UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2024
OR
o
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: 814-00746
Main Street Capital Corporation
(Exact name of registrant as specified in its charter)
Maryland
41-2230745
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
1300 Post Oak Boulevard, 8th Floor
Houston, TX
77056
(Address of principal executive offices)
(Zip Code)
(713) 350-6000
(Registrant’s telephone number including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol
Name of Each Exchange on Which
Registered
Common Stock, par value $0.01 per share
MAIN
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes x No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes o No x
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 x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
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 such files). Yes x No o
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.
Large accelerated filer
x Accelerated filer
o Non-accelerated filer
o Smaller reporting company
o
Emerging growth company
o
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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. o
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the
registered public accounting firm that prepared or issued its audit report. x
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to previously issued financial statements. o
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-
based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No
x
The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant as of June 28, 2024, was
$4,194.4 million based upon the last sale price for the registrant’s common stock on that date.
The number of shares outstanding of the issuer’s common stock as of February 27, 2025 was 88,556,229.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrants’ definitive Proxy Statement for its 2025 Annual Meeting of Stockholders, to be filed with the
Securities and Exchange Commission, are incorporated by reference in this Annual Report on Form 10-K in response to Part III.
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TABLE OF CONTENTS
Page
PART I
Item 1.
Business
2
Item 1A.
Risk Factors
22
Item 1B.
Unresolved Staff Comments
45
Item 1C.
Cybersecurity
45
Item 2.
Properties
46
Item 3.
Legal Proceedings
46
Item 4.
Mine Safety Disclosures
46
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
47
Item 6.
[Reserved.]
50
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
51
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
66
Item 8.
Consolidated Financial Statements and Supplementary Data
68
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
210
Item 9A.
Controls and Procedures
210
Item 9B.
Other Information
211
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
212
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
212
Item 11.
Executive Compensation
212
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
213
Item 13.
Certain Relationships and Related Transactions, and Director Independence
213
Item 14.
Principal Accountant Fees and Services
213
PART IV
Item 15.
Exhibits and Consolidated Financial Statement Schedules
214
Signatures
218
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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements regarding the plans and objectives of
management for future operations and which relate to future events or our future performance or financial condition. Any
such forward-looking statements may involve known and unknown risks, uncertainties and other factors which may cause
our actual results, performance or achievements to be materially different from future results, performance or
achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve
assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words
“may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative of these
words or other variations on these words or comparable terminology. These forward-looking statements are based on
assumptions that may be incorrect, and we cannot assure you that the projections included in these forward-looking
statements will come to pass. Our actual results could differ materially from those expressed or implied by the forward-
looking statements as a result of various factors, including, without limitation, the factors discussed in Item 1A entitled
“Risk Factors” in this Annual Report on Form 10-K and elsewhere in this Annual Report on Form 10-K and in other
filings we may make with the Securities and Exchange Commission (“SEC”) from time to time. Other factors that could
cause actual results to differ materially include changes in the economy and future changes in laws or regulations and
conditions in our operating areas.
We have based the forward-looking statements included in this Annual Report on Form 10-K on information
available to us on the date of this Annual Report on Form 10-K, and we assume no obligation to update any such forward-
looking statements, unless we are required to do so by applicable law. However, you are advised to refer to any additional
disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including
subsequent annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
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1
PART I
Item 1. Business
ORGANIZATION
Main Street Capital Corporation (“MSCC” or, together with its consolidated subsidiaries, “Main Street” or the
“Company”) is a principal investment firm primarily focused on providing customized long-term debt and equity capital
solutions to lower middle market (“LMM”) companies (its “LMM investment strategy”) and debt capital to private
(“Private Loan”) companies owned by or in the process of being acquired by a private equity fund (its “Private Loan
investment strategy”). Main Street’s portfolio investments are typically made to support management buyouts,
recapitalizations, growth financings, refinancings and acquisitions of companies that operate in diverse industry sectors.
Main Street seeks to partner with entrepreneurs, business owners and management teams and generally provides “one-stop”
debt and equity financing alternatives within its LMM investment strategy. Main Street invests primarily in secured debt
investments, equity investments, warrants and other securities of LMM companies typically based in the United States.
Main Street also seeks to partner with private equity fund sponsors in its Private Loan investment strategy and primarily
invests in secured debt investments of Private Loan companies generally headquartered in the United States.
Main Street also maintains a legacy portfolio of investments in larger middle market (“Middle Market”)
companies (its “Middle Market investment portfolio”) and a limited portfolio of other portfolio (“Other Portfolio”)
investments. Main Street’s Middle Market investments are generally debt investments in companies owned by a private
equity fund that were originally issued through a syndication financing process. Main Street has generally stopped making
new Middle Market investments and expects the size of its Middle Market investment portfolio to continue to decline in
future periods as its existing Middle Market investments are repaid or sold. Main Street’s Other Portfolio investments
primarily consist of investments that are not consistent with the typical profiles for its LMM, Private Loan or Middle
Market portfolio investments, including investments in unaffiliated investment companies and private funds managed by
third parties. The “Investment Portfolio,” as used herein, refers to all of Main Street’s investments in LMM portfolio
companies, investments in Private Loan portfolio companies, investments in Middle Market portfolio companies, Other
Portfolio investments, short-term portfolio investments (as discussed in Note C — Fair Value Hierarchy for Investments —
Portfolio Composition — Investment Portfolio Composition) and the investment in the External Investment Manager (as
defined below).
MSCC was formed in March 2007 to operate as an internally managed business development company (“BDC”)
under the Investment Company Act of 1940, as amended (the “1940 Act”). Because MSCC is internally managed, all of
the executive officers and other employees are employed by MSCC. Therefore, MSCC does not pay any external
investment advisory fees, but instead directly incurs the operating costs associated with employing investment and portfolio
management professionals.
MSCC wholly owns several investment funds, including Main Street Mezzanine Fund, LP (“MSMF”) and Main
Street Capital III, LP (“MSC III” and, together with MSMF, the “Funds”), and each of their general partners. The Funds
are each licensed as a Small Business Investment Company (“SBIC”) by the United States Small Business Administration
(“SBA”).
MSC Adviser I, LLC (the “External Investment Manager”) was formed in November 2013 as a wholly-owned
subsidiary of Main Street to provide investment management and other services to parties other than Main Street (“External
Parties”) and receives fee income for such services. MSCC has been granted no-action relief by the Securities and
Exchange Commission (“SEC”) to allow the External Investment Manager to register as a registered investment adviser
under the Investment Advisers Act of 1940, as amended. Since the External Investment Manager conducts all of its
investment management activities for External Parties, it is accounted for as a portfolio investment of Main Street and is
not included as a consolidated subsidiary in Main Street’s consolidated financial statements.
MSCC has elected to be treated for U.S. federal income tax purposes as a regulated investment company (“RIC”)
under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). As a result, MSCC generally does
not pay corporate-level U.S. federal income taxes on any net ordinary taxable income or capital gains that it distributes to
its stockholders.
MSCC has certain direct and indirect wholly-owned subsidiaries that have elected to be taxable entities (the
“Taxable Subsidiaries”). The primary purpose of the Taxable Subsidiaries is to permit MSCC to hold equity investments in
portfolio companies which are “pass-through” entities for tax purposes. MSCC also has certain direct and indirect wholly-
owned subsidiaries formed for financing purposes (the “Structured Subsidiaries”).
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Unless otherwise noted or the context otherwise indicates, the terms “we,” “us,” “our,” the “Company” and “Main
Street” refer to MSCC and its consolidated subsidiaries, which include the Funds, the Taxable Subsidiaries and the
Structured Subsidiaries.
The following diagram depicts our organizational structure:
___________________________
*
Other Holding Companies includes the Taxable Subsidiaries, the Structured Subsidiaries and other consolidated
entities formed for operational purposes. Each of these companies is directly or indirectly wholly-owned by
MSCC.
**
The External Investment Manager is accounted for as a portfolio investment at fair value, as opposed to a
consolidated subsidiary, and is indirectly wholly-owned by MSCC.
CORPORATE INFORMATION
Our principal executive offices are located at 1300 Post Oak Boulevard, 8th Floor, Houston, Texas 77056. We
maintain a website on the Internet at www.mainstcapital.com. We make available free of charge on our website our annual
reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports
as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. Information
contained on our website is not incorporated by reference into this Annual Report on Form 10-K, and you should not
consider that information to be part of this Annual Report on Form 10-K. Our annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports and other public filings are also
available free of charge on the EDGAR Database on the SEC’s website at www.sec.gov.
OVERVIEW OF OUR BUSINESS
Our principal investment objective is to maximize our investment portfolio’s total return by generating current
income from our debt investments and current income and capital appreciation from our equity and equity-related
investments, including warrants, convertible securities and other rights to acquire equity securities in a portfolio company.
We seek to achieve our investment objective through our LMM and Private Loan investment strategies. Our LMM
investment strategy involves investments in companies that generally have annual revenues between $10 million and $150
million and annual earnings before interest, tax, depreciation and amortization expenses (“EBITDA”) between $3 million
and $20 million. Our LMM portfolio investments generally range in size from $5 million to $125 million. Our Private Loan
investment strategy involves investments in companies that generally have annual revenues between $25 million and $500
million and annual EBITDA between $7.5 million and $50 million. Our Private Loan investments generally range in size
from $10 million to $100 million.
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We seek to fill the financing gap for LMM businesses, which, historically, have had limited access to financing
from commercial banks and other traditional sources. The underserved nature of the LMM creates the opportunity for us to
meet the financing needs of LMM companies while also negotiating favorable transaction terms and equity participation.
Our ability to invest across a company’s capital structure, from secured loans to equity securities, allows us to offer
portfolio companies a comprehensive suite of financing options, or a “one-stop” financing solution. We believe that
providing customized, “one-stop” financing solutions is important and valuable to LMM portfolio companies. We
generally seek to partner directly with entrepreneurs, management teams and business owners in making our LMM
investments. Our LMM portfolio debt investments are generally secured by a first lien on the assets of the portfolio
company and typically have a term of between five and seven years from the original investment date.
Private Loan investments primarily consist of debt securities that have primarily been originated directly by us or,
to a lesser extent, through our strategic relationships with other investment funds on a collaborative basis through
investments that are often referred to in the debt markets as “club deals” because of the small lender group size. Our Private
Loan investments are typically made in a company owned by or in the process of being acquired by a private equity fund.
Our Private Loan portfolio debt investments are generally secured by a first priority lien on the assets of the portfolio
company and typically have a term of between three and seven years from the original investment date. We may also co-
invest with the private equity fund in the equity securities of our Private Loan portfolio companies.
We also maintain a legacy portfolio of investments in larger Middle Market companies. Our Middle Market
investments are generally debt investments in companies owned by private equity funds that were originally issued through
a syndication financing process. We have generally stopped making new Middle Market investments and expect the size of
our Middle Market investment portfolio to continue to decline in future periods as existing Middle Market investments are
repaid or sold. Our Middle Market debt investments generally range in size from $3 million to $25 million, are generally
secured by a first priority lien on the assets of the portfolio company and typically have an expected duration of between
three and seven years from the original investment date.
Our Other Portfolio investments primarily consist of investments that are not consistent with the typical profiles
for our LMM, Private Loan or Middle Market portfolio investments, including investments which may be managed by
third parties. In our Other Portfolio, we may incur indirect fees and expenses in connection with investments managed by
third parties, such as investments in other investment companies or private funds.
Subject to changes in our cash and overall liquidity, our Investment Portfolio (as defined below) may also include
short-term portfolio investments that are atypical of our LMM, Private Loan and Middle Market portfolio investments in
that they are intended to be a short-term deployment of capital. These assets are typically expected to be realized in one
year or less and are not expected to be a significant portion of our overall Investment Portfolio. The Investment Portfolio,
as used herein, refers to all of our investments in LMM portfolio companies, investments in Private Loan portfolio
companies, investments in Middle Market portfolio companies, Other Portfolio investments, short-term portfolio
investments and our investment in the External Investment Manager.
Our external asset management business is conducted through the External Investment Manager. The External
Investment Manager earns management fees based on the assets of the funds under management and may earn incentive
fees, or a carried interest, based on the performance of the funds managed.
Our portfolio investments are generally made through MSCC, the Taxable Subsidiaries, the Funds and the
Structured Subsidiaries. MSCC, the Taxable Subsidiaries, the Funds and the Structured Subsidiaries share the same
investment strategies and criteria, although they are subject to different regulatory regimes (see Regulation). An investor’s
return in MSCC will depend, in part, on the Taxable Subsidiaries’, the Funds’ and the Structured Subsidiaries’ investment
returns as they are wholly-owned subsidiaries of MSCC.
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The level of new portfolio investment activity will fluctuate from period to period based upon our view of the
current economic fundamentals, our ability to identify new investment opportunities that meet our investment criteria and
our ability to consummate the identified opportunities. The level of new investment activity, and associated interest and fee
income, will directly impact future investment income. In addition, the level of dividends paid by portfolio companies and
the portion of our portfolio debt investments on non-accrual status will directly impact future investment income. While we
intend to grow our portfolio and our investment income over the long term, our growth and our operating results may be
more limited during depressed economic periods. However, we intend to appropriately manage our cost structure and
liquidity position based on applicable economic conditions and our investment outlook. The level of realized gains or
losses and unrealized appreciation or depreciation on our investments will also fluctuate depending upon portfolio activity,
economic conditions and the performance of our individual portfolio companies. The changes in realized gains and losses
and unrealized appreciation or depreciation could have a material impact on our operating results.
Because we are internally managed, we do not pay any external investment advisory fees, but instead directly
incur the operating costs associated with employing investment and portfolio management professionals. We believe that
our internally managed structure provides us with a better alignment of interests between our management team and our
employees and our shareholders and a beneficial operating expense structure when compared to other publicly traded and
privately held investment firms which are externally managed, and our internally managed structure allows us the
opportunity to leverage our non-interest operating expenses as we grow our Investment Portfolio and our External
Investment Manager’s asset management business (as described below). For each of the years ended December 31, 2024
and 2023, the ratio of our total operating expenses, excluding interest expense, as a percentage of our quarterly average
total assets was 1.3%. The ratio of our total operating expenses, including interest expense, as a percentage of our quarterly
average total assets was 3.8% and 3.7%, respectively, for the years ended December 31, 2024 and 2023. Our ratio of
expenses as a percentage of our average net asset value is described in greater detail in Note F — Financial Highlights to
the consolidated financial statements included in Item 8. Consolidated Financial Statements and Supplementary Data of
this Annual Report on Form 10-K.
The External Investment Manager serves as the investment adviser and administrator to MSC Income Fund, Inc.
(“MSC Income”) pursuant to an Investment Advisory and Administrative Services Agreement entered into in October 2020
between the External Investment Manager and MSC Income (as amended and restated on January 29, 2025, the “Advisory
Agreement”). Under the Advisory Agreement, prior to January 29, 2025, the External Investment Manager earned a 1.75%
annual base management fee on MSC Income’s average total assets, a subordinated incentive fee on income equal to 20%
of pre-incentive fee net investment income above a specified investment return hurdle rate and a 20% incentive fee on
cumulative net realized capital gains in exchange for providing advisory services to MSC Income. On and after January 29,
2025, under the Advisory Agreement, the External Investment Manager earns a 1.5% annual base management fee on
MSC Income’s average total assets (including cash and cash equivalents), payable quarterly in arrears (with additional
future contractual reductions based upon changes to MSC Income’s investment portfolio composition), a subordinated
incentive fee on income equal to 17.5% of pre-incentive fee net investment income above a specified investment return
hurdle rate, subject to a 50% / 50% catch-up feature, and a 17.5% incentive fee on cumulative net realized capital gains
from January 29, 2025.
Additionally, the External Investment Manager has entered into investment management agreements with MS
Private Loan Fund I, LP (the “Private Loan Fund”) and MS Private Loan Fund II, LP (the “Private Loan Fund II”), each a
private investment fund with a strategy to co-invest with Main Street in Private Loan portfolio investments, pursuant to
which the External Investment Manager provides investment advisory and management services to each fund in exchange
for an asset-based management fee and certain incentive fees. The External Investment Manager may also advise other
clients, including funds and separately managed accounts, pursuant to advisory and services agreements with such clients
in exchange for asset-based and incentive fees.
The External Investment Manager earns management fees based on the assets of the funds and accounts under
management and may earn incentive fees, or a carried interest, based on the performance of the funds and accounts
managed. For the years ended December 31, 2024, 2023 and 2022, the External Investment Manager earned $23.9 million,
$22.4 million and $21.8 million in base management fees, respectively, $13.7 million, $13.4 million and $2.5 million in
incentive fees, respectively, and $0.6 million of administrative service fee income for each of the years ended
December 31, 2024, 2023 and 2022.
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We have entered into an agreement with the External Investment Manager to share employees in connection with
its asset management business generally, and specifically for its relationship with MSC Income and its other clients.
Through this agreement, we share employees with the External Investment Manager, including their related infrastructure,
business relationships, management expertise and capital raising capabilities, and we allocate the related expenses to the
External Investment Manager pursuant to the sharing agreement. Our total expenses for the years ended December 31,
2024, 2023 and 2022 are net of expenses allocated to the External Investment Manager of $23.1 million, $22.1 million and
$13.0 million, respectively.
The total contribution of the External Investment Manager to our net investment income consists of the
combination of the expenses allocated to the External Investment Manager and the dividend income earned from the
External Investment Manager. For the years ended December 31, 2024, 2023, and 2022, dividends accrued by us from the
External Investment Manager were $11.3 million, $11.3 million and $9.3 million, respectively. For the years ended
December 31, 2024, 2023 and 2022, the total contribution of the External Investment Manager to our net investment
income was $34.3 million, $33.4 million and $22.3 million, respectively.
We have received an exemptive order from the SEC permitting co-investments among us, MSC Income and other
funds and clients advised by the External Investment Manager in certain negotiated transactions where co-investing would
otherwise be prohibited under the 1940 Act. We have made co-investments with, and in the future intend to continue to
make co-investments with MSC Income, the Private Loan Fund, the Private Loan Fund II and other funds and clients
advised by the External Investment Manager, in accordance with the conditions of the order. The order requires, among
other things, that we and the External Investment Manager consider whether each such investment opportunity is
appropriate for us and the External Investment Manager’s advised clients, as applicable, and if it is appropriate, to propose
an allocation of the investment opportunity between such parties. Because the External Investment Manager may receive
performance-based fee compensation from funds and clients advised by the External Investment Manager, this may provide
the Company and the External Investment Manager an incentive to allocate opportunities to other participating funds and
clients instead of us. However, both we and the External Investment Manager have policies and procedures in place to
manage this conflict, including oversight by the independent members of our Board of Directors. In addition to the co-
investment program described above, we also co-invest in syndicated deals and other transactions where price is the only
negotiated point by us and our affiliates.
BUSINESS STRATEGIES
Our principal investment objective is to maximize our portfolio’s total return by generating current income from
our debt investments and current income and capital appreciation from our equity and equity-related investments, including
warrants, convertible securities and other rights to acquire equity securities in a portfolio company. We have adopted the
following business strategies to achieve our investment objective:
•
Deliver Customized Financing Solutions in the Lower Middle Market. We offer LMM portfolio companies
customized long-term debt and equity financing solutions that are tailored to the facts and circumstances of
each situation. We believe our ability to provide a broad range of customized financing solutions to LMM
companies sets us apart from other capital providers that focus on providing a limited number of financing
alternatives. Our ability to invest across a company’s capital structure, from senior secured loans to
subordinated debt to equity securities, allows us to offer LMM portfolio companies a comprehensive suite of
financing options, or a “one-stop” financing solution.
•
Focus on Established Companies. We generally invest in companies with established market positions,
experienced management teams and proven revenue streams. We believe that those companies generally
possess better risk-adjusted return profiles than newer companies that are building their management teams or
are in the early stages of building a revenue base. We also believe that established companies in our targeted
size range also generally provide opportunities for capital appreciation.
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•
Leverage the Skills and Experience of our Investment Team. Our investment team has significant experience
in lending to and investing in LMM, Private Loan and Middle Market companies. The members of our
investment team have broad investment backgrounds, with significant experience and long-term tenure with
Main Street and prior experience at private investment funds, corporate entities with active acquisition growth
strategies and activities, investment banks and other financial services companies. The expertise of our
investment team in analyzing, valuing, structuring, negotiating and closing transactions should provide us
with competitive advantages by allowing us to consider customized financing solutions and non-traditional or
complex structures for our portfolio companies. Also, the reputation of our investment team has and should
continue to enable us to generate additional revenue in the form of management and incentive fees in
connection with us providing advisory services to other investment funds.
•
Invest Across Multiple Companies, Industries, Regions and End Markets. We seek to maintain a portfolio of
investments that is appropriately balanced among various companies, industries, geographic regions and end
markets. This portfolio balance is intended to mitigate the potential effects of negative economic events for
particular companies, regions, industries and end markets.
•
Capitalize on Strong Transaction Sourcing Network. Our investment team seeks to leverage its extensive
network of referral sources for portfolio company investments. We have developed a reputation in our
marketplace as a responsive, efficient and reliable source of financing, which has created a growing stream of
proprietary deal flow for us.
•
Grow our Asset Management Business. Our asset management business provides us with a recurring source
of income, additional income diversification from sources of income directly tied to invested capital and the
opportunity for greater stockholder returns through the utilization of our existing investment expertise, strong
historical track record and favorable reputation. We seek to grow our asset management business within our
internally managed BDC structure in order to increase the value of this unique benefit to our stakeholders. We
expect such growth to come organically through the expansion of the investment capital that we manage for
third parties and the potential extension of our asset management business to new investment strategies, and
potentially through mergers and acquisition activities.
•
Benefit from Lower, Fixed, Long-Term Cost of Capital. The SBIC licenses held by the Funds have allowed
them to issue SBA-guaranteed debentures. SBA-guaranteed debentures carry long-term fixed interest rates
that are generally lower than interest rates on comparable bank loans and other debt. Because lower-cost SBA
leverage is, and will continue to be, a significant part of our capital base through the Funds, our relative cost
of debt capital should be lower than many of our competitors. In addition, the SBIC leverage that we receive
through the Funds represents a stable, long-term component of our capital structure with proper matching of
duration and cost compared to our LMM portfolio investments. We also maintain investment grade ratings
from both Standard & Poor’s Ratings Services and Fitch Ratings, which provide us the opportunity and
flexibility to obtain additional, attractive long-term financing options to supplement our capital structure,
including the unsecured notes with fixed interest rates we issue.
INVESTMENT CRITERIA
Our investment team has identified the following investment criteria that it believes are important in evaluating
prospective portfolio companies. Our investment team uses these criteria in evaluating investment opportunities. However,
not all of these criteria have been, or will be, met in connection with each of our investments:
•
Proven Management Team with Meaningful Equity Stake. We look for operationally-oriented management
with direct industry experience and a successful track record. In addition, we expect the management team of
each LMM portfolio company to have meaningful equity ownership in the portfolio company to better align
our respective economic interests. We believe management teams with these attributes are more likely to
manage the companies in a manner that both protects our debt investment and enhances the value of our
equity investment.
•
Established Companies with Positive Cash Flow. We seek to invest in established companies with sound
historical financial performance. We primarily pursue investments in LMM companies that have historically
generated EBITDA of $3 million to $20 million and commensurate levels of free cash flow. We also pursue
investments in Private Loan companies that have historically generated annual EBITDA of $7.5 million to
$50 million. We generally do not invest in start-up companies or companies with speculative business plans.
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•
Defensible Competitive Advantages/Favorable Industry Position. We primarily focus on companies having
competitive advantages in their respective markets and/or operating in industries with barriers to entry, which
may help to protect their market position and profitability.
•
Exit Alternatives. We exit our debt investments primarily through the repayment of our investment from
internally generated cash flow of the portfolio company and/or a refinancing. In addition, we seek to invest in
companies whose business models and expected future cash flows may provide alternate methods of repaying
our investment, such as through a strategic acquisition by other industry participants or a recapitalization.
INVESTMENT PORTFOLIO
Our LMM portfolio investments primarily consist of secured debt, direct equity investments and equity warrants
in privately held, LMM companies based in the United States. Our Private Loan portfolio investments primarily consist of
investments in debt securities that are primarily originated directly by us, or to a lesser extent, through our strategic
relationships with other investment funds on a collaborative basis through investments that are often referred to in the debt
markets as “club deals” because of the small lender group size. In both cases, our Private Loan investments are typically
made in a company owned by or in the process of being acquired by a private equity fund. Our Middle Market portfolio
investments are generally debt investments in companies owned by private equity funds that were originally issued through
a syndication financing process. We have generally stopped making new Middle Market investments and expect the size of
our Middle Market investment portfolio to continue to decline in future periods as existing Middle Market investments are
repaid or sold. Our Other Portfolio investments primarily consist of investments that are not consistent with the typical
profiles for our LMM, Private Loan and Middle Market portfolio investments, including investments which may be
managed by third parties. In our Other Portfolio, we may incur indirect fees and expenses in connection with investments
managed by third parties, such as investments in other investment companies or private funds.
Debt Investments
Historically, we have made LMM debt investments principally in the form of single tranche debt. Single tranche
debt financing involves issuing one debt security that blends the risk and return profiles of both first lien secured and
subordinated debt. We believe that single tranche debt is more appropriate for many LMM companies given their size in
order to reduce structural complexity and potential conflicts among creditors.
Our LMM debt investments generally have a term of five to seven years from the original investment date, with
limited required amortization prior to maturity, and provide for monthly or quarterly payment of interest at interest rates
generally between 10% and 14% per annum, payable currently in cash on either a fixed or floating rate basis. The LMM
debt investments with floating interest rates will generally bear interest at the Secured Overnight Financing Rate (“SOFR”)
or the Prime rate typically subject to a contractual minimum interest rate (an “interest rate floor”), plus a margin. In
addition, certain LMM debt investments may have a form of interest that is not paid currently but is accrued and added to
the loan balance and paid at maturity. We refer to this form of interest as payment-in-kind, or PIK, interest. We typically
structure our LMM debt investments with the maximum seniority and collateral that we can reasonably obtain while
seeking to achieve our total return target. In most cases, our LMM debt investment will be collateralized by a first priority
lien on substantially all the assets of the portfolio company. In addition to seeking a senior lien position in the capital
structure of our LMM portfolio companies, we seek to limit the downside potential of our LMM debt investments by
negotiating covenants that are designed to protect our LMM debt investments while affording our portfolio companies as
much flexibility in managing their businesses as is reasonable. Such restrictions may include affirmative and negative
covenants, default penalties, lien protection, change of control or change of management provisions, key-man life
insurance, guarantees, equity pledges, personal guaranties, where appropriate, and put rights. In addition, we typically seek
board representation or observation rights in all of our LMM portfolio companies.
While we will continue to focus our LMM debt investments primarily on single tranche debt investments, we may
structure some of our debt investments as mezzanine loans. These mezzanine loans would be primarily junior secured or
unsecured, subordinated loans that would provide for relatively high interest rates, payable currently in cash, and would
provide us with significant interest income. These mezzanine loans would afford us the additional opportunity for income
and gains through PIK interest and equity warrants and other similar equity instruments issued in conjunction with these
mezzanine loans. These loans typically would have interest-only payments in the early years, with amortization of principal
deferred to the later years of the mezzanine loan term. Typically, these mezzanine loans would have maturities of three to
five years. We would generally target interest rates of 12% to 14%, payable currently in cash, for our mezzanine loan
investments with higher targeted total returns from equity warrants or PIK interest.
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The debt investments in our Private Loan portfolio have rights and protections that are similar to those in our
LMM debt investments, which may include affirmative and negative covenants, default penalties, lien protection, change
of control provisions, guarantees and equity pledges. Our Private Loan portfolio debt investments are generally secured by
a first priority lien and typically have a term of between three and seven years from the original investment date. Our
Private Loan debt investments generally have floating interest rates at SOFR or Prime rate typically subject to an interest
rate floor, plus a margin.
Our Middle Market portfolio debt investments are generally secured by a first priority lien on the assets of the
portfolio company and typically have a term of between three and seven years from the original investment date. The debt
investments in our Middle Market portfolio usually have rights and protections that are similar to those in our LMM and
Private Loan debt investments. The Middle Market debt investments generally have floating interest rates at SOFR or
Prime rate typically subject to an interest rate floor, plus a margin.
Direct Equity Investments
We also seek to make direct equity investments to align our interests with key management and stockholders of
our LMM portfolio companies, and to allow for participation in the appreciation in the equity values of our LMM portfolio
companies. We usually make our direct equity investments in connection with debt investments in our LMM portfolio
companies. In addition, we may have both equity warrants and direct equity positions in some of our LMM portfolio
companies. We seek to maintain fully diluted equity positions in our LMM portfolio companies of 5% to 50%, and may
have controlling equity interests in some instances. We have a value orientation toward our direct equity investments and
have traditionally been able to purchase our equity investments at reasonable valuations. We will also have, from time to
time, the opportunity to co-invest with the private equity funds in the equity securities of our Private Loan portfolio
companies. The equity co-investment aligns our interests with those of the private equity fund and provides us with the
opportunity to benefit from appreciation in the equity values of our Private Loan portfolio companies.
Warrants
In connection with our LMM debt investments, we occasionally receive equity warrants to establish or increase
our equity interest in the portfolio company. Warrants that we receive in connection with a debt investment typically
require only a nominal cost to exercise, and thus, as a portfolio company appreciates in value, we may achieve additional
investment return from this equity interest. We typically structure the warrants to provide provisions protecting our rights
as a minority-interest holder, as well as secured or unsecured put rights, or rights to sell such securities back to the portfolio
company, upon the occurrence of specified events. In certain cases, we also may obtain registration rights in connection
with these equity interests, which may include demand and “piggyback” registration rights.
INVESTMENT PROCESS
Our management team’s investment committee is responsible for all aspects of our investment processes. The
current members of our investment committee are Dwayne L. Hyzak, our Chief Executive Officer, David Magdol, our
President and Chief Investment Officer, and Vincent D. Foster, the Chairman of our Board of Directors.
The investment processes for portfolio investments are outlined below. Our investment strategy involves a “team”
approach, whereby potential transactions are screened by several members of our investment team before being presented
to the investment committee. Our investment committee meets on an as-needed basis depending on transaction volume. We
generally categorize our investment process into seven distinct stages:
Deal Generation/Origination
Deal generation and origination is maximized through long-standing and extensive relationships with industry
contacts, brokers, commercial and investment bankers, entrepreneurs, service providers such as lawyers, financial advisors
and accountants, and current and former portfolio companies and investors. Our investment team has developed a
reputation as a knowledgeable, reliable and active source of capital and assistance in these markets.
Screening
During the screening process, if a transaction initially meets our investment criteria, we will perform preliminary
due diligence, taking into consideration some or all of the following information:
•
a comprehensive financial model based on quantitative analysis of historical financial performance,
projections and pro forma adjustments to determine the estimated internal rate of return;
•
a brief industry and market analysis;
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•
direct industry expertise imported from other portfolio companies or investors;
•
preliminary qualitative analysis of the management team’s competencies and backgrounds;
•
potential investment structures and pricing terms; and
•
regulatory compliance.
Upon successful screening of a proposed transaction, the investment team makes a recommendation to our
investment committee. If our investment committee concurs with moving forward on the proposed transaction, we typically
issue a non-binding term sheet or letter of intent to the company.
Term Sheet
For proposed transactions, the non-binding term sheet or letter of intent will include the key economic terms based
upon our analysis performed during the screening process, as well as a proposed timeline and our qualitative expectation
for the transaction. While the term sheet or letter of intent for investments is non-binding, we typically receive an expense
deposit in order to move the transaction to the due diligence phase. Upon execution of a term sheet or letter of intent, we
begin our formal due diligence process.
Due Diligence
Due diligence on a proposed LMM investment is performed by a minimum of three of our investment
professionals, whom we refer to collectively as the investment team, and certain external resources, who together conduct
due diligence to understand the relationships among the prospective portfolio company’s business plan, operations and
financial performance. Our LMM due diligence review includes some or all of the following:
•
site visits with management and key personnel;
•
detailed review of historical and projected financial statements;
•
operational reviews and analysis;
•
interviews with customers and suppliers;
•
detailed evaluation of company management, including background checks;
•
review of material contracts;
•
in-depth industry, market and strategy analysis;
•
regulatory compliance analysis; and
•
review by legal, environmental or other consultants, if applicable.
Due diligence on a proposed Private Loan investment is generally performed on materials and information
obtained from certain external resources and assessed internally by a minimum of three of our investment professionals,
who work to understand the relationships among the prospective portfolio company’s business plan, operations and
financial performance using the accumulated due diligence information. Our typical Private Loan due diligence review
includes some or all of the following:
•
detailed review of historical and projected financial statements
•
site visits or other discussions with management and key personnel;
•
in-depth industry, market, operational and strategy analysis;
•
regulatory compliance analysis; and
•
detailed review of the company’s management team and their capabilities.
During the due diligence process, significant attention is given to sensitivity analyses and how the company might
be expected to perform given downside, base-case and upside scenarios. In certain cases, we may decide not to make an
investment based on the results of the diligence process.
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Document and Close
Upon completion of a satisfactory due diligence review of a proposed LMM portfolio investment, the investment
team presents the findings and a recommendation to our investment committee. The presentation contains information
which can include, but is not limited to, the following:
•
company history and overview;
•
transaction overview, history and rationale, including an analysis of transaction strengths and risks;
•
analysis of key customers and suppliers and key contracts;
•
a working capital analysis;
•
an analysis of the company’s business strategy;
•
a management and key equity investor background check and assessment;
•
third-party accounting, legal, environmental or other due diligence findings;
•
investment structure and expected returns;
•
anticipated sources of repayment and potential exit strategies;
•
pro forma capitalization and ownership;
•
an analysis of historical financial results and key financial ratios;
•
sensitivities to management’s financial projections;
•
regulatory compliance analysis findings; and
•
detailed reconciliations of historical to pro forma results.
Upon completion of a satisfactory due diligence review of a proposed Private Loan portfolio investment, the
investment team presents the findings and a recommendation to our investment committee. The presentation contains
information which can include, but is not limited to, the following:
•
company history and overview;
•
transaction overview, history and rationale, including an analysis of transaction strengths and risks;
•
overview and history of the private equity fund sponsor as the company’s equity owner;
•
analysis of key customers and suppliers;
•
an analysis of the company’s business strategy;
•
investment structure and expected returns;
•
anticipated sources of repayment and potential exit strategies;
•
pro forma capitalization and ownership;
•
regulatory compliance analysis findings; and
•
an analysis of historical financial results and key financial ratios.
If any adjustments to the transaction terms or structures are proposed by the investment committee, such changes
are made and applicable analyses are updated prior to approval of the transaction. Approval for the transaction must be
made by the affirmative vote from a majority of the members of the investment committee, with the committee member
managing the transaction, if any, abstaining from the vote. Upon receipt of transaction approval, the investment team will
re-confirm regulatory compliance, process and finalize all required legal documents, and fund the investment.
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Post-Investment
We continuously monitor the status and progress of the portfolio companies. We generally offer managerial
assistance to our portfolio companies, giving them access to our investment experience, direct industry expertise and
contacts. The same investment team that was involved in the investment process will continue its involvement in the
portfolio company post-investment. This provides for continuity of knowledge and allows the investment team to maintain
a strong business relationship with key management of our portfolio companies for post-investment assistance and
monitoring purposes.
As part of the monitoring process of LMM portfolio investments, the investment team will analyze monthly and
quarterly financial statements versus the previous periods and year, review financial projections, meet and discuss issues or
opportunities with management, attend board meetings and review all compliance certificates and covenants. While we
maintain limited involvement in the ordinary course operations of our LMM portfolio companies, we maintain a higher
level of involvement in non-ordinary course financing or strategic activities and any non-performing scenarios.
As part of the monitoring process of our Private Loan and Middle Market portfolio investments, the investment
team will analyze monthly and quarterly financial statements versus the previous periods and year, review financial
projections and review all compliance certificates and covenants. Depending upon the nature of our Private Loan and
Middle Market portfolio investments, our investment team may also attend board meetings, and meet and discuss issues or
opportunities with the portfolio company’s management team or private equity owners, however, due to the nature of our
“lender only” relationship with these Private Loan and Middle Market companies in comparison to our LMM portfolio
companies, is is not practical to have as much direct management interface.
We utilize an internally developed investment rating system to rate the performance of each LMM, Private Loan
and Middle Market portfolio company and to monitor our expected level of returns on each of our LMM, Private Loan and
Middle Market investments in relation to our expectations for the portfolio company. The investment rating system takes
into consideration various factors, including, but not limited to, each investment’s expected level of returns, the
collectability of our debt investments and the ability to receive a return of the invested capital in our equity investments,
comparisons to competitors and other industry participants, the portfolio company’s future outlook and other factors that
are deemed to be significant to the portfolio company.
Exit Strategies/Refinancing
While we generally exit most investments through the refinancing or repayment of our debt and redemption or
sale of our equity positions, we typically assist our LMM portfolio companies in developing and planning exit
opportunities, including any sale or merger of our portfolio companies. We may also assist in the structure, timing,
execution and transition of the exit strategy. The refinancing or repayment of Private Loan investments and Middle Market
debt investments typically do not require our assistance due to the additional resources available to these larger Private
Loan and Middle Market companies.
DETERMINATION OF NET ASSET VALUE AND INVESTMENT PORTFOLIO VALUATION PROCESS
We determine the net asset value (“NAV”) per share of our common stock on a quarterly basis. The NAV per
share is equal to our total assets minus total liabilities divided by the total number of shares of common stock outstanding.
We are required to report our investments at fair value. As a result, the most significant determination inherent in
the preparation of our consolidated financial statements is the valuation of our Investment Portfolio and the related amounts
of unrealized appreciation and depreciation. We follow the provisions of the Financial Accounting Standards Board
Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820
defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality
of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. ASC 820 requires
us to assume that the portfolio investment is to be sold in the principal market to independent market participants, which
may be a hypothetical market. Market participants are defined as buyers and sellers in the principal market that are
independent, knowledgeable and willing and able to transact.
We determine in good faith the fair value of our Investment Portfolio pursuant to a valuation policy in accordance
with ASC 820 and a valuation process approved by our Board of Directors and in accordance with the 1940 Act. Our
valuation policies and processes are intended to provide a consistent basis for determining the fair value of our Investment
Portfolio. See Note B.1. — Summary of Significant Accounting Policies — Valuation of the Investment Portfolio included
in Item 8. Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K for a detailed
discussion of our Investment Portfolio valuation process and procedures.
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Due to the inherent uncertainty in the valuation process, our determination of fair value for our Investment
Portfolio may differ materially from the values that would have been determined had a ready market for the securities
existed. In addition, changes in the market environment, portfolio company performance and other events that may occur
over the lives of the investments may cause the gains or losses ultimately realized on these investments to be materially
different than the valuations currently assigned. We determine the fair value of each individual investment and record
changes in fair value as unrealized appreciation or depreciation.
The 1940 Act requires valuation of a portfolio security at “market value” if market quotations for the security are
“readily available.” Portfolio securities for which market quotations are not readily available must be valued at fair value as
determined in good faith by the board of directors. Rule 2a-5 under the 1940 Act permits a BDC’s board of directors to
designate its executive officers or investment adviser as a valuation designee to determine the fair value for its investment
portfolio, subject to the active oversight of the board.
Our Board of Directors has approved policies and procedures pursuant to Rule 2a-5 (the “Valuation Procedures”)
and designated a group of our executive officers to serve as the Board’s valuation designee thereunder (the “Valuation
Committee”). Pursuant to the Valuation Procedures, we undertake a multi-step process each quarter in connection with
determining the fair value of our investments.
The following outlines our valuation process as established under the Valuation Procedures:
•
Our quarterly process begins with an initial valuation of each portfolio investment performed by the valuation
team consisting of several professionals who apply the appropriate valuation methodology depending on the
type of investment.
•
Each valuation model is then reviewed by the investment team responsible for monitoring the portfolio
investment for accuracy, with any recommended changes reviewed by the valuation team.
•
Updated valuation conclusions are then reviewed by and discussed with the Valuation Committee at quarterly
valuation meetings. Valuation meetings are generally attended by the Valuation Committee, the valuation
team, members of the investment team responsible for each investment and members of the compliance team.
Valuation models and valuation conclusions are adjusted as necessary following such meetings.
•
A nationally recognized independent financial advisory services firm analyzes and provides observations,
recommendations and an assurance certification regarding the determinations of the fair value for the majority
of our portfolio companies on a rotational basis.
•
After incorporating commentary by the Valuation Committee and review of recommendations provided by
the independent financial advisory services firm, valuation results are finalized and approved by the Valuation
Committee.
•
The Board of Directors oversees the process through its Audit Committee in accordance with Rule 2a-5
pursuant to the Valuation Procedures.
Determination of fair value involves subjective judgments and estimates. The notes to our consolidated financial
statements refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations,
on our financial results and financial condition.
COMPETITION
We compete for investments with a number of investment funds (including private equity funds, mezzanine funds,
BDCs and SBICs), as well as traditional financial services companies such as commercial banks and other sources of
financing. Many of the entities that compete with us are larger and have more resources available to them. We believe we
are able to be competitive with these entities primarily on the basis of our focus on the underserved companies described in
our LMM investment strategy and the less competitive nature of the market for companies described in our Private Loan
investment strategy, the experience and contacts of our management team, our responsive and efficient investment analysis
and decision-making processes, our comprehensive suite of customized financing solutions and the investment terms we
offer.
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We believe that some of our competitors make senior secured loans, junior secured loans and subordinated debt
investments with interest rates and returns that are comparable to or lower than the rates and returns that we target.
Therefore, we do not seek to compete primarily on the interest rates and returns that we offer to potential portfolio
companies. For additional information concerning the competitive risks we face, see Item 1A. Risk Factors — Risks Related
to Our Business and Structure — We face increasing competition for investment opportunities.
HUMAN CAPITAL
Our employees are vital to our success as a principal investment firm. As a human-capital intensive business, the
long-term success of our company depends on our people. We strive to attract, develop and retain our employees by
offering unique employment opportunities, superior advancement and promotion opportunities, attractive compensation
and benefit structures and a close-knit culture. The departure of our key investment and other personnel could cause our
operating results to suffer.
Our LMM business depends heavily on the business owners and management teams of our portfolio companies
and their respective employees, contractors and service providers. In our investment process for LMM portfolio
investments, the analysis of these individuals is a critical part of our overall investment underwriting process and as a result
we carefully review the qualifications and experience of the portfolio company’s business owners and management team
and their employment practices. We strive to partner with business owners and management teams whose business
practices reflect our core values.
We strive to recruit talented and driven individuals who share our values. We have competitive programs
dedicated to attracting and retaining new talent and enhancing the skills of our employees. Our recruiting efforts utilize
strong relationships with a variety of sources from which we recruit. Among other opportunities, we offer selected students
investment analyst internships, which are expected to lead to permanent roles for high performing and high potential
interns. Through our internship program, individuals who want to become investment analysts have the opportunity to see
the full investment process from origination to closing, as well as post-closing portfolio management activities. We
routinely recruit from within, promoting current employees who have shown the technical ability, attitude, interest and the
initiative to take on greater responsibility.
We have designed a compensation structure, including an array of benefit plans and programs, that we believe is
attractive to our current and prospective employees. We also offer formal and informal training and mentorship programs
that provide employees with access to senior level executives. Through our annual goal setting and performance review
processes, our employees are annually evaluated by supervisors and our senior management team to ensure employees
continue to develop and advance as expected. We are committed to having a diverse workforce, and an inclusive work
environment is a natural extension of our culture. We also maintain a Women’s Initiative that provides employees with
opportunities to network internally at Main Street and externally with other women in the financial services industry. Our
employees have access to several programs designed to enable our employees to balance work, family and family-related
situations including flexible working arrangements and parental leave for birth and adoption placement. We are committed
to creating and maintaining an atmosphere where all employees feel welcomed, valued, respected and heard so that they
feel motivated and encouraged to contribute fully to their careers, our company and our communities.
We seek to maintain a close-knit culture, which we believe is an important factor in employee retention, which is
reinforced by our Community Building Committee. Our Community Building Committee, which is composed of a
substantial cross section of employees across our organization, develops programs and initiatives that promote an open and
inclusive atmosphere and encourage employee outreach with our community, in each case based upon feedback received
from our employees. Initiatives generated by our Community Building Committee include employee well-being and
engagement activities along with volunteer and donation opportunities with local charitable organizations. We encourage
you to visit our website for more information about charitable organizations receiving our ongoing support. Nothing on our
website, however, shall be deemed incorporated by reference into this Annual Report on Form 10-K.
We monitor and evaluate various turnover and attrition metrics throughout our management team. Our annualized
voluntary turnover is relatively low, a record which we attribute to our strong corporate culture, commitment to career
development and attractive compensation and benefit programs. For additional information concerning the competitive
risks we face, see Item 1A. Risk Factors — Risks Related to Our Business and Structure — Our success depends on
attracting and retaining qualified personnel in a competitive environment.
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As of December 31, 2024, we had 104 employees, 58 of whom we characterize as investment and portfolio
management professionals, and the others include operations professionals and administrative staff. None of our employees
are represented by a collective bargaining agreement. As necessary, we will hire additional investment professionals and
administrative personnel. All but three of our employees are located in our Houston, Texas office.
REGULATION
Regulation as a Business Development Company
We have elected to be regulated as a BDC under the 1940 Act. The 1940 Act contains prohibitions and restrictions
relating to transactions between BDCs and their affiliates, principal underwriters and affiliates of those affiliates or
underwriters. The 1940 Act requires that a majority of the members of the board of directors of a BDC be persons other
than “interested persons,” as that term is defined in the 1940 Act. In addition, the 1940 Act provides that we may not
change the nature of our business so as to cease to be, or to withdraw our election as, a BDC unless approved by a majority
of our outstanding voting securities.
The 1940 Act defines “a majority of the outstanding voting securities” as the lesser of (i) 67% or more of the
voting securities present at a meeting if the holders of more than 50% of our outstanding voting securities are present or
represented by proxy or (ii) more than 50% of our outstanding voting securities.
Qualifying Assets
Under the 1940 Act, a BDC may not acquire any asset other than assets of the type listed in Section 55(a) of the
1940 Act, which are referred to as qualifying assets, unless, at the time the acquisition is made, qualifying assets represent
at least 70% of the company’s total assets. The principal categories of qualifying assets relevant to our business are any of
the following:
(1)
Securities purchased in transactions not involving any public offering from the issuer of such securities,
which issuer (subject to certain limited exceptions) is an eligible portfolio company (as defined below),
or from any person who is, or has been during the preceding 13 months, an affiliated person of an eligible
portfolio company, or from any other person, subject to such rules as may be prescribed by the SEC.
(2)
Securities of any eligible portfolio company that we control.
(3)
Securities purchased in a private transaction from a U.S. issuer that is not an investment company or
from an affiliated person of the issuer, or in transactions incident thereto, if the issuer is in bankruptcy
and subject to reorganization or if the issuer, immediately prior to the purchase of its securities was
unable to meet its obligations as they came due without material assistance other than conventional
lending or financing arrangements.
(4)
Securities of an eligible portfolio company purchased from any person in a private transaction if there is
no ready market for such securities and we already own 60% of the outstanding equity of the eligible
portfolio company.
(5)
Securities received in exchange for or distributed on or with respect to securities described in (1) through
(4) above, or pursuant to the exercise of warrants or rights relating to such securities.
(6)
Cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or
less from the time of investment.
In addition, a BDC must have been organized and have its principal place of business in the United States and
must be operated for the purpose of making investments in the types of securities described in (1), (2) or (3) above.
An eligible portfolio company is defined in the 1940 Act as any issuer which:
(a)
is organized under the laws of, and has its principal place of business in, the United States;
(b)
is not an investment company (other than a small business investment company wholly-owned by the
BDC) or a company that would be an investment company but for certain exclusions under the 1940 Act;
and
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(c)
satisfies any of the following:
(i)
does not have any class of securities that is traded on a national securities exchange or has a
class of securities listed on a national securities exchange but has an aggregate market value of
outstanding voting and non-voting common equity of less than $250 million;
(ii)
is controlled by a BDC or a group of companies including a BDC and the BDC has an affiliated
person who is a director of the eligible portfolio company; or
(iii)
is a small and solvent company having total assets of not more than $4 million and capital and
surplus of not less than $2 million.
Managerial Assistance to Portfolio Companies
As noted above, a BDC must be operated for the purpose of making investments in the type of securities described
in (1), (2) or (3) above under the heading entitled “— Qualifying Assets.” In addition, BDCs must generally offer to make
available to such issuer of the securities (other than small and solvent companies described above) significant managerial
assistance. Making available managerial assistance means, among other things, any arrangement whereby the BDC,
through its directors, officers or employees, offers to provide, and, if accepted, does so provide, significant guidance and
counsel concerning the management, operations or business objectives and policies of a portfolio company. However, if a
BDC purchases securities in conjunction with one or more other persons acting together, one of the other persons in the
group may make available such significant managerial assistance on behalf of all investors in the group.
Temporary Investments
Pending investment in “qualifying assets,” as described above, our investments may consist of cash, cash
equivalents, U.S. government securities and high-quality debt securities maturing in one year or less from time of
investment therein, so that 70% of our assets are qualifying assets.
Senior Securities
Prior to 2018 legislation that modified the asset coverage requirements of the 1940 Act, we were permitted, as a
BDC, to issue senior securities only in amounts such that our asset coverage, or BDC asset coverage ratio, as defined in the
1940 Act, equals at least 200% of all debt and/or senior stock immediately after each such issuance. However, 2018
legislation modified the 1940 Act by allowing a BDC to increase the maximum amount of leverage it may incur such that a
BDC’s asset coverage ratio could be reduced from an asset coverage ratio of 200% to an asset coverage ratio of 150%, if
certain requirements are met. In May 2022, our stockholders approved the application of the reduced BDC asset coverage
ratio. As a result, the BDC asset coverage ratio applicable to us decreased from 200% to 150% effective May 3, 2022.
We have received exemptive relief from the SEC to permit us to exclude the SBA-guaranteed debentures of the
Funds from our 150% asset coverage test under the 1940 Act. As such, our ratio of total consolidated assets to outstanding
indebtedness may be less than 150%. This provides us with increased investment flexibility but also increases our risks
related to leverage.
In addition, while any senior securities remain outstanding (other than senior securities representing indebtedness
issued in consideration of a privately arranged loan which is not intended to be publicly distributed), we must generally
include provisions in the documents governing new senior securities to prohibit any cash distribution to our stockholders or
the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution
or repurchase. We may also borrow amounts up to 5% of the value of our total assets for temporary or emergency purposes
without regard to asset coverage with such borrowings not constituting senior securities for purposes of the asset coverage
ratio requirements of the 1940 Act. A loan is presumed to be for temporary purposes if it is repaid within sixty days and not
extended or renewed. For a discussion of the risks associated with leverage, see Item 1A. Risk Factors — Risks Related to
Leverage, including, without limitation, — Because we borrow money, the potential for gain or loss on amounts invested in
us is magnified and may increase the risk of investing in us.
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Common Stock
We are not generally able to issue and sell our common stock at a price below NAV per share. We may, however,
sell our common stock, warrants, options or rights to acquire our common stock, at a price below the current NAV of the
common stock if our Board of Directors determines that such sale is in our best interests and that of our stockholders, and
our stockholders approve such sale. In any such case, the price at which our securities are to be issued and sold may not be
less than a price which, in the determination of our Board of Directors, closely approximates the market value of such
securities (less any distributing commission or discount). We did not seek stockholder authorization to sell shares of our
common stock below the then current NAV per share of our common stock at our 2024 Annual Meeting of Stockholders,
and have not sought such stockholder authorization since 2012, because our common stock price had been trading
significantly above the NAV per share of our common stock since 2011. Our stockholders have previously approved a
proposal that authorizes us to issue securities to subscribe to, convert to, or purchase shares of our common stock in one or
more offerings. We may also make rights offerings to our stockholders at prices per share less than the NAV per share,
subject to applicable requirements of the 1940 Act. See Item 1A. Risk Factors — Risks Related to our Securities —
Stockholders may incur dilution if we sell shares of our common stock in one or more offerings at prices below the then
current NAV per share of our common stock or issue securities to subscribe to, convert to or purchase shares of our
common stock.
Code of Ethics
We have adopted a code of ethics pursuant to Rule 17j-1 under the 1940 Act that establishes procedures for
personal investments and restricts certain personal securities transactions. Personnel subject to the code may invest in
securities for their personal investment accounts, including securities that may be purchased or held by us, so long as such
investments are made in accordance with the code’s requirements. The code of ethics is available on the EDGAR Database
on the SEC’s website at http://www.sec.gov.
Proxy Voting Policies and Procedures
We vote proxies relating to our portfolio securities in a manner in which we believe is consistent with the best
interest of our stockholders. We review on a case-by-case basis each proposal submitted to a stockholder vote to determine
its impact on the portfolio securities held by us. Although we generally vote against proposals that we expect would have a
negative impact on our portfolio securities, we may vote for such a proposal if there exists compelling long-term reasons to
do so.
Our proxy voting decisions are made by the investment team which is responsible for monitoring each of our
investments. To ensure that our vote is not the product of a conflict of interest, we require that anyone involved in the
decision-making process discloses to our chief compliance officer any potential conflict regarding a proxy vote of which he
or she is aware.
Stockholders may obtain information, without charge, regarding how we voted proxies with respect to our
portfolio securities by making a written request for proxy voting information to: Chief Compliance Officer, 1300 Post Oak
Boulevard, 8th Floor, Houston, Texas 77056.
Other 1940 Act Regulations
We are also prohibited under the 1940 Act from knowingly participating in certain transactions with our affiliates
without the prior approval of our Board of Directors who are not interested persons and, in some cases, prior approval by
the SEC.
We are required to provide and maintain a bond issued by a reputable fidelity insurance company to protect us
against larceny and embezzlement. Furthermore, as a BDC, we are prohibited from protecting any director or officer
against any liability to us or our stockholders arising from willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such person’s office.
We are required to adopt and implement written policies and procedures reasonably designed to prevent violation
of the federal securities laws, review these policies and procedures no less frequently than annually for their adequacy and
the effectiveness of their implementation, and to designate a chief compliance officer to be responsible for administering
the policies and procedures.
We may be periodically examined by the SEC for compliance with the 1940 Act.
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Small Business Investment Company Regulations
Each of the Funds is licensed by the SBA to operate as a SBIC under Section 301(c) of the Small Business
Investment Act of 1958. MSMF obtained its SBIC license in 2002 and MSC III obtained its license in 2016.
SBICs are designed to stimulate the flow of private capital to eligible small businesses. Under SBIC regulations,
SBICs may make loans to eligible small businesses, invest in the equity securities of such businesses and provide them
with consulting and advisory services. Each of the Funds has typically invested in secured debt, acquired warrants and/or
made equity investments in qualifying small businesses.
The Funds are subject to regulation and oversight by the SBA, including requirements with respect to reporting
financial information, such as the extent of capital impairment if applicable, on a regular basis and annual examinations
conducted by the SBA. The SBA, as a creditor, will have a superior claim to the Funds’ assets over our securities holders in
the event the Funds are liquidated or the SBA exercises its remedies under the SBA-guaranteed debentures issued by the
Funds upon an event of default.
Under present SBIC regulations, eligible small businesses generally include businesses that (together with their
affiliates) have a tangible net worth not exceeding $24 million or have average annual net income after U.S. federal income
taxes not exceeding $8 million (average net income to be computed without benefit of any carryover loss) for the two most
recent fiscal years. In addition, an SBIC must devote 25% of its investment activity to “smaller enterprises” as defined by
the SBA. A smaller enterprise generally includes businesses that have a tangible net worth not exceeding $6 million and
have average annual net income after U.S. federal income taxes not exceeding $2 million (average net income to be
computed without benefit of any net carryover loss) for the two most recent fiscal years. SBIC regulations also provide
alternative size standard criteria to determine eligibility for designation as an eligible small business or smaller enterprise,
which criteria depend on the primary industry in which the business is engaged and are based on such factors as the number
of employees and gross revenue. However, once an SBIC has invested in a company, it generally may continue to make
follow-on investments in the company, regardless of the size of the portfolio company at the time of the follow-on
investment, up to the time of the portfolio company’s initial public offering.
The SBA prohibits an SBIC from providing funds to small businesses for certain purposes, such as relending and
investment outside the United States, to businesses engaged in certain prohibited industries, and to certain “passive” (non-
operating) companies. In addition, without prior SBA approval, an SBIC may not invest an amount equal to more than 30%
of the SBIC’s regulatory capital, as defined by the SBA, in any one portfolio company and its affiliates.
The SBA places certain limitations on the financing terms of investments by SBICs in portfolio companies (such
as limiting the permissible interest rate on debt securities held by an SBIC in a portfolio company). Included in such
limitations are SBIC regulations which allow an SBIC to exercise control over a small business for a period of seven years
from the date on which the SBIC initially acquires its control position. This control period may be extended for an
additional period of time with the SBA’s prior written approval.
The SBA restricts the ability of an SBIC to lend money to any of its officers, directors and employees or to invest
in affiliates thereof. The SBA also prohibits, without prior SBA approval, a “change of control” of an SBIC or transfers
that would result in any person (or a group of persons acting in concert) owning 10% or more of a class of equity of a
licensed SBIC. A “change of control” is any event which would result in the transfer of the power, direct or indirect, to
direct the management and policies of an SBIC, whether through ownership, contractual arrangements or otherwise.
The SBIC licenses allow the Funds to incur leverage by issuing SBA-guaranteed debentures, subject to the
issuance of a capital commitment and certain approvals by the SBA and customary procedures. SBA-guaranteed
debentures carry long-term fixed rates that are generally lower than rates on comparable bank and other debt. Under
applicable regulations, an SBIC may generally have outstanding debentures guaranteed by the SBA in amounts up to twice
the amount of the privately raised funds of the SBIC. Debentures guaranteed by the SBA have a maturity of ten years,
require semiannual payments of interest, do not require any principal payments prior to maturity, and are not subject to
prepayment penalties. As of December 31, 2024, we, through the Funds, had $350.0 million of outstanding SBA-
guaranteed debentures, which had an annual weighted-average interest rate of 3.3%.
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SBICs must invest idle funds that are not being used to make loans in investments permitted under SBIC
regulations in the following limited types of securities: (i) direct obligations of, or obligations guaranteed as to principal
and interest by, the United States government, which mature within 15 months from the date of the investment; (ii)
repurchase agreements with federally insured institutions with a maturity of seven days or less (and the securities
underlying the repurchase obligations must be direct obligations of or guaranteed by the federal government); (iii) mutual
funds, securities or other instruments that exclusively consist of, or represented pooled assets of investments described in
(i) and (ii) above; (iv) certificates of deposit with a maturity of one year or less, issued by a federally insured institution; (v)
a deposit account in a federally insured institution that is subject to a withdrawal restriction of one year or less; (vi) a
checking account in a federally insured institution; or (vii) a reasonable petty cash fund.
SBICs are periodically examined and audited by the SBA’s staff to determine their compliance with SBIC
regulations and are periodically required to file certain financial information and other documents with the SBA.
Neither the SBA nor the U.S. government or any of its agencies or officers has approved any ownership interest to
be issued by us or any obligation that we or any of our subsidiaries may incur.
Securities Exchange Act of 1934 and Sarbanes-Oxley Act Compliance
We are subject to the reporting and disclosure requirements of the Securities Exchange Act of 1934 (the
“Exchange Act”), including the filing of quarterly, annual and current reports, proxy statements and other required items.
In addition, we are subject to the Sarbanes-Oxley Act of 2002, which imposes a wide variety of regulatory requirements on
publicly-held companies and their insiders. For example:
•
pursuant to Rule 13a-14 of the Exchange Act, our Chief Executive Officer and Chief Financial Officer are
required to certify the accuracy of the consolidated financial statements contained in our periodic reports;
•
pursuant to Item 307 of Regulation S-K, our periodic reports are required to disclose our conclusions about
the effectiveness of our disclosure controls and procedures;
•
pursuant to Rule 13a-15 of the Exchange Act, our management is required to prepare a report regarding its
assessment of our internal control over financial reporting, and our independent registered public accounting
firm separately audits our internal control over financial reporting; and
•
pursuant to Item 308 of Regulation S-K and Rule 13a-15 of the Exchange Act, our periodic reports must
disclose whether there were significant changes in our internal control over financial reporting or in other
factors that could significantly affect these controls subsequent to the date of their evaluation, including any
corrective actions with regard to significant deficiencies and material weaknesses.
The New York Stock Exchange Corporate Governance Regulations
The New York Stock Exchange (“NYSE”) has adopted corporate governance regulations that listed companies
must comply with. We believe we are in compliance with such corporate governance listing standards. We intend to
monitor our compliance with all future listing standards and to take all necessary actions to ensure that we stay in
compliance.
Investment Adviser Regulations
The External Investment Manager, which is wholly-owned by us, is subject to regulation under the Investment
Advisers Act of 1940, as amended (the “Advisers Act”). The Advisers Act establishes, among other things, recordkeeping
and reporting requirements, disclosure requirements, limitations on transactions between the adviser’s account and an
advisory client’s account, limitations on transactions between the accounts of advisory clients, and general anti-fraud
prohibitions. The External Investment Manager may be examined by the SEC from time to time for compliance with the
Advisers Act.
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Taxation as a Regulated Investment Company
MSCC has elected to be treated for U.S. federal income tax purposes as a RIC under Subchapter M of the Code.
MSCC’s taxable income includes the taxable income generated by MSCC and certain of its subsidiaries, including the
Funds, which are treated as disregarded entities for tax purposes. As a RIC, MSCC generally will not pay corporate-level
U.S. federal income taxes on any income that we distribute to our stockholders as dividends. To qualify as a RIC, we must,
among other things, meet certain source-of-income and asset diversification requirements (as described below). In addition,
in order to obtain RIC tax treatment, we must distribute to our stockholders, for each taxable year, at least 90% of our
“investment company taxable income,” which is generally our net ordinary taxable income plus the excess of realized net
short-term capital gains over realized net long-term capital losses, and 90% of our tax-exempt income (the “Annual
Distribution Requirement”). As part of maintaining RIC status, undistributed taxable income (subject to a 4% non-
deductible U.S. federal excise tax) pertaining to a given fiscal year may be distributed up to 12 months subsequent to the
end of that fiscal year, provided such dividends are declared on or prior to the later of (i) filing of the U.S. federal income
tax return for the applicable fiscal year or (ii) the fifteenth day of the ninth month following the close of the year in which
such taxable income was generated.
For any taxable year in which we qualify as a RIC and satisfy the Annual Distribution Requirement, we will not
be subject to U.S. federal income tax on the portion of our income or capital gains we distribute (or are deemed to
distribute) to stockholders. We will be subject to U.S. federal income tax at the regular corporate rates on any income or
capital gains not distributed (or deemed distributed) to our stockholders.
We are subject to a 4% non-deductible U.S. federal excise tax on certain undistributed income unless we distribute
in a timely manner an amount at least equal to the sum of (1) 98% of our net ordinary taxable income for each calendar
year, (2) 98.2% of our capital gain net income for the one-year period ending December 31 in that calendar year and (3)
any taxable income recognized, but not distributed, in preceding years on which we paid no U.S. federal income tax (the
“Excise Tax Avoidance Requirement”). Dividends declared and paid by us in a year will generally differ from taxable
income for that year as such dividends may include the distribution of current year taxable income, exclude amounts
carried over into the following year, and include the distribution of prior year taxable income carried over into and
distributed in the current year. For amounts we carry over into the following year, we will be required to pay the 4% U.S.
federal excise tax on the excess of 98% of our annual investment company taxable income and 98.2% of our capital gain
net income over our distributions for the year.
In order to qualify as a RIC for U.S. federal income tax purposes, we must, among other things:
•
continue to qualify as a BDC under the 1940 Act at all times during each taxable year;
•
derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect
to certain securities, loans, gains from the sale of stock or other securities, net income from certain “qualified
publicly traded partnerships,” or other income derived with respect to our business of investing in such stock
or securities (the “90% Income Test”); and
•
diversify our holdings so that at the end of each quarter of the taxable year:
•
at least 50% of the value of our assets consists of cash, cash equivalents, U.S. government securities,
securities of other RICs, and other securities if such other securities of any one issuer do not represent
more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the
issuer; and
•
no more than 25% of the value of our assets is invested in the securities, other than U.S. government
securities or securities of other RICs, (i) of one issuer, (ii) of two or more issuers that are controlled, as
determined under applicable Code rules, by us and that are engaged in the same or similar or related
trades or businesses or (iii) of certain “qualified publicly traded partnerships” (collectively, the
“Diversification Tests”).
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In order to comply with the 90% Income Test, we formed the Taxable Subsidiaries as wholly-owned taxable
subsidiaries for the primary purpose of permitting us to own equity interests in portfolio companies which are “pass-
through” entities for tax purposes. Absent the taxable status of the Taxable Subsidiaries, a portion of the gross income from
such portfolio companies would flow directly to us for purposes of the 90% Income Test. To the extent such income did
not consist of income derived from securities, such as dividends and interest, it could jeopardize our ability to qualify as a
RIC and, therefore, cause us to incur significant U.S. federal income taxes. The Taxable Subsidiaries are consolidated with
Main Street for generally accepted accounting principles in the United States of America (“U.S. GAAP”) purposes and are
included in our consolidated financial statements, and the portfolio investments held by the Taxable Subsidiaries are
included in our consolidated financial statements. The Taxable Subsidiaries are not consolidated with MSCC for income
tax purposes and may generate income tax expense, or benefit, as a result of their ownership of the portfolio investments.
The income tax expense, or benefit, if any, and any related tax assets and liabilities, are reflected in our consolidated
financial statements.
The External Investment Manager is accounted for as a portfolio investment for U.S. GAAP purposes and is an
indirect wholly-owned subsidiary of MSCC, owned through a Taxable Subsidiary. The External Investment Manager is
owned by a Taxable Subsidiary in order to allow us to comply with the 90% Income Test, since the External Investment
Manager’s income would likely not consist of income derived from securities, such as dividends and interest, and as result,
if held directly by us, it could jeopardize our ability to qualify as a RIC and, therefore, cause us to incur significant U.S.
federal income taxes. As it is wholly-owned by a Taxable Subsidiary, the External Investment Manager is disregarded for
tax purposes. The External Investment Manager has also entered into a tax sharing agreement with its Taxable Subsidiary
owner. Since the External Investment Manager is accounted for as a portfolio investment of MSCC and is not included as a
consolidated subsidiary of MSCC in MSCC’s consolidated financial statements, and as a result of the tax sharing
agreement with its Taxable Subsidiary owner, for its stand-alone financial reporting purposes the External Investment
Manager is treated as if it is taxed at normal corporate tax rates based on its taxable income and, as a result of its activities,
may generate income tax expense or benefit. The income tax expense, or benefit, if any, and the related tax assets and
liabilities, of the External Investment Manager are reflected in the External Investment Manager’s separate financial
statements.
We may be required to recognize taxable income in circumstances in which we do not receive cash. For example,
if we hold debt obligations that are treated under applicable tax rules as having original issue discount (such as debt
instruments issued with warrants and debt securities invested in at a discount to par), we must include in income each year
a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing
such income is received by us in the same taxable year. We may also have to include in income other amounts that we have
not yet received in cash such as PIK interest, cumulative dividends or amounts that are received in non-cash compensation
such as warrants or stock. Because any original issue discount or other amounts accrued will be included in our investment
company taxable income for the year of accrual, we may be required to make a distribution to our stockholders in order to
satisfy the Annual Distribution Requirement, even though we will not have received any corresponding cash amount.
Although we do not presently expect to do so, we are authorized to borrow funds and to sell assets in order to
satisfy distribution requirements. However, under the 1940 Act, we are not permitted to make distributions to our
stockholders in certain circumstances while our debt obligations and other senior securities are outstanding unless certain
“asset coverage” tests are met. See Regulation — Regulation as a Business Development Company — Senior Securities.
Moreover, our ability to dispose of assets to meet our distribution requirements may be limited by (1) the illiquid nature of
our portfolio and/or (2) other requirements relating to our status as a RIC, including the Diversification Tests. If we dispose
of assets in order to meet the Annual Distribution Requirement or the Excise Tax Avoidance Requirement, we may make
such dispositions at times that, from an investment standpoint, are not advantageous.
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We may distribute taxable dividends that are payable in part in our stock. Under certain applicable provisions of
the Code and the U.S. Department of the Treasury (“Treasury”) regulations, distributions payable by us in cash or in shares
of stock (at the stockholders’ election) would satisfy the Annual Distribution Requirement. The Internal Revenue Service
has issued guidance indicating that this rule will apply even where the total amount of cash that may be distributed is
limited to no more than 20% of the total distribution. According to this guidance, if too many stockholders elect to receive
their distributions in cash, each such stockholder would receive a pro rata share of the total cash to be distributed and would
receive the remainder of their distribution in shares of stock. Taxable stockholders receiving such dividends will be
required to include the full amount of the dividend (whether received in cash, our stock, or a combination thereof) as (i)
ordinary income (including any qualified dividend income that, in the case of a noncorporate stockholder, may be eligible
for the same reduced maximum tax rate applicable to long-term capital gains to the extent such distribution is properly
reported by us as qualified dividend income and such stockholder satisfies certain minimum holding period requirements
with respect to our stock) or (ii) long-term capital gain (to the extent such distribution is properly reported as a capital gain
dividend), to the extent of our current and accumulated earnings and profits for U.S. federal income tax purposes. As a
result, a U.S. stockholder may be required to pay tax with respect to such dividends in excess of any cash received. If a
U.S. stockholder sells the stock it receives in order to pay this tax, the sales proceeds may be less than the amount included
in income with respect to the dividend, depending on the market price of our stock at the time of the sale. Furthermore,
with respect to non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such dividends, including in
respect of all or a portion of such dividend that is payable in stock. In addition, if a significant number of our stockholders
determine to sell shares of our stock in order to pay taxes owed on dividends, it may put downward pressure on the trading
price of our stock.
Failure to Qualify as a RIC
If we fail to satisfy the 90% Income Test or the Diversification Tests for any taxable year, we may nevertheless
continue to qualify as a RIC for such year if certain relief provisions are applicable (which may, among other things,
require us to pay certain corporate-level U.S. federal taxes or to dispose of certain assets). We cannot assure you that we
will qualify for any such relief should we fail the 90% Income Test or the Diversification Tests.
If we were unable to qualify for treatment as a RIC and the foregoing relief provisions are not applicable, we
would be subject to tax on all of our taxable income at regular corporate rates. We would not be able to deduct distributions
to stockholders, nor would they be required to be made. If we were subject to tax on all of our taxable income at regular
corporate rates, then distributions we make after being subject to such tax would be taxable to our stockholders and,
provided certain holding period and other requirements were met, could qualify for treatment as “qualified dividend
income” eligible for the maximum 20% rate (plus a 3.8% Medicare surtax, if applicable) applicable to qualified dividends
to the extent of our current and accumulated earnings and profits. Subject to certain limitations under the Code, corporate
taxpayers would be eligible for a dividends-received deduction on distributions they receive. Distributions in excess of our
current and accumulated earnings and profits would be treated first as a return of capital to the extent of the stockholder’s
tax basis, and any remaining distributions would be treated as a capital gain. To requalify as a RIC in a subsequent taxable
year, we would be required to satisfy the RIC qualification requirements for that year and dispose of any earnings and
profits from any year in which we failed to qualify as a RIC. Subject to a limited exception applicable to RICs that
qualified as such under Subchapter M of the Code for at least one year prior to disqualification and that requalify as a RIC
no later than the second year following the nonqualifying year, we could be subject to tax on any unrealized net built-in
gains in the assets held by us during the period in which we failed to qualify as a RIC that are recognized within the
subsequent five years, unless we made a special election to pay corporate-level U.S. federal income tax on such built-in
gain at the time of our requalification as a RIC.
Item 1A. Risk Factors
Investing in our securities involves a number of significant risks. In addition to the other information contained in
this Annual Report on Form 10-K, you should consider carefully the following information before making an investment in
our securities. The risks set out below are not the only risks we face. Additional risks and uncertainties not presently known
to us or not presently deemed material by us might also impair our operations and performance. If any of the following
events occur, our business, financial condition and results of operations could be materially and adversely affected. In
such case, our NAV, the trading price of our common stock and the value of our other securities could decline, and you
may lose all or part of your investment.
SUMMARY OF RISK FACTORS
The following is a summary of the principal risk factors associated with an investment in our securities. Further
details regarding each risk included in the below summary list can be found further below.
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Risks Related to our Business and Structure
• Because our Investment Portfolio is recorded at fair value, there is and will continue to be uncertainty as to the value
of our portfolio investments.
• Our financial condition and results of operations depends on our ability to effectively manage and deploy capital.
• We are subject to risks associated with the interest rate environment and changes in interest rates will affect our cost of
capital, net investment income and the value of our investments.
• We face increasing competition for investment opportunities.
• We are dependent upon our key investment personnel for our future success.
• Our success depends on attracting and retaining qualified personnel in a competitive environment.
• Our business model depends to a significant extent upon strong referral relationships.
• Our Board of Directors may change our operating policies and strategies without prior notice or stockholder approval,
the effects of which may be adverse.
Risks Related to our Investments
• The types of portfolio companies in which we invest involve significant risks and we could lose all or part of our
investment.
• Economic recessions or downturns could impair our portfolio companies’ performance and defaults by our portfolio
companies will harm our operating results.
• Rising credit spreads could affect the value of our investments, and rising interest rates make it more difficult for
portfolio companies to make periodic payments on their loans.
• Inflation could adversely affect the business, results of operations and financial condition of our portfolio companies.
• We may be exposed to higher risks with respect to our investments that include original issue discount or PIK interest.
• The lack of liquidity in our investments may adversely affect our business.
• We may not have the funds or ability to make additional investments in our portfolio companies.
• There may be circumstances where our debt investments could be subordinated to claims of other creditors or we
could be subject to lender liability claims.
• We generally will not control our portfolio companies.
• Defaults by our portfolio companies will harm our operating results.
• Any unrealized depreciation that we experience in our portfolio may be an indication of future realized losses, which
could reduce our income and gains available for distribution.
• Prepayments of our debt investments by our portfolio companies could adversely impact our results of operations and
reduce our return on equity.
• We may be subject to risks associated with “covenant-lite” loans.
• We may not realize gains from our equity investments.
Risks Related to Leverage
• Because we borrow money, the potential for gain or loss on amounts invested in us is magnified and may increase the
risk of investing in us.
• Substantially all of our assets are subject to security interests under our senior securities and if we default on our
obligations under our senior securities, we may suffer adverse consequences, including foreclosure on our assets.
• We are subject to risks associated with any revolving credit facility that utilizes a Structured Subsidiary as our interests
in any Structured Subsidiary are subordinated and we could be prevented from receiving cash on our equity interests
from a Structured Subsidiary.
Risks Related to our Investment Management Activities
• Our executive officers and employees, through the External Investment Manager, may manage other investment funds
that operate in the same or a related line of business as we do, and may invest in such funds, which may result in
significant conflicts of interest.
• We, through the External Investment Manager, derive revenues from managing third-party funds pursuant to
management agreements that may be terminated.
Risks Related to BDCs
• Operating under the constraints imposed on us as a BDC and RIC may hinder the achievement of our investment
objectives.
Risks Related to our Securities
• Investing in our securities may involve a high degree of risk.
• Shares of closed-end investment companies, including BDCs, may trade at a discount to their NAV.
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• We may not be able to pay distributions to our stockholders, our distributions may not grow over time, and a portion of
distributions paid to our stockholders may be a return of capital.
Risks Related to our SBIC Funds
• We, through the Funds, issue debt securities guaranteed by the SBA and sold in the capital markets. As a result of its
guarantee of the debt securities, the SBA has fixed dollar claims on the assets of the Funds that are superior to the
claims of our securities holders.
Federal Income Tax Risks
• We will be subject to corporate-level U.S. federal income tax if we are unable to qualify as a RIC under Subchapter M
of the Code.
• We may have difficulty paying the distributions required to maintain RIC tax treatment under the Code if we recognize
income before or without receiving cash representing such income.
General Risk Factors
• Events outside of our control, including public health crises, supply chain disruptions and inflation, could negatively
affect our portfolio companies and the results of our operations.
• Market conditions may materially and adversely affect debt and equity capital markets in the United States and abroad,
which may have a negative impact on our business and operations.
• Failure to comply with applicable laws or regulations and changes in laws or regulations governing our operations may
adversely affect our business or cause us to alter our business strategy.
RISKS RELATED TO OUR BUSINESS AND STRUCTURE
Because our Investment Portfolio is recorded at fair value, there is and will continue to be uncertainty as to the value of
our portfolio investments.
Under the 1940 Act, we are required to carry our portfolio investments at market value or, if there is no readily
available market value, at fair value as determined by us pursuant to procedures established and overseen by our Board of
Directors. Typically, there is not a public market for the securities of the privately held companies in which we invest
through our LMM and Private Loan investment strategies. As a result, we value these securities quarterly at fair value
based on inputs from management and a nationally recognized independent financial advisory services firm (on a rotational
basis) pursuant to Valuation Procedures approved by our Board of Directors. In addition, the market for investments in
companies that we invest through our Middle Market investment strategy is generally not a liquid market, and therefore, we
primarily use a combination of observable inputs in non-active markets for which sufficient observable inputs were not
available to determine the fair value of these investments and unobservable inputs, pursuant to our Valuation Procedures.
See Note B.1. — Summary of Significant Accounting Policies — Valuation of the Investment Portfolio included in Item 8.
Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K for a detailed discussion
of our Investment Portfolio valuation process and procedures.
The determination of fair value and consequently, the amount of unrealized gains and losses in our portfolio, are
to a certain degree, subjective and dependent on a valuation process approved by our Board of Directors. Certain factors
that may be considered in determining the fair value of our investments include external events, such as private mergers,
sales and acquisitions involving comparable companies. Because such valuations, and particularly valuations of securities
in privately held companies, are inherently uncertain, may fluctuate over short periods of time and may be based on
estimates, our determinations of fair value may differ materially from the values that would have been used if a ready
market for these securities existed. Due to this uncertainty, our fair value determinations may cause our NAV on a given
date to materially understate or overstate the value that we may ultimately realize on one or more of our investments. As a
result, investors purchasing our securities based on an overstated NAV would pay a higher price than the value of our
investments might warrant. Conversely, investors selling our securities during a period in which the NAV understates the
value of our investments may receive a lower price for their securities than the value of our investments might warrant.
Our financial condition and results of operations depends on our ability to effectively manage and deploy capital.
Our ability to achieve our investment objective of maximizing our portfolio’s total return by generating current
income from our debt investments and current income and capital appreciation from our equity and equity-related
investments, including warrants, convertible securities and other rights to acquire equity securities in a portfolio company,
depends on our ability to effectively manage and deploy capital, which depends, in turn, on our investment team’s ability to
identify, evaluate and monitor, and our ability to finance and invest in, companies that meet our investment criteria.
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Accomplishing our investment objective on a cost-effective basis is largely a function of our investment team’s
handling of the investment process, its ability to provide competent, attentive and efficient services and our access to
investments offering acceptable terms. In addition to monitoring the performance of our existing investments, members of
our investment team are also called upon, from time to time, to provide managerial assistance to some of our portfolio
companies. These demands on their time may distract them or slow the rate of investment.
Even if we are able to grow and build upon our investment operations, any failure to manage our growth
effectively could have a material adverse effect on our business, financial condition, results of operations and prospects.
The results of our operations will depend on many factors, including the availability of opportunities for investment,
readily accessible short and long-term funding alternatives in the financial markets and economic conditions. Furthermore,
if we cannot successfully operate our business or implement our investment policies and strategies as described herein, it
could negatively impact our ability to pay dividends.
We are subject to risks associated with the interest rate environment and changes in interest rates will affect our cost of
capital, net investment income and the value of our investments.
