Document
Table of Contents


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
__________________________________________________________
Form 10-Q
__________________________________________________________
(Mark One)
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2017
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission file number 814-00733 
__________________________________________________________
Triangle Capital Corporation
(Exact name of registrant as specified in its charter)
__________________________________________________________
Maryland
 
06-1798488
(State or other jurisdiction of
 
(I.R.S. Employer
incorporation or organization)
 
Identification No.)
 
 
3700 Glenwood Avenue, Suite 530
Raleigh, North Carolina
 
27612
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (919) 719-4770
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report: N/A 
__________________________________________________________
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
ý
Accelerated filer
¨
Non-accelerated filer
¨  (Do not check if a smaller reporting company)
Smaller reporting company
¨
 
 
Emerging growth company
¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
   ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý
The number of shares outstanding of the registrant’s Common Stock on May 3, 2017 was 47,681,397.




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

 
 
Page
PART I – FINANCIAL INFORMATION
Item 1.
 
 
 
 
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
 
PART II – OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
 


2



PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.
TRIANGLE CAPITAL CORPORATION
Consolidated Balance Sheets
 
March 31, 2017
 
December 31, 2016
 
(Unaudited)
 
 
Assets:
 
 
 
Investments at fair value:
 
 
 
Non-Control / Non-Affiliate investments (cost of $948,873,881 and $888,974,154 as of March 31, 2017 and December 31, 2016, respectively)
$
922,229,496

 
$
857,604,639

Affiliate investments (cost of $199,044,196 and $162,539,224 as of March 31, 2017 and December 31, 2016, respectively)
192,981,537

 
161,510,773

Control investments (cost of $42,926,673 and $45,418,113 as of March 31, 2017 and December 31, 2016, respectively)
17,997,769

 
18,791,769

Total investments at fair value
1,133,208,802

 
1,037,907,181

Cash and cash equivalents
90,603,276

 
107,087,663

Interest, fees and other receivables
5,494,514

 
10,189,788

Prepaid expenses and other current assets
1,848,178

 
1,659,570

Deferred financing fees
3,001,250

 
2,699,960

Property and equipment, net
107,211

 
106,494

Total assets
$
1,234,263,231

 
$
1,159,650,656

Liabilities:
 
 
 
Accounts payable and accrued liabilities
$
3,301,982

 
$
6,797,244

Interest payable
1,559,113

 
3,996,940

Taxes payable

 
489,691

Deferred income taxes
570,505

 
2,053,701

Borrowings under credit facility
91,090,267

 
127,011,475

Notes
162,914,760

 
162,755,381

SBA-guaranteed debentures payable
245,619,315

 
245,389,966

Total liabilities
505,055,942

 
548,494,398

Commitments and contingencies (Note 7)
 
 
 
Net Assets:
 
 
 
Common stock, $0.001 par value per share (150,000,000 shares authorized, 47,681,397 and 40,401,292 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively)
47,681

 
40,401

Additional paid-in capital
819,123,942

 
686,835,054

Investment income in excess of distributions
2,265,568

 
5,884,512

Accumulated realized losses
(37,530,553
)
 
(24,211,594
)
Net unrealized depreciation
(54,699,349
)
 
(57,392,115
)
Total net assets
729,207,289

 
611,156,258

Total liabilities and net assets
$
1,234,263,231

 
$
1,159,650,656

Net asset value per share
$
15.29

 
$
15.13


See accompanying notes.


