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 March
31, 2017



OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



Commission file number: 814-00866



MONROE CAPITAL CORPORATION

(Exact Name of Registrant as Specified
in its Charter)



|Maryland                                                               | 27-4895840                                  
|---------------------------------------------------------------------- | --------------------------------------------
|(State or Other Jurisdiction of
        Incorporation or Organization) | (I.R.S. Employer
        Identification No.)
|                                                                       |                                             
|311 South Wacker Drive, Suite 6400
        Chicago, Illinois           | 60606                                       
|(Address of Principal Executive Office)                                | (Zip Code)                                  



(312) 258-8300

(Registrant’s Telephone Number,
Including Area Code)



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    ̈



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   x
    No    ̈



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”, “smaller reporting company” and “emerging growth company” in Rule 12b-2
of the Exchange Act. (check one):



|Large accelerated filer |  ̈                                              | Accelerated filer         | x
|----------------------- | ---------------------------------------------- | ------------------------- | -
|                        |                                                |                           |  
|Non-accelerated filer   |  ̈(Do not check if a smaller reporting company) | Smaller reporting company |  ̈
|                        |                                                |                           |  
|Emerging growth company | x                                              |                           |  



If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act.    x



Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes    ̈
    No   x



As of May 8, 2017, the registrant had 16,722,025
shares of common stock, $0.001 par value, outstanding.













TABLE OF CONTENTS



|                              |                                                                                                                             | Page
|----------------------------- | --------------------------------------------------------------------------------------------------------------------------- | ----
|PART I. FINANCIAL INFORMATION | 3                                                                                                                          
|                              |                                                                                                                             |     
|Item 1.                       | Consolidated Financial Statements                                                                                           | 3   
|                              |                                                                                                                             |     
|                              | Consolidated Statements of Assets and Liabilities as of March 31, 2017 (unaudited) and December 31, 2016                    | 3   
|                              |                                                                                                                             |     
|                              | Consolidated Statements of Operations for the three months ended March 31, 2017 (unaudited) and 2016 (unaudited)            | 4   
|                              |                                                                                                                             |     
|                              | Consolidated Statements of Changes in Net Assets for the three months ended March 31, 2017 (unaudited) and 2016 (unaudited) | 5   
|                              |                                                                                                                             |     
|                              | Consolidated Statements of Cash Flows for the three months ended March 31, 2017 (unaudited) and 2016 (unaudited)            | 6   
|                              |                                                                                                                             |     
|                              | Consolidated Schedules of Investments as of March 31, 2017 (unaudited) and December 31, 2016                                | 7   
|                              |                                                                                                                             |     
|                              | Notes to Consolidated Financial Statements (unaudited)                                                                      | 16  
|                              |                                                                                                                             |     
|Item 2.                       | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                       | 32  
|                              |                                                                                                                             |     
|Item 3.                       | Quantitative and Qualitative Disclosures About Market Risk                                                                  | 44  
|                              |                                                                                                                             |     
|Item 4.                       | Controls and Procedures                                                                                                     | 44  
|                              |                                                                                                                             |     
|PART II. OTHER INFORMATION    | 45                                                                                                                         
|                              |                                                                                                                             |     
|Item 1.                       | Legal Proceedings                                                                                                           | 45  
|                              |                                                                                                                             |     
|Item 1A.                      | Risk Factors                                                                                                                | 45  
|                              |                                                                                                                             |     
|Item 2.                       | Unregistered Sales of Equity Securities and Use of Proceeds                                                                 | 45  
|                              |                                                                                                                             |     
|Item 3.                       | Defaults Upon Senior Securities                                                                                             | 45  
|                              |                                                                                                                             |     
|Item 4.                       | Mine Safety Disclosures                                                                                                     | 45  
|                              |                                                                                                                             |     
|Item 5.                       | Other Information                                                                                                           | 45  
|                              |                                                                                                                             |     
|Item 6.                       | Exhibits                                                                                                                    | 46  
|                              |                                                                                                                             |     
|Signatures                    |                                                                                                                             | 47  



2







Part I. Financial Information

Item 1. Consolidated Financial Statements



MONROE CAPITAL CORPORATION



CONSOLIDATED STATEMENTS OF ASSETS AND
LIABILITIES



(in thousands, except per share data)



