10-Q 1 a11-25861_110q.htm 10-Q

Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

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

 

For the quarterly period ended September 30, 2011

 

OR

 

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

 

For the transition period from:               to              

 

Commission File Number: 001-33723

 

Main Street Capital Corporation

(Exact name of registrant as specified in its charter)

 

Maryland

 

41-2230745

(State or other jurisdiction of incorporation or organization)

 

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

 

 

 

1300 Post Oak Boulevard, Suite 800

 

 

Houston, TX

 

77056

(Address of principal executive offices)

 

(Zip Code)

 

(713) 350-6000

(Registrant’s telephone number including area code)

 

n/a

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

 

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

 

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

 

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

 

Large accelerated filer o

 

Accelerated filer x

 

 

 

Non-accelerated filer o

 

Smaller reporting company o

 

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

 

The number of shares outstanding of the issuer’s common stock as of November 3, 2011 was 26,669,348.

 

 

 



Table of Contents

 

TABLE OF CONTENTS

 

 

PART I
FINANCIAL INFORMATION

 

 

 

 

 

 

Item 1.

Financial Statements

 

 

 

 

 

 

 

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

 

1

 

 

 

 

 

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

 

2

 

 

 

 

 

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

 

3

 

 

 

 

 

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

 

4

 

 

 

 

 

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

 

5

 

 

 

 

 

Consolidated Schedule of Investments — December 31, 2010

 

15

 

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

 

27

 

 

 

 

Item 2.

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

 

48

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

 

65

 

 

 

 

Item 4.

Controls and Procedures

 

65

 

 

 

 

 

PART II
OTHER INFORMATION

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

65

 

 

 

 

Item 1A.

Risk Factors

 

65

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

66

 

 

 

 

Item 6.

Exhibits

 

66

 

 

 

 

 

Signatures

 

67

 



Table of Contents

 

PART I — FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

 

 

 

September 30, 2011

 

December 31, 2010

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Portfolio investments at fair value:

 

 

 

 

 

Control investments (cost: $193,683,126 and $161,009,443 as of September 30, 2011 and December 31, 2010, respectively)

 

$

219,026,676

 

$

174,596,394

 

Affiliate investments (cost: $95,369,438 and $65,650,789 as of September 30, 2011 and December 31, 2010, respectively)

 

128,108,793

 

80,206,804

 

Non-Control/Non-Affiliate investments (cost: $151,074,694 and $91,911,304 as of September 30, 2011 and December 31, 2010, respectively)

 

147,937,952

 

91,956,221

 

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

 

1,916,322

 

2,051,655

 

 

 

 

 

 

 

Total portfolio investments (cost: $444,411,300 and $322,855,578 as of September 30, 2011 and December 31, 2010, respectively)

 

496,989,743

 

348,811,074

 

Marketable securities and idle funds investments (cost: $137,509,250 and $67,970,907 as of September 30, 2011 and December 31, 2010, respectively)

 

134,727,694

 

68,752,858

 

 

 

 

 

 

 

Total investments (cost: $581,920,550 and $390,826,485 as of September 30, 2011 and December 31, 2010, respectively)

 

631,717,437

 

417,563,932

 

 

 

 

 

 

 

Cash and cash equivalents

 

25,126,457

 

22,334,340

 

Deferred tax asset, net

 

 

1,958,593

 

Interest receivable and other assets

 

5,322,673

 

4,523,792

 

Deferred financing costs (net of accumulated amortization of $1,985,141 and $1,504,584 as of September 30, 2011 and December 31, 2010, respectively)

 

3,789,058

 

2,543,645

 

 

 

 

 

 

 

Total assets

 

$

665,955,625

 

$

448,924,302

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

SBIC debentures (par: $220,000,000 and $180,000,000 as of September 30, 2011 and December 31, 2010, respectively; par of $95,000,000 is recorded at a fair value of $76,272,925 and $70,557,975 as of September 30, 2011 and December 31, 2010, respectively)

 

$

201,272,925

 

$

155,557,975

 

Credit facility

 

114,000,000

 

39,000,000

 

Interest payable

 

920,931

 

3,194,870

 

Dividend payable

 

3,134,611

 

 

Deferred tax liability, net

 

1,043,210

 

 

Payable to affiliated Investment Manager

 

3,105,001

 

15,124

 

Accounts payable and other liabilities

 

1,443,061

 

1,173,295

 

 

 

 

 

 

 

Total liabilities

 

324,919,739

 

198,941,264

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

NET ASSETS

 

