Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

On January 7, 2010, Main Street Capital Corporation (“Main Street” or “MSCC”) consummated the transactions related to the Exchange Offer and issued 1,239,695 shares of its common stock in exchange for approximately 88% of the total dollar value of Main Street Capital II, LP (“MSC II”) limited partner interests. In connection with the Exchange Offer, Main Street also funded the remaining limited partner capital commitments for the purchased limited partner interests in order to conform with the U.S. Small Business Administration (“SBA”) regulatory requirements. Pursuant to the terms of the Exchange Offer, 100% of the membership interests in the general partner of MSC II were also transferred to Main Street for no consideration. As part of the Exchange Offer transactions, Main Street transferred certain equity investments in portfolio companies which are “pass through” entities for tax purposes into a wholly owned subsidiary that is treated as a separate taxable entity. The unaudited pro forma condensed combined financial information has been derived from, and should be read in conjunction with, the historical consolidated financial statements of Main Street and the historical combined financial statements of MSC II and the general partner of MSC II, and the related footnotes to those financial statements.

The following unaudited pro forma condensed combined financial information and explanatory notes illustrate the effect of the Exchange Offer and related transactions on Main Street’s financial position and results of operations based upon the companies’ respective historical financial positions and results of operations under the acquisition method of accounting with Main Street treated as the acquirer. Under this method of accounting, the assets and liabilities of MSC II will be recorded by Main Street at their estimated fair values as of the date of the Exchange Offer. The unaudited pro forma condensed combined financial information of Main Street and MSC II reflects the unaudited condensed combined balance sheet as of September 30, 2009 and the unaudited condensed combined income statements for the year ended December 31, 2008 and the nine months ended September 30, 2009. The condensed combined balance sheet as of September 30, 2009 assumes the Exchange Offer and related transactions took place on that date. The condensed combined statements of income for the year ended December 31, 2008 and for the nine months ended September 30, 2009 assume the Exchange Offer and related transactions took place on January 1, 2008.

The unaudited pro forma condensed combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of each period presented, nor the impact of possible business model changes. The unaudited pro forma condensed combined financial information also does not consider any potential impacts of current market conditions on investment income, earnings or cash flows, expense efficiencies, new investments or redeemed investments, and share issuances or repurchases, among other factors. In addition, as explained in more detail in the accompanying notes to the unaudited pro forma condensed combined financial information, the allocation of the pro forma purchase price reflected in the unaudited pro forma condensed combined financial information is subject to adjustment and may vary significantly from the final purchase price allocation determined subsequent to the Exchange Offer.

MAIN STREET CAPITAL CORPORATION
Pro Forma Condensed Combined Balance Sheet
Unaudited
September 30, 2009

		MSCC and
		Consolidated								Pro Forma
		Subsidiaries				MSC II				Adjustments				Pro Forma
Assets
Investments — core portfolio		$	123,458,723			$	68,117,738			$	—			$	191,576,461
Investment in affiliated Investment Manager			16,340,706				—				(13,959,139)	(1)			2,381,567
Marketable securities and idle funds investments			39,912,232				8,271,411				(12,000,000)	(8)			36,183,643
Cash and cash equivalents			8,216,699				5,420,353				(250,000)	(2)			36,287,052
											(1,100,000)	(9)
											24,000,000	(8)
Other assets			3,701,912				2,772,210				(2,076,898)	(3)			4,397,224
Total assets		$	191,630,272			$	84,581,712			$	(5,386,037	)		$	270,825,947
Liabilities, Net Asset Value and Noncontrolling Interest
SBIC debentures		$	55,000,000			$	70,000,000			$	(16,459,247)	(3)		$	108,540,753
Bank line of credit			—				—				12,000,000	(8)			12,000,000
Other liabilities			7,567,447				453,759				251,447	(4)			8,272,653
Total liabilities			62,567,447				70,453,759				(4,207,800	)			128,813,406
Total net asset value			129,062,825				14,127,953				(4,437,300)	(6)			138,753,478
Noncontrolling interest			—				—				3,259,063	(5)			3,259,063
Total net asset value and noncontrolling interest			129,062,825				14,127,953				(1,178,237	)			142,012,541
Total liabilities, net asset value and noncontrolling interest		$	191,630,272			$	84,581,712			$	(5,386,037	)		$	270,825,947
Net Asset Value Per Share		$	12.01											$	11.57

