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 September 30, 2015
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 or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer ý		Accelerated filer o		Non-accelerated filer o		Smaller reporting company 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 November 6, 2015 was 50,130,534.

Table of Contents

TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION


Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets—September 30, 2015 (unaudited) and December 31, 2014	1
	Consolidated Statements of Operations (unaudited)—Three and nine months ended September 30, 2015 and 2014	2
	Consolidated Statements of Changes in Net Assets (unaudited)—Nine months ended September 30, 2015 and 2014	3
	Consolidated Statements of Cash Flows (unaudited)—Nine months ended September 30, 2015 and 2014	4
	Consolidated Schedule of Investments (unaudited)—September 30, 2015	5
	Consolidated Schedule of Investments—December 31, 2014	34
	Notes to Consolidated Financial Statements (unaudited)	59
	Consolidated Financial Statement Schedule
	Consolidated Schedule of Investments in and Advances to Affiliates for the Nine Months Ended September 30, 2015	101
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	105
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	131
Item 4.	Controls and Procedures	132

PART II
OTHER INFORMATION


Item 1.	Legal Proceedings	133
Item 1A.	Risk Factors	133
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	133
Item 5.	Other Information	133
Item 6.	Exhibits	135
	Signatures	136

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

(in thousands, except shares and per share amounts)

	September 30, 2015			December 31, 2014

	(Unaudited)
ASSETS
Portfolio investments at fair value:
Control investments (cost: $402,302 and $342,847 as of September 30, 2015 and December 31, 2014, respectively)	$	568,025		$	469,846
Affiliate investments (cost: $312,016 and $266,243 as of September 30, 2015 and December 31, 2014, respectively)		322,497			278,675
Non-Control/Non-Affiliate investments (cost: $1,008,980 and $832,312 as of September 30, 2015 and December 31, 2014, respectively)		976,912			814,809

Total portfolio investments (cost: $1,723,298 and $1,441,402 as of September 30, 2015 and December 31, 2014, respectively)		1,867,434			1,563,330
Marketable securities and idle funds investments (cost: $6,641 and $10,604 as of September 30, 2015 and December 31, 2014, respectively)		4,583			9,067

Total investments (cost: $1,729,939 and $1,452,006 as of September 30, 2015 and December 31, 2014, respectively)		1,872,017			1,572,397
Cash and cash equivalents		35,295			60,432
Interest receivable and other assets		27,031			23,273
Receivable for securities sold		8,245			23,133
Deferred financing costs (net of accumulated amortization of $8,324 and $6,462 as of September 30, 2015 and December 31, 2014, respectively)		12,779			14,550

Total assets	$	1,955,367		$	1,693,785



LIABILITIES
Credit facility	$	346,000		$	218,000
SBIC debentures (par: $225,000 as of September 30, 2015 and December 31, 2014, par of $75,200 is recorded at a fair value of $73,804 and $72,981 as of September 30, 2015 and December 31, 2014, respectively)		223,604			222,781
4.50% Notes		175,000			175,000
6.125% Notes		90,740			90,823
Payable for securities purchased		5,453			14,773
Deferred tax liability, net		663			9,214
Dividend payable		9,014			7,663
Accounts payable and other liabilities		8,917			10,701
Interest payable		4,995			4,848

Total liabilities		864,386			753,803
Commitments and contingencies (Note M)
NET ASSETS
Common stock, $0.01 par value per share (150,000,000 shares authorized; 50,079,178 and 45,079,150 shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively)		500			451
Additional paid-in capital		998,123			853,606
Accumulated net investment income, net of cumulative dividends of $382,083 and $293,789 as of September 30, 2015 and December 31, 2014, respectively		13,927			23,665
Accumulated net realized gain from investments (accumulated net realized gain from investments of $31,284 before cumulative dividends of $62,945 as of September 30, 2015 and accumulated net realized gain from investments of $40,321 before cumulative dividends of $60,777 as of December 31, 2014)		(31,661	)		(20,456	)
Net unrealized appreciation, net of income taxes		110,092			82,716

Total net assets		1,090,981			939,982

Total liabilities and net assets	$	1,955,367		$	1,693,785



NET ASSET VALUE PER SHARE	$	21.79		$	20.85

The accompanying notes are an integral part of these financial statements

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Operations

(in thousands, except shares and per share amounts)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,

