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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 JuneSeptember 30, 2016

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: 001-33723

Main Street Capital Corporation
(Exact name of registrant as specified in its charter)

Maryland
(State or other jurisdiction of
incorporation or organization)
 41-2230745
(I.R.S. Employer
Identification No.)

1300 Post Oak Boulevard, 8th floor
Houston, TX
(Address of principal executive offices)

 

77056
(Zip Code)

(713) 350-6000
(Registrant's telephone number including area code)

n/a
(Former name, former address and former fiscal year, if changed since last report)

        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 o

        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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o    No o

        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 filerý Accelerated filero Non-accelerated filero Smaller reporting companyo

        Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No ý

        The number of shares outstanding of the issuer's common stock as of August 8,November 3, 2016 was 52,448,188.53,036,148.

   


Table of Contents


TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION

Item 1.

 

Consolidated Financial Statements

    

 

Consolidated Balance Sheets—JuneSeptember 30, 2016 (unaudited) and December 31, 2015

  1 

 

Consolidated Statements of Operations (unaudited)—Three and sixnine months ended JuneSeptember 30, 2016 and 2015

  2 

 

Consolidated Statements of Changes in Net Assets (unaudited)—SixNine months ended JuneSeptember 30, 2016 and 2015

  3 

 

Consolidated Statements of Cash Flows (unaudited)—SixNine months ended JuneSeptember 30, 2016 and 2015

  4 

 

Consolidated Schedule of Investments (unaudited)—JuneSeptember 30, 2016

  5 

 

Consolidated Schedule of Investments—December 31, 2015

  3433 

 

Notes to Consolidated Financial Statements (unaudited)

  6360 

 

Consolidated Financial Statement Schedule

    

 

Consolidated Schedule of Investments in and Advances to Affiliates for the SixNine Months Ended JuneSeptember 30, 2016

  106104 

Item 2.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

  111109 

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

  133 

Item 4.

 

Controls and Procedures

  134 


PART II
OTHER INFORMATION

Item 1.

 

Legal Proceedings

  135 

Item 1A.

 

Risk Factors

  135 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

  135 

Item 6.

 

Exhibits

  135 

 

Signatures

  136 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

(dollars in thousands, except shares and per share amounts)


 June 30,
2016
 December 31,
2015
  September 30,
2016
 December 31,
2015
 

 (Unaudited)
  
  (Unaudited)
  
 

ASSETS

          

Portfolio investments at fair value:

 
 
 
 
  
 
 
 
 

Control investments (cost: $410,816 and $387,727 as of June 30, 2016 and December 31, 2015, respectively)

 $570,409 $555,011 

Affiliate investments (cost: $377,060 and $333,728 as of June 30, 2016 and December 31, 2015, respectively)

 358,483 350,519 

Non-Control/Non-Affiliate investments (cost: $1,005,044 and $945,187 as of June 30, 2016 and December 31, 2015, respectively)

 959,246 894,466 

Control investments (cost: $401,190 and $387,727 as of September 30, 2016 and December 31, 2015, respectively)

 $547,651 $555,011 

Affiliate investments (cost: $368,553 and $333,728 as of September 30, 2016 and December 31, 2015, respectively)

 352,873 350,519 

Non-Control/Non-Affiliate investments (cost: $1,046,923 and $945,187 as of September 30, 2016 and December 31, 2015, respectively)

 1,019,743 894,466 

Total portfolio investments (cost: 1,792,920 and $1,666,642 as of June 30, 2016 and December 31, 2015, respectively)

 1,888,138 1,799,996 

Marketable securities and idle funds investments (cost: $1,712 and $5,407 as of June 30, 2016 and December 31, 2015, respectively)

 1,583 3,693 

Total portfolio investments (cost: $1,816,666 and $1,666,642 as of September 30, 2016 and December 31, 2015, respectively)

 1,920,267 1,799,996 

Marketable securities and idle funds investments (cost: $0 and $5,407 as of September 30, 2016 and December 31, 2015, respectively)

  3,693 

Total investments (cost: $1,794,632 and $1,672,049 as of June 30, 2016 and December 31, 2015, respectively)

 1,889,721 1,803,689 

Total investments (cost: $1,816,666 and $1,672,049 as of September 30, 2016 and December 31, 2015, respectively)

 1,920,267 1,803,689 

Cash and cash equivalents

 
18,694
 
20,331
  
31,782
 
20,331
 

Interest receivable and other assets

 33,478 27,737  33,500 27,737 

Receivable for securities sold

 23,369 9,901  503 9,901 

Deferred financing costs (net of accumulated amortization of $10,252 and $8,965 as of June 30, 2016 and December 31, 2015, respectively)

 12,007 13,267 

Deferred financing costs (net of accumulated amortization of $10,896 and $8,965 as of September 30, 2016 and December 31, 2015, respectively)

 12,259 13,267 

Deferred tax asset, net

 7,767 4,003  9,199 4,003 

Total assets

 $1,985,036 $1,878,928  $2,007,510 $1,878,928 

LIABILITIES

          

Credit facility

 
$

350,000
 
$

291,000
  
$

313,000
 
$

291,000
 

SBIC debentures (par: $225,000 as of June 30, 2016 and December 31, 2015, par of $75,200 is recorded at a fair value of $73,879 and $73,860 as of June 30, 2016 and December 31, 2015, respectively)

 223,679 223,660 

SBIC debentures (par: $231,000 ($15,000 due within one year) and $225,000 as of September 30, 2016 and December 31, 2015, respectively. Par of $75,200 is recorded at a fair value of $74,680 and $73,860 as of September 30, 2016 and December 31, 2015, respectively)

 230,480 223,660 

4.50% Notes

 175,000 175,000  175,000 175,000 

6.125% Notes

 90,655 90,738  90,655 90,738 

Accounts payable and other liabilities

 9,313 12,292  11,581 12,292 

Payable for securities purchased

 22,522 2,311  29,100 2,311 

Interest payable

 5,391 3,959  3,561 3,959 

Dividend payable

 9,364 9,074  9,783 9,074 

Total liabilities

 885,924 808,034  863,160 808,034 

Commitments and contingencies (Note M)

 
 
 
 
  
 
 
 
 

NET ASSETS

 
 
 
 
  
 
 
 
 

Common stock, $0.01 par value per share (150,000,000 shares authorized; 51,993,135 and 50,413,744 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively)

 
521
 
504
 

Common stock, $0.01 par value per share (150,000,000 shares authorized; 52,901,113 and 50,413,744 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively)

 
529
 
504
 

Additional paid-in capital

 1,059,466 1,011,467  1,090,197 1,011,467 

Accumulated net investment income, net of cumulative dividends of $457,230 and $417,347 as of June 30, 2016 and December 31, 2015, respectively

 22,111 7,181 

Accumulated net realized gain from investments (accumulated net realized gain from investments of $48,065 before cumulative dividends of $98,103 as of June 30, 2016 and accumulated net realized gain from investments of $19,005 before cumulative dividends of $68,658 as of December 31, 2015)

 (50,038) (49,653)

Accumulated net investment income, net of cumulative dividends of $471,478 and $417,347 as of September 30, 2016 and December 31, 2015, respectively

 38,421 7,181 

Accumulated net realized gain from investments (accumulated net realized gain from investments of $52,352 before cumulative dividends of $112,539 as of September 30, 2016 and accumulated net realized gain from investments of $19,005 before cumulative dividends of $68,658 as of December 31, 2015)

 (60,187) (49,653)

Net unrealized appreciation, net of income taxes

 67,052 101,395  75,390 101,395 

Total net assets

 1,099,112 1,070,894  1,144,350 1,070,894 

Total liabilities and net assets

 $1,985,036 $1,878,928  $2,007,510 $1,878,928 

NET ASSET VALUE PER SHARE

 $21.11 $21.24  $21.62 $21.24 

   

The accompanying notes are an integral part of these financial statements


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Operations

(dollars in thousands, except shares and per share amounts)

(Unaudited)


 Three Months Ended
June 30,
 Six Months Ended
June 30,
  Three Months Ended
September 30,
 Nine Months Ended
September 30,
 

 2016 2015 2016 2015  2016 2015 2016 2015 

INVESTMENT INCOME:

                  

Interest, fee and dividend income:

                  

Control investments

 $12,957 $11,492 $25,572 $22,827  $14,826 $13,437 $40,398 $36,264 

Affiliate investments

 8,952 6,961 17,476 13,010  9,619 6,852 27,095 19,862 

Non-Control/Non-Affiliate investments

 20,956 22,613 41,693 42,034  22,149 22,090 63,841 64,124 

Interest, fee and dividend income

 42,865 41,066 84,741 77,871  46,594 42,379 131,334 120,250 

Interest, fee and dividend income from marketable securities and idle funds investments

 37 242 168 616  5 229 174 846 

Total investment income

 42,902 41,308 84,909 78,487  46,599 42,608 131,508 121,096 

EXPENSES:

                  

Interest

 (8,255) (7,657) (16,437) (15,453) (8,573) (8,302) (25,010) (23,755)

Compensation

 (3,952) (3,835) (7,772) (7,328) (4,309) (3,727) (12,081) (11,055)

General and administrative

 (2,157) (2,098) (4,562) (4,060) (2,247) (2,212) (6,808) (6,271)

Share-based compensation

 (2,251) (1,679) (3,840) (2,942) (2,137) (1,651) (5,977) (4,592)

Expenses allocated to the External Investment Manager

 1,361 1,162 2,515 1,988  1,224 1,145 3,739 3,133 

Total expenses

 (15,254) (14,107) (30,096) (27,795) (16,042) (14,747) (46,137) (42,540)

NET INVESTMENT INCOME

 27,648 27,201 54,813 50,692  30,557 27,861 85,371 78,556 

NET REALIZED GAIN (LOSS):

 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 

Control investments

  3,324 14,358 3,324  17,862  32,220 3,324 

Affiliate investments

 28,707 (136) 28,707 (137) (3,447) 5,964 25,260 5,827 

Non-Control/Non-Affiliate investments

 (13,237) (8,633) (12,419) (10,640) (10,033) (6,195) (22,452) (16,836)

Marketable securities and idle funds investments

 (13) (128) (1,586) (240) (96) (1,112) (1,681) (1,352)

Total net realized gain (loss)

 15,457 (5,573) 29,060 (7,693) 4,286 (1,343) 33,347 (9,037)

NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):

                  

Portfolio investments

 (10,585) 15,901 (38,114) 30,105  8,376 (8,389) (29,738) 21,716 

Marketable securities and idle funds investments

 37 (123) 1,494 127  235 (648) 1,729 (521)

SBIC debentures

 127 (80) (19) (772) (801) (50) (820) (823)

Total net change in unrealized appreciation (depreciation)

 (10,421) 15,698 (36,639) 29,460  7,810 (9,087) (28,829) 20,372 

INCOME TAXES:

                  

Federal and state income, excise and other taxes

 (1,098) (1,665) (1,468) (2,042) (904) 495 (2,372) (1,547)

Deferred taxes

 (675) 5,141 1,958 5,810  1,432 2,742 3,390 8,551 

Income tax benefit (provision)

 (1,773) 3,476 490 3,768 

Income tax benefit

 528 3,237 1,018 7,004 

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

 $30,911 $40,802 $47,724 $76,227  $43,181 $20,668 $90,907 $96,895 

NET INVESTMENT INCOME PER SHARE—BASIC AND DILUTED

 $0.54 $0.55 $1.07 $1.06  $0.58 $0.56 $1.66 $1.61 

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE—BASIC AND DILUTED

 $0.60 $0.82 $0.94 $1.59  $0.82 $0.41 $1.76 $1.99 

DIVIDENDS PAID PER SHARE:

                  

Regular monthly dividends

 $0.540 $0.525 $1.080 $1.035  $0.540 $0.525 $1.620 $1.560 

Supplemental dividends

 0.275 0.275 0.275 0.275    0.275 0.275 

Total dividends

 $0.815 $0.800 $1.355 $1.310  $0.540 $0.525 $1.895 $1.835 

WEIGHTED AVERAGE SHARES OUTSTANDING—BASIC AND DILUTED

 51,441,371 49,883,321 50,995,575 47,992,268  52,613,277 50,036,776 51,538,745 48,681,260 

   

The accompanying notes are an integral part of these financial statements


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Changes in Net Assets

(dollars in thousands, except shares)

(Unaudited)


 Common Stock  
  
 Accumulated
Net Realized
Gain From
Investments,
Net of Dividends
 Net Unrealized
Appreciation from
Investments,
Net of Income
Taxes
  
  Common Stock  
  
 Accumulated
Net Realized
Gain From
Investments,
Net of Dividends
 Net Unrealized
Appreciation from
Investments,
Net of Income
Taxes
  
 

  
 Accumulated
Net Investment
Income, Net
of Dividends
  
   
 Accumulated
Net Investment
Income, Net
of Dividends
  
 

 Number of
Shares
 Par
Value
 Additional
Paid-In
Capital
 Net Unrealized
Appreciation from
Investments,
Net of Income
Taxes
  Number of
Shares
 Par
Value
 Additional
Paid-In
Capital
 Net Unrealized
Appreciation from
Investments,
Net of Income
Taxes
 

Balances at December 31, 2014

 45,079,150 $451 $853,606 $23,665 $(20,456)$82,716  45,079,150 $451 $853,606 $23,665 $(20,456)$82,716 

Public offering of common stock, net of offering costs

 
4,370,000
 
44
 
127,720
 
 
 
  
4,370,000
 
44
 
127,720
 
 
 
 

Share-based compensation

   2,942    2,942    4,592    4,592 

Purchase of vested stock for employee payroll tax withholding

 (54,790) (1) (1,737)    (1,738) (54,840) (1) (1,739)    (1,740)

Dividend reinvestment

 304,100 3 9,394    9,397  444,957 4 13,654    13,658 

Amortization of directors' deferred compensation

   185    185    292    292 

Issuance of restricted stock

 240,074 2 (2)     

Issuance of restricted stock, net of forfeited shares

 239,911 2 (2)     

Dividends to stockholders

    (62,624) (1,319)  (63,943)    (88,294) (2,168)  (90,462)

Net increase (loss) resulting from operations

    50,692 (7,693) 33,228 76,227     78,556 (9,037) 27,376 96,895 

Balances at June 30, 2015

 49,938,534 $499 $992,108 $11,733 $(29,468)$115,944 $1,090,816 

Balances at September 30, 2015

 50,079,178 $500 $998,123 $13,927 $(31,661)$110,092 $1,090,981 

Balances at December 31, 2015

 50,413,744 $504 $1,011,467 $7,181 $(49,653)$101,395 $1,070,894  50,413,744 $504 $1,011,467 $7,181 $(49,653)$101,395 $1,070,894 

Public offering of common stock, net of offering costs

 
1,225,757
 
12
 
38,642
 
 
 
 
38,654
  
1,996,793
 
20
 
64,239
 
 
 
 
64,259
 

Share-based compensation

   3,840    3,840    5,977    5,977 

Purchase of vested stock for employee payroll tax withholding

 (80,750) (1) (2,592)    (2,593) (80,750) (1) (2,592)    (2,593)

Dividend reinvestment

 255,391 3 7,811    7,814  339,544 3 10,645    10,648 

Amortization of directors' deferred compensation

   301    301    464    464 

Issuance of restricted stock, net of forfeited shares

 260,668 3 (3)      262,586 3 (3)     

Dividends to stockholders

    (39,883) (29,445)  (69,328)    (54,131) (43,881)  (98,012)

Cumulative-effect to retained earnings for excess tax benefit

      1,806 1,806       1,806 1,806 

Net increase (loss) resulting from operations

    54,813 29,060 (36,149) 47,724     85,371 33,347 (27,811) 90,907 

Balances at June 30, 2016

 52,074,810 $521 $1,059,466 $22,111 $(50,038)$67,052 $1,099,112 

Balances at September 30, 2016

 52,931,917 $529 $1,090,197 $38,421 $(60,187)$75,390 $1,144,350 

   

The accompanying notes are an integral part of these financial statements


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Cash Flows

(dollars in thousands)

(Unaudited)


 Six Months Ended
June 30,
  Nine Months Ended
September 30,
 

 2016 2015  2016 2015 

CASH FLOWS FROM OPERATING ACTIVITIES

          

Net increase in net assets resulting from operations

 $47,724 $76,227  $90,907 $96,895 

Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:

     

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:

     

Investments in portfolio companies

 (303,049) (483,365) (420,036) (727,099)

Proceeds from sales and repayments of debt investments in portfolio companies

 167,809 324,309  274,907 421,933 

Proceeds from sales and return of capital of equity investments in portfolio companies

 48,952 16,174  73,017 29,289 

Investments in marketable securities and idle funds investments

  (3,463) (523) (4,483)

Proceeds from sales and repayments of marketable securities and idle funds investments

 2,129 3,566  4,316 7,094 

Net change in net unrealized (appreciation) depreciation

 36,639 (29,460) 28,829 (20,372)

Net realized (gain) loss

 (29,060) 7,693  (33,347) 9,037 

Accretion of unearned income

 (4,189) (4,397) (7,073) (6,474)

Payment-in-kind interest

 (3,042) (1,534) (4,911) (2,485)

Cumulative dividends

 (638) (734) (1,470) (1,242)

Share-based compensation expense

 3,840 2,942  5,977 4,592 

Amortization of deferred financing costs

 1,288 1,263  1,931 1,899 

Deferred tax benefit

 (1,958) (5,810) (3,390) (8,551)

Changes in other assets and liabilities:

          

Interest receivable and other assets

 (1,825) (1,092) (685) (3,493)

Interest payable

 1,432 615  (398) 147 

Accounts payable and other liabilities

 (2,774) (3,211) (247) (1,618)

Deferred fees and other

 1,362 1,024  1,644 1,438 

Net cash used in operating activities

 (35,360) (99,253)

Net cash provided by (used in) operating activities

 9,448 (203,493)

CASH FLOWS FROM FINANCING ACTIVITIES

 
 
 
 
  
 
 
 
 

Proceeds from public offering of common stock, net of offering costs

 38,654 127,764  64,259 127,764 

Dividends paid

 (61,225) (53,470) (86,655) (75,453)

Proceeds from issuance of SBIC debentures

 6,000  

Proceeds from credit facility

 203,000 301,000  254,000 473,000 

Repayments on credit facility

 (144,000) (293,000) (232,000) (345,000)

Payment of deferred loan costs and SBIC debenture fees

 (925) (132)

Purchases of vested stock for employee payroll tax withholding

 (2,593) (1,738) (2,593) (1,740)

Other

 (113) (143) (83) (83)

Net cash provided by financing activities

 33,723 80,413  2,003 178,356 

Net decrease in cash and cash equivalents

 (1,637) (18,840)

Net increase (decrease) in cash and cash equivalents

 11,451 (25,137)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 20,331 60,432  20,331 60,432 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 $18,694 $41,592  $31,782 $35,295 

Supplemental cash flow disclosures:

          

Interest paid

 $13,646 $13,575  $23,368 $21,708 

Taxes paid

 $1,575 $2,219  $1,762 $2,504 

Non-cash financing activities:

          

Shares issued pursuant to the DRIP

 $7,814 $9,397  $10,648 $13,658 

   

The accompanying notes are an integral part of these financial statements


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
  Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 
 

Control Investments(5)

 

 

 

 

        

 

 

 

       

    

Access Media Holdings, LLC(10)

 

Private Cable Operator

        

Private Cable Operator

       

  

5% Current / 5% PIK Secured Debt (Maturity—July 22, 2020)

 $22,099 $22,099 $20,440   

5% Current / 5% PIK Secured Debt (Maturity—July 22, 2020)

 $22,380 $22,380 $19,720 

  

Preferred Member Units (5,805,000 units; 12% cumulative)

   5,699 780   

Preferred Member Units (6,232,500 units; 12% cumulative)

   6,126 250 

  

Member Units (45 units)

   1    

Member Units (45 units)

   1  

    27,799 21,220     28,507 19,970 

    

AmeriTech College, LLC

 

For-Profit Nursing and Healthcare College

        

For-Profit Nursing and Healthcare College

       

  

10% Secured Debt (Maturity—November 30, 2019)

 1,004 1,004 1,004   

10% Secured Debt (Maturity—November 30, 2019)

 1,004 1,004 1,004 

  

10% Secured Debt (Maturity—January 31, 2020)

 3,025 3,025 3,025   

10% Secured Debt (Maturity—January 31, 2020)

 3,025 3,025 3,025 

  

Preferred Member Units (294 units; 5%)(8)

   2,291 2,291   

Preferred Member Units (294 units; 5%)(8)

   2,291 2,291 

    6,320 6,320     6,320 6,320 

    

ASC Interests, LLC

 

Recreational and Educational Shooting Facility

        

Recreational and Educational Shooting Facility

       

  

11% Secured Debt (Maturity—July 31, 2018)

 2,250 2,227 2,250   

11% Secured Debt (Maturity—July 31, 2018)

 2,250 2,230 2,250 

  

Member Units (1,500 units)(8)

   1,500 2,680   

Member Units (1,500 units)(8)

   1,500 2,680 

    3,727 4,930     3,730 4,930 

    

Bond-Coat, Inc.

 

Casing and Tubing Coating Services

       

Bond-Coat, Inc.

 

Casing and Tubing Coating Services

       

  

12% Secured Debt (Maturity—December 28, 2017)

 11,596 11,538 11,596   

12% Secured Debt (Maturity—December 28, 2017)

 11,596 11,547 11,596 

  

Common Stock (57,508 shares)

   6,350 5,090   

Common Stock (57,508 shares)

   6,350 5,090 

    17,888 16,686     17,897 16,686 

    

Café Brazil, LLC

 

Casual Restaurant Group

        

Casual Restaurant Group

       

  

Member Units (1,233 units)(8)

   1,742 6,570   

Member Units (1,233 units)(8)

   1,742 6,570 

    

CBT Nuggets, LLC

 

Produces and Sells IT Training Certification Videos

        

Produces and Sells IT Training Certification Videos

       

  

Member Units (416 units)(8)

   1,300 50,100   

Member Units (416 units)(8)

   1,300 52,800 

    

CMS Minerals Investments

 

Oil & Gas Exploration & Production

        

Oil & Gas Exploration & Production

       

  

Preferred Member Units (CMS Minerals LLC) (458 units)(8)

   2,339 4,048   

Preferred Member Units (CMS Minerals LLC) (458 units)(8)

   2,207 3,371 

  

Member Units (CMS Minerals II, LLC) (100 units)(8)

   4,050 3,988   

Member Units (CMS Minerals II, LLC) (100 units)(8)

   3,955 3,893 

    6,389 8,036     6,162 7,264 

    

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
  Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 
 

Datacom, LLC

 

Technology and Telecommunications Provider

        

Technology and Telecommunications Provider

       

  

8% Secured Debt (Maturity—May 30, 2017)

 450 450 450   

8% Secured Debt (Maturity—May 30, 2017)

 900 900 900 

  

5.25% Current / 5.25% PIK Secured Debt (Maturity—May 30, 2019)

 11,405 11,333 10,730   

5.25% Current / 5.25% PIK Secured Debt (Maturity—May 30, 2019)

 11,558 11,491 10,888 

  

Class A Preferred Member Units (15% cumulative)(8)

   1,181 1,270   

Class A Preferred Member Units (15% cumulative)(8)

   1,181 1,318 

  

Class B Preferred Member Units (6,453 units)

   6,030 2,594   

Class B Preferred Member Units (6,453 units)

   6,030 1,769 

    18,994 15,044     19,602 14,875 

    

Gamber-Johnson Holdings, LLC

 

Manufacturer of Ruggedized Computer Mounting Systems

        

Manufacturer of Ruggedized Computer Mounting Systems

       

  

LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 12.00%, Secured Debt (Maturity—June 24, 2021)(9)

 20,000 19,791 19,791   

LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 12.00%, Secured Debt (Maturity—June 24, 2021)(9)

 20,000 19,798 19,798 

  

Member Units (7,040 units)

   12,124 12,124   

Member Units (7,040 units)

   12,124 12,124 

    31,915 31,915     31,922 31,922 

    

Garreco, LLC

 

Manufacturer and Supplier of Dental Products

        

Manufacturer and Supplier of Dental Products

       

  

14% Secured Debt (Maturity—January 12, 2018)

 5,800 5,752 5,752   

14% Secured Debt (Maturity—January 12, 2018)

 5,550 5,511 5,511 

  

Member Units (1,200 units)(8)

   1,200 1,090   

Member Units (1,200 units)(8)

   1,200 1,150 

    6,952 6,842     6,711 6,661 

    

GRT Rubber Technologies LLC

 

Manufacturer of Engineered Rubber Products

        

Manufacturer of Engineered Rubber Products

       

  

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—December 19, 2019)(9)

 13,693 13,592 13,693   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—December 19, 2019)(9)

 13,484 13,390 13,484 

  

Member Units (5,879 units)

   13,065 18,030   

Member Units (5,879 units)(8)

   13,065 18,030 

    26,657 31,723     26,455 31,514 

    

Gulf Manufacturing, LLC

 

Manufacturer of Specialty Fabricated Industrial Piping Products

        

Manufacturer of Specialty Fabricated Industrial Piping Products

       

  

9% PIK Secured Debt (Ashland Capital IX, LLC) (Maturity—June 30, 2017)

 777 777 777   

9% PIK Secured Debt (Ashland Capital IX, LLC) (Maturity—June 30, 2017)

 777 777 777 

  

Member Units (438 units)(8)

   2,980 8,770   

Member Units (438 units)

   2,980 8,770 

    3,757 9,547     3,757 9,547 

    

Gulf Publishing Holdings, LLC

 

Energy Focused Media and Publishing

        

Energy Focused Media and Publishing

       

  

12.5% Secured Debt (Maturity—April 29, 2021)

 10,000 9,904 9,904   

12.5% Secured Debt (Maturity—April 29, 2021)

 10,000 9,907 9,907 

  

Member Units (3,124 units)

   3,124 3,124   

Member Units (3,124 units)

   3,124 3,124 

    13,028 13,028     13,031 13,031 

    

Harrison Hydra-Gen, Ltd.

 

Manufacturer of Hydraulic Generators

        

Manufacturer of Hydraulic Generators

       

  

Common Stock (107,456 shares)(8)

   718 3,030   

Common Stock (107,456 shares)(8)

   718 3,340 

    

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
  Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 
 

Hawthorne Customs and Dispatch Services, LLC

 

Facilitator of Import Logistics, Brokerage, and Warehousing

        

Facilitator of Import Logistics, Brokerage, and Warehousing

       

  

Member Units (500 units)(8)

   589 280   

Member Units (500 units)

   589 280 

  

Member Units (Wallisville Real Estate, LLC) (588,210 units)(8)

   1,215 2,220   

Member Units (Wallisville Real Estate, LLC) (588,210 units)(8)

   1,215 2,040 

    1,804 2,500     1,804 2,320 

    

HW Temps LLC

 

Temporary Staffing Solutions

        

Temporary Staffing Solutions

       

  

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity July 2, 2020)(9)

 9,976 9,892 9,892   

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity July 2, 2020)(9)

 10,376 10,296 10,296 

  

Preferred Member Units (3,200 units)(8)

   3,942 4,950   

Preferred Member Units (3,200 units)(8)

   3,942 4,360 

    13,834 14,842     14,238 14,656 

    

Hydratec, Inc.

 

Designer and Installer of Micro-Irrigation Systems

        

Designer and Installer of Micro-Irrigation Systems

       

  

Common Stock (7,095 shares)(8)

   7,095 15,760   

Common Stock (7,095 shares)(8)

   7,095 15,760 

    

IDX Broker, LLC

 

Provider of Marketing and CRM Tools for the Real Estate Industry

        

Provider of Marketing and CRM Tools for the Real Estate Industry

       

  

12.5% Secured Debt (Maturity—November 15, 2018)

 11,350 11,291 11,350   

12.5% Secured Debt (Maturity—November 15, 2018)

 11,250 11,197 11,250 

  

Member Units (5,400 units)

   5,606 6,440   

Member Units (5,400 units)(8)

   5,606 6,690 

    16,897 17,790     16,803 17,940 

    

Indianapolis Aviation Partners, LLC

 

Fixed Base Operator

        

Fixed Base Operator

       

  

15% Secured Debt (Maturity—July 15, 2016)

 3,100 3,100 3,100   

15% Secured Debt (Maturity—January 15, 2017)

 3,100 3,100 3,100 

  

Warrants (1,046 equivalent units)

   1,129 2,540   

Warrants (1,046 equivalent units)

   1,129 2,649 

    4,229 5,640     4,229 5,749 

    

Jensen Jewelers of Idaho, LLC

 

Retail Jewelry Store

        

Retail Jewelry Store

       

  

Prime Plus 6.75% (Floor 2.00%), Current Coupon 10.25%, Secured Debt (Maturity—November 14, 2016)(9)

 4,355 4,343 4,355   

Prime Plus 6.75% (Floor 2.00%), Current Coupon 10.25%, Secured Debt (Maturity—November 14, 2016)(9)

 4,205 4,200 4,205 

  

Member Units (627 units)(8)

   811 5,200   

Member Units (627 units)(8)

   811 4,650 

    5,154 9,555     5,011 8,855 

    

Lamb Ventures, LLC

 

Aftermarket Automotive Services Chain

       

  

LIBOR Plus 5.75%, Current Coupon 6.27%, Secured Debt (Maturity—March 3, 2017)

 139 139 139 

  

11% Secured Debt (Maturity—May 31, 2018)

 7,735 7,735 7,735 

  

Preferred Equity (non-voting)

   400 400 

  

Member Units (742 units)(8)

   5,273 5,880 

  

9.5% Secured Debt (Lamb's Real Estate Investment I, LLC) (Maturity—October 1, 2025)

 882 882 882 

  

Member Units (Lamb's Real Estate Investment I, LLC) (1,000 units)(8)

   625 1,620 

    15,054 16,656 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
  Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 
 

Lamb Ventures, LLC

 

Aftermarket Automotive Services Chain

       

  

LIBOR Plus 5.75%, Current Coupon 6.22%, Secured Debt (Maturity—March 3, 2017)

 350 350 350 

  

11% Secured Debt (Maturity—May 31, 2018)

 7,735 7,735 7,735 

  

Preferred Equity (non-voting)

   400 400 

  

Member Units (742 units)(8)

   5,273 5,740 

  

9.5% Secured Debt (Lamb's Real Estate Investment I, LLC) (Maturity—October 1, 2025)

 894 894 894 

  

Member Units (Lamb's Real Estate Investment I, LLC) (1,000 units)(8)

   625 1,620 

    15,277 16,739 

  

Lighting Unlimited, LLC

 

Commercial and Residential Lighting Products and Design Services

        

Commercial and Residential Lighting Products and Design Services

       

  

8% Secured Debt (Maturity—August 22, 2016)

 1,514 1,514 1,514   

8% Secured Debt (Maturity—August 22, 2017)

 1,514 1,514 1,514 

  

Preferred Equity (non-voting)

   434 430   

Preferred Equity (non-voting)

   434 430 

  

Warrants (71 equivalent units)

   54 30   

Warrants (71 equivalent units)

   54 10 

  

Member Units (700 units)

   100 260   

Member Units (700 units)

   100 80 

    2,102 2,234     2,102 2,034 

    

Marine Shelters Holdings, LLC (LoneStar Marine Shelters)

 

Fabricator of Marine and Industrial Shelters

       

Marine Shelters Holdings, LLC

 

Fabricator of Marine and Industrial Shelters

       

  

12% PIK Secured Debt (Maturity—December 28, 2017)

 9,668 9,597 9,069   

12% PIK Secured Debt (Maturity—December 28, 2017)

 9,967 9,905 9,379 

  

Preferred Member Units (3,810 units)

   5,352 3,100   

Preferred Member Units (3,810 units)

   5,352 906 

    14,949 12,169     15,257 10,285 

    

MH Corbin Holding LLC

 

Manufacturer and Distributor of Traffic Safety Products

        

Manufacturer and Distributor of Traffic Safety Products

       

  

10% Secured Debt (Maturity—August 31, 2020)

 13,650 13,533 13,533   

10% Secured Debt (Maturity—August 31, 2020)

 13,475 13,365 13,365 

  

Preferred Member Units (4,000 shares)

   6,000 6,000   

Preferred Member Units (4,000 shares)

   6,000 6,000 

    19,533 19,533     19,365 19,365 

    

Mid-Columbia Lumber Products, LLC

 

Manufacturer of Finger-Jointed Lumber Products

        

Manufacturer of Finger-Jointed Lumber Products

       

  

10% Secured Debt (Maturity—December 18, 2017)

 1,750 1,750 1,750��  

10% Secured Debt (Maturity—December 18, 2017)

 1,750 1,750 1,750 

  

12% Secured Debt (Maturity—December 18, 2017)

 3,900 3,900 3,900   

12% Secured Debt (Maturity—December 18, 2017)

 3,900 3,900 3,900 

  

Member Units (2,829 units)(8)

   1,244 2,420   

Member Units (3,554 units)

   1,244 2,300 

  

9.5% Secured Debt (Mid-Columbia Real Estate, LLC) (Maturity—May 13, 2025)

 859 859 859   

9.5% Secured Debt (Mid—Columbia Real Estate, LLC) (Maturity—May 13, 2025)

 847 847 847 

  

Member Units (Mid-Columbia Real Estate, LLC) (250 units)(8)

   250 550   

Member Units (Mid—Columbia Real Estate, LLC) (250 units)(8)

   250 600 

    8,003 9,479     7,991 9,397 

    

MSC Adviser I, LLC(16)

 

Third Party Investment Advisory Services

       

  

Member Units (Fully diluted 100.0%)(8)

    30,133 

  

Mystic Logistics Holdings, LLC

 

Logistics and Distribution Services Provider for Large Volume Mailers

       

  

12% Secured Debt (Maturity—August 15, 2019)

 9,176 9,043 9,176 

  

Common Stock (5,873 shares)

   2,720 5,150 

    11,763 14,326 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
  Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 
 

MSC Adviser I, LLC(16)

 

Third Party Investment Advisory Services

       

  

Member Units (Fully diluted 100.0%)(8)

    26,912 

  

Mystic Logistics Holdings, LLC

 

Logistics and Distribution Services Provider for Large Volume Mailers

       

  

12% Secured Debt (Maturity—August 15, 2019)

 9,360 9,215 9,360 

  

Common Stock (5,873 shares)(8)

   2,720 5,390 

    11,935 14,750 

  

NAPCO Precast, LLC

 

Precast Concrete Manufacturing

        

Precast Concrete Manufacturing

       

  

Prime Plus 2.00% (Floor 7.00%), Current Coupon 9.00%, Secured Debt (Maturity—February 1, 2019)(9)

 2,713 2,688 2,713   

Prime Plus 2.00% (Floor 7.00%), Current Coupon 9.00%, Secured Debt (Maturity—February 1, 2019)(9)

 2,713 2,690 2,713 

  

18% Secured Debt (Maturity—February 1, 2019)

 3,952 3,916 3,952   

18% Secured Debt (Maturity—February 1, 2019)

 3,952 3,919 3,952 

  

Member Units (2,955 units)(8)

   2,975 9,770   

Member Units (2,955 units)(8)

   2,975 10,670 

    9,579 16,435     9,584 17,335 

    

NRI Clinical Research, LLC

 

Clinical Research Service Provider

        

Clinical Research Service Provider

       

  

14% Secured Debt (Maturity—September 8, 2017)

 4,510 4,454 4,510   

14% Secured Debt (Maturity—September 8, 2017)

 4,510 4,464 4,510 

  

Warrants (251,723 equivalent units)

   252 400   

Warrants (251,723 equivalent units)

   252 650 

  

Member Units (1,454,167 units)

   765 1,482   

Member Units (1,454,167 units)

   765 2,321 

    5,471 6,392     5,481 7,481 

    

NRP Jones, LLC

 

Manufacturer of Hoses, Fittings and Assemblies

        

Manufacturer of Hoses, Fittings and Assemblies

       

  

6% Current / 6% PIK Secured Debt (Maturity—December 22, 2016)

 13,495 13,353 13,353   

6% Current / 6% PIK Secured Debt (Maturity—December 22, 2016)

 13,703 13,631 13,631 

  

Warrants (14,331 equivalent units)

   817 130   

Warrants (14,331 equivalent units)

   817 130 

  

Member Units (50,877 units)

   2,900 410   

Member Units (50,877 units)

   2,900 410 

    17,070 13,893     17,348 14,171 

    

OMi Holdings, Inc.

 

Manufacturer of Overhead Cranes

        

Manufacturer of Overhead Cranes

       

  

Common Stock (1,500 shares)

   1,080 15,580   

Common Stock (1,500 shares)

   1,080 14,390 

    

Pegasus Research Group, LLC (Televerde)

 

Provider of Telemarketing and Data Services

       

Pegasus Research Group, LLC

 

Provider of Telemarketing and Data Services

       

  

Member Units (460 units)(8)

   1,290 8,620   

Member Units (460 units)(8)

   1,290 8,620 

    

PPL RVs, Inc.

 

Recreational Vehicle Dealer

        

Recreational Vehicle Dealer

       

  

11.1% Secured Debt (Maturity—July 1, 2016)

 9,710 9,710 9,710   

11.1% Secured Debt (Maturity—December 31, 2016)

 9,710 9,710 9,710 

  

Common Stock (1,962 shares)

   2,150 11,190   

Common Stock (1,962 shares)(8)

   2,150 11,780 

    11,860 20,900     11,860 21,490 

    

Principle Environmental, LLC

 

Noise Abatement Service Provider

       

  

12% Secured Debt (Maturity—April 30, 2017)

 4,060 4,060 4,060 

  

12% Current / 2% PIK Secured Debt (Maturity—April 30, 2017)

 3,361 3,361 3,361 

  

Preferred Member Units (19,631 units)

   4,663 4,600 

  

Warrants (1,036 equivalent units)

   1,200 20 

    13,284 12,041 

  

Quality Lease Service, LLC

 

Provider of Rigsite Accommodation Unit Rentals and Related Services

       

  

8% PIK Secured Debt (Maturity—June 8, 2020)

 6,929 6,929 6,929 

  

Member Units (1,000 units)

   818 2,888 

    7,747 9,817 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
  Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 
 

Principle Environmental, LLC

 

Noise Abatement Service Provider

       

  

12% Secured Debt (Maturity—April 30, 2017)

 4,060 4,060 4,060 

  

12% Current / 2% PIK Secured Debt (Maturity—April 30, 2017)

 3,344 3,344 3,344 

  

Preferred Member Units (19,631 units)

   4,663 4,600 

  

Warrants (1,036 equivalent units)

   1,200 20 

    13,267 12,024 

  

Quality Lease Service, LLC

 

Provider of Rigsite Accommodation Unit Rentals and Related Services

       

  

8% PIK Secured Debt (Maturity—June 8, 2020)

 6,790 6,790 6,790 

  

Member Units (1,000 units)

   568 2,638 

    7,358 9,428 

  

River Aggregates, LLC

 

Processor of Construction Aggregates

        

Processor of Construction Aggregates

       

  

Zero Coupon Secured Debt (Maturity—June 30, 2018)

 750 591 591   

Zero Coupon Secured Debt (Maturity—June 30, 2018)

 750 609 609 

  

Member Units (1,150 units)(8)

   1,150 4,600   

Member Units (1,150 units)(8)

   1,150 4,600 

  

Member Units (RA Properties, LLC) (1,500 units)

   369 2,440   

Member Units (RA Properties, LLC) (1,500 units)

   369 2,510 

    2,110 7,631     2,128 7,719 

    

SoftTouch Medical Holdings LLC

 

Home Provider of Pediatric Durable Medical Equipment

        

Home Provider of Pediatric Durable Medical Equipment

       

  

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—October 31, 2019)(9)

 7,650 7,595 7,650   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—October 31, 2019)(9)

 7,225 7,177 7,225 

  

Member Units (4,450 units)(8)

   4,930 8,570   

Member Units (4,450 units)(8)

   4,930 8,670 

    12,525 16,220     12,107 15,895 

    

The MPI Group, LLC

 

Manufacturer of Custom Hollow Metal Doors, Frames and Accessories

        

Manufacturer of Custom Hollow Metal Doors, Frames and Accessories

       

  

9% Secured Debt (Maturity—October 2, 2018)

 2,924 2,921 2,921   

9% Secured Debt (Maturity—October 2, 2018)

 2,924 2,922 2,922 

  

Series A Preferred Units (2,500 units; 10% Cumulative)

   2,500 500   

Series A Preferred Units (2,500 units; 10% Cumulative)

   2,500 360 

  

Warrants (1,424 equivalent units)

   1,096    

Warrants (1,424 equivalent units)

   1,096  

  

Member Units (MPI Real Estate Holdings, LLC) (100% Fully diluted)(8)

   2,300 2,300   

Member Units (MPI Real Estate Holdings, LLC) (100% Fully diluted)(8)

   2,300 2,300 

    8,817 5,721     8,818 5,582 

    

Travis Acquisition LLC

 

Manufacturer of Aluminum Trailers

       

Uvalco Supply, LLC

 

Farm and Ranch Supply Store

       

  

12% Secured Debt (Maturity—August 30, 2018)

 3,245 3,212 3,245   

9% Secured Debt (Maturity—January 1, 2019)

 986 986 986 

  

Member Units (7,282 units)

   7,100 20,370   

Member Units (2,011 units)(8)

   3,843 4,860 

    10,312 23,615     4,829 5,846 

    

Vision Interests, Inc.

 

Manufacturer / Installer of Commercial Signage

       

  

13% Secured Debt (Maturity—December 23, 2016)

 2,889 2,885 2,885 

  

Series A Preferred Stock (3,000,000 shares)

   3,000 3,370 

  

Common Stock (1,126,242 shares)

   3,706 140 

    9,591 6,395 

  

Ziegler's NYPD, LLC

 

Casual Restaurant Group

       

  

6.5% Secured Debt (Maturity—October 1, 2019)

 1,000 993 993 

  

12% Secured Debt (Maturity—October 1, 2019)

 300 300 300 

  

14% Secured Debt (Maturity—October 1, 2019)

 2,750 2,750 2,750 

  

Warrants (587 equivalent units)

   600 220 

  

Preferred Member Units (10,072 units)

   2,834 3,700 

    7,477 7,963 

  

Subtotal Control Investments (28.5% of total investments at fair value)

Subtotal Control Investments (28.5% of total investments at fair value)

 $401,190 $547,651 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
  Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Affiliate Investments(6)

 

 

 

 

       
   

Uvalco Supply, LLC

 

Farm and Ranch Supply Store

       

AFG Capital Group, LLC

 

Provider of Rent-to-Own Financing Solutions and Services

       

  

9% Secured Debt (Maturity—January 1, 2019)

 1,098 1,098 1,098   

Warrants (42 equivalent units)

   $259 $620 

  

Member Units (2,011 units)(8)

   3,843 5,710   

Member Units (186 units)

   1,200 2,530 

    4,941 6,808     1,459 3,150 

    

Vision Interests, Inc.

 

Manufacturer / Installer of Commercial Signage

       

Barfly Ventures, LLC(10)

 

Casual Restaurant Group

       

  

13% Secured Debt (Maturity—December 23, 2016)

 2,964 2,955 2,955   

12% Secured Debt (Maturity—August 31, 2020)

 5,958 5,854 5,761 

  

Series A Preferred Stock (3,000,000 shares)

   3,000 3,370   

Options (2 equivalent units)

   397 420 

  

Common Stock (1,126,242 shares)

   3,706 140   

Warrant (1 equivalent unit)

   473 240 

    9,661 6,465     6,724 6,421 

    

Ziegler's NYPD, LLC

 

Casual Restaurant Group

       

BBB Tank Services, LLC

 

Maintenance, Repair and Construction Services to the Above-Ground Storage Tank Market

       

  

6.5% Secured Debt (Maturity—October 1, 2019)

 1,000 993 993   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—April 8, 2021)(9)

 336 332 332 

  

12% Current / 1% PIK Secured Debt (Maturity—April 8, 2021)

 4,020 3,982 3,982 

  

Member Units (800,000 units)

   800 800 

    5,114 5,114 

  

Boss Industries, LLC

 

Manufacturer and Distributor of Air, Power and Other Industrial Equipment

       

  

Preferred Member Units (2,242 units)(8)

   2,379 2,606 

  

Bridge Capital Solutions Corporation

 

Financial Services and Cash Flow Solutions Provider

       

  

12% Secured Debt (Maturity—October 1, 2019)

 300 300 300   

13% Secured Debt (Maturity—July 25, 2021)

 7,500 5,550 5,550 

  

14% Secured Debt (Maturity—October 1, 2019)

 2,750 2,750 2,750   

Warrants (63 equivalent shares)

   2,132 3,312 

  

Warrants (587 equivalent units)

   600 210   

13% Secured Debt (Mercury Service Group, LLC) (Maturity—July 25, 2021)

 1,000 990 990 

  

Preferred Member Units (10,072 units)

   2,834 3,530   

Preferred Member Units (Mercury Service Group, LLC) (17,742 units)(8)

   1,000 1,000 

    7,477 7,783     9,672 10,852 

  

Buca C, LLC

 

Casual Restaurant Group

       

  

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—June 30, 2020)(9)

 22,371 22,197 22,371 

  

Preferred Member Units (6 units; 6% cumulative)(8)

   3,879 5,599 

Subtotal Control Investments (30.2% of total investments at fair value)

 $410,816 $570,409 

    26,076 27,970 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
  Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 
 

Affiliate Investments(6)

 

 

 

 

       

  

AFG Capital Group, LLC

 

Provider of Rent-to-Own Financing Solutions and Services

       

  

11% Secured Debt (Maturity—November 7, 2019)

 $12,960 $12,648 $12,826 

  

Warrants (42 equivalent units)

   259 570 

  

Member Units (186 units)

   1,200 2,330 

    14,107 15,726 

  

Barfly Ventures, LLC(10)

 

Casual Restaurant Group

       

  

12% Secured Debt (Maturity—August 31, 2020)

 5,040 4,949 4,856 

  

Options (2 equivalent units)

   397 470 

  

Warrant (1 equivalent unit)

   473 240 

    5,819 5,566 

  

BBB Tank Services, LLC

 

Maintenance, Repair and Construction Services to the Above-Ground Storage Tank Market

       

  

12% Current / 1% PIK Secured Debt (Maturity—April 8, 2021)

 4,009 3,967 3,967 

  

Member Units (800,000 units)

   800 800 

    4,767 4,767 

  

Boss Industries, LLC

 

Manufacturer and Distributor of Air, Power and Other Industrial Equipment

       

  

Preferred Member Units (2,242 units)(8)

   2,333 2,560 

  

Bridge Capital Solutions Corporation

 

Financial Services and Cash Flow Solutions Provider

       

  

13% Secured Debt (Maturity—April 18, 2017)

 7,000 6,929 7,000 

  

Warrants (22 equivalent shares)

   200 1,380 

    7,129 8,380 

  

Buca C, LLC

 

Casual Restaurant Group

       

  

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—June 30, 2020)(9)

 23,211 23,020 23,211 

  

Preferred Member Units (6 units; 6% cumulative)(8)

   3,820 5,540 

    26,840 28,751 

  

CAI Software LLC

 

Provider of Specialized Enterprise Resource Planning Software

        

Provider of Specialized Enterprise Resource Planning Software

       

  

12% Secured Debt (Maturity—October 10, 2019)

 4,020 3,991 4,020   

12% Secured Debt (Maturity—October 10, 2019)

 3,780 3,754 3,780 

  

Member Units (65,356 units)(8)

   654 1,740   

Member Units (65,356 units)(8)

   654 2,150 

    4,645 5,760     4,408 5,930 

    

CapFusion, LLC(13)

 

Non-Bank Lender to Small Businesses

       

  

13% Secured Debt (Maturity—March 25, 2021)

 12,800 11,566 11,566 

  

Warrants (1,600 equivalent units)

   1,200 1,200 

    12,766 12,766 

  

Chandler Signs Holdings, LLC(10)

 

Sign Manufacturer

       

  

12% Secured Debt (Maturity—July 4, 2021)

 4,500 4,459 4,500 

  

Class A Units (1,500,000 units)(8)

   1,500 2,950 

    5,959 7,450 

  

Condit Exhibits, LLC

 

Tradeshow Exhibits / Custom Displays Provider

       

  

Member Units (3,936 units)(8)

   100 1,780 

  

Congruent Credit Opportunities Funds(12)(13)

 

Investment Partnership

       

  

LP Interests (Congruent Credit Opportunities Fund II, LP) (Fully diluted 19.8%)(8)

   5,778 1,439 

  

LP Interests (Congruent Credit Opportunities Fund III, LP) (Fully diluted 17.4%)(8)

   15,754 15,976 

    21,532 17,415 

  

Daseke, Inc.

 

Specialty Transportation Provider

       

  

12% Current / 2.5% PIK Secured Debt (Maturity—July 31, 2018)

 21,660 21,471 21,660 

  

Common Stock (19,467 shares)

   5,213 21,640 

    26,684 43,300 

  

Dos Rios Partners(12)(13)

 

Investment Partnership

       

  

LP Interests (Dos Rios Partners, LP) (Fully diluted 20.2%)

   5,237 4,121 

  

LP Interests (Dos Rios Partners—A, LP) (Fully diluted 6.4%)

   1,663 1,191 

    6,900 5,312 

  

Dos Rios Stone Products LLC(10)

 

Limestone and Sandstone Dimension Cut Stone Mining Quarries

       

  

Class A Units (2,000,000 units)(8)

   2,000 2,000 

  

East Teak Fine Hardwoods, Inc.

 

Distributor of Hardwood Products

       

  

Common Stock (6,250 shares)(8)

   480 860 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
  Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 
 

CapFusion, LLC(13)

 

Non-Bank Lender to Small Businesses

       

  

13% Secured Debt (Maturity—March 25, 2021)

 11,200 9,933 9,933 

  

Warrants (1,600 equivalent units)

   1,200 1,200 

    11,133 11,133 

  

Chandler Signs Holdings, LLC(10)

 

Sign Manufacturer

       

  

12% Secured Debt (Maturity—July 4, 2021)

 4,500 4,458 4,458 

  

Class A Units (1,500,000 units)(8)

   1,500 1,500 

    5,958 5,958 

  

Condit Exhibits, LLC

 

Tradeshow Exhibits / Custom Displays Provider

       

  

Member Units (3,936 units)(8)

   100 1,460 

  

Congruent Credit Opportunities Funds(12)(13)

 

Investment Partnership

       

  

LP Interests (Congruent Credit Opportunities Fund II, LP) (Fully diluted 19.8%)(8)

   5,778 1,315 

  

LP Interests (Congruent Credit Opportunities Fund III, LP) (Fully diluted 17.4%)(8)

   14,550 14,640 

    20,328 15,955 

  

Daseke, Inc.

 

Specialty Transportation Provider

       

  

12% Current / 2.5% PIK Secured Debt (Maturity—July 31, 2018)

 21,523 21,312 21,523 

  

Common Stock (19,467 shares)

   5,213 22,660 

    26,525 44,183 

  

Dos Rios Partners(12)(13)

 

Investment Partnership

       

  

LP Interests (Dos Rios Partners, LP) (Fully diluted 20.2%)

   4,174 2,482 

  

LP Interests (Dos Rios Partners—A, LP) (Fully diluted 6.4%)

   1,325 671 

    5,499 3,153 

  

Dos Rios Stone Products LLC(10)

 

Limestone and Sandstone Dimension Cut Stone Mining Quarries

       

  

Class A Units (2,000,000 units)

   2,000 2,000 

  

East Teak Fine Hardwoods, Inc.