MAIN STREET CAPITAL CORPORATION
Pro Forma Condensed Combined Income Statement
Unaudited
Year Ended December 31, 2008

		MSCC and
		Consolidated								Pro Forma
		Subsidiaries				MSC II				Adjustments				Pro Forma
Interest, fee and dividend income		$	15,967,197			$	8,962,776			$	—			$	24,929,973
Interest from marketable securities, idle funds and other			1,328,229				139,801				240,000	(11)			1,708,030
Total investment income			17,295,426				9,102,577				240,000				26,638,003
Interest			(3,777,919	)			(3,319,480	)			(360,000)	(11)			(7,292,222	)
											165,177	(3)
General and administrative			(1,684,084	)			(178,198	)			—				(1,862,282	)
Expenses reimbursed to affiliated Investment Manager			(1,006,835	)			(3,325,200	)			—				(4,332,035	)
Share-based compensation			(511,452	)			—				—				(511,452	)
Total expenses			(6,980,290	)			(6,822,878	)			(194,823	)			(13,997,991	)
Net investment income			10,315,136				2,279,699				45,177				12,640,012
Net realized gain (loss)			1,397,494				(1,973,970	)			—				(576,476	)
Net unrealized depreciation — investment portfolio			(3,011,718	)			(3,882,491	)			—				(6,894,209	)
Net unrealized depreciation — investment in affiliated Investment Manager			(949,374	)			—				835,449	(12)			(113,925	)
Income tax (provision) benefit			3,182,401				—				408,432	(4)			3,590,833
Bargain purchase gain			—				—				3,715,496	(6)(d)			3,715,496
Net increase (decrease) in net assets resulting from operations			10,933,939				(3,576,762	)			5,004,554				12,361,731
Noncontrolling interest			—				—				360,378	(10)			360,378
Net increase (decrease) in net assets resulting from operations, net of noncontrolling interest		$	10,933,939			$	(3,576,762	)		$	5,364,932			$	12,722,109
Net investment income per share, net of noncontrolling interest		$	1.13											$	1.20
Net realized income per share, net of noncontrolling interest		$	1.29											$	1.16
Net increase (decrease) in net assets resulting from operations per share, net of noncontrolling interest		$	1.20											$	1.23
Weighted average shares outstanding			9,095,904				—				1,239,695	(7)			10,335,599

MAIN STREET CAPITAL CORPORATION
Pro Forma Condensed Combined Income Statement
Unaudited
Nine Months Ended September 30, 2009

