0001379785-15-000084.txt : 20151104 0001379785-15-000084.hdr.sgml : 20151104 20151104161802 ACCESSION NUMBER: 0001379785-15-000084 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20150930 FILED AS OF DATE: 20151104 DATE AS OF CHANGE: 20151104 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Triangle Capital CORP CENTRAL INDEX KEY: 0001379785 IRS NUMBER: 061798488 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 814-00733 FILM NUMBER: 151197129 BUSINESS ADDRESS: STREET 1: 3700 GLENWOOD AVENUE STREET 2: SUITE 530 CITY: RALEIGH STATE: NC ZIP: 27612 BUSINESS PHONE: 9197194770 MAIL ADDRESS: STREET 1: 3700 GLENWOOD AVENUE STREET 2: SUITE 530 CITY: RALEIGH STATE: NC ZIP: 27612 10-Q 1 a2015093010qtcap.htm 10-Q 9302015 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
__________________________________________________________
Form 10-Q
__________________________________________________________
(Mark One)
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2015
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 814-00733 
__________________________________________________________
Triangle Capital Corporation
(Exact name of registrant as specified in its charter)
__________________________________________________________
Maryland
 
06-1798488
(State or other jurisdiction of
 
(I.R.S. Employer
incorporation or organization)
 
Identification No.)
 
 
3700 Glenwood Avenue, Suite 530
Raleigh, North Carolina
 
27612
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (919) 719-4770
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report: N/A 
__________________________________________________________
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  ¨
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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨
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
ý
Accelerated filer
¨
 
 
 
 
Non-accelerated filer
¨  (Do not check if a smaller reporting company)
Smaller reporting company
¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý
The number of shares outstanding of the registrant’s Common Stock on November 4, 2015 was 33,321,349.




TRIANGLE CAPITAL CORPORATION
TABLE OF CONTENTS
QUARTERLY REPORT ON FORM 10-Q

 
 
Page
 
PART I – FINANCIAL INFORMATION
Item 1.
 
 
 
 
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
 
PART II – OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
 


2



PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.
TRIANGLE CAPITAL CORPORATION
Consolidated Balance Sheets
 
September 30, 2015
 
December 31, 2014
 
(Unaudited)
 
 
Assets:
 
 
 
Investments at fair value:
 
 
 
Non-Control / Non-Affiliate investments (cost of $729,080,697 and $717,233,688 at September 30, 2015 and December 31, 2014, respectively)
$
712,063,003

 
$
693,312,886

Affiliate investments (cost of $218,351,766 and $175,182,171 at September 30, 2015 and December 31, 2014, respectively)
230,108,814

 
178,935,236

Control investments (cost of $37,368,113 and $29,636,763 at September 30, 2015 and December 31, 2014, respectively)
25,927,233

 
14,975,000

Total investments at fair value
968,099,050

 
887,223,122

Cash and cash equivalents
53,034,307

 
78,759,026

Interest and fees receivable
5,585,320

 
7,409,105

Prepaid expenses and other current assets
977,569

 
438,861

Deferred financing fees
3,672,028

 
1,230,577

Property and equipment, net
119,236

 
108,753

Total assets
$
1,031,487,510

 
$
975,169,444

Liabilities:
 
 
 
Accounts payable and accrued liabilities
$
5,297,604

 
$
7,144,673

Interest payable
1,266,454

 
3,365,237

Taxes payable
54,152

 
2,506,031

Deferred income taxes
6,050,113

 
3,363,669

Borrowings under credit facility
120,677,107

 
62,619,883

Notes
161,995,214

 
145,646,224

SBA-guaranteed debentures payable
220,413,189

 
219,697,098

Total liabilities
515,753,833

 
444,342,815

Commitments and contingencies (Note 7)
 
 
 
Net Assets:
 
 
 
Common stock, $0.001 par value per share (150,000,000 shares authorized, 33,321,349 and 32,950,288 shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively)
33,321

 
32,950

Additional paid-in capital
547,444,138

 
542,119,994

Investment income in excess of distributions
13,665,361

 
12,926,514

Accumulated realized gains (losses)
(26,075,919
)
 
12,464,699

Net unrealized depreciation
(19,333,224
)
 
(36,717,528
)
Total net assets
515,733,677

 
530,826,629

Total liabilities and net assets
$
1,031,487,510

 
$
975,169,444

Net asset value per share
$
15.48

 
$
16.11


See accompanying notes.