	2015			2014			2015			2014
INVESTMENT INCOME:
Interest, fee and dividend income:
Control investments	$	13,437		$	9,705		$	36,264		$	29,547
Affiliate investments		6,852			6,687			19,862			18,412
Non-Control/Non-Affiliate investments		22,090			19,839			64,124			53,488

Interest, fee and dividend income		42,379			36,231			120,250			101,447
Interest, fee and dividend income from marketable securities and idle funds investments		229			120			846			557

Total investment income		42,608			36,351			121,096			102,004
EXPENSES:
Interest		(8,302	)		(5,954	)		(23,755	)		(16,713	)
Compensation		(3,727	)		(3,047	)		(11,055	)		(9,115	)
General and administrative		(2,212	)		(1,871	)		(6,271	)		(5,279	)
Share-based compensation		(1,651	)		(1,208	)		(4,592	)		(3,034	)
Expenses charged to the External Investment Manager		1,145			616			3,133			1,343

Total expenses		(14,747	)		(11,464	)		(42,540	)		(32,798	)

NET INVESTMENT INCOME		27,861			24,887			78,556			69,206
NET REALIZED GAIN (LOSS):
Control investments		—			—			3,324			—
Affiliate investments		5,964			14,737			5,827			8,159
Non-Control/Non-Affiliate investments		(6,195	)		962			(16,836	)		2,634
Marketable securities and idle funds investments		(1,112	)		11			(1,352	)		(4	)

Total net realized gain (loss)		(1,343	)		15,710			(9,037	)		10,789

NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):
Portfolio investments		(8,389	)		(6,891	)		21,716			17,018
Marketable securities and idle funds investments		(648	)		(426	)		(521	)		920
SBIC debentures		(50	)		(8,749	)		(823	)		(10,778	)

Total net change in unrealized appreciation (depreciation)		(9,087	)		(16,066	)		20,372			7,160

INCOME TAXES:
Federal and state income, excise and other taxes		495			(960	)		(1,547	)		(1,758	)
Deferred taxes		2,742			(2,002	)		8,551			(6,643	)

Income tax benefit (provision)		3,237			(2,962	)		7,004			(8,401	)

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	20,668		$	21,569		$	96,895		$	78,754



NET INVESTMENT INCOME PER SHARE—BASIC AND DILUTED	$	0.56		$	0.55		$	1.61		$	1.61



NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE—BASIC AND DILUTED	$	0.41		$	0.48		$	1.99		$	1.83



DIVIDENDS PAID PER SHARE:
Regular monthly dividends	$	0.525		$	0.495		$	1.560		$	1.485
Supplemental dividends		—			—			0.275			0.275

Total dividends	$	0.525		$	0.495		$	1.835		$	1.760



WEIGHTED AVERAGE SHARES OUTSTANDING—BASIC AND DILUTED		50,036,776			44,910,756			48,681,260			43,027,105

The accompanying notes are an integral part of these financial statements

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MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Changes in Net Assets

(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, 2013		39,852,604		$	398		$	694,981		$	22,778		$	(26,334	)	$	100,710		$	792,533
Public offering of common stock, net of offering costs		4,600,000			46			139,651			—			—			—			139,697
Share-based compensation		—			—			3,034			—			—			—			3,034
Purchase of vested stock for employee payroll tax withholding		(46,507	)		—			(1,481	)		—			—			—			(1,481	)
Dividend reinvestment		333,657			3			10,842			—			—			—			10,845
Amortization of directors' deferred compensation		—			—			229			—			—			—			229
Issuance of restricted stock		241,578			2			(2	)		—			—			—			—
Tax benefit related to vesting of restricted shares		—			—			542			—			—			—			542
Forfeited shares of terminated employees		(36,138	)		—			—			—			—			—			—
Dividends to stockholders		—			—			—			(63,098	)		(13,549	)		—			(76,647	)
Net increase (loss) resulting from operations		—			—			—			69,206			10,789			(1,241	)		78,754

Balances at September 30, 2014		44,945,194		$	449		$	847,796		$	28,886		$	(29,094	)	$	99,469		$	947,506