		MSCC and
		Consolidated								Pro Forma
		Subsidiaries				MSC II				Adjustments				Pro Forma
Interest, fee and dividend income		$	10,380,048			$	6,487,873			$	—			$	16,867,921
Interest from marketable securities, idle funds and other			1,314,045				200,186				135,000	(11)			1,649,231
Total investment income			11,694,093				6,688,059				135,000				18,517,152
Interest			(2,830,325	)			(2,924,791	)			(270,000)	(11)			(5,856,907	)
											168,209	(3)
General and administrative			(1,061,928	)			(118,219	)			—				(1,180,147	)
Expenses reimbursed to affiliated Investment Manager			(306,175	)			(2,493,900	)			—				(2,800,075	)
Share-based compensation			(767,218	)			—				—				(767,218	)
Total expenses			(4,965,646	)			(5,536,910	)			(101,791	)			(10,604,347	)
Net investment income			6,728,447				1,151,149				33,209				7,912,805
Net realized gain			1,478,834				474,880				—				1,953,714
Net unrealized appreciation (depreciation) — investment portfolio			1,646,556				(6,616,884	)			—				(4,970,328	)
Net unrealized appreciation (depreciation) — investment in affiliated Investment Manager			(334,920	)			—				715,412	(12)			380,492
Income tax (provision) benefit			789,564				—				(659,879)	(4)			129,685
Net increase (decrease) in net assets resulting from operations			10,308,481				(4,990,855	)			88,742				5,406,368
Noncontrolling interest			—				—				657,903	(10)			657,903
Net increase (decrease) in net assets resulting from operations, net of noncontrolling interest		$	10,308,481			$	(4,990,855	)		$	746,645			$	6,064,271
Net investment income per share, net of noncontrolling interest		$	0.69											$	0.70
Net realized income per share, net of noncontrolling interest		$	0.84											$	0.88
Net increase (decrease) in net assets resulting from operations per share, net of noncontrolling interest		$	1.05											$	0.55
Weighted average shares outstanding			9,788,226				—				1,239,695	(7)			11,027,921

MAIN STREET CAPITAL CORPORATION
PRO FORMA COMBINED SCHEDULE OF CORE PORTFOLIO INVESTMENTS
September 30, 2009
(Unaudited)

						Pro Forma
Portfolio Company/Type of Investment (a) (b)		Industry				Principal (f)				Cost (f)				Fair Value
Control Investments (c)
Advantage Millwork Company, Inc.		Manufacturer/Distributor
12% Secured Debt (Maturity — February 5, 2012)		of Wood Doors				$	7,666,667			$	7,402,554			$	4,850,000
Warrants (Fully diluted 30.5%)											244,560				—
											7,647,114				4,850,000
Café Brazil, LLC		Casual Restaurant
12% Secured Debt (Maturity — April 20, 2011)		Group					2,625,000				2,610,188				2,625,000
Member Units (g) (Fully diluted 42.3%)											41,837				1,390,000
											2,652,025				4,015,000
California Healthcare Medical Billing, Inc.		Healthcare Billing and Records
12% Secured Debt (Maturity — October 17, 2013)		Management					2,303,000				1,913,621				2,080,908
Common Stock (Fully diluted 9.8%)											637,000				1,225,000
Warrants (Fully diluted 19.6%)											392,000				1,845,667
											2,942,621				5,151,575
CBT Nuggets, LLC		Produces and Sells
14% Secured Debt (Maturity — December 31, 2013)		IT Certification					2,800,000				2,735,525				2,800,000
10% Secured Debt (Maturity — March 31, 2012)		Training Videos					1,525,000				1,525,000				1,525,000
10% Secured Debt (Maturity — March 31, 2010)							100,000				100,000				100,000
Member Units (g) (Fully diluted 40.8%)											499,200				2,316,667
											4,859,725				6,741,667
Ceres Management, LLC (Lambs)		Aftermarket Automotive
14% Secured Debt (Maturity — May 31, 2013)		Services Chain					4,000,000				3,950,539				3,950,539
Class B Member Units (Non-voting)											262,503				262,503
Member Units (Fully diluted 70.0%)											2,000,000				1,850,000
											6,213,042				6,063,042
Condit Exhibits, LLC		Tradeshow Exhibits/
13% current / 5% PIK Secured Debt (Maturity — July 1, 2013)		Custom Displays					4,123,076				4,067,336				4,067,336
Warrants (Fully diluted 46.9%)											500,000				50,000
											4,567,336				4,117,336
Gulf Manufacturing, LLC		Industrial Metal
Prime plus 1% Secured Debt (Maturity — August 31, 2012)		Fabrication					3,000,000				2,981,330				3,000,000
13% Secured Debt (Maturity — August 31, 2012)							3,000,000				2,798,768				2,950,000
Member Units (g) (Fully diluted 46.0%)											1,180,000				5,900,000
Warrants (Fully diluted 21.0%)											400,000				2,700,000
											7,360,098				14,550,000
Hawthorne Customs & Dispatch Services, LLC		Transportation/
13% Secured Debt (Maturity — January 31, 2011)		Logistics					1,100,000				1,076,519				1,076,519
Member Units (g) (Fully diluted 59.2%)											550,000				1,120,000
											1,626,519				2,196,519
Hydratec Holdings, LLC		Agricultural Services
12.5% Secured Debt (Maturity — October 31, 2012)							2,995,244				2,953,861				2,953,861
Prime plus 1% Secured Debt (Maturity — October 31, 2012)							350,000				337,667				337,667
Member Units (Fully diluted 85.1%)											4,100,000				6,620,000
											7,391,528				9,911,528
Indianapolis Aviation Partners, LLC		FBO / Aviation Support Services
12% Secured Debt (Maturity — September 15, 2014)							4,700,000				4,236,499				4,236,499
Warrants (Fully diluted 30.2%)											1,129,285				1,129,285
											5,365,784				5,365,784