3



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Operations
 
Three Months
Ended
 
Three Months
Ended
 
March 31,
2017
 
March 31,
2016
Investment income:
 
 
 
Interest income:
 
 
 
Non-Control / Non-Affiliate investments
$
20,470,837

 
$
18,182,654

Affiliate investments
3,372,135

 
3,384,369

Control investments
269,536

 
193,616

Total interest income
24,112,508

 
21,760,639

Dividend income:
 
 
 
Non-Control / Non-Affiliate investments
281,229

 
(1,246,760
)
Affiliate investments

 
160,055

Total dividend income
281,229

 
(1,086,705
)
Fee and other income:
 
 
 
Non-Control / Non-Affiliate investments
1,917,238

 
1,623,886

Affiliate investments
300,264

 
310,015

Control investments
100,000

 
100,000

Total fee and other income
2,317,502

 
2,033,901

Payment-in-kind interest income:
 
 
 
Non-Control / Non-Affiliate investments
2,639,382

 
2,921,604

Affiliate investments
738,466

 
989,213

Total payment-in-kind interest income
3,377,848

 
3,910,817

Interest income from cash and cash equivalents
101,683

 
37,218

Total investment income
30,190,770

 
26,655,870

Operating expenses:
 
 
 
Interest and other financing fees
6,910,303

 
6,518,570

Compensation expenses
4,250,413

 
9,450,493

General and administrative expenses
1,210,621

 
1,088,724

Total operating expenses
12,371,337

 
17,057,787

Net investment income
17,819,433

 
9,598,083

Realized and unrealized gains (losses) on investments and foreign currency borrowings:
 
 
 
Net realized gains (losses):
 
 
 
Non-Control / Non-Affiliate investments
(12,360,335
)
 
584,787

Affiliate investments
3,532,816

 
1,427

Control investments
(4,491,440
)
 

Net realized gains (losses)
(13,318,959
)
 
586,214

Net unrealized appreciation (depreciation):
 
 
 
Investments
2,871,558

 
3,084,323

Foreign currency borrowings
(178,792
)
 
(852,523
)
Net unrealized appreciation (depreciation)
2,692,766

 
2,231,800

Net realized and unrealized gains (losses) on investments and foreign currency borrowings
(10,626,193
)
 
2,818,014

Tax benefit

 
11,161

Net increase in net assets resulting from operations
$
7,193,240

 
$
12,427,258

Net investment income per share—basic and diluted
$
0.42

 
$
0.29

Net increase in net assets resulting from operations per share—basic and diluted
$
0.17

 
$
0.37

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

 
$
0.54

Total dividends/distributions per share
$
0.45

 
$
0.54

Weighted average shares outstanding—basic and diluted
42,743,469

 
33,480,346

See accompanying notes.

4



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Changes in Net Assets
 
 
Common Stock
 
Additional
Paid-In
Capital
 
Investment
Income
in Excess of
Distributions
 
Accumulated
Realized
Gains (Losses) on Investments
 
Net
Unrealized
Appreciation(Depreciation)
 
Total
Net
Assets
 
Number
of Shares
 
Par
Value
 
 
 
 
 
Balance, December 31, 2015
33,375,126

 
$
33,375

 
$
549,242,439

 
$
16,127,141

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

Net investment income

 

 

 
9,598,083

 

 

 
9,598,083

Stock-based compensation

 

 
4,301,118

 

 

 

 
4,301,118

Realized gain (loss) on investments

 

 

 

 
586,214

 
(351,458
)
 
234,756

Net unrealized gain on investments / foreign currency

 

 

 

 

 
2,583,258

 
2,583,258

Tax benefit

 

 

 
11,161

 

 

 
11,161

Dividends / distributions
42,694

 
42

 
844,036

 
(18,108,221
)
 

 

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

 
351

 
(351
)
 

 

 

 

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

 

 

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

 
$
33,576

 
$
550,903,360

 
$
7,628,164

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

 
 
Common Stock
 
Additional
Paid-In
Capital
 
Investment
Income
in Excess of
Distributions
 
Accumulated
Realized
Losses on Investments
 
Net
Unrealized
Appreciation (Depreciation)
 
Total
Net
Assets
 
Number
of Shares
 
Par
Value
 
 
 
 
 
Balance, December 31, 2016
40,401,292

 
$
40,401

 
$
686,835,054

 
$
5,884,512

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

Net investment income

 

 

 
17,819,433

 

 

 
17,819,433

Stock-based compensation

 

 
1,453,904

 

 

 

 
1,453,904

Realized gain (loss) on investments

 

 

 