To the extent we borrow money or issue debt securities or preferred stock to make investments, our net investment
income will depend, in part, upon the difference between the rate at which we borrow funds or pay interest or dividends on
such debt securities or preferred stock and the rate at which we invest these funds. In addition, many of our debt
investments and borrowings have floating interest rates that reset on a periodic basis, and many of our investments are
subject to interest rate floors. As a result, a change in market interest rates could have a material adverse effect on our net
investment income. In periods of rising interest rates, our cost of funds will increase because the interest rates on the
amounts borrowed under our credit facilities are floating, and any new fixed rate debt may be issued at higher coupon rates,
which could reduce our net investment income to the extent any debt investments have either fixed interest rates, or in
periods when debt investments with floating interest rates are subject to an interest rate floor above then current levels. In
periods of declining interest rates, our interest income and our net investment income could be reduced as the interest
income earned on our floating rate debt investments declines and any new fixed rate debt may be issued at lower coupon
rates. See further discussion and analysis at Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
We can use interest rate risk management techniques in an effort to limit our exposure to interest rate fluctuations.
Such techniques could include various interest rate hedging activities to the extent permitted by the 1940 Act and
applicable commodities laws. These activities could limit our ability to participate in the benefits of lower interest rates
with respect to the hedged borrowings. Adverse developments resulting from changes in interest rates or hedging
transactions could have a material adverse effect on our business, financial condition and results of operations.
An increase in the market pricing of the spreads charged over index rates on floating rate investments could lead
to a decline in the fair value of the debt securities we own, which would adversely affect our NAV. Also, an increase in
interest rates available to investors could make an investment in our common stock less attractive if we are not able to
increase our dividends, which could reduce the value of our common stock.
We face increasing competition for investment opportunities.
We compete for investments with other investment funds (including private equity funds, debt funds, mezzanine
funds, collateralized loan obligation funds, or CLOs, BDCs and SBICs), as well as traditional financial services companies
such as commercial banks and other sources of funding. Many of our competitors are substantially larger and have
considerably greater financial, technical and marketing resources than we do. For example, some competitors may have a
lower cost of capital and access to funding sources that are not available to us. In addition, some of our competitors may
have higher risk tolerances or different risk assessments than we have. These characteristics could allow our competitors to
consider a wider variety of investments, establish more relationships and offer better pricing and more flexible structuring
than we are able to do. We may lose investment opportunities if we do not match our competitors’ pricing, terms and
structure. If we are forced to match our competitors’ pricing, terms and structure, we may not be able to achieve acceptable
returns on our investments or may bear substantial risk of capital loss. A significant part of our competitive advantage
stems from the fact that the market for investments in LMM companies is underserved by traditional commercial banks and
other financing sources. A significant increase in the number and/or the size of our competitors in this target market could
force us to accept less attractive investment terms. Furthermore, many of our competitors are not subject to the regulatory
restrictions that the 1940 Act imposes on us as a BDC.
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We are dependent upon our key investment personnel for our future success.
We depend on the members of our investment team, particularly Dwayne L. Hyzak, David L. Magdol, Jesse E.
Morris, Jaime Arreola, K. Colton Braud, III, Damian T. Burke, Samuel A. Cashiola, Diego Fernandez, Nicholas T.
Meserve and Jonathan B. Montgomery for the identification, review, final selection, structuring, closing and monitoring of
our investments. These employees have significant investment expertise and relationships that we rely on to implement our
business plan. Although we have entered into non-compete arrangements with all of our executive officers and other key
employees, we cannot guarantee that any employees will remain employed with us. If we lose the services of the
individuals mentioned above, we may not be able to operate our business as we expect, and our ability to compete could be
harmed, which could cause our operating results to suffer.
Our success depends on attracting and retaining qualified personnel in a competitive environment.
Our growth will require that we retain new investment and administrative personnel in a competitive market. Our
ability to attract and retain personnel with the requisite credentials, experience and skills depends on several factors
including, but not limited to, our ability to offer competitive wages, benefits and professional growth opportunities. Many
of the entities, including investment funds (such as private equity funds, debt funds and mezzanine funds) and traditional
financial services companies, with which we compete for experienced personnel have greater resources than we have.
The competitive environment for qualified personnel may require us to take certain measures to ensure that we are
able to attract and retain experienced personnel. Such measures may include increasing the attractiveness of our overall
compensation packages, altering the structure of our compensation packages through the use of additional forms of
compensation, or other steps. The inability to attract and retain experienced personnel would have a material adverse effect
on our business.
Our business model depends to a significant extent upon strong referral relationships.
We expect that members of our management team will maintain their relationships with intermediaries, financial
institutions, investment bankers, commercial bankers, financial advisors, attorneys, accountants, consultants and other
individuals within our network, and we will rely to a significant extent upon these relationships to provide us with potential
investment opportunities. If our management team fails to maintain its existing relationships or develop new relationships
with sources of investment opportunities, we will not be able to grow our Investment Portfolio. In addition, individuals
with whom members of our management team have relationships are not obligated to provide us with investment
opportunities, and, therefore, there is no assurance that such relationships will generate investment opportunities for us.
Our Board of Directors may change our investment objective, operating policies and strategies without prior notice or
stockholder approval, the effects of which may be adverse.
Our Board of Directors has the authority, except as otherwise provided in the 1940 Act, to modify or waive our
investment objective, current operating policies, investment criteria and strategies without prior notice and without
stockholder approval. However, absent stockholder approval, we may not change the nature of our business so as to cease
to be regulated as, or withdraw our election as, a BDC. We cannot predict the effect any changes to our investment
objective, current operating policies, investment criteria and strategies would have on our business, NAV, operating results
and value of our stock. However, the effects might be material and adverse, which could negatively affect our business and
impair our ability to pay interest and principal payments to holders of our debt instruments and to make distributions to our
stockholders and cause our investors to lose all or part of their investment in us.
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We are a non-diversified investment company within the meaning of the 1940 Act, and therefore we are not limited with
respect to the proportion of our assets that may be invested in securities of a single issuer.
We are classified as a non-diversified investment company within the meaning of the 1940 Act, which means that
we are not limited by the 1940 Act with respect to the proportion of our assets that we may invest in securities of a single
issuer. Under the 1940 Act, a “diversified” investment company is required to invest at least 75% of the value of its total
assets in cash and cash items, government securities, securities of other investment companies and other securities limited
in respect of any one issuer to an amount not greater than 5% of the value of the total assets of such company and no more
than 10% of the outstanding voting securities of such issuer. As a non-diversified investment company, we are not subject
to this requirement. To the extent that we assume large positions in the securities of a small number of issuers, our NAV
may fluctuate to a greater extent than that of a diversified investment company as a result of changes in the financial
condition or the market’s assessment of the issuer. We may also be more susceptible to any single economic or regulatory
occurrence than a diversified investment company. Beyond our RIC asset diversification requirements and any
requirements under our financing arrangements, we do not have fixed guidelines for diversification, and our investments
could be concentrated in relatively few portfolio companies. See Risk Factors — Federal Income Tax Risks — We will be
subject to corporate-level U.S. federal income tax if we are unable to qualify as a RIC under Subchapter M of the Code.
Although we have historically operated as a non-diversified investment company within the meaning of the 1940 Act, our
investment portfolio may, from time to time, be comprised of assets that could permit us to qualify as a “diversified”
investment company under the 1940 Act. To the extent that we operate as a non-diversified investment company, we may
be subject to greater risk.
We and our portfolio companies may maintain cash balances at financial institutions that exceed federally insured
limits and may otherwise be materially affected by adverse developments affecting the financial services industry, such
as actual events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional
counterparties.
Cash held by us and by our portfolio companies in non-interest-bearing and interest-bearing operating accounts
may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. If such banking institutions were to fail,
we or our portfolio companies could lose all or a portion of those amounts held in excess of such insurance limitations. In
addition, actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect
financial institutions, transactional counterparties or other companies in the financial services industry or the financial
services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past
and may in the future lead to market-wide liquidity problems, which could adversely affect our and our portfolio
companies’ business, financial condition, results of operations and prospects.
Although we assess our portfolio companies’ banking relationships as we believe necessary or appropriate, our
and our portfolio companies’ access to funding sources and other credit arrangements in amounts adequate to finance or
capitalize our respective current and projected future business operations could be significantly impaired by factors that
affect us or our portfolio companies, the financial institutions with which we or our portfolio companies have arrangements
directly or the financial services industry or economy in general. These factors could include, among others, events such as
liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity
agreements or arrangements, disruptions or instability in the financial services industry or financial markets or concerns or
negative expectations about the prospects for companies in the financial services industry. These factors could involve
financial institutions or financial services industry companies with which we or our portfolio companies have financial or
business relationships, but could also include factors involving financial markets or the financial services industry
generally.
In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable
commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants or
systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us or our portfolio
companies to acquire financing on acceptable terms or at all.
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We are subject to risks related to corporate social responsibility.
Our business faces increasing public scrutiny related to environmental, social and governance (“ESG”) activities.
We risk damage to our brand and reputation if we fail to act responsibly in a number of areas, such as diversity and
inclusion, environmental stewardship, support for local communities, corporate governance and transparency and
considering ESG factors in our investment processes. Adverse incidents with respect to ESG activities could impact the
value of our brand, the cost of our operations and relationships with investors, all of which could adversely affect our
business and results of operations. Additionally, new regulatory initiatives related to ESG could adversely affect our
business.
RISKS RELATED TO OUR INVESTMENTS
The types of portfolio companies in which we invest involve significant risks and we could lose all or part of our
investment.
Investing in the types of companies that comprise our portfolio companies exposes us to a number of significant
risks. Among other things, these companies:
•
may have limited financial resources and may be unable to meet their obligations under their debt instruments
that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in
the likelihood of us realizing any guarantees from subsidiaries or affiliates of our portfolio companies that we
may have obtained in connection with our investment, as well as a corresponding decrease in the value of our
investments;
•
may have shorter operating histories, narrower product lines, smaller market shares and/or significant
customer concentrations than larger businesses, which tend to render them more vulnerable to competitors’
actions and market conditions, as well as general economic downturns;
•
are more likely to depend on the management talents and efforts of a small group of persons; therefore, the
death, disability, resignation, termination or significant under-performance of one or more of these persons
could have a material adverse impact on our portfolio company and, in turn, on us;
•
generally have less predictable operating results, may from time to time be parties to litigation, may be
engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may
require substantial additional capital to support their operations, finance expansion or maintain their
competitive position; and
•
generally have less publicly available information about their businesses, operations and financial condition.
We are required to rely on the ability of our management team and investment professionals to obtain
adequate information to evaluate the potential returns from investing in these companies. If we are unable to
uncover all material information about these companies, we may not make a fully informed investment
decision, and may lose all or part of our investment.
In addition certain of our officers and directors may serve as directors on the boards of our portfolio companies.
To the extent that litigation arises out of our investments in these companies, our officers and directors may be named as
defendants in such litigation, which could result in an expenditure of funds (through our indemnification of such officers
and directors) and the diversion of management time and resources.
Economic recessions or downturns could impair our portfolio companies’ performance and defaults by our portfolio
companies will harm our operating results.
Many of our portfolio companies are susceptible to economic slowdowns or recessions and could be unable to
repay our loans during these periods. Therefore, the number of non-performing assets are likely to increase and the value of
our portfolio is likely to decrease during these periods. Adverse economic conditions could decrease the value of collateral
securing any of our loans and the value of any equity investments. A severe recession could further decrease the value of
such collateral and result in losses of value in our portfolio and a decrease in our revenues, net income, assets and net
worth. Economic slowdowns or recessions could lead to financial losses in our portfolio and a decrease in revenues, net
income and assets. Unfavorable economic conditions also could increase our funding costs, limit our access to the capital
markets or result in a decision by lenders not to extend credit to us. These events could prevent us from maintaining or
increasing the level of our investments and harm our operating results.
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Any deterioration of general economic conditions could lead to significant declines in corporate earnings or loan
performance, and the ability of corporate borrowers to service their debt, any of which could trigger a period of global
economic slowdown, and have an adverse impact on our performance and financial results, and the value and the liquidity
of our investments. In an economic downturn, we could have non-performing assets or an increase in non-performing
assets, and we would anticipate that the value of our portfolio would decrease during these periods. Failure to satisfy
financial or operating covenants imposed by lenders, including us, to a portfolio company could lead to defaults and,
potentially, acceleration of payments on such loans and foreclosure on the assets representing collateral for the portfolio
company’s obligations. Cross default provisions under other agreements could be triggered and thus limit the portfolio
company’s ability to satisfy its obligations under any debt that we hold and affect the value of any securities we own. We
would expect to incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a
portfolio company following or in anticipation of a default.
Rising credit spreads could affect the value of our investments, and rising interest rates make it more difficult for
portfolio companies to make periodic payments on their loans.
Some of our portfolio investments are debt securities that bear interest at variable rates and may be negatively
affected by changes in market interest rates. Rising interest rates make it more difficult for borrowers to repay debt, which
could increase the risk of payment defaults and cause the portfolio companies to defer or cancel needed investment. Any
failure of one or more portfolio companies to repay or refinance its debt at or prior to maturity or the inability of one or
more portfolio companies to make ongoing payments following an increase in contractual interest rates could have a
material adverse effect on our business, financial condition, results of operations and cash flows. The value of our
securities could also be reduced from an increase in market credit spreads as rates available to investors could make an
investment in our securities less attractive than alternative investments.
Conversely, decreases in market interest rates could negatively impact the interest income from our variable rate
debt investments while the interest we pay on our fixed rate debt securities does not change. A decrease in market interest
rates may also have an adverse impact on our returns by requiring us to accept lower yields on our debt investments and by
increasing the risk that our portfolio companies will prepay our debt investments, resulting in the need to redeploy capital
at potentially lower rates.
Inflation could adversely affect the business, results of operations and financial condition of our portfolio companies.
Certain of our portfolio companies are in industries that could be impacted by inflation. If such portfolio
companies are unable to pass any increases in their costs of operations along to their customers, it could adversely affect
their operating results and impact their ability to pay dividends on our equity investments and/or interest and principal on
our loans, particularly if interest rates rise in response to inflation. In addition, any projected future decreases in our
portfolio companies’ operating results due to inflation could adversely impact the fair value of those investments. Any
decreases in the fair value of our investments could result in future realized or unrealized losses and therefore reduce our
net increase (decrease) in net assets resulting from operations.
We may be exposed to higher risks with respect to our investments that include original issue discount or PIK interest.
Our investments may include original issue discount and contractual PIK interest, which represents contractual
interest added to a loan balance and due at the end of such loan’s term. To the extent original issue discount or PIK interest
constitute a portion of our income, we are exposed to typical risks associated with such income being required to be
included in taxable and accounting income prior to receipt of cash, including the following:
•
original issue discount and PIK instruments may have higher yields, which reflect the payment deferral and
credit risk associated with these instruments;
•
cash distributions paid to investors representing original issue discount income may be effectively paid from
offering proceeds or borrowings during any given period; thus, although the source for the cash used to pay a
distribution of original issue discount income may come from the cash invested by investors, or our
borrowings, the 1940 Act does not require that investors be given notice of this fact;
•
original issue discount and PIK instruments may have unreliable valuations because their continuing accruals
require continuing judgments about the collectability of the deferred payments and the value of the collateral;
and
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•
original issue discount and PIK instruments may represent a higher credit risk than coupon loans; even if the
conditions for income accrual under U.S. GAAP are satisfied, a borrower could still default when actual
payment is due upon the maturity of such loan.
The lack of liquidity in our investments may adversely affect our business.
We generally invest in companies whose securities are not publicly traded and whose securities will be subject to
legal and other restrictions on resale or will otherwise be less liquid than publicly traded securities. The illiquidity of these
investments may make it difficult for us to sell these investments when desired. In addition, if we are required to liquidate
all or a portion of our portfolio quickly, we may realize significantly less than the value at which we had previously
recorded these investments. As a result, we do not expect to achieve liquidity in our investments in the near-term. The
illiquidity of most of our investments may make it difficult for us to dispose of them at a favorable price and, as a result,
we may suffer losses.
We may not have the funds or ability to make additional investments in our portfolio companies.
We may not have the funds or ability to make additional investments in our portfolio companies. After our initial
investment in a portfolio company, we may be called upon from time to time to provide additional funds to such company
or have the opportunity to increase our investment through the extension of additional loans, the exercise of a warrant to
purchase equity securities, or the funding of additional equity investments. There is no assurance that we will make, or will
have sufficient funds to make, follow-on investments. Any decisions not to make a follow-on investment or any inability
on our part to make such an investment may have a negative impact on a portfolio company in need of such an investment,
may result in a missed opportunity for us to increase our participation in a successful operation, may reduce our ability to
protect an existing investment or may reduce the expected yield on the investment.
There may be circumstances where our debt investments could be subordinated to claims of other creditors or we could
be subject to lender liability claims.
Our portfolio companies may have, or may be permitted to incur, other debt that ranks equally with, or senior to,
the debt in which we invest. By their terms, such debt instruments may entitle the holders to receive payment of interest or
principal on or before the dates on which we are entitled to receive payments with respect to the debt instruments in which
we invest. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company,
holders of debt instruments ranking senior to our investment in that portfolio company would typically be entitled to
receive payment in full before we receive any distribution. After repaying such senior creditors, such portfolio company
may not have any remaining assets to use for repaying its obligation to us. In the case of debt ranking equally with debt
instruments in which we invest, we would have to share on an equal basis any distributions with other creditors holding
such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio
company.
Even if our investment is structured as a senior-secured loan, principles of equitable subordination, as defined by
existing case law, could lead a bankruptcy court to subordinate all or a portion of our claim to that of other creditors and
transfer any lien securing such subordinated claim to the bankruptcy estate. The principles of equitable subordination
defined by case law have generally indicated that a claim may be subordinated only if its holder is guilty of misconduct or
where the senior loan is re-characterized as an equity investment and the senior lender has actually provided significant
managerial assistance to the bankrupt debtor. We may also be subject to lender liability claims for actions taken by us with
respect to a borrower’s business or instances where we exercise control over the borrower. It is possible that we could
become subject to a lender liability claim, including as a result of actions taken in rendering significant managerial
assistance or actions to compel and collect payments from the borrower outside the ordinary course of business.
We generally will not control our portfolio companies.
We do not, and do not expect to, control the decision making in many of our portfolio companies, even though we
may have board representation or board observation rights, and our debt agreements may contain certain restrictive
covenants. As a result, we are subject to the risk that a portfolio company in which we invest will make business decisions
with which we disagree and the management of such company will take risks or otherwise act in ways that do not serve our
interests as debt investors or minority equity holders. Due to the lack of liquidity for our investments in non-traded
companies, we may not be able to dispose of our interests in our portfolio companies as readily as we would like or at an
appropriate valuation. As a result, a portfolio company may make decisions that would decrease the value of our portfolio
holdings.
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Defaults by our portfolio companies will harm our operating results.
A portfolio company’s failure to satisfy financial or operating covenants imposed by us or other lenders could lead
to non-payment of interest and other defaults and, potentially, termination of its loans and foreclosure on its secured assets,
which could trigger cross-defaults under other agreements and jeopardize a portfolio company’s ability to meet its
obligations under the debt or equity securities that we hold. We may incur expenses to the extent necessary to seek
recovery upon default or to negotiate new terms, which may include the waiver of certain financial covenants, with a
defaulting portfolio company.
Any unrealized depreciation that we experience in our portfolio may be an indication of future realized losses, which
could reduce our income and gains available for distribution.
As a BDC, we are required to carry our investments at market value or, if no market value is ascertainable, at the
fair value as determined in accordance with our Valuation Procedures adopted pursuant to Rule 2a-5 under the 1940 Act.
Decreases in the market values or fair values of our investments will be recorded as unrealized depreciation. Any
unrealized depreciation in our portfolio could be an indication of a portfolio company’s inability to meet its repayment
obligations to us with respect to affected loans or a potential impairment of the value of affected equity investments.
This could result in realized losses in the future and ultimately in reductions of our income and gains available for
distribution in future periods.
Prepayments of our debt investments by our portfolio companies could adversely impact our results of operations and
reduce our return on equity.
We are subject to the risk that the investments we make in our portfolio companies may be repaid prior to
maturity. When this occurs, we will generally reinvest these proceeds in temporary investments, pending their future
investment in new portfolio companies. These temporary investments will typically have substantially lower yields than the
debt being prepaid and we could experience significant delays in reinvesting these amounts. Any future investment in a
new portfolio company may also be at lower yields than the debt that was repaid. As a result, our results of operations
could be materially adversely affected if one or more of our portfolio companies elect to prepay amounts owed to us.
Additionally, prepayments could negatively impact our return on equity, which could result in a decline in the market price
of our securities.
We may be subject to risks associated with “covenant-lite” loans.
Some of the loans in which we invest may be “covenant-lite” loans, which means the loans contain fewer
maintenance covenants than other loans (in some cases, none) and do not include terms which allow the lender to monitor
the performance of the borrower and declare a default if certain criteria are breached. Generally, “covenant-lite” loans
provide borrower companies more freedom to negatively impact lenders because their covenants are incurrence-based,
which means they are only tested and can only be breached following an affirmative action of the borrower, rather than by
a deterioration in the borrower’s financial condition. To the extent we invest in covenant-lite loans, we may have fewer
rights against a borrower and may have a greater risk of loss on such investments as compared to investments in loans with
finance maintenance covenants.
We may not realize gains from our equity investments.
Certain investments that we have made in the past and may make in the future include warrants or other equity
securities. Investments in equity securities involve a number of significant risks, including the risk of further dilution as a
result of additional issuances, inability to access additional capital and failure to pay current distributions. Investments in
preferred securities involve special risks, such as the risk of deferred distributions, credit risk, illiquidity and limited voting
rights. In addition, we may from time to time make non-control, equity investments in portfolio companies. Our goal is
ultimately to realize gains upon our disposition of such equity interests. However, these equity interests may not appreciate
in value and, in fact, may decline in value. Accordingly, we may not be able to realize gains from our equity interests, and
any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we
experience. We also may be unable to realize any value if a portfolio company does not have a liquidity event, such as a
sale of the business, recapitalization or public offering, which would allow us to sell the underlying equity interests. We
often seek puts or similar rights to give us the right to sell our equity securities back to the portfolio company issuer;
however, we may be unable to exercise these put rights for the consideration provided in our investment documents if the
issuer is in financial distress.
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Our investments in foreign securities may involve significant risks in addition to the risks inherent in U.S. investments.
Our investment strategy contemplates potential investments in debt securities of foreign companies. Investing in
foreign companies may expose us to additional risks not typically associated with investing in securities of U.S. companies.
These risks include changes in exchange control regulations, political and social instability, expropriation, imposition of
foreign taxes, less liquid markets and less available information than is generally the case in the U.S., higher transaction
costs, less government supervision of exchanges, brokers and issuers, less developed bankruptcy laws, difficulty in
enforcing contractual obligations, lack of uniform accounting and auditing standards and greater price volatility.
Although most of our investments will be U.S. dollar denominated, any investments denominated in a foreign
currency will be subject to the risk that the value of a particular currency will change in relation to one or more other
currencies. Among the factors that may affect currency values are trade balances, the level of short-term interest rates,
differences in relative values of similar assets in different currencies, long-term opportunities for investment and capital
appreciation, and political developments.
RISKS RELATED TO LEVERAGE
Because we borrow money, the potential for gain or loss on amounts invested in us is magnified and may increase the
risk of investing in us.
Borrowings, also known as leverage, magnify the potential for loss on investments in our indebtedness and gain or
loss on investments in our equity capital. As we use leverage to partially finance our investments, you will experience
increased risks of investing in our securities. Accordingly, any event that adversely affects the value of an investment
would be magnified to the extent we use leverage. Such events could result in a substantial loss to us, which would be
greater than if leverage had not been used. In addition, our investment objectives are dependent on the continued
availability of leverage at attractive relative interest rates.
We may also borrow from banks and other lenders and may issue debt securities or enter into other types of
borrowing arrangements in the future. Lenders of these senior securities will have fixed dollar claims on our assets that are
superior to the claims of our common stockholders, and we would expect such lenders to seek recovery against our assets
in the event of a default. We have the ability to pledge up to 100% of our assets and can grant a security interest in all of
our assets under the terms of any debt instruments we could enter into with lenders. The terms of our existing indebtedness
require us to comply with certain financial and operational covenants, and we expect similar covenants in future debt
instruments. Failure to comply with such covenants could result in a default under the applicable credit facility or debt
instrument if we are unable to obtain a waiver from the applicable lender or holder, and such lender or holder could
accelerate repayment under such indebtedness and negatively affect our business, financial condition, results of operations
and cash flows. In addition, under the terms of any credit facility or other debt instrument we enter into, in the event of a
default, we are likely to be required by its terms to use the net proceeds of any investments that we sell to repay a portion of
the amount borrowed under such facility or instrument before applying such net proceeds to any other uses. See Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital
Resources — Capital Resources for a discussion regarding our outstanding indebtedness.
If the value of our assets decreases, leveraging would cause NAV to decline more sharply than it otherwise would
have had we not leveraged our business. Similarly, any decrease in our income would cause net investment income to
decline more sharply than it would have had we not leveraged our business. Such a decline could negatively affect our
ability to pay common stock dividends, scheduled debt payments or other payments related to our securities.
Illustration: The following table illustrates the effect of leverage on returns from an investment in our common
stock assuming various annual returns, net of expenses. The calculations in the table below are hypothetical and actual
returns may be higher or lower than those appearing below.
Assumed Return on Our Portfolio (1) (net of expenses)
(10.0) %
(5.0) %
0.0 %
5.0 %
10.0 %
Corresponding Net Return to Common Stock Holder (2)
(22.5) %
(13.4) %
(4.2) %
4.9 %
14.1 %
___________________________
(1) Assumes, as of December 31, 2024, $5,121.3 million in total assets, $2,134.0 million in debt outstanding, $2,797.8
million in net assets, and a weighted-average interest rate of 5.6%. Actual interest payments may be different.
(2) In order for us to cover our annual interest payments on indebtedness, we must achieve annual returns on our
December 31, 2024 total assets of at least 2.3%.
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Our ability to achieve our investment objective may depend in part on our ability to access additional leverage on
favorable terms and there can be no assurance that such additional leverage can in fact be achieved. If we are unable to
obtain leverage or if the interest rates of such leverage are not attractive, we could experience diminished returns. The
number of leverage providers and the total amount of financing available could decrease or remain static.
Substantially all of our assets are subject to security interests under our senior securities and if we default on our
obligations under our senior securities, we may suffer adverse consequences, including foreclosure on our assets.
Substantially all of our assets are currently pledged as collateral under our secured debt obligations. If we default
on our obligations under our secured debt obligations, our lenders may have the right to foreclose upon and sell, or
otherwise transfer, the collateral subject to their security interests or their superior claim. In such event, we may be forced
to sell our investments to raise funds to repay our outstanding borrowings in order to avoid foreclosure and these forced
sales may be at times and at prices we would not consider advantageous. Moreover, such deleveraging of our company
could significantly impair our ability to effectively operate our business in the manner in which we have historically
operated. As a result, we could be forced to curtail or cease new investment activities and lower or eliminate the dividends
that we have historically paid to our stockholders. In addition, if the lenders exercise their right to sell the assets pledged
under our secured debt obligations, such sales may be completed at distressed sale prices, thereby diminishing or
potentially eliminating the amount of cash available to us after repayment of the amounts of outstanding borrowings.
If our operating performance declines and we are not able to generate sufficient cash flow to service our debt
obligations, we may in the future need to refinance or restructure our debt, sell assets, reduce or delay capital investments,
seek to raise additional capital or seek to obtain waivers from the required lenders under our debt obligations to avoid being
in default. If we are unable to implement one or more of these alternatives, we may not be able to meet our payment
obligations under our debt obligations. If we breach our covenants under our debt obligations and seek a waiver, we may
not be able to obtain a waiver from the required lenders or debt holders. If this occurs, we would be in default under our
debt obligations, the lenders or debt holders could exercise their rights as described above, and we could be forced into
bankruptcy or liquidation. If we are unable to repay debt, lenders having secured obligations could proceed against the
collateral securing the debt. Because certain of our debt obligations have customary cross-default provisions, if the
indebtedness under our debt obligations is accelerated, we may be unable to repay or finance the amounts due.
We are subject to risks associated with any revolving credit facility that utilizes a Structured Subsidiary as our interests
in any Structured Subsidiary are subordinated and we could be prevented from receiving cash on our equity interests
from a Structured Subsidiary.
We own directly or indirectly 100% of the equity interests in MSCC Funding I, LLC (“MSCC Funding”), a
special purpose Structured Subsidiary utilized in our senior secured special purpose vehicle revolving credit facility (the
“SPV Facility”). We consolidate the financial statements of MSCC Funding in our consolidated financial statements and
treat the indebtedness under the SPV Facility as our leverage. Our interest in MSCC Funding is subordinated in priority of
payment to every other obligation of MSCC Funding and is subject to certain payment restrictions set forth in the SPV
Facility.
We receive cash from MSCC Funding only to the extent that we receive distributions on our equity interests
therein. MSCC Funding could make distributions on its equity interests only to the extent permitted by the payment priority
provisions of the SPV Facility. The SPV Facility generally provides that payments on the respective interests could not be
made on any payment date unless all amounts owing to the lenders and other secured parties are paid in full. In addition, if
MSCC Funding does not meet the asset coverage tests or the interest coverage test set forth in the agreement governing the
SPV Facility, a default could occur. In the event of a default under the SPV Facility credit agreement, cash would be
diverted from us to pay the applicable lenders and other secured parties in amounts sufficient to cause such tests to be
satisfied. In the event that we fail to receive cash from MSCC Funding, we could be unable to make distributions to our
stockholders in amounts sufficient to maintain our status as a RIC, or at all. We also could be forced to sell investments in
portfolio companies at less than their fair value in order to continue making such distributions. We cannot assure you that
distributions on the assets held by MSCC Funding will be sufficient to make any distributions to us or that such
distributions will meet our expectations.
Our equity interest in MSCC Funding ranks behind all of the secured and unsecured creditors, known or unknown,
including the lenders in the SPV Facility. Consequently, to the extent that the value of MSCC Funding’s portfolio of loan
investments has been reduced as a result of conditions in the credit markets, defaulted loans, capital gains and losses on the
underlying assets, prepayment or changes in interest rates, the returns on our investments in MSCC Funding could be
reduced. Accordingly, our investments in MSCC Funding could be subject to up to 100% loss.
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The ability to sell investments held by a Structured Subsidiary is limited.
The credit agreement governing the SPV Facility places significant restrictions on our ability, as servicer, to sell
investments. As a result, there could be times or circumstances during which we are unable to sell investments or take other
actions that might be in our best interests.
We may invest in derivatives or other assets that expose us to certain risks, including market risk, liquidity risk and
other risks similar to those associated with the use of leverage.
We may invest in derivatives and other assets that are subject to many of the same types of risks related to the use
of leverage. Derivative transactions, if any, will generally create leverage for us and involve significant risks. The primary
risks related to derivative transactions include counterparty, correlation, liquidity, leverage, volatility, over-the-counter
trading, operational and legal risks. In addition, a small investment in derivatives could have a large potential impact on our
performance, effecting a form of investment leverage on our portfolio. In certain types of derivative transactions, we could
lose the entire amount of our investment; in other types of derivative transactions the potential loss is theoretically
unlimited.
Under SEC Rule 18f-4 under the 1940 Act (“Rule 18f-4”), related to use of derivatives, short sales, reverse
repurchase agreements and certain other transactions by BDCs, we are permitted to enter into derivatives and other
transactions that create future payment or delivery obligations, including short sales, notwithstanding the senior security
provision of the 1940 Act if we comply with certain value-at-risk leverage limits, adopt a derivatives risk management
program and implement board oversight and reporting requirements or otherwise comply with a “limited derivatives users”
exception. Rule 18f-4 also permits us to enter into reverse repurchase agreements or similar financing transactions
notwithstanding the senior security provision of the 1940 Act if we aggregate the amount of indebtedness associated with
our reverse repurchase agreements or similar financing transactions with the aggregate amount of any other senior
securities representing indebtedness when calculating the asset coverage ratios as discussed herein. In addition, we are
permitted to invest in a security on a when-issued or forward-settling basis, or with a non-standard settlement cycle, and the
transaction will be deemed not to involve a senior security under the 1940 Act, provided that (i) we intend to physically
settle the transaction and (ii) the transaction will settle within 35 days of its trade date (the “Delayed-Settlement Securities
Provision”). We may otherwise engage in such transaction as a “derivatives transaction” for purposes of compliance with
the rule. Furthermore, we are permitted to enter into an unfunded commitment agreement, and such unfunded commitment
agreement will not be subject to the asset coverage requirements under the 1940 Act if we reasonably believe, at the time
we enter into such agreement, that we will have sufficient cash and cash equivalents to meet our obligations with respect to
all such agreements as they come due. We cannot predict the effects of these requirements.
We have adopted updated policies and procedures in compliance with Rule 18f-4. We expect to qualify as a
“limited derivatives user.” Future legislation or rules may modify how we treat derivatives and other financial
arrangements for purposes of our compliance with the leverage limitations of the 1940 Act, which may be materially
adverse to us and our investors.
RISKS RELATED TO OUR INVESTMENT MANAGEMENT ACTIVITIES
Our executive officers and employees, through the External Investment Manager, may manage other investment funds
that operate in the same or a related line of business as we do, and may invest in such funds, which may result in
significant conflicts of interest.
Our executive officers and employees, through the External Investment Manager, may manage other investment
funds or assets for other clients that operate in the same or a related line of business as we do, and which funds may be
invested in by us and/or our executive officers and employees. Accordingly, they may have obligations to, or pecuniary
interests in, such other entities, and the fulfillment of such obligations may not be in the best interests of us or our
stockholders and may create conflicts of interest.
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We have made and, in the future, intend to make co-investments with other funds or clients advised by the
External Investment Manager in accordance with the conditions of an exemptive relief order from the SEC permitting such
co-investment transactions. The order requires, among other things, that we and the External Investment Manager consider
whether each such investment opportunity is appropriate for us and the External Investment Manager’s advised clients and,
if it is appropriate, to propose an allocation of the investment opportunity between such other parties. As a consequence, it
may be more difficult for us to maintain or increase the size of our Investment Portfolio in the future. Although we will
endeavor to allocate investment opportunities in a fair and equitable manner, including in accordance with the conditions
set forth in the order issued by the SEC when relying on such order, we may face conflicts in allocating investment
opportunities between us and other funds and accounts managed by the External Investment Manager. Because the
External Investment Manager may receive performance-based fee compensation from other funds and accounts it manages,
this may provide the Company and the External Investment Manager an incentive to allocate opportunities to other funds
and accounts the External Investment Manager manages, instead of us. We and the External Investment Manager have
implemented an allocation policy to ensure the equitable distribution of investment opportunities and, as a result, we may
be unable to participate in certain investments based upon such allocation policy.
We, through the External Investment Manager, derive revenues from managing third-party funds pursuant to
management agreements that may be terminated.
The External Investment Manager earns management fees based on the assets of the funds or other clients under
management and may earn incentive fees, or a carried interest, based on the performance of the funds or accounts managed.
The terms of fund investment management agreements generally give the manager of the fund and the fund itself the right
to terminate the management agreement in certain circumstances. With respect to funds that are not exempt from regulation
under the 1940 Act, the fund’s investment management agreement must be approved annually by (a) such fund’s board of
directors or by the vote of a majority of such fund’s stockholders and (b) the majority of the independent members of such
fund’s board of directors and, in certain cases, by its stockholders, as required by law. The funds’ investment management
agreements can also be terminated by the majority of such fund’s stockholders. Termination of any such management
agreements would reduce the fees we earn from the relevant funds or other clients through the External Investment
Manager, which could have a material adverse effect on our results of operations.
RISKS RELATED TO BDCs
Failure to maintain our status as a BDC would reduce our operating flexibility.
If we do not remain a BDC, we might be regulated as a closed-end investment company under the 1940 Act,
which would subject us to substantially more regulatory restrictions under the 1940 Act and correspondingly decrease our
operating flexibility.
Operating under the constraints imposed on us as a BDC and RIC may hinder the achievement of our investment
objectives.
The 1940 Act and the Code impose numerous constraints on the operations of BDCs and RICs that do not apply to
certain of the other investment vehicles that we may compete with. BDCs are required, for example, to invest at least 70%
of their total assets in certain qualifying assets, including U.S. private or thinly traded public companies, cash, cash
equivalents, U.S. government securities and other high-quality debt instruments that mature in one year or less from the
date of investment. Moreover, qualification for taxation as a RIC requires satisfaction of source-of-income, asset
diversification and distribution requirements. Operating under these constraints may hinder our ability to take advantage of
attractive investment opportunities and to achieve our investment objective. Any failure to do so could subject us to
enforcement action by the SEC, cause us to fail to satisfy the requirements associated with RIC status and subject us to
entity-level corporate income taxation, cause us to fail the 70% test described above or otherwise have a material adverse
effect on our business, financial condition or results of operations.
We may be precluded from investing in what we believe are attractive investments if such investments are not
qualifying assets for purposes of the 1940 Act. If we do not invest a sufficient portion of our assets in qualifying assets, we
will be prohibited from making any additional investment that is not a qualifying asset and could be forced to forgo
attractive investment opportunities. Similarly, these rules could prevent us from making follow-on investments in existing
portfolio companies (which could result in the dilution of our position).
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If we fail to maintain our status as a BDC, we might be regulated as a closed-end investment company that is
required to register under the 1940 Act, which would subject us to additional regulatory restrictions and significantly
decrease our operating flexibility. In addition, any such failure could cause an event of default under any outstanding
indebtedness we might have, which could have a material adverse effect on our business, financial condition or results of
operations.
Regulations governing our operation as a BDC will affect our ability to, and the way in which we, raise additional
capital.
Our business will require capital to operate and grow. We may acquire such additional capital from the following
sources:
Senior Securities
We may issue debt securities or preferred stock and/or borrow money from banks or other financial institutions,
which we refer to collectively as senior securities. As a result of issuing senior securities, we will be exposed to additional
risks, including the following:
•
Prior to the approval of our stockholders, under the provisions of the 1940 Act we were permitted, as a BDC,
to issue senior securities only in amounts such that our BDC asset coverage ratio, as defined in the 1940 Act,
equaled at least 200% immediately after each issuance of senior securities. Following the approval of our
stockholders of the reduced asset coverage requirements in Section 61(a)(2) of the 1940 Act and subject to
our compliance with certain disclosure requirements, effective as of May 3, 2022, under the provisions of the
1940 Act, we are permitted to issue senior securities in amounts such that our BDC asset coverage ratio, as
defined in the 1940 Act, equals at least 150% after each issuance of senior securities. If the value of our assets
declines, we may be unable to satisfy this test. If that happens, we will be prohibited from issuing debt
securities or preferred stock and/or borrowing money from banks or other financial institutions and may not
be permitted to declare a cash dividend or make any cash distribution to stockholders or repurchase shares
until such time as we satisfy this test.
•
Any amounts that we use to service our debt or make payments on preferred stock will not be available for
dividends to our common stockholders.
•
It is likely that any senior securities or other indebtedness we issue will be governed by an indenture or other
instrument containing covenants restricting our operating flexibility. Additionally, some of these securities or
other indebtedness may be rated by rating agencies, and in obtaining a rating for such securities and other
indebtedness, we may be required to abide by operating and investment guidelines that further restrict
operating and financial flexibility.
•
We and, indirectly, our stockholders will bear the cost of issuing and servicing such securities and other
indebtedness.
•
Preferred stock or any convertible or exchangeable securities that we issue in the future may have rights,
preferences and privileges more favorable than those of our common stock, including separate voting rights
and could delay or prevent a transaction or a change in control to the detriment of the holders of our common
stock.
•
Any unsecured debt issued by us would generally rank (i) pari passu with our current and future unsecured
indebtedness and effectively subordinated to all of our existing and future secured indebtedness, to the extent
of the value of the assets securing such indebtedness, and (ii) structurally subordinated to all existing and
future indebtedness and other obligations of any of our subsidiaries.
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Additional Common Stock
We are not generally able to issue and sell our common stock at a price below NAV per share. We may, however,
sell our common stock, warrants, options or rights to acquire our common stock, at a price below the current NAV per
share of the common stock if our Board of Directors determines that such sale is in the best interests of our stockholders,
and our stockholders approve such sale. See Risk Factors — Risks Related to our Securities — Stockholders may incur
dilution if we sell shares of our common stock in one or more offerings at prices below the then current NAV per share of
our common stock or issue securities to subscribe to, convert to or purchase shares of our common stock. for a discussion
related to us issuing shares of our common stock below NAV. Our stockholders have authorized us to issue warrants,
options or rights to subscribe for, convert to, or purchase shares of our common stock at a price per share below the NAV
per share, subject to the applicable requirements of the 1940 Act. There is no expiration date on our ability to issue such
warrants, options, rights or convertible securities based on this stockholder approval. If we raise additional funds by issuing
more common stock or senior securities convertible into, or exchangeable for, our common stock, the percentage
ownership of our stockholders at that time would decrease, and they may experience dilution. Moreover, we can offer no
assurance that we will be able to issue and sell additional equity securities in the future, on favorable terms or at all.
RISKS RELATED TO OUR SECURITIES
Investing in our securities may involve a high degree of risk.
The investments we make in accordance with our investment objective may result in a higher amount of risk than
alternative investment options and a higher risk of volatility or loss of principal. Our investments in portfolio companies
involve higher levels of risk, and therefore, an investment in our securities may not be suitable for someone with lower risk
tolerance.
Shares of closed-end investment companies, including BDCs, may trade at a discount to their NAV.
Shares of closed-end investment companies, including BDCs, may trade at a discount to NAV. This characteristic
of closed-end investment companies and BDCs is separate and distinct from the risk that our NAV per share may decline.
We cannot predict whether our common stock will trade at, above or below NAV. In addition, if our common stock trades
below our NAV per share, we will generally not be able to issue additional common stock at the market price unless our
stockholders approve such a sale and our Board of Directors makes certain determinations. See Risk Factors — Risks
Related to our Securities — Stockholders may incur dilution if we sell shares of our common stock in one or more offerings
at prices below the then current NAV per share of our common stock or issue securities to subscribe to, convert to or
purchase shares of our common stock. for a discussion related to us issuing shares of our common stock below NAV.
The market price of our securities may be volatile and fluctuate significantly.
Fluctuations in the trading prices of our securities may adversely affect the liquidity of the trading market for our
securities and, if we seek to raise capital through future securities offerings, our ability to raise such capital. The market
price and liquidity of the market for our securities may be significantly affected by numerous factors, some of which are
beyond our control and may not be directly related to our operating performance. These factors include:
•
significant volatility in the market price and trading volume of securities of BDCs or other companies in our
sector, which are not necessarily related to the operating performance of these companies;
•
changes in regulatory policies, accounting pronouncements or tax guidelines;
•
the exclusion of BDC common stock from certain market indices, such as what happened with respect to the
Russell indices and the Standard and Poor’s indices, could reduce the ability of certain investment funds to
own our common stock and limit the number of owners of our common stock and otherwise negatively
impact the market price of our common stock;
•
inability to obtain any exemptive relief that may be required by us in the future from the SEC;
•
loss of our BDC or RIC status or any of the Funds’ status as an SBIC;
•
changes in our earnings or variations in our operating results;
•
changes in the value of our portfolio of investments;
•
any shortfall in our investment income or net investment income or any increase in losses from levels
expected by investors or securities analysts;
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•
loss of a major funding source;
•
fluctuations in interest rates;
•
the operating performance of companies comparable to us;
•
departure of our key personnel;
•
proposed, or completed, offerings of our securities, including classes other than our common stock;
•
global or national credit market changes; and
•
general economic trends and other external factors.
We may not be able to pay distributions to our stockholders, our distributions may not grow over time, and a portion of
distributions paid to our stockholders may be a return of capital.
We intend to pay distributions to our stockholders out of assets legally available for distribution. We cannot assure
you that we will achieve investment results that will allow us to pay a specified level of cash distributions, previously
projected distributions for future periods, or year-to-year increases in cash distributions. Our ability to pay distributions
might be adversely affected by, among other things, the impact of one or more of the risk factors described herein. In
addition, the inability to satisfy the asset coverage test applicable to us as a BDC could limit our ability to pay distributions.
All distributions will be paid at the discretion of our Board of Directors and will depend on our earnings, our financial
condition, maintenance of our RIC status, compliance with applicable BDC regulations, compliance with our debt
covenants and such other factors as our Board of Directors may deem relevant from time to time. We cannot assure you
that we will pay distributions to our stockholders in the future.
When we make distributions, we will be required to determine the extent to which such distributions are paid out
of current or accumulated taxable earnings, recognized capital gains or capital. To the extent there is a return of capital,
investors will be required to reduce their basis in our stock for U.S. federal income tax purposes, which may result in
higher tax liability when the shares are sold, even if they have not increased in value or have lost value. In addition, any
return of capital will be net of any sales load and offering expenses associated with sales of shares of our common stock. In
the future, our distributions may include a return of capital.
Stockholders may incur dilution if we sell shares of our common stock in one or more offerings at prices below the then
current NAV per share of our common stock or issue securities to subscribe to, convert to or purchase shares of our
common stock.
The 1940 Act prohibits us from selling shares of our common stock at a price below the current NAV per share of
such stock, with certain exceptions. One such exception is prior stockholder approval of issuances below NAV provided
that our Board of Directors makes certain determinations. We did not seek stockholder authorization to sell shares of our
common stock below the then current NAV per share of our common stock at our 2024 Annual Meeting of Stockholders,
and have not sought such authorization since 2012, because our common stock price per share had been trading
significantly above the NAV per share of our common stock since 2011. We may, however, seek such authorization at
future annual or special meetings of stockholders. Our stockholders have previously approved a proposal to authorize us to
issue securities to subscribe to, convert to, or purchase shares of our common stock in one or more offerings. Any decision
to sell shares of our common stock below the then current NAV per share of our common stock or securities to subscribe
to, convert to, or purchase shares of our common stock would be subject to the determination by our Board of Directors
that such issuance is in our and our stockholders’ best interests.
If we were to sell shares of our common stock below NAV per share, such sales would result in an immediate
dilution to the NAV per share. This dilution would occur as a result of the sale of shares at a price below the then current
NAV per share of our common stock and a proportionately greater decrease in a stockholder’s interest in our earnings and
assets and voting interest in us than the increase in our assets resulting from such issuance. In addition, if we issue
securities to subscribe to, convert to or purchase shares of common stock, the exercise or conversion of such securities
would increase the number of outstanding shares of our common stock. Any such exercise would be dilutive on the voting
power of existing stockholders and could be dilutive with regard to dividends and our NAV, and other economic aspects of
the common stock.
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Because the number of shares of common stock that could be so issued and the timing of any issuance is not
currently known, the actual dilutive effect cannot be predicted; however, the example below illustrates the effect of dilution
to existing stockholders resulting from the sale of common stock at prices below the NAV of such shares.
Illustration: Example of Dilutive Effect of the Issuance of Shares Below NAV. Assume that Company XYZ has
1,000,000 total shares outstanding, $15,000,000 in total assets and $5,000,000 in total liabilities. The NAV per share of the
common stock of Company XYZ is $10.00. The following table illustrates the reduction to NAV and the dilution
experienced by Stockholder A following the sale of 40,000 shares of the common stock of Company XYZ at $9.50 per
share, a price below its NAV per share.
Prior to Sale
Below NAV
Following Sale
Below NAV
Percentage
Change
Reduction to NAV
Total Shares Outstanding
1,000,000
1,040,000
4.0 %
NAV per share
$
10.00 $
9.98
(0.2) %
Dilution to Existing Stockholder
Shares Held by Stockholder A
10,000
10,000 (1)
0.0 %
Percentage Held by Stockholder A
1.00 %
0.96 %
(4.0) %
Total Interest of Stockholder A in NAV
$
100,000 $
99,808
(0.2) %
___________________________
(1) Assumes that Stockholder A does not purchase additional shares in the sale of shares below NAV.
Provisions of the Maryland General Corporation Law and our articles of incorporation and bylaws could deter takeover
attempts and have an adverse impact on the price of our common stock.
The Maryland General Corporation Law and our articles of incorporation and bylaws contain provisions that may
have the effect of discouraging, delaying or making difficult a change in control of our company or the removal of our
incumbent directors. The existence of these provisions, among others, may have a negative impact on the price of our
common stock and may discourage third-party bids for ownership of our company. These provisions may prevent any
premiums being offered to you for our common stock.
We may in the future determine to issue preferred stock, which could adversely affect the market value of our common
stock.
The issuance of shares of preferred stock with dividend or conversion rights, liquidation preferences or other
economic terms favorable to the holders of preferred stock could adversely affect the market price for our common stock
by making an investment in the common stock less attractive. In addition, the dividends on any preferred stock we issue
must be cumulative. Payment of dividends and repayment of the liquidation preference of preferred stock must take
preference over any dividends or other payments to our common stockholders, and holders of preferred stock are not
subject to any of our expenses or losses and are not entitled to participate in any income or appreciation in excess of their
stated preference (other than convertible preferred stock that converts into common stock). In addition, under the 1940 Act,
preferred stock constitutes a “senior security” for purposes of the asset coverage test.
RISKS RELATED TO OUR SBIC FUNDS
We, through the Funds, issue debt securities guaranteed by the SBA and sold in the capital markets. As a result of its
guarantee of the debt securities, the SBA has fixed dollar claims on the assets of the Funds that are superior to the
claims of our securities holders.
We, through the Funds, have outstanding SBIC debentures guaranteed by the SBA. The debentures guaranteed by
the SBA have a maturity of ten years from the date of issuance and require semiannual payments of interest. We will need
to generate sufficient cash flow to make required interest payments on the debentures. If we are unable to meet the
financial obligations under the debentures, the SBA, as a creditor, will have a superior claim to the assets of the Funds over
our securities holders in the event we liquidate or the SBA exercises its remedies under such debentures as the result of a
default by us.
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The Funds are licensed by the SBA, and therefore subject to SBIC regulations.
The Funds, our wholly-owned subsidiaries, are licensed to act as SBICs and are regulated by the SBA. The SBA
also places certain limitations on the financing terms of investments by SBICs in portfolio companies and prohibits SBICs
from providing funds for certain purposes or to businesses in a few prohibited industries. Compliance with SBA
requirements may cause the Funds to forego attractive investment opportunities that are not permitted under SBIC
regulations.
Further, the SBIC regulations require, among other things, that a licensed SBIC be periodically examined by the
SBA and audited by an independent auditor, in each case to determine the SBIC’s compliance with the relevant SBIC
regulations. The SBA prohibits, without prior SBA approval, a “change of control” of an SBIC or transfers that would
result in any person (or a group of persons acting in concert) owning 10% or more of a class of capital stock of a licensed
SBIC. If the Funds fail to comply with applicable SBIC regulations, the SBA could, depending on the severity of the
violation, limit or prohibit their use of SBIC debentures, declare outstanding SBIC debentures immediately due and
payable, and/or limit them from making new investments. In addition, the SBA can revoke or suspend a license for willful
or repeated violation of, or willful or repeated failure to observe, any provision of the Small Business Investment Act of
1958 or any rule or regulation promulgated thereunder. Such actions by the SBA would, in turn, negatively affect us.
Each of the Funds, as an SBIC, may be unable to make distributions to us that will enable us to meet or maintain RIC
status, which could result in the imposition of an entity-level tax.
In order for us to continue to qualify for RIC tax treatment and to minimize corporate-level U.S. federal taxes, we
will be required to distribute substantially all of our net ordinary taxable income and net capital gain income, including
taxable income from certain of our subsidiaries, which includes the income from the Funds. We will be partially dependent
on the Funds for cash distributions to enable us to meet the RIC distribution requirements. The Funds may be limited by
SBIC regulations from making certain distributions to us that may be necessary to enable us to maintain our status as a
RIC. We may have to request a waiver of the SBA’s restrictions for the Funds to make certain distributions to maintain our
eligibility for RIC status. We cannot assure you that the SBA will grant such waiver and if the Funds are unable to obtain a
waiver, compliance with the SBIC regulations may result in loss of RIC tax treatment and a consequent imposition of an
entity-level tax on us.
FEDERAL INCOME TAX RISKS
We will be subject to corporate-level U.S. federal income tax if we are unable to qualify as a RIC under Subchapter M
of the Code.
To maintain RIC tax treatment under the Code, we must meet the following annual distribution, income source
and asset diversification requirements:
•
The Annual Distribution Requirement for a RIC will be satisfied if we distribute to our stockholders on an
annual basis at least 90% of our net ordinary taxable income and realized net short-term capital gains in
excess of realized net long-term capital losses, if any. Depending on the level of taxable income earned in a
tax year, we may choose to carry forward taxable income in excess of current year distributions into the next
tax year and pay a 4% U.S. federal excise tax on such income. Any such carryover taxable income must be
distributed through a dividend declared prior to the later of (i) the filing of the final tax return related to the
year which generated such taxable income or (ii) the fifteenth day of the ninth month following the close of
the year in which such taxable income was generated. For more information regarding tax treatment, see
Business — Regulation — Taxation as a Regulated Investment Company. Because we use debt financing, we
are subject to certain asset coverage ratio requirements under the 1940 Act and are (and may in the future
become) subject to certain financial covenants under loan and credit agreements that could, under certain
circumstances, restrict us from making distributions necessary to satisfy the distribution requirement. In
addition, because we receive non-cash sources of income such as PIK interest which involves us recognizing
taxable income without receiving the cash representing such income, we may have difficulty meeting the
distribution requirement. If we are unable to obtain cash from other sources, we could fail to qualify for RIC
tax treatment and thus become subject to corporate-level U.S. federal income tax.
•
The source-of-income requirement will be satisfied if we obtain at least 90% of our gross income for each
year from dividends, interest, gains from the sale of stock or securities or similar sources.
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•
The asset diversification requirement will be satisfied if we meet certain asset diversification requirements at
the end of each quarter of our taxable year. To satisfy this requirement, at least 50% of the value of our assets
must consist of cash, cash equivalents, U.S. government securities, securities of other RICs, and other
acceptable securities; and no more than 25% of the value of our assets can be invested in the securities, other
than U.S. government securities or securities of other RICs, (i) of one issuer, (ii) of two or more issuers that
are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar
or related trades or businesses or (iii) of certain “qualified publicly traded partnerships.”
Failure to meet these requirements may result in our having to dispose of certain investments quickly in order to
prevent the loss of RIC status. Because most of our investments are in privately held companies, and therefore illiquid, any
such dispositions could be made at disadvantageous prices and could result in substantial losses. Moreover, if we fail to
maintain RIC tax treatment for any reason and are subject to corporate income tax, the resulting corporate taxes could
substantially reduce our net assets, the amount of income available for distribution and the amount of our distributions.
We may have difficulty paying the distributions required to maintain RIC tax treatment under the Code if we recognize
income before or without receiving cash representing such income.
We will include in income certain amounts that we have not yet received in cash, such as: (i) amortization of
original issue discount, which may arise if we receive warrants in connection with the origination of a loan such that
ascribing a value to the warrants creates original issue discount in the debt instrument, if we invest in a debt investment at a
discount to the par value of the debt security or possibly in other circumstances; (ii) contractual payment-in-kind, or PIK,
interest, which represents contractual interest added to the loan balance and due at the end of the loan term; (iii) contractual
preferred dividends, which represents contractual dividends added to the preferred stock and due at the end of the preferred
stock term, subject to adequate profitability at the portfolio company; or (iv) amortization of market discount, which is
associated with loans purchased in the secondary market at a discount to par value. Such amortization of original issue
discounts, increases in loan balances as a result of contractual PIK arrangements, cumulative preferred dividends, or
amortization of market discount will be included in income before we receive the corresponding cash payments. We also
may be required to include in income certain other amounts before we receive such amounts in cash. Investments
structured with these features may represent a higher level of credit risk compared to investments generating income which
must be paid in cash on a current basis.
Since, in certain cases, we may recognize taxable income before or without receiving cash representing such
income, we may have difficulty meeting the Annual Distribution Requirement necessary to maintain RIC tax treatment
under the Code. Accordingly, we may have to sell some of our investments at times and/or at prices we would not consider
advantageous, raise additional debt or equity capital or forgo new investment opportunities for this purpose. If we are not
able to obtain cash from other sources, we may fail to qualify for RIC tax treatment and thus become subject to corporate-
level U.S. federal income tax. For additional discussion regarding the tax implications of a RIC, please see Item 1. Business
— Regulation — Taxation as a Regulated Investment Company.
We may in the future choose to pay dividends in our own stock, in which case you may be required to pay tax in excess
of the cash you receive.
We may distribute taxable dividends that are payable in part in our stock. Under certain applicable provisions of
the Code and the Treasury regulations, distributions payable by us in cash or in shares of stock (at the stockholders’
election) would satisfy the Annual Distribution Requirement. The Internal Revenue Service has issued guidance providing
that a dividend payable in stock or in cash at the election of the stockholders will be treated as a taxable dividend eligible
for the dividends paid deduction provided at least 20% of the total distribution is payable in cash and certain other
requirements are satisfied. According to this guidance, if too many stockholders elect to receive their distributions in cash,
each such stockholder would receive a pro rata share of the total cash to be distributed and would receive the remainder of
their distribution in shares of stock. Taxable stockholders receiving such dividends will be required to include the full
amount of the dividend as ordinary income (or as long-term capital gain to the extent such dividend is properly reported as
a capital gain dividend) to the extent of our current and accumulated earnings and profits for U.S. federal income tax
purposes. As a result, a U.S. stockholder may be required to pay tax with respect to such dividends in excess of any cash
received. If a U.S. stockholder sells the stock it receives as a dividend in order to pay this tax, the sales proceeds may be
less than the amount included in income with respect to the dividend, depending on the market price of our stock at the
time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold U.S. tax with respect
to such dividends, including in respect of all or a portion of such dividend that is payable in stock. In addition, if a
significant number of our stockholders determine to sell shares of our stock in order to pay taxes owed on dividends, it may
put downward pressure on the trading price of our stock.
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Stockholders may have current tax liability on dividends they elect to reinvest in our common stock but would not
receive cash from such dividends to pay such tax liability.
If stockholders participate in our dividend reinvestment plan, they will be deemed to have received, and for
federal income tax purposes will be taxed on, the amount reinvested in our common stock to the extent the amount
reinvested was not a tax-free return of capital. As a result, unless a stockholder is a tax-exempt entity, it may have to use
funds from other sources to pay its tax liability on the value of the dividend that they have elected to have reinvested in our
common stock.
Legislative or regulatory tax changes could adversely affect our stockholders.
At any time, the federal income tax laws governing RICs or the administrative interpretations of those laws or
regulations may be amended. Any new laws, regulations or interpretations may take effect retroactively and could
adversely affect the taxation of us or our stockholders. Therefore, changes in tax laws, regulations or administrative
interpretations or any amendments thereto could diminish the value of an investment in our shares or the value or the resale
potential of our investments. If we do not comply with applicable laws and regulations, we could lose any licenses that we
then hold for the conduct of our business and may be subject to civil fines and criminal penalties.
GENERAL RISK FACTORS
Events outside of our control, including public health crises, supply chain disruptions and inflation, could negatively
affect our portfolio companies and the results of our operations.
Periods of market volatility could occur in response to pandemics or other events outside of our control. We and
the portfolio companies in which we invest in could be affected by force majeure events (i.e., events beyond the control of
the party claiming that the event has occurred, such as acts of God, fire, flood, earthquakes, outbreaks of an infectious
disease, pandemic or any other serious public health concern, war, terrorism, labor strikes, major plant breakdowns,
pipeline or electricity line ruptures, failure of technology, defective design and construction, accidents, demographic
changes, government macroeconomic policies, social instability, etc.). Some force majeure events could adversely affect
the ability of a party (including us, a portfolio company or a counterparty to us) to perform its obligations until it is able to
remedy the force majeure event. In addition, force majeure events, such as the cessation of the operation of equipment for
repair or upgrade, could similarly lead to the unavailability of essential equipment and technologies. These risks could,
among other effects, adversely impact the cash flows available from a portfolio company, cause personal injury or loss of
life, including to an officer, director or a member of our investment team, damage property, or instigate disruptions of
service. In addition, the cost to a portfolio company or us of repairing or replacing damaged assets resulting from such
force majeure event could be considerable.
It will not be possible to insure against all such events, and insurance proceeds received, if any, could be
inadequate to completely or even partially cover any loss of revenues or investments, any increases in operating and
maintenance expenses, or any replacements or rehabilitation of property. Certain events causing catastrophic loss could be
either uninsurable, or insurable at such high rates as to adversely impact us or portfolio companies, as applicable. Force
majeure events that are incapable of or are too costly to cure could have permanent adverse effects. Certain force majeure
events (such as war or an outbreak of an infectious disease) could have a broader negative impact on the world economy
and international business activity generally, or in any of the countries in which we invest or our portfolio companies
operate specifically. Such force majeure events could result in or coincide with: increased volatility in the global securities,
derivatives and currency markets; a decrease in the reliability of market prices and difficulty in valuing assets; greater
fluctuations in currency exchange rates; increased risk of default (by both government and private issuers); further social,
economic, and political instability; nationalization of private enterprise; greater governmental involvement in the economy
or in social factors that impact the economy; less governmental regulation and supervision of the securities markets and
market participants and decreased monitoring of the markets by governments or self-regulatory organizations and reduced
enforcement of regulations; limited, or limitations on, the activities of investors in such markets; controls or restrictions on
foreign investment, capital controls and limitations on repatriation of invested capital; inability to purchase and sell
investments or otherwise settle security or derivative transactions (i.e., a market freeze); unavailability of currency hedging
techniques; substantial, and in some periods extremely high, rates of inflation, which can last many years and have
substantial negative effects on credit and securities markets as well as the economy as a whole; recessions; and difficulties
in obtaining and/or enforcing legal judgments.
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Market conditions may materially and adversely affect debt and equity capital markets in the United States and abroad,
which may have a negative impact on our business and operations.
The success of our activities is affected by general economic and market conditions, including, among others,
interest rates, availability of credit, inflation rates, economic uncertainty, changes in laws, and trade barriers. These factors
could affect the level and volatility of securities prices and the liquidity of our investments. Volatility or illiquidity could
impair our profitability or result in losses. These factors also could adversely affect the availability or cost of our leverage,
which would result in lower returns.
Disruptions in the capital markets could increase the spread between the yields realized on risk-free and higher
risk securities, resulting in illiquidity in parts of the capital markets. Such disruptions could adversely affect our business,
financial condition, results of operations and cash flows, and future market disruptions and/or illiquidity could negatively
impact us. These unfavorable economic conditions could increase our funding costs and limit our access to the capital
markets, and could result in a decision by lenders not to extend credit to us in the future. These events could limit our
investments, our ability to grow and could negatively impact our operating results and the fair values of our debt and equity
investments.
Uncertainty about presidential administration initiatives could negatively impact our business, financial condition and
results of operations.
There is significant uncertainty with respect to legislation, regulation and government policy at the federal level,
as well as the state and local levels. Recent events, including the 2024 U.S. presidential election, have created a climate of
heightened uncertainty and introduced new and difficult-to-quantify macroeconomic and political risks with potentially far-
reaching implications. The presidential administration’s changes to U.S. policy may impact, among other things, the U.S.
and global economy, international trade and relations, unemployment, immigration, taxes, healthcare, the U.S. regulatory
environment, inflation and other areas. Although we cannot predict the impact, if any, of these changes to our business,
they could adversely affect our business, financial condition, operating results and cash flows. Until we know what policy
changes are made and how those changes impact our business and the business of our competitors over the long term, we
will not know if, overall, we will benefit from them or be negatively affected by them.
Failure to comply with applicable laws or regulations and changes in laws or regulations governing our operations may
adversely affect our business or cause us to alter our business strategy.
We, the Funds, and our portfolio companies are subject to applicable local, state and federal laws and regulations.
Failure to comply with any applicable local, state or federal law or regulation could negatively impact our reputation and
our business results. New legislation may also be enacted or new interpretations, rulings or regulations could be adopted,
including those governing the types of investments we are permitted to make, any of which could harm us and our
stockholders, potentially with retroactive effect. Additionally, any changes to the laws and regulations governing our
operations relating to permitted investments may cause us to alter our investment strategy in order to avail ourselves of new
or different opportunities. Such changes could result in material differences to the strategies and plans set forth herein and
may result in our investment focus shifting from the areas of expertise of our investment team to other types of investments
in which our investment team may have less expertise or little or no experience. Thus, any such changes, if they occur,
could have a material adverse effect on our results of operations and the value of your investment.
We may experience fluctuations in our operating results.
We could experience fluctuations in our operating results due to a number of factors, including our ability or
inability to make investments in companies that meet our investment criteria, the interest rate payable on the debt securities
we acquire, the level of portfolio dividend and fee income, the level of our expenses, variations in and the timing of the
recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our markets and
general economic conditions. As a result of these factors, operating results for any period should not be relied upon as
being indicative of performance in future periods.
Technological innovations and industry disruptions may negatively impact us.
Technological innovations have disrupted traditional approaches in multiple industries and can permit younger
companies to achieve success and in the process disrupt markets and market practices. We can provide no assurance that
new businesses and approaches will not be created that would compete with us and/or our portfolio companies or alter the
market practices in which we have been designed to function within and on which we depend on for our investment return.
New approaches could damage our investments, disrupt the market in which we operate and subject us to increased
competition, which could materially and adversely affect our business, financial condition and results of investments.
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We are highly dependent on information systems and systems failures could significantly disrupt our business, which
may, in turn, negatively affect the market price of our common stock and our ability to pay dividends.
Our business is highly dependent on our and third parties’ communications and information systems. Any failure
or interruption of those systems, including as a result of the termination of an agreement with any third-party service
providers, could cause delays or other problems in our activities. Our financial, accounting, data processing, backup or
other operating systems and facilities may fail to operate properly or become disabled or damaged as a result of a number
of factors including events that are wholly or partially beyond our control and adversely affect our business. There could
be:
•
sudden electrical or telecommunications outages;
•
natural disasters such as earthquakes, tornadoes and hurricanes;
•
disease pandemics;
•
events arising from local or larger scale political or social matters, including terrorist acts; and
•
cyber attacks, including software viruses, ransomware, malware and phishing and vishing schemes.
The failure in cybersecurity systems, as well as the occurrence of events unanticipated in our disaster recovery systems
and management continuity planning could impair our ability to conduct business effectively.
The occurrence of a disaster such as a cyber-attack, a natural catastrophe, an industrial accident, a terrorist attack
or war, events unanticipated in our disaster recovery systems, or a support failure from external providers, could have an
adverse effect on our ability to conduct business and on our results of operations and financial condition, particularly if
those events affect our computer-based data processing, transmission, storage, and retrieval systems or destroy data. If a
significant number of our managers were unavailable in the event of a disaster, our ability to effectively conduct our
business could be severely compromised.
We depend heavily upon computer systems to perform necessary business functions. Despite our implementation
of a variety of security measures, our computer systems could be subject to cyber-attacks and unauthorized access, such as
physical and electronic break-ins or unauthorized tampering. Like other companies, we may experience threats to our data
and systems, including malware and computer virus attacks, unauthorized access, system failures and disruptions. If one or
more of these events occurs, it could potentially jeopardize the confidential, proprietary and other information processed
and stored in, and transmitted through, our computer systems and networks, or otherwise cause interruptions or
malfunctions in our operations, which could result in damage to our reputation, financial losses, litigation, increased costs,
regulatory penalties and/or customer dissatisfaction or loss.
Third parties with which we do business (including, but not limited to, service providers, such as accountants,
custodians, transfer agents and administrators, and the issuers of securities in which we invest) may also be sources or
targets of cybersecurity or other technological risks. While we engage in actions to reduce our exposure resulting from
outsourcing, we cannot control the cybersecurity plans and systems put in place by these third parties and ongoing threats
may result in unauthorized access, loss, exposure or destruction of data, or other cybersecurity incidents, with increased
costs and other consequences, including those described above. Privacy and information security laws and regulation
changes, and compliance with those changes, may also result in cost increases due to system changes and the development
of new administrative processes.
We are subject to risks associated with artificial intelligence and machine learning technology.
Artificial intelligence, including machine learning and similar tools and technologies that collect, aggregate,
analyze or generate data or other materials, or collectively, AI, and its current and potential future applications including in
the private investment and financial industries, as well as the legal and regulatory frameworks within which AI operates,
continue to rapidly evolve.
Recent technological advances in AI pose risks to us and our portfolio investments. We and our portfolio
investments could also be exposed to the risks of AI if third-party service providers or any counterparties, whether or not
known to us, also use AI in their business activities. We and our portfolio companies may not be in a position to control the
use of AI technology in third-party products or services.
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Use of AI could include the input of confidential information in contravention of applicable policies, contractual
or other obligations or restrictions, resulting in such confidential information becoming part accessible by other third-party
AI applications and users. While we do not currently use AI to make investment recommendations, the use of AI could also
exacerbate or create new and unpredictable risks to our business and the business of our portfolio companies, including by
potentially significantly disrupting the markets in which we and our portfolio companies operate or subjecting us and our
portfolio companies to increased competition and regulation, which could materially and adversely affect business,
financial condition or results of operations of us and our portfolio companies. In addition, the use of AI by bad actors could
heighten the sophistication and effectiveness of cyber and security attacks experienced by us or our portfolio companies.
Independent of its context of use, AI technology is generally highly reliant on the collection and analysis of large
amounts of data, and it is not possible or practicable to incorporate all relevant data into the model that AI technology
utilizes to operate. Certain data in such models will inevitably contain a degree of inaccuracy and error—potentially
materially so—and could otherwise be inadequate or flawed, which would be likely to degrade the effectiveness of AI
technology. To the extent that we or our portfolio investments are exposed to the risks of AI use, any such inaccuracies or
errors could have adverse impacts on us or our investments.
AI technology and its applications, including in the private investment and financial sectors, continue to develop
rapidly, and it is impossible to predict the future risks that may arise from such developments.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
The Company maintains, and routinely reviews and evaluates its information technology (“IT”) and cybersecurity
policies, practices and procedures (our “Cybersecurity Program”), which includes processes for assessing, identifying and
managing material risks from cybersecurity threats. The Cybersecurity Program has various policies and procedures
including a Cyber Incident Response Plan as part of the Company’s Crisis Management Plan. Our Cybersecurity Program
is administered by our IT Manager, who is managed on a day-to-day basis by our General Counsel and overseen by our IT
Steering Committee consisting of our Chief Executive Officer, our Chief Operating Officer and our General Counsel. Our
General Counsel also serves as the crisis response team leader in connection with any material cybersecurity incident under
the Cyber Incident Response Plan, with our Chief Operating Officer and our IT Manager also included on the crisis
response team. We also utilize the services of IT and cybersecurity advisers, consultants and experts in the evaluation and
periodic testing of our IT and cybersecurity systems, to recommend improvements to our Cybersecurity Program and in
connection with any cybersecurity incident. Our IT Manager has over 10 years of experience advising on and managing
risks from cybersecurity threats as well as developing and implementing cybersecurity systems, policies and procedures.
Our General Counsel has served in his oversight function as General Counsel for over 16 years and previously as our Chief
Compliance Officer for over 12 years, during which time he has gained expertise in assessing and managing risk applicable
to the Company. Similarly, each of our Chief Executive Officer and our Chief Operating Officer have served in various
executive management roles at the Company and, in the case of our Chief Operating Officer, other publicly traded
organizations, involving extensive oversight and management of risks, including cybersecurity related risks, for over 20
years.
As part of our overall risk management process, our management engages at least annually in an enterprise risk
management review and evaluation, during which management reviews the principal risks relating to our business and
operations. Included in this process is a review and evaluation of our risks relating to our Cybersecurity Program.
Additionally, as part of our Rule 38a-1 compliance program, we review at least annually the compliance policies and
procedures of our key service providers, including documentation discussing each service providers’ information security
and privacy controls. Any failure in our or our key service providers’ cybersecurity systems could have a material impact
on our operating results. See Item 1A. Risk Factors — General Risk Factors — The failure in cybersecurity systems, as well
as the occurrence of events unanticipated in our disaster recovery systems and management continuity planning could
impair our ability to conduct business effectively.
Our Board as a whole has responsibility for the Company’s risk oversight, with reviews of certain areas being
conducted by the relevant Board committees that report on their deliberations to the full Board. The oversight responsibility
of the Board and its committees is enabled by management reporting processes that are designed to provide visibility to the
Board about the identification, assessment and management of critical risks and management’s risk mitigation strategies.
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Oversight of risks relating to IT and cybersecurity has been delegated by our Board to its Audit Committee. The
Audit Committee includes members of the Board who, in addition to each being designated as an “audit committee
financial expert,” possess backgrounds and experience which we believe enable them to provide effective oversight of our
IT and cybersecurity risks. Our management routinely reports to the Audit Committee on the status of the Company’s
Cybersecurity Program and material risks from cybersecurity threats at the Audit Committee’s quarterly meetings. Such
reports generally detail any testing, observations or developments concerning the Cybersecurity Program that occurred
during the prior quarter. The results of periodic testing related to the Cybersecurity Program are also described in the Chief
Compliance Officer’s annual report to the Board, provided pursuant to Rule 38a-1 under the 1940 Act. The crisis response
team leader also collaborates with the Audit Committee chair to ensure that the Board is apprised of any material
cybersecurity incident.
During the reporting period, the Company has not identified any impacts from cybersecurity threats, including as a
result of previous cybersecurity incidents, that the Company believes have materially affected, or are reasonably likely to
materially affect, the Company, including its business strategy, operational results and financial condition.
Item 2. Properties
We do not own any real estate or other physical properties materially important to our operations. Currently, we
lease office space in Houston, Texas for our corporate headquarters.
Item 3. Legal Proceedings
We may, from time to time, be involved in litigation arising out of our operations in the normal course of business
or otherwise. Furthermore, third parties may seek to impose liability on us in connection with the activities of our portfolio
companies. While the outcome of any current legal proceedings cannot at this time be predicted with certainty, we do not
expect any current matters will materially affect our financial condition or results of operations; however, there can be no
assurance whether any pending legal proceedings will have a material adverse effect on our financial condition or results of
operations in any future reporting period.
Item 4. Mine Safety Disclosures
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
COMMON STOCK AND HOLDERS
Our common stock is traded on the NYSE under the symbol “MAIN.”
The following table sets forth, for the periods indicated, the range of high and low closing prices of our common
stock as reported on the NYSE, and the sales price as a percentage of the NAV per share of our common stock.
Price Range
Premium of
High Sales
Price to
Premium of
Low Sales
Price to
NAV(1)
High
Low
NAV(2)
NAV(2)
Year ending December 31, 2025
First Quarter (through February 26, 2025)
* $
63.10 $
57.72
*
*
Year ended December 31, 2024
Fourth Quarter
$
31.65 $
58.58 $
49.95
85 %
58 %
Third Quarter
30.57
52.25
47.05
71 %
54 %
Second Quarter
29.80
50.88
46.68
71 %
57 %
First Quarter
29.54
47.31
43.45
60 %
47 %
Year ended December 31, 2023
Fourth Quarter
$
29.20 $
43.80 $
37.87
50 %
30 %
Third Quarter
28.33
42.73
39.61
51 %
40 %
Second Quarter
27.69
41.17
38.10
49 %
38 %
First Quarter
27.23
42.49
36.87
56 %
35 %
___________________________
*
NAV has not yet been determined for the first quarter of 2025.
(1) NAV is determined as of the last day in the relevant quarter and therefore may not reflect the NAV per share on the
date of the high and low closing prices. The net asset values shown are based on outstanding shares at the end of each
period.
(2) Calculated for each quarter as (i) NAV subtracted from the respective high or low share price divided by (ii) NAV.
On February 26, 2025, the last sale price of our common stock on the NYSE was $59.58 per share, and there were
401 holders of record of our common stock which did not include stockholders for whom shares are held in “nominee” or
“street name.” The NAV per share of our common stock on December 31, 2024 was $31.65, and the premium of the
February 26, 2025 closing price of our common stock was 88% to this NAV per share.
Shares of BDCs may trade at a market price that is less than the value of the net assets attributable to those shares.
The possibility that our shares of common stock will trade at a discount from NAV per share or at premiums that are
unsustainable over the long term are separate and distinct from the risk that our NAV per share will decrease. It is not
possible to predict whether our common stock will trade at, above, or below NAV per share. Since our IPO in October
2007, our shares of common stock have traded at prices both less than and exceeding our NAV per share.
DIVIDEND/DISTRIBUTION POLICY
We currently intend to distribute dividends or make distributions to our stockholders out of assets legally available
for distribution. Our dividends and other distributions, if any, will be determined by our Board of Directors from time to
time. Our ability to declare dividends depends on our earnings, our overall financial condition (including our liquidity
position), maintenance of our RIC status and such other factors as our Board of Directors may deem relevant from time to
time. When we make distributions, we are required to determine the extent to which such distributions are paid out of
current or accumulated earnings, recognized capital gains or capital. To the extent there is a return of capital (a distribution
of the stockholders’ invested capital), investors will be required to reduce their basis in our stock for federal tax purposes.
In the future, our distributions may include a return of capital.
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We have adopted a dividend reinvestment and direct stock purchase plan (the “Plan”). The dividend reinvestment
feature of the Plan (the “DRIP”) provides for the reinvestment of dividends on behalf of our stockholders, unless a
stockholder has elected to receive dividends in cash. As a result, if we declare a cash dividend, our stockholders who have
not “opted out” of the DRIP by the dividend record date will have their cash dividend automatically reinvested into
additional shares of our common stock. The share requirements of the DRIP may be satisfied through the issuance of new
shares of common stock or through open market purchases of common stock by the DRIP plan administrator. Newly issued
shares will be valued based upon the final closing price of our common stock on a valuation date determined for each
dividend by our Board of Directors. Shares purchased in the open market to satisfy the DRIP requirements will be valued
based upon the average price of the applicable shares purchased by the DRIP plan administrator, before any associated
brokerage or other costs. Our DRIP is administered by our transfer agent on behalf of our record holders and participating
brokerage firms. Brokerage firms and other financial intermediaries may decide not to participate in our DRIP but may
provide a similar dividend reinvestment plan for their clients.
SALES OF UNREGISTERED SECURITIES
During the year ended December 31, 2024, we issued a total of 721,963 shares of our common stock under the
DRIP. These issuances were not subject to the registration requirements of the Securities Act of 1933, as amended. The
aggregate value of the shares of our common stock issued under the DRIP during 2024 was $35.7 million.
PURCHASES OF EQUITY SECURITIES
Upon vesting of restricted stock awarded pursuant to our employee equity compensation plan, shares may be
withheld to meet applicable tax withholding requirements. Any withheld shares are treated as common stock purchases by
the Company in our consolidated financial statements as they reduce the number of shares received by employees upon
vesting (see “Purchase of vested stock for employee payroll tax withholding” in the Consolidated Statements of Changes in
Net Assets for share amounts withheld).
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STOCK PERFORMANCE GRAPH
The following graph compares the stockholder return on our common stock from October 5, 2007 to
December 31, 2024 with the S&P 500 Index, the Russell 2000 Index, the KBW Regional Bank Index and the S&P BDC
Index. This comparison assumes $100.00 was invested on October 5, 2007 (the date our common stock began to trade in
connection with our initial public offering) in our common stock and in the comparison groups and assumes the
reinvestment of all dividends prior to any tax effect. The comparisons in the graph below are based on historical data and
are not intended to forecast the possible future performance of our common stock.
COMPARISON OF STOCKHOLDER RETURN(1)
Among Main Street Capital Corporation, the S&P 500 Index, the Russell 2000 Index, the KBW
Regional Bank Index(2) and the S&P BDC Index(3)
(For the Period October 5, 2007 to December 31, 2024)
___________________________
(1) Total return includes reinvestment of dividends through December 31, 2024.
(2) The KBW Nasdaq Regional Banking Index is a modified market capitalization weighted index designed to track the
performance of U.S. regional banks or thrifts that are publicly traded in the U.S.
(3) The S&P BDC Index measures the performance of Business Development Companies that trade on major U.S.
exchanges; constituents are float-adjusted market capitalization (FMC) weighted, subject to a single constituent weight
cap of 10%.
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Item 6. [Reserved.]
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our consolidated financial statements and the notes
thereto included elsewhere in this Annual Report on Form 10-K.
Statements we make in the following discussion which express a belief, expectation or intention, as well as those
that are not historical fact, are forward-looking statements that are subject to risks, uncertainties and assumptions. Our
actual results, performance or achievements, or industry results, could differ materially from those we express in the
following discussion as a result of a variety of factors, including the risks and uncertainties we have referred to under the
headings “Cautionary Statement Concerning Forward-Looking Statements” and “Risk Factors” in this report.
INVESTMENT PORTFOLIO SUMMARY
The following tables provide a summary of our investments in the LMM, Private Loan and Middle Market
portfolios as of December 31, 2024 and 2023 (this information excludes Other Portfolio investments and the External
Investment Manager which are discussed further below).
