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 June 30, 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 August 2, 2018 was 60,581,858.

Table of Contents

TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION


Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets—June 30, 2018 (unaudited) and December 31, 2017	1
	Consolidated Statements of Operations (unaudited)—Three and six months ended June 30, 2018 and 2017	2
	Consolidated Statements of Changes in Net Assets (unaudited)—Six months ended June 30, 2018 and 2017	3
	Consolidated Statements of Cash Flows (unaudited)—Six months ended June 30, 2018 and 2017	4
	Consolidated Schedule of Investments (unaudited)—June 30, 2018	5
	Consolidated Schedule of Investments—December 31, 2017	31
	Notes to Consolidated Financial Statements (unaudited)	56
	Consolidated Schedules of Investments in and Advances to Affiliates (unaudited)—Six months ended June 30, 2018 and 2017	99
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	109
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	132
Item 4.	Controls and Procedures	133

PART II
OTHER INFORMATION


Item 1.	Legal Proceedings	134
Item 1A.	Risk Factors	134
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	134
Item 6.	Exhibits	134
	Signatures	136

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

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

	June 30, 2018			December 31, 2017

	(Unaudited)
ASSETS

Investments at fair value:
Control investments (cost: $694,340 and $530,034 as of June 30, 2018 and December 31, 2017, respectively)	$	913,963		$	750,706
Affiliate investments (cost: $360,559 and $367,317 as of June 30, 2018 and December 31, 2017, respectively)		341,416			338,854
Non-Control/Non-Affiliate investments (cost: $1,119,660 and $1,107,447 as of June 30, 2018 and December 31, 2017, respectively)		1,108,752			1,081,745

Total investments (cost: $2,174,559 and $2,004,798 as of June 30, 2018 and December 31, 2017, respectively)		2,364,131			2,171,305

Cash and cash equivalents		40,484			51,528
Interest receivable and other assets		38,743			36,343
Receivable for securities sold		13,295			2,382
Deferred financing costs (net of accumulated amortization of $6,101 and $5,600 as of June 30, 2018 and December 31, 2017, respectively)		4,692			3,837

Total assets	$	2,461,345		$	2,265,395



LIABILITIES
Credit facility	$	289,000		$	64,000
SBIC debentures (par: $313,800 and $295,800 as of June 30, 2018 and December 31, 2017, respectively)		306,418			288,483
4.50% Notes due 2022 (par: $185,000 as of both June 30, 2018 and December 31, 2017)		182,319			182,015
4.50% Notes due 2019 (par: $175,000 as of both June 30, 2018 and December 31, 2017)		173,977			173,616
6.125% Notes (par: $0 and $90,655 as of June 30, 2018 and December 31, 2017, respectively)		—			89,057
Accounts payable and other liabilities		16,599			20,168
Payable for securities purchased		17,889			40,716
Interest payable		5,477			5,273
Dividend payable		11,477			11,146
Deferred tax liability, net		10,835			10,553

Total liabilities		1,013,991			885,027

Commitments and contingencies (Note M)
NET ASSETS
Common stock, $0.01 par value per share (150,000,000 shares authorized; 60,400,572 and 58,660,680 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively)		603			586
Additional paid-in capital		1,371,983			1,310,780
Accumulated net investment income, net of cumulative dividends of $746,766 and $662,563 as of June 30, 2018 and December 31, 2017, respectively		(1,168	)		7,921
Accumulated net realized gain from investments (accumulated net realized gain from investments of $56,570 before cumulative dividends of $124,690 as of June 30, 2018 and accumulated net realized gain from investments of $64,576 before cumulative dividends of $124,690 as of December 31, 2017)		(68,120	)		(60,114	)
Net unrealized appreciation, net of income taxes		144,056			121,195

Total net assets		1,447,354			1,380,368

Total liabilities and net assets	$	2,461,345		$	2,265,395



NET ASSET VALUE PER SHARE	$	23.96		$	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 June 30,						Six Months Ended June 30,

	2018			2017			2018			2017
INVESTMENT INCOME:
Interest, fee and dividend income:
Control investments	$	23,875		$	14,590		$	45,830		$	27,576
Affiliate investments		8,515			9,568			17,587			19,468
Non-Control/Non-Affiliate investments		27,479			26,113			52,395			51,116

