10-Q 1 a2016033110qtcap.htm 10-Q 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 March 31, 2016
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 May 4, 2016 was 33,576,436.




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
 
March 31, 2016
 
December 31, 2015
 
(Unaudited)
 
 
Assets:
 
 
 
Investments at fair value:
 
 
 
Non-Control / Non-Affiliate investments (cost of $759,385,335 and $795,244,907 at March 31, 2016 and December 31, 2015, respectively)
$
740,511,577

 
$
774,238,518

Affiliate investments (cost of $167,897,411 and $171,486,103 at March 31, 2016 and December 31, 2015, respectively)
173,842,446

 
177,581,965

Control investments (cost of $40,118,113 and $40,618,113 at March 31, 2016 and December 31, 2015, respectively)
25,622,233

 
25,456,233

Total investments at fair value
939,976,256

 
977,276,716

Cash and cash equivalents
64,162,614

 
52,615,418

Interest and fees receivable
6,783,399

 
4,892,146

Prepaid expenses and other current assets
1,833,905

 
947,068

Deferred financing fees
3,287,455

 
3,480,444

Property and equipment, net
124,022

 
105,698

Total assets
$
1,016,167,651

 
$
1,039,317,490

Liabilities:
 
 
 
Accounts payable and accrued liabilities
$
2,238,206

 
$
7,463,514

Interest payable
1,558,369

 
3,714,470

Taxes payable

 
735,498

Deferred income taxes
4,551,800

 
4,988,317

Borrowings under credit facility
128,109,192

 
131,256,669

Notes
162,292,089

 
162,142,478

SBA-guaranteed debentures payable
213,070,081

 
220,648,789

Total liabilities
511,819,737

 
530,949,735

Commitments and contingencies (Note 7)
 
 
 
Net Assets:
 
 
 
Common stock, $0.001 par value per share (150,000,000 shares authorized, 33,576,436 and 33,375,126 shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively)
33,576

 
33,375

Additional paid-in capital
550,903,360

 
549,242,439

Investment income in excess of distributions
7,628,164

 
16,127,141

Accumulated realized losses
(25,227,115
)
 
(25,813,329
)
Net unrealized depreciation
(28,990,071
)
 
(31,221,871
)
Total net assets
504,347,914

 
508,367,755

Total liabilities and net assets
$
1,016,167,651

 
$
1,039,317,490

Net asset value per share
$
15.02

 
$
15.23


See accompanying notes.


3



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Operations
 
Three Months
Ended
 
Three Months
Ended
 
 
March 31,
2016
 
March 31,
2015
 
Investment income:
 
 
 
 
Interest income:
 
 
 
 
Non-Control / Non-Affiliate investments
$
18,182,654

 
$
16,958,700

 
Affiliate investments
3,384,369

 
4,191,349

 
Control investments
193,616

 

 
Total interest income
21,760,639

 
21,150,049

 
Dividend income:
 
 
 
 
Non-Control / Non-Affiliate investments
(1,246,760
)
 
1,588,705

 
Affiliate investments
160,055

 
256,253

 
Total dividend income
(1,086,705
)
 
1,844,958

 
Fee and other income:
 
 
 
 
Non-Control / Non-Affiliate investments
1,623,886

 
3,237,346

 
Affiliate investments
310,015

 
496,957

 
Control investments
100,000

 
100,000

 
Total fee and other income
2,033,901

 
3,834,303

 
Payment-in-kind interest income:
 
 
 
 
Non-Control / Non-Affiliate investments
2,921,604

 
2,728,323

 
Affiliate investments
989,213

 
1,169,001

 
Control investments

 

 
Total payment-in-kind interest income
3,910,817

 
3,897,324

 
Interest income from cash and cash equivalents
37,218

 
52,936

 
Total investment income
26,655,870

 
30,779,570

 
Operating expenses:
 
 
 
 
Interest and other financing fees
6,518,570

 
6,432,455

 
Compensation expenses
9,450,493

 
5,408,623

 
General and administrative expenses
1,088,724

 
1,168,913

 
Total operating expenses
17,057,787

 
13,009,991

 
Net investment income
9,598,083

 
17,769,579

 
Realized and unrealized gains (losses) on investments and foreign currency borrowings:
 
