Edgar Filing: Main Street Capital CORP

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TABLE OF CONTENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q


(Mark One)
ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2018
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, 8^th Floor Houston, TX (Address of principal executive offices)		77056 (Zip Code)

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 3, 2018 was 59,447,537.

Table of Contents

TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION


Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets—March 31, 2018 (unaudited) and December 31, 2017	1
	Consolidated Statements of Operations (unaudited)—Three months ended March 31, 2018 and 2017	2
	Consolidated Statements of Changes in Net Assets (unaudited)—Three months ended March 31, 2018 and 2017	3
	Consolidated Statements of Cash Flows (unaudited)—Three months ended March 31, 2018 and 2017	4
	Consolidated Schedule of Investments (unaudited)—March 31, 2018	5
	Consolidated Schedule of Investments—December 31, 2017	36
	Notes to Consolidated Financial Statements (unaudited)	67
	Consolidated Schedules of Investments in and Advances to Affiliates (unaudited)—Three months ended March 31, 2018 and 2017	111
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	120
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	141
Item 4.	Controls and Procedures	141

PART II
OTHER INFORMATION


Item 1.	Legal Proceedings	143
Item 1A.	Risk Factors	143
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	143
Item 6.	Exhibits	143
	Signatures	144

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

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

	March 31, 2018			December 31, 2017

	(Unaudited)
ASSETS

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: $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		29,090			51,528
Interest receivable and other assets		40,159			36,343
Receivable for securities sold		14,311			2,382
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	$	2,401,175		$	2,265,395



LIABILITIES
Credit facility	$	188,000		$	64,000
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		15,049			20,168
Payable for securities purchased		21,859			40,716
Interest payable		8,510			5,273
Dividend payable		11,192			11,146
Deferred tax liability, net		8,687			10,553

Total liabilities		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; 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		1,325,998			1,310,780
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		112,651			121,195

Total net assets		1,396,600			1,380,368

Total liabilities and net assets	$	2,401,175		$	2,265,395



NET ASSET VALUE PER SHARE	$	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,

	2018			2017
INVESTMENT INCOME:
Interest, fee and dividend income:
Control investments	$	21,955		$	12,988
Affiliate investments		9,071			9,899
Non-Control/Non-Affiliate investments		24,916			25,002

Total investment income		55,942			47,889
EXPENSES:
Interest		(10,265	)		(8,608	)
Compensation		(5,491	)		(4,430	)
General and administrative		(2,974	)		(2,940	)
Share-based compensation		(2,303	)		(2,269	)
Expenses allocated to the External Investment Manager		2,066			1,524

Total expenses		(18,967	)		(16,723	)

NET INVESTMENT INCOME		36,975			31,166
NET REALIZED GAIN (LOSS):
Control investments		13,094			(682	)
Affiliate investments		—			22,930
Non-Control/Non-Affiliate investments		(5,634	)		5,317
SBIC debentures		(1,374	)		(5,217	)

Total net realized gain		6,086			22,348

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		1,359			5,665

Total net unrealized depreciation		(9,523	)		(16,426	)

INCOME TAXES:
Federal and state income, excise and other taxes		(887	)		(1,252	)
Deferred taxes		1,866			(4,386	)

Income tax benefit (provision)		979			(5,638	)

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	34,517		$	31,450



NET INVESTMENT INCOME PER SHARE—BASIC AND DILUTED	$	0.63		$	0.57



NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE—BASIC AND DILUTED	$	0.59		$	0.57



DIVIDENDS PAID PER SHARE:
Regular monthly dividends	$	0.570		$	0.555
Supplemental dividends		—			—

Total dividends	$	0.570		$	0.555



WEIGHTED AVERAGE SHARES OUTSTANDING—BASIC AND DILUTED		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 Investment Income, Net of Dividends
	Number of Shares			Par Value		Additional Paid-In Capital			Accumulated Net Investment Income, Net of Dividends									Total Net Asset Value
Balances at December 31, 2016		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
Share-based compensation		—			—		2,269			—			—			—			2,269
Purchase of vested stock for employee payroll tax withholding		(8,964	)		—		(343	)		—			—			—			(343	)
Dividend reinvestment		48,675			—		1,806			—			—			—			1,806
Amortization of directors' deferred compensation		—			—		163			—			—			—			163
Forfeited shares of terminated employees		(6,479	)		—		—			—			—			—			—
Dividends to stockholders		—			—		—			(11,039	)		(19,564	)		—			(30,603	)
Net increase (decrease) resulting from operations		—			—		—			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



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

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MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Cash Flows

(dollars in thousands)

(Unaudited)

	Three Months Ended March 31,

	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in net assets resulting from operations	$	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		(340,405	)		(186,922	)
Proceeds from sales and repayments of debt investments in portfolio companies		133,835			184,487
Proceeds from sales and return of capital of equity investments in portfolio companies		32,268			37,041
Net unrealized depreciation		9,523			16,426
Net realized gain		(6,086	)		(22,348	)
Accretion of unearned income		(3,238	)		(4,703	)
Payment-in-kind interest		(576	)		(1,607	)
Cumulative dividends		(562	)		(877	)
Share-based compensation expense		2,303			2,269
Amortization of deferred financing costs		881			658
Deferred tax (benefit) provision		(1,866	)		4,386
Changes in other assets and liabilities:
Interest receivable and other assets		(3,467	)		(2,175	)
Interest payable		3,237			(632	)
Accounts payable and other liabilities		(4,913	)		(2,284	)
Deferred fees and other		1,392			597

Net cash provided by (used in) operating activities		(143,157	)		55,766
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from public offering of common stock, net of offering costs		11,336			37,711
Dividends paid		(31,872	)		(28,593	)
Proceeds from issuance of SBIC debentures		22,000			25,400
Repayments of SBIC debentures		(4,000	)		(25,200	)
Proceeds from credit facility		194,000			83,000
Repayments on credit facility		(70,000	)		(138,000	)
Payment of deferred issuance costs and SBIC debenture fees		(533	)		(616	)
Purchases of vested stock for employee payroll tax withholding		(212	)		(343	)

Net cash provided by (used in) financing activities		120,719			(46,641	)

Net increase (decrease) in cash and cash equivalents		(22,438	)		9,125
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		51,528			24,480

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	29,090		$	33,605



Supplemental cash flow disclosures:
Interest paid	$	6,116		$	8,552
Taxes paid	$	3,320		$	1,677
Non-cash financing activities:
Shares issued pursuant to the DRIP	$	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, 2018

(dollars in thousands)

(unaudited)

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
		10% PIK Secured Debt (Maturity—July 22, 2020)(14)(19)	$	23,828	$	23,828	$	15,120
		Preferred Member Units (8,550,000 units)				8,444		—
		Member Units (45 units)				1		—

						32,273		15,120

ASC Interests, LLC	Recreational and Educational Shooting Facility
		11% Secured Debt (Maturity—July 31, 2018)		1,650		1,647		1,647
		Member Units (1,500 units)				1,500		1,370

						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
		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
		LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.66%, Secured Debt (Maturity—January 9, 2023)(9)		9,920		9,825		9,825
		Preferred Member Units (2,950 units)(8)				4,280		4,280

						14,105		14,105

Café Brazil, LLC	Casual Restaurant Group
		Member Units (1,233 units)(8)				1,742		4,900

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)


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
		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)(8)		7,280	9,780
		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	280

				21,830	24,518

CMS Minerals Investments	Oil & Gas Exploration & Production
		Member Units (CMS Minerals II, LLC) (100 units)(8)		3,294	2,385

Copper Trail Energy Fund I, LP(12)(13)	Investment Partnership
		LP Interests (Fully diluted 30.1%)(8)		2,500	2,500

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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)


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
		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	23,420

				24,412	34,813

Gulf Manufacturing, LLC	Manufacturer of Specialty Fabricated Industrial Piping Products
		Member Units (438 units)(8)		2,980	10,830

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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)


Gulf Publishing Holdings, LLC	Energy Industry Focused Media and Publishing
		12.5% Secured Debt (Maturity—April 29, 2021)	12,698	12,608	12,608
		Member Units (3,681 units)		3,681	4,840

				16,289	17,448

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
		11.5% Secured Debt (Maturity—November 15, 2020)	14,950	14,828	14,950
		Preferred Member Units (5,607 units)(8)		5,952	11,550

				20,780	26,500

Jensen Jewelers of Idaho, LLC	Retail Jewelry Store
		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	5,100

				4,582	8,905

KBK Industries, LLC	Manufacturer of Specialty Oilfield and Industrial Products
		10% Secured Debt (Maturity—September 28, 2020)	75	72	75
		12.5% Secured Debt (Maturity—September 28, 2020)	5,900	5,870	5,900
		Member Units (325 units)(8)		783	4,740

				6,725	10,715

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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)


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
		10% Secured Debt (Maturity—January 15, 2020)	1,750	1,743	1,743
		12% Secured Debt (Maturity—January 15, 2020)	3,900	3,867	3,867
		Member Units (7,874 units)		3,001	2,171
		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	1,290

				10,181	9,851

MSC Adviser I, LLC(16)	Third Party Investment Advisory Services
		Member Units (Fully diluted 100.0%)(8)		—	48,722

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)


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
		12% Secured Debt (Maturity—January 31, 2022)	20,600	20,429	20,429
		Preferred Member Units (406 units)		10,200	10,200

				30,629	30,629

OMi Holdings, Inc.	Manufacturer of Overhead Cranes
		Common Stock (1,500 shares)(8)		1,080	14,290

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)


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 7.00% (Floor 0.50%), Current Coupon 8.69%, Secured Debt (Maturity—November 15, 2021)(9)	16,100	15,978	16,100
		Common Stock (1,962 shares)(8)		2,150	11,660

				18,128	27,760

Principle Environmental, LLC (d/b/a TruHorizon Environmental Solutions)	Noise Abatement Service Provider
		13% Secured Debt (Maturity—April 30, 2020)	7,477	7,359	7,477
		Preferred Member Units (19,631 units)(8)		4,600	13,090
		Warrants (1,018 equivalent units; Expiration—January 31, 2021; Strike price—$0.01 per unit)		1,200	780

				13,159	21,347

Quality Lease Service, LLC	Provider of Rigsite Accommodation Unit Rentals and Related Services
		Zero Coupon Secured Debt (Maturity—June 8, 2020)	7,341	7,341	6,950
		Member Units (1,000 units)		3,293	5,363

				10,634	12,313

River Aggregates, LLC	Processor of Construction Aggregates
		Zero Coupon Secured Debt (Maturity—June 30, 2018)	750	728	728
		Member Units (1,150 units)		1,150	4,610
		Member Units (RA Properties, LLC) (1,500 units)		369	2,670

				2,247	8,008

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)		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, 2018

(dollars in thousands)

(unaudited)

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


Affiliate Investments(6)

AFG Capital Group, LLC	Provider of Rent-to-Own Financing Solutions and Services
		Warrants (42 equivalent units; Expiration—November 7, 2024; Strike price—$0.01 per unit)		$	259	$	900
		Preferred Member Units (186 units)(8)			1,200		3,760

