UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2011~~March 31, 2012

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		41-2230745
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1300 Post Oak Boulevard, Suite 800
Houston, TX		77056
(Address of principal executive offices)		(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 x 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 o		Accelerated filer x

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 x

The number of shares outstanding of the issuer’s common stock as of ~~November 3, 2011~~May 2, 2012 was ~~26,669,348.~~27,098,311.

Table of Contents

TABLE OF CONTENTS

	PART I FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets — ~~September 30, 2011~~March 31, 2012 (unaudited) and December 31, ~~2010~~2011	1

	Consolidated Statements of Operations (unaudited) — Three ~~and nine~~ months ended ~~September 30,~~March 31, 2012 and 2011 ~~and 2010~~	2

	Consolidated Statements of Changes in Net Assets (unaudited) — ~~Nine~~Three months ended ~~September 30,~~March 31, 2012 and 2011 ~~and 2010~~	3

	Consolidated Statements of Cash Flows (unaudited) — ~~Nine~~Three months ended ~~September 30,~~March 31, 2012 and 2011 ~~and 2010~~	4

	Consolidated Schedule of Investments (unaudited) — ~~September 30, 2011~~March 31, 2012	5

	Consolidated Schedule of Investments — December 31, ~~2010~~2011	1517

	Notes to Consolidated Financial Statements (unaudited)	2730

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4852

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	6568

Item 4.	Controls and Procedures	6568

	PART II OTHER INFORMATION

Item 1.	Legal Proceedings	6568

Item 1A.	Risk Factors	6568

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6669

Item 6.	Exhibits	6670

	Signatures	6771

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

MAIN STREET CAPITAL CORPORATION

Consolidated Balance Sheets

(in thousands, except shares and per share amounts)

September 30, 2011

December 31, 2010

(Unaudited)

ASSETS

Portfolio investments at fair value:

Control investments (cost: $193,683,126 and $161,009,443 as of September 30, 2011 and December 31, 2010, respectively)

$
219,026,676

$
174,596,394

Affiliate investments (cost: $95,369,438 and $65,650,789 as of September 30, 2011 and December 31, 2010, respectively)

128,108,793

80,206,804

Non-Control/Non-Affiliate investments (cost: $151,074,694 and $91,911,304 as of September 30, 2011 and December 31, 2010, respectively)

147,937,952

91,956,221

Investment in affiliated Investment Manager (cost: $4,284,042 as of September 30, 2011 and December 31, 2010)

1,916,322

2,051,655

Total portfolio investments (cost: $444,411,300 and $322,855,578 as of September 30, 2011 and December 31, 2010, respectively)

496,989,743

348,811,074

Marketable securities and idle funds investments (cost: $137,509,250 and $67,970,907 as of September 30, 2011 and December 31, 2010, respectively)

134,727,694

68,752,858

Total investments (cost: $581,920,550 and $390,826,485 as of September 30, 2011 and December 31, 2010, respectively)

631,717,437

417,563,932

Cash and cash equivalents

25,126,457

22,334,340

Deferred tax asset, net

—

1,958,593

Interest receivable and other assets

5,322,673

4,523,792

Deferred financing costs (net of accumulated amortization of $1,985,141 and $1,504,584 as of September 30, 2011 and December 31, 2010, respectively)

3,789,058

2,543,645

Total assets

$
665,955,625

$
448,924,302

LIABILITIES

SBIC debentures (par: $220,000,000 and $180,000,000 as of September 30, 2011 and December 31, 2010, respectively; par of $95,000,000 is recorded at a fair value of $76,272,925 and $70,557,975 as of September 30, 2011 and December 31, 2010, respectively)

$
201,272,925

$
155,557,975

Credit facility

114,000,000

39,000,000

Interest payable

920,931

3,194,870

Dividend payable

3,134,611

—

Deferred tax liability, net

1,043,210

—

Payable to affiliated Investment Manager

3,105,001

15,124

Accounts payable and other liabilities

1,443,061

1,173,295

Total liabilities

324,919,739

198,941,264

Commitments and contingencies

NET ASSETS

Common stock, $0.01 par value per share (150,000,000 shares authorized; 23,219,348 and 18,797,444 issued and outstanding as of September 30, 2011 and December 31, 2010, respectively)

232,193

187,975

Additional paid-in capital

301,269,008

224,485,165

Accumulated net investment income

9,203,152

9,261,405

Accumulated net realized loss from investments

(19,624,729
)
(20,541,897
)
Net unrealized appreciation, net of income taxes

45,460,492

32,141,997

Total Net Asset Value

336,540,116

245,534,645

Noncontrolling interest

4,495,770

4,448,393

Total net assets including noncontrolling interests

341,035,886

249,983,038

Total liabilities and net assets

$
665,955,625

$
448,924,302

NET ASSET VALUE PER SHARE

$
14.49

$
13.06

	March 31, 2012			December 31, 2011
	(Unaudited)
ASSETS

Portfolio investments at fair value:
Control investments (cost: $180,625 and $206,787 as of March 31, 2012 and December 31, 2011, respectively)	$	220,048		$	238,924
Affiliate investments (cost: $102,868 and $110,157 as of March 31, 2012 and December 31, 2011, respectively)	130,715			146,405
Non-Control/Non-Affiliate investments (cost: $313,646 and $275,061 as of March 31, 2012 and December 31, 2011, respectively)	313,334			270,895
Investment in affiliated Investment Manager (cost: $2,668 and $4,284 as of March 31, 2012 and December 31, 2011, respectively)	202			1,869

Total portfolio investments (cost: $599,807 and $596,289 as of March 31, 2012 and December 31, 2011, respectively)	664,299			658,093
Marketable securities and idle funds investments (cost: $14,066 and $25,935 as of March 31, 2012 and December 31, 2011, respectively)	14,345			26,242

Total investments (cost: $613,873 and $622,224 as of March 31, 2012 and December 31, 2011, respectively)	678,644			684,335

Cash and cash equivalents	88,955			42,650
Interest receivable and other assets	7,899			6,539
Deferred financing costs (net of accumulated amortization of $2,395 and $2,167 as of March 31, 2012 and December 31, 2011, respectively)	3,945			4,168

Total assets	$	779,443		$	737,692

LIABILITIES

SBIC debentures (par: $220,000 as of March 31, 2012 and December 31, 2011; par of $95,000 is recorded at a fair value of $76,586 and $76,887 as of March 31, 2012 and December 31, 2011, respectively)	$	201,586		$	201,887
Credit facility	138,000			107,000
Interest payable	1,326			3,984
Dividend payable	3,789			2,856
Deferred tax liability, net	4,825			3,776
Payable to affiliated Investment Manager	1,520			4,831
Accounts payable and other liabilities	2,861			2,170

Total liabilities	353,907			326,504
Commitments and contingencies

NET ASSETS

Common stock, $0.01 par value per share (150,000,000 shares authorized; 27,061,484 and 26,714,384 issued and outstanding as of March 31, 2012 and December 31, 2011, respectively)	270			267
Additional paid-in capital	367,242			360,164
Accumulated net investment income, net of cumulative dividends of $87,348 and $79,414 as of March 31, 2012 and December 31, 2011, respectively	17,446			12,531
Accumulated net realized gain from investments, net of cumulative dividends of $16,911 and $13,804 as of March 31, 2012 and December 31, 2011, respectively	(15,414		)	(20,445		)
Net unrealized appreciation, net of income taxes	55,992			53,194

Total Net Asset Value	425,536			405,711

Noncontrolling interest	—			5,477

Total net assets including noncontrolling interests	425,536			411,188

Total liabilities and net assets	$	779,443		$	737,692

NET ASSET VALUE PER SHARE	$	15.72		$	15.19

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,						Three Months Ended March 31,
	2011			2010			2011			2010			2012			2011

INVESTMENT INCOME:
Interest, fee and dividend income:
Control investments	$	6,361,495		$	4,497,476		$	18,502,354		$	12,625,127		$	5,767		$	5,650
Affiliate investments	3,185,316			1,975,131			8,468,026			5,737,576			5,673			2,146
Non-Control/Non-Affiliate investments	4,700,084			2,124,603			12,312,054			4,674,031			8,147			5,526
Total interest, fee and dividend income	14,246,895			8,597,210			39,282,434			23,036,734			19,587			13,322
Interest from marketable securities, idle funds and other	2,839,438			408,745			7,285,774			1,794,279			972			52
Total investment income	17,086,333			9,005,955			46,568,208			24,831,013			20,559			13,374
EXPENSES:
Interest	(3,715,733		)	(2,283,262		)	(9,881,745		)	(6,388,367		)	(3,864		)	(2,902		)
General and administrative	(478,960		)	(367,074		)	(1,585,503		)	(1,038,972		)	(608		)	(507		)
Expenses reimbursed to affiliated Investment Manager	(1,949,656		)	(1,151,713		)	(6,287,068		)	(3,634,511		)	(2,657		)	(2,130		)
Share-based compensation	(580,622		)	(446,342		)	(1,466,416		)	(1,049,258		)	(581		)	(443		)
Total expenses	(6,724,971		)	(4,248,391		)	(19,220,732		)	(12,111,108		)	(7,710		)	(5,982		)
NET INVESTMENT INCOME	10,361,362			4,757,564			27,347,476			12,719,905			12,849			7,392

NET REALIZED GAIN (LOSS) FROM INVESTMENTS:
NET REALIZED GAIN FROM INVESTMENTS:
Control investments	407,168			(1,868,465		)	407,168			(3,587,638		)	(1,965		)	—
Affiliate investments													9,232			—
Non-Control/Non-Affiliate investments	750,000			156,476			771,460			156,476			163			—
Marketable securities and idle funds investments	290,582			179,633			540,236			493,581			708			—
Total net realized gain (loss) from investments	1,447,750			(1,532,356		)	1,718,864			(2,937,581		)
Total net realized gain from investments													8,138			—
NET REALIZED INCOME	11,809,112			3,225,208			29,066,340			9,782,324			20,987			7,392

NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION):
Portfolio investments	10,700,680			5,314,507			26,191,990			11,386,598			4,507			4,018
Marketable securities and idle funds investments	(4,250,244		)	335,205			(3,563,510		)	103,924			(29		)	115
SBIC debentures	(3,635,658		)	3,035,336			(5,714,950		)	4,792,390			301			39
Investment in affiliated Investment Manager	(48,327		)	(55,462		)	(135,333		)	(341,658		)	(51		)	(41		)
Total net change in unrealized appreciation	2,766,451			8,629,586			16,778,197			15,941,254			4,728			4,131

Income tax provision	(139,490		)	(358,647		)	(3,302,102		)	(779,907		)	(1,876		)	(1,200		)
Bargain purchase gain	—			—			—			4,890,582
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	14,436,073			11,496,147			42,542,435			29,834,253			23,839			10,323
Noncontrolling interest	—			(552,845		)	(157,600		)	(961,740		)	(54		)	—
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ATTRIBUTABLE TO COMMON STOCK	$	14,436,073		$	10,943,302		$	42,384,835		$	28,872,513		$	23,785		$	10,323

NET INVESTMENT INCOME PER SHARE - BASIC AND DILUTED	$	0.44		$	0.28		$	1.23		$	0.81		$	0.48		$	0.38
NET REALIZED INCOME PER SHARE - BASIC AND DILUTED	$	0.50		$	0.19		$	1.30		$	0.62		$	0.78		$	0.38
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ATTRIBUTABLE TO COMMON STOCK PER SHARE - BASIC AND DILUTED	$	0.62		$	0.65		$	1.94		$	1.87		$	0.89		$	0.54
DIVIDENDS PAID PER SHARE	$	0.39		$	0.38		$	1.16		$	1.13		$	0.41		$	0.38
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED	23,194,896			16,878,088			21,824,775			15,469,890			26,871,084			19,217,690

The accompanying notes are an integral part of these financial statements

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Changes in Net Assets

(in thousands, except shares)

(Unaudited)

															Net Unrealized									Total Net												Accumulated			Net Unrealized									Total Net
												Accumulated			Appreciation from									Assets									Accumulated			Net Realized			Appreciation from									Assets
	Common Stock					Additional			Accumulated			Net Realized			Investments,									Including			Common Stock			Additional			Net Investment			Gain From			Investments,									Including
	Number		Par			Paid-In			Net Investment			Loss From			Net of Income			Total Net			Noncontrolling			Noncontrolling			Number	Par		Paid-In			Income, Net			Investments,			Net of Income			Total Net			Noncontrolling			Noncontrolling
	of Shares		Value			Capital			Income			Investments			Taxes			Asset Value			Interest			Interest			of Shares	Value		Capital			of Dividends			Net of Dividends			Taxes			Asset Value			Interest			Interest

Balances at December 31, 2009	10,842,447		$	108,425		$	123,534,156		$	7,269,866		$	(15,922,020	)	$	14,669,704		$	129,660,131		$	—		$	129,660,131

MSC II exchange offer and related transactions	1,246,803		12,468			20,080,623			4,890,582			—			—			24,983,673			3,237,210			28,220,883
Public offering of common stock, net of offering costs	6,095,000		60,950			85,864,532			—			—			—			85,925,482			—			85,925,482
Share-based compensation	—		—			1,049,258			—			—			—			1,049,258			—			1,049,258
Dividend reinvestment	347,474		3,474			5,388,728			—			—			—			5,392,202			—			5,392,202
Issuance of restricted stock	157,277		1,573			(1,573		)	—			—			—			—			—			—
Purchase of vested stock for employee payroll tax withholding	(22,814	)	(228		)	(369,345		)	—			—			—			(369,573		)	—			(369,573		)
Adjustment to investment in Investment Manager related to the MSC II Exchange Offer	—		—			(13,715,958		)	—			—			—			(13,715,958		)	—			(13,715,958		)
Dividends to stockholders	—		—			—			(17,530,548		)	(1,685,972		)	—			(19,216,520		)	—			(19,216,520		)
Net increase resulting from operations	—		—			—			12,719,905			(2,937,581		)	15,161,347			24,943,671			—			24,943,671
Noncontrolling interest	—		—			—			—			—			(961,740		)	(961,740		)	961,740			—

Balances at September 30, 2010	18,666,187		$	186,662		$	221,830,421		$	7,349,805		$	(20,545,573	)	$	28,869,311		$	237,690,626		$	4,198,950		$	241,889,576

Balances at December 31, 2010	18,797,444		$	187,975		$	224,485,165		$	9,261,405		$	(20,541,897	)	$	32,141,997		$	245,534,645		$	4,448,393		$	249,983,038		18,797,444	$	188	$	224,485		$	9,262		$	(20,542	)	$	32,142		$	245,535		$	4,448		$	249,983

Public offering of common stock, net of offering costs	4,025,000		40,250			70,273,893			—			—			—			70,314,143			—			70,314,143			4,025,000	40		70,310			—			—			—			70,350			—			70,350
Share-based compensation	—		—			1,466,416			—			—			—			1,466,416			—			1,466,416			—	—		443			—			—			—			443			—			443
Purchase of vested stock for employee payroll tax withholding	(32,725	)	(327		)	(674,498		)	—			—			—			(674,825		)				(674,825		)
Dividend reinvestment	303,659		3,036			5,719,291			—			—			—			5,722,327			—			5,722,327			125,122	1		2,408			—			—			—			2,409			—			2,409
Issuance of restricted stock	125,970		1,259			(1,259		)	—			—			—			—			—			—
Distributions to noncontrolling interest	—		—			—			—			—			—			—			(110,223		)	(110,223		)	—	—		—			—			—			—			—			(110		)	(110		)
Dividends to stockholders	—		—			—			(27,405,729		)	(801,696		)	—			(28,207,425		)	—			(28,207,425		)	—	—		—			(10,048		)	—			—			(10,048		)	—			(10,048		)
Net increase resulting from operations	—		—			—			27,347,476			1,718,864			13,476,095			42,542,435			—			42,542,435			—	—		—			7,392			—			2,931			10,323			—			10,323
Noncontrolling interest	—		—			—			—			—			(157,600		)	(157,600		)	157,600			—			—	—		—			—			—			—			—			—			—

Balances at September 30, 2011	23,219,348		$	232,193		$	301,269,008		$	9,203,152		$	(19,624,729	)	$	45,460,492		$	336,540,116		$	4,495,770		$	341,035,886
Balances at March 31, 2011																											22,947,566	$	229	$	297,646		$	6,606		$	(20,542	)	$	35,073		$	319,012		$	4,338		$	323,350

Balances at December 31, 2011																											26,714,384	$	267	$	360,164		$	12,531		$	(20,445	)	$	53,194		$	405,711		$	5,477		$	411,188

MSC II noncontrolling interest acquisition																											229,634	2		5,413			—			—			—			5,415			(5,417		)	(2		)
Adjustment to investment in Investment Manager related to MSC II noncontrolling interest acquisition																											—	—		(1,616		)	—			—			—			(1,616		)	—			(1,616		)
Share-based compensation																											—	—		581			—			—			—			581			—			581
Dividend reinvestment																											117,466	1		2,700			—			—			—			2,701			—			2,701
Distributions to noncontrolling interest																											—	—		—			—			—			—			—			(114		)	(114		)
Dividends to stockholders																											—	—		—			(7,934		)	(3,107		)	—			(11,041		)	—			(11,041		)
Net increase resulting from operations																											—	—		—			12,849			8,138			2,852			23,839			—			23,839
Noncontrolling interest																											—	—		—			—			—			(54		)	(54		)	54			—

Balances at March 31, 2012																											27,061,484	$	270	$	367,242		$	17,446		$	(15,414	)	$	55,992		$	425,536		$	—		$	425,536

The accompanying notes are an integral part of these financial statements

Table of Contents

MAIN STREET CAPITAL CORPORATION

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

							Three Months Ended March 31,
	Nine Months Ended September 30,						2012			2011
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in net assets resulting from operations	$	42,542,435		$	29,834,253		$	23,839		$	10,323
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:
Net change in unrealized appreciation	(16,778,197		)	(15,941,254		)	(4,728		)	(4,131		)
Net realized (gain) loss from investments	(1,718,864		)	2,937,581
Bargain purchase gain	—			(4,890,582		)
Net realized gain from investments							(8,138		)	—
Accretion of unearned income	(4,040,727		)	(1,574,423		)	(4,715		)	(1,557		)
Net payment-in-kind interest accrual	(2,998,424		)	(1,412,345		)
Net payment-in-kind interest							(628		)	(561		)
Cumulative dividends							(67		)	(386		)
Share-based compensation expense	1,466,416			1,049,258			581			443
Amortization of deferred financing costs	480,557			319,473			228			146
Deferred taxes	3,001,803			629,607			1,049			1,150
Changes in other assets and liabilities:
Interest receivable and other assets	(1,273,071		)	(943,967		)	(246		)	(1,206		)
Interest payable	(2,273,939		)	(1,729,091		)	(2,658		)	(2,332		)
Payable to affiliated Investment Manager	3,089,877			493,357			(3,311		)	1,154
Accounts payable and other liabilities	269,766			(52,279		)	490			559
Deferred fees and other	1,237,740			1,422,969			220			523
Net cash provided by operating activities	23,005,372			10,142,557			1,916			4,125

CASH FLOWS FROM INVESTING ACTIVITIES
Investments in portfolio companies	(152,547,821		)	(93,088,914		)	(88,439		)	(58,260		)
Principal payments received on loans and debt securities in portfolio companies	43,834,237			20,922,671			70,939			13,186
Proceeds from sale of equity investments and related notes in portfolio companies	886,176			3,151,500			25,182			—
Cash acquired in MSC II exchange offer	—			2,489,920
Investments in marketable securities and idle funds investments	(133,698,255		)	(62,004,440		)	(5,592		)	(25,039		)
Proceeds from marketable securities and idle funds investments	57,859,770			29,154,403			18,827			3,021
Net cash used in investing activities	(183,665,893		)	(99,374,860		)
Net cash provided by (used in) investing activities							20,917			(67,092		)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from public offering of common stock, net of offering costs	70,314,143			85,925,482			—			70,350
Distributions to noncontrolling interest	(110,223		)	—			(114		)	(110		)
Dividends paid to stockholders	(19,350,487		)	(11,491,053		)	(8,157		)	(4,655		)
Net change in DRIP deposit							750			(800		)
Proceeds from issuance of SBIC debentures	40,000,000			45,000,000			—			30,000
Proceeds from credit facility	144,000,000			36,650,000			63,000			41,000
Repayments on credit facility	(69,000,000		)	(36,650,000		)	(32,000		)	(65,000		)
Purchase of vested stock for employee payroll tax withholding	(674,825		)	(369,573		)
Payment of deferred loan costs and SBIC debenture fees	(1,725,970		)	(2,118,129		)	(7		)	(1,088		)
Net cash provided by financing activities	163,452,638			116,946,727			23,472			69,697

Net increase in cash and cash equivalents	2,792,117			27,714,424			46,305			6,730
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	22,334,340			30,619,998			42,650			22,334
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	25,126,457		$	58,334,422		$	88,955		$	29,064

The accompanying notes are an integral part of these financial statements

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

~~September 30, 2011~~March 31, 2012

(in thousands)

(Unaudited)

Portfolio Company/Type of Investment (1) (2)

Industry

Principal (6)

Cost (6)

Fair Value

Control Investments (3)

Café Brazil, LLC

Casual Restaurant Group

12% Secured Debt (Maturity - April 20, 2013)

1,600,000

1,598,553

1,600,000

Member Units (Fully diluted 41.0%) (7)

41,837

3,430,000

1,640,390

5,030,000

California Healthcare Medical Billing, Inc.

Healthcare Billing and Records Management

12% Secured Debt (Maturity - October 17, 2015)

8,623,000

8,275,075

8,529,138

Warrants (Fully diluted 20.1%)

1,193,333

3,380,333

Common Stock (Fully diluted 9.9%)

1,176,667

1,560,000

10,645,075

13,469,471

CBT Nuggets, LLC

Produces and Sells IT Certification Training Videos

14% Secured Debt (Maturity - December 31, 2013)

2,225,000

2,225,000

2,225,000

Member Units (Fully diluted 40.8%) (7)

1,299,520

4,590,000

3,524,520

6,815,000

Ceres Management, LLC (Lamb’s)

Aftermarket Automotive Services Chain

14% Secured Debt (Maturity - May 31, 2013)

3,770,000

3,745,757

3,745,757

9.5% Secured Debt (Lamb’s Real Estate Investment I, LLC) (Maturity - October 1, 2025)

1,126,833

1,126,833

1,126,833

Member Units (Fully diluted 79%)

4,423,000

2,049,664

Member Units (Lamb’s Real Estate Investment I, LLC) (Fully diluted 100%)

625,000

750,000

9,920,590

7,672,254

Condit Exhibits, LLC

Tradeshow Exhibits/Custom Displays

9% Current / 9% PIK Secured Debt (Maturity - July 1, 2013)

4,430,948

4,401,916

4,401,916

Warrants (Fully diluted 47.9%)

320,000

400,000

4,721,916

4,801,916

Currie Acquisitions, LLC

Consumer Products

12% Secured Debt (Maturity - March 1, 2015)

4,750,000

4,075,040

2,075,040

Warrants (Fully diluted 47.3%)

2,566,204

—

6,641,244

2,075,040

Gulf Manufacturing, LLC

Industrial Metal Fabrication

9% PIK Secured Debt (Maturity - June 30, 2017)

1,185,131

1,185,131

1,185,131

Member Units (Fully diluted 34.2%) (7)

2,979,813

8,860,000

4,164,944

10,045,131

Harrison Hydra-Gen, Ltd.

Manufacturer of Hydraulic Generators

12% Secured Debt (Maturity - June 4, 2015)

5,507,375

4,908,144

5,230,000

Preferred Stock (8% cumulative) (7)

1,060,666

1,060,666

Warrants (Fully diluted 35.2%)

717,640

1,710,000

6,686,450

8,000,666

Hawthorne Customs & Dispatch Services, LLC

Transportation/ Logistics

Member Units (Fully diluted 47.62%) (7)

589,398

1,080,000

Member Units (Wallisville Real Estate, LLC) (Fully diluted 47.62%) (7)

1,214,784

1,214,784

1,804,182

2,294,784

Hydratec, Inc.

Agricultural Services

Common Stock (Fully diluted 92.5%) (7)

7,090,911

11,455,911

Indianapolis Aviation Partners, LLC

FBO / Aviation Support Services

12% Secured Debt (Maturity - September 15, 2014)

4,270,000

3,983,533

4,120,000

Warrants (Fully diluted 30.1%)

1,129,286

1,410,286

5,112,819

5,530,286

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Control Investments (3)

Café Brazil, LLC	Casual Restaurant Group
		12% Secured Debt (Maturity - April 20, 2013)	1,200	1,199	1,200
		Member Units (Fully diluted 41.0%) (7)		42	3,430
				1,241	4,630

California Healthcare Medical Billing, Inc.	Healthcare Services
		12% Secured Debt (Maturity - October 17, 2015)	8,853	8,538	8,761
		Warrants (Fully diluted 21.0%)		1,193	3,380
		Common Stock (Fully diluted 9.6%)		1,177	1,560
				10,908	13,701

CBT Nuggets, LLC	Produces and Sells IT Training Certification Videos
		14% Secured Debt (Maturity - December 31, 2013)	850	850	850
		Member Units (Fully diluted 40.8%) (7)		1,300	6,360
				2,150	7,210

Ceres Management, LLC (Lambs)	Aftermarket Automotive Services Chain
		14% Secured Debt (Maturity - May 31, 2013)	4,000	3,982	3,982
		9.5% Secured Debt (Lamb’s Real Estate Investment I, LLC) (Maturity - October 1, 2025)	1,102	1,102	1,102
		Member Units (Fully diluted 79.0%)		5,273	540
		Member Units (Lamb’s Real Estate Investment I, LLC) (Fully diluted 100%)		625	800
				10,982	6,424

Condit Exhibits, LLC	Tradeshow Exhibits / Custom Displays
		9% Current / 9% PIK Secured Debt (Maturity - July 1, 2013)	4,661	4,639	4,639
		Warrants (Fully diluted 47.9%)		320	560
				4,959	5,199

Gulf Manufacturing, LLC	Industrial Metal Fabrication
		9% PIK Secured Debt (Maturity - June 30, 2017)	1,044	1,044	1,044
		Member Units (Fully diluted 34.2%) (7)		2,980	11,240
				4,024	12,284

Harrison Hydra-Gen, Ltd.	Manufacturer of Hydraulic Generators
		12% Secured Debt (Maturity - June 4, 2015)	5,024	4,554	4,746
		Preferred stock (8% cumulative) (7)		1,103	1,103
		Common Equity (Fully diluted 34.5%)		718	2,620
				6,375	8,469

Hawthorne Customs and Dispatch Services, LLC	Transportation / Logistics
		Member Units (Fully diluted 47.6%) (7)		589	1,410
		Member Units (Wallisville Real Estate, LLC) (Fully diluted 59.1%) (7)		1,215	1,215
				1,804	2,625

Hydratec, Inc.	Designer and Installer of Micro - Irrigation Systems
		Common Stock (Fully diluted 92.5%) (7)		7,092	13,241
Indianapolis Aviation Partners, LLC	Fixed Base Operator
		12% Secured Debt (Maturity - September 15, 2014)	4,500	4,253	4,350
		Warrants (Fully diluted 30.1%)		1,129	1,650
				5,382	6,000

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

~~September 30, 2011~~March 31, 2012

(in thousands)

(Unaudited)

Portfolio Company/Type of Investment (1) (2)

Industry

Principal (6)

Cost (6)

Fair Value

Control Investments (3)

Jensen Jewelers of Idaho, LLC

Retail Jewelry

Prime Plus 2%, Current Coupon 5.25%, Secured Debt (Maturity - November 14, 2013)

2,260,000

2,259,642

2,260,000

13% Current / 6% PIK Secured Debt (Maturity - November 14, 2013)

2,344,898

2,344,898

2,344,898

Member Units (Fully diluted 60.8%) (7)

811,000

1,750,000

5,415,540

6,354,898

Lighting Unlimited, LLC

Commercial and Residential Lighting Products and Design Services

8% Secured Debt (Maturity - August 22, 2012)

2,000,000

1,978,300

1,978,300

Preferred Stock (non-voting)

510,098

510,098

Warrants (Fully diluted 7.1%)

54,000

—

Common Stock (Fully diluted 70.0%)

100,000

100,000

2,642,398

2,588,398

Mid-Columbia Lumber Products, LLC

Specialized Lumber Products

10% Secured Debt (Maturity - April 1, 2012)

1,250,000

1,250,000

1,250,000

12% Secured Debt (Maturity - December 18, 2011)

3,670,000

3,659,291

3,670,000

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

1,073,500

1,073,500

1,073,500

Warrants (Fully diluted 9.2%)

250,000

890,000

Member Units (Fully diluted 42.9%)

812,000

930,000

Member Units (Mid - Columbia Real Estate, LLC) (Fully diluted 50.0%) (7)

250,000

810,000

7,294,791

8,623,500

NAPCO Precast, LLC

Precast Concrete Manufacturing

Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - February 1, 2013) (8)

3,384,615

3,374,013

3,384,615

18% Secured Debt (Maturity - February 1, 2013)

5,923,077

5,880,184

5,923,077

Member Units (Fully diluted 35.3%) (7)

2,020,000

3,240,000

11,274,197

12,547,692

NRI Clinical Research, LLC

Clinical Research

14% Secured Debt (Maturity - September 8, 2016)

6,250,000

5,877,436

5,877,436

Warrants (Fully diluted 12.5%)

251,724

251,724

Member Units (Fully diluted 24.8%)

500,000

500,000

6,629,160

6,629,160

NTS Holdings, Inc.

Trench & Traffic Safety Equipment

12% Secured Debt (Maturity - April 30, 2015)

5,770,000

5,740,092

5,740,092

Preferred stock (12% cumulative, compounded quarterly) (7)

11,579,604

11,579,604

Common Stock (Fully diluted 72.3%)

1,621,255

1,460,000

18,940,951

18,779,696

OMi Holdings, Inc.

Manufacturer of Overhead Cranes

12% Secured Debt (Maturity - April 1, 2013)

8,329,422

8,299,325

8,299,325

Common Stock (Fully diluted 48.0%)

1,080,000

1,580,000

9,379,325

9,879,325

Pegasus Research Group, LLC (Televerde)

Telemarketing and Data Services

13% Current / 3% PIK Secured Debt (Maturity - January 6, 2016)

6,159,915

6,085,425

6,085,425

Member Units (Fully diluted 43.7%)

1,250,000

1,250,000

7,335,425

7,335,425

PPL RVs, Inc.

Recreational Vehicle Parts and Consignment

18% Secured Debt (Maturity - June 10, 2015)

4,234,526

4,183,598

4,234,526

Member Units (Fully diluted 51.1%)

2,150,000

3,980,000

6,333,598

8,214,526

Principle Environmental, LLC

Noise Abatement Products/Services

12% Secured Debt (Maturity - February 1, 2016)

5,500,000

4,315,010

4,690,000

12% Current / 2% PIK Secured Debt (Maturity - February 1, 2016)

2,256,556

2,212,417

2,212,417

Warrants (Fully diluted 15.0%)

1,200,000

1,910,000

Member Units (Fully diluted 25.0%)

2,000,000

3,280,000

9,727,427

12,092,417

River Aggregates, LLC

Construction Aggregates

12% Secured Debt (Maturity - March 30, 2016)

3,270,000

3,103,430

3,103,430

Warrants (Fully diluted 10.0%)

122,500

122,500

Member Units (Fully diluted 45%)

550,000

550,000

3,775,930

3,775,930

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Control Investments (3)

Jensen Jewelers of Idaho, LLC	Retail Jewelry Store
		Prime Plus 2%, Current Coupon 5.25%, Secured Debt (Maturity - November 14, 2013) (8)	2,260	2,260	2,260
		13% Current / 6% PIK Secured Debt (Maturity - November 14, 2013)	2,345	2,345	2,345
		Member Units (Fully diluted 60.8%) (7)		811	1,750
				5,416	6,355

Lighting Unlimited, LLC	Commercial and Residential Lighting Products and Design Services
		8% Secured Debt (Maturity - August 22, 2012)	2,000	1,990	1,990
		Preferred Stock (non-voting)		510	510
		Warrants (Fully diluted 7.1%)		54	60
		Common Stock (Fully diluted 70.0%)		100	580
				2,654	3,140

Mid-Columbia Lumber Products, LLC	Manufacturer of Finger - Jointed Lumber Products
		10% Secured Debt (Maturity - December 18, 2014)	1,250	1,250	1,250
		12% Secured Debt (Maturity - December 18, 2014)	3,900	3,900	3,900
		9.5% Secured Debt (Mid - Columbia Real Estate, LLC) (Maturity - May 13, 2025)	1,051	1,051	1,051
		Warrants (Fully diluted 9.2%)		250	890
		Member Units (Fully diluted 42.9%)		812	930
		Member Units (Mid - Columbia Real Estate, LLC) (Fully diluted 50.0%) (7)		250	810
				7,513	8,831

NAPCO Precast, LLC	Precast Concrete Manufacturing
		Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - February 1, 2013) (8)	3,385	3,378	3,378
		18% Secured Debt (Maturity - February 1, 2013)	5,173	5,149	5,149
		Member Units (Fully diluted 46.3%) (7)		2,975	4,195
				11,502	12,722

NRI Clinical Research, LLC	Clinical Research Center
		14% Secured Debt (Maturity - September 8, 2016)	5,265	4,973	4,973
		Warrants (Fully diluted 12.5%)		252	390
		Member Units (Fully diluted 24.8%)		500	770
				5,725	6,133

NRP Jones, LLC	Manufacturer of Hoses, Fittings and Assemblies
		12% Secured Debt (Maturity - December 22, 2016)	12,100	11,079	11,079
		Warrants (Fully diluted 12.2%)		817	817
		Member Units (Fully diluted 43.2%)		2,900	2,900
				14,796	14,796

OMi Holdings, Inc.	Manufacturer of Overhead Cranes
		12% Secured Debt (Maturity - April 1, 2013)	7,618	7,600	7,600
		Common Stock (Fully diluted 48.0%)		1,080	3,550
				8,680	11,150

Pegasus Research Group, LLC (Televerde)	Telemarketing and Data Services
		13% Current / 5% PIK Secured Debt (Maturity - January 6, 2016)	5,691	5,630	5,630
		Member Units (Fully diluted 43.7%)		1,250	1,250
				6,880	6,880

PPL RVs, Inc.	Recreational Vehicle Dealer
		18% Secured Debt (Maturity - June 10, 2015)	4,450	4,404	4,450
		Common Stock (Fully diluted 51.1%)		2,150	3,980
				6,554	8,430

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

~~September 30, 2011~~March 31, 2012

(in thousands)

(Unaudited)

Portfolio Company/Type of Investment (1) (2)

Industry

Principal (6)

Cost (6)

Fair Value

Control Investments (3)

The MPI Group, LLC

Manufacturer of Custom Hollow Metal Doors, Frames and Accessories

4.5% Current / 4.5% PIK Secured Debt (Maturity - October 2, 2013)

1,033,513

1,028,715

1,028,715

6% Current / 6% PIK Secured Debt (Maturity - October 2, 2013)

5,329,167

5,202,910

5,202,910

Warrants (Fully diluted 47.1%)

895,943

—

Member Units (Non-voting)

200,000

200,000

7,327,568

6,431,625

Thermal & Mechanical Equipment, LLC

Heat Exchange / Filtration Products and Services

Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - September 25, 2014) (8)

1,415,540

1,408,287

1,408,287

13% Current / 5% PIK Secured Debt (Maturity - September 25, 2014)

4,509,680

4,458,675

4,509,680

Member Units (Fully diluted 50.0%) (7)

1,000,000

5,660,000

6,866,962

11,577,967

Uvalco Supply, LLC

Farm and Ranch Supply

Member Units (Fully diluted 42.8%) (7)

1,113,243

3,090,000

Van Gilder Insurance Corporation

Insurance Brokerage

8% Secured Debt (Maturity - January 31, 2013)

1,000,000

983,922

983,922

8% Secured Debt (Maturity - January 31, 2016)

1,806,860

1,789,641

1,789,641

13% Secured Debt (Maturity - January 31, 2016)

6,150,000

4,950,213

4,950,213

Warrants (Fully diluted 10.0%)

1,208,643

1,208,643

Common Stock (Fully diluted 15.5%)

2,499,876

2,499,876

11,432,295

11,432,295

Vision Interests, Inc.

Manufacturer/Installer of Commercial Signage

2.6% Current /10.4% PIK Secured Debt (Maturity - June 5, 2012)

9,400,000

8,424,811

5,259,409

2.6% Current /10.4% PIK Secured Debt (Maturity - June 5, 2016)

760,000

740,587

740,587

Warrants (Fully diluted 38.2%)

160,010

—

Common Stock (Fully diluted 22.3%)

372,000

—

9,697,408

5,999,996

Ziegler’s NYPD, LLC

Casual Restaurant Group

Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - October 1, 2013) (8)

1,000,000

995,441

995,441

13% Current / 5% PIK Secured Debt (Maturity - October 1, 2013)

4,986,977

4,948,426

4,948,426

Warrants (Fully diluted 46.6%)

600,000

539,500

6,543,867

6,483,367

Subtotal Control Investments (34.7% of total investments at fair value)

193,683,126

219,026,676

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Control Investments (3)

Principle Environmental, LLC	Noise Abatement Services
		12% Secured Debt (Maturity - February 1, 2016)	4,750	3,808	4,080
		12% Current / 2% PIK Secured Debt (Maturity - February 1, 2016)	3,525	3,470	3,525
		Warrants (Fully diluted 14.6%)		1,200	2,630
		Member Units (Fully diluted 25.0%)		2,000	4,510
				10,478	14,745

River Aggregates, LLC	Processor of Construction Aggregates
		12% Secured Debt (Maturity - March 30, 2016)	3,700	3,468	3,468
		Warrants (Fully diluted 20.0%)		202	100
		Member Units (Fully diluted 40.0%)		550	200
				4,220	3,768

The MPI Group, LLC	Manufacturer of Custom Hollow Metal Doors, Frames and Accessories
		4.5% Current / 4.5% PIK Secured Debt (Maturity - October 2, 2013)	1,056	1,053	1,053
		6% Current / 6% PIK Secured Debt (Maturity - October 2, 2013)	5,482	5,384	5,384
		Warrants (Fully diluted 47.1%)		896	—
		Member Units (Non-voting)		200	—
				7,533	6,437

Thermal and Mechanical Equipment, LLC	Commercial and Industrial Engineering Services
		Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - September 25, 2014) (8)	1,272	1,267	1,267
		13% Current / 5% PIK Secured Debt (Maturity - September 25, 2014)	4,053	4,013	4,053
		Member Units (Fully diluted 50.0%) (7)		1,000	6,090
				6,280	11,410

Uvalco Supply, LLC	Farm and Ranch Supply Store
		Member Units (Fully diluted 42.8%) (7)		1,113	3,110

Van Gilder Insurance Corporation	Insurance Brokerage
		8% Secured Debt (Maturity - January 31, 2013)	1,000	990	990
		8% Secured Debt (Maturity - January 31, 2016)	1,634	1,619	1,619
		13% Secured Debt (Maturity - January 31, 2016)	5,400	4,430	4,430
		Warrants (Fully diluted 10.0%)		1,209	1,209
		Common Stock (Fully diluted 15.5%)		2,500	2,500
				10,748	10,748

Vision Interests, Inc.	Manufacturer / Installer of Commercial Signage
		6.5% Current /6.5% PIK Secured Debt (Maturity - December 23, 2016)	3,051	2,986	2,986
		Series A Preferred Stock (Fully diluted 33.3%)		3,000	3,000
		Common Stock (Fully diluted 36.7%)		3,706	—
				9,692	5,986

Ziegler’s NYPD, LLC	Casual Restaurant Group
		Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - October 1, 2013) (8)	1,000	996	996
		13% Current / 5% PIK Secured Debt (Maturity - October 1, 2013)	4,353	4,328	4,328
		Warrants (Fully diluted 46.6%)		600	300
				5,924	5,624

Subtotal Control Investments (32.4% of total investments at fair value)				180,625	220,048

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

~~September 30, 2011~~March 31, 2012

(in thousands)

(Unaudited)

Portfolio Company/Type of Investment (1) (2)

Industry

Principal (6)

Cost (6)

Fair Value

Affiliate Investments (4)

American Sensor Technologies, Inc.

Manufacturer of Commercial/Industrial Sensors

9% Secured Debt (Maturity - May 31, 2012)

3,045,808

3,034,982

3,034,982

Warrants (Fully diluted 19.6%)

49,990

2,690,000

3,084,972

5,724,982

Audio Messaging Solutions, LLC

Audio Messaging Services

12% Secured Debt (Maturity - June 16, 2016)

13,475,000

12,990,614

13,341,000

Warrants (Fully diluted 9.8%)

886,933

2,620,000

13,877,547

15,961,000

Compact Power Equipment Centers LLC

Light to Medium Duty Equipment Rental

6% Current / 6% PIK Secured Debt (Maturity - December 31, 2014)

2,811,819

2,786,965

2,786,965

8% PIK Secured Debt (Maturity - December 31, 2011)

44,118

44,118

44,118

Series A Member Units (8% cumulative) (7)

836,332

836,332

Member Units (Fully diluted 10.6%)

1,147

1,147

3,668,562

3,668,562

DrillingInfo, Inc.

Information Services for the Oil and Gas Industry

12% Secured Debt (Maturity - November 20, 2014)

8,000,000

7,003,118

8,000,000

8.75% Secured Debt (Maturity - April 18, 2016)

750,000

750,000

750,000

Warrants (Fully diluted 4.9%)

1,250,000

9,580,000

Common Stock (Fully diluted 2.4%)

1,335,325

4,520,325

10,338,443

22,850,325

East Teak Fine Hardwoods, Inc.