 
 
 
Net realized gains:
 
 
 
 
Non-Control / Non-Affiliate investments
584,787

 
3,236,669

 
Affiliate investments
1,427

 
27,702

 
Net realized gains
586,214

 
3,264,371

 
Net unrealized appreciation (depreciation):
 
 
 
 
Investments
3,084,323

 
(13,715,840
)
 
Foreign currency borrowings
(852,523
)
 
1,173,707

 
Net unrealized appreciation (depreciation)
2,231,800

 
(12,542,133
)
 
Net realized and unrealized gains (losses) on investments and foreign currency borrowings
2,818,014

 
(9,277,762
)
 
Benefit (provision) for taxes
11,161

 
(137,875
)
 
Net increase in net assets resulting from operations
$
12,427,258

 
$
8,353,942

 
Net investment income per share—basic and diluted
$
0.29

 
$
0.54

 
Net increase in net assets resulting from operations per share—basic and diluted
$
0.37

 
$
0.25

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

 
$
0.54

 
Supplemental dividends/distributions

 
0.05

 
Total dividends/distributions per share
$
0.54

 
$
0.59

 
Weighted average shares outstanding—basic and diluted
33,480,346

 
33,099,197

 

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, 2014
32,950,288

 
$
32,950

 
$
542,119,994

 
$
12,926,514

 
$
12,464,699

 
$
(36,717,528
)
 
$
530,826,629

Net investment income

 

 

 
17,769,579

 

 

 
17,769,579

Stock-based compensation

 

 
1,642,297

 

 

 

 
1,642,297

Realized gain (loss) on investments

 

 

 

 
3,264,371

 
(3,370,439
)
 
(106,068
)
Net unrealized loss on investments / foreign currency

 

 

 

 

 
(9,171,694
)
 
(9,171,694
)
Provision for taxes

 

 

 
(137,875
)
 

 

 
(137,875
)
Dividends / distributions
35,548

 
36

 
830,010

 
(19,582,147
)
 

 

 
(18,752,101
)
Expenses related to public offering of common stock

 

 
(54,967
)
 

 

 

 
(54,967
)
Issuance of restricted stock
350,000

 
350

 
(350
)
 

 

 

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(110,209
)
 
(110
)
 
(2,400,242
)
 

 

 

 
(2,400,352
)
Balance, March 31, 2015
33,225,627

 
$
33,226

 
$
542,136,742

 
$
10,976,071

 
$
15,729,070

 
$
(49,259,661
)
 
$
519,615,448

 
 
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, 2015
33,375,126

 
$
33,375

 
$
549,242,439

 
$
16,127,141

 
$
(25,813,329
)
 
$
(31,221,871
)
 
$
508,367,755

Net investment income

 

 

 
9,598,083

 

 

 
9,598,083

Stock-based compensation

 

 
4,301,118

 

 

 

 
4,301,118

Realized gain (loss) on investments

 

 

 

 
586,214

 
(351,458
)
 
234,756

Net unrealized loss on investments / foreign currency

 

 

 

 

 
2,583,258

 
2,583,258

Tax benefit

 

 

 
11,161

 

 

 
11,161

Dividends / distributions
42,694

 
42

 
844,036

 
(18,108,221
)
 

 

 
(17,264,143
)
Issuance of restricted stock
351,000

 
351

 
(351
)
 

 

 

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(192,384
)
 
(192
)
 
(3,483,882
)
 

 

 

 
(3,484,074
)
Balance, March 31, 2016
33,576,436

 
$
33,576

 
$
550,903,360

 
$
7,628,164

 
$
(25,227,115
)
 
$
(28,990,071
)
 
$
504,347,914


See accompanying notes.


