% Notes mature on December 1, 2019, and may be redeemed in whole or in part at any time at Main Street'sStreet’s option subject to certain make-whole provisions. The 4.50%3.00% Notes bear interest at a rate of 4.50%3.00% per year payable semiannually on June 1January 14 and December 1July 14 of each year. The total net proceeds from the 4.50% Notes, resulting from the issue price and after underwriting discounts and estimated offering expenses payable by us, were approximately $171.2 million. Main Street may from time to time repurchase the 4.50%3.00% Notes in accordance with the 1940 Act and the rules promulgated thereunder. As
77
The indenture governing the 4.50%3.00% Notes (the "4.50%“3.00% Notes Indenture"Indenture”) contains certain covenants, including covenants requiring Main Street'sStreet’s compliance with (regardless of whether Main Street is subject to) the asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a)(1) of the 1940 Act, as well as covenants requiring Main Street to provide financial information to the holders of the 4.50%3.00% Notes and the Trusteetrustee if Main Street ceases to be subject to the reporting requirements of the Securities Exchange Act of 1934.Act. These covenants are subject to limitations and exceptions that are described in the 4.50%3.00% Notes Indenture. As of SeptemberJune 30, 2017,2021, Main Street was in compliance with these covenants.
NOTE F—FINANCIAL HIGHLIGHTS
| | | | | | | |
|
| Six Months Ended June 30, |
| ||||
Per Share Data: |
| 2021 |
| 2020 |
| ||
NAV at the beginning of the period | | $ | 22.35 | | $ | 23.91 | |
Net investment income(1) | |
| 1.20 | |
| 1.04 | |
Net realized gain (loss) (1)(2) | |
| 0.03 | |
| (0.48) | |
Net unrealized appreciation (depreciation)(1)(2) | |
| 1.15 | |
| (2.78) | |
Income tax benefit (provision)(1)(2) | |
| (0.15) | |
| 0.25 | |
Net increase (decrease) in net assets resulting from operations(1) | |
| 2.23 | |
| (1.97) | |
Dividends paid | |
| (1.23) | |
| (1.23) | |
Accretive effect of stock offerings (issuing shares above NAV per share) | |
| 0.07 | |
| 0.17 | |
Accretive effect of DRIP issuance (issuing shares above NAV per share) | |
| 0.04 | |
| 0.05 | |
Other(3) | |
| (0.04) | |
| (0.08) | |
NAV at the end of the period | | $ | 23.42 | | $ | 20.85 | |
Market value at the end of the period | | $ | 41.09 | | $ | 20.51 | |
Shares outstanding at the end of the period | |
| 68,531,789 | |
| 65,763,805 | |
| (1) | Based on weighted-average number of common shares outstanding for the period. |
| (2) | Net realized gains or losses, net unrealized appreciation or depreciation, and income taxes can fluctuate significantly from period to period. |
| (3) | Includes the impact of the different share amounts as a result of calculating certain per share data based on the weighted-average basic shares outstanding during the period and certain per share data based on the shares outstanding as of a period end or transaction date. |
| | | | | | | |
| Six Months Ended June 30, | ||||||
| 2021 |
| 2020 | ||||
| (dollars in thousands) | ||||||
NAV at end of period | $ | 1,604,841 | | | $ | 1,370,944 | |
Average NAV | $ | 1,553,257 | | | $ | 1,414,501 | |
Average outstanding debt | $ | 1,311,114 | | | $ | 1,119,229 | |
Ratio of total expenses, including income tax expense, to average NAV (1) (2) | | 3.76 | % | | | 3.96 | % |
Ratio of operating expenses to average NAV (2) (3) | | 3.09 | % | | | 2.85 | % |
Ratio of operating expenses, excluding interest expense, to average NAV (2) (3) | | 1.27 | % | | | 1.13 | % |
Ratio of net investment income to average NAV (2) | | 5.29 | % | | | 4.80 | % |
Portfolio turnover ratio (2) | | 11.86 | % | | | 9.44 | % |
Total investment return (2) (4) | | 31.59 | % | | | (24.97) | % |
Total return based on change in NAV (2) (5) | | 10.06 | % | | | (8.34) | % |
| (1) | Total expenses are the sum of operating expenses and net income tax provision/benefit. Net income tax provision/benefit includes the accrual of net deferred tax provision/benefit relating to the net unrealized appreciation/depreciation on portfolio investments held in Taxable Subsidiaries and due to the change in the loss carryforwards, which are non-cash in nature and may vary significantly from period to period. Main Street is required to include net deferred tax provision/benefit in calculating its total expenses even though these net deferred taxes are not currently payable/receivable. |
| (2) | Not annualized. |
78
| (3) | Unless otherwise noted, operating expenses include interest, compensation, general and administrative and share-based compensation expenses, net of expenses allocated to the External Investment Manager. |
| (4) | Total investment return is based on the purchase of stock at the current market price on the first day and a sale at the current market price on the last day of each period reported on the table and assumes reinvestment of dividends at prices obtained by Main Street’s dividend reinvestment plan during the period. The return does not reflect any sales load that may be paid by an investor. |
| (5) | Total return is based on change in net asset value as calculated using the sum of ending net asset value plus dividends to stockholders and other non-operating changes during the period, as divided by the beginning net asset value. Non-operating changes include any items that affect net asset value other than the net increase in net assets resulting from operations, such as the effects of stock offerings, shares issued under the DRIP and equity incentive plans and other miscellaneous items. |
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
NOTE H—FINANCIAL HIGHLIGHTS
| | Nine Months Ended September 30, | ||||||
|---|---|---|---|---|---|---|---|
| | 2017 | 2016 | |||||
Per Share Data: | |||||||
NAV at the beginning of the period | $ | 22.10 | $ | 21.24 | |||
Net investment income(1) | 1.74 | 1.66 | |||||
Net realized gain(1)(2) | 0.40 | 0.65 | |||||
Net change in net unrealized appreciation (depreciation)(1)(2) | 0.02 | (0.56 | ) | ||||
Income tax benefit (provision)(1)(2) | (0.22 | ) | 0.01 | ||||
| | | | | | | | |
Net increase in net assets resulting from operations(1) | 1.94 | 1.76 | |||||
Dividends paid from net investment income | (1.46 | ) | (1.06 | ) | |||
Distributions from capital gains | (0.48 | ) | (0.84 | ) | |||
| | | | | | | | |
Total dividends paid | (1.94 | ) | (1.90 | ) | |||
Impact of the net change in monthly dividends declared prior to the end of the period and paid in the subsequent period | (0.01 | ) | (0.01 | ) | |||
Accretive effect of stock offerings (issuing shares above NAV per share) | 0.84 | 0.42 | |||||
Accretive effect of DRIP issuance (issuing shares above NAV per share) | 0.04 | 0.06 | |||||
Other(3) | 0.05 | 0.05 | |||||
| | | | | | | | |
NAV at the end of the period | $ | 23.02 | $ | 21.62 | |||
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Market value at the end of the period | $ | 39.75 | $ | 34.33 | |||
Shares outstanding at the end of the period | 57,756,193 | 52,931,917 | |||||
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
| | Nine Months Ended September 30, | ||||||
|---|---|---|---|---|---|---|---|
| | 2017 | 2016 | |||||
| | (dollars in thousands) | ||||||
NAV at end of period | $ | 1,329,666 | $ | 1,144,350 | |||
Average NAV | $ | 1,264,457 | $ | 1,097,839 | |||
Average outstanding debt | $ | 846,255 | $ | 792,966 | |||
Ratio of total expenses, including income tax expense, to average NAV(1)(2) | 5.10% | 4.11% | |||||
Ratio of operating expenses to average NAV(2)(3) | 4.12% | 4.20% | |||||
Ratio of operating expenses, excluding interest expense, to average NAV(2)(3) | 2.00% | 1.92% | |||||
Ratio of net investment income to average NAV(2) | 7.74% | 7.78% | |||||
Portfolio turnover ratio(2) | 28.31% | 18.11% | |||||
Total investment return(2)(4) | 13.68% | 25.35% | |||||
Total return based on change in NAV(2)(5) | 9.09% | 8.49% | |||||
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
NOTE I—G—DIVIDENDS, DISTRIBUTIONS AND TAXABLE INCOME
Main Street currently pays monthly dividends to its stockholders. Future monthly dividends, if any, will be determined by its Board of Directors on a quarterly basis. Main Street paid regular monthly dividends of $0.185$0.205 per share, for each month of January through September 2017, totaling $31.5$42.0 million, or $0.555$0.615 per share, for the three months ended SeptemberJune 30, 2017,2021, and $92.9$83.9 million, or $1.665$1.230 per share, for the ninesix months ended SeptemberJune 30, 2017. The third quarter 20172021 compared to aggregate regular monthly dividends represent a 2.8% increase from the regular monthly dividends paid for the third quarter of 2016. Additionally, Main Street paid a $0.275 per share semi-annual supplemental dividend, totaling $15.6 million, in June 2017 compared to $14.2approximately $39.9 million, or $0.275 per share, paid in June 2016. The regular monthly dividends equaled a total of approximately $28.3 million, or $0.540$0.615 per share, for the three months ended SeptemberJune 30, 2016,2020, and $83.1$79.6 million or $1.620 per share,$1.230 for the ninesix months ended SeptemberJune 30, 2016.2020.
MSCC has elected to be treated for U.S. federal income tax purposes as a RIC. MSCC'sMSCC’s taxable income includes the taxable income generated by MSCC and certain of its subsidiaries, including the Funds, which are treated as disregarded entities for tax purposes. As a RIC, MSCC generally will not pay corporate-level U.S. federal income taxes on any net ordinary taxable income or capital gains that MSCC distributes to its stockholders. MSCC must generally distribute at least 90% of its "investment“investment company taxable income"income” (which is generally its net ordinary taxable income and realized net short-term capital gains in excess of realized net long-term capital losses) and 90% of its tax-exempt income to maintain its RIC status (pass-through tax treatment for amounts distributed). As part of maintaining RIC status, undistributed taxable income (subject to a 4% non-deductible U.S. federal excise tax) pertaining to a given fiscal year may be distributed up to 12 months subsequent to the end of that fiscal year, provided such dividends are declared on or prior to the later of (i) filing of the U.S. federal income tax return for the applicable fiscal year or (ii) the fifteenth day of the ninth month following the close of the year in which such taxable income was generated.
The determination of the tax attributes for Main Street'sStreet’s distributions is made annually, based upon its taxable income for the full year and distributions paid for the full year. Therefore, a determination made on an interim basis may not be representative of the actual tax attributes of distributions for a full year. Ordinary dividend distributions from a RIC do not qualify for the 20% maximum tax rate (plus a 3.8% Medicare surtax, if applicable) on dividend income from domestic corporations and qualified foreign corporations, except to the extent that the RIC received the income in the form of qualifying dividends from domestic corporations and qualified foreign corporations. The tax attributes for distributions will generally include both ordinary income and capital gains,qualified dividends, but may also include qualified dividendseither one or both of capital gains and return of capital.
79
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
Listed below is a reconciliation of "Net“Net increase (decrease) in net assets resulting from operations"operations” to taxable income and to total distributions declared to common stockholders for the ninesix months ended SeptemberJune 30, 20172021 and 2016.2020.
| | | | | | |
| | Six Months Ended June 30, | ||||
|
| 2021 |
| 2020 | ||
| | (estimated, dollars in thousands) | ||||
Net increase (decrease) in net assets resulting from operations | | $ | 152,451 | | $ | (128,068) |
Book-tax difference from share-based compensation expense | | | (6,967) | | | 322 |
Net unrealized (appreciation) depreciation | | | (78,440) | | | 180,684 |
Income tax provision (benefit) | | | 10,407 | | | (15,760) |
Pre-tax book (income) loss not consolidated for tax purposes | | | (17,971) | | | (952) |
Book income and tax income differences, including debt origination, structuring fees, dividends, realized gains and changes in estimates | | | 7,780 | | | 36,651 |
Estimated taxable income (1) | | | 67,260 | | | 72,877 |
Taxable income earned in prior year and carried forward for distribution in current year | | | 24,350 | | | 29,107 |
Taxable income earned prior to period end and carried forward for distribution next period | | | (21,626) | | | (35,573) |
Dividend payable as of period end and paid in the following period | | | 14,049 | | | 13,474 |
Total distributions accrued or paid to common stockholders | | $ | 84,033 | | $ | 79,885 |
| | Nine Months Ended September 30, | ||||||
|---|---|---|---|---|---|---|---|
| | 2017 | 2016 | |||||
| | (estimated, dollars in thousands) | ||||||
Net increase in net assets resulting from operations | $ | 109,180 | $ | 90,907 | |||
Book tax difference from share-based compensation expense | (3,352 | ) | (708 | ) | |||
Net change in net unrealized (appreciation) depreciation | (1,050 | ) | 28,829 | ||||
Income tax provision (benefit) | 12,383 | (1,018 | ) | ||||
Pre-tax book loss not consolidated for tax purposes | 1,386 | 16,771 | |||||
Book income and tax income differences, including debt origination, structuring fees, dividends, realized gains (losses) and changes in estimates | 2,711 | (4,141 | ) | ||||
| | | | | | | | |
Estimated taxable income(1) | 121,258 | 130,640 | |||||
Taxable income earned in prior year and carried forward for distribution in current year | 42,362 | 29,683 | |||||
Taxable income earned prior to period end and carried forward for distribution next period | (65,233 | ) | (72,094 | ) | |||
Dividend payable as of period end and paid in the following period | 10,934 | 9,783 | |||||
| | | | | | | | |
Total distributions accrued or paid to common stockholders | $ | 109,321 | $ | 98,012 | |||
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| (1) | Main Street’s taxable income for each period is an estimate and will not be finally determined until the company files its tax return for each year. Therefore, the final taxable income, and the taxable income earned in each period and carried forward for distribution in the following period, may be different than this estimate. |
The Taxable Subsidiaries primarily hold certain portfolio investments for Main Street. The Taxable Subsidiaries permit Main Street to hold equity investments in portfolio companies which are "pass-through"“pass-through” entities for tax purposes and to continue to comply with the "source-income"“source-of-income” requirements contained in the RIC tax provisions of the Code. The Taxable Subsidiaries are consolidated with Main Street for U.S. GAAP financial reporting purposes, and the portfolio investments held by the Taxable Subsidiaries are included in Main Street'sStreet’s consolidated financial statements as portfolio investments and recorded at fair value. The Taxable Subsidiaries are not consolidated with MSCC for income tax purposes and may generate income tax expense, or benefit, and tax assets and liabilities, as a result of their ownership of certain portfolio investments. The taxable income, or loss, of the Taxable Subsidiaries may differ from itstheir book income, or loss, due to temporary book and tax timing differences and permanent differences. The Taxable Subsidiaries are each taxed at their normal corporate tax rates based on their taxable income. The income tax expense, or benefit, if any, and the related tax assets and liabilities, of the Taxable Subsidiaries are reflected in Main Street'sStreet’s consolidated financial statements.
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
The income tax expense or benefit, and the related tax assets and liabilities generated by the Taxable Subsidiaries, if any, are reflected in Main Street's consolidated financial statements. For the three months ended September 30, 2017,(benefit) for Main Street recognized a net income tax provisionis generally composed of $4.6 million, principally consisting of a(i) deferred tax provision of $3.8 million,expense (benefit), which is primarily the result of the net activity relating to the portfolio investments held in the Taxable Subsidiaries, including changes in the loss carryforwards, changes in net unrealized appreciation or depreciation and other temporary book-tax differences, and a $0.8 million current tax expense, which is primarily related to a $0.5 million accrual for excise tax on Main Street's estimated undistributed taxable income and $0.3 million provision for current U.S. federal income and state taxes. For the nine months ended September 30, 2017, Main Street recognized a net income tax provision of $12.4 million, principally consisting of a deferred tax provision of $9.9 million, which is primarily the result of the net activity relating to the portfolio investments held in the Taxable Subsidiaries, including changes in the loss carryforwards, changes in net unrealized appreciation or depreciation and other temporary book-tax differences, and $2.5 million current tax expense, which is primarily related to a $1.6 million accrual for excise tax on Main Street's estimated undistributed taxable income and $0.9 million provision for current U.S. federal income and state taxes. For the three months ended September 30, 2016, Main Street recognized a net income tax benefit of $0.5 million, principally consisting of a deferred tax benefit of $1.4 million, which is primarily the result of the net activity relating to the portfolio investments held in the Taxable Subsidiaries, including changes in the loss carryforwards, changes in net unrealized appreciation or depreciation and other temporary book tax differences, partially offset by a $0.9 million and (ii) current tax expense, which is primarily related to a $1.0 million accrual forthe result of current U.S. federal income and state taxes and excise taxtaxes on Main Street'sStreet’s estimated undistributed taxable income. For the nine months ended September 30, 2016, Main Street recognized a netThe income tax expense, or benefit, of $1.0 million, principally consisting of a deferredand the related tax benefit of $3.4 million, which is primarily the result of the net activity relating to the portfolio investments held inasset and liabilities generated by the Taxable Subsidiaries, including changesif any, are reflected in Main Street’s consolidated statement of operations. Main Street’s provision for income taxes was comprised of the loss carryforwards,following for the three and six months ended June 30, 2021 and 2020 (amounts in thousands):
80
| | | | | | | | | | | |
| | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, | ||||||||
| 2021 |
| 2020 |
| 2021 |
| 2020 | ||||
Current tax expense (benefit): | | | | | | | | | | | |
Federal | $ | 97 | | $ | 280 | | $ | 141 | | $ | 77 |
State | | 359 | | | 91 | | | 655 | | | (492) |
Excise | | 200 | | | 179 | | | 493 | | | 670 |
Total current tax expense (benefit) | | 656 | | | 550 | | | 1,289 | | | 255 |
Deferred tax expense (benefit): | | | | | | | | | | | |
Federal | | 7,101 | | | (7,433) | | | 7,295 | | | (14,851) |
State | | 1,969 | | | (612) | | | 1,823 | | | (1,164) |
Total deferred tax expense (benefit) | | 9,070 | | | (8,045) | | | 9,118 | | | (16,015) |
| | | | | | | | | | | |
Total income tax provision (benefit) | $ | 9,726 | | $ | (7,495) | | $ | 10,407 | | $ | (15,760) |
The net deferred tax liability at June 30, 2021 and December 31, 2020 was $11.7 million and $2.6 million, respectively, primarily related to changes in net unrealized appreciation or depreciation, and temporary book tax differences, partially offset by a $2.4 million current tax expense which is composed of a (i) $2.1 million accrual for excise tax on Main Street's estimated undistributed taxable income and (ii) $0.3 million of accruals for current U.S. federal income and state taxes.
The net deferred tax liability at September 30, 2017 was $1.2 million compared to a net deferred tax asset of $9.1 million at December 31, 2016, primarily related tochanges in loss carryforwards, timing differences in net unrealized appreciation or depreciation and other temporary book-tax differences relating to portfolio investments held by the Taxable Subsidiaries. In addition, during the three months ended March 31, 2016, Main Street recorded a one-time $1.8 million increase to deferred tax assets for previously unrecognized excess tax benefits associated with share-based compensation due to the early adoption of the accounting standard ASU 2016-09 (See further discussion in Note B.8.). For the nine months ended SeptemberAt June 30, 2017, the Taxable Subsidiaries utilized capital loss carryforwards totaling approximately $1.7 million. As of September 30, 2017, for U.S. federal income tax purposes, the Taxable Subsidiaries had a capital loss carryforward of $12.8 million which, if unused, will expire in taxable years 2020 and 2021. At September 30, 2017,2021, for U.S. federal income tax purposes, the Taxable Subsidiaries had a net operating loss carryforward from prior years which, if unused, will expire in various taxable years from 20292028 through 2037. Any net operating losses generated in 2018 and future periods are not subject to expiration and will carryforward indefinitely until utilized. The timing and manner in which Main Street will utilize any loss carryforwards in any year, or in total,generated before December 31, 2017 may be limited in the future under the provisions of the Code.
Table of Contents Additionally, the Taxable Subsidiaries have interest expense limitation carryforwards which have an indefinite carryforward.
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
NOTE J—H—COMMON STOCK
During November 2015, Main Street commencedmaintains a program with certain selling agents through which it can sell shares of its common stock by means of at-the-market offerings from time to time (the "ATM Program"“ATM Program”). During the ninesix months ended SeptemberJune 30, 2017,2021, Main Street sold 3,119,247341,522 shares of its common stock at a weighted-average price of $38.33$38.14 per share and raised $119.5$13.0 million of gross proceeds under the ATM Program. Net proceeds were $118.1$12.7 million after commissions to the selling agents on shares sold and offering costs. As of SeptemberJune 30, 2017, sales transactions representing 75,4042021, 5,371,850 shares had not settled and are not included in shares issued and outstanding on the face of the consolidated balance sheet, but are included in the weighted-average shares outstanding in the consolidated statement of operations and in the shares used to calculate net asset value per share. As of September 30, 2017, there were 2,737,081 sharesremained available for sale under the ATM Program.
During the year ended December 31, 2016,2020, Main Street sold 3,324,6462,645,778 shares of its common stock at a weighted-average price of $34.17$32.10 per share and raised $113.6$84.9 million of gross proceeds under the ATM Program. Net proceeds were $112.0$83.8 million after commissions to the selling agents on shares sold and offering costs. As of December 31, 2016, sales transactions representing 42,413 shares had not settled and were not included in shares issued and outstanding on the face of the consolidated balance sheet, but were included in the weighted-average shares outstanding in the consolidated statements of operations and in the shares used to calculate net asset value per share.
NOTE K—I—DIVIDEND REINVESTMENT PLAN ("DRIP")
The dividend reinvestment feature of Main Street's DRIPStreet’s dividend reinvestment and direct stock purchase plan (the “DRIP”) provides for the reinvestment of dividends on behalf of its stockholders, unless a stockholder has elected to receive dividends in cash. As a result, if Main Street declares a cash dividend, the company'sits stockholders who have not "opted out"“opted out” of the DRIP by the dividend record date will have their cash dividend automatically reinvested into additional shares of MSCC common stock. The share requirements of the DRIP may be satisfied through the issuance of shares of common stock or through open market purchases of common stock.stock by the DRIP plan administrator. Newly issued shares will be valued based upon the final closing price of MSCC'sMSCC’s common stock on the valuation date determined for each dividend by Main Street'sStreet’s Board of Directors. Shares purchased in the open market to satisfy the DRIP requirements will be valued based upon the average price of the applicable shares purchased, before any associated brokerage or other costs. Main Street'sStreet’s DRIP is administered by its transfer agent on behalf of Main Street'sStreet’s record holders and participating brokerage firms. Brokerage firms and other financial intermediaries may decide not to participate in Main Street'sStreet’s DRIP but may provide a similar dividend reinvestment plan for their clients.
For the nine months ended September 30, 2017, $6.1 million of the total $108.4 million in dividends paid to stockholders represented DRIP participation. During this period, the DRIP participation requirements were satisfied with the issuance of 158,301 newly issued shares. For the nine months ended September 30, 2016, $10.6 million of the total $97.3 million in dividends paid to stockholders represented DRIP participation. During this period, the DRIP participation requirements were satisfied with the issuance of 339,544 newly issued shares. The shares disclosed above relate only to Main Street's DRIP and exclude any activity related to broker-managed dividend reinvestment plans.81
Summarized DRIP information for the six months ended June 30, 2021 and 2020 is as follows:
| | | | | | |
| | June 30, | ||||
| | 2021 | | 2020 | ||
| | ($ in millions) | ||||
Total dividends paid | | $ | 83.9 | | $ | 79.6 |
DRIP participation | | $ | 7.5 | | $ | 8.1 |
Shares issued for DRIP | | | 198,283 | | | 254,951 |
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
NOTE L—J—SHARE-BASED COMPENSATION
Main Street accounts for its share-based compensation plans using the fair value method, as prescribed by ASC 718,Compensation—Stock Compensation. Accordingly, for restricted stock awards, Main Street measured the grant date fair value based upon the market price of its common stock on the date of the grant and amortizes the fair value of the awards as share-based compensation expense over the requisite service period, which is generally the vesting term.
Main Street'sStreet’s Board of Directors approves the issuance of shares of restricted stock to Main Street employees pursuant to the Main Street Capital Corporation 2015 Equity and Incentive Plan (the "Equity“Equity and Incentive Plan"Plan”). These shares generally vest over a three-year period from the grant date. The fair value is expensed over the service period, starting on the grant date. The following table summarizes the restricted stock issuances approved by Main Street'sStreet’s Board of Directors under the Equity and Incentive Plan, net of shares forfeited, if any, and the remaining shares of restricted stock available for issuance as of SeptemberJune 30, 2017.2021.
| | | ||
Restricted stock authorized under the plan | 3,000,000 | |||
Less net restricted stock granted during: | | |||
Year ended December 31, 2015 | (900) | |||
Year ended December 31, 2016 | (260,514) | |||
| (223,812) | |||
Year ended December 31, 2018 | (243,779) | |||
Year ended December 31, 2019 | (384,049) | |||
Year ended December 31, 2020 | | (370,272) | ||
Six months ended | | |||
(309,682) | ||||
Restricted stock available for issuance as of | ||||
1,206,992 |
As of SeptemberJune 30, 2017,2021, the following table summarizes the restricted stock issued to Main Street'sStreet’s non-employee directors and the remaining shares of restricted stock available for issuance pursuant to the Main Street Capital Corporation 2015 Non-Employee Director Restricted Stock Plan. These shares are granted upon appointment or election to the board and vest on the day immediately preceding the annual meeting of stockholders following the respective grant date and are expensed over such service period.
| | | ||
Restricted stock authorized under the plan | 300,000 | |||
Less net restricted stock granted during: | | |||
Year ended December 31, 2015 | (6,806) | |||
Year ended December 31, 2016 | (6,748) | |||
| (5,948) | |||
Year ended December 31, 2018 | (6,376) | |||
Year ended December 31, 2019 | (6,008) | |||
Year ended December 31, 2020 | | (11,463) | ||
Six months ended | | |||
(4,949) | ||||
Restricted stock available for issuance as of | ||||
251,702 |
For the three months ended SeptemberJune 30, 20172021 and 2016,2020, Main Street recognized total share-based compensation expense of $2.5$2.8 million and $2.1$2.8 million, respectively, related to the restricted stock issued to Main Street employees and non-employee directors, and, fordirectors. For the ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, Main Street recognized total share-based
82
compensation expense of $7.5$5.1 million and $6.0$5.7 million, respectively, related to the restricted stock issued to Main Street employees and non-employee directors.
As of SeptemberJune 30, 2017,2021, there was $13.3$19.7 million of total unrecognized compensation expense related to Main Street'sStreet’s non-vested restricted shares. This compensation expense is expected to be recognized over a remaining weighted-average period of approximately 1.92.2 years as of SeptemberJune 30, 2017.
Table of Contents2021.
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
NOTE M—K—COMMITMENTS AND CONTINGENCIES
At SeptemberJune 30, 2017,2021, Main Street had the following outstanding commitments (in thousands):
| | | |
Investments with equity capital commitments that have not yet funded: |
| Amount | |
|
| | |
Congruent Credit Opportunities Fund III, LP | | $ | 8,117 |
| | | |
Encap Energy Fund Investments | | | |
EnCap Energy Capital Fund IX, L.P. | | $ | 230 |
EnCap Energy Capital Fund X, L.P. | |
| 772 |
EnCap Flatrock Midstream Fund II, L.P. | | | 4,586 |
EnCap Flatrock Midstream Fund III, L.P. | | | 423 |
| | $ | 6,011 |
| | | |
MS Private Loan Fund I, LP | | $ | 4,187 |
| | | |
EIG Fund Investments | | $ | 3,701 |
| |
| |
Brightwood Capital Fund III, LP | | $ | 3,000 |
| | | |
Freeport Fund Investments | | | |
Freeport Financial SBIC Fund LP | | $ | 1,375 |
Freeport First Lien Loan Fund III LP | | | 4,032 |
| | $ | 5,407 |
| | | |
LKCM Headwater Investments I, L.P. | | $ | 2,500 |
| | | |
UnionRock Energy Fund II, LP | | $ | 599 |
| | | |
HPEP 3, L.P. | | $ | 1,555 |
| | | |
Dos Rios Partners | | | |
Dos Rios Partners, LP | | $ | 835 |
Dos Rios Partners - A, LP | | | 265 |
| | $ | 1,100 |
| | | |
| | | |
Total equity commitments | | $ | 36,177 |
83
| | Amount | |||
|---|---|---|---|---|
Investments with equity capital commitments that have not yet funded: | ||||
Congruent Credit Opportunities Funds | ||||
Congruent Credit Opportunities Fund II, LP | $ | 8,488 | ||
Congruent Credit Opportunities Fund III, LP | 12,131 | |||
| | | | | |
| $ | 20,619 | |||
Encap Energy Fund Investments | ||||
EnCap Energy Capital Fund VIII, L.P. | $ | 419 | ||
EnCap Energy Capital Fund IX, L.P. | 708 | |||
EnCap Energy Capital Fund X, L.P. | 4,611 | |||
EnCap Flatrock Midstream Fund II, L.P. | 7,443 | |||
EnCap Flatrock Midstream Fund III, L.P. | 4,183 | |||
| | | | | |
| $ | 17,364 | |||
Brightwood Capital Fund Investments | ||||
Brightwood Capital Fund III, LP | $ | 3,000 | ||
Brightwood Capital Fund IV, LP | 4,500 | |||
| | | | | |
| $ | 7,500 | |||
Freeport Fund Investments | ||||
Freeport First Lien Loan Fund III LP | $ | 4,941 | ||
Freeport Financial SBIC Fund LP | 1,375 | |||
| | | | | |
| $ | 6,316 | |||
EIG Fund Investments | $ | 4,780 | ||
HPEP 3, L.P. | $ | 4,057 | ||
LKCM Headwater Investments I, L.P. | $ | 2,500 | ||
Copper Trail Energy Fund I, LP | $ | 2,500 | ||
Dos Rios Partners | ||||
Dos Rios Partners, LP | $ | 1,594 | ||
Dos Rios Partners—A, LP | 506 | |||
| | | | | |
| $ | 2,100 | |||
I-45 SLF LLC | $ | 800 | ||
Access Media Holdings, LLC | $ | 779 | ||
| | | | | |
Total equity commitments | $ | 69,315 | ||
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
| | Amount | |||
|---|---|---|---|---|
Investments with commitments to fund revolving loans that have not been fully drawn or term loans with additional commitments not yet funded: | ||||
Wireless Vision Holdings, LLC | $ | 8,289 | ||
Minute Key, Inc. | 8,000 | |||
PT Network, LLC | 7,300 | |||
NNE Partners, LLC | 7,000 | |||
Resolute Industrial, LLC | 5,750 | |||
Charps, LLC | 4,000 | |||
Hojeij Branded Foods, LLC | 3,590 | |||
CDHA Management, LLC | 3,373 | |||
Strike, LLC | 2,000 | |||
Boccella Precast Products LLC | 2,000 | |||
CST Industries Inc. | 1,987 | |||
Felix Investments Holdings II | 1,667 | |||
Hawk Ridge Systems, LLC | 1,600 | |||
Meisler Operating LLC | 1,600 | |||
Aethon United BR LP | 1,563 | |||
IDX Broker, LLC | 1,500 | |||
Lamb Ventures, LLC | 1,500 | |||
Messenger, LLC | 1,417 | |||
TGP Holdings III LLC | 1,255 | |||
Gamber-Johnson Holdings, LLC | 1,200 | |||
NuStep, LLC | 1,200 | |||
Subsea Global Solutions, LLC | 1,114 | |||
Market Force Information, LLC | 1,088 | |||
LaMi Products, LLC | 1,030 | |||
CTVSH, PLLC | 800 | |||
Apex Linen Service, Inc. | 800 | |||
Mystic Logistics Holdings, LLC | 800 | |||
Pardus Oil and Gas, LLC | 663 | |||
NRI Clinical Research, LLC | 600 | |||
PPC/SHIFT LLC | 500 | |||
UniTek Global Services, Inc. | 483 | |||
Grace Hill, LLC | 444 | |||
Clad-Rex Steel, LLC | 400 | |||
Gulf Publishing Holdings, LLC | 320 | |||
Arcus Hunting LLC | 240 | |||
OnAsset Intelligence, Inc. | 224 | |||
Permian Holdco 2, Inc. | 116 | |||
BigName Commerce, LLC | 101 | |||
Jensen Jewelers of Idaho, LLC | 50 | |||
| | | | | |
Total loan commitments | $ | 77,564 | ||
| | | | | |
Total commitments | $ | 146,879 | ||
| | | | | |
| | | | | |
| | | | | |
| | | |
|
| Amount | |
Investments with commitments to fund revolving loans that have not been fully drawn or term loans with additional commitments not yet funded: | | | |
| | | |
NWN Corporation | | $ | 8,760 |
SI East, LLC | | | 7,500 |
MS Private Loan Fund I, LP | | | 7,414 |
Adams Publishing Group, LLC | | | 5,000 |
Bolder Panther Group, LLC | | | 5,000 |
Pearl Meyer Topco LLC | | | 5,000 |
Classic H&G Holdco, LLC | | | 4,000 |
Electronic Transaction Consultants, LLC | | | 3,704 |
GS HVAM Intermediate, LLC | | | 3,409 |
Ian, Evan & Alexander Corporation | | | 3,333 |
Hunter Defense Technologies, Inc. | | | 3,230 |
NinjaTrader, LLC | | | 3,078 |
RTIC Subsidiary Holdings, LLC | | | 2,740 |
Echo US Holdings, LLC. | | | 2,586 |
Superior Rigging & Erecting Co. | | | 2,500 |
Klein Hersh, LLC | | | 2,500 |
Nebraska Vet AcquireCo, LLC | | | 2,500 |
Mako Steel, LP | | | 2,195 |
Fortna, Inc. | | | 2,027 |
PPL RVs, Inc. | | | 2,000 |
Hawk Ridge Systems, LLC | | | 2,000 |
Burning Glass Intermediate Holding Company, Inc. | | | 1,951 |
MB2 Dental Solutions, LLC | | | 2,216 |
Colonial Electric Company LLC | | | 1,600 |
Market Force Information, LLC | | | 1,600 |
Cody Pools, Inc. | | | 1,600 |
Chamberlin Holding LLC | | | 1,600 |
Direct Marketing Solutions, Inc. | | | 1,600 |
Trantech Radiator Topco, LLC | | | 1,600 |
Eastern Wholesale Fence LLC | | | 1,411 |
Lynx FBO Operating LLC | | | 1,375 |
GRT Rubber Technologies LLC | | | 1,340 |
RA Outdoors LLC | | | 1,278 |
Project Eagle Holdings, LLC | | | 1,250 |
Arcus Hunting LLC | | | 1,205 |
Gamber-Johnson Holdings, LLC | | | 1,200 |
Invincible Boat Company, LLC. | | | 1,080 |
CompareNetworks Topco, LLC | | | 1,000 |
NRI Clinical Research, LLC | | | 1,000 |
Mystic Logistics Holdings, LLC | | | 800 |
Project BarFly, LLC | | | 760 |
DTE Enterprises, LLC | | | 750 |
Student Resource Center, LLC | | | 750 |
PT Network, LLC | | | 658 |
Tedder Industries, LLC | | | 640 |
ASC Interests, LLC | | | 500 |
Jensen Jewelers of Idaho, LLC | | | 500 |
Clickbooth.com, LLC | | | 457 |
HW Temps LLC | | | 400 |
American Nuts, LLC | | | 281 |
Dynamic Communities, LLC | | | 250 |
Acousti Engineering Company of Florida | | | 53 |
| | | |
Total loan commitments | | $ | 113,181 |
| | | |
Total commitments | | $ | 149,358 |
Main Street will fund its unfunded commitments from the same sources it uses to fund its investment commitments that are funded at the time they are made (which are typically through existing cash and cash equivalents and borrowings under the Credit Facility). Main Street follows a
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
process to manage its liquidity and ensure that it has available capital to fund its unfunded commitments as necessary. The Company had total unrealized depreciation of $0.1 million on the outstanding unfunded commitments as of SeptemberJune 30, 2017.2021.
84
Effective January 1, 2019, ASC 842 required that a lessee evaluate its leases to determine whether they should be classified as operating or financing leases. Main Street has anidentified one operating lease for its office space in Houston, Texas. Total rent expense incurred byspace. The lease commenced May 15, 2017 and expires January 31, 2028. It contains two five-year extension options for a final expiration date of January 31, 2038.
As Main Street classified this lease as an operating lease prior to implementation, ASC 842-10-65-1 indicates that a right-of-use asset and lease liability should be recorded based on the effective date. Main Street adopted ASC 842 effective January 1, 2019 and recorded a right-of-use asset and a lease liability as of that date. After this date, Main Street has recorded lease expense on a straight-line basis, consistent with the accounting treatment for lease expense prior to the three months ended September 30, 2017 and 2016 was $0.2 million and $0.1 million, respectively. adoption of ASC 842.
Total rent expenseoperating lease cost incurred by Main Street for each of the ninethree months ended SeptemberJune 30, 20172021 and 20162020 was $0.5$0.2 million and for each of the six months ended June 30, 2021 and 2020 was $0.4 million. As of June 30, 2021, the asset related to the operating lease was $4.0 million respectively.and is included in the interest receivable and other assets balance on the consolidated balance sheet. The lease liability was $4.7 million and is included in the accounts payable and other liabilities balance on the consolidated balance sheet. As of June 30, 2021, the remaining lease term was 6.6 years and the discount rate was 4.2%.