 

 

 

 

 

 

 

 

 

 

Common stock, $0.01 par value per share (150,000,000 shares authorized; 23,219,348 and 18,797,444 issued and outstanding as of September 30, 2011 and December 31, 2010, respectively)

 

232,193

 

187,975

 

Additional paid-in capital

 

301,269,008

 

224,485,165

 

Accumulated net investment income

 

9,203,152

 

9,261,405

 

Accumulated net realized loss from investments

 

(19,624,729

)

(20,541,897

)

Net unrealized appreciation, net of income taxes

 

45,460,492

 

32,141,997

 

 

 

 

 

 

 

Total Net Asset Value

 

336,540,116

 

245,534,645

 

 

 

 

 

 

 

Noncontrolling interest

 

4,495,770

 

4,448,393

 

 

 

 

 

 

 

Total net assets including noncontrolling interests

 

341,035,886

 

249,983,038

 

 

 

 

 

 

 

Total liabilities and net assets

 

$

665,955,625

 

$

448,924,302

 

 

 

 

 

 

 

NET ASSET VALUE PER SHARE

 

$

14.49

 

$

13.06

 

 

The accompanying notes are an integral part of these financial statements

 

1



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Operations

(Unaudited)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

INVESTMENT INCOME:

 

 

 

 

 

 

 

 

 

Interest, fee and dividend income:

 

 

 

 

 

 

 

 

 

Control investments

 

$

6,361,495

 

$

4,497,476

 

$

18,502,354

 

$

12,625,127

 

Affiliate investments

 

3,185,316

 

1,975,131

 

8,468,026

 

5,737,576

 

Non-Control/Non-Affiliate investments

 

4,700,084

 

2,124,603

 

12,312,054

 

4,674,031

 

Total interest, fee and dividend income

 

14,246,895

 

8,597,210

 

39,282,434

 

23,036,734

 

Interest from marketable securities, idle funds and other

 

2,839,438

 

408,745

 

7,285,774

 

1,794,279

 

Total investment income

 

17,086,333

 

9,005,955

 

46,568,208

 

24,831,013

 

EXPENSES:

 

 

 

 

 

 

 

 

 

Interest

 

(3,715,733

)

(2,283,262

)

(9,881,745

)

(6,388,367

)

General and administrative

 

(478,960

)

(367,074

)

(1,585,503

)

(1,038,972

)

Expenses reimbursed to affiliated Investment Manager

 

(1,949,656

)

(1,151,713

)

(6,287,068

)

(3,634,511

)

Share-based compensation

 

(580,622

)

(446,342

)

(1,466,416

)

(1,049,258

)

Total expenses

 

(6,724,971

)

(4,248,391

)

(19,220,732

)

(12,111,108

)

NET INVESTMENT INCOME

 

10,361,362

 

4,757,564

 

27,347,476

 

12,719,905

 

 

 

 

 

 

 

 

 

 

 

NET REALIZED GAIN (LOSS) FROM INVESTMENTS:

 

 

 

 

 

 

 

 

 

Control investments

 

407,168

 

(1,868,465

)

407,168

 

(3,587,638

)

Non-Control/Non-Affiliate investments

 

750,000

 

156,476

 

771,460

 

156,476

 

Marketable securities and idle funds investments

 

290,582

 

179,633

 

540,236

 

493,581

 

Total net realized gain (loss) from investments

 

1,447,750

 

(1,532,356

)

1,718,864

 

(2,937,581

)

NET REALIZED INCOME

 

11,809,112

 

3,225,208

 

29,066,340

 

9,782,324

 

 

 

 

 

 

 

 

 

 

 

NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):

 

 

 

 

 

 

 

 

 

Portfolio investments

 

10,700,680

 

5,314,507

 

26,191,990

 

11,386,598

 

Marketable securities and idle funds investments

 

(4,250,244

)

335,205

 

(3,563,510

)

103,924

 

SBIC debentures

 

(3,635,658

)

3,035,336

 

(5,714,950

)

4,792,390

 

Investment in affiliated Investment Manager

 

(48,327

)

(55,462

)

(135,333

)

(341,658

)

Total net change in unrealized appreciation

 

2,766,451

 

8,629,586

 

16,778,197

 

15,941,254

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

(139,490

)

(358,647

)

(3,302,102

)

(779,907

)

Bargain purchase gain

 

 

 

 

4,890,582

 

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

 

14,436,073

 

11,496,147

 

42,542,435

 

29,834,253

 