5



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Cash Flows 
 
Three Months Ended
 
Three Months Ended
 
March 31, 2016
 
March 31, 2015
Cash flows from operating activities:
 
 
 
Net increase in net assets resulting from operations
$
12,427,258

 
$
8,353,942

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:
 
 
 
Purchases of portfolio investments
(11,812,331
)
 
(98,213,197
)
Repayments received/sales of portfolio investments
53,620,680

 
97,094,750

Loan origination and other fees received
274,158

 
1,606,861

Net realized gain on investments
(586,214
)
 
(3,264,371
)
Net unrealized depreciation appreciation on investments
(2,647,804
)
 
13,870,791

Net unrealized depreciation (appreciation) on foreign currency borrowings
852,523

 
(1,173,707
)
Deferred income taxes
(436,517
)
 
(154,951
)
Payment-in-kind interest accrued, net of payments received
(317,840
)
 
810,547

Amortization of deferred financing fees
531,993

 
511,864

Accretion of loan origination and other fees
(1,135,001
)
 
(1,960,200
)
Accretion of loan discounts
(95,188
)
 
(133,149
)
Accretion of discount on SBA-guaranteed debentures payable
31,899

 
46,222

Depreciation expense
15,592

 
15,169

Stock-based compensation
4,301,118

 
1,642,297

Changes in operating assets and liabilities:
 
 
 
Interest and fees receivable
(1,891,253
)
 
203,433

Prepaid expenses and other current assets
(886,837
)
 
(176,764
)
Accounts payable and accrued liabilities
(5,225,308
)
 
(4,031,030
)
Interest payable
(2,156,101
)
 
(1,929,865
)
Taxes payable
(735,498
)
 
(2,450,029
)
Net cash provided by operating activities
44,129,329

 
10,668,613

Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(33,916
)
 
(21,843
)
Net cash used in investing activities
(33,916
)
 
(21,843
)
Cash flows from financing activities:
 
 
 
Repayments of SBA-guaranteed debentures payable
(7,800,000
)
 

Borrowings under credit facility
30,000,000

 
8,000,000

Repayments of credit facility
(34,000,000
)
 
(48,000,000
)
Proceeds from notes

 
83,565,582

Net expenses related to public offering of common stock

 
(54,967
)
Common stock withheld for payroll taxes upon vesting of restricted stock
(3,484,074
)
 
(2,400,352
)
Cash dividends/distributions paid
(17,264,143
)
 
(18,752,101
)
Net cash provided by (used in) financing activities
(32,548,217
)
 
22,358,162

Net increase in cash and cash equivalents
11,547,196

 
33,004,932

Cash and cash equivalents, beginning of period
52,615,418

 
78,759,026

Cash and cash equivalents, end of period
$
64,162,614

 
$
111,763,958

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
$
7,932,474

 
$
7,644,734

Summary of non-cash financing transactions:
 
 
 
Dividends/distributions paid through DRIP share issuances
$
844,078

 
$
830,046


See accompanying notes.


6



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2016
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

 
$
13,568,000

 
$
13,568,000

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

 
2,905,000

 
 
 
 
13,819,514

 
15,068,000

 
16,473,000

 
 
 
 
 
 
 
 
 
 
 
ADCS Clinics, LLC (3%)*
 
Operator of Dermatology Clinics
 
Subordinated Notes (11% Cash, 2% PIK, Due 05/20)
 
14,106,030

 
13,844,110

 
13,844,110

 
 
 
 
14,106,030

 
13,844,110

 
13,844,110

 
 
 
 
 
 
 
 
 
 
 
Agilex Flavors & Fragrances, Inc. (3%)*
 
Custom Fragrance Producer
 
Subordinated Note (12% Cash, 1.5% PIK, Due 06/19)
 
13,139,109

 
12,990,382

 
12,990,382

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

 
2,585,000

 
 
 
13,139,109

 
14,240,382

 
15,575,382

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

 
2,623,000

 
 
 
 
 
630,134

 
2,623,000

 
 
 
 
 
 
 
 
 
 
 
All Metals Holding, LLC (1%)*
 
Steel Processor and Distributor
 
Subordinated Note (11% Cash, Due 03/21)
 
6,033,333

 
5,764,084

 
5,764,084

 
 
Bridge Note (14% PIK, Due 11/16)
 
575,000

 
560,625

 
560,625

 
 