Total investment income		59,869			50,271			115,812			98,160
EXPENSES:
Interest		(10,833	)		(8,793	)		(21,098	)		(17,400	)
Compensation		(5,673	)		(4,555	)		(11,164	)		(8,985	)
General and administrative		(3,097	)		(3,060	)		(6,071	)		(6,000	)
Share-based compensation		(2,432	)		(2,798	)		(4,735	)		(5,067	)
Expenses allocated to the External Investment Manager		1,678			1,628			3,744			3,152

Total expenses		(20,357	)		(17,578	)		(39,324	)		(34,300	)

NET INVESTMENT INCOME		39,512			32,693			76,488			63,860
NET REALIZED GAIN (LOSS):
Control investments		(8,413	)		3,789			4,681			3,108
Affiliate investments		—			(115	)		—			22,816
Non-Control/Non-Affiliate investments		(5,531	)		7,307			(11,165	)		12,625
Realized loss on extinguishment of debt		(1,522	)		—			(2,896	)		(5,217	)

Total net realized gain (loss)		(15,466	)		10,981			(9,380	)		33,332

NET UNREALIZED APPRECIATION (DEPRECIATION):
Control investments		26,046			5,166			3,072			17,046
Affiliate investments		(376	)		(674	)		13,862			(26,796	)
Non-Control/Non-Affiliate investments		7,041			(3,127	)		4,895			(10,976	)
SBIC debentures		(10	)		(36	)		1,348			5,629

Total net unrealized appreciation (depreciation)		32,701			1,329			23,177			(15,097	)

INCOME TAXES:
Federal and state income, excise and other taxes		852			(438	)		(34	)		(1,690	)
Deferred taxes		(2,148	)		(1,736	)		(282	)		(6,122	)

Income tax provision		(1,296	)		(2,174	)		(316	)		(7,812	)

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	55,451		$	42,829		$	89,969		$	74,283



NET INVESTMENT INCOME PER SHARE—BASIC AND DILUTED	$	0.66		$	0.58		$	1.29		$	1.15



NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE—BASIC AND DILUTED	$	0.93		$	0.76		$	1.52		$	1.33



DIVIDENDS PAID PER SHARE:
Regular monthly dividends	$	0.570		$	0.555		$	1.140		$	1.110
Supplemental dividends		0.275			0.275			0.275			0.275

Total dividends	$	0.845		$	0.830		$	1.415		$	1.385



WEIGHTED AVERAGE SHARES OUTSTANDING—BASIC AND DILUTED		59,828,751			56,166,782			59,343,199			55,648,854

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		2,104,424			22			78,412			—			—			—			78,434
Share-based compensation		—			—			5,067			—			—			—			5,067
Purchase of vested stock for employee payroll tax withholding		(113,371	)		(1	)		(4,346	)		—			—			—			(4,347	)
Investment through issuance of unregistered shares		11,464			—			442			—			—			—			442
Dividend reinvestment		115,807			1			4,403			—			—			—			4,404
Amortization of directors' deferred compensation		—			—			326			—			—			—			326
Issuance of restricted stock, net of forfeited shares		225,152			2			(2	)		—			—			—			—
Dividends to stockholders		—			—			—			(54,925	)		(22,420	)		—			(77,345	)
Net increase (decrease) resulting from operations		—			—			—			58,643			38,549			(22,909	)		74,283

Balances at June 30, 2017		56,698,333		$	567		$	1,228,185		$	22,751		$	(42,758	)	$	74,000		$	1,282,745



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		1,432,185			14			53,748			—			—			—			53,762
Share-based compensation		—			—			4,735			—			—			—			4,735
Purchase of vested stock for employee payroll tax withholding		(109,693	)		(1	)		(4,076	)		—			—			—			(4,077	)
Dividend reinvestment		168,426			2			6,379			—			—			—			6,381
Amortization of directors' deferred compensation		—			—			419			—			—			—			419
Issuance of restricted stock, net of forfeited shares		248,974			2			(2	)		—			—			—			—
Dividends to stockholders		—			—			—			(84,203	)		—			—			(84,203	)
Net increase (decrease) resulting from operations		—			—			—			75,114			(8,006	)		22,861			89,969

