Quarterly Report


Table of Contents


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, 2017
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,” “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 2, 2017 was 47,745,674.




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

 
 
Page
PART I – FINANCIAL INFORMATION
Item 1.
 
 
 
 
 
Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2017 and 2016
 
Unaudited Consolidated Schedule of Investments as of June 30, 2017
 
 
 
Unaudited Schedule of Investments in and Advances to Affiliates for the Six Months Ended June 30, 2017
 
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, 2017
 
December 31, 2016
 
(Unaudited)
 
 
Assets:
 
 
 
Investments at fair value:
 
 
 
Non-Control / Non-Affiliate investments (cost of $986,706,846 and $888,974,154 as of June 30, 2017 and December 31, 2016, respectively)
$
956,156,761

 
$
857,604,639

Affiliate investments (cost of $201,879,074 and $162,539,224 as of June 30, 2017 and December 31, 2016, respectively)
190,754,277

 
161,510,773

Control investments (cost of $63,696,899 and $45,418,113 as of June 30, 2017 and December 31, 2016, respectively)
22,401,769

 
18,791,769

Total investments at fair value
1,169,312,807

 
1,037,907,181

Cash and cash equivalents
64,999,516

 
107,087,663

Interest, fees and other receivables
9,155,222

 
10,189,788

Prepaid expenses and other current assets
1,933,748

 
1,659,570

Deferred financing fees
5,372,998

 
2,699,960

Property and equipment, net
96,422

 
106,494

Total assets
$
1,250,870,713

 
$
1,159,650,656

Liabilities:
 
 
 
Accounts payable and accrued liabilities
$
3,589,695

 
$
6,797,244

Interest payable
4,137,636

 
3,996,940

Taxes payable

 
489,691

Deferred income taxes
955,545

 
2,053,701

Borrowings under credit facility
125,315,242

 
127,011,475

Notes
163,076,680

 
162,755,381

SBA-guaranteed debentures payable
245,850,941

 
245,389,966

Total liabilities
542,925,739

 
548,494,398

Commitments and contingencies (Note 7)
 
 
 
Net Assets:
 
 
 
Common stock, $0.001 par value per share (150,000,000 shares authorized, 47,745,674 and 40,401,292 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively)
47,746

 
40,401

Additional paid-in capital
821,351,998

 
686,835,054

Net investment income in excess of (less than) distributions
(150,341
)
 
5,884,512

Accumulated realized losses
(32,361,001
)
 
(24,211,594
)
Net unrealized depreciation
(80,943,428
)
 
(57,392,115
)
Total net assets
707,944,974

 
611,156,258

Total liabilities and net assets
$
1,250,870,713

 
$
1,159,650,656

Net asset value per share
$
14.83

 
$
15.13


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,
2017
 
June 30,
2016
 
June 30,
2017
 
June 30,
2016
Investment income:
 
 
 
 
 
 
 
Interest income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
$
21,655,040

 
$
17,486,022

 
$
42,125,877

 
$
35,668,676

Affiliate investments
3,879,585

 
3,356,738

 
7,251,720

 
6,741,107

Control investments
310,611

 
267,298

 
580,147

 
460,914

Total interest income
25,845,236

 
21,110,058

 
49,957,744

 
42,870,697

Dividend income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
980,004

 
48,589

 
1,261,233

 
(1,198,171
)
Affiliate investments
104,244

 
302,207

 
104,244

 
462,262

Control investments

 
300,000

 

 
300,000

Total dividend income
1,084,248

 
650,796

 
1,365,477

 
(435,909
)
Fee and other income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
958,416

 
2,452,792

 
2,875,654

 
4,076,678

Affiliate investments
171,025

 
226,551

 
471,289

 
536,566

Control investments
100,000

 
100,000

 
200,000

 
200,000

Total fee and other income
1,229,441

 
2,779,343

 
3,546,943

 
4,813,244

Payment-in-kind interest income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
2,153,265