Units (83,025 units)
 
 
 
253,000

 
322,000

 
 
 
 
6,608,333

 
6,577,709

 
6,646,709

 
 
 
 
 
 
 
 
 
 
 
Applied-Cleveland Holdings, Inc. (5%)*
 
Oil and Gas Pipeline Infrastructure Inspection Services
 
Subordinated Notes (10% Cash, 2% PIK, Due 06/19)
 
23,589,606

 
23,352,205

 
23,352,205

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

 
2,622,000

 
 
 
23,589,606

 
25,481,237

 
25,974,205

 
 
 
 
 
 
 
 
 
 
 
Audio and Video Labs Holdings, Inc. (2%)*
 
Manufacturer and Distributor for Independent Artists and Authors
 
Subordinated Notes (12% Cash, 2% PIK, Due 06/18)
 
10,561,242

 
10,460,462

 
10,460,462

Common Stock (138 shares)
 
 
 
1,300,000

 
1,750,000

 
 
 
10,561,242

 
11,760,462

 
12,210,462

 
 
 
 
 
 
 
 
 
 
 
Avkem International, LLC (1%)*
 
Flux and Foundry Manufacturer and Supplier
 
Subordinated Note (10% Cash, 4% PIK, Due 12/17)
 
4,085,200

 
4,021,473

 
4,021,473

 
 
 
 
4,085,200

 
4,021,473

 
4,021,473

 
 
 
 
 
 
 
 
 
 
 
Baker Hill Acquisition, LLC (3%)*
 
Loan Origination Software Solutions Provider
 
Subordinated Notes (12% Cash, Due 03/21)
 
13,500,000

 
13,311,582

 
13,311,582

 
 
Limited Partner Interest
 
 
 
1,498,500

 
1,498,500

 
 
 
 
13,500,000

 
14,810,082

 
14,810,082

 
 
 
 
 
 
 
 
 
 
 
BFN Operations LLC (0%)*
 
Wholesale Grower and Distributor of Shrubs, Trees and Plants
 
First-Out Subordinated Note (17% PIK, Due 02/17)(6)
 
16,148,423

 
14,162,530

 
2,162,000

 
Last-Out Subordinated Note (17% PIK, Due 02/17)(6)
 
2,199,576

 
1,957,027

 

 
 
 
18,347,999

 
16,119,557

 
2,162,000

 
 
 
 
 
 
 
 
 
 
 
Cafe Enterprises, Inc. (3%)*
 
Restaurant
 
Subordinated Note (12% Cash, 2% PIK, Due 09/19)
 
12,470,272

 
12,300,160

 
12,300,160

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

 
1,190,000

 
 
 
 
12,470,272

 
13,300,160

 
13,490,160

 
 
 
 
 
 
 
 
 
 
 
Capital Contractors, Inc. (0%)*
 
Janitorial and Facilities Maintenance Services
 
Subordinated Notes (5% Cash, Due 12/16)
 
9,843,542

 
9,691,284

 
2,516,000

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

 

Common Stock Warrants (20 shares)
 
 
 
492,000

 

 
 
9,843,542

 
12,183,284

 
2,516,000

 
 
 
 
 
 
 
 
 
 
 
Captek Softgel International, Inc.
(3%)*
 
Nutraceutical Manufacturer
 
Subordinated Note (10% Cash, 2.5% PIK, Due 06/21)
 
15,116,805

 
14,827,199

 
14,827,199

Common Stock (15,000 shares)
 
 
 
1,500,000

 
1,500,000

 
 
 
15,116,805

 
16,327,199

 
16,327,199

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

 
261,000

 
 
 
 
 
119,735

 
261,000

 
 
 
 
 
 
 
 
 
 
 
Centerfield Media Holding Company (4%)*
 
Digital Marketing
 
Subordinated Note (10% Cash, 3.5% PIK, Due 03/21)
 
18,362,644

 
18,029,462

 
18,029,462

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

 
1,216,000

 
 
 
 
18,362,644

 
19,029,462

 
19,245,462

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

 
9,964,021

 
9,366,000

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

 
2,281,000

 
 