Balances at June 30, 2018		60,400,572		$	603		$	1,371,983		$	(1,168	)	$	(68,120	)	$	144,056		$	1,447,354

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

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Cash Flows

(dollars in thousands)

(Unaudited)

	Six Months Ended June 30,

	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in net assets resulting from operations	$	89,969		$	74,283
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:
Investments in portfolio companies		(528,015	)		(471,548	)
Proceeds from sales and repayments of debt investments in portfolio companies		281,802			380,005
Proceeds from sales and return of capital of equity investments in portfolio companies		42,955			54,352
Net unrealized (appreciation) depreciation		(23,177	)		15,097
Net realized (gain) loss		9,380			(33,332	)
Accretion of unearned income		(6,945	)		(9,091	)
Payment-in-kind interest		(952	)		(3,125	)
Cumulative dividends		(1,069	)		(1,789	)
Share-based compensation expense		4,735			5,067
Amortization of deferred financing costs		1,685			1,324
Deferred tax provision		282			6,122
Changes in other assets and liabilities:
Interest receivable and other assets		(3,560	)		420
Interest payable		204			(289	)
Accounts payable and other liabilities		(3,149	)		(3,058	)
Deferred fees and other		2,162			1,224

Net cash provided by (used in) operating activities		(133,693	)		15,662
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from public offering of common stock, net of offering costs		53,762			78,434
Dividends paid		(77,492	)		(72,505	)
Proceeds from issuance of SBIC debentures		22,000			46,400
Repayments of SBIC debentures		(4,000	)		(25,200	)
Redemption of 6.125% Notes		(90,655	)		—
Proceeds from credit facility		427,000			251,000
Repayments on credit facility		(202,000	)		(291,000	)
Payment of deferred issuance costs and SBIC debenture fees		(1,889	)		(1,125	)
Purchases of vested stock for employee payroll tax withholding		(4,077	)		(4,347	)

Net cash provided by (used in) financing activities		122,649			(18,343	)

Net decrease in cash and cash equivalents		(11,044	)		(2,681	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		51,528			24,480

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	40,484		$	21,799



Supplemental cash flow disclosures:
Interest paid	$	19,147		$	16,304
Taxes paid	$	4,075		$	2,785
Non-cash financing activities:
Shares issued pursuant to the DRIP	$	6,381		$	4,404

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

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments

June 30, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Investment Date(27)	Business Description	Type of Investment(2)(3)(26)	Principal(4)		Cost(4)		Fair Value(18)


Control Investments(5)

Access Media Holdings, LLC(10)	July 22, 2015	Private Cable Operator
			10% PIK Secured Debt (Maturity—July 22, 2020)(14)(19)	$	23,828	$	23,828	$	15,120
			Preferred Member Units (8,977,500 units)				8,871		—
			Member Units (45 units)				1		—

							32,700		15,120

ASC Interests, LLC	August 1, 2013	Recreational and Educational Shooting Facility
			11% Secured Debt (Maturity—July 31, 2018)		1,650		1,649		1,649
			Member Units (1,500 units)				1,500		1,370

							3,149		3,019

ATS Workholding, LLC(10)	March 10, 2014	Manufacturer of Machine Cutting Tools and Accessories
			5% Secured Debt (Maturity—November 16, 2021)		4,605		4,179		4,179
			Preferred Member Units (3,725,862 units)				3,726		3,726

							7,905		7,905

Bond-Coat, Inc.	December 28, 2012	Casing and Tubing Coating Services
			12% Secured Debt (Maturity—December 28, 2020)		11,596		11,319		11,319
			Common Stock (57,508 shares)				6,350		9,370

							17,669		20,689

Brewer Crane Holdings, LLC	January 9, 2018	Provider of Crane Rental and Operating Services
			LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.98%, Secured Debt (Maturity—January 9, 2023)(9)		9,796		9,706		9,706
			Preferred Member Units (2,950 units)(8)				4,280		4,280

							13,986		13,986
Café Brazil, LLC	April 20, 2004	Casual Restaurant Group
			Member Units (1,233 units)(8)				1,742		4,780