Balances at December 31, 2014		45,079,150		$	451		$	853,606		$	23,665		$	(20,456	)	$	82,716		$	939,982
Public offering of common stock, net of offering costs		4,370,000			44			127,720			—			—			—			127,764
Share-based compensation		—			—			4,592			—			—			—			4,592
Purchase of vested stock for employee payroll tax withholding		(54,840	)		(1	)		(1,739	)		—			—			—			(1,740	)
Dividend reinvestment		444,957			4			13,654			—			—			—			13,658
Amortization of directors' deferred compensation		—			—			292			—			—			—			292
Issuance of restricted stock		240,074			2			(2	)		—			—			—			—
Forfeited shares of terminated employees		(163	)		—			—			—			—			—			—
Dividends to stockholders		—			—			—			(88,294	)		(2,168	)		—			(90,462	)
Net increase (loss) resulting from operations		—			—			—			78,556			(9,037	)		27,376			96,895

Balances at September 30, 2015		50,079,178		$	500		$	998,123		$	13,927		$	(31,661	)	$	110,092		$	1,090,981

The accompanying notes are an integral part of these financial statements

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MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Nine Months Ended September 30,

	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in net assets resulting from operations	$	96,895		$	78,754
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
Investments in portfolio companies		(727,099	)		(637,843	)
Proceeds from sales and repayments of debt investments in portfolio companies		421,933			396,557
Proceeds from sales and return of capital of equity investments in portfolio companies		29,289			26,117
Investments in marketable securities and idle funds investments		(4,483	)		(17,704	)
Proceeds from sales and repayments of marketable securities and idle funds investments		7,094			22,747
Net change in net unrealized appreciation		(20,372	)		(7,160	)
Net realized (gain) loss		9,037			(10,789	)
Accretion of unearned income		(6,474	)		(8,167	)
Payment-in-kind interest		(2,485	)		(3,947	)
Cumulative dividends		(1,242	)		(1,422	)
Share-based compensation expense		4,592			3,034
Amortization of deferred financing costs		1,899			1,184
Deferred taxes		(8,551	)		6,643
Changes in other assets and liabilities:
Interest receivable and other assets		(3,493	)		(4,480	)
Interest payable		147			(171	)
Accounts payable and other liabilities		(1,618	)		(1,584	)
Deferred fees and other		1,438			1,457

Net cash used in operating activities		(203,493	)		(156,774	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from public offering of common stock, net of offering costs		127,764			139,697
Dividends paid		(75,453	)		(64,739	)
Proceeds from issuance of SBIC debentures		—			24,800
Proceeds from credit facility		473,000			353,000
Repayments on credit facility		(345,000	)		(303,000	)
Payment of deferred loan costs and SBIC debenture fees		(132	)		(1,880	)
Purchase of vested stock for employee payroll tax withholding		(1,740	)		(1,481	)
Other		(83	)		—

Net cash provided by financing activities		178,356			146,397

Net decrease in cash and cash equivalents		(25,137	)		(10,377	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		60,432			34,701

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	35,295		$	24,324



Supplemental cash flow disclosures:
Interest paid	$	21,708		$	15,701
Taxes paid	$	2,504		$	3,656
Non-cash financing activities:
Shares issued pursuant to the DRIP	$	13,658		$	10,845

The accompanying notes are an integral part of these financial statements

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments

September 30, 2015

(in thousands)

(Unaudited)

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


Control Investments(5)

Access Media Holdings, LLC(10)	Private Cable Operator
		5.00% Current / 5.00% PIK Secured Debt (Maturity—October 22, 2018)	21,284	21,284	18,784
		Preferred Member Units (12% cumulative)		3,201	3,201
		Member Units (3,307,545 units)		1	—

				24,486	21,985

ASC Interests, LLC	Recreational and Educational Shooting Facility
		11% Secured Debt (Maturity—July 31, 2018)	2,750	2,715	2,750
		Member Units (1,500 units)(8)		1,500	2,230

				4,215	4,980

Bond-Coat, Inc.	Casing and Tubing Coating Services
		12% Secured Debt (Maturity—December 28, 2017)	11,596	11,513	11,596
		Common Stock (57,508 shares)		6,350	10,210

				17,863	21,806

Café Brazil, LLC	Casual Restaurant Group
		Member Units (1,233 units)(8)		1,742	7,330

CBT Nuggets, LLC	Produces and Sells IT Training Certification Videos
		Member Units (416 units)(8)		1,300	38,890

Ceres Management, LLC (Lambs Tire & Automotive)	Aftermarket Automotive Services Chain
		14% Secured Debt (Maturity—May 31, 2018)	8,070	8,070	8,070
		Member Units (5,460 units)		5,273	4,420
		9.5% Secured Debt (Lamb's Real Estate Investment I, LLC) (Maturity—October 1, 2025)	931	931	931
		Member Units (Lamb's Real Estate Investment I, LLC) (1,000 units)(8)		625	1,240