|                                                                                                                         |  | March 31, 2017 |         |   | December 31, 2016 |  
|------------------------------------------------------------------------------------------------------------------------ |  | -------------- | ------- | - | ----------------- | -
|                                                                                                                         |  | (unaudited)    |         |   |                   |  
|ASSETS                                                                                                                   |  |                |         |   |                   |  
|Investments, at fair value:                                                                                              |  |                |         |   |                   |  
|Non-controlled/non-affiliate company investments                                                                         |  | $              | 358,883 |   |                   | $
|Non-controlled affiliate company investments                                                                             |  |                | 49,219  |   |                   |  
|Controlled affiliate company investments                                                                                 |  |                | 10,047  |   |                   |  
|Total investments, at fair value (amortized cost of: $422,102 and $413,242, respectively)                                |  |                | 418,149 |   |                   |  
|Cash                                                                                                                     |  |                | 5,483   |   |                   |  
|Restricted cash                                                                                                          |  |                | 10,555  |   |                   |  
|Interest receivable                                                                                                      |  |                | 3,056   |   |                   |  
|Other assets                                                                                                             |  |                | 1,454   |   |                   |  
|Total assets                                                                                                             |  |                | 438,697 |   |                   |  
|                                                                                                                         |  |                |         |   |                   |  
|LIABILITIES                                                                                                              |  |                |         |   |                   |  
|Debt:                                                                                                                    |  |                |         |   |                   |  
|Revolving credit facility                                                                                                |  |                | 136,000 |   |                   |  
|SBA debentures payable                                                                                                   |  |                | 60,000  |   |                   |  
|Total debt                                                                                                               |  |                | 196,000 |   |                   |  
|Less:  Unamortized deferred financing costs                                                                              |  |                | (4,268  | ) |                   |  
|Total debt, less unamortized deferred financing costs                                                                    |  |                | 191,732 |   |                   |  
|Secured borrowings, at fair value (proceeds of: $1,320 and $1,320, respectively)                                         |  |                | 1,315   |   |                   |  
|Interest payable                                                                                                         |  |                | 820     |   |                   |  
|Management fees payable                                                                                                  |  |                | 1,805   |   |                   |  
|Incentive fees payable                                                                                                   |  |                | 1,465   |   |                   |  
|Accounts payable and accrued expenses                                                                                    |  |                | 1,917   |   |                   |  
|Directors fees payable                                                                                                   |  |                | 37      |   |                   |  
|Total liabilities                                                                                                        |  |                | 199,091 |   |                   |  
|Net assets                                                                                                               |  | $              | 239,606 |   |                   | $
|                                                                                                                         |  |                |         |   |                   |  
|Commitments and contingencies (See Note 10)                                                                              |  |                |         |   |                   |  
|                                                                                                                         |  |                |         |   |                   |  
|ANALYSIS OF NET ASSETS                                                                                                   |  |                |         |   |                   |  
|Common stock, $0.001 par value, 100,000 shares authorized, 16,712 and 16,582 shares issued and outstanding, respectively |  | $              | 17      |   |                   | $
|Capital in excess of par value                                                                                           |  |                | 235,516 |   |                   |  
|Undistributed net investment income (accumulated distributions in excess of net investment income)                       |  |                | 7,268   |   |                   |  
|Accumulated net realized gain (loss) on investments                                                                      |  |                | 754     |   |                   |  
|Accumulated net unrealized appreciation (depreciation) on investments and secured borrowings                             |  |                | (3,949  | ) |                   |  
|Total net assets                                                                                                         |  | $              | 239,606 |   |                   | $
|                                                                                                                         |  |                |         |   |                   |  
|Net asset value per share                                                                                                |  | $              | 14.34   |   |                   | $



See Notes to Consolidated Financial Statements.



3







MONROE CAPITAL CORPORATION



CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)



(in thousands, except per share data)



|                                                                                   |  | Three months ended March 31, |       
|---------------------------------------------------------------------------------- |  | ---------------------------- | ------
|                                                                                   |  | 2017                         |       
|Investment income:                                                                 |  |                              |       
|Interest income:                                                                   |  |                              |       
|Non-controlled/non-affiliate company investments                                   |  | $                            | 10,055
|Non-controlled affiliate company investments                                       |  |                              | 1,196 
|Controlled affiliate company investments                                           |  |                              | 177   
|Total interest income                                                              |  |                              | 11,428
|Dividend income:                                                                   |  |                              |       
|Non-controlled/non-affiliate company investments                                   |  |                              | 250   
|Non-controlled affiliate company investments                                       |  |                              | -     
|Total dividend income                                                              |  |                              | 250   
|Fee income:                                                                        |  |                              |       
|Non-controlled/non-affiliate company investments                                   |  |                              | 328   
|Total fee income                                                                   |  |                              | 328   
|Total investment income                                                            |  |                              | 12,006
|                                                                                   |  |                              |       
|Operating expenses:                                                                |  |                              |       
|Interest and other debt financing expenses                                         |  |                              | 2,010 
|Base management fees                                                               |  |                              | 1,805 
|Incentive fees                                                                     |  |                              | 1,290 
|Professional fees                                                                  |  |                              | 291   
|Administrative service fees                                                        |  |                              | 330   
|General and administrative expenses                                                |  |                              | 209   
|Excise taxes                                                                       |  |                              | -     
|Directors fees                                                                     |  |                              | 37    
|Total expenses                                                                     |  |                              | 5,972 
|Net investment income                                                              |  |                              | 6,034 
|                                                                                   |  |                              |       
|Net gain (loss) on investments and secured borrowings:                             |  |                              |       
|Net realized gain (loss) on investments:                                           |  |                              |       
|Non-controlled/non-affiliate company investments                                   |  |                              | 167   
|Net realized gain (loss) on investments                                            |  |                              | 167   
|                                                                                   |  |                              |       
|Net change in unrealized appreciation (depreciation) on investments:               |  |                              |       
|Non-controlled/non-affiliate company investments                                   |  |                              | 192   
|Non-controlled affiliate company investments                                       |  |                              | (2,164
|Controlled affiliate company investments                                           |  |                              | (1,659
|Net change in unrealized appreciation (depreciation) on investments                |  |                              | (3,631
|                                                                                   |  |                              |       
|Net change in unrealized (appreciation) depreciation on secured borrowings         |  |                              | (1    
|                                                                                   |  |                              |       
|Net gain (loss) on investments and secured borrowings                              |  |                              | (3,465
|                                                                                   |  |                              |       
|Net increase (decrease) in net assets resulting from operations                    |  | $                            | 2,569 
|                                                                                   |  |                              |       
|Per common share data:                                                             |  |                              |       
|Net investment income per share - basic and diluted                                |  | $                            | 0.36  
|Net increase in net assets resulting from operations per share - basic and diluted |  | $                            | 0.15  
|Weighted average common shares outstanding - basic and diluted                     |  |                              | 16,594



See Notes to Consolidated Financial Statements.