MAIN STREET CAPITAL CORPORATION
PRO FORMA COMBINED SCHEDULE OF CORE PORTFOLIO INVESTMENTS
September 30, 2009
(Unaudited)

						Pro Forma
Portfolio Company/Type of Investment (a) (b)		Industry				Principal (f)				Cost (f)				Fair Value
Control Investments (c)
Jensen Jewelers of Idaho, LLC		Retail Jewelry
Prime Plus 2% Secured Debt (Maturity — November 14, 2011)							2,610,000				2,591,211				2,612,167
13% current / 6% PIK Secured Debt (Maturity — November 14, 2011)							2,628,087				2,585,488				2,630,686
Member Units (g) (Fully diluted 60.8%)											940,000				725,000
											6,116,699				5,967,853
Mid-Columbia Lumber Products, LLC
Prime Plus 1% Secured Debt (Maturity — June 30, 2010)		Specialized Lumber Products					375,000				372,500				372,500
12% Secured Debt (Maturity — December 18, 2011)							3,900,000				3,690,378				3,690,378
Member Units (Fully diluted 26.7%)											500,000				300,000
Warrants (Fully diluted 25.5%)											250,000				290,000
											4,812,878				4,652,878
NAPCO Precast, LLC		Precast Concrete
18% Secured Debt (Maturity — February 1, 2013)		Manufacturing					5,923,077				5,832,742				5,923,076
Prime Plus 2% Secured Debt (Maturity — February 1, 2013) (h)							3,384,615				3,360,369				3,384,616
Member Units (g) (Fully diluted 35.3%)											2,020,000				5,120,000
											11,213,111				14,427,692
OMi Holdings, Inc.		Manufacturer of
12% Secured Debt (Maturity — April 1, 2013)		Overhead Cranes					10,570,000				10,489,530				10,489,530
Common Stock (Fully diluted 48.0%)											1,500,000				650,000
											11,989,530				11,139,530
Quest Design & Production, LLC		Design and Fabrication
Prime plus 2% Secured Debt (Maturity — June 30, 2014)		of Custom Display					60,000				60,000				60,000
10% Secured Debt (Maturity — June 30, 2014)		Systems					600,000				465,060				600,000
0% Secured Debt (Maturity — June 30, 2014)							2,060,000				2,060,000				1,460,000
Warrants (Fully diluted 40.0%)											1,595,858				—
Warrants (Fully diluted 20.0%)											40,000				—
											4,220,918				2,120,000
The MPI Group, LLC		Manufacturer of Custom
9% Secured Debt (Maturity — October 2, 2013)		Hollow Metal Doors,					200,000				198,459				198,459
12% Secured Debt (Maturity — October 2, 2013)		Frames and Accessories					5,000,000				4,775,870				4,775,870
Warrants (Fully diluted 29.7%)											695,943				394,000
Warrants (Fully diluted 17.4%)											200,000				229,000
											5,870,272				5,597,329
Thermal & Mechanical Equipment, LLC		Heat Exchange / Filtration
13% current / 5% PIK Secured Debt (Maturity — September 25, 2014)		Products and Services					5,504,583				5,416,242				5,416,242
Prime plus 2% Secured Debt (Maturity — September 25, 2014) (h)							1,750,000				1,736,289				1,736,289
Warrants (Fully diluted 50.0%)											1,000,000				1,000,000
											8,152,531				8,152,531
Universal Scaffolding & Equipment, LLC		Manufacturer of Scaffolding
Prime plus 1% Secured Debt (Maturity — August 17, 2012) (h)		and Shoring Equipment					2,590,270				2,572,911				2,572,911
13% current / 5% PIK Secured Debt (Maturity — August 17, 2012)							10,391,311				10,255,783				65,422
Member Units (Fully diluted 57.1%)											3,052,502				—
											15,881,196				2,638,333