					1,459		4,660

Barfly Ventures, LLC(10)	Casual Restaurant Group
		12% Secured Debt (Maturity—August 31, 2020)	8,715		8,576		8,715
		Options (2 equivalent units)			397		920
		Warrant (1 equivalent unit; Expiration—August 31, 2025; Strike price—$1.00 per unit)			473		520

					9,446		10,155

BBB Tank Services, LLC	Maintenance, Repair and Construction Services to the Above-Ground Storage Tank Market
		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)	4,000		3,883		3,883
		Member Units (800,000 units)			800		550

					5,383		5,133

Boccella Precast Products LLC	Manufacturer of Precast Hollow Core Concrete
		LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.69%, Secured Debt (Maturity—June 30, 2022)(9)	16,582		16,426		16,582
		Member Units (2,160,000 units)(8)			2,160		4,860

					18,586		21,442

Boss Industries, LLC	Manufacturer and Distributor of Air, Power and Other Industrial Equipment
		Preferred Member Units (2,242 units)(8)			2,120		4,740

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)


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
		13% Secured Debt (Mercury Service Group, LLC) (Maturity—July 25, 2021)	1,000	993	1,000
		Preferred Member Units (Mercury Service Group, LLC) (17,742 units)(8)		1,000	1,000

				10,087	11,982

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
		12% Secured Debt (Maturity—October 10, 2019)	4,083	4,063	4,083
		Member Units (65,356 units)(8)		654	3,230

				4,717	7,313

Chandler Signs Holdings, LLC(10)	Sign Manufacturer
		12% Secured Debt (Maturity—July 4, 2021)	4,500	4,470	4,500
		Class A Units (1,500,000 units)		1,500	2,180

				5,970	6,680

Charlotte Russe, Inc(11)	Fast-Fashion Retailer to Young Women
		8.50% Secured Debt (Maturity—February 2, 2023)	7,992	7,992	7,912
		Common Stock (19,041 shares)		3,141	3,141

				11,133	11,053

Condit Exhibits, LLC	Tradeshow Exhibits / Custom Displays Provider
		Member Units (3,936 units)(8)		100	1,950

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)


Congruent Credit Opportunities Funds(12)(13)	Investment Partnership
		LP Interests (Congruent Credit Opportunities Fund II, LP) (Fully diluted 19.8%)(8)		5,210	480
		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
		LP Interests (EIG Global Private Debt Fund-A, L.P.) (Fully diluted 11.1%)(8)		451	403

Freeport Financial Funds(12)(13)	Investment Partnership
		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)		8,558	8,506

				14,532	14,060

Gault Financial, LLC (RMB Capital, LLC)	Purchases and Manages Collection of Healthcare and other Business Receivables
		8% Secured Debt (Maturity—January 1, 2019)	12,483	12,483	11,532
		Warrants (29,032 equivalent units; Expiration—February 9, 2022; Strike price—$0.01 per unit)		400	—

				12,883	11,532

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)


Guerdon Modular Holdings, Inc.	Multi-Family and Commercial Modular Construction Company
		LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 10.19%, Secured Debt (Maturity—March 1, 2019)(9)	400	394	394
		13% Secured Debt (Maturity—March 1, 2019)	10,988	10,926	10,926
		Preferred Stock (404,998 shares)		1,140	—
		Common Stock (212,033 shares)		2,983	—

				15,443	11,320

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
		10.5% Secured Debt (Maturity—December 2, 2021)	14,300	14,181	14,300
		Preferred Member Units (226 units)(8)		2,850	6,223
		Preferred Member Units (HRS Services, ULC) (226 units)(8)		150	328

				17,181	20,851

Houston Plating and Coatings, LLC	Provider of Plating and Industrial Coating Services
		8% Unsecured Convertible Debt (Maturity—May 1, 2022)	3,000	3,000	3,200
		Member Units (315,756 units)(8)		2,179	6,660

				5,179	9,860

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
		LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 10.20%, Secured Debt (Maturity—June 7, 2022)(9)	18,960	18,779	18,779
		Member Units (Milton Meisler Holdings LLC) (48,555 units)		4,855	5,570

				23,634	24,349

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)


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
		12% Secured Debt (Maturity—November 13, 2018)	12,559	12,515	12,515
		Class C Preferred Stock (Fully diluted 10.0%; 10% cumulative)(8)(19)		3,102	3,102

				15,617	15,617

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)		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, 2018

(dollars in thousands)

(unaudited)

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)(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
		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
		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 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
		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
		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
		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
		LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 8.29%, Secured Debt (Maturity—December 8, 2021)(9)		15,592		14,964		15,588

Anchor Hocking, LLC(11)	Household Products Manufacturer
		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		3,718

						7,137		5,944

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)


Apex Linen Service, Inc.	Industrial Launderers
		LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.66%, Secured Debt (Maturity—October 30, 2022)(9)	2,400	2,400	2,400
		16% Secured Debt (Maturity—October 30, 2022)	14,416	14,349	14,349

				16,749	16,749

Arcus Hunting LLC.(10)	Manufacturer of Bowhunting and Archery Products and Accessories
		LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.69%, Secured Debt (Maturity—November 13, 2019)(9)	14,175	14,091	14,175

Arise Holdings, Inc.(10)	Tech-Enabled Business Process Outsourcing
		Preferred Stock (1,000,000 shares)		1,000	1,000

ATI Investment Sub, Inc.(11)	Manufacturer of Solar Tracking Systems
		LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 9.13%, Secured Debt (Maturity—June 22, 2021)(9)	7,114	6,974	7,106

ATX Networks Corp.(11)(13)(21)	Provider of Radio Frequency Management Equipment
		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
		Common Stock (553 shares)		400	1,470

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

				16,066	16,148

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)


Bluestem Brands, Inc.(11)	Multi-Channel Retailer of General Merchandise
		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
		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
		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 0.8%)(8)		1,000	1,063

				13,000	11,526

Brundage-Bone Concrete Pumping, Inc.(11)	Construction Services Provider
		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
		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
		13% Secured Debt (Maturity—March 25, 2021)(14)	6,266	5,206	1,432

CDHA Management, LLC(10)	Dental Services
		LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.76%, Secured Debt (Maturity—December 5, 2021)(9)	5,062	5,006	5,062

Central Security Group, Inc.(11)	Security Alarm Monitoring Service Provider
		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, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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
		11.5% Current / 1% PIK Secured Debt (Maturity—June 22, 2023)(19)	7,247	7,247	7,247
		Warrants (915,734 equivalent units; Expiration—December 23, 2023; Strike price—$1.50 per unit)		474	10

				7,721	7,257

Digital River, Inc.(11)	Provider of Outsourced e-Commerce Solutions and Services
		LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 8.61%, Secured Debt (Maturity—February 12, 2021)(9)	10,146	10,052	10,146

Drilling Info Holdings, Inc.	Information Services for the Oil and Gas Industry
		Common Stock (3,788,865 shares)(8)		—	9,010

EnCap Energy Fund Investments(12)(13)	Investment Partnership
		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%)(8)		2,072	1,122
		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)		6,870	6,933
		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)		3,015	2,716

				25,625	21,141

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 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, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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
		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
		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 10.27%, Secured Debt (Maturity—April 29, 2022)(9)	3,915	3,775	3,974

				12,975	13,325

GoWireless Holdings, Inc.(11)	Provider of Wireless Telecommunications Carrier Services
		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
		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
		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)	2,055	2,040	226

				6,790	3,769

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)


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, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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)		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.
(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, 2018. As noted in this schedule, 69% of the loans (based on the par amount) contain LIBOR floors which range between 0.50% and 2.25%, with a weighted-average LIBOR floor of approximately 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, 2017

(dollars in thousands)

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
		5% Current / 5% PIK Secured Debt (Maturity—July 22, 2020)(19)	$	23,828	$	23,828	$	17,150
		Preferred Member Units (8,248,500 units)				8,142		—
		Member Units (45 units)				1		—

						31,971		17,150

ASC Interests, LLC	Recreational and Educational Shooting Facility
		11% Secured Debt (Maturity—July 31, 2018)		1,800		1,795		1,795
		Member Units (1,500 units)				1,500		1,530

						3,295		3,325

ATS Workholding, LLC(10)	Manufacturer of Machine Cutting Tools and Accessories
		5% Secured Debt (Maturity—November 16, 2021)		3,726		3,249		3,249
		Preferred Member Units (3,725,862 units)				3,726		3,726

						6,975		6,975

Bond-Coat, Inc.	Casing and Tubing Coating Services
		12% Secured Debt (Maturity—December 28, 2017)(17)		11,596		11,596		11,596
		Common Stock (57,508 shares)				6,350		9,370

						17,946		20,966

Café Brazil, LLC	Casual Restaurant Group
		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		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, 2017

(dollars in thousands)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


Clad-Rex Steel, LLC	Specialty Manufacturer of Vinyl-Clad Metal
		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)(8)		7,280	9,500
		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	280

				21,829	24,243

CMS Minerals Investments	Oil & Gas Exploration & Production
		Member Units (CMS Minerals II, LLC) (100 units)(8)		3,440	2,392

Copper Trail Energy Fund I, LP(12)(13)	Investment Partnership
		LP Interests (Fully diluted 30.1%)		2,500	2,500

Datacom, LLC	Technology and Telecommunications Provider
		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)(19)	12,349	12,311	11,110
		Class A Preferred Member Units		1,181	730
		Class B Preferred Member Units (6,453 units)		6,030	—

				21,097	13,415

Gamber-Johnson Holdings, LLC	Manufacturer of
	Ruggedized Computer
	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

				38,057	46,770

Garreco, LLC	Manufacturer and Supplier of Dental Products
		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	1,940

				6,643	7,383

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)


GRT Rubber Technologies LLC	Manufacturer of Engineered Rubber Products
		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	21,970

				24,615	33,573

Gulf Manufacturing, LLC	Manufacturer of Specialty Fabricated Industrial Piping Products
		Member Units (438 units)(8)		2,980	10,060

Gulf Publishing Holdings, LLC	Energy Industry Focused Media and Publishing
		LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.86%, Secured Debt (Maturity—September 30, 2020)(9)	80	80	80
		12.5% Secured Debt (Maturity—April 29, 2021)	12,800	12,703	12,703
		Member Units (3,681 units)		3,681	4,840

				16,464	17,623

Harborside Holdings, LLC	Real Estate Holding Company
		Member units (100 units)		6,206	9,400

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	3,580

HW Temps LLC	Temporary Staffing Solutions
		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)		3,942	3,940

				13,860	13,858

Hydratec, Inc.	Designer and Installer of Micro-Irrigation Systems
		Common Stock (7,095 shares)(8)		7,095	15,000

IDX Broker, LLC	Provider of Marketing and CRM Tools for the Real Estate Industry
		11.5% Secured Debt (Maturity—November 15, 2020)	15,250	15,116	15,250
		Preferred Member Units (5,607 units)(8)		5,952	11,660

				21,068	26,910

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)