4







MONROE CAPITAL CORPORATION



CONSOLIDATED STATEMENTS OF CHANGES IN
NET ASSETS

(unaudited)



(in thousands)





|                                                                 | Common Stock     |        | Capital in |   | Undistributed net investment income (accumulated distributions in excess of net |  | Accumulated net realized gain |         | Accumulated net unrealized appreciation (depreciation) on investments and |   |                    |  
|---------------------------------------------------------------- | ---------------- | ------ | ---------- | - | ------------------------------------------------------------------------------- |  | ----------------------------- | ------- | ------------------------------------------------------------------------- | - | ------------------ | -
|                                                                 | Number of shares |        | Par  value |   | excess of par value                                                             |  | investment income)            |         | (loss) oninvestments                                                      |   | secured borrowings |  
|Balances at December 31, 2015                                    |                  | 13,008 |            | $ | 13                                                                              |  | $                             | 184,419 |                                                                           | $ | 1,692              |  
|Net increase (decrease) in net assets resulting from operations  |                  | -      |            |   | -                                                                               |  |                               | -       |                                                                           |   | 5,787              |  
|Distributions to stockholders:                                   |                  |        |            |   |                                                                                 |  |                               |         |                                                                           |   |                    |  
|Distributions from net investment income                         |                  | -      |            |   | -                                                                               |  |                               | -       |                                                                           |   | (4,553             | )
|Distributions from realized gain                                 |                  | -      |            |   | -                                                                               |  |                               | -       |                                                                           |   | -                  |  
|Balances at March 31, 2016                                       |                  | 13,008 |            | $ | 13                                                                              |  | $                             | 184,419 |                                                                           | $ | 2,926              |  
|                                                                 |                  |        |            |   |                                                                                 |  |                               |         |                                                                           |   |                    |  
|Balances at December 31, 2016                                    |                  | 16,582 |            | $ | 17                                                                              |  | $                             | 233,526 |                                                                           | $ | 7,037              |  
|Net increase (decrease) in net assets resulting from operations  |                  | -      |            |   | -                                                                               |  |                               | -       |                                                                           |   | 6,034              |  
|Issuance of common stock, net of offering and underwriting costs |                  | 114    |            |   | -                                                                               |  |                               | 1,736   |                                                                           |   | -                  |  
|Distributions to stockholders:                                   |                  |        |            |   |                                                                                 |  |                               |         |                                                                           |   |                    |  
|Stock issued in connection with dividend reinvestment plan       |                  | 16     |            |   | -                                                                               |  |                               | 254     |                                                                           |   | (254               | )
|Distributions from net investment income                         |                  | -      |            |   | -                                                                               |  |                               | -       |                                                                           |   | (5,549             | )
|Balances at March 31, 2017                                       |                  | 16,712 |            | $ | 17                                                                              |  | $                             | 235,516 |                                                                           | $ | 7,268              |  





See Notes to Consolidated Financial Statements.



5







MONROE CAPITAL CORPORATION



CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)



(in thousands)



|                                                                                                                                                 |  | Three months ended March 31, |        
|------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------- | -------
|                                                                                                                                                 |  | 2017                         |        
|                                                                                                                                                 |  |                              |        
|Cash flows from operating activities:                                                                                                            |  |                              |        
|Net increase (decrease) in net assets resulting from operations                                                                                  |  | $                            | 2,569  
|Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: |  |                              |        
|Net change in unrealized (appreciation) depreciation on investments                                                                              |  |                              | 3,631  
|Net change in unrealized appreciation (depreciation) on secured borrowings                                                                       |  |                              | 1      
|Net realized (gain) loss on investments                                                                                                          |  |                              | (167   
|Payment-in-kind interest income                                                                                                                  |  |                              | (613   
|Net accretion of discounts and amortization of premiums                                                                                          |  |                              | (388   
|Proceeds from principal payments and sales of investments                                                                                        |  |                              | 33,844 
|Purchases of investments                                                                                                                         |  |                              | (41,536
|Amortization of deferred financing costs                                                                                                         |  |                              | 231    
|Changes in operating assets and liabilities:                                                                                                     |  |                              |        
|Interest receivable                                                                                                                              |  |                              | (413   
|Other assets                                                                                                                                     |  |                              | (803   
|Payable for open trades                                                                                                                          |  |                              | -      
|Interest payable                                                                                                                                 |  |                              | 85     
|Management fees payable                                                                                                                          |  |                              | 56     
|Incentive fees payable                                                                                                                           |  |                              | 243    
|Accounts payable and accrued expenses                                                                                                            |  |                              | (203   
|Directors fees payable                                                                                                                           |  |                              | 37     
|Net cash provided by (used in) operating activities                                                                                              |  |                              | (3,426 
|                                                                                                                                                 |  |                              |        
|Cash flows from financing activities:                                                                                                            |  |                              |        
|Borrowings on revolving credit facility                                                                                                          |  |                              | 39,500 
|Repayments of revolving credit facility                                                                                                          |  |                              | (32,500
|SBA debentures borrowings                                                                                                                        |  |                              | 8,500  
|Payments of deferred financing costs                                                                                                             |  |                              | (554   
|Repayments on secured borrowings                                                                                                                 |  |                              | -      
|Proceeds from shares sold, net of offering and underwriting costs                                                                                |  |                              | 1,736  
|Stockholder distributions paid, net of stock issued under the dividend reinvestment plan of $254 and $0, respectively                            |  |                              | (5,549 
|Net cash provided by (used in) financing activities                                                                                              |  |                              | 11,133 
|                                                                                                                                                 |  |                              |        
|Net increase (decrease) in Cash and Restricted Cash                                                                                              |  |                              | 7,707  
|Cash and Restricted Cash, beginning of period (1)                                                                                                |  |                              | 8,331  
|Cash and Restricted Cash, end of period (2)                                                                                                      |  | $                            | 16,038 
|                                                                                                                                                 |  |                              |        
|Supplemental disclosure of cash flow information:                                                                                                |  |                              |        
|Cash interest paid during the period                                                                                                             |  | $                            | 1,639  
|Cash paid for excise taxes during the period                                                                                                     |  | $                            | 495    










| | (1) | Represents cash and restricted cash of $5,958 and $2,373,
respectively, from the consolidated statement of assets and liabilities as of December 31, 2016. Represents cash and restricted
cash of $5,278 and $8,588, respectively, from the consolidated statement of assets and liabilities as of December 31, 2015.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Represents cash and restricted cash of $5,483 and $10,555,
respectively, from the consolidated statement of assets and liabilities as of March 31, 2017. Represents cash and restricted cash
of $5,770 and $14,745, respectively, from the consolidated statement of assets and liabilities as of March 31, 2016.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



See Notes to Consolidated Financial Statements.