Hardwood Products

Common Stock (Fully diluted 5.0%)

480,318

380,000

Houston Plating & Coatings, LLC

Plating & Industrial Coating

Member Units (Fully diluted 11.1%) (7)

635,000

4,740,000

Integrated Printing Solutions, LLC

Commercial Printing

13% Secured Debt (Maturity - September 23, 2016)

10,000,000

9,200,000

9,200,000

Warrants (Fully diluted 9.0%)

600,000

600,000

9,800,000

9,800,000

IRTH Holdings, LLC

Utility Technology Services

12% Secured Debt (Maturity - December 29, 2015)

5,383,940

5,297,323

5,383,940

Member Units (Fully diluted 22.3%)

850,000

2,090,000

6,147,323

7,473,940

KBK Industries, LLC

Specialty Manufacturer of Oilfield and Industrial Products

10% Secured Debt (Maturity - March 31, 2012)

139,940

139,940

139,940

14% Secured Debt (Maturity - January 23, 2014)

5,250,000

5,250,000

5,250,000

Member Units (Fully diluted 18.8%) (7)

340,833

2,540,000

5,730,773

7,929,940

Laurus Healthcare, LP

Healthcare Facilities / Services

9% Secured Debt (Maturity - May 12, 2016)

5,900,000

5,900,000

5,900,000

Class A and C Units (Fully diluted 13.1%) (7)

79,505

5,430,000

5,979,505

11,330,000

Merrick Systems, Inc.

Software and Information Technology

13% Secured Debt (Maturity - May 5, 2015)

2,900,000

2,511,022

2,680,000

Warrants (Fully diluted 6.5%)

450,000

880,000

2,961,022

3,560,000

Olympus Building Services, Inc.

Custodial/Facilities Services

12% Secured Debt (Maturity - March 27, 2014)

3,150,000

2,966,886

3,050,000

12% Current / 3% PIK Secured Debt (Maturity - March 27, 2014)

1,006,387

1,006,387

1,006,387

Warrants (Fully diluted 22.5%)

470,000

70,000

4,443,273

4,126,387

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Affiliate Investments (4)

American Sensor Technologies, Inc.	Manufacturer of Commercial / Industrial Sensors
		Warrants (Fully diluted 19.6%)		50	3,370

Compact Power Equipment Centers LLC	Equipment / Tool Rental
		6% Current / 6% PIK Secured Debt (Maturity - December 31, 2014)	3,523	3,500	3,500
		8% PIK Secured Debt (Maturity - December 31, 2012)	99	99	99
		Series A Member Units (8% cumulative) (7)		870	870
		Member Units (Fully diluted 10.6%)		1	1
				4,470	4,470

Drilling Info, Inc.	Information Services for the Oil and Gas Industry
		Common Stock (Fully diluted 2.4%)		1,335	5,070

East Teak Fine Hardwoods, Inc.	Hardwood Products
		Common Stock (Fully diluted 5.0%)		480	380

Gault Financial, LLC (RMB Capital, LLC)	Purchases and Manages Liquidation of Distressed Assets
		14% Secured Debt (Maturity - November 21, 2016)	10,500	9,918	9,918
		Warrants (Fully diluted 22.5%)		400	400
				10,318	10,318

Houston Plating and Coatings, LLC	Plating and Industrial Coating Services
		Member Units (Fully diluted 11.1%) (7)		635	6,300

Integrated Printing Solutions, LLC	Specialty Card Printing
		13% Secured Debt (Maturity - September 23, 2016)	12,500	11,707	11,707
		Warrants (Fully diluted 9.0%)		600	940
				12,307	12,647

IRTH Holdings, LLC	Damage Prevention Technology Information Services
		12% Secured Debt (Maturity - December 29, 2015)	4,873	4,802	4,873
		Member Units (Fully diluted 22.3%)		850	2,720
				5,652	7,593

KBK Industries, LLC	Specialty Manufacturer of Oilfield and Industrial Products
		10% Secured Debt (Maturity - December 31, 2012)	458	458	458
		14% Secured Debt (Maturity - January 23, 2014)	5,182	5,182	5,182
		Member Units (Fully diluted 18.8%) (7)		341	3,190
				5,981	8,830

Laurus Healthcare, LP	Management of Outpatient Cardiac Cath Labs
		9% Secured Debt (Maturity - May 12, 2016)	5,800	5,800	5,800
		Class A and C Units (Fully diluted 13.1%) (7)		80	5,430
				5,880	11,230

Olympus Building Services, Inc.	Custodial / Facilities Services
		10% Current / 2% PIK Secured Debt (Maturity - March 27, 2014)	2,446	2,330	2,330
		15% PIK Secured Debt (Maturity - March 27, 2014)	1,031	1,031	1,031
		Warrants (Fully diluted 22.5%)		470	70
				3,831	3,431

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

~~September 30, 2011~~March 31, 2012

(in thousands)

(Unaudited)

Portfolio Company/Type of Investment (1) (2)

Industry

Principal (6)

Cost (6)

Fair Value

Affiliate Investments (4)

OnAsset Intelligence, Inc.

Transportation Monitoring/Tracking Services

12% Secured Debt (Maturity - October 18, 2012)

1,500,000

797,082

797,082

Preferred Stock (7% cumulative) (Fully diluted 5.75%) (7)

1,548,802

1,548,802

Warrants (Fully diluted 4.0%)

830,000

830,000

3,175,884

3,175,884

OPI International Ltd.

Oil and Gas Construction Services

12% Secured Debt (Maturity - November 30, 2015)

11,520,000

10,863,840

11,130,000

Warrants (Fully diluted 8.0%)

500,000

4,100,006

11,363,840

15,230,006

Schneider Sales Management, LLC

Sales Consulting and Training

13% Secured Debt (Maturity - October 15, 2013)

3,567,542

3,489,127

250,000

Warrants (Fully diluted 20.0%)

45,000

—

3,534,127

250,000

SYNEO, LLC

Manufacturer of Specialty Cutting Tools and Punches

13.5% Secured Debt (Maturity - July 13, 2016)

5,500,000

5,367,784

5,390,000

10% Secured Debt (Maturity - May 4, 2026)

1,440,000

1,411,542

1,411,542

Member Units (Fully diluted 11.1%)

1,000,000

1,000,000

7,779,326

7,801,542

Walden Smokey Point, Inc.

Specialty Transportation

Common Stock (Fully diluted 12.6%)

1,426,667

3,460,000

WorldCall, Inc.

Telecommunication/Information Services

13% Secured Debt (Maturity - April 22, 2012)

646,225

646,225

646,225

Common Stock (Fully diluted 10.0%)

296,631

—

942,856

646,225

Subtotal Affiliate Investments (20.4% of total investments at fair value)

95,369,438

128,108,793

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Affiliate Investments (4)

OnAsset Intelligence, Inc.	Transportation Monitoring / Tracking Services
		12% Secured Debt (Maturity - October 18, 2012)	1,500	1,057	1,057
		Preferred Stock (7% cumulative) (Fully diluted 5.75%) (7)		1,604	1,604
		Warrants (Fully diluted 4.0%)		830	640
				3,491	3,301

OPI International Ltd. (12)	Oil and Gas Construction Services
		12% Secured Debt (Maturity - November 30, 2015)	11,750	11,132	11,360
		Common Equity (Fully diluted 9.7%)		1,370	4,970
				12,502	16,330

Radial Drilling Services Inc.	Oil and Gas Technology
		12% Secured Debt (Maturity - November 23, 2016)	4,200	3,394	3,394
		Warrants (Fully diluted 24.0%)		758	758
				4,152	4,152

Samba Holdings, Inc.	Intelligent Driver Record Monitoring Software and Services
		12.5% Secured Debt (Maturity - November 17, 2016)	3,000	2,943	2,943
		Common Stock (Fully diluted 14.7%)		950	950
				3,893	3,893

Schneider Sales Management, LLC	Sales Consulting and Training
		13% Secured Debt (Maturity - October 15, 2013)	3,568	3,489	—
		Warrants (Fully diluted 20.0%)		45	—
				3,534	—

Spectrio LLC	Audio Messaging Services
		8% Secured Debt (Maturity - June 16, 2016)	280	280	280
		12% Secured Debt (Maturity - June 16, 2016)	13,475	13,029	13,343
		Warrants (Fully diluted 9.8%)		887	2,830
				14,196	16,453

SYNEO, LLC	Manufacturer of Specialty Cutting Tools and Punches
		12% Secured Debt (Maturity - July 13, 2016)	5,500	5,379	5,379
		10% Secured Debt (Leadrock Properties, LLC) (Maturity - May 4, 2026)	1,440	1,412	1,412
		Member Units (Fully diluted 11.1%)		1,000	1,000
				7,791	7,791

Walden Smokey Point, Inc.	Specialty Transportation Provider
		Common Stock (Fully diluted 12.6%)		1,427	4,510

WorldCall, Inc.	Telecommunication / Information Services
		13% Secured Debt (Maturity - April 22, 2012)	646	646	646
		Common Stock (Fully diluted 10.0%)		297	—
				943	646

Subtotal Affiliate Investments (19.3% of total investments at fair value)				102,868	130,715

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

~~September 30, 2011~~March 31, 2012

(in thousands)

(Unaudited)

Portfolio Company/Type of Investment (1) (2)

Industry

Principal (6)

Cost (6)

Fair Value

Non-Control/Non-Affiliate Investments (5)

Affinity Videonet, Inc.

Videoconferencing Services

13% Secured Debt (Maturity - December 31, 2015)

2,000,000

1,908,783

2,000,000

13% Current / 1% PIK Secured Debt (Maturity - December 31, 2015)

1,623,207

1,613,270

1,613,270

Warrants (Fully diluted 2.6%)

62,500

62,500

3,584,553

3,675,770

Arrowhead General Insurance Agency, Inc. (9)

Insurance

LIBOR Plus 5.75%, Current Coupon 7.50%, Secured Debt (Maturity - March 4, 2017) (8)

3,980,000

3,906,486

3,900,400

LIBOR Plus 9.5%, Current Coupon 11.25%, Secured Debt (Maturity - September 30, 2017) (8)

2,000,000

1,942,837

1,955,000

5,849,323

5,855,400

Business Development Corporation of America

Business Development Company

LIBOR Plus 3.50%, Current Coupon 3.69%, Secured Debt (Maturity - January 14, 2013)

2,200,000

2,200,000

2,200,000

Bourland & Leverich Supply Co., LLC (9)

Distributor of Oil & Gas Tubular Goods

LIBOR Plus 9.00%, Current Coupon 11.00%, Secured Debt (Maturity - August 19, 2015) (8)

4,268,751

4,094,560

4,226,063

Brand Connections, LLC

Venue-Based Marketing and Media

14% Secured Debt (Maturity - April 30, 2015)

6,855,193

6,723,772

6,723,772

CHI Overhead Doors, Inc. (9)

Manufacturer of Overhead Garage Doors

LIBOR Plus 5.75%, Current Coupon 7.25%, Secured Debt (Maturity - August 17, 2017) (8)

2,500,000

2,450,549

2,462,500

LIBOR Plus 9.50%, Current Coupon 11.00%, Secured Debt (Maturity - February 17, 2018) (8)

2,500,000

2,450,435

2,462,500

4,900,984

4,925,000

Fairway Group Acquisition (9)

Retail Grocery

LIBOR Plus 6.00%, Current Coupon 7.50%, Secured Debt (Maturity - March 3, 2017) (8)

7,481,250

7,417,238

7,088,484

Fram Group Holdings Inc. (9)

Automotive Maintenance Products

LIBOR Plus 5.00%, Current Coupon 6.50%, Secured Debt (Maturity - July 29, 2017) (8)

1,000,000

995,114

998,750

LIBOR Plus 9.00%, Current Coupon 10.50%, Secured Debt (Maturity - January 29, 2018) (8)

1,000,000

995,090

985,000

1,990,204

1,983,750

Global Tel*Link Corporation (9)

Communications

LIBOR Plus 11.25%, Current Coupon 13.00%, Secured Debt (Maturity - May 10, 2017) (8)

3,000,000

2,946,252

3,022,500

Golden Nugget, LLC (9)

Hotel/Casino

LIBOR Plus 8.50%, Current Coupon 10.00%, Secured Debt (Maturity - May 24, 2016) (8)

10,000,000

9,620,376

9,450,000

Gundle/SLT Environmental, Inc. (9)

Environmental Services

LIBOR Plus 5.50%, Current Coupon 7.00%, Secured Debt (Maturity - May 24, 2016) (8)

2,992,500

2,964,251

2,857,837

LIBOR Plus 9.50%, Current Coupon 13.00%, Secured Debt (Maturity - November 23, 2016) (8)

4,000,000

3,923,349

3,860,000

6,887,600

6,717,837

Hayden Acquisition, LLC

Manufacturer of Utility Structures

8% Secured Debt (Maturity - October 1, 2011)

1,800,000

1,781,303

—

Hoffmaster Group, Inc. (9)

Manufacturer of Specialty Tabletop Products

LIBOR Plus 5.00%, Current Coupon 7.00%, Secured Debt (Maturity - June 2, 2016) (8)

1,480,769

1,432,230

1,447,452

13.50% Secured Debt (Maturity - June 2, 2017)

5,000,000

4,890,140

4,525,000

6,322,370

5,972,452

Managed Health Care Associates, Inc. (9)

Healthcare Products

LIBOR Plus 3.25%, Current Coupon 3.44%, Secured Debt (Maturity - August 1, 2014)

2,987,606

2,590,778

2,726,190

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Non-Control/Non-Affiliate Investments (5)

Academy, Ltd. (9)	Sporting Goods Stores
		LIBOR Plus 4.50%, Current Coupon 6.00%, Secured Debt (Maturity - August 3, 2018) (8)	2,993	2,981	3,010

Affinity Videonet, Inc.	Video Conferencing and Managed Services
		13% Secured Debt (Maturity - December 31, 2015)	2,000	1,917	2,000
		13% Current / 1% PIK Secured Debt (Maturity - December 31, 2015)	1,012	1,007	1,007
		Warrants (Fully diluted 2.6%)		63	120
				2,987	3,127

Ameritech College Operations, LLC	Education Services
		18% Secured Debt (Maturity - March 9, 2017)	6,800	6,665	6,665

API Technologies Corp. (9)	Manufacturer of Electrical Components and Equipment
		LIBOR Plus 6.25%, Current Coupon 7.75%, Secured Debt (Maturity - June 27, 2016) (8)	2,480	2,403	2,480

Aspen Dental Management, Inc. (9)	Dental Practice Management
		LIBOR Plus 5.50%, Current Coupon 7.00%, Secured Debt (Maturity - October 6, 2016) (8)	3,990	3,970	3,960

Associated Asphalt Partners, LLC (9)	Liquid Asphalt Supplier
		LIBOR Plus 5.75%, Current Coupon 7.25%, Secured Debt (Maturity - March 13, 2018) (8)	8,950	8,773	8,815

ATI Acquisition I Corp. (9)	Physical Therapy Facilities
		LIBOR Plus 5.50%, Current Coupon 7.50%, Secured Debt (Maturity - March 11, 2016) (8)	2,846	2,810	2,775

Blackboard, Inc. (9)	Education Software Provider
		LIBOR Plus 6.00%, Current Coupon 7.50%, Secured Debt (Maturity - October 4, 2018) (8)	2,993	2,890	2,983
		LIBOR Plus 10.00%, Current Coupon 11.50%, Secured Debt (Maturity - October 4, 2019) (8)	2,000	1,842	1,851
				4,732	4,834

Blue Coat Systems, Inc. (9)	Web Security and WAN Optimization
		LIBOR Plus 6.00%, Current Coupon 7.50%, Secured Debt (Maturity - February 15, 2018) (8)	2,000	1,961	1,998
		LIBOR Plus 10.00%, Current Coupon 11.50%, Secured Debt (Maturity - February 15, 2019) (8)	2,000	1,941	2,010
				3,902	4,008

Bourland and Leverich Supply Co., LLC (9)	Distributor of Oil and Gas Tubular Goods
		LIBOR Plus 9.00%, Current Coupon 11.00%, Secured Debt (Maturity - August 19, 2015) (8)	3,753	3,613	3,986

Brand Connections, LLC	Venue-Based Marketing and Media
		14% Secured Debt (Maturity - April 30, 2015)	6,668	6,554	6,668

Business Development Corporation of America (10) (12)	Investment Management
		LIBOR plus 3.50%, Current Coupon 3.74%, Secured Debt (Maturity - January 14, 2013)	10,000	10,000	10,000

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

~~September 30, 2011~~March 31, 2012

(in thousands)

(Unaudited)

Portfolio Company/Type of Investment (1) (2)

Industry

Principal (6)

Cost (6)

Fair Value

Non-Control/Non-Affiliate Investments (5)

Megapath Inc. (9)

Communications

LIBOR Plus 10.00%, Current Coupon 12.00%, Secured Debt (Maturity - November 3, 2015) (8)

3,700,000

3,636,757

3,681,500

Miramax Film NY, LLC (9)

Motion Picture Producer and Distributor

LIBOR Plus 11.00%, Current Coupon 13.00%, Secured Debt (Maturity - December 22, 2016) (8)

4,000,000

3,926,849

4,055,000

Class B Units (Fully diluted 0.2%)

500,000

500,000

4,426,849

4,555,000

Northland Cable Television, Inc. (9)

Cable Broadcasting

LIBOR Plus 6.00%, Current Coupon 7.75%, Secured Debt (Maturity - December 30, 2016) (8)

4,962,500

4,830,566

4,714,375

Physician Oncology Services, LP (9)

Healthcare Services

LIBOR Plus 4.75%, Current Coupon 7.00%, Secured Debt (Maturity - January 31, 2017) (8)

941,962

933,366

899,574

Pierre Foods, Inc. (9)

Foodservice Supplier

LIBOR Plus 5.25%, Current Coupon 7.50%, Secured Debt (Maturity - September 30, 2016) (8)

4,950,000

4,864,878

4,846,347

LIBOR plus 9.50%, Current Coupon 11.75%, Secured Debt (Maturity - September 29, 2017) (8)

2,000,000

1,937,154

2,000,000

6,802,032

6,846,347

Shearer’s Foods, Inc. (9)

Manufacturer of Food / Snacks

12.00% current / 3.75% PIK Secured Debt (Maturity - March 31, 2016)

4,221,848

4,135,782

4,116,302

Sourcehov LLC (9)

Outsource/Consulting Services

LIBOR Plus 5.38%, Current Coupon 6.63%, Secured Debt (Maturity - April 28, 2017) (8)

3,000,000

2,899,255

2,692,500

LIBOR Plus 9.25%, Current Coupon 10.50%, Secured Debt (Maturity - April 30, 2018) (8)

3,000,000

2,868,874

2,685,015

5,768,129

5,377,515

SNL Financial LC (9)

Financial Information Services

LIBOR Plus 7.00%, Current Coupon 8.50%, Secured Debt (Maturity - August 17, 2018) (8)

2,000,000

1,941,015

1,975,000

Support Systems Homes, Inc.

Manages Substance Abuse Treatment Centers

15% Secured Debt (Maturity - August 31, 2018)

576,600

576,600

576,600

The Tennis Channel, Inc.

Sports Broadcasting/Media

LIBOR Plus 6% / 4% PIK, Current Coupon with PIK 14%, Secured Debt (Maturity - January 1, 2013) (8)

10,502,286

11,124,550

11,124,550

Warrants (Fully diluted 0.1%)

235,467

235,467

11,360,017

11,360,017

Ulterra Drilling Technologies, L.P. (9)

Oilfield Services

LIBOR Plus 7.50%, Current Coupon 9.75%, Secured Debt (Maturity - June 9, 2016) (8)

7,406,250

7,265,662

7,221,094

LIBOR Plus 6.50%, Current Coupon 9.75%, Secured Debt (Maturity - June 9, 2016) (8)

1,848,367

1,800,886

1,744,359

9,066,548

8,965,453

UniTek Global Services, Inc. (9)

Telecommunications

LIBOR Plus 7.50%, Current Coupon 9.75%, Secured Debt (Maturity - April 15, 2018) (8)

9,975,000

9,690,946

9,775,500

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Non-Control/Non-Affiliate Investments (5)

Calloway Laboratories, Inc. (9)	Health Care Testing Facilities
		LIBOR Plus 11.00% / 3.00% PIK, Current Coupon with PIK 15.00%, Secured Debt (Maturity - March 29, 2015) (8)	5,001	4,851	4,851

CCCG, LLC (9)	Manufacturer of Oil and Gas Equipment
		LIBOR Plus 5.00%, Current Coupon 6.75%, Secured Debt (Maturity - March 31, 2014) (8)	3,369	3,289	3,268

CHI Overhead Doors, Inc. (9)	Manufacturer of Overhead Garage Doors
		LIBOR Plus 5.75%, Current Coupon 7.25%, Secured Debt (Maturity - August 17, 2017) (8)	2,488	2,442	2,465
		LIBOR Plus 9.50%, Current Coupon 11.00%, Secured Debt (Maturity - February 17, 2018) (8)	2,500	2,453	2,463
				4,895	4,928

Citadel Plastics Holding, Inc. (9)	Supplier of Commodity Chemicals / Plastic Parts
		LIBOR plus 5.25%, Current Coupon 6.75%, Secured Debt (Maturity - February 22, 2018) (8)	3,000	2,970	3,005

Congruent Credit Opportunities Fund II, LP (10) (12)	Investment Partnership
		LP Interests (Fully diluted 18.75%)		6,068	6,068

Diversified Machine, Inc. (9)	Automotive Component Supplier
		LIBOR plus 7.75%, Current Coupon 9.25%, Secured Debt (Maturity - December 1, 2016) (8)	1,995	1,957	2,001

EnCap Energy Capital Fund VIII, L.P. (10) (12)	Investment Partnership
		LP Interests (Fully diluted 0.2%)		1,487	1,487

Fairway Group Acquisition Company (9)	Retail Grocery
		LIBOR plus 6.00%, Current Coupon 7.50%, Secured Debt (Maturity - March 3, 2017) (8)	7,444	7,390	7,369

Flexera Software LLC (9)	Software Licensing
		LIBOR Plus 9.75%, Current Coupon 11.00%, Secured Debt (Maturity - September 30, 2018) (8)	3,000	2,771	2,970

Fram Group Holdings, Inc. (9)	Manufacturer of Automotive Maintenance Products
		LIBOR plus 5.00%, Current Coupon 6.50%, Secured Debt (Maturity - July 29, 2017) (8)	995	990	1,003
		LIBOR plus 9.00%, Current Coupon 10.50%, Secured Debt (Maturity - January 29, 2018) (8)	1,000	995	986
				1,985	1,989

Go Daddy Group, Inc. (9)	Domain Name Management
		LIBOR Plus 4.25%, Current Coupon 5.50%, Secured Debt (Maturity - December 17, 2018) (8)	7,481	7,481	7,496

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

~~September 30, 2011~~March 31, 2012

(in thousands)

(Unaudited)

Portfolio Company/Type of Investment (1) (2)

Industry

Principal (6)

Cost (6)

Fair Value

Non-Control/Non-Affiliate Investments (5)

Vision Solutions, Inc. (9)

Computers & Electronics

LIBOR Plus 4.50%, Current Coupon 7.75%, Secured Debt (Maturity - July 23, 2016) (8)

4,875,000

4,825,049

4,680,000

LIBOR Plus 8.00%, Current Coupon 9.50%, Secured Debt (Maturity - July 23, 2017) (8)

5,000,000

4,953,038

4,825,000

9,778,087

9,505,000

Walter Investment Management Corp. (9)

Real Estate

LIBOR Plus 6.25%, Current Coupon 7.75%, Secured Debt (Maturity - June 30, 2016) (8)

3,000,000

2,941,770

2,930,640

LIBOR Plus 11.00%, Current Coupon 12.50%, Secured Debt (Maturity - December 30, 2016) (8)

3,000,000

2,941,901

2,919,390

5,883,671

5,850,030

Other Non-Control/Non-Affiliate Investments (10)

5,000,000

5,335,016

5,172,521

Subtotal Non-Control/Non-Affiliate Investments (23.4% of total investments at fair value)

151,074,694

147,937,952

Main Street Capital Partners, LLC (Investment Manager) (0.3% of total investments at fair value)

Asset Management

100% of Membership Interests

4,284,042

1,916,322

Total Portfolio Investments, September 30, 2011

$
444,411,300

$
496,989,743

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Non-Control/Non-Affiliate Investments (5)

Gundle/SLT Environmental, Inc. (9)	Manufacturer of Geosynthetic Lining Products
		LIBOR plus 5.50%, Current Coupon 7.00%, Secured Debt (Maturity - May 27, 2016) (8)	2,978	2,952	2,963
		LIBOR Plus 9.50%, Current Coupon 13.00%, Secured Debt (Maturity - November 23, 2016) (8)	2,000	1,964	1,980
				4,916	4,943

Hayden Acquisition, LLC	Manufacturer of Utility Structures
		8% Secured Debt (Maturity - April 1, 2012)	1,800	1,781	—

Helm Financial Corporation (9)	Railcar Leasing
		LIBOR Plus 5.00%, Current Coupon 6.25%, Secured Debt (Maturity - June 1, 2017) (8)	1,980	1,962	1,953

HMS Income LLC (10) (12)	Investment Management
		LIBOR plus 3.00%, Current Coupon 3.24%, Secured Debt (Maturity - December 12, 2012)	7,500	7,500	7,500

HOA Restaurant Group, LLC (9)	Casual Restaurant Group
		11.25% Bond (Maturity - April 1, 2017)	2,000	2,000	1,975

Hupah Finance Inc. (9)	Manufacturer of Industrial Machinery
		LIBOR Plus 5.00%, Current Coupon 6.25%, Secured Debt (Maturity - January 19, 2019) (8)	3,000	2,941	3,024

Il Fornaio Corporation (9)	Casual Restaurant Group
		LIBOR Plus 5.25%, Current Coupon 6.50%, Secured Debt (Maturity - June 10, 2017) (8)	1,980	1,971	1,982

Ipreo Holdings LLC (9)	Application Software for Capital Markets
		LIBOR Plus 6.50%, Current Coupon 8.00%, Secured Debt (Maturity - August 5, 2017) (8)	4,229	4,153	4,165

Ivy Hill Middle Market Credit Fund III, Ltd. (9) (12)	Asset Management
		LIBOR Plus 6.50%, Current Coupon 6.74%, Secured Debt (Maturity - January 15, 2022)	2,000	1,664	1,658

JJ Lease Funding Corp. (9)	Apparel Retail
		LIBOR Plus 8.50%, Current Coupon 10.00%, Secured Debt (Maturity - April 29, 2017) (8)	3,900	3,797	3,013

Kadmon Pharmaceuticals, LLC (9)	Biopharmaceutical Products
		LIBOR Plus 13.00%, Current Coupon 15.00%, Secured Debt (Maturity - October 31, 2012) (8)	5,985	5,913	6,240

Lawson Software, Inc. (9)	Application Software
		LIBOR Plus 5.25%, Current Coupon 6.75%, Secured Debt (Maturity - July 5, 2017) (8)	4,975	4,796	4,995

Liqui-Box, Inc. (9)	Supplier of Specialty Packaging
		LIBOR plus 5.25%, Current Coupon 6.75%, Secured Debt (Maturity - December 29, 2017) (8)	2,993	2,949	2,978

Media Holdings, LLC (9) (12)	Internet Traffic Generator
		LIBOR plus 13.00%, Current Coupon 15.00%, Secured Debt (Maturity - April 28, 2014) (8)	5,000	5,195	5,200

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

~~September 30, 2011~~March 31, 2012

(in thousands)

(Unaudited)

Portfolio Company/Type of Investment (1) (2)

Industry

Principal (6)

Cost (6)

Fair Value

Marketable Securities and Idle Funds Investments

Investments in Secured and Rated Debt Investments

Academy, Ltd.

LIBOR Plus 4.50%, Current Coupon 6.00%, Secured Debt (Maturity - August 3, 2018) (8)

$
5,000,000

$
4,980,379

$
4,796,875

AL Gulf Coast Terminals, LLC

LIBOR Plus 5.00%, Current Coupon 6.75%, Secured Debt (Maturity - July 22, 2016) (8)

$
6,523,771

$
6,368,390

$
6,556,389

API Technologies Corp.

LIBOR Plus 6.25%, Current Coupon 7.75%, Secured Debt (Maturity - June 27, 2016) (8)

2,492,647

2,408,617

2,368,015

ATI Acquisition I Corp.

LIBOR Plus 5.50%, Current Coupon 7.50%, Secured Debt (Maturity - March 11, 2016) (8)

2,851,663

2,812,683

2,750,073

Brickman Group Holdings, Inc.

LIBOR Plus 5.50%, Current Coupon 7.25%, Secured Debt (Maturity - October 14, 2016) (8)

1,994,975

1,965,828

1,971,704

Carestream Health, Inc.

LIBOR Plus 3.50%, Current Coupon 5.0%, Secured Debt (Maturity - February 25, 2017) (8)

2,992,336

2,700,412

2,521,043

Centerplate, Inc.

LIBOR Plus 8.50%, Current Coupon 10.75%, Secured Debt (Maturity - September 16, 2016) (8)

2,977,500

2,900,574

2,960,126

Helm Financial Corporation

LIBOR Plus 5.00%, Current Coupon 7.25%, Secured Debt (Maturity - June 1, 2017) (8)

1,990,000

1,970,988

1,930,300

Henniges Automotive Holdings, Inc.

LIBOR Plus 10.00%, Current Coupon 12.00%, Secured Debt (Maturity - October 28, 2016) (8)

2,875,000

2,823,718

2,823,718

Il Fornaio Corporation

LIBOR Plus 5.25%, Current Coupon 6.50%, Secured Debt (Maturity - June 10, 2017) (8)

1,995,000

1,985,475

1,951,359

Ipreo Holdings LLC

LIBOR Plus 6.50%, Current Coupon 8.00%, Secured Debt (Maturity - August 5, 2017) (8)

5,000,000

4,902,643

4,725,000

JJ Lease Funding Corp.

LIBOR Plus 8.50%, Current Coupon 10.00%, Secured Debt (Maturity - April 29, 2017) (8)

4,000,000

3,886,826

3,810,000

Lawson Software, Inc.

LIBOR Plus 5.25%, Current Coupon 6.75%, Secured Debt (Maturity - July 5, 2017) (8)

5,000,000

4,806,537

4,748,225

Medpace Intermediateco, Inc.

LIBOR Plus 5.00%, Current Coupon 6.50%, Secured Debt (Maturity - June 17, 2017) (8)

4,987,500

4,915,192

4,763,062

MLM Holdings, Inc.

LIBOR Plus 5.25%, Current Coupon 7.00%, Secured Debt (Maturity - December 1, 2016) (8)

6,930,000

6,838,594

6,808,725

Mood Media Corporation

LIBOR Plus 5.50%, Current Coupon 7.75%, Secured Debt (Maturity - May 6, 2018) (8)

2,992,500

2,962,957

2,784,910

MultiPlan, Inc.

LIBOR Plus 3.25%, Current Coupon 4.75%, Secured Debt (Maturity - August 26, 2017) (8)

3,846,154

3,846,154

3,655,462

Ocwen Financial Corporation

LIBOR Plus 5.50%, Current Coupon 7.00%, Secured Debt (Maturity - September 1, 2016) (8)

4,875,000

4,778,845

4,740,937

Pacific Architects and Engineers Incorporated

LIBOR Plus 6.00%, Current Coupon 7.50%, Secured Debt (Maturity - April 4, 2017) (8)

5,000,000

4,905,426

4,825,000

Phillips Plastic Corporation

LIBOR Plus 5.00%, Current Coupon 6.50%, Secured Debt (Maturity - February 12, 2017) (8)

2,500,000

2,475,558

2,484,375

Pretium Packaging Bond

11.50% Bond (Maturity - April 1, 2016)

1,500,000

1,500,000

1,470,000

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Non-Control/Non-Affiliate Investments (5)

Medpace Intermediateco, Inc. (9)	Clinical Trial Development and Execution
		LIBOR Plus 5.00%, Current Coupon 6.50%, Secured Debt (Maturity - June 17, 2017) (8)	4,963	4,896	4,814

Metal Services LLC (9)	Steel Mill Services
		LIBOR Plus 7.50%, Current Coupon 9.00%, Secured Debt (Maturity - January 24, 2018) (8)	7,900	7,745	7,959

Metropolitan Health Networks, Inc. (9) (12)	Healthcare Network Provider
		LIBOR plus 5.50%, Current Coupon 7.00%, Secured Debt (Maturity - October 4, 2016) (8)	1,980	1,953	1,921
		LIBOR plus 11.75%, Current Coupon 13.50%, Secured Debt (Maturity - October 4, 2017) (8)	3,250	3,188	3,185
				5,141	5,106

Milk Specialties Company (9)	Processor of Nutrition Products
		LIBOR plus 7.00%, Current Coupon 8.50%, Secured Debt (Maturity - December 27, 2017) (8)	3,990	3,874	3,995
		LIBOR plus 13.00%, Current Coupon 14.50%, Secured Debt (Maturity - December 27, 2018) (8)	1,000	961	990
				4,835	4,985

Miramax Film NY, LLC (9)	Motion Picture Producer and Distributor
		Class B Units (Fully diluted 0.2%)		500	500

Mood Media Corporation (9) (12)	Music Provider
		LIBOR Plus 5.50%, Current Coupon 7.00%, Secured Debt (Maturity - May 6, 2018) (8)	2,978	2,949	2,917

Morton’s Restaurant Group, Inc. (9)	Restaurants
		LIBOR Plus 7.25%, Current Coupon 8.75%, Secured Debt (Maturity - February 1, 2017) (8)	3,000	2,927	3,000

MultiPlan, Inc. (9)	Managed Healthcare Provider
		LIBOR Plus 3.25%, Current Coupon 4.75%, Secured Debt (Maturity - August 26, 2017) (8)	2,913	2,913	2,893

National Healing Corporation (9)	Wound Care Management
		LIBOR plus 6.75%, Current Coupon 8.25%, Secured Debt (Maturity - November 30, 2017) (8)	2,743	2,611	2,716
		LIBOR plus 10.00%, Current Coupon 11.50%, Secured Debt (Maturity - November 30, 2018) (8)	1,500	1,413	1,500
		Common Equity (Fully diluted 0.02%)		50	50
				4,074	4,266

Northland Cable Television, Inc. (9)	Television Broadcasting
		LIBOR Plus 6.00%, Current Coupon 7.75%, Secured Debt (Maturity - December 30, 2016) (8)	4,919	4,798	4,796

Pacific Architects and Engineers Incorporated (9)	Provider of Contract Support Services
		LIBOR Plus 6.00%, Current Coupon 7.50%, Secured Debt (Maturity - April 4, 2017) (8)	3,995	3,920	3,975

Phillips Plastic Corporation (9)	Custom Molder of Plastics and Metals
		LIBOR Plus 5.00%, Current Coupon 6.50%, Secured Debt (Maturity - February 12, 2017) (8)	1,741	1,725	1,738

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

~~September 30, 2011~~March 31, 2012

(in thousands)

(Unaudited)

Portfolio Company/Type of Investment (1) (2)

Industry

Principal (6)

Cost (6)

Fair Value

Marketable Securities and Idle Funds Investments

Race Point Power, LLC

LIBOR Plus 6.00%, Current Coupon 7.75%, Secured Debt (Maturity - January 11, 2018) (8)

4,724,965

4,639,225

4,624,559

Radio One, Inc.

LIBOR Plus 6.00%, Current Coupon 7.50%, Secured Debt (Maturity - March 31, 2016) (8)

2,985,000

2,930,184

2,875,197

SonicWALL, Inc.

LIBOR Plus 6.25%, Current Coupon 8.25%, Secured Debt (Maturity - January 23, 2016) (8)

1,226,613

1,228,423

1,223,546

Speedy Cash Intermediate Holdings Corp.

10.75% Bond (Maturity - May 15, 2018)

2,000,000

2,000,000

2,015,000

Stackpole Powertrain International ULC

LIBOR Plus 6.00%, Current Coupon 7.50%, Secured Debt (Maturity - August 2, 2017) (8)

6,500,000

6,372,793

6,223,750

Surgery Center Holdings, Inc.

LIBOR Plus 5.00%, Current Coupon 6.50%, Secured Debt (Maturity - February 6, 2017) (8)

4,975,000

4,951,566

4,701,375

Totes Isotoner Corporation

LIBOR Plus 5.75%, Current Coupon 7.25%, Secured Debt (Maturity - July 7, 2017) (8)

4,988,672

4,892,009

4,807,833

United Refining Bond

10.50% Bond (Maturity - February 28, 2017)

3,000,000

3,000,000

2,820,000

VFH Parent LLC

LIBOR Plus 6.00%, Current Coupon 7.50%, Secured Debt (Maturity - July 8, 2016) (8)

5,000,000

4,904,031

4,916,675

Visant Corporation

LIBOR Plus 4.00%, Current Coupon 5.25%, Secured Debt (Maturity - December 22, 2016) (8)

4,962,500

4,962,500

4,554,483

Wyle Services Corporation

LIBOR Plus 4.25%, Current Coupon 6.00%, Secured Debt (Maturity - March 26, 2017) (8)

3,904,668

3,882,460

3,781,670

Yankee Cable Acquisition, LLC

LIBOR Plus 4.50%, Current Coupon 6.50%, Secured Debt (Maturity - August 26, 2016) (8)

3,960,000

3,909,915

3,830,746

Other Marketable Securities and Idle Funds Investments (11)

12,837,172

13,100,348

12,907,562

Subtotal Marketable Securities and Idle Funds Investments (21.2% of total investments at fair value)

137,509,250

134,727,694

Total Investments, September 30, 2011

$
581,920,550

$
631,717,437

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Non-Control/Non-Affiliate Investments (5)

Physician Oncology Services, L.P. (9)	Provider of Radiation Therapy and Oncology Services
		LIBOR plus 4.75%, Current Coupon 6.25%, Secured Debt (Maturity - January 31, 2017) (8)	942	934	909

Pierre Foods, Inc. (9)	Foodservice Supplier
		LIBOR plus 5.25%, Current Coupon 7.00%, Secured Debt (Maturity - September 30, 2016) (8)	4,938	4,860	4,947
		LIBOR plus 9.50%, Current Coupon 11.25%, Secured Debt (Maturity - September 29, 2017) (8)	2,000	1,941	2,018
				6,801	6,965

Preferred Proppants, LLC (9)	Producer of Sand Based Proppants
		LIBOR plus 6.00%, Current Coupon 7.50%, Secured Debt (Maturity - December 15, 2016) (8)	4,988	4,870	4,913

Race Point Power, LLC (9)	Electric Utilities / Power Generation
		LIBOR Plus 6.00%, Current Coupon 7.75%, Secured Debt (Maturity - January 11, 2018) (8)	2,238	2,200	2,235

Radio One, Inc. (9)	Radio Broadcasting
		LIBOR Plus 6.00%, Current Coupon 7.50%, Secured Debt (Maturity - March 31, 2016) (8)	2,970	2,921	2,954
Shearer’s Foods, Inc. (9)	Manufacturer of Food/ Snacks
		12.00% Current /3.75% PIK Secured Debt (Maturity - March 31, 2016)	4,303	4,222	4,174

SonicWALL, Inc. (9)	IT Security Provider
		LIBOR Plus 6.25%, Current Coupon 8.25%, Secured Debt (Maturity - January 23, 2016) (8)	878	879	883

Sourcehov LLC (9)	Business Process Services
		LIBOR plus 5.38%, Current Coupon 6.63%, Secured Debt (Maturity - April 28, 2017) (8)	2,985	2,892	2,749
		LIBOR plus 9.25%, Current Coupon 10.50%, Secured Debt (Maturity - April 30, 2018) (8)	5,000	4,496	3,963
				7,388	6,712

Speedy Cash Intermediate Holdings Corp. (9)	Consumer Finance
		10.75% Bond (Maturity - May 15, 2018)	2,000	2,000	2,070

Surgery Center Holdings, Inc. (9)	Ambulatory Surgical Centers
		LIBOR Plus 5.00%, Current Coupon 6.50%, Secured Debt (Maturity - February 6, 2017) (8)	4,950	4,928	4,690

The Tennis Channel, Inc.	Television-Based Sports Broadcasting
		LIBOR Plus 6% / 4% PIK, Current Coupon with PIK 14%, Secured Debt (Maturity - January 1, 2013) (8)	10,717	11,776	11,776
		Warrants (Fully diluted 0.1%)		235	235
				12,011	12,011

Totes Isotoner Corporation (9)	Weather Accessory Retail
		LIBOR Plus 5.75%, Current Coupon 7.25%, Secured Debt (Maturity - July 7, 2017) (8)	4,964	4,874	4,914

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2012

(in thousands)

(Unaudited)

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Non-Control/Non-Affiliate Investments (5)

Tube City IMS Corporation (9) (12)	Steel Mill Services
		LIBOR Plus 4.50%, Current Coupon 5.75%, Secured Debt (Maturity - March 19, 2019) (8)	1,000	990	1,001

Ulterra Drilling Technologies, L.P. (9)	Manufacturer of Oil and Gas Drilling Products
		LIBOR plus 7.50%, Current Coupon 9.50%, Secured Debt (Maturity - June 9, 2016) (8)	6,488	6,375	6,504
		LIBOR plus 7.50%, Current Coupon 9.50%, Secured Debt (Maturity - June 9, 2016) (8)	2,348	2,305	2,333
				8,680	8,837

UniTek Global Services, Inc. (9)	Provider of Outsourced Infrastructure Services
		LIBOR plus 7.50%, Current Coupon 9.00%, Secured Debt (Maturity - April 15, 2018) (8)	6,418	6,245	6,321

Vantage Specialties, Inc. (9)	Manufacturer of Specialty Chemicals
		LIBOR Plus 5.50%, Current Coupon 7.00%, Secured Debt (Maturity - February 10, 2018) (8)	4,000	3,922	3,996

VFH Parent LLC (9)	Electronic Trading and Market Making
		LIBOR Plus 6.00%, Current Coupon 7.50%, Secured Debt (Maturity - July 8, 2016) (8)	3,889	3,821	3,909

Visant Corporation (9)	School Affinity Stores
		LIBOR Plus 4.00%, Current Coupon 5.25%, Secured Debt (Maturity - December 22, 2016) (8)	3,998	3,998	3,911

Vision Solutions, Inc. (9)	Computer Software
		LIBOR plus 4.50%, Current Coupon 6.00%, Secured Debt (Maturity - July 23, 2016) (8)	2,801	2,566	2,579
		LIBOR plus 8.00%, Current Coupon 9.50%, Secured Debt (Maturity - July 23, 2017) (8)	5,000	4,956	4,850
				7,522	7,429

Walter Investment Management Corp. (9) (12)	Real Estate Services
		LIBOR plus 6.25%, Current Coupon 7.75%, Secured Debt (Maturity - June 30, 2016) (8)	2,775	2,725	2,792
		LIBOR plus 11.00%, Current Coupon 12.50%, Secured Debt (Maturity - December 30, 2016) (8)	3,000	2,946	3,080
				5,671	5,872

Willis Group, LLC	Staffing and Recruitment Services
		12% Current / 3% PIK Secured Debt (Maturity - December 19, 2014)	9,000	8,835	8,835

Wyle Services Corporation (9)	Specialized Engineering and Technical Services
		LIBOR Plus 4.25%, Current Coupon 5.75%, Secured Debt (Maturity - March 26, 2017) (8)	3,713	3,693	3,676

Yankee Cable Acquisition, LLC (9)	Broadband Service Provider
		LIBOR Plus 4.50%, Current Coupon 6.50%, Secured Debt (Maturity - August 26, 2016) (8)	3,790	3,746	3,782

Subtotal Non-Control/Non-Affiliate Investments (46.2% of total investments at fair value)				313,646	313,334

Main Street Capital Partners, LLC (Investment Manager)	Asset Management
		100% of Membership Interests		2,668	202

Total Portfolio Investments, March 31, 2012				599,807	664,299

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

March 31, 2012

(in thousands)

(Unaudited)

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)		Fair Value
Marketable Securities and Idle Funds Investments

Comstock Resources Inc. Bond (12)	Investments in Marketable Securities and Diversified, Registered Bond Funds
		8.38% Bond (Maturity - October 15, 2017)	2,000	1,907		1,945

Fairfield Redevelopment Bond (12)
		9.50% Bond (Maturity - March 1, 2021)	1,085	1,101		1,180

General Motors Company (12)
		Preferred stock (0.59% cumulative) (7)		255		213

NRG Energy Inc Bond (12)
		8.00% Bond (Maturity - June 15, 2017)	2,000	2,024		2,015

San Diego Redevelopment Bond (12)
		7.38% Bond (Maturity - September 1, 2037)	275	275		285

Stanton Redevelopment Tax Bond (12)
		9.00% Bond (Maturity - December 1, 2021)	980	1,012		1,026

Stora Enso OYJ Bond (12)
		7.25% Bond (Maturity - April 15, 2036)	1,900	1,533		1,663


Toll Road Investors Partnership II, LP Bond (12)
		Zero Coupon Bond (Maturity - February 15, 2033)	7,500	1,649		1,541

United Refining Company Bond (12)
		10.50% Bond (Maturity - February 28, 2017)	3,990	3,967		4,120

Other Marketable Securities and Idle Funds Investments (11) (12)				343		357

Subtotal Marketable Securities and Idle Funds Investments (2.1% of total investments at fair value)				14,066		14,345

Total Investments, March 31, 2012				$	613,873	$	678,644

(1)	Debt investments are generally income producing. Equity and warrants are non-income producing, unless otherwise noted.
(2)	See Note C for summary geographic location of portfolio companies.
(3)	Controlled investments are defined by the Investment Company Act of 1940, as amended (“1940 Act”) as investments in which more than 25% of the voting securities are owned or where the ability to nominate greater than 50% of the board representation is maintained.
(4)	Affiliate investments are defined by the 1940 Act as investments in which between 5% and 25% of the voting securities are owned and the investments are not classified as Controlled investments.
(5)	Non-Control/Non-Affiliate investments are defined by the 1940 Act as investments that are neither Control Investments nor Affiliate Investments.
(6)	Principal is net of prepayments. Cost is net of prepayments and accumulated unearned income.
(7)	Income producing through dividends or distributions.
(8)	Index based floating interest rate is subject to contractual minimum interest rates.
(9)	~~Private placement~~Middle Market portfolio investment.
(10)	Other ~~Non-Control/Non-Affiliate investments consist of debt and equity investments in private placement portfolio investments.~~Portfolio investment.
(11)	Other Marketable Securities and Idle Funds Investments generally consist of investments in secured and rated debt investments ~~and~~and/or diversified bond funds.
(12)	Investment is not a “qualifying asset” as defined under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets.