3



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Operations
 
Three Months
Ended
 
Three Months
Ended
 
Nine Months Ended
 
Nine Months Ended
 
September 30,
2015
 
September 30,
2014
 
September 30,
2015
 
September 30,
2014
Investment income:
 
 
 
 
 
 
 
Interest income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
$
18,051,486

 
$
16,415,831

 
$
51,993,071

 
$
46,126,230

Affiliate investments
4,294,512

 
2,293,761

 
12,685,241

 
6,858,273

Control investments
248,609

 
39,742

 
298,090

 
127,085

Total interest income
22,594,607

 
18,749,334

 
64,976,402

 
53,111,588

Dividend income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
259,431

 
3,159

 
1,893,825

 
1,054,775

Affiliate investments
323,291

 
967,016

 
860,913

 
2,115,086

Total dividend income
582,722

 
970,175

 
2,754,738

 
3,169,861

Fee and other income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
3,308,427

 
1,063,278

 
7,380,865

 
4,101,596

Affiliate investments
337,343

 
175,421

 
2,334,396

 
839,222

Control investments
100,000

 
100,000

 
300,000

 
801,852

Total fee and other income
3,745,770

 
1,338,699

 
10,015,261

 
5,742,670

Payment-in-kind interest income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
2,735,701

 
3,087,464

 
8,077,552

 
9,489,524

Affiliate investments
1,126,244

 
668,201

 
3,445,253

 
2,135,374

Control investments

 

 

 
12,071

Total payment-in-kind interest income
3,861,945

 
3,755,665

 
11,522,805

 
11,636,969

Interest income from cash and cash equivalents
58,401

 
61,897

 
178,713

 
193,393

Total investment income
30,843,445

 
24,875,770

 
89,447,919

 
73,854,481

Operating expenses:
 
 
 
 
 
 
 
Interest and other financing fees
6,561,298

 
5,292,967

 
20,319,093

 
15,591,022

General and administrative expenses
5,764,151

 
4,166,165

 
16,675,066

 
14,345,132

Total operating expenses
12,325,449

 
9,459,132

 
36,994,159

 
29,936,154

Net investment income
18,517,996

 
15,416,638

 
52,453,760

 
43,918,327

Realized and unrealized gains (losses) on investments and foreign currency borrowings:
 
 
 
 
 
 
 
Net realized gains (losses):
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
2,331,742

 
5,231,548

 
8,746,844

 
16,966,024

Affiliate investments
(503,907
)
 
(200,000
)
 
(237,399
)
 
28,252

Control investments
(18,323,508
)
 

 
(38,807,152
)
 
(208,553
)
Net realized gains (losses)
(16,495,673
)
 
5,031,548

 
(30,297,707
)
 
16,785,723

Net unrealized appreciation (depreciation):
 
 
 
 
 
 
 
Investments
14,375,221

 
(29,639,438
)
 
15,441,528

 
(32,310,388
)
Foreign currency borrowings
1,081,391

 
501,364

 
1,942,776

 
466,630

Net unrealized appreciation (depreciation)
15,456,612

 
(29,138,074
)
 
17,384,304

 
(31,843,758
)
Net realized and unrealized gains (losses) on investments and foreign currency borrowings
(1,039,061
)
 
(24,106,526
)
 
(12,913,403
)
 
(15,058,035
)
Loss on extinguishment of debt

 

 
(1,394,017
)
 

Benefit (Provision) for taxes
393,437

 
(122,439
)
 
255,562

 
(975,782
)
Net increase (decrease) in net assets resulting from operations
$
17,872,372

 
$
(8,812,327
)
 
$
38,401,902

 
$
27,884,510

Net investment income per share—basic and diluted
$
0.56

 
$
0.51

 
$
1.58

 
$
1.53

Net increase (decrease) in net assets resulting from operations per share—basic and diluted
$
0.54

 
$
(0.29
)
 
$
1.16

 
$
0.97

Dividends/distributions per share:
 
 
 
 
 
 
 
Regular quarterly dividends/distributions
$
0.54

 
$
0.54

 
$
1.62

 
$
1.62

Supplemental dividends/distributions
0.05

 
0.05

 
0.15

 
0.35

Total dividends/distributions per share
$
0.59

 
$
0.59

 
$
1.77

 
$
1.97

Weighted average shares outstanding—basic and diluted
33,274,586

 
30,412,036

 
33,203,414

 
28,718,753


See accompanying notes.

4



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Changes in Net Assets
 
 
Common Stock
 
Additional
Paid-In
Capital
 
Investment
Income
in Excess of
Distributions
 
Accumulated
Realized
Gains on Investments
 
Net
Unrealized
Appreciation(Depreciation)
 
Total
Net
Assets
 
Number
of Shares
 
Par
Value
 
 
 
 
 
Balance, December 31, 2013
27,697,483

 
$
27,697

 
$
409,042,893

 
$
8,610,735

 
$
20,665,371

 
$
7,445,434

 
$
445,792,130

Net investment income

 

 

 
43,918,327

 

 

 
43,918,327

Stock-based compensation

 

 
4,334,437

 

 

 

 
4,334,437

Realized gain (loss) on investments

 

 

 

 
16,785,723

 
(15,977,182
)
 
808,541

Net unrealized loss on investments / foreign currency

 