Noncontrolling interest

 

 

(552,845

)

(157,600

)

(961,740

)

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

 

$

14,436,073

 

$

10,943,302

 

$

42,384,835

 

$

28,872,513

 

 

 

 

 

 

 

 

 

 

 

NET INVESTMENT INCOME PER SHARE - BASIC AND DILUTED

 

$

0.44

 

$

0.28

 

$

1.23

 

$

0.81

 

NET REALIZED INCOME PER SHARE - BASIC AND DILUTED

 

$

0.50

 

$

0.19

 

$

1.30

 

$

0.62

 

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

 

$

0.62

 

$

0.65

 

$

1.94

 

$

1.87

 

DIVIDENDS PAID PER SHARE

 

$

0.39

 

$

0.38

 

$

1.16

 

$

1.13

 

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED

 

23,194,896

 

16,878,088

 

21,824,775

 

15,469,890

 

 

The accompanying notes are an integral part of these financial statements

 

2


 


Table of Contents

 

MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Changes in Net Assets

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Unrealized

 

 

 

 

 

Total Net

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

Appreciation from

 

 

 

 

 

Assets

 

 

 

Common Stock

 

Additional

 

Accumulated

 

Net Realized

 

Investments,

 

 

 

 

 

Including

 

 

 

Number

 

Par

 

Paid-In

 

Net Investment

 

Loss From

 

Net of Income

 

Total Net

 

Noncontrolling

 

Noncontrolling

 

 

 

of Shares

 

Value

 

Capital

 

Income

 

Investments

 

Taxes

 

Asset Value

 

Interest

 

Interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31, 2009

 

10,842,447

 

$

108,425

 

$

123,534,156

 

$

7,269,866

 

$

(15,922,020

)

$

14,669,704

 

$

129,660,131

 

$

 

$

129,660,131

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MSC II exchange offer and related transactions

 

1,246,803

 

12,468

 

20,080,623

 

4,890,582

 

 

 

24,983,673

 

3,237,210

 

28,220,883

 

Public offering of common stock, net of offering costs

 

6,095,000

 

60,950

 

85,864,532

 

 

 

 

85,925,482

 

 

85,925,482

 

Share-based compensation

 

 

 

1,049,258

 

 

 

 

1,049,258

 

 

1,049,258

 

Dividend reinvestment

 

347,474

 

3,474

 

5,388,728

 

 

 

 

5,392,202

 

 

5,392,202

 

Issuance of restricted stock

 

157,277

 

1,573

 

(1,573

)

 

 

 

 

 

 

Purchase of vested stock for employee payroll tax withholding

 

(22,814

)

(228

)

(369,345

)

 

 

 

(369,573

)

 

(369,573

)

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

 

 

 

(13,715,958

)

 

 

 

(13,715,958

)

 

(13,715,958

)

Dividends to stockholders

 

 

 

 

(17,530,548

)

(1,685,972

)

 

(19,216,520

)

 

(19,216,520

)

Net increase resulting from operations

 

 

 

 

12,719,905

 

(2,937,581

)

15,161,347

 

24,943,671

 

 

24,943,671

 

Noncontrolling interest

 

 

 

 

 

 

(961,740

)

(961,740

)

961,740

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at September 30, 2010

 

18,666,187

 

$

186,662

 

$

221,830,421

 

$

7,349,805

 

$

(20,545,573

)

$

28,869,311

 

$

237,690,626

 

$

4,198,950

 

$

241,889,576

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31, 2010

 

18,797,444

 

$

187,975

 

$

224,485,165

 

$

9,261,405

 

$

(20,541,897

)

$

32,141,997

 

$

245,534,645

 

$

4,448,393

 

$

249,983,038

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Public offering of common stock, net of offering costs

 

4,025,000

 

40,250

 

70,273,893

 

 

 

 

70,314,143

 

 

70,314,143

 

Share-based compensation

 

 

 

1,466,416

 

 

 

 

1,466,416

 

 

1,466,416

 

Purchase of vested stock for employee payroll tax withholding

 

(32,725

)

(327

)

(674,498

)

 

 

 

(674,825

)

 

 

(674,825

)

Dividend reinvestment

 

303,659

 

3,036

 

5,719,291

 

 

 

 

5,722,327

 

 

5,722,327

 

Issuance of restricted stock

 

125,970

 

1,259

 

(1,259

)

 

 

 

 

 

 

Distributions to noncontrolling interest

 

 

 

 

 

 

 

 

(110,223

)

(110,223

)

