10-Q 1 a2018063010qtcap.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, 2018
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:
__________________________________________________________
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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth 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
¨
 
 
Emerging growth company
¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
   ¨
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 1, 2018 was 47,656,108.




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, 2018
 
December 31, 2017
 
(Unaudited)
 
 
Assets:
 
 
 
Investments at fair value:
 
 
 
Non-Control / Non-Affiliate investments (cost of $725,568,309 and $910,150,765 as of June 30, 2018 and December 31, 2017, respectively)
$
679,265,155

 
$
831,194,397

Affiliate investments (cost of $136,593,803 and $149,099,548 as of June 30, 2018 and December 31, 2017, respectively)
153,530,254

 
147,101,949

Control investments (cost of $48,327,499 and $62,375,532 as of June 30, 2018 and December 31, 2017, respectively)
25,610,000

 
37,988,000

Total investments at fair value
858,405,409

 
1,016,284,346

Cash and cash equivalents
216,487,786

 
191,849,697

Interest, fees and other receivables
11,395,287

 
7,806,887

Prepaid expenses and other current assets
2,279,370

 
1,854,861

Deferred financing fees
4,673,000

 
5,186,672

Property and equipment, net
53,735

 
81,149

Total assets
$
1,093,294,587

 
$
1,223,063,612

Liabilities:
 
 
 
Accounts payable and accrued liabilities
$
8,904,672

 
$
9,863,209

Interest payable
3,727,446

 
3,997,480

Taxes payable
126,587

 
796,111

Deferred income taxes
1,680,591

 
1,331,528

Borrowings under credit facility
10,000,000

 
156,070,484

Notes
163,750,577

 
163,408,301

SBA-guaranteed debentures payable
246,798,221

 
246,321,125

Total liabilities
434,988,094

 
581,788,238

Commitments and contingencies (Note 8)
 
 
 
Net Assets:
 
 
 
Common stock, $0.001 par value per share (150,000,000 shares authorized, 48,050,720 and 47,740,832 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively)
48,051

 
47,741

Additional paid-in capital
825,264,541

 
823,614,881

Net investment income in excess of distributions
16,144,459

 
8,305,431

Accumulated realized losses
(129,385,757
)
 
(84,883,623
)
Net unrealized depreciation
(53,764,801
)
 
(105,809,056
)
Total net assets
658,306,493

 
641,275,374

Total liabilities and net assets
$
1,093,294,587

 
$
1,223,063,612

Net asset value per share
$
13.70

 
$
13.43


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,
2018
 
June 30,
2017
 
June 30,
2018
 
June 30,
2017
Investment income:
 
 
 
 
 
 
 
Interest income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
$
17,507,637

 
$
21,655,040

 
$
36,513,687

 
$
42,125,877

Affiliate investments
2,250,311

 
3,879,585

 
4,910,498

 
7,251,720

Control investments
278,091

 
310,611

 
553,127

 
580,147

Total interest income
20,036,039

 
25,845,236

 
41,977,312

 
49,957,744

Dividend income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
66,657

 
980,004

 
252,369

 
1,261,233

Affiliate investments
334,575

 
104,244

 
339,125

 
104,244

Total dividend income
401,232

 
1,084,248

 
591,494

 
1,365,477

Fee and other income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
2,627,353

 
958,416

 
3,921,070

 
2,875,654

Affiliate investments
134,407

 
171,025

 
528,680

 
471,289

Control investments
7,819

 
100,000

 
107,819

 
200,000

Total fee and other income
2,769,579

 
1,229,441

 
4,557,569

 
3,546,943

Payment-in-kind interest income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
1,141,549

 
2,153,265

 
2,448,130

 
4,792,647

Affiliate investments
403,337

 
757,471

 
825,477

 
1,495,937

Total payment-in-kind interest income
1,544,886

 
2,910,736

 
3,273,607

 
6,288,584

Interest income from cash and cash equivalents
721,755

 
144,106

 
1,149,596

 
245,789

Total investment income
25,473,491

 
31,213,767

 
51,549,578

 
61,404,537

Operating expenses:
 
 
 
 
 
 
 
Interest and other financing fees
7,344,335

 
7,113,827

 
14,934,883

 
14,024,130

Compensation expenses
3,842,656

 
3,575,406

 
7,935,508

 
7,825,819

General and administrative expenses
4,224,631

 
1,173,572

 
5,893,140

 
2,384,193

Total operating expenses
15,411,622

 
11,862,805

 
28,763,531

 
24,234,142

Net investment income
10,061,869

 
19,350,962

 
22,786,047

 
37,170,395

Realized and unrealized gains (losses) on investments and foreign currency borrowings:
 