 

Distributor of Hardwood Products

       

  

Common Stock (6,250 shares)(8)

   480 860 

  

East West Copolymer & Rubber, LLC

 

Manufacturer of Synthetic Rubbers

        

Manufacturer of Synthetic Rubbers

       

  

12% Current / 2% PIK Secured Debt (Maturity—October 17, 2019)

 9,600 9,477 9,477   

12% Current / 2% PIK Secured Debt (Maturity—October 17, 2019)

 9,650 9,534 9,534 

  

Warrants (2,510,790 equivalent units)

   50 50   

Warrants (2,510,790 equivalent units)

   50 50 

    9,527 9,527     9,584 9,584 

    

EIG Fund Investments(12)(13)

 

Investment Partnership

       

  

LP Interests (EIG Global Private Debt fund-A, L.P.) (Fully diluted 11.1%)(8)

   2,788 2,788 

  

EIG Traverse Co-Investment, L.P.(12)(13)

 

Investment Partnership

       

  

LP Interests (Fully diluted 22.2%)(8)

   9,805 10,027 

  

Freeport Financial Funds(12)(13)

 

Investment Partnership

       

  

LP Interests (Freeport Financial SBIC Fund LP) (Fully diluted 9.3%)(8)

   5,974 5,620 

  

LP Interests (Freeport First Lien Loan Fund III LP) (Fully diluted 6.0%)(8)

   3,564 3,564 

    9,538 9,184 

  

Gault Financial, LLC (RMB Capital, LLC)

 

Purchases and Manages Liquidation of Distressed Assets

       

  

10% Current Secured Debt (Maturity—November 21, 2016)

 13,046 13,018 11,053 

  

Warrants (29,025 equivalent units)

   400  

    13,418 11,053 

  

Glowpoint, Inc.

 

Provider of Cloud Managed Video Collaboration Services

       

  

12% Secured Debt (Maturity—October 18, 2018)

 9,000 8,943 6,639 

  

Common Stock (7,711,517 shares)

   3,958 2,160 

    12,901 8,799 

  

Guerdon Modular Holdings, Inc.

 

Multi-Family and Commercial Modular Construction Company

       

  

9% Current / 4% PIK Secured Debt (Maturity—August 13, 2019)

 10,599 10,476 10,476 

  

Preferred Stock (404,998 shares)

   1,140 1,140 

  

Common Stock (212,033 shares)

   2,983 80 

    14,599 11,696 

  

Houston Plating and Coatings, LLC

 

Provider of Plating and Industrial Coating Services

       

  

Member Units (265,756 units)

   1,429 4,380 

  

I-45 SLF LLC(12)(13)

 

Investment Partnership

       

  

Member units (Fully diluted 20.0%; 24.4% profits interest)(8)

   12,200 12,586 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

EIG Fund Investments(12)(13)

 

Investment Partnership

            

   

LP Interests (EIG Global Private Debt fund—A, L.P.) (Fully diluted 11.1%)(8)

     2,780  2,780 

              

EIG Traverse Co-Investment, L.P.(12)(13)

 

Investment Partnership

            

   

LP Interests (Fully diluted 22.2%)(8)

     9,805  9,930 

              

Freeport Financial Funds(12)(13)

 

Investment Partnership

            

   

LP Interests (Freeport Financial SBIC Fund LP) (Fully diluted 9.3%)(8)

     5,974  5,699 

   

LP Interests (Freeport First Lien Loan Fund III LP) (Fully diluted 6.0%)(8)

     3,564  3,564 

         9,538  9,263 

              

Gault Financial, LLC (RMB Capital, LLC)

 

Purchases and Manages Liquidation of Distressed Assets

            

   

10% Current Secured Debt (Maturity—November 21, 2016)

  13,046  12,976  11,010 

   

Warrants (29,025 equivalent units)

     400   

         13,376  11,010 

              

Glowpoint, Inc.

 

Provider of Cloud Managed Video Collaboration Services

            

   

12% Secured Debt (Maturity—October 18, 2018)

  9,000  8,937  7,637 

   

Common Stock (7,711,517 shares)

     3,958  2,310 

         12,895  9,947 

              

Guerdon Modular Holdings, Inc.

 

Multi-Family and Commercial Modular Construction Company

            

   

9% Current / 4% PIK Secured Debt (Maturity—August 13, 2019)

  10,492  10,360  10,360 

   

Preferred Stock (404,998 shares)

     1,140  1,140 

   

Common Stock (212,033 shares)

     2,983  80 

         14,483  11,580 

              

Houston Plating and Coatings, LLC

 

Provider of Plating and Industrial Coating Services

            

   

Member Units (265,756 units)

     1,429  5,330 

              

I-45 SLF LLC(12)(13)

 

Investment Partnership

            

   

Member units (Fully diluted 20.0%; 24.4% profits interest)(8)

     10,200  10,306 

              

Indianhead Pipeline Services, LLC

 

Provider of Pipeline Support Services

            

   

12% Secured Debt (Maturity—February 6, 2017)

  5,550  5,467  5,467 

   

Preferred Member Units (33,819 units; 8% cumulative)(8)

     2,326  2,575 

   

Warrants (31,928 equivalent units)

     459   

   

Member Units (14,732 units)

     1   

         8,253  8,042 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Indianhead Pipeline Services, LLC

 

Provider of Pipeline Support Services

            

   

12% Secured Debt (Maturity—February 6, 2017)

  5,325  5,273  5,273 

   

Preferred Member Units (33,819 units; 8% cumulative)(8)

     2,332  2,670 

   

Warrants (31,928 equivalent units)

     459   

   

Member Units (14,732 units)

     1   

         8,065  7,943 

              

KBK Industries, LLC

 

Manufacturer of Specialty Oilfield and Industrial Products

            

   

10% Secured Debt (Maturity—September 28, 2017)

  700  700  700 

   

12.5% Secured Debt (Maturity—September 28, 2017)

  5,900  5,886  5,886 

   

Member Units (250 units)

     341  3,090 

         6,927  9,676 

              

L.F. Manufacturing Holdings, LLC(10)

 

Manufacturer of Fiberglass Products

            

   

Member Units (2,179,001 units)(8)

     2,019  1,380 

              

OnAsset Intelligence, Inc.

 

Provider of Transportation Monitoring / Tracking Products and Services

            

   

12% PIK Secured Debt (Maturity—December 31, 2015)(17)

  4,384  4,384  4,384 

   

Preferred Stock (912 shares; 7% cumulative)

     1,981   

   

Warrants (5,333 equivalent shares)

     1,919   

         8,284  4,384 

              

OPI International Ltd.(13)

 

Provider of Man Camp and Industrial Storage Services

            

   

10% Unsecured Debt (Maturity—April 8, 2018)

  473  473  473 

   

Common Stock (20,766,317 shares)

     1,371  3,200 

         1,844  3,673 

              

PCI Holding Company, Inc.

 

Manufacturer of Industrial Gas Generating Systems

            

   

12% Secured Debt (Maturity—March 31, 2019)

  13,000  12,888  13,000 

   

Preferred Stock (1,500,000 shares; 20% cumulative)(8)

     3,212  5,040 

         16,100  18,040 

              

Rocaceia, LLC (Quality Lease and Rental Holdings, LLC)

 

Provider of Rigsite Accommodation Unit Rentals and Related Services

            

   

12% Secured Debt (Maturity—January 8, 2018)(14)(18)

  30,785  30,281  250 

   

Preferred Member Units (250 units)

     2,500   

         32,781  250 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

KBK Industries, LLC

 

Manufacturer of Specialty Oilfield and Industrial Products

            

   

10% Secured Debt (Maturity—September 28, 2017)

  600  600  600 

   

12.5% Secured Debt (Maturity—September 28, 2017)

  5,900  5,882  5,900 

   

Member Units (250 units)(8)

     341  3,230 

         6,823  9,730 

              

L.F. Manufacturing Holdings, LLC(10)

 

Manufacturer of Fiberglass Products

            

   

Member Units (2,179,001 units)(8)

     2,019  1,670 

              

MPS Denver, LLC

 

Specialty Card Printing

            

   

Member Units (13,800 units)

     1,130  840 

              

OnAsset Intelligence, Inc.

 

Provider of Transportation Monitoring / Tracking Products and Services

            

   

12% PIK Secured Debt (Maturity—December 31, 2015)(17)

  4,254  4,254  4,254 

   

Preferred Stock (912 shares; 7% cumulative)

     1,981  1,380 

   

Warrants (5,333 equivalent shares)

     1,919   

         8,154  5,634 

              

OPI International Ltd.(13)

 

Provider of Man Camp and Industrial Storage Services

            

   

10% Unsecured Debt (Maturity—April 8, 2018)

  473  473  473 

   

Common Stock (20,766,317 shares)

     1,371  3,200 

         1,844  3,673 

              

PCI Holding Company, Inc.

 

Manufacturer of Industrial Gas Generating Systems

            

   

12% Secured Debt (Maturity—March 31, 2019)

  13,000  12,879  13,000 

   

Preferred Stock (1,500,000 shares; 20% cumulative)(8)

     3,053  4,239 

         15,932  17,239 

              

Radial Drilling Services Inc.

 

Oil and Gas Lateral Drilling Technology Provider

            

   

12% Secured Debt (Maturity—November 22, 2016)(14)

  4,200  3,951  1,510 

   

Warrants (316 equivalent shares)

     758   

         4,709  1,510 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Tin Roof Acquisition Company

 

Casual Restaurant Group

            

   

12% Secured Debt (Maturity—November 13, 2018)

  13,682  13,539  13,539 

   

Class C Preferred Stock (Fully diluted 10.0%; 10% cumulative)(8)

     2,670  2,670 

         16,209  16,209 

              

UniTek Global Services, Inc.(11)

 

Provider of Outsourced Infrastructure Services

            

   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—January 13, 2019)(9)

  2,826  2,826  2,813 

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—January 13, 2019)(9)

  822  822  815 

   

15% PIK Unsecured Debt (Maturity—July 13, 2019)

  718  718  714 

   

Preferred Stock (4,935,377 shares; 13.5% cumulative)(8)

     5,430  6,200 

   

Common Stock (705,054 shares)

       2,580 

         9,796  13,122 

              

Universal Wellhead Services Holdings, LLC(10)

 

Provider of Wellhead Equipment, Designs, and Personnel to the Oil & Gas Industry

            

   

Class A Preferred Units (4,000,000 units; 4.5% cumulative)(8)

     4,000  1,160 

              

Valley Healthcare Group, LLC

 

Provider of Durable Medical Equipment

            

   

LIBOR Plus 12.50% (Floor 0.50%), Current Coupon 13.02%, Secured Debt (Maturity—December 29, 2020)(9)

  10,716  10,622  10,622 

   

Preferred Member Units (Valley Healthcare Holding, LLC) (1,600 units)

     1,600  1,600 

         12,222  12,222 

              

Volusion, LLC

 

Provider of Online Software-as-a-Service eCommerce Solutions

            

   

10.5% Secured Debt (Maturity—January 26, 2020)

  17,500  16,391  16,391 

   

Preferred Member Units (4,876,670 units)

     14,000  14,000 

   

Warrants (950,618 equivalent units)

     1,400  1,400 

         31,791  31,791 

              

Subtotal Affiliate Investments (18.4% of total investments at fair value)

 $368,553 $352,873 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Non-Control/Non-Affiliate Investments(7)

       

              

AccuMED Corp.(10)

 

Medical Device Contract Manufacturer

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—October 29, 2020)(9)

 $10,306 $10,218 $10,306 

              

Adams Publishing Group, LLC(10)

 

Local Newspaper Operator

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—November 3, 2020)(9)

  7,955  7,826  7,753 

              

Ahead, LLC(10)

 

IT Infrastructure Value Added Reseller

            

   

LIBOR Plus 6.50%, Current Coupon 7.34%, Secured Debt (Maturity—November 2, 2020)

  14,438  14,070  14,401 

              

Allflex Holdings III Inc.(11)

 

Manufacturer of Livestock Identification Products

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—July 19, 2021)(9)

  14,795  14,701  14,869 

              

American Scaffold Holdings, Inc.(10)

 

Marine Scaffolding Service Provider

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—March 31, 2022)(9)

  7,406  7,300  7,369 

              

American Seafoods Group, LLC(11)

 

Catcher-Processor of Alaskan Pollock

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—August 19, 2021)(9)

  9,634  9,624  9,610 

              

American Teleconferencing Services, Ltd.(11)

 

Provider of Audio Conferencing and Video Collaboration Solutions

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—December 8, 2021)(9)

  12,309  11,122  12,016 

              

Anchor Hocking, LLC(11)

 

Household Products Manufacturer

            

   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—June 4, 2018)(9)

  2,283  2,283  2,111 

   

Member Units (440,620 units)

     4,928  3,084 

         7,211  5,195 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Rocaceia, LLC (Quality Lease and Rental Holdings, LLC)

 

Provider of Rigsite Accommodation Unit Rentals and Related Services

            

   

12% Secured Debt (Maturity—January 8, 2018)(14)(18)

  30,785  30,281  250 

   

Preferred Member Units (250 units)

     2,500   

         32,781  250 

              

Tin Roof Acquisition Company

 

Casual Restaurant Group

            

   

12% Secured Debt (Maturity—November 13, 2018)

  13,785  13,628  13,628 

   

Class C Preferred Stock (Fully diluted 10.0%; 10% cumulative)(8)

     2,603  2,603 

         16,231  16,231 

              

UniTek Global Services, Inc.(11)

 

Provider of Outsourced Infrastructure Services

            

   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—January 13, 2019)(9)

  2,826  2,826  2,811 

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—January 13, 2019)(9)

  994  994  988 

   

15% PIK Unsecured Debt (Maturity—July 13, 2019)

  691  691  688 

   

Preferred Stock (4,935,377 shares)

     4,935  5,990 

   

Common Stock (705,054 shares)

       2,100 

         9,446  12,577 

              

Universal Wellhead Services Holdings, LLC(10)

 

Provider of Wellhead Equipment, Designs, and Personnel to the Oil & Gas Industry

            

   

Class A Preferred Units (4,000,000 units; 4.5% cumulative)(8)

     4,000  1,160 

              

Valley Healthcare Group, LLC

 

Provider of Durable Medical Equipment

            

   

LIBOR Plus 12.50% (Floor 0.50%), Current Coupon 13.00%, Secured Debt (Maturity—December 29, 2020)(9)

  10,816  10,717  10,717 

   

Preferred Member Units (Valley Healthcare Holding, LLC) (1,600 units)

     1,600  1,600 

         12,317  12,317 

              

Volusion, LLC

 

Provider of Online Software-as-a-Service eCommerce Solutions

            

   

10.5% Secured Debt (Maturity—January 26, 2020)

  17,500  16,325  16,325 

   

Preferred Member Units (4,876,670 units)

     14,000  14,000 

   

Warrants (950,618 equivalent units)

     1,400  1,400 

         31,725  31,725 

Subtotal Affiliate Investments (19.0% of total investments at fair value)

 $377,060 $358,483 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

June 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Non-Control/Non-Affiliate Investments(7)

       

              

AccuMED Corp.(10)

 

Medical Device Contract Manufacturer

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—October 29, 2020)(9)

 $10,329 $10,237 $10,116 

              

Adams Publishing Group, LLC(10)

 

Local Newspaper Operator

            

   

LIBOR Plus 6.75% (Floor 1.00%), Current Coupon 7.75%, Secured Debt (Maturity—November 3, 2020)(9)

  8,320  8,178  8,106 

              

Ahead, LLC(10)

 

IT Infrastructure Value Added Reseller

            

   

LIBOR Plus 6.50%, Current Coupon 7.14%, Secured Debt (Maturity—November 2, 2020)

  14,625  14,234  14,552 

              

Allflex Holdings III Inc.(11)

 

Manufacturer of Livestock Identification Products

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—July 19, 2021)(9)

  14,795  14,696  14,684 

              

AM General LLC(11)

 

Specialty Vehicle Manufacturer

            

   

LIBOR Plus 9.00% (Floor 1.25%), Current Coupon 10.25%, Secured Debt (Maturity—March 22, 2018)(9)

  2,175  2,148  2,066 

              

American Scaffold Holdings, Inc.(10)

 

Marine Scaffolding Service Provider

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—March 31, 2022)(9)

  7,453  7,343  7,343 

              

American Seafoods Group, LLC(11)

 

Catcher-Processor of Alaskan Pollock

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—August 19, 2021)(9)

  9,782  9,772  9,636 

              

American Teleconferencing Services, Ltd.(11)

 

Provider of Audio Conferencing and Video Collaboration Solutions

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—December 8, 2021)(9)

  12,500  11,272  11,375 

              

AMF Bowling Centers, Inc.(11)

 

Bowling Alley Operator

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—September 18, 2021)(9)

  7,867  7,770  7,848 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

AP Gaming I, LLC(10)

 

Developer, Manufacturer, and Operator of Gaming Machines

            

   

LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—December 20, 2020)(9)

  11,256  11,076  10,813 

              

Apex Linen Service, Inc.

 

Industrial Launderers

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—October 30, 2022)(9)

  2,400  2,400  2,400 

   

13% Secured Debt (Maturity—October 30, 2022)

  14,416  14,335  14,335 

         16,735  16,735 

              

Applied Products, Inc.(10)

 

Adhesives Distributor

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—September 30, 2019)(9)

  3,927  3,895  3,818 

              

Arcus Hunting LLC.(10)

 

Manufacturer of Bowhunting and Archery Products and Accessories

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—November 13, 2019)(9)

  16,922  16,760  16,760 

              

Artel, LLC(11)

 

Provider of Secure Satellite Network and IT Solutions

            

   

LIBOR Plus 7.00% (Floor 1.25%), Current Coupon 8.25%, Secured Debt (Maturity—November 27, 2017)(9)

  7,252  7,085  6,237 

              

ATI Investment Sub, Inc.(11)

 

Manufacturer of Solar Tracking Systems

            

   

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—June 22, 2021)(9)

  9,750  9,560  9,726 

              

ATS Workholding, Inc.(10)

 

Manufacturer of Machine Cutting Tools and Accessories

            

   

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity—March 10, 2019)(9)

  6,253  6,223  6,000 

              

ATX Networks Corp.(11)(13)

 

Provider of Radio Frequency Management Equipment

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—June 11, 2021)(9)

  11,850  11,654  11,613 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Anchor Hocking, LLC(11)

 

Household Products Manufacturer

            

   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—June 4, 2018)(9)

  2,288  2,288  2,117 

   

Member Units (440,620 units)

     4,928  3,084 

         7,216  5,201 

              

AP Gaming I, LLC(10)

 

Developer, Manufacturer, and Operator of Gaming Machines

            

   

LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—December 20, 2020)(9)

  11,285  11,096  10,675 

              

Apex Linen Service, Inc.

 

Industrial Launderers

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—October 30, 2022)(9)

  1,600  1,600  1,600 

   

13% Secured Debt (Maturity—October 30, 2022)

  13,600  13,521  13,521 

         15,121  15,121 

              

Applied Products, Inc.(10)

 

Adhesives Distributor

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—September 30, 2019)(9)

  4,248  4,211  4,134 

              

Arcus Hunting LLC.(10)

 

Manufacturer of Bowhunting and Archery Products and Accessories

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—November 13, 2019)(9)

  15,367  15,197  15,197 

              

Artel, LLC(11)

 

Provider of Secure Satellite Network and IT Solutions

            

   

LIBOR Plus 7.00% (Floor 1.25%), Current Coupon 8.25%, Secured Debt (Maturity—November 27, 2017)(9)

  7,654  7,456  6,544 

              

ATS Workholding, Inc.(10)

 

Manufacturer of Machine Cutting Tools and Accessories

            

   

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity—March 10, 2019)(9)

  6,332  6,299  6,077 

              

ATX Networks Corp.(11)(13)

 

Provider of Radio Frequency Management Equipment

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—June 14, 2021)(9)

  14,850  14,594  14,664 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Berry Aviation, Inc.(10)

 

Airline Charter Service Operator

            

   

12.00% Current / 1.75% PIK Secured Debt (Maturity—January 30, 2020)

  5,627  5,585  5,585 

   

Common Stock (553 shares)

     400  760 

         5,985  6,345 

              

Bioventus LLC(10)

 

Production of Orthopedic Healing Products

            

   

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.00%, Secured Debt (Maturity—April 10, 2020)(9)

  5,000  4,929  5,013 

              

Blackhawk Specialty Tools LLC(11)

 

Oilfield Equipment & Services

            

   

LIBOR Plus 5.25% (Floor 1.25%), Current Coupon 6.50%, Secured Debt (Maturity—August 1, 2019)(9)

  5,643  5,622  4,233 

              

Blue Bird Body Company(11)(13)

 

School Bus Manufacturer

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—June 26, 2020)(9)

  1,716  1,705  1,722 

              

Bluestem Brands, Inc.(11)

 

Multi-Channel Retailer of General Merchandise

            

   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—November 6, 2020)(9)

  13,068  12,808  11,451 

              

Brainworks Software, LLC(10)

 

Advertising Sales and Newspaper Circulation Software

            

   

Prime Plus 7.25% (Floor 3.25%), Current Coupon 10.75%, Secured Debt (Maturity—July 22, 2019)(9)

  626  621  621 

   

Prime Plus 7.25% (Floor 3.25%), Current Coupon 10.75%, Secured Debt (Maturity—July 22, 2019)(9)

  6,107  6,059  5,981 

         6,680  6,602 

              

Brightwood Capital Fund III, LP(12)(13)

 

Investment Partnership

            

   

LP Interests (Fully diluted 1.6%)(8)

     11,250  10,596 

              

Brundage-Bone Concrete Pumping, Inc.(11)

 

Construction Services Provider

            

   

10.375% Secured Debt (Maturity—September 1, 2021)

  3,000  2,984  3,210 

              

California Pizza Kitchen, Inc.(11)

 

Casual Restaurant Group

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—August 23, 2022)(9)

  5,000  4,951  4,985 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Berry Aviation, Inc.(10)

 

Airline Charter Service Operator

            

   

12.00% Current / 1.75% PIK Secured Debt (Maturity—January 30, 2020)

  5,627  5,583  5,583 

   

Common Stock (553 shares)

     400  590 

         5,983  6,173 

              

Bioventus LLC(10)

 

Production of Orthopedic Healing Products

            

   

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.00%, Secured Debt (Maturity—April 10, 2020)(9)

  5,000  4,925  4,962 

              

Blackbrush Oil and Gas LP(11)

 

Oil & Gas Exploration

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—July 30, 2021)(9)

  9,000  8,902  8,989 

              

Blackhawk Specialty Tools LLC(11)

 

Oilfield Equipment & Services

            

   

LIBOR Plus 5.25% (Floor 1.25%), Current Coupon 6.50%, Secured Debt (Maturity—August 1, 2019)(9)

  5,726  5,704  4,295 

              

Blue Bird Body Company(11)(13)

 

School Bus Manufacturer

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—June 26, 2020)(9)

  2,255  2,231  2,255 

              

Bluestem Brands, Inc.(11)(13)

 

Multi-Channel Retailer of General Merchandise

            

   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—November 6, 2020)(9)

  13,256  13,029  11,776 

              

Brainworks Software, LLC(10)

 

Advertising Sales and Newspaper Circulation Software

            

   

Prime Plus 7.25% (Floor 3.25%), Current Coupon 10.75%, Secured Debt (Maturity—July 22, 2019)(9)

  626  621  621 

   

LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—July 22, 2019)(9)

  6,107  6,055  5,977 

         6,676  6,598 

              

Brightwood Capital Fund III, LP(12)(13)

 

Investment Partnership

            

   

LP Interests (Fully diluted 1.6%)(8)

     11,250  10,596 

              

Brundage-Bone Concrete Pumping, Inc.(11)

 

Construction Services Provider

            

   

10.375% Secured Debt (Maturity—September 1, 2021)

  3,000  2,984  3,030 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Cenveo Corporation(11)

 

Provider of Commercial Printing, Envelopes, Labels, and Printed Office Products

            

   

6% Secured Debt (Maturity—August 1, 2019)

  13,130  10,935  11,653 

              

Charlotte Russe, Inc(11)

 

Fast-Fashion Retailer to Young Women

            

   

LIBOR Plus 5.50% (Floor 1.25%), Current Coupon 6.75%, Secured Debt (Maturity—May 22, 2019)(9)

  14,346  14,122  7,101 

              

Clarius BIGS, LLC(10)

 

Prints & Advertising Film Financing

            

   

15% PIK Secured Debt (Maturity—January 5, 2015)(14)(17)

  2,999  2,999  159 

              

Compact Power Equipment, Inc.

 

Equipment / Tool Rental

            

   

12% Secured Debt (Maturity—October 1, 2017)

  4,100  4,094  4,100 

   

Series A Preferred Stock (4,298,435 shares)

     1,079  3,830 

         5,173  7,930 

              

Compuware Corporation(11)

 

Provider of Software and Supporting Services

            

   

LIBOR Plus 5.25% (Floor 1.00%), Current Coupon 6.25%, Secured Debt (Maturity—December 15, 2019)(9)

  12,011  11,766  12,056 

              

Covenant Surgical Partners, Inc.(11)

 

Ambulatory Surgical Centers

            

   

8.75% Secured Debt (Maturity—August 1, 2019)

  800  800  768 

              

CRGT Inc.(11)

 

Provider of Custom Software Development

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—December 19, 2020)(9)

  6,903  6,810  6,920 

              

CST Industries Inc.(11)

 

Storage Tank Manufacturer

            

   

LIBOR Plus 6.25% (Floor 1.50%), Current Coupon 7.75%, Secured Debt (Maturity—May 22, 2017)(9)

  9,727  9,696  9,727 

              

Darr Equipment LP(10)

 

Heavy Equipment Dealer

            

   

12% Current / 2% PIK Secured Debt (Maturity—April 15, 2020)

  21,023  20,565  20,312 

   

Warrants (915,734 equivalent units)

     474  10 

         21,039  20,322 

              

Digital River, Inc.(11)

 

Provider of Outsourced e-Commerce Solutions and Services

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—February 12, 2021)(9)

  15,184  15,081  15,156 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Cenveo Corporation(11)

 

Provider of Commercial Printing, Envelopes, Labels, and Printed Office Products

            

   

6% Secured Debt (Maturity—August 1, 2019)

  12,730  10,384  10,566 

              

Calloway Laboratories, Inc.(10)

 

Health Care Testing Facilities

            

   

17% PIK Secured Debt (Maturity—September 30, 2016)(14)

  7,324  7,275   

   

Warrants (125,000 equivalent shares)

     17   

         7,292   

              

Charlotte Russe, Inc(11)

 

Fast-Fashion Retailer to Young Women

            

   

LIBOR Plus 5.50% (Floor 1.25%), Current Coupon 6.75%, Secured Debt (Maturity—May 22, 2019)(9)

  14,346  14,102  5,401 

              

Clarius ASIG, LLC(10)

 

Prints & Advertising Film Financing

            

   

15% PIK Secured Debt (Maturity—September 14, 2014)(17)

  503  503  503 

              

Clarius BIGS, LLC(10)

 

Prints & Advertising Film Financing

            

   

15% PIK Secured Debt (Maturity—January 5, 2015)(14)(17)

  2,999  2,999  159 

              

Compact Power Equipment, Inc.

 

Equipment / Tool Rental

            

   

12% Secured Debt (Maturity—October 1, 2017)

  4,100  4,093  4,100 

   

Series A Preferred Stock (4,298,435 shares)

     1,079  3,230 

         5,172  7,330 

              

Compuware Corporation(11)

 

Provider of Software and Supporting Services

            

   

LIBOR Plus 5.25% (Floor 1.00%), Current Coupon 6.25%, Secured Debt (Maturity—December 15, 2019)(9)

  14,176  13,872  13,759 

              

Covenant Surgical Partners, Inc.(11)

 

Ambulatory Surgical Centers

            

   

8.75% Secured Debt (Maturity—August 1, 2019)

  800  800  768 

              

CRGT Inc.(11)

 

Provider of Custom Software Development

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—December 19, 2020)(9)

  7,527  7,419  7,527 

              

CST Industries Inc.(11)

 

Storage Tank Manufacturer

            

   

LIBOR Plus 6.25% (Floor 1.50%), Current Coupon 7.75%, Secured Debt (Maturity—May 22, 2017)(9)

  8,908  8,866  8,863 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Drilling Info Holdings, Inc.

 

Information Services for the Oil and Gas Industry

            

   

Common Stock (3,788,865 shares)

     1,335  10,410 

              

ECP-PF Holdings Group, Inc.(10)

 

Fitness Club Operator

            

   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—November 26, 2019)(9)

  5,625  5,587  5,590 

              

EnCap Energy Fund Investments(12)(13)

 

Investment Partnership

            

   

LP Interests (EnCap Energy Capital Fund VIII, L.P.) (Fully diluted 0.1%)(8)

     3,915  2,054 

   

LP Interests (EnCap Energy Capital Fund VIII Co- Investors, L.P.) (Fully diluted 0.4%)

     2,258  1,283 

   

LP Interests (EnCap Energy Capital Fund IX, L.P.) (Fully diluted 0.1%)(8)

     4,007  4,044 

   

LP Interests (Encap Energy Capital Fund X, L.P.) (Fully diluted 0.1%)

     2,654  2,654 

   

LP Interests (EnCap Flatrock Midstream Fund II, L.P.) (Fully diluted 0.8%)(8)

     8,937  9,677 

   

LP Interests (EnCap Flatrock Midstream Fund III, L.P.) (Fully diluted 0.2%)(8)

     2,474  2,496 

         24,245  22,208 

              

Evergreen Skills Lux S.á r.l. (d/b/a Skillsoft)(11)(13)

 

Technology-based Performance Support Solutions

            

   

LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—April 28, 2022)(9)

  7,000  6,852  4,253 

              

Flavors Holdings Inc.(11)

 

Global Provider of Flavoring and Sweetening Products and Solutions

            

   

LIBOR Plus 5.75% (Floor 1.00%), Current Coupon 6.75%, Secured Debt (Maturity—April 3, 2020)(9)

  12,659  12,228  10,760 

              

Fram Group Holdings, Inc.(11)

 

Manufacturer of Automotive Maintenance Products

            

   

LIBOR Plus 5.50% (Floor 1.50%), Current Coupon 7.00%, Secured Debt (Maturity—July 29, 2017)(9)

  9,267  9,213  8,947 

   

LIBOR Plus 9.50% (Floor 1.50%), Current Coupon 11.00%, Secured Debt (Maturity—January 29, 2018)(9)

  700  699  608 

         9,912  9,555 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Darr Equipment LP(10)

 

Heavy Equipment Dealer

            

   

12% Current / 2% PIK Secured Debt (Maturity—April 15, 2020)

  20,916  20,434  20,181 

   

Warrants (915,734 equivalent units)

     474  90 

         20,908  20,271 

              

Digital River, Inc.(11)

 

Provider of Outsourced e-Commerce Solutions and Services

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—February 12, 2021)(9)

  10,184  10,084  10,159 

              

Drilling Info Holdings, Inc.

 

Information Services for the Oil and Gas Industry

            

   

Common Stock (3,788,865 shares)

     1,335  10,560 

              

ECP-PF Holdings Group, Inc.(10)

 

Fitness Club Operator

            

   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—November 26, 2019)(9)

  5,625  5,584  5,497 

              

EnCap Energy Fund Investments(12)(13)

 

Investment Partnership

            

   

LP Interests (EnCap Energy Capital Fund VIII, L.P.) (Fully diluted 0.1%)(8)

     3,902  1,980 

   

LP Interests (EnCap Energy Capital Fund VIII Co-Investors, L.P.) (Fully diluted 0.4%)

     2,234  1,208 

   

LP Interests (EnCap Energy Capital Fund IX, L.P.) (Fully diluted 0.1%)(8)

     3,628  3,484 

   

LP Interests (Encap Energy Capital Fund X, L.P.) (Fully diluted 0.1%)

     2,131  2,131 

   

LP Interests (EnCap Flatrock Midstream Fund II, L.P.) (Fully diluted 0.8%)(8)

     6,862  7,717 

   

LP Interests (EnCap Flatrock Midstream Fund III, L.P.) (Fully diluted 0.2%)(8)

     1,115  1,137 

         19,872  17,657 

              

Energy and Exploration Partners, LLC(11)

 

Oil & Gas Exploration & Production

            

   

13% PIK Secured Debt (Maturity—November 12, 2021)

  1,768  1,768  1,768 

   

5% PIK Secured Debt (Maturity—May 13, 2022)

  968  968  968 

   

Member Units (2,472 units)

     2,472  2,472 

         5,208  5,208 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

GI KBS Merger Sub LLC(11)

 

Outsourced Janitorial Services to Retail/Grocery Customers

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—October 29, 2021)(9)

  3,900  3,849  3,764 

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—April 29, 2022)(9)

  800  787  760 

         4,636  4,524 

              

Grace Hill, LLC(10)

 

Online Training Tools for the Multi-Family Housing Industry

            

   

Prime Plus 5.25% (Floor 1.00%), Current Coupon 8.75%, Secured Debt (Maturity—August 15, 2019)(9)

  634  622  634 

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—August 15, 2019)(9)

  11,580  11,494  11,580 

         12,116  12,214 

              

Great Circle Family Foods, LLC(10)

 

Quick Service Restaurant Franchise

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—October 28, 2019)(9)

  7,698  7,644  7,698 

              

Grupo Hima San Pablo, Inc.(11)

 

Tertiary Care Hospitals

            

   

LIBOR Plus 7.00% (Floor 1.50%), Current Coupon 8.50%, Secured Debt (Maturity—January 31, 2018)(9)

  4,825  4,794  3,860 

   

13.75% Secured Debt (Maturity—July 31, 2018)

  2,000  1,957  1,200 

         6,751  5,060 

              

GST Autoleather, Inc.(11)

 

Automotive Leather Manufacturer

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—July 10, 2020)(9)

  13,317  13,209  13,067 

              

Guitar Center, Inc.(11)

 

Musical Instruments Retailer

            

   

6.5% Secured Debt (Maturity—April 15, 2019)

  14,625  13,820  12,870 

              

Hojeij Branded Foods, LLC(10)

 

Multi-Airport, Multi- Concept Restaurant Operator

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—July 27, 2021)(9)

  5,446  5,401  5,401 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Evergreen Skills Lux S.á r.l. (d/b/a Skillsoft)(11)(13)

 

Technology-based Performance Support Solutions

            

   

LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—April 28, 2022)(9)

  7,000  6,847  3,325 

              

Flavors Holdings Inc.(11)

 

Global Provider of Flavoring and Sweetening Products and Solutions

            

   

LIBOR Plus 5.75% (Floor 1.00%), Current Coupon 6.75%, Secured Debt (Maturity—April 3, 2020)(9)

  12,835  12,387  11,487 

              

Fram Group Holdings, Inc.(11)

 

Manufacturer of Automotive Maintenance Products

            

   

LIBOR Plus 5.50% (Floor 1.50%), Current Coupon 7.00%, Secured Debt (Maturity—July 29, 2017)(9)

  9,267  9,196  8,651 

   

LIBOR Plus 9.50% (Floor 1.50%), Current Coupon 11.00%, Secured Debt (Maturity—January 29, 2018)(9)

  700  699  593 

         9,895  9,244 

              

GI KBS Merger Sub LLC(11)

 

Outsourced Janitorial Services to Retail/Grocery Customers

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—October 29, 2021)(9)

  3,900  3,847  3,744 

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—April 29, 2022)(9)

  800  787  760 

         4,634  4,504 

              

Grace Hill, LLC(10)

 

Online Training Tools for the Multi-Family Housing Industry

            

   

Prime Plus 5.25% (Floor 1.00%), Current Coupon 8.75%, Secured Debt (Maturity—August 15, 2019)(9)

  498  484  498 

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—August 15, 2019)(9)

  11,580  11,487  11,580 

         11,971  12,078 

              

Great Circle Family Foods, LLC(10)

 

Quick Service Restaurant Franchise

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—October 28, 2019)(9)

  7,748  7,690  7,690 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Horizon Global Corporation(11)(13)

 

Auto Parts Manufacturer

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—June 30, 2021)(9)

  12,375  12,200  12,499 

              

Hostway Corporation(11)

 

Managed Services and Hosting Provider

            

   

LIBOR Plus 4.75% (Floor 1.25%), Current Coupon 6.00%, Secured Debt (Maturity—December 13, 2019)(9)

  10,727  10,661  10,328 

              

Hunter Defense Technologies, Inc.(11)

 

Provider of Military and Commercial Shelters and Systems

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—August 5, 2019)(9)

  9,812  9,279  8,585 

              

Hygea Holdings, Corp.(10)

 

Provider of Physician Services

            

   

LIBOR Plus 9.25%, Current Coupon 10.08%, Secured Debt (Maturity—February 24, 2019)

  7,938  7,390  7,513 

   

Warrants (4,880,735 equivalent shares)

     369  490 

         7,759  8,003 

              

iEnergizer Limited(11)(13)

 

Provider of Business Outsourcing Solutions

            

   

LIBOR Plus 6.00% (Floor 1.25%), Current Coupon 7.25%, Secured Debt (Maturity—May 1, 2019)(9)

  9,918  9,413  9,522 

              

Indivior Finance LLC(11)(13)

 

Specialty Pharmaceutical Company Treating Opioid Dependence

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—December 19, 2019)(9)

  6,844  6,558  6,861 

              

Industrial Container Services, LLC(10)

 

Steel Drum Reconditioner

            

   

LIBOR Plus 5.75% (Floor 1.00%), Current Coupon 6.75%, Secured Debt (Maturity—December 31, 2018)(9)

  8,962  8,942  8,942 

              

Industrial Services Acquisition, LLC(10)

 

Industrial Cleaning Services

            

   

11.25% Current / 0.75% PIK Unsecured Debt (Maturity—December 17, 2022)

  4,510  4,423  4,423 

   

Member Units (Industrial Services Investments, LLC) (900,000 units)

     900  900 

         5,323  5,323 

              

Infinity Acquisition Finance Corp.(11)

 

Application Software for Capital Markets

            

   

7.25% Unsecured Debt (Maturity—August 1, 2022)

  5,700  5,355  4,959 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Grupo Hima San Pablo, Inc.(11)

 

Tertiary Care Hospitals

            

   

LIBOR Plus 7.00% (Floor 1.50%), Current Coupon 8.50%, Secured Debt (Maturity—January 31, 2018)(9)

  4,838  4,802  4,354 

   

13.75% Secured Debt (Maturity—July 31, 2018)

  2,000  1,952  1,500 

         6,754  5,854 

              

GST Autoleather, Inc.(11)

 

Automotive Leather Manufacturer

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—July 10, 2020)(9)

  11,317  11,240  11,232 

              

Guitar Center, Inc.(11)

 

Musical Instruments Retailer

            

   

6.5% Secured Debt (Maturity—April 15, 2019)

  14,625  13,752  12,577 

              

Hojeij Branded Foods, LLC(10)

 

Multi-Airport, Multi-Concept Restaurant Operator

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—July 27, 2021)(9)

  5,446  5,399  5,399 

              

Horizon Global Corporation(11)

 

Auto Parts Manufacturer

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—June 30, 2021)(9)

  9,500  9,336  9,476 

              

Hostway Corporation(11)

 

Managed Services and Hosting Provider

            

   

LIBOR Plus 4.75% (Floor 1.25%), Current Coupon 6.00%, Secured Debt (Maturity—December 13, 2019)(9)

  10,878  10,817  10,769 

              

Hunter Defense Technologies, Inc.(11)

 

Provider of Military and Commercial Shelters and Systems

            

   

LIBOR Plus 8.50% (Floor 1.50%), Current Coupon 10.00%, Secured Debt (Maturity—August 5, 2019)(9)

  10,292  9,680  9,006 

              

Hygea Holdings, Corp.(10)

 

Provider of Physician Services

            

   

LIBOR Plus 9.25%, Current Coupon 9.91%, Secured Debt (Maturity—February 24, 2019)

  8,000  7,399  7,399 

   

Warrants (4,880,735 equivalent shares)

     369  369 

         7,768  7,768 

              

ICON Health & Fitness, Inc.(11)

 

Producer of Fitness Products

            

   

11.875% Secured Debt (Maturity—October 15, 2016)

  7,956  7,890  7,916 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Inn of the Mountain Gods Resort and Casino(11)

 

Hotel & Casino Owner & Operator

            

   

9.25% Secured Debt (Maturity—November 30, 2020)

  3,851  3,726  3,504 

              

Insurance Technologies, LLC(10)

 

Illustration and Sales-automation Platforms

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—December 1, 2019)(9)

  3,965  3,934  3,934 

              

Intertain Group Limited(11)(13)

 

Business-to-Consumer Online Gaming Operator

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—April 8, 2022)(9)

  4,426  4,359  4,421 

              

iPayment, Inc.(11)

 

Provider of Merchant Acquisition

            

   

LIBOR Plus 5.25% (Floor 1.50%), Current Coupon 6.75%, Secured Debt (Maturity—May 8, 2017)(9)

  15,026  15,007  14,274 

              

iQor US Inc.(11)

 

Business Process Outsourcing Services Provider

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—April 1, 2021)(9)

  9,837  9,688  8,533 

              

irth Solutions, LLC

 

Provider of Damage Prevention Information Technology Services

            

   

Member Units (27,893 units)

     1,441  1,790 

              

Jackmont Hospitality, Inc.(10)

 

Franchisee of Casual Dining Restaurants

            

   

LIBOR Plus 4.25% (Floor 1.00%), Current Coupon 5.25% / 2.50% PIK, Current Coupon Plus PIK 7.75%, Secured Debt (Maturity—May 26, 2021)(9)

  4,444  4,426  4,278 

              

Joerns Healthcare, LLC(11)

 

Manufacturer and Distributor of Health Care Equipment & Supplies

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—May 9, 2020)(9)

  14,692  14,591  13,958 

              

JSS Holdings, Inc.(11)

 

Aircraft Maintenance Program Provider

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—August 31, 2021)(9)

  13,000  12,717  12,935 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

iEnergizer Limited(11)(13)

 

Provider of Business Outsourcing Solutions

            

   

LIBOR Plus 6.00% (Floor 1.25%), Current Coupon 7.25%, Secured Debt (Maturity—May 1, 2019)(9)

  10,324  9,775  9,291 

              

Indivior Finance LLC(11)(13)

 

Specialty Pharmaceutical Company Treating Opioid Dependence

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—December 19, 2019)(9)

  6,938  6,620  6,903 

              

Industrial Container Services, LLC(10)

 

Steel Drum Reconditioner

            

   

LIBOR Plus 5.75% (Floor 1.00%), Current Coupon 6.75%, Secured Debt (Maturity—December 31, 2018)(9)

  4,962  4,962  4,962 

              

Industrial Services Acquisition, LLC(10)

 

Industrial Cleaning Services

            

   

11.25% Current / 0.75% PIK Unsecured Debt (Maturity—December 17, 2022)

  4,501  4,412  4,412 

   

Member Units (Industrial Services Investments, LLC) (900,000 units)

     900  900 

         5,312  5,312 

              

Infinity Acquisition Finance Corp.(11)

 

Application Software for Capital Markets

            

   

7.25% Unsecured Debt (Maturity—August 1, 2022)

  5,700  5,346  4,973 

              

Inn of the Mountain Gods Resort and Casino(11)

 

Hotel & Casino Owner & Operator

            

   

9.25% Secured Debt (Maturity—November 30, 2020)

  3,851  3,720  3,466 

              

Insurance Technologies, LLC(10)

 

Illustration and Sales-automation Platforms

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—December 1, 2019)(9)

  4,031  3,996  3,996 

              

Intertain Group Limited(11)(13)

 

Business-to-Consumer Online Gaming Operator

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—April 8, 2022)(9)

  4,678  4,609  4,654 

              

iPayment, Inc.(11)

 

Provider of Merchant Acquisition

            

   

LIBOR Plus 5.25% (Floor 1.50%), Current Coupon 6.75%, Secured Debt (Maturity—May 8, 2017)(9)

  15,026  15,000  14,387 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Kendra Scott, LLC(11)

 

Jewelry Retail Stores

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—July 17, 2020)(9)

  5,652  5,607  5,624 

              

Keypoint Government Solutions, Inc.(11)

 

Provider of Pre-Employment Screening Services

            

   

LIBOR Plus 6.50% (Floor 1.25%), Current Coupon 7.75%, Secured Debt (Maturity—November 13, 2017)(9)

  5,670  5,649  5,641 

              

LaMi Products, LLC(10)

 

General Merchandise Distribution

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—September 16, 2020)(9)

  10,735  10,653  10,735 

              

Lansing Trade Group LLC(11)

 

Commodity Merchandiser

            

   

9.25% Unsecured Debt (Maturity—February 15, 2019)

  6,000  6,000  6,000 

              

Larchmont Resources, LLC(11)

 

Oil & Gas Exploration & Production

            

   

LIBOR Plus 8.75% (Floor 1.00%), Current Coupon 9.75%, Secured Debt (Maturity—August 7, 2019)(9)(14)

  7,784  7,496  2,491 

              

LKCM Headwater Investments I, L.P.(12)(13)

 

Investment Partnership

            

   

LP Interests (Fully diluted 2.3%)

     2,500  4,150 

              

Logix Acquisition Company, LLC(10)

 

Competitive Local Exchange Carrier

            

   

LIBOR Plus 8.28% (Floor 1.00%), Current Coupon 9.28%, Secured Debt (Maturity—June 24, 2021)(9)

  8,672  8,528  8,528 

              

Looking Glass Investments, LLC(12)(13)

 

Specialty Consumer Finance

            

   

9% Unsecured Debt (Maturity—June 30, 2020)

  188  188  188 

   

Member Units (2.5 units)

     125  125 

   

Member Units (LGI Predictive Analytics LLC) (190,712 units)(8)

     183  183 

         496  496 

              

Messenger, LLC(10)

 

Supplier of Specialty Stationery and Related Products to the Funeral Industry

            

   

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—September 9, 2020)(9)

  14,497  14,416  14,497 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

iQor US Inc.(11)

 

Business Process Outsourcing Services Provider

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—April 1, 2021)(9)

  9,837  9,683  8,083 

              

irth Solutions, LLC

 

Provider of Damage Prevention Information Technology Services

            

   

Member Units (27,893 units)

     1,441  1,690 

              

Jackmont Hospitality, Inc.(10)

 

Franchisee of Casual Dining Restaurants

            

   

LIBOR Plus 4.25% (Floor 1.00%), Current Coupon 5.25% / 2.50% PIK, Current Coupon Plus PIK 7.75%, Secured Debt (Maturity—May 26, 2021)(9)

  4,439  4,421  4,272 

              

Joerns Healthcare, LLC(11)

 

Manufacturer and Distributor of Health Care Equipment & Supplies

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—May 9, 2020)(9)

  14,767  14,684  14,361 

              

JSS Holdings, Inc.(11)

 

Aircraft Maintenance Program Provider

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—August 31, 2021)(9)

  16,171  15,809  15,363 

              

Kendra Scott, LLC(11)

 

Jewelry Retail Stores

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—July 17, 2020)(9)

  5,726  5,679  5,698 

              

Keypoint Government Solutions, Inc.(11)

 

Provider of Pre-Employment Screening Services

            

   

LIBOR Plus 6.50% (Floor 1.25%), Current Coupon 7.75%, Secured Debt (Maturity—November 13, 2017)(9)

  5,881  5,856  5,851 

              

LaMi Products, LLC(10)

 

General Merchandise Distribution

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—September 16, 2020)(9)

  10,735  10,649  10,735 

              

Lansing Trade Group LLC(11)

 

Commodity Merchandiser

            

   

9.25% Unsecured Debt (Maturity—February 15, 2019)

  6,000  6,000  5,850 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Minute Key, Inc.

 

Operator of Automated Key Duplication Kiosks

            

   

10% Current / 2% PIK Secured Debt (Maturity—September 19, 2019)

  15,620  15,302  15,302 

   

Warrants (1,437,409 equivalent units)

     280  370 

         15,582  15,672 

              

Mood Media Corporation(11)(13)

 

Provider of Electronic Equipment

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—May 1, 2019)(9)

  14,843  14,746  14,131 

              

New Media Holdings II LLC(11)(13)

 

Local Newspaper Operator

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—June 4, 2020)(9)

  14,926  14,653  14,832 

              

North American Lifting Holdings, Inc.(11)

 

Crane Service Provider

            

   

LIBOR Plus 4.50% (Floor 1.00%), Current Coupon 5.50%, Secured Debt (Maturity—November 27, 2020)(9)

  2,539  2,036  2,069 

              

North Atlantic Trading Company, Inc.(11)

 

Marketer/Distributor of Tobacco Products

            

   

LIBOR Plus 6.50% (Floor 1.25%), Current Coupon 7.75%, Secured Debt (Maturity—January 13, 2020)(9)

  9,422  9,365  9,357 

              

Novitex Intermediate, LLC(11)

 

Provider of Document Management Services

            

   

LIBOR Plus 6.75% (Floor 1.25%), Current Coupon 8.00%, Secured Debt (Maturity—July 7, 2020)(9)

  8,526  8,388  8,014 

              

NTM Acquisition Corp.(11)

 

Provider of B2B Travel Information Content

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—June 7, 2022)(9)

  4,197  4,135  4,176 

              

Ospemifene Royalty Sub LLC (QuatRx)(10)

 

Estrogen-Deficiency Drug Manufacturer and Distributor

            

   

11.5% Secured Debt (Maturity—November 15, 2026)(14)

  5,071  5,071  3,324 

              

Pardus Oil and Gas, LLC(11)

 

Oil & Gas Exploration & Production

            

   

13% PIK Secured Debt (Maturity—November 12, 2021)

  1,826  1,826  1,826 

   

5% PIK Secured Debt (Maturity—May 13, 2022)

  980  980  980 

   

Member Units (2,472 units)

     2,472  2,472 

         5,278  5,278 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Larchmont Resources, LLC(11)

 

Oil & Gas Exploration & Production

            

   

LIBOR Plus 8.75% (Floor 1.00%), Current Coupon 9.75%, Secured Debt (Maturity—August 7, 2019)(9)(14)

  7,784  7,503  2,880 

              

LKCM Headwater Investments I, L.P.(12)(13)

 

Investment Partnership

            

   

LP Interests (Fully diluted 2.3%)

     2,500  4,065 

              

Logix Acquisition Company, LLC(10)

 

Competitive Local Exchange Carrier

            

   

LIBOR Plus 8.28% (Floor 1.00%), Current Coupon 9.28%, Secured Debt (Maturity—June 24, 2021)(9)

  8,750  8,599  8,599 

              

Looking Glass Investments, LLC(12)(13)

 

Specialty Consumer Finance

            

   

9% Unsecured Debt (Maturity—June 30, 2020)

  188  188  188 

   

Member Units (2.5 units)

     125  125 

   

Member Units (LGI Predictive Analytics LLC) (190,712 units)(8)

     188  188 

         501  501 

              

MediMedia USA, Inc.(11)

 

Provider of Healthcare Media and Marketing

            

   

LIBOR Plus 6.75% (Floor 1.25%), Current Coupon 8.00%, Secured Debt (Maturity—November 20, 2018)(9)

  11,084  11,012  11,084 

              

Messenger, LLC(10)

 

Supplier of Specialty Stationery and Related Products to the Funeral Industry

            

   

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—September 9, 2020)(9)

  14,781  14,693  14,703 

              

Milk Specialties Company(11)

 

Processor of Nutrition Products

            

   

LIBOR Plus 7.00% (Floor 1.25%), Current Coupon 8.25%, Secured Debt (Maturity—November 9, 2018)(9)

  726  724  726 

              

Minute Key, Inc.