 

 

 

 
(15,866,576
)
 
(15,866,576
)
Provision for taxes

 

 

 
(975,782
)
 

 

 
(975,782
)
Dividends / distributions
80,002

 
80

 
2,119,268

 
(38,269,538
)
 
(19,624,657
)
 

 
(55,774,847
)
Public offering of common stock
4,945,000

 
4,945

 
127,816,432

 

 

 

 
127,821,377

Issuance of restricted stock
282,630

 
282

 
(282
)
 

 

 

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(98,768
)
 
(98
)
 
(2,607,933
)
 

 

 

 
(2,608,031
)
Balance, September 30, 2014
32,906,347

 
$
32,906

 
$
540,704,815

 
$
13,283,742

 
$
17,826,437

 
$
(24,398,324
)
 
$
547,449,576

 
 
Common Stock
 
Additional
Paid-In
Capital
 
Investment
Income
in Excess of
Distributions
 
Accumulated
Realized
Gains (Losses) on Investments
 
Net
Unrealized
Appreciation (Depreciation)
 
Total
Net
Assets
 
Number
of Shares
 
Par
Value
 
 
 
 
 
Balance, December 31, 2014
32,950,288

 
$
32,950

 
$
542,119,994

 
$
12,926,514

 
$
12,464,699

 
$
(36,717,528
)
 
$
530,826,629

Net investment income

 

 

 
52,453,760

 

 

 
52,453,760

Stock-based compensation

 

 
5,200,761

 

 

 

 
5,200,761

Realized gain (loss) on investments

 

 

 

 
(30,297,707
)
 
29,641,715

 
(655,992
)
Net unrealized loss on investments / foreign currency

 

 

 

 

 
(12,257,411
)
 
(12,257,411
)
Loss on extinguishment of debt

 

 

 
(1,394,017
)
 

 

 
(1,394,017
)
Tax benefit

 

 

 
255,562

 

 

 
255,562

Dividends / distributions
125,298

 
125

 
2,676,308

 
(50,576,458
)
 
(8,242,911
)
 

 
(56,142,936
)
Expenses related to public offering of common stock

 

 
(54,967
)
 

 

 

 
(54,967
)
Issuance of restricted stock
360,840

 
361

 
(361
)
 

 

 

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(115,077
)
 
(115
)
 
(2,497,597
)
 

 

 

 
(2,497,712
)
Balance, September 30, 2015
33,321,349

 
$
33,321

 
$
547,444,138

 
$
13,665,361

 
$
(26,075,919
)
 
$
(19,333,224
)
 
$
515,733,677


See accompanying notes.


5



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Cash Flows 
 
Nine Months Ended
 
Nine Months Ended
 
September 30, 2015
 
September 30, 2014
Cash flows from operating activities:
 
 
 
Net increase in net assets resulting from operations
$
38,401,902

 
$
27,884,510

Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
 
 
 
Purchases of portfolio investments
(352,445,028
)
 
(345,617,501
)
Repayments received/sales of portfolio investments
261,002,599

 
154,891,195

Loan origination and other fees received
5,741,331

 
5,669,609

Net realized loss (gain) on investments
30,297,707

 
(16,785,723
)
Net unrealized depreciation (appreciation) on investments
(18,127,974
)
 
32,073,570

Net unrealized appreciation on foreign currency borrowings
(1,942,776
)
 
(466,630
)
Deferred income taxes
2,686,444

 
236,818

Payment-in-kind interest accrued, net of payments received
(2,084,305
)
 
(3,965,352
)
Amortization of deferred financing fees
1,636,224

 
1,225,815

Loss on extinguishment of debt
1,394,017

 

Accretion of loan origination and other fees
(4,897,834
)
 
(2,705,077
)
Accretion of loan discounts
(362,424
)
 
(809,647
)
Accretion of discount on SBA-guaranteed debentures payable
140,185

 
137,257

Depreciation expense
44,552

 
33,412

Stock-based compensation
5,200,761

 
4,334,437

Changes in operating assets and liabilities:
 
 
 
Interest and fees receivable
1,823,785

 
764,525

Prepaid expenses and other current assets
(538,708
)
 
187,748

Accounts payable and accrued liabilities
(1,847,069
)
 
(3,693,239
)
Interest payable
(2,098,783
)
 
(1,927,801
)
Taxes payable
(2,451,879
)
 
(636,511
)
Net cash used in operating activities
(38,427,273
)
 
(149,168,585
)
Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(55,035
)
 
(70,644
)
Net cash used in investing activities
(55,035
)
 
(70,644
)
Cash flows from financing activities:
 
 
 
Borrowings under SBA-guaranteed debentures payable

 
31,310,000

Borrowings under credit facility
174,000,000

 
20,000,000

Repayments of credit facility
(114,000,000
)
 
(20,000,000
)
Proceeds from notes
83,372,640

 