 
 
 
 
 
 
Net realized gains (losses):
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
(29,369,826
)
 
5,258,024

 
(41,309,310
)
 
(7,102,311
)
Affiliate investments
(904,686
)
 
(88,472
)
 
2,352,512

 
3,444,344

Control investments
(6,630,547
)
 

 
(6,626,547
)
 
(4,491,440
)
Net realized gains (losses) on investments
(36,905,059
)
 
5,169,552

 
(45,583,345
)
 
(8,149,407
)
Foreign currency borrowings
(341,915
)
 

 
1,081,211

 

Net realized gains (losses)
(37,246,974
)
 
5,169,552

 
(44,502,134
)
 
(8,149,407
)
Net unrealized appreciation (depreciation):
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
22,220,521

 
(10,898,166
)
 
32,152,905

 
(5,481,230
)
Affiliate investments
17,629,966

 
(5,094,938
)
 
19,085,297

 
(9,337,756
)
Control investments
3,040,908

 
(9,726,000
)
 
1,670,033

 
(8,028,560
)
Net unrealized appreciation (depreciation) on investments
42,891,395

 
(25,719,104
)
 
52,908,235

 
(22,847,546
)
Foreign currency borrowings
99,435

 
(524,975
)
 
(863,980
)
 
(703,767
)
Net unrealized appreciation (depreciation)
42,990,830

 
(26,244,079
)
 
52,044,255

 
(23,551,313
)
Net realized and unrealized gains (losses) on investments and foreign currency borrowings
5,743,856

 
(21,074,527
)
 
7,542,121

 
(31,700,720
)
Provision for taxes
(488,845
)
 
(304,181
)
 
(539,635
)
 
(304,181
)
Net increase (decrease) in net assets resulting from operations
$
15,316,880

 
$
(2,027,746
)
 
$
29,788,533

 
$
5,165,494

Net investment income per share—basic and diluted
$
0.21

 
$
0.41

 
$
0.48

 
$
0.82

Net increase (decrease) in net assets resulting from operations per share—basic and diluted
$
0.32

 
$
(0.04
)
 
$
0.62

 
$
0.11

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

 
$
0.45

 
$
0.30

 
$
0.90

Total dividends/distributions per share
$

 
$
0.45

 
$
0.30

 
$
0.90

Weighted average shares outstanding—basic and diluted
48,041,540

 
47,695,007

 
47,970,594

 
45,232,916

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
 
Net Accumulated
Realized
Losses on Investments
 
Net
Unrealized
Depreciation
 
Total
Net
Assets
 
Number
of Shares
 
Par
Value
 
 
 
 
 
Balance, December 31, 2016
40,401,292

 
$
40,401

 
$
686,835,054

 
$
5,884,512

 
$
(24,211,594
)
 
$
(57,392,115
)
 
$
611,156,258

Net investment income

 

 

 
37,170,395

 

 

 
37,170,395

Stock-based compensation

 

 
2,975,888

 

 

 

 
2,975,888

Net realized gain (loss) on investments

 

 

 

 
(8,149,407
)
 
9,943,707

 
1,794,300

Net unrealized depreciation of investments / foreign currency

 

 

 

 

 
(33,495,020
)
 
(33,495,020
)
Provision for taxes

 

 

 
(304,181
)
 

 

 
(304,181
)
Dividends / distributions
91,366

 
91

 
1,637,467

 
(42,901,067
)
 

 

 
(41,263,509
)
Public offering of common stock
7,000,000

 
7,000

 
132,017,463

 

 

 

 
132,024,463

Issuance of restricted stock
360,470

 
361

 
(361
)
 

 

 

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(107,454
)
 
(107
)
 
(2,113,513
)
 

 

 

 
(2,113,620
)
Balance, June 30, 2017
47,745,674

 
$
47,746

 
$
821,351,998

 
$
(150,341
)
 
$
(32,361,001
)
 
$
(80,943,428
)
 
$
707,944,974

 
 
Common Stock
 
Additional
Paid-In
Capital
 
Investment
Income
in Excess of
Distributions
 
Net Accumulated
Realized
Losses on Investments
 
Net
Unrealized
Depreciation
 
Total
Net
Assets
 
Number
of Shares
 
Par
Value
 
 
 
 
 
