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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 March 31, 20172018

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 floorFloor
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, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý Accelerated filer o Non-accelerated filer o
(do not check if
smaller reporting company)
 Smaller reporting company o

Emerging growth company o

        If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

        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 May 4, 20173, 2018 was 55,922,561.59,447,537.

   


Table of Contents


TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION

Item 1.

 

Consolidated Financial Statements

  

 

Consolidated Balance Sheets—March 31, 20172018 (unaudited) and December 31, 20162017

 1

 

Consolidated Statements of Operations (unaudited)—Three months ended March 31, 20172018 and 20162017

 2

 

Consolidated Statements of Changes in Net Assets (unaudited)—Three months ended March 31, 20172018 and 20162017

 3

 

Consolidated Statements of Cash Flows (unaudited)—Three months ended March 31, 20172018 and 20162017

 4

 

Consolidated Schedule of Investments (unaudited)—March 31, 20172018

 5

 

Consolidated Schedule of Investments—December 31, 20162017

 3436

 

Notes to Consolidated Financial Statements (unaudited)

 6367

 

Consolidated Financial Statement Schedule

110

Consolidated ScheduleSchedules of Investments in and Advances to Affiliates (unaudited)—Three months ended March 31, 2018 and 2017

 110111

Item 2.

 

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

 115120

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

 135141

Item 4.

 

Controls and Procedures

 136141


PART II
OTHER INFORMATION

PART II
OTHER INFORMATION

Item 1.

 

Legal Proceedings

 
137143

Item 1A.

 

Risk Factors

 137143

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 137143

Item 6.

 

Exhibits

 137143

 

Signatures

 138144

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

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


 March 31, 2017 December 31, 2016  March 31,
2018
 December 31,
2017
 

 (Unaudited)
  
  (Unaudited)
  
 

ASSETS

          

Portfolio investments at fair value:

 
 
 
 
 

Control investments (cost: $491,749 and $439,674 as of March 31, 2017 and December 31, 2016, respectively)

 $658,239 $594,282 

Affiliate investments (cost: $373,895 and $394,699 as of March 31, 2017 and December 31, 2016, respectively)

 329,024 375,948 

Non-Control/Non-Affiliate investments (cost: $1,010,832 and $1,037,510 as of March 31, 2017 and December 31, 2016, respectively)

 992,115 1,026,676 

     

Investments at fair value:

     

Control investments (cost: $649,096 and $530,034 as of March 31, 2018 and December 31, 2017, respectively)

 $846,797 $750,706 

Affiliate investments (cost: $382,351 and $367,317 as of March 31, 2018 and December 31, 2017, respectively)

 359,460 338,854 

Non-Control/Non-Affiliate investments (cost: $1,126,103 and $1,107,447 as of March 31, 2018 and December 31, 2017, respectively)

 1,107,777 1,081,745 

Total investments (cost: $1,876,476 and $1,871,883 as of March 31, 2017 and December 31, 2016, respectively)

 1,979,378 1,996,906 

Total investments (cost: $2,157,550 and $2,004,798 as of March 31, 2018 and December 31, 2017, respectively)

 2,314,034 2,171,305 

     

Cash and cash equivalents

 33,605 24,480  29,090 51,528 

Interest receivable and other assets

 37,560 35,133  40,159 36,343 

Receivable for securities sold

 8,604 1,990  14,311 2,382 

Deferred financing costs (net of accumulated amortization of $12,205 and $11,547 as of March 31, 2017 and December 31, 2016, respectively)

 12,603 12,645 

Deferred tax asset, net

 4,739 9,125 

Deferred financing costs (net of accumulated amortization of $5,856 and $5,600 as of March 31, 2018 and December 31, 2017, respectively)

 3,581 3,837 

Total assets

 $2,076,489 $2,080,279  $2,401,175 $2,265,395 

LIABILITIES

 
 
 
 
      

Credit facility

 
$

288,000
 
$

343,000
  
$

188,000
 
$

64,000
 

SBIC debentures (par: $240,200 and $240,000 as of March 31, 2017 and December 31, 2016, respectively. Par of $50,000 and $75,200 is recorded at a fair value of $49,155 and $74,803 as of March 31, 2017 and December 31, 2016, respectively)

 239,355 239,603 

4.50% Notes

 175,000 175,000 

6.125% Notes

 90,655 90,655 

SBIC debentures (par: $313,800 and $295,800 as of March 31, 2018 and December 31, 2017, respectively)

 306,182 288,483 

4.50% Notes due 2022 (par: $185,000 as of both March 31, 2018 and December 31, 2017)

 182,167 182,015 

4.50% Notes due 2019 (par: $175,000 as of both March 31, 2018 and December 31, 2017)

 173,796 173,616 

6.125% Notes (par: $90,655 as of both March 31, 2018 and December 31, 2017)

 89,133 89,057 

Accounts payable and other liabilities

 11,758 14,205  15,049 20,168 

Payable for securities purchased

 14,064 2,184  21,859 40,716 

Interest payable

 3,471 4,103  8,510 5,273 

Dividend payable

 10,252 10,048  11,192 11,146 

Deferred tax liability, net

 8,687 10,553 

Total liabilities

 832,555 878,798  1,004,575 885,027 

     

Commitments and contingencies (Note M)

          

NET ASSETS

 
 
 
 
  
 
 
 
 

Common stock, $0.01 par value per share (150,000,000 shares authorized; 55,423,375 and 54,312,444 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively)

 
554
 
543
 

Common stock, $0.01 par value per share (150,000,000 shares authorized; 58,987,330 and 58,660,680 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively)

 
590
 
586
 

Additional paid-in capital

 1,185,478 1,143,883  1,325,998 1,310,780 

Accumulated net investment income, net of cumulative dividends of $532,336 and $521,297 as of March 31, 2017 and December 31, 2016, respectively

 33,943 19,033 

Accumulated net realized gain from investments (accumulated net realized gain from investments of $75,959 before cumulative dividends of $126,845 as of March 31, 2017 and accumulated net realized gain from investments of $48,394 before cumulative dividends of $107,281 as of December 31, 2016)

 (50,886) (58,887)

Accumulated net investment income, net of cumulative dividends of $696,070 and $662,563 as of March 31, 2018 and December 31, 2017, respectively

 10,015 7,921 

Accumulated net realized gain from investments (accumulated net realized gain from investments of $72,036 before cumulative dividends of $124,690 as of March 31, 2018 and accumulated net realized gain from investments of $64,576 before cumulative dividends of $124,690 as of December 31, 2017)

 (52,654) (60,114)

Net unrealized appreciation, net of income taxes

 74,845 96,909  112,651 121,195 

Total net assets

 1,243,934 1,201,481  1,396,600 1,380,368 

Total liabilities and net assets

 $2,076,489 $2,080,279  $2,401,175 $2,265,395 

NET ASSET VALUE PER SHARE

 
$

22.44
 
$

22.10
  $23.67 $23.53 

   

The accompanying notes are an integral part of these consolidated 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
March 31,
  Three Months Ended
March 31,
 

 2017 2016  2018 2017 

INVESTMENT INCOME:

          

Interest, fee and dividend income:

          

Control investments

 $12,988 $12,615  $21,955 $12,988 

Affiliate investments

 9,899 8,523  9,071 9,899 

Non-Control/Non-Affiliate investments

 25,002 20,737  24,916 25,002 

Interest, fee and dividend income

 47,889 41,875 

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

  131 

Total investment income

 47,889 42,006  55,942 47,889 

EXPENSES:

          

Interest

 (8,608) (8,182) (10,265) (8,608)

Compensation

 (4,430) (3,820) (5,491) (4,430)

General and administrative

 (2,940) (2,405) (2,974) (2,940)

Share-based compensation

 (2,269) (1,589) (2,303) (2,269)

Expenses allocated to the External Investment Manager

 1,524 1,154  2,066 1,524 

Total expenses

 (16,723) (14,842) (18,967) (16,723)

NET INVESTMENT INCOME

 31,166 27,164  36,975 31,166 

NET REALIZED GAIN (LOSS):

 
 
 
 
  
 
 
 
 

Control investments

 (682) 14,358  13,094 (682)

Affiliate investments

 22,930    22,930 

Non-Control/Non-Affiliate investments

 5,317 818  (5,634) 5,317 

Marketable securities and idle funds investments

  (1,573)

SBIC debentures

 (5,217)   (1,374) (5,217)

Total net realized gain

 22,348 13,603  6,086 22,348 

NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):

 
 
 
 
 

Portfolio investments

 (22,091) (27,529)

Marketable securities and idle funds investments

  1,457 

NET UNREALIZED APPRECIATION (DEPRECIATION):

     

Control investments

 (22,974) 11,880 

Affiliate investments

 14,238 (26,121)

Non-Control/Non-Affiliate investments

 (2,146) (7,850)

SBIC debentures

 5,665 (146) 1,359 5,665 

Total net change in unrealized depreciation

 (16,426) (26,218)

Total net unrealized depreciation

 (9,523) (16,426)

INCOME TAXES:

 
 
 
 
      

Federal and state income, excise and other taxes

 (1,252) (370) (887) (1,252)

Deferred taxes

 (4,386) 2,633  1,866 (4,386)

Income tax benefit (provision)

 (5,638) 2,263  979 (5,638)

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

 
$

31,450
 
$

16,812
  $34,517 $31,450 

NET INVESTMENT INCOME PER SHARE—BASIC AND DILUTED

 
$

0.57
 
$

0.54
  $0.63 $0.57 

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

 $0.57 $0.33  $0.59 $0.57 

DIVIDENDS PAID PER SHARE:

          

Regular monthly dividends

 $0.555 $0.540  $0.570 $0.555 

Supplemental dividends

      

Total dividends

 $0.555 $0.540  $0.570 $0.555 

WEIGHTED AVERAGE SHARES OUTSTANDING—BASIC AND DILUTED

 
55,125,170
 
50,549,780
  58,852,252 55,125,170 

   

The accompanying notes are an integral part of these consolidated 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, 2015

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

Public offering of common stock, net of offering costs

 
321,714
 
3
 
9,778
 
 
 
 

Share-based compensation

   1,589    1,589 

Dividend reinvestment

 113,631 1 3,255    3,256 

Amortization of directors' deferred compensation

   144    144 

Issuance of restricted stock, net of forfeited shares

 (3,089)       

Dividends to stockholders

    (27,284)   (27,284)

Cumulative-effect to retained earnings for excess tax benefit

      1,806 1,806 

Net increase (decrease) resulting from operations

    27,164 13,603 (23,955) 16,812 

Balances at March 31, 2016

 50,846,000 $508 $1,026,233 $7,061 $(36,050)$79,246 $1,076,998 

Balances at December 31, 2016

 54,354,857 $543 $1,143,883 $19,033 $(58,887)$96,909 $1,201,481  54,354,857 $543 $1,143,883 $19,033 $(58,887)$96,909 $1,201,481 

Public offering of common stock, net of offering costs

 
1,035,286
 
11
 
37,700
 
 
 
 
37,711
  
1,035,286
 
11
 
37,700
 
 
 
 
37,711
 

Share-based compensation

   2,269    2,269    2,269    2,269 

Purchase of vested stock for employee payroll tax withholding

 (8,964)  (343)    (343) (8,964)  (343)    (343)

Dividend reinvestment

 48,675  1,806    1,806  48,675  1,806    1,806 

Amortization of directors' deferred compensation

   163    163    163    163 

Forfeited shares of terminated employees

 (6,479)        (6,479)       

Dividends to stockholders

    (11,039) (19,564)  (30,603)    (11,039) (19,564)  (30,603)

Net increase (decrease) resulting from operations

    25,949 27,565 (22,064) 31,450     25,949 27,565 (22,064) 31,450 

Balances at March 31, 2017

 55,423,375 $554 $1,185,478 $33,943 $(50,886)$74,845 $1,243,934  55,423,375 $554 $1,185,478 $33,943 $(50,886)$74,845 $1,243,934 

Balances at December 31, 2017

 58,660,680 $586 $1,310,780 $7,921 $(60,114)$121,195 $1,380,368 

Public offering of common stock, net of offering costs

 
309,895
 
4
 
11,332
 
 
 
 
11,336
 

Share-based compensation

   2,303    2,303 

Purchase of vested stock for employee payroll tax withholding

 (5,392)  (212)    (212)

Dividend reinvestment

 42,423  1,589    1,589 

Amortization of directors' deferred compensation

   206    206 

Issuance of restricted stock

 124       

Dividends to stockholders

    (33,507)   (33,507)

Net increase (decrease) resulting from operations

    35,601 7,460 (8,544) 34,517 

Balances at March 31, 2018

 59,007,730 $590 $1,325,998 $10,015 $(52,654)$112,651 $1,396,600 

   

The accompanying notes are an integral part of these consolidated financial statements


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Cash Flows

(dollars in thousands)

(Unaudited)


 Three Months Ended
March 31,
  Three Months Ended
March 31,
 

 2017 2016  2018 2017 

CASH FLOWS FROM OPERATING ACTIVITIES

          

Net increase in net assets resulting from operations

 $31,450 $16,812  $34,517 $31,450 

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

          

Investments in portfolio companies

 (186,922) (113,945) (340,405) (186,922)

Proceeds from sales and repayments of debt investments in portfolio companies

 184,487 69,028  133,835 184,487 

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

 37,041 21,891  32,268 37,041 

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

  559 

Net change in net unrealized depreciation

 16,426 26,218 

Net unrealized depreciation

 9,523 16,426 

Net realized gain

 (22,348) (13,603) (6,086) (22,348)

Accretion of unearned income

 (4,703) (1,921) (3,238) (4,703)

Payment-in-kind interest

 (1,607) (1,303) (576) (1,607)

Cumulative dividends

 (877) (321) (562) (877)

Share-based compensation expense

 2,269 1,589  2,303 2,269 

Amortization of deferred financing costs

 658 644  881 658 

Deferred tax (benefit) provision

 4,386 (2,633) (1,866) 4,386 

Changes in other assets and liabilities:

          

Interest receivable and other assets

 (2,175) (2,390) (3,467) (2,175)

Interest payable

 (632) 1,226  3,237 (632)

Accounts payable and other liabilities

 (2,284) (6,269) (4,913) (2,284)

Deferred fees and other

 597 632  1,392 597 

Net cash provided by (used in) operating activities

 55,766 (3,786) (143,157) 55,766 

CASH FLOWS FROM FINANCING ACTIVITIES

 
 
 
 
  
 
 
 
 

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

 37,711 9,781  11,336 37,711 

Dividends paid

 (28,593) (23,990) (31,872) (28,593)

Proceeds from issuance of SBIC debentures

 25,400   22,000 25,400 

Repayments of SBIC debentures

 (25,200)   (4,000) (25,200)

Proceeds from credit facility

 83,000 70,000  194,000 83,000 

Repayments on credit facility

 (138,000) (55,000) (70,000) (138,000)

Payment of deferred loan costs and SBIC debenture fees

 (616)  

Payment of deferred issuance costs and SBIC debenture fees

 (533) (616)

Purchases of vested stock for employee payroll tax withholding

 (343)   (212) (343)

Other

  (113)

Net cash provided by (used in) financing activities

 (46,641) 678  120,719 (46,641)

Net increase (decrease) in cash and cash equivalents

 9,125 (3,108) (22,438) 9,125 

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 24,480 20,331  51,528 24,480 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 $33,605 $17,223  $29,090 $33,605 

Supplemental cash flow disclosures:

          

Interest paid

 $8,552 $6,282  $6,116 $8,552 

Taxes paid

 $1,677 $1,172  $3,320 $1,677 

Non-cash financing activities:

          

Shares issued pursuant to the DRIP

 $1,806 $3,256  $1,589 $1,806 

   

The accompanying notes are an integral part of these consolidated financial statements


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
   

Control Investments(5)

 

 

 

 

        

 

 

 

       

    

Access Media Holdings, LLC(10)

 

Private Cable Operator

        

Private Cable Operator

       

  

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

 $22,946 $22,946 $19,470 

  

Preferred Member Units (6,750,000 units; 12% cumulative)

   6,644 220 

  

Member Units (45 units)

   1  

    29,591 19,690 

  

Ameritech College Operations, LLC

 

For-Profit Nursing and Healthcare College

       

  

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

 514 514 514 

  

13% Secured Debt (Maturity—November 30, 2019)

 489 489 489   

10% PIK Secured Debt (Maturity—July 22, 2020)(14)(19)

 $23,828 $23,828 $15,120 

  

13% Secured Debt (Maturity—January 31, 2020)

 3,025 3,025 3,025   

Preferred Member Units (8,550,000 units)

   8,444  

  

Preferred Member Units (2,936 units)

   6,191 2,810   

Member Units (45 units)

   1  

    10,219 6,838     32,273 15,120 

    

ASC Interests, LLC

 

Recreational and Educational Shooting Facility

        

Recreational and Educational Shooting Facility

       

  

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

 2,050 2,036 2,050   

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

 1,650 1,647 1,647 

  

Member Units (1,500 units)(8)

   1,500 2,740   

Member Units (1,500 units)

   1,500 1,370 

    3,536 4,790     3,147 3,017 

    

ATS Workholding, LLC(10)

 

Manufacturer of Machine Cutting Tools and Accessories

       

  

5% Secured Debt (Maturity—November 16, 2021)

 4,186 3,735 3,735 

  

Preferred Member Units (3,725,862 units)

   3,726 3,726 

    7,461 7,461 

  

Bond-Coat, Inc.

 

Casing and Tubing Coating Services

        

Casing and Tubing Coating Services

       

  

12% Secured Debt (Maturity—December 28, 2020)

 11,596 11,596 11,596 

  

Common Stock (57,508 shares)

   6,350 9,370 

    17,946 20,966 

  

Brewer Crane Holdings, LLC

 

Provider of Crane Rental and Operating Services

       

  

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

 11,596 11,566 11,596   

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.66%, Secured Debt (Maturity—January 9, 2023)(9)

 9,920 9,825 9,825 

  

Common Stock (57,508 shares)

   6,350 7,600   

Preferred Member Units (2,950 units)(8)

   4,280 4,280 

    17,916 19,196     14,105 14,105 

    

Café Brazil, LLC

 

Casual Restaurant Group

        

Casual Restaurant Group

       

  

Member Units (1,233 units)(8)

   1,742 5,900   

Member Units (1,233 units)(8)

   1,742 4,900 

    

CBT Nuggets, LLC

 

Produces and Sells IT Training Certification Videos

       

  

Member Units (416 units)(8)

   1,300 60,620 

  

Charps, LLC

 

Pipeline Maintenance and Construction

       

  

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—February 3, 2022)(9)

 800 781 781 

  

12% Secured Debt (Maturity—February 3, 2022)

 18,400 18,220 18,220 

  

Preferred Member Units (1,600 units)

   400 400 

    19,401 19,401 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
 

California Splendor Holdings LLC

 

Processor of Frozen Fruits

       

  

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 10.38%, Secured Debt (Maturity—March 30, 2023)(9)

 3,730 3,610 3,610 

  

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 12.38%, Secured Debt (Maturity—March 30, 2023)(9)

 28,000 27,723 27,723 

  

Preferred Member Units (7,143 units)

   12,500 12,500 

    43,833 43,833 

  

CBT Nuggets, LLC

 

Produces and Sells IT Training Certification Videos

       

  

Member Units (416 units)(8)

   1,300 67,340 

  

Chamberlin Holding LLC

 

Roofing and Waterproofing Specialty Subcontractor

       

  

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 12.13%, Secured Debt (Maturity—February 26, 2023)(9)

 21,600 21,389 21,389 

  

Member Units (4,347 units)

   11,440 11,440 

    32,829 32,829 

  

Charps, LLC

 

Pipeline Maintenance and Construction

       

  

12% Secured Debt (Maturity—February 3, 2022)

 16,800 16,646 16,646 

  

Preferred Member Units (1,600 units)

   400 1,190 

    17,046 17,836 
   

Clad-Rex Steel, LLC

 

Specialty Manufacturer of Vinyl-Clad Metal

        

Specialty Manufacturer of Vinyl-Clad Metal

       

  

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity—December 20, 2018)(9)

 400 397 397 

  

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity—December 20, 2021)(9)

 14,080 13,946 13,946   

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 11.16%, Secured Debt (Maturity—December 20, 2021)(9)

 13,280 13,174 13,280 

  

Member Units (717 units)

   7,280 7,280   

Member Units (717 units)(8)

   7,280 9,780 

  

10% Secured Debt (Clad-Rex Steel RE Investor, LLC) (Maturity—December 20, 2036)

 1,198 1,186 1,186   

10% Secured Debt (Clad-Rex Steel RE Investor, LLC) (Maturity—December 20, 2036)

 1,178 1,166 1,178 

  

Member Units (Clad-Rex Steel RE Investor, LLC) (800 units)

   210 210   

Member Units (Clad-Rex Steel RE Investor, LLC) (800 units)

   210 280 

    23,019 23,019     21,830 24,518 

    

CMS Minerals Investments

 

Oil & Gas Exploration & Production

        

Oil & Gas Exploration & Production

       

  

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

   2,009 3,271   

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

   3,294 2,385 

  

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

   3,716 3,120   

Copper Trail Energy Fund I, LP(12)(13)

 

Investment Partnership

       

    5,725 6,391   

LP Interests (Fully diluted 30.1%)(8)

   2,500 2,500 

    

Datacom, LLC

 

Technology and Telecommunications Provider

       

  

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

 1,080 1,080 1,080 

  

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

 11,867 11,811 11,490 

  

Class A Preferred Member Units (15% cumulative)

   1,181 1,419 

  

Class B Preferred Member Units (6,453 units)

   6,030 1,861 

    20,102 15,850 

  

Gamber-Johnson Holdings, LLC

 

Manufacturer of Ruggedized Computer Mounting Systems

       

  

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

 24,080 23,856 24,080 

  

Member Units (8,619 units)(8)

   14,844 22,080 

    38,700 46,160 

  

Garreco, LLC

 

Manufacturer and Supplier of Dental Products

       

  

LIBOR Plus 12.00% (Floor 1.00%), Current Coupon 13.15%, Secured Debt (Maturity—March 31, 2020)(9)

 6,025 5,969 5,969 

  

Member Units (1,200 units)

   1,200 1,470 

    7,169 7,439 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
 

Datacom, LLC

 

Technology and Telecommunications Provider

       

  

8% Secured Debt (Maturity—May 30, 2018)

 1,755 1,755 1,755 

  

5.25% Current / 5.25% PIK Secured Debt (Maturity—May 30, 2019)(19)

 12,511 12,479 10,780 

  

Class A Preferred Member Units

   1,181 220 

  

Class B Preferred Member Units (6,453 units)

   6,030  

    21,445 12,755 

  

Direct Marketing Solutions, Inc.

 

Provider of Omni-Channel Direct Marketing Services

       

  

LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 12.75%, Secured Debt (Maturity—February 13, 2023)(9)

 18,722 18,523 18,523 

  

Preferred Stock (8,400 shares)

   8,400 8,400 

    26,923 26,923 

  

Gamber-Johnson Holdings, LLC

 

Manufacturer of Ruggedized Computer Mounting Systems

       

  

LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 12.66%, Secured Debt (Maturity—June 24, 2021)(9)

 22,910 22,737 22,910 

  

Member Units (8,619 units)(8)

   14,844 26,530 

    37,581 49,440 

  

Garreco, LLC

 

Manufacturer and Supplier of Dental Products

       

  

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.69%, Secured Debt (Maturity—March 31, 2020)(9)

 5,362 5,327 5,327 

  

Member Units (1,200 units)

   1,200 1,940 

    6,527 7,267 
   

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)

 13,065 12,986 13,065   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.66%, Secured Debt (Maturity—December 19, 2019)(9)

 11,393 11,347 11,393 

  

Member Units (5,879 units)(8)

   13,065 20,310   

Member Units (5,879 units)(8)

   13,065 23,420 

    26,051 33,375     24,412 34,813 

    

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   

Member Units (438 units)(8)

   2,980 10,830 

  

Member Units (438 units)(8)

   2,980 9,190   

    3,757 9,967 

  

Gulf Publishing Holdings, LLC

 

Energy Industry Focused Media and Publishing

       

  

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

 10,000 9,915 9,915 

  

Member Units (3,124 units)

   3,124 3,460 

    13,039 13,375 

  

Harborside Holdings, LLC

 

Real Estate Holding Company

       

  

Member units (100 units)

   6,056 9,400 

  

Harrison Hydra-Gen, Ltd.

 

Manufacturer of Hydraulic Generators

       

  

Common Stock (107,456 shares)(8)

   718 2,800 

  

Hawthorne Customs and Dispatch Services, LLC

 

Facilitator of Import Logistics, Brokerage, and Warehousing

       

  

Member Units (500 units)

   589 280 

  

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

   1,215 2,040 

    1,804 2,320 

  

HW Temps LLC

 

Temporary Staffing Solutions

       

  

LIBOR Plus 13.00% (Floor 1.00%), Current Coupon 14.00%, Secured Debt (Maturity July 2, 2020)(9)

 9,976 9,904 9,904 

  

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

   3,942 3,940 

    13,846 13,844 

  

Hydratec, Inc.

 

Designer and Installer of Micro-Irrigation Systems

       

  

Common Stock (7,095 shares)(8)

   7,095 15,640 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
   

IDX Broker, LLC

 

Provider of Marketing and CRM Tools for the Real Estate Industry

       

Gulf Publishing Holdings, LLC

 

Energy Industry Focused Media and Publishing

       

  

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

 10,650 10,610 10,650   

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

 12,698 12,608 12,608 

  

Member Units (5,400 units)(8)

   5,606 8,200   

Member Units (3,681 units)

   3,681 4,840 

    16,216 18,850     16,289 17,448 

    

Indianapolis Aviation Partners, LLC

 

Fixed Base Operator

       

Harborside Holdings, LLC

 

Real Estate Holding Company

       

  

Member units (100 units)

   6,306 9,500 

  

Harris Preston Fund Investments(12)(13)

 

Investment Partnership

       

  

LP Interests (2717 MH, L.P.) (Fully diluted 49.3%)

   536 536 

  

Harrison Hydra-Gen, Ltd.

 

Manufacturer of Hydraulic Generators

       

  

Common Stock (107,456 shares)

   718 4,980 

  

HW Temps LLC

 

Temporary Staffing Solutions

       

  

LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 12.66%, Secured Debt (Maturity July 2, 2020)(9)

 9,976 9,922 9,922 

  

Preferred Member Units (3,200 units)

   3,942 3,940 

    13,864 13,862 

  

IDX Broker, LLC

 

Provider of Marketing and CRM Tools for the Real Estate Industry

       

  

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

 3,100 3,100 3,100   

11.5% Secured Debt (Maturity—November 15, 2020)

 14,950 14,828 14,950 

  

Warrants (1,046 equivalent units)

   1,129 2,710   

Preferred Member Units (5,607 units)(8)

   5,952 11,550 

    4,229 5,810     20,780 26,500 

    

Jensen Jewelers of Idaho, LLC

 

Retail Jewelry Store

        

Retail Jewelry Store

       

  

Prime Plus 6.75% (Floor 2.00%), Current Coupon 10.50%, Secured Debt (Maturity—November 14, 2019)(9)

 3,905 3,850 3,905   

Prime Plus 6.75% (Floor 2.00%), Current Coupon 11.25%, Secured Debt (Maturity—November 14, 2019)(9)

 3,805 3,771 3,805 

  

Member Units (627 units)(8)

   811 4,460   

Member Units (627 units)(8)

   811 5,100 

    4,661 8,365     4,582 8,905 

    

Lamb Ventures, LLC

 

Aftermarket Automotive Services Chain

       

  

LIBOR Plus 5.75%, Current Coupon 6.56%, Secured Debt (Maturity May 30, 2018)

 305 305 305 

  

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

 7,579 7,579 7,579 

  

Preferred Equity (non-voting)

   400 400 

KBK Industries, LLC

 

Manufacturer of Specialty Oilfield and Industrial Products

       

  

Member Units (742 units)(8)

   5,273 6,190   

10% Secured Debt (Maturity—September 28, 2020)

 75 72 75 

  

9.5% Secured Debt (Lamb's Real Estate Investment I, LLC) (Maturity—March 31, 2027)

 432 428 428   

12.5% Secured Debt (Maturity—September 28, 2020)

 5,900 5,870 5,900 

  

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

   625 960   

Member Units (325 units)(8)

   783 4,740 

    14,610 15,862     6,725 10,715 

  

Marine Shelters Holdings, LLC

 

Fabricator of Marine and Industrial Shelters

       

  

12% PIK Secured Debt (Maturity—December 28, 2017)(14)

 3,131 3,078  

  

Preferred Member Units (3,810 units)

   5,352  

    8,430  

  

MH Corbin Holding LLC

 

Manufacturer and Distributor of Traffic Safety Products

       

  

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

 13,125 13,030 13,030 

  

Preferred Member Units (4,000 shares)

   6,000 6,000 

    19,030 19,030 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
 

Lamb Ventures, LLC

 

Aftermarket Automotive Services Chain

       

  

11% Secured Debt (Maturity—July 1, 2022)

 8,339 8,298 8,339 

  

Preferred Equity (non-voting)

   400 400 

  

Member Units (742 units)

   5,273 6,730 

  

9.5% Secured Debt (Lamb's Real Estate Investment I, LLC) (Maturity—March 31, 2027)

 432 428 432 

  

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

   625 520 

    15,024 16,421 

  

Marine Shelters Holdings, LLC

 

Fabricator of Marine and Industrial Shelters

       

  

12% PIK Secured Debt (Maturity—December 28, 2017)(14)

 3,131 3,078  

  

Preferred Member Units (3,810 units)

   5,352  

    8,430  

  

Market Force Information, LLC

 

Provider of Customer Experience Management Services

       

  

LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 13.01%, Secured Debt (Maturity—July 28, 2022)(9)

 22,880 22,676 22,676 

  

Member Units (657,113 units)

   14,700 14,700 

    37,376 37,376 

  

MH Corbin Holding LLC

 

Manufacturer and Distributor of Traffic Safety Products

       

  

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

 12,425 12,238 12,238 

  

Preferred Member Units (4,000 shares)

   6,000 6,000 

    18,238 18,238 
   

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—January 15, 2020)

 1,750 1,743 1,743 

  

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

 3,900 3,900 3,900   

12% Secured Debt (Maturity—January 15, 2020)

 3,900 3,867 3,867 

  

Member Units (3,554 units)

   1,810 1,980   

Member Units (7,874 units)

   3,001 2,171 

  

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

 825 825 825   

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

 780 780 780 

  

Member Units (Mid-Columbia Real Estate, LLC) (500 units)(8)

   790 1,220   

Member Units (Mid-Columbia Real Estate, LLC) (500 units)(8)

   790 1,290 

    9,075 9,675     10,181 9,851 

    

MSC Adviser I, LLC(16)

 

Third Party Investment Advisory Services

        

Third Party Investment Advisory Services

       

  

Member Units (Fully diluted 100.0%)(8)

    33,472   

Member Units (Fully diluted 100.0%)(8)

    48,722 

    

Mystic Logistics Holdings, LLC

 

Logistics and Distribution Services Provider for Large Volume Mailers

       

  

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

 9,164 9,051 9,164 

  

Common Stock (5,873 shares)

   2,720 6,170 

    11,771 15,334 

  

NAPCO Precast, LLC

 

Precast Concrete Manufacturing

       

  

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

 2,713 2,695 2,713 

  

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

 3,952 3,925 3,952 

  

Member Units (2,955 units)(8)

   2,975 10,920 

    9,595 17,585 

  

NRI Clinical Research, LLC

 

Clinical Research Service Provider

       

  

LIBOR Plus 6.50% (Floor 1.50%), Current Coupon 8.00%, Secured Debt (Maturity—September 8, 2017)(9)

 400 400 400 

  

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

 4,261 4,239 4,261 

  

Warrants (251,723 equivalent units)

   252 680 

  

Member Units (500,000 units)

   765 2,462 

    5,656 7,803 

  

NRP Jones, LLC

 

Manufacturer of Hoses, Fittings and Assemblies

       

  

8% Current / 4% PIK Secured Debt (Maturity—December 22, 2016)(17)

 14,054 14,054 14,054 

  

Warrants (14,331 equivalent units)

   817 130 

  

Member Units (50,877 units)

   2,900 410 

    17,771 14,594 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
 

Mystic Logistics Holdings, LLC

 

Logistics and Distribution Services Provider for Large Volume Mailers

       

  

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

 7,562 7,501 7,501 

  

Common Stock (5,873 shares)

   2,720 6,050 

    10,221 13,551 

  

NAPCO Precast, LLC

 

Precast Concrete Manufacturing

       

  

LIBOR Plus 8.50%, Current Coupon 10.51%, Secured Debt (Maturity—May 31, 2019)

 11,475 11,445 11,475 

  

Member Units (2,955 units)(8)

   2,975 12,180 

    14,420 23,655 

  

NexRev LLC

 

Provider of Energy Efficiency Products & Services

       

  

11% Secured Debt (Maturity—February 28, 2023)

 17,440 17,268 17,268 

  

Preferred Member Units (86,400,000 units)

   6,880 6,880 

    24,148 24,148 

  

NRI Clinical Research, LLC

 

Clinical Research Service Provider

       

  

LIBOR Plus 6.50% (Floor 1.50%), Current Coupon 8.19%, Secured Debt (Maturity—January 15, 2019)(9)

 400 400 400 

  

14% Secured Debt (Maturity—January 15, 2019)

 3,865 3,836 3,865 

  

Warrants (251,723 equivalent units; Expiration—January 15, 2026; Strike price—$0.01 per unit)

   252 500 

  

Member Units (1,454,167 units)

   765 2,500 

    5,253 7,265 

  

NRP Jones, LLC

 

Manufacturer of Hoses, Fittings and Assemblies

       

  

12% Secured Debt (Maturity—March 20, 2023)

 6,376 6,376 6,376 

  

Member Units (65,962 units)(8)

   3,717 4,130 

    10,093 10,506 
   

NuStep, LLC

 

Designer, Manufacturer and Distributor of Fitness Equipment

        

Designer, Manufacturer and Distributor of Fitness Equipment

       

  

12% Secured Debt (Maturity—January 31, 2022)

 20,600 20,394 20,394   

12% Secured Debt (Maturity—January 31, 2022)

 20,600 20,429 20,429 

  

Preferred Member Units (406 units)

   10,200 10,200   

Preferred Member Units (406 units)

   10,200 10,200 

    30,594 30,594     30,629 30,629 

    

OMi Holdings, Inc.

 

Manufacturer of Overhead Cranes

        

Manufacturer of Overhead Cranes

       

  

Common Stock (1,500 shares)(8)

   1,080 13,080   

Common Stock (1,500 shares)(8)

   1,080 14,290 

    

Pegasus Research Group, LLC

 

Provider of Telemarketing and Data Services

       

  

Member Units (460 units)(8)

   1,290 8,440 

  

PPL RVs, Inc.

 

Recreational Vehicle Dealer

       

  

LIBOR Plus 7.00% (Floor 0.50%), Current Coupon 8.05%, Secured Debt (Maturity—November 15, 2021)(9)

 18,000 17,834 17,834 

  

Common Stock (1,962 shares)(8)

   2,150 11,780 

    19,984 29,614 

  

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)

 3,394 3,394 3,394 

  

Preferred Member Units (19,631 units)

   4,600 6,260 

  

Warrants (1,036 equivalent units)

   1,200 320 

    13,254 14,034 

  

Quality Lease Service, LLC

 

Provider of Rigsite Accommodation Unit Rentals and Related Services

       

  

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

 7,204 7,204 7,204 

  

Member Units (1,000 units)

   2,168 4,239 

    9,372 11,443 

  

River Aggregates, LLC

 

Processor of Construction Aggregates

       

  

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

 750 646 646 

  

Member Units (1,150 units)(8)

   1,150 4,600 

  

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

   369 2,510 

    2,165 7,756 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
   

SoftTouch Medical Holdings LLC

 

Provider of In-Home Pediatric Durable Medical Equipment

       

Pegasus Research Group, LLC

 

Provider of Telemarketing and Data Services

       

  

Member Units (460 units)(8)

   1,290 10,310 

  

PPL RVs, Inc.

 

Recreational Vehicle Dealer

       

  

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

 7,140 7,099 7,140   

LIBOR Plus 7.00% (Floor 0.50%), Current Coupon 8.69%, Secured Debt (Maturity—November 15, 2021)(9)

 16,100 15,978 16,100 

  

Member Units (4,450 units)(8)

   4,930 9,170   

Common Stock (1,962 shares)(8)

   2,150 11,660 

    12,029 16,310     18,128 27,760 

    

The MPI Group, LLC

 

Manufacturer of Custom Hollow Metal Doors, Frames and Accessories

       

  

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

 2,924 2,922 2,922 

Principle Environmental, LLC (d/b/a TruHorizon Environmental Solutions)

 

Noise Abatement Service Provider

       

  

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

   2,500    

13% Secured Debt (Maturity—April 30, 2020)

 7,477 7,359 7,477 

  

Warrants (1,424 equivalent units)

   1,096    

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

   4,600 13,090 

  

Member Units (MPI Real Estate Holdings, LLC) (100 units)(8)

   2,300 2,390   

Warrants (1,018 equivalent units; Expiration—January 31, 2021; Strike price—$0.01 per unit)

   1,200 780 

    8,818 5,312     13,159 21,347 

    

Uvalco Supply, LLC

 

Farm and Ranch Supply Store

       

Quality Lease Service, LLC

 

Provider of Rigsite Accommodation Unit Rentals and Related Services

       

  

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

 756 756 756   

Zero Coupon Secured Debt (Maturity—June 8, 2020)

 7,341 7,341 6,950 

  

Member Units (1,867 units)(8)

   3,579 4,307   

Member Units (1,000 units)

   3,293 5,363 

    4,335 5,063     10,634 12,313 

    

Vision Interests, Inc.

 

Manufacturer / Installer of Commercial Signage

       

River Aggregates, LLC

 

Processor of Construction Aggregates

       

  

13% Secured Debt (Maturity—December 23, 2018)

 2,814 2,814 2,814   

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

 750 728 728 

  

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

   3,000 3,000   

Member Units (1,150 units)

   1,150 4,610 

  

Common Stock (1,126,242 shares)

   3,706    

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

   369 2,670 

    9,520 5,814     2,247 8,008 

    

Ziegler's NYPD, LLC

 

Casual Restaurant Group

       

  

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

 1,000 994 994 

  

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)

   600 240 

  

Preferred Member Units (10,072 units)

   2,834 4,100 

    7,478 8,384 

Subtotal Control Investments (33.3% of total investments at fair value)

 $491,749 $658,239 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

The MPI Group, LLC

 

Manufacturer of Custom Hollow Metal Doors, Frames and Accessories

            

   

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

  2,924  2,924  1,510 

   

Series A Preferred Units (2,500 units)

     2,500   

   

Warrants (1,424 equivalent units; Expiration—July 1, 2024; Strike price—$0.01 per unit)

     1,096   

   

Member Units (MPI Real Estate Holdings, LLC) (100 units)(8)

     2,300  2,480 

         8,820  3,990 

              

Uvalco Supply, LLC

 

Farm and Ranch Supply Store

            

   

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

  184  184  184 

   

Member Units (1,867 units)(8)

     3,579  3,880 

         3,763  4,064 

              

Vision Interests, Inc.

 

Manufacturer / Installer of Commercial Signage

            

   

13% Secured Debt (Maturity—December 23, 2018)

  2,814  2,801  2,801 

   

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

     3,000  3,000 

   

Common Stock (1,126,242 shares)

     3,706   

         9,507  5,801 

              

Ziegler's NYPD, LLC

 

Casual Restaurant Group

            

   

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

  1,000  997  997 

   

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; Expiration—September 29, 2018; Strike price—$0.01 per unit)

     600   

   

Preferred Member Units (10,072 units)

     2,834  3,221 

         7,481  7,268 

Subtotal Control Investments (36.6% of total investments at fair value)

 $649,096 $846,797 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
   

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

       

 

Warrants (42 equivalent units)

   $259 $690   

Warrants (42 equivalent units; Expiration—November 7, 2024; Strike price—$0.01 per unit)

   $259 $900 

 

Member Units (186 units)(8)

   1,200 2,850   

Preferred Member Units (186 units)(8)

   1,200 3,760 

    1,459 3,540     1,459 4,660 

    

Barfly Ventures, LLC(10)

 

Casual Restaurant Group

         

Casual Restaurant Group

       

 

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

 7,796 7,667 7,635   

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

 8,715 8,576 8,715 

 

Options (2 equivalent units)

   397 490   

Options (2 equivalent units)

   397 920 

 

Warrant (1 equivalent unit)

   473 280   

Warrant (1 equivalent unit; Expiration—August 31, 2025; Strike price—$1.00 per unit)

   473 520 

    8,537 8,405     9,446 10,155 

    

BBB Tank Services, LLC

 

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

         

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

       

 

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity—April 8, 2021)(9)

 800 797 797   

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.66%, Secured Debt (Maturity—April 8, 2021)(9)

 720 700 700 

 

15% Secured Debt (Maturity—April 8, 2021)

 4,027 3,992 3,992   

15% Secured Debt (Maturity—April 8, 2021)

 4,000 3,883 3,883 

 

Member Units (800,000 units)

   800 800   

Member Units (800,000 units)

   800 550 

    5,589 5,589     5,383 5,133 

    

Boss Industries, LLC

 

Manufacturer and Distributor of Air, Power and Other Industrial Equipment

        

 

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

   2,473 2,920 

  

Bridge Capital Solutions Corporation

 

Financial Services and Cash Flow Solutions Provider

        

 

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

 7,500 5,673 5,673 

 

Warrants (63 equivalent shares)

   2,132 3,370 

Boccella Precast Products LLC

 

Manufacturer of Precast Hollow Core Concrete

       

 

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

 1,000 991 1,000   

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.69%, Secured Debt (Maturity—June 30, 2022)(9)

 16,582 16,426 16,582 

 

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

   1,000 1,000   

Member Units (2,160,000 units)(8)

   2,160 4,860 

    9,796 11,043     18,586 21,442 

    

Buca C, LLC

 

Casual Restaurant Group

        

Boss Industries, LLC

 

Manufacturer and Distributor of Air, Power and Other Industrial Equipment

       

 

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

 21,204 21,058 21,058   

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

   2,120 4,740 

 

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

   3,995 3,990   

    25,053 25,048 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
   

CAI Software LLC

 

Provider of Specialized Enterprise Resource Planning Software

        

Bridge Capital Solutions Corporation

 

Financial Services and Cash Flow Solutions Provider

       

  

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

 7,500 5,962 5,962 

  

Warrants (82 equivalent shares; Expiration—July 25, 2026; Strike price—$0.01 per share)

   2,132 4,020 

 

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

 3,483 3,463 3,483   

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

 1,000 993 1,000 

 

Member Units (65,356 units)(8)

   654 2,580   

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

   1,000 1,000 

    4,117 6,063     10,087 11,982 

    

CapFusion, LLC(13)

 

Non-Bank Lender to Small Businesses

        

Buca C, LLC

 

Casual Restaurant Group

       

  

LIBOR Plus 9.25% (Floor 1.00%), Current Coupon 10.94%, Secured Debt (Maturity—June 30, 2020)(9)

 20,004 19,904 19,904 

  

Preferred Member Units (6 units; 6% cumulative)(8)(19)

   4,238 4,233 

    24,142 24,137 

  

CAI Software LLC

 

Provider of Specialized Enterprise Resource Planning Software

       

 

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

 14,400 13,252 13,252   

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

 4,083 4,063 4,083 

 

Warrants (1,600 equivalent units)

   1,200 1,200   

Member Units (65,356 units)(8)

   654 3,230 

    14,452 14,452     4,717 7,313 

    

Chandler Signs Holdings, LLC(10)

 

Sign Manufacturer

         

Sign Manufacturer

       

 

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

 4,500 4,463 4,500   

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

 4,500 4,470 4,500 

 

Class A Units (1,500,000 units)(8)

   1,500 3,240   

Class A Units (1,500,000 units)

   1,500 2,180 

    5,963 7,740     5,970 6,680 

    

Condit Exhibits, LLC

 

Tradeshow Exhibits / Custom Displays Provider

        

 

Member Units (3,936 units)(8)

   100 1,840 

  

Congruent Credit Opportunities Funds(12)(13)

 

Investment Partnership

        

Charlotte Russe, Inc(11)

 

Fast-Fashion Retailer to Young Women

       

 

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

   5,730 1,377   

8.50% Secured Debt (Maturity—February 2, 2023)

 7,992 7,992 7,912 

 

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

   17,869 18,577   

Common Stock (19,041 shares)

   3,141 3,141 

    23,599 19,954     11,133 11,053 

    

Dos Rios Partners(12)(13)

 

Investment Partnership

        

Condit Exhibits, LLC

 

Tradeshow Exhibits / Custom Displays Provider

       

 

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

   5,996 5,629   

Member Units (3,936 units)(8)

   100 1,950 

 

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

   1,904 1,651   

    7,900 7,280 

  

Dos Rios Stone Products LLC(10)

 

Limestone and Sandstone Dimension Cut Stone Mining Quarries

        

 

Class A Units (2,000,000 units)(8)

   2,000 2,070 

  

East Teak Fine Hardwoods, Inc.