 
2,731,689

 
4,792,647

 
5,653,293

Affiliate investments
757,471

 
1,094,522

 
1,495,937

 
2,083,735

Total payment-in-kind interest income
2,910,736

 
3,826,211

 
6,288,584

 
7,737,028

Interest income from cash and cash equivalents
144,106

 
55,452

 
245,789

 
92,670

Total investment income
31,213,767

 
28,421,860

 
61,404,537

 
55,077,730

Operating expenses:
 
 
 
 
 
 
 
Interest and other financing fees
7,113,827

 
6,764,654

 
14,024,130

 
13,283,224

Compensation expenses
3,575,406

 
4,096,472

 
7,825,819

 
13,546,965

General and administrative expenses
1,173,572

 
1,221,821

 
2,384,193

 
2,310,545

Total operating expenses
11,862,805

 
12,082,947

 
24,234,142

 
29,140,734

Net investment income
19,350,962

 
16,338,913

 
37,170,395

 
25,936,996

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

 
5,621,127

 
(7,102,311
)
 
6,205,914

Affiliate investments
(88,472
)
 
(1,683,731
)
 
3,444,344

 
(1,682,304
)
Control investments

 

 
(4,491,440
)
 

Net realized gains (losses)
5,169,552

 
3,937,396

 
(8,149,407
)
 
4,523,610

Net unrealized depreciation:
 
 
 
 
 
 
 
Investments
(25,719,104
)
 
(13,529,964
)
 
(22,847,546
)
 
(10,445,641
)
Foreign currency borrowings
(524,975
)
 
(59,268
)
 
(703,767
)
 
(911,791
)
Net unrealized depreciation
(26,244,079
)
 
(13,589,232
)
 
(23,551,313
)
 
(11,357,432
)
Net realized and unrealized losses on investments and foreign currency borrowings
(21,074,527
)
 
(9,651,836
)
 
(31,700,720
)
 
(6,833,822
)
Tax benefit (provision)
(304,181
)
 
(250
)
 
(304,181
)
 
10,911

Net increase (decrease) in net assets resulting from operations
$
(2,027,746
)
 
$
6,686,827

 
$
5,165,494

 
$
19,114,085

Net investment income per share—basic and diluted
$
0.41

 
$
0.49

 
$
0.82

 
$
0.77

Net increase (decrease) in net assets resulting from operations per share—basic and diluted
$
(0.04
)
 
$
0.20

 
$
0.11

 
$
0.57

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

 
$
0.45

 
$
0.90

 
$
0.99

Total dividends/distributions per share
$
0.45

 
$
0.45

 
$
0.90

 
$
0.99

Weighted average shares outstanding—basic and diluted
47,695,007

 
33,584,466

 
45,232,916

 
33,532,406

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
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

 
 
Common Stock
 
Additional
Paid-In
Capital
 
Investment
Income
in Excess of (Less Than)
Distributions
 
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

Realized gain (loss) on investments

 

 

 

 
(8,149,407
)
 
9,943,707

 
1,794,300

Net unrealized loss on investments / foreign currency

 

 

 

 

 
(33,495,020
)
 
(33,495,020
)
Tax provision

 

 

 
(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


See accompanying notes.


5



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Cash Flows  
 
Six Months Ended
 
Six Months Ended
 
June 30, 2017
 
June 30, 2016
Cash flows from operating activities:
 
 
 
Net increase in net assets resulting from operations
$
5,165,494

 
$
19,114,085

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:
 
 
 
Purchases of portfolio investments
(250,992,360
)
 
(75,444,437
)
Repayments received/sales of portfolio investments
88,758,765

 
119,484,196

Loan origination and other fees received
3,830,367

 
1,622,991

Net realized (gain) loss on investments
8,149,407

 
(4,523,610
)
Net unrealized depreciation on investments
23,945,702

 
10,058,066

Net unrealized depreciation on foreign currency borrowings
703,767

 
911,791

Deferred income taxes
(1,098,156
)
 
387,577

Payment-in-kind interest accrued, net of payments received
(2,717,697
)
 
(1,993,156
)
Amortization of deferred financing fees
1,214,363

 
1,069,711

Accretion of loan origination and other fees
(2,234,150
)
 
