0001379785-16-000170.txt : 20160803 0001379785-16-000170.hdr.sgml : 20160803 20160803161848 ACCESSION NUMBER: 0001379785-16-000170 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20160630 FILED AS OF DATE: 20160803 DATE AS OF CHANGE: 20160803 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: 161804089 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 a2016063010qtcap.htm 10-Q Document

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 June 30, 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 August 3, 2016 was 39,880,195.




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
 
June 30, 2016
 
December 31, 2015
 
(Unaudited)
 
 
Assets:
 
 
 
Investments at fair value:
 
 
 
Non-Control / Non-Affiliate investments (cost of $750,833,116 and $795,244,907 as of June 30, 2016 and December 31, 2015, respectively)
$
717,643,399

 
$
774,238,518

Affiliate investments (cost of $175,702,230 and $171,486,103 as of June 30, 2016 and December 31, 2015, respectively)
183,475,354

 
177,581,965

Control investments (cost of $44,418,113 and $40,618,113 as of June 30, 2016 and December 31, 2015, respectively)
29,704,233

 
25,456,233

Total investments at fair value
930,822,986

 
977,276,716

Cash and cash equivalents
124,929,733

 
52,615,418

Interest, fees and other receivables
9,425,610

 
4,892,146

Prepaid expenses and other current assets
1,903,714

 
947,068

Deferred financing fees
3,093,052

 
3,480,444

Property and equipment, net
119,520

 
105,698

Total assets
$
1,070,294,615

 
$
1,039,317,490

Liabilities:
 
 
 
Accounts payable and accrued liabilities
$
3,374,178

 
$
7,463,514

Interest payable
3,841,477

 
3,714,470

Taxes payable

 
735,498

Deferred income taxes
5,375,894

 
4,988,317

Borrowings under credit facility
152,070,309

 
131,256,669

Notes
162,444,085

 
162,142,478

SBA-guaranteed debentures payable
244,938,000

 
220,648,789

Total liabilities
572,043,943

 
530,949,735

Commitments and contingencies (Note 7)
 
 
 
Net Assets:
 
 
 
Common stock, $0.001 par value per share (150,000,000 shares authorized, 33,630,195 and 33,375,126 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively)
33,630

 
33,375

Additional paid-in capital
553,234,755

 
549,242,439

Investment income in excess of distributions
8,851,309

 
16,127,141

Accumulated realized losses
(21,289,719
)
 
(25,813,329
)
Net unrealized depreciation
(42,579,303
)
 
(31,221,871
)
Total net assets
498,250,672

 
508,367,755

Total liabilities and net assets
$
1,070,294,615

 
$
1,039,317,490

Net asset value per share
$
14.82

 
$
15.23


See accompanying notes.


3



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Operations
 
Three Months
Ended
 
Three Months
Ended
 
Six Months Ended
 
Six Months Ended
 
June 30,
2016
 
June 30,
2015
 
June 30,
2016
 
June 30,
2015
Investment income:
 
 
 
 
 
 
 
Interest income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
$
17,486,022

 
$
16,982,885

 
$
35,668,676

 
$
33,941,585

Affiliate investments
3,356,738

 
4,199,380

 
6,741,107

 
8,390,729

Control investments
267,298

 
49,481

 
460,914

 
49,481

Total interest income
21,110,058

 
21,231,746

 
42,870,697

 
42,381,795

Dividend income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
48,589

 
45,689

 
(1,198,171
)
 
1,634,394

Affiliate investments
302,207

 
281,369

 
462,262

 
537,622

Control investments
300,000

 

 
300,000

 

Total dividend income
650,796

 
327,058

 
(435,909
)
 
2,172,016

Fee and other income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
2,452,792

 
835,092

 
4,076,678

 
4,072,438

Affiliate investments
226,551

 
1,500,096

 
536,566

 
1,997,053

Control investments
100,000

 
100,000

 
200,000

 
200,000

Total fee and other income
2,779,343

 
2,435,188

 
4,813,244

 
6,269,491

Payment-in-kind interest income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
2,731,689