Balance, December 31, 2017
47,740,832

 
$
47,741

 
$
823,614,881

 
$
8,305,431

 
$
(84,883,623
)
 
$
(105,809,056
)
 
$
641,275,374

Net investment income

 

 

 
22,786,047

 

 

 
22,786,047

Stock-based compensation

 

 
2,933,454

 

 

 

 
2,933,454

Net realized gain (loss) on investments / foreign currency

 

 

 

 
(44,502,134
)
 
53,271,085

 
8,768,951

Net unrealized depreciation of investments / foreign currency

 

 

 

 

 
(1,226,830
)
 
(1,226,830
)
Provision for taxes

 

 

 
(539,635
)
 

 

 
(539,635
)
Dividends / distributions

 

 

 
(14,407,384
)
 

 

 
(14,407,384
)
Issuance of restricted stock
435,106

 
435

 
(435
)
 

 

 

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(125,218
)
 
(125
)
 
(1,283,359
)
 

 

 

 
(1,283,484
)
Balance, June 30, 2018
48,050,720

 
$
48,051

 
$
825,264,541

 
$
16,144,459

 
$
(129,385,757
)
 
$
(53,764,801
)
 
$
658,306,493


See accompanying notes.


5



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Cash Flows 
 
Six Months Ended
 
Six Months Ended
 
June 30, 2018
 
June 30, 2017
Cash flows from operating activities:
 
 
 
Net increase in net assets resulting from operations
$
29,788,533

 
$
5,165,494

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:
 
 
 
Purchases of portfolio investments
(29,087,262
)
 
(250,992,360
)
Repayments received/sales of portfolio investments
196,625,451

 
88,758,765

Loan origination and other fees received
292,999

 
3,830,367

Net realized loss on investments
45,583,345

 
8,149,407

Net realized gain on foreign currency borrowings
(1,081,211
)
 

Net unrealized (appreciation) depreciation on investments
(53,257,297
)
 
23,945,702

Net unrealized depreciation on foreign currency borrowings
863,980

 
703,767

Deferred income taxes
349,063

 
(1,098,156
)
Payment-in-kind interest accrued, net of payments received
623,880

 
(2,717,697
)
Amortization of deferred financing fees
1,333,044

 
1,214,363

Accretion of loan origination and other fees
(2,890,048
)
 
(2,234,150
)
Accretion of loan discounts
(12,131
)
 
(145,660
)
Depreciation expense
27,414

 
35,312

Stock-based compensation
2,933,454

 
2,975,888

Changes in operating assets and liabilities:
 
 
 
Interest, fees and other receivables
(3,588,400
)
 
1,034,566

Prepaid expenses and other current assets
(424,509
)
 
(274,178
)
Accounts payable and accrued liabilities
(958,537
)
 
(3,207,549
)
Interest payable
(270,034
)
 
140,696

Taxes payable
(669,524
)
 
(489,691
)
Net cash provided by (used in) operating activities
186,182,210

 
(125,205,114
)
Cash flows from investing activities:
 
 
 
Purchases of property and equipment

 
(25,240
)
Net cash used in investing activities

 
(25,240
)
Cash flows from financing activities:
 
 
 
Borrowings under credit facility
4,100,000

 
83,700,000

Repayments of credit facility
(149,953,253
)
 
(86,100,000
)
Financing fees paid

 
(3,105,127
)
Net proceeds related to public offering of common stock

 
132,024,463

Common stock withheld for payroll taxes upon vesting of restricted stock
(1,283,484
)
 
(2,113,620
)
Cash dividends/distributions paid
(14,407,384
)
 
(41,263,509
)
Net cash provided by (used in) financing activities
(161,544,121
)
 
83,142,207

Net increase (decrease) in cash and cash equivalents
24,638,089

 
(42,088,147
)
Cash and cash equivalents, beginning of period
191,849,697

 
107,087,663

Cash and cash equivalents, end of period
$
216,487,786

 
$
64,999,516

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
$
12,690,524

 
$
12,126,129

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

 
$
1,637,558


See accompanying notes.