1416

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, ~~2010~~2011

(in thousdands)

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Control Investments (3)

Café Brazil, LLC	Casual Restaurant Group
		12% Secured Debt (Maturity - April 20, 2013)	1,400	1,399	1,400
		Member Units (Fully diluted 41.0%) (7)		42	3,430
				1,441	4,830

California Healthcare Medical Billing, Inc.	Healthcare Services
		12% Secured Debt (Maturity - October 17, 2015)	8,623	8,290	8,528
		Warrants (Fully diluted 21.0%)		1,193	3,380
		Common Stock (Fully diluted 9.6%)		1,177	1,560
				10,660	13,468

CBT Nuggets, LLC	Produces and Sells IT Training Certification Videos
		14% Secured Debt (Maturity - December 31, 2013)	1,750	1,750	1,750
		Member Units (Fully diluted 40.8%) (7)		1,300	5,570
				3,050	7,320

Ceres Management, LLC (Lambs)	Aftermarket Automotive Services Chain
		14% Secured Debt (Maturity - May 31, 2013)	3,770	3,749	3,749
		9.5% Secured Debt (Lamb’s Real Estate Investment I, LLC) (Maturity - October 1, 2025)	1,115	1,115	1,115
		Member Units (Fully diluted 79.0%)		4,773	1,050
		Member Units (Lamb’s Real Estate Investment I, LLC) (Fully diluted 100%)		625	800
				10,262	6,714

Condit Exhibits, LLC	Tradeshow Exhibits / Custom Displays
		9% Current / 9% PIK Secured Debt (Maturity - July 1, 2013)	4,431	4,406	4,406
		Warrants (Fully diluted 47.9%)		320	560
				4,726	4,966

Currie Acquisitions, LLC	Retail Electric Bikes
		12% Secured Debt (Maturity - March 1, 2015)	4,750	4,112	4,750
		Warrants (Fully diluted 47.3%)		2,566	100
				6,678	4,850

Gulf Manufacturing, LLC	Industrial Metal Fabrication
		9% PIK Secured Debt (Maturity - June 30, 2017)	1,185	1,185	1,185
		Member Units (Fully diluted 34.2%) (7)		2,980	9,840
				4,165	11,025

Harrison Hydra-Gen, Ltd.	Manufacturer of Hydraulic Generators
		12% Secured Debt (Maturity - June 4, 2015)	5,507	4,938	5,230
		Preferred stock (8% cumulative) (7)		1,081	1,081
		Warrants (Fully diluted 34.5%)		718	2,240
				6,737	8,551

Hawthorne Customs and Dispatch Services, LLC	Transportation / Logistics
		Member Units (Fully diluted 47.6%) (7)		589	1,410
		Member Units (Wallisville Real Estate, LLC) (Fully diluted 59.1%) (7)		1,215	1,215
				1,804	2,625

Hydratec, Inc.	Designer and Installer of Micro - Irrigation Systems
		Common Stock (Fully diluted 92.5%) (7)		7,092	12,337

Indianapolis Aviation Partners, LLC	Fixed Base Operator
		12% Secured Debt (Maturity - September 15, 2014)	4,270	4,003	4,120
		Warrants (Fully diluted 30.1%)		1,129	1,650
				5,132	5,770

~~Table of Contents~~

Portfolio Company/Type of Investment (1) (2)

Industry

Principal (6)

Cost (6)

Fair Value

Control Investments (3)

Currie Acquisitions, LLC

Manufacturer of Electric Bicycles/Scooters

12% Secured Debt (Maturity - March 1, 2015)

4,750,000

3,971,699

3,971,699

Warrants (Fully diluted 47.3%)

2,566,204

2,340,204

6,537,903

6,311,903

Gulf Manufacturing, LLC

Industrial Metal Fabrication

8% Secured Debt (Maturity - August 31, 2014)

3,620,000

3,620,000

3,620,000

13% Secured Debt (Maturity - August 31, 2012)

1,680,000

1,649,959

1,675,165

9% PIK Secured Debt (Maturity - June 30, 2017)

1,420,784

1,420,784

1,420,784

Member Units (Fully diluted 34.2%) (7)

2,979,813

5,870,000

9,670,556

12,585,949

Harrison Hydra-Gen, Ltd.

Manufacturer of Hydraulic Generators

12% Secured Debt (Maturity - June 4, 2015)

6,000,000

5,255,101

5,255,101

Warrants (Fully diluted 35.2%)

717,640

717,640

Mandatorily Redeemable Preferred Stock

1,000,000

1,000,000

6,972,741

6,972,741

Hawthorne Customs & Dispatch Services, LLC

Transportation/ Logistics

Member Units (Fully diluted 59.1%) (7)

692,500

1,250,000

Member Units (Wallisville Real Estate, LLC) (Fully diluted 59.1%) (7)

1,214,784

1,214,784

1,907,284

2,464,784

Hydratec, Inc.

Agricultural Services

Common Stock (Fully diluted 92.5%) (7)

7,087,911

9,177,911

Indianapolis Aviation Partners, LLC

FBO / Aviation Support Services

12% Secured Debt (Maturity - September 15, 2014)

4,500,000

4,140,255

4,350,000

Warrants (Fully diluted 30.1%)

1,129,286

1,570,286

5,269,541

5,920,286

1617

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, ~~2010~~2011

(in thousdands)

~~Table of Contents~~

Portfolio Company/Type of Investment (1) (2)

Industry

Principal (6)

Cost (6)

Fair Value

Control Investments (3)

OMi Holdings, Inc.

Manufacturer of Overhead Cranes

12% Secured Debt (Maturity - April 1, 2013)

10,170,000

10,116,824

10,116,824

Common Stock (Fully diluted 48.0%)

1,080,000

500,000

11,196,824

10,616,824

PPL RVs, Inc.

RV Aftermarket Consignment/Parts

18% Secured Debt (Maturity - June 10, 2015)

6,250,000

6,165,058

6,165,058

Common Stock (Fully diluted 50.1%)

2,150,000

2,150,000

8,315,058

8,315,058

The MPI Group, LLC

Manufacturer of Custom Hollow Metal Doors, Frames and Accessories

4.5% Current / 4.5% PIK Secured Debt (Maturity — October 2, 2013)

507,625

501,176

501,176

6% Current / 6% PIK Secured Debt (Maturity — October 2, 2013)

5,101,667

4,935,760

4,935,760

Warrants (Fully diluted 47.1%)

895,943

190,000

6,332,879

5,626,936

Thermal & Mechanical Equipment, LLC

Heat Exchange / Filtration Products and Services

Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - September 25, 2014) (8)

1,750,000

1,739,152

1,739,152

13% Current / 5% PIK Secured Debt (Maturity - September 25, 2014)

5,575,220

5,501,111

5,575,220

Warrants (Fully diluted 50.0%)

1,000,000

1,940,000

8,240,263

9,254,372

Uvalco Supply, LLC

Farm and Ranch Supply

Member Units (Fully diluted 42.8%) (7)

1,113,243

1,560,000

Vision Interests, Inc.

Manufacturer/Installer of Commercial Signage

2.6% Current /10.4% PIK Secured Debt (Maturity - June 5, 2012)

9,400,000

8,424,811

8,022,651

2.6% Current /10.4% PIK Secured Debt (Maturity - June 5, 2016)

760,000

739,663

739,663

Warrants (Fully diluted 38.2%)

160,010

—

Common Stock (Fully diluted 22.3%)

372,000

—

9,696,484

8,762,314

Ziegler’s NYPD, LLC

Casual Restaurant Group

Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - October 1, 2013) (8)

1,000,000

993,937

993,937

13% Current / 5% PIK Secured Debt (Maturity - October 1, 2013)

4,801,810

4,752,088

4,752,088

Warrants (Fully diluted 46.6%)

600,000

470,000

6,346,025

6,216,025

Subtotal Control Investments

161,009,443

174,596,394

Portfolio Company		Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)		Fair Value
Control Investments (3)

Jensen Jewelers of Idaho, LLC		Retail Jewelry Store
			Prime Plus 2%, Current Coupon 5.25%, Secured Debt (Maturity - November 14, 2013) (8)	2,260	2,260		2,260
			13% Current / 6% PIK Secured Debt (Maturity - November 14, 2013)	2,345	2,345		2,345
			Member Units (Fully diluted 60.8%) (7)		811		1,750
					5,416		6,355

Lighting Unlimited, LLC		Commercial and Residential Lighting Products and Design Services
			8% Secured Debt (Maturity - August 22, 2012)	2,000	1,984		1,984
			Preferred Stock (non-voting)		510		510
			Warrants (Fully diluted 7.1%)		54		—
			Common Stock (Fully diluted 70.0%)		100		210
					2,648		2,704

Mid-Columbia Lumber Products, LLC		Manufacturer of Finger - Jointed Lumber Products
			10% Secured Debt (Maturity - December 18, 2014)	1,250	1,250		1,250
			12% Secured Debt (Maturity - December 18, 2014)	3,670	3,670		3,670
			9.5% Secured Debt (Mid - Columbia Real Estate, LLC) (Maturity - May 13, 2025)	1,062	1,062		1,062
			Warrants (Fully diluted 9.2%)		250		890
			Member Units (Fully diluted 42.9%)		812		930
			Member Units (Mid - Columbia Real Estate, LLC) (Fully diluted 50.0%) (7)		250		810
					7,294		8,612

NAPCO Precast, LLC		Precast Concrete Manufacturing
			Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - February 1, 2013) (8)	3,385	3,376		3,376
			18% Secured Debt (Maturity - February 1, 2013)	5,173	5,142		5,142
			Member Units (Fully diluted 46.3%) (7)		2,975		4,195
					11,493		12,713

NRI Clinical Research, LLC		Clinical Research Center
			14% Secured Debt (Maturity - September 8, 2016)	5,500	5,183	��	5,183
			Warrants (Fully diluted 12.5%)		252		252
	��		Member Units (Fully diluted 24.8%)		500		500
					5,935		5,935

NRP Jones, LLC		Manufacturer of Hoses, Fittings and Assemblies
			12% Secured Debt (Maturity - December 22, 2016)	12,100	11,041		11,041
			Warrants (Fully diluted 12.2%)		817		817
			Member Units (Fully diluted 43.2%)		2,900		2,900
					14,758		14,758

NTS Holdings, Inc.		Trench and Traffic Safety Equipment Rental and Sales
			12% Secured Debt (Maturity - April 30, 2015)	5,770	5,742		5,742
			Preferred Stock (12% cumulative, compounded quarterly) (7)		11,918		11,918
			Common Stock (Fully diluted 72.3%)		1,621		2,140
					19,281		19,800

OMi Holdings, Inc.		Manufacturer of Overhead Cranes
			12% Secured Debt (Maturity - April 1, 2013)	7,974	7,950		7,950
			Common Stock (Fully diluted 48.0%)		1,080		2,270
					9,030		10,220

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, ~~2010~~2011

(in thousdands)

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Control Investments (3)

Pegasus Research Group, LLC (Televerde)	Telemarketing and Data Services
		13% Current / 3% PIK Secured Debt (Maturity - January 6, 2016)	6,160	6,089	6,089
		Member Units (Fully diluted 43.7%)		1,250	1,250
				7,339	7,339

PPL RVs, Inc.	Recreational Vehicle Dealer
		18% Secured Debt (Maturity - June 10, 2015)	4,235	4,186	4,235
		Common Stock (Fully diluted 51.1%)		2,150	3,980
				6,336	8,215

Principle Environmental, LLC	Noise Abatement Services
		12% Secured Debt (Maturity - February 1, 2016)	4,750	3,766	4,080
		12% Current / 2% PIK Secured Debt (Maturity - February 1, 2016)	3,507	3,450	3,507
		Warrants (Fully diluted 14.6%)		1,200	2,110
		Member Units (Fully diluted 25.0%)		2,000	3,600
				10,416	13,297

River Aggregates, LLC	Processor of Construction Aggregates
		12% Secured Debt (Maturity - March 30, 2016)	3,470	3,227	3,227
		Warrants (Fully diluted 20.0%)		202	100
		Member Units (Fully diluted 40.0%)		550	200
				3,979	3,527

The MPI Group, LLC	Manufacturer of Custom Hollow Metal Doors, Frames and Accessories
		4.5% Current / 4.5% PIK Secured Debt (Maturity - October 2, 2013)	1,045	1,041	1,041
		6% Current / 6% PIK Secured Debt (Maturity - October 2, 2013)	5,406	5,294	5,294
		Warrants (Fully diluted 47.1%)		896	—
		Member Units (Non-voting)		200	—
				7,431	6,335

Thermal and Mechanical Equipment, LLC	Commercial and Industrial Engineering Services
		Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - September 25, 2014) (8)	1,272	1,266	1,266
		13% Current / 5% PIK Secured Debt (Maturity - September 25, 2014)	4,053	4,010	4,053
		Member Units (Fully diluted 50.0%) (7)		1,000	5,660
				6,276	10,979

Uvalco Supply, LLC	Farm and Ranch Supply Store
		Member Units (Fully diluted 42.8%) (7)		1,113	3,290

~~Table of Contents~~

Portfolio Company/Type of Investment (1) (2)

Industry

Principal (6)

Cost (6)

Fair Value

Affiliate Investments (4)

KBK Industries, LLC

Specialty Manufacturer of Oilfield and Industrial Products

10% Secured Debt (Maturity - March 31, 2011)

514,940

514,940

514,940

14% Secured Debt (Maturity - January 23, 2011)

5,250,000

5,241,999

5,241,999

Member Units (Fully diluted 18.8%) (7)

340,833

1,790,333

6,097,772

7,547,272

Laurus Healthcare, LP

Healthcare Facilities / Services

13% Secured Debt (Maturity - May 7, 2012)

2,275,000

2,275,000

2,275,000

13% Secured Debt (Maturity - December 31, 2011)

525,000

525,000

525,000

Warrants (Fully diluted 13.1%)

79,505

4,620,000

2,879,505

7,420,000

Lighting Unlimited, LLC

Commercial and Residential Lighting Products and Design Services

Prime Plus 1% Secured Debt (Maturity - August 22, 2012) (8)

949,996

946,598

946,598

14% Secured Debt (Maturity - August 22, 2012)

1,760,101

1,723,326

1,723,326

Warrants (Fully diluted 17.0%)

54,000

—

2,723,924

2,669,924

Merrick Systems, Inc.

Software and Information Technology

13% Secured Debt (Maturity - May 5, 2015)

3,000,000

2,540,849

2,540,849

Warrants (Fully diluted 6.5%)

450,000

450,000

2,990,849

2,990,849

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, ~~2010~~2011

(in thousdands)

Portfolio Company/Type of Investment (1) (2)

Industry

Principal (6)

Cost (6)

Fair Value

Affiliate Investments (4)

Olympus Building Services, Inc.

Custodial/Facilities Services

12% Secured Debt (Maturity - March 27, 2014)

3,150,000

2,976,408

3,050,000

12% Current / 3% PIK Secured Debt (Maturity - March 27, 2014)

984,000

984,001

984,001

Warrants (Fully diluted 22.5%)

470,000

930,000

4,430,409

4,964,001

OPI International Ltd.

Oil and Gas Construction Services

12% Secured Debt (Maturity - November 30, 2015)

8,700,000

8,537,285

8,537,285

12% Secured Debt (Maturity - November 30, 2015)

750,000

252,288

252,288

Warrants (Fully diluted 8.0%)

500,000

500,000

9,289,573

9,289,573

Schneider Sales Management, LLC

Sales Consulting and Training

13% Secured Debt (Maturity - October 15, 2013)

3,367,542

3,289,127

1,000,000

Warrants (Fully diluted 20.0%)

45,000

—

3,334,127

1,000,000

Walden Smokey Point, Inc.

Specialty Transportation

Common Stock (Fully diluted 12.6%)

1,426,667

2,620,000

WorldCall, Inc.

Telecommunication/Information Services

13% Secured Debt (Maturity - April 22, 2011)

646,225

646,225

646,225

Common Stock (Fully diluted 10.0%)

296,631

—

942,856

646,225

Subtotal Affiliate Investments

65,650,789

80,206,804

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Control Investments (3)

Van Gilder Insurance Corporation	Insurance Brokerage
		8% Secured Debt (Maturity - January 31, 2013)	1,000	987	987
		8% Secured Debt (Maturity - January 31, 2016)	1,721	1,705	1,705
		13% Secured Debt (Maturity - January 31, 2016)	5,400	4,387	4,387
		Warrants (Fully diluted 10.0%)		1,209	1,209
		Common Stock (Fully diluted 15.5%)		2,500	2,500
				10,788	10,788

Vision Interests, Inc.	Manufacturer / Installer of Commercial Signage
		6.5% Current /6.5% PIK Secured Debt (Maturity - December 23, 2016)	3,000	2,935	2,935
		Series A Prefered Stock (Fully diluted 33.3%)	—	3,000	3,000
		Common Stock (Fully diluted 36.7%)		3,706	—
				9,641	5,935

Ziegler’s NYPD, LLC	Casual Restaurant Group
		Prime Plus 2%, Current Coupon 9%, Secured Debt (Maturity - October 1, 2013) (8)	1,000	996	996
		13% Current / 5% PIK Secured Debt (Maturity - October 1, 2013)	4,299	4,270	4,270
		Warrants (Fully diluted 46.6%)		600	400
				5,866	5,666

Subtotal Control Investments (34.9% of total investments at fair value)				206,787	238,924

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2011

(in thousdands)

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Affiliate Investments (4)

American Sensor Technologies, Inc.	Manufacturer of Commercial / Industrial Sensors
		9% Secured Debt (Maturity - May 31, 2012)	3,046	3,039	3,039
		Warrants (Fully diluted 19.6%)		50	3,100
				3,089	6,139

Compact Power Equipment Centers LLC	Equipment / Tool Rental
		6% Current / 6% PIK Secured Debt (Maturity - December 31, 2014)	2,855	2,831	2,831
		8% PIK Secured Debt (Maturity - December 31, 2011)	108	108	108
		Series A Member Units (8% cumulative) (7)		853	853
		Member Units (Fully diluted 10.6%)		1	1
				3,793	3,793

Drilling Info, Inc.	Information Services for the Oil and Gas Industry
		12% Secured Debt (Maturity - November 20, 2014)	8,000	7,065	8,000
		8.75% Secured Debt (Maturity - April 18, 2016)	750	750	750
		Warrants (Fully diluted 4.9%)		1,250	10,360
		Common Stock (Fully diluted 2.4%)		1,335	4,890
				10,400	24,000

East Teak Fine Hardwoods, Inc.	Hardwood Products
		Common Stock (Fully diluted 5.0%)		480	380

Gault Financial, LLC (RMB Capital, LLC)	Purchases and Manages Liquidation of Distressed Assets
		14% Secured Debt (Maturity - November 21, 2016)	10,500	9,897	9,897
		Warrants (Fully diluted 22.5%)		400	400
				10,297	10,297

Houston Plating and Coatings, LLC	Plating and Industrial Coating Services
		Member Units (Fully diluted 11.1%) (7)		635	5,990

Integrated Printing Solutions, LLC	Specialty Card Printing
		13% Secured Debt (Maturity - September 23, 2016)	10,000	9,228	9,228
		Warrants (Fully diluted 9.0%)		600	600
				9,828	9,828

IRTH Holdings, LLC	Damage Prevention Technology Information Services
		12% Secured Debt (Maturity - December 29, 2015)	5,084	5,006	5,084
		Member Units (Fully diluted 22.3%)		850	2,480
				5,856	7,564

KBK Industries, LLC	Specialty Manufacturer of Oilfield and Industrial Products
		10% Secured Debt (Maturity - March 31, 2012)	15	15	15
		14% Secured Debt (Maturity - January 23, 2014)	5,250	5,250	5,250
		Member Units (Fully diluted 18.8%) (7)		341	2,800
				5,606	8,065

Laurus Healthcare, LP	Management of Outpatient Cardiac Cath Labs
		9% Secured Debt (Maturity - May 12, 2016)	5,850	5,850	5,850
		Class A and C Units (Fully diluted 13.1%) (7)		80	5,430
				5,930	11,280

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, ~~2010~~2011

(in thousdands)

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Affiliate Investments (4)

Olympus Building Services, Inc.	Custodial / Facilities Services
		10% Current / 2% PIK Secured Debt (Maturity - March 27, 2014)	2,434	2,306	2,306
		15% PIK Secured Debt (Maturity - March 27, 2014)	994	994	994
		Warrants (Fully diluted 22.5%)		470	70
				3,770	3,370

OnAsset Intelligence, Inc.	Transportation Monitoring / Tracking Services
		12% Secured Debt (Maturity - October 18, 2012)	1,500	916	916
		Preferred Stock (7% cumulative) (Fully diluted 5.75%) (7)		1,577	1,577
		Warrants (Fully diluted 4.0%)		830	830
				3,323	3,323

OPI International Ltd. (11)	Oil and Gas Construction Services
		12% Secured Debt (Maturity - November 30, 2015)	11,520	10,882	11,130
		Warrants (Fully diluted 8.0%)		500	4,100
				11,382	15,230

Radial Drilling Services Inc.	Oil and Gas Technology
		12% Secured Debt (Maturity - November 23, 2016)	4,200	3,367	3,367
		Warrants (Fully diluted 24.0%)		758	758
				4,125	4,125

Samba Holdings, Inc.	Intelligent Driver Record Monitoring Software and Services
		12.5% Secured Debt (Maturity - November 17, 2016)	3,000	2,941	2,941
		Common Stock (Fully diluted 14.7%)		950	950
				3,891	3,891

Schneider Sales Management, LLC	Sales Consulting and Training
		13% Secured Debt (Maturity - October 15, 2013)	3,568	3,488	250
		Warrants (Fully diluted 20.0%)		45	—
				3,533	250

Spectrio LLC	Audio Messaging Services
		8% Secured Debt (Maturity - June 16, 2016)	168	168	168
		12% Secured Debt (Maturity - June 16, 2016)	13,475	13,008	13,340
		Warrants (Fully diluted 9.8%)		887	2,720
				14,063	16,228

SYNEO, LLC	Manufacturer of Specialty Cutting Tools and Punches
		12% Secured Debt (Maturity - July 13, 2016)	5,500	5,374	5,374
		10% Secured Debt (Maturity - May 4, 2026)	1,440	1,412	1,412
		Member Units (Fully diluted 11.1%)		1,000	1,000
				7,786	7,786

Walden Smokey Point, Inc.	Specialty Transportation Provider
		Common Stock (Fully diluted 12.6%)		1,427	4,220


WorldCall, Inc.	Telecommunication / Information Services
		13% Secured Debt (Maturity - April 22, 2012)	646	646	646
		Common Stock (Fully diluted 10.0%)		297	—
				943	646

Subtotal Affiliate Investments (21.4% of total investments at fair value)				110,157	146,405

Table of Contents

Portfolio Company/Type of Investment (1) (2)

Industry

Principal (6)

Cost (6)

Fair Value

Non-Control/Non-Affiliate Investments (5)

Hoffmaster Group, Inc. (9)

Manufacturer of Specialty Tabletop Products

LIBOR Plus 5.0%, Current Coupon 7%, Secured Debt (Maturity - June 13, 2016) (8)

1,509,615

1,453,860

1,490,745

13.5% Secured Debt (Maturity - June 3, 2017)

5,000,000

4,881,278

4,787,500

6,335,138

6,278,245

Managed Healthcare (9)

Healthcare Products

LIBOR Plus 3.25%, Current Coupon 3.53%, Secured Debt (Maturity - August 31, 2014)

1,987,606

1,548,214

1,659,650

Megapath Inc. (9)

Communications Technology

LIBOR Plus 10%, Current Coupon 12%, Secured Debt (Maturity - November 4, 2015) (8)

4,000,000

3,922,670

4,040,770

Miramax Film NY, LLC (9)

Motion Picture Producer and Distributor

LIBOR Plus 6%, Current Coupon 7.75%, Secured Debt (Maturity - June 30, 2016) (8)

3,000,000

2,940,000

2,940,000

LIBOR Plus 11%, Current Coupon 13%, Secured Debt (Maturity - December 30, 2016) (8)

4,000,000

3,920,000

3,920,000

Class B Units (Fully diluted 0.2%)

500,000

500,000

7,360,000

7,360,000

Northland Cable Television, Inc. (9)

Cable Broadcasting

LIBOR Plus 8.0%, Current Coupon 8.26%, Secured Debt (Maturity - June 22, 2013)

5,000,000

4,851,285

4,988,785

Pierre Foods, Inc. (9)

Foodservice Supplier

Base Plus 4.25%, Current Coupon 7.5%, Secured Debt (Maturity - September 30, 2016) (8)

5,000,000

4,903,804

4,992,702

Base Plus 8.5%, Current Coupon 11.75%, Secured Debt (Maturity - September 29, 2017) (8)

2,000,000

1,932,106

1,992,181

6,835,910

6,984,883

Rentech Energy Midwest Corporation (9)

Manufacturer of Fertilizer

LIBOR Plus 10%, Current Coupon 12.5%, Secured Debt (Maturity - July 29, 2014) (8)

2,331,606

2,274,262

2,274,262

Shearer’s Foods, Inc. (9)

Manufacturer of Food/Snacks

12% Current / 3% PIK Secured Debt (Maturity - March 21, 2016)

4,092,707

3,999,396

4,154,098

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2011

(in thousdands)

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Non-Control/Non-Affiliate Investments (5)

Academy, Ltd. (9)	Sporting Goods Stores
		LIBOR Plus 4.50%, Current Coupon 6.00%, Secured Debt (Maturity - August 3, 2018) (8)	3,000	2,989	2,977

Affinity Videonet, Inc.	Video Conferencing and Managed Services
		13% Secured Debt (Maturity - December 31, 2015)	2,000	1,914	2,000
		13% Current / 1% PIK Secured Debt (Maturity - December 31, 2015)	1,132	1,125	1,125
		Warrants (Fully diluted 2.6%)		63	63
				3,102	3,188

API Technologies Corp. (9)	Manufacturer of Electrical Components and Equipment
		LIBOR Plus 6.25%, Current Coupon 7.75%, Secured Debt (Maturity - June 27, 2016) (8)	2,486	2,406	2,374

Arrowhead General Insurance Agency, Inc. (9)	Insurance
		LIBOR plus 5.75%, Current Coupon 7.50%, Secured Debt (Maturity - March 4, 2017) (8)	3,970	3,900	3,932
		LIBOR plus 9.5%, Current Coupon 11.25%, Secured Debt (Maturity - September 30, 2017) (8)	2,000	1,944	2,010
				5,844	5,942

ATI Acquisition I Corp. (9)	Physical Therapy Facilities
		LIBOR Plus 5.50%, Current Coupon 7.50%, Secured Debt (Maturity - March 11, 2016) (8)	2,849	2,812	2,725

Bourland and Leverich Supply Co., LLC (9)	Distributor of Oil and Gas Tubular Goods
		LIBOR Plus 9.00%, Current Coupon 11.00%, Secured Debt (Maturity - August 19, 2015) (8)	4,191	4,028	4,065

Brand Connections, LLC	Venue-Based Marketing and Media
		14% Secured Debt (Maturity - April 30, 2015)	6,761	6,639	6,639

Brickman Group Holdings, Inc. (9)	Commercial Landscape Services
		LIBOR Plus 5.50%, Current Coupon 7.25%, Secured Debt (Maturity - October 14, 2016) (8)	1,990	1,962	1,997

Business Development Corporation of America (10) (11)	Investment Management
		LIBOR plus 3.50%, Current Coupon 3.77%, Secured Debt (Maturity - January 14, 2013)	5,900	5,900	5,900

Carestream Health, Inc. (9)	Medical Imaging Products
		LIBOR Plus 3.50%, Current Coupon 5.00%, Secured Debt (Maturity - February 25, 2017) (8)	2,985	2,704	2,690

Centerplate, Inc. (9)	Food and Catering Services
		LIBOR Plus 8.50%, Current Coupon 10.50%, Secured Debt (Maturity - September 16, 2016) (8)	2,970	2,896	2,966

CHI Overhead Doors, Inc. (9)	Manufacturer of Overhead Garage Doors
		LIBOR Plus 5.75%, Current Coupon 7.25%, Secured Debt (Maturity - August 17, 2017) (8)	2,494	2,446	2,462
		LIBOR Plus 9.50%, Current Coupon 11.00%, Secured Debt (Maturity - February 17, 2018) (8)	2,500	2,452	2,463
				4,898	4,925

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, ~~2010~~2011

(in thousdands)

Portfolio Company/Type of Investment (1) (2)

Industry

Principal (6)

Cost (6)

Fair Value

Non-Control/Non-Affiliate Investments (5)

Standard Steel, LLC (9)

Manufacturer of Steel Wheels and Axles

12% Secured Debt (Maturity - April 30, 2015)

3,000,000

2,902,821

2,988,750

Support Systems Homes, Inc.

Manages Substance Abuse Treatment Centers

15% Secured Debt (Maturity - August 21, 2018)

576,600

576,600

576,600

Technical Innovations, LLC

Manufacturer of Specialty Cutting Tools and Punches

13.5% Secured Debt (Maturity - January 16, 2015)

2,950,000

2,919,118

2,950,000

The Tennis Channel, Inc.

Sports Broadcasting/Media

LIBOR Plus 6% / 4% PIK, Current Coupon with PIK 14%, Secured Debt (Maturity - January 1, 2013) (8)

9,198,840

9,230,938

9,230,938

Warrants (Fully diluted 0.10%)

211,938

211,938

9,442,876

9,442,876

Other Non-Control/Non-Affiliate Investments (10)

105,000

105,000

Subtotal Non-Control/Non-Affiliate Investments

91,911,304

91,956,221

Main Street Capital Partners, LLC (Investment Manager)

Asset Management

100% of Membership Interests

4,284,042

2,051,655

Total Portfolio Investments, December 31, 2010

$
322,855,578

$
348,811,074

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Non-Control/Non-Affiliate Investments (5)

Diversified Machine, Inc. (9)	Automotive Component Supplier
		LIBOR plus 7.75%, Current Coupon 9.25%, Secured Debt (Maturity - November 28, 2017) (8)	2,000	1,960	2,001

EnCap Energy Capital Fund VIII, L.P. (10) (11)	Investment Partnership
		LP Interests (Fully diluted 0.2%)		709	709

Fairway Group Acquisition Company (9)	Retail Grocery
		LIBOR plus 6.00%, Current Coupon 7.50%, Secured Debt (Maturity - March 3, 2017) (8)	7,463	7,403	7,253

Flexera Software LLC (9)	Software Licensing
		LIBOR Plus 9.75%, Current Coupon 11.00%, Secured Debt (Maturity - September 30, 2018) (8)	3,000	2,765	2,790

Fram Group Holdings, Inc. (9)	Manufacturer of Automotive Maintenance Products
		LIBOR plus 5.00%, Current Coupon 6.50%, Secured Debt (Maturity - July 29, 2017) (8)	998	993	998
		LIBOR plus 9.00%, Current Coupon 10.50%, Secured Debt (Maturity - January 29, 2018) (8)	1,000	995	968
				1,988	1,966

Golden Nugget, LLC (9)	Hotel and Gaming
		LIBOR Plus 8.50%, Current Coupon 10.00%, Secured Debt (Maturity - May 24, 2016) (8)	10,000	9,636	9,450

Gundle/SLT Environmental, Inc. (9)	Manufacturer of Geosynthetic Lining Products
		LIBOR plus 5.50%, Current Coupon 7.00%, Secured Debt (Maturity - May 27, 2016) (8)	2,985	2,958	2,940
		LIBOR Plus 9.50%, Current Coupon 13.00%, Secured Debt (Maturity - November 23, 2016) (8)	4,000	3,926	3,980
				6,884	6,920

Hayden Acquisition, LLC	Manufacturer of Utility Structures
		8% Secured Debt (Maturity - January 1, 2012)	1,800	1,781	—

Helm Financial Corporation (9)	Railcar Leasing
		LIBOR Plus 5.00%, Current Coupon 6.25%, Secured Debt (Maturity - June 1, 2017) (8)	1,985	1,967	1,940

Henniges Automotive Holdings, Inc. (9)	Auto Parts
		LIBOR Plus 10.00%, Current Coupon 12.00%, Secured Debt (Maturity - October 28, 2016) (8)	2,833	2,785	2,785

HMS Income LLC (10) (11)	Investment Management
		LIBOR plus 3.00%, Current Coupon 3.27%, Secured Debt (Maturity - December 12, 2012)	7,500	7,500	7,500

HOA Restaurant Group, LLC (9)	Casual Restaurant Group
		11.25% Bond (Maturity - April 1, 2017)	2,000	2,000	1,865

Il Fornaio Corporation (9)	Casual Restaurant Group
		LIBOR Plus 5.25%, Current Coupon 6.50%, Secured Debt (Maturity - June 10, 2017) (8)	1,985	1,976	1,978

Ipreo Holdings LLC (9)	Application Software for Capital Markets
		LIBOR Plus 6.50%, Current Coupon 8.00%, Secured Debt (Maturity - August 5, 2017) (8)	4,239	4,160	4,144

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, ~~2010~~2011

(in thousdands)

Portfolio Company/Type of Investment (1) (2)

Industry

Principal (6)

Cost (6)

Fair Value

Marketable Securities and Idle Funds Investments

Investments in Secured and Rated Debt Investments, Certificates of Deposit, and Diversified Bond Funds

AL Gulf Coast Terminals, LLC

LIBOR Plus 5.0%, Current Coupon 6.75%, Secured Debt (Maturity - September 21, 2016) (8)

$
6,919,997

$
6,735,294

$
6,746,997

Aspen Dental Management, Inc.

LIBOR Plus 5.0%, Current Coupon 8.25%, Secured Debt (Maturity - October 13, 2016) (8)

4,987,500

4,691,670

4,806,974

ATI Acquisition I Corp.

LIBOR Plus 5.5%, Current Coupon 7.5%, Secured Debt (Maturity - September 14, 2016) (8)

2,885,675

2,841,517

2,857,332

Booz Allen Hamilton Inc.

13% Debt (Maturity - July 5, 2016)

1,716,044

1,781,625

1,765,380

Centerplate, Inc.

LIBOR Plus 7.5%, Current Coupon 10.75%, Secured Debt (Maturity - September 16, 2016) (8)

3,000,000

2,914,206

2,988,750

CHG Companies, Inc.

LIBOR Plus 5.5%, Current Coupon 7.25%, Secured Debt (Maturity - October 14, 2016) (8)

1,975,000

1,937,558

1,996,754

Excelitas Technologies Corp.

LIBOR Plus 5.75%, Current Coupon 7.25%, Secured Debt (Maturity - December 2, 2016) (8)

3,000,000

2,971,096

3,020,771

Gentiva Health Services, Inc.

LIBOR Plus 5.0%, Current Coupon 6.75%, Secured Debt (Maturity - September 20, 2016) (8)

2,981,250

2,975,289

3,014,789

Henniges Automotive Holdings, Inc.

LIBOR Plus 10.0%, Current Coupon 12%, Secured Debt (Maturity - December 7, 2016) (8)

3,000,000

2,941,308

2,941,308

MLM Holdings, Inc.

LIBOR Plus 5.25%, Current Coupon 7%, Secured Debt (Maturity - December 1, 2016) (8)

6,982,500

6,879,686

6,897,406

MultiPlan, Inc.

LIBOR Plus 4.75%, Current Coupon 6.5%, Secured Debt (Maturity - August 26, 2017) (8)

3,876,923

3,863,709

3,913,269

Rite Aid Corporation

7.5% Bond (Maturity - March 1, 2017)

2,000,000

1,889,335

1,845,874

SonicWALL, Inc.