 
2,613,528

 
5,653,293

 
5,341,851

Affiliate investments
1,094,522

 
1,150,008

 
2,083,735

 
2,319,009

Total payment-in-kind interest income
3,826,211

 
3,763,536

 
7,737,028

 
7,660,860

Interest income from cash and cash equivalents
55,452

 
67,376

 
92,670

 
120,312

Total investment income
28,421,860

 
27,824,904

 
55,077,730

 
58,604,474

Operating expenses:
 
 
 
 
 
 
 
Interest and other financing fees
6,764,654

 
7,325,340

 
13,283,224

 
13,757,795

Compensation expenses
4,096,472

 
3,516,492

 
13,546,965

 
8,925,115

General and administrative expenses
1,221,821

 
816,887

 
2,310,545

 
1,985,800

Total operating expenses
12,082,947

 
11,658,719

 
29,140,734

 
24,668,710

Net investment income
16,338,913

 
16,166,185

 
25,936,996

 
33,935,764

Realized and unrealized gains (losses) on investments and foreign currency borrowings:
 
 
 
 
 
 
 
Net realized gains (losses):
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
5,621,127

 
3,178,433

 
6,205,914

 
6,415,102

Affiliate investments
(1,683,731
)
 
238,806

 
(1,682,304
)
 
266,508

Control investments

 
(20,483,644
)
 

 
(20,483,644
)
Net realized gains (losses)
3,937,396

 
(17,066,405
)
 
4,523,610

 
(13,802,034
)
Net unrealized appreciation (depreciation):
 
 
 
 
 
 
 
Investments
(13,529,964
)
 
14,782,147

 
(10,445,641
)
 
1,066,307

Foreign currency borrowings
(59,268
)
 
(312,322
)
 
(911,791
)
 
861,385

Net unrealized appreciation (depreciation)
(13,589,232
)
 
14,469,825

 
(11,357,432
)
 
1,927,692

Net realized and unrealized losses on investments and foreign currency borrowings
(9,651,836
)
 
(2,596,580
)
 
(6,833,822
)
 
(11,874,342
)
Loss on extinguishment of debt

 
(1,394,017
)
 

 
(1,394,017
)
Benefit (provision) for taxes
(250
)
 

 
10,911

 
(137,875
)
Net increase in net assets resulting from operations
$
6,686,827

 
$
12,175,588

 
$
19,114,085

 
$
20,529,530

Net investment income per share—basic and diluted
$
0.49

 
$
0.49

 
$
0.77

 
$
1.02

Net increase in net assets resulting from operations per share—basic and diluted
$
0.20

 
$
0.37

 
$
0.57

 
$
0.62

Dividends/distributions per share:
 
 
 
 
 
 
 
Regular quarterly dividends/distributions
$
0.45

 
$
0.54

 
$
0.99

 
$
1.08

Supplemental dividends/distributions

 
0.05

 

 
0.10

Total dividends/distributions per share
$
0.45

 
$
0.59

 
$
0.99

 
$
1.18

Weighted average shares outstanding—basic and diluted
33,584,466

 
33,234,532

 
33,532,406

 
33,166,865

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 (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

 

 

 
33,935,764

 

 

 
33,935,764

Stock-based compensation

 

 
3,412,181

 

 

 

 
3,412,181

Realized gain (loss) on investments

 

 

 

 
(13,802,034
)
 
14,380,376

 
578,342

Net unrealized loss on investments / foreign currency

 

 

 

 

 
(12,452,684
)
 
(12,452,684
)
Loss on extinguishment of debt

 

 

 
(1,394,017
)
 

 

 
(1,394,017
)
Provision for taxes

 

 

 
(137,875
)
 

 

 
(137,875
)
Dividends / distributions
71,248

 
71

 
1,695,352

 
(39,191,663
)
 

 

 
(37,496,240
)
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
(110,209
)
 
(110
)
 
(2,400,242
)
 

 

 

 
(2,400,352
)
Balance, June 30, 2015
33,272,167

 
$
33,272

 
$
544,771,957

 
$
6,138,723

 
$
(1,337,335
)
 
$
(34,789,836
)
 
$
514,816,781

 
 
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

 

 

 
25,936,996

 

 

 
25,936,996

Stock-based compensation

 

 
5,886,490

 

 

 

 
5,886,490

Realized gain (loss) on investments

 

 

 

 
4,523,610

 
(4,650,931
)
 
(127,321
)
Net unrealized loss on investments / foreign currency

 