 
9,999,618

 
10,870,625

 
11,647,000

 
 
 
 
 
 
 
 
 
 
 

7



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
March 31, 2016
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)
 
$
15,685,061

 
$
15,407,588

 
$
14,568,002

 
 
 
 
15,685,061

 
15,407,588

 
14,568,002

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

 
15,363,530

 
15,363,530

Preferred Stock (703 shares)
 
 
 
554,458

 
620,000

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

 
375,000

 
 
 
15,505,583

 
16,017,988

 
16,358,530

 
 
 
 
 
 
 
 
 
 
 
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

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

 
800,000

 
 
 
 
 
1,000,000

 
800,000

 
 
 
 
 
 
 
 
 
 
 
DialogDirect, Inc. (5%)*
 
Business Process Outsourcing Provider
 
Subordinated Notes (12% Cash, 1.5% PIK, Due 04/20)
 
24,528,436

 
24,339,359

 
24,339,359

 
 
 
24,528,436

 
24,339,359

 
24,339,359

 
 
 
 
 
 
 
 
 
 
 
DLC Acquisition, LLC (8%)*
 
Staffing Firm
 
Senior Notes (10% Cash, Due 12/20)
 
22,575,000

 
22,242,542

 
22,242,542

 
Senior Note (10% Cash, 2% PIK, Due 12/20)
 
18,706,162

 
18,456,340

 
18,456,340

 
 
 
41,281,162

 
40,698,882

 
40,698,882

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

 

 
 
 
 
 

 

 
 
 
 
 
 
 
 
 
 
 
Dyno Acquiror, Inc. (2%)*
 
Sewing Products and Seasonal Decorative Products Supplier
 
Subordinated Note (12% Cash, 2% PIK, Due 11/19)
 
7,419,297

 
7,341,823

 
7,341,823

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

 
492,000

 
 
 
7,419,297

 
7,941,823

 
7,833,823

 
 
 
 
 
 
 
 
 
 
 
Eckler's Holdings, Inc. (2%)*
 
Restoration Parts and Accessories for Classic Cars and Trucks
 
Subordinated Note (11% Cash, 4.5% PIK, Due 07/18)
 
9,607,507

 
9,526,502

 
8,727,000

 
Common Stock (18,029 shares)
 
 
 
183,562

 

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

 

 
Series B Preferred Stock (185 shares)
 
 
 
185,127

 
29,000

 
 
 
9,607,507

 
11,491,317

 
8,756,000

 
 
 
 
 
 
 
 
 
 
 
FCL Holding SPV, LLC (0%)*
 
Commercial Printing Services
 
Class A Interest (24,873 units)
 
 
 
292,000

 
450,000

 
 
Class B Interest (48,427 units)
 
 
 

 

 
 
Class C Interest (3,746 units)
 
 
 

 

 
 
 
 


 
292,000

 
450,000

 
 
 
 
 
 
 
 
 
 
 
Flowchem Ltd. (0%)*
 
Services to Crude Oil Pipeline Operators
 
Common Units (1,000,000 units)
 
 
 
782,356

 
2,102,000

 
 
 
 
 
782,356

 
2,102,000

 
 
 
 
 
 
 
 
 
 
 
FrontStream Holdings, LLC (3%)*
 
Payment and Donation Management Product Service Provider
 
Subordinated Note (13.0% Cash, Due 12/20)
 
13,375,000

 
13,237,946

 
13,237,946

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

 
500,000

 
 
 
 
13,375,000

 
13,737,946

 
13,737,946

 
 
 
 
 
 
 
 
 
 
 
Frontstreet Facility Solutions, Inc. (1%)*
 
Retail, Restaurant and Commercial Facilities Maintenance
 
Subordinated Note (11% Cash, 2% PIK, Due 07/18)
 
8,462,629

 
8,398,394

 
6,745,000

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

 

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

 

 
 
 
 
8,462,629

 
9,148,394

 
6,745,000

 
 
 
 
 
 
 
 
 
 