LIBOR plus 6.25%, Current Coupon 8.25%, Secured Debt (Maturity - August 1, 2016) (8)

1,794,355

1,797,374

1,807,813

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Non-Control/Non-Affiliate Investments (5)

Ivy Hill Middle Market Credit Fund III, Ltd. (9) (11)	Asset Management
		LIBOR Plus 6.50%, Current Coupon 6.77%, Secured Debt (Maturity - January 15, 2022)	2,000	1,659	1,658

JJ Lease Funding Corp. (9)	Apparel Retail
		LIBOR Plus 8.50%, Current Coupon 10.00%, Secured Debt (Maturity - April 29, 2017) (8)	3,950	3,842	3,160

Kadmon Pharmaceuticals, LLC (9)	Biopharmaceutical Products
		LIBOR Plus 13.00%, Current Coupon 15.00%, Secured Debt (Maturity - October 31, 2012) (8)	6,000	5,899	6,255

Lawson Software, Inc. (9)	Application Software
		LIBOR Plus 5.25%, Current Coupon 6.75%, Secured Debt (Maturity - July 5, 2017) (8)	4,988	4,801	4,875

Liqui-Box, Inc. (9)	Supplier of Specialty Packaging
		LIBOR plus 5.25%, Current Coupon 6.75%, Secured Debt (Maturity - December 29, 2017) (8)	3,000	2,955	2,985

Media Holdings, LLC (9) (11)	Internet Traffic Generator
		LIBOR plus 13.00%, Current Coupon 15.00%, Secured Debt (Maturity - April 28, 2014) (8)	5,000	5,129	5,000

Medpace Intermediateco, Inc. (9)	Clinical Trial Development and Execution
		LIBOR Plus 5.00%, Current Coupon 6.50%, Secured Debt (Maturity - June 17, 2017) (8)	4,975	4,905	4,726

Megapath, Inc. (9)	Communications Technology
		LIBOR plus 10.00%, Current Coupon 12.00%, Secured Debt (Maturity - November 3, 2015) (8)	3,600	3,541	3,546

Metropolitan Health Networks, Inc. (9) (11)	Healthcare Network Provider
		LIBOR plus 5.50%, Current Coupon 7.00%, Secured Debt (Maturity - October 4, 2016) (8)	2,000	1,971	1,940
		LIBOR plus 11.75%, Current Coupon 13.50%, Secured Debt (Maturity - October 4, 2017) (8)	3,250	3,187	3,185
				5,158	5,125

Milk Specialties Company (9)	Processor of Nutrition Products
		LIBOR plus 7.00%, Current Coupon 8.50%, Secured Debt (Maturity - December 27, 2017) (8)	4,000	3,880	3,900
		LIBOR plus 13.00%, Current Coupon 14.50%, Secured Debt (Maturity - December 27, 2018) (8)	1,000	960	965
				4,840	4,865

Miramax Film NY, LLC (9)	Motion Picture Producer and Distributor
		Class B Units (Fully diluted 0.2%)		500	500

Mood Media Corporation (9) (11)	Music Provider
		LIBOR Plus 5.50%, Current Coupon 7.00%, Secured Debt (Maturity - May 6, 2018) (8)	2,985	2,956	2,779

MultiPlan, Inc. (9)	Managed Healthcare Provider
		LIBOR Plus 3.25%, Current Coupon 4.75%, Secured Debt (Maturity - August 26, 2017) (8)	2,956	2,956	2,821

Table of Contents

Portfolio Company/Type of Investment (1) (2)

Industry

Principal (6)

Cost (6)

Fair Value

Marketable Securities and Idle Funds Investments

Terex Corporation

7.4% Bond (Maturity - January 15, 2014)

2,000,000

2,023,301

2,023,301

Visant Corporation

LIBOR Plus 5.25%, Current Coupon 7%, Secured Debt (Maturity - December 28, 2016) (8)

4,987,500

4,891,963

5,057,003

Vision Solutions, Inc.

LIBOR Plus 6.0%, Current Coupon 7.75%, Secured Debt (Maturity - July 23, 2016) (8)

1,925,000

1,612,010

1,631,338

Western Refining Inc.

LIBOR Plus 7.5%, Current Coupon 10.75%, Secured Debt (Maturity - August 1, 2014) (8)

1,708,883

1,672,628

1,736,654

Wyle Services Corporation

LIBOR Plus 4.0%, Current Coupon 6%, Secured Debt (Maturity - September 10, 2016) (8)

3,989,992

3,964,645

4,003,290

Yankee Cable Acquisition, LLC

LIBOR Plus 4.5%, Current Coupon 6.5%, Secured Debt (Maturity - August 26, 2016) (8)

3,990,000

3,933,213

3,990,000

Other Marketable Securities and Idle Funds Investments (11)

5,529,450

5,653,480

5,707,855

Subtotal Marketable Securities and Idle Funds Investments

67,970,907

68,752,858

Total Investments, December 31, 2010

$
390,826,485

$
417,563,932

~~(1) Debt investments are generally income producing. Equity and warrants are non-income producing, unless otherwise noted.~~MAIN STREET CAPITAL CORPORATION

~~(2) See Note C for summary geographic location of portfolio companies.~~CONSOLIDATED SCHEDULE OF INVESTMENTS

(3) Controlled investments are defined by the Investment Company Act of 1940, as amended (“1940 Act”) as investments in which more than 25% of the voting securities are owned or where the ability to nominate greater than 50% of the board representation is maintained.December 31, 2011

~~(4) Affiliate investments are defined by the 1940 Act as investments~~ (in ~~which between 5% and 25% of the voting securities are owned and the investments are not classified as Controlled investments.~~thousdands)

~~(5) Non-Control/Non-Affiliate investments are defined by the 1940 Act as investments that are neither Control Investments nor Affiliate Investments.~~

~~(6) Principal is net of prepayments. Cost is net of prepayments and accumulated unearned income.~~

~~(7) Income producing through dividends or distributions.~~

~~(8) Index based floating interest rate subject to contractual minimum interest rates.~~

~~(9) Private placement portfolio investment.~~

~~(10) Other Non-Control/Non-Affiliate investments consist of equity investments in lower middle market companies.~~

~~(11) Other Marketable Securities and Idle Funds Investments consist of investments in secured and rated debt investments and diversified bond funds.~~

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Non-Control/Non-Affiliate Investments (5)

National Healing Corporation (9)	Wound Care Management
		LIBOR plus 6.75%, Current Coupon 8.25%, Secured Debt (Maturity - November 30, 2017) (8)	2,750	2,614	2,653
		LIBOR plus 10.00%, Current Coupon 11.50%, Secured Debt (Maturity - November 30, 2018) (8)	1,500	1,411	1,433
		Common Equity (Fully diluted 0.02%)		50	50
				4,075	4,136

Northland Cable Television, Inc. (9)	Television Broadcasting
		LIBOR Plus 6.00%, Current Coupon 7.75%, Secured Debt (Maturity - December 30, 2016) (8)	4,950	4,823	4,802

Ocwen Financial Corporation (9) (11)	Residential and Commercial Loan Services
		LIBOR Plus 5.50%, Current Coupon 7.00%, Secured Debt (Maturity - September 1, 2016) (8)	4,750	4,660	4,685

Pacific Architects and Engineers Incorporated (9)	Provider of Contract Support Services
		LIBOR Plus 6.00%, Current Coupon 7.50%, Secured Debt (Maturity - April 4, 2017) (8)	3,995	3,917	3,875

Phillips Plastic Corporation (9)	Custom Molder of Plastics and Metals
		LIBOR Plus 5.00%, Current Coupon 6.50%, Secured Debt (Maturity - February 12, 2017) (8)	1,750	1,733	1,737

Physician Oncology Services, L.P. (9)	Provider of Radiation Therapy and Oncology Services
		LIBOR plus 4.75%, Current Coupon 6.25%, Secured Debt (Maturity - January 31, 2017) (8)	942	934	904

Pierre Foods, Inc. (9)	Foodservice Supplier
		LIBOR plus 5.25%, Current Coupon 7.00%, Secured Debt (Maturity - September 30, 2016) (8)	4,950	4,868	4,945
		LIBOR plus 9.50%, Current Coupon 11.25%, Secured Debt (Maturity - September 29, 2017) (8)	2,000	1,939	1,995
				6,807	6,940

Preferred Proppants, LLC (9)	Producer of Sand Based Proppants
		LIBOR plus 6.00%, Current Coupon 7.50%, Secured Debt (Maturity - December 15, 2016) (8)	5,000	4,877	4,889

Race Point Power, LLC (9)	Electric Utilities / Power Generation
		LIBOR Plus 6.00%, Current Coupon 7.75%, Secured Debt (Maturity - January 11, 2018) (8)	4,658	4,576	4,617

Radio One, Inc. (9)	Radio Broadcasting
		LIBOR Plus 6.00%, Current Coupon 7.50%, Secured Debt (Maturity - March 31, 2016) (8)	2,978	2,925	2,775

Shearer’s Foods, Inc. (9)	Manufacturer of Food/ Snacks
		12.00% Current /3.75% PIK Secured Debt (Maturity - March 31, 2016)	4,262	4,179	4,092

SonicWALL, Inc. (9)	IT Security Provider
		LIBOR Plus 6.25%, Current Coupon 8.25%, Secured Debt (Maturity - January 23, 2016) (8)	1,072	1,073	1,074

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2011

(in thousdands)

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Non-Control/Non-Affiliate Investments (5)

Sourcehov LLC (9)	Business Process Services
		LIBOR plus 5.38%, Current Coupon 6.63%, Secured Debt (Maturity - April 28, 2017) (8)	2,993	2,896	2,526
		LIBOR plus 9.25%, Current Coupon 10.50%, Secured Debt (Maturity - April 30, 2018) (8)	3,000	2,872	2,505
				5,768	5,031

Speedy Cash Intermediate Holdings Corp. (9)	Consumer Finance
		10.75% Bond (Maturity - May 15, 2018)	2,000	2,000	2,010

Surgery Center Holdings, Inc. (9)	Ambulatory Surgical Centers
		LIBOR Plus 5.00%, Current Coupon 6.50%, Secured Debt (Maturity - February 6, 2017) (8)	4,963	4,940	4,628

The Tennis Channel, Inc.	Television-Based Sports Broadcasting
		LIBOR Plus 6% / 4% PIK, Current Coupon with PIK 14%, Secured Debt (Maturity - January 1, 2013) (8)	10,610	11,450	11,450
		Warrants (Fully diluted 0.1%)		235	235
				11,685	11,685

Totes Isotoner Corporation (9)	Weather Accessory Retail
		LIBOR Plus 5.75%, Current Coupon 7.25%, Secured Debt (Maturity - July 7, 2017) (8)	4,976	4,883	4,839

Ulterra Drilling Technologies, L.P. (9)	Manufacturer of Oil and Gas Drilling Products
		LIBOR plus 7.50%, Current Coupon 9.50%, Secured Debt (Maturity - June 9, 2016) (8)	6,572	6,452	6,441
		LIBOR plus 7.50%, Current Coupon 9.50%, Secured Debt (Maturity - June 9, 2016) (8)	1,848	1,803	1,754
				8,255	8,195

UniTek Global Services, Inc. (9)	Provider of Outsourced Infrastructure Services
		LIBOR plus 7.50%, Current Coupon 9.00%, Secured Debt (Maturity - April 15, 2018) (8)	6,434	6,256	6,304

VFH Parent LLC (9)	Electronic Trading and Market Making
		LIBOR Plus 6.00%, Current Coupon 7.50%, Secured Debt (Maturity - July 8, 2016) (8)	4,180	4,103	4,195

Visant Corporation (9)	School Affinity Stores
		LIBOR Plus 4.00%, Current Coupon 5.25%, Secured Debt (Maturity - December 22, 2016) (8)	3,998	3,998	3,760

Vision Solutions, Inc. (9)	Computer Software
		LIBOR plus 4.50%, Current Coupon 6.00%, Secured Debt (Maturity - July 23, 2016) (8)	2,838	2,586	2,585
		LIBOR plus 8.00%, Current Coupon 9.50%, Secured Debt (Maturity - July 23, 2017) (8)	5,000	4,955	4,850
				7,541	7,435

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2011

(in thousdands)

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)	Fair Value
Non-Control/Non-Affiliate Investments (5)

Walter Investment Management Corp. (9) (11)	Real Estate Services
		LIBOR plus 6.25%, Current Coupon 7.75%, Secured Debt (Maturity - June 30, 2016) (8)	2,888	2,833	2,886
		LIBOR plus 11.00%, Current Coupon 12.50%, Secured Debt (Maturity - December 30, 2016) (8)	3,000	2,944	3,036
				5,777	5,922

Willis Group, LLC	Staffing and Recruitment Services
		12% Current / 3% PIK Secured Debt (Maturity - December 19, 2014)	9,000	8,824	8,824

Wyle Services Corporation (9)	Specialized Engineering and Technical Services
		LIBOR Plus 4.25%, Current Coupon 5.75%, Secured Debt (Maturity - March 26, 2017) (8)	3,735	3,715	3,657

Yankee Cable Acquisition, LLC (9)	Broadband Service Provider
		LIBOR Plus 4.50%, Current Coupon 6.50%, Secured Debt (Maturity - August 26, 2016) (8)	3,950	3,902	3,900

Subtotal Non-Control/Non-Affiliate Investments (39.6% of total investments at fair value)				275,061	270,895

Main Street Capital Partners, LLC (Investment Manager) (0.3% of total investments at fair value)	Asset Management
		100% of Membership Interests		4,284	1,869

Total Portfolio Investments, December 31, 2011				596,289	658,093

Table of Contents

MAIN STREET CAPITAL CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

December 31, 2011

(in thousdands)

Portfolio Company	Business Description	Type of Investment (1) (2)	Principal (6)	Cost (6)		Fair Value
Marketable Securities and Idle Funds Investments

A. M. Castle & Co. Bond (11)	Investments in Marketable Securities and Diversified, Registered Bond Funds
		12.75% Bond (Maturity - December 15, 2016)	3,000	2,896		3,015

Fairfield Redevelopment Bond (11)
		9.50% Bond (Maturity - March 1, 2021)	3,085	3,132		3,254

General Motors Company (11)
		Preferred stock (0.59% cumulative) (7)		255		175

Industry Bond (11)
		8.00% Bond (Maturity - January 1, 2020)	3,500	3,668		3,763

Pretium Packaging Bond (11)
		11.50% Bond (Maturity - April 1, 2016)	4,500	4,515		4,410

San Diego Redevelopment Bond (11)
		7.38% Bond (Maturity - September 1, 2037)	275	275		284

Stanton Redevelopment Tax Bond (11)
		9.00% Bond (Maturity - December 1, 2021)	980	1,012		1,024

Stora Enso OYJ Bond (11)
		7.25% Bond (Maturity - April 15, 2036)	5,700	4,596		4,646

Toll Road Investors Partnership II, LP Bond (11)
		Zero Coupon Bond (Maturity - February 15, 2033)	7,500	1,620		1,940

United Refining Company Bond (11)
		10.50% Bond (Maturity - February 28, 2017)	3,990	3,966		3,731

Subtotal Marketable Securities and Idle Funds Investments (3.8% of total investments at fair value)				25,935		26,242

Total Investments, December 31, 2011				$	622,224	$	684,335

(1)	Debt investments are generally income producing. Equity and warrants are non-income producing, unless otherwise noted.
(2)	See Note C for summary geographic location of portfolio companies.
(3)	Controlled investments are defined by the Investment Company Act of 1940, as amended (“1940 Act”) as investments in which more than 25% of the voting securities are owned or where the ability to nominate greater than 50% of the board representation is maintained.
(4)	Affiliate investments are defined by the 1940 Act as investments in which between 5% and 25% of the voting securities are owned and the investments are not classified as Controlled investments.
(5)	Non-Control/Non-Affiliate investments are defined by the 1940 Act as investments that are neither Control Investments nor Affiliate Investments.
(6)	Principal is net of prepayments. Cost is net of prepayments and accumulated unearned income.
(7)	Income producing through dividends or distributions.
(8)	Index based floating interest rate is subject to contractual minimum interest rates.
(9)	Middle Market portfolio investment.
(10)	Other Portfolio investment.
(11)	Investment is not a “qualifying asset” as defined under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets.

Table of Contents

MAIN STREET CAPITAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE A — ORGANIZATION AND BASIS OF PRESENTATION

1. Organization

Main Street Capital Corporation (“MSCC”) was formed on March 9, 2007 for the purpose of (i) acquiring 100% of the equity interests of Main Street Mezzanine Fund, LP (“MSMF”) and its general partner, Main Street Mezzanine Management, LLC (“MSMF GP”), (ii) acquiring 100% of the equity interests of Main Street Capital Partners, LLC (the “Investment Manager”), (iii) raising capital in an initial public offering, which was completed in October 2007 (the “IPO”), and (iv) thereafter operating as an internally managed business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). MSMF is licensed as a Small Business Investment Company (“SBIC”) by the United States Small Business Administration (“SBA”) and the Investment Manager acts as MSMF’s manager and investment adviser. Because the Investment Manager, which employs all of the executive officers and other employees of MSCC, is wholly owned by MSCC, MSCC does not pay any external investment advisory fees but instead incurs the operating costs associated with employing investment and portfolio management professionals through the Investment Manager. The IPO and related transactions discussed above were consummated in October 2007 and are collectively termed the “Formation Transactions.”

MSCC has elected to be treated for federal income tax purposes as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). As a result, MSCC generally will not pay corporate-level federal income taxes on any net ordinary income or capital gains that it distributes to its stockholders as dividends.

MSCC has direct or indirect subsidiaries that have elected to be taxable entities (the “Taxable Subsidiaries”). The primary purpose of these entities is to hold certain investments that generate “pass through” income for tax purposes. The Taxable Subsidiaries are each taxed at their normal corporate tax rates based on their taxable income.

Unless otherwise noted or the context otherwise indicates, the terms “we,” “us,” “our” and “Main Street” refer to MSCC and its subsidiaries, including ~~MSMF, MSC II,~~the Funds and the Taxable Subsidiaries.

2. Basis of Presentation

Main Street’s financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2012 and 2011, ~~and 2010,~~ Main Street’s consolidated financial statements include the accounts of MSCC and its consolidated subsidiaries, including the Funds. Portfolio investments, as used herein, refers to all of Main Street’s investments in ~~lower middle market (“LMM”)~~LMM portfolio companies, ~~private placement~~investments in Middle Market portfolio companies, Other Portfolio investments and the investment in the Investment Manager and excludes all “Marketable securities and idle funds ~~investments.”~~investments” (see Note C for additional discussion of Main Street’s portfolio investment composition and definitions for the defined terms LMM, Middle Market and Other Portfolio). The Investment Manager is accounted for as a portfolio investment (see Note D). “Marketable securities and idle funds investments” are classified as financial instruments and are reported separately on Main Street’s Consolidated Balance Sheets and Consolidated Schedule of Investments due to the nature of such investments (see Note B.9). Main Street’s results of operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2012 and 2011, ~~and 2010,~~ cash flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2012 and 2011, ~~and 2010,~~ and financial position as of ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010,~~2011, are presented on a consolidated basis. The effects of all intercompany transactions between Main Street and its consolidated subsidiaries have been eliminated in consolidation.

Table of Contents

Certain reclassifications have been made to prior period balances to conform with the current financial statement ~~presentation.~~presentation, including certain investments previously classified as “Marketable securities and idle funds investments” that are now considered a part of the Middle Market portfolio and are now classified as “Non-Control/Non-Affiliate investments.”

~~Table of Contents~~

the opinion of management, the unaudited consolidated financial results included herein contain all adjustments, consisting solely of normal recurring accruals, considered necessary for the fair presentation of financial statements for the interim periods included herein. The results of operations for the three ~~and nine~~ months ended ~~September 30, 2011~~March 31, 2012 are not necessarily indicative of the operating results to be expected for the full year. Also, the unaudited financial statements and notes should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, ~~2010.~~2011. Financial statements prepared on a U.S. GAAP basis require management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.

Under the investment company rules and regulations pursuant to Article 6 of Regulation S-X and the Audit and Accounting Guide for Investment Companies issued by the American Institute of Certified Public Accountants (the “AICPA Guide”), Main Street is precluded from consolidating portfolio company investments, including those in which it has a controlling interest, unless the portfolio company is another investment company. An exception to this general principle in the AICPA Guide occurs if Main Street owns a controlled operating company that provides all or substantially all of its services directly to Main Street or to an investment company of Main Street. None of the investments made by Main Street qualify for this exception. Therefore, Main Street’s portfolio investments are carried on the balance sheet at fair value, as discussed further in Note B, with any adjustments to fair value recognized as “Net Change in Unrealized Appreciation (Depreciation)” on the Statement of Operations until the investment is realized, usually upon exit, resulting in any gain or loss on exit being recognized as a “Net Realized Gain (Loss) from Investments.”

Portfolio Investment Classification

Main Street classifies its portfolio investments in accordance with the requirements of the 1940 Act. Under the 1940 Act, (a) “Control Investments” are defined as investments in which Main Street owns more than 25% of the voting securities or has rights to maintain greater than 50% of the board representation, (b) “Affiliate Investments” are defined as investments in which Main Street owns between 5% and 25% of the voting securities and does not have rights to maintain greater than 50% of the board representation, and (c) Non-Control/Non-Affiliate Investments” are defined as investments that are neither Control Investments nor Affiliate Investments. The line item on Main Street’s Consolidated Balance Sheets entitled “Investment in affiliated Investment Manager” represents Main Street’s investment in a wholly owned investment manager subsidiary that is accounted for as a portfolio investment.

NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Valuation of Portfolio Investments

Main Street accounts for its LMM portfolio investments, ~~private placement~~Middle Market portfolio investments, Other Portfolio investments and the investment in the Investment Manager at fair value. As a result, Main Street follows the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“Codification” or “ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. ASC 820 requires Main Street to assume that the portfolio investment is to be sold in the principal market to independent market participants, ~~or in the absence of a principal market, in the most advantageous market,~~ which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal ~~or most advantageous~~ market that are independent, knowledgeable, and willing and able to transact. With the adoption of this statement, Main Street incorporated the income approach to estimate the fair value of its LMM portfolio debt investments using a yield-to-maturity model.

Main Street’s portfolio strategy calls for it to invest primarily in illiquid securities issued by private, LMM companies as well as ~~privately placed~~ debt securities issued by ~~private, middle market~~Middle Market companies that are generally larger in size than the LMM companies. These portfolio investments may be subject to restrictions on resale. LMM companies generally have no established trading market while ~~privately placed debt~~Middle Market securities generally have established markets that are not active. Main Street determines in good faith the fair value of its portfolio investments pursuant to a valuation policy in accordance with ASC 820 and a valuation process approved by its Board of Directors and in accordance with the 1940 Act. For LMM portfolio investments, Main Street reviews external events, including private mergers, sales and acquisitions involving comparable companies, and includes these events in the valuation process. For ~~private placement~~Middle Market portfolio investments, Main Street generally uses observable inputs such as quoted prices in the valuation process. Main Street’s valuation policy and process are intended to provide a consistent basis for determining the fair value of the portfolio.

Table of Contents

For valuation purposes, “control” investments are composed of equity and debt securities for which Main Street has a controlling interest in the portfolio company or has the ability to nominate a majority of the portfolio company’s board of directors. Market quotations are generally not readily available for Main Street’s control investments. As a result, Main Street determines the fair value of control investments using a combination of market and income approaches. Under the market approach, Main Street will

~~Table of Contents~~

typically use the enterprise value methodology to determine the fair value of these investments. The enterprise value is the fair value at which an enterprise could be sold in a transaction between two willing parties, other than through a forced or liquidation sale. Typically, private companies are bought and sold based on multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”), cash flows, net income, revenues, or in limited cases, book value. There is no single methodology for estimating enterprise value. For any one portfolio company, enterprise value is generally described as a range of values from which a single estimate of enterprise value is derived. In estimating the enterprise value of a portfolio company, Main Street analyzes various factors, including the portfolio company’s historical and projected financial results. Main Street allocates the enterprise value to investments in order of the legal priority of the investments. Main Street will also use the income approach to determine the fair value of these securities, based on projections of the discounted future free cash flows that the portfolio company or the debt security will likely generate. The valuation approaches for Main Street’s control investments estimate the value of the investment if Main Street were to sell, or exit, the investment. In addition, these valuation approaches consider the value associated with Main Street’s ability to control the capital structure of the portfolio company, as well as the timing of a potential exit.

For valuation purposes, “non-control” LMM portfolio investments are composed of debt and equity securities for which Main Street does not have a controlling interest in the portfolio company, or the ability to nominate a majority of the portfolio company’s board of directors. Market quotations for non-control LMM portfolio investments are generally not readily available. For non-control LMM portfolio investments, Main Street uses a combination of the market and income approaches to value its equity investments and the income approach to value its debt instruments. For non-control LMM debt investments, Main Street determines the fair value primarily using a yield approach that analyzes the discounted cash flows of interest and principal for the debt security, as set forth in the associated loan agreements, as well as the financial position and credit risk of each of these portfolio investments. Main Street’s estimate of the expected repayment date of an LMM debt security is generally the legal maturity date of the instrument, as Main Street generally intends to hold its loans to maturity. The yield analysis considers changes in leverage levels, credit quality, portfolio company performance and other factors. Main Street will use the value determined by the yield analysis as the fair value for that security; however, because of Main Street’s general intent to hold its loans to maturity, the fair value will not exceed the face amount of the LMM debt security. A change in the assumptions that Main Street uses to estimate the fair value of its LMM debt securities using the yield analysis could have a material impact on the determination of fair value. If there is deterioration in credit quality or an LMM debt security is in workout status, Main Street may consider other factors in determining the fair value of the LMM debt security, including the value attributable to the debt security from the enterprise value of the portfolio company or the proceeds that would be received in a liquidation analysis.

Pursuant to its internal valuation process and the requirements under the 1940 Act, Main Street performs valuation procedures on each LMM portfolio company once a quarter. In addition to its internal valuation process, in arriving at estimates of fair value for portfolio companies, Main Street, among other things, consults with a nationally recognized independent advisor. The nationally recognized independent advisor is generally consulted relative to each LMM portfolio investment at least once in every calendar year, and for new LMM portfolio companies, at least once in the twelve-month period subsequent to the initial investment. In certain instances, Main Street may determine that it is not cost-effective, and as a result is not in its stockholders’ best interest, to consult with the nationally recognized independent advisor on one or more LMM portfolio companies. Such instances include, but are not limited to, situations where the fair value of Main Street’s investment in an LMM portfolio company is determined to be insignificant relative to the total investment portfolio. Main Street consulted with its independent advisor in arriving at Main Street’s determination of fair value on a total of 3112 LMM portfolio companies for the ~~nine~~three months ended ~~September 30, 2011,~~March 31, 2012, representing approximately ~~66%~~22% of the total LMM portfolio and investment in the affiliated Investment Manager at fair value as of ~~September 30, 2011.~~March 31, 2012.

For valuation purposes, all of Main Street’s ~~private placement~~Middle Market portfolio investments are non-control investments and are composed of securities for which Main Street does not have a controlling interest in the portfolio company, or the ability to nominate a majority of the portfolio company’s board of directors. Main Street primarily uses observable inputs to determine the fair value of these investments through obtaining third party quotes or other independent pricing.

For valuation purposes, all of Main Street’s Other Portfolio investments are non-control investments and are composed of securities for which Main Street generally does not have a controlling interest in the portfolio company, or the ability to nominate a majority of the portfolio company’s board of directors. Similar to the LMM investment portfolio, market quotations for Other Portfolio investments are generally not readily available. Main Street values its Other Portfolio equity investments based on the fair value of the portfolio company as determined by independent third parties and based on Main Street’s proportional ownership in the portfolio company, as well as the financial position and assessed risk of each of these portfolio investments. Main Street values its

Table of Contents

Other Portfolio debt investments based on the income approach and generally uses a yield approach that analyzes the discounted cash flows of interest and principal for the debt security, as set forth in the associated loan agreements, as well as the financial position and credit risk of each of these portfolio investments.

Due to the inherent uncertainty in the valuation process, Main Street’s ~~estimate~~determination of fair value may differ materially from the values that would have been used had a ready market for the securities existed. In addition, changes in the market environment, portfolio company performance and other events that may occur over the lives of the investments may cause the gains or losses ultimately realized on these investments to be materially different than the valuations currently assigned. Main Street ~~estimates~~determines the fair value of each individual investment and records changes in fair value as unrealized appreciation or depreciation.

Main Street uses a standard internal portfolio investment rating system in connection with its investment oversight, portfolio management/analysis and investment valuation ~~procedures.~~procedures for its LMM portfolio companies. This system takes into account both quantitative and qualitative factors of the LMM portfolio company and the investments held therein.

~~Table of Contents~~

The Board of Directors of Main Street has the final responsibility for reviewing and approving, in good faith, Main Street’s ~~estimate~~determination of the fair value for its portfolio investments consistent with the 1940 Act requirements. Main Street believes its portfolio investments as of ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010~~2011 approximate fair value as of those dates based on the market in which Main Street operates and other conditions in existence at those reporting periods.

2. Interest and Dividend Income

Interest and dividend income is recorded on the accrual basis to the extent amounts are expected to be collected. Dividend income is recorded as dividends are declared or at the point an obligation exists for the portfolio company to make a distribution. In accordance with Main Street’s valuation policy, accrued interest and dividend income is evaluated periodically for collectability. When a loan or debt security becomes 90 days or more past due, and if Main Street otherwise does not expect the debtor to be able to service all of its debt or other obligations, Main Street will generally place the loan or debt security on non-accrual status and cease recognizing interest income on that loan or debt security until the borrower has demonstrated the ability and intent to pay contractual amounts due. If a loan or debt security’s status significantly improves regarding the debtor’s ability to service the debt or other obligations, or if a loan or debt security is fully impaired, sold or written off, it will be removed from non-accrual status.

Main Street holds debt and preferred equity instruments in its investment portfolio that contain payment-in-kind (“PIK”) interest and cumulative dividend provisions. The PIK interest, computed at the contractual rate specified in each debt agreement, is periodically added to the principal balance of the debt and is recorded as interest income. Thus, the actual collection of this interest may be deferred until the time of debt principal repayment. Cumulative dividends are recorded as dividend income, and any dividends in arrears are added to the balance of the preferred equity investment. The actual collection of dividends in arrears may be deferred until such time as the preferred equity is redeemed. To maintain RIC tax treatment (as discussed below), these non-cash sources of income may need to be paid out to stockholders in the form of distributions, even though Main Street may not have collected the PIK interest and cumulative dividends in cash. For the three months ended March 31, 2012 and 2011, (i) approximately 3.9% and 4.5%, respectively, of our total investment income was attributable to PIK interest income and (ii) approximately 2.0% and 2.9%, respectively, of our total investment income was attributable to cumulative dividend income.

As of ~~September 30, 2011,~~March 31, 2012, Main Street had ~~two~~no investments with positive fair value on non-accrual status and two fully impaired investments which comprised approximately ~~1.3%~~0.9% of the total portfolio investments at ~~fair value and 3.4% of the total portfolio investments at~~ cost, ~~(or 1.0% and 2.6%, respectively with the inclusion of marketable securities and idle funds investments), in each case~~ excluding the investment in the affiliated Investment Manager. As of December 31, ~~2010,~~2011, Main Street had ~~two investments~~one investment with positive fair value on non-accrual status, which comprised ~~approximately 2.6%~~less than 0.1% of the total portfolio investments at fair value and, ~~3.6%~~together with another fully impaired investment, comprised approximately 0.9% of the total portfolio investments at cost, ~~(or 2.2% and 3.0%, respectively with the inclusion of marketable securities and idle funds investments),~~ in each case excluding the investment in the affiliated Investment Manager.

3. Fee Income — Structuring and Advisory Services

Main Street may periodically provide services, including structuring and advisory services, to its portfolio companies. For services that are separately identifiable and evidence exists to substantiate fair value, income is recognized as earned, which is generally when the investment or other applicable transaction closes. Fees received in connection with debt financing transactions for services that do not meet these criteria are treated as debt origination fees and are accreted into interest income over the life of the financing.

Table of Contents

4. Unearned Income — Debt Origination Fees, ~~and~~ Original Issue Discount and Discounts / Premiums to Par Value

Main Street capitalizes upfront debt origination fees received in connection with financings and reflects such fees as unearned income netted against investments. ~~Main Street will also capitalize and offset direct loan origination costs against the origination fees received.~~ The unearned income from the fees, net of direct debt origination costs, is accreted into interest income based on the effective interest method over the life of the financing.

In connection with its portfolio debt investments, Main Street sometimes receives nominal cost warrants (“nominal cost equity”) that are valued as part of the negotiation process with the particular portfolio company. When Main Street receives nominal cost equity, Main Street allocates its cost basis in its investment between its debt securities and its nominal cost equity at the time of origination. Any discount recorded on a debt investment resulting from this allocation is reflected as unearned income, which is netted against the debt investment, and accreted into interest income based on the effective interest method over the life of the debt. The actual collection of this interest may be deferred until the time of debt principal repayment.

Main Street may also purchase debt securities at a discount or at a premium to the par value of the debt security. When Main Street purchases a debt security at a discount to the par value of the debt security, Main Street records the par value of the debt security net of the discount, and the discount is accreted into interest income based on the effective interest method over the life of the debt investment. When Main Street purchases a debt security at a premium to the par value of the debt security, Main Street records the premium as incremental to the par value of the debt security, and the premium is amortized as a reduction to interest income based on the effective interest method over the life of the debt. To maintain RIC tax treatment (as discussed below), these non-cash sources of income may need to be paid out to stockholders in the form of distributions, even though Main Street may not have collected the interest income.

~~Table of Contents~~

5. Share-Based Compensation

Main Street accounts for its share-based compensation plans using the fair value method, as prescribed by ASC 718, Compensation — Stock Compensation. Accordingly, for restricted stock awards, Main Street measures the grant date fair value based upon the market price of its common stock on the date of the grant and amortizes that fair value to share-based compensation expense over the requisite service period or vesting term.

6. Income Taxes

MSCC has elected and intends to continue to qualify for the tax treatment applicable to a RIC under the Code, and, among other things, intends to make the required distributions to its stockholders as specified therein. In order to qualify as a RIC, MSCC is required to timely distribute to its stockholders at least 90% of investment company taxable income, as defined by the Code, each year. Depending on the level of taxable income earned in a tax year, MSCC may choose to carry forward taxable income in excess of current year distributions into the next tax year and pay a 4% excise tax on such income. Any such carryover taxable income must be distributed through a dividend declared prior to filing the final tax return related to the year which generated such taxable income.

The Taxable Subsidiaries hold certain portfolio investments of Main Street. The Taxable Subsidiaries are consolidated for U.S. GAAP reporting purposes, and the portfolio investments held by them are included in the consolidated financial statements. The Taxable Subsidiaries permit Main Street to hold equity investments in portfolio companies which are “pass through” entities for tax purposes in order to comply with the “source income” requirements contained in the RIC tax provisions. The Taxable Subsidiaries are not consolidated with Main Street for income tax purposes and may generate income tax expense, or benefit, as a result of their ownership of certain portfolio investments. This income tax expense, or benefit, is reflected in the consolidated statement of operations.

The Taxable Subsidiaries use the liability method in accounting for income taxes. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, using statutory tax rates in effect for the year in which the temporary differences are expected to reverse. A valuation allowance is provided against deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses. Taxable income generally excludes net unrealized appreciation or depreciation, as investment gains or losses are not included in taxable income until they are realized.

Table of Contents

7. Net Realized Gains or Losses from Investments and Net Change in Unrealized Appreciation or Depreciation from Investments

Realized gains or losses are measured by the difference between the net proceeds from the sale or redemption of an investment and the cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized, and includes investments written-off during the period net of recoveries and realized gains or losses from in-kind redemptions. Net change in unrealized appreciation or depreciation from investments reflects the net change in the valuation of the investment portfolio and financial instruments and the reclassification of any prior period unrealized appreciation or depreciation on exited investments.

8. Concentration of Credit Risks

Main Street places its cash in financial institutions, and, at times, such balances may be in excess of the federally insured limit.

9. Fair Value of Financial Instruments

Fair value estimates are made at discrete points in time based on relevant information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Main Street believes that the carrying amounts of its financial instruments, consisting of cash and cash equivalents, marketable securities, receivables, accounts payable and accrued liabilities approximate the fair values of such items. Marketable securities and idle funds investments may include investments in certificates of deposit, U.S. government agency securities, ~~intermediate-term secured debt,~~ independently rated debt investments, and diversified bond funds. The fair value determination for these investments under the provisions of ASC 820 ~~primarily~~generally consists of Level 2 observable inputs.

The SBIC debentures ~~remain~~provide a strategic advantage due to their flexible structure, long-term duration, and low fixed interest rates. As part of the Exchange Offer, ~~Transactions,~~ Main Street elected the fair value option under ASC 825, Financial Instruments (“ASC 825”) relating to accounting for debt obligations at their fair value, for those SBIC debentures acquired (the “Acquired

~~Table of Contents~~

Debentures”) as part of the acquisition accounting related to the Exchange Offer. In order to provide for a more consistent basis of presentation, Main Street has elected and will continue to elect the fair value option for SBIC debentures issued by MSC II subsequent to the Exchange Offer. Once the fair value option is elected for a given SBIC debenture, the deferred loan costs associated with the debenture are fully expensed in the current period to “Net Change in Unrealized Appreciation (Depreciation) — SBIC debentures” as part of the fair value adjustment. Interest incurred in connection with SBIC debentures which are valued at fair value is expensed.

10. Earnings per Share

Basic and diluted per share calculations are computed utilizing the weighted average number of shares of common stock outstanding for the period. Main Street adopted the amended guidance in ASC 260, Earnings Per Share, and based on the guidance, determined that unvested shares of restricted stock are participating securities and should therefore be included in the basic earnings per share calculation. As a result, for all periods presented, there is no difference between diluted earnings per share and basic earnings per share amounts.

As a result of the Exchange Offer ~~Transactions,~~which left a minority portion of MSC II’s equity interests owned by certain non-Main Street entities, the net earnings attributable to the remaining externally owned noncontrolling interest in MSC II isare excluded from all per share amounts presented, and the per share amounts only reflect the net earnings attributable to Main Street’s ownership interest in MSC II. ~~The~~During the first quarter of 2012, MSCC completed the Final MSC II Exchange to acquire all of the minority portion of MSC II’s equity interests not already owned by MSCC. For the three months ended March 31, 2012 and 2011, the following table provides a reconciliation of Net Investment Income and Net Realized Income excluding amounts related to the ~~remaining~~ noncontrolling interest in MSC II that remained owned by non-Main Street entities for ~~the three and nine months ended September 30, 2011 and 2010.~~each period.

Three Months Ended September 30,

Nine Months Ended September 30,

2011

2010

2011

2010

Net Investment Income

$
10,361,362

$
4,757,564

$
27,347,476

$
12,719,905

Noncontrolling interest share of Net Investment Income

(179,430
)
(87,320
)
(560,179
)
(221,257
)
Net Investment Income attributable to common stock

10,181,932

4,670,244

26,787,297

12,498,648

Total net realized gain (loss) from investments

1,447,750

(1,532,356
)
1,718,864

(2,937,581
)
Noncontrolling interest share of net realized (gain) loss from investments

(46,833
)
21,103

(48,057
)
75,152

Net Realized Income attributable to common stock

$
11,582,849

$
3,158,991

$
28,458,104

$
9,636,219

Net Investment Income per share -

Basic and diluted

$
0.44

$
0.28

$
1.23

$
0.81

Net Realized Income per share -

Basic and diluted

$
0.50

$
0.19

$
1.30

$
0.62

Weighted average shares outstanding -

Basic and diluted

23,194,896

16,878,088

21,824,775

15,469,890

Table of Contents

	Three Months Ended March 31,
	2012			2011
	(in thousands)
Net Investment Income	$	12,849		$	7,392
Noncontrolling interest share of Net Investment Income	(62		)	(157		)
Net Investment Income attributable to common stock	12,787			7,235

Total net realized gain from investments	8,138			—
Noncontrolling interest share of net realized (gain) from investments	(3		)	—
Net Realized Income attributable to common stock	$	20,922		$	7,235

Net Investment Income per share -
Basic and diluted	$	0.48		$	0.38
Net Realized Income per share -
Basic and diluted	$	0.78		$	0.38

Weighted average shares outstanding -
Basic and diluted	26,871,084			19,217,690

11. Recently Issued Accounting Standards

In May 2011, the FASB issued Accounting Standards Update (“ASU”) 2011-04, Fair Value Measurements (Topic 820), Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs(“ (“ASU 2011-04”). ASU 2011-04 results in common fair value measurement and disclosure requirements in U.S. GAAP and IFRSs. ASU 2011-04 is effective for interim and annual reporting periods beginning after December 15, 2011. The adoption of ASU 2011-04 isdid not ~~expected to~~ have a significant impact on Main Street’s financial condition and results of operations.

In February 2011, the FASB issued ASU 2011-02, Receivables (Topic 310):A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring (“ASU 2011-02”). ASU 2011-02 clarifies which loan modifications constitute troubled debt restructurings. It is intended to assist creditors in determining whether a modification of the terms of a receivable meets the criteria to be considered a troubled debt restructuring, both for purposes of recording an impairment loss and for disclosure of troubled debt restructurings. In evaluating whether a restructuring constitutes a troubled debt restructuring, a creditor must separately conclude that both of the following exist: (a) the restructuring constitutes a concession; and (b) the debtor is experiencing financial difficulties. ASU 2011-02 provides guidance to clarify whether the creditor has granted a concession and whether a debtor is experiencing financial difficulties. The new guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructurings occurring on or after the beginning of the fiscal year of adoption. The adoption of ASU 2011-02 did not have a significant impact on Main Street’s financial condition and results of operations.

~~Table of Contents~~

~~In January 2010, the FASB issued ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820),~~ ~~Improving Disclosures About Fair Value Measurements~~ (“ASU 2010-06”). ASU 2010-06 adds new requirements for disclosures about transfers into and out of Level 1 and 2 and separate disclosures about purchases, sales, issuances and settlements relating to Level 3 measurements. It also clarifies existing fair value disclosures about the level of disaggregation, inputs and valuation techniques. ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010. The adoption of ASU 2010-06 did not have a significant impact on Main Street’s financial condition and results of operations.

NOTE C — FAIR VALUE HIERARCHY FOR INVESTMENTS AND DEBENTURES

ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and enhances disclosure requirements for fair value measurements. Main Street accounts for its investments at fair value.

Fair Value Hierarchy

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

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

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

Table of Contents

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

· Quoted prices for similar assets in active markets (for example, investments in restricted stock);

· Quoted prices for identical or similar assets in non-active markets (for example, investments in thinly traded public companies);

· Pricing models whose inputs are observable for substantially the full term of the investment (for example, market interest rate indices); and

· Pricing models whose inputs are derived principally from, or corroborated by, observable market data through correlation or other means for substantially the full term of the investment.

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

As required by ASC 820, when the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, gains and losses for such investments categorized within the Level 3 table below may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3). Main Street conducts reviews of fair value hierarchy classifications on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain investments.

As of ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010, all of~~2011, Main Street’s ~~private placement~~Middle Market portfolio investments and marketable securities and idle funds investments consisted primarily of investments in secured and unsecured debt investments and independently rated debt investments. The fair value determination for these investments primarily consisted of observable inputs in

~~Table of Contents~~

non-active markets. As a result, ~~all~~most of Main Street’s ~~private placement~~Middle Market portfolio investments and marketable securities and idle funds investments were categorized as Level 2 as of ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010.~~2011.

As of ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010,~~2011, all of Main Street’s LMM portfolio and Other Portfolio investments consisted of illiquid securities issued by private companies. The fair value determination for these investments primarily consisted of unobservable inputs. As a result, all of Main Street’s LMM portfolio and Other Portfolio investments were categorized as Level 3.