6



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
June 30, 2018
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(6)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Non–Control / Non–Affiliate Investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aden & Anais Holdings, Inc. (0%)*
 
Baby Products
 
Common Stock (20,000 shares)
 
 
 
$
2,000,000

 
$

 
 
 
 
 
 
2,000,000

 

 
 
 
 
 
 
 
 
 
 
 
AKKR-MVSC Member, LLC (F/K/A Motor Vehicle Software Corporation) (0%)*
 
Provider of EVR Services
 
Class A Units (1,000,000 units)
 
 
 
1,092,964

 
1,359,000

 
 
 
 
 
 
1,092,964

 
1,359,000

 
 
 
 
 
 
 
 
 
 
 
AM General, LLC (1%)*
 
Defense Manufacturing
 
Senior Note (LIBOR + 7.25%, 9.2% Cash,
Due 12/21)(7)
 
$
8,750,000

 
8,556,220

 
8,648,000

 
 
 
 
8,750,000

 
8,556,220

 
8,648,000

 
 
 
 
 
 
 
 
 
 
 
Avantor, Inc. (0%)*
 
Life Sciences and Advanced Technologies
 
Subordinated Note (9.0% Cash, Due 10/25)
 
500,000

 
500,000

 
490,000

 
 
 
 
500,000

 
500,000

 
490,000

 
 
 
 
 
 
 
 
 
 
 
Baker Hill Acquisition, LLC (2%)*
 
Loan Origination Software Solutions Provider
 
Second Lien Term Notes (LIBOR + 11.0%, 13.3% Cash, Due 03/21)(7)
 
13,500,000

 
13,385,833

 
10,421,000

 
 
Delayed Draw Term Note (LIBOR + 11.0%, 13.3% Cash, Due 03/21)(7)
 
2,000,000

 
1,984,489

 
1,984,489

 
 
Limited Partnership Interest
 
 
 
1,498,500

 
89,000

 
 
 
 
15,500,000

 
16,868,822

 
12,494,489

 
 
 
 
 
 
 
 
 
 
 
Cafe Enterprises, Inc. (0%)*
 
Restaurant
 
Second Lien Term Note (Prime + 5.75%, 10.8% Cash, Due 03/19)(5)(7)
 
2,106,518

 
1,936,671

 

 
 
Subordinated Note (7% Cash, 7% PIK, Due 09/19)(5)
 
16,284,714

 
13,745,570

 

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

 

 
 
 
 
18,391,232

 
16,682,241

 

 
 
 
 
 
 
 
 
 
 
 
Captek Softgel International, Inc.
(5%)*
 
Nutraceuticals Manufacturer
 
Subordinated Note (10% Cash, 1.5% PIK, Due 01/23)
 
31,045,919

 
30,789,080

 
30,789,080

Common Stock (38,023 shares)
 
 
 
3,957,697

 
3,145,000

 
 
 
31,045,919

 
34,746,777

 
33,934,080

 
 
 
 
 
 
 
 
 
 
 
Centerfield Media Holding Company (0%)*
 
Digital Marketing
 
Common Shares (500 shares)
 
 
 
377,218

 
934,000

 
 
 
 
 
 
377,218

 
934,000

 
 
 
 
 
 
 
 
 
 
 
CIBT Global, Inc. (2%)*
 
Provider of Mobility Services
 
Second Lien Term Note (LIBOR + 7.75%, 10.1% Cash, Due 06/25)(7)
 
10,000,000

 
9,909,054

 
10,000,000

 
 
 
 
10,000,000

 
9,909,054

 
10,000,000

 
 
 
 
 
 
 
 
 
 
 
CIS Acquisition, LLC (0%)*
 
Secure Communications and Computing Solutions Provider
 
Units (1.09 units)
 
 
 
277,538

 
317,000

 
 
 
 
 
 
277,538

 
317,000

 
 
 
 
 
 
 
 
 
 
 
Community Intervention Services, Inc. (0%)*
 
Provider of Behavioral Health Services
 
Subordinated Note (7% Cash, 6% PIK, Due 01/21) (5)
 
22,361,990

 
17,732,558

 

 
 
 
 
22,361,990

 
17,732,558

 

 
 
 
 
 
 
 
 
 
 
 
Constellis Holdings, LLC (1%)*
 
Provider of Security and Risk Management Services
 
Second Lien Term Note (LIBOR + 9.0%, 11.3% Cash, Due 04/25)(7)
 
5,000,000

 
4,933,187

 
4,903,000

 
 
 
 
5,000,000

 
4,933,187

 
4,903,000

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

 
2,618,000

 
 
 
 
 
 
345,542

 
2,618,000

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

 
404,000

 
 
 
 
 
1,500,000

 
404,000

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

 
552,000

 
 
 
 
 
1,000,000

 
552,000

 
 
 
 
 
 
 
 
 
 