 
(13,318,959
)
 
12,342,077

 
(976,882
)
Net unrealized loss on investments / foreign currency

 

 

 

 

 
(9,649,311
)
 
(9,649,311
)
Dividends / distributions
40,559

 
40

 
749,913

 
(21,438,377
)
 

 

 
(20,688,424
)
Public offering of common stock
7,000,000

 
7,000

 
132,198,931

 

 

 

 
132,205,931

Issuance of restricted stock
347,000

 
347

 
(347
)
 

 

 

 

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

 

 

 
(2,113,620
)
Balance, March 31, 2017
47,681,397

 
$
47,681

 
$
819,123,942

 
$
2,265,568

 
$
(37,530,553
)
 
$
(54,699,349
)
 
$
729,207,289


See accompanying notes.


5



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Cash Flows 
 
Three Months Ended
 
Three Months Ended
 
March 31, 2017
 
March 31, 2016
Cash flows from operating activities:
 
 
 
Net increase in net assets resulting from operations
$
7,193,240

 
$
12,427,258

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:
 
 
 
Purchases of portfolio investments
(161,518,093
)
 
(11,812,331
)
Repayments received/sales of portfolio investments
53,770,711

 
53,620,680

Loan origination and other fees received
2,638,485

 
274,158

Net realized (gain) loss on investments
13,318,959

 
(586,214
)
Net unrealized appreciation on investments
(1,388,362
)
 
(2,647,804
)
Net unrealized depreciation on foreign currency borrowings
178,792

 
852,523

Deferred income taxes
(1,483,196
)
 
(436,517
)
Payment-in-kind interest accrued, net of payments received
(690,432
)
 
(317,840
)
Amortization of deferred financing fees
587,438

 
531,993

Accretion of loan origination and other fees
(1,349,409
)
 
(1,135,001
)
Accretion of loan discounts
(83,480
)
 
(95,188
)
Accretion of discount on SBA-guaranteed debentures payable

 
31,899

Depreciation expense
17,790

 
15,592

Stock-based compensation
1,453,904

 
4,301,118

Changes in operating assets and liabilities:
 
 
 
Interest, fees and other receivables
4,695,274

 
(1,891,253
)
Prepaid expenses and other current assets
(188,608
)
 
(886,837
)
Accounts payable and accrued liabilities
(3,495,262
)
 
(5,225,308
)
Interest payable
(2,437,827
)
 
(2,156,101
)
Taxes payable
(489,691
)
 
(735,498
)
Net cash provided by (used in) operating activities
(89,269,767
)
 
44,129,329

Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(18,507
)
 
(33,916
)
Net cash used in investing activities
(18,507
)
 
(33,916
)
Cash flows from financing activities:
 
 
 
Repayments of SBA-guaranteed debentures payable

 
(7,800,000
)
Borrowings under credit facility
50,000,000

 
30,000,000

Repayments of credit facility
(86,100,000
)
 
(34,000,000
)
Financing fees paid
(500,000
)
 

Net proceeds related to public offering of common stock
132,205,931

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(2,113,620
)
 
(3,484,074
)
Cash dividends/distributions paid
(20,688,424
)
 
(17,264,143
)
Net cash provided by (used in) financing activities
72,803,887

 
(32,548,217
)
Net increase (decrease) in cash and cash equivalents
(16,484,387
)
 
11,547,196

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

 
52,615,418

Cash and cash equivalents, end of period
$
90,603,276

 
$
64,162,614

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
$
8,541,314

 
$
7,932,474

Summary of non-cash financing transactions:
 
 
 
Dividends/distributions paid through DRIP share issuances
$
749,953

 
$
844,078


See accompanying notes.