6







MONROE CAPITAL CORPORATION



CONSOLIDATED SCHEDULE OF INVESTMENTS

(unaudited)



March 31, 2017



(in thousands, except for units)







|Portfolio
    Company (a)                                                    |  | Industry                                      |  | Spread
    AboveIndex (b) |  | Interest
    Rate |                                                                |      | Maturity |            | Principal |  |        | Amortized
    Cost |  |   | Fair
    Value (c) |  |  | %
    ofNet Assets (d) |       
|---------------------------------------------------------------------------- |  | --------------------------------------------- |  | ------------------------- |  | ----------------- | -------------------------------------------------------------- | ---- | -------- | ---------- | --------- |  | ------ | ------------------ |  | - | ------------------ |  |  | ---------------------- | ------
|Senior Secured Loans                                                         |  |                                               |  |                           |  |                   |                                                                |      |          |            |           |  |        |                    |  |   |                    |  |  |                        |       
|AdTheorent,
    Inc. (Revolver) (e)                                          |  | Media: Advertising, Printing &
    Publishing |  | L+8.50%                   |  |                   | 9.28                                                           | %    |          | 12/22/2021 |           |  | 515    |                    |  | $ | 232                |  |  | $                      | 232   
|AdTheorent, Inc.                                                             |  | Media: Advertising, Printing & Publishing     |  | L+8.50%                   |  |                   | 9.28                                                           | %    |          | 12/22/2021 |           |  | 5,000  |                    |  |   | 4,904              |  |  |                        | 5,015 
|All Holding Company,
    LLC (f)                                             |  | Beverage, Food & Tobacco                      |  | L+7.00%                   |  |                   | 7.98                                                           | %    |          | 11/15/2021 |           |  | 5,431  |                    |  |   | 5,334              |  |  |                        | 5,513 
|American Community Homes,
    Inc. (g)                                       |  | Banking, Finance, Insurance, & Real Estate    |  | L+8.00%                   |  |                   | 9.50                                                           | %    |          | 7/22/2019  |           |  | 7,667  |                    |  |   | 7,560              |  |  |                        | 7,843 
|American Community Homes,
    Inc. (g)                                       |  | Banking, Finance, Insurance, & Real Estate    |  | L+12.50%                  |  |                   | 9.50% Cash/4.50%
                                         PIK  |      |          | 7/22/2019  |           |  | 4,265  |                    |  |   | 4,212              |  |  |                        | 4,351 
|American Community Homes,
    Inc. (g)                                       |  | Banking, Finance, Insurance, & Real Estate    |  | L+12.50%                  |  |                   | 9.50% Cash/4.50%
                                         PIK  |      |          | n/a        | (h)       |  | 524    |                    |  |   | 515                |  |  |                        | 524   
|Answers Corporation                                                          |  | High Tech Industries                          |  | P + 6.25%                 |  |                   | 10.25                                                          | %(i) |          | 10/1/2021  |           |  | 2,903  |                    |  |   | 2,822              |  |  |                        | 1,352 
|Answers Corporation (DIP
    Facility) (e)                                   |  | High Tech Industries                          |  | L+7.00%                   |  |                   | 8.00                                                           | %(i) |          | n/a        | (h)       |  | 269    |                    |  |   | 105                |  |  |                        | 108   
|BC Equity Ventures LLC                                                       |  | Hotels, Gaming & Leisure                      |  | L+6.50%                   |  |                   | 7.50                                                           | %    |          | 8/31/2022  |           |  | 2,605  |                    |  |   | 2,557              |  |  |                        | 2,635 
|BCC Software, LLC (f)                                                        |  | High Tech Industries                          |  | L+8.00%                   |  |                   | 9.00                                                           | %    |          | 6/20/2019  |           |  | 3,248  |                    |  |   | 3,210              |  |  |                        | 3,247 
|BCC Software, LLC (Revolver) (e)                                             |  | High Tech Industries                          |  | L+8.00%                   |  |                   | 9.00                                                           | %    |          | 6/20/2019  |           |  | 469    |                    |  |   | -                  |  |  |                        | -     
|Beaver-Visitec International
    Holdings, Inc.                              |  | Healthcare & Pharmaceuticals                  |  | L+5.00%                   |  |                   | 6.15                                                           | %    |          | 8/19/2023  |           |  | 4,975  |                    |  |   | 4,929              |  |  |                        | 4,975 
|Bluestem Brands, Inc.                                                        |  | Consumer Goods: Non-Durable                   |  | L+7.50%                   |  |                   | 8.54                                                           | %    |          | 11/6/2020  |           |  | 2,718  |                    |  |   | 2,698              |  |  |                        | 2,242 
|Cali Bamboo, LLC                                                             |  | Construction & Building                       |  | L+8.50%                   |  |                   | 9.48                                                           | %    |          | 7/10/2020  |           |  | 5,409  |                    |  |   | 5,341              |  |  |                        | 5,517 
|Cali Bamboo, LLC (Revolver) (e)                                              |  | Construction & Building                       |  | L+8.50%                   |  |                   | 9.48                                                           | %    |          | 7/10/2020  |           |  | 1,624  |                    |  |   | 996                |  |  |                        | 996   
|California Pizza Kitchen,
    Inc.                                           |  | Beverage, Food & Tobacco                      |  | L+6.00%                   |  |                   | 7.00                                                           | %    |          | 8/23/2022  |           |  | 6,965  |                    |  |   | 6,895              |  |  |                        | 6,966 
|Corbett Technology Solutions,
    Inc. (f)                                   |  | High Tech Industries                          |  | L+7.00%                   |  |                   | 7.98                                                           | %    |          | 11/7/2021  |           |  | 4,444  |                    |  |   | 4,382              |  |  |                        | 4,481 
|Corbett Technology Solutions,
    Inc. (Revolver) (e)                        |  | High Tech Industries                          |  | L+7.00%                   |  |                   | 7.98                                                           | %    |          | 11/7/2021  |           |  | 867    |                    |  |   | -                  |  |  |                        | -     