				14,899	14,661

CMS Minerals LLC	Oil & Gas Exploration & Production
		Preferred Member Units (458 units)(8)		3,246	7,193

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 2015

(in thousands)

(Unaudited)

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


Datacom, LLC	Technology and Telecommunications Provider
		10.5% Secured Debt (Maturity—May 31, 2019)	11,205	11,117	11,117
		Class A Preferred Member Units (13,154 units)(8)		1,137	1,137
		Class B Preferred Member Units (6,453 units)		6,030	5,570

				18,284	17,824

Garreco, LLC	Manufacturer and Supplier of Dental Products
		14% Secured Debt (Maturity—January 12, 2018)	5,800	5,733	5,733
		Member Units (1,200 units)(8)		1,200	1,470

				6,933	7,203

GRT Rubber Technologies LLC	Manufacturer of Engineered Rubber Products
		LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—December 19, 2019)(9)	16,331	16,189	16,189
		Member Units (5,879 units)(8)		13,065	13,065

				29,254	29,254

Gulf Manufacturing, LLC	Manufacturer of Specialty Fabricated Industrial Piping Products
		9% PIK Secured Debt (Ashland Capital IX, LLC) (Maturity—June 30, 2017)	777	777	777
		Member Units (438 units)(8)		2,980	15,130

				3,757	15,907

Harrison Hydra-Gen, Ltd.	Manufacturer of Hydraulic Generators
		12% Secured Debt (Maturity—December 4, 2015)	5,010	5,010	5,010
		Preferred Stock (8% cumulative)(8)		1,336	1,336
		Common Stock (107,456 shares)		718	2,300

				7,064	8,646

Hawthorne Customs and Dispatch Services, LLC	Facilitator of Import Logistics, Brokerage, and Warehousing
		Member Units (500 units)(8)		589	580
		Member Units (Wallisville Real Estate, LLC) (588,210 units)(8)		1,215	2,220

				1,804	2,800

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MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 2015

(in thousands)

(Unaudited)

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


HW Temps LLC	Temporary Staffing Solutions
		LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 10.50%, Secured Debt (Maturity July 2, 2020)(9)	9,976	9,880	9,880
		Preferred Member Units (3,200 units)(8)		3,942	3,942

				13,822	13,822

Hydratec, Inc.	Designer and Installer of Micro-Irrigation Systems
		Common Stock (7,095 shares)(8)		7,095	14,950

IDX Broker, LLC	Provider of Marketing and CRM Tools for the Real Estate Industry
		LIBOR Plus 6.50% (Floor 1.50%), Current Coupon 8.00%, Secured Debt (Maturity—November 15, 2018)(9)	25	25	25
		12.5% Secured Debt (Maturity—November 15, 2018)	11,350	11,276	11,350
		Member Units (5,400 units)		5,606	6,440

				16,907	17,815

Impact Telecom, Inc.	Telecommunications Services Provider
		LIBOR Plus 6.50% (Floor 2.00%), Current Coupon 8.50%, Secured Debt (Maturity—May 31, 2018)(9)	1,575	1,570	1,570
		13% Secured Debt (Maturity—May 31, 2018)	22,500	15,893	15,893
		Warrants (5,516,667 equivalent shares)		8,000	4,160

				25,463	21,623

Indianapolis Aviation Partners, LLC	Fixed Base Operator
		15% Secured Debt (Maturity—January 15, 2016)	3,100	3,079	3,100
		Warrants (1,046 equivalent units)		1,129	2,540

				4,208	5,640

Jensen Jewelers of Idaho, LLC	Retail Jewelry Store
		Prime Plus 6.75% (Floor 2.00%), Current Coupon 10.00%, Secured Debt (Maturity—November 14, 2016)(9)	4,205	4,169	4,205
		Member Units (627 units)(8)		811	4,750

				4,980	8,955

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 2015

(in thousands)

(Unaudited)

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


Lighting Unlimited, LLC	Commercial and Residential Lighting Products and Design Services
		8% Secured Debt (Maturity—August 22, 2016)	1,514	1,514	1,514
		Preferred Equity (non-voting)		434	434
		Warrants (71 equivalent units)		54	40
		Member Units (700 units)(8)		100	420