Jensen Jewelers of Idaho, LLC	Retail Jewelry Store
		Prime Plus 6.75% (Floor 2.00%), Current Coupon 11.00%, Secured Debt (Maturity—November 14, 2019)(9)	3,955	3,917	3,955
		Member Units (627 units)(8)		811	5,100

				4,728	9,055

KBK Industries, LLC	Manufacturer of Specialty Oilfield and Industrial Products
		10% Secured Debt (Maturity—September 28, 2020)	375	372	375
		12.5% Secured Debt (Maturity—September 28, 2020)	5,900	5,867	5,900
		Member Units (325 units)(8)		783	4,420

				7,022	10,695

Lamb Ventures, LLC	Aftermarket Automotive Services Chain
		11% Secured Debt (Maturity—July 1, 2022)	9,942	9,890	9,942
		Preferred Equity (non-voting)		400	400
		Member Units (742 units)(8)		5,273	6,790
		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

				16,616	18,084

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 12.48%, Secured Debt (Maturity—July 28, 2022)(9)	23,360	23,143	23,143
		Member Units (657,113 units)		14,700	14,700

				37,843	37,843

MH Corbin Holding LLC	Manufacturer and Distributor of Traffic Safety Products
		13% Secured Debt (Maturity—August 31, 2020)	12,600	12,526	12,526
		Preferred Member Units (4,000 shares)		6,000	6,000

				18,526	18,526

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)


Mid-Columbia Lumber Products, LLC	Manufacturer of Finger-Jointed Lumber Products
		10% Secured Debt (Maturity—January 15, 2020)	1,398	1,390	1,390
		12% Secured Debt (Maturity—January 15, 2020)	3,900	3,863	3,863
		Member Units (5,714 units)		2,405	1,575
		9.5% Secured Debt (Mid-Columbia Real Estate, LLC) (Maturity—May 13, 2025)	791	791	791
		Member Units (Mid-Columbia Real Estate, LLC) (500 units)(8)		790	1,290

				9,239	8,909

MSC Adviser I, LLC(16)	Third Party Investment Advisory Services
		Member Units (Fully diluted 100.0%)(8)		—	41,768

Mystic Logistics Holdings, LLC	Logistics and Distribution Services Provider for Large Volume Mailers
		12% Secured Debt (Maturity—August 15, 2019)	7,768	7,696	7,696
		Common Stock (5,873 shares)		2,720	6,820

				10,416	14,516

NAPCO Precast, LLC	Precast Concrete Manufacturing
		LIBOR Plus 8.50%, Current Coupon 9.98%, Secured Debt (Maturity—May 31, 2019)	11,475	11,439	11,475
		Member Units (2,955 units)(8)		2,975	11,670

				14,414	23,145

NRI Clinical Research, LLC	Clinical Research Service Provider
		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—January 15, 2018)	3,865	3,865	3,865
		Warrants (251,723 equivalent units; Expiration—September 8, 2021; Strike price—$0.01 per unit)		252	500
		Member Units (1,454,167 units)		765	2,500

				5,282	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 (65,208 units)(8)		3,717	3,250

				10,093	9,626

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)


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
		Common Stock (1,500 shares)(8)		1,080	14,110

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 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	12,440

				18,122	28,540

Principle Environmental, LLC (d/b/a TruHorizon Environmental Solutions)	Noise Abatement Service Provider
		13% Secured Debt (Maturity—April 30, 2020)	7,477	7,347	7,477
		Preferred Member Units (19,631 units)		4,600	11,490
		Warrants (1,018 equivalent units; Expiration—January 31, 2021; Strike price—$0.01 per unit)		1,200	650

				13,147	19,617

Quality Lease Service, LLC	Provider of Rigsite Accommodation Unit Rentals and Related Services
		Zero Coupon Secured Debt (Maturity—June 8, 2020)	7,341	7,341	6,950
		Member Units (1,000 units)		2,868	4,938

				10,209	11,888

River Aggregates, LLC	Processor of Construction Aggregates
		Zero Coupon Secured Debt (Maturity—June 30, 2018)	750	707	707
		Member Units (1,150 units)		1,150	4,610
		Member Units (RA Properties, LLC) (1,500 units)		369	2,559

				2,226	7,876

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)		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
		9% Secured Debt (Maturity—October 2, 2018)	2,924		2,923		2,410
		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		2,389

					8,819		4,799

Uvalco Supply, LLC	Farm and Ranch Supply Store
		9% Secured Debt (Maturity—January 1, 2019)	348		348		348
		Member Units (1,867 units)(8)			3,579		3,880

					3,927		4,228

Vision Interests, Inc.	Manufacturer / Installer of Commercial Signage
		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
		Common Stock (1,126,242 shares)			3,706		—

					9,503		5,797

Ziegler's NYPD, LLC	Casual Restaurant Group
		6.5% Secured Debt (Maturity—October 1, 2019)	1,000		996		996
		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		3,220

					7,480		7,266

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, 2017

(dollars in thousands)

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


Affiliate Investments(6)

AFG Capital Group, LLC	Provider of Rent-to-Own Financing Solutions and Services
		Warrants (42 equivalent units; Expiration—November 7, 2024; Strike price—$0.01 per unit)		$	259	$	860
		Preferred Member Units (186 units)(8)			1,200		3,590

					1,459		4,450

Barfly Ventures, LLC(10)	Casual Restaurant Group
		12% Secured Debt (Maturity—August 31, 2020)	8,715		8,572		8,715
		Options (2 equivalent units)			397		920
		Warrant (1 equivalent unit; Expiration—August 31, 2025; Strike price—$1.00 per unit)			473		520

					9,442		10,155

BBB Tank Services, LLC	Maintenance, Repair and Construction Services to the Above-Ground Storage Tank Market
		LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.36%, Secured Debt (Maturity—April 8, 2021)(9)	800		778		778
		15% Secured Debt (Maturity—April 8, 2021)	4,000		3,876		3,876
		Member Units (800,000 units)			800		500

					5,454		5,154

Boccella Precast Products LLC	Manufacturer of Precast Hollow Core Concrete
		LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.34%, Secured Debt (Maturity—June 30, 2022)(9)	16,400		16,230		16,400
		Member Units (2,160,000 units)			2,160		3,440

					18,390		19,840

Boss Industries, LLC	Manufacturer and Distributor of Air, Power and Other Industrial Equipment
		Preferred Member Units (2,242 units)(8)			2,080		3,930

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)


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
		13% Secured Debt (Mercury Service Group, LLC) (Maturity—July 25, 2021)	1,000	992	1,000
		Preferred Member Units (Mercury Service Group, LLC) (17,742 units)(8)		1,000	1,000

				10,008	11,404

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
		12% Secured Debt (Maturity—October 10, 2019)	4,083	4,060	4,083
		Member Units (65,356 units)(8)		654	3,230

				4,714	7,313

Chandler Signs Holdings, LLC(10)	Sign Manufacturer
		12% Secured Debt (Maturity—July 4, 2021)	4,500	4,468	4,500
		Class A Units (1,500,000 units)(8)		1,500	2,650

				5,968	7,150

Condit Exhibits, LLC	Tradeshow Exhibits / Custom Displays Provider
		Member Units (3,936 units)(8)		100	1,950

Congruent Credit Opportunities Funds(12)(13)	Investment Partnership
		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)		17,869	18,632

				23,599	20,147

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)


Dos Rios Partners(12)(13)	Investment Partnership
		LP Interests (Dos Rios Partners, LP) (Fully diluted 20.2%)		5,996	7,165
		LP Interests (Dos Rios Partners—A, LP) (Fully diluted 6.4%)		1,904	1,889

				7,900	9,054

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	1,790

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 (EIG Global Private Debt Fund-A, L.P.) (Fully diluted 11.1%)(8)		1,103	1,055

Freeport Financial Funds(12)(13)	Investment Partnership
		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)		8,558	8,506

				14,532	14,120

Gault Financial, LLC (RMB Capital, LLC)	Purchases and Manages Collection of Healthcare and other Business Receivables
		10.5% Secured Debt (Maturity—January 1, 2019)	12,483	12,483	11,532
		Warrants (29,032 equivalent units; Expiration—February 9, 2022; Strike price—$0.01 per unit)		400	—

				12,883	11,532

Guerdon Modular Holdings, Inc.	Multi-Family and Commercial Modular Construction Company
		13% Secured Debt (Maturity—August 13, 2019)	10,708	10,632	10,632
		Preferred Stock (404,998 shares)		1,140	—
		Common Stock (212,033 shares)		2,983	—

				14,755	10,632

Harris Preston Fund Investments(12)(13)	Investment Partnership
		LP Interests (HPEP 3, L.P.) (Fully diluted 9.9%)		943	943

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)


Hawk Ridge Systems, LLC(13)	Value-Added Reseller of Engineering Design and Manufacturing Solutions
		11% Secured Debt (Maturity—December 2, 2021)	14,300	14,175	14,300
		Preferred Member Units (226 units)(8)		2,850	3,800
		Preferred Member Units (HRS Services, ULC) (226 units)(8)		150	200

				17,175	18,300

Houston Plating and Coatings, LLC	Provider of Plating and Industrial Coating Services
		8% Unsecured Convertible Debt (Maturity—May 1, 2022)	3,000	3,000	3,200
		Member Units (315,756 units)		2,179	6,140

				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
		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
		12% PIK Secured Debt (Maturity—June 30, 2021)(19)	5,094	5,094	5,094
		10% PIK Unsecured Debt (Maturity—June 30, 2021)(19)	48	48	48
		Preferred Stock (912 shares)		1,981	—
		Warrants (5,333 equivalent shares; Expiration—April 18, 2021; Strike price—$0.01 per share)		1,919	—

				9,042	5,142

OPI International Ltd.(13)	Provider of Man Camp and Industrial Storage Services
		Common Stock (20,766,317 shares)		1,371	—

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)


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
		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
		12% Secured Debt (Maturity—November 13, 2018)	12,783	12,722	12,722
		Class C Preferred Stock (Fully diluted 10.0%; 10% cumulative)(8)(19)		3,027	3,027

				15,749	15,749

UniTek Global Services, Inc.(11)	Provider of Outsourced Infrastructure Services
		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 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)(19)	865	865	865
		Preferred Stock (2,596,567 shares; 19% cumulative)(8)(19)		2,858	2,850
		Preferred Stock (4,935,377 shares; 13.5% cumulative)(8)(19)		7,361	7,320
		Common Stock (1,075,992 shares)		—	2,490

				19,750	22,197

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)		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, 2017

(dollars in thousands)

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, 2017

(dollars in thousands)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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, 2017

(dollars in thousands)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


Berry Aviation, Inc.(10)	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
		LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 9.69%, Secured Debt (Maturity—March 9, 2022)(9)	15,325	15,060	15,192
		Member Units (1,050,000 units)		1,050	1,000

				16,110	16,192

Bluestem Brands, Inc.(11)	Multi-Channel Retailer of General Merchandise
		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
		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
		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 0.8%)(8)		1,000	1,063

				13,000	11,391

Brundage-Bone Concrete Pumping, Inc.(11)	Construction Services Provider
		10.375% Secured Debt (Maturity—September 1, 2023)	3,000	2,987	3,180

Cadence Aerospace LLC(10)	Aerostructure Manufacturing
		LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.91%, Secured Debt (Maturity—November 14, 2023)(9)	15,000	14,853	14,853

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)


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, 2017

(dollars in thousands)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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
		11.5% Current / 1% PIK Secured Debt (Maturity—June 22, 2023)(19)	7,229	7,229	7,229
		Warrants (915,734 equivalent units; Expiration—December 23, 2023; Strike price—$1.50 per unit)		474	10

				7,703	7,239

Digital River, Inc.(11)	Provider of Outsourced e-Commerce Solutions and Services
		LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 8.08%, Secured Debt (Maturity—February 12, 2021)(9)	9,313	9,266	9,337

Drilling Info Holdings, Inc.	Information Services for the Oil and Gas Industry
		Common Stock (3,788,865 shares)(8)		—	8,610

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)


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, 2017

(dollars in thousands)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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, 2017

(dollars in thousands)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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, 2017

(dollars in thousands)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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, 2017

(dollars in thousands)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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, 2017

(dollars in thousands)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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, 2017

(dollars in thousands)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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, 2017

(dollars in thousands)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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, 2017

(dollars in thousands)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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, 2017

(dollars in thousands)

Portfolio Company(1)(20)	Business Description	Type of Investment(2)(3)(27)


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

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)


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

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)		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, 2017. As noted in this schedule, 67% of the loans (based on the par amount) contain LIBOR floors which range between 0.50% and 2.25%, with a weighted-average LIBOR floor of approximately 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.