 

 

 

 
(6,706,501
)
 
(6,706,501
)
Tax benefit

 

 

 
10,911

 

 

 
10,911

Dividends / distributions
82,848

 
82

 
1,590,073

 
(33,223,739
)
 

 

 
(31,633,584
)
Issuance of restricted stock
364,605

 
365

 
(365
)
 

 

 

 

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

 

 

 
(3,484,074
)
Balance, June 30, 2016
33,630,195

 
$
33,630

 
$
553,234,755

 
$
8,851,309

 
$
(21,289,719
)
 
$
(42,579,303
)
 
$
498,250,672


See accompanying notes.


5



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Cash Flows 
 
Six Months Ended
 
Six Months Ended
 
June 30, 2016
 
June 30, 2015
Cash flows from operating activities:
 
 
 
Net increase in net assets resulting from operations
$
19,114,085

 
$
20,529,530

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:
 
 
 
Purchases of portfolio investments
(75,444,437
)
 
(163,270,565
)
Repayments received/sales of portfolio investments
119,484,196

 
154,211,535

Loan origination and other fees received
1,622,991

 
2,819,164

Net realized loss (gain) on investments
(4,523,610
)
 
13,802,034

Net unrealized depreciation (appreciation) on investments
10,058,066

 
(1,820,140
)
Net unrealized depreciation (appreciation) on foreign currency borrowings
911,791

 
(861,385
)
Deferred income taxes
387,577

 
753,833

Payment-in-kind interest accrued, net of payments received
(1,993,156
)
 
23,501

Amortization of deferred financing fees
1,069,711

 
1,107,207

Loss on extinguishment of debt

 
1,394,017

Accretion of loan origination and other fees
(2,550,623
)
 
(3,202,668
)
Accretion of loan discounts
(199,697
)
 
(238,229
)
Accretion of discount on SBA-guaranteed debentures payable
31,899

 
92,784

Depreciation expense
33,432

 
29,225

Stock-based compensation
5,886,490

 
3,412,181

Changes in operating assets and liabilities:
 
 
 
Interest, fees and other receivables
(4,533,464
)
 
574,544

Prepaid expenses and other current assets
(956,646
)
 
(207,411
)
Accounts payable and accrued liabilities
(4,089,336
)
 
(3,726,899
)
Interest payable
127,007

 
212,193

Taxes payable
(735,498
)
 
(2,451,879
)
Payable from unsettled transaction

 
16,961,500

Net cash provided by operating activities
63,700,778

 
40,144,072

Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(47,254
)
 
(37,091
)
Net cash used in investing activities
(47,254
)
 
(37,091
)
Cash flows from financing activities:
 
 
 
Borrowings under SBA-guaranteed debentures payable
32,800,000

 

Repayments of SBA-guaranteed debentures payable
(7,800,000
)
 

Borrowings under credit facility
68,901,849

 
83,000,000

Repayments of credit facility
(49,000,000
)
 
(56,000,000
)
Proceeds from notes

 
83,372,640

Redemption of notes

 
(69,000,000
)
Financing fees paid
(1,123,400
)
 
(2,740,049
)
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
(31,633,584
)
 
(37,496,240
)
Net cash provided by (used in) financing activities
8,660,791

 
(1,318,968
)
Net increase in cash and cash equivalents
72,314,315

 
38,788,013

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

 
78,759,026

Cash and cash equivalents, end of period
$
124,929,733

 
$
117,547,039

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
$
11,625,782

 
$
11,673,774

Summary of non-cash financing transactions:
 
 
 
Dividends/distributions paid through DRIP share issuances
$
1,590,155

 
$
1,695,423


See accompanying notes.