6



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments
March 31, 2017
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Non–Control / Non–Affiliate Investments:
 
 
 
 
 
 
ACA Holdings LLC (F/K/A My Alarm Center, LLC) (0%)*
 
Security Company
 
Preferred Units (2,000,000 units)
 
 
 
$
2,000,000

 
$

 
 
 
 
 
 
2,000,000

 

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

 
13,602,148

 
13,602,148

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

 
3,772,000

 
 
 
 
13,819,514

 
14,503,174

 
17,374,148

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

 
2,000,000

 
 
 
 
 
 
2,000,000

 
2,000,000

 
 
 
 
 
 
 
 
 
 
 
Agilex Flavors & Fragrances, Inc. (2%)*
 
Custom Fragrance Producer
 
Subordinated Note (12% Cash, Due 11/21)
 
13,168,124

 
13,053,417

 
13,053,417

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

 
2,432,000

 
 
 
13,168,124

 
14,303,417

 
15,485,417

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

 
4,364,000

 
 
 
 
 
630,134

 
4,364,000

 
 
 
 
 
 
 
 
 
 
 
AM General, LLC (4%)*
 
Defense Manufacturing
 
Senior Note (8.3% Cash, Due 12/21)
 
9,750,000

 
9,606,135

 
9,606,135

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

 
19,419,234

 
19,419,234

 
 
 
 
29,750,000

 
29,025,369

 
29,025,369

 
 
 
 
 
 
 
 
 
 
 
Avantor Performance Materials Holdings, LLC (2%)*
 
Life Sciences and Advanced Technologies
 
Second Lien Term Note (9.3% Cash, Due 03/25)
 
14,368,421

 
14,218,421

 
14,218,421

 
 
 
 
14,368,421

 
14,218,421

 
14,218,421

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

 
4,084,270

 
4,084,270

 
 
 
 
4,112,935

 
4,084,270

 
4,084,270

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

 
1,831,000

 
 
 
 
 
 
1,300,000

 
1,831,000

 
 
 
 
 
 
 
 
 
 
 
Baker Hill Acquisition, LLC (2%)*
 
Loan Origination Software Solutions Provider
 
Second Lien Term Notes (12% Cash, Due 03/21)
 
13,500,000

 
13,342,258

 
12,371,000

 
 
Limited Partnership Interest
 
 
 
1,498,500

 
721,000

 
 
 
 
13,500,000

 
14,840,758

 
13,092,000

 
 
 
 
 
 
 
 
 
 
 
Cafe Enterprises, Inc. (1%)*
 
Restaurant
 
Subordinated Note (7% Cash, 7% PIK, Due 09/19)
 
14,128,449

 
13,999,989

 
10,253,000

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

 

 
 
 
 
14,128,449

 
14,999,989

 
10,253,000

 
 
 
 
 
 
 
 
 
 
 
Captek Softgel International, Inc.
(2%)*
 
Nutraceutical Manufacturer
 
Subordinated Note (10% Cash, 2% PIK, Due 06/21)
 
15,484,373

 
15,239,007

 
15,239,007

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

 
1,511,000

 
 
 
15,484,373

 
16,739,007

 
16,750,007

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

 
597,000

 
 
 
 
 
119,735

 
597,000

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

 
1,110,000

 
 
 
 


 
500,000

 
1,110,000

 
 
 
 
 
 
 
 
 
 
 
Community Intervention Services, Inc. (2%)*
 
Provider of Behavioral Health Services
 
Subordinated Note (7% Cash, 6% PIK, Due 01/21) (5)
 
19,017,309

 
17,732,558

 
12,440,000

 
 
 
 
19,017,309

 
17,732,558

 
12,440,000

 
 
 
 
 
 
 
 
 
 
 
Comverge, Inc. (2%)*
 
Provider of Intelligent Energy Management Solutions
 
Senior Note (12% Cash, Due 05/18)
 
15,505,583

 
15,422,028

 
15,422,028

Preferred Stock (703 shares)
 
 
 
554,458

 
851,000

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

 
1,350,000

 
 
 
15,505,583

 
16,076,486

 
17,623,028

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

 
345,542

 
 
 
 
 
 
345,542

 
345,542

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

7



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
March 31, 2017
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
CWS Holding Company, LLC (0%)*
 
Manufacturer of Custom Windows and Sliding Doors
 
Class A Units (1,500,000 units)
 
