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 September 30, 2016
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission file number 814-00733 
__________________________________________________________
Triangle Capital Corporation
(Exact name of registrant as specified in its charter)
__________________________________________________________
Maryland
 
06-1798488
(State or other jurisdiction of
 
(I.R.S. Employer
incorporation or organization)
 
Identification No.)
 
 
3700 Glenwood Avenue, Suite 530
Raleigh, North Carolina
 
27612
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (919) 719-4770
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report: N/A 
__________________________________________________________
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
ý
Accelerated filer
¨
 
 
 
 
Non-accelerated filer
¨  (Do not check if a smaller reporting company)
Smaller reporting company
¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý
The number of shares outstanding of the registrant’s Common Stock on November 2, 2016 was 40,360,906.




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
 
September 30, 2016
 
December 31, 2015
 
(Unaudited)
 
 
Assets:
 
 
 
Investments at fair value:
 
 
 
Non-Control / Non-Affiliate investments (cost of $771,052,767 and $795,244,907 as of September 30, 2016 and December 31, 2015, respectively)
$
748,363,034

 
$
774,238,518

Affiliate investments (cost of $163,759,331 and $171,486,103 as of September 30, 2016 and December 31, 2015, respectively)
170,111,172

 
177,581,965

Control investments (cost of $52,518,113 and $40,618,113 as of September 30, 2016 and December 31, 2015, respectively)
29,257,769

 
25,456,233

Total investments at fair value
947,731,975

 
977,276,716

Cash and cash equivalents
168,336,823

 
52,615,418

Interest, fees and other receivables
6,966,478

 
4,892,146

Prepaid expenses and other current assets
1,690,182

 
947,068

Deferred financing fees
2,897,224

 
3,480,444

Property and equipment, net
122,506

 
105,698

Total assets
$
1,127,745,188

 
$
1,039,317,490

Liabilities:
 
 
 
Accounts payable and accrued liabilities
$
4,636,217

 
$
7,463,514

Interest payable
1,537,490

 
3,714,470

Taxes payable

 
735,498

Deferred income taxes
3,027,000

 
4,988,317

Borrowings under credit facility
91,427,900

 
131,256,669

Notes
162,598,503

 
162,142,478

SBA-guaranteed debentures payable
245,162,869

 
220,648,789

Total liabilities
508,389,979

 
530,949,735

Commitments and contingencies (Note 7)
 
 
 
Net Assets:
 
 
 
Common stock, $0.001 par value per share (150,000,000 shares authorized, 40,405,403 and 33,375,126 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively)
40,405

 
33,375

Additional paid-in capital
684,618,304

 
549,242,439

Investment income in excess of distributions
6,553,437

 
16,127,141

Accumulated realized losses
(32,501,174
)
 
(25,813,329
)
Net unrealized depreciation
(39,355,763
)
 
(31,221,871
)
Total net assets
619,355,209

 
508,367,755

Total liabilities and net assets
$
1,127,745,188

 
$
1,039,317,490

Net asset value per share
$
15.33

 
$
15.23


See accompanying notes.


3



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Operations
 
Three Months
Ended
 
Three Months
Ended
 
Nine Months Ended
 
Nine Months Ended
 
September 30,
2016
 
September 30,
2015
 
September 30,
2016
 
September 30,
2015
Investment income:
 
 
 
 
 
 
 
Interest income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
$
17,270,300

 
$
18,051,486

 
$
52,938,976

 
$
51,993,071

Affiliate investments
3,380,867

 
4,294,512

 
10,121,974

 
12,685,241

Control investments
303,708

 
248,609

 
764,622

 
298,090

Total interest income
20,954,875

 
22,594,607

 
63,825,572

 
64,976,402

Dividend income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
167,468

 
259,431

 
(1,030,703
)
 
1,893,825

Affiliate investments
244,233

 
323,291

 
706,495

 
860,913

Control investments

 

 
300,000

 

Total dividend income
411,701

 
582,722

 
(24,208
)
 
2,754,738

Fee and other income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
1,585,403

 
3,308,427

 
5,662,081

 
7,380,865

Affiliate investments
319,289

 
337,343

 
855,855

 
2,334,396

Control investments
110,000

 
100,000

 
310,000

 
300,000

Total fee and other income
2,014,692

 
3,745,770

 
6,827,936

 
10,015,261

Payment-in-kind interest income:
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
2,719,831