 
Del Real, LLC (2%)*
 
Hispanic Refrigerated Foods Company
 
Subordinated Note (11% Cash, Due 04/23)
 
14,000,000

 
13,777,153

 
13,777,153

 
 
Class A Units (3,000,000 units)
 
 
 
3,000,000

 
2,507,000

 
 
 
 
14,000,000

 
16,777,153

 
16,284,153

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

7



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
June 30, 2018
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(6)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Deva Holdings, Inc. (5%)*
 
Hair Products
 
Senior Note (LIBOR + 6.25%, 8.2% Cash, Due 10/23)(7)
 
$
32,337,500

 
$
31,709,061

 
$
31,709,061

 
 
 
 
32,337,500

 
31,709,061

 
31,709,061

 
 
 
 
 
 
 
 
 
 
 
Dimora Brands, Inc. (3%)*
 
Hardware Designer and Distributor
 
Second Lien Term Note (LIBOR + 8.5%, 10.5% Cash, Due 08/25)(7)
 
20,000,000

 
19,625,820

 
19,635,000

 
 
 
 
20,000,000

 
19,625,820

 
19,635,000

 
 
 
 
 
 
 
 
 
 
 
DLC Acquisition, LLC (5%)*
 
Staffing Firm
 
Senior Notes (LIBOR + 8.0%, 10% Cash, Due 12/20)(7)
 
19,962,500

 
19,848,626

 
19,848,626

 
Senior Note (10% Cash, 2% PIK, Due 12/20)
 
15,721,420

 
15,591,383

 
15,591,383

 
 
 
35,683,920

 
35,440,009

 
35,440,009

 
 
 
 
 
 
 
 
 
 
 
Dyno Acquiror, Inc. (1%)*
 
Sewing Products and Seasonal Decorative Products Supplier
 
Subordinated Note (10.5% Cash, 1.5% PIK, Due 08/20)
 
4,698,615

 
4,692,834

 
4,692,834

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

 
450,000

 
 
 
4,698,615

 
5,292,834

 
5,142,834

 
 
 
 
 
 
 
 
 
 
 
Frozen Specialties, Inc. (2%)*
 
Frozen Foods Manufacturer
 
Subordinated Note (10% Cash, 4% PIK, Due 10/18)
 
14,526,248

 
14,526,248

 
13,126,000

 
 
14,526,248

 
14,526,248

 
13,126,000

 
 
 
 
 
 
 
 
 
 
 
HemaSource, Inc. (2%)*
 
Medical Products Distributor
 
Subordinated Note (9.5% Cash, 1.5% PIK, Due 01/24)
 
10,145,367

 
9,968,779

 
9,968,779

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

 
1,153,000

 
 
 
 
10,145,367

 
10,968,779

 
11,121,779

 
 
 
 
 
 
 
 
 
 
 
HKW Capital Partners IV, L.P.
(0%)*(4)
 
Multi-Sector Holdings
 
0.6% Limited Partnership Interest
 
 
 
849,633

 
1,685,000

 
 
 
 
 
 
849,633

 
1,685,000

 
 
 
 
 
 
 
 
 
 
 
HTC Borrower, LLC (4%)*
 
Hunting and Outdoor Products
 
Subordinated Notes (10% Cash, 3% PIK, Due 09/20)
 
24,818,005

 
24,639,717

 
23,718,000

 
 
 
 
24,818,005

 
24,639,717

 
23,718,000

 
 
 
 
 
 
 
 
 
 
 
ICP Industrial, Inc. (4%)*
 
Coatings Formulator and Manufacturer
 
Second Lien Term Notes (LIBOR + 8.25%, 10.3% Cash, Due 05/24)(7)
 
25,000,000

 
24,429,645

 
24,429,645

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

 
1,664,000

 
 
 
 
25,000,000

 
26,181,128

 
26,093,645

 
 
 
 
 
 
 
 
 
 
 
IDERA, Inc. (1%)*
 
Software Provider
 
Second Lien Term Note (LIBOR + 9.0%, 11.0% Cash, Due 06/25)(7)
 
10,000,000

 
9,862,936

 
9,871,000

 
 
 
 
10,000,000

 
9,862,936

 
9,871,000

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

 
1,075,000

 
 
 
 
853,500

 
1,075,000

 
 
 
 
 
 
 
 
 
 
 
Integrated Efficiency Solutions, Inc. (3%)*
 
Energy Services Contracting Firm
 
Senior Secured Term Note (LIBOR + 9.25%, 11.6% Cash, Due 06/22)(7)
 