California Splendor Holdings LLC	March 30, 2018	Processor of Frozen Fruits
			LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 10.38%, Secured Debt (Maturity—March 30, 2023)(9)		9,271		9,157		9,157
			LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 12.38%, Secured Debt (Maturity—March 30, 2023)(9)		28,000		27,733		27,733
			Preferred Member Units (6,157 units)(8)				10,775		10,775

							47,665		47,665

CBT Nuggets, LLC	June 1, 2006	Produces and Sells IT Training Certification Videos
			Member Units (416 units)(8)				1,300		64,040

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MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

June 30, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Investment Date(27)	Business Description	Type of Investment(2)(3)(26)


Chamberlin Holding LLC	February 26, 2018	Roofing and Waterproofing Specialty Contractor
			LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 12.38%, Secured Debt (Maturity—February 26, 2023)(9)	21,600	21,397	21,397
			Member Units (4,347 units)(8)		11,440	11,440

					32,837	32,837

Charps, LLC	February 3, 2017	Pipeline Maintenance and Construction
			12% Secured Debt (Maturity—February 3, 2022)	15,900	15,762	15,762
			Preferred Member Units (1,600 units)		400	1,190

					16,162	16,952

Clad-Rex Steel, LLC	December 20, 2016	Specialty Manufacturer of Vinyl-Clad Metal
			LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 11.48%, Secured Debt (Maturity—December 20, 2021)(9)	12,880	12,783	12,880
			Member Units (717 units)(8)		7,280	9,780
			10% Secured Debt (Clad-Rex Steel RE Investor, LLC) (Maturity—December 20, 2036)	1,173	1,161	1,173
			Member Units (Clad-Rex Steel RE Investor, LLC) (800 units)		210	280

					21,434	24,113

CMS Minerals Investments	January 30, 2015	Oil & Gas Exploration & Production
			Member Units (CMS Minerals II, LLC) (100 units)(8)		3,036	2,736

Copper Trail Fund Investments(12)(13)	July 17, 2017	Investment Partnership
			LP Interests (CTMH, LP) (Fully diluted 38.8%)		872	872
			LP Interests (Copper Trail Energy Fund I, LP) (Fully diluted 30.1%)(8)		3,270	3,270

					4,142	4,142

Datacom, LLC	May 30, 2014	Technology and Telecommunications Provider
			8% Secured Debt (Maturity—May 30, 2018)(14)(17)	1,800	1,800	1,800
			5.25% Current / 5.25% PIK Secured Debt (Maturity—May 30, 2019)(14)(19)	12,511	12,479	10,560
			Class A Preferred Member Units		1,181	—
			Class B Preferred Member Units (6,453 units)		6,030	—

					21,490	12,360

Digital Products Holdings LLC	April 1, 2018	Designer and Distributor of Consumer Electronics
			LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 12.00%, Secured Debt (Maturity—April 1, 2023)(9)	26,400	26,146	26,146
			Preferred Member Units (3,451 shares)(8)		8,800	8,800

					34,946	34,946

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MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

June 30, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Investment Date(27)	Business Description	Type of Investment(2)(3)(26)


Direct Marketing Solutions, Inc.	February 13, 2018	Provider of Omni-Channel Direct Marketing Services
			LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 13.00%, Secured Debt (Maturity—February 13, 2023)(9)	18,487	18,298	18,298
			Preferred Stock (8,400 shares)		8,400	8,400

					26,698	26,698

Gamber-Johnson Holdings, LLC	June 24, 2016	Manufacturer of Ruggedized Computer Mounting Systems
			LIBOR Plus 9.00% (Floor 2.00%), Current Coupon 11.00%, Secured Debt (Maturity—June 24, 2021)(9)	22,910	22,748	22,910
			Member Units (8,619 units)(8)		14,844	33,380

					37,592	56,290

Garreco, LLC	July 15, 2013	Manufacturer and Supplier of Dental Products
			LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 12.00%, Secured Debt (Maturity—March 31, 2020)(9)	5,362	5,331	5,331
			Member Units (1,200 units)		1,200	1,940