The following table shows future minimum payments under Main Street'sStreet’s operating lease as of SeptemberJune 30, 2017:2021 (in thousands):
| | | |||||
For the Years Ended December 31, | Amount | | Amount | ||||
|---|---|---|---|---|---|---|---|
2017 | $ | — | |||||
2018 | 373 | ||||||
2019 | 749 | ||||||
2020 | 763 | ||||||
2021 | 777 | | $ | 389 | |||
2022 | | 790 | |||||
2023 | | 804 | |||||
2024 | | 818 | |||||
2025 | | 832 | |||||
Thereafter | 5,031 | | | 1,778 | |||
| | | | | ||||
Total | $ | 7,693 | | $ | 5,411 | ||
| | | | | ||||
| | | | |||||
| | | | | ||||
Main Street may, from time to time, be involved in litigation arising out of its operations in the normal course of business or otherwise. Furthermore, third parties may try to impose liability on Main Street in connection with the activities of its portfolio companies. While the outcome of any current legal proceedings cannot at this time be predicted with certainty, Main Street does not expect any current matters will materially affect its financial condition or results of operations; however, there can be no assurance whether any pending legal proceedings will have a material adverse effect on Main Street'sStreet’s financial condition or results of operations in any future reporting period.
NOTE N—L—RELATED PARTY TRANSACTIONS
As discussed further in Note D, the External Investment Manager is treated as a wholly owned portfolio company of MSCC and is included as part of Main Street'sStreet’s Investment Portfolio. At SeptemberJune 30, 2017,2021, Main Street had a receivable of approximately $2.7$4.2 million due from the External Investment Manager, which included (i) approximately $2.0$3.0 million related primarily to operating expenses incurred by MSCC or its subsidiaries as required to support the External Investment Manager'sManager’s business and amounts due from the External Investment Manager to Main Street under a tax sharing agreement (see further discussion in Note D) and (ii) approximately $0.7$1.3 million of dividends declared but not paid by the External Investment Manager. MSCC has entered into an agreement with the External Investment Manager to share employees in connection with its asset management business generally, and specifically for the External Investment Manager’s relationship with MSC Income and its other clients (see further discussion in Note A.1 and Note D).
From time to time, Main Street may make investments in clients of the External Investment Manager in the form of debt or equity capital on terms approved by Main Street’s Board of Directors. In January 2021, Main Street entered into a Term Loan Agreement with MSC Income (the “Term Loan Agreement”). The Term Loan Agreement was unanimously approved by Main Street’s Board, including each director who is not an “interested person,” as such term is defined in Section 2(a)(19) of the 1940 Act, and the board of directors of MSC Income, including each director who is not an “interested person” of MSC Income or the External Investment Manager. The Term Loan Agreement provides for
85
a term loan of $40.0 million to MSC Income, bearing interest at a fixed rate of 5.00% per annum, and matures in January 2026. Borrowings under the Term Loan Agreement are expressly subordinated and junior in right of payment to all secured indebtedness of MSC Income and are subject to a two-year no-call period that expires on January 27, 2023. See Note M for discussion of the recent amendment and increased commitments under the Term Loan Agreement made subsequent to June 30, 2021.
In December 2020, the External Investment Manager entered into an Investment Management Agreement with the Private Loan Fund to provide investment advisory and management services in exchange for an asset-based fee and certain incentive fees. The Private Loan Fund is a private investment fund exempt from registration under the 1940 Act that invests in debt investments in middle market companies generally with EBITDA between $7.5 million and $50 million and generally owned by a private equity sponsor, which Main Street generally refers to as Private Loan investments. In connection with the Private Loan Fund’s initial closing in December 2020, Main Street committed to contribute up to $10.0 million as a limited partner and will be entitled to distributions on such interest. In addition, certain of Main Street’s officers and employees (and certain of their immediate family members) have made capital commitments to the Private Loan Fund as limited partners and therefore have direct pecuniary interests in the Private Loan Fund. As of June 30, 2021, Main Street has funded approximately $0.3 million of its limited partner commitment and Main Street’s unfunded commitment was approximately $4.2 million.
Additionally, Main Street provided the Private Loan Fund with a revolving line of credit pursuant to an Unsecured Revolving Promissory Note, dated February 5, 2021 (the “Private Loan Fund Loan”), in an aggregate amount equal to the amount of limited partner capital commitments to the Private Loan Fund up to $50.0 million. Borrowings under the Private Loan Fund Loan bear interest at a fixed rate of 5.00% per annum and will mature on the earlier of June 30, 2022 and the date of the Private Loan Fund’s final closing. The Private Loan Fund Loan was unanimously approved by Main Street’s Board, including each director who is not an “interested person,” as such term is defined in Section 2(a)(19) of the 1940 Act, and the board of directors of the Private Loan Fund, including each director who is not an “interested person” of Private Loan Fund or the External Investment Manager. As of June 30, 2021, there were $16.2 million of borrowings outstanding under the Private Loan Fund Loan.
In November 2015, Main Street'sStreet’s Board of Directors approved and adopted the Main Street Capital Corporation Deferred Compensation Plan (the "2015“2015 Deferred Compensation Plan"Plan”). The 2015 Deferred Compensation Plan became effective on January 1, 2016 and replaced the Deferred Compensation Plan for Non-Employee Directors previously adopted by the Board of Directors in June 2013 (the "2013“2013 Deferred Compensation Plan"Plan”). Under the 2015 Deferred Compensation Plan, non-employee directors and certain key employees may defer receipt of some or all of their cash compensation and directors'directors’ fees, subject to certain limitations. Individuals participating in the 2015 Deferred Compensation Plan receive distributions of their respective balances based on predetermined
MAIN STREET CAPITAL CORPORATION
Notes to Consolidated Financial Statements (Continued)
(Unaudited)
payout schedules or other events as defined by the plan and are also able to direct investments made on their behalf among investment alternatives permitted from time to time under the plan, including phantom Main Street stock units. As of SeptemberJune 30, 2017, $3.82021, $14.3 million of compensation and directors' feesdividend reinvestments net of unrealized gains and losses and distributions had been deferred under the 2015 Deferred Compensation Plan (including amounts previously deferred under the 2013 Deferred Compensation Plan). Of this amount, $2.4$6.5 million washad been deferred into phantom Main Street stock units, representing 72,228157,054 shares of Main Street's common stock. Including phantom stock units issued through dividend reinvestment, the phantom stock units outstanding as of September 30, 2017 represented 84,963 shares of Main Street'sStreet’s common stock. Any amounts deferred under the plan represented by phantom Main Street stock units will not be issued or included as outstanding on the consolidated statements of changes in net assets until such shares are actually distributed to the participant in accordance with the plan, but the related phantom stock units are included in operating expenses and weighted-average shares outstanding with the related dollar amount of the deferral included in total expenses in Main Street'sStreet’s consolidated statements of operations as earned. The dividend amounts related to additional phantom stock units are included in the statements of changes in net assets as an increase to dividends to stockholders offset by a corresponding increase to additional paid-in capital.
NOTE O—M—SUBSEQUENT EVENTS
In October 2017, Main Street declared a semi-annual supplemental cash dividend of $0.275 per share payable in December 2017. This supplemental cash dividend is in addition to the previously announced regular monthly cash dividends that Main Street declared for the fourth quarter of 2017 of $0.190 per share for each of October, November and December 2017.
In October 2017,During August 2021, Main Street declared regular monthly dividends of $0.190$0.210 per share for each month of January, FebruaryOctober, November and MarchDecember of 2018.2021. These regular monthly dividends equal a total of $0.570$0.630 per share for the firstfourth quarter of 2018 and represent2021, representing a 2.7%2.4% increase from the regular monthly dividends paid in the fourth quarter of 2020. Including the regular monthly dividends declared for the first quarterthird and fourth quarters of 2017. Including the semi-annual supplemental dividend declared for December 2017 and the regular monthly dividends declared for the fourth quarter of 2017 and first quarter of 2018,2021, Main Street will have paid $21.960$32.075 per share in cumulative dividends since its October 2007 initial public offering.
86
In July 2021, Main Street amended the Term Loan Agreement with MSC Income (the “July 2021 Term Loan”) to provide for up to an additional $35.0 million of borrowings on substantially the same terms as the Term Loan Agreement, $20.0 million of which was funded at the time of closing and with up to $15.0 million available to MSC Income in two equal delayed draws until January 27, 2022. The July 2021 Term Loan was unanimously approved by Main Street’s Board, including each director who is not an “interested person,” as such term is defined in Section 2(a)(19) of the 1940 Act, and the board of directors of MSC Income, including each director who is not an “interested person” of MSC Income or the External Investment Manager.
87
Schedule 12-14
MAIN STREET CAPITAL CORPORATIONConsolidated Schedule of Investments In and Advances to AffiliatesSeptember 30, 2017(dollars in thousands)
Company | Investment(1) | Amount of Realized Gain/(Loss) | Amount of Unrealized Gain/(Loss) | Amount of Interest, Fees or Dividends Credited to Income(2) | December 31, 2016 Fair Value | Gross Additions(3) | Gross Reductions(4) | September 30, 2017 Fair Value | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Majority-owned investments | ||||||||||||||||||||||||
Café Brazil, LLC | Member Units | $ | — | $ | (650 | ) | $ | 127 | $ | 6,040 | $ | — | $ | 650 | $ | 5,390 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Clad-Rex Steel, LLC | LIBOR Plus 9.50% (Floor 1.00) | — | 121 | 1,163 | 14,337 | 143 | 800 | 13,680 | ||||||||||||||||
| Member Units | — | 1,240 | 311 | 7,280 | 1,240 | — | 8,520 | |||||||||||||||||
| 10% Secured Debt | — | — | 89 | 1,190 | — | 13 | 1,177 | |||||||||||||||||
| Member Units | — | — | — | 210 | — | — | 210 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
CMS Minerals Investments | Preferred Member Units | 1,405 | (1,578 | ) | 96 | 3,682 | — | 3,682 | — | |||||||||||||||
| Member Units | — | (461 | ) | 185 | 3,381 | — | 799 | 2,582 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Gamber-Johnson Holdings, LLC | LIBOR Plus 11.00% (Floor 1.00%) | — | 200 | 2,235 | 23,846 | 235 | 401 | 23,680 | ||||||||||||||||
| Member Units | — | 4,040 | 353 | 18,920 | 4,040 | — | 22,960 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
GRT Rubber Technologies LLC | LIBOR Plus 9.00% (Floor 1.00%) | — | (25 | ) | 996 | 13,274 | 25 | 1,269 | 12,030 | |||||||||||||||
| Member Units | — | 370 | 584 | 20,310 | 370 | — | 20,680 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Harborside Holdings, LLC | Member Units | — | 3,194 | — | — | 9,400 | — | 9,400 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Hydratec, Inc. | Common Stock | — | (160 | ) | 1,343 | 15,640 | — | 160 | 15,480 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
IDX Broker, LLC | 11.5% Secured Debt | — | (19 | ) | 971 | 10,950 | 19 | 919 | 10,050 | |||||||||||||||
| Member Units | — | 1,960 | 136 | 7,040 | 1,960 | — | 9,000 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Jensen Jewelers of Idaho, LLC | Prime Plus 6.75% (Floor 2.00%) | — | (16 | ) | 331 | 4,055 | 516 | 466 | 4,105 | |||||||||||||||
| Member Units | — | — | 127 | 4,460 | — | — | 4,460 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Lamb Ventures, LLC | 11% Secured Debt | — | — | 709 | 7,657 | 2,795 | 428 | 10,024 | ||||||||||||||||
| Preferred Equity | — | — | — | 400 | — | — | 400 | |||||||||||||||||
| Member Units | — | 440 | 40 | 5,990 | 440 | — | 6,430 | |||||||||||||||||
| 9.5% Secured Debt | — | 4 | 54 | 1,170 | 432 | 1,170 | 432 | |||||||||||||||||
| Member Units | — | (820 | ) | 850 | 1,340 | — | 820 | 520 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Lighting Unlimited, LLC | 8% Secured Debt | — | — | 29 | 1,514 | — | 1,514 | — | ||||||||||||||||
| Preferred Equity | (434 | ) | 24 | — | 410 | 24 | 434 | — | ||||||||||||||||
| Warrants | (54 | ) | 54 | — | — | 54 | 54 | — | ||||||||||||||||
| Member Units | (100 | ) | 100 | — | — | 100 | 100 | — | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Mid-Columbia Lumber | 10% Secured Debt | — | — | 133 | 1,750 | — | — | 1,750 | ||||||||||||||||
Products, LLC | 12% Secured Debt | — | — | 355 | 3,900 | — | — | 3,900 | ||||||||||||||||
| Member Units | — | (1,500 | ) | 5 | 2,480 | — | 1,500 | 980 | ||||||||||||||||
| 9.5% Secured Debt | — | — | 59 | 836 | — | 34 | 802 | |||||||||||||||||
| Member Units | — | 150 | 43 | 600 | 690 | — | 1,290 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
MSC Adviser I, LLC | Member Units | — | 8,687 | 2,132 | 30,617 | 8,687 | — | 39,304 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Mystic Logistics Holdings, LLC | 12% Secured Debt | — | (42 | ) | 824 | 9,176 | 42 | 1,450 | 7,768 | |||||||||||||||
| Common Stock | — | 810 | — | 5,780 | 810 | — | 6,590 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
NRP Jones, LLC | 8% Current/4% PIK Secured Debt | — | — | 1,302 | 13,915 | 1,122 | — | 15,037 | ||||||||||||||||
| Warrants | — | 687 | — | 130 | 687 | 817 | — | |||||||||||||||||
| Member Units | — | 33 | — | 410 | 850 | — | 1,260 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
PPL RVs, Inc. | LIBOR Plus 7.00% (Floor 0.50%) | — | 135 | 1,123 | 17,826 | 174 | 1,900 | 16,100 | ||||||||||||||||
| Common Stock | — | — | 100 | 11,780 | — | — | 11,780 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Principle Environmental, LLC | Zero Coupon Secured Debt | — | — | 738 | 7,438 | — | 103 | 7,335 | ||||||||||||||||
| Preferred Member Units | (63 | ) | 2,913 | — | 5,370 | 2,913 | 63 | 8,220 | ||||||||||||||||
| Warrants | — | 150 | — | 270 | 150 | — | 420 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Quality Lease Service, LLC | 8% PIK Secured Debt | — | (391 | ) | 273 | 7,068 | 273 | 391 | 6,950 | |||||||||||||||
| Member Units | — | — | — | 3,188 | 1,650 | — | 4,838 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
The MPI Group, LLC | 9% Secured Debt | — | (303 | ) | 201 | 2,922 | 1 | 304 | 2,619 | |||||||||||||||
| Series A Preferred Units | — | — | — | — | — | — | — | |||||||||||||||||
| Warrants | — | — | — | — | — | — | — | |||||||||||||||||
| Member Units | — | 90 | 92 | 2,300 | 90 | — | 2,390 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Uvalco Supply, LLC | 9% Secured Debt | — | — | 45 | 872 | — | 398 | 474 | ||||||||||||||||
| Member Units | 69 | (69 | ) | 146 | 4,640 | — | 333 | 4,307 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Vision Interests, Inc. | 13% Secured Debt | — | — | 285 | 2,814 | — | 20 | 2,794 | ||||||||||||||||
| Series A Preferred Stock | — | — | — | 3,000 | — | — | 3,000 | |||||||||||||||||
| Common Stock | — | — | — | — | — | — | — | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Company | Investment(1) | Amount of Realized Gain/(Loss) | Amount of Unrealized Gain/(Loss) | Amount of Interest, Fees or Dividends Credited to Income(2) | December 31, 2016 Fair Value | Gross Additions(3) | Gross Reductions(4) | September 30, 2017 Fair Value | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Ziegler's NYPD, LLC | 6.5% Secured Debt | — | — | 51 | 994 | 1 | — | 995 | ||||||||||||||||
| 12% Secured Debt | — | — | 27 | 300 | — | — | 300 | |||||||||||||||||
| 14% Secured Debt | — | — | 292 | 2,750 | — | — | 2,750 | |||||||||||||||||
| Warrants | — | (50 | ) | — | 240 | — | 50 | 190 | ||||||||||||||||
| Preferred Member Units | — | (700 | ) | — | 4,100 | — | 700 | 3,400 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Other controlled investments | ||||||||||||||||||||||||
Access Media Holdings, LLC | 5% Current/5% PIK Secured Debt | — | (1,125 | ) | 1,768 | 19,700 | 865 | 1,125 | 19,440 | |||||||||||||||
| Preferred Member Units | — | (1,280 | ) | — | 240 | 1,191 | 1,281 | 150 | ||||||||||||||||
| Member Units | — | — | — | — | — | — | — | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Ameritech College | 13% Secured Debt | — | — | 96 | 1,003 | — | 1,003 | — | ||||||||||||||||
Operations, LLC | 13% Secured Debt | — | — | 285 | 3,025 | — | 3,025 | — | ||||||||||||||||
| Preferred Member Units | (3,321 | ) | — | 198 | 2,291 | 3,900 | 6,191 | — | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
ASC Interests, LLC | 11% Secured Debt | — | (8 | ) | 164 | 2,100 | 8 | 183 | 1,925 | |||||||||||||||
| Member Units | — | (860 | ) | — | 2,680 | — | 860 | 1,820 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Bond-Coat, Inc. | 12% Secured Debt | — | (29 | ) | 1,085 | 11,596 | 29 | 29 | 11,596 | |||||||||||||||
| Common Stock | — | 1,770 | — | 6,660 | 1,770 | — | 8,430 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
CBT Nuggets, LLC | Member Units | — | 16,370 | 5,155 | 55,480 | 16,370 | — | 71,850 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Charps, LLC | 12% Secured Debt | — | — | 1,794 | — | 19,017 | 800 | 18,217 | ||||||||||||||||
| Preferred Member Units | — | — | — | — | 400 | — | 400 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Copper Trail Energy Fund I, LP | Member Units | — | — | — | — | 2,500 | — | 2,500 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Datacom, LLC | 8% Secured Debt | — | — | 72 | 900 | 720 | 270 | 1,350 | ||||||||||||||||
| 5.25% Current / 5.25% PIK Secured Debt | — | (116 | ) | 963 | 11,049 | 437 | 116 | 11,370 | ||||||||||||||||
| Class A Preferred Member Units | — | (8 | ) | — | 1,368 | — | 8 | 1,360 | ||||||||||||||||
| Class B Preferred Member Units | — | (1,529 | ) | — | 1,529 | — | 1,529 | — | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Garreco, LLC | LIBOR Plus 10.00% (Floor 1.00%) | — | — | 534 | 5,219 | 985 | 526 | 5,678 | ||||||||||||||||
| Member Units | — | 680 | — | 1,150 | 680 | — | 1,830 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Gulf Manufacturing, LLC | 9% PIK Secured Debt | — | — | 51 | 777 | — | 777 | — | ||||||||||||||||
| Member Units | — | 1,910 | 281 | 8,770 | 1,910 | — | 10,680 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Gulf Publishing Holdings, LLC | LIBOR Plus 9.50% (Floor 1.00%) | — | — | 2 | — | 80 | — | 80 | ||||||||||||||||
| 12% Secured Debt | — | — | 1,142 | 9,911 | 2,786 | — | 12,697 | |||||||||||||||||
| Member Units | — | 649 | 40 | 3,124 | 1,206 | — | 4,330 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Harrison Hydra-Gen, Ltd. | Common Stock | — | (320 | ) | — | 3,120 | — | 320 | 2,800 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Hawthorne Customs and | Member Units | (159 | ) | 309 | — | 280 | 309 | 589 | — | |||||||||||||||
Dispatch Services, LLC | Member Units | 632 | (825 | ) | 127 | 2,040 | — | 2,040 | — | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
HW Temps LLC | LIBOR Plus 13.00% (Floor 1.00%) | — | — | 1,095 | 10,500 | 13 | 600 | 9,913 | ||||||||||||||||
| Preferred Member Units | — | — | 105 | 3,940 | — | — | 3,940 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Indianapolis Aviation | 15% Secured Debt | — | — | 292 | 3,100 | — | 3,100 | — | ||||||||||||||||
Partners, LLC | Warrants | 2,385 | (1,520 | ) | — | 2,649 | — | 2,649 | — | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
KBK Industries, LLC | 10% Secured Debt | — | — | 81 | 1,250 | 100 | 600 | 750 | ||||||||||||||||
| 12.5% Secured Debt | — | — | 571 | 5,889 | 11 | — | 5,900 | |||||||||||||||||
| Member Units | — | 837 | 75 | 2,780 | 1,280 | — | 4,060 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Marine Shelters Holdings, LLC | 12% PIK Secured Debt | — | (2,551 | ) | — | 9,387 | — | 9,387 | — | |||||||||||||||
| Preferred Member Units | (101 | ) | — | — | — | 100 | 100 | — | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Market Force Information, LLC | LIBOR Plus 7.00% (Floor 1.00%) | — | — | 9 | — | 512 | — | 512 | ||||||||||||||||
| LIBOR Plus 11.00% (Floor 1.00%) | — | — | 767 | — | 23,293 | — | 23,293 | |||||||||||||||||
| Member Units | — | — | — | — | 14,700 | — | 14,700 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
MH Corbin Holding LLC | 10% Secured Debt | — | — | 1,003 | 13,197 | 21 | 524 | 12,694 | ||||||||||||||||
| Preferred Member Units | — | — | 105 | 6,000 | — | — | 6,000 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
NAPCO Precast, LLC | LIBOR Plus 8.50% | — | — | 621 | — | 11,433 | — | 11,433 | ||||||||||||||||
| Prime Plus 2.00% (Floor 7.00%) | — | (20 | ) | 122 | 2,713 | 20 | 2,733 | — | ||||||||||||||||
| 18% Secured Debt | — | (30 | ) | 327 | 3,952 | 31 | 3,983 | — | ||||||||||||||||
| Member Units | — | (90 | ) | 264 | 10,920 | — | 90 | 10,830 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
NRI Clinical Research, LLC | LIBOR Plus 6.50% (Floor 1.50%) | — | — | 27 | 200 | 200 | — | 400 | ||||||||||||||||
| 14% Secured Debt | — | (33 | ) | 508 | 4,261 | 34 | 90 | 4,205 | ||||||||||||||||
| Warrants | — | (180 | ) | — | 680 | — | 180 | 500 | ||||||||||||||||
| Member Units | — | 38 | — | 2,462 | 360 | 322 | 2,500 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
NuStep, LLC | 12% Secured Debt | — | — | 2,003 | — | 20,411 | — | 20,411 | ||||||||||||||||
| Preferred Member Units | — | — | — | — | 10,200 | — | 10,200 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
OMi Holdings, Inc. | Common Stock | — | (340 | ) | 672 | 13,080 | — | 340 | 12,740 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Pegasus Research Group, LLC | Member Units | — | 730 | 207 | 8,620 | 730 | — | 9,350 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
River Aggregates, LLC | Zero Coupon Secured Debt | — | — | 59 | 627 | 59 | — | 686 | ||||||||||||||||
| Member Units | — | (190 | ) | — | 4,600 | — | 190 | 4,410 | ||||||||||||||||
| Member Units | — | — | — | 2,510 | — | — | 2,510 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
SoftTouch Medical | LIBOR Plus 9.00% (Floor 1.00%) | — | (11 | ) | 557 | 7,140 | 11 | 11 | 7,140 | |||||||||||||||
Holdings LLC | Member Units | — | 370 | 758 | 9,170 | 370 | — | 9,540 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Company | Investment(1) | Amount of Realized Gain/(Loss) | Amount of Unrealized Gain/(Loss) | Amount of Interest, Fees or Dividends Credited to Income(2) | December 31, 2016 Fair Value | Gross Additions(3) | Gross Reductions(4) | September 30, 2017 Fair Value | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Other | ||||||||||||||||||||||||
Amounts related to investments transferred to or from other 1940 Act classification during the period | — | — | (220 | ) | (9,919 | ) | — | — | — | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 259 | $ | 31,216 | $ | 42,720 | $ | 594,282 | $ | 178,985 | $ | 67,313 | $ | 715,873 | |||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Affiliate Investments | ||||||||||||||||||||||||
AFG Capital Group, LLC | Warrants | $ | — | $ | 80 | $ | — | $ | 670 | $ | 80 | $ | — | $ | 750 | |||||||||
| Member Units | — | 380 | 26 | 2,750 | 380 | — | 3,130 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Barfly Ventures, LLC | 12% Secured Debt | — | 154 | 734 | 5,827 | 2,862 | — | 8,689 | ||||||||||||||||
| Options | — | 290 | — | 490 | 290 | — | 780 | |||||||||||||||||
| Warrants | — | 160 | — | 280 | 160 | — | 440 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
BBB Tank Services, LLC | LIBOR Plus 9.50% (Floor 1.00%) | — | — | 65 | 797 | — | — | 797 | ||||||||||||||||
| 15% Secured Debt | — | — | 463 | 3,991 | 4 | — | 3,995 | |||||||||||||||||
| Member Units | — | (220 | ) | — | 800 | — | 220 | 580 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Boccella Precast Products LLC | LIBOR Plus 10.0% (Floor 1.00%) | — | — | 718 | — | 16,223 | — | 16,223 | ||||||||||||||||
| Member Units | — | — | 7 | — | 2,160 | — | 2,160 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Boss Industries, LLC | Preferred Member Units | — | 786 | 266 | 2,800 | 930 | — | 3,730 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Bridge Capital Solutions | 13% Secured Debt | — | — | 939 | 5,610 | 200 | — | 5,810 | ||||||||||||||||
Corporation | Warrants | — | — | — | 3,370 | — | — | 3,370 | ||||||||||||||||
| 13% Secured Debt | — | (1 | ) | 100 | 1,000 | 1 | 1 | 1,000 | ||||||||||||||||
| Preferred Member Units | — | — | 75 | 1,000 | — | — | 1,000 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Buca C, LLC | LIBOR Plus 7.25% (Floor 1.00%) | — | (167 | ) | 1,420 | 22,671 | 40 | 1,633 | 21,078 | |||||||||||||||
| Preferred Member Units | — | (728 | ) | 177 | 4,660 | 177 | 727 | 4,110 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
CAI Software LLC | 12% Secured Debt | — | (6 | ) | 326 | 3,683 | 6 | 206 | 3,483 | |||||||||||||||
| Member Units | — | 560 | 59 | 2,480 | 560 | — | 3,040 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
CapFusion, LLC | 13% Secured Debt | — | (3,582 | ) | 1,401 | 13,202 | 138 | 6,662 | 6,678 | |||||||||||||||
| Warrants | — | (1,200 | ) | — | 1,200 | — | 1,200 | — | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Chandler Signs Holdings, LLC | 12% Secured Debt | — | (5 | ) | 415 | 4,500 | 5 | 5 | 4,500 | |||||||||||||||
| Class A Units | — | (590 | ) | 63 | 3,240 | — | 590 | 2,650 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Condit Exhibits, LLC | Member Units | — | — | 61 | 1,840 | — | — | 1,840 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Congruent Credit Opportunities | LP Interests (Fund II) | — | (3 | ) | 2 | 1,518 | — | 3 | 1,515 | |||||||||||||||
Funds | LP Interests (Fund III) | — | 418 | 1,144 | 16,181 | 2,533 | — | 18,714 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Daseke, Inc. | 12% Current / 2.5% PIK Secured Debt | — | (167 | ) | 676 | 21,799 | 255 | 22,054 | — | |||||||||||||||
| Common Stock | 22,859 | (18,849 | ) | — | 24,063 | — | 24,063 | — | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Dos Rios Partners | LP Interests (Dos Rios Partners, LP) | — | 1,502 | — | 4,925 | 1,502 | — | 6,427 | ||||||||||||||||
| LP Interests (Dos Rios Partners—A, LP) | — | 445 | — | 1,444 | 445 | — | 1,889 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Dos Rios Stone Products LLC | Class A Units | — | (200 | ) | — | 2,070 | — | 200 | 1,870 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
East Teak Fine Hardwoods, Inc. | Common Stock | — | (230 | ) | 50 | 860 | — | 230 | 630 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
East West Copolymer & | 12% Current/2% PIK Secured Debt | — | (2,665 | ) | — | 8,630 | — | 8,630 | — | |||||||||||||||
Rubber, LLC | Warrants | — | — | — | — | — | — | — | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
EIG Fund Investments | LP Interests (EIG Global Private Debt fund-A, L.P.) | 71 | (48 | ) | 90 | 2,804 | 352 | 2,909 | 247 | |||||||||||||||
| LP Interests (EIG Traverse Co-Investment, L.P.) | — | (100 | ) | 1,534 | 9,905 | — | 9,905 | — | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Freeport Financial Fund Investments | LP Interests (Freeport Financial SBIC Fund LP) | — | (101 | ) | 306 | 5,620 | — | 101 | 5,519 | |||||||||||||||
| LP Interests (Freeport First Lien Loan Fund III LP) | — | (52 | ) | 503 | 4,763 | 2,796 | 52 | 7,507 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Gault Financial, LLC (RMB | 10.5% Current Secured Debt | — | 1,016 | 976 | 11,079 | 1,017 | 454 | 11,642 | ||||||||||||||||
Capital, LLC) | Warrants | — | — | — | — | — | — | — | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Glowpoint, Inc. | 12% Secured Debt | (6,450 | ) | 4,951 | 685 | 3,997 | 5,003 | 9,000 | — | |||||||||||||||
| Common Stock | (3,974 | ) | 1,878 | — | 2,080 | 1,878 | 3,958 | — | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Guerdon Modular | 13% Secured Debt | — | — | 1,084 | 10,594 | 28 | — | 10,622 | ||||||||||||||||
Holdings, Inc. | Preferred Stock | — | (190 | ) | — | 1,140 | — | 190 | 950 | |||||||||||||||
| Common Stock | — | (80 | ) | — | 80 | — | 80 | — | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
HPEP 3, L.P. | LP Interests (HPEP 3, L.P.) | — | — | — | — | 943 | — | 943 | ||||||||||||||||
| LP Interests (2717 MH, L.P.) | — | — | — | — | 400 | — | 400 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Hawk Ridge Systems, LLC | 10% Secured Debt | — | — | 774 | 9,901 | 16 | 500 | 9,417 | ||||||||||||||||
| Preferred Member Units | — | 380 | 265 | 2,850 | 380 | — | 3,230 | |||||||||||||||||
| Preferred Member Units | — | 20 | 6 | 150 | 20 | — | 170 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Houston Plating and | 8% Unsecured Convertible Debt | — | 80 | 104 | — | 3,080 | — | 3,080 | ||||||||||||||||
Coatings, LLC | Member Units | — | 810 | 4 | 4,000 | 1,560 | — | 5,560 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Company | Investment(1) | Amount of Realized Gain/(Loss) | Amount of Unrealized Gain/(Loss) | Amount of Interest, Fees or Dividends Credited to Income(2) | December 31, 2016 Fair Value | Gross Additions(3) | Gross Reductions(4) | September 30, 2017 Fair Value | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
I-45 SLF LLC | Member Units | — | 311 | 2,148 | 14,586 | 2,311 | — | 16,897 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Indianhead Pipeline | 12% Secured Debt | — | — | 947 | 5,079 | 563 | 5,642 | — | ||||||||||||||||
Services, LLC | Preferred Member Units | — | (338 | ) | 514 | 2,677 | 514 | 3,191 | — | |||||||||||||||
| Warrants | 134 | 459 | — | — | 459 | 459 | — | |||||||||||||||||
| Member Units | 272 | 1 | — | — | 1 | 1 | — | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
L.F. Manufacturing Holdings, LLC | Member Units | — | 470 | — | 1,380 | 470 | — | 1,850 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Meisler Operating LLC | LIBOR Plus 8.50% (Floor 1.00%) | — | — | 818 | — | 16,626 | — | 16,626 | ||||||||||||||||
| Member Units | — | — | — | — | 3,200 | — | 3,200 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
OnAsset Intelligence, Inc. | 12% PIK Secured Debt | (28 | ) | — | 424 | 4,519 | 424 | — | 4,943 | |||||||||||||||
| 10% PIK Secured Debt | — | — | 1 | — | 47 | — | 47 | |||||||||||||||||
| Preferred Stock | — | — | — | — | — | — | — | |||||||||||||||||
| Warrants | — | — | — | — | — | — | — | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
OPI International Ltd. | 10% Unsecured Debt | (86 | ) | (473 | ) | 16 | 473 | — | 473 | — | ||||||||||||||
| Common Stock | — | (1,600 | ) | — | 1,600 | — | 1,600 | — | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
PCI Holding Company, Inc. | 12% Secured Debt | — | (102 | ) | 1,522 | 13,000 | 333 | 427 | 12,906 | |||||||||||||||
| Preferred Stock | — | (1,368 | ) | 548 | 5,370 | 548 | 1,368 | 4,550 | ||||||||||||||||
| Preferred Stock | — | 870 | — | — | 2,610 | — | 2,610 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Rocaceia, LLC (Quality Lease | 12% Secured Debt | — | — | — | 250 | — | — | 250 | ||||||||||||||||
and Rental Holdings, LLC) | Preferred Member Units | — | — | — | — | — | — | — | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Tin Roof Acquisition Company | 12% Secured Debt | — | — | 1,248 | 13,385 | 49 | 501 | 12,933 | ||||||||||||||||
| Class C Preferred Stock | — | — | 213 | 2,738 | 213 | — | 2,951 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
UniTek Global Services, Inc. | LIBOR Plus 8.50% (Floor 1.00%) | — | (4 | ) | 507 | 5,021 | 3,518 | 4 | 8,535 | |||||||||||||||
| LIBOR Plus 8.50% (Floor 1.00%) | — | — | 33 | 824 | 3 | 690 | 137 | |||||||||||||||||
| 15% PIK Unsecured Debt | — | — | 94 | 745 | 88 | — | 833 | |||||||||||||||||
| Preferred Stock | — | (632 | ) | 1,302 | 6,410 | 1,302 | 632 | 7,080 | ||||||||||||||||
| Preferred Stock | — | (5 | ) | 207 | — | 2,725 | 5 | 2,720 | ||||||||||||||||
| Common Stock | — | (690 | ) | — | 3,010 | — | 690 | 2,320 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Universal Wellhead Services | Preferred Member Units | — | 80 | — | 720 | 80 | — | 800 | ||||||||||||||||
Holdings, LLC | Member Units | — | 620 | — | 610 | 620 | — | 1,230 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Valley Healthcare Group, LLC | LIBOR Plus 12.50% (Floor 0.50%) | — | — | 1,306 | 12,844 | 25 | 1,110 | 11,759 | ||||||||||||||||
| Preferred Member Units | — | — | — | 1,600 | — | — | 1,600 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Volusion, LLC | 11.5% Secured Debt | — | — | 2,015 | 15,298 | 517 | 766 | 15,049 | ||||||||||||||||
| Preferred Member Units | — | — | — | 14,000 | — | — | 14,000 | |||||||||||||||||
| Warrants | — | (337 | ) | — | 2,576 | — | 336 | 2,240 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Other | ||||||||||||||||||||||||
Amounts related to investments transferred to or from other 1940 Act classification during the period | 122 | — | 220 | 9,919 | — | — | — | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 12,920 | $ | (18,012 | ) | $ | 29,601 | $ | 375,948 | $ | 83,670 | $ | 111,468 | $ | 338,231 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total Non-Control/Non-Affiliate investments | $ | 14,663 | $ | (17,562 | ) | $ | 77,623 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total Portfolio Investments | $ | 27,842 | $ | (4,358 | ) | $ | 149,944 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
This schedule should be read in conjunction with Main Street's consolidated financial statements, including the consolidated schedule of investments and notes to the consolidated financial statements.
unrealized appreciation or net decreases in net unrealized depreciation as well as the movement of an existing portfolio company into this category and out of a different category.