 
 
$
1,500,000

 
$
2,127,000

 
 
 
 
 
1,500,000

 
2,127,000

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

 
889,000

 
 
 
 
 
1,000,000

 
889,000

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

 
13,735,237

 
13,735,237

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

 
3,000,000

 
 
 
 
14,000,000

 
16,735,237

 
16,735,237

 
 
 
 
 
 
 
 
 
 
 
DialogDirect, Inc. (1%)*
 
Business Process Outsourcing Provider
 
Subordinated Notes (12% Cash, 1.5% PIK, Due 04/20)(6)
 
16,676,951

 
16,020,226

 
9,380,000

 
 
 
16,676,951

 
16,020,226

 
9,380,000

 
 
 
 
 
 
 
 
 
 
 
Dimora Brands, Inc. (F/K/A TK USA Enterprises, Inc.) (2%)*
 
Hardware Designer and Distributor
 
Second Lien Term Note (11% Cash, Due 10/23)
 
12,500,000

 
12,273,646

 
12,273,646

 
 
 
 
12,500,000

 
12,273,646

 
12,273,646

 
 
 
 
 
 
 
 
 
 
 
DLC Acquisition, LLC (5%)*
 
Staffing Firm
 
Senior Notes (10% Cash, Due 12/20)
 
22,425,000

 
22,183,724

 
22,183,724

 
Senior Note (10% Cash, 2% PIK, Due 12/20)
 
17,014,412

 
16,830,451

 
16,830,451

 
 
 
39,439,412

 
39,014,175

 
39,014,175

 
 
 
 
 
 
 
 
 
 
 
Dyno Acquiror, Inc. (1%)*
 
Sewing Products and Seasonal Decorative Products Supplier
 
Subordinated Note (10.5% Cash, 1.5% PIK, Due 08/20)
 
4,611,389

 
4,579,161

 
4,579,161

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

 
808,000

 
 
 
4,611,389

 
5,179,161

 
5,387,161

 
 
 
 
 
 
 
 
 
 
 
Eckler's Holdings, Inc. (1%)*
 
Restoration Parts and Accessories for Classic Cars and Trucks
 
Subordinated Note (10% Cash, 5.5% PIK, Due 03/19)
 
10,966,663

 
10,915,450

 
9,087,000

 
Common Stock (18,029 shares)
 
 
 
183,562

 

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

 

 
Series B Preferred Stock (702 shares)
 
 
 
435,127

 

 
 
 
10,966,663

 
13,130,265

 
9,087,000

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

 
2,718,000

 
 
 
 
 
782,356

 
2,718,000

 
 
 
 
 
 
 
 
 
 
 
Fridababy Holdings, LLC (3%)*
 
Baby Products
 
Senior Notes (10.1% Cash, Due 10/21)
 
23,000,000

 
22,576,465

 
22,576,465

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

 
273,401

 
 
 
 
23,000,000

 
22,849,866

 
22,849,866

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

 
13,260,545

 
12,247,000

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

 
203,000

 
 
 
 
13,375,000

 
13,760,545

 
12,450,000

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

 
8,425,293

 
3,850,000

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

 

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

 

 
 
 
 
8,462,629

 
9,175,293

 
3,850,000

 
 
 
 
 
 
 
 
 
 
 
Frozen Specialties, Inc. (2%)*
 
Frozen Foods Manufacturer
 
Subordinated Note (10% Cash, 4% PIK, Due 12/17)
 
13,812,107

 
13,812,107

 
13,812,107

 
 
13,812,107

 
13,812,107

 
13,812,107

 
 
 
 
 
 
 
 
 
 
 
GST AutoLeather, Inc. (3%)*
 
Supplier of Automotive Interior Leather
 
Subordinated Note (11% Cash, 2% PIK, Due 01/21)
 
23,247,130

 
22,941,643

 
22,941,643

 
 
 
 
23,247,130

 
22,941,643

 
22,941,643

 
 
 
 
 
 
 
 
 
 