					6,531	7,271

GRT Rubber Technologies LLC	December 19, 2014	Manufacturer of Engineered Rubber Products
			LIBOR Plus 9.00% (Floor 1.00%), Current Coupon 10.98%, Secured Debt (Maturity—December 19, 2019)(9)	10,782	10,744	10,782
			Member Units (5,879 units)(8)		13,065	25,450

					23,809	36,232

Guerdon Modular Holdings, Inc.	August 13, 2014	Multi-Family and Commercial Modular Construction Company
			13% Secured Debt (Maturity—March 1, 2019)	12,588	12,526	11,956
			Preferred Stock (404,998 shares)		1,140	—
			Common Stock (212,033 shares)		2,983	—
			Warrants (6,208,877 equivalent shares; Expiration—April 25, 2028; Strike price—$0.01 per unit)		—	—

					16,649	11,956

Gulf Manufacturing, LLC	August 31, 2007	Manufacturer of Specialty Fabricated Industrial Piping Products
			Member Units (438 units)(8)		2,980	11,150

Gulf Publishing Holdings, LLC	April 29, 2016	Energy Industry Focused Media and Publishing
			LIBOR Plus 9.50% (Floor 1.00%), Current Coupon 11.48%, Secured Debt (Maturity—September 30, 2020)(9)	160	160	160
			12.5% Secured Debt (Maturity—April 29, 2021)	12,666	12,582	12,582
			Member Units (3,681 units)		3,681	4,570

					16,423	17,312

Harborside Holdings, LLC	March 20, 2017	Real Estate Holding Company
			Member units (100 units)		6,306	9,500

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

June 30, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Investment Date(27)	Business Description	Type of Investment(2)(3)(26)


Harris Preston Fund Investments(12)(13)	October 1, 2017	Investment Partnership
			LP Interests (2717 MH, L.P.) (Fully diluted 49.3%)		786	879

Harrison Hydra-Gen, Ltd.	June 4, 2010	Manufacturer of Hydraulic Generators
			Common Stock (107,456 shares)(8)		718	6,840

HW Temps LLC	July 2, 2015	Temporary Staffing Solutions
			LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 12.98%, Secured Debt (Maturity July 2, 2020)(9)	9,976	9,927	9,927
			Preferred Member Units (3,200 units)(8)		3,942	3,942

					13,869	13,869

IDX Broker, LLC	November 15, 2013	Provider of Marketing and CRM Tools for the Real Estate Industry
			11.5% Secured Debt (Maturity—November 15, 2020)	14,650	14,540	14,650
			Preferred Member Units (5,607 units)(8)		5,952	11,550

					20,492	26,200

Jensen Jewelers of Idaho, LLC	November 14, 2006	Retail Jewelry Store
			Prime Plus 6.75% (Floor 2.00%), Current Coupon 11.50%, Secured Debt (Maturity—November 14, 2019)(9)	3,655	3,626	3,655
			Member Units (627 units)(8)		811	4,600

					4,437	8,255

KBK Industries, LLC	January 23, 2006	Manufacturer of Specialty Oilfield and Industrial Products
			12.5% Secured Debt (Maturity—September 28, 2020)	5,900	5,870	5,900
			Member Units (325 units)(8)		783	5,620

					6,653	11,520

Lamb Ventures, LLC	May 30, 2008	Aftermarket Automotive Services Chain
			11% Secured Debt (Maturity—July 1, 2022)	8,339	8,300	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	570

					15,026	16,471

Market Force Information, LLC	July 28, 2017	Provider of Customer Experience Management Services
			LIBOR Plus 11.00% (Floor 1.00%), Current Coupon 13.30%, Secured Debt (Maturity—July 28, 2022)(9)	22,800	22,606	22,606
			Member Units (657,113 units)		14,700	14,360

					37,306	36,966

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

June 30, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Investment Date(27)	Business Description	Type of Investment(2)(3)(26)


MH Corbin Holding LLC	August 31, 2015	Manufacturer and Distributor of Traffic Safety Products
			10% Secured Debt (Maturity—August 31, 2020)	12,250	12,083	12,083
			Preferred Member Units (4,000 shares)		6,000	6,000