 

Operator of Automated Key Duplication Kiosks

            

   

10% Current / 2% PIK Secured Debt (Maturity—September 19, 2019)

  15,540  15,201  15,201 

   

Warrants (1,437,409 equivalent units)

     280  280 

         15,481  15,481 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Paris Presents Incorporated(11)

 

Branded Cosmetic and Bath Accessories

            

   

LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—December 31, 2021)(9)

  2,000  1,967  1,960 

              

Parq Holdings Limited Partnership(11)(13)

 

Hotel & Casino Operator

            

   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—December 17, 2020)(9)

  7,500  7,388  7,163 

              

Permian Holdings, Inc.(11)

 

Storage Tank Manufacturer

            

   

10.5% Secured Debt (Maturity—January 15, 2018)(14)

  2,755  2,740  785 

              

Pernix Therapeutics Holdings, Inc.(10)

 

Pharmaceutical Royalty

            

   

12% Secured Debt (Maturity—August 1, 2020)

  3,447  3,447  3,322 

              

Pet Holdings ULC(11)(13)

 

Retailer of Pet Products and Supplies to Consumers

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—July 5, 2022)(9)

  2,500  2,476  2,506 

              

Pike Corporation(11)

 

Construction and Maintenance Services for Electric Transmission and Distribution Infrastructure

            

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—June 22, 2022)(9)

  14,000  13,711  14,008 

              

Point.360(10)

 

Fully Integrated Provider of Digital Media Services

            

   

Warrants (65,463 equivalent shares)

     69   

   

Common Stock (163,658 shares)

     273  105 

         342  105 

              

Polycom, Inc.(11)

 

Provider of Audio and Video Communication Solutions

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—September 27, 2023)(9)

  5,500  5,294  5,308 

              

Prowler Acquisition Corp.(11)

 

Specialty Distributor to the Energy Sector

            

   

LIBOR Plus 4.50% (Floor 1.00%), Current Coupon 5.50%, Secured Debt (Maturity—January 28, 2020)(9)

  9,543  7,821  7,301 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Mood Media Corporation(11)(13)

 

Provider of Electronic Equipment

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—May 1, 2019)(9)

  14,881  14,769  13,709 

              

New Media Holdings II LLC(11)(13)

 

Local Newspaper Operator

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—June 4, 2020)(9)

  14,714  14,442  14,634 

              

North American Lifting Holdings, Inc.(11)

 

Crane Service Provider

            

   

LIBOR Plus 4.50% (Floor 1.00%), Current Coupon 5.50%, Secured Debt (Maturity—November 27, 2020)(9)

  2,552  2,022  1,971 

              

North Atlantic Trading Company, Inc.(11)

 

Marketer/Distributor of Tobacco Products

            

   

LIBOR Plus 6.50% (Floor 1.25%), Current Coupon 7.78%, Secured Debt (Maturity—January 13, 2020)(9)

  9,448  9,390  9,366 

              

Novitex Intermediate, LLC(11)

 

Provider of Document Management Services

            

   

LIBOR Plus 6.25% (Floor 1.25%), Current Coupon 7.50%, Secured Debt (Maturity—July 7, 2020)(9)

  8,581  8,440  8,152 

              

Ospemifene Royalty Sub LLC (QuatRx)(10)

 

Estrogen-Deficiency Drug Manufacturer and Distributor

            

   

11.5% Secured Debt (Maturity—November 15, 2026)(14)

  5,071  5,071  3,324 

              

Paris Presents Incorporated(11)

 

Branded Cosmetic and Bath Accessories

            

   

LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—December 31, 2021)(9)

  2,000  1,968  1,960 

              

Parq Holdings Limited Partnership(11)(13)

 

Hotel & Casino Operator

            

   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—December 17, 2020)(9)

  7,500  7,380  7,200 

              

Permian Holdings, Inc.(11)(14)

 

Storage Tank Manufacturer

            

   

10.5% Secured Debt (Maturity—January 15, 2018)(14)

  2,755  2,740  799 

              

Pernix Therapeutics Holdings, Inc.(10)

 

Pharmaceutical Royalty

            

   

12% Secured Debt (Maturity—August 1, 2020)

  3,547  3,547  3,327 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

PT Network, LLC(10)

 

Provider of Outpatient Physical Therapy and Sports Medicine Services

            

   

LIBOR Plus 7.75% (Floor 1.50%), Current Coupon 9.25%, Secured Debt (Maturity—November 1, 2018)(9)

  16,335  16,128  16,090 

              

QBS Parent, Inc.(11)

 

Provider of Software and Services to the Oil & Gas Industry

            

   

LIBOR Plus 4.75% (Floor 1.00%), Current Coupon 5.75%, Secured Debt (Maturity—August 7, 2021)(9)

  11,302  11,227  11,189 

              

Raley's(11)

 

Family-Owned Supermarket Chain

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—May 18, 2022)(9)

  4,230  4,157  4,238 

              

Redbox Automated Retail, LLC(11)

 

Operator of Home Media Entertainment Kiosks

            

   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—September 27, 2021)(9)

  15,000  14,550  14,700 

              

Renaissance Learning, Inc.(11)

 

Technology-based K-12 Learning Solutions

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—April 11, 2022)(9)

  3,000  2,977  2,957 

              

RGL Reservoir Operations Inc.(11)(13)

 

Oil & Gas Equipment and Services

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—August 13, 2021)(9)

  3,920  3,832  882 

              

RLJ Entertainment, Inc.(10)

 

Movie and TV Programming Licensee and Distributor

            

   

LIBOR Plus 8.75% (Floor 0.25%), Current Coupon 9.54%, Secured Debt (Maturity—September 11, 2019)(9)

  9,009  9,009  9,009 

              

RM Bidder, LLC(10)

 

Scripted and Unscripted TV and Digital Programming Provider

            

   

Warrants (327,532 equivalent units)

     425  300 

   

Member Units (2,779 units)

     46  44 

         471  344 

              

SAExploration, Inc.(10)(13)

 

Geophysical Services Provider

            

   

Common Stock (50 shares)

     65  27 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Pike Corporation(11)

 

Construction and Maintenance Services for Electric Transmission and Distribution Infrastructure

            

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—June 22, 2022)(9)

  14,000  13,703  14,105 

              

Point.360(10)

 

Fully Integrated Provider of Digital Media Services

            

   

Warrants (65,463 equivalent shares)

     69   

   

Common Stock (163,658 shares)

     273  105 

         342  105 

              

Prowler Acquisition Corp.(11)

 

Specialty Distributor to the Energy Sector

            

   

LIBOR Plus 4.50% (Floor 1.00%), Current Coupon 5.50%, Secured Debt (Maturity—January 28, 2020)(9)

  6,560  5,409  4,756 

              

PT Network, LLC(10)

 

Provider of Outpatient Physical Therapy and Sports Medicine Services

            

   

LIBOR Plus 7.75% (Floor 1.50%), Current Coupon 9.25%, Secured Debt (Maturity—November 1, 2018)(9)

  15,757  15,528  15,489 

              

QBS Parent, Inc.(11)

 

Provider of Software and Services to the Oil & Gas Industry

            

   

LIBOR Plus 4.75% (Floor 1.00%), Current Coupon 5.75%, Secured Debt (Maturity—August 7, 2021)(9)

  11,331  11,252  11,218 

              

Raley's(11)

 

Family-Owned Supermarket Chain

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—May 18, 2022)(9)

  5,029  4,940  5,010 

              

Renaissance Learning, Inc.(11)

 

Technology-based K-12 Learning Solutions

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—April 11, 2022)(9)

  3,000  2,976  2,780 

              

RGL Reservoir Operations Inc.(11)(13)

 

Oil & Gas Equipment and Services

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—August 13, 2021)(9)

  3,930  3,839  1,474 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

SAFETY Investment Holdings, LLC

 

Provider of Intelligent Driver Record Monitoring Software and Services

            

   

Member Units (2,000,000 units)

     2,000  2,000 

              

Sage Automotive Interiors, Inc(11)

 

Automotive Textiles Manufacturer

            

   

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.00%, Secured Debt (Maturity—October 8, 2021)(9)

  8,138  8,095  8,056 

              

Salient Partners L.P.(11)

 

Provider of Asset Management Services

            

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—June 9, 2021)(9)

  11,038  10,751  10,568 

              

School Specialty, Inc.(11)

 

Distributor of Education Supplies and Furniture

            

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—June 11, 2019)(9)

  5,712  5,624  5,655 

              

Sigma Electric Manufacturing Corporation(10)(13)

 

Manufacturer and Distributor of Electrical Fittings and Parts

            

   

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—May 13, 2019)(9)

  9,328  9,328  9,328 

              

Sorenson Communications, Inc.(11)

 

Manufacturer of Communication Products for Hearing Impaired

            

   

LIBOR Plus 5.75% (Floor 2.25%), Current Coupon 8.00%, Secured Debt (Maturity—April 30, 2020)(9)

  13,405  13,311  13,405 

              

Sotera Defense Solutions, Inc.(11)

 

Defense Industry Intelligence Services

            

   

LIBOR Plus 7.50% (Floor 1.50%), Current Coupon 9.00%, Secured Debt (Maturity—April 21, 2017)(9)

  9,436  9,339  9,059 

              

Stardust Finance Holdings, Inc.(11)

 

Manufacturer of Diversified Building Products

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—March 13, 2022)(9)

  12,854  12,722  12,814 

              

Subsea Global Solutions, LLC(10)

 

Underwater Maintenance and Repair Services

            

   

LIBOR Plus 6.00% (Floor 1.50%), Current Coupon 7.50%, Secured Debt (Maturity—March 17, 2020)(9)

  5,629  5,586  5,512 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

RLJ Entertainment, Inc.(10)

 

Movie and TV Programming Licensee and Distributor

            

   

LIBOR Plus 8.75% (Floor 0.25%), Current Coupon 9.40%, Secured Debt (Maturity—September 11, 2019)(9)

  9,153  9,153  9,002 

              

RM Bidder, LLC(10)

 

Acquisition Vehicle

            

   

Warrants (327,532 equivalent units)

     425  300 

   

Member Units (2,779 units)

     46  44 

         471  344 

              

SAExploration, Inc.(10)(13)

 

Geophysical Services Provider

            

   

Common Stock (6,472 shares)

     65  27 

              

SAFETY Investment Holdings, LLC

 

Provider of Intelligent Driver Record Monitoring Software and Services

            

   

Member Units (2,000,000 units)

     2,000  2,000 

              

Sage Automotive Interiors, Inc(11)

 

Automotive Textiles Manufacturer

            

   

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.00%, Secured Debt (Maturity—October 8, 2021)(9)

  5,927  5,888  5,867 

              

Salient Partners L.P.(11)

 

Provider of Asset Management Services

            

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—June 9, 2021)(9)

  11,336  11,029  10,769 

              

School Specialty, Inc.(11)

 

Distributor of Education Supplies and Furniture

            

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—June 11, 2019)(9)

  6,178  6,078  6,054 

              

Sorenson Communications, Inc.(11)

 

Manufacturer of Communication Products for Hearing Impaired

            

   

LIBOR Plus 5.75% (Floor 2.25%), Current Coupon 8.00%, Secured Debt (Maturity—April 30, 2020)(9)

  13,439  13,340  13,288 

              

Sotera Defense Solutions, Inc.(11)

 

Defense Industry Intelligence Services

            

   

LIBOR Plus 7.50% (Floor 1.50%), Current Coupon 9.00%, Secured Debt (Maturity—April 21, 2017)(9)

  9,436  9,297  8,728 

              

Stardust Finance Holdings, Inc.(11)

 

Manufacturer of Diversified Building Products

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—March 13, 2022)(9)

  9,854  9,730  9,640 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Synagro Infrastructure Company, Inc(11)

 

Waste Management Services

            

   

LIBOR Plus 5.25% (Floor 1.00%), Current Coupon 6.25%, Secured Debt (Maturity—August 22, 2020)(9)

  4,714  4,655  3,971 

              

Targus International, LLC(11)

 

Distributor of Protective Cases for Mobile Devices

            

   

15% PIK Secured Debt (Maturity—December 31, 2019)

  1,099  1,099  1,099 

   

Common Stock (Targus Cayman HoldCo Limited) (249,614 shares)(13)

     2,555  2,260 

         3,654  3,359 

              

TeleGuam Holdings, LLC(11)

 

Cable and Telecom Services Provider

            

   

LIBOR Plus 4.00% (Floor 1.25%), Current Coupon 5.25%, Secured Debt (Maturity—December 10, 2018)(9)

  7,642  7,632  7,603 

   

LIBOR Plus 7.50% (Floor 1.25%), Current Coupon 8.75%, Secured Debt (Maturity—June 10, 2019)(9)

  10,500  10,436  10,448 

         18,068  18,051 

              

Templar Energy LLC(11)

 

Oil & Gas Exploration & Production

            

   

Member Units (97,048 units)

     970  704 

              

The Topps Company, Inc.(11)

 

Trading Cards & Confectionary

            

   

LIBOR Plus 6.00% (Floor 1.25%), Current Coupon 7.25%, Secured Debt (Maturity—October 2, 2020)(9)

  2,224  2,214  2,216 

              

TOMS Shoes, LLC(11)

 

Global Designer, Distributor, and Retailer of Casual Footwear

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—October 30, 2020)(9)

  4,925  4,560  3,644 

              

Travel Leaders Group, LLC(11)

 

Travel Agency Network Provider

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—December 7, 2020)(9)

  11,155  11,091  11,114 

              

Truck Bodies and Equipment International, Inc.(10)

 

Manufacturer of Dump Truck Bodies and Dump Trailers

            

   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—March 31, 2021)(9)

  15,750  15,595  15,595 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Subsea Global Solutions, LLC(10)

 

Underwater Maintenance and Repair Services

            

   

LIBOR Plus 6.00% (Floor 1.50%), Current Coupon 7.50%, Secured Debt (Maturity—March 17, 2020)(9)

  5,749  5,703  5,629 

              

Synagro Infrastructure Company, Inc(11)

 

Waste Management Services

            

   

LIBOR Plus 5.25% (Floor 1.00%), Current Coupon 6.25%, Secured Debt (Maturity—August 22, 2020)(9)

  4,714  4,653  3,889 

              

Targus International, LLC(11)

 

Distributor of Protective Cases for Mobile Devices

            

   

15% PIK Secured Debt (Maturity—December 31, 2019)

  1,058  1,058  1,058 

   

Common Stock (Targus Cayman HoldCo Limited) (249,614 shares)(13)

     2,555  2,555 

         3,613  3,613 

              

TeleGuam Holdings, LLC(11)

 

Cable and Telecom Services Provider

            

   

LIBOR Plus 4.00% (Floor 1.25%), Current Coupon 5.25%, Secured Debt (Maturity—December 10, 2018)(9)

  7,733  7,722  7,694 

   

LIBOR Plus 7.50% (Floor 1.25%), Current Coupon 8.75%, Secured Debt (Maturity—June 10, 2019)(9)

  10,500  10,430  10,447 

         18,152  18,141 

              

Templar Energy LLC(11)

 

Oil & Gas Exploration & Production

            

   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—November 25, 2020)(9)(14)

  4,000  3,962  1,120 

              

The Topps Company, Inc.(11)

 

Trading Cards & Confectionary

            

   

LIBOR Plus 6.00% (Floor 1.25%), Current Coupon 7.25%, Secured Debt (Maturity—October 2, 2018)(9)

  1,881  1,871  1,869 

              

TOMS Shoes, LLC(11)

 

Global Designer, Distributor, and Retailer of Casual Footwear

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—October 30, 2020)(9)

  4,938  4,558  3,234 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

UniRush, LLC

 

Provider of Prepaid Debit Card Solutions

            

   

12% Secured Debt (Maturity—February 1, 2019)

  12,000  10,880  10,880 

   

Warrants (444,725 equivalent units)

     1,250  1,250 

         12,130  12,130 

              

U.S. TelePacific Corp.(10)

 

Provider of Communications and Managed Services

            

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—February 24, 2021)(9)

  7,500  7,371  7,371 

              

US Joiner Holding Company(11)

 

Marine Interior Design and Installation

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—April 16, 2020)(9)

  9,600  9,535  9,552 

              

VCVH Holding Corp. (Verisk)(11)

 

Healthcare Technology Services Focused on Revenue Maximization

            

   

LIBOR Plus 9.25% (Floor 1.00%), Current Coupon 10.25%, Secured Debt (Maturity—June 1, 2024)(9)

  1,500  1,463  1,493 

              

Virtex Enterprises, LP(10)

 

Specialty, Full-Service Provider of Complex Electronic Manufacturing Services

            

   

12% Secured Debt (Maturity—December 27, 2018)

  1,667  1,548  1,548 

   

Preferred Class A Units (14 units; 5% cumulative)(8)

     333  581 

   

Warrants (11 equivalent units)

     186  198 

         2,067  2,327 

              

Vivid Seats LLC(11)

 

Provider of Online Secondary Ticket Marketplace

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—March 1, 2022)(9)

  4,938  4,619  4,956 

              

Wellnext, LLC(10)

 

Manufacturer of Supplements and Vitamins

            

   

LIBOR Plus 9.00% (Floor 0.50%), Current Coupon 9.85%, Secured Debt (Maturity—May 23, 2021)(9)

  10,122  10,027  10,027 

              

Western Dental Services, Inc.(11)

 

Dental Care Services

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—November 1, 2018)(9)

  4,904  4,902  4,898 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Travel Leaders Group, LLC(11)

 

Travel Agency Network Provider

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—December 7, 2020)(9)

  11,317  11,245  11,232 

              

UniRush, LLC

 

Provider of Prepaid Debit Card Solutions

            

   

12% Secured Debt (Maturity—February 1, 2019)

  12,000  10,783  10,783 

   

Warrants (444,725 equivalent units)

     1,250  1,250 

         12,033  12,033 

              

US Joiner Holding Company(11)

 

Marine Interior Design and Installation

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—April 16, 2020)(9)

  9,625  9,556  9,578 

              

VCVH Holding Corp. (Verisk)(11)

 

Healthcare Technology Services Focused on Revenue Maximization

            

   

LIBOR Plus 9.25% (Floor 1.00%), Current Coupon 10.25%, Secured Debt (Maturity—June 1, 2024)(9)

  1,500  1,463  1,478 

              

Virtex Enterprises, LP(10)

 

Specialty, Full-Service Provider of Complex Electronic Manufacturing Services

            

   

12% Secured Debt (Maturity—December 27, 2018)

  1,667  1,537  1,537 

   

Preferred Class A Units (14 units; 5% cumulative)(8)

     333  553 

   

Warrants (11 equivalent units)

     186  168 

         2,056  2,258 

              

Vivid Seats LLC(11)

 

Provider of Online Secondary Ticket Marketplace

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—March 1, 2020)(9)

  5,000  4,665  4,950 

              

Wellnext, LLC(10)

 

Manufacturer of Supplements and Vitamins

            

   

LIBOR Plus 9.00% (Floor 0.50%), Current Coupon 9.68%, Secured Debt (Maturity—May 23, 2021)(9)

  10,250  10,150  10,150 

              

Western Dental Services, Inc.(11)

 

Dental Care Services

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—November 1, 2018)(9)

  4,904  4,902  4,733 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Wilton Brands LLC(11)

 

Specialty Housewares Retailer

            

   

LIBOR Plus 7.25% (Floor 1.25%), Current Coupon 8.50%, Secured Debt (Maturity—August 30, 2018)(9)

  1,358  1,349  1,134 

              

Worley Claims Services, LLC(10)

 

Insurance Adjustment Management and Services Provider

            

   

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.00%, Secured Debt (Maturity—October 31, 2020)(9)

  6,386  6,340  6,169 

              

YP Holdings LLC(11)

 

Online and Offline Advertising Operator

            

   

LIBOR Plus 11.00% (Floor 1.25%), Current Coupon 12.25%, Secured Debt (Maturity—June 4, 2018)(9)

  11,182  10,621  10,847 

              

Zilliant Incorporated

 

Price Optimization and Margin Management Solutions

            

   

Preferred Stock (186,777 shares)

     154  260 

   

Warrants (952,500 equivalent shares)

     1,071  1,190 

         1,225  1,450 

Subtotal Non-Control/Non-Affiliate Investments (53.1% of total investments at fair value)

 $1,046,923 $1,019,743 

Total Portfolio Investments, September 30, 2016

 $1,816,666 $1,920,267 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

JuneSeptember 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Wilton Brands LLC(11)

 

Specialty Housewares Retailer

            

   

LIBOR Plus 7.25% (Floor 1.25%), Current Coupon 8.50%, Secured Debt (Maturity—August 30, 2018)(9)

  1,408  1,396  1,268 

              

Worley Claims Services, LLC(10)

 

Insurance Adjustment Management and Services Provider

            

   

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.00%, Secured Debt (Maturity—October 31, 2020)(9)

  6,403  6,354  6,183 

              

YP Holdings LLC(11)

 

Online and Offline Advertising Operator

            

   

LIBOR Plus 6.75% (Floor 1.25%), Current Coupon 8.00%, Secured Debt (Maturity—June 4, 2018)(9)

  9,455  9,119  8,888 

              

Zilliant Incorporated

 

Price Optimization and Margin Management Solutions

            

   

Preferred Stock (186,777 shares)

     154  260 

   

Warrants (952,500 equivalent shares)

     1,071  1,190 

         1,225  1,450 

Subtotal Non-Control/Non-Affiliate Investments (50.8% of total investments at fair value)

 $1,005,044 $959,246 

Total Portfolio Investments, June 30, 2016

 $1,792,920 $1,888,138 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

June 30, 2016

(dollars in thousands)

(Unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
  Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 
 

Marketable Securities and Idle Funds Investments

Marketable Securities and Idle Funds Investments

      

Marketable Securities and Idle Funds Investments

      

  

Black Stone Minerals, L.P.(13)(15)

 

Independent Oil & Gas Mineral Interest Holder

       

  

Common Stock (67,300 shares)(8)

   $1,120 $1,043 

    

Other Marketable Securities and Idle Funds Investments(13)(15)

 

Investments in Marketable Securities and Diversified, Registered Bond Funds

        

Investments in Marketable Securities and Diversified, Registered Bond Funds

       

    592 540     $ $ 

Subtotal Marketable Securities and Idle Funds Investments (0.1% of total investments at fair value)

 $1,712 $1,583 

Subtotal Marketable Securities and Idle Funds Investments (0.0% of total investments at fair value)

Subtotal Marketable Securities and Idle Funds Investments (0.0% of total investments at fair value)

 $ $ 

Total Investments, June 30, 2016

 $1,794,632 $1,889,721 

Total Investments, September 30, 2016

Total Investments, September 30, 2016

 $1,816,666 $1,920,267 

(1)
All investments are Lower Middle Market portfolio investments, unless otherwise noted. See Note B 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 Agreement or in support of the SBA-guaranteed debentures issued by the Funds.

(2)
Debt investments are income producing, unless otherwise noted. Equity and warrants are non-income producing, unless otherwise noted.

(3)
See Note C for a summary of geographic location of portfolio companies.

(4)
Principal is net of repayments. Cost is net of repayments and accumulated unearned income.

(5)
Control investments are defined by the Investment Company Act of 1940, as amended ("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% 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. A majority of the variable rate loans in the Company's investment portfolio bear interest at a rate that may be determined by reference to either LIBOR or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each such loan, the Company has provided the weighted average annual stated interest rate in effect at JuneSeptember 30, 2016. As noted in the table above, 60%this schedule, 62% (based on par)the par amount of debt securitiesthe loans) of the loans contain LIBOR floors which range between 0.25% and 2.25%.

(10)
Private Loan portfolio investment. See Note B for a description of Private Loan portfolio investments.

(11)
Middle Market portfolio investment. See Note B for a description of Middle Market portfolio investments.

(12)
Other Portfolio investment. See Note B 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 investment.

(15)
Marketable securities and idle fund investments.

(16)
External Investment Manager. Investment is not encumbered as security for the Company's Credit Agreement 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)
Portfolio company is in a bankruptcy process and, as such, the maturity date of our debt investments in this portfolio company will not be finally determined until such process is complete. As noted in footnote (14), our debt investments in this portfolio company are on non-accrual status.

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Control Investments(5)

       

              

Access Media Holdings, LLC(10)

 

Private Cable Operator

            

   

5.00% Current / 5.00% PIK Secured Debt (Maturity—July 22, 2020)

 $21,554 $21,554 $20,380 

   

Preferred Member Units (4,500,000 units; 12% cumulative)

     4,394  2,000 

   

Member Units (45 units)

     1   

         25,949  22,380 

              

AmeriTech College, LLC

 

For-Profit Nursing and Healthcare College

            

   

10% Secured Debt (Maturity—May 15, 2016)

  514  514  514 

   

10% Secured Debt (Maturity—November 30, 2019)

  489  489  489 

   

10% Secured Debt (Maturity—January 31, 2020)

  3,025  3,025  3,025 

   

Preferred Member Units (294 units; 5%)(8)

     2,291  2,291 

         6,319  6,319 

              

ASC Interests, LLC

 

Recreational and Educational Shooting Facility

            

   

11% Secured Debt (Maturity—July 31, 2018)

  2,500  2,470  2,500 

   

Member Units (1,500 units)(8)

     1,500  2,230 

         3,970  4,730 

              

Bond-Coat, Inc.

 

Casing and Tubing Coating Services

            

   

12% Secured Debt (Maturity—December 28, 2017)

  11,596  11,521  11,596 

   

Common Stock (57,508 shares)

     6,350  9,140 

         17,871  20,736 

              

Café Brazil, LLC

 

Casual Restaurant Group

            

   

Member Units (1,233 units)(8)

     1,742  7,330 

              

CBT Nuggets, LLC

 

Produces and Sells IT Training Certification Videos

            

   

Member Units (416 units)(8)

     1,300  42,120 

              

CMS Minerals LLC

 

Oil & Gas Exploration & Production

            

   

Preferred Member Units (458 units)(8)

     2,967  6,914 

              

Datacom, LLC

 

Technology and Telecommunications Provider

            

   

10.5% Secured Debt (Maturity—May 31, 2019)

  11,205  11,122  10,970 

   

Class A Preferred Member Units (15% cumulative)(8)

     1,181  1,181 

   

Class B Preferred Member Units (6,453 units)

     6,030  5,079 

         18,333  17,230 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Garreco, LLC

 

Manufacturer and Supplier of Dental Products

            

   

14% Secured Debt (Maturity—January 12, 2018)

  5,800  5,739  5,739 

   

Member Units (1,200 units)

     1,200  1,270 

         6,939  7,009 

              

GRT Rubber Technologies LLC

 

Manufacturer of Engineered Rubber Products

            

   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—December 19, 2019)(9)

  16,122  15,988  15,988 

   

Member Units (5,879 units)

     13,065  15,580 

         29,053  31,568 

              

Gulf Manufacturing, LLC

 

Manufacturer of Specialty Fabricated Industrial Piping Products

            

   

9% PIK Secured Debt (Ashland Capital IX, LLC) (Maturity—June 30, 2017)

  777  777  777 

   

Member Units (438 units)(8)

     2,980  13,770 

         3,757  14,547 

              

Harrison Hydra-Gen, Ltd.

 

Manufacturer of Hydraulic Generators

            

   

9% Secured Debt (Maturity—January 8, 2016)

  5,010  5,010  5,010 

   

Preferred Stock (8% cumulative)(8)

     1,361  1,361 

   

Common Stock (107,456 shares)

     718  2,600 

         7,089  8,971 

              

Hawthorne Customs and Dispatch Services, LLC

 

Facilitator of Import Logistics, Brokerage, and Warehousing

            

   

Member Units (500 units)(8)

     589  460 

   

Member Units (Wallisville Real Estate, LLC) (588,210 units)(8)

     1,215  2,220 

         1,804  2,680 

              

HW Temps LLC

 

Temporary Staffing Solutions

            

   

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity July 2, 2020)(9)

  9,976  9,884  9,884 

   

Preferred Member Units (3,200 units)(8)

     3,942  3,942 

         13,826  13,826 

              

Hydratec, Inc.

 

Designer and Installer of Micro-Irrigation Systems

            

   

Common Stock (7,095 shares)(8)

     7,095  14,950 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
  Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 
 

IDX Broker, LLC

 

Provider of Marketing and CRM Tools for the Real Estate Industry

        

Provider of Marketing and CRM Tools for the Real Estate Industry

       

  

12.5% Secured Debt (Maturity—November 15, 2018)

 11,350 11,281 11,350   

12.5% Secured Debt (Maturity—November 15, 2018)

 11,350 11,281 11,350 

  

Member Units (5,400 units)

   5,606 6,440   

Member Units (5,400 units)

   5,606 6,440 

    16,887 17,790     16,887 17,790 

    

Indianapolis Aviation Partners, LLC

 

Fixed Base Operator

        

Fixed Base Operator

       

  

15% Secured Debt (Maturity—January 15, 2016)

 3,100 3,095 3,100   

15% Secured Debt (Maturity—January 15, 2016)

 3,100 3,095 3,100 

  

Warrants (1,046 equivalent units)

   1,129 2,540   

Warrants (1,046 equivalent units)

   1,129 2,540 

    4,224 5,640     4,224 5,640 

    

Jensen Jewelers of Idaho, LLC

 

Retail Jewelry Store

        

Retail Jewelry Store

       

  

Prime Plus 6.75% (Floor 2.00%), Current Coupon 10.25%, Secured Debt (Maturity—November 14, 2016)(9)

 4,055 4,028 4,055   

Prime Plus 6.75% (Floor 2.00%), Current Coupon 10.25%, Secured Debt (Maturity—November 14, 2016)(9)

 4,055 4,028 4,055 

  

Member Units (627 units)(8)

   811 4,750   

Member Units (627 units)(8)

   811 4,750 

    4,839 8,805     4,839 8,805 

    

Lamb's Venture, LLC

 

Aftermarket Automotive Services Chain

        

Aftermarket Automotive Services Chain

       

  

11% Secured Debt (Maturity—May 31, 2018)

 7,962 7,961 7,962   

11% Secured Debt (Maturity—May 31, 2018)

 7,962 7,961 7,962 

  

Preferred Equity (non-voting)

   328 328   

Preferred Equity (non-voting)

   328 328 

  

Member Units (742 units)

   5,273 4,690   

Member Units (742 units)

   5,273 4,690 

  

9.5% Secured Debt (Lamb's Real Estate Investment I, LLC) (Maturity—October 1, 2025)

 919 919 919   

9.5% Secured Debt (Lamb's Real Estate Investment I, LLC) (Maturity—October 1, 2025)

 919 919 919 

  

Member Units (Lamb's Real Estate Investment I, LLC) (1,000 units)(8)

   625 1,240   

Member Units (Lamb's Real Estate Investment I, LLC) (1,000 units)(8)

   625 1,240 

    15,106 15,139     15,106 15,139 

    

Lighting Unlimited, LLC

 

Commercial and Residential Lighting Products and Design Services

        

Commercial and Residential Lighting Products and Design Services

       

  

8% Secured Debt (Maturity—August 22, 2016)

 1,514 1,514 1,514   

8% Secured Debt (Maturity—August 22, 2016)

 1,514 1,514 1,514 

  

Preferred Equity (non-voting)

   434 430   

Preferred Equity (non-voting)

   434 430 

  

Warrants (71 equivalent units)

   54 40   

Warrants (71 equivalent units)

   54 40 

  

Member Units (700 units)(8)

   100 350   

Member Units (700 units)(8)

   100 350 

    2,102 2,334     2,102 2,334 

    

Marine Shelters Holdings, LLC (LoneStar Marine Shelters)

 

Fabricator of Marine and Industrial Shelters

        

Fabricator of Marine and Industrial Shelters

       

  

12% PIK Secured Debt (Maturity—December 28, 2017)

 9,053 8,967 8,870   

12% PIK Secured Debt (Maturity—December 28, 2017)

 9,053 8,967 8,870 

  

Preferred Member Units (3,810 units)

   5,352 4,881   

Preferred Member Units (3,810 units)

   5,352 4,881 

    14,319 13,751     14,319 13,751 

    

MH Corbin Holding LLC

 

Manufacturer and distributor of traffic safety products

       

  

10% Secured Debt (Maturity—August 31, 2020)

 14,000 13,869 13,869 

  

Preferred Member Units (4,000 shares)

   6,000 6,000 

    19,869 19,869 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
  Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 
 

MH Corbin Holding LLC

 

Manufacturer and distributor of traffic safety products

       

  

10% Secured Debt (Maturity—August 31, 2020)

 14,000 13,869 13,869 

  

Preferred Member Units (4,000 shares)

   6,000 6,000 

    19,869 19,869 

  

Mid-Columbia Lumber Products, LLC

 

Manufacturer of Finger-Jointed Lumber Products

        

Manufacturer of Finger-Jointed Lumber Products

       

  

10% Secured Debt (Maturity—December 18, 2017)

 1,750 1,750 1,750   

10% Secured Debt (Maturity—December 18, 2017)

 1,750 1,750 1,750 

  

12% Secured Debt (Maturity—December 18, 2017)

 3,900 3,900 3,900   

12% Secured Debt (Maturity—December 18, 2017)

 3,900 3,900 3,900 

  

Member Units (2,829 units)

   1,244 2,580   

Member Units (2,829 units)

   1,244 2,580 

  

9.5% Secured Debt (Mid-Columbia Real Estate, LLC) (Maturity—May 13, 2025)

 881 881 881   

9.5% Secured Debt (Mid—Columbia Real Estate, LLC) (Maturity—May 13, 2025)

 881 881 881 

  

Member Units (Mid-Columbia Real Estate, LLC) (250 units)(8)

   250 550   

Member Units (Mid—Columbia Real Estate, LLC) (250 units)(8)

   250 550 

    8,025 9,661     8,025 9,661 

    

MSC Adviser I, LLC(16)

 

Third Party Investment Advisory Services

        

Third Party Investment Advisory Services

       

  

Member Units (Fully diluted 100.0%)(8)

    27,272   

Member Units (Fully diluted 100.0%)(8)

    27,272 

    

Mystic Logistics Holdings, LLC

 

Logistics and Distribution Services Provider for Large Volume Mailers

        

Logistics and Distribution Services Provider for Large Volume Mailers

       

  

12% Secured Debt (Maturity—August 15, 2019)

 9,448 9,282 9,448   

12% Secured Debt (Maturity—August 15, 2019)

 9,448 9,282 9,448 

  

Common Stock (5,873 shares)(8)

   2,720 5,970   

Common Stock (5,873 shares)(8)

   2,720 5,970 

    12,002 15,418     12,002 15,418 

    

NAPCO Precast, LLC

 

Precast Concrete Manufacturing

        

Precast Concrete Manufacturing

       

  

Prime Plus 2.00% (Floor 7.00%), Current Coupon 9.00%, Secured Debt (Maturity—January 31, 2016)(9)

 625 625 625   

Prime Plus 2.00% (Floor 7.00%), Current Coupon 9.00%, Secured Debt (Maturity—January 31, 2016)(9)

 625 625 625 

  

Prime Plus 2.00% (Floor 7.00%), Current Coupon 9.00%, Secured Debt (Maturity—February 1, 2016)(9)

 3,380 3,379 3,380   

Prime Plus 2.00% (Floor 7.00%), Current Coupon 9.00%, Secured Debt (Maturity—February 1, 2016)(9)

 3,380 3,379 3,380 

  

18% Secured Debt (Maturity—February 1, 2016)

 4,924 4,923 4,924   

18% Secured Debt (Maturity—February 1, 2016)

 4,924 4,923 4,924 

  

Member Units (2,955 units)(8)

   2,975 8,590   

Member Units (2,955 units)(8)

   2,975 8,590 

    11,902 17,519     11,902 17,519 

    

NRI Clinical Research, LLC

 

Clinical Research Service Provider

        

Clinical Research Service Provider

       

  

14% Secured Debt (Maturity—September 8, 2017)

 4,617 4,539 4,539   

14% Secured Debt (Maturity—September 8, 2017)

 4,617 4,539 4,539 

  

Warrants (251,723 equivalent units)

   252 340   

Warrants (251,723 equivalent units)

   252 340 

  

Member Units (1,454,167 units)

   765 1,342   

Member Units (1,454,167 units)

   765 1,342 

    5,556 6,221     5,556 6,221 

    

NRP Jones, LLC

 

Manufacturer of Hoses, Fittings and Assemblies

  ��     

  

12% Secured Debt (Maturity—December 22, 2016)

 13,224 12,948 12,948 

  

Warrants (14,331 equivalent units)

   817 450 

  

Member Units (50,877 units)

   2,900 1,480 

    16,665 14,878 

  

OMi Holdings, Inc.

 

Manufacturer of Overhead Cranes

       

  

Common Stock (1,500 shares)

   1,080 13,640 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
  Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 
 

NRP Jones, LLC

 

Manufacturer of Hoses, Fittings and Assemblies

       

  

12% Secured Debt (Maturity—December 22, 2016)

 13,224 12,948 12,948 

  

Warrants (14,331 equivalent units)

   817 450 

  

Member Units (50,877 units)

   2,900 1,480 

    16,665 14,878 

  

OMi Holdings, Inc.

 

Manufacturer of Overhead Cranes

       

  

Common Stock (1,500 shares)

   1,080 13,640 

  

Pegasus Research Group, LLC (Televerde)

 

Provider of Telemarketing and Data Services

        

Provider of Telemarketing and Data Services

       

  

Member Units (460 units)(8)

   1,290 6,840   

Member Units (460 units)(8)

   1,290 6,840 

    

PPL RVs, Inc.

 

Recreational Vehicle Dealer

        

Recreational Vehicle Dealer

       

  

11.1% Secured Debt (Maturity—July 1, 2016)

 9,710 9,710 9,710   

11.1% Secured Debt (Maturity—July 1, 2016)

 9,710 9,710 9,710 

  

Common Stock (1,962 shares)

   2,150 9,770   

Common Stock (1,962 shares)

   2,150 9,770 

    11,860 19,480     11,860 19,480 

    

Principle Environmental, LLC

 

Noise Abatement Service Provider

        

Noise Abatement Service Provider

       

  

12% Secured Debt (Maturity—April 30, 2017)

 4,060 4,039 4,060   

12% Secured Debt (Maturity—April 30, 2017)

 4,060 4,039 4,060 

  

12% Current / 2% PIK Secured Debt (Maturity—April 30, 2017)

 3,310 3,309 3,310   

12% Current / 2% PIK Secured Debt (Maturity—April 30, 2017)

 3,310 3,309 3,310 

  

Preferred Member Units (19,631 units)(8)

   4,663 6,060   

Preferred Member Units (19,631 units)(8)

   4,663 6,060 

  

Warrants (1,036 equivalent units)

   1,200 310   

Warrants (1,036 equivalent units)

   1,200 310 

    13,211 13,740     13,211 13,740 

    

Quality Lease Service, LLC

 

Provider of Rigsite Accommodation Unit Rentals and Related Services

        

Provider of Rigsite Accommodation Unit Rentals and Related Services

       

  

8% PIK Secured Debt (Maturity—June 8, 2020)

 6,538 6,538 6,538   

8% PIK Secured Debt (Maturity—June 8, 2020)

 6,538 6,538 6,538 

  

Member Units (1,000 units)

   568 2,638   

Member Units (1,000 units)

   568 2,638 

    7,106 9,176     7,106 9,176 

    

River Aggregates, LLC

 

Processor of Construction Aggregates

        

Processor of Construction Aggregates

       

  

Zero Coupon Secured Debt (Maturity—June 30, 2018)

 750 556 556   

Zero Coupon Secured Debt (Maturity—June 30, 2018)

 750 556 556 

  

Member Units (1,150 units)(8)

   1,150 3,830   

Member Units (1,150 units)(8)

   1,150 3,830 

  

Member Units (RA Properties, LLC) (1,500 units)

   369 2,360   

Member Units (RA Properties, LLC) (1,500 units)

   369 2,360 

    2,075 6,746     2,075 6,746 

    

SoftTouch Medical Holdings LLC

 

Home Provider of Pediatric Durable Medical Equipment

        

Home Provider of Pediatric Durable Medical Equipment

       

  

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—October 31, 2019)(9)

 8,075 8,010 8,010   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—October 31, 2019)(9)

 8,075 8,010 8,010 

  

Member Units (4,450 units)(8)

   4,930 5,710   

Member Units (4,450 units)(8)

   4,930 5,710 

    12,940 13,720     12,940 13,720 

    

Southern RV, LLC

 

Recreational Vehicle Dealer

       

  

13% Secured Debt (Maturity—August 8, 2018)

 11,400 11,296 11,400 

  

Member Units (1,680 units)(8)

   1,680 15,100 

  

13% Secured Debt (Southern RV Real Estate, LLC) (Maturity—August 8, 2018)

 3,250 3,220 3,250 

  

Member Units (Southern RV Real Estate, LLC) (480 units)

   480 1,200 

    16,676 30,950 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
  Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 
 

Southern RV, LLC

 

Recreational Vehicle Dealer

       

  

13% Secured Debt (Maturity—August 8, 2018)

 11,400 11,296 11,400 

  

Member Units (1,680 units)(8)

   1,680 15,100 

  

13% Secured Debt (Southern RV Real Estate, LLC) (Maturity—August 8, 2018)

 3,250 3,220 3,250 

  

Member Units (Southern RV Real Estate, LLC) (480 units)

   480 1,200 

    16,676 30,950 

  

The MPI Group, LLC

 

Manufacturer of Custom Hollow Metal Doors, Frames and Accessories

        

Manufacturer of Custom Hollow Metal Doors, Frames and Accessories

       

  

9% Secured Debt (Maturity—October 2, 2018)

 2,924 2,921 2,921   

9% Secured Debt (Maturity—October 2, 2018)

 2,924 2,921 2,921 

  

Series A Preferred Units (2,500 units; 10% Cumulative)

   2,500 690   

Series A Preferred Units (2,500 units; 10% Cumulative)

   2,500 690 

  

Warrants (1,424 equivalent units)

   1,096    

Warrants (1,424 equivalent units)

   1,096  

  

Member Units (MPI Real Estate Holdings, LLC) (100% Fully diluted)(8)

   2,300 2,230   

Member Units (MPI Real Estate Holdings, LLC) (100% Fully diluted)(8)

   2,300 2,230 

    8,817 5,841     8,817 5,841 

    

Travis Acquisition LLC

 

Manufacturer of Aluminum Trailers

        

Manufacturer of Aluminum Trailers

       

  

12% Secured Debt (Maturity—August 30, 2018)

 3,513 3,471 3,513   

12% Secured Debt (Maturity—August 30, 2018)

 3,513 3,471 3,513 

  

Member Units (7,282 units)

   7,100 14,480   

Member Units (7,282 units)

   7,100 14,480 

    10,571 17,993     10,571 17,993 

    

Uvalco Supply, LLC

 

Farm and Ranch Supply Store

        

Farm and Ranch Supply Store

       

  

9% Secured Debt (Maturity—January 1, 2019)

 1,314 1,314 1,314   

9% Secured Debt (Maturity—January 1, 2019)

 1,314 1,314 1,314 

  

Member Units (2,011 units)(8)

   3,843 5,460   

Member Units (2,011 units)(8)

   3,843 5,460 

    5,157 6,774     5,157 6,774 

    

Vision Interests, Inc.

 

Manufacturer / Installer of Commercial Signage

        

Manufacturer / Installer of Commercial Signage

       

  

13% Secured Debt (Maturity—December 23, 2016)

 3,071 3,052 3,052   

13% Secured Debt (Maturity—December 23, 2016)

 3,071 3,052 3,052 

  

Series A Preferred Stock (3,000,000 shares)

   3,000 3,550   

Series A Preferred Stock (3,000,000 shares)

   3,000 3,550 

  

Common Stock (1,126,242 shares)

   3,706 210   

Common Stock (1,126,242 shares)

   3,706 210 

    9,758 6,812     9,758 6,812 

    

Ziegler's NYPD, LLC

 

Casual Restaurant Group

        

Casual Restaurant Group

       

  

6.5% Secured Debt (Maturity—October 1, 2019)

 1,000 992 992   

6.5% Secured Debt (Maturity—October 1, 2019)

 1,000 992 992 

  

12% Secured Debt (Maturity—October 1, 2019)

 500 500 500   

12% Secured Debt (Maturity—October 1, 2019)

 500 500 500 

  

14% Secured Debt (Maturity—October 1, 2019)

 2,750 2,750 2,750   

14% Secured Debt (Maturity—October 1, 2019)

 2,750 2,750 2,750 

  

Warrants (587 equivalent units)

   600 50   

Warrants (587 equivalent units)

   600 50 

  

Preferred Member Units (10,072 units)

   2,834 3,400   

Preferred Member Units (10,072 units)

   2,834 3,400 

    7,676 7,692     7,676 7,692 

  

Subtotal Control Investments (30.8% of total investments at fair value)

Subtotal Control Investments (30.8% of total investments at fair value)

 $387,727 $555,011 

Subtotal Control Investments (30.8% of total investments at fair value)

 $387,727 $555,011 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
  Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 
 

Affiliate Investments(6)

Affiliate Investments(6)

       

 

 

 

       

    

AFG Capital Group, LLC

 

Provider of Rent-to-Own Financing Solutions and Services

        

Provider of Rent-to-Own Financing Solutions and Services

       

  

11% Secured Debt (Maturity—November 7, 2019)

 $12,960 $12,611 $12,790   

11% Secured Debt (Maturity—November 7, 2019)

 $12,960 $12,611 $12,790 

  

Warrants (42 equivalent units)

   259 490   

Warrants (42 equivalent units)

   259 490 

  

Member Units (186 units)

   1,200 2,020   

Member Units (186 units)

   1,200 2,020 

    14,070 15,300     14,070 15,300 

    

Boss Industries, LLC

 

Manufacturer and Distributor of Air, Power and Other Industrial Equipment

        

Manufacturer and Distributor of Air, Power and Other Industrial Equipment

       

  

Preferred Member Units (2,242 units)(8)

   2,246 2,586   

Preferred Member Units (2,242 units)(8)

   2,246 2,586 

    

Bridge Capital Solutions Corporation

 

Financial Services and Cash Flow Solutions Provider

        

Financial Services and Cash Flow Solutions Provider

       

  

13% Secured Debt (Maturity—April 18, 2017)

 7,000 6,890 6,890   

13% Secured Debt (Maturity—April 18, 2017)

 7,000 6,890 6,890 

  

Warrants (22 equivalent shares)

   200 1,300   

Warrants (22 equivalent shares)

   200 1,300 

    7,090 8,190     7,090 8,190 

    

Buca C, LLC

 

Casual Restaurant Group

        

Casual Restaurant Group

       

  

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—June 30, 2020)(9)

 25,530 25,299 25,299   

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—June 30, 2020)(9)

 25,530 25,299 25,299 

  

Preferred Member Units (6 units; 6% cumulative)(8)

   3,711 3,711   

Preferred Member Units (6 units; 6% cumulative)(8)

   3,711 3,711 

    29,010 29,010     29,010 29,010 

    

CAI Software LLC

 

Provider of Specialized Enterprise Resource Planning Software

        

Provider of Specialized Enterprise Resource Planning Software

       

  

12% Secured Debt (Maturity—October 10, 2019)

 4,661 4,624 4,661   

12% Secured Debt (Maturity—October 10, 2019)

 4,661 4,624 4,661 

  

Member Units (65,356 units)

   654 1,000   

Member Units (65,356 units)

   654 1,000 

    5,278 5,661     5,278 5,661 

    

Condit Exhibits, LLC

 

Tradeshow Exhibits / Custom Displays Provider

        

Tradeshow Exhibits / Custom Displays Provider

       

  

Member Units (3,936 units)(8)

   100 1,010   

Member Units (3,936 units)(8)

   100 1,010 

    

Congruent Credit Opportunities Funds(12)(13)

 

Investment Partnership

        

Investment Partnership

       

  

LP Interests (Congruent Credit Opportunities Fund II, LP) (Fully diluted 19.8%)(8)

   6,612 2,834   

LP Interests (Congruent Credit Opportunities Fund II, LP) (Fully diluted 19.8%)(8)

   6,612 2,834 

  

LP Interests (Congruent Credit Opportunities Fund III, LP) (Fully diluted 17.4%)(8)

   12,020 12,024   

LP Interests (Congruent Credit Opportunities Fund III, LP) (Fully diluted 17.4%)(8)

   12,020 12,024 

    18,632 14,858     18,632 14,858 

    

Daseke, Inc.

 

Specialty Transportation Provider

       

  

12% Current / 2.5% PIK Secured Debt (Maturity—July 31, 2018)

 21,253 21,003 21,253 

  

Common Stock (19,467 shares)

   5,213 22,660 

    26,216 43,913 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
  Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 
 

Daseke, Inc.

 

Specialty Transportation Provider

       

  

12% Current / 2.5% PIK Secured Debt (Maturity—July 31, 2018)

 21,253 21,003 21,253 

  

Common Stock (19,467 shares)

   5,213 22,660 

    26,216 43,913 

  

Dos Rios Partners(12)(13)

 

Investment Partnership

        

Investment Partnership

       

  

LP Interests (Dos Rios Partners, LP) (Fully diluted 20.2%)

   3,104 2,031   

LP Interests (Dos Rios Partners, LP) (Fully diluted 20.2%)

   3,104 2,031 

  

LP Interests (Dos Rios Partners—A, LP) (Fully diluted 6.4%)

   986 648   

LP Interests (Dos Rios Partners—A, LP) (Fully diluted 6.4%)

   986 648 

    4,090 2,679     4,090 2,679 

    

East Teak Fine Hardwoods, Inc.

 

Distributor of Hardwood Products

        

Distributor of Hardwood Products

       

  

Common Stock (6,250 shares)(8)

   480 860   

Common Stock (6,250 shares)(8)

   480 860 

    

East West Copolymer & Rubber, LLC

 

Manufacturer of Synthetic Rubbers

        

Manufacturer of Synthetic Rubbers

       

  

12% Secured Debt (Maturity—October 17, 2019)

 9,600 9,463 9,463   

12% Secured Debt (Maturity—October 17, 2019)

 9,600 9,463 9,463 

  

Warrants (2,510,790 equivalent units)

   50 50   

Warrants (2,510,790 equivalent units)

   50 50 

    9,513 9,513     9,513 9,513 

    

EIG Traverse Co-Investment, L.P.(12)(13)

 

Investment Partnership

        

Investment Partnership

       

  

LP Interests (Fully diluted 6.6%)(8)

   4,755 4,755   

LP Interests (Fully diluted 6.6%)(8)

   4,755 4,755 

    

Freeport Financial Funds(12)(13)

 

Investment Partnership

        

Investment Partnership

       

  

LP Interests (Freeport Financial SBIC Fund LP) (Fully diluted 9.9%)(8)

   5,974 6,045   

LP Interests (Freeport Financial SBIC Fund LP) (Fully diluted 9.9%)(8)

   5,974 6,045 

  

LP Interests (Freeport First Lien Loan Fund III LP) (Fully diluted 6.4%)

   2,077 2,077   

LP Interests (Freeport First Lien Loan Fund III LP) (Fully diluted 6.4%)

   2,077 2,077 

    8,051 8,122     8,051 8,122 

    

Gault Financial, LLC (RMB Capital, LLC)

 

Purchases and Manages Liquidation of Distressed Assets

        

Purchases and Manages Liquidation of Distressed Assets

       

  

10% Secured Debt (Maturity—November 21, 2016)

 13,046 12,896 10,930   

10% Secured Debt (Maturity—November 21, 2016)

 13,046 12,896 10,930 

  

Warrants (29,025 equivalent units)

   400    

Warrants (29,025 equivalent units)

   400  

    13,296 10,930     13,296 10,930 

    

Glowpoint, Inc.

 

Provider of Cloud Managed Video Collaboration Services

        

Provider of Cloud Managed Video Collaboration Services

       

  

8% Secured Debt (Maturity—October 18, 2018)

 400 397 397   

8% Secured Debt (Maturity—October 18, 2018)

 400 397 397 

  

12% Secured Debt (Maturity—October 18, 2018)

 9,000 8,929 8,929   

12% Secured Debt (Maturity—October 18, 2018)

 9,000 8,929 8,929 

  

Common Stock (7,711,517 shares)

   3,958 3,840   

Common Stock (7,711,517 shares)

   3,958 3,840 

    ��13,284 13,166     13,284 13,166 

    

Guerdon Modular Holdings, Inc.

 

Multi-Family and Commercial Modular Construction Company

       

  

13% Secured Debt (Maturity—August 13, 2019)

 10,400 10,280 10,280 

  

Common Stock (170,577 shares)

   2,983 1,990 

    13,263 12,270 

  

Houston Plating and Coatings, LLC

 

Provider of Plating and Industrial Coating Services

       

  

Member Units (248,082 units)(8)

   996 8,440 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
  Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 
 

Guerdon Modular Holdings, Inc.