 
2,735,701

 
8,373,124

 
8,077,552

Affiliate investments
1,175,899

 
1,126,244

 
3,259,634

 
3,445,253

Total payment-in-kind interest income
3,895,730

 
3,861,945

 
11,632,758

 
11,522,805

Interest income from cash and cash equivalents
135,459

 
58,401

 
228,129

 
178,713

Total investment income
27,412,457

 
30,843,445

 
82,490,187

 
89,447,919

Operating expenses:
 
 
 
 
 
 
 
Interest and other financing fees
6,757,718

 
6,561,298

 
20,040,942

 
20,319,093

Compensation expenses
3,963,797

 
4,951,026

 
17,510,762

 
13,876,141

General and administrative expenses
859,785

 
813,125

 
3,170,330

 
2,798,925

Total operating expenses
11,581,300

 
12,325,449

 
40,722,034

 
36,994,159

Net investment income
15,831,157

 
18,517,996

 
41,768,153

 
52,453,760

Realized and unrealized gains (losses) on investments and foreign currency borrowings:
 
 
 
 
 
 
 
Net realized gains (losses):
 
 
 
 
 
 
 
Non-Control / Non-Affiliate investments
(11,213,561
)
 
2,331,742

 
(5,007,647
)
 
8,746,844

Affiliate investments
2,106

 
(503,907
)
 
(1,680,198
)
 
(237,399
)
Control investments

 
(18,323,508
)
 

 
(38,807,152
)
Net realized gains (losses)
(11,211,455
)
 
(16,495,673
)
 
(6,687,845
)
 
(30,297,707
)
Net unrealized appreciation (depreciation):
 
 
 
 
 
 
 
Investments
2,881,131

 
14,375,221

 
(7,564,510
)
 
15,441,528

Foreign currency borrowings
342,409

 
1,081,391

 
(569,382
)
 
1,942,776

Net unrealized appreciation (depreciation)
3,223,540

 
15,456,612

 
(8,133,892
)
 
17,384,304

Net realized and unrealized losses on investments and foreign currency borrowings
(7,987,915
)
 
(1,039,061
)
 
(14,821,737
)
 
(12,913,403
)
Loss on extinguishment of debt

 

 

 
(1,394,017
)
Tax benefit
36,431

 
393,437

 
47,342

 
255,562

Net increase in net assets resulting from operations
$
7,879,673

 
$
17,872,372

 
$
26,993,758

 
$
38,401,902

Net investment income per share—basic and diluted
$
0.42

 
$
0.56

 
$
1.19

 
$
1.58

Net increase in net assets resulting from operations per share—basic and diluted
$
0.21

 
$
0.54

 
$
0.77

 
$
1.16

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

 
$
0.54

 
$
1.44

 
$
1.62

Supplemental dividends/distributions

 
0.05

 

 
0.15

Total dividends/distributions per share
$
0.45

 
$
0.59

 
$
1.44

 
$
1.77

Weighted average shares outstanding—basic and diluted
38,115,449

 
33,274,586

 
35,199,704

 
33,203,414

See accompanying notes.

4



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Changes in Net Assets
 
 
Common Stock
 
Additional
Paid-In
Capital
 
Investment
Income
in Excess of
Distributions
 
Accumulated
Realized
Gains (Losses) on Investments
 
Net
Unrealized
Appreciation(Depreciation)
 
Total
Net
Assets
 
Number
of Shares
 
Par
Value
 
 
 
 
 
Balance, December 31, 2014
32,950,288

 
$
32,950

 
$
542,119,994

 
$
12,926,514

 
$
12,464,699

 
$
(36,717,528
)
 
$
530,826,629

Net investment income

 

 

 
52,453,760

 

 

 
52,453,760

Stock-based compensation

 

 
5,200,761

 

 

 

 
5,200,761

Realized gain (loss) on investments

 

 

 

 
(30,297,707
)
 
29,641,715

 
(655,992
)
Net unrealized loss on investments / foreign currency

 

 

 

 

 
(12,257,411
)
 
(12,257,411
)
Loss on extinguishment of debt

 

 

 
(1,394,017
)
 

 