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to AffiliatesSeptember
June 30, 2016
2021
(dollars in thousands)(Unaudited)
(unaudited)
Company | Investment(1) | Amount of Realized Gain/(Loss) | Amount of Unrealized Gain/(Loss) | Amount of Interest, Fees or Dividends Credited to Income(2) | December 31, 2015 Fair Value | Gross Additions(3) | Gross Reductions(4) | September 30, 2016 Fair Value | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Control Investments | ||||||||||||||||||||||||
Majority-owned investments |
| |||||||||||||||||||||||
Café Brazil, LLC | Member Units | $ | — | $ | (760 | ) | $ | 416 | 7,330 | $ | — | $ | 760 | $ | 6,570 | |||||||||
CMS Minerals LLC | Member Units | — | (62 | ) | 101 | — | 4,083 | 190 | 3,893 | |||||||||||||||
| Preferred Member Units | — | (2,783 | ) | 1,172 | 6,914 | — | 3,543 | 3,371 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Gamber-Johnson | LIBOR Plus 11.00% (Floor 1.00%) | — | — | 884 | — | 19,798 | — | 19,798 | ||||||||||||||||
Holdings, LLC | Member Units | — | — | 354 | — | 12,124 | — | 12,124 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
GRT Rubber | LIBOR Plus 9.00% (Floor 1.00%) | — | 94 | 1,118 | 15,988 | 134 | 2,638 | 13,484 | ||||||||||||||||
Technologies LLC | Member Units | — | 2,450 | 335 | 15,580 | 2,450 | — | 18,030 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Hydratec, Inc. | Common Stock | — | 810 | 1,270 | 14,950 | 810 | — | 15,760 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
IDX Broker, LLC | 12.5% Secured Debt | — | (16 | ) | 1,099 | 11,350 | 16 | 116 | 11,250 | |||||||||||||||
| Member Units | — | 250 | 68 | 6,440 | 250 | — | 6,690 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Jensen Jewelers of | Prime Plus 6.75% (Floor 2.00%) | — | (22 | ) | 359 | 4,055 | 522 | 372 | 4,205 | |||||||||||||||
Idaho, LLC | Member Units | — | (100 | ) | 159 | 4,750 | — | 100 | 4,650 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Lamb's Venture, LLC | LIBOR Plus 5.75% | — | 1 | 7 | — | 352 | 213 | 139 | ||||||||||||||||
| 11% Secured Debt | — | — | 653 | 7,962 | — | 227 | 7,735 | |||||||||||||||||
| Preferred Equity | — | — | — | 328 | 72 | — | 400 | |||||||||||||||||
| Member Units | — | 1,190 | 50 | 4,690 | 1,190 | — | 5,880 | |||||||||||||||||
| 9.5% Secured Debt | — | — | 65 | 919 | — | 37 | 882 | |||||||||||||||||
| Member Units | — | 380 | 45 | 1,240 | 380 | — | 1,620 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Lighting Unlimited, LLC | 8% Secured Debt | — | — | 92 | 1,514 | — | — | 1,514 | ||||||||||||||||
| Preferred Equity | — | — | — | 430 | — | — | 430 | |||||||||||||||||
| Warrants | — | (30 | ) | — | 40 | — | 30 | 10 | ||||||||||||||||
| Member Units | — | (270 | ) | (81 | ) | 350 | — | 270 | 80 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Mid-Columbia Lumber | 10% Secured Debt | — | — | 133 | 1,750 | — | — | 1,750 | ||||||||||||||||
Products, LLC | 12% Secured Debt | — | — | 356 | 3,900 | — | — | 3,900 | ||||||||||||||||
| Member Units | — | (280 | ) | 4 | 2,580 | — | 280 | 2,300 | ||||||||||||||||
| 9.5% Secured Debt | — | — | 62 | 881 | — | 34 | 847 | |||||||||||||||||
| Member Units | — | 50 | 16 | 550 | 50 | — | 600 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
MSC Adviser I, LLC | Member Units | — | 2,861 | 2,110 | 27,272 | 2,861 | — | 30,133 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Mystic Logistics | 12% Secured Debt | — | (33 | ) | 892 | 9,448 | 32 | 304 | 9,176 | |||||||||||||||
Holdings, LLC | Common Stock | — | (820 | ) | — | 5,970 | — | 820 | 5,150 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
NRP Jones, LLC | 6% Current / 6% PIK Secured Debt | — | — | 1,426 | 12,948 | 683 | — | 13,631 | ||||||||||||||||
| Warrants | — | (320 | ) | — | 450 | — | 320 | 130 | ||||||||||||||||
| Member Units | — | (1,070 | ) | — | 1,480 | — | 1,070 | 410 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
PPL RVs, Inc. | 11.1% Secured Debt | — | — | 820 | 9,710 | — | — | 9,710 | ||||||||||||||||
| Common Stock | — | 2,010 | 261 | 9,770 | 2,010 | — | 11,780 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Principle | 12% Secured Debt | — | (21 | ) | 392 | 4,060 | 21 | 21 | 4,060 | |||||||||||||||
Environmental, LLC | 12% Current / 2% PIK Secured Debt | — | (1 | ) | 354 | 3,310 | 52 | 1 | 3,361 | |||||||||||||||
| Preferred Member Units | — | (1,460 | ) | — | 6,060 | — | 1,460 | 4,600 | ||||||||||||||||
| Warrants | — | (290 | ) | — | 310 | — | 290 | 20 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Quality Lease Service, LLC | 8% PIK Secured Debt | — | — | 392 | 6,538 | 391 | — | 6,929 | ||||||||||||||||
| Member Units | — | — | — | 2,638 | 250 | — | 2,888 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Southern RV, LLC | 13% Secured Debt | — | (104 | ) | 157 | 11,400 | 104 | 11,504 | — | |||||||||||||||
| Member Units | 13,918 | (13,420 | ) | 957 | 15,100 | — | 15,100 | — | ||||||||||||||||
| 13% Secured Debt | 440 | (30 | ) | 45 | 3,250 | 30 | 3,280 | — | ||||||||||||||||
| Member Units | — | (720 | ) | — | 1,200 | — | 1,200 | — | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
The MPI Group, LLC | 9% Secured Debt | — | — | 202 | 2,921 | 1 | — | 2,922 | ||||||||||||||||
| Series A Preferred Units | — | (330 | ) | — | 690 | — | 330 | 360 | ||||||||||||||||
| Warrants | — | — | — | — | — | — | — | |||||||||||||||||
| Member Units | — | 70 | 95 | 2,230 | 70 | — | 2,300 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Travis Acquisition LLC | 12% Secured Debt | — | (43 | ) | 340 | 3,513 | 43 | 3,556 | — | |||||||||||||||
| Member Units | 17,862 | (7,380 | ) | 2,812 | 14,480 | — | 14,480 | — | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
Uvalco Supply, LLC | 9% Secured Debt | — | — | 77 | 1,314 | — | 328 | 986 | ||||||||||||||||
| Member Units | — | (600 | ) | 140 | 5,460 | — | 600 | 4,860 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | Fees or | | | | | | | | | | | | | |
| | | | | | Amount of | | Amount of | | Dividends | | December 31, | | | | | | | | June 30, | |||||
| | | | | | Realized | | Unrealized | | Credited to | | 2020 | | Gross | | Gross | | 2021 | |||||||
Company |
| Investment(1)(10)(11) |
| Geography |
| Gain/(Loss) |
| Gain/(Loss) |
| Income(2) |
| Fair Value |
| Additions(3) |
| Reductions(4) |
| Fair Value | |||||||
Majority‑owned investments | |
| |
| |
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| | |
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| | |
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ASK (Analytical Systems Keco Holdings, LLC) | | 12.00% (L+10.00%, Floor 2.00%) Secured Debt | | (8) | | $ | - | | $ | - | | $ | 346 | | $ | 4,874 | | $ | 114 | | $ | 150 | | $ | 4,838 |
| | Preferred Member Units | | (8) | | | - | | | (1,830) | | | - | | | 3,200 | | | - | | | 1,830 | | | 1,370 |
| | Preferred Member Units | | (8) | | | - | | | 986 | | | - | | | - | | | 1,640 | | | - | | | 1,640 |
| | Warrants | | (8) | | | - | | | (10) | | | - | | | 10 | | | - | | | 10 | |
| - |
CMS Minerals Investments | | Member Units | | (9) | | | - | | | 453 | | | 13 | | | 1,624 | | | 453 | | | 107 | |
| 1,970 |
Café Brazil, LLC | | Member Units | | (8) | | | - | | | 460 | | | 31 | | | 2,030 | | | 460 | | | - | |
| 2,490 |
California Splendor Holdings LLC | | Preferred Member Units | | (9) | | | - | | | 2,897 | | | 125 | | | 6,241 | | | 2,897 | | | - | |
| 9,138 |
| | Preferred Member Units | | (9) | | | - | | | - | | | 623 | | | 8,255 | | | 623 | | | - | |
| 8,878 |
| | 11.00% (L+10.00%, Floor 1.00%) Secured Debt | | (9) | | | - | | | 36 | | | 1,708 | | | 35,832 | | | 113 | | | 8,129 | |
| 27,816 |
Clad-Rex Steel, LLC | | Member Units | | (5) | | | - | | | 810 | | | 143 | | | 8,610 | | | 810 | | | - | |
| 9,420 |
| | Member Units | | (5) | | | - | | | - | | | - | | | 530 | | | - | | | - | |
| 530 |
| | 10.50% (L+9.50%, Floor 1.00%) Secured Debt | | (5) | | | - | | | - | | | 589 | | | 10,853 | | | - | | | 469 | |
| 10,384 |
| | 10.00% Secured Debt | | (5) | | | - | | | - | | | 55 | | | 1,100 | | | - | | | 14 | | | 1,086 |
Cody Pools, Inc. | | Preferred Member Units | | (8) | | | - | | | 7,260 | | | 106 | | | 14,940 | | | 7,260 | | | - | | | 22,200 |
| | 12.25% (L+10.50%, Floor 1.75%) Secured Debt | | (8) | | | - | | | (30) | | | 843 | | | 14,216 | | | 30 | | | 2,400 | |
| 11,846 |
Datacom, LLC | | Preferred Member Units | | (8) | | | - | | | - | | | - | | | - | | | 2,610 | | | - | |
| 2,610 |
| | 5.00% Secured Debt | | (8) | | | - | | | - | | | 336 | | | - | | | 8,175 | | | 54 | |
| 8,121 |
Direct Marketing Solutions, Inc. | | Preferred Stock | | (9) | | | - | | | (1,560) | | | - | | | 19,380 | | | - | | | 1,560 | |
| 17,820 |
| | 12.00% (L+11.00%, Floor 1.00%) Secured Debt | | (9) | | | - | | | - | | | 932 | | | 15,007 | | | 18 | | | - | |
| 15,025 |
GRT Rubber Technologies LLC | | Member Units | | (8) | | | - | | | - | | | 2,192 | | | 44,900 | | | - | | | - | |
| 44,900 |
| | 7.09% (L+7.00%) Secured Debt | | (8) | | | - | | | - | | | 600 | | | 16,775 | | | - | | | - | |
| 16,775 |
Gamber-Johnson Holdings, LLC | | Member Units | | (5) | | | - | | | 912 | | | 3,477 | | | 52,490 | | | 3,760 | | | - | |
| 56,250 |
| | 9.00% (L+7.00%, Floor 2.00%) Secured Debt | | (5) | | | - | | | (30) | | | 954 | | | 19,838 | | | 830 | | | 30 | |
| 20,638 |
| | 9.00% (L+7.00%, Floor 2.00%) Secured Debt | | (5) | | | - | | | (1) | | | 4 | | | - | | | 1 | | | 1 | |
| - |
Jensen Jewelers of Idaho, LLC | | Member Units | | (9) | | | - | | | 1,990 | | | 597 | | | 7,620 | | | 1,990 | | | - | |
| 9,610 |
| | 10.00% (Prime+6.75%, Floor 2.00%) Secured Debt | | (9) | | | - | | | (7) | | | 167 | | | 3,400 | | | 7 | | | 407 | |
| 3,000 |
Kickhaefer Manufacturing Company, LLC | | Member Units | | (5) | | | - | | | - | | | - | | | 12,240 | | | - | | | - | |
| 12,240 |
| | 11.50% Secured Debt | | (5) | | | - | | | - | | | 1,296 | | | 22,269 | | | 29 | | | 1,200 | |
| 21,098 |
| | Member Units | | (5) | | | - | | | 50 | | | 50 | | | 1,160 | | | 50 | | | - | |
| 1,210 |
| | 9.00% Secured Debt | | (5) | | | - | | | - | | | 177 | | | 3,909 | | | - | | | 16 | |
| 3,893 |
MH Corbin Holding LLC | | 13.00% (10.00% Cash, 3.00% PIK) Secured Debt | | (5) | | | - | | | (521) | | | 569 | | | 8,280 | | | 17 | | | 681 | |
| 7,616 |
| | Preferred Member Units | | (5) | | | - | | | (2,370) | | | - | | | 2,370 | | | - | | | 2,370 | |
| - |
MSC Adviser I, LLC | | Member Units | | (8) | | | - | | | 4,970 | | | 2,449 | | | 116,760 | | | 4,970 | | | - | |
| 121,730 |
Market Force Information, LLC | | 12.00% PIK Secured Debt | | (9) | | | - | | | (294) | | | - | | | 13,562 | | | - | | | 294 | |
| 13,268 |
| | 12.00% (L+11.00%, Floor 1.00%) Secured Debt | | (9) | | | - | | | - | | | 178 | | | 1,600 | | | 1,800 | | | - | |
| 3,400 |
Mystic Logistics Holdings, LLC | | Common Stock | | (6) | | | - | | | (3,070) | | | 548 | | | 8,990 | | | - | | | 3,070 | |
| 5,920 |
| | 12.00% Secured Debt | | (6) | | | - | | | - | | | 410 | | | 6,723 | | | 5 | | | 24 | |
| 6,704 |
| | 12.00% Secured Debt | | (6) | | | - | | | - | | | 2 | | | - | | | - | | | - | |
| - |
88
Company | Investment(1) | Amount of Realized Gain/(Loss) | Amount of Unrealized Gain/(Loss) | Amount of Interest, Fees or Dividends Credited to Income(2) | December 31, 2015 Fair Value | Gross Additions(3) | Gross Reductions(4) | September 30, 2016 Fair Value | |||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Vision Interests, Inc. | 13% Secured Debt | — | — | 312 | 3,052 | 15 | 182 | 2,885 | |||||||||||||||||||||||||||||||||||||||||
| Series A Preferred Stock | — | (180 | ) | — | 3,550 | — | 180 | 3,370 | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | — | (70 | ) | — | 210 | — | 70 | 140 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Ziegler's NYPD, LLC | 6.5% Secured Debt | — | — | 51 | 992 | 1 | — | 993 | |||||||||||||||||||||||||||||||||||||||||
| 12% Secured Debt | — | — | 37 | 500 | — | 200 | 300 | ||||||||||||||||||||||||||||||||||||||||||
| 14% Secured Debt | — | — | 293 | 2,750 | — | — | 2,750 | ||||||||||||||||||||||||||||||||||||||||||
| Warrants | — | 170 | — | 50 | 170 | — | 220 | ||||||||||||||||||||||||||||||||||||||||||
| Preferred Member Units | — | 300 | — | 3,400 | 300 | — | 3,700 | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Other controlled investments | |||||||||||||||||||||||||||||||||||||||||||||||||
Access Media Holdings, LLC | 5.00% Current / 5.00% PIK Secured | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt | — | (1,486 | ) | 1,689 | 20,380 | 826 | 1,486 | 19,720 | |||||||||||||||||||||||||||||||||||||||||
| Preferred Member Units | — | (3,482 | ) | — | 2,000 | 1,732 | 3,482 | 250 | |||||||||||||||||||||||||||||||||||||||||
| Member Units | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
AmeriTech College, LLC | 10% Secured Debt | — | — | 76 | 1,003 | 1 | — | 1,004 | |||||||||||||||||||||||||||||||||||||||||
| 10% Secured Debt | — | — | 230 | 3,025 | — | — | 3,025 | ||||||||||||||||||||||||||||||||||||||||||
| Preferred Member Units | — | — | 86 | 2,291 | — | — | 2,291 | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
ASC Interests, LLC | 11% Secured Debt | — | (10 | ) | 205 | 2,500 | 10 | 260 | 2,250 | ||||||||||||||||||||||||||||||||||||||||
| Member Units | — | 450 | 65 | 2,230 | 450 | — | 2,680 | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Bond-Coat, Inc. | 12% Secured Debt | — | (26 | ) | 1,085 | 11,596 | 17 | 17 | 11,596 | ||||||||||||||||||||||||||||||||||||||||
| Common Stock | — | (4,050 | ) | — | 9,140 | — | 4,050 | 5,090 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
CBT Nuggets, LLC | Member Units | — | 10,680 | 6,225 | 42,120 | 10,680 | — | 52,800 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Datacom, LLC | 8% Secured Debt | — | — | 33 | — | 900 | — | 900 | |||||||||||||||||||||||||||||||||||||||||
| 5.25% Current / 5.25% PIK Secured | |||||||||||||||||||||||||||||||||||||||||||||||||
| Debt | — | (450 | ) | 878 | 10,970 | 369 | 451 | 10,888 | |||||||||||||||||||||||||||||||||||||||||
| Class A Preferred Member Units | — | 138 | — | 1,181 | 137 | — | 1,318 | ||||||||||||||||||||||||||||||||||||||||||
| Class B Preferred Member Units | — | (3,310 | ) | — | 5,079 | — | 3,310 | 1,769 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Garreco, LLC | 14% Secured Debt | — | — | 636 | 5,739 | 22 | 250 | 5,511 | |||||||||||||||||||||||||||||||||||||||||
| Member Units | — | (120 | ) | 5 | 1,270 | — | 120 | 1,150 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Gulf Manufacturing, LLC | 9% PIK Secured Debt | — | — | 53 | 777 | — | — | 777 | |||||||||||||||||||||||||||||||||||||||||
| Member Units | — | (5,000 | ) | — | 13,770 | — | 5,000 | 8,770 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Gulf Publishing | 12.5% Secured Debt | — | — | 645 | — | 9,907 | — | 9,907 | |||||||||||||||||||||||||||||||||||||||||
Holdings, LLC | Member Units | — | — | 62 | — | 3,124 | — | 3,124 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Harrison Hydra-Gen, Ltd. | 9% Secured Debt | — | — | 9 | 5,010 | — | 5,010 | — | |||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | — | — | 2 | 1,361 | 2 | 1,363 | — | ||||||||||||||||||||||||||||||||||||||||||
| Common Stock | — | 740 | 137 | 2,600 | 740 | — | 3,340 | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Hawthorne Customs and | Member Units | — | (180 | ) | — | 460 | — | 180 | 280 | ||||||||||||||||||||||||||||||||||||||||
Dispatch Services, LLC | Member Units | — | (180 | ) | 141 | 2,220 | — | 180 | 2,040 | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
HW Temps LLC | LIBOR Plus 9.50% (Floor 1.00%) | — | — | 814 | 9,884 | 412 | — | 10,296 | |||||||||||||||||||||||||||||||||||||||||
| Preferred Member Units | — | 418 | 354 | 3,942 | 418 | — | 4,360 | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Indianapolis Aviation | 15% Secured Debt | — | (5 | ) | 417 | 3,100 | 5 | 5 | 3,100 | ||||||||||||||||||||||||||||||||||||||||
Partners, LLC | Warrants | — | 109 | — | 2,540 | 109 | — | 2,649 | |||||||||||||||||||||||||||||||||||||||||
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Marine Shelters | |||||||||||||||||||||||||||||||||||||||||||||||||
Holdings, LLC (LoneStar | 12% PIK Secured Debt | — | (430 | ) | 886 | 8,870 | 939 | 430 | 9,379 | ||||||||||||||||||||||||||||||||||||||||
Marine Shelters) | Preferred Member Units | — | (3,975 | ) | — | 4,881 | — | 3,975 | 906 | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
MH Corbin Holding LLC | 10% Secured Debt | — | — | 1,062 | 13,869 | 21 | 525 | 13,365 | |||||||||||||||||||||||||||||||||||||||||
| Preferred Member Units | — | — | 105 | 6,000 | — | — | 6,000 | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
NAPCO Precast, LLC | Prime Plus 2.00% (Floor 7.00%) | — | 22 | 219 | 4,005 | — | 1,292 | 2,713 | |||||||||||||||||||||||||||||||||||||||||
| 18% Secured Debt | — | 31 | 609 | 4,924 | — | 972 | 3,952 | ||||||||||||||||||||||||||||||||||||||||||
| Member Units | — | 2,080 | 645 | 8,590 | 2,080 | — | 10,670 | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
NRI Clinical Research, LLC | 14% Secured Debt | — | 46 | 519 | 4,539 | 79 | 108 | 4,510 | |||||||||||||||||||||||||||||||||||||||||
| Warrants | — | 310 | — | 340 | 310 | — | 650 | ||||||||||||||||||||||||||||||||||||||||||
| Member Units | — | 979 | — | 1,342 | 979 | — | 2,321 | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
OMi Holdings, Inc. | Common Stock | — | 750 | — | 13,640 | 750 | — | 14,390 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Pegasus Research Group, LLC (Televerde) | Member Units | — | 1,780 | 339 | 6,840 | 1,780 | — | 8,620 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
River Aggregates, LLC | Zero Coupon Secured Debt | — | — | 52 | 556 | 53 | — | 609 | |||||||||||||||||||||||||||||||||||||||||
| Member Units | — | 770 | 345 | 3,830 | 770 | — | 4,600 | ||||||||||||||||||||||||||||||||||||||||||
| Member Units | — | 150 | — | 2,360 | 150 | — | 2,510 | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
SoftTouch Medical | LIBOR Plus 9.00% (Floor 1.00%) | — | 48 | 606 | 8,010 | 65 | 850 | 7,225 | |||||||||||||||||||||||||||||||||||||||||
Holdings LLC | Member Units | — | 2,959 | 262 | 5,710 | 2,960 | — | 8,670 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||||||||||||||||
Amounts related to investments transferred to or from other 1940 Act classification during the period | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
| $ | 32,220 | $ | (20,823 | ) | $ | 40,398 | 555,011 | $ | 90,062 | $ | 97,422 | $ | 547,651 | ||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Amount of | | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Interest, | | | | | | | | | | | | | |||
| | | | | | | | | | | | Fees or | | | | | | | | | | | | | |||||||||||||||||||||||||
| | | | | | Amount of | | Amount of | | Dividends | | December 31, | | | | | | | | June 30, | |||||||||||||||||||||||||||||
| | | | | | Realized | | Unrealized | | Credited to | | 2020 | | Gross | | Gross | | 2021 | |||||||||||||||||||||||||||||||
Company |
| Investment(1)(10)(11) |
| Geography |
| Gain/(Loss) |
| Gain/(Loss) |
| Income(2) |
| Fair Value |
| Additions(3) |
| Reductions(4) |
| Fair Value | |||||||||||||||||||||||||||||||
OMi Holdings, Inc. | | Common Stock | | (8) | | | - | | | (1,550) | | | 1,080 | | | 20,380 | | | - | | | 1,550 | |
| 18,830 | ||||||||||||||||||||||||
PPL RVs, Inc. | | Common Stock | | (8) | | | - | | | 1,630 | | | 569 | | | 11,500 | | | 1,630 | | | - | |
| 13,130 | ||||||||||||||||||||||||
| | 7.50% (L+7.00%, Floor 0.50%) Secured Debt | | (8) | | | - | | | (14) | | | 470 | | | 11,806 | | | 27 | | | 214 | |
| 11,619 | ||||||||||||||||||||||||
Principle Environmental, LLC | | 13.00% Secured Debt | | (8) | | | - | | | (62) | | | 430 | | | 6,397 | | | 12 | | | 62 | |
| 6,347 | ||||||||||||||||||||||||
| | Common Stock | | (8) | | | - | | | (440) | | | - | | | - | | | 1,200 | | | 440 | |
| 760 | ||||||||||||||||||||||||
| | Preferred Member Units | | (8) | | | - | | | (360) | | | - | | | 10,500 | | | - | | | 360 | |
| 10,140 | ||||||||||||||||||||||||
Quality Lease Service, LLC | | Member Units | | (7) | | | - | | | (311) | | | - | | | 4,460 | | | - | | | 1,561 | |
| 2,899 | ||||||||||||||||||||||||
Trantech Radiator Topco, LLC | | Common Stock | | (7) | | | - | | | (40) | | | 58 | | | 6,030 | | | - | | | 40 | |
| 5,990 | ||||||||||||||||||||||||
| | 12.00% Secured Debt | | (7) | | | - | | | - | | | 538 | | | 8,644 | | | 10 | | | - | |
| 8,654 | ||||||||||||||||||||||||
Ziegler’s NYPD, LLC | | Preferred Member Units | | (8) | | | - | | | 290 | | | - | | | 1,780 | | | 290 | | | - | |
| 2,070 | ||||||||||||||||||||||||
| | 14.00% Secured Debt | | (8) | | | - | | | - | | | 194 | | | 2,750 | | | - | | | - | |
| 2,750 | ||||||||||||||||||||||||
| | 12.00% Secured Debt | | (8) | | | - | | | - | | | 38 | | | 625 | | | - | | | - | |
| 625 | ||||||||||||||||||||||||
| | 6.50% Secured Debt | | (8) | | | - | | | 21 | | | 33 | | | 979 | | | 21 | | | - | |
| 1,000 | ||||||||||||||||||||||||
Other controlled investments | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||
2717 MH, L.P. | | | | (8) | | | - | | | - | | | - | | | 250 | | | - | | | 250 | | | - | ||||||||||||||||||||||||
| | LP Interests (2717 MH, L.P.) | | (8) | | | - | | | - | | | - | | | 2,702 | | | 46 | | | - | | | 2,748 | ||||||||||||||||||||||||
ASC Interests, LLC | | Member Units | | (8) | | | - | | | (110) | | | - | | | 1,120 | | | - | | | 110 | | | 1,010 | ||||||||||||||||||||||||
| | 13.00% Secured Debt | | (8) | | | - | | | - | | | 126 | | | 1,715 | | | 110 | | | - | | | 1,825 | ||||||||||||||||||||||||
ATS Workholding, LLC | | 5.00% Secured Debt | | (9) | | | - | | | (305) | | | - | | | 3,347 | | | - | | | 385 | | | 2,962 | ||||||||||||||||||||||||
Barfly Ventures, LLC | | Member Units | | (5) | | | - | | | 116 | | | - | | | 1,584 | | | 116 | | | - | | | 1,700 | ||||||||||||||||||||||||
| | 7.00% Secured Debt | | (5) | | | - | | | - | | | 45 | | | 343 | | | 368 | | | - | | | 711 | ||||||||||||||||||||||||
Bolder Panther Group, LLC | | 14.00% Class A Preferred Member Units | | (9) | | | - | | | - | | | 704 | | | 10,194 | | | - | | | - | | | 10,194 | ||||||||||||||||||||||||
| | 8.00% Class B Preferred Member Units | | (9) | | | - | | | 3,420 | | | 1,135 | | | 14,000 | | | 3,420 | | | - | | | 17,420 | ||||||||||||||||||||||||
| | 10.50% (L+9.00%, Floor 1.50%) Secured Debt | | (9) | | | - | | | - | | | 1,514 | | | 27,225 | | | 525 | | | 500 | | | 27,250 | ||||||||||||||||||||||||
Bond-Coat, Inc. | | | | (8) | | | (2,320) | | | 4,310 | | | - | | | 2,040 | | | 4,310 | | | 6,350 | | | - | ||||||||||||||||||||||||
Brewer Crane Holdings, LLC | | Preferred Member Units | | (9) | | | - | | | (710) | | | 367 | | | 5,850 | | | - | | | 710 | | | 5,140 | ||||||||||||||||||||||||
| | 11.00% (L+10.00%, Floor 1.00%) Secured Debt | | (9) | | | - | | | - | | | 473 | | | 8,513 | | | 10 | | | 248 | | | 8,275 | ||||||||||||||||||||||||
Bridge Capital Solutions Corporation | | 13.00% Secured Debt | | (6) | | | - | | | - | | | 925 | | | 8,403 | | | 349 | | | - | | | 8,752 | ||||||||||||||||||||||||
| | Warrants | | (6) | | | - | | | 510 | | | - | | | 3,220 | | | 510 | | | - | | | 3,730 | ||||||||||||||||||||||||
| | Preferred Member Units | | (6) | | | - | | | - | | | 50 | | | 1,000 | | | - | | | - | | | 1,000 | ||||||||||||||||||||||||
| | 13.00% Secured Debt | | (6) | | | - | | | - | | | 67 | | | 998 | | | 1 | | | - | | | 999 | ||||||||||||||||||||||||
CBT Nuggets, LLC | | Member Units | | (9) | | | - | | | 6,540 | | | 678 | | | 46,080 | | | 6,540 | | | - | | | 52,620 | ||||||||||||||||||||||||
Centre Technologies Holdings, LLC | | Preferred Member Units | | (8) | | | - | | | (320) | | | 60 | | | 6,160 | | | - | | | 320 | | | 5,840 | ||||||||||||||||||||||||
| | 12.00% (L+10.00%, Floor 2.00%) Secured Debt | | (8) | | | - | | | - | | | 667 | | | 11,549 | | | 22 | | | 1,906 | | | 9,665 | ||||||||||||||||||||||||
Chamberlin Holding LLC | | Member Units | | (8) | | | - | | | (1,420) | | | 3,559 | | | 28,070 | | | - | | | 1,420 | | | 26,650 | ||||||||||||||||||||||||
| | 9.00% (L+8.00%, Floor 1.00%) Secured Debt | | (8) | | | - | | | (22) | | | 691 | | | 15,212 | | | 22 | | | 1,417 | | | 13,817 | ||||||||||||||||||||||||
| | Member Units | | (8) | | | - | | | 110 | | | 34 | | | 1,270 | | | 110 | | | - | | | 1,380 | ||||||||||||||||||||||||
Charps, LLC | | Preferred Member Units | | (5) | | | - | | | 1,060 | | | 1,543 | | | 10,520 | | | 1,060 | | | - | | | 11,580 | ||||||||||||||||||||||||
| | 10.00% Unsecured Debt | | (5) | | | - | | | (382) | | | 683 | | | 8,475 | | | 262 | | | 3,646 | | | 5,091 | ||||||||||||||||||||||||
| | 0.15 Secured Debt | | (5) | | | - | | | - | | | 4 | | | 669 | | | - | | | 669 | | | - | ||||||||||||||||||||||||
Colonial Electric Company LLC | | Preferred Member Units | | (6) | | | - | | | - | | | 100 | | | - | | | 7,680 | | | - | | | 7,680 | ||||||||||||||||||||||||
| | 12.00% Secured Debt | | (6) | | | - | | | - | | | 1,162 | | | - | | | 24,958 | | | - | | | 24,958 | ||||||||||||||||||||||||
CompareNetworks Topco, LLC | | Preferred Member Units | | (9) | | | - | | | 3,250 | | | 158 | | | 6,780 | | | 3,250 | | | - | | | 10,030 | ||||||||||||||||||||||||
| | 10.00% (L+9.00%, Floor 1.00%) Secured Debt | | (9) | | | - | | | (9) | | | 430 | | | 7,954 | | | 9 | | | 709 | | | 7,254 | ||||||||||||||||||||||||
Copper Trail Energy Fund I, LP - CTMH | | LP Interests (CTMH, LP) | | (9) | | | - | | | - | | | - | | | 747 | | | - | | | 37 | | | 710 | ||||||||||||||||||||||||
Datacom, LLC | | Preferred Member Units | | (8) | | | (6,030) | | | 6,030 | | | - | | | - | | | 6,030 | | | 6,030 | | | - | ||||||||||||||||||||||||
| | Preferred Member Units | | (8) | | | (1,294) | | | 1,294 | | | - | | | - | | | 1,294 | | | 1,294 | | | - | ||||||||||||||||||||||||
| | 10.50% PIK Secured Debt | | (8) | | | (1,801) | | | 1,945 | | | 1 | | | 10,531 | | | 1,945 | | | 12,476 | | | - | ||||||||||||||||||||||||
| | 8.00% Secured Debt | | (8) | | | (1,800) | | | 185 | | | - | | | 1,615 | | | 185 | | | 1,800 | | | - | ||||||||||||||||||||||||
Digital Products Holdings LLC | | Preferred Member Units | | (5) | | | - | | | - | | | 100 | | | 9,835 | | | - | | | - | | | 9,835 | ||||||||||||||||||||||||
| | 11.00% (L+10.00%, Floor 1.00%) Secured Debt | | (5) | | | - | | | - | | | 1,000 | | | 18,077 | | | 22 | | | 660 | | | 17,439 | ||||||||||||||||||||||||
89
| | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | Amount of | | | | | | | | | | | | | |||||||||||||||||||||||||
| | | | | | | | | | | | Interest, | | | | | | | | | | | | | |||||||||||||||||||||||||
| | | | | | | | | | | | Fees or | | | | | | | | | | | | | |||||||||||||||||||||||||
| | | | | | Amount of | | Amount of | | Dividends | | December 31, | | | | | | | | June 30, | |||||||||||||||||||||||||||||
| | | | | | Realized | | Unrealized | | Credited to | | 2020 | | Gross | | Gross | | 2021 | |||||||||||||||||||||||||||||||
Company | Investment(1) | Amount of Realized Gain/(Loss) | Amount of Unrealized Gain/(Loss) | Amount of Interest, Fee or Dividends Credited to Income(2) | December 31, 2015 Fair Value | Gross Additions(3) | Gross Reductions(4) | September 30, 2016 Fair Value |
| Investment(1)(10)(11) |
| Geography |
| Gain/(Loss) |
| Gain/(Loss) |
| Income(2) |
| Fair Value |
| Additions(3) |
| Reductions(4) |
| Fair Value | |||||||||||||||||||||||
Garreco, LLC | | Member Units | | (8) | | | - | | | 350 | | | - | | | 1,410 | | | 350 | | | - | | | 1,760 | ||||||||||||||||||||||||
| | 9.00% (L+8.00%, Floor 1.00%, Ceiling 1.50%) Secured Debt | | (8) | | | - | | | - | | | 204 | | | 4,519 | | | - | | | - | | | 4,519 | ||||||||||||||||||||||||
Gulf Manufacturing, LLC | | Member Units | | (8) | | | - | | | 790 | | | 347 | | | 4,510 | | | 790 | | | - | | | 5,300 | ||||||||||||||||||||||||
Gulf Publishing Holdings, LLC | | 12.50% (6.25% Cash, 6.25% PIK) Secured Debt | | (8) | | | - | | | (1,752) | | | 849 | | | 12,044 | | | 849 | | | 2,171 | | | 10,722 | ||||||||||||||||||||||||
| | 10.50% (5.25% Cash, 5.25% PIK) (L+9.50%, Floor 1.00%) Secured Debt | | (8) | | | - | | | - | | | 14 | | | 250 | | | 14 | | | 7 | | | 257 | ||||||||||||||||||||||||
Harrison Hydra-Gen, Ltd. | | Common Stock | | (8) | | | - | | | (600) | | | - | | | 5,450 | | | - | | | 600 | | | 4,850 | ||||||||||||||||||||||||
J&J Services, Inc. | | Preferred Stock | | (7) | | | - | | | 370 | | | - | | | 12,680 | | | 370 | | | - | | | 13,050 | ||||||||||||||||||||||||
| | 11.50% Secured Debt | | (7) | | | - | | | (17) | | | 746 | | | 12,800 | | | 17 | | | 817 | | | 12,000 | ||||||||||||||||||||||||
KBK Industries, LLC | | Member Units | | (5) | | | - | | | 330 | | | 221 | | | 13,200 | | | 330 | | | - | | | 13,530 | ||||||||||||||||||||||||
MS Private Loan Fund | | LP Interests | | (8) | | | - | | | - | | | - | | | - | | | 285 | | | - | | | 285 | ||||||||||||||||||||||||
| | 5.00% Unsecured Debt | | (8) | | | - | | | - | | | 300 | | | - | | | 16,220 | | | - | | | 16,220 | ||||||||||||||||||||||||
MSC Income Fund Inc. | | 5.00% Unsecured Debt | | (8) | | | - | | | 210 | | | 891 | | | - | | | 39,840 | | | - | | | 39,840 | ||||||||||||||||||||||||
NAPCO Precast, LLC | | Member Units | | (8) | | | - | | | (530) | | | 81 | | | 16,100 | | | - | | | 530 | | | 15,570 | ||||||||||||||||||||||||
NRI Clinical Research, LLC | | 9.00% Secured Debt | | (9) | | | - | | | (20) | | | 262 | | | 5,620 | | | 20 | | | 865 | | | 4,775 | ||||||||||||||||||||||||
| | Member Units | | (9) | | | - | | | 2,434 | | | 399 | | | 5,600 | | | 2,434 | | | - | | | 8,034 | ||||||||||||||||||||||||
NRI Clinical Research, LLC | | Warrants | | (9) | | | - | | | 540 | | | - | | | 1,490 | | | 540 | | | - | | | 2,030 | ||||||||||||||||||||||||
NRP Jones, LLC | | Member Units | | (5) | | | - | | | 419 | | | (45) | | | 2,821 | | | 419 | | | - | | | 3,240 | ||||||||||||||||||||||||
| | 12.00% Secured Debt | | (5) | | | - | | | - | | | 126 | | | 2,080 | | | - | | | - | | | 2,080 | ||||||||||||||||||||||||
Nebraska Vet AcquireCo, LLC (NVS) | | 12.00% Secured Debt | | (5) | | | - | | | - | | | 651 | | | 10,395 | | | 9 | | | - | | | 10,404 | ||||||||||||||||||||||||
| | Preferred Member Units | | (5) | | | - | | | - | | | - | | | 6,500 | | | - | | | - | | | 6,500 | ||||||||||||||||||||||||
NexRev LLC | | Preferred Member Units | | (8) | | | - | | | 1,810 | | | 40 | | | 1,470 | | | 1,810 | | | - | | | 3,280 | ||||||||||||||||||||||||
| | 11.00% Secured Debt | | (8) | | | - | | | 178 | | | 946 | | | 16,726 | | | 197 | | | 436 | | | 16,487 | ||||||||||||||||||||||||
| | Preferred Member Units | | (5) | | | - | | | 1,570 | | | - | | | 10,780 | | | 1,570 | | | - | | | 12,350 | ||||||||||||||||||||||||
| | 11.00% Secured Debt | | (5) | | | - | | | 26 | | | 1,017 | | | 17,193 | | | 47 | | | - | | | 17,240 | ||||||||||||||||||||||||
| | 7.50% (L+6.50%, Floor 1.00%) Secured Debt | | (5) | | | - | | | - | | | 6 | | | - | | | 400 | | | 400 | | | - | ||||||||||||||||||||||||
Pearl Meyer Topco LLC | | Member Units | | (6) | | | - | | | 2,550 | | | 1,528 | | | 15,940 | | | 2,550 | | | - | | | 18,490 | ||||||||||||||||||||||||
| | 12.00% Secured Debt | | (6) | | | - | | | 272 | | | 2,170 | | | 37,202 | | | 311 | | | 3,840 | | | 33,673 | ||||||||||||||||||||||||
Pegasus Research Group, LLC | | Member Units | | (8) | | | - | | | (560) | | | - | | | 8,830 | | | - | | | 560 | | | 8,270 | ||||||||||||||||||||||||
Principle Environmental, LLC | | Warrants | | (8) | | | - | | | 330 | | | - | | | 870 | | | 330 | | | 1,200 | | | - | ||||||||||||||||||||||||
River Aggregates, LLC | | Member Units | | (8) | | | - | | | 50 | | | - | | | 3,240 | | | 50 | | | - | | | 3,290 | ||||||||||||||||||||||||
Tedder Industries, LLC | | Preferred Member Units | | (9) | | | - | | | - | | | - | | | 8,136 | | | - | | | - | | | 8,136 | ||||||||||||||||||||||||
| | 12.00% Secured Debt | | (9) | | | - | | | - | | | 960 | | | 16,300 | | | 582 | | | 1,599 | | | 15,283 | ||||||||||||||||||||||||
UnionRock Energy Fund II, LP | | LP Interests | | (9) | | | - | | | 737 | | | - | | | 2,894 | | | 2,113 | | | 220 | | | 4,787 | ||||||||||||||||||||||||
Vision Interests, Inc. | | 13.00% Secured Debt | | (9) | | | - | | | - | | | 133 | | | 2,028 | | | - | | | - | | | 2,028 | ||||||||||||||||||||||||
| | Series A Preferred Stock | | (9) | | | - | | | (160) | | | - | | | 3,160 | | | - | | | 160 | | | 3,000 | ||||||||||||||||||||||||
Other | | | | | | | - | | | - | | | - | | | - | | | - | | | - | | | - | ||||||||||||||||||||||||
Total Control Investments | | | | | | $ | (13,245) | | $ | 45,084 | | $ | 51,052 | | $ | 1,113,725 | | $ | 177,453 | | $ | 81,385 | | $ | 1,209,793 | ||||||||||||||||||||||||
Affiliate Investments | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||
AAC Holdings, Inc. | | Common Stock | | (7) | | $ | - | | $ | (1,069) | | $ | - | | $ | 3,148 | | $ | - | | $ | 1,069 | | $ | 2,079 | ||||||||||||||||||||||||
| | (L+11.00%, Floor 1.00%) Secured Debt | | (7) | | | - | | | - | | | (16) | | | - | | | - | | | - | | | - | ||||||||||||||||||||||||
| | 18.00% (10.00% Cash, 8.00% PIK) Secured Debt | | (7) | | | - | | | (89) | | | 883 | | | 9,187 | | | 401 | | | 89 | | | 9,499 | ||||||||||||||||||||||||
AAC Holdings, Inc. | | Warrants | | (7) | | | - | | | (998) | | | - | | | 2,938 | | | - | | | 998 | | | 1,940 | ||||||||||||||||||||||||
AFG Capital Group, LLC | 11% Secured Debt | $ | — | $ | (179 | ) | $ | 1,313 | $ | 12,790 | $ | 349 | $ | 13,139 | $ | — | | Preferred Member Units | | (8) | | | - | | | 1,150 | | | - | | | 5,810 | | | 1,150 | | | - | | | 6,960 | ||||||||
| Warrants | — | 130 | — | 490 | 130 | — | 620 | ||||||||||||||||||||||||||||||||||||||||||
| Member Units | — | 510 | — | 2,020 | 510 | — | 2,530 | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Barfly Ventures, LLC | 12% Secured Debt | — | (94 | ) | 862 | 4,042 | 1,813 | 94 | 5,761 | ||||||||||||||||||||||||||||||||||||||||