The fair value determination of each LMM portfolio and Other Portfolio investment required one or more of the following unobservable inputs:

· Financial information obtained from each portfolio company, including unaudited statements of operations and balance sheets for the most recent period available as compared to budgeted numbers;

· Current and projected financial condition of the portfolio company;

· Current and projected ability of the portfolio company to service its debt obligations;

· Type and amount of collateral, if any, underlying the investment;

· Current financial ratios (e.g., fixed charge coverage ratio, interest coverage ratio, and net debt/EBITDA ratio) applicable to the investment;

· Current liquidity of the investment and related financial ratios (e.g., current ratio and quick ratio);

· Pending debt or capital restructuring of the portfolio company;

Table of Contents

· Projected operating results of the portfolio company;

· Current information regarding any offers to purchase the investment;

· Current ability of the portfolio company to raise any additional financing as needed;

· Changes in the economic environment which may have a material impact on the operating results of the portfolio company;

· Internal occurrences that may have an impact (both positive and negative) on the operating performance of the portfolio company;

· Qualitative assessment of key management;

· Contractual rights, obligations or restrictions associated with the investment; and

· Other factors deemed relevant.

The significant unobservable inputs used in the fair value measurement of Main Street’s LMM equity securities are (i) EBITDA multiples and (ii) the weighted average cost of capital (“WACC”). Significant increases (decreases) in EBITDA multiple inputs in isolation would result in a significantly higher (lower) fair value measurement. On the contrary, significant increases (decreases) in WACC inputs in isolation would result in a significantly lower (higher) fair value measurement. The significant unobservable inputs used in the fair value measurement of Main Street’s LMM debt securities and Other Portfolio debt securities are (i) risk adjusted discount factors used in the yield valuation technique described above and (ii) loss severity adjustments used to estimate the percentage of expected principal recovery. Significant increases (decreases) in any of these yield valuation inputs in isolation would result in a significantly lower (higher) fair value measurement. However, due to the nature of certain investments, fair value measurements may be based on other criteria, such as third-party appraisals of collateral, and not presented in the table below.

The following table provides a summary of the significant unobservable inputs used to fair value Main Street’s Level 3 portfolio investments as of March 31, 2012:

Type of Investment	Fair Value at March 31, 2012 (in thousands)		Valuation Technique	Significant Unobservable Inputs	Range			Weighted Average

Equity investments	$	148,768	Discounted cash flow	Weighted average cost of capital	12.0%	–	20.0%	15.2	%
			Market comparable / Enterprise Value	EBITDA multiple	4.5x	–	6.5x (1)	5.7	x

Debt investments	$	267,923	Discounted cash flow	Expected principal recovery	0.0 %	–	100.0%	98.1	%
				Risk adjusted discount factor	7.1 %	–	19.8% (1)	13.9	%

(1) Range excludes outliers that are greater than one standard deviation from the mean.

The following table provides a summary of changes in fair value of Main Street’s Level 3 portfolio investments for the three months ended March 31, 2012 (amounts in thousands):

												Net			Net
			Transfers Into		Accretion of		Redemptions/					Changes from			Unrealized
Type of	December 31, 2011		Level 3		Unearned		Repayments/			New		Unrealized			Appreciation			March 31, 2012
Investment	Fair Value		Hierarchy		Income		Exits (1)			Investments (1)		to Realized			(Depreciation)			Fair Value
Debt	$	260,190	$	11,450	$	2,600	$	(29,190	)	$	30,881	$	—		$	(1,944	)	$	273,987
Equity	113,920		—		—		(13,877		)	1,775		(519		)	6,953			108,252
Equity warrants	43,269		235		—		(3,816		)	—		(6,644		)	1,206			34,250
Investment Manager (2)	1,869		—		—		(1,616		)	—		—			(51		)	202
	$	419,248	$	11,685	$	2,600	$	(48,499	)	$	32,656	$	(7,163	)	$	6,164		$	416,691

(1) Includes the impact of non-cash conversions

(2) Reflects the adjustment to the investment in the Investment Manager in connection with the acquisition of the remaining externally owned MSC II equity interests.

As of ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010,~~2011, the fair value determination for the SBIC debentures recorded at fair value primarily consisted of unobservable inputs. As a result, the SBIC debentures which are recorded at fair value were categorized as Level 3. Main Street determines the fair value of these instruments primarily using a yield approach that analyzes the discounted cash flows of interest and principal for each SBIC debenture recorded at fair value based on estimated market interest rates for debt

Table of Contents

instruments of similar structure, terms, and maturity. Main Street’s estimate of the expected repayment date of principal for each SBIC debenture recorded at fair value is the legal maturity date of the instrument, as Main Street generally ~~intends~~does not intend to repay its SBIC debentures prior to maturity.

The significant unobservable inputs used in the fair value measurement of Main Street’s SBIC debentures recorded at fair value are the estimated market interest rates used to fair value each debenture using the yield valuation technique described above. Significant increases (decreases) in the yield valuation inputs in isolation would result in a significantly lower (higher) fair value measurement.

The following table provides a summary of ~~changes in~~the significant unobservable inputs used to fair value of Main Street’s Level 3 ~~portfolio investments for the nine months ended September 30, 2011:~~SBIC debentures at fair value as of March 31, 2012:

~~Table of Contents~~

Net

Accretion of

Redemptions/

Unrealized

Type of

December 31, 2010

Unearned

Repayments/

New

Appreciation

September 30, 2011

Investment

Fair Value

Income

Exits (1)

Investments (1)

(Depreciation)

Fair Value

Debt

$
183,894,069

$
1,924,094

$
(22,344,469
)
$
62,313,469

$
(4,302,586
)
$
221,484,577

Equity

61,201,721

—

1,500,647

12,359,412

23,949,769

99,011,549

Equity warrants

25,080,963

—

—

4,631,427

10,103,096

39,815,486

Investment Manager

2,051,655

—

—

—

(135,333
)
1,916,322

$
272,228,408

$
1,924,094

$
(20,843,822
)
$
79,304,308

$
29,614,946

$
362,227,934

~~(1)Includes the impact of non-cash conversions~~

Fair Value at
March 31, 2012
(in thousands)

Valuation Technique

Significant Unobservable Inputs

Range

Weighted
Average

SBIC Debentures

76,586

Discounted cash flow

Estimated market interest rates

9.1% - 10.0%

9.5

The following table provides a summary of changes for the Level 3 SBIC Debentures recorded at fair value for the ~~nine~~three months ended ~~September 30, 2011:~~March 31, 2012 (amounts in thousands):

							Net										Net
							Unrealized										Unrealized
Type of	December 31, 2010				New SBIC		(Appreciation)		September 30, 2011		December 31, 2011				New SBIC		(Appreciation)			March 31, 2012
Instrument	Fair Value		Repayments		Debentures		Depreciation		Fair Value		Fair Value		Repayments		Debentures		Depreciation			Fair Value
SBIC Debentures at fair value	$	70,557,975	$	—	$	—	$	5,714,950	$	76,272,925	$	76,887	$	—	$	—	$	(301	)	$	76,586

At ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010,~~2011, Main Street’s investments and SBIC Debentures at fair value were categorized as follows in the fair value hierarchy for ASC 820 purposes:

Fair Value Measurements

Quoted Prices in
Active Markets for
Identical Assets

Significant Other
Observable Inputs

Significant
Unobservable
Inputs

At September 30, 2011

Fair Value

(Level 1)

(Level 2)

(Level 3)

LMM portfolio investments

$
371,671,628

$
—

$
11,360,016

$
360,311,612

Private placement portfolio investments

123,401,793

—

123,401,793

—

Investment in affiliated Investment Manager

1,916,322

—

—

1,916,322

Total portfolio investments

496,989,743

—

134,761,809

362,227,934

Marketable securities and idle funds investments

134,727,694

—

134,727,694

—

Total investments

$
631,717,437

$
—

$
269,489,503

$
362,227,934

SBIC Debentures at fair value

$
76,272,925

$
—

$
—

$
76,272,925

			Fair Value Measurements								Fair Value Measurements
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs				(in thousands)
At December 31, 2010	Fair Value		(Level 1)		(Level 2)		(Level 3)
											Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
At March 31, 2012									Fair Value		(Level 1)		(Level 2)		(Level 3)

LMM portfolio investments	$	279,619,629	$	—	$	9,442,876	$	270,176,753	$	388,070	$	—	$	—	$	388,070
Private placement portfolio investments	67,139,790		—		67,139,790		—
Middle Market portfolio investments									250,972		—		246,121		4,851
Other Portfolio investments									25,055				1,487		23,568
Investment in affiliated Investment Manager	2,051,655		—		—		2,051,655		202		—		—		202

Total portfolio investments	348,811,074		—		76,582,666		272,228,408		664,299		—		247,608		416,691

Marketable securities and idle funds investments	68,752,858		—		68,752,858		—		14,345		—		14,345		—

Total investments	$	417,563,932	$	—	$	145,335,524	$	272,228,408	$	678,644	$	—	$	261,953	$	416,691

SBIC Debentures at fair value	$	70,557,975	$	—	$	—	$	70,557,975	$	76,586	$	—	$	—	$	76,586

3539

Table of Contents

			Fair Value Measurements
			(in thousands)
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
At December 31, 2011	Fair Value		(Level 1)		(Level 2)		(Level 3)

LMM portfolio investments	$	415,664	$	—	$	11,685	$	403,979
Middle Market portfolio investments	226,451		—		226,451		—
Other Portfolio investments	14,109				709		13,400
Investment in affiliated Investment Manager	1,869		—		—		1,869

Total portfolio investments	658,093		—		238,845		419,248

Marketable securities and idle funds investments	26,242		—		26,242		—

Total investments	$	684,335	$	—	$	265,087	$	419,248

For the ~~nine~~three months ended ~~September 30, 2011,~~March 31, 2012, there ~~were no transfers within~~was one portfolio company investment transfer from the ~~three~~Level 2 to the Level 3 fair value hierarchy, ~~levels.~~totaling $12.0 million at both fair value and cost as of March 31, 2012.

Portfolio Investment Composition

Main Street’s ~~LMM~~lower middle market (“LMM”) portfolio investments principally consist of secured debt, equity warrants and direct equity investments in privately held, LMM ~~companies.~~companies based in the United States. Main Street’s LMM portfolio companies generally have annual revenues between $10 million and $150 million and our LMM investments generally range in size from $5 million to $25 million. The LMM debt investments are typically secured by either a first or second lien on the assets of the portfolio company, primarily bear interest at fixed rates, and generally mature between five and seven years from the original investment date. In most LMM portfolio companies, Main Street ~~also~~usually receives nominally priced equity warrants and/or makes direct equity investments ~~usually~~ in connection with a debt investment.

Main Street’s ~~private placement~~middle market (“Middle Market”) portfolio investments primarily consist of direct or secondary purchases of interest-bearing debt securities in companies based in the United States that are generally larger in size than the LMM companies included in Main Street’s LMM portfolio. Main Street’s ~~privately placed~~Middle Market portfolio companies generally have annual revenues between $150 million and $1.5 billion. Main Street’s Middle Market portfolio debt investments are generally secured by either a first or second priority lien on the assets of the company and have an expected duration of between three and ~~four~~five years.

Main Street’s other portfolio (“Other Portfolio”) investments primarily consist of investments which are not consistent with the typical profiles for LMM and Middle Market portfolio investments, including investments which may be managed by third parties.

Investment income, consisting of interest, dividends and fees, can fluctuate dramatically due to various factors, including the level of new investment activity, ~~repayment~~repayments of a debt ~~investment~~investments or ~~sale~~sales of an equity ~~interest.~~interests. Investment income in any given year could be highly concentrated among several portfolio companies. For the ~~nine~~three months ended ~~September 30, 2011,~~March 31, 2012, Main Street ~~did not record~~recorded investment income from ~~any single~~one LMM portfolio company in excess of 10% of total LMM investment income. Investment income ~~and~~from that LMM portfolio company represented approximately 10.4% of the total LMM investment income for the period. For the three months ended March 31, 2012, Main Street did not record investment income from any single ~~private placement~~Middle Market portfolio company in excess of 10% of total ~~private placement~~Middle Market investment income. For the ~~nine~~three months ended ~~September 30, 2010,~~March 31, 2011, Main Street did not record investment income from any single portfolio company in excess of 10% of total investment income.

As of ~~September 30, 2011,~~March 31, 2012, Main Street had debt and equity investments in 5153 LMM portfolio companies with an aggregate fair value of ~~$371.7~~$388.1 million, with a total cost basis of approximately ~~$315.3~~$322.3 million, and a weighted average annual effective yield on its LMM debt investments of approximately ~~14.8%~~14.9%. Approximately ~~76%~~77% of Main Street’s total LMM portfolio investments at cost were in the form of debt investments and ~~93%~~98% of such debt investments at cost were secured by first priority liens on the assets of Main Street’s LMM portfolio companies as of ~~September 30, 2011.~~March 31, 2012. At ~~September 30, 2011,~~March 31, 2012, Main Street had equity ownership in approximately ~~94%~~92% of its LMM portfolio companies and the average fully diluted equity ownership in those portfolio companies was approximately ~~34%~~33%. As of December 31, ~~2010,~~2011, Main Street had debt and equity investments in 4454 LMM portfolio companies with an aggregate fair value of ~~$279.6~~$415.7 million, with a total cost basis of approximately ~~$253.0~~$349.0 million, and a weighted average annual effective yield on its LMM debt investments of approximately ~~14.5%~~14.8%. The weighted average annual yields were computed using the effective interest rates for all debt investments ~~at September 30, 2011~~as of March 31, 2012 and December 31, ~~2010,~~2011, including amortization of deferred debt origination fees

Table of Contents

and accretion of original issue discount but excluding liquidation fees payable upon repayment and any debt investments on non-accrual status.

As of ~~September 30, 2011,~~March 31, 2012, Main Street had ~~privately placed~~Middle Market portfolio investments in 2362 companies collectively totaling approximately ~~$123.4~~$251.0 million in fair value with a total cost basis of approximately ~~$124.8~~$249.8 million. The weighted average revenues for the ~~23 privately placed~~62 Middle Market portfolio company investments were approximately ~~$359~~$476 million. Main Street’s ~~privately placed~~Middle Market portfolio investments are primarily in the form of debt investments and ~~64%~~86% of such debt investments at cost were secured by first priority liens on portfolio company assets as of ~~September 30, 2011.~~March 31, 2012. The weighted average annual effective yield on Main Street’s ~~privately placed~~Middle Market portfolio debt investments was approximately ~~10.6%~~9.2% as of ~~September 30, 2011.~~March 31, 2012. As of December 31, ~~2010,~~2011, Main Street had ~~privately placed~~Middle Market portfolio investments in 1657 companies collectively totaling approximately ~~$67.1~~$226.5 million in fair value with a total cost basis of approximately ~~$65.6~~$228.9 million. The weighted average revenues for the ~~16 privately placed~~57 Middle Market portfolio company investments were approximately ~~$352~~$473 million. The weighted average annual effective yield on Main Street’s ~~privately placed~~Middle Market portfolio debt investments was approximately ~~12.5%~~9.5% as of December 31, ~~2010.~~2011. The weighted average annual yields were computed using the effective interest rates for all debt investments ~~at September 30, 2011~~as of March 31, 2012 and December 31, ~~2010,~~2011, including amortization of deferred debt origination fees and accretion of original issue discount but excluding liquidation fees payable upon repayment.

As of March 31, 2012, Main Street had Other Portfolio investments in 4 companies collectively totaling approximately $25.1 million in both fair value and cost basis. As of December 31, 2011, Main Street had Other Portfolio investments in 3 companies collectively totaling approximately $14.1 million in both fair value and cost basis.

Summaries of the composition of Main Street’s LMM investment portfolio, ~~private placement~~Middle Market investment portfolio, and total combined LMM and Middle Market investment portfolio at cost and fair value by type of investment as a percentage of the total LMM investment portfolio, the total ~~private placement~~Middle Market investment portfolio, and the total combined LMM and Middle Market investment portfolio are shown in the following ~~table:~~table (this information excludes the Other Portfolio investments):

~~Table of Contents~~

September 30, 2011

December 31, 2010

Cost:

LMM

Private
Placement

Total

LMM

Private
Placement

Total

First lien debt

70.3
%
64.0
%
68.5
%
70.6
%
71.3
%
70.8
%
Second lien debt

5.5
%
36.0
%
14.1
%
6.7
%
28.7
%
11.2
%
Equity

19.1
%
0.0
%
13.7
%
17.7
%
0.0
%
14.1
%
Equity warrants

5.1
%
0.0
%
3.7
%
5.0
%
0.0
%
3.9
%

100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%

													March 31, 2012						December 31, 2011
Cost:													LMM		Middle Market		Total		LMM		Middle Market		Total
First lien debt													76.0	%	85.3	%	80.1	%	69.5	%	81.8	%	74.4	%
Equity													18.2	%	0.3	%	10.4	%	20.5	%	0.2	%	12.5	%
Second lien debt													1.2	%	14.4	%	7.0	%	5.0	%	18.0	%	10.1	%
Equity warrants													4.6	%	0.0	%	2.5	%	5.0	%	0.0	%	3.0	%
													100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

	September 30, 2011						December 31, 2010						March 31, 2012						December 31, 2011
Fair Value:	LMM		Private Placement		Total		LMM		Private Placement		Total		LMM		Middle Market		Total		LMM		Middle Market		Total
First lien debt	57.4	%	64.2	%	59.1	%	62.6	%	71.8	%	64.4	%	62.2	%	85.4	%	71.4	%	57.7	%	81.7	%	66.2	%
Equity													29.3	%	0.2	%	17.9	%	29.0	%	0.3	%	18.8	%
Second lien debt	4.9	%	35.8	%	12.6	%	6.5	%	28.2	%	10.6	%	1.0	%	14.4	%	6.2	%	4.4	%	18.0	%	9.2	%
Equity	28.6	%	0.0	%	21.5	%	21.9	%	0.0	%	17.7	%
Equity warrants	9.1	%	0.0	%	6.8	%	9.0	%	0.0	%	7.3	%	7.5	%	0.0	%	4.5	%	8.9	%	0.0	%	5.8	%
	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

The following table shows the LMM investment portfolio, ~~private placement~~Middle Market investment portfolio, and total combined LMM and Middle Market investment portfolio composition by geographic region of the United States at cost and fair value as a percentage of the total LMM investment portfolio, the total ~~private placement~~Middle Market investment portfolio, and the total combined LMM and Middle Market investment ~~portfolio.~~portfolio (this information excludes the Other Portfolio investments). The geographic composition is determined by the location of the corporate headquarters of the portfolio company.

September 30, 2011

December 31, 2010

Cost:

LMM

Private
Placement

Total

LMM

Private
Placement

Total

Southwest

48.9
%
28.8
%
43.2
%
50.5
%
12.5
%
42.7
%
West

33.0
%
19.9
%
29.3
%
29.3
%
13.4
%
26.1
%
Northeast

4.6
%
26.4
%
10.8
%
6.0
%
40.0
%
13.0
%
Midwest

5.4
%
17.8
%
8.9
%
7.2
%
29.6
%
11.8
%
Southeast

8.1
%
7.1
%
7.8
%
7.0
%
4.5
%
6.4
%

100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%

Table of Contents

													March 31, 2012						December 31, 2011
Cost:													LMM		Middle Market		Total		LMM		Middle Market		Total
Southwest													43.4	%	15.4	%	31.1	%	47.8	%	16.4	%	35.4	%
West													35.2	%	9.5	%	24.0	%	31.9	%	13.7	%	24.7	%
Northeast													3.2	%	40.0	%	19.3	%	3.9	%	32.6	%	15.2	%
Midwest													9.9	%	23.8	%	16.0	%	9.0	%	21.6	%	14.0	%
Southeast													8.3	%	11.3	%	9.6	%	7.4	%	15.7	%	10.7	%
													100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

	September 30, 2011						December 31, 2010						March 31, 2012						December 31, 2011
Fair Value:	LMM		Private Placement		Total		LMM		Private Placement		Total		LMM		Middle Market		Total		LMM		Middle Market		Total
Southwest	53.8	%	28.6	%	47.4	%	51.8	%	12.7	%	44.2	%	47.1	%	15.2	%	34.6	%	52.1	%	16.2	%	39.3	%
West	28.9	%	19.8	%	26.6	%	28.4	%	13.4	%	25.5	%	32.6	%	9.5	%	23.5	%	28.9	%	13.8	%	23.6	%
Northeast	4.4	%	26.7	%	10.1	%	6.2	%	40.1	%	12.8	%	3.5	%	39.9	%	17.8	%	3.9	%	32.4	%	14.0	%
Midwest	5.7	%	17.7	%	8.7	%	7.2	%	29.3	%	11.5	%	9.7	%	24.1	%	15.3	%	8.7	%	21.9	%	13.4	%
Southeast	7.2	%	7.2	%	7.2	%	6.4	%	4.5	%	6.0	%	7.1	%	11.3	%	8.8	%	6.4	%	15.7	%	9.7	%
	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

Main Street’s LMM and ~~private placement~~Middle Market portfolio investments are in companies conducting business in a variety of industries. Set forth below are tables showing the composition of Main Street’s LMM portfolio investments, ~~private placement~~Middle Market portfolio investments, and total combined LMM and Middle Market portfolio investments by industry at cost and fair value as of ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010:~~2011 (this information excludes the Other Portfolio investments):

3742

Table of Contents

September 30, 2011

December 31, 2010

Cost:

LMM

Private
Placement

Total

LMM

Private
Placement

Total

Commercial Services & Supplies

17.3
%
0.0
%
12.4
%
15.0
%
0.0
%
11.9
%
Energy Equipment & Services

8.8
%
10.5
%
9.3
%
6.3
%
6.5
%
6.4
%
Media

9.6
%
7.4
%
9.0
%
8.5
%
18.6
%
10.6
%
Construction & Engineering

5.9
%
7.8
%
6.4
%
7.2
%
0.0
%
5.8
%
Health Care Providers & Services

7.6
%
2.8
%
6.2
%
5.3
%
2.3
%
4.6
%
Machinery

6.5
%
3.9
%
5.7
%
11.0
%
0.0
%
8.7
%
Software

2.9
%
7.6
%
4.3
%
3.8
%
0.0
%
3.1
%
Specialty Retail

5.7
%
0.0
%
4.1
%
6.8
%
0.0
%
5.4
%
Hotels, Restaurants & Leisure

2.6
%
7.7
%
4.1
%
3.3
%
0.0
%
2.6
%
Insurance

3.7
%
4.7
%
3.9
%
0.0
%
0.0
%
0.0
%
Electronic Equipment, Instruments & Components

5.1
%
0.0
%
3.6
%
5.2
%
0.0
%
4.2
%
Paper & Forest Products

2.5
%
5.1
%
3.2
%
3.0
%
9.7
%
4.4
%
Food & Staples Retailing

0.0
%
11.4
%
3.2
%
0.0
%
29.8
%
6.1
%
Internet Software & Services

3.3
%
0.0
%
2.4
%
3.6
%
0.0
%
2.9
%
Diversified Consumer Services

3.1
%
0.0
%
2.3
%
5.2
%
0.0
%
4.1
%
Building Products

2.9
%
0.0
%
2.1
%
3.2
%
0.0
%
2.5
%
Health Care Equipment & Supplies

2.5
%
0.0
%
1.8
%
1.2
%
0.0
%
0.9
%
Diversified Telecommunication Services

0.3
%
5.3
%
1.7
%
0.4
%
10.5
%
2.5
%
Trading Companies & Distributors

2.2
%
0.0
%
1.6
%
3.3
%
0.0
%
2.6
%
Transportation Infrastructure

2.2
%
0.0
%
1.6
%
2.8
%
0.0
%
2.3
%
Chemicals

0.0
%
5.5
%
1.6
%
0.0
%
3.5
%
0.7
%
Leisure Equipment & Products

2.1
%
0.0
%
1.5
%
2.6
%
0.0
%
2.1
%
Real Estate Management & Development

0.0
%
4.7
%
1.3
%
0.0
%
0.0
%
0.0
%
IT Services

0.0
%
4.6
%
1.3
%
0.0
%
0.0
%
0.0
%
Internet & Catalog Retail

0.0
%
4.1
%
1.2
%
0.0
%
0.0
%
0.0
%
Food Products

0.0
%
3.3
%
0.9
%
0.0
%
6.1
%
1.3
%
Oil, Gas & Consumable Fuels

0.0
%
0.0
%
0.0
%
0.0
%
5.8
%
1.2
%
Metals & Mining

0.0
%
0.0
%
0.0
%
0.0
%
4.4
%
0.9
%
Thrifts & Mortgage Finance

0.0
%
0.0
%
0.0
%
0.0
%
2.6
%
0.5
%
Other (1)

3.2
%
3.6
%
3.3
%
2.3
%
0.2
%
1.7
%

100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%

	March 31, 2012						December 31, 2011
Cost:	LMM		Middle Market		Total		LMM		Middle Market		Total
Energy Equipment and Services	10.5	%	8.2	%	9.4	%	9.2	%	7.5	%	8.5	%
Health Care Providers and Services	7.0	%	11.8	%	9.1	%	6.5	%	9.1	%	7.5	%
Media	9.4	%	6.0	%	7.9	%	8.7	%	6.6	%	7.9	%
Machinery	10.6	%	3.1	%	7.3	%	9.9	%	2.1	%	6.9	%
Commercial Services and Supplies	11.7	%	0.0	%	6.6	%	15.4	%	0.9	%	9.7	%
Software	3.0	%	10.3	%	6.2	%	2.8	%	8.4	%	5.0	%
Specialty Retail	5.9	%	5.1	%	5.5	%	5.3	%	5.6	%	5.4	%
Construction and Engineering	5.8	%	3.5	%	5.0	%	5.3	%	0.0	%	5.0	%
Diversified Consumer Services	4.8	%	0.0	%	2.7	%	2.7	%	0.0	%	1.6	%
Hotels, Restaurants and Leisure	2.2	%	2.8	%	2.5	%	2.1	%	7.2	%	4.1	%
Food and Staples Retailing	0.0	%	5.7	%	2.5	%	0.0	%	6.2	%	2.5	%
Chemicals	0.0	%	5.4	%	2.4	%	0.0	%	3.8	%	1.5	%
Electronic Equipment, Instruments and Components	4.1	%	0.0	%	2.3	%	4.6	%	0.0	%	2.8	%
Construction Materials	1.3	%	4.1	%	2.3	%	1.1	%	4.4	%	0.7	%
Professional Services	3.8	%	0.0	%	2.2	%	3.5	%	0.0	%	2.1	%
Consumer Finance	3.2	%	0.8	%	2.2	%	3.0	%	0.9	%	2.1	%
Insurance	3.3	%	0.0	%	1.9	%	3.1	%	2.6	%	2.9	%
IT Services	0.0	%	4.4	%	1.9	%	0.0	%	4.1	%	1.6	%
Building Products	2.9	%	0.0	%	1.6	%	2.6	%	0.0	%	1.6	%
Food Products	0.0	%	3.6	%	1.6	%	0.0	%	3.9	%	1.6	%
Internet Software and Services	0.4	%	3.0	%	1.5	%	3.0	%	0.0	%	1.8	%
Metals and Mining	0.0	%	3.5	%	1.5	%	0.0	%	0.0	%	0.0	%
Paper and Forest Products	2.6	%	0.0	%	1.4	%	2.2	%	0.0	%	1.3	%
Health Care Equipment and Supplies	2.4	%	0.0	%	1.4	%	2.2	%	1.2	%	1.8	%
Transportation Infrastructure	2.2	%	0.0	%	1.3	%	2.0	%	0.0	%	1.2	%
Pharmaceuticals	0.0	%	2.4	%	1.0	%	0.0	%	2.6	%	1.0	%
Real Estate Management and Development	0.0	%	2.3	%	1.0	%	0.0	%	2.5	%	1.0	%
Internet and Catalog Retail	0.0	%	2.1	%	0.9	%	0.0	%	2.2	%	0.9	%
Biotechnology	0.0	%	2.0	%	0.9	%	0.0	%	2.2	%	0.8	%
Auto Components	0.0	%	1.5	%	0.7	%	0.0	%	2.9	%	1.2	%
Electric Utilities	0.0	%	0.9	%	0.4	%	0.0	%	2.0	%	0.8	%
Thrifts and Mortgage Finance	0.0	%	0.0	%	0.0	%	0.0	%	2.0	%	0.8	%
Other (1)	2.9	%	7.5	%	4.9	%	4.8	%	9.1	%	6.4	%
	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

(1) ~~Various~~Includes various industries with each industry individually less than 2.0% of the total LMM portfolio, ~~totals~~total Middle Market portfolio and combined total LMM and Middle Market portfolio in each period.

3843

Table of Contents

September 30, 2011

December 31, 2010

Fair Value:

LMM

Private
Placement

Total

LMM

Private
Placement

Total

Commercial Services & Supplies

15.2
%
0.0
%
11.4
%
13.7
%
0.0
%
11.1
%
Energy Equipment & Services

10.8
%
10.7
%
10.8
%
7.2
%
6.7
%
7.1
%
Media

8.2
%
7.5
%
8.0
%
7.6
%
18.4
%
9.7
%
Health Care Providers & Services

8.7
%
3.0
%
7.2
%
7.1
%
2.5
%
6.2
%
Construction & Engineering

6.5
%
7.9
%
6.9
%
8.2
%
0.0
%
6.6
%
Machinery

7.6
%
4.1
%
6.7
%
10.8
%
0.0
%
8.7
%
Internet Software & Services

6.2
%
0.0
%
4.6
%
4.8
%
0.0
%
3.9
%
Hotels, Restaurants & Leisure

3.1
%
7.7
%
4.3
%
3.7
%
0.0
%
3.0
%
Software

3.0
%
7.5
%
4.1
%
3.5
%
0.0
%
2.8
%
Insurance

3.1
%
4.7
%
3.5
%
0.0
%
0.0
%
0.0
%
Specialty Retail

4.5
%
0.0
%
3.4
%
6.0
%
0.0
%
4.8
%
Diversified Consumer Services

4.1
%
0.0
%
3.0
%
5.5
%
0.0
%
4.4
%
Electronic Equipment, Instruments & Components

4.0
%
0.0
%
3.0
%
5.0
%
0.0
%
4.1
%
Paper & Forest Products

2.4
%
4.8
%
3.0
%
3.0
%
9.4
%
4.2
%
Food & Staples Retailing

0.0
%
11.3
%
2.8
%
0.0
%
30.0
%
5.8
%
Trading Companies & Distributors

3.1
%
0.0
%
2.3
%
3.3
%
0.0
%
2.7
%
Health Care Equipment & Supplies

2.1
%
0.0
%
1.6
%
1.1
%
0.0
%
0.9
%
Transportation Infrastructure

2.1
%
0.0
%
1.6
%
3.0
%
0.0
%
2.4
%
Diversified Telecommunication Services

0.2
%
5.4
%
1.5
%
0.2
%
10.3
%
2.2
%
Chemicals

0.0
%
5.4
%
1.4
%
0.0
%
3.4
%
0.7
%
Building Products

1.7
%
0.0
%
1.3
%
2.1
%
0.0
%
1.7
%
Real Estate Management & Development

0.0
%
4.7
%
1.2
%
0.0
%
0.0
%
0.0
%
IT Services

0.0
%
4.4
%
1.1
%
0.0
%
0.0
%
0.0
%
Internet & Catalog Retail

0.0
%
4.0
%
1.0
%
0.0
%
0.0
%
0.0
%
Food Products

0.0
%
3.3
%
0.8
%
0.0
%
6.2
%
1.2
%
Leisure Equipment & Products

0.6
%
0.0
%
0.4
%
2.3
%
0.0
%
1.8
%
Oil, Gas & Consumable Fuels

0.0
%
0.0
%
0.0
%
0.0
%
5.8
%
1.1
%
Metals & Mining

0.0
%
0.0
%
0.0
%
0.0
%
4.5
%
0.9
%
Thrifts & Mortgage Finance

0.0
%
0.0
%
0.0
%
0.0
%
2.6
%
0.5
%
Other (1)

2.8
%
3.6
%
3.1
%
1.9
%
0.2
%
1.5
%

100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%

	March 31, 2012						December 31, 2011
Fair Value:	LMM		Middle Market		Total		LMM		Middle Market		Total
Energy Equipment and Services	12.9	%	8.4	%	11.2	%	11.2	%	7.5	%	9.8	%
Health Care Providers and Services	8.0	%	11.7	%	9.5	%	7.4	%	9.0	%	7.9	%
Machinery	12.0	%	3.2	%	8.6	%	10.7	%	2.2	%	7.7	%
Media	7.9	%	6.0	%	7.2	%	7.4	%	6.5	%	7.1	%
Commercial Services and Supplies	10.3	%	0.0	%	6.3	%	13.5	%	0.9	%	9.0	%
Software	3.0	%	10.5	%	5.9	%	2.8	%	8.4	%	4.8	%
Construction and Engineering	6.7	%	3.5	%	5.7	%	6.0	%	0.0	%	5.5	%
Specialty Retail	4.1	%	4.7	%	4.3	%	3.8	%	5.2	%	4.3	%
Diversified Consumer Services	5.7	%	0.0	%	3.5	%	3.7	%	0.0	%	2.4	%
Hotels, Restaurants and Leisure	2.6	%	2.8	%	2.7	%	2.5	%	7.2	%	4.2	%
Food and Staples Retailing	0.0	%	5.6	%	2.2	%	0.0	%	6.3	%	2.2	%
Chemicals	0.0	%	5.5	%	2.1	%	0.0	%	3.8	%	1.3	%
Electronic Equipment, Instruments and Components	3.3	%	0.0	%	2.0	%	3.7	%	0.0	%	2.4	%
Internet Software and Services	1.3	%	3.0	%	2.0	%	5.8	%	0.0	%	3.7	%
Construction Materials	1.0	%	4.1	%	2.0	%	0.8	%	4.5	%	0.5	%
Consumer Finance	2.7	%	0.8	%	1.9	%	2.5	%	0.9	%	1.9	%
Trading Companies and Distributors	2.9	%	0.0	%	1.8	%	2.6	%	0.0	%	1.7	%
Insurance	2.8	%	0.0	%	1.7	%	2.6	%	2.6	%	2.6	%
IT Services	0.0	%	4.1	%	1.6	%	0.0	%	3.8	%	1.4	%
Professional Services	2.3	%	0.0	%	1.4	%	2.2	%	0.0	%	1.4	%
Paper and Forest Products	2.4	%	0.0	%	1.4	%	2.2	%	0.0	%	1.4	%
Food Products	0.0	%	3.6	%	1.4	%	0.0	%	4.0	%	1.4	%
Metals and Mining	0.0	%	3.6	%	1.4	%	0.0	%	0.0	%	0.0	%
Transportation Infrastructure	2.2	%	0.0	%	1.3	%	2.0	%	0.0	%	1.3	%
Health Care Equipment and Supplies	2.0	%	0.0	%	1.2	%	1.9	%	1.2	%	1.6	%
Pharmaceuticals	0.0	%	2.5	%	1.0	%	0.0	%	2.8	%	1.0	%
Real Estate Management and Development	0.0	%	2.3	%	0.9	%	0.0	%	2.6	%	0.9	%
Internet and Catalog Retail	0.0	%	2.1	%	0.8	%	0.0	%	2.2	%	0.8	%
Biotechnology	0.0	%	1.9	%	0.8	%	0.0	%	2.1	%	0.7	%
Auto Components	0.0	%	1.6	%	0.6	%	0.0	%	3.0	%	1.1	%
Electric Utilities	0.0	%	0.9	%	0.3	%	0.0	%	2.0	%	0.7	%
Thrifts and Mortgage Finance	0.0	%	0.0	%	0.0	%	0.0	%	2.1	%	0.7	%
Other (1)	3.9	%	7.6	%	5.3	%	4.7	%	9.2	%	6.6	%
	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

At ~~September 30,~~March 31, 2012 and December 31, 2011, Main Street had no LMM investments that were greater than 10% of its total LMM investment portfolio at fair value, ~~and~~ no ~~private placement~~Middle Market investments that were greater than 10% of its total ~~private placement~~Middle Market investment portfolio at fair ~~value. At December 31, 2010, Main Street had~~value and no portfolio investments that were greater than 10% of ~~its~~the total investment portfolio at fair value.

NOTE D — WHOLLY OWNED INVESTMENT MANAGER

As part of the Formation Transactions, the Investment Manager became a wholly owned subsidiary of MSCC. However, the Investment Manager is accounted for as a portfolio investment since the Investment Manager is not an investment company and since it conducts a significant portion of its investment management activities for parties outside of MSCC and its consolidated subsidiaries. The Investment Manager receives recurring investment management fees from MSC II pursuant to a separate investment advisory agreement. The payments due under the investment advisory agreement were fixed at $3.3 million per year, paid quarterly, until September 30, 2010. Subsequent to September 30, 2010, under the investment advisory agreement, MSC II is obligated to pay a 2% annualized management fee based upon the MSC II assets under management. Subsequent to the ~~closing of the~~ Exchange Offer, the investment in the Investment Manager was reduced to reflect the remaining pro rata portion of the MSC II equity and the related portion of the MSC

Table of Contents

II management fees that were not acquired ~~by MSCC.~~in the Exchange Offer. Upon completion of the Final MSC II Exchange in the first quarter of 2012, the investment in the Investment Manager was reduced to reflect MSCC’s acquisition of all of the MSC II equity and the related MSC II management fees. The Investment Manager also receives certain management, consulting and advisory fees for providing these services to third parties ~~and collectively with the MSC II management fees attributable to the remaining noncontrolling interest in MSC II is referred to as the~~(the “External ~~Services.”~~Services”). The portfolio investment in the Investment Manager is accounted for using fair value accounting, with the fair value determined by Main Street and approved, in good faith, by Main Street’s Board of Directors, based on the same valuation methodologies applied to determine the original valuation. The valuation for the Investment Manager is based on the total estimated present value of the net cash flows received for the External Services, over the estimated dollar averaged life of the related investment management, advisory or consulting contract,

~~Table of Contents~~

and is also based on comparable public market transactions. The net cash flows utilized in the valuation of the Investment Manager exclude any revenues and expenses from MSCC and its subsidiaries, but include the revenues attributable to External Services, and are reduced by an estimated allocation of costs related to providing such External Services. Any change in fair value of the investment in the Investment Manager is recognized on Main Street’s statement of operations as “Unrealized appreciation (depreciation) in Investment in affiliated Investment Manager,” with a corresponding increase (in the case of appreciation) or decrease (in the case of depreciation) to “Investment in affiliated Investment Manager” on Main Street’s balance sheet. As part of the Exchange Offer Transactions, the investment in the Investment Manager was reduced ~~$13.7~~by $15.3 million and such reduction was recorded against “Additional paid-in capital” as an adjustment to the original valuation recorded as part of the Formation Transactions. Main Street believes that the valuation for the Investment Manager will generally decrease over the life of the investment management, advisory and consulting contracts attributable to third parties, absent obtaining additional recurring cash flows from performing External Services for other external investment entities or other third parties.

The Investment Manager has elected, for tax purposes, to be treated as a taxable entity and is taxed at normal corporate tax rates based on its taxable income. The taxable income of the Investment Manager may differ from its book income due to temporary book and tax timing differences, as well as permanent differences. The Investment Manager provides for any current taxes payable and deferred tax items in its separate financial statements.

MSCC has a support services agreement with the Investment Manager that is structured to provide reimbursement to the Investment Manager for any personnel, administrative and other costs it incurs in conducting its operational and investment management activities in excess of the fees received for providing management advisory services. As a wholly owned subsidiary of MSCC, the Investment Manager manages the day-to-day operational and investment activities of MSCC and its subsidiaries. The Investment Manager pays personnel and other administrative expenses, except those specifically required to be borne by MSCC which principally include direct costs that are specific to MSCC’s status as a publicly traded entity. The expenses paid by the Investment Manager include the cost of salaries and related benefits, rent, equipment and other administrative costs required for day-to-day operations.

Pursuant to the support services agreement with MSCC, the Investment Manager is reimbursed by MSCC for its excess operating expenses associated with providing investment management and other services to MSCC and its subsidiaries, as well as third parties. Each quarter, as part of the support services agreement, MSCC makes payments to cover all cash operating expenses incurred by the Investment Manager, less fees that the Investment Manager receives pursuant to third party long-term investment advisory agreements and consulting agreements. Subsequent to the consolidation of MSC II in connection with the Exchange Offer, the management fees paid by MSC II to the Investment Manager are now included in “Expenses reimbursed to affiliated Investment Manager” on the statements of operations along with any additional net costs reimbursed by MSCC to the Investment Manager pursuant to the support services agreement. For the ~~nine~~three months ended ~~September 30,~~March 31, 2012 and 2011, ~~and 2010,~~ the expenses reimbursed by MSCC and management fees paid by MSC II to the Investment Manager totaled ~~$6.3~~$2.7 million and ~~$3.6~~$2.1 million, respectively.

In its separate stand-alone financial statements as summarized below, as part of the Formation Transactions the Investment Manager recognized an $18 million intangible asset related to the investment advisory agreement with MSC II consistent with Staff Accounting Bulletin No. 54, Application of “Pushdown” Basis of Accounting in Financial Statements of Subsidiaries Acquired by Purchase (“SAB 54”). Under SAB 54, push-down accounting is required in “purchase transactions that result in an entity becoming substantially wholly owned.” In this case, MSCC acquired 100% of the equity interests in the Investment Manager in the Formation Transactions. Because the $18 million value attributed to MSCC’s investment in the Investment Manager was derived from the long-term, recurring management fees under the investment advisory agreement with MSC II, the same methodology used to determine the $18 million valuation of the Investment Manager in connection with the Formation Transactions was utilized to establish the push-down accounting basis for the intangible asset. The intangible asset is being amortized over the estimated economic life of the investment advisory agreement with MSC II. For the ~~nine~~three months ended ~~September 30,~~March 31, 2012 and 2011, ~~and 2010,~~ the Investment Manager recognized ~~$0.9 million and $0.8~~$0.3 million of amortization expense in each respective period associated with the intangible asset. Amortization expense is not included in the expenses reimbursed by MSCC to the Investment Manager based upon the support services agreement since it is non-cash and non-operating in nature.