 
(1,394,017
)
Tax Benefit

 

 

 
255,562

 

 

 
255,562

Dividends / distributions
125,298

 
125

 
2,676,308

 
(50,576,458
)
 
(8,242,911
)
 

 
(56,142,936
)
Expenses related to public offering of common stock

 

 
(54,967
)
 

 

 

 
(54,967
)
Issuance of restricted stock
360,840

 
361

 
(361
)
 

 

 

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(115,077
)
 
(115
)
 
(2,497,597
)
 

 

 

 
(2,497,712
)
Balance, September 30, 2015
33,321,349

 
$
33,321

 
$
547,444,138

 
$
13,665,361

 
$
(26,075,919
)
 
$
(19,333,224
)
 
$
515,733,677

 
 
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, 2015
33,375,126

 
$
33,375

 
$
549,242,439

 
$
16,127,141

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

Net investment income

 

 

 
41,768,153

 

 

 
41,768,153

Stock-based compensation

 

 
7,502,500

 

 

 

 
7,502,500

Realized gain (loss) on investments

 

 

 

 
(6,687,845
)
 
7,532,502

 
844,657

Net unrealized loss on investments / foreign currency

 

 

 

 

 
(15,666,394
)
 
(15,666,394
)
Tax benefit

 

 

 
47,342

 

 

 
47,342

Dividends / distributions
120,562

 
120

 
2,325,851

 
(51,389,199
)
 

 

 
(49,063,228
)
Public offering of common stock
6,742,362

 
6,742

 
129,129,554

 

 

 

 
129,136,296

Issuance of restricted stock
364,605

 
365

 
(365
)
 

 

 

 

Common stock withheld for payroll taxes upon vesting of restricted stock
(197,252
)
 
(197
)
 
(3,581,675
)
 

 

 

 
(3,581,872
)
Balance, September 30, 2016
40,405,403

 
$
40,405

 
$
684,618,304

 
$
6,553,437

 
$
(32,501,174
)
 
$
(39,355,763
)
 
$
619,355,209


See accompanying notes.


5



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Statements of Cash Flows 
 
Nine Months Ended
 
Nine Months Ended
 
September 30, 2016
 
September 30, 2015
Cash flows from operating activities:
 
 
 
Net increase in net assets resulting from operations
$
26,993,758

 
$
38,401,902

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:
 
 
 
Purchases of portfolio investments
(163,867,651
)
 
(352,445,028
)
Repayments received/sales of portfolio investments
182,153,894

 
261,002,599

Loan origination and other fees received
3,205,460

 
5,741,331

Net realized loss on investments
6,687,845

 
30,297,707

Net unrealized depreciation (appreciation) on investments
9,525,827

 
(18,127,974
)
Net unrealized depreciation (appreciation) on foreign currency borrowings
569,382

 
(1,942,776
)
Deferred income taxes
(1,961,317
)
 
2,686,444

Payment-in-kind interest accrued, net of payments received
(4,177,550
)
 
(2,084,305
)
Amortization of deferred financing fees
1,644,826

 
1,636,224

Loss on extinguishment of debt

 
1,394,017

Accretion of loan origination and other fees
(3,676,003
)
 
(4,897,834
)
Accretion of loan discounts
(307,081
)
 
(362,424
)
Accretion of discount on SBA-guaranteed debentures payable
31,899

 
140,185

Depreciation expense
52,369

 
44,552

Stock-based compensation
7,502,500

 
5,200,761

Changes in operating assets and liabilities:
 
 
 
Interest, fees and other receivables
(2,074,332
)
 
1,823,785

Prepaid expenses and other current assets
(743,114
)
 
(538,708
)
Accounts payable and accrued liabilities
(2,827,297
)
 
(1,847,069
)
Interest payable
(2,176,980
)
 
(2,098,783
)
Taxes payable
(735,498
)
 
(2,451,879
)
Net cash provided by (used in) operating activities
55,820,937

 
(38,427,273
)
Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(69,177
)
 
(55,035
)
Net cash used in investing activities
(69,177
)
 
(55,035
)
Cash flows from financing activities:
 
 
 
Borrowings under SBA-guaranteed debentures payable
32,800,000

 

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

Borrowings under credit facility
68,901,849

 
174,000,000

Repayments of credit facility
(109,300,000
)
 