Redemption of notes
(69,000,000
)
 

Financing fees paid
(2,919,436
)
 
(801,475
)
Net proceeds (expenses) related to public offering of common stock
(54,967
)
 
127,821,377

Common stock withheld for payroll taxes upon vesting of restricted stock
(2,497,712
)
 
(2,608,031
)
Cash dividends/distributions paid
(56,142,936
)
 
(55,774,847
)
Net cash provided by financing activities
12,757,589

 
99,947,024

Net decrease in cash and cash equivalents
(25,724,719
)
 
(49,292,205
)
Cash and cash equivalents, beginning of period
78,759,026

 
133,304,346

Cash and cash equivalents, end of period
$
53,034,307

 
$
84,012,141

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
$
19,798,265

 
$
15,625,243

Summary of non-cash financing transactions:
 
 
 
Dividends/distributions paid through DRIP share issuances
$
2,676,433

 
$
2,119,348


See accompanying notes.


6



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
September 30, 2015
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Non–Control / Non–Affiliate Investments:
 
 
 
 
 
 
Access Medical Acquisition, Inc. (3%)*
 
Operator of Primary Care Clinics
 
Subordinated Notes (10% Cash, 2% PIK, Due 01/22)
 
$
13,819,514

 
$
13,552,150

 
$
13,552,150

 
 
Class A Units (1,500,000 units)
 
 
 
1,500,000

 
1,500,000

 
 
 
 
13,819,514

 
15,052,150

 
15,052,150

 
 
 
 
 
 
 
 
 
 
 
ADCS Clinics, LLC (1%)*
 
Operator of Dermatology Clinics
 
Subordinated Note (11% Cash, 2% PIK, Due 05/20)
 
7,504,167

 
7,354,167

 
7,354,167

 
 
 
 
7,504,167

 
7,354,167

 
7,354,167

 
 
 
 
 
 
 
 
 
 
 
Agilex Flavors & Fragrances, Inc. (3%)*
 
Custom Fragrance Producer
 
Subordinated Note (12% Cash, 1.5% PIK, Due 06/19)
 
13,039,493

 
12,872,545

 
12,872,545

Common Units (1,250 units)
 
 
 
1,250,000

 
2,505,000

 
 
 
13,039,493

 
14,122,545

 
15,377,545

 
 
 
 
 
 
 
 
 
 
 
AGM Automotive, LLC (0%)*
 
Auto Industry Interior Components Supplier
 
Class A Units (1,500,000 units)
 
 
 
630,134

 
1,473,000

 
 
 


 
630,134

 
1,473,000

 
 
 
 
 
 
 
 
 
 
 
All Metals Holding, LLC (1%)*
 
Steel Processor & Distributor
 
Subordinated Note (10.5% Cash, Due 12/19)
 
5,000,000

 
4,877,016

 
4,877,016

 
 
Units (34,732 units)
 
 
 
122,000

 
122,000

 
 
 
 
5,000,000

 
4,999,016

 
4,999,016

 
 
 
 
 
 
 
 
 
 
 
All Metro Health Care Services, Inc. (3%)*
 
Home Care Service Provider
 
Subordinated Note (10% Cash, 2% PIK, Due 03/20)
 
17,350,000

 
16,982,515

 
16,982,515

 
 
 
 
17,350,000

 
16,982,515

 
16,982,515

 
 
 
 
 
 
 
 
 
 
 
Applied-Cleveland Holdings, Inc. (5%)*
 
Oil and Gas Pipeline Infrastructure Inspection Services
 
Subordinated Notes (10% Cash, 2% PIK, Due 06/19)
 
23,351,194

 
23,079,384

 
23,079,384

 
Class A Units (2,129,032 units)
 
 
 
2,129,032

 
1,803,000

 
 
 
23,351,194

 
25,208,416

 
24,882,384

 
 
 
 
 
 
 
 
 
 
 
Audio and Video Labs Holdings, Inc. (2%)*
 
Manufacturer and Distributor for Independent Artists and Authors
 
Subordinated Notes (12% Cash, 2% PIK, Due 06/18)
 
10,454,503

 
10,334,742

 
10,334,742

Common Stock (138 shares)
 
 
 
1,300,000

 
1,628,000

 
 
 
10,454,503

 
11,634,742

 
11,962,742

 
 
 
 
 
 
 
 
 
 
 
Avkem International, LLC (1%)*
 
Flux and Foundry Manufacturer and Supplier
 
Subordinated Note (10% Cash, 4% PIK, Due 12/17)
 
4,003,111

 
3,923,111

 
3,923,111

 
 
 
 
4,003,111

 
3,923,111

 
3,923,111

 
 
 
 
 
 
 
 
 
 
 
Baker Hill Acquisition, LLC (3%)*
 
Loan Origination Software Solutions Provider
 
Subordinated Notes (11.5% Cash, Due 03/21)
 