 

Distributor of Hardwood Products

        

 

Common Stock (6,250 shares)(8)

   480 750 

  

East West Copolymer & Rubber, LLC

 

Manufacturer of Synthetic Rubbers

        

 

12% Current / 2% PIK Secured Debt (Maturity—October 17, 2019)(14)

 9,699 9,591 2,240 

 

Warrants (2,510,790 equivalent units)

   50  

    9,641 2,240 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
   

EIG Fund Investments(12)(13)

 

Investment Partnership

        

Congruent Credit Opportunities Funds(12)(13)

 

Investment Partnership

       

 

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

   1,565 1,466   

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

   5,210 480 

 

LP Interests (EIG Traverse Co-Investment, L.P.) (Fully diluted 22.2%)(8)

   9,805 9,973   

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

   17,869 18,754 

    23,079 19,234 

  

Dos Rios Partners(12)(13)

 

Investment Partnership

       

  

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

   5,996 7,246 

  

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

   1,904 2,182 

    7,900 9,428 

  

Dos Rios Stone Products LLC(10)

 

Limestone and Sandstone Dimension Cut Stone Mining Quarries

       

  

Class A Preferred Units (2,000,000 units)(8)

   2,000 1,350 

  

East Teak Fine Hardwoods, Inc.

 

Distributor of Hardwood Products

       

  

Common Stock (6,250 shares)(8)

   480 630 

  

EIG Fund Investments(12)(13)

 

Investment Partnership

       

    11,370 11,439   

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

   451 403 

    

Freeport Financial Funds(12)(13)

 

Investment Partnership

         

Investment Partnership

       

 

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

   5,974 5,675   

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

   5,974 5,554 

 

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

   7,559 7,507   

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

   8,558 8,506 

    13,533 13,182     14,532 14,060 

    

Gault Financial, LLC (RMB Capital, LLC)

 

Purchases and Manages Collection of Healthcare and other Business Receivables

         

Purchases and Manages Collection of Healthcare and other Business Receivables

       

 

10.5% Secured Debt (Maturity—January 1, 2019)

 12,900 12,900 11,950   

8% Secured Debt (Maturity—January 1, 2019)

 12,483 12,483 11,532 

 

Warrants (29,032 equivalent units)

   400    

Warrants (29,032 equivalent units; Expiration—February 9, 2022; Strike price—$0.01 per unit)

   400  

    13,300 11,950     12,883 11,532 

    

Glowpoint, Inc.

 

Provider of Cloud Managed Video Collaboration Services

        

 

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

 9,000 8,957 3,010 

 

Common Stock (7,711,517 shares)

   3,958 2,270 

    12,915 5,280 

  

Guerdon Modular Holdings, Inc.

 

Multi-Family and Commercial Modular Construction Company

        

 

13% Secured Debt (Maturity—August 13, 2019)

 10,708 10,603 10,603 

 

Preferred Stock (404,998 shares)

   1,140 1,140 

 

Common Stock (212,033 shares)

   2,983 80 

    14,726 11,823 

  

Hawk Ridge Systems, LLC(13)

 

Value-Added Reseller of Engineering Design and Manufacturing Solutions

        

 

10% Secured Debt (Maturity—December 2, 2021)

 10,000 9,905 9,905 

 

Preferred Member Units (226 units)(8)

   2,850 2,850 

 

Preferred Member Units (HRS Services, ULC) (226 units)

   150 150 

    12,905 12,905 

  

Houston Plating and Coatings, LLC

 

Provider of Plating and Industrial Coating Services

        

 

Member Units (265,756 units)

   1,429 4,230 

  

I-45 SLF LLC(12)(13)

 

Investment Partnership

        

 

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

   15,200 15,907 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
   

Indianhead Pipeline Services, LLC

 

Provider of Pipeline Support Services

        

Guerdon Modular Holdings, Inc.

 

Multi-Family and Commercial Modular Construction Company

       

 

12% Secured Debt (Maturity—February 6, 2018)

 5,417 5,417 5,417   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 10.19%, Secured Debt (Maturity—March 1, 2019)(9)

 400 394 394 

 

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

   2,437 2,775   

13% Secured Debt (Maturity—March 1, 2019)

 10,988 10,926 10,926 

 

Warrants (31,928 equivalent units)

   459    

Preferred Stock (404,998 shares)

   1,140  

 

Member Units (14,732 units)

   1    

Common Stock (212,033 shares)

   2,983  

    8,314 8,192     15,443 11,320 

    

KBK Industries, LLC

 

Manufacturer of Specialty Oilfield and Industrial Products

        

Harris Preston Fund Investments(12)(13)

 

Investment Partnership

       

  

LP Interests (HPEP 3, L.P.) (Fully diluted 9.9%)

   1,033 1,033 

  

Hawk Ridge Systems, LLC(13)

 

Value-Added Reseller of Engineering Design and Manufacturing Solutions

       

 

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

 1,175 1,175 1,175   

10.5% Secured Debt (Maturity—December 2, 2021)

 14,300 14,181 14,300 

 

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

 5,900 5,892 5,892   

Preferred Member Units (226 units)(8)

   2,850 6,223 

 

Member Units (250 units)

   341 2,780   

Preferred Member Units (HRS Services, ULC) (226 units)(8)

   150 328 

    7,408 9,847     17,181 20,851 

    

L.F. Manufacturing Holdings, LLC(10)

 

Manufacturer of Fiberglass Products

        

 

Member Units (2,179,001 units)

   2,019 1,380 

  

OnAsset Intelligence, Inc.

 

Provider of Transportation Monitoring / Tracking Products and Services

        

 

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

 4,654 4,654 4,654 

Houston Plating and Coatings, LLC

 

Provider of Plating and Industrial Coating Services

       

 

Preferred Stock (912 shares; 7% cumulative)

   1,981    

8% Unsecured Convertible Debt (Maturity—May 1, 2022)

 3,000 3,000 3,200 

 

Warrants (5,333 equivalent shares)

   1,919    

Member Units (315,756 units)(8)

   2,179 6,660 

    8,554 4,654     5,179 9,860 

    

OPI International Ltd.(13)

 

Provider of Man Camp and Industrial Storage Services

        

I-45 SLF LLC(12)(13)

 

Investment Partnership

       

  

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

   16,200 16,841 

  

L.F. Manufacturing Holdings, LLC(10)

 

Manufacturer of Fiberglass Products

       

  

Member Units (2,179,001 units)

   2,019 2,000 

  

Meisler Operating LLC

 

Provider of Short-term Trailer and Container Rental

       

 

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

 473 473 473   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 10.20%, Secured Debt (Maturity—June 7, 2022)(9)

 18,960 18,779 18,779 

 

Common Stock (20,766,317 shares)

   1,371 380   

Member Units (Milton Meisler Holdings LLC) (48,555 units)

   4,855 5,570 

    1,844 853     23,634 24,349 

    

PCI Holding Company, Inc.

 

Manufacturer of Industrial Gas Generating Systems

        

 

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

 13,000 12,908 13,000 

 

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

   3,551 5,540 

    16,459 18,540 

  

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)(15)

 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)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
 

OnAsset Intelligence, Inc.

 

Provider of Transportation Monitoring / Tracking Products and Services

       

  

12% PIK Secured Debt (Maturity—June 30, 2021)(19)

 5,247 5,247 5,247 

  

10% PIK Unsecured Debt (Maturity—June 30, 2021)(19)

 49 49 49 

  

Preferred Stock (912 shares)

   1,981  

  

Warrants (5,333 equivalent shares; Expiration—April 18, 2021; Strike price—$0.01 per share)

   1,919  

    9,196 5,296 

  

OPI International Ltd.(13)

 

Provider of Man Camp and Industrial Storage Services

       

  

Common Stock (20,766,317 shares)

   1,371  

  

PCI Holding Company, Inc.

 

Manufacturer of Industrial Gas Generating Systems

       

  

12% Current / 3% PIK Secured Debt (Maturity—March 31, 2019)(19)

 12,617 12,571 12,571 

  

Preferred Stock (1,740,000 shares) (non-voting)

   1,740 3,480 

  

Preferred Stock (1,500,000 shares; 20% cumulative)(8)(19)

   3,927 290 

    18,238 16,341 

  

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)(15)

 30,785 30,281 250 

  

Preferred Member Units (250 units)

   2,500  

    32,781 250 
   

Tin Roof Acquisition Company

 

Casual Restaurant Group

         

Casual Restaurant Group

       

 

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

 13,342 13,232 13,232   

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

 12,559 12,515 12,515 

 

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

   2,807 2,807   

Class C Preferred Stock (Fully diluted 10.0%; 10% cumulative)(8)(19)

   3,102 3,102 

    16,039 16,039     15,617 15,617 

    

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)

 5,021 5,011 5,021 

 

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

 826 826 826 

 

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

 773 773 773 

 

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

   6,248 6,620 

 

Common Stock (705,054 shares)

    2,810 

    12,858 16,050 

  

Universal Wellhead Services Holdings, LLC(10)

 

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

        

 

Preferred Member Units (UWS Investments, LLC) (716,949 units; 14% cumulative)

   717 720 

 

Member Units (UWS Investments, LLC) (4,000,000 units)

   4,000 610 

    4,717 1,330 

  

Valley Healthcare Group, LLC

 

Provider of Durable Medical Equipment

        

 

LIBOR Plus 12.50% (Floor 0.50%), Current Coupon 13.28%, Secured Debt (Maturity—December 29, 2020)(9)

 12,856 12,750 12,750 

 

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

   1,600 1,600 

    14,350 14,350 

  

Volusion, LLC

 

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

        

 

11.5% Secured Debt (Maturity—January 26, 2020)

 17,500 15,439 15,439 

 

Preferred Member Units (4,876,670 units)

   14,000 14,000 

 

Warrants (1,831,355 equivalent units)

   2,576 2,450 

    32,015 31,889 

Subtotal Affiliate Investments (16.6% of total investments at fair value)

 $373,895 $329,024 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

UniTek Global Services, Inc.(11)

 

Provider of Outsourced Infrastructure Services

            

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 10.81%, Secured Debt (Maturity—January 13, 2019)(9)

  8,535  8,531  8,535 

   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 9.81% / 1.00% PIK, Current Coupon Plus PIK 10.81%, Secured Debt (Maturity—January 13, 2019)(9)(19)

  138  138  138 

   

15% PIK Unsecured Debt (Maturity—July 13, 2019)(19)

  897  897  897 

   

Preferred Stock (2,596,567 shares; 19% cumulative)(8)(19)

     2,993  2,980 

   

Preferred Stock (4,935,377 shares; 13.5% cumulative)(8)(19)

     7,609  7,560 

   

Common Stock (1,075,992 shares)

       2,680 

         20,168  22,790 

              

Universal Wellhead Services Holdings, LLC(10)

 

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

            

   

Preferred Member Units (UWS Investments, LLC) (716,949 units)

     717  860 

   

Member Units (UWS Investments, LLC) (4,000,000 units)

     4,000  2,030 

         4,717  2,890 

              

Valley Healthcare Group, LLC

 

Provider of Durable Medical Equipment

            

   

LIBOR Plus 12.50% (Floor 0.50%), Current Coupon 14.16%, Secured Debt (Maturity—December 29, 2020)(9)

  11,646  11,571  11,571 

   

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

     1,600  1,740 

         13,171  13,311 

              

Volusion, LLC

 

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

            

   

11.5% Secured Debt (Maturity—January 26, 2020)

  16,734  15,358  15,358 

   

Preferred Member Units (4,876,670 units)

     14,000  14,000 

   

Warrants (1,831,355 equivalent units; Expiration—January 26, 2025; Strike price—$0.01 per unit)

     2,577  1,471 

         31,935  30,829 

Subtotal Affiliate Investments (15.5% of total investments at fair value)

    $382,351 $359,460 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
   

Non-Control/Non-Affiliate Investments(7)

Non-Control/Non-Affiliate Investments(7)

      

Non-Control/Non-Affiliate Investments(7)

      

  

AAC Holdings, Inc.(11)(13)

 

Substance Abuse Treatment Service Provider

       

  

LIBOR Plus 6.75% (Floor 1.00%), Current Coupon 8.52%, Secured Debt (Maturity—June 30, 2023)(9)

 $14,782 $14,489 $15,041 

    

Adams Publishing Group, LLC(10)

 

Local Newspaper Operator

         

Local Newspaper Operator

       

 

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

 $7,589 $7,478 $7,589   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 9.30%, Secured Debt (Maturity—November 3, 2020)(9)

 9,894 9,678 9,894 

    

ADS Tactical, Inc.(10)

 

Value-Added Logistics and Supply Chain Provider to the Defense Industry

         

Value-Added Logistics and Supply Chain Provider to the Defense Industry

       

  

LIBOR Plus 7.50% (Floor 0.75%), Current Coupon 9.81%, Secured Debt (Maturity—December 31, 2022)(9)

 12,948 12,712 12,778 

  

Aethon United BR LP(10)

 

Oil & Gas Exploration & Production

       

 

LIBOR Plus 7.50% (Floor 0.75%), Current Coupon 8.50%, Secured Debt (Maturity—December 31, 2022)(9)

 11,500 11,258 11,258   

LIBOR Plus 6.75% (Floor 1.00%), Current Coupon 8.46%, Secured Debt (Maturity—September 8, 2023)(9)

 3,438 3,390 3,390 

    

Ahead, LLC(10)

 

IT Infrastructure Value Added Reseller

         

IT Infrastructure Value Added Reseller

       

 

LIBOR Plus 6.50%, Current Coupon 7.65%, Secured Debt (Maturity—November 2, 2020)

 14,063 13,742 13,922   

LIBOR Plus 6.50%, Current Coupon 8.81%, Secured Debt (Maturity—November 2, 2020)

 8,434 8,283 8,487 

    

Allflex Holdings III Inc.(11)

 

Manufacturer of Livestock Identification Products

         

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 14,710 14,826   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.74%, Secured Debt (Maturity—July 19, 2021)(9)

 13,846 13,785 13,935 

    

American Scaffold Holdings, Inc.(10)

 

Marine Scaffolding Service Provider

         

Marine Scaffolding Service Provider

       

 

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

 7,313 7,216 7,276   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 8.80%, Secured Debt (Maturity—March 31, 2022)(9)

 6,938 6,858 6,903 

    

American Teleconferencing Services, Ltd.(11)

 

Provider of Audio Conferencing and Video Collaboration Solutions

         

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)

 11,018 10,242 11,018   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 8.29%, Secured Debt (Maturity—December 8, 2021)(9)

 15,592 14,964 15,588 

 

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity—June 6, 2022)(9)

 3,714 3,573 3,573   

    13,815 14,591 

  

Anchor Hocking, LLC(11)

 

Household Products Manufacturer

         

Household Products Manufacturer

       

 

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

 2,271 2,271 2,226   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 11.02%, Secured Debt (Maturity—June 4, 2020)(9)

 2,248 2,209 2,226 

 

Member Units (440,620 units)

   4,928 3,305   

Member Units (440,620 units)

   4,928 3,718 

    7,199 5,531     7,137 5,944 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

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)

 7,190 7,086 7,258 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 

    

Apex Linen Service, Inc.

 

Industrial Launderers

         

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   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.66%, Secured Debt (Maturity—October 30, 2022)(9)

 2,400 2,400 2,400 

 

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

 14,416 14,340 14,340   

16% Secured Debt (Maturity—October 30, 2022)

 14,416 14,349 14,349 

    16,740 16,740     16,749 16,749 

    

Arcus Hunting LLC.(10)

 

Manufacturer of Bowhunting and Archery Products and Accessories

         

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)

 13,912 13,773 13,912   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.69%, Secured Debt (Maturity—November 13, 2019)(9)

 14,175 14,091 14,175 

    

Artel, LLC(11)

 

Provider of Secure Satellite Network and IT Solutions

        

Arise Holdings, Inc.(10)

 

Tech-Enabled Business Process Outsourcing

       

 

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

 7,330 7,215 7,330   

Preferred Stock (1,000,000 shares)

   1,000 1,000 

    

ATI Investment Sub, Inc.(11)

 

Manufacturer of Solar Tracking Systems

         

Manufacturer of Solar Tracking Systems

       

 

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

 9,250 9,083 9,227   

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 9.13%, Secured Debt (Maturity—June 22, 2021)(9)

 7,114 6,974 7,106 

    

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)

 6,173 6,149 5,659 

  

ATX Networks Corp.(11)(13)

 

Provider of Radio Frequency Management Equipment

        

ATX Networks Corp.(11)(13)(21)

 

Provider of Radio Frequency Management Equipment

       

 

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.15%, Secured Debt (Maturity—June 11, 2021)(9)

 9,765 9,620 9,668   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.31% / 1.00% PIK, Current Coupon Plus PIK 8.31%, Secured Debt (Maturity—June 11, 2021)(9)(19)

 9,515 9,414 8,849 

    

Berry Aviation, Inc.(10)

 

Airline Charter Service Operator

         

Airline Charter Service Operator

       

 

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

 5,627 5,590 5,627   

Common Stock (553 shares)

   400 1,470 

 

Common Stock (553 shares)

   400 820   

BigName Commerce, LLC(10)

 

Provider of Envelopes and Complimentary Stationery Products

       

  

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.94%, Secured Debt (Maturity—May 11, 2022)(9)

 2,472 2,446 2,446 

  

Binswanger Enterprises, LLC(10)

 

Glass Repair and Installation Service Provider

       

  

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 10.31%, Secured Debt (Maturity—March 9, 2022)(9)

 15,267 15,016 15,148 

  

Member Units (1,050,000 units)

   1,050 1,000 

    5,990 6,447     16,066 16,148 

    

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

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

Binswanger Enterprises, LLC(10)

 

Glass Repair and Installation Service Provider

        

 

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.06%, Secured Debt (Maturity—March 9, 2022)(9)

 15,460 15,155 15,155 

 

Member Units (1,050,000 units)

   1,050 1,050 

    16,205 16,205 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 

    

Bluestem Brands, Inc.(11)

 

Multi-Channel Retailer of General Merchandise

         

Multi-Channel Retailer of General Merchandise

       

 

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

 12,692 12,466 10,471   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 9.38%, Secured Debt (Maturity—November 6, 2020)(9)

 11,939 11,781 8,417 

    

Brainworks Software, LLC(10)

 

Advertising Sales and Newspaper Circulation Software

         

Advertising Sales and Newspaper Circulation Software

       

 

Prime Plus 9.25% (Floor 3.25%), Current Coupon 13.25%, Secured Debt (Maturity—July 22, 2019)(9)

 6,733 6,688 6,491   

Prime Plus 9.25% (Floor 3.25%), Current Coupon 14.00%, Secured Debt (Maturity—July 22, 2019)(9)

 6,733 6,709 6,577 

    

Brightwood Capital Fund Investments(12)(13)

 

Investment Partnership

         

Investment Partnership

       

 

LP Interests (Brightwood Capital Fund III, LP) (Fully diluted 1.6%)(8)

   12,000 10,271   

LP Interests (Brightwood Capital Fund III, LP) (Fully diluted 1.6%)(8)

   12,000 10,463 

 

LP Interests (Brightwood Capital Fund IV, LP) (Fully diluted 0.9%)

   500 500   

LP Interests (Brightwood Capital Fund IV, LP) (Fully diluted 0.8%)(8)

   1,000 1,063 

    12,500 10,771     13,000 11,526 

    

Brundage-Bone Concrete Pumping, Inc.(11)

 

Construction Services Provider

         

Construction Services Provider

       

 

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

 3,000 2,986 3,150   

10.375% Secured Debt (Maturity—September 1, 2023)

 3,000 2,988 3,195 

    

Cadence Aerospace LLC(10)

 

Aerostructure Manufacturing

       

  

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 8.33%, Secured Debt (Maturity—November 14, 2023)(9)

 14,963 14,820 14,820 

  

California Pizza Kitchen, Inc.(11)

 

Casual Restaurant Group

         

Casual Restaurant Group

       

  

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.88%, Secured Debt (Maturity—August 23, 2022)(9)

 12,837 12,799 12,606 

  

CapFusion, LLC(13)

 

Non-Bank Lender to Small Businesses

       

 

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

 7,967 7,922 7,969   

13% Secured Debt (Maturity—March 25, 2021)(14)

 6,266 5,206 1,432 

    

CDHA Management, LLC(10)

 

Dental Services

         

Dental Services

       

 

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—December 5, 2021)(9)

 4,227 4,154 4,154   

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.76%, Secured Debt (Maturity—December 5, 2021)(9)

 5,062 5,006 5,062 

    

Cengage Learning Acquisitions, Inc.(11)

 

Provider of Educational Print and Digital Services

        

Central Security Group, Inc.(11)

 

Security Alarm Monitoring Service Provider

       

 

LIBOR Plus 4.25% (Floor 1.00%), Current Coupon 5.25%, Secured Debt (Maturity—June 7, 2023)(9)

 9,459 8,854 9,049   

LIBOR Plus 5.63% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—October 6, 2021)(9)

 7,461 7,444 7,480 

    

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(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)

  15,130  13,073  12,482 

              

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  14,160  9,134 

              

Clarius BIGS, LLC(10)

 

Prints & Advertising Film Financing

            

   

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

  2,928  2,928  88 

              

Compact Power Equipment, Inc.

 

Equipment / Tool Rental

            

   

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

  4,100  4,097  4,100 

   

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

     1,079  4,580 

         5,176  8,680 

              

Construction Supply Investments, LLC(10)(13)

 

Distribution Platform of Specialty Construction Materials to Professional Concrete and Masonry Contractors

            

   

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity—June 30, 2023)(9)

  8,500  8,418  8,418 

   

Member Units (20,000 units)

     2,000  2,000 

         10,418  10,418 

              

ContextMedia Health, LLC(11)

 

Provider of Healthcare Media Content

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—December 23, 2021)(9)

  7,900  7,132  7,900 

              

Covenant Surgical Partners, Inc.(11)

 

Ambulatory Surgical Centers

            

   

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

  2,800  2,744  2,660 

              

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)

  9,102  9,096  9,011 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

Cenveo Corporation(11)

 

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

            

   

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.79%, Secured Debt (Maturity—November 2, 2018)(9)

  6,089  6,038  6,119 

   

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

  19,130  17,126  8,609 

         23,164  14,728 

              

Chloe Ox Parent, LLC(11)

 

In-Home Health Risk Assessment Provider

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 7.30%, Secured Debt (Maturity—December 23, 2024)(9)

  7,400  7,328  7,492 

              

Clarius BIGS, LLC(10)

 

Prints & Advertising Film Financing

            

   

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

  2,924  2,924  82 

              

Clickbooth.com, LLC(10)

 

Provider of Digital Advertising Performance Marketing Solutions

            

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 10.19%, Secured Debt (Maturity—December 5, 2022)(9)

  2,981  2,925  2,925 

              

Community Care Health Network, LLC(11)

 

In-Home Health Risk Assessment Provider

            

   

LIBOR Plus 4.75% (Floor 1.00%), Current Coupon 6.74%, Secured Debt (Maturity—February 16, 2025)(9)

  3,188  3,180  3,215 

              

Construction Supply Investments, LLC(10)

 

Distribution Platform of Specialty Construction Materials to Professional Concrete and Masonry Contractors

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.88%, Secured Debt (Maturity—June 30, 2023)(9)

  6,938  6,905  6,920 

   

Member Units (28,000 units)

     3,723  3,723 

         10,628  10,643 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
 

CTVSH, PLLC(10)

 

Emergency Care and Specialty Service Animal Hospital

       

  

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 10.01%, Secured Debt (Maturity—August 3, 2022)(9)

 11,700 11,595 11,595 
   

Darr Equipment LP(10)

 

Heavy Equipment Dealer

         

Heavy Equipment Dealer

       

 

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

 21,236 20,828 20,879   

11.5% Current / 1% PIK Secured Debt (Maturity—June 22, 2023)(19)

 7,247 7,247 7,247 

 

Warrants (915,734 equivalent units)

   474 10   

Warrants (915,734 equivalent units; Expiration—December 23, 2023; Strike price—$1.50 per unit)

   474 10 

    21,302 20,889     7,721 7,257 

    

Digital River, Inc.(11)

 

Provider of Outsourced e-Commerce Solutions and Services

         

Provider of Outsourced e-Commerce Solutions and Services

       

 

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.63%, Secured Debt (Maturity—February 12, 2021)(9)

 15,184 15,091 15,260   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 8.61%, Secured Debt (Maturity—February 12, 2021)(9)

 10,146 10,052 10,146 

    

Digital Room LLC(11)

 

Pure-Play e-Commerce Print Business

        

 

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—November 21, 2022)(9)

 7,530 7,385 7,454 

  

Drilling Info Holdings, Inc.

 

Information Services for the Oil and Gas Industry

         

Information Services for the Oil and Gas Industry

       

 

Common Stock (3,788,865 shares)

   1,335 10,100 

  

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 5,592 5,625   

Common Stock (3,788,865 shares)(8)

    9,010 

    

EnCap Energy Fund Investments(12)(13)

 

Investment Partnership

         

Investment Partnership

       

 

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

   3,791 2,225   

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

   3,487 1,623 

 

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

   2,200 1,413   

LP Interests (EnCap Energy Capital Fund VIII Co-Investors, L.P.) (Fully diluted 0.4%)(8)

   2,072 1,122 

 

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

   3,908 3,696   

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

   4,317 3,732 

 

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

   3,353 3,353   

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

   6,870 6,933 

 

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

   8,757 9,983   

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

   5,864 5,015 

 

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

   2,715 2,716   

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

   3,015 2,716 

    24,724 23,386     25,625 21,141 

    

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

 

Technology-based Performance Support Solutions

         

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 6,862 4,888   

LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 10.13%, Secured Debt (Maturity—April 28, 2022)(9)

 6,999 6,883 6,264 

    

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
 

Extreme Reach, Inc.(11)

 

Integrated TV and Video Advertising Platform

       

  

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 8.13%, Secured Debt (Maturity—February 7, 2020)(9)

 14,217 14,205 14,199 

  

Felix Investments Holdings II(10)

 

Oil & Gas Exploration & Production

       

  

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 8.30%, Secured Debt (Maturity—August 9, 2022)(9)

 3,333 3,270 3,270 
   

Flavors Holdings Inc.(11)

 

Global Provider of Flavoring and Sweetening Products and Solutions

         

Global Provider of Flavoring and Sweetening Products

       

 

LIBOR Plus 5.75% (Floor 1.00%), Current Coupon 6.90%, Secured Debt (Maturity—April 3, 2020)(9)

 13,661 13,056 11,800   

LIBOR Plus 5.75% (Floor 1.00%), Current Coupon 8.05%, Secured Debt (Maturity—April 3, 2020)(9)

 12,881 12,470 11,657 

    

GI KBS Merger Sub LLC(11)

 

Outsourced Janitorial Services to Retail/Grocery Customers

         

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)

 6,900 6,812 6,814   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.98%, Secured Debt (Maturity—October 29, 2021)(9)

 9,270 9,200 9,351 

 

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

 3,800 3,642 3,648   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 10.27%, Secured Debt (Maturity—April 29, 2022)(9)

 3,915 3,775 3,974 

    10,454 10,462     12,975 13,325 

    

Grace Hill, LLC(10)

 

Online Training Tools for the Multi-Family Housing Industry

        

 

Prime Plus 5.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—August 15, 2019)(9)

 883 873 883 

 

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.36%, Secured Debt (Maturity—August 15, 2019)(9)

 11,494 11,421 11,494 

GoWireless Holdings, Inc.(11)

 

Provider of Wireless Telecommunications Carrier Services

       

    12,294 12,377   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 8.38%, Secured Debt (Maturity—December 22, 2024)(9)

 17,775 17,601 17,753 

    

Great Circle Family Foods, LLC(10)

 

Quick Service Restaurant Franchise

         

Quick Service Restaurant Franchise

       

 

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

 7,547 7,502 7,547   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.69%, Secured Debt (Maturity—October 28, 2019)(9)

 7,119 7,091 7,119 

    

Grupo Hima San Pablo, Inc.(11)

 

Tertiary Care Hospitals

         

Tertiary Care Hospitals

       

 

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

 4,800 4,780 3,456   

LIBOR Plus 7.00% (Floor 1.50%), Current Coupon 8.77%, Secured Debt (Maturity—January 31, 2018)(9)(17)

 4,750 4,750 3,543 

 

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

 2,000 1,967 300   

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

 2,055 2,040 226 

    6,747 3,756     6,790 3,769 

    

GST Autoleather, Inc.(11)

 

Automotive Leather Manufacturer

        

 

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.65%, Secured Debt (Maturity—July 10, 2020)(9)

 14,305 14,188 14,001 

  

Guitar Center, Inc.(11)

 

Musical Instruments Retailer

        

 

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

 15,625 14,863 13,125 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

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

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)

  5,776  5,732  5,776 

              

Hoover Group, Inc.(10)(13)

 

Provider of Storage Tanks and Related Products to the Energy and Petrochemical Markets

            

   

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.30%, Secured Debt (Maturity—January 28, 2021)(9)

  8,524  7,972  7,928 

              

Hostway Corporation(11)

 

Managed Services and Hosting Provider

            

   

LIBOR Plus 6.75% (Floor 1.25%), Current Coupon 8.00%, Secured Debt (Maturity—December 13, 2019)(9)

  10,426  10,370  10,215 

              

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)

  9,400  8,960  8,742 

              

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)

  13,128  12,726  13,079 

              

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)

  3,646  3,490  3,673 

              

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)

  8,688  8,673  8,688 

              

Industrial Services Acquisition, LLC(10)

 

Industrial Cleaning Services

            

   

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

  4,527  4,444  4,444 

   

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

     900  810 

         5,344  5,254 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 2017

(dollars in thousands)

(Unaudited)

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

Infinity Acquisition Finance Corp.(11)

 

Application Software for Capital Markets

            

   

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

  5,700  5,378  5,216 

              

Inn of the Mountain Gods Resort and Casino(11)

 

Hotel & Casino Owner & Operator

            

   

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

  6,249  5,941  5,624 

              

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)

  4,301  4,243  4,344 

              

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)

  16,918  16,909  16,833 

              

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)

  9,787  9,653  9,566 

              

irth Solutions, LLC

 

Provider of Damage Prevention Information Technology Services

            

   

Member Units (27,893 units)

     1,441  1,920 

              

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)

  4,473  4,457  4,473 

              

Joerns Healthcare, LLC(11)

 

Manufacturer and Distributor of Health Care Equipment & Supplies

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.05% / 0.50% PIK, Current Coupon Plus PIK 7.55%, Secured Debt (Maturity—May 9, 2020)(9)

  14,617  14,493  13,156 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

Guitar Center, Inc.(11)

 

Musical Instruments Retailer

            

   

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

  16,625  16,118  16,558 

              

Hojeij Branded Foods, LLC(10)

 

Multi-Airport, Multi- Concept Restaurant Operator

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.89%, Secured Debt (Maturity—July 20, 2022)(9)

  12,107  11,999  12,107 

              

Hoover Group, Inc.(10)(13)

 

Provider of Storage Tanks and Related Products to the Energy and Petrochemical Markets

            

   

LIBOR Plus 6.00%, Current Coupon 7.75%, Secured Debt (Maturity—January 28, 2020)

  7,500  6,744  6,703 

   

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 9.15%, Secured Debt (Maturity—January 28, 2021)(9)

  8,438  7,995  7,805 

         14,739  14,508 

              

Hostway Corporation(11)

 

Managed Services and Hosting Provider

            

   

LIBOR Plus 5.25% (Floor 1.25%), Current Coupon 6.94% / 0.50% PIK, Current Coupon Plus PIK 7.44%, Secured Debt (Maturity—December 13, 2019)(9)(19)

  30,610  29,860  29,769 

              

Houghton Mifflin Harcourt Publishers Inc.(11)(13)

 

Provider of Educational Print and Digital Services

            

   

LIBOR Plus 3.00% (Floor 1.00%), Current Coupon 4.88%, Secured Debt (Maturity—May 28, 2021)(9)

  15,224  14,279  13,949 

              

Hunter Defense Technologies, Inc.(10)

 

Provider of Military and Commercial Shelters and Systems

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 9.30%, Secured Debt (Maturity—March 29, 2023)(9)

  41,022  40,099  40,099 

              

Hydrofarm Holdings LLC(10)

 

Wholesaler of Horticultural Products

            

   

LIBOR Plus 7.00%, Current Coupon 8.73%, Secured Debt (Maturity—May 12, 2022)

  6,623  6,510  6,236 

              

iEnergizer Limited(11)(13)(21)

 

Provider of Business Outsourcing Solutions

            

   

LIBOR Plus 6.00% (Floor 1.25%), Current Coupon 7.88%, Secured Debt (Maturity—May 1, 2019)(9)

  11,758  11,571  11,773 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

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

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)

  5,248  5,236  5,221 

              

LaMi Products, LLC(10)

 

General Merchandise Distribution

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.62%, Secured Debt (Maturity—September 16, 2020)(9)

  11,044  10,971  11,044 

              

Larchmont Resources, LLC(11)

 

Oil & Gas Exploration & Production

            

   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, PIK Secured Debt (Maturity—August 7, 2020)(9)

  2,316  2,316  2,308 

   

Member Units (Larchmont Intermediate Holdco, LLC) (2,828 units)

     353  954 

         2,669  3,262 

              

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

 

Investment Partnership

            

   

LP Interests (Fully diluted 2.3%)

     2,500  3,967 

              

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)

  8,515  8,386  8,515 

              

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)

     132  132 

         445  445 

              

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)

  14,403  14,331  14,403 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

Implus Footcare, LLC(10)

 

Provider of Footwear and Related Accessories

            

   

LIBOR Plus 6.75% (Floor 1.00%), Current Coupon 8.74%, Secured Debt (Maturity—April 30, 2021)(9)

  19,270  19,029  19,156 

              

Industrial Services Acquisition, LLC(10)

 

Industrial Cleaning Services

            

   

6% Current / 7% PIK Unsecured Debt (Maturity—December 17, 2022)(19)

  4,633  4,561  4,414 

   

Preferred Member Units (Industrial Services Investments, LLC) (144 units; 10% cumulative)(8)(19)

     88  86 

   

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

     900  300 

         5,549  4,800 

              

Inn of the Mountain Gods Resort and Casino(11)

 

Hotel & Casino Owner & Operator

            

   

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

  6,249  6,013  5,687 

              

iPayment, Inc.(11)

 

Provider of Merchant Acquisition

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.62%, Secured Debt (Maturity—April 11, 2023)(9)

  11,970  11,865  12,120 

              

irth Solutions, LLC

 

Provider of Damage Prevention Information Technology Services

            

   

Member Units (27,893 units)

     1,441  1,970 

              

Jacent Strategic Merchandising, LLC(10)

 

General Merchandise Distribution

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 8.53%, Secured Debt (Maturity—September 16, 2020)(9)

  10,982  10,931  10,982 

              

Jackmont Hospitality, Inc.(10)

 

Franchisee of Casual Dining Restaurants

            

   

LIBOR Plus 6.75% (Floor 1.00%), Current Coupon 8.40%, Secured Debt (Maturity—May 26, 2021)(9)

  4,275  4,265  4,275 

              

Jacuzzi Brands LLC(11)

 

Manufacturer of Bath and Spa Products

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 9.30%, Secured Debt (Maturity—June 28, 2023)(9)

  3,925  3,854  3,964 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

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)

  15,778  15,505  15,505 

   

Warrants (1,437,409 equivalent units)

     280  800 

         15,785  16,305 

              

Mood Media Corporation(11)(13)

 

Provider of Electronic Equipment

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.15%, Secured Debt (Maturity—May 1, 2019)(9)

  14,767  14,623  14,700 

              

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)

  14,850  14,610  14,775 

              

NNE Partners, LLC(10)

 

Oil & Gas Exploration & Production

            

   

LIBOR Plus 8.00%, Current Coupon 9.07%, Secured Debt (Maturity—March 2, 2022)

  7,292  7,220  7,220 

              

North American Lifting Holdings, Inc.(11)

 

Crane Service Provider

            

   

LIBOR Plus 4.50% (Floor 1.00%), Current Coupon 5.65%, Secured Debt (Maturity—November 27, 2020)(9)

  7,805  6,792  7,370 

              

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)

  4,091  4,035  4,070 

              

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  1,779 

              

Pardus Oil and Gas, LLC(11)

 

Oil & Gas Exploration & Production

            

   

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

  1,928  1,928  1,809 

   

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

  1,004  1,004  489 

   

Member Units (2,472 units)

     2,472   

         5,404  2,298 

              

Paris Presents Incorporated(11)

 

Branded Cosmetic and Bath Accessories

            

   

LIBOR Plus 8.75% (Floor 1.00%), Current Coupon 9.75%, Secured Debt (Maturity—December 31, 2021)(9)

  2,000  1,970  1,960 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

Joerns Healthcare, LLC(11)

 

Manufacturer and Distributor of Health Care Equipment & Supplies

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.98% Secured Debt (Maturity—May 9, 2020)(9)

  13,387  13,307  12,439 

              

Keypoint Government Solutions, Inc.(10)

 

Provider of Pre-Employment Screening Services

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.73%, Secured Debt (Maturity—April 18, 2024)(9)

  11,875  11,769  11,875 

              

Larchmont Resources, LLC(11)

 

Oil & Gas Exploration & Production

            

   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.53%, PIK Secured Debt (Maturity—August 7, 2020)(9)(19)

  2,504  2,504  2,479 

   

Member Units (Larchmont Intermediate Holdco, LLC) (2,828 units)

     353  919 

         2,857  3,398 

              

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

 

Investment Partnership

            

   

LP Interests (Fully diluted 2.3%)

     2,069  4,234 

              

Logix Acquisition Company, LLC(10)

 

Competitive Local Exchange Carrier

            

   

LIBOR Plus 5.75% (Floor 1.00%), Current Coupon 7.60%, Secured Debt (Maturity—December 22, 2024)(9)

  9,704  9,500  9,753 

              

Looking Glass Investments, LLC(12)(13)

 

Specialty Consumer Finance

            

   

Member Units (2.5 units)

     125  57 

   

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

     89  72 

         214  129 

              

LSF9 Atlantis Holdings, LLC(11)

 

Provider of Wireless Telecommunications Carrier Services

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.69%, Secured Debt (Maturity—May 1, 2023)(9)

  9,899  9,872  9,879 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

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

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  7,399  7,481 

              

Permian Holdco 2, Inc.(11)

 

Storage Tank Manufacturer

            

   

14% PIK Unsecured Debt (Maturity—October 15, 2021)

  205  205  205 

   

Preferred Stock (Permian Holdco 1, Inc.) (154,558 units)

     799  799 

   

Common Stock (Permian Holdco 1, Inc.) (154,558 units)

        

         1,004  1,004 

              

Pernix Therapeutics Holdings, Inc.(10)

 

Pharmaceutical Royalty

            

   

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

  3,214  3,214  1,151 

              

Pike Corporation(11)

 

Construction and Maintenance Services for Electric Transmission and Distribution Infrastructure

            

   

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.00%, Secured Debt (Maturity—September 10, 2024)(9)

  3,000  2,970  3,053 

              

Point.360(10)

 

Fully Integrated Provider of Digital Media Services

            

   

Warrants (65,463 equivalent shares)

     69   

   

Common Stock (163,658 shares)

     273  34 

         342  34 

              

PPC/SHIFT LLC(10)

 

Provider of Digital Solutions to Automotive Industry

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—December 22, 2021)(9)

  6,956  6,815  6,815 

              

Prowler Acquisition Corp.(11)

 

Specialty Distributor to the Energy Sector

            

   

LIBOR Plus 4.50% (Floor 1.00%), Current Coupon 5.65%, Secured Debt (Maturity—January 28, 2020)(9)

  10,706  8,942  8,832 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

Lulu's Fashion Lounge, LLC(10)

 

Fast Fashion E-Commerce Retailer

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.88%, Secured Debt (Maturity—August 28, 2022)(9)

  13,125  12,753  13,519 

              

Messenger, LLC(10)

 

Supplier of Specialty Stationery and Related Products to the Funeral Industry

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 8.36%, Secured Debt (Maturity—September 9, 2020)(9)

  17,283  17,208  17,283 

              

Minute Key, Inc.