Table of Contents

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.

Table of Contents

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 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.

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.

Table of Contents

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, 2018 and 2017, and financial position as of March 31, 2018 and December 31, 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, 2018 and 2017 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, 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 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 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 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)."

Table of Contents

MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Portfolio Investment Classification

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 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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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, privately 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 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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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 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

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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. 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, 2018 and 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 18% of the total LMM portfolio at fair value as of March 31, 2018 and 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% of the Middle Market portfolio investments as of both March 31, 2018 and December 31, 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.

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 six 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. 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, 2018 and 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 44% of the total Private Loan portfolio at fair value as of March 31, 2018 and 2017, respectively.

For valuation purposes, all of Main Street's Other Portfolio investments are non-control investments. Main Street's Other Portfolio investments comprised 4.4% and 4.8% of Main Street's Investment Portfolio at fair value as of March 31, 2018 and December 31, 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 these 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 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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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, 2018 and December 31, 2017 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, 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, 2018, cash balances totaling $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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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 2.3% 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.9. below), these non-cash sources of income may need to be paid out to stockholders in the form of distributions, even though Main Street may not have collected the PIK interest and cumulative dividends in cash. Main Street stops accruing PIK interest and cumulative dividends and writes off any accrued and uncollected interest and dividends in arrears when it determines that such PIK interest and dividends in arrears are no longer collectible. For the three months ended March 31, 2018 and 2017, (i) approximately 1.0% and 3.4%, respectively, of Main Street's total investment income was attributable to PIK interest income not paid currently in cash and (ii) approximately 1.0% and 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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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,

	2018		2017
	(dollars in thousands)
Interest, fee and dividend income:
Interest income	$	39,612	$	38,463
Dividend income		13,831		6,982
Fee income		2,499		2,444

Total interest, fee and dividend income	$	55,942	$	47,889

5. Deferred Financing Costs

Deferred financing costs 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), as well as the commitment fees and leverage fees (approximately 3.4% of the 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.

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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income based on the effective interest method over the life of the debt investment. The actual collection of this interest is deferred until the time of debt principal repayment.

Main Street may also purchase debt securities at a discount or at a premium to the par value of the debt security. In the case of a purchase at a discount, Main Street records the investment at the par value of the debt security net of the discount, and the discount is accreted into interest income based on the effective interest method over the life of the debt investment. In the case of a purchase at a premium, Main Street records the investment at the par value of the debt security plus the premium, and the premium is amortized as a reduction to interest income based on the effective interest method over the life of the debt investment.

To maintain RIC tax treatment (as discussed in Note B.9. below), these non-cash sources of income may need to be paid out to stockholders in the form of distributions, even though Main Street may not have collected the interest income. For the three months ended March 31, 2018 and 2017, approximately 2.9% and 3.5%, 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.

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.

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.

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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. The 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.

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.

10. Net Realized Gains or Losses and Net 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 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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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 Unrealized Appreciation (Depreciation)—SBIC debentures" as part of the fair value adjustment. Interest incurred in connection with SBIC debentures which are valued at fair value is included in interest expense.

12. Earnings per Share

Basic and diluted per share calculations are computed utilizing the weighted-average number of shares of common stock outstanding for the period. In accordance with ASC 260, Earnings Per Share, the unvested shares of restricted stock awarded pursuant to Main Street's equity compensation plans are participating securities and, therefore, are included in the basic earnings per share calculation. As a result, for all periods presented, there is no difference between diluted earnings per share and basic earnings per share amounts.

13. Recently Issued or Adopted Accounting Standards

In May 2014, the FASB issued 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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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 guidance is effective for the annual reporting period beginning after December 15, 2017, including interim periods within that reporting period. 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 has similar performance obligations as compared with deliverables and separate units of account previously identified. As a result, Main Street's timing of its income recognition remains the same and the adoption of the standard 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 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 was not 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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Fair Value Hierarchy

In accordance with ASC 820, Main Street has categorized its investments based on the priority of the inputs to the valuation technique into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical investments (Level 1) and the lowest priority to unobservable inputs (Level 3).

Investments recorded on Main Street's balance sheet are categorized based on the inputs to the valuation techniques as follows:

Level 1—Investments whose values are based on unadjusted quoted prices for identical assets in an active market that Main Street has the ability to access (examples include investments in active exchange-traded equity securities and investments in most U.S. government and agency securities).

Level 2—Investments whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the investment. Level 2 inputs include the following:

•: Quoted prices for similar assets in active markets (for example, investments in restricted stock);
•: Quoted prices for identical or similar assets in non-active markets (for example, investments in thinly traded public companies);
•: Pricing models whose inputs are observable for substantially the full term of the investment (for example, market interest rate indices); and
•: Pricing models whose inputs are derived principally from, or corroborated by, observable market data through correlation or other means for substantially the full term of the investment.

Level 3—Investments whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement (for example, investments in illiquid securities issued by privately held companies). These inputs reflect management's own assumptions about the assumptions a market participant would use in pricing the investment.

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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As of March 31, 2018 and December 31, 2017, all of Main Street's LMM portfolio investments consisted of illiquid securities issued by privately held companies. As a result, the fair value determination for all of Main Street's LMM portfolio investments primarily consisted of unobservable inputs. As a result, all of Main Street's LMM portfolio investments were categorized as Level 3 as of March 31, 2018 and December 31, 2017.

As of March 31, 2018 and December 31, 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, 2018 and December 31, 2017.

As of March 31, 2018 and December 31, 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, 2018 and December 31, 2017.

As of March 31, 2018 and December 31, 2017, Main Street's Other Portfolio investments consisted of illiquid securities issued by privately 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, 2018 and December 31, 2017.

The fair value determination of each portfolio investment categorized as Level 3 required one or more of the following unobservable inputs:

•: Financial information obtained from each portfolio company, including unaudited statements of operations and balance sheets for the most recent period available as compared to budgeted numbers;
•: Current and projected financial condition of the portfolio company;
•: Current and projected ability of the portfolio company to service its debt obligations;
•: Type and amount of collateral, if any, underlying the investment;
•: Current financial ratios (e.g., fixed charge coverage ratio, interest coverage ratio and net debt/EBITDA ratio) applicable to the investment;
•: Current liquidity of the investment and related financial ratios (e.g., current ratio and quick ratio);
•: Pending debt or capital restructuring of the portfolio company;
•: Projected operating results of the portfolio company;
•: Current information regarding any offers to purchase the investment;
•: Current ability of the portfolio company to raise any additional financing as needed;

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•: Changes in the economic environment which may have a material impact on the operating results of the portfolio company;
•: Internal occurrences that may have an impact (both positive and negative) on the operating performance of the portfolio company;
•: Qualitative assessment of key management;
•: Contractual rights, obligations or restrictions associated with the investment; and
•: Other factors deemed relevant.

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.

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, 2018 and December 31, 2017:

Type of Investment	Fair Value as of March 31, 2018 (in thousands)		Valuation Technique	Significant Unobservable Inputs	Range(3)

Equity investments	$	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)	7.3x	6.0x
Debt investments	$	943,653	Discounted cash flow	Risk adjusted discount factor	7.1% - 16.8%(2)	11.3%	11.3%
				Expected principal recovery percentage	2.9% - 100.0%	99.7%	100.0%
Debt investments	$	695,152	Market approach	Third-party quote	11.0 - 106.5

Total Level 3 investments	$	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 4.0x - 17.5x and the range for risk adjusted discount factor is 4.3% - 35.0%.

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(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, 2017 (in thousands)		Valuation Technique	Significant Unobservable Inputs	Range(3)

Equity investments	$	653,008	Discounted cash flow	WACC	11.1% - 23.2%	13.7%	14.0%
			Market comparable / Enterprise Value	EBITDA multiple(1)	4.3x - 8.5x(2)	7.3x	6.0x
Debt investments	$	858,816	Discounted cash flow	Risk adjusted discount factor	6.7% - 16.1%(2)	11.2%	11.0%
				Expected principal recovery percentage	2.9% - 100.0%	99.8%	100.0%
Debt investments	$	659,481	Market approach	Third-party quote	11.0 - 106.0

Total Level 3 investments	$	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 4.0x - 17.5x and the range for risk adjusted discount factor is 4.3% - 30.0%.
(3): Does not include investments for which the valuation technique does not include the use of the applicable fair value input.

The following tables provide a summary of changes in fair value of Main Street's Level 3 portfolio investments for the three month periods ended March 31, 2018 and 2017 (amounts in thousands):

Type of Investment	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	$	1,518,297	$	—	$	(154,935	)	$	270,617	$	11,615		$	(3,648	)	$	(3,141	)	$	1,638,805
Equity		641,493		—		(17,191	)		51,027		(19,069	)		4,153			3,141			663,554
Equity Warrant		11,515		—		—			—		—			160			—			11,675

	$	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, 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	$	1,427,823	$	—	$	(190,366	)	$	175,026	$	1,340		$	(10,108	)	$	(6,056	)	$	1,397,659
Equity		549,453		—		(9,119	)		25,691		(19,775	)		11,876			6,056			564,182
Equity Warrant		17,550		—		(1,673	)		331		(1,107	)		166			—			15,267

	$	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, 2018 and December 31, 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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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.