MAIN STREET CAPITAL CORPORATION
PRO FORMA COMBINED SCHEDULE OF CORE PORTFOLIO INVESTMENTS
September 30, 2009
(Unaudited)

						Pro Forma
Portfolio Company/Type of Investment (a) (b)		Industry				Principal (f)				Cost (f)				Fair Value
Control Investments (c)
Uvalco Supply, LLC		Farm and Ranch Supply
Member Units (g) (Fully diluted 39.6%)											905,743				1,390,000
Vision Interests, Inc.		Manufacturer/
13% Secured Debt (Maturity — June 5, 2012)		Installer of Commercial					9,400,000				9,027,078				8,050,000
Common Stock (Fully diluted 22.3%)		Signage									930,000				—
Warrants (Fully diluted 28.0%)											400,000				—
											10,357,078				8,050,000
Ziegler’s NYPD, LLC		Casual Restaurant Group
Prime plus 2% Secured Debt (Maturity — October 1, 2013) (h)							1,000,000				991,650				991,650
13% current / 5% PIK Secured Debt (Maturity — October 1, 2013)							4,680,906				4,615,670				4,615,670
Warrants (Fully diluted 47.6%)											600,000				600,000
											6,207,320				6,207,320
Other											1,964,785				1,964,787
Subtotal Control Investments											138,317,853				135,270,704

MAIN STREET CAPITAL CORPORATION
PRO FORMA COMBINED SCHEDULE OF CORE PORTFOLIO INVESTMENTS
September 30, 2009
(Unaudited)