|Cornerstone Detention
    Products, Inc. (j)                                 |  | Construction & Building                       |  | L+10.50%                  |  |                   | 10.50% Cash/1.00%
                                         PIK |      |          | 4/8/2019   |           |  | 3,676  |                    |  |   | 3,644              |  |  |                        | 3,568 
|Cornerstone Detention
    Products, Inc. (Revolver) (e)                      |  | Construction & Building                       |  | L+9.50%                   |  |                   | 10.50                                                          | %    |          | 4/8/2019   |           |  | 400    |                    |  |   | -                  |  |  |                        | -     
|CRCI Holdings, Inc.                                                          |  | Utilities: Electric                           |  | L+5.50%                   |  |                   | 6.65                                                           | %    |          | 8/31/2023  |           |  | 2,866  |                    |  |   | 2,840              |  |  |                        | 2,872 
|Cyalume Technologies
    Holdings, Inc. (f)                                  |  | Aerospace & Defense                           |  | L+9.00%                   |  |                   | 10.00                                                          | %    |          | 5/18/2020  |           |  | 4,222  |                    |  |   | 4,142              |  |  |                        | 4,348 
|Cyalume Technologies
    Holdings, Inc. (Delayed Draw)                       |  | Aerospace & Defense                           |  | L+9.00%                   |  |                   | 10.00                                                          | %    |          | 5/18/2020  |           |  | 376    |                    |  |   | 376                |  |  |                        | 387   
|Cyalume Technologies
    Holdings, Inc. (Revolver) (e)                       |  | Aerospace & Defense                           |  | L+9.00%                   |  |                   | 10.00                                                          | %    |          | 5/18/2020  |           |  | 1,528  |                    |  |   | 306                |  |  |                        | 306   
|Diesel Direct Holdings,
    Inc. (f)                                         |  | Energy: Oil & Gas                             |  | L+7.00%                   |  |                   | 7.98                                                           | %    |          | 2/17/2020  |           |  | 5,156  |                    |  |   | 5,156              |  |  |                        | 5,208 
|EB Employee Solutions,
    LLC (f)                                           |  | Services: Business                            |  | L+8.50%                   |  |                   | 10.00                                                          | %    |          | 2/28/2019  |           |  | 3,268  |                    |  |   | 3,228              |  |  |                        | 3,157 
|Echelon Funding I, LLC
    (Delay Draw) (e) (k) (l)                          |  | Banking, Finance, Insurance, & Real Estate    |  | L+10.25%                  |  |                   | 11.03                                                          | %    |          | 2/24/2021  |           |  | 15,000 |                    |  |   | 14,286             |  |  |                        | 14,290
|Edge Systems Holdings
    Corp.                                              |  | Healthcare & Pharmaceuticals                  |  | L+8.00%                   |  |                   | 9.00                                                           | %    |          | 12/1/2021  |           |  | 3,717  |                    |  |   | 3,646              |  |  |                        | 3,761 
|Edge Systems Holdings
    Corp. (Revolver) (e)                               |  | Healthcare & Pharmaceuticals                  |  | L+8.00%                   |  |                   | 9.00                                                           | %    |          | 12/1/2021  |           |  | 260    |                    |  |   | -                  |  |  |                        | -     
|Familia Dental Group
    Holdings, LLC (f)                                   |  | Healthcare & Pharmaceuticals                  |  | L+8.00%                   |  |                   | 8.98                                                           | %    |          | 4/8/2021   |           |  | 5,363  |                    |  |   | 5,293              |  |  |                        | 5,470 
|Familia Dental Group
    Holdings, LLC (Delayed Draw)                        |  | Healthcare & Pharmaceuticals                  |  | L+8.00%                   |  |                   | 8.98                                                           | %    |          | 4/8/2021   |           |  | 516    |                    |  |   | 516                |  |  |                        | 526   
|Familia Dental Group
    Holdings, LLC (Revolver) (e)                        |  | Healthcare & Pharmaceuticals                  |  | L+8.00%                   |  |                   | 8.98                                                           | %    |          | 4/8/2021   |           |  | 573    |                    |  |   | 115                |  |  |                        | 115   
|Forman Mills, Inc. (f)                                                       |  | Retail                                        |  | L+7.50%                   |  |                   | 8.50                                                           | %    |          | 10/4/2021  |           |  | 8,500  |                    |  |   | 8,344              |  |  |                        | 8,377 
|InMobi Pte, Ltd. (Delayed
    Draw) (e) (k) (l)                              |  | Media: Advertising, Printing & Publishing     |  | L+10.17%                  |  |                   | 11.17                                                          | %    |          | 9/1/2018   |           |  | 10,000 |                    |  |   | 6,667              |  |  |                        | 6,623 
|Inteva Products, LLC                                                         |  | Automotive                                    |  | L+8.50%                   |  |                   | 9.75                                                           | %    |          | 9/8/2021   |           |  | 1,956  |                    |  |   | 1,946              |  |  |                        | 1,965 
|Jerry Lee Radio, LLC                                                         |  | Media: Broadcasting & Subscription            |  | L+9.50%                   |  |                   | 10.48                                                          | %    |          | 12/17/2020 |           |  | 13,230 |                    |  |   | 12,969             |  |  |                        | 13,495
|Landpoint, LLC                                                               |  | Energy: Oil & Gas                             |  | L+12.75%                  |  |                   | 12.00% Cash/2.25%
                                         PIK | (m)  |          | 12/20/2019 |           |  | 2,521  |                    |  |   | 2,495              |  |  |                        | 2,434 
|Landpoint, LLC (Revolver) (e)                                                |  | Energy: Oil & Gas                             |  | L+10.50%                  |  |                   | 12.00                                                          | %    |          | 12/20/2019 |           |  | 313    |                    |  |   | -                  |  |  |                        | -     
|L.A.R.K. Industries,
    Inc.                                                |  | Construction & Building                       |  | L+8.50%                   |  |                   | 9.50                                                           | %    |          | 9/3/2019   |           |  | 8,510  |                    |  |   | 8,375              |  |  |                        | 8,565 