Dividends to stockholders

 

 

 

 

(27,405,729

)

(801,696

)

 

(28,207,425

)

 

(28,207,425

)

Net increase resulting from operations

 

 

 

 

27,347,476

 

1,718,864

 

13,476,095

 

42,542,435

 

 

42,542,435

 

Noncontrolling interest

 

 

 

 

 

 

(157,600

)

(157,600

)

157,600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at September 30, 2011

 

23,219,348

 

$

232,193

 

$

301,269,008

 

$

9,203,152

 

$

(19,624,729

)

$

45,460,492

 

$

336,540,116

 

$

4,495,770

 

$

341,035,886

 

 

The accompanying notes are an integral part of these financial statements

 

3


 


Table of Contents

 

MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2011

 

2010

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

Net increase in net assets resulting from operations

 

$

42,542,435

 

$

29,834,253

 

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

 

 

 

 

 

Net change in unrealized appreciation

 

(16,778,197

)

(15,941,254

)

Net realized (gain) loss from investments

 

(1,718,864

)

2,937,581

 

Bargain purchase gain

 

 

(4,890,582

)

Accretion of unearned income

 

(4,040,727

)

(1,574,423

)

Net payment-in-kind interest accrual

 

(2,998,424

)

(1,412,345

)

Share-based compensation expense

 

1,466,416

 

1,049,258

 

Amortization of deferred financing costs

 

480,557

 

319,473

 

Deferred taxes

 

3,001,803

 

629,607

 

Changes in other assets and liabilities:

 

 

 

 

 

Interest receivable and other assets

 

(1,273,071

)

(943,967

)

Interest payable

 

(2,273,939

)

(1,729,091

)

Payable to affiliated Investment Manager

 

3,089,877

 

493,357

 

Accounts payable and other liabilities

 

269,766

 

(52,279

)

Deferred fees and other

 

1,237,740

 

1,422,969

 

Net cash provided by operating activities

 

23,005,372

 

10,142,557

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

Investments in portfolio companies

 

(152,547,821

)

(93,088,914

)

Principal payments received on loans and debt securities in portfolio companies

 

43,834,237

 

20,922,671

 

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

 

886,176

 

3,151,500

 

Cash acquired in MSC II exchange offer

 

 

2,489,920

 

Investments in marketable securities and idle funds investments

 

(133,698,255

)

(62,004,440

)

Proceeds from marketable securities and idle funds investments

 

57,859,770

 

29,154,403

 

Net cash used in investing activities

 

(183,665,893

)

(99,374,860

)

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

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

 

70,314,143

 

85,925,482

 

Distributions to noncontrolling interest

 

(110,223

)

 

Dividends paid to stockholders

 

(19,350,487

)

(11,491,053

)

Proceeds from issuance of SBIC debentures

 

40,000,000

 

45,000,000

 

Proceeds from credit facility

 

144,000,000

 

36,650,000

 

Repayments on credit facility

 

(69,000,000

)

(36,650,000

)

Purchase of vested stock for employee payroll tax withholding

 

(674,825

)

(369,573

)

Payment of deferred loan costs and SBIC debenture fees

 

(1,725,970

)

(2,118,129

)

Net cash provided by financing activities

 

163,452,638

 

116,946,727

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

2,792,117

 

27,714,424

 

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

22,334,340

 

30,619,998

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

25,126,457

 

$

58,334,422

 

 

The accompanying notes are an integral part of these financial statements

 

4



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2011

(Unaudited)

 

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

 

Industry

 

Principal (6)

 

Cost (6)

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Control Investments (3)

 

 

 

 

 

 

 

 

 

Café Brazil, LLC

 

Casual Restaurant Group

 

 

 

 

 

 

 

12% Secured Debt (Maturity - April 20, 2013)

 

 

 

1,600,000

 

1,598,553

 

1,600,000

 

Member Units (Fully diluted 41.0%) (7)

 

 

 

 

 

41,837

 

3,430,000

 

 

 

 

 

 

 

1,640,390

 

5,030,000

 

 

 

 

 

 

 

 

 

 

 

California Healthcare Medical Billing, Inc.