 

Multi-Family and Commercial Modular Construction Company

       

  

13% Secured Debt (Maturity—August 13, 2019)

 10,400 10,280 10,280 

  

Common Stock (170,577 shares)

   2,983 1,990 

    13,263 12,270 

  

Houston Plating and Coatings, LLC

 

Provider of Plating and Industrial Coating Services

       

  

Member Units (248,082 units)(8)

   996 8,440 

  

I-45 SLF LLC(12)(13)

 

Investment Partnership

        

Investment Partnership

       

  

Member units (Fully diluted 20.0%; 24.4% profits interest)

   7,200 7,200   

Member units (Fully diluted 20.0%; 24.4% profits interest)

   7,200 7,200 

    

Indianhead Pipeline Services, LLC

 

Provider of Pipeline Support Services

        

Provider of Pipeline Support Services

       

  

12% Secured Debt (Maturity—February 6, 2017)

 6,000 5,853 5,853   

12% Secured Debt (Maturity—February 6, 2017)

 6,000 5,853 5,853 

  

Preferred Member Units (33,819 units; 8% cumulative)

   2,302 2,302   

Preferred Member Units (33,819 units; 8% cumulative)

   2,302 2,302 

  

Warrants (31,928 equivalent units)

   459    

Warrants (31,928 equivalent units)

   459  

  

Member Units (14,732 units)

   1    

Member Units (14,732 units)

   1  

    8,615 8,155     8,615 8,155 

    

KBK Industries, LLC

 

Manufacturer of Specialty Oilfield and Industrial Products

        

Manufacturer of Specialty Oilfield and Industrial Products

       

  

12.5% Secured Debt (Maturity—September 28, 2017)

 5,900 5,875 5,900   

12.5% Secured Debt (Maturity—September 28, 2017)

 5,900 5,875 5,900 

  

Member Units (250 units)(8)

   341 3,680   

Member Units (250 units)(8)

   341 3,680 

    6,216 9,580     6,216 9,580 

    

L.F. Manufacturing Holdings, LLC(10)

 

Manufacturer of Fiberglass Products

        

Manufacturer of Fiberglass Products

       

  

Member Units (2,179,001 units)(8)

   2,019 1,485   

Member Units (2,179,001 units)(8)

   2,019 1,485 

    

MPS Denver, LLC

 

Specialty Card Printing

        

Specialty Card Printing

       

  

Member Units (13,800 units)

   1,130 1,130   

Member Units (13,800 units)

   1,130 1,130 

    

OnAsset Intelligence, Inc.

 

Provider of Transportation Monitoring / Tracking Products and Services

        

Provider of Transportation Monitoring / Tracking Products and Services

       

  

12% PIK Secured Debt (Maturity—December 31, 2015)(17)

 4,006 4,006 4,006   

12% PIK Secured Debt (Maturity—December 31, 2015)(17)

 4,006 4,006 4,006 

  

Preferred Stock (912 shares; 7% cumulative)(8)

   1,981 1,380   

Preferred Stock (912 shares; 7% cumulative)(8)

   1,981 1,380 

  

Warrants (5,333 equivalent shares)

   1,919    

Warrants (5,333 equivalent shares)

   1,919  

    7,906 5,386     7,906 5,386 

    

OPI International Ltd.(13)

 

Provider of Man Camp and Industrial Storage Services

        

Provider of Man Camp and Industrial Storage Services

       

  

10% Unsecured Debt (Maturity—April 8, 2018)

 473 473 473   

10% Unsecured Debt (Maturity—April 8, 2018)

 473 473 473 

  

Common Stock (20,766,317 shares)

   1,371 3,200   

Common Stock (20,766,317 shares)

   1,371 3,200 

    1,844 3,673     1,844 3,673 

    

PCI Holding Company, Inc.

 

Manufacturer of Industrial Gas Generating Systems

       

  

Preferred Stock (1,500,000 shares; 20% cumulative)(8)

   2,762 4,887 

  

Radial Drilling Services Inc.

 

Oil and Gas Lateral Drilling Technology Provider

       

  

12% Secured Debt (Maturity—November 22, 2016)(14)

 4,200 3,941 1,500 

  

Warrants (316 equivalent shares)

   758  

    4,699 1,500 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
  Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 
 

PCI Holding Company, Inc.

 

Manufacturer of Industrial Gas Generating Systems

       

  

Preferred Stock (1,500,000 shares; 20% cumulative)(8)

   2,762 4,887 

  

Radial Drilling Services Inc.

 

Oil and Gas Lateral Drilling Technology Provider

       

  

12% Secured Debt (Maturity—November 22, 2016)(14)

 4,200 3,941 1,500 

  

Warrants (316 equivalent shares)

   758  

    4,699 1,500 

  

Rocaceia, LLC (Quality Lease and Rental Holdings, LLC)

 

Provider of Rigsite Accommodation Unit Rentals and Related Services

        

Provider of Rigsite Accommodation Unit Rentals and Related Services

       

  

12% Secured Debt (Maturity—January 8, 2018)(14)(18)

 30,785 30,281 250   

12% Secured Debt (Maturity—January 8, 2018)(14)(18)

 30,785 30,281 250 

  

Preferred Member Units (250 units)

   2,500    

Preferred Member Units (250 units)

   2,500  

    32,781 250     32,781 250 

    

Samba Holdings, Inc.

 

Provider of Intelligent Driver Record Monitoring Software and Services

        

Provider of Intelligent Driver Record Monitoring Software and Services

       

  

12.5% Secured Debt (Maturity—November 17, 2016)

 24,662 24,553 24,662   

12.5% Secured Debt (Maturity—November 17, 2016)

 24,662 24,553 24,662 

  

Common Stock (170,963 shares)

   2,087 30,220   

Common Stock (170,963 shares)

   2,087 30,220 

    26,640 54,882     26,640 54,882 

    

Tin Roof Acquisition Company

 

Casual Restaurant Group

        

Casual Restaurant Group

       

  

12% Secured Debt (Maturity—November 13, 2018)

 13,994 13,807 13,807   

12% Secured Debt (Maturity—November 13, 2018)

 13,994 13,807 13,807 

  

Class C Preferred Stock (Fully diluted 10.0%; 10% cumulative)(8)

   2,477 2,477   

Class C Preferred Stock (Fully diluted 10.0%; 10% cumulative)(8)

   2,477 2,477 

    16,284 16,284     16,284 16,284 

    

UniTek Global Services, Inc.(11)

 

Provider of Outsourced Infrastructure Services

        

Provider of Outsourced Infrastructure Services

       

  

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—January 13, 2019)(9)

 2,826 2,826 2,812   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—January 13, 2019)(9)

 2,826 2,826 2,812 

  

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50% / 1.00% PIK, Current Coupon Plus PIK 10.50%, Secured Debt (Maturity—January 13, 2019)(9)

 1,261 1,261 1,255   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50% / 1.00% PIK, Current Coupon Plus PIK 10.50%, Secured Debt (Maturity—January 13, 2019)(9)

 1,261 1,261 1,255 

  

15% PIK Unsecured Debt (Maturity—July 13, 2019)

 641 641 638   

15% PIK Unsecured Debt (Maturity—July 13, 2019)

 641 641 638 

  

Preferred Stock (4,935,377 shares)

   4,935 5,540   

Preferred Stock (4,935,377 shares)

   4,935 5,540 

  

Common Stock (705,054 shares)

       

Common Stock (705,054 shares)

     

    9,663 10,245     9,663 10,245 

    

Universal Wellhead Services Holdings, LLC(10)

 

Provider of Wellhead Equipment, Designs, and Personnel to the Oil & Gas Industry

       

  

Class A Preferred Units (4,000,000 units; 4.5% cumulative)(8)

   4,000 3,000 

  

Volusion, LLC

 

Provider of Online Software-as-a-Service eCommerce Solutions

       

  

10.5% Secured Debt (Maturity—January 26, 2020)

 17,500 16,199 16,199 

  

Preferred Member Units (4,876,670 units)

   14,000 14,000 

  

Warrants (950,618 equivalent units)

   1,400 1,400 

    31,599 31,599 

  

Subtotal Affiliate Investments (19.4% of total investments at fair value)

Subtotal Affiliate Investments (19.4% of total investments at fair value)

 $333,728 $350,519 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Non-Control/Non-Affiliate Investments(7)

       

              

AccuMED, Corp.(10)

 

Medical Device Contract Manufacturer

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—October 29, 2020)(9)

 $9,750 $9,648 $9,648 

              

Adams Publishing Group, LLC(10)

 

Local Newspaper Operator

            

   

LIBOR Plus 6.75% (Floor 1.00%), Current Coupon 7.75%, Secured Debt (Maturity—November 3, 2020)(9)

  9,506  9,329  9,328 

              

Ahead, LLC(10)

 

IT Infrastructure Value Added Reseller

            

   

LIBOR Plus 6.50%, Current Coupon 6.76%, Secured Debt (Maturity—November 2, 2020)

  15,000  14,562  14,625 

              

Allflex Holdings III Inc.(11)

 

Manufacturer of Livestock Identification Products

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—July 19, 2021)(9)

  10,150  10,080  10,008 

              

AM General LLC(11)

 

Specialty Vehicle Manufacturer

            

   

LIBOR Plus 9.00% (Floor 1.25%), Current Coupon 10.25%, Secured Debt (Maturity—March 22, 2018)(9)

  2,256  2,221  1,867 

              

AM3 Pinnacle Corporation(10)

 

Provider of Comprehensive Internet, TV and Voice Services for Multi- Dwelling Unit Properties

            

   

Common Stock (60,240 shares)

     2,000   

              

American Seafoods Group, LLC(11)

 

Catcher-Processor of Alaskan Pollock

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—August 19, 2021)(9)

  9,975  9,963  9,892 

              

AMF Bowling Centers, Inc.(11)

 

Bowling Alley Operator

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—September 18, 2021)(9)

  7,907  7,802  7,835 

              

Anchor Hocking, LLC(11)

 

Household Products Manufacturer

            

   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—June 4, 2018)(9)

  2,306  2,306  2,179 

   

Member Units (440,620 units)

     4,928  3,250 

         7,234  5,429 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Universal Wellhead Services Holdings, LLC(10)

 

Provider of Wellhead Equipment, Designs, and Personnel to the Oil & Gas Industry

            

   

Class A Preferred Units (4,000,000 units; 4.5% cumulative)(8)

     4,000  3,000 

              

Volusion, LLC

 

Provider of Online Software-as-a-Service eCommerce Solutions

            

   

10.5% Secured Debt (Maturity—January 26, 2020)

  17,500  16,199  16,199 

   

Preferred Member Units (4,876,670 units)

     14,000  14,000 

   

Warrants (950,618 equivalent units)

     1,400  1,400 

         31,599  31,599 

Subtotal Affiliate Investments (19.4% of total investments at fair value)

 $333,728 $350,519 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Non-Control/Non-Affiliate Investments(7)

       

              

AccuMED, Corp.(10)

 

Medical Device Contract Manufacturer

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—October 29, 2020)(9)

 $9,750 $9,648 $9,648 

              

Adams Publishing Group, LLC(10)

 

Local Newspaper Operator

            

   

LIBOR Plus 6.75% (Floor 1.00%), Current Coupon 7.75%, Secured Debt (Maturity—November 3, 2020)(9)

  9,506  9,329  9,328 

              

Ahead, LLC(10)

 

IT Infrastructure Value Added Reseller

            

   

LIBOR Plus 6.50%, Current Coupon 6.76%, Secured Debt (Maturity—November 2, 2020)

  15,000  14,562  14,625 

              

Allflex Holdings III Inc.(11)

 

Manufacturer of Livestock Identification Products

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—July 19, 2021)(9)

  10,150  10,080  10,008 

              

AM General LLC(11)

 

Specialty Vehicle Manufacturer

            

   

LIBOR Plus 9.00% (Floor 1.25%), Current Coupon 10.25%, Secured Debt (Maturity—March 22, 2018)(9)

  2,256  2,221  1,867 

              

AM3 Pinnacle Corporation(10)

 

Provider of Comprehensive Internet, TV and Voice Services for Multi-Dwelling Unit Properties

            

   

Common Stock (60,240 shares)

     2,000   

              

American Seafoods Group, LLC(11)

 

Catcher-Processor of Alaskan Pollock

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—August 19, 2021)(9)

  9,975  9,963  9,892 

              

AMF Bowling Centers, Inc.(11)

 

Bowling Alley Operator

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—September 18, 2021)(9)

  7,907  7,802  7,835 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

AP Gaming I, LLC(10)

 

Developer, Manufacturer, and Operator of Gaming Machines

            

   

LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—December 20, 2020)(9)

  11,314  11,108  10,946 

              

Apex Linen Service, Inc.

 

Industrial Launderers

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—October 30, 2022)(9)

  1,600  1,600  1,600 

   

13% Secured Debt (Maturity—October 30, 2022)

  12,000  11,926  11,926 

         13,526  13,526 

              

Applied Products, Inc.(10)

 

Adhesives Distributor

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—September 30, 2019)(9)

  5,813  5,759  5,683 

              

Arcus Hunting LLC.(10)

 

Manufacturer of Bowhunting and Archery Products and Accessories

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—November 13, 2019)(9)

  9,540  9,429  9,429 

              

Artel, LLC(11)

 

Provider of Secure Satellite Network and IT Solutions

            

   

LIBOR Plus 7.00% (Floor 1.25%), Current Coupon 8.25%, Secured Debt (Maturity—November 27, 2017)(9)

  7,854  7,585  6,716 

              

ATS Workholding, Inc.(10)

 

Manufacturer of Machine Cutting Tools and Accessories

            

   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—March 10, 2019)(9)

  6,492  6,452  6,230 

              

ATX Networks Corp.(11)(13)

 

Provider of Radio Frequency Management Equipment

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—June 14, 2021)(9)

  14,925  14,647  14,701 

              

Barfly Ventures, LLC(10)

 

Casual Restaurant Group

            

   

12% Secured Debt (Maturity—August 31, 2020)

  4,121  4,042  4,042 

   

Warrant (1 equivalent unit)

     473  473 

         4,515  4,515 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Anchor Hocking, LLC(11)

 

Household Products Manufacturer

            

   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—June 4, 2018)(9)

  2,306  2,306  2,179 

   

Member Units (440,620 units)

     4,928  3,250 

         7,234  5,429 

              

AP Gaming I, LLC(10)

 

Developer, Manufacturer, and Operator of Gaming Machines

            

   

LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—December 20, 2020)(9)

  11,314  11,108  10,946 

              

Apex Linen Service, Inc.

 

Industrial Launderers

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—October 30, 2022)(9)

  1,600  1,600  1,600��

   

13% Secured Debt (Maturity—October 30, 2022)

  12,000  11,926  11,926 

         13,526  13,526 

              

Applied Products, Inc.(10)

 

Adhesives Distributor

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—September 30, 2019)(9)

  5,813  5,759  5,683 

              

Arcus Hunting LLC.(10)

 

Manufacturer of Bowhunting and Archery Products and Accessories

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—November 13, 2019)(9)

  9,540  9,429  9,429 

              

Artel, LLC(11)

 

Provider of Secure Satellite Network and IT Solutions

            

   

LIBOR Plus 7.00% (Floor 1.25%), Current Coupon 8.25%, Secured Debt (Maturity—November 27, 2017)(9)

  7,854  7,585  6,716 

              

ATS Workholding, Inc.(10)

 

Manufacturer of Machine Cutting Tools and Accessories

            

   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—March 10, 2019)(9)

  6,492  6,452  6,230 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Berry Aviation, Inc.(10)

 

Airline Charter Service Operator

            

   

12.00% Current / 1.75% PIK Secured Debt (Maturity—January 30, 2020)

  5,627  5,578  5,578 

   

Common Stock (553 shares)

     400  400 

         5,978  5,978 

              

Bioventus LLC(10)

 

Production of Orthopedic Healing Products

            

   

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.00%, Secured Debt (Maturity—April 10, 2020)(9)

  5,000  4,917  4,925 

              

Blackbrush Oil and Gas LP(11)

 

Oil & Gas Exploration

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—July 30, 2021)(9)

  4,000  3,975  3,230 

              

Blackhawk Specialty Tools LLC(11)

 

Oilfield Equipment & Services

            

   

LIBOR Plus 5.25% (Floor 1.25%), Current Coupon 6.50%, Secured Debt (Maturity—August 1, 2019)(9)

  5,892  5,866  5,450 

              

Blue Bird Body Company(11)

 

School Bus Manufacturer

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—June 26, 2020)(9)

  4,702  4,646  4,669 

              

Bluestem Brands, Inc.(11)(13)

 

Multi-Channel Retailer of General Merchandise

            

   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—November 6, 2020)(9)

  13,632  13,358  12,780 

              

Brainworks Software, LLC(10)

 

Advertising Sales and Newspaper Circulation Software

            

   

Prime Plus 7.25% (Floor 3.25%), Current Coupon 10.75%, Secured Debt (Maturity—July 22, 2019)(9)

  626  620  620 

   

LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—July 22, 2019)(9)

  6,185  6,126  6,012 

         6,746  6,632 

              

Brightwood Capital Fund III, LP(12)(13)

 

Investment Partnership

            

   

LP Interests (Fully diluted 1.6%)(8)

     11,250  11,125 

              

Brundage-Bone Concrete Pumping, Inc.(11)

 

Construction Services Provider

            

   

10.375% Secured Debt (Maturity—September 1, 2021)

  2,500  2,500  2,438 

              

Calloway Laboratories, Inc.(10)

 

Health Care Testing Facilities

            

   

17% PIK Secured Debt (Maturity—September 30, 2016)(14)

  7,324  7,275   

   

Warrants (125,000 equivalent shares)

     17   

         7,292   

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

ATX Networks Corp.(11)(13)

 

Provider of Radio Frequency Management Equipment

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—June 14, 2021)(9)

  14,925  14,647  14,701 

              

Barfly Ventures, LLC(10)

 

Casual Restaurant Group

            

   

12% Secured Debt (Maturity—August 31, 2020)

  4,121  4,042  4,042 

   

Warrant (1 equivalent unit)

     473  473 

         4,515  4,515 

              

Berry Aviation, Inc.(10)

 

Airline Charter Service Operator

            

   

12.00% Current / 1.75% PIK Secured Debt (Maturity—January 30, 2020)

  5,627  5,578  5,578 

   

Common Stock (553 shares)

     400  400 

         5,978  5,978 

              

Bioventus LLC(10)

 

Production of Orthopedic Healing Products

            

   

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.00%, Secured Debt (Maturity—April 10, 2020)(9)

  5,000  4,917  4,925 

              

Blackbrush Oil and Gas LP(11)

 

Oil & Gas Exploration

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—July 30, 2021)(9)

  4,000  3,975  3,230 

              

Blackhawk Specialty Tools LLC(11)

 

Oilfield Equipment & Services

            

   

LIBOR Plus 5.25% (Floor 1.25%), Current Coupon 6.50%, Secured Debt (Maturity—August 1, 2019)(9)

  5,892  5,866  5,450 

              

Blue Bird Body Company(11)

 

School Bus Manufacturer

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—June 26, 2020)(9)

  4,702  4,646  4,669 

              

Bluestem Brands, Inc.(11)(13)

 

Multi-Channel Retailer of General Merchandise

            

   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—November 6, 2020)(9)

  13,632  13,358  12,780 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Cengage Learning Acquisitions, Inc.(11)

 

Provider of Educational Print and Digital Services

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—March 31, 2020)(9)

  9,720  9,672  9,502 

              

Cenveo Corporation(11)

 

Provider of Commercial Printing, Envelopes, Labels, and Printed Office Products

            

   

6% Secured Debt (Maturity—August 1, 2019)

  5,230  4,544  3,687 

              

CGSC of Delaware Holdings Corp.(11)(13)

 

Insurance Brokerage Firm

            

   

LIBOR Plus 7.00% (Floor 1.25%), Current Coupon 8.25%, Secured Debt (Maturity—October 16, 2020)(9)

  2,000  1,979  1,900 

              

Charlotte Russe, Inc(11)

 

Fast-Fashion Retailer to Young Women

            

   

LIBOR Plus 5.50% (Floor 1.25%), Current Coupon 6.75%, Secured Debt (Maturity—May 22, 2019)(9)

  14,346  14,065  10,031 

              

Clarius ASIG, LLC(10)

 

Prints & Advertising Film Financing

            

   

15% PIK Secured Debt (Maturity—September 14, 2014)(17)

  620  620  620 

              

Clarius BIGS, LLC(10)

 

Prints & Advertising Film Financing

            

   

15% PIK Secured Debt (Maturity—January 5, 2015)(14)(17)

  3,386  3,386  563 

              

Compact Power Equipment, Inc.

 

Equipment / Tool Rental

            

   

12% Secured Debt (Maturity—October 1, 2017)

  4,100  4,090  4,100 

   

Series A Preferred Stock (4,298,435 shares)

     1,079  2,930 

         5,169  7,030 

              

Compuware Corporation(11)

 

Provider of Software and Supporting Services

            

   

LIBOR Plus 5.25% (Floor 1.00%), Current Coupon 6.25%, Secured Debt (Maturity—December 15, 2019)(9)

  14,751  14,395  13,998 

              

Covenant Surgical Partners, Inc.(11)

 

Ambulatory Surgical Centers

            

   

8.75% Secured Debt (Maturity—August 1, 2019)

  800  800  780 

              

CRGT Inc.(11)

 

Provider of Custom Software Development

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—December 19, 2020)(9)

  10,168  10,009  10,118 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Brainworks Software, LLC(10)

 

Advertising Sales and Newspaper Circulation Software

            

   

Prime Plus 7.25% (Floor 3.25%), Current Coupon 10.75%, Secured Debt (Maturity—July 22, 2019)(9)

  626  620  620 

   

LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—July 22, 2019)(9)

  6,185  6,126  6,012 

         6,746  6,632 

              

Brightwood Capital Fund III, LP(12)(13)

 

Investment Partnership

            

   

LP Interests (Fully diluted 1.6%)(8)

     11,250  11,125 

              

Brundage-Bone Concrete Pumping, Inc.(11)

 

Construction Services Provider

            

   

10.375% Secured Debt (Maturity—September 1, 2021)

  2,500  2,500  2,438 

              

Calloway Laboratories, Inc.(10)

 

Health Care Testing Facilities

            

   

17% PIK Secured Debt (Maturity—September 30, 2016)(14)

  7,324  7,275   

   

Warrants (125,000 equivalent shares)

     17   

         7,292   

              

Cengage Learning Acquisitions, Inc.(11)

 

Provider of Educational Print and Digital Services

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—March 31, 2020)(9)

  9,720  9,672  9,502 

              

Cenveo Corporation(11)

 

Provider of Commercial Printing, Envelopes, Labels, and Printed Office Products

            

   

6% Secured Debt (Maturity—August 1, 2019)

  5,230  4,544  3,687 

              

CGSC of Delaware Holdings Corp.(11)(13)

 

Insurance Brokerage Firm

            

   

LIBOR Plus 7.00% (Floor 1.25%), Current Coupon 8.25%, Secured Debt (Maturity—October 16, 2020)(9)

  2,000  1,979  1,900 

              

Charlotte Russe, Inc(11)

 

Fast-Fashion Retailer to Young Women

            

   

LIBOR Plus 5.50% (Floor 1.25%), Current Coupon 6.75%, Secured Debt (Maturity—May 22, 2019)(9)

  14,346  14,065  10,031 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

CST Industries Inc.(11)

 

Storage Tank Manufacturer

            

   

LIBOR Plus 6.25% (Floor 1.50%), Current Coupon 7.75%, Secured Debt (Maturity—May 22, 2017)(9)

  8,227  8,197  8,145 

              

Darr Equipment LP(10)

 

Heavy Equipment Dealer

            

   

11.75% Current / 2% PIK Secured Debt (Maturity—April 15, 2020)

  20,706  20,178  19,688 

   

Warrants (915,734 equivalent units)

     474  410 

         20,652  20,098 

              

Digital River, Inc.(11)

 

Provider of Outsourced e-Commerce Solutions and Services

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—February 12, 2021)(9)

  8,667  8,588  8,580 

              

Digity Media LLC(11)

 

Radio Station Operator

            

   

LIBOR Plus 4.75% (Floor 1.25%), Current Coupon 6.00%, Secured Debt (Maturity—February 8, 2019)(9)

  6,588  6,539  6,506 

              

Drilling Info Holdings, Inc.

 

Information Services for the Oil and Gas Industry

            

   

Common Stock (3,788,865 shares)

     1,335  9,920 

              

ECP-PF Holdings Group, Inc.(10)

 

Fitness Club Operator

            

   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—November 26, 2019)(9)

  5,625  5,579  5,492 

              

EIG Fund Investments(12)(13)

 

Investment Partnership

            

   

LP Interests (EIG Global Private Debt fund-A, L.P.) (Fully diluted 0.5%)

     718  718 

              

EnCap Energy Fund Investments(12)(13)

 

Investment Partnership

            

   

LP Interests (EnCap Energy Capital Fund VIII, L.P.) (Fully diluted 0.1%)(8)

     3,762  2,765 

   

LP Interests (EnCap Energy Capital Fund VIII Co- Investors, L.P.) (Fully diluted 0.4%)

     2,194  1,056 

   

LP Interests (EnCap Energy Capital Fund IX, L.P.) (Fully diluted 0.1%)(8)

     3,075  3,826 

   

LP Interests (Encap Energy Capital Fund X, L.P.) (Fully diluted 0.1%)

     692  692 

   

LP Interests (EnCap Flatrock Midstream Fund II, L.P.) (Fully diluted 0.8%)(8)

     7,350  10,738 

   

LP Interests (EnCap Flatrock Midstream Fund III, L.P.) (Fully diluted 0.2%)

     464  892 

         17,537  19,969 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Clarius ASIG, LLC(10)

 

Prints & Advertising Film Financing

            

   

15% PIK Secured Debt (Maturity—September 14, 2014)(17)

  620  620  620 

              

Clarius BIGS, LLC(10)

 

Prints & Advertising Film Financing

            

   

15% PIK Secured Debt (Maturity—January 5, 2015)(14)(17)

  3,386  3,386  563 

              

Compact Power Equipment, Inc.

 

Equipment / Tool Rental

            

   

12% Secured Debt (Maturity—October 1, 2017)

  4,100  4,090  4,100 

   

Series A Preferred Stock (4,298,435 shares)

     1,079  2,930 

         5,169  7,030 

              

Compuware Corporation(11)

 

Provider of Software and Supporting Services

            

   

LIBOR Plus 5.25% (Floor 1.00%), Current Coupon 6.25%, Secured Debt (Maturity—December 15, 2019)(9)

  14,751  14,395  13,998 

              

Covenant Surgical Partners, Inc.(11)

 

Ambulatory Surgical Centers

            

   

8.75% Secured Debt (Maturity—August 1, 2019)

  800  800  780 

              

CRGT Inc.(11)

 

Provider of Custom Software Development

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—December 19, 2020)(9)

  10,168  10,009  10,118 

              

CST Industries Inc.(11)

 

Storage Tank Manufacturer

            

   

LIBOR Plus 6.25% (Floor 1.50%), Current Coupon 7.75%, Secured Debt (Maturity—May 22, 2017)(9)

  8,227  8,197  8,145 

              

Darr Equipment LP(10)

 

Heavy Equipment Dealer

            

   

11.75% Current / 2% PIK Secured Debt (Maturity—April 15, 2020)

  20,706  20,178  19,688 

   

Warrants (915,734 equivalent units)

     474  410 

         20,652  20,098 

              

Digital River, Inc.(11)

 

Provider of Outsourced e-Commerce Solutions and Services

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—February 12, 2021)(9)

  8,667  8,588  8,580 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Energy and Exploration Partners, LLC(11)

 

Oil & Gas Exploration & Production

            

   

8.75% Secured Debt (Maturity—January 23, 2016)(14)

  221  221  221 

   

LIBOR Plus 6.75% (Floor 1.00%), Current Coupon 7.75%, Secured Debt (Maturity—January 22, 2019)(9)(14)

  9,390  9,048  2,371 

         9,269  2,592 

              

Evergreen Skills Lux S.á r.l. (d/b/a Skillsoft)(11)(13)

 

Technology-based Performance Support Solutions

            

   

LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—April 28, 2022)(9)

  7,000  6,838  4,673 

              

Extreme Reach, Inc.(11)

 

Integrated TV and Video Advertising Platform

            

   

LIBOR Plus 5.75% (Floor 1.00%), Current Coupon 6.75%, Secured Debt (Maturity—February 7, 2020)(9)

  8,875  8,866  8,731 

              

Flavors Holdings Inc.(11)

 

Global Provider of Flavoring and Sweetening Products and Solutions

            

   

LIBOR Plus 5.75% (Floor 1.00%), Current Coupon 6.75%, Secured Debt (Maturity—April 3, 2020)(9)

  11,333  11,004  10,086 

              

Fram Group Holdings, Inc.(11)

 

Manufacturer of Automotive Maintenance Products

            

   

LIBOR Plus 5.50% (Floor 1.50%), Current Coupon 7.00%, Secured Debt (Maturity—July 29, 2017)(9)

  9,652  9,547  7,275 

   

LIBOR Plus 9.50% (Floor 1.50%), Current Coupon 11.00%, Secured Debt (Maturity—January 29, 2018)(9)

  700  699  350 

         10,246  7,625 

              

GI KBS Merger Sub LLC(11)

 

Outsourced Janitorial Services to Retail/Grocery Customers

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—October 29, 2021)(9)

  3,960  3,901  3,742 

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—April 29, 2022)(9)

  800  786  792 

         4,687  4,534 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Digity Media LLC(11)

 

Radio Station Operator

            

   

LIBOR Plus 4.75% (Floor 1.25%), Current Coupon 6.00%, Secured Debt (Maturity—February 8, 2019)(9)

  6,588  6,539  6,506 

              

Drilling Info Holdings, Inc.

 

Information Services for the Oil and Gas Industry

            

   

Common Stock (3,788,865 shares)

     1,335  9,920 

              

ECP-PF Holdings Group, Inc.(10)

 

Fitness Club Operator

            

   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—November 26, 2019)(9)

  5,625  5,579  5,492 

              

EIG Fund Investments(12)(13)

 

Investment Partnership

            

   

LP Interests (EIG Global Private Debt fund—A, L.P.) (Fully diluted 0.5%)

     718  718 

              

EnCap Energy Fund Investments(12)(13)

 

Investment Partnership

            

   

LP Interests (EnCap Energy Capital Fund VIII, L.P.) (Fully diluted 0.1%)(8)

     3,762  2,765 

   

LP Interests (EnCap Energy Capital Fund VIII Co-Investors, L.P.) (Fully diluted 0.4%)

     2,194  1,056 

   

LP Interests (EnCap Energy Capital Fund IX, L.P.) (Fully diluted 0.1%)(8)

     3,075  3,826 

   

LP Interests (Encap Energy Capital Fund X, L.P.) (Fully diluted 0.1%)

     692  692 

   

LP Interests (EnCap Flatrock Midstream Fund II, L.P.) (Fully diluted 0.8%)(8)

     7,350  10,738 

   

LP Interests (EnCap Flatrock Midstream Fund III, L.P.) (Fully diluted 0.2%)

     464  892 

         17,537  19,969 

              

Energy and Exploration Partners, LLC(11)

 

Oil & Gas Exploration & Production

            

   

8.75% Secured Debt (Maturity—January 23, 2016)(14)

  221  221  221 

   

LIBOR Plus 6.75% (Floor 1.00%), Current Coupon 7.75%, Secured Debt (Maturity—January 22, 2019)(9)(14)

  9,390  9,048  2,371 

         9,269  2,592 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Grace Hill, LLC(10)

 

Online Training Tools for the Multi-Family Housing Industry

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—August 15, 2019)(9)

  9,450  9,361  9,450 

              

Great Circle Family Foods, LLC(10)

 

Quick Service Restaurant Franchise

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—October 28, 2019)(9)

  7,849  7,783  7,783 

              

Grupo Hima San Pablo, Inc.(11)

 

Tertiary Care Hospitals

            

   

LIBOR Plus 7.00% (Floor 1.50%), Current Coupon 8.50%, Secured Debt (Maturity—January 31, 2018)(9)

  4,863  4,816  4,668 

   

13.75% Secured Debt (Maturity—July 31, 2018)

  2,000  1,942  1,860 

         6,758  6,528 

              

GST Autoleather, Inc.(11)

 

Automotive Leather Manufacturer

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—July 10, 2020)(9)

  9,875  9,797  9,529 

              

Guitar Center, Inc.(11)

 

Musical Instruments Retailer

            

   

6.5% Secured Debt (Maturity—April 15, 2019)

  11,000  10,442  9,240 

              

Halcon Resources Corporation(11)

 

Oil & Gas Exploration & Production

            

   

9.75% Unsecured Debt (Maturity—July 15, 2020)

  6,925  6,382  2,008 

              

Hojeij Branded Foods, LLC(10)

 

Multi-Airport, Multi- Concept Restaurant Operator

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—July 27, 2021)(9)

  5,344  5,294  5,294 

              

Horizon Global Corporation(11)

 

Auto Parts Manufacturer

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—June 30, 2021)(9)

  9,750  9,568  9,677 

              

Hostway Corporation(11)

 

Managed Services and Hosting Provider

            

   

LIBOR Plus 4.75% (Floor 1.25%), Current Coupon 6.00%, Secured Debt (Maturity—December 13, 2019)(9)

  11,179  11,105  11,067 

              

Hunter Defense Technologies, Inc.(11)

 

Provider of Military and Commercial Shelters and Systems

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—August 5, 2019)(9)

  6,414  6,366  6,350 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Evergreen Skills Lux S.á r.l. (d/b/a Skillsoft)(11)(13)

 

Technology-based Performance Support Solutions

            

   

LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—April 28, 2022)(9)

  7,000  6,838  4,673 

              

Extreme Reach, Inc.(11)

 

Integrated TV and Video Advertising Platform

            

   

LIBOR Plus 5.75% (Floor 1.00%), Current Coupon 6.75%, Secured Debt (Maturity—February 7, 2020)(9)

  8,875  8,866  8,731 

              

Flavors Holdings Inc.(11)

 

Global Provider of Flavoring and Sweetening Products and Solutions

            

   

LIBOR Plus 5.75% (Floor 1.00%), Current Coupon 6.75%, Secured Debt (Maturity—April 3, 2020)(9)

  11,333  11,004  10,086 

              

Fram Group Holdings, Inc.(11)

 

Manufacturer of Automotive Maintenance Products

            

   

LIBOR Plus 5.50% (Floor 1.50%), Current Coupon 7.00%, Secured Debt (Maturity—July 29, 2017)(9)

  9,652  9,547  7,275 

   

LIBOR Plus 9.50% (Floor 1.50%), Current Coupon 11.00%, Secured Debt (Maturity—January 29, 2018)(9)

  700  699  350 

         10,246  7,625 

              

GI KBS Merger Sub LLC(11)

 

Outsourced Janitorial Services to Retail/Grocery Customers

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—October 29, 2021)(9)

  3,960  3,901  3,742 

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—April 29, 2022)(9)

  800  786  792 

         4,687  4,534 

              

Grace Hill, LLC(10)

 

Online Training Tools for the Multi-Family Housing Industry

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—August 15, 2019)(9)

  9,450  9,361  9,450 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

ICON Health & Fitness, Inc.(11)

 

Producer of Fitness Products

            

   

11.875% Secured Debt (Maturity—October 15, 2016)

  6,956  6,907  6,608 

              

iEnergizer Limited(11)(13)

 

Provider of Business Outsourcing Solutions

            

   

LIBOR Plus 6.00% (Floor 1.25%), Current Coupon 7.25%, Secured Debt (Maturity—May 1, 2019)(9)

  8,110  8,030  7,502 

              

Indivior Finance LLC(11)(13)

 

Specialty Pharmaceutical Company Treating Opioid Dependence

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—December 19, 2019)(9)

  7,125  6,759  6,697 

              

Industrial Container Services, LLC(10)

 

Steel Drum Reconditioner

            

   

LIBOR Plus 5.75% (Floor 1.00%), Current Coupon 6.75%, Secured Debt (Maturity—December 31, 2018)(9)

  5,000  5,000  5,000 

              

Infinity Acquisition Finance Corp.(11)

 

Application Software for Capital Markets

            

   

7.25% Unsecured Debt (Maturity—August 1, 2022)

  4,000  4,000  3,440 

              

Inn of the Mountain Gods Resort and Casino(11)

 

Hotel & Casino Owner & Operator

            

   

9.25% Secured Debt (Maturity—November 30, 2020)

  3,851  3,708  3,562 

              

Insurance Technologies, LLC(10)

 

Illustration and Sales-automation Platforms

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—December 1, 2019)(9)

  4,804  4,759  4,759 

              

Intertain Group Limited(11)(13)

 

Business-to-Consumer Online Gaming Operator

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—April 8, 2022)(9)

  9,938  9,782  9,883 

              

iPayment, Inc.(11)

 

Provider of Merchant Acquisition

            

   

LIBOR Plus 5.25% (Floor 1.50%), Current Coupon 6.75%, Secured Debt (Maturity—May 8, 2017)(9)

  15,026  14,986  14,446 

              

iQor US Inc.(11)

 

Business Process Outsourcing Services Provider

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—April 1, 2021)(9)

  9,887  9,718  7,942 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Great Circle Family Foods, LLC(10)

 

Quick Service Restaurant Franchise

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—October 28, 2019)(9)

  7,849  7,783  7,783 

              

Grupo Hima San Pablo, Inc.(11)

 

Tertiary Care Hospitals

            

   

LIBOR Plus 7.00% (Floor 1.50%), Current Coupon 8.50%, Secured Debt (Maturity—January 31, 2018)(9)

  4,863  4,816  4,668 

   

13.75% Secured Debt (Maturity—July 31, 2018)

  2,000  1,942  1,860 

         6,758  6,528 

              

GST Autoleather, Inc.(11)

 

Automotive Leather Manufacturer

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—July 10, 2020)(9)

  9,875  9,797  9,529 

              

Guitar Center, Inc.(11)

 

Musical Instruments Retailer

            

   

6.5% Secured Debt (Maturity—April 15, 2019)

  11,000  10,442  9,240 

              

Halcon Resources Corporation(11)

 

Oil & Gas Exploration & Production

            

   

9.75% Unsecured Debt (Maturity—July 15, 2020)

  6,925  6,382  2,008 

              

Hojeij Branded Foods, LLC(10)

 

Multi-Airport, Multi-Concept Restaurant Operator

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—July 27, 2021)(9)

  5,344  5,294  5,294 

              

Horizon Global Corporation(11)

 

Auto Parts Manufacturer

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—June 30, 2021)(9)

  9,750  9,568  9,677 

              

Hostway Corporation(11)

 

Managed Services and Hosting Provider

            

   

LIBOR Plus 4.75% (Floor 1.25%), Current Coupon 6.00%, Secured Debt (Maturity—December 13, 2019)(9)

  11,179  11,105  11,067 

              

Hunter Defense Technologies, Inc.(11)

 

Provider of Military and Commercial Shelters and Systems

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—August 5, 2019)(9)

  6,414  6,366  6,350 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

irth Solutions, LLC

 

Provider of Damage Prevention Information Technology Services

            

   

Member Units (27,893 units)

     1,441  1,441 

              

Jackmont Hospitality, Inc.(10)

 

Franchisee of Casual Dining Restaurants

            

   

LIBOR Plus 4.25% (Floor 1.00%), Current Coupon 5.25% / 2.50% PIK, Current Coupon Plus PIK 7.75%, Secured Debt (Maturity—May 26, 2021)(9)

  4,357  4,337  4,188 

              

Joerns Healthcare, LLC(11)

 

Manufacturer and Distributor of Health Care Equipment & Supplies

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—May 9, 2020)(9)

  14,805  14,711  14,703 

              

JSS Holdings, Inc.(11)

 

Aircraft Maintenance Program Provider

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—August 31, 2021)(9)

  14,566  14,230  13,765 

              

Kendra Scott, LLC(11)

 

Jewelry Retail Stores

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—July 17, 2020)(9)

  5,875  5,821  5,831 

              

Keypoint Government Solutions, Inc.(11)

 

Provider of Pre-Employment Screening Services

            

   

LIBOR Plus 6.50% (Floor 1.25%), Current Coupon 7.75%, Secured Debt (Maturity—November 13, 2017)(9)

  6,303  6,268  6,271 

              

LaMi Products, LLC(10)

 

General Merchandise Distribution

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—September 16, 2020)(9)

  4,729  4,699  4,699 

              

Lansing Trade Group LLC(11)

 

Commodity Merchandiser

            

   

9.25% Unsecured Debt (Maturity—February 15, 2019)

  6,000  6,000  5,625 

              

Larchmont Resources, LLC(11)

 

Oil & Gas Exploration & Production

            

   

LIBOR Plus 8.75% (Floor 1.00%), Current Coupon 9.75%, Secured Debt (Maturity—August 7, 2019)(9)

  7,807  7,508  5,543 

              

Leadrock Properties, LLC

 

Real Estate Investment

            

   

10% Secured Debt (Maturity—May 4, 2026)

  1,440  1,416  1,416 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

ICON Health & Fitness, Inc.(11)

 

Producer of Fitness Products

            

   

11.875% Secured Debt (Maturity—October 15, 2016)

  6,956  6,907  6,608 

              

iEnergizer Limited(11)(13)

 

Provider of Business Outsourcing Solutions

            

   

LIBOR Plus 6.00% (Floor 1.25%), Current Coupon 7.25%, Secured Debt (Maturity—May 1, 2019)(9)

  8,110  8,030  7,502 

              

Indivior Finance LLC(11)(13)

 

Specialty Pharmaceutical Company Treating Opioid Dependence

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—December 19, 2019)(9)

  7,125  6,759  6,697 

              

Industrial Container Services, LLC(10)

 

Steel Drum Reconditioner

            

   

LIBOR Plus 5.75% (Floor 1.00%), Current Coupon 6.75%, Secured Debt (Maturity—December 31, 2018)(9)

  5,000  5,000  5,000 

              

Infinity Acquisition Finance Corp.(11)

 

Application Software for Capital Markets

            

   

7.25% Unsecured Debt (Maturity—August 1, 2022)

  4,000  4,000  3,440 

              

Inn of the Mountain Gods Resort and Casino(11)

 

Hotel & Casino Owner & Operator

            

   

9.25% Secured Debt (Maturity—November 30, 2020)

  3,851  3,708  3,562 

              

Insurance Technologies, LLC(10)

 

Illustration and Sales-automation Platforms

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—December 1, 2019)(9)

  4,804  4,759  4,759 

              

Intertain Group Limited(11)(13)

 

Business-to-Consumer Online Gaming Operator

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—April 8, 2022)(9)

  9,938  9,782  9,883 

              

iPayment, Inc.(11)

 

Provider of Merchant Acquisition

            

   

LIBOR Plus 5.25% (Floor 1.50%), Current Coupon 6.75%, Secured Debt (Maturity—May 8, 2017)(9)

  15,026  14,986  14,446 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Legendary Pictures Funding, LLC(10)

 

Producer of TV, Film, and Comic Content

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—April 22, 2020)(9)

  7,500  7,372  7,425 

              

LKCM Headwater Investments I, L.P.(12)(13)

 

Investment Partnership

            

   

LP Interests (Fully diluted 2.3%)

     2,500  4,875 

              

Looking Glass Investments, LLC(12)(13)

 

Specialty Consumer Finance

            

   

9% Unsecured Debt (Maturity—June 30, 2020)

  188  188  188 

   

Member Units (2.5 units)

     125  125 

   

Member Units (LGI Predictive Analytics LLC) (190,712 units)(8)

     188  188 

         501  501 

              

MediMedia USA, Inc.(11)

 

Provider of Healthcare Media and Marketing

            

   

LIBOR Plus 6.75% (Floor 1.25%), Current Coupon 8.00%, Secured Debt (Maturity—November 20, 2018)(9)

  7,772  7,714  7,422 

              

Messenger, LLC(10)

 

Supplier of Specialty Stationery and Related Products to the Funeral Industry

            

   

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—September 9, 2020)(9)

  15,583  15,483  15,583 

              

Milk Specialties Company(11)

 

Processor of Nutrition Products

            

   

LIBOR Plus 7.00% (Floor 1.25%), Current Coupon 8.25%, Secured Debt (Maturity—November 9, 2018)(9)

  792  789  792 

              

Minute Key, Inc.

 

Operator of Automated Key Duplication Kiosks

            

   

10% Current / 2% PIK Secured Debt (Maturity—September 19, 2019)

  14,186  13,817  13,817 

   

Warrants (1,437,409 equivalent units)

     280  280 

         14,097  14,097 

              

Miramax Film NY, LLC(11)

 

Motion Picture Producer and Distributor

            

   

Member Units (500,000 units)(8)

     864  864 

              

Mood Media Corporation(11)(13)

 

Provider of Electronic Equipment

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—May 1, 2019)(9)

  14,957  14,827  14,266 

              

New Media Holdings II LLC(11)(13)

 

Local Newspaper Operator

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—June 4, 2020)(9)

  9,788  9,635  9,703 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

iQor US Inc.(11)

 

Business Process Outsourcing Services Provider

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—April 1, 2021)(9)

  9,887  9,718  7,942 

              

irth Solutions, LLC

 

Provider of Damage Prevention Information Technology Services

            

   

Member Units (27,893 units)

     1,441  1,441 

              

Jackmont Hospitality, Inc.(10)

 

Franchisee of Casual Dining Restaurants

            

   

LIBOR Plus 4.25% (Floor 1.00%), Current Coupon 5.25% / 2.50% PIK, Current Coupon Plus PIK 7.75%, Secured Debt (Maturity—May 26, 2021)(9)

  4,357  4,337  4,188 

              

Joerns Healthcare, LLC(11)

 

Manufacturer and Distributor of Health Care Equipment & Supplies

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—May 9, 2020)(9)

  14,805  14,711  14,703 

              

JSS Holdings, Inc.(11)

 

Aircraft Maintenance Program Provider

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—August 31, 2021)(9)

  14,566  14,230  13,765 

              

Kendra Scott, LLC(11)

 

Jewelry Retail Stores

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—July 17, 2020)(9)

  5,875  5,821  5,831 

              

Keypoint Government Solutions, Inc.(11)

 

Provider of Pre-Employment Screening Services

            

   

LIBOR Plus 6.50% (Floor 1.25%), Current Coupon 7.75%, Secured Debt (Maturity—November 13, 2017)(9)

  6,303  6,268  6,271 

              

LaMi Products, LLC(10)

 

General Merchandise Distribution

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—September 16, 2020)(9)

  4,729  4,699  4,699 

              

Lansing Trade Group LLC(11)

 

Commodity Merchandiser

            

   

9.25% Unsecured Debt (Maturity—February 15, 2019)

  6,000  6,000  5,625 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

North American Lifting Holdings, Inc.(11)

 

Crane Service Provider

            

   

LIBOR Plus 4.50% (Floor 1.00%), Current Coupon 5.50%, Secured Debt (Maturity—November 27, 2020)(9)

  997  835  733 

              

North Atlantic Trading Company, Inc.(11)

 

Marketer/Distributor of Tobacco Products

            

   

LIBOR Plus 6.50% (Floor 1.25%), Current Coupon 7.75%, Secured Debt (Maturity—January 13, 2020)(9)

  9,676  9,607  9,603 

              

Novitex Intermediate, LLC(11)

 

Provider of Document Management Services

            

   

LIBOR Plus 6.25% (Floor 1.25%), Current Coupon 7.50%, Secured Debt (Maturity—July 7, 2020)(9)

  8,692  8,532  8,192 

              

Ospemifene Royalty Sub LLC (QuatRx)(10)

 

Estrogen-Deficiency Drug Manufacturer and Distributor

            

   

11.5% Secured Debt (Maturity—November 15, 2026)

  5,071  5,071  3,780 

              

Panolam Industries International, Inc.(11)

 

Decorative Laminate Manufacturer

            

   

LIBOR Plus 6.00% (Floor 1.25%), Current Coupon 7.25%, Secured Debt (Maturity—August 23, 2017)(9)

  9,472  9,429  9,424 

              

Paris Presents Incorporated(11)

 

Branded Cosmetic and Bath Accessories

            

   

LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—December 31, 2021)(9)

  2,000  1,965  1,960 

              

Parq Holdings Limited Partnership(11)(13)

 

Hotel & Casino Operator

            

   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—December 17, 2020)(9)

  7,500  7,369  7,200 

              

Permian Holdings, Inc.(11)

 

Storage Tank Manufacturer

            

   

10.5% Secured Debt (Maturity—January 15, 2018)

  2,755  2,738  1,047 

              

Pernix Therapeutics Holdings, Inc.(10)

 

Pharmaceutical Royalty

            

   

12% Secured Debt (Maturity—August 1, 2020)

  3,818  3,818  3,777 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Larchmont Resources, LLC(11)

 

Oil & Gas Exploration & Production

            

   

LIBOR Plus 8.75% (Floor 1.00%), Current Coupon 9.75%, Secured Debt (Maturity—August 7, 2019)(9)

  7,807  7,508  5,543 

              

Leadrock Properties, LLC

 

Real Estate Investment

            

   

10% Secured Debt (Maturity—May 4, 2026)

  1,440  1,416  1,416 

              

Legendary Pictures Funding, LLC(10)

 

Producer of TV, Film, and Comic Content

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—April 22, 2020)(9)

  7,500  7,372  7,425 

              

LKCM Headwater Investments I, L.P.(12)(13)

 

Investment Partnership

            

   

LP Interests (Fully diluted 2.3%)

     2,500  4,875 

              

Looking Glass Investments, LLC(12)(13)

 

Specialty Consumer Finance

            

   

9% Unsecured Debt (Maturity—June 30, 2020)

  188  188  188 

   

Member Units (2.5 units)

     125  125 

   

Member Units (LGI Predictive Analytics LLC) (190,712 units)(8)

     188  188 

         501  501 

              

MediMedia USA, Inc.(11)

 

Provider of Healthcare Media and Marketing

            

   

LIBOR Plus 6.75% (Floor 1.25%), Current Coupon 8.00%, Secured Debt (Maturity—November 20, 2018)(9)

  7,772  7,714  7,422 

              

Messenger, LLC(10)

 

Supplier of Specialty Stationery and Related Products to the Funeral Industry

            

   

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—September 9, 2020)(9)

  15,583  15,483  15,583 

              

Milk Specialties Company(11)

 

Processor of Nutrition Products

            

   

LIBOR Plus 7.00% (Floor 1.25%), Current Coupon 8.25%, Secured Debt (Maturity—November 9, 2018)(9)

  792  789  792 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Pike Corporation(11)

 

Construction and Maintenance Services for Electric Transmission and Distribution Infrastructure

            

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—June 22, 2022)(9)

  15,000  14,663  14,712 

              

Point.360(10)

 

Fully Integrated Provider of Digital Media Services

            

   

Warrants (65,463 equivalent shares)

     69  9 

   

Common Stock (163,658 shares)

     273  144 

         342  153 

              

Prowler Acquisition Corp.(11)

 

Specialty Distributor to the Energy Sector

            

   

LIBOR Plus 4.50% (Floor 1.00%), Current Coupon 5.50%, Secured Debt (Maturity—January 28, 2020)(9)

  4,411  3,734  3,749 

              

PT Network, LLC(10)

 

Provider of Outpatient Physical Therapy and Sports Medicine Services

            

   

LIBOR Plus 7.75% (Floor 1.50%), Current Coupon 9.25%, Secured Debt (Maturity—November 1, 2018)(9)

  12,047  11,954  11,771 

              

QBS Parent, Inc.(11)

 

Provider of Software and Services to the Oil & Gas Industry

            

   

LIBOR Plus 4.75% (Floor 1.00%), Current Coupon 5.75%, Secured Debt (Maturity—August 7, 2021)(9)

  11,389  11,303  11,332 

              

Raley's(11)

 

Family-owned supermarket chain in California

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—May 18, 2022)(9)

  5,094  4,999  5,069 

              

RCHP, Inc.(11)

 

Regional Non-Urban Hospital Owner/Operator

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—April 23, 2019)(9)

  5,448  5,426  5,448 

   

LIBOR Plus 10.25% (Floor 1.00%), Current Coupon 11.25%, Secured Debt (Maturity—October 23, 2019)(9)

  4,000  3,954  3,953 

         9,380  9,401 

              

Renaissance Learning, Inc.(11)

 

Technology-based K-12 Learning Solutions

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—April 11, 2022)(9)

  3,000  2,975  2,835 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Minute Key, Inc.