13,500,000

 
13,297,500

 
13,297,500

 
 
Limited Partner Interest
 
 
 
1,498,500

 
1,498,500

 
 
 
 
13,500,000

 
14,796,000

 
14,796,000

 
 
 
 
 
 
 
 
 
 
 
BFN Operations LLC (1%)*
 
Wholesale Grower and Distributor of Shrubs, Trees and Plants
 
First-Out Subordinated Note (3% Cash, 14% PIK, Due 06/18)(5)
 
14,933,132

 
14,162,530

 
6,500,000

 
Last-Out Subordinated Note (17% PIK, Due 06/18)(6)
 
2,018,722

 
1,957,027

 

 
 
 
16,951,854

 
16,119,557

 
6,500,000

 
 
 
 
 
 
 
 
 
 
 
Cafe Enterprises, Inc. (3%)*
 
Restaurant
 
Subordinated Note (12% Cash, 1% PIK, Due 09/19)
 
12,344,925

 
12,155,762

 
12,155,762

 
 
Series C Preferred Stock (10,000 shares)
 
 
 
1,000,000

 
1,292,000

 
 
 
 
12,344,925

 
13,155,762

 
13,447,762

 
 
 
 
 
 
 
 
 
 
 
Capital Contractors, Inc. (1%)*
 
Janitorial and Facilities Maintenance Services
 
Subordinated Notes (5% Cash, Due 12/16)
 
9,843,542

 
9,634,265

 
7,056,000

Series A Redeemable Preferred Stock (200 shares)
 
 
 
2,000,000

 

Common Stock Warrants (20 shares)
 
 
 
492,000

 

 
 
9,843,542

 
12,126,265

 
7,056,000

 
 
 
 
 
 
 
 
 
 
 
Carolina Beverage Group, LLC (0%)*
 
Beverage Manufacturing
and Packaging
 
Class B Units (11,974 units)
 
 
 
119,735

 
688,000

 
 
 
 
 
119,735

 
688,000

 
 
 
 
 
 
 
 
 
 
 
Centerfield Media Holding Company (4%)*
 
Digital Marketing
 
Subordinated Note (10% Cash, 3.5% PIK, Due 03/21)
 
18,040,250

 
17,680,250

 
17,680,250

 
 
Common Shares (1,000 shares)
 
 
 
1,000,000

 
1,000,000

 
 
 
 
18,040,250

 
18,680,250

 
18,680,250

 
 
 
 
 
 
 
 
 
 
 
Chromaflo Technologies Parent LP (2%)*
 
Colorant Manufacturer and Distributor
 
Second Lien Term Loan (8.3% Cash, Due 06/20)
 
9,999,618

 
9,960,588

 
9,960,588

Class A Units (22,561 units)
 
 
 
906,604

 
1,922,000

 
 
 
9,999,618

 
10,867,192

 
11,882,588

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

7



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
September 30, 2015
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Community Intervention Services, Inc. (3%)*
 
Provider of Behavioral Health Services
 
Subordinated Note (10% Cash, 3% PIK, Due 01/21)
 
$
15,448,572

 
$
15,149,060

 
$
15,149,060

 
 
 
 
15,448,572

 
15,149,060

 
15,149,060

 
 
 
 
 
 
 
 
 
 
 
Comverge, Inc. (3%)*
 
Provider of Intelligent Energy Management Solutions
 
Senior Note (12% Cash, Due 05/18)
 
15,505,583

 
15,336,775

 
15,336,775

Preferred Stock (703 shares)
 
 
 
554,458

 
694,000

Common Stock (1,000,000 shares)
 
 
 
100,000

 
253,000

 
 
 
15,505,583

 
15,991,233

 
16,283,775

 
 
 
 
 
 
 
 
 
 
 
Continental Anesthesia Management, LLC (2%)*
 
Physicians Management
Services
 
Subordinated Note (10% Cash, 4% PIK Due 04/16)
 
10,569,647

 
10,567,371

 
10,567,371

Warrant (263 shares)
 
 
 
276,100

 

 
 
10,569,647

 
10,843,471

 
10,567,371

 
 
 
 
 
 
 
 
 
 
 
CPower Ultimate HoldCo, LLC (0%)*
 
Demand Response Business
 
Units (345,542 units)
 
 
 
345,542

 
345,542

 
 
 
 
 
 
345,542

 
345,542

 
 
 
 
 
 
 
 
 
 
 
CWS Acquisition Corp. (0%)*
 
Manufacturer of Custom Windows and Sliding Doors
 
1,500,000 Class A Units
 
 
 
1,500,000

 
1,500,000

 
 
 


 
1,500,000

 
1,500,000

 
 
 
 
 
 
 
 
 
 
 
Danville Materials, LLC (2%)*
 
Manufacturer of Dental Products
 
Subordinated Note (10% Cash, Due 12/18)
 
