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)