| Options | — | 23 | — | — | 420 | — | 420 | ||||||||||||||||||||||||||||||||||||||||||
| Warrants | — | (233 | ) | — | 473 | — | 233 | 240 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | 10.00% Secured Debt | | (8) | | | - | | | - | | | 20 | | | 491 | | | - | | | 173 | | | 318 | ||
BBB Tank Services, LLC | LIBOR Plus 7.50% (Floor 1.00%) | — | — | 6 | — | 332 | — | 332 | | Member Units | | (8) | | | - | | | (280) | | | - | | | 280 | | | - | | | 280 | | | - | ||||||||||||||||
| 12% Current / 1% PIK Secured Debt | — | — | 298 | — | 3,982 | — | 3,982 | ||||||||||||||||||||||||||||||||||||||||||
| Member Units | — | — | — | — | 800 | — | 800 | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | 15.00% PIK Preferred Stock (non-voting) | | (8) | | | - | | | (162) | | | 11 | | | 151 | | | 11 | | | 162 | | | - | ||
Boss Industries, LLC | Preferred Member Units | — | (113 | ) | 199 | 2,586 | 133 | 113 | 2,606 | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | 12.00% (L+11.00%, Floor 1.00%) Unsecured Debt | | (8) | | | - | | | - | | | 317 | | | 4,722 | | | 27 | | | - | | | 4,749 | ||
Bridge Capital Solutions | 13% Secured Debt | — | — | 984 | 6,890 | 5,660 | 7,000 | 5,550 | |||||||||||||||||||||||||||||||||||||||||
Corporation | Warrants | — | 80 | — | 1,300 | 2,012 | — | 3,312 | |||||||||||||||||||||||||||||||||||||||||
| 13% Secured Debt | — | — | 40 | — | 990 | — | 990 | ||||||||||||||||||||||||||||||||||||||||||
| Preferred Member Units | — | — | 19 | — | 1,000 | — | 1,000 | ||||||||||||||||||||||||||||||||||||||||||
Boccella Precast Products LLC | | Member Units | | (6) | | | - | | | (1,090) | | | 370 | | | 6,040 | | | - | | | 1,090 | | | 4,950 | ||||||||||||||||||||||||
Buca C, LLC | | 6.00% PIK Preferred Member Units | | (7) | | | - | | | - | | | - | | | - | | | - | | | - | | | - | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | 10.25% (L+9.25%, Floor 1.00%) Secured Debt | | (7) | | | - | | | (373) | | | 747 | | | 14,256 | | | 487 | | | 373 | | | 14,370 | ||
Buca C, LLC | LIBOR Plus 7.25% (Floor 1.00%) | — | 174 | 1,595 | 25,299 | 231 | 3,159 | 22,371 | |||||||||||||||||||||||||||||||||||||||||
| Preferred Member Units | — | 1,720 | 168 | 3,711 | 1,888 | — | 5,599 | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
CAI Software LLC | 12% Secured Debt | — | (12 | ) | 391 | 4,661 | 12 | 893 | 3,780 | ||||||||||||||||||||||||||||||||||||||||
| Member Units | — | 1,150 | 69 | 1,000 | 1,150 | — | 2,150 | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
CapFusion, LLC | 13% Secured Debt | — | — | 1,003 | — | 11,566 | — | 11,566 | |||||||||||||||||||||||||||||||||||||||||
| Warrants | — | — | — | — | 1,200 | — | 1,200 | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Chandler Signs | 12% Secured Debt | — | 41 | 456 | — | 4,500 | — | 4,500 | |||||||||||||||||||||||||||||||||||||||||
Holdings, LLC | Class A Units | — | 1,450 | 82 | — | 2,950 | — | 2,950 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Condit Exhibits, LLC | Member Units | — | 770 | 130 | 1,010 | 770 | — | 1,780 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Congruent Credit | LP Interests (Fund II) | — | (561 | ) | 400 | 2,834 | — | 1,395 | 1,439 | ||||||||||||||||||||||||||||||||||||||||
Opportunities Funds | LP Interests (Fund III) | — | 218 | 730 | 12,024 | 3,952 | — | 15,976 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Daseke, Inc. | 12% Current / 2.5% PIK Secured | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt | — | (61 | ) | 2,427 | 21,253 | 468 | 61 | 21,660 | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | — | (1,020 | ) | — | 22,660 | — | 1,020 | 21,640 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Dos Rios Partners | LP Interests (Fund) | — | (43 | ) | — | 2,031 | 2,133 | 43 | 4,121 | ||||||||||||||||||||||||||||||||||||||||
| LP Interests (Fund A) | — | (134 | ) | — | 648 | 677 | 134 | 1,191 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Dos Rios Stone Products LLC | Class A Units | — | — | 51 | — | 2,000 | — | 2,000 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
East Teak Fine Hardwoods, Inc. | Common Stock | — | — | 37 | 860 | — | — | 860 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
East West Copolymer & | 12% Secured Debt | — | — | 949 | 9,463 | 71 | — | 9,534 | |||||||||||||||||||||||||||||||||||||||||
Rubber, LLC | Warrants | — | — | — | 50 | — | — | 50 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
EIG Fund Investments | LP Interests | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| — | — | 225 | 718 | 2,070 | — | 2,788 | |||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
EIG Traverse | |||||||||||||||||||||||||||||||||||||||||||||||||
Co-Investment, L.P. | LP Interests | — | 222 | 895 | 4,755 | 5,272 | — | 10,027 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Freeport Financial Funds | LP Interests (Fund) | — | (425 | ) | 296 | 6,045 | — | 425 | 5,620 | ||||||||||||||||||||||||||||||||||||||||
| LP Interests (Fund III) | — | — | 357 | 2,077 | 1,487 | — | 3,564 | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Gault Financial, LLC (RMB | 10% Secured Debt | — | — | 1,156 | 10,930 | 123 | — | 11,053 | |||||||||||||||||||||||||||||||||||||||||
Capital, LLC) | Warrants | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Glowpoint, Inc. | 8% Secured Debt | — | — | 17 | 397 | 1 | 398 | — | |||||||||||||||||||||||||||||||||||||||||
| 12% Secured Debt | — | (2,305 | ) | 843 | 8,929 | 17 | 2,307 | 6,639 | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | — | (1,680 | ) | — | 3,840 | — | 1,680 | 2,160 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Guerdon Modular | LIBOR Plus 8.50% (Floor 1.00%) | — | — | 20 | (15 | ) | 975 | 960 | — | ||||||||||||||||||||||||||||||||||||||||
Holdings, Inc. | 9% Current / 4% PIK Secured Debt | — | — | 1,080 | 10,295 | 181 | — | 10,476 | |||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | — | — | — | — | 1,140 | — | 1,140 | ||||||||||||||||||||||||||||||||||||||||||
| Common Stock | — | (1,910 | ) | — | 1,990 | — | 1,910 | 80 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Houston Plating and Coatings, LLC | Member Units | — | (4,493 | ) | (23 | ) | 8,440 | 433 | 4,493 | 4,380 | |||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
I-45 SLF LLC | Member units | — | 386 | 1,196 | 7,200 | 5,386 | — | 12,586 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Indianhead Pipeline | 12% Secured Debt | — | — | 609 | 5,853 | 95 | 675 | 5,273 | |||||||||||||||||||||||||||||||||||||||||
Services, LLC | Preferred Member Units | — | 338 | 31 | 2,302 | 368 | — | 2,670 | |||||||||||||||||||||||||||||||||||||||||
| Warrants | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Member Units | (1,254 | ) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
KBK Industries, LLC | 10% Secured Debt | — | — | 23 | — | 1,000 | 300 | 700 | |||||||||||||||||||||||||||||||||||||||||
| 12.5% Secured Debt | — | (25 | ) | 572 | 5,900 | 11 | 25 | 5,886 | |||||||||||||||||||||||||||||||||||||||||
| Member Units | — | (590 | ) | (8 | ) | 3,680 | — | 590 | 3,090 | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
L.F. Manufacturing Holdings, LLC | Member Units | — | (105 | ) | — | 1,485 | — | 105 | 1,380 | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
MPS Denver, LLC | Member Units | — | — | — | 1,130 | 124 | 1,254 | — | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
OnAsset Intelligence, Inc. | 12% PIK Secured Debt | — | — | 378 | 4,006 | 378 | — | 4,384 | |||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | — | (1,380 | ) | — | 1,380 | — | 1,380 | — | |||||||||||||||||||||||||||||||||||||||||
| Warrants | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
90
Company | Investment(1) | Amount of Realized Gain/(Loss) | Amount of Unrealized Gain/(Loss) | Amount of Interest, Fee or Dividends Credited to Income(2) | December 31, 2015 Fair Value | Gross Additions(3) | Gross Reductions(4) | September 30, 2016 Fair Value | |||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
OPI International Ltd. | 10% Unsecured Debt | — | — | 36 | 473 | — | — | 473 | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | — | — | — | 3,200 | — | — | 3,200 | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
PCI Holding Company, Inc. | 12% Secured Debt | — | 112 | 946 | — | 13,000 | — | 13,000 | |||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | — | (297 | ) | 450 | 4,887 | 450 | 297 | 5,040 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Radial Drilling Services Inc. | 12% Secured Debt | (1,433 | ) | 2,441 | 20 | 1,500 | 2,461 | 3,961 | — | ||||||||||||||||||||||||||||||||||||||||
| Warrants | (760 | ) | 758 | — | — | 758 | 758 | — | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Rocaceia, LLC (Quality | |||||||||||||||||||||||||||||||||||||||||||||||||
Lease and Rental | 12% Secured Debt | — | — | — | 250 | — | — | 250 | |||||||||||||||||||||||||||||||||||||||||
Holdings, LLC) | Preferred Member Units | (2 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Samba Holdings, Inc. | 12.5% Secured Debt | — | (110 | ) | 1,100 | 24,662 | 110 | 24,772 | — | ||||||||||||||||||||||||||||||||||||||||
| Common Stock | 28,709 | (28,133 | ) | — | 30,220 | — | 30,220 | — | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Tin Roof Acquisition Company | 12% Secured Debt | — | — | 1,304 | 13,807 | 45 | 313 | 13,539 | |||||||||||||||||||||||||||||||||||||||||
| Class C Preferred Stock | — | — | 193 | 2,477 | 193 | — | 2,670 | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
UniTek Global Services, Inc. | LIBOR Plus 7.50% (Floor 1.00%) | — | — | 192 | 2,812 | 1 | — | 2,813 | |||||||||||||||||||||||||||||||||||||||||
| LIBOR Plus 8.50% (Floor 1.00%) | — | — | 86 | 1,255 | 7 | 447 | 815 | ||||||||||||||||||||||||||||||||||||||||||
| 15% PIK Unsecured Debt | — | — | 82 | 638 | 76 | — | 714 | ||||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | — | 165 | 495 | 5,540 | 660 | — | 6,200 | ||||||||||||||||||||||||||||||||||||||||||
| Common Stock | — | 2,580 | — | — | 2,580 | — | 2,580 | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Universal Wellhead Services Holdings, LLC | Class A Preferred Units | — | (1,840 | ) | — | 3,000 | — | 1,840 | 1,160 | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Valley Healthcare | LIBOR Plus 12.50% (Floor 0.50%) | — | — | 1,069 | 10,297 | 425 | 100 | 10,622 | |||||||||||||||||||||||||||||||||||||||||
Group, LLC | Preferred Member Units | — | — | — | — | 1,600 | — | 1,600 | |||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Volusion, LLC | 10.5% Secured Debt | — | — | 1,591 | 16,199 | 192 | — | 16,391 | |||||||||||||||||||||||||||||||||||||||||
| Preferred Member Units | — | — | — | 14,000 | — | — | 14,000 | ||||||||||||||||||||||||||||||||||||||||||
| Warrants | — | — | — | 1,400 | — | — | 1,400 | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||||||||||||||||
Amounts related to investments transferred to or from other 1940 Act classification during the period | — | — | (345 | ) | (15,530 | ) | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||
| $ | 25,260 | $ | (32,475 | ) | $ | 27,095 | $ | 350,519 | $ | 93,318 | $ | 106,494 | $ | 352,873 | |||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Amount of | | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Interest, | | | | | | | | | | | | | |||
Total Non-Control/Non-Affiliate investments | $ | (22,452 | ) | $ | 23,560 | $ | 63,841 | ||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fees or | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | | | | | | | | | Amount of | | Amount of | | Dividends | | December 31, | | | | | | | | June 30, | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | Realized | | Unrealized | | Credited to | | 2020 | | Gross | | Gross | | 2021 | |||||||||||||
Total Portfolio Investments | $ | 35,028 | $ | (29,738 | ) | $ | 131,334 | ||||||||||||||||||||||||||||||||||||||||||
Company |
| Investment(1)(10)(11) |
| Geography |
| Gain/(Loss) |
| Gain/(Loss) |
| Income(2) |
| Fair Value |
| Additions(3) |
| Reductions(4) |
| Fair Value | |||||||||||||||||||||||||||||||
CAI Software LLC | | Member Units | | (6) | | | - | | | 6,741 | | | 1,900 | | | 7,190 | | | 6,741 | | | 1,921 | | | 12,010 | ||||||||||||||||||||||||
| | 12.50% Secured Debt | | (6) | | | - | | | 37 | | | 3,350 | | | 47,474 | | | 23,600 | | | 3,353 | | | 67,721 | ||||||||||||||||||||||||
Chandler Signs Holdings, LLC | | Class A Units | | (8) | | | - | | | (810) | | | - | | | 1,460 | | | - | | | 810 | | | 650 | ||||||||||||||||||||||||
Classic H&G Holdings, LLC | | Preferred Member Units | | (6) | | | - | | | 2,250 | | | 570 | | | 9,510 | | | 2,250 | | | - | | | 11,760 | ||||||||||||||||||||||||
| | 10.00% Secured Debt | | (6) | | | - | | | (64) | | | 1,412 | | | 24,800 | | | 64 | | | 5,590 | | | 19,274 | ||||||||||||||||||||||||
Congruent Credit Opportunities Funds | | LP Interests (Fund II) | | (8) | | | (4,449) | | | 4,355 | | | - | | | 94 | | | 4,355 | | | 4,449 | | | - | ||||||||||||||||||||||||
| | LP Interests (Congruent Credit Opportunities Fund | | (8) | | | - | | | (178) | | | 389 | | | 11,540 | | | - | | | 178 | | | 11,362 | ||||||||||||||||||||||||
Copper Trail Energy Fund I, LP | | LP Interests (Copper Trail Energy Fund I, LP) | | (9) | | | - | | | 61 | | | 319 | | | 1,782 | | | 61 | | | - | | | 1,843 | ||||||||||||||||||||||||
Dos Rios Partners | | LP Interests (Dos Rios Partners, LP) | | (8) | | | - | | | 1,608 | | | - | | | 5,417 | | | 1,608 | | | - | | | 7,025 | ||||||||||||||||||||||||
| | LP Interests (Dos Rios Partners - A, LP) | | (8) | | | - | | | 510 | | | - | | | 1,720 | | | 510 | | | - | | | 2,230 | ||||||||||||||||||||||||
Dos Rios Stone Products LLC | | Class A Preferred Units | | (8) | | | - | | | (230) | | | - | | | 1,250 | | | - | | | 230 | | | 1,020 | ||||||||||||||||||||||||
EIG Fund Investments | | LP Interests (EIG Global Private Debt Fund-A, L.P.) | | (8) | | | 8 | | | 92 | | | 33 | | | 526 | | | 126 | | | 166 | | | 486 | ||||||||||||||||||||||||
East Teak Fine Hardwoods, Inc. | | Common Stock | | (7) | | | - | | | 130 | | | - | | | 300 | | | 130 | | | - | | | 430 | ||||||||||||||||||||||||
Freeport Financial SBIC Fund LP | | LP Interests (Freeport Financial SBIC Fund LP) | | (5) | | | - | | | 386 | | | - | | | 5,264 | | | 386 | | | - | | | 5,650 | ||||||||||||||||||||||||
| | LP Interests (Freeport First Lien Loan Fund III LP) | | (5) | | | - | | | - | | | 455 | | | 10,321 | | | - | | | 2,317 | | | 8,004 | ||||||||||||||||||||||||
GFG Group, LLC. | | Preferred Member Units | | (5) | | | - | | | - | | | 290 | | | - | | | 4,900 | | | - | | | 4,900 | ||||||||||||||||||||||||
| | 12.00% Secured Debt | | (5) | | | - | | | - | | | 822 | | | - | | | 15,626 | | | 3,200 | | | 12,426 | ||||||||||||||||||||||||
HPEP 3, L.P. | | LP Interests (HPEP 3, L.P.) | | (8) | | | - | | | 531 | | | - | | | 3,258 | | | 905 | | | - | | | 4,163 | ||||||||||||||||||||||||
Hawk Ridge Systems, LLC | | Preferred Member Units | | (9) | | | - | | | 2,600 | | | 691 | | | 8,030 | | | 2,600 | | | - | | | 10,630 | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | Preferred Member Units | | (9) | | | - | | | 140 | | | - | | | 420 | | | 140 | | | - | | | 560 | ||||||
| | | | | | | | | | | | | | | | | | 9.50% Secured Debt | | (9) | | | - | | | (17) | | | 919 | | | 18,400 | | | 17 | | | 17 | | | 18,400 | |||||||||
| | | | | | | | | | | | | | | | | | | | | 9.50% Secured Debt | | (9) | | | - | | | - | | | 4 | | | - | | | - | | | - | | | - | ||||||
Houston Plating and Coatings, LLC | | 8.00% Unsecured Convertible Debt | | (8) | | | - | | | - | | | 121 | | | 2,900 | | | - | | | - | | | 2,900 | ||||||||||||||||||||||||
| | Member Units | | (8) | | | - | | | (1,560) | | | 2 | | | 5,080 | | | - | | | 1,560 | | | 3,520 | ||||||||||||||||||||||||
I-45 SLF LLC | | Member Units (Fully diluted 20.0%; 24.40% profits | | (8) | | | - | | | 877 | | | 935 | | | 15,789 | | | 1,677 | | | 2,000 | | | 15,466 | ||||||||||||||||||||||||
L.F. Manufacturing Holdings, LLC | | Member Units | | (8) | | | - | | | (140) | | | - | | | 2,050 | | | - | | | 140 | | | 1,910 | ||||||||||||||||||||||||
| | 14.00% PIK Preferred Member Units (non-voting) | | (8) | | | - | | | - | | | 7 | | | 93 | | | 7 | | | - | | | 100 | ||||||||||||||||||||||||
OnAsset Intelligence, Inc. | | 12.00% PIK Secured Debt | | (8) | | | - | | | - | | | 447 | | | 7,301 | | | 447 | | | - | | | 7,748 | ||||||||||||||||||||||||
| | Common Stock | | (8) | | | - | | | (830) | | | - | | | - | | | 830 | | | 830 | | | - | ||||||||||||||||||||||||
| | 10.00% PIK Unsecured Debt | | (8) | | | - | | | - | | | 3 | | | 64 | | | 6 | | | 3 | | | 67 | ||||||||||||||||||||||||
OnAsset Intelligence, Inc. | | Warrants | | (8) | | | - | | | 830 | | | - | | | - | | | 830 | | | 830 | | | - | ||||||||||||||||||||||||
Rocaceia, LLC (Quality Lease and Rental Holdings, LLC) | | 12.00% Secured Debt | | (8) | | | (356) | | | - | | | - | | | - | | | - | | | - | | | - | ||||||||||||||||||||||||
SI East, LLC (Stavig) | | Preferred Member Units | | (7) | | | - | | | 5,250 | | | - | | | 9,780 | | | 5,250 | | | - | | | 15,030 | ||||||||||||||||||||||||
| | 8.75% Secured Debt | | (7) | | | - | | | (60) | | | 1,456 | | | 32,961 | | | 57 | | | 3,847 | | | 29,171 | ||||||||||||||||||||||||
Slick Innovations, LLC | | 12.00% Secured Debt | | (6) | | | - | | | (23) | | | 362 | | | 5,720 | | | 23 | | | 343 | | | 5,400 | ||||||||||||||||||||||||
| | Common Stock | | (6) | | | - | | | 180 | | | - | | | 1,330 | | | 180 | | | - | | | 1,510 | ||||||||||||||||||||||||
| | Warrants | | (6) | | | - | | | 40 | | | - | | | 360 | | | 40 | | | - | | | 400 | ||||||||||||||||||||||||
Superior Rigging & Erecting Co. | | Preferred Member Units | | (7) | | | - | | | - | | | - | | | 4,499 | | | - | | | - | | | 4,499 | ||||||||||||||||||||||||
| | 12.00% Secured Debt | | (7) | | | - | | | - | | | 1,314 | | | 21,298 | | | 17 | | | - | | | 21,315 | ||||||||||||||||||||||||
UniTek Global Services, Inc. | | 20.00% PIK Preferred Stock | | (6) | | | - | | | (239) | | | 149 | | | 2,833 | | | 149 | | | 239 | | | 2,743 | ||||||||||||||||||||||||
| | 20.00% PIK Preferred Stock | | (6) | | | - | | | (375) | | | - | | | 374 | | | - | | | 374 | | | - | ||||||||||||||||||||||||
| | 15.00% PIK Secured Debt | | (6) | | | - | | | 355 | | | 61 | | | - | | | 1,550 | | | 42 | | | 1,508 | ||||||||||||||||||||||||
| | 8.50% (6.50% cash, 2.00% PIK) (2.00% PIK, L+5.50% Floor 1.00%) Secured Debt | | (6) | | | - | | | 62 | | | 130 | | | 2,426 | | | 163 | | | 442 | | | 2,147 | ||||||||||||||||||||||||
Volusion, LLC | | 8.00% Unsecured Convertible Debt | | (8) | | | - | | | 118 | | | 16 | | | 291 | | | 118 | | | - | | | 409 | ||||||||||||||||||||||||
| | 11.50% Secured Debt | | (8) | | | - | | | 992 | | | 1,170 | | | 19,243 | | | 991 | | | - | | | 20,234 | ||||||||||||||||||||||||
91
This schedule should be read in conjunction with Main Street's consolidated financial statements, including the consolidated schedule of investments and notes to the consolidated financial statements.
| | | | | | | | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | Amount of | | | | | | | | | | | | | |
| | | | | | | | | | | | Interest, | | | | | | | | | | | | | |
| | | | | | | | | | | | Fees or | | | | | | | | | | | | | |
| | | | | | Amount of | | Amount of | | Dividends | | December 31, | | | | | | | | June 30, | |||||
| | | | | | Realized | | Unrealized | | Credited to | | 2020 | | Gross | | Gross | | 2021 | |||||||
Company |
| Investment(1)(10)(11) |
| Geography |
| Gain/(Loss) |
| Gain/(Loss) |
| Income(2) |
| Fair Value |
| Additions(3) |
| Reductions(4) |
| Fair Value | |||||||
| | Preferred Member Units | | (8) | | | - | | | - | | | - | | | 5,990 | | | - | | | - | | | 5,990 |
Other | | | | | | | 13,907 | | | (4,476) | | | 2,852 | | | 20,140 | | | 2,591 | | | 22,731 | | | - |
Total Affiliate investments | | | | | | $ | 9,110 | | $ | 16,232 | | $ | 22,511 | | $ | 366,301 | | $ | 81,021 | | $ | 59,846 | | $ | 387,476 |
| (1) | The principal amount, the ownership detail for equity investments and if the investment is income producing is included in the consolidated schedule of investments. |
| (2) | Represents the total amount of interest, fees and dividends credited to income for the portion of the period for which an investment was included in Control or Affiliate categories, respectively. For investments transferred between Control and Affiliate categories during the period, any income or investment balances related to the time period it was in the category other than the one shown at period end is included in “Amounts from investments transferred from other 1940 Act classifications during the period.” |
| (3) | Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments and accrued PIK interest, and the exchange of one or more existing securities for one or more new securities. Gross additions also include net increases in unrealized appreciation or net decreases in net unrealized depreciation as well as the movement of an existing portfolio company into this category and out of a different category. |
| (4) | Gross reductions include decreases in the cost basis of investments resulting from principal repayments or sales and the exchange of one or more existing securities for one or more new securities. Gross reductions also include net increases in net unrealized depreciation or net decreases in unrealized appreciation as well as the movement of an existing portfolio company out of this category and into a different category. |
| (5) | Portfolio company located in the Midwest region as determined by location of the corporate headquarters. The fair value as of June 30, 2021 for control investments located in this region was $256,063. This represented 16.0% of net assets as of June 30, 2021. The fair value as of June 30, 2021 for affiliate investments located in this region was $30,980. This represented 1.9% of net assets as of June 30, 2021. |
| (6) | Portfolio company located in the Northeast region as determined by location of the corporate headquarters. The fair value as of June 30, 2021 for control investments located in this region was $111,907. This represented 7.0% of net assets as of June 30, 2021. The fair value as of June 30, 2021 for affiliate investments located in this region was $129,419. This represented 8.1% of net assets as of June 30, 2021. |
| (7) | Portfolio company located in the Southeast region as determined by location of the corporate headquarters. The fair value as of June 30, 2021 for control investments located in this region was $42,591. This represented 2.7% of net assets as of June 30, 2021. The fair value as of June 30, 2021 for affiliate investments located in this region was $98,336. This represented 6.1% of net assets as of June 30, 2021. |
| (8) | Portfolio company located in the Southwest region as determined by location of the corporate headquarters. The fair value as of June 30, 2021 for control investments located in this region was $499,378. This represented 31.1% of net assets as of June 30, 2021. The fair value as of June 30, 2021 for affiliate investments located in this region was $97,305. This represented 6.1% of net assets as of June 30, 2021. |
92
| (9) | Portfolio company located in the West region as determined by location of the corporate headquarters. The fair value as of June 30, 2021 for control investments located in this region was $299,854. This represented 18.7% of net assets as of June 30, 2021. The fair value as of June 30, 2021 for affiliate investments located in this region was $31,433. This represented 2.0% of net assets as of June 30, 2021. |
| (10) | All of the Company’s portfolio investments are generally subject to restrictions on resale as “restricted securities,” unless otherwise noted. |
| (11) | This schedule should be read in conjunction with the consolidated schedule of investments and notes to the consolidated financial statements. Supplemental information can be located within the schedule of investments including end of period interest rate, preferred dividend rate, maturity date, investments not paid currently in cash and investments whose value was determined using significant unobservable inputs. |
| (12) | Investment has an unfunded commitment as of June 30, 2021 (see Note K). The fair value of the investment includes the impact of the fair value of any unfunded commitments. |
93
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments in and Advances to Affiliates
June 30, 2020
(dollars in thousands)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | Amount of | | | | | | | | | | | | | |
| | | | | | | | | | | | Interest, | | | | | | | | | | | | | |
| | | | | | | | | | | | Fees or | | | | | | | | | | | | | |
| | | | | | Amount of | | Amount of | | Dividends | | December 31, | | | | | | | | June 30, | |||||
| | | | | | Realized | | Unrealized | | Credited to | | 2019 | | Gross | | Gross | | 2020 | |||||||
Company |
| Investment(1)(10)(11) |
| Geography |
| Gain/(Loss) |
| Gain/(Loss) |
| Income(2) |
| Fair Value |
| Additions(3) |
| Reductions(4) |
| Fair Value | |||||||
Majority‑owned investments | | | | | | | | | | | | | | | | | | | | | | | | | |
Café Brazil, LLC | | Member Units | | (8) | | $ | - | | $ | (260) | | $ | 38 | | $ | 2,440 | | $ | - | | $ | 260 | | $ | 2,180 |
California Splendor Holdings LLC | | LIBOR Plus 8.00% (Floor 1.00%) | | (9) | | | - | | | (40) | | | 354 | | | 7,104 | | | 14,270 | | | 5,840 | | | 15,534 |
| | LIBOR Plus 10.00% (Floor 1.00%) | | (9) | | | - | | | (65) | | | 1,689 | | | 27,801 | | | 26 | | | 65 | | | 27,762 |
| | Preferred Member Units | | (9) | | | - | | | - | | | 543 | | | 7,163 | | | 543 | | | - | | | 7,706 |
| | Preferred Member Units | | (9) | | | - | | | (1,601) | | | 125 | | | 7,382 | | | - | | | 1,601 | | | 5,781 |
Clad-Rex Steel, LLC | | LIBOR Plus 9.50% (Floor 1.00%) | | (5) | | | - | | | 49 | | | 599 | | | 10,781 | | | 60 | | | - | | | 10,841 |
| | Member Units | | (5) | | | - | | | (1,020) | | | 245 | | | 9,630 | | | - | | | 1,020 | | | 8,610 |
| | 10% Secured Debt | | (5) | | | - | | | (11) | | | 57 | | | 1,137 | | | - | | | 24 | | | 1,113 |
| | Member Units | | (5) | | | - | | | - | | | - | | | 460 | | | - | | | - | | | 460 |
CMS Minerals Investments | | Member Units | | (9) | | | - | | | (136) | | | - | | | 1,900 | | | - | | | 262 | | | 1,638 |
Cody Pools, Inc. | | LIBOR Plus 10.50% (Floor 1.75%) | | (8) | | | - | | | - | | | 822 | | | - | | | 15,850 | | | 200 | | | 15,650 |
| | Preferred Member Units | | (8) | | | - | | | - | | | 29 | | | - | | | 8,317 | | | - | | | 8,317 |
CompareNetworks Topco, LLC | | LIBOR Plus 11.00% (Floor 1.00%) | | (9) | | | - | | | - | | | 517 | | | 8,288 | | | 12 | | | 350 | | | 7,950 |
| | Preferred Member Units | | (9) | | | - | | | 1,070 | | | - | | | 3,010 | | | 1,070 | | | - | | | 4,080 |
Direct Marketing Solutions, Inc. | | LIBOR Plus 11.00% (Floor 1.00%) | | (9) | | | - | | | (9) | | | 990 | | | 15,707 | | | 27 | | | 487 | | | 15,247 |
| | Preferred Stock | | (9) | | | - | | | (140) | | | - | | | 20,200 | | | - | | | 140 | | | 20,060 |
Gamber-Johnson Holdings, LLC | | LIBOR Plus 6.50% (Floor 2.00%) | | (5) | | | - | | | (11) | | | 856 | | | 19,022 | | | 1,611 | | | 795 | | | 19,838 |
| | Member Units | | (5) | | | - | | | (170) | | | 2,608 | | | 53,410 | | | - | | | 170 | | | 53,240 |
GRT Rubber Technologies LLC | | LIBOR Plus 7.00% | | (8) | | | - | | | - | | | 681 | | | 15,016 | | | 1,759 | | | - | | | 16,775 |
| | Member Units | | (8) | | | - | | | (2,020) | | | 1,341 | | | 47,450 | | | - | | | 2,020 | | | 45,430 |
Guerdon Modular Holdings, Inc. | | 16.00% Secured Debt | | (9) | | | (12,776) | | | 12,588 | | | - | | | - | | | 12,776 | | | 12,776 | | | - |
| | LIBOR Plus 8.50% (Floor 1.00%) | | (9) | | | (993) | | | 1,010 | | | - | | | - | | | 993 | | | 993 | | | - |
| | Preferred Stock | | (9) | | | (1,140) | | | 1,140 | | | - | | | - | | | 1,140 | | | 1,140 | | | - |
| | Common Stock | | (9) | | | (2,849) | | | 2,983 | | | - | | | - | | | 2,849 | | | 2,849 | | | - |
| | Warrants | | (9) | | | - | | | - | | | - | | | - | | | - | | | - | | | - |
Harborside Holdings, LLC | | Member Units | | (8) | | | - | | | (2,000) | | | - | | | 9,560 | | | 100 | | | 2,000 | | | 7,660 |
IDX Broker, LLC | | 11.00% Secured Debt | | (9) | | | - | | | (42) | | | 711 | | | 13,400 | | | 42 | | | 13,442 | | | - |
| | Preferred Member Units | | (9) | | | 9,337 | | | (9,088) | | | 1,193 | | | 15,040 | | | - | | | 15,040 | | | - |
Jensen Jewelers of Idaho, LLC | | Prime Plus 6.75% (Floor 2.00%) | | (9) | | | - | | | (56) | | | 225 | | | 4,000 | | | 6 | | | 206 | | | 3,800 |
| | Member Units | | (9) | | | - | | | (1,000) | | | 111 | | | 8,270 | | | - | | | 1,000 | | | 7,270 |
Kickhaefer Manufacturing Company, LLC | | 9.50% Current/2.00% PIK Secured Debt | | (5) | | | - | | | - | | | 1,493 | | | 24,982 | | | 1,261 | | | 946 | | | 25,297 |
| | Member Units | | (5) | | | - | | | (790) | | | - | | | 12,240 | | | - | | | 790 | | | 11,450 |
| | 9.00% Secured Debt | | (5) | | | - | | | - | | | 179 | | | 3,939 | | | - | | | 15 | | | 3,924 |
| | Member Units | | (5) | | | - | | | - | | | 45 | | | 1,160 | | | - | | | - | | | 1,160 |
Market Force Information, LLC | | 12.00% PIK Secured Debt | | (9) | | | - | | | (11,068) | | | 304 | | | 25,316 | | | 2,885 | | | 13,946 | | | 14,255 |
| | Member Units | | (9) | | | - | | | (5,280) | | | - | | | 5,280 | | | - | | | 5,280 | | | - |
MH Corbin Holding LLC | | 13.00% Secured Debt | | (5) | | | - | | | (76) | | | 592 | | | 8,890 | | | 16 | | | 236 | | | 8,670 |
| | Preferred Member Units | | (5) | | | - | | | (20) | | | - | | | 20 | | | - | | | 20 | | | - |
| | Preferred Member Units | | (5) | | | - | | | (1,340) | | | - | | | 4,770 | | | - | | | 1,340 | | | 3,430 |
Mid-Columbia Lumber Products, LLC | | 10.00% Secured Debt | | (9) | | | - | | | - | | | 44 | | | 1,602 | | | 148 | | | 1,750 | | | - |
| | 12.00% Secured Debt | | (9) | | | - | | | - | | | 119 | | | 3,644 | | | 256 | | | 3,900 | | | - |
| | Member Units | | (9) | | | (27) | | | (1,000) | | | 1 | | | - | | | 1,027 | | | 1,027 | | | - |
| | 9.50% Secured Debt | | (9) | | | - | | | - | | | 30 | | | 701 | | | 19 | | | 720 | | | - |
| | Member Units | | (9) | | | - | | | (219) | | | 20 | | | 1,640 | | | 709 | | | 219 | | | 2,130 |
MSC Adviser I, LLC | | Member Units | | (8) | | | - | | | (5,440) | | | 1,056 | | | 74,520 | | | - | | | 5,440 | | | 69,080 |
Mystic Logistics Holdings, LLC | | 10.00% Secured Debt | | (6) | | | - | | | - | | | 404 | | | 6,253 | | | 985 | | | 279 | | | 6,959 |
| | Common Stock | | (6) | | | - | | | 1,980 | | | - | | | 8,410 | | | 1,980 | | | - | | | 10,390 |
OMi Holdings, Inc. | | Common Stock | | (8) | | | - | | | 1,080 | | | 543 | | | 16,950 | | | 1,080 | | | - | | | 18,030 |
Pearl Meyer Topco LLC | | 12.00% Secured Debt | | (6) | | | - | | | - | | | 1,151 | | | - | | | 34,663 | | | - | | | 34,663 |
| | Member Units | | (6) | | | - | | | - | | | - | | | - | | | 13,800 | | | 800 | | | 13,000 |
PPL RVs, Inc. | | LIBOR Plus 8.75% PIK (Floor 0.50%) | | (8) | | | - | | | - | | | 664 | | | 12,118 | | | 136 | | | 250 | | | 12,004 |
94
| | | | | | | | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | Amount of | | | | | | | | | | | | | |
| | | | | | | | | | | | Interest, | | | | | | | | | | | | | |
| | | | | | | | | | | | Fees or | | | | | | | | | | | | | |
| | | | | | Amount of | | Amount of | | Dividends | | December 31, | | | | | | | | June 30, | |||||
| | | | | | Realized | | Unrealized | | Credited to | | 2019 | | Gross | | Gross | | 2020 | |||||||
Company |
| Investment(1)(10)(11) |
| Geography |
| Gain/(Loss) |
| Gain/(Loss) |
| Income(2) |
| Fair Value |
| Additions(3) |
| Reductions(4) |
| Fair Value | |||||||
| | Common Stock | | (8) | | | - | | | 1,210 | | | - | | | 9,930 | | | 1,210 | | | - | | | 11,140 |
| | 13.00% Secured Debt | | (8) | | | - | | | 55 | | | 440 | | | 6,397 | | | - | | | - | | | 6,397 |
Principle Environmental, LLC | | Preferred Member Units | | (8) | | | - | | | (480) | | | - | | | 13,390 | | | - | | | 480 | | | 12,910 |
| | Warrants | | (8) | | | - | | | (20) | | | - | | | 1,090 | | | - | | | 20 | | | 1,070 |
Quality Lease Service, LLC | | Member Units | | (7) | | | - | | | (3,810) | | | - | | | 9,289 | | | 301 | | | 3,810 | | | 5,780 |
Trantech Radiator Topco, LLC | | 12.00% Secured Debt | | (7) | | | - | | | 74 | | | 557 | | | 9,102 | | | 85 | | | 320 | | | 8,867 |
| | Common Stock | | (7) | | | - | | | 3,025 | | | 58 | | | 4,655 | | | 3,025 | | | - | | | 7,680 |
Vision Interests, Inc. | | 13.00% Secured Debt | | (9) | | | - | | | - | | | 133 | | | 2,028 | | | - | | | - | | | 2,028 |
| | Series A Preferred Stock | | (9) | | | - | | | (629) | | | - | | | 4,089 | | | - | | | 629 | | | 3,460 |
| | Common Stock | | (9) | | | (3,586) | | | 3,296 | | | - | | | 409 | | | 3,296 | | | 3,705 | | | - |
Ziegler’s NYPD, LLC | | 6.50% Secured Debt | | (8) | | | - | | | (101) | | | 33 | | | 1,000 | | | - | | | 101 | | | 899 |
| | 12.00% Secured Debt | | (8) | | | - | | | - | | | 38 | | | 625 | | | - | | | - | | | 625 |
| | 14.00% Secured Debt | | (8) | | | - | | | (384) | | | 195 | | | 2,750 | | | - | | | 384 | | | 2,366 |
| | Warrants | | (8) | | | - | | | - | | | - | | | - | | | - | | | - | | | - |
| | Preferred Member Units | | (8) | | | - | | | (130) | | | - | | | 1,269 | | | - | | | 130 | | | 1,139 |
Other controlled investments | | | | | | | | | | | | | | | | | | | | | | | | | |
Access Media Holdings, LLC | | 10.00% PIK Secured Debt | | (5) | | | - | | | (2,450) | | | 25 | | | 6,387 | | | - | | | 2,450 | | | 3,937 |
| | Preferred Member Units | | (5) | | | - | | | - | | | - | | | (284) | | | - | | | - | | | (284) |
| | Member Units | | (5) | | | - | | | - | | | - | | | - | | | - | | | - | | | - |