7,237,000

 
7,127,430

 
7,127,430

Common Units (45,492 units)
 
 
 
500,000

 
1,532,000

 
 
7,237,000

 
7,627,430

 
8,659,430

 
 
 
 
 
 
 
 
 
 
 
Data Source Holdings, LLC (0%)*
 
Print Supply Chain Management Services
 
Common Units (47,503 units)
 
 
 
1,000,000

 
980,000

 
 
 


 
1,000,000

 
980,000

 
 
 
 
 
 
 
 
 
 
 
DialogDirect, Inc. (5%)*
 
Business Process Outsourcing Provider
 
Subordinated Notes (12% Cash, 1.5% PIK, Due 04/20)
 
24,342,236

 
24,135,213

 
24,135,213

 
 
 
24,342,236

 
24,135,213

 
24,135,213

 
 
 
 
 
 
 
 
 
 
 
DLC Acquisition, LLC (4%)*
 
Staffing Firm
 
Senior Notes (10% Cash, Due 07/19)
 
22,214,062

 
21,839,281

 
21,839,281

 
 
 
22,214,062

 
21,839,281

 
21,839,281

 
 
 
 
 
 
 
 
 
 
 
DLR Restaurants, LLC (0%)*
 
Restaurant
 
Royalty Rights
 
 
 

 

 
 
 
 
 

 

 
 
 
 
 
 
 
 
 
 
 
Dyno Acquiror, Inc. (1%)*
 
Sewing Products and Seasonal Decorative Products Supplier
 
Subordinated Note (12% Cash, 2% PIK, Due 11/18)
 
7,345,535

 
7,255,130

 
7,255,130

 
Series A Units (600,000 units)
 
 
 
600,000

 
440,000

 
 
 
7,345,535

 
7,855,130

 
7,695,130

 
 
 
 
 
 
 
 
 
 
 
Eckler's Holdings, Inc. (1%)*
 
Restoration Parts and Accessories for Classic Cars and Trucks
 
Subordinated Note (11% Cash, 4.5% PIK, Due 07/18)(6)
 
7,716,934

 
7,622,202

 
7,337,000

 
Common Stock (18,029 shares)
 
 
 
183,562

 

 
Preferred Stock A (1,596 shares)
 
 
 
1,596,126

 

 
 
 
7,716,934

 
9,401,890

 
7,337,000

 
 
 
 
 
 
 
 
 
 
 
Electronic Systems Protection, Inc. (0%)*
 
Power Protection Systems Manufacturing
 
Common Stock (570 shares)
 
 
 
285,000

 
481,000

 
 
 
 
 
285,000

 
481,000

 
 
 
 
 
 
 
 
 
 
 
FCL Graphics, Inc. (0%)*
 
Commercial Printing Services
 
Senior Note (4.8% Cash, Due 09/16)
 
1,048,907

 
1,048,907

 
752,000

 
 
Senior Note (7.8% Cash, 2% PIK, Due 09/16)(5)
 
1,238,463

 
1,207,439

 

 
 
 
 
2,287,370

 
2,256,346

 
752,000

 
 
 
 
 
 
 
 
 
 
 
Flowchem Ltd. (2%)*
 
Provider of Support Services to Crude Oil Pipeline Operators
 
Subordinated Note (11% Cash, 2% PIK, Due 06/19)
 
7,956,475

 
7,841,182

 
7,956,475

 
Common Units (1,000,000 units)
 
 
 
914,835

 
1,982,000

 
 
 
7,956,475

 
8,756,017

 
9,938,475

 
 
 
 
 
 
 
 
 
 
 
FrontStream Holdings, LLC (3%)*
 
Payment and Donation Management Product Service Provider
 
Subordinated Note (12.5% Cash, Due 12/20)
 
13,375,000

 
13,227,648

 
13,227,648

 
 
Series C-2 Preferred Shares (500 shares)
 
 
 
500,000

 
500,000

 
 
 
 
13,375,000

 
13,727,648

 
13,727,648

 
 
 
 
 
 
 
 
 
 
 
Frontstreet Facility Solutions, Inc. (1%)*
 
Retail, Restaurant and Commercial Facilities Maintenance
 
Subordinated Note (13% Cash, Due 07/18)
 
8,462,629

 
8,385,853

 
6,476,000

 
 
Series A Convertible Preferred Stock (2,500 shares)
 
 
 
250,000

 

 
 
Series B Convertible Preferred Stock (5,556 shares)
 
 
 
500,000

 

 
 
 
 
8,462,629

 
9,135,853

 
6,476,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

8



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
September 30, 2015
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Frozen Specialties, Inc. (2%)*
 
Frozen Foods Manufacturer
 
Subordinated Note (10% Cash, 4% PIK, Due 05/17)
 
$
13,000,183

 
$
13,000,183

 
$
12,477,000

 
 