 

Operator of Automated Key Duplication Kiosks

            

   

10% Current / 2% PIK Secured Debt (Maturity—September 19, 2019)

  14,186  13,817  13,817 

   

Warrants (1,437,409 equivalent units)

     280  280 

         14,097  14,097 

              

Miramax Film NY, LLC(11)

 

Motion Picture Producer and Distributor

            

   

Member Units (500,000 units)(8)

     864  864 

              

Mood Media Corporation(11)(13)

 

Provider of Electronic Equipment

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—May 1, 2019)(9)

  14,957  14,827  14,266 

              

New Media Holdings II LLC(11)(13)

 

Local Newspaper Operator

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—June 4, 2020)(9)

  9,788  9,635  9,703 

              

North American Lifting Holdings, Inc.(11)

 

Crane Service Provider

            

   

LIBOR Plus 4.50% (Floor 1.00%), Current Coupon 5.50%, Secured Debt (Maturity—November 27, 2020)(9)

  997  835  733 

              

North Atlantic Trading Company, Inc.(11)

 

Marketer/Distributor of Tobacco Products

            

   

LIBOR Plus 6.50% (Floor 1.25%), Current Coupon 7.75%, Secured Debt (Maturity—January 13, 2020)(9)

  9,676  9,607  9,603 

              

Novitex Intermediate, LLC(11)

 

Provider of Document Management Services

            

   

LIBOR Plus 6.25% (Floor 1.25%), Current Coupon 7.50%, Secured Debt (Maturity—July 7, 2020)(9)

  8,692  8,532  8,192 

              

Ospemifene Royalty Sub LLC (QuatRx)(10)

 

Estrogen-Deficiency Drug Manufacturer and Distributor

            

   

11.5% Secured Debt (Maturity—November 15, 2026)

  5,071  5,071  3,780 

              

Panolam Industries International, Inc.(11)

 

Decorative Laminate Manufacturer

            

   

LIBOR Plus 6.00% (Floor 1.25%), Current Coupon 7.25%, Secured Debt (Maturity—August 23, 2017)(9)

  9,472  9,429  9,424 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

RGL Reservoir Operations Inc.(11)(13)

 

Oil & Gas Equipment and Services

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—August 13, 2021)(9)

  3,950  3,851  1,534 

              

RLJ Entertainment, Inc.(10)

 

Movie and TV Programming Licensee and Distributor

            

   

LIBOR Plus 8.75% (Floor 0.25%), Current Coupon 9.16%, Secured Debt (Maturity—September 11, 2019)(9)

  9,354  9,353  9,203 

              

RM Bidder, LLC(10)

 

Scripted and Unscripted TV and Digital Programming Provider

            

   

Warrants (327,532 equivalent units)

     425  363 

   

Member Units (2,779 units)

     46  45 

         471  408 

              

SAExploration, Inc.(10)(13)

 

Geophysical Services Provider

            

   

Common Stock (6,472 shares)

     65  27 

              

Sage Automotive Interiors, Inc(11)

 

Automotive Textiles Manufacturer

            

   

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.00%, Secured Debt (Maturity—October 8, 2021)(9)

  3,000  2,974  2,970 

              

Salient Partners L.P.(11)

 

Provider of Asset Management Services

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—June 9, 2021)(9)

  7,388  7,251  7,240 

              

Sotera Defense Solutions, Inc.(11)

 

Defense Industry Intelligence Services

            

   

LIBOR Plus 7.50% (Floor 1.50%), Current Coupon 9.00%, Secured Debt (Maturity—April 21, 2017)(9)

  10,119  9,886  9,360 

              

Stardust Finance Holdings, Inc.(11)

 

Manufacturer of Diversified Building Products

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—March 13, 2022)(9)

  12,406  12,239  12,065 

              

Subsea Global Solutions, LLC(10)

 

Underwater Maintenance and Repair Services

            

   

LIBOR Plus 6.00% (Floor 1.50%), Current Coupon 7.50%, Secured Debt (Maturity—March 17, 2020)(9)

  4,887  4,836  4,762 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Paris Presents Incorporated(11)

 

Branded Cosmetic and Bath Accessories

            

   

LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—December 31, 2021)(9)

  2,000  1,965  1,960 

              

Parq Holdings Limited Partnership(11)(13)

 

Hotel & Casino Operator

            

   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—December 17, 2020)(9)

  7,500  7,369  7,200 

              

Permian Holdings, Inc.(11)

 

Storage Tank Manufacturer

            

   

10.5% Secured Debt (Maturity—January 15, 2018)

  2,755  2,738  1,047 

              

Pernix Therapeutics Holdings, Inc.(10)

 

Pharmaceutical Royalty

            

   

12% Secured Debt (Maturity—August 1, 2020)

  3,818  3,818  3,777 

              

Pike Corporation(11)

 

Construction and Maintenance Services for Electric Transmission and Distribution Infrastructure

            

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—June 22, 2022)(9)

  15,000  14,663  14,712 

              

Point.360(10)

 

Fully Integrated Provider of Digital Media Services

            

   

Warrants (65,463 equivalent shares)

     69  9 

   

Common Stock (163,658 shares)

     273  144 

         342  153 

              

Prowler Acquisition Corp.(11)

 

Specialty Distributor to the Energy Sector

            

   

LIBOR Plus 4.50% (Floor 1.00%), Current Coupon 5.50%, Secured Debt (Maturity—January 28, 2020)(9)

  4,411  3,734  3,749 

              

PT Network, LLC(10)

 

Provider of Outpatient Physical Therapy and Sports Medicine Services

            

   

LIBOR Plus 7.75% (Floor 1.50%), Current Coupon 9.25%, Secured Debt (Maturity—November 1, 2018)(9)

  12,047  11,954  11,771 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Synagro Infrastructure Company, Inc(11)

 

Waste Management Services

            

   

LIBOR Plus 5.25% (Floor 1.00%), Current Coupon 6.25%, Secured Debt (Maturity—August 22, 2020)(9)

  4,714  4,647  4,124 

              

Targus Group International(11)

 

Distributor of Protective Cases for Mobile Devices

            

   

LIBOR Plus 9.50% (Floor 1.50%), Current Coupon 11.00% / 1.00% PIK, Current Coupon Plus PIK 12.00%, Secured Debt (Maturity—May 24, 2016)(9)(14)

  4,258  4,263  3,119 

              

TeleGuam Holdings, LLC(11)

 

Cable and Telecom Services Provider

            

   

LIBOR Plus 4.00% (Floor 1.25%), Current Coupon 5.25%, Secured Debt (Maturity—December 10, 2018)(9)

  7,975  7,961  7,935 

   

LIBOR Plus 7.50% (Floor 1.25%), Current Coupon 8.75%, Secured Debt (Maturity—June 10, 2019)(9)

  2,500  2,484  2,487 

         10,445  10,422 

              

Templar Energy LLC(11)

 

Oil & Gas Exploration & Production

            

   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—November 25, 2020)(9)

  4,000  3,962  485 

              

The Tennis Channel, Inc.(10)

 

Television-Based Sports Broadcasting

            

   

Warrants (114,316 equivalent shares)

     235  301 

              

The Topps Company, Inc.(11)

 

Trading Cards & Confectionary

            

   

LIBOR Plus 6.00% (Floor 1.25%), Current Coupon 7.25%, Secured Debt (Maturity—October 2, 2018)(9)

  1,960  1,948  1,923 

              

TOMS Shoes, LLC(11)

 

Global Designer, Distributor, and Retailer of Casual Footwear

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—October 30, 2020)(9)

  4,963  4,545  3,387 

              

Travel Leaders Group, LLC(11)

 

Travel Agency Network Provider

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—December 7, 2020)(9)

  8,700  8,638  8,613 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

QBS Parent, Inc.(11)

 

Provider of Software and Services to the Oil & Gas Industry

            

   

LIBOR Plus 4.75% (Floor 1.00%), Current Coupon 5.75%, Secured Debt (Maturity—August 7, 2021)(9)

  11,389  11,303  11,332 

              

Raley's(11)

 

Family-owned supermarket chain in California

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—May 18, 2022)(9)

  5,094  4,999  5,069 

              

RCHP, Inc.(11)

 

Regional Non-Urban Hospital Owner/Operator

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—April 23, 2019)(9)

  5,448  5,426  5,448 

   

LIBOR Plus 10.25% (Floor 1.00%), Current Coupon 11.25%, Secured Debt (Maturity—October 23, 2019)(9)

  4,000  3,954  3,953 

         9,380  9,401 

              

Renaissance Learning, Inc.(11)

 

Technology-based K-12 Learning Solutions

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—April 11, 2022)(9)

  3,000  2,975  2,835 

              

RGL Reservoir Operations Inc.(11)(13)

 

Oil & Gas Equipment and Services

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—August 13, 2021)(9)

  3,950  3,851  1,534 

              

RLJ Entertainment, Inc.(10)

 

Movie and TV Programming Licensee and Distributor

            

   

LIBOR Plus 8.75% (Floor 0.25%), Current Coupon 9.16%, Secured Debt (Maturity—September 11, 2019)(9)

  9,354  9,353  9,203 

              

RM Bidder, LLC(10)

 

Acquisition Vehicle

            

   

Warrants (327,532 equivalent units)

     425  363 

   

Member Units (2,779 units)

     46  45 

         471  408 

              

SAExploration, Inc.(10)(13)

 

Geophysical Services Provider

            

   

Common Stock (6,472 shares)

     65  27 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

US Joiner Holding Company(11)

 

Marine Interior Design and Installation

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—April 16, 2020)(9)

  7,369  7,341  7,295 

              

Valley Healthcare Group, LLC

 

Provider of Durable Medical Equipment

            

   

LIBOR Plus 12.50% (Floor 0.50%), Current Coupon 13.00%, Secured Debt (Maturity—December 29, 2020)(9)

  10,400  10,297  10,297 

              

Vantage Oncology, LLC(11)

 

Outpatient Radiation Oncology Treatment Centers

            

   

9.5% Secured Debt (Maturity—June 15, 2017)

  12,050  11,938  10,182 

              

Virtex Enterprises, LP(10)

 

Specialty, Full-Service Provider of Complex Electronic Manufacturing Services

            

   

12% Secured Debt (Maturity—December 27, 2018)

  1,667  1,516  1,516 

   

Preferred Class A Units (14 units; 5% cumulative)(8)

     333  512 

   

Warrants (11 equivalent units)

     186  135 

         2,035  2,163 

              

Vision Solutions, Inc.(11)

 

Provider of Information Availability Software

            

   

LIBOR Plus 8.00% (Floor 1.50%), Current Coupon 9.50%, Secured Debt (Maturity—July 23, 2017)(9)

  5,000  4,987  4,750 

              

Western Dental Services, Inc.(11)

 

Dental Care Services

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—November 1, 2018)(9)

  4,904  4,901  4,303 

              

Wilton Brands LLC(11)

 

Specialty Housewares Retailer

            

   

LIBOR Plus 7.25% (Floor 1.25%), Current Coupon 8.50%, Secured Debt (Maturity—August 30, 2018)(9)

  1,540  1,524  1,475 

              

Worley Claims Services, LLC(10)

 

Insurance Adjustment Management and Services Provider

            

   

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.00%, Secured Debt (Maturity—October 31, 2020)(9)

  6,435  6,381  6,210 

              

YP Holdings LLC(11)

 

Online and Offline Advertising Operator

            

   

LIBOR Plus 6.75% (Floor 1.25%), Current Coupon 8.00%, Secured Debt (Maturity—June 4, 2018)(9)

  2,455  2,435  2,382 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Sage Automotive Interiors, Inc(11)

 

Automotive Textiles Manufacturer

            

   

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.00%, Secured Debt (Maturity—October 8, 2021)(9)

  3,000  2,974  2,970 

              

Salient Partners L.P.(11)

 

Provider of Asset Management Services

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—June 9, 2021)(9)

  7,388  7,251  7,240 

              

Sotera Defense Solutions, Inc.(11)

 

Defense Industry Intelligence Services

            

   

LIBOR Plus 7.50% (Floor 1.50%), Current Coupon 9.00%, Secured Debt (Maturity—April 21, 2017)(9)

  10,119  9,886  9,360 

              

Stardust Finance Holdings, Inc.(11)

 

Manufacturer of Diversified Building Products

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—March 13, 2022)(9)

  12,406  12,239  12,065 

              

Subsea Global Solutions, LLC(10)

 

Underwater Maintenance and Repair Services

            

   

LIBOR Plus 6.00% (Floor 1.50%), Current Coupon 7.50%, Secured Debt (Maturity—March 17, 2020)(9)

  4,887  4,836  4,762 

              

Synagro Infrastructure Company, Inc(11)

 

Waste Management Services

            

   

LIBOR Plus 5.25% (Floor 1.00%), Current Coupon 6.25%, Secured Debt (Maturity—August 22, 2020)(9)

  4,714  4,647  4,124 

              

Targus Group International(11)

 

Distributor of Protective Cases for Mobile Devices

            

   

LIBOR Plus 9.50% (Floor 1.50%), Current Coupon 11.00% / 1.00% PIK, Current Coupon Plus PIK 12.00%, Secured Debt (Maturity—May 24, 2016)(9)(14)

  4,258  4,263  3,119 

              
Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Zilliant Incorporated

 

Price Optimization and Margin Management Solutions

            

   

Preferred Stock (186,777 shares)

     154  260 

   

Warrants (952,500 equivalent shares)

     1,071  1,190 

         1,225  1,450 

Subtotal Non-Control/Non-Affiliate Investments (49.6% of total investments at fair value)

 $945,187 $894,466 

Total Portfolio Investments, December 31, 2015

 $1,666,642 $1,799,996 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

TeleGuam Holdings, LLC(11)

 

Cable and Telecom Services Provider

            

   

LIBOR Plus 4.00% (Floor 1.25%), Current Coupon 5.25%, Secured Debt (Maturity—December 10, 2018)(9)

  7,975  7,961  7,935 

   

LIBOR Plus 7.50% (Floor 1.25%), Current Coupon 8.75%, Secured Debt (Maturity—June 10, 2019)(9)

  2,500  2,484  2,487 

         10,445  10,422 

              

Templar Energy LLC(11)

 

Oil & Gas Exploration & Production

            

   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 8.50%, Secured Debt (Maturity—November 25, 2020)(9)

  4,000  3,962  485 

              

The Tennis Channel, Inc.(10)

 

Television-Based Sports Broadcasting

            

   

Warrants (114,316 equivalent shares)

     235  301 

              

The Topps Company, Inc.(11)

 

Trading Cards & Confectionary

            

   

LIBOR Plus 6.00% (Floor 1.25%), Current Coupon 7.25%, Secured Debt (Maturity—October 2, 2018)(9)

  1,960  1,948  1,923 

              

TOMS Shoes, LLC(11)

 

Global Designer, Distributor, and Retailer of Casual Footwear

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.50%, Secured Debt (Maturity—October 30, 2020)(9)

  4,963  4,545  3,387 

              

Travel Leaders Group, LLC(11)

 

Travel Agency Network Provider

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—December 7, 2020)(9)

  8,700  8,638  8,613 

��             

US Joiner Holding Company(11)

 

Marine Interior Design and Installation

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—April 16, 2020)(9)

  7,369  7,341  7,295 

              

Valley Healthcare Group, LLC

 

Provider of Durable Medical Equipment

            

   

LIBOR Plus 12.50% (Floor 0.50%), Current Coupon 13.00%, Secured Debt (Maturity—December 29, 2020)(9)

  10,400  10,297  10,297 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
  

Vantage Oncology, LLC(11)

 

Outpatient Radiation Oncology Treatment Centers

            

   

9.5% Secured Debt (Maturity—June 15, 2017)

  12,050  11,938  10,182 

              

Virtex Enterprises, LP(10)

 

Specialty, Full-Service Provider of Complex Electronic Manufacturing Services

            

   

12% Secured Debt (Maturity—December 27, 2018)

  1,667  1,516  1,516 

   

Preferred Class A Units (14 units; 5% cumulative)(8)

     333  512 

   

Warrants (11 equivalent units)

     186  135 

         2,035  2,163 

              

Vision Solutions, Inc.(11)

 

Provider of Information Availability Software

            

   

LIBOR Plus 8.00% (Floor 1.50%), Current Coupon 9.50%, Secured Debt (Maturity—July 23, 2017)(9)

  5,000  4,987  4,750 

              

Western Dental Services, Inc.(11)

 

Dental Care Services

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—November 1, 2018)(9)

  4,904  4,901  4,303 

              

Wilton Brands LLC(11)

 

Specialty Housewares Retailer

            

   

LIBOR Plus 7.25% (Floor 1.25%), Current Coupon 8.50%, Secured Debt (Maturity—August 30, 2018)(9)

  1,540  1,524  1,475 

              

Worley Claims Services, LLC(10)

 

Insurance Adjustment Management and Services Provider

      ��     

   

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.00%, Secured Debt (Maturity—October 31, 2020)(9)

  6,435  6,381  6,210 

              

YP Holdings LLC(11)

 

Online and Offline Advertising Operator

            

   

LIBOR Plus 6.75% (Floor 1.25%), Current Coupon 8.00%, Secured Debt (Maturity—June 4, 2018)(9)

  2,455  2,435  2,382 

              

Zilliant Incorporated

 

Price Optimization and Margin Management Solutions

            

   

Preferred Stock (186,777 shares)

     154  260 

   

Warrants (952,500 equivalent shares)

     1,071  1,190 

         1,225  1,450 

Subtotal Non-Control/Non-Affiliate Investments (49.6% of total investments at fair value)

 $945,187 $894,466 

Total Portfolio Investments, December 31, 2015

 $1,666,642 $1,799,996 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

December 31, 2015

(dollars in thousands)

Portfolio Company(1)
 Business Description Type of Investment(2)(3) Principal(4) Cost(4) Fair Value 

Marketable Securities and Idle Funds Investments

       

              

PennantPark Investment Corporation(13)(15)

 

Business Development Company

            

   

Common Stock (343,149 shares)(8)

    $3,629 $2,121 

              

Other Marketable Securities and Idle Funds Investments(13)(15)

 

Investments in Marketable Securities and Diversified, Registered Bond Funds

            

         1,778  1,572 

Subtotal Marketable Securities and Idle Funds Investments (0.2% of total investments at fair value)

 $5,407 $3,693 

Total Investments, December 31, 2015

 $1,672,049 $1,803,689 

(1)
All investments are Lower Middle Market portfolio investments, unless otherwise noted. See Note B 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 Agreement or in support of the SBA-guaranteed debentures issued by the Funds.

(2)
Debt investments are income producing, unless otherwise noted. Equity and warrants are non-income producing, unless otherwise noted.

(3)
See Note C for a summary of geographic location of portfolio companies.

(4)
Principal is net of repayments. Cost is net of repayments and accumulated unearned income.

(5)
Control investments are defined by the Investment Company Act of 1940, as amended ("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% 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. A majority of the variable rate loans in the Company's investment portfolio bear interest at a rate that may be determined by reference to either LIBOR or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each such loan, the Company has provided the weighted average annual stated interest rate in effect at December 31, 2015. As noted in the table above,this schedule, 59% (based on par)the par amount of debt securitiesthe loans) of the loans contain LIBOR floors which range between 0.25% and 1.50%.

(10)
Private Loan portfolio investment. See Note B for a description of Private Loan portfolio investments.

(11)
Middle Market portfolio investment. See Note B for a description of Middle Market portfolio investments.

(12)
Other Portfolio investment. See Note B 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 investment.

(15)
Marketable securities and idle fund investments.

(16)
External Investment Manager. Investment is not encumbered as security for the Company's Credit Agreement 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)
Portfolio company is in a bankruptcy process and, as such, the maturity date of our debt investments in this portfolio company will not be finally determined until such process is complete. As noted in footnote (14), our debt investments in this portfolio company are on non-accrual status.

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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

NOTE A—ORGANIZATION AND BASIS OF PRESENTATION

1.     Organization

        Main Street Capital Corporation ("MSCC") is a principal investment firm primarily focused on providing customized debt and equity financing to lower middle market ("LMM") companies and debt capital to middle market ("Middle Market") companies. The portfolio investments of MSCC and its consolidated subsidiaries are typically made to support management buyouts, recapitalizations, growth financings, refinancings and acquisitions of companies that operate in diverse industry sectors. MSCC seeks to partner with entrepreneurs, business owners and management teams and generally provides "one stop" financing alternatives within its LMM portfolio. MSCC and its consolidated subsidiaries invest primarily in secured debt investments, equity investments, warrants and other securities of LMM companies based in the United States and in secured debt investments of Middle Market companies generally headquartered in the United States.

        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"). MSCC wholly owns several investment funds, including Main Street Mezzanine Fund, LP ("MSMF") and, Main Street Capital II, LP ("MSC II") and togetherMain Street Capital III, LP ("MSC III" and, collectively with MSMF and MSC II, 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"). 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.

        MSC Adviser I, LLC (the "External Investment Manager") was formed in November 2013 as a wholly owned subsidiary of MSCC to provide investment management and other services to parties other than MSCC and its subsidiaries or their portfolio companies ("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 ("RIA") under Investment Advisers Act of 1940, as amended (the "Advisers Act"). Since the External Investment Manager conducts all of its investment management activities for External Parties, it 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.

        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 will not pay corporate-level U.S. federal income taxes on any net ordinary 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. The External Investment Manager is also a direct wholly owned subsidiary that has elected to be a taxable entity. The Taxable Subsidiaries and the External Investment Manager are each taxed at their normal corporate tax rates based on their taxable income.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

        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 and the Taxable Subsidiaries.

2.     Basis of Presentation

        Main Street's financial statements are prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). 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 Middle Market portfolio companies, Private Loan portfolio investments, Other Portfolio investments, and the investment in the External Investment Manager, but excludes all "Marketable securities and idle funds investments" (see Note C—Fair Value Hierarchy for Investments and Debentures—Portfolio Composition—Investment Portfolio Investment Composition for additional discussion of Main Street's Investment Portfolio and definitions for the terms Private Loan and Other Portfolio). "Marketable securities and idle funds investments" are classified as financial instruments and are reported separately on Main Street's consolidated balance sheets and consolidated schedules of investments due to the nature of such investments (see Note B.11.). Main Street's results of operations for the three and sixnine months ended JuneSeptember 30, 2016 and 2015, cash flows for the sixnine months ended JuneSeptember 30, 2016 and 2015, and financial position as of JuneSeptember 30, 2016 and December 31, 2015, are presented on a consolidated basis. The effects of all intercompany transactions between Main Street and its consolidated subsidiaries have been eliminated in consolidation.

        The accompanying unaudited consolidated financial statements of Main Street are presented in conformity with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, the unaudited consolidated financial results included herein contain all adjustments, consisting solely of normal recurring accruals, considered necessary for the fair presentation of financial statements for the interim periods included herein. The results of operations for the three and sixnine months ended JuneSeptember 30, 2016 and 2015 are not necessarily indicative of the operating results to be expected for the full year. Also, the unaudited financial statements and notes should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2015. Financial statements prepared on a U.S. GAAP basis require management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.

        Under regulations pursuant to Article 6 of Regulation S-X applicable to BDCs and Accounting Standards Codification ("Codification" or "ASC") 946,Financial Services—Investment Companies ("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 or to its portfolio companies. Accordingly, as noted above, MSCC's consolidated financial statements include the financial position and operating results for the Funds and the Taxable Subsidiaries. MSCC's consolidated financial statements also include the financial position and operating results for MSCC's wholly owned operating subsidiary, Main Street Capital Partners, LLC ("MSCP"),


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

as the wholly owned subsidiaryMSCP provides all of its services directly or indirectly to Main Street or its portfolio companies. Main Street has determined that all of its portfolio investments do not qualify for this exception, including the investment in the External Investment Manager. Therefore, Main Street's Investment Portfolio is carried on the consolidated balance sheet at fair value, as discussed further in Note B, with any adjustments to fair value recognized as "Net Change in Unrealized Appreciation (Depreciation)" on the consolidated statements of operations until the investment is realized, usually upon exit, resulting in any gain or loss being recognized as a "Net Realized Gain (Loss)."

        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% 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.

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 the Financial Accounting Standards Board ("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 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.

        Main Street's portfolio strategy calls for it to invest primarily in illiquid debt and equity securities issued by private, LMM companies and more liquid debt securities issued by Middle Market companies that are generally larger in size than the LMM companies. Main Street categorizes some of its investments in LMM companies and Middle Market companies as Private Loan portfolio investments, which are primarily debt securities in privately held companies which have been originated through strategic relationships with other investment funds on a collaborative basis, and are often referred to in the debt markets as "club deals." Private Loan investments are typically similar in size, structure, terms and conditions to investments Main Street holds in its LMM portfolio and Middle Market portfolio. Main Street's portfolio also includes Other Portfolio investments which primarily consist of investments that are not consistent with the typical profiles for its LMM portfolio investments, Middle Market portfolio investments or Private Loan portfolio investments, including investments which may be managed by third parties. 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 Middle Market securities generally have established markets that are not active. Private Loan investments may include investments which have no established trading market or 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 and a valuation process approved


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

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") for its LMM debt investments. For Middle Market portfolio investments, 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 Middle Market and Private Loan 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 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 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.

        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, private 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


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

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 its determination. 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 legal 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 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.

        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 nationally recognized independent financial advisory services firm analyzes and provides observations, recommendations and an assurance certification regarding the


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Company's determinations of the fair value of its LMM portfolio company investments. The nationally recognized independent financial advisory services 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 nationally recognized independent financial advisory services 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 its independent financial advisory services firm in arriving at Main Street's determination of fair value on its investments in a total of 2946 LMM portfolio companies for both of the sixnine months ended JuneSeptember 30, 2016, and 2015, representing approximately 43%75% of the total LMM portfolio at fair value as of both JuneSeptember 30, 2016, and on a total of 44 LMM portfolio companies for the nine months ended September 30, 2015, representing approximately 75% of the total LMM portfolio at fair value as of September 30, 2015. Excluding investments in new LMM portfolio companies which have not been in the Investment Portfolio for at least twelve months subsequent to the initial investment as of JuneSeptember 30, 2016 and 2015, as applicable, and investments in the LMM portfolio companies that were not reviewed because their equity is publicly traded, the percentage of the LMM portfolio reviewed and certified by the independent financial advisory services firm for the sixnine months ended JuneSeptember 30, 2016 and 2015 was 48%80% and 82% of the total LMM portfolio at fair value as of both JuneSeptember 30, 2016 and 2015.2015, respectively.

        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. Because almost all of the Middle Market portfolio investments are typically valued using third party quotes or other independent pricing services (including 97% and 99% of the Middle Market portfolio investments as of JuneSeptember 30, 2016 and December 31, 2015, respectively), we doMain Street does not generally consult with any financial advisory services firms in connection with determining the fair value of ourits Middle Market investments.

        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 a nationally recognized independent financial advisory services firm. The nationally recognized independent


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

financial advisory services firm analyzes and provides observations and recommendations and an assurance certification regarding the Company's determinations of the fair value of its Private Loan portfolio company investments. The nationally recognized independent financial advisory services firm


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

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 nationally recognized independent financial advisory services 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 its independent financial advisory services firm in arriving at its determination of fair value on its investments in a total of 1420 Private Loan portfolio companies for the sixnine months ended JuneSeptember 30, 2016, representing approximately 48%56% of the total Private Loan portfolio at fair value as of JuneSeptember 30, 2016, and on a total of 511 Private Loan portfolio companies for the sixnine months ended JuneSeptember 30, 2015, representing approximately 24%37% of the total Private Loan portfolio at fair value as of JuneSeptember 30, 2015. Excluding its investments in new Private Loan portfolio companies which have not been in the Investment Portfolio for at least twelve months subsequent to the initial investment decision as of JuneSeptember 30, 2016 and its investments in the Private Loan portfolio companies that were not reviewed because the investment is publicly traded or quoted by banks, the percentage of the Private Loan portfolio reviewed and certified by its independent financial advisory services firm for the sixnine months ended JuneSeptember 30, 2016 and 2015 was 65%80% and 63%84% of the total Private Loan portfolio at fair value as of JuneSeptember 30, 2016 and 2015, respectively.

        For valuation purposes, all of Main Street's Other Portfolio investments are non-control investments. Main Street's Other Portfolio investments comprised 4.5%4.9% and 4.2%, respectively, of Main Street's Investment Portfolio at fair value as of JuneSeptember 30, 2016 and December 31, 2015. 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 its investments using the NAV valuation method. For Other Portfolio debt 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 Other Portfolio debt investments in a current hypothetical sale using the Yield-to-Maturity valuation method. For Other Portfolio debt investments for which third-party quotes or other independent pricing are available and appropriate, Main Street determines the fair value of these investments through obtaining third party quotes or other independent pricing to the extent that these inputs are available and appropriate to determine fair value.

        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. This valuation approach estimates the value of the investment as if Main Street were to sell, or exit, the investment. In addition, Main Street


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

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.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

        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 portfolio companies. This system takes into account both quantitative and qualitative factors of the LMM portfolio company and the investments held therein.

        The Board of Directors of Main Street has the final responsibility for overseeing, reviewing and approving, in good faith, Main Street's determination of the fair value for its Investment Portfolio, as well as its valuation procedures, consistent with 1940 Act requirements. Main Street believes its Investment Portfolio as of JuneSeptember 30, 2016 and December 31, 2015 approximates fair value as of those dates based on the markets in which Main Street operates and other conditions in existence on those reporting dates.

2.     Use of Estimates

        The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at 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., the financial statements include investments in the Investment Portfolio whose values have been estimated by Main Street with the oversight, review and approval 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 significantlymaterially from the values that would have been determined had a readily availableready market for the investments existed, and it is reasonably possible that the differences could be material.securities existed.

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.

        At JuneSeptember 30, 2016, cash balances totaling $16.2$29.0 million exceeded Federal Deposit Insurance Corporation insurance protection levels, subjecting the Company to risk related to the uninsured balance. All of the Company's cash deposits are held at large, established, high credit quality financial institutions and management believes that the risk of loss associated with any uninsured balances is remote.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

4.     Marketable Securities and Idle Funds Investments

        Marketable securities and idle funds investments include intermediate-term secured debt investments, independently rated debt investments and publicly traded debt and equity investments. See the consolidated schedule of investments for more information on Marketable securities and idle funds investments.

5.     Interest, Dividend and Fee Income (Structuring and Advisory Services)

        Main Street records 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. In accordance with Main Street's valuation policies, 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 all of its debt or other obligations, 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 or other obligations, or if a loan or debt security is fully impaired, sold or written off, Main Street removes it from non-accrual status.

        Main Street holds certain debt and preferred equity instruments in its Investment Portfolio that contain payment-in-kind ("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.9. 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 three months ended JuneSeptember 30, 2016 and 2015, (i) approximately 4.1%4.0% and 1.8%2.2%, respectively, of Main Street's total investment income was attributable to PIK interest income not paid currently in cash and (ii) approximately 0.7%1.8% and 0.9%1.2%, respectively, of Main Street's total investment income was attributable to cumulative dividend income not paid currently in cash. For the sixnine months ended JuneSeptember 30, 2016 and 2015, (i) approximately 3.6%3.7% and 2.0%2.1%, respectively, of Main Street's total investment income was attributable to PIK interest income not paid currently in cash and (ii) approximately 0.8%1.1% and 0.9%1.0%, respectively, of Main Street's total investment income was attributable to cumulative dividend income not paid currently in cash.

        As of JuneSeptember 30, 2016, Main Street's total Investment Portfolio had eightfive investments on non-accrual status, which comprised approximately 0.5%0.4% of its fair value and 3.7%2.8% of its cost. As of December 31, 2015, Main Street's total Investment Portfolio had six investments on non-accrual status, which comprised approximately 0.4% of its fair value and 3.7% of its cost.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

        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 deferred and accreted into income over the life of the financing.

        A presentation of the investment income Main Street received from its Investment Portfolio in each of the periods presented is as follows:


 Three Months Ended
June 30,
 Six Months Ended
June 30,
  Three Months Ended
September 30,
 Nine Months Ended
September 30,
 

 2016 2015 2016 2015  2016 2015 2016 2015 

 (dollars in thousands)
  (dollars in thousands)
 

Interest, fee and dividend income:

                  

Interest income

 $33,419 $32,777 $65,601 $62,844  $35,580 $34,167 $101,181 $97,010 

Dividend income

 7,735 5,278 15,364 10,414  9,730 6,939 25,094 17,353 

Fee income

 1,711 3,011 3,776 4,613  1,284 1,273 5,059 5,887 

Total interest, fee and dividend income

 $42,865 $41,066 $84,741 $77,871  $46,594 $42,379 $131,334 $120,250 

6.     Deferred Financing Costs

        Deferred financing costs include SBIC debenture commitment fees and SBIC debenture leverage fees on the SBIC debentures which are not accounted for under the fair value option under ASC 825 (as discussed further in Note B.11.). These fees are approximately 3.4% of the total commitment and drawn amounts, as applicable. These deferred financing costs have been capitalized and are being amortized into interest expense over the ten year term of each debenture agreement.

        Deferred financing costs also include commitment fees and other costs related to Main Street's multi-year revolving credit facility (the "Credit Facility," as discussed further in Note F) and its notes (as discussed further in Note G). These costs have been capitalized and are amortized into interest expense over the term of the individual instrument.

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 interest income based on the effective interest method over the life of the financing.

        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, Main Street 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


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

unearned income, which is netted against the applicable debt investment, and accreted into interest income based on the effective interest method 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 based on the effective interest method 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 based on the effective interest method over the life of the debt investment.

        To maintain RIC tax treatment (as discussed in Note B.9. 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 three months ended JuneSeptember 30, 2016 and 2015, approximately 3.0%3.2% and 2.9%2.3%, respectively, of Main Street's total investment income was attributable to interest income for the accretion of discounts associated with debt investments, net of any premium reduction. For the sixnine months ended JuneSeptember 30, 2016 and 2015, approximately 2.8%3.0% and 2.9%2.7%, respectively, of Main Street's total investment income was attributable to interest income for the accretion of discounts associated with debt investments, net of any premium reduction.

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.

        Effective January 1, 2016, Main Street elected early adoption of ASU 2016-09,Compensation—Stock Compensation: Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09," as discussed further below in Note B.13.). ASU 2016-09 requires that all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit in the income statement and no longer delay recognition of a tax benefit until the tax benefit is realized through a reduction to taxes payable. The tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. Additionally, ASU 2016-09 allows an entity to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest, net of forfeitures, (current GAAP) or account for forfeitures when they occur. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. As such, Main Street has recorded a $1.8 million adjustment to "Net Unrealized Appreciation, Net of Income Taxes" on the consolidated balance sheet to capture the cumulative tax effect as of January 1, 2016. The company has elected to account for forfeitures as they occur and this change had no impact on its consolidated financial statements. The additional amendments (cash flows classification, minimum statutory tax withholding requirements and classification of awards as either a liability or equity) did not have an effect on Main Street's consolidated financial statements.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

9.     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, 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 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 12 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 hold certain portfolio 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-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 its book income, or loss, due to temporary book and tax timing differences and permanent differences. This income tax expense, or benefit, if any, and the related tax assets and liabilities, are reflected in Main Street's consolidated financial statements.

        MSCP is included in Main Street's consolidated financial statements for financial reporting purposes. For tax purposes, MSCP has elected to be treated as a taxable entity, and therefore is not consolidated with MSCC for income tax purposes and 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 taxable income, or loss, of MSCP may differ from its book income, or loss, due to temporary book and tax timing differences and permanent differences. This income tax expense, or benefit, if any, and the related tax assets and liabilities, are reflected in Main Street's consolidated financial statements.

        The Taxable Subsidiaries and MSCP 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 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.

        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 Consolidated Financial Statements (Continued)

(Unaudited)

10.   Net Realized Gains or Losses and Net Change in 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 change in 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.

11.   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. Marketable securities and idle funds investments may include investments in certificates of deposit, U.S. government agency securities, independently rated debt investments, diversified bond funds and publicly traded debt and equity investments, and the fair value determination for these investments under the provisions of ASC 820 generally consists of Level 1 and 2 observable inputs, similar in nature to those discussed further in Note C.

        As part of Main Street's acquisition of the majority of the equity interests of MSC II in January 2010 (the "MSC II Acquisition"), Main Street elected the fair value option under ASC 825,Financial Instruments ("ASC 825") relating to accounting for debt obligations at their fair value, for the MSC II SBIC debentures acquired (the "Acquired Debentures") as part of the acquisition accounting related to the MSC II Acquisition and values those obligations as discussed further in Note C. In order to provide for a more consistent basis of presentation, Main Street has continued to elect the fair value option for SBIC debentures issued by MSC II subsequent to the MSC II Acquisition. When the fair value option is elected for a given SBIC debenture, the deferred loan costs associated with the debenture are fully expensed in the current period to "Net Change in Unrealized Appreciation (Depreciation)—SBIC debentures" as part of the fair value adjustment. Interest incurred in connection with SBIC debentures which are valued at fair value is included in interest expense.

12.   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.

13.   Recently Issued or Adopted Accounting Standards

        In May 2014, the FASB issued Accounting Standards Update 2014-09,Revenue from Contracts with Customers (Topic 606). ASU 2014-9 supersedes the revenue recognition requirements under ASC Topic


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Topic 605,Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the ASC. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Under the new guidance, an entity is required to perform the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The new guidance will significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. Additionally, the guidance requires improved disclosures as to the nature, amount, timing and uncertainty of revenue that is recognized. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606)—Narrow-Scope Improvements and Practical Expedients. This ASU clarified guidance on assessing collectability, presenting sales tax, measuring noncash consideration, and certain transition matters. The FASB tentatively decided to defer the effective date of the new revenue standard for public entities under U.S. GAAP for one year. If finalized, the new guidance will be effective for the annual reporting period beginning after December 15, 2017, including interim periods within that reporting period. Early adoption would be permitted for annual reporting periods beginning after December 15, 2016. Main Street is currently evaluating the impact the adoption of this new accounting standard will have on its financial statements.

        In May 2015, the FASB issued ASU 2015-07,Fair Value Measurements—Disclosures for Certain Entities that Calculate Net Asset Value per Share. This amendment updates guidance intended to eliminate the diversity in practice surrounding how investments measured at net asset value under the practical expedient with future redemption dates have been categorized in the fair value hierarchy. Under the updated guidance, investments for which fair value is measured at net asset value per share using the practical expedient should no longer be categorized in the fair value hierarchy, while investments for which fair value is measured at net asset value per share but the practical expedient is not applied should continue to be categorized in the fair value hierarchy. The updated guidance requires retrospective adoption for all periods presented and is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. The Company adopted this standard during the three months ended March 31, 2016. There was no impact of the adoption of this new accounting standard on ourMain Street's consolidated financial statements as none of ourits investments are measured through the use of the practical expedient.

        In February 2016, the FASB issued ASU 2016-02,Leases, which requires lessees to recognize on the balance sheet a right-of-use asset, representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. The standard requires the use of a modified retrospective transition approach, which includes a number of optional practical expedients that entities may elect to apply. The new guidance is effective for annual periods beginning after December 15, 2018, and interim periods therein. Early application is permitted. The impact of the adoption of this new accounting standard on Main Street's consolidated financial statements is currently being evaluated.

        In March 2016, the FASB issued ASU 2016-09, which is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

guidance is effective for annual periods beginning after December 15, 2016, and interim periods therein. Early application is permitted. The Company elected to early adopt this standard during the three months ended March 31, 2016. See further discussion of the impact of the adoption of this standard in Note B.8.

        In August 2016, the FASB issued ASU 2016-15,Statement of Cash Flows (Topic 230), which is intended to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2017, and interim periods therein. Early application is permitted. The impact of the adoption of this new accounting standard on Main Street's consolidated financial statements is not expected to be material.

        From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted by Main Street as of the specified effective date. Main Street believes that the impact of recently issued standards and any that are not yet effective will not have a material impact on its financial statements upon adoption.

NOTE C—FAIR VALUE HIERARCHY FOR INVESTMENTS AND DEBENTURES—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.

        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 balance sheet are categorized based on the inputs to the valuation techniques as follows:


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

        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). Main Street conducts reviews of fair value hierarchy classifications on a quarterly basis. During the classification process, Main Street may determine that it is appropriate to transfer investments between fair value hierarchy Levels. These transfers occur when Main Street has concluded that it is appropriate for the classification of an individual asset to be changed due to a change in the factors used to determine the selection of the Level. Any such changes are deemed to be effective during the quarter in which the transfer occurs.

        As of JuneSeptember 30, 2016 and December 31, 2015, all of Main Street's LMM portfolio investments except for the debt and equity investments in one portfolio company consisted of illiquid securities issued by private companies. Those investments which were the exceptions were in a company with publicly traded equity. As a result, the fair value determination for the LMM portfolio investments primarily consisted of unobservable inputs. The fair value determination for the publicly traded equity security consisted of observable inputs in non-active markets for which sufficient observable inputs were available to determine the fair value. As a result, all of Main Street's LMM portfolio investments were categorized as Level 3 as of JuneSeptember 30, 2016 and December 31, 2015, except for the one publicly traded equity security which was categorized as Level 2.

        As of JuneSeptember 30, 2016 and December 31, 2015, 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 JuneSeptember 30, 2016 and December 31, 2015.

        As of JuneSeptember 30, 2016 and December 31, 2015, Main Street's Private Loan portfolio investments primarily consisted of investments in interest-bearing 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 JuneSeptember 30, 2016 and December 31, 2015.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

        As of JuneSeptember 30, 2016 and December 31, 2015, Main Street's Other Portfolio investments consisted of illiquid securities issued by private companies. 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 JuneSeptember 30, 2016 and December 31, 2015.

        As of June 30, 2016 and December 31, 2015, Main Street's Marketable securities and idle funds investments consisted primarily of investments in publicly traded debt and equity investments. The fair value determination for these investments consisted of a combination of observable inputs in active markets for which sufficient observable inputs were available to determine the fair value of these investments. As a result, all of Main Street's Marketable securities and idle funds investments were categorized as Level 1 as of June 30, 2016 and December 31, 2015.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

        The fair value determination of each portfolio investment categorized as Level 3 required one or more of the following unobservable inputs:

        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


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

("WACC"). Significant increases (decreases) in EBITDA multiple inputs in isolation would result in a significantly higher (lower) fair value measurement. On the contrary, 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, Middle Market, Private Loan and Other Portfolio debt securities are (i) risk adjusted discount rates used in the Yield-to-Maturity valuation technique (described in Note"Note B.1.—Valuation of the Investment Portfolio)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


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

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 measure the fair value of Main Street's Level 3 portfolio investments as of JuneSeptember 30, 2016 and December 31, 2015:

Type of Investment
 Fair Value
as of
June 30,
2016
(in thousands)
 Valuation Technique Significant Unobservable Inputs Range(3) Weighted
Average(3)
 Median(3)  Fair Value
as of
September 30,
2016
(in thousands)
 Valuation Technique Significant Unobservable Inputs Range(3) Weighted
Average(3)
 Median(3) 

Equity investments

 $536,033 Discounted cash flow Weighted-average cost of capital 10.0% - 36.2% 13.1% 13.5%  $531,672 Discounted cash flow Weighted-average cost of capital 10.2% - 22.6% 12.9% 13.6% 

    Market comparable / Enterprise Value EBITDA multiple(1) 4.0x - 8.5x(2) 7.1x 5.5x     Market comparable / Enterprise Value EBITDA multiple(1) 4.5x - 8.0x(2) 6.9x 5.9x 

Debt investments

 
$

728,633
 

Discounted cash flow

 

Risk adjusted discount factor

 

8.0% - 15.4%(2)

 
12.1%
 
11.6%
  
$

734,110
 

Discounted cash flow

 

Risk adjusted discount factor

 

7.7% - 15.4%(2)

 
12.0%
 
11.0%
 

    Expected principal recovery percentage 5.3% - 100.0% 99.9% 100.0%     Expected principal recovery percentage 5.3% - 100.0% 100.0% 100.0% 

Debt investments

 
$

621,162
 

Market approach

 

Third party quote

 

28.0 - 101.0

      
$

652,325
 

Market approach

 

Third party quote

 

22.5 - 107.0

     

Total Level 3 investments

 $1,885,828        $1,918,107       

(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 4.0x4.5x - 18.8x17.5x and the range for risk adjusted discount factor is 5.0% - 29.6%33.8%.

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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(3)
Does not include investments for which the valuation technique does not include the use of the applicable fair value input.

Type of Investment
 Fair Value
as of
December 31,
2015
(in thousands)
 Valuation Technique Significant Unobservable Inputs Range(3) Weighted
Average(3)
 Median(3)  Fair Value
as of
December 31,
2015
(in thousands)
 Valuation Technique Significant Unobservable Inputs Range(3) Weighted
Average(3)
 Median(3) 

Equity investments

 $530,612 Discounted cash flow Weighted-average cost of capital 10.5% - 25.1% 13.4% 13.9%  $530,612 Discounted cash flow Weighted-average cost of capital 10.5% - 25.1% 13.4% 13.9% 

    Market comparable / Enterprise Value EBITDA multiple(1) 4.0x - 8.5x(2) 7.0x 5.5x     Market comparable / Enterprise Value EBITDA multiple(1) 4.0x - 8.5x(2) 7.0x 5.5x 

Debt investments

 
$

628,492
 

Discounted cash flow

 

Risk adjusted discount factor

 

8.1% - 15.3%(2)

 
11.9%
 
11.9%
  
$

628,492
 

Discounted cash flow

 

Risk adjusted discount factor

 

8.1% - 15.3%(2)

 
11.9%
 
11.9%
 

     Expected principal recovery percentage 16.6% - 100.0% 99.7% 100.0%      Expected principal recovery percentage 16.6% - 100.0% 99.7% 100.0% 

Debt investments

 
$

637,052
 

Market approach

 

Third party quote

 

12.1 - 100.1

      
$

637,052
 

Market approach

 

Third party quote

 

12.1 - 100.1

     

Total Level 3 investments

 $1,796,156         $1,796,156        

(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 4.0x - 18.8x and the range for risk adjusted discount factor is 6.7% - 29.6%.

(3)
Does not include investments for which the valuation technique does not include the use of the applicable fair value input.

        The following tables provide a summary of changes in fair value of Main Street's Level 3 portfolio investments for the sixnine month periods ended JuneSeptember 30, 2016 and 2015 (amounts in thousands). Net


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

unrealized appreciation (depreciation) is included in the net change in unrealized appreciation (depreciation)—portfolio investments on the consolidated statements of operations.

Type of Investment
 Fair Value
as of
December 31,
2015
 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
June 30,
2016
  Fair Value
as of
December 31,
2015
 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
September 30,
2016
 

Debt

 1,265,544  (193,590) 273,126 19,795 (10,052) (5,028) 1,349,795  1,265,544  (289,261) 385,476 34,567 (3,893) (5,998) 1,386,435 

Equity

 519,966  (6,040) 49,753 (45,501) 496 5,028 523,702  519,966  (14,797) 61,543 (59,681) 3,821 5,998 516,850 

Equity Warrant

 10,646  (235) 2,819 235 (1,134)  12,331  10,646  (1,011) 4,750 1,011 (574)  14,822 

 1,796,156  (199,865) 325,698 (25,471) (10,690)  1,885,828  1,796,156  (305,069) 451,769 (24,103) (646)  1,918,107 

(1)
Includes the impact of non-cash conversions.

Type of Investment
 Fair Value
as of
December 31,
2014
 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
June 30,
2015
  Fair Value
as of
December 31,
2014
 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
September 30,
2015
 

Debt

 1,147,281  (338,168) 503,852 12,857 (8,170) (13,364) 1,304,288  1,147,281  (439,158) 672,305 19,844 (32,804) (10,779) 1,356,689 

Equity

 391,933  (9,124) 35,403 (2,460) 37,349 13,170 466,271  391,933  (16,475) 58,728 (8,250) 55,865 10,376 492,177 

Equity Warrant

 15,636  (1,643) 1,680 (1,838) (162)  13,673  15,636  (1,723) 2,153 (1,687) (271)  14,108 

 1,554,850  (348,935) 540,935 8,559 29,017 (194) 1,784,232  1,554,850  (457,356) 733,186 9,907 22,790 (403) 1,862,974 

(1)
Includes the impact of non-cash conversions.

        As of JuneSeptember 30, 2016 and December 31, 2015, the fair value determination for the SBIC debentures recorded at fair value primarily consisted of unobservable inputs. As a result, the SBIC debentures which are recorded at fair value were categorized as Level 3. Main Street determines the


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Notes to Consolidated Financial Statements (Continued)

(Unaudited)

fair value of these instruments primarily using a Yield-to-Maturity approach that analyzes the discounted cash flows of interest and principal for each SBIC debenture recorded at fair value based on estimated market interest rates for debt instruments of similar structure, terms, and maturity. Main Street's estimate of the expected repayment date of principal for each SBIC debenture recorded at fair value is the legal maturity date of the instrument. The significant unobservable inputs used in the fair value measurement of Main Street's SBIC debentures recorded at fair value are the estimated market interest rates used to fair value each debenture using the yield valuation technique described above. Significant increases (decreases) in the Yield-to-Maturity valuation inputs in isolation would result in a significantly lower (higher) fair value measurement.