(114,000,000
)
Proceeds from notes

 
83,372,640

Redemption of notes

 
(69,000,000
)
Financing fees paid
(1,123,400
)
 
(2,919,436
)
Net proceeds (expenses) related to public offering of common stock
129,136,296

 
(54,967
)
Common stock withheld for payroll taxes upon vesting of restricted stock
(3,581,872
)
 
(2,497,712
)
Cash dividends/distributions paid
(49,063,228
)
 
(56,142,936
)
Net cash provided by financing activities
59,969,645

 
12,757,589

Net increase (decrease) in cash and cash equivalents
115,721,405

 
(25,724,719
)
Cash and cash equivalents, beginning of period
52,615,418

 
78,759,026

Cash and cash equivalents, end of period
$
168,336,823

 
$
53,034,307

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
$
19,929,857

 
$
19,798,265

Summary of non-cash financing transactions:
 
 
 
Dividends/distributions paid through DRIP share issuances
$
2,325,971

 
$
2,676,433


See accompanying notes.


6



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

 
$
1,339,000

 
 
 
 
 
 
2,000,000

 
1,339,000

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

 
13,584,652

 
13,584,652

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

 
4,678,000

 
 
 
 
13,819,514

 
15,084,652

 
18,262,652

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

 
13,044,678

 
13,044,678

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

 
2,371,000

 
 
 
13,168,124

 
14,294,678

 
15,415,678

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

 
4,128,000

 
 
 
 
 
630,134

 
4,128,000

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

 
5,792,190

 
5,792,190

 
 
Bridge Note (14% PIK, Due 11/16)
 
617,153

 
612,231

 
906,000

 
 
Units (83,025 units)
 
 
 
253,000

 
269,000

 
 
 
 
6,650,486

 
6,657,421

 
6,967,190

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

 
4,066,306

 
4,066,306

 
 
 
 
4,112,935

 
4,066,306

 
4,066,306

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

 
1,761,000

 
 
 
 


 
1,300,000

 
1,761,000

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

 
13,326,485

 
13,326,485

 
 
Limited Partnership Interest
 
 
 
1,498,500

 
1,056,000

 
 
 
 
13,500,000

 
14,824,985

 
14,382,485

 
 
 
 
 
 
 
 
 
 
 
Cafe Enterprises, Inc. (2%)*
 
Restaurant
 
Subordinated Note (7% Cash, 7% PIK, Due 06/19)
 
13,641,423

 
13,491,522

 
10,684,000

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

 
169,000

 
 
 
 
13,641,423

 
14,491,522

 
10,853,000

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

 
9,704,782

 
1,979,000

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

 

Common Stock Warrants (20 shares)
 
 
 
492,000

 

 
 
9,843,542

 
12,196,782

 
1,979,000

 
 
 
 
 
 
 
 
 
 
 
Captek Softgel International, Inc.
(3%)*
 
Nutraceutical Manufacturer
 
Subordinated Note (10% Cash, 2.5% PIK, Due 06/21)
 
15,290,087

 
15,022,055

 
15,022,055

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

 
1,446,000

 
 
 
15,290,087

 
16,522,055

 
16,468,055

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

 
116,000

 
 
 
 
 
119,735

 
116,000

 
 
 
 
 
 
 
 
 
 
 
Centerfield Media Holding Company (3%)*
 
Digital Marketing
 
Subordinated Note (10% Cash, 3.5% PIK, Due 03/21)
 
18,690,799

 
18,385,793

 
18,385,793

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

 
1,973,000

 
 
 
 
18,690,799

 
19,385,793

 
20,358,793

 
 
 
 
 
 
 
 
 
 
 
Chromaflo Technologies Parent LP (2%)*
 
Colorant Manufacturer and Distributor
 
Second Lien Term Loan (8.3% Cash, Due 06/20)
 
9,999,618

 
9,967,597

 
9,967,597

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

 
2,437,000

 
 
 
9,999,618

 
10,874,201

 
12,404,597

 
 
 
 
 
 
 
 
 
 
 
Community Intervention Services, Inc. (2%)*
 
Provider of Behavioral Health Services
 
Subordinated Note (10% Cash, 3% PIK, Due 01/21) (6)
 
16,738,706

 
15,407,588

 
11,364,000

 
 