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, 2018 and December 31, 2017 (amounts in thousands):

Type of Instrument		Fair Value as of March 31, 2018			Valuation Technique		Significant Unobservable Inputs		Range		Weighted Average

SBIC debentures		$	44,623		Discounted cash flow		Estimated market interest rates		4.9% - 5.7%			5.1%

Type of Instrument		Fair Value as of December 31, 2017			Valuation Technique		Significant Unobservable Inputs		Range			Weighted Average

SBIC debentures		$	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, 2018 and 2017 (amounts in thousands):

Type of Instrument	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	$	48,608	$	(4,000	)	$	1,374	$	—	$	(1,359	)	$	44,623

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

SBIC debentures at fair value	$	74,803	$	(25,200	)	$	5,217	$	—	$	(5,665	)	$	49,155

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(Unaudited)

At March 31, 2018 and December 31, 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

			(in thousands)
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	$	1,049,772	$	—	$	—	$	1,049,772
Middle Market portfolio investments		617,941		—		—		617,941
Private Loan portfolio investments		496,533		—		—		496,533
Other Portfolio investments		101,066		—		—		101,066
External Investment Manager		48,722		—		—		48,722

Total investments	$	2,314,034	$	—	$	—	$	2,314,034



SBIC debentures at fair value	$	44,623	$	—	$	—	$	44,623

			Fair Value Measurements

			(in thousands)
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	$	948,196	$	—	$	—	$	948,196
Middle Market portfolio investments		609,256		—		—		609,256
Private Loan portfolio investments		467,475		—		—		467,475
Other Portfolio investments		104,610		—		—		104,610
External Investment Manager		41,768		—		—		41,768

Total investments	$	2,171,305	$	—	$	—	$	2,171,305



SBIC debentures at fair value	$	48,608	$	—	$	—	$	48,608

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

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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 $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 relationships, management expertise and capital raising capabilities. Main Street allocates 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, 2018 and 2017 are net of expenses allocated to the External Investment Manager of $2.1 million and $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, 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, 2018 and December 31, 2017 (this information excludes

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the Other Portfolio investments and the External Investment Manager which are discussed further below):

	As of March 31, 2018

	LMM(a)		Middle Market		Private Loan
	(dollars in millions)
Number of portfolio companies		73		59		55
Fair value	$	1,049.8	$	617.9	$	496.5
Cost	$	898.9	$	629.9	$	521.6
% of portfolio at cost—debt		67.7%		96.7%		93.7%
% of portfolio at cost—equity		32.3%		3.3%		6.3%
% of debt investments at cost secured by first priority lien		98.4%		91.0%		94.3%
Weighted-average annual effective yield(b)		12.1%		9.2%		9.4%
Average EBITDA(c)	$	4.8	$	86.3	$	43.0

(a): At March 31, 2018, Main Street had equity ownership in approximately 97% of its LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was approximately 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. The 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 six LMM portfolio companies and three Private Loan portfolio companies, as EBITDA is not a meaningful valuation metric for Main Street's investments in these portfolio companies, and those portfolio companies whose primary purpose is to own real estate.

	As of 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, Main Street had equity ownership in approximately 97% of its LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was approximately 39%.

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(b): The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of 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. The 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 six 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, and those portfolio companies whose primary purpose is to own real estate.

As of March 31, 2018, Main Street had Other Portfolio investments in eleven companies, collectively totaling approximately $101.1 million in fair value and approximately $107.1 million in cost basis and which comprised approximately 4.4% of Main Street's Investment Portfolio at fair value. As of 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 $41.8 million, which comprised approximately 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, 2018 and December 31, 2017 (this information excludes the Other Portfolio investments and the External Investment Manager).

Cost:

First lien debt	78.7%	79.0%
Equity	16.1%	15.3%
Second lien debt	4.1%	4.5%
Equity warrants	0.7%	0.7%
Other	0.4%	0.5%

	100.0%	100.0%

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(Unaudited)

Fair Value:

First lien debt	71.5%	70.5%
Equity	23.7%	24.4%
Second lien debt	3.8%	4.1%
Equity warrants	0.6%	0.6%
Other	0.4%	0.4%

	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, 2018 and December 31, 2017 (this information excludes the Other Portfolio investments and the External Investment Manager). The geographic composition is determined by the location of the corporate headquarters of the portfolio company.

Cost:

Southwest	27.4%	26.1%
West	24.1%	20.7%
Midwest	20.4%	22.3%
Northeast	15.6%	15.2%
Southeast	10.2%	12.8%
Canada	1.4%	1.9%
Other Non-United States	0.9%	1.0%

	100.0%	100.0%

Fair Value:

Southwest	28.4%	26.8%
West	26.0%	23.7%
Midwest	19.1%	20.3%
Northeast	14.9%	14.6%
Southeast	9.4%	11.9%
Canada	1.3%	1.8%
Other Non-United States	0.9%	0.9%

	100.0%	100.0%

Main Street's LMM portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments are in companies conducting business in a variety of industries. The following tables summarize the composition of Main Street's total combined LMM portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments by industry at cost and fair value

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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

as of March 31, 2018 and December 31, 2017 (this information excludes the Other Portfolio investments and the External Investment Manager).

Cost:

Construction & Engineering	8.2%	6.4%
Energy Equipment & Services	7.0%	6.9%
Commercial Services & Supplies	5.4%	4.5%
Media	5.4%	4.4%
Hotels, Restaurants & Leisure	5.1%	6.2%
Specialty Retail	4.8%	5.3%
Machinery	4.8%	5.2%
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	2.8%	3.4%
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	2.2%	1.6%
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	1.5%	1.6%
Health Care Equipment & Supplies	1.3%	2.0%
Internet & Catalog Retail	1.2%	1.3%
Road & Rail	1.2%	1.0%
Auto Components	0.3%	1.9%
Real Estate Management & Development	0.3%	1.0%
Other(1)	5.7%	6.4%

	100.0%	100.0%

(1): Includes various industries with each industry individually less than 1.0% of the total combined LMM portfolio investments, Middle Market portfolio investments and Private Loan portfolio investments at each date.

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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Fair Value:

Construction & Engineering	7.8%	6.3%
Energy Equipment & Services	6.4%	6.2%
Machinery	6.3%	6.4%
Specialty Retail	5.2%	5.3%
Diversified Consumer Services	5.1%	5.9%
Hotels, Restaurants & Leisure	4.9%	5.9%
Commercial Services & Supplies	4.7%	4.1%
Media	4.7%	3.8%
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	2.3%	2.8%
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	1.5%	1.6%
Oil, Gas & Consumable Fuels	1.5%	1.5%
Health Care Equipment & Supplies	1.2%	2.1%
Road & Rail	1.1%	1.0%
Internet & Catalog Retail	1.0%	1.1%
Air Freight & Logistics	0.7%	1.0%
Real Estate Management & Development	0.4%	1.1%
Auto Components	0.3%	1.6%
Other(1)	4.7%	4.4%

	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, 2018 and December 31, 2017, Main Street had no portfolio investment that was greater than 10% of the Investment Portfolio at fair value.

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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

Unconsolidated Significant Subsidiaries

In accordance with Rules 3-09 and 4-08(g) of Regulation S-X, Main Street must determine which of its unconsolidated controlled portfolio companies, if any, are considered "significant subsidiaries." In evaluating these unconsolidated controlled portfolio companies, there are three tests utilized to determine if any of Main Street's Control Investments (as defined in Note A, including those unconsolidated 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, 2018 and December 31, 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.

The following table shows the summarized financial information for CBT Nuggets, LLC:

	As of March 31,		As of December 31,

	2018		2017
	(dollars in thousands)
Balance Sheet Data
Current Assets	$	11,174	$	14,585
Noncurrent Assets		11,601		11,769
Current Liabilities		16,853		17,570
Noncurrent Liabilities		—		—

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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

	Three Months Ended March 31,

	2018		2017
	(dollars in thousands)
Summary of Operations
Total Revenue	$	9,903	$	10,356
Gross Profit		8,951		9,218
Income from Operations		1,820		3,524
Net Income		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 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. 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, 2018 and 2017, the External Investment Manager earned $2.8 million and $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 statements of operations in "Net Unrealized Appreciation (Depreciation)—Portfolio investments."

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 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. Main Street owns the External Investment Manager through the Taxable Subsidiary to allow MSCC to continue to comply with the

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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. As 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, 2018 and 2017, Main Street allocated $2.1 million and $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, 2018 and 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 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 E—SBIC DEBENTURES

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. Main Street, through the funds, has an effective maximum amount of $346.0 million following the prepayment of $4.0 million of existing SBIC debentures as discussed below. SBIC debentures payable were $313.8 million and $295.8 million at March 31, 2018 and December 31, 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, 2018, Main Street issued $22.0 million of SBIC debentures and opportunistically prepaid $4.0 million of existing SBIC debentures as part of an effort to manage the maturity dates of the oldest SBIC debentures, leaving $32.2 million of remaining capacity under Main Street's SBIC licenses. As a result of this prepayment, Main Street recognized a realized loss of $1.4 million due to the previously recognized gain recorded as a result of recording the 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 for affiliated SBIC funds. The weighted-average annual interest rate on the SBIC debentures was 3.7% and 3.6% as of March 31, 2018 and December 31, 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, 2018 was approximately 5.9 years. For the three months ended March 31, 2018 and 2017, Main Street recognized interest expense attributable to the SBIC debentures of $2.9 million and $2.5 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, 2018, the recorded value of the SBIC debentures was $306.2 million which consisted of (i) $44.6 million recorded at fair value, or $1.4 million less than the $46.0 million par value of the SBIC debentures issued in MSC II, (ii) $149.8 million par value of 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) $118.0 million par value of SBIC debentures held in MSC 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, 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 $281.6 million, or $32.2 million less than the $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 $585.0 million from a diversified group of fifteen lenders. The Credit Facility matures in September 2021 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 (1.88% as of March 31, 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 4.75% as of March 31, 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 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, 2018, Main Street had $188.0 million in borrowings outstanding under the Credit Facility. As of March 31, 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 issuance costs, of $1.5 million and $2.5 million, respectively, for the three months ended March 31, 2018 and 2017. As of March 31, 2018, the interest rate on the Credit Facility was 3.5%. The average interest rate for the three months ended March 31, 2018 was 3.5%. As of March 31, 2018, Main Street was in compliance with all financial covenants of the Credit Facility.

NOTE G—NOTES

6.125% 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, were approximately $89.0 million. Main Street listed the 6.125% Notes on the New York Stock Exchange under the trading symbol "MSCA." Main Street maintained 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, 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,

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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 $91.5 million. Main Street recognized interest expense related to the 6.125% Notes, including amortization of unamortized deferred issuance costs, of $1.5 million for each of the three months ended March 31, 2018 and 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, 2018, Main Street was in compliance with these covenants.

4.50% Notes due 2019

In November 2014, Main Street issued $175.0 million in aggregate principal amount of 4.50% unsecured notes due 2019 (the "4.50% 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 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, 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, 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, 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 $176.6 million. Main Street recognized interest expense related to the 4.50% Notes due 2019, including amortization of unamortized deferred issuance costs, of $2.1 million for each of the three months ended March 31, 2018 and 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)

4.50% Notes due 2022

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,

	2018			2017
Per Share Data:
NAV at the beginning of the period	$	23.53		$	22.10
Net investment income(1)		0.63			0.57
Net realized gain(1)(2)		0.10			0.41
Net unrealized depreciation(1)(2)		(0.16	)		(0.30	)
Income tax benefit (provision)(1)(2)		0.02			(0.11	)

Net increase in net assets resulting from operations(1)		0.59			0.57
Dividends paid from net investment income		(0.57	)		(0.21	)
Distributions from capital gains		—			(0.35	)

Total dividends paid		(0.57	)		(0.56	)
Accretive effect of stock offerings (issuing shares above NAV per share)		0.07			0.26
Accretive effect of DRIP issuance (issuing shares above NAV per share)		0.01			0.01
Other(3)		0.04			0.06

NAV at the end of the period	$	23.67		$	22.44



Market value at the end of the period	$	36.90		$	38.27
Shares outstanding at the end of the period		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 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

100

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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

certain per share data based on the shares outstanding as of a period end or transaction date.