 

Operator of Automated Key Duplication Kiosks

            

   

Warrants (1,437,409 equivalent shares; Expiration—May 20, 2025; Strike price—$0.01 per share)

     280  1,170 

              

NBG Acquisition Inc(11)

 

Wholesaler of Home Décor Products

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 7.95%, Secured Debt (Maturity—April 26, 2024)(9)

  4,375  4,311  4,391 

              

New Media Holdings II LLC(11)(13)

 

Local Newspaper Operator

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 8.13%,

  19,965  19,594  20,096 

   

Secured Debt (Maturity—July 14, 2022)(9)

          

              

NNE Partners, LLC(10)

 

Oil & Gas Exploration & Production

            

   

LIBOR Plus 8.00%, Current Coupon 10.02%, Secured Debt (Maturity—March 2, 2022)

  15,458  15,326  15,326 

              

North American Lifting Holdings, Inc.(11)

 

Crane Service Provider

            

   

LIBOR Plus 4.50% (Floor 1.00%), Current Coupon 6.80%, Secured Debt (Maturity—November 27, 2020)(9)

  7,725  6,956  7,308 

              

Novetta Solutions, LLC(11)

 

Provider of Advanced Analytics Solutions for Defense Agencies

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.88%, Secured Debt (Maturity—October 17, 2022)(9)

  15,559  15,105  15,144 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

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 6.50% (Floor 1.00%), Current Coupon 7.55%, Secured Debt (Maturity—November 30, 2021)(9)

  17,700  17,465  17,465 

              

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)

  11,245  11,176  10,908 

              

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)

  4,160  4,093  4,197 

              

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)

  13,125  12,754  13,141 

              

Renaissance Learning, Inc.(11)

 

Technology-based K-12 Learning Solutions

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.15%, Secured Debt (Maturity—April 11, 2022)(9)

  3,000  2,979  2,999 

              

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)

  3,910  3,830  1,036 

              

RM Bidder, LLC(10)

 

Scripted and Unscripted TV and Digital Programming Provider

            

   

Warrants (327,532 equivalent units)

     425   

   

Member Units (2,779 units)

     46  33 

         471  33 

              

SAExploration, Inc.(10)(13)

 

Geophysical Services Provider

            

   

Common Stock (50 shares)

     65   

              

SAFETY Investment Holdings, LLC

 

Provider of Intelligent Driver Record Monitoring Software and Services

            

   

Member Units (2,000,000 units)

     2,000  2,000 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

NTM Acquisition Corp.(11)

 

Provider of B2B Travel Information Content

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 8.55%, Secured Debt (Maturity—June 7, 2022)(9)

  6,104  6,050  6,073 

              

Ospemifene Royalty Sub LLC (QuatRx)(10)

 

Estrogen-Deficiency Drug Manufacturer and Distributor

            

   

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

  5,058  5,058  1,020 

              

Paris Presents Incorporated(11)

 

Branded Cosmetic and Bath Accessories

            

   

LIBOR Plus 8.75% (Floor 1.00%), Current Coupon 10.63%, Secured Debt (Maturity—December 31, 2021)(9)

  4,500  4,472  4,556 

              

Permian Holdco 2, Inc.(11)

 

Storage Tank Manufacturer

            

   

14% PIK Unsecured Debt (Maturity—October 15, 2021)(19)

  357  357  357 

   

Preferred Stock (Permian Holdco 1, Inc.) (154,558 units)

     799  1,010 

   

Common Stock (Permian Holdco 1, Inc.) (154,558 units)

       10 

         1,156  1,377 

              

Pernix Therapeutics Holdings, Inc.(10)

 

Pharmaceutical Royalty

            

   

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

  3,031  3,031  1,958 

              

Pier 1 Imports, Inc.(11)(13)

 

Decorative Home Furnishings Retailer

            

   

LIBOR Plus 3.50% (Floor 1.00%), Current Coupon 5.95%, Secured Debt (Maturity—April 30, 2021)(9)

  7,513  7,137  7,156 

              

Point.360(10)

 

Fully Integrated Provider of Digital Media Services

            

   

Warrants (65,463 equivalent shares; Expiration—July 7, 2020; Strike price—$0.75 per share)

     69   

   

Common Stock (163,658 shares)

     273  10 

         342  10 

              

PPC/SHIFT LLC(10)

 

Provider of Digital Solutions to Automotive Industry

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.84%, Secured Debt (Maturity—December 22, 2021)(9)

  6,781  6,667  6,781 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

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

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)

  10,812  10,554  10,379 

              

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)

  5,456  5,388  5,469 

              

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—October 13, 2021)(9)

  12,500  12,212  12,212 

              

SG Acquisition Inc.(11)

 

Finance and Insurance Services to the Automotive Industry

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—March 30, 2024)(9)

  4,875  4,729  4,802 

              

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)

  13,337  13,254  13,387 

   

9% Secured Debt (Maturity—October 31, 2020)

  3,000  2,805  2,790 

         16,059  16,177 

              

Strike, LLC(11)

 

Pipeline Construction and Maintenance Services

            

   

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.00%, Secured Debt (Maturity—November 30, 2022)(9)

  10,000  9,682  10,167 

              

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)

  7,429  7,365  7,397 

              

Synagro Infrastructure Company, Inc(11)

 

Waste Management Services

            

   

LIBOR Plus 5.25% (Floor 1.00%), Current Coupon 6.40%, Secured Debt (Maturity—August 22, 2020)(9)

  4,714  4,662  4,348 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

Prowler Acquisition Corp.(11)

 

Specialty Distributor to the Energy Sector

            

   

LIBOR Plus 4.50% (Floor 1.00%), Current Coupon 6.34%, Secured Debt (Maturity—January 28, 2020)(9)

  16,872  15,432  16,493 

              

PT Network, LLC(10)

 

Provider of Outpatient Physical Therapy and Sports Medicine Services

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 7.21%, Secured Debt (Maturity—November 30, 2021)(9)

  8,839  8,839  8,839 

              

QBS Parent, Inc.(11)

 

Provider of Software and Services to the Oil & Gas Industry

            

   

LIBOR Plus 4.75% (Floor 1.00%), Current Coupon 6.52%, Secured Debt (Maturity—August 7, 2021)(9)

  14,272  14,124  14,201 

              

Radiology Partners, Inc.(10)

 

Radiology Practice Providing Scan Interpretations

            

   

LIBOR Plus 5.75% (Floor 1.00%), Current Coupon 7.59%, Secured Debt (Maturity—December 4, 2023)(9)

  9,731  9,635  9,749 

              

Research Now Group, Inc. and Survey Sampling International, LLC(11)

 

Provider of Outsourced Online Surveying

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 7.86%, Secured Debt (Maturity—December 20, 2024)(9)

  13,500  12,845  13,437 

              

Resolute Industrial, LLC(10)

 

HVAC Equipment Rental and Remanufacturing

            

   

LIBOR Plus 7.62% (Floor 1.00%), Current Coupon 9.31%, Secured Debt (Maturity—July 26, 2022)(9)(25)

  17,088  16,785  16,785 

   

Member Units (601 units)

     750  750 

         17,535  17,535 

              

RGL Reservoir Operations Inc.(11)(13)(21)

 

Oil & Gas Equipment and Services

            

   

1% Current / 9% PIK Secured Debt (Maturity—December 21, 2024)(19)

  721  407  400 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

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

Targus International, LLC(11)

 

Distributor of Protective Cases for Mobile Devices

            

   

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

  1,182  1,182  1,182 

   

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

     2,555  440 

         3,737  1,622 

              

TE Holdings, LLC(11)

 

Oil & Gas Exploration & Production

            

   

Member Units (97,048 units)

     970  691 

              

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)

  7,602  7,594  7,607 

   

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

  10,500  10,447  10,526 

         18,041  18,133 

              

TMC Merger Sub Corp.(11)

 

Refractory & Maintenance Services Provider

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—October 31, 2022)(9)

  14,922  14,778  14,922 

              

TOMS Shoes, LLC(11)

 

Global Designer, Distributor, and Retailer of Casual Footwear

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.55%, Secured Debt (Maturity—October 30, 2020)(9)

  4,900  4,573  3,315 

              

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)

  20,564  20,201  20,564 

              

Turning Point Brands, Inc.(10)(13)

 

Marketer/Distributor of Tobacco Products

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.15%, Secured Debt (Maturity—May 17, 2022)(9)

  8,500  8,417  8,479 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

RM Bidder, LLC(10)

 

Scripted and Unscripted TV and Digital Programming Provider

            

   

Warrants (327,532 equivalent units; Expiration—October 20, 2025; Strike price—$14.28 per unit)

     425   

   

Member Units (2,779 units)

     46  16 

         471  16 

              

SAFETY Investment Holdings, LLC

 

Provider of Intelligent Driver Record Monitoring Software and Services

            

   

Member Units (2,000,000 units)

     2,000  1,670 

              

Salient Partners L.P.(11)

 

Provider of Asset Management Services

            

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 10.32%, Secured Debt (Maturity—June 9, 2021)(9)

  12,002  11,770 ��11,852 

              

SiTV, LLC(11)

 

Cable Networks Operator

            

   

10.375% Secured Debt (Maturity—July 1, 2019)

  10,429  7,051  6,336 

              

SMART Modular Technologies, Inc.(10)(13)

 

Provider of Specialty Memory Solutions

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.66%, Secured Debt (Maturity—August 9, 2022)(9)

  14,250  13,993  14,179 

              

Sorenson Communications, Inc.(11)

 

Manufacturer of Communication Products for Hearing Impaired

            

   

LIBOR Plus 5.75% (Floor 2.25%), Current Coupon 8.06%, Secured Debt (Maturity—April 30, 2020)(9)

  13,199  13,142  13,257 

              

Staples Canada ULC(10)(13)(21)

 

Office Supplies Retailer

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.68%, Secured Debt (Maturity—September 12, 2023)(9)(22)

  20,000  19,630  18,487 

              

Strike, LLC(11)

 

Pipeline Construction and Maintenance Services

            

   

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 10.45%, Secured Debt (Maturity—November 30, 2022)(9)

  9,500  9,262  9,642 

   

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 10.02%, Secured Debt (Maturity—May 30, 2019)(9)

  409  392  411 

         9,654  10,053 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

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

TVG-I-E CMN ACQUISITION, LLC(10)

 

Organic Lead Generation for Online Postsecondary Schools

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—November 3, 2021)(9)

  6,419  6,299  6,299 

              

Tweddle Group, Inc.(11)

 

Provider of Technical Information Services to Automotive OEMs

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—October 21, 2022)(9)

  8,356  8,197  8,418 

              

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)

  11,484  11,411  11,427 

              

U.S. TelePacific Corp.(10)

 

Provider of Communications and Managed Services

            

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.62%, Secured Debt (Maturity—February 24, 2021)(9)

  7,500  7,383  7,500 

              

VCVH Holding Corp. (Verisk)(11)

 

Healthcare Technology Services Focused on Revenue Maximization

            

   

LIBOR Plus 9.25% (Floor 1.00%), Current Coupon 10.40%, Secured Debt (Maturity—June 1, 2024)(9)

  1,500  1,465  1,489 

              

VIP Cinema Holdings, Inc.(11)

 

Supplier of Luxury Seating to the Cinema Industry

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—March 1, 2023)(9)

  10,000  9,951  10,118 

              

Virtex Enterprises, LP(10)

 

Specialty, Full-Service Provider of Complex Electronic Manufacturing Services

            

   

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

  1,667  1,571  1,571 

   

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

     333  773 

   

Warrants (11 equivalent units)

     186  351 

         2,090  2,695 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

Synagro Infrastructure Company, Inc(11)

 

Waste Management Services

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 7.80%, Secured Debt (Maturity—August 22, 2020)(9)

  11,662  11,259  11,021 

              

TE Holdings, LLC(11)

 

Oil & Gas Exploration & Production

            

   

Member Units (97,048 units)

     970  121 

              

Tectonic Holdings, LLC

 

Financial Services Organization

            

   

Member Units (200,000 units)(8)

     2,000  2,320 

              

TeleGuam Holdings, LLC(11)

 

Cable and Telecom Services Provider

            

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 10.38%, Secured Debt (Maturity—April 12, 2024)(9)

  7,750  7,606  7,808 

              

TGP Holdings III LLC(11)

 

Outdoor Cooking & Accessories

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 7.30%, Secured Debt (Maturity—September 25, 2024)(9)

  6,881  6,806  6,935 

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 10.80%, Secured Debt (Maturity—September 25, 2025)(9)

  5,000  4,928  5,075 

         11,734  12,010 

              

The Container Store, Inc.(11)(13)

 

Operator of Stores Offering Storage and Organizational Products

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 9.31%, Secured Debt (Maturity—August 18, 2021)(9)

  6,831  6,650  6,840 

              

The Pasha Group(11)

 

Diversified Logistics and Transportation Provided

            

   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 9.37%, Secured Debt (Maturity—January 26, 2023)(9)

  12,109  11,756  12,230 

              

TMC Merger Sub Corp.(11)

 

Refractory & Maintenance Services Provider

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 8.19%, Secured Debt (Maturity—October 31, 2022)(9)(26)

  17,545  17,415  17,676 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 20172018

(dollars in thousands)

(Unaudited)(unaudited)

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

Vistar Media, Inc.(10)

 

Operator of Digital Out-of-Home Advertising Platform

            

   

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.06%, Secured Debt (Maturity—February 16, 2022)(9)

  4,500  4,089  4,089 

   

Warrants (64,025 equivalent shares)

     331  331 

         4,420  4,420 

              

Wellnext, LLC(10)

 

Manufacturer of Supplements and Vitamins

            

   

LIBOR Plus 9.00% (Floor 0.50%), Current Coupon 10.00%, Secured Debt (Maturity—May 23, 2021)(9)

  9,994  9,908  9,994 

              

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  4,903  4,891 

              

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)

  1,147  1,142  1,120 

              

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)

  6,354  6,312  6,354 

              

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)

  14,785  14,438  14,756 

              

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 (50.1% of total investments at fair value)

    $1,010,832 $992,115 

Total Portfolio Investments, March 31, 2017

    $1,876,476 $1,979,378 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

TOMS Shoes, LLC(11)

 

Global Designer, Distributor, and Retailer of Casual Footwear

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 7.48%, Secured Debt (Maturity—October 30, 2020)(9)

  4,850  4,606  2,861 

              

Turning Point Brands, Inc.(10)(13)

 

Marketer/Distributor of Tobacco Products

            

   

LIBOR Plus 7.00%, Current Coupon 8.70%, Secured Debt (Maturity—March 7, 2024)

  8,500  8,415  8,670 

              

TVG-I-E CMN ACQUISITION, LLC(10)

 

Organic Lead Generation for Online Postsecondary Schools

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.88%, Secured Debt (Maturity—November 3, 2021)(9)

  11,099  10,910  11,099 

              

U.S. TelePacific Corp.(11)

 

Provider of Communications and Managed Services

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 7.30%, Secured Debt (Maturity—May 2, 2023)(9)

  20,651  20,463  20,104 

              

US Joiner Holding Company(11)

 

Marine Interior Design and Installation

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.88%, Secured Debt (Maturity—April 16, 2020)(9)

  13,430  13,341  13,363 

              

VIP Cinema Holdings, Inc.(11)

 

Supplier of Luxury Seating to the Cinema Industry

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 8.31%, Secured Debt (Maturity—March 1, 2023)(9)

  7,600  7,567  7,688 

              

Vistar Media, Inc.(10)

 

Operator of Digital Out-of-Home Advertising Platform

            

   

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 12.31%, Secured Debt (Maturity—February 16, 2022)(9)

  3,319  3,060  3,114 

   

Warrants (70,207 equivalent shares; Expiration—February 17, 2027; Strike price—$0.01 per share)

     331  600 

         3,391  3,714 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

Wellnext, LLC(10)

 

Manufacturer of Supplements and Vitamins

            

   

LIBOR Plus 10.10% (Floor 1.00%), Current Coupon 11.98%, Secured Debt (Maturity—July 21, 2022)(9)(23)

  9,930  9,861  10,228 

              

Wireless Vision Holdings, LLC(10)

 

Provider of Wireless Telecommunications Carrier Services

            

   

LIBOR Plus 8.91% (Floor 1.00%), Current Coupon 10.80%, Secured Debt (Maturity—September 29, 2022)(9)(24)

  12,899  12,634  12,634 

              

Zilliant Incorporated

 

Price Optimization and Margin Management Solutions

            

   

Preferred Stock (186,777 shares)

     154  260 

   

Warrants (952,500 equivalent shares; Expiration—June 15, 2022; Strike price—$0.001 per share)

     1,071  1,190 

         1,225  1,450 

Subtotal Non-Control/Non-Affiliate Investments (47.9% of total investments at fair value)

 $1,126,103 $1,107,777 

Total Portfolio Investments, March 31, 2018

 $2,157,550 $2,314,034 

(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.


Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 2017

(dollars in thousands)

(Unaudited)

(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 March 31, 2017.2018. As noted in this schedule, 62%69% of the loans (based on the par amount of the loans) of the loansamount) contain LIBOR floors which range between 0.50% and 2.25%, with a weighted-average LIBOR floor of approximately 1.04%1.01%.

(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.

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

March 31, 2018

(dollars in thousands)

(unaudited)

(14)
Non-accrual and non-income producing investment.

(15)
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.

(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)
Investment fair value was determined using significant unobservable inputs, unless otherwise noted. See Note C for further discussion.

(19)
PIK interest income and cumulative dividend income represent income not paid currently in cash.

(20)
All portfolio company headquarters are based in the United States, unless otherwise noted.

(21)
Portfolio company headquarters are located outside of the United States.

(22)
In connection with the Company's debt investment in Staples Canada ULC to help mitigate any potential adverse change in foreign exchange rates during the term of the Company's investment, the Company entered into a forward foreign currency contract with Cadence Bank to lend $24.2 million Canadian Dollars and receive $20.0 million U.S. Dollars with a settlement date of September 12, 2018. The unrealized appreciation on the forward foreign currency contract is $1.1 million as of March 31, 2018. This unrealized appreciation is offset by the foreign currency translation depreciation on the investment.

(23)
The Company has entered into an intercreditor agreement that entitles the Company to the "last out" tranche of the first lien secured loans, whereby the "first out" tranche will receive priority as to the "last out" tranche with respect to payments of principal, interest, and any other amounts due thereunder. Therefore, the Company receives a higher interest rate than the contractual stated interest rate of LIBOR plus 7.50% (Floor 1.00%) per the Credit Agreement and the Consolidated Schedule of Investments above reflects such higher rate.

(24)
The Company has entered into an intercreditor agreement that entitles the Company to the "last out" tranche of the first lien secured loans, whereby the "first out" tranche will receive priority as to the "last out" tranche with respect to payments of principal, interest, and any other amounts due thereunder. Therefore, the Company receives a higher interest rate than the contractual stated interest rate of LIBOR plus 8.50% (Floor 1.00%) per the Credit Agreement and the Consolidated Schedule of Investments above reflects such higher rate.

(25)
As part of the credit agreement with the portfolio company, the Company is entitled to the "last out" tranche of the first lien secured loans, whereby the "first out" tranche receives priority over the "last out" tranche with respect to payments of principal, interest, and any other amounts due thereunder. The rate the Company receives per the Credit Agreement is the same as the rate reflected in the Consolidated Schedule of Investments above.

(26)
The Company has entered into an intercreditor agreement that entitles the Company to the "first out" tranche of the first lien secured loans, whereby the "first out" tranche will receive priority as to the "last out" tranche with respect to payments of principal, interest, and any other amounts due thereunder. Therefore, the Company receives a lower interest rate than the contractual stated interest rate of LIBOR plus 6.64% (Floor 1.00%) per the Credit Agreement and the Consolidated Schedule of Investments above reflects such lower rate.

(27)
All Company's portfolio investments are generally subject to restrictions on resale as "restricted securities", unless otherwise noted.

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments

December 31, 20162017

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
   

Control Investments(5)

 

 

 

 

        

 

 

 

       

    

Access Media Holdings, LLC(10)

 

Private Cable Operator

        

Private Cable Operator

       

  

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

 $22,664 $22,664 $19,700   

5% Current / 5% PIK Secured Debt (Maturity—July 22, 2020)(19)

 $23,828 $23,828 $17,150 

  

Preferred Member Units (6,581,250 units; 12% cumulative)

   6,475 240   

Preferred Member Units (8,248,500 units)

   8,142  

  

Member Units (45 units)

   1    

Member Units (45 units)

   1  

    29,140 19,940     31,971 17,150 

    

Ameritech College Operations, LLC

 

For-Profit Nursing and Healthcare College

       

  

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

 514 514 514 

  

13% Secured Debt (Maturity—November 30, 2019)

 489 489 489 

ASC Interests, LLC

 

Recreational and Educational Shooting Facility

       

  

13% Secured Debt (Maturity—January 31, 2020)

 3,025 3,025 3,025   

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

 1,800 1,795 1,795 

  

Preferred Member Units (294 units)

   2,291 2,291   

Member Units (1,500 units)

   1,500 1,530 

    6,319 6,319     3,295 3,325 

    

ASC Interests, LLC

 

Recreational and Educational Shooting Facility

       

ATS Workholding, LLC(10)

 

Manufacturer of Machine Cutting Tools and Accessories

       

  

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

 2,100 2,084 2,100   

5% Secured Debt (Maturity—November 16, 2021)

 3,726 3,249 3,249 

  

Member Units (1,500 units)(8)

   1,500 2,680   

Preferred Member Units (3,725,862 units)

   3,726 3,726 

    3,584 4,780     6,975 6,975 

    

Bond-Coat, Inc.

 

Casing and Tubing Coating Services

        

Casing and Tubing Coating Services

       

  

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

 11,596 11,556 11,596   

12% Secured Debt (Maturity—December 28, 2017)(17)

 11,596 11,596 11,596 

  

Common Stock (57,508 shares)

   6,350 6,660   

Common Stock (57,508 shares)

   6,350 9,370 

    17,906 18,256     17,946 20,966 

    

Café Brazil, LLC

 

Casual Restaurant Group

        

Casual Restaurant Group

       

  

Member Units (1,233 units)(8)

   1,742 6,040   

Member Units (1,233 units)(8)

   1,742 4,900 

    

CBT Nuggets, LLC

 

Produces and Sells IT Training Certification Videos

        

Produces and Sells IT

       

  

Member Units (416 units)(8)

   1,300 55,480  

Training Certification

       

   

Videos

       

  

Member Units (416 units)(8)

   1,300 89,560 

  

Charps, LLC

 

Pipeline Maintenance and Construction

       

  

12% Secured Debt (Maturity—February 3, 2022)

 18,400 18,225 18,225 

  

Preferred Member Units (1,600 units)

   400 650 

    18,625 18,875 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
   

Clad-Rex Steel, LLC

 

Specialty Manufacturer of Vinyl-Clad Metal

        

Specialty Manufacturer of Vinyl-Clad Metal

       

  

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity—December 20, 2018)(9)

 400 396 396 

  

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity—December 20, 2021)(9)

 14,080 13,941 13,941   

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.86%, Secured Debt (Maturity—December 20, 2021)(9)

 13,280 13,168 13,280 

  

Member Units (717 units)

   7,280 7,280   

Member Units (717 units)(8)

   7,280 9,500 

  

10% Secured Debt (Clad-Rex Steel RE Investor, LLC) (Maturity—December 20, 2036)

 1,202 1,190 1,190   

10% Secured Debt (Clad-Rex Steel RE Investor, LLC) (Maturity—December 20, 2036)

 1,183 1,171 1,183 

  

Member Units (Clad-Rex Steel RE Investor, LLC) (800 units)

   210 210   

Member Units (Clad-Rex Steel RE Investor, LLC) (800 units)

   210 280 

    23,017 23,017     21,829 24,243 

    

CMS Minerals Investments

 

Oil & Gas Exploration & Production

        

Oil & Gas Exploration & Production

       

  

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

   2,104 3,682   

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

   3,440 2,392 

  

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

   3,829 3,381   

Copper Trail Energy Fund I, LP(12)(13)

 

Investment Partnership

       

    5,933 7,063   

LP Interests (Fully diluted 30.1%)

   2,500 2,500 

    

Datacom, LLC

 

Technology and Telecommunications Provider

        

Technology and Telecommunications Provider

       

  

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

 900 900 900   

8% Secured Debt (Maturity—May 30, 2018)

 1,575 1,575 1,575 

  

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

 11,713 11,651 11,049   

5.25% Current / 5.25% PIK Secured Debt (Maturity—May 30, 2019)(19)

 12,349 12,311 11,110 

  

Class A Preferred Member Units (15% cumulative)

   1,181 1,368   

Class A Preferred Member Units

   1,181 730 

  

Class B Preferred Member Units (6,453 units)

   6,030 1,529   

Class B Preferred Member Units (6,453 units)

   6,030  

    19,762 14,846     21,097 13,415 

    

Gamber-Johnson Holdings, LLC

 

Manufacturer of Ruggedized Computer Mounting Systems

        

Manufacturer of

       

  

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

 24,080 23,846 23,846  

Ruggedized Computer

       

  

Member Units (8,619 units)

   14,844 18,920  

Mounting Systems

       

  

LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 12.36%, Secured Debt (Maturity—June 24, 2021)(9)

 23,400 23,213 23,400 

  

Member Units (8,619 units)(8)

   14,844 23,370 

    38,690 42,766     38,057 46,770 

    

Garreco, LLC

 

Manufacturer and Supplier of Dental Products

        

Manufacturer and Supplier of Dental Products

       

  

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

 5,250 5,219 5,219   

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.34%, Secured Debt (Maturity—March 31, 2020)(9)

 5,483 5,443 5,443 

  

Member Units (1,200 units)

   1,200 1,150   

Member Units (1,200 units)

   1,200 1,940 

    6,419 6,369     6,643 7,383 

    

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
   

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)

 13,274 13,188 13,274   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.36%, Secured Debt (Maturity—December 19, 2019)(9)

 11,603 11,550 11,603 

  

Member Units (5,879 units)(8)

   13,065 20,310   

Member Units (5,879 units)(8)

   13,065 21,970 

    26,253 33,584     24,615 33,573 

    

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   

Member Units (438 units)(8)

   2,980 10,060 

  

Member Units (438 units)(8)

   2,980 8,770   

Gulf Publishing Holdings, LLC

 

Energy Industry Focused Media and Publishing

       

    3,757 9,547   

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.86%, Secured Debt (Maturity—September 30, 2020)(9)

 80 80 80 

  

Gulf Publishing Holdings, LLC

 

Energy Industry Focused Media and Publishing

       

  

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

 10,000 9,911 9,911   

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

 12,800 12,703 12,703 

  

Member Units (3,124 units)

   3,124 3,124   

Member Units (3,681 units)

   3,681 4,840 

    13,035 13,035     16,464 17,623 

    

Harrison Hydra-Gen, Ltd.

 

Manufacturer of Hydraulic Generators

       

Harborside Holdings, LLC

 

Real Estate Holding Company

       

  

Common Stock (107,456 shares)(8)

   718 3,120   

Member units (100 units)

   6,206 9,400 

    

Hawthorne Customs and Dispatch Services, LLC

 

Facilitator of Import Logistics, Brokerage, and Warehousing

       

Harris Preston Fund Investments(12)(13)

 

Investment Partnership

       

  

Member Units (500 units)

   589 280   

LP Interests (2717 MH, L.P.) (Fully diluted 49.3%)

   536 536 

  

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

   1,215 2,040   

Harrison Hydra-Gen, Ltd.

 

Manufacturer of Hydraulic Generators

       

    1,804 2,320   

Common Stock (107,456 shares)

   718 3,580 

    

HW Temps LLC

 

Temporary Staffing Solutions

        

Temporary Staffing Solutions

       

  

LIBOR Plus 13.00% (Floor 1.00%), Current Coupon 14.00%, Secured Debt (Maturity July 2, 2020)(9)

 10,576 10,500 10,500   

LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 12.36%, Secured Debt (Maturity July 2, 2020)(9)

 9,976 9,918 9,918 

  

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

   3,942 3,940   

Preferred Member Units (3,200 units)

   3,942 3,940 

    14,442 14,440     13,860 13,858 

    

Hydratec, Inc.

 

Designer and Installer of Micro-Irrigation Systems

        

Designer and Installer of Micro-Irrigation Systems

       

  

Common Stock (7,095 shares)(8)

   7,095 15,640   

Common Stock (7,095 shares)(8)

   7,095 15,000 

    

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)

 10,950 10,904 10,950   

11.5% Secured Debt (Maturity—November 15, 2020)

 15,250 15,116 15,250 

  

Member Units (5,400 units)(8)

   5,606 7,040   

Preferred Member Units (5,607 units)(8)

   5,952 11,660 

    16,510 17,990     21,068 26,910 

    

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
   

Indianapolis Aviation Partners, LLC

 

Fixed Base Operator

       

Jensen Jewelers of Idaho, LLC

 

Retail Jewelry Store

       

  

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

 3,100 3,100 3,100   

Prime Plus 6.75% (Floor 2.00%), Current Coupon 11.00%, Secured Debt (Maturity—November 14, 2019)(9)

 3,955 3,917 3,955 

  

Warrants (1,046 equivalent units)

   1,129 2,649   

Member Units (627 units)(8)

   811 5,100 

    4,229 5,749     4,728 9,055 

    

Jensen Jewelers of Idaho, LLC

 

Retail Jewelry Store

       

KBK Industries, LLC

 

Manufacturer of Specialty Oilfield and Industrial Products

       

  

10% Secured Debt (Maturity—September 28, 2020)

 375 372 375 

  

Prime Plus 6.75% (Floor 2.00%), Current Coupon 10.25%, Secured Debt (Maturity—November 14, 2019)(9)

 4,055 3,996 4,055   

12.5% Secured Debt (Maturity—September 28, 2020)

 5,900 5,867 5,900 

  

Member Units (627 units)(8)

   811 4,460   

Member Units (325 units)(8)

   783 4,420 

    4,807 8,515     7,022 10,695 

    

Lamb Ventures, LLC

 

Aftermarket Automotive Services Chain

        

Aftermarket Automotive Services Chain

       

  

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

 7,657 7,657 7,657   

11% Secured Debt (Maturity—July 1, 2022)

 9,942 9,890 9,942 

  

Preferred Equity (non-voting)

   400 400   

Preferred Equity (non-voting)

   400 400 

  

Member Units (742 units)(8)

   5,273 5,990   

Member Units (742 units)(8)

   5,273 6,790 

  

9.5% Secured Debt (Lamb's Real Estate Investment I, LLC) (Maturity—December 31, 2041)

 1,170 1,170 1,170   

9.5% Secured Debt (Lamb's Real Estate Investment I, LLC) (Maturity—March 31, 2027)

 432 428 432 

  

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

   625 1,340   

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

   625 520 

    15,125 16,557     16,616 18,084 

    

Lighting Unlimited, LLC

 

Commercial and Residential Lighting Products and Design Services

       

  

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

 1,514 1,514 1,514 

  

Preferred Equity (non-voting)

   434 410 

Marine Shelters Holdings, LLC

 

Fabricator of Marine and Industrial Shelters

       

  

Warrants (71 equivalent units)

   54    

12% PIK Secured Debt (Maturity—December 28, 2017)(14)

 3,131 3,078  

  

Member Units (700 units)

   100    

Preferred Member Units (3,810 units)

   5,352  

    2,102 1,924     8,430  

    

Marine Shelters Holdings, LLC

 

Fabricator of Marine and Industrial Shelters

       

Market Force Information, LLC

 

Provider of Customer Experience Management Services

       

  

12% PIK Secured Debt (Maturity—December 28, 2017)(14)

 9,967 9,914 9,387   

LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 12.48%, Secured Debt (Maturity—July 28, 2022)(9)

 23,360 23,143 23,143 

  

Preferred Member Units (3,810 units)

   5,352    

Member Units (657,113 units)

   14,700 14,700 

    15,266 9,387     37,843 37,843 

    

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)

 13,300 13,197 13,197   

13% Secured Debt (Maturity—August 31, 2020)

 12,600 12,526 12,526 

  

Preferred Member Units (4,000 shares)

   6,000 6,000   

Preferred Member Units (4,000 shares)

   6,000 6,000 

    19,197 19,197     18,526 18,526 

    

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
   

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—January 15, 2020)

 1,398 1,390 1,390 

  

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

 3,900 3,900 3,900   

12% Secured Debt (Maturity—January 15, 2020)

 3,900 3,863 3,863 

  

Member Units (3,554 units)

   1,810 2,480   

Member Units (5,714 units)

   2,405 1,575 

  

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

 836 836 836   

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

 791 791 791 

  

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

   250 600   

Member Units (Mid-Columbia Real Estate, LLC) (500 units)(8)

   790 1,290 

    8,546 9,566     9,239 8,909 

    

MSC Adviser I, LLC(16)

 

Third Party Investment Advisory Services

        

Third Party Investment Advisory Services

       

  

Member Units (Fully diluted 100.0%)(8)

    30,617   

Member Units (Fully diluted 100.0%)(8)

    41,768 

    

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)

 9,176 9,053 9,176   

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

 7,768 7,696 7,696 

  

Common Stock (5,873 shares)

   2,720 5,780   

Common Stock (5,873 shares)

   2,720 6,820 

    11,773 14,956     10,416 14,516 

    

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 2,693 2,713   

LIBOR Plus 8.50%, Current Coupon 9.98%, Secured Debt (Maturity—May 31, 2019)

 11,475 11,439 11,475 

  

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

 3,952 3,922 3,952   

Member Units (2,955 units)(8)

   2,975 11,670 

  

Member Units (2,955 units)(8)

   2,975 10,920 

    9,590 17,585     14,414 23,145 

    

NRI Clinical Research, LLC

 

Clinical Research Service Provider

        

Clinical Research Service Provider

       

  

LIBOR Plus 6.50% (Floor 1.50%), Current Coupon 8.00%, Secured Debt (Maturity—September 8, 2017)(9)

 200 200 200   

LIBOR Plus 6.50% (Floor 1.50%), Current Coupon 8.00%, Secured Debt (Maturity—January 15, 2018)(9)

 400 400 400 

  

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

 4,261 4,228 4,261   

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

 3,865 3,865 3,865 

  

Warrants (251,723 equivalent units)

   252 680   

Warrants (251,723 equivalent units; Expiration—September 8, 2021; Strike price—$0.01 per unit)

   252 500 

  

Member Units (1,454,167 units)

   765 2,462   

Member Units (1,454,167 units)

   765 2,500 

    5,445 7,603     5,282 7,265 

    

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)(17)

 13,915 13,915 13,915   

12% Secured Debt (Maturity—March 20, 2023)

 6,376 6,376 6,376 

  

Warrants (14,331 equivalent units)

   817 130   

Member Units (65,208 units)(8)

   3,717 3,250 

  

Member Units (50,877 units)

   2,900 410 

    17,632 14,455     10,093 9,626 

    

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
 

NuStep, LLC

 

Designer, Manufacturer and Distributor of Fitness Equipment

       

  

12% Secured Debt (Maturity—January 31, 2022)

 20,600 20,420 20,420 

  

Preferred Member Units (406 units)

   10,200 10,200 

    30,620 30,620 
   

OMi Holdings, Inc.

 

Manufacturer of Overhead Cranes

        

Manufacturer of Overhead Cranes

       

  

Common Stock (1,500 shares)(8)

   1,080 13,080   

Common Stock (1,500 shares)(8)

   1,080 14,110 

    

Pegasus Research Group, LLC

 

Provider of Telemarketing and Data Services

        

Provider of Telemarketing and Data Services

       

  

Member Units (460 units)(8)

   1,290 8,620   

Member Units (460 units)(8)

   1,290 10,310 

    

PPL RVs, Inc.

 

Recreational Vehicle Dealer

        

Recreational Vehicle Dealer

       

  

LIBOR Plus 7.00% (Floor 0.50%), Current Coupon 7.93%, Secured Debt (Maturity—November 15, 2021)(9)

 18,000 17,826 17,826   

LIBOR Plus 7.00% (Floor 0.50%), Current Coupon 8.34%, Secured Debt (Maturity—November 15, 2021)(9)

 16,100 15,972 16,100 

  

Common Stock (1,962 shares)(8)

   2,150 11,780   

Common Stock (1,962 shares)(8)

   2,150 12,440 

    19,976 29,606     18,122 28,540 

    

Principle Environmental, LLC

 

Noise Abatement Service Provider

       

  

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

 4,060 4,060 4,060 

Principle Environmental, LLC (d/b/a TruHorizon Environmental Solutions)

 

Noise Abatement Service Provider

       

  

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

 3,378 3,378 3,378   

13% Secured Debt (Maturity—April 30, 2020)

 7,477 7,347 7,477 

  

Preferred Member Units (19,631 units)

   4,663 5,370   

Preferred Member Units (19,631 units)

   4,600 11,490 

  

Warrants (1,036 equivalent units)

   1,200 270   

Warrants (1,018 equivalent units; Expiration—January 31, 2021; Strike price—$0.01 per unit)

   1,200 650 

    13,301 13,078     13,147 19,617 

    

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)

 7,068 7,068 7,068   

Zero Coupon Secured Debt (Maturity—June 8, 2020)

 7,341 7,341 6,950 

  

Member Units (1,000 units)

   1,118 3,188   

Member Units (1,000 units)

   2,868 4,938 

    8,186 10,256     10,209 11,888 

    

River Aggregates, LLC

 

Processor of Construction Aggregates

        

Processor of Construction Aggregates

       

  

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

 750 627 627   

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

 750 707 707 

  

Member Units (1,150 units)(8)

   1,150 4,600   

Member Units (1,150 units)

   1,150 4,610 

  

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

   369 2,510   

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

   369 2,559 

    2,146 7,737     2,226 7,876 

    

SoftTouch Medical Holdings LLC

 

Provider of In-Home Pediatric Durable Medical Equipment

       

  

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

 7,140 7,096 7,140 

  

Member Units (4,450 units)(8)

   4,930 9,170 

    12,026 16,310 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
 

SoftTouch Medical Holdings LLC

 

Provider of In-Home Pediatric Durable Medical Equipment

       

  

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.36%, Secured Debt (Maturity—October 31, 2019)(9)

 7,140 7,110 7,140 

  

Member Units (4,450 units)(8)

   4,930 10,089 

    12,040 17,229 
   

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 2,922 2,922   

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

 2,924 2,923 2,410 

  

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

   2,500    

Series A Preferred Units (2,500 units)

   2,500  

  

Warrants (1,424 equivalent units)

   1,096    

Warrants (1,424 equivalent units; Expiration—July 1, 2024; Strike price—$0.01 per unit)

   1,096  

  

Member Units (MPI Real Estate Holdings, LLC) (100 units)(8)

   2,300 2,300   

Member Units (MPI Real Estate Holdings, LLC) (100 units)(8)

   2,300 2,389 

    8,818 5,222     8,819 4,799 

    

Uvalco Supply, LLC

 

Farm and Ranch Supply Store

        

Farm and Ranch Supply Store

       

  

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

 872 872 872   

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

 348 348 348 

  

Member Units (2,011 units)(8)

   3,843 4,640   

Member Units (1,867 units)(8)

   3,579 3,880 

    4,715 5,512     3,927 4,228 

    

Vision Interests, Inc.

 

Manufacturer / Installer of Commercial Signage

        

Manufacturer / Installer of Commercial Signage

       

  

13% Secured Debt (Maturity—December 23, 2018)

 2,814 2,814 2,814   

13% Secured Debt (Maturity—December 23, 2018)

 2,814 2,797 2,797 

  

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

   3,000 3,000   

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

   3,000 3,000 

  

Common Stock (1,126,242 shares)

   3,706    

Common Stock (1,126,242 shares)

   3,706  

    9,520 5,814     9,503 5,797 

    

Ziegler's NYPD, LLC

 

Casual Restaurant Group

        

Casual Restaurant Group

       

  

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

 1,000 994 994   

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

 1,000 996 996 

  

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

 300 300 300   

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

 300 300 300 

  

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)

   600 240   

Warrants (587 equivalent units; Expiration—September 29, 2018; Strike price—$0.01 per unit)

   600  

  

Preferred Member Units (10,072 units)

   2,834 4,100   

Preferred Member Units (10,072 units)

   2,834 3,220 

    7,478 8,384     7,480 7,266 

Subtotal Control Investments (29.8% of total investments at fair value)

 $439,674 $594,282 

Subtotal Control Investments (34.6% of total investments at fair value)

Subtotal Control Investments (34.6% of total investments at fair value)

 $530,034 $750,706 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
   

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

       

  

Warrants (42 equivalent units)

   $259 $670   

Warrants (42 equivalent units; Expiration—November 7, 2024; Strike price—$0.01 per unit)

   $259 $860 

  

Member Units (186 units)(8)

   1,200 2,750   

Preferred Member Units (186 units)(8)

   1,200 3,590 

    1,459 3,420     1,459 4,450 

    

Barfly Ventures, LLC(10)

 

Casual Restaurant Group

        

Casual Restaurant Group

       

  

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

 5,958 5,860 5,827   

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

 8,715 8,572 8,715 

  

Options (2 equivalent units)

   397 490   

Options (2 equivalent units)

   397 920 

  

Warrant (1 equivalent unit)

   473 280   

Warrant (1 equivalent unit; Expiration—August 31, 2025; Strike price—$1.00 per unit)

   473 520 

    6,730 6,597     9,442 10,155 

    

BBB Tank Services, LLC

 

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

        

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

       

  

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity—April 8, 2021)(9)

 800 797 797   

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.36%, Secured Debt (Maturity—April 8, 2021)(9)

 800 778 778 

  

15% Current Secured Debt (Maturity—April 8, 2021)

 4,027 3,991 3,991   

15% Secured Debt (Maturity—April 8, 2021)

 4,000 3,876 3,876 

  

Member Units (800,000 units)

   800 800   

Member Units (800,000 units)

   800 500 

    5,588 5,588     5,454 5,154 

    

Boss Industries, LLC

 

Manufacturer and Distributor of Air, Power and Other Industrial Equipment

       

  

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

   2,426 2,800 

  

Bridge Capital Solutions Corporation

 

Financial Services and Cash Flow Solutions Provider

       

  

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

 7,500 5,610 5,610 

  

Warrants (63 equivalent shares)

   2,132 3,370 

Boccella Precast Products LLC

 

Manufacturer of Precast Hollow Core Concrete

       

  

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

 1,000 991 1,000   

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.34%, Secured Debt (Maturity—June 30, 2022)(9)

 16,400 16,230 16,400 

  

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

   1,000 1,000   

Member Units (2,160,000 units)

   2,160 3,440 

    9,733 10,980     18,390 19,840 

    

Buca C, LLC

 

Casual Restaurant Group

       

Boss Industries, LLC

 

Manufacturer and Distributor of Air, Power and Other Industrial Equipment

       

  

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

 22,671 22,504 22,671   

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

   2,080 3,930 

  

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

   3,937 4,660   

    26,441 27,331 

  

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
   

CAI Software LLC

 

Provider of Specialized Enterprise Resource Planning Software

       

Bridge Capital Solutions Corporation

 

Financial Services and Cash Flow Solutions Provider

       

  

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

 7,500 5,884 5,884 

  

Warrants (63 equivalent shares; Expiration—July 25, 2026; Strike price—$0.01 per share)

   2,132 3,520 

  

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

 3,683 3,660 3,683   

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

 1,000 992 1,000 

  

Member Units (65,356 units)(8)

   654 2,480   

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

   1,000 1,000 

    4,314 6,163     10,008 11,404 

    

CapFusion, LLC(13)

 

Non-Bank Lender to Small Businesses

       

Buca C, LLC

 

Casual Restaurant Group

       

  

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.63%, Secured Debt (Maturity—June 30, 2020)(9)

 20,304 20,193 20,193 

  

Preferred Member Units (6 units; 6% cumulative)(8)(19)

   4,177 4,172 

    24,370 24,365 

  

CAI Software LLC

 

Provider of Specialized Enterprise Resource Planning Software

       

  

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

 14,400 13,202 13,202   

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

 4,083 4,060 4,083 

  

Warrants (1,600 equivalent units)

   1,200 1,200   

Member Units (65,356 units)(8)

   654 3,230 

    14,402 14,402     4,714 7,313 

    

Chandler Signs Holdings, LLC(10)

 

Sign Manufacturer

        

Sign Manufacturer

       

  

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

 4,500 4,461 4,500   

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

 4,500 4,468 4,500 

  

Class A Units (1,500,000 units)(8)

   1,500 3,240   

Class A Units (1,500,000 units)(8)

   1,500 2,650 
���

    5,961 7,740     5,968 7,150 

    

Condit Exhibits, LLC

 

Tradeshow Exhibits / Custom Displays Provider

        

Tradeshow Exhibits / Custom Displays Provider

       

  

Member Units (3,936 units)(8)

   100 1,840   

Member Units (3,936 units)(8)

   100 1,950 

    

Congruent Credit Opportunities Funds(12)(13)

 

Investment Partnership

        

Investment Partnership

       

  

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

   5,730 1,518   

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

   5,730 1,515 

  

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

   15,754 16,181   

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

   17,869 18,632 

    21,484 17,699     23,599 20,147 

    

Daseke, Inc.