As of December 31, 2024
LMM (a)
Private Loan
Middle Market
(dollars in millions)
Number of portfolio companies
84
91
15
Fair value
$
2,502.9
$
1,904.3
$
155.3
Cost
$
1,937.8
$
1,952.5
$
195.0
Debt investments as a % of portfolio (at cost)
70.8 %
95.4 %
86.5 %
Equity investments as a % of portfolio (at cost)
29.2 %
4.6 %
13.5 %
% of debt investments at cost secured by first priority lien
99.2 %
99.9 %
97.2 %
Weighted-average annual effective yield (b)
12.8 %
11.8 %
12.3 %
Average EBITDA (c)
$
10.2
$
30.5
$
53.4
___________________________
(a) As of December 31, 2024, we had equity ownership in all of our LMM portfolio companies, and the average fully
diluted equity ownership in those portfolio companies was 38%.
(b) The weighted-average annual effective yields were computed using the effective interest rates for all debt investments
as of December 31, 2024, including amortization of deferred debt origination fees and accretion of original issue
discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual
status, and are weighted based upon the principal amount of each applicable debt investment as of December 31, 2024.
The weighted-average annual effective yield on our debt portfolio as of December 31, 2024, including debt
investments on non-accrual status, was 12.3% for our LMM portfolio, 11.5% for our Private Loan portfolio and 10.1%
for our Middle Market portfolio. The weighted-average annual effective yield is not reflective of what an investor in
shares of our common stock will realize on its investment because it does not reflect changes in the market value of
our stock, our utilization of debt capital in our capital structure, our expenses or any sales load paid by an investor.
(c) The average EBITDA is calculated using a simple average for the LMM portfolio and a weighted-average for the
Private Loan and Middle Market portfolios. These calculations exclude certain portfolio companies, including five
LMM portfolio companies, five Private Loan portfolio companies and two Middle Market portfolio companies, as
EBITDA is not a meaningful valuation metric for our investments in these portfolio companies, and those portfolio
companies whose primary purpose is to own real estate and those portfolio companies whose primary operations have
ceased and only residual value remains.
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As of December 31, 2023
LMM (a)
Private Loan
Middle Market
(dollars in millions)
Number of portfolio companies
80
87
23
Fair value
$
2,273.0
$
1,453.5
$
243.7
Cost
$
1,782.9
$
1,470.1
$
294.4
Debt investments as a % of portfolio (at cost)
72.0 %
94.7 %
91.4 %
Equity investments as a % of portfolio (at cost)
28.0 %
5.3 %
8.6 %
% of debt investments at cost secured by first priority lien
99.2 %
100.0 %
99.1 %
Weighted-average annual effective yield (b)
13.0 %
12.9 %
12.5 %
Average EBITDA (c)
$
8.2
$
27.2
$
64.2
___________________________
(a) As of December 31, 2023, we had equity ownership in all of our LMM portfolio companies, and the average fully
diluted equity ownership in those portfolio companies was 40%.
(b) The weighted-average annual effective yields were computed using the effective interest rates for all debt investments
as of December 31, 2023, including amortization of deferred debt origination fees and accretion of original issue
discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual
status, and are weighted based upon the principal amount of each applicable debt investment as of December 31, 2023.
The weighted-average annual effective yield on our debt portfolio as of December 31, 2023, including debt
investments on non-accrual status, was 12.9% for our LMM portfolio, 12.5% for our Private Loan portfolio and 10.8%
for our Middle Market portfolio. The weighted-average annual effective yield is not reflective of what an investor in
shares of our common stock will realize on its investment because it does not reflect changes in the market value of
our stock, our utilization of debt capital in our capital structure, our expenses or any sales load paid by an investor.
(c) The average EBITDA is calculated using a simple average for the LMM portfolio and a weighted-average for the
Private Loan and Middle Market portfolios. These calculations exclude certain portfolio companies, including two
LMM portfolio companies and two Private Loan portfolio companies, as EBITDA is not a meaningful valuation metric
for our investments in these portfolio companies, and those portfolio companies whose primary purpose is to own real
estate.
For the years ended December 31, 2024 and 2023, we achieved a total return on investments of 17.9% and 16.3%,
respectively. Total return on investments is calculated using the interest, dividend and fee income, as well as the realized
and unrealized change in fair value of the Investment Portfolio for the specified period. Our total return on investments is
not reflective of what an investor in shares of our common stock will realize on its investment because it does not reflect
changes in the market value of our stock, our utilization of debt capital in our capital structure, our expenses or any sales
load paid by an investor.
As of December 31, 2024, we had Other Portfolio investments in 31 entities, spread across 12 investment
managers, collectively totaling $124.1 million in fair value and $122.5 million in cost basis and which comprised 2.5% and
2.9% of our Investment Portfolio at fair value and cost, respectively. As of December 31, 2023, we had Other Portfolio
investments in 30 entities, spread across 13 investment managers, collectively totaling $142.0 million in fair value and
$149.1 million in cost basis and which comprised 3.3% and 4.0% of our Investment Portfolio at fair value and cost,
respectively.
As previously discussed in Item 1. Business — Overview of Our Business of this Annual Report on Form 10-K, we
hold an investment in the External Investment Manager, a wholly-owned subsidiary that is treated as a portfolio
investment. As of December 31, 2024, this investment had a fair value of $246.0 million and a cost basis of $29.5 million,
which comprised 5.0% and 0.7% of our Investment Portfolio at fair value and cost, respectively. As of December 31, 2023,
this investment had a fair value of $174.1 million and a cost basis of $29.5 million, which comprised 4.1% and 0.8% of our
Investment Portfolio at fair value and cost, respectively.
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CRITICAL ACCOUNTING POLICIES
The preparation of financial statements and related disclosures in conformity with generally accepted accounting
principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, and contingent assets and liabilities at the date of the financial statements, and revenues and expenses
during the periods reported. Actual results could materially differ from those estimates. Critical accounting policies are
those that require management to make subjective or complex judgments about the effect of matters that are inherently
uncertain and may change in subsequent periods. Changes that may be required in the underlying assumptions or estimates
in these areas could have a material impact on our current and future financial condition and results of operations.
Management has discussed the development and selection of each critical accounting policy and estimate with the
Audit Committee of the Board of Directors. Our critical accounting policies and estimates include the Investment Portfolio
Valuation and Revenue Recognition policies described below. Our significant accounting policies are described in greater
detail in Note B — Summary of Significant Accounting Policies to the consolidated financial statements included in Item 8.
Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
Investment Portfolio Valuation
The most significant determination inherent in the preparation of our consolidated financial statements is the
valuation of our Investment Portfolio and the related amounts of unrealized appreciation and depreciation. We consider this
determination to be a critical accounting estimate, given the significant judgments and subjective measurements required.
As of both December 31, 2024 and 2023, our Investment Portfolio valued at fair value represented 96% of our total assets.
We are required to report our investments at fair value. We follow the provisions of FASB ASC 820, Fair Value
Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair
value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure
requirements for fair value measurements. ASC 820 requires us to assume that the portfolio investment is to be sold in the
principal market to independent market participants, which may be a hypothetical market. Market participants are defined
as buyers and sellers in the principal market that are independent, knowledgeable and willing and able to transact. See
Note B.1. — Summary of Significant Accounting Policies — Valuation of the Investment Portfolio included in Item 8.
Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K for a detailed discussion
of our Investment Portfolio valuation process and procedures.
Due to the inherent uncertainty in the valuation process, our determination of fair value for our Investment
Portfolio may differ materially from the values that would have been determined had a ready market for the securities
existed. In addition, changes in the market environment, portfolio company performance and other events that may occur
over the lives of the investments may cause the gains or losses ultimately realized on these investments to be materially
different than the valuations currently assigned. We determine the fair value of each individual investment and record
changes in fair value as unrealized appreciation or depreciation.
Rule 2a-5 under the 1940 Act permits a BDC’s board of directors to designate its executive officers or investment
adviser as a valuation designee to determine the fair value for its investment portfolio, subject to the active oversight of the
board. Our Board of Directors has approved policies and procedures pursuant to Rule 2a-5 (the “Valuation Procedures”)
and has designated a group of our executive officers to serve as the Board of Directors’ valuation designee. We believe our
Investment Portfolio as of December 31, 2024 and 2023 approximates fair value as of those dates based on the markets in
which we operate and other conditions in existence on those reporting dates.
Revenue Recognition
Interest and Dividend Income
We record interest and dividend income on the accrual basis to the extent amounts are expected to be collected.
Dividend income is recorded as dividends are declared by the portfolio company or at the point an obligation exists for the
portfolio company to make a distribution. We evaluate accrued interest and dividend income periodically for collectability.
When a loan or debt security becomes 90 days or more past due, and if we otherwise do not expect the debtor to be able to
service its debt obligation, we will generally place the loan or debt security on non-accrual status and cease recognizing
interest income on that loan or debt security until the borrower has demonstrated the ability and intent to pay contractual
amounts due. If a loan or debt security’s status significantly improves regarding the debtor’s ability to service the debt
obligation, or if a loan or debt security is sold or written off, we remove it from non-accrual status.
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Fee Income
We may periodically provide services, including structuring and advisory services to our portfolio companies or
other third parties. For services that are separately identifiable and evidence exists to substantiate fair value, fee income is
recognized as earned, which is generally when the investment or other applicable transaction closes. Fees received in
connection with debt financing transactions for services that do not meet these criteria are treated as debt origination fees
and are generally deferred and accreted into income over the life of the financing.
Payment-in-Kind (“PIK”) Interest and Cumulative Dividends
We hold certain debt and preferred equity instruments in our Investment Portfolio that contain PIK interest and
cumulative dividend provisions. The PIK interest, computed at the contractual rate specified in each debt agreement, is
periodically added to the principal balance of the debt and is recorded as interest income. Thus, the actual collection of this
interest may be deferred until the time of debt principal repayment. Cumulative dividends are recorded as dividend income,
and any dividends in arrears are added to the balance of the preferred equity investment. The actual collection of these
dividends in arrears may be deferred until such time as the preferred equity is redeemed or sold. To maintain RIC tax
treatment (as discussed in Note B.10. — Summary of Significant Accounting Policies — Income Taxes included in Item 8.
Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K), these non-cash sources
of income may need to be paid out to stockholders in the form of distributions, even though we may not have collected the
PIK interest and cumulative dividends in cash. We stop accruing PIK interest and cumulative dividends and write off any
accrued and uncollected interest and dividends in arrears when we determine that such PIK interest and dividends in arrears
are no longer collectible. For the years ended December 31, 2024, 2023 and 2022 (i) 4.2%, 2.2% and 1.4%, respectively, of
our total investment income was attributable to PIK interest income not paid currently in cash and (ii) 0.5%, 0.3% and
0.5%, respectively, of our total investment income was attributable to cumulative dividend income not paid currently in
cash.
INVESTMENT PORTFOLIO COMPOSITION
The following tables summarize the composition of our total combined LMM, Private Loan and Middle Market
portfolio investments at cost and fair value by type of investment as a percentage of the total combined LMM, Private Loan
and Middle Market portfolio investments as of December 31, 2024 and 2023 (this information excludes Other Portfolio
investments and the External Investment Manager).
Cost:
December 31, 2024
December 31, 2023
First lien debt
82.9 %
82.7 %
Equity
16.4
16.8
Second lien debt
0.2
0.1
Equity warrants
0.3
0.2
Other
0.2
0.2
100.0 %
100.0 %
Fair Value:
December 31, 2024
December 31, 2023
First lien debt
71.4 %
71.6 %
Equity
27.8
27.8
Second lien debt
0.2
0.2
Equity warrants
0.4
0.2
Other
0.2
0.2
100.0 %
100.0 %
Our LMM, Private Loan and Middle Market portfolio investments carry a number of risks including: (1) investing
in companies which may have limited operating histories and financial resources; (2) holding investments that generally are
not publicly traded and which may be subject to legal and other restrictions on resale; and (3) other risks common to
investing in below investment-grade debt and equity investments in our Investment Portfolio. Please see Item 1A. Risk
Factors — Risks Related to our Investments contained in this Annual Report on Form 10-K for a more complete discussion
of the risks involved with investing in our Investment Portfolio.
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PORTFOLIO ASSET QUALITY
We utilize an internally developed investment rating system to rate the performance of each LMM, Private Loan
and Middle Market portfolio company and to monitor our expected level of returns on each of our LMM, Private Loan and
Middle Market investments in relation to our expectations for the portfolio company. The investment rating system takes
into consideration various factors, including, but not limited to, each investment’s expected level of returns, the
collectability of our debt investments and the ability to receive a return of the invested capital in our equity investments,
comparisons to competitors and other industry participants, the portfolio company’s future outlook and other factors that
are deemed to be significant to the portfolio company.
As of December 31, 2024, investments on non-accrual status comprised 0.9% of our total Investment Portfolio at
fair value and 3.5% at cost. As of December 31, 2023, investments on non-accrual status comprised 0.6% of our total
Investment Portfolio at fair value and 2.3% at cost.
The operating results of our portfolio companies are impacted by changes in the broader fundamentals of the
United States economy. In periods during which the United States economy contracts, it is likely that the financial results
of small to mid-sized companies, like those in which we invest, could experience deterioration or limited growth from
current levels, which could ultimately lead to difficulty in meeting their debt service requirements, to an increase in
defaults on our debt investments or in realized losses on our investments and to difficulty in maintaining historical dividend
payment rates and unrealized appreciation on our equity investments. Consequently, we can provide no assurance that the
performance of certain portfolio companies will not be negatively impacted by future economic cycles or other conditions,
which could also have a negative impact on our future results.
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DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
Set forth below is a comparison of the results of operations and changes in financial condition for the years ended
December 31, 2024 and 2023. The comparison of, and changes between, the fiscal years ended December 31, 2023 and
2022 can be found within Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which is
incorporated herein by reference.
Comparison of the years ended December 31, 2024 and 2023
Year Ended
December 31,
Net Change
2024
2023
Amount
%
(dollars in thousands)
Total investment income
$
541,026 $
500,385 $
40,641
8 %
Total expenses
(185,967)
(161,366)
(24,601)
15 %
Net investment income
355,059
339,019
16,040
5 %
Net realized gain (loss)
45,998
(120,507)
166,505
NM
Net unrealized appreciation
137,656
232,577
(94,921)
NM
Income tax provision
(30,633)
(22,642)
(7,991)
NM
Net increase in net assets resulting from operations
$
508,080 $
428,447 $
79,633
19 %
Year Ended
December 31,
Net Change
2024
2023
Amount
%
(dollars in thousands, except per share amounts)
Net investment income
$
355,059 $
339,019 $
16,040
5 %
Share-based compensation expense
18,793
16,520
2,273
14 %
Deferred compensation expense
1,117
1,249
(132)
NM
Distributable net investment income (a)
$
374,969 $
356,788 $
18,181
5 %
Net investment income per share—Basic and diluted
$
4.09 $
4.14 $
(0.05)
(1) %
Distributable net investment income per share—Basic and
diluted (a)
$
4.32 $
4.36 $
(0.04)
(1) %
___________________________
NM — Net Change % not meaningful
(a) Distributable net investment income is net investment income as determined in accordance with U.S. GAAP,
excluding the impacts of share-based compensation expense and deferred compensation expense or benefit. We
believe presenting distributable net investment income and the related per share amounts is useful and appropriate
supplemental disclosure for analyzing our financial performance since share-based compensation does not require
settlement in cash and deferred compensation expense or benefit does not result in a net cash impact to Main Street
upon settlement. However, distributable net investment income is a non-U.S. GAAP measure and should not be
considered as a replacement for net investment income or other earnings measures presented in accordance with U.S.
GAAP and should be reviewed only in connection with such U.S. GAAP measures in analyzing our financial
performance. A reconciliation of net investment income in accordance with U.S. GAAP to distributable net investment
income is detailed in the table above.
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56
Investment Income
Total investment income for the year ended December 31, 2024 was $541.0 million, an 8% increase from the
$500.4 million of total investment income for the prior year. The following table provides a summary of the changes in the
comparable period activity.
Year Ended
December 31,
Net Change
2024
2023
Amount
%
(dollars in thousands)
Interest income
$
420,651 $
390,737 $
29,914
8 % (a)
Dividend income
97,231
94,796
2,435
3 % (b)
Fee income
23,144
14,852
8,292
56 % (c)
Total investment income
$
541,026 $
500,385 $
40,641
8 % (d)
___________________________
(a) The increase in interest income was primarily due to (i) higher average levels of income producing Investment
Portfolio debt investments and (ii) increases in weighted-average interest rates on floating rate Investment Portfolio
debt investments primarily resulting from increases in market spreads, partially offset by an increase in investments on
non-accrual status.
(b) The increase in dividend income from Investment Portfolio equity investments was primarily a result of an increase of
$3.8 million in dividend income from our LMM portfolio companies, partially offset by (i) a decrease of $0.8 million
in dividend income from our Other Portfolio investments and (ii) a decrease of $0.6 million in dividend income from
our Private Loan portfolio companies.
(c) The increase in fee income was primarily related to (i) a $5.7 million increase in fees related to increased investment
activity and (ii) a $2.6 million increase from the refinancing and prepayment of debt investments.
(d) The increase in total investment income includes a net reduction of $3.4 million in certain income considered less
consistent or non-recurring, including (i) a $6.2 million decrease in such dividend income and (ii) a $0.4 million
decrease in accelerated interest income from accelerated prepayment, repricing and other activity related to certain
Investment Portfolio debt investments, partially offset by a $3.3 million increase in such fee income.
Expenses
Total expenses for the year ended December 31, 2024 were $186.0 million, a 15% increase from $161.4 million in
the prior year. The following table provides a summary of the changes in the comparable period activity.
Year Ended
December 31,
Net Change
2024
2023
Amount
%
(dollars in thousands)
Cash compensation
$
46,369 $
45,030 $
1,339
3 % (a)
Deferred compensation plan expense
1,117
1,249
(132)
(11) %
Compensation
47,486
46,279
1,207
3 %
General and administrative
19,347
18,042
1,305
7 % (b)
Interest
123,429
102,575
20,854
20 % (c)
Share-based compensation
18,793
16,520
2,273
14 % (d)
Gross expenses
209,055
183,416
25,639
14 %
Expenses allocated to the External Investment Manager
(23,088)
(22,050)
(1,038)
5 % (e)
Total expenses
$
185,967 $
161,366 $
24,601
15 %
___________________________
(a) The increase in cash compensation was primarily attributable to (i) increased base compensation rates and (ii)
increased headcount to support our growing investment portfolio and asset management activities.
(b) The increase in general and administrative expense was primarily attributable to an increase in business development
activities, technology costs and professional fees.
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57
(c) The increase in interest expense was primarily related to (i) an increased weighted-average interest rate on our debt
obligations resulting primarily from the issuance of the March 2029 Notes and the June 2027 Notes and the repayment
at maturity of the May 2024 Notes (each as defined in the Liquidity and Capital Resources section below) and (ii) an
increase in average borrowings outstanding of unsecured notes used to fund a portion of the growth of our Investment
Portfolio, partially offset by a decrease in average borrowing outstanding on our floating rate multi-year revolving
credit facility (the “Corporate Facility”) and special purpose vehicle revolving credit facility (the “SPV Facility” and,
together with the Corporate Facility, the “Credit Facilities”).
(d) The increase in share-based compensation expense was primarily attributable to an increase in incentive based grants
related to incentive compensation awards issued in April 2024.
(e) The increase in expenses allocated to the External Investment Manager was primarily related to (i) increased overall
operating costs at Main Street, (ii) the positive operating results from the assets managed for clients of the External
Investment Manager and (iii) an increase in assets under management.
Net Investment Income
Net investment income for the year ended December 31, 2024 increased 5% to $355.1 million, or $4.09 per share,
compared to net investment income of $339.0 million, or $4.14 per share, in 2023. The increase in net investment income
was principally attributable to the increase in total investment income, partially offset by higher operating expenses, both as
discussed above. Net investment income per share reflects these changes and the impact of the increase in weighted-
average shares outstanding for the year ended December 31, 2024, primarily due to shares issued through our (i) at-the-
market offering program (the “ATM Program”), (ii) dividend reinvestment plan and (iii) equity incentive plans. The
decrease in net investment income on a per share basis includes a $0.05 per share decrease in investment income
considered less consistent or non-recurring in nature.
Distributable Net Investment Income
Distributable net investment income for the year ended December 31, 2024 increased 5% to $375.0 million, or
$4.32 per share, compared to $356.8 million, or $4.36 per share, in 2023. The increase in distributable net investment
income was primarily due to the increased level of total investment income, partially offset by higher operating expenses,
excluding the impact of share-based compensation expense, as discussed above, and deferred compensation expense. The
decrease in distributable net investment income per share reflects the impact of the increase in weighted-average shares
outstanding for the year ended December 31, 2024, as discussed above. The decrease in distributable net investment
income on a per share basis includes a $0.05 per share decrease in investment income considered less consistent or non-
recurring in nature.
Net Realized Gain (Loss)
The following table provides a summary of the primary components of the total net realized gain on investments
of $46.0 million for the year ended December 31, 2024.
Year Ended December 31, 2024
Full Exits
Partial Exits
Restructures
Other (a)
Total
Net Gain/
(Loss)
# of
Investments
Net Gain/
(Loss)
# of
Investments
Net Gain/
(Loss)
# of
Investments
Net Gain/
(Loss)
Net Gain/
(Loss)
(dollars in thousands)
LMM portfolio
$ 36,983
3
$ 10,365
1
$ (2,301)
1
$
120 $ 45,167
Private Loan portfolio
20,482
2
—
—
(7,227)
2
605
13,860
Middle Market portfolio
(8,272)
2
—
—
(876)
1
320
(8,828)
Other Portfolio
(7,107)
1
1,985
1
—
—
793
(4,329)
Short-term portfolio
—
—
—
—
—
—
128
128
Total net realized gain
(loss)
$ 42,086
8
$ 12,350
2
$ (10,404)
4
$ 1,966 $ 45,998
___________________________
(a) Other activity includes realized gains and losses from transactions involving 40 portfolio companies which are not
considered to be significant individually or in the aggregate.
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58
The following table provides a summary of the primary components of the total net realized loss on investments of
$120.5 million for the year ended December 31, 2023.
Year Ended December 31, 2023
Full Exits
Partial Exits
Restructures
Other (a)
Total
Net Gain/
(Loss)
# of
Investments
Net Gain/
(Loss)
# of
Investments
Net Gain/
(Loss)
# of
Investments
Net Gain/
(Loss)
Net Gain/
(Loss)
(dollars in thousands)
LMM portfolio
$ (44,418)
3
$ (29,526)
1
$ (3,597)
1
$
283 $ (77,258)
Private Loan portfolio
1,777
3
—
—
(31,453)
2
(440)
(30,116)
Middle Market portfolio
(6,386)
2
—
—
(13,520)
2
(289)
(20,195)
Other Portfolio
—
—
6,629
4
—
—
468
7,097
Short-term portfolio
—
—
—
—
—
—
(35)
(35)
Total net realized gain
(loss)
$ (49,027)
8
$ (22,897)
5
$ (48,570)
5
$
(13) $ (120,507)
___________________________
(a) Other activity includes realized gains and losses from transactions involving 35 portfolio companies which are not
considered to be significant individually or in the aggregate.
Net Unrealized Appreciation (Depreciation)
The following table provides a summary of the total net unrealized appreciation of $137.7 million for the year
ended December 31, 2024.
Year Ended December 31, 2024
LMM (a)
Private
Loan
Middle
Market
Other
Total
(dollars in thousands)
Accounting reversals of net unrealized (appreciation)
depreciation recognized in prior periods due to net
realized (gains / income) losses recognized during
the current period
$ (47,858) $ (17,464) $
9,704 $
4,199
$ (51,419)
Net unrealized appreciation (depreciation) relating to
portfolio investments
122,827
(12,649)
1,314
77,583 (b) 189,075
Total net unrealized appreciation (depreciation)
relating to portfolio investments
$ 74,969 $ (30,113) $ 11,018 $ 81,782
$ 137,656
___________________________
(a) Includes unrealized appreciation on 44 LMM portfolio investments and unrealized depreciation on 32 LMM portfolio
investments.
(b) Other primarily consists of (i) $71.9 million of unrealized appreciation relating to the External Investment Manager,
(ii) $4.4 million of net unrealized appreciation relating to the Other Portfolio and (iii) $1.1 million of net unrealized
appreciation relating to the assets of the deferred compensation plan.
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The following table provides a summary of the total net unrealized appreciation of $232.6 million for the year
ended December 31, 2023.
Year Ended December 31, 2023
LMM (a)
Private
Loan
Middle
Market
Other
Total
(dollars in thousands)
Accounting reversals of net unrealized
(appreciation) depreciation recognized in prior
periods due to net realized (gains / income) losses
recognized during the current period
$
76,331 $
28,703 $
20,274 $
(7,060)
$ 118,248
Net unrealized appreciation (depreciation) relating to
portfolio investments
73,209
(16,974)
1,609
56,485 (b)
114,329
Total net unrealized appreciation (depreciation)
relating to portfolio investments
$ 149,540 $
11,729 $
21,883 $
49,425
$ 232,577
___________________________
(a) Includes unrealized appreciation on 36 LMM portfolio investments and unrealized depreciation on 37 LMM portfolio
investments.
(b) Other includes (i) $51.1 million of unrealized appreciation relating to the External Investment Manager, (ii) $4.1
million of net unrealized appreciation relating to the Other Portfolio and (iii) $1.2 million of net unrealized
appreciation relating to the assets of the deferred compensation plan.
Income Tax Provision
The income tax provision for the year ended December 31, 2024 of $30.6 million principally consisted of (i) a
deferred tax provision of $22.3 million, which is primarily the result of the net activity relating to our portfolio investments
held in our Taxable Subsidiaries, including changes in loss and interest expense carryforwards, changes in net unrealized
appreciation/depreciation and other temporary book-tax differences and (ii) a current tax provision of $8.4 million related
to a $5.9 million provision for excise tax on our estimated undistributed taxable income and a $2.5 million provision for
current U.S. federal and state income taxes.
The income tax provision for the year ended December 31, 2023 of $22.6 million principally consisted of (i) a
deferred tax provision of $16.0 million and (ii) a current tax provision of $6.6 million primarily related to a $3.4 million
provision for current U.S. federal and state income taxes and a $3.2 million provision for excise tax on our estimated
undistributed taxable income.
Net Increase in Net Assets Resulting from Operations
The net increase in net assets resulting from operations for the year ended December 31, 2024 was $508.1 million,
or $5.85 per share, compared to $428.4 million, or $5.23 per share, during the year ended December 31, 2023. The tables
above provide a summary of the reasons for the change in net increase in net assets resulting from operations for the year
ended December 31, 2024 as compared to the year ended December 31, 2023.
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LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
For the year ended December 31, 2024, we realized a net increase in cash and cash equivalents of $18.2 million,
which is the net result of $87.1 million of cash used in our operating activities and $105.3 million of cash provided by our
financing activities.
The $87.1 million of cash used in our operating activities resulted primarily from cash uses totaling $1.576 billion
for the funding of new and follow-on portfolio investments, partially offset by (i) cash proceeds totaling $1.157 billion
from the sales and repayments of debt investments and sales and return of capital from equity investments, (ii) cash flows
that we generated from the operating profits earned totaling $332.8 million, which is our distributable net investment
income, excluding the non-cash effects of the accretion of unearned income, payment-in-kind interest income, cumulative
dividends and the amortization expense for deferred financing costs and (iii) $8.5 million in cash proceeds related to other
assets and liabilities.
The $105.3 million of cash provided by our financing activities principally consisted of (i) $400.0 million in cash
proceeds from the issuance of the June 2027 Notes, (ii) $350.0 million in cash proceeds from the issuance of the March
2029 Notes, (iii) $122.6 million in net cash proceeds from equity offerings from our ATM Program, (iv) $63.8 million in
proceeds from the issuance of SBIC debentures and (v) $24.0 million in net borrowings from our Credit Facilities, partially
offset by (i) $450.0 million on the repayment of the May 2024 Notes, (ii) $320.4 million in dividends paid to our
stockholders, (iii) $63.8 million in repayments of SBIC debentures, (iv) $13.6 million in debt issuance costs and (v) $7.3
million in purchases of vested stock for employee payroll tax withholdings.
For the year ended December 31, 2023, we realized a net increase in cash and cash equivalents of $10.9 million,
which is the net result of $285.3 million of cash provided by our operating activities and $274.4 million of cash used in our
financing activities.
The $285.3 million of cash provided by our operating activities resulted primarily from (i) cash proceeds totaling
$826.0 million from the sales and repayments of debt investments and sales of and return on capital from equity
investments and (ii) cash flows that we generated from the operating profits earned totaling $328.4 million, which is our
distributable net investment income, excluding the non-cash effects of the accretion of unearned income, payment-in-kind
interest income, cumulative dividends and the amortization expense for deferred financing costs, partially offset by cash
uses totaling $867.0 million for the funding of new and follow-on portfolio company investments.
The $274.4 million of cash used in our financing activities principally consisted of (i) $271.6 million in dividends
paid to stockholders of our common stock, (ii) $247.0 million in net repayments from our Credit Facilities, (iii) $6.0
million for purchases of vested restricted stock from employees to satisfy their tax withholding requirements upon the
vesting of such restricted stock and (iv) $3.5 million in debt issuance costs, partially offset by (i) $203.7 million in net cash
proceeds from equity offerings from our ATM Program (as described below) and direct stock purchase plan and (ii) $50.0
million in cash proceeds from the issuance of additional aggregate principal amount of the December 2025 Notes (as
defined below).
Capital Resources
As of December 31, 2024, we had $78.3 million in cash and cash equivalents and $1.326 billion of unused
capacity under our Credit Facilities which we maintain to support our investment and operating activities. As of
December 31, 2024, our NAV totaled $2.798 billion, or $31.65 per share.
As of December 31, 2024, we had $208.0 million outstanding and $902.0 million of undrawn commitments under
our Corporate Facility, and $176.0 million outstanding and $424.0 million of undrawn commitments under our SPV
Facility, both of which we estimated approximated fair value. Availability under our Credit Facilities is subject to certain
leverage and borrowing base limitations, various covenants, reporting requirements and other customary requirements for
similar credit facilities, as described below.
In June 2024, we entered into an amendment to our Corporate Facility to, among other things: (i) increase the
revolving commitments from $995.0 million to $1.11 billion, (ii) increase the accordion feature from up to a total of $1.4
billion to up to a total of $1.665 billion and (iii) extend the revolving period and the final maturity date through June 2028
and June 2029, respectively, on $1.035 billion of revolving commitments, with the original revolving period and final
maturity date of August 2026 and August 2027, respectively, on $0.075 billion of revolving commitments remaining the
same.
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In September 2024, we entered into an amendment to our SPV Facility, to among other things: (i) increase the
total commitments from $430.0 million to $600.0 million, (ii) increase the accordion feature to up to a total of $800.0
million, (iii) extend the revolving period from November 2025 to September 2027, (iv) extend the final maturity date from
November 2027 to September 2029 and (v) decrease the interest rate to one-month term SOFR plus an applicable margin
of (a) 2.35% during the revolving period (from 2.50% plus a 0.10% credit spread adjustment, or 2.60%), (b) 2.475% for the
first year following the end of the revolving period (from 2.625%) and (c) 2.60% for the second year following the end of
the revolving period (from 2.75%).
For further information on our Credit Facilities, including key terms and financial covenants, refer to Note E —
Debt included in Item 8. Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
In January 2021, we issued $300.0 million in aggregate principal amount of 3.00% unsecured notes due July 14,
2026 (the “July 2026 Notes”). In October 2021, we issued an additional $200.0 million in aggregate principal amount of
the July 2026 Notes. The outstanding aggregate principal amount of the July 2026 Notes was $500.0 million as of both
December 31, 2024 and 2023.
In June 2024, we issued $300.0 million in aggregate principal amount of 6.50% unsecured notes due June 4, 2027
(the “June 2027 Notes”). In September 2024, we issued an additional $100.0 million in aggregate principal amount of the
June 2027 Notes at a public offering price of 102.134% resulting in a yield-to-maturity of 5.617% on such issuance. The
June 2027 Notes issued in September 2024 have identical terms as, and are a part of a single series with, the June 2027
Notes issued in June 2024. The outstanding aggregate principal amount of the June 2027 Notes was $400.0 million and
bear interest at a rate of 6.50% per year with a yield-to-maturity of approximately 6.34% as of December 31, 2024.
In January 2024, we issued $350.0 million in aggregate principal amount of 6.95% unsecured notes due March 1,
2029 (the “March 2029 Notes”). The outstanding aggregate principal amount of the March 2029 Notes was $350.0 million
as of December 31, 2024.
Through the Funds, we have the ability to issue SBIC debentures guaranteed by the SBA at favorable interest rates
and favorable terms and conditions. Under existing SBIC regulations, SBA-approved SBICs under common control have
the ability to issue debentures guaranteed by the SBA up to a regulatory maximum amount of $350.0 million. On March 1,
2024, we repaid $63.8 million of SBIC debentures that had reached maturity, which reduced our total outstanding SBIC
debentures to $286.2 million. Subsequently, on September 12, 2024, we borrowed an additional $63.8 million of SBIC
debentures, which increased our total outstanding SBIC debentures to $350.0 million. Under existing SBA-approved
commitments, we had $350.0 million of outstanding SBIC debentures guaranteed by the SBA as of December 31, 2024
through our wholly-owned SBICs, which bear a weighted-average annual fixed interest rate of 3.3%, paid semiannually,
and mature ten years from issuance. The first maturity related to our SBIC debentures occurs in March 2027, and the
weighted-average remaining duration is 5.6 years as of December 31, 2024. Debentures guaranteed by the SBA have fixed
interest rates that equal prevailing 10-year Treasury Note rates plus a market spread and have a maturity of ten years with
interest payable semiannually. The principal amount of the debentures is not required to be paid before maturity, but may
be pre-paid at any time with no prepayment penalty. We expect to maintain SBIC debentures under the SBIC program in
the future, subject to periodic repayments and borrowings, in an amount up to the regulatory maximum amount for
affiliated SBIC funds.
In December 2022, we issued $100.0 million in aggregate principal amount of 7.84% Series A unsecured notes
due December 23, 2025 (the “December 2025 Notes”). In February 2023, we issued an additional $50.0 million in
aggregate principal amount of the December 2025 Notes bearing interest at a fixed rate of 7.53% per year. The outstanding
aggregate principal amount of the December 2025 Notes as of December 31, 2024 and 2023 was $150.0 million.
In May 2024, we repaid the entire $450.0 million principal amount of the issued and outstanding 5.20% unsecured
notes (the “May 2024 Notes”).
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We maintain the ATM Program with certain selling agents through which we can sell up to 15,000,000 shares of
our common stock by means of at-the-market offerings from time to time. During the year ended December 31, 2024, we
sold 2,489,275 shares of our common stock at a weighted-average price of $49.75 per share and raised $123.8 million of
gross proceeds under the ATM Program. Net proceeds were $122.2 million after commissions to the selling agents on
shares sold and offering costs. As of December 31, 2024, sales transactions representing 1,678 shares had not settled and
thus were not issued and not included in shares issued and outstanding on the Consolidated Balance Sheets but are included
as outstanding on the Consolidated Statement of Changes in Net Assets, in the weighted-average shares outstanding in the
Consolidated Statements of Operations and in the shares used to calculate the NAV per share. As of December 31, 2024,
2,823,949 shares remained available for sale under the ATM Program. During the year ended December 31, 2023, we sold
5,149,460 shares of our common stock at a weighted-average price of $39.94 per share and raised $205.7 million of gross
proceeds under the ATM Program. Net proceeds were $203.3 million after commissions to the selling agents on shares sold
and offering costs.
We anticipate that we will continue to fund our investment activities through existing cash and cash equivalents,
cash flows generated through our ongoing operating activities, utilization of available borrowings under our Credit
Facilities, and a combination of future issuances of debt and equity capital. Our primary uses of funds will be investments
in portfolio companies, operating expenses, cash distributions to holders of our common stock and repayments of note and
debenture obligations as they come due.
We periodically invest excess cash balances into marketable securities and short-term investments. The primary
investment objective of marketable securities and short-term investments is to generate incremental cash returns on excess
cash balances prior to utilizing those funds for investment in our LMM and Private Loan portfolio investments. Marketable
securities generally consist of money market funds and certificates of deposit with financial institutions. Short-term
portfolio investments consist primarily of investments in secured debt investments and independently rated debt
investments.
If our common stock trades below our NAV per share, we will generally not be able to issue additional common
stock at the market price, unless our stockholders approve such a sale and our Board of Directors makes certain
determinations. We did not seek stockholder authorization to sell shares of our common stock below the then current NAV
per share of our common stock at our 2024 Annual Meeting of Stockholders, and have not sought such authorization since
2012, because our common stock price per share has generally traded significantly above the NAV per share of our
common stock since 2011. We would therefore need future approval from our stockholders to issue shares below the then
current NAV per share.
In order to satisfy the Code requirements applicable to a RIC, we intend to distribute to our stockholders, after
consideration and application of our ability under the Code to carry forward certain excess undistributed taxable income
from one tax year into the next tax year, substantially all of our taxable income.
In addition, as a BDC, we generally are required to meet a coverage ratio, or BDC asset coverage ratio, of total
assets to total senior securities, which include borrowings and any preferred stock we may issue in the future, of at least
200% (or 150% if certain requirements are met). In January 2008, we received an exemptive order from the SEC to
exclude SBA-guaranteed debt securities issued by the Funds and any other wholly-owned subsidiaries of ours which
operate as SBICs from the BDC asset coverage ratio which, in turn, enables us to fund more investments with debt capital.
In May 2022, our stockholders also approved the application of the reduced BDC asset coverage ratio. As a result, the BDC
asset coverage ratio applicable to us decreased from 200% to 150% effective May 3, 2022. As of December 31, 2024, our
BDC asset coverage ratio was 256%.
Although we have been able to secure access to additional liquidity, including through the Credit Facilities, public
and private debt issuances, leverage available through the SBIC program and equity offerings, there is no assurance that
debt or equity capital will be available to us in the future on favorable terms, or at all.
Recently Issued or Adopted Accounting Standards
From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that
are adopted by us as of the specified effective date. We believe that the impact of recently issued standards and any that are
not yet effective will not have a material impact on our consolidated financial statements upon adoption. For a description
of recently issued or adopted accounting standards, see Note B.15. — Summary of Significant Accounting Policies —
Recently Issued or Adopted Accounting Standards included in Item 8. Consolidated Financial Statements and
Supplementary Data of this Annual Report on Form 10-K.
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Inflation
Inflation has not historically had a significant effect on our results of operations in any of the reporting periods
presented herein. However, our portfolio companies have experienced, specifically including over the last few years, as a
result of recent geopolitical events, supply chain and labor issues, and may continue to experience, the increasing impacts
of inflation on their operating results, including periodic escalations in their costs for labor, raw materials and third-party
services and required energy consumption. These issues and challenges related to inflation are receiving significant
attention from our investment teams and the management teams of our portfolio companies as we work to manage these
growing challenges. Prolonged or more severe impacts of inflation to our portfolio companies could continue to affect their
operating profits and, thereby, increase their borrowing costs, and as a result negatively impact their ability to service their
debt obligations and/or reduce their available cash for distributions. In addition, these factors could have a negative effect
on the fair value of our investments in these portfolio companies. The combined impacts therefrom in turn could negatively
affect our results of operations.
Off-Balance Sheet Arrangements
We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet
the financial needs of our portfolio companies. These instruments include commitments to extend credit and fund equity
capital and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the
Consolidated Balance Sheets. As of December 31, 2024, we had a total of $322.2 million in outstanding commitments
comprised of (i) 83 investments with commitments to fund revolving loans that had not been fully drawn or term loans
with additional commitments not yet funded and (ii) nine investments with equity capital commitments that had not been
fully called.
Contractual Obligations
As of December 31, 2024, the future fixed commitments for cash payments in connection with the July 2026
Notes, the June 2027 Notes, the March 2029 Notes, SBIC debentures, the December 2025 Notes and rent obligations under
our office lease for each of the next five years and thereafter are as follows.
2025
2026
2027
2028
2029
Thereafter
Total
(dollars in thousands)
July 2026 Notes
$
— $ 500,000 $
— $
— $
— $
— $
500,000
Interest due on July 2026
Notes
15,000
15,000
—
—
—
—
30,000
June 2027 Notes
—
—
400,000
—
—
—
400,000
Interest due on June 2027
Notes
26,000
26,000
13,000
—
—
—
65,000
March 2029 Notes
—
—
—
— 350,000
—
350,000
Interest due on March 2029
Notes
24,325
24,325
24,325
24,325
12,163
—
109,463
SBIC debentures
—
—
75,000
75,000
—
200,000
350,000
Interest due on SBIC
debentures
11,763
11,554
10,838
8,400
6,357
25,458
74,370
December 2025 Notes
150,000
—
—
—
—
—
150,000
Interest due on December 2025
Notes
11,637
—
—
—
—
—
11,637
Operating Lease Obligation (1)
1,134
1,193
1,214
1,235
1,256
5,576
11,608
Total
$ 239,859 $ 578,072 $ 524,377 $ 108,960 $ 369,776 $ 231,034 $ 2,052,078
___________________________
(1) Operating Lease Obligation means a rent payment obligation under a lease classified as an operating lease and
disclosed pursuant to ASC 842, as may be modified or supplemented.
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As of December 31, 2024, we had $208.0 million in borrowings outstanding under our Corporate Facility, $14.1
million of which is scheduled to mature in August 2027 and $193.9 million of which is scheduled to mature in June 2029,
refer to Note E — Debt included in Item 8. Consolidated Financial Statements and Supplementary Data of this Annual
Report on Form 10-K. As of December 31, 2024, we had $176.0 million in borrowings outstanding under our SPV Facility,
and the SPV Facility is scheduled to mature in September 2029.
Related Party Transactions and Agreements
We have entered into agreements and transactions with the External Investment Manager, MSC Income, the
Private Loan Fund and the Private Loan Fund II, whereby we have made debt and equity investments and receive certain
fees, expense reimbursements and investment income. See Note D — External Investment Manager and Note L — Related
Party Transactions included in Item 8. Consolidated Financial Statements and Supplementary Data of this Annual Report
on Form 10-K for additional information regarding these related party transactions and agreements.
In addition, we have a deferred compensation plan, whereby non-employee directors and certain key employees
may defer receipt of some or all of their cash compensation and directors’ fees, subject to certain limitations. See Note L —
Related Party Transactions included in Item 8. Consolidated Financial Statements and Supplementary Data of this Annual
Report on Form 10-K for additional information regarding the deferred compensation plan.
Recent Developments
In January 2025, MSC Income completed a follow-on public offering of 6,325,000 shares of its common stock
(including the exercise of the underwriters’ overallotment option) at the public offering price of $15.53 per share (the
“MSIF Public Offering”). In connection with the MSIF Public Offering, MSC Income’s shares of common stock began
trading on the New York Stock Exchange under the ticker symbol “MSIF.”
We purchased 289,761 shares of MSC Income common stock in the MSIF Public Offering at the public offering
price of $15.53. Additionally, following the closing of the MSIF Public Offering, we entered into a share purchase plan to
purchase up to $20.0 million in the aggregate of shares of MSC Income common stock in the open market for a twelve-
month period beginning in March 2025, at times when the market price per share of MSC Income common stock is trading
below the most recently reported NAV per share of MSC Income’s common stock by certain pre-determined levels
(including any updates, corrections or adjustments publicly announced by MSC Income to any previously announced NAV
per share). The purchases of shares of MSC Income common stock pursuant to the share purchase plan are intended to
satisfy the conditions of Rule 10b5-1 and Rule 10b-18 under the Exchange Act and will otherwise be subject to applicable
law, including Regulation M, which may prohibit purchases under certain circumstances. MSC Income also entered into a
share repurchase plan to purchase up to $65.0 million in the aggregate of its common stock in the open market with terms
and conditions substantially similar to our share purchase plan for shares of MSC Income common stock, and daily
purchases under the two plans, if any, are expected to be split pro rata (or as close thereto as reasonably possible) between
us and MSC Income based on the respective plan sizes. In connection with our potential acquisition in excess of 3% of
MSC Income’s outstanding shares of common stock as a result of any purchases pursuant to our share purchase plan for
shares of MSC Income common stock or otherwise, we entered into a Fund of Funds Investment Agreement with MSC
Income. The Fund of Funds Investment Agreement provides for the acquisition by us of MSC Income’s shares of common
stock, and MSC Income’s sale of such shares to us, in a manner consistent with the requirements of Rule 12d1-4 under the
1940 Act.
Additionally, in connection with the listing, the External Investment Manager and MSC Income entered into an
Amended and Restated Investment Advisory and Administrative Services Agreement to, among other things, (i) reduce the
annual base management fees payable by MSC Income to 1.5% of its average total assets (including cash and cash
equivalents), payable in arrears (with additional future contractual reductions based upon changes to MSC Income’s
investment portfolio composition), (ii) reduce to 17.5% the subordinated incentive fee on pre-incentive fee net investment
income above a specified investment return hurdle rate payable by MSC Income, subject to a 50% / 50% catch-up feature,
(iii) reduce to 17.5% and reset the incentive fee on cumulative net realized capital gains payable by MSC Income and (iv)
establish a cap on the amount of expenses payable by MSC Income relating to certain internal administrative services,
which varies based on the value of MSC Income’s total assets.
In February 2025, we declared a supplemental dividend of $0.30 per share payable in March 2025. This
supplemental dividend is in addition to the previously announced regular monthly dividends that we declared of $0.25 per
share for each of January, February and March 2025, or total regular monthly dividends of $0.75 per share for the first
quarter of 2025, resulting in total dividends declared for the first quarter of 2025 of $1.05 per share.
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In February 2025, we also declared regular monthly dividends of $0.25 per share for each of April, May and June
of 2025. These regular monthly dividends equal a total of $0.75 per share for the second quarter of 2025, representing a
4.2% increase from the regular monthly dividends paid in the second quarter of 2024. Including the regular monthly and
supplemental dividends declared through the second quarter of 2025, we will have paid $44.725 per share in cumulative
dividends since our October 2007 initial public offering.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
We are subject to financial market risks, including changes in interest rates, and changes in interest rates may
affect both our interest expense on the debt outstanding under our Credit Facilities and our interest income from portfolio
investments. Our risk management systems and procedures are designed to identify and analyze our risk, to set appropriate
policies and limits and to continually monitor these risks. Our investment income will be affected by changes in various
interest rate indices, including SOFR and Prime rates, to the extent that any debt investments include floating interest rates.
See Risk Factors — Risks Related to our Business and Structure — We are subject to risks associated with the interest rate
environment and changes in interest rates will affect our cost of capital, net investment income and the value of our
investments. and Risk Factors — Risks Related to Leverage — Because we borrow money, the potential for gain or loss on
amounts invested in us is magnified and may increase the risk of investing in us. included in Item 1A. Risk Factors of this
Annual Report on Form 10-K for more information regarding risks associated with our debt investments and borrowings
that utilize SOFR or Prime as a reference rate.
The majority of our debt investments are made with either fixed interest rates or floating rates that are subject to
contractual minimum interest rates for the term of the investment. As of December 31, 2024, 68% of our debt Investment
Portfolio (at cost) bore interest at floating rates, 95% of which were subject to contractual minimum interest rates. As of
December 31, 2024, 82% of our debt obligations bore interest at fixed rates. Our interest expense will be affected by
changes in the published SOFR rate in connection with our Credit Facilities; however, the interest rates on our outstanding
July 2026 Notes, June 2027 Notes, March 2029 Notes, SBIC Debentures and December 2025 Notes, which collectively
comprise the majority of our outstanding debt, are fixed for the life of such debt. As of December 31, 2024, we had not
entered into any interest rate hedging arrangements. Due to our limited use of derivatives, we have claimed an exclusion
from the definition of the term “commodity pool operator” under the Commodity Exchange Act and, therefore, are not
subject to registration or regulation as a pool operator under such Act. The Company expects to operate as a “limited
derivatives user” under Rule 18f-4 under the 1940 Act. In addition, the investment management and other services
provided by our External Investment Manager also involve floating rate debt investments and floating rate debt obligations,
and as a result the incentive fees earned by our External Investment Manager, and the corresponding benefits to our net
investment income contributions from our External Investment Manager, are subject to change based upon any changes in
floating benchmark index rates.
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The following table shows the approximate annualized increase or decrease in the components of net investment
income due to hypothetical base rate changes in interest rates, assuming no changes in our investments and borrowings, or
in the investments and borrowings related to the investment management and other services provided by our External
Investment Manager, in both cases as of December 31, 2024.
Basis Point Change
Increase
(Decrease)
in Interest
Income
(Increase)
Decrease
in Interest
Expense
Increase (Decrease) in
Net Investment Income
from the External
Investment Manager (1)
Increase
(Decrease) in Net
Investment
Income
Increase
(Decrease) in Net
Investment
Income per Share
(dollars in thousands, except per share amounts)
(200)
$
(45,726) $
7,680 $
(5,435) $
(43,481) $
(0.49)
(175)
(39,980)
6,720
(4,825)
(38,085)
(0.43)
(150)
(34,234)
5,760
(4,215)
(32,689)
(0.37)
(125)
(28,488)
4,800
(3,375)
(27,063)
(0.31)
(100)
(22,742)
3,840
(2,765)
(21,667)
(0.25)
(75)
(16,995)
2,880
(1,925)
(16,040)
(0.18)
(50)
(11,249)
1,920
(1,317)
(10,646)
(0.12)
(25)
(5,563)
960
(724)
(5,327)
(0.06)
25
5,496
(960)
568
5,104
0.06
50
10,993
(1,920)
1,136
10,209
0.12
75
16,489
(2,880)
1,565
15,174
0.17
100
21,987
(3,840)
1,679
19,826
0.22
125
27,490
(4,800)
1,793
24,483
0.28
150
32,992
(5,760)
1,907
29,139
0.33
175
38,495
(6,720)
2,021
33,796
0.38
200
43,997
(7,680)
2,135
38,452
0.43
___________________________
(1) Main Street’s total contribution from the External Investment Manager is based on the performance of assets managed
by the External Investment Manager (as discussed in Note D — External Investment Manager included in Item 8.
Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K), and any related
cost of debt obligations related to such managed assets, which may fluctuate depending on changes in interest rates.
Although we believe that this analysis is indicative of the impact of interest rate changes to our Net Investment
Income as of December 31, 2024, the analysis does not take into consideration future changes in the credit market, credit
quality or other business or economic developments that could affect our Net Investment Income. Accordingly, we can
offer no assurances that actual results would not differ materially from the analysis above. The hypothetical results assume
that all SOFR and Prime rate changes would be effective on the first day of the period. However, the contractual SOFR and
Prime rate reset dates would vary throughout the period. The majority of our investments, and the investments managed by
our External Investment Manager, are based on contracts which reset quarterly, while our Credit Facilities, and the debt
obligations related to the assets managed by our External Investment Manager, reset monthly. The hypothetical results
would also be impacted by the changes in the amount of outstanding debt under our Credit Facilities (with an increase
(decrease) in the debt outstanding under the Credit Facilities resulting in an (increase) decrease in the hypothetical interest
expense).
Table of contents
67
Item 8. Consolidated Financial Statements and Supplementary Data
Index to Consolidated Financial Statements
Reports of Independent Registered Public Accounting Firm (PCAOB ID Number 248)
69
Consolidated Balance Sheets—As of December 31, 2024 and 2023
72
Consolidated Statements of Operations—For the years ended December 31, 2024, 2023 and 2022
73
Consolidated Statements of Changes in Net Assets—For the years ended December 31, 2024, 2023 and 2022
74
Consolidated Statements of Cash Flows— For the years ended December 31, 2024, 2023 and 2022
75
Consolidated Schedule of Investments—December 31, 2024
76
Consolidated Schedule of Investments—December 31, 2023
108
Notes to Consolidated Financial Statements
141
Consolidated Schedules of Investments in and Advances to Affiliates— For the years ended December 31,
2024 and 2023
188
Table of contents
68
Board of Directors and Stockholders
Main Street Capital Corporation
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of Main Street Capital Corporation (a Maryland
corporation) and subsidiaries (the “Company”), including the consolidated schedules of investments, as of December 31,
2024 and 2023, the related consolidated statements of operations, changes in net assets, and cash flows for each of the three
years in the period ended December 31, 2024 and the related notes and financial statement schedule included under Item
15(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023,
and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in
conformity with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2024, based on
criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (“COSO”), and our report dated February 28, 2025 expressed an unqualified
opinion.
Basis for opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility
is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public
accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our procedures included verification by confirmation of securities as of December 31, 2024 and 2023, by
correspondence with the portfolio companies, agent banks and custodians, or by other appropriate auditing procedures
where replies were not received. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that
our audits provide a reasonable basis for our opinion.
Critical audit matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts
or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial
statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Fair Value of Level 3 Investments
As described further in Note C to the financial statements, the Company’s investments recorded at fair value,
categorized as Level 3 investments within the fair value hierarchy, totaled $4,932,669 thousand at December 31, 2024.
Approximately 98% of these investments have no readily available market values and are measured using significant
unobservable inputs and assumptions, and generally use valuation techniques such as the income and market approach. The
significant unobservable inputs disclosed by management include, among others, weighted-average cost of capital
(“WACC”) inputs and market multiples for equity investments, and risk adjusted discount rates, and percentage of
expected principal recovery for debt investments. Changes in these assumptions could have a significant impact on the
determination of fair value. As such, we identified fair value of Level 3 investments measured using significant
unobservable inputs and assumptions as a critical audit matter.
Table of contents
Report of Independent Registered Public Accounting Firm
69
The principal consideration for our determination that the fair value of Level 3 investments measured using
significant unobservable inputs and assumptions is a critical audit matter is management’s judgement used in identifying
and evaluating significant unobservable inputs which result in estimation uncertainty for the fair value of Level 3
investments. Auditing these investments requires a high degree of subjective auditor judgment, including use of valuation
professionals with specialized skills and knowledge, to evaluate the reasonableness of unobservable inputs and
assumptions.
Our audit procedures related to the fair value of Level 3 investments measured using significant unobservable
inputs and assumptions included the following, among others:
•
We tested the design and operating effectiveness of management’s review controls relating to the Level 3 fair
value measurement of investments. This included identifying and evaluating significant assumptions used in
the estimation of fair value, such as the relevance, adequacy and appropriateness of these significant
assumptions and valuation methods used to determine investment fair value as of the reporting date.
•
With the assistance of internal valuation specialists, we tested management’s process for developing Level 3
investment fair values. For a selection of investments, we assessed the appropriateness of the methods and
significant assumptions used in developing the estimate. The significant assumptions tested by us included,
but were not limited to, the following:
•
enterprise values,
•
WACC,
•
discount rates,
•
forecasted cash flows and long-term growth rates,
•
discount for lack of marketability,
•
market multiples,
•
weighting between valuation techniques,
•
risk adjusted discount factor,
•
market debt yields, or
•
percentage of expected principal recovery
/s/ GRANT THORNTON LLP
We have served as the Company’s auditor since 2007.
Houston, Texas
February 28, 2025
Table of contents
Report of Independent Registered Public Accounting Firm
70
Board of Directors and Stockholders
Main Street Capital Corporation
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of Main Street Capital Corporation (a Maryland
corporation) and subsidiaries (the “Company”) as of December 31, 2024, based on criteria established in the 2013 Internal
Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework
issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended
December 31, 2024, and our report dated February 28, 2025 expressed an unqualified opinion on those financial
statements.
Basis for opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the
Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects. Our audit included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness
of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes
those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls
may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
/s/ GRANT THORNTON LLP
Houston, Texas
February 28, 2025
Table of contents
Report of Independent Registered Public Accounting Firm
71
December 31,
2024
December 31,
2023
ASSETS
Investments at fair value:
Control investments (cost: $1,415,970 and $1,435,131 as of December 31, 2024 and
2023, respectively)
$
2,087,890 $
2,006,698
Affiliate investments (cost: $743,441 and $575,894 as of December 31, 2024 and
2023, respectively)
846,798
615,002
Non-Control/Non-Affiliate investments (cost: $2,077,901 and $1,714,935 as of
December 31, 2024 and 2023, respectively)
1,997,981
1,664,571
Total investments (cost: $4,237,312 and $3,725,960 as of December 31, 2024 and
2023, respectively)
4,932,669
4,286,271
Cash and cash equivalents
78,251
60,083
Interest and dividend receivable and other assets
98,084
89,337
Deferred financing costs (net of accumulated amortization of $14,592 and $12,329 as
of December 31, 2024 and 2023, respectively)
12,337
7,879
Total assets
$
5,121,341 $
4,443,570
LIABILITIES
Credit Facilities
$
384,000 $
360,000
July 2026 Notes (par: $500,000 as of both December 31, 2024 and 2023)
499,188
498,662
June 2027 Notes (par: $400,000 as of December 31, 2024)
399,282
—
March 2029 Notes (par: $350,000 as of December 31, 2024)
347,002
—
SBIC debentures (par: $350,000 as of both December 31, 2024 and 2023)
343,417
344,535
December 2025 Notes (par: $150,000 as of both December 31, 2024 and 2023)
149,482
148,965
May 2024 Notes (par: $450,000 as of December 31, 2023)
—
450,182
Accounts payable and other liabilities
69,631
62,576
Interest payable
23,290
17,025
Dividend payable
22,100
20,368
Deferred tax liability, net
86,111
63,858
Total liabilities
2,323,503
1,966,171
Commitments and contingencies (Note K)
NET ASSETS
Common stock, $0.01 par value per share (150,000,000 shares authorized; 88,398,713
and 84,830,679 shares issued and outstanding as of December 31, 2024 and 2023,
respectively)
884
848
Additional paid-in capital
2,394,492
2,270,549
Total undistributed earnings
402,462
206,002
Total net assets
2,797,838
2,477,399
Total liabilities and net assets
$
5,121,341 $
4,443,570
NET ASSET VALUE PER SHARE
$
31.65 $
29.20
The accompanying notes are an integral part of these consolidated financial statements
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Balance Sheets
(dollars in thousands, except shares and per share amounts)
72
Year Ended December 31,
2024
2023
2022
INVESTMENT INCOME:
Interest, fee and dividend income:
Control investments
$
205,367 $
197,150 $
155,967
Affiliate investments
84,367
69,829
54,963
Non-Control/Non-Affiliate investments
251,292
233,406
165,930
Total investment income
541,026
500,385
376,860
EXPENSES:
Interest
(123,429)
(102,575)
(78,276)
Compensation
(47,486)
(46,279)
(36,543)
General and administrative
(19,347)
(18,042)
(16,050)
Share-based compensation
(18,793)
(16,520)
(13,629)
Expenses allocated to the External Investment Manager
23,088
22,050
12,965
Total expenses
(185,967)
(161,366)
(131,533)
NET INVESTMENT INCOME
355,059
339,019
245,327
NET REALIZED GAIN (LOSS):
Control investments
36,922
(50,532)
(5,822)
Affiliate investments
(4,219)
(18,729)
(3,319)
Non-Control/Non-Affiliate investments
13,295
(51,246)
3,929
Total net realized gain (loss)
45,998
(120,507)
(5,212)
NET UNREALIZED APPRECIATION (DEPRECIATION):
Control investments
117,867
161,793
56,682
Affiliate investments
47,299
33,689
10,314
Non-Control/Non-Affiliate investments
(27,510)
37,095
(42,180)
Total net unrealized appreciation
137,656
232,577
24,816
INCOME TAXES:
Federal and state income, excise and other taxes
(8,380)
(6,633)
(5,199)
Deferred taxes
(22,253) $
(16,009)
(18,126)
Total income tax provision
(30,633)
(22,642)
(23,325)
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS
$
508,080 $
428,447 $
241,606
NET INVESTMENT INCOME PER SHARE—BASIC AND
DILUTED
$
4.09 $
4.14 $
3.29
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS PER SHARE—BASIC AND DILUTED
$
5.85 $
5.23 $
3.24
WEIGHTED-AVERAGE SHARES
OUTSTANDING—BASIC AND DILUTED
86,805,755
81,916,663
74,482,176
The accompanying notes are an integral part of these consolidated financial statements
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Statements of Operations
(dollars in thousands, except shares and per share amounts)
73
Common Stock
Additional
Paid-In
Capital
Total
Undistributed
Earnings
Total Net
Asset Value
Number of
Shares
Par
Value
Balances as of December 31, 2021
70,737,021 $
707 $ 1,736,346 $
51,793 $ 1,788,846
Public offering of common stock, net of offering
costs
6,763,166
67
265,553
—
265,620
Share-based compensation
—
—
13,629
—
13,629
Purchase of vested stock for employee payroll tax
withholding
(116,177)
(1)
(4,942)
—
(4,943)
Dividend reinvestment
625,196
6
24,125
—
24,131
Amortization of directors’ deferred compensation
—
—
519
—
519
Issuance of restricted stock, net of forfeited shares
497,610
5
(5)
—
—
Dividends to stockholders
—
—
466
(221,288)
(220,822)
Reclassification for certain permanent book-to-tax
differences
—
—
(5,160)
5,160
—
Net increase in net assets resulting from operations
—
—
—
241,606
241,606
Balances as of December 31, 2022
78,506,816
$
784 $ 2,030,531 $
77,271 $ 2,108,586
Public offering of common stock, net of offering
costs
5,159,479
52
203,631
—
203,683
Share-based compensation
—
—
16,520
—
16,520
Purchase of vested stock for employee payroll tax
withholding
(151,058)
(1)
(5,949)
—
(5,950)
Dividend reinvestment
765,427
8
30,711
—
30,719
Amortization of directors’ deferred compensation
—
—
434
—
434
Issuance of restricted stock, net of forfeited shares
552,338
5
(5)
—
—
Dividends to stockholders
—
—
623
(305,663)
(305,040)
Reclassification for certain permanent book-to-tax
differences
—
—
(5,947)
5,947
—
Net increase in net assets resulting from operations
—
—
—
428,447
428,447
Balances as of December 31, 2023
84,833,002
$
848 $ 2,270,549 $
206,002 $ 2,477,399
Public offering of common stock, net of offering
costs
2,497,833
25
122,610
—
122,635
Share-based compensation
—
—
18,793
—
18,793
Purchase of vested stock for employee payroll tax
withholding
(155,049)
(2)
(7,333)
—
(7,335)
Dividend reinvestment
721,963
8
35,693
—
35,701
Amortization of directors’ deferred compensation
—
—
424
—
424
Issuance of restricted stock, net of forfeited shares
502,642
5
(5)
—
—
Dividends to stockholders
—
—
717
(358,576)
(357,859)
Reclassification for certain permanent book-to-tax
differences
—
—
(46,956)
46,956
—
Net increase in net assets resulting from operations
—
—
—
508,080
508,080
Balances as of December 31, 2024
88,400,391
$
884 $ 2,394,492 $
402,462 $ 2,797,838
The accompanying notes are an integral part of these consolidated financial statements
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Statements of Changes in Net Assets
(dollars in thousands, except shares)
74
Year Ended
December 31,
2024
2023
2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in net assets resulting from operations
$ 508,080 $ 428,447 $ 241,606
Adjustments to reconcile net increase in net assets resulting from operations to net
cash provided by (used in) operating activities:
Investments in portfolio companies
(1,576,398) (866,997) (1,152,594)
Proceeds from sales and repayments of debt investments in portfolio companies
1,014,088
782,433
608,330
Proceeds from sales and return of capital of equity investments in portfolio
companies
143,396
43,581
71,695
Net unrealized appreciation
(137,656) (232,577)
(24,816)
Net realized (gain) loss
(45,998)
120,507
5,212
Accretion of unearned income
(22,040)
(19,366)
(13,413)
Payment-in-kind interest
(22,761)
(10,997)
(5,352)
Cumulative dividends
(2,506)
(1,344)
(1,770)
Share-based compensation expense
18,793
16,520
13,629
Amortization of deferred financing costs
5,157
3,331
2,863
Deferred tax provision
22,253
16,009
18,126
Changes in other assets and liabilities:
Interest and dividend receivable and other assets
(11,177)
(8,530)
(28,186)
Interest payable
6,265
445
1,654
Accounts payable and other liabilities
8,306
10,062
12,254
Deferred fees and other
5,080
3,798
3,826
Net cash provided by (used in) operating activities
(87,118)
285,322 (246,936)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from public offering of common stock, net of offering costs
122,635
203,683
265,620
Proceeds from public offering of June 2027 Notes
400,000
—
—
Proceeds from public offering of March 2029 Notes
350,000
—
—
Proceeds from public offering of December 2025 Notes
—
50,000
100,000
Dividends paid
(320,427) (271,599) (194,174)
Proceeds from issuance of SBIC debentures
63,800
16,000
—
Repayments of SBIC debentures
(63,800)
(16,000)
—
Redemption of May 2024 Notes
(450,000)
—
—
Redemption of December 2022 Notes
—
— (185,000)
Proceeds from credit facilities
1,920,000
460,000 1,032,000
Repayments on credit facilities
(1,896,000) (707,000) (745,000)
Debt issuance costs, net
(13,587)
(3,494)
(5,075)
Purchases of vested stock for employee payroll tax withholding
(7,335)
(5,950)
(4,943)
Net cash provided by (used in) financing activities
105,286 (274,360)
263,428
Net increase in cash and cash equivalents
18,168
10,962
16,492
CASH AND CASH EQUIVALENTS AS OF BEGINNING OF PERIOD
60,083
49,121
32,629
CASH AND CASH EQUIVALENTS AS OF END OF PERIOD
$
78,251 $
60,083 $
49,121
Supplemental cash flow disclosures:
Interest paid
$ 113,486 $
98,656 $
73,635
Taxes paid
$
8,264 $
8,444 $
6,596
Operating non-cash activities:
Right-of-use assets obtained in exchange for operating lease liabilities
$
379 $
— $
5,449
Non-cash financing activities:
Value of shares issued pursuant to the DRIP
$
35,701 $
30,719 $
24,131
The accompanying notes are an integral part of these consolidated financial statements
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Statements of Cash Flows
(dollars in thousands)
75
Control Investments (5)
Analytical Systems Keco
Holdings, LLC
Manufacturer of Liquid and Gas Analyzers
Secured Debt
(25)
8/16/2019
8/16/2029
$
— $
— $
—
Secured Debt
8/16/2019
13.75%
8/16/2029
4,095
4,048
4,048
Preferred Member Units
5/20/2021
2,427
2,427
5,300
Preferred Member Units
8/16/2019
3,200
3,200
—
Warrants
(27)
8/16/2019
420
8/16/2029
316
—
9,991
9,348
ASC Interests, LLC
Recreational and Educational Shooting
Facility
Secured Debt
(17)
12/31/2019
13.00%
7/31/2024
400
400
400
Secured Debt
(17)
8/1/2013
13.00%
7/31/2024
1,650
1,650
1,598
Preferred Member Units
6/28/2023
178
178
—
Member Units
8/1/2013
1,500
1,500
—
3,728
1,998
ATS Workholding, LLC
(10)
Manufacturer of Machine Cutting Tools and
Accessories
Secured Debt
(14)
11/16/2017
5.00%
3/31/2025
2,383
2,374
113
Secured Debt
(14) (17)
11/16/2017
5.00%
9/1/2024
3,015
2,842
143
Preferred Member Units
11/16/2017
3,725,862
3,726
—
8,942
256
Barfly Ventures, LLC
(10)
Casual Restaurant Group
Secured Debt
10/15/2020
7.00%
10/31/2026
711
711
711
Member Units
10/26/2020
37
1,584
5,860
2,295
6,571
Batjer TopCo, LLC
HVAC Mechanical Contractor
Secured Debt
3/7/2022
10.00%
3/7/2027
450
446
446
Secured Debt
3/7/2022
10.00%
3/7/2027
270
270
270
Secured Debt
3/7/2022
10.00%
3/7/2027
10,575
10,529
10,529
Preferred Stock
(8)
3/7/2022
4,073
4,095
5,160
15,340
16,405
BDB Holdings, LLC
Casual Restaurant Group
Preferred Equity
11/4/2024
18,756,995
19,537
18,920
Bolder Panther Group, LLC
Consumer Goods and Fuel Retailer
Secured Debt
(25)
12/31/2020
12/31/2025
—
—
—
Secured Debt
(9) (22)
12/31/2020
12.55%
SF+
7.99%
10/31/2027
101,643
101,263
101,643
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments
December 31, 2024
(dollars in thousands)
76
Class B Preferred Member
Units
(8)
12/31/2020
140,000
8.00%
14,000
30,520
115,263
132,163
Brewer Crane Holdings, LLC
Provider of Crane Rental and Operating
Services
Secured Debt
(9)
1/9/2018
14.66%
SF+
10.00%
12/31/2025
5,016
5,016
5,016
Preferred Member Units
(8)
1/9/2018
2,950
4,280
4,680
9,296
9,696
Bridge Capital Solutions
Corporation
Financial Services and Cash Flow Solutions
Provider
Warrants
(27)
7/25/2016
82
7/25/2026
2,132
—
Preferred Member Units
(8) (29)
7/25/2016
17,742
1,000
—
3,132
—
Café Brazil, LLC
Casual Restaurant Group
Member Units
(8)
6/9/2006
1,233
1,742
1,200
California Splendor Holdings
LLC
Processor of Frozen Fruits
Secured Debt
3/15/2024
14.00%
4.00%
7/29/2026
1,528
1,506
1,506
Secured Debt
3/30/2018
14.00%
4.00%
7/29/2026
28,908
28,853
28,465
Preferred Member Units
(8)
7/31/2019
8,671
15.00%
15.00%
10,909
10,909
Preferred Member Units
(8)
3/30/2018
8,729
16,402
22,215
57,670
63,095
CBT Nuggets, LLC
Produces and Sells IT Training Certification
Videos
Member Units
(8)
6/1/2006
416
1,300
49,540
Centre Technologies Holdings,
LLC
Provider of IT Hardware Services and
Software Solutions
Secured Debt
(9) (25)
1/4/2019
SF+
9.00%
1/4/2028
—
—
—
Secured Debt
(9)
11/29/2024
13.66%
SF+
9.00%
1/4/2028
25,534
25,492
25,534
Preferred Member Units
1/4/2019
13,883
6,386
12,410
31,878
37,944
Chamberlin Holding LLC
Roofing and Waterproofing Specialty
Contractor
Secured Debt
(9) (25)
2/26/2018
SF+
6.00%
2/26/2026
—
(105)
—
Secured Debt
(9)
2/26/2018
12.74%
SF+
8.00%
2/26/2026
15,620
15,619
15,620
Member Units
(8)
2/26/2018
4,347
11,440
33,110
Member Units
(8) (29)
11/2/2018
1,047,146
1,773
3,550
28,727
52,280
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
77
Charps, LLC
Pipeline Maintenance and Construction
Unsecured Debt
8/26/2020
10.00%
1/31/2026
5,694
5,166
5,694
Preferred Member Units
(8)
2/3/2017
1,829
1,963
15,580
7,129
21,274
Clad-Rex Steel, LLC
Specialty Manufacturer of Vinyl-Clad Metal
Secured Debt
(25)
10/28/2022
1/15/2027
—
—
—
Secured Debt
12/20/2016
9.00%
1/15/2027
6,760
6,724
6,760
Secured Debt
12/20/2016
10.00%
12/20/2036
973
965
973
Member Units
(8)
12/20/2016
717
7,280
10,990
Member Units
(29)
12/20/2016
800
509
950
15,478
19,673
Cody Pools, Inc.
Designer of Residential and Commercial
Pools
Secured Debt
(25)
3/6/2020
12/17/2026
—
(12)
—
Secured Debt
3/6/2020
12.50%
12/17/2026
39,227
39,207
39,227
Preferred Member Units
(8) (29)
3/6/2020
587
8,317
67,810
47,512
107,037
Colonial Electric Company
LLC
Provider of Electrical Contracting Services
Secured Debt
(25)
3/31/2021
3/31/2026
—
—
—
Secured Debt
3/31/2021
12.00%
3/31/2026
14,310
14,272
14,310
Preferred Member Units
(8)
3/31/2021
17,280
7,680
13,570
21,952
27,880
CompareNetworks Topco,
LLC
Internet Publishing and Web Search Portals
Secured Debt
(9)
1/29/2019
13.66%
SF+
9.00%
1/29/2028
2,955
2,903
2,903
Preferred Member Units
1/29/2019
2,250
3,520
11,260
6,423
14,163
Compass Systems & Sales,
LLC
Designer of End-to-End Material Handling
Solutions
Secured Debt
(25)
11/22/2023
11/22/2028
—
(21)
(21)
Secured Debt
11/22/2023
13.50%
11/22/2028
17,200
17,067
17,067
Preferred Equity
11/22/2023
7,454
7,454
7,450
24,500
24,496
Copper Trail Fund
Investments
(12) (13)
Investment Partnership
LP Interests (CTMH, LP)
(30)
7/17/2017
38.75%
500
500
Cybermedia Technologies,
LLC
IT and Digital Services Provider
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
78
Secured Debt
(25)
5/5/2023
5/5/2028
—
—
—
Secured Debt
5/5/2023
13.00%
5/5/2028
27,300
27,116
27,116
Preferred Member Units
(8)
5/5/2023
556
15,000
15,000
42,116
42,116
Datacom, LLC
Technology and Telecommunications
Provider
Secured Debt
3/1/2022
7.50%
12/31/2025
495
493
493
Secured Debt
3/31/2021
10.00%
12/31/2025
8,082
7,947
7,947
Preferred Member Units
3/31/2021
9,000
2,610
240
11,050
8,680
Digital Products Holdings LLC
Designer and Distributor of Consumer
Electronics
Secured Debt
(9)
4/1/2018
14.56%
SF+
10.00%
4/27/2026
12,617
12,561
12,422
Preferred Member Units
(8)
4/1/2018
3,857
9,501
9,835
22,062
22,257
Direct Marketing Solutions,
Inc.
Provider of Omni-Channel Direct Marketing
Services
Secured Debt
(25)
2/13/2018
2/13/2026
—
(31)
—
Secured Debt
12/27/2022
14.00%
2/13/2026
23,902
23,859
23,902
Preferred Stock
2/13/2018
8,400
8,400
17,930
32,228
41,832
Elgin AcquireCo, LLC
Manufacturer and Distributor of Engine and
Chassis Components
Secured Debt
(9) (25)
10/3/2022
SF+
6.00%
10/3/2027
—
(5)
(5)
Secured Debt
10/3/2022
12.00%
10/3/2027
18,069
17,969
17,969
Secured Debt
10/3/2022
9.00%
10/3/2052
6,265
6,207
6,207
Common Stock
10/3/2022
285
5,726
5,730
Common Stock
(29)
10/3/2022
939
1,558
3,050
31,455
32,951
Gamber-Johnson Holdings,
LLC
Manufacturer of Ruggedized Computer
Mounting Systems
Secured Debt
(9) (25)
(34)
6/24/2016
SF+
7.00%
1/1/2028
—
—
—
Secured Debt
(9) (34)
11/22/2024
11.00%
SF+
7.00%
1/1/2028
73,126
72,986
73,126
Member Units
(8)
6/24/2016
9,042
17,692
114,750
90,678
187,876
Garreco, LLC
Manufacturer and Supplier of Dental
Products
Member Units
(8)
7/15/2013
1,200
1,200
2,060
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
79
GRT Rubber Technologies
LLC
Manufacturer of Engineered Rubber
Products
Secured Debt
12/21/2018
10.66%
SF+
6.00%
10/29/2026
3,146
3,140
3,146
Secured Debt
12/19/2014
12.66%
SF+
8.00%
10/29/2026
40,493
40,406
40,493
Member Units
12/19/2014
5,879
13,065
45,890
56,611
89,529
Gulf Publishing Holdings, LLC
Energy Industry Focused Media and
Publishing
Secured Debt
(9) (14)
(25)
9/29/2017
SF+
9.50%
7/1/2027
—
—
—
Secured Debt
(14)
7/1/2022
12.50%
12.50%
7/1/2027
2,400
2,299
1,518
Preferred Equity
7/1/2022
63,720
5,600
—
Member Units
4/29/2016
3,681
3,681
—
11,580
1,518
Harris Preston Fund
Investments
(12) (13)
Investment Partnership
LP Interests (2717 MH,
L.P.)
(8) (30)
10/1/2017
49.26%
3,345
8,818
LP Interests (2717 HPP-MS,
L.P.)
(30)
3/11/2022
49.26%
256
383
LP Interests (2717 GRE-LP,
L.P.)
(30)
4/18/2024
43.05%
441
441
LP Interests (423 COR,
L.P.)
(8) (30)
6/2/2022
26.89%
2,900
4,187
6,942
13,829
Harrison Hydra-Gen, Ltd.
Manufacturer of Hydraulic Generators
Common Stock
(8)
6/4/2010
107,456
718
7,010
IG Investor, LLC
Military and Other Tactical Gear
Secured Debt
6/21/2023
13.00%
6/21/2028
1,600
1,572
1,572
Secured Debt
6/21/2023
13.00%
6/21/2028
35,504
35,257
35,257
Common Equity
6/21/2023
14,400
14,400
16,230
51,229
53,059
Jensen Jewelers of Idaho, LLC
Retail Jewelry Store
Secured Debt
(9) (25)
8/29/2017
P+
6.75%
11/14/2026
—
—
—
Secured Debt
(9)
11/14/2006
14.50%
P+
6.75%
11/14/2026
1,498
1,498
1,498
Member Units
(8)
11/14/2006
627
811
11,820
2,309
13,318
JorVet Holdings, LLC
Supplier and Distributor of Veterinary
Equipment and Supplies
Secured Debt
3/28/2022
12.00%
3/28/2027
23,321
23,216
23,216
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
80
Preferred Equity
(8)
3/28/2022
109,926
10,993
13,180
34,209
36,396
KBK Industries, LLC
Manufacturer of Specialty Oilfield and
Industrial Products
Secured Debt
2/24/2023
9.00%
2/24/2028
3,700
3,676
3,700
Member Units
1/23/2006
325
783
25,180
4,459
28,880
Kickhaefer Manufacturing
Company, LLC
Precision Metal Parts Manufacturing
Secured Debt
10/31/2018
11.50%
10/31/2026
14,999
14,987
14,987
Secured Debt
10/31/2018
9.00%
10/31/2048
3,959
3,926
3,926
Preferred Equity
10/31/2018
581
12,240
12,240
Member Units
(8) (29)
10/31/2018
800
992
2,710
32,145
33,863
Metalforming Holdings, LLC
Distributor of Sheet Metal Folding and
Metal Forming Equipment
Secured Debt
(25)
10/19/2022
10/19/2025
—
(11)
(11)
Secured Debt
10/19/2022
9.75%
10/19/2027
20,961
20,844
20,844
Preferred Equity
(8)
10/19/2022
5,915,585
8.00%
8.00%
5,916
6,397
Common Stock
10/19/2022
1,537,219
1,537
6,850
28,286
34,080
MS Private Loan Fund I, LP
(12) (13)
Investment Partnership
Secured Debt
1/26/2021
5.00%
3/24/2026
1,600
1,600
1,600
LP Interests
(8) (30)
1/26/2021
14.51%
14,250
14,034
15,850
15,634
MS Private Loan Fund II, LP
(12) (13)
Investment Partnership
Secured Debt
(9) (25)
9/5/2023
SF+
3.00%
3/5/2029
—
(59)
(59)
LP Interests
(8) (30)
9/5/2023
13.02%
7,449
7,843
7,390
7,784
MSC Adviser I, LLC
(16)
Third Party Investment Advisory Services
Member Units
(8)
11/22/2013
100%
29,500
246,000
MSC Income Fund, Inc.