	Three Months Ended March 31,

	2018		2017
	(dollars in thousands)
NAV at end of period	$	1,396,600	$	1,243,934
Average NAV	$	1,388,484	$	1,222,708
Average outstanding debt	$	871,205	$	825,155
Ratio of total expenses, including income tax expense, to average NAV(1)(2)		1.30%		1.83%
Ratio of operating expenses to average NAV(2)(3)		1.37%		1.37%
Ratio of operating expenses, excluding interest expense, to average NAV(2)(3)		0.63%		0.66%
Ratio of net investment income to average NAV(2)		2.66%		2.55%
Portfolio turnover ratio(2)		7.11%		8.97%
Total investment return(2)(4)		–5.70%		5.64%
Total return based on change in NAV(2)(5)		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 $0.19 per share for each month of January through March 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.

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)

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, 2018 and 2017.

	Three Months Ended March 31,

	2018			2017
	(estimated, dollars in thousands)
Net increase in net assets resulting from operations	$	34,517		$	31,450
Book tax difference from share-based compensation expense		1,819			1,265
Net unrealized depreciation		9,523			16,426
Income tax provision (benefit)		(979	)		5,638
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)		43,897			52,684
Taxable income earned in prior year and carried forward for distribution in current year		42,357			42,362
Taxable income earned prior to period end and carried forward for distribution next period		(63,938	)		(74,695	)
Dividend payable as of period end and paid in the following period		11,191			10,252

Total distributions accrued or paid to common stockholders	$	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-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. The 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.

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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

For the three months ended March 31, 2018, Main Street recognized a net income tax benefit of $1.0 million, principally consisting of a deferred tax benefit of $1.9 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, 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 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, and 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 net deferred tax liability at March 31, 2018 was $8.7 million compared to $10.6 million at December 31, 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. The net deferred tax liability 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 rate from 35% to 21% as enacted by the Tax Cuts and Jobs Act (See further discussion in Note B.9.). At March 31, 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 generated before December 31, 2017 may be limited in the future under the provisions of the Code.

NOTE J—COMMON STOCK

Main Street maintains 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, 2018, Main Street sold 308,678 shares of its common stock at a weighted-average price of $37.27 per share and raised $11.5 million of gross proceeds under the ATM Program. Net proceeds were $11.3 million after commissions to the selling agents on shares sold and offering costs. As of March 31, 2018, sales transactions representing 20,400 shares had not settled and are not included in shares issued and outstanding on the face of the consolidated balance sheet, but are included in the weighted-average shares outstanding 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.

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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. 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 Equity and Incentive Plan, net of shares forfeited, if any, and the remaining shares of restricted stock available for issuance as of March 31, 2018.


Restricted stock authorized under the plan	3,000,000
Less net restricted stock granted during:
Year ended December 31, 2015	(900	)
Year ended December 31, 2016	(260,514	)
Year ended December 31, 2017	(223,812	)

Restricted stock available for issuance as of March 31, 2018	2,514,774

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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

As of March 31, 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, 2018	280,498

For each of the three months ended March 31, 2018 and 2017, Main Street recognized total share-based compensation expense of $2.3 million, related to the restricted stock issued to Main Street employees and non-employee directors.

As of March 31, 2018, there was $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 1.6 years as of March 31, 2018.

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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

NOTE M—COMMITMENTS AND CONTINGENCIES

At March 31, 2018, Main Street had the following outstanding commitments (in thousands):

	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

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MAIN STREET CAPITAL CORPORATION

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

	Amount

Investments with commitments to fund revolving loans that have not been fully drawn or term loans with additional commitments not yet funded:
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		3,618
Hojeij Branded Foods, LLC		3,422
Arcus Hunting LLC		3,132
CDHA Management, LLC		2,343
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
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
TGP Holdings III LLC		1,255
Gamber-Johnson Holdings, LLC		1,200
NuStep, LLC		1,200
Boccella Precast Products LLC		1,142
KBK Industries, LLC		925
CTVSH, PLLC		800
NRI Clinical Research, LLC		600
ATS Workholding, LLC		523
PPC/SHIFT LLC		500
UniTek Global Services, Inc.		483
Clad-Rex Steel, LLC		400
Gulf Publishing Holdings, LLC		400
Jensen Jewelers of Idaho, LLC		350
OnAsset Intelligence, Inc.		225
BigName Commerce, LLC		101
BBB Tank Services, LLC		80

Total loan commitments	$	72,736

Total commitments	$	138,559

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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, 2018.

Main Street has an operating lease for office space. Total rent expense incurred by Main Street for the three months ended March 31, 2018 and 2017 was $0.2 million and $0.1 million, respectively.

The following table shows future minimum payments under Main Street's operating lease as of March 31, 2018:

For the Years Ended December 31,	Amount

2018	$	346
2019		749
2020		763
2021		777
2022		791
Thereafter		4,239

Total	$	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, 2018, Main Street had a receivable of approximately $2.8 million due from the External Investment Manager which included (i) approximately $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 $0.6 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

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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, 2018, $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, $2.5 million was deferred into phantom Main Street stock units, representing 74,503 shares of Main Street's common stock. Including phantom stock units issued through dividend reinvestment, the phantom stock units outstanding as of March 31, 2018 represented 90,411 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 statements 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 statements 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 2018, Main Street declared a semi-annual supplemental cash dividend of $0.275 per share payable in June 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 2018 of $0.19 per share for each of April, May and June 2018.

During May 2018, Main Street declared regular monthly dividends of $0.19 per share for each month of July, August and September of 2018. These regular monthly dividends equal a total of $0.57 per share for the third quarter of 2018 and represent a 2.7% increase from the regular monthly dividends declared for the third quarter of 2017. Including the semi-annual supplemental dividend declared for June 2018 and the regular monthly dividends declared for the second and third quarters of 2018, Main Street will have paid $23.375 per share in cumulative dividends since its October 2007 initial public offering.

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Schedule 12-14

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments in and Advances to Affiliates
March 31, 2018
(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, 2017 Fair Value		Gross Additions(3)		Gross Reductions(4)		March 31, 2018 Fair Value

*Majority-owned investments*
Café Brazil, LLC	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)		—		(6	)		375		13,280		6		6		13,280
	Member Units		—		280			94		9,500		280		—		9,780
	10% Secured Debt		—		—			30		1,183		—		5		1,178
	Member Units		—		—			—		280		—		—		280

CMS Minerals Investments	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
	Preferred Stock		—		—			—		—		8,400		—		8,400

Gamber-Johnson Holdings, LLC	LIBOR Plus 11.00% (Floor 1.00%)		—		(15	)		744		23,400		15		505		22,910
	Member Units		—		3,160			292		23,370		3,160		—		26,530

GRT Rubber Technologies LLC	LIBOR Plus 9.00% (Floor 1.00%)		—		(7	)		309		11,603		7		217		11,393
	Member Units		—		1,450			308		21,970		1,450		—		23,420

Harborside Holdings, LLC	Member Units		—		—			—		9,400		100		—		9,500

Harris Preston Fund Investments	LP Interests		—		—			—		536		—		—		536

Hydratec, Inc.	Common Stock		7,922		(7,905	)		332		15,000		160		15,160		—

IDX Broker, LLC	11.5% Secured Debt		—		(12	)		446		15,250		12		312		14,950
	Preferred Member Units		—		(110	)		68		11,660		—		110		11,550

Jensen Jewelers of Idaho, LLC	Prime Plus 6.75% (Floor 2.00%)		—		(4	)		50		3,955		4		154		3,805
	Member Units		—		—			113		5,100		—		—		5,100

Lamb Ventures, LLC	11% Secured Debt		—		(10	)		267		9,942		210		1,813		8,339
	Preferred Equity		—		—			—		400		—		—		400
	Member Units		—		(60	)		—		6,790		—		60		6,730
	9.5% Secured Debt		—		—			10		432		—		—		432
	Member Units		—		—			—		520		—		—		520

Mid-Columbia Lumber Products, LLC	10% Secured Debt		—		—			46		1,390		353		—		1,743
	12% Secured Debt		—		—			121		3,863		4		—		3,867
	Member Units		—		—			2		1,575		596		—		2,171
	9.5% Secured Debt		—		—			19		791		—		11		780
	Member Units		—		—			15		1,290		—		—		1,290

MSC Adviser I, LLC	Member Units		—		6,954			573		41,768		6,954		—		48,722

Mystic Logistics Holdings, LLC	12% Secured Debt		—		—			241		7,696		11		206		7,501
	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	12% Secured Debt		—		—			191		6,376		—		—		6,376
	Member Units		—		880			—		3,250		880		—		4,130

PPL RVs, Inc.	LIBOR Plus 7.00% (Floor 0.50%)		—		(7	)		357		16,100		7		7		16,100
	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

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Company	Investment(1)(5)

Vision Interests, Inc.	13% Secured Debt	—	—		95	2,797	4	—	2,801
	Series A Preferred Stock	—	—		—	3,000	—	—	3,000
	Common Stock	—	—		—	—	—	—	—

Ziegler's NYPD, LLC	6.5% Secured Debt	—	—		17	996	1	—	997
	12% Secured Debt	—	—		9	300	—	—	300
	14% Secured Debt	—	—		96	2,750	—	—	2,750
	Warrants	—	—		—	—	—	—	—
	Preferred Member Units	—	—		—	3,220	1	—	3,221

*Other controlled investments*
Access Media Holdings, LLC	10% PIK Secured Debt	—	(2,030	)	—	17,150	—	2,030	15,120
	Preferred Member Units	—	(302	)	—	—	302	302	—
	Member Units	—	—		—	—	—	—	—

ASC Interests, LLC	11% Secured Debt	—	(160	)	51	1,795	3	151	1,647
	Member Units	—	—		—	1,530	—	160	1,370

ATS Workholding, LLC	5% Secured Debt	—	—		75	3,249	486	—	3,735
	Preferred Member Units	—	—		—	3,726	—	—	3,726

Bond-Coat, Inc.	12% Secured Debt	—	—		348	11,596	—	—	11,596
	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	—	(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	12% Secured Debt	—	—		550	18,225	22	1,601	16,646
	Preferred Member Units	—	540		—	650	540	—	1,190

Copper Trail Energy Fund I, LP	LP Interests	—	—		33	2,500	—	—	2,500

Datacom, LLC	8% Secured Debt	—	—		33	1,575	180	—	1,755
	5.25% Current / 5.25% PIK Secured Debt	—	—		330	11,110	168	498	10,780
	Class A Preferred Member Units	—	(510	)	—	730	—	510	220
	Class B Preferred Member Units	—	(498	)	—	—	—	—	—