 
Halo Branded Solutions, Inc. (2%)*
 
Supply Chain Services
 
Subordinated Notes (11% Cash, 1% PIK, Due 10/22)
 
10,436,424

 
10,223,983

 
10,223,983

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

 
4,078,000

 
 
 
 
10,436,424

 
12,823,983

 
14,301,983

 
 
 
 
 
 
 
 
 
 
 
HKW Capital Partners IV, L.P.
(0%)*(4)
 
Multi-Sector Holdings
 
0.6% Limited Partnership Interest
 
 
 
972,171

 
1,367,888

 
 
 
 
 
 
972,171

 
1,367,888

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

8



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
March 31, 2017
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
HTC Borrower, LLC (4%)*
 
Hunting and Outdoor Products
 
Subordinated Notes (10% Cash, 3% PIK, Due 09/20)
 
$
26,327,694

 
$
26,066,199

 
$
26,066,199

 
 
 
 
26,327,694

 
26,066,199

 
26,066,199

 
 
 
 
 
 
 
 
 
 
 
ICP Industrial, Inc. (3%)*
 
Coatings Formulator and Manufacturer
 
Subordinated Note (9.5% Cash, Due 04/22)
 
7,500,000

 
7,437,820

 
7,437,820

 
 
Subordinated Notes (10% Cash, 1% PIK, Due 10/22)
 
8,108,568

 
7,971,222

 
7,971,222

 
 
Subordinated Notes (14% PIK, Due 10/22)
 
5,946,403

 
5,893,249

 
5,893,249

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

 
1,941,000

 
 
 
 
21,554,971

 
23,053,774

 
23,243,291

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

 
1,749,000

 
 
 
 
853,500

 
1,749,000

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

 
14,706,098

 
14,706,098

 
 
 
 
15,000,000

 
14,706,098

 
14,706,098

 
 
 
 
 
 
 
 
 
 
 
KidKraft, Inc. (4%)*
 
Children's Toy Manufacturer and Distributor
 
Second Lien Term Note (11% Cash, 1% PIK, Due 03/22)
 
27,737,601

 
27,223,302

 
27,223,302

 
 
 
 
27,737,601

 
27,223,302

 
27,223,302

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

 
3,808,000

 
 
 
 
 
 
638,260

 
3,808,000

 
 
 
 
 
 
 
 
 
 
 
Lakeview Health Holdings, Inc. (3%)*
 
Substance Abuse Treatment Service Provider
 
Senior Note (7.8% Cash, Due 12/21)
 
18,566,101

 
18,374,384

 
18,374,384

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

 
2,000,000

 
 
 
 
18,566,101

 
20,374,384

 
20,374,384

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

 
6,537,680

 
5,541,000

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

 
378,000

 
 
6,545,455

 
7,714,637

 
5,919,000

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

 
3,114,000

 
 
Common Units (30,000 units)
 
 
 
30,000

 
8,787,000

 
 
 
 
 
 
1,500,000

 
11,901,000

 
 
 
 
 
 
 
 
 
 
 
Micross Solutions LLC (4%)*
 
Provider of Semiconductor Products and Services
 
Subordinated Note (12% Cash, 3% PIK, Due 06/18)
 
24,618,795

 
24,540,305

 
24,540,305

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

 
1,884,000

 
 
24,618,795

 
26,559,998

 
26,424,305

 
 
 
 
 
 
 
 
 
 
 
Motor Vehicle Software Corporation (3%)*
 
Provider of EVR Services
 
Subordinated Note (10% Cash, 0.5% PIK, Due 03/21)
 
20,270,406

 
19,958,931

 
19,958,931

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

 
1,396,000

 
 
 
 
20,270,406

 
21,046,391

 
21,354,931

 
 
 
 
 
 
 
 
 
 
 
Nautic Partners VII, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.4% Limited Partnership Interest
 
 
 
1,062,707

 
1,516,000

 
 
 
 
 
 
1,062,707

 
1,516,000

 
 
 
 
 
 
 
 
 
 