Table of Contents

Summarized financial information from the separate financial statements of the Investment Manager is as follows:

~~Table of Contents~~

	As of March 31,		As of December 31,
	2012		2011
	(in thousands)
	(Unaudited)

Cash	$	151	$	99
Accounts receivable	42		28
Accounts receivable - MSCC	1,520		4,831
Intangible asset (net of accumulated amortization of $4,704 and $4,392 as of March 31, 2012 and December 31, 2011, respectively)	13,296		13,608
Deposits and other	148		145
Total assets	$	15,157	$	18,711


Accounts payable and accrued liabilities	$	2,006	$	5,248
Equity	13,151		13,463
Total liabilities and equity	$	15,157	$	18,711

As of September 30,

As of December 31,

2011

2010

(Unaudited)

Cash

$
304,529

$
191,645

Accounts receivable

61,483

75,501

Accounts receivable - MSCC

3,105,001

15,124

Intangible asset (net of accumulated amortization of $4,087,060 and $3,209,740 as of September 30, 2011 and December 31, 2010, respectively)

13,912,940

14,790,260

Deposits and other

32,102

139,244

Total assets

$
17,416,055

$
15,211,774

Accounts payable and accrued liabilities

$
3,647,687

$
566,087

Equity

13,768,368

14,645,687

Total liabilities and equity

$
17,416,055

$
15,211,774

													Three Months Ended March 31,
	Three Months Ended September 30,						Nine Months Ended September 30,						2012			2011
	2011			2010			2011			2010			(in thousands)
	(Unaudited)						(Unaudited)						(Unaudited)

Management fee income from Main Street Capital II	$	651,763		$	831,300		$	1,804,698		$	2,493,900		$	618		$	510
Other management advisory fees	298,184			136,955			472,559			327,050			56			45
Total income	949,947			968,255			2,277,257			2,820,950			674			555

Salaries, benefits and other personnel costs	(1,954,588		)	(1,083,572		)	(5,831,719		)	(3,251,316		)	(2,291		)	(1,802		)
Occupancy expense	(84,708		)	(78,371		)	(247,905		)	(231,614		)	(82		)	(81		)
Professional expenses	(38,610		)	(2,262		)	(127,928		)	(67,642		)	(10		)	(66		)
Amortization expense - intangible asset	(298,762		)	(274,094		)	(877,320		)	(804,880		)	(312		)	(286		)
Other expenses	(174,934		)	(124,463		)	(557,074		)	(410,989		)	(329		)	(226		)
Expense reimbursement from MSCC	1,302,893			320,413			4,487,369			1,140,611			2,038			1,620
Total net expenses	(1,248,709		)	(1,242,349		)	(3,154,577		)	(3,625,830		)	(986		)	(841		)
Net income	$	(298,762	)	$	(274,094	)	$	(877,320	)	$	(804,880	)
Net Loss													$	(312	)	$	(286	)

NOTE E — SBIC DEBENTURES

SBIC debentures payable at ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010~~2011 were $220 ~~million and $180 million, respectively.~~million. SBIC debentures provide for interest to be paid semi-annually, with principal due at the applicable 10-year maturity date of each debenture. The weighted average annual interest rate as of ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010~~2011 was 5.1% ~~and 5.2%, respectively.~~at both dates. The first principal maturity due under the existing SBIC debentures is in 2013, and the remaining weighted average duration as of ~~September 30, 2011~~March 31, 2012 is approximately ~~6.9~~6.4 years. For the ~~nine~~three months ended ~~September 30, 2011,~~March 31, 2012, Main Street recognized ~~$8.1~~$2.9 million in interest expense attributable to the SBIC debentures. In accordance with SBA regulations, the Funds are precluded from incurring additional non-SBIC debt without the prior approval of the SBA. The Funds are subject to annual compliance examinations by the SBA. There have been no historical findings resulting from these examinations.

As of ~~September 30, 2011,~~March 31, 2012, the recorded value of the SBIC debentures was ~~$201.3~~$201.6 million which consisted of (i) ~~$76.3~~$76.6 million recorded at fair value, or ~~$18.7~~$18.4 million less than the $95.0 million face value of ~~these~~the SBIC debentures held in MSC II, and (ii) $125 million reported at face value and held in MSMF. As of ~~September 30, 2011,~~March 31, 2012, if Main Street had adopted the fair value option under ASC 825 for all of its SBIC debentures, Main Street estimates the fair value of its SBIC debentures would be approximately ~~$181.6~~$178.9 million, or ~~$38.4~~$41.1 million less than the $220 million face value of the SBIC debentures.

~~NOTE F — CREDIT FACILITY~~

In June 2011, Main Street closed an expansion of its credit facility (the “Credit Facility”) from $100 million to $155 million to provide additional liquidity to support future investment and operational activities. The $55 million increase in total commitments included commitment increases by all six lenders currently participating in the Credit Facility. In addition to the $55 million increase in total commitments, Main Street extended the maturity of the Credit Facility by one year to September 2014. The amended Credit

4146

Table of Contents

~~Facility also contains an~~NOTE F — CREDIT FACILITY

In December 2011, Main Street expanded its credit facility (the “Credit Facility”) from $210 million to $235 million to provide additional liquidity in support of future investment and operational activities. The $25 million increase in total commitments included the addition of one new lender relationship which further diversified the lending group to a total of eight participants. The recent increase in total commitments was executed under the accordion feature ~~that~~of the Credit Facility which allows ~~for a further~~Main Street to increase inthe total commitments under the facility up to ~~$200~~$300 million of total commitments from new or existing lenders on the same terms and conditions as the existing ~~lender~~ commitments. Borrowings under the Credit Facility bear interest, subject to Main Street’s election, on a per annum basis equal to (i) the applicable LIBOR rate plus 2.50% or (ii) the applicable base rate plus 1.50%. Main Street pays unused commitment fees of 0.375% per annum on the unused lender commitments under the Credit Facility. The Credit Facility is secured by a first lien on the assets of MSCC and its subsidiaries, excluding the assets of the Funds. The Credit Facility contains certain affirmative and negative covenants, including but not limited to: (i) maintaining an interest coverage ratio of at least 2.0 to 1.0, (ii) maintaining an asset coverage ratio of at least 2.5 to 1.0, and (iii) maintaining a minimum tangible net worth. The Credit Facility will mature in September 2014. At ~~September 30, 2011,~~March 31, 2012, Main Street had ~~$114.0~~$138.0 million in borrowings outstanding under the Credit Facility. For the ~~nine~~three months ended ~~September 30, 2011,~~March 31, 2012, Main Street recognized ~~$1.8~~$1.0 million in interest expense related to the Credit Facility, including unused commitment fees and amortization of deferred loan costs. As of ~~September 30, 2011,~~March 31, 2012, the interest rate on the Credit Facility was ~~2.72%~~2.8%, and Main Street was in compliance with all financial covenants of the Credit Facility.

NOTE G — FINANCIAL HIGHLIGHTS

	Nine Months Ended September 30,
	2011			2010			Three Months Ended March 31,
Per Share Data:							2012			2011

Net asset value at beginning of period	$	13.06		$	11.96		$	15.19		$	13.06

Net investment income (1) (3)	1.23			0.81			0.48			0.38
Net realized gain (loss) from investments (1) (2) (3)	0.07			(0.19		)	0.30			—
Net change in unrealized appreciation (1) (2) (3)	0.79			0.97			0.18			0.22
Income tax provision (1) (2) (3)	(0.15		)	(0.04		)	(0.07		)	(0.06		)
Bargain purchase gain (1)	—			0.32
Net increase in net assets resulting from operations (1)	1.94			1.87			0.89			0.54
Dividends paid to stockholders	(1.16		)	(1.13		)	(0.41		)	(0.38		)
Impact of monthly dividend declared as of September 30, 2011 and 2010 but paid on October 15, 2011 and 2010	(0.14		)	(0.13		)
Impact of the net change in monthly dividends declared prior to the end of the period							—			(0.13		)
Accretive effect of public stock offerings (issuing shares above NAV per share)	0.62			0.66			—			0.76
Accretive effect of Exchange Offer	—			0.24
Adjustment to investment in Investment Manager in connection with Exchange Offer Transactions	—			(0.73		)
Accretive effect of DRIP issuance (issuing shares above NAV per share)	0.06			0.05			0.03			0.03
Other (4)	0.11			(0.06		)	0.02			0.02
Net asset value at September 30, 2011 and 2010	$	14.49		$	12.73
Net asset value at March 31							$	15.72		$	13.90

Market value at September 30, 2011 and 2010	$	17.76		$	15.89
Shares outstanding at September 30, 2011 and 2010	23,219,348			18,666,187
Market value at March 31							$	24.63		$	18.45
Shares outstanding at March 31							27,061,484			22,947,566

(1) ~~Based on weighted average number of common shares outstanding for the period.~~ ~~(2)Net realized gains or losses, net change in unrealized appreciation or depreciation, and income taxes can fluctuate significantly from period to period.~~ ~~(3) Per share amounts are net of the earnings attributable to MSC II noncontrolling interest.~~ ~~(4)~~Includes the impact of the different share amounts as a result of calculating certain per share data based on the weighted average basic shares outstanding during the period and certain per share data based on the shares outstanding as of a period end or transaction date.	Based on weighted average number of common shares outstanding for the period.
(2)	Net realized gains or losses, net change in unrealized appreciation or depreciation, and income taxes can fluctuate significantly from period to period.
(3)	Per share amounts are net of the earnings attributable to MSC II noncontrolling interest.
(4)	Includes the impact of the different share amounts as a result of calculating certain per share data based on the weighted average basic shares outstanding during the period and certain per share data based on the shares outstanding as of a period end or transaction date.

4247

Table of Contents

Nine Months

Ended September 30,

2011

2010

Net asset value at end of period

$
336,540,116

$
237,690,626

Average net asset value

$
307,804,675

$
183,347,901

Average outstanding debt

$
273,000,000

$
147,584,249

Ratio of total expenses, including income tax expense, to average net asset value (1) (2) (3)

7.07
%
7.00
%
Ratio of operating expenses to average net asset value (1) (2)

6.03
%
6.22
%
Ratio of operating expenses, excluding interest expense, to average net asset value (1) (2)

2.96
%
2.94
%
Ratio of net investment income to average net asset value (1) (2)

8.70
%
6.94
%
Total return based on change in net asset value (1) (4)

17.26
%
18.50
%

	Three Months Ended March 31,
	2012			2011
	(in thousands, except percentages)

Net asset value at end of period	$	425,536		$	319,012
Average net asset value	$	415,623		$	282,273
Average outstanding debt	$	334,750		$	241,489
Ratio of total expenses, including income tax expense, to average net asset value (1) (2) (5)	2.31		%	2.41		%
Ratio of operating expenses to average net asset value (1) (5)	1.85		%	2.05		%
Ratio of operating expenses, excluding interest expense, to average net asset value (1) (5)	0.93		%	1.07		%
Ratio of net investment income to average net asset value (1) (5)	3.09		%	2.56		%
Portfolio turnover ratio (5)	14.73		%	4.40		%
Total investment return (4) (5)	17.86		%	3.42		%
Total return based on change in net asset value (3) (5)	5.86		%	4.20		%

(1)~~Not annualized.~~ ~~(2)Ratios are net of amounts attributable to MSC II noncontrolling interest.~~ ~~(3)~~Total expenses are the sum of operating expenses and income tax expense. Income tax expense primarily relates to the accrual of deferred taxes on the net unrealized appreciation from portfolio investments held in Taxable Subsidiaries, which is non-cash in nature and may vary significantly from period to period. Main Street is required to include deferred taxes in calculating its total expenses even though these deferred taxes are not currently payable. ~~(4)~~Total return based on change in net asset value was calculated using the sum of ending net asset value plus dividends to stockholders and other non-operating changes during the period, as divided by the beginning net asset value.	Ratios are net of amounts attributable to MSC II noncontrolling interest.
(2)	Total expenses are the sum of operating expenses and income tax expense. Income tax expense primarily relates to the accrual of deferred taxes on the net unrealized appreciation from portfolio investments held in Taxable Subsidiaries, which is non-cash in nature and may vary significantly from period to period. Main Street is required to include deferred taxes in calculating its total expenses even though these deferred taxes are not currently payable.
(3)	Total return based on change in net asset value was calculated using the sum of ending net asset value plus dividends to stockholders and other non-operating changes during the period, as divided by the beginning net asset value.
(4)	Total investment return based on purchase of stock at the current market price on the first day and a sale at the current market price on the last day of each period reported on the table and assumes reinvestment of dividends at prices obtained by the registrant’s dividend reinvestment plan during the period. The return does not reflect sales load.
(5)	Not annualized.

NOTE H — DIVIDENDS, DISTRIBUTIONS AND TAXABLE INCOME

Main Street paid monthly dividends of ~~$0.125~~$0.135 per share for each month of January ~~2011~~2012 through March ~~2011 and monthly dividends of $0.13 per share for each month of April 2011 through September 2011,~~2012, totaling ~~$25.1~~$10.9 million, or ~~$1.155~~$0.405 per share, for the ~~nine~~three month period. During ~~August 2011,~~March 2012, Main Street declared and accrued a ~~$0.135~~$0.140 per share monthly dividend that was paid in ~~October 2011.~~April 2012. For the ~~nine~~three months ended ~~September 30, 2010,~~March 31, 2011, Main Street paid total monthly dividends of approximately ~~$16.9~~$7.1 million, or ~~$1.125~~$0.375 per share, for the period.

The determination of the tax attributes for Main Street’s distributions is made annually, based upon its taxable income for the full year and distributions paid for the full year. Therefore, a determination made on an interim basis may not be representative of the actual tax attributes of distributions for a full year. Ordinary dividend distributions from a RIC do not qualify for the 15% maximum tax rate on dividend income from domestic corporations and qualified foreign corporations, except to the extent that the RIC received the income in the form of qualifying dividends from domestic corporations and qualified foreign corporations. The tax attributes for dividends will generally include both ordinary income and capital gains but may also include qualified dividends or return of capital.

MSCC has elected to be treated for federal income tax purposes as a RIC. As a RIC, MSCC generally will not pay corporate-level federal income taxes on any net ordinary income or capital gains that MSCC distributes to its stockholders as dividends. MSCC must generally distribute at least 90% of its investment company taxable income to qualify for pass-through tax treatment and maintain its RIC status. As part of maintaining RIC status, undistributed taxable income (subject to a 4% excise tax) pertaining to a given fiscal year may be distributed up to 12 months subsequent to the end of that fiscal year, provided such dividends are declared prior to the filing of the federal income tax return for the prior year.

The Taxable Subsidiaries hold certain portfolio investments for Main Street. The Taxable Subsidiaries are consolidated with Main Street for financial reporting purposes, and the portfolio investments held by the Taxable Subsidiaries are included in Main Street’s consolidated financial statements. The principal purpose of the Taxable Subsidiaries is to permit Main Street to hold equity investments in portfolio companies which are “pass through” entities for tax purposes in order to comply with the “source income” requirements contained in the RIC tax provisions of the Code. The Taxable Subsidiaries are not consolidated with Main Street for income tax purposes and may generate income tax expense or income tax benefit as a result of their ownership of various portfolio investments. This income tax expense or benefit, if any, is reflected in Main Street’s Consolidated Statement of Operations. For the ~~nine~~three months ended ~~September 30, 2011,~~March 31, 2012, Main Street recognized an income tax provision of ~~$3.3~~$1.8 million primarily consisting of deferred tax expense related to net unrealized appreciation on certain portfolio investments held by the Taxable ~~Subsidiaries.~~Subsidiaries and an accrual for excise taxes on estimated undistributed taxable income as of March 31, 2012.

Table of Contents

Listed below is a reconciliation of “Net increase in net assets resulting from operations” to taxable income and to total distributions declared to common stockholders for the ~~nine~~three months ended ~~September 30, 2011~~March 31, 2012 and ~~2010.~~2011.

~~Table of Contents~~

							Three Months Ended March 31,
	Nine Months Ended September 30,						2012			2011
	2011			2010			(amounts in thousands)
	(estimated)						(estimated)
Net increase in net assets resulting from operations	$	42,542,435		$	29,834,253		$	23,839		$	10,323
Share-based compensation expense	1,466,416			1,049,258			581			443
Net realized income allocated to noncontrolling interest	(608,237		)	(146,105		)	(65		)	(157		)
Net change in unrealized appreciation on investments	(16,778,197		)	(15,941,254		)	(4,728		)	(4,131		)
Bargain purchase gain	—			(4,890,582		)
Income tax provision	3,302,102			779,907			1,876			1,200
Pre-tax book (income) loss not consolidated for tax purposes	(421,280		)	5,985,652			4,035			135
Book income and tax income differences, including debt origination, structuring fees, dividends, and realized gains	3,547,475			1,323,650			1,351			3,932
Estimated taxable income	33,050,714			17,994,779			26,889			11,745
Taxable income earned in prior year and carried forward for distribution in current year	586,227			930,925			7,934			—
Ordinary taxable income earned in current period and carried forward for distribution	(8,564,128		)	(2,042,457		)	(27,571		)	(4,680		)
Dividend accrued as of September 30, 2011 and 2010 and paid on October 15, 2011 and 2010	3,134,612			2,333,273
Dividend accrued as of March 31 and paid in April							3,789			2,983
Total distributions accrued or paid to common stockholders	$	28,207,425		$	19,216,520		$	11,041		$	10,048

The net deferred tax liability at ~~September 30,~~March 31, 2012 and December 31, 2011 was ~~$1.0~~$4.8 million and $3.8 million, respectively, and primarily related to timing differences from net unrealized appreciation of portfolio investments held by the Taxable Subsidiaries, partially offset by net loss carryforwards primarily resulting from historical realized losses on portfolio ~~debt~~investments held by the Taxable Subsidiaries and ~~equity~~basis differences of portfolio investments as well as timing differences related to taxable income of equity investments in portfolio companies which are “pass through” entities for tax purposes. The net deferred tax asset at December 31, 2010 was $2.0 million and primarily related to timing differences from recognition of unrealized depreciation and unrealized appreciation from portfolio debt and equity investments as well as timing differences from taxable income from equity investments in portfolio companiesheld by the Taxable Subsidiaries which are “pass through” entities for tax purposes.

NOTE I — ~~EXCHANGE OFFER~~COMMON STOCK

On January 7, 2010, MSCC consummated the Exchange Offer to exchange 1,239,695 shares (the “Exchange Shares”) of its common stock for approximately 88% of the total dollar value of the limited partner interests in MSC II. Pursuant to the terms of the Exchange Offer, 100% of the membership interests in MSC II GP were also transferred to MSCC for no consideration. MSC II commenced operations in January 2006, is an investment fund that operates as an SBIC and is managed by the Investment Manager. The Exchange Offer was applicable to all MSC II limited partner interests except for any limited partner interests owned by affiliates of MSCC, including any limited partner interests owned by officers or directors of MSCC. The Exchange Offer was formally approved by the SBA prior to closing. An approximately 12% minority ownership in the total dollar value of the MSC II limited partnership interests remains outstanding, including approximately 5% owned by affiliates of MSCC.

The Exchange Offer was accounted for under the acquisition method of accounting in accordance with ASC 805. Accordingly, the purchase price was preliminarily allocated to the acquired assets and liabilities based on their estimated fair values at the Exchange Offer acquisition date as summarized in the following table. The fair value of the MSC II net assets acquired exceeded the fair value of the stock consideration issued, resulting in a bargain purchase gain that was recorded byIn October 2011, Main Street ~~in the period that the Exchange Offer was completed.~~

Value of the stock consideration issued for limited partner interests acquired

$
19,934,296
(1)
Fair value of noncontrolling limited partner interests

3,396,005
(2)
Total stock consideration and noncontrolling interest value

23,330,301

Fair value of MSC II assets and liabilities on January 7, 2010:

Cash

2,489,920

Debt investments acquired at fair value

64,925,164

Equity investments acquired at fair value

14,930,614

Other assets

808,560

SBIC debentures at fair value

(53,139,092
)
Deferred tax liability assumed

(82,827
)
Other liabilities

(1,519,608
)
Total fair value of MSC II net assets

28,412,731

Bargain purchase gain

5,082,430

Transaction costs associated with the Exchange Offer

(191,848
)

Bargain purchase gain, net of transaction costs

$
4,890,582

~~Table~~completed a public stock offering of ~~Contents~~

~~(1)~~~~The value of the~~3,450,000 shares of common stock, ~~exchanged for a majority of MSC II limited partner interests was based upon~~including the ~~closing price of Main Street’s common stock at January 7, 2010, the closing date~~underwriters’ full exercise of the ~~Exchange Offer.~~

~~(2)~~~~The fair value~~over-allotment option, at a price to the public of ~~the noncontrolling limited partner interests was based on the noncontrolling interests’~~$17.50 per share, resulting in ~~the~~ total ~~fair value of MSC II net assets at January 7, 2010.~~

Consummation of the Exchange Offer Transactions provided Main Street with access to additional long-term, low-cost leverage capacity through the SBIC program. The American Recovery and Reinvestment Act of 2009 enacted in February 2009 (the “Stimulus Bill”) increased the maximum amount of combined SBIC leverage (or SBIC leverage cap) to $225 million for affiliated SBIC funds from the previous SBIC leverage capgross proceeds of approximately ~~$137~~$60.4 million, less (i) underwriters’ commissions of approximately $2.7 million and (ii) offering costs of approximately $0.2 million. Since the increase in the SBIC leverage cap applies to affiliated SBIC funds, Main Street is required to allocate such increased borrowing capacity between MSMF and MSC II. Main Street currently has access to an incremental $5 million in SBIC leverage capacity, subject to the required capitalization of each of the Funds, in addition to the $220 million of existing SBIC leverage at the Funds.

~~Table of Contents~~

~~NOTE J — COMMON STOCK~~

In March 2011, Main Street completed a public stock offering of 4,025,000 shares of common stock, including the underwriters’ full exercise of the over-allotment option, at a price to the public of $18.35 per share, resulting in total ~~net~~gross proceeds of approximately ~~$70.3~~$73.8 million, ~~after deducting~~less (i) underwriters’ commissions ~~and offering costs.~~

In August 2010, Main Street completed a public stock offering of 3,220,000 shares of common stock, including the underwriters’ exercise of the over-allotment option, at a price to the public of $15.00 per share, resulting in total net proceeds of approximately ~~$45.8~~$3.3 million ~~after deducting underwriters’ commissions~~ and (ii) offering ~~costs.~~

In January 2010, Main Street completed a public stock offering of 2,875,000 shares of common stock, including the underwriters’ exercise of the over-allotment option, at a price to the public of $14.75 per share, resulting in total net proceedscosts of approximately ~~$40.1 million, after deducting underwriters’ commissions and offering costs.~~$0.2 million.

NOTE KJ — DIVIDEND REINVESTMENT PLAN (“DRIP”)

Main Street’s DRIP provides for the reinvestment of dividends on behalf of its stockholders, unless a stockholder has elected to receive dividends in cash. As a result, if Main Street declares a cash dividend, the company’s stockholders who have not “opted out” of the DRIP by the dividend record date will have their cash dividend automatically reinvested into additional shares of MSCC common stock. Main Street has the option to satisfy the share requirements of the DRIP through the issuance of shares of common stock or through open market purchases of common stock by the DRIP plan administrator. Newly issued shares will be valued based upon the final closing price of MSCC’s common stock on the valuation date determined for each dividend by Main Street’s Board of Directors. Shares purchased in the open market to satisfy the DRIP requirements will be valued based upon the average price of the applicable shares purchased by the DRIP plan administrator, before any associated brokerage or other costs. Main Street’s DRIP is administered by its transfer agent on behalf of Main Street’s record holders and participating brokerage firms. Brokerage firms and other financial intermediaries may decide not to participate in Main Street’s DRIP but may provide a similar dividend reinvestment plan.

For the ~~nine~~three months ended ~~September 30, 2011, $7.8~~March 31, 2012, $2.7 million of the total ~~$25.1~~$10.9 million in dividends paid to stockholders represented DRIP participation. During this period, Main Street satisfied the DRIP participation requirements with the issuance of ~~303,659~~117,466 newly issued ~~shares and with the purchase of 117,585 shares of common stock in the open market.~~shares. For the ~~nine~~three months ended ~~September 30, 2010, $5.9~~March 31, 2011, $2.4 million of the total ~~$16.9~~$7.1 million in dividends paid to stockholders represented DRIP participation. During this period, Main Street satisfied the DRIP participation requirements with the

Table of Contents

issuance of ~~347,474~~125,122 newly issued ~~shares and with the purchase of 35,572 shares of common stock in the open market.~~shares. The shares disclosed above relate only to Main Street’s DRIP and exclude any activity related to broker-managed dividend reinvestment plans.

NOTE LK — SHARE-BASED COMPENSATION

Main Street accounts for its share-based compensation plans using the fair value method, as prescribed by ASC 718, Compensation — Stock Compensation. Accordingly, for restricted stock awards, Main Street measured the grant date fair value based upon the market price of its common stock on the date of the grant and will amortize this fair value to share-based compensation expense over the requisite service period or vesting term.

Main Street’s Board of Directors approves the issuance of shares of restricted stock to Main Street employees pursuant to the Main Street Capital Corporation 2008 Equity Incentive Plan. These shares vest over a four-year period from the grant ~~date and are~~date. The fair value is expensed over the four-year service period starting on the grant date. The following table summarizes the restricted stock issuances approved by Main Street’s Board of Directors and the remaining shares of restricted stock available for issuance as of ~~September 30, 2011.~~March 31, 2012.

Restricted stock authorized under the plan	2,000,000
Less restricted stock granted on:
July 1, 2008	(245,645	)
July 1, 2009	(99,312	)
July 1, 2010	(149,357	)
June 20, 2011	(117,728	)

Restricted stock available for issuance as of ~~September 30, 2011~~March 31, 2012	1,387,958

~~Table of Contents~~

The following table summarizes the restricted stock issued to Main Street’s independent directors pursuant to the Main Street Capital Corporation 2008 Non-Employee Director Restricted Stock Plan. These shares vest on the day immediately preceding the annual meeting of stockholders following the respective grant date and are expensed over a one-year service period starting on the grant date.

Restricted stock authorized under the plan	200,000
Less restricted stock granted on:
July 1, 2008	(20,000	)
July 1, 2009	(8,512	)
July 1, 2010	(7,920	)
June 20, 2011	(6,584	)
August 3, 2011	(1,658	)

Restricted stock available for issuance as of ~~September 30, 2011~~March 31, 2012	155,326

For the ~~nine~~three months ended ~~September 30,~~March 31, 2012 and 2011, ~~and 2010,~~ Main Street recognized total share-based compensation expense of ~~$1.5~~$0.6 million and ~~$1.0~~$0.4 million, respectively, related to the restricted stock issued to Main Street employees and independent directors.

As of ~~September 30, 2011,~~March 31, 2012, there was ~~$4.8~~$3.7 million of total unrecognized compensation expense related to Main Street’s non-vested restricted shares. This compensation expense is expected to be recognized over a remaining weighted-average period of approximately ~~2.8~~2.5 years as of ~~September 30, 2011.~~March 31, 2012.

NOTE ML — COMMITMENTS

At ~~September 30, 2011,~~March 31, 2012, Main Street had ~~seven~~a total of $26.0 million in outstanding commitments comprised of (i) five commitments to fund ~~unused~~ revolving loans ~~for up to $17.5 million in total.~~that had not been fully drawn and (ii) two capital commitments that had not been fully called.

Table of Contents

NOTE NM — SUPPLEMENTAL CASH FLOW DISCLOSURES

Listed below are the supplemental cash flow disclosures for the ~~nine~~three months ended ~~September 30, 2011~~March 31, 2012 and ~~2010:~~2011:

					Three Months Ended March 31,
					2012		2011
	Nine Months Ended September 30,				(in thousands)
	2011		2010
Interest paid	$	11,675,126	$	7,797,985	$	6,293	$	5,089
Taxes paid	$	165,571	$	187,740	$	284	$	79
Non-cash financing activities:
Shares issued in connection with the MSC II Exchange Offer	$	—	$	20,093,091
Shares issued pursuant to the DRIP	$	5,722,327	$	5,392,202	$	2,701	$	2,409

NOTE ON — RELATED PARTY TRANSACTIONS

As discussed further in Note D, subsequent to the completion of the Formation Transactions, the Investment Manager is a wholly owned portfolio company of MSCC. At ~~September 30,~~March 31, 2012 and December 31, 2011, the Investment Manager had a receivable of ~~$3.1~~$1.5 million and $4.8 million respectively due from MSCC related to operating expenses incurred by the Investment Manager required to support Main Street’s business.

NOTE PO — SUBSEQUENT EVENTS

InDuring May 2012, Main Street expanded the Credit Facility from $235 million to $277.5 million. The $42.5 million increase in total commitments included commitment increases by three lenders currently participating in the Credit Facility. The amended Credit Facility contains an accordion feature that allows for a further increase in total commitments under the facility up to $350 million of total commitments from new and existing lenders on the same terms and conditions as the existing commitments. The increase in total commitments provides Main Street access to additional financing capacity in support of its future investment and operational activities.

During May 2012, Main Street declared monthly dividends of $0.145 per share for each of July, August and September 2012. These monthly dividends equal a total of $0.435 per share for the third quarter of 2012. The third quarter 2012 dividends represent an 11.5% increase from the dividends declared for the third quarter 2011 and a 3.6% increase compared to the second quarter of 2012. Including the dividends declared for the third quarter of 2012, Main Street will have paid $7.58 per share in cumulative dividends since its October ~~2011,~~2007 initial public offering.

During April 2012, Main Street completed a ~~public stock offering~~LMM portfolio investment in Bridge Capital Solutions Corporation (“Bridge Capital”). The investment consists of ~~3,450,000 shares of common stock, including the underwriters’ full exercise of the over-allotment option, at~~$5.0 million in first lien, senior secured debt with equity warrant participation. Headquartered on Long Island in Hauppauge, New York, Bridge Capital is a ~~price~~financial services firm that provides accelerated cash flow solutions to ~~the public of $17.50 per share, resulting in total net~~small businesses. The proceeds of ~~approximately $57.5 million, after deducting underwriters’ commissions~~Main Street’s investment were used to refinance certain debt obligations of Bridge Capital and ~~estimated offering costs.~~to provide additional liquidity to finance certain growth initiatives and for general working capital purposes.

4751

Table of Contents

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information in this section contains forward-looking statements that involve risks and uncertainties. Please see “Risk Factors” and “Cautionary Statement Concerning Forward Looking Statements” in our Annual Report on Form 10-K for the year ended December 31, ~~2010,~~2011, filed with the SEC on March ~~11, 2011,~~9, 2012, for a discussion of the uncertainties, risks and assumptions associated with these statements. You should read the following discussion in conjunction with the consolidated financial statements and related notes and other financial information included in the Annual Report on Form 10-K for the year ended December 31, ~~2010.~~2011.

ORGANIZATION

Main Street Capital Corporation (“MSCC”) was formed on March 9, 2007 for the purpose of (i) acquiring 100% of the equity interests of Main Street Mezzanine Fund, LP (“MSMF”) and its general partner, Main Street Mezzanine Management, LLC (“MSMF GP”), (ii) acquiring 100% of the equity interests of Main Street Capital Partners, LLC (the “Investment Manager”), (iii) raising capital in an initial public offering, which was completed in October 2007 (the “IPO”), and (iv) thereafter operating as an internally managed business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). MSMF is licensed as a Small Business Investment Company (“SBIC”) by the United States Small Business Administration (“SBA”) and the Investment Manager acts as MSMF’s manager and investment adviser. Because the Investment Manager, which employs all of the executive officers and other employees of MSCC, is wholly owned by us, we do not pay any external investment advisory fees, but instead we incur the operating costs associated with employing investment and portfolio management professionals through the Investment Manager. The IPO and related transactions discussed above were consummated in October 2007 and are collectively termed the “Formation Transactions.”

On January 7, 2010, MSCC consummated transactions (the “Exchange Offer”) to exchange 1,239,695 shares of its common stock for approximately 88% of the total dollar value of the limited partner interests in Main Street Capital II, LP (“MSC II” and, together with MSMF, the “Funds”). Pursuant to the terms of the Exchange Offer, 100% of the membership interests in the general partner of MSC II, Main Street Capital II GP, LLC (“MSC II GP”), were also transferred to MSCC for no consideration. MSC II commenced operations in January 2006, is an investment fund that operates as an SBIC and is also managed by the Investment Manager. During the first three months of 2012, MSCC exchanged 229,634 shares of its common stock to acquire all of the remaining minority ownership in the total dollar value of the MSC II limited partnership interests, including approximately 5% owned by affiliates of MSCC (the “Final MSC II Exchange”). After the acquisition of these remaining MSC II equity interests, MSCC owns 100% of MSC II as of March 31, 2012. The Exchange Offer and related transactions, including the transfer of the MSC II GP interests and the Final MSC II Exchange, are collectively termed the “Exchange Offer Transactions” (see Note I to the consolidated financial statements). As of September 30, 2011, an approximately 12% minority ownership in the total dollar value of the MSC II limited partnership interests remained outstanding, including approximately 5% owned by affiliates of MSCC. We have submitted an exemptive relief application to the SEC to permit us to acquire the approximately 5% ownership in the total dollar value of the MSC II limited partnership interests held by affiliates of MSCC using the same valuation formula utilized in the Exchange Offer. There can be no assurance that we will obtain the exemptive relief or that if we do obtain such relief it will be obtained on the terms we have outlined in our request.Transactions.”

Unless otherwise noted or the context otherwise indicates, the terms “we,” “us,” “our” and “Main Street” refer to MSCC and its subsidiaries, including the Funds and the Taxable Subsidiaries.

OVERVIEW

We are a principal investment firm primarily focused on providing customized debt and equity financing to lower middle market (“LMM”) companies ~~which we generally define as~~and debt capital to middle market (“Middle Market”) companies. Our portfolio investments are typically made to support management buyouts, recapitalizations, growth financings, refinancings and acquisitions of companies ~~with annual revenues between $10 million and $100 million~~ that operate in diverse ~~industries.~~industry sectors. We seek to partner with entrepreneurs, business owners and management teams and generally provide “one stop” financing alternatives within our LMM portfolio. We invest primarily in secured debt instruments, equity investments, warrants and other securities of LMM companies based in the United States and in secured debt instruments of Middle Market companies generally headquartered in the United States. Our principal investment objective is to maximize our portfolio’s total return by generating current income from our debt investments and capital appreciation from our equity and equity related investments, including warrants, convertible securities and other rights to acquire equity securities in a portfolio company. Our LMM companies generally have annual revenues between $10 million and $150 million, and our LMM portfolio investments generally range in size ~~from $5 million to $25 million.~~

4852

Table of Contents

from $5 million to $25 million. Our Middle Market investments are made in businesses that are generally larger in size than our LMM portfolio companies and our Middle Market portfolio companies had weighted average annual revenues of $476 million as of March 31, 2012. Our other portfolio (“Other Portfolio”) investments primarily consist of investments which are not consistent with the typical profiles for LMM and Middle Market portfolio investments, including investments which may be managed by third parties.

We seek to fill the current financing gap for LMM businesses, which, historically, have had more limited access to financing from commercial banks and other traditional sources. The underserved nature of the lower middle market creates the opportunity for us to meet the financing needs of LMM companies while also negotiating favorable transaction terms and equity participations. Our ability to invest across a company’s capital structure, from senior secured loans to equity securities, allows us to offer portfolio companies a comprehensive suite of financing solutions, or “one stop” financing. Providing customized, “one stop” financing solutions has become even more relevant to our LMM portfolio companies in the current investing environment. We generally seek to partner directly with entrepreneurs, management teams and business owners in making our investments. We believe that our LMM investment strategy has a lower correlation to the broader debt and equity markets.

As of ~~September 30, 2011,~~March 31, 2012, we had debt and equity investments in 5153 LMM portfolio companies with an aggregate fair value of ~~$371.7~~$388.1 million, with a total cost basis of approximately ~~$315.3~~$322.3 million, and a weighted average annual effective yield on our LMM debt investments of approximately ~~14.8%~~14.9%. Approximately ~~76%~~77% of our total LMM portfolio investments at cost were in the form of debt investments and ~~93%~~98% of such debt investments at cost were secured by first priority liens on the assets of our LMM portfolio companies as of ~~September 30, 2011.~~March 31, 2012. At ~~September 30, 2011,~~March 31, 2012, we had equity ownership in approximately ~~94%~~92% of our LMM portfolio companies and the average fully diluted equity ownership in those portfolio companies was approximately ~~34%~~33%. As of December 31, ~~2010,~~2011, we had debt and equity investments in 4454 LMM portfolio companies with an aggregate fair value of ~~$279.6~~$415.7 million with a total cost basis of approximately ~~$253.0~~$349.0 million and a weighted average annual effective yield on our LMM debt investments of approximately ~~14.5%~~14.8%. The weighted average annual yields were computed using the effective interest rates for all debt investments ~~at September 30, 2011~~as of March 31, 2012 and December 31, ~~2010,~~2011, including amortization of deferred debt origination fees and accretion of original issue discount but excluding liquidation fees payable upon repayment and any debt investments on non-accrual status.

In addition to our LMM investment strategy, we opportunistically pursue investments in ~~privately placed debt securities.~~Middle Market companies. Our ~~private placement~~Middle Market portfolio investments primarily consist of direct or secondary purchases of interest-bearing debt securities in companies that are generally larger in size than the LMM companies included in our LMM portfolio. Our ~~privately placed~~Middle Market portfolio debt investments are generally secured by either a first or second priority lien on the assets of the company and have an expected duration of between three and ~~four~~five years.

As of ~~September 30, 2011,~~March 31, 2012, we had ~~privately placed~~Middle Market portfolio investments in 2362 companies collectively totaling approximately ~~$123.4~~$251.0 million in fair value with a total cost basis of approximately ~~$124.8~~$249.8 million. The weighted average revenues for the ~~23 privately placed~~62 Middle Market portfolio company investments were approximately ~~$359 million as of September 30, 2011.~~$476 million. Our ~~privately placed portfolio~~Middle Market debt investments are primarily in the form of debt investments and ~~64%~~86% of such debt investments at cost were secured by first priority liens on portfolio company ~~assets.~~assets as of March 31, 2012. The weighted average annual effective yield on our ~~privately placed~~Middle Market portfolio debt investments was approximately ~~10.6%~~9.2% as of ~~September 30, 2011.~~March 31, 2012. As of December 31, ~~2010,~~2011, we had ~~privately placed~~Middle Market portfolio investments in 1657 companies collectively totaling approximately ~~$67.1~~$226.5 million in fair value with a total cost basis of approximately ~~$65.6~~$228.9 million. The weighted average revenues for the ~~16 privately placed~~57 Middle Market portfolio company investments were approximately ~~$352~~$473 million. The weighted average annual effective yield on our ~~privately placed~~Middle Market portfolio debt investments was approximately ~~12.5%~~9.5% as of December 31, ~~2010.~~2011. The weighted average ~~yield was~~annual yields were computed using the effective interest rates for all debt investments ~~at September 30, 2011~~as of March 31, 2012 and December 31, ~~2010,~~2011, including amortization of deferred debt origination fees and accretion of original issue discount but excluding liquidation fees payable upon repayment.

As of March 31, 2012, we had Other Portfolio investments in 4 companies collectively totaling approximately $25.1 million in both fair value and cost basis. As of December 31, 2011, we had Other Portfolio investments in 3 companies collectively totaling approximately $14.1 million in both fair value and cost basis.

Our portfolio investments are generally made through MSCC and the Funds. MSCC and the Funds share the same investment strategies and criteria, although they are subject to different regulatory regimes. An investor’s return in MSCC will depend, in part, on the Funds’ investment returns as MSMF ~~is a wholly owned subsidiary of MSCC~~ and MSC II ~~is a majority~~are both wholly owned ~~subsidiary~~subsidiaries of MSCC.

The level of new portfolio investment activity will fluctuate from period to period based upon our view of the current economic fundamentals, our ability to identify new investment opportunities that meet our investment criteria, and our ability to consummate the identified opportunities. The level of new investment activity, and associated interest and fee income, will directly impact future investment income. In addition, the level of dividends paid by portfolio companies and the portion of our portfolio debt investments on non-accrual status will directly impact future investment income. While we intend to grow our portfolio and our investment income over the long-term, our growth and our operating results may be more limited during depressed economic periods.

Table of Contents

However, we intend to appropriately manage our cost structure and liquidity position based on applicable economic conditions and our investment outlook. The level of realized gains or losses and unrealized appreciation or depreciation will also fluctuate depending upon portfolio activity and the performance of our individual portfolio companies. The changes in realized gains and losses and unrealized appreciation or depreciation could have a material impact on our operating results.

MSCC and its consolidated subsidiaries are internally managed by the Investment Manager, a wholly owned subsidiary, which employs all of the executive officers and other employees of Main Street. Because the Investment Manager is wholly owned by MSCC, MSCC does not pay any external investment advisory fees, but instead incurs the operating costs associated with employing investment and portfolio management professionals through the Investment Manager. We believe that our internally managed structure provides us with a beneficial operating expense structure when compared to other publicly-traded and privately-held investment firms which are externally managed, and our internally managed structure allows us the opportunity to leverage our non-interest operating expenses as we grow our investment portfolio. For the ~~nine~~quarter ended March 31, 2012, the ratio of our total operating expenses, excluding interest expense, as a percentage of our quarterly average total assets was 2.0% on an annualized basis, compared to 2.5% on an annualized basis for the quarter ended March 31, 2011 and 2.2% for the year ended December 31, 2011.