					18,083	18,083

Mid-Columbia Lumber Products, LLC	December 18, 2006	Manufacturer of Finger-Jointed Lumber Products
			10% Secured Debt (Maturity—January 15, 2020)	1,750	1,744	1,750
			12% Secured Debt (Maturity—January 15, 2020)	3,900	3,871	3,871
			Member Units (7,874 units)		3,001	2,171
			9.5% Secured Debt (Mid-Columbia Real Estate, LLC) (Maturity—May 13, 2025)	768	768	768
			Member Units (Mid-Columbia Real Estate, LLC) (500 units)(8)		790	1,470

					10,174	10,030

MSC Adviser I, LLC(16)	November 22, 2013	Third Party Investment Advisory Services
			Member Units (Fully diluted 100.0%)(8)		—	62,667

Mystic Logistics Holdings, LLC	August 18, 2014	Logistics and Distribution Services Provider for Large Volume Mailers
			12% Secured Debt (Maturity—August 15, 2019)	7,536	7,485	7,485
			Common Stock (5,873 shares)		2,720	4,120

					10,205	11,605

NAPCO Precast, LLC	January 31, 2008	Precast Concrete Manufacturing
			LIBOR Plus 8.50%, Current Coupon 10.80%, Secured Debt (Maturity—May 31, 2019)	11,475	11,451	11,475
			Member Units (2,955 units)(8)		2,975	12,730

					14,426	24,205

NexRev LLC	February 28, 2018	Provider of Energy Efficiency Products & Services
			11% Secured Debt (Maturity—February 28, 2023)	17,440	17,274	17,274
			Preferred Member Units (86,400,000 units)(8)		6,880	6,880

					24,154	24,154

NRI Clinical Research, LLC	September 8, 2011	Clinical Research Service Provider
			14% Secured Debt (Maturity—June 8, 2022)	6,900	6,741	6,770
			Warrants (251,723 equivalent units; Expiration—June 8, 2027; Strike price—$0.01 per unit)		252	500
			Member Units (1,454,167 units)		765	2,500

					7,758	9,770

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

June 30, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Investment Date(27)	Business Description	Type of Investment(2)(3)(26)


NRP Jones, LLC	December 22, 2011	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	4,750

					10,093	11,126

NuStep, LLC	January 31, 2017	Designer, Manufacturer and Distributor of Fitness Equipment
			12% Secured Debt (Maturity—January 31, 2022)	20,600	20,438	20,438
			Preferred Member Units (406 units)		10,200	10,200

					30,638	30,638

OMi Holdings, Inc.	April 1, 2008	Manufacturer of Overhead Cranes
			Common Stock (1,500 shares)(8)		1,080	14,810

Pegasus Research Group, LLC	January 6, 2011	Provider of Telemarketing and Data Services
			Member Units (460 units)(8)		1,290	9,590

PPL RVs, Inc.	June 10, 2010	Recreational Vehicle Dealer
			LIBOR Plus 7.00% (Floor 0.50%), Current Coupon 9.31%, Secured Debt (Maturity—November 15, 2021)(9)	15,600	15,489	15,600
			Common Stock (1,962 shares)(8)		2,150	11,030

					17,639	26,630

Principle Environmental, LLC (d/b/a TruHorizon Environmental Solutions)	February 1, 2011	Noise Abatement Service Provider
			13% Secured Debt (Maturity—April 30, 2020)	7,477	7,371	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

					13,171	21,347

Quality Lease Service, LLC	June 8, 2015	Provider of Rigsite Accommodation Unit Rentals and Related Services
			Zero Coupon Secured Debt (Maturity—June 8, 2021)	7,341	7,341	6,450
			Member Units (1,000 units)		3,643	5,713

					10,984	12,163

River Aggregates, LLC	March 30, 2011	Processor of Construction Aggregates
			Zero Coupon Secured Debt (Maturity—June 30, 2018)(17)	750	750	750
			Member Units (1,150 units)		1,150	4,610
			Member Units (RA Properties, LLC) (1,500 units)		369	2,670

					2,269	8,030

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

June 30, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Investment Date(27)	Business Description	Type of Investment(2)(3)(26)		Cost(4)		Fair Value(18)