 

Specialty Transportation Provider

       

  

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

 21,799 21,632 21,799 

  

Common Stock (19,467 shares)

   5,213 24,063 

    26,845 45,862 

  

Dos Rios Partners(12)(13)

 

Investment Partnership

       

  

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

   5,996 4,925 

  

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

   1,904 1,444 

    7,900 6,369 

  

Dos Rios Stone Products LLC(10)

 

Limestone and Sandstone Dimension Cut Stone Mining Quarries

       

  

Class A Units (2,000,000 units)(8)

   2,000 2,070 

  

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)

December 31, 20162017

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
   

East West Copolymer & Rubber, LLC

 

Manufacturer of Synthetic Rubbers

       

Dos Rios Partners(12)(13)

 

Investment Partnership

       

  

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

 9,699 9,591 8,630   

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

   5,996 7,165 

  

Warrants (2,510,790 equivalent units)

   50    

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

   1,904 1,889 

    9,641 8,630     7,900 9,054 

    

EIG Fund Investments(12)(13)

 

Investment Partnership

       

Dos Rios Stone Products LLC(10)

 

Limestone and Sandstone Dimension Cut Stone Mining Quarries

       

  

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

   2,804 2,804   

Class A Preferred Units (2,000,000 units)(8)

   2,000 1,790 

    

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

 

Investment Partnership

       

East Teak Fine Hardwoods, Inc.

 

Distributor of Hardwood Products

       

  

Common Stock (6,250 shares)(8)

   480 630 

  

EIG Fund Investments(12)(13)

 

Investment Partnership

       

  

LP Interests (Fully diluted 22.2%)(8)

   9,805 9,905   

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

   1,103 1,055 

    

Freeport Financial Funds(12)(13)

 

Investment Partnership

        

Investment Partnership

       

  

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

   5,974 5,620   

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

   5,974 5,614 

  

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

   4,763 4,763   

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

   8,558 8,506 

    10,737 10,383     14,532 14,120 

    

Gault Financial, LLC (RMB Capital, LLC)

 

Purchases and Manages Collection of Healthcare and other Business Receivables

        

Purchases and Manages Collection of Healthcare and other Business Receivables

       

  

10% Current Secured Debt (Maturity—January 1, 2019)

 13,046 13,046 11,079   

10.5% Secured Debt (Maturity—January 1, 2019)

 12,483 12,483 11,532 

  

Warrants (29,025 equivalent units)

   400    

Warrants (29,032 equivalent units; Expiration—February 9, 2022; Strike price—$0.01 per unit)

   400  

    13,446 11,079     12,883 11,532 

    

Glowpoint, Inc.

 

Provider of Cloud Managed Video Collaboration Services

       

  

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

 9,000 8,949 3,997 

  

Common Stock (7,711,517 shares)

   3,958 2,080 

    12,907 6,077 

  

Guerdon Modular Holdings, Inc.

 

Multi-Family and Commercial Modular Construction Company

        

Multi-Family and Commercial Modular Construction Company

       

  

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

 10,708 10,594 10,594   

13% Secured Debt (Maturity—August 13, 2019)

 10,708 10,632 10,632 

  

Preferred Stock (404,998 shares)

   1,140 1,140   

Preferred Stock (404,998 shares)

   1,140  

  

Common Stock (212,033 shares)

   2,983 80   

Common Stock (212,033 shares)

   2,983  

    14,717 11,814     14,755 10,632 

    

Hawk Ridge Systems, LLC(13)

 

Value-Added Reseller of Engineering Design and Manufacturing Solutions

       

Harris Preston Fund Investments(12)(13)

 

Investment Partnership

       

  

10% Secured Debt (Maturity—December 2, 2021)

 10,000 9,901 9,901   

LP Interests (HPEP 3, L.P.) (Fully diluted 9.9%)

   943 943 

  

Preferred Member Units (226 units)(8)

   2,850 2,850   

  

Preferred Member Units (HRS Services, ULC) (226 units)

   150 150 

    12,901 12,901 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
   

Houston Plating and Coatings, LLC

 

Provider of Plating and Industrial Coating Services

       

  

Member Units (265,756 units)

   1,429 4,000 

  

I-45 SLF LLC(12)(13)

 

Investment Partnership

       

  

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

   14,200 14,586 

  

Indianhead Pipeline Services, LLC

 

Provider of Pipeline Support Services

       

  

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

 5,100 5,079 5,079 

Hawk Ridge Systems, LLC(13)

 

Value-Added Reseller of Engineering Design and Manufacturing Solutions

       

  

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

   2,339 2,677   

11% Secured Debt (Maturity—December 2, 2021)

 14,300 14,175 14,300 

  

Warrants (31,928 equivalent units)

   459    

Preferred Member Units (226 units)(8)

   2,850 3,800 

  

Member Units (14,732 units)

   1    

Preferred Member Units (HRS Services, ULC) (226 units)(8)

   150 200 

    7,878 7,756     17,175 18,300 

    

KBK Industries, LLC

 

Manufacturer of Specialty Oilfield and Industrial Products

       

  

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

 1,250 1,250 1,250 

Houston Plating and Coatings, LLC

 

Provider of Plating and Industrial Coating Services

       

  

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

 5,900 5,889 5,889   

8% Unsecured Convertible Debt (Maturity—May 1, 2022)

 3,000 3,000 3,200 

  

Member Units (250 units)

   341 2,780   

Member Units (315,756 units)

   2,179 6,140 

    7,480 9,919     5,179 9,340 

    

I-45 SLF LLC(12)(13)

 

Investment Partnership

       

  

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

   16,200 16,841 

  

L.F. Manufacturing Holdings, LLC(10)

 

Manufacturer of Fiberglass Products

        

Manufacturer of Fiberglass Products

       

  

Member Units (2,179,001 units)

   2,019 1,380   

Member Units (2,179,001 units)

   2,019 2,000 

    

Meisler Operating LLC

 

Provider of Short-term Trailer and Container Rental

       

  

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.84%, Secured Debt (Maturity—June 7, 2022)(9)

 16,800 16,633 16,633 

  

Member Units (Milton Meisler Holdings LLC) (31,976 units)

   3,200 3,390 

    19,833 20,023 

  

OnAsset Intelligence, Inc.

 

Provider of Transportation Monitoring / Tracking Products and Services

        

Provider of Transportation Monitoring / Tracking Products and Services

       

  

12% PIK Secured Debt (Maturity—June 30, 2021)(19)

 5,094 5,094 5,094 

  

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

 4,519 4,519 4,519   

10% PIK Unsecured Debt (Maturity—June 30, 2021)(19)

 48 48 48 

  

Preferred Stock (912 shares; 7% cumulative)

   1,981    

Preferred Stock (912 shares)

   1,981  

  

Warrants (5,333 equivalent shares)

   1,919    

Warrants (5,333 equivalent shares; Expiration—April 18, 2021; Strike price—$0.01 per share)

   1,919  

    8,419 4,519     9,042 5,142 

    

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   

Common Stock (20,766,317 shares)

   1,371  

  

Common Stock (20,766,317 shares)

   1,371 1,600   

    1,844 2,073 

  

PCI Holding Company, Inc.

 

Manufacturer of Industrial Gas Generating Systems

       

  

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

 13,000 12,898 13,000 

  

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

   3,379 5,370 

    16,277 18,370 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
 

PCI Holding Company, Inc.

 

Manufacturer of Industrial Gas Generating Systems

       

  

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

 12,650 12,593 12,593 

  

Preferred Stock (1,740,000 shares) (non-voting)

   1,740 2,610 

  

Preferred Stock (1,500,000 shares; 20% cumulative)(8)(19)

   3,927 890 

    18,260 16,093 
   

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)(15)

 30,785 30,281 250   

12% Secured Debt (Maturity—January 8, 2018)(14)(15)

 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 

    

Tin Roof Acquisition Company

 

Casual Restaurant Group

        

Casual Restaurant Group

       

  

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

 13,511 13,385 13,385   

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

 12,783 12,722 12,722 

  

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

   2,738 2,738   

Class C Preferred Stock (Fully diluted 10.0%; 10% cumulative)(8)(19)

   3,027 3,027 

    16,123 16,123     15,749 15,749 

    

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)

 5,021 5,010 5,021   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 10.20%, Secured Debt (Maturity—January 13, 2019)(9)

 8,535 8,529 8,535 

  

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

 824 824 824   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 9.20% / 1.00% PIK, Current Coupon Plus PIK 10.20%, Secured Debt (Maturity—January 13, 2019)(9)(19)

 137 137 137 

  

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

 745 745 745   

15% PIK Unsecured Debt (Maturity—July 13, 2019)(19)

 865 865 865 

  

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

   5,814 6,410   

Preferred Stock (2,596,567 shares; 19% cumulative)(8)(19)

   2,858 2,850 

  

Common Stock (705,054 shares)

    3,010   

Preferred Stock (4,935,377 shares; 13.5% cumulative)(8)(19)

   7,361 7,320 

    12,393 16,010 

  

Universal Wellhead Services Holdings, LLC(10)

 

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

       

  

Preferred Member Units (UWS Investments, LLC) (716,949 units; 14% cumulative)

   717 720 

  

Member Units (UWS Investments, LLC) (4,000,000 units)

   4,000 610   

Common Stock (1,075,992 shares)

    2,490 

    4,717 1,330     19,750 22,197 

    

Valley Healthcare Group, LLC

 

Provider of Durable Medical Equipment

       

  

LIBOR Plus 12.50% (Floor 0.50%), Current Coupon 13.12%, Secured Debt (Maturity—December 29, 2020)(9)

 12,956 12,844 12,844 

  

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

   1,600 1,600 

    14,444 14,444 

  

Volusion, LLC

 

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

       

  

11.5% Secured Debt (Maturity—January 26, 2020)

 17,500 15,298 15,298 

  

Preferred Member Units (4,876,670 units)

   14,000 14,000 

  

Warrants (1,831,355 equivalent units)

   2,576 2,576 

    31,874 31,874 

Subtotal Affiliate Investments (18.8% of total investments at fair value)

 $394,699 $375,948 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 2017

(dollars in thousands)

Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

Universal Wellhead Services Holdings, LLC(10)

 

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

            

   

Preferred Member Units (UWS Investments, LLC) (716,949 units)

     717  830 

   

Member Units (UWS Investments, LLC) (4,000,000 units)

     4,000  1,910 

         4,717  2,740 

              

Valley Healthcare Group, LLC

 

Provider of Durable Medical Equipment

            

   

LIBOR Plus 12.50% (Floor 0.50%), Current Coupon 13.86%, Secured Debt (Maturity—December 29, 2020)(9)

  11,766  11,685  11,685 

   

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

     1,600  1,600 

         13,285  13,285 

              

Volusion, LLC

 

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

            

   

11.5% Secured Debt (Maturity—January 26, 2020)

  16,734  15,200  15,200 

   

Preferred Member Units (4,876,670 units)

     14,000  14,000 

   

Warrants (1,831,355 equivalent units; Expiration—January 26, 2025; Strike price—$0.01 per unit)

     2,576  2,080 

         31,776  31,280 

Subtotal Affiliate Investments (15.6% of total investments at fair value)

 $367,317 $338,854 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(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)

       

              

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)

 $7,662 $7,544 $7,662 

              

Ahead, LLC(10)

 

IT Infrastructure Value Added Reseller

            

   

LIBOR Plus 6.50%, Current Coupon 7.50%, Secured Debt (Maturity—November 2, 2020)

  14,250  13,906  14,303 

              

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  14,706  14,809 

              

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)

  7,359  7,258  7,323 

              

American Seafoods Group, LLC(11)

 

Catcher and 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  9,634 

              

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)

  11,163  10,345  10,933 

   

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity—June 6, 2022)(9)

  3,714  3,569  3,569 

         13,914  14,502 

              

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)

  2,277  2,277  2,231 

   

Member Units (440,620 units)

     4,928  3,305 

         7,205  5,536 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

Non-Control/Non-Affiliate Investments(7)

       

              

AAC Holdings, Inc.(11)

 

Substance Abuse Treatment Service Provider

            

   

LIBOR Plus 6.75% (Floor 1.00%), Current Coupon 8.13%, Secured Debt (Maturity—June 30, 2023)(9)

 $11,751 $11,475 $11,810 

              

Adams Publishing Group, LLC(10)

 

Local Newspaper Operator

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.69%, Secured Debt (Maturity—November 3, 2020)(9)

  10,341  10,116  10,147 

              

ADS Tactical, Inc.(10)

 

Value-Added Logistics and Supply Chain Provider to the Defense Industry

            

   

LIBOR Plus 7.50% (Floor 0.75%), Current Coupon 9.19%, Secured Debt (Maturity—December 31, 2022)(9)

  13,014  12,767  12,833 

              

Aethon United BR LP(10)

 

Oil & Gas Exploration & Production

            

   

LIBOR Plus 6.75% (Floor 1.00%), Current Coupon 8.15%, Secured Debt (Maturity—September 8, 2023)(9)

  3,438  3,388  3,388 

              

Ahead, LLC(10)

 

IT Infrastructure Value Added Reseller

            

   

LIBOR Plus 6.50%, Current Coupon 8.20%, Secured Debt (Maturity—November 2, 2020)

  11,061  10,848  11,130 

              

Allflex Holdings III Inc.(11)

 

Manufacturer of Livestock Identification Products

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.36%, Secured Debt (Maturity—July 19, 2021)(9)

  13,846  13,781  13,955 

              

American Scaffold Holdings, Inc.(10)

 

Marine Scaffolding Service Provider

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 8.19%, Secured Debt (Maturity—March 31, 2022)(9)

  7,031  6,947  6,996 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

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)

  7,209  7,099  7,194 

              

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  14,337  14,337 

         16,737  16,737 

              

Applied Products, Inc.(10)

 

Adhesives Distributor

            

   

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

  3,527  3,499  3,518 

              

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)

  13,947  13,796  13,947 

              

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)

  7,050  6,920  6,592 

              

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)

  9,500  9,322  9,476 

              

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)

  6,173  6,146  5,924 

              

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)

  11,790  11,604  11,584 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

American Teleconferencing Services, Ltd.(11)

 

Provider of Audio Conferencing and Video Collaboration Solutions

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.90%, Secured Debt (Maturity—December 8, 2021)(9)

  10,582  9,934  10,443 

   

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.85%, Secured Debt (Maturity—June 6, 2022)(9)

  3,714  3,589  3,507 

         13,523  13,950 

              

Anchor Hocking, LLC(11)

 

Household Products Manufacturer

            

   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.49%, Secured Debt (Maturity—June 4, 2020)(9)

  2,254  2,211  2,248 

   

Member Units (440,620 units)

     4,928  3,745 

         7,139  5,993 

              

Apex Linen Service, Inc.

 

Industrial Launderers

            

   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.36%, Secured Debt (Maturity—October 30, 2022)(9)

  2,400  2,400  2,400 

   

16% Secured Debt (Maturity—October 30, 2022)

  14,416  14,347  14,347 

         16,747  16,747 

              

Arcus Hunting LLC.(10)

 

Manufacturer of Bowhunting and Archery Products and Accessories

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.34%, Secured Debt (Maturity—November 13, 2019)(9)

  15,391  15,294  15,391 

              

ATI Investment Sub, Inc.(11)

 

Manufacturer of Solar Tracking Systems

            

   

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.82%, Secured Debt (Maturity—June 22, 2021)(9)

  7,364  7,215  7,346 

              

ATX Networks Corp.(11)(13)(21)

 

Provider of Radio Frequency Management Equipment

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.33% / 1.00% PIK, Current Coupon Plus PIK 8.33%, Secured Debt (Maturity—June 11, 2021)(9)(19)

  9,567  9,454  9,507 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
   

Berry Aviation, Inc.(10)

 

Airline Charter Service Operator

        

Airline Charter Service Operator

       

  

13.75% Secured Debt (Maturity—January 30, 2020)

 5,627 5,598 5,627 

  

Common Stock (553 shares)

   400 1,010 

    5,998 6,637 

  

BigName Commerce, LLC(10)

 

Provider of Envelopes and Complimentary Stationery Products

       

  

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.59%, Secured Debt (Maturity—May 11, 2022)(9)

 2,488 2,461 2,461 

  

Binswanger Enterprises, LLC(10)

 

Glass Repair and Installation Service Provider

       

  

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

 5,627 5,588 5,627   

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.69%, Secured Debt (Maturity—March 9, 2022)(9)

 15,325 15,060 15,192 

  

Common Stock (553 shares)

   400 820   

Member Units (1,050,000 units)

   1,050 1,000 

    5,988 6,447     16,110 16,192 

    

Bluestem Brands, Inc.(11)

 

Multi-Channel Retailer of General Merchandise

        

Multi-Channel Retailer of General Merchandise

       

  

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

 12,880 12,635 11,227   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 9.07%, Secured Debt (Maturity—November 6, 2020)(9)

 12,127 11,955 8,540 

    

Brainworks Software, LLC(10)

 

Advertising Sales and Newspaper Circulation Software

        

Advertising Sales and Newspaper Circulation Software

       

  

Prime Plus 9.25% (Floor 3.25%), Current Coupon 13.00%, Secured Debt (Maturity—July 22, 2019)(9)

 6,733 6,684 6,733   

Prime Plus 9.25% (Floor 3.25%), Current Coupon 13.75%, Secured Debt (Maturity—July 22, 2019)(9)

 6,733 6,705 6,573 

    

Brightwood Capital Fund Investments(12)(13)

 

Investment Partnership

        

Investment Partnership

       

  

LP Interests (Brightwood Capital Fund III, LP) (Fully diluted 1.6%)(8)

   12,000 11,094   

LP Interests (Brightwood Capital Fund III, LP) (Fully diluted 1.6%)(8)

   12,000 10,328 

  

LP Interests (Brightwood Capital Fund IV, LP) (Fully diluted 0.9%)

   500 500   

LP Interests (Brightwood Capital Fund IV, LP) (Fully diluted 0.8%)(8)

   1,000 1,063 

    12,500 11,594     13,000 11,391 

    

Brundage-Bone Concrete Pumping, Inc.(11)

 

Construction Services Provider

        

Construction Services Provider

       

  

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

 3,000 2,985 3,240   

10.375% Secured Debt (Maturity—September 1, 2023)

 3,000 2,987 3,180 

    

California Pizza Kitchen, Inc.(11)

 

Casual Restaurant Group

       

Cadence Aerospace LLC(10)

 

Aerostructure Manufacturing

       

  

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

 4,988 4,940 4,976   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.91%, Secured Debt (Maturity—November 14, 2023)(9)

 15,000 14,853 14,853 

    

Cenveo Corporation(11)

 

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

       

  

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

 13,130 11,097 11,719 

  

CDHA Management, LLC(10)

 

Dental Services

       

  

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—December 5, 2021)(9)

 4,491 4,415 4,415 

  

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 14,141 8,724 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

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

Clarius BIGS, LLC(10)

 

Prints & Advertising Film Financing

            

   

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

  2,928  2,928  88 

              

Compact Power Equipment, Inc.

 

Equipment / Tool Rental

            

   

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

  4,100  4,095  4,100 

   

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

     1,079  4,180 

         5,174  8,280 

              

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)

  8,345  8,187  8,398 

              

Construction Supply Investments, LLC(10)

 

Distribution Platform of Specialty Construction Materials to Professional Concrete and Masonry Contractors

            

   

LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity—June 30, 2023)(9)

  8,500  8,416  8,416 

   

Member Units (20,000 units)

     2,000  2,000 

         10,416  10,416 

              

ContextMedia Health, LLC(11)

 

Provider of Healthcare Media Content

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—December 23, 2021)(9)

  8,000  7,201  7,320 

              

Covenant Surgical Partners, Inc.(11)

 

Ambulatory Surgical Centers

            

   

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

  800  800  772 

              

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)

  6,366  6,286  6,382 

              

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)

  9,102  9,084  9,102 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

CapFusion, LLC(13)

 

Non-Bank Lender to Small Businesses

            

   

13% Secured Debt (Maturity—March 25, 2021)(14)

  6,705  5,645  1,871 

              

California Pizza Kitchen, Inc.(11)

 

Casual Restaurant Group

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.57%, Secured Debt (Maturity—August 23, 2022)(9)

  12,902  12,862  12,677 

              

CDHA Management, LLC(10)

 

Dental Services

            

   

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.76%, Secured Debt (Maturity—December 5, 2021)(9)

  5,365  5,303  5,365 

              

Central Security Group, Inc.(11)

 

Security Alarm Monitoring Service Provider

            

   

LIBOR Plus 5.63% (Floor 1.00%), Current Coupon 7.19%, Secured Debt (Maturity—October 6, 2021)(9)

  7,481  7,462  7,518 

              

Cenveo Corporation(11)

 

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

            

   

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

  19,130  17,126  13,582 

              

Charlotte Russe, Inc(11)

 

Fast-Fashion Retailer to Young Women

            

   

LIBOR Plus 5.50% (Floor 1.25%), Current Coupon 6.89%, Secured Debt (Maturity—May 22, 2019)(9)

  19,041  16,473  7,807 

              

Clarius BIGS, LLC(10)

 

Prints & Advertising Film Financing

            

   

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

  2,924  2,924  85 

              

Clickbooth.com, LLC(10)

 

Provider of Digital Advertising Performance Marketing Solutions

            

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 10.01%, Secured Debt (Maturity—December 5, 2022)(9)

  3,000  2,941  2,941 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

Portfolio Company(1)
 Business Description
 Type of Investment(2)(3)
 Principal(4)
 Cost(4)
 Fair Value
 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
 

Construction Supply Investments, LLC(10)

 

Distribution Platform of Specialty Construction Materials to Professional Concrete and Masonry Contractors

       

  

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.57%, Secured Debt (Maturity—June 30, 2023)(9)

 7,125 7,090 7,090 

  

Member Units (28,000 units)

   3,723 3,723 

    10,813 10,813 

  

CTVSH, PLLC(10)

 

Emergency Care and Specialty Service Animal Hospital

       

  

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.48%, Secured Debt (Maturity—August 3, 2022)(9)

 11,850 11,739 11,739 
   

Darr Equipment LP(10)

 

Heavy Equipment Dealer

        

Heavy Equipment Dealer

       

  

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

 21,130 20,697 20,748   

11.5% Current / 1% PIK Secured Debt (Maturity—June 22, 2023)(19)

 7,229 7,229 7,229 

  

Warrants (915,734 equivalent units)

   474 10   

Warrants (915,734 equivalent units; Expiration—December 23, 2023; Strike price—$1.50 per unit)

   474 10 

    21,171 20,758     7,703 7,239 

    

Digital River, Inc.(11)

 

Provider of Outsourced e-Commerce Solutions and Services

        

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 15,086 15,317   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 8.08%, Secured Debt (Maturity—February 12, 2021)(9)

 9,313 9,266 9,337 

    

Digital Room LLC(11)

 

Pure-Play e-Commerce Print Business

       

  

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—November 21, 2022)(9)

 7,625 7,475 7,549 

  

Drilling Info Holdings, Inc.

 

Information Services for the Oil and Gas Industry

        

Information Services for the Oil and Gas Industry

       

  

Common Stock (3,788,865 shares)

   1,335 10,410   

Common Stock (3,788,865 shares)(8)

    8,610 

    

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 5,589 5,625 

  

EnCap Energy Fund Investments(12)(13)

 

Investment Partnership

       

  

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

   3,877 1,955 

  

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

   2,200 1,225 

  

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

   3,957 3,680 

  

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

   3,039 3,039 

  

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

   9,116 10,452 

  

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

   2,513 2,461 

    24,702 22,812 

  

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 6,857 5,274 

  

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

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

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)

  12,483  12,082  10,174 

              

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  3,851  3,842 

   

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

  800  787  760 

         4,638  4,602 

              

Grace Hill, LLC(10)

 

Online Training Tools for the Multi-Family Housing Industry

            

   

Prime Plus 5.25% (Floor 1.00%), Current Coupon 9.00%, Secured Debt (Maturity—August 15, 2019)(9)

  634  623  634 

   

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

  11,552  11,472  11,552 

         12,095  12,186 

              

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)

  7,648  7,598  7,648 

              

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)

  4,813  4,787  3,734 

   

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

  2,000  1,962  1,205 

         6,749  4,939 

              

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  13,215  13,017 

              

Guitar Center, Inc.(11)

 

Musical Instruments Retailer

            

   

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

  14,625  13,890  13,272 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

EnCap Energy Fund Investments(12)(13)

 

Investment Partnership

            

   

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

     3,906  2,202 

   

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

     2,227  1,549 

   

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

     4,305  3,720 

   

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

     6,277  6,225 

   

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

     6,138  6,116 

   

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

     3,458  3,828 

         26,311  23,640 

              

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 9.82%, Secured Debt (Maturity—April 28, 2022)(9)

  6,999  6,878  6,244 

              

Extreme Reach, Inc.(11)

 

Integrated TV and Video Advertising Platform

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.95%, Secured Debt (Maturity—February 7, 2020)(9)

  10,411  10,397  10,398 

              

Felix Investments Holdings II(10)

 

Oil & Gas Exploration & Production

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.90%, Secured Debt (Maturity—August 9, 2022)(9)

  3,333  3,267  3,267 

              

Flavors Holdings Inc.(11)

 

Global Provider of Flavoring and Sweetening Products

            

   

LIBOR Plus 5.75% (Floor 1.00%), Current Coupon 7.44%, Secured Debt (Maturity—April 3, 2020)(9)

  13,076  12,616  12,128 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

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

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)

  5,432  5,390  5,432 

              

Hoover Group, Inc.(10)(13)

 

Provider of Storage Tanks and Related Products to the Energy and Petrochemical Markets

            

   

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—January 28, 2021)(9)

  8,546  7,963  7,963 

              

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)

  9,375  9,249  9,551 

              

Hostway Corporation(11)

 

Managed Services and Hosting Provider

            

   

LIBOR Plus 6.75% (Floor 1.25%), Current Coupon 8.00%, Secured Debt (Maturity—December 13, 2019)(9)

  10,577  10,515  10,028 

              

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)

  9,606  9,120  8,933 

              

Hygea Holdings, Corp.(10)

 

Provider of Physician Services

            

   

LIBOR Plus 9.25%, Current Coupon 10.17%, Secured Debt (Maturity—February 24, 2019)

  7,875  7,381  7,615 

   

Warrants (5,990,452 equivalent shares)

     369  1,530 

         7,750  9,145 

              

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  9,467  9,621 

              

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)

  6,750  6,455  6,809 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

GI KBS Merger Sub LLC(11)

 

Outsourced Janitorial Services to Retail/Grocery Customers

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.48%, Secured Debt (Maturity—October 29, 2021)(9)

  6,807  6,733  6,833 

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.88%, Secured Debt (Maturity—April 29, 2022)(9)

  3,915  3,769  3,793 

         10,502  10,626 

              

GoWireless Holdings, Inc.(11)

 

Provider of Wireless Telecommunications Carrier Services

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 8.16%, Secured Debt (Maturity—December 22, 2024)(9)

  18,000  17,820  17,865 

              

Grace Hill, LLC(10)

 

Online Training Tools for the Multi-Family Housing Industry

            

   

Prime Plus 5.25% (Floor 1.00%), Current Coupon 9.75%, Secured Debt (Maturity—August 15, 2019)(9)

  1,215  1,208  1,215 

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.58%, Secured Debt (Maturity—August 15, 2019)(9)

  11,407  11,356  11,407 

         12,564  12,622 

              

Great Circle Family Foods, LLC(10)

 

Quick Service Restaurant Franchise

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.34%, Secured Debt (Maturity—October 28, 2019)(9)

  7,219  7,187  7,219 

              

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)

  4,750  4,748  3,541 

   

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

  2,055  2,040  226 

         6,788  3,767 

              

GST Autoleather, Inc.(11)

 

Automotive Leather Manufacturer

            

   

PRIME Plus 6.50% (Floor 2.25%), Current Coupon 11.00%, Secured Debt (Maturity—April 5, 2018)(9)

  7,578  7,500  7,500 

   

PRIME Plus 6.50% (Floor 2.00%), Current Coupon 11.00%, Secured Debt (Maturity—July 10, 2020)(9)

  15,619  15,120  11,813 

         22,620  19,313 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

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

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)

  8,949  8,932  8,949 

              

Industrial Services Acquisition, LLC(10)

 

Industrial Cleaning Services

            

   

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

  4,519  4,433  4,433 

   

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

     900  900 

         5,333  5,333 

              

Infinity Acquisition Finance Corp.(11)

 

Application Software for Capital Markets

            

   

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

  5,700  5,366  4,802 

              

Inn of the Mountain Gods Resort and Casino(11)

 

Hotel & Casino Owner & Operator

            

   

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

  6,249  5,924  5,687 

              

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  4,364  4,465 

              

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)

  14,918  14,907  14,395 

              

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)

  9,812  9,671  9,413 

              

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)

  4,445  4,429  4,445 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 2016

(dollars in thousands)

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

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)

  14,655  14,560  13,776 

              

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)

  12,829  12,562  12,765 

              

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)

  5,578  5,536  5,550 

              

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)

  5,459  5,443  5,431 

              

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  10,658  10,735 

              

Larchmont Resources, LLC(11)

 

Oil & Gas Exploration & Production

            

   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, PIK Secured Debt (Maturity—August 7, 2020)(9)

  2,260  2,260  2,209 

   

Member Units (Larchmont Intermediate Holdco, LLC) (2,828 units)

     353  1,193 

         2,613  3,402 

              

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

 

Investment Partnership

            

   

LP Interests (Fully diluted 2.3%)

     2,500  3,627 

              

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)

  8,593  8,457  8,593 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

Guitar Center, Inc.(11)

 

Musical Instruments Retailer

            

   

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

  16,625  16,009  15,378 

              

Hojeij Branded Foods, LLC(10)

 

Multi-Airport, Multi-Concept Restaurant Operator

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.57%, Secured Debt (Maturity—July 20, 2022)(9)

  12,137  12,022  12,137 

              

Hoover Group, Inc.(10)(13)

 

Provider of Storage Tanks and Related Products to the Energy and Petrochemical Markets

            

   

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.70%, Secured Debt (Maturity—January 28, 2021)(9)

  8,460  7,986  7,783 

              

Hostway Corporation(11)

 

Managed Services and Hosting Provider

            

   

LIBOR Plus 6.75% (Floor 1.25%), Current Coupon 8.44%, Secured Debt (Maturity—December 13, 2019)(9)

  20,150  19,796  19,621 

   

LIBOR Plus 6.75% (Floor 1.25%), Current Coupon 8.44%, Secured Debt (Maturity—December 13, 2018)(9)

  12,406  11,575  11,692 

         31,371  31,313 

              

Hunter Defense Technologies, Inc.(11)

 

Provider of Military and Commercial Shelters and Systems

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.70%, Secured Debt (Maturity—August 5, 2019)(9)

  20,224  19,851  19,997 

              

Hydrofarm Holdings LLC(10)

 

Wholesaler of Horticultural Products

            

   

LIBOR Plus 7.00%, Current Coupon 8.49%, Secured Debt (Maturity—May 12, 2022)

  6,708  6,588  6,699 

              

iEnergizer Limited(11)(13)(21)

 

Provider of Business Outsourcing Solutions

            

   

LIBOR Plus 6.00% (Floor 1.25%), Current Coupon 7.57%, Secured Debt (Maturity—May 1, 2019)(9)

  11,005  10,764  10,977 

              

Implus Footcare, LLC(10)

 

Provider of Footwear and Related Accessories

            

   

LIBOR Plus 6.75% (Floor 1.00%), Current Coupon 8.44%, Secured Debt (Maturity—April 30, 2021)(9)

  19,372  19,115  19,243 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

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

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)

     160  160 

         473  473 

              

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)

  14,403  14,326  14,403 

              

Minute Key, Inc.

 

Operator of Automated Key Duplication Kiosks

            

   

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

  15,700  15,404  15,404 

   

Warrants (1,437,409 equivalent units)

     280  470 

         15,684  15,874 

              

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)

  14,805  14,645  14,312 

              

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)

  14,888  14,632  14,813 

              

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)

  3,865  3,235  3,375 

              

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)

  9,396  9,343  9,337 

              

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)

  9,335  9,175  8,985 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

Indivior Finance LLC(11)(13)

 

Specialty Pharmaceutical Company Treating Opioid Dependence

            

   

LIBOR Plus 4.50% (Floor 1.00%), Current Coupon 5.50%, Secured Debt (Maturity—December 18, 2022)(9)

  1,176  1,171  1,182 

              

Industrial Services Acquisition, LLC(10)

 

Industrial Cleaning Services

            

   

11.25% Current / 0.75% PIK Unsecured Debt (Maturity—December 17, 2022)(19)

  4,553  4,478  4,553 

   

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

     900  810 

         5,378  5,363 

              

Inn of the Mountain Gods Resort and Casino(11)

 

Hotel & Casino Owner & Operator

            

   

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

  6,249  5,994  5,687 

              

iPayment, Inc.(11)

 

Provider of Merchant Acquisition

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.62%, Secured Debt (Maturity—April 11, 2023)(9)

  11,970  11,861  12,090 

              

iQor US Inc.(11)

 

Business Process Outsourcing Services Provider

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.69%, Secured Debt (Maturity—April 1, 2021)(9)

  990  983  986 

              

irth Solutions, LLC

 

Provider of Damage Prevention Information Technology Services

            

   

Member Units (27,893 units)

     1,441  1,920 

              

Jacent Strategic Merchandising, LLC(10)

 

General Merchandise Distribution

            

   

LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 8.01%, Secured Debt (Maturity—September 16, 2020)(9)

  11,110  11,054  11,110 

              

Jackmont Hospitality, Inc.(10)

 

Franchisee of Casual Dining Restaurants

            

   

LIBOR Plus 6.75% (Floor 1.00%), Current Coupon 8.32%, Secured Debt (Maturity—May 26, 2021)(9)

  4,390  4,379  4,390 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

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

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)

  4,144  4,085  4,128 

              

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  2,088 

              

Pardus Oil and Gas, LLC(11)

 

Oil & Gas Exploration & Production

            

   

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

  1,869  1,869  1,869 

   

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

  992  992  562 

   

Member Units (2,472 units)

     2,472  970 

         5,333  3,401 

              

Paris Presents Incorporated(11)

 

Branded Cosmetic and Bath Accessories

            

   

LIBOR Plus 8.75% (Floor 1.00%), Current Coupon 9.75%, Secured Debt (Maturity—December 31, 2021)(9)

  2,000  1,969  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  7,394  7,388 

              

Permian Holdco 2, Inc.(11)

 

Storage Tank Manufacturer

            

   

14% PIK Unsecured Debt (Maturity—October 15, 2021)

  198  198  198 

   

Preferred Stock (Permian Holdco 1, Inc.) (154,558 units)

     799  799 

   

Common Stock (Permian Holdco 1, Inc.) (154,558 units)

        

         997  997 

              

Pernix Therapeutics Holdings, Inc.(10)

 

Pharmaceutical Royalty

            

   

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

  3,447  3,447  3,326 

              

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)

  2,494  2,470  2,503 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

Jacuzzi Brands LLC(11)

 

Manufacturer of Bath and Spa Products

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.69%, Secured Debt (Maturity—June 28, 2023)(9)

  3,950  3,876  3,980 

              

Joerns Healthcare, LLC(11)

 

Manufacturer and Distributor of Health Care Equipment & Supplies

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.48% Secured Debt (Maturity—May 9, 2020)(9)

  13,387  13,299  12,472 

              

Keypoint Government Solutions, Inc.(10)

 

Provider of Pre-Employment Screening Services

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.35%, Secured Debt (Maturity—April 18, 2024)(9)

  12,031  11,921  12,031 

              

Larchmont Resources, LLC(11)

 

Oil & Gas Exploration & Production

            

   

LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.53%, PIK Secured Debt (Maturity—August 7, 2020)(9)(19)

  2,418  2,418  2,394 

   

Member Units (Larchmont Intermediate Holdco, LLC) (2,828 units)

     353  976 

         2,771  3,370 

              

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

 

Investment Partnership

            

   

LP Interests (Fully diluted 2.3%)

     2,500  4,234 

              

Logix Acquisition Company, LLC(10)

 

Competitive Local Exchange Carrier

            

   

LIBOR Plus 5.75% (Floor 1.00%), Current Coupon 7.28%, Secured Debt (Maturity—August 9, 2024)(9)

  10,135  9,921  9,921 

              

Looking Glass Investments, LLC(12)(13)

 

Specialty Consumer Finance

            

   

Member Units (2.5 units)

     125  57 

   

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

     108  92 

         233  149 

              

LSF9 Atlantis Holdings, LLC(11)

 

Provider of Wireless Telecommunications Carrier Services

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.57%, Secured Debt (Maturity—May 1, 2023)(9)

  2,963  2,931  2,978 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

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  13,720  14,082 

              

Point.360(10)

 

Fully Integrated Provider of Digital Media Services

            

   

Warrants (65,463 equivalent shares)

     69   

   

Common Stock (163,658 shares)

     273  63 

         342  63 

              

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)

  12,089  11,617  12,194 

              

PPC/SHIFT LLC(10)

 

Provider of Digital Solutions to Automotive Industry

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—June 6, 2022)(9)

  7,000  6,852  6,852 

              

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)

  9,519  7,904  7,044 

              

PT Network, LLC(10)

 

Provider of Outpatient Physical Therapy and Sports Medicine Services

            

   

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

  16,225  15,979  15,979 

              

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)

  11,274  11,201  11,161 

              

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)

  4,195  4,125  4,242 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

Lulu's Fashion Lounge, LLC(10)

 

Fast Fashion E-Commerce Retailer

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.57%, Secured Debt (Maturity—August 28, 2022)(9)

  13,381  12,993  13,531 

              

Messenger, LLC(10)

 

Supplier of Specialty Stationery and Related Products to the Funeral Industry

            

   

LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.74%, Secured Debt (Maturity—September 9, 2020)(9)

  17,331  17,249  17,331 

              

Minute Key, Inc.