6



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
June 30, 2016
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Non–Control / Non–Affiliate Investments:
 
 
 
 
 
 
ACA Holdings LLC. (F/K/A My Alarm Center, LLC) (0%)*
 
Security Company
 
Preferred Units (2,000,000 units)
 
 
 
$
2,000,000

 
$
1,458,000

 
 
 
 
 
 
2,000,000

 
1,458,000

 
 
 
 
 
 
 
 
 
 
 
Access Medical Acquisition, Inc. (3%)*
 
Operator of Primary Care Clinics
 
Subordinated Notes (10% Cash, 2% PIK, Due 01/22)
 
$
13,819,514

 
13,576,223

 
13,576,223

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

 
4,228,000

 
 
 
 
13,819,514

 
15,076,223

 
17,804,223

 
 
 
 
 
 
 
 
 
 
 
Agilex Flavors & Fragrances, Inc. (3%)*
 
Custom Fragrance Producer
 
Subordinated Note (12% Cash, Due 11/21)
 
13,168,124

 
13,040,499

 
13,040,499

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

 
2,641,000

 
 
 
13,168,124

 
14,290,499

 
15,681,499

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

 
4,076,000

 
 
 
 
 
630,134

 
4,076,000

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

 
5,777,954

 
5,777,954

 
 
Bridge Note (14% PIK, Due 11/16)
 
595,589

 
585,876

 
706,000

 
 
Units (83,025 units)
 
 
 
253,000

 
330,000

 
 
 
 
6,628,922

 
6,616,830

 
6,813,954

 
 
 
 
 
 
 
 
 
 
 
Applied-Cleveland Holdings, Inc. (5%)*
 
Oil and Gas Pipeline Infrastructure Inspection Services
 
Subordinated Notes (10% Cash, 2% PIK, Due 06/19)
 
23,709,065

 
23,489,516

 
23,489,516

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

 
2,685,000

 
 
 
23,709,065

 
25,618,548

 
26,174,516

 
 
 
 
 
 
 
 
 
 
 
Avkem International, LLC (1%)*
 
Flux and Foundry Manufacturer and Supplier
 
Subordinated Note (10% Cash, 4% PIK, Due 12/17)
 
4,112,935

 
4,057,651

 
4,057,651

 
 
 
 
4,112,935

 
4,057,651

 
4,057,651

 
 
 
 
 
 
 
 
 
 
 
AVL Holdings, Inc. (0%)*
 
Manufacturer and Distributor for Independent Artists and Authors
 
Common Stock (138 shares)
 
 
 
1,300,000

 
1,846,000

 
 
 
 


 
1,300,000

 
1,846,000

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

 
13,318,928

 
13,318,928

 
 
Limited Partnership Interest
 
 
 
1,498,500

 
1,498,500

 
 
 
 
13,500,000

 
14,817,428

 
14,817,428

 
 
 
 
 
 
 
 
 
 
 
BFN Operations LLC (0%)*
 
Wholesale Grower and Distributor of Shrubs, Trees and Plants
 
First-Out Subordinated Note (17% PIK, Due 02/17)(6)
 
16,852,343

 
14,162,530

 

 
Last-Out Subordinated Note (17% PIK, Due 02/17)(6)
 
2,295,457

 
1,957,027

 

 
 
 
19,147,800

 
16,119,557

 

 
 
 
 
 
 
 
 
 
 
 
Cafe Enterprises, Inc. (2%)*
 
Restaurant
 
Subordinated Note (12% Cash, 2% PIK, Due 09/19)
 
12,533,422

 
12,373,266

 
10,003,000

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

 
415,000

 
 
 
 
12,533,422

 
13,373,266

 
10,418,000

 
 
 
 
 
 
 
 
 
 
 
Capital Contractors, Inc. (0%)*
 
Janitorial and Facilities Maintenance Services
 
Subordinated Notes (5% Cash, Due 6/20)
 
9,843,542

 
9,697,991

 
2,099,000

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

 

Common Stock Warrants (20 shares)
 
 
 
492,000

 

 
 
9,843,542

 
12,189,991

 
2,099,000

 
 
 
 
 
 
 
 
 
 
 
Captek Softgel International, Inc.
(3%)*
 
Nutraceutical Manufacturer
 
Subordinated Note (10% Cash, 2.5% PIK, Due 06/21)
 
15,212,335

 
14,933,383

 
14,933,383

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

 
1,500,000

 
 
 
15,212,335

 
16,433,383

 
16,433,383

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

 
341,000

 
 
 
 
 
119,735

 
341,000

 
 
 
 
 
 
 
 
 
 
 
Centerfield Media Holding Company (4%)*
 
Digital Marketing
 
Subordinated Note (10% Cash, 3.5% PIK, Due 03/21)
 
18,525,102

 
18,205,834

 
18,205,834

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

 
1,653,000

 
 
