Annual report pursuant to Section 13 and 15(d)

COMMITMENTS AND CONTINGENCIES

v3.22.4
COMMITMENTS AND CONTINGENCIES
 12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES
At December 31, 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 $ 6,197 
Freeport Financial SBIC Fund LP 3,841 
$ 10,038 
Harris Preston Fund Investments
HPEP 4, L.P. $ 7,668 
HPEP 3, L.P. 1,555 
HPEP 423 COR, LP 600 
2717 MH, L.P. 52 
$ 9,875 
MS Private Loan Fund I, LP $ 750 
UnionRock Energy Fund II, LP $ 2,124 
     Total Equity Commitments (1)(2) $ 26,087 
Investments with commitments to fund revolving loans that have not been fully drawn or term loans with additional commitments not yet funded:
Dalton US Inc. $ 18,985 
Xenon Arc, Inc. 12,406 
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 
SI East, LLC 7,500 
NinjaTrader, LLC 7,472 
Archer Systems, LLC 7,115 
Veregy Consolidated, Inc. 5,875 
Watterson Brands, LLC 5,028 
Pearl Meyer Topco LLC 5,000 
Paragon Healthcare, Inc. 4,867 
Robbins Bros. Jewelry, Inc. 4,500 
South Coast Terminals Holdings, LLC 4,465 
Winter Services LLC 4,444 
Channel Partners Intermediateco, LLC 4,346 
Direct Marketing Solutions, Inc. 4,250 
Bettercloud, Inc. 4,189 
AB Centers Acquisition Corporation 3,707 
AVEX Aviation Holdings, LLC 3,684 
Microbe Formulas, LLC 3,601 
Classic H&G Holdco, LLC 3,440 
Bluestem Brands, Inc. 3,365 
MonitorUS Holding, LLC 3,322 
VVS Holdco, LLC 3,200 
SPAU Holdings, LLC 3,194 
Adams Publishing Group, LLC 3,153 
MetalForming AcquireCo, LLC 2,795 
Batjer TopCo, LLC 2,700 
GRT Rubber Technologies LLC 2,680 
Infolinks Media Buyco, LLC 2,520 
Nebraska Vet AcquireCo, LLC 2,500 
Engineering Research & Consulting, LLC 2,490 
CaseWorthy, Inc. 2,459 
West Star Aviation Acquisition, LLC 2,411 
Centre Technologies Holdings, LLC 2,400 
Burning Glass Intermediate Holding Company, Inc. 2,323 
GULF PACIFIC ACQUISITION, LLC 2,272 
RTIC Subsidiary Holdings, LLC 2,063 
MB2 Dental Solutions, LLC 2,023 
PPL RVs, Inc. 2,000 
The Affiliati Network, LLC 1,880 
Elgin AcquireCo, LLC 1,877 
Evergreen North America Acquisitions, LLC 1,854 
IG Parent Corporation 1,802 
ATS Operating, LLC 1,800 
Career Team Holdings, LLC 1,800 
Johnson Downie Opco, LLC 1,800 
Chamberlin Holding LLC 1,600 
Colonial Electric Company LLC 1,600 
Trantech Radiator Topco, LLC 1,600 
Cody Pools, Inc. 1,488 
American Health Staffing Group, Inc. 1,333 
RA Outdoors LLC 1,278 
Project Eagle Holdings, LLC 1,250 
Roof Opco, LLC 1,244 
Gamber-Johnson Holdings, LLC 1,200 
Eastern Wholesale Fence LLC 1,115 
KMS, LLC 1,086 
Mako Steel, LP 953 
Hawk Ridge Systems, LLC 815 
Mystic Logistics Holdings, LLC 800 
Orttech Holdings, LLC 800 
Project BarFly, LLC 760 
DTE Enterprises, LLC 750 
Market Force Information, LLC 725 
Jensen Jewelers of Idaho, LLC 500 
Invincible Boat Company, LLC. 457 
NWN Corporation 438 
Flame King Holdings, LLC 400 
Gulf Publishing Holdings, LLC 400 
Wall Street Prep, Inc. 400 
Jackmont Hospitality, Inc. 400 
Clad-Rex Steel, LLC 400 
Acousti Engineering Company of Florida 53 
Acumera, Inc. 15 
      Total Loan Commitments $ 248,309 
      Total Commitments $ 274,396 
____________________
(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 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, 2022.
As of December 31, 2022, Main Street had one operating lease for its office space that commenced May 15, 2017, was amended on April 25, 2022, expires March 31, 2034, and 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 years ended December 31, 2022, 2021 and 2020 was $0.7 million. As of December 31, 2022, the asset related to the operating lease was $8.7 million and is included in the interest receivable and other assets balance on the Consolidated Balance Sheets. The lease liability was $11.1 million and is included in the accounts payable and other liabilities balance, net of tenant improvement allowances, on the Consolidated Balance Sheets. As of December 31, 2022, the remaining lease term was 11.3 years and the discount rate was 2.0%.
The following table shows future minimum payments under Main Street’s operating lease as of December 31, 2022 (in thousands):
For the Years Ended December 31, Amount
2023 $ 389 
2024 1,020 
2025 1,115 
2026 1,135 
2027 1,155 
Thereafter 7,673 
Total lease payments 12,487 
Less: lease payments representing interest (1,434)
Present value of lease liabilities $ 11,053 
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.