|Liftforward SPV II, LLC (e) (l)                                              |  | Banking, Finance, Insurance, & Real Estate    |  | L+10.75%                  |  |                   | 11.73                                                          | %    |          | 11/10/2020 |           |  | 10,000 |                    |  |   | 3,482              |  |  |                        | 3,522 
|Luxury Optical Holdings
    Co.                                              |  | Retail                                        |  | L+11.50%                  |  |                   | 9.00% Cash/3.50%
                                         PIK  |      |          | 9/12/2019  |           |  | 4,038  |                    |  |   | 3,995              |  |  |                        | 3,911 
|Luxury Optical Holdings
    Co. (Revolver) (e)                               |  | Retail                                        |  | L+8.00%                   |  |                   | 9.00% Cash                                                     |      |          | 9/12/2019  |           |  | 273    |                    |  |   | -                  |  |  |                        | -     
|Madison Logic, Inc. (f)                                                      |  | Services: Business                            |  | L+8.00%                   |  |                   | 8.98                                                           | %    |          | 11/30/2021 |           |  | 10,434 |                    |  |   | 10,235             |  |  |                        | 10,570
|Madison Logic, Inc. (Delayed
    Draw) (e) (k)                               |  | Services: Business                            |  | L+8.00%                   |  |                   | 8.98                                                           | %    |          | 11/30/2021 |           |  | 4,818  |                    |  |   | -                  |  |  |                        | -     
|Madison Logic, Inc. (Revolver) (e)                                           |  | Services: Business                            |  | L+8.00%                   |  |                   | 8.98                                                           | %    |          | 11/30/2021 |           |  | 988    |                    |  |   | -                  |  |  |                        | -     
|Mid-West Wholesale Hardware
    Co. (f)                                      |  | Wholesale                                     |  | L+7.50%                   |  |                   | 8.48                                                           | %    |          | 2/9/2022   |           |  | 11,970 |                    |  |   | 11,736             |  |  |                        | 11,898
|Mid-West Wholesale Hardware
    Co. (Revolver) (e)                           |  | Wholesale                                     |  | L+7.50%                   |  |                   | 8.48                                                           | %    |          | 2/9/2022   |           |  | 4,421  |                    |  |   | 1,137              |  |  |                        | 1,137 
|Miles Partnership LLC                                                        |  | Hotels, Gaming & Leisure                      |  | L+12.50%                  |  |                   | 10.65% Cash/3.00%
                                         PIK |      |          | 3/24/2021  |           |  | 6,119  |                    |  |   | 6,066              |  |  |                        | 6,126 
|Miles Partnership LLC
    (Delayed Draw) (e) (k)                             |  | Hotels, Gaming & Leisure                      |  | L+12.50%                  |  |                   | 10.65% Cash/3.00%
                                         PIK |      |          | 3/24/2021  |           |  | 1,454  |                    |  |   | 1,106              |  |  |                        | 1,107 
|Miles Partnership LLC
    (Revolver) (e)                                     |  | Hotels, Gaming & Leisure                      |  | L+12.50%                  |  |                   | 10.65% Cash/3.00%
                                         PIK |      |          | 3/24/2021  |           |  | 320    |                    |  |   | -                  |  |  |                        | -     
|O'Brien Industrial Holdings,
    LLC                                         |  | Metals & Mining                               |  | L+7.75%                   |  |                   | 8.75                                                           | %    |          | 5/13/2019  |           |  | 5,286  |                    |  |   | 5,225              |  |  |                        | 5,363 
|Peerless Network, Inc. (f)                                                   |  | Telecommunications                            |  | L+9.25%                   |  |                   | 9.28% Cash/0.75%
                                         PIK  | (n)  |          | 12/11/2020 |           |  | 3,500  |                    |  |   | 3,434              |  |  |                        | 3,498 
|PeopleConnect Intermediate,
    LLC (formerly Intelius, Inc.)                |  | Services: Consumer                            |  | L+5.50%                   |  |                   | 6.65                                                           | %    |          | 7/1/2020   |           |  | 4,614  |                    |  |   | 4,542              |  |  |                        | 4,642 
|PeopleConnect Intermediate,
    LLC (formerly Intelius, Inc.)                |  | Services: Consumer                            |  | L+11.50%                  |  |                   | 12.65                                                          | %    |          | 7/1/2020   |           |  | 4,807  |                    |  |   | 4,729              |  |  |                        | 4,795 
|PeopleConnect Intermediate,
    LLC (formerly Intelius, Inc.) (Revolver) (e) |  | Services: Consumer                            |  | L+8.50%                   |  |                   | 9.50                                                           | %    |          | 8/11/2017  |           |  | 236    |                    |  |   | -                  |  |  |                        | -     
|Precision Toxicology,
    LLC (f)                                            |  | Healthcare & Pharmaceuticals                  |  | L+11.50%                  |  |                   | 10.48% Cash/2.00%
                                         PIK |      |          | 3/24/2020  |           |  | 4,195  |                    |  |   | 4,143              |  |  |                        | 4,195 
|Repay Holdings, LLC                                                          |  | Banking, Finance, Insurance, & Real Estate    |  | L+9.00%                   |  |                   | 9.98                                                           | %    |          | 9/1/2021   |           |  | 11,850 |                    |  |   | 11,663             |  |  |                        | 11,880
|Repay Holdings, LLC (Revolver) (e)                                           |  | Banking, Finance, Insurance, & Real Estate    |  | L+9.00%                   |  |                   | 9.98                                                           | %    |          | 9/1/2021   |           |  | 1,200  |                    |  |   | -                  |  |  |                        | -     
|Rockdale Blackhawk, LLC (g)                                                  |  | Healthcare & Pharmaceuticals                  |  | L+11.00%                  |  |                   | 12.00                                                          | %    |          | 3/31/2020  |           |  | 10,923 |                    |  |   | 10,202             |  |  |                        | 10,933
|Rockdale Blackhawk, LLC
    (Revolver) (g)                                   |  | Healthcare & Pharmaceuticals                  |  | L+11.00%                  |  |                   | 12.00                                                          | %    |          | 3/31/2020  |           |  | 1,849  |                    |  |   | 1,849              |  |  |                        | 1,849 