(12) (13)
Business Development Company
Common Equity
(8)
5/2/2022
1,085,111
17,000
16,810
Mystic Logistics Holdings,
LLC
Logistics and Distribution Services Provider
for Large Volume Mailers
Secured Debt
(25)
8/18/2014
1/31/2027
—
—
—
Secured Debt
8/18/2014
10.00%
1/31/2027
5,746
5,731
5,746
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
81
Common Stock
(8)
8/18/2014
5,873
2,720
26,370
8,451
32,116
NAPCO Precast, LLC
Precast Concrete Manufacturing
Member Units
1/31/2008
2,955
2,975
9,050
Nello Industries Investco, LLC
Manufacturer of Steel Poles and Towers For
Critical Infrastructure
Secured Debt
(9) (25)
6/4/2024
SF+
6.50%
6/4/2025
—
(16)
(16)
Secured Debt
6/4/2024
13.50%
6/4/2029
27,200
26,959
26,959
Common Equity
(8)
6/4/2024
364,579
12,120
15,560
39,063
42,503
NexRev LLC
Provider of Energy Efficiency Products &
Services
Secured Debt
(25)
2/28/2018
2/28/2025
—
—
—
Secured Debt
2/28/2018
9.00%
2/28/2025
9,811
9,803
9,811
Preferred Member Units
(8)
2/28/2018
103,144,186
8,213
11,910
18,016
21,721
NRP Jones, LLC
Manufacturer of Hoses, Fittings and
Assemblies
Secured Debt
12/21/2017
12.00%
9/18/2028
2,191
2,178
2,178
Member Units
12/22/2011
74,761
114
94
Member Units
12/22/2011
74,761
3,823
2,696
6,115
4,968
NuStep, LLC
Designer, Manufacturer and Distributor of
Fitness Equipment
Secured Debt
(9)
1/31/2017
11.16%
SF+
6.50%
1/31/2025
3,600
3,600
3,600
Secured Debt
1/31/2017
12.00%
1/31/2025
18,440
18,439
18,439
Preferred Member Units
11/2/2022
2,400
2,785
6,000
Preferred Member Units
1/31/2017
486
11,866
11,550
36,690
39,589
OMi Topco, LLC
Manufacturer of Overhead Cranes
Secured Debt
8/31/2021
12.00%
8/31/2026
9,000
8,970
9,000
Preferred Member Units
(8)
4/1/2008
900
1,080
72,720
10,050
81,720
Orttech Holdings, LLC
Distributor of Industrial Clutches, Brakes
and Other Components
Secured Debt
(9) (25)
7/30/2021
SF+
11.00%
7/31/2026
—
—
—
Secured Debt
(9)
7/30/2021
15.66%
SF+
11.00%
7/31/2026
21,960
21,890
21,960
Preferred Stock
(8) (29)
7/30/2021
10,000
10,000
13,450
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
82
31,890
35,410
Pinnacle TopCo, LLC
Manufacturer and Distributor of Garbage
Can Liners, Poly Bags, Produce Bags, and
Other Similar Products
Secured Debt
(25)
12/21/2023
12/31/2028
—
(13)
—
Secured Debt
12/21/2023
13.00%
12/31/2028
28,640
28,415
28,640
Preferred Equity
(8)
12/21/2023
440
12,540
18,360
40,942
47,000
PPL RVs, Inc.
Recreational Vehicle Dealer
Secured Debt
(9) (25)
10/31/2019
SF+
8.75%
11/15/2027
—
(5)
—
Secured Debt
(9)
11/15/2016
13.73%
SF+
8.75%
11/15/2027
16,456
16,346
16,456
Common Stock
6/10/2010
2,000
2,150
17,110
Common Stock
(8) (29)
6/14/2022
238,421
238
514
18,729
34,080
Principle Environmental, LLC
Noise Abatement Service Provider
Secured Debt
7/1/2011
13.00%
11/15/2026
4,897
4,861
4,861
Preferred Member Units
(8)
2/1/2011
21,806
5,709
12,600
Common Stock
1/27/2021
1,037
1,200
600
11,770
18,061
Quality Lease Service, LLC
Provider of Rigsite Accommodation Unit
Rentals and Related Services
Member Units
6/8/2015
1,000
7,546
460
River Aggregates, LLC
Processor of Construction Aggregates
Member Units
(29)
12/20/2013
1,500
369
9,530
Robbins Bros. Jewelry, Inc.
Bridal Jewelry Retailer
Secured Debt
(14) (25)
12/15/2021
10.00%
12/15/2026
—
(39)
(39)
Secured Debt
(14)
12/15/2021
12.50%
10.00%
12/15/2026
33,660
32,624
14,562
Preferred Equity
12/15/2021
11,070
11,070
—
43,655
14,523
Tedder Industries, LLC
Manufacturer of Firearm Holsters and
Accessories
Secured Debt
(14) (17)
8/31/2018
12.00%
12.00%
8/31/2023
1,840
1,821
1,646
Secured Debt
(14) (17)
8/31/2018
12.00%
12.00%
8/31/2023
15,200
15,045
3,603
Preferred Member Units
8/28/2023
6,605
661
—
Preferred Member Units
2/1/2023
5,643
564
—
Preferred Member Units
8/31/2018
544
9,245
—
27,336
5,249
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
83
Televerde, LLC
Provider of Telemarketing and Data Services
Preferred Stock
1/26/2022
248
718
1,794
Member Units
1/6/2011
460
1,290
4,252
2,008
6,046
Trantech Radiator Topco,
LLC
Transformer Cooling Products and Services
Secured Debt
(25)
5/31/2019
5/31/2027
—
(1)
(1)
Secured Debt
5/31/2019
13.50%
5/31/2027
7,920
7,855
7,855
Common Stock
(8)
5/31/2019
615
4,655
8,570
12,509
16,424
Victory Energy Operations,
LLC
Provider of Industrial and Commercial
Combustion Systems
Secured Debt
(25)
10/3/2024
10/3/2029
—
(33)
(33)
Secured Debt
10/3/2024
13.00%
10/3/2029
48,251
47,792
47,792
Preferred Equity
10/3/2024
51,914
22,686
22,686
70,445
70,445
Volusion, LLC
Provider of Online Software-as-a-Service
eCommerce Solutions
Secured Debt
3/31/2023
10.00%
3/31/2025
2,100
2,100
2,100
Preferred Member Units
3/31/2023
5,097,595
3,978
7,003
Preferred Member Units
3/31/2023
142,512
—
—
Preferred Member Units
1/26/2015
4,876,670
14,000
—
Common Stock
3/31/2023
1,802,780
2,576
—
22,654
9,103
VVS Holdco LLC
Omnichannel Retailer of Animal Health
Products
Secured Debt
(9) (25)
12/1/2021
SF+
6.00%
12/1/2025
—
—
—
Secured Debt
12/1/2021
11.50%
12/1/2026
25,760
25,661
25,661
Preferred Equity
(8) (29)
12/1/2021
12,240
12,240
12,240
37,901
37,901
Ziegler’s NYPD, LLC
Casual Restaurant Group
Secured Debt
12/30/2024
12.00%
12/31/2027
1,750
1,750
1,750
Preferred Member Units
6/30/2015
17,086
3,154
320
Warrants
(27)
7/1/2015
587
10/1/2025
600
—
5,504
2,070
Subtotal Control Investments
(74.6% of net assets at fair
value)
$
1,415,970 $
2,087,890
Affiliate Investments (6)
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
84
AAC Holdings, Inc.
(11)
Substance Abuse Treatment Service
Provider
Secured Debt
1/31/2023
18.00%
18.00%
6/25/2025
612
611
609
Secured Debt
12/11/2020
18.00%
18.00%
6/25/2025
17,474
17,444
17,365
Common Stock
12/11/2020
654,743
3,148
—
Warrants
(27)
12/11/2020
574,598
12/11/2025
—
—
21,203
17,974
Boccella Precast Products LLC
Manufacturer of Precast Hollow Core
Concrete
Secured Debt
9/23/2021
10.00%
2/28/2027
320
320
266
Member Units
6/30/2017
2,160,000
2,256
310
2,576
576
Buca C, LLC
Casual Restaurant Group
Secured Debt
(14) (17)
8/7/2024
15.00%
15.00%
11/4/2024
6,437
5,652
—
Secured Debt
(14)
6/28/2024
15.00%
15.00%
4/1/2025
15
—
—
Secured Debt
(14) (17)
6/30/2015
15.00%
15.00%
8/31/2023
9,554
5,862
—
Preferred Member Units
6/30/2015
6
6.00%
6.00%
4,770
—
16,284
—
Career Team Holdings, LLC
Provider of Workforce Training and Career
Development Services
Secured Debt
(9)
12/17/2021
10.56%
SF+
6.00%
12/17/2026
900
887
887
Secured Debt
12/17/2021
12.50%
12/17/2026
19,440
19,364
19,364
Common Stock
12/17/2021
450,000
4,500
4,740
24,751
24,991
CenterPeak Holdings, LLC
Executive Search Services
Secured Debt
(25)
12/10/2021
12/10/2026
—
(12)
—
Secured Debt
12/10/2021
15.00%
12/10/2026
21,507
21,418
21,507
Preferred Equity
(8)
12/10/2021
3,310
3,635
14,550
25,041
36,057
Classic H&G Holdings, LLC
Provider of Engineered Packaging Solutions
Preferred Member Units
(8)
3/12/2020
154
—
2,850
Congruent Credit
Opportunities Funds
(12) (13)
Investment Partnership
LP Interests (Congruent
Credit Opportunities Fund
III, LP)
(8) (30)
2/4/2015
12.49%
2,813
2,276
Connect Telecommunications
Solutions Holdings, Inc.
(13)
Value-Added Distributor of Fiber Products
and Equipment
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
85
Secured Debt
10/9/2024
13.00%
10/9/2029
27,577
27,315
27,315
Preferred Equity
10/9/2024
22,304
12,596
12,596
39,911
39,911
DMA Industries, LLC
Distributor of Aftermarket Ride Control
Products
Secured Debt
6/18/2024
12.00%
6/19/2029
560
555
555
Secured Debt
11/19/2021
12.00%
6/19/2029
16,800
16,722
16,722
Preferred Equity
11/19/2021
5,944
5,944
5,944
Preferred Equity
(8)
6/18/2024
3,068
15.00%
15.00%
3,240
3,240
26,461
26,461
Dos Rios Partners
(12) (13)
Investment Partnership
LP Interests (Dos Rios
Partners, LP)
(30)
4/25/2013
20.24%
6,172
7,708
LP Interests (Dos Rios
Partners - A, LP)
(30)
4/25/2013
6.43%
1,960
2,447
8,132
10,155
Dos Rios Stone Products LLC
(10)
Limestone and Sandstone Dimension Cut
Stone Mining Quarries
Class A Preferred Units
(29)
6/27/2016
2,000,000
2,000
—
EIG Fund Investments
(12) (13)
Investment Partnership
LP Interests (EIG Global
Private Debt Fund-A, L.P.)
(8)
11/6/2015
5,000,000
416
369
FCC Intermediate Holdco,
LLC
Supply Chain Management Services
Secured Debt
5/28/2024
13.00%
5/29/2029
32,800
29,109
29,109
Warrants
(27)
5/28/2024
12
3,920
10,840
33,029
39,949
Flame King Holdings, LLC
Propane Tank and Accessories Distributor
Preferred Equity
(8)
10/29/2021
9,360
10,400
35,920
Freeport Financial Funds
(12) (13)
Investment Partnership
LP Interests (Freeport
Financial SBIC Fund LP)
(30)
3/23/2015
9.30%
2,580
2,190
LP Interests (Freeport First
Lien Loan Fund III LP)
(8) (30)
7/31/2015
5.95%
1,659
1,263
4,239
3,453
GFG Group, LLC
Grower and Distributor of a Variety of
Plants and Products to Other Wholesalers,
Retailers and Garden Centers
Secured Debt
3/31/2021
8.00%
3/31/2026
8,185
8,164
8,185
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
86
Preferred Member Units
(8)
3/31/2021
226
4,900
10,540
13,064
18,725
Gulf Manufacturing, LLC
(13) (21)
Manufacturer of Specialty Fabricated
Industrial Piping Products
Secured Debt
(25)
3/15/2024
SF+
7.63%
3/15/2029
—
(42)
—
Secured Debt
3/15/2024
12.19%
SF+
7.63%
3/15/2029
39,000
38,676
39,000
Member Units
(8)
8/31/2007
438
2,980
14,730
Common Stock
11/18/2024
888
888
888
42,502
54,618
Harris Preston Fund
Investments
(12) (13)
Investment Partnership
LP Interests (HPEP 3, L.P.)
(30)
8/9/2017
8.22%
2,296
4,472
LP Interests (HPEP 4, L.P.)
(30)
7/12/2022
11.61%
5,532
5,861
LP Interests (423 HAR,
L.P.)
(30)
6/2/2023
15.60%
750
1,226
8,578
11,559
Hawk Ridge Systems, LLC
Value-Added Reseller of Engineering
Design and Manufacturing Solutions
Secured Debt
(9)
12/2/2016
10.73%
SF+
6.00%
1/15/2026
2,645
2,644
2,645
Secured Debt
12/2/2016
12.50%
1/15/2026
45,256
45,200
45,256
Preferred Member Units
(8)
12/2/2016
226
2,850
20,260
Preferred Member Units
(29)
12/2/2016
226
150
1,070
50,844
69,231
Houston Plating and Coatings,
LLC
Provider of Plating and Industrial Coating
Services
Unsecured Convertible Debt
5/1/2017
10.00%
4/2/2026
3,000
3,000
2,940
Member Units
(8)
1/8/2003
322,297
2,352
3,930
5,352
6,870
Independent Pet Partners
Intermediate Holdings, LLC
(10)
Omnichannel Retailer of Specialty Pet
Products
Common Equity
4/7/2023
18,006,407
18,300
20,390
Infinity X1 Holdings, LLC
Manufacturer and Supplier of Personal
Lighting Products
Secured Debt
3/31/2023
12.00%
3/31/2028
15,050
14,954
15,050
Preferred Equity
(8)
3/31/2023
87,360
4,368
9,080
19,322
24,130
Integral Energy Services
(10)
Nuclear Power Staffing Services
Secured Debt
(9)
8/20/2021
12.35%
SF+
7.50%
8/20/2026
12,915
12,828
12,728
Preferred Equity
(8)
12/7/2023
3,188
10.00%
10.00%
254
452
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
87
Common Stock
8/20/2021
9,968
1,356
550
14,438
13,730
Iron-Main Investments, LLC
Consumer Reporting Agency Providing
Employment Background Checks and Drug
Testing
Secured Debt
8/2/2021
13.00%
1/31/2028
4,514
4,493
4,493
Secured Debt
9/1/2021
13.00%
1/31/2028
2,940
2,927
2,927
Secured Debt
11/15/2021
13.00%
1/31/2028
8,944
8,944
8,944
Secured Debt
11/15/2021
13.00%
1/31/2028
17,624
17,542
17,542
Secured Debt
1/31/2023
13.00%
1/31/2028
9,842
9,638
9,638
Preferred Equity
6/26/2024
711,200
25.00%
25.00%
711
760
Common Stock
8/3/2021
203,016
2,756
2,850
47,011
47,154
ITA Holdings Group, LLC
Air Ambulance Services
Secured Debt
(9)
6/21/2023
13.78%
SF+
9.00%
6/21/2027
1,180
1,169
1,180
Secured Debt
(9)
6/21/2023
13.78%
SF+
9.00%
6/21/2027
994
981
994
Secured Debt
(9)
6/21/2023
12.78%
SF+
8.00%
6/21/2027
4,438
3,772
4,438
Secured Debt
(9)
6/21/2023
14.78%
SF+
10.00%
6/21/2027
4,438
3,772
4,438
Warrants
(27)
6/21/2023
193,307
6/21/2033
2,091
5,690
11,785
16,740
Mills Fleet Farm Group, LLC
(10)
Omnichannel Retailer of Work, Farm and
Lifestyle Merchandise
Secured Debt
(9) (25)
12/19/2024
SF+
5.50%
12/31/2026
—
—
—
Common Equity
(29)
12/19/2024
66,306
12/31/2026
13,840
13,840
13,840
13,840
MoneyThumb Acquisition,
LLC
Provider of Software-as-a-Service Financial
File Conversion and Reconciliation
Secured Debt
8/19/2024
14.00%
8/19/2029
9,600
8,967
8,967
Preferred Member Units
(8)
8/19/2024
163,282
12.00%
12.00%
1,707
1,707
Warrants
(27)
8/19/2024
59,368
594
594
11,268
11,268
Nebraska Vet AcquireCo, LLC
Mixed-Animal Veterinary and Animal
Health Product Provider
Secured Debt
(9) (25)
12/31/2020
SF+
7.00%
5/9/2027
—
(7)
—
Secured Debt
5/9/2024
12.50%
5/9/2027
4,650
4,479
4,650
Secured Debt
12/31/2020
12.50%
5/9/2027
62,200
62,085
62,200
Preferred Member Units
(8)
12/31/2020
6,987
6,987
32,040
73,544
98,890
OnAsset Intelligence, Inc.
Provider of Transportation Monitoring /
Tracking Products and Services
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
88
Secured Debt
(14)
4/18/2011
12.00%
12.00%
9/30/2025
4,415
4,415
457
Secured Debt
(14)
5/10/2013
12.00%
12.00%
9/30/2025
2,116
2,116
218
Secured Debt
(14)
3/21/2014
12.00%
12.00%
9/30/2025
983
983
101
Secured Debt
(14)
5/20/2014
12.00%
12.00%
9/30/2025
964
964
99
Unsecured Debt
(14)
6/5/2017
10.00%
10.00%
9/30/2025
305
305
305
Preferred Stock
4/18/2011
912
7.00%
7.00%
1,981
—
Common Stock
4/15/2021
635
830
—
Warrants
(27)
4/18/2011
4,699
5/10/2025
1,089
—
12,683
1,180
Oneliance, LLC
Construction Cleaning Company
Preferred Stock
(8)
8/6/2021
1,128
1,128
2,580
RA Outdoors LLC
(10) (13)
Software Solutions Provider for Outdoor
Activity Management
Secured Debt
(9)
4/8/2021
11.74%
SF+
6.75%
11.74%
4/8/2026
1,356
1,352
1,257
Secured Debt
(9)
4/8/2021
11.74%
SF+
6.75%
11.74%
4/8/2026
14,194
14,145
13,155
Common Equity
8/12/2024
110
—
—
15,497
14,412
SI East, LLC
Rigid Industrial Packaging Manufacturing
Secured Debt
8/31/2018
11.75%
6/16/2028
2,250
2,236
2,250
Secured Debt
(23)
6/16/2023
12.79%
6/16/2028
67,661
67,611
67,661
Preferred Member Units
(8)
8/31/2018
165
1,525
13,660
71,372
83,571
Slick Innovations, LLC
Text Message Marketing Platform
Secured Debt
9/13/2018
14.00%
12/22/2027
16,320
16,181
16,320
Common Stock
(8)
9/13/2018
70,000
—
2,440
16,181
18,760
Student Resource Center, LLC
(10)
Higher Education Services
Secured Debt
9/11/2024
8.50%
8.50%
12/31/2027
204
204
204
Secured Debt
(14)
12/31/2022
8.50%
8.50%
12/31/2027
5,327
4,884
1,644
Preferred Equity
12/31/2022
5,907,649
—
—
5,088
1,848
Superior Rigging & Erecting
Co.
Provider of Steel Erecting, Crane Rental &
Rigging Services
Preferred Member Units
8/31/2020
1,636
4,500
10,530
The Affiliati Network, LLC
Performance Marketing Solutions
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
89
Secured Debt
8/9/2021
10.00%
8/9/2026
400
394
394
Secured Debt
8/9/2021
10.00%
8/9/2026
5,201
5,182
5,053
Preferred Stock
(8)
9/1/2023
287,310
287
287
Preferred Stock
(8)
8/9/2021
1,280,000
6,400
6,400
12,263
12,134
UnionRock Energy Fund II,
LP
(12) (13)
Investment Partnership
LP Interests
(30)
6/15/2020
11.11%
3,216
4,732
UnionRock Energy Fund III,
LP
(12) (13)
Investment Partnership
LP Interests
(30)
6/6/2023
25.00%
4,767
5,612
UniTek Global Services, Inc.
(11)
Provider of Outsourced Infrastructure
Services
Secured Convertible Debt
1/1/2021
15.00%
15.00%
6/30/2028
2,717
3,257
5,642
Secured Convertible Debt
1/1/2021
15.00%
15.00%
6/30/2028
1,281
1,508
2,663
Preferred Stock
(8)
8/29/2019
1,133,102
20.00%
20.00%
3,181
3,181
Preferred Stock
8/21/2018
1,731,044
20.00%
20.00%
2,511
4,272
Preferred Stock
6/30/2017
2,596,567
19.00%
19.00%
3,667
—
Preferred Stock
1/15/2015
4,935,377
13.50%
13.50%
7,924
—
Common Stock
4/1/2020
1,075,992
—
—
22,048
15,758
Urgent DSO LLC
General and Emergency Dentistry Practice
Secured Debt
2/16/2024
13.50%
2/16/2029
8,800
8,727
8,727
Preferred Equity
(8)
2/16/2024
4,000
9.00%
9.00%
4,320
4,320
13,047
13,047
World Micro Holdings, LLC
Supply Chain Management
Secured Debt
12/12/2022
13.00%
12/12/2027
10,765
10,702
10,702
Preferred Equity
(8)
12/12/2022
3,845
3,845
3,845
14,547
14,547
Subtotal Affiliate Investments
(30.3% of net assets at fair
value)
$
743,441 $
846,798
Non-Control/Non-Affiliate
Investments (7)
Adams Publishing Group,
LLC
(10)
Local Newspaper Operator
Secured Debt
(9) (33)
3/11/2022
11.00%
SF+
7.00%
1.00%
3/11/2027
7,920
7,920
7,773
Secured Debt
(9) (33)
3/11/2022
11.00%
SF+
7.00%
1.00%
3/11/2027
18,853
18,826
18,504
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
90
26,746
26,277
AMEREQUIP LLC
(10)
Full Services Provider Including Design,
Engineering and Manufacturing of
Commercial and Agricultural Equipment
Common Stock
(8)
8/31/2022
235
1,844
570
American Health Staffing
Group, Inc.
(10)
Healthcare Temporary Staffing
Secured Debt
(9) (25)
11/19/2021
P+
5.00%
11/19/2026
—
(5)
(5)
Secured Debt
(9)
11/19/2021
12.50%
P+
5.00%
11/19/2026
6,162
6,138
6,162
6,133
6,157
American Nuts, LLC
(10)
Roaster, Mixer and Packager of Bulk Nuts
and Seeds
Secured Debt
(9)
3/11/2022
14.49%
SF+
9.75%
14.49%
4/10/2026
7,517
7,488
5,985
Secured Debt
(9)
3/11/2022
14.49%
SF+
9.75%
14.49%
4/10/2026
12,230
12,178
9,738
Secured Debt
(9) (14)
3/11/2022
16.49%
SF+
11.75% 16.49%
4/10/2026
5,705
5,645
3,502
Secured Debt
(9) (14)
3/11/2022
16.49%
SF+
11.75% 16.49%
4/10/2026
9,283
9,169
5,697
34,480
24,922
American Teleconferencing
Services, Ltd.
(11)
Provider of Audio Conferencing and Video
Collaboration Solutions
Secured Debt
(14) (17)
9/17/2021
4/7/2023
3,166
2,989
76
Secured Debt
(14) (17)
5/19/2016
6/8/2023
15,489
13,757
374
16,746
450
Ansira Partners II, LLC
(10)
Provider of Data-Driven Marketing Services
Secured Debt
(9) (25)
7/1/2024
SF+
6.75%
7/1/2029
—
(187)
(187)
Secured Debt
(9)
7/1/2024
11.25%
SF+
6.75%
7/1/2029
75,490
73,790
74,279
73,603
74,092
ArborWorks, LLC
(10)
Vegetation Management Services
Secured Debt
11/6/2023
15.00%
15.00%
11/6/2028
1,997
1,997
1,997
Secured Debt
(9)
11/6/2023
11.08%
SF+
6.50%
11.08%
11/6/2028
8,054
8,054
8,054
Preferred Equity
11/6/2023
32,507
14,060
12,552
Preferred Equity
11/6/2023
32,507
—
—
Common Equity
11/9/2021
3,898
234
—
24,345
22,603
Archer Systems, LLC
(10)
Mass Tort Settlement Administration
Solutions Provider
Common Stock
8/11/2022
1,387,832
1,388
2,450
ATS Operating, LLC
(10)
For-Profit Thrift Retailer
Secured Debt
(9)
1/18/2022
10.85%
SF+
6.00%
1/18/2027
360
360
360
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
91
Secured Debt
(9)
1/18/2022
9.85%
SF+
5.00%
1/18/2027
6,660
6,660
6,660
Secured Debt
(9)
1/18/2022
11.85%
SF+
7.00%
1/18/2027
6,660
6,660
6,660
Common Stock
1/18/2022
720,000
720
850
14,400
14,530
AVEX Aviation Holdings,
LLC
(10)
Specialty Aircraft Dealer & MRO Provider
Secured Debt
(9) (25)
12/23/2022
SF+
7.25%
12/23/2027
—
(90)
(90)
Secured Debt
(9)
12/23/2022
11.73%
SF+
7.25%
12/23/2027
24,073
23,490
24,073
Common Equity
(8)
12/15/2021
984
934
896
24,334
24,879
Berry Aviation, Inc.
(10)
Charter Airline Services
Preferred Member Units
3/8/2024
286,109
286
—
Preferred Member Units
(29)
11/12/2019
122,416
—
—
Preferred Member Units
(29)
7/6/2018
1,548,387
—
—
286
—
Bettercloud, Inc.
(10)
SaaS Provider of Workflow Management
and Business Application Solutions
Secured Debt
(9) (25)
6/30/2022
SF+
10.25%
6/30/2028
—
(48)
(48)
Secured Debt
(9)
6/30/2022
15.76%
SF+
10.25%
9.25%
6/30/2028
31,792
31,484
23,984
31,436
23,936
Binswanger Enterprises, LLC
(10)
Glass Repair and Installation Service
Provider
Member Units
3/10/2017
1,050,000
1,050
650
Bluestem Brands, Inc.
(11)
Multi-Channel Retailer of General
Merchandise
Secured Debt
(9)
1/9/2024
13.17%
SF+
8.50%
12.17%
8/28/2025
202
130
170
Secured Debt
(9)
10/19/2022
15.00%
P+
7.50%
14.75%
8/28/2025
3,083
3,083
2,605
Secured Debt
(9)
8/28/2020
13.17%
SF+
8.50%
12.17%
8/28/2025
4,183
3,961
3,535
Common Stock
10/1/2020
723,184
1
—
Warrants
(27)
10/19/2022
163,295
10/19/2032
1,036
—
8,211
6,310
Bond Brand Loyalty ULC
(10) (13)
(21)
Provider of Loyalty Marketing Services
Secured Debt
(9)
5/1/2023
11.65%
SF+
7.00%
5/1/2028
571
552
571
Secured Debt
(9)
5/1/2023
10.74%
SF+
6.00%
5/1/2028
6,341
6,256
6,341
Secured Debt
(9)
5/1/2023
12.74%
SF+
8.00%
5/1/2028
6,341
6,256
6,341
Preferred Equity
5/1/2023
571
571
500
Common Equity
5/1/2023
571
—
—
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
92
13,635
13,753
BP Loenbro Holdings Inc.
(10)
Specialty Industrial Maintenance Services
Secured Debt
(9) (32)
2/1/2024
10.68%
SF+
6.25%
2/1/2029
1,199
1,154
1,199
Secured Debt
(9) (25)
2/1/2024
SF+
6.25%
2/1/2029
—
(22)
(22)
Secured Debt
(9)
2/1/2024
10.92%
SF+
6.25%
2/1/2029
26,173
25,739
26,173
Common Equity
2/1/2024
2,333,333
2,333
3,620
29,204
30,970
Brainworks Software, LLC
(10)
Advertising Sales and Newspaper
Circulation Software
Secured Debt
(9) (14)
(17)
8/12/2014
15.25%
P+
7.25%
7/22/2019
761
761
761
Secured Debt
(9) (14)
(17)
8/12/2014
15.25%
P+
7.25%
7/22/2019
7,056
7,056
750
7,817
1,511
Brightwood Capital Fund
Investments
(12) (13)
Investment Partnership
LP Interests (Brightwood
Capital Fund III, LP)
(30)
7/21/2014
1.59%
5,415
3,120
LP Interests (Brightwood
Capital Fund IV, LP)
(8) (30)
10/26/2016
0.59%
4,014
4,016
LP Interests (Brightwood
Capital Fund V, LP)
(8) (30)
7/12/2021
0.72%
3,500
3,809
12,929
10,945
Burning Glass Intermediate
Holding Company, Inc.
(10) Provider of Skills-Based Labor Market
Analytics
Secured Debt
(9) (25)
6/14/2021
SF+
5.00%
6/10/2026
—
(11)
—
Secured Debt
(9)
6/14/2021
9.46%
SF+
5.00%
6/10/2028
17,915
17,755
17,915
17,744
17,915
CAI Software LLC
Provider of Specialized Enterprise Resource
Planning Software
Preferred Equity
12/13/2021
2,142,167
2,142
2,417
Preferred Equity
12/13/2021
596,176
—
—
2,142
2,417
CaseWorthy, Inc.
(10)
SaaS Provider of Case Management
Solutions
Common Equity
12/30/2022
245,926
246
490
Channel Partners
Intermediateco, LLC
(10)
Outsourced Consumer Services Provider
Secured Debt
(9) (32)
2/7/2022
11.53%
SF+
7.00%
2/7/2027
5,075
4,960
4,830
Secured Debt
(9)
2/7/2022
11.93%
SF+
7.00%
2/7/2027
36,167
35,856
34,431
Secured Debt
(9)
6/24/2022
11.93%
SF+
7.00%
2/7/2027
2,004
1,987
1,908
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
93
Secured Debt
(9)
3/27/2023
11.93%
SF+
7.00%
2/7/2027
4,843
4,774
4,610
47,577
45,779
Clarius BIGS, LLC
(10)
Prints & Advertising Film Financing
Secured Debt
(14) (17)
9/23/2014
1/5/2015
2,649
2,649
19
Computer Data Source, LLC
(10)
Third Party Maintenance Provider to the
Data Center Ecosystem
Secured Debt
(9) (32)
8/6/2021
12.93%
SF+
8.25%
8/6/2026
7,837
7,754
7,341
Secured Debt
(9) (25)
3/29/2024
SF+
8.25%
8/6/2026
—
(113)
(113)
Secured Debt
(9)
8/6/2021
12.92%
SF+
8.25%
8/6/2026
18,968
18,850
17,769
26,491
24,997
Coregistics Buyer LLC
(10) (13)
(21)
Contract Packaging Service Provider
Secured Debt
(9) (32)
6/29/2024
10.39%
SF+
6.00%
6/28/2029
1,669
1,590
1,639
Secured Debt
(9)
6/29/2024
10.36%
SF+
6.00%
6/28/2029
10,704
10,474
10,507
Secured Debt
(9)
8/15/2024
10.40%
SF+
6.00%
6/28/2029
7,118
6,987
6,987
Secured Debt
(9)
6/29/2024
10.61%
SF+
6.25%
6/28/2029
32,031
31,313
30,165
50,364
49,298
CQ Fluency, LLC
(10)
Global Language Services Provider
Secured Debt
(9) (25)
12/27/2023
SF+
6.75%
6/27/2027
—
(47)
(47)
Secured Debt
(9) (25)
12/27/2023
SF+
6.75%
6/27/2027
—
(47)
(47)
Secured Debt
(9)
12/27/2023
11.18%
SF+
6.75%
6/27/2027
10,828
10,600
10,754
10,506
10,660
Creative Foam Corporation
(10)
Manufacturer of Custom Engineered Die
Cut, Formed Foam, Nonwoven, and Multi-
material Component Solutions for the
Automotive and Healthcare Markets
Secured Debt
(9) (25)
6/27/2024
SF+
5.75%
6/27/2029
—
(272)
(272)
Secured Debt
(9)
6/27/2024
10.11%
SF+
5.75%
6/27/2029
106,280
104,348
105,229
104,076
104,957
Dalton US Inc.
(10)
Provider of Supplemental Labor Services
Common Stock
8/16/2022
515
720
690
DTE Enterprises, LLC
(10)
Industrial Powertrain Repair and Services
Class AA Preferred Member
Units (non-voting)
(8)
4/13/2018
10.00%
10.00%
1,316
438
Class A Preferred Member
Units
4/13/2018
776,316
8.00%
8.00%
776
—
2,092
438
Dynamic Communities, LLC
(10)
Developer of Business Events and Online
Community Groups
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
94
Secured Debt
(9)
12/20/2022
11.46%
SF+
7.00%
11.46%
12/31/2026
2,318
2,160
2,220
Secured Debt
(9)
12/20/2022
13.46%
SF+
9.00%
13.46%
12/31/2026
2,413
2,179
2,219
Preferred Equity
12/20/2022
125,000
128
60
Preferred Equity
12/20/2022
2,376,241
—
—
Common Equity
12/20/2022
1,250,000
—
—
4,467
4,499
Eastern Wholesale Fence LLC
(10) Manufacturer and Distributor of Residential
and Commercial Fencing Solutions
Secured Debt
(9)
11/19/2020
12.74%
SF+
8.00%
10/30/2025
2,826
2,805
2,714
Secured Debt
(9)
11/19/2020
12.74%
SF+
8.00%
10/30/2025
4,374
4,355
4,201
Secured Debt
(9)
11/19/2020
12.74%
SF+
8.00%
10/30/2025
8,725
8,683
8,380
Secured Debt
(9)
4/20/2021
12.74%
SF+
8.00%
10/30/2025
1,809
1,802
1,738
Secured Debt
(9)
10/14/2021
12.74%
SF+
8.00%
10/30/2025
9,901
9,861
9,509
27,506
26,542
Emerald Technologies
Acquisition Co, Inc.
(11) Design & Manufacturing
Secured Debt
(9)
2/10/2022
10.71%
SF+
6.25%
12/29/2027
9,587
9,434
7,670
EnCap Energy Fund
Investments
(12) (13)
Investment Partnership
LP Interests (EnCap Energy
Capital Fund VIII, L.P.)
(8) (30)
1/22/2015
0.14%
3,542
1,754
LP Interests (EnCap Energy
Capital Fund VIII Co-
Investors, L.P.)
(8) (30)
1/21/2015
0.38%
1,983
846
LP Interests (EnCap Energy
Capital Fund IX, L.P.)
(8) (30)
1/22/2015
0.10%
3,251
1,088
LP Interests (EnCap Energy
Capital Fund X, L.P.)
(8) (30)
3/25/2015
0.15%
6,963
5,051
LP Interests (EnCap Energy
Capital Fund XII, L.P.)
(8) (30)
8/31/2023
0.19%
2,717
3,525
LP Interests (EnCap
Flatrock Midstream Fund II,
L.P.)
(8) (30)
3/30/2015
0.84%
5,110
1,514
LP Interests (EnCap
Flatrock Midstream Fund
III, L.P.)
(8) (30)
3/27/2015
0.25%
4,312
3,756
27,878
17,534
Escalent, Inc.
(10)
Market Research and Consulting Firm
Secured Debt
(9) (25)
4/7/2023
SF+
8.00%
4/7/2029
—
(28)
(28)
Secured Debt
(9)
10/2/2024
12.39%
SF+
8.00%
4/7/2029
1,382
1,359
1,359
Secured Debt
(9)
4/7/2023
12.43%
SF+
8.00%
4/7/2029
26,048
25,488
26,048
Common Equity
(8)
4/7/2023
649,794
663
910
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
95
27,482
28,289
Event Holdco, LLC
(10)
Event and Learning Management Software
for Healthcare Organizations and Systems
Secured Debt
(9)
12/22/2021
12.59%
SF+
8.00%
12/22/2026
3,692
3,678
3,692
Secured Debt
(9)
12/22/2021
12.59%
SF+
8.00%
6.00%
12/22/2026
47,633
47,457
47,633
51,135
51,325
Fuse, LLC
(11)
Cable Networks Operator
Secured Debt
(8)
6/30/2019
12.00%
12/31/2026
1,810
1,810
932
Common Stock
6/30/2019
10,429
256
—
2,066
932
Garyline, LLC
(10)
Manufacturer of Consumer Plastic Products
Secured Debt
(9) (32)
11/10/2023
11.29%
SF+
6.75%
11/10/2028
8,118
7,915
8,118
Secured Debt
(9)
11/10/2023
11.34%
SF+
6.75%
11/10/2028
32,146
31,401
32,146
Common Equity
11/10/2023
705,882
706
500
40,022
40,764
GradeEight Corp.
(10)
Distributor of Maintenance and Repair Parts
Secured Debt
(9) (25)
10/4/2024
SF+
7.25%
10/4/2029
—
(95)
(95)
Secured Debt
(9) (25)
10/4/2024
SF+
7.25%
10/4/2029
—
(48)
(48)
Secured Debt
(9) (26)
10/4/2024
11.74%
SF+
7.25%
10/4/2029
31,603
31,002
31,002
Common Equity
10/4/2024
1,365
1,365
1,365
32,224
32,224
GS HVAM Intermediate, LLC
(10)
Specialized Food Distributor
Secured Debt
(9) (32)
10/18/2019
11.12%
SF+
6.50%
2/28/2026
1,864
1,853
1,864
Secured Debt
(9)
10/18/2019
11.24%
SF+
6.50%
2/28/2026
10,509
10,460
10,509
Secured Debt
(9)
9/15/2023
11.24%
SF+
6.50%
2/28/2026
942
939
942
Secured Debt
(9)
12/22/2023
11.24%
SF+
6.50%
2/28/2026
225
223
225
Secured Debt
(9)
8/22/2024
10.98%
SF+
6.50%
2/28/2026
6,076
6,040
6,076
19,515
19,616
GULF PACIFIC
ACQUISITION, LLC
(10)
Rice Processor and Merchandiser
Secured Debt
(9) (32)
9/30/2022
10.50%
SF+
6.00%
9/30/2028
707
694
662
Secured Debt
(9)
9/30/2022
10.55%
SF+
6.00%
9/30/2028
298
286
279
Secured Debt
(9)
9/30/2022
10.46%
SF+
6.00%
9/30/2028
3,578
3,533
3,350
4,513
4,291
HDC/HW Intermediate
Holdings
(10)
Managed Services and Hosting Provider
Secured Debt
(9)
3/7/2024
8.75%
SF+
3.50%
2.50%
6/21/2026
2,423
2,327
2,327
Secured Debt
(14)
3/7/2024
2.50%
2.50%
6/21/2026
1,626
713
418
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
96
Common Equity
3/7/2024
64,029
—
—
3,040
2,745
HEADLANDS OP-CO LLC
(10) Clinical Trial Sites Operator
Secured Debt
(9) (25)
8/1/2022
SF+
6.50%
8/1/2027
—
(35)
(35)
Secured Debt
(9)
8/1/2022
10.86%
SF+
6.50%
8/1/2027
6,666
6,586
6,666
Secured Debt
(9)
6/3/2024
10.86%
SF+
6.50%
8/1/2027
4,713
4,597
4,713
Secured Debt
(9)
8/1/2022
10.86%
SF+
6.50%
8/1/2027
16,453
16,283
16,453
Secured Debt
(9)
6/3/2024
10.86%
SF+
6.50%
8/1/2027
8,039
7,973
8,039
35,404
35,836
Hornblower Sub, LLC
(10) Marine Tourism and Transportation
Secured Debt
(9) (32)
7/3/2024
9.92%
SF+
5.50%
7/3/2029
2,429
2,385
2,407
Secured Debt
(9)
7/3/2024
10.11%
SF+
5.50%
7/3/2029
30,979
30,701
30,701
33,086
33,108
HOWLCO LLC
(11) (13)
(21)
Provider of Accounting and Business
Development Software to Real Estate End
Markets
Secured Debt
(9)
8/19/2021
11.28%
SF+
6.50%
3.50%
10/23/2026
26,241
26,241
26,096
Hybrid Promotions, LLC
(10) Wholesaler of Licensed, Branded and
Private Label Apparel
Secured Debt
(9)
6/30/2021
13.10%
SF+
8.25%
12/31/2027
7,200
7,073
7,200
IG Parent Corporation
(11) Software Engineering
Secured Debt
(9) (25)
7/30/2021
SF+
5.75%
7/30/2026
—
(12)
—
Secured Debt
(9)
7/30/2021
10.21%
SF+
5.75%
7/30/2028
10,154
10,073
10,154
Secured Debt
(9)
7/30/2021
10.21%
SF+
5.75%
7/30/2028
4,903
4,861
4,903
14,922
15,057
Imaging Business Machines,
L.L.C.
(10) Technology Hardware & Equipment
Secured Debt
(9) (32)
6/8/2023
11.39%
SF+
7.00%
6/30/2028
1,581
1,518
1,581
Secured Debt
(9)
6/8/2023
11.62%
SF+
7.00%
6/30/2028
20,559
20,133
20,559
Common Equity
6/8/2023
849
1,166
1,020
22,817
23,160
Implus Footcare, LLC
(10) Provider of Footwear and Related
Accessories
Secured Debt
(9)
6/1/2017
13.73%
SF+
7.75%
1.50%
7/31/2025
18,674
18,674
15,892
Insight Borrower Corporation
(10) Test, Inspection, and Certification
Instrument Provider
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
97
Secured Debt
(9) (25)
7/19/2023
SF+
6.25%
7/19/2028
—
(54)
(54)
Secured Debt
(9) (25)
7/19/2023
SF+
6.25%
7/19/2029
—
(47)
(47)
Secured Debt
(9)
7/19/2023
10.87%
SF+
6.25%
7/19/2029
14,262
13,936
13,539
Common Equity
7/19/2023
131,100
656
320
14,491
13,758
Inspire Aesthetics
Management, LLC
(10)
Surgical and Non-Surgical Plastic Surgery
and Aesthetics Provider
Secured Debt
(9) (32)
4/3/2023
14.69%
SF+
10.00%
2.00%
4/3/2028
791
776
725
Secured Debt
(9)
4/3/2023
14.58%
SF+
10.00%
2.00%
4/3/2028
7,240
7,118
6,636
Secured Debt
(9)
6/14/2023
14.58%
SF+
10.00%
2.00%
4/3/2028
2,912
2,867
2,669
Common Equity
4/3/2023
166,504
452
27
11,213
10,057
Interface Security Systems,
L.L.C
(10) Commercial Security & Alarm Services
Secured Debt
(17) (32)
12/9/2021
14.54%
SF+
10.00% 14.54%
8/7/2023
2,075
2,075
1,580
Secured Debt
(9) (14)
(17)
8/7/2019
11.67%
SF+
7.00%
11.67%
8/7/2023
7,313
7,237
13
Common Stock
12/7/2021
2,143
—
—
9,312
1,593
Invincible Boat Company,
LLC.
(10) Manufacturer of Sport Fishing Boats
Secured Debt
(9) (32)
8/28/2019
12.01%
SF+
7.50%
12/31/2026
1,037
1,033
995
Secured Debt
(9)
8/28/2019
12.01%
SF+
7.50%
12/31/2026
16,771
16,703
16,098
17,736
17,093
Isagenix International, LLC
(11) Direct Marketer of Health & Wellness
Products
Secured Debt
(9)
4/13/2023
11.25%
SF+
6.60%
8.75%
4/14/2028
3,159
2,958
663
Common Equity
4/13/2023
198,743
—
—
2,958
663
Island Pump and Tank, LLC
(10) Provider of Facility and Maintenance
Services to Fuel Retailers in Northeast U.S.
Secured Debt
(9) (25)
5/20/2024
SF+
6.50%
5/17/2029
—
(5)
(5)
Secured Debt
(9)
5/20/2024
10.35%
SF+
5.50%
5/17/2029
1,735
1,708
1,722
Secured Debt
(9)
5/20/2024
11.35%
SF+
6.50%
5/17/2029
1,735
1,708
1,722
Secured Debt
(9)
5/20/2024
12.35%
SF+
7.50%
5/17/2029
1,735
1,708
1,722
5,119
5,161
Jackmont Hospitality, Inc.
(10) Franchisee of Casual Dining Restaurants
Secured Debt
(9) (26)
10/26/2022
12.18%
SF+
7.50%
11/4/2026
792
783
792
Secured Debt
(9) (26)
2/27/2024
12.19%
SF+
7.50%
11/4/2026
627
620
627
Secured Debt
(9)
2/27/2024
12.18%
SF+
7.50%
11/4/2026
60
48
60
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
98
Secured Debt
(9)
11/8/2021
12.18%
SF+
7.50%
11/4/2026
1,843
1,821
1,843
Preferred Equity
11/8/2021
2,826,667
110
870
3,382
4,192
JDC Power Services, LLC
(10) Provider of Electrical Equipment and
Maintenance Services for Datacenters
Secured Debt
(9) (25)
6/28/2024
SF+
6.50%
6/28/2029
—
(162)
(162)
Secured Debt
(9)
6/28/2024
10.83%
SF+
6.50%
6/28/2029
60,965
59,573
60,336
59,411
60,174
Joerns Healthcare, LLC
(11) Manufacturer and Distributor of Health Care
Equipment & Supplies
Secured Debt
(9) (14)
(17)
8/21/2019
21.59%
SF+
16.00% 21.59%
8/21/2024
1,134
1,134
—
Secured Debt
(9) (14)
(17)
8/21/2019
21.59%
SF+
16.00% 21.59%
8/21/2024
1,091
1,091
—
Secured Debt
(9)
3/30/2024
13.21%
SF+
8.75%
6.00%
3/29/2029
1,770
1,770
1,770
Secured Debt
(9)
3/30/2024
13.18%
SF+
8.75%
13.18%
3/29/2029
1,314
1,314
1,314
Common Stock
8/21/2019
472,579
4,429
—
Common Stock
3/29/2024
5,461,019
200
140
9,938
3,224
JTI Electrical & Mechanical,
LLC
(10) Electrical, Mechanical and Automation
Services
Secured Debt
(9) (32)
12/22/2021
12.72%
SF+
8.00%
12/22/2026
8,421
8,354
7,977
Secured Debt
(9)
12/22/2021
12.58%
SF+
8.00%
12/22/2026
35,763
35,471
33,879
Secured Debt
(9)
2/1/2024
12.58%
SF+
8.00%
12/22/2026
3,347
3,278
3,176
Common Equity
12/22/2021
1,684,211
1,684
300
48,787
45,332
KMS, LLC
(10) Wholesaler of Closeout and Value-priced
Products
Secured Debt
(9) (14)
10/4/2021
14.50%
SF+
9.75%
10/4/2026
1,028
1,002
662
Secured Debt
(9)
11/27/2024
14.23%
SF+
9.75%
14.23%
10/4/2026
450
450
450
Secured Debt
(9)
11/27/2024
14.23%
SF+
9.75%
14.23%
10/4/2026
440
440
440
Secured Debt
(9) (14)
10/4/2021
14.50%
SF+
9.75%
10/4/2026
7,410
7,340
4,779
9,232
6,331
Lightbox Holdings, L.P.
(11) Provider of Commercial Real Estate
Software
Secured Debt
5/9/2019
9.44%
SF+
5.00%
5/9/2026
15,525
15,450
15,059
LKCM Headwater
Investments I, L.P.
(12) (13)
Investment Partnership
LP Interests
(30)
1/25/2013
2.27%
1,746
2,926
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
99
LL Management, Inc.
(10) Medical Transportation Service Provider
Secured Debt
(9)
9/17/2024
11.89%
SF+
7.25%
12/31/2025
1,156
1,156
1,156
Secured Debt
(9)
5/2/2019
11.92%
SF+
7.25%
12/31/2025
8,575
8,513
8,575
Secured Debt
(9)
5/2/2019
11.71%
SF+
7.25%
12/31/2025
5,485
5,444
5,485
Secured Debt
(9)
11/20/2020
11.71%
SF+
7.25%
12/31/2025
2,878
2,857
2,878
Secured Debt
(9)
2/26/2021
11.92%
SF+
7.25%
12/31/2025
1,118
1,110
1,118
Secured Debt
(9)
5/12/2022
11.71%
SF+
7.25%
12/31/2025
11,326
11,242
11,326
30,322
30,538
LLFlex, LLC
(10) Provider of Metal-Based Laminates
Secured Debt
(9)
8/16/2021
12.74%
SF+
8.00%
3.00%
8/16/2026
4,133
4,083
3,316
Logix Acquisition Company,
LLC
(10) Competitive Local Exchange Carrier
Secured Debt
(9) (17)
1/8/2018
12.25%
P+
4.25%
12/22/2024
24,809
24,809
19,739
Looking Glass Investments,
LLC
(12) (13)
Specialty Consumer Finance
Member Units
7/1/2015
3
125
25
Mako Steel, LP
(10) Self-Storage Design & Construction
Secured Debt
(9) (25)
3/15/2021
SF+
7.50%
3/15/2026
—
(15)
—
Secured Debt
(9)
3/28/2024
12.00%
SF+
7.50%
3/15/2026
18,973
18,822
18,973
18,807
18,973
Microbe Formulas, LLC
(10) Nutritional Supplements Provider
Secured Debt
(9) (25)
4/4/2022
SF+
5.75%
4/3/2028
—
(39)
(39)
Secured Debt
(9)
11/20/2024
10.22%
SF+
5.75%
4/3/2028
11,135
10,985
11,135
Secured Debt
(9)
4/4/2022
10.21%
SF+
5.75%
4/3/2028
19,828
19,606
19,828
30,552
30,924
Mini Melts of America, LLC
(10) Manufacturer and Distributor of Branded
Premium Beaded Ice Cream
Secured Debt
(9) (32)
11/30/2023
10.74%
SF+
6.25%
11/30/2028
575
541
575
Secured Debt
(9) (26)
11/30/2023
10.77%
SF+
6.25%
11/30/2028
1,315
1,288
1,315
Secured Debt
(9)
11/30/2023
9.76%
SF+
5.25%
11/30/2028
4,904
4,811
4,904
Secured Debt
(9)
11/30/2023
11.76%
SF+
7.25%
11/30/2028
4,904
4,807
4,904
Common Equity
11/30/2023
515,576
516
430
11,963
12,128
MonitorUS Holding, LLC
(10) (13)
(21)
SaaS Provider of Media Intelligence
Services
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
100
Secured Debt
(9)
5/24/2022
11.59%
SF+
7.00%
5/24/2027
4,101
4,065
3,907
Secured Debt
(9)
5/24/2022
11.59%
SF+
7.00%
5/24/2027
10,767
10,666
11,079
Secured Debt
(9)
5/24/2022
11.59%
SF+
7.00%
5/24/2027
18,103
17,943
18,103
Unsecured Debt
11/14/2023
8.00%
8.00%
3/31/2025
114
114
114
Unsecured Debt
3/15/2024
8.00%
8.00%
6/30/2025
54
54
54
Unsecured Debt
9/25/2024
8.00%
8.00%
12/21/2025
107
107
107
Common Stock
8/30/2022
44,445,814
889
796
33,838
34,160
NinjaTrader, LLC
(10) Operator of Futures Trading Platform
Secured Debt
(9) (25)
12/18/2019
SF+
6.50%
12/18/2026
—
(6)
(6)
Secured Debt
(9)
12/18/2019
11.24%
SF+
6.50%
12/18/2026
28,243
28,016
28,243
28,010
28,237
Obra Capital, Inc.
(10) Provider of Asset Management Services
Specialized in Insurance-Linked Strategies
Secured Debt
(9) (25)
6/21/2024
SF+
7.50%
12/21/2028
—
(4)
(4)
Secured Debt
(9)
6/21/2024
11.97%
SF+
7.50%
6/21/2029
26,352
25,653
25,884
25,649
25,880
OnPoint Industrial Services,
LLC
(10) Environmental & Facilities Services
Secured Debt
(9)
12/18/2024
11.35%
SF+
7.00%
11/16/2027
1,400
1,386
1,386
Secured Debt
(9)
4/1/2024
11.33%
SF+
7.00%
11/16/2027
3,880
3,850
3,850
5,236
5,236
Ospemifene Royalty Sub LLC
(10) Estrogen-Deficiency Drug Manufacturer and
Distributor
Secured Debt
(14)
7/8/2013
11/15/2026
4,398
4,398
12
Peaches Holding Corporation
Wholesale Provider of Consumer Packaging
Solutions
Common Equity
5/22/2024
3,226
7,221
4,540
Power System Solutions
(10) Backup Power Generation
Secured Debt
(9) (25)
6/7/2023
SF+
6.50%
6/7/2028
—
(63)
(63)
Secured Debt
(9)
6/7/2023
10.86%
SF+
6.50%
6/7/2028
6,124
5,988
6,124
Secured Debt
(9)
6/7/2023
10.90%
SF+
6.50%
6/7/2028
18,233
17,858
18,233
Common Equity
6/7/2023
1,234
1,234
3,800
25,017
28,094
PrimeFlight Aviation Services
(10) Air Freight & Logistics
Secured Debt
(9)
5/1/2023
10.58%
SF+
5.50%
5/1/2029
7,880
7,668
7,880
Secured Debt
(9)
9/7/2023
9.83%
SF+
5.50%
5/1/2029
752
730
752
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
101
Secured Debt
(9)
1/30/2024
9.83%
SF+
5.50%
5/1/2029
756
740
756
Secured Debt
(9)
6/28/2024
9.58%
SF+
5.25%
5/1/2029
859
848
859
9,986
10,247
PTL US Bidco, Inc
(10) (13)
(21)
Manufacturers of Equipment, Including
Drilling Rigs and Equipment, and Providers
of Supplies and Services to Companies
Involved in the Drilling, Evaluation and
Completion of Oil and Gas Wells
Secured Debt
(9)
8/19/2022
13.03%
SF+
8.25%
8/19/2027
6,838
6,739
6,769
Secured Debt
(9)
8/19/2022
13.03%
SF+
8.25%
8/19/2027
17,811
17,615
17,631
24,354
24,400
Purge Rite, LLC
(10) HVAC Flushing and Filtration Services
Preferred Equity
10/2/2023
32,813
3,248
3,248
Common Equity
4/1/2024
32,813
33
2,060
3,281
5,308
Richardson Sales Solutions
(10) Business Services
Secured Debt
(9) (32)
8/24/2023
11.22%
SF+
6.75%
8/24/2028
3,517
3,443
3,517
Secured Debt
(9)
8/24/2023
11.38%
SF+
6.75%
8/24/2028
34,046
33,201
34,046
Secured Debt
(9)
9/10/2024
11.43%
SF+
6.75%
8/24/2028
22,101
21,694
22,101
58,338
59,664
Roof Opco, LLC
(10) Residential Re-Roofing/Repair
Secured Debt
(9) (25)
8/27/2021
SF+
8.00%
8/27/2026
—
(5)
—
Secured Debt
(9)
8/27/2021
11.85%
SF+
7.00%
8/27/2026
3,376
3,335
3,071
Secured Debt
(9)
8/27/2021
13.85%
SF+
9.00%
8/27/2026
3,376
3,335
3,052
6,665
6,123
Rug Doctor, LLC.
(10) Carpet Cleaning Products and Machinery
Secured Debt
(9)
7/16/2021
12.52%
SF+
8.00%
2.00%
11/16/2025
5,888
5,879
5,888
Secured Debt
(9)
7/16/2021
12.52%
SF+
8.00%
2.00%
11/16/2025
7,449
7,421
7,449
13,300
13,337
South Coast Terminals
Holdings, LLC
(10) Specialty Toll Chemical Manufacturer
Secured Debt
(9) (25)
8/8/2024
SF+
5.25%
8/8/2029
—
—
—
Secured Debt
(9)
8/8/2024
9.71%
SF+
5.25%
8/8/2029
53,320
52,939
53,320
Common Equity
12/10/2021
864
864
885
53,803
54,205
SPAU Holdings, LLC
(10) Digital Photo Product Provider
Secured Debt
(9) (25)
7/1/2022
SF+
7.50%
7/1/2027
—
(32)
—
Secured Debt
(9)
7/1/2022
11.98%
SF+
7.50%
7/1/2027
15,569
15,410
15,569
Common Stock
7/1/2022
638,710
639
610
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
102
16,017
16,179
Team Public Choices, LLC
(11) Home-Based Care Employment Service
Provider
Secured Debt
12/22/2020
9.65%
SF+
5.00%
12/18/2027
14,683
14,522
14,781
TEC Services, LLC
(10)
Provider of Janitorial Service for Food
Retailers
Secured Debt
(9) (25)
12/31/2024
SF+
5.75%
12/31/2029
—
(125)
(125)
Secured Debt
(9) (25)
12/31/2024
SF+
5.75%
12/31/2029
—
(94)
(94)
Secured Debt
(9)
12/31/2024
10.13%
SF+
5.75%
12/31/2029
42,333
41,709
41,709
41,490
41,490
Tectonic Financial, LLC
Financial Services Organization
Common Stock
(8)
5/15/2017
200,000
2,000
4,720
Tex Tech Tennis, LLC
(10) Sporting Goods & Textiles
Preferred Equity
(29)
7/7/2021
1,000,000
1,000
2,290
Titan Meter Midco Corp.
(10) Value Added Distributor of a Variety of
Metering and Measurement Products and
Solutions to the Energy Industry
Secured Debt
(9) (25)
3/11/2024
SF+
6.50%
3/11/2029
—
(105)
(105)
Secured Debt
(9)
3/11/2024
10.83%
SF+
6.50%
3/11/2029
33,927
32,937
33,927
Preferred Equity
3/11/2024
1,218,750
8.00%
8.00%
1,219
1,400
34,051
35,222
U.S. TelePacific Corp.
(11) Provider of Communications and Managed
Services
Secured Debt
(9) (14)
6/1/2023
11.90%
SF+
7.40%
6.00%
5/2/2027
9,825
3,257
3,910
Secured Debt
(14)
6/1/2023
5/2/2027
1,003
20
—
3,277
3,910
UPS Intermediate, LLC
(10) Provider of Maintenance, Repair, and
Overhaul Services for Industrial Equipment
Serving the Refining, Chemical, Midstream,
Renewables, Power, and Utilities End
Markets
Secured Debt
(9)
7/29/2024
10.36%
SF+
6.00%
7/27/2029
43,339
42,558
42,904
Common Equity
7/29/2024
1,443,299
1,443
1,443
44,001
44,347
UserZoom Technologies, Inc.
(10) Provider of User Experience Research
Automation Software
Secured Debt
(9)
1/11/2023
12.75%
SF+
7.50%
4/5/2029
4,000
3,918
4,000
Veregy Consolidated, Inc.
(11) Energy Service Company
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
103
Secured Debt
(9) (25)
11/9/2020
SF+
5.25%
11/3/2025
—
(185)
(185)
Secured Debt
(9)
11/9/2020
10.85%
SF+
6.00%
11/3/2027
17,659
17,475
17,681
17,290
17,496
Vistar Media, Inc.
(10) Operator of Digital Out-of-Home
Advertising Platform
Preferred Stock
4/3/2019
70,207
767
4,676
Vitesse Systems
(10) Component Manufacturing and Machining
Platform
Secured Debt
12/22/2023
11.55%
SF+
7.00%
12/22/2028
5,795
5,673
5,795
Secured Debt
(9)
12/22/2023
11.47%
SF+
7.00%
12/22/2028
42,075
41,245
42,075
46,918
47,870
VORTEQ Coil Finishers, LLC
(10) Specialty Coating of Aluminum and Light-
Gauge Steel
Common Equity
(8)
11/30/2021
1,038,462
1,038
2,640
Wall Street Prep, Inc.
(10)
Financial Training Services
Secured Debt
(9) (25)
7/19/2021
SF+
7.00%
7/19/2026
—
(2)
(2)
Secured Debt
(9)
7/19/2021
11.74%
SF+
7.00%
7/19/2026
1,759
1,748
1,759
Common Stock
7/19/2021
400,000
400
1,210
2,146
2,967
Watterson Brands, LLC
(10) Facility Management Services
Secured Debt
12/17/2021
12.00%
4.00%
12/17/2026
2,270
2,251
2,142
Secured Debt
12/17/2021
12.00%
4.00%
12/17/2026
392
377
369
Secured Debt
12/17/2021
12.00%
4.00%
12/17/2026
16,135
16,036
15,227
Secured Debt
12/17/2021
12.00%
4.00%
12/17/2026
12,906
12,826
12,180
31,490
29,918
West Star Aviation
Acquisition, LLC
(10) Aircraft, Aircraft Engine and Engine Parts
Secured Debt
(9) (26)
3/1/2022
9.47%
SF+
5.00%
3/1/2028
2,381
2,348
2,381
Secured Debt
(9)
3/1/2022
9.60%
SF+
5.00%
3/1/2028
10,550
10,428
10,550
Secured Debt
(9)
11/3/2023
9.60%
SF+
5.00%
3/1/2028
5,250
5,166
5,250
Common Stock
(8)
3/1/2022
1,541,400
1,541
4,920
19,483
23,101
Winter Services LLC
(10) Provider of Snow Removal and Ice
Management Services
Secured Debt
(9) (32)
11/19/2021
12.81%
SF+
8.00%
11/19/2026
2,200
2,161
2,138
Secured Debt
(9)
11/19/2021
12.85%
SF+
8.00%
11/19/2026
1,874
1,856
1,821
Secured Debt
(9)
1/16/2024
11.85%
SF+
7.00%
11/19/2026
7,240
7,131
7,035
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
104
Secured Debt
(9)
1/16/2024
13.85%
SF+
9.00%
11/19/2026
7,240
7,131
7,035
18,279
18,029
Xenon Arc, Inc.
(10) Tech-enabled Distribution Services to
Chemicals and Food Ingredients Primary
Producers
Secured Debt
(9)
12/17/2021
9.70%
SF+
5.25%
12/20/2028
23,814
23,549
23,814
Secured Debt
(9)
12/17/2021
9.98%
SF+
5.25%
12/20/2028
37,442
37,063
37,442
60,612
61,256
YS Garments, LLC
(11) Designer and Provider of Branded
Activewear
Secured Debt
(9) (26)
8/22/2018
12.25%
SF+
7.50%
8/9/2026
10,892
10,739
9,949
Zips Car Wash, LLC
(10)
Express Car Wash Operator
Secured Debt
(9)
2/11/2022
11.91%
SF+
7.25%
11.91%
12/31/2024
18,023
18,023
14,852
Secured Debt
(9)
2/11/2022
11.91%
SF+
7.25%
11.91%
12/31/2024
4,518
4,518
3,723
22,541
18,575
ZRG Partners, LLC
(10)
Talent Advisory Services Provider
Secured Debt
(9)
6/14/2024
12.50%
P+
5.00%
6/14/2029
695
509
695
Secured Debt
(9)
6/14/2024
10.74%
SF+
6.00%
6/14/2029
4,158
3,956
4,158
Secured Debt
(9)
6/14/2024
10.28%
SF+
6.00%
6/14/2029
6,568
6,447
6,568
Secured Debt
(9)
6/14/2024
10.66%
SF+
6.00%
6/14/2029
47,050
46,185
47,050
57,097
58,471
Subtotal Non-Control/Non-
Affiliate Investments (71.4% of
net assets at fair value)
$
2,077,901 $
1,997,981
Total Portfolio Investments,
December 31, 2024 (176.3% of
net assets at fair value)
$
4,237,312 $
4,932,669
Money market funds (included
in cash and cash equivalents)
Dreyfus Government Cash
Management (36)
$
3,400 $
3,400
Fidelity Government Fund (32)
1,526
1,526
Fidelity Treasury (31)
1,548
1,548
Total money market funds
$
6,474 $
6,474
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
____________________
(1)
All investments are Lower Middle Market portfolio investments, unless otherwise noted. See Note C — Fair Value Hierarchy for Investments — Portfolio
Composition for a description of Lower Middle Market portfolio investments. All of the Company’s investments, unless otherwise noted, are encumbered
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
105
either as security for the Company’s Corporate Facility or SPV Facility (each as defined in Note B.5. — Summary of Significant Accounting Policies —
Deferred Financing Costs, and together the “Credit Facilities”) or in support of the SBA-guaranteed debentures issued by the Funds.
(2)
Debt investments are income producing, unless otherwise noted by footnote (14), as described below. Equity and warrants are non-income producing, unless
otherwise noted by footnote (8), as described below.
(3)
See Note C—Fair Value Hierarchy for Investments—Portfolio Composition and Schedule 12-14 for a summary of geographic location of portfolio companies.
(4)
Principal is net of repayments. Cost is net of repayments and accumulated unearned income. Negative cost is the result of the capitalized discount being greater
than the principal amount outstanding on the loan.
(5)
Control investments are defined by the 1940 Act as investments in which more than 25% of the voting securities are owned or where the ability to nominate
greater than 50% of the board representation is maintained.
(6)
Affiliate investments are defined by the 1940 Act as investments in which between 5% and 25% (inclusive) of the voting securities are owned and the
investments are not classified as Control investments.
(7)
Non-Control/Non-Affiliate investments are defined by the 1940 Act as investments that are neither Control investments nor Affiliate investments.
(8)
Income producing through dividends or distributions.
(9)
Index based floating interest rate is subject to contractual minimum interest rate. As noted in this schedule, 95% of the loans (based on the par amount) contain
Term SOFR (“SOFR”) floors which range between 0.50% and 5.25%, with a weighted-average floor of 1.32%.
(10)
Private Loan portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Private Loan portfolio
investments.
(11)
Middle Market portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Middle Market portfolio
investments.
(12)
Other Portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Other Portfolio investments.
(13)
Investment is not a qualifying asset as defined under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of total assets at the time of
acquisition of any additional non-qualifying assets.
(14)
Non-accrual and non-income producing debt investment.
(15)
All of the Company’s portfolio investments are generally subject to restrictions on resale as “restricted securities.”
(16)
External Investment Manager. Investment is not encumbered as security for the Company's Credit Facilities or in support of the SBA-guaranteed debentures
issued by the Funds.
(17)
Maturity date is under on-going negotiations with the portfolio company and other lenders, if applicable.
(18)
Investment fair value was determined using significant unobservable inputs, unless otherwise noted. See Note C—Fair Value Hierarchy for Investments—
Portfolio Composition for further discussion. Negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued
below par.
(19)
Investments may have a portion, or all, of their income received from Paid-in-Kind (“PIK”) interest or dividends. PIK interest income and cumulative dividend
income represent income not paid currently in cash. The difference between the Total Rate and PIK Rate represents the cash rate as of December 31, 2024.
(20)
All portfolio company headquarters are based in the United States, unless otherwise noted.
(21)
Portfolio company headquarters are located outside of the United States.
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
106
(22)
The Company has entered into an intercreditor agreement that entitles the Company to the “last out” tranche of the first lien secured loans, whereby the “first
out” tranche will receive priority as to the “last out” tranche with respect to payments of principal, interest, and any other amounts due thereunder. Therefore,
the Company receives a higher interest rate than the contractual stated interest rate of SOFR+7.00% (Floor 1.50%) per the credit agreement and the
Consolidated Schedule of Investments above reflects such higher rate.
(23)
The Company has entered into an intercreditor agreement that entitles the Company to the “last out” tranche of the first lien secured loans, whereby the “first
out” tranche will receive priority as to the “last out” tranche with respect to payments of principal, interest, and any other amounts due thereunder. Therefore,
the Company receives a higher interest rate than the contractual stated interest rate of 11.75% per the credit agreement and the Consolidated Schedule of
Investments above reflects such higher rate.
(24)
Investment date represents the date of initial investment in the security position.
(25)
The position is unfunded and no interest income is being earned as of December 31, 2024. The position may earn a nominal unused facility fee on committed
amounts.
(26)
Each new draw or funding on the facility has a different floating rate reset date. The rate presented represents a weighted-average rate for borrowings under the
facility, as of December 31, 2024.
(27)
Warrants are presented in equivalent shares/units with a strike price of $0.01 per share/unit.
(28)
A majority of the variable rate loans in the Company’s Investment Portfolio (defined below) bear interest at a rate that may be determined by reference to
either SOFR (“SF”) or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate (“P”)), which typically resets every one, three, or
six months at the borrower’s option. SOFR based contracts may include a credit spread adjustment (the “Adjustment”) that is charged in addition to the stated
spread. The Adjustment is applied when the SOFR rate, plus the Adjustment, exceeds the stated floor rate, as applicable. As of December 31, 2024, SOFR
based contracts in the portfolio had Adjustments ranging from 0.10% to 0.26%.
(29)
Shares/Units represent ownership in a related Real Estate or HoldCo entity.
(30)
Investment is not unitized. Presentation is made in percent of fully diluted ownership unless otherwise indicated.
(31)
Effective yield as of December 31, 2024 was approximately 4.10% on the Fidelity Treasury.
(32)
RLOC facility permits the borrower to make an interest rate election regarding the base rate on each draw under the facility. The rate presented represents a
weighted-average rate for borrowings under the facility, as of December 31, 2024.
(33)
Index based floating interest rate is subject to contractual maximum base rate of 3.00%.
(34)
Index based floating interest rate is subject to contractual maximum base rate of 1.50%.
(35)
Warrants are presented in equivalent shares/units with a strike price of $1.00 per share/unit.
(36)
Effective yield as of December 31, 2024 was approximately 4.43% on the Dreyfus Government Cash Management.
(37)
Effective yield as of December 31, 2024 was approximately 4.14% on the Fidelity Government Fund.
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2024
(dollars in thousands)
107
Control Investments (5)
Analytical Systems Keco
Holdings, LLC
Manufacturer of Liquid and Gas Analyzers
Secured Debt
(9)
8/16/2019
15.38%
SF+
10.00%
8/16/2024
$
220 $
219 $
219
Secured Debt
(9)
8/16/2019
15.38%
SF+
10.00%
8/16/2024
4,125
4,084
4,084
Preferred Member Units
5/20/2021
2,427
2,427
4,860
Preferred Member Units
8/16/2019
3,200
14.13%
3,200
—
Warrants
(27)
8/16/2019
420
8/16/2029
316
—
10,246
9,163
ASC Interests, LLC
Recreational and Educational Shooting
Facility
Secured Debt
12/31/2019
13.00%
7/31/2024
400
400
400
Secured Debt
8/1/2013
13.00%
7/31/2024
1,650
1,649
1,597
Preferred Member Units
6/28/2023
178
178
266
Member Units
8/1/2013
1,500
1,500
100
3,727
2,363
ATS Workholding, LLC
(10)
Manufacturer of Machine Cutting Tools and
Accessories
Secured Debt
(14)
11/16/2017
5.00%
9/1/2024
2,090
2,080
328
Secured Debt
(14)
11/16/2017
5.00%
9/1/2024
3,015
2,841
473
Preferred Member Units
11/16/2017
3,725,862
3,726
—
8,647
801
Barfly Ventures, LLC
(10)
Casual Restaurant Group
Secured Debt
10/15/2020
7.00%
10/31/2024
711
711
711
Member Units
10/26/2020
37
1,584
4,140
2,295
4,851
Batjer TopCo, LLC
HVAC Mechanical Contractor
Secured Debt
(25)
3/7/2022
3/7/2027
—
(6)
—
Secured Debt
3/7/2022
10.00%
3/7/2027
270
270
270
Secured Debt
3/7/2022
10.00%
3/7/2027
10,575
10,508
10,575
Preferred Stock
(8)
3/7/2022
4,073
4,095
6,150
14,867
16,995
Bolder Panther Group, LLC
Consumer Goods and Fuel Retailer
Secured Debt
(9) (22)
12/31/2020
14.48%
SF+
9.11%
10/31/2027
96,556
96,078
96,556
Class B Preferred Member
Units
(8)
12/31/2020
140,000
8.00%
14,000
31,020
110,078
127,576
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments
December 31, 2023
(dollars in thousands)
108
Brewer Crane Holdings, LLC
Provider of Crane Rental and Operating
Services
Secured Debt
(9)
1/9/2018
15.46%
L+
10.00%
1/9/2025
5,498
5,498
5,498
Preferred Member Units
(8)
1/9/2018
2,950
4,280
5,620
9,778
11,118
Bridge Capital Solutions
Corporation
Financial Services and Cash Flow Solutions
Provider
Secured Debt
7/25/2016
13.00%
12/11/2024
8,813
8,813
8,813
Secured Debt
7/25/2016
13.00%
12/11/2024
1,000
1,000
1,000
Warrants
(27)
7/25/2016
82
7/25/2026
2,132
4,290
Preferred Member Units
(8) (29)
7/25/2016
17,742
1,000
1,000
12,945
15,103
Café Brazil, LLC
Casual Restaurant Group
Member Units
(8)
6/9/2006
1,233
1,742
1,980
California Splendor Holdings
LLC
Processor of Frozen Fruits
Secured Debt
(8) (9)
3/30/2018
15.69%
SF+
10.00%
7/29/2026
28,000
27,965
27,655
Preferred Member Units
(8)
7/31/2019
3,671
15.00%
15.00%
4,601
4,601
Preferred Member Units
(8)
3/30/2018
6,157
10,775
15,695
43,341
47,951
CBT Nuggets, LLC
Produces and Sells IT Training Certification
Videos
Member Units
(8)
6/1/2006
416
1,300
50,130
Centre Technologies Holdings,
LLC
Provider of IT Hardware Services and
Software Solutions
Secured Debt
(9) (25)
1/4/2019
SF+
9.00%
1/4/2026
—
—
—
Secured Debt
(9)
1/4/2019
14.48%
SF+
9.00%
1/4/2026
17,574
17,512
17,574
Preferred Member Units
1/4/2019
13,309
6,122
11,040
23,634
28,614
Chamberlin Holding LLC
Roofing and Waterproofing Specialty
Contractor
Secured Debt
(9) (25)
2/26/2018
SF+
6.00%
2/26/2026
—
(195)
—
Secured Debt
(9)
2/26/2018
13.49%
SF+
8.00%
2/26/2026
15,620
15,617
15,620
Member Units
(8)
2/26/2018
4,347
11,440
29,320
Member Units
(8) (29)
11/2/2018
1,047,146
1,773
2,860
28,635
47,800
Charps, LLC
Pipeline Maintenance and Construction
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
109
Unsecured Debt
8/26/2020
10.00%
1/31/2026
5,694
4,678
5,694
Preferred Member Units
(8)
2/3/2017
1,829
1,963
15,690
6,641
21,384
Clad-Rex Steel, LLC
Specialty Manufacturer of Vinyl-Clad Metal
Secured Debt
(25)
10/28/2022
1/15/2024
—
—
—
Secured Debt
12/20/2016
11.50%
1/15/2024
8,560
8,560
8,422
Secured Debt
12/20/2016
10.00%
12/20/2036
1,013
1,004
1,004
Member Units
(8)
12/20/2016
717
7,280
5,200
Member Units
(29)
12/20/2016
800
509
1,129
17,353
15,755
Cody Pools, Inc.
Designer of Residential and Commercial
Pools
Secured Debt
(25)
3/6/2020
12/17/2026
—
(11)
—
Secured Debt
3/6/2020
12.50%
12/17/2026
42,073
42,042
42,073
Preferred Member Units
(8) (29)
3/6/2020
587
8,317
72,470
50,348
114,543
Colonial Electric Company
LLC
Provider of Electrical Contracting Services
Secured Debt
(25)
3/31/2021
3/31/2026
—
—
—
Secured Debt
3/31/2021
12.00%
3/31/2026
22,050
21,946
21,627
Preferred Member Units
6/27/2023
960
960
2,400
Preferred Member Units
3/31/2021
17,280
7,680
7,680
30,586
31,707
CompareNetworks Topco,
LLC
Internet Publishing and Web Search Portals
Secured Debt
(9) (17)
(25)
1/29/2019
SF+
9.00%
1/29/2022
—
—
—
Secured Debt
(9)
1/29/2019
14.48%
SF+
9.00%
1/29/2024
3,454
3,454
3,454
Preferred Member Units
(8)
1/29/2019
1,975
1,975
14,450
5,429
17,904
Compass Systems & Sales,
LLC
Designer of End-to-End Material Handling
Solutions
Secured Debt
(25)
11/22/2023
11/22/2028
—
—
—
Secured Debt
11/22/2023
13.50%
11/22/2028
17,200
17,034
17,034
Preferred Equity
11/22/2023
7,454
7,454
7,454
24,488
24,488
Copper Trail Fund
Investments
(12) (13)
Investment Partnership
LP Interests (CTMH, LP)
(8) (30)
7/17/2017
38.75%
568
568
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
110
Cybermedia Technologies,
LLC
IT and Digital Services Provider
Secured Debt
(25)
5/5/2023
5/5/2028
—
—
—
Secured Debt
5/5/2023
13.00%
5/5/2028
28,638
28,389
28,389
Preferred Member Units
5/5/2023
556
15,000
15,000
43,389
43,389
Datacom, LLC
Technology and Telecommunications
Provider
Secured Debt
3/1/2022
7.50%
12/31/2025
450
447
447
Secured Debt
3/31/2021
10.00%
12/31/2025
8,352
8,073
7,587
Preferred Member Units
3/31/2021
9,000
2,610
70
11,130
8,104
Digital Products Holdings
LLC
Designer and Distributor of Consumer
Electronics
Secured Debt
(9)
4/1/2018
15.38%
SF+
10.00%
4/27/2026
14,873
14,758
14,690
Preferred Member Units
(8)
4/1/2018
3,857
9,501
9,835
24,259
24,525
Direct Marketing Solutions,
Inc.
Provider of Omni-Channel Direct Marketing
Services
Secured Debt
2/13/2018
14.00%
2/13/2026
1,233
1,174
1,233
Secured Debt
12/27/2022
14.00%
2/13/2026
25,543
25,457
25,543
Preferred Stock
(8)
2/13/2018
8,400
8,400
20,740
35,031
47,516
Elgin AcquireCo, LLC
Manufacturer and Distributor of Engine and
Chassis Components
Secured Debt
(9) (25)
10/3/2022
SF+
6.00%
10/3/2027
—
(7)
(7)
Secured Debt
10/3/2022
12.00%
10/3/2027
18,773
18,632
18,632
Secured Debt
10/3/2022
9.00%
10/3/2052
6,313
6,252
6,252
Common Stock
10/3/2022
285
5,726
6,090
Common Stock
(29)
10/3/2022
939
1,558
1,670
32,161
32,637
Gamber-Johnson Holdings,
LLC
Manufacturer of Ruggedized Computer
Mounting Systems
Secured Debt
(9) (25)
(41)
6/24/2016
SF+
7.50%
1/1/2028
—
—
—
Secured Debt
(9) (41)
12/15/2022
10.50%
SF+
7.50%
1/1/2028
54,078
53,813
54,078
Member Units
(8)
6/24/2016
9,042
17,692
96,710
71,505
150,788
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
111
Garreco, LLC
Manufacturer and Supplier of Dental
Products
Secured Debt
(9) (42)
7/15/2013
9.50%
SF+
8.00%
1/31/2024
3,088
3,088
3,088
Member Units
7/15/2013
1,200
1,200
1,580
4,288
4,668
GRT Rubber Technologies
LLC
Manufacturer of Engineered Rubber
Products
Secured Debt
12/21/2018
11.48%
SF+
6.00%
10/29/2026
2,400
2,394
2,400
Secured Debt
12/19/2014
13.48%
SF+
8.00%
10/29/2026
40,493
40,360
40,493
Member Units
12/19/2014
5,879
13,065
44,440
55,819
87,333
Gulf Manufacturing, LLC
Manufacturer of Specialty Fabricated
Industrial Piping Products
Member Units
(8)
8/31/2007
438
2,980
9,070
Gulf Publishing Holdings,
LLC
Energy Industry Focused Media and
Publishing
Secured Debt
(9) (25)
9/29/2017
SF+
9.50%
7/1/2027
—
—
—
Secured Debt
7/1/2022
12.50%
7/1/2027
2,400
2,400
2,284
Preferred Equity
7/1/2022
63,720
5,600
2,460
Member Units
4/29/2016
3,681
3,681
—
11,681
4,744
Harris Preston Fund
Investments
(12) (13)
Investment Partnership
LP Interests (2717 MH,
L.P.)
(8) (30)
10/1/2017
49.26%
3,345
6,050
LP Interests (2717 HPP-MS,
L.P.)
(30)
3/11/2022
49.26%
248
315
3,593
6,365
Harrison Hydra-Gen, Ltd.