Analytical Systems Keco, LLC | | LIBOR Plus 10.00% (Floor 2.00%) | | (8) | | | - | | | - | | | 366 | | | 5,210 | | | 36 | | | 270 | | | 4,976 |
| | Preferred Member Units | | (8) | | | - | | | 690 | | | - | | | 3,200 | | | 690 | | | - | | | 3,890 |
| | Warrants | | (8) | | | - | | | 194 | | | - | | | 316 | | | 194 | | | - | | | 510 |
ASC Interests, LLC | | 13.00% Secured Debt | | (8) | | | - | | | - | | | 115 | | | 1,639 | | | - | | | 33 | | | 1,606 |
| | Member Units | | (8) | | | - | | | (240) | | | - | | | 1,290 | | | - | | | 240 | | | 1,050 |
ATS Workholding, LLC | | 5.00% Secured Debt | | (9) | | | - | | | (619) | | | 187 | | | 4,521 | | | 63 | | | 619 | | | 3,965 |
| | Preferred Member Units | | (9) | | | - | | | (939) | | | - | | | 939 | | | - | | | 939 | | | - |
Bond-Coat, Inc. | | 15.00% Secured Debt | | (8) | | | - | | | - | | | 1,399 | | | 11,473 | | | 123 | | | 11,596 | | | - |
| | Common Stock | | (8) | | | - | | | (1,470) | | | - | | | 8,300 | | | - | | | 1,470 | | | 6,830 |
Brewer Crane Holdings, LLC | | LIBOR Plus 10.00% (Floor 1.00%) | | (9) | | | - | | | - | | | 518 | | | 8,989 | | | 10 | | | 248 | | | 8,751 |
| | Preferred Member Units | | (9) | | | - | | | - | | | 50 | | | 4,280 | | | - | | | - | | | 4,280 |
Bridge Capital Solutions Corporation | | 13.00% Secured Debt | | (6) | | | - | | | - | | | 868 | | | 7,797 | | | 288 | | | - | | | 8,085 |
| | Warrants | | (6) | | | - | | | (180) | | | - | | | 3,500 | | | - | | | 180 | | | 3,320 |
| | 13.00% Secured Debt | | (6) | | | - | | | - | | | 67 | | | 996 | | | 1 | | | - | | | 997 |
| | Preferred Member Units | | (6) | | | - | | | - | | | 50 | | | 1,000 | | | - | | | - | | | 1,000 |
CBT Nuggets, LLC | | Member Units | | (9) | | | - | | | (4,790) | | | 454 | | | 50,850 | | | - | | | 4,790 | | | 46,060 |
Centre Technologies Holdings, LLC | | LIBOR Plus 10.00% (Floor 2.00%) | | (8) | | | - | | | - | | | 743 | | | 12,136 | | | 13 | | | 306 | | | 11,843 |
| | Preferred Member Units | | (8) | | | - | | | - | | | 60 | | | 5,840 | | | - | | | - | | | 5,840 |
Chamberlin Holding LLC | | LIBOR Plus 10.00% (Floor 1.00%) | | (8) | | | - | | | (17) | | | 1,054 | | | 17,773 | | | 17 | | | 17 | | | 17,773 |
| | Member Units | | (8) | | | - | | | 110 | | | 1,485 | | | 24,040 | | | 110 | | | - | | | 24,150 |
| | Member Units | | (8) | | | - | | | (530) | | | 34 | | | 1,450 | | | - | | | 530 | | | 920 |
Charps, LLC | | 15.00% Secured Debt | | (5) | | | - | | | - | | | 152 | | | 2,000 | | | - | | | - | | | 2,000 |
| | Preferred Member Units | | (5) | | | - | | | 1,210 | | | 311 | | | 6,920 | | | 1,210 | | | - | | | 8,130 |
Copper Trail Fund Investments | | LP Interests (CTMH, LP) | | (9) | | | - | | | - | | | - | | | 872 | | | - | | | 110 | | | 762 |
Datacom, LLC | | 8.00% Secured Debt | | (8) | | | - | | | - | | | - | | | 1,615 | | | - | | | - | | | 1,615 |
| | 10.50% PIK Secured Debt | | (8) | | | - | | | - | | | - | | | 10,142 | | | - | | | - | | | 10,142 |
| | Class A Preferred Member Units | | (8) | | | - | | | - | | | - | | | - | | | - | | | - | | | - |
| | Class B Preferred Member Units | | (8) | | | - | | | - | | | - | | | - | | | - | | | - | | | - |
Digital Products Holdings LLC | | LIBOR Plus 10.00% (Floor 1.00%) | | (5) | | | - | | | 350 | | | 1,123 | | | 18,452 | | | 373 | | | 660 | | | 18,165 |
| | Preferred Member Units | | (5) | | | - | | | (579) | | | 100 | | | 5,174 | | | - | | | 579 | | | 4,595 |
Garreco, LLC | | LIBOR Plus 8.00% (Floor 1.00%, Ceiling 1.50%) | | (8) | | | - | | | - | | | 220 | | | 4,515 | | | 4 | | | - | | | 4,519 |
| | Member Units | | (8) | | | - | | | (860) | | | - | | | 2,560 | | | - | | | 860 | | | 1,700 |
Gulf Manufacturing, LLC | | Member Units | | (8) | | | - | | | (2,630) | | | 119 | | | 7,430 | | | - | | | 2,630 | | | 4,800 |
Gulf Publishing Holdings, LLC | | LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 5.25% / 5.25% PIK | | (8) | | | - | | | - | | | 14 | | | 280 | | | 3 | | | 40 | | | 243 |
| | 6.25% Current / 6.25% PIK | | (8) | | | - | | | (1,091) | | | 809 | | | 12,493 | | | 214 | | | 1,091 | | | 11,616 |
| | Member Units | | (8) | | | - | | | (2,420) | | | - | | | 2,420 | | | - | | | 2,420 | | | - |
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| | | | | | | | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | Amount of | | | | | | | | | | | | | |
| | | | | | | | | | | | Interest, | | | | | | | | | | | | | |
| | | | | | | | | | | | Fees or | | | | | | | | | | | | | |
| | | | | | Amount of | | Amount of | | Dividends | | December 31, | | | | | | | | June 30, | |||||
| | | | | | Realized | | Unrealized | | Credited to | | 2019 | | Gross | | Gross | | 2020 | |||||||
Company |
| Investment(1)(10)(11) |
| Geography |
| Gain/(Loss) |
| Gain/(Loss) |
| Income(2) |
| Fair Value |
| Additions(3) |
| Reductions(4) |
| Fair Value | |||||||
Harris Preston Fund Investments | | LP Interests (2717 MH, L.P.) | | (8) | | | - | | | (180) | | | - | | | 3,157 | | | - | | | 180 | | | 2,977 |
Harrison Hydra-Gen, Ltd. | | Common Stock | | (8) | | | - | | | (2,330) | | | 104 | | | 7,970 | | | - | | | 2,330 | | | 5,640 |
J&J Services, Inc. | | 11.50% Secured Debt | | (7) | | | - | | | 135 | | | 1,053 | | | 17,430 | | | 170 | | | 2,400 | | | 15,200 |
| | Preferred Stock | | (7) | | | - | | | 2,815 | | | - | | | 7,160 | | | 2,815 | | | 75 | | | 9,900 |
KBK Industries, LLC | | Member Units | | (5) | | | - | | | (2,330) | | | 437 | | | 15,470 | | | - | | | 2,330 | | | 13,140 |
NAPCO Precast, LLC | | Member Units | | (8) | | | - | | | (3,830) | | | 4 | | | 14,760 | | | - | | | 3,830 | | | 10,930 |
NexRev LLC | | 11.00% PIK Secured Debt | | (8) | | | - | | | (1,701) | | | 913 | | | 17,469 | | | 182 | | | 1,919 | | | 15,732 |
| | Preferred Member Units | | (8) | | | - | | | (6,310) | | | - | | | 6,310 | | | - | | | 6,310 | | | - |
NRI Clinical Research, LLC | | 10.50% Secured Debt | | (9) | | | - | | | (17) | | | 394 | | | 5,981 | | | 1,536 | | | 517 | | | 7,000 |
| | Warrants | | (9) | | | - | | | 160 | | | - | | | 1,230 | | | 160 | | | - | | | 1,390 |
| | Member Units | | (9) | | | - | | | 333 | | | 377 | | | 4,988 | | | 710 | | | 377 | | | 5,321 |
NRP Jones, LLC | | 12.00% Secured Debt | | (5) | | | - | | | - | | | 387 | | | 6,376 | | | - | | | - | | | 6,376 |
| | Member Units | | (5) | | | - | | | (1,590) | | | 25 | | | 4,710 | | | - | | | 1,590 | | | 3,120 |
NuStep, LLC | | 12.00% Secured Debt | | (5) | | | - | | | - | | | 1,218 | | | 19,703 | | | 21 | | | 160 | | | 19,564 |
| | Preferred Member Units | | (5) | | | - | | | - | | | - | | | 10,200 | | | - | | | - | | | 10,200 |
Pegasus Research Group, LLC | | Member Units | | (8) | | | - | | | 1,790 | | | 491 | | | 8,170 | | | 1,790 | | | - | | | 9,960 |
River Aggregates, LLC | | Zero Coupon Secured Debt | | (8) | | | - | | | - | | | - | | | 722 | | | - | | | - | | | 722 |
| | Member Units | | (8) | | | - | | | 1,170 | | | 187 | | | 4,990 | | | 1,170 | | | - | | | 6,160 |
| | Member Units | | (8) | | | - | | | 151 | | | - | | | 3,169 | | | 151 | | | - | | | 3,320 |
Tedder Industries, LLC | | 12.00% Secured Debt | | (9) | | | - | | | - | | | 41 | | | 640 | | | - | | | - | | | 640 |
| | 12.00% Secured Debt | | (9) | | | - | | | - | | | 1,009 | | | 16,272 | | | 14 | | | - | | | 16,286 |
| | Preferred Member Units | | (9) | | | - | | | - | | | - | | | 8,136 | | | - | | | - | | | 8,136 |
UnionRock Energy Fund II, LP | | LP Interests | | (9) | | | - | | | - | | | - | | | - | | | 2,894 | | | - | | | 2,894 |
Other | | | | | | | (7,832) | | | 4,656 | | | 4 | | | 4,564 | | | | | | | | | |
Total Control Investments | | | | | | $ | (19,866) | | $ | (42,235) | | $ | 38,800 | | $ | 1,032,721 | | $ | 143,295 | | $ | 163,313 | | $ | 1,008,139 |
Affiliate Investments | | | | | | | | | | | | | | | | | | | | | | | | | |
AFG Capital Group, LLC | | 10.00% Secured Debt | | (8) | | $ | - | | $ | - | | $ | 37 | | $ | 838 | | $ | - | | $ | 174 | | $ | 664 |
| | Preferred Member Units | | (8) | | | - | | | (10) | | | - | | | 5,180 | | | - | | | 10 | | | 5,170 |
American Trailer Rental Group LLC | | LIBOR Plus 7.25% (Floor 1.00%) | | (5) | | | - | | | (182) | | | 1,119 | | | 27,087 | | | 182 | | | 27,269 | | | - |
| | Member Units | | (5) | | | - | | | 779 | | | - | | | 8,540 | | | 4,520 | | | - | | | 13,060 |
BBB Tank Services, LLC | | LIBOR Plus 11.00% (Floor 1.00%) | | (8) | | | - | | | (51) | | | 335 | | | 4,698 | | | 37 | | | 51 | | | 4,684 |
| | Preferred Member Units | | (8) | | | - | | | - | | | 10 | | | 131 | | | 10 | | | - | | | 141 |
| | Member Units | | (8) | | | - | | | (80) | | | - | | | 290 | | | - | | | 80 | | | 210 |
Boccella Precast Products LLC | | LIBOR Plus 10.00% (Floor 1.00%) | | (6) | | | - | | | (138) | | | 982 | | | 13,244 | | | 138 | | | 13,382 | | | - |
| | Member Units | | (6) | | | - | | | (290) | | | 369 | | | 6,270 | | | - | | | 290 | | | 5,980 |
Buca C, LLC | | LIBOR Plus 9.25% (Floor 1.00%) | | (7) | | | - | | | (1,714) | | | 1,036 | | | 18,794 | | | 24 | | | 1,714 | | | 17,104 |
| | Preferred Member Units | | (7) | | | - | | | (4,005) | | | 69 | | | 4,701 | | | 69 | | | 4,005 | | | 765 |
CAI Software LLC | | 12.50% Secured Debt | | (6) | | | - | | | 108 | | | 996 | | | 9,160 | | | 19,500 | | | 16 | | | 28,644 |
| | Member Units | | (6) | | | - | | | 369 | | | 10 | | | 5,210 | | | 720 | | | - | | | 5,930 |
Chandler Signs Holdings, LLC | | Class A Units | | (8) | | | - | | | (200) | | | (91) | | | 2,740 | | | - | | | 200 | | | 2,540 |
Charlotte Russe, Inc | | Common Stock | | (9) | | | - | | | - | | | - | | | - | | | - | | | - | | | - |
Classic H&G Holdings, LLC | | 12.00% Secured Debt | | (6) | | | - | | | - | | | 1,518 | | | - | | | 25,753 | | | - | | | 25,753 |
| | Preferred Member Units | | (6) | | | - | | | - | | | - | | | - | | | 5,760 | | | - | | | 5,760 |
Congruent Credit Opportunities Funds | | LP Interests (Fund II) | | (8) | | | - | | | - | | | - | | | 855 | | | - | | | - | | | 855 |
| | LP Interests (Fund III) | | (8) | | | - | | | (399) | | | 394 | | | 13,915 | | | - | | | 1,411 | | | 12,504 |
Copper Trail Fund Investments | | LP Interests (Copper Trail Energy Fund I, LP) | | (9) | | | - | | | (791) | | | 594 | | | 2,362 | | | - | | | 540 | | | 1,822 |
Dos Rios Partners | | LP Interests (Dos Rios Partners, LP) | | (8) | | | - | | | (504) | | | - | | | 7,033 | | | 759 | | | 504 | | | 7,288 |
| | LP Interests (Dos Rios Partners - A, LP) | | (8) | | | - | | | (160) | | | - | | | 2,233 | | | 241 | | | 160 | | | 2,314 |
East Teak Fine Hardwoods, Inc. | | Common Stock | | (7) | | | - | | | (100) | | | 4 | | | 400 | | | - | | | 100 | | | 300 |
EIG Fund Investments | | LP Interests (EIG Global Private Debt fund-A, L.P.) | | (8) | | | 6 | | | (111) | | | 69 | | | 720 | | | 94 | | | 219 | | | 595 |
Freeport Financial Funds | | LP Interests (Freeport Financial SBIC Fund LP) | | (5) | | | - | | | (624) | | | - | | | 5,778 | | | - | | | 624 | | | 5,154 |
96
| | | | | | | | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | Amount of | | | | | | | | | | | | | |
| | | | | | | | | | | | Interest, | | | | | | | | | | | | | |
| | | | | | | | | | | | Fees or | | | | | | | | | | | | | |
| | | | | | Amount of | | Amount of | | Dividends | | December 31, | | | | | | | | June 30, | |||||
| | | | | | Realized | | Unrealized | | Credited to | | 2019 | | Gross | | Gross | | 2020 | |||||||
Company |
| Investment(1)(10)(11) |
| Geography |
| Gain/(Loss) |
| Gain/(Loss) |
| Income(2) |
| Fair Value |
| Additions(3) |
| Reductions(4) |
| Fair Value | |||||||
| | LP Interests (Freeport First Lien Loan Fund III LP) | | (5) | | | - | | | 46 | | | 80 | | | 9,696 | | | 1,035 | | | 160 | | | 10,571 |
Fuse, LLC | | 12.00% Secured Debt | | (9) | | | - | | | (338) | | | 118 | | | 1,939 | | | - | | | 338 | | | 1,601 |
| | Common Stock | | (9) | | | - | | | - | | | - | | | 256 | | | - | | | - | | | 256 |
Harris Preston Fund Investments | | LP Interests (HPEP 3, L.P.) | | (8) | | | - | | | - | | | - | | | 2,474 | | | 345 | | | - | | | 2,819 |
Hawk Ridge Systems, LLC | | LIBOR Plus 6.00% (Floor 1.00%) | | (9) | | | - | | | - | | | 25 | | | 600 | | | - | | | - | | | 600 |
| | 11.00% Secured Debt | | (9) | | | - | | | (15) | | | 760 | | | 13,400 | | | 15 | | | 15 | | | 13,400 |
| | Preferred Member Units | | (9) | | | - | | | (580) | | | 45 | | | 7,900 | | | - | | | 580 | | | 7,320 |
| | Preferred Member Units | | (9) | | | - | | | (30) | | | - | | | 420 | | | - | | | 30 | | | 390 |
Houston Plating and Coatings, LLC | | 8.00% Unsecured Convertible Debt | | (8) | | | - | | | (1,000) | | | 121 | | | 4,260 | | | - | | | 1,000 | | | 3,260 |
| | Member Units | | (8) | | | - | | | (3,110) | | | 66 | | | 10,330 | | | - | | | 3,110 | | | 7,220 |
I-45 SLF LLC | | Member Units | | (8) | | | - | | | (3,654) | | | 1,258 | | | 14,407 | | | 3,200 | | | 3,654 | | | 13,953 |
L.F. Manufacturing Holdings, LLC | | Preferred Member Units | | (8) | | | - | | | - | | | 6 | | | 81 | | | 6 | | | - | | | 87 |
| | Member Units | | (8) | | | - | | | - | | | - | | | 2,050 | | | - | | | - | | | 2,050 |
OnAsset Intelligence, Inc. | | 12.00% PIK Secured Debt | | (8) | | | - | | | - | | | 399 | | | 6,474 | | | 399 | | | - | | ��� | 6,873 |
| | 10.00% PIK Secured Debt | | (8) | | | - | | | - | | | 3 | | | 58 | | | 3 | | | - | | | 61 |
| | Preferred Stock | | (8) | | | - | | | - | | | - | | | - | | | - | | | - | | | - |
| | Warrants | | (8) | | | - | | | - | | | - | | | - | | | - | | | - | | | - |
PCI Holding Company, Inc. | | 12.00% Current Secured Debt | | (9) | | | - | | | - | | | 689 | | | 11,356 | | | - | | | - | | | 11,356 |
| | Preferred Stock | | (9) | | | - | | | 1,450 | | | - | | | 2,680 | | | 1,450 | | | - | | | 4,130 |
| | Preferred Stock | | (9) | | | - | | | - | | | - | | | 4,350 | | | - | | | - | | | 4,350 |
Rocaceia, LLC (Quality Lease and Rental Holdings, LLC) | | 12.00% Secured Debt | | (8) | | | - | | | - | | | - | | | - | | | 241 | | | 241 | | | - |
| | Preferred Member Units | | (8) | | | - | | | - | | | - | | | - | | | - | | | - | | | - |
Salado Stone Holdings, LLC | | Class A Preferred Units | | (8) | | | - | | | (140) | | | - | | | 570 | | | - | | | 140 | | | 430 |
SI East, LLC | | 9.50% Current, Secured Debt | | (7) | | | - | | | (36) | | | 1,633 | | | 32,963 | | | 36 | | | 36 | | | 32,963 |
| | Preferred Member Units | | (7) | | | - | | | 1,110 | | | 534 | | | 8,200 | | | 1,110 | | | - | | | 9,310 |
Slick Innovations, LLC | | 14.00% Current, Secured Debt | | (6) | | | - | | | - | | | 468 | | | 6,197 | | | 19 | | | 80 | | | 6,136 |
| | Warrants | | (6) | | | - | | | 10 | | | - | | | 290 | | | 10 | | | - | | | 300 |
| | Common Stock | | (6) | | | - | | | 50 | | | - | | | 1,080 | | | 50 | | | - | | | 1,130 |
UniTek Global Services, Inc. | | LIBOR Plus 6.50% (Floor 1.00%) | | (6) | | | - | | | (283) | | | 121 | | | 2,962 | | | 14 | | | 299 | | | 2,677 |
| | Preferred Stock | | (6) | | | - | | | (2,680) | | | - | | | 2,684 | | | - | | | 2,680 | | | 4 |
| | Preferred Stock | | (6) | | | - | | | (212) | | | 212 | | | 2,282 | | | 212 | | | 212 | | | 2,282 |
| | Preferred Stock | | (6) | | | - | | | 448 | | | 118 | | | 1,889 | | | 944 | | | - | | | 2,833 |
| | Preferred Stock | | (6) | | | - | | | (3,009) | | | - | | | 3,667 | | | - | | | 3,009 | | | 658 |
| | Common Stock | | (6) | | | - | | | - | | | - | | | - | | | - | | | - | | | - |
Universal Wellhead Services Holdings, LLC | | Preferred Member Units | | (8) | | | - | | | (560) | | | - | | | 800 | | | - | | | 560 | | | 240 |
| | Member Units | | (8) | | | - | | | - | | | - | | | - | | | - | | | - | | | - |
Volusion, LLC | | 11.50% Secured Debt | | (8) | | | - | | | (181) | | | 1,248 | | | 19,352 | | | 72 | | | 181 | | | 19,243 |
| | 8.00% Unsecured Convertible Debt | | (8) | | | - | | | - | | | 16 | | | 291 | | | - | | | - | | | 291 |
| | Preferred Member Units | | (8) | | | - | | | (8,322) | | | - | | | 14,000 | | | - | | | 8,322 | | | 5,678 |
| | Warrants | | (8) | | | - | | | (150) | | | - | | | 150 | | | - | | | 150 | | | - |
Other | | | | | | | (241) | | | - | | | - | | | - | | | - | | | - | | | - |
Total Affiliate investments | | | | | | $ | (235) | | $ | (29,289) | | $ | 15,371 | | $ | 330,287 | | $ | 66,968 | | $ | 75,546 | | $ | 321,709 |
| (1) | The principal amount, the ownership detail for equity investments and if the investment is income producing is included in the consolidated schedule of investments. |
| (2) | Represents the total amount of interest, fees and dividends credited to income for the portion of the period for which an investment was included in Control or Affiliate categories, respectively. For investments transferred between Control and Affiliate categories during the period, any income or investment balances related to the time period it was in the category other than the one shown at period end is included in “Amounts from investments transferred from other 1940 Act classifications during the period.” |
97
| (3) | Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments and accrued PIK interest, and the exchange of one or more existing securities for one or more new securities. Gross additions also include net increases in unrealized appreciation or net decreases in net unrealized depreciation as well as the movement of an existing portfolio company into this category and out of a different category. |
| (4) | Gross reductions include decreases in the cost basis of investments resulting from principal repayments or sales and the exchange of one or more existing securities for one or more new securities. Gross reductions also include net increases in net unrealized depreciation or net decreases in unrealized appreciation as well as the movement of an existing portfolio company out of this category and into a different category. |
| (5) | Portfolio company located in the Midwest region as determined by location of the corporate headquarters. The fair value as of June 30, 2020 for control investments located in this region was $236,976. This represented 17.3% of net assets as of June 30, 2020. The fair value as of June 30, 2020 for affiliate investments located in this region was $28,785. This represented 2.1% of net assets as of June 30, 2020. |
| (6) | Portfolio company located in the Northeast region as determined by location of the corporate headquarters. The fair value as of June 30, 2020 for control investments located in this region was $78,414. This represented 5.7% of net assets as of June 30, 2020. The fair value as of June 30, 2020 for affiliate investments located in this region was $88,087. This represented 6.4% of net assets as of June 30, 2020. |
| (7) | Portfolio company located in the Southeast region as determined by location of the corporate headquarters. The fair value as of June 30, 2020 for control investments located in this region was $47,427. This represented 3.5% of net assets as of June 30, 2020. The fair value as of June 30, 2020 for affiliate investments located in this region was $60,442. This represented 4.4% of net assets as of June 30, 2020. |
| (8) | Portfolio company located in the Southwest region as determined by location of the corporate headquarters. The fair value as of June 30, 2020 for control investments located in this region was $401,136. This represented 29.3% of net assets as of June 30, 2020. The fair value as of June 30, 2020 for affiliate investments located in this region was $99,170. This represented 7.2% of net assets as of June 30, 2020. |
| (9) | Portfolio company located in the West region as determined by location of the corporate headquarters. The fair value as of June 30, 2020 for control investments located in this region was $244,186. This represented 17.8% of net assets as of June 30, 2020. The fair value as of June 30, 2020 for affiliate investments located in this region was $45,225. This represented 3.3% of net assets as of June 30, 2020. |
| (10) | All of the Company’s portfolio investments are generally subject to restrictions on resale as “restricted securities,” unless otherwise noted. |
| (11) | This schedule should be read in conjunction with the consolidated schedule of investments and notes to the consolidated financial statements. Supplemental information can be located within the schedule of investments including end of period interest rate, preferred dividend rate, maturity date, investments not paid currently in cash and investments whose value was determined using significant unobservable inputs. |
| (12) | Investment has an unfunded commitment as of June 30, 2020 (see Note K). The fair value of the investment includes the impact of the fair value of any unfunded commitments. |
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Item 2. MANAGEMENT'SMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information in this sectionThis Quarterly Report on Form 10-Q contains forward-looking statements regarding the plans and objectives of management for future operations and which relate to future events or our future performance or financial condition. Any such forward-looking statements may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that involve risksmay be incorrect, and uncertainties. Please see "Risk Factors"we cannot assure you that the projections included in these forward-looking statements will come to pass. Our actual results could differ materially from those expressed or implied by the forward-looking statements as a result of various factors, including, without limitation: changes in laws and "Cautionary Statement Concerning Forward-Looking Statements"regulations and adverse changes in the economy generally or in the industries in which our portfolio companies operate, including with respect to changes from the impact of the COVID-19 pandemic, and the resulting impacts on our and our portfolio companies’ business and operations, liquidity and access to capital; and such other factors referenced in Item 1A entitled “Risk Factors” below in Part 2 of this Quarterly Report on Form 10-Q, if any, and discussed in Item 1A entitled “Risk Factors” in Part I of our Annual Report on Form 10-K for the year ended December 31, 2016,2020, filed with the Securities and Exchange Commission (the "SEC"(“SEC”) on February 24, 2017, for a discussion of the uncertainties, risks26, 2021 and assumptions associated with these statements. You should read the following discussion in conjunction with the consolidated financial statements and related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our other SEC filings.
We have based the forward-looking statements included in the Annualthis Quarterly Report on Form 10-K for10-Q on information available to us on the year ended December 31, 2016.date of this Quarterly Report on Form 10-Q, and we assume no obligation to update any such forward-looking statements, unless we are required to do so by applicable law. However, you are advised to refer to any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including subsequent periodic and current reports.
ORGANIZATION
ORGANIZATION
Main Street Capital Corporation ("MSCC"(“MSCC” or “Main Street”) is a principal investment firm primarily focused on providing customized debt and equity financing to lower middle market ("LMM") companies and debt capital to middle market ("Middle Market") companies. The portfolio investments of MSCC and its consolidated subsidiaries are typically made to support management buyouts, recapitalizations, growth financings, refinancings and acquisitions of companies that operate in a variety of industry sectors. MSCC seeks to partner with entrepreneurs, business owners and management teams and generally provides "one stop" financing alternatives within its LMM portfolio. MSCC and its consolidated subsidiaries invest primarily in secured debt investments, equity investments, warrants and other securities of LMM companies based in the United States and in secured debt investments of Middle Market companies generally headquartered in the United States.
MSCC was formed in March 2007 to operate as an internally managed business development company ("BDC") under the Investment Company Act of 1940, as amended (the "1940 Act").firm. MSCC wholly owns several investment funds, including Main Street Mezzanine Fund, LP ("MSMF"), Main Street Capital II, LP ("MSC II"(“MSMF”) and Main Street Capital III, LP ("(“MSC III"III” and, collectively with MSMF, and MSC II, the "Funds"“Funds”), and each of their general partners.
COVID-19 UPDATE
The Funds are each licensed as a Small Business Investment Company ("SBIC")COVID-19 pandemic, and the related effect on the U.S. and global economies, has had, and threatens to continue to have, adverse consequences for our business and operating results, and the businesses and operating results of our portfolio companies. During the quarter ended June 30, 2021, we continued to work collectively with our employees and portfolio companies to navigate the significant challenges created by the United States Small Business Administration ("SBA"). Because MSCC is internally managed, allCOVID-19 pandemic. We remain focused on ensuring the safety of our employees and the employees of our portfolio companies, while also managing our ongoing business activities. In this regard, we remain heavily engaged with our portfolio companies. As discussed below under “Discussion and Analysis of Results of Operations,” our investment income, principally our interest and dividend income, was negatively impacted by the economic effects of the executive officersCOVID-19 pandemic in 2020. We continue to maintain access to multiple sources of liquidity, including cash, unused capacity under our Credit Facility and other employees are employed by MSCC. Therefore, MSCC doesremaining SBIC debenture capacity. As of June 30, 2021, we were in compliance with all debt covenants and do not payanticipate any external investment advisory fees, but instead directly incursissues with our ability to comply with all covenants in the operating costs associated with employing investmentfuture. Refer to “—Liquidity and portfolioCapital Resources” below for further discussion as of June 30, 2021.
Neither our management professionals.
MSC Adviser I, LLC (the "External Investment Manager") was formed in November 2013 as a wholly owned subsidiarynor our Board of MSCCDirectors is able to provide investment managementpredict the full impact of the COVID-19 pandemic, including its duration and other services to parties other than MSCC and its subsidiaries or their portfolio companies ("External Parties") and receives fee income for such services. MSCC has been granted no-action relief by the Securities and Exchange Commission ("SEC") to allow the External Investment Manager to register as a registered investment adviser under the Investment Advisers Act of 1940, as amended. Since the External Investment Manager conducts allmagnitude of its investment management activities for External Parties, it is accounted for as a portfolio investment of MSCCeconomic and is not included as a consolidated subsidiary of MSCC in MSCC's consolidated financial statements.
MSCC has electedsocietal impact. As such, while we will continue to be treated formonitor the evolving situation and guidance from U.S. authorities, including federal, income tax purposes as a regulated investment company ("RIC") under Subchapter M ofstate and local public health authorities, we are unable to predict with any certainty the Internal Revenue Code of 1986, as amended (the "Code"). As a result, MSCC generallyextent to which the outbreak will not pay corporate-level U.S. federal income taxes on any net ordinary taxable income or capital gains that it distributes to its stockholders.negatively affect our
MSCC has certain direct and indirect wholly owned subsidiaries that have elected to be taxable entities (the "Taxable Subsidiaries"). The primary purpose of the Taxable Subsidiaries is to permit MSCC to hold equity investments in portfolio companies which are "pass-through" entities for tax purposes.99
Unless otherwise notedportfolio companies’ operating results and financial condition or the context otherwise indicates,impact that such disruptions may have on our results of operations and financial condition in the terms "we," "us," "our," the "Company" and "Main Street" refer to MSCC and its consolidated subsidiaries, which include the Funds and the Taxable Subsidiaries.future.
OVERVIEW
Our principal investment objective is to maximize our portfolio'sportfolio’s total return by generating current income from our debt investments and capital appreciation from our equity and equity-related investments, including warrants, convertible securities and other rights to acquire equity securities in a portfolio company. We seek to achieve this objective by primarily focusing on providing customized debt and equity financing to lower middle market (“LMM”) companies and debt capital to middle market (“Middle Market”) companies. Our LMM companies generally have annual revenues between $10 million and $150 million, and our LMM portfolio investments generally range in size from $5 million to $50 million. Our Middle Market investments are made in businesses that are generally larger in size than our LMM portfolio companies, with annual revenues typically between $150 million and $1.5 billion, and our Middle Market investments generally range in size from $3 million to $15$20 million. Our private loan ("(“Private Loan"Loan”) portfolio investments are primarily debt securities in privately held companies whichthat have been originated through strategic relationships with other investment funds on a collaborative basis.basis and are often referred to in the debt markets as “club deals.” Private Loan investments are typically similar in size, structure, terms and conditions to investments we hold in our LMM portfolio and Middle Market portfolio.
We seek to fill the financing gap for LMM businesses, which, historically, have had more limited access to financing from commercial banks and other traditional sources. The underserved nature of the LMM creates the opportunity for us to meet the financing needs of LMM companies while also negotiating favorable transaction terms and equity participations. Our ability to invest across a company'scompany’s capital structure, from secured loans to equity securities, allows us to offer portfolio companies a comprehensive suite of financing options, or a "one stop"“one stop” financing solution. Providing customized, "one stop"“one stop” financing solutions is important to LMM portfolio companies. We generally seek to partner directly with entrepreneurs, management teams and business owners in making our investments. Our LMM portfolio debt investments are generally secured by a first lien on the assets of the portfolio company and typically have a term of between five and seven years from the original investment date.
Our Middle Market portfolio investments primarily consist of direct investments in or secondary purchases of interest-bearing debt securities in privately held companies based in the United States that are generally larger in size than the companies included in our LMM portfolio. Our Middle Market portfolio debt investments are generally secured by either a first or second priority lien on the assets of the portfolio company and typically have an expected duration of between three and seven years from the original investment date.
Our Private Loan portfolio investments are primarily debt securities in privately held companies which have been originated through strategic relationships with other investment funds on a collaborative basis, and are often referred to in the debt markets as "club deals." Private Loan investments are typically similar in size, structure, terms and conditions to investments we hold in our LMM portfolio and Middle Market portfolio. Our Private Loan portfolio debt investments are generally secured by either a first or second priority lien on the assets of the portfolio company and typically have a term of between three and seven years from the original investment date.
Our other portfolio ("(“Other Portfolio"Portfolio”) investments primarily consist of investments whichthat are not consistent with the typical profiles for our LMM, Middle Market or Private Loan portfolio investments, including investments which may be managed by third parties. In our Other Portfolio, we may incur indirect fees and expenses in connection with investments managed by third parties, such as investments in other investment companies or private funds.
Subject to changes in our cash and overall liquidity, as well as our capital structure management activities, our Investment Portfolio may also include short-term portfolio investments that are atypical of our LMM, Middle Market and Private Loan portfolio investments in that they are intended to be a short-term deployment of capital. These assets are typically expected to be liquidated in one year or less and are not expected to be a significant portion of the overall Investment Portfolio.
Our external asset management business is conducted through the ExternalMSC Adviser I, LLC (the “External Investment Manager.Manager”). The External Investment Manager earns management fees based on the assets of the funds under management for external parties and may earn incentive fees, or a carried interest, based on the performance of the funds
assets managed. We have entered into an agreement with the External Investment Manager to share employees in connection with its asset management business generally, and specifically for its relationship with MSC Income Fund, Inc. (“MSC Income”), formerly known as HMS Income Fund, Inc. ("HMS Income")., and its other investment advisory clients. Through this agreement, we share
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employees with the External Investment Manager, including their related infrastructure, business relationships, management expertise and capital raising capabilities.