13,000,183

 
13,000,183

 
12,477,000

 
 
 
 
 
 
 
 
 
 
 
Garden Fresh Restaurant Holding, LLC (0%)*
 
Restaurant
 
Class A Units (5,000 units)
 
 
 
500,000

 
73,000

 
 
 
 
500,000

 
73,000

 
 
 
 
 
 
 
 
 
 
 
GST AutoLeather, Inc. (4%)*
 
Supplier of Automotive Interior Leather
 
Subordinated Note (11% Cash, 2% PIK, Due 01/21)
 
22,551,785

 
22,167,982

 
22,167,982

 
 
 
 
22,551,785

 
22,167,982

 
22,167,982

 
 
 
 
 
 
 
 
 
 
 
Hatch Chile Co., LLC (0%)*
 
Food Products Distributor
 
Unit Purchase Warrant (7,817 units)
 
 
 
295,800

 
1,423,000

 
 
 


 
295,800

 
1,423,000

 
 
 
 
 
 
 
 
 
 
 
HKW Capital Partners IV, L.P.
(0%)*(4)
 
Multi-Sector Holdings
 
0.6% Limited Partnership Interest
 
 
 
906,719

 
819,000

 
 
 
 
 
 
906,719

 
819,000

 
 
 
 
 
 
 
 
 
 
 
HTC Borrower, LLC (5%)*
 
Hunting and Outdoor Products
 
Subordinated Notes (10% Cash, 3% PIK, Due 09/20)
 
25,431,354

 
25,082,665

 
25,082,665

 
 
 
 
25,431,354

 
25,082,665

 
25,082,665

 
 
 
 
 
 
 
 
 
 
 
Inland Pipe Rehabilitation Holding Company LLC (2%)*
 
Cleaning and Repair Services
 
Subordinated Notes (10% Cash, 5.5% PIK, Due 12/16)
 
9,510,790

 
9,481,017

 
8,925,000

Membership Interest Purchase Warrant (3%)
 
 
 
853,500

 

 
 
9,510,790

 
10,334,517

 
8,925,000

 
 
 
 
 
 
 
 
 
 
 
Justrite Manufacturing Company, LLC (3%)*
 
Storage Product Developer and Supplier for Hazardous Materials
 
Subordinated Note (10% Cash, 2% PIK, Due 07/19)
 
15,002,718

 
14,842,093

 
14,842,093

 
 
Class A Common Units (1,268 units)
 
 
 
118,110

 
345,000

 
 
Class A Preferred Units (132 units)
 
 
 
131,890

 
152,000

 
 
 
 
15,002,718

 
15,092,093

 
15,339,093

 
 
 
 
 
 
 
 
 
 
 
Magpul Industries Corp. (1%)*
 
Firearm Accessories Manufacturer and Distributor
 
Preferred Units (1,470 units)
 
 
 
1,470,000

 
2,542,000

 
Common Units (30,000 units)
 
 
 
30,000

 
2,975,000

 
 
 
 
 
1,500,000

 
5,517,000

 
 
 
 
 
 
 
 
 
 
 
Media Storm, LLC (1%)*
 
Marketing Services
 
Subordinated Note (10% Cash, Due 08/19)
 
6,545,455

 
6,516,533

 
6,516,533

Membership Units (1,216,204 units)
 
 
 
1,176,957

 
1,099,000

 
 
6,545,455

 
7,693,490

 
7,615,533

 
 
 
 
 
 
 
 
 
 
 
Micross Solutions LLC (5%)*
 
Provider of Semiconductor Products and Services
 
Subordinated Note (12% Cash, 3% PIK, Due 06/18)
 
23,521,181

 
23,362,602

 
23,362,602

Class A-2 Common Units (1,979,524 units)
 
 
 
2,019,693

 
1,414,000

 
 
23,521,181

 
25,382,295

 
24,776,602

 
 
 
 
 
 
 
 
 
 
 
Motor Vehicle Software Corporation (4%)*
 
Provider of EVR Services
 
Subordinated Note (10% Cash, 1% PIK, Due 03/21)
 
20,015,000

 
19,615,000

 
19,615,000

 
 
 
 
20,015,000

 
19,615,000


19,615,000

 
 
 
 
 
 
 
 
 
 
 
My Alarm Center, LLC (0%)*
 
Security Company
 
Preferred Units (2,000,000 units)
 
 
 
2,000,000

 
1,791,000

 
 
 
 
 
2,000,000

 
1,791,000

 
 
 
 
 
 
 
 
 
 
 
Nautic Partners VII, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.4% Limited Partnership Interest
 
 
 
542,013

 
851,000

 
 
 
 
 
 
542,013

 
851,000

 
 
 
 
 
 
 
 
 
 
 
Nomacorc, LLC (4%)*
 
Synthetic Wine Cork Producer
 
Subordinated Note (10% Cash, 2.25% PIK, Due 07/21)
 