The MPI Group, LLC	October 2, 2007	Manufacturer of Custom Hollow Metal Doors, Frames and Accessories
			9% Secured Debt (Maturity—October 2, 2018)	2,924		2,924		1,110
			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		3,590

Vision Interests, Inc.	June 5, 2007	Manufacturer / Installer of Commercial Signage
			13% Secured Debt (Maturity—December 23, 2018)	2,814		2,806		2,806
			Series A Preferred Stock (3,000,000 shares)			3,000		3,360
			Common Stock (1,126,242 shares)			3,706		129

						9,512		6,295

Ziegler's NYPD, LLC	October 1, 2008	Casual Restaurant Group
			6.5% Secured Debt (Maturity—October 1, 2019)	1,000		997		997
			12% Secured Debt (Maturity—October 1, 2019)	425		425		425
			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		2,359

						7,606		6,531

Subtotal Control Investments (63.1% of net assets at fair value)					$	694,340	$	913,963

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

June 30, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Investment Date(27)	Business Description	Type of Investment(2)(3)(26)		Cost(4)		Fair Value(18)


Affiliate Investments(6)

AFG Capital Group, LLC	November 7, 2014	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)	August 31, 2015	Casual Restaurant Group
			12% Secured Debt (Maturity—August 31, 2020)	9,450		9,301		9,440
			Options (2 equivalent units)			397		800
			Warrant (1 equivalent unit; Expiration—August 31, 2025; Strike price—$1.00 per unit)			473		450

						10,171		10,690

BBB Tank Services, LLC	April 8, 2016	Maintenance, Repair and Construction Services to the Above-Ground Storage Tank Market
			LIBOR Plus 10.00% (Floor 1.00%), Current Coupon 11.98%, Secured Debt (Maturity—April 8, 2021)(9)	650		632		632
			17% Secured Debt (Maturity—April 8, 2021)	4,000		3,890		3,890
			Member Units (800,000 units)			800		470

						5,322		4,992

Boccella Precast Products LLC	June 30, 2017	Manufacturer of Precast Hollow Core Concrete
			LIBOR Plus 8.00% (Floor 1.00%), Current Coupon 10.31%, Secured Debt (Maturity—June 30, 2022)(9)	16,742		16,594		16,742
			Member Units (2,160,000 units)(8)			2,160		5,220

						18,754		21,962

Boss Industries, LLC	July 1, 2014	Manufacturer and Distributor of Air, Power and Other Industrial Equipment
			Preferred Member Units (2,242 units)(8)			2,160		5,270

Bridge Capital Solutions Corporation	April 18, 2012	Financial Services and Cash Flow Solutions Provider
			13% Secured Debt (Maturity—July 25, 2021)	7,500		6,044		6,044
			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

						10,169		12,064

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

June 30, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Investment Date(27)	Business Description	Type of Investment(2)(3)(26)


Buca C, LLC	June 30, 2015	Casual Restaurant Group
			LIBOR Plus 9.25% (Floor 1.00%), Current Coupon 11.25%, Secured Debt (Maturity—June 30, 2020)(9)	19,704	19,616	19,616
			Preferred Member Units (6 units; 6% cumulative)(8)(19)		4,299	4,299

					23,915	23,915

CAI Software LLC	October 10, 2014	Provider of Specialized Enterprise Resource Planning Software
			12% Secured Debt (Maturity—October 10, 2019)	3,843	3,827	3,843
			Member Units (65,356 units)(8)		654	2,850

					4,481	6,693

Chandler Signs Holdings, LLC(10)	January 4, 2016	Sign Manufacturer
			12% Current / 1% PIK Secured Deb (Maturity—July 4, 2021)(19)	4,523	4,494	4,523
			Class A Units (1,500,000 units)		1,500	2,180

					5,994	6,703

Charlotte Russe, Inc(11)	May 28, 2013	Fast-Fashion Retailer to Young Women
			8.50% Secured Debt (Maturity—February 2, 2023)	7,972	7,972	7,085
			Common Stock (19,041 shares)		3,141	3,141

					11,113	10,226

Condit Exhibits, LLC	July 1, 2008	Tradeshow Exhibits / Custom Displays Provider
			Member Units (3,936 units)(8)		100	1,950