See Notes to Consolidated Financial
Statements.

7











MONROE CAPITAL CORPORATION



CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)

(unaudited)



March 31, 2017

(in thousands, except for units)





|Portfolio
    Company (a)                                    |  | Industry                                   |  | Spread
    AboveIndex (b) |  | Interest
    Rate |                                                                |      | Maturity |            | Principal |  |        | Amortized
    Cost |  |   | Fair
    Value (c) |         |  | %
    ofNet Assets (d) |       
|------------------------------------------------------------ |  | ------------------------------------------ |  | ------------------------- |  | ----------------- | -------------------------------------------------------------- | ---- | -------- | ---------- | --------- |  | ------ | ------------------ |  | - | ------------------ | ------- |  | ---------------------- | ------
|Rockdale Blackhawk, LLC
    (Capex) (g)                      |  | Healthcare & Pharmaceuticals               |  | L+11.00%                  |  |                   | 12.00                                                          | %    |          | 3/31/2020  |           |  | 549    |                    |  | $ | 549                |         |  | $                      | 549   
|Rocket Dog Brands, LLC (g)                                   |  | Consumer Goods: Non-Durable                |  | n/a                       |  |                   | 12.00%
                                         PIK            |      |          | 8/29/2019  |           |  | 1,157  |                    |  |   | 1,157              |         |  |                        | 51    
|Rocket Dog Brands, LLC (g)                                   |  | Consumer Goods: Non-Durable                |  | n/a                       |  |                   | 15.00%
                                         PIK            |      |          | 8/29/2019  |           |  | 422    |                    |  |   | 418                |         |  |                        | 296   
|Rocket Dog Brands, LLC (g)                                   |  | Consumer Goods: Non-Durable                |  | n/a                       |  |                   | 17.00%
                                         PIK            |      |          | 9/30/2017  |           |  | 235    |                    |  |   | 235                |         |  |                        | 176   
|SHI Holdings,
    Inc. (f) (g)                               |  | Healthcare & Pharmaceuticals               |  | L+9.75%                   |  |                   | 10.73                                                          | %    |          | 7/10/2019  |           |  | 2,625  |                    |  |   | 2,596              |         |  |                        | 2,625 
|SHI Holdings, Inc. (Revolver) (e)
    (g)                    |  | Healthcare & Pharmaceuticals               |  | L+9.75%                   |  |                   | 10.73                                                          | %    |          | 7/10/2019  |           |  | 1,773  |                    |  |   | 1,394              |         |  |                        | 1,408 
|SNI Companies (o)                                            |  | Services: Business                         |  | L+8.00%                   |  |                   | 9.00                                                           | %    |          | 12/31/2018 |           |  | 4,837  |                    |  |   | 4,791              |         |  |                        | 4,886 
|SNI Companies (Revolver) (e)                                 |  | Services: Business                         |  | L+8.00%                   |  |                   | 9.00                                                           | %    |          | 12/31/2018 |           |  | 1,250  |                    |  |   | 150                |         |  |                        | 150   
|Shields Land Company
    of Georgia, LLC (l)                 |  | Banking, Finance, Insurance, & Real Estate |  | L+9.50%                   |  |                   | 10.35                                                          | %    |          | 12/28/2017 |           |  | 2,450  |                    |  |   | 2,431              |         |  |                        | 2,460 
|Solaray, LLC                                                 |  | Consumer Goods: Non-Durable                |  | L+6.50%                   |  |                   | 7.61                                                           | %    |          | 9/9/2023   |           |  | 3,288  |                    |  |   | 3,258              |         |  |                        | 3,272 
|Solaray, LLC  (Delayed
    Draw) (e) (k)                     |  | Consumer Goods: Non-Durable                |  | L+6.50%                   |  |                   | 7.61                                                           | %    |          | 9/9/2023   |           |  | 703    |                    |  |   | 161                |         |  |                        | 160   
|Summit Container Corporation (f)
    (g)                     |  | Containers, Packaging & Glass              |  | L+12.00%                  |  |                   | 12.00%
                                         Cash/2.00% PIK |      |          | 1/6/2019   |           |  | 3,591  |                    |  |   | 3,556              |         |  |                        | 3,440 
|Synergy Environmental
    Corporation (f)                    |  | Environmental Industries                   |  | L+8.00%                   |  |                   | 8.98                                                           | %    |          | 4/29/2021  |           |  | 3,111  |                    |  |   | 3,048              |         |  |                        | 3,148 
|Synergy Environmental
    Corporation (f)                    |  | Environmental Industries                   |  | L+8.00%                   |  |                   | 8.98                                                           | %    |          | 4/29/2021  |           |  | 520    |                    |  |   | 510                |         |  |                        | 526   
|Synergy Environmental
    Corporation (Delayed Draw) (e) (k) |  | Environmental Industries                   |  | L+8.00%                   |  |                   | 8.98                                                           | %    |          | 4/29/2018  |           |  | 1,342  |                    |  |   | -                  |         |  |                        | -     
|Synergy Environmental
    Corporation (Revolver) (e)         |  | Environmental Industries                   |  | L+8.00%                   |  |                   | 8.98                                                           | %    |          | 4/29/2021  |           |  | 671    |                    |  |   | 47                 |         |  |                        | 47    
|The Worth Collection,
    Ltd. (f)                           |  | Retail                                     |  | L+8.50%                   |  |                   | 9.48                                                           | %    |          | 9/29/2021  |           |  | 10,863 |                    |  |   | 10,663             |         |  |                        | 10,846
|TPP Operating, Inc. (p)                                      |  | Retail                                     |  | L+6.00%                   |  |                   | 7.5%