20,288,445

 
19,922,607

 
19,922,607

 
 
Limited Partnership Interest
 
 
 
2,264,587

 
2,264,587

 
 
 
 
20,288,445

 
22,187,194

 
22,187,194

 
 
 
 
 
 
 
 
 
 
 
On Event Services, LLC (4%)*
 
Equipment Rentals
 
Subordinated Notes (10% Cash, 2% PIK, Due 06/20)
 
21,730,709

 
20,997,842

 
20,997,842

 
Warrant to Purchase Units (5.4%)
 
 
 
1,252,000

 
1,859,000

 
Option to Acquire Warrants
 
 
 

 
379,000

 
 
 
21,730,709

 
22,249,842

 
23,235,842

 
 
 
 
 
 
 
 
 
 
 
Orchid Underwriters Agency, LLC (5%)*
 
Insurance Underwriter
 
Term B Note (10% Cash, Due 11/19)
 
22,885,000

 
22,479,113

 
22,479,113

Class A Preferred Units (15,000 units)
 
 
 
1,500,000

 
1,680,000

Class A Common Units (15,000 units)
 
 
 

 
323,000

 
 
22,885,000

 
23,979,113

 
24,482,113

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

9



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
September 30, 2015
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Performance Health & Wellness Holdings, Inc. (1%)*
 
Rehabilitation and Wellness Products
 
Class A Limited Partnership Units (15,000 units)
 
 
 
$
1,500,000

 
$
2,622,000

 
 
 


 
1,500,000

 
2,622,000

 
 
 
 
 
 
 
 
 
 
 
PowerDirect Marketing, LLC (1%)*
 
Marketing Services
 
Subordinated Note (13% Cash, 2% PIK, Due 12/16)(6)
 
$
8,439,133

 
6,627,482

 
2,714,000

Common Unit Purchase Warrants
 
 
 
590,200

 

 
 
8,439,133

 
7,217,682

 
2,714,000

 
 
 
 
 
 
 
 
 
 
 
Radiant Logistics, Inc. (3%)*
 
Freight Logistics
 
Subordinated Note (12% Cash, Due 04/21)
 
15,000,000

 
14,717,690

 
14,717,690

 
 
 
 
15,000,000

 
14,717,690

 
14,717,690

 
 
 
 
 
 
 
 
 
 
 
RockYou, Inc. (0%)*
 
Mobile Game Advertising Network
 
Common Stock (67,585 shares)
 
 
 
111,000

 
111,000

 
 
 
 
 
 
111,000

 
111,000

 
 
 
 
 
 
 
 
 
 
 
Rotolo Consultants, Inc. (2%)*
 
Landscape Services
 
Subordinated Note (11% Cash, 3% PIK, Due 08/21)
 
6,645,987

 
6,513,487

 
6,513,487

 
 
Series A Preferred Units (39 units)
 
 
 
3,654,253

 
3,654,253

 
 
 
 
6,645,987

 
10,167,740

 
10,167,740

 
 
 
 
 
 
 
 
 
 
 
SPC Partners V, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.7% Limited Partnership Interest
 
 
 
745,539

 
704,000

 
 
 
 
 
 
745,539

 
704,000

 
 
 
 
 
 
 
 
 
 
 
Specialized Desanders, Inc. (3%)*(4)
 
Sand and Particulate Removal Equipment Provider for Oil and Gas Companies
 
Subordinated Note (12% Cash, 2% PIK, Due 03/20)
 
16,110,043

 
15,906,543

 
12,473,609

Class C Capital Units (2,000,000 units)
 
 
 
1,937,421

 
4,353,000

 
 
 
16,110,043

 
17,843,964

 
16,826,609

 
 
 
 
 
 
 
 
 
 
 
Tate's Bake Shop (2%)*
 
Producer of Baked Goods
 
Subordinated Note (10% Cash, 3% PIK, Due 02/20)
 
10,336,858

 
10,165,632

 
10,165,632

 
 
Limited Partner Interest
 
 
 
999,000

 
1,202,000

 
 
 
 
10,336,858

 
11,164,632

 
11,367,632

 
 
 
 
 
 
 
 
 
 
 
TCFI Merlin LLC (3%)*
 
Specialty Staffing Service Provider
 
Senior Note (10% Cash, 1% PIK, Due 09/19)
 
14,458,808

 
14,207,575

 
14,207,575

 
 
Limited Partnership Units (500,000 units)
 
 
 
500,000

 
500,000

 
 
 
 
14,458,808

 
14,707,575

 
14,707,575

 
 
 
 
 
 
 
 
 
 
 
The Cook & Boardman Group, LLC (3%)*
 
Distributor of Doors and Related Products
 
Subordinated Note (10% Cash, 2.5% PIK, Due 03/20)
 
14,377,192