Manufacturer of Hydraulic Generators
Common Stock
6/4/2010
107,456
718
4,660
IG Investor, LLC
Military and Other Tactical Gear
Secured Debt
(25)
6/21/2023
6/21/2028
—
(35)
(35)
Secured Debt
6/21/2023
13.00%
6/21/2028
37,264
36,934
36,934
Common Equity
6/21/2023
14,400
14,400
14,400
51,299
51,299
Jensen Jewelers of Idaho,
LLC
Retail Jewelry Store
Secured Debt
(17) (25)
8/29/2017
P+
6.75%
11/14/2023
—
—
—
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
112
Secured Debt
(9) (17)
11/14/2006
15.25%
P+
6.75%
11/14/2023
1,998
1,998
1,998
Member Units
(8)
11/14/2006
627
811
12,420
2,809
14,418
JorVet Holdings, LLC
Supplier and Distributor of Veterinary
Equipment and Supplies
Secured Debt
3/28/2022
12.00%
3/28/2027
25,650
25,483
25,483
Preferred Equity
(8)
3/28/2022
107,406
10,741
10,741
36,224
36,224
KBK Industries, LLC
Manufacturer of Specialty Oilfield and
Industrial Products
Secured Debt
2/24/2023
9.00%
2/24/2028
4,700
4,662
4,700
Member Units
(8)
1/23/2006
325
783
22,770
5,445
27,470
Kickhaefer Manufacturing
Company, LLC
Precision Metal Parts Manufacturing
Secured Debt
10/31/2018
12.00%
10/31/2026
19,799
19,774
19,774
Secured Debt
10/31/2018
9.00%
10/31/2048
3,840
3,805
3,805
Preferred Equity
10/31/2018
581
12,240
9,690
Member Units
(29)
10/31/2018
800
992
2,730
36,811
35,999
Metalforming Holdings, LLC
Distributor of Sheet Metal Folding and
Metal Forming Equipment
Secured Debt
(25)
10/19/2022
10/19/2024
—
—
—
Secured Debt
10/19/2022
12.75%
10/19/2027
23,802
23,623
23,623
Preferred Equity
(8)
10/19/2022
5,915,585
8.00%
8.00%
6,035
6,035
Common Stock
10/19/2022
1,537,219
1,537
1,500
31,195
31,158
MH Corbin Holding LLC
Manufacturer and Distributor of Traffic
Safety Products
Secured Debt
(17)
8/31/2015
13.00%
12/31/2022
5,400
5,400
5,022
Preferred Member Units
3/15/2019
66,000
4,400
330
Preferred Member Units
9/1/2015
4,000
6,000
—
15,800
5,352
MS Private Loan Fund I, LP
(12) (13)
Investment Partnership
Secured Debt
(25)
1/26/2021
12/31/2024
—
—
—
LP Interests
(8) (30)
1/26/2021
14.51%
14,250
14,527
14,250
14,527
MS Private Loan Fund II, LP
(12) (13)
Investment Partnership
Secured Debt
(9)
9/5/2023
8.88%
SF+
3.50%
9/5/2025
23,500
23,367
23,367
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
113
LP Interests
(30)
9/5/2023
13.37%
1,561
1,561
24,928
24,928
MSC Adviser I, LLC
(16)
Third Party Investment Advisory Services
Member Units
(8)
11/22/2013
100%
29,500
174,063
MSC Income Fund, Inc.
(12) (13)
Business Development Company
Common Equity
(8)
5/2/2022
1,290,267
10,000
10,025
Mystic Logistics Holdings,
LLC
Logistics and Distribution Services Provider
for Large Volume Mailers
Secured Debt
(25)
8/18/2014
1/31/2024
—
—
—
Secured Debt
8/18/2014
10.00%
1/31/2024
5,746
5,746
5,746
Common Stock
(8)
8/18/2014
5,873
2,720
26,390
8,466
32,136
NAPCO Precast, LLC
Precast Concrete Manufacturing
Member Units
1/31/2008
2,955
2,975
11,730
Nebraska Vet AcquireCo,
LLC
Mixed-Animal Veterinary and Animal
Health Product Provider
Secured Debt
(9) (25)
12/31/2020
SF+
7.00%
12/31/2025
—
—
—
Secured Debt
12/31/2020
12.00%
12/31/2025
25,794
25,673
25,794
Secured Debt
12/31/2020
12.00%
12/31/2025
10,500
10,456
10,500
Preferred Member Units
(8)
12/31/2020
6,987
6,987
15,020
43,116
51,314
NexRev LLC
Provider of Energy Efficiency Products &
Services
Secured Debt
(25)
2/28/2018
2/28/2025
—
—
—
Secured Debt
2/28/2018
10.00%
2/28/2025
9,811
9,751
9,751
Preferred Member Units
(8)
2/28/2018
103,144,186
8,213
6,350
17,964
16,101
NRP Jones, LLC
Manufacturer of Hoses, Fittings and
Assemblies
Secured Debt
12/21/2017
12.00%
3/20/2025
2,080
2,080
2,080
Member Units
12/22/2011
65,962
114
53
Member Units
(8)
12/22/2011
3,603
1,466
5,797
3,599
NuStep, LLC
Designer, Manufacturer and Distributor of
Fitness Equipment
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
114
Secured Debt
(9)
1/31/2017
11.98%
SF+
6.50%
1/31/2025
3,600
3,600
3,600
Secured Debt
1/31/2017
12.00%
1/31/2025
18,440
18,426
18,426
Preferred Member Units
11/2/2022
2,062
2,062
5,150
Preferred Member Units
1/31/2017
406
10,200
9,240
34,288
36,416
OMi Topco, LLC
Manufacturer of Overhead Cranes
Secured Debt
8/31/2021
12.00%
8/31/2026
12,750
12,682
12,750
Preferred Member Units
(8)
4/1/2008
900
1,080
36,380
13,762
49,130
Orttech Holdings, LLC
Distributor of Industrial Clutches, Brakes
and Other Components
Secured Debt
(9) (25)
7/30/2021
SF+
11.00%
7/31/2026
—
—
—
Secured Debt
(9)
7/30/2021
16.48%
SF+
11.00%
7/31/2026
22,040
21,925
22,040
Preferred Stock
(8) (29)
7/30/2021
10,000
10,000
17,050
31,925
39,090
Pearl Meyer Topco LLC
Provider of Executive Compensation
Consulting Services
Secured Debt
4/27/2020
12.00%
12/31/2027
3,500
3,497
3,500
Secured Debt
4/27/2020
12.00%
12/31/2027
20,000
19,956
20,000
Secured Debt
4/27/2020
12.00%
12/31/2027
27,681
27,601
27,681
Preferred Equity
(8)
4/27/2020
15,061
13,000
44,090
64,054
95,271
Pinnacle TopCo, LLC
Manufacturer and Distributor of Garbage
Can Liners, Poly Bags, Produce Bags, and
Other Similar Products
Secured Debt
12/21/2023
8.00%
12/31/2028
460
444
444
Secured Debt
12/21/2023
13.00%
12/31/2028
30,640
30,339
30,339
Preferred Equity
12/21/2023
440
12,540
12,540
43,323
43,323
PPL RVs, Inc.
Recreational Vehicle Dealer
Secured Debt
(9) (25)
10/31/2019
SF+
8.75%
11/15/2027
—
(7)
—
Secured Debt
(9)
11/15/2016
14.23%
SF+
8.75%
11/15/2027
19,877
19,697
19,877
Common Stock
6/10/2010
2,000
2,150
16,980
Common Stock
(29)
6/14/2022
238,421
238
368
22,078
37,225
Principle Environmental, LLC
Noise Abatement Service Provider
Secured Debt
(25)
2/1/2011
11/15/2026
—
—
—
Secured Debt
7/1/2011
13.00%
11/15/2026
5,897
5,829
5,829
Preferred Member Units
(8)
2/1/2011
21,806
5,709
10,750
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
115
Common Stock
1/27/2021
1,037
1,200
510
12,738
17,089
Quality Lease Service, LLC
Provider of Rigsite Accommodation Unit
Rentals and Related Services
Member Units
6/8/2015
1,000
7,546
460
River Aggregates, LLC
Processor of Construction Aggregates
Member Units
(29)
12/20/2013
1,500
369
3,710
Robbins Bros. Jewelry, Inc.
Bridal Jewelry Retailer
Secured Debt
(25)
12/15/2021
12/15/2026
—
(26)
(26)
Secured Debt
12/15/2021
12.50%
12/15/2026
34,110
33,909
30,798
Preferred Equity
12/15/2021
11,070
11,070
—
44,953
30,772
Tedder Industries, LLC
Manufacturer of Firearm Holsters and
Accessories
Secured Debt
(17)
8/31/2018
12.00%
8/31/2023
1,840
1,840
1,726
Secured Debt
(17)
8/31/2018
12.00%
8/31/2023
15,200
15,200
14,262
Preferred Member Units
8/28/2023
6,605
661
—
Preferred Member Units
2/1/2023
5,643
564
—
Preferred Member Units
8/31/2018
544
9,245
—
27,510
15,988
Televerde, LLC
Provider of Telemarketing and Data Services
Preferred Stock
1/26/2022
248
718
1,794
Member Units
(8)
1/6/2011
460
1,290
4,734
2,008
6,528
Trantech Radiator Topco,
LLC
Transformer Cooling Products and Services
Secured Debt
(25)
5/31/2019
5/31/2024
—
(1)
—
Secured Debt
5/31/2019
12.00%
5/31/2024
7,920
7,911
7,920
Common Stock
(8)
5/31/2019
615
4,655
12,740
12,565
20,660
Vision Interests, Inc.
Manufacturer / Installer of Commercial
Signage
Series A Preferred Stock
(8)
12/23/2011
3,000,000
3,000
3,000
Volusion, LLC
Provider of Online Software-as-a-Service
eCommerce Solutions
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
116
Secured Debt
3/31/2023
10.00%
3/31/2025
2,100
2,100
2,100
Preferred Member Units
3/31/2023
5,097,595
8,646
7,250
Preferred Member Units
3/31/2023
142,512
—
—
Preferred Member Units
1/26/2015
4,876,670
14,000
—
Common Stock
3/31/2023
1,802,780
2,576
—
27,322
9,350
VVS Holdco LLC
Omnichannel Retailer of Animal Health
Products
Secured Debt
(9) (17)
(25)
12/1/2021
SF+
6.00%
12/1/2023
—
—
—
Secured Debt
12/1/2021
11.50%
12/1/2026
28,200
28,035
28,035
Preferred Equity
(8) (29)
12/1/2021
12,240
12,240
12,240
40,275
40,275
Ziegler’s NYPD, LLC
Casual Restaurant Group
Secured Debt
6/1/2015
12.00%
10/1/2024
450
450
450
Secured Debt
10/1/2008
6.50%
10/1/2024
1,000
1,000
945
Secured Debt
10/1/2008
14.00%
10/1/2024
2,750
2,750
2,080
Preferred Member Units
6/30/2015
10,072
2,834
—
Warrants
(27)
7/1/2015
587
10/1/2025
600
—
7,634
3,475
Subtotal Control Investments
(81.0% of net assets at fair
value)
$
1,435,131 $
2,006,698
Affiliate Investments (6)
AAC Holdings, Inc.
(11)
Substance Abuse Treatment Service
Provider
Secured Debt
1/31/2023
18.00%
18.00%
6/25/2025
$
423 $
419 $
418
Secured Debt
12/11/2020
18.00%
18.00%
6/25/2025
14,053
13,970
13,895
Common Stock
12/11/2020
593,928
3,148
—
Warrants
(27)
12/11/2020
554,353
12/11/2025
—
—
17,537
14,313
Boccella Precast Products
LLC
Manufacturer of Precast Hollow Core
Concrete
Secured Debt
9/23/2021
10.00%
2/28/2027
320
320
320
Member Units
6/30/2017
2,160,000
2,256
1,990
2,576
2,310
Buca C, LLC
Casual Restaurant Group
Secured Debt
(17)
6/30/2015
12.00%
8/31/2023
16,980
16,980
12,144
Preferred Member Units
6/30/2015
6
6.00%
6.00%
4,770
—
21,750
12,144
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
117
Career Team Holdings, LLC
Provider of Workforce Training and Career
Development Services
Secured Debt
(9)
12/17/2021
11.38%
SF+
6.00%
12/17/2026
900
881
881
Secured Debt
12/17/2021
13.00%
12/17/2026
20,025
19,906
19,906
Common Stock
12/17/2021
450,000
4,500
4,500
25,287
25,287
Classic H&G Holdings, LLC
Provider of Engineered Packaging Solutions
Secured Debt
(9)
3/12/2020
11.69%
SF+
6.00%
3/12/2025
4,560
4,560
4,560
Secured Debt
3/12/2020
8.00%
3/12/2025
19,274
19,224
19,274
Preferred Member Units
(8)
3/12/2020
154
5,760
16,000
29,544
39,834
Congruent Credit
Opportunities Funds
(12) (13)
Investment Partnership
LP Interests (Congruent
Credit Opportunities Fund
III, LP)
(8) (30)
2/4/2015
12.49%
4,778
4,352
DMA Industries, LLC
Distributor of Aftermarket Ride Control
Products
Secured Debt
11/19/2021
12.00%
11/19/2026
18,800
18,685
18,800
Preferred Equity
11/19/2021
5,944
5,944
7,660
24,629
26,460
Dos Rios Partners
(12) (13)
Investment Partnership
LP Interests (Dos Rios
Partners, LP)
(30)
4/25/2013
20.24%
6,313
8,443
LP Interests (Dos Rios
Partners - A, LP)
(30)
4/25/2013
6.43%
2,005
2,631
8,318
11,074
Dos Rios Stone Products LLC
(10)
Limestone and Sandstone Dimension Cut
Stone Mining Quarries
Class A Preferred Units
(29)
6/27/2016
2,000,000
2,000
1,580
EIG Fund Investments
(12) (13)
Investment Partnership
LP Interests (EIG Global
Private Debt Fund-A, L.P.)
(8) (30)
11/6/2015
5,000,000
808
760
Flame King Holdings, LLC
Propane Tank and Accessories Distributor
Preferred Equity
(8)
10/29/2021
9,360
10,400
27,900
Freeport Financial Funds
(12) (13)
Investment Partnership
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
118
LP Interests (Freeport
Financial SBIC Fund LP)
(30)
3/23/2015
9.30%
2,859
3,012
LP Interests (Freeport First
Lien Loan Fund III LP)
(8) (30)
7/31/2015
5.95%
4,160
3,704
7,019
6,716
GFG Group, LLC
Grower and Distributor of a Variety of
Plants and Products to Other Wholesalers,
Retailers and Garden Centers
Secured Debt
3/31/2021
8.00%
3/31/2026
9,345
9,302
9,345
Preferred Member Units
(8)
3/31/2021
226
4,900
11,460
14,202
20,805
Harris Preston Fund
Investments
(12) (13)
Investment Partnership
LP Interests (HPEP 3, L.P.)
(30)
8/9/2017
8.22%
2,296
4,225
LP Interests (HPEP 4, L.P.)
(30)
7/12/2022
11.61%
3,773
3,773
LP Interests (423 COR,
L.P.)
(8) (30)
6/2/2022
22.93%
1,400
1,869
LP Interests (423 HAR,
L.P.)
(30)
6/2/2023
15.60%
750
996
8,219
10,863
Hawk Ridge Systems, LLC
Value-Added Reseller of Engineering
Design and Manufacturing Solutions
Secured Debt
(9)
12/2/2016
11.65%
SF+
6.00%
1/15/2026
1,974
1,972
1,974
Secured Debt
12/2/2016
12.50%
1/15/2026
45,256
45,144
45,256
Preferred Member Units
12/2/2016
226
2,850
17,460
Preferred Member Units
(29)
12/2/2016
226
150
920
50,116
65,610
Houston Plating and Coatings,
LLC
Provider of Plating and Industrial Coating
Services
Unsecured Convertible Debt
5/1/2017
8.00%
10/2/2024
3,000
3,000
2,880
Member Units
(8)
1/8/2003
322,297
2,352
3,340
5,352
6,220
I-45 SLF LLC
(12) (13)
Investment Partnership
Member Units (Fully diluted
20.0%; 21.75% profits
interest)
(8)
10/20/2015
20,200
13,490
Independent Pet Partners
Intermediate Holdings, LLC
(10)
Omnichannel Retailer of Specialty Pet
Products
Common Equity
4/7/2023
18,006,407
18,300
17,690
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
119
Infinity X1 Holdings, LLC
Manufacturer and Supplier of Personal
Lighting Products
Secured Debt
3/31/2023
13.00%
3/31/2028
17,550
17,403
17,403
Preferred Equity
3/31/2023
80,000
4,000
4,000
21,403
21,403
Integral Energy Services
(10)
Nuclear Power Staffing Services
Secured Debt
(9)
8/20/2021
13.16%
SF+
7.50%
8/20/2026
14,485
14,323
13,891
Preferred Equity
12/7/2023
3,188
10.00%
10.00%
227
300
Common Stock
8/20/2021
9,968
1,356
160
15,906
14,351
Iron-Main Investments, LLC
Consumer Reporting Agency Providing
Employment Background Checks and Drug
Testing
Secured Debt
8/2/2021
13.50%
1/31/2028
4,514
4,487
4,487
Secured Debt
9/1/2021
13.50%
1/31/2028
2,940
2,922
2,922
Secured Debt
11/15/2021
13.50%
1/31/2028
8,944
8,944
8,944
Secured Debt
11/15/2021
13.50%
1/31/2028
19,624
19,503
19,503
Secured Debt
1/31/2023
13.50%
1/31/2028
10,562
10,273
10,273
Common Stock
8/3/2021
203,016
2,756
2,680
48,885
48,809
ITA Holdings Group, LLC
Air Ambulance Services
Secured Debt
(9)
6/21/2023
16.59%
SF+
9.00%
2.00%
6/21/2027
826
816
816
Secured Debt
(9)
6/21/2023
16.59%
SF+
9.00%
2.00%
6/21/2027
711
697
697
Secured Debt
(9)
6/21/2023
15.59%
SF+
8.00%
2.00%
6/21/2027
4,362
3,430
3,430
Secured Debt
(9)
6/21/2023
17.59%
SF+
10.00%
2.00%
6/21/2027
4,362
3,430
3,430
Warrants
(27)
6/21/2023
193,307
6/21/2033
2,091
2,091
10,464
10,464
Johnson Downie Opco, LLC
Executive Search Services
Secured Debt
(25)
12/10/2021
12/10/2026
—
(18)
—
Secured Debt
12/10/2021
15.00%
12/10/2026
24,207
24,066
24,207
Preferred Equity
12/10/2021
3,310
3,635
9,620
27,683
33,827
OnAsset Intelligence, Inc.
Provider of Transportation Monitoring /
Tracking Products and Services
Secured Debt
(14)
4/18/2011
12.00%
12.00%
12/31/2024
4,415
4,415
1,493
Secured Debt
(14)
5/10/2013
12.00%
12.00%
12/31/2024
2,116
2,116
716
Secured Debt
(14)
3/21/2014
12.00%
12.00%
12/31/2024
983
983
332
Secured Debt
(14)
5/20/2014
12.00%
12.00%
12/31/2024
964
964
326
Unsecured Debt
(14)
6/5/2017
10.00%
10.00%
12/31/2024
305
305
305
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
120
Preferred Stock
4/18/2011
912
7.00%
7.00%
1,981
—
Common Stock
4/15/2021
635
830
—
Warrants
(27)
4/18/2011
4,699
5/10/2025
1,089
—
12,683
3,172
Oneliance, LLC
Construction Cleaning Company
Secured Debt
(9) (17)
(25)
8/6/2021
SF+
11.00%
8/6/2023
—
—
—
Secured Debt
(9)
8/6/2021
16.48%
SF+
11.00%
8/6/2026
5,440
5,411
5,350
Preferred Stock
8/6/2021
1,128
1,128
1,128
6,539
6,478
Rocaceia, LLC (Quality Lease
and Rental Holdings, LLC)
Provider of Rigsite Accommodation Unit
Rentals and Related Services
Preferred Member Units
1/8/2013
250
2,500
—
SI East, LLC
Rigid Industrial Packaging Manufacturing
Secured Debt
8/31/2018
11.25%
6/16/2028
1,125
1,108
1,125
Secured Debt
(23)
6/16/2023
12.47%
6/16/2028
54,536
54,295
54,536
Preferred Member Units
(8)
8/31/2018
165
1,525
19,170
56,928
74,831
Slick Innovations, LLC
Text Message Marketing Platform
Secured Debt
9/13/2018
14.00%
12/22/2027
11,440
11,345
11,440
Common Stock
9/13/2018
70,000
456
2,310
11,801
13,750
Student Resource Center,
LLC
(10)
Higher Education Services
Secured Debt
(14)
12/31/2022
8.50%
8.50%
12/31/2027
5,327
4,884
3,190
Preferred Equity
12/31/2022
5,907,649
—
—
4,884
3,190
Superior Rigging & Erecting
Co.
Provider of Steel Erecting, Crane Rental &
Rigging Services
Secured Debt
8/31/2020
12.00%
8/31/2025
20,500
20,427
20,427
Preferred Member Units
8/31/2020
1,636
4,500
5,940
24,927
26,367
The Affiliati Network, LLC
Performance Marketing Solutions
Secured Debt
8/9/2021
13.00%
8/9/2026
160
150
150
Secured Debt
8/9/2021
13.00%
8/9/2026
7,521
7,475
7,347
Preferred Stock
9/1/2023
172,110
172
172
Preferred Stock
(8)
8/9/2021
1,280,000
6,400
6,400
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
121
14,197
14,069
UnionRock Energy Fund II,
LP
(12) (13)
Investment Partnership
LP Interests
(30)
6/15/2020
11.11%
3,719
5,694
UnionRock Energy Fund III,
LP
(12) (13)
Investment Partnership
LP Interests
(30)
6/6/2023
25.00%
2,493
2,838
UniTek Global Services, Inc.
(11)
Provider of Outsourced Infrastructure
Services
Secured Convertible Debt
1/1/2021
15.00%
15.00%
6/30/2028
1,714
1,714
3,889
Secured Convertible Debt
1/1/2021
15.00%
15.00%
6/30/2028
840
840
1,908
Preferred Stock
(8)
8/29/2019
1,133,102
20.00%
20.00%
2,609
2,833
Preferred Stock
8/21/2018
1,521,122
20.00%
20.00%
2,188
3,698
Preferred Stock
6/30/2017
2,281,682
19.00%
19.00%
3,667
—
Preferred Stock
1/15/2015
4,336,866
13.50%
13.50%
7,924
—
Common Stock
4/1/2020
945,507
—
—
18,942
12,328
Universal Wellhead Services
Holdings, LLC
(10)
Provider of Wellhead Equipment, Designs,
and Personnel to the Oil & Gas Industry
Preferred Member Units
(29)
12/7/2016
716,949
14.00%
14.00%
1,032
150
Member Units
(29)
12/7/2016
4,000,000
4,000
—
5,032
150
World Micro Holdings, LLC
Supply Chain Management
Secured Debt
12/12/2022
13.00%
12/12/2027
12,123
12,028
12,028
Preferred Equity
(8)
12/12/2022
3,845
3,845
3,845
15,873
15,873
Subtotal Affiliate Investments
(24.8% of net assets at fair
value)
$
575,894 $
615,002
Non-Control Investments (7)
AB Centers Acquisition
Corporation
(10)
Applied Behavior Analysis Therapy
Provider
Secured Debt
(9) (25)
9/6/2022
P+
5.00%
9/6/2028
$
— $
(62) $
—
Secured Debt
(9)
9/6/2022
11.43%
SF+
6.00%
9/6/2028
1,921
1,894
1,921
Secured Debt
(9)
9/6/2022
11.43%
SF+
6.00%
9/6/2028
19,817
19,303
19,817
Secured Debt
(9)
6/21/2023
11.43%
SF+
6.00%
9/6/2028
1,372
1,305
1,372
22,440
23,110
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
122
Acumera, Inc.
(10)
Managed Security Service Provider
Secured Debt
(9) (25)
6/7/2023
SF+
7.50%
6/7/2028
—
(2)
(2)
Secured Debt
(9)
6/7/2023
12.98%
SF+
7.50%
6/7/2028
24,796
24,526
24,796
Warrants
(43)
6/7/2023
17,525
5/19/2028
—
110
24,524
24,904
Adams Publishing Group,
LLC
(10)
Local Newspaper Operator
Secured Debt
(9) (41)
3/11/2022
11.00%
SF+
7.00%
1.00%
3/11/2027
7,841
7,841
7,684
Secured Debt
(9) (41)
3/11/2022
11.00%
SF+
7.00%
1.00%
3/11/2027
21,207
21,168
20,784
29,009
28,468
ADS Tactical, Inc.
(11)
Value-Added Logistics and Supply Chain
Provider to the Defense Industry
Secured Debt
(9)
3/29/2021
11.22%
SF+
5.75%
3/19/2026
10,952
10,856
10,860
AMEREQUIP LLC
(10)
Full Services Provider Including Design,
Engineering and Manufacturing of
Commercial and Agricultural Equipment
Secured Debt
(9) (25)
8/31/2022
SF+
7.40%
8/31/2027
—
(108)
(108)
Secured Debt
(9)
8/31/2022
12.76%
SF+
7.40%
8/31/2027
28,422
28,018
28,422
Common Stock
(8)
8/31/2022
235
1,844
2,120
29,754
30,434
American Health Staffing
Group, Inc.
(10)
Healthcare Temporary Staffing
Secured Debt
(9) (25)
11/19/2021
P+
5.00%
11/19/2026
—
(8)
(8)
Secured Debt
(9)
11/19/2021
13.50%
P+
5.00%
11/19/2026
6,550
6,512
6,550
6,504
6,542
American Nuts, LLC
(10)
Roaster, Mixer and Packager of Bulk Nuts
and Seeds
Secured Debt
(9)
3/11/2022
15.29%
SF+
9.75%
15.29%
4/10/2026
6,462
6,413
5,495
Secured Debt
(9)
3/11/2022
15.29%
SF+
9.75%
15.29%
4/10/2026
10,507
10,413
8,922
Secured Debt
(9) (14)
3/11/2022
17.29%
SF+
11.75% 17.29%
4/10/2026
5,705
5,645
3,369
Secured Debt
(9) (14)
3/11/2022
17.29%
SF+
11.75% 17.29%
4/10/2026
9,283
9,169
5,482
31,640
23,268
American Teleconferencing
Services, Ltd.
(11)
Provider of Audio Conferencing and Video
Collaboration Solutions
Secured Debt
(14) (17)
9/17/2021
4/7/2023
2,980
2,980
134
Secured Debt
(14) (17)
5/19/2016
6/8/2023
14,370
13,706
647
16,686
781
ArborWorks, LLC
(10)
Vegetation Management Services
Secured Debt
11/6/2023
15.00%
15.00%
11/6/2028
1,907
1,907
1,907
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
123
Secured Debt
(9)
11/6/2023
12.04%
SF+
6.50%
12.04%
11/6/2028
7,149
7,149
7,149
Preferred Equity
11/6/2023
32,507
14,060
14,060
Preferred Equity
11/6/2023
32,507
—
—
Common Equity
11/9/2021
3,898
234
—
23,350
23,116
Archer Systems, LLC
(10)
Mass Tort Settlement Administration
Solutions Provider
Common Stock
8/11/2022
1,387,832
1,388
2,230
ATS Operating, LLC
(10)
For-Profit Thrift Retailer
Secured Debt
(9)
1/18/2022
12.16%
SF+
6.50%
1/18/2027
360
360
360
Secured Debt
(9)
1/18/2022
11.16%
SF+
5.50%
1/18/2027
6,660
6,660
6,660
Secured Debt
(9)
1/18/2022
13.16%
SF+
7.50%
1/18/2027
6,660
6,660
6,660
Common Stock
1/18/2022
720,000
720
670
14,400
14,350
AVEX Aviation Holdings,
LLC
(10)
Specialty Aircraft Dealer & MRO Provider
Secured Debt
(9) (25)
12/23/2022
SF+
7.25%
12/23/2027
—
(120)
(38)
Secured Debt
(9)
12/23/2022
12.76%
SF+
7.25%
12/23/2027
24,602
23,816
24,080
Common Equity
(8)
12/15/2021
984
965
892
24,661
24,934
Berry Aviation, Inc.
(10)
Charter Airline Services
Preferred Member Units
(29)
11/12/2019
122,416
—
200
Preferred Member Units
(8) (29)
7/6/2018
1,548,387
—
2,560
—
2,760
Bettercloud, Inc.
(10)
SaaS Provider of Workflow Management
and Business Application Solutions
Secured Debt
(9) (25)
6/30/2022
SF+
7.25%
6/30/2028
—
(62)
(62)
Secured Debt
(9)
6/30/2022
12.64%
SF+
7.25%
6.25%
6/30/2028
29,403
29,006
27,550
28,944
27,488
Binswanger Enterprises, LLC
(10)
Glass Repair and Installation Service
Provider
Member Units
3/10/2017
1,050,000
1,050
120
Bluestem Brands, Inc.
(11)
Multi-Channel Retailer of General
Merchandise
Secured Debt
(9)
10/19/2022
16.00%
P+
7.50%
15.00%
8/28/2025
1,885
1,885
1,767
Secured Debt
(9)
8/28/2020
13.96%
SF+
8.50%
12.96%
8/28/2025
3,676
3,076
3,446
Common Stock
10/1/2020
723,184
1
550
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
124
Warrants
(27)
10/19/2022
163,295
10/19/2032
1,036
120
5,998
5,883
Bond Brand Loyalty ULC
(10) (13)
(21)
Provider of Loyalty Marketing Services
Secured Debt
(9) (25)
5/1/2023
SF+
7.00%
5/1/2028
—
(25)
(25)
Secured Debt
(9)
5/1/2023
11.54%
SF+
6.00%
5/1/2028
6,405
6,294
6,405
Secured Debt
(9)
5/1/2023
13.54%
SF+
8.00%
5/1/2028
6,405
6,294
6,405
Preferred Equity
5/1/2023
571
571
500
Common Equity
5/1/2023
571
—
—
13,134
13,285
Brainworks Software, LLC
(10)
Advertising Sales and Newspaper
Circulation Software
Secured Debt
(9) (14)
(17)
8/12/2014
15.75%
P+
7.25%
7/22/2019
761
761
761
Secured Debt
(9) (14)
(17)
8/12/2014
15.75%
P+
7.25%
7/22/2019
7,056
7,056
1,075
7,817
1,836
Brightwood Capital Fund
Investments
(12) (13)
Investment Partnership
LP Interests (Brightwood
Capital Fund III, LP)
(30)
7/21/2014
1.55%
6,527
4,080
LP Interests (Brightwood
Capital Fund IV, LP)
(8) (30)
10/26/2016
0.59%
4,350
4,358
LP Interests (Brightwood
Capital Fund V, LP)
(8) (30)
7/12/2021
0.82%
2,000
2,448
12,877
10,886
Burning Glass Intermediate
Holding Company, Inc.
(10)
Provider of Skills-Based Labor Market
Analytics
Secured Debt
(9)
6/14/2021
10.46%
SF+
5.00%
6/10/2026
465
445
465
Secured Debt
(9)
6/14/2021
10.46%
SF+
5.00%
6/10/2028
19,681
19,455
19,681
19,900
20,146
CAI Software LLC
Provider of Specialized Enterprise Resource
Planning Software
Preferred Equity
12/13/2021
1,788,527
1,789
1,789
Preferred Equity
12/13/2021
596,176
—
—
1,789
1,789
CaseWorthy, Inc.
(10)
SaaS Provider of Case Management
Solutions
Secured Debt
(9) (25)
5/18/2022
SF+
6.00%
5/18/2027
—
(8)
(8)
Secured Debt
(9)
5/18/2022
11.61%
SF+
6.00%
5/18/2027
7,933
7,872
7,933
Secured Debt
(9)
5/18/2022
11.61%
SF+
6.00%
5/18/2027
6,102
6,061
6,102
Common Equity
12/30/2022
245,926
246
246
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
125
14,171
14,273
Channel Partners
Intermediateco, LLC
(10)
Outsourced Consumer Services Provider
Secured Debt
(9) (51)
2/7/2022
12.60%
SF+
7.00%
2/7/2027
2,071
1,901
1,988
Secured Debt
(9)
2/7/2022
12.66%
SF+
7.00%
2/7/2027
36,540
36,077
35,064
Secured Debt
(9)
6/24/2022
12.66%
SF+
7.00%
2/7/2027
2,024
1,999
1,943
Secured Debt
(9)
3/27/2023
12.66%
SF+
7.00%
2/7/2027
4,893
4,792
4,695
44,769
43,690
Clarius BIGS, LLC
(10)
Prints & Advertising Film Financing
Secured Debt
(14) (17)
9/23/2014
1/5/2015
2,677
2,677
16
Computer Data Source, LLC
(10)
Third Party Maintenance Provider to the
Data Center Ecosystem
Secured Debt
(9) (34)
8/6/2021
13.52%
SF+
8.00%
8/6/2026
5,000
4,948
4,848
Secured Debt
(9)
8/6/2021
13.52%
SF+
8.00%
8/6/2026
18,313
18,119
17,757
23,067
22,605
Construction Supply
Investments, LLC
(10)
Distribution Platform of Specialty
Construction Materials to Professional
Concrete and Masonry Contractors
Member Units
12/29/2016
861,618
3,335
23,135
CQ Fluency, LLC
(10)
Global Language Services Provider
Secured Debt
(9) (25)
12/27/2023
SF+
7.00%
6/27/2027
—
(66)
(66)
Secured Debt
(9) (25)
12/27/2023
SF+
7.00%
6/27/2027
—
(66)
(66)
Secured Debt
(9)
12/27/2023
12.45%
SF+
7.00%
6/27/2027
11,250
10,920
10,920
10,788
10,788
Dalton US Inc.
(10)
Provider of Supplemental Labor Services
Common Stock
8/16/2022
515
720
830
DTE Enterprises, LLC
(10)
Industrial Powertrain Repair and Services
Class AA Preferred Member
Units (non-voting)
(8)
4/13/2018
10.00%
10.00%
1,284
1,284
Class A Preferred Member
Units
4/13/2018
776,316
8.00%
8.00%
776
260
2,060
1,544
Dynamic Communities, LLC
(10)
Developer of Business Events and Online
Community Groups
Secured Debt
(9)
12/20/2022
10.45%
SF+
5.00%
10.45%
12/31/2026
2,071
1,912
1,912
Secured Debt
(9)
12/20/2022
12.45%
SF+
7.00%
12.45%
12/31/2026
2,113
1,880
1,859
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
126
Preferred Equity
12/20/2022
125,000
128
60
Preferred Equity
12/20/2022
2,376,241
—
—
Common Equity
12/20/2022
1,250,000
—
—
3,920
3,831
Eastern Wholesale Fence LLC
(10)
Manufacturer and Distributor of Residential
and Commercial Fencing Solutions
Secured Debt
(9)
11/19/2020
13.50%
SF+
8.00%
10/30/2025
967
930
927
Secured Debt
(9)
11/19/2020
13.50%
SF+
8.00%
10/30/2025
4,792
4,758
4,596
Secured Debt
(9)
11/19/2020
13.50%
SF+
8.00%
10/30/2025
9,557
9,483
9,167
Secured Debt
(9)
4/20/2021
13.50%
SF+
8.00%
10/30/2025
1,982
1,964
1,901
Secured Debt
(9)
10/14/2021
13.50%
SF+
8.00%
10/30/2025
10,846
10,747
10,403
27,882
26,994
Emerald Technologies
Acquisition Co, Inc.
(11)
Design & Manufacturing
Secured Debt
(9)
2/10/2022
11.79%
SF+
6.25%
12/29/2027
8,965
8,841
8,158
EnCap Energy Fund
Investments
(12) (13)
Investment Partnership
LP Interests (EnCap Energy
Capital Fund VIII, L.P.)
(8) (30)
1/22/2015
0.14%
3,567
1,918
LP Interests (EnCap Energy
Capital Fund VIII Co-
Investors, L.P.)
(8) (30)
1/21/2015
0.38%
1,980
899
LP Interests (EnCap Energy
Capital Fund IX, L.P.)
(8) (30)
1/22/2015
0.10%
3,564
1,720
LP Interests (EnCap Energy
Capital Fund X, L.P.)
(8) (30)
3/25/2015
0.15%
6,742
5,858
LP Interests (EnCap
Flatrock Midstream Fund II,
L.P.)
(8) (30)
3/30/2015
0.84%
5,083
1,413
LP Interests (EnCap
Flatrock Midstream Fund
III, L.P.)
(8) (30)
3/27/2015
0.25%
4,495
4,056
25,431
15,864
Engineering Research &
Consulting, LLC
(10)
Provider of Engineering & Consulting
Services to US Department of Defense
Secured Debt
(9) (25)
5/23/2022
P+
5.50%
5/23/2027
—
(35)
—
Secured Debt
(9)
5/23/2022
11.98%
SF+
6.50%
5/23/2028
16,134
15,899
16,134
15,864
16,134
Escalent, Inc.
(10)
Market Research and Consulting Firm
Secured Debt
(9) (25)
4/7/2023
SF+
8.00%
4/7/2029
—
(35)
(35)
Secured Debt
(9)
4/7/2023
13.45%
SF+
8.00%
4/7/2029
26,313
25,620
26,313
Common Equity
4/7/2023
649,794
663
730
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
127
26,248
27,008
Event Holdco, LLC
(10)
Event and Learning Management Software
for Healthcare Organizations and Systems
Secured Debt
(9)
12/22/2021
12.61%
SF+
7.00%
12/22/2026
3,692
3,670
3,626
Secured Debt
(9)
12/22/2021
12.61%
SF+
7.00%
12/22/2026
44,169
43,905
43,373
47,575
46,999
Fuse, LLC
(11)
Cable Networks Operator
Secured Debt
6/30/2019
12.00%
12/31/2026
1,810
1,810
1,320
Common Stock
6/30/2019
10,429
256
—
2,066
1,320
Garyline, LLC
(10)
Manufacturer of Consumer Plastic Products
Secured Debt
(9) (25)
11/10/2023
SF+
6.75%
11/10/2028
—
(256)
(256)
Secured Debt
(9)
11/10/2023
12.22%
SF+
6.75%
11/10/2028
32,471
31,529
31,529
Common Equity
11/10/2023
705,882
706
706
31,979
31,979
GS HVAM Intermediate, LLC
(10)
Specialized Food Distributor
Secured Debt
(9) (52)
10/18/2019
11.96%
SF+
6.50%
4/2/2025
1,545
1,542
1,545
Secured Debt
(9) (25)
10/18/2019
SF+
6.50%
4/2/2025
—
(9)
(9)
Secured Debt
(9)
10/18/2019
11.96%
SF+
6.50%
4/2/2025
10,624
10,605
10,624
Secured Debt
(9)
9/15/2023
11.96%
SF+
6.50%
4/2/2025
952
952
952
Secured Debt
(9)
12/22/2023
11.96%
SF+
6.50%
4/2/2025
227
224
227
13,314
13,339
GULF PACIFIC
ACQUISITION, LLC
(10)
Rice Processor and Merchandiser
Secured Debt
(9) (47)
9/30/2022
11.28%
SF+
5.75%
9/30/2028
454
438
454
Secured Debt
(9)
9/30/2022
11.38%
SF+
5.75%
9/30/2028
301
286
301
Secured Debt
(9)
9/30/2022
11.25%
SF+
5.75%
9/30/2028
3,615
3,558
3,615
4,282
4,370
HDC/HW Intermediate
Holdings
(10)
Managed Services and Hosting Provider
Secured Debt
(9) (17)
12/21/2018
14.34%
SF+
9.50%
14.34%
12/21/2023
370
370
336
Secured Debt
(9) (17)
12/21/2018
14.34%
SF+
9.50%
14.34%
12/21/2023
3,751
3,751
3,406
4,121
3,742
HEADLANDS OP-CO LLC
(10)
Clinical Trial Sites Operator
Secured Debt
(9) (25)
8/1/2022
SF+
6.50%
8/1/2027
—
(48)
(48)
Secured Debt
(9)
8/1/2022
11.86%
SF+
6.50%
8/1/2027
6,733
6,622
6,733
Secured Debt
(9)
8/1/2022
11.86%
SF+
6.50%
8/1/2027
16,622
16,384
16,622
22,958
23,307
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
128
HOWLCO LLC
(11) (13)
(21)
Provider of Accounting and Business
Development Software to Real Estate End
Markets
Secured Debt
(9)
8/19/2021
11.53%
SF+
6.00%
10/23/2026
25,162
25,162
24,397
Hybrid Promotions, LLC
(10)
Wholesaler of Licensed, Branded and
Private Label Apparel
Secured Debt
(9)
6/30/2021
15.91%
SF+
8.25%
2.00%
6/30/2026
7,167
7,031
6,581
IG Parent Corporation
(11)
Software Engineering
Secured Debt
(9) (25)
7/30/2021
SF+
5.75%
7/30/2026
—
(20)
—
Secured Debt
(9)
7/30/2021
10.96%
SF+
5.50%
7/30/2028
9,399
9,294
9,399
Secured Debt
(9)
7/30/2021
10.96%
SF+
5.50%
7/30/2028
4,953
4,899
4,953
14,173
14,352
Imaging Business Machines,
L.L.C.
(10)
Technology Hardware & Equipment
Secured Debt
(9) (33)
6/8/2023
12.41%
SF+
7.00%
6/30/2028
1,581
1,500
1,571
Secured Debt
(9)
6/8/2023
12.45%
SF+
7.00%
6/30/2028
20,768
20,217
20,637
Common Equity
6/8/2023
849
1,166
1,110
22,883
23,318
Implus Footcare, LLC
(10)
Provider of Footwear and Related
Accessories
Secured Debt
(9)
6/1/2017
14.25%
SF+
7.75%
1.00%
7/31/2024
18,645
18,600
17,334
Industrial Services
Acquisition, LLC
(10)
Industrial Cleaning Services
Secured Debt
(9) (37)
8/13/2021
12.22%
SF+
6.75%
8/13/2026
1,390
1,367
1,390
Secured Debt
(9)
8/13/2021
12.22%
SF+
6.75%
8/13/2026
19,044
18,842
19,044
Preferred Member Units
(8) (29)
1/31/2018
144
10.00%
10.00%
138
178
Preferred Member Units
(8) (29)
5/17/2019
80
20.00%
20.00%
102
120
Member Units
(29)
6/17/2016
900
900
690
21,349
21,422
Infolinks Media Buyco, LLC
(10)
Exclusive Placement Provider to the
Advertising Ecosystem
Secured Debt
(9)
11/1/2021
11.21%
SF+
5.75%
11/1/2026
1,504
1,480
1,504
Secured Debt
(9)
11/1/2021
11.21%
SF+
5.75%
11/1/2026
7,752
7,663
7,752
9,143
9,256
Insight Borrower Corporation
(10)
Test, Inspection, and Certification
Instrument Provider
Secured Debt
(9) (25)
7/19/2023
SF+
6.25%
7/19/2028
—
(70)
(70)
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
129
Secured Debt
(9) (25)
7/19/2023
SF+
6.25%
7/19/2029
—
(57)
(57)
Secured Debt
(9)
7/19/2023
11.65%
SF+
6.25%
7/19/2029
14,406
14,009
14,258
Common Equity
7/19/2023
131,100
656
656
14,538
14,787
Inspire Aesthetics
Management, LLC
(10)
Surgical and Non-Surgical Plastic Surgery
and Aesthetics Provider
Secured Debt
(9) (35)
4/3/2023
13.53%
SF+
8.00%
4/3/2028
790
770
776
Secured Debt
(9)
4/3/2023
13.55%
SF+
8.00%
4/3/2028
7,308
7,146
7,177
Secured Debt
(9)
6/14/2023
13.55%
SF+
8.00%
4/3/2028
2,940
2,879
2,887
Common Equity
4/3/2023
131,569
417
240
11,212
11,080
Interface Security Systems,
L.L.C
(10)
Commercial Security & Alarm Services
Secured Debt
(17) (32)
12/9/2021
15.48%
SF+
10.00%
8/7/2023
1,835
1,835
1,781
Secured Debt
(9) (14)
(17)
8/7/2019
12.46%
SF+
7.00%
12.46%
8/7/2023
7,313
7,237
431
Common Stock
12/7/2021
2,143
—
—
9,072
2,212
Intermedia Holdings, Inc.
(11)
Unified Communications as a Service
Secured Debt
(9)
8/3/2018
11.47%
SF+
6.00%
7/19/2025
20,201
20,172
19,570
Invincible Boat Company,
LLC.
(10)
Manufacturer of Sport Fishing Boats
Secured Debt
(9)
8/28/2019
12.00%
SF+
6.50%
8/28/2025
519
516
509
Secured Debt
(9)
8/28/2019
12.00%
SF+
6.50%
8/28/2025
16,812
16,747
16,515
17,263
17,024
INW Manufacturing, LLC
(11)
Manufacturer of Nutrition and Wellness
Products
Secured Debt
(9)
5/19/2021
11.36%
SF+
5.75%
3/25/2027
6,656
6,544
5,325
Isagenix International, LLC
(11)
Direct Marketer of Health & Wellness
Products
Secured Debt
(9)
4/13/2023
11.04%
SF+
5.50%
8.54%
4/14/2028
2,615
2,374
2,301
Common Equity
4/13/2023
186,322
—
—
2,374
2,301
Jackmont Hospitality, Inc.
(10)
Franchisee of Casual Dining Restaurants
Secured Debt
(9) (26)
10/26/2022
12.46%
SF+
7.00%
11/4/2024
835
823
835
Secured Debt
(9)
11/8/2021
12.46%
SF+
7.00%
11/4/2024
1,974
1,974
1,974
Preferred Equity
11/8/2021
2,826,667
110
1,090
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
130
2,907
3,899
Joerns Healthcare, LLC
(11)
Manufacturer and Distributor of Health Care
Equipment & Supplies
Secured Debt
(9) (14)
11/15/2021
23.63%
SF+
18.00% 23.63%
1/31/2024
2,431
2,431
2,074
Secured Debt
(9) (14)
8/21/2019
21.63%
SF+
16.00% 21.63%
8/21/2024
2,057
2,038
143
Secured Debt
(9) (14)
8/21/2019
21.63%
SF+
16.00% 21.63%
8/21/2024
1,978
1,959
137
Common Stock
8/21/2019
472,579
4,429
—
10,857
2,354
JTI Electrical & Mechanical,
LLC
(10)
Electrical, Mechanical and Automation
Services
Secured Debt
(9) (49)
12/22/2021
11.64%
SF+
6.00%
12/22/2026
3,137
3,036
3,137
Secured Debt
(9)
12/22/2021
11.61%
SF+
6.00%
12/22/2026
36,000
35,562
36,000
Common Equity
12/22/2021
1,684,211
1,684
1,710
40,282
40,847
KMS, LLC
(10)
Wholesaler of Closeout and Value-priced
Products
Secured Debt
(9)
10/4/2021
14.75%
SF+
9.25%
10/4/2026
1,034
1,002
943
Secured Debt
(9)
10/4/2021
14.75%
SF+
9.25%
10/4/2026
7,448
7,365
6,782
8,367
7,725
Lightbox Holdings, L.P.
(11)
Provider of Commercial Real Estate
Software
Secured Debt
5/9/2019
10.62%
SF+
5.00%
5/9/2026
14,325
14,237
13,895
LKCM Headwater
Investments I, L.P.
(12) (13)
Investment Partnership
LP Interests
(30)
1/25/2013
2.27%
1,746
2,988
LL Management, Inc.
(10)
Medical Transportation Service Provider
Secured Debt
(9)
5/2/2019
12.71%
SF+
7.25%
9/25/2024
7,960
7,940
7,960
Secured Debt
(9)
5/2/2019
12.71%
SF+
7.25%
9/25/2024
5,246
5,231
5,246
Secured Debt
(9)
11/20/2020
12.71%
SF+
7.25%
9/25/2024
2,803
2,796
2,803
Secured Debt
(9)
2/26/2021
12.71%
SF+
7.25%
9/25/2024
1,056
1,053
1,056
Secured Debt
(9)
5/12/2022
12.71%
SF+
7.25%
9/25/2024
10,694
10,658
10,694
27,678
27,759
LLFlex, LLC
(10)
Provider of Metal-Based Laminates
Secured Debt
(9)
8/16/2021
15.54%
SF+
9.00%
1.00%
8/16/2026
4,428
4,338
3,979
Logix Acquisition Company,
LLC
(10)
Competitive Local Exchange Carrier
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
131
Secured Debt
(9)
1/8/2018
13.25%
P+
4.75%
12/22/2024
23,921
23,082
18,778
Looking Glass Investments,
LLC
(12) (13)
Specialty Consumer Finance
Member Units
7/1/2015
3
125
25
Mako Steel, LP
(10)
Self-Storage Design & Construction
Secured Debt
(9) (25)
3/15/2021
SF+
6.75%
3/15/2026
—
(28)
—
Secured Debt
(9)
3/15/2021
12.28%
SF+
6.75%
3/15/2026
15,049
14,914
15,049
14,886
15,049
MB2 Dental Solutions, LLC
(11)
Dental Partnership Organization
Secured Debt
(9)
1/28/2021
11.46%
SF+
6.00%
1/29/2027
2,803
2,785
2,803
Secured Debt
(9)
1/28/2021
11.46%
SF+
6.00%
1/29/2027
3,925
3,899
3,925
Secured Debt
(9)
1/28/2021
11.46%
SF+
6.00%
1/29/2027
3,464
3,440
3,464
Secured Debt
(9)
1/28/2021
11.46%
SF+
6.00%
1/29/2027
7,796
7,727
7,796
17,851
17,988
Microbe Formulas, LLC
(10)
Nutritional Supplements Provider
Secured Debt
(9) (25)
4/4/2022
SF+
6.25%
4/3/2028
—
(51)
(51)
Secured Debt
(9)
4/4/2022
11.46%
SF+
6.00%
4/3/2028
22,168
21,855
22,168
21,804
22,117
Mills Fleet Farm Group, LLC
(10)
Omnichannel Retailer of Work, Farm and
Lifestyle Merchandise
Secured Debt
(9)
10/24/2018
12.52%
SF+
7.00%
12/31/2026
18,152
17,883
17,524
Mini Melts of America, LLC
(10)
Manufacturer and Distributor of Branded
Premium Beaded Ice Cream
Secured Debt
(9) (25)
11/30/2023
SF+
6.25%
11/30/2028
—
(42)
(42)
Secured Debt
(9) (25)
11/30/2023
SF+
6.25%
11/30/2028
—
(16)
(16)
Secured Debt
(9)
11/30/2023
10.64%
SF+
5.25%
11/30/2028
4,941
4,825
4,825
Secured Debt
(9)
11/30/2023
12.64%
SF+
7.25%
11/30/2028
4,941
4,820
4,820
Common Equity
11/30/2023
459,657
460
460
10,047
10,047
MonitorUS Holding, LLC
(10) (13)
(21)
SaaS Provider of Media Intelligence
Services
Secured Debt
5/24/2022
14.00%
4.00%
5/24/2027
3,889
3,839
3,938
Secured Debt
5/24/2022
14.00%
4.00%
5/24/2027
10,211
10,068
11,164
Secured Debt
5/24/2022
14.00%
4.00%
5/24/2027
17,213
16,987
17,213
Common Stock
8/30/2022
44,445,814
889
678
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
132
31,783
32,993
NBG Acquisition Inc
(11)
Wholesaler of Home Décor Products
Secured Debt
(14)
4/28/2017
4/26/2024
3,849
3,834
115
NinjaTrader, LLC
(10)
Operator of Futures Trading Platform
Secured Debt
(9) (25)
12/18/2019
SF+
7.00%
12/18/2026
—
(9)
(8)
Secured Debt
(9) (25)
12/18/2019
SF+
7.00%
12/18/2026
—
—
—
Secured Debt
(9)
12/18/2019
12.54%
SF+
7.00%
12/18/2026
20,467
20,255
20,467
Secured Debt
(9)
12/18/2023
12.52%
SF+
7.00%
12/18/2026
7,222
7,089
7,222
27,335
27,681
Obra Capital, Inc. (f/k/a Vida
Capital, Inc.)
(11)
Alternative Asset Manager
Secured Debt
10/10/2019
11.47%
SF+
6.00%
10/1/2026
17,373
16,558
14,897
Ospemifene Royalty Sub LLC
(10)
Estrogen-Deficiency Drug Manufacturer and
Distributor
Secured Debt
(14)
7/8/2013
11/15/2026
4,443
4,443
57
Paragon Healthcare, Inc.
(10)
Infusion Therapy Treatment Provider
Secured Debt
(9) (25)
1/19/2022
SF+
5.75%
1/19/2027
—
(79)
—
Secured Debt
(9) (48)
1/19/2022
11.24%
SF+
5.75%
1/19/2027
3,204
3,135
3,186
Secured Debt
(9)
1/19/2022
11.25%
SF+
5.75%
1/19/2027
18,597
18,265
18,490
21,321
21,676
Power System Solutions
(10)
Backup Power Generation
Secured Debt
(9) (25)
6/7/2023
SF+
6.75%
6/7/2028
—
(82)
(82)
Secured Debt
(9) (25)
6/7/2023
SF+
6.75%
6/7/2028
—
(82)
(82)
Secured Debt
(9)
6/7/2023
12.12%
SF+
6.75%
6/7/2028
18,418
17,930
18,418
Common Equity
6/7/2023
1,234
1,234
1,160
19,000
19,414
PrimeFlight Aviation Services
(10)
Air Freight & Logistics
Secured Debt
(9)
5/1/2023
12.28%
SF+
6.85%
5/1/2029
7,960
7,750
7,960
Secured Debt
(9)
9/7/2023
12.20%
SF+
6.85%
5/1/2029
760
738
760
8,488
8,720
PTL US Bidco, Inc
(10) (13)
(21)
Manufacturers of Equipment, Including
Drilling Rigs and Equipment, and Providers
of Supplies and Services to Companies
Involved in the Drilling, Evaluation and
Completion of Oil and Gas Wells
Secured Debt
(9) (39)
8/19/2022
12.80%
SF+
7.25%
8/19/2027
3,022
2,885
2,998
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
133
Secured Debt
(9)
8/19/2022
12.88%
SF+
7.25%
8/19/2027
26,478
26,084
26,263
28,969
29,261
Purge Rite, LLC
(10)
HVAC Flushing and Filtration Services
Secured Debt
(9) (25)
10/2/2023
SF+
8.00%
10/2/2028
—
(47)
(47)
Secured Debt
(9)
10/2/2023
13.70%
SF+
8.00%
10/2/2028
9,844
9,610
9,610
Preferred Equity
10/2/2023
3,281,250
3,281
3,281
12,844
12,844
RA Outdoors LLC
(10)
Software Solutions Provider for Outdoor
Activity Management
Secured Debt
(9) (37)
4/8/2021
12.22%
SF+
6.75%
4/8/2026
824
816
772
Secured Debt
(9)
4/8/2021
12.21%
SF+
6.75%
4/8/2026
13,369
13,280
12,512
14,096
13,284
Research Now Group, Inc.
and Survey Sampling
International, LLC
(11)
Provider of Outsourced Online Surveying
Secured Debt
(9)
12/29/2017
11.14%
SF+
5.50%
12/20/2024
19,704
19,595
14,715
Richardson Sales Solutions
(10)
Business Services
Secured Debt
(9) (36)
8/24/2023
18.47%
SF+
6.50%
8/24/2028
3,167
3,087
3,109
Secured Debt
(9)
8/24/2023
11.88%
SF+
6.50%
8/24/2028
40,102
38,858
39,376
41,945
42,485
Roof Opco, LLC
(10)
Residential Re-Roofing/Repair
Secured Debt
(9) (25)
8/27/2021
SF+
6.50%
8/27/2026
—
(8)
—
Secured Debt
(9)
8/27/2021
12.16%
SF+
6.50%
8/27/2026
3,376
3,328
3,314
Secured Debt
(9)
8/27/2021
14.16%
SF+
8.50%
8/27/2026
3,376
3,328
3,266
6,648
6,580
RTIC Subsidiary Holdings,
LLC
(10)
Direct-To-Consumer eCommerce Provider
of Outdoor Products
Secured Debt
(9)
9/1/2020
13.21%
SF+
7.75%
9/1/2025
548
536
534
Secured Debt
(9)
9/1/2020
13.19%
SF+
7.75%
9/1/2025
14,323
14,260
13,951
Secured Debt
(9)
9/1/2020
13.19%
SF+
7.75%
9/1/2025
574
572
559
15,368
15,044
Rug Doctor, LLC.
(10)
Carpet Cleaning Products and Machinery
Secured Debt
(9)
7/16/2021
13.54%
SF+
6.00%
2.00%
11/16/2025
5,769
5,749
5,744
Secured Debt
(9)
7/16/2021
13.54%
SF+
6.00%
2.00%
11/16/2025
8,121
8,059
8,086
13,808
13,830
South Coast Terminals
Holdings, LLC
(10)
Specialty Toll Chemical Manufacturer
Secured Debt
(9)
12/10/2021
11.46%
SF+
6.00%
12/13/2026
446
394
394
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
134
Secured Debt
(9)
12/10/2021
11.70%
SF+
6.00%
12/13/2026
34,886
34,472
34,886
Common Equity
12/10/2021
863,636
864
836
35,730
36,116
SPAU Holdings, LLC
(10)
Digital Photo Product Provider
Secured Debt
(9) (25)
7/1/2022
SF+
8.00%
7/1/2027
—
(45)
—
Secured Debt
(9)
7/1/2022
13.72%
SF+
8.00%
7/1/2027
15,728
15,506
15,728
Common Stock
7/1/2022
638,710
639
500
16,100
16,228
Stellant Systems, Inc.
(11)
Manufacturer of Traveling Wave Tubes and
Vacuum Electronic Devices
Secured Debt
(9)
10/22/2021
11.04%
SF+
5.50%
10/1/2028
7,527
7,475
7,527
Secured Debt
(9)
11/7/2023
11.28%
SF+
5.75%
10/1/2028
8,978
8,717
8,977
16,192
16,504
Team Public Choices, LLC
(11)
Home-Based Care Employment Service
Provider
Secured Debt
(9)
12/22/2020
10.88%
SF+
5.00%
12/18/2027
14,804
14,588
14,717
Tectonic Financial, LLC
Financial Services Organization
Common Stock
(8)
5/15/2017
200,000
2,000
5,030
Tex Tech Tennis, LLC
(10)
Sporting Goods & Textiles
Preferred Equity
(29)
7/7/2021
1,000,000
1,000
2,840
U.S. TelePacific Corp.
(11)
Provider of Communications and Managed
Services
Secured Debt
(9) (14)
6/1/2023
12.53%
SF+
7.15%
6.00%
5/2/2027
9,298
3,585
3,333
Secured Debt
(14)
6/1/2023
5/2/2027
946
20
—
3,605
3,333
USA DeBusk LLC
(10)
Provider of Industrial Cleaning Services
Secured Debt
(9)
10/22/2019
11.46%
SF+
6.00%
9/8/2026
23,101
22,817
23,101
Secured Debt
(9)
7/19/2023
11.96%
SF+
6.50%
9/8/2026
9,017
8,862
9,017
Secured Debt
(9)
11/21/2023
11.96%
SF+
6.50%
9/8/2026
4,689
4,601
4,689
36,280
36,807
UserZoom Technologies, Inc.
(10)
Provider of User Experience Research
Automation Software
Secured Debt
(9)
1/11/2023
12.99%
SF+
7.50%
4/5/2029
4,000
3,899
4,000
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
135
Veregy Consolidated, Inc.
(11)
Energy Service Company
Secured Debt
(9) (25)
11/9/2020
SF+
5.25%
11/3/2025
—
(408)
(408)
Secured Debt
(9)
11/9/2020
11.64%
SF+
6.00%
11/3/2027
17,433
17,195
15,775
16,787
15,367
Vistar Media, Inc.
(10)
Operator of Digital Out-of-Home
Advertising Platform
Preferred Stock
4/3/2019
70,207
767
2,180
Vitesse Systems
(10)
Component Manufacturing and Machining
Platform
Secured Debt
(9)
12/22/2023
12.63%
SF+
7.00%
12/22/2028
42,500
41,455
41,455
VORTEQ Coil Finishers, LLC
(10)
Specialty Coating of Aluminum and Light-
Gauge Steel
Common Equity
(8)
11/30/2021
1,038,462
1,038
2,570
Wall Street Prep, Inc.
(10)
Financial Training Services
Secured Debt
(9) (25)
7/19/2021
SF+
7.00%
7/19/2026
—
(4)
(4)
Secured Debt
(9)
7/19/2021
12.54%
SF+
7.00%
7/19/2026
3,723
3,685
3,723
Common Stock
7/19/2021
400,000
400
731
4,081
4,450
Watterson Brands, LLC
(10)
Facility Management Services
Secured Debt
(9) (49)
12/17/2021
11.50%
SF+
6.00%
12/17/2026
1,853
1,825
1,853
Secured Debt
(9)
12/17/2021
11.50%
SF+
6.00%
12/17/2026
386
364
386
Secured Debt
(9)
12/17/2021
11.50%
SF+
6.00%
12/17/2026
15,886
15,736
15,886
Secured Debt
(9)
12/17/2021
11.50%
SF+
6.00%
12/17/2026
12,707
12,585
12,707
30,510
30,832
West Star Aviation
Acquisition, LLC
(10)
Aircraft, Aircraft Engine and Engine Parts
Secured Debt
(9) (50)
3/1/2022
11.34%
SF+
6.00%
3/1/2028
2,405
2,365
2,405
Secured Debt
(9)
3/1/2022
11.35%
SF+
6.00%
3/1/2028
10,658
10,512
10,658
Secured Debt
(9)
11/3/2023
11.35%
SF+
6.00%
3/1/2028
5,303
5,199
5,303
Common Stock
3/1/2022
1,541,400
1,541
2,990
19,617
21,356
Winter Services LLC
(10)
Provider of Snow Removal and Ice
Management Services
Secured Debt
(9) (40)
11/19/2021
12.64%
SF+
7.00%
11/19/2026
2,222
2,198
2,222
Secured Debt
(9)
11/19/2021
12.66%
SF+
7.00%
11/19/2026
2,067
2,036
2,067
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
136
Secured Debt
(9)
11/19/2021
12.66%
SF+
7.00%
11/19/2026
9,300
9,193
9,300
13,427
13,589
Xenon Arc, Inc.
(10)
Tech-enabled Distribution Services to
Chemicals and Food Ingredients Primary
Producers
Secured Debt
(9) (25)
12/17/2021
SF+
5.25%
12/17/2026
—
(163)
—
Secured Debt
(9)
12/17/2021
11.22%
SF+
5.75%
12/17/2027
24,057
23,713
24,057
Secured Debt
(9)
12/17/2021
11.25%
SF+
5.75%
12/17/2027
37,828
37,336
37,828
60,886
61,885
YS Garments, LLC
(11)
Designer and Provider of Branded
Activewear
Secured Debt
(9)
8/22/2018
13.00%
SF+
7.50%
8/9/2026
11,167
10,970
10,220
Zips Car Wash, LLC
(10)
Express Car Wash Operator
Secured Debt
(9) (38)
2/11/2022
12.71%
SF+
7.25%
3/1/2024
17,279
17,246
16,380
Secured Debt
(9) (38)
2/11/2022
12.71%
SF+
7.25%
3/1/2024
4,331
4,327
4,067
21,573
20,447
Subtotal Non-Control/Non-
Affiliate Investments (67.2%
of net assets at fair value)
$
1,714,935 $
1,664,571
Total Portfolio Investments,
December 31, 2023 (173.0% of
net assets at fair value)
$
3,725,960 $
4,286,271
Money market funds
(included in cash and cash
equivalents) (31)
Dreyfus Government Cash
Management (44)
$
13,476 $
13,476
Fidelity Government Fund
(45)
1,678
1,678
Fidelity Treasury (46)
70
70
Total money market funds
$
15,224 $
15,224
Portfolio Company (1) (20)
Business Description
Type of Investment
(2) (3) (15)
Investment
Date
(24)
Shares/Units
Total
Rate
Reference
Rate and
Spread (28)
PIK
Rate
(19)
Maturity
Date
Principal (4)
Cost (4)
Fair Value (18)
____________________
(1)
All investments are Lower Middle Market portfolio investments, unless otherwise noted. See Note C — Fair Value Hierarchy for Investments — Portfolio
Composition for a description of Lower Middle Market portfolio investments. All of the Company’s investments, unless otherwise noted, are encumbered
either as security for the Company’s Credit Facilities or in support of the SBA-guaranteed debentures issued by the Funds.
(2)
Debt investments are income producing, unless otherwise noted by footnote (14), as described below. Equity and warrants are non-income producing, unless
otherwise noted by footnote (8), as described below.
(3)
See Note C — Fair Value Hierarchy for Investments — Portfolio Composition and Schedule 12-14 for a summary of geographic location of portfolio
companies.
Table of contents
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
137
(4)
Principal is net of repayments. Cost is net of repayments and accumulated unearned income. Negative cost is the result of the capitalized discount being greater
than the principal amount outstanding on the loan.
(5)
Control investments are defined by the 1940 Act as investments in which more than 25% of the voting securities are owned or where the ability to nominate
greater than 50% of the board representation is maintained.
(6)
Affiliate investments are defined by the 1940 Act as investments in which between 5% and 25% (inclusive) of the voting securities are owned and the
investments are not classified as Control investments.
(7)
Non-Control/Non-Affiliate investments are defined by the 1940 Act as investments that are neither Control investments nor Affiliate investments.
(8)
Income producing through dividends or distributions.
(9)
Index based floating interest rate is subject to contractual minimum interest rate. As noted in this schedule, 96% of these floating rate loans (based on the par
amount) contain LIBOR or SOFR floors which range between 0.50% and 2.00%, with a weighted-average floor of 1.20%.
(10)
Private Loan portfolio investment. See Note C — Fair Value Hierarchy for Investments — Portfolio Composition for a description of Private Loan portfolio
investments.
(11)
Middle Market portfolio investment. See Note C — Fair Value Hierarchy for Investments — Portfolio Composition for a description of Middle Market
portfolio investments.
(12)
Other Portfolio investment. See Note C — Fair Value Hierarchy for Investments — Portfolio Composition for a description of Other Portfolio investments.
(13)
Investment is not a qualifying asset as defined under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of total assets at the time of
acquisition of any additional non-qualifying assets.
(14)
Non-accrual and non-income producing debt investment.
(15)
All of the Company’s portfolio investments are generally subject to restrictions on resale as “restricted securities.”
(16)
External Investment Manager. Investment is not encumbered as security for the Company’s Credit Facilities or in support of the SBA-guaranteed debentures
issued by the Funds.
(17)
Maturity date is under on-going negotiations with the portfolio company and other lenders, if applicable.
(18)
Investment fair value was determined using significant unobservable inputs, unless otherwise noted. See Note C — Fair Value Hierarchy for Investments —
Portfolio Composition for further discussion. Negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued
below par.
(19)
Investments may have a portion, or all, of their income received from PIK interest or dividends. PIK interest income and cumulative dividend income represent
income not paid currently in cash. The difference between the Total Rate and PIK Rate represents the cash rate as of December 31, 2023.
(20)
All portfolio company headquarters are based in the United States, unless otherwise noted.
(21)
Portfolio company headquarters are located outside of the United States.
(22)
The Company has entered into an intercreditor agreement that entitles the Company to the “last out” tranche of the first lien secured loans, whereby the “first
out” tranche will receive priority as to the “last out” tranche with respect to payments of principal, interest, and any other amounts due thereunder. Therefore,
the Company receives a higher interest rate than the contractual stated interest rate of SOFR plus 8.00% (Floor 1.50%) per the credit agreement and the
Consolidated Schedule of Investments above reflects such higher rate.
(23)
The Company has entered into an intercreditor agreement that entitles the Company to the “last out” tranche of the first lien secured loans, whereby the “first
out” tranche will receive priority as to the “last out” tranche with respect to payments of principal, interest, and any other amounts due thereunder. Therefore,
the Company receives a higher interest rate than the contractual stated interest rate of 11.25% per the credit agreement and the Consolidated Schedule of
Investments above reflects such higher rate.
(24)
Investment date represents the date of initial investment in the security position.
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MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
138
(25)
The position is unfunded and no interest income is being earned as of December 31, 2023. The position may earn a nominal unused facility fee on committed
amounts.
(26)
As of December 31, 2023, borrowings under the loan facility bore interest at SOFR+7.00% (Floor 1.00%). Each new draw or funding on the facility has a
different floating rate reset date. The rate presented represents a weighted-average rate for borrowings under the facility, as of December 31, 2023.
(27)
Warrants are presented in equivalent shares/units with a strike price of $0.01 per share/unit.
(28)
A majority of the variable rate loans in the Company’s Investment Portfolio (defined below) bear interest at a rate that may be determined by reference to
either LIBOR (“L”), SOFR (“SF”) or an alternate Base rate (commonly based on the Federal Funds Rate or the Prime rate (“P”)), which typically resets every
one, three, or six months at the borrower’s option. SOFR based contracts may include a credit spread adjustment (the “Adjustment”) that is charged in addition
to the stated spread. The Adjustment is applied when the SOFR rate, plus the Adjustment, exceeds the stated floor rate, as applicable. As of December 31,
2023, SOFR based contracts in the portfolio had Adjustments ranging from 0.10% to 0.43%.
(29)
Shares/Units represent ownership in a related Real Estate or HoldCo entity.
(30)
Investment is not unitized. Presentation is made in percent of fully diluted ownership unless otherwise indicated.
(31)
Money market fund interests included in cash and cash equivalents.
(32)
As of December 31, 2023, borrowings under the loan facility bore interest at SOFR+10.00%. RLOC facility permits the borrower to make an interest rate
election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the facility, as of
December 31, 2023.
(33)
As of December 31, 2023, borrowings under the loan facility bore interest at SOFR+7.00% (Floor 1.50%). RLOC facility permits the borrower to make an
interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the
facility, as of December 31, 2023.
(34)
As of December 31, 2023, borrowings under the loan facility bore interest at SOFR+8.00% (Floor 1.00%). RLOC facility permits the borrower to make an
interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the
facility, as of December 31, 2023.
(35)
As of December 31, 2023, borrowings under the loan facility bore interest at SOFR+8.00% (Floor 2.00%). RLOC facility permits the borrower to make an
interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the
facility, as of December 31, 2023.
(36)
As of December 31, 2023, borrowings under the loan facility bore interest at SOFR+6.50% (Floor 2.00%). RLOC facility permits the borrower to make an
interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the
facility, as of December 31, 2023.
(37)
As of December 31, 2023, borrowings under the loan facility bore interest at SOFR+6.75% (Floor 1.00%). RLOC facility permits the borrower to make an
interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the
facility, as of December 31, 2023.
(38)
As of December 31, 2023, borrowings under the loan facility bore interest at SOFR+7.25% (Floor 1.00%). Each new draw or funding on the facility has a
different floating rate reset date. The rate presented represents a weighted-average rate for borrowings under the facility, as of December 31, 2023.
(39)
As of December 31, 2023, borrowings under the loan facility bore interest at SOFR+7.25% (Floor 1.00%). RLOC facility permits the borrower to make an
interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the
facility, as of December 31, 2023.
(40)
As of December 31, 2023, borrowings under the loan facility bore interest at SOFR+7.00% (Floor 1.00%). RLOC facility permits the borrower to make an
interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the
facility, as of December 31, 2023.
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MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
139
(41)
Index based floating interest rate is subject to contractual maximum base rate of 3.00%.
(42)
Index based floating interest rate is subject to contractual maximum base rate of 1.50%.
(43)
Warrants are presented in equivalent shares/units with a strike price of $1.00 per share/unit.
(44)
Effective yield as of December 31, 2023 was approximately 4.98% on the Dreyfus Government Cash Management.
(45)
Effective yield as of December 31, 2023 was approximately 5.01% on the Fidelity Government Fund.
(46)
Effective yield as of December 31, 2023 was approximately 4.99% on the Fidelity Treasury.
(47)
As of December 31, 2023, borrowings under the loan facility bore interest at SOFR+5.75% (Floor 1.00%). RLOC facility permits the borrower to make an
interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the
facility, as of December 31, 2023.
(48)
As of December 31, 2023, borrowings under the loan facility bore interest at SOFR+5.75% (1.00%). Each new draw or funding on the facility has a different
floating rate reset date. The rate presented represents a weighted-average rate for borrowings under the facility, as of December 31, 2023.
(49)
As of December 31, 2023, borrowings under the loan facility bore interest at SOFR+6.00% (Floor 1.00%). RLOC facility permits the borrower to make an
interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the
facility, as of December 31, 2023.
(50)
As of December 31, 2023, borrowings under the loan facility bore interest at SOFR+6.00% (0.75%). Each new draw or funding on the facility has a different
floating rate reset date. The rate presented represents a weighted-average rate for borrowings under the facility, as of December 31, 2023.
(51)
As of December 31, 2023, borrowings under the loan facility bore interest at SOFR+7.00% (Floor 2.00%). RLOC facility permits the borrower to make an
interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the
facility, as of December 31, 2023.
(52)
As of December 31, 2023, borrowings under the loan facility bore interest at SOFR+6.50% (Floor 1.00%). RLOC facility permits the borrower to make an
interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the
facility, as of December 31, 2023.
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MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments (Continued)
December 31, 2023
(dollars in thousands)
140
NOTE A — ORGANIZATION AND BASIS OF PRESENTATION
1.
Organization
Main Street Capital Corporation (“MSCC” or, together with its consolidated subsidiaries, “Main Street” or the
“Company”) is a principal investment firm primarily focused on providing customized long-term debt and equity capital
solutions to lower middle market (“LMM”) companies (its “LMM investment strategy”) and debt capital to private
(“Private Loan”) companies owned by or in the process of being acquired by a private equity fund (its “Private Loan
investment strategy”). Main Street’s portfolio investments are typically made to support management buyouts,
recapitalizations, growth financings, refinancings and acquisitions of companies that operate in diverse industry sectors.
Main Street seeks to partner with entrepreneurs, business owners and management teams and generally provides “one-stop”
debt and equity financing alternatives within its LMM investment strategy. Main Street invests primarily in secured debt
investments, equity investments, warrants and other securities of LMM companies typically based in the United States.
Main Street also seeks to partner with private equity fund sponsors in its Private Loan investment strategy and primarily
invests in secured debt investments of Private Loan companies generally headquartered in the United States.
Main Street also maintains a legacy portfolio of investments in larger middle market (“Middle Market”)
companies (its “Middle Market investment portfolio”) and a limited portfolio of other portfolio (“Other Portfolio”)
investments. Main Street’s Middle Market investments are generally debt investments in companies owned by a private
equity fund that were originally issued through a syndication financing process. Main Street has generally stopped making
new Middle Market investments and expects the size of its Middle Market investment portfolio to continue to decline in
future periods as its existing Middle Market investments are repaid or sold. Main Street’s Other Portfolio investments
primarily consist of investments that are not consistent with the typical profiles for its LMM, Private Loan or Middle
Market portfolio investments, including investments in unaffiliated investment companies and private funds managed by
third parties. The “Investment Portfolio,” as used herein, refers to all of Main Street’s investments in LMM portfolio
companies, investments in Private Loan portfolio companies, investments in Middle Market portfolio companies, Other
Portfolio investments, short-term portfolio investments (as discussed in Note C — Fair Value Hierarchy for Investments —
Portfolio Composition — Investment Portfolio Composition) and the investment in the External Investment Manager (as
defined below).
MSCC was formed in March 2007 to operate as an internally managed business development company (“BDC”)
under the Investment Company Act of 1940, as amended (the “1940 Act”). Because MSCC is internally managed, all of
the executive officers and other employees are employed by MSCC. Therefore, MSCC does not pay any external
investment advisory fees, but instead directly incurs the operating costs associated with employing investment and portfolio
management professionals.
MSCC wholly owns several investment funds, including Main Street Mezzanine Fund, LP (“MSMF”) and Main
Street Capital III, LP (“MSC III” and, together with MSMF, the “Funds”), and each of their general partners. The Funds
are each licensed as a Small Business Investment Company (“SBIC”) by the United States Small Business Administration
(“SBA”).
MSC Adviser I, LLC (the “External Investment Manager”) was formed in November 2013 as a wholly-owned
subsidiary of Main Street to provide investment management and other services to parties other than Main Street (“External
Parties”) and receives fee income for such services. MSCC has been granted no-action relief by the Securities and
Exchange Commission (“SEC”) to allow the External Investment Manager to register as a registered investment adviser
under the Investment Advisers Act of 1940, as amended. Since the External Investment Manager conducts all of its
investment management activities for External Parties, it is accounted for as a portfolio investment of Main Street and is
not included as a consolidated subsidiary in Main Street’s consolidated financial statements.
MSCC has elected to be treated for U.S. federal income tax purposes as a regulated investment company (“RIC”)
under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). As a result, MSCC generally does
not pay corporate-level U.S. federal income taxes on any net ordinary taxable income or capital gains that it distributes to
its stockholders.
MSCC has certain direct and indirect wholly-owned subsidiaries that have elected to be taxable entities (the
“Taxable Subsidiaries”). The primary purpose of the Taxable Subsidiaries is to permit MSCC to hold equity investments in
portfolio companies which are “pass-through” entities for tax purposes. MSCC also has certain direct and indirect wholly-
owned subsidiaries formed for financing purposes (the “Structured Subsidiaries”).
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements
141
Unless otherwise noted or the context otherwise indicates, the terms “we,” “us,” “our,” the “Company” and “Main
Street” refer to MSCC and its consolidated subsidiaries, which include the Funds, the Taxable Subsidiaries and the
Structured Subsidiaries.
2.
Basis of Presentation
Main Street’s consolidated financial statements are prepared in accordance with generally accepted accounting
principles in the United States of America (“U.S. GAAP”). The Company is an investment company following accounting
and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
946, Financial Services—Investment Companies (“ASC 946”). For each of the periods presented herein, Main Street’s
consolidated financial statements include the accounts of MSCC and its consolidated subsidiaries. The Investment
Portfolio, as used herein, refers to all of Main Street’s investments in LMM portfolio companies, investments in Private
Loan portfolio companies, investments in Middle Market portfolio companies, Other Portfolio investments, short-term
portfolio investments and the investment in the External Investment Manager (see Note C — Fair Value Hierarchy for
Investments — Portfolio Composition — Investment Portfolio Composition for additional discussion of Main Street’s
Investment Portfolio). Main Street’s results of operations and cash flows for the years ended December 31, 2024, 2023 and
2022 and financial position as of December 31, 2024 and 2023, are presented on a consolidated basis. The effects of all
intercompany transactions between MSCC and its consolidated subsidiaries have been eliminated in consolidation.
Principles of Consolidation
Under ASC 946, Main Street is precluded from consolidating other entities in which Main Street has equity
investments, including those in which it has a controlling interest, unless the other entity is another investment company.
An exception to this general principle in ASC 946 occurs if Main Street holds a controlling interest in an operating
company that provides all or substantially all of its services directly to Main Street. Accordingly, as noted above, MSCC’s
consolidated financial statements include the financial position and operating results for the Funds, the Taxable
Subsidiaries and the Structured Subsidiaries. Main Street has determined that none of its portfolio investments qualify for
this exception, including the investment in the External Investment Manager. Therefore, Main Street’s Investment Portfolio
is carried on the Consolidated Balance Sheets at fair value, as discussed further in Note B.1. — Summary of Significant
Accounting Policies — Valuation of the Investment Portfolio, with any adjustments to fair value recognized as “Net
Unrealized Appreciation (Depreciation)” until the investment is realized, usually upon exit, resulting in any gain or loss
being recognized as a “Net Realized Gain (Loss),” in both cases on the Consolidated Statements of Operations.
Portfolio Investment Classification
Main Street classifies its Investment Portfolio in accordance with the requirements of the 1940 Act. Under the
1940 Act, (a) “Control Investments” are defined as investments in which Main Street owns more than 25% of the voting
securities or has rights to maintain greater than 50% of the board representation, (b) “Affiliate Investments” are defined as
investments in which Main Street owns between 5% and 25% (inclusive) of the voting securities and does not have rights
to maintain greater than 50% of the board representation and (c) “Non-Control/Non-Affiliate Investments” are defined as
investments that are neither Control Investments nor Affiliate Investments. For purposes of determining the classification
of its Investment Portfolio, Main Street has excluded consideration of any voting securities or board appointment rights
held by third-party investment funds advised by the External Investment Manager.
NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1.
Valuation of the Investment Portfolio
Main Street accounts for its Investment Portfolio at fair value. As a result, Main Street follows the provisions of
ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework
for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value and
enhances disclosure requirements for fair value measurements. ASC 820 requires Main Street to assume that the portfolio
investment is to be sold in the principal market to independent market participants, which may be a hypothetical market.
Market participants are defined as buyers and sellers in the principal market that are independent, knowledgeable and
willing and able to transact.