 

Healthcare Billing and Records Management

 

 

 

 

 

 

 

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

 

 

 

8,623,000

 

8,275,075

 

8,529,138

 

Warrants (Fully diluted 20.1%)

 

 

 

 

 

1,193,333

 

3,380,333

 

Common Stock (Fully diluted 9.9%)

 

 

 

 

 

1,176,667

 

1,560,000

 

 

 

 

 

 

 

10,645,075

 

13,469,471

 

 

 

 

 

 

 

 

 

 

 

CBT Nuggets, LLC

 

Produces and Sells IT Certification Training Videos

 

 

 

 

 

 

 

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

 

 

 

2,225,000

 

2,225,000

 

2,225,000

 

Member Units (Fully diluted 40.8%) (7)

 

 

 

 

 

1,299,520

 

4,590,000

 

 

 

 

 

 

 

3,524,520

 

6,815,000

 

 

 

 

 

 

 

 

 

 

 

Ceres Management, LLC (Lamb’s)

 

Aftermarket Automotive Services Chain

 

 

 

 

 

 

 

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

 

 

 

3,770,000

 

3,745,757

 

3,745,757

 

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

 

 

 

1,126,833

 

1,126,833

 

1,126,833

 

Member Units (Fully diluted 79%)

 

 

 

 

 

4,423,000

 

2,049,664

 

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

 

 

 

 

 

625,000

 

750,000

 

 

 

 

 

 

 

9,920,590

 

7,672,254

 

 

 

 

 

 

 

 

 

 

 

Condit Exhibits, LLC

 

Tradeshow Exhibits/Custom Displays

 

 

 

 

 

 

 

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

 

 

 

4,430,948

 

4,401,916

 

4,401,916

 

Warrants (Fully diluted 47.9%)

 

 

 

 

 

320,000

 

400,000

 

 

 

 

 

 

 

4,721,916

 

4,801,916

 

 

 

 

 

 

 

 

 

 

 

Currie Acquisitions, LLC

 

Consumer Products

 

 

 

 

 

 

 

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

 

 

 

4,750,000

 

4,075,040

 

2,075,040

 

Warrants (Fully diluted 47.3%)

 

 

 

 

 

2,566,204

 

 

 

 

 

 

 

 

6,641,244

 

2,075,040

 

 

 

 

 

 

 

 

 

 

 

Gulf Manufacturing, LLC

 

Industrial Metal Fabrication

 

 

 

 

 

 

 

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

 

 

 

1,185,131

 

1,185,131

 

1,185,131

 

Member Units (Fully diluted 34.2%) (7)

 

 

 

 

 

2,979,813

 

8,860,000

 

 

 

 

 

 

 

4,164,944

 

10,045,131

 

 

 

 

 

 

 

 

 

 

 

Harrison Hydra-Gen, Ltd.

 

Manufacturer of Hydraulic Generators

 

 

 

 

 

 

 

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

 

 

 

5,507,375

 

4,908,144

 

5,230,000

 

Preferred Stock (8% cumulative) (7)

 

 

 

 

 

1,060,666

 

1,060,666

 

Warrants (Fully diluted 35.2%)

 

 

 

 

 

717,640

 

1,710,000

 

 

 

 

 

 

 

6,686,450

 

8,000,666

 

 

 

 

 

 

 

 

 

 

 

Hawthorne Customs & Dispatch Services, LLC

 

Transportation/ Logistics

 

 

 

 

 

 

 

Member Units (Fully diluted 47.62%) (7)

 

 

 

 

 

589,398

 

1,080,000

 

Member Units (Wallisville Real Estate, LLC) (Fully diluted 47.62%) (7)

 

 

 

 

 

1,214,784

 

1,214,784

 

 

 

 

 

 

 

1,804,182

 

2,294,784

 

 

 

 

 

 

 

 

 

 

 

Hydratec, Inc.

 

Agricultural Services

 

 

 

 

 

 

 

Common Stock (Fully diluted 92.5%) (7)

 

 

 

 

 

7,090,911

 

11,455,911

 

 

 

 

 

 

 

 

 

 

 

Indianapolis Aviation Partners, LLC

 

FBO / Aviation Support Services

 

 

 

 

 

 

 

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

 

 

 

4,270,000

 

3,983,533

 

4,120,000

 

Warrants (Fully diluted 30.1%)

 

 

 

 

 

1,129,286

 

1,410,286

 

 

 

 

 

 

 

5,112,819

 

5,530,286

 

 

5



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2011

(Unaudited)

 

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

 

Industry

 

Principal (6)

 

Cost (6)

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Control Investments (3)

 

 

 

 

 

 

 

 

 

Jensen Jewelers of Idaho, LLC

 

Retail Jewelry

 

 

 

 

 

 

 

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

 

 

 

2,260,000

 

2,259,642

 

2,260,000

 

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

 