 
Frozen Specialties, Inc. (3%)*
 
Frozen Foods Manufacturer
 
Subordinated Note (10% Cash, 4% PIK, Due 12/17)
 
13,265,864

 
13,265,864

 
14,465,864

 
 
13,265,864

 
13,265,864

 
14,465,864

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

 

 
 
 
 
500,000

 

 
 
 
 
 
 
 
 
 
 
 
GST AutoLeather, Inc. (4%)*
 
Supplier of Automotive Interior Leather
 
Subordinated Note (11% Cash, 2% PIK, Due 01/21)
 
22,781,645

 
22,422,544

 
22,422,544

 
 
 
 
22,781,645

 
22,422,544

 
22,422,544

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

 
1,542,000

 
 
 
 
 
295,800

 
1,542,000


8



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
March 31, 2016
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
HKW Capital Partners IV, L.P.
(0%)*(4)
 
Multi-Sector Holdings
 
0.6% Limited Partnership Interest
 
 
 
$
1,179,047

 
$
1,316,825

 
 
 
 
 
 
1,179,047

 
1,316,825

 
 
 
 
 
 
 
 
 
 
 
HTC Borrower, LLC (5%)*
 
Hunting and Outdoor Products
 
Subordinated Notes (10% Cash, 3% PIK, Due 09/20)
 
$
25,541,889

 
25,220,842

 
25,220,842

 
 
 
 
25,541,889

 
25,220,842

 
25,220,842

 
 
 
 
 
 
 
 
 
 
 
ICP Industrial, Inc. (4%)*
 
Coatings Formulator and Manufacturer
 
Subordinated Note (9.5% Cash, Due 04/22)
 
7,500,000

 
7,429,074

 
7,429,074

 
 
Subordinated Note (10% Cash, 1% PIK, Due 10/22)
 
6,270,781

 
6,186,350

 
6,186,350

 
 
Subordinated Note (14% PIK, Due 10/22)
 
3,986,894

 
3,951,208

 
3,951,208

 
 
Class A Units (1,249 units)
 
 
 
1,695,080

 
1,695,080

 
 
 
 
17,757,675

 
19,261,712

 
19,261,712

 
 
 
 
 
 
 
 
 
 
 
Inland Pipe Rehabilitation Holding Company LLC (2%)*
 
Cleaning and Repair Services
 
Subordinated Notes (10% Cash, 5.5% PIK, Due 12/16)
 
9,778,555

 
9,760,122

 
9,760,122

Membership Interest Purchase Warrant (3%)
 
 
 
853,500

 
511,000

 
 
9,778,555

 
10,613,622

 
10,271,122

 
 
 
 
 
 
 
 
 
 
 
KT Capital Partners, L.P. (0%)*(4)
 
Multi-Sector Holdings
 
Subordinated Notes (10% PIK)
 
754,000

 
374,000

 
754,000

 
 
Subordinated Note (3.3% PIK)
 
161,000

 
81,000

 
161,000

 
 
4.2% Limited Partnership Interest
 
 
 
380,000

 
754,000

 
 
 
 
915,000

 
835,000

 
1,669,000

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

 
2,720,000

 
Common Units (30,000 units)
 
 
 
30,000

 
4,697,000

 
 
 
 
 
1,500,000

 
7,417,000

 
 
 
 
 
 
 
 
 
 
 
Media Storm, LLC (2%)*
 
Marketing Services
 
Subordinated Note (10% Cash, Due 08/19)
 
6,545,455

 
6,523,237

 
6,523,237

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

 
1,069,000

 
 
6,545,455

 
7,700,194

 
7,592,237

 
 
 
 
 
 
 
 
 
 
 
Micross Solutions LLC (5%)*
 
Provider of Semiconductor Products and Services
 
Subordinated Note (12% Cash, 3% PIK, Due 06/18)
 
23,882,166

 
23,748,721

 
23,748,721

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

 
1,423,000

 
 
23,882,166

 
25,768,414

 
25,171,721

 
 
 
 
 
 
 
 
 
 
 
Motor Vehicle Software Corporation (4%)*
 
Provider of EVR Services
 
Subordinated Note (10% Cash, 1% PIK, Due 03/21)
 