 

Operator of Automated Key Duplication Kiosks

            

   

Warrants (1,437,409 equivalent shares; Expiration—May 20, 2025; Strike price—$0.01 per share)

     280  1,170 

              

NBG Acquisition Inc(11)

 

Wholesaler of Home Décor Products

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 7.19%, Secured Debt (Maturity—April 26, 2024)(9)

  4,402  4,336  4,452 

              

New Media Holdings II LLC(11)(13)

 

Local Newspaper Operator

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.82%, Secured Debt (Maturity—July 14, 2022)(9)

  17,715  17,342  17,864 

              

NNE Partners, LLC(10)

 

Oil & Gas Exploration & Production

            

   

LIBOR Plus 8.00%, Current Coupon 9.49%, Secured Debt (Maturity—March 2, 2022)

  11,958  11,854  11,854 

              

North American Lifting Holdings, Inc.(11)

 

Crane Service Provider

            

   

LIBOR Plus 4.50% (Floor 1.00%), Current Coupon 6.19%, Secured Debt (Maturity—November 27, 2020)(9)

  7,745  6,913  7,256 

              

Novetta Solutions, LLC(11)

 

Provider of Advanced Analytics Solutions for Defense Agencies

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.70%, Secured Debt (Maturity—October 17, 2022)(9)

  14,636  14,189  14,239 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

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

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  14,581  14,629 

              

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  2,978  2,987 

              

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)

  3,910  3,826  880 

              

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  3 

              

SAFETY Investment Holdings, LLC

 

Provider of Intelligent Driver Record Monitoring Software and Services

            

   

Member Units (2,000,000 units)

     2,000  2,000 

              

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)

  10,812  10,538  10,352 

              

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  5,632  5,784 

              

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—October 13, 2021)(9)

  12,500  12,200  12,200 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

NTM Acquisition Corp.(11)

 

Provider of B2B Travel Information Content

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.94%, Secured Debt (Maturity—June 7, 2022)(9)

  6,186  6,126  6,155 

              

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  1,198 

              

P.F. Chang's China Bistro, Inc.(11)

 

Casual Restaurant Group

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.51%, Secured Debt (Maturity—September 1, 2022)(9)

  4,988  4,846  4,715 

              

Paris Presents Incorporated(11)

 

Branded Cosmetic and Bath Accessories

            

   

LIBOR Plus 8.75% (Floor 1.00%), Current Coupon 10.32%, Secured Debt (Maturity—December 31, 2021)(9)

  4,500  4,471  4,477 

              

Parq Holdings Limited Partnership(11)(13)(21)

 

Hotel & Casino Operator

            

   

LIBOR Plus 7.50% (Floor 1.00%), Current Coupon 9.19%, Secured Debt (Maturity—December 17, 2020)(9)

  7,481  7,399  7,528 

              

Permian Holdco 2, Inc.(11)

 

Storage Tank Manufacturer

            

   

14% PIK Unsecured Debt (Maturity—October 15, 2021)(19)

  306  306  306 

   

Preferred Stock (Permian Holdco 1, Inc.) (154,558 units)

     799  980 

   

Common Stock (Permian Holdco 1, Inc.) (154,558 units)

       140 

         1,105  1,426 

              

Pernix Therapeutics Holdings, Inc.(10)

 

Pharmaceutical Royalty

            

   

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

  3,129  3,129  1,971 

              

Point.360(10)

 

Fully Integrated Provider of Digital Media Services

            

   

Warrants (65,463 equivalent shares; Expiration—July 7, 2020; Strike price—$0.75 per share)

     69   

   

Common Stock (163,658 shares)

     273  11 

         342  11 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

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

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)

  13,371  13,283  13,271 

              

Strike, LLC(11)

 

Pipeline Construction and Maintenance Services

            

   

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.00%, Secured Debt (Maturity—November 30, 2022)(9)

  10,000  9,666  9,864 

              

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  5,588  5,624 

              

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  4,659  4,136 

              

Targus International, LLC(11)

 

Distributor of Protective Cases for Mobile Devices

            

   

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

  1,140  1,140  1,140 

   

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

     2,555  2,260 

         3,695  3,400 

              

TE Holdings, LLC(11)

 

Oil & Gas Exploration & Production

            

   

Member Units (97,048 units)

     970  728 

              

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)

  7,622  7,613  7,546 

   

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

  10,500  10,442  10,290 

         18,055  17,836 

              

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)

  2,218  2,208  2,226 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

PPC/SHIFT LLC(10)

 

Provider of Digital Solutions to Automotive Industry

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.69%, Secured Debt (Maturity—December 22, 2021)(9)

  6,869  6,748  6,869 

              

Prowler Acquisition Corp.(11)

 

Specialty Distributor to the Energy Sector

            

   

LIBOR Plus 4.50% (Floor 1.00%), Current Coupon 6.19%, Secured Debt (Maturity—January 28, 2020)(9)

  12,830  11,332  12,253 

              

PT Network, LLC(10)

 

Provider of Outpatient Physical Therapy and Sports Medicine Services

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.86%, Secured Debt (Maturity—November 30, 2021)(9)

  8,553  8,553  8,553 

              

QBS Parent, Inc.(11)

 

Provider of Software and Services to the Oil & Gas Industry

            

   

LIBOR Plus 4.75% (Floor 1.00%), Current Coupon 6.13%, Secured Debt (Maturity—August 7, 2021)(9)

  14,272  14,114  14,165 

              

Research Now Group, Inc. and Survey Sampling International, LLC(11)

 

Provider of Outsourced Online Surveying

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 7.13%, Secured Debt (Maturity—December 20, 2024)(9)

  13,500  12,826  12,826 

              

Resolute Industrial, LLC(10)

 

HVAC Equipment Rental and Remanufacturing

            

   

LIBOR Plus 7.62% (Floor 1.00%), Current Coupon 8.95%, Secured Debt (Maturity—July 26, 2022)(9)(25)

  17,088  16,770  16,770 

   

Member Units (601 units)

     750  750 

         17,520  17,520 

              

RGL Reservoir Operations Inc.(11)(13)(21)

 

Oil & Gas Equipment and Services

            

   

1% Current / 9% PIK Secured Debt (Maturity—December 21, 2024)(19)

  721  407  407 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

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

TMC Merger Sub Corp.(11)

 

Refractory & Maintenance Services Provider

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—October 31, 2022)(9)

  12,500  12,376  12,438 

              

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)

  4,913  4,567  3,635 

              

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)

  10,994  10,936  10,975 

              

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  15,602  15,602 

              

TVG-I-E CMN ACQUISITION, LLC(10)

 

Organic Lead Generation for Online Postsecondary Schools

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—November 3, 2021)(9)

  6,459  6,334  6,334 

              

Tweddle Group, Inc.(11)

 

Provider of Technical Information Services to Automotive OEMs

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.00%, Secured Debt (Maturity—October 21, 2022)(9)

  8,462  8,295  8,419 

              

UniRush, LLC

 

Provider of Prepaid Debit Card Solutions

            

   

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

  12,000  10,981  12,000 

   

Warrants (444,725 equivalent units)

     1,250  1,250 

         12,231  13,250 

              

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)

  11,514  11,435  11,456 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

RM Bidder, LLC(10)

 

Scripted and Unscripted TV and Digital Programming Provider

            

   

Warrants (327,532 equivalent units; Expiration—October 20, 2025; Strike price—$14.28 per unit)

     425   

   

Member Units (2,779 units)

     46  20 

         471  20 

              

SAFETY Investment Holdings, LLC

 

Provider of Intelligent Driver Record Monitoring Software and Services

            

   

Member Units (2,000,000 units)

     2,000  1,670 

              

Salient Partners L.P.(11)

 

Provider of Asset Management Services

            

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 9.85%, Secured Debt (Maturity—June 9, 2021)(9)

  10,081  9,870  9,778 

              

SiTV, LLC(11)

 

Cable Networks Operator

            

   

10.375% Secured Debt (Maturity—July 1, 2019)

  10,429  7,006  7,040 

              

SMART Modular Technologies, Inc.(10)(13)

 

Provider of Specialty Memory Solutions

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.66%, Secured Debt (Maturity—August 9, 2022)(9)

  14,625  14,351  14,552 

              

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)

  13,234  13,170  13,341 

              

Staples Canada ULC(10)(13)(21)

 

Office Supplies Retailer

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.43%, Secured Debt (Maturity—September 12, 2023)(9)(22)

  20,000  19,617  18,891 

              

Strike, LLC(11)

 

Pipeline Construction and Maintenance Services

            

   

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.50%, Secured Debt (Maturity—November 30, 2022)(9)

  9,500  9,250  9,643 

   

LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.45%, Secured Debt (Maturity—May 30, 2019)(9)

  2,500  2,479  2,513 

         11,729  12,156 

              

Table of Contents


MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

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

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  7,377  7,377 

              

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  1,464  1,488 

              

Virtex Enterprises, LP(10)

 

Specialty, Full-Service Provider of Complex Electronic Manufacturing Services

            

   

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

  1,667  1,559  1,559 

   

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

     333  612 

   

Warrants (11 equivalent units)

     186  220 

         2,078  2,391 

              

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)

  10,058  9,968  10,058 

              

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  4,885 

              

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)

  1,153  1,147  1,093 

              

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  6,342  6,386 

              

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)

  11,428  10,969  11,398 

              
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

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)

  7,687  7,637  7,687 

              

Synagro Infrastructure Company, Inc(11)

 

Waste Management Services

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 7.19%, Secured Debt (Maturity—August 22, 2020)(9)

  9,161  8,933  8,608 

              

Tectonic Holdings, LLC

 

Financial Services Organization

            

   

Member Units (200,000 units)(8)

     2,000  2,320 

              

TE Holdings, LLC(11)

 

Oil & Gas Exploration & Production

            

   

Member Units (97,048 units)

     970  158 

              

TeleGuam Holdings, LLC(11)

 

Cable and Telecom Services Provider

            

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 10.07%, Secured Debt (Maturity—April 12, 2024)(9)

  7,750  7,602  7,808 

              

TGP Holdings III LLC(11)

 

Outdoor Cooking & Accessories

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.69%, Secured Debt (Maturity—September 25, 2024)(9)

  6,898  6,820  6,969 

   

LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 10.19%, Secured Debt (Maturity—September 25, 2025)(9)

  5,000  4,927  5,075 

         11,747  12,044 

              

The Container Store, Inc.(11)

 

Operator of Stores Offering Storage and Organizational Products

            

   

LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.69%, Secured Debt (Maturity—August 15, 2021)(9)

  9,938  9,660  9,652 

              

TMC Merger Sub Corp.(11)

 

Refractory & Maintenance Services Provider

            

   

LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.88%, Secured Debt (Maturity—October 31, 2022)(9)(26)

  17,653  17,516  17,741 

              

TOMS Shoes, LLC(11)

 

Global Designer, Distributor, and Retailer of Casual Footwear

            

   

LIBOR Plus 5.50% (Floor 1.00%), Current Coupon 6.98%, Secured Debt (Maturity—October 30, 2020)(9)

  4,875  4,610  2,901 

              

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MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 20162017

(dollars in thousands)

Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

Turning Point Brands, Inc.(10)(13)

 

Marketer/Distributor of Tobacco Products

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.61%, Secured Debt (Maturity—May 17, 2022)(9)(25)

  8,436  8,364  8,605 

              

TVG-I-E CMN ACQUISITION, LLC(10)

 

Organic Lead Generation for Online Postsecondary Schools

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.56%, Secured Debt (Maturity—November 3, 2021)(9)

  8,170  8,031  8,170 

              

Tweddle Group, Inc.(11)

 

Provider of Technical Information Services to Automotive OEMs

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.38%, Secured Debt (Maturity—October 21, 2022)(9)

  6,114  6,011  6,023 

              

U.S. TelePacific Corp.(11)

 

Provider of Communications and Managed Services

            

   

LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.69%, Secured Debt (Maturity—May 2, 2023)(9)

  20,703  20,507  19,862 

              

US Joiner Holding Company(11)

 

Marine Interior Design and Installation

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.70%, Secured Debt (Maturity—April 16, 2020)(9)

  13,465  13,366  13,398 

              

VIP Cinema Holdings, Inc.(11)

 

Supplier of Luxury Seating to the Cinema Industry

            

   

LIBOR Plus 6.00% (Floor 1.00%), Current Coupon 7.70%, Secured Debt (Maturity—March 1, 2023)(9)

  7,700  7,666  7,777 

              

Vistar Media, Inc.(10)

 

Operator of Digital Out-of-Home Advertising Platform

            

   

LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.69%, Secured Debt (Maturity—February 16, 2022)(9)

  3,319  3,048  3,102 

   

Warrants (70,207 equivalent shares; Expiration—February 17, 2027; Strike price—$0.01 per share)

     331  499 

         3,379  3,601 

              

Wellnext, LLC(10)

 

Manufacturer of Supplements and Vitamins

            

   

LIBOR Plus 10.10% (Floor 1.00%), Current Coupon 11.67%, Secured Debt (Maturity—July 21, 2022)(9)(23)

  9,930  9,857  9,930 

              

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MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 2017

(dollars in thousands)

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 (51.4% of total investments at fair value)

    $1,037,510 $1,026,676 

Total Portfolio Investments, December 31, 2016

    $1,871,883 $1,996,906 
Portfolio Company(1)(20)
 Business Description
 Type of Investment(2)(3)(27)
 Principal(4)
 Cost(4)
 Fair Value(18)
 
  

Wireless Vision Holdings, LLC(10)

 

Provider of Wireless Telecommunications Carrier Services

            

   

LIBOR Plus 8.91% (Floor 1.00%), Current Coupon 10.27%, Secured Debt (Maturity—September 29, 2022)(9)(24)

  12,932  12,654  12,654 

              

Wirepath LLC(11)

 

E-Commerce Provider into Connected Home Market

            

   

LIBOR Plus 5.25% (Floor 1.00%), Current Coupon 6.87%, Secured Debt (Maturity—August 5, 2024)(9)

  4,988  4,964  5,055 

              

Zilliant Incorporated

 

Price Optimization and Margin Management Solutions

            

   

Preferred Stock (186,777 shares)

     154  260 

   

Warrants (952,500 equivalent shares; Expiration—June 15, 2022; Strike price—$0.001 per share)

     1,071  1,189 

         1,225  1,449 

Subtotal Non-Control/Non-Affiliate Investments (49.8% of total investments at fair value)

    $1,107,447 $1,081,745 

Total Portfolio Investments, December 31, 2017

    $2,004,798 $2,171,305 

(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, 2016.2017. As noted in this schedule, 64%67% of the loans (based on the par amount of the loans) of the loansamount) contain LIBOR floors which range between 0.50% and 2.25%, with a weighted-average LIBOR floor of approximately 1.04%1.02%.

(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.

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MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

December 31, 2017

(dollars in thousands)

(15)
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.

(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)
Investment fair value was determined using significant unobservable inputs, unless otherwise noted. See Note C for further discussion.

(19)
PIK interest income and cumulative dividend income represent income not paid currently in cash.

(20)
All portfolio company headquarters are based in the United States, unless otherwise noted.

(21)
Portfolio company headquarters are located outside of the United States.

(22)
In connection with the Company's debt investment in Staples Canada ULC to help mitigate any potential adverse change in foreign exchange rates during the term of the Company's investment, the Company entered into a forward foreign currency contract with Cadence Bank to lend $24.2 million Canadian Dollars and receive $20.0 million U.S. Dollars with a settlement date of September 12, 2018. The unrealized appreciation on the forward foreign currency contract is $0.7 million as of December 31, 2017. This unrealized appreciation is offset by the foreign currency translation depreciation on the investment.

(23)
The Company has entered into an intercreditor agreement that entitles the Company to the "last out" tranche of the first lien secured loans, whereby the "first out" tranche will receive priority as to the "last out" tranche with respect to payments of principal, interest, and any other amounts due thereunder. Therefore, the Company receives a higher interest rate than the contractual stated interest rate of LIBOR plus 7.50% (Floor 1.00%) per the Credit Agreement and the Consolidated Schedule of Investments above reflects such higher rate.

(24)
The Company has entered into an intercreditor agreement that entitles the Company to the "last out" tranche of the first lien secured loans, whereby the "first out" tranche will receive priority as to the "last out" tranche with respect to payments of principal, interest, and any other amounts due thereunder. Therefore, the Company receives a higher interest rate than the contractual stated interest rate of LIBOR plus 8.50% (Floor 1.00%) per the Credit Agreement and the Consolidated Schedule of Investments above reflects such higher rate.

(25)
As part of the credit agreement with the portfolio company, the Company is entitled to the "last out" tranche of the first lien secured loans, whereby the "first out" tranche receives priority over the "last out" tranche with respect to payments of principal, interest, and any other amounts due thereunder. The rate the Company receives per the Credit Agreement is the same as the rate reflected in the Consolidated Schedule of Investments above.

(26)
The Company has entered into an intercreditor agreement that entitles the Company to the "first out" tranche of the first lien secured loans, whereby the "first out" tranche will receive priority as to the "last out" tranche with respect to payments of principal, interest, and any other amounts due thereunder. Therefore, the Company receives a lower interest rate than the contractual stated interest rate of LIBOR plus 6.64% (Floor 1.00%) per the Credit Agreement and the Consolidated Schedule of Investments above reflects such lower rate.

(27)
All Company's portfolio investments are generally subject to restrictions on resale as "restricted securities", unless otherwise noted.

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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 a variety of 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"), Main Street Capital II, LP ("MSC II") and Main 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 receivereceives 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 under the Investment Advisers Act of 1940, as amended. 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 taxable 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)

NOTE A—ORGANIZATION AND BASIS OF PRESENTATION (Continued)

        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.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

2.     Basis of Presentation

        Main Street's consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). The Company is an investment company following accounting and reporting guidance in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 946,Financial Services—Investment Companies ("ASC 946"). 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 (see Note C—Fair Value Hierarchy for Investments and Debentures—Portfolio Composition—Investment Portfolio Composition for additional discussion of Main Street's Investment Portfolio and definitions for the terms Private Loan and Other Portfolio). Main Street's results of operations and cash flows for the three months ended March 31, 20172018 and 2016,2017, and financial position as of March 31, 20172018 and December 31, 2016,2017, are presented on a consolidated basis. The effects of all intercompany transactions between Main Street and its consolidated subsidiaries have been eliminated in consolidation. Certain reclassifications have been made to prior period balances to conform with the current presentation.

        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 months ended March 31, 20172018 and 20162017 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, 2016.2017. 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 the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC")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. Main Street has determined that all of its portfolio investments do not qualify for this exception, including the investment in the External Investment


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE A—ORGANIZATION AND BASIS OF PRESENTATION (Continued)

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)."


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

        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 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 privately held, 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


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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 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


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

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, privateprivately held 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


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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 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


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

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 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


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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 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


Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

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 13 LMM portfolio companies for the three months ended March 31, 2018, representing approximately 17% of the total LMM portfolio at fair value as of March 31, 2018, and on a total of 12 LMM portfolio companies for the three months ended March 31, 2017, representing approximately 16% of the total LMM portfolio at fair value as of March 31, 2017, and on a total of 11 LMM portfolio companies for the three months ended March 31, 2016, representing approximately 18% of the total LMM portfolio at fair value as of March 31, 2016.2017. Excluding its investments in new LMM portfolio companies which have not been in the Investment Portfolio for at least twelve months subsequent to the initial investment decision as of March 31, 20172018 and 2016,2017, as applicable, and its investments in the LMM portfolio companies that were not reviewed because their equity is publicly traded, which represented one LMM portfolio company as of March 31, 2017, or they hold real estate for which a third-party appraisal is obtained on at least an annual basis, the percentage of the LMM portfolio reviewed and certified by its independent financial advisory services firm for the three months ended March 31, 2018 and 2017 was 20% and 2016 was 18% and 19% of the total LMM portfolio at fair value as of March 31, 20172018 and 2016,2017, 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 the vast majority of the Middle Market portfolio investments are typically valued using third-party quotes or other independent pricing services (including 95% and 94% of the Middle Market portfolio investments as of both March 31, 20172018 and December 31, 2016, respectively)2017), Main Street does not generally consult with any financial advisory services firms in connection with determining the fair value of its Middle Market investments.


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Notes to Consolidated Financial Statements (Continued)

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NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

        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 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 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


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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 9six Private Loan portfolio companies for the three months ended March 31, 2018, representing approximately 16% of the total Private Loan portfolio at fair value as of March 31, 2018, and on a total of nine Private Loan portfolio companies for the three months ended March 31, 2017, representing approximately 27% of the total Private Loan portfolio at fair value as of March 31, 2017, and on a total of 10 Private Loan portfolio companies for the three months ended March 31, 2016, representing approximately 36% of the total Private Loan portfolio at fair value as of March 31, 2016.2017. 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 March 31, 20172018 and 2016,2017, as applicable, and its investments in its Private Loan portfolio companies that were not reviewed because the investment is valued based upon third-party quotes or other independent pricing, the percentage of the Private Loan portfolio reviewed and certified by its independent financial advisory services firm for the three months ended March 31, 2018 and 2017 was 27% and 2016 was 44% and 51% of the total Private Loan portfolio at fair value as of March 31, 20172018 and 2016,2017, respectively.

        For valuation purposes, all of Main Street's Other Portfolio investments are non-control investments. Main Street's Other Portfolio investments comprised 5.4%4.4% and 5.0%, respectively,4.8% of Main Street's Investment Portfolio at fair value as of March 31, 20172018 and December 31, 2016.2017, respectively. 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 itsthese investments using the NAV valuation method. For its 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


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Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

hypothetical sale using the Yield-to-Maturity valuation method. For its 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 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.

        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


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(Unaudited)

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 March 31, 20172018 and December 31, 20162017 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 U.S. GAAP 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 consolidated 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,


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Notes to Consolidated Financial Statements (Continued)

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NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

those estimated values may differ materially from the values that would have been determined had a ready market for the 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 March 31, 2017,2018, cash balances totaling $29.9$25.1 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.

4.     Interest, Dividend and Fee Income

        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


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Notes to Consolidated Financial Statements (Continued)

(Unaudited)

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 sold or written off, Main Street removes it from non-accrual status.

        As of March 31, 2018, Main Street's total Investment Portfolio had six investments on non-accrual status, which comprised approximately 0.8% of its fair value and 3.3% of its cost. As of December 31, 2017, Main Street's total Investment Portfolio had five investments on non-accrual status, which comprised approximately 0.2% of its fair value and 2.7% of its cost. As of December 31, 2016, Main Street's total Investment Portfolio had four investments on non-accrual status, which comprised approximately 0.6% of its fair value and 3.0%2.3% of its cost.

        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.8.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


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Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

arrears are no longer collectible. For the three months ended March 31, 20172018 and 2016,2017, (i) approximately 3.4%1.0% and 3.1%3.4%, respectively, of Main Street's total investment income was attributable to PIK interest income not paid currently in cash and (ii) approximately 1.8%1.0% and 0.8%1.8%, respectively, of Main Street's total investment income was attributable to cumulative dividend income not paid currently in cash.

        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.


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Notes to Consolidated Financial Statements (Continued)

(Unaudited)

        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
March 31,
  Three Months Ended
March 31,
 

 2017 2016  2018 2017 

 (dollars in
thousands)

  (dollars in
thousands)

 

Interest, fee and dividend income:

          

Interest income

 $38,463 $32,182  $39,612 $38,463 

Dividend income

 6,982 7,629  13,831 6,982 

Fee income

 2,444 2,064  2,499 2,444 

Total interest, fee and dividend income

 $47,889 $41,875  $55,942 $47,889 

5.     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.10.). These fees are approximately 3.4% of the total commitment and draw 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, as well as the commitment fees and are amortized into interest expense over the termleverage fees (approximately 3.4% of the individual instrument.total commitment and draw amounts, as applicable) on the SBIC debentures (as discussed further in Note E) which are not accounted for under the fair value option under ASC 825 (as discussed further in Note B.11.). Deferred financing costs in connection with the Credit Facility are capitalized as an asset. Deferred financing costs in connection with all other debt arrangements not using the fair value option are a direct deduction from the related debt liability.

6.     Equity Offering Costs

        The Company's offering costs are charged against the proceeds from equity offerings when the proceeds are received.

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 income based on the effective interest method over the life of the financing.


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Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

        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 unearned income, which is netted against the applicable debt investment, and accreted into interest


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Notes to Consolidated Financial Statements (Continued)

(Unaudited)

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.8.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 March 31, 2018 and 2017, approximately 2.9% and 2016, approximately 3.5% and 2.6%, respectively, of Main Street's total investment income was attributable to interest income from the accretion of discounts associated with debt investments, net of any premium reduction.

7.8.     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 Accounting Standards Update ("ASU") 2016-09,Compensation—Stock Compensation: Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09," as discussed further below in Note B.12.). 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


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Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.

8.9.     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 taxable 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 primarily 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""source-of-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


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Notes to Consolidated Financial Statements (Continued)

(Unaudited)

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. ThisThe Taxable Subsidiaries are each taxed at their normal corporate tax rates based on their taxable income. The income tax expense, or benefit, if any, and the related tax assets and liabilities, of the Taxable Subsidiaries are reflected in Main Street's consolidated financial statements.

        The External Investment Manager is an indirect wholly owned subsidiary of MSCC owned through a Taxable Subsidiary and is a disregarded entity for tax purposes. The External Investment Manager has entered into a tax sharing agreement with its Taxable Subsidiary owner. Since the External Investment Manager 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, and as a result of the tax sharing agreement with its Taxable Subsidiary owner, for its stand-alone financial reporting purposes the External Investment Manager is treated as if it 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 income tax expense, or benefit, if any, and the related tax assets and liabilities, of the External Investment Manager are reflected in the External Investment Manager's separate financial statements.

        In December 2017, the "Tax Cuts and Jobs Act" legislation was enacted. The Tax Cuts and Jobs Act includes significant changes to the U.S. corporate tax system, including a U.S. federal corporate income tax rate reduction from 35% to 21% and other changes. ASC 740,Income Taxes, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation was enacted. As such, Main Street has accounted for the tax effects as a result of the enactment of the Tax Cuts and Jobs Act beginning with the period ended December 31, 2017.

        The Taxable Subsidiaries and the External Investment Manager 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 consolidated 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.


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Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

        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.

9.10.   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.


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Notes to Consolidated Financial Statements (Continued)

(Unaudited)

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.

        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 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.

11.12.   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.


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Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

12.13.   Recently Issued or Adopted Accounting Standards

        In May 2014, the FASB issued ASU 2014-09,Revenue from Contracts with Customers (Topic 606)). ASU 2014-09 supersedes the revenue recognition requirements under ASC 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 March 2016, the FASB issued ASU 2016-08,Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarified the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10,Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarified the implementation guidance regarding performance


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Notes to Consolidated Financial Statements (Continued)

(Unaudited)

obligations and licensing arrangements. In May 2016, the FASB issued ASU No. 2016-12,Revenue from Contracts with Customers (Topic 606)—Narrow-Scope Improvements and Practical Expedients, which clarified guidance on assessing collectability, presenting sales tax, measuring noncash consideration, and certain transition matters. In December 2016, the FASB issued ASU No. 2016-20,Revenue from Contracts with Customers (Topic 606)—Technical Corrections and Improvements, which provided disclosure relief, and clarified the scope and application of the new revenue standard and related cost guidance. The new guidance will beis 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.Substantially all of Main Street's income is not within the scope of ASU 2014-09. For those income items that are within the scope (primarily fee income), Main Street expects to identifyhas similar performance obligations under ASC 606 as compared with deliverables and separate units of account previously identified. As a result, Main Street expectsStreet's timing of its revenueincome recognition to remainremains the same.

        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 presentedsame 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 accountingthe standard on Main Street's consolidated financial statements as none of its investments are measured through the use of the practical expedient.


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Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)was not material.

        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. While Main Street continues to assess the effect of adoption, Main Street currently believes the most significant change relates to the recognition of a new right-of-use asset and lease liability on its consolidated balance sheet for its office space operating lease. Main Street currently has one operating lease for office space and does not expect a significant change in the leasing activity between now and adoption. See further discussion of the operating lease obligation in Note M.

        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 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.7.

        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 iswas 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 consolidated 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.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

        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


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE C—FAIR VALUE HIERARCHY FOR INVESTMENTS AND DEBENTURES—PORTFOLIO COMPOSITION (Continued)

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:

        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.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE C—FAIR VALUE HIERARCHY FOR INVESTMENTS AND DEBENTURES—PORTFOLIO COMPOSITION (Continued)

        As of March 31, 20172018 and December 31, 2016,2017, all of Main Street's LMM portfolio investments except for the equity investment in one portfolio company consisted of illiquid securities issued by privateprivately held companies. The investment which was the exception was in a company with publicly traded equity. As a result, the fair value determination for theall of Main Street's 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 March 31, 20172018 and December 31, 2016, except for the one publicly traded equity security which was categorized as Level 2.2017.

        As of March 31, 20172018 and December 31, 2016,2017, 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 March 31, 20172018 and December 31, 2016.2017.

        As of March 31, 20172018 and December 31, 2016,2017, 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 March 31, 20172018 and December 31, 2016.2017.

        As of March 31, 20172018 and December 31, 2016,2017, Main Street's Other Portfolio investments consisted of illiquid securities issued by privateprivately held 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 March 31, 20172018 and December 31, 2016.2017.

        The fair value determination of each portfolio investment categorized as Level 3 required one or more of the following unobservable inputs:


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE C—FAIR VALUE HIERARCHY FOR INVESTMENTS AND DEBENTURES—PORTFOLIO COMPOSITION (Continued)


Table of Contents



MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

        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 ("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 B.1.—Valuation of the Investment 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 appraisals of collateral and fair values as determined by independent third parties, which are not presented in the tables below.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE C—FAIR VALUE HIERARCHY FOR INVESTMENTS AND DEBENTURES—PORTFOLIO COMPOSITION (Continued)

        The following tables provide a summary of the significant unobservable inputs used to fair value Main Street's Level 3 portfolio investments as of March 31, 20172018 and December 31, 2016:2017:

Type of
Investment
 Fair Value
as of
March 31,
2017
(in thousands)
 Valuation Technique Significant Unobservable Inputs Range(3) Weighted
Average(3)
 Median(3)  Fair Value
as of
March 31, 2018
(in thousands)
 Valuation Technique Significant Unobservable Inputs Range(3) Weighted
Average(3)
 Median(3) 

Equity investments

 $579,449 Discounted cash flow Weighted-average cost of capital 10.1% - 22.7% 12.7% 13.3%  $675,229 Discounted cash flow WACC 11.3% - 23.6% 13.9% 14.3% 

    Market comparable / Enterprise Value EBITDA multiple(1) 4.5x - 8.5x(2) 7.1x 6.0x     Market comparable / Enterprise Value EBITDA multiple(1) 4.5x - 8.5x(2) 7.3x 6.0x 

Debt investments

 $818,956 Discounted cash flow Risk adjusted discount factor 7.4% - 16.0%(2) 11.4% 11.1%  $943,653 Discounted cash flow Risk adjusted discount factor 7.1% - 16.8%(2) 11.3% 11.3% 

    Expected principal recovery percentage 3.0% - 100.0% 99.8% 100.0%     Expected principal recovery percentage 2.9% - 100.0% 99.7% 100.0% 

Debt investments

 $578,703 Market approach Third-party quote 15.0 - 105.0      $695,152 Market approach Third-party quote 11.0 - 106.5     

Total Level 3 investments

 $1,977,108        $2,314,034       

(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 3.5x4.0x - 17.5x and the range for risk adjusted discount factor is 4.8%4.3% - 43.0%35.0%.

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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,
2016
(in thousands)
 Valuation Technique Significant Unobservable Inputs Range(3) Weighted
Average(3)
 Median(3)  Fair Value
as of
December 31, 2017
(in thousands)
 Valuation Technique Significant Unobservable Inputs Range(3) Weighted
Average(3)
 Median(3) 

Equity investments

 $567,003 Discounted cash flow Weighted-average cost of capital 10.4% - 23.1% 13.0% 13.7%  $653,008 Discounted cash flow WACC 11.1% - 23.2% 13.7% 14.0% 

    Market comparable / Enterprise Value EBITDA multiple(1) 4.5x - 8.5x(2) 7.1x 6.0x     Market comparable / Enterprise Value EBITDA multiple(1) 4.3x - 8.5x(2) 7.3x 6.0x 

Debt investments

 $808,895 Discounted cash flow Risk adjusted discount factor 7.4% - 15.9%(2) 11.8% 11.6%  $858,816 Discounted cash flow Risk adjusted discount factor 6.7% - 16.1%(2) 11.2% 11.0% 

    Expected principal recovery percentage 3.0% - 100.0% 99.7% 100.0%     Expected principal recovery percentage 2.9% - 100.0% 99.8% 100.0% 

Debt investments

 $618,928 Market approach Third-party quote 22.5 - 108.0      $659,481 Market approach Third-party quote 11.0 - 106.0     

Total Level 3 investments

 $1,994,826        $2,171,305       

(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 3.3x4.0x - 17.5x and the range for risk adjusted discount factor is 4.8%4.3% - 38.0%30.0%.

(3)
Does not include investments for which the valuation technique does not include the use of the applicable fair value input.

Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE C—FAIR VALUE HIERARCHY FOR INVESTMENTS AND DEBENTURES—PORTFOLIO COMPOSITION (Continued)

        The following tables provide a summary of changes in fair value of Main Street's Level 3 portfolio investments for the three month periods ended March 31, 20172018 and 20162017 (amounts in thousands):

Type of
Investment
 Fair Value
as of
December 31,
2016
 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 March 31,
2017
  Fair Value
as of
December 31,
2017
 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
March 31,
2018
 

Debt

 $1,427,823 $ $(190,366)$175,026 $1,340 $(10,108)$(6,056)$1,397,659  $1,518,297 $ $(154,935)$270,617 $11,615 $(3,648)$(3,141)$1,638,805 

Equity

 549,453  (9,119) 25,691 (19,775) 11,876 6,056 564,182  641,493  (17,191) 51,027 (19,069) 4,153 3,141 663,554 

Equity Warrant

 17,550  (1,673) 331 (1,107) 166  15,267  11,515     160  11,675 

 $1,994,826 $ $(201,158)$201,048 $(19,542)$1,934 $ $1,977,108  $2,171,305 $ $(172,126)$321,644 $(7,454)$665 $ $2,314,034 

(1)
Includes the impact of non-cash conversions. These transactions represent non-cash investing activities. See additional cash flow information at the consolidated statements of cash flows.
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 March 31,
2016
  Fair Value
as of
December 31,
2016
 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
March 31,
2017
 

Debt

 $1,265,544 $ $(70,061)$101,465 $4,510 $(11,905)$(2,556)$1,286,997  $1,427,823 $ $(190,366)$175,026 $1,340 $(10,108)$(6,056)$1,397,659 

Equity

 519,966  (5,987) 16,959 (16,816) (1,035) 2,556 515,643  549,453  (9,119) 25,691 (19,775) 11,876 6,056 564,182 

Equity Warrant

 10,646   2,819  (1,044)  12,421  17,550  (1,673) 331 (1,107) 166  15,267 

 $1,796,156 $ $(76,048)$121,243 $(12,306)$(13,984)$ $1,815,061  $1,994,826 $ $(201,158)$201,048 $(19,542)$1,934 $ $1,977,108 

(1)
Includes the impact of non-cash conversions. These transactions represent non-cash investing activities. See additional cash flow information at the consolidated statements of cash flows.

        As of March 31, 20172018 and December 31, 2016,2017, 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 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


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

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 estimated market interest rates in isolation would result in a significantly lower (higher) fair value measurement.


Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE C—FAIR VALUE HIERARCHY FOR INVESTMENTS AND DEBENTURES—PORTFOLIO COMPOSITION (Continued)

        The following tables provide a summary of the significant unobservable inputs used to fair value Main Street's Level 3 SBIC debentures as of March 31, 20172018 and December 31, 20162017 (amounts in thousands):

Type of
Instrument
 Fair Value as of
March 31, 2017
 Valuation Technique Significant Unobservable Inputs Range Weighted Average  Fair Value as of
March 31, 2018
 Valuation Technique Significant Unobservable Inputs Range Weighted
Average
 

SBIC debentures

 $49,155 Discounted cash flow Estimated market interest rates 4.2% - 5.2% 4.5% $44,623 Discounted cash flow Estimated market interest rates 4.9% - 5.7% 5.1% 

 

Type of
Instrument
 Fair Value as of
December 31,
2016
 Valuation Technique Significant Unobservable Inputs Range Weighted Average  Fair Value as of
December 31, 2017
 Valuation Technique Significant Unobservable Inputs Range Weighted
Average
 

SBIC debentures

 $74,803 Discounted cash flow Estimated market interest rates 3.4% - 5.3% 4.2% $48,608 Discounted cash flow Estimated market interest rates 4.9% - 5.5% 5.1% 

        The following tables provide a summary of changes for the Level 3 SBIC debentures recorded at fair value for the three month periods ended March 31, 20172018 and 20162017 (amounts in thousands):

Type of
Instrument
 Fair Value as of
December 31, 2016
 Repayments Net Realized
Loss
 New SBIC
Debentures
 Net
Unrealized
(Appreciation)
Depreciation
 Fair Value as of
March 31, 2017
  Fair Value as of
December 31, 2017
 Repayments Net
Realized
Loss
 New SBIC
Debentures
 Net
Unrealized
(Appreciation)
Depreciation
 Fair Value as of
March 31, 2018
 

SBIC debentures at fair value

 $74,803 $(25,200)$5,217 $ $(5,665)$49,155  $48,608 $(4,000)$1,374 $ $(1,359)$44,623 

 

Type of
Instrument
 Fair Value as of
December 31, 2015
 Repayments New SBIC
Debentures
 Net
Unrealized
(Appreciation)
Depreciation
 Fair Value as of
March 31, 2016
  Fair Value as of
December 31, 2016
 Repayments Net
Realized
Loss
 New SBIC
Debentures
 Net
Unrealized
(Appreciation)
Depreciation
 Fair Value as of
March 31, 2017
 

SBIC debentures at fair value

 $73,860 $ $ $146 $74,006  $74,803 $(25,200)$5,217 $ $(5,665)$49,155 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE C—FAIR VALUE HIERARCHY FOR INVESTMENTS AND DEBENTURES—PORTFOLIO COMPOSITION (Continued)

        At March 31, 20172018 and December 31, 2016,2017, 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 March 31, 2017
 Fair Value Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
 Significant Other
Observable Inputs
(Level 2)
 Significant
Unobservable Inputs
(Level 3)
 
At March 31, 2018
 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

 $886,559 $ $2,270 $884,289  $1,049,772 $ $ $1,049,772 

Middle Market portfolio investments

 568,796   568,796  617,941   617,941 

Private Loan portfolio investments

 384,220   384,220  496,533   496,533 

Other Portfolio investments

 106,331   106,331  101,066   101,066 

External Investment Manager

 33,472   33,472  48,722   48,722 

Total portfolio investments

 1,979,378  2,270 1,977,108 

Marketable securities and idle funds investments

     

Total investments

 $1,979,378 $ $2,270 $1,977,108  $2,314,034 $ $ $2,314,034 

SBIC debentures at fair value

 $49,155 $ $ $49,155  $44,623 $ $ $44,623 

 


  
 Fair Value Measurements   
 Fair Value Measurements 

  
 (in thousands)
   
 (in thousands)
 
At December 31, 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 December 31, 2017
 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

 $892,592 $ $2,080 $890,512  $948,196 $ $ $948,196 

Middle Market portfolio investments

 630,578   630,578  609,256   609,256 

Private Loan portfolio investments

 342,867   342,867  467,475   467,475 

Other Portfolio investments

 100,252   100,252  104,610   104,610 

External Investment Manager

 30,617   30,617  41,768   41,768 

Total portfolio investments

 1,996,906  2,080 1,994,826 

Marketable securities and idle funds investments

     

Total investments

 $1,996,906 $ $2,080 $1,994,826  $2,171,305 $ $ $2,171,305 

SBIC debentures at fair value

 $74,803 $ $ $74,803  $48,608 $ $ $48,608 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE C—FAIR VALUE HIERARCHY FOR INVESTMENTS AND DEBENTURES—PORTFOLIO COMPOSITION (Continued)

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 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


Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

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$20 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.

        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 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


Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE C—FAIR VALUE HIERARCHY FOR INVESTMENTS AND DEBENTURES—PORTFOLIO COMPOSITION (Continued)

relationships, management expertise and capital raising capabilities. In the first quarter of 2014, Main Street began allocating costallocates the related expenses to the External Investment Manager pursuant to the sharing agreement. Main Street's total expenses for the three months ended March 31, 20172018 and 20162017 are net of expenses allocated to the External Investment Manager of $1.5$2.1 million and $1.2$1.5 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 months ended March 31, 2018, Main Street recorded investment income from one portfolio company in excess of 10% of total investment income. For the three months ended March 31, 2017, and 2016, Main 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 March 31, 20172018 and December 31, 20162017 (this information excludes


Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

the Other Portfolio investments and the External Investment Manager which are discussed further below):


 As of March 31, 2017  As of March 31, 2018 

 LMM(a) Middle Market Private Loan  LMM(a) Middle Market Private Loan 

 (dollars in millions)
  (dollars in millions)
 

Number of portfolio companies

 73 69 49  73 59 55 

Fair value

 $886.6 $568.8 $384.2  $1,049.8 $617.9 $496.5 

Cost

 $772.1 $588.9 $403.7  $898.9 $629.9 $521.6 

% of portfolio at cost—debt

 67.6% 96.9% 94.0%  67.7% 96.7% 93.7% 

% of portfolio at cost—equity

 32.4% 3.1% 6.0%  32.3% 3.3% 6.3% 

% of debt investments at cost secured by first priority lien

 96.1% 88.8% 90.2%  98.4% 91.0% 94.3% 

Weighted-average annual effective yield(b)

 12.2% 8.6% 9.6%  12.1% 9.2% 9.4% 

Average EBITDA(c)

 $4.6 $95.5 $24.8  $4.8 $86.3 $43.0 

(a)
At March 31, 2017,2018, Main Street had equity ownership in approximately 99%97% of its LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was approximately 37%38%.

(b)
The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of March 31, 2017,2018, 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-averageThe 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 fivesix LMM portfolio companies one Middle

Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE C—FAIR VALUE HIERARCHY FOR INVESTMENTS AND DEBENTURES—PORTFOLIO COMPOSITION (Continued)


 As of December 31, 2016  As of December 31, 2017 

 LMM(a) Middle Market Private Loan  LMM(a) Middle Market Private Loan 

 (dollars in millions)
  (dollars in millions)
 

Number of portfolio companies

 73 78 46  70 62 54 

Fair value

 $892.6 $630.6 $342.9  $948.2 $609.3 $467.5 

Cost

 $760.3 $646.8 $357.7  $776.5 $629.7 $489.2 

% of total investments at cost—debt

 69.1% 97.2% 93.5% 

% of total investments at cost—equity

 30.9% 2.8% 6.5% 

% of portfolio at cost—debt

 67.1% 97.3% 93.6% 

% of portfolio at cost—equity

 32.9% 2.7% 6.4% 

% of debt investments at cost secured by first priority lien

 92.1% 89.1% 89.0%  98.1% 90.5% 94.5% 

Weighted-average annual effective yield(b)

 12.5% 8.5% 9.6%  12.0% 9.0% 9.2% 

Average EBITDA(c)

 $5.9 $98.6 $22.7  $4.4 $78.3 $39.6 

(a)
At December 31, 2016,2017, Main Street had equity ownership in approximately 99%97% of its LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was approximately 36%39%.

Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(b)
The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of December 31, 2016,2017, 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-averageThe 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 fivesix LMM portfolio companies, one Middle Market portfolio company and three Private Loan portfolio companies, as EBITDA is not a meaningful valuation metric for Main Street's investments in these portfolio companies.companies, and those portfolio companies whose primary purpose is to own real estate.

        As of March 31, 2017,2018, Main Street had Other Portfolio investments in teneleven companies, collectively totaling approximately $106.3 million in fair value and approximately $111.8 million in cost basis and which comprised approximately 5.4% of Main Street's Investment Portfolio at fair value. As of December 31, 2016, Main Street had Other Portfolio investments in ten companies, collectively totaling approximately $100.3$101.1 million in fair value and approximately $107.1 million in cost basis and which comprised approximately 5.0%4.4% of Main Street's Investment Portfolio at fair value.


Table As of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE C—FAIR VALUE HIERARCHY FOR INVESTMENTS AND DEBENTURES—PORTFOLIO COMPOSITION (Continued)December 31, 2017, Main Street had Other Portfolio investments in eleven companies, collectively totaling approximately $104.6 million in fair value and approximately $109.4 million in cost basis and which comprised approximately 4.8% 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 March 31, 2018, there was no cost basis in this investment and the investment had a fair value of approximately $48.7 million, which comprised approximately 2.1% of Main Street's Investment Portfolio at fair value. As of December 31, 2017, there was no cost basis in this investment and the investment had a fair value of approximately $33.5$41.8 million, which comprised approximately 1.7% of Main Street's Investment Portfolio at fair value. As of December 31, 2016, there was no cost basis in this investment and the investment had a fair value of approximately $30.6 million, which comprised approximately 1.5%1.9% 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 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 March 31, 20172018 and December 31, 20162017 (this information excludes the Other Portfolio investments and the External Investment Manager).

Cost:
 March 31, 2017 December 31, 2016  March 31, 2018 December 31, 2017 

First lien debt

 76.6% 76.1%  78.7% 79.0% 

Equity

 15.6% 14.5%  16.1% 15.3% 

Second lien debt

 6.2% 7.7%  4.1% 4.5% 

Equity warrants

 1.0% 1.1%  0.7% 0.7% 

Other

 0.6% 0.6%  0.4% 0.5% 

 100.0% 100.0%  100.0% 100.0% 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)


Fair Value:
 March 31, 2017 December 31, 2016  March 31, 2018 December 31, 2017 

First lien debt

 69.6% 68.7%  71.5% 70.5% 

Equity

 23.2% 22.6%  23.7% 24.4% 

Second lien debt

 5.8% 7.2%  3.8% 4.1% 

Equity warrants

 0.8% 0.9%  0.6% 0.6% 

Other

 0.6% 0.6%  0.4% 0.4% 

 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 March 31, 20172018 and December 31, 20162017 (this information excludes the Other


Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE C—FAIR VALUE HIERARCHY FOR INVESTMENTS AND DEBENTURES—PORTFOLIO COMPOSITION (Continued)

Portfolio investments and the External Investment Manager). The geographic composition is determined by the location of the corporate headquarters of the portfolio company.