				2,102	2,408

Marine Shelters Holdings, LLC (LoneStar Marine Shelters)	Fabricator of Marine and Industrial Shelters
		6% Current / 6% PIK Secured Debt (Maturity—December 28, 2017)	8,781	8,688	8,688
		Preferred Member Units (3,810 units)		5,352	5,352

				14,040	14,040

Mid-Columbia Lumber Products, LLC	Manufacturer of Finger-Jointed Lumber Products
		10% Secured Debt (Maturity—December 18, 2017)	1,750	1,750	1,750
		12% Secured Debt (Maturity—December 18, 2017)	3,900	3,900	3,900
		Member Units (2,829 units)(8)		1,244	3,980
		9.5% Secured Debt (Mid-Columbia Real Estate, LLC) (Maturity—May 13, 2025)	893	893	893
		Member Units (Mid—Columbia Real Estate, LLC) (250 units)(8)		250	550

				8,037	11,073

MH Corbin Holding LLC	Manufacturer and distributor of traffic safety products
		10% Secured Debt (Maturity—August 31, 2020)	14,000	13,864	13,864
		Preferred Member Units (4,000 shares)		6,000	6,000

				19,864	19,864

MSC Adviser I, LLC(16)	Third Party Investment Advisory Services
		Member Units (Fully diluted 100.0%)(8)		—	32,305

Mystic Logistics, Inc	Logistics and Distribution Services Provider for Large Volume Mailers
		12% Secured Debt (Maturity—August 15, 2019)	9,448	9,273	9,448
		Common Stock (5,873 shares)(8)		2,720	6,580

				11,993	16,028

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 2015

(in thousands)

(Unaudited)

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


NAPCO Precast, LLC	Precast Concrete Manufacturing
		Prime Plus 2.00% (Floor 7.00%), Current Coupon 9.00%, Secured Debt (Maturity—January 31, 2016)(9)	625	625	625
		Prime Plus 2.00% (Floor 7.00%), Current Coupon 9.00%, Secured Debt (Maturity—February 1, 2016)(9)	2,923	2,921	2,923
		18% Secured Debt (Maturity—February 1, 2016)	4,468	4,460	4,468
		Member Units (2,955 units)(8)		2,975	8,590

				10,981	16,606

NRI Clinical Research, LLC	Clinical Research Service Provider
		14% Secured Debt (Maturity—September 8, 2017)	4,740	4,650	4,650
		Warrants (251,723 equivalent units)		252	190
		Member Units (1,454,167 units)		765	1,052

				5,667	5,892

NRP Jones, LLC	Manufacturer of Hoses, Fittings and Assemblies
		12% Secured Debt (Maturity—December 22, 2016)	13,224	12,885	12,885
		Warrants (14,331 equivalent units)		817	450
		Member Units (50,877 units)(8)		2,900	1,480

				16,602	14,815

OMi Holdings, Inc.	Manufacturer of Overhead Cranes
		Common Stock (1,500 shares)(8)		1,080	13,420

Pegasus Research Group, LLC (Televerde)	Provider of Telemarketing and Data Services
		Member Units (460 units)(8)		1,290	6,490

PPL RVs, Inc.	Recreational Vehicle Dealer
		11.1% Secured Debt (Maturity—January 1, 2016)	9,710	9,710	9,710
		Common Stock (1,962 shares)		2,150	8,710

				11,860	18,420

Principle Environmental, LLC	Noise Abatement Service Provider
		12% Secured Debt (Maturity—April 30, 2017)	4,060	3,979	4,060
		12% Current / 2% PIK Secured Debt (Maturity—April 30, 2017)	3,294	3,288	3,294
		Preferred Member Units (19,631 units)(8)		4,663	9,560
		Warrants (1,036 equivalent units)		1,200	530

				13,130	17,444

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 2015

(in thousands)

(Unaudited)

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


Quality Lease Service, LLC	Provider of Rigsite Accommodation Unit Rentals and Related Services
		8% PIK Secured Debt (Maturity—June 8, 2020)	6,410	6,410	6,410
		Member Units (1,000 units)		568	2,638

				6,978	9,048

River Aggregates, LLC	Processor of Construction Aggregates
		Zero Coupon Secured Debt (Maturity—June 30, 2018)	750	540	540
		Member Units (1,150 units)(8)		1,150	3,830
		Member Units (RA Properties, LLC) (1,500 units)		369	2,360