Garreco, LLC	LIBOR Plus 10.00% (Floor 1.00%)	—	—		162	5,443	5	121	5,327
	Member Units	—	—		—	1,940	—	—	1,940

Gulf Manufacturing, LLC	Member Units	—	770		414	10,060	770	—	10,830

Gulf Publishing Holdings, LLC	LIBOR Plus 9.50% (Floor 1.00%)	—	—		1	80	—	80	—
	12.5% Secured Debt	—	—		405	12,703	7	102	12,608
	Member Units	—	—		—	4,840	—	—	4,840
Harrison Hydra-Gen, Ltd.	Common Stock	—	1,400		—	3,580	1,400	—	4,980

HW Temps LLC	LIBOR Plus 11.00% (Floor 1.00%)	—	—		320	9,918	4	—	9,922
	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

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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, 2017 Fair Value		Gross Additions(3)		Gross Reductions(4)		March 31, 2018 Fair Value

SoftTouch Medical Holdings LLC	LIBOR Plus 9.00% (Floor 1.00%)		—		(30	)		120		7,140		30		7,170		—
	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			—		—			—		—		—		—		—

Total Control investments		$	13,094	$	(22,974	)	$	21,955	$	750,706	$	164,882	$	68,791	$	846,797



*Affiliate Investments*
AFG Capital Group, LLC	Warrants	$	—	$	40		$	—	$	860	$	40	$	—	$	900
	Preferred Member Units		—		170			10		3,590		170		—		3,760

Barfly Ventures, LLC	12% Secured Debt		—		(4	)		267		8,715		4		4		8,715
	Options		—		—			—		920		—		—		920
	Warrants		—		—			—		520		—		—		520

BBB Tank Services, LLC	LIBOR Plus 8.00% (Floor 1.00%)		—		—			20		778		414		492		700
	15% Secured Debt		—		—			157		3,876		7		—		3,883
	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		—		770			90		3,930		810		—		4,740

Bridge Capital Solutions Corporation	13% Secured Debt		—		—			347		5,884		78		—		5,962
	Warrants		—		500			—		3,520		500		—		4,020
	13% Secured Debt		—		—			33		1,000		—		—		1,000
	Preferred Member Units		—		—			33		1,000		—		—		1,000

Buca C, LLC	LIBOR Plus 9.25% (Floor 1.00%)		—		—			560		20,193		11		300		19,904
	Preferred Member Units		—		—			61		4,172		61		—		4,233

CAI Software LLC	12% Secured Debt		—		(3	)		125		4,083		3		3		4,083
	Member Units		—		—			10		3,230		—		—		3,230

Chandler Signs Holdings, LLC	12% Secured Debt		—		(2	)		137		4,500		2		2		4,500
	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

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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, 2017 Fair Value			Gross Additions(3)		Gross Reductions(4)		March 31, 2018 Fair Value

OnAsset Intelligence, Inc.	12% PIK Secured Debt		—		—			153		5,094			153		—		5,247
	10% PIK Secured Debt		—		—			1		48			1		—		49
	Preferred Stock		—		—			—		—			—		—		—
	Warrants		—		—			—		—			—		—		—

OPI International Ltd.	Common Stock		—		—			—		—			—		—		—

PCI Holding Company, Inc.	12% Current/3% PIK Secured Debt		—		—			685		12,593			304		326		12,571
	Preferred Stock		—		(600	)		—		890			—		600		290
	Preferred Stock		—		870			—		2,610			870		—		3,480

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
	LIBOR Plus 7.50% (Floor 1.00%)/1.00% PIK		—		—			4		137			1		—		138
	15% PIK Unsecured Debt		—		—			34		865			32		—		897
	Preferred Stock		—		(8	)		248		7,320			248		8		7,560
	Preferred Stock		—		(6	)		136		2,850			136		6		2,980
	Common Stock		—		190			—		2,490			190		—		2,680

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
	Preferred Member Units		—		—			—		14,000			—		—		14,000
	Warrants		—		(610	)		—		2,080			—		609		1,471

Other
Amounts related to investments
transferred to or from other 1940 Act
classification during the period			—		8,666			—		(7,807	)		—		—		—

Total Affiliate investments		$	—	$	14,238		$	9,071	$	338,854		$	36,118	$	23,319	$	359,460

(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.

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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

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Company	Investment(1)(5)

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

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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

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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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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.

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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, 2017, filed with the Securities and Exchange Commission (the "SEC") on February 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, 2017.

ORGANIZATION

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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 $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 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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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, 2018 and December 31, 2017 (this information excludes the Other Portfolio investments and the External Investment Manager which are discussed further below):

	As of March 31, 2018

	LMM(a)		Middle Market		Private Loan
	(dollars in millions)
Number of portfolio companies		73		59		55
Fair value	$	1,049.8	$	617.9	$	496.5
Cost	$	898.9	$	629.9	$	521.6
% of portfolio at cost—debt		67.7%		96.7%		93.7%
% of portfolio at cost—equity		32.3%		3.3%		6.3%
% of debt investments at cost secured by first priority lien		98.4%		91.0%		94.3%
Weighted-average annual effective yield(b)		12.1%		9.2%		9.4%
Average EBITDA(c)	$	4.8	$	86.3	$	43.0

(a): At March 31, 2018, 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 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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our investments in these portfolio companies, and those portfolio companies whose primary purpose is to own real estate.

	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 six 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.

As of March 31, 2018, we had Other Portfolio investments in eleven companies, collectively totaling approximately $101.1 million in fair value and approximately $107.1 million in cost basis and which comprised approximately 4.4% of our Investment Portfolio (as defined in "—Critical Accounting Policies—Basis of Presentation" below) at fair value. As of December 31, 2017, we 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 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 $41.8 million, which comprised approximately 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 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, 2018 and 2017, the ratio of our total operating expenses, excluding interest expense, as a percentage of our quarterly average total assets was 1.5% and 1.6%, respectively, on an annualized 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. 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, 2018 and 2017, the External Investment Manager earned $2.8 million and $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

Basis of Presentation

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 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, 2018 and 2017 and financial position as of March 31, 2018 and December 31, 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, 2018 and 2017 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, 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.

We 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 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)."

Investment Portfolio Valuation

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, 2018 and December 31, 2017, our Investment Portfolio valued at fair value represented approximately 96% of our total 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" 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, 2018 and December 31, 2017 approximates fair value as of those dates based on the markets in which we operate and other conditions in existence on those reporting dates.

Revenue Recognition

Interest and Dividend Income

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.

Fee Income

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.

Payment-in-Kind ("PIK") Interest and Cumulative Dividends

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 PIK interest and dividends in arrears are no longer collectible. For the three months ended March 31, 2018 and 2017, (i) approximately 1.0% and 3.4%, respectively, of our total investment income was attributable to PIK interest income not paid currently in cash and (ii) approximately 1.0% and 1.8%, respectively, of our total investment income was attributable to cumulative dividend income not paid currently in cash.

Share-Based Compensation

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.

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) 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-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. The 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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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.

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 $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.

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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, and we allocate the related expenses to the External Investment Manager pursuant to the sharing agreement. Our total expenses for the three months ended March 31, 2018 and 2017 are net of expenses allocated to the External Investment Manager of $2.1 million and $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 Manager. For the three months ended March 31, 2018 and 2017, the total contribution to our net investment income was $2.6 million and $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, 2018 and December 31, 2017 (this information excludes the Other Portfolio investments and the External Investment Manager).

Cost:

First lien debt	78.7%	79.0%
Equity	16.1%	15.3%
Second lien debt	4.1%	4.5%
Equity warrants	0.7%	0.7%
Other	0.4%	0.5%

	100.0%	100.0%

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Fair Value:

First lien debt	71.5%	70.5%
Equity	23.7%	24.4%
Second lien debt	3.8%	4.1%
Equity warrants	0.6%	0.6%
Other	0.4%	0.4%

	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, 2017 and "Risk Factors" below for a more complete discussion of the risks involved with investing in our Investment Portfolio.

PORTFOLIO ASSET QUALITY

As of March 31, 2018, our 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, our total Investment Portfolio had five investments on non-accrual status, which comprised approximately 0.2% of its fair value and 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

Comparison of the three months ended March 31, 2018 and March 31, 2017

	Three Months Ended March 31,						Net Change

	2018			2017			Amount			%
	(dollars in thousands)
Total investment income	$	55,942		$	47,889		$	8,053			17%
Total expenses		(18,967	)		(16,723	)		(2,244	)		13%

Net investment income		36,975			31,166			5,809			19%
Net realized gain from investments		7,460			27,565			(20,105	)
Net realized loss from SBIC debentures		(1,374	)		(5,217	)		3,843
Net unrealized appreciation (depreciation) from:
Portfolio investments		(10,882	)		(22,091	)		11,209
SBIC debentures		1,359			5,665			(4,306	)

Total net unrealized appreciation (depreciation)		(9,523	)		(16,426	)		6,903
Income tax benefit (provision)		979			(5,638	)		6,617

Net increase in net assets resulting from operations	$	34,517		$	31,450		$	3,067			10%

	Three Months Ended March 31,				Net Change

	2018		2017		Amount		%
	(dollars in thousands, except per share amounts)
Net investment income	$	36,975	$	31,166	$	5,809		19%
Share-based compensation expense		2,303		2,269		34		1%

Distributable net investment income(a)	$	39,278	$	33,435	$	5,843		17%



Net investment income per share—Basic and diluted	$	0.63	$	0.57	$	0.06		11%



Distributable net investment income per share—Basic and diluted(a)	$	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.

Investment Income

For the three months ended March 31, 2018, total investment income was $55.9 million, a 17% increase over the $47.9 million of total investment income for the corresponding period of 2017. This comparable period increase was principally attributable to a $6.8 million increase in dividend income from Investment Portfolio equity investments and $1.1 million net increase in interest income primarily

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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 when compared to prior year. The $8.1 million increase in total investment income in the three months ended March 31, 2018 includes elevated levels of dividend income activity from certain Investment Portfolio equity investments, partially offset by a decrease of $1.8 million related to lower accelerated prepayment, repricing and other activity for certain Investment Portfolio debt investments when compared to the same period in 2017.

Expenses

For the three months ended March 31, 2018, total expenses increased to $19.0 million from $16.7 million for the corresponding period of 2017. This comparable period increase in operating expenses was principally attributable to (i) a $1.7 million increase in interest 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 $1.1 million increase in compensation expense related to increases in the number of personnel, base compensation levels and incentive compensation accruals, with these increases partially offset by a $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. The ratio of our total operating expenses, excluding interest expense, as a percentage of our quarterly average total assets for the three months ended March 31, 2018 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, 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

Net investment income for the three months ended March 31, 2018 was $37.0 million, or a 19% increase, compared to net investment income of $31.2 million for the corresponding period of 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.