				Pro Forma
Portfolio Company/Type of Investment (a) (b)		Industry		Principal (f)				Cost (f)				Fair Value
Affiliate Investments (d)
American Sensor Technologies, Inc.		Manufacturer of Commercial/
Prime plus 0.5% Secured Debt (Maturity — May 31, 2010) (h)		Industrial Sensors			3,800,000				3,800,000				3,800,000
Warrants (Fully diluted 19.6%)									49,990				820,000
									3,849,990				4,620,000
Audio Messaging Solutions, LLC		Audio Messaging
12% Secured Debt (Maturity — May 8, 2014)		Services			5,684,000				5,264,024				5,264,024
Warrants (Fully diluted 8.4%)									358,400				633,333
									5,622,424				5,897,357
Carlton Global Resources, LLC		Processor of
13% PIK Secured Debt (Maturity — November 15, 2011)		Industrial Minerals			11,979,859				11,598,100				—
Member Units (Fully diluted 21.3%)									1,000,000				—
									12,598,100				—
Compact Power Equipment Centers, LLC		Light to Medium Duty
12% Secured Debt (Maturity — September 23, 2014)		Equipment Rental			529,412				534,026				534,026
Member Units (Fully diluted 11.5%)									1,147				1,147
									535,173				535,173
East Teak Fine Hardwoods, Inc.		Hardwood Products
Common Stock (Fully diluted 5.0%)									200,000				569,231
Houston Plating & Coatings, LLC		Plating & Industrial
Prime plus 2% Secured Debt (Maturity — July 19, 2011)		Coating Services			100,000				100,000				100,000
Prime plus 2% Secured Debt (Maturity — July 18, 2013)					200,000				200,000				200,000
Member Units (g) (Fully diluted 11.1%)									335,000				3,165,000
									635,000				3,465,000
KBK Industries, LLC		Specialty Manufacturer
14% Secured Debt (Maturity — January 23, 2011)		of Oilfield and			5,250,000				5,110,545				5,110,545
8% Secured Debt (Maturity — March 1, 2010)		Industrial Products			250,000				250,000				250,000
8% Secured Debt (Maturity — March 31, 2010)					600,000				600,000				600,000
Member Units (g) (Fully diluted 19.3%)									250,000				360,000
									6,210,545				6,320,545
Laurus Healthcare, LP		Healthcare Facilities / Services
13% Secured Debt (Maturity — May 7, 2012)					2,275,000				2,275,000				2,275,000
Warrants (Fully diluted 17.5%)									105,000				4,400,000
									2,380,000				6,675,000
Lighting Unlimited, LLC		Commercial and Residential
Prime Plus 1% Secured Debt (Maturity — August 22, 2012) (h)		Lighting Products and			1,233,333				1,225,742				1,225,742
14% Secured Debt (Maturity — August 22, 2012)		Design Services			1,600,000				1,545,081				1,545,081
Warrants (Fully diluted 15.0%)									50,000				50,000
									2,820,823				2,820,823

MAIN STREET CAPITAL CORPORATION
PRO FORMA COMBINED SCHEDULE OF CORE PORTFOLIO INVESTMENTS
September 30, 2009
(Unaudited)

				Pro Forma
Portfolio Company/Type of Investment (a) (b)		Industry		Principal (f)				Cost (f)				Fair Value
Affiliate Investments (d)
National Trench Safety, LLC		Trench & Traffic
10% PIK Debt (Maturity — April 16, 2014)		Safety Equipment			435,966				435,968				435,968
Member Units (Fully diluted 11.7%)									1,792,308				1,910,000
									2,228,276				2,345,968
Olympus Building Services, Inc.		Custodial/Facilities
12% Secured Debt (Maturity — March 27, 2014)		Services			3,150,000				2,863,776				3,050,000
Warrants (Fully diluted 22.5%)									250,000				666,667
									3,113,776				3,716,667
Pulse Systems, LLC		Manufacturer of Components
Warrants (Fully diluted 7.4%)		for Medical Devices							132,856				450,000
Schneider Sales Management, LLC		Sales Consulting
13% Secured Debt (Maturity — October 15, 2013)		and Training			3,300,000				3,196,337				3,196,337
Warrants (Fully diluted 20.0%)									75,000				—
									3,271,337				3,196,337
Walden Smokey Point, Inc.		Specialty Transportation/
14% current / 4% PIK Secured Debt (Maturity — December 30, 2013)		Logistics			8,243,555				8,101,727				8,101,727
Common Stock (Fully diluted 12.6%)									1,000,000				1,500,000
									9,101,727				9,601,727
WorldCall, Inc.		Telecommunication/
13% Secured Debt (Maturity — April 22, 2011)		Information Services			646,225				644,638				644,638
Common Stock (Fully diluted 9.9%)									296,631				100,000
									941,269				744,638
Subtotal Affiliate Investments									53,641,296				50,958,466

MAIN STREET CAPITAL CORPORATION
PRO FORMA COMBINED SCHEDULE OF CORE PORTFOLIO INVESTMENTS
September 30, 2009
(Unaudited)