				2,059	6,730

SoftTouch Medical Holdings LLC	Home Provider of Pediatric Durable Medical Equipment
		LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—October 31, 2019)(9)	8,245	8,175	8,175
		Member Units (4,450 units)(8)		4,930	5,340

				13,105	13,515

Southern RV, LLC	Recreational Vehicle Dealer
		13% Secured Debt (Maturity—August 8, 2018)	11,400	11,288	11,400
		Member Units (1,680 units)(8)		1,680	11,600
		13% Secured Debt (Southern RV Real Estate, LLC) (Maturity—August 8, 2018)	3,250	3,218	3,250
		Member Units (Southern RV Real Estate, LLC) (480 units)		480	540

				16,666	26,790

The MPI Group, LLC	Manufacturer of Custom Hollow Metal Doors, Frames and Accessories
		9% Secured Debt (Maturity—October 2, 2018)	2,924	2,921	2,920
		Series A Preferred Units (2,500 units; 10% Cumulative)		2,500	980
		Warrants (1,424 equivalent units)		1,096	—
		Member Units (MPI Real Estate Holdings, LLC) (100% Fully diluted)(8)		2,300	2,230

				8,817	6,130

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 2015

(in thousands)

(Unaudited)

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


Travis Acquisition LLC	Manufacturer of Aluminum Trailers
		12% Secured Debt (Maturity—August 30, 2018)	3,628	3,581	3,628
		Member Units (7,282 units)		7,100	14,110

				10,681	17,738

Uvalco Supply, LLC	Farm and Ranch Supply Store
		9% Secured Debt (Maturity—January 1, 2019)	1,418	1,418	1,418
		Member Units (1,006 units)(8)		1,113	3,210

				2,531	4,628

Vision Interests, Inc.	Manufacturer / Installer of Commercial Signage
		13% Secured Debt (Maturity—December 23, 2016)	3,138	3,115	3,115
		Series A Preferred Stock (3,000,000 shares)		3,000	3,550
		Common Stock (1,126,242 shares)		3,706	210

				9,821	6,875

Ziegler's NYPD, LLC	Casual Restaurant Group
		6.5% Secured Debt (Maturity—October 1, 2019)	1,000	992	992
		12% Secured Debt (Maturity—October 1, 2019)	500	500	500
		14% Secured Debt (Maturity—October 1, 2019)	2,750	2,750	2,750
		Warrants (587 equivalent units)		600	—
		Preferred Member Units (10,072 units)		2,834	2,240

				7,676	6,482

Subtotal Control Investments (30.3% of total investments at fair value)				402,302	568,025

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 2015

(in thousands)

(Unaudited)

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


Affiliate Investments(6)

AFG Capital Group, LLC	Provider of Rent-to-Own Financing Solutions and Services
		11% Secured Debt (Maturity—November 7, 2019)	12,560	12,199	12,199
		Warrants (42 equivalent units)		259	410
		Member Units (186 units)		1,200	1,700

				13,658	14,309

Boss Industries, LLC	Manufacturer and Distributor of Air, Power and Other Industrial Equipment
		Preferred Member Units (2,242 units)(8)		2,203	2,543

Bridge Capital Solutions Corporation	Financial Services and Cash Flow Solutions Provider
		13% Secured Debt (Maturity—April 18, 2017)	7,000	6,872	6,872
		Warrants (22 equivalent shares)		200	1,020

				7,072	7,892

Buca C, LLC	Restaurants
		LIBOR Plus 7.25% (Floor 1.00%), Current Coupon 8.25%, Secured Debt (Maturity—June 30, 2020)(9)	25,530	25,288	25,288
		Preferred Member Units (6 units)(8)		3,656	3,656

				28,944	28,944

CAI Software LLC	Provider of Specialized Enterprise Resource Planning Software
		12% Secured Debt (Maturity—October 10, 2019)	4,973	4,930	4,930
		Member Units (65,356 units)		654	840

				5,584	5,770

Condit Exhibits, LLC	Tradeshow Exhibits / Custom Displays Provider
		Member Units (3,936 units)(8)		100	770

Congruent Credit Opportunities Funds(12)(13)	Investment Partnership
		LP Interests (Congruent Credit Opportunities Fund II, LP) (Fully diluted 19.8%)(8)		7,644	4,228
		LP Interests (Congruent Credit Opportunities Fund III, LP) (Fully diluted 17.4%)		12,099	12,222