Cost:
 March 31, 2017 December 31, 2016  March 31, 2018 December 31, 2017 

Southwest

 28.3% 29.7%  27.4% 26.1% 

West

 24.1% 20.7% 

Midwest

 23.4% 23.0%  20.4% 22.3% 

West

 15.9% 16.1% 

Northeast

 15.2% 14.8%  15.6% 15.2% 

Southeast

 14.1% 13.1%  10.2% 12.8% 

Canada

 1.4% 1.7%  1.4% 1.9% 

Other Non-United States

 1.7% 1.6%  0.9% 1.0% 

 100.0% 100.0%  100.0% 100.0% 

 

Fair Value:
 March 31, 2017 December 31, 2016  March 31, 2018 December 31, 2017 

Southwest

 28.6% 31.0%  28.4% 26.8% 

West

 26.0% 23.7% 

Midwest

 22.1% 21.2%  19.1% 20.3% 

West

 18.4% 18.3% 

Northeast

 14.4% 13.9%  14.9% 14.6% 

Southeast

 13.6% 12.7%  9.4% 11.9% 

Canada

 1.2% 1.4%  1.3% 1.8% 

Other Non-United States

 1.7% 1.5%  0.9% 0.9% 

 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


Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE C—FAIR VALUE HIERARCHY FOR INVESTMENTS AND DEBENTURES—PORTFOLIO COMPOSITION (Continued)

as of March 31, 20172018 and December 31, 20162017 (this information excludes the Other Portfolio investments and the External Investment Manager).

Cost:
 March 31, 2017 December 31, 2016  March 31, 2018 December 31, 2017 

Construction & Engineering

 8.2% 6.4% 

Energy Equipment & Services

 7.7% 7.5%  7.0% 6.9% 

Commercial Services & Supplies

 5.4% 4.5% 

Media

 5.4% 4.4% 

Hotels, Restaurants & Leisure

 6.7% 6.5%  5.1% 6.2% 

Construction & Engineering

 6.3% 5.3% 

Media

 6.0% 5.7% 

Specialty Retail

 4.8% 5.3% 

Machinery

 5.8% 5.6%  4.8% 5.2% 

Commercial Services & Supplies

 4.9% 5.0% 

Diversified Telecommunication Services

 4.1% 4.1% 

Aerospace & Defense

 4.0% 3.3% 

Food Products

 3.9% 1.9% 

Health Care Providers & Services

 3.8% 2.9% 

IT Services

 3.7% 3.9% 

Professional Services

 3.4% 3.7% 

Internet Software & Services

 3.3% 3.4% 

Electronic Equipment, Instruments & Components

 4.5% 4.5%  2.8% 3.4% 

Specialty Retail

 3.9% 4.4% 

Leisure Equipment & Products

 2.7% 3.0% 

Computers & Peripherals

 2.5% 2.8% 

Software

 2.4% 2.5% 

Communications Equipment

 2.2% 2.3% 

Diversified Consumer Services

 3.5% 2.8%  2.2% 1.6% 

Diversified Telecommunication Services

 3.3% 3.3% 

IT Services

 3.1% 3.9% 

Leisure Equipment & Products

 3.1% 0.9% 

Internet Software & Services

 3.0% 3.6% 

Auto Components

 2.8% 3.0% 

Health Care Providers & Services

 2.8% 3.0% 

Distributors

 1.8% 1.9% 

Building Products

 1.8% 1.9% 

Oil, Gas & Consumable Fuels

 1.7% 1.6% 

Construction Materials

 1.5% 1.7% 

Diversified Financial Services

 2.4% 2.3%  1.5% 1.6% 

Health Care Equipment & Supplies

 2.3% 2.3%  1.3% 2.0% 

Software

 2.2% 2.6% 

Computers & Peripherals

 2.2% 2.2% 

Food Products

 2.1% 2.6% 

Building Products

 2.1% 2.1% 

Communications Equipment

 1.7% 2.3% 

Oil, Gas & Consumable Fuels

 1.6% 1.2% 

Aerospace & Defense

 1.6% 0.9% 

Professional Services

 1.3% 1.4% 

Consumer Finance

 1.0% 1.5% 

Air Freight & Logistics

 1.0% 1.0% 

Internet & Catalog Retail

 1.2% 1.3% 

Road & Rail

 1.2% 1.0% 

Auto Components

 0.3% 1.9% 

Real Estate Management & Development

 1.0% 0.7%  0.3% 1.0% 

Distributors

 0.9% 1.1% 

Road & Rail

 0.0% 1.5% 

Other(1)

 9.2% 9.3%  5.7% 6.4% 

 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.

Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE C—FAIR VALUE HIERARCHY FOR INVESTMENTS AND DEBENTURES—PORTFOLIO COMPOSITION (Continued)

Fair Value:
 March 31, 2017 December 31, 2016  March 31, 2018 December 31, 2017 

Construction & Engineering

 7.8% 6.3% 

Energy Equipment & Services

 6.4% 6.2% 

Machinery

 7.0% 6.7%  6.3% 6.4% 

Specialty Retail

 5.2% 5.3% 

Diversified Consumer Services

 5.1% 5.9% 

Hotels, Restaurants & Leisure

 6.8% 6.5%  4.9% 5.9% 

Construction & Engineering

 6.5% 5.6% 

Diversified Consumer Services

 6.4% 5.5% 

Energy Equipment & Services

 6.1% 5.8% 

Commercial Services & Supplies

 4.7% 4.1% 

Media

 5.6% 5.2%  4.7% 3.8% 

Commercial Services & Supplies

 4.8% 5.0% 

Specialty Retail

 4.1% 4.6% 

IT Services

 3.8% 4.0% 

Aerospace & Defense

 3.8% 3.1% 

Health Care Providers & Services

 3.7% 2.8% 

Food Products

 3.7% 1.8% 

Diversified Telecommunication Services

 3.5% 3.4% 

Professional Services

 3.2% 3.5% 

Internet Software & Services

 3.2% 3.2% 

Computers & Peripherals

 2.9% 3.0% 

Leisure Equipment & Products

 2.6% 2.9% 

Software

 2.5% 2.5% 

Electronic Equipment, Instruments & Components

 4.0% 3.9%  2.3% 2.8% 

IT Services

 3.1% 3.7% 

Leisure Equipment & Products

 3.0% 0.9% 

Internet Software & Services

 2.9% 3.5% 

Auto Components

 2.7% 2.9% 

Health Care Providers & Services

 2.6% 2.9% 

Diversified Telecommunication Services

 2.6% 2.5% 

Communications Equipment

 2.1% 2.2% 

Construction Materials

 1.9% 1.9% 

Distributors

 1.7% 1.8% 

Building Products

 1.6% 1.8% 

Diversified Financial Services

 2.5% 2.3%  1.5% 1.6% 

Computers & Peripherals

 2.5% 2.3% 

Oil, Gas & Consumable Fuels

 1.5% 1.5% 

Health Care Equipment & Supplies

 2.4% 2.4%  1.2% 2.1% 

Software

 2.3% 2.6% 

Food Products

 2.0% 2.4% 

Building Products

 2.0% 1.9% 

Communications Equipment

 1.7% 2.3% 

Aerospace & Defense

 1.5% 0.8% 

Oil, Gas & Consumable Fuels

 1.4% 1.1% 

Professional Services

 1.3% 1.3% 

Road & Rail

 1.1% 1.0% 

Internet & Catalog Retail

 1.0% 1.1% 

Air Freight & Logistics

 1.2% 1.1%  0.7% 1.0% 

Real Estate Management & Development

 1.2% 0.7%  0.4% 1.1% 

Construction Materials

 1.0% 1.0% 

Consumer Finance

 0.9% 1.3% 

Distributors

 0.9% 1.1% 

Road & Rail

 0.0% 2.5% 

Auto Components

 0.3% 1.6% 

Other(1)

 7.0% 7.7%  4.7% 4.4% 

 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 March 31, 20172018 and December 31, 2016,2017, Main Street had no portfolio investment that was greater than 10% of the Investment Portfolio at fair value.


Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE C—FAIR VALUE HIERARCHY FOR INVESTMENTS AND DEBENTURES—PORTFOLIO COMPOSITION (Continued)

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 determine if any of Main Street's Control Investments (as defined in Note A, including those unconsolidated controlled portfolio companies defined as Control Investments 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 March 31, 20172018 and December 31, 2016,2017, Main Street had no single 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. The income test is measured by dividing the absolute value of the combined total of total investment income, net realized gain (loss) and net unrealized appreciation (depreciation) of each Control Investment for the period being tested by the absolute value of Main Street's pre-tax income for the same period. After performing the income test for the three months ended March 31, 2018, Main Street determined that the absolute value of its income from two of its Control Investments individually generated more than 20% of its total income, primarily due to the unrealized appreciation that was recognized on one of the investments and to the unrealized depreciation that was recognized on the other investment. As such, the External Investment Manager was considered a significant subsidiary. The summarized financial information for the External Investment Manager is included in Note D. CBT Nuggets, LLC, an unconsolidated portfolio company that was a Control Investment, but for which Main Street was not the majority owner and did not have rights to maintain greater than 50% of the board representation, was also considered a significant subsidiary at the 20% income level as of March 31, 2018. After performing the income test for the three months ended March 31, 2017, Main Street determined that the income from no single investment generated more than 20% of Main Street's total income. After performing the income test for the three months ended March 31, 2016, excluding investments which were fully exited after March 31, 2016, Main Street determined that its income from two of its Control Investments individually generated more than 20% of Main Street's total income, primarily due to the unrealized appreciation that was recognized on the investments during the three months ended March 31, 2016. As such, GRT Rubber Technologies, LLC was considered a significant subsidiary at the 20% level as of March 31, 2016. Additionally, CBT Nuggets, LLC, an unconsolidated portfolio company that was a Control Investment, but which was not majority-owned by Main Street, was also considered a significant subsidiary at the 20% level as of March 31, 2016.

        The following table shows the summarized financial information for CBT Nuggets, LLC:


 As of
March 31,
 As of
December 31,
  As of
March 31,
 As of
December 31,
 

 2017 2016  2018 2017 

 (dollars in
thousands)

  (dollars in thousands)
 

Balance Sheet Data

          

Current Assets

 $10,789 $7,275  $11,174 $14,585 

Noncurrent Assets

 12,266 13,610  11,601 11,769 

Current Liabilities

 18,201 17,883  16,853 17,570 

Noncurrent Liabilities

      

Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE C—FAIR VALUE HIERARCHY FOR INVESTMENTS AND DEBENTURES—PORTFOLIO COMPOSITION (Continued)


 
 Three Months
Ended
March 31,
 
 
 2017 2016 
 
 (dollars in
thousands)

 

Summary of Operations

       

Total Revenue

 $10,356 $9,080 

Gross Profit

  9,218  7,882 

Income from Operations

  3,524  3,135 

Net Income

  3,853  3,264 

        The following table shows the summarized financial information for GRT Rubber Technologies LLC:

 
 As of
March 31,
 As of
December 31,
 
 
 2017 2016 
 
 (dollars in
thousands)

 

Balance Sheet Data

       

Current Assets

 $9,308 $8,326 

Noncurrent Assets

  31,209  32,106 

Current Liabilities

  4,408  2,941 

Noncurrent Liabilities

  18,250  18,562 



 Three Months
Ended
March 31,
  Three Months
Ended March 31,
 

 2017 2016  2018 2017 

 (dollars in
thousands)

  (dollars
in thousands)

 

Summary of Operations

          

Total Revenue

 $6,931 $7,000  $9,903 $10,356 

Gross Profit

 1,553 1,694  8,951 9,218 

Income from Operations

 402 613  1,820 3,524 

Net Income

 (211) (61) 2,741 3,853 

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-listed BDC, to


Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE D—EXTERNAL INVESTMENT MANAGER (Continued)

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, 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 historical incentive fees otherwise earned. During the three months ended March 31, 20172018 and 2016,2017, the External Investment Manager earned $2.6$2.8 million and $2.3$2.6 million, respectively, of management fees (net of fees waived, if any) under the sub-advisory agreement with HMS Adviser.

        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 statementstatements of operations in "Net Change in Unrealized Appreciation (Depreciation)—Portfolio investments."

        The External Investment Manager has elected,is an indirect wholly owned subsidiary of MSCC owned through a Taxable Subsidiary and is a disregarded entity for tax purposes. The External Investment Manager has entered into a tax sharing agreement with its Taxable Subsidiary owner. Since the External Investment Manager 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, and as a result of the tax sharing agreement with its Taxable Subsidiary owner, for financial reporting purposes to bethe External Investment Manager is treated as a taxable entity, is not consolidated with Main Street for income tax purposes andif it 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. TheMain Street owns the External Investment Manager has elected to be treated as a taxable entity to enable it to receive fee income andthrough the Taxable Subsidiary to allow MSCC to continue to comply with the "source-income"


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

"source-of-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. TheAs a result of the above described financial reporting and tax treatment, 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 March 31, 20172018 and 2016,2017, Main Street allocated $1.5$2.1 million and $1.2$1.5 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 the dividend income received from the External Investment Manager. For the three months ended March 31, 20172018 and 2016,2017, the total contribution to Main Street's net investment income was $2.6 million and $2.2 million, respectively.

        Summarized financial information from the separate financial statements of the External Investment Manager as of March 31, 2018 and $1.9 million, respectively.December 31, 2017 and for the three months ended March 31, 2018 and 2017 is as follows:

 
 As of
March 31,
 As of
December 31,
 
 
 2018 2017 
 
 (dollars in thousands)
 

Cash

 $ $ 

Accounts receivable—HMS Income

  2,838  2,863 

Total assets

 $2,838 $2,863 

Accounts payable to MSCC and its subsidiaries

 $2,265 $1,963 

Dividend payable to MSCC and its subsidiaries

  573  900 

Equity

     

Total liabilities and equity

 $2,838 $2,863 


 
 Three Months
Ended March 31,
 
 
 2018 2017 

Management fee income

 $2,816 $2,620 

Expenses allocated from MSCC or its subsidiaries:

       

Salaries, share-based compensation and other personnel costs

  (1,353) (919)

Other G&A expenses

  (713) (605)

Total allocated expenses

  (2,066) (1,524)

Pre-tax income

  750  1,096 

Tax expense

  (177) (402)

Net income

 $573 $694 

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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE D—EXTERNAL INVESTMENT MANAGER (Continued)

        Summarized financial information from the separate financial statements of the External Investment Manager as of March 31, 2017 and December 31, 2016 and for the three months ended March 31, 2017 and 2016 is as follows:

 
 As of
March 31,
 As of
December 31,
 
 
 2017 2016 
 
 (dollars in thousands)
 

Cash

 $ $ 

Accounts receivable—HMS Income

  2,588  2,496 

Total assets

 $2,588 $2,496 

Accounts payable to MSCC and its subsidiaries

 $1,350 $1,635 

Dividend payable to MSCC

  694  719 

Taxes payable

  544  142 

Equity

     

Total liabilities and equity

 $2,588 $2,496 


 
 Three Months
Ended
March 31,
 
 
 2017 2016 

Management fee income

 $2,620 $2,251 

Expenses allocated from MSCC or its subsidiaries:

       

Salaries, share-based compensation and other personnel costs

  (919) (728)

Other G&A expenses

  (605) (426)

Total allocated expenses

  (1,524) (1,154)

Pre-tax income

  1,096  1,097 

Tax expense

  
(402

)
 
(399

)

Net income

 $694 $698 

NOTE E—SBIC DEBENTURES

        Due to each of the Funds' status as a licensedUnder existing SBIC Main Street hasregulations, SBA approved SBICs under common control have the ability to issue through the Funds, debentures guaranteed by the SBA up to a regulatory maximum amount of $350.0 million. Main Street, through the funds, has an effective maximum amount of $346.0 million through its threefollowing the prepayment of $4.0 million of existing SBIC licenses.debentures as discussed below. SBIC debentures payable were $240.2$313.8 million and $240.0$295.8 million at March 31, 20172018 and December 31, 2016,2017, respectively. SBIC debentures provide for interest to be paid semiannually, with principal due at the applicable 10-year maturity date of each debenture. During the three months ended March 31, 2017,2018, Main Street issued $25.4$22.0 million of SBIC debentures and opportunistically prepaid $25.2$4.0 million of existing SBIC debentures as part of an effort to manage the maturity dates of the oldest SBIC debentures, leaving $109.8$32.2 million of additionalremaining capacity under Main Street's SBIC licenses as of March 31, 2017.licenses. As a result of this prepayment, Main Street recognized a realized loss of $5.2$1.4 million due to the previously recognized gain recorded as a result of recording the


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE E—SBIC DEBENTURES (Continued)

MSC II debentures at fair value on the date of the acquisition of the majority interests of MSC II. The effect of the realized loss is offset by the reversal of all previously recognized unrealized depreciation due to fair value adjustments since the date of the acquisition. Main Street expects to issue new SBIC debentures under the SBIC program in the future in an amount up to the regulatory maximum amount of $350.0 million for affiliated SBIC funds. The weighted-average annual interest rate on the SBIC debentures was 3.8%3.7% and 4.1%3.6% as of March 31, 20172018 and December 31, 2016,2017, respectively. The first principal maturity due under the existing SBIC debentures is in 2019, and the weighted-average remaining duration as of March 31, 20172018 was approximately 5.75.9 years. For each of the three months ended March 31, 20172018 and 2016,2017, Main Street recognized interest expense attributable to the SBIC debentures of $2.9 million and $2.5 million.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.

        As of March 31, 2017,2018, the recorded value of the SBIC debentures was $239.4$306.2 million which consisted of (i) $49.2$44.6 million recorded at fair value, or $0.8$1.4 million less than the $50.0$46.0 million par value of the SBIC debentures issued in MSC II, (ii) $149.8 million recorded at par value andof SBIC debentures outstanding held in MSMF, with a recorded value of $147.6 million that was net of unamortized debt issuance costs of $2.2 million and (iii) $40.4$118.0 million recorded at par value andof SBIC debentures held in MSC III.III with a recorded value of $113.9 million that was net of unamortized debt issuance costs of $4.1 million. As of March 31, 2017,2018, 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 $228.4$281.6 million, or $11.8$32.2 million less than the $240.2$313.8 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$585.0 million from a diversified group of fourteen lenders andfifteen lenders. The Credit Facility matures in September 2021. The Credit Facility also2021 and 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 (0.98%(1.88% as of March 31, 2017)2018) plus


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(i) 1.875% (or the applicable base rate (Prime Rate of 4.00%4.75% as of March 31, 2017)2018) 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 2021, and


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE F—CREDIT FACILITY (Continued)

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 March 31, 2017,2018, Main Street had $288.0$188.0 million in borrowings outstanding under the Credit Facility. As of March 31, 2017,2018, 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 loanissuance costs, of $2.5$1.5 million and $2.1$2.5 million, respectively, for the three months ended March 31, 20172018 and 2016.2017. As of March 31, 2017,2018, the interest rate on the Credit Facility was 2.7%3.5%. The average interest rate for the three months ended March 31, 20172018 was 2.7%3.5%. As of March 31, 2017,2018, 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. On March 1, 2018, Main Street announced its intent to redeem the 6.125% Notes on 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 maymaintained the right from time to time repurchase the 6.125% Notes in accordance with the 1940 Act and the rules promulgated thereunder. As of March 31, 2017,2018, the outstanding balance of the 6.125% Notes was $90.7 million and the recorded value of $89.1 million was net of unamortized debt issuance costs of $1.5 million. As of March 31, 2017,


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

2018, 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 $94.3$91.5 million. Main Street recognized interest expense related to the 6.125% Notes, including amortization of unamortized deferred loanissuance costs, of $1.5 million for each of the three months ended March 31, 20172018 and 2016.2017.

        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 March 31, 2017,2018, Main Street was in compliance with these covenants.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE G—NOTES (Continued)

        In November 2014, Main Street issued $175.0 million in aggregate principal amount of 4.50% unsecured notes due 2019 (the "4.50% Notes"Notes due 2019") at an issue price of 99.53%. The 4.50% Notes due 2019 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;Notes due 2019; 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 4.50% Notes due 2019 mature on December 1, 2019, and may be redeemed in whole or in part at any time at Main Street's option subject to certain make-whole provisions. The 4.50% Notes due 2019 bear interest at a rate of 4.50% per year payable semiannually on June 1 and December 1 of each year. The total net proceeds from the 4.50% Notes due 2019, 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 due 2019 in accordance with the 1940 Act and the rules promulgated thereunder. As of March 31, 2017,2018, the outstanding balance of the 4.50% Notes due 2019 was $175.0 million and the recorded value of $173.8 million was net of unamortized debt issuance costs of $1.2 million. As of March 31, 2017,2018, if Main Street had adopted the fair value option under ASC 825 for the 4.50% Notes due 2019, Main Street estimates its fair value would be approximately $176.1$176.6 million. Main Street recognized interest expense related to the 4.50% Notes due 2019, including amortization of unamortized deferred loanissuance costs, of $2.1 million for each of the three months ended March 31, 20172018 and 2016.2017.

        The indenture governing the 4.50% Notes due 2019 (the "4.50% Notes due 2019 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 due 2019 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 due 2019 Indenture. As of March 31, 2018, Main Street was in compliance with these covenants.


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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

        In November 2017, Main Street issued $185.0 million in aggregate principal amount of 4.50% unsecured notes due 2022 (the "4.50% Notes due 2022") at an issue price of 99.16%. The 4.50% Notes due 2022 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 due 2022; 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 4.50% Notes due 2022 mature on December 1, 2022, and may be redeemed in whole or in part at any time at Main Street's option subject to certain make-whole provisions. The 4.50% Notes due 2022 bear interest at a rate of 4.50% per year payable semiannually on June 1 and December 1 of each year. The total net proceeds from the 4.50% Notes due 2022, resulting from the issue price and after underwriting discounts and estimated offering expenses payable, were approximately $182.2 million. Main Street may from time to time repurchase the 4.50% Notes due 2022 in accordance with the 1940 Act and the rules promulgated thereunder. As of March 31, 2018, the outstanding balance of the 4.50% Notes due 2022 was $185.0 million and the recorded value of $182.2 million was net of unamortized debt issuance costs of $2.8 million. As of March 31, 2018, if Main Street had adopted the fair value option under ASC 825 for the 4.50% Notes due 2022, Main Street estimates its fair value would be approximately $184.1 million. Main Street recognized interest expense related to the 4.50% Notes due 2022, including amortization of unamortized deferred issuance costs, of $2.2 million for the three months ended March 31, 2018.

        The indenture governing the 4.50% Notes due 2022 (the "4.50% Notes due 2022 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 due 2022 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 due 2022 Indenture. As of March 31, 2018, 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


 Three Months Ended
March 31,
  Three Months
Ended March 31,
 

 2017 2016  2018 2017 

Per Share Data:

          

NAV at the beginning of the period

 $22.10 $21.24  $23.53 $22.10 

Net investment income(1)

 0.57 0.54  0.63 0.57 

Net realized gain (loss)(1)(2)

 0.41 0.27 

Net change in net unrealized depreciation(1)(2)

 (0.30) (0.52)

Net realized gain(1)(2)

 0.10 0.41 

Net unrealized depreciation(1)(2)

 (0.16) (0.30)

Income tax benefit (provision)(1)(2)

 (0.11) 0.04  0.02 (0.11)

Net increase in net assets resulting from operations(1)

 0.57 0.33  0.59 0.57 

Dividends paid from net investment income

 (0.21) (0.54) (0.57) (0.21)

Distributions from capital gains

 (0.35)    (0.35)

Total dividends paid

 (0.56) (0.54) (0.57) (0.56)

Accretive effect of stock offerings (issuing shares above NAV per share)

 0.26 0.06  0.07 0.26 

Accretive effect of DRIP issuance (issuing shares above NAV per share)

 0.01 0.02  0.01 0.01 

Other(3)

 0.06 0.07  0.04 0.06 

NAV at the end of the period

 $22.44 $21.18  $23.67 $22.44 

Market value at the end of the period

 $38.27 $31.35  $36.90 $38.27 

Shares outstanding at the end of the period

 55,423,375 50,846,000  59,007,730 55,423,375 

(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

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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE H—FINANCIAL HIGHLIGHTS (Continued)


 Three Months Ended
March 31,
  Three Months
Ended March 31,
 

 2017 2016  2018 2017 

 (dollars in thousands)
  (dollars in thousands)
 

NAV at end of period

 $1,243,934 $1,076,998  $1,396,600 $1,243,934 

Average NAV

 $1,222,708 $1,073,946  $1,388,484 $1,222,708 

Average outstanding debt

 $825,155 $772,183  $871,205 $825,155 

Ratio of total expenses, including income tax expense, to average NAV(1)(2)

 1.83% 1.17%  1.30% 1.83% 

Ratio of operating expenses to average NAV(2)(3)

 1.37% 1.38%  1.37% 1.37% 

Ratio of operating expenses, excluding interest expense, to average NAV(2)(3)

 0.66% 0.62%  0.63% 0.66% 

Ratio of net investment income to average NAV(2)

 2.55% 2.53%  2.66% 2.55% 

Portfolio turnover ratio(2)

 8.97% 5.03%  7.11% 8.97% 

Total investment return(2)(4)

 5.64% 9.85%  –5.70% 5.64% 

Total return based on change in NAV(2)(5)

 2.62% 1.57%  2.50% 2.62% 

(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 the 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)
Unless otherwise noted, 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 is based on the 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 is 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. Non-operating changes include any items that affect net asset value other than the net increase in net assets resulting from operations, such as the effects of stock offerings, shares issued under the DRIP and equity incentive plans and other miscellaneous items.

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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE I—DIVIDENDS, DISTRIBUTIONS AND TAXABLE INCOME

        Main Street paid regular monthly dividends of $0.185$0.19 per share for each month of January through March 2017,2018, totaling $33.5 million, or $0.57 per share, for the three months ended March 31, 2018. The first quarter 2018 regular monthly dividends represent a 2.7% increase from the regular monthly dividends paid for the first quarter of 2017. The regular monthly dividends equaled a total of approximately $30.4 million, or $0.555 per share, for the three months ended March 31, 2017. The first quarter 2017 regular monthly dividends represent a 2.8% increase from the regular monthly dividends paid per share for the first quarter of 2016. For the three months ended March 31, 2016, Main Street paid total regular monthly dividends of $27.2 million, or $0.540 per share.

        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 taxable 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)

NOTE I—DIVIDENDS, DISTRIBUTIONS AND TAXABLE INCOME (Continued)

        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 three months ended March 31, 20172018 and 2016.2017.


 Three Months Ended
March 31,
  Three Months Ended
March 31,
 

 2017 2016  2018 2017 

 (estimated, dollars in
thousands)

  (estimated, dollars
in thousands)

 

Net increase in net assets resulting from operations

 $31,450 $16,812  $34,517 $31,450 

Book tax difference from share-based compensation expense

 1,265 1,589  1,819 1,265 

Net change in net unrealized depreciation

 16,426 26,218 

Net unrealized depreciation

 9,523 16,426 

Income tax provision (benefit)

 5,638 (2,263) (979) 5,638 

Pre-tax book (income) loss not consolidated for tax purposes

 (6,468) (12,365)

Book income and tax income differences, including debt origination, structuring fees, dividends, realized gains (losses) and changes in estimates

 4,373 (561)

Pre-tax book income not consolidated for tax purposes

 (13,350) (6,468)

Book income and tax income differences, including debt origination, structuring fees, dividends, realized gains and changes in estimates

 12,367 4,373 

Estimated taxable income(1)

 52,684 29,430  43,897 52,684 

Taxable income earned in prior year and carried forward for distribution in current year

 42,362 29,683  42,357 42,362 

Taxable income earned prior to period end and carried forward for distribution next period

 (74,695) (40,942) (63,938) (74,695)

Dividend payable as of period end and paid in the following period

 10,252 9,113  11,191 10,252 

Total distributions accrued or paid to common stockholders

 $30,603 $27,284  $33,507 $30,603 

(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 primarily 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""source-of-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. ThisThe Taxable Subsidiaries are each taxed at their normal corporate tax rates based on their taxable income. The income tax expense, or benefit, if any, and the related tax assets and liabilities, of the Taxable Subsidiaries are reflected in Main Street's consolidated financial statements.


Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE I—DIVIDENDS, DISTRIBUTIONS AND TAXABLE INCOME (Continued)

        The        For the three months ended March 31, 2018, Main Street recognized a net income tax expense, or benefit andof $1.0 million, principally consisting of a deferred tax benefit of $1.9 million, which is primarily the related tax assets and liabilities generated byresult of the net activity relating to the portfolio investments held in the Taxable Subsidiaries, if any, are reflectedincluding changes in the loss carryforwards, changes in net unrealized appreciation or depreciation and other temporary book-tax differences, and a $0.9 million current tax expense, which is primarily related to a $0.4 million accrual for excise tax on Main Street's consolidated statement of operations.estimated undistributed taxable income and $0.5 million provision for current U.S. federal income and state taxes. For the three months ended March 31, 2017, Main Street recognized a net income tax provision of $5.6 million, principally consisting of a deferred tax provision of $4.4 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 unrealized appreciation or depreciation and other temporary book-tax differences, as well asand a $1.3 million current tax expense, which is primarily related to a $0.9 million accrual for excise tax on Main Street's estimated undistributed taxable income, and $0.4 million provision for current U.S. federal income and state taxes. The income tax expense, or benefit, and the related tax assets and liabilities, generated by the Taxable Subsidiaries, if any, are reflected in Main Street's consolidated financial statements. For the three months ended March 31, 2016, Main Street recognized a net income tax benefit of $2.3 million, principally consisting of a deferred tax benefit of $2.6 million which is 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 other temporary book-tax differences, partially offset by a $0.4 million provision for other current taxes which is primarily related to a $0.3 million provision for current U.S. federal income and state taxes, and a $0.1 million accrual for excise tax on Main Street's estimated spillover taxable income.

        The net deferred tax assetliability at March 31, 2017 and2018 was $8.7 million compared to $10.6 million at December 31, 2016 was $4.7 million and $9.1 million, respectively,2017, primarily related to loss carryforwards, timing differences in net unrealized appreciation or depreciation and other temporary book-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 toThe net deferred tax assets for previously unrecognized excessliability as of December 31, 2017 equal to $10.6 million reflects a reduction of $2.8 million resulting from the decrease in the U.S. federal corporate income tax benefits associated with share-based compensation duerate from 35% to 21% as enacted by the early adoption of the new accounting standard ASU 2016-09Tax Cuts and Jobs Act (See further discussion in Note B.7.B.9.). During the quarter ended March 31, 2017, the Taxable Subsidiaries utilized capital loss carryforwards totaling approximately $8.0 million. As of March 31, 2017, for U.S. federal income tax purposes, the Taxable Subsidiaries had a capital loss carryforward of $6.6 million which, if unused, will expire in taxable year 2021. At March 31, 2017,2018, for U.S. federal income tax purposes, the Taxable Subsidiaries had a net operating loss carryforward from prior years which, if unused, will expire in various taxable years from 2029 through 2037. Under the Tax Cuts and Jobs Act, any net operating losses generated in 2018 and future periods will have an indefinite carryforward. The timing and manner in which Main Street will utilize any loss carryforwards in any year, or in total,generated before December 31, 2017 may be limited in the future under the provisions of the Code.

NOTE J—COMMON STOCK

        During November 2015, Main Street commencedmaintains a program with certain selling agents through which it can sell shares of its common stock by means of at-the-market offerings from time to time (the "ATM Program"). During the three months ended March 31, 2017,2018, Main Street sold 1,035,286308,678 shares of its common stock at a weighted-average price of $36.86$37.27 per share and raised $38.2$11.5 million of gross proceeds under the ATM Program. Net proceeds were $37.7$11.3 million after commissions to the selling agents on shares sold and offering costs. As of March 31, 2017, 499,500 shares were available for sale under the ATM Program.


Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE J—COMMON STOCK (Continued)

        During the year ended December 31, 2016, Main Street sold 3,324,646 shares of our common stock at a weighted-average price of $34.17 per share and raised $113.6 million of gross proceeds under the ATM Program. Net proceeds were $112.0 million after commissions to the selling agents on shares sold and offering costs. As of December 31, 2016,2018, sales transactions representing 42,41320,400 shares had not settled and wereare not included in shares issued and outstanding on the face of the consolidated balance sheet, but wereare included in the weighted-average shares outstanding in the consolidated statement of operations and in the shares used to calculate net asset value per share. As of March 31, 2018, there were 1,602,678 shares available for sale under the ATM Program.

        During the year ended December 31, 2017, Main Street sold 3,944,972 shares of its common stock at a weighted-average price of $38.72 per share and raised $152.8 million of gross proceeds under the ATM Program. Net proceeds were $150.9 million after commissions to the selling agents on shares sold and offering costs. As of December 31, 2017, 1,911,356 shares remained available for sale under the ATM Program.


Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

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 three months ended March 31, 2018, $1.6 million of the total $33.5 million in dividends paid to stockholders represented DRIP participation. During this period, the DRIP participation requirements were satisfied with the issuance of 42,423 newly issued shares. For the three months ended March 31, 2017, $1.8 million of the total $30.4 million in dividends paid to stockholders represented DRIP participation. During this period, the DRIP participation requirements were satisfied with the issuance of 48,675 newly issued shares. For the three months ended March 31, 2016, $3.3 million of the total $27.2 million in dividends paid to stockholders represented DRIP participation. During this period, the DRIP participation requirements were satisfied with the issuance of 113,631 newly issued shares. The shares disclosed above relate only to Main Street's DRIP and exclude any activity related to broker-managed dividend reinvestment plans.

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


Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE L—SHARE-BASED COMPENSATION (Continued)

Equity and Incentive Plan, net of shares forfeited, if any, and the remaining shares of restricted stock available for issuance as of March 31, 2017.2018.

Restricted stock authorized under the plan

  3,000,000 

Less net restricted stock granted net of forfeited shares, during:

    

Year ended December 31, 2015

  (900)

Year ended December 31, 2016

  (260,514)

Three monthsYear ended MarchDecember 31, 2017

  2,771(223,812)

Restricted stock available for issuance as of March 31, 20172018

  2,741,3572,514,774 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

        As of March 31, 2017,2018, the following table summarizes the restricted stock issued to Main Street's non-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)

Year ended December 31, 2016

  (6,748)

Year ended December 31, 2017

(5,948)

Restricted stock available for issuance as of March 31, 20172018

  286,446280,498 

        For each of the three months ended March 31, 20172018 and 2016,2017, Main Street recognized total share-based compensation expense of $2.3 million, and $1.6 million, respectively, related to the restricted stock issued to Main Street employees and non-employee directors.

        As of March 31, 2017,2018, there was $9.7$8.5 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 1.51.6 years as of March 31, 2017.2018.


Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE M—COMMITMENTS AND CONTINGENCIES

        At March 31, 2017,2018, Main Street had the following outstanding commitments (in thousands):

Investments with equity capital commitments that have not yet funded:
 Amount 

Congruent Credit Opportunities Funds

    

Congruent Credit Opportunities Fund II, LP

 $8,488 

Congruent Credit Opportunities Fund III, LP

  12,131 

 $20,619 

Encap Energy Fund Investments

  
 
 

EnCap Energy Capital Fund VIII, L.P. 

 $510 

EnCap Energy Capital Fund VIII Co-Investors, L.P. 

  27 

EnCap Energy Capital Fund IX, L.P. 

  1,093 

EnCap Energy Capital Fund X, L.P. 

  6,789 

EnCap Flatrock Midstream Fund II, L.P. 

  5,502 

EnCap Flatrock Midstream Fund III, L.P. 

  4,785 

 $18,706 

Freeport Fund Investments

  
 
 

Freeport First Lien Loan Fund III LP

 $6,539 

Freeport Financial SBIC Fund LP

  1,375 

 $7,914 

Brightwood Capital Fund Investments

  
 
 

Brightwood Capital Fund III, LP

 $3,000 

Brightwood Capital Fund IV, LP

  4,500 

 $7,500 

I-45 SLF LLC

 
$

1,800
 

EIG Fund Investments

 
$

3,595
 

LKCM Headwater Investments I, L.P. 

 
$

2,500
 

Dos Rios Partners

  
 
 

Dos Rios Partners, LP

 $1,594 

Dos Rios Partners - A, LP

  506 

 $2,100 

Total equity commitments

 $64,734 

Amount

Investments with equity capital commitments that have not yet funded:

Congruent Credit Opportunities Funds

Congruent Credit Opportunities Fund II, LP

$8,488

Congruent Credit Opportunities Fund III, LP

12,131

$20,619

Encap Energy Fund Investments


EnCap Energy Capital Fund VIII, L.P. 

$469

EnCap Energy Capital Fund IX, L.P. 

556

EnCap Energy Capital Fund X, L.P. 

3,254

EnCap Flatrock Midstream Fund II, L.P. 

6,470

EnCap Flatrock Midstream Fund III, L.P. 

4,516

$15,265

Brightwood Capital Fund Investments


Brightwood Capital Fund III, LP

$3,000

Brightwood Capital Fund IV, LP

4,000

$7,000

Freeport Fund Investments


Freeport First Lien Loan Fund III LP

$3,942

Freeport Financial SBIC Fund LP

1,375

$5,317

EIG Fund Investments


$

4,649

Harris Preston Fund Investments


HPEP 3, L.P. 

$3,967

LKCM Headwater Investments I, L.P. 


$

2,931

Copper Trail Energy Fund I, LP


$

2,500

Dos Rios Partners


Dos Rios Partners, LP

$1,594

Dos Rios Partners—A, LP

506

$2,100

I-45 SLF LLC


$

800

Access Media Holdings, LLC


$

675

Total equity commitments

$65,823

Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE M—COMMITMENTS AND CONTINGENCIES (Continued)


 Amount 
Investments with commitments to fund revolving loans that have not been fully drawn or
term loans with additional commitments not yet funded:
  
    

NNE Partners, LLC

 $10,208 

California Splendor Holdings LLC

 
$

8,270
 

Resolute Industrial, LLC

 5,750 

Hunter Defense Technologies, Inc.

 5,168 

Radiology Partners, Inc.

 5,254 

NexRev LLC

 4,000 

PT Network, LLC

 8,775  3,618 

Hojeij Branded Foods, LLC

 3,422 

Arcus Hunting LLC

 4,336  3,132 

CDHA Management, LLC

 3,523  2,343 

Charps, LLC

 3,200 

Strike, LLC

 2,500 

Mid-Columbia Lumber Products, LLC

 2,000 

Hojeij Branded Foods, LLC

 1,643 

CapFusion, LLC

 1,600 

Wireless Vision Holdings, LLC

 2,068 

NNE Partners, LLC

 2,042 

Barfly Ventures, LLC

 1,838 

Felix Investments Holdings II

 1,667 

Hawk Ridge Systems, LLC

 1,600  1,600 

Subsea Global Solutions, LLC

 1,428 

Meisler Operating LLC

 1,600 

Market Force Information, LLC

 1,600 

Chamberlin Holding LLC

 1,600 

Direct Marketing Solutions, Inc.

 1,600 

Aethon United BR LP

 1,563 

IDX Broker, LLC

 1,500 

Lamb Ventures, LLC

 1,500 

Messenger, LLC

 1,417  1,417 

LaMi Products, LLC

 1,397 

TGP Holdings III LLC

 1,255 

Gamber-Johnson Holdings, LLC

 1,200  1,200 

NuStep, LLC

 1,200  1,200 

Barfly Ventures, LLC

 919 

Apex Linen Service, Inc.

 800 

Mystic Logistics Holdings, LLC

 800 

Grace Hill, LLC

 776 

Lamb Ventures, LLC

 695 

Pardus Oil and Gas, LLC

 663 

Boccella Precast Products LLC

 1,142 

KBK Industries, LLC

 925 

CTVSH, PLLC

 800 

NRI Clinical Research, LLC

 600  600 

Jackmont Hospitality, Inc.

 593 

ATS Workholding, LLC

 523 

PPC/SHIFT LLC

 500  500 

UniTek Global Services, Inc.

 483 

Clad-Rex Steel, LLC

 400 

Gulf Publishing Holdings, LLC

 400 

Jensen Jewelers of Idaho, LLC

 500  350 

UniTek Global Services, Inc.

 483 

Permian Holdco 2, Inc.

 116 

OnAsset Intelligence, Inc.

 225 

BigName Commerce, LLC

 101 

BBB Tank Services, LLC

 80 

Total loan commitments

 $53,472  $72,736 

Total commitments

 $118,206  $138,559 

Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

        Main Street will fund its unfunded commitments from the same sources it uses to fund its investment commitments that are funded at the time they are made (which are typically through existing cash and cash equivalents and borrowings under the Credit Facility). Main Street follows a process to manage its liquidity and ensure that it has available capital to fund its unfunded commitments as necessary. The Company had total unrealized depreciation of $0.1 million on the outstanding unfunded commitments as of March 31, 2017.2018.

        Main Street has an operating lease for its office space in Houston, Texas.space. Total rent expense incurred by Main Street for each of the three months ended March 31, 2018 and 2017 was $0.2 million and 2016 was $0.1 million.


Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE M—COMMITMENTS AND CONTINGENCIES (Continued)million, respectively.

        The following table shows future minimum payments under Main Street's operating lease as of March 31, 2017:2018:

For the Years Ended December 31,
 Amount  Amount 

2017

 $46 

2018

 683  $346 

2019

 749  749 

2020

 763  763 

2021

 777  777 

2022

 791 

Thereafter

 4,959  4,239 

Total

 $7,977  $7,665 

        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.

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 March 31, 2017,2018, Main Street had a receivable of approximately $2.0$2.8 million due from the External Investment Manager which included (i) approximately $1.3$2.3 million related primarily to operating expenses incurred by MSCC or its subsidiaries as required to support the External Investment Manager's business and amounts due from the External Investment Manager to Main Street under a tax sharing agreement (see further discussion in Note D) and (ii) approximately $0.7$0.6 million of dividends declared but not paid by the External Investment Manager.

        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


Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

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 March 31, 2017, $2.82018, $4.8 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$2.5 million was deferred into phantom Main Street stock units, representing 55,93874,503 shares of Main Street's common stock. Including phantom stock units issued through dividend reinvestment, the phantom stock units outstanding as of


Table of Contents


MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE N—RELATED PARTY TRANSACTIONS (Continued)

March 31, 20172018 represented 65,88290,411 shares of Main Street's common stock. Any amounts deferred under the plan represented by phantom Main Street stock units will not be issued or included as outstanding on the consolidated statementstatements 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 in Main Street's consolidated statementstatements of operations as earned.

NOTE O—SUBSEQUENT EVENTS

        In April 2018, Main Street made a new portfolio investment to facilitate the minority recapitalization of DPI, Inc. ("DPI"), a leading designer, developer, and distributor of a broad assortment of consumer electronics to national retailers under several proprietary brands. Main Street, along with a co-investor, partnered with DPI's management team to facilitate the transaction, with Main Street funding $35.2 million in a combination of first-lien, senior secured term debt and a direct equity investment. Headquartered in St. Louis, Missouri, DPI offers consumer electronics products designed for value-conscious consumers.