				Pro Forma
Portfolio Company/Type of Investment (a) (b)		Industry		Principal (f)				Cost (f)				Fair Value
Non-Control/Non-Affiliate Investments(e):
Hayden Acquisition, LLC		Manufacturer of
8% Secured Debt (Maturity — August 9, 2010)		Utility Structures			1,800,000				1,781,303				360,000
Support Systems Homes, Inc.		Manages Substance
15% Secured Debt (Maturity — August 21, 2018)		Abuse Treatment Centers			576,600				576,600				576,600
Technical Innovations, LLC		Manufacturer of Specialty
7% Secured Debt (Maturity — November 30, 2009)		Cutting Tools and Punches			1,060,000				1,059,411				1,059,411
13.5% Secured Debt (Maturity — January 16, 2015)					3,350,000				3,307,580				3,351,280
									4,366,991				4,410,691
Subtotal Non-Control/Non-Affiliate Investments									6,724,894				5,347,291
Total Core Portfolio Investments, September 30, 2009								$	198,684,043			$	191,576,461

MAIN STREET CAPITAL CORPORATION
Notes to Pro Forma Condensed Combined Financial Statements
(Unaudited)

Note A: Basis of Pro Forma Presentation

The unaudited pro forma condensed combined financial information of Main Street and MSC II reflects the unaudited pro forma condensed combined balance sheet as of September 30, 2009 and the unaudited pro forma condensed combined income statements for the year ended December 31, 2008 and the nine months ended September 30, 2009. Main Street issued 1,239,695 shares of its common stock in exchange for approximately 88% of the total dollar value of MSC II limited partner interests, representing a purchase price of approximately $19.9 million. The purchase price was calculated based upon a price of Main Street common stock of $16.08 per share at closing of the Exchange Offer. Pursuant to the terms of the Exchange Offer, 100% of the membership interests in the general partner of MSC II were also transferred to Main Street for no consideration.

The Exchange Offer will be accounted for as an acquisition of MSC II by Main Street in accordance with the acquisition method of accounting as detailed in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“Codification” or “ASC”) 805, Business Combinations (“ASC 805”). The fair value of the consideration paid is allocated to the assets acquired and liabilities assumed based on their fair values as of the date of acquisition. As described in more detail in ASC 805, goodwill, if any, is recognized as of the acquisition date, for the excess of the consideration transferred over the fair value of identifiable net assets acquired. If the total acquisition date fair value of the identifiable net assets acquired exceeds the fair value of the consideration transferred, the excess is recognized as a bargain purchase gain. In connection with the Exchange Offer, the estimated fair value of the MSC II net assets acquired is anticipated to exceed the stock consideration issued, resulting in a bargain purchase gain that will be recorded by Main Street in the period in which the Exchange Offer is completed.

Under the 1940 Act rules, the regulations pursuant to Article 6 of Regulation S-X and the American Institute of Certified Public Accountants’ Audit and Accounting Guide for Investment Companies, Main Street is precluded from consolidating any entity other than another investment company or an operating company which provides substantially all of its services and benefits to Main Street. Main Street’s financial statements include the accounts of Main Street Mezzanine Fund, LP (the “Fund”), its general partner, Main Street Mezzanine Management, LLC (the “General Partner”), and Main Street Equity Interests, Inc. (“MSEI”). Main Street’s wholly owned subsidiary, Main Street Capital Partners, LLC (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 entities other than Main Street. All intercompany balances and transactions have been eliminated in consolidation.

Main Street will determine the value of the assets acquired under the guidance of ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). Under ASC 820, investments are valued utilizing a market approach, an income approach, or both approaches, as appropriate. Under the market approach, Main Street will typically use the enterprise value methodology to determine the fair value of 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, 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 these investments estimate the value of the investment if it were to sell, or exit, the investment, assuming the highest and best use of the investment by market participants. 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. The fair value determination of each portfolio investment will require one or more of the following unobservable inputs:

•

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

•

Current and projected financial condition of the portfolio company;

•

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

•

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

•

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

•

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

•

Pending debt or capital restructuring of the portfolio company;

•

Projected operating results of the portfolio company;

•

Current information regarding any offers to purchase the investment;

•

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

•

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.