20,116,873

 
19,744,937

 
19,744,937

 
 
Class A Units (1,000,000 units)
 
 
 
1,064,960

 
1,064,960

 
 
 
 
20,116,873

 
20,809,897

 
20,809,897

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

 
1,529,000

 
 
 
 
 
2,000,000

 
1,529,000

 
 
 
 
 
 
 
 
 
 
 
Nautic Partners VII, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.4% Limited Partnership Interest
 
 
 
866,410

 
1,156,000

 
 
 
 
 
 
866,410

 
1,156,000

 
 
 
 
 
 
 
 
 
 
 
Nomacorc, LLC (4%)*
 
Synthetic Wine Cork Producer
 
Subordinated Note (10% Cash, 2.3% PIK, Due 07/21)
 
20,521,158

 
20,179,543

 
17,128,000

 
 
Limited Partnership Interest
 
 
 
2,142,710

 
1,192,000

 
 
 
 
20,521,158

 
22,322,253

 
18,320,000

 
 
 
 
 
 
 
 
 
 
 
On Event Services, LLC (5%)*
 
Equipment Rentals
 
Subordinated Notes (10% Cash, 2% PIK, Due 06/20)
 
21,714,667

 
21,056,932

 
21,056,932

 
Warrant to Purchase Units (8.4%)
 
 
 
1,902,000

 
3,379,000

 
 
 
21,714,667

 
22,958,932

 
24,435,932

 
 
 
 
 
 
 
 
 
 
 
Orchid Underwriters Agency, LLC (5%)*
 
Insurance Underwriter
 
Term B Note (10% Cash, Due 11/19)
 
22,644,852

 
22,281,253

 
22,281,253

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

 
1,791,000

Class A Common Units (15,000 units)
 
 
 

 
794,000

 
 
22,644,852

 
23,781,253

 
24,866,253

 
 
 
 
 
 
 
 
 
 
 
Performance Health & Wellness Holdings, Inc. (1%)*
 
Rehabilitation and Wellness Products
 
Class A Limited Partnership Units (15,000 units)
 
 
 
210,076

 
3,533,000

 
 
 
 
 
210,076

 
3,533,000

 
 
 
 
 
 
 
 
 
 
 
PowerDirect Marketing, LLC (0%)*
 
Marketing Services
 
Subordinated Note (13% Cash, 2% PIK, Due 12/16)(6)
 
9,103,408

 
6,627,482

 
2,337,000

Common Unit Purchase Warrants
 
 
 
590,200

 

 
 
9,103,408

 
7,217,682

 
2,337,000

 
 
 
 
 
 
 
 
 
 
 

9



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
March 31, 2016
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Radiant Logistics, Inc. (3%)*
 
Freight Logistics
 
Subordinated Note (10.5% Cash, Due 04/21)
 
$
15,000,000

 
$
14,736,457

 
$
15,450,000

 
 
 
 
15,000,000

 
14,736,457

 
15,450,000

 
 
 
 
 
 
 
 
 
 
 
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)
 
6,747,984

 
6,623,535

 
6,623,535

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

 
2,485,000

 
 
 
 
6,747,984

 
10,277,788

 
9,108,535

 
 
 
 
 
 
 
 
 
 
 
SPC Partners V, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.7% Limited Partnership Interest
 
 
 
1,605,759

 
1,563,000

 
 
 
 
 
 
1,605,759

 
1,563,000

 
 
 
 
 
 
 
 
 
 
 
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)
 
16,172,616

 
15,992,051

 
12,994,902

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

 
2,570,000

 
 
 
16,172,616

 
17,929,472

 
15,564,902

 
 
 
 
 
 
 
 
 
 
 
Tate's Bake Shop (2%)*
 
Producer of Baked Goods
 
Subordinated Note (10% Cash, 3% PIK, Due 02/20)
 
10,495,096

 
10,339,359

 
10,339,359

 
 
Limited Partner Interest
 
 
 
925,000

 
1,246,000

 
 
 
 
10,495,096

 
11,264,359

 
11,585,359

 
 
 
 