(2,550,623
)
Accretion of loan discounts
(145,660
)
 
(199,697
)
Accretion of discount on SBA-guaranteed debentures payable

 
31,899

Depreciation expense
35,312

 
33,432

Stock-based compensation
2,975,888

 
5,886,490

Changes in operating assets and liabilities:
 
 
 
Interest, fees and other receivables
1,034,566

 
(4,533,464
)
Prepaid expenses and other current assets
(274,178
)
 
(956,646
)
Accounts payable and accrued liabilities
(3,207,549
)
 
(4,089,336
)
Interest payable
140,696

 
127,007

Taxes payable
(489,691
)
 
(735,498
)
Net cash provided by (used in) operating activities
(125,205,114
)
 
63,700,778

Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(25,240
)
 
(47,254
)
Net cash used in investing activities
(25,240
)
 
(47,254
)
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
83,700,000

 
68,901,849

Repayments of credit facility
(86,100,000
)
 
(49,000,000
)
Financing fees paid
(3,105,127
)
 
(1,123,400
)
Net proceeds related to public offering of common stock
132,024,463

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(2,113,620
)
 
(3,484,074
)
Cash dividends/distributions paid
(41,263,509
)
 
(31,633,584
)
Net cash provided by financing activities
83,142,207

 
8,660,791

Net increase (decrease) in cash and cash equivalents
(42,088,147
)
 
72,314,315

Cash and cash equivalents, beginning of period
107,087,663

 
52,615,418

Cash and cash equivalents, end of period
$
64,999,516

 
$
124,929,733

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
$
12,126,129

 
$
11,625,782

Summary of non-cash financing transactions:
 
 
 
Dividends/distributions paid through DRIP share issuances
$
1,637,558

 
$
1,590,155


See accompanying notes.


6



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
June 30, 2017
Portfolio Company
 
Industry
 
Type of Investment (1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value (3)
Non–Control / Non–Affiliate Investments:
 
 
 
 
 
 
ACA Holdings LLC (0%)*
 
Security Company
 
Preferred Units (2,000,000 units)
 
 
 
$
2,000,000

 
$

 
 
 
 
 
 
2,000,000

 

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

 
13,611,225

 
13,611,225

 
 
Class A Units (1,500,000 units)
 
 
 
901,026

 
3,382,000

 
 
 
 
13,819,514

 
14,512,251

 
16,993,225

 
 
 
 
 
 
 
 
 
 
 
Aden & Anais Holdings, Inc. (0%)*
 
Baby Products
 
Common Stock (20,000 shares)
 
 
 
2,000,000

 
1,512,000

 
 
 
 
 
 
2,000,000

 
1,512,000

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

 
13,057,984

 
13,168,124

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

 
7,096,000

 
 
 
13,168,124

 
14,307,984

 
20,264,124

 
 
 
 
 
 
 
 
 
 
 
AM General, LLC (4%)*
 
Defense Manufacturing
 
Senior Note (8.3% Cash, Due 12/21)
 
9,500,000

 
9,362,397

 
9,455,000

 
 
Second Lien Term Note (12.8% Cash, Due 06/22)
 
20,000,000

 
19,439,081

 
19,736,000

 
 
 
 
29,500,000

 
28,801,478

 
29,191,000

 
 
 
 
 
 
 
 
 
 
 
Avantor Performance Materials Holdings, LLC (2%)*
 
Life Sciences and Advanced Technologies
 
Second Lien Term Note (9.3% Cash, Due 03/25)
 
15,000,000

 
14,853,217

 
15,081,000

 
 
 
 
15,000,000

 
14,853,217

 
15,081,000

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

 
1,759,000

 
 
 
 
 
 
1,300,000

 
1,759,000

 
 
 
 
 
 
 
 
 
 
 
Baker Hill Acquisition, LLC (2%)*
 
Loan Origination Software Solutions Provider
 
Second Lien Term Notes (12.2% Cash, Due 03/21)
 
13,500,000

 
13,350,486

 
11,727,000

 
 
Delayed Draw Term Note (12.2% Cash, Due 03/21)
 