 
 
18,525,102

 
19,205,834

 
19,858,834

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

7



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
June 30, 2016
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Chromaflo Technologies Parent LP (2%)*
 
Colorant Manufacturer and Distributor
 
Second Lien Term Loan (8.3% Cash, Due 06/20)
 
$
9,999,618

 
$
9,965,791

 
$
9,397,000

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

 
2,498,000

 
 
 
9,999,618

 
10,872,395

 
11,895,000

 
 
 
 
 
 
 
 
 
 
 
Community Intervention Services, Inc. (2%)*
 
Provider of Behavioral Health Services
 
Subordinated Note (10% Cash, 3% PIK, Due 01/21) (6)
 
16,200,490

 
15,407,588

 
11,698,000

 
 
 
 
16,200,490

 
15,407,588

 
11,698,000

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

 
15,377,513

 
15,377,513

Preferred Stock (703 shares)
 
 
 
554,458

 
802,000

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

 
191,000

 
 
 
15,505,583

 
16,031,971

 
16,370,513

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

 
345,542

 
 
 
 
 
 
345,542

 
345,542

 
 
 
 
 
 
 
 
 
 
 
CWS Holding Company, LLC (0%)*
 
Manufacturer of Custom Windows and Sliding Doors
 
Class A Units (1,500,000 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

 
898,000

 
 
 
 
 
1,000,000

 
898,000

 
 
 
 
 
 
 
 
 
 
 
DialogDirect, Inc. (3%)*
 
Business Process Outsourcing Provider
 
Subordinated Notes (12% Cash, 1.5% PIK, Due 04/20)
 
16,003,455

 
15,884,115

 
15,884,115

 
 
 
16,003,455

 
15,884,115

 
15,884,115

 
 
 
 
 
 
 
 
 
 
 
DLC Acquisition, LLC (8%)*
 
Staffing Firm
 
Senior Notes (10% Cash, Due 12/20)
 
21,575,000

 
21,264,500

 
21,264,500

 
Senior Note (10% Cash, 2% PIK, Due 12/20)
 
18,800,732

 
18,561,343

 
18,561,343

 
 
 
40,375,732

 
39,825,843

 
39,825,843

 
 
 
 
 
 
 
 
 
 
 
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)
 
7,456,455

 
7,385,739

 
7,385,739

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

 
444,000

 
 
 
7,456,455

 
7,985,739

 
7,829,739

 
 
 
 
 
 
 
 
 
 
 
Eckler's Holdings, Inc. (2%)*
 
Restoration Parts and Accessories for Classic Cars and Trucks
 
Subordinated Note (11% Cash, 4.5% PIK, Due 07/18)
 
9,716,792

 
9,642,935

 
8,777,000

 
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

 

 
 
 
9,716,792

 
11,607,750

 
8,777,000

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

 
2,157,000

 
 
 
 
 
782,356

 
2,157,000

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

 
13,243,338

 
13,243,338

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

 
500,000

 
 
 
 
13,375,000

 
13,743,338

 
13,743,338

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

 
8,404,886

 
5,020,000

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

 

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

 

 
 
 
 
8,462,629

 
9,154,886

 
5,020,000

 
 
 
 
 
 
 
 
 
 
 
Frozen Specialties, Inc. (3%)*
 
Frozen Foods Manufacturer
 
Subordinated Note (10% Cash, 4% PIK, Due 12/17)
 
13,399,997

 
13,399,997

 
14,599,997

 
 
13,399,997

 
13,399,997

 
14,599,997

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

 

 
 
 
 
500,000

 

 
 
 
 
 
 
 
 
 
 
 
GST AutoLeather, Inc. (5%)*
 
Supplier of Automotive Interior Leather
 
Subordinated Note (11% Cash, 2% PIK, Due 01/21)
 
22,896,819

 
22,550,581

 
22,550,581

 
 
 
 
22,896,819

 
22,550,581

 
22,550,581

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

8



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
June 30, 2016
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Halo Branded Solutions, Inc. (3%)*
 
Supply Chain Services
 
Subordinated Notes (11% Cash, 1% PIK, Due 10/22)
 
$
10,357,392

 
$
10,124,611

 
$
10,124,611

 
 
Class A1 Units (2,600 units)
 