Distributable Net Investment Income

For the three months ended March 31, 2018, distributable net investment income increased 17% to $39.3 million, or $0.67 per share, compared with $33.4 million, or $0.61 per share in the corresponding period of 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, 2018 reflects (i) elevated levels of dividend income activity from certain Investment Portfolio equity investments, (ii) a decrease of approximately $0.03 per share from the comparable period in 2017 attributable to the net decrease in the comparable levels of accelerated prepayment, repricing and other unusual activity for certain Investment Portfolio debt investments and (iii) a greater number of average shares outstanding compared to the corresponding period in 2017 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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Net Increase in Net Assets Resulting from Operations

The net increase in net assets resulting from operations during the three months ended March 31, 2018 was $34.5 million, or $0.59 per share, compared with $31.5 million, or $0.57 per share, during the three months ended March 31, 2017. This $3.1 million improvement from the prior year was primarily the result of (i) a $6.9 million improvement in net unrealized appreciation (depreciation) from portfolio investments and SBIC debentures, including the impact of accounting reversals relating to realized gains/income (losses), (ii) a $6.6 million change in the income tax benefit (provision) from an income tax provision of $5.6 million for the three months ended March 31, 2017 to an income tax benefit of $1.0 million for the three months ended March 31, 2018, (iii) a $5.8 million increase in net investment income as discussed above and (iv) a $3.8 million improvement in the net realized loss from SBIC debentures outstanding at MSC II which had previously been accounted for on the fair value method of accounting, with these increases partially offset by a $20.1 million decrease in the net realized gain from investments to a total net realized gain from investments of $7.5 million for the three months ended March 31, 2018. The net realized gain from investments of $7.5 million for the three months ended March 31, 2018 was primarily the result of (i) the realized gain of $13.1 million resulting from gains on the exits of two LMM investments and (ii) realized gains of $3.2 million due to activity in our Other 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 $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 in 2010.

The following table provides a summary of the total net unrealized depreciation of $9.5 million for the three months ended March 31, 2018:

	Three Months Ended March 31, 2018

	LMM(a)			Middle Market			Private Loan			Other(b)			Total
	(dollars in millions)
Accounting reversals of net unrealized (appreciation) depreciation recognized in prior periods due to net realized (gains)/(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		(3.3	)		(0.3	)		(2.6	)		6.0			(0.2	)

Total net unrealized appreciation (depreciation) relating to portfolio investments	$	(22.1	)	$	8.5		$	(2.9	)	$	5.6		$	(10.9	)



Unrealized appreciation relating to SBIC debentures(c)														1.4

Total net unrealized depreciation													$	(9.5	)

(a): LMM includes unrealized appreciation on 26 LMM portfolio investments and unrealized depreciation on 9 LMM portfolio investments.
(b): Other includes $7.0 million of unrealized appreciation relating to the External Investment Manager, partially offset by $1.0 million of net unrealized depreciation relating to the Other Portfolio.

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(c): The $1.4 million of unrealized appreciation on the SBIC debentures held by MSC II which are accounted for on a fair value basis is due to the accounting reversals of previously recognized unrealized depreciation recorded due to fair value adjustments since the date of acquisition of MSC II on the debentures repaid.

The income tax benefit for the three months ended March 31, 2018 of $1.0 million principally consisted of a deferred tax benefit of $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 loss carryforwards, changes in net unrealized appreciation/depreciation and other temporary book-tax differences, and other current tax expense of $0.9 million related to (i) a $0.4 million accrual for excise tax on our estimated undistributed taxable income and (ii) current tax expense of $0.5 million related to accruals for U.S. federal and state income taxes.

Liquidity and Capital Resources

Cash Flows

For the three months ended March 31, 2018, we experienced a net decrease in cash and cash equivalents in the amount of approximately $22.4 million, which is the net result of approximately $143.2 million of cash used in our operating activities and approximately $120.7 million of cash provided by our financing activities.

During the period, $143.2 million of cash was used in our operating activities, which resulted primarily from (i) cash flows we generated from the operating profits earned through our operating activities totaling $35.8 million, which is our $39.3 million of distributable net investment income, excluding the non-cash effects of the accretion of unearned income of $3.2 million, payment-in-kind interest income of $0.6 million, cumulative dividends of $0.6 million and the amortization expense for deferred financing costs of $0.9 million, (ii) cash uses totaling $345.0 million consisting of (a) $340.4 million for the funding of new portfolio company investments and settlement of accruals for portfolio investments existing as of December 31, 2017, (b) $2.5 million related to increases in other assets and (c) $2.1 million related to decreases in payables and accruals and (iii) cash proceeds totaling $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, 2018, $120.7 million in cash was provided by our financing activities, which principally consisted of (i) $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) $4.0 million in repayment of SBIC debentures, (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 and (iv) $0.5 million for payment of deferred debt issuance costs, SBIC debenture fees and other costs.

Capital Resources

As of March 31, 2018, we had $29.1 million in cash and cash equivalents and $397.0 million of unused capacity under the Credit Facility, which we maintain to support our investment and operating activities. As of March 31, 2018, our net asset value totaled $1,396.6 million, or $23.67 per share.

The Credit Facility, which provides additional liquidity to support our investment and operational activities, provides for total commitments of $585.0 million from a diversified group of fifteen lenders. The Credit Facility matures in September 2021 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 (1.88% as of March 31, 2018) plus (i) 1.875% (or the applicable base rate (Prime Rate of 4.75% as of March 31, 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 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, 2018, we had $188.0 million in borrowings outstanding under the Credit Facility, the interest rate on the Credit Facility was 3.5% and we were in compliance with all financial covenants of the Credit Facility.

Through the Funds, we have the ability to issue SBIC debentures guaranteed by the SBA at favorable interest rates and favorable terms and conditions. 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 following the prepayment of $4.0 million of existing SBIC debentures as discussed below. During the three months ended March 31, 2018, we issued $22.0 million of SBIC debentures and opportunistically prepaid $4.0 million of our existing SBIC debentures as part of an effort to manage the maturity dates of our oldest SBIC debentures, leaving $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. We expect to issue new SBIC debentures under the SBIC program in the future in an amount up to the regulatory maximum amount for affiliated SBIC funds. As of March 31, 2018, through our three wholly owned SBICs, we had $313.8 million of outstanding SBIC debentures guaranteed by the SBA, which bear a weighted-average annual fixed interest rate of approximately 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 5.9 years as of March 31, 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 maintained 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, 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 4.50% Notes (the "4.50% 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 due 2019; 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 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, 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.

In November 2017, we issued $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, 2018, we sold 308,678 shares of our common stock at a weighted-average price of $37.27 per share and raised $11.5 million of gross proceeds under the ATM Program. Net proceeds were $11.3 million after commissions to the selling agents on shares sold and offering costs. As of March 31, 2018, sales transactions representing 20,400 shares had not settled and are not included in shares issued and outstanding on the face of the consolidated balance sheet, but are included in the weighted-average shares outstanding 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, 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 marketable securities and idle funds investments. The primary investment objective of marketable securities and idle funds investments is to generate incremental cash returns on excess cash balances prior to utilizing those funds for investment in our LMM, Middle Market and Private Loan portfolio investments. Marketable securities and idle funds investments generally consist of debt investments, independently rated debt investments, certificates of deposit with financial institutions, diversified bond funds and publicly traded debt and equity investments.

If our common stock trades below our net asset value per share, we will generally not be able to issue additional common stock at the market price unless our stockholders approve such a sale and our Board of Directors makes certain determinations. We did not seek stockholder authorization to sell shares of our common stock below the then current net asset value per share of our common stock at our 2018 annual meeting of stockholders because our common stock price per share had been trading significantly above the 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.

Recently Issued or Adopted Accounting Standards

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; 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 guidance is effective for the annual reporting period beginning after December 15, 2017, including interim periods within that reporting period. Substantially 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 as compared with deliverables and separate units of account previously identified. As a result, our timing of income recognition remains the same and the adoption of the standard 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.

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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 was not 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.

Inflation

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.

Off-Balance Sheet Arrangements

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, 2018, we had a total of $138.6 million in outstanding commitments comprised of (i) 37 investments with commitments to fund revolving loans that had not been fully drawn or term loans with additional commitments not yet funded and (ii) 11 investments with equity capital commitments that had not been fully called.

Contractual Obligations

As of March 31, 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:

	2018		2019		2020		2021		2022		Thereafter		Total

SBIC debentures	$	—	$	16,000	$	55,000	$	40,000	$	5,000	$	197,800	$	313,800
Interest due on SBIC debentures		5,862		11,798		10,610		8,054		7,042		23,939		67,305
6.125% Notes		—		—		—		—		—		90,655		90,655
Interest due on 6.125% Notes		5,553		5,553		5,553		5,553		5,553		1,386		29,151
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)		346		749		763		777		791		4,239		7,665

Total	$	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, 2018, we had $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."

Related Party Transactions

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, 2018, we had a receivable of approximately $2.8 million due from the External Investment Manager which included approximately $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 $0.6 million of dividends declared but not paid by the External Investment Manager.

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, 2018, $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, $2.5 million was deferred into phantom Main Street stock units, representing 74,503 shares of our common stock. Including phantom stock units issued through dividend reinvestment, the phantom stock units outstanding as of March 31, 2018 represented 90,411 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 statements 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 statements of operations as earned.

Recent Developments

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 2018, we declared a semi-annual supplemental cash dividend of $0.275 per share payable in June 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 2018 of $0.19 per share for each of April, May and June 2018.

During May 2018, we declared regular monthly dividends of $0.19 per share for each month of July, August and September of 2018. These regular monthly dividends equal a total of $0.57 per share for the third quarter of 2018 and represent a 2.7% increase from the regular monthly dividends declared for the third quarter of 2017. Including the semi-annual supplemental dividend declared for June 2018 and the regular monthly dividends declared for the second and third quarters of 2018, we will have paid $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, 2018, approximately 73% of our debt investment portfolio (at cost) bore interest at floating rates, 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, 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 due to hypothetical base rate changes in interest rates, assuming no changes in our investments and borrowings as of March 31, 2018.

Basis Point Change	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)
(50)	$	(6,312	)	$	940		$	(5,372	)	$	(0.09	)
(25)		(3,156	)		470			(2,686	)		(0.05	)
25		3,156			(470	)		2,686			0.05
50		6,312			(940	)		5,372			0.09
100		12,625			(1,880	)		10,745			0.18
200		25,250			(3,760	)		21,490			0.36
300		37,874			(5,640	)		32,234			0.55
400		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, 2018 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, 2017 that we filed with the SEC on February 23, 2018, and as updated in our registration statement on Form N-2 filed on April 24, 2018.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended March 31, 2018, we issued 42,423 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, 2018 under the dividend reinvestment plan was approximately $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 4, 2018		/s/ VINCENT D. FOSTER Vincent D. Foster Chairman and Chief Executive Officer (principal executive officer)
Date: May 4, 2018		/s/ BRENT D. SMITH Brent D. Smith Chief Financial Officer and Treasurer (principal financial officer)
Date: May 4, 2018		/s/ SHANNON D. MARTIN Shannon D. Martin Vice President and Chief Accounting Officer (principal accounting officer)

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