 

 

2,344,898

 

2,344,898

 

2,344,898

 

Member Units (Fully diluted 60.8%) (7)

 

 

 

 

 

811,000

 

1,750,000

 

 

 

 

 

 

 

5,415,540

 

6,354,898

 

 

 

 

 

 

 

 

 

 

 

Lighting Unlimited, LLC

 

Commercial and Residential Lighting Products and Design Services

 

 

 

 

 

 

 

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

 

 

 

2,000,000

 

1,978,300

 

1,978,300

 

Preferred Stock (non-voting)

 

 

 

 

 

510,098

 

510,098

 

Warrants (Fully diluted 7.1%)

 

 

 

 

 

54,000

 

 

Common Stock (Fully diluted 70.0%)

 

 

 

 

 

100,000

 

100,000

 

 

 

 

 

 

 

2,642,398

 

2,588,398

 

 

 

 

 

 

 

 

 

 

 

Mid-Columbia Lumber Products, LLC

 

Specialized Lumber Products

 

 

 

 

 

 

 

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

 

 

 

1,250,000

 

1,250,000

 

1,250,000

 

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

 

 

 

3,670,000

 

3,659,291

 

3,670,000

 

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

 

 

 

1,073,500

 

1,073,500

 

1,073,500

 

Warrants (Fully diluted 9.2%)

 

 

 

 

 

250,000

 

890,000

 

Member Units (Fully diluted 42.9%)

 

 

 

 

 

812,000

 

930,000

 

Member Units (Mid - Columbia Real Estate, LLC) (Fully diluted 50.0%) (7)

 

 

 

 

 

250,000

 

810,000

 

 

 

 

 

 

 

7,294,791

 

8,623,500

 

 

 

 

 

 

 

 

 

 

 

NAPCO Precast, LLC

 

Precast Concrete Manufacturing

 

 

 

 

 

 

 

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

 

 

 

3,384,615

 

3,374,013

 

3,384,615

 

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

 

 

 

5,923,077

 

5,880,184

 

5,923,077

 

Member Units (Fully diluted 35.3%) (7)

 

 

 

 

 

2,020,000

 

3,240,000

 

 

 

 

 

 

 

11,274,197

 

12,547,692

 

 

 

 

 

 

 

 

 

 

 

NRI Clinical Research, LLC

 

Clinical Research

 

 

 

 

 

 

 

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

 

 

 

6,250,000

 

5,877,436

 

5,877,436

 

Warrants (Fully diluted 12.5%)

 

 

 

 

 

251,724

 

251,724

 

Member Units (Fully diluted 24.8%)

 

 

 

 

 

500,000

 

500,000

 

 

 

 

 

 

 

6,629,160

 

6,629,160

 

 

 

 

 

 

 

 

 

 

 

NTS Holdings, Inc.

 

Trench & Traffic Safety Equipment

 

 

 

 

 

 

 

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

 

 

 

5,770,000

 

5,740,092

 

5,740,092

 

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

 

 

 

 

 

11,579,604

 

11,579,604

 

Common Stock (Fully diluted 72.3%)

 

 

 

 

 

1,621,255

 

1,460,000

 

 

 

 

 

 

 

18,940,951

 

18,779,696

 

 

 

 

 

 

 

 

 

 

 

OMi Holdings, Inc.

 

Manufacturer of Overhead Cranes

 

 

 

 

 

 

 

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

 

 

 

8,329,422

 

8,299,325

 

8,299,325

 

Common Stock (Fully diluted 48.0%)

 

 

 

 

 

1,080,000

 

1,580,000

 

 

 

 

 

 

 

9,379,325

 

9,879,325

 

 

 

 

 

 

 

 

 

 

 

Pegasus Research Group, LLC (Televerde)

 

Telemarketing and Data Services

 

 

 

 

 

 

 

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

 

 

 

6,159,915

 

6,085,425

 

6,085,425

 

Member Units (Fully diluted 43.7%)

 

 

 

 

 

1,250,000

 

1,250,000

 

 

 

 

 

 

 

7,335,425

 

7,335,425

 

 

 

 

 

 

 

 

 

 

 

PPL RVs, Inc.