ASC 820 classifies the inputs used to measure fair value 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).

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

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

•

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

•

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

•

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

•

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

Level 3 — Investments whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. 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). Changes in the observability of valuation inputs may result in a reclassification for certain investments. All of the core portfolio investments held by Main Street and MSC II are level 3 assets.

Main Street will determine the value of the SBIC debentures assumed upon closing of the Exchange Offer by adopting the fair value option provisions of ASC 825, Financial Instruments, relating to accounting for debt obligations at their fair value. Main Street will use the income approach to determine the fair value of the SBIC debentures based on the discounted future interest and principal payments that will be made on the SBIC debt facility.

The unaudited pro forma condensed combined financial information includes preliminary estimated adjustments to record the assets and liabilities of MSC II at their respective estimated fair values and represents Main Street’s estimates based on available information. The pro forma adjustments included herein may be revised as additional information becomes available and as additional analyses are performed. The final allocation of the purchase price will be determined after the Exchange Offer is completed and after completion of a final analysis to determine the estimated fair values of MSC II’s assets and liabilities. Accordingly, the final purchase accounting adjustments may be materially different from the pro forma adjustments presented in this document. Increases or decreases in the estimated fair values of the net assets and other items related to MSC II as compared to the information shown in this document may change the amount of the purchase price recognized as a bargain purchase gain in accordance with ASC 805.

The unaudited pro forma condensed combined financial information presented in this document is for illustrative purposes only and does not necessarily indicate the results of operations or the combined financial position that would have resulted had the Exchange Offer been completed at the beginning of the applicable period presented, nor the impact of possible business model changes as a result of current market conditions which may impact investment income, earnings or cash flows, expense efficiencies, new investments or redeemed investments, share issuances or repurchases and other factors. Additionally, the unaudited pro forma condensed combined financial information is not indicative of the results of operations in future periods or the future financial position of the combined company.

Note B: Preliminary Purchase Accounting Allocations

The unaudited pro forma condensed combined financial information for the Exchange Offer includes the unaudited pro forma condensed combined balance sheet as of September 30, 2009 assuming the Exchange Offer and related transactions were completed on September 30, 2009. The unaudited pro forma condensed combined income statements for the year ended December 31, 2008 and for the nine months ended September 30, 2009, were prepared assuming the Exchange Offer and related transactions were completed on January 1, 2008.

The unaudited pro forma condensed combined financial information reflects the issuance of approximately 1.2 million shares of Main Street common stock in connection with the Exchange Offer.

The Exchange Offer will be accounted for using the acquisition method of accounting under ASC 805. Accordingly, Main Street will aggregate the value of the stock consideration issued to acquire the majority of the limited partner interests in MSC II with the fair value of the noncontrolling limited partner interests in MSC II. Main Street will then compare the total value of the stock consideration issued and noncontrolling interest value against the fair value of MSC II’s identifiable assets and liabilities as summarized in the following table:

Value of the stock consideration issued for limited partner interests acquired		$	19,934,296
Fair value of noncontrolling limited partner interests			3,259,063
Total stock consideration and noncontrolling interest value			23,193,359
Fair value of MSC II assets and liabilities:
Cash and marketable securities (net of distribution to limited partners)			12,591,764
Debt investments acquired at fair value			54,932,303
Equity investments acquired at fair value			13,185,435
Other assets			695,312
SBIC debt at fair value			(53,540,753	)
Tax liability assumed			(251,447	)
Other liabilities			(453,759	)
Total fair value of MSC II net assets			27,158,855
Bargain purchase gain			3,965,496
Estimated transaction costs associated with the Exchange Offer and expensed in the period incurred			(250,000	)
Bargain purchase gain, net of estimated transaction costs		$	3,715,496