 
Nomacorc, LLC (2%)*
 
Synthetic Wine Cork Producer
 
Subordinated Note (10% Cash, 2.3% PIK, Due 07/21)
 
20,993,317

 
20,703,887

 
16,852,000

 
 
Limited Partnership Interest
 
 
 
2,153,274

 

 
 
 
 
20,993,317

 
22,857,161

 
16,852,000

 
 
 
 
 
 
 
 
 
 
 
Orchid Underwriters Agency, LLC (1%)*
 
Insurance Underwriter
 
Subordinated Note (10% Cash, 1.5% PIK, Due 03/23)
 
2,601,517

 
2,549,517

 
2,549,517

Subordinated Note (13.5% PIK, Due 03/24)
 
904,725

 
886,725

 
886,725

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

 
869,000

Class A Common Units (15,000 units)
 
 
 

 
919,000

 
 
3,506,242

 
3,774,400

 
5,224,242

 
 
 
 
 
 
 
 
 
 
 
Pike Corporation (0%)*
 
Provider of Energy Infrastructure Solutions
 
Subordinated Note (9% Cash, Due 09/24)
 
1,000,000

 
990,000

 
990,000

 
 
 
 
1,000,000

 
990,000

 
990,000

 
 
 
 
 
 
 
 
 
 
 
PowerDirect Marketing, LLC (0%)*
 
Marketing Services
 
Senior Note (13% Cash, 2% PIK, Due 06/17)(6)
 
8,498,403

 
4,677,482

 
450,000

Common Unit Purchase Warrants
 
 
 
590,200

 

 
 
8,498,403

 
5,267,682

 
450,000

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

 
14,779,774

 
14,779,774

 
 
 
 
15,000,000

 
14,779,774

 
14,779,774


9



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
March 31, 2017
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
 
 
 
 
 
 
 
 
 
 
 
REP WWEX Acquisition Parent, LLC (2%)*
 
Third-Party Logistics Provider
 
Second Lien Term Note (9.8% Cash, Due 02/25)
 
$
15,000,000

 
$
14,779,723

 
$
14,779,723

 
 
 
 
15,000,000

 
14,779,723

 
14,779,723

 
 
 
 
 
 
 
 
 
 
 
RMP Group, Inc. (1%)*
 
Provider of RCM Services to Hospitals and Physician Groups
 
Subordinated Note (10.5% Cash, 1% PIK, Due 09/22)
 
10,008,219

 
9,808,219

 
9,808,219

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

 
1,000,000

 
 
 
 
10,008,219

 
10,808,219

 
10,808,219

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

 
111,000

 
 
 
 
 
 
111,000

 
111,000

 
 
 
 
 
 
 
 
 
 
 
Rotolo Consultants, Inc. (1%)*
 
Landscape Services
 
Subordinated Note (11% Cash, 3% PIK, Due 08/21)
 
6,956,121

 
6,849,145

 
6,849,145

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

 
2,444,000

 
 
 
 
6,956,121

 
10,503,398

 
9,293,145

 
 
 
 
 
 
 
 
 
 
 
SCA Pharmaceuticals, LLC (0%)*
 
Provider of Pharmaceutical Products
 
Subordinated Note (10.1% Cash, Due 12/20)
 
3,000,000

 
2,715,480

 
2,715,480

 
 
 
 
3,000,000

 
2,715,480

 
2,715,480

 
 
 
 
 
 
 
 
 
 
 
SCUF Gaming, Inc. (4%)*
 
Gaming Controller Manufacturer
 
Senior Notes (9.5% Cash, Due 12/21)
 
25,008,000

 
24,527,667

 
24,527,667

 
 
Revolver Loan (9.5% Cash, Due 06/18)
 
1,500,000

 
1,500,000

 
1,500,000

 
 
Common Stock (27,112 shares)
 
 
 
742,000

 
742,000

 
 
 
 
26,508,000

 
26,769,667

 
26,769,667

 
 
 
 
 
 
 
 
 
 