 
 
2,600,000

 
2,600,000

 
 
 
 
10,357,392

 
12,724,611

 
12,724,611

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

 
1,586,000

 
 
 
 
 
295,800

 
1,586,000

 
 
 
 
 
 
 
 
 
 
 
HKW Capital Partners IV, L.P.
(0%)*(4)
 
Multi-Sector Holdings
 
0.6% Limited Partnership Interest
 
 
 
1,300,300

 
1,436,000

 
 
 
 
 
 
1,300,300

 
1,436,000

 
 
 
 
 
 
 
 
 
 
 
HTC Borrower, LLC (5%)*
 
Hunting and Outdoor Products
 
Subordinated Notes (10% Cash, 3% PIK, Due 09/20)
 
25,735,582

 
25,428,876

 
25,428,876

 
 
 
 
25,735,582

 
25,428,876

 
25,428,876

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

 
7,431,184

 
7,431,184

 
 
Subordinated Notes (10% Cash, 1% PIK, Due 10/22)
 
8,047,164

 
7,896,646

 
7,896,646

 
 
Subordinated Notes (14% PIK, Due 10/22)
 
5,355,263

 
5,297,289

 
5,297,289

 
 
Class A Units (1,289 units)
 
 
 
1,751,483

 
1,751,483

 
 
 
 
20,902,427

 
22,376,602

 
22,376,602

 
 
 
 
 
 
 
 
 
 
 
Inland Pipe Rehabilitation Holding Company LLC (0%)*
 
Cleaning and Repair Services
 
Membership Interest Purchase Warrant (3%)
 
 
 
853,500

 
1,271,000

 
 


 
853,500

 
1,271,000

 
 
 
 
 
 
 
 
 
 
 
K-Square Restaurant Partners, LP (F/K/A The Krystal Company) (1%)*
 
Restaurant
 
Class A Units of Limited Partnership (2,000 units)
 
 
 
638,260

 
3,563,000

 
 
 
 
 
 
638,260

 
3,563,000

 
 
 
 
 
 
 
 
 
 
 
KT Capital Partners, L.P. (0%)*(4)
 
Multi-Sector Holdings
 
Subordinated Notes (10% PIK)
 
769,000

 
374,000

 
769,000

 
 
Subordinated Note (3.3% PIK)
 
162,000

 
81,000

 
162,000

 
 
4.2% Limited Partnership Interest
 
 
 
380,000

 
739,000

 
 
 
 
931,000

 
835,000

 
1,670,000

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

 
6,526,715

 
6,526,715

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

 
1,096,000

 
 
6,545,455

 
7,703,672

 
7,622,715

 
 
 
 
 
 
 
 
 
 
 
MIC Holding LLC (F/K/A Magpul Industries Corp.) (2%)*
 
Firearm Accessories Manufacturer and Distributor
 
Preferred Units (1,470 units)
 
 
 
1,470,000

 
2,813,000

 
 
Common Units (30,000 units)
 
 
 
30,000

 
7,053,000

 
 
 
 
 
 
1,500,000

 
9,866,000

 
 
 
 
 
 
 
 
 
 
 
Micross Solutions LLC (5%)*
 
Provider of Semiconductor Products and Services
 
Subordinated Note (12% Cash, 3% PIK, Due 06/18)
 
24,063,731

 
23,943,422

 
23,943,422

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

 
1,201,000

 
 
24,063,731

 
25,963,115

 
25,144,422

 
 
 
 
 
 
 
 
 
 
 
Motor Vehicle Software Corporation (4%)*
 
Provider of EVR Services
 
Subordinated Note (10% Cash, 0.5% PIK, Due 03/21)
 
20,142,299

 
19,784,923

 
19,784,923

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

 
1,247,000

 
 
 
 
20,142,299

 
20,849,883

 
21,031,923

 
 
 
 
 
 
 
 
 
 
 
Nautic Partners VII, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.4% Limited Partnership Interest
 
 
 
904,146

 
1,382,000

 
 
 
 
 
 
904,146

 
1,382,000

 
 
 
 
 
 
 
 
 
 
 
Nomacorc, LLC (4%)*
 
Synthetic Wine Cork Producer
 
Subordinated Note (10% Cash, 2.3% PIK, Due 07/21)
 