During May 2012, we entered into an investment sub advisory agreement with HMS Adviser, LP (“HMS Adviser”), which was the investment adviser to MSC Income at the time, to provide certain investment advisory services to HMS Adviser. In December 2013, after obtaining required no action relief from the SEC to allow us to own a registered investment adviser, we assigned the sub advisory agreement to the External Investment Manager since the fees received from such arrangement could otherwise have negative consequences on our ability to meet the source of income requirement necessary for us to maintain our RIC tax treatment. Under the investment sub advisory agreement, the External Investment Manager was entitled to 50% of the annual base management fee and the incentive fees earned by HMS Adviser under its advisory agreement with MSC Income. Effective October 30, 2020, the External Investment Manager and HMS Adviser consummated the transactions contemplated by that certain asset purchase agreement by and among the External Investment Manager, HMS Adviser and the other parties thereto whereby the External Investment Manager became the sole investment adviser and administrator to MSC Income pursuant to an Investment Advisory and Administrative Services Agreement entered into between the External Investment Manager and MSC Income (the “Advisory Agreement”). The following tablesAdvisory Agreement includes a 1.75% annual management fee, reduced from 2.00% previously, and the same incentive fee as under MSC Income’s prior advisory agreement with HMS Adviser, with the External Investment Manager receiving 100% of such fee income (increased from 50% previously).
In April 2014, we received an exemptive order from the SEC permitting co-investments by us and MSC Income in certain negotiated transactions where co-investing would otherwise be prohibited under the 1940 Act. During December 2020, we received an amended exemptive order from the SEC permitting co-investments by us, MSC Income and other funds advised by the External Investment Manager in certain negotiated transactions where co-investing would otherwise be prohibited under the 1940 Act. We have made co-investments with MSC Income and the Private Loan Fund (as defined below), and in the future intend to make co-investments with MSC Income, the Private Loan Fund and other funds advised by the External Investment Manager, in accordance with the conditions of the order. The order requires, among other things, that we and the External Investment Manager consider whether each such investment opportunity is appropriate for us and the External Investment Manager’s advised clients, including MSC Income, as applicable, and if it is appropriate, to propose an allocation of the investment opportunity between such parties. Because the External Investment Manager may receive performance-based fee compensation from funds advised by the External Investment Manager, including MSC Income and the Private Loan Fund, this may provide the Company and the External Investment Manager an incentive to allocate opportunities to other participating funds instead of us. However, both we and the External Investment Manager have policies and procedures in place to manage this conflict, including oversight by the independent members of our Board of Directors.
The External Investment Manager launched its first private fund, MS Private Loan Fund I, LP, a private investment fund with a strategy to co-invest with Main Street in Private Loan portfolio investments (the “Private Loan Fund”), in December 2020. The External Investment Manager entered into an Investment Management Agreement in December 2020 with the Private Loan Fund, pursuant to which the External Investment Manager provides investment advisory and management services to the Private Loan Fund in exchange for an asset-based fee and certain incentive fees.
The External Investment Manager earned base management fee income of $4.2 million and $2.3 million during the three months ended June 30, 2021 and 2020, respectively, and $8.1 million and $4.8 million during the six months ended June 30, 2021 and 2020, respectively. No incentive fee income was earned in the three months or the six months ended June 30, 2021 and 2020.
We allocate certain expenses to the External Investment Manager pursuant to the sharing agreement between it and MSCC. Our total expenses are net of expenses allocated to the External Investment Manager for the three months ended June 30, 2021 and 2020 of $2.6 million and $1.8 million, respectively, and for the six months ended June 30, 2021 and 2020 of $5.0 million and $3.4 million, respectively. The total contribution of the External Investment Manager to our net investment income consists of the combination of the expenses allocated to the External Investment Manager and the dividend income earned from the External Investment Manager. The total contribution to our net investment income was $3.8 million and $2.2 million for the three months ended June 30, 2021 and 2020, respectively, and $7.4 million and $4.5 million for the six months ended June 30, 2021 and 2020, respectively.
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See “Note C – Fair Value Hierarchy for Investments and Debentures – Portfolio Composition – Investment Portfolio Composition” in the notes to consolidated financial statements for a summary of ourMain Street’s investments in the LMM, Middle Market and Private Loan portfolios as of SeptemberJune 30, 20172021 and December 31, 2016 (this information excludes the Other Portfolio investments and the External Investment Manager which are discussed further below):
| | As of September 30, 2017 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| | LMM(a) | Middle Market | Private Loan | |||||||
| | (dollars in millions) | |||||||||
Number of portfolio companies | 71 | 68 | 56 | |||||||
Fair value | $ | 938.0 | $ | 607.5 | $ | 485.9 | ||||
Cost | $ | 804.6 | $ | 633.8 | $ | 505.6 | ||||
% of portfolio at cost—debt | 68.1% | 96.9% | 94.5% | |||||||
% of portfolio at cost—equity | 31.9% | 3.1% | 5.5% | |||||||
% of debt investments at cost secured by first priority lien | 96.3% | 90.2% | 91.5% | |||||||
Weighted-average annual effective yield(b) | 11.9% | 8.7% | 9.3% | |||||||
Average EBITDA(c) | $ | 4.3 | $ | 84.8 | $ | 38.0 | ||||
EBITDA is not a meaningful valuation metric for our investments in these portfolio companies, and those portfolio companies whose primary purpose is to own real estate.
| | As of December 31, 2016 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| | LMM(a) | Middle Market | Private Loan | |||||||
| | (dollars in millions) | |||||||||
Number of portfolio companies | 73 | 78 | 46 | |||||||
Fair value | $ | 892.6 | $ | 630.6 | $ | 342.9 | ||||
Cost | $ | 760.3 | $ | 646.8 | $ | 357.7 | ||||
% of portfolio at cost—debt | 69.1% | 97.2% | 93.5% | |||||||
% of portfolio at cost—equity | 30.9% | 2.8% | 6.5% | |||||||
% of debt investments at cost secured by first priority lien | 92.1% | 89.1% | 89.0% | |||||||
Weighted-average annual effective yield(b) | 12.5% | 8.5% | 9.6% | |||||||
Average EBITDA(c) | $ | 5.9 | $ | 98.6 | $ | 22.7 | ||||
As of September 30, 2017, we had Other Portfolio investments in eleven companies, collectively totaling approximately $99.2 million in fair value and approximately $105.6 million in cost basis and which comprised approximately 4.6% of our Investment Portfolio (as defined in "—Critical Accounting Policies—Basis of Presentation" below) at fair value. As of December 31, 2016, we had Other Portfolio investments in ten companies, collectively totaling approximately $100.3 million in fair value and approximately $107.1 million in cost basis and which comprised approximately 5.0% of our Investment Portfolio at fair value.2020.
As previously discussed, the External Investment Manager is a wholly owned subsidiary that is treated as a portfolio investment. As of September 30, 2017, there was no cost basis in this investment and the investment had a fair value of approximately $39.3 million, which comprised approximately 1.8% of our Investment Portfolio at fair value. As of December 31, 2016, there was no cost basis in this investment and the investment had a fair value of approximately $30.6 million, which comprised approximately 1.5% of our Investment Portfolio at fair value.
Our portfolio investments are generally made through MSCC and the Funds. MSCC and the Funds share the same investment strategies and criteria, although they are subject to different regulatory regimes. An investor'sinvestor’s return in MSCC will depend, in part, on the Funds'Funds’ investment returns as they are wholly owned subsidiaries of MSCC.
The level of new portfolio investment activity will fluctuate from period to period based upon our view of the current economic fundamentals, our ability to identify new investment opportunities that meet our investment criteria, and our ability to consummate the identified opportunities. The level of new investment activity, and associated interest and fee income, will directly impact future investment income. In addition, the level of dividends paid by portfolio companies and the portion of our portfolio debt investments on non-accrual status will directly impact future investment income. While we intend to grow our portfolio and our investment income over the long term, our growth and our operating results may be more limited during depressed economic periods. However, we intend to appropriately manage our cost structure and liquidity position based on applicable economic conditions and our investment outlook. The level of realized gains or losses and unrealized appreciation or depreciation on our investments will also fluctuate depending upon portfolio activity, economic conditions and the performance of our individual portfolio companies. The changes in realized gains and losses and unrealized appreciation or depreciation could have a material impact on our operating results.
Because we are internally managed, we do not pay any external investment advisory fees, but instead directly incur the operating costs associated with employing investment and portfolio management professionals. We believe that our internally managed structure provides us with a beneficial operating expense structure when compared to other publicly traded and privately held investment firms which are externally managed, and our internally managed structure allows us the opportunity to leverage our non-interest operating expenses as we grow our Investment Portfolio. For the three months ended September 30, 2017Portfolio and 2016, theour External Investment Manager’s asset management business. The ratio of our total operating expenses, excluding interest expense, as a percentage of our quarterly average total assets was 1.5% on an annualized basis. For1.4% and 1.2%, respectively, for the ninetrailing twelve months ended SeptemberJune 30, 2017, the ratio of our total operating expenses, excluding interest expense2021 and the effect of certain non-recurring professional fees2020, and other expenses as discussed further below in "Discussion and analysis of results of operations—Comparison of the nine months ended September 30, 2017 and September 30, 2016", as a percentage of our quarterly average total assets was 1.5% on an annualized basis, compared to 1.4% on an annualized basis for the nine months ended September 30, 2016 and 1.5%1.3% for the year ended December 31, 2016. Including the effect of these non-recurring expenses, the ratio for the nine months ended September 30, 2017 would have been 1.6% on an annualized basis.2020.
During May 2012, we entered into an investment sub-advisory agreement with HMS Adviser, LP ("HMS Adviser"), which is the investment advisor to HMS Income, a non-listed BDC, to provide certain investment advisory services to HMS Adviser. In December 2013, after obtaining required no-action relief from the SEC to allow us to own a registered investment adviser, we assigned the sub-advisory agreement to the External Investment Manager since the fees received from such arrangement could otherwise have negative consequences on our ability to meet the source-of-income requirement necessary for us to maintain our RIC tax treatment. Under the investment sub-advisory agreement, the External Investment Manager is entitled to 50% of the base management fee and the incentive fees earned by HMS Adviser under its advisory agreement with HMS Income. Based upon several fee waiver agreements with HMS Income and HMS Adviser, the External Investment Manager did not begin accruing the base management fee and incentive fees, if any, until January 1, 2014. The External Investment Manager has conditionally agreed to waive a limited amount of the incentive fees otherwise earned. During the three months ended September 30, 2017 and 2016, the External Investment Manager earned $2.8 million and $2.5 million, respectively, of management fees (net of fees waived, if any) under the sub-advisory agreement with HMS Adviser. During the nine months ended September 30, 2017 and 2016, the External Investment Manager earned $8.1 million and $7.1 million, respectively, of management fees (net of fees waived, if any) under the sub-advisory agreement with HMS Adviser.
During April 2014, we received an exemptive order from the SEC permitting co-investments by us and HMS Income in certain negotiated transactions where co-investing would otherwise be prohibited
under the 1940 Act. We have made, and in the future intend to continue to make, such co-investments with HMS Income in accordance with the conditions of the order. The order requires, among other things, that we and the External Investment Manager consider whether each such investment opportunity is appropriate for HMS Income and, if it is appropriate, to propose an allocation of the investment opportunity between us and HMS Income. Because the External Investment Manager may receive performance-based fee compensation from HMS Income, this may provide it an incentive to allocate opportunities to HMS Income instead of us. However, both we and the External Investment Manager have policies and procedures in place to manage this conflict.
CRITICAL ACCOUNTING POLICIES
BasisThe preparation of Presentation
Our consolidated financial statements are preparedand related disclosures in accordanceconformity with generally accepted accounting principles in the United States of America ("U.S. GAAP"(“GAAP”). For each of the periods presented herein, our consolidated financial statements include the accounts of MSCC and its consolidated subsidiaries. The Investment Portfolio, as used herein, refers to all of our investments in LMM portfolio companies, investments in Middle Market portfolio companies, Private Loan portfolio investments, Other Portfolio investments, and the investment in the External Investment Manager. Our results of operations for the three and nine months ended September 30, 2017 and 2016, cash flows for the nine months ended September 30, 2017 and 2016, and financial position as of September 30, 2017 and December 31, 2016, are presented on a consolidated basis. The effects of all intercompany transactions between us and our consolidated subsidiaries have been eliminated in consolidation.
Our accompanying unaudited consolidated financial statements are presented in conformity with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, the unaudited consolidated financial results included herein contain all adjustments, consisting solely of normal recurring accruals, considered necessary for the fair presentation of financial statements for the interim periods included herein. The results of operations for the three and nine months ended September 30, 2017 and 2016 are not necessarily indicative of the operating results to be expected for the full year. Also, the unaudited financial statements and notes should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2016. Financial statements prepared on a U.S. GAAP basis require requires management to make estimates and assumptions that affect the reported amounts of assets and disclosures reported inliabilities, and contingent assets and liabilities at the date of the financial statements, and accompanying notes. Such estimatesrevenues and assumptionsexpenses during the periods reported. Actual results could materially differ from those estimates. Critical accounting policies are those that require management to make subjective or complex judgments about the effect of matters that are inherently uncertain and may change in subsequent periods. Changes that may be required in the future as more information becomes known, whichunderlying assumptions or estimates in these areas could impact the amounts reported and disclosed herein.
We are an investment company following the accounting and reporting guidance in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 946,Financial Services—Investment Company ("ASC 946"). Under regulations pursuant to Article 6 of Regulation S-X applicable to BDCs and ASC 946, we are precluded from consolidating other entities in which we have equity investments, including those in which we have a controlling interest, unlessmaterial impact on our current and future financial condition and results of operations.
Management has discussed the other entity is another investment company. An exceptiondevelopment and selection of each critical accounting policy and estimate with the Audit Committee of the Board of Directors. Our critical accounting policies and estimates include the Investment Portfolio Valuation and Revenue Recognition policies described below. Our significant accounting policies are described in greater detail in Note B to this general principle in ASC 946 occurs if we hold a controlling interest in an operating company that provides all or substantially all of its services directly to us or to any of our portfolio companies. Accordingly, as noted above, ourthe consolidated financial statements include the financial position and operating results for the Funds and the Taxable Subsidiaries. We have determined that allincluded in “Item 1. Consolidated Financial Statements” of our portfolio investments do not qualify for this exception, including the investment in the External Investment Manager. Therefore, our Investment Portfolio is carriedQuarterly Report on the consolidated balance sheet at fair value with any adjustments to fair value recognized as "Net Change in Unrealized Appreciation (Depreciation)" on the consolidated statements of operations
Table of ContentsForm 10-Q.
until the investment is realized, usually upon exit, resulting in any gain or loss being recognized as a "Net Realized Gain (Loss)."
Investment Portfolio Valuation
The most significant determination inherent in the preparation of our consolidated financial statements is the valuation of our Investment Portfolio and the related amounts of unrealized appreciation and depreciation. We consider this determination to be a critical accounting estimate, given the significant judgments and subjective measurements required. As of both SeptemberJune 30, 20172021 and December 31, 2016,2020 our Investment Portfolio valued at fair value represented approximately 96% and 97% of our total assets.assets, respectively. We are required to report our investments at fair value. We follow the provisions of Financial Accounting Standards Board ("FASB")FASB ASC 820,Fair Value Measurements and Disclosures (" (“ASC 820"820”). ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs
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used to measure fair value and enhances disclosure requirements for fair value measurements. ASC 820 requires us to assume that the portfolio investment is to be sold in the principal market to independent market participants, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal market that are independent, knowledgeable and willing and able to transact. See "Note“Note B.1.—Valuation of the Investment Portfolio"Portfolio” in the notes to consolidated financial statements for a detailed discussion of our investment portfolio valuation process and procedures.
Due to the inherent uncertainty in the valuation process, our determination of fair value for our Investment Portfolio may differ materially from the values that would have been determined had a ready market for the securities existed. In addition, changes in the market environment, portfolio company performance and other events that may occur over the lives of the investments may cause the gains or losses ultimately realized on these investments to be materially different than the valuations currently assigned. We determine the fair value of each individual investment and record changes in fair value as unrealized appreciation or depreciation.
Our BoardThe SEC recently adopted new Rule 2a-5 under the 1940 Act, which permits a BDC’s board of Directors has the final responsibility for overseeing, reviewing and approving, in good faith, our determination ofdirectors to designate its executive officers or investment adviser as a valuation designee to determine the fair value for its investment portfolio, subject to the active oversight of the board. Our board of directors has approved policies and procedures pursuant to Rule 2a-5 (the “Valuation Procedures”) and has designated a group of our Investment Portfolio and ourexecutive officers to serve as the Board’s valuation procedures, consistent with 1940 Act requirements.designee. We adopted the Valuation Procedures effective April 1, 2021. We believe our Investment Portfolioinvestment portfolio as of SeptemberJune 30, 20172021 and December 31, 20162020 approximates fair value as of those dates based on the markets in which we operate and other conditions in existence on those reporting dates.
Revenue Recognition
Interest and Dividend Income
We record interest and dividend income on the accrual basis to the extent amounts are expected to be collected. Dividend income is recorded as dividends are declared by the portfolio company or at the point an obligation exists for the portfolio company to make a distribution. In accordance with our valuation policies, we evaluate accrued interest and dividend income periodically for collectability. When a loan or debt security becomes 90 days or more past due, and if we otherwise do not expect the debtor to be able to service all of its debt or other obligations, we will generally place the loan or debt security on non-accrual status and cease recognizing interest income on that loan or debt security until the borrower has demonstrated the ability and intent to pay contractual amounts due. If a loan or debt security'ssecurity’s status significantly improves regarding the debtor'sdebtor’s ability to service the debt or other obligations, or if a loan or debt security is sold or written off, we remove it from non-accrual status.
Fee Income
We may periodically provide services, including structuring and advisory services, to our portfolio companies or other third parties. For services that are separately identifiable and evidence exists to substantiate fair value, fee income is recognized as earned, which is generally when the investment or
other applicable transaction closes. Fees received in connection with debt financing transactions for services that do not meet these criteria are treated as debt origination fees and are deferred and accreted into income over the life of the financing.
Payment-in-Kind ("PIK"(“PIK”) Interest and Cumulative Dividends
We hold certain debt and preferred equity instruments in our Investment Portfolio that contain PIK interest and cumulative dividend provisions. The PIK interest, computed at the contractual rate specified in each debt agreement, is periodically added to the principal balance of the debt and is recorded as interest income. Thus, the actual collection of this interest may be deferred until the time of debt principal repayment. Cumulative dividends are recorded as dividend income, and any dividends in arrears are added to the balance of the preferred equity investment. The actual collection of these dividends in arrears may be deferred until such time as the preferred equity is redeemed or sold. To maintain RIC tax treatment (as discussed below), these non-cash sources of income may need to be paid out to stockholders in the form of distributions, even though we may not have collected the PIK interest and cumulative dividends in cash. We stop accruing PIK interest and cumulative dividends and write off any accrued and uncollected interest and dividends in arrears when we determine that such PIK interest and dividends in arrears are no longer collectible. For the three months
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ended SeptemberJune 30, 20172021 and 2016,2020, (i) approximately 1.9%3.4% and 4.0%2.5%, respectively, of our total investment income was attributable to PIK interest income not paid currently in cash and (ii) approximately 1.8%0.6% and 1.8%0.9%, respectively, of our total investment income was attributable to cumulative dividend income not paid currently in cash. For the ninesix months ended SeptemberJune 30, 20172021 and 2016,2020, (i) approximately 2.7%3.6% and 3.7%1.7%, respectively, of our total investment income was attributable to PIK interest income not paid currently in cash and (ii) approximately 1.8%0.7% and 1.1%0.9%, respectively, of our total investment income was attributable to cumulative dividend income not paid currently in cash.
Share-Based Compensation
We account for our share-based compensation plans using the fair value method, as prescribed by ASC 718,Compensation—Stock Compensation. Accordingly, for restricted stock awards, we measure the grant date fair value based upon the market price of our common stock on the date of the grant and amortize the fair value of the awards as share-based compensation expense over the requisite service period, which is generally the vesting term.
Income Taxes
MSCC has elected to be treated for U.S. federal income tax purposes as a RIC. MSCC's taxable income includes the taxable income generated by MSCC and certain of its subsidiaries, including the Funds, which are treated as disregarded entities for tax purposes. As a RIC, MSCC generally will not pay corporate-level U.S. federal income taxes on any net ordinary taxable income or capital gains that MSCC distributes to its stockholders. MSCC must generally distribute at least 90% of its "investment company taxable income" (which is generally its net ordinary taxable income and realized net short-term capital gains in excess of realized net long-term capital losses) and 90% of its tax-exempt income to maintain its RIC status (pass-through tax treatment for amounts distributed). As part of maintaining RIC status, undistributed taxable income (subject to a 4% non-deductible U.S. federal excise tax) pertaining to a given fiscal year may be distributed up to 12 months subsequent to the end of that fiscal year, provided such dividends are declared on or prior to the later of (i) filing of the U.S. federal income tax return for the applicable fiscal year or (ii) the fifteenth day of the ninth month following the close of the year in which such taxable income was generated.
The Taxable Subsidiaries primarily hold certain portfolio investments for us. The Taxable Subsidiaries permit us to hold equity investments in portfolio companies which are "pass-through" entities for tax purposes and to continue to comply with the "source-income" requirements contained
in the RIC tax provisions of the Code. The Taxable Subsidiaries are consolidated with us for U.S. GAAP financial reporting purposes, and the portfolio investments held by the Taxable Subsidiaries are included in our consolidated financial statements as portfolio investments and recorded at fair value. The Taxable Subsidiaries are not consolidated with MSCC for income tax purposes and may generate income tax expense, or benefit, and tax assets and liabilities, as a result of their ownership of certain portfolio investments. The taxable income, or loss, of the Taxable Subsidiaries may differ from their book income, or loss, due to temporary book and tax timing differences and permanent differences. The Taxable Subsidiaries are each taxed at their normal corporate tax rates based on their taxable income. The income tax expense, or benefit, if any, and the related tax assets and liabilities, of the Taxable Subsidiaries are reflected in Main Street's consolidated financial statements.
The External Investment Manager is an indirect wholly owned subsidiary of MSCC through a Taxable Subsidiary and is a disregarded entity for tax purposes. The External Investment Manager has entered into a tax sharing agreement with its Taxable Subsidiary owner. Since the External Investment Manager is accounted for as a portfolio investment of MSCC and is not included as a consolidated subsidiary of MSCC in MSCC's consolidated financial statements, and as a result of the tax sharing agreement with its Taxable Subsidiary owner, for its stand-alone financial reporting purposes the External Investment Manager is treated as if it is taxed at normal corporate tax rates based on its taxable income and, as a result of its activities, may generate income tax expense or benefit. The income tax expense, or benefit, if any, and the related tax assets and liabilities, of the External Investment Manager are reflected in the External Investment Manager's separate financial statements.
The Taxable Subsidiaries and the External Investment Manager use the liability method in accounting for income taxes. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements, using statutory tax rates in effect for the year in which the temporary differences are expected to reverse. A valuation allowance is provided, if necessary, against deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.
Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses. Taxable income generally excludes net unrealized appreciation or depreciation, as investment gains or losses are not included in taxable income until they are realized.
INVESTMENT PORTFOLIO COMPOSITION
Our LMM portfolio investments primarily consist of secured debt, equity warrants and direct equity investments in privately held, LMM companies based in the United States. Our LMM portfolio companies generally have annual revenues between $10 million and $150 million, and our LMM investments generally range in size from $5 million to $50 million. The LMM debt investments are typically secured by either a first or second priority lien on the assets of the portfolio company, generally bear interest at fixed rates, and generally have a term of between five and seven years from the original investment date. In most LMM portfolio companies, we receive nominally priced equity warrants and/or make direct equity investments in connection with a debt investment.
Our Middle Market portfolio investments primarily consist of direct investments in or secondary purchases of interest-bearing debt securities in privately held companies based in the United States that are generally larger in size than the companies included in our LMM portfolio. Our Middle Market portfolio companies generally have annual revenues between $150 million and $1.5 billion, and our Middle Market investments generally range in size from $3 million to $15 million. Our Middle Market portfolio debt investments are generally secured by either a first or second priority lien on the assets of the portfolio company and typically have a term of between three and seven years from the original investment date.
Our Private Loan portfolio investments are primarily debt securities in privately held companies which have been originated through strategic relationships with other investment funds on a collaborative basis, and are often referred to in the debt markets as "club deals." Private Loan investments are typically similar in size, structure, terms and conditions to investments we hold in our LMM portfolio and Middle Market portfolio. Our Private Loan portfolio debt investments are generally secured by either a first or second priority lien on the assets of the portfolio company and typically have a term of between three and seven years from the original investment date.
Our Other Portfolio investments primarily consist of investments which are not consistent with the typical profiles for LMM, Middle Market and Private Loan portfolio investments, including investments which may be managed by third parties. In the Other Portfolio, we may incur indirect fees and expenses in connection with investments managed by third parties, such as investments in other investment companies or private funds.
Our external asset management business is conducted through the External Investment Manager. The External Investment Manager earns management fees based on the assets of the funds under management and may earn incentive fees, or a carried interest, based on the performance of the funds managed. We have entered into an agreement with the External Investment Manager to share employees in connection with its asset management business generally, and specifically for its relationship with HMS Income. Through this agreement, we share employees with the External Investment Manager, including their related infrastructure, business relationships, management expertise and capital raising capabilities, and we allocate the related expenses to the External Investment Manager pursuant to the sharing agreement. Our total expenses for the three months ended September 30, 2017 and 2016 are net of expenses allocated to the External Investment Manager of $1.7 million and $1.2 million, respectively. Our total expenses for the nine months ended September 30, 2017 and 2016 are net of expenses allocated to the External Investment Manager of $4.8 million and $3.7 million, respectively. The External Investment Manager earns management fees based on the assets of the funds under management and may earn incentive fees, or a carried interest, based on the performance of the funds managed. The total contribution of the External Investment Manager to our net investment income consists of the combination of the expenses allocated to the External Investment Manager and dividend income received from the External Investment Manager. For the three months ended September 30, 2017 and 2016, the total contribution to our net investment income was $2.4 million and $2.0 million, respectively. For the nine months ended September 30, 2017 and 2016, the total contribution to our net investment income was $6.9 million and $5.8 million, respectively.
The following tables summarize the composition of our total combined LMM portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments at cost and fair value by type of investment as a percentage of the total combined LMM portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments as of SeptemberJune 30, 20172021 and December 31, 20162020 (this information excludes the Other Portfolio, short-term investments and the External Investment Manager).
| | | | | | |
Cost: |
| June 30, 2021 |
| December 31, 2020 | | |
First lien debt |
| 80.1 | % | 77.0 | % | |
Equity |
| 17.6 | % | 19.0 | % | |
Second lien debt |
| 1.3 | % | 2.7 | % | |
Equity warrants |
| 0.4 | % | 0.5 | % | |
Other |
| 0.6 | % | 0.8 | % | |
|
| 100.0 | % | 100.0 | % | |
| | | | | | |
Fair Value: |
| June 30, 2021 |
| December 31, 2020 | |
|
First lien debt |
| 71.9 | % | 70.0 | % |
|
Equity |
| 26.0 | % | 26.4 | % |
|
Second lien debt |
| 1.1 | % | 2.4 | % |
|
Equity warrants |
| 0.4 | % | 0.4 | % |
|
Other |
| 0.6 | % | 0.8 | % |
|
|
| 100.0 | % | 100.0 | % |
|
Cost: | September 30, 2017 | December 31, 2016 | |||||
|---|---|---|---|---|---|---|---|
First lien debt | 78.2% | 76.1% | |||||
Equity | 14.8% | 14.5% | |||||
Second lien debt | 5.8% | 7.7% | |||||
Equity warrants | 0.8% | 1.1% | |||||
Other | 0.4% | 0.6% | |||||
| | | | | | | | |
| 100.0% | 100.0% | ||||||
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Fair Value: | September 30, 2017 | December 31, 2016 | |||||
|---|---|---|---|---|---|---|---|
First lien debt | 71.1% | 68.7% | |||||
Equity | 22.5% | 22.6% | |||||
Second lien debt | 5.4% | 7.2% | |||||
Equity warrants | 0.6% | 0.9% | |||||
Other | 0.4% | 0.6% | |||||
| | | | | | | | |
| 100.0% | 100.0% | ||||||
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Our LMM portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments carry a number of risks including: (1) investing in companies which may have limited operating histories and financial resources; (2) holding investments that generally are not publicly traded and which may be subject to legal and other restrictions on resale; and (3) other risks common to investing in below investment grade debt and equity investments in our Investment Portfolio. Please see "Risk“Risk Factors—Risks Related to Our Investments"Investments” contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and "Risk Factors" below2020 for a more complete discussion of the risks involved with investing in our Investment Portfolio.
PORTFOLIO ASSET QUALITY
We utilize an internally developed investment rating system to rate the performance of each LMM portfolio company and to monitor our expected level of returns on each of our LMM investments in relation to our expectations for the portfolio company. The investment rating system takes into consideration various factors, including each investment'sinvestment’s expected level of returns, the collectability of our debt investments and the ability to receive a return of the invested capital in our equity investments, comparisons to competitors and other industry participants, the portfolio company'scompany’s future outlook and other factors that are deemed to be significant to the portfolio company.
All new LMM portfolio investments receive an initial Investment Rating of 3.
The following table shows the distribution of our LMM portfolio investments on the 1 to 5 investment rating scale at fair value as of September 30, 2017 and December 31, 2016:
| | As of September 30, 2017 | As of December 31, 2016 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Investment Rating | Investments at Fair Value | Percentage of Total Portfolio | Investments at Fair Value | Percentage of Total Portfolio | |||||||||
| | | (dollars in thousands) | | ||||||||||
1 | $ | 246,935 | 26.3% | $ | 253,420 | 28.4% | |||||||
2 | $ | 222,964 | 23.8% | 258,085 | 28.9% | ||||||||
3 | $ | 383,529 | 40.9% | 294,807 | 33.0% | ||||||||
4 | $ | 67,686 | 7.2% | 75,433 | 8.5% | ||||||||
5 | $ | 16,928 | 1.8% | 10,847 | 1.2% | ||||||||
| | | | | | | | | | | | | | |
Total | $ | 938,042 | 100.0% | $ | 892,592 | 100.0% | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Based upon our investment rating system, the weighted-average rating of our LMM portfolio was approximately 2.3 as of both September 30, 2017 and December 31, 2016.
As of SeptemberJune 30, 2017,2021, our total Investment Portfolio had sixnine investments on non-accrual status, which comprised approximately 0.4%1.2% of its fair value and 2.7%3.9% of its cost. As of December 31, 2016,2020, our total Investment Portfolio had fourseven investments on non-accrual status, which comprised approximately 0.6%1.3% of its fair value and 3.0%3.6% of its cost.
The operating results of our portfolio companies are impacted by changes in the broader fundamentals of the United States economy. In the event thatperiods during which the United States economy contracts, as it did due to the impact of COVID-19, it is likely that the financial results of small to mid-sized companies, like those in which we invest, could
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experience deterioration or limited growth from current levels, which could ultimately lead to difficulty in meeting their debt service requirements, to an increase in defaults on our debt investments or in realized losses on our investments and to difficulty in maintaining historical dividend payment rates and unrealized appreciation on our equity investments. Consequently, we can provide no assurance that the performance of certain portfolio companies will not be negatively impacted by future economic cycles or other conditions, which could also have a negative impact on our future results.
DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
Comparison of the three months ended SeptemberJune 30, 20172021 and SeptemberJune 30, 20162020
| | | | | | | | | | | | | |
| | Three Months Ended | | | | | |
| | ||||
| | June 30, | | Net Change | | ||||||||
|
| 2021 |
| 2020 |
| Amount |
| % |
| ||||
| | (dollars in thousands) | | ||||||||||
Total investment income | | $ | 67,294 | | $ | 52,007 | | $ | 15,287 |
| 29 | % | |
Total expenses | |
| (24,899) | |
| (20,713) | |
| (4,186) |
| 20 | % | |
Net investment income | |
| 42,395 | |
| 31,294 | |
| 11,101 |
| 35 | % | |
Net realized gain (loss) from investments | |
| 18,000 | |
| (8,584) | |
| 26,584 | | NM | % | |
Net unrealized appreciation (depreciation) from: | | | | | | | | | | | | | |
Portfolio investments | |
| 44,441 | |
| 13,164 | |
| 31,277 | | NM | | |
Income tax benefit (provision) | |
| (9,726) | |
| 7,495 | |
| (17,221) | | NM | | |
Net increase in net assets resulting from operations | | $ | 95,110 | | $ | 43,369 | | $ | 51,741 |
| NM | % | |
| | | | | | | | | | | | | |
| | Three Months Ended | | | | | |
| | ||||
| | June 30, | | Net Change | | ||||||||
|
| 2021 |
| 2020 |
| Amount |
| % |
| ||||
| | (dollars in thousands, except per share amounts) | | ||||||||||
Net investment income | | $ | 42,395 | | $ | 31,294 | | $ | 11,101 |
| 35 | % | |
Share‑based compensation expense | |
| 2,759 | |
| 2,817 | |
| (58) |
| (2) | % | |
Distributable net investment income(a) | | $ | 45,154 | | $ | 34,111 | | $ | 11,043 |
| 32 | % | |
Net investment income per share—Basic and diluted | | $ | 0.62 | | $ | 0.48 | | $ | 0.14 |
| 29 | % | |
Distributable net investment income per share—Basic and diluted(a) | | $ | 0.66 | | $ | 0.52 | | $ | 0.14 |
| 27 | % | |
NM | Not Meaningful |
| (a) | Distributable net investment income is net investment income as determined in accordance with U.S. GAAP, excluding the impact of share-based compensation expense which is non-cash in nature. We believe presenting distributable net investment income and related per share amounts is useful and appropriate supplemental disclosure of information for analyzing our financial performance since share-based compensation does not require settlement in cash. However, distributable net investment income is a non-U.S. GAAP measure and should not be considered as a replacement to net investment income and other earnings measures presented in accordance with U.S. GAAP. Instead, distributable net investment income should be reviewed only in connection with such U.S. GAAP measures in analyzing our financial performance. A reconciliation of net investment income in accordance with U.S. GAAP to distributable net investment income is presented in the table above. |
| | Three Months Ended September 30, | Net Change | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | 2017 | 2016 | Amount | % | |||||||||
| | (dollars in thousands) | ||||||||||||
Total investment income | $ | 51,786 | $ | 46,599 | $ | 5,187 | 11% | ||||||
Total expenses | (17,757 | ) | (16,042 | ) | (1,715 | ) | 11% | ||||||
| | | | | | | | | | | | | | |
Net investment income | 34,029 | 30,557 | 3,472 | 11% | |||||||||
Net realized gain (loss) from investments | (10,706 | ) | 4,286 | (14,992 | ) | ||||||||
Net change in net unrealized appreciation (depreciation) from: | |||||||||||||
Portfolio investments | 16,368 | 8,376 | 7,992 | ||||||||||
SBIC debentures and marketable securities and idle funds | (221 | ) | (566 | ) | 345 | ||||||||
| | | | | | | | | | | | | | |
Total net change in net unrealized appreciation | 16,147 | 7,810 | 8,337 | ||||||||||
Income tax benefit (provision) | (4,571 | ) | 528 | (5,099 | ) | ||||||||
| | | | | | | | | | | | | | |
Net increase in net assets resulting from operations | $ | 34,899 | $ | 43,181 | $ | (8,282 | ) | –19% | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
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Investment Income
| | Three Months Ended September 30, | Net Change | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | 2017 | 2016 | Amount | % | |||||||||
| | (dollars in thousands, except per share amounts) | ||||||||||||
Net investment income | $ | 34,029 | $ | 30,557 | $ | 3,472 | 11% | ||||||
Share-based compensation expense | 2,476 | 2,137 | 339 | 16% | |||||||||
| | | | | | | | | | | | | | |
Distributable net investment income(a) | $ | 36,505 | $ | 32,694 | $ | 3,811 | 12% | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Net investment income per share— | |||||||||||||
Basic and diluted | $ | 0.60 | $ | 0.58 | $ | 0.02 | 3% | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Distributable net investment income per share— | |||||||||||||
Basic and diluted(a) | $ | 0.64 | $ | 0.62 | $ | 0.02 | 3% | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Investment Income
For the three months ended SeptemberJune 30, 2017, total investment income2021 was $51.8$67.3 million, an 11%a 29% increase overfrom the $46.6$52.0 million of total investment income for the corresponding period of 2016. This2020. The following table provides a summary of the changes in the comparable period increase was principally attributable to (i) a $4.2 million increase in interest income primarily related to higher average levels of portfolio debt investments, (ii) a $0.6 million increase in fee income, and (iii) a $0.4 million increase in dividend income from Investment Portfolio equity investments. The total investment income in the three months ended September 30, 2017 includes $1.7 million related to dividend income activity from portfolio companies that is considered to be less consistent on a recurring basis or non-recurring which is consistent with the amount from such dividend activity in the same period in 2016 and an increase of $0.4 million primarily related to higher accelerated prepayment, repricing and other activity for certain Middle Market portfolio debt investments when compared to the same period in 2016.