1,500,000

 
1,500,000

 
1,500,000

 
 
Limited Partnership Interest
 
 
 
1,498,500

 
155,000

 
 
 
 
15,000,000

 
16,348,986

 
13,382,000

 
 
 
 
 
 
 
 
 
 
 
Cafe Enterprises, Inc. (2%)*
 
Restaurant
 
Second Lien Term Note (10% Cash, Due 03/19)
 
500,000

 
500,000

 
500,000

 
 
Subordinated Note (7% Cash, 7% PIK, Due 09/19) (5)
 
14,378,444

 
13,999,989

 
10,139,000

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

 

 
 
 
 
14,878,444

 
15,499,989

 
10,639,000

 
 
 
 
 
 
 
 
 
 
 
Captek Softgel International, Inc.
(2%)*
 
Nutraceutical Manufacturer
 
Subordinated Note (10% Cash, 2.5% PIK, Due 06/21)
 
15,582,226

 
15,348,620

 
15,348,620

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

 
1,500,000

 
 
 
15,582,226

 
16,848,620

 
16,848,620

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

 
957,000

 
 
 
 
 
119,735

 
957,000

 
 
 
 
 
 
 
 
 
 
 
Centerfield Media Holding Company (0%)*
 
Digital Marketing
 
Common Shares (500 shares)
 
 
 
500,000

 
1,110,000

 
 
 
 


 
500,000

 
1,110,000

 
 
 
 
 
 
 
 
 
 
 
CIBT Global, Inc. (1%)*
 
Provider of Mobility Services
 
Second Lien Term Note (8.8% Cash, Due 06/25)
 
10,000,000

 
9,900,000

 
9,900,000

 
 
 
 
10,000,000

 
9,900,000

 
9,900,000

 
 
 
 
 
 
 
 
 
 
 
Community Intervention Services, Inc. (1%)*
 
Provider of Behavioral Health Services
 
Subordinated Note (7% Cash, 6% PIK, Due 01/21) (6)
 
19,642,239

 
17,732,558

 
10,391,000

 
 
 
 
19,642,239

 
17,732,558

 
10,391,000

 
 
 
 
 
 
 
 
 
 
 
Constellis Holdings, LLC (1%)*
 
Provider or Security and Risk Services
 
Second Lien Term Note (10.2% Cash, Due 04/25)
 
5,000,000

 
4,926,558

 
4,926,558

 
 
 
 
5,000,000

 
4,926,558

 
4,926,558

 
 
 
 
 
 
 
 
 
 
 
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

 
1,927,000

 
 
 
 
 
1,500,000

 
1,927,000

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

 
1,027,000

 
 
 
 
 
1,000,000

 
1,027,000

 
 
 
 
 
 
 
 
 
 
 

7



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
June 30, 2017
Portfolio Company
 
Industry
 
Type of Investment (1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value (3)
Del Real, LLC (2%)*
 
Hispanic Refrigerated Foods Company
 
Subordinated Note (11% Cash, Due 04/23)
 
$
14,000,000

 
$
13,743,172

 
$
13,743,172

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

 
3,477,000

 
 
 
 
14,000,000

 
16,743,172

 
17,220,172

 
 
 
 
 
 
 
 
 
 
 
Dimora Brands, Inc. (2%)*
 
Hardware Designer and Distributor
 
Second Lien Term Note (11.2% Cash, Due 10/23)
 
12,500,000

 
12,279,932

 
12,525,000

 
 
 
 
12,500,000

 
12,279,932

 
12,525,000

 
 
 
 
 
 
 
 
 
 
 
DLC Acquisition, LLC (6%)*
 
Staffing Firm
 
Senior Notes (10% Cash, Due 12/20)
 
22,250,000

 
22,032,962

 
22,032,962

 
Senior Note (10% Cash, 2% PIK, Due 12/20)
 
17,100,429

 
16,926,727

 
16,926,727

 
 
 
39,350,429

 
38,959,689

 
38,959,689

 
 
 
 
 
 
 
 
 
 