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
142
Main Street’s portfolio strategy calls for it to invest primarily in illiquid debt and equity securities issued by LMM
companies and debt securities issued by Private Loan companies. Main Street also maintains a legacy portfolio of
investments in Middle Market companies and a limited portfolio of Other Portfolio investments. Main Street’s portfolio
may also periodically include short-term portfolio investments that are atypical of Main Street’s LMM and Private Loan
portfolio investments as they are intended to be a short-term deployment of capital and are more liquid than investments
within the LMM and Private Loan investment portfolios. Main Street’s portfolio investments may be subject to restrictions
on resale.
LMM investments and Other Portfolio investments generally have no established trading market, while Private
Loan investments may include investments which have no established market or have established markets that are not
active. Middle Market and short-term portfolio investments generally have established markets that are not active. Main
Street determines in good faith the fair value of its Investment Portfolio pursuant to a valuation policy in accordance with
ASC 820, with such valuation process approved by its Board of Directors and in accordance with the 1940 Act. Main
Street’s valuation policies and processes are intended to provide a consistent basis for determining the fair value of Main
Street’s Investment Portfolio.
For LMM portfolio investments, Main Street generally reviews external events, including private mergers, sales
and acquisitions involving comparable companies, and includes these events in the valuation process by using an enterprise
value waterfall methodology (“Waterfall”) for its LMM equity investments and an income approach using a yield-to-
maturity model (“Yield-to-Maturity”) valuation method for its LMM debt investments. For Private Loan and Middle
Market portfolio investments in debt securities for which it has determined that third-party quotes or other independent
pricing are not available or appropriate, Main Street generally estimates the fair value based on the assumptions that it
believes hypothetical market participants would use to value the investment in a current hypothetical sale using the Yield-
to-Maturity valuation method. For Middle Market and short-term portfolio investments in debt securities for which it has
determined that third-party quotes or other independent prices are available, Main Street primarily uses quoted prices in the
valuation process. Main Street determines the appropriateness of the use of third-party broker quotes, if any, in determining
fair value based on its understanding of the level of actual transactions used by the broker to develop the quote and whether
the quote was an indicative price or binding offer, the depth and consistency of broker quotes and the correlation of
changes in broker quotes with underlying performance of the portfolio company and other market indices. For its Other
Portfolio equity investments, Main Street generally calculates the fair value of the investment primarily based on the net
asset value (“NAV”) of the fund and adjusts the fair value for other factors deemed relevant that would affect the fair value
of the investment. All of the valuation approaches for Main Street’s portfolio investments estimate the value of the
investment as if Main Street were to sell, or exit, the investment as of the measurement date.
These valuation approaches consider the value associated with Main Street’s ability to control the capital structure
of the portfolio company, as well as the timing of a potential exit. For valuation purposes, “control” portfolio investments
are composed of debt and equity securities in companies for which Main Street has a controlling interest in the equity
ownership of the portfolio company or the ability to nominate a majority of the portfolio company’s board of directors. For
valuation purposes, “non-control” portfolio investments are generally composed of debt and equity securities in companies
for which Main Street does not have a controlling interest in the equity ownership of the portfolio company or the ability to
nominate a majority of the portfolio company’s board of directors.
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
143
Under the Waterfall valuation method, Main Street estimates the enterprise value of a portfolio company using a
combination of market and income approaches or other appropriate valuation methods, such as considering recent
transactions in the equity securities of the portfolio company or third-party valuations of the portfolio company, and then
performs a Waterfall calculation by allocating the enterprise value over the portfolio company’s securities in order of their
preference relative to one another. The enterprise value is the fair value at which an enterprise could be sold in a transaction
between two willing parties, other than through a forced or liquidation sale. Typically, privately held companies are bought
and sold based on multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”), cash flows, net
income, revenues, or in limited cases, book value. There is no single methodology for estimating enterprise value. For any
one portfolio company, enterprise value is generally described as a range of values from which a single estimate of
enterprise value is derived. In estimating the enterprise value of a portfolio company, Main Street analyzes various factors
including the portfolio company’s historical and projected financial results. Due to SEC deadlines for Main Street’s
quarterly and annual financial reporting, the operating results of a portfolio company used in the current period valuation
are generally the results from the period ended three months prior to such valuation date and may include unaudited,
projected, budgeted or pro forma financial information and may require adjustments for non-recurring items or to
normalize the operating results that may require significant judgment in determining. In addition, projecting future
financial results requires significant judgment regarding future growth assumptions. In evaluating the operating results,
Main Street also analyzes the impact of exposure to litigation, loss of customers or other contingencies. After determining
the appropriate enterprise value, Main Street allocates the enterprise value to investments in order of the legal priority of
the various components of the portfolio company’s capital structure. In applying the Waterfall valuation method, Main
Street assumes the loans are paid-off at the principal amount in a change in control transaction and are not assumed by the
buyer, which Main Street believes is consistent with its past transaction history and standard industry practices.
Under the Yield-to-Maturity valuation method, Main Street also uses the income approach to determine the fair
value of debt securities based on projections of the discounted future free cash flows that the debt security will likely
generate, including analyzing the discounted cash flows of interest and principal amounts for the debt security, as set forth
in the associated loan agreements, as well as the financial position and credit risk of the portfolio company. Main Street’s
estimate of the expected repayment date of its debt securities is generally the maturity date of the instrument, as Main
Street generally intends to hold its loans and debt securities to maturity. The Yield-to-Maturity analysis also considers
changes in leverage levels, credit quality, portfolio company performance, changes in market-based interest rates and other
factors. Main Street will generally use the value determined by the Yield-to-Maturity analysis as the fair value for that
security; however, because of Main Street’s general intent to hold its loans to maturity, the fair value will not exceed the
principal amount of the debt security valued using the Yield-to-Maturity valuation method. A change in the assumptions
that Main Street uses to estimate the fair value of its debt securities using the Yield-to-Maturity valuation method could
have a material impact on the determination of fair value. If there is deterioration in credit quality or if a debt security is in
workout status, Main Street may consider other factors in determining the fair value of the debt security, including the
value attributable to the debt security from the enterprise value of the portfolio company or the proceeds that would most
likely be received in a liquidation analysis.
Under the NAV valuation method, for an investment in an investment fund that does not have a readily
determinable fair value, Main Street measures the fair value of the investment predominately based on the NAV of the
investment fund as of the measurement date and adjusts the investment’s fair value for factors known to Main Street that
would affect that fund’s NAV, including, but not limited to, fair values for individual investments held by the fund if Main
Street holds the same investment or for a publicly traded investment. In addition, in determining the fair value of the
investment, Main Street considers whether adjustments to the NAV are necessary in certain circumstances, based on the
analysis of any restrictions on redemption of Main Street’s investment as of the measurement date, recent actual sales or
redemptions of interests in the investment fund, and expected future cash flows available to equity holders, including the
rate of return on those cash flows compared to an implied market return on equity required by market participants, or other
uncertainties surrounding Main Street’s ability to realize the full NAV of its interests in the investment fund.
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
144
Pursuant to its internal valuation process and the requirements under the 1940 Act, Main Street performs valuation
procedures on each of its portfolio investments quarterly. In addition to its internal valuation process, in arriving at
estimates of fair value for its investments in its LMM portfolio companies, Main Street, among other things, consults with
a nationally recognized independent financial advisory services firm (the “Financial Advisory Firm”). The Financial
Advisory Firm analyzes and provides observations, recommendations and an assurance certification regarding Main
Street’s determinations of the fair value of its LMM portfolio company investments. The Financial Advisory Firm is
generally consulted relative to Main Street’s investments in each LMM portfolio company at least once every
calendar year, and for Main Street’s investments in new LMM portfolio companies, at least once in the twelve-month
period subsequent to the initial investment. In certain instances, Main Street may determine that it is not cost-effective, and
as a result is not in its stockholders’ best interest, to consult with the Financial Advisory Firm on its investments in one or
more LMM portfolio companies. Such instances include, but are not limited to, situations where the fair value of Main
Street’s investment in a LMM portfolio company is determined to be insignificant relative to the total Investment Portfolio.
Main Street consulted with and received an assurance certification from the Financial Advisory Firm in arriving at its
determination of fair value for its investments in a total of 68 and 70 LMM portfolio companies during the years ended
December 31, 2024 and 2023, respectively, representing 93% and 95% of the total LMM portfolio at fair value as of
December 31, 2024 and 2023, respectively. Excluding its investments in LMM portfolio companies that, as of
December 31, 2024 and 2023, as applicable, had not been in the Investment Portfolio for at least twelve months subsequent
to the initial investment or whose primary purpose is to own real estate for which a third-party appraisal is obtained on at
least an annual basis, 99% of the LMM portfolio at fair value was reviewed and certified by the Financial Advisory Firm
for both of the years ended December 31, 2024 and 2023.
For valuation purposes, all of Main Street’s Private Loan portfolio investments are non-control investments. For
Private Loan portfolio investments for which it has determined that third-party quotes or other independent pricing are not
available or appropriate, Main Street generally estimates the fair value based on the assumptions that it believes
hypothetical market participants would use to value such Private Loan debt investments in a current hypothetical sale using
the Yield-to-Maturity valuation method and such Private Loan equity investments in a current hypothetical sale using the
Waterfall valuation method.
In addition to its internal valuation process, in arriving at estimates of fair value for its investments in its Private
Loan portfolio companies, Main Street, among other things, consults with the Financial Advisory Firm. The Financial
Advisory Firm analyzes and provides observations and recommendations and an assurance certification regarding Main
Street’s determinations of the fair value of its Private Loan portfolio company investments. The Financial Advisory Firm is
generally consulted relative to Main Street’s investments in each Private Loan portfolio company at least once every
calendar year, and for Main Street’s investments in new Private Loan portfolio companies, at least once in the twelve-
month period subsequent to the initial investment. In certain instances, Main Street may determine that it is not cost-
effective, and as a result is not in its stockholders’ best interest, to consult with the Financial Advisory Firm on its
investments in one or more Private Loan portfolio companies. Such instances include, but are not limited to, situations
where the fair value of Main Street’s investment in a Private Loan portfolio company is determined to be insignificant
relative to the total Investment Portfolio. Main Street consulted with and received an assurance certification from the
Financial Advisory Firm in arriving at its determination of fair value for its investments in a total of 66 and 59 Private Loan
portfolio companies during the years ended December 31, 2024 and 2023, respectively, representing 85% and 82% of the
total Private Loan portfolio at fair value as of December 31, 2024 and 2023, respectively. Excluding its investments in
Private Loan portfolio companies that, as of December 31, 2024 and 2023, as applicable, had not been in the Investment
Portfolio for at least twelve months subsequent to the initial investment and its investments in Private Loan portfolio
companies that were not reviewed because the investment is valued based upon third-party quotes or other independent
pricing, 97% and 94% of the Private Loan portfolio at fair value was reviewed and certified by the Financial Advisory Firm
for the years ended December 31, 2024 and 2023, respectively.
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
145
For valuation purposes, all of Main Street’s Middle Market portfolio investments are non-control investments. To
the extent sufficient observable inputs are available to determine fair value, Main Street uses observable inputs to
determine the fair value of these investments through obtaining third-party quotes or other independent pricing. For Middle
Market portfolio investments for which it has determined that third-party quotes or other independent pricing are not
available or appropriate, Main Street generally estimates the fair value based on the assumptions that it believes
hypothetical market participants would use to value such Middle Market debt investments in a current hypothetical sale
using the Yield-to-Maturity valuation method and such Middle Market equity investments in a current hypothetical sale
using the Waterfall valuation method. Main Street generally consults on a limited basis with the Financial Advisory Firm in
connection with determining the fair value of its Middle Market portfolio investments due to the nature of these
investments. The vast majority (97% and 98% as of December 31, 2024 and 2023, respectively) of the Middle Market
portfolio investments (i) are valued using third-party quotes or other independent pricing services or (ii) Main Street has
consulted with and received an assurance certification from the Financial Advisory Firm within the last twelve months.
For valuation purposes, Main Street’s short-term portfolio investments have historically been comprised of non-
control investments. To the extent sufficient observable inputs are available to determine fair value, Main Street uses
observable inputs to determine the fair value of these investments through obtaining third-party quotes or other
independent pricing. Because any short-term portfolio investments are typically valued using third-party quotes or other
independent pricing services, Main Street generally does not consult with any financial advisory services firms in
connection with determining the fair value of its short-term portfolio investments.
For valuation purposes, all of Main Street’s Other Portfolio investments are non-control investments. Main
Street’s Other Portfolio investments comprised 2.5% and 3.3% of Main Street’s Investment Portfolio at fair value as of
December 31, 2024 and 2023, respectively. Similar to the LMM investment portfolio, market quotations for Other
Portfolio equity investments are generally not readily available. For its Other Portfolio equity investments, Main Street
generally determines the fair value of these investments using the NAV valuation method.
For valuation purposes, Main Street’s investment in the External Investment Manager is a control investment.
Market quotations are not readily available for this investment, and as a result, Main Street determines the fair value of the
External Investment Manager using the Waterfall valuation method under the market approach. In estimating the enterprise
value, Main Street analyzes various factors, including the entity’s historical and projected financial results, as well as its
size, marketability and performance relative to the population of market comparables, and the valuations for comparable
publicly traded companies and private transactions involving comparable companies. This valuation approach estimates the
value of the investment as if Main Street were to sell, or exit, the investment. In addition, Main Street considers its ability
to control the capital structure of the company, as well as the timing of a potential exit, in connection with determining the
fair value of the External Investment Manager. Main Street consults with and receives an assurance certification from the
Financial Advisory Firm in arriving at its determination of fair value for its investment in the External Investment Adviser
on a quarterly basis, including as of December 31, 2024 and 2023.
Due to the inherent uncertainty in the valuation process, Main Street’s determination of fair value for its
Investment Portfolio may differ materially from the values that would have been determined had a ready market for the
securities existed. In addition, changes in the market environment, portfolio company performance and other events that
may occur over the lives of the investments may cause the gains or losses ultimately realized on these investments to be
materially different than the valuations currently assigned. Main Street determines the fair value of each individual
investment and records changes in fair value as unrealized appreciation or depreciation.
Main Street uses an internally developed portfolio investment rating system in connection with its investment
oversight, portfolio management and analysis and investment valuation procedures for its LMM, Private Loan and Middle
Market portfolio companies. This system takes into account both quantitative and qualitative factors of each LMM, Private
Loan and Middle Market portfolio company.
Rule 2a-5 under the 1940 Act permits a BDC’s board of directors to designate its executive officers or investment
adviser as a valuation designee to determine the fair value for its investment portfolio, subject to the active oversight of the
board. Main Street’s Board of Directors has approved policies and procedures pursuant to Rule 2a-5 (the “Valuation
Procedures”) and has designated a group of its executive officers to serve as the Board of Directors’ valuation designee.
Main Street believes its Investment Portfolio as of December 31, 2024 and 2023 approximates fair value as of those dates
based on the markets in which it operates and other conditions in existence on those reporting dates.
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
146
2.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
as of the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual
results may differ from these estimates under different conditions or assumptions. Additionally, as explained in Note B.1.
— Summary of Significant Accounting Policies — Valuation of the Investment Portfolio, the consolidated financial
statements include investments in the Investment Portfolio whose values have been estimated by Main Street, pursuant to
valuation policies and procedures approved and overseen by Main Street’s Board of Directors, in the absence of readily
ascertainable market values. Because of the inherent uncertainty of the Investment Portfolio valuations, those estimated
values may differ materially from the values that would have been determined had a ready market for the securities existed.
Macroeconomic factors, including pandemics, risk of recession, inflation, supply chain constraints or disruptions,
geopolitical disruptions and changing market index interest rates, and the related effect on the U.S. and global economies,
have impacted, and may continue to impact, the businesses and operating results of certain of Main Street’s portfolio
companies. As a result of these and other current effects of macroeconomic factors, as well as the uncertainty regarding the
extent and duration of their impact, the valuation of Main Street’s Investment Portfolio has and may continue to experience
increased volatility.
3.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash and highly liquid investments with an original maturity of three months
or less at the date of purchase. Cash and cash equivalents are carried at cost, which approximates fair value. As of
December 31, 2024 and 2023, the Company had $6.5 million and $15.2 million, respectively, of cash equivalents invested
in AAA-rated money market funds pending investment in the Company’s primary investment strategies. These highly
liquid investments are included in the Consolidated Schedule of Investments.
As of December 31, 2024 and 2023, cash balances totaling $67.5 million and $40.1 million, respectively,
exceeded Federal Deposit Insurance Corporation insurance protection levels, subjecting the Company to risk related to the
uninsured balance.
4.
Interest, Dividend and Fee Income
Main Street records interest and dividend income on the accrual basis to the extent amounts are expected to be
collected. Dividend income is recorded when dividends are declared by the portfolio company or at such other time that an
obligation exists for the portfolio company to make a distribution. Main Street evaluates accrued interest and dividend
income periodically for collectability. When a loan or debt security becomes 90 days or more past due, and if Main Street
otherwise does not expect the debtor to be able to service its debt obligation, Main Street will generally place the loan or
debt security on non-accrual status and cease recognizing interest income on that loan or debt security until the borrower
has demonstrated the ability and intent to pay contractual amounts due. If a loan or debt security’s status significantly
improves regarding the debtor’s ability to service the debt obligation, or if a loan or debt security is sold or written off,
Main Street removes it from non-accrual status.
As of December 31, 2024, investments on non-accrual status comprised 0.9% of Main Street’s total Investment
Portfolio at fair value and 3.5% at cost. As of December 31, 2023, investments on non-accrual status comprised 0.6% of
Main Street’s total Investment Portfolio at fair value and 2.3% at cost.
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
147
Main Street holds certain debt and preferred equity instruments in its Investment Portfolio that contain PIK
interest and cumulative dividend provisions. The PIK interest, computed at the contractual rate specified in each debt
agreement, is periodically added to the principal balance of the debt and is recorded as interest income. Thus, the actual
collection of this interest may be deferred until the time of debt principal repayment. Cumulative dividends are recorded as
dividend income, and any dividends in arrears are added to the balance of the preferred equity investment. The actual
collection of these dividends in arrears may be deferred until such time as the preferred equity is redeemed or sold. To
maintain RIC tax treatment (as discussed in Note B.10. — Summary of Significant Accounting Policies—Income Taxes
below), these non-cash sources of income may need to be paid out to stockholders in the form of distributions, even though
Main Street may not have collected the PIK interest and cumulative dividends in cash. Main Street stops accruing PIK
interest and cumulative dividends and writes off any accrued and uncollected interest and dividends in arrears when it
determines that such PIK interest and dividends in arrears are no longer collectible. For the years ended December 31,
2024, 2023 and 2022 (i) 4.2%, 2.2% and 1.4%, respectively, of Main Street’s total investment income was attributable to
PIK interest income not paid currently in cash and (ii) 0.5%, 0.3% and 0.5%, respectively, of Main Street’s total investment
income was attributable to cumulative dividend income not paid currently in cash.
Main Street may periodically provide services, including structuring and advisory services, to its portfolio
companies or other third parties. For services that are separately identifiable and evidence exists to substantiate fair value,
fee income is recognized as earned, which is generally when the investment or other applicable transaction closes. Fees
received in connection with debt financing transactions for services that do not meet these criteria are treated as debt
origination fees and are generally deferred and accreted into income over the life of the financing.
A presentation of total investment income Main Street received from its Investment Portfolio in each of the
periods presented is as follows:
Year Ended December 31,
2024
2023
2022
(dollars in thousands)
Interest, fee and dividend income:
Interest income
$
420,651 $
390,737 $
284,746
Dividend income
97,231
94,796
76,375
Fee income
23,144
14,852
15,739
Total investment income
$
541,026 $
500,385 $
376,860
5.
Deferred Financing Costs
Deferred financing costs include commitment fees and other direct costs related to Main Street’s multi-year
revolving credit facility (the “Corporate Facility”) and special purpose vehicle revolving credit facility (the “SPV Facility”
and, together with the Corporate Facility, the “Credit Facilities”) and its unsecured notes, as well as the commitment fees
and leverage fees (3.4% of the total commitment and draw amounts, as applicable) on the SBIC debentures. See further
discussion of Main Street’s debt in Note E — Debt. Deferred financing costs in connection with the Credit Facilities are
capitalized as an asset. Deferred financing costs in connection with all other debt arrangements are a direct deduction from
the principal amount outstanding.
6.
Equity Offering Costs
The Company’s offering costs are charged against the proceeds from equity offerings when the proceeds are
received.
7.
Unearned Income—Debt Origination Fees and Original Issue Discount and Discounts / Premiums to Par
Value
Main Street capitalizes debt origination fees received in connection with financings and reflects such fees as
unearned income netted against the applicable debt investments. The unearned income from the fees is accreted into
income over the life of the financing.
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
148
In connection with its portfolio debt investments, Main Street sometimes receives nominal cost warrants or
warrants with an exercise price below the fair value of the underlying equity (together, “nominal cost equity”) that are
valued as part of the negotiation process with the particular portfolio company. When Main Street receives nominal cost
equity, it allocates its cost basis in its investment between its debt security and its nominal cost equity at the time of
origination based on amounts negotiated with the particular portfolio company. The allocated amounts are based upon the
fair value of the nominal cost equity, which is then used to determine the allocation of cost to the debt security. Any
discount recorded on a debt investment resulting from this allocation is reflected as unearned income, which is netted
against the applicable debt investment, and accreted into interest income over the life of the debt investment. The actual
collection of this interest is deferred until the time of debt principal repayment.
Main Street may also purchase debt securities at a discount or at a premium to the par value of the debt security.
In the case of a purchase at a discount, Main Street records the investment at the par value of the debt security net of the
discount, and the discount is accreted into interest income over the life of the debt investment. In the case of a purchase at a
premium, Main Street records the investment at the par value of the debt security plus the premium, and the premium is
amortized as a reduction to interest income over the life of the debt investment.
To maintain RIC tax treatment (as discussed in Note B.10. — Summary of Significant Accounting Policies —
Income Taxes below), these non-cash sources of income may need to be paid out to stockholders in the form of
distributions, even though Main Street may not have collected the interest income. For the years ended December 31, 2024,
2023 and 2022, 2.0%, 1.8% and 1.8%, respectively, of Main Street’s total investment income was attributable to interest
income from the accretion of discounts associated with debt investments, net of any premium amortization.
8.
Share-Based Compensation
Main Street accounts for its share-based compensation plans using the fair value method, as prescribed by ASC
718, Compensation—Stock Compensation. Accordingly, for restricted stock awards, Main Street measures the grant date
fair value based upon the market price of its common stock on the date of the grant and amortizes the fair value of the
awards as share-based compensation expense over the requisite service period, which is generally the vesting term.
Main Street recognizes all excess tax benefits and tax deficiencies associated with share-based compensation
(including tax benefits of dividends on share-based payment awards) as income tax expense or benefit in the income
statement and does not delay recognition of a tax benefit until the tax benefit is realized through a reduction to taxes
payable. As such, the tax effects of exercised or vested awards are treated as discrete items in the reporting period in which
they occur. Additionally, Main Street has elected to account for forfeitures as they occur.
9.
Deferred Compensation Plan
The Main Street Capital Corporation Deferred Compensation Plan (the “Deferred Compensation Plan”) allows
directors and certain employees to defer receipt of some or all of their cash compensation or directors’ fees in accordance
with plan terms. Deferred Compensation Plan participants elect one or more investment options, including phantom Main
Street stock units, interests in affiliated funds and various mutual funds, where their deferred amounts are notionally
invested, and Main Street invests the deferred amounts through a trust (except for phantom Main Street stock units),
pending distribution.
Compensation deferred under the Deferred Compensation Plan is recognized on the same basis as such
compensation would have been recognized if not deferred. The appreciation (depreciation) in the fair value of deferred
compensation plan assets is reflected in Main Street's Consolidated Statements of Operations as unrealized appreciation
(depreciation), with the recognition of a corresponding and offsetting deferred compensation expense or (benefit),
respectively. Deferred compensation expense or (benefit) does not result in a net cash impact to Main Street upon
settlement. Investments in the trust are recognized on the Consolidated Balance Sheets as an asset of Main Street (other
assets) and as a deferred compensation liability (other liabilities).
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
149
Phantom Main Street stock units under the Deferred Compensation Plan are not issued shares of Main Street
common stock and are not included as outstanding on the Consolidated Statements of Changes in Net Assets until such
shares are actually distributed to the participant, but the related phantom stock units are included in weighted-average
shares outstanding with the related dollar amount of the deferral included in total expenses in Main Street’s Consolidated
Statements of Operations as the deferred fees represented by such phantom stock units are earned over the service period.
Additional phantom stock units from dividends on phantom stock units are included in the Consolidated Statements of
Changes in Net Assets as an increase to dividends to stockholders offset by a corresponding increase to additional paid-in
capital.
10.
Income Taxes
MSCC has elected to be treated for U.S. federal income tax purposes as a RIC. MSCC’s taxable income includes
the taxable income generated by MSCC and certain of its subsidiaries, including the Funds and Structured Subsidiaries,
which are treated as disregarded entities for tax purposes. As a RIC, MSCC generally will not pay corporate-level U.S.
federal income taxes on any net ordinary taxable income or capital gains that MSCC distributes to its stockholders. MSCC
must generally distribute at least 90% of its “investment company taxable income” (which is generally its net ordinary
taxable income and realized net short-term capital gains in excess of realized net long-term capital losses) and 90% of its
tax-exempt income to maintain its RIC status (pass-through tax treatment for amounts distributed). As part of maintaining
RIC status, undistributed taxable income (subject to a 4% non-deductible U.S. federal excise tax) pertaining to a given
fiscal year may be distributed up to twelve months subsequent to the end of that fiscal year, provided such dividends are
declared on or prior to the later of (i) the filing of the U.S. federal income tax return for the applicable fiscal year or (ii) the
fifteenth day of the ninth month following the close of the year in which such taxable income was generated.
The Taxable Subsidiaries primarily hold certain equity investments for Main Street. The Taxable Subsidiaries
permit Main Street to hold equity investments in portfolio companies which are “pass-through” entities for tax purposes
and to continue to comply with the “source-of-income” requirements contained in the RIC tax provisions of the Code. The
Taxable Subsidiaries are consolidated with Main Street for U.S. GAAP financial reporting purposes, and the portfolio
investments held by the Taxable Subsidiaries are included in Main Street’s consolidated financial statements as portfolio
investments and recorded at fair value. The Taxable Subsidiaries are not consolidated with MSCC for income tax purposes
and may generate income tax expense, or benefit, and tax assets and liabilities, as a result of their ownership of certain
portfolio investments. The taxable income, or loss, of the Taxable Subsidiaries may differ from their book income, or loss,
due to temporary book and tax timing differences and permanent differences. The Taxable Subsidiaries are each taxed at
corporate income tax rates based on their taxable income. The income tax expense, or benefit, if any, and the related tax
assets and liabilities, of the Taxable Subsidiaries are reflected in Main Street’s consolidated financial statements.
The External Investment Manager is an indirect wholly-owned subsidiary of MSCC owned through a Taxable
Subsidiary and is a disregarded entity for tax purposes. The External Investment Manager has entered into a tax sharing
agreement with its Taxable Subsidiary owner. Since the External Investment Manager is accounted for as a portfolio
investment of MSCC and is not included as a consolidated subsidiary of MSCC in MSCC’s consolidated financial
statements, and as a result of the tax sharing agreement with its Taxable Subsidiary owner, for its stand-alone financial
reporting purposes the External Investment Manager is treated as if it is taxed at corporate income tax rates based on its
taxable income and, as a result of its activities, may generate income tax expense or benefit. The income tax expense, or
benefit, if any, and the related tax assets and liabilities, of the External Investment Manager are reflected in the External
Investment Manager’s separate financial statements.
The Taxable Subsidiaries and the External Investment Manager use the liability method in accounting for income
taxes. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and
liabilities and their reported amounts in the consolidated financial statements, using statutory tax rates in effect for the year
in which the temporary differences are expected to reverse. A valuation allowance is provided, if necessary, against
deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.
Main Street’s net assets as included on the Consolidated Balance Sheets and Consolidated Statements of Changes in Net
Assets include an adjustment to classification as a result of permanent book-to-tax differences, which include differences in
the book and tax treatment of income and expenses.
Taxable income generally differs from net income for financial reporting purposes due to temporary and
permanent differences in the recognition of income and expenses. Taxable income generally excludes net unrealized
appreciation or depreciation, as investment gains or losses are not included in taxable income until they are realized.
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
150
11.
Net Realized Gains or Losses and Net Unrealized Appreciation or Depreciation
Realized gains or losses are measured by the difference between the net proceeds from the sale or redemption of
an investment or a financial instrument and the cost basis of the investment or financial instrument, without regard to
unrealized appreciation or depreciation previously recognized, and includes investments written-off during the period net
of recoveries and realized gains or losses from in-kind redemptions. Net unrealized appreciation or depreciation reflects the
net change in the fair value of the Investment Portfolio and financial instruments and the reclassification of any prior period
unrealized appreciation or depreciation on exited investments and financial instruments to realized gains or losses.
12.
Fair Value of Financial Instruments
Fair value estimates are made at discrete points in time based on relevant information. These estimates may be
subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with
precision. Main Street believes that the carrying amounts of its financial instruments, consisting of cash and cash
equivalents, receivables, payables and other liabilities approximate the fair values of such items due to the short-term
nature of these instruments.
Main Street’s debt instruments, including all revolving and term debt, are accounted for on a historical cost basis
as applicable under U.S. GAAP. As also required under U.S. GAAP, Main Street discloses the estimated fair value of its
debt obligations in Note E — Debt. To estimate the fair value of Main Street’s multiple tranches of unsecured debt
instruments as disclosed in Note E — Debt, Main Street uses quoted market prices. For the estimated fair value of Main
Street’s SBIC debentures, Main Street uses the Yield-to-Maturity valuation method based on projections of the discounted
future free cash flows that the debt security will likely generate, including both the discounted cash flows of the associated
interest and principal amounts for the debt security. The inputs used to value Main Street’s debt instruments for purposes of
the fair value estimate disclosures in Note E — Debt are considered to be Level 2 according to the ASC 820 fair value
hierarchy.
13.
Earnings Per Share
Basic and diluted per share calculations are computed utilizing the weighted-average number of shares of common
stock outstanding for the period. In accordance with ASC 260, Earnings Per Share, the unvested shares of restricted stock
awarded pursuant to Main Street’s equity compensation plans are participating securities and, therefore, are included in the
basic earnings per share calculation. As a result, for all periods presented, there is no difference between diluted earnings
per share and basic earnings per share amounts.
14.
Segments
Main Street operates as a single segment with a principal investment objective to maximize total return from
generating current income from debt investments and current income and capital appreciation from equity and equity-
related investments. The Company’s Investment Committee and Chief Executive Officer collectively perform the function
that allocates resources and assesses performance, and thus together, serve as the Company’s chief operating decision
maker (the “CODM”). Among other metrics, the CODM uses net investment income as a primary GAAP profit or loss
metric used in making operating decisions, which can be found on the Consolidated Statement of Operations along with
significant expenses. The measure of segment assets is reported on the Consolidated Balance Sheets as total assets.
15.
Recently Issued or Adopted Accounting Standards
In November 2022, the FASB issued ASU 2022-06, Reference rate reform (Topic 848) — Deferral of the Sunset
Date of Topic 848, which deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024 after
which entities will no longer be permitted to apply the relief in Topic 848. The Company utilized the optional expedients
and exceptions provided by ASU 2020-04 and extended by ASU 2022-06 during the year ended December 31, 2023, the
effect of which was not material to the consolidated financial statements and the notes thereto. For the current year, the
Company will no longer utilize the optional expedients provided by ASU 2020-04, as LIBOR is no longer referenced in
any of its contracts. ASU 2022-06 did not have a material impact on the consolidated financial statements and the notes
thereto.
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
151
In November 2023, the FASB issued ASU 2023-07, Segment Reporting - Improvements to Reportable Segment
Disclosures. The amendments in this update require incremental disclosures related to a public entity’s reportable
segments. ASU 2023-07 is effective for years beginning after December 15, 2023 and interim periods in fiscal years
beginning after December 15, 2024. See Note B.14 - Summary of Significant Accounting Policies - Segments for the
incremental disclosures.
In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. The amendments
in this update require more disaggregated information on income taxes paid. ASU 2023-09 is effective for years beginning
after December 15, 2024, and early adoption is permitted. The Company is currently assessing the impact of the new
guidance, but it does not expect ASU 2023-09 to have a material impact on the consolidated financial statements and the
notes thereto.
From time to time, new accounting pronouncements are issued by the FASB or other standards-setting bodies that
are adopted by the Company as of the specified effective date. The Company believes that the impact of recently issued
standards and any that are not yet effective will not have a material impact on its consolidated financial statements upon
adoption.
NOTE C — FAIR VALUE HIERARCHY FOR INVESTMENTS — PORTFOLIO COMPOSITION
ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy
based on the quality of inputs used to measure fair value, and enhances disclosure requirements for fair value
measurements. Main Street accounts for its investments at fair value.
Fair Value Hierarchy
In accordance with ASC 820, Main Street has categorized its investments based on the priority of the inputs to the
valuation technique into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted
prices in active markets for identical investments (Level 1) and the lowest priority to unobservable inputs (Level 3).
Investments recorded on Main Street’s Consolidated Balance Sheets are categorized based on the inputs to the
valuation techniques as follows:
Level 1—Investments whose values are based on unadjusted quoted prices for identical assets in an
active market that Main Street has the ability to access (examples include investments in active exchange-traded
equity securities and investments in most U.S. government and agency securities).
Level 2—Investments whose values are based on quoted prices in markets that are not active or model
inputs that are observable either directly or indirectly for substantially the full term of the investment. Level 2
inputs include the following:
•
Quoted prices for similar assets in active markets (for example, investments in restricted stock);
•
Quoted prices for identical or similar assets in non-active markets (for example, investments in
thinly traded public companies);
•
Pricing models whose inputs are observable for substantially the full term of the investment (for
example, market interest rate indices); and
•
Pricing models whose inputs are derived principally from, or corroborated by, observable market
data through correlation or other means for substantially the full term of the investment.
Level 3—Investments whose values are based on prices or valuation techniques that require inputs that
are both unobservable and significant to the overall fair value measurement (for example, investments in illiquid
securities issued by privately held companies). These inputs reflect management’s own assumptions about the
assumptions a market participant would use in pricing the investment.
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
152
As required by ASC 820, when the inputs used to measure fair value fall within different levels of the hierarchy,
the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the
fair value measurement in its entirety. For example, a Level 3 fair value measurement may include inputs that are
observable (Levels 1 and 2) and unobservable (Level 3). Therefore, unrealized appreciation and depreciation related to
such investments categorized within the Level 3 tables below may include changes in fair value that are attributable to both
observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).
As of December 31, 2024 and 2023, all of Main Street’s LMM portfolio investments consisted of illiquid
securities issued by privately held companies and the fair value determination for these investments primarily consisted of
unobservable inputs. As a result, all of Main Street’s LMM portfolio investments were categorized as Level 3 as of
December 31, 2024 and 2023.
As of December 31, 2024 and 2023, Main Street’s Private Loan portfolio investments primarily consisted of
investments in secured debt investments. The fair value determination for these investments consisted of a combination of
observable inputs in non-active markets for which sufficient observable inputs were not available to determine the fair
value of these investments and unobservable inputs. As a result, all of Main Street’s Private Loan portfolio investments
were categorized as Level 3 as of December 31, 2024 and 2023.
As of December 31, 2024 and 2023, Main Street’s Middle Market portfolio investments consisted primarily of
investments in secured and unsecured debt investments and independently rated debt investments. The fair value
determination for these investments consisted of a combination of observable inputs in non-active markets for which
sufficient observable inputs were not available to determine the fair value of these investments and unobservable inputs. As
a result, all of Main Street’s Middle Market portfolio investments were categorized as Level 3 as of December 31, 2024
and 2023.
As of December 31, 2024 and 2023, Main Street’s Other Portfolio investments consisted of illiquid securities
issued by privately held entities and the fair value determination for these investments primarily consisted of unobservable
inputs. As a result, all of Main Street’s Other Portfolio investments were categorized as Level 3 as of December 31, 2024
and 2023.
As of December 31, 2024 and 2023, Main Street did not hold any short-term portfolio investments.
As of December 31, 2024 and 2023, all money market funds included in cash and cash equivalents were valued
using Level 1 inputs.
The fair value determination of each portfolio investment categorized as Level 3 required one or more of the
following unobservable inputs:
•
Financial information obtained from each portfolio company, including unaudited statements of operations
and balance sheets for the most recent period available as compared to budgeted numbers;
•
Current and projected financial condition of the portfolio company;
•
Current and projected ability of the portfolio company to service its debt obligations;
•
Type and amount of collateral, if any, underlying the investment;
•
Current financial ratios (e.g., fixed charge coverage ratio, interest coverage ratio and net debt/EBITDA ratio)
applicable to the investment;
•
Current liquidity of the investment and related financial ratios (e.g., current ratio and quick ratio);
•
Pending debt or capital restructuring of the portfolio company;
•
Projected operating results of the portfolio company;
•
Current information regarding any offers to purchase the investment;
•
Current ability of the portfolio company to raise any additional financing as needed;
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
153
•
Changes in the economic environment which may have a material impact on the operating results of the
portfolio company;
•
Internal occurrences that may have an impact (both positive and negative) on the operating performance of
the portfolio company;
•
Qualitative assessment of key management;
•
Contractual rights, obligations or restrictions associated with the investment; and
•
Other factors deemed relevant.
The use of significant unobservable inputs creates uncertainty in the measurement of fair value as of the reporting
date. The significant unobservable inputs used in the fair value measurement of Main Street’s LMM equity securities,
which are generally valued through an average of the discounted cash flow technique and the market comparable/enterprise
value technique (unless one of these approaches is determined to not be appropriate), are (i) EBITDA multiples and (ii) the
weighted-average cost of capital (“WACC”). Significant increases (decreases) in EBITDA multiple inputs in isolation
would result in a significantly higher (lower) fair value measurement, and significant increases (decreases) in WACC
inputs in isolation would result in a significantly lower (higher) fair value measurement. The significant unobservable
inputs used in the fair value measurement of Main Street’s LMM, Private Loan and Middle Market debt securities are
(i) risk adjusted discount rates used in the Yield-to-Maturity valuation technique (see Note B.1. — Summary of Significant
Accounting Policies — Valuation of the Investment Portfolio) and (ii) the percentage of expected principal recovery.
Significant increases (decreases) in any of these discount rates in isolation would result in a significantly lower (higher) fair
value measurement. Significant increases (decreases) in any of these expected principal recovery percentages in isolation
would result in a significantly higher (lower) fair value measurement. However, due to the nature of certain investments,
fair value measurements may be based on other criteria, such as third-party appraisals of collateral and fair values as
determined by independent third parties, which are not presented in the tables below.
The following tables provide a summary of the significant unobservable inputs used to fair value Main Street’s
Level 3 portfolio investments as of December 31, 2024 and 2023:
Type of
Investment
Fair Value as of
December 31, 2024
(in thousands)
Valuation
Technique
Significant Unobservable
Inputs
Range (4)
Weighted-
Average (4)(5)
Median (4)
Equity
investments
$
1,654,304
Discounted cash flow
WACC
9.4% - 22.5%
14.5%
15.1%
Market comparable /
Enterprise value
EBITDA multiple (1) (3)
4.8x - 8.9x (2)
7.0x
6.5x
Debt
investments
$
3,174,745
Discounted cash flow
Risk adjusted discount
factor (6)
8.5% - 19.1% (2)
12.6%
12.2%
Expected principal recovery
percentage
0.0% - 100.0%
99.5%
100.0%
Debt
investments
$
103,620
Market approach
Third-party quote
21.0 - 100.7
90.5
84.5
Total Level 3
investments
$
4,932,669
___________________________
(1) EBITDA may include proforma adjustments and/or other addbacks based on specific circumstances related to each
investment.
(2) Range excludes outliers that are greater than one standard deviation from the mean. Including these outliers, the range
for EBITDA multiple is 2.0x - 17.0x and the range for risk adjusted discount factor is 5.0% - 38.3%.
(3) The fair value of the equity investment in the External Investment Manager is based on a fee multiple of 8.5x. The fair
value determination is based on a discounted, blended multiple based on the multiples for similar businesses in active
markets and actual multiples used in private transactions.
(4) Does not include investments for which the valuation technique does not include the use of the applicable fair value
input.
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
154
(5) Weighted-average is calculated for each significant unobservable input based on the applicable security’s fair value.
(6) Discount rate includes the effect of the standard SOFR base rate, as applicable.
Type of
Investment
Fair Value as of
December 31, 2023
(in thousands)
Valuation
Technique
Significant Unobservable
Inputs
Range (4)
Weighted-
Average (4)(5)
Median (4)
Equity
investments
$
1,402,354
Discounted cash flow
WACC
9.7% - 22.7%
14.5 %
15.5 %
Market comparable /
Enterprise value
EBITDA multiple (1) (3)
4.8x - 8.9x (2)
7.1x
6.4x
Debt
investments
$
2,720,425
Discounted cash flow
Risk adjusted discount
factor (6)
9.8% - 18.0% (2)
12.9 %
13.0 %
Expected principal recovery
percentage
0.0% - 100.0%
99.7 %
100.0 %
Debt
investments
$
163,492
Market approach
Third-party quote
3.0 - 100.0
89.8
92.4
Total Level 3
investments
$
4,286,271
___________________________
(1) EBITDA may include proforma adjustments and/or other addbacks based on specific circumstances related to each
investment.
(2) Range excludes outliers that are greater than one standard deviation from the mean. Including these outliers, the range
for EBITDA multiple is 2.0x - 15.7x and the range for risk adjusted discount factor is 7.0% - 31.6%.
(3) The fair value of the equity investment in the External Investment Manager is based on a fee multiple of 7.2x. The fair
value determination is based on a discounted, blended multiple based on the multiples for similar businesses in active
markets and actual multiples used in private transactions.
(4) Does not include investments for which the valuation technique does not include the use of the applicable fair value
input.
(5) Weighted-average is calculated for each significant unobservable input based on the applicable security’s fair value.
(6) Discount rate includes the effect of the standard SOFR base rate, as applicable.
The following tables provide a summary of changes in fair value of Main Street’s Level 3 portfolio investments
for the years ended December 31, 2024 and 2023 (amounts in thousands):
Type of
Investment
Fair Value as
of
December 31,
2023
Transfers
Into Level 3
Hierarchy
Redemptions/
Repayments
New
Investments
Net Changes
from
Unrealized
to Realized
Net
Unrealized
Appreciation
(Depreciation)
Other (1)
Fair Value as
of
December 31,
2024
Debt
$
2,883,917
$
—
$
(919,626) $ 1,368,567
$
15,815
$
(58,807) $
(11,501) $
3,278,365
Equity
1,395,744
—
(75,972)
133,870
(66,994)
239,032
11,501
1,637,181
Equity Warrant
6,610
—
—
4,514
(110)
6,109
—
17,123
$
4,286,271
$
—
$
(995,598) $ 1,506,951
$
(51,289) $
186,334
$
—
$
4,932,669
___________________________
(1) Includes the impact of non-cash conversions. These transactions represent non-cash investing activities. See additional
cash flow information in the Consolidated Statements of Cash Flows.
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
155
Type of
Investment
Fair Value as
of
December 31,
2022
Transfers
Into Level 3
Hierarchy
Redemptions/
Repayments
New
Investments
Net Changes
from
Unrealized
to Realized
Net
Unrealized
Appreciation
(Depreciation)
Other (1)
Fair Value as
of
December 31,
2023
Debt
$
2,928,196
$
—
$
(891,359) $
800,838
$
114,759
$
(24,629) $
(43,888) $
2,883,917
Equity
1,166,643
—
(46,829)
89,950
3,028
136,570
46,382
1,395,744
Equity Warrant
5,434
—
(425)
2,091
425
1,661
(2,576)
6,610
$
4,100,273
$
—
$
(938,613) $
892,879
$
118,212
$
113,602
$
(82) $
4,286,271
___________________________
(1) Includes the impact of non-cash conversions. These transactions represent non-cash investing activities. See additional
cash flow information in the Consolidated Statements of Cash Flows.
As of December 31, 2024 and 2023, Main Street’s investments at fair value were categorized as follows in the fair
value hierarchy for ASC 820 purposes:
Fair Value Measurements
(in thousands)
As of December 31, 2024
Fair Value
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
LMM portfolio investments
$
2,502,872 $
— $
— $
2,502,872
Private Loan portfolio investments
1,904,324
—
—
1,904,324
Middle Market portfolio investments
155,329
—
—
155,329
Other Portfolio investments
124,144
—
—
124,144
External Investment Manager
246,000
—
—
246,000
Total investments
$
4,932,669 $
— $
— $
4,932,669
Fair Value Measurements
(in thousands)
As of December 31, 2023
Fair Value
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
LMM portfolio investments
$
2,273,000 $
— $
— $
2,273,000
Private Loan portfolio investments
1,453,549
—
—
1,453,549
Middle Market portfolio investments
243,695
—
—
243,695
Other Portfolio investments
141,964
—
—
141,964
External Investment Manager
174,063
—
—
174,063
Total investments
$
4,286,271 $
— $
— $
4,286,271
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
156
Investment Portfolio Composition
Main Street’s principal investment objective is to maximize its portfolio’s total return by generating current
income from its debt investments and current income and capital appreciation from its equity and equity-related
investments, including warrants, convertible securities and other rights to acquire equity securities in a portfolio company.
Main Street seeks to achieve its investment objective primarily through its LMM and Private Loan investment strategies.
Main Street’s LMM investment strategy is focused on investments in secured debt and equity investments in
privately held, LMM companies based in the United States. Main Street’s LMM portfolio companies generally have annual
revenues between $10 million and $150 million, and its LMM investments generally range in size from $5 million to
$125 million. The LMM debt investments are typically secured by a first priority lien on the assets of the portfolio
company, can include either fixed or floating interest rates and generally have a term of between five and seven years from
the original investment date. Main Street typically makes direct equity investments and/or receives nominally priced equity
warrants in connection with a LMM portfolio company debt investment.
Main Street’s Private Loan investment strategy is focused on investments in secured debt in privately held
companies that generally have annual revenues between $25 million and $500 million, and its Private Loan investments
generally range in size from $10 million to $100 million. Main Street’s Private Loan investments primarily consist of debt
securities that have primarily been originated directly by Main Street or, to a lesser extent, through its strategic
relationships with other investment funds on a collaborative basis through investments that are often referred to in the debt
markets as “club deals” because of the small lender group size. In both cases, Main Street’s Private Loan investments are
typically made in a company owned by or in the process of being acquired by a private equity fund. Main Street’s Private
Loan portfolio debt investments are generally secured by a first priority lien on the assets of the portfolio company and
typically have a term of between three and seven years from the original investment date. Main Street may have the option
to co-invest with the private equity fund in the equity securities of its Private Loan portfolio companies.
Main Street also maintains a legacy portfolio of investments in Middle Market companies. Main Street’s Middle
Market investments are generally debt investments in companies owned by a private equity fund that were originally issued
through a syndication financing process. Main Street has generally stopped making new Middle Market investments and
expects the size of its Middle Market investment portfolio to continue to decline in future periods as its existing Middle
Market investments are repaid or sold. Main Street’s Middle Market debt investments generally range in size from
$3 million to $25 million, are generally secured by a first priority lien on the assets of the portfolio company and typically
have an expected duration of between three and seven years from the original investment date.
Main Street’s Other Portfolio investments primarily consist of investments that are not consistent with the typical
profiles for its LMM, Private Loan or Middle Market portfolio investments, including investments which may be managed
by third parties. In the Other Portfolio, Main Street may incur indirect fees and expenses in connection with investments
managed by third parties, such as investments in other investment companies or private funds. For Other Portfolio
investments, Main Street generally receives distributions related to the assets held by the portfolio company. Those assets
are typically expected to be realized over a five to ten-year period.
Based upon Main Street’s liquidity and capital structure management activities, Main Street’s Investment
Portfolio may also periodically include short-term portfolio investments that are atypical of Main Street’s LMM, Private
Loan and Middle Market portfolio investments in that they are intended to be a short-term deployment of capital. Those
assets are typically expected to be realized in one year or less. These short-term portfolio investments are not expected to
be a significant portion of the overall Investment Portfolio.
Main Street’s external asset management business is conducted through its External Investment Manager. The
External Investment Manager earns management fees based on the assets under management for External Parties and may
earn incentive fees, or a carried interest, based on the performance of the assets managed. Main Street entered into an
agreement with the External Investment Manager to share employees in connection with its asset management business
generally, and specifically for its relationship with MSC Income Fund, Inc. (“MSC Income”) and its other clients. Through
this agreement, Main Street shares employees with the External Investment Manager, including their related infrastructure,
business relationships, management expertise and capital raising capabilities. Main Street allocates the related expenses to
the External Investment Manager pursuant to the sharing agreement. Main Street’s total expenses for the years ended
December 31, 2024, 2023 and 2022 are net of expenses allocated to the External Investment Manager of $23.1 million,
$22.1 million and $13.0 million, respectively.
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
157
Investment income, consisting of interest, dividends and fees, can fluctuate dramatically due to various factors,
including the level of new investment activity, repayments of debt investments or sales of equity interests. Investment
income in any given year could also be highly concentrated among several portfolio companies. For the years ended
December 31, 2024, 2023 and 2022, Main Street did not record investment income from any single portfolio company in
excess of 10% of total investment income.
The following tables provide a summary of Main Street’s investments in the LMM, Private Loan and Middle
Market portfolios as of December 31, 2024 and 2023 (this information excludes Other Portfolio investments and the
External Investment Manager, which are discussed further below).
As of December 31, 2024
LMM (a)
Private Loan
Middle Market
(dollars in millions)
Number of portfolio companies
84
91
15
Fair value
$
2,502.9
$
1,904.3
$
155.3
Cost
$
1,937.8
$
1,952.5
$
195.0
Debt investments as a % of portfolio (at cost)
70.8 %
95.4 %
86.5 %
Equity investments as a % of portfolio (at cost)
29.2 %
4.6 %
13.5 %
% of debt investments at cost secured by first priority lien
99.2 %
99.9 %
97.2 %
Weighted-average annual effective yield (b)
12.8 %
11.8 %
12.3 %
Average EBITDA (c)
$
10.2
$
30.5
$
53.4
___________________________
(a) As of December 31, 2024, Main Street had equity ownership in all of its LMM portfolio companies, and the average
fully diluted equity ownership in those portfolio companies was 38%.
(b) The weighted-average annual effective yields were computed using the effective interest rates for all debt investments
as of December 31, 2024, including amortization of deferred debt origination fees and accretion of original issue
discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual
status, and are weighted based upon the principal amount of each applicable debt investment as of December 31, 2024.
The weighted-average annual effective yield on Main Street’s debt portfolio as of December 31, 2024, including debt
investments on non-accrual status, was 12.3% for its LMM portfolio, 11.5% for its Private Loan portfolio and 10.1%
for its Middle Market portfolio. The weighted-average annual effective yield is not reflective of what an investor in
shares of Main Street’s common stock will realize on its investment because it does not reflect changes in the market
value of Main Street’s stock, Main Street’s utilization of debt capital in its capital structure, Main Street’s expenses or
any sales load paid by an investor.
(c) The average EBITDA is calculated using a simple average for the LMM portfolio and a weighted-average for the
Private Loan and Middle Market portfolios. These calculations exclude certain portfolio companies, including five
LMM portfolio companies, five Private Loan portfolio companies and two Middle Market portfolio companies, as
EBITDA is not a meaningful valuation metric for Main Street’s investments in these portfolio companies, and those
portfolio companies whose primary purpose is to own real estate and those portfolio companies whose primary
operations have ceased and only residual value remains.
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
158
As of December 31, 2023
LMM (a)
Private Loan
Middle Market
(dollars in millions)
Number of portfolio companies
80
87
23
Fair value
$
2,273.0
$
1,453.5
$
243.7
Cost
$
1,782.9
$
1,470.1
$
294.4
Debt investments as a % of portfolio (at cost)
72.0 %
94.7 %
91.4 %
Equity investments as a % of portfolio (at cost)
28.0 %
5.3 %
8.6 %
% of debt investments at cost secured by first priority lien
99.2 %
100.0 %
99.1 %
Weighted-average annual effective yield (b)
13.0 %
12.9 %
12.5 %
Average EBITDA (c)
$
8.2
$
27.2
$
64.2
___________________________
(a) As of December 31, 2023, Main Street had equity ownership in all of its LMM portfolio companies, and the average
fully diluted equity ownership in those portfolio companies was 40%.
(b) The weighted-average annual effective yields were computed using the effective interest rates for all debt investments
as of December 31, 2023, including amortization of deferred debt origination fees and accretion of original issue
discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual
status, and are weighted based upon the principal amount of each applicable debt investment as of December 31, 2023.
The weighted-average annual effective yield on Main Street’s debt portfolio as of December 31, 2023, including debt
investments on non-accrual status, was 12.9% for its LMM portfolio, 12.5% for its Private Loan portfolio and 10.8%
for its Middle Market portfolio. The weighted-average annual effective yield is not reflective of what an investor in
shares of Main Street’s common stock will realize on its investment because it does not reflect changes in the market
value of Main Street’s stock, Main Street’s utilization of debt capital in its capital structure, Main Street’s expenses or
any sales load paid by an investor.
(c) The average EBITDA is calculated using a simple average for the LMM portfolio and a weighted-average for the
Private Loan and Middle Market portfolios. These calculations exclude certain portfolio companies, including two
LMM portfolio companies and two Private Loan portfolio companies, as EBITDA is not a meaningful valuation metric
for Main Street’s investments in these portfolio companies, and those portfolio companies whose primary purpose is to
own real estate.
For the years ended December 31, 2024 and 2023, Main Street achieved a total return on investments of 17.9%
and 16.3%, respectively. Total return on investments is calculated using the interest, dividend and fee income, as well as
the realized and unrealized change in fair value of the Investment Portfolio for the specified period. Main Street’s total
return on investments is not reflective of what an investor in shares of Main Street’s common stock will realize on its
investment because it does not reflect changes in the market value of Main Street’s stock, Main Street’s utilization of debt
capital in its capital structure, Main Street’s expenses or any sales load paid by an investor.
As of December 31, 2024, Main Street had Other Portfolio investments in 31 entities, spread across 12 investment
managers, collectively totaling $124.1 million in fair value and $122.5 million in cost basis and which comprised 2.5% and
2.9% of Main Street’s Investment Portfolio at fair value and cost, respectively. As of December 31, 2023, Main Street had
Other Portfolio investments in 30 entities, spread across 13 investment managers, collectively totaling $142.0 million in
fair value and $149.1 million in cost basis and which comprised 3.3% and 4.0% of Main Street’s Investment Portfolio at
fair value and cost, respectively.
As discussed further in Note A.1. — Organization and Basis of Presentation — Organization, Main Street holds
an investment in the External Investment Manager, a wholly-owned subsidiary that is treated as a portfolio investment. As
of December 31, 2024, this investment had a fair value of $246.0 million and a cost basis of $29.5 million, which
comprised 5.0% and 0.7% of Main Street’s Investment Portfolio at fair value and cost, respectively. As of December 31,
2023, this investment had a fair value of $174.1 million and a cost basis of $29.5 million, which comprised 4.1% and 0.8%
of Main Street’s Investment Portfolio at fair value and cost, respectively.
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
159
The following tables summarize the composition of Main Street’s total combined LMM, Private Loan and Middle
Market portfolio investments at cost and fair value by type of investment as a percentage of the total combined LMM,
Private Loan and Middle Market portfolio investments, as of December 31, 2024 and 2023 (this information excludes
Other Portfolio investments and the External Investment Manager, which are discussed above).
Cost:
December 31, 2024
December 31, 2023
First lien debt
82.9 %
82.7 %
Equity
16.4
16.8
Second lien debt
0.2
0.1
Equity warrants
0.3
0.2
Other
0.2
0.2
100.0 %
100.0 %
Fair Value:
December 31, 2024
December 31, 2023
First lien debt
71.4 %
71.6 %
Equity
27.8
27.8
Second lien debt
0.2
0.2
Equity warrants
0.4
0.2
Other
0.2
0.2
100.0 %
100.0 %
The following tables summarize the composition of Main Street’s total combined LMM, Private Loan and Middle
Market portfolio investments by geographic region of the United States and other countries at cost and fair value as
a percentage of the total combined LMM, Private Loan and Middle Market portfolio investments, as of December 31, 2024
and 2023 (this information excludes Other Portfolio investments and the External Investment Manager). The geographic
composition is determined by the location of the corporate headquarters of the portfolio company.
Cost:
December 31, 2024
December 31, 2023
West
25.1 %
25.8 %
Midwest
22.7
17.0
Northeast
21.2
22.3
Southwest
16.7
19.7
Southeast
11.6
13.1
Canada
1.3
0.4
Other Non-United States
1.4
1.7
100.0 %
100.0 %
Fair Value:
December 31, 2024
December 31, 2023
Midwest
24.2 %
18.1 %
West
24.1
25.4
Southwest
20.1
22.0
Northeast
19.4
21.3
Southeast
9.7
11.3
Canada
1.2
0.3
Other Non-United States
1.3
1.6
100.0 %
100.0 %
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
160
Main Street’s LMM, Private Loan and Middle Market portfolio investments are in companies conducting business
in a variety of industries. The following tables summarize the composition of Main Street’s total combined LMM, Private
Loan and Middle Market portfolio investments by industry at cost and fair value as of December 31, 2024 and 2023 (this
information excludes Other Portfolio investments and the External Investment Manager).
Cost:
December 31, 2024
December 31, 2023
Machinery
9.2 %
7.7 %
Internet Software & Services
7.1
7.6
Commercial Services & Supplies
5.5
4.5
Professional Services
5.4
6.0
Diversified Consumer Services
4.3
4.9
Health Care Providers & Services
4.3
5.4
IT Services
4.1
5.0
Auto Components
4.0
1.6
Distributors
4.0
4.3
Electrical Equipment
3.9
1.6
Construction & Engineering
3.8
4.9
Containers & Packaging
3.8
3.8
Computers & Peripherals
2.8
2.7
Energy Equipment & Services
2.8
2.7
Textiles, Apparel & Luxury Goods
2.8
3.2
Tobacco
2.8
3.1
Leisure Equipment & Products
2.4
3.1
Software
2.2
2.0
Communications Equipment
2.1
1.2
Specialty Retail
2.0
2.1
Media
1.7
2.4
Aerospace & Defense
1.6
2.9
Food & Staples Retailing
1.6
1.6
Food Products
1.6
1.6
Building Products
1.5
1.7
Diversified Financial Services
1.4
1.7
Chemicals
1.3
1.0
Hotels, Restaurants & Leisure
1.3
1.1
Health Care Equipment & Supplies
1.1
1.3
Internet & Catalog Retail
1.1
1.3
Electronic Equipment, Instruments & Components
0.9
1.5
Household Products
0.8
1.0
Other (1)
4.8
3.5
100.0 %
100.0 %
___________________________
(1) Includes various industries with each industry individually less than 1.0% of the total combined LMM, Private Loan
and Middle Market portfolio investments at each date.
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
161
Fair Value:
December 31, 2024
December 31, 2023
Machinery
11.0 %
8.8 %
Diversified Consumer Services
6.0
7.1
Internet Software & Services
5.9
6.2
Professional Services
5.2
6.5
Commercial Services & Supplies
4.8
3.9
Computers & Peripherals
4.6
4.4
Health Care Providers & Services
4.5
5.0
Construction & Engineering
4.3
5.1
Distributors
4.2
4.5
Containers & Packaging
3.8
3.9
Electrical Equipment
3.7
1.7
IT Services
3.7
4.6
Auto Components
3.6
1.5
Energy Equipment & Services
2.9
2.5
Tobacco
2.9
3.2
Specialty Retail
2.5
2.7
Software
2.3
2.1
Media
1.9
2.7
Textiles, Apparel & Luxury Goods
1.9
2.6
Leisure Equipment & Products
1.7
2.5
Aerospace & Defense
1.6
2.7
Food Products
1.5
1.5
Building Products
1.4
1.5
Communications Equipment
1.4
0.6
Diversified Financial Services
1.3
1.6
Chemicals
1.2
0.9
Food & Staples Retailing
1.2
1.2
Internet & Catalog Retail
1.0
1.2
Air Freight & Logistics
0.9
1.1
Health Care Equipment & Supplies
0.9
1.0
Construction Materials
0.4
1.0
Other (1)
5.8
4.2
100.0 %
100.0 %
___________________________
(1) Includes various industries with each industry individually less than 1.0% of the total combined LMM, Private Loan
and Middle Market portfolio investments at each date.
As of December 31, 2024 and 2023, Main Street had no portfolio investment that was greater than 10% of the
Investment Portfolio at fair value.
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
162
Unconsolidated Significant Subsidiaries
In accordance with Rules 3-09 and 4-08(g) of Regulation S-X, Main Street must determine which of its
unconsolidated controlled portfolio companies, if any, are considered “significant subsidiaries.” In evaluating its
unconsolidated controlled portfolio companies in accordance with Regulation S-X, there are two tests that Main Street
must utilize to determine if any of Main Street’s Control Investments (as defined in Note A — Organization and Basis of
Presentation, including those unconsolidated portfolio companies defined as Control Investments in which Main Street
does not own greater than 50% of the voting securities nor have rights to maintain greater than 50% of the board
representation) are considered significant subsidiaries: the investment test and the income test. The investment test is
generally measured by dividing Main Street’s investment in the Control Investment by the value of Main Street’s total
investments. The income test is generally measured by dividing the absolute value of the combined sum of total investment
income, net realized gain (loss) and net unrealized appreciation (depreciation) from the relevant Control Investment for the
period being tested by the absolute value of Main Street’s change in net assets resulting from operations for the same
period. Rules 3-09 and 4-08(g) of Regulation S-X require Main Street to include (1) separate audited financial statements
of an unconsolidated majority-owned subsidiary (Control Investments in which Main Street owns greater than 50% of the
voting securities) in an annual report and (2) summarized financial information of a Control Investment in a quarterly
report, respectively, if certain thresholds of the investment or income tests are exceeded and the unconsolidated portfolio
company qualifies as a significant subsidiary.
As of December 31, 2024, 2023 and 2022, Main Street had no single investment that qualified as a significant
subsidiary under either the investment or income tests.
NOTE D — EXTERNAL INVESTMENT MANAGER
As discussed further in Note A.1. — Organization and Basis of Presentation — Organization and Note C — Fair
Value Hierarchy for Investments — Portfolio Composition — Investment Portfolio Composition, the External Investment
Manager provides investment management and other services to External Parties. The External Investment Manager is
accounted for as a portfolio investment of MSCC since the External Investment Manager conducts all of its investment
management activities for External Parties.
The External Investment Manager serves as the investment adviser and administrator to MSC Income pursuant to
an Investment Advisory and Administrative Services Agreement entered into in October 2020 between the External
Investment Manager and MSC Income (as amended and restated on January 29, 2025, the “Advisory Agreement”). Under
the Advisory Agreement, prior to January 29, 2025, the External Investment Manager earned a 1.75% annual base
management fee on MSC Income’s average total assets, a subordinated incentive fee on income equal to 20% of pre-
incentive fee net investment income above a specified investment return hurdle rate and a 20% incentive fee on cumulative
net realized capital gains in exchange for providing advisory services to MSC Income. On and after January 29, 2025,
under the Advisory Agreement, the External Investment Manager earns a 1.5% annual base management fee on MSC
Income’s average total assets (including cash and cash equivalents), payable quarterly in arrears (with additional future
contractual reductions based upon changes to MSC Income’s investment portfolio composition), a subordinated incentive
fee on income equal to 17.5% of pre-incentive fee net investment income above a specified investment return hurdle rate,
subject to a 50% / 50% catch-up feature, and a 17.5% incentive fee on cumulative net realized capital gains from
January 29, 2025.
As described more fully in Note L — Related Party Transactions, the External Investment Manager also serves as
the investment adviser and administrator to MS Private Loan Fund I, LP (the “Private Loan Fund”) and MS Private Loan
Fund II, LP (the “Private Loan Fund II”), each a private investment fund with a strategy to co-invest with Main Street in
Private Loan portfolio investments. The External Investment Manager entered into investment management agreements in
December 2020 with the Private Loan Fund and in September 2023 with the Private Loan Fund II, pursuant to which the
External Investment Manager provides investment advisory and management services to each fund in exchange for an
asset-based fee and certain incentive fees. The External Investment Manager may also advise other clients, including funds
and separately managed accounts, pursuant to advisory and services agreements with such clients in exchange for asset-
based and incentive fees.
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
163
The External Investment Manager provides administrative services for certain External Party clients that, to the
extent not waived, are reported as administrative services fees. The administrative services fees generally represent expense
reimbursements for a portion of the compensation, overhead and related expenses for certain professionals directly
attributable to performing administrative services for clients. These fees are recognized as other revenue in the period in
which the related services are rendered.
Main Street determines the fair value of the External Investment Manager using the Waterfall valuation method
under the market approach (see further discussion in Note B.1. — Summary of Significant Accounting Policies — Valuation
of the Investment Portfolio). Any change in fair value of the investment in the External Investment Manager is recognized
on Main Street’s Consolidated Statements of Operations in “Net Unrealized Appreciation (Depreciation) — Control
investments.”
The External Investment Manager is an indirect wholly-owned subsidiary of MSCC owned through a Taxable
Subsidiary and is a disregarded entity for tax purposes. The External Investment Manager has entered into a tax sharing
agreement with its Taxable Subsidiary owner. Since the External Investment Manager is accounted for as a portfolio
investment of Main Street and is not included as a consolidated subsidiary of Main Street in its consolidated financial
statements, and as a result of the tax sharing agreement with its Taxable Subsidiary owner, for financial reporting purposes
the External Investment Manager is treated as if it is taxed at corporate income tax rates based on its taxable income and, as
a result of its activities, may generate income tax expense or benefit. Main Street owns the External Investment Manager
through the Taxable Subsidiary to allow MSCC to continue to comply with the “source-of-income” requirements contained
in the RIC tax provisions of the Code. The taxable income, or loss, of the External Investment Manager may differ from its
book income, or loss, due to temporary book and tax timing differences and permanent differences. As a result of the above
described financial reporting and tax treatment, the External Investment Manager provides for any income tax expense, or
benefit, and any tax assets or liabilities in its separate financial statements.
Main Street shares employees with the External Investment Manager and allocates costs related to such shared
employees to the External Investment Manager generally based on a combination of the direct time spent, new investment
activities and assets under management, depending on the nature of the expense. The total contribution of the External
Investment Manager to Main Street’s net investment income consists of the combination of the expenses allocated to the
External Investment Manager and the dividend income earned from the External Investment Manager. For the years ended
December 31, 2024, 2023 and 2022, the total contribution to Main Street’s net investment income was $34.3 million, $33.4
million and $22.3 million, respectively.
Summarized financial information from the separate financial statements of the External Investment Manager as
of December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023 and 2022 is as follows:
As of
December 31,
2024
As of
December 31,
2023
(dollars in thousands)
Accounts receivable - advisory clients
$
10,183 $
10,777
Intangible Asset
29,500
29,500
Total assets
$
39,683 $
40,277
Accounts payable to MSCC and its subsidiaries
$
7,785 $
7,551
Dividend payable to MSCC and its subsidiaries
2,398
3,226
Equity
29,500
29,500
Total liabilities and equity
$
39,683 $
40,277
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
164
Year Ended
December 31,
2024
2023
2022
(dollars in thousands)
Management fee income
$
23,877 $
22,424 $
21,776
Incentive fees
13,732
13,442
2,516
Administrative services fees
639
608
605
Total revenues
38,248
36,474
24,897
Expenses allocated from MSCC or its subsidiaries:
Salaries, share-based compensation and other personnel costs
(19,843)
(18,794)
(10,129)
Other G&A expenses
(3,245)
(3,256)
(2,835)
Total allocated expenses
(23,088)
(22,050)
(12,964)
Other direct G&A expenses
(229)
(260)
—
Total expenses
(23,317)
(22,310)
(12,964)
Pre-tax income
14,931
14,164
11,933
Tax expense
(3,671)
(2,855)
(2,636)
Net income
$
11,260 $
11,309 $
9,297
NOTE E — DEBT
Summary of Main Street’s debt as of December 31, 2024 is as follows:
Outstanding
Balance
Unamortized Debt
Issuance
(Costs)/Premiums (1)
Recorded Value
Estimated Fair
Value (2)
(dollars in thousands)
Corporate Facility
$
208,000 $
— $
208,000 $
208,000
SPV Facility
176,000
—
176,000
176,000
July 2026 Notes
500,000
(812)
499,188
482,180
June 2027 Notes
400,000
(718)
399,282
407,388
March 2029 Notes
350,000
(2,998)
347,002
364,959
SBIC Debentures
350,000
(6,583)
343,417
298,250
December 2025 Notes
150,000
(518)
149,482
149,940
Total Debt
$
2,134,000 $
(11,629) $
2,122,371 $
2,086,717
___________________________
(1) The unamortized debt issuance costs for the Credit Facilities are reflected as Deferred financing costs on the
Consolidated Balance Sheets, while the deferred debt issuance costs related to the July 2026 Notes, June 2027 Notes,
March 2029 Notes, SBIC Debentures and December 2025 Notes are reflected as contra-liabilities on the Consolidated
Balance Sheets.
(2) Estimated fair value for outstanding debt is shown as if Main Street had adopted the fair value option under ASC 825.
See discussion of the methods used to estimate the fair value of Main Street’s debt in Note B.12. — Summary of
Significant Accounting Policies — Fair Value of Financial Instruments.
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
165
Summary of Main Street’s debt as of December 31, 2023 is as follows:
Outstanding
Balance
Unamortized Debt
Issuance
(Costs)/Premiums (1)
Recorded Value
Estimated Fair
Value (2)
(dollars in thousands)
Corporate Facility
$
200,000 $
— $
200,000 $
200,000
SPV Facility
160,000
—
160,000
160,000
July 2026 Notes
500,000
(1,338)
498,662
458,105
May 2024 Notes
450,000
182
450,182
447,246
SBIC Debentures
350,000
(5,465)
344,535
288,468
December 2025 Notes
150,000
(1,035)
148,965
151,155
Total Debt
$
1,810,000 $
(7,656) $
1,802,344 $
1,704,974
___________________________
(1) The unamortized debt issuance costs for the Credit Facilities are reflected as Deferred financing costs on the
Consolidated Balance Sheets, while the deferred debt issuance costs related to the July 2026 Notes, May 2024 Notes,
SBIC Debentures and December 2025 Notes are reflected as contra-liabilities on the Consolidated Balance Sheets.
(2) Estimated fair value for outstanding debt is shown as if Main Street had adopted the fair value option under ASC 825.
See discussion of the methods used to estimate the fair value of Main Street’s debt in Note B.12. — Summary of
Significant Accounting Policies — Fair Value of Financial Instruments.
Summarized interest expense for the years ended December 31, 2024, 2023 and 2022 is as follows:
Year Ended December 31,
2024
2023
2022
(dollars in thousands)
Corporate Facility
$
27,108 $
26,605 $
18,820
SPV Facility
12,734
14,491
1,375
July 2026 Notes
15,526
15,526
15,526
June 2027 Notes
13,361
—
—
March 2029 Notes
24,269
—
—
SBIC Debentures
10,690
11,394
11,337
December 2025 Notes
12,123
11,704
174
May 2024 Notes
7,618
22,855
22,855
December 2022 Notes
—
—
8,189
Total Interest Expense
$
123,429 $
102,575 $
78,276
A summary of Main Street’s average amount of total borrowings outstanding and overall weighted-average
effective interest rate including amortization of debt issuance costs, original issuance discounts and premiums and fees on
unused lender commitments are as follows:
Year Ended December 31,
2024
2023
2022
(dollars in millions)
Weighted-average borrowings outstanding
$
2,105.6
$
1,949.0
$
1,900.5
Weighted-average effective interest rate
5.9 %
5.3 %
4.1 %
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
166
Corporate Facility
Main Street maintains the Corporate Facility to provide additional liquidity to support its investment and
operational activities. In June 2024, Main Street entered into an amendment to the Corporate Facility to, among other
things: (i) increase the revolving commitments from $995.0 million to $1.11 billion, (ii) increase the accordion feature
providing Main Street with the right to request increases in commitments under the facility from new and existing lenders
on the same terms and conditions as the existing commitments from up to a total of $1.4 billion to up to a total of $1.665
billion, and (iii) extend the revolving period and the final maturity date through June 2028 and June 2029, respectively, on
$1.035 billion of revolving commitments, and August 2026 and August 2027, respectively, on $0.075 billion of revolving
commitments.
As of December 31, 2024, borrowings under the Corporate Facility bore interest, subject to Main Street’s election
and resetting on a monthly basis on the first of each month, on a per annum basis at a rate equal to the applicable SOFR
rate plus an applicable credit spread adjustment of 0.10% plus (i) 1.875% (or the applicable Prime rate plus 0.875%) as
long as Main Street meets certain agreed upon excess collateral and maximum leverage requirements or (ii) 2.0% (or the
applicable Prime Rate plus 1.0%) otherwise. Main Street pays unused commitment fees of 0.25% per annum on the unused
lender commitments under the Corporate Facility. The Corporate Facility is secured by a first lien on the assets of MSCC
and its subsidiaries, excluding the equity ownership or assets of the Funds and the External Investment Manager. In
connection with the Corporate Facility, MSCC has made customary representations and warranties and is required to
comply with various covenants, reporting requirements and other customary requirements for similar credit facilities.
As of December 31, 2024, the interest rate for borrowings on the Corporate Facility was 6.5%. The average
interest rate for borrowings under the Corporate Facility was 7.1% and 7.0% for the years ended December 31, 2024 and
2023, respectively. As of December 31, 2024, Main Street was in compliance with all financial covenants of the Corporate
Facility.
SPV Facility
Main Street, through MSCC Funding I, LLC (“MSCC Funding”), a wholly-owned Structured Subsidiary that
primarily holds debt investments, maintains the SPV Facility to finance its investment and operational activities. In
September 2024, Main Street entered into an amendment to the SPV Facility to, among other things: (i) increase the total
commitments from $430.0 million to $600.0 million, (ii) increase the accordion feature providing MSCC Funding with the
right to request increases in commitments under the facility, subject to the satisfaction of various conditions, from new and
existing lenders on the same terms and conditions as the existing commitments to up to a total of $800.0 million, (iii)
extend the revolving period from November 2025 to September 2027, (iv) extend the final maturity date from November
2027 to September 2029 and (v) decrease the interest rate to one-month term SOFR plus an applicable margin of (a) 2.35%
during the revolving period (from 2.50% plus a 0.10% credit spread adjustment, or 2.60% in total), (b) 2.475% for the first
year following the end of the revolving period (from 2.625%) and (c) 2.60% for the second year following the end of the
revolving period (from 2.75%).
As of December 31, 2024, the SPV Facility included total commitments of $600.0 million from a diversified
group of six lenders. Advances under the SPV Facility bear interest at a per annum rate equal to the one-month term SOFR
in effect, plus an applicable margin of 2.35% during the revolving period and 2.475% and 2.60% during the first and
second years thereafter, respectively. MSCC Funding pays a commitment fee of 0.50% per annum on the unused lender
commitments up to 35% of the total lender commitments and 0.75% per annum on the unused lender commitments greater
than 35% of the total lender commitments. The SPV Facility is secured by a collateral loan on the assets of MSCC Funding
and its subsidiaries. In connection with the SPV Facility, MSCC Funding has made customary representations and
warranties and is required to comply with various covenants, reporting requirements and other customary requirements for
similar credit facilities.
As of December 31, 2024, the interest rate for borrowings on the SPV Facility was 6.9%. The average interest rate
for borrowings under the SPV Facility was 7.7% and 7.6% for the years ended December 31, 2024 and 2023, respectively.
As of December 31, 2024, MSCC Funding was in compliance with all financial covenants of the SPV Facility.
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
167
MSCC Funding’s balance sheets as of December 31, 2024 and 2023 are as follows:
Balance Sheets
(dollars in thousands)
December 31,
2024
December 31,
2023
ASSETS
Investments at fair value:
Non-Control Investments (cost: $351,053 and $315,373 as of December 31, 2024 and
2023, respectively)
$
350,892 $
317,392
Cash and cash equivalents
11,212
12,817
Interest and dividend receivable and other assets
4,124
2,956
Deferred financing costs (net of accumulated amortization of $1,859 and $783 as of
December 31, 2024 and 2023, respectively)
6,512
3,829
Total assets
$
372,740 $
336,994
LIABILITIES
SPV Facility
$
176,000 $
160,000
Accounts payable and other liabilities to affiliates
65
7,170
Interest payable
1,229
1,135
Total liabilities
177,294
168,305
NET ASSETS
Contributed capital
138,088
138,163
Total undistributed earnings
57,358
30,526
Total net assets
195,446
168,689
Total liabilities and net assets
$
372,740 $
336,994
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
168
MSCC Funding’s statements of operations for the years ended December 31, 2024 and 2023 and the period from
November 22, 2022 to December 31, 2022 are as follows:
Statements of Operations
(dollars in thousands)
Year Ended
December 31,
Period from
November 22,
2022 to
December 31,
2024
2023
2022
INVESTMENT INCOME:
Interest, fee and dividend income:
Non-Control/Non-Affiliate investments
$
43,477 $
40,152 $
3,454
Total investment income
43,477
40,152
3,454
EXPENSES:
Interest
(12,734)
(14,491)
(1,414)
Management Fee to MSCC
(1,648)
(1,603)
(89)
General and administrative
(121)
(130)
(25)
Total expenses
(14,503)
(16,224)
(1,528)
NET INVESTMENT INCOME
28,974
23,928
1,926
NET UNREALIZED APPRECIATION (DEPRECIATION):
Non-Control/Non-Affiliate investments
(2,181)
264
4,408
Total net unrealized appreciation (depreciation)
(2,181)
264
4,408
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS
$
26,793 $
24,192 $
6,334
July 2026 Notes
In January 2021, Main Street issued $300.0 million in aggregate principal amount of 3.00% unsecured notes due
July 14, 2026 (the “July 2026 Notes”) at an issue price of 99.004%. Subsequently, in October 2021, Main Street issued an
additional $200.0 million in aggregate principal amount of the July 2026 Notes at an issue price of 101.741%. The July
2026 Notes issued in October 2021 have identical terms as, and are a part of a single series with, the July 2026 Notes
issued in January 2021. The July 2026 Notes are unsecured obligations and rank pari passu with Main Street’s current and
future unsecured indebtedness. The July 2026 Notes may be redeemed in whole or in part at any time at Main Street’s
option subject to certain make-whole provisions. The July 2026 Notes bear interest at a rate of 3.00% per year payable
semiannually on January 14 and July 14 of each year.
As of December 31, 2024, Main Street was in compliance with all covenants and other requirements of the July
2026 Notes.
June 2027 Notes
In June 2024, Main Street issued $300.0 million in aggregate principal amount of 6.50% unsecured notes due
June 4, 2027 (the “June 2027 Notes”) at an issue price of 99.793%. Subsequently, in September 2024, Main Street issued
an additional $100.0 million in aggregate principal amount of the June 2027 Notes at a public offering price of 102.134%
resulting in a yield-to-maturity of 5.617% on such issuance. The $400.0 million of outstanding June 2027 Notes bear
interest at 6.50% per year with a yield-to-maturity of 6.34%. The June 2027 Notes issued in September 2024 have identical
terms as, and are a part of a single series with, the June 2027 Notes issued in June 2024. The June 2027 Notes are
unsecured obligations and rank pari passu with Main Street’s current and future unsecured indebtedness. The June 2027
Notes may be redeemed in whole or in part at any time at Main Street’s option subject to certain make-whole provisions.
The June 2027 Notes bear interest at a rate of 6.50% per year payable semiannually on June 4 and December 4 of each
year.
As of December 31, 2024, Main Street was in compliance with all covenants and other requirements of the June
2027 Notes.
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
169
March 2029 Notes
In January 2024, Main Street issued $350.0 million in aggregate principal amount of 6.95% unsecured notes due
March 1, 2029 (the “March 2029 Notes”) at an issue price of 99.865%. The March 2029 Notes are unsecured obligations
and rank pari passu with Main Street’s current and future unsecured indebtedness. The March 2029 Notes may be
redeemed in whole or in part at any time at Main Street’s option subject to certain make-whole provisions. The March 2029
Notes bear interest at a rate of 6.95% per year payable semiannually on March 1 and September 1 of each year.