Expenses
For the three months ended September 30, 2017, total expenses increased to $17.8 million from $16.0 million for the corresponding period of 2016. This comparable period increase in operating expenses was principally attributable to (i) a $0.8 million increase in interest expense primarily due to the higher average interest rate on our Credit Facility in the three months ended September 30, 2017, (ii) a $0.5 million increase in general and administrative expenses, (iii) a $0.5 million increase in compensation expense related to increases in the number of personnel, base compensation levels and incentive compensation accruals and (iv) a $0.3 million increase in share-based compensation expense, with these increases partially offset by a $0.4 million increase in the expenses allocated to the External Investment Manager, in each case when compared to the same period in the prior year. For the three months ended September 30, 2017, the ratio of our total operating expenses, excluding interest expense, as a percentage of our quarterly average total assets was 1.5% on an annualized basis, which isactivity.
| | | | | | | | | | | | | |
| | Three Months Ended | | | | | | | | ||||
| | June 30, | | Net Change | | ||||||||
| | 2021 | | 2020 | | Amount | | % | | ||||
| | | (dollars in thousands) | | | ||||||||
Interest income | | $ | 45,944 | | $ | 41,574 | | $ | 4,370 | | 11 | % | (a) |
Dividend income | | | 18,619 | | | 7,795 | | | 10,824 | | 139 | % | (b) |
Fee income | | | 2,731 | | | 2,638 | | | 93 | | 4 | % | |
Total investment income | | $ | 67,294 | | $ | 52,007 | | $ | 15,287 | | 29 | % | (c) |
| (a) | The increase in interest income is primarily related to higher average levels of Investment Portfolio debt investments. |
| (b) | The increase in dividend income from Investment Portfolio equity investments is primarily a result of (i) improved operating results, financial condition and liquidity positions of certain of our portfolio companies following the impacts from the COVID-19 pandemic in 2020, and (ii) a $2.6 million increase related to elevated dividend income considered to be less consistent or non-recurring. |
| (c) | The increase in total investment income includes the impact of (i) a $2.6 million increase in dividend income considered less consistent or non-recurring, and (ii) a $0.2 million increase in accelerated prepayment, repricing and other activity for certain Investment Portfolio debt investments. |
Expenses
consistent with the ratio on an annualized basisTotal expenses for the three months ended SeptemberJune 30, 2016 and for2021 was $24.9 million, a 20% increase from the year ended December 31, 2016.$20.7 million in the corresponding period of 2020. The following table provides a summary of the changes in the comparable period activity.
| | | | | | | | | | | | | |
| | Three Months Ended | | | | | | | | ||||
| | June 30, | | Net Change | | ||||||||
| | 2021 | | 2020 | | Amount | | % | | ||||
| | | (dollars in thousands) | | | ||||||||
Employee compensation expenses | | $ | 6,287 | | $ | 3,763 | | $ | 2,524 | | 67 | % | (a) |
Deferred compensation plan expense | | | 608 | | | 1,039 | | | (431) | | (41) | % | (b) |
Total compensation expense | | | 6,895 | | | 4,802 | | | 2,093 | | 44 | % | |
G&A expense | | | 3,417 | | | 3,000 | | | 417 | | 14 | % | |
Interest expense | | | 14,400 | | | 11,898 | | | 2,502 | | 21 | % | (c) |
Share-based compensation expense | | | 2,759 | | | 2,817 | | | (58) | | (2) | % | |
Gross expenses | | | 27,471 | | | 22,517 | | | 4,954 | | 22 | % | |
Allocation of expenses to the External Investment Manager | | | (2,572) | | | (1,804) | | | (768) | | 43 | % | (d) |
Total expenses | | $ | 24,899 | | $ | 20,713 | | $ | 4,186 | | 20 | % | |
| (a) | The increase in employee compensation expenses was primarily due to incentive compensation accruals generally corresponding with our improved operating results. |
| (b) | The change in the non-cash deferred compensation plan expense is due to changes in the fair value of our deferred compensation plan assets, which are correlated with changes in the overall stock market and is not directly attributable to our operating activities or results. |
| (c) | The increase in interest expense is primarily related to elevated borrowings under (i) our 5.20% Notes (as defined in “—Liquidity and Capital Resources—Capital Resources” below), an additional $125.0 million aggregate principal amount of which we issued in July 2020, and (ii) our 3.00% Notes (as defined in “—Liquidity and Capital Resources—Capital Resources” below) issued in January 2021, partially offset by decreased interest expense |
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| relating to our multi-year revolving credit facility (the “Credit Facility”) due to the lower average balance outstanding. |
| (d) | The increase in the allocation of expenses to the External Investment Manager primarily relates to the impact of the transaction in October 2020, whereby the External Investment Manager became the sole investment adviser to MSC Income. |
Net Investment Income
Net investment income for the three months ended SeptemberJune 30, 2017 was $34.02021 increased 35% to $42.4 million, or an 11% increase,$0.62 per share, compared to net investment income of $30.6$31.3 million, or $0.48 per share, for the corresponding period of 2016.2020. The increase in net investment income and net investment income per share was principally attributable to the 29% increase in total investment income, partially offset by higher operating expenses as discussed above.
Distributable Net Investment Income
For the three months ended September 30, 2017, distributable net investment income increased 12% to $36.5 million, or $0.64 per share, compared with $32.7 million, or $0.62 per share, in the corresponding period of 2016. The20% increase in distributable net investment income was primarily due to the higher level of total investment income, partially offset by higher operating expenses, both as discussed above. Distributable net investment income on a per share basisabove, and the 5% increase in weighted average shares outstanding to 68.5 million for the three months ended SeptemberJune 30, 2017 reflects (i) an increase of approximately $0.01 per share from the comparable period in 2016 attributable to the net increase in the comparable levels of accelerated prepayment, repricing and other activity for certain Investment Portfolio debt investments and (ii) a greater number of average shares outstanding compared to the corresponding period in 20162021, primarily due to shares issued through the ATM Program (as defined in "—“—Liquidity and Capital Resources—Capital Resources"Resources” below), shares issued pursuant to our equity incentive plans and shares issued pursuant to our dividend reinvestment plan.
Net Increase in Net Assets Resulting from Operations
The net increase in net assets resultinginvestment income per share includes (i) an increase of $0.04 per share in investment income from operations duringdividend income activity considered to be less consistent or non-recurring and an increase in accelerated prepayment, repricing and other income activity related to certain Investment Portfolio debt investments, as discussed above, and (ii) an increase of $0.01 per share due to the decrease in compensation expense related to our deferred compensation plan, primarily attributable to changes in the fair value of the deferred compensation plan assets.
Distributable Net Investment Income
Distributable net investment income for the three months ended SeptemberJune 30, 2017 was $34.92021 increased 32% to $45.2 million, or $0.61$0.66 per share, compared with $43.2$34.1 million, or $0.82$0.52 per share, in the corresponding period of 2020. The increase in distributable net investment income and distributable net investment income per share was primarily due to the increased level of total investment income, partially offset by (i) the increase in total expenses, excluding share-based compensation expense, and (ii) a greater number of average shares outstanding compared to the corresponding period in 2020, all as described above. The increase in distributable net investment income per share includes the impacts of (i) the increase in investment income from dividend income activity considered to be less consistent or non-recurring and an increase in accelerated prepayment, repricing and other income activity related to certain Investment Portfolio debt investments and (ii) the decrease in compensation expense attributable to the change in the fair value of the deferred compensation plan assets during the three months ended September 30, 2016. This $8.3 million decreasesecond quarter of 2021, both as discussed above.
Net Realized Gain (Loss) from Investments
The following table provides a summary of the same period inprimary components of the prior year was primarily the result of (i) a $15.0 million decrease in thetotal net realized gain (loss) from investments, from a net realized gain fromon investments of $4.3$18.0 million for the three months ended SeptemberJune 30, 2016 to a net realized loss from investments of $10.7 million for the three months ended September 30, 2017, and (ii) a $5.1 million change in the income tax benefit (provision) to a $4.6 million income tax provision for the three months ended September 30, 2017, with these changes partially offset by (i) an $8.0 million increase in net change in unrealized appreciation (depreciation) from portfolio investments, including the impact of accounting reversals relating to realized gains/income (losses) and (ii) a $3.5 million increase in net investment income as discussed above. The net realized loss from investments of $10.7 million for the three months ended September 30, 2017 was primarily the result of (i) the net realized loss of $9.2 million resulting from losses on the exit of two LMM investments, partially offset by the gains on the exit of three LMM investments and (ii) the net realized loss of $1.8 million in our Middle Market portfolio, which is primarily the result of the loss of $2.3 million on the exit of a Middle Market investment, partially offset by $0.5 million of net gains on other activity in our Middle Market portfolio.2021:
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, 2021 | ||||||||||||||||||
| | Full Exits | | Partial Exits | | Restructures | | Total | ||||||||||||
| | Net Gain/(Loss) | | # of Investments | | Net Gain/(Loss) | | # of Investments | | Net Gain/(Loss) | | # of Investments | | Net Gain/(Loss) | | # of Investments | ||||
| | (dollars in thousands) | ||||||||||||||||||
LMM Portfolio | | $ | 14,729 | | 2 | | $ | - | | - | | $ | - | | - | | $ | 14,729 | | 2 |
Middle Market Portfolio | | | (3,141) | | 1 | | | 6,153 | | 1 | | | - | | - | | | 3,012 | | 2 |
| | | | | | | | | | | | | | | | | | | | |
Total net realized gain/(loss) | | $ | 11,588 | | 3 | | $ | 6,153 | | 1 | | $ | - | | - | | $ | 17,741 | | 4 |
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Net Unrealized Appreciation (Depreciation)
The following table provides a summary of the total net unrealized appreciation of $16.1$44.4 million for the three months ended SeptemberJune 30, 2017:2021:
| | | | | | | | | | | | | | | |
| | Three Months Ended June 30, 2021 | |||||||||||||
| | | | | Middle | | Private | | | | | | | ||
|
| LMM(a) |
| Market |
| Loan |
| Other | | Total | |||||
|
| (dollars in millions) | |||||||||||||
Accounting reversals of net unrealized (appreciation) depreciation recognized in prior periods due to net realized (gains / income) losses recognized during the current period | | $ | (5.3) | | $ | 0.6 | | $ | — | | $ | — | | $ | (4.7) |
Net unrealized appreciation (depreciation) relating to portfolio investments | |
| 36.4 | |
| (2.2) | |
| 5.2 | |
| 9.7 | (b) |
| 49.1 |
Total net unrealized appreciation (depreciation) relating to portfolio investments | | $ | 31.1 | | $ | (1.6) | | $ | 5.2 | | $ | 9.7 | | $ | 44.4 |
| | Three Months Ended September 30, 2017 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | LMM(a) | Middle Market | Private Loan | Other(b) | Total | |||||||||||
| | (dollars in millions) | |||||||||||||||
Accounting reversals of net unrealized appreciation recognized in prior periods due to net realized gains/income (losses) recognized during the current period | $ | 7.3 | $ | 1.0 | $ | — | $ | (0.6 | ) | $ | 7.7 | |||||
Net unrealized appreciation (depreciation) relating to portfolio investments | 9.1 | (5.1 | ) | 0.8 | 3.8 | 8.6 | ||||||||||
| | | | | | | | | | | | | | | | | |
Total net change in unrealized appreciation (depreciation) relating to portfolio investments | $ | 16.4 | $ | (4.1 | ) | $ | 0.8 | $ | 3.2 | $ | 16.3 | |||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Unrealized depreciation relating to SBIC debentures(c) | (0.2 | ) | ||||||||||||||
| | | | | | | | | | | | | | | | | |
Total net change in unrealized appreciation | $ | 16.1 | ||||||||||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| (a) | LMM includes unrealized appreciation on 33 LMM portfolio investments and unrealized depreciation on 14 LMM portfolio investments. |
| (b) | Other includes (i) $5.1 million of net unrealized appreciation relating to the Other Portfolio and (ii) $4.5 million of appreciation relating to the External Investment Manager. |
Income Tax Benefit (Provision)
The income tax provision for the three months ended SeptemberJune 30, 20172021 of $4.6$9.7 million principally consisted of (i) a deferred tax provision of $3.8$9.0 million, which is primarily the result of the net activity relating to our portfolio investments held in our Taxable Subsidiaries,wholly owned taxable subsidiaries, including changes in net operating loss carryforwards, changes in net unrealized appreciation/depreciation and other temporary book-tax differences, and other(ii) a current tax expenseprovision of $0.8$0.7 million, related to (i) a $0.5 million accrualprovision for current U.S. federal and state income taxes, as well as a $0.2 million provision for excise tax on our estimated undistributed taxable income. The income and (ii) othertax benefit for the three months ended June 30, 2020 of $7.5 million principally consisted of a deferred tax benefit of $8.0 million, partially offset by a current tax expenseprovision of $0.3$0.6 million related to accrualsa $0.4 million provision for current U.S. federal and state income taxes.taxes, as well as a $0.2 million provision for excise tax on our estimated undistributed taxable income.
Net Increase (Decrease) in Net Assets Resulting from Operations
The net increase in net assets resulting from operations for the three months ended June 30, 2021 was $95.1 million, or $1.39 per share, compared with $43.4 million, or $0.66 per share, during the three months ended June 30, 2020. The tables above provide a summary of the net increase in net assets resulting from operations for the three months ended June 30, 2021.
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Comparison of the ninesix months ended SeptemberJune 30, 20172021 and SeptemberJune 30, 20162020
| | | | | | | | | | | | |
| | Six Months Ended | | | | | |
| ||||
| | June 30, | | Net Change | ||||||||
|
| 2021 |
| 2020 |
| Amount |
| % | ||||
| | (dollars in thousands) | ||||||||||
Total investment income | | $ | 130,102 | | $ | 108,156 | | $ | 21,946 |
| 20 | % |
Total expenses | |
| (47,954) | |
| (40,317) | |
| (7,637) |
| 19 | % |
Net investment income | |
| 82,148 | |
| 67,839 | |
| 14,309 |
| 21 | % |
Net realized gain (loss) from investments | |
| 2,270 | |
| (30,449) | |
| 32,719 | | NM | |
Net realized loss on extinguishment of debt | |
| — | |
| (534) | |
| 534 | | NM | |
Net unrealized appreciation (depreciation) from: | | | | | | | | | | | | |
Portfolio investments | |
| 78,440 | |
| (181,144) | |
| 259,584 | | NM | |
SBIC debentures | |
| — | |
| 460 | |
| (460) | | NM | |
Total net unrealized appreciation (depreciation) | |
| 78,440 | |
| (180,684) | |
| 259,124 | | NM | |
Income tax benefit (provision) | |
| (10,407) | |
| 15,760 | |
| (26,167) | | NM | |
Net increase (decrease) in net assets resulting from operations | | $ | 152,451 | | $ | (128,068) | | $ | 280,519 |
| NM | |
| | | | | | | | | | | | |
| | Six Months Ended | | | | | |
| ||||
| | June 30, | | Net Change | ||||||||
|
| 2021 |
| 2020 |
| Amount |
| % | ||||
| | (dollars in thousands, except per share amounts) | ||||||||||
Net investment income | | $ | 82,148 | | $ | 67,839 | | $ | 14,309 |
| 21 | % |
Share‑based compensation expense | |
| 5,092 | |
| 5,654 | |
| (562) |
| (10) | % |
Distributable net investment income(a) | | $ | 87,240 | | $ | 73,493 | | $ | 13,747 |
| 19 | % |
Net investment income per share—Basic and diluted | | $ | 1.20 | | $ | 1.04 | | $ | 0.16 |
| 15 | % |
Distributable net investment income per share—Basic and diluted(a) | | $ | 1.28 | | $ | 1.13 | | $ | 0.15 |
| 13 | % |
NM | Not Meaningful |
| (b) | Distributable net investment income is net investment income as determined in accordance with U.S. GAAP, excluding the impact of share-based compensation expense which is non-cash in nature. We believe presenting distributable net investment income and related per share amounts is useful and appropriate supplemental disclosure of information for analyzing our financial performance since share-based compensation does not require settlement in cash. However, distributable net investment income is a non-U.S. GAAP measure and should not be considered as a replacement to net investment income and other earnings measures presented in accordance with U.S. GAAP. Instead, distributable net investment income should be reviewed only in connection with such U.S. GAAP measures in analyzing our financial performance. A reconciliation of net investment income in accordance with U.S. GAAP to distributable net investment income is presented in the table above. |
| | Nine Months Ended September 30, | Net Change | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | 2017 | 2016 | Amount | % | |||||||||
| | (dollars in thousands) | ||||||||||||
Total investment income | $ | 149,944 | $ | 131,508 | $ | 18,436 | 14% | ||||||
Total expenses | (52,056 | ) | (46,137 | ) | (5,919 | ) | 13% | ||||||
| | | | | | | | | | | | | | |
Net investment income | 97,888 | 85,371 | 12,517 | 15% | |||||||||
Net realized gain from investments | 27,842 | 33,347 | (5,505 | ) | |||||||||
Net realized loss from SBIC debentures | (5,217 | ) | — | (5,217 | ) | ||||||||
Net change in net unrealized appreciation (depreciation) from: | |||||||||||||
Portfolio investments | (4,358 | ) | (29,738 | ) | 25,380 | ||||||||
SBIC debentures and marketable securities and idle funds | 5,408 | 909 | 4,499 | ||||||||||
| | | | | | | | | | | | | | |
Total net change in net unrealized appreciation (depreciation) | 1,050 | (28,829 | ) | 29,879 | |||||||||
Income tax benefit (provision) | (12,383 | ) | 1,018 | (13,401 | ) | ||||||||
| | | | | | | | | | | | | | |
Net increase in net assets resulting from operations | $ | 109,180 | $ | 90,907 | $ | 18,273 | 20% | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
109
| | Nine Months Ended September 30, | Net Change | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | 2017 | 2016 | Amount | % | |||||||||
| | (dollars in thousands, except per share amounts) | ||||||||||||
Net investment income | $ | 97,888 | $ | 85,371 | $ | 12,517 | 15% | ||||||
Share-based compensation expense | 7,542 | 5,977 | 1,565 | 26% | |||||||||
| | | | | | | | | | | | | | |
Distributable net investment income(a) | $ | 105,430 | $ | 91,348 | $ | 14,082 | 15% | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Net investment income per share— | |||||||||||||
Basic and diluted | $ | 1.74 | $ | 1.66 | $ | 0.08 | 5% | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Distributable net investment income per share— | |||||||||||||
Basic and diluted(a) | $ | 1.88 | $ | 1.77 | $ | 0.11 | 6% | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Investment Income
Total investment income is net investment income as determined in accordance with U.S. GAAP, excludingfor the impact of share-based compensation expense which is non-cash in nature. We believe presenting distributable net investment income and related per share amounts is useful and appropriate supplemental disclosure of information for analyzing our financial performance since share-based compensation does not require settlement in cash. However, distributable net investment income is a non-U.S. GAAP measure and should not be considered as a replacement to net investment income and other earnings measures presented in accordance with U.S. GAAP. Instead, distributable net investment income should be reviewed only in connection with such U.S. GAAP measures in analyzing our financial performance. A reconciliation of net investment income in accordance with U.S. GAAP to distributable net investment income is presented in the table above.
Investment Income
For the ninesix months ended SeptemberJune 30, 2017, total investment income2021 was $149.9$130.1 million, a 14%20% increase overfrom the $131.5$108.2 million of total investment income for the corresponding period of 2016. This2020. The following table provides a summary of the changes in the comparable period increase was principally attributable to (i) a $16.1 million increase in interestactivity.
| | | | | | | | | | | | | |
| | Six Months Ended | | | | | | | | ||||
| | June 30, | | Net Change | | ||||||||
| | 2021 | | 2020 | | Amount | | % | | ||||
| | | (dollars in thousands) | | | ||||||||
Interest Income | | $ | 89,416 | | $ | 86,450 | | $ | 2,966 | | 3 | % | (a) |
Dividend Income | | | 36,316 | | | 15,836 | | | 20,480 | | 129 | % | (b) |
Fee Income | | | 4,370 | | | 5,870 | | | (1,500) | | (26) | % | (c) |
Total Investment Income | | $ | 130,102 | | $ | 108,156 | | $ | 21,946 | | 20 | % | (d) |
| (a) | The increase in interest income is primarily related to higher average levels of Investment Portfolio debt investments. |
| (b) | The increase in dividend income from Investment Portfolio equity investments is primarily a result of (i) improved operating results, financial condition and liquidity positions of certain of our portfolio companies following the impacts from the COVID-19 pandemic in 2020, and (ii) a $5.4 million increase related to elevated dividend income considered to be less consistent or non-recurring. |
| (c) | The decrease in fee income was primarily due to a $1.6 million decrease in fees from refinancing and prepayment of debt investments. |
| (d) | The increase in total investment income includes the impact of a $5.4 million increase in dividend income considered less consistent or non-recurring, partially offset by a $1.9 million decrease in accelerated prepayment, repricing and other activity for certain Investment Portfolio debt investments. |
Expenses
income primarily related to higher average levels of portfolio debt investments and increased activities involving existing Investment Portfolio debt investments and (ii) a $2.3 million increase in fee income. The total investment income inTotal expenses for the ninesix months ended SeptemberJune 30, 2017 includes an2021 was $48.0 million, a 19% increase of $5.6from the $40.3 million related to higher accelerated prepayment, repricing and other activity for certain Middle Market and Private Loan portfolio debt investments when compared to the same period in 2016 and includes $1.7 million related to dividend income activity from portfolio companies that is considered to be less consistent on a recurring basis or non-recurring which is consistent with the amount from such dividend income activity in the same period in 2016.
Expenses
For the nine months ended September 30, 2017, total expenses increased to $52.1 million from $46.1 million for the corresponding period of 2016. This2020. The following table provides a summary of the changes in the comparable period increase in operating expenses was principally attributable to (i) a $1.9 million increase in general and administrative expenses, including approximately $0.6 million related to non-recurring professional fees and other expenses incurred on certain potential new portfolio investment opportunities which were terminated during the due diligence and legal documentation processes, (ii) a $1.8 million increase in interest expense, primarily due to the higher average interest rate and balance outstanding on our Credit Facility in the nine months ended September 30, 2017, (iii) a $1.7 million increase in compensation expense related to increases in the numberactivity.
| | | | | | | | | | | | | |
| | Six Months Ended | | | | | | | | ||||
| | June 30, | | Net Change | | ||||||||
| | 2021 | | 2020 | | Amount | | % | | ||||
| | | (dollars in thousands) | | | ||||||||
Employee compensation expenses | | $ | 12,238 | | $ | 7,182 | | $ | 5,056 | | 70 | % | (a) |
Deferred compensation plan expense | | | 978 | | | 118 | | | 860 | | 729 | % | (b) |
Total compensation expense | | | 13,216 | | | 7,300 | | | 5,916 | | 81 | % | |
G&A expense | | | 6,392 | | | 6,473 | | | (81) | | (1) | % | |
Interest expense | | | 28,206 | | | 24,338 | | | 3,868 | | 16 | % | (c) |
Share-based compensation expense | | | 5,092 | | | 5,654 | | | (562) | | (10) | % | (d) |
Gross expenses | | | 52,906 | | | 43,765 | | | 9,141 | | 21 | % | |
Allocation of expenses to the external investment manager | | | (4,952) | | | (3,448) | | | (1,504) | | 44 | % | (e) |
Total expenses | | $ | 47,954 | | $ | 40,317 | | $ | 7,637 | | 19 | % | |
| (a) | The increase in employee compensation expenses was primarily due to incentive compensation accruals generally corresponding with our improved operating results. |
| (b) | The change in deferred compensation plan expense is due to changes in the fair value of our deferred compensation plan assets, which are correlated with changes in the overall stock market and is not directly attributable to our operating activities or results. |
110
| (c) | The increase in interest expense is primarily related to elevated borrowings under (i) our 5.20% Notes, an additional $125.0 million aggregate principal amount of which we issued in July 2020, and (ii) our 3.00% Notes issued in January 2021, partially offset by decreased interest expense relating to our Credit Facility due to the lower average balance outstanding and the lower average interest rate. |
| (d) | The decrease in share-based compensation is primarily related to non-recurring compensation expense in the corresponding period in 2020. |
| (e) | The increase in the allocation of expenses to the External Investment Manager primarily relates to the impact of the transaction in October 2020, whereby the External Investment Manager became the sole investment adviser to MSC Income. |
Net Investment Income
Net investment income for the ninesix months ended SeptemberJune 30, 2017 was $97.92021 increased 21% to $82.1 million, or a 15% increase,$1.20 per share, compared to net investment income of $85.4$67.8 million, or $1.04 per share, for the corresponding period of 2016.2020. The increase in net investment income and net investment income per share was principally attributable to the 20% increase in total investment income, partially offset by higher operating expenses as discussed above.
Distributable Net Investment Income
For the nine months ended September 30, 2017, distributable net investment income increased 15% to $105.4 million, or $1.88 per share, compared with $91.3 million, or $1.77 per share, in the corresponding period of 2016. The19% increase in distributable net investment income was primarily due to the higher level of total investment income, partially offset by higher operating expenses, both as discussed above. Distributable net investment income on a per share basis forabove, and the nine months ended September 30, 2017 reflects (i) an increase of approximately $0.10 per share from the comparable period in 2016 attributable to the net5% increase in the comparable levels of accelerated prepayment, repricing and other activity for certain Investment Portfolio debt investments and (ii) a greater number ofweighted average shares outstanding compared to 68.3 million for the corresponding period in 2016six months ended June 30, 2021, primarily due to shares issued through the ATM Program, shares issued pursuant to our equity incentive plans and shares issued pursuant to our dividend reinvestment plan.
Net Increase in Net Assets Resulting from Operations
The net increase in net assets resulting from operations during the nine months ended September 30, 2017 was $109.2 million, or $1.94 per share, compared with $90.9 million, or $1.76 per share, during the nine months ended September 30, 2016. This $18.3 million increase from the same period in the prior year was primarily the result of (i) a $29.9 million improvement in net change in unrealized appreciation (depreciation) from portfolio investments and SBIC debentures, including the impact of accounting reversals relating to realized gains/income (losses), from net unrealized depreciation of $28.8 million for the nine months ended September 30, 2016 to net unrealized appreciation of $1.1 million for the nine months ended September 30, 2017 and (ii) a $12.5 million increase in net investment income as discussed above, with these increasesper share includes an increase of $0.08 per share in investment income from dividend income activity considered to be less consistent or non-recurring, partially offset by (i) a $13.4decrease of $0.03 per share related to lower accelerated prepayment, repricing and other activity related to certain Investment Portfolio debt investments and (ii) a decrease of $0.01 per share due to the increase in compensation expense primarily attributable to changes in the fair value of the deferred compensation plan assets.
Distributable Net Investment Income
Distributable net investment income for the six months ended June 30, 2021 increased 19% to $87.2 million, or $1.28 per share, compared with $73.5 million, or $1.13 per share, in the corresponding period of 2020. The increase in distributable net investment income and distributable net investment income per share was primarily due to the increased level of total investment income, partially offset by (i) the increase in total expenses, excluding share-based compensation expense, and (ii) a greater number of average shares outstanding compared to the corresponding period in 2020, all as described above. The increase in distributable net investment income per share includes the impacts of the increase in investment income from dividend income activity considered to be less consistent or non-recurring, partially offset by a decrease in accelerated prepayment, repricing and other income activity and the increase in compensation expense attributable to the change in the income tax provisionfair value of the deferred compensation plan assets, as discussed above.
Net Realized Gain (Loss) from an income tax benefitInvestments
The following table provides a summary of $1.0 million for the nine months ended September 30, 2016 to an income tax provisionprimary components of $12.4 million for the nine months ended September 30, 2017, (ii) a $5.5 million decrease in the net realized gain from investments to a total net realized gain fromon investments of $27.8$2.3 million for the ninesix months ended SeptemberJune 30, 2017 and (iii) a $5.2 million realized loss on the repayment of SBIC debentures outstanding at MSC II which had previously been accounted for on the fair value method of accounting. The net realized gain from investments of $27.8 million for the nine months ended September 30, 2017 was primarily the result of (i) the net realized gain of $15.5 million resulting from gains on the exit of five LMM investments and losses on the exit of three LMM investments, (ii) realized gains of $9.3 million due to activity in our Other Portfolio, (iii) the realized gain of $2.6 million on the exit of one Private Loan investment, (iv) the realized gain of $1.4 million on the partial exit of one LMM investment and (v) the net realized loss of $0.9 million in our Middle Market portfolio, which is primarily the result of the loss of $2.3 million on the exit of a Middle Market investment, partially offset by $1.4 million of net gains on other activity in our Middle Market portfolio. The realized loss of $5.2 million on the repayment of SBIC debentures is related to the previously recognized bargain purchase gain resulting from recording the MSC II debentures at fair value on the date of the acquisition of MSC II in 2010. The effect of the realized loss is offset by the reversal of all previously recognized unrealized depreciation on these SBIC debentures due to fair value adjustments since the date of the acquisition.2021:
| | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended June 30, 2021 | ||||||||||||||||||
| | Full Exits | | Partial Exits | | Restructures | | Total | ||||||||||||
| | Net Gain/(Loss) | | # of Investments | | Net Gain/(Loss) | | # of Investments | | Net Gain/(Loss) | | # of Investments | | Net Gain/(Loss) | | # of Investments | ||||
| | (dollars in thousands) | ||||||||||||||||||
LMM Portfolio | | $ | 14,729 | | 2 | | $ | - | | - | | $ | (10,925) | | 1 | | $ | 3,804 | | 3 |
Middle Market Portfolio | | | (4,243) | | 2 | | | 6,153 | | 1 | | | - | | - | | | 1,910 | | 3 |
Other Portfolio | | | (4,449) | | 1 | | | 777 | | 1 | | | - | | - | | | (3,672) | | 2 |
| | | | | | | | | | | | | | | | | | | | |
Total net realized gain/(loss) | | $ | 6,037 | | 5 | | $ | 6,930 | | 2 | | $ | (10,925) | | 1 | | $ | 2,042 | | 8 |
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Net Unrealized Appreciation (Depreciation)
The following table provides a summary of the total net unrealized appreciation of $1.1$78.4 million for the ninesix months ended SeptemberJune 30, 2017:2021:
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| | Six Months Ended June 30, 2021 | |||||||||||||
| | | | | Middle | | Private | | | | | | | ||
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| LMM(a) |
| Market |
| Loan |
| Other | | Total | |||||
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| (dollars in millions) | |||||||||||||
Accounting reversals of net unrealized appreciation recognized in prior periods due to net realized losses recognized during the current period | | $ | 3.7 | | $ | 1.7 | | $ | — | | $ | 4.4 | | $ | 9.8 |
Net unrealized appreciation relating to portfolio investments | |
| 45.8 | |
| 3.4 | |
| 7.7 | |
| 11.7 | (b) |
| 68.6 |
Total net unrealized appreciation relating to portfolio investments | | $ | 49.5 | | $ | 5.1 | | $ | 7.7 | | $ | 16.1 | | $ | 78.4 |
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| | Nine Months Ended September 30, 2017 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | LMM(a) | Middle Market | Private Loan | Other(b) | Total | |||||||||||
| | (dollars in millions) | |||||||||||||||
Accounting reversals of net unrealized appreciation recognized in prior periods due to net realized gains/income (losses) recognized during the current period | $ | (15.7 | ) | $ | (1.3 | ) | $ | (2.1 | ) | $ | (8.1 | ) | $ | (27.2 | ) | |
Net change in unrealized appreciation (depreciation) relating to portfolio investments | 16.4 | (8.7 | ) | (2.2 | ) | 17.3 | 22.8 | |||||||||
| | | | | | | | | | | | | | | | | |
Total net change in unrealized appreciation (depreciation) relating to portfolio investments | $ | 0.7 | $ | (10.0 | ) | $ | (4.3 | ) | $ | 9.2 | $ | (4.4 | ) | |||
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Unrealized appreciation relating to SBIC debentures(c) | 5.5 | |||||||||||||||
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Total net change in unrealized appreciation | $ | 1.1 | ||||||||||||||
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| (a) | LMM includes unrealized appreciation on 38 LMM portfolio investments and unrealized depreciation on 22 LMM portfolio investments. |
| (b) | Other includes (i) $6.7 million of net unrealized appreciation relating to the Other Portfolio and (ii) $5.0 million of net appreciation relating to the External Investment Manager. |
Income Tax Benefit (Provision)
The income tax provision for the ninesix months ended SeptemberJune 30, 20172021 of $12.4$10.4 million principally consisted of (i) a deferred tax provision of $9.9$9.1 million, which is primarily the result of the net activity relating to our portfolio investments held in our Taxable Subsidiaries,wholly owned taxable subsidiaries, including changes in net operating loss carryforwards, changes in net unrealized appreciation/depreciation and other temporary book-tax differences and other(ii) a current tax expenseprovision of $2.5$1.3 million, related to (i) a $1.6$0.8 million accrualprovision for current U.S. federal and state income taxes and a $0.5 million provision for excise tax on our estimated undistributed taxable income. The income and (ii) othertax benefit for the six months ended June 30, 2020 of $15.8 million principally consisted of a deferred tax benefit of $16.0 million, partially offset by a current tax expenseprovision of $0.9$0.3 million, primarily related to accrualsa $0.4 million provision for current U.S. federal and state income taxes.
Net Increase (Decrease) in Net Assets Resulting from Operations
The net increase in net assets resulting from operations for the six months ended June 30, 2021 was $152.5 million, or $2.23 per share, compared with a net decrease of $128.1 million, or $1.97 per share, during the six months ended June 30, 2020. The tables above provide a summary of the net increase in net assets resulting from operations for the six months ended June 30, 2021.
Liquidity and Capital Resources
This “Liquidity and Capital Resources” section should be read in conjunction with the “COVID-19 Update” section above.
Cash Flows
For the ninesix months ended SeptemberJune 30, 2017,2021, we experiencedrealized a net increase in cash and cash equivalents in the amount of approximately $5.7$26.9 million, which is the net result of approximately $51.0$108.2 million of cash used in our operating activities and approximately $56.6$135.1 million of cash provided by our financing activities.
During the period, we used $51.0The $108.2 million of cash fromused in our operating activities which resulted primarily from (i) cash flows we generated from the operating profits earned through our operating activities totaling $88.2 million, which is our $105.4 million of distributable net investment income, excluding the non-cash effects of the accretion of unearned income of $12.4 million, payment-in-kind
interest income of $4.1 million, cumulative dividends of $2.7 million and the amortization expense for deferred financing costs of $2.0 million, (ii) cash uses totaling $746.9 million consisting of (a) $743.7$520.7 million for the funding of new portfolio company investments and settlement of accruals for portfolio investments existing as of December 31, 2016, (b) $2.4 million related to decreases in payables and accruals and (c) $0.8 million related to increases in other assets and (iii)2020, partially offset by (i) cash proceeds totaling $607.6$335.2 million from the sales
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and repayments of debt investments and sales of and return on capital from equity investments, (ii) cash flows that we generated from the operating profits earned totaling $34.7 million, which is our distributable net investment income, excluding the non-cash effects of equity investments.the accretion of unearned income, payment-in-kind interest income, cumulative dividends and the amortization expense for deferred financing costs, and (iii) cash proceeds of $42.6 million related to changes in other assets and liabilities.
During the nine months ended September 30, 2017, $56.6The $135.1 million inof cash was provided by our financing activities which principally consisted of (i) $118.1$300.0 million in cash proceeds from the issuance of the 3.00% Notes (ii) $52.2 million in cash proceeds from the issuance of SBIC debentures and (iii) $13.0 million in net cash proceeds from theour ATM Program (described below), (ii) $60.0 million in cash proceeds from issuance of SBIC debentures and (iii) $12.0direct stock purchase plan, partially offset by (i) $100.0 million in net borrowingsrepayments on the Credit Facility, partially offset by (i) $102.3(ii) $76.2 million in cash dividends paid to stockholders, (ii) $25.2(iii) $40.0 million in repayment of SBIC debentures, (iii) $4.4(iv) $9.5 million for debt issuance costs, SBIC debenture fees and other costs, and (v) $4.5 million for purchases of vested restricted stock from employees to satisfy their tax withholding requirements upon the vesting of such restricted stock and (iv) $1.6 million for payment of deferred debt issuance costs, SBIC debenture fees and other costs.stock.
Capital Resources
As of SeptemberJune 30, 2017,2021, we had $30.1$58.8 million in cash and cash equivalents and $230.0$686.0 million of unused capacity under the Credit Facility, which we maintain to support our investment and operating activities. As of SeptemberJune 30, 2017,2021, our net asset value totaled $1,329.7$1,604.8 million, or $23.02$23.42 per share.
The Credit Facility which provides additional liquidity to support our investment and operational activities, was amended in September 2017 to increaseactivities. As of June 30, 2021, the Credit Facility included total commitments to $585.0of $855.0 million from a diversified group of fifteen lenders. The Credit Facility matures18 lenders, held a maturity date in September 2021April 2026 and containscontained an accordion feature which allowsallowed us to increase the total commitments under the facility to up to $750.0$1,200.0 million from new and existing lenders on the same terms and conditions as the existing commitments.
Borrowings As of June 30, 2021, borrowings under the Credit Facility bearbore interest, subject to our election and resetting on a monthly basis on the first of each month, on a per annum basis at a rate equal to the applicable LIBOR rate (1.23%(0.1% as of SeptemberJune 30, 2017)2021) plus (i) 1.875% (or the applicable base rate (Prime Rate of 4.25%3.25% as of SeptemberJune 30, 2017)2021) plus 0.875%) as long as we maintain an investment grade rating and meet certain agreed upon excess collateral and maximum leverage requirements or (ii) 2.0% (or the applicable base rate plus 1.0%) if we maintain an investment grade rating but do not meet certain excess collateral and maximum leverage requirements or (iii) 2.25% (or the applicable base rate plus 1.25%) if we do not maintain an investment grade rating.otherwise. We pay unused commitment fees of 0.25% per annum on the unused lender commitments under the Credit Facility. The Credit Facility is secured by a first lien on the assets of MSCC and its subsidiaries, excluding the equity ownership or assets of the Funds and the External Investment Manager. TheAs of June 30, 2021, the Credit Facility containscontained certain affirmative and negative covenants, including but not limited to: (i) maintaining a minimum availability of at least 10% of the borrowing base,liquidity, (ii) maintaining an interest coverage ratio of at least 2.0 to 1.0, (iii) maintaining an asset coverage ratio (tangible net worth to Credit Facility borrowings) of at least 1.5 to 1.0, and (iv) maintaining a minimum tangible net worth. Theworth and (v) maintaining a minimum asset coverage ratio of 200% with respect to the consolidated assets (with certain limitations on the contribution of equity in financing subsidiaries as specified therein) of MSCC and the guarantors under the Credit Facility is provided on a revolving basis through its final maturity date in September 2021,to the secured debt of MSCC and contains two, one-year extension options which could extend the final maturity by up to two years, subject to certain conditions, including lender approval.guarantors. As of SeptemberJune 30, 2017,2021, we had $355.0$169.0 million in borrowings outstanding under the Credit Facility, the interest rate on the Credit Facility was 3.1%2.0% (based on the LIBOR rate of 0.1% as of the most recent reset date of June 1, 2021 plus 1.875%) and we were in compliance with all financial covenants of the Credit Facility.