 
Smile Brands, Inc. (3%)*
 
Dental Service Organization
 
Subordinated Notes (10% Cash, 2% PIK, Due 02/23)
 
22,454,231

 
22,035,700

 
22,035,700

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

 
1,952,000

 
 
 
 
22,454,231

 
25,035,700

 
23,987,700

 
 
 
 
 
 
 
 
 
 
 
SPC Partners V, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.7% Limited Partnership Interest
 
 
 
1,922,865

 
2,092,000

 
 
 
 
 
 
1,922,865

 
2,092,000

 
 
 
 
 
 
 
 
 
 
 
Specialized Desanders, Inc. (2%)*(4)
 
Sand and Particulate Removal Equipment Provider for Oil and Gas Companies
 
Subordinated Note (12% Cash, 2% PIK, Due 03/20)
 
16,110,042

 
15,979,621

 
12,643,516

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

 
3,006,000

 
 
 
16,110,042

 
17,917,042

 
15,649,516

 
 
 
 
 
 
 
 
 
 
 
Tate's Bake Shop (2%)*
 
Producer of Baked Goods
 
Subordinated Note (10% Cash, 3% PIK, Due 02/20)
 
10,817,982

 
10,695,615

 
10,695,615

 
 
Limited Partnership Interest
 
 
 
925,000

 
1,308,000

 
 
 
 
10,817,982

 
11,620,615

 
12,003,615

 
 
 
 
 
 
 
 
 
 
 
TCFI Merlin LLC ("Merlin") and TCFI CSG LLC ("CSG") (3%)*
 
Specialty Staffing Service Provider
 
Senior Notes (9.5% Cash Due 09/19)
 
20,528,936

 
20,204,484

 
20,204,484

 
 
Limited Partnership Units - Merlin (500,500 units)
 
 
 
285,485

 
286,000

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

 
100,000

 
 
 
 
20,528,936

 
20,589,969

 
20,590,484

 
 
 
 
 
 
 
 
 
 
 
The Cook & Boardman Group, LLC (2%)*
 
Distributor of Doors and Related Products
 
Subordinated Note (10% Cash, 2.5% PIK, Due 03/20)
 
14,933,072

 
14,761,757

 
14,761,757

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

 
2,483,000

 
 
 
 
14,933,072

 
16,161,757

 
17,244,757

 
 
 
 
 
 
 
 
 
 
 
Tosca Services, LLC (4%)*
 
Perishable Food Supply Chain Management
 
Senior Note (10.5% Cash, Due 12/20)
 
29,250,000

 
28,952,542

 
28,952,542

 
 
 
 
29,250,000

 
28,952,542

 
28,952,542

 
 
 
 
 
 
 
 
 
 
 
Trademark Global LLC (2%)*
 
Supplier to Mass Market Internet Retail
 
Subordinated Note (10% Cash, 1.3% PIK, Due 04/23)
 
14,800,000

 
14,590,484

 
14,590,484

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

 
1,500,000

 
 
Class B Units (1,500,000 units)
 
 
 

 

 
 
 
 
14,800,000

 
16,090,484

 
16,090,484

 
 
 
 
 
 
 
 
 
 
 
Travelpro Products, Inc. ("Travelpro") and TP - Holiday Group Limited ("TP") (3%)*
 
Luggage and Travel Bag Supplier
 
Second Lien Term Note - Travelpro (11% Cash, 2% PIK, Due 11/22)
 
10,176,685

 
9,976,856

 
9,976,856

 
 
Second Lien Term Note - TP (11% Cash, 2% PIK, Due 11/22)(4)
 
9,014,272

 
8,834,426

 
8,685,393

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

 
2,321,000

 
 
 
 
19,190,957

 
20,811,282

 
20,983,249

 
 
 
 
 
 
 
 
 
 
 

10



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
March 31, 2017
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
United Biologics, LLC (2%)*
 
Allergy Immunotherapy
 
Senior Note (12% Cash, 2% PIK, Due 04/18)
 
$
12,823,343

 
$
12,823,342

 
$
12,823,342

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