17,806,250

 
17,534,847

 
17,534,847

Series B Preferred Units (238,095 units)
 
 
 
300,000

 
253,000

 
 
17,806,250

 
17,834,847

 
17,787,847

 
 
 
 
 
 
 
 
 
 
 
Keystone Peer Review Organization, Inc. (0%)*
 
Healthcare - Managed Care
 
Second Lien Term Note (LIBOR + 9.25%, 11.6% Cash, Due 05/25)(7)
 
3,000,000

 
2,946,488

 
2,929,000

 
 
 
 
3,000,000

 
2,946,488

 
2,929,000

 
 
 
 
 
 
 
 
 
 
 
KidKraft, Inc. (4%)*
 
Children's Toy Manufacturer and Distributor
 
Second Lien Term Note (11% Cash, 1% PIK, Due 03/22)
 
28,085,099

 
27,674,508

 
27,674,508

 
 
 
 
28,085,099

 
27,674,508

 
27,674,508

 
 
 
 
 
 
 
 
 
 
 
K-Square Restaurant Partners, LP (0%)*
 
Restaurant
 
Class A Units of Limited Partnership (2,000 units)
 
 
 
638,260

 

 
 
 
 
 
 
638,260

 

 
 
 
 
 
 
 
 
 
 
 
Lakeview Health Holdings, Inc. (2%)*
 
Substance Abuse Treatment Service Provider
 
Senior Note (LIBOR + 7.0%, 9.5% Cash, Due 12/21)(7)
 
18,333,442

 
18,185,610

 
15,383,000

 
 
Common Stock (2,000 shares)
 
 
 
2,000,000

 
158,000

 
 
 
 
18,333,442

 
20,185,610

 
15,541,000

 
 
 
 
 
 
 
 
 
 
 
MIC Holding LLC (1%)*
 
Firearm Accessories Manufacturer and Distributor
 
Preferred Units (1,470 units)
 
 
 
1,470,000

 
3,688,000

 
 
Common Units (30,000 units)
 
 
 
30,000

 
5,266,000

 
 
 
 
 
 
1,500,000

 
8,954,000

 
 
 
 
 
 
 
 
 
 
 

8



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
June 30, 2018
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(6)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Micross Solutions LLC (2%)*
 
Provider of Semiconductor Products and Services
 
Senior Note (LIBOR + 5.75%, 8.1% Cash,
Due 08/23)(7)
 
$
14,925,000

 
$
14,764,746

 
$
14,378,000

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

 
1,143,000

 
 
14,925,000

 
16,784,439

 
15,521,000

 
 
 
 
 
 
 
 
 
 
 
MS Investment Vehicle, LLC (F/K/A Media Storm, LLC) (0%)*
 
Marketing Services
 
Membership Units (1,216,204 units)
 
 
 
1,176,957

 

 
 


 
1,176,957

 

 
 
 
 
 
 
 
 
 
 
 
Nautic Partners VII, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.4% Limited Partnership Interest
 
 
 
830,315

 
1,056,000

 
 
 
 
 
 
830,315

 
1,056,000

 
 
 
 
 
 
 
 
 
 
 
Navicure, Inc. (1%)*
 
Healthcare Revenue Cycle Management Software
 
Second Lien Term Note (LIBOR + 7.5%, 9.5% Cash, Due 11/25)(7)
 
6,000,000

 
5,944,070

 
5,943,000

 
 
 
 
6,000,000

 
5,944,070

 
5,943,000

 
 
 
 
 
 
 
 
 
 
 
Orchid Underwriters Agency, LLC (1%)*
 
Insurance Underwriter
 
Subordinated Note (10% Cash, 1.5% PIK, Due 03/23)
 
2,151,359

 
2,114,735

 
2,114,735

Subordinated Note (13.5% PIK, Due 03/24)
 
868,538

 
854,840

 
854,840

Class A Preferred Units (15,000 units)
 
 
 
338,158

 
1,020,000

Class A Common Units (15,000 units)
 
 
 

 
1,586,000

 
 
3,019,897

 
3,307,733

 
5,575,575

 
 
 
 
 
 
 
 
 
 
 
ProAmpac PG Borrower LLC (2%)*
 
Manufacturer of Flexible Packaging Products
 
Second Lien Term Note (LIBOR + 8.5%, 10.6% Cash, Due 11/24)(7)
 
15,000,000

 
14,805,398

 
14,975,000

 
 