				19,743	16,450

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 2015

(in thousands)

(Unaudited)

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


Daseke, Inc.	Specialty Transportation Provider
		12% Current / 2.5% PIK Secured Debt (Maturity—July 31, 2018)	21,118	20,849	21,118
		Common Stock (19,467 shares)		5,213	22,660

				26,062	43,778

Dos Rios Partners(12)(13)	Investment Partnership
		LP Interests (Dos Rios Partners, LP) (Fully diluted 20.2%)(8)		3,104	2,031
		LP Interests (Dos Rios Partners—A, LP) (Fully diluted 6.4%)(8)		986	648

				4,090	2,679

East Teak Fine Hardwoods, Inc.	Distributor of Hardwood Products
		Common Stock (5,000 shares)		480	860

East West Copolymer & Rubber, LLC	Manufacturer of Synthetic Rubbers
		12% Secured Debt (Maturity—October 17, 2019)	9,600	9,456	9,456
		Warrants (2,014,799 equivalent units)		50	50

				9,506	9,506

Freeport Financial Funds(12)(13)	Investment Partnership
		LP Interests (Freeport Financial SBIC Fund LP) (Fully diluted 9.9%)(8)		5,974	5,974
		LP Interests (Freeport First Lien Loan Fund III LP) (Fully diluted 6.4%)		759	759

				6,733	6,733

Gault Financial, LLC (RMB Capital, LLC)	Purchases and Manages Liquidation of Distressed Assets
		10% Secured Debt (Maturity—November 21, 2016)	13,046	12,858	10,891
		Warrants (29,025 equivalent units)		400	—

				13,258	10,891

Glowpoint, Inc.	Provider of Cloud Managed Video Collaboration Services
		8% Secured Debt (Maturity—October 18, 2018)	21	18	18
		12% Secured Debt (Maturity—October 18, 2018)	9,000	8,924	8,924
		Common Stock (7,711,517 shares)		3,958	4,460

				12,900	13,402

Guerdon Modular Holdings, Inc.	Multi-Family and Commercial Modular Construction Company
		11% Secured Debt (Maturity—August 13, 2019)	10,400	10,273	10,273
		Common Stock (170,577 shares)		2,983	2,590

				13,256	12,863

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 2015

(in thousands)

(Unaudited)

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


Houston Plating and Coatings, LLC	Provider of Plating and Industrial Coating Services
		Member Units (248,082 units)(8)		996	10,820

Indianhead Pipeline Services, LLC	Provider of Pipeline Support Services
		12% Secured Debt (Maturity—February 6, 2017)	6,225	6,046	6,046
		Preferred Member Units (33,819 units; 8% cumulative)		2,302	2,302
		Warrants (31,928 equivalent units)		459	—
		Member Units (14,732 units)		1	—

				8,808	8,348

KBK Industries, LLC	Manufacturer of Specialty Oilfield and Industrial Products
		12.5% Secured Debt (Maturity—September 28, 2017)	6,200	6,170	6,200
		Member Units (250 units)(8)		341	4,090

				6,511	10,290

L.F. Manufacturing Holdings, LLC(10)	Manufacturer of Fiberglass Products
		Member Units (2,000,000 units)(8)		2,019	1,790

MPS Denver, LLC	Specialty Card Printing
		Member Units (13,800 units)		1,130	1,130

OnAsset Intelligence, Inc.	Provider of Transportation Monitoring / Tracking Products and Services
		12% PIK Secured Debt (Maturity—December 31, 2015)	3,887	3,887	3,887
		Preferred Stock (912 shares; 7% cumulative)(8)		1,981	1,380
		Warrants (5,333 equivalent shares)		1,919	—

				7,787	5,267

OPI International Ltd.(13)	Provider of Man Camp and Industrial Storage Services
		10% Unsecured Debt (Maturity—April 8, 2018)	244	244	244
		Common Stock (20,766,317 shares)		1,371	3,200

				1,615	3,444

PCI Holding Company, Inc.	Manufacturer of Industrial Gas Generating Systems
		Preferred Stock (1,500,000 shares; 20% cumulative)(8)		2,625	4,750

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 2015

(in thousands)

(Unaudited)

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


Radial Drilling Services Inc.	Oil and Gas Lateral Drilling Technology Provider
		12% Secured Debt (Maturity—November 22, 2016)	4,200	3,936	2,000
		Warrants (316 equivalent shares)		758	—