For the three months ended ~~September 30, 2011,~~March 31, 2012, we paid dividends on a monthly basis totaling ~~$1.155~~$0.405 per share, or ~~$25.1~~$10.9 million. In ~~August 2011,~~March 2012, we declared monthly dividends for the ~~fourth~~second quarter of ~~2011~~2012 totaling ~~$0.405~~$0.42 per share representing ~~an 8%~~a 7.7% increase compared to the monthly dividends for the ~~fourth~~second quarter of ~~2010.~~2011 and a 3.7% increase compared to the first quarter of 2012. During ~~2010,~~2011, we paid monthly dividends of ~~$0.125 per~~

~~Table of Contents~~

~~share, or $1.50~~$1.56 per share for the entire year. Including the dividends declared for the ~~fourth~~second quarter of ~~2011,~~2012, we will have paid approximately ~~$6.32~~$7.14 per share in cumulative dividends since our October 2007 initial public offering.

At ~~September 30, 2011,~~March 31, 2012, we had ~~$25.1~~$89.0 million in cash and cash equivalents and ~~$134.7~~$14.3 million in marketable securities and idle funds investments. In ~~June 2011,~~the second quarter of 2012, we ~~closed an expansion of the three-year~~expanded our credit facility (the “Credit Facility”) from ~~$100~~$235 million to ~~$155~~$277.5 million to provide additional liquidity in support of future investment and operational activities. The ~~$55~~$42.5 million increase in total commitments included commitment increases by ~~all six~~three lenders currently participating in the Credit Facility. ~~In addition to the $55 million~~The Credit Facility contains an accordion feature that allows for a further increase in total commitments ~~we extended~~under the ~~maturity~~facility up to $350 million of total commitments from new and existing lenders on the ~~Credit Facility by one year to September 2014.~~ same terms and conditions as the existing commitments.

In October 2011, we completed a follow-on public stock offering in which we sold 3,450,000 shares of common stock, including the underwriters’ full exercise of the over-allotment option, at a price to the public of $17.50 per share (or approximately 123% of the then latest reported Net Asset Value per share), resulting in total net proceeds of approximately $57.5 million, after deducting underwriters’ commissions and ~~estimated~~ offering costs. In March 2011, we completed a follow-on public stock offering in which we sold 4,025,000 shares of common stock, including the underwriters’ full exercise of the over-allotment option, at a price to the public of $18.35 per share (or approximately 141% of the then latest reported Net Asset Value per share), resulting in total net proceeds of approximately $70.3 million, after deducting underwriters’ commissions and offering costs.

CRITICAL ACCOUNTING POLICIES

Basis of Presentation

Our financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2012 and 2011, ~~and 2010,~~ our consolidated financial statements include the accounts of MSCC and its consolidated subsidiaries, including the Funds. Portfolio investments, as used herein, refers to all of our portfolio investments in LMM companies, ~~private placement~~Middle Market portfolio investments, Other Portfolio investments and our investment in the Investment Manager but excludes all of our “Marketable securities and idle funds investments.” “Marketable securities and idle funds investments” are classified as financial instruments and are reported separately on our Consolidated Balance Sheets and Consolidated Schedule of Investments due to the nature of such investments. Our results of operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2012 and 2011, ~~and 2010,~~ cash flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2012 and 2011 ~~and 2010~~ and financial position as of ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010,~~2011, are presented on a consolidated basis. The effects of all intercompany transactions between Main Street and its consolidated subsidiaries have been eliminated in consolidation. Certain reclassifications have been made to prior period balances to conform with the current financial statement ~~presentation.~~presentation, including certain investments previously classified as “Marketable securities and idle funds investments” that are now considered a part of the Middle Market portfolio and are now classified as “Non-Control/Non-Affiliate investments.”

The accompanying unaudited consolidated financial statements of Main Street are presented in conformity with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, the unaudited consolidated financial results included herein contain all adjustments, consisting solely of normal recurring accruals, considered necessary for the fair presentation of financial statements for the interim periods included herein. The results of operations for the three ~~and nine~~ months ended ~~September 30, 2011~~March 31, 2012 are not necessarily indicative of the operating results to

Table of Contents

be expected for the full year. Also, the unaudited financial statements and notes should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, ~~2010.~~2011. Financial statements prepared on a U.S. GAAP basis require management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.

Under the investment company rules and regulations pursuant to Article 6 of Regulation S-X and the Audit and Accounting Guide for Investment Companies issued by the American Institute of Certified Public Accountants (the “AICPA Guide”), we are precluded from consolidating portfolio company investments, including those in which we have a controlling interest, unless the portfolio company is another investment company. An exception to this general principle in the AICPA Guide occurs if we own a controlled operating company that provides all or substantially all of its services directly to us, or to an investment company of ours. None of the investments made by us qualify for this exception. Therefore, our portfolio investments are carried on the balance sheet at fair value, as discussed further in Note B to our consolidated financial statements, with any adjustments to fair value recognized as “Net Change in Unrealized Appreciation (Depreciation)” on our Statement of Operations until the investment is exited, resulting in any gain or loss on exit being recognized as a “Net Realized Gain (Loss) from Investments.”

Portfolio Investment Valuation

The most significant ~~estimate~~determination inherent in the preparation of our consolidated financial statements is the valuation of our portfolio investments and the related amounts of unrealized appreciation and depreciation. As of ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010,~~2011, approximately ~~75%~~85% and ~~78%~~89%, respectively, of our total assets represented investments in portfolio companies

~~Table of Contents~~

valued at fair value (including our investment in the Investment Manager). We are required to report our investments at fair value. We follow the provisions of the Accounting Standards Codification (“Codification” or “ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and enhances disclosure requirements for fair value measurements.

Our portfolio strategy calls for us to invest primarily in illiquid securities issued by private, LMM companies as well as ~~privately placed~~ debt securities issued by ~~private,~~ middle market companies that are generally larger in size than the LMM companies. ~~These~~Our portfolio also includes Other Portfolio investments which primarily consist of investments which are not consistent with the typical profiles for LMM and Middle Market portfolio investments, including investments which may be managed by third parties. All of our portfolio investments may be subject to restrictions on resale. LMM companies and Other Portfolio companies generally have no established trading market while ~~privately placed debt~~Middle Market securities generally have established markets that are not active. We determine in good faith the fair value of our portfolio investments pursuant to a valuation policy in accordance with ASC 820 and a valuation process approved by our Board of Directors and in accordance with the 1940 Act. For LMM investments, we review external events, including private mergers, sales and acquisitions involving comparable companies, and include these events in the valuation process. For ~~private placement~~Other Portfolio investments we generally value such investments based on the fair value of the portfolio company as determined by independent third parties, and based on our proportional ownership in the portfolio company, as well as the financial position and assessed risk of each of these portfolio investments. For Middle Market portfolio debt investments, we generally use observable inputs such as quoted prices in the valuation process. Our valuation policy and process is intended to provide a consistent basis for determining the fair value of the portfolio.

For valuation purposes, control investments are composed of equity and debt securities for which we have a controlling interest in the portfolio company or have the ability to nominate a majority of the portfolio company’s board of directors. Market quotations are generally not readily available for our control investments. As a result, we determine the fair value of control investments using a combination of market and income approaches. Under the market approach, we will typically use the enterprise value methodology to determine the fair value of these investments. The enterprise value is the fair value at which an enterprise could be sold in a transaction between two willing parties, other than through a forced or liquidation sale. Typically, private companies are bought and sold based on multiples of earnings before interest, taxes, depreciation and amortization, or EBITDA, cash flows, net income, revenues, or in limited cases, book value. There is no single methodology for estimating enterprise value. For any one portfolio company, enterprise value is generally described as a range of values from which a single estimate of enterprise value is derived. In estimating the enterprise value of a portfolio company, we analyze various factors, including the portfolio company’s historical and projected financial results. We allocate the enterprise value to investments in order of the legal priority of the investments. We will also use the income approach to determine the fair value of these securities, based on projections of the discounted future free cash flows that the portfolio company or the debt security will likely generate. The valuation approaches for our control investments estimate the value of the investment if we were to sell, or exit, the investment. In addition, these valuation approaches consider the value associated with our ability to control the capital structure of the portfolio company, as well as the timing of a potential exit.

For valuation purposes, non-control LMM ~~portfolio~~ investments are composed of debt and equity securities for which we do not have a controlling interest in the portfolio company, or the ability to nominate a majority of the portfolio company’s board of directors.

Table of Contents

Market quotations for non-control LMM ~~portfolio~~ investments are generally not readily available. For our non-control LMM ~~portfolio~~ investments, we use a combination of the market and income approaches to value our equity investments and the income approach to value our debt instruments. For non-control LMM debt investments, we determine the fair value primarily using a yield approach that analyzes the discounted cash flows of interest and principal for the debt security, as set forth in the associated loan agreements, as well as the financial position and credit risk of each of these portfolio investments. Our estimate of the expected repayment date of an LMM debt security is generally the legal maturity date of the instrument, as we generally intend to hold our loans to maturity. The yield analysis considers changes in leverage levels, credit quality, portfolio company performance and other factors. We will use the value determined by the yield analysis as the fair value for that security; however, because of our general intent to hold our loans to maturity, the fair value will not exceed the face amount of the LMM debt security. A change in the assumptions that we use to estimate the fair value of our LMM debt securities using the yield analysis could have a material impact on the determination of fair value. If there is deterioration in credit quality or if an LMM debt security is in workout status, we may consider other factors in determining the fair value of the LMM debt security, including the value attributable to the debt security from the enterprise value of the portfolio company or the proceeds that would most likely be received in a liquidation analysis.

Our ~~private placement~~Middle Market portfolio investments primarily consist of direct or secondary purchases of interest-bearing debt securities in companies that are generally larger in size than the LMM companies included in our investment portfolio. For valuation purposes, all of our ~~private placement~~Middle Market portfolio investments are non-control investments and are primarily composed of debt securities for which we do not have a controlling interest in the portfolio company, or the ability to nominate a majority of the portfolio company’s board of directors. We primarily use observable inputs to determine the fair value of these investments through obtaining third party quotes or independent pricing.

For valuation purposes, all of our Other Portfolio investments are non-control investments and are composed of securities for which we generally do not have a controlling interest in the portfolio company, or the ability to nominate a majority of the portfolio company’s board of directors. Similar to the LMM investment portfolio, market quotations for Other Portfolio investments are generally not readily available. We value our Other Portfolio equity investments based on the fair value of the portfolio company as determined by independent third parties and based on our proportional ownership in the portfolio company, as well as the financial position and assessed risk of each of these portfolio investments. We value our Other Portfolio debt investments based on the income approach and generally use a yield approach that analyzes the discounted cash flows of interest and principal for the debt security, as set forth in the associated loan agreements, as well as the financial position and credit risk of each of these portfolio investments.

Due to the inherent uncertainty in the valuation process, our ~~estimate~~determination of fair value for our LMM and Other Portfolio investments may differ materially from the values that would have been used had a ready market for the securities existed. In addition, changes in the market environment, portfolio company performance and other events that may occur over the lives of the investments may cause the gains or losses ultimately

~~Table of Contents~~

realized on these investments to be materially different than the valuations currently assigned. We ~~estimate~~determine the fair value of each individual investment and record changes in fair value as unrealized appreciation or depreciation.

Revenue Recognition

Interest and Dividend Income

We record interest and dividend income on the accrual basis to the extent amounts are expected to be collected. Dividend income is recorded as dividends are declared or at the point an obligation exists for the portfolio company to make a distribution. In accordance with our valuation policy, we evaluate accrued interest and dividend income periodically for collectability. When a loan or debt security becomes 90 days or more past due, and if we otherwise do not expect the debtor to be able to service all of its debt or other obligations, we will generally place the loan or debt security on non-accrual status and cease recognizing interest income on that loan or debt security until the borrower has demonstrated the ability and intent to pay contractual amounts due. If a loan or debt security’s status significantly improves regarding the debtor’s ability to service the debt or other obligations, or if a loan or debt security is fully impaired, sold or written off, we will remove it from non-accrual status.

Fee Income

We may periodically provide services, including structuring and advisory services, to our portfolio companies. For services that are separately identifiable and evidence exists to substantiate fair value, income is recognized as earned, which is generally when the investment or other applicable transaction closes. Fees received in connection with debt financing transactions for services that do not meet these criteria are treated as debt origination fees and are accreted into interest income over the life of the financing.

Table of Contents

Payment-in-Kind (“PIK”) Interest and Cumulative Dividends

We hold debt and preferred equity instruments in our investment portfolio that contain payment-in-kind (“PIK”) interest and cumulative dividend provisions. The PIK interest, computed at the contractual rate specified in each debt agreement, is periodically added to the principal balance of the debt and is recorded as interest income. Thus, the actual collection of this interest may be deferred until the time of debt principal repayment. Cumulative dividends are recorded as dividend income, and any dividends in arrears are added to the balance of the preferred equity investment. The actual collection of dividends in arrears may be deferred until such time as the preferred equity is redeemed. To maintain RIC tax treatment (as discussed below), these non-cash sources of income may need to be paid out to stockholders in the form of distributions, even though we may not have collected the PIK interest and cumulative dividends in cash. We will stop accruing PIK interest and cumulative dividends and will write off any accrued and uncollected interest and dividends in arrears when it is determined that such PIK interest and dividends in arrears are no longer collectible.

Share-Based Compensation

We account for our share-based compensation plans using the fair value method, as prescribed by ASC 718, Compensation—Stock Compensation. Accordingly, for restricted stock awards, we measured the grant date fair value based upon the market price of our common stock on the date of the grant and will amortize this fair value to share-based compensation expense over the requisite service period or vesting term.

Income Taxes

MSCC has elected to be, and intends to continue to qualify for the tax treatment applicable to, a RIC under the Code, and, among other things, intends to make the required distributions to its stockholders as specified therein. In order to qualify as a RIC, MSCC is required to timely distribute to its stockholders at least 90% of investment company taxable income, as defined by the Code, each year. Depending on the level of taxable income earned in a tax year, MSCC may choose to carry forward taxable income in excess of current year distributions into the next tax year and pay a 4% excise tax on such income. Any such carryover taxable income must be distributed through a dividend declared prior to filing the final tax return related to the year which generated such taxable income.

The Taxable Subsidiaries hold certain portfolio investments of Main Street. The Taxable Subsidiaries are consolidated for U.S. GAAP reporting purposes, and the portfolio investments held by them are included in Main Street’s consolidated financial statements. The Taxable Subsidiaries permit Main Street to hold equity investments in portfolio companies which are “pass through” entities for tax purposes in order to comply with the “source income” requirements contained in the RIC tax provisions. The Taxable Subsidiaries are not consolidated with Main Street for income tax purposes and may generate income tax expense, or benefit, as a

~~Table of Contents~~

result of their ownership of certain portfolio investments. This income tax expense, or benefit, is reflected in Main Street’s Consolidated Statement of Operations.

PORTFOLIO INVESTMENT COMPOSITION

LMM portfolio investments principally consist of secured debt, equity warrants and direct equity investments in privately held, LMM companies. The LMM debt investments are primarily secured by either a first or second lien on the assets of the portfolio company, generally bear interest at fixed rates, and generally mature between five and seven years from the original investment date. In most LMM portfolio companies, we also receive nominally priced equity warrants and/or make direct equity investments, usually in connection with a debt investment.

~~Private placement~~Middle market portfolio investments primarily consist of direct or secondary purchases of interest-bearing debt securities in companies that are generally larger in size than the LMM companies included in our LMM portfolio. Our ~~privately placed~~Middle Market portfolio debt investments are generally secured by either a first or second priority lien.

Table of Contents

Summaries of the composition of our LMM investment portfolio, ~~private placement~~Middle Market investment portfolio, and total combined LMM and Middle Market investment portfolio at cost and fair value by type of investment as a percentage of the total LMM investment portfolio, the total ~~private placement~~Middle Market investment portfolio, and the total combined LMM and Middle Market investment portfolio are shown in the following ~~table:~~table (this information excludes the Other Portfolio investments):

	September 30, 2011						December 31, 2010						March 31, 2012						December 31, 2011
Cost:	LMM		Private Placement		Total		LMM		Private Placement		Total		LMM		Middle Market		Total		LMM		Middle Market		Total
First lien debt	70.3	%	64.0	%	68.5	%	70.6	%	71.3	%	70.8	%	76.0	%	85.3	%	80.1	%	69.5	%	81.8	%	74.4	%
Equity													18.2	%	0.3	%	10.4	%	20.5	%	0.2	%	12.5	%
Second lien debt	5.5	%	36.0	%	14.1	%	6.7	%	28.7	%	11.2	%	1.2	%	14.4	%	7.0	%	5.0	%	18.0	%	10.1	%
Equity	19.1	%	0.0	%	13.7	%	17.7	%	0.0	%	14.1	%
Equity warrants	5.1	%	0.0	%	3.7	%	5.0	%	0.0	%	3.9	%	4.6	%	0.0	%	2.5	%	5.0	%	0.0	%	3.0	%
	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

	September 30, 2011						December 31, 2010						March 31, 2012						December 31, 2011
Fair Value:	LMM		Private Placement		Total		LMM		Private Placement		Total		LMM		Middle Market		Total		LMM		Middle Market		Total
First lien debt	57.4	%	64.2	%	59.1	%	62.6	%	71.8	%	64.4	%	62.2	%	85.4	%	71.4	%	57.7	%	81.7	%	66.2	%
Equity													29.3	%	0.2	%	17.9	%	29.0	%	0.3	%	18.8	%
Second lien debt	4.9	%	35.8	%	12.6	%	6.5	%	28.2	%	10.6	%	1.0	%	14.4	%	6.2	%	4.4	%	18.0	%	9.2	%
Equity	28.6	%	0.0	%	21.5	%	21.9	%	0.0	%	17.7	%
Equity warrants	9.1	%	0.0	%	6.8	%	9.0	%	0.0	%	7.3	%	7.5	%	0.0	%	4.5	%	8.9	%	0.0	%	5.8	%
	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

Table of Contents

The following table shows the LMM investment portfolio, ~~private placement~~Middle Market investment portfolio, and total combined LMM and Middle Market investment portfolio composition by geographic region of the United States at cost and fair value as a percentage of total LMM investment portfolio, total ~~private placement~~Middle Market investment portfolio, and total combined LMM and Middle Market investment ~~portfolio.~~portfolio (this information excludes the Other Portfolio investments). The geographic composition is determined by the location of the corporate headquarters of the portfolio company:

~~Table of Contents~~

	March 31, 2012						December 31, 2011
Cost:	LMM		Middle Market		Total		LMM		Middle Market		Total
Southwest	43.4	%	15.4	%	31.1	%	47.8	%	16.4	%	35.4	%
West	35.2	%	9.5	%	24.0	%	31.9	%	13.7	%	24.7	%
Northeast	3.2	%	40.0	%	19.3	%	3.9	%	32.6	%	15.2	%
Midwest	9.9	%	23.8	%	16.0	%	9.0	%	21.6	%	14.0	%
Southeast	8.3	%	11.3	%	9.6	%	7.4	%	15.7	%	10.7	%
	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

	September 30, 2011						December 31, 2010						March 31, 2012						December 31, 2011
Fair Value:	LMM		Private Placement		Total		LMM		Private Placement		Total		LMM		Middle Market		Total		LMM		Middle Market		Total
Southwest	53.8	%	28.6	%	47.4	%	51.8	%	12.7	%	44.2	%	47.1	%	15.2	%	34.6	%	52.1	%	16.2	%	39.3	%
West	28.9	%	19.8	%	26.6	%	28.4	%	13.4	%	25.5	%	32.6	%	9.5	%	23.5	%	28.9	%	13.8	%	23.6	%
Northeast	4.4	%	26.7	%	10.1	%	6.2	%	40.1	%	12.8	%	3.5	%	39.9	%	17.8	%	3.9	%	32.4	%	14.0	%
Midwest	5.7	%	17.7	%	8.7	%	7.2	%	29.3	%	11.5	%	9.7	%	24.1	%	15.3	%	8.7	%	21.9	%	13.4	%
Southeast	7.2	%	7.2	%	7.2	%	6.4	%	4.5	%	6.0	%	7.1	%	11.3	%	8.8	%	6.4	%	15.7	%	9.7	%
	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

5459

Table of Contents

Our LMM and ~~private placement~~Middle Market portfolio investments are in companies conducting business in a variety of industries. Set forth below are tables showing the composition of our LMM portfolio investments, ~~private placement~~Middle Market portfolio investments, and total combined LMM and Middle Market portfolio investments by industry at cost and fair value as of ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010:~~2011 (this information excludes the Other Portfolio investments):

	March 31, 2012						December 31, 2011
Cost:	LMM		Middle Market		Total		LMM		Middle Market		Total
Energy Equipment and Services	10.5	%	8.2	%	9.4	%	9.2	%	7.5	%	8.5	%
Health Care Providers and Services	7.0	%	11.8	%	9.1	%	6.5	%	9.1	%	7.5	%
Media	9.4	%	6.0	%	7.9	%	8.7	%	6.6	%	7.9	%
Machinery	10.6	%	3.1	%	7.3	%	9.9	%	2.1	%	6.9	%
Commercial Services and Supplies	11.7	%	0.0	%	6.6	%	15.4	%	0.9	%	9.7	%
Software	3.0	%	10.3	%	6.2	%	2.8	%	8.4	%	5.0	%
Specialty Retail	5.9	%	5.1	%	5.5	%	5.3	%	5.6	%	5.4	%
Construction and Engineering	5.8	%	3.5	%	5.0	%	5.3	%	0.0	%	5.0	%
Diversified Consumer Services	4.8	%	0.0	%	2.7	%	2.7	%	0.0	%	1.6	%
Hotels, Restaurants and Leisure	2.2	%	2.8	%	2.5	%	2.1	%	7.2	%	4.1	%
Food and Staples Retailing	0.0	%	5.7	%	2.5	%	0.0	%	6.2	%	2.5	%
Chemicals	0.0	%	5.4	%	2.4	%	0.0	%	3.8	%	1.5	%
Electronic Equipment, Instruments and Components	4.1	%	0.0	%	2.3	%	4.6	%	0.0	%	2.8	%
Construction Materials	1.3	%	4.1	%	2.3	%	1.1	%	4.4	%	0.7	%
Professional Services	3.8	%	0.0	%	2.2	%	3.5	%	0.0	%	2.1	%
Consumer Finance	3.2	%	0.8	%	2.2	%	3.0	%	0.9	%	2.1	%
Insurance	3.3	%	0.0	%	1.9	%	3.1	%	2.6	%	2.9	%
IT Services	0.0	%	4.4	%	1.9	%	0.0	%	4.1	%	1.6	%
Building Products	2.9	%	0.0	%	1.6	%	2.6	%	0.0	%	1.6	%
Food Products	0.0	%	3.6	%	1.6	%	0.0	%	3.9	%	1.6	%
Internet Software and Services	0.4	%	3.0	%	1.5	%	3.0	%	0.0	%	1.8	%
Metals and Mining	0.0	%	3.5	%	1.5	%	0.0	%	0.0	%	0.0	%
Paper and Forest Products	2.6	%	0.0	%	1.4	%	2.2	%	0.0	%	1.3	%
Health Care Equipment and Supplies	2.4	%	0.0	%	1.4	%	2.2	%	1.2	%	1.8	%
Transportation Infrastructure	2.2	%	0.0	%	1.3	%	2.0	%	0.0	%	1.2	%
Pharmaceuticals	0.0	%	2.4	%	1.0	%	0.0	%	2.6	%	1.0	%
Real Estate Management and Development	0.0	%	2.3	%	1.0	%	0.0	%	2.5	%	1.0	%
Internet and Catalog Retail	0.0	%	2.1	%	0.9	%	0.0	%	2.2	%	0.9	%
Biotechnology	0.0	%	2.0	%	0.9	%	0.0	%	2.2	%	0.8	%
Auto Components	0.0	%	1.5	%	0.7	%	0.0	%	2.9	%	1.2	%
Electric Utilities	0.0	%	0.9	%	0.4	%	0.0	%	2.0	%	0.8	%
Thrifts and Mortgage Finance	0.0	%	0.0	%	0.0	%	0.0	%	2.0	%	0.8	%
Other (1)	2.9	%	7.5	%	4.9	%	4.8	%	9.1	%	6.4	%
	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

(1) ~~Various~~Includes various industries with each industry individually less than 2.0% of the total LMM portfolio, ~~totals~~total Middle Market portfolio and combined total LMM and Middle Market portfolio in each period.

5560

Table of Contents

	March 31, 2012						December 31, 2011
Fair Value:	LMM		Middle Market		Total		LMM		Middle Market		Total
Energy Equipment and Services	12.9	%	8.4	%	11.2	%	11.2	%	7.5	%	9.8	%
Health Care Providers and Services	8.0	%	11.7	%	9.5	%	7.4	%	9.0	%	7.9	%
Machinery	12.0	%	3.2	%	8.6	%	10.7	%	2.2	%	7.7	%
Media	7.9	%	6.0	%	7.2	%	7.4	%	6.5	%	7.1	%
Commercial Services and Supplies	10.3	%	0.0	%	6.3	%	13.5	%	0.9	%	9.0	%
Software	3.0	%	10.5	%	5.9	%	2.8	%	8.4	%	4.8	%
Construction and Engineering	6.7	%	3.5	%	5.7	%	6.0	%	0.0	%	5.5	%
Specialty Retail	4.1	%	4.7	%	4.3	%	3.8	%	5.2	%	4.3	%
Diversified Consumer Services	5.7	%	0.0	%	3.5	%	3.7	%	0.0	%	2.4	%
Hotels, Restaurants and Leisure	2.6	%	2.8	%	2.7	%	2.5	%	7.2	%	4.2	%
Food and Staples Retailing	0.0	%	5.6	%	2.2	%	0.0	%	6.3	%	2.2	%
Chemicals	0.0	%	5.5	%	2.1	%	0.0	%	3.8	%	1.3	%
Electronic Equipment, Instruments and Components	3.3	%	0.0	%	2.0	%	3.7	%	0.0	%	2.4	%
Internet Software and Services	1.3	%	3.0	%	2.0	%	5.8	%	0.0	%	3.7	%
Construction Materials	1.0	%	4.1	%	2.0	%	0.8	%	4.5	%	0.5	%
Consumer Finance	2.7	%	0.8	%	1.9	%	2.5	%	0.9	%	1.9	%
Trading Companies and Distributors	2.9	%	0.0	%	1.8	%	2.6	%	0.0	%	1.7	%
Insurance	2.8	%	0.0	%	1.7	%	2.6	%	2.6	%	2.6	%
IT Services	0.0	%	4.1	%	1.6	%	0.0	%	3.8	%	1.4	%
Professional Services	2.3	%	0.0	%	1.4	%	2.2	%	0.0	%	1.4	%
Paper and Forest Products	2.4	%	0.0	%	1.4	%	2.2	%	0.0	%	1.4	%
Food Products	0.0	%	3.6	%	1.4	%	0.0	%	4.0	%	1.4	%
Metals and Mining	0.0	%	3.6	%	1.4	%	0.0	%	0.0	%	0.0	%
Transportation Infrastructure	2.2	%	0.0	%	1.3	%	2.0	%	0.0	%	1.3	%
Health Care Equipment and Supplies	2.0	%	0.0	%	1.2	%	1.9	%	1.2	%	1.6	%
Pharmaceuticals	0.0	%	2.5	%	1.0	%	0.0	%	2.8	%	1.0	%
Real Estate Management and Development	0.0	%	2.3	%	0.9	%	0.0	%	2.6	%	0.9	%
Internet and Catalog Retail	0.0	%	2.1	%	0.8	%	0.0	%	2.2	%	0.8	%
Biotechnology	0.0	%	1.9	%	0.8	%	0.0	%	2.1	%	0.7	%
Auto Components	0.0	%	1.6	%	0.6	%	0.0	%	3.0	%	1.1	%
Electric Utilities	0.0	%	0.9	%	0.3	%	0.0	%	2.0	%	0.7	%
Thrifts and Mortgage Finance	0.0	%	0.0	%	0.0	%	0.0	%	2.1	%	0.7	%
Other (1)	3.9	%	7.6	%	5.3	%	4.7	%	9.2	%	6.6	%
	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

Our LMM, Middle Market and ~~private placement portfolio~~Other Portfolio investments carry a number of risks including, but not limited to: (1) investing in LMM, Middle Market and ~~middle market~~Other Portfolio companies which may have limited operating histories and financial resources; (2) holding investments that generally are not publicly traded and which may be subject to legal and other restrictions on resale; and (3) other risks common to investing in below investment grade debt and equity investments in LMM, Middle Market and ~~middle market~~Other Portfolio companies.

PORTFOLIO ASSET QUALITY

We utilize an internally developed investment rating system to rate the performance of each LMM portfolio company. Investment Rating 1 represents a LMM portfolio company that is performing in a manner which significantly exceeds ~~expectations and projections.~~ expectations.

Table of Contents

Investment Rating 2 represents a LMM portfolio company that, in general, is performing above expectations. Investment Rating 3 represents a LMM portfolio company that is generally performing in accordance with expectations. Investment Rating 4 represents a LMM portfolio company that is underperforming expectations. Investments with such a rating require increased monitoring and scrutiny by us. Investment Rating 5 represents a LMM portfolio company that is significantly underperforming. Investments with such a rating require heightened levels of monitoring and scrutiny by us and involve the recognition of significant unrealized depreciation on such investment. All new LMM portfolio investments receive an initial 3 rating.

The following table shows the distribution of our LMM ~~and privately placed~~ portfolio investments ~~(excluding the investment in our affiliated Investment Manager)~~ on the 1 to 5 investment rating scale at fair value as of ~~September 30, 2011~~March 31, 2012 and December 31, ~~2010:~~2011:

~~Table of Contents~~

	September 30, 2011				December 31, 2010				March 31, 2012				December 31, 2011
Investment	Investments at		Percentage of		Investments at		Percentage of		Investments at		Percentage of		Investments at		Percentage of
Rating	Fair Value		Total Portfolio		Fair Value		Total Portfolio		Fair Value		Total Portfolio		Fair Value		Total Portfolio
	(dollars in thousands)								(Unaudited)
									(dollars in thousands)
1	$	104,058	21.0	%	$	52,147	15.0	%	$	133,057	34.4	%	$	125,505	30.2	%
2	226,106		45.6	%	153,408		44.2	%	93,655		24.1	%	119,234		28.7	%
3	149,507		30.2	%	122,249		35.3	%	143,766		37.0	%	152,910		36.7	%
4	15,153		3.1	%	17,705		5.1	%	17,591		4.5	%	17,765		4.3	%
5	250		0.1	%	1,250		0.4	%	—		0.0	%	250		0.1	%
Totals	$	495,074	100.0	%	$	346,759	100.0	%	$	388,069	100.0	%	$	415,664	100.0	%

Based upon our investment rating system, the weighted average rating of our LMM portfolio was approximately ~~2.2~~2.1 as of ~~September 30, 2011~~March 31, 2012 and ~~approximately 2.3~~2.2 as of December 31, ~~2010. As~~2011.

For the total investment portfolio, as of ~~September 30, 2011,~~March 31, 2012, we had ~~two~~no investments with positive fair value on non-accrual status and two fully impaired investments which comprised approximately ~~1.3% of the total portfolio investments at fair value and 3.4%~~0.9% of the total portfolio investments at cost ~~(or 1.0% and 2.6%, respectively with the inclusion of marketable securities and idle funds investments), in each case~~on non-accrual status, excluding the investment in the affiliated Investment Manager. As of December 31, ~~2010,~~2011, we had ~~two investments~~one investment with positive fair value on non-accrual status, which comprised ~~approximately 2.6%~~less than 0.1% of the total portfolio investments at fair value and, ~~3.6%~~together with another fully impaired investment, comprised 0.9% of the total portfolio investments at cost, ~~(or 2.2% and 3.0%, respectively with the inclusion of marketable securities and idle funds investments),~~ in each case excluding the investment in the affiliated Investment Manager.

The broader fundamentals of the United States economy remain mixed, and unemployment remains elevated. In the event that the United States economy contracts, it is likely that the financial results of small- to mid-sized companies, like those in which we invest, could experience deterioration or limited growth from current levels, which could ultimately lead to difficulty in meeting their debt service requirements and an increase in defaults. Consequently, we can provide no assurance that the performance of certain portfolio companies will not be negatively impacted by economic cycles or other conditions, which could also have a negative impact on our future results.

5762

Table of Contents

DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS

Comparison of the three months ended ~~September 30,~~March 31, 2012 and March 31, 2011 ~~and September 30, 2010~~

Three Months Ended September 30,

Net Change

2011

2010

Amount

%

(dollars in millions)

Total investment income

$
17.1

$
9.0

$
8.1

90
%
Total expenses

(6.7
)
(4.2
)
(2.5
)
58
%
Net investment income

10.4

4.8

5.6

118
%
Net realized gain (loss) from investments

1.4

(1.5
)
2.9

194
%
Net realized income

11.8

3.3

8.5

266
%
Net change in unrealized appreciation

2.8

8.6

(5.8
)
-68
%
Income tax benefit (provision)

(0.1
)
(0.4
)
0.3

NM

Noncontrolling interest

—

(0.6
)
0.6

NM

Net increase in net assets resulting from operations attributable to common stock

$
14.5

$
10.9

$
3.6

32
%

Three Months Ended September 30,

Net Change

2011

2010

Amount

%

(dollars in millions)

Net investment income

$
10.4

$
4.8

$
5.6

118
%
Share-based compensation expense

0.6

0.4

0.2

30
%
Distributable net investment income (a)

11.0

5.2

5.8

110
%
Net realized gain (loss) from investments

1.4

(1.5
)
2.9

194
%
Distributable net realized income (a)

$
12.4

$
3.7

$
8.7

237
%

Distributable net investment income per share -

Basic and diluted (a) (b)

$
0.46

$
0.30

$
0.16

53
%
Distributable net realized income per share -

Basic and diluted (a) (b)

$
0.52

$
0.21

$
0.31

150
%

	Three Months Ended March 31,						Net Change
	2012			2011			Amount			%
	(dollars in millions)
Total investment income	$	20.6		$	13.4		$	7.2		54	%
Total expenses	(7.7		)	(6.0		)	(1.7		)	29	%
Net investment income	12.9			7.4			5.5			74	%
Net realized gain from investments	8.2			—			8.2			NM
Net realized income	21.1			7.4			13.7			184	%
Net change in unrealized appreciation	4.7			4.1			0.6			14	%
Income tax provision	(1.9		)	(1.2		)	(0.7		)	56	%
Noncontrolling interest	(0.1		)	—			(0.1		)	NM
Net increase in net assets resulting from operations attributable to common stock	$	23.8		$	10.3		$	13.5		130	%

	Three Months Ended March 31,				Net Change
	2012		2011		Amount		%
	(dollars in millions)
Net investment income	$	12.9	$	7.4	$	5.5	74	%
Share-based compensation expense	0.5		0.4		0.1		31	%
Distributable net investment income (a)	13.4		7.8		5.6		71	%
Net realized gain from investments	8.2		—		8.2		NM
Distributable net realized income (a)	$	21.6	$	7.8	$	13.8	175	%

Distributable net investment income per share -
Basic and diluted (a) (b)	$	0.50	$	0.40	$	0.10	25	%
Distributable net realized income per share -
Basic and diluted (a) (b)	$	0.80	$	0.40	$	0.40	100	%

(a) Distributable net investment income and distributable net realized income are net investment income and net realized income, respectively, as determined in accordance with U.S. generally accepted accounting principles, or GAAP, excluding the impact of share-based compensation expense which is non-cash in nature. Main Street believes presenting distributable net investment income and distributable net realized income, and related per share amounts, ~~are~~is useful and appropriate supplemental ~~disclosures~~disclosure of information for analyzing its financial performance since share-based compensation does not require settlement in cash. However, distributable net investment income and distributable net realized income are ~~non- U.S. GAAP~~non-GAAP measures and should not be considered as a replacement to net investment income, net realized income, and other earnings measures presented in accordance with ~~U.S.~~ GAAP. Instead, distributable net investment income and distributable net realized income should be reviewed only in connection with such ~~U.S.~~ GAAP measures in analyzing Main Street’s financial performance. A reconciliation of net investment income and net realized income in accordance with ~~U.S.~~ GAAP to distributable net investment income and distributable net realized income is presented in the table above.

(b) ~~Per~~For the three months ended March 31, 2012, per share amounts exclude the earnings attributable to the remaining noncontrolling equity interests in MSC II that remained held by third parties prior to MSCC’s completion of the Final MSC II Exchange. For the three months ended March 31, 2011, per share amounts exclude the earnings attributable to the remaining noncontrolling equity interests in MSC II not owned by Main Street.

Investment Income

For the three months ended ~~September 30, 2011,~~March 31, 2012, total investment income was ~~$17.1~~$20.6 million, a ~~90%~~54% increase over the ~~$9.0~~$13.4 million for the corresponding period of ~~2010.~~2011. This comparable period increase was principally attributable to (i) a ~~$6.2~~$6.9 million increase in interest income from higher average levels of both portfolio debt investments and interest-bearing marketable securities ~~and idle funds~~ investments, (ii) a ~~$1.2~~$0.2 million increase in fee income due to the increased size of the investment portfolio and (iii) a $0.1 million increase in dividend income from portfolio equity ~~investments, and (iii) a $0.7 million increase in fee income due to higher levels of transaction activity.~~investments. The increase in investment income included ~~$0.5~~(i) $1.8 million of ~~interest~~non-recurring investment income associated with repayment and financing activities associated with two LMM portfolio investments and (ii) a $0.3 million increase in investment income associated with higher levels of accelerated prepayment ~~and repricing~~ activity for certain Middle Market portfolio debt investments and marketable securities investments.

Expenses

For the three months ended ~~September 30, 2011,~~March 31, 2012, total expenses increased by approximately ~~$2.5~~$1.7 million to ~~$6.7~~$7.7 million from ~~$4.2~~$6.0 million in the corresponding period of ~~2010.~~2011. This comparable period increase in expenses was principally attributable to (i) higher interest expense of ~~$1.4~~$1.0 million as a result of the issuance of an additional ~~$40~~$30 million in SBIC debentures during the first

Table of Contents

quarter of 2011 and $10 million in SBIC debentures subsequent to ~~the third quarter of 2010~~March 31, 2011, and increased borrowing activity under the Credit Facility, (ii) higher share-based compensation expense of ~~$0.2~~$0.1 million related to non-cash amortization for restricted share grants, and (iii) higher compensation and other operating expenses of ~~$0.9~~

~~Table of Contents~~

$0.6 million related to the ~~significant~~ increase in investment income and portfolio investments compared to the corresponding period of ~~2010.~~2011. The ratio of total operating expenses, excluding interest expense, as a percentage of average total assets for the three months ended March 31, 2012 was 2.0% on an annualized basis, compared to 2.5% on an annualized basis for the corresponding period of 2011 and 2.2% for the year ended December 31, 2011.

Distributable Net Investment Income

Distributable net investment income for the three months ended ~~September 30, 2011~~March 31, 2012 increased ~~110%~~71% to ~~$11.0~~$13.4 million, or ~~$0.46~~$0.50 per share, compared with ~~$5.2~~$7.8 million, or ~~$0.30~~$0.40 per share, in the corresponding period of 2010. The increase in distributable net investment income was primarily due to the higher level of total investment income partially offset by higher interest and other operating expenses, due to the changes discussed above. Distributable net investment income on a per share basis for the third quarter of 2011 reflects approximately (i) $0.02 per share of investment income associated with the prepayment and repricing activity discussed above and (ii) a greater number of average shares outstanding compared to the corresponding period in 2010 primarily due to the March 2011 and August 2010 follow-on stock offerings.

~~Net Investment Income~~

Net investment income for the three months ended September 30, 2011 was $10.4 million, or a 118% increase, compared to net investment income of $4.8 million during the corresponding period of 2010. The increase in net investment income was principally attributable to the increase in total investment income partially offset by the higher interest and other operating expenses discussed above.

~~Distributable Net Realized Income~~

Distributable net realized income increased to $12.4 million, or $0.52 per share, in the third quarter of 2011 compared with distributable net realized income of $3.7 million, or $0.21 per share, in the corresponding period of 2010. The increase was due to (i) the higher level of total distributable net investment income in the third quarter of 2011 and (ii) the higher level of total net realized gain from investments in the third quarter of 2011 compared to the net realized loss from investments in the corresponding period of 2010. The $1.4 million net realized gain during the third quarter of 2011 was primarily attributable to a realized gain recognized on the partial exit of an LMM portfolio company equity investment and realized gains related to privately placed and marketable securities debt investments. The net realized loss for the third quarter of 2010 was primarily related to a $1.9 million realized loss on the sale of a portfolio company investment.

~~Net Realized Income~~

The higher level of net investment income in addition to the change in net realized gain from investments during the three months ended September 30, 2011 resulted in an $8.5 million increase in net realized income compared with the corresponding period of 2010.

~~Net Increase in Net Assets Resulting from Operations Attributable to Common Stock~~

For the three months ended September 30, 2011, the $2.8 million net change in unrealized appreciation was principally attributable to (i) accounting reversals of net unrealized appreciation related to the net realized gains recognized in the third quarter of 2011 in the amounts of $1.3 million for portfolio investments and $0.4 million for marketable securities and idle funds investments, (ii) unrealized appreciation on 28 portfolio investments totaling $20.2 million, partially offset by unrealized depreciation on 26 portfolio investments totaling $8.3 million, (iii) $3.8 million of net unrealized depreciation on investments in marketable securities and idle funds investments, and (iv) $3.6 million of net unrealized depreciation attributable to our SBIC debentures. For the third quarter of 2011, we also recognized a net income tax provision of $0.1 million principally related to deferred taxes on net unrealized appreciation of certain portfolio investments held in our Taxable Subsidiaries.

As a result of these events, our net increase in net assets resulting from operations attributable to common stock during the three months ended September 30, 2011 was $14.5 million, or $0.62 per share, compared with a net increase in net assets resulting from operations attributable to common stock of $10.9 million, or $0.65 per share, in the corresponding period of 2010.