Congruent Credit Opportunities Funds(12)(13)	January 24, 2012	Investment Partnership
			LP Interests (Congruent Credit Opportunities Fund II, LP) (Fully diluted 19.8%)(8)		5,210	741
			LP Interests (Congruent Credit Opportunities Fund III, LP) (Fully diluted 17.4%)(8)		21,883	22,874

					27,093	23,615

Dos Rios Partners(12)(13)	April 25, 2013	Investment Partnership
			LP Interests (Dos Rios Partners, LP) (Fully diluted 20.2%)		5,846	7,046
			LP Interests (Dos Rios Partners—A, LP) (Fully diluted 6.4%)		1,856	2,237

					7,702	9,283

East Teak Fine Hardwoods, Inc.	April 13, 2006	Distributor of Hardwood Products
			Common Stock (6,250 shares)(8)		480	630

EIG Fund Investments(12)(13)	November 6, 2015	Investment Partnership
			LP Interests (EIG Global Private Debt Fund—A, L.P.) (Fully diluted 11.1%)		461	413

Freeport Financial Funds(12)(13)	June 13, 2013	Investment Partnership
			LP Interests (Freeport Financial SBIC Fund LP) (Fully diluted 9.3%)(8)		5,974	5,742
			LP Interests (Freeport First Lien Loan Fund III LP) (Fully diluted 6.0%)(8)		8,558	8,506

					14,532	14,248

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Schedule of Investments (Continued)

June 30, 2018

(dollars in thousands)

(unaudited)

Portfolio Company(1)(20)	Investment Date(27)	Business Description	Type of Investment(2)(3)(26)


Gault Financial, LLC (RMB Capital, LLC)	November 21, 2011	Purchases and Manages Collection of Healthcare and other Business Receivables
			8% Secured Debt (Maturity—January 1, 2019)	12,333	12,333	11,382
			Warrants (29,032 equivalent units; Expiration—February 9, 2022; Strike price—$0.01 per unit)		400	—

					12,733	11,382

Harris Preston Fund Investments(12)(13)	August 9, 2017	Investment Partnership
			LP Interests (HPEP 3, L.P.) (Fully diluted 8.2%)		1,460	1,460

Hawk Ridge Systems, LLC(13)	December 2, 2016	Value-Added Reseller of Engineering Design and Manufacturing Solutions
			10.5% Secured Debt (Maturity—December 2, 2021)	14,300	14,188	14,300
			Preferred Member Units (226 units)(8)		2,850	6,220
			Preferred Member Units (HRS Services, ULC) (226 units)		150	330

					17,188	20,850

Houston Plating and Coatings, LLC	January 8, 2003	Provider of Plating and Industrial Coating Services
			8% Unsecured Convertible Debt (Maturity—May 1, 2022)	3,000	3,000	3,380
			Member Units (318,462 units)(8)		2,236	7,070

					5,236	10,450

I-45 SLF LLC(12)(13)	October 20, 2015	Investment Partnership
			Member Units (Fully diluted 20.0%; 24.4% profits interest)(8)		16,200	16,687

L.F. Manufacturing Holdings, LLC(10)	December 23, 2013	Manufacturer of Fiberglass Products
			Member Units (2,179,001 units)		2,019	2,000

Meisler Operating LLC	June 7, 2017	Provider of Short-term Trailer and Container Rental
			LIBOR Plus 8.50% (Floor 1.00%), Current Coupon 10.82%, Secured Debt (Maturity—June 7, 2022)(9)	20,800	20,612	20,612
			Member Units (Milton Meisler Holdings LLC) (48,555 units)		4,855	5,570

					25,467	26,182

OnAsset Intelligence, Inc.	April 18, 2011	Provider of Transportation Monitoring / Tracking Products and Services
			12% PIK Secured Debt (Maturity—June 30, 2021)(19)	5,406	5,406	5,406
			10% PIK Unsecured Debt (Maturity—June 30, 2021)(19)	50	50	50
			Preferred Stock (912 shares)		1,981	—
			Warrants (5,333 equivalent shares; Expiration—April 18, 2021; Strike price—$0.01 per share)		1,919	—

					9,356	5,456