Quarterly report pursuant to Section 13 or 15(d)

COMMITMENTS AND CONTINGENCIES

v3.22.2.2
COMMITMENTS AND CONTINGENCIES
 9 Months Ended
Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES
At September 30, 2022, 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 $ 3,000 
Brightwood Capital Fund III, LP 300 
3,300 
Freeport Fund Investments
Freeport First Lien Loan Fund III LP 4,871 
Freeport Financial SBIC Fund LP 3,285 
8,156 
Harris Preston Fund Investments
HPEP 4, L.P. 8,104 
HPEP 3, L.P. 1,555 
HPEP 423 COR, LP 600 
2717 HPP-MS, LP 56 
10,315 
MS Private Loan Fund I, LP 750 
UnionRock Energy Fund II, LP 1,957 
     Total Equity Commitments (1)(2) $ 24,478 
Investments with commitments to fund revolving loans that have not been fully drawn or term loans with additional commitments not yet funded:
Xenon Arc, Inc. $ 32,400 
Dalton US Inc. 19,314 
CaseWorthy, Inc. 10,452 
HEADLANDS OP-CO LLC 10,125 
MS Private Loan Fund I, LP 10,000 
PTL US Bidco, Inc 9,542 
JTI Electrical & Mechanical, LLC 8,421 
AMEREQUIP LLC. 7,704 
NinjaTrader, LLC 7,472 
Paragon Healthcare, Inc. 6,490 
Archer Systems, LLC 6,315 
Veregy Consolidated, Inc. 5,875 
SI East, LLC 5,250 
Watterson Brands, LLC 5,028 
Bolder Panther Group, LLC 5,000 
Pearl Meyer Topco LLC 5,000 
NWN Corporation 4,819 
Robbins Bros. Jewelry, Inc. 4,500 
South Coast Terminals Holdings, LLC 4,465 
AB Centers Acquisition Corporation 4,448 
Winter Services LLC 4,444 
Adams Publishing Group, LLC 4,335 
Bettercloud, Inc. 4,189 
MonitorUS Holding, LLC 3,614 
Microbe Formulas, LLC 3,601 
MB2 Dental Solutions, LLC 3,500 
GRT Rubber Technologies LLC 3,350 
SPAU Holdings, LLC 3,194 
Cody Pools, Inc. 2,950 
AVEX Aviation Holdings, LLC 2,880 
Batjer TopCo, LLC 2,700 
GULF PACIFIC ACQUISITION, LLC 2,525 
Infolinks Media Buyco, LLC 2,520 
Engineering Research & Consulting, LLC 2,501 
Nebraska Vet AcquireCo, LLC 2,500 
Mako Steel, LP 2,414 
West Star Aviation Acquisition, LLC 2,411 
VVS Holdco, LLC 2,400 
Centre Technologies Holdings, LLC 2,400 
IG Parent Corporation 2,057 
PPL RVs, Inc. 2,000 
The Affiliati Network, LLC 2,000 
Evergreen North America Acquisitions, LLC 1,854 
ATS Operating, LLC 1,800 
Career Team Acquireco LLC 1,800 
Johnson Downie Opco, LLC 1,800 
Burning Glass Intermediate Holding Company, Inc. 1,704 
Chamberlin Holding LLC 1,600 
Colonial Electric Company LLC 1,600 
Trantech Radiator Topco, LLC 1,600 
Roof Opco, LLC 1,556 
American Health Staffing Group, Inc. 1,333 
RA Outdoors LLC 1,278 
Project Eagle Holdings, LLC 1,250 
Gamber-Johnson Holdings, LLC 1,200 
KMS, LLC 1,086 
Channel Partners Intermediateco, LLC 1,032 
RTIC Subsidiary Holdings, LLC 890 
Hawk Ridge Systems, LLC 815 
Acumera, Inc. 801 
Mystic Logistics Holdings, LLC 800 
Orttech Holdings, LLC 800 
Project BarFly, LLC 760 
DTE Enterprises, LLC 750 
Student Resource Center, LLC 750 
Jensen Jewelers of Idaho, LLC 500 
Flip Electronics LLC 491 
Interface Security Systems, L.L.C 439 
ASC Interests, LLC 400 
Flame King Holdings, LLC 400 
Gulf Publishing Holdings, LLC 400 
Wall Street Prep, Inc. 400 
Invincible Boat Company, LLC. 353 
SIB Holdings, LLC 267 
Dynamic Communities, LLC 250 
Classic H&G Holdco, LLC 240 
Datacom, LLC 227 
Acousti Engineering Company of Florida 53 
      Total Loan Commitments 270,384 
      Total Commitments $ 294,862 
____________________
(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 three 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.
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 Facility). 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 September 30, 2022.
Main Street has one operating lease for its office space. The lease commenced May 15, 2017 and expires March 31, 2034. It contains two five-year extension options for a final expiration date of March 31, 2044.
In accordance with ASC 842, Main Street has recorded this lease as a right-of-use asset and a lease liability and records lease expense on a straight-line basis.
Total operating lease cost incurred by Main Street for each of the three months ended September 30, 2022 and 2021 was $0.2 million and for each of the nine months ended September 30, 2022 and 2021 was $0.5 million. As of September 30, 2022, the asset related to the operating lease was $3.4 million and is included in the interest receivable and other assets balance on the Consolidated Balance Sheets. The lease liability was $4.0 million and is included in the accounts payable and other liabilities balance on the Consolidated Balance Sheets. As of September 30, 2022, the remaining lease term was 5.3 years and the discount rate was 4.2%.
The following table shows future minimum payments under Main Street’s operating lease as of September 30, 2022 (in thousands):
For the Years Ended December 31,
 Amount
2022 $ 197 
2023 804 
2024 818 
2025 832 
2026 846 
Thereafter 933 
Total $ 4,430 
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.