				4,694	2,000

Rocaceia, LLC (Quality Lease and Rental Holdings, LLC)	Provider of Rigsite Accommodation Unit Rentals and Related Services
		12% Secured Debt (Maturity—January 8, 2018)(14)(18)	30,785	30,281	250
		Preferred Member Units (250 units)		2,500	—

				32,781	250

Samba Holdings, Inc.	Provider of Intelligent Driver Record Monitoring Software and Services
		12.5% Secured Debt (Maturity—November 17, 2016)	25,665	25,522	25,665
		Common Stock (170,963 shares)		2,087	20,410

				27,609	46,075

Tin Roof Acquisition Company	Casual Restaurant Group
		12% Secured Debt (Maturity—November 13, 2018)	14,100	13,898	13,898
		Class C Preferred Stock (Fully diluted 10.0%; 10% cumulative)(8)		2,415	2,415

				16,313	16,313

Universal Wellhead Services Holdings, LLC(10)	Provider of Wellhead Equipment, Designs, and Personnel to the Oil & Gas Industry
		Class A Units (4,000,000 units; 4.5% cumulative)(8)		4,000	3,091

Volusion, LLC	Provider of Online Software-as-a-Service eCommerce Solutions
		10.5% Secured Debt (Maturity—January 26, 2020)	17,500	16,139	16,139
		Warrants (950,618 equivalent units)		1,400	1,400
		Preferred Member Units (4,876,670 units)		14,000	14,000

				31,539	31,539

Subtotal Affiliate Investments (17.2% of total investments at fair value)				312,016	322,497

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 2015

(in thousands)

(Unaudited)

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


Non-Control/Non-Affiliate Investments(7)

Allflex Holdings III Inc.(11)	Manufacturer of Livestock Identification Products
		LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—July 19, 2021)(9)	10,150	10,077	10,029

AM General LLC(11)	Specialty Vehicle Manufacturer
		LIBOR Plus 9.00% (Floor 1.25%), Current Coupon 10.25%, Secured Debt (Maturity—March 22, 2018)(9)	2,256	2,218	1,914

AM3 Pinnacle Corporation(10)	Provider of Comprehensive Internet, TV and Voice Services for Multi- Dwelling Unit Properties
		Common Stock (60,240 shares)		2,000	—

American Seafoods Group, LLC(11)	Catcher-Processor of Alaskan Pollock
		LIBOR Plus 5.00% (Floor 1.00%), Current Coupon 6.00%, Secured Debt (Maturity—August 19, 2021)(9)	10,000	9,988	9,950

AmeriTech College, LLC	For-Profit Nursing and Healthcare College
		10% Secured Debt (Maturity—November 30, 2019)	489	489	489
		10% Secured Debt (Maturity—January 31, 2020)	3,025	3,025	2,668

				3,514	3,157

AMF Bowling Centers, Inc.(11)	Bowling Alley Operator
		LIBOR Plus 6.25% (Floor 1.00%), Current Coupon 7.25%, Secured Debt (Maturity—September 18, 2021)(9)	7,927	7,818	7,908

Anchor Hocking, LLC(11)	Household Products Manufacturer
		LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.00%, Secured Debt (Maturity—June 4, 2018)(9)	2,312	2,312	2,323
		Member Units (440,620 units)		4,928	3,415

				7,240	5,738

AP Gaming I, LLC(10)	Developer, Manufacturer, and Operator of Gaming Machines
		LIBOR Plus 8.25% (Floor 1.00%), Current Coupon 9.25%, Secured Debt (Maturity—December 20, 2020)(9)	11,343	11,128	11,210

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule Of Investments (Continued)

September 30, 2015

(in thousands)

(Unaudited)

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


Applied Products, Inc.(10)	Adhesives Distributor
		LIBOR Plus 6.50% (Floor 1.00%), Current Coupon 7.50%, Secured Debt (Maturity—September 30, 2019)(9)	5,850	5,794	5,794

Arcus Hunting LLC.(10)	Manufacturer of Bowhunting and Archery Products and Accessories
		LIBOR Plus 7.00% (Floor 1.00%), Current Coupon 8.00%, Secured Debt (Maturity—November 13, 2019)(9)	10,875	10,758	10,758

Artel, LLC(11)	Provider of Secure Satellite Network and IT Solutions