        In April 2018, Main Street redeemed the entire principal amount of the issued and outstanding 6.125% Notes effective April 1, 2018 (the "Redemption Date"). The 6.125% Notes were redeemed at par value, plus the accrued and unpaid interest thereon from January 1, 2018, through, but excluding, the Redemption Date. As part of the redemption, Main Street recognized a realized loss of $1.5 million in the second quarter related to the write-off of any remaining unamortized deferred financing costs.

During April 2017,2018, Main Street declared a semi-annual supplemental cash dividend of $0.275 per share payable in June 2017.2018. This supplemental cash dividend is in addition to the previously announced regular monthly cash dividends that Main Street declared for the second quarter of 20172018 of $0.185$0.19 per share for each of April, May and June 2017.2018.

        InDuring May 2017,2018, Main Street declared regular monthly dividends of $0.185$0.19 per share for each month of July, August and September of 2017.2018. These regular monthly dividends equal a total of $0.555$0.57 per share for the third quarter of 20172018 and represent a 2.8%2.7% increase from the regular monthly dividends declared for the third quarter of 2016.2017. Including the semi-annual supplemental dividend declared for June 20172018 and the regular monthly dividends declared for the second and third quarters of 2017,2018, Main Street will have paid $20.545$23.375 per share in cumulative dividends since its October 2007 initial public offering.


Table of Contents


Schedule 12-14

Schedule 12-14

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments in and Advances to Affiliates
Three Months Ended March 31, 20172018
(dollars in thousands)
(unaudited)

Company
 
Investment(1)
 Amount of
Interest,
Fees or
Dividends
Credited to
Income(2)
 December 31,
2016 Fair
Value
 Gross
Additions(3)
 Gross
Reductions(4)
 March 31,
2017 Fair
Value
  
Investment(1)(5)
 Amount of
Realized
Gain/(Loss)
 Amount of
Unrealized
Gain/(Loss)
 Amount of
Interest,
Fees or
Dividends
Credited to
Income(2)
 December 31,
2017
Fair Value
 Gross
Additions(3)
 Gross
Reductions(4)
 March 31,
2018
Fair Value
 

Majority-owned investments

                          

Café Brazil, LLC

 

Member Units

 
$

52
 
$

6,040
 
$

 
$

140
 
$

5,900
  

Member Units

 
$

 
$

 
$

87
 
$

4,900
 
$

 
$

 
$

4,900
 

California Splendor Holdings LLC

 LIBOR Plus 8.00% (Floor 1.00%)   122  3,610  3,610 

 LIBOR Plus 10.00% (Floor 1.00%)   303  27,723  27,723 

 Preferred Member Units     12,500  12,500 

Clad-Rex Steel, LLC

 LIBOR Plus 9.50% (Floor 1.00%) 11 396 1  397  LIBOR Plus 9.50% (Floor 1.00)  (6) 375 13,280 6 6 13,280 

 LIBOR Plus 9.50% (Floor 1.00%) 375 13,941 5  13,946 

 Member Units  7,280   7,280  Member Units  280 94 9,500 280  9,780 

 10% Secured Debt 30 1,190  4 1,186  10% Secured Debt   30 1,183  5 1,178 

 Member Units  210   210  Member Units    280   280 

CMS Minerals Investments

 Preferred Member Units 51 3,682  411 3,271  Member Units  139 9 2,392 139 146 2,385 

Direct Marketing Solutions, Inc.

 LIBOR Plus 11.00% (Floor 1.00%)   624  18,602 79 18,523 

 Member Units 63 3,381  261 3,120  Preferred Stock     8,400  8,400 

Gamber-Johnson Holdings, LLC

 LIBOR Plus 11.00% (Floor 1.00%) 735 23,846 234  24,080  LIBOR Plus 11.00% (Floor 1.00%)  (15) 744 23,400 15 505 22,910 

 Member Units 170 18,920 3,160  22,080  Member Units  3,160 292 23,370 3,160  26,530 

GRT Rubber Technologies LLC

 LIBOR Plus 9.00% (Floor 1.00%) 334 13,274 8 217 13,065  LIBOR Plus 9.00% (Floor 1.00%)  (7) 309 11,603 7 217 11,393 

 Member Units 127 20,310   20,310  Member Units  1,450 308 21,970 1,450  23,420 

Harborside Holdings, LLC

 Member Units   9,400  9,400  Member Units    9,400 100  9,500 

Harris Preston Fund Investments

 LP Interests    536   536 

Hydratec, Inc.

 Common Stock 480 15,640   15,640  Common Stock 7,922 (7,905) 332 15,000 160 15,160  

IDX Broker, LLC

 12.5% Secured Debt 344 10,950 7 307 10,650  11.5% Secured Debt  (12) 446 15,250 12 312 14,950 

 Member Units 68 7,040 1,160  8,200  Preferred Member Units  (110) 68 11,660  110 11,550 

Jensen Jewelers of Idaho, LLC

 Prime Plus 6.75% (Floor 2.00%) 108 4,055 4 154 3,905  Prime Plus 6.75% (Floor 2.00%)  (4) 50 3,955 4 154 3,805 

 Member Units 37 4,460   4,460  Member Units   113 5,100   5,100 

Lamb Ventures, LLC

 LIBOR Plus 5.75% 7  350 45 305  11% Secured Debt  (10) 267 9,942 210 1,813 8,339 

 11% Secured Debt 209 7,657  78 7,579  Preferred Equity    400   400 

 Preferred Equity  400   400 

 Member Units 40 5,990 200  6,190 

 9.5% Secured Debt 32 1,170 428 1,170 428 

 Member Units 407 1,340  380 960 

Lighting Unlimited, LLC

 8% Secured Debt 29 1,514  1,514  

 Preferred Equity  410 24 434   Member Units  (60)  6,790  60 6,730 

 Warrants   54 54   9.5% Secured Debt   10 432   432 

 Member Units   100 100   Member Units    520   520 

Mid-Columbia Lumber Products, LLC

 10% Secured Debt 44 1,750   1,750  10% Secured Debt   46 1,390 353  1,743 

 12% Secured Debt 117 3,900   3,900  12% Secured Debt   121 3,863 4  3,867 

 Member Units 2 2,480  500 1,980  Member Units   2 1,575 596  2,171 

 9.5% Secured Debt 20 836  11 825  9.5% Secured Debt   19 791  11 780 

 Member Units 9 600 620  1,220  Member Units   15 1,290   1,290 

MSC Adviser I, LLC

 Member Units 695 30,617 2,855  33,472  Member Units  6,954 573 41,768 6,954  48,722 

Mystic Logistics Holdings, LLC

 12% Secured Debt 286 9,176 11 23 9,164  12% Secured Debt   241 7,696 11 206 7,501 

 Common Stock  5,780 390  6,170  Common Stock  (770) 2 6,820  770 6,050 

NexRev LLC

 11% Secured Debt   387  17,268  17,268 

 Preferred Equity     6,880  6,880 

NRP Jones, LLC

 8% Current / 4% PIK Secured Debt 419 13,915 139  14,054  12% Secured Debt   191 6,376   6,376 

 Warrants  130   130 

 Member Units  410   410  Member Units  880  3,250 880  4,130 

PPL RVs, Inc.

 LIBOR Plus 7.00% (Floor 0.50%) 370 17,826 8  17,834  LIBOR Plus 7.00% (Floor 0.50%)  (7) 357 16,100 7 7 16,100 

 Common Stock 100 11,780   11,780  Common Stock  (780) 28 12,440  780 11,660 

Principle Environmental, LLC (d/b.a

 13% Secured Debt  (13) 256 7,477 13 13 7,477 

TruHorizon Environmental Solutions)

 Preferred Member Units  1,600 746 11,490 1,600  13,090 

 Warrants  130  650 130  780 

Quality Lease Service, LLC

 Zero Coupon Secured Debt    6,950   6,950 

 Member Units    4,938 425  5,363 

The MPI Group, LLC

 9% Secured Debt  (900) 66 2,410  900 1,510 

 Series A Preferred Units        

 Warrants        

 Member Units  90 11 2,389 91  2,480 

Uvalco Supply, LLC

 9% Secured Debt   5 348  164 184 

 Member Units   80 3,880   3,880 

Table of Contents

Company
 
Investment(1)
 Amount of
Interest,
Fees or
Dividends
Credited to
Income(2)
 December 31,
2016 Fair
Value
 Gross
Additions(3)
 Gross
Reductions(4)
 March 31,
2017 Fair
Value
  
Investment(1)(5)
 Amount of
Realized
Gain/(Loss)
 Amount of
Unrealized
Gain/(Loss)
 Amount of
Interest,
Fees or
Dividends
Credited to
Income(2)
 December 31,
2017
Fair Value
 Gross
Additions(3)
 Gross
Reductions(4)
 March 31,
2018
Fair Value
 

Principle Environmental, LLC

 12% Secured Debt 122 4,060   4,060 

 12% Current / 2% PIK Secured Debt 118 3,378 16  3,394 

 Preferred Member Units  5,370 953 63 6,260 

 Warrants  270 50  320 

Quality Lease Service, LLC

 8% PIK Secured Debt 136 7,068 136  7,204 

 Member Units  3,188 1,051  4,239 

The MPI Group, LLC

 9% Secured Debt 66 2,922   2,922 

 Series A Preferred Units      

 Warrants      

 Member Units 35 2,300 90  2,390 

Uvalco Supply, LLC

 9% Secured Debt 18 872  116 756 

 Member Units 8 4,640  333 4,307 

Vision Interests, Inc.

 13% Secured Debt 91 2,814   2,814  13% Secured Debt   95 2,797 4  2,801 

 Series A Preferred Stock  3,000   3,000  Series A Preferred Stock    3,000   3,000 

 Common Stock       Common Stock        

Ziegler's NYPD, LLC

 6.5% Secured Debt 17 994   994  6.5% Secured Debt   17 996 1  997 

 12% Secured Debt 9 300   300  12% Secured Debt   9 300   300 

 14% Secured Debt 96 2,750   2,750  14% Secured Debt   96 2,750   2,750 

 Warrants  240   240  Warrants        

 Preferred Member Units  4,100   4,100  Preferred Member Units    3,220 1  3,221 

Other controlled investments

                          

Access Media Holdings, LLC

 

5% Current / 5% PIK Secured Debt

 
563
 
19,700
 
282
 
512
 
19,470
  

10% PIK Secured Debt

 
 
(2,030

)
 
 
17,150
 
 
2,030
 
15,120
 

 Preferred Member Units  240 169 189 220  Preferred Member Units  (302)   302 302  

 Member Units       Member Units        

Ameritech College Operations, LLC

 10% Secured Debt 13 514   514 

 13% Secured Debt 16 489   489 

 13% Secured Debt 98 3,025   3,025 

ASC Interests, LLC

 11% Secured Debt  (160) 51 1,795 3 151 1,647 

 Preferred Member Units  2,291 3,900 3,381 2,810  Member Units    1,530  160 1,370 

ASC Interests, LLC

 11% Secured Debt 60 2,100 3 53 2,050 

ATS Workholding, LLC

 5% Secured Debt   75 3,249 486  3,735 

 Member Units  2,680 60  2,740  Preferred Member Units    3,726   3,726 

Bond-Coat, Inc.

 12% Secured Debt 357 11,596 9 9 11,596  12% Secured Debt   348 11,596   11,596 

 Common Stock  6,660 940  7,600  Common Stock    9,370   9,370 

Brewer Crane Holdings, LLC

 LIBOR Plus 10.00% (Floor 1.00%)   366  9,825  9,825 

 Preferred Member Units   30  4,280  4,280 

CBT Nuggets, LLC

 Member Units 1,000 55,480 5,140  60,620  Member Units  (22,219) 6,042 89,560  22,220 67,340 

Chamberlin Holding LLC

 LIBOR Plus 10.00% (Floor 1.00%)   577  21,389  21,389 

 Member Units     11,440  11,440 

Charps, LLC

 LIBOR Plus 7.00% (Floor 1.00%) 14  781  781  12% Secured Debt   550 18,225 22 1,601 16,646 

 12% Secured Debt 630  18,220  18,220  Preferred Member Units  540  650 540  1,190 

 Preferred Member Units   400  400 

Copper Trail Energy Fund I, LP

 LP Interests   33 2,500   2,500 

Datacom, LLC

 8% Secured Debt 20 900 180  1,080  8% Secured Debt   33 1,575 180  1,755 

 5.25% Current / 5.25% PIK Secured Debt 313 11,049 441  11,490  5.25% Current / 5.25% PIK Secured Debt   330 11,110 168 498 10,780 

 Class A Preferred Member Units  1,368 51  1,419  Class A Preferred Member Units  (510)  730  510 220 

 Class B Preferred Member Units  1,529 332  1,861  Class B Preferred Member Units  (498)      

Garreco, LLC

 LIBOR Plus 12.00% (Floor 1.00%) 189 5,219 975 225 5,969  LIBOR Plus 10.00% (Floor 1.00%)   162 5,443 5 121 5,327 

 Member Units  1,150 320  1,470  Member Units    1,940   1,940 

Gulf Manufacturing, LLC

 9% PIK Secured Debt 17 777   777  Member Units  770 414 10,060 770  10,830 

 Member Units 139 8,770 420  9,190 

Gulf Publishing Holdings, LLC

 12.5% Secured Debt 316 9,911 4  9,915  LIBOR Plus 9.50% (Floor 1.00%)   1 80  80  

 Member Units  3,124 336  3,460  12.5% Secured Debt   405 12,703 7 102 12,608 

 Member Units    4,840   4,840 

Harrison Hydra-Gen, Ltd.

 Common Stock  3,120  320 2,800  Common Stock  1,400  3,580 1,400  4,980 

Hawthorne Customs and Dispatch Services, LLC

 Member Units  280   280 

 Member Units 48 2,040   2,040 

HW Temps LLC

 LIBOR Plus 13.00% (Floor 1.00%) 368 10,500 4 600 9,904  LIBOR Plus 11.00% (Floor 1.00%)   320 9,918 4  9,922 

 Preferred Member Units 35 3,940   3,940  Preferred Member Units   35 3,940   3,940 

KBK Industries, LLC

 10% Secured Debt   7 375  300 75 

 12.5% Secured Debt  (3) 187 5,900 3 3 5,900 

 Member Units  320 153 4,420 320  4,740 

Marine Shelters Holdings, LLC

 12% PIK Secured Debt        

 Preferred Member Units        

Market Force Information, LLC

 LIBOR Plus 11.00% (Floor 1.00%)   757 23,143 13 480 22,676 

 Member Units   2 14,700   14,700 

MH Corbin Holding LLC

 10% Secured Debt   357 12,526  288 12,238 

 Preferred Member Units   35 6,000   6,000 

NAPCO Precast, LLC

 LIBOR Plus 8.50%  (6) 302 11,475 6 6 11,475 

 Member Units  510 293 11,670 510  12,180 

NRI Clinical Research, LLC

 LIBOR Plus 6.50% (Floor 1.50%)   9 400   400 

 14% Secured Debt  30 141 3,865   3,865 

 Warrants    500   500 

 Member Units    2,500   2,500 

NuStep, LLC

 12% Secured Debt   628 20,420 9  20,429 

 Preferred Member Units    10,200   10,200 

OMi Holdings, Inc.

 Common Stock  180 360 14,110 180  14,290 

Pegasus Research Group, LLC

 Member Units    10,310   10,310 

River Aggregates, LLC

 Zero Coupon Secured Debt   21 707 21  728 

 Member Units    4,610   4,610 

 Member Units  110  2,559 111  2,670 

Table of Contents

Company
 
Investment(1)
 Amount of
Interest,
Fees or
Dividends
Credited to
Income(2)
 December 31,
2016 Fair
Value
 Gross
Additions(3)
 Gross
Reductions(4)
 March 31,
2017 Fair
Value
  
Investment(1)(5)
 Amount of
Realized
Gain/(Loss)
 Amount of
Unrealized
Gain/(Loss)
 Amount of
Interest,
Fees or
Dividends
Credited to
Income(2)
 December 31,
2017
Fair Value
 Gross
Additions(3)
 Gross
Reductions(4)
 March 31,
2018
Fair Value
 

Indianapolis Aviation Partners, LLC

 15% Secured Debt 156 3,100   3,100 

 Warrants  2,649 61  2,710 

Marine Shelters Holdings, LLC

 12% PIK Secured Debt  9,387  9,387  

 Preferred Member Units   100 100  

MH Corbin Holding LLC

 10% Secured Debt 335 13,197 8 175 13,030 

 Preferred Member Units 35 6,000   6,000 

NAPCO Precast, LLC

 Prime Plus 2.00% (Floor 7.00%) 63 2,713 2 2 2,713 

 18% Secured Debt 181 3,952 3 3 3,952 

 Member Units 29 10,920   10,920 

NRI Clinical Research, LLC

 LIBOR Plus 6.50% (Floor 1.50%) 10 200 200  400 

 14% Secured Debt 160 4,261 11 11 4,261 

 Warrants  680   680 

 Member Units  2,462   2,462 

NuStep, LLC

 12% Secured Debt 728  20,394  20,394 

 Preferred Member Units   10,200  10,200 

OMi Holdings, Inc.

 Common Stock 192 13,080   13,080 

Pegasus Research Group, LLC

 Member Units 60 8,620  180 8,440 

River Aggregates, LLC

 Zero Coupon Secured Debt 19 627 19  646 

 Member Units  4,600   4,600 

 Member Units  2,510   2,510 

SoftTouch Medical Holdings LLC

 LIBOR Plus 9.00% (Floor 1.00%) 182 7,140 4 4 7,140  LIBOR Plus 9.00% (Floor 1.00%)  (30) 120 7,140 30 7,170  

 Member Units 155 9,170   9,170  Member Units 5,172 (5,160) 865 10,089 1,262 11,351  

Other

                          

Amounts related to investments transferred to or from other 1940 Act classification during the period

              

 $12,988 $594,282 $85,423 $21,466 $658,239 

Total Control investments

 $13,094 $(22,974)$21,955 $750,706 $164,882 $68,791 $846,797 

Affiliate Investments

                          

AFG Capital Group, LLC

 

Warrants

 
$

 
$

670
 
$

20
 
$

 
$

690
  

Warrants

 
$

 
$

40
 
$

 
$

860
 
$

40
 
$

 
$

900
 

 Member Units 7 2,750 100  2,850  Preferred Member Units  170 10 3,590 170  3,760 

Barfly Ventures, LLC

 12% Secured Debt 235 5,827 1,808  7,635  12% Secured Debt  (4) 267 8,715 4 4 8,715 

 Options  490   490  Options    920   920 

 Warrants  280   280  Warrants    520   520 

BBB Tank Services, LLC

 LIBOR Plus 9.50% (Floor 1.00%) 21 797   797  LIBOR Plus 8.00% (Floor 1.00%)   20 778 414 492 700 

 15% Secured Debt 152 3,991 1  3,992  15% Secured Debt   157 3,876 7  3,883 

 Member Units  800   800  Member Units  50  500 50  550 

Boccella Precast Products LLC

 LIBOR Plus 10.0% (Floor 1.00%)  (13) 496 16,400 1,213 1,031 16,582 

 Member Units  1,419 463 3,440 1,420  4,860 

Boss Industries, LLC

 Preferred Member Units 89 2,800 120  2,920  Preferred Member Units  770 90 3,930 810  4,740 

Bridge Capital Solutions Corporation

 13% Secured Debt 307 5,610 63  5,673  13% Secured Debt   347 5,884 78  5,962 

 Warrants  3,370   3,370  Warrants  500  3,520 500  4,020 

 13% Secured Debt 33 1,000   1,000  13% Secured Debt   33 1,000   1,000 

 Preferred Member Units 25 1,000   1,000  Preferred Member Units   33 1,000   1,000 

Buca C, LLC

 LIBOR Plus 7.25% (Floor 1.00%) 494 22,671 21 1,634 21,058  LIBOR Plus 9.25% (Floor 1.00%)   560 20,193 11 300 19,904 

 Preferred Member Units 57 4,660 58 728 3,990  Preferred Member Units   61 4,172 61  4,233 

CAI Software LLC

 12% Secured Debt 110 3,683 3 203 3,483  12% Secured Debt  (3) 125 4,083 3 3 4,083 

 Member Units 30 2,480 100  2,580  Member Units   10 3,230   3,230 

CapFusion, LLC

 13% Secured Debt 518 13,202 50  13,252 

 Warrants  1,200   1,200 

Chandler Signs Holdings, LLC

 12% Secured Debt 137 4,500 2 2 4,500  12% Secured Debt  (2) 137 4,500 2 2 4,500 

 Class A Units 63 3,240   3,240  Class A Units  (470)  2,650  470 2,180 

Charlotte Russe, Inc

 8.50% Secured Debt  (80) 113 7,807 16,658 16,553 7,912 

 Common Stock     3,141  3,141 

Condit Exhibits, LLC

 Member Units   66 1,950   1,950 

Congruent Credit Opportunities Funds

 LP Interests (Fund II)  (515)  1,515  1,035 480 

 LP Interests (Fund III)  122 361 18,632 122  18,754 

Dos Rios Partners

 LP Interests (Dos Rios Partners, LP)  81  7,165 81  7,246 

 LP Interests (Dos Rios Partners—A, LP)  293  1,889 293  2,182 

Dos Rios Stone Products LLC

 Class A Preferred Units  (440) 23 1,790  440 1,350 

East Teak Fine Hardwoods, Inc.

 Common Stock   4 630   630 

EIG Fund Investments

 LP Interests (EIG Global Private Debt fund-A, L.P.)    1,055 377 1,029 403 

Freeport Financial Funds

 LP Interests (Freeport Financial SBIC Fund LP)  (60) 102 5,614  60 5,554 

 LP Interests (Freeport First Lien Loan Fund III LP)   248 8,506   8,506 

Gault Financial, LLC (RMB

 8% Current Secured Debt   243 11,532   11,532 

Capital, LLC)

 Warrants        

Guerdon Modular Holdings, Inc.

 LIBOR Plus 8.50% (Floor 1.00%)   2  394  394 

 13% Secured Debt   363 10,632 294  10,926 

 Preferred Stock        

 Common Stock        

Harris Preston Fund Investments

 LP Interests $ $ $ $943 $90 $ $1,033 

Hawk Ridge Systems, LLC

 10.5% Secured Debt  (6) 389 14,300 6 6 14,300 

 Preferred Member Units  2,422 55 3,800 2,423  6,223 

 Preferred Member Units  128  200 128  328 

Houston Plating and Coatings, LLC

 8% Unsecured Convertible Debt   60 3,200   3,200 

 Member Units  520 48 6,140 520  6,660 

I-45 SLF LLC

 Member Units   705 16,841   16,841 

L.F. Manufacturing Holdings, LLC

 Member Units    2,000   2,000 

Meisler Operating LLC

 LIBOR Plus 8.50% (Floor 1.00%)   472 16,633 2,146  18,779 

 Member Units  525  3,390 2,180  5,570 

Table of Contents

Company
 
Investment(1)
 Amount of
Interest,
Fees or
Dividends
Credited to
Income(2)
 December 31,
2016 Fair
Value
 Gross
Additions(3)
 Gross
Reductions(4)
 March 31,
2017 Fair
Value
  
Investment(1)(5)
 Amount of
Realized
Gain/(Loss)
 Amount of
Unrealized
Gain/(Loss)
 Amount of
Interest,
Fees or
Dividends
Credited to
Income(2)
 December 31,
2017
Fair Value
 Gross
Additions(3)
 Gross
Reductions(4)
 March 31,
2018
Fair Value
 

Condit Exhibits, LLC

 Member Units 11 1,840   1,840 

Congruent Credit Opportunities Funds

 LP Interests (Fund II)  1,518  141 1,377 

 LP Interests (Fund III) 320 16,181 2,396  18,577 

Daseke, Inc.

 12% Current / 2.5% PIK Secured Debt 676 21,799 255 22,054  

 Common Stock  24,063  24,063  

Dos Rios Partners

 LP Interests (Dos Rios Partners, LP)  4,925 704  5,629 

 LP Interests (Dos Rios Partners—A, LP)  1,444 207  1,651 

Dos Rios Stone Products LLC

 Class A Units  2,070   2,070 

East Teak Fine Hardwoods, Inc.

 Common Stock 29 860  110 750 

East West Copolymer & Rubber, LLC

 12% Current / 2% PIK Secured Debt  8,630  6,390 2,240 

 Warrants      

EIG Fund Investments

 LP Interests (EIG Global Private Debt fund-A, L.P.) 45 2,804 352 1,690 1,466 

 LP Interests (EIG Traverse Co-Investment, L.P.) 263 9,905 68  9,973 

Freeport Financial Fund Investments

 LP Interests (Freeport Financial SBIC 102 5,620 55  5,675 

OnAsset Intelligence, Inc.

 12% PIK Secured Debt   153 5,094 153  5,247 

 Fund LP)            10% PIK Secured Debt   1 48 1  49 

 LP Interests (Freeport First Lien Loan 195 4,763 2,796 52 7,507  Preferred Stock        

 Fund III LP)            Warrants        

Gault Financial, LLC (RMB Capital, LLC)

 10.5% Secured Debt 326 11,079 1,017 146 11,950 

 Warrants      

OPI International Ltd.

 Common Stock        

Glowpoint, Inc.

 12% Secured Debt 274 3,997 9 996 3,010 

 Common Stock  2,080 190  2,270 

Guerdon Modular Holdings, Inc.

 13% Secured Debt 357 10,594 9  10,603 

PCI Holding Company, Inc.

 12% Current/3% PIK Secured Debt   685 12,593 304 326 12,571 

 Preferred Stock  1,140   1,140  Preferred Stock  (600)  890  600 290 

 Common Stock  80   80  Preferred Stock  870  2,610 870  3,480 

Hawk Ridge Systems, LLC

 10% Secured Debt 255 9,901 4  9,905 

Rocaceia, LLC (Quality Lease and Rental

 12% Secured Debt    250   250 

Holdings, LLC)

 Preferred Member Units        

Tin Roof Acquisition Company

 12% Secured Debt   393 12,722 17 224 12,515 

 Class C Preferred Stock   76 3,027 75  3,102 

UniTek Global Services, Inc.

 LIBOR Plus 8.50% (Floor 1.00%)  (1) 220 8,535 1 1 8,535 

 Preferred Member Units 150 2,850   2,850  LIBOR Plus 7.50% (Floor 1.00%)/1.00% PIK   4 137 1  138 

 Preferred Member Units  150   150  15% PIK Unsecured Debt   34 865 32  897 

Houston Plating and Coatings, LLC

 Member Units 1 4,000 230  4,230 

I-45 SLF LLC

 Member Units 691 14,586 1,321  15,907 

Indianhead Pipeline Services, LLC

 12% Secured Debt 727 5,079 563 225 5,417 

 Preferred Member Units 98 2,677 98  2,775  Preferred Stock  (8) 248 7,320 248 8 7,560 

 Warrants       Preferred Stock  (6) 136 2,850 136 6 2,980 

 Member Units       Common Stock  190  2,490 190  2,680 

KBK Industries, LLC

 10% Secured Debt 31 1,250 100 175 1,175 

Universal Wellhead Services

 Preferred Member Units  30  830 30  860 

Holdings, LLC

 Member Units  120  1,910 120  2,030 

Valley Healthcare Group, LLC

 LIBOR Plus 12.50% (Floor 0.50%)   419 11,685 6 120 11,571 

 Preferred Member Units  140  1,600 140  1,740 

Volusion, LLC

 11.5% Secured Debt   639 15,200 158  15,358 

 12.5% Secured Debt 188 5,889 3  5,892  Preferred Member Units    14,000   14,000 

 Member Units  2,780   2,780  Warrants  (610)  2,080  609 1,471 

L.F. Manufacturing Holdings, LLC

 Member Units  1,380   1,380 

Other

               

Amounts related to investments

               

transferred to or from other 1940 Act

               

classification during the period

  8,666  (7,807)    

OnAsset Intelligence, Inc.

 12% PIK Secured Debt 136 4,519 135  4,654 

 Preferred Stock      

 Warrants      

Total Affiliate investments

 $ $14,238 $9,071 $338,854 $36,118 $23,319 $359,460 

OPI International Ltd.

 10% Unsecured Debt 12 473   473 

 Common Stock  1,600  1,220 380 

PCI Holding Company, Inc.

 12% Secured Debt 400 13,000 10 10 13,000 

 Preferred Stock 172 5,370 170  5,540 

Table of Contents

Company
 
Investment(1)
 Amount of
Interest,
Fees or
Dividends
Credited to
Income(2)
 December 31,
2016 Fair
Value
 Gross
Additions(3)
 Gross
Reductions(4)
 March 31,
2017 Fair
Value
 

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

 12% Secured Debt    250      250 

 Preferred Member Units           

Tin Roof Acquisition Company

 12% Secured Debt  417  13,385  16  169  13,232 

 Class C Preferred Stock  68  2,738  69    2,807 

UniTek Global Services, Inc.

 LIBOR Plus 7.50% (Floor 1.00%)  113  5,021  1  1  5,021 

 LIBOR Plus 8.50% (Floor 1.00%)  22  824  2    826 

 15% PIK Unsecured Debt  30  745  28    773 

 Preferred Stock  434  6,410  434  224  6,620 

 Common Stock    3,010    200  2,810 

Universal Wellhead Services Holdings, LLC

 Preferred Member Units    720      720 

 Member Units    610      610 

Valley Healthcare Group, LLC

 LIBOR Plus 12.50% (Floor 0.50%)  433  12,844  6  100  12,750 

 Preferred Member Units    1,600      1,600 

Volusion, LLC

 11.5% Secured Debt  645  15,298  141    15,439 

 Preferred Member Units    14,000      14,000 

 Warrants    2,576    126  2,450 

Other

                  

Amounts related to investments transferred to or from other 1940 Act classification during the period

             

   $9,899 $375,948 $13,735 $60,659 $329,024 

(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 or investment balances 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.

(5)
This schedule should be read in conjunction with the consolidated schedule of investments and notes to the consolidated financial statements. Supplemental information can located within the schedule of investments including end of period interest rate, preferred dividend rate, maturity date, investments not paid currently in cash and investments whose value was determined using significant unobservable inputs.

Table of Contents


Schedule 12-14

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments In and Advances to Affiliates
March 31, 2017
(dollars in thousands)
(unaudited)

Company
 Investment(1)(5) Amount of
Realized
Gain/(Loss)
 Amount of
Unrealized
Gain/(Loss)
 Amount of
Interest, Fees or
Dividends
Credited to
Income(2)
 December 31,
2016
Fair Value
 Gross
Additions(3)
 Gross
Reductions(4)
 March 31,
2017
Fair Value
 

Majority-owned investments

                        

Café Brazil, LLC

 

Member Units

 
$

 
$

(140

)

$

52
 
$

6,040
 
$

 
$

140
 
$

5,900
 

Clad-Rex Steel, LLC

 LIBOR Plus 9.50% (Floor 1.00%)      11  396  1    397 

 LIBOR Plus 9.50% (Floor 1.00%)      375  13,941  5    13,946 

 Member Units        7,280      7,280 

 10% Secured Debt      30  1,190    4  1,186 

 Member Units        210      210 

CMS Minerals

 Preferred Member Units    (316) 51  3,682    411  3,271 

Investments

 Member Units    (148) 63  3,381    261  3,120 

Gamber-Johnson

 LIBOR Plus 11.00% (Floor 1.00%)    224  735  23,846  234    24,080 

Holdings, LLC

 Member Units    3,160  170  18,920  3,160    22,080 

GRT Rubber

 LIBOR Plus 9.00% (Floor 1.00%)    (8) 334  13,274  8  217  13,065 

Technologies LLC

 Member Units      127  20,310      20,310 

Harborside Holdings, LLC

 Member Units    3,344      9,400    9,400 

Hydratec, Inc.

 Common Stock      480  15,640      15,640 

IDX Broker, LLC

 12.5% Secured Debt    (7) 344  10,950  7  307  10,650 

 Member Units    1,160  68  7,040  1,160    8,200 

Jensen Jewelers of

 Prime Plus 6.75% (Floor 2.00%)    (4) 108  4,055  4  154  3,905 

Idaho, LLC

 Member Units      37  4,460      4,460 

Lamb Ventures, LLC

 LIBOR Plus 5.75%      7    350  45  305 

 11% Secured Debt      209  7,657    78  7,579 

 Preferred Equity        400      400 

 Member Units    200  40  5,990  200    6,190 

 9.5% Secured Debt      32  1,170  428  1,170  428 

 Member Units    (380) 407  1,340    380  960 

Lighting

 8% Secured Debt      29  1,514    1,514   

Unlimited, LLC

 Preferred Equity  (434) 24    410  24  434   

 Warrants  (54) 54      54  54   

 Member Units  (100) 100      100  100   

Mid-Columbia Lumber

 10% Secured Debt      44  1,750      1,750 

Products, LLC

 12% Secured Debt      117  3,900      3,900 

 Member Units    (500) 2  2,480    500  1,980 

 9.5% Secured Debt      20  836    11  825 

 Member Units    80  9  600  620    1,220 

MSC Adviser I, LLC

 Member Units    2,855  695  30,617  2,855    33,472 

Mystic Logistics

 12% Secured Debt    (10) 286  9,176  11  23  9,164 

Holdings, LLC

 Common Stock    390    5,780  390    6,170 

NRP Jones, LLC

 8% Current / 4% PIK Secured Debt      419  13,915  139    14,054 

 Warrants        130      130 

 Member Units        410      410 

PPL RVs, Inc.

 LIBOR Plus 7.00% (Floor 0.50%)      370  17,826  8    17,834 

 Common Stock      100  11,780      11,780 

Principle

 12% Secured Debt      122  4,060      4,060 

Environmental, LLC

 12% Current / 2% PIK Secured Debt      118  3,378  16    3,394 

 Preferred Member Units  (63) 953    5,370  953  63  6,260 

 Warrants    50    270  50    320 

Quality Lease

 8% PIK Secured Debt      136  7,068  136    7,204 

Service, LLC

 Member Units        3,188  1,051    4,239 

Table of Contents

Company
 Investment(1)(5) Amount of
Realized
Gain/(Loss)
 Amount of
Unrealized
Gain/(Loss)
 Amount of
Interest, Fees or
Dividends
Credited to
Income(2)
 December 31,
2016
Fair Value
 Gross
Additions(3)
 Gross
Reductions(4)
 March 31,
2017
Fair Value
 

The MPI Group, LLC

 9% Secured Debt      66  2,922      2,922 

 Series A Preferred Units               

 Warrants               

 Member Units    90  35  2,300  90    2,390 

Uvalco Supply, LLC

 9% Secured Debt      18  872    116  756 

 Member Units  69  (69) 8  4,640    333  4,307 

Vision Interests, Inc.

 13% Secured Debt      91  2,814      2,814 

 Series A Preferred Stock        3,000      3,000 

 Common Stock               

Ziegler's NYPD, LLC

 6.5% Secured Debt      17  994      994 

 12% Secured Debt      9  300      300 

 14% Secured Debt      96  2,750      2,750 

 Warrants        240      240 

 Preferred Member Units        4,100      4,100 

Other controlled investments

                        

Access Media

 5% Current / 5% PIK Secured Debt    (512) 563  19,700  282  512  19,470 

Holdings, LLC

 Preferred Member Units    (189)   240  169  189  220 

 Member Units               

Ameritech College

 10% Secured Debt      13  514      514 

Operations, LLC

 13% Secured Debt      16  489      489 

 13% Secured Debt      98  3,025      3,025 

 Preferred Member Units    (3,381)   2,291  3,900  3,381  2,810 

ASC Interests, LLC

 11% Secured Debt    (3) 60  2,100  3  53  2,050 

 Member Units    60    2,680  60    2,740 

Bond-Coat, Inc.

 12% Secured Debt    (9) 357  11,596  9  9  11,596 

 Common Stock    940    6,660  940    7,600 

CBT Nuggets, LLC

 Member Units    5,141  1,000  55,480  5,140    60,620 

Charps, LLC

 LIBOR Plus 7.00% (Floor 1.00%)      14    781    781 

 12% Secured Debt      630    18,220    18,220 

 Preferred Member Units          400    400 

Datacom, LLC

 8% Secured Debt      20  900  180    1,080 

 5.25% Current / 5.25% PIK Secured Debt    282  313  11,049  441    11,490 

 Class A Preferred Member Units    51    1,368  51    1,419 

 Class B Preferred Member Units    332    1,529  332    1,861 

Garreco, LLC

 LIBOR Plus 12.00% (Floor 1.00%)      189  5,219  975  225  5,969 

 Member Units    320    1,150  320    1,470 

Gulf

 9% PIK Secured Debt      17  777      777 

Manufacturing, LLC

 Member Units    420  139  8,770  420    9,190 

Gulf Publishing

 12.5% Secured Debt      316  9,911  4    9,915 

Holdings, LLC

 Member Units    336    3,124  336    3,460 

Harrison Hydra-Gen, Ltd.

 Common Stock    (320)   3,120    320  2,800 

Hawthorne Customs

                        

and Dispatch

 Member Units        280      280 

Services, LLC

 Member Units      48  2,040      2,040 

HW Temps LLC

 LIBOR Plus 13.00% (Floor 1.00%)      368  10,500  4  600  9,904 

 Preferred Member Units      35  3,940      3,940 

Indianapolis Aviation

 15% Secured Debt      156  3,100      3,100 

Partners, LLC

 Warrants    61    2,649  61    2,710 

Marine Shelters

 12% PIK Secured Debt    (2,551)   9,387    9,387   

Holdings, LLC

 Preferred Member Units  (100)       100  100   

MH Corbin

 10% Secured Debt      335  13,197  8  175  13,030 

Holding LLC

 Preferred Member Units      35  6,000      6,000 

NAPCO Precast, LLC

 Prime Plus 2.00% (Floor 7.00%)    (2) 63  2,713  2  2  2,713 

 18% Secured Debt    (3) 181  3,952  3  3  3,952 

 Member Units      29  10,920      10,920 

NRI Clinical

 LIBOR Plus 6.50% (Floor 1.50%)      10  200  200    400 

Research, LLC

 14% Secured Debt    (11) 160  4,261  11  11  4,261 

 Warrants        680      680 

 Member Units        2,462      2,462 

NuStep, LLC

 12% Secured Debt      728    20,394    20,394 

 Preferred Member Units          10,200    10,200 

Table of Contents

Company
 Investment(1)(5) Amount of
Realized
Gain/(Loss)
 Amount of
Unrealized
Gain/(Loss)
 Amount of
Interest, Fees or
Dividends
Credited to
Income(2)
 December 31,
2016
Fair Value
 Gross
Additions(3)
 Gross
Reductions(4)
 March 31,
2017
Fair Value
 

OMi Holdings, Inc.

 Common Stock      192  13,080      13,080 

Pegasus Research Group, LLC

 Member Units    (180) 60  8,620    180  8,440 

River Aggregates, LLC

 Zero Coupon Secured Debt      19  627  19    646 

 Member Units        4,600      4,600 

 Member Units        2,510      2,510 

SoftTouch Medical

 LIBOR Plus 9.00% (Floor 1.00%)    (4) 182  7,140  4  4  7,140 

Holdings LLC

 Member Units      155  9,170      9,170 

Other

                        

Amounts related to investments transferred to or from other 1940 Act classification during the period

                 

Total Control investments

   $(682)$11,880 $12,988 $594,282 $85,423 $21,466 $658,239 

Affiliate Investments

                        

AFG Capital

 Warrants $ $20 $ $670 $20 $ $690 

Group, LLC

 Preferred Member Units    100  7  2,750  100    2,850 

Barfly Ventures, LLC

 12% Secured Debt      235  5,827  1,808    7,635 

 Options        490      490 

 Warrants        280      280 

BBB Tank

 LIBOR Plus 9.50% (Floor 1.00%)      21  797      797 

Services, LLC

 15% Secured Debt      152  3,991  1    3,992 

 Member Units        800      800 

Boss Industries, LLC

 Preferred Member Units    73  89  2,800  120    2,920 

Bridge Capital

 13% Secured Debt      307  5,610  63    5,673 

Solutions

 Warrants        3,370      3,370 

Corporation

 13% Secured Debt      33  1,000      1,000 

 Preferred Member Units      25  1,000      1,000 

Buca C, LLC

 LIBOR Plus 7.25% (Floor 1.00%)    (167) 494  22,671  21  1,634  21,058 

 Preferred Member Units    (728) 57  4,660  58  728  3,990 

CAI Software LLC

 12% Secured Debt    (3) 110  3,683  3  203  3,483 

 Member Units    100  30  2,480  100    2,580 

CapFusion, LLC

 13% Secured Debt      518  13,202  50    13,252 

 Warrants        1,200      1,200 

Chandler Signs

 12% Secured Debt    (2) 137  4,500  2  2  4,500 

Holdings, LLC

 Class A Units      63  3,240      3,240 

Condit Exhibits, LLC

 Member Units      11  1,840      1,840 

Congruent Credit

 LP Interests (Fund II)    (141)   1,518    141  1,377 

Opportunities Funds

 LP Interests (Fund III)    281  320  16,181  2,396    18,577 

Daseke, Inc.

 12% Current / 2.5% PIK Secured Debt    (167) 676  21,799  255  22,054   

 Common Stock  22,859  (18,849)   24,063    24,063   

Dos Rios Partners

 LP Interests (Dos Rios Partners, LP)    704    4,925  704    5,629 

 LP Interests (Dos Rios Partners—A, LP)    207    1,444  207    1,651 

Dos Rios Stone Products LLC

 Class A Preferred Units        2,070      2,070 

East Teak Fine Hardwoods, Inc.

 Common Stock    (110) 29  860    110  750 

East West

                        

Copolymer &

 12% Current / 2% PIK Secured Debt    (6,390)   8,630    6,390  2,240 

Rubber, LLC

 Warrants               

EIG Fund Investments

 LP Interests (EIG Global Private Debt fund-A, L.P.)  71  (99) 45  2,804  352  1,690  1,466 

 LP Interests (EIG Traverse Co-Investment, L.P.)    68  263  9,905  68    9,973 

Freeport Financial

 LP Interests (Freeport Financial                      

Fund Investments

 SBIC Fund LP)    55  102  5,620  55    5,675 

 LP Interests (Freeport First Lien Loan Fund III LP)    (52) 195  4,763  2,796  52  7,507 

Table of Contents

Company
 Investment(1)(5) Amount of
Realized
Gain/(Loss)
 Amount of
Unrealized
Gain/(Loss)
 Amount of
Interest, Fees or
Dividends
Credited to
Income(2)
 December 31,
2016
Fair Value
 Gross
Additions(3)
 Gross
Reductions(4)
 March 31,
2017
Fair Value
 

Gault Financial, LLC

 10.5% Secured Debt    1,016  326  11,079  1,017  146  11,950 

(RMB Capital, LLC)

 Warrants               

Glowpoint, Inc.

 12% Secured Debt    (996) 274  3,997  9  996  3,010 

 Common Stock    190    2,080  190    2,270 

Guerdon Modular

 13% Secured Debt      357  10,594  9    10,603 

Holdings, Inc.