 
Dyno Acquiror, Inc. (1%)*
 
Sewing Products and Seasonal Decorative Products Supplier
 
Subordinated Note (10.5% Cash, 1.5% PIK, Due 08/20)
 
4,628,703

 
4,601,457

 
4,601,457

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

 
698,000

 
 
 
4,628,703

 
5,201,457

 
5,299,457

 
 
 
 
 
 
 
 
 
 
 
Eckler's Holdings, Inc. (1%)*
 
Restoration Parts and Accessories for Classic Cars and Trucks
 
Subordinated Note (8% Cash, 7.5% PIK, Due 03/19) (5)
 
12,871,305

 
12,582,117

 
9,202,000

 
Common Stock (18,029 shares)
 
 
 
183,562

 

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

 

 
Series B Preferred Stock (702 shares)
 
 
 
435,127

 

 
 
 
12,871,305

 
14,796,932

 
9,202,000

 
 
 
 
 
 
 
 
 
 
 
Fridababy Holdings, LLC (3%)*
 
Baby Products
 
Subordinated Notes (10.0% Cash, Due 10/21)
 
23,000,000

 
22,595,385

 
22,595,385

 
 
Class B Units (4,500 units)
 
 
 
273,401

 
317,000

 
 
 
 
23,000,000

 
22,868,786

 
22,912,385

 
 
 
 
 
 
 
 
 
 
 
FrontStream Holdings, LLC (2%)*
 
Payment and Donation Management Product Service Provider
 
Subordinated Note (13% Cash, Due 12/20)
 
13,375,000

 
13,266,643

 
11,804,000

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

 
141,000

 
 
 
 
13,375,000

 
13,766,643

 
11,945,000

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

 
8,432,417

 
4,750,000

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

 

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

 

 
 
 
 
8,462,629

 
9,182,417

 
4,750,000

 
 
 
 
 
 
 
 
 
 
 
Frozen Specialties, Inc. (2%)*
 
Frozen Foods Manufacturer
 
Subordinated Note (10% Cash, 4% PIK, Due 12/17)
 
13,951,763

 
13,951,763

 
13,951,763

 
 
13,951,763

 
13,951,763

 
13,951,763

 
 
 
 
 
 
 
 
 
 
 
GST AutoLeather, Inc. (3%)*
 
Supplier of Automotive Interior Leather
 
Subordinated Note (11% Cash, 2% PIK, Due 01/21)
 
23,364,657

 
23,073,507

 
19,275,000

 
 
 
 
23,364,657

 
23,073,507

 
19,275,000

 
 
 
 
 
 
 
 
 
 
 
Halo Branded Solutions, Inc. (2%)*
 
Supply Chain Services
 
Subordinated Notes (11% Cash, 1% PIK, Due 10/22)
 
10,462,805

 
10,257,520

 
10,257,520

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

 
3,743,000

 
 
 
 
10,462,805

 
12,857,520

 
14,000,520

 
 
 
 
 
 
 
 
 
 
 
HKW Capital Partners IV, L.P.
(0%)* (4)
 
Multi-Sector Holdings
 
0.6% Limited Partnership Interest
 
 
 
987,379

 
1,643,000

 
 
 
 
 
 
987,379

 
1,643,000

 
 
 
 
 
 
 
 
 
 
 
HTC Borrower, LLC (4%)*
 
Hunting and Outdoor Products
 
Subordinated Notes (10% Cash, 3% PIK, Due 09/20)
 
26,527,346

 
26,281,681

 
26,281,681

 
 
 
 
26,527,346

 
26,281,681

 
26,281,681

 
 
 
 
 
 
 
 
 
 
 
ICP Industrial, Inc. (3%)*
 
Coatings Formulator and Manufacturer
 
Subordinated Note (9.7% Cash, Due 04/22)
 
7,500,000

 
7,440,138

 
7,440,138

 
 
Subordinated Notes (10% Cash, 1% PIK, Due 10/22)
 
8,129,065

 
7,996,331

 
7,996,331

 
 
Subordinated Notes (14% PIK, Due 10/22)
 
6,156,839

 
6,105,385

 
6,105,385

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

 
1,699,000

 
 