 
 
16,738,706

 
15,407,588

 
11,364,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

7



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
September 30, 2016
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Comverge, Inc. (3%)*
 
Provider of Intelligent Energy Management Solutions
 
Senior Note (12% Cash, Due 05/18)
 
$
15,505,583

 
$
15,391,915

 
$
15,391,915

Preferred Stock (703 shares)
 
 
 
554,458

 
818,000

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

 
94,000

 
 
 
15,505,583

 
16,046,373

 
16,303,915

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

 
345,542

 
 
 
 
 
 
345,542

 
345,542

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

 
2,052,000

 
 
 
 
 
1,500,000

 
2,052,000

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

 
795,000

 
 
 
 
 
1,000,000

 
795,000

 
 
 
 
 
 
 
 
 
 
 
DialogDirect, Inc. (3%)*
 
Business Process Outsourcing Provider
 
Subordinated Notes (12% Cash, 1.5% PIK, Due 04/20)
 
16,064,880

 
15,951,956

 
15,951,956

 
 
 
16,064,880

 
15,951,956

 
15,951,956

 
 
 
 
 
 
 
 
 
 
 
DLC Acquisition, LLC (6%)*
 
Staffing Firm
 
Senior Notes (10% Cash, Due 12/20)
 
21,400,000

 
21,112,007

 
21,112,007

 
Senior Note (10% Cash, 2% PIK, Due 12/20)
 
18,896,825

 
18,668,129

 
18,668,129

 
 
 
40,296,825

 
39,780,136

 
39,780,136

 
 
 
 
 
 
 
 
 
 
 
DLR Restaurants, LLC (0%)*
 
Restaurant
 
Royalty Rights
 
 
 

 

 
 
 
 
 

 

 
 
 
 
 
 
 
 
 
 
 
Dyno Acquiror, Inc. (1%)*
 
Sewing Products and Seasonal Decorative Products Supplier
 
Subordinated Note (12% Cash, 2% PIK, Due 11/19)
 
7,493,799

 
7,430,044

 
7,430,044

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

 
438,000

 
 
 
7,493,799

 
8,030,044

 
7,868,044

 
 
 
 
 
 
 
 
 
 
 
Eckler's Holdings, Inc. (1%)*
 
Restoration Parts and Accessories for Classic Cars and Trucks
 
Subordinated Note (11% Cash, 4.5% PIK, Due 07/18)
 
9,828,535

 
9,762,022

 
8,216,000

 
Common Stock (18,029 shares)
 
 
 
183,562

 

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

 

 
Series B Preferred Stock (185 shares)
 
 
 
185,127

 

 
 
 
9,828,535

 
11,726,837

 
8,216,000

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

 
2,322,000

 
 
 
 
 
782,356

 
2,322,000

 
 
 
 
 
 
 
 
 
 
 
FrontStream Holdings, LLC (2%)*
 
Payment and Donation Management Product Service Provider
 
Subordinated Note (12.5% Cash, Due 12/20)
 
13,375,000

 
13,248,898

 
13,248,898

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

 
500,000

 
 
 
 
13,375,000

 
13,748,898

 
13,748,898

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

 
8,411,531

 
7,929,000

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

 

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

 

 
 
 
 
8,462,629

 
9,161,531

 
7,929,000

 
 
 
 
 
 
 
 
 
 
 
Frozen Specialties, Inc. (2%)*
 
Frozen Foods Manufacturer
 
Subordinated Note (10% Cash, 4% PIK, Due 12/17)
 
13,536,975

 
13,536,975

 
14,736,975

 
 
13,536,975

 
13,536,975

 
14,736,975

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

 

 
 
 
 
500,000

 

 
 
 
 
 
 
 
 
 
 
 
GST AutoLeather, Inc. (4%)*
 
Supplier of Automotive Interior Leather
 
Subordinated Note (11% Cash, 2% PIK, Due 01/21)
 
23,013,847

 
22,680,826

 
22,680,826

 
 
 
 
23,013,847

 
22,680,826

 
22,680,826

 
 
 
 
 
 
 
 
 
 
 
Halo Branded Solutions, Inc. (2%)*
 
Supply Chain Services
 
Subordinated Notes (11% Cash, 1% PIK, Due 10/22)
 