 
 
 
 
 
 
 
TCFI Merlin LLC (3%)*
 
Specialty Staffing Service Provider
 
Senior Note (10% Cash, 1% PIK, Due 09/19)
 
13,667,228

 
13,442,247

 
13,442,247

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

 
500,000

 
 
 
 
13,667,228

 
13,942,247

 
13,942,247

 
 
 
 
 
 
 
 
 
 
 
The Cook & Boardman Group, LLC (3%)*
 
Distributor of Doors and Related Products
 
Subordinated Note (10% Cash, 2.5% PIK, Due 03/20)
 
14,560,482

 
14,342,450

 
14,342,450

 
 
Class A Units (1,400,000 units)
 
 
 
1,400,000

 
2,081,000

 
 
 
 
14,560,482

 
15,742,450

 
16,423,450

 
 
 
 
 
 
 
 
 
 
 
The Krystal Company (1%)*
 
Restaurant
 
Class A Units of Limited Partnership (2,000 units)
 
 
 
638,260

 
3,270,000

 
 
 
 
 
 
638,260

 
3,270,000

 
 
 
 
 
 
 
 
 
 
 
Top Knobs USA, Inc. (1%)*
 
Hardware Designer and Distributor
 
Common Stock (26,593 shares)
 
 
 
333,994

 
2,647,000

 
 
 
 
 
333,994

 
2,647,000

 
 
 
 
 
 
 
 
 
 
 
United Biologics, LLC (2%)*
 
Allergy Immunotherapy
 
Subordinated Note (12% Cash, 2% PIK, Due 03/17)
 
12,690,507

 
12,412,464

 
12,111,000

 
Class A Common Units (177,935 units)
 
 
 
1,999,989

 
54,000

 
Class A-1 Common Units (18,818 units)
 
 
 
137,324

 
137,000

 
Class A-1 Common Kicker Units (14,114 units)
 
 
 

 

 
Class A, Class A-1, Class A-1 Kicker & Class B Unit Purchase Warrants
 
 
 
838,117

 
61,000

 
 
 
 
12,690,507

 
15,387,894

 
12,363,000

 
 
 
 
 
 
 
 
 
 
 
Water Pik, Inc. (7%)*
 
Oral Health and Shower Head Supplier
 
Second Lien Term Loan (9.8% Cash, Due 01/21)
 
33,288,781

 
32,853,497

 
32,853,497

 
 
 
 
33,288,781

 
32,853,497

 
32,853,497

 
 
 
 
 
 
 
 
 
 
 
Wheel Pros Holdings, Inc. (3%)*
 
Wheel/Rim and Performance Tire Distributor
 
Subordinated Note (11% Cash, Due 06/20)
 
13,822,500

 
13,568,249

 
13,568,249

 
 
Class A Units (2,000 units)
 
 
 
2,000,000

 
1,991,000

 
 
 
 
13,822,500

 
15,568,249

 
15,559,249

 
 
 
 
 
 
 
 
 
 
 
Women's Marketing, Inc. (4%)*
 
Full-Service Media Organization
 
Subordinated Note (11% Cash, 1.5% PIK, Due 06/21)
 
16,371,426

 
16,056,408

 
16,056,408

 
 
Class A Common Units (16,300 units)
 
 
 
1,630,000

 
1,630,000

 
 
 
 
16,371,426

 
17,686,408

 
17,686,408

 
 
 
 
 
 
 
 
 
 
 
WSO Holdings, LP (0%)*
 
Organic/Fair Trade Sugar, Syrup, Nectar and Honey Producer
 
Common Points (3,000 points)
 
 
 
3,000,000

 
1,747,000

 
 
 
 
 
3,000,000

 
1,747,000

 
 
 
 
 
 
 
YummyEarth Inc. (4%)*
 
Organic Candy Manufacturer
 
Senior Note (9.5% Cash, Due 08/20)
 
19,500,000

 
18,994,653

 
18,994,653

 
 
Limited Partner Interest
 
 
 
3,496,500

 
2,242,000

 
 
 
 
19,500,000

 
22,491,153

 
21,236,653