Through the Funds, we have the ability to issue SBIC debentures guaranteed by the SBA at favorable interest rates and favorable terms and conditionsconditions. Under existing SBIC regulations, SBA-approved SBICs under common control have the ability to issue debentures guaranteed by the SBA up to a regulatory maximum amount of $350.0 million. Under existing SBA-approved commitments, we had $322.0 million of outstanding SBIC debentures guaranteed by the SBA as of June 30, 2021 through our wholly owned SBICs, which bear a weighted-average annual fixed interest rate of approximately 2.9%, paid semiannually, and mature ten years from issuance. The first maturity related to our SBIC debentures occurs in 2023, and the weighted-average remaining duration is approximately 6.3 years as of June 30, 2021. During the ninesix months ended SeptemberJune 30, 2017, we2021, Main Street issued $60.0$52.2 million of SBIC debentures and
opportunistically prepaid $25.2$40.0 million of our existing SBIC debentures that were scheduled to mature over the next year as part of an effort to manage the maturity dates of ourthe oldest SBIC debentures, leaving $75.2 million of remaining capacity under our SBIC licenses.debentures. Debentures guaranteed by the SBA have fixed interest rates that equal prevailing 10-year Treasury Note rates plus a market spread and have a maturity of ten years with interest payable semiannually. The principal amount of the debentures is not required to be paid before maturity, but may be pre-paid at any time with no prepayment penalty. Main Street expectsWe expect to issue new SBIC debentures under the SBIC program in the future in an amount up to the regulatory maximum amount of $350.0 million for affiliated SBIC funds. On September 30,
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In November 2017, through our three wholly owned SBICs, we had $274.8 million of outstanding SBIC debentures guaranteed by the SBA, which bear a weighted-average annual fixed interest rate of approximately 3.8%, paid semiannually, and mature ten years from issuance. The first maturity related to our SBIC debentures occurs in 2019, and the weighted-average remaining duration is approximately 5.8 years as of September 30, 2017.
In April 2013, we issued $92.0 million, including the underwriters' full exercise of their over-allotment option, in aggregate principal amount of the 6.125% Notes (the "6.125% Notes"). The 6.125% Notes are unsecured obligations and rank pari passu with our current and future unsecured indebtedness; senior to any of our future indebtedness that expressly provides it is subordinated to the 6.125% Notes; effectively subordinated to all of our existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness, including borrowings under our Credit Facility; and structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries, including without limitation, the indebtedness of the Funds. The 6.125% Notes mature on April 1, 2023, and may be redeemed in whole or in part at any time or from time to time at our option on or after April 1, 2018. We may from time to time repurchase 6.125% Notes in accordance with the 1940 Act and the rules promulgated thereunder. As of September 30, 2017, the outstanding balance of the 6.125% Notes was $90.7 million.
The indenture governing the 6.125% Notes (the "6.125% Notes Indenture") contains certain covenants, including covenants requiring our compliance with (regardless of whether we are subject to) the asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a)(1) of the 1940 Act, as well as covenants requiring us to provide financial information to the holders of the 6.125% Notes and the Trustee if we cease to be subject to the reporting requirements of the Securities Exchange Act of 1934. These covenants are subject to limitations and exceptions that are described in the 6.125% Notes Indenture.
In November 2014, we issued $175.0$185.0 million in aggregate principal amount of the 4.50% unsecured notes due December 1, 2022 (the “4.50% Notes (the "4.50% Notes"due 2022”) at an issue price of 99.53%99.16%. The 4.50% Notes due 2022 are unsecured obligations and rank pari passu with our current and future unsecured indebtedness; senior to any of our future indebtedness that expressly provides it is subordinated to the 4.50% Notes;Notes due 2022; effectively subordinated to all of our existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness, including borrowings under our Credit Facility; and structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries, including without limitation, the indebtedness of the Funds. The 4.50% Notes mature on December 1, 2019, anddue 2022 may be redeemed in whole or in part at any time at our option subject to certain make-whole provisions. The 4.50% Notes due 2022 bear interest at a rate of 4.50% per year payable semiannually on June 1 and December 1 of each year, beginning June 1, 2015.year. We may from time to time repurchase the 4.50% Notes due 2022 in accordance with the 1940 Act and the rules promulgated thereunder. As of SeptemberJune 30, 2017,2021, the outstanding principal balance of the 4.50% Notes due 2022 was $175.0$185.0 million.
The indenture governing the 4.50% Notes due 2022 (the "4.50%“4.50% Notes Indenture"Indenture”) contains certain covenants, including covenants requiring our compliance with (regardless of whether we are subject to) the asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a)(1) of the 1940 Act, as well as covenants requiring us to provide financial information to the holders of the 4.50% Notes due 2022 and the Trusteetrustee if we cease to be subject to the reporting requirements of the Securities
Exchange Act of 1934.Act. These covenants are subject to limitations and exceptions that are described in the 4.50% Notes Indenture. As of June 30, 2021, we were in compliance with these covenants.
DuringIn April 2019, we issued $250.0 million in aggregate principal amount of 5.20% unsecured Notes due May 1, 2024 (the “5.20% Notes”) at an issue price of 99.125%. Subsequently, in December 2019, we issued an additional $75.0 million of the 5.20% Notes at an issue price of 105.0%. Also, in July 2020, we issued an additional $125.0 million aggregate principal amount of the 5.20% Notes at an issue price of 102.674%. The 5.20% Notes issued in December 2019 and July 2020 have identical terms as, and are a part of a single series with, the 5.20% Notes issued in April 2019. The aggregate net proceeds from the 5.20% Notes issuances were used to repay a portion of the borrowings outstanding under the Credit Facility. The 5.20% Notes are unsecured obligations and rank pari passu with our current and future unsecured indebtedness; senior to any of our future indebtedness that expressly provides it is subordinated to the 5.20% Notes; effectively subordinated to all of our existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness, including borrowings under our Credit Facility; and structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries, including without limitation, the indebtedness of the Funds. The 5.20% Notes may be redeemed in whole or in part at any time at our option subject to certain make-whole provisions. The 5.20% Notes bear interest at a rate of 5.20% per year payable semiannually on May 1 and November 2015,1 of each year. We may from time to time repurchase the 5.20% Notes in accordance with the 1940 Act and the rules promulgated thereunder. As of June 30, 2021, the outstanding principal balance of the 5.20% Notes was $450.0 million.
The indenture governing the 5.20% Notes (the “5.20% Notes Indenture”) contains certain covenants, including covenants requiring our compliance with (regardless of whether we commencedare subject to) the asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a)(1) of the 1940 Act, as well as covenants requiring us to provide financial information to the holders of the 5.20% Notes and the trustee if we cease to be subject to the reporting requirements of the Exchange Act. These covenants are subject to limitations and exceptions that are described in the 5.20% Notes Indenture. As of June 30, 2021, we were in compliance with these covenants.
In January 2021, we issued $300.0 million in aggregate principal amount of 3.00% unsecured notes due July 14, 2026 (the “3.00% Notes”) at an issue price of 99.004%. The total net proceeds from the 3.00% Notes, resulting from the issue price and after underwriting discounts and estimated offering expenses payable, were approximately $294.8 million. The 3.00% Notes are unsecured obligations and rank pari passu with our current and future unsecured indebtedness; senior to any of its future indebtedness that expressly provides it is subordinated to the 3.00% Notes; effectively subordinated to all of its existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness, including borrowings under its Credit Facility; and structurally subordinated to all existing and future indebtedness and other obligations of any of its subsidiaries, including without limitation, the indebtedness of the Funds. The 3.00% Notes may be redeemed in whole or in part at any time at our option subject to certain make whole provisions. The 3.00% Notes bear interest at a rate of 3.00% per year payable semiannually on January 14 and July 14 of each year. We may from time to time repurchase the 3.00% Notes in accordance with the 1940 Act and the
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rules promulgated thereunder. As of June 30, 2021, the outstanding principal balance of the 3.00% Notes was $300.0 million.
The indenture governing the 3.00% Notes (the “3.00% Notes Indenture”) contains certain covenants, including covenants requiring our compliance with (regardless of whether we are subject to) the asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a)(1) of the 1940 Act, as well as covenants requiring us to provide financial information to the holders of the 3.00% Notes and the trustee if we cease to be subject to the reporting requirements of the Exchange Act. These covenants are subject to limitations and exceptions that are described in the 3.00% Notes Indenture. As of June 30, 2021, we were in compliance with these covenants.
We maintain a program with certain selling agents through which we can sell shares of our common stock by means of at-the-market offerings from time to time (the "ATM Program"“ATM Program”). During the ninesix months ended SeptemberJune 30, 2017,2021, we sold 3,119,247341,522 shares of our common stock at a weighted-average price of $38.33$38.14 per share and raised $119.5$13.0 million of gross proceeds under the ATM Program. Net proceeds were $118.1$12.7 million after commissions to the selling agents on shares sold and offering costs. As of SeptemberJune 30, 2017, sales transactions representing 75,4042021, 5,371,850 shares had not settled and are not included in shares issued and outstanding on the face of the consolidated balance sheet, but are included in the weighted-average shares outstanding in the consolidated statement of operations and in the shares used to calculate net asset value per share. As of September 30, 2017, there were 2,737,081 sharesremained available for sale under the ATM Program.
During the year ended December 31, 2016,2020, we sold 3,324,6462,645,778 shares of our common stock at a weighted-average price of $34.17$32.10 per share and raised $113.6$84.9 million of gross proceeds under the ATM Program. Net proceeds were $112.0$83.8 million after commissions to the selling agents on shares sold and offering costs. As of December 31, 2016, sales transactions representing 42,413 shares had not settled and were not included in shares issued and outstanding on the face of the consolidated balance sheet, but were included in the weighted-average shares outstanding in the consolidated statements of operations and in the shares used to calculate net asset value per share.
We anticipate that we will continue to fund our investment activities through existing cash and cash equivalents, cash flows generated through our ongoing operating activities, utilization of available borrowings under our Credit Facility, and a combination of future issuances of debt and equity capital. Our primary uses of funds will be investments in portfolio companies, operating expenses and cash distributions to holders of our common stock.
We periodically invest excess cash balances into "Marketablemarketable securities and idle funds investments".investments. The primary investment objective of Marketablemarketable securities and idle funds investments is to generate incremental cash returns on excess cash balances prior to utilizing those funds for investment in our LMM, Middle Market and Private Loan portfolio investments. Marketable securities and idle funds investments generally consist of debt investments, independently rated debt investments, certificates of deposit with financial institutions, diversified bond funds and publicly traded debt and equity investments. The compositionWe may also invest in short-term portfolio investments that are atypical of Marketable securities and idle funds investments will vary in a given period based upon, among other things, changes in market conditions, the underlying fundamentals in our Marketable securities and idle funds investments, our outlook regarding future LMM, Middle Market and Private Loan portfolio investment needs,investments in that they are intended to be a short-term deployment of capital and any regulatory requirements applicable to us.are more liquid than investments within the other portfolios. Short-term portfolio investments consist primarily of investments in secured debt investments and independently rated debt investments.
If our common stock trades below our net asset value per share, we will generally not be able to issue additional common stock at the market price, unless our stockholders approve such a sale and our Board of Directors makes certain determinations. We did not seek stockholder authorization to sell shares of our common stock below the then current net asset value per share of our common stock at our 20172021 annual meeting of stockholders because our common stock price per share had been tradinghas generally traded significantly above the then current net asset value per share of our common stock since 2011. We would therefore need future approval from our stockholders to issue shares below the then current net asset value per share.
In order to satisfy the Code requirements applicable to a RIC, we intend to distribute to our stockholders, after consideration and application of our ability under the Code to carry forward certain excess undistributed taxable income from one tax year into the next tax year, substantially all of our taxable income. In addition, as a BDC, we generally are required to meet a coverage ratio of total assets to total senior securities, which include borrowings and any preferred stock we may issue in the
future, of at least 200% (or 150% if certain requirements are met). This requirement limits the amount that we may borrow. In January 2008, we received an exemptive order from the SEC to exclude SBA-guaranteed debt securities issued by MSMFthe Funds and any other wholly owned subsidiaries of ours which operate as SBICs from the asset coverage requirements of the 1940 Act as applicable to us, which, in turn, enables us to fund more investments with debt capital.
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Although we have been able to secure access to additional liquidity, including through the Credit Facility, public debt issuances, leverage available through the SBIC program and equity offerings, there is no assurance that debt or equity capital will be available to us in the future on favorable terms, or at all.
Recently Issued or Adopted Accounting Standards
In May 2014, the FASB issuedSee “Note B.13 – Recently Issued or Adopted Accounting Standards Update ("ASU") 2014-09,Revenue from Contracts with Customers (Topic 606). ASU 2014-09 supersedes the revenue recognition requirements under ASC 605,Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the ASC. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Under the new guidance, an entity is required to perform the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The new guidance will significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. Additionally, the guidance requires improved disclosures as to the nature, amount, timing and uncertainty of revenue that is recognized. In March 2016, the FASB issued ASU 2016-08,Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarified the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10,Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarified the implementation guidance regarding performance obligations and licensing arrangements. In May 2016, the FASB issued ASU No. 2016-12,Revenue from Contracts with Customers (Topic 606)—Narrow-Scope Improvements and Practical Expedients, which clarified guidance on assessing collectability, presenting sales tax, measuring noncash consideration, and certain transition matters. In December 2016, the FASB issued ASU No. 2016-20,Revenue from Contracts with Customers (Topic 606)—Technical Corrections and Improvements, which provided disclosure relief, and clarified the scope and application of the new revenue standard and related cost guidance. The new guidance will be effective for the annual reporting period beginning after December 15, 2017, including interim periods within that reporting period. Early adoption would be permitted for annual reporting periods beginning after December 15, 2016. We expect to identify similar performance obligations under ASC 606 as compared with deliverables and separate units of account previously identified. As a result, we expect timing of our revenue recognition to remain the same.
In April 2015, the FASB issued ASU 2015-03,Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires debt financing costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the related debt liability, similar to the presentation of debt discounts. Additionally in August 2015, the FASB issued ASU 2015-15,Interest—Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, which provides further clarification on the same topic and states that the SEC would not object to the deferral and presentation of debt issuance costs as an asset and subsequent amortization of the deferred costs over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit
arrangement. The Company adopted the guidance for debt arrangements that are not line-of-credit arrangements for the three months ended June 30, 2017. Comparative financial statements of prior interim and annual periods have been adjusted to apply the new method retrospectively. As a result of the adoption, the Company reclassified $7.9 million of deferred financing costs assets to a direct deduction from the related debt liability on the consolidated balance sheet as of December 31, 2016. The adoption of this guidance had no impact on net assets, the consolidated statements of operations or the consolidated statements of cash flows.
In May 2015, the FASB issued ASU 2015-07,Fair Value Measurements—Disclosures for Certain Entities that Calculate Net Asset Value per Share. This amendment updates guidance intended to eliminate the diversity in practice surrounding how investments measured at net asset value under the practical expedient with future redemption dates have been categorized in the fair value hierarchy. Under the updated guidance, investments for which fair value is measured at net asset value per share using the practical expedient should no longer be categorized in the fair value hierarchy, while investments for which fair value is measured at net asset value per share but the practical expedient is not applied should continue to be categorized in the fair value hierarchy. The updated guidance requires retrospective adoption for all periods presented and is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. The Company adopted this standard during the three months ended March 31, 2016. There was no impact of the adoption of this new accounting standard on our consolidated financial statements as none of our investments are measured through the use of the practical expedient.
In February 2016, the FASB issued ASU 2016-02, Leases, which requires lessees to recognize on the balance sheet a right-of-use asset, representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. The standard requires the use of a modified retrospective transition approach, which includes a number of optional practical expedients that entities may elect to apply. The new guidance is effective for annual periods beginning after December 15, 2018, and interim periods therein. Early application is permitted. While we continue to assess the effect of adoption, we currently believe the most significant change relates to the recognition of a new right-of-use asset and lease liability on our consolidated balance sheet for our office space operating lease. We currently have one operating lease for office space and do not expect a significant change in our leasing activity between now and adoption. See further discussion of our operating lease obligation in "Note M—Commitments and Contingences" in the notesStandards” to the consolidated financial statements.
In March 2016, the FASB issued ASU 2016-09,Compensation—Stock Compensation: Improvements to Employee Share-Based Payment Accounting, which is intended to simplify several aspects of the accountingstatements included in this Quarterly Report on Form 10-Q for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2016, and interim periods therein. Early application is permitted. The Company elected to early adopt this standard during the three months ended March 31, 2016. See furthera discussion of the impact of the adoption of this standard in "Note B.8.—Summary of Significant Accounting Policies—Share-based Compensation" in the notes to consolidated financial statements.recently issued or adopted accounting standards.
In August 2016, the FASB issued ASU 2016-15,Statement of Cash Flows (Topic 230), which is intended to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2017, and interim periods therein. Early application is permitted. The impact of the adoption of this new accounting standard on our consolidated financial statements is not expected to be material.
From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted by us as of the specified effective date. We believe that the impact of recently issued standards and any that are not yet effective will not have a material impact on our consolidated financial statements upon adoption.
Inflation
Inflation has not had a significant effect on our results of operations in any of the reporting periods presented herein. However, our portfolio companies have experienced, and may in the future experience, the impacts of inflation on their operating results, including periodic escalations in their costs for labor, raw materials and third-party services and required energy consumption.
Off-Balance Sheet Arrangements
We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. These instruments include commitments to extend credit and fund equity capital and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the balance sheet. At SeptemberJune 30, 2017,2021, we had a total of $146.9$149.4 million in outstanding commitments comprised of (i) 39fifty-two investments with commitments to fund revolving loans that had not been fully drawn or term loans with additional commitments not yet funded and (ii) 11ten investments with equity capital commitments that had not been fully called.
Contractual Obligations
As of SeptemberJune 30, 2017,2021, the future fixed commitments for cash payments in connection with our SBIC debentures, the 4.50% Notes due 2022, the 6.125%5.20% Notes, the 3.00% Notes and rent obligations under our office lease for each of the next five years and thereafter are as follows:follows (dollars in thousands):
| | | | | | | | | | | | | | | | | | | | | |
|
| 2021 |
| 2022 |
| 2023 |
| 2024 |
| 2025 |
| Thereafter |
| Total | |||||||
SBIC debentures | | $ | — | | $ | — | | $ | 16,000 | | $ | 63,800 | | $ | — | | $ | 242,200 | | $ | 322,000 |
Interest due on SBIC debentures | | | 4,675 | | | 9,805 | | | 9,574 | | | 8,129 | | | 6,903 | | | 20,870 | | | 59,956 |
4.50% Notes due 2022 | | | — | | | 185,000 | | | — | | | — | | | — | | | — | | | 185,000 |
Interest due on 4.50% Notes due 2022 | | | 4,163 | | | 8,325 | | | — | | | — | | | — | | | — | | | 12,488 |
5.20% Notes due 2024 | | | — | | | — | | | — | | | 450,000 | | | — | | | — | | | 450,000 |
Interest due on 5.20% Notes due 2024 | | | 11,700 | | | 23,400 | | | 23,400 | | | 11,700 | | | — | | | — | | | 70,200 |
3.00% Notes due 2026 | | | — | | | — | | | — | | | — | | | — | | | 300,000 | | | 300,000 |
Interest due on 3.00% Notes due 2026 | | | 4,550 | | | 9,000 | | | 9,000 | | | 9,000 | | | 9,000 | | | 9,000 | | | 49,550 |
Operating Lease Obligation (1) | | | 389 | | | 790 | | | 804 | | | 818 | | | 832 | | | 1,778 | | | 5,411 |
Total | | $ | 25,477 | | $ | 236,320 | | $ | 58,778 | | $ | 543,447 | | $ | 16,735 | | $ | 573,848 | | $ | 1,454,605 |
| | 2017 | 2018 | 2019 | 2020 | 2021 | Thereafter | Total | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
SBIC debentures | $ | — | $ | — | $ | 20,000 | $ | 55,000 | $ | 40,000 | $ | 159,800 | $ | 274,800 | ||||||||
Interest due on SBIC debentures | 784 | 10,330 | 10,332 | 9,140 | 6,588 | 20,523 | 57,697 | |||||||||||||||
Notes 6.125% | — | — | — | — | — | 90,655 | 90,655 | |||||||||||||||
Interest due on 6.125% Notes | 1,388 | 5,553 | 5,553 | 5,553 | 5,553 | 6,939 | 30,539 | |||||||||||||||
4.50% Notes | — | — | 175,000 | — | — | — | 175,000 | |||||||||||||||
Interest due on 4.50% Notes | 3,938 | 7,875 | 7,875 | — | — | — | 19,688 | |||||||||||||||
Operating Lease Obligation(1) | — | 373 | 749 | 763 | 777 | 5,031 | 7,693 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Total | $ | 6,110 | $ | 24,131 | $ | 219,509 | $ | 70,456 | $ | 52,918 | $ | 282,948 | $ | 656,072 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Operating Lease Obligation means a rent payment obligation under a lease classified as an operating lease and disclosed pursuant to ASC 842, as may be modified or supplemented. |
As of SeptemberJune 30, 2017,2021, we had $355.0$169.0 million in borrowings outstanding under our Credit Facility, and the Credit Facility is currentlywas scheduled to mature in September 2021. The Credit Facility contains two, one-year extension options which could extend the maturity to September 2023, subject to lender approval. See further discussionApril 2026.
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Related Party Transactions
As discussed further above, the External Investment Manager is treated as a wholly owned portfolio company of MSCC and is included as part of our Investment Portfolio. At SeptemberJune 30,
2017, 2021, we had a receivable of approximately $2.7$4.2 million due from the External Investment Manager, which included (i) approximately $2.0$3.0 million related primarily related to operating expenses incurred by us as required to support the External Investment Manager'sManager’s business and amounts due from the External Investment Manager to Main Street under a tax sharing agreement (see further discussion above in "—Critical Accounting Policies—Income Taxes")Note B.9 and (ii) approximately $0.7Note D in the notes to consolidated financial statements) and $1.3 million of dividends declared but not paid by the External Investment Manager.
From time to time, we may make investments in clients of the External Investment Manager in the form of debt or equity capital on terms approved by our Board of Directors. In January 2021, we entered into a Term Loan Agreement with MSC Income (the “Term Loan Agreement”). The Term Loan Agreement was unanimously approved by our Board, including each director who is not an “interested person,” as such term is defined in Section 2(a)(19) of the 1940 Act and the board of directors of MSC Income, including each director who is not an “interested person” of MSC Income or the External Investment Manager. The Term Loan Agreement provides for a term loan of $40.0 million to MSC Income, bearing interest at a fixed rate of 5.00% per annum, and matures in January 2026. Borrowings under the Term Loan Agreement are expressly subordinated and junior in right of payment to all secured indebtedness of MSC Income and are subject to a two-year no-call period that expires on January 27, 2023. See Recent Developments for discussion of the recent amendment and increased commitments under the Term Loan Agreement made subsequent to June 30, 2021.
In December 2020, the External Investment Manager entered into an Investment Management Agreement with the Private Loan Fund, pursuant to which the External Investment Manager provides investment advisory and management services to the Private Loan Fund in exchange for an asset-based fee and certain incentive fees. The Private Loan Fund is a private investment fund exempt from registration under the 1940 Act that invests in debt investments in middle market companies generally with EBITDA between $7.5 million and $50 million and generally owned by a private equity sponsor, which we generally refer to as Private Loan investments. In connection with the Private Loan Fund’s initial closing in December 2020, we committed to contribute up to $10.0 million as a limited partner and will be entitled to distributions on such interest. In addition, certain of our officers and employees (and certain of their immediate family members) made capital commitments to the Private Loan Fund as limited partners and therefore have direct pecuniary interests in the Private Loan Fund. Additionally, we have provided the Private Loan Fund with a revolving line of credit pursuant to an Unsecured Revolving Promissory Note, dated February 5, 2021 (the “Private Loan Fund Loan”), in an aggregate amount equal to the amount of limited partner capital commitments to the Private Loan Fund up to $50.0 million. Borrowings under the Private Loan Fund Loan bear interest at a fixed rate of 5.00% per annum and will mature on the earlier of June 30, 2022 and the date of the Private Loan Fund’s final closing. The Private Loan Fund Loan was unanimously approved by our Board, including each director who is not an “interested person,” as such term is defined in Section 2(a)(19) of the 1940 Act and the board of directors of the Private Loan Fund, including each director who is not an “interested person” of the Private Loan Fund or the External Investment Manager.
In November 2015, our Board of Directors approved and adopted the Main Street Capital Corporation Deferred Compensation Plan (the "2015“2015 Deferred Compensation Plan"Plan”). The 2015 Deferred Compensation Plan became effective on January 1, 2016 and replaced the Deferred Compensation Plan for Non-Employee Directors previously adopted by the Board of Directors in June 2013 (the "2013“2013 Deferred Compensation Plan"Plan”). Under the 2015 Deferred Compensation Plan, non-employee directors and certain key employees may defer receipt of some or all of their cash compensation and directors'directors’ fees, subject to certain limitations. Individuals participating in the 2015 Deferred Compensation Plan receive distributions of their respective balances based on predetermined payout schedules or other events as defined by the plan and are also able to direct investments made on their behalf among investment alternatives permitted from time to time under the plan, including phantom Main Street stock units. As of SeptemberJune 30, 2017, $3.82021, $14.3 million of compensation and directors' feesdividend reinvestments net of unrealized gains and losses and distributions had been deferred under the 2015 Deferred Compensation Plan (including amounts previously deferred under the 2013 Deferred Compensation Plan). Of this amount, $2.4$6.5 million washad been deferred into phantom Main Street stock units, representing 72,228157,054 shares of our common stock. Including phantom stock units issued through dividend reinvestment, the phantom stock units outstanding as of September 30, 2017 represented 84,963 shares of ourMain Street’s common stock. Any amounts deferred under the plan represented by phantom Main Street stock units will not be issued or included as outstanding on the consolidated statements of changes in net assets until such shares are actually distributed to the participant in accordance with the plan, but the related phantom stock units are included in operating expenses and weighted-average shares outstanding with the related dollar amount of the deferral included in ourtotal expenses in Main Street’s consolidated statements of operations as earned. The dividend amounts related to additional phantom stock units
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are included in the statements of changes in net assets as an increase to dividends to stockholders offset by a corresponding increase to additional paid-in capital.
Recent Developments
In October 2017, we declared a semi-annual supplemental cash dividend of $0.275 per share payable in December 2017. This supplemental cash dividend is in addition to the previously announced regular monthly cash dividends that we declared for the fourth quarter of 2017 of $0.190 per share for each of October, November and December 2017.
In October 2017,During August 2021, we declared regular monthly dividends of $0.190$0.210 per share for each month of January, FebruaryOctober, November and MarchDecember of 2018.2021. These regular monthly dividends equal a total of $0.570$0.630 per share for the firstfourth quarter of 2018 and represent2021, representing a 2.7%2.4% increase from the regular monthly dividends paid in the fourth quarter of 2020. Including the regular monthly dividends declared for the first quarterthird and fourth quarters of 2017. Including the semi-annual supplemental dividend declared for December 2017 and the regular monthly dividends declared for the fourth quarter of 2017 and first quarter of 2018,2021, we will have paid $21.960$32.075 per share in cumulative dividends since our October 2007 initial public offering.
In July 2021, we amended the Term Loan Agreement with MSC Income (the “July 2021 Term Loan”) to provide for up to an additional $35.0 million of borrowings on substantially the same terms as the Term Loan Agreement, $20.0 million of which was funded at the time of closing and with up to $15.0 million available to MSC Income in two equal delayed draws until January 27, 2022. The July 2021 Term Loan was unanimously approved by our Board, including each director who is not an “interested person,” as such term is defined in Section 2(a)(19) of the 1940 Act, and the board of directors of MSC Income, including each director who is not an “interested person” of MSC Income or the External Investment Manager.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are subject to financial market risks, including changes in interest rates. Changesrates, and changes in interest rates may affect both our cost of fundinginterest expense on the debt outstanding under our Credit Facility and our interest income from portfolio investments. Our risk management systems and procedures are designed to identify and analyze our risk, to set appropriate policies and limits and to continually monitor these risks. Our investment income will be affected by changes in various interest rates, including LIBOR and prime rates, to the extent that any debt investments include floating interest rates. See “Risk Factors—Risks Relating to Our Investments — Changes relating to the LIBOR calculation process, the phase-out of LIBOR and the use of replacement rates for LIBOR may adversely affect the value of our portfolio securities.”, “Risk Factors — Risks Relating to Our Investments — Changes in interest rates may affect our cost of capital, net investment income and value of our investments.” and “Risk Factors — Risks Relating to Our Debt Financing — Because we borrow money, the potential for gain or loss on amounts invested in us is magnified and may increase the risk of investing in us.” included in our Form 10-K for the fiscal year ended December 31, 2020 for more information regarding risks associated with our debt investments and borrowings that utilize LIBOR as a reference rate.
The majority of our debt investments are made with either fixed interest rates or floating rates that are subject to contractual minimum interest rates for the term of the investment. As of SeptemberJune 30, 2017,2021, approximately 70%70.4% of our debt investment portfolio (at
cost) bore interest at floating rates, 96%86.1% of which were subject to contractual minimum interest rates. Our interest expense will be affected by changes in the published LIBOR rate in connection with our Credit Facility; however, the interest rates on our outstanding SBIC debentures, 3.00% Notes, 4.50% Notes due 2022 and 6.125%5.20% Notes, which collectively comprise the majority of our outstanding debt, are fixed for the life of such debt. As of SeptemberJune 30, 2017,2021, we had not entered into any interest rate hedging arrangements. Due to our limited use of derivatives, we have claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act and, therefore, are not subject to registration or regulation as a pool operator under such Act. The following table
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shows the approximate annualized increase or decrease in the components of net investment income due to hypothetical base rate changes in interest rates, assuming no changes in our investments and borrowings as of SeptemberJune 30, 2017.2021.
| | | | | | | | | | | | | |||||||||||||
|
| Increase |
| (Increase) |
| Increase |
| Increase | |||||||||||||||||
| | (Decrease) | | Decrease | | (Decrease) in Net | | (Decrease) in Net | |||||||||||||||||
| | in Interest | | in Interest | | Investment | | Investment | |||||||||||||||||
Basis Point Change | Increase (Decrease) in Interest Income | (Increase) Decrease in Interest Expense | Increase (Decrease) in Net Investment Income | Increase (Decrease) in Net Investment Income per Share |
| Income |
| Expense |
| Income |
| Income per Share | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | (dollars in thousands) | | |||||||||||||||||||||||
| | (dollars in thousands, except per share amounts) | | | | ||||||||||||||||||||
(150) | | $ | (307) | | $ | 186 | | $ | (121) | | $ | — | |||||||||||||
(100) | |
| (300) | |
| 186 | |
| (114) | |
| — | |||||||||||||
(50) | |
| (285) | |
| 186 | |
| (99) | |
| — | |||||||||||||
(25) | $ | (2,778 | ) | $ | 888 | $ | (1,890 | ) | $ | (0.03 | ) | |
| (277) | |
| 186 | |
| (91) | |
| — | ||
25 | 2,874 | (887 | ) | 1,987 | 0.03 | |
| 553 | |
| (423) | |
| 130 | |
| — | ||||||||
50 | 5,769 | (1,775 | ) | 3,994 | 0.07 | |
| 1,123 | |
| (845) | |
| 278 | |
| — | ||||||||
75 | | | 1,868 | | | (1,268) | | | 600 | | | 0.01 | |||||||||||||
100 | 11,571 | (3,550 | ) | 8,021 | 0.14 | |
| 3,926 | |
| (1,690) | |
| 2,236 | |
| 0.03 | ||||||||
125 | | | 7,116 | | | (2,113) | | | 5,003 | | | 0.07 | |||||||||||||
150 | 17,428 | (5,325 | ) | 12,103 | 0.21 | | | 10,544 | | | (2,535) | | | 8,009 | | | 0.12 | ||||||||
200 | 23,285 | (7,100 | ) | 16,185 | 0.28 | ||||||||||||||||||||
300 | 34,998 | (10,650 | ) | 24,348 | 0.42 | ||||||||||||||||||||
400 | 46,712 | (14,200 | ) | 32,512 | 0.56 | ||||||||||||||||||||
The hypothetical results assume that all LIBOR and prime rate changes would be effective on the first day of the period. However, the contractual LIBOR and prime rate reset dates would vary throughout the period, on either a monthly or quarterly basis, for both our investments and our Credit Facility. The hypothetical results would also be impacted by the changes in the amount of debt outstanding under our Credit Facility (with an increase (decrease) in the debt outstanding under the Credit Facility resulting in an (increase) decrease in the hypothetical interest expense).
Item 4. Controls and Procedures
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chairman and Chief Executive Officer, our President, our Chief Financial Officer, our Chief Compliance Officer and our Chief Accounting Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 of the Securities Exchange Act of 1934)Act). Based on that evaluation, our Chairman and Chief Executive Officer, our President, our Chief Financial Officer, our Chief Compliance Officer and our Chief Accounting Officer have concluded that our current disclosure controls and procedures are effective in timely alerting them of material information relating to us that is required to be disclosed in the reports we file or submit under the Securities Exchange ActAct. Except for the adoption of 1934. Therepolicies and procedures pursuant to Rule 2a-5 (as discussed in Note B.1 above), there have been no changes in our internal control over financial reporting that occurred during the quarter ended SeptemberJune 30, 20172021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART PART II—OTHER INFORMATION
We may, from time to time, be involved in litigation arising out of our operations in the normal course of business or otherwise. Furthermore, third parties may seek to impose liability on us in connection with the activities of our portfolio companies. While the outcome of any current legal proceedings cannot at this time be predicted with certainty, we do not expect any current matters will materially affect our financial condition or results of operations; however, there can be no assurance whether any pending legal proceedings will have a material adverse effect on our financial condition or results of operations in any future reporting period.
In addition to the other information set forth in this report, you should carefully consider the risk factors described in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which could materially affect our business, financial condition and/or operating results. There have been no material changes to the risk factors as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 20162020.
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The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we filed with the SEC on February 24, 2017,currently deem to be immaterial also may materially and as updated inadversely affect our registration statement on Form N-2 filed on April 26, 2017.business, financial condition and/or operating results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended SeptemberJune 30, 2017,2021, we issued 42,49491,632 shares of our common stock under our dividend reinvestment plan. These issuances were not subject to the registration requirements of the Securities Act of 1933, as amended. The aggregate value of the shares of common stock issued during the three months ended SeptemberJune 30, 20172021 under the dividend reinvestment plan was approximately $1.7$3.8 million.
ExpansionUpon vesting of Board of Directors and Appointment of Director
On October 31, 2017,restricted stock awarded pursuant to our Board of Directors increased the size of the Board from eightemployee equity compensation plan, shares may be withheld to nine directors and appointed Valerie L. Bannermeet applicable tax withholding requirements. Any withheld shares are treated as director to fill the vacancy createdcommon stock purchases by the increase to serve untilCompany in our 2018 Annual Meetingconsolidated financial statements as they reduce the number of Stockholders. Ms. Banner was also appointed to serve onshares received by employees upon vesting (see “Purchase of vested stock for employee payroll tax withholding” in the Nominating and Corporate Governance Committeeconsolidated statements of the Board.changes in net assets for share amounts withheld).
Ms. Banner, age 62, has served as Vice President, General Counsel and Corporate Secretary of Exterran Corporation (NYSE: EXTN) since November 2015. Prior to the spin-off of Exterran Corporation from Archrock, Inc., formerly known as Exterran Holdings, Inc. (NYSE: AROC, formerly EXH), in November 2015, Ms. Banner served as Associate General Counsel of Exterran Holdings from 2008 to 2015 and as special counsel from 2007 to 2008. Prior to the merger of Hanover Compressor Company and Universal Compression Holdings, Inc. in August 2007 to form Exterran Holdings, she served Universal as special counsel from 2000 to 2007, and served as Senior Vice President, General Counsel and Secretary from 1998 through 2000. Prior to joining Universal, Ms. Banner served as counsel for several publicly traded companies and was in private practice, having begun her career as an associate with Andrews & Kurth LLP. Ms. Banner also serves as an officer and director of certain Exterran Corporation subsidiaries.
Ms. Banner will be entitled to receive compensation for her service on the Board consistent with our director compensation program for non-employee directors. In connection with her appointment to the Board, we entered into our standard form of indemnification agreement with Ms. Banner, the form of which was previously filed as Exhibit (k)(13) to our Pre-Effective Amendment No. 3 to Registration Statement on Form N-2 (Reg. No. 333-142879) filed on September 21, 2007.
The Board has determined that Ms. Banner qualifies as an independent director under the listing standards of the New York Stock Exchange and under section 2(a)(19) of the 1940 Act as not an
120
"interested person". There are no arrangements or understandings between Ms. Banner and any other persons pursuant to which she was selected as director. There are no current or proposed transactions between us and Ms. Banner or her immediate family members that would require disclosure under Item 404(a) of Regulation S-K promulgated by the SEC.
Listed below are the exhibits which are filed as part of this report (according to the number assigned to them in Item 601 of Regulation S-K):
| | | ||||
Exhibit | Description of Exhibit | |||||
10.1* | | |||||
31.1 | | |||||
31.2 | | |||||
32.1 | | |||||
32.2 | | |||||
* | Exhibit previously filed with the Securities and Exchange Commission, as indicated, and incorporated herein by reference. |
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | |
| Main Street Capital Corporation | |
| /s/ DWAYNE L. HYZAK | |
Date: August 6, 2021 | Dwayne L. Hyzak | |
|
| |
| (principal executive officer) | |
| /s/ BRENT D. SMITH | |
Date: August 6, 2021 | Brent D. Smith | |
| Chief Financial Officer and Treasurer | |
| (principal financial officer) | |
| /s/ LANCE A. PARKER | |
Date: August 6, 2021 | Lance A. Parker | |
| Vice President and Chief Accounting Officer | |
| (principal accounting officer) |
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