 
 
21,785,904

 
23,293,337

 
23,240,854

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

 
1,262,000

 
 
 
 
853,500

 
1,262,000

 
 
 
 
 
 
 
 
 
 
 
IPS Structural Adhesives Holdings, Inc. (2%)*
 
Specialty Adhesives and Plumbing Products Manufacturer
 
Second Lien Term Note (10.5% Cash, Due 12/24)
 
15,000,000

 
14,712,356

 
14,994,000

 
 
 
 
15,000,000

 
14,712,356

 
14,994,000

 
 
 
 
 
 
 
 
 
 
 

8



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
June 30, 2017
Portfolio Company
 
Industry
 
Type of Investment (1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value (3)
Keystone Peer Review Organization, Inc. (0%)*
 
Health Care - Managed Care
 
Second Lien Term Note (10.3% Cash, Due 05/25)
 
$
3,000,000

 
$
2,941,233

 
$
2,941,233

 
 
 
 
3,000,000

 
2,941,233

 
2,941,233

 
 
 
 
 
 
 
 
 
 
 
KidKraft, Inc. (4%)*
 
Children's Toy Manufacturer and Distributor
 
Second Lien Term Note (11% Cash, 1% PIK, Due 03/22)
 
27,806,755

 
27,312,088

 
27,312,088

 
 
 
 
27,806,755

 
27,312,088

 
27,312,088

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

 
3,317,000

 
 
 
 
 
 
638,260

 
3,317,000

 
 
 
 
 
 
 
 
 
 
 
Lakeview Health Holdings, Inc. (3%)*
 
Substance Abuse Treatment Service Provider
 
Senior Note (7.9% Cash, Due 12/21)
 
18,519,569

 
18,336,295

 
18,336,295

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

 
1,342,000

 
 
 
 
18,519,569

 
20,336,295

 
19,678,295

 
 
 
 
 
 
 
 
 
 
 
Lighting Retrofit International, LLC (3%)*
 
Energy Services Contracting Firm
 
Senior Secured Term Note (10.6% Cash, Due 06/22)
 
18,500,000

 
18,176,250

 
18,176,250

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

 
300,000

 
 
18,500,000

 
18,476,250

 
18,476,250

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

 
6,541,519

 
5,626,000

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

 
439,000

 
 
6,545,455

 
7,718,476

 
6,065,000

 
 
 
 
 
 
 
 
 
 
 
MIC Holding LLC (2%)*
 
Firearm Accessories Manufacturer and Distributor
 
Preferred Units (1,470 units)
 
 
 
1,470,000

 
3,221,000

 
 
Common Units (30,000 units)
 
 
 
30,000

 
8,463,000

 
 
 
 
 
 
1,500,000

 
11,684,000

 
 
 
 
 
 
 
 
 
 
 
Micross Solutions LLC (4%)*
 
Provider of Semiconductor Products and Services
 
Subordinated Note (12% Cash, 3% PIK, Due 06/18)
 
24,805,960

 
24,742,254

 
24,742,254

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

 
2,266,000

 
 
24,805,960

 
26,761,947

 
27,008,254

 
 
 
 
 
 
 
 
 
 
 
Motor Vehicle Software Corporation (3%)*
 
Provider of EVR Services
 
Subordinated Note (10% Cash, 0.5% PIK, Due 03/21)
 
20,296,026

 
20,000,623

 
20,000,623

 
 
Class A Units (1,000,000 units)
 
 
 
1,087,460

 
1,450,000

 
 
 
 
20,296,026

 
21,088,083

 
21,450,623

 
 
 
 
 
 
 
 
 
 
 
Nautic Partners VII, LP (0%)* (4)
 
Multi-Sector Holdings
 
0.4% Limited Partnership Interest
 
 
 
1,180,910

 
1,715,000

 
 
 
 
 
 
1,180,910

 
1,715,000

 
 
 
 
 
 
 
 
 
 
 
Nomacorc, LLC (2%)*
 
Synthetic Wine Cork Producer
 
Subordinated Note (10% Cash, 2.3% PIK, Due 07/21)
 