 

Recreational Vehicle Parts and Consignment

 

 

 

 

 

 

 

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

 

 

 

4,234,526

 

4,183,598

 

4,234,526

 

Member Units (Fully diluted 51.1%)

 

 

 

 

 

2,150,000

 

3,980,000

 

 

 

 

 

 

 

6,333,598

 

8,214,526

 

 

 

 

 

 

 

 

 

 

 

Principle Environmental, LLC

 

Noise Abatement Products/Services

 

 

 

 

 

 

 

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

 

 

 

5,500,000

 

4,315,010

 

4,690,000

 

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

 

 

 

2,256,556

 

2,212,417

 

2,212,417

 

Warrants (Fully diluted 15.0%)

 

 

 

 

 

1,200,000

 

1,910,000

 

Member Units (Fully diluted 25.0%)

 

 

 

 

 

2,000,000

 

3,280,000

 

 

 

 

 

 

 

9,727,427

 

12,092,417

 

 

 

 

 

 

 

 

 

 

 

River Aggregates, LLC

 

Construction Aggregates

 

 

 

 

 

 

 

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

 

 

 

3,270,000

 

3,103,430

 

3,103,430

 

Warrants (Fully diluted 10.0%)

 

 

 

 

 

122,500

 

122,500

 

Member Units (Fully diluted 45%)

 

 

 

 

 

550,000

 

550,000

 

 

 

 

 

 

 

3,775,930

 

3,775,930

 

 

6



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2011

(Unaudited)

 

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

 

Industry

 

Principal (6)

 

Cost (6)

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Control Investments (3)

 

 

 

 

 

 

 

 

 

The MPI Group, LLC

 

Manufacturer of Custom Hollow Metal Doors, Frames and Accessories

 

 

 

 

 

 

 

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

 

 

 

1,033,513

 

1,028,715

 

1,028,715

 

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

 

 

 

5,329,167

 

5,202,910

 

5,202,910

 

Warrants (Fully diluted 47.1%)

 

 

 

 

 

895,943

 

 

Member Units (Non-voting)

 

 

 

 

 

200,000

 

200,000

 

 

 

 

 

 

 

7,327,568

 

6,431,625

 

 

 

 

 

 

 

 

 

 

 

Thermal & Mechanical Equipment, LLC

 

Heat Exchange / Filtration Products and Services

 

 

 

 

 

 

 

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

 

 

 

1,415,540

 

1,408,287

 

1,408,287

 

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

 

 

 

4,509,680

 

4,458,675

 

4,509,680

 

Member Units (Fully diluted 50.0%) (7)

 

 

 

 

 

1,000,000

 

5,660,000

 

 

 

 

 

 

 

6,866,962

 

11,577,967

 

 

 

 

 

 

 

 

 

 

 

Uvalco Supply, LLC

 

Farm and Ranch Supply

 

 

 

 

 

 

 

Member Units (Fully diluted 42.8%) (7)

 

 

 

 

 

1,113,243

 

3,090,000

 

 

 

 

 

 

 

 

 

 

 

Van Gilder Insurance Corporation

 

Insurance Brokerage

 

 

 

 

 

 

 

8% Secured Debt (Maturity - January 31, 2013)

 

 

 

1,000,000

 

983,922

 

983,922

 

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

 

 

 

1,806,860

 

1,789,641

 

1,789,641

 

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

 

 

 

6,150,000

 

4,950,213

 

4,950,213

 

Warrants (Fully diluted 10.0%)

 

 

 

 

 

1,208,643

 

1,208,643

 

Common Stock (Fully diluted 15.5%)

 

 

 

 

 

2,499,876

 

2,499,876

 

 

 

 

 

 

 

11,432,295

 

11,432,295

 

 

 

 

 

 

 

 

 

 

 

Vision Interests, Inc.

 

Manufacturer/Installer of Commercial Signage

 

 

 

 

 

 

 

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

 

 

 

9,400,000

 

8,424,811

 

5,259,409

 

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

 

 

 

760,000

 

740,587

 

740,587

 

Warrants (Fully diluted 38.2%)

 

 

 

 

 

160,010

 

 

Common Stock (Fully diluted 22.3%)

 

 

 

 

 

372,000

 

 

 

 

 

 

 

 

9,697,408

 

5,999,996

 

 

 

 

 

 

 

 

 

 

 

Ziegler’s NYPD, LLC

 

Casual Restaurant Group

 

 

 

 

 

 

 

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

 

 

 

1,000,000

 

995,441

 

995,441

 

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

 

 

 

4,986,977

 

4,948,426

 

4,948,426

 

Warrants (Fully diluted 46.6%)

 

 

 

 

 

600,000

 

539,500

 

 

 

 

 

 

 

6,543,867

 

6,483,367

 

 

 

 

 

 

 

 

 

 

 

Subtotal Control Investments (34.7% of total investments at fair value)

 

 

 

 

 

193,683,126

 

219,026,676

 

 

7



Table of Contents

 

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2011

(Unaudited)

 

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

 

Industry

 

Principal (6)

 

Cost (6)

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Affiliate Investments (4)

 

 

 

 

 

 

 

 

 

American Sensor Technologies, Inc.