As of December 31, 2024, Main Street was in compliance with all covenants and other requirements of the March
2029 Notes.
SBIC Debentures
Under existing SBIC regulations, SBA-approved SBICs under common control have the ability to issue
debentures guaranteed by the SBA up to a regulatory maximum amount of $350.0 million. In March 2024, Main Street
repaid $63.8 million of SBIC debentures that had reached maturity, which reduced the total outstanding SBIC debentures
to $286.2 million. Subsequently, in September 2024, Main Street borrowed an additional $63.8 million of SBIC
debentures, which increased the total outstanding SBIC debentures to $350.0 million. Main Street’s SBIC debentures
payable, under existing SBA-approved commitments, were $350.0 million as of both December 31, 2024 and 2023. SBIC
debentures provide for interest to be paid semiannually, with principal due at the applicable 10-year maturity date of each
debenture. Main Street expects to maintain SBIC debentures under the SBIC program in the future, subject to periodic
repayments and borrowings, in an amount up to the regulatory maximum amount for affiliated SBIC funds. The weighted-
average annual interest rate on the SBIC debentures was 3.3% and 3.0% as of December 31, 2024 and 2023, respectively.
The first principal maturity due under the existing SBIC debentures is in 2027, and the weighted-average remaining
duration as of December 31, 2024 was 5.6 years. In accordance with SBIC regulations, the Funds are precluded from
incurring additional non-SBIC debt without the prior approval of the SBA.
As of December 31, 2024, the SBIC debentures consisted of (i) $175.0 million par value of SBIC debentures
outstanding issued by MSMF, with a recorded value of $170.3 million that was net of unamortized debt issuance costs of
$4.7 million, and (ii) $175.0 million par value of SBIC debentures issued by MSC III with a recorded value of $173.1
million that was net of unamortized debt issuance costs of $1.9 million.
The maturity dates and fixed interest rates for Main Street’s SBIC debentures as of December 31, 2024 and 2023
are summarized as follows:
Maturity Date
Fixed Interest Rate
Principal Balance
December 31,
2024
December 31,
2023
3/1/2024
3.95%
$
— $ 39,000,000
3/1/2024
3.55%
—
24,800,000
3/1/2027
3.52%
40,400,000
40,400,000
9/1/2027
3.19%
34,600,000
34,600,000
3/1/2028
3.41%
43,000,000
43,000,000
9/1/2028
3.55%
32,000,000
32,000,000
3/1/2030
2.35%
15,000,000
15,000,000
9/1/2030
1.13%
10,000,000
10,000,000
9/1/2030
1.31%
10,000,000
10,000,000
3/1/2031
1.94%
25,200,000
25,200,000
9/1/2031
1.58%
60,000,000
60,000,000
9/1/2033
5.74%
16,000,000
16,000,000
3/1/2035
5.34%
63,800,000
—
Ending Balance
$ 350,000,000 $ 350,000,000
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
170
December 2025 Notes
In December 2022, Main Street issued $100.0 million in aggregate principal amount of 7.84% Series A unsecured
notes due December 23, 2025 (the “December 2025 Series A Notes”) at par. In February 2023, Main Street issued an
additional $50.0 million in aggregate principal amount of 7.53% Series B unsecured notes due December 23, 2025 (the
“December 2025 Series B Notes” and, together with the December 2025 Series A Notes, the “December 2025 Notes”) at
par. The December 2025 Notes are unsecured obligations and rank pari passu with Main Street’s current and future
unsecured indebtedness. The December 2025 Notes may be redeemed in whole or in part at any time at Main Street’s
option at par plus accrued interest to the prepayment date, subject to certain make-whole provisions. The December 2025
Series A Notes and the December 2025 Series B Notes bear interest at a rate of 7.84% and 7.53% per year, respectively,
payable semiannually on June 23 and December 23 of each year. In addition, Main Street is obligated to offer to repay the
December 2025 Notes at par plus accrued and unpaid interest if certain change in control events occur. The December 2025
Notes will bear interest at an increased rate from the date that (i) the December 2025 Notes receive a below investment
grade rating by a rating agency if there is one or two rating agencies providing ratings of the December 2025 Notes, or two-
thirds of the rating agencies if there are three rating agencies who are rating the notes (a “Below Investment Grade Event”),
or (ii) the ratio of the Company’s consolidated secured indebtedness (other than indebtedness of the Funds or any
Structured Subsidiaries) to the value of its consolidated total assets is greater than 0.35 to 1.00 (a “Secured Debt Ratio
Event”), to and until the date on which the Below Investment Grade Event and the Secured Debt Ratio Event are no longer
continuing. The governing agreement for the December 2025 Notes contains customary terms and conditions for senior
unsecured notes issued in a private placement, as well as customary events of default with customary cure and notice
periods.
As of December 31, 2024, Main Street was in compliance with all covenants and other requirements of the
December 2025 Notes.
May 2024 Notes
In May 2024, Main Street repaid the $450.0 million principal amount of the issued and outstanding 5.20%
unsecured notes (the “May 2024 Notes”) at maturity at par value plus the accrued and unpaid interest. The outstanding
aggregate principal amount of the May 2024 Notes was $450.0 million as of December 31, 2023.
December 2022 Notes
In December 2022, Main Street repaid the $185.0 million principal amount of the issued and outstanding 4.50%
unsecured notes (the “December 2022 Notes”) at maturity at par value plus the accrued and unpaid interest.
Contractual Payment Obligations
A summary of Main Street’s contractual payment obligations for the repayment of outstanding indebtedness as of
December 31, 2024 is as follows:
2025
2026
2027
2028
2029
Thereafter
Total
(dollars in thousands)
Corporate Facility
$
— $
— $
14,100 $
— $ 193,900 $
— $
208,000
SPV Facility
—
—
—
—
176,000
—
176,000
July 2026 Notes
—
500,000
—
—
—
—
500,000
June 2027 Notes
—
—
400,000
—
—
—
400,000
March 2029 Notes
—
—
—
—
350,000
—
350,000
SBIC debentures
—
—
75,000
75,000
—
200,000
350,000
December 2025 Notes
150,000
—
—
—
—
—
150,000
Total
$ 150,000 $ 500,000 $ 489,100 $
75,000 $ 719,900 $
200,000 $ 2,134,000
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
171
Senior Securities
Information about Main Street’s senior securities is shown in the following table as of December 31 for the years
indicated in the table, unless otherwise noted.
SBIC Debentures
2015
$
225,000 $
2,368
—
N/A
2016
240,000
2,415
—
N/A
2017
295,800
2,687
—
N/A
2018
345,800
2,455
—
N/A
2019
311,800
2,363
—
N/A
2020
309,800
2,244
—
N/A
2021
350,000
1,985
—
N/A
2022
350,000
2,044
—
N/A
2023
350,000
2,364
—
N/A
2024
350,000
2,306
—
N/A
Corporate Facility
2015
$
291,000 $
2,368
—
N/A
2016
343,000
2,415
—
N/A
2017
64,000
2,687
—
N/A
2018
301,000
2,455
—
N/A
2019
300,000
2,363
—
N/A
2020
269,000
2,244
—
N/A
2021
320,000
1,985
—
N/A
2022
407,000
2,044
—
N/A
2023
200,000
2,364
—
N/A
2024
208,000
2,306
—
N/A
SPV Facility
2022
$
200,000 $
2,044
—
N/A
2023
160,000
2,364
—
N/A
2024
176,000
2,306
—
N/A
April 2023 Notes
2015
$
90,738 $
2,368
— $
25.40
2016
90,655
2,415
—
25.76
2017
90,655
2,687
—
25.93
December 2019 Notes
2015
$
175,000 $
2,368
—
N/A
2016
175,000
2,415
—
N/A
2017
175,000
2,687
—
N/A
2018
175,000
2,455
—
N/A
December 2022 Notes
2017
$
185,000 $
2,687
—
N/A
Total Amount
Outstanding
Exclusive of
Treasury
Securities (1)
Asset Coverage
per Unit (2)
Involuntary
Liquidating
Preference per
Unit (3)
Average Market
Value per Unit
(4)
(dollars in
thousands)
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
172
2018
185,000
2,455
—
N/A
2019
185,000
2,363
—
N/A
2020
185,000
2,244
—
N/A
2021
185,000
1,985
—
N/A
May 2024 Notes
2019
$
325,000 $
2,363
—
N/A
2020
450,000
2,244
—
N/A
2021
450,000
1,985
—
N/A
2022
450,000
2,044
—
N/A
2023
450,000
2,364
—
N/A
July 2026 Notes
2021
$
500,000 $
1,985
—
N/A
2022
500,000
2,044
—
N/A
2023
500,000
2,364
—
N/A
2024
500,000
2,306
—
N/A
December 2025 Notes
2022
$
100,000 $
2,044
—
N/A
2023
150,000
2,364
—
N/A
2024
150,000
2,306
—
N/A
March 2029 Notes
2024
$
350,000 $
2,306
—
N/A
June 2027 Notes
2024
$
400,000 $
2,306
—
N/A
Total Amount
Outstanding
Exclusive of
Treasury
Securities (1)
Asset Coverage
per Unit (2)
Involuntary
Liquidating
Preference per
Unit (3)
Average Market
Value per Unit
(4)
(dollars in
thousands)
___________________________
(1) Total amount of each class of senior securities outstanding at the end of the period presented.
(2) Asset coverage per unit is the ratio of the carrying value of Main Street’s total consolidated assets, less all liabilities
and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing
indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness.
(3) The amount to which such class of senior security would be entitled upon the involuntary liquidation of the issuer in
preference to any security junior to it. The “—” indicates information that the SEC expressly does not require to be
disclosed for certain types of senior securities.
(4) Average market value per unit for the April 2023 Notes represents the average of the daily closing prices as reported
on the NYSE during the period presented. Average market value per unit for all other senior securities included in the
table is not applicable because these are not registered for public trading.
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
173
NOTE F — FINANCIAL HIGHLIGHTS
The following is a schedule of financial highlights of Main Street for the years ended December 31, 2024, 2023,
2022, 2021, 2020, 2019, 2018, 2017, 2016 and 2015:
Year Ended December 31,
Per Share Data:
2024
2023
2022
2021
2020
NAV as of the beginning of the period
$
29.20
$
26.86
$
25.29
$
22.35
$
23.91
Net investment income (1)
4.09
4.14
3.29
2.65
2.10
Net realized gain (loss) (1)(2)
0.53
(1.47)
(0.07)
0.66
(1.77)
Net unrealized appreciation (depreciation) (1)(2)
1.59
2.84
0.33
1.97
(0.09)
Income tax benefit (provision) (1)(2)
(0.36)
(0.28)
(0.31)
(0.48)
0.21
Net increase in net assets resulting from operations (1)
5.85
5.23
3.24
4.80
0.45
Dividends paid from net investment income
(4.11)
(3.70)
(2.95)
(2.58)
(2.46)
Dividends paid
(4.11)
(3.70)
(2.95)
(2.58)
(2.46)
Impact of the net change in monthly dividends declared prior to the end of
the period and paid in the subsequent period
(0.01)
(0.01)
(0.01)
(0.01)
—
Accretive effect of stock offerings (issuing shares above NAV per share)
0.51
0.67
1.17
0.58
0.41
Accretive effect of DRIP issuance (issuing shares above NAV per share)
0.15
0.10
0.09
0.09
0.08
Other (3)
0.06
0.05
0.03
0.06
(0.04)
NAV as of the end of the period
$
31.65
$
29.20
$
26.86
$
25.29
$
22.35
Market value as of the end of the period
$
58.58
$
43.23
$
36.95
$
44.86
$
32.26
Shares outstanding as of the end of the period
88,400,391
84,833,002
78,506,816
70,737,021
67,762,032
Year Ended December 31,
Per Share Data:
2019
2018
2017
2016
2015
NAV as of the beginning of the period
$
24.09
$
23.53
$
22.10
$
21.24
$
20.85
Net investment income (1)
2.50
2.60
2.39
2.23
2.18
Net realized gain (loss) (1)(2)
(0.33)
(0.03)
0.19
0.56
(0.43)
Net unrealized appreciation (depreciation) (1)(2)
(0.09)
0.32
0.86
(0.14)
0.20
Income tax benefit (provision) (1)(2)
(0.02)
(0.09)
(0.43)
0.02
0.18
Net increase in net assets resulting from operations (1)
2.06
2.80
3.01
2.67
2.13
Dividends paid from net investment income
(2.91)
(2.69)
(2.47)
(1.99)
(2.49)
Distributions from capital gains
—
(0.16)
(0.32)
(0.74)
(0.16)
Dividends paid
(2.91)
(2.85)
(2.79)
(2.73)
(2.65)
Impact of the net change in monthly dividends declared prior to the end of
the period and paid in the subsequent period
(0.01)
(0.01)
(0.01)
(0.01)
(0.01)
Accretive effect of stock offerings (issuing shares above NAV per share)
0.55
0.47
1.07
0.76
0.74
Accretive effect of DRIP issuance (issuing shares above NAV per share)
0.12
0.09
0.06
0.08
0.12
Other (3)
0.01
0.06
0.09
0.09
0.06
NAV as of the end of the period
$
23.91
$
24.09
$
23.53
$
22.10
$
21.24
Market value as of the end of the period
$
43.11
$
33.81
$
39.73
$
36.77
$
29.08
Shares outstanding as of the end of the period
64,252,937
61,264,861
58,660,680
54,354,857
50,413,744
___________________________
(1) Based on weighted-average number of common shares outstanding for the period.
(2) Net realized gains or losses, net unrealized appreciation or depreciation, and income tax provision or benefit can
fluctuate significantly from period to period.
(3) Includes the impact of the different share amounts as a result of calculating certain per share data based on the
weighted-average basic shares outstanding during the period and certain per share data based on the shares outstanding
as of a period end or transaction date.
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
174
Year Ended December 31,
2024
2023
2022
2021
2020
(dollars in thousands)
NAV as of the end of the period
$ 2,797,838
$ 2,477,399
$ 2,108,586
$ 1,788,846
$ 1,514,767
Average NAV
$ 2,612,483
$ 2,276,932
$ 1,923,134
$ 1,626,585
$ 1,436,291
Average outstanding debt
$ 2,128,092
$ 1,951,923
$ 1,882,462
$ 1,417,831
$ 1,152,108
Ratio of total expenses, including income tax expense, to average
NAV (1)
8.29 %
8.08 %
8.05 %
8.56 %
4.95 %
Ratio of operating expenses to average NAV (2)
7.12 %
7.09 %
6.84 %
6.54 %
5.89 %
Ratio of operating expenses, excluding interest expense, to average
NAV (2)
2.39 %
2.58 %
2.77 %
2.92 %
2.44 %
Ratio of net investment income to average NAV
13.59 %
14.89 %
12.76 %
11.23 %
9.60 %
Portfolio turnover ratio
22.33 %
19.24 %
16.79 %
29.81 %
18.00 %
Total investment return (3)
47.24 %
28.23 %
(11.18) %
48.24 %
(19.11) %
Total return based on change in NAV (4)
20.51 %
20.32 %
13.51 %
21.84 %
1.91 %
Year Ended December 31,
2019
2018
2017
2016
2015
(dollars in thousands)
NAV as of the end of the period
$ 1,536,390
$ 1,476,049
$ 1,380,368
$ 1,201,481
$ 1,070,894
Average NAV
$ 1,517,615
$ 1,441,163
$ 1,287,639
$ 1,118,567
$ 1,053,313
Average outstanding debt
$ 1,055,800
$
947,694
$
843,993
$
801,048
$
759,396
Ratio of total expenses, including income tax expense, to average
NAV (1)
5.75 %
5.75 %
7.37 %
5.48 %
4.63 %
Ratio of operating expenses to average NAV (2)
5.67 %
5.32 %
5.47 %
5.59 %
5.45 %
Ratio of operating expenses, excluding interest expense, to average
NAV (2)
2.36 %
2.30 %
2.63 %
2.58 %
2.41 %
Ratio of net investment income to average NAV
10.37 %
10.87 %
10.51 %
10.35 %
10.15 %
Portfolio turnover ratio
18.86 %
29.13 %
38.18 %
24.63 %
25.37 %
Total investment return (3)
36.86 %
(8.25) %
16.02 %
37.36 %
8.49 %
Total return based on change in NAV (4)
8.78 %
12.19 %
14.20 %
12.97 %
11.11 %
___________________________
(1) Total expenses are the sum of operating expenses and net income tax provision or benefit. Net income tax provision or
benefit includes the accrual of net deferred tax provision or benefit relating to the net unrealized appreciation or
depreciation on portfolio investments held in Taxable Subsidiaries and due to the change in the loss carryforwards,
which are non-cash in nature and may vary significantly from period to period. Main Street is required to include net
deferred tax provision or benefit in calculating its total expenses even though these net deferred taxes are not currently
payable or receivable.
(2) Unless otherwise noted, operating expenses include interest, compensation, general and administrative and share-based
compensation expenses, net of expenses allocated to the External Investment Manager of $23.1 million, $22.1 million,
$13.0 million, $10.3 million, $7.4 million, $6.7 million, $6.8 million, $6.4 million, $5.1 million and $4.3 million for
the years ended December 31, 2024, 2023, 2022, 2021, 2020, 2019, 2018, 2017, 2016 and 2015, respectively.
(3) Total investment return is based on the purchase of stock at the current market price on the first day and a sale at the
current market price on the last day of each period reported on the table and assumes reinvestment of dividends at
prices obtained by Main Street’s dividend reinvestment plan during the period. The return does not reflect any sales
load that may be paid by an investor.
(4) Total return based on change in NAV was calculated using the sum of ending NAV plus dividends to stockholders and
other non-operating changes during the period, divided by the beginning NAV. Non-operating changes include any
items that affect NAV other than the net increase in net assets resulting from operations, such as the effects of stock
offerings, shares issued under the DRIP and equity incentive plans and other miscellaneous items.
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
175
NOTE G — DIVIDENDS, DISTRIBUTIONS AND TAXABLE INCOME
Main Street currently pays regular monthly dividends to its stockholders and periodically pays supplemental
dividends to its stockholders. Future dividends, if any, will be determined by its Board of Directors on a quarterly basis.
During 2024, Main Street paid regular monthly dividends of $0.24 per share for each month of January through June and
regular monthly dividends of $0.245 per share for each month of July through December. The 2024 regular monthly
dividends, which total $252.3 million, or $2.91 per share, represent a 6.0% per share increase from the regular monthly
dividends paid totaling $224.3 million, or $2.745 per share, for the year ended December 31, 2023.
During 2024, Main Street also paid supplemental dividends of $0.30 per share in March, June, September and
December, totaling $104.5 million, or $1.20 per share. During 2023, Main Street paid supplemental dividends of $0.175
per share in March, $0.225 per share in June, $0.275 per share in September and $0.275 per share in December, totaling
$78.6 million, or $0.95 per share.
During 2024, the regular monthly dividends and supplemental dividends paid totaled $356.8 million, or $4.11 per
share, representing a 11.2% per share increase from the total dividends paid during the year ended December 31, 2023.
During the year ended December 31, 2023, the regular monthly dividends and supplemental dividends paid totaled $302.9
million, or $3.695 per share.
For tax purposes, the 2024 dividends were comprised of (i) ordinary income totaling $2.84 per share and (ii)
qualified dividend income totaling $1.27 per share. As of December 31, 2024, Main Street estimates that it has generated
undistributed taxable income of $142.6 million, or $1.61 per share, that will be carried forward toward distributions to be
paid in 2025.
MSCC has elected to be treated for U.S. federal income tax purposes as a RIC. MSCC’s taxable income includes
the taxable income generated by MSCC and certain of its subsidiaries, including the Funds and Structured Subsidiaries,
which are treated as disregarded entities for tax purposes. As a RIC, MSCC generally will not pay corporate-level U.S.
federal income taxes on any net ordinary taxable income or capital gains that MSCC distributes to its stockholders. MSCC
must generally distribute at least 90% of its “investment company taxable income” (which is generally its net ordinary
taxable income and realized net short-term capital gains in excess of realized net long-term capital losses) and 90% of its
tax-exempt income to maintain its RIC status (pass-through tax treatment for amounts distributed). As part of maintaining
RIC status, undistributed taxable income (subject to a 4% non-deductible U.S. federal excise tax) pertaining to a given
fiscal year may be distributed up to twelve months subsequent to the end of that fiscal year, provided such dividends are
declared on or prior to the later of (i) filing of the U.S. federal income tax return for the applicable fiscal year or (ii) the
fifteenth day of the ninth month following the close of the year in which such taxable income was generated.
The determination of the tax attributes for Main Street’s distributions is made annually, based upon its taxable
income for the full year and distributions paid for the full year. Therefore, a determination made on an interim basis may
not be representative of the actual tax attributes of distributions for a full year. Ordinary dividend distributions from a RIC
do not qualify for the 20% maximum tax rate (plus a 3.8% Medicare surtax, if applicable) on dividend income from
domestic corporations and qualified foreign corporations, except to the extent that the RIC received the income in the form
of qualifying dividends from domestic corporations and qualified foreign corporations. The tax attributes for distributions
will generally include both ordinary income and qualified dividends, but may also include either one or both of capital
gains and return of capital. The tax character of distributions paid for the years ended December 31, 2024, 2023 and 2022
was as follows:
Year Ended December 31,
2024
2023
2022
(dollars in thousands)
Ordinary income (1)
$
245,845 $
278,165 $
195,238
Qualified dividends
110,281
24,100
22,991
Distributions on tax basis
$
356,126 $
302,265 $
218,229
___________________________
(1) The years ended December 31, 2024, 2023 and 2022 include $4.2 million, $3.3 million and $2.3 million, respectively,
that was reported for tax purposes as compensation for services in accordance with Section 83 of the Code.
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
176
As of December 31, 2024, 2023 and 2022, the components of distributable earnings on a tax basis or
“Undistributed ordinary income,” differ from the amount of “Total undistributed earnings” reflected in the Consolidated
Balance Sheets by temporary book or tax differences as shown in the table below.
Year Ended December 31,
2024
2023
2022
(dollars in thousands)
Undistributed ordinary income
$
142,588 $
76,510 $
66,892
Unrealized appreciation (depreciation), net of tax
583,720
454,792
248,977
Cumulative book/ tax differences on realized gain/ loss, including
capital loss carryforward
(189,782)
(187,218)
(142,507)
Accumulated net impact of Taxable Subsidiaries (1)
(83,246)
(72,442)
(49,813)
Other temporary differences (2)
(50,818)
(65,640)
(46,278)
Components of Total undistributed earnings
$
402,462 $
206,002 $
77,271
___________________________
(1) Accumulated net impact of earnings, intercompany dividends and book tax differences of the Taxable Subsidiaries
(2) Book income and tax income differences, including equity and deferred compensation, debt origination, structuring
fees and changes in estimates
Listed below is a reconciliation of “Net increase in net assets resulting from operations” to taxable income and to
total distributions declared to common stockholders for the years ended December 31, 2024, 2023 and 2022.
Year Ended December 31,
2024
2023
2022
(estimated, dollars in thousands)
Net increase in net assets resulting from operations
$
508,080 $
428,447 $
241,606
Book-tax difference from share-based compensation expense
(317)
962
142
Net unrealized appreciation
(137,656)
(232,577)
(24,816)
Income tax provision
30,633
22,642
23,325
Pre-tax book (income) loss not consolidated for tax purposes
(105,122)
20,726
(37,630)
Book income and tax income differences, including debt origination,
structuring fees, dividends, realized gains and changes in estimates
127,304
72,389
17,043
Estimated taxable income (1)
422,922
312,589
219,670
Taxable income earned in prior year and carried forward for
distribution in current year
56,142
49,216
50,834
Taxable income earned prior to period end and carried forward for
distribution next period
(142,588)
(76,510)
(66,892)
Dividend payable as of period end and paid in the following period
22,100
20,368
17,676
Total distributions accrued or paid to common stockholders
$
358,576 $
305,663 $
221,288
___________________________
(1) MSCC’s taxable income for each period is an estimate and will not be finally determined until MSCC files its tax
return for each year. Therefore, the final taxable income, and the taxable income earned in each period and carried
forward for distribution in the following period, may be different than this estimate.
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
177
The Taxable Subsidiaries primarily hold certain equity investments for Main Street. The Taxable Subsidiaries
permit Main Street to hold equity investments in portfolio companies which are “pass-through” entities for tax purposes
and to continue to comply with the “source-of-income” requirements contained in the RIC tax provisions of the Code. The
Taxable Subsidiaries are consolidated with MSCC for U.S. GAAP financial reporting purposes, and the portfolio
investments held by the Taxable Subsidiaries are included in Main Street’s consolidated financial statements as portfolio
investments and recorded at fair value. The Taxable Subsidiaries are not consolidated with MSCC for income tax purposes
and may generate income tax expense, or benefit, and tax assets and liabilities, as a result of their ownership of certain
portfolio investments. The taxable income, or loss, of the Taxable Subsidiaries may differ from their book income, or loss,
due to temporary book and tax timing differences and permanent differences. The Taxable Subsidiaries are each taxed at
corporate income tax rates based on their taxable income. The income tax expense, or benefit, if any, and the related tax
assets and liabilities, of the Taxable Subsidiaries are reflected in Main Street’s consolidated financial statements.
The income tax provision for Main Street is generally composed of (i) deferred tax expense, which is primarily the
result of the net activity relating to the portfolio investments held in the Taxable Subsidiaries, including changes in loss
carryforwards, changes in net unrealized appreciation or depreciation and other temporary book tax differences, and (ii)
current tax expense, which is primarily the result of current U.S. federal income and state taxes and excise taxes on Main
Street’s estimated undistributed taxable income. The income tax expense, or benefit, and the related tax assets and
liabilities generated by the Taxable Subsidiaries, if any, are reflected in Main Street’s Consolidated Statements of
Operations. Main Street’s provision for income taxes was comprised of the following for the years ended December 31,
2024, 2023 and 2022:
Year Ended December 31,
2024
2023
2022
(dollars in thousands)
Current tax expense:
Federal
$
540
$
1,198
$
516
State
1,989
2,245
1,845
Excise
5,851
3,190
2,838
Total current tax expense
8,380
6,633
5,199
Deferred tax expense (benefit):
Federal
25,849
14,181
13,176
State
(3,596)
1,828
4,950
Total deferred tax expense
22,253
16,009
18,126
Total income tax provision
$
30,633
$
22,642
$
23,325
MSCC operates in a manner to maintain its RIC status and to eliminate corporate-level U.S. federal income tax
(other than the 4% excise tax) by distributing sufficient investment company taxable income and long-term capital gains.
As a result, MSCC will have an effective tax rate equal to 0% before the excise tax and income taxes incurred by the
Taxable Subsidiaries. As such, a reconciliation of the differences between Main Street’s reported income tax expense and
its tax expense at the federal statutory rate of 21% is not meaningful.
As of December 31, 2024, the cost of investments for U.S. federal income tax purposes was $4,231.6 million, with
such investments having an estimated net unrealized appreciation of $701.1 million, composed of gross unrealized
appreciation of $1,082.8 million and gross unrealized depreciation of $381.7 million.
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
178
The following table sets forth the significant components of net deferred tax assets and liabilities as of
December 31, 2024 and 2023:
Year Ended December 31,
2024
2023
(dollars in thousands)
Deferred tax assets:
Net operating loss carryforwards
$
6,336 $
39,079
Interest expense carryforwards
19,920
20,126
Other
261
4,190
Total deferred tax assets
26,517
63,395
Deferred tax liabilities:
Net unrealized appreciation of portfolio investments
(99,708)
(90,981)
Net basis differences in portfolio investments
(12,920)
(36,272)
Total deferred tax liabilities
(112,628)
(127,253)
Total deferred tax liabilities, net
$
(86,111) $
(63,858)
The net deferred tax liability as of December 31, 2024 and 2023 was $86.1 million and $63.9 million,
respectively, with the change primarily related to changes in net unrealized appreciation or depreciation, changes in loss
carryforwards, and other temporary book-tax differences relating to portfolio investments held by the Taxable Subsidiaries.
Management believes that the realization of the deferred tax assets is more likely than not based on expectations as to
future taxable income and scheduled reversals of temporary differences. Accordingly, Main Street did not record a
valuation allowance related to its deferred tax assets as of December 31, 2024 and 2023. As of December 31, 2024, for
U.S. federal income tax purposes, the Taxable Subsidiaries had a net operating loss carryforward from prior years which is
not subject to expiration and will carryforward indefinitely until utilized. Additionally, the Taxable Subsidiaries have
interest expense limitation carryforwards which have an indefinite carryforward period. In addition, as of December 31,
2024, for U.S. federal income tax purposes, MSCC had net capital loss carryforwards totaling $62.0 million available to
offset future capital gains at the RIC level in any taxable year, to the extent available and permitted by U.S. federal income
tax law, which are not subject to expiration as long as MSCC maintains its RIC status.
NOTE H — COMMON STOCK
Main Street maintains a program with certain selling agents through which it can sell up to 15,000,000 shares of
its common stock by means of at-the-market offerings from time to time (the “ATM Program”).
During the year ended December 31, 2024, Main Street sold 2,489,275 shares of its common stock at a weighted-
average price of $49.75 per share and raised $123.8 million of gross proceeds under the ATM Program. Net proceeds were
$122.2 million after commissions to the selling agents on shares sold and offering costs. As of December 31, 2024, sales
transactions representing 1,678 shares had not settled and thus were not issued and not included in shares issued and
outstanding on the Consolidated Balance Sheets but are included as outstanding on the Consolidated Statement of Changes
in Net Assets, in the weighted-average shares outstanding in the Consolidated Statements of Operations and in the shares
used to calculate the NAV per share. As of December 31, 2024, 2,823,949 shares remained available for sale under the
ATM Program.
During the year ended December 31, 2023, Main Street sold 5,149,460 shares of its common stock at a weighted-
average price of $39.94 per share and raised $205.7 million of gross proceeds under the ATM Program. Net proceeds were
$203.3 million after commissions to the selling agents on shares sold and offering costs.
During the year ended December 31, 2022, Main Street sold 5,407,382 shares of its common stock at a weighted-
average price of $39.29 per share and raised $212.4 million of gross proceeds under the ATM Program. Net proceeds were
$209.9 million after commissions to the selling agents on shares sold and offering costs.
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
179
During August 2022, Main Street completed a public equity offering of 1,345,500 shares of common stock at a
public offering price of $42.85 per share, including the underwriters’ full exercise of their option to purchase 175,500
additional shares, resulting in total net proceeds, including exercise of the underwriters’ option to purchase additional
shares and after deducting underwriting discounts and estimated offering expenses payable by Main Street, of
approximately $55.1 million.
NOTE I — DIVIDEND REINVESTMENT PLAN
The dividend reinvestment feature of Main Street’s dividend reinvestment and direct stock purchase plan (the
“DRIP”) provides for the reinvestment of dividends on behalf of its stockholders, unless a stockholder has elected to
receive dividends in cash. As a result, if Main Street declares a cash dividend, its stockholders who have not “opted out” of
the DRIP by the dividend record date will have their cash dividend automatically reinvested into additional shares of
MSCC common stock. The share requirements of the DRIP may be satisfied through the issuance of shares of common
stock or through open market purchases of common stock by the DRIP plan administrator. Newly issued shares will be
valued based upon the final closing price of MSCC’s common stock on the valuation date determined for each dividend by
Main Street’s Board of Directors. Shares purchased in the open market to satisfy the DRIP requirements will be valued
based upon the average price of the applicable shares purchased, before any associated brokerage or other costs. Main
Street’s DRIP is administered by its transfer agent on behalf of Main Street’s record holders and participating brokerage
firms. Brokerage firms and other financial intermediaries may decide not to participate in Main Street’s DRIP but may
provide a similar dividend reinvestment plan for their clients.
Summarized DRIP information for the years ended December 31, 2024, 2023 and 2022 is as follows:
Year Ended December 31,
2024
2023
2022
(dollars in thousands)
DRIP participation
$
35,701 $
30,719 $
24,131
Shares issued for DRIP
721,963
765,427
625,196
NOTE J — SHARE-BASED COMPENSATION
Main Street accounts for its share-based compensation plans using the fair value method, as prescribed by ASC
718, Compensation—Stock Compensation. Accordingly, for restricted stock awards (“RSAs”), Main Street measured the
grant date fair value based upon the market price of its common stock on the date of the grant and amortizes the fair value
of the awards as share-based compensation expense over the requisite service period, which is generally the vesting term.
Main Street’s Board of Directors approves the issuance of shares of restricted stock to Main Street employees
pursuant to the Main Street Capital Corporation 2022 Equity and Incentive Plan (the “Equity and Incentive Plan”). These
shares generally vest over a three-year or five-year period from the grant date. The fair value is expensed over the service
period, starting on the grant date. The following table summarizes the restricted stock issuances approved by Main Street’s
Board of Directors under the Equity and Incentive Plan, net of shares forfeited, if any, and the remaining shares of
restricted stock available for issuance as of December 31, 2024.
Restricted stock authorized under the plan
5,000,000
Less net restricted stock granted
(1,048,607)
Restricted stock available for issuance as of December 31, 2024
3,951,393
As of December 31, 2024, the following table summarizes the restricted stock issued to Main Street’s non-
employee directors and the remaining shares of restricted stock available for issuance pursuant to the Main Street Capital
Corporation 2022 Non-Employee Director Restricted Stock Plan. These shares are granted upon appointment or election to
the board and vest on the day immediately preceding the annual meeting of stockholders following the respective grant date
and are expensed over such service period.
Restricted stock authorized under the plan
300,000
Less net restricted stock granted
(11,065)
Restricted stock available for issuance as of December 31, 2024
288,935
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
180
For the years ended December 31, 2024, 2023 and 2022, Main Street recognized total share-based compensation
expense of $18.8 million, $16.5 million and $13.6 million, respectively, related to the restricted stock issued to Main Street
employees and non-employee directors.
Summarized RSA activity for the year ended December 31, 2024 is as follows:
Year Ended December 31, 2024
Number
Weighted-Average Grant-Date Fair Value
Restricted Stock Awards (RSAs):
of Shares
($ per share)
Non-vested, December 31, 2023
958,225
$
40.48
Granted (1)
522,098
46.98
Vested (1)(2)
(407,642)
40.62
Forfeited
(33,264)
42.81
Non-vested, December 31, 2024
1,039,417
$
43.62
Aggregate intrinsic value as of December 31, 2024 (in thousands)
$ 60,889 (3)
___________________________
(1) Restricted units generally vest over a three-year or five-year period from the grant date (as noted above).
(2) Vested shares included 155,049 shares withheld for payroll taxes paid on behalf of employees.
(3) Aggregate intrinsic value is the product of total non-vested restricted shares as of December 31, 2024 and $58.58 per
share, the closing price of our common stock on December 31, 2024.
The total fair value of RSAs that vested during the years ended December 31, 2024, 2023 and 2022, was $16.6
million, $15.6 million and $10.5 million, respectively.
As of December 31, 2024, there was $30.6 million of total unrecognized compensation expense related to Main
Street’s non-vested restricted shares. This compensation expense is expected to be recognized over a remaining weighted-
average period of 2.4 years as of December 31, 2024.
NOTE K — COMMITMENTS AND CONTINGENCIES
As of December 31, 2024, Main Street had the following outstanding commitments (in thousands):
Investments with equity capital commitments that have not yet funded:
Amount
Brightwood Capital Fund Investments
Brightwood Capital Fund V, LP
$
1,500
Brightwood Capital Fund III, LP
65
1,565
EnCap Equity - Fund XII, LP
7,318
Harris Preston Fund Investments
HPEP 4, L.P.
6,618
HPEP 3, L.P.
1,308
7,926
MS Private Loan Fund I, LP
750
MS Private Loan Fund II, LP
4,966
UnionRock Energy Fund Investments
UnionRock Energy Fund III, LP
5,150
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
181
UnionRock Energy Fund II, LP
2,136
7,286
Total Equity Commitments (1)(2)
$
29,811
Investments with commitments to fund revolving loans that have not been fully drawn or term loans with
additional commitments not yet funded:
ZRG Partners, LLC
$
29,202
TEC Services, LLC
21,167
Creative Foam Corporation
15,375
GradeEight Corp. (Winzer)
13,647
HEADLANDS OP-CO LLC
12,150
MS Private Loan Fund II, LP
10,000
MS Private Loan Fund I, LP
8,400
Ansira Partners II, LLC
8,341
Computer Data Source, LLC
7,500
JDC Power Services, LLC
7,263
South Coast Terminals Holdings, LLC
7,160
CQ Fluency, LLC
6,750
Insight Borrower Corporation (Industrial Physics)
6,688
Veregy Consolidated, Inc.
5,875
SI East, LLC (Stavig)
5,250
Gulf Manufacturing, LLC
5,000
BP Loenbro Holdings Inc.
4,795
California Splendor Holdings LLC
4,472
Sales Performance International, LLC
4,289
Cody Pools, Inc.
4,214
Bettercloud, Inc.
4,189
NexRev LLC
4,000
AVEX Aviation Holdings, LLC
3,684
Mako Steel, LP
3,651
Microbe Formulas, LLC
3,601
CenterPeak Holdings, LLC (Johnson Downie)
3,600
Titan Meter Midco Corp.
3,598
VVS Holdco LLC
3,200
SPAU Holdings, LLC
3,194
Power System Solutions
3,085
Gamber-Johnson Holdings, LLC
2,952
MetalForming AcquireCo, LLC
2,795
PTL US Bidco, Inc
2,703
ArborWorks, LLC
2,688
Mills Fleet Farm Group, LLC
2,652
IG Parent Corporation (Infogain)
2,500
Nebraska Vet AcquireCo, LLC (NVS)
2,500
Hornblower Sub, LLC
2,440
IG Investor, LLC (Ira Green)
2,400
Centre Technologies Holdings, LLC
2,400
Burning Glass Intermediate Holding Company, Inc.
2,397
Cybermedia Technologies, LLC
2,000
Coregistics Buyer LLC (Belvika)
1,908
Elgin AcquireCo, LLC
1,877
Bluestem Brands, Inc.
1,849
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
182
Career Team Holdings, LLC
1,800
NinjaTrader, LLC
1,750
Batjer TopCo, LLC
1,620
Colonial Electric Company LLC
1,600
Pinnacle TopCo, LLC
1,600
Chamberlin Holding LLC
1,600
Trantech Radiator Topco, LLC
1,600
The Affiliati Network, LLC
1,600
ATS Operating, LLC
1,440
Imaging Business Machines, L.L.C.
1,384
American Health Staffing Group, Inc.
1,333
Escalent, Inc.
1,326
Clad-Rex Steel, LLC
1,200
Mini Melts of America, LLC
1,149
Channel Partners Intermediateco, LLC
1,139
Winter Services LLC
1,133
Bond Brand Loyalty ULC
856
ASK (Analytical Systems Keco Holdings, LLC)
800
Mystic Logistics Holdings, LLC
800
Orttech Holdings, LLC
800
Barfly Ventures, LLC
760
Garyline, LLC
706
Jackmont Hospitality, Inc.
606
Eastern Wholesale Fence LLC
520
Jensen Jewelers of Idaho, LLC
500
RA Outdoors (Aspira) LLC
464
Island Pump and Tank, LLC
456
GS HVAM Intermediate, LLC
409
Gulf Publishing Holdings, LLC
400
Wall Street Prep, Inc.
400
GULF PACIFIC ACQUISITION, LLC
303
Roof Opco (Apple Roof), LLC
233
GRT Rubber Technologies LLC
204
ATS Workholding, LLC
150
Obra Capital, Inc.
148
AAC Holdings, Inc.
117
Inspire Aesthetics Management, LLC
50
Invincible Boat Company, LLC.
42
Total Loan Commitments
$
292,399
Total Commitments
$
322,210
____________________
(1) This table excludes commitments related to six additional Other Portfolio investments for which the investment period
has expired and remaining commitments may only be drawn to pay fund expenses. The Company does not expect any
material future capital to be called on its commitment to these investments and as a result has excluded those
commitments from this table.
(2) This table excludes commitments related to five additional Other Portfolio investments for which the investment
period has expired and remaining commitments may only be drawn to pay fund expenses or for follow on investments
in existing portfolio companies. The Company does not expect any material future capital to be called on its
commitment to these investments to pay fund expenses, and based on representations from the fund manager, the
Company does not expect any further capital will be called on its commitment for follow on investments. As a result,
the Company has excluded those commitments from this table.
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
183
Main Street will fund its unfunded commitments from the same sources it uses to fund its investment
commitments that are funded at the time they are made (which are typically through existing cash and cash equivalents and
borrowings under the Credit Facilities). Main Street follows a process to manage its liquidity and ensure that it has
available capital to fund its unfunded commitments as necessary. The Company had no unrealized appreciation or
depreciation on the outstanding unfunded commitments as of December 31, 2024.
Main Street may, from time to time, be involved in litigation arising out of its operations in the normal course of
business or otherwise. Furthermore, third parties may try to impose liability on Main Street in connection with the activities
of its portfolio companies. While the outcome of any current legal proceedings cannot at this time be predicted with
certainty, Main Street does not expect any current matters will materially affect its financial condition or results of
operations; however, there can be no assurance whether any pending legal proceedings will have a material adverse effect
on Main Street’s financial condition or results of operations in any future reporting period.
NOTE L — RELATED PARTY TRANSACTIONS
As discussed further in Note D — External Investment Manager, the External Investment Manager is treated as a
wholly-owned portfolio company of Main Street and is included as part of Main Street’s Investment Portfolio. As of
December 31, 2024, Main Street had a receivable of $10.2 million due from the External Investment Manager, which
included (i) $7.8 million related primarily to operating expenses incurred by Main Street as required to support the External
Investment Manager’s business and amounts due from the External Investment Manager to Main Street under a tax sharing
agreement (see further discussion in Note D — External Investment Manager) and (ii) $2.4 million of dividends declared
but not paid by the External Investment Manager. MSCC has entered into an agreement with the External Investment
Manager to share employees in connection with its asset management business generally, and specifically for the External
Investment Manager’s relationship with MSC Income and its other clients (see further discussion in Note A.1. —
Organization and Basis of Presentation — Organization and Note D — External Investment Manager).
From time to time, Main Street may make investments in clients of the External Investment Manager in the form
of debt or equity capital on terms approved by Main Street’s Board of Directors, including each director who is not an
“interested person,” as such term is defined in Section 2(a)(19) of the 1940 Act.
The following table summarizes Main Street’s purchases of MSC Income’s common stock.
Trade Date (1)
Shares
Purchased (2)
Price per
Share (2)
Total Cost
May 2, 2022
47,349
$
15.84 $
750,000
May 1, 2023
127,877
15.64
2,000,000
August 1, 2023
174,271
15.78
2,750,000
September 25, 2023 (3)
57,692
13.00
750,000
October 31, 2023
237,944
15.76
3,750,000
January 31, 2024
157,035
15.92
2,500,000
May 1, 2024
157,629
15.86
2,500,000
August 1, 2024
125,314
15.96
2,000,000
Total Shares Owned by Main Street
1,085,111
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
184
____________________
(1) Unless otherwise noted below, Main Street purchased shares at the price shares were purchased by MSC Income
stockholders pursuant to MSC Income’s dividend reinvestment plan for its dividend on such date.
(2) MSC Income completed a two-for-one reverse stock split, effective as of December 16, 2024; as such, shares
purchased and price per share have been adjusted to reflect the Reverse Stock Split on a retrospective basis.
(3) Main Street purchased shares through the modified “Dutch Auction” tender offer commenced by MSC Income and
Main Street in August 2023 to purchase, severally and not jointly, up to an aggregate of $3.5 million of shares from
stockholders of MSC Income, subject to the conditions described in the offer to purchase dated August 16, 2023.
Each of Main Street’s purchases of MSC Income common stock was unanimously approved by the Board of
Directors and MSC Income’s board of directors, including each director who is not an “interested person,” as such term is
defined in Section 2(a)(19) of the 1940 Act, of each board. As of December 31, 2024, Main Street had not sold any shares
of MSC Income’s common stock previously purchased and owned 1,085,111 shares of MSC Income’s common stock. In
addition, certain of Main Street’s officers and employees own shares of MSC Income and therefore have direct pecuniary
interests in MSC Income.
In December 2020, the External Investment Manager entered into an investment management agreement with the
Private Loan Fund to provide investment advisory and management services in exchange for an asset-based fee and certain
incentive fees. The Private Loan Fund is a private investment fund exempt from registration under the 1940 Act that co-
invests with Main Street in Main Street’s Private Loan investment strategy. In connection with the Private Loan Fund’s
initial closing in December 2020, Main Street committed to contribute up to $10.0 million as a limited partner and is
entitled to distributions on such interest. In February 2022, Main Street increased its total commitment to the Private Loan
Fund from $10.0 million to $15.0 million. In addition, certain of Main Street’s officers and employees (and certain of their
immediate family members) have made capital commitments to the Private Loan Fund as limited partners and therefore
have direct pecuniary interests in the Private Loan Fund. As of December 31, 2024, Main Street has funded $14.2 million
of its limited partner commitment and Main Street’s unfunded commitment was $0.8 million. Main Street’s limited partner
commitment to the Private Loan Fund was unanimously approved by the Board of Directors, including each director who is
not an “interested person,” as such term is defined in Section 2(a)(19) of the 1940 Act.
Additionally, Main Street provided the Private Loan Fund with a revolving line of credit pursuant to an Unsecured
Revolving Promissory Note, dated February 5, 2021 and was subsequently amended on November 30, 2021 and on
December 29, 2021 (as amended, the “PL Fund 2021 Note”), in an aggregate amount equal to the amount of limited partner
capital commitments to the Private Loan Fund up to $85.0 million. Borrowings under the PL Fund 2021 Note bore interest
at a fixed rate of 5.00% per annum and matured on February 28, 2022. The PL Fund 2021 Note was unanimously approved
by Main Street’s Board of Directors, including each director who is not an “interested person,” as such term is defined in
Section 2(a)(19) of the 1940 Act. In February 2022, the Private Loan Fund fully repaid all borrowings outstanding under
the PL Fund 2021 Note and the PL Fund 2021 Note was extinguished.
In March 2022, Main Street provided the Private Loan Fund with a revolving line of credit pursuant to a Secured
Revolving Promissory Note, dated March 17, 2022 (the “PL Fund 2022 Note”), which provides for borrowings up to $10.0
million. Borrowings under the PL Fund 2022 Note bear interest at a fixed rate of 5.00% per annum and mature on the date
upon which the Private Loan Fund’s investment period concludes, which is scheduled to occur in March 2026. Available
borrowings under the PL Fund 2022 Note are subject to a 0.25% non-use fee. The PL Fund 2022 Note was unanimously
approved by Main Street’s Board of Directors, including each director who is not an “interested person,” as such term is
defined in Section 2(a)(19) of the 1940 Act. As of December 31, 2024, there were $1.6 million of borrowings outstanding
under the PL Fund 2022 Note.
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
185
In September 2023, the External Investment Manager entered into an investment management agreement with the
Private Loan Fund II to provide investment advisory and management services in exchange for an asset-based fee and
certain incentive fees. The Private Loan Fund II is a private investment fund exempt from registration under the 1940 Act
that co-invests with Main Street in Main Street’s Private Loan investment strategy. In connection with the Private Loan
Fund II’s initial closing in September 2023, Main Street committed to contribute up to $15.0 million (limited to 20% of
total commitments) as a limited partner and is entitled to distributions on such interest. In addition, certain of Main Street’s
officers and employees (and certain of their immediate family members) have made capital commitments to the Private
Loan Fund II as limited partners and therefore have direct pecuniary interests in the Private Loan Fund II. As of
December 31, 2024, Main Street has funded $7.4 million of its limited partner commitment and Main Street’s unfunded
commitment was $5.0 million. Main Street’s limited partner commitment to the Private Loan Fund II was unanimously
approved by the Board of Directors, including each director who is not an “interested person,” as such term is defined in
Section 2(a)(19) of the 1940 Act.
In September 2023, Main Street provided the Private Loan Fund II with a revolving line of credit pursuant to a
Secured Revolving Promissory Note, dated September 5, 2023 (as amended, the “PL Fund II 2023 Note”), which provides
for borrowings up to $50.0 million. Borrowings under the PL Fund II 2023 Note bear interest at a rate of SOFR plus 3.50%
per annum, subject to a 2.00% SOFR floor, and mature on September 5, 2025. Available borrowings under the PL Fund II
2023 Note are subject to a 0.25% non-use fee. The borrowings are collateralized by all assets of the Private Loan Fund II.
The PL Fund II 2023 Note was unanimously approved by Main Street’s Board of Directors, including each director who is
not an “interested person,” as such term is defined in Section 2(a)(19) of the 1940 Act. In November 2024, the Private
Loan Fund II fully repaid all borrowings outstanding under the PL Fund II 2023 Note and the PL Fund II Note was
extinguished.
In November 2024, Main Street provided the Private Loan Fund II with a revolving line of credit pursuant to a
Secured Revolving Promissory Note, dated November 22, 2024 (the “PL Fund II 2024 Note”), which provides for
borrowings up to $10.0 million. Borrowings under the PL Fund II 2024 Note bear interest at a rate of SOFR plus 3.00% per
annum, subject to a 2.00% SOFR floor, and mature on the date upon which the Private Loan Fund II’s investment period
concludes, which is scheduled to occur in March 2029. Available borrowings under the PL Fund II 2024 Note are subject
to a 0.25% non-use fee. The PL Fund II 2024 Note was unanimously approved by Main Street’s Board of Directors,
including each director who is not an “interested person,” as such term is defined in Section 2(a)(19) of the 1940 Act. As of
December 31, 2024, there were no borrowings outstanding under the PL Fund II 2024 Note.
As described in Note B.9. — Summary of Significant Accounting Policies — Deferred Compensation Plan,
participants in the Deferred Compensation Plan elect one or more investment options, including phantom Main Street stock
units, interests in affiliated funds and various mutual funds, where their deferred amounts are notionally invested pending
distribution pursuant to participant elections and plan terms. As of December 31, 2024, $26.6 million of compensation,
plus net unrealized gains and losses and investment income, and minus previous distributions, was deferred under the
Deferred Compensation Plan. As of December 31, 2024, $11.0 million was deferred into phantom Main Street stock units,
representing 187,350 shares of Main Street’s common stock. In addition, as of December 31, 2024, the Company had $15.6
million of funded investments from deferred compensation in trust, including $2.1 million in the Private Loan Fund and
$4.2 million in the Private Loan Fund II.
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MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
186
NOTE M — SUBSEQUENT EVENTS
Our management has evaluated subsequent events through the date of issuance of the consolidated financial
statements, and identified the following to report:
In January 2025, MSC Income completed a follow-on public offering of 6,325,000 shares of its common stock
(including the exercise of the underwriters’ overallotment option) at the public offering price of $15.53 per share (the
“MSIF Public Offering”). In connection with the MSIF Public Offering, MSC Income’s shares of common stock began
trading on the New York Stock Exchange under the ticker symbol “MSIF.”
Main Street purchased 289,761 shares of MSC Income common stock in the MSIF Public Offering at the public
offering price of $15.53. Additionally, following the closing of the MSIF Public Offering, Main Street entered into a share
purchase plan to purchase up to $20.0 million in the aggregate of shares of MSC Income common stock in the open market
for a twelve-month period beginning in March 2025, at times when the market price per share of MSC Income common
stock is trading below the most recently reported NAV per share of MSC Income’s common stock by certain pre-
determined levels (including any updates, corrections or adjustments publicly announced by MSC Income to any
previously announced NAV per share). The purchases of shares of MSC Income common stock pursuant to the share
purchase plan are intended to satisfy the conditions of Rule 10b5-1 and Rule 10b-18 under the Exchange Act and will
otherwise be subject to applicable law, including Regulation M, which may prohibit purchases under certain circumstances.
MSC Income also entered into a share repurchase plan to purchase up to $65.0 million in the aggregate of its common
stock in the open market with terms and conditions substantially similar to Main Street’s share purchase plan for shares of
MSC Income common stock, and daily purchases under the two plans, if any, are expected to be split pro rata (or as close
thereto as reasonably possible) between Main Street and MSC Income based on the respective plan sizes. In connection
with Main Street’s potential acquisition in excess of 3% of MSC Income’s outstanding shares of common stock as a result
of any purchases pursuant to Main Street’s share purchase plan for shares of MSC Income common stock or otherwise,
Main Street entered into a Fund of Funds Investment Agreement with MSC Income. The Fund of Funds Investment
Agreement provides for the acquisition by Main Street of MSC Income’s shares of common stock, and MSC Income’s sale
of such shares to Main Street, in a manner consistent with the requirements of Rule 12d1-4 under the 1940 Act.
Additionally, in connection with the listing, the External Investment Manager and MSC Income entered into an
Amended and Restated Investment Advisory and Administrative Services Agreement to, among other things, (i) reduce the
annual base management fees payable by MSC Income to 1.5% of its average total assets (including cash and cash
equivalents), payable in arrears (with additional future contractual reductions based upon changes to MSC Income’s
investment portfolio composition), (ii) reduce to 17.5% the subordinated incentive fee on pre-incentive fee net investment
income above a specified investment return hurdle rate payable by MSC Income, subject to a 50% / 50% catch-up feature,
(iii) reduce to 17.5% and reset the incentive fee on cumulative net realized capital gains payable by MSC Income and (iv)
establish a cap on the amount of expenses payable by MSC Income relating to certain internal administrative services,
which varies based on the value of MSC Income’s total assets.
In February 2025, Main Street declared a supplemental dividend of $0.30 per share payable in March 2025. This
supplemental dividend is in addition to the previously announced regular monthly dividends that Main Street declared of
$0.25 per share for each of January, February and March 2025, or total regular monthly dividends of $0.75 per share for the
first quarter of 2025, resulting in total dividends declared for the first quarter of 2025 of $1.05 per share.
In February 2025, Main Street also declared regular monthly dividends of $0.25 per share for each of April, May
and June of 2025. These regular monthly dividends equal a total of $0.75 per share for the second quarter of 2025,
representing a 4.2% increase from the regular monthly dividends paid in the second quarter of 2024. Including the
regular monthly and supplemental dividends declared through the second quarter of 2025, Main Street will have paid
$44.725 per share in cumulative dividends since its October 2007 initial public offering.
Table of contents
MAIN STREET CAPITAL CORPORATION
Notes to the Consolidated Financial Statements (Continued)
187
Majority-owned investments
Analytical Systems Keco Holdings, LLC
Secured Debt (12)
(8)
$
—
$
—
$
5
$
219
$
—
$
219
$
—
13.75%
Secured Debt
(8)
—
—
698
4,084
314
350
4,048
Preferred Member
Units
(8)
—
—
—
—
—
—
—
Preferred Member
Units
(8)
—
440
—
4,860
440
—
5,300
Warrants
(8)
—
—
—
—
—
—
—
BDB Holdings, LLC
Preferred Equity
(7)
—
(617)
—
—
19,537
617
18,920
Brewer Crane Holdings, LLC
14.66%
SF+
10.00%
Secured Debt
(9)
—
—
820
5,498
14
496
5,016
Preferred Member
Units
(9)
—
(940)
120
5,620
—
940
4,680
Café Brazil, LLC
Member Units
(8)
—
(780)
35
1,980
—
780
1,200
California Splendor Holdings LLC
14.00%
4.00%
Secured Debt
(9)
—
(79)
4,109
27,655
889
79
28,465
14.00%
4.00%
Secured Debt (12)
(9)
—
—
106
—
1,506
—
1,506
Preferred Member
Units
(9)
—
893
250
15,695
6,520
—
22,215
15.00%
15.00%
Preferred Member
Units
(9)
—
—
1,308
4,601
6,308
—
10,909
Clad-Rex Steel, LLC
Secured Debt (12)
(5)
—
—
2
—
—
—
—
9.00%
Secured Debt
(5)
—
174
879
8,422
138
1,800
6,760
10.00%
Secured Debt
(5)
—
8
100
1,004
9
40
973
Member Units
(5)
—
5,790
693
5,200
5,790
—
10,990
Member Units
(5)
—
(179)
—
1,129
—
179
950
Cody Pools, Inc.
Secured Debt (12)
(8)
—
1
45
—
1,264
1,264
—
12.50%
Secured Debt
(8)
—
(12)
5,143
42,073
12
2,858
39,227
Preferred Member
Units
(8)
—
(4,660)
1,628
72,470
—
4,660
67,810
CompareNetworks Topco, LLC
SF+
9.00%
Secured Debt
(9)
—
—
—
—
—
—
—
13.66%
SF+
9.00%
Secured Debt
(9)
—
—
483
3,454
—
551
2,903
Preferred Member
Units
(9)
—
(4,735)
—
14,450
1,545
4,735
11,260
Cybermedia Technologies, LLC
Secured Debt (12)
(6)
—
—
10
—
—
—
—
13.00%
Secured Debt
(6)
—
—
3,725
28,389
65
1,338
27,116
Preferred Member
Units
(6)
—
—
1,403
15,000
—
—
15,000
Datacom, LLC
7.50%
Secured Debt
(8)
—
—
28
447
587
541
493
10.00%
Secured Debt
(8)
—
485
979
7,587
630
270
7,947
Preferred Member
Units
(8)
—
170
—
70
170
—
240
Direct Marketing Solutions, Inc.
Secured Debt
(9)
—
(29)
81
1,233
1,729
2,962
—
14.00%
Secured Debt
(9)
—
(44)
3,553
25,543
44
1,685
23,902
Company
Total
Rate
Base
Rate
Spread
PIK
Rate
Type of Investment
(1) (10) (11)
Geography
Amount of
Realized
Gain/(Loss)
Amount of
Unrealized
Gain/(Loss)
Amount of
Interest,
Fees or
Dividends
Credited to
Income (2)
December 31,
2023 Fair
Value (13)
Gross
Additions (3)
Gross
Reductions (4)
December 31,
2024 Fair
Value (13)
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates
December 31, 2024
(dollars in thousands)
188
Preferred Stock
(9)
—
(2,810)
—
20,740
—
2,810
17,930
Gamber-Johnson Holdings, LLC
SF+
7.00%
Secured Debt (12)
(5)
—
—
6
—
—
—
—
11.00%
SF+
7.00%
Secured Debt (12)
(5)
—
140
1,046
—
73,126
—
73,126
SF+
7.00%
Secured Debt
(5)
—
(266)
5,112
54,078
—
54,078
—
Member Units
(5)
—
18,040
7,688
96,710
18,040
—
114,750
Garreco, LLC
SF+
8.00%
Secured Debt
(8)
—
—
92
3,088
—
3,088
—
Member Units
(8)
—
480
87
1,580
480
—
2,060
GRT Rubber Technologies LLC
10.66%
SF+
6.00%
Secured Debt (12)
(8)
—
1
343
2,400
746
—
3,146
12.66%
SF+
8.00%
Secured Debt
(8)
—
(47)
5,521
40,493
47
47
40,493
Member Units
(8)
—
1,450
230
44,440
1,450
—
45,890
Gulf Publishing Holdings, LLC
SF+
9.50%
Secured Debt (12)
(8)
—
—
—
—
—
—
—
12.50%
12.50%
Secured Debt
(8)
—
(666)
79
2,284
—
766
1,518
Preferred Equity
(8)
—
(2,460)
—
2,460
—
2,460
—
Member Units
(8)
—
—
—
—
—
—
—
IG Investor, LLC
13.00%
Secured Debt (12)
(6)
—
—
119
(35)
1,607
—
1,572
13.00%
Secured Debt
(6)
—
—
4,862
36,934
83
1,760
35,257
Common Equity
(6)
—
1,830
—
14,400
1,830
—
16,230
Jensen Jewelers of Idaho, LLC
P+
6.75%
Secured Debt (12)
(9)
—
—
3
—
—
—
—
14.50%
P+
6.75%
Secured Debt
(9)
—
—
281
1,998
—
500
1,498
Member Units
(9)
—
(600)
1,156
12,420
—
600
11,820
MH Corbin Holding LLC
Secured Debt
(5)
(3,840)
379
557
5,022
379
5,401
—
Preferred Member
Units
(5)
(4,368)
4,070
—
330
4,070
4,400
—
Preferred Member
Units
(5)
(6,000)
6,000
—
—
6,000
6,000
—
MSC Adviser I, LLC
Member Units
(8)
—
71,937
11,260
174,063
71,937
—
246,000
Mystic Logistics Holdings, LLC
Secured Debt (12)
(6)
—
—
4
—
—
—
—
10.00%
Secured Debt
(6)
—
15
589
5,746
—
—
5,746
Common Stock
(6)
—
(20)
3,800
26,390
—
20
26,370
NRP Jones, LLC
12.00%
Secured Debt
(5)
—
—
259
2,080
98
—
2,178
Member Units
(5)
—
1,009
—
1,466
1,230
—
2,696
Member Units
(5)
—
41
—
53
41
—
94
OMi Topco, LLC
12.00%
Secured Debt
(8)
—
(38)
1,429
12,750
38
3,788
9,000
Preferred Member
Units
(8)
—
36,340
8,775
36,380
36,340
—
72,720
PPL RVs, Inc.
SF+
8.75%
Secured Debt
(8)
—
(2)
2
—
2
2
—
13.73%
SF+
8.75%
Secured Debt
(8)
—
(70)
2,758
19,877
71
3,492
16,456
Common Stock
(8)
—
130
—
16,980
130
—
17,110
Common Stock
(8)
—
146
24
368
146
—
514
Principle Environmental, LLC
13.00%
Secured Debt
(8)
—
—
811
5,829
32
1,000
4,861
Company
Total
Rate
Base
Rate
Spread
PIK
Rate
Type of Investment
(1) (10) (11)
Geography
Amount of
Realized
Gain/(Loss)
Amount of
Unrealized
Gain/(Loss)
Amount of
Interest,
Fees or
Dividends
Credited to
Income (2)
December 31,
2023 Fair
Value (13)
Gross
Additions (3)
Gross
Reductions (4)
December 31,
2024 Fair
Value (13)
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates (Continued)
December 31, 2024
(dollars in thousands)
189
Preferred Member
Units
(8)
—
1,850
1,396
10,750
1,850
—
12,600
Common Stock
(8)
—
90
—
510
90
—
600
Quality Lease Service, LLC
Member Units
(7)
—
—
—
460
—
—
460
Robbins Bros. Jewelry, Inc.
10.00%
Secured Debt
(9)
—
—
8
(26)
—
13
(39)
12.50%
10.00%
Secured Debt
(9)
—
(14,949)
1,083
30,798
—
16,236
14,562
Preferred Equity
(9)
—
—
6
—
—
—
—
Trantech Radiator Topco, LLC
Secured Debt (12)
(7)
—
(1)
5
—
1
2
(1)
13.50%
Secured Debt
(7)
—
(8)
1,089
7,920
—
65
7,855
Common Stock
(7)
—
(4,170)
116
12,740
—
4,170
8,570
Victory Energy Operations, LLC
Secured Debt
(8)
—
—
6
—
—
33
(33)
13.00%
Secured Debt
(8)
—
—
2,557
—
47,792
—
47,792
Preferred Equity
(8)
—
—
—
—
26,133
3,447
22,686
Volusion, LLC
10.00%
Secured Debt
(8)
—
—
213
2,100
—
—
2,100
Preferred Member
Units
(8)
—
—
30
—
—
—
—
Preferred Member
Units
(8)
—
4,421
—
7,250
4,422
4,669
7,003
Preferred Member
Units
(8)
—
—
—
—
—
—
—
Common Stock
(8)
—
—
—
—
—
—
—
Ziegler’s NYPD, LLC
Secured Debt
(8)
—
—
55
450
—
450
—
12.00%
Secured Debt
(8)
—
—
—
—
1,750
—
1,750
Secured Debt
(8)
—
55
66
945
—
945
—
Secured Debt
(8)
(2,301)
670
389
2,080
188
2,268
—
Preferred Member
Units
(8)
—
—
—
—
320
—
320
Warrants
(8)
—
—
—
—
—
—
—
Other controlled investments
2717 MH, L.P.
LP Interests (2717
MH, L.P.)
(8)
147
2,768
311
6,050
2,915
147
8,818
LP Interests (2717
HPP-MS, L.P.)
(8)
—
60
—
315
68
—
383
LP Interests (2717
GRE-LP, L.P.)
(8)
—
—
—
—
441
—
441
HPEP 423 COR, LP
LP Interests (423
COR, L.P.)
(8)
—
818
102
1,869
2,318
—
4,187
ASC Interests, LLC
13.00%
Secured Debt
(8)
—
—
54
400
—
—
400
13.00%
Secured Debt
(8)
—
—
219
1,597
1
—
1,598
Preferred Member
Units
(8)
—
(266)
—
266
—
266
—
Member Units
(8)
—
(100)
—
100
—
100
—
ATS Workholding, LLC
5.00%
Secured Debt (12)
(9)
—
(507)
—
328
293
508
113
Company
Total
Rate
Base
Rate
Spread
PIK
Rate
Type of Investment
(1) (10) (11)
Geography
Amount of
Realized
Gain/(Loss)
Amount of
Unrealized
Gain/(Loss)
Amount of
Interest,
Fees or
Dividends
Credited to
Income (2)
December 31,
2023 Fair
Value (13)
Gross
Additions (3)
Gross
Reductions (4)
December 31,
2024 Fair
Value (13)
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates (Continued)
December 31, 2024
(dollars in thousands)
190
5.00%
Secured Debt
(9)
—
(329)
—
473
—
330
143
Preferred Member
Units
(9)
—
—
—
—
—
—
—
Barfly Ventures, LLC
7.00%
Secured Debt (12)
(5)
—
—
51
711
—
—
711
Member Units
(5)
—
1,720
1
4,140
1,720
—
5,860
Batjer TopCo, LLC
10.00%
Secured Debt (12)
(8)
—
(6)
42
—
452
6
446
10.00%
Secured Debt (12)
(8)
—
—
27
270
—
—
270
10.00%
Secured Debt
(8)
—
(67)
1,096
10,575
21
67
10,529
Preferred Stock
(8)
—
(990)
766
6,150
—
990
5,160
Bolder Panther Group, LLC
12.55%
SF+
7.99%
Secured Debt
(9)
—
(99)
13,647
96,556
7,635
2,548
101,643
8.00%
Class B Preferred
Member Units
(9)
—
(500)
3,816
31,020
—
500
30,520
Secured Debt
(9)
—
—
131
—
—
—
—
Bridge Capital Solutions Corporation
Secured Debt
(6)
—
—
767
8,813
—
8,813
—
Secured Debt
(6)
—
—
87
1,000
—
1,000
—
Preferred Member
Units
(6)
—
(1,000)
75
1,000
—
1,000
—
Warrants
(6)
—
(1,808)
—
1,808
—
1,808
—
Warrants
(6)
—
(2,482)
—
2,482
—
2,482
—
CBT Nuggets, LLC
Member Units
(9)
—
(590)
2,471
50,130
—
590
49,540
Centre Technologies Holdings, LLC
SF+
9.00%
Secured Debt (12)
(8)
—
—
12
—
—
—
—
13.66%
SF+
9.00%
Secured Debt
(8)
—
42
385
—
26,255
721
25,534
SF+
10.00%
Secured Debt
(8)
—
—
2,900
—
3,675
3,675
—
Secured Debt
(8)
—
(62)
281
17,574
—
17,574
—
Preferred Member
Units
(8)
—
1,106
120
11,040
1,370
—
12,410
Chamberlin Holding LLC
SF+
6.00%
Secured Debt (12)
(8)
—
(90)
98
—
90
90
—
12.74%
SF+
8.00%
Secured Debt
(8)
—
(2)
2,117
15,620
2
2
15,620
Member Units
(8)
—
3,790
4,715
29,320
3,790
—
33,110
Member Units
(8)
—
690
92
2,860
690
—
3,550
Charps, LLC
10.00%
Unsecured Debt
(5)
—
(487)
1,058
5,694
487
487
5,694
Preferred Member
Units
(5)
—
(110)
802
15,690
—
110
15,580
Colonial Electric Company LLC
Secured Debt (12)
(6)
—
—
8
—
—
—
—
12.00%
Secured Debt
(6)
—
356
2,293
21,627
423
7,740
14,310
Preferred Member
Units
(6)
—
(1,440)
1,440
2,400
—
2,400
—
Preferred Member
Units
(6)
—
5,890
2,882
7,680
5,890
—
13,570
Compass Systems & Sales, LLC
Secured Debt
(5)
—
—
118
—
2,379
2,400
(21)
13.50%
Secured Debt
(5)
—
—
2,395
17,034
33
—
17,067
Preferred Equity
(5)
—
(4)
240
7,454
—
4
7,450
Company
Total
Rate
Base
Rate
Spread
PIK
Rate
Type of Investment
(1) (10) (11)
Geography
Amount of
Realized
Gain/(Loss)
Amount of
Unrealized
Gain/(Loss)
Amount of
Interest,
Fees or
Dividends
Credited to
Income (2)
December 31,
2023 Fair
Value (13)
Gross
Additions (3)
Gross
Reductions (4)
December 31,
2024 Fair
Value (13)
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates (Continued)
December 31, 2024
(dollars in thousands)
191
Copper Trail Fund Investments
LP Interests (CTMH,
LP)
(9)
—
—
—
568
—
68
500
Digital Products Holdings LLC
14.56%
SF+
10.00%
Secured Debt
(5)
—
(71)
2,128
14,690
59
2,327
12,422
Preferred Member
Units
(5)
—
—
200
9,835
—
—
9,835
Elgin AcquireCo, LLC
SF+
6.00%
Secured Debt (12)
(5)
—
—
9
(7)
2
—
(5)
12.00%
Secured Debt
(5)
—
—
2,265
18,632
41
704
17,969
9.00%
Secured Debt
(5)
—
—
568
6,252
3
48
6,207
Common Stock
(5)
—
(360)
—
6,090
—
360
5,730
Common Stock
(5)
—
1,380
—
1,670
1,380
—
3,050
Harrison Hydra-Gen, Ltd.
Common Stock
(8)
—
2,350
308
4,660
2,350
—
7,010
JorVet Holdings, LLC
12.00%
Secured Debt
(9)
—
—
3,122
25,483
62
2,329
23,216
Preferred Equity
(9)
—
2,187
1,351
10,741
2,439
—
13,180
KBK Industries, LLC
9.00%
Secured Debt
(5)
—
(15)
407
4,700
15
1,015
3,700
Member Units
(5)
—
2,410
2,756
22,770
2,410
—
25,180
Kickhaefer Manufacturing Company, LLC
11.50%
Secured Debt
(5)
—
—
2,150
19,774
13
4,800
14,987
9.00%
Secured Debt
(5)
—
—
354
3,805
165
44
3,926
Preferred Equity
(5)
—
2,550
—
9,690
2,550
—
12,240
Member Units
(5)
—
(20)
124
2,730
—
20
2,710
Metalforming Holdings, LLC
Secured Debt (12)
(7)
—
—
15
—
—
11
(11)
9.75%
Secured Debt
(7)
—
—
2,594
23,623
63
2,842
20,844
8.00%
8.00%
Preferred Equity
(7)
—
481
—
6,035
481
119
6,397
Common Stock
(7)
—
5,350
561
1,500
5,350
—
6,850
MS Private Loan Fund I, LP
5.00%
Secured Debt (12)
(8)
—
—
53
—
18,100
16,500
1,600
LP Interests (12)
(8)
—
(493)
1,959
14,527
—
493
14,034
MS Private Loan Fund II, LP
SF+
3.50%
Secured Debt (12)
(8)
—
—
2,964
23,367
42,074
65,500
(59)
LP Interests (12)
(8)
—
394
363
1,561
6,282
—
7,843
MSC Income Fund, Inc.
Common Equity
(8)
—
(215)
1,649
10,025
7,000
215
16,810
NAPCO Precast, LLC
Member Units
(8)
—
(2,680)
126
11,730
—
2,680
9,050
Nello Industries Investco, LLC
SF+
6.50%
Secured Debt
(5)
—
—
1,023
—
21,584
21,600
(16)
13.50%
Secured Debt
(5)
—
—
2,636
—
26,959
—
26,959
Common Equity
(5)
—
3,440
937
—
15,560
—
15,560
NexRev LLC
Secured Debt (12)
(8)
—
—
118
—
3,378
3,378
—
9.00%
Secured Debt
(8)
—
9
1,032
9,751
60
—
9,811
Preferred Member
Units
(8)
—
5,560
972
6,350
5,560
—
11,910
NuStep, LLC
11.16%
SF+
6.50%
Secured Debt
(5)
—
—
437
3,600
—
—
3,600
12.00%
Secured Debt
(5)
—
—
2,262
18,426
13
—
18,439
Preferred Member
Units
(5)
—
644
—
9,240
2,310
—
11,550
Company
Total
Rate
Base
Rate
Spread
PIK
Rate
Type of Investment
(1) (10) (11)
Geography
Amount of
Realized
Gain/(Loss)
Amount of
Unrealized
Gain/(Loss)
Amount of
Interest,
Fees or
Dividends
Credited to
Income (2)
December 31,
2023 Fair
Value (13)
Gross
Additions (3)
Gross
Reductions (4)
December 31,
2024 Fair
Value (13)
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates (Continued)
December 31, 2024
(dollars in thousands)
192
Preferred Member
Units
(5)
—
127
—
5,150
850
—
6,000
Orttech Holdings, LLC
SF+
11.00%
Secured Debt (12)
(5)
—
—
—
—
—
—
—
15.66%
SF+
11.00%
Secured Debt
(5)
—
(45)
3,684
22,040
45
125
21,960
Preferred Stock
(5)
—
(3,600)
448
17,050
—
3,600
13,450
Pearl Meyer Topco LLC
Secured Debt
(6)
—
(3)
351
3,500
1,503
5,003
—
Secured Debt
(6)
—
(44)
4,290
20,000
23,263
43,263
—
Secured Debt
(6)
—
(80)
3,374
27,681
80
27,761
—
Preferred Equity
(6)
53,693
(31,090)
8,988
44,090
53,693
97,783
—
Pinnacle TopCo, LLC
Secured Debt (12)
(8)
—
13
17
444
16
460
—
13.00%
Secured Debt
(8)
—
225
4,020
30,339
301
2,000
28,640
Preferred Equity
(8)
—
5,820
2,118
12,540
5,820
—
18,360
River Aggregates, LLC
Member Units
(8)
(409)
5,820
—
3,710
5,820
—
9,530
Tedder Industries, LLC
12.00%
12.00%
Secured Debt
(9)
—
(60)
56
1,726
—
80
1,646
12.00%
12.00%
Secured Debt
(9)
—
(10,503)
461
14,262
—
10,659
3,603
Preferred Member
Units
(9)
—
—
—
—
—
—
—
Preferred Member
Units
(9)
—
—
—
—
—
—
—
Preferred Member
Units
(9)
—
—
—
—
—
—
—
Televerde, LLC
Member Units
(8)
—
(482)
—
4,734
—
482
4,252
Preferred Stock
(8)
—
—
—
1,794
—
—
1,794
Vision Interests, Inc.
Series A Preferred
Stock
(9)
—
—
—
3,000
—
3,000
—
VVS Holdco LLC
SF+
6.00%
Secured Debt (12)
(5)
—
—
16
—
—
—
—
11.50%
Secured Debt
(5)
—
—
3,241
28,035
66
2,440
25,661
Preferred Equity
(5)
—
—
401
12,240
—
—
12,240
Other
Amounts related to investments transferred to or from
other 1940 Act classification during the period
—
3,694
2,723
58,515
—
—
—
Total Control investments
$
36,922
$
117,867
$
205,367
$
2,006,698
$
666,648
$
526,941
$
2,087,890
Affiliate Investments
423 HAR, LP
LP Interests (423
HAR, L.P.)
(8)
$
—
$
229
$
—
$
996
$
230
$
—
$
1,226
AAC Holdings, Inc.
18.00%
18.00%
Secured Debt (12)
(7)
—
(1)
93
418
192
1
609
18.00%
18.00%
Secured Debt
(7)
—
(3)
2,958
13,895
3,473
3
17,365
Common Stock
(7)
—
—
—
—
—
—
—
Warrants
(7)
—
—
—
—
—
—
—
Boccella Precast Products LLC
10.00%
Secured Debt
(6)
—
(55)
33
320
—
54
266
Member Units
(6)
—
(1,680)
41
1,990
—
1,680
310
Buca C, LLC
15.00%
15.00%
Secured Debt
(7)
—
(1,025)
563
12,144
—
12,144
—
Company
Total
Rate
Base
Rate
Spread
PIK
Rate
Type of Investment
(1) (10) (11)
Geography
Amount of
Realized
Gain/(Loss)
Amount of
Unrealized
Gain/(Loss)
Amount of
Interest,
Fees or
Dividends
Credited to
Income (2)
December 31,
2023 Fair
Value (13)
Gross
Additions (3)
Gross
Reductions (4)
December 31,
2024 Fair
Value (13)
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates (Continued)
December 31, 2024
(dollars in thousands)
193
6.00%
6.00%
Preferred Member
Units
(7)
—
—
—
—
—
—
—
15.00%
15.00%
Secured Debt
(7)
—
—
—
—
—
—
—
15.00%
15.00%
Secured Debt
(7)
—
(5,652)
—
—
5,652
5,652
—
Career Team Holdings, LLC
10.56%
SF+
6.00%
Secured Debt (12)
(6)
—
—
125
881
3,156
3,150
887
12.50%
Secured Debt
(6)
—
—
2,658
19,906
43
585
19,364
Common Stock
(6)
—
240
—
4,500
240
—
4,740
Classic H&G Holdings, LLC
SF+
6.00%
Secured Debt
(6)
—
—
181
4,560
—
4,560
—
Secured Debt
(6)
—
(50)
654
19,274
50
19,324
—
Preferred Member
Units
(6)
10,388
(7,390)
1,470
16,000
10,388
23,538
2,850
Congruent Credit Opportunities Funds
LP Interests
(Congruent Credit
Opportunities Fund
III, LP) (12)
(8)
—
(111)
239
4,352
—
2,076
2,276
Connect Telecommunications Solutions Holdings, Inc.
13.00%
Secured Debt
(6)
—
—
1,472
—
28,576
1,261
27,315
Preferred Equity
(6)
—
—
—
—
12,596
—
12,596
DMA Industries, LLC
12.00%
Secured Debt
(7)
—
(115)
2,178
18,800
37
2,115
16,722
Preferred Equity
(7)
—
(1,716)
—
7,660
—
1,716
5,944
12.00%
Secured Debt
(7)
—
—
43
—
555
—
555
15.00%
15.00%
Preferred Equity
(7)
—
—
172
—
3,240
—
3,240
Dos Rios Partners
LP Interests (Dos Rios
Partners, LP)
(8)
—
(593)
—
8,443
—
735
7,708
LP Interests (Dos Rios
Partners - A, LP)
(8)
—
(139)
—
2,631
—
184
2,447
Dos Rios Stone Products LLC
Class A Preferred
Units
(8)
—
(1,580)
—
1,580
—
1,580
—
EIG Fund Investments
LP Interests (EIG
Global Private Debt
Fund-A, L.P.)
(8)
36
—
52
760
36
427
369
FCC Intermediate Holdco, LLC
13.00%
Secured Debt
(5)
—
—
3,795
—
29,109
—
29,109
Warrants
(5)
—
6,920
—
—
10,840
—
10,840
Flame King Holdings, LLC
Preferred Equity
(9)
—
8,020
4,918
27,900
8,020
—
35,920
Freeport Financial SBIC Fund LP
LP Interests (Freeport
Financial SBIC Fund
LP)
(5)
—
(543)
—
3,012
—
822
2,190
LP Interests (Freeport
First Lien Loan Fund
III LP)
(5)
—
59
41
3,704
59
2,500
1,263
GFG Group, LLC
8.00%
Secured Debt
(5)
—
(22)
748
9,345
22
1,182
8,185
Preferred Member
Units
(5)
—
(920)
1,812
11,460
—
920
10,540
Gulf Manufacturing, LLC
SF+
7.63%
Secured Debt (12)
(8)
—
42
129
—
—
—
—
12.19%
SF+
7.63%
Secured Debt
(8)
—
325
5,472
—
40,000
1,000
39,000
Member Units
(8)
—
5,660
1,481
9,070
5,660
—
14,730
Company
Total
Rate
Base
Rate
Spread
PIK
Rate
Type of Investment
(1) (10) (11)
Geography
Amount of
Realized
Gain/(Loss)
Amount of
Unrealized
Gain/(Loss)
Amount of
Interest,
Fees or
Dividends
Credited to
Income (2)
December 31,
2023 Fair
Value (13)
Gross
Additions (3)
Gross
Reductions (4)
December 31,
2024 Fair
Value (13)
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates (Continued)
December 31, 2024
(dollars in thousands)
194
Common Stock
(8)
—
—
—
—
888
—
888
Hawk Ridge Systems, LLC
10.73%
SF+
6.00%
Secured Debt
(9)
—
(1)
316
1,974
7,432
6,761
2,645
12.50%
Secured Debt
(9)
—
(55)
5,807
45,256
55
55
45,256
Preferred Member
Units
(9)
—
2,800
290
17,460
2,800
—
20,260
Preferred Member
Units
(9)
—
150
—
920
150
—
1,070
Houston Plating and Coatings, LLC
10.00%
Unsecured
Convertible Debt
(8)
—
60
289
2,880
60
—
2,940
Member Units
(8)
—
590
148
3,340
590
—
3,930
HPEP 3, L.P.