 
 
15,000,000

 
14,805,398

 
14,975,000

 
 
 
 
 
 
 
 
 
 
 
Q International Courier, LLC (2%)*
 
Third-Party Logistics Provider
 
Second Lien Term Note (LIBOR + 8.25%, 10.2% Cash, Due 09/25)(7)
 
14,000,000

 
13,738,250

 
13,738,250

 
 
 
 
14,000,000

 
13,738,250

 
13,738,250

 
 
 
 
 
 
 
 
 
 
 
RMP Group, Inc. (2%)*
 
Healthcare Revenue Cycle Management Services
 
Subordinated Note (10.5% Cash, 1% PIK, Due 09/22)
 
10,133,879

 
9,969,884

 
9,969,884

 
 
Units (1,000 units)
 
 
 
1,000,000

 
750,000

 
 
 
 
10,133,879

 
10,969,884

 
10,719,884

 
 
 
 
 
 
 
 
 
 
 
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)
 
7,748,786

 
7,658,345

 
7,658,345

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

 
8,464,000

 
 
 
 
7,748,786

 
11,312,598

 
16,122,345

 
 
 
 
 
 
 
 
 
 
 
SCA Pharmaceuticals, LLC (1%)*
 
Provider of Pharmaceutical Products
 
Subordinated Note (LIBOR + 9.0%, 11.3% Cash, Due 12/20)(7)
 
10,000,000

 
9,857,009

 
9,857,009

 
 
 
 
10,000,000

 
9,857,009

 
9,857,009

 
 
 
 
 
 
 
 
 
 
 
Schweiger Dermatology Group, LLC (5%)*
 
Provider of Dermatology Services
 
Senior Notes (LIBOR + 8.5%, 10.8% Cash,
Due 06/22)(7)
 
34,800,000

 
34,348,098

 
34,348,098

 
 
Class D Common Units (1,185,770 units)
 
 
 
600,000

 
1,106,000

 
 
 
 
34,800,000

 
34,948,098

 
35,454,098

 
 
 
 
 
 
 
 
 
 
 
SCUF Gaming, Inc. (4%)*
 
Gaming Controller Manufacturer
 
Senior Notes (LIBOR + 8.5%, 10.5% Cash,
Due 12/21)(7)
 
24,757,920

 
24,384,015

 
24,384,015

 
 
Revolver Loan (LIBOR + 8.5%, 10.5% Cash,
Due 06/18)(7)
 
1,500,000

 
1,500,000

 
1,500,000

 
 
Common Stock (27,112 shares)
 
 
 
742,000

 
471,000

 
 
 
 
26,257,920

 
26,626,015

 
26,355,015

 
 
 
 
 
 
 
 
 
 
 
SMB Shipping Logistics, LLC (F/K/A REP WWEX Acquisition Parent, LLC) (2%)*
 
Third-Party Logistics Provider
 
Second Lien Term Note (LIBOR + 8.75%, 10.7% Cash, Due 02/25)(7)
 
15,000,000

 
14,805,123

 
14,864,000

 
 
 
 
15,000,000

 
14,805,123

 
14,864,000

 
 
 
 
 
 
 
 
 
 
 
Smile Brands, Inc. (4%)*
 
Dental Service Organization
 
Subordinated Notes (10% Cash, 2% PIK, Due 02/23)
 
23,027,592

 
22,677,066

 
22,677,066

 
 
Class A Units (3,000 units)
 
 
 
3,000,000

 
3,615,000

 
 
 
 
23,027,592

 
25,677,066

 
26,292,066

 
 
 
 
 
 
 
 
 
 
 
SPC Partners V, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.7% Limited Partnership Interest
 
 
 
2,260,450

 
2,509,000

 
 
 
 
 
 
2,260,450

 
2,509,000

 
 
 
 
 
 
 
 
 
 
 

9



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
June 30, 2018
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(6)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
SPC Partners VI, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.6% Limited Partnership Interest
 
 
 
$
475,450

 
$
416,450

 
 
 
 
 
 
475,450

 
416,450

 
 
 
 
 
 
 
 
 
 
 
St. Croix Hospice Acquisition Corp. (1%)*
 
Hospice Services Provider
 
Second Lien Term Note (LIBOR + 8.75%, 10.7% Cash, Due 03/24)(7)
 
$
9,200,000

 
9,073,792

 
9,073,792

 
 
Series A Preferred Units (500 units)
 
 
 
500,000

 
299,000

 
 