 Preferred Stock     ��  1,140      1,140 

 Common Stock        80      80 

Hawk Ridge

 10% Secured Debt      255  9,901  4    9,905 

Systems, LLC

 Preferred Member Units      150  2,850      2,850 

 Preferred Member Units        150      150 

Houston Plating and Coatings, LLC

 Member Units    230  1  4,000  230    4,230 

I-45 SLF LLC

 Member Units    321  691  14,586  1,321    15,907 

Indianhead Pipeline

 12% Secured Debt      727  5,079  563  225  5,417 

Services, LLC

 Preferred Member Units      98  2,677  98    2,775 

 Warrants               

 Member Units               

KBK Industries, LLC

 10% Secured Debt      31  1,250  100  175  1,175 

 12.5% Secured Debt      188  5,889  3    5,892 

 Member Units        2,780      2,780 

L.F. Manufacturing Holdings, LLC

 Member Units        1,380      1,380 

OnAsset

 12% PIK Secured Debt      136  4,519  135    4,654 

Intelligence, Inc.

 Preferred Stock               

 Warrants               

OPI International Ltd.

 10% Unsecured Debt      12  473      473 

 Common Stock    (1,220)   1,600    1,220  380 

PCI Holding

 12% Secured Debt    (10) 400  13,000  10  10  13,000 

Company, Inc.

 Preferred Stock      172  5,370  170    5,540 

Rocaceia, LLC

                        

(Quality Lease and

                        

Rental

 12% Secured Debt        250      250 

Holdings, LLC)

 Preferred Member Units               

Tin Roof Acquisition

 12% Secured Debt      417  13,385  16  169  13,232 

Company

 Class C Preferred Stock      68  2,738  69    2,807 

UniTek Global

 LIBOR Plus 7.50% (Floor 1.00%)    (1) 113  5,021  1  1  5,021 

Services, Inc.

 LIBOR Plus 8.50% (Floor 1.00%)      22  824  2    826 

 15% PIK Unsecured Debt      30  745  28    773 

 Preferred Stock    (224) 434  6,410  434  224  6,620 

 Common Stock    (200)   3,010    200  2,810 

Universal Wellhead

                        

Services

 Preferred Member Units        720      720 

Holdings, LLC

 Member Units        610      610 

Valley Healthcare

 LIBOR Plus 12.50% (Floor 0.50%)      433  12,844  6  100  12,750 

Group, LLC

 Preferred Member Units        1,600      1,600 

Volusion, LLC

 11.5% Secured Debt      645  15,298  141    15,439 

 Preferred Member Units        14,000      14,000 

 Warrants    (127)   2,576    126  2,450 

Other

                        

Amounts related to investments transferred to or from other 1940 Act classification during the period

                 

Total Affiliate investments

   $22,930 $(26,121)$9,899 $375,948 $13,735 $60,659 $329,024 

(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.

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(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.

(5)
This schedule should be read in conjunction with the consolidated schedule of investments and notes to the consolidated financial statements. Supplemental information can located within the schedule of investments including end of period interest rate, preferred dividend rate, maturity date, investments not paid currently in cash and investments whose value was determined using significant unobservable inputs.

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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, 2016,2017, filed with the Securities and Exchange Commission (the "SEC") on February 24, 2017,23, 2018, 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 elsewhere in this Quarterly Report and in the Annual Report on Form 10-K for the year ended December 31, 2016.2017.

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 a variety of 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"), Main Street Capital II, LP ("MSC II") and Main 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 under the Investment Advisers Act of 1940, as amended. 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 taxable 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$20 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


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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 March 31, 20172018 and December 31, 20162017 (this information excludes the Other Portfolio investments and the External Investment Manager which are discussed further below):


 As of March 31, 2017  As of March 31, 2018 

 LMM(a) Middle Market Private Loan  LMM(a) Middle
Market
 Private Loan 

 (dollars in millions)
  (dollars in millions)
 

Number of portfolio companies

 73 69 49  73 59 55 

Fair value

 $886.6 $568.8 $384.2  $1,049.8 $617.9 $496.5 

Cost

 $772.1 $588.9 $403.7  $898.9 $629.9 $521.6 

% of portfolio at cost—debt

 67.6% 96.9% 94.0%  67.7% 96.7% 93.7% 

% of portfolio at cost—equity

 32.4% 3.1% 6.0%  32.3% 3.3% 6.3% 

% of debt investments at cost secured by first priority lien

 96.1% 88.8% 90.2%  98.4% 91.0% 94.3% 

Weighted-average annual effective yield(b)

 12.2% 8.6% 9.6%  12.1% 9.2% 9.4% 

Average EBITDA(c)

 $4.6 $95.5 $24.8  $4.8 $86.3 $43.0 

(a)
At March 31, 2017,2018, we had equity ownership in approximately 99%97% of our LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was approximately 37%38%.

(b)
The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of March 31, 2018, 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 six LMM portfolio companies and three Private Loan portfolio companies, as EBITDA is not a meaningful valuation metric for

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 As of December 31, 2017 
 
 LMM(a) Middle
Market
 Private Loan 
 
 (dollars in millions)
 

Number of portfolio companies

  70  62  54 

Fair value

 $948.2 $609.3 $467.5 

Cost

 $776.5 $629.7 $489.2 

% of portfolio at cost—debt

  67.1%  97.3%  93.6% 

% of portfolio at cost—equity

  32.9%  2.7%  6.4% 

% of debt investments at cost secured by first priority lien

  98.1%  90.5%  94.5% 

Weighted-average annual effective yield(b)

  12.0%  9.0%  9.2% 

Average EBITDA(c)

 $4.4 $78.3 $39.6 

(a)
At December 31, 2017, we had equity ownership in approximately 97% of our LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was approximately 39%.

(b)
The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of December 31, 2017, 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 fivesix LMM portfolio companies, one Middle Market portfolio company and three 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.

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 As of December 31, 2016 
 
 LMM(a) Middle Market Private Loan 
 
 (dollars in millions)
 

Number of portfolio companies

  73  78  46 

Fair value

 $892.6 $630.6 $342.9 

Cost

 $760.3 $646.8 $357.7 

% of portfolio at cost—debt

  69.1%  97.2%  93.5% 

% of portfolio at cost—equity

  30.9%  2.8%  6.5% 

% of debt investments at cost secured by first priority lien

  92.1%  89.1%  89.0% 

Weighted-average annual effective yield(b)

  12.5%  8.5%  9.6% 

Average EBITDA(c)

 $5.9 $98.6 $22.7 

(a)
At December 31, 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 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, 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, one Middle Market portfolio company and three Private Loan portfolio companies, as EBITDA is not a meaningful valuation metric for our investments in these portfolio companies.

        As of March 31, 2017,2018, we had Other Portfolio investments in teneleven companies, collectively totaling approximately $106.3$101.1 million in fair value and approximately $111.8$107.1 million in cost basis and which comprised approximately 5.4%4.4% of our Investment Portfolio (as defined in "—Critical Accounting Policies—Basis of Presentation" below) at fair value. As of December 31, 2016,2017, we had Other Portfolio investments in teneleven companies, collectively totaling approximately $100.3$104.6 million in fair value and approximately $107.1$109.4 million in cost basis and which comprised approximately 5.0%4.8% 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 March 31, 2018, there was no cost basis in this investment and the investment had a fair value of approximately $48.7 million, which comprised approximately 2.1% of our Investment Portfolio at fair value. As of December 31, 2017, there was no cost basis in this investment and the investment had a fair value of approximately $33.5$41.8 million, which comprised approximately 1.7% of our Investment Portfolio at fair value. As of December 31, 2016, there was no cost basis in this investment and the investment had a fair value of approximately $30.6 million, which comprised approximately 1.5%1.9% 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


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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 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


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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 the three months ended March 31, 20172018 and 2016,2017, the ratio of our total operating expenses, excluding interest expense, as a percentage of our quarterly average total assets was 1.6%1.5% and 1.4%1.6%, respectively, on an annualized basis.basis and 1.5% for the year ended December 31, 2017, excluding certain non-recurring professional fees and other expenses. Including those expenses, the ratio for the year ended December 31, 2017 was 1.6%.

        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-listed 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 historical incentive fees otherwise earned. During the three months ended March 31, 20172018 and 2016,2017, the External Investment Manager earned $2.6$2.8 million and $2.3$2.6 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 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 consolidated 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


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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. Our results of operations and cash flows for the three months ended March 31, 20172018 and 2016,2017 and financial position as of March 31, 20172018 and December 31, 2016,2017, are presented on a consolidated basis. The effects of all intercompany transactions between us and our consolidated subsidiaries have been eliminated in consolidation. Certain reclassifications have been made to prior period balances to conform with the current presentation.

        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 months ended March 31, 20172018 and 20162017 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, 2016.2017. 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 BDCsWe are an investment company following the accounting and reporting guidance in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 946,Financial Services—Investment Companies ("ASC 946"),. Under regulations pursuant to Article 6 of Regulation S-X applicable to BDCs and 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. 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 investment is realized, usually upon exit, resulting in any gain or loss being recognized as a "Net Realized Gain (Loss)."

        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 March 31, 20172018 and December 31, 2016,2017, our Investment Portfolio valued at fair value represented approximately 95% and 96% of our total assets, respectively.assets. We are required to


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report our investments at fair value. We follow the provisions of 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 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"


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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 March 31, 20172018 and December 31, 20162017 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 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 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.

        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


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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


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PIK interest and dividends in arrears are no longer collectible. For the three months ended March 31, 20172018 and 2016,2017, (i) approximately 3.4%1.0% and 3.1%3.4%, respectively, of our total investment income was attributable to PIK interest income not paid currently in cash and (ii) approximately 1.8%1.0% and 0.8%1.8%, 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 taxable 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 primarily 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""source-of-income" requirements contained in the RIC tax provisions 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 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. ThisThe Taxable Subsidiaries are each taxed at their normal corporate tax rates based on their taxable income. The income tax expense, or benefit, if any, and the related tax assets and liabilities, of the Taxable Subsidiaries are reflected in our consolidated financial statements.


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        The External Investment Manager is an indirect wholly owned subsidiary of MSCC owned through a Taxable Subsidiary and is a disregarded entity for tax purposes. The External Investment Manager has entered into a tax sharing agreement with its Taxable Subsidiary owner. Since the External Investment Manager 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, and as a result of the tax sharing agreement with its Taxable Subsidiary owner, for its stand-alone financial reporting purposes the External Investment Manager is treated as if it 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 income tax expense, or benefit, if any, and the related tax assets and liabilities, of the External Investment Manager are reflected in the External Investment Manager's separate financial statements.

        In December 2017, the "Tax Cuts and Jobs Act" legislation was enacted. The Tax Cuts and Jobs Act includes significant changes to the U.S. corporate tax system, including a U.S. Federal corporate income tax rate reduction from 35% to 21% and other changes. ASC 740,Income Taxes, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation was enacted. As such, we have accounted for the tax effects as a result of the enactment of the Tax Cuts and Jobs Act beginning with the period ended December 31, 2017.

        The Taxable Subsidiaries and the External Investment Manager 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 consolidated 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


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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$20 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.

        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


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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 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. Incapabilities, and we allocate the first quarter of 2014, we began allocating costsrelated expenses to the External Investment Manager pursuant to the sharing agreement. Our total expenses for the three months ended March 31, 20172018 and 20162017 are net of expenses allocated to the External Investment Manager of $1.5$2.1 million and $1.2$1.5 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 the dividend income received from the External Investment


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Manager. For the three months ended March 31, 20172018 and 2016,2017, the total contribution to our net investment income was $2.2$2.6 million and $1.9$2.2 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 March 31, 20172018 and December 31, 20162017 (this information excludes the Other Portfolio investments and the External Investment Manager).

Cost:
 March 31,
2017
 December 31,
2016
  March 31,
2018
 December 31,
2017
 

First lien debt

 76.6% 76.1%  78.7% 79.0% 

Equity

 15.6% 14.5%  16.1% 15.3% 

Second lien debt

 6.2% 7.7%  4.1% 4.5% 

Equity warrants

 1.0% 1.1%  0.7% 0.7% 

Other

 0.6% 0.6%  0.4% 0.5% 

 100.0% 100.0%  100.0% 100.0% 

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Fair Value:
 March 31,
2017
 December 31,
2016
  March 31,
2018
 December 31,
2017
 

First lien debt

 69.6% 68.7%  71.5% 70.5% 

Equity

 23.2% 22.6%  23.7% 24.4% 

Second lien debt

 5.8% 7.2%  3.8% 4.1% 

Equity warrants

 0.8% 0.9%  0.6% 0.6% 

Other

 0.6% 0.6%  0.4% 0.4% 

 100.0% 100.0%  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, 20162017 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 asAs of March 31, 20172018, our total Investment Portfolio had six investments on non-accrual status, which comprised approximately 0.8% of its fair value and December 31, 2016:

 
 As of March 31, 2017 As of December 31, 2016 
Investment Rating
 Investments at
Fair Value
 Percentage of
Total Portfolio
 Investments at
Fair Value
 Percentage of
Total Portfolio
 
 
 (dollars in thousands)
 

1

 $241,988  27.3% $253,420  28.4% 

2

  195,294  22.0%  258,085  28.9% 

3

  354,367  40.0%  294,807  33.0% 

4

  82,485  9.3%  75,433  8.5% 

5

  12,425  1.4%  10,847  1.2% 

Total

 $886,559  100.0% $892,592  100.0% 

        Based upon our investment rating system, the weighted-average rating3.3% of our LMM portfolio was approximately 2.4 and 2.3 as of March 31, 2017 and December 31, 2016, respectively.

its cost. As of MarchDecember 31, 2017, our total Investment Portfolio had five investments on non-accrual status, which comprised approximately 0.2% of its fair value and 2.7% of its cost. As of December 31, 2016, our total Investment Portfolio had four investments on non-accrual status, which comprised approximately 0.6% of its fair value and 3.0%2.3% 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, to an increase in defaults on our debt investments or in realized losses on our investments and to difficulty in maintaining historical dividend payment rates and unrealized appreciation 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.


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DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS


 Three Months Ended
March 31,
 Net Change  Three Months Ended
March 31,
 Net Change 

 2017 2016 Amount %  2018 2017 Amount % 

 (dollars in thousands)
  (dollars in thousands)
 

Total investment income

 $47,889 $42,006 $5,883 14%  $55,942 $47,889 $8,053 17% 

Total expenses

 (16,723) (14,842) (1,881) 13%  (18,967) (16,723) (2,244) 13% 

Net investment income

 31,166 27,164 4,002 15%  36,975 31,166 5,809 19% 

Net realized gain from investments

 27,565 13,603 13,962    7,460 27,565 (20,105)   

Net realized loss from SBIC debentures

 (5,217)  (5,217)    (1,374) (5,217) 3,843   

Net change in net unrealized appreciation (depreciation) from:

         

Net unrealized appreciation (depreciation) from:

         

Portfolio investments

 (22,091) (27,529) 5,438    (10,882) (22,091) 11,209   

SBIC debentures and marketable securities and idle funds

 5,665 1,311 4,354   

SBIC debentures

 1,359 5,665 (4,306)   

Total net change in net unrealized depreciation

 (16,426) (26,218) 9,792   

Total net unrealized appreciation (depreciation)

 (9,523) (16,426) 6,903   

Income tax benefit (provision)

 (5,638) 2,263 (7,901)    979 (5,638) 6,617   

Net increase in net assets resulting from operations

 $31,450 $16,812 $14,638 87%  $34,517 $31,450 $3,067 10% 

 


 Three Months Ended
March 31,
 Net Change  Three Months Ended March 31, Net Change 

 2017 2016 Amount %  2018 2017 Amount % 

 (dollars in thousands, except per share
amounts)

  (dollars in thousands, except
per share amounts)

 

Net investment income

 $31,166 $27,164 $4,002 15%  $36,975 $31,166 $5,809 19% 

Share-based compensation expense

 2,269 1,589 680 43%  2,303 2,269 34 1% 

Distributable net investment income(a)

 $33,435 $28,753 $4,682 16%  $39,278 $33,435 $5,843 17% 

Net investment income per share—Basic and diluted

 $0.57 $0.54 $0.03 6%  $0.63 $0.57 $0.06 11% 

Distributable net investment income per share—Basic and diluted(a)

 $0.61 $0.57 $0.04 7%  $0.67 $0.61 $0.06 10% 

(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 three months ended March 31, 2017,2018, total investment income was $47.9$55.9 million, a 14%17% increase over the $42.0$47.9 million of total investment income for the corresponding period of 2016.2017. This comparable period increase was principally attributable to (i) a $6.3$6.8 million increase in dividend income from Investment Portfolio equity investments and $1.1 million net increase in interest income primarily related to higher average levels of portfolio debt investments and increased activities involving


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related to higher average levels of Investment Portfolio debt investments, partially offset by a decrease in interest income associated with decreased repricing and other activities involving existing Investment Portfolio debt investments and (ii) a $0.4 million increase in fee income, partially offset by a $0.6 million decrease in dividend income from Investment Portfolio equity investments.when compared to prior year. The $5.9$8.1 million increase in total investment income in the three months ended March 31, 20172018 includes an increaseelevated levels of $2.7dividend income activity from certain Investment Portfolio equity investments, partially offset by a decrease of $1.8 million related to higherlower accelerated prepayment, repricing and other activity for certain Investment Portfolio debt investments when compared to the same period in 2016.2017.

        For the three months ended March 31, 2017,2018, total expenses increased to $16.7$19.0 million from $14.8$16.7 million for the corresponding period of 2016.2017. This comparable period increase in operating expenses was principally attributable to (i) a $0.7$1.7 million increase in share-based compensationinterest expense, primarily due to (a) a $2.2 million increase as a result of the issuance of our 4.50% Notes due 2022 in November 2017 and (b) a $0.4 million increase from the SBIC debentures due to the higher average balance as compared to the same period in 2017, with these increases partially offset by a decrease of $1.0 million related to the Credit Facility due to the lower average balance during 2018 and (ii) a $0.6$1.1 million increase in compensation expense related to increases in the number of personnel, base compensation levels and incentive compensation accruals, (iii) a $0.5 million increase in general and administrative expenses, primarily related to non-recurring professional fees and other expenses incurred on certain potential new portfolio investment opportunities which were terminated during the due diligence and legal documentation processes, and (iv) a $0.4 million increase in interest expense, primarily due to the higher average interest rate and balance outstanding on our Credit Facility in the three months ended March 31, 2017, with these increases partially offset by a $0.4$0.5 million increase in the expenses allocated to the External Investment Manager as a result of elevated non-recurring strategic activities at the External Investment Manager during the three months ended March 31, 2018, in each case when compared to the same period in the prior year. For the three months ended March 31, 2017, theThe ratio of our total operating expenses, excluding interest expense, as a percentage of our quarterly average total assets was 1.6% on an annualized basis, compared to 1.4% on an annualized basis for the three months ended March 31, 20162018 was 1.5% on an annualized basis compared to 1.6% for the three months ended March 31, 2017 and 1.5% for the year ended December 31, 2016.2017, excluding certain non-recurring professional fees and other expenses incurred in 2017. Including the effect of those non-recurring expenses, the ratio for the year ended December 31, 2017 was 1.6%.

        Net investment income for the three months ended March 31, 20172018 was $31.2$37.0 million, or a 15%19% increase, compared to net investment income of $27.2$31.2 million for the corresponding period of 2016.2017. The increase in net investment income was principally attributable to the increase in total investment income, partially offset by higher operating expenses both as discussed above.

        For the three months ended March 31, 2017,2018, distributable net investment income increased 16%17% to $39.3 million, or $0.67 per share, compared with $33.4 million, or $0.61 per share, compared with $28.8 million, or $0.57 per share in the corresponding period of 2016.2017. 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 three months ended March 31, 20172018 reflects (i) an increaseelevated levels of dividend income activity from certain Investment Portfolio equity investments, (ii) a decrease of approximately $0.05$0.03 per share from the comparable period in 20162017 attributable to the net increasedecrease in the comparable levels of accelerated prepayment, repricing and other unusual activity for certain Investment Portfolio debt investments and (ii)(iii) a greater number of average shares outstanding compared to the corresponding period in 20162017 primarily due to shares issued through the ATM Program (as defined in "—Liquidity and Capital Resources—Capital Resources" below)., shares issued pursuant to our equity incentive plans and shares issued pursuant to our dividend reinvestment plan.


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        The net increase in net assets resulting from operations during the three months ended March 31, 20172018 was $34.5 million, or $0.59 per share, compared with $31.5 million, or $0.57 per share, compared with $16.8 million, or $0.33 per share, during the three months ended March 31, 2016.2017. This $14.6$3.1 million increaseimprovement from the same period in the prior year was primarily the result of (i) a $14.0 million increase in the net realized gain (loss) from investments, (ii) a $9.8$6.9 million improvement in net change in unrealized appreciation (depreciation) from portfolio investments and SBIC debentures, including the impact of accounting reversals relating to realized gainsgains/income (losses), (ii) a $6.6 million change in the income tax benefit (provision) from net unrealized depreciationan income tax provision of $26.2 million for the three months ended March 31, 2016 to a net


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unrealized depreciation of $16.4$5.6 million for the three months ended March 31, 2017 andto an income tax benefit of $1.0 million for the three months ended March 31, 2018, (iii) a $4.0$5.8 million increase in net investment income as discussed above partially offset by (i)and (iv) a $5.2$3.8 million improvement in the net realized loss on the repayment offrom SBIC debentures outstanding at MSC II which had previously been accounted for on the fair value method of accounting, and (ii)with these increases partially offset by a $7.9$20.1 million increasedecrease in the income tax provisionnet realized gain from an income tax benefitinvestments to a total net realized gain from investments of $2.3$7.5 million for the three months ended March 31, 2016 to an income tax provision2018. The net realized gain from investments of $5.6$7.5 million for the three months ended March 31, 2017. The net realized gain from investments of $27.6 million for the three months ended March 31, 20172018 was primarily the result of (i) the net realized gain of $22.3$13.1 million resulting from gains on the exitexits of two LMM investments and (ii) the realized gaingains of $2.6 million on the exit of one Private Loan investment and (iii) the net realized gain of $2.5$3.2 million due to activity in our Other Portfolio.Portfolio, with these gains partially offset by the net realized loss of $8.6 million in our Middle Market portfolio, which is primarily the result of (a) the realized loss of $3.3 million on the exit of a Middle Market investment and (b) the realized loss of $5.3 million on the restructure of a Middle Market investment. The realized loss of $5.2$1.4 million on the repayment of SBIC debentures is related to the previously recognized bargain purchase gain resulting from recording the MSC II debentures at fair value on the date of the acquisition of the majority of the equity interests of MSC II in 2010. The effect of the realized loss is offset by the reversal of all previously recognized unrealized depreciation on these SBIC debentures due to fair value adjustments since the date of the acquisition.acquisition in 2010.

        The following table provides a summary of the total net unrealized depreciation of $16.4$9.5 million for the three months ended March 31, 2017:2018:


 Three Months Ended March 31, 2017  Three Months Ended March 31, 2018 

 LMM(a) Middle Market Private Loan Other(b) Total  LMM(a) Middle Market Private Loan Other(b) Total 

 (dollars in millions)
  (dollars in millions)
 

Accounting reversals of net unrealized appreciation recognized in prior periods due to net realized gains recognized during period

 $(20.0)$(1.8)$(1.4)$(1.1)$(24.3)

Accounting reversals of net unrealized (appreciation) depreciation recognized in prior periods due to net realized (gains)/(income) losses recognized during the current period

 $(18.8)$8.8 $(0.3)$(0.4)$(10.7)

Net unrealized appreciation (depreciation) relating to portfolio investments

 2.2 (2.0) (3.3) 5.3 2.2  (3.3) (0.3) (2.6) 6.0 (0.2)

Total net change in unrealized appreciation (depreciation) relating to portfolio investments

 $(17.8)$(3.8)$(4.7)$4.2 $(22.1)

Total net unrealized appreciation (depreciation) relating to portfolio investments

 $(22.1)$8.5 $(2.9)$5.6 $(10.9)

Net unrealized appreciation relating to SBIC debentures(c)

         5.7 

Unrealized appreciation relating to SBIC debentures(c)

         1.4 

Total net change in unrealized depreciation

         $(16.4)

Total net unrealized depreciation

         $(9.5)

(a)
LMM includes unrealized appreciation on 2226 LMM portfolio investments and unrealized depreciation on 159 LMM portfolio investments.

(b)
Other includes $2.9$7.0 million of unrealized appreciation relating to the External Investment Manager, and $2.4partially offset by $1.0 million of net unrealized appreciationdepreciation relating to the Other Portfolio.


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(c)
Relates toThe $1.4 million of unrealized appreciation on the SBIC debentures held by MSC II which are accounted for on a fair value basis and includes $6.0 million ofis due to the accounting reversals resulting from the reversal of previously recognized unrealized depreciation recorded due to fair value adjustments since the date of acquisition of MSC II on the debentures repaid due to fair value adjustments since such date, partially offset by $0.3 million of current period unrealized depreciation on the remaining SBIC debentures.repaid.

        The income tax provisionbenefit for the three months ended March 31, 20172018 of $5.6$1.0 million principally consisted of a deferred tax provisionbenefit of $4.4$1.9 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, as well asand other current tax expense of $1.3$0.9 million related to (i) a $0.9$0.4 million


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accrual for excise tax on our estimated undistributed taxable income and (ii) other current tax expense of $0.4$0.5 million related to accruals for U.S. federal and state income taxes.

        For the three months ended March 31, 2017,2018, we experienced a net increasedecrease in cash and cash equivalents in the amount of approximately $9.1$22.4 million, which is the net result of approximately $55.8$143.2 million of cash used in our operating activities and approximately $120.7 million of cash provided by our operating activities and approximately $46.6 million of cash used by financing activities.

        During the period, we generated $55.8$143.2 million of cash fromwas used in our operating activities, which resulted primarily from (i) cash flows we generated from the operating profits earned through our operating activities totaling $26.9$35.8 million, which is our $33.4$39.3 million of distributable net investment income, excluding the non-cash effects of the accretion of unearned income of $4.7$3.2 million, payment-in-kind interest income of $1.6$0.6 million, cumulative dividends of $0.9$0.6 million and the amortization expense for deferred financing costs of $0.7$0.9 million, (ii) cash uses totaling $192.6$345.0 million consisting of (a) $186.9$340.4 million fromfor the funding of new portfolio company investments and settlement of accruals for portfolio investments existing as of December 31, 2016,2017, (b) $4.1$2.5 million related to increases in other assets and (c) $2.1 million related to decreases in payables and accruals and (c) $1.6 million related to increases in other assets and (iii) cash proceeds totaling $221.5$166.1 million which resulted from the sales and repayments of debt investments and sales of and return on capital of equity investments.

        During the three months ended March 31, 2017, $46.62018, $120.7 million in cash was used inprovided by our financing activities, which principally consisted of (i) $28.6$11.3 million in net cash proceeds from the ATM Program (described below), (ii) $124.0 million in cash proceeds from the Credit Facility and (iii) $22.0 million in cash proceeds from issuance of SBIC debentures, partially offset by (i) $31.9 million in cash dividends paid to stockholders, (ii) $55.0 million in net repayments on the Credit Facility, (iii) $25.2$4.0 million in repayment of SBIC debentures, (iv) $0.6 million for payment of deferred loan costs, SBIC debenture fees and other costs and (v) $0.3(iii) $0.2 million for purchases of vested restricted stock from employees to satisfy their tax withholding requirements upon the vesting of such restricted stock partially offset by (i) $37.7and (iv) $0.5 million in net cash proceeds from the ATM Program (described below)for payment of deferred debt issuance costs, SBIC debenture fees and (ii) $25.4 million in cash proceeds from issuance of SBIC debentures.other costs.

        As of March 31, 2017,2018, we had $33.6$29.1 million in cash and cash equivalents and $267.0$397.0 million of unused capacity under the Credit Facility, which we maintain to support our investment and operating activities. As of March 31, 2017,2018, our net asset value totaled $1,243.9$1,396.6 million, or $22.44$23.67 per share.

        The Credit Facility, which provides additional liquidity to support our investment and operational activities, provides for total commitments of $555.0$585.0 million from a diversified group of fourteen lenders andfifteen lenders. The Credit Facility matures in September 2021. The Credit Facility also2021 and 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.


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        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 (0.98%(1.88% as of March 31, 2017)2018) plus (i) 1.875% (or the applicable base rate (Prime Rate of 4.00%4.75% as of March 31, 2017)2018) 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, excluding the


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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 2021, 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 March 31, 2017,2018, we had $288.0$188.0 million in borrowings outstanding under the Credit Facility, the interest rate on the Credit Facility was 2.7%3.5% and we were in compliance with all financial covenants of the Credit Facility.

        Due to each ofThrough the Funds' status as a licensed SBIC,Funds, we have the ability to issue through the Funds,SBIC debentures guaranteed by the SBA at favorable interest rates and favorable terms and conditionsconditions. Under existing SBIC regulations, SBA approved SBICs under common control have the ability to issue debentures guaranteed by the SBA up to a regulatory maximum amount of $350.0 million. Through the Funds, we have an effective maximum amount of $346.0 million through our threefollowing the prepayment of $4.0 million of existing SBIC licenses.debentures as discussed below. During the three months ended March 31, 2017,2018, we issued $25.4$22.0 million of SBIC debentures and opportunistically prepaid $25.2$4.0 million of our existing SBIC debentures as part of an effort to manage the maturity dates of our oldest SBIC debentures, leaving $109.8$32.2 million of remaining capacity under our SBIC licenses. 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 semiannually. 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. Main Street expectsWe expect to issue new SBIC debentures under the SBIC program in the future in an amount up to the regulatory maximum amount of $350.0 million for affiliated SBIC funds. OnAs of March 31, 2017,2018, through our three wholly owned SBICs, we had $240.2$313.8 million of outstanding SBIC debentures guaranteed by the SBA, which bear a weighted-average annual fixed interest rate of approximately 3.8%3.7%, paid semiannually, and mature ten years from issuance. The first maturity related to our SBIC debentures occurs in 2019, and the weighted-average remaining duration is approximately 5.75.9 years as of March 31, 2017.2018.

        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"). 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 maymaintained the right from time to time repurchase 6.125% Notes in accordance with the 1940 Act and the rules promulgated thereunder. On March 1, 2018, we announced our intent to redeem the 6.125% Notes on April 1, 2018. As of March 31, 2017,2018, the outstanding balance of the 6.125% Notes was $90.7 million.


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        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.

        In November 2014, we issued $175.0 million in aggregate principal amount of the 4.50% Notes (the "4.50% Notes"Notes due 2019") at an issue price of 99.53%. The 4.50% Notes due 2019 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;Notes due 2019; effectively subordinated to


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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 due 2019 mature on December 1, 2019, and may be redeemed in whole or in part at any time at our option subject to certain make-whole provisions. The 4.50% Notes due 2019 bear interest at a rate of 4.50% per year payable semiannually on June 1 and December 1 of each year, beginning June 1, 2015. We may from time to time repurchase 4.50% Notes due 2019 in accordance with the 1940 Act and the rules promulgated thereunder. As of March 31, 2017,2018, the outstanding balance of the 4.50% Notes due 2019 was $175.0 million.

        The indenture governing the 4.50% Notes due 2019 (the "4.50% Notes due 2019 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 due 2019 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 due 2019 Indenture.

        DuringIn November 2015,2017, we commencedissued $185.0 million in aggregate principal amount of 4.50% Notes (the "4.50% Notes due 2022") at an issue price of 99.16%. The 4.50% Notes due 2022 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 due 2022; 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 due 2022 mature on December 1, 2022, and may be redeemed in whole or in part at any time at our option subject to certain make-whole provisions. The 4.50% Notes due 2022 bear interest at a rate of 4.50% per year payable semiannually on June 1 and December 1 of each year, beginning June 1, 2018. We may from time to time repurchase 4.50% Notes due 2022 in accordance with the 1940 Act and the rules promulgated thereunder. As of March 31, 2018, the outstanding balance of the 4.50% Notes due 2022 was $185.0 million.

        The indenture governing the 4.50% Notes due 2022 (the "4.50% Notes due 2022 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 due 2022 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 due 2022 Indenture.


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        We maintain a program with certain selling agents through which we can sell shares of our common stock by means of at-the-market offerings from time to time (the "ATM Program"). During the three months ended March 31, 2017,2018, we sold 1,035,286308,678 shares of our common stock at a weighted-average price of $36.86$37.27 per share and raised $38.2$11.5 million of gross proceeds under the ATM Program. Net proceeds were $37.7$11.3 million after commissions to the selling agents on shares sold and offering costs. As of March 31, 2017, 499,500 shares were available for sale under the ATM Program.

        During the year ended December 31, 2016, we sold 3,324,646 shares of our common stock at a weighted-average price of $34.17 per share and raised $113.6 million of gross proceeds under the ATM Program. Net proceeds were $112.0 million after commissions to the selling agents on shares sold and offering costs. As of December 31, 2016,2018, sales transactions representing 42,41320,400 shares had not settled and wereare not included in shares issued and outstanding on the face of the consolidated balance sheet, but wereare included in the weighted-average shares outstanding in the consolidated statement of operations and in the shares used to calculate our net asset value per share. As of March 31, 2018, there were 1,602,678 shares available for sale under the ATM Program.

        During the year ended December 31, 2017, we sold 3,944,972 shares of our common stock at a weighted-average price of $38.72 per share and raised $152.8 million of gross proceeds under the ATM Program. Net proceeds were $150.9 million after commissions to the selling agents on shares sold and offering costs. As of December 31, 2017, 1,911,356 shares remained available for sale under the ATM Program.

        We anticipate that we will continue to fund our investment activities through existing cash and cash equivalents, cash flows generated through our ongoing operating activities, utilization of available borrowings under our Credit Facility, 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 "Marketablemarketable securities and idle funds investments".investments. The primary investment objective of Marketablemarketable 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 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


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shares of our common stock below the then current net asset value per share of our common stock at our 20172018 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 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 through the Credit Facility, public debt issuances, leverage available through the SBIC program and equity offerings, there


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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 Accounting Standards Update ("ASU") 2014-09,Revenue from Contracts with Customers (Topic 606). ASU 2014-09 supersedes the revenue recognition requirements under ASC 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,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 March 2016, the FASB issued ASU 2016-08,Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarified the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10,Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarified the implementation guidance regarding performance obligations and licensing arrangements. In May 2016, the FASB issued ASU No. 2016-12,Revenue from Contracts with Customers (Topic 606)—Narrow-Scope Improvements and Practical Expedients, which clarified guidance on assessing collectability, presenting sales tax, measuring noncash consideration, and certain transition matters. In December 2016, the FASB issued ASU No. 2016-20,Revenue from Contracts with Customers (Topic 606)—Technical Corrections and Improvements, which provided disclosure relief, and clarified the scope and application of the new revenue standard and related cost guidance. The new guidance will beis 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. We expect to identifySubstantially all of our income is not within the scope of ASU 2014-09. For those income items that are within the scope (primarily fee income), we have similar performance obligations under ASC 606 as compared


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with deliverables and separate units of account previously identified. As a result, we expectour timing of our revenueincome recognition to remainremains the same.

        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 presentedsame 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 accountingthe standard on our consolidated financial statements as none of our investments are measured through the use of the practical expedient.was not material.

        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. While we continue to assess the effect of adoption, we currently believe the most significant change relates to the recognition of a new right-of-use asset and lease liability on our consolidated balance sheet for our office space operating lease. We currently have one operating lease for office space and do not expect a significant change in our leasing activity between now and adoption. See further discussion of our operating lease obligation in "Note M—Commitments and Contingences" in the notes to the consolidated financial statements.

        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.7.—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


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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 iswas 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 consolidated financial statements upon adoption.


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        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 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 March 31, 2017,2018, we had a total of $118.2$138.6 million in outstanding commitments comprised of (i) 2737 investments with commitments to fund revolving loans that had not been fully drawn or term loans with additional commitments not yet funded and (ii) eight11 investments with equity capital commitments that had not been fully called.

        As of March 31, 2017,2018, the future fixed commitments for cash payments in connection with our SBIC debentures, the 4.50% Notes due 2019, the 4.50% Notes due 2022 and the 6.125% Notes and rent obligations under our office lease for each of the next five years and thereafter are as follows:


 2017 2018 2019 2020 2021 Thereafter Total  2018 2019 2020 2021 2022 Thereafter Total 

SBIC debentures

 $ $ $20,000 $55,000 $40,000 $125,200 $240,200  $ $16,000 $55,000 $40,000 $5,000 $197,800 $313,800 

Interest due on SBIC debentures

 5,014 9,228 9,228 8,033 5,484 14,388 51,375  5,862 11,798 10,610 8,054 7,042 23,939 67,305 

Notes 6.125%

      90,655 90,655 

6.125% Notes

      90,655 90,655 

Interest due on 6.125% Notes

 4,165 5,553 5,553 5,553 5,553 6,939 33,316  5,553 5,553 5,553 5,553 5,553 1,386 29,151 

4.50% Notes

   175,000    175,000 

Interest due on 4.50% Notes

 7,875 7,875 7,875    23,625 

4.50% Notes due 2019

  175,000     175,000 

Interest due on 4.50% Notes due 2019

 7,875 7,875     15,750 

4.50% Notes due 2022

     185,000  185,000 

Interest due on 4.50% Notes due 2022

 8,533 8,325 8,325 8,325 8,325  41,833 

Operating Lease Obligation(1)

 46 683 749 763 777 4,959 7,977  346 749 763 777 791 4,239 7,665 

Total

 $17,100 $23,339 $218,405 $69,349 $51,814 $242,141 $622,148  $28,169 $225,300 $80,251 $62,709 $211,711 $318,019 $926,159 

(1)
Operating Lease Obligation means a rent payment obligation under a lease classified as an operating lease and disclosed pursuant to FASB ASC 840, as may be modified or supplemented.

        As of March 31, 2017,2018, we had $288.0$188.0 million in borrowings outstanding under our Credit Facility, and the Credit Facility is currently scheduled to mature in September 2021. The Credit Facility contains


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two, one-year extension options which could extend the maturity to September 2023, subject to lender approval. 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 March 31, 2017,2018, we had a receivable of approximately $2.0$2.8 million due from the External Investment Manager which included approximately $1.3$2.3 million primarily related to operating expenses incurred by us as required to support the External Investment Manager's business and amounts due from the External Investment Manager to Main Street under a tax sharing agreement (see further discussion above in "—Critical Accounting Policies—Income Taxes") and approximately $0.7$0.6 million of dividends declared but not paid by the External Investment Manager.


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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 March 31, 2017, $2.82018, $4.8 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$2.5 million was deferred into phantom Main Street stock units, representing 55,93874,503 shares of our common stock. Including phantom stock units issued through dividend reinvestment, the phantom stock units outstanding as of March 31, 20172018 represented 65,88290,411 shares of our common stock. Any amounts deferred under the plan represented by phantom Main Street stock units will not be issued or included as outstanding on the consolidated statementstatements 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 in our consolidated statementstatements of operations as earned.

        In April 2018, we made a new portfolio investment to facilitate the minority recapitalization of DPI, Inc. ("DPI"), a leading designer, developer, and distributor of a broad assortment of consumer electronics to national retailers under several proprietary brands. We, along with a co-investor, partnered with DPI's management team to facilitate the transaction, with us funding $35.2 million in a combination of first-lien, senior secured term debt and a direct equity investment. Headquartered in St. Louis, Missouri, DPI offers consumer electronics products designed for value-conscious consumers.

        In April 2018, we redeemed the entire principal amount of the issued and outstanding 6.125% Notes effective April 1, 2018 (the "Redemption Date"). The 6.125% Notes were redeemed at par value, plus the accrued and unpaid interest thereon from January 1, 2018, through, but excluding, the Redemption Date. As part of the redemption, we recognized a realized loss of $1.5 million in the second quarter related to the write-off of any remaining unamortized deferred financing costs.

During April 2017,2018, we declared a semi-annual supplemental cash dividend of $0.275 per share payable in June 2017.2018. This supplemental cash dividend is in addition to the previously announced


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regular monthly cash dividends that we declared for the second quarter of 20172018 of $0.185$0.19 per share for each of April, May and June 2017.2018.

        InDuring May 2017,2018, we declared regular monthly dividends of $0.185$0.19 per share for each month of July, August and September of 2017.2018. These regular monthly dividends equal a total of $0.555$0.57 per share for the third quarter of 20172018 and represent a 2.8%2.7% increase from the regular monthly dividends declared for the third quarter of 2016.2017. Including the semi-annual supplemental dividend declared for June 20172018 and the regular monthly dividends declared for the second and third quarters of 2017,2018, we will have paid $20.545$23.375 per share in cumulative dividends since our October 2007 initial public offering.

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. Our risk management systems and procedures are designed to identify and analyze our risk, to set appropriate policies and limits and to continually monitor these risks. Our investment income will be affected by changes in various interest rates, including LIBOR and prime rates, to the extent that any debt investments 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 March 31, 2017,2018, approximately 65%73% of our debt investment portfolio (at cost) bore interest at floating rates, 98%95% of which were subject to contractual minimum interest rates. Our interest expense 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, 4.50% Notes due 2019, 4.50% Notes due 2022 and 6.125% Notes, which comprise the majority of our outstanding debt, are fixed for the life of such debt. As of March 31, 2017,2018, 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


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due to hypothetical base rate changes in interest rates, assuming no changes in our investments and borrowings as of March 31, 2017.2018.

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
(Decrease)
in Interest
Income
 (Increase)
Decrease
in Interest
Expense
 Increase
(Decrease) in Net
Investment
Income
 Increase
(Decrease) in Net
Investment
Income per
Share
 

 (dollars in thousands)
  
  (dollars in thousands)
  
 

(50)

 $(6,312)$940 $(5,372)$(0.09)

(25)

 (3,156) 470 (2,686) (0.05)
25 $2,207 $(720)$1,487 $0.03  3,156 (470) 2,686 0.05 
50 4,556 (1,440) 3,116 0.06  6,312 (940) 5,372 0.09 
100 9,333 (2,880) 6,453 0.12  12,625 (1,880) 10,745 0.18 
150 14,163 (4,320) 9,843 0.18 
200 19,006 (5,760) 13,246 0.24  25,250 (3,760) 21,490 0.36 
300 28,692 (8,640) 20,052 0.36  37,874 (5,640) 32,234 0.55 
400 38,406 (11,520) 26,886 0.49  50,499 (7,520) 42,979 0.73 

        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


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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 March 31, 20172018 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 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, 20162017 that we filed with the SEC on February 24, 2017,23, 2018, and as updated in our registration statement on Form N-2 filed on April 26, 2017.24, 2018.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

        During the three months ended March 31, 2017,2018, we issued 48,67542,423 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 March 31, 20172018 under the dividend reinvestment plan was approximately $1.8$1.6 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
 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: May 5, 20174, 2018

 

/s/ VINCENT D. FOSTER

Vincent D. Foster
Chairman and Chief Executive Officer
(principal executive officer)

Date: May 5, 20174, 2018

 

/s/ BRENT D. SMITH

Brent D. Smith
Chief Financial Officer and Treasurer
(principal financial officer)

Date: May 5, 20174, 2018

 

/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
31.1Certification 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).