        The following tables provide a summary of the significant unobservable inputs used to fair value Main Street's Level 3 SBIC debentures as of JuneSeptember 30, 2016 and December 31, 2015 (amounts in thousands):

Type of Instrument
 Fair Value as of
June 30, 2016
 Valuation Technique Significant Unobservable Inputs Range Weighted
Average
  Fair Value as of
September 30, 2016
 Valuation Technique Significant Unobservable Inputs Range Weighted
Average
 

SBIC debentures

 $73,879 Discounted cash flow Estimated market interest rates 4.2% - 5.7% 4.9% $74,680 Discounted cash flow Estimated market interest rates 3.8% - 5.3% 4.4%

 

Type of Instrument
 Fair Value as of
December 31, 2015
 Valuation Technique Significant Unobservable Inputs Range Weighted
Average
 

SBIC debentures

 $73,860 Discounted cash flow Estimated market interest rates 4.1% - 5.8%  4.9%

        The following tables provide a summary of changes for the Level 3 SBIC debentures recorded at fair value for the nine month periods ended September 30, 2016 and 2015 (amounts in thousands):

Type of Instrument
 Fair Value as of
December 31, 2015
 Repayments New SBIC
Debentures
 Net
Unrealized
(Appreciation)
Depreciation
 Fair Value as of
September 30,
2016
 

SBIC debentures at fair value

 $73,860 $ $ $820 $74,680 


Type of Instrument
 Fair Value as of
December 31, 2014
 Repayments New SBIC
Debentures
 Net
Unrealized
(Appreciation)
Depreciation
 Fair Value as of
September 30,
2015
 

SBIC debentures at fair value

 $72,981 $ $ $823 $73,804 

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        The following tables provide a summary of changes for the Level 3 SBIC debentures recorded at fair value for the six month periods ended June 30, 2016 and 2015 (amounts in thousands):

Type of Instrument
 Fair Value as of
December 31, 2015
 Repayments New SBIC
Debentures
 Net
Unrealized
(Appreciation)
Depreciation
 Fair Value as of
June 30, 2016
 

SBIC debentures at fair value

 $73,860 $ $ $19 $73,879 

Type of Instrument
 Fair Value as of
December 31, 2014
 Repayments New SBIC
Debentures
 Net
Unrealized
(Appreciation)
Depreciation
 Fair Value as of
June 30, 2015
 

SBIC debentures at fair value

 $72,981 $ $ $772 $73,753 

At JuneSeptember 30, 2016 and December 31, 2015, Main Street's investments and SBIC debentures at fair value were categorized as follows in the fair value hierarchy for ASC 820 purposes:


  
 Fair Value Measurements   
 Fair Value Measurements 

  
 (in thousands)
   
 (in thousands)
 
At June 30, 2016
 Fair Value Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
 Significant Other
Observable Inputs
(Level 2)
 Significant
Unobservable Inputs
(Level 3)
 
At September 30, 2016
 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

 $866,106 $ $2,310 $863,796  $829,692 $ $2,160 $827,532 

Middle Market portfolio investments

 611,624   611,624  627,944   627,944 

Private Loan portfolio investments

 299,290   299,290  337,735   337,735 

Other Portfolio investments

 84,206   84,206  94,763   94,763 

External Investment Manager

 26,912   26,912  30,133   30,133 

Total portfolio investments

 1,888,138  2,310 1,885,828  1,920,267  2,160 1,918,107 

Marketable securities and idle funds investments

 1,583 1,583        

Total investments

 $1,889,721 $1,583 $2,310 $1,885,828  $1,920,267 $ $2,160 $1,918,107 

SBIC debentures at fair value

 $73,879 $ $ $73,879  $74,680 $ $ $74,680 

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Notes to Consolidated Financial Statements (Continued)

(Unaudited)


 
  
 Fair Value Measurements 
 
  
 (in thousands)
 
At December 31, 2015
 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

 $862,710 $ $3,840 $858,870 

Middle Market portfolio investments

  586,900      586,900 

Private Loan portfolio investments

  248,313      248,313 

Other Portfolio investments

  74,801      74,801 

External Investment Manager

  27,272      27,272 

Total portfolio investments

  1,799,996    3,840  1,796,156 

Marketable securities and idle funds investments

  3,693  3,693     

Total investments

 $1,803,689 $3,693 $3,840 $1,796,156 

SBIC debentures at fair value

 $73,860 $ $ $73,860 

Investment Portfolio Composition

        Main Street's LMM portfolio investments primarily consist of secured debt, equity warrants and direct 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 $50 million. The LMM debt investments are typically secured by either a first or second priority lien on the assets of the portfolio


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company, generally bear interest at fixed rates, and generally have a term of between five and seven years from the original investment date. In most LMM portfolio investments, Main Street receives nominally priced equity warrants and/or makes direct equity investments in connection with a debt investment.

        Main Street's Middle Market portfolio investments primarily consist of direct investments in or secondary purchases of interest-bearing debt securities in privately held companies based in the United States that are generally larger in size than the companies included in Main Street's LMM portfolio. Main Street's Middle Market portfolio companies generally have annual revenues between $150 million and $1.5 billion, and its Middle Market investments generally range in size from $3 million to $15 million. Main Street's Middle Market portfolio debt investments are generally secured by either a first or second 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's private loan ("Private Loan") portfolio investments are primarily debt securities in privately held companies which have been originated through strategic relationships with other investment funds on a collaborative basis, and are often referred to in the debt markets as "club deals." Private Loan investments are typically similar in size, structure, terms and conditions to investments Main Street holds in its LMM portfolio and Middle Market portfolio. Main Street's Private Loan portfolio debt investments are generally secured by either a first or second 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.


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        Main Street's other portfolio ("Other Portfolio") investments primarily consist of investments which are not consistent with the typical profiles for LMM, Middle Market and Private Loan 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 liquidated over a five to ten year period.

        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 of the funds under management and may earn incentive fees, or a carried interest, based on the performance of the funds managed. Main Street has 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 HMS Income Fund, Inc. ("HMS Income"). Through this agreement, Main Street shares employees with the External Investment Manager, including their related infrastructure, business relationships, management expertise and capital raising capabilities. In the first quarter of 2014, Main Street began allocating cost to the External Investment Manager pursuant to the sharing agreement. Main Street's total expenses for the three months ended JuneSeptember 30, 2016 and 2015 are net of the costs allocated to the External Investment Manager of $1.4$1.2 million and $1.2$1.1 million, respectively. Main Street's total expenses for the sixnine months ended JuneSeptember 30, 2016 and 2015 are net of the costs allocated to the External Investment Manager of $2.5$3.7 million and $2.0$3.1 million, respectively.

        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 three and sixnine months ended JuneSeptember 30, 2016 and 2015, Main


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(Unaudited)

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, Middle Market and Private Loan portfolios as of JuneSeptember 30, 2016 and December 31, 2015 (this information excludes the Other Portfolio investments and the External Investment Manager which are discussed further below):


 As of June 30, 2016  As of September 30, 2016 

 LMM(a) Middle
Market
 Private
Loan
  LMM(a) Middle
Market
 Private
Loan
 

 (dollars in millions)
  (dollars in millions)
 

Number of portfolio companies

 74 81 44  71 81 45 

Fair value

 $866.1 $611.6 $299.3  $829.7 $627.9 $337.7 

Cost

 $726.5 $651.0 $323.2  $703.6 $658.0 $353.8 

% of portfolio at cost—debt

 69.0% 97.7% 93.9%  68.8% 97.5% 94.3% 

% of portfolio at cost—equity

 31.0% 2.3% 6.1%  31.2% 2.5% 5.7% 

% of debt investments at cost secured by first priority lien

 91.8% 85.8% 86.3%  91.5% 87.6% 87.6% 

Weighted-average annual effective yield(b)

 12.4% 8.4% 9.7%  12.5% 8.4% 9.6% 

Average EBITDA(c)

 $5.9 $92.2 $15.9  $6.2 $101.6 $21.1 

(a)
At JuneSeptember 30, 2016, Main Street had equity ownership in approximately 99% of its LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was approximately 35%36%.


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(b)
The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of JuneSeptember 30, 2016, 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. Weighted-average annual effective yield is higher than what an investor in shares of Main Street's common stock will realize on its investment because it does not reflect 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 Middle Market and Private Loan portfolios. These calculations exclude certain portfolio companies, including five LMM portfolio companies, fourthree Middle Market portfolio companies and fivethree Private Loan portfolio companies, as EBITDA is not a meaningful valuation metric for Main Street's investments in these portfolio companies.

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Notes to Consolidated Financial Statements (Continued)

(Unaudited)

 
 As of December 31, 2015 
 
 LMM(a) Middle
Market
 Private
Loan
 
 
 (dollars in millions)
 

Number of portfolio companies

  71  86  40 

Fair value

 $862.7 $586.9 $248.3 

Cost

 $685.6 $637.2 $268.6 

% of total investments at cost—debt

  70.4%  98.3%  94.3% 

% of total investments at cost—equity

  29.6%  1.7%  5.7% 

% of debt investments at cost secured by first priority lien

  91.8%  86.6%  87.3% 

Weighted-average annual effective yield(b)

  12.2%  8.0%  9.5% 

Average EBITDA(c)

 $6.0 $98.8 $13.1 

(a)
At December 31, 2015, Main Street had equity ownership in approximately 96% of its LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was approximately 36%.

(b)
The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of December 31, 2015, 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. Weighted-average annual effective yield is higher than what an investor in shares of Main Street's common stock will realize on its investment because it does not reflect 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 Middle Market and Private Loan portfolios. These calculations exclude certain portfolio companies, including five LMM portfolio companies, three Middle Market portfolio companies and six 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.

        As of JuneSeptember 30, 2016, Main Street had Other Portfolio investments in ten companies, collectively totaling approximately $84.2$94.8 million in fair value and approximately $92.3$101.3 million in cost basis and


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Notes to Consolidated Financial Statements (Continued)

(Unaudited)

which comprised 4.5%4.9% of Main Street's Investment Portfolio at fair value. As of December 31, 2015, Main Street had Other Portfolio investments in ten companies, collectively totaling approximately $74.8 million in fair value and approximately $75.2 million in cost basis and which comprised approximately 4.2% of Main Street's Investment Portfolio at fair value.

        As discussed further in Note A.1., Main Street holds an investment in the External Investment Manager, a wholly owned subsidiary that is treated as a portfolio investment. As of JuneSeptember 30, 2016, there was no cost basis in this investment and the investment had a fair value of $26.9$30.1 million, which comprised 1.4%1.6% of Main Street's Investment Portfolio at fair value. As of December 31, 2015, there was no cost basis in this investment and the investment had a fair value of $27.3 million, which comprised 1.5% of Main Street's Investment Portfolio at fair value.

        The following tables summarize the composition of Main Street's total combined LMM portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments at cost and


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(Unaudited)

fair value by type of investment as a percentage of the total combined LMM portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments, as of JuneSeptember 30, 2016 and December 31, 2015 (this information excludes the Other Portfolio investments and the External Investment Manager).

Cost:
 June 30,
2016
 December 31,
2015
  September 30,
2016
 December 31,
2015
 

First lien debt

 74.5% 75.8%  75.6% 75.8% 

Equity

 14.3% 13.5%  13.9% 13.5% 

Second lien debt

 9.2% 8.7%  8.5% 8.7% 

Equity warrants

 1.0% 0.9%  1.0% 0.9% 

Other

 1.0% 1.1%  1.0% 1.1% 

 100.0% 100.0%  100.0% 100.0% 

 

Fair Value:
 June 30,
2016
 December 31,
2015
  September 30,
2016
 December 31,
2015
 

First lien debt

 66.6% 66.1%  68.3% 66.1% 

Equity

 23.4% 24.9%  22.0% 24.9% 

Second lien debt

 8.4% 7.7%  8.0% 7.7% 

Equity warrants

 0.7% 0.6%  0.8% 0.6% 

Other

 0.9% 0.7%  0.9% 0.7% 

 100.0% 100.0%  100.0% 100.0% 

        The following tables summarize the composition of Main Street's total combined LMM portfolio investments, Middle Market portfolio investments and Private Loan 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 portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments, as of JuneSeptember 30, 2016 and December 31, 2015 (this information excludes the 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:
 September 30,
2016
 December 31,
2015
 

Southwest

  29.5%  33.4% 

Midwest

  21.5%  16.7% 

Northeast

  15.4%  18.3% 

Southeast

  15.6%  13.5% 

West

  14.7%  14.6% 

Canada

  1.7%  2.2% 

Other Non-United States

  1.6%  1.3% 

  100.0%  100.0% 

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Notes to Consolidated Financial Statements (Continued)

(Unaudited)

investments and the External Investment Manager). The geographic composition is determined by the location of the corporate headquarters of the portfolio company.

Cost:
 June 30,
2016
 December 31,
2015
 

Southwest

  31.1%  33.4% 

Midwest

  19.7%  16.7% 

Northeast

  16.8%  18.3% 

Southeast

  14.7%  13.5% 

West

  14.3%  14.6% 

Canada

  1.8%  2.2% 

Other Non-United States

  1.6%  1.3% 

  100.0%  100.0% 


Fair Value:
 June 30,
2016
 December 31,
2015
  September 30,
2016
 December 31,
2015
 

Southwest

 32.7% 36.7%  30.4% 36.7% 

Midwest

 18.2% 15.1%  19.8% 15.1% 

West

 16.2% 16.1%  17.0% 16.1% 

Southeast

 15.2% 12.6% 

Northeast

 15.5% 16.3%  14.6% 16.3% 

Southeast

 14.3% 12.6% 

Canada

 1.6% 2.0%  1.5% 2.0% 

Other Non-United States

 1.5% 1.2%  1.5% 1.2% 

 100.0% 100.0%  100.0% 100.0% 

        Main Street's LMM portfolio investments, Middle Market portfolio investments and Private Loan 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 portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments by industry at cost and fair value


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Notes to Consolidated Financial Statements (Continued)

(Unaudited)

as of JuneSeptember 30, 2016 and December 31, 2015 (this information excludes the Other Portfolio investments and the External Investment Manager).

Cost:
 June 30,
2016
 December 31,
2015
  September 30,
2016
 December 31,
2015
 

Energy Equipment & Services

 7.8% 7.3%  7.6% 7.3% 

Hotels, Restaurants & Leisure

 7.0% 7.9%  6.8% 7.9% 

Media

 5.8% 5.6% 

Machinery

 5.7% 5.7%  5.7% 5.7% 

Media

 5.6% 5.6% 

Construction & Engineering

 4.7% 4.6%  4.7% 4.6% 

Electronic Equipment, Instruments & Components

 4.5% 4.3% 

IT Services

 4.4% 5.1%  4.2% 5.1% 

Electronic Equipment, Instruments & Components

 4.0% 4.3% 

Specialty Retail

 4.0% 5.1%  4.1% 5.1% 

Commercial Services & Supplies

 4.0% 3.3%  4.0% 3.3% 

Internet Software & Services

 3.6% 3.1% 

Diversified Telecommunication Services

 3.5% 2.9%  3.4% 2.9% 

Internet Software & Services

 3.4% 3.1% 

Health Care Providers & Services

 3.3% 4.1% 

Auto Components

 3.4% 2.7% 

Food Products

 3.2% 2.4%  3.1% 2.4% 

Diversified Consumer Services

 2.9% 3.7%  2.9% 3.7% 

Health Care Equipment & Supplies

 2.9% 3.1%  2.9% 3.1% 

Health Care Providers & Services

 2.8% 4.1% 

Diversified Financial Services

 2.8% 2.3%  2.3% 2.3% 

Auto Components

 2.7% 2.7% 

Software

 2.3% 4.5%  2.2% 4.5% 

Computers & Peripherals

 1.9% 0.0% 

Professional Services

 1.9% 1.9% 

Communications Equipment

 1.9% 0.0% 

Pharmaceuticals

 1.7% 1.9% 

Road & Rail

 1.6% 1.6% 

Building Products

 1.6% 1.9% 

Oil, Gas & Consumable Fuels

 2.2% 2.1%  1.5% 2.1% 

Computers & Peripherals

 1.9% 0.0% 

Pharmaceuticals

 1.7% 1.9% 

Professional Services

 1.7% 1.9% 

Road & Rail

 1.6% 1.6% 

Consumer Finance

 1.5% 0.8%  1.5% 0.8% 

Distributors

 1.2% 0.7% 

Leisure Equipment & Products

 1.5% 1.1%  1.1% 1.1% 

Building Products

 1.4% 1.9% 

Distributors

 1.2% 0.7% 

Communications Equipment

 1.2% 0.0% 

Air Freight & Logistics

 1.1% 1.1%  1.0% 1.1% 

Aerospace & Defense

 1.1% 1.0%  1.0% 1.0% 

Other(1)

 7.7% 8.2%  8.1% 8.2% 

 100.0% 100.0%  100.0% 100.0% 

(1)
Includes various industries with each industry individually less than 1.0% of the total combined LMM portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments at each date.

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(Unaudited)

Fair Value:
 June 30,
2016
 December 31,
2015
  September 30,
2016
 December 31,
2015
 

Hotels, Restaurants & Leisure

 7.1% 7.8%  6.9% 7.8% 

Machinery

 6.9% 7.0%  6.8% 7.0% 

Energy Equipment & Services

 5.9% 6.0%  5.8% 6.0% 

Diversified Consumer Services

 5.3% 5.7%  5.5% 5.7% 

Media

 5.2% 5.1%  5.4% 5.1% 

Construction & Engineering

 5.2% 5.1%  5.2% 5.1% 

Specialty Retail

 4.3% 6.0% 

IT Services

 4.1% 4.6%  4.0% 4.6% 

Specialty Retail

 4.1% 6.0% 

Commercial Services & Supplies

 3.8% 3.1%  4.0% 3.1% 

Electronic Equipment, Instruments & Components

 3.5% 3.7%  3.9% 3.7% 

Internet Software & Services

 3.3% 2.9%  3.5% 2.9% 

Auto Components

 3.3% 2.8%  3.3% 2.8% 

Health Care Equipment & Supplies

 3.0% 2.9%  2.9% 2.9% 

Food Products

 2.9% 2.1% 

Diversified Telecommunication Services

 3.0% 2.7%  2.7% 2.7% 

Food Products

 3.0% 2.1% 

Diversified Financial Services

 2.8% 2.2% 

Health Care Providers & Services

 2.7% 3.3%  2.7% 3.3% 

Road & Rail

 2.5% 2.6%  2.4% 2.6% 

Diversified Financial Services

 2.3% 2.2% 

Software

 2.3% 5.9%  2.2% 5.9% 

Professional Services

 1.9% 1.7% 

Communications Equipment

 1.9% 0.0% 

Computers & Peripherals

 1.8% 0.0%  1.8% 0.0% 

Professional Services

 1.7% 1.7% 

Pharmaceuticals

 1.5% 1.7% 

Building Products

 1.4% 1.6% 

Consumer Finance

 1.3% 0.6% 

Oil, Gas & Consumable Fuels

 1.7% 1.2%  1.2% 1.2% 

Pharmaceuticals

 1.5% 1.7% 

Air Freight & Logistics

 1.2% 1.3% 

Leisure Equipment & Products

 1.4% 1.1%  1.1% 1.1% 

Consumer Finance

 1.3% 0.6% 

Building Products

 1.2% 1.6% 

Air Freight & Logistics

 1.2% 1.3% 

Distributors

 1.2% 0.6%  1.1% 0.6% 

Communications Equipment

 1.1% 0.0% 

Aerospace & Defense

 1.0% 0.9% 

Other(1)

 7.9% 7.8%  8.9% 8.7% 

 100.0% 100.0%  100.0% 100.0% 

(1)
Includes various industries with each industry individually less than 1.0% of the total combined LMM portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments at each date.

        At JuneSeptember 30, 2016 and December 31, 2015, 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 Consolidated Financial Statements (Continued)

(Unaudited)

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 these unconsolidated controlled portfolio companies, there are three tests utilized to


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

determine if any of Main Street's Control Investments (as defined in Note A, including those unconsolidated controlled portfolio companies in which Main Street does not own greater than 50% of the voting securities) are considered significant subsidiaries: the investment test, the asset test and the income test. Rule 3-09 of Regulation S-X, as interpreted by the SEC, requires Main Street to include 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 if any of the three tests exceed 20% of Main Street's total investments at fair value, total assets or total income, respectively. Rule 4-08(g) of Regulation S-X requires summarized financial information of a Control Investment in an annual report if any of the three tests exceeds 10% of Main Street's annual total amounts and Rule 10-01(b)(1) of Regulation S-X requires summarized financial information in a quarterly report if any of the three tests exceeds 20% of Main Street's year-to-date total amounts.

        As of JuneSeptember 30, 2016 and December 31, 2015, Main Street had no single Control Investment that represented greater than 20% of its total Investment Portfolio at fair value and no single investment whose total assets represented greater than 20% of its total assets. After performingFor each of the income test for the sixnine months ended JuneSeptember 30, 2016 and 2015, Main Street determined that itshad no single Control Investment whose income from one of its Control Investments individually generated morerepresented greater than 20% of its total income, primarily due toexcept for the unrealized appreciation that was recognized onExternal Investment Manager for the investment during the sixnine months ended JuneSeptember 30, 2016. As such, CBT Nuggets, LLC, an unconsolidated portfolio company that was a Control Investment, but which was not majority-owned by Main Street, was considered a significant subsidiary as of June 30, 2016.

2015. The following table shows the summarized financial information for CBT Nuggets, LLC:the External Investment Manager is included in Note D.

 
 Six Months Ended
June 30,
 
 
 2016 2015 
 
 (dollars in thousands)
 

Summary of Operations

       

Total Revenue

 $18,283 $16,347 

Gross Profit

  15,819  14,112 

Income from Operations

  6,275  5,837 

Net Income

  5,953  5,929 

NOTE D—EXTERNAL INVESTMENT MANAGER

        As discussed further in Note A.1., 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.

        During May 2012, Main Street entered into an investment sub-advisory agreement with HMS Adviser, LP ("HMS Adviser"), which is the investment advisor to HMS Income, a non-publicly traded BDC, to provide certain investment advisory services to HMS Adviser. In December 2013, after obtaining required no-action relief from the SEC to allow it to own a registered investment adviser,


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Main Street assigned the sub-advisory agreement to the External Investment Manager since the fees received from such arrangement could otherwise have negative consequences on MSCC's ability to meet the source-of-income requirement necessary for it to maintain its RIC tax treatment. Under the investment sub-advisory agreement, the External Investment Manager is entitled to 50% of the base management fee and the incentive fees earned by HMS Adviser under its advisory agreement with HMS Income. Based upon several fee waiver agreements with HMS Income and HMS Adviser, the External Investment Manager did not begin accruing the base management fee and incentive fees, if any, until January 1, 2014. The External Investment Manager has conditionally agreed to waive a limited amount of the incentive fees otherwise earned. During the three months ended JuneSeptember 30, 2016 and 2015, the External Investment Manager earned $2.3$2.5 million and $2.0$2.1 million, respectively, of management fees (net of fees waived, if any) under the sub-advisory agreement with HMS Adviser. During the sixnine months ended JuneSeptember 30, 2016 and 2015, the External Investment Manager earned $4.6$7.1 million and $3.4$5.5 million, respectively, of management fees (net of fees waived, if any) under the sub-advisory agreement with HMS Adviser.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

        The investment in the External Investment Manager is accounted for using fair value accounting, with the fair value determined by Main Street and approved, in good faith, by Main Street's Board of Directors. 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.). Any change in fair value of the investment in the External Investment Manager is recognized on Main Street's consolidated statement of operations in "Net Change in Unrealized Appreciation (Depreciation)—Portfolio investments".

        The External Investment Manager has elected, for tax purposes, to be treated as a taxable entity, is not consolidated with Main Street for income tax purposes and 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 External Investment Manager has elected to be treated as a taxable entity to enable it to receive fee income and to allow MSCC to continue to comply with the "source-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. 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 origination activity and assets under management, depending on the nature of the expense. For the three months ended JuneSeptember 30, 2016 and 2015, Main Street allocated $1.4$1.2 million and $1.2$1.1 million of total expenses, respectively, to the External Investment Manager. For the sixnine months ended JuneSeptember 30, 2016 and 2015, Main Street allocated $2.5$3.7 million and $2.0$3.1 million of total expenses, respectively, to the External Investment Manager. 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 dividend income from the External Investment Manager. For the three months ended JuneSeptember 30, 2016 and 2015, the total contribution to net investment income was $2.0 million and $1.7$1.8 million, respectively. For the sixnine months ended JuneSeptember 30, 2016 and 2015, the total contribution to net investment income was $3.8$5.8 million and $2.9$4.7 million, respectively.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

        Summarized financial information from the separate financial statements of the External Investment Manager as of JuneSeptember 30, 2016 and December 31, 2015 and for the three and sixnine months ended JuneSeptember 30, 2016 and 2015 is as follows:


 As of
June 30,
 As of
December 31,
  As of
September 30,
 As of
December 31,
 

 2016 2015  2016 2015 

 (dollars in thousands)
  (dollars in thousands)
 

Cash

 $ $31  $30 $31 

Accounts receivable—HMS Income

 2,343 2,262  2,466 2,262 

Total assets

 $2,343 $2,293  $2,496 $2,293 

Accounts payable to MSCC and its subsidiaries

 $1,635 $1,333  $1,424 $1,333 

Dividend payable to MSCC

 618 677  793 677 

Taxes payable

 90 283  279 283 

Equity

      

Total liabilities and equity

 $2,343 $2,293  $2,496 $2,293 

 


 Three Months
Ended
June 30
 Six Months
Ended
June 30,
  Three Months
Ended
September 30
 Nine Months
Ended
September 30,
 

 2016 2015 2016 2015  2016 2015 2016 2015 

 (dollars in thousands)
  (dollars in thousands)
 

Management fee income

 $2,336 $1,967 $4,587 $3,395  $2,471 $2,105 $7,058 $5,500 

Expenses allocated from MSCC or its subsidiaries:

 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 

Salaries, share-based compensation and other personnel costs

 (961) (816) (1,689) (1,382) (833) (764) (2,522) (2,146)

Other G&A expenses

 (400) (346) (826) (606) (391) (381) (1,217) (987)

Total allocated expenses

 (1,361) (1,162) (2,515) (1,988) (1,224) (1,145) (3,739) (3,133)

Pre-tax income

 975 805 2,072 1,407  1,247 960 3,319 2,367 

Tax expense

 
(357

)
 
(295

)
 
(756

)
 
(497

)
 (454) (350) (1,210) (847)

Net income

 $618 $510 $1,316 $910  $793 $610 $2,109 $1,520 

NOTE E—SBIC DEBENTURES

        SBIC debentures payable were $231.0 million and $225.0 million at both JuneSeptember 30, 2016 and December 31, 2015, respectively. SBIC debentures provide for interest to be paid semi-annually, with principal due at the applicable 10-year maturity date of each debenture. In August 2016, Main Street received a license from the SBA to operate a third SBIC, which at the time provided Main Street with up to $125.0 million of additional long-term, fixed interest rate debt capital through the issuance of SBA-guaranteed debentures. During September 2016, Main Street issued $6.0 million of SBIC debentures, leaving $119.0 million of additional capacity. The weighted-average annual interest rate on the SBIC debentures was 4.1% as of September 30, 2016 and 4.2% as of both June 30, 2016 and December 31, 2015. The first principal maturity due under the existing SBIC debentures is in 2017, and the weighted-average remaining duration as of JuneSeptember 30, 2016 was approximately 5.15.0 years. For the three months ended JuneSeptember 30, 2016 and 2015, Main Street recognized interest expense attributable to the SBIC debentures of $2.5 million in each period. For the sixnine months ended JuneSeptember 30, 2016 and 2015,


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Main Street recognized interest expense attributable to the SBIC debentures of $5.0$7.5 million and $4.9$7.4 million, respectively. Main Street has incurred upfront leverage and other miscellaneous fees of approximately 3.4% of the debenture principal amount. In accordance with SBA regulations, the Funds are precluded from incurring additional non-SBIC debt without the prior approval of the SBA. The Funds are subject to annual


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

compliance examinations by the SBA. There have been no historical findings resulting from these examinations.

        As of JuneSeptember 30, 2016, the recorded value of the SBIC debentures was $223.7$230.5 million which consisted of (i) $73.9$74.7 million recorded at fair value, or $1.3$0.5 million less than the $75.2 million facepar value of the SBIC debentures issued in MSC II and (ii) $149.8 million reportedrecorded at facepar value and held in MSMF.MSMF and (iii) $6.0 million recorded at par value and held in MSC III. As of JuneSeptember 30, 2016, if Main Street had adopted the fair value option under ASC 825 for all of its SBIC debentures, Main Street estimates the fair value of its SBIC debentures would be approximately $213.3$223.8 million, or $11.7$7.2 million less than the $225.0$231.0 million face value of the SBIC debentures.

NOTE F—CREDIT FACILITY

        Main Street maintains the Credit Facility to provide additional liquidity to support its investment and operational activities. The Credit Facility includes total commitments of $555.0 million from a diversified group of fourteen lenders and matures in September 2020. The Credit Facility also contains an accordion feature which allows Main Street to increase the total commitments under the facility to up to $750.0 million from new and existing lenders on the same terms and conditions as the existing commitments.

        Borrowings under the Credit Facility bear interest, subject to Main Street's election, on a per annum basis at a rate equal to the applicable LIBOR rate (0.46%(0.53% as of JuneSeptember 30, 2016) plus (i) 1.875% (or the applicable base rate (Prime Rate of 3.5%3.50% as of JuneSeptember 30, 2016) plus 0.875%) as long as Main Street maintains an investment grade rating and meets certain agreed upon excess collateral and maximum leverage requirements, (ii) 2.0% (or the applicable base rate plus 1.0%) if Main Street maintains an investment grade rating but, does not meet certain excess collateral and maximum leverage requirements or (iii) 2.25% (or the applicable base rate plus 1.25%) if Main Street does not maintain an investment grade rating. Main Street pays unused commitment fees of 0.25% per annum on the unused lender commitments under the Credit Facility. The Credit 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. The Credit Facility contains certain affirmative and negative covenants, including but not limited to: (i) maintaining a minimum availability of at least 10% of the borrowing base, (ii) maintaining an interest coverage ratio of at least 2.0 to 1.0, (iii) maintaining an asset coverage ratio of at least 1.5 to 1.0 and (iv) maintaining a minimum tangible net worth. The Credit Facility is provided on a revolving basis through its final maturity date in September 2020, and contains two, one-year extension options which could extend the final maturity by up to two years, subject to certain conditions, including lender approval.

        At JuneSeptember 30, 2016, Main Street had $350.0$313.0 million in borrowings outstanding under the Credit Facility. As of JuneSeptember 30, 2016, if Main Street had adopted the fair value option under ASC 825 for its Credit Facility, Main Street estimates its fair value would approximate its recorded value. Main Street recognized interest expense related to the Credit Facility, including unused commitment fees and amortization of deferred loan costs, of $2.2$2.5 million and $1.6$2.2 million for the three months ended JuneSeptember 30, 2016 and 2015, respectively, and $4.3$6.7 million and $3.3$5.5 million for each of the sixnine month periods ended June 30, 2016 and 2015, respectively. As of June 30, 2016, the interest rate on the Credit Facility was 2.3% which is consistent with the average interest rate for the three and six months ended June 30, 2016. As of June 30, 2016, Main Street was in compliance with all financial covenants of the Credit Facility.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

periods ended September 30, 2016 and 2015, respectively. As of September 30, 2016, the interest rate on the Credit Facility was 2.4%. The average interest rate was 2.4% and 2.3% for the three and nine months ended September 30, 2016, respectively. As of September 30, 2016, Main Street was in compliance with all financial covenants of the Credit Facility.

NOTE G—NOTES

        In April 2013, Main Street issued $92.0 million, including the underwriters full exercise of their option to purchase additional principal amounts to cover over-allotments, in aggregate principal amount of 6.125% Notes due 2023 (the "6.125% Notes"). The 6.125% Notes are unsecured obligations and rank pari passu with Main Street's current and future unsecured indebtedness; senior to any of its future indebtedness that expressly provides it is subordinated to the 6.125% Notes; effectively subordinated to all of its existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness, including borrowings under its Credit Facility; and structurally subordinated to all existing and future indebtedness and other obligations of any of its subsidiaries, including without limitation, the indebtedness of the Funds. The 6.125% Notes mature on April 1, 2023, and may be redeemed in whole or in part at any time or from time to time at Main Street's option on or after April 1, 2018. The 6.125% Notes bear interest at a rate of 6.125% per year payable quarterly on January 1, April 1, July 1 and October 1 of each year. The total net proceeds to Main Street from the 6.125% Notes, after underwriting discounts and estimated offering expenses payable by Main Street, were approximately $89.0 million. Main Street has listed the 6.125% Notes on the New York Stock Exchange under the trading symbol "MSCA". Main Street may from time to time repurchase the 6.125% Notes in accordance with the 1940 Act and the rules promulgated thereunder. As of JuneSeptember 30, 2016, the outstanding balance of the 6.125% Notes was $90.7 million. As of JuneSeptember 30, 2016, if Main Street had adopted the fair value option under ASC 825 for the 6.125% Notes, Main Street estimates the fair value would be approximately $92.8$94.1 million. Main Street recognized interest expense related to the 6.125% Notes, including amortization of deferred loan costs, of $1.5 million for each of the three months ended JuneSeptember 30, 2016 and 2015. Main Street recognized interest expense related to the 6.125% Notes, including amortization of deferred loan costs, of $2.92015, and $4.4 million for each of the sixnine months ended JuneSeptember 30, 2016 and 2015.

        The indenture governing the 6.125% Notes (the "6.125% Notes Indenture") contains certain covenants, including covenants requiring Main Street's compliance with (regardless of whether Main Street is subject to) the asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a)(1) of the 1940 Act, as well as covenants requiring Main Street to provide financial information to the holders of the 6.125% Notes and the Trustee if Main Street ceases to be subject to the reporting requirements of the Securities Exchange Act of 1934. These covenants are subject to limitations and exceptions that are described in the 6.125% Notes Indenture. As of JuneSeptember 30, 2016, Main Street was in compliance with these covenants.

        In November 2014, Main Street issued $175.0 million in aggregate principal amount of 4.50% unsecured notes due 2019 (the "4.50% Notes") at an issue price of 99.53%. The 4.50% Notes are unsecured obligations and rank pari passu with Main Street's current and future unsecured indebtedness; senior to any of its future indebtedness that expressly provides it is subordinated to the 4.50% Notes; effectively subordinated to all of its existing and future secured indebtedness, to the


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

extent of the value of the assets securing such indebtedness, including borrowings under its Credit Facility; and structurally subordinated to all existing and future indebtedness and other obligations of any of its subsidiaries, including without limitation, the indebtedness of the Funds. The 4.50% Notes mature on December 1, 2019, and may be redeemed in whole or in part at any time at Main Street's


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

option subject to certain make wholemake-whole provisions. The 4.50% Notes bear interest at a rate of 4.50% per year payable semi-annually on June 1 and December 1 of each year. The total net proceeds from the 4.50% Notes, resulting from the issue price and after underwriting discounts and estimated offering expenses payable by us, were approximately $171.2 million. Main Street may from time to time repurchase the 4.50% Notes in accordance with the 1940 Act and the rules promulgated thereunder. As of JuneSeptember 30, 2016, the outstanding balance of the 4.50% Notes was $175.0 million. As of JuneSeptember 30, 2016, if Main Street had adopted the fair value option under ASC 825 for the 4.50% Notes, Main Street estimates its fair value would be approximately $179.2$179.9 million. Main Street recognized interest expense related to the 4.50% Notes, including amortization of deferred loan costs, of $2.1 million for each of the three months ended JuneSeptember 30, 2016 and 2015. Main Street recognized interest expense related to the 4.50% Notes, including amortization of deferred loan costs, of $4.32015, and $6.4 million for each of the sixnine months ended JuneSeptember 30, 2016 and 2015.

        The indenture governing the 4.50% Notes (the "4.50% Notes Indenture") contains certain covenants, including covenants requiring Main Street's compliance with (regardless of whether Main Street is subject to) the asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a)(1) of the 1940 Act, as well as covenants requiring Main Street to provide financial information to the holders of the 4.50% Notes and the Trustee if Main Street ceases to be subject to the reporting requirements of the Securities Exchange Act of 1934. These covenants are subject to limitations and exceptions that are described in the 4.50% Notes Indenture. As of JuneSeptember 30, 2016, Main Street was in compliance with these covenants.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE H—FINANCIAL HIGHLIGHTS


 Six Months Ended
June 30,
  Nine Months Ended
September 30,
 

 2016 2015  2016 2015 

Per Share Data:

          

NAV at the beginning of the period

 $21.24 $20.85  $21.24 $20.85 

Net investment income(1)

 1.07 1.06  1.66 1.61 

Net realized gain (loss)(1)(2)

 0.57 (0.16) 0.65 (0.19)

Net change in net unrealized appreciation (depreciation)(1)(2)

 (0.72) 0.61  (0.56) 0.42 

Income tax benefit(1)(2)

 0.02 0.08  0.01 0.15 

Net increase in net assets resulting from operations(1)

 0.94 1.59  1.76 1.99 

Dividends paid to stockholders from net investment income

 (0.79) (1.28)

Dividends paid from net investment income

 (1.06) (1.79)

Distributions from capital gains

 (0.57) (0.03) (0.84) (0.05)

Total dividends paid

 (1.36) (1.31) (1.90) (1.84)

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)

Accretive effect of stock offerings (issuing shares above NAV per share)

 0.25 0.71  0.42 0.71 

Accretive effect of DRIP issuance (issuing shares above NAV per share)

 0.05 0.06  0.06 0.08 

Other(3)

 (0.01) (0.06) 0.05 0.01 

NAV at the end of the period

 $21.11 $21.84  $21.62 $21.79 

Market value at the end of the period

 $32.85 $31.91  $34.33 $26.66 

Shares outstanding at the end of the period

 52,074,810 49,938,534  52,931,917 50,079,178 

(1)
Based on weighted average number of common shares outstanding for the period.

(2)
Net realized gains or losses, net change in unrealized appreciation or depreciation, and income taxes 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 and the impact of the early adoption of the accounting standard ASU 2016-09 in the three months ended March 31, 2016 relating to the accounting for share-based payment transactions (see further discussion in Note B.8.).

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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)


 Six Months Ended
June 30,
  Nine Months Ended
September 30,
 

 2016 2015  2016 2015 

 (dollars in thousands)
  (dollars in thousands)
 

NAV at end of period

 $1,099,112 $1,090,816  $1,144,350 $1,090,981 

Average NAV

 $1,082,335 $1,038,230  $1,097,839 $1,051,418 

Average outstanding debt

 $781,243 $711,816  $792,966 $742,993 

Ratio of total expenses, including income tax expense, to average NAV(1)(2)

 2.74% 2.31%  4.11% 3.38% 

Ratio of operating expenses to average NAV(2)(3)

 2.78% 2.68%  4.20% 4.05% 

Ratio of operating expenses, excluding interest expense, to average NAV(2)(3)

 1.26% 1.19%  1.92% 1.79% 

Ratio of net investment income to average NAV(2)

 5.06% 4.88%  7.78% 7.47% 

Portfolio turnover ratio(2)

 11.29% 12.63%  18.11% 16.68% 

Total investment return(2)(4)

 18.05% 11.63%  25.35% –6.74% 

Total return based on change in NAV(2)(5)

 4.46% 8.11%  8.49% 10.31% 

(1)
Total expenses are the sum of operating expenses and net income tax provision/benefit. Net income tax provision/benefit includes the accrual of net deferred tax provision/benefit relating to the net unrealized appreciation/depreciation on portfolio investments held in Taxable Subsidiaries and due to the change in net operatingthe 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/benefit in calculating its total expenses even though these net deferred taxes are not currently payable/receivable.

(2)
Not annualized.

(3)
Operating expenses include interest, compensation, general and administrative and share-based compensation expenses, net of expenses allocated to the External Investment Manager.

(4)
Total investment return based on 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.

(5)
Total return based on change in net asset value was calculated using the sum of ending net asset value plus dividends to stockholders and other non-operating changes during the period, as divided by the beginning net asset value.

NOTE I—DIVIDENDS, DISTRIBUTIONS AND TAXABLE INCOME

        Main Street paid regular monthly dividends of $0.180 per share for each month of January through JuneSeptember 2016, totaling approximately $27.6$28.3 million, or $0.540 per share, for the three months ended JuneSeptember 30, 2016, and $54.8$83.1 million, or $1.080$1.620 per share, for the sixnine months ended JuneSeptember 30, 2016. The


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

second2016. The third quarter 2016 regular monthly dividends represent a 2.9% increase from the regular monthly dividends paid for the secondthird quarter of 2015. Additionally, Main Street paid a $0.275 per share supplemental semi-annual dividend, totaling $14.2 million, in June 2016 compared to a $13.7 million, or $0.275 per share, paid in June 2015. The regular monthly dividends equaled a total of approximately $26.1$26.2 million, or $0.525 per share, for the three months ended JuneSeptember 30, 2015, and $49.1$75.4 million, or $1.035$1.560 per share, for the sixnine months ended JuneSeptember 30, 2015.

        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, 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 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 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.

        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 capital gains, but may also include qualified dividends or return of capital.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

        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 sixnine months ended JuneSeptember 30, 2016 and 2015.


 Six Months Ended
June 30,
  Nine Months Ended
September 30,
 

 2016 2015  2016 2015 

 (estimated, dollars in
thousands)

  (estimated, dollars in
thousands)

 

Net increase in net assets resulting from operations

 $47,724 $76,227  $90,907 $96,895 

Book tax difference from share-based compensation expense

 (2,845) (2,310) (708) (662)

Net change in net unrealized (appreciation) depreciation

 36,639 (29,460) 28,829 (20,372)

Income tax benefit

 (490) (3,768) (1,018) (7,004)

Pre-tax book loss not consolidated for tax purposes

 2,564 12,161  16,771 15,240 

Book income and tax income differences, including debt origination, structuring fees, dividends, realized gains and changes in estimates

 (4,224) 2,323 

Book income and tax income differences, including debt origination, structuring fees, dividends, realized gains (losses) and changes in estimates

 (4,141) 992 

Estimated taxable income(1)

 79,368 55,173  130,640 85,089 

Taxable income earned in prior year and carried forward for distribution in current year

 29,683 38,638  29,683 38,638 

Taxable income earned prior to period end and carried forward for distribution next period

 (49,087) (38,607) (72,094) (42,279)

Dividend payable as of period end and paid in the following period

 9,364 8,739  9,783 9,014 

Total distributions accrued or paid to common stockholders

 $69,328 $63,943  $98,012 $90,462 

(1)
Main Street's taxable income for each period is an estimate and will not be finally determined until the company 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.

        The Taxable Subsidiaries hold certain portfolio 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-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 its book income, or loss, due to temporary book and tax timing differences and permanent differences. This income tax expense, or benefit, if any, and the related tax assets and liabilities, are reflected in Main Street's consolidated financial statements.

        MSCC's wholly owned subsidiary MSCP is included in Main Street's consolidated financial statements for financial reporting purposes. For tax purposes, MSCP has elected to be treated as a


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

taxable entity, and therefore is not consolidated with MSCC for income tax purposes and 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 taxable income, or loss, of MSCP may differ from its book income, or loss, due to temporary book and tax timing differences and permanent differences. This income tax expense, or benefit, if any, and the related tax assets and liabilities, are reflected in Main Street's consolidated financial statements.

        The income tax expense, or benefit, and the related tax assets and liabilities, generated by the Taxable Subsidiaries and MSCP, if any, are reflected in Main Street's consolidated financial statements. For the three months ended JuneSeptember 30, 2016, Main Street recognized a net income tax provisionbenefit of $1.8$0.5 million, principally consisting of a $1.0 million accrual for excise tax on our estimated undistributed taxable income, a deferred tax provisionbenefit of $0.7$1.4 million which is primarily the result of the net activity relating to the portfolio investments held in the Taxable Subsidiaries including changes in net operatingthe loss carryforwards, changes in net unrealized appreciation or depreciation and other temporary bookbook-tax differences, partially offset by a $0.9 million current tax differences andexpense which is primarily related to a $0.1$1.0 million provisionaccrual for current U.S. federal income and state taxes.excise tax on Main Street's estimated undistributed taxable income. For the sixnine months ended JuneSeptember 30, 2016, Main Street recognized a net income tax benefit of $0.5$1.0 million, which principally consistedconsisting of a deferred tax benefit of $2.0 million primarily the result of the net activity relating to the portfolio investments held in the Taxable Subsidiaries including changes in net operating loss carryforwards, changes in net unrealized appreciation or depreciation and temporary book tax differences, partially offset by a $1.1 million accrual for excise tax and $0.4 million of accruals for current U.S. federal income and state taxes. For the three months ended June 30, 2015, Main Street recognized a net income tax benefit of $3.5 million, which principally consisted of a deferred tax benefit of $5.1$3.4 million which is primarily the result of the net activity relating to the portfolio investments held in the Taxable Subsidiaries including changes in the loss carryforwards, changes in net operatingunrealized appreciation or depreciation and temporary book-tax differences, partially offset by $2.4 million in current tax expense which is composed of a (i) $2.1 million accrual for excise tax on its estimated undistributed taxable income and (ii) $0.3 million of accruals for current U.S. federal income and state taxes. For the three months ended September 30, 2015, Main Street recognized a net income tax benefit of $3.2 million, which principally consisted of a deferred tax benefit of $2.7 million which was primarily the result of the net activity relating to the portfolio investments held in the Taxable Subsidiaries including changes in the loss carryforwards, changes in net unrealized appreciation or depreciation and other temporary book tax differences partially offset by $1.2and a $0.5 million of accrualsbenefit for other current taxes, which was primarily related to a $0.7 million benefit for current U.S. federal income and state income taxes, and a $0.4partially offset by $0.2 million accrual for excise tax on ourits estimated undistributed taxable income. For the sixnine months ended JuneSeptember 30, 2015, Main Street recognized a net income tax benefit of $3.8$7.0 million, which principally consisted of a deferred tax benefit of $5.8$8.5 million primarily the result of the net activity relating to the portfolio investments held in the Taxable Subsidiaries including changes in net operatingthe loss carryforwards, changes in net unrealized appreciation or depreciation and temporary book tax differences, partially offset by $1.6$1.5 million in other current taxes, which principally consisted of $0.8 million of accruals for current U.S. federal income and state taxes, and a $0.4$0.7 million accrual for excise tax.tax on its estimated undistributed taxable income.

        The net deferred tax asset at JuneSeptember 30, 2016 and December 31, 2015 was $7.8$9.2 million and $4.0 million, respectively, primarily related to net operating loss carryforwards, timing differences in net unrealized appreciation or depreciation and other temporary book taxbook-tax differences relating to portfolio investments held by the Taxable Subsidiaries. In addition, during the three months ended March 31, 2016, Main Street recorded a one-time $1.8 million increase to deferred tax assets for previously unrecognized excess tax benefits associated with share-based compensation due to the early adoption of the new accounting standard ASU 2016-09 (See further discussion in Note B.8)B.8.). As of JuneSeptember 30, 2016, Main Streetthe Taxable Subsidiaries had a capital loss carryforward of $8.3$15.6 million. For federal income tax purposes, the capital loss carryforward will expire in 2020.taxable years 2020 and 2021. The timing and manner in which Main Street will utilize any net loss carryforwards in any year, or in total, may be limited in the future under the provisions of the Code.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE J—COMMON STOCK

        During November 2015, Main Street commenced a program (the "ATM Program") with selling agents through which it can sell shares of its common stock by means of at-the-market offerings from time to time.time (the "ATM Program"). During the sixnine months ended JuneSeptember 30, 2016, Main Street sold 1,225,7571,996,793 shares of its common stock at a weighted-average price of $32.03$32.67 per share and raised $39.3$65.2 million of gross proceeds under the ATM Program. Net proceeds were $38.7$64.3 million after commissions to the selling agents on shares sold and offering costs. As of JuneSeptember 30, 2016, sales transactions representing 81,67530,804 shares had not settled and are not included in shares issued and outstanding on the face of the consolidated balance sheet, but are included in the weighted average shares outstanding on the consolidated statement of operations and in the shares used to calculate net asset value per share. As of JuneSeptember 30, 2016, 1,133,675362,639 shares were available for sale under the ATM Program.

        During November and December 2015, Main Street sold 140,568 shares of its common stock at a weighted-average price of $31.98 per share and raised $4.5 million of gross proceeds under the ATM Program. Net proceeds were $4.3 million after commissions to the selling agents on shares sold and offering costs.

        During March 2015, Main Street completed a follow-on public equity offering of 4,370,000 shares of common stock, including the underwriters' full exercise of their option to purchase 570,000 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 $127.8 million.

NOTE K—DIVIDEND REINVESTMENT PLAN ("DRIP")

        Main Street's 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, the company's 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. 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.

        For the sixnine months ended JuneSeptember 30, 2016, $7.8$10.6 million of the total $69.0$97.3 million in dividends paid to stockholders represented DRIP participation. During this period, the DRIP participation requirements were satisfied with the issuance of 255,391339,544 newly issued shares. For the sixnine months ended JuneSeptember 30, 2015, $9.4$13.7 million of the total $62.9$89.1 million in dividends paid to stockholders represented DRIP participation. During this period, the DRIP participation requirements were satisfied with the issuance of 304,100444,957 newly issued shares and with the purchase of 3,131 shares of common stock in the open market. The shares disclosed above relate only to Main Street's DRIP and exclude any activity related to broker-managed dividend reinvestment plans.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE L—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 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 2015 Equity and Incentive Plan (the "Equity and Incentive Plan"). These shares generally vest over a three-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 JuneSeptember 30, 2016.

Restricted stock authorized under the plan

  3,000,000 

Less net restricted stock granted during:

    

Year ended December 31, 2015

  (900)

SixNine months ended JuneSeptember 30, 2016

  (257,909260,514)

Restricted stock available for issuance as of JuneSeptember 30, 2016

  2,741,1912,738,586 

        As of JuneSeptember 30, 2016, the following table summarizes the restricted stock issued to Main Street's independentnon-employee directors and the remaining shares of restricted stock available for issuance pursuant to the Main Street Capital Corporation 2015 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 during:

    

Year ended December 31, 2015

  (6,806)

SixNine months ended JuneSeptember 30, 2016

  (6,748)

Restricted stock available for issuance as of JuneSeptember 30, 2016

  286,446 

        For the three months ended JuneSeptember 30, 2016 and 2015, Main Street recognized total share-based compensation expense of $2.3$2.1 million and $1.7 million, respectively, related to the restricted stock issued to Main Street employees and independentnon-employee directors, and, for the sixnine months ended JuneSeptember 30, 2016 and 2015, Main Street recognized total share-based compensation expense of $3.8$6.0 million and $2.9$4.6 million, respectively, related to the restricted stock issued to Main Street employees and independentnon-employee directors.

        As of JuneSeptember 30, 2016, there was $16.5$14.4 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 approximately 2.22.0 years as of JuneSeptember 30, 2016.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE M—COMMITMENTS AND CONTINGENCIES

        At JuneSeptember 30, 2016, Main Street had the following outstanding commitments (in thousands):

Category / Company
 Amount  Amount 

Investments with equity capital commitments that have not yet funded:

      

Encap Energy Fund Investments

 
 
  
 
 

EnCap Energy Capital Fund VIII, L.P.

 $799  $686 

EnCap Energy Capital Fund VIII Co-Investors, L.P.

 120  96 

EnCap Energy Capital Fund IX, L.P.

 1,387  958 

EnCap Energy Capital Fund X, L.P.

 7,869  7,346 

EnCap Flatrock Midstream Fund II, L.P.

 7,663  5,589 

EnCap Flatrock Midstream Fund III, L.P.

 6,385  5,026 

 $24,223  $19,701 

Congruent Credit Opportunities Funds

 
 
  
 
 

Congruent Credit Opportunities Fund II, LP

 $8,488  $8,488 

Congruent Credit Opportunities Fund III, LP

 15,450  14,246 

 $23,938  $22,734 

Freeport Fund Investments

 
 
  
 
 

Freeport First Lien Loan Fund III LP

 $8,936  $8,936 

Freeport Financial SBIC Fund LP

 1,375  1,375 

 $10,311  $10,311 

I-45 SLF LLC

 
$

6,800
  $4,800 

Dos Rios Partners

 
 
  
 
 

Dos Rios Partners, LP

 $3,416  $2,353 

Dos Rios Partners—A, LP

 1,085  747 

 $4,501  $3,100 

Brightwood Capital Fund III, LP

 
$

3,750
  
$

3,750
 

EIG Fund Investments

 
$

2,242
  
$

2,334
 

LKCM Headwater Investments I, L.P.

 
$

2,500
  
$

2,500
 

Access Media Holdings, LLC

 
$

945
  
$

518
 

Total equity commitments

 $79,210  $69,748 

Investments with commitments to fund revolving loans that have not been fully drawn or term loans with additional commitments not yet funded:

 
 
  
 
 

U.S. TelePacific Corp.

 
$

7,500
 

UniRush, LLC

 
$

4,000
 

CapFusion, LLC

 4,800  3,200 

UniRush, LLC

 4,000 

Barfly Ventures, LLC

 3,675  2,756 

Apex Linen Service, Inc.

 3,200 

Buca C, LLC

 2,670 

PT Network, LLC

 2,621 

Truck Bodies and Equipment International, Inc.

 2,208 

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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Category / Company
 Amount  Amount 

Arcus Hunting LLC

 2,987 

Buca C, LLC

 2,670 

Hojeij Branded Foods, LLC

 2,028  2,028 

Applied Products, Inc.

 2,000  2,000 

Mid-Columbia Lumber Products, LLC

 2,000  2,000 

Glowpoint, Inc.

 2,000 

LaMi Products, LLC

 1,765  1,765 

PT Network, LLC

 1,634 

Guerdon Modular Holdings, Inc.

 1,600 

Arcus Hunting LLC

 1,396 

Messenger, LLC

 1,417  1,323 

Gamber-Johnson Holdings, LLC

 1,200  1,200 

Grace Hill, LLC

 1,161  1,025 

NRI Clinical Research, LLC

 1,000  1,000 

Lamb's Venture, LLC

 861 

Apex Linen Service, Inc.