Class B Common Units (500 units)
 
 
 

 

 
 
 
 
9,200,000

 
9,573,792

 
9,372,792

 
 
 
 
 
 
 
 
 
 
 
Tax Advisors Group, LLC (2%)*
 
Tax Advisory Services
 
Subordinated Note (10% Cash, 2% PIK, Due 12/22)
 
12,400,000

 
12,187,679

 
12,187,679

 
 
Class A Units (386 units)
 
 
 
1,458,824

 
2,129,000

 
 
 
 
12,400,000

 
13,646,503

 
14,316,679

 
 
 
 
 
 
 
 
 
 
 
TCFI Merlin LLC ("Merlin") and TCFI CSG LLC ("CSG") (0%)*
 
Specialty Staffing Service Provider
 
Limited Partnership Units - Merlin (500,500 units)
 
 
 
285,485

 
1,889,000

 
 
Class A Units - CSG (100,000 units)
 
 
 
100,000

 
311,000

 
 
 
 

 
385,485

 
2,200,000

 
 
 
 
 
 
 
 
 
 
 
The Cook & Boardman Group, LLC (1%)*
 
Distributor of Doors and Related Products
 
Class A Units (1,400,000 units)
 
 
 
1,400,000

 
5,339,000

 
 
 
 
 
 
1,400,000

 
5,339,000

 
 
 
 
 
 
 
 
 
 
 
Trademark Global LLC (4%)*
 
Supplier to Mass Market Internet Retail
 
Senior Note (LIBOR + 5.5%, 7.5% Cash, Due 10/22)(7)
 
9,836,927

 
9,746,198

 
9,746,198

 
 
Subordinated Note (10% Cash, 1.3% PIK, Due 04/23)
 
14,800,000

 
14,624,529

 
14,624,529

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

 
1,500,000

 
 
Class B Units (1,500,000 units)
 
 
 

 
1,214,000

 
 
 
 
24,636,927

 
25,870,727

 
27,084,727

 
 
 
 
 
 
 
 
 
 
 
Travelpro Products, Inc. ("Travelpro") and TP - Holiday Group Limited ("TP") (3%)*
 
Luggage and Travel Bag Supplier
 
Second Lien Term Note - Travelpro (11% Cash, 2% PIK, Due 11/22)
 
10,437,120

 
10,272,853

 
10,272,853

 
 
Second Lien Term Note - TP (11% Cash, 2% PIK, Due 11/22)(4)
 
9,246,131

 
9,098,289

 
9,059,682

 
 
Common Units - Travelpro (2,000,000 units)
 
 
 
2,000,000

 
2,025,000

 
 
 
 
19,683,251

 
21,371,142

 
21,357,535

 
 
 
 
 
 
 
 
 
 
 
United Biologics, LLC (0%)*
 
Allergy Immunotherapy
 
Class A-1 Common Units (18,818 units)
 
 
 
137,324

 
137,325

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

 
686,000

 
Class A-2 Common Kicker Units (444,003 units)
 
 
 

 

 
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

 
172,000

 
 
 
 


 
2,975,430

 
995,325

 
 
 
 
 
 
 
 
 
 
 
Vantage Mobility International, LLC (4%)*
 
Wheelchair Accessible Vehicle Manufacturer
 
Subordinated Notes (11.2% Cash, Due 09/21)(7)
 
30,708,796

 
30,271,875

 
26,178,000

 
 
Class A Units (1,750,000 units)
 
 
 
1,750,000

 

 
 
 
 
30,708,796

 
32,021,875

 
26,178,000

 
 
 
 
 
 
 
 
 
 
 
Vinvention Capital Partners TE LP (F/K/A Nomacorc, LLC) (0%)*
 
Synthetic Wine Cork Producer
 
Limited Partnership Interest
 
 
 
2,369,597

 
1,013,000

 
 
 
 


 
2,369,597

 
1,013,000

 
 
 
 
 
 
 
 
 
 
 
WMI Holding, LLC ("WMI Holding") and WMI Parent, Inc. ("WMI Parent") (0%)*
 
Full-Service Media Organization
 
Class A Common Units - WMI Holding (16,300 units)
 
 
 
1,630,000

 

 
 
Common Stock - WMI Parent (10 shares)
 
 
 

 

 
 
 
 

 
1,630,000

 

 
 
 
 
 
 
 
 
 
 
 
WSO Holdings, LP (0%)*
 
Organic/Fair Trade Sugar, Syrup, Nectar and Honey Producer