10,383,861

 
10,157,677

 
10,157,677

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

 
2,600,000

 
 
 
 
10,383,861

 
12,757,677

 
12,757,677

 
 
 
 
 
 
 
 
 
 
 
HKW Capital Partners IV, L.P.
(0%)*(4)
 
Multi-Sector Holdings
 
0.6% Limited Partnership Interest
 
 
 
924,605

 
1,243,000

 
 
 
 
 
 
924,605

 
1,243,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

8



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
September 30, 2016
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)
 
$
25,932,888

 
$
25,640,882

 
$
25,640,882

 
 
 
 
25,932,888

 
25,640,882

 
25,640,882

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

 
7,433,344

 
7,433,344

 
 
Subordinated Notes (10% Cash, 1% PIK, Due 10/22)
 
8,067,729

 
7,921,494

 
7,921,494

 
 
Subordinated Notes (14% PIK, Due 10/22)
 
5,546,862

 
5,490,449

 
5,490,449

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

 
1,697,000

 
 
 
 
21,114,591

 
22,596,770

 
22,542,287

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

 
1,968,000

 
 


 
853,500

 
1,968,000

 
 
 
 
 
 
 
 
 
 
 
KidKraft, Inc. (4%)*
 
Children's Toy Manufacturer and Distributor
 
Second Lien Term Note (11% Cash, 1% PIK, Due 03/22)
 
27,600,767

 
27,048,767

 
27,048,767

 
 
 
 
27,600,767

 
27,048,767

 
27,048,767

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

 
3,707,000

 
 
 
 
 
 
638,260

 
3,707,000

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

 
6,530,280

 
6,230,000

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

 
563,000

 
 
6,545,455

 
7,707,237

 
6,793,000

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

 
2,911,000

 
 
Common Units (30,000 units)
 
 
 
30,000

 
7,620,000

 
 
 
 
 
 
1,500,000

 
10,531,000

 
 
 
 
 
 
 
 
 
 
 
Micross Solutions LLC (4%)*
 
Provider of Semiconductor Products and Services
 
Subordinated Note (12% Cash, 3% PIK, Due 06/18)
 
24,248,692

 
24,141,913

 
24,141,913

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

 
1,082,000

 
 
24,248,692

 
26,161,606

 
25,223,913

 
 
 
 
 
 
 
 
 
 
 
Motor Vehicle Software Corporation (3%)*
 
Provider of EVR Services
 
Subordinated Note (10% Cash, 1% PIK, Due 03/21)
 
20,219,264

 
19,876,812

 
19,876,812

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

 
1,267,000

 
 
 
 
20,219,264

 
20,941,772

 
21,143,812

 
 
 
 
 
 
 
 
 
 
 
Nautic Partners VII, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.4% Limited Partnership Interest
 
 
 
1,156,908

 
1,691,010

 
 
 
 
 
 
1,156,908

 
1,691,010

 
 
 
 
 
 
 
 
 
 
 
Nomacorc, LLC (3%)*
 
Synthetic Wine Cork Producer
 
Subordinated Note (10% Cash, 2.3% PIK, Due 07/21)
 
20,756,540

 
20,440,373

 
16,344,000

 
 
Limited Partnership Interest
 
 
 
2,150,637

 

 
 
 
 
20,756,540

 
22,591,010

 
16,344,000

 
 
 
 
 
 
 
 
 
 
 
Orchid Underwriters Agency, LLC (4%)*
 
Insurance Underwriter
 
Term B Note (10% Cash, Due 11/19)
 
22,644,852

 
22,325,682

 
22,325,682

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

 
1,909,000

Class A Common Units (15,000 units)
 
 
 

 
996,000

 
 
22,644,852

 
23,825,682

 
25,230,682

 
 
 
 
 
 
 
 
 
 
 
PHW Equity Investors, L.P. (F/K/A Performance Health & Wellness Holdings, Inc.) (0%)*
 
Rehabilitation and Wellness Products
 
Class A Limited Partnership Units (15,000 units)
 
 
 

 
50,000

 
 
 
 
 

 
50,000

 
 
 
 
 
 
 
 
 
 
 
PowerDirect Marketing, LLC (0%)*
 
Marketing Services
 
Subordinated Note (13% Cash, 2% PIK, Due 12/16)(6)
 