 

Manufacturer of Commercial/Industrial Sensors

 

 

 

 

 

 

 

9% Secured Debt (Maturity - May 31, 2012)

 

 

 

3,045,808

 

3,034,982

 

3,034,982

 

Warrants (Fully diluted 19.6%)

 

 

 

 

 

49,990

 

2,690,000

 

 

 

 

 

 

 

3,084,972

 

5,724,982

 

 

 

 

 

 

 

 

 

 

 

Audio Messaging Solutions, LLC

 

Audio Messaging Services

 

 

 

 

 

 

 

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

 

 

 

13,475,000

 

12,990,614

 

13,341,000

 

Warrants (Fully diluted 9.8%)

 

 

 

 

 

886,933

 

2,620,000

 

 

 

 

 

 

 

13,877,547

 

15,961,000

 

 

 

 

 

 

 

 

 

 

 

Compact Power Equipment Centers LLC

 

Light to Medium Duty Equipment Rental

 

 

 

 

 

 

 

6% Current / 6% PIK Secured Debt (Maturity - December 31, 2014)

 

 

 

2,811,819

 

2,786,965

 

2,786,965

 

8% PIK Secured Debt (Maturity - December 31, 2011)

 

 

 

44,118

 

44,118

 

44,118

 

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

 

 

 

 

 

836,332

 

836,332

 

Member Units (Fully diluted 10.6%)

 

 

 

 

 

1,147

 

1,147

 

 

 

 

 

 

 

3,668,562

 

3,668,562

 

 

 

 

 

 

 

 

 

 

 

DrillingInfo, Inc.

 

Information Services for the Oil and Gas Industry

 

 

 

 

 

 

 

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

 

 

 

8,000,000

 

7,003,118

 

8,000,000

 

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

 

 

 

750,000

 

750,000

 

750,000

 

Warrants (Fully diluted 4.9%)

 

 

 

 

 

1,250,000

 

9,580,000

 

Common Stock (Fully diluted 2.4%)

 

 

 

 

 

1,335,325

 

4,520,325

 

 

 

 

 

 

 

10,338,443

 

22,850,325

 

 

 

 

 

 

 

 

 

 

 

East Teak Fine Hardwoods, Inc.

 

Hardwood Products

 

 

 

 

 

 

 

Common Stock (Fully diluted 5.0%)

 

 

 

 

 

480,318

 

380,000

 

 

 

 

 

 

 

 

 

 

 

Houston Plating & Coatings, LLC

 

Plating & Industrial Coating

 

 

 

 

 

 

 

Member Units (Fully diluted 11.1%) (7)

 

 

 

 

 

635,000

 

4,740,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Integrated Printing Solutions, LLC

 

Commercial Printing

 

 

 

 

 

 

 

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

 

 

 

10,000,000

 

9,200,000

 

9,200,000

 

Warrants (Fully diluted 9.0%)

 

 

 

 

 

600,000

 

600,000

 

 

 

 

 

 

 

9,800,000

 

9,800,000

 

 

 

 

 

 

 

 

 

 

 

IRTH Holdings, LLC

 

Utility Technology Services

 

 

 

 

 

 

 

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

 

 

 

5,383,940

 

5,297,323

 

5,383,940

 

Member Units (Fully diluted 22.3%)

 

 

 

 

 

850,000

 

2,090,000

 

 

 

 

 

 

 

6,147,323

 

7,473,940

 

 

 

 

 

 

 

 

 

 

 

KBK Industries, LLC

 

Specialty Manufacturer of Oilfield and Industrial Products

 

 

 

 

 

 

 

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

 

 

 

139,940

 

139,940

 

139,940

 

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

 

 

 

5,250,000

 

5,250,000

 

5,250,000

 

Member Units (Fully diluted 18.8%) (7)

 

 

 

 

 

340,833

 

2,540,000

 

 

 

 

 

 

 

5,730,773

 

7,929,940

 

 

 

 

 

 

 

 

 

 

 

Laurus Healthcare, LP

 

Healthcare Facilities / Services

 

 

 

 

 

 

 

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

 

 

 

5,900,000

 

5,900,000