LP Interests (HPEP 3,
L.P.) (12)
(8)
—
247
1
4,225
247
—
4,472
LP Interests (HPEP 4,
L.P.) (12)
(8)
—
329
—
3,773
2,088
—
5,861
I-45 SLF LLC
Member Units (Fully
diluted 20.0%;
21.75% profits
interest)
(8)
(7,107)
6,710
429
13,490
—
13,490
—
Independent Pet Partners Intermediate Holdings, LLC
Common Equity
(6)
—
2,700
—
17,690
2,700
—
20,390
Infinity X1 Holdings, LLC
12.00%
Secured Debt
(9)
—
96
2,096
17,403
147
2,500
15,050
Preferred Equity
(9)
—
4,712
899
4,000
5,080
—
9,080
Integral Energy Services
12.35%
SF+
7.50%
Secured Debt
(8)
—
332
1,831
13,891
408
1,571
12,728
10.00%
10.00%
Preferred Equity
(8)
—
125
27
300
152
—
452
Common Stock
(8)
—
390
43
160
390
—
550
Iron-Main Investments, LLC
13.00%
Secured Debt
(5)
—
—
616
4,487
6
—
4,493
13.00%
Secured Debt
(5)
—
—
402
2,922
5
—
2,927
13.00%
Secured Debt
(5)
—
—
1,209
8,944
—
—
8,944
13.00%
Secured Debt
(5)
—
—
2,555
19,503
39
2,000
17,542
13.00%
Secured Debt
(5)
—
—
1,464
10,273
86
721
9,638
Common Stock
(5)
—
170
—
2,680
170
—
2,850
25.00%
25.00%
Preferred Equity
(5)
—
49
—
—
760
—
760
ITA Holdings Group, LLC
13.78%
SF+
9.00%
Secured Debt
(8)
—
11
169
816
600
236
1,180
13.78%
SF+
9.00%
Secured Debt
(8)
—
12
121
697
297
—
994
12.78%
SF+
8.00%
Secured Debt
(8)
—
666
938
3,430
1,008
—
4,438
14.78%
SF+
10.00%
Secured Debt
(8)
—
666
1,027
3,430
1,008
—
4,438
Warrants
(8)
—
3,599
—
2,091
3,599
—
5,690
Johnson Downie Opco, LLC
Secured Debt (12)
(8)
—
(6)
24
—
6
6
—
15.00%
Secured Debt
(8)
—
(52)
3,501
24,207
52
2,752
21,507
Preferred Equity
(8)
—
4,930
934
9,620
4,930
—
14,550
Mills Fleet Farm Group, LLC
SF+
5.50%
Secured Debt (12)
(5)
—
—
6
—
—
—
—
SF+
7.00%
Secured Debt
(5)
(6,169)
359
2,160
17,524
—
17,524
—
Common Equity
(5)
—
—
—
—
13,840
—
13,840
Company
Total
Rate
Base
Rate
Spread
PIK
Rate
Type of Investment
(1) (10) (11)
Geography
Amount of
Realized
Gain/(Loss)
Amount of
Unrealized
Gain/(Loss)
Amount of
Interest,
Fees or
Dividends
Credited to
Income (2)
December 31,
2023 Fair
Value (13)
Gross
Additions (3)
Gross
Reductions (4)
December 31,
2024 Fair
Value (13)
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates (Continued)
December 31, 2024
(dollars in thousands)
195
MoneyThumb Acquisition, LLC
14.00%
Secured Debt
(9)
—
—
753
—
8,967
—
8,967
12.00%
12.00%
Preferred Member
Units
(9)
—
—
74
—
1,707
—
1,707
Warrants
(9)
—
—
—
—
594
—
594
Nebraska Vet AcquireCo, LLC
SF+
7.00%
Secured Debt (12)
(8)
—
7
100
—
1,250
1,250
—
Secured Debt
(8)
—
(121)
1,205
25,794
—
25,794
—
Secured Debt
(8)
—
(44)
454
10,500
—
10,500
—
Preferred Member
Units
(5)
—
17,020
1,158
15,020
17,020
—
32,040
12.50%
Secured Debt
(5)
—
115
5,459
—
62,200
—
62,200
12.50%
Secured Debt
(5)
—
171
257
—
4,650
—
4,650
OnAsset Intelligence, Inc.
12.00%
12.00%
Secured Debt
(8)
—
(226)
—
326
—
227
99
12.00%
12.00%
Secured Debt
(8)
—
(231)
—
332
—
231
101
12.00%
12.00%
Secured Debt
(8)
—
(497)
—
716
—
498
218
12.00%
12.00%
Secured Debt
(8)
—
(1,037)
—
1,493
—
1,036
457
10.00%
10.00%
Unsecured Debt
(8)
—
—
—
305
—
—
305
7.00%
7.00%
Preferred Stock
(8)
—
—
—
—
—
—
—
Common Stock
(8)
—
—
—
—
—
—
—
Warrants
(8)
—
—
—
—
—
—
—
Oneliance, LLC
SF+
10.00%
Secured Debt
(7)
—
—
—
—
—
—
—
SF+
10.00%
Secured Debt
(7)
—
61
539
5,350
90
5,440
—
Preferred Stock
(7)
—
1,452
12
1,128
1,452
—
2,580
Quality Lease Service, LLC
Preferred Member
Units
(8)
(2,504)
2,500
—
—
2,500
2,500
—
RA Outdoors (Aspira) LLC
11.74%
SF+
6.75%
11.74%
Secured Debt
(8)
—
(45)
66
771
537
51
1,257
11.74%
SF+
6.75%
11.74%
Secured Debt
(8)
—
(476)
709
12,513
880
238
13,155
Common Equity
(8)
—
—
—
—
—
—
—
SI East, LLC
11.75%
Secured Debt (12)
(7)
—
(4)
269
1,125
2,254
1,129
2,250
Secured Debt
(7)
—
(241)
2,600
54,536
—
54,536
—
12.79%
Secured Debt
(7)
—
50
5,856
—
67,661
—
67,661
Preferred Member
Units
(7)
—
(5,510)
1,623
19,170
—
5,510
13,660
Slick Innovations, LLC
14.00%
Secured Debt
(6)
—
45
2,498
11,440
7,600
2,720
16,320
Common Stock
(6)
—
586
234
2,310
586
456
2,440
Student Resource Center, LLC
8.50%
8.50%
Secured Debt
(6)
—
(1,546)
—
3,190
—
1,546
1,644
Preferred Equity
(6)
—
—
—
—
—
—
—
8.50%
8.50%
Secured Debt
(6)
—
—
4
—
204
—
204
Superior Rigging & Erecting Co.
Secured Debt
(7)
—
—
1,193
20,427
73
20,500
—
Preferred Member
Units
(7)
—
4,590
—
5,940
4,590
—
10,530
The Affiliati Network, LLC
10.00%
Secured Debt (12)
(9)
—
—
18
150
1,444
1,200
394
Company
Total
Rate
Base
Rate
Spread
PIK
Rate
Type of Investment
(1) (10) (11)
Geography
Amount of
Realized
Gain/(Loss)
Amount of
Unrealized
Gain/(Loss)
Amount of
Interest,
Fees or
Dividends
Credited to
Income (2)
December 31,
2023 Fair
Value (13)
Gross
Additions (3)
Gross
Reductions (4)
December 31,
2024 Fair
Value (13)
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates (Continued)
December 31, 2024
(dollars in thousands)
196
10.00%
Secured Debt
(9)
—
—
751
7,347
26
2,320
5,053
Preferred Stock
(9)
—
—
493
6,400
—
—
6,400
Preferred Stock
(9)
—
—
26
172
115
—
287
UnionRock Energy Fund II, LP
LP Interests (12)
(9)
—
(459)
46
5,694
—
962
4,732
UnionRock Energy Fund III, LP
LP Interests (12)
(9)
—
500
—
2,838
3,000
226
5,612
UniTek Global Services, Inc.
15.00%
15.00%
Secured Convertible
Debt
(6)
—
209
290
3,889
1,753
—
5,642
15.00%
15.00%
Secured Convertible
Debt
(6)
—
88
142
1,908
755
—
2,663
20.00%
20.00%
Preferred Stock
(6)
—
(224)
572
2,833
572
224
3,181
20.00%
20.00%
Preferred Stock
(6)
—
250
—
3,698
574
—
4,272
19.00%
19.00%
Preferred Stock
(6)
—
—
—
—
—
—
—
13.50%
13.50%
Preferred Stock
(6)
—
—
—
—
—
—
—
Common Stock
(6)
—
—
—
—
—
—
—
Universal Wellhead Services Holdings, LLC
Preferred Member
Units
(8)
(1,032)
882
—
150
882
1,032
—
Member Units
(8)
(4,000)
4,000
—
—
4,000
4,000
—
Urgent DSO LLC
13.50%
Secured Debt
(5)
—
—
1,247
—
8,727
—
8,727
9.00%
9.00%
Preferred Equity
(5)
—
—
320
—
4,320
—
4,320
World Micro Holdings, LLC
13.00%
Secured Debt
(7)
—
—
1,570
12,028
32
1,358
10,702
Preferred Equity
(7)
—
—
88
3,845
—
—
3,845
Other
Amounts related to investments transferred to or from
other 1940 Act classification during the period
6,169
(4,053)
(4,889)
(89,323)
—
—
—
Total Affiliate investments
$
(4,219)
$
47,299
$
84,367
$
615,002
$
422,782
$
280,309
$
846,798
Company
Total
Rate
Base
Rate
Spread
PIK
Rate
Type of Investment
(1) (10) (11)
Geography
Amount of
Realized
Gain/(Loss)
Amount of
Unrealized
Gain/(Loss)
Amount of
Interest,
Fees or
Dividends
Credited to
Income (2)
December 31,
2023 Fair
Value (13)
Gross
Additions (3)
Gross
Reductions (4)
December 31,
2024 Fair
Value (13)
___________________________
(1) The principal amount, the ownership detail for equity investments and if the investment is income producing is included in the Consolidated Schedule of
Investments included in Item 8. Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
(2) Represents the total amount of interest, fees and dividends credited to income for the portion of the period for which an investment was included in Control or
Affiliate categories, respectively. For investments transferred between Control and Affiliate categories during the period, any income or investment balances related
to the time period it was in the category other than the one shown at period end is included in “Amounts related to investments transferred from other 1940 Act
classifications during the period.”
(3) Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments and accrued PIK interest, and the
exchange of one or more existing securities for one or more new securities. Gross additions also include net increases in unrealized appreciation or net decreases in
net unrealized depreciation as well as the movement of an existing portfolio company into this category and out of a different category.
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates (Continued)
December 31, 2024
(dollars in thousands)
197
(4) Gross reductions include decreases in the cost basis of investments resulting from principal repayments or sales and the exchange of one or more existing securities
for one or more new securities. Gross reductions also include net increases in net unrealized depreciation or net decreases in unrealized appreciation as well as the
movement of an existing portfolio company out of this category and into a different category.
(5) Portfolio company located in the Midwest region as determined by location of the corporate headquarters. The fair value as of December 31, 2024 for control
investments located in this region was $538,212. This represented 19.2% of net assets as of December 31, 2024. The fair value as of December 31, 2024 for
affiliate investments located in this region was $235,058. This represented 8.4% of net assets as of December 31, 2024.
(6) Portfolio company located in the Northeast region and Canada as determined by location of the corporate headquarters. The fair value as of December 31, 2024 for
control investments located in this region was $155,171. This represented 5.5% of net assets as of December 31, 2024. The fair value as of December 31, 2024 for
affiliate investments located in this region was $125,084. This represented 4.5% of net assets as of December 31, 2024.
(7) Portfolio company located in the Southeast region as determined by location of the corporate headquarters. The fair value as of December 31, 2024 for control
investments located in this region was $69,884. This represented 2.5% of net assets as of December 31, 2024. The fair value as of December 31, 2024 for affiliate
investments located in this region was $155,663. This represented 5.6% of net assets as of December 31, 2024.
(8) Portfolio company located in the Southwest region as determined by location of the corporate headquarters. The fair value as of December 31, 2024 for control
investments located in this region was $943,892. This represented 33.7% of net assets as of December 31, 2024. The fair value as of December 31, 2024 for
affiliate investments located in this region was $167,966. This represented 6.0% of net assets as of December 31, 2024.
(9) Portfolio company located in the West region as determined by location of the corporate headquarters. The fair value as of December 31, 2024 for control
investments located in this region was $380,731. This represented 13.6% of net assets as of December 31, 2024. The fair value as of December 31, 2024 for
affiliate investments located in this region was $163,027. This represented 5.8% of net assets as of December 31, 2024.
(10)All of the Company’s portfolio investments are generally subject to restrictions on resale as “restricted securities,” unless otherwise noted.
(11)This schedule should be read in conjunction with the Consolidated Schedule of Investments and Notes to the Consolidated Financial Statements included in Item 8.
Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K. Supplemental information can be located within the
Consolidated Schedule of Investments including end of period interest rate, preferred dividend rate, maturity date, investments not paid currently in cash and
investments whose value was determined using significant unobservable inputs.
(12)Investment has an unfunded commitment as of December 31, 2024 (see Note K — Commitments and Contingencies of this Annual Report on Form 10-K). The fair
value of the investment includes the impact of the fair value of any unfunded commitments.
(13)Negative fair value is the result of the capitalized discount being greater than the principal amount outstanding on the loan.
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates (Continued)
December 31, 2024
(dollars in thousands)
198
Majority-owned investments
Analytical Systems Keco Holdings, LLC
15.38%
SF+
10.00%
Secured Debt (12)
(8)
$
—
$
—
$
13
$
(3)
$
222
$
—
$
219
15.38%
SF+
10.00%
Secured Debt
(8)
—
—
748
4,545
78
539
4,084
14.13%
Preferred Member
Units
(8)
—
—
—
—
—
—
—
Preferred Member
Units
(8)
—
1,356
—
3,504
1,356
—
4,860
Warrants
(8)
—
—
—
—
—
—
—
Brewer Crane Holdings, LLC
15.46%
L+
10.00%
Secured Debt
(9)
—
—
899
5,964
30
496
5,498
Preferred Member
Units
(9)
—
(1,460)
120
7,080
—
1,460
5,620
Café Brazil, LLC
Member Units
(8)
—
(230)
149
2,210
—
230
1,980
California Splendor Holdings LLC
15.69%
SF+
10.00%
Secured Debt
(9)
—
(359)
4,366
28,000
14
359
27,655
Preferred Member
Units
(9)
—
(9,800)
250
25,495
—
9,800
15,695
15.00%
15.00%
Preferred Member
Units
(9)
—
—
607
3,994
607
—
4,601
Clad-Rex Steel, LLC
11.50%
Secured Debt (12)
(5)
—
—
2
—
—
—
—
11.50%
Secured Debt
(5)
—
(138)
1,172
10,440
40
2,058
8,422
10.00%
Secured Debt
(5)
—
—
104
1,039
1
36
1,004
Member Units
(5)
—
(3,020)
275
8,220
—
3,020
5,200
Member Units
(5)
—
220
—
610
519
—
1,129
CMS Minerals Investments
Member Units
(9)
99
(366)
44
1,670
99
1,769
—
Cody Pools, Inc.
12.50%
Secured Debt (12)
(8)
—
11
14
—
—
—
—
12.50%
Secured Debt
(8)
—
31
3,384
—
46,312
4,239
42,073
L+
10.50%
Secured Debt
(8)
—
(19)
96
1,462
32
1,494
—
L+
10.50%
Secured Debt
(8)
—
(280)
2,683
40,801
—
40,801
—
Preferred Member
Units
(8)
—
14,290
4,877
58,180
14,290
—
72,470
CompareNetworks Topco, LLC
SF+
9.00%
Secured Debt
(9)
—
—
—
—
—
—
—
14.48%
SF+
9.00%
Secured Debt
(9)
—
(9)
668
5,241
9
1,796
3,454
Preferred Member
Units
(9)
—
(5,380)
316
19,830
—
5,380
14,450
Cybermedia Technologies, LLC
10.00%
Secured Debt (12)
(6)
—
—
7
—
—
—
—
13.00%
Secured Debt
(6)
—
—
2,989
—
28,752
363
28,389
Preferred Member
Units
(6)
—
—
163
—
15,000
—
15,000
Datacom, LLC
7.50%
Secured Debt
(8)
—
—
40
223
809
585
447
10.00%
Secured Debt
(8)
—
(85)
1,012
7,789
153
355
7,587
Preferred Member
Units
(8)
—
(2,600)
(96)
2,670
—
2,600
70
Direct Marketing Solutions, Inc.
14.00%
Secured Debt
(9)
—
(29)
91
—
1,304
71
1,233
Company
Total
Rate
Base
Rate
Spread
PIK
Rate
Type of Investment
(1) (10) (11)
Geography
Amount of
Realized
Gain/(Loss)
Amount of
Unrealized
Gain/(Loss)
Amount of
Interest,
Fees or
Dividends
Credited to
Income (2)
December 31,
2022
Fair Value (13)
Gross
Additions (3)
Gross
Reductions (4)
December 31,
2023
Fair Value (13)
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates
December 31, 2023
(dollars in thousands)
199
14.00%
Secured Debt
(9)
—
(59)
3,687
27,267
59
1,783
25,543
Preferred Stock
(9)
—
(1,480)
171
22,220
—
1,480
20,740
Elgin AcquireCo, LLC
SF+
6.00%
Secured Debt (12)
(5)
—
—
9
(9)
2
—
(7)
12.00%
Secured Debt
(5)
—
—
2,322
18,594
38
—
18,632
9.00%
Secured Debt
(5)
—
—
573
6,294
3
45
6,252
Common Stock
(5)
—
364
—
7,603
364
1,877
6,090
Common Stock
(5)
—
112
—
1,558
112
—
1,670
Gamber-Johnson Holdings, LLC
SF+
7.50%
Secured Debt (12)
(5)
—
—
6
—
—
—
—
10.50%
SF+
7.50%
Secured Debt
(5)
—
(128)
6,684
64,078
128
10,128
54,078
Member Units
(5)
—
45,820
5,961
50,890
45,820
—
96,710
GRT Rubber Technologies LLC
11.48%
SF+
6.00%
Secured Debt (12)
(8)
—
6
177
670
1,730
—
2,400
13.48%
SF+
8.00%
Secured Debt
(8)
—
(47)
5,428
40,493
47
47
40,493
Member Units
(8)
—
—
183
44,440
—
—
44,440
Gulf Publishing Holdings, LLC
SF+
9.50%
Secured Debt (12)
(8)
—
—
—
—
—
—
—
12.50%
Secured Debt
(8)
—
—
304
2,284
—
—
2,284
Preferred Equity
(8)
—
(1,320)
—
3,780
—
1,320
2,460
Member Units
(8)
—
—
—
—
—
—
—
IG Investor, LLC
Secured Debt (12)
(6)
—
—
98
—
765
800
(35)
13.00%
Secured Debt
(6)
—
—
3,428
—
37,374
440
36,934
Common Equity
(6)
—
—
—
—
15,096
696
14,400
Jensen Jewelers of Idaho, LLC
P+
6.75%
Secured Debt (12)
(9)
—
—
—
—
—
—
—
15.25%
P+
6.75%
Secured Debt
(9)
—
(6)
356
2,450
6
458
1,998
Member Units
(9)
—
(2,550)
1,362
14,970
—
2,550
12,420
Kickhaefer Manufacturing Company, LLC
12.00%
Secured Debt
(5)
—
—
2,642
20,374
201
801
19,774
9.00%
Secured Debt
(5)
—
—
349
3,842
2
39
3,805
Preferred Equity
(5)
—
2,470
—
7,220
2,470
—
9,690
Member Units
(5)
—
(120)
115
2,850
—
120
2,730
Market Force Information, LLC
L+
11.00%
Secured Debt
(9)
(6,662)
163
453
6,090
804
6,894
—
L+
11.00%
Secured Debt
(9)
(25,952)
24,342
—
1,610
24,342
25,952
—
Member Units
(9)
(16,642)
16,642
—
—
16,642
16,642
—
Metalforming Holdings, LLC
12.75%
Secured Debt (12)
(7)
—
—
11
—
—
—
—
12.75%
Secured Debt
(7)
—
—
3,092
23,576
47
—
23,623
8.00%
8.00%
Preferred Equity
(7)
—
—
505
6,010
473
448
6,035
Common Stock
(7)
—
(37)
522
1,537
—
37
1,500
MH Corbin Holding LLC
13.00%
Secured Debt
(5)
—
1,229
761
4,548
1,229
755
5,022
Preferred Member
Units
(5)
—
330
—
—
330
—
330
Preferred Member
Units
(5)
—
—
—
—
—
—
—
Company
Total
Rate
Base
Rate
Spread
PIK
Rate
Type of Investment
(1) (10) (11)
Geography
Amount of
Realized
Gain/(Loss)
Amount of
Unrealized
Gain/(Loss)
Amount of
Interest,
Fees or
Dividends
Credited to
Income (2)
December 31,
2022
Fair Value (13)
Gross
Additions (3)
Gross
Reductions (4)
December 31,
2023
Fair Value (13)
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates (Continued)
December 31, 2023
(dollars in thousands)
200
MSC Adviser I, LLC
Member Units
(8)
—
51,133
11,310
122,930
51,133
—
174,063
Mystic Logistics Holdings, LLC
Secured Debt (12)
(6)
—
—
4
—
—
—
—
10.00%
Secured Debt
(6)
—
—
583
5,746
—
—
5,746
Common Stock
(6)
—
3,560
4,523
22,830
3,560
—
26,390
OMi Topco, LLC
12.00%
Secured Debt
(8)
—
(48)
1,824
15,750
48
3,048
12,750
Preferred Member
Units
(8)
—
13,570
2,700
22,810
13,570
—
36,380
PPL RVs, Inc.
SF+
8.75%
Secured Debt
(8)
—
(2)
2
—
2
2
—
14.23%
SF+
8.75%
Secured Debt
(8)
—
(67)
2,845
21,655
67
1,845
19,877
Common Stock
(8)
—
(1,970)
(30)
18,950
—
1,970
16,980
Common Stock
(8)
—
130
—
238
130
—
368
Principle Environmental, LLC
13.00%
Secured Debt
(8)
—
—
—
—
—
—
—
13.00%
Secured Debt
(8)
—
—
801
5,806
23
—
5,829
Preferred Member
Units
(8)
—
(1,670)
743
12,420
—
1,670
10,750
Common Stock
(8)
—
(80)
—
590
—
80
510
Quality Lease Service, LLC
Member Units
(7)
—
(98)
—
525
33
98
460
Robbins Bros. Jewelry, Inc.
12.50%
Secured Debt
(9)
—
—
32
(35)
9
—
(26)
12.50%
Secured Debt
(9)
—
(3,113)
4,489
35,404
81
4,687
30,798
Preferred Equity
(9)
—
(14,880)
—
14,880
—
14,880
—
Trantech Radiator Topco, LLC
8.00%
Secured Debt (12)
(7)
—
(3)
7
—
3
3
—
12.00%
Secured Debt
(7)
—
(18)
982
7,920
18
18
7,920
Common Stock
(7)
—
4,940
116
7,800
4,940
—
12,740
Volusion, LLC
10.00%
Secured Debt
(8)
—
—
161
—
2,100
—
2,100
11.50%
Secured Debt
(8)
(3,188)
1,821
166
14,914
—
14,914
—
8.00%
Unsecured
Convertible Debt
(8)
(409)
409
—
—
409
409
—
Preferred Member
Units
(8)
—
—
2
—
—
—
—
Preferred Member
Units
(8)
—
(1,396)
—
—
11,446
4,196
7,250
Preferred Member
Units
(8)
—
—
—
—
—
—
—
Common Stock
(8)
—
(2,576)
—
—
2,576
2,576
—
Warrants
(8)
—
2,576
—
—
—
—
—
Ziegler’s NYPD, LLC
12.00%
Secured Debt
(8)
—
—
55
450
—
—
450
6.50%
Secured Debt
(8)
—
—
66
945
—
—
945
14.00%
Secured Debt
(8)
—
(596)
390
2,676
—
596
2,080
Preferred Member
Units
(8)
—
(240)
—
240
—
240
—
Warrants
(8)
—
—
—
—
—
—
—
Other controlled investments
Company
Total
Rate
Base
Rate
Spread
PIK
Rate
Type of Investment
(1) (10) (11)
Geography
Amount of
Realized
Gain/(Loss)
Amount of
Unrealized
Gain/(Loss)
Amount of
Interest,
Fees or
Dividends
Credited to
Income (2)
December 31,
2022
Fair Value (13)
Gross
Additions (3)
Gross
Reductions (4)
December 31,
2023
Fair Value (13)
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates (Continued)
December 31, 2023
(dollars in thousands)
201
2717 MH, L.P.
LP Interests (2717
MH, L.P.)
(8)
2,222
(952)
142
7,552
2,796
4,298
6,050
LP Interests (2717
HPP-MS, L.P.) (12)
(8)
—
67
—
248
67
—
315
ASC Interests, LLC
13.00%
Secured Debt
(8)
—
—
54
400
—
—
400
13.00%
Secured Debt
(8)
—
(52)
218
1,649
1
53
1,597
Preferred Member
Units
(8)
—
88
—
—
266
—
266
Member Units
(8)
—
(700)
—
800
—
700
100
ATS Workholding, LLC
5.00%
Secured Debt
(9)
—
(486)
—
634
180
486
328
5.00%
Secured Debt
(9)
—
(518)
—
1,005
—
532
473
Preferred Member
Units
(9)
—
—
—
—
—
—
—
Barfly Ventures, LLC
7.00%
Secured Debt (12)
(5)
—
—
50
711
—
—
711
Member Units
(5)
—
820
1
3,320
820
—
4,140
Batjer TopCo, LLC
10.00%
Secured Debt (12)
(8)
—
6
2
(8)
8
—
—
10.00%
Secured Debt (12)
(8)
—
—
22
—
630
360
270
10.00%
Secured Debt
(8)
—
67
1,134
10,933
92
450
10,575
Preferred Stock
(8)
—
2,055
686
4,095
2,055
—
6,150
Bolder Panther Group, LLC
14.48%
SF+
9.11%
Secured Debt
(9)
—
(141)
14,208
99,194
141
2,779
96,556
8.00%
Class B Preferred
Member Units
(9)
—
(400)
4,065
31,420
—
400
31,020
Bridge Capital Solutions Corporation
13.00%
Secured Debt
(6)
—
—
1,162
8,813
—
—
8,813
13.00%
Secured Debt
(6)
—
—
132
1,000
—
—
1,000
Preferred Member
Units
(6)
—
—
100
1,000
—
—
1,000
Warrants
(6)
—
(21)
—
1,828
—
20
1,808
Warrants
(6)
—
(29)
—
2,512
—
30
2,482
CBT Nuggets, LLC
Member Units
(9)
—
1,130
2,902
49,002
1,128
—
50,130
Centre Technologies Holdings, LLC
SF+
9.00%
Secured Debt (12)
(8)
—
—
12
—
—
—
—
14.48%
SF+
9.00%
Secured Debt
(8)
—
62
2,315
14,954
2,620
—
17,574
Preferred Member
Units
(8)
—
2,340
120
8,700
2,340
—
11,040
Chamberlin Holding LLC
SF+
6.00%
Secured Debt (12)
(8)
—
195
45
—
—
—
—
13.49%
SF+
8.00%
Secured Debt
(8)
—
(7)
2,203
16,945
7
1,332
15,620
Member Units
(8)
—
6,400
4,182
22,920
6,400
—
29,320
Member Units
(8)
—
150
92
2,710
150
—
2,860
Charps, LLC
10.00%
Unsecured Debt
(5)
—
(35)
604
5,694
35
35
5,694
Preferred Member
Units
(5)
—
2,350
1,463
13,340
2,350
—
15,690
Colonial Electric Company LLC
Secured Debt
(6)
—
—
52
—
1,600
1,600
—
12.00%
Secured Debt
(6)
—
(319)
1,804
23,151
55
1,579
21,627
Company
Total
Rate
Base
Rate
Spread
PIK
Rate
Type of Investment
(1) (10) (11)
Geography
Amount of
Realized
Gain/(Loss)
Amount of
Unrealized
Gain/(Loss)
Amount of
Interest,
Fees or
Dividends
Credited to
Income (2)
December 31,
2022
Fair Value (13)
Gross
Additions (3)
Gross
Reductions (4)
December 31,
2023
Fair Value (13)
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates (Continued)
December 31, 2023
(dollars in thousands)
202
Preferred Member
Units
(6)
—
1,440
—
—
2,400
—
2,400
Preferred Member
Units
(6)
—
(1,480)
—
9,160
—
1,480
7,680
Compass Systems & Sales, LLC
13.50%
Secured Debt
(5)
—
—
—
—
—
—
—
13.50%
Secured Debt
(5)
—
—
608
—
17,034
—
17,034
Preferred Equity
(5)
—
—
—
—
7,454
—
7,454
Copper Trail Fund Investments
LP Interests (CTMH,
LP)
(9)
—
—
38
588
—
20
568
Digital Products Holdings LLC
15.38%
SF+
10.00%
Secured Debt
(5)
—
(67)
2,332
15,523
—
833
14,690
Preferred Member
Units
(5)
—
—
200
9,835
—
—
9,835
Garreco, LLC
9.50%
SF+
8.00%
Secured Debt
(8)
—
—
390
3,826
—
738
3,088
Member Units
(8)
—
(220)
11
1,800
—
220
1,580
Gulf Manufacturing, LLC
Member Units
(8)
—
2,280
2,832
6,790
2,280
—
9,070
Harrison Hydra-Gen, Ltd.
Common Stock
(8)
—
1,380
—
3,280
1,380
—
4,660
JorVet Holdings, LLC
12.00%
Secured Debt
(9)
—
—
3,172
25,432
51
—
25,483
Preferred Equity
(9)
—
—
825
10,741
—
—
10,741
KBK Industries, LLC
9.00%
Secured Debt
(5)
—
38
562
—
6,000
1,300
4,700
Member Units
(5)
—
7,200
9,614
15,570
7,200
—
22,770
MS Private Loan Fund I, LP
5.00%
Secured Debt (12)
(8)
—
—
25
—
—
—
—
LP Interests (12)
(8)
—
(306)
1,746
14,833
—
306
14,527
MS Private Loan Fund II, LP
8.88%
SF+
3.50%
Secured Debt (12)
(8)
—
—
515
—
23,367
—
23,367
LP Interests (12)
(8)
—
—
—
—
1,561
—
1,561
MSC Income Fund, Inc.
Common Equity
(8)
—
22
236
753
9,272
—
10,025
NAPCO Precast, LLC
Member Units
(8)
—
(100)
(40)
11,830
—
100
11,730
Nebraska Vet AcquireCo, LLC
SF+
7.00%
Secured Debt (12)
(5)
—
—
10
—
—
—
—
12.00%
Secured Debt
(5)
—
(1)
2,910
20,094
5,701
1
25,794
12.00%
Secured Debt
(5)
—
(22)
1,299
10,500
22
22
10,500
Preferred Member
Units
(5)
—
7,320
591
7,700
7,320
—
15,020
NexRev LLC
10.00%
Secured Debt (12)
(8)
—
—
—
—
—
—
—
10.00%
Secured Debt
(8)
—
2,859
1,143
8,477
2,928
1,654
9,751
Preferred Member
Units
(8)
—
5,240
665
1,110
5,240
—
6,350
NRP Jones, LLC
12.00%
Secured Debt
(5)
—
—
253
2,080
—
—
2,080
Member Units
(5)
—
(3,148)
23
4,615
—
3,149
1,466
Member Units
(5)
—
(122)
—
175
—
122
53
NuStep, LLC
11.98%
SF+
6.50%
Secured Debt
(5)
—
—
474
4,399
—
799
3,600
12.00%
Secured Debt
(5)
—
—
2,256
18,414
12
—
18,426
Preferred Member
Units
(5)
—
1,200
—
8,040
1,200
—
9,240
Company
Total
Rate
Base
Rate
Spread
PIK
Rate
Type of Investment
(1) (10) (11)
Geography
Amount of
Realized
Gain/(Loss)
Amount of
Unrealized
Gain/(Loss)
Amount of
Interest,
Fees or
Dividends
Credited to
Income (2)
December 31,
2022
Fair Value (13)
Gross
Additions (3)
Gross
Reductions (4)
December 31,
2023
Fair Value (13)
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates (Continued)
December 31, 2023
(dollars in thousands)
203
Preferred Member
Units
(5)
—
—
—
5,150
—
—
5,150
Orttech Holdings, LLC
SF+
11.00%
Secured Debt (12)
(5)
—
—
—
—
—
—
—
16.48%
SF+
11.00%
Secured Debt
(5)
—
115
3,765
23,429
171
1,560
22,040
Preferred Stock
(5)
—
5,300
1,094
11,750
5,300
—
17,050
Pearl Meyer Topco LLC
12.00%
Secured Debt (12)
(6)
—
3
370
—
3,500
—
3,500
12.00%
Secured Debt
(6)
—
44
1,552
—
20,000
—
20,000
12.00%
Secured Debt
(6)
—
(65)
3,450
28,681
65
1,065
27,681
Preferred Equity
(6)
—
830
12,110
43,260
830
—
44,090
Pinnacle TopCo, LLC
8.00%
Secured Debt (12)
(8)
—
—
26
—
444
—
444
13.00%
Secured Debt
(8)
—
—
586
—
30,339
—
30,339
Preferred Equity
(8)
—
—
—
—
12,540
—
12,540
River Aggregates, LLC
Member Units
(8)
—
90
—
3,620
90
—
3,710
Tedder Industries, LLC
12.00%
Secured Debt
(9)
—
(114)
224
1,840
—
114
1,726
12.00%
Secured Debt
(9)
—
(867)
1,858
15,120
8
866
14,262
Preferred Member
Units
(9)
—
(7,681)
—
7,681
—
7,681
—
Preferred Member
Units
(9)
—
(564)
—
—
494
494
—
Preferred Member
Units
(9)
—
(661)
—
—
661
661
—
Televerde, LLC
Member Units
(8)
—
(674)
333
5,408
—
674
4,734
Preferred Stock
(8)
—
—
—
1,794
—
—
1,794
Vision Interests, Inc.
Series A Preferred
Stock
(9)
—
—
168
3,000
—
—
3,000
VVS Holdco LLC
SF+
6.00%
Secured Debt (12)
(5)
—
—
39
(21)
21
—
—
11.50%
Secured Debt
(5)
—
—
3,468
30,161
74
2,200
28,035
Preferred Equity
(5)
—
(100)
215
11,940
400
100
12,240
Other
Amounts related to investments transferred to or from
other 1940 Act classification during the period
—
1,308
1,469
625
21,493
1,454
—
Total Control investments
$
(50,532)
$
161,793
$
197,150
$
1,703,172
$
568,452
$
244,262
$
2,006,698
Affiliate Investments
423 HAR, LP
LP Interests (423
HAR, L.P.)
(8)
$
—
$
247
$
—
$
—
$
996
$
—
$
996
AAC Holdings, Inc.
18.00%
18.00%
Secured Debt (12)
(7)
—
(1)
65
—
418
—
418
18.00%
18.00%
Secured Debt
(7)
—
(37)
2,382
11,550
2,382
37
13,895
Common Stock
(7)
—
—
—
—
—
—
—
Warrants
(7)
—
—
—
—
—
—
—
AFG Capital Group, LLC
Preferred Member
Units
(8)
7,200
(8,200)
—
9,400
7,200
16,600
—
ATX Networks Corp.
L+
7.50%
Secured Debt
(6)
—
(134)
886
6,343
575
6,918
—
Company
Total
Rate
Base
Rate
Spread
PIK
Rate
Type of Investment
(1) (10) (11)
Geography
Amount of
Realized
Gain/(Loss)
Amount of
Unrealized
Gain/(Loss)
Amount of
Interest,
Fees or
Dividends
Credited to
Income (2)
December 31,
2022
Fair Value (13)
Gross
Additions (3)
Gross
Reductions (4)
December 31,
2023
Fair Value (13)
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates (Continued)
December 31, 2023
(dollars in thousands)
204
10.00%
Unsecured Debt
(6)
—
(306)
1,160
2,598
1,160
3,758
—
Common Stock
(6)
3,248
(3,270)
—
3,270
3,248
6,518
—
BBB Tank Services, LLC
L+
11.00%
Unsecured Debt
(8)
—
—
102
800
—
800
—
L+
11.00%
Unsecured Debt
(8)
(1,400)
1,914
539
2,086
1,914
4,000
—
Member Units
(8)
(800)
800
—
—
800
800
—
15.00%
Preferred Stock (non-
voting)
(8)
(162)
162
—
—
162
162
—
Boccella Precast Products LLC
10.00%
Secured Debt
(6)
—
—
32
320
—
—
320
Member Units
(6)
—
(980)
122
2,970
—
980
1,990
Buca C, LLC
12.00%
Secured Debt
(7)
—
183
2,188
12,337
183
376
12,144
6.00%
6.00%
Preferred Member
Units
(7)
—
—
—
—
—
—
—
Career Team Holdings, LLC
11.38%
SF+
6.00%
Secured Debt (12)
(6)
—
—
40
(9)
1,340
450
881
13.00%
Secured Debt
(6)
—
—
2,612
20,090
41
225
19,906
Common Stock
(6)
—
—
—
4,500
—
—
4,500
Chandler Signs Holdings, LLC
Class A Units
(8)
1,797
(290)
60
1,790
1,797
3,587
—
Classic H&G Holdings, LLC
11.69%
SF+
6.00%
Secured Debt (12)
(6)
—
—
537
4,560
—
—
4,560
8.00%
Secured Debt
(6)
—
(43)
1,606
19,274
43
43
19,274
Preferred Member
Units
(6)
—
(8,639)
5,354
24,637
—
8,637
16,000
Congruent Credit Opportunities Funds
LP Interests
(Congruent Credit
Opportunities Fund
III, LP)
(8)
—
13
443
7,657
13
3,318
4,352
DMA Industries, LLC
12.00%
Secured Debt
(7)
—
(49)
2,518
21,200
49
2,449
18,800
Preferred Equity
(7)
—
400
—
7,260
400
—
7,660
Dos Rios Partners
LP Interests (Dos Rios
Partners, LP)
(8)
759
(539)
—
9,127
759
1,443
8,443
LP Interests (Dos Rios
Partners - A, LP)
(8)
241
(221)
—
2,898
241
508
2,631
Dos Rios Stone Products LLC
Class A Preferred
Units
(8)
—
250
—
1,330
250
—
1,580
EIG Fund Investments
LP Interests (EIG
Global Private Debt
Fund-A, L.P.)
(8)
33
—
89
1,013
176
429
760
Flame King Holdings, LLC
L+
6.50%
Secured Debt
(9)
—
(60)
484
7,600
60
7,660
—
L+
9.00%
Secured Debt
(9)
—
(162)
1,583
21,200
162
21,362
—
Preferred Equity
(9)
—
10,320
3,257
17,580
10,320
—
27,900
Freeport Financial SBIC Fund LP
LP Interests (Freeport
Financial SBIC Fund
LP) (12)
(5)
—
177
—
3,483
177
648
3,012
LP Interests (Freeport
First Lien Loan Fund
III LP) (12)
(5)
—
—
598
5,848
—
2,144
3,704
GFG Group, LLC
8.00%
Secured Debt
(5)
—
(33)
988
11,345
33
2,033
9,345
Company
Total
Rate
Base
Rate
Spread
PIK
Rate
Type of Investment
(1) (10) (11)
Geography
Amount of
Realized
Gain/(Loss)
Amount of
Unrealized
Gain/(Loss)
Amount of
Interest,
Fees or
Dividends
Credited to
Income (2)
December 31,
2022
Fair Value (13)
Gross
Additions (3)
Gross
Reductions (4)
December 31,
2023
Fair Value (13)
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates (Continued)
December 31, 2023
(dollars in thousands)
205
Preferred Member
Units
(5)
—
4,320
802
7,140
4,320
—
11,460
Hawk Ridge Systems, LLC
11.65%
SF+
6.00%
Secured Debt
(9)
—
(1)
317
3,185
6,037
7,248
1,974
12.50%
Secured Debt
(9)
—
(4)
5,094
37,800
7,460
4
45,256
Preferred Member
Units
(9)
—
—
293
17,460
—
—
17,460
Preferred Member
Units
(9)
—
—
—
920
—
—
920
Houston Plating and Coatings, LLC
8.00%
Unsecured
Convertible Debt
(8)
—
(120)
243
3,000
—
120
2,880
Member Units
(8)
—
940
84
2,400
940
—
3,340
HPEP 3, L.P.
LP Interests (HPEP 3,
L.P.) (12)
(8)
—
156
4
4,331
403
509
4,225
LP Interests (HPEP 4,
L.P.) (12)
(8)
—
—
—
2,332
1,441
—
3,773
LP Interests (423
COR, L.P.) (12)
(8)
—
469
130
1,400
469
—
1,869
I-45 SLF LLC
Member Units (Fully
diluted 20.0%;
21.75% profits
interest)
(8)
—
532
2,317
11,758
1,732
—
13,490
Independent Pet Partners Intermediate Holdings, LLC
Common Equity
(6)
—
(610)
—
—
18,300
610
17,690
Infinity X1 Holdings, LLC
13.00%
Secured Debt
(9)
—
—
1,985
—
17,853
450
17,403
Preferred Equity
(9)
—
—
125
—
4,000
—
4,000
Integral Energy Services
13.16%
SF+
7.50%
Secured Debt
(8)
—
(674)
2,374
15,769
80
1,958
13,891
10.00%
10.00%
Preferred Equity
(8)
—
73
—
—
300
—
300
Common Stock
(8)
—
(1,120)
43
1,280
—
1,120
160
Iron-Main Investments, LLC
13.50%
Secured Debt
(5)
—
—
622
4,500
7
20
4,487
13.50%
Secured Debt
(5)
—
—
547
3,130
6
214
2,922
13.50%
Secured Debt
(5)
—
—
1,217
8,944
—
—
8,944
13.50%
Secured Debt
(5)
—
—
2,706
19,559
32
88
19,503
13.50%
Secured Debt
(5)
—
—
1,806
—
10,911
638
10,273
Common Stock
(5)
—
(76)
—
1,798
958
76
2,680
ITA Holdings Group, LLC
16.59%
SF+
9.00%
2.00%
Secured Debt (12)
(8)
—
—
20
—
816
—
816
16.59%
SF+
9.00%
2.00%
Secured Debt (12)
(8)
—
—
34
—
697
—
697
15.59%
SF+
8.00%
2.00%
Secured Debt
(8)
—
—
560
—
3,430
—
3,430
17.59%
SF+
10.00%
2.00%
Secured Debt
(8)
—
—
607
—
3,430
—
3,430
Warrants
(8)
—
—
—
—
2,091
—
2,091
Johnson Downie Opco, LLC
15.00%
Secured Debt (12)
(8)
—
3
24
—
—
—
—
15.00%
Secured Debt
(8)
—
63
1,888
9,999
14,850
642
24,207
Preferred Equity
(8)
—
3,595
189
5,540
4,080
—
9,620
OnAsset Intelligence, Inc.
12.00%
12.00%
Secured Debt
(8)
—
(243)
—
569
—
243
326
12.00%
12.00%
Secured Debt
(8)
—
(248)
—
580
—
248
332
Company
Total
Rate
Base
Rate
Spread
PIK
Rate
Type of Investment
(1) (10) (11)
Geography
Amount of
Realized
Gain/(Loss)
Amount of
Unrealized
Gain/(Loss)
Amount of
Interest,
Fees or
Dividends
Credited to
Income (2)
December 31,
2022
Fair Value (13)
Gross
Additions (3)
Gross
Reductions (4)
December 31,
2023
Fair Value (13)
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates (Continued)
December 31, 2023
(dollars in thousands)
206
12.00%
12.00%
Secured Debt
(8)
—
(533)
—
1,249
—
533
716
12.00%
12.00%
Secured Debt
(8)
—
(1,112)
—
2,606
—
1,113
1,493
10.00%
10.00%
Unsecured Debt
(8)
—
—
—
305
—
—
305
7.00%
7.00%
Preferred Stock
(8)
—
—
—
—
—
—
—
Common Stock
(8)
—
—
—
—
—
—
—
Warrants
(8)
—
—
—
—
—
—
—
Oneliance, LLC
SF+
11.00%
Secured Debt
(7)
—
—
—
—
—
—
—
16.48%
SF+
11.00%
Secured Debt
(7)
—
(61)
914
5,559
12
221
5,350
Preferred Stock
(7)
—
—
—
1,056
72
—
1,128
Quality Lease Service, LLC
12.00%
Secured Debt
(8)
(29,526)
29,865
—
—
29,865
29,865
—
Preferred Member
Units
(8)
—
—
—
—
—
—
—
SI East, LLC
11.25%
Secured Debt (12)
(7)
—
17
83
—
1,875
750
1,125
12.47%
Secured Debt
(7)
—
241
4,075
—
54,536
—
54,536
9.50%
Secured Debt
(7)
—
(79)
3,885
89,786
—
89,786
—
Preferred Member
Units
(7)
—
5,213
1,196
13,650
5,520
—
19,170
Slick Innovations, LLC
14.00%
Secured Debt
(6)
—
(48)
1,887
13,840
48
2,448
11,440
Common Stock
(6)
—
780
—
1,530
780
—
2,310
Student Resource Center, LLC
8.50%
8.50%
Secured Debt
(6)
(2)
(1,694)
329
4,556
221
1,587
3,190
Preferred Equity
(6)
—
—
—
—
—
—
—
Superior Rigging & Erecting Co.
12.00%
Secured Debt
(7)
—
—
2,564
21,378
49
1,000
20,427
Preferred Member
Units
(7)
—
1,440
—
4,500
1,440
—
5,940
The Affiliati Network, LLC
13.00%
Secured Debt
(9)
—
—
30
106
2,764
2,720
150
13.00%
Secured Debt
(9)
—
(129)
1,176
9,442
34
2,129
7,347
Preferred Stock
(9)
—
—
188
6,400
—
—
6,400
Preferred Stock
(9)
—
—
—
—
172
—
172
UnionRock Energy Fund II, LP
LP Interests (12)
(9)
—
(146)
53
5,855
531
692
5,694
UnionRock Energy Fund III, LP
LP Interests (12)
(9)
—
345
—
—
2,838
—
2,838
UniTek Global Services, Inc.
15.00%
15.00%
Secured Convertible
Debt
(6)
—
(13)
312
4,592
—
703
3,889
15.00%
15.00%
Secured Convertible
Debt
(6)
(223)
1,067
66
—
2,131
223
1,908
SF+
7.50%
Secured Debt
(6)
—
22
—
382
25
407
—
SF+
7.50%
Secured Debt
(6)
—
96
275
1,712
112
1,824
—
20.00%
20.00%
Preferred Stock
(6)
—
(468)
468
2,833
468
468
2,833
20.00%
20.00%
Preferred Stock
(6)
—
1,707
—
1,991
1,707
—
3,698
19.00%
19.00%
Preferred Stock
(6)
—
—
—
—
—
—
—
13.50%
13.50%
Preferred Stock
(6)
—
—
—
—
—
—
—
Common Stock
(6)
—
—
—
—
—
—
—
Company
Total
Rate
Base
Rate
Spread
PIK
Rate
Type of Investment
(1) (10) (11)
Geography
Amount of
Realized
Gain/(Loss)
Amount of
Unrealized
Gain/(Loss)
Amount of
Interest,
Fees or
Dividends
Credited to
Income (2)
December 31,
2022
Fair Value (13)
Gross
Additions (3)
Gross
Reductions (4)
December 31,
2023
Fair Value (13)
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates (Continued)
December 31, 2023
(dollars in thousands)
207
Universal Wellhead Services Holdings, LLC
14.00%
14.00%
Preferred Member
Units
(8)
—
(70)
—
220
—
70
150
Member Units
(8)
—
—
—
—
—
—
—
World Micro Holdings, LLC
13.00%
Secured Debt
(7)
—
—
1,895
14,140
45
2,157
12,028
Preferred Equity
(7)
—
—
226
3,845
—
—
3,845
Other
Amounts related to investments transferred to or from
other 1940 Act classification during the period
106
(1,308)
(1,469)
(625)
1,454
21,493
—
Total Affiliate investments
$
(18,729)
$
33,689
$
69,829
$
618,359
$
246,241
$
270,262
$
615,002
Company
Total
Rate
Base
Rate
Spread
PIK
Rate
Type of Investment
(1) (10) (11)
Geography
Amount of
Realized
Gain/(Loss)
Amount of
Unrealized
Gain/(Loss)
Amount of
Interest,
Fees or
Dividends
Credited to
Income (2)
December 31,
2022
Fair Value (13)
Gross
Additions (3)
Gross
Reductions (4)
December 31,
2023
Fair Value (13)
____________________
(1) The principal amount, the ownership detail for equity investments and if the investment is income producing is included in the Consolidated Schedule of
Investments included in Item 8. Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
(2) Represents the total amount of interest, fees and dividends credited to income for the portion of the period for which an investment was included in Control or
Affiliate categories, respectively. For investments transferred between Control and Affiliate categories during the period, any income or investment balances related
to the time period it was in the category other than the one shown at period end is included in “Amounts related to investments transferred from other 1940 Act
classifications during the period.”
(3) Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments and accrued PIK interest, and the
exchange of one or more existing securities for one or more new securities. Gross additions also include net increases in unrealized appreciation or net decreases in
net unrealized depreciation as well as the movement of an existing portfolio company into this category and out of a different category.
(4) Gross reductions include decreases in the cost basis of investments resulting from principal repayments or sales and the exchange of one or more existing securities
for one or more new securities. Gross reductions also include net increases in net unrealized depreciation or net decreases in unrealized appreciation as well as the
movement of an existing portfolio company out of this category and into a different category.
(5) Portfolio company located in the Midwest region as determined by location of the corporate headquarters. The fair value as of December 31, 2023 for control
investments located in this region was $513,943. This represented 20.7% of net assets as of December 31, 2023. The fair value as of December 31, 2023 for
affiliate investments located in this region was $76,330. This represented 3.1% of net assets as of December 31, 2023.
(6) Portfolio company located in the Northeast region and Canada as determined by location of the corporate headquarters. The fair value as of December 31, 2023 for
control investments located in this region was $268,905. This represented 10.9% of net assets as of December 31, 2023. The fair value as of December 31, 2023 for
affiliate investments located in this region was $114,389. This represented 4.6% of net assets as of December 31, 2023.
(7) Portfolio company located in the Southeast region as determined by location of the corporate headquarters. The fair value as of December 31, 2023 for control
investments located in this region was $52,278. This represented 2.1% of net assets as of December 31, 2023. The fair value as of December 31, 2023 for affiliate
investments located in this region was $176,466. This represented 7.1% of net assets as of December 31, 2023.
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates (Continued)
December 31, 2023
(dollars in thousands)
208
(8) Portfolio company located in the Southwest region as determined by location of the corporate headquarters. The fair value as of December 31, 2023 for control
investments located in this region was $767,606. This represented 31.0% of net assets as of December 31, 2023. The fair value as of December 31, 2023 for
affiliate investments located in this region was $110,303. This represented 4.5% of net assets as of December 31, 2023.
(9) Portfolio company located in the West region as determined by location of the corporate headquarters. The fair value as of December 31, 2023 for control
investments located in this region was $403,966. This represented 16.3% of net assets as of December 31, 2023. The fair value as of December 31, 2023 for
affiliate investments located in this region was $137,514. This represented 5.6% of net assets as of December 31, 2023.
(10)All of the Company’s portfolio investments are generally subject to restrictions on resale as “restricted securities,” unless otherwise noted.
(11)This schedule should be read in conjunction with the Consolidated Schedule of Investments and Notes to the Consolidated Financial Statements included in Item 8.
Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K. Supplemental information can be located within the
Consolidated Schedule of Investments including end of period interest rate, preferred dividend rate, maturity date, investments not paid currently in cash and
investments whose value was determined using significant unobservable inputs.
(12)Investment has an unfunded commitment as of December 31, 2023 (see Note K — Commitments and Contingencies in Item 8. Consolidated Financial Statements
and Supplementary Data of this Annual Report on Form 10-K). The fair value of the investment includes the impact of the fair value of any unfunded
commitments.
(13)Negative fair value is the result of the capitalized discount being greater than the principal amount outstanding on the loan.
Table of contents
Schedule 12-14
MAIN STREET CAPITAL CORPORATION
Consolidated Schedule of Investments In and Advances to Affiliates (Continued)
December 31, 2023
(dollars in thousands)
209
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
Item 9A. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this annual report
on Form 10-K, we carried out an evaluation, under the supervision and with the participation of our management, including
our Chief Executive Officer, President, Chief Financial Officer, General Counsel and Chief Accounting Officer, of our
disclosure controls and procedures (as defined in Rule 13a-15 of the Exchange Act). Based on that evaluation, our Chief
Executive Officer, President, Chief Financial Officer, General Counsel and Chief Accounting Officer have concluded that
our current disclosure controls and procedures are effective in timely alerting them of material information relating to us
that is required to be disclosed in the reports we file or submit under the Exchange Act.
(b) Management’s Report on Internal Control Over Financial Reporting. The management of Main Street Capital
Corporation and its subsidiaries (the Company) is responsible for establishing and maintaining adequate internal control
over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the
participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted
an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the criteria
established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO). Based on the Company’s evaluation under the framework in Internal Control —
Integrated Framework, management concluded that the Company’s internal control over financial reporting was effective
as of December 31, 2024. Grant Thornton LLP, the Company’s independent registered public accounting firm, has issued
an attestation report on the effectiveness of the Company’s internal control over financial reporting as of December 31,
2024, as stated in its report which is included herein.
(c) Attestation Report of the Registered Public Accounting Firm. Our independent registered public accounting
firm, Grant Thornton LLP, has issued an attestation report on the effectiveness of our internal control over financial
reporting, which is set forth above in Reports of Independent Registered Public Accounting Firm in Item 8. Consolidated
Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
(d) Changes in Internal Control over Financial Reporting. There have been no changes in our internal control
over financial reporting that occurred during the fiscal quarter ended December 31, 2024 that have materially affected, or
are reasonably likely to materially affect, our internal control over financial reporting.
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210
Item 9B. Other Information
Fees and Expenses
The following table is being provided to update, as of December 31, 2024, certain information in the Company’s
effective shelf registration statement on Form N-2 (File No. 333-263258) filed with the SEC on March 3, 2022 as
supplemented by the prospectus supplements relating to our ATM Program and to the direct stock purchase feature of the
Plan. The information is intended to assist you in understanding the costs and expenses that an investor in the Company
will bear directly or indirectly. We caution you that some of the percentages indicated in the table below are estimates and
may vary. Except where the context suggests otherwise, whenever this Annual Report on Form 10-K contains a reference
to fees or expenses paid by “you,” “us” or “Main Street,” or that “we” will pay fees or expenses, stockholders will
indirectly bear such fees or expenses as investors in us.
Stockholder Transaction Expenses:
Sales load (as a percentage of offering price)
— % (1)
Offering expenses (as a percentage of offering price)
— % (2)
Dividend reinvestment and direct stock purchase plan expenses
— % (3)
Total stockholder transaction expenses (as a percentage of offering price)
— % (4)
Annual Expenses of the Company (as a percentage of net assets attributable to common stock):
Operating expenses
3.06 % (5)
Interest payments on borrowed funds
4.72 % (6)
Income tax expense
1.09 % (7)
Acquired fund fees and expenses
0.16 % (8)
Total annual expenses
9.03 %
___________________________
(1) The maximum agent commission with respect to the shares of our common stock sold by us in the ATM Program is
1.00%. Purchasers of shares of common stock through the direct stock purchase feature of the Plan will not pay any
sales load. In the event that our securities are sold to or through underwriters, a corresponding prospectus or prospectus
supplement will disclose the applicable sales load.
(2) Estimated offering expenses payable by us for the estimated duration of the ATM Program are $0.2 million. In the
event that we conduct an offering of our securities, a corresponding prospectus or prospectus supplement will disclose
the estimated offering expenses.
(3) The expenses of administering the Plan are included in operating expenses. Additional costs may be charged to
participants in the direct stock purchase feature of the plan for certain types of transactions.
(4) Total stockholder transaction expenses may include sales load and will be disclosed in a future prospectus or
prospectus supplement, if any.
(5) Operating expenses in this table represent our estimated expenses.
(6) Interest payments on borrowed funds represent our estimated annual interest payments on borrowed funds based on
current debt levels as adjusted for projected increases (but not decreases) in debt levels over the next twelve months.
(7) Income tax expense relates to the accrual of (a) deferred tax provision (benefit) primarily related to loss carryforwards,
timing differences in net unrealized appreciation or depreciation and other temporary book-tax differences from our
portfolio investments held in Taxable Subsidiaries and (b) excise, state and other taxes. Deferred taxes are non-cash in
nature and may vary significantly from period to period. We are required to include deferred taxes in calculating our
annual expenses even though deferred taxes are not currently payable or receivable. Due to the variable nature of
deferred tax expense, which can be a large portion of the income tax expense, and the difficulty in providing an
estimate for future periods, this income tax expense estimate is based upon the actual amount of income tax expense
for the year ended December 31, 2024.
(8) Acquired fund fees and expenses represent the estimated indirect expense incurred due to investments in other
investment companies and private funds.
Table of contents
211
Example
The following example demonstrates the projected dollar amount of total cumulative expenses that would be
incurred over various periods with respect to a hypothetical investment in our common stock. In calculating the following
expense amounts, we have assumed we would have no additional leverage and that our annual operating expenses would
remain at the levels set forth in the table above and that you would pay a sales load of up to 1.00% (the commission to be
paid by us with respect to common stock sold by us in the ATM Program).
1 Year
3 Years
5 Years
10 Years
You would pay the following expenses on a $1,000 investment,
assuming a 5.0% annual return and no sales load
$
88 $
255 $
408 $
740
You would pay the following expenses on a $1,000 investment,
assuming a 5.0% annual return and a 1.00% sales load
$
98 $
262 $
414 $
743
The example and the expenses in the table above should not be considered a representation of our future
expenses, and actual expenses may be greater or less than those shown. While the example assumes, as required by the
SEC, a 5.0% annual return, our performance will vary and may result in a return greater or less than 5.0%. In addition,
while the example assumes reinvestment of all dividends at NAV, participants in our dividend reinvestment plan will
receive a number of shares of our common stock, determined by dividing the total dollar amount of the dividend payable to
a participant by (i) the market price per share of our common stock at the close of trading on a valuation date determined
by our Board of Directors for each dividend in the event that we use newly issued shares to satisfy the share requirements
of the dividend reinvestment plan or (ii) the average purchase price of all shares of common stock purchased by the plan
administrator in the event that shares are purchased in the open market to satisfy the share requirements of the dividend
reinvestment plan, which may be at, above or below NAV. See the description in Item 5. Market for Registrant’s Common
Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Dividend/Distribution Policy for
additional information regarding our dividend reinvestment plan.
Rule 10b5-1 Trading Plans
During the fiscal quarter ended December 31, 2024, none of our directors or officers adopted or terminated any
contract, instruction or written plans for the purchase or sale of our securities to satisfy the affirmative defense conditions
of Exchange Act Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this Item will be contained in the definitive proxy statement relating to our 2025
Annual Meeting of Stockholders (the “Proxy Statement”) under the headings “Election of Directors,” “Corporate
Governance” and “Officers” to be filed with the Securities and Exchange Commission on or prior to April 30, 2025, and is
incorporated herein by reference.
We have adopted a code of business conduct and ethics that applies to directors, officers and employees of Main
Street. This code of ethics is published on our website at www.mainstcapital.com. We intend to disclose any substantive
amendments to, or waivers from, this code of conduct within four business days of the waiver or amendment through a
posting on our website.
Item 11. Executive Compensation
The information required by this Item will be contained in the Proxy Statement under the headings “Compensation
of Executive Officers,” “Compensation of Directors,” “Compensation Discussion and Analysis,” “Corporate Governance
— Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report,” to be filed with
the Securities and Exchange Commission on or prior to April 30, 2025, and is incorporated herein by reference.
Table of contents
212
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table provides information regarding our equity compensation plans as of December 31, 2024:
Plan Category
Number of Securities to be
Issued Upon Exercise of
Outstanding Options,
Warrants and Rights
Weighted-Average Exercise
Price of Outstanding
Options, Warrants and
Rights
Number of securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(Excluding Securities
Reflected in Column)
Equity compensation plans approved by
security holders (1)
$
— $
— $
4,240,328
Equity compensation plans not approved
by security holders (2)
187,350
—
—
Total
$
187,350 $
— $
4,240,328
___________________________
(1) Consists of our Main Street Capital Corporation 2022 Equity and Incentive Plan and our Main Street Capital
Corporation 2022 Non-Employee Director Restricted Stock Plan. As of December 31, 2024, we had issued 1,092,663
shares of restricted stock pursuant to these plans, of which 182,222 shares had vested and 32,991 shares were forfeited.
Pursuant to each of these plans, if any award issued thereunder shall for any reason expire or otherwise terminate or be
forfeited, in whole or in part, the shares of stock not acquired under such award shall revert to and again become
available for issuance under such plan. For more information regarding these plans, see Note J — Share-Based
Compensation to the consolidated financial statements included in Item 8. Consolidated Financial Statements and
Supplementary Data of this Annual Report on Form 10-K.
(2) Consists of our 2015 Deferred Compensation Plan. For more information regarding this plan, see Note L — Related
Party Transactions to the consolidated financial statements included in Item 8. Consolidated Financial Statements and
Supplementary Data of this Annual Report on Form 10-K.
The other information required by this Item will be contained in the Proxy Statement under the heading “Security
Ownership of Certain Beneficial Owners and Management,” to be filed with the Securities and Exchange Commission on
or prior to April 30, 2025, and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item will be contained in the Proxy Statement under the headings “Certain
Relationships and Related Party Transactions” and “Corporate Governance,” to be filed with the Securities and Exchange
Commission on or prior to April 30, 2025, and is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services
The information required by this Item will be contained in the Proxy Statement under the heading “Ratification of
Appointment of Independent Registered Public Accounting Firm for Year Ending December 31, 2025,” to be filed with the
Securities and Exchange Commission on or prior to April 30, 2025, and is incorporated herein by reference.
Table of contents
213
PART IV
Item 15. Exhibits and Consolidated Financial Statement Schedules
The following documents are filed or incorporated by reference as part of this Annual Report:
1.
Consolidated Financial Statements
Reports of Independent Registered Public Accounting Firm (PCAOB ID Number 248)
69
Consolidated Balance Sheets—As of December 31, 2024 and 2023
72
Consolidated Statements of Operations—For the years ended December 31, 2024, 2023 and 2022
73
Consolidated Statements of Changes in Net Assets—For the years ended December 31, 2024, 2023 and 2022
74
Consolidated Statements of Cash Flows—For the years ended December 31, 2024, 2023 and 2022
75
Consolidated Schedule of Investments—December 31, 2024
76
Consolidated Schedule of Investments—December 31, 2023
108
Notes to Consolidated Financial Statements
141
2.
Consolidated Financial Statement Schedule
Schedule of Investments in and Advances to Affiliates for the Years Ended December 31, 2024 and 2023
188
3.
Exhibits
Listed below are the exhibits which are filed as part of this report (according to the number assigned to them in
Item 601 of Regulation S-K):
3.1*
Articles of Amendment and Restatement of Main Street Capital Corporation (previously filed as Exhibit (a)
to Main Street Capital Corporation’s Pre-Effective Amendment No. 2 to the Registration Statement on Form
N-2 filed on August 15, 2007 (File No. 333-142879))
3.2*
Amended and Restated Bylaws of Main Street Capital Corporation (previously filed as Exhibit 3.1 to Main
Street Capital Corporation’s Current Report on Form 8-K filed on March 6, 2013 (File No. 814-00746))
4.1*
Form of Common Stock Certificate (previously filed as Exhibit (d) to Main Street Capital Corporation’s Pre-
Effective Amendment No. 2 to the Registration Statement on Form N-2 filed on August 15, 2007 (File No.
333-142879))
4.2*
Dividend Reinvestment and Direct Stock Purchase Plan, effective May 10, 2019 (previously filed as Exhibit
99.1 to Main Street Capital Corporation’s Current Report on Form 8-K filed on May 10, 2019 (File No.
814-00746))
4.3*
Main Street Mezzanine Fund, LP SBIC debentures guaranteed by the SBA (previously filed as Exhibit (f)(1)
to Main Street Capital Corporation’s Pre-Effective Amendment No. 1 to the Registration Statement on Form
N-2 filed on June 22, 2007 (File No. 333-142879))
4.4*
Main Street Capital III, LP SBIC debentures guaranteed by the SBA (see Exhibit (f)(1) to Main Street
Capital Corporation’s Pre-Effective Amendment No. 1 to the Registration Statement on Form N-2 filed on
June 22, 2007 for a substantially identical copy of the form of debentures)
4.5*
Form of Indenture between Main Street Capital Corporation and The Bank of New York Mellon Trust
Company, N.A. (previously filed as Exhibit (d)(6) to Main Street Capital Corporation’s Post-Effective
Amendment No. 2 to the Registration Statement on Form N-2 filed on March 28, 2013 (File No.
333-183555))
4.6*
Fifth Supplemental Indenture relating to the July 2026 Notes, dated January 14, 2021, between Main Street
Capital Corporation and The Bank of New York Mellon Trust Company, N.A., as trustee (previously filed as
Exhibit 4.1 to Main Street Capital Corporation’s Current Report on Form 8-K filed on January 14, 2021
(File No. 814-00746))
4.7*
Form of July 2026 Notes (contained in the Fifth Supplemental Indenture incorporated by reference as
Exhibit 4.6 hereto)
4.8*
Sixth Supplemental Indenture relating to the March 2029 Notes, dated January 12, 2024, between Main
Street Capital Corporation and The Bank of New York Mellon Trust Company, N.A., as trustee (previously
filed as Exhibit 4.1 to Main Street Capital Corporation’s Current Report on Form 8-K filed on January 12,
2024 (File No. 814-00746))
Exhibit
Number
Description
Table of contents
214
4.9*
Form of March 2029 Notes (contained in the Sixth Supplemental Indenture incorporated by reference as
Exhibit 4.8 hereto)
4.10*
Seventh Supplemental Indenture, dated June 4, 2024, between Main Street Capital Corporation and The
Bank of New York Mellon Trust Company, N.A., as trustee (previously filed as Exhibit 4.1 to Main Street
Capital Corporation’s Current Report on Form 8-K filed on June 4, 2024 (File No. 814-00746))
4.11*
Form of June 2027 Notes (contained in the Seventh Supplemental Indenture incorporated by reference as
Exhibit 4.10 hereto)
4.12*
Description of Main Street Capital Corporation’s securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934 (previously filed as Exhibit 4.11 to Main Street Capital Corporation’s
Annual Report on Form 10-K filed on February 28, 2020 (File No. 814-00746))
10.1*
Omnibus Amendment No. 1, dated as of April 7, 2021, by and among Main Street Capital Corporation, the
guarantors party thereto, Truist Bank, as administrative agent, solely with respect to Section 2 thereof, the
withdrawing lender, and the lenders party thereto (previously filed as Exhibit 10.1 to Main Street Capital
Corporation’s Current Report on Form 8-K filed on April 8, 2021 (File No. 814-00746))
10.2*
Third Amended and Restated General Security Agreement dated June 5, 2018 (previously filed as Exhibit
10.2 to Main Street Capital Corporation’s Current Report on Form 8-K filed on June 6, 2018 (File No.
814-00746))
10.3*
Third Amended and Restated Equity Pledge Agreement dated June 5, 2018 (previously filed as Exhibit 10.3
to Main Street Capital Corporation’s Current Report on Form 8-K filed on June 6, 2018 (File No.
814-00746))
10.4*
Amended and Restated Custodial Agreement dated September 20, 2010 (previously filed as Exhibit 10.3 to
Main Street Capital Corporation’s Current Report on Form 8-K filed September 21, 2010 (File No.
814-00746))
10.5*
Third Amendment to Amended and Restated Credit Agreement and First Amendment to Amended and
Restated Custodial Agreement dated November 21, 2011 (previously filed as Exhibit 10.1 to Main Street
Capital Corporation’s Current Report on Form 8-K filed November 22, 2011 (File No. 814-00746))
10.6*
Third Amendment, dated as of August 4, 2022, to the Third Amended and Restated Credit Agreement by
and among Main Street Capital Corporation, the guarantors party thereto, Truist Bank, as administrative
agent, and the lenders party thereto (previously filed as Exhibit 10.1 to Main Street Capital Corporation’s
Current Report on Form 8-K filed on August 4, 2022 (File No. 814-00746))
10.7*
Fourth Amendment, dated as of December 22, 2022, to the Third Amended and Restated Credit Agreement
by and among Main Street Capital Corporation, the guarantors party thereto, Truist Bank, as administrative
agent, and the lenders party thereto (previously filed as Exhibit 10.2 to Main Street Capital Corporation’s
Current Report on Form 8-K filed on December 28, 2022 (File No. 814-00746))
10.8*
Joinder Agreement and Supplement, dated January 13, 2023, to the Third Amended and Restated Credit
Agreement (previously filed as Exhibit 10.8 to Main Street Capital Corporation’s Annual Report on Form
10-K filed on February 24, 2023 (File No. 814-00746))
10.9*
Response to Notice of Increase Request, dated July 26, 2023, by and among Main Street Capital Corporation
and Sumitomo Mitsui Banking Corporation (previously filed as Exhibit 10.1 to Main Street Capital
Corporation’s Quarterly Report on Form 10-Q filed on August 4, 2023 (File No. 814-00746))
10.10*
Fifth Amendment, dated May 26, 2024, to Third Amended and Restated Credit Agreement by and among
Main Street Capital Corporation, the guarantors party thereto, Truist Bank, as administrative agent, and the
lenders party thereto (previously filed as Exhibit 99.1 to Main Street Capital Corporation’s Current Report
on Form 8-K filed on May 30, 2024 (File No. 814-00746))
10.11*
Sixth Amendment, dated as of June 27, 2024, to the Third Amended and Restated Credit Agreement by and
among Main Street Capital Corporation, the guarantors party thereto, Truist Bank, as administrative agent,
and the lenders party thereto (previously filed as Exhibit 10.1 to Main Street Capital Corporation’s Current
Report on Form 8-K filed on June 28, 2024 (File No. 814-00746))
10.12*
Revolving Credit and Security Agreement, dated as of November 22, 2022, among MSCC Funding I, LLC,
as the borrower, Main Street Capital Corporation, as the collateral manager, the lenders party from time to
time thereto, Truist Bank, as administrative agent and swingline lender, Citibank N.A., as collateral agent,
document custodian and custodian and Virtus Group, L.P. as collateral administrator (previously filed as
Exhibit 10.1 to Main Street Capital Corporation’s Current Report on Form 8-K filed on November 28, 2022
(File No. 814-00746))
Exhibit
Number
Description
Table of contents
215
10.13*
Purchase and Contribution Agreement, dated as of November 22, 2022, among Main Street Capital
Corporation, as the seller, and MSCC Funding I, LLC, as the buyer (previously filed as Exhibit 10.2 to Main
Street Capital Corporation’s Current Report on Form 8-K filed on November 28, 2022 (File No.
814-00746))
10.14*
Lender Joinder Agreement, dated December 6, 2022, to the Revolving Credit and Security Agreement
(previously filed as Exhibit 10.1 to Main Street Capital Corporation’s Current Report on Form 8-K filed on
December 6, 2022 (File No. 814-00746))
10.15*
First Amendment to Credit Agreement, dated as of February 2, 2023, among MSCC Funding I, LLC, as the
borrower, Main Street Capital Corporation, as the collateral manager, the lenders party thereto, Truist Bank,
as administrative agent and swingline lender, Citibank N.A., as collateral agent document custodian and
custodian and Virtus Group, L.P., as collateral administrator (previously filed as Exhibit 10.12 to Main
Street Capital Corporation’s Annual Report on Form 10-K filed on February 24, 2023 (File No. 814-00746))
10.16*
Western Alliance Joinder Agreement, dated October 5, 2023 (previously filed as Exhibit 10.1 to Main Street
Capital Corporation’s Current Report on Form 8-K filed on October 12, 2023 (File No. 814-00746))
10.17*
EverBank Joinder Agreement, dated October 12, 2023 (previously filed as Exhibit 10.1 to Main Street
Capital Corporation’s Current Report on Form 8-K filed on October 13, 2023 (File No. 814-00746))
10.18*
Second Amendment, dated as of September 26, 2024, to Credit Agreement by and among MSCC Funding I,
LLC, as the borrower, Main Street Capital Corporation, as the collateral manager, the lenders from time to
time party thereto, Truist Bank, as administrative agent and swingline lender, Citibank, N.A., as collateral
agent, document custodian and custodian, and Virtus Group, L.P., as collateral administrator (previously
filed as Exhibit 10.1 to Main Street Capital Corporation’s Current Report on Form 8-K filed on October 1,
2024 (File No. 814-00746))
10.19*
Note Purchase Agreement, dated as of December 23, 2022, by and among Main Street Capital Corporation
and the Purchasers party thereto (previously filed as Exhibit 10.1 to Main Street Capital Corporation’s
Current Report on Form 8-K filed on December 27, 2022 (File No. 814-00746))
10.20*
First Supplement to Note Purchase Agreement, dated as of February 2, 2023, by and among Main Street
Capital Corporation and the Purchasers party thereto (previously filed as Exhibit 10.14 to Main Street
Capital Corporation’s Annual Report on Form 10-K filed on February 24, 2023 (File No. 814-00746))
10.21*†
Main Street Capital Corporation 2022 Equity and Incentive Plan (previously filed as Exhibit 4.4 to Main
Street Capital Corporation’s Registration Statement on Form S-8 filed on May 3, 2022 (File No.
333-264643))
10.22*†
Main Street Capital Corporation 2022 Non-Employee Director Restricted Stock Plan (previously filed as
Exhibit 4.5 to Main Street Capital Corporation’s Registration Statement on Form S-8 filed on May 3, 2022
(File No. 333-264643))
10.23*†
Form of Restricted Stock Agreement for Executive Officers — Main Street Capital Corporation 2022 Equity
and Incentive Plan (previously filed as Exhibit 4.6 to Main Street Capital Corporation’s Registration
Statement on Form S-8 filed on May 3, 2022 (File No. 333-264643))
10.24*†
Form of Restricted Stock Agreement for Non-Employee Directors — Main Street Capital Corporation 2022
Non-Employee Director Restricted Stock Plan (previously filed as Exhibit 4.7 to Main Street Capital
Corporation’s Registration Statement on Form S-8 filed on May 3, 2022 (File No. 333-264643))
10.25*
Custody Agreement, dated September 17, 2007, by and between Main Street Capital Corporation and
Amegy Bank National Association (previously filed as Exhibit (j) to Main Street Capital Corporation’s Pre-
Effective Amendment No. 3 to the Registration Statement on Form N-2 filed on September 21, 2007 (File
No. 333-142879))
10.26*†
Form of Confidentiality and Non-Compete Agreement by and between Main Street Capital Corporation and
Vincent D. Foster (previously filed as Exhibit (k)(12) to Main Street Capital Corporation’s Pre-Effective
Amendment No. 3 to the Registration Statement on Form N-2 filed on September 21, 2007 (File No.
333-142879))
10.27*†
Form of Indemnification Agreement by and between Main Street Capital Corporation and each executive
officer and director (previously filed as Exhibit (k)(13) to Main Street Capital Corporation’s Pre-Effective
Amendment No. 3 to the Registration Statement on Form N-2 filed on September 21, 2007 (File No.
333-142879))
10.28
Amended and Restated Investment Advisory and Administrative Services Agreement, dated January 29,
2025, between MSC Income Fund, Inc. and MSC Adviser I, LLC
10.29*†
Main Street Capital Corporation Deferred Compensation Plan Adoption Agreement and Plan Document
(previously filed as Exhibit 4.1 to Main Street Capital Corporation’s Registration Statement on Form S-8
filed on December 18, 2015 (File No. 333-208643))
Exhibit
Number
Description
Table of contents
216
10.30*
Form of Equity Distribution Agreement dated March 3, 2022 (previously filed as Exhibit 1.1 to Main Street
Capital Corporation’s Current Report on Form 8-K filed on March 4, 2022 (File No. 814-00746))
14.1*
Code of Business Conduct and Ethics (previously filed as Exhibit 14.1 to Main Street Capital Corporation’s
Annual Report on Form 10-K filed on February 24, 2023 (File No. 814-00746))
19.1
Insider Trading Policy
21.1*
List of Subsidiaries (previously file as Exhibit 21.1 to Main Street Capital Corporation's Annual Report on
Form 10-K filed on February 23, 2024 (File No. 814-00746))
23.1
Consent of Grant Thornton LLP, independent registered public accounting firm
31.1
Rule 13a-14(a)/15d-14(a) certification of Chief Executive Officer
31.2
Rule 13a-14(a)/15d-14(a) certification of Chief Financial Officer
32.1**
Section 1350 certification of Chief Executive Officer
32.2**
Section 1350 certification of Chief Financial Officer
97.1*
Main Street Capital Corporation Clawback Policy, effective December 1, 2023 (previously filed as Exhibit
97.1 to Main Street Capital Corporation’s Annual Report on Form 10-K filed on February 23, 2024 (File No.
814-00746))
99.1
1940 Act Code of Ethics
99.2
Rule 12d1-4 Fund of Funds Investment Agreement, dated January 20, 2025, by and between Main Street
Capital Corporation and MSC Income Fund, Inc.
101
The following financial information from our Annual Report on Form 10-K for the fiscal year 2024, filed
with the SEC on February 28, 2025, formatted in Inline Extensible Business Reporting Language (iXBRL):
(i) the Consolidated Balance Sheets as of December 31, 2024 and 2023, (ii) the Consolidated Statements of
Operations for the years ended December 31, 2024, 2023 and 2022, (iii) the Consolidated Statements of
Changes in Net Assets for the periods ended December 31, 2024, 2023 and 2022, (iv) the Consolidated
Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022, (v) the Consolidated
Schedule of Investments for the periods ended December 31, 2024 and 2023, (vi) the Notes to Consolidated
Financial Statements and (vii) the Consolidated Schedule 12-14 for the years ended December 31, 2024 and
2023.
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
Exhibit
Number
Description
___________________________
*
Exhibit previously filed with the Securities and Exchange Commission, as indicated, and incorporated herein by
reference.
**
Furnished herewith.
†
Management contract or compensatory plan or arrangement.
Table of contents
217
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
MAIN STREET CAPITAL CORPORATION
By:
/s/ DWAYNE L. HYZAK
Dwayne L. Hyzak
Chief Executive Officer and Director
Date: February 28, 2025
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ DWAYNE L. HYZAK
Chief Executive Officer and Director
February 28, 2025
Dwayne L. Hyzak
(principal executive officer)
/s/ RYAN R. NELSON
Chief Financial Officer
February 28, 2025
Ryan R. Nelson
(principal financial officer)
/s/ RYAN H. MCHUGH
Chief Accounting Officer
February 28, 2025
Ryan H. McHugh
(principal accounting officer)
/s/ VINCENT D. FOSTER
Chairman of the Board
February 28, 2025
Vincent D. Foster
/s/ J. KEVIN GRIFFIN
Director
February 28, 2025
J. Kevin Griffin
/s/ JOHN E. JACKSON
Director
February 28, 2025
John E. Jackson
/s/ BRIAN E. LANE
Director
February 28, 2025
Brian E. Lane
/s/ DUNIA A. SHIVE
Director
February 28, 2025
Dunia A. Shive
/s/ STEPHEN B. SOLCHER
Director
February 28, 2025
Stephen B. Solcher
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218