21,112,716

 
20,837,158

 
17,120,000

 
 
Limited Partnership Interest
 
 
 
2,158,548

 

 
 
 
 
21,112,716

 
22,995,706

 
17,120,000

 
 
 
 
 
 
 
 
 
 
 
Orchid Underwriters Agency, LLC (1%)*
 
Insurance Underwriter
 
Subordinated Note (10% Cash, 1.5% PIK, Due 03/23)
 
2,611,381

 
2,560,989

 
2,560,989

Subordinated Note (13.5% PIK, Due 03/24)
 
935,599

 
917,995

 
917,995

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

 
897,000

Class A Common Units (15,000 units)
 
 
 

 
1,142,000

 
 
3,546,980

 
3,817,142

 
5,517,984

 
 
 
 
 
 
 
 
 
 
 
Pike Corporation (0%)*
 
Provider of Energy Infrastructure Solutions
 
Subordinated Note (9.1% Cash, Due 09/24)
 
1,000,000

 
990,237

 
1,005,000

 
 
 
 
1,000,000

 
990,237

 
1,005,000

 
 
 
 
 
 
 
 
 
 
 
ProAmpac PG Borrower LLC (2%)*
 
Manufacturer of Flexible Packaging Products
 
Second Lien Term Note (9.6% Cash, Due 11/24)
 
15,000,000

 
14,784,661

 
15,079,000

 
 
 
 
15,000,000

 
14,784,661

 
15,079,000

 
 
 
 
 
 
 
 
 
 
 
REP WWEX Acquisition Parent, LLC (2%)*
 
Third-Party Logistics Provider
 
Second Lien Term Note (9.8% Cash, Due 02/25)
 
15,000,000

 
14,784,561

 
15,015,000

 
 
 
 
15,000,000

 
14,784,561

 
15,015,000

 
 
 
 
 
 
 
 
 
 
 
RMP Group, Inc. (2%)*
 
Provider of RCM Services to Hospitals and Physician Groups
 
Subordinated Note (10.5% Cash, 1% PIK, Due 09/22)
 
10,033,171

 
9,840,004

 
9,840,004

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

 
1,000,000

 
 
 
 
10,033,171

 
10,840,004

 
10,840,004

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

 
111,000

 
 
 
 
 
 
111,000

 
111,000

 
 
 
 
 
 
 
 
 
 
 

9



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
June 30, 2017
Portfolio Company
 
Industry
 
Type of Investment (1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value (3)
Rotolo Consultants, Inc. (1%)*
 
Landscape Services
 
Subordinated Note (11% Cash, 3% PIK, Due 08/21)
 
$
7,516,932

 
$
7,404,497

 
$
7,404,497

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

 
2,738,000

 
 
 
 
7,516,932

 
11,058,750

 
10,142,497

 
 
 
 
 
 
 
 
 
 
 
SCA Pharmaceuticals, LLC (1%)*
 
Provider of Pharmaceutical Products
 
Subordinated Note (10.2% Cash, Due 12/20)
 
6,500,000

 
6,383,583

 
6,383,583

 
 
 
 
6,500,000

 
6,383,583

 
6,383,583

 
 
 
 
 
 
 
 
 
 
 
Schweiger Dermatology Group, LLC (3%)*
 
Provider of Dermatology Services
 
Senior Notes (9.7% Cash, Due 06/22)
 
20,000,000

 
19,625,000

 
19,625,000

 
 
 
 
20,000,000

 
19,625,000

 
19,625,000

 
 
 
 
 
 
 
 
 
 
 
SCUF Gaming, Inc. (4%)*
 
Gaming Controller Manufacturer
 
Senior Notes (9.6% Cash, Due 12/21)
 
25,008,000

 
24,547,965

 
24,547,965

 
 
Revolver Loan (9.6% Cash, Due 06/18)
 
1,500,000

 
1,500,000

 
1,500,000

 
 
Common Stock (27,112 shares)
 
 
 
742,000

 
742,000

 
 
 
 
26,508,000

 
26,789,965

 
26,789,965