 800 

Minute Key, Inc.

 800  800 

HW Temps LLC

 800 

BBB Tank Services, LLC

 800 

Mystic Logistics, Inc.

 800  800 

Energy & Exploration Partners, LLC

 663  663 

Lamb's Venture, LLC

 650 

Jackmont Hospitality, Inc.

 593  593 

Vision Interests, Inc.

 525  525 

Insurance Technologies, LLC

 522  522 

UniTek Global Services, Inc.

 483  483 

BBB Tank Services, LLC

 464 

HW Temps LLC

 400 

Subsea Global Solutions, LLC

 285 

AccuMED Corp.

 250  250 

Garreco, LLC

 200  200 

Subsea Global Solutions, LLC

 185 

Jensen Jewelers of Idaho, LLC

 50  200 

Total loan commitments

 $53,958  $39,038 

Total commitments

 $133,168  $108,786 

        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, the liquidation of Marketable securities and idle funds investments, and a combination of future debt and equity capital). Main Street follows a process to manage its liquidity and ensure that it has available capital to fund its unfunded commitments.commitments as necessary. The Company had total unrealized depreciation of $0.1 million on the outstanding unfunded commitments as of JuneSeptember 30, 2016.

        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.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE N—RELATED PARTY TRANSACTIONS

        As discussed further in Note D, the External Investment Manager is treated as a wholly owned portfolio company of MSCC and is included as part of Main Street's Investment Portfolio. At JuneSeptember 30, 2016, Main Street had a receivable of approximately $2.3$2.2 million due from the External Investment Manager which included approximately $1.6$1.4 million related primarily to operating expenses incurred by MSCC or its subsidiaries required to support the External Investment Manager's business, along with dividends declared but not paid by the External Investment Manager of approximately $0.6$0.8 million.

        In November 2015, Main Street's board of directors approved and adopted the Main Street Capital Corporation Deferred Compensation Plan (the "2015 Deferred Compensation Plan"). The 2015 Deferred Compensation Plan became effective on January 1, 2016 and replaced the Deferred Compensation Plan for Non-Employee Directors previously adopted by the board of directors in June 2013 (the "2013 Deferred Compensation Plan"). Under the 2015 Deferred Compensation Plan, 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. Individuals participating in the 2015 Deferred Compensation Plan receive distributions of their respective balances based on predetermined payout schedules or other events as defined by the plan and are also able to direct investments made on their behalf among investment alternatives permitted from time to time under the plan, including phantom Main Street stock units. As of JuneSeptember 30, 2016, $1.9$2.0 million of compensation and directors' fees had been deferred under the 2015 Deferred Compensation Plan (including amounts previously deferred under the 2013 Deferred Compensation Plan). Of this amount, $1.7 million was deferred into phantom Main Street stock units, representing 55,67555,753 shares of Main Street's common stock. Including phantom stock units issued through dividend reinvestment, the phantom stock units outstanding as of September 30, 2016 represented 63,257 shares of Main Street's common stock. Any amounts deferred under the plan represented by phantom Main Street's shares of commonStreet stock units will not be issued or included as outstanding on the consolidated statement of changes in net assets until such shares are actually distributed to the participant in accordance with the plan, but are included in operating expenses and weighted average shares outstanding on Main Street's consolidated statement of operations as earned.

NOTE O—SUBSEQUENT EVENTS

        In AugustOctober 2016, Main Street declared a semi-annual supplemental cash dividend of $0.275 per share payable in December 2016. This supplemental cash dividend is in addition to the previously announced regular monthly cash dividends that Main Street declared for the fourth quarter of 2016 of $0.185 per share for each of October, November and December 2016.

        In November 2016, Main Street declared regular monthly dividends of $0.185 per share for each month of October, NovemberJanuary, February and DecemberMarch of 2016.2017. These regular monthly dividends equal a total of $0.555 per share for the fourthfirst quarter of 20162017 and represent a 2.8% increase from the regular monthly dividends declared for the fourthfirst quarter of 2015.2016. Including the semi-annual supplemental dividend declared for December 2016 and the regular monthly dividends declared for the fourthfirst quarter of 2016,2017, Main Street will have paid $18.330$19.160 per share in cumulative dividends since its October 2007 initial public offering.

        In AugustOctober 2016, Main Street receivedamended its Credit Facility to extend the maturity by one year to September 2021. The Credit Facility includes total commitments of $555.0 million from a license from the SBA to operate a third SBIC. The third SBIC license providesdiversified group of fourteen lenders and also contains an accordion feature which allows Main Street withto increase the total commitments under the facility to up to $125$750.0 million of additional long-term, fixed interest rate debt capital throughfrom new and existing lenders on the issuance of SBA-guaranteed debentures.same terms and conditions as the existing commitments.


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Schedule 12-14

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments In and Advances to Affiliates
SixNine Months Ended JuneSeptember 30, 2016
(dollars in thousands)
(Unaudited)

Company
 
Investment(1)
 Amount of
Interest, Fees or
Dividends
Credited to
Income(2)
 December 31,
2015
Fair Value
 Gross
Additions(3)
 Gross
Reductions(4)
 June 30,
2016
Fair Value
  
Investment(1)
 Amount of
Interest, Fees or
Dividends
Credited to
Income(2)
 December 31,
2015
Fair Value
 Gross
Additions(3)
 Gross
Reductions(4)
 September 30,
2016
Fair Value
 

Control Investments

                      

Majority-owned investments

 

 

 
 
 
 
 
 
 
 
 
 
  

 

 
 
 
 
 
 
 
 
 
 
 

Café Brazil, LLC

 

Member Units

 
312
 
7,330
 
 
760
 
6,570
  

Member Units

 
416
 
7,330
 
 
760
 
6,570
 

CMS Minerals LLC

 Member Units 62  4,083 95 3,988  Member Units 101  4,083 190 3,893 

 Preferred Member Units 1,117 6,914  2,866 4,048  Preferred Member Units 1,172 6,914  3,543 3,371 

Gamber-Johnson Holdings, LLC

 LIBOR Plus 11.00% (Floor 1.00%) 261  19,791  19,791  LIBOR Plus 11.00% (Floor 1.00%) 884  19,798  19,798 

 Member Units 304  12,124  12,124  Member Units 354  12,124  12,124 

GRT Rubber Technologies LLC

 LIBOR Plus 9.00% (Floor 1.00%) 766 15,988 134 2,429 13,693  LIBOR Plus 9.00% (Floor 1.00%) 1,118 15,988 134 2,638 13,484 

 Member Units 223 15,580 2,450  18,030  Member Units 335 15,580 2,450  18,030 

Hydratec, Inc.

 Common Stock 911 14,950 810  15,760  Common Stock 1,270 14,950 810  15,760 

IDX Broker, LLC

 12.5% Secured Debt 730 11,350 10 10 11,350  12.5% Secured Debt 1,099 11,350 16 116 11,250 

 Member Units  6,440   6,440  Member Units 68 6,440 250  6,690 

Jensen Jewelers of Idaho, LLC

 Prime Plus 6.75% (Floor 2.00%) 240 4,055 515 215 4,355  Prime Plus 6.75% (Floor 2.00%) 359 4,055 522 372 4,205 

 Member Units 139 4,750 450  5,200  Member Units 159 4,750  100 4,650 

Lamb's Venture, LLC

 LIBOR Plus 5.75% 3  351 1 350  LIBOR Plus 5.75% 7  352 213 139 

 11% Secured Debt 435 7,962  227 7,735  11% Secured Debt 653 7,962  227 7,735 

 Preferred Equity  328 72  400  Preferred Equity  328 72  400 

 Member Units 10 4,690 1,050  5,740  Member Units 50 4,690 1,190  5,880 

 9.5% Secured Debt 43 919  25 894  9.5% Secured Debt 65 919  37 882 

 Member Units 27 1,240 380  1,620  Member Units 45 1,240 380  1,620 

Lighting Unlimited, LLC

 8% Secured Debt 61 1,514   1,514  8% Secured Debt 92 1,514   1,514 

 Preferred Equity  430   430  Preferred Equity  430   430 

 Warrants  40  10 30  Warrants  40  30 10 

 Member Units (81) 350  90 260  Member Units (81) 350  270 80 

Mid-Columbia Lumber

 10% Secured Debt 88 1,750   1,750  10% Secured Debt 133 1,750   1,750 

Products, LLC

 12% Secured Debt 237 3,900   3,900  12% Secured Debt 356 3,900   3,900 

 Member Units 40 2,580  160 2,420  Member Units 4 2,580  280 2,300 

 9.5% Secured Debt 42 881  22 859  9.5% Secured Debt 62 881  34 847 

 Member Units 10 550   550  Member Units 16 550 50  600 

MSC Adviser I, LLC

 Member Units 1,316 27,272  360 26,912  Member Units 2,110 27,272 2,861  30,133 

Mystic Logistics Holdings, LLC

 12% Secured Debt 593 9,448 20 108 9,360  12% Secured Debt 892 9,448 32 304 9,176 

 Common Stock 16 5,970  580 5,390  Common Stock  5,970  820 5,150 

NRP Jones, LLC

 6% Current / 6% PIK Secured Debt 940 12,948 405  13,353  6% Current / 6% PIK Secured Debt 1,426 12,948 683  13,631 

 Warrants  450  320 130  Warrants  450  320 130 

 Member Units  1,480  1,070 410  Member Units  1,480  1,070 410 

PPL RVs, Inc.

 11.1% Secured Debt 545 9,710   9,710  11.1% Secured Debt 820 9,710   9,710 

 Common Stock  9,770 1,420  11,190  Common Stock 261 9,770 2,010  11,780 

Principle Environmental, LLC

 12% Secured Debt 267 4,060 21 21 4,060  12% Secured Debt 392 4,060 21 21 4,060 

 12% Current / 2% PIK Secured Debt 236 3,310 35 1 3,344  12% Current / 2% PIK Secured Debt 354 3,310 52 1 3,361 

 Preferred Member Units  6,060  1,460 4,600  Preferred Member Units  6,060  1,460 4,600 

 Warrants  310  290 20  Warrants  310  290 20 

Quality Lease Service, LLC

 8% PIK Secured Debt 253 6,538 252  6,790  8% PIK Secured Debt 392 6,538 391  6,929 

 Member Units  2,638   2,638  Member Units  2,638 250  2,888 

Southern RV, LLC

 13% Secured Debt 157 11,400 104 11,504   13% Secured Debt 157 11,400 104 11,504  

 Member Units 957 15,100 (1,417) 13,683   Member Units 957 15,100  15,100  

 13% Secured Debt 45 3,250 30 3,280   13% Secured Debt 45 3,250 30 3,280  

 Member Units  1,200  1,200   Member Units  1,200  1,200  

Table of Contents

Company
 
Investment(1)
 Amount of
Interest, Fees or
Dividends
Credited to
Income(2)
 December 31,
2015
Fair Value
 Gross
Additions(3)
 Gross
Reductions(4)
 June 30,
2016
Fair Value
  
Investment(1)
 Amount of
Interest, Fees or
Dividends
Credited to
Income(2)
 December 31,
2015
Fair Value
 Gross
Additions(3)
 Gross
Reductions(4)
 September 30,
2016
Fair Value
 

The MPI Group, LLC

 9% Secured Debt 134 2,921   2,921  9% Secured Debt 202 2,921 1  2,922 

 Series A Preferred Units  690  190 500  Series A Preferred Units  690  330 360 

 Warrants       Warrants      

 Member Units 63 2,230 70  2,300  Member Units 95 2,230 70  2,300 

Travis Acquisition LLC

 12% Secured Debt 212 3,513 10 278 3,245  12% Secured Debt 340 3,513 43 3,556  

 Member Units 50 14,480 5,890  20,370  Member Units 2,812 14,480  14,480  

Uvalco Supply, LLC

 9% Secured Debt 53 1,314  216 1,098  9% Secured Debt 77 1,314  328 986 

 Member Units 90 5,460 250  5,710  Member Units 140 5,460  600 4,860 

Vision Interests, Inc.

 13% Secured Debt 209 3,052 10 107 2,955  13% Secured Debt 312 3,052 15 182 2,885 

 Series A Preferred Stock  3,550  180 3,370  Series A Preferred Stock  3,550  180 3,370 

 Common Stock  210  70 140  Common Stock  210  70 140 

Ziegler's NYPD, LLC

 6.5% Secured Debt 34 992 1  993  6.5% Secured Debt 51 992 1  993 

 12% Secured Debt 28 500  200 300  12% Secured Debt 37 500  200 300 

 14% Secured Debt 198 2,750   2,750  14% Secured Debt 293 2,750   2,750 

 Warrants  50 160  210  Warrants  50 170  220 

 Preferred Member Units  3,400 130  3,530  Preferred Member Units  3,400 300  3,700 

Other controlled investments

                      

Access Media Holdings, LLC

 

5.00% Current / 5.00% PIK Secured Debt

 
$

1,115
 
$

20,380
 
$

545
 
$

485
 
$

20,440
  

5.00% Current / 5.00% PIK Secured Debt

 
$

1,689
 
20,380
 
$

826
 
$

1,486
 
$

19,720
 

 Preferred Member Units  2,000 1,305 2,525 780  Preferred Member Units  2,000 1,732 3,482 250 

 Member Units       Member Units      

AmeriTech College, LLC

 10% Secured Debt 51 1,003 1  1,004  10% Secured Debt 76 1,003 1  1,004 

 10% Secured Debt 153 3,025   3,025  10% Secured Debt 230 3,025   3,025 

 Preferred Member Units 57 2,291   2,291  Preferred Member Units 86 2,291   2,291 

ASC Interests, LLC

 11% Secured Debt 140 2,500 8 258 2,250  11% Secured Debt 205 2,500 10 260 2,250 

 Member Units 35 2,230 450  2,680  Member Units 65 2,230 450  2,680 

Bond-Coat, Inc.

 12% Secured Debt 720 11,596 17 17 11,596  12% Secured Debt 1,085 11,596 17 17 11,596 

 Common Stock  9,140  4,050 5,090  Common Stock  9,140  4,050 5,090 

CBT Nuggets, LLC

 Member Units 4,425 42,120 7,980  50,100  Member Units 6,225 42,120 10,680  52,800 

Datacom, LLC

 8% Secured Debt 17  450  450  8% Secured Debt 33  900  900 

 5.25% Current / 5.25% PIK Secured Debt 566 10,970 210 450 10,730  5.25% Current / 5.25% PIK Secured Debt 878 10,970 369 451 10,888 

 Class A Preferred Member Units  1,181 89  1,270  Class A Preferred Member Units  1,181 137  1,318 

 Class B Preferred Member Units  5,079  2,485 2,594  Class B Preferred Member Units  5,079  3,310 1,769 

Garreco, LLC

 14% Secured Debt 424 5,739 13  5,752  14% Secured Debt 636 5,739 22 250 5,511 

 Member Units 5 1,270  180 1,090  Member Units 5 1,270  120 1,150 

Gulf Manufacturing, LLC

 9% PIK Secured Debt 35 777   777  9% PIK Secured Debt 53 777   777 

 Member Units  13,770  5,000 8,770  Member Units  13,770  5,000 8,770 

Gulf Publishing Holdings, LLC

 12.5% Secured Debt 322  9,904  9,904  12.5% Secured Debt 645  9,907  9,907 

 Member Units 62  3,124  3,124  Member Units 62  3,124  3,124 

Harrison Hydra-Gen, Ltd.

 9% Secured Debt 9 5,010  5,010   9% Secured Debt 9 5,010  5,010  

 Preferred Stock 2 1,361 2 1,363   Preferred Stock 2 1,361 2 1,363  

 Common Stock 79 2,600 430  3,030  Common Stock 137 2,600 740  3,340 

Hawthorne Customs and

 Member Units 12 460  180 280  Member Units  460  180 280 

Dispatch Services, LLC

 Member Units 81 2,220   2,220  Member Units 141 2,220  180 2,040 

HW Temps LLC

 LIBOR Plus 9.50% (Floor 1.00%) 540 9,884 8  9,892  LIBOR Plus 9.50% (Floor 1.00%) 814 9,884 412  10,296 

 Preferred Member Units 362 3,942 1,008  4,950  Preferred Member Units 354 3,942 418  4,360 

Indianapolis Aviation

 15% Secured Debt 240 3,100 5 5 3,100  15% Secured Debt 417 3,100 5 5 3,100 

Partners, LLC

 Warrants  2,540   2,540  Warrants  2,540 109  2,649 

Marine Shelters Holdings, LLC

 12% PIK Secured Debt 578 8,870 630 431 9,069  12% PIK Secured Debt 886 8,870 939 430 9,379 

(LoneStar Marine Shelters)

 Preferred Member Units  4,881  1,781 3,100  Preferred Member Units  4,881  3,975 906 

MH Corbin Holding LLC

 10% Secured Debt 710 13,869 14 350 13,533  10% Secured Debt 1,062 13,869 21 525 13,365 

 Preferred Member Units 70 6,000   6,000  Preferred Member Units 105 6,000   6,000 

NAPCO Precast, LLC

 Prime Plus 2.00% (Floor 7.00%) 154 4,005  1,292 2,713  Prime Plus 2.00% (Floor 7.00%) 219 4,005  1,292 2,713 

 18% Secured Debt 425 4,924  972 3,952  18% Secured Debt 609 4,924  972 3,952 

 Member Units 357 8,590 1,180  9,770  Member Units 645 8,590 2,080  10,670 

Table of Contents

Company
 
Investment(1)
 Amount of
Interest, Fees or
Dividends
Credited to
Income(2)
 December 31,
2015
Fair Value
 Gross
Additions(3)
 Gross
Reductions(4)
 June 30,
2016
Fair Value
  
Investment(1)
 Amount of
Interest, Fees or
Dividends
Credited to
Income(2)
 December 31,
2015
Fair Value
 Gross
Additions(3)
 Gross
Reductions(4)
 September 30,
2016
Fair Value
 

NRI Clinical Research, LLC

 14% Secured Debt 347 4,539 79 108 4,510  14% Secured Debt 519 4,539 79 108 4,510 

 Warrants  340 60  400  Warrants  340 310  650 

 Member Units  1,342 140  1,482  Member Units  1,342 979  2,321 

OMi Holdings, Inc.

 Common Stock  13,640 1,940  15,580  Common Stock  13,640 750  14,390 

Pegasus Research Group, LLC (Televerde)

 Member Units 314 6,840 1,780  8,620  Member Units 339 6,840 1,780  8,620 

River Aggregates, LLC

 Zero Coupon Secured Debt 34 556 35  591  Zero Coupon Secured Debt 52 556 53  609 

 Member Units 230 3,830 770  4,600  Member Units 345 3,830 770  4,600 

 Member Units  2,360 80  2,440  Member Units  2,360 150  2,510 

SoftTouch Medical

 LIBOR Plus 9.00% (Floor 1.00%) 410 8,010 65 425 7,650  LIBOR Plus 9.00% (Floor 1.00%) 606 8,010 65 850 7,225 

Holdings LLC

 Member Units 115 5,710 2,860  8,570  Member Units 262 5,710 2,960  8,670 

Other

                      

Amounts related to investments transferred to or from other 1940 Act classification during the period

            

 $25,572 $555,011 $84,793 $69,395 $570,409  $40,398 555,011 $90,062 $97,422 $547,651 

Affiliate Investments

                      

AFG Capital Group, LLC

 

11% Secured Debt

 
$

765
 
$

12,790
 
$

36
 
$

 
$

12,826
  

11% Secured Debt

 
$

1,313
 
$

12,790
 
$

349
 
$

13,139
 
$

 

 Warrants  490 80  570  Warrants  490 130  620 

 Member Units  2,020 310  2,330  Member Units  2,020 510  2,530 

Barfly Ventures, LLC

 12% Secured Debt 678 4,042 908 94 4,856  12% Secured Debt 862 4,042 1,813 94 5,761 

 Options   470  470  Options   420  420 

 Warrants  473  233 240  Warrants  473  233 240 

BBB Tank Services, LLC

 12% Current / 1% PIK Secured Debt 164  3,967  3,967  LIBOR Plus 7.50% (Floor 1.00%) 6  332  332 

 Member Units   800  800  12% Current / 1% PIK Secured Debt 298  3,982  3,982 

 Member Units   800  800 

Boss Industries, LLC

 Preferred Member Units 111 2,586 86 112 2,560  Preferred Member Units 199 2,586 133 113 2,606 

Bridge Capital Solutions

 13% Secured Debt 499 6,890 110  7,000  13% Secured Debt 984 6,890 5,660 7,000 5,550 

Corporation

 Warrants  1,300 80  1,380  Warrants  1,300 2,012  3,312 

 13% Secured Debt 40  990  990 

 Preferred Member Units 19  1,000  1,000 

Buca C, LLC

 LIBOR Plus 7.25% (Floor 1.00%) 1,094 25,299 231 2,319 23,211  LIBOR Plus 7.25% (Floor 1.00%) 1,595 25,299 231 3,159 22,371 

 Preferred Member Units 109 3,711 1,829  5,540  Preferred Member Units 168 3,711 1,888  5,599 

CAI Software LLC

 12% Secured Debt 269 4,661 9 650 4,020  12% Secured Debt 391 4,661 12 893 3,780 

 Member Units 22 1,000 740  1,740  Member Units 69 1,000 1,150  2,150 

CapFusion, LLC

 13% Secured Debt 529  9,933  9,933  13% Secured Debt 1,003  11,566  11,566 

 Warrants   1,200  1,200  Warrants   1,200  1,200 

Chandler Signs Holdings, LLC

 12% Secured Debt 316  4,458  4,458  12% Secured Debt 456  4,500  4,500 

 Class A Units 78  1,500  1,500  Class A Units 82  2,950  2,950 

Condit Exhibits, LLC

 Member Units 85 1,010 450  1,460  Member Units 130 1,010 770  1,780 

Congruent Credit Opportunities

 LP Interests (Fund II) 400 2,834  1,519 1,315  LP Interests (Fund II) 400 2,834  1,395 1,439 

Funds

 LP Interests (Fund III) 459 12,024 2,616  14,640  LP Interests (Fund III) 730 12,024 3,952  15,976 

Daseke, Inc.

 12% Current / 2.5% PIK Secured Debt 1,608 21,253 310 40 21,523  12% Current / 2.5% PIK Secured Debt 2,427 21,253 468 61 21,660 

 Common Stock  22,660   22,660  Common Stock  22,660  1,020 21,640 

Dos Rios Partners

 LP Interests (Fund)  2,031 1,070 619 2,482  LP Interests (Fund)  2,031 2,133 43 4,121 

 LP Interests (Fund A)  648 340 317 671  LP Interests (Fund A)  648 677 134 1,191 

Dos Rios Stone Products LLC

 Class A Units   2,000  2,000  Class A Units 51  2,000  2,000 

East Teak Fine Hardwoods, Inc.

 Common Stock 21 860   860  Common Stock 37 860   860 

East West Copolymer &

 12% Secured Debt 597 9,463 14  9,477  12% Secured Debt 949 9,463 71  9,534 

Rubber, LLC

 Warrants  50   50  Warrants  50   50 

EIG Fund Investments

 LP Interests 99 718 2,062  2,780  LP Interests 225 718 2,070  2,788 

EIG Traverse Co-Investment, L.P.

 LP Interests 616 4,755 5,175  9,930  LP Interests 895 4,755 5,272  10,027 

Freeport Financial Funds

 LP Interests (Fund) 202 6,045  346 5,699  LP Interests (Fund) 296 6,045  425 5,620 

 LP Interests (Fund III) 231 2,077 1,487  3,564  LP Interests (Fund III) 357 2,077 1,487  3,564 

Table of Contents

Company
 
Investment(1)
 Amount of
Interest, Fees or
Dividends
Credited to
Income(2)
 December 31,
2015
Fair Value
 Gross
Additions(3)
 Gross
Reductions(4)
 June 30,
2016
Fair Value
  
Investment(1)
 Amount of
Interest, Fees or
Dividends
Credited to
Income(2)
 December 31,
2015
Fair Value
 Gross
Additions(3)
 Gross
Reductions(4)
 September 30,
2016
Fair Value
 

Gault Financial, LLC (RMB

 10% Secured Debt 767 10,930 80  11,010  10% Secured Debt 1,156 10,930 123  11,053 

Capital, LLC)

 Warrants       Warrants      

Glowpoint, Inc.

 8% Secured Debt 14 397 1 398   8% Secured Debt 17 397 1 398  

 12% Secured Debt 560 8,929 11 1,303 7,637  12% Secured Debt 843 8,929 17 2,307 6,639 

 Common Stock  3,840  1,530 2,310  Common Stock  3,840  1,680 2,160 

Guerdon Modular Holdings, Inc.

 LIBOR Plus 8.50% (Floor 1.00%) 19 (15) 962 947   LIBOR Plus 8.50% (Floor 1.00%) 20 (15) 975 960  

 9% Current / 4% PIK Secured Debt 723 10,295 78 13 10,360  9% Current / 4% PIK Secured Debt 1,080 10,295 181  10,476 

 Preferred Stock   1,140  1,140  Preferred Stock   1,140  1,140 

 Common Stock  1,990  1,910 80  Common Stock  1,990  1,910 80 

Houston Plating and Coatings, LLC

 Member Units (23) 8,440 433 3,543 5,330  Member Units (23) 8,440 433 4,493 4,380 

I-45 SLF LLC

 Member units 778 7,200 3,106  10,306  Member units 1,196 7,200 5,386  12,586 

Indianhead Pipeline

 12% Secured Debt 411 5,853 63 449 5,467  12% Secured Debt 609 5,853 95 675 5,273 

Services, LLC

 Preferred Member Units 24 2,302 273  2,575  Preferred Member Units 31 2,302 368  2,670 

 Warrants       Warrants      

 Member Units       Member Units      

KBK Industries, LLC

 10% Secured Debt 8  600  600  10% Secured Debt 23  1,000 300 700 

 12.5% Secured Debt 379 5,900 7 7 5,900  12.5% Secured Debt 572 5,900 11 25 5,886 

 Member Units (8) 3,680  450 3,230  Member Units (8) 3,680  590 3,090 

L.F. Manufacturing Holdings, LLC

 Member Units  1,485 185  1,670  Member Units  1,485  105 1,380 

MPS Denver, LLC

 Member Units  1,130  290 840  Member Units  1,130 124 1,254  

OnAsset Intelligence, Inc.

 12% PIK Secured Debt 248 4,006 248  4,254  12% PIK Secured Debt 378 4,006 378  4,384 

 Preferred Stock  1,380   1,380  Preferred Stock  1,380  1,380  

 Warrants       Warrants      

OPI International Ltd.

 10% Unsecured Debt 24 473   473  10% Unsecured Debt 36 473   473 

 Common Stock  3,200   3,200  Common Stock  3,200   3,200 

PCI Holding Company, Inc.

 12% Secured Debt 538  13,000  13,000  12% Secured Debt 946  13,000  13,000 

 Preferred Stock 291 4,887 291 939 4,239  Preferred Stock 450 4,887 450 297 5,040 

Radial Drilling Services Inc.

 12% Secured Debt 10 1,500 10  1,510  12% Secured Debt 20 1,500 2,461 3,961  

 Warrants       Warrants   758 758  

Rocaceia, LLC (Quality Lease

 12% Secured Debt  250   250  12% Secured Debt  250   250 

and Rental Holdings, LLC)

 Preferred Member Units       Preferred Member Units      

Samba Holdings, Inc.

 12.5% Secured Debt 1,100 24,662 110 24,772   12.5% Secured Debt 1,100 24,662 110 24,772  

 Common Stock  30,220  30,220   Common Stock  30,220  30,220  

Tin Roof Acquisition Company

 12% Secured Debt 869 13,807 30 209 13,628  12% Secured Debt 1,304 13,807 45 313 13,539 

 Class C Preferred Stock 127 2,477 126  2,603  Class C Preferred Stock 193 2,477 193  2,670 

UniTek Global Services, Inc.

 LIBOR Plus 7.50% (Floor 1.00%) 131 2,812  1 2,811  LIBOR Plus 7.50% (Floor 1.00%) 192 2,812 1  2,813 

 LIBOR Plus 8.50% (Floor 1.00%) 62 1,255 6 273 988  LIBOR Plus 8.50% (Floor 1.00%) 86 1,255 7 447 815 

 15% PIK Unsecured Debt 54 638 50  688  15% PIK Unsecured Debt 82 638 76  714 

 Preferred Stock  5,540 450  5,990  Preferred Stock 495 5,540 660  6,200 

 Common Stock   2,100  2,100  Common Stock   2,580  2,580 

Universal Wellhead Services Holdings, LLC

 Class A Preferred Units  3,000  1,840 1,160  Class A Preferred Units  3,000  1,840 1,160 

Valley Healthcare Group, LLC

 LIBOR Plus 12.50% (Floor 0.50%) 707 10,297 420  10,717  LIBOR Plus 12.50% (Floor 0.50%) 1,069 10,297 425 100 10,622 

 Preferred Member Units   1,600  1,600  Preferred Member Units   1,600  1,600 

Volusion, LLC

 10.5% Secured Debt 1,056 16,199 126  16,325  10.5% Secured Debt 1,591 16,199 192  16,391 

 Preferred Member Units  14,000   14,000  Preferred Member Units  14,000   14,000 

 Warrants  1,400   1,400  Warrants  1,400   1,400 

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Company
 
Investment(1)
 Amount of
Interest, Fees or
Dividends
Credited to
Income(2)
 December 31,
2015
Fair Value
 Gross
Additions(3)
 Gross
Reductions(4)
 June 30,
2016
Fair Value
  
Investment(1)
 Amount of
Interest, Fees or
Dividends
Credited to
Income(2)
 December 31,
2015
Fair Value
 Gross
Additions(3)
 Gross
Reductions(4)
 September 30,
2016
Fair Value
 

Other

                      

Amounts related to investments transferred to or from other 1940 Act classification during the period

 (345) (15,530)     (345) (15,530)    

 $17,476 $350,519 $67,777 $75,343 $358,483  $27,095 $350,519 $93,318 $106,494 $352,873 

(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.

(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 related to the time period it was in the category other than the one shown at period-end is included in "Amounts from 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.

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Item 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        The information in this section contains forward-looking statements that involve risks and uncertainties. Please see "Risk Factors" and "Cautionary Statement Concerning Forward-Looking Statements" in our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission (the "SEC") on February 26, 2016, for a discussion of the uncertainties, risks and assumptions associated with these statements. You should read the following discussion in conjunction with the consolidated financial statements and related notes and other financial information included in the Annual Report on Form 10-K for the year ended December 31, 2015.

ORGANIZATION

        Main Street Capital Corporation ("MSCC") is a principal investment firm primarily focused on providing customized debt and equity financing to lower middle market ("LMM") companies and debt capital to middle market ("Middle Market") companies. The portfolio investments of MSCC and its consolidated subsidiaries are typically made to support management buyouts, recapitalizations, growth financings, refinancings and acquisitions of companies that operate in diverse industry sectors. MSCC seeks to partner with entrepreneurs, business owners and management teams and generally provides "one stop" financing alternatives within its LMM portfolio. MSCC and its consolidated subsidiaries invest primarily in secured debt investments, equity investments, warrants and other securities of LMM companies based in the United States and in secured debt investments of Middle Market companies generally headquartered in the United States.

        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"). MSCC wholly owns several investment funds, including Main Street Mezzanine Fund, LP ("MSMF") and, Main Street Capital II, LP ("MSC II") and togetherMain Street Capital III, LP ("MSC III" and, collectively with MSMF and MSC II, 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"). 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.

        MSC Adviser I, LLC (the "External Investment Manager") was formed in November 2013 as a wholly owned subsidiary of MSCC to provide investment management and other services to parties other than MSCC and its subsidiaries or their portfolio companies ("External Parties") and receive 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 ("RIA") under Investment Advisers Act of 1940, as amended (the "Advisers Act"). Since the External Investment Manager conducts all of its investment management activities for External Parties, it 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.

        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 will not pay corporate-level U.S. federal income taxes on any net ordinary 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. The External Investment Manager is also a direct wholly owned subsidiary that has elected to


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be a taxable entity. The Taxable Subsidiaries and the External Investment Manager are each taxed at their normal corporate tax rates based on their taxable income.

        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 and the Taxable Subsidiaries.

OVERVIEW

        Our principal investment objective is to maximize our portfolio's total return by generating current income from our debt investments 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. Our LMM companies generally have annual revenues between $10 million and $150 million, and our LMM portfolio investments generally range in size from $5 million to $50 million. Our Middle Market investments are made in businesses that are generally larger in size than our LMM portfolio companies, with annual revenues typically between $150 million and $1.5 billion, and our Middle Market investments generally range in size from $3 million to $15 million. Our private loan ("Private Loan") portfolio investments are primarily debt securities in privately held companies which have been originated through strategic relationships with other investment funds on a collaborative basis. Private Loan investments are typically similar in size, structure, terms and conditions to investments we hold in our LMM portfolio and Middle Market portfolio.

        We seek to fill the financing gap for LMM businesses, which, historically, have had more 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 participations. 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. Providing customized, "one stop" financing solutions is important to LMM portfolio companies. We generally seek to partner directly with entrepreneurs, management teams and business owners in making our 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.

        Our Middle Market portfolio investments primarily consist of direct investments in or secondary purchases of interest bearing debt securities in privately held companies that are generally larger in size than the companies included in our LMM portfolio. Our Middle Market portfolio debt investments are generally secured by either a first or second 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 Private Loan portfolio investments are primarily debt securities in privately held companies which have been originated through strategic relationships with other investment funds on a collaborative basis, and are often referred to in the debt markets as "club deals." Private Loan investments are typically similar in size, structure, terms and conditions to investments we hold in our LMM portfolio and Middle Market portfolio. Our Private Loan portfolio debt investments are generally secured by either a first or second 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.

        Our other portfolio ("Other Portfolio") investments primarily consist of investments which are not consistent with the typical profiles for our LMM, Middle Market or Private Loan 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.


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        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. 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 HMS Income Fund, Inc. ("HMS Income"). Through this agreement, we share employees with the External Investment Manager, including their related infrastructure, business relationships, management expertise and capital raising capabilities.

        The following tables provide a summary of our investments in the LMM, Middle Market and Private Loan portfolios as of JuneSeptember 30, 2016 and December 31, 2015 (this information excludes the Other Portfolio investments and the External Investment Manager which are discussed further below):


 As of June 30, 2016  As of September 30, 2016 

 LMM(a) Middle
Market
 Private
Loan
  LMM(a) Middle
Market
 Private
Loan
 

 (dollars in millions)
  (dollars in millions)
 

Number of portfolio companies

 74 81 44  71 81 45 

Fair value

 $866.1 $611.6 $299.3  $829.7 $627.9 $337.7 

Cost

 $726.5 $651.0 $323.2  $703.6 $658.0 $353.8 

% of portfolio at cost—debt

 69.0% 97.7% 93.9%  68.8% 97.5% 94.3% 

% of portfolio at cost—equity

 31.0% 2.3% 6.1%  31.2% 2.5% 5.7% 

% of debt investments at cost secured by first priority lien

 91.8% 85.8% 86.3%  91.5% 87.6% 87.6% 

Weighted-average annual effective yield(b)

 12.4% 8.4% 9.7%  12.5% 8.4% 9.6% 

Average EBITDA(c)

 $5.9 $92.2 $15.9  $6.2 $101.6 $21.1 

(a)
At JuneSeptember 30, 2016, we had equity ownership in approximately 99% of our LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was approximately 35%36%.

(b)
The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of JuneSeptember 30, 2016, 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. Weighted-average annual effective yield is higher than what an investor in shares of our common stock will realize on its investment because it does not reflect 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 Middle Market and Private Loan portfolios. These calculations exclude certain portfolio companies, including five LMM portfolio companies, fourthree Middle Market portfolio companies and fivethree Private Loan portfolio companies, as EBITDA is not a meaningful valuation metric for our investments in these portfolio companies.

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 As of December 31, 2015 
 
 LMM(a) Middle
Market
 Private
Loan
 
 
 (dollars in millions)
 

Number of portfolio companies

  71  86  40 

Fair value

 $862.7 $586.9 $248.3 

Cost

 $685.6 $637.2 $268.6 

% of total investments at cost—debt

  70.4%  98.3%  94.3% 

% of total investments at cost—equity

  29.6%  1.7%  5.7% 

% of debt investments at cost secured by first priority lien

  91.8%  86.6%  87.3% 

Weighted-average annual effective yield(b)

  12.2%  8.0%  9.5% 

Average EBITDA(c)

 $6.0 $98.8 $13.1 

(a)
At December 31, 2015, we had equity ownership in approximately 96% of our LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was approximately 36%.

(b)
The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of December 31, 2015, 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. Weighted-average annual effective yield is higher than what an investor in shares of our common stock will realize on its investment because it does not reflect 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 Middle Market and Private Loan portfolios. These calculations exclude certain portfolio companies, including five LMM portfolio companies, three Middle Market portfolio companies and six 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.

        As of JuneSeptember 30, 2016, we had Other Portfolio investments in ten companies, collectively totaling approximately $84.2$94.8 million in fair value and approximately $92.3$101.3 million in cost basis and which comprised 4.5%4.9% of our Investment Portfolio (as defined in "—Critical Accounting Policies—Basis of Presentation" below) at fair value. As of December 31, 2015, we had Other Portfolio investments in ten companies, collectively totaling approximately $74.8 million in fair value and approximately $75.2 million in cost basis and which comprised approximately 4.2% of our Investment Portfolio at fair value.

        As previously discussed, the External Investment Manager is a wholly owned subsidiary that is treated as a portfolio investment. As of JuneSeptember 30, 2016, there was no cost basis in this investment and the investment had a fair value of $26.9$30.1 million, which comprised 1.4%1.6% of our Investment Portfolio at fair value. As of December 31, 2015, there was no cost basis in this investment and the investment had a fair value of $27.3 million, which comprised 1.5% of our Investment Portfolio at fair value.

        Our portfolio investments are generally made through MSCC and the Funds. MSCC and the Funds share the same investment strategies and criteria, although they are subject to different regulatory regimes. An investor's return in MSCC will depend, in part, on the Funds' investment returns as they are wholly owned subsidiaries of MSCC.

        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


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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 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. For each of the three and six months ended JuneSeptember 30, 2016, and 2015,the ratio of our total operating expenses, excluding interest expense, as a percentage of our quarterly average total assets was 1.5% on an annualized basis, compared to 1.3% on an annualized basis for the three months ended September 30, 2015. For the nine months ended September 30, 2016, the ratio of our total operating expenses, excluding interest expense, as a percentage of our quarterly average total assets was 1.4% on an annualized basis, which is consistent with the percentageratio on an annualized basis for the nine months ended September 30, 2015 and for the year ended December 31, 2015.

        During May 2012, we entered into an investment sub-advisory agreement with HMS Adviser, LP ("HMS Adviser"), which is the investment advisor to HMS Income, a non-publicly traded BDC, to provide certain investment advisory services to HMS Adviser. In December 2013, after obtaining required no-action relief from the SEC to allow us to own a registered investment adviser, we assigned the sub-advisory agreement to the External Investment Manager since the fees received from such arrangement could otherwise have negative consequences on our ability to meet the source-of-income requirement necessary for us to maintain our RIC tax treatment. Under the investment sub-advisory agreement, the External Investment Manager is entitled to 50% of the base management fee and the incentive fees earned by HMS Adviser under its advisory agreement with HMS Income. Based upon several fee waiver agreements with HMS Income and HMS Adviser, the External Investment Manager did not begin accruing the base management fee and incentive fees, if any, until January 1, 2014. The External Investment Manager has conditionally agreed to waive a limited amount of the incentive fees otherwise earned. During the three months ended JuneSeptember 30, 2016 and 2015, the External Investment Manager earned $2.3$2.5 million and $2.0$2.1 million, respectively, of management fees (net of fees waived, if any) under the sub-advisory agreement with HMS Adviser. During the sixnine months ended JuneSeptember 30, 2016 and 2015, the External Investment Manager earned $4.6$7.1 million and $3.4$5.5 million, respectively, of management fees (net of fees waived, if any) under the sub-advisory agreement with HMS Adviser.

        During April 2014, we received an exemptive order from the SEC permitting co-investments by us and HMS Income in certain negotiated transactions where co-investing would otherwise be prohibited under the 1940 Act. We have made, and in the future intend to continue to make, such co-investments with HMS Income 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 HMS Income and, if it is appropriate, to propose an allocation of the investment opportunity between us and HMS Income. Because the External Investment Manager may


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receive performance-based fee compensation from HMS Income, this may provide it an incentive to allocate opportunities to HMS Income instead of us. However, both we and the External Investment Manager have policies and procedures in place to manage this conflict.


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CRITICAL ACCOUNTING POLICIES

        Our financial statements are prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). For each of the periods presented herein, our consolidated financial statements include the accounts of MSCC and its consolidated subsidiaries. The Investment Portfolio, as used herein, refers to all of our investments in LMM portfolio companies, investments in Middle Market portfolio companies, Private Loan portfolio investments, Other Portfolio investments, and the investment in the External Investment Manager, but excludes all "Marketable securities and idle funds investments". "Marketable securities and idle funds investments" are classified as financial instruments and are reported separately on our consolidated balance sheets and consolidated schedules of investments due to the nature of such investments. Our results of operations for the three and sixnine months ended JuneSeptember 30, 2016 and 2015, cash flows for the sixnine months ended JuneSeptember 30, 2016 and 2015, and financial position as of JuneSeptember 30, 2016 and December 31, 2015, are presented on a consolidated basis. The effects of all intercompany transactions between us and our consolidated subsidiaries have been eliminated in consolidation.

        Our accompanying unaudited consolidated financial statements are presented in conformity with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, the unaudited consolidated financial results included herein contain all adjustments, consisting solely of normal recurring accruals, considered necessary for the fair presentation of financial statements for the interim periods included herein. The results of operations for the three and sixnine months ended JuneSeptember 30, 2016 and 2015 are not necessarily indicative of the operating results to be expected for the full year. Also, the unaudited financial statements and notes should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2015. Financial statements prepared on a U.S. GAAP basis require management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.

        Under regulations pursuant to Article 6 of Regulation S-X applicable to BDCs and Accounting Standards Codification ("Codification" or "ASC") 946,Financial Services—Investment Companies ("ASC 946"), we are precluded from consolidating other entities in which we have equity investments, including those in which we have a controlling interest, unless the other entity is another investment company. An exception to this general principle in ASC 946 occurs if we hold a controlling interest in an operating company that provides all or substantially all of its services directly to us or to any of our portfolio companies. Accordingly, as noted above, our consolidated financial statements include the financial position and operating results for the Funds and the Taxable Subsidiaries. Our consolidated financial statements also include the financial position and operating results for our wholly owned operating subsidiary, Main Street Capital Partners, LLC, ("MSCP"), as the wholly owned subsidiary provides all of its services directly or indirectly to Main Street or our portfolio companies. We have determined that all of our portfolio investments do not qualify for this exception, including the investment in the External Investment Manager. Therefore, our Investment Portfolio is carried on the consolidated balance sheet at fair value with any adjustments to fair value recognized as "Net Change in Unrealized Appreciation (Depreciation)" on the consolidated statements of operations until the


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investment is realized, usually upon exit, resulting in any gain or loss being recognized as a "Net Realized Gain (Loss)."


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        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. As of both JuneSeptember 30, 2016 and December 31, 2015, our Investment Portfolio valued at fair value represented approximately 95% and 96% of our total assets, respectively.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.—Valuation of the Investment Portfolio" in the notes to consolidated financial statements 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.

        Our Board of Directors has the final responsibility for overseeing, reviewing and approving, in good faith, our determination of the fair value for our Investment Portfolio and our valuation procedures, consistent with 1940 Act requirements. We believe our Investment Portfolio as of JuneSeptember 30, 2016 and December 31, 2015 approximates fair value as of those dates based on the markets in which we operate and other conditions in existence on those reporting dates.

        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. In accordance with our valuation policies, 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 all of its debt or other obligations, 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 or other obligations, or if a loan or debt security is fully impaired, sold or written off, we remove it from non-accrual status.

        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


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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 deferred and accreted into interest income over the life of the financing.


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        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 below), 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 three months ended JuneSeptember 30, 2016 and 2015, (i) approximately 4.1%4.0% and 1.8%2.2%, respectively, of our total investment income was attributable to PIK interest income not paid currently in cash and (ii) approximately 0.7%1.8% and 0.9%1.2%, respectively, of our total investment income was attributable to cumulative dividend income not paid currently in cash. For the sixnine months ended JuneSeptember 30, 2016 and 2015, (i) approximately 3.6%3.7% and 2.0%2.1%, respectively, of our total investment income was attributable to PIK interest income not paid currently in cash and (ii) approximately 0.8%1.1% and 0.9%1.0%, respectively, of our total investment income was attributable to cumulative dividend income not paid currently in cash.

        We account for our share-based compensation plans using the fair value method, as prescribed by ASC 718,Compensation—Stock Compensation. Accordingly, for restricted stock awards, we measure the grant date fair value based upon the market price of our common stock on the date of the grant and amortize the fair value of the awards as share-based compensation expense over the requisite service period, which is generally the vesting term.

        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, 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 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 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.

        The Taxable Subsidiaries hold certain portfolio investments for us. The Taxable Subsidiaries permit us to hold equity investments in portfolio companies which are "pass-through" entities for tax purposes and to continue to comply with the "source-income" requirements contained in the RIC tax provisions


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of the Code. The Taxable Subsidiaries are consolidated with us for U.S. GAAP financial reporting purposes, and the portfolio investments held by the Taxable Subsidiaries are included in our 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


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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. This income tax expense, or benefit, if any, and the related tax assets and liabilities, are reflected in our consolidated financial statements.

        MSCP is included in our consolidated financial statements for financial reporting purposes. For tax purposes, MSCP has elected to be treated as a taxable entity, and therefore is not consolidated with MSCC for income tax purposes and 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 taxable income, or loss, of MSCP may differ from its book income, or loss, due to temporary book and tax timing differences and permanent differences. This income tax expense, or benefit, if any, and the related tax assets and liabilities, are reflected in our consolidated financial statements.

        The Taxable Subsidiaries and MSCP 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 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 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.

        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.

INVESTMENT PORTFOLIO COMPOSITION

        Our LMM portfolio investments primarily consist of secured debt, equity warrants and direct equity investments in privately held, LMM companies based in the United States. Our LMM portfolio companies generally have annual revenues between $10 million and $150 million, and our LMM investments generally range in size from $5 million to $50 million. The LMM debt investments are typically secured by either a first or second priority lien on the assets of the portfolio company, generally bear interest at fixed rates, and generally have a term of between five and seven years from the original investment date. In most LMM portfolio companies, we receive nominally priced equity warrants and/or make direct equity investments in connection with a debt investment.

        Our Middle Market portfolio investments primarily consist of direct investments in or secondary purchases of interest-bearing debt securities in privately held companies based in the United States that are generally larger in size than the companies included in our LMM portfolio. Our Middle Market portfolio companies generally have annual revenues between $150 million and $1.5 billion, and our Middle Market investments generally range in size from $3 million to $15 million. Our Middle Market portfolio debt investments are generally secured by either a first or second 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.


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        Our Private Loan portfolio investments are primarily debt securities in privately held companies which have been originated through strategic relationships with other investment funds on a collaborative basis, and are often referred to in the debt markets as "club deals." Private Loan investments are typically similar in size, structure, terms and conditions to investments we hold in our LMM portfolio and Middle Market portfolio. Our Private Loan portfolio debt investments are generally secured by either a first or second 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.


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        Our Other Portfolio investments primarily consist of investments which are not consistent with the typical profiles for LMM, Middle Market and Private Loan portfolio investments, including investments which may be managed by third parties. In the 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.

        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. 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 HMS Income. Through this agreement, we share employees with the External Investment Manager, including their related infrastructure, business relationships, management expertise and capital raising capabilities. In the first quarter of 2014, we began allocating costs to the External Investment Manager pursuant to the sharing agreement. Our total expenses for the three months ended JuneSeptember 30, 2016 and 2015 are net of expenses allocated to the External Investment Manager of $1.4$1.2 million and $1.2$1.1 million, respectively. Our total expenses for the sixnine months ended JuneSeptember 30, 2016 and 2015 are net of expenses allocated to the External Investment Manager of $2.5$3.7 million and $2.0$3.1 million, respectively. 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. 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 dividend income from the External Investment Manager. For the three months ended JuneSeptember 30, 2016 and 2015, the total contribution to our net investment income was $2.0 million and $1.7$1.8 million, respectively. For the sixnine months ended JuneSeptember 30, 2016 and 2015, the total contribution to our net investment income was $3.8$5.8 million and $2.9$4.7 million, respectively.

        The following tables summarize the composition of our total combined LMM portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments at cost and fair value by type of investment as a percentage of the total combined LMM portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments as of JuneSeptember 30, 2016 and December 31, 2015 (this information excludes the Other Portfolio investments and the External Investment Manager).

Cost:
 June 30,
2016
 December 31,
2015
 

First lien debt

  74.5%  75.8% 

Equity

  14.3%  13.5% 

Second lien debt

  9.2%  8.7% 

Equity warrants

  1.0%  0.9% 

Other

  1.0%  1.1% 

  100.0%  100.0% 


Fair Value:
 June 30,
2016
 December 31,
2015
 
Cost:
 September 30,
2016
 December 31,
2015
 

First lien debt

 66.6% 66.1%  75.6% 75.8% 

Equity

 23.4% 24.9%  13.9% 13.5% 

Second lien debt

 8.4% 7.7%  8.5% 8.7% 

Equity warrants

 0.7% 0.6%  1.0% 0.9% 

Other

 0.9% 0.7%  1.0% 1.1% 

 100.0% 100.0%  100.0% 100.0% 

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Fair Value:
 September 30,
2016
 December 31,
2015
 

First lien debt

  68.3%  66.1% 

Equity

  22.0%  24.9% 

Second lien debt

  8.0%  7.7% 

Equity warrants

  0.8%  0.6% 

Other

  0.9%  0.7% 

  100.0%  100.0% 

        Our LMM portfolio investments, Middle Market portfolio investments and Private Loan 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 "Risk Factors—Risks Related to Our Investments" contained in our Form 10-K for the fiscal year ended December 31, 2015 and "Risk Factors" below for a more complete discussion of the risks involved with investing in our Investment Portfolio.

PORTFOLIO ASSET QUALITY

        We utilize an internally developed investment rating system to rate the performance of each LMM portfolio company and to monitor our expected level of returns on each of our LMM investments in relation to our expectations for the portfolio company. The investment rating system takes into consideration various factors, including 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.


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        The following table shows the distribution of our LMM portfolio investments on the 1 to 5 investment rating scale at fair value as of JuneSeptember 30, 2016 and December 31, 2015:


 As of June 30, 2016 As of December 31, 2015  As of September 30, 2016 As of December 31, 2015 
Investment Rating
 Investments
at Fair Value
 Percentage of
Total Portfolio
 Investments
at Fair Value
 Percentage of
Total Portfolio
  Investments
at Fair Value
 Percentage of
Total Portfolio
 Investments
at Fair Value
 Percentage of
Total Portfolio
 

  
 (dollars in thousands)
  
   
 (dollars in thousands)
  
 

1

 $263,019 30.3% $332,606 38.6%  $247,888 29.8% $332,606 38.6% 

2

 219,997 25.4% 143,268 16.6%  192,089 23.2% 143,268 16.6% 

3

 275,126 31.8% 277,160 32.1%  294,020 35.4% 277,160 32.1% 

4

 100,569 11.6% 107,926 12.5%  91,061 11.0% 107,926 12.5% 

5

 7,395 0.9% 1,750 0.2%  4,634 0.6% 1,750 0.2% 

Total

 $866,106 100.0% $862,710 100.0%  $829,692 100.0% $862,710 100.0% 

        Based upon our investment rating system, the weighted-average rating of our LMM portfolio was approximately 2.3 as of JuneSeptember 30, 2016 and 2.2 as of December 31, 2015.