20,637,872

 
20,308,824

 
17,335,000

 
 
Limited Partnership Interest
 
 
 
2,148,000

 
1,244,000

 
 
 
 
20,637,872

 
22,456,824

 
18,579,000

 
 
 
 
 
 
 
 
 
 
 
On Event Services, LLC (5%)*
 
Equipment Rentals
 
Subordinated Notes (10% Cash, 2% PIK, Due 06/20)
 
21,824,632

 
21,205,878

 
21,205,878

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

 
3,663,000

 
 
 
21,824,632

 
23,107,878

 
24,868,878

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

 
22,303,193

 
22,303,193

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

 
1,849,000

Class A Common Units (15,000 units)
 
 
 

 
894,000

 
 
22,644,852

 
23,803,193

 
25,046,193

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

9



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
June 30, 2016
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
PHW Equity Investors, L.P. (F/K/A Performance Health & Wellness Holdings, Inc.) (0%)*
 
Rehabilitation and Wellness Products
 
Class A Limited Partnership Units (15,000 units)
 
 
 
$

 
$
50,000

 
 
 
 
 

 
50,000

 
 
 
 
 
 
 
 
 
 
 
PowerDirect Marketing, LLC (0%)*
 
Marketing Services
 
Subordinated Note (13% Cash, 2% PIK, Due 12/16)(6)
 
$
8,744,209

 
5,927,482

 
1,700,000

Common Unit Purchase Warrants
 
 
 
590,200

 

 
 
8,744,209

 
6,517,682

 
1,700,000

 
 
 
 
 
 
 
 
 
 
 
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)
 
6,799,286

 
6,679,029

 
6,679,029

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

 
2,379,000

 
 
 
 
6,799,286

 
10,333,282

 
9,058,029

 
 
 
 
 
 
 
 
 
 
 
SPC Partners V, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.7% Limited Partnership Interest
 
 
 
1,629,866

 
1,661,000

 
 
 
 
 
 
1,629,866

 
1,661,000

 
 
 
 
 
 
 
 
 
 
 
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)
 
16,239,634

 
16,071,055

 
13,084,739

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

 
2,451,000

 
 
 
16,239,634

 
18,008,476

 
15,535,739

 
 
 
 
 
 
 
 
 
 
 
Tate's Bake Shop (2%)*
 
Producer of Baked Goods
 
Subordinated Note (10% Cash, 3% PIK, Due 02/20)
 
10,574,684

 
10,426,983

 
10,426,983

 
 
Limited Partnership Interest
 
 
 
925,000

 
1,167,000

 
 
 
 
10,574,684

 
11,351,983

 
11,593,983

 
 
 
 
 
 
 
 
 
 
 
TCFI Merlin LLC (3%)*
 
Specialty Staffing Service Provider
 
Senior Note (10% Cash, 1% PIK, Due 09/19)
 
13,701,805

 
13,490,444

 
13,490,444

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

 
500,000

 
 
 
 
13,701,805

 
13,990,444

 
13,990,444

 
 
 
 
 
 
 
 
 
 
 
The Cook & Boardman Group, LLC (3%)*
 
Distributor of Doors and Related Products
 
Subordinated Note (10% Cash, 2.5% PIK, Due 03/20)
 
14,652,496

 
14,445,714

 
14,445,714

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

 
2,382,000

 
 
 
 
14,652,496

 
15,845,714

 
16,827,714

 
 
 
 
 
 
 
 
 
 
 
TK USA Enterprises, Inc. (2%)*
 
Hardware Designer and Distributor
 
Subordinated Note (11% Cash, Due 10/23)
 
12,500,000

 
12,255,694

 
12,255,694

 
 
 
12,500,000

 
12,255,694

 
12,255,694

 
 
 
 
 
 
 
 
 
 
 
Travelpro Products, Inc. ("Travelpro") and TP - Holiday Group Limited ("TP") (4%)*
 
Luggage and Travel Bag Supplier
 
Second Lien Term Note - Travelpro (11% Cash, 2% PIK Due 11/22)
 
10,023,333

 
9,804,372

 
9,804,372

 
 
Second Lien Term Note - TP (11% Cash, 2% PIK, Due 11/22)(4)
 
8,881,733

 
8,684,668

 
8,773,464