9,083,704

 
5,927,482

 
1,700,000

Common Unit Purchase Warrants
 
 
 
590,200

 

 
 
9,083,704

 
6,517,682

 
1,700,000

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

 
111,000

 
 
 
 
 
 
111,000

 
111,000

 
 
 
 
 
 
 
 
 
 
 
Rotolo Consultants, Inc. (1%)*
 
Landscape Services
 
Subordinated Note (11% Cash, 3% PIK, Due 08/21)
 
6,851,547

 
6,735,597

 
6,735,597

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

 
1,821,000

 
 
 
 
6,851,547

 
10,389,850

 
8,556,597

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

9



TRIANGLE CAPITAL CORPORATION
Unaudited Consolidated Schedule of Investments — (Continued)
September 30, 2016
Portfolio Company
 
Industry
 
Type of Investment(1)(2)(7)
 
Principal
Amount
 
Cost
 
Fair
Value(3)
Smile Brands, Inc. (4%)*
 
Dental Service Organization
 
Subordinated Notes (10% Cash, 2.0% PIK, Due 02/23)
 
$
22,228,903

 
$
21,785,434

 
$
21,785,434

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

 
3,000,000

 
 
 
 
22,228,903

 
24,785,434

 
24,785,434

 
 
 
 
 
 
 
 
 
 
 
SPC Partners V, LP (0%)*(4)
 
Multi-Sector Holdings
 
0.7% Limited Partnership Interest
 
 
 
1,777,882

 
1,893,000

 
 
 
 
 
 
1,777,882

 
1,893,000

 
 
 
 
 
 
 
 
 
 
 
Specialized Desanders, Inc. (3%)*(4)
 
Sand and Particulate Removal Equipment Provider for Oil and Gas Companies
 
Subordinated Note (12% Cash, 2% PIK, Due 03/20)
 
16,110,042

 
15,953,808

 
12,758,951

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

 
2,708,000

 
 
 
16,110,042

 
17,891,229

 
15,466,951

 
 
 
 
 
 
 
 
 
 
 
Tate's Bake Shop (2%)*
 
Producer of Baked Goods
 
Subordinated Note (10% Cash, 3% PIK, Due 02/20)
 
10,655,757

 
10,516,293

 
10,516,293

 
 
Limited Partnership Interest
 
 
 
925,000

 
1,225,000

 
 
 
 
10,655,757

 
11,441,293

 
11,741,293

 
 
 
 
 
 
 
 
 
 
 
TCFI Merlin LLC (2%)*
 
Specialty Staffing Service Provider
 
Senior Note (10% Cash, 1% PIK, Due 09/19)
 
13,361,851

 
13,164,450

 
13,164,450

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

 
500,000

 
 
 
 
13,361,851

 
13,664,450

 
13,664,450

 
 
 
 
 
 
 
 
 
 
 
The Cook & Boardman Group, LLC (3%)*
 
Distributor of Doors and Related Products
 
Subordinated Note (10% Cash, 2.5% PIK, Due 03/20)
 
14,746,109

 
14,550,859

 
14,550,859

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

 
2,606,000

 
 
 
 
14,746,109

 
15,950,859

 
17,156,859

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

 
12,261,531

 
12,261,531

 
 
 
12,500,000

 
12,261,531

 
12,261,531

 
 
 
 
 
 
 
 
 
 
 
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)
 
10,074,563

 
9,861,807

 
9,861,807

 
 
Second Lien Term Note - TP (11% Cash, 2% PIK, Due 11/22)(4)
 
8,926,530

 
8,735,050

 
8,683,187

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

 
2,000,000

 
 
 
 
19,001,093

 
20,596,857

 
20,544,994

 
 
 
 
 
 
 
 
 
 
 
United Biologics, LLC (2%)*
 
Allergy Immunotherapy
 
Subordinated Note (12% Cash, 2% PIK, Due 03/17)
 
12,693,170

 
12,550,040

 
12,550,040

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

 
137,000

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

 
1,586,000

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

 

 
Class A-1 Common Kicker Units (14,114 units)
 
 
 

 

 
Class A, Class A-1, Class A-1 Kicker & Class B Unit Purchase Warrants
 
 
 
838,117

 
330,000

 
 
 
 
12,693,170