~~Table of Contents~~

~~Comparison of the nine months ended September 30, 2011 and September 30, 2010~~

Nine Months Ended September 30,

Net Change

2011

2010

Amount

%

(dollars in millions)

Total investment income

$
46.6

$
24.8

$
21.8

88
%
Total expenses

(19.2
)
(12.1
)
(7.1
)
59
%
Net investment income

27.4

12.7

14.7

115
%
Net realized gain (loss) from investments

1.7

(2.9
)
4.6

159
%
Net realized income

29.1

9.8

19.3

197
%
Net change in unrealized appreciation (depreciation) from investments

16.8

15.9

0.9

5
%
Income tax benefit (provision)

(3.3
)
(0.8
)
(2.5
)
323
%
Bargain purchase gain

—

4.9

(4.9
)
NM

Noncontrolling interest

(0.2
)
(1.0
)
0.8

-84
%
Net increase in net assets resulting from operations attributable to common stock

$
42.4

$
28.8

$
13.6

47
%

Nine Months Ended September 30,

Net Change

2011

2010

Amount

%

(dollars in millions)

Net investment income

$
27.4

$
12.7

$
14.7

115
%
Share-based compensation expense

1.5

1.0

0.5

40
%
Distributable net investment income (a)

28.9

13.7

15.2

109
%
Net realized gain (loss) from investments

1.7

(2.9
)
4.6

159
%
Distributable net realized income (a)

$
30.6

$
10.8

$
19.8

182
%

Distributable net investment income per share -

Basic and diluted (a) (b)

$
1.29

$
0.88

$
0.41

47
%
Distributable net realized income per share -

Basic and diluted (a) (b)

$
1.37

$
0.69

$
0.68

98
%

~~(a)~~Distributable net investment income and distributable net realized income are net investment income and net realized income, respectively, as determined in accordance with U.S. GAAP, excluding the impact of share-based compensation expense which is non-cash in nature. Main Street believes presenting distributable net investment income and distributable net realized income, and related per share amounts, are useful and appropriate supplemental disclosures for analyzing its financial performance since share-based compensation does not require settlement in cash. However, distributable net investment income and distributable net realized income are non- U.S. GAAP measures and should not be considered as a replacement to net investment income, net realized income, and other earnings measures presented in accordance with U.S. GAAP. Instead, distributable net investment income and distributable net realized income should be reviewed only in connection with such U.S. GAAP measures in analyzing Main Street’s financial performance. A reconciliation of net investment income and net realized income in accordance with U.S. GAAP to distributable net investment income and distributable net realized income is presented in the table above.

~~(b)Per share amounts exclude the earnings attributable to the remaining noncontrolling equity interests in MSC II not owned by Main Street.~~

~~Investment Income~~

For the nine months ended September 30, 2011, total investment income was $46.6 million, an 88% increase over the $24.8 million in the corresponding period of 2010. This comparable period increase was principally attributable to (i) a $17.1 million increase in interest income from higher average levels of both portfolio debt investments and interest-bearing marketable securities and idle funds investments, (ii) a $3.4 million increase in dividend income from portfolio equity investments, and (iii) a $1.2 million increase in fee income due to higher levels of transaction activity. The increase in investment income included $1.5 million of income associated with higher levels of prepayment and repricing activity for certain debt investments and a $0.3 million special dividend from one portfolio equity investment.

~~Expenses~~

For the nine months ended September 30, 2011, total expenses increased by approximately $7.1 million to $19.2 million from $12.1 million in the corresponding period of 2010. This comparable period increase in expenses was principally attributable to (i) higher interest expense of $3.5 million as a result of the issuance of an additional $40 million in SBIC debentures subsequent to the

~~Table of Contents~~

third quarter of 2010 and increased borrowing activity under the Credit Facility, (ii) higher share-based compensation expense of $0.5 million related to non-cash amortization for restricted share grants, and (iii) higher compensation and other operating expenses of $3.2 million related to the significant increase in investment income and portfolio investments compared to the corresponding period of 2010.

~~Distributable Net Investment Income~~

Distributable net investment income for the nine months ended September 30, 2011 increased 109% to $28.9 million, or $1.29 per share, compared with $13.7 million, or $0.88 per share, in the corresponding period of 2010.2011. The increase in distributable net investment income was primarily due to the higher level of total investment income partially offset by higher interest and other operating expenses, due to the changes discussed above. Distributable net investment income on a per share basis for the first ~~nine months~~quarter of ~~2011~~2012 reflects (i) approximately ~~$0.08~~$0.07 per share of investment income attributable to non-recurring investment income associated with ~~the prepayment and repricing activity discussed above,~~two LMM portfolio investments, (ii) approximately $0.01 per share of investment income ~~due~~attributable to ~~the special dividend discussed above,~~higher levels of accelerated prepayment activity for certain Middle Market portfolio debt investments and marketable securities investments and (iii) a greater number of average shares outstanding compared to the corresponding period in ~~2010~~2011 primarily due to the March 2011 and ~~August 2010~~October 2011 follow-on stock offerings.

Net Investment Income

Net investment income for the ~~nine~~three months ended ~~September 30, 2011~~March 31, 2012 was ~~$27.4~~$12.9 million, or a ~~115%~~74% increase, compared to net investment income of ~~$12.7~~$7.4 million during the corresponding period of ~~2010.~~2011. The increase in net investment income was principally attributable to the increase in total investment income partially offset by the higher interest and other operating expenses as discussed above.

Distributable Net Realized Income

Distributable net realized income increased to ~~$30.6~~$21.6 million, or ~~$1.37~~$0.80 per share, in the first ~~nine months~~quarter of ~~2011~~2012 compared with distributable net realized income of ~~$10.8~~$7.8 million, or ~~$0.69~~$0.40 per share, in the corresponding period of ~~2010. The~~2011. This increase was ~~primarily attributable~~due to (i) the higher level of total distributable net investment income ~~as well as~~in the first quarter of 2012 and (ii) the higher level of total net realized gain from investments ~~in 2011~~during the first quarter of 2012 compared to ~~the net realized loss from investments in~~ the corresponding period of ~~2010.~~2011. The ~~$1.7~~$8.2 million net realized gain from investments during the first ~~nine months~~quarter of ~~2011~~2012 was primarily attributable to (i) a $9.2 million realized gain recognized on the partial exit of equity investments in one ~~partial~~LMM portfolio company, (ii) a realized gain of $1.7 million recognized on the full exit of equity investments in one LMM portfolio company and (iii) $1.0 million of net realized gains related to Middle Market and marketable securities investments, partially offset by (i) a $1.8 million realized loss on the full exit of equity investments in one LMM portfolio company and (ii) a $2.0 million realized loss on a debt investment related to the full exit of an LMM portfolio company equity investment and realized gains related to privately placed and marketable securities investments. The $2.9 million net realized loss during the first nine months of 2010 was primarily attributable to $5.9 million of realized loss from our debt and equity investments in two portfolio companies, partially offset by (i) $2.3 million of realized gain on two partial exits and one full exit of portfolio company equity investments and (ii) $0.7 million of realized gain related to private placement, marketable securities, and idle funds investments.company.

Net Realized Income

The higher level of net investment income ~~and~~in addition to the change ~~from net realized loss to~~in net realized gain from investments during the ~~nine~~three months ended ~~September 30, 2011~~March 31, 2012 resulted in a ~~$19.3~~$13.7 million increase in net realized income compared with the corresponding period of ~~2010.~~2011.

Net Increase in Net Assets Resulting from Operations Attributable to Common Stock

For the ~~nine~~three months ended ~~September 30, 2011,~~March 31, 2012, the ~~$16.8~~$4.7 million net change in unrealized appreciation was principally attributable to (i) unrealized appreciation on 19 LMM portfolio investments totaling $9.6 million, partially offset by unrealized depreciation on 5 LMM portfolio investments totaling $1.7 million, (ii) $3.7 million of net unrealized appreciation on the Middle Market investment portfolio, (iii) accounting reversals of net unrealized appreciation related to the net realized gains recognized ~~for~~during the first ~~nine months~~quarter of ~~2011~~2012 in the amounts of ~~$1.6~~$7.0 million for portfolio investments and ~~$0.4~~$0.1 million for marketable securities and idle funds investments, ~~(ii) unrealized appreciation on 36 portfolio investments totaling $43.3 million, partially offset by unrealized depreciation on 25 portfolio investments totaling $15.5 million, (iii) $3.2~~(iv) $0.3 million of net unrealized ~~depreciation on investments~~appreciation attributable to SBIC debentures held by MSC II, and (v) $0.1 million in ~~marketable securities and idle funds investments and, (iv) $5.7 million of net~~ unrealized depreciation attributable to our ~~SBIC debentures.~~investment in the affiliated Investment Manager. The noncontrolling interest of $0.1 million recognized during the first quarter of 2012 reflects the pro rata portion of the net increase in net assets resulting from operations for MSCII attributable to the equity interests in MSCII that were not owned by MSCC prior to MSCC’s completion of the Final MSC II Exchange. For the ~~nine months ended September 30, 2011,~~first quarter of 2012, we also recognized a net income tax provision of ~~$3.3~~$1.9 million principally related to deferred taxes on net unrealized appreciation of ~~certain portfolio~~equity investments held in our ~~Taxable Subsidiaries. The noncontrolling interest~~taxable subsidiaries and an accrual for excise taxes on estimated spillover taxable income as of ~~$0.2 million recognized during the first nine months~~March 31, 2012.

Table of ~~2011 reflects the pro rata portion of MSC II net earnings attributable to the equity interests in MSC II not owned by Main Street.~~Contents

As a result of these events, our net increase in net assets resulting from operations attributable to common stock during the ~~nine~~three months ended ~~September 30, 2011~~March 31, 2012 was ~~$42.4~~$23.8 million, or ~~$1.94~~$0.89 per share, compared with a net increase in net assets resulting from operations attributable to common stock of ~~$28.8~~$10.3 million, or ~~$1.87~~$0.54 per share, in the corresponding period of ~~2010.~~

~~Table of Contents~~2011.

Liquidity and Capital Resources

Cash Flows

For the ~~nine~~three months ended ~~September 30,~~March 31, 2012, we experienced a net increase in cash and cash equivalents in the amount of $46.3 million. During that period, we generated $1.9 million of cash from our operating activities, primarily from (i) distributable net investment income, partially offset by (i) reimbursements to the Investment Manager to cover operating expenses under a support services agreement between MSCC and the Investment Manager, (ii) accretion of unearned income, and (iii) interest payments made on our SBIC debentures and Credit Facility. We generated $20.9 million in net cash from investing activities, principally including (i) $96.1 million in cash proceeds from the repayment of portfolio debt investments and from the exit of portfolio equity investments and (ii) $18.8 million of cash proceeds from the sale of marketable securities and idle funds investments, partially offset by (i) the funding of $88.4 million for new portfolio company investments and the funding of $5.6 million for marketable securities and idle funds investments. During the first three months of 2012, $23.5 million in cash was provided by financing activities, which principally consisted of $31.0 million in net cash proceeds from the Credit Facility, partially offset by $8.2 million in cash dividends paid to stockholders.

For the three months ended March 31, 2011, we experienced a net increase in cash and cash equivalents in the amount of ~~$2.8~~$6.7 million. During that period, we generated $23.0 million of cash from our operating activities, primarily from distributable net investment income partially offset by accretion of unearned income, net payment-in-kind interest income, increases in interest receivable and other assets, and semi-annual interest payments made on our SBIC debentures. We used $183.7 million in net cash from investing activities for the nine months ended September 30, 2011, principally including the funding of $152.5 million for LMM and private placement portfolio investments and the funding of $133.7 million for marketable securities and idle funds investments, partially offset by (i) $57.9 million of cash proceeds from the sale of marketable securities and idle funds investments and (ii) $43.8 million in cash proceeds from the repayment of LMM and private placement portfolio debt investments. For the first nine months of 2011, $163.5 million in cash was provided by financing activities, which principally consisted of (i) $70.3 million in net cash proceeds from a public stock offering in March 2011, (ii) $40.0 million in cash proceeds from the issuance of SBIC debentures, and (iii) $75.0 million in net borrowings under the Credit Facility, partially offset by (i) $19.4 million in cash dividends paid to stockholders and (ii) $1.7 million in deferred loan costs paid in connection with the Credit Facility and the issuance of additional SBIC debentures.

~~For the nine months ended September 30, 2010, we experienced a net increase in cash and cash equivalents in the amount of $27.7 million. During that period, we generated $10.1~~$4.1 million of cash from our operating activities, primarily from distributable net investment income partially offset by accretion of unearned income, increases in interest receivable, and semi-annual interest payments made on our SBIC debentures. We used ~~$99.4~~$67.1 million in net cash from investing activities for the ~~nine~~three months ended ~~September 30, 2010,~~March 31, 2011, principally including the funding of ~~$93.1~~$58.3 million for ~~LMM and private placement~~new portfolio company investments and the funding of ~~$62.0~~$25.0 million for marketable securities and idle funds investments, partially offset by (i) ~~$3.2 million from the full and partial exits of equity investments (ii) $29.2~~$13.2 million of cash proceeds from the repayment of portfolio debt investments and (ii) $3.0 million from the sale of marketable securities and idle funds ~~investments, (iii) $2.5 million in cash acquired as part of the Exchange Offer, and (iv) $20.9 million in cash proceeds from the repayment of LMM and private placement portfolio debt~~ investments. For the first ~~nine~~three months of ~~2010, $116.9~~2011, $69.7 million in cash was provided by financing activities, which principally consisted of (i) ~~$85.9~~$70.3 million in net cash proceeds from a public stock ~~offerings~~offering in ~~January 2010~~March 2011 and ~~August 2010,~~ (ii) ~~$45.0~~$30.0 million in cash proceeds from the issuance of SBIC debentures, partially offset by ~~$11.5~~(i) $24.0 million in net repayments under the Credit Facility, (ii) $4.7 million in cash dividends paid to stockholders, and ~~$2.1~~(iii) $1.1 million in deferred loan costs paid in connection with the ~~Credit Facility~~credit facility and the issuance of additional SBIC debentures.

Capital Resources

As of ~~September 30, 2011,~~March 31, 2012, we had ~~$25.1~~$89.0 million in cash and cash equivalents and ~~$134.7~~$14.3 million in marketable securities and idle funds investments, and our net asset value totaled ~~$336.5~~$425.5 million, or ~~$14.49~~$15.72 per share. In ~~October 2011, we completed a follow-on public stock offering in which we sold 3,450,000 shares~~the second quarter of common stock, including the underwriters’ full exercise of the over-allotment option, at a price to the public of $17.50 per share (or approximately 123% of the then latest reported Net Asset Value per share), resulting in total net proceeds of approximately $57.5 million, after deducting underwriters’ commissions and estimated offering costs.

~~In June 2011,~~2012, we expanded ~~the Credit Facility~~our credit facility (the “Credit Facility”) from ~~$100~~$235 million to ~~$155 million to provide additional liquidity in support of future investment and operational activities.~~$277.5 million. The ~~$55~~$42.5 million increase in total commitments included commitment increases by ~~all six~~three lenders currently participating in the Credit Facility. ~~In addition to the $55 million increase in total commitments, we extended the maturity of the Credit Facility by one year to September 2014.~~ The amended Credit Facility ~~also~~ contains an accordion feature that allows for a further increase in total commitments under the facility up to ~~$200~~$350 million of total commitments from new and existing lenders on the same terms and conditions as the existing ~~lender~~ commitments. Borrowings under the Credit Facility bear interest, subject to our election, on a per annum basis equal to (i) the applicable LIBOR rate plus 2.50% or (ii) the applicable base rate plus 1.50%. We pay unused commitment fees of 0.375% per annum on the average unused lender commitments under the Credit Facility. The Credit Facility is secured by a first lien on the assets of MSCC and its subsidiaries, excluding the assets of the Funds. The Credit Facility contains certain affirmative and negative covenants, including but not limited to: (i) maintaining an interest coverage ratio of at least 2.0 to 1.0, (ii) maintaining an asset coverage ratio of at least 2.5 to 1.0, and (iii) maintaining a minimum tangible net worth. At ~~September 30, 2011,~~March 31, 2012, we had ~~$114.0~~$138.0 million in borrowings outstanding under the Credit Facility, bearing interest at an interest rate of ~~2.72%~~2.8%. As of ~~September 30, 2011,~~March 31, 2012, we were in compliance with all financial covenants of the Credit Facility.

In October 2011, we completed a follow-on public stock offering in which we sold 3,450,000 shares of common stock, including the underwriters’ full exercise of the over-allotment option, at a price to the public of $17.50 per share (or approximately 123% of the then latest reported Net Asset Value per share), resulting in total net proceeds of approximately $57.5 million, after deducting underwriters’ commissions and offering costs. In March 2011, we completed a follow-on public stock offering in which we sold 4,025,000 shares of common stock, including the underwriters’ full exercise of the over-allotment option, at a price to the public of $18.35 per share (or approximately 141% of the then latest reported Net Asset Value per share), resulting in total net proceeds of approximately $70.3 million, after deducting underwriters’ commissions and offering costs.

Table of Contents

Due to each of the Funds’ status as a licensed SBIC, we have the ability to issue, through the Funds, debentures guaranteed by the SBA at favorable interest rates. Under the regulations applicable to SBIC funds, an SBIC can have outstanding debentures guaranteed by the SBA generally in an amount up to twice its regulatory capital, which effectively approximates the amount of its

~~Table of Contents~~

equity capital. Debentures guaranteed by the SBA have fixed interest rates that equal prevailing 10-year Treasury Note rates plus a market spread and have a maturity of ten years with interest payable semi-annually. The principal amount of the debentures is not required to be paid before maturity but may be pre-paid at any time. Debentures issued prior to September 2006 were subject to pre-payment penalties during their first five years. Those pre-payment penalties no longer apply to debentures issued after September 1, 2006. On ~~September 30, 2011,~~March 31, 2012, we, through the Funds, had $220 million of outstanding indebtedness guaranteed by the SBA, which carried a weighted average annual fixed interest rate of approximately 5.1%. The first maturity related to the SBIC debentures does not occur until 2013, and the remaining weighted average duration is approximately ~~6.9~~6.4 years as of ~~September 30, 2011.~~March 31, 2012.

We anticipate that we will continue to fund our investment activities through existing cash and cash equivalents, the liquidation of marketable securities and idle funds investments, and a combination of future debt and equity capital. Our primary uses of funds will be investments in portfolio companies, operating expenses and cash distributions to holders of our common stock.

We periodically invest excess cash balances into marketable securities and idle funds investments. The primary investment objective of marketable securities and idle funds investments is to generate incremental cash returns on excess cash balances prior to utilizing those funds for investment in our LMM and ~~private placement~~Middle Market portfolio investment strategy. Marketable securities and idle funds investments generally consist of debt investments, independently rated debt investments, certificates of deposit with financial institutions, and diversified bond funds. The composition of marketable securities and idle funds investments will vary in a given period based upon, among other things, changes in market conditions, the underlying fundamentals in our marketable securities and idle funds investments, our outlook regarding future LMM and ~~private placement~~Middle Market portfolio investment needs, and any regulatory requirements applicable to Main Street.

If our common stock trades below our net asset value per share, we will generally not be able to issue additional common stock at the market price unless our stockholders approve such a sale and our Board of Directors makes certain determinations. A proposal, approved by our stockholders at our June 2011 annual meeting of stockholders, authorizes us to sell shares of our common stock below the then current net asset value per share of our common stock in one or more offerings for a period of one year ending on June ~~15,~~14, 2012. We would need similar future approval from our stockholders to issue shares below the then current net asset value per share any time after the expiration of the current approval. We are seeking such approval for the next year at our 2012 annual stockholders meeting to be held on June 14, 2012.

In order to satisfy the Code requirements applicable to a RIC, we intend to distribute to our stockholders substantially all of our taxable income, but we may also elect to periodically spillover certain excess undistributed taxable income from one tax year into the next tax year. In addition, as a BDC, we generally are required to meet a coverage ratio of total assets to total senior securities, which include borrowings and any preferred stock we may issue in the future, of at least 200%. This requirement limits the amount that we may borrow. In January 2008, we received an exemptive ~~relief~~order from the SEC ~~that permits us~~ to exclude SBA-guaranteed debt securities issued by ~~our~~MSMF and any other wholly owned ~~SBIC subsidiary, MSMF,~~subsidiaries of ours which operate as SBICs from ~~our~~the asset coverage ~~ratio,~~requirements of the 1940 Act as applicable to Main Street, which, in turn, enables us to fund more investments with debt capital. We expect to obtain similar relief from the SEC with respect to SBIC debt securities issued by MSC II, including the $95 million of currently outstanding debt related to its participation in the SBIC program.

Although we have been able to secure access to additional liquidity, including ~~our~~ recent public stock offerings, our expanded ~~$155~~$277.5 million Credit Facility, and the increase in available leverage through the SBIC program, ~~as part of the Stimulus Bill,~~ there is no assurance that debt or equity capital will be available to us in the future on favorable terms, or at all.

Recently Issued Accounting Standards

In May 2011, the FASB issued Accounting Standards Update (“ASU”) 2011-04, Fair Value Measurements (Topic 820), Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”). ASU 2011-04 results in common fair value measurement and disclosure requirements in U.S. GAAP and IFRSs. ASU 2011-04 is effective for interim and annual reporting periods beginning after December 15, 2011. The adoption of ASU 2011-04 isdid not ~~expected to~~ have a significant impact on Main Street’s financial condition and results of operations.

~~Table of Contents~~

the criteria to be considered a troubled debt restructuring, both for purposes of recording an impairment loss and for disclosure of troubled debt restructurings. In evaluating whether a restructuring constitutes a troubled debt restructuring, a creditor must separately conclude that both of the following exist: (a) the restructuring constitutes a concession; and (b) the debtor is experiencing financial

Table of Contents

difficulties. ASU 2011-02 provides guidance to clarify whether the creditor has granted a concession and whether a debtor is experiencing financial difficulties. The new guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructurings occurring on or after the beginning of the fiscal year of adoption. The adoption of ASU 2011-02 did not have a significant impact on Main Street’s financial condition and results of operations.

Inflation

Inflation has not had a significant effect on our results of operations in any of the reporting periods presented herein. However, our portfolio companies have experienced, and may in the future experience, the impacts of inflation on their operating results, including periodic escalations in their costs for raw materials and required energy consumption.

Off-Balance Sheet Arrangements

We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. These instruments include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the balance sheet. At ~~September 30, 2011,~~March 31, 2012, we had ~~seven~~a total of $26.0 million in outstanding commitments comprised of (i) five commitments to fund ~~unused~~ revolving loans ~~for up to $17.5 million in total.~~that had not been fully drawn and (ii) two capital commitments that had not been fully called.

Contractual Obligations

As of ~~September 30, 2011,~~March 31, 2012, our future fixed commitments for cash payments in connection with our SBIC debentures for each of the next five years and thereafter are as follows:

													2017 and
	Total		2012		2013		2014		2015		2016		thereafter														2017 and
	(dollars in thousands)														Total		2012		2013 (1)		2014		2015		2016		thereafter
															(dollars in thousands)
SBIC debentures	$	220,000	$	—	$	4,000	$	18,000	$	23,100	$	5,000	$	169,900	$	220,000	$	—	$	4,000	$	18,000	$	23,100	$	5,000	$	169,900
Interest due on SBIC debentures	74,796		11,273		11,270		10,963		9,877		8,736		22,677		67,715		5,617		11,143		10,836		9,480		8,608		22,031
Total	$	294,796	$	11,273	$	15,270	$	28,963	$	32,977	$	13,736	$	192,577	$	287,715	$	5,617	$	15,143	$	28,836	$	32,580	$	13,608	$	191,931

(1)Main Street has received a commitment from the SBA that will allow it to revolve the first $4.0 million debenture due in September 2013.

As of ~~September 30, 2011,~~March 31, 2012, we had ~~$114.0~~$138.0 million in borrowings outstanding under our ~~$155~~$235 million Credit Facility. Unless extended, the Credit Facility will mature in September 2014.

~~MSC II is obligated to make payments under an investment advisory agreement with~~ The Credit Facility contains two, one year extension options which could extend the Investment Manager, MSCC’s wholly owned subsidiary. The payments due under the investment advisory agreement were fixed for the first five years at $3.3 million per year, paid quarterly, until September 30, 2010. Subsequentmaturity to September ~~30, 2010, under the investment advisory agreement, MSC II is obligated to pay a 2% annualized management fee based upon MSC II assets under management.~~2016.

MSCC is obligated to make payments under a support services agreement with the Investment Manager. The Investment Manager is reimbursed for its excess operating expenses associated with providing investment management and other services to MSCC and its subsidiaries, as well as ~~MSC II and~~ third parties. Each quarter, as part of the support services agreement, MSCC makes payments to cover all cash operating expenses incurred by the Investment Manager, less the recurring management fees that the Investment Manager receives from MSC II pursuant to a long-term investment advisory services agreement and any other fees received from third parties for providing external services. For the ~~nine~~three months ended ~~September 30,~~March 31, 2012 and 2011, ~~and 2010,~~ the expenses reimbursed by MSCC to the Investment Manager and management fees paid by MSC II were ~~$6.3~~$2.7 million and ~~$3.6~~$2.1 million, respectively.

~~Table of Contents~~

Related Party Transactions

As discussed further in Note D to the accompanying consolidated financial statements, subsequent to the completion of the Formation Transactions, the Investment Manager is a wholly owned portfolio company of MSCC. At ~~September 30, 2011,~~March 31, 2012, the Investment Manager had a receivable of ~~$3.1~~$1.5 million due from MSCC related to operating expenses incurred by the Investment Manager required to support Main Street’s business.

Recent Developments

~~In October 2011, Main Street completed a public stock offering of 3,450,000 shares of common stock, including~~During May 2012, we expanded the ~~underwriters’ full exercise of the over-allotment option, at a price~~Credit Facility from $235 million to ~~the public of $17.50 per share, resulting~~$277.5 million. The $42.5 million increase in total ~~net proceeds~~commitments included commitment increases by three lenders currently participating in the Credit Facility. The amended Credit Facility contains an accordion feature that allows for a further increase in total commitments under the facility up to $350 million of ~~approximately $57.5 million, after deducting underwriters’ commissions~~

Table of Contents

total commitments from new and ~~estimated offering costs.~~existing lenders on the same terms and conditions as the existing commitments. The increase in total commitments provides us access to additional financing capacity in support of our future investment and operational activities.

During May 2012, we declared monthly dividends of $0.145 per share for each of July, August and September 2012. These monthly dividends equal a total of $0.435 per share for the third quarter of 2012. The third quarter 2012 dividends represent an 11.5% increase from the dividends declared for the third quarter 2011 and a 3.6% increase compared to the second quarter of 2012. Including the dividends declared for the third quarter of 2012, we will have paid $7.58 per share in cumulative dividends since our Board of Directors increased its size from six to seven directors and appointed J. Kevin Griffin as a director to fill the vacancy created by the increase until our 2012 annual meeting of stockholders. Mr. Griffin was also appointed to serve on the Audit Committee of the Board of Directors.October 2007 initial public offering.

During ~~August 2011, the Board~~April 2012, we completed an LMM portfolio investment in Bridge Capital Solutions Corporation (“Bridge Capital”). The investment consists of Directors appointed Dwayne L. Hyzak as Chief Financial Officer and Senior Managing Director, Curtis L. Hartman as Chief Credit Officer and Senior Managing Director, and David L. Magdol as Chief Investment Officer and Senior Managing Director of Main Street. Each of these executives had been$5.0 million in first lien, senior secured debt with equity warrant participation. Headquartered on Long Island in Hauppauge, New York, Bridge Capital is a ~~Senior Vice President of Main Street since 2007 and served as a managing director or in other executive roles~~financial services firm that provides accelerated cash flow solutions to small businesses. The proceeds of our ~~predecessor funds since at least 2002. Each~~investment were used to refinance certain debt obligations of these executives assumed his new executive role while also maintaining his current portfolio investment responsibilities. In his new role as Chief Credit Officer, Mr. Hartman chairs our Credit Committee, which is responsibleBridge Capital and to provide additional liquidity to finance certain growth initiatives and for oversight of the investment process with respect to our private placement and marketable securities investment portfolio. In his new role as Chief Investment Officer, Mr. Magdol chairs our Investment Committee, which is responsible for oversight of the investment process with respect to our LMM investment portfolio. Vincent D. Foster, our Chairman and Chief Executive Officer, and Todd A. Reppert, our President, are also members of both the Credit Committee and the Investment Committee. In connection with Mr. Hyzak’s appointment as Chief Financial Officer, he assumed responsibilities as our principal financial officer. Mr. Reppert, who was previously the Chief Financial Officer of Main Street, retained the title of President and the ongoing responsibilities over operational and administrative aspects of our business.general working capital purposes.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are subject to financial market risks, including changes in interest rates. Changes in interest rates may affect both our cost of funding and our interest income from portfolio investments, marketable securities, and idle funds investments. Our risk management systems and procedures are designed to identify and analyze our risk, to set appropriate policies and limits and to continually monitor these risks. Our investment income will be affected by changes in various interest rates, including LIBOR and prime rates, to the extent of any debt investments that include floating interest rates. The majority of our debt investments are made with either fixed interest rates or floating rates that are subject to contractual minimum interest rates for the term of the investment. ~~However, as~~As of ~~September 30, 2011,~~March 31, 2012, approximately ~~36%~~52% of our debt investment portfolio (at cost) bore interest at floating rates with ~~96%~~98% of those floating-rate debt investments (at cost) subject to contractual minimum interest rates. ~~In addition as~~As of ~~September 30, 2011, approximately 86%~~March 31, 2012, none of our marketable securities ~~debt~~and idle funds investments ~~(at cost)~~ bore interest at floating ~~rates with 100% of those floating-rate debt investments (at cost) subject to contractual minimum interest~~ rates. Our interest expense will be affected by changes in the published LIBOR rate in connection with our Credit Facility; however, the long term interest rates on our outstanding SBIC debentures, which comprise the majority of our outstanding debt, are fixed for the 10-year life of such debt. As of ~~September 30, 2011,~~March 31, 2012, we had not entered into any interest rate hedging arrangements. At ~~September 30, 2011,~~March 31, 2012, based on our applicable levels of floating-rate debt investments, a 1% change in interest rates would not have a material effect on our level of interest income from debt investments.

Item 4. Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chairman and Chief Executive Officer, our President, our Chief Financial Officer, our Chief Compliance Officer and our Chief Accounting Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 of the Securities Exchange Act of 1934). Based on that evaluation, our Chairman and Chief Executive Officer, our President, our Chief Financial Officer, our Chief Compliance Officer and our Chief Accounting Officer, have concluded that our current disclosure controls and procedures are effective in timely alerting them of material information relating to us that is required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934. There have been no changes in our internal control over financial reporting that occurred during the quarter ended ~~September 30, 2011~~March 31, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

We may, from time to time, be involved in litigation arising out of our operations in the normal course of business or otherwise. Furthermore, third parties may try to seek to impose liability on us in connection with the activities of our portfolio companies. While the outcome of any current legal proceedings cannot at this time be predicted with certainty, we do not expect any current matters will materially affect our financial condition or results of operations; however, there can be no assurance whether any pending legal proceedings will have a material adverse effect on our financial condition or results of operations in any future reporting period.

Item 1A. Risk Factors

There were no material changes from the risk factors as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2010,~~2011, that we filed with the SEC on March ~~11, 2011.~~9, 2012.

6568

Table of Contents

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

During the three months ended ~~September 30, 2011,~~March 31, 2012, we issued ~~67,815~~117,466 shares of our common stock under our dividend reinvestment plan pursuant to an exemption from the registration requirements of the Securities Act of 1933. The aggregate value for the shares of common stock issued during the three months ended ~~September 30, 2011,~~March 31, 2012, under the dividend reinvestment plan was approximately ~~$1.3~~$2.7 million.

During the three months ended March 31, 2012, we issued a total of 229,634 unregistered shares of our common stock in connection with the Final MSC II Exchange pursuant to the exemption from registration provided by Section 4(2) under the Securities Act of 1933.

Table of Contents

Item 6. Exhibits

Listed below are the exhibits which are filed as part of this report (according to the number assigned to them in Item 601 of Regulation S-K):

Exhibit Number		Description of Exhibit

~~10.1~~10.1*		~~Second~~Fourth Amendment to Amended and Restated Credit Agreement dated ~~July 29, 2011.~~May 2, 2012 (previously filed as Exhibit 10.1 to Main Street Capital Corporation's Current Report on Form 8-K filed May 3, 2012 (File No. 1-33723)).

31.1		Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.2		Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

32.1		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

32.2		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

*	Exhibit previously filed with the Securities and Exchange Commission, as indicated, and incorporated herein by reference.

6670

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Main Street Capital Corporation

Date: ~~November~~May 4, ~~2011~~2012	/s/ Vincent D. Foster
	Vincent D. Foster
	Chairman and Chief Executive Officer (principal executive officer)

Date: ~~November~~May 4, ~~2011~~2012	/s/ Todd A. Reppert
	Todd A. Reppert
	President

Date: ~~November~~May 4, ~~2011~~2012	/s/ Dwayne L. Hyzak
	Dwayne L. Hyzak
	Chief Financial Officer and Senior Managing Director (principal financial officer)

Date: ~~November~~May 4, ~~2011~~2012	/s/ Michael S. Galvan
	Michael S. Galvan
	Vice President and Chief Accounting Officer (principal accounting officer)

6771

Table of Contents

EXHIBIT INDEX

Exhibit Number		Description of Exhibit

~~10.1~~		~~Second Amendment to Credit Agreement dated July 29, 2011.~~

31.1		Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.2		Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

32.1		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

32.2		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

6872

Portfolio Company/Type of Investment (1) (2)	Industry	Principal (6)	Cost (6)	Fair Value

Control Investments (3)
Café Brazil, LLC	Casual Restaurant Group
12% Secured Debt (Maturity - April 20, 2013)		2,000,000	1,997,439	2,000,000
Member Units (Fully diluted 41.0%) (7)			41,837	2,240,000
			2,039,276	4,240,000

California Healthcare Medical Billing, Inc.	Healthcare Billing and Records Management
12% Secured Debt (Maturity - October 17, 2013)		7,303,000	6,937,251	6,985,748
Warrants (Fully diluted 20.4%)			1,193,333	3,380,333
Common Stock (Fully diluted 9.7%)			1,176,667	1,390,000
			9,307,251	11,756,081

CBT Nuggets, LLC	Produces and Sells IT Certification Training Videos
10% Secured Debt (Maturity - March 31, 2012)		775,000	775,000	775,000
14% Secured Debt (Maturity - December 31, 2013)		2,800,000	2,787,551	2,792,180
Member Units (Fully diluted 40.8%) (7)			1,299,520	3,450,000
			4,862,071	7,017,180

Ceres Management, LLC (Lamb’s)	Aftermarket Automotive Services Chain
14% Secured Debt (Maturity - May 31, 2013)		4,000,000	3,964,568	3,964,568
9.5% Secured Debt (Lamb’s Real Estate Investment I, LLC) (Maturity - August 31, 2014)		1,225,000	1,225,000	1,225,000
Class B Member Units (15% cumulative compounding quarterly) (Non-voting) (7)			1,508,611	1,508,611
Member Units (Fully diluted 70%)			1,813,333	1,100,000
Member Units (Lamb’s Real Estate Investment I, LLC) (Fully diluted 100%) (7)			625,000	625,000
			9,136,512	8,423,179

Condit Exhibits, LLC	Tradeshow Exhibits/Custom Displays
9% current / 9% PIK Secured Debt (Maturity - July 1, 2013)		4,660,948	4,619,659	4,619,659
Warrants (Fully diluted 47.9%)			320,000	50,000
			4,939,659	4,669,659

Portfolio Company/Type of Investment (1) (2)	Industry	Principal (6)	Cost (6)	Fair Value

Affiliate Investments (4)

American Sensor Technologies, Inc.	Manufacturer of Commercial/Industrial Sensors
9% Current / 2% PIK Secured Debt (Maturity - May 31, 2012)		3,536,182	3,514,113	3,514,113
Warrants (Fully diluted 19.6%)			49,990	1,830,000
			3,564,103	5,344,113

Audio Messaging Solutions, LLC	Audio Messaging Services
12% Secured Debt (Maturity - May 8, 2014)		7,700,000	7,356,395	7,426,299
Warrants (Fully diluted 8.4%)			468,373	1,280,000
			7,824,768	8,706,299

Compact Power Equipment Centers, LLC	Light to Medium Duty Equipment Rental
6% Current / 6% PIK Secured Debt (Maturity - September 23, 2014)		3,153,971	3,120,950	3,120,950
Member Units (Fully diluted 11.5%)			1,147	1,147
			3,122,097	3,122,097

DrillingInfo, Inc.	Information Services for the Oil and Gas Industry
12% Secured Debt (Maturity - November 20, 2014)		8,000,000	6,832,370	7,770,000
Warrants (Fully diluted 5.0%)			1,250,000	4,010,000
Common Stock (Fully diluted 2.1%)			1,085,325	1,710,325
			9,167,695	13,490,325

East Teak Fine Hardwoods, Inc.	Hardwood Products
Common Stock (Fully diluted 5.0%)			480,318	330,000

Houston Plating & Coatings, LLC	Plating & Industrial Coating Services
Prime Plus 2%, Current Coupon 5.25%, Debt (Maturity - July 18, 2013)		300,000	300,000	300,000
Member Units (Fully diluted 11.1%) (7)			335,000	3,025,000
			635,000	3,325,000

IRTH Holdings, LLC	Utility Technology Services
12% Secured Debt (Maturity - December 29, 2015)		6,000,000	5,891,126	5,891,126
Member Units (Fully diluted 22.3%)			850,000	850,000
			6,741,126	6,741,126

Portfolio Company/Type of Investment (1) (2)	Industry	Principal (6)	Cost (6)	Fair Value

Non-Control/Non-Affiliate Investments (5)

Affinity Videonet, Inc.	Videoconferencing Services
9% Secured Debt (Maturity - December 31, 2012)		500,000	490,000	490,000
13% Secured Debt (Maturity - December 31, 2015)		2,000,000	1,897,500	1,897,500
13% Current / 1% PIK Secured Debt (Maturity - December 31, 2015)		2,000,000	1,995,652	1,995,652
Warrants (Fully diluted 2.5%)			62,500	62,500
			4,445,652	4,445,652
Alon Refining Krotz Springs, Inc. (9)	Petroleum Products/Refining
13.5% Secured Debt (Maturity - October 15, 2014)		4,000,000	3,832,366	3,900,000

Bourland & Leverich Supply Co., LLC (9)	Distributor of Oil & Gas Tubular Goods
LIBOR Plus 8.0%, Current Coupon 11.25%, Secured Debt (Maturity - August 24, 2015) (8)		4,443,750	4,236,574	4,554,847

Brand Connections, LLC	Venue-Based Marketing and Media
14% Secured Debt (Maturity - April 30, 2015)		7,312,500	7,151,303	7,151,303

Chef’s Warehouse (9)	Specialty Food Distributor
LIBOR Plus 9.0%, Current Coupon 11%, Secured Debt (Maturity - April 24, 2014) (8)		8,137,083	7,907,586	8,219,225

Fairway Group Acquisition (9)	Retail Grocery
LIBOR Plus 9.5%, Current Coupon 12%, Secured Debt (Maturity - October 1, 2014) (8)		4,950,008	4,827,316	4,968,818

Full Spectrum Holdings LLC (9)	Professional Services
LIBOR Plus 3.0%, Current Coupon 10.75%, Secured Debt (Maturity - December 12, 2012) (8)		1,523,341	1,301,663	1,301,663
Warrants (Fully diluted 0.28%)			412,523	412,523
			1,714,186	1,714,186

*Global TelLink Corporation (9)**	Communications Technology
LIBOR Plus 11.25%, Current Coupon 13%, Secured Debt (Maturity - May 10, 2017) (8)		3,000,000	2,941,728	2,948,271

Hayden Acquisition, LLC	Manufacturer of Utility Structures
8% Secured Debt (Maturity - January 1, 2011)		1,800,000	1,781,303	250,000

	As of September 30,		As of December 31,
	2011		2010
	(Unaudited)

Cash	$	304,529	$	191,645
Accounts receivable	61,483		75,501
Accounts receivable - MSCC	3,105,001		15,124
Intangible asset (net of accumulated amortization of $4,087,060 and $3,209,740 as of September 30, 2011 and December 31, 2010, respectively)	13,912,940		14,790,260
Deposits and other	32,102		139,244
Total assets	$	17,416,055	$	15,211,774

Accounts payable and accrued liabilities	$	3,647,687	$	566,087
Equity	13,768,368		14,645,687
Total liabilities and equity	$	17,416,055	$	15,211,774

	Nine Months
	Ended September 30,
	2011			2010
Net asset value at end of period	$	336,540,116		$	237,690,626
Average net asset value	$	307,804,675		$	183,347,901
Average outstanding debt	$	273,000,000		$	147,584,249
Ratio of total expenses, including income tax expense, to average net asset value (1) (2) (3)	7.07		%	7.00		%
Ratio of operating expenses to average net asset value (1) (2)	6.03		%	6.22		%
Ratio of operating expenses, excluding interest expense, to average net asset value (1) (2)	2.96		%	2.94		%
Ratio of net investment income to average net asset value (1) (2)	8.70		%	6.94		%
Total return based on change in net asset value (1) (4)	17.26		%	18.50		%

Value of the stock consideration issued for limited partner interests acquired	$	19,934,296	(1)
Fair value of noncontrolling limited partner interests	3,396,005		(2)
Total stock consideration and noncontrolling interest value	23,330,301

Fair value of MSC II assets and liabilities on January 7, 2010:
Cash	2,489,920
Debt investments acquired at fair value	64,925,164
Equity investments acquired at fair value	14,930,614
Other assets	808,560
SBIC debentures at fair value	(53,139,092		)
Deferred tax liability assumed	(82,827		)
Other liabilities	(1,519,608		)
Total fair value of MSC II net assets	28,412,731

Bargain purchase gain	5,082,430

Transaction costs associated with the Exchange Offer	(191,848		)

Bargain purchase gain, net of transaction costs	$	4,890,582