        As of JuneSeptember 30, 2016, our total Investment Portfolio had eightfive investments on non-accrual status, which comprised approximately 0.5%0.4% of its fair value and 3.7%2.8% of its cost. As of December 31, 2015,


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our total Investment Portfolio had six investments on non-accrual status, which comprised approximately 0.4% of its fair value and 3.7% of its cost.

        The operating results of our portfolio companies are impacted by changes in the broader fundamentals of the United States economy. In the event that 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 and to an increase in defaults.defaults on our debt investments and to difficulty in maintaining historical dividend payment rates on our equity investments. Consequently, we can provide no assurance that the performance of certain portfolio companies will not be negatively impacted by economic cycles or other conditions, which could also have a negative impact on our future results.

DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS

 
 Three Months Ended
June 30,
 Net Change 
 
 2016 2015 Amount % 
 
 (dollars in thousands)
 

Total investment income

 $42,902 $41,308 $1,594  4% 

Total expenses

  (15,254) (14,107) (1,147) 8% 

Net investment income

  27,648  27,201  447  2% 

Net realized gain (loss) from investments

  15,457  (5,573) 21,030    

Net change in net unrealized appreciation (depreciation) from:

             

Portfolio investments

  (10,585) 15,901  (26,486)   

SBIC debentures and marketable securities and idle funds

  164  (203) 367    

Total net change in net unrealized appreciation (depreciation)

  (10,421) 15,698  (26,119)   

Income tax benefit (provision)

  (1,773) 3,476  (5,249)   

Net increase in net assets resulting from operations

 $30,911 $40,802 $(9,891) –24% 


 
 Three Months Ended
June 30,
 Net Change 
 
 2016 2015 Amount % 
 
 (dollars in thousands, except per share amounts)
 

Net investment income

 $27,648 $27,201 $447  2% 

Share-based compensation expense

  2,251  1,679  572  34% 

Distributable net investment income(a)

 $29,899 $28,880 $1,019  4% 

Distributable net investment income per share—Basic and diluted(a)

 $0.58 $0.58 $  0% 

(a)
Distributable net investment income is net investment income as determined in accordance with U.S. GAAP, excluding the impact of share-based compensation expense which is non-cash in nature. We believe presenting distributable net investment income and related per share amounts is useful and appropriate supplemental disclosure of information for analyzing our financial performance since share-based compensation does not require settlement in cash. However, distributable net investment income is a non-U.S. GAAP measure and should not be considered as a replacement to net investment income and other earnings measures presented in accordance with U.S. GAAP. Instead, distributable net investment income should be reviewed only in connection
 
 Three Months Ended
September 30,
 Net Change 
 
 2016 2015 Amount % 
 
 (dollars in thousands)
 

Total investment income

 $46,599 $42,608 $3,991  9% 

Total expenses

  (16,042) (14,747) (1,295) 9% 

Net investment income

  30,557  27,861  2,696  10% 

Net realized gain (loss) from investments

  4,286  (1,343) 5,629    

Net change in net unrealized appreciation (depreciation) from:

             

Portfolio investments

  8,376  (8,389) 16,765    

SBIC debentures and marketable securities and idle funds

  (566) (698) 132    

Total net change in net unrealized appreciation (depreciation)

  7,810  (9,087) 16,897    

Income tax benefit

  528  3,237  (2,709)   

Net increase in net assets resulting from operations

 $43,181 $20,668 $22,513  109% 

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        For the three months ended June 30, 2016, total investment income was $42.9 million, a 4% increase over the $41.3 million of total investment income for the corresponding period of 2015. This comparable period increase was principally attributable to (i) a $0.6 million increase in interest income primarily related to higher average levels of portfolio debt investments and (ii) a $2.5 million increase in dividend income from Investment Portfolio equity investments, partially offset by a $1.3 million decrease in fee income. The $1.6 million increase in total investment income in the three months ended June 30, 2016 includes the impact of a decrease of $1.2 million primarily related to lower accelerated prepayment and repricing activity for certain Investment Portfolio debt investments when compared to the same period in 2015.

        For the three months ended June 30, 2016, total expenses increased to $15.3 million from $14.1 million for the corresponding period of 2015. This comparable period increase in operating expenses was principally attributable to (i) a $0.6 million increase in interest expense, primarily due to an increase in interest expense on the Credit Facility generally due to the higher average balance outstanding in the three months ended June 30, 2016 when compared to the same period in the prior year, (ii) a $0.6 million increase in share-based compensation expense and (iii) a $0.2 million increase in general and administrative expenses and compensation expense, with these increases partially offset by a $0.2 million increase in the expenses allocated to the External Investment Manager (see further discussion in "Overview"), in each case when compared to the same period in the prior year. For each of the three months ended June 30, 2016 and 2015, the ratio of our total operating expenses, excluding interest expense, as a percentage of our quarterly average total assets was 1.4% on an annualized basis.

        Net investment income for the three months ended June 30, 2016 was $27.6 million, or a 2% increase, compared to net investment income of $27.2 million for the corresponding period of 2015. The increase in net investment income was principally attributable to the increase in total investment income, partially offset by higher operating expenses as discussed above.

        For the three months ended June 30, 2016, distributable net investment income increased 4% to $29.9 million, or $0.58 per share, compared with $28.9 million, or $0.58 per share, in the corresponding period of 2015. The increase in distributable net investment income was primarily due to the higher level of total investment income, partially offset by higher operating expenses as discussed above. Distributable net investment income on a per share basis for the three months ended June 30, 2016 reflects (i) a decrease of approximately $0.02 per share from the comparable period in 2015 attributable to the net decrease in the comparable levels of accelerated prepayment and repricing activity for certain Investment Portfolio debt investments and (ii) a greater number of average shares outstanding compared to the corresponding period in 2015 primarily due to shares issued through the ATM Program (as defined in "—Liquidity and Capital Resources—Capital Resources" below) and shares issued pursuant to our restricted stock plan and dividend reinvestment plan.


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        The net increase in net assets resulting from operations during the three months ended June 30, 2016 was $30.9 million, or $0.60 per share, compared with $40.8 million, or $0.82 per share, during the three months ended June 30, 2015. This $9.9 million decrease from the same period in the prior year period was primarily the result of (i) a $26.1 million decrease in net change in unrealized appreciation (depreciation) to net unrealized depreciation of $10.4 million for the three months ended June 30, 2016 and (ii) a $5.2 million decrease in the income tax benefit (provision) to a $1.8 million income tax provision for the three months ended June 30, 2016, partially offset by (i) a $0.4 million increase in net investment income as discussed above and (ii) a $21.0 million increase in the net realized gain (loss) from investments from a net realized loss of $5.6 million during the three months ended June 30, 2015 to a net realized gain of $15.5 million for the three months ended June 30, 2016. The net realized gain of $15.5 million for the three months ended June 30, 2016 was primarily the result of (i) the net realized gain on the exit of a LMM investment totaling $28.7 million and (ii) the net realized gain of $0.3 million due to activity in our Other Portfolio, partially offset by (i) the net realized loss of $4.7 million on the exit of two Middle Market investments, (ii) the net realized loss of $6.5 million relating to the restructure of a Middle Market investment and (iii) the net realized loss of $2.2 million on the exit of two Private Loan investments.

        The following table provides a summary of the total unrealized depreciation of $10.4 million for the three months ended June 30, 2016:

 
 Three Months Ended June 30, 2016 
 
 LMM(a) Middle
Market
 Private
Loan
 Other(b) Total 
 
 (dollars in millions)
 

Accounting reversals of net unrealized (appreciation) depreciation recognized in prior periods due to net realized gains/losses recognized during period

 $(28.4)$13.2 $2.2 $(0.2)$(13.2)

Net unrealized appreciation (depreciation) relating to portfolio investments

  1.8  4.1  (2.6) (0.7) 2.6 

Total net change in unrealized appreciation (depreciation) relating to portfolio investments

 $(26.6)$17.3 $(0.4)$(0.9)$(10.6)

Net unrealized appreciation relating to marketable securities

              0.1 

Unrealized appreciation relating to SBIC debentures(c)

              0.1 

Total net change in unrealized appreciation (depreciation)

             $(10.4)

(a)
LMM includes unrealized appreciation on 22 LMM portfolio investments and unrealized depreciation on 14 LMM portfolio investments.

(b)
Other includes $0.2 million of net unrealized appreciation relating to the Other Portfolio, offset by $0.9 million of unrealized depreciation relating to the External Investment Manager.

(c)
Relates to unrealized appreciation on the SBIC debentures issued by our wholly-owned subsidiary MSC II which are accounted for on a fair value basis.

        The income tax provision for the three months ended June 30, 2016 of $1.8 million principally consisted of (i) a $1.0 million accrual for excise tax on our estimated undistributed taxable income, (ii) a deferred tax provision of $0.7 million, which is primarily the result of the net activity relating to our portfolio investments held in our Taxable Subsidiaries, including changes in net operating loss carryforwards, changes in net unrealized appreciation/depreciation and other temporary book tax differences and (iii) other current tax expense of $0.1 million related to accruals for U.S. federal and state income taxes.


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 Six Months Ended
June 30,
 Net Change 
 
 2016 2015 Amount % 
 
 (dollars in thousands)
 

Total investment income

 $84,909 $78,487 $6,422  8% 

Total expenses

  (30,096) (27,795) (2,301) 8% 

Net investment income

  54,813  50,692  4,121  8% 

Net realized gain (loss) from investments

  29,060  (7,693) 36,753    

Net change in net unrealized appreciation (depreciation) from:

             

Portfolio investments

  (38,114) 30,105  (68,219)   

SBIC debentures and marketable securities and idle funds

  1,475  (645) 2,120    

Total net change in net unrealized appreciation (depreciation)

  (36,639) 29,460  (66,099)   

Income tax benefit

  490  3,768  (3,278)   

Net increase in net assets resulting from operations

 $47,724 $76,227 $(28,503) (37%)



 Six Months Ended
June 30,
 Net Change  Three Months Ended
September 30,
 Net Change 

 2016 2015 Amount %  2016 2015 Amount % 

 (dollars in thousands, except per share amounts)
  (dollars in thousands, except per share
amounts)

 

Net investment income

 $54,813 $50,692 $4,121 8%  $30,557 $27,861 $2,696 10% 

Share-based compensation expense

 3,840 2,942 898 31%  2,137 1,651 486 29% 

Distributable net investment income(a)

 $58,653 $53,634 $5,019 9%  $32,694 $29,512 $3,182 11% 

Distributable net investment income per share—Basic and diluted(a)

 $1.15 $1.12 $0.03 3%  $0.62 $0.59 $0.03 5% 

(a)
Distributable net investment income is net investment income as determined in accordance with U.S. GAAP, excluding the impact of share-based compensation expense which is non-cash in nature. We believe presenting distributable net investment income and related per share amounts is useful and appropriate supplemental disclosure of information for analyzing our financial performance since share-based compensation does not require settlement in cash. However, distributable net investment income is a non-U.S. GAAP measure and should not be considered as a replacement to net investment income and other earnings measures presented in accordance with U.S. GAAP. Instead, distributable net investment income 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 presented in the table above.

        For the sixthree months ended JuneSeptember 30, 2016, total investment income was $84.9$46.6 million, an 8%a 9% increase over the $78.5$42.6 million of total investment income for the corresponding period of 2015. This comparable period increase was principally attributable to (i) a $2.8$1.4 million increase in interest income primarily related to higher average levels of portfolio debt investments and (ii) a $5.0$2.8 million increase in dividend income from Investment Portfolio equity investments partially offset by (i) a $0.8 million decrease in fee income and (ii) a $0.4 million decrease in investment income from Marketable securities and idle funds investments. The $6.4$4.0 million increase in total investment income in the six


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three months ended JuneSeptember 30, 2016 includes the impact of a decreasean increase of $1.2$0.3 million primarily related to lowerhigher accelerated prepayment and repricing activity for certain Investment Portfolio debt investments when compared to the same period in 2015 and an increase of $1.7 million related to dividend income activity from portfolio companies that is considered to be less consistent on a recurring basis or non-recurring during the period when compared to the same period in 2015.

        For the sixthree months ended JuneSeptember 30, 2016, total expenses increased to $30.1$16.0 million from $27.8$14.7 million for the corresponding period of 2015. This comparable period increase in operating expenses was principally attributable to (i) a $1.0$0.6 million increase in compensation expense related to increases in the number of personnel, base compensation levels and incentive compensation accruals, (ii) a $0.5 million increase in share-based compensation expense and (iii) a $0.3 million increase in interest expense, primarily due to an increase in interest expense on the Credit Facility generally due to the higher average balance outstanding in the sixthree months ended JuneSeptember 30, 2016, when compared to the same period in the prior year, (ii) a $0.5 million increase in general and administrative expenses, (iii) a $0.4 million increase in compensation expense related primarily to increases in the number of personnel and base compensation levels and (iv) a $0.9 million increase in share-based compensation expense, with these increases partially offset by a $0.5$0.1 million increase in the expenses allocated to the External Investment Manager (see further discussion in "Overview"), in each case when compared to the same period in the prior year. For each of the sixthree months ended JuneSeptember 30, 2016, and 2015, the ratio of our total operating expenses, excluding interest expense, as a percentage of our quarterly average total assets was 1.4%1.5% on an annualized basis.basis, compared to 1.3% on an annualized basis for the three months ended September 30, 2015 and 1.4% for the year ended December 31, 2015.


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        Net investment income for the sixthree months ended JuneSeptember 30, 2016 was $54.8$30.6 million, or an 8%a 10% increase, compared to net investment income of $50.7$27.9 million for the corresponding period of 2015. The increase in net investment income was principally attributable to the increase in total investment income, partially offset by higher operating expenses as discussed above.

        For the sixthree months ended JuneSeptember 30, 2016, distributable net investment income increased 9%11% to $58.7$32.7 million, or $1.15$0.62 per share, compared with $53.6$29.5 million, or $1.12$0.59 per share, in the corresponding period of 2015. The increase in distributable net investment income was primarily due to the higher level of total investment income, partially offset by higher operating expenses as discussed above. Distributable net investment income on a per share basis for the three months ended September 30, 2016 reflects (i) an increase of approximately $0.01 per share from the comparable period in 2015 attributable to the net increase in the comparable levels of accelerated prepayment and repricing activity for certain Investment Portfolio debt investments, (ii) an increase of approximately $0.03 per share from the comparable period in 2015 attributable to the increase in dividend income that is considered to be less consistent on a recurring basis or non-recurring and (iii) a greater number of average shares outstanding compared to the corresponding period in 2015 primarily due to shares issued through the ATM Program (as defined in "—Liquidity and Capital Resources—Capital Resources" below) and shares issued pursuant to our restricted stock plan and dividend reinvestment plan.

        The net increase in net assets resulting from operations during the three months ended September 30, 2016 was $43.2 million, or $0.82 per share, compared with $20.7 million, or $0.41 per share, during the three months ended September 30, 2015. This $22.5 million increase from the same period in the prior year period was primarily the result of (i) a $16.9 million increase in net change in unrealized appreciation (depreciation) from net unrealized depreciation of $9.1 million for the three months ended September 30, 2015 to net unrealized appreciation of $7.8 million for the three months ended September 30, 2016, (ii) a $5.6 million increase in the net realized gain (loss) from investments from a net realized loss of $1.3 million during the three months ended September 30, 2015 to a net realized gain of $4.3 million for the three months ended September 30, 2016 and (iii) a $2.7 million increase in net investment income as discussed above, partially offset by a $2.7 million decrease in the income tax benefit for the three months ended September 30, 2016. The net realized gain of $4.3 million for the three months ended September 30, 2016 was primarily the result of (i) the net realized gain on the exit of three LMM investments totaling $13.2 million and (ii) the net realized gain of $1.2 million due to activity in our Other Portfolio, partially offset by (i) the realized loss of $7.3 million on the exit of a Private Loan investment and (ii) the realized loss of $2.6 million related to the restructuring of a Middle Market investment.


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        The following table provides a summary of the total net unrealized appreciation of $7.8 million for the three months ended September 30, 2016:

 
 Three Months Ended September 30, 2016 
 
 LMM(a) Middle Market Private Loan Other(b) Total 
 
 (dollars in millions)
 

Accounting reversals of net unrealized (appreciation) depreciation recognized in prior periods due to net realized (gains)/losses recognized during period

 $(10.2)$2.6 $7.3 $(1.2)$(1.5)

Net unrealized appreciation (depreciation) relating to portfolio investments

  (3.3) 6.7  0.5  6.0  9.9 

Total net change in unrealized appreciation (depreciation) relating to portfolio investments

 $(13.5)$9.3 $7.8 $4.8 $8.4 

Net unrealized appreciation relating to marketable securities

              0.2 

Unrealized depreciation relating to SBIC debentures(c)

              (0.8)

Total net change in unrealized appreciation (depreciation)

             $7.8 

(a)
LMM includes unrealized appreciation on 20 LMM portfolio investments and unrealized depreciation on 18 LMM portfolio investments.

(b)
Other includes $3.2 million of unrealized appreciation relating to the External Investment Manager and $2.8 million of net unrealized appreciation relating to the Other Portfolio.

(c)
Relates to unrealized appreciation on the SBIC debentures issued by our wholly-owned subsidiary MSC II which are accounted for on a fair value basis.

        The income tax benefit for the three months ended September 30, 2016 of $0.5 million consisted of a deferred tax benefit of $1.4 million, which is primarily the result of the net activity relating to our portfolio investments held in our Taxable Subsidiaries, including changes in loss carryforwards, changes in net unrealized appreciation/depreciation and other temporary book-tax differences, partially offset by $0.9 million of other current tax expense primarily related to an accrual for excise tax on our estimated undistributed taxable income.


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 Nine Months Ended
September 30,
 Net Change 
 
 2016 2015 Amount % 
 
 (dollars in thousands)
 

Total investment income

 $131,508 $121,096 $10,412  9% 

Total expenses

  (46,137) (42,540) (3,597) 8% 

Net investment income

  85,371  78,556  6,815  9% 

Net realized gain (loss) from investments

  33,347  (9,037) 42,384    

Net change in net unrealized appreciation (depreciation) from:

             

Portfolio investments

  (29,738) 21,716  (51,454)   

SBIC debentures and marketable securities and idle funds

  909  (1,344) 2,253    

Total net change in net unrealized appreciation (depreciation)

  (28,829) 20,372  (49,201)   

Income tax benefit

  1,018  7,004  (5,986)   

Net increase in net assets resulting from operations

 $90,907 $96,895 $(5,988) (6)%


 
 Nine Months Ended
September 30,
 Net Change 
 
 2016 2015 Amount % 
 
 (dollars in thousands, except per share
amounts)

 

Net investment income

 $85,371 $78,556 $6,815  9% 

Share-based compensation expense

  5,977  4,592  1,385  30% 

Distributable net investment income(a)

 $91,348 $83,148 $8,200  10% 

Distributable net investment income per share—Basic and diluted(a)

 $1.77 $1.71 $0.06  4% 

(a)
Distributable net investment income is net investment income as determined in accordance with U.S. GAAP, excluding the impact of share-based compensation expense which is non-cash in nature. We believe presenting distributable net investment income and related per share amounts is useful and appropriate supplemental disclosure of information for analyzing our financial performance since share-based compensation does not require settlement in cash. However, distributable net investment income is a non-U.S. GAAP measure and should not be considered as a replacement to net investment income and other earnings measures presented in accordance with U.S. GAAP. Instead, distributable net investment income 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 presented in the table above.

        For the nine months ended September 30, 2016, total investment income was $131.5 million, a 9% increase over the $121.1 million of total investment income for the corresponding period of 2015. This comparable period increase was principally attributable to (i) a $4.2 million increase in interest income primarily related to higher average levels of portfolio debt investments and (ii) a $7.7 million increase in dividend income from Investment Portfolio equity investments, partially offset by (i) a $0.8 million decrease in fee income and (ii) a $0.7 million decrease in investment income from Marketable securities and idle funds investments. The $10.4 million increase in total investment income in the nine


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months ended September 30, 2016 includes an increase of $1.7 million related to dividend income activity from portfolio companies that is considered to be less consistent on a recurring basis or non-recurring during the period when compared to the same period in 2015 and the impact of a decrease of $0.9 million primarily related to lower accelerated prepayment and repricing activity for certain Investment Portfolio debt investments when compared to the same period in 2015.

        For the nine months ended September 30, 2016, total expenses increased to $46.1 million from $42.5 million for the corresponding period of 2015. This comparable period increase in operating expenses was principally attributable to (i) a $1.4 million increase in share-based compensation expense, (ii) a $1.3 million increase in interest expense, primarily due to an increase in interest expense on the Credit Facility generally due to the higher average balance outstanding in the nine months ended September 30, 2016, (iii) a $1.0 million increase in compensation expense related to increases in the number of personnel, base compensation levels and incentive compensation accruals and (iv) a $0.5 million increase in general and administrative expenses, with these increases partially offset by a $0.6 million increase in the expenses allocated to the External Investment Manager, in each case when compared to the same period in the prior year. For the nine months ended September 30, 2016, the ratio of our total operating expenses, excluding interest expense, as a percentage of our quarterly average total assets was 1.4% on an annualized basis, which is consistent with the ratio on an annualized basis for the nine months ended September 30, 2015 and for the year ended December 31, 2015.

        Net investment income for the nine months ended September 30, 2016 was $85.4 million, or a 9% increase, compared to net investment income of $78.6 million for the corresponding period of 2015. The increase in net investment income was principally attributable to the increase in total investment income, partially offset by higher operating expenses as discussed above.

        For the nine months ended September 30, 2016, distributable net investment income increased 10% to $91.3 million, or $1.77 per share, compared with $83.1 million, or $1.71 per share, in the corresponding period of 2015. The increase in distributable net investment income was primarily due to the higher level of total investment income, partially offset by higher operating expenses both as discussed above. Distributable net investment income on a per share basis for the sixnine months ended JuneSeptember 30, 2016 reflects (i) a decrease of approximately $0.03$0.02 per share from the comparable period in 2015 attributable to the net decrease in the comparable levels of accelerated prepayment and repricing activity for certain Investment Portfolio debt investments, (ii) an increase of approximately $0.03 per share from the comparable period in 2015 attributable to the increase in dividend income that is considered to be less consistent on a recurring basis or non-recurring and (ii)(iii) a greater number of average shares outstanding compared to the corresponding period in 2015 primarily due to the March 2015 equity offering, shares issued through the ATM Program and shares issued pursuant to our restricted stock plan and dividend reinvestment plan.

        The net increase in net assets resulting from operations during the sixnine months ended JuneSeptember 30, 2016 was $47.7$90.9 million, or $0.94$1.76 per share, compared with $76.2$96.9 million, or $1.59$1.99 per share, during the sixnine months ended JuneSeptember 30, 2015. This $28.5$6.0 million decrease from the same period in the prior year period was primarily the result of (i) a $66.1$49.2 million decrease in net change in unrealized appreciation (depreciation) from net unrealized appreciation of $20.4 million for the nine


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months ended September 30, 2015 to net unrealized depreciation of $36.6$28.8 million for the sixnine months ended JuneSeptember 30, 2016 and (ii) a $3.3$6.0 million decrease in the income tax benefit from the same period in the prior year, partially offset by (i) a $4.1$6.8 million increase in net investment income as discussed above and (ii) a $36.8$42.4 million increase in the net realized gain (loss) from investments from a net realized loss of $7.7$9.0 million during the sixnine months ended JuneSeptember 30, 2015 to a net realized gain of $29.1$33.3 million for the sixnine months ended JuneSeptember 30, 2016. The net realized gain of $29.1$33.3 million for the sixnine months ended JuneSeptember 30, 2016 was primarily the result of (i) the net realized gain of $43.1$56.3 million on the exit twofive LMM


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investments and (ii) the net realized gain of $1.6$2.8 million due to activity in our Other Portfolio, partially offset by (i) the net realized loss of $4.7$9.6 million on the exit of two Middle Marketthree Private Loan investments, (ii) the net realized loss of $7.4$10.0 million relatingrelated to the restructurerestructuring of twothree Middle Market investments, (iii) the net realized loss of $2.2$4.7 million on the exit of two Private LoanMiddle Market investments and (iv) the net realized loss of $1.6 million on the exit of a Marketable securities and idle funds investment.

        The following table provides a summary of the total net unrealized depreciation of $36.6$28.8 million for the sixnine months ended JuneSeptember 30, 2016:


 Six Months Ended June 30, 2016  Nine Months Ended September 30, 2016 

 LMM(a) MM PL Other(b) Total  LMM(a) Middle Market Private Loan Other(b) Total 

 (dollars in millions)
  (dollars in millions)
 

Accounting reversals of net unrealized (appreciation) depreciation recognized in prior periods due to net realized gains/losses recognized during period

 $(42.8)$16.2 $2.2 $(1.5)$(25.9)

Accounting reversals of net unrealized (appreciation) depreciation recognized in prior periods due to net realized (gains)/losses recognized during period

 $(52.9)$18.7 $9.5 $(2.7)$(27.4)

Net change in unrealized appreciation (depreciation) relating to portfolio investments

 5.3 (5.2) (5.8) (6.5) (12.2) 1.9 1.5 (5.3) (0.4) (2.3)

Total net change in unrealized appreciation (depreciation) relating to portfolio investments

 $(37.5)$11.0 $(3.6)$(8.0)$(38.1) $(51.0)$20.2 $4.2 $(3.1)$(29.7)

Net change in unrealized appreciation relating to marketable securities

         1.5          1.7 

Unrealized depreciation relating to SBIC debentures(c)

              ��     (0.8)

Total net change in unrealized appreciation (depreciation)

         $(36.6)         $(28.8)

(a)
LMM includes unrealized appreciation on 2829 LMM portfolio investments and unrealized depreciation on 2226 LMM portfolio investments.

(b)
Other includes $6.1$3.3 million of net unrealized depreciation relating to the Other Portfolio and $0.4offset by $2.9 million of unrealized depreciationappreciation relating to the External Investment Manager.

(c)
Relates to unrealized depreciation on the SBIC debentures held by MSC II which are accounted for on a fair value basis.

        The income tax benefit for the sixnine months ended JuneSeptember 30, 2016 of $0.5$1.0 million principally consisted of a deferred tax benefit of $2.0$3.4 million, which is primarily the result of the net activity relating to our portfolio investments held in our Taxable Subsidiaries, including changes in net operating loss carryforwards, changes in net unrealized appreciation/depreciation and other temporary book taxbook-tax differences, partially offset by other current tax expense related to (i) a $1.1$2.1 million accrual for excise


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tax on our estimated undistributed taxable income and (ii) other current tax expense of $0.4$0.3 million related to accruals for U.S. federal and state income taxes.

        For the sixnine months ended JuneSeptember 30, 2016, we experienced a net decreaseincrease in cash and cash equivalents in the amount of $1.6$11.5 million, which is the net result of $35.4$9.4 million of cash used forprovided by our operating activities and $33.7$2.0 million of cash provided by financing activities.

        During the period, we used $35.4generated $9.4 million of cash forfrom our operating activities, which resulted primarily from (i) cash flows we generated from the operating profits earned through our operating activities totaling $52.2$79.7 million, which is our $58.7$91.3 million of distributable net investment income, excluding the non-cash effects of the accretion of unearned income of $4.2$7.1 million, payment-in-kind


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interest income of $3.0$4.9 million, cumulative dividends of $0.6$1.5 million and the amortization expense for deferred financing costs of $1.3$1.9 million, (ii) cash uses totaling $306.5$423.5 million which primarily resulted from (a) the funding of new portfolio company investments and settlement of accruals for portfolio investments existing as of December 31, 2015, which togethercollectively total $303.0$420.0 million, (b) $3.0 million related to decreases in payables and accruals and (d) increases in other assets(c) $0.5 million from the purchase of $0.5 millionMarketable securities and idle funds investments and (iii) cash proceeds totaling $218.9$353.2 million from (a) $216.8$347.9 million in cash proceeds from the sales and repayments of debt investments and sales of and return on capital of equity investments and (b) $2.1$4.3 million of cash proceeds from the sale of Marketable securities and idle funds investments.investments and (c) decreases in other assets of $1.0 million.

        During the sixnine months ended JuneSeptember 30, 2016, $33.7$2.0 million in cash was provided by financing activities, which principally consisted of (i) $59.0$64.3 million in net cash proceeds from the ATM Program (described below), (ii) $22.0 million in net cash proceeds from the Credit Facility and (ii) $38.7(iii) $6.0 million in net cash proceeds from the ATM Program,issuance of SBIC debentures, partially offset by (iii) $61.2(i) $86.7 million in cash dividends paid to stockholders, and (iv)(ii) $2.6 million for purchases of vested restricted stock from employees to satisfy their tax withholding requirements upon the vesting of such restricted stock and (v) $0.2(iii) $1.0 million for payment of deferred loan costs, SBIC debenture fees and other costs.

        As of JuneSeptember 30, 2016, we had $18.7$31.8 million in cash and cash equivalents $1.6 million in Marketable securities and idle funds investments and $205.0$242.0 million of unused capacity under the Credit Facility, which we maintain to support our investment and operating activities. As of JuneSeptember 30, 2016, our net asset value totaled $1,099.1$1,144.4 million, or $21.11$21.62 per share.

        The Credit Facility, which provides additional liquidity to support our investment and operational activities, includes total commitments of $555.0 million from a diversified group of fourteen lenders and matures in September 2020. The Credit Facility also contains an accordion feature which allows us to increase the total commitments under the facility to up to $750.0 million from new and existing lenders on the same terms and conditions as the existing commitments.

        Borrowings under the Credit Facility bear interest, subject to our election, on a per annum basis at a rate equal to the applicable LIBOR rate (0.46%(0.53% as of JuneSeptember 30, 2016) plus (i) 1.875% (or the applicable base rate (Prime Rate of 3.50% as of JuneSeptember 30, 2016) plus 0.875%) as long as we maintain an investment grade rating and meet certain agreed upon excess collateral and maximum leverage requirements, (ii) 2.0% (or the applicable base rate plus 1.0%) if we maintain an investment grade rating but, do not meet certain excess collateral and maximum leverage requirements or (iii) 2.25% (or the applicable base rate plus 1.25%) if we do not maintain an investment grade rating. We pay unused commitment fees of 0.25% per annum on the unused lender commitments under the Credit Facility. The Credit Facility is secured by a first lien on the assets of MSCC and its subsidiaries,


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excluding the equity ownership or assets of the Funds and the External Investment Manager. The Credit Facility contains certain affirmative and negative covenants, including but not limited to: (i) maintaining a minimum availability of at least 10% of the borrowing base, (ii) maintaining an interest coverage ratio of at least 2.0 to 1.0, (iii) maintaining an asset coverage ratio of at least 1.5 to 1.0 and (iv) maintaining a minimum tangible net worth. The Credit Facility is provided on a revolving basis through its final maturity date in September 2020, and contains two, one-year extension options which could extend the final maturity by up to two years, subject to certain conditions, including lender approval. As of JuneSeptember 30, 2016, we had $350.0$313.0 million in borrowings outstanding under the Credit Facility, the interest rate on the Credit Facility was 2.3%2.4% and we were in compliance with all financial covenants of the Credit Facility.

        Due to each of the Funds' status as a licensed SBIC, we have the ability to issue, through the Funds, debentures guaranteed by the SBA at favorable interest rates and favorable terms and conditions. In addition, in December 2015, the 2016 omnibus spending bill approved by Congress and signed into law by the President increased the amount of SBA-guaranteed debentures that affiliated


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SBIC funds can have outstanding from $225.0 million to $350.0 million. This new legislation may allowallows us to issue additional SBIC debentures, subject to SBA approval, above the $225.0 million that we havehad outstanding as of June 30, 2016. We announced on March 29,prior to the legislation. In August 2016, that we were issuedreceived a "green light" or "go forth" letterlicense from the SBA inviting us to continue our application process to obtain a license to form and operate a third SBIC, subsidiarywhich at the time provided us with up to gain access toan additional $125.0 million of additional long-term, fixed interest rate debt capital through the additionalissuance of SBA-guaranteed debentures. During September 2016, we issued $6.0 million of SBIC debentures.debentures, leaving $119.0 million of remaining capacity. 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 semi-annually. 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. On JuneSeptember 30, 2016, through our twothree wholly owned SBICs, we had $225.0$231.0 million of outstanding SBIC debentures guaranteed by the SBA, which bear a weighted-average annual fixed interest rate of approximately 4.2%4.1%, paid semi-annually, and mature ten years from issuance. The first maturity related to our SBIC debentures does not occur until 2017, and the weighted-average remaining duration is approximately 5.15.0 years as of JuneSeptember 30, 2016.

        In April 2013, we issued $92.0 million, including the underwriters' full exercise of their over-allotment option, in aggregate principal amount of the 6.125% Notes. The 6.125% Notes are unsecured obligations and rank pari passu with our current and future unsecured indebtedness; senior to any of our future indebtedness that expressly provides it is subordinated to the 6.125% Notes; effectively subordinated to all of our existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness, including borrowings under our Credit Facility; and structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries, including without limitation, the indebtedness of the Funds. The 6.125% Notes mature on April 1, 2023, and may be redeemed in whole or in part at any time or from time to time at our option on or after April 1, 2018. We may from time to time repurchase 6.125% Notes in accordance with the 1940 Act and the rules promulgated thereunder. As of JuneSeptember 30, 2016, the outstanding balance of the 6.125% Notes was $90.7 million.

        The indenture governing the 6.125% Notes (the "6.125% Notes Indenture") contains certain covenants, including covenants requiring our compliance with (regardless of whether we are subject to) the asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a)(1) of the 1940 Act, as well as covenants requiring us to provide financial information to the holders of the 6.125% Notes and the Trustee if we cease to be subject to the reporting requirements of the Securities Exchange Act of 1934. These covenants are subject to limitations and exceptions that are described in the 6.125% Notes Indenture.


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        In November 2014, we issued $175.0 million in aggregate principal amount of the 4.50% Notes at an issue price of 99.53%. The 4.50% Notes are unsecured obligations and rank pari passu with our current and future unsecured indebtedness; senior to any of our future indebtedness that expressly provides it is subordinated to the 4.50% Notes; effectively subordinated to all of our existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness, including borrowings under our Credit Facility; and structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries, including without limitation, the indebtedness of the Funds. The 4.50% Notes mature on December 1, 2019, and may be redeemed in whole or in part at any time at our option subject to certain make wholemake-whole provisions. The 4.50% Notes bear interest at a rate of 4.50% per year payable semi-annually on June 1 and December 1 of each year, beginning June 1, 2015. We may from time to time repurchase 4.50% Notes in accordance with the 1940 Act and the rules promulgated thereunder. As of JuneSeptember 30, 2016, the outstanding balance of the 4.50% Notes was $175.0 million.

        The indenture governing the 4.50% Notes (the "4.50% Notes Indenture") contains certain covenants, including covenants requiring our compliance with (regardless of whether we are subject to) the asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a)(1) of the 1940 Act, as well as covenants requiring us to provide financial information to the holders of the 4.50% Notes and the Trustee if we cease to be subject to the reporting requirements of the Securities Exchange Act of 1934. These covenants are subject to limitations and exceptions that are described in the 4.50% Notes Indenture.


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        During March 2015, we completed a follow-on public equity offering of 4,370,000 shares of common stock, including the underwriters' full exercise of their option to purchase 570,000 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 us, of approximately $127.8 million.

        During November 2015, we commenced a program (the "ATM Program") with selling agents through which we can sell shares of our common stock by means of at-the-market offerings from time to time.time (the "ATM Program"). During the three months ended December 31, 2015, we sold 140,568 shares of our common stock at a weighted-average price of $31.98 per share and raised $4.5 million of gross proceeds under the ATM Program. Net proceeds were $4.3 million after commissions to the selling agents on shares sold and offering costs.

        During the sixnine months ended JuneSeptember 30, 2016, we sold 1,225,7571,996,793 shares of our common stock at a weighted-average price of $32.03$32.67 per share and raised $39.3$65.2 million of gross proceeds under the ATM Program. Net proceeds were $38.7$64.3 million after commissions to the selling agenetsagents on shares sold and offering costs. As of JuneSeptember 30, 2016, sales transactions representing 81,67530,804 shares had not settled and are not included in shares issued and outstanding on the face of the consolidated balance sheet, but are included in the weighted average shares outstanding on the consolidated statement of operations and in the shares used to calculate our net asset value per share. As of JuneSeptember 30, 2016, 1,133,675362,639 shares were available for sale under the ATM Program.

        We anticipate that we will continue to fund our investment activities through existing cash and cash equivalents, the liquidation of Marketable securities and idle funds investments, and a combination of future issuances of debt and equity capital. Our primary uses of funds will be investments in portfolio companies, operating expenses and cash distributions to holders of our common stock.

        We periodically invest excess cash balances into Marketable securities and idle funds investments. The primary investment objective of Marketable securities and idle funds investments is to generate incremental cash returns on excess cash balances prior to utilizing those funds for investment in our LMM, Middle Market and Private Loan portfolio investments. Marketable securities and idle funds investments generally consist of debt investments, independently rated debt investments, certificates of


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deposit with financial institutions, diversified bond funds and publicly traded debt and equity investments. The composition of Marketable securities and idle funds investments will vary in a given period based upon, among other things, changes in market conditions, the underlying fundamentals in our Marketable securities and idle funds investments, our outlook regarding future LMM, Middle Market and Private Loan portfolio investment needs, and any regulatory requirements applicable to us.

        If our common stock trades below our net asset value 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 net asset value per share of our common stock at our 2016 annual meeting of stockholders because our common stock price per share had been trading significantly above the current net asset value per share of our common stock since 2011. We would therefore need future approval from our stockholders to issue shares below the then current net asset value 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 of total assets to total senior securities, which include borrowings and any preferred stock we may issue in the future, of at least 200%. This requirement limits the amount that we may borrow. In January 2008, we received an exemptive order from the SEC to exclude SBA guaranteed debt securities issued by MSMF


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and any other wholly owned subsidiaries of ours which operate as SBICs from the asset coverage requirements of the 1940 Act as applicable to us, which, in turn, enables us to fund more investments with debt capital.

        Although we have been able to secure access to additional liquidity, including recent public equity and historical debt offerings, our $555.0 million Credit Facility, and the available leverage through the SBIC program, there is no assurance that debt or equity capital will be available to us in the future on favorable terms, or at all.

        In May 2014, the FASB issued ASU 2014-09,Revenue from Contracts with Customers (Topic 606). ASU 2014-9 supersedes the revenue recognition requirements under ASC Topic 605,Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the ASC. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Under the new guidance, an entity is required to perform the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The new guidance will significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. Additionally, the guidance requires improved disclosures as to the nature, amount, timing and uncertainty of revenue that is recognized. In May 2016, the FASB issued ASU No. 2016-12,Revenue from Contracts with Customers (Topic 606)—Narrow-Scope Improvements and Practical Expedients. This ASU clarified guidance on assessing collectability, presenting sales tax, measuring noncash consideration, and certain transition matters. The FASB tentatively decided to defer the effective date of the new revenue standard for public entities under U.S. GAAP for one year. If finalized, the new guidance will be effective for the annual reporting period beginning after December 15, 2017, including interim periods within that reporting period. Early adoption would be permitted for annual reporting periods beginning


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after December 15, 2016. We are currently evaluating the impact the adoption of this new accounting standard will have on our consolidated financial statements.

        In May 2015, the FASB issued ASU 2015-07,Fair Value Measurements—Disclosures for Certain Entities that Calculate Net Asset Value per Share. This amendment updates guidance intended to eliminate the diversity in practice surrounding how investments measured at net asset value under the practical expedient with future redemption dates have been categorized in the fair value hierarchy. Under the updated guidance, investments for which fair value is measured at net asset value per share using the practical expedient should no longer be categorized in the fair value hierarchy, while investments for which fair value is measured at net asset value per share but the practical expedient is not applied should continue to be categorized in the fair value hierarchy. The updated guidance requires retrospective adoption for all periods presented and is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. The Company adopted this standard during the three months ended March 31, 2016. There was no impact of the adoption of this new accounting standard on our consolidated financial statements as none of our investments are measured through the use of the practical expedient.

        In February 2016, the FASB issued ASU 2016-02,Leases, which requires lessees to recognize on the balance sheet a right-of-use asset, representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. The standard requires the use of a modified retrospective transition approach, which includes a number of optional practical expedients that entities may elect to apply. The new


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guidance is effective for annual periods beginning after December 15, 2018, and interim periods therein. Early application is permitted. The impact of the adoption of this new accounting standard on our consolidated financial statements is currently being evaluated.

        In March 2016, the FASB issued ASU 2016-09,Compensation—Stock Compensation: Improvements to Employee Share-Based Payment Accounting, which is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2016, and interim periods therein. Early application is permitted. The Company elected to early adopt this standard during the three months ended March 31, 2016. See further discussion of the impact of the adoption of this standard in "Note B.8.—Summary of Significant Accounting Policies—Share-based Compensation" in the notes to consolidated financial statements

        In August 2016, the FASB issued ASU 2016-15,Statement of Cash Flows (Topic 230), which is intended to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2017, and interim periods therein. Early application is permitted. The impact of the adoption of this new accounting standard on our consolidated financial statements is not expected to be material.

        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 financial statements upon adoption.

        Inflation has not had a significant effect on our results of operations in any of the reporting periods presented herein. However, our portfolio companies have experienced, and may in the future


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experience, the 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.

        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 balance sheet. At JuneSeptember 30, 2016, we had a total of $133.2$108.8 million in outstanding commitments comprised of (i) 3230 investments with commitments to fund revolving loans that had not been fully drawn or term loans with additional commitments not yet funded and (ii) 9nine investments with equity capital commitments that had not been fully called.

        As of JuneSeptember 30, 2016, the future fixed commitments for cash payments in connection with our SBIC debentures, the 4.50% Notes and the 6.125% Notes for each of the next five years and thereafter are as follows:


 2016 2017 2018 2019 2020 2021 and
thereafter
 Total  2016 2017 2018 2019 2020 2021 and
thereafter
 Total 

SBIC debentures

 $ $15,000 $10,200 $20,000 $55,000 $124,800 $225,000  $ $15,000 $10,200 $20,000 $55,000 $130,800 $231,000 

Interest due on SBIC debentures(1)

 4,748 9,423 8,130 7,807 6,608 10,992 47,708   9,569 8,293 7,970 6,772 11,155 43,759 

Notes 6.125%

      90,655 90,655       90,655 90,655 

Interest due on 6.125% Notes

 2,776 5,553 5,553 5,553 5,553 13,881 38,869  1,388 5,553 5,553 5,553 5,553 12,492 36,092 

4.50% Notes

    175,000   175,000     175,000   175,000 

Interest due on 4.50% Notes

 3,938 7,875 7,875 7,875   27,563  3,938 7,875 7,875 7,875   27,563 

Total

 $11,462 $37,851 $31,758 $216,235 $67,161 $240,328 $604,795  $5,326 $37,997 $31,921 $216,398 $67,325 $245,102 $604,069 


Table

(1)
The interest due on the $6.0 million of Contents

SBIC debentures drawn in September 2016 does not have a final rate that has been fixed by the SBA as of September 30, 2016. In March 2017, the final rate for this tranche of SBIC debentures will be determined and, thereafter, the rate will be fixed for the ensuing 10 years. The table above assumes that the interim rate being charged as of September 30, 2016 will be used until the final maturity. This rate will be adjusted once the final rate is determined.

        As of JuneSeptember 30, 2016, we had $350.0$313.0 million in borrowings outstanding under our Credit Facility, and the Credit Facility is currently scheduled to mature in September 2020. The Credit Facility contains two, one-year extension options which could extend the maturity to September 2022. See further discussion of the Credit Facility terms in "—Liquidity and Capital Resources—Capital Resources".

        As discussed further above, the External Investment Manager is treated as a wholly owned portfolio company of MSCC and is included as part of our Investment Portfolio. At JuneSeptember 30, 2016, we had a receivable of $2.3$2.2 million due from the External Investment Manager which included approximately $1.6$1.4 million primarily related to operating expenses incurred by us required to support the External Investment Manager's business, along with dividends declared but not paid by the External Investment Manager of approximately $0.6$0.8 million.


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        In November 2015, our board of directors approved and adopted the Main Street Capital Corporation Deferred Compensation Plan (the "2015 Deferred Compensation Plan"). The 2015 Deferred Compensation Plan became effective on January 1, 2016 and replaced the Deferred Compensation Plan for Non-Employee Directors previously adopted by the board of directors in June 2013 (the "2013 Deferred Compensation Plan"). Under the 2015 Deferred Compensation Plan, 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. Individuals participating in the 2015 Deferred Compensation Plan receive distributions of their respective balances based on predetermined payout schedules or other events as defined by the plan and are also able to direct investments made on their behalf among investment alternatives permitted from time to time under the plan, including phantom Main Street stock units. As of JuneSeptember 30, 2016, $1.9$2.0 million of compensation and directors' fees had been deferred under the 2015 Deferred Compensation Plan (including amounts previously deferred under the 2013 Deferred Compensation Plan). Of this amount, $1.7 million was deferred into phantom Main Street stock units, representing 55,67555,753 shares of our common stock. Including phantom stock units issued through dividend reinvestment, the phantom stock units outstanding as of September 30, 2016 represented 63,257 shares of our common stock. Any amounts deferred under the plan represented by our shares of commonphantom stock units will not be issued or included as outstanding on the consolidated statement of changes in net assets until such shares are actually distributed to the participant in accordance with the plan, but are included in operating expenses and weighted average shares outstanding on our consolidated statement of operations as earned.

        During October 2016, we declared a semi-annual supplemental cash dividend of $0.275 per share payable in December 2016. This supplemental cash dividend is in addition to the previously announced regular monthly cash dividends that we declared for the fourth quarter of 2016 of $0.185 per share for each of October, November and December 2016.

In AugustNovember 2016, we declared regular monthly dividends of $0.185 per share for each month of October, NovemberJanuary, February and DecemberMarch of 2016.2017. These regular monthly dividends equal a total of $0.555 per share for the fourthfirst quarter of 20162017 and represent a 2.8% increase from the regular monthly dividends declared for the fourthfirst quarter of 2015.2016. Including the semi-annual supplemental dividend declared for December 2016 and the regular monthly dividends declared for the fourthfirst quarter of 2016,2017, we will have paid $18.330$19.160 per share in cumulative dividends since its October 2007 initial public offering.

        In AugustOctober 2016, we receivedamended our Credit Facility to extend the maturity by one year to September 2021. The Credit Facility includes total commitments of $555.0 million from a license fromdiversified group of fourteen lenders and also contains an accordion feature which allows us to increase the SBAtotal commitments under the facility to operate a third SBIC. The third SBIC license provides us with up to $125$750.0 million of additional attractive, long-term, fixed interest rate debt capital throughfrom new and existing lenders on the issuance of SBA-guaranteed debentures up tosame terms and conditions as the maximum amount of $350.0 million of SBA-guaranteed debentures that affiliated SBIC funds can have outstanding.existing commitments.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

        We are subject to financial market risks, including changes in interest rates. Changes in interest rates may affect both our cost of funding and our interest income from portfolio investments and Marketable securities and idle funds investments. Our risk management systems and procedures are designed to identify and analyze our risk, to set appropriate policies and limits and to continually


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monitor these risks. Our investment income will be affected by changes in various interest rates, including LIBOR and prime rates, to the extent ofthat any debt investments that include floating interest rates. 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 JuneSeptember 30, 2016, approximately 62%64% of our debt investment portfolio (at cost) bore interest at floating rates, 98% of which were subject to contractual minimum interest rates. As of June 30, 2016, none of our Marketable securities and idle funds investments (at cost) bore interest at floating rates. Our interest expense


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will be affected by changes in the published LIBOR rate in connection with our Credit Facility; however, the interest rates on our outstanding SBIC debentures, and our 4.50% Notes and 6.125% Notes, which comprise the majority of our outstanding debt, are fixed for the life of such debt. As of JuneSeptember 30, 2016, we had not entered into any interest rate hedging arrangements. 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 as of JuneSeptember 30, 2016.

Basis Point Change
 Increase in
Interest
Income
 Increase in
Interest
Expense
 Increase
(Decrease) in
Net Investment
Income
 Increase
(Decrease) in
Net Investment
Income per Share
  Increase in
Interest
Income
 Increase in
Interest
Expense
 Increase
(Decrease) in
Net Investment
Income
 Increase
(Decrease) in
Net Investment
Income per Share
 

  
 (dollars in thousands)
  
  
   
 (dollars in thousands)
  
  
 

50

 $1,269 $(1,750)$(481)$(0.01) $2,905 $(1,565)$1,340 $0.03 

100

 5,329 (3,500) 1,829 0.04  7,501 (3,130) 4,371 0.08 

150

 9,778 (5,250) 4,528 0.09  12,214 (4,695) 7,519 0.14 

200

 14,282 (7,000) 7,282 0.14  16,980 (6,260) 10,720 0.20 

300

 23,315 (10,500) 12,815 0.25  26,512 (9,390) 17,122 0.32 

400

 32,362 (14,000) 18,362 0.35  36,058 (12,520) 23,538 0.44 

500

 41,422 (17,500) 23,922 0.46  45,617 (15,650) 29,967 0.57 

Basis Point Change

        The hypothetical results would also be impacted by the changes in the amount of debt outstanding under our Credit Facility (with an increase (decrease) in the debt outstanding under the Credit Facility resulting in an (increase) decrease in the hypothetical interest expense).

Item 4.    Controls and Procedures

        As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chairman and Chief Executive Officer, our President, our Chief Financial Officer, our Chief Compliance Officer and our Chief Accounting Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 of the Securities Exchange Act of 1934). Based on that evaluation, our Chairman and Chief Executive Officer, our President, our Chief Financial Officer, our Chief Compliance Officer and our 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 Securities Exchange Act of 1934. There have been no changes in our internal control over financial reporting that occurred during the quarter ended JuneSeptember 30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


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PART II—OTHER INFORMATION

Item 1.    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 try to 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 1A.    Risk Factors

        There have been no material changes to the risk factors as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015 that we filed with the SEC on February 26, 2016, and as updated in our Form N-2 filed on May 16, 2016.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

        During the three months ended JuneSeptember 30, 2016, we issued 141,76084,153 shares of our common stock under our dividend reinvestment plan. These issuances were not subject to the registration requirements of the Securities Act of 1933, as amended. The aggregate value of the shares of common stock issued during the three months ended JuneSeptember 30, 2016 under the dividend reinvestment plan was approximately $4.6$2.8 million.

Item 6.    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):

Exhibit
Number
 Description of Exhibit
 10.1 Form of Equity DistributionSixth Amendment to Second Amended and Restated Credit Agreement dated June 9,October 31, 2016 (previously filed as Exhibit (h)(3)10.1 to Main Street Capital Corporation's Post-Effective Amendment No. 5 to the Registration StatementCurrent Report on Form N-28-K filed on June 9,November 1, 2016 (Reg.(File No. 333-203147)1-33723)).


14.1


Code of Business Conduct and Ethics.

 

31.1

 

Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

 

31.2

 

Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

 

32.1

 

Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

 

32.2

 

Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

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SIGNATURES

        Pursuant to the requirements 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

Date: August 9,November 4, 2016

 

/s/ VINCENT D. FOSTER

Vincent D. Foster
Chairman and Chief Executive Officer
(principal executive officer)

Date: August 9,November 4, 2016

 

/s/ BRENT D. SMITH

Brent D. Smith
Chief Financial Officer and Treasurer
(principal financial officer)

Date: August 9,November 4, 2016

 

/s/ SHANNON D. MARTIN

Shannon D. Martin
Vice President and Chief Accounting Officer
(principal accounting officer)

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EXHIBIT INDEX

Exhibit
Number
 Description of Exhibit
 31.114.1 Code of Business Conduct and Ethics.


31.1


Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

 

31.2

 

Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

 

32.1

 

Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

 

32.2

 

Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).