                                         PIK              | (i)  |          | 11/8/2018  |           |  | 9,370  |                    |  |   | 9,330              |         |  |                        | 581   
|TPP Operating, Inc. (p)                                      |  | Retail                                     |  | L+6.00%                   |  |                   | 7.50                                                           | %(i) |          | 11/8/2018  |           |  | 4,344  |                    |  |   | 4,344              |         |  |                        | 3,903 
|TPP Operating, Inc. (p)                                      |  | Retail                                     |  | L+9.61%                   |  |                   | 11.11                                                          | %(i) |          | 11/8/2018  |           |  | 5,563  |                    |  |   | 5,563              |         |  |                        | 5,563 
|TRG, LLC                                                     |  | Hotels, Gaming & Leisure                   |  | L+14.09%                  |  |                   | 8.28%
                                         Cash/6.59% PIK  | (q)  |          | 3/31/2021  |           |  | 11,863 |                    |  |   | 11,827             |         |  |                        | 11,910
|TRG, LLC (Revolver)                                          |  | Hotels, Gaming & Leisure                   |  | L+9.50%                   |  |                   | 10.28                                                          | %    |          | 3/31/2021  |           |  | 131    |                    |  |   | 131                |         |  |                        | 131   
|TRG, LLC (CapEx) (e)                                         |  | Hotels, Gaming & Leisure                   |  | L+9.50%                   |  |                   | 8.28%
                                         Cash/2.00% PIK  |      |          | 3/31/2021  |           |  | 1,614  |                    |  |   | 948                |         |  |                        | 952   
|Vacation Innovations,
    LLC (r)                            |  | Hotels, Gaming & Leisure                   |  | L+8.60%                   |  |                   | 7.98%
                                         Cash/1.60% PIK  | (s)  |          | 8/20/2020  |           |  | 10,455 |                    |  |   | 10,296             |         |  |                        | 10,769
|Vacation Innovations,
    LLC (Revolver) (e)                 |  | Hotels, Gaming & Leisure                   |  | L+7.50%                   |  |                   | 7.98%
                                         Cash/0.50% PIK  |      |          | 8/20/2020  |           |  | 342    |                    |  |   | -                  |         |  |                        | -     
|Vacation Innovations,
    LLC (Delayed Draw) (e) (k)         |  | Hotels, Gaming & Leisure                   |  | L+7.50%                   |  |                   | 7.98%
                                         Cash/0.50% PIK  |      |          | 8/20/2020  |           |  | 2,037  |                    |  |   | -                  |         |  |                        | -     
|Yandy Holding, LLC                                           |  | Retail                                     |  | L+9.00%                   |  |                   | 10.00                                                          | %    |          | 9/30/2019  |           |  | 5,596  |                    |  |   | 5,549              |         |  |                        | 5,484 
|Yandy Holding, LLC (Revolver) (e)                            |  | Retail                                     |  | L+9.00%                   |  |                   | 10.00                                                          | %    |          | 9/30/2019  |           |  | 907    |                    |  |   | -                  |         |  |                        | -     
|Total
    Senior Secured Loans                               |  |                                            |  |                           |  |                   |                                                                |      |          | 346,753    |           |  |        | 307,532            |  |   |                    | 300,223 |  |                        |       
|                                                             |  |                                            |  |                           |  |                   |                                                                |      |          |            |           |  |        |                    |  |   |                    |         |  |                        |       
|Unitranche Loans                                             |  |                                            |  |                           |  |                   |                                                                |      |          |            |           |  |        |                    |  |   |                    |         |  |                        |       
|Collaborative Neuroscience
    Network, LLC (t)              |  | Healthcare & Pharmaceuticals               |  | L+11.50%                  |  |                   | 13.00                                                          | %    |          | 12/27/2017 |           |  | 6,120  |                    |  |   | 6,063              |         |  |                        | 5,854 
|Collaborative Neuroscience
    Network, LLC                  |  | Healthcare & Pharmaceuticals               |  | n/a                       |  |                   | 12.00%
                                         Cash/3.00% PIK |      |          | 4/30/2017  |           |  | 288    |                    |  |   | 288                |         |  |                        | 288   
|Fabco Automotive Corporation                                 |  | Automotive                                 |  | L+11.25%                  |  |                   | 8.00%
                                         Cash/4.25% PIK  |      |          | 4/3/2019   |           |  | 8,681  |                    |  |   | 8,650              |         |  |                        | 3,121 
|Gracelock Industries,
    LLC                                |  | Wholesale                                  |  | L+13.74%                  |  |                   | 11.00%
                                         Cash/4.24% PIK | (u)  |          | 5/7/2019   |           |  | 4,804  |                    |  |   | 4,740              |         |  |                        | 4,583 
|Incipio Technologies,
    Inc. (v)                           |  | Consumer Goods: Non-Durable                |  | L+6.50%                   |  |                   | 7.50                                                           | %    |          | 12/26/2019 |           |  | 14,103 |                    |  |   | 13,878             |         |  |                        | 13,962
|MooreCo, Inc.                                                |  | Consumer Goods: Durable                    |  | L+14.50%                  |  |                   | 13.50%
                                         Cash/2.50% PIK |      |          | 12/27/2017 |           |  | 3,579  |                    |  |   | 3,565              |         |  |                        | 3,579 
|Output Services Group,
    Inc.                              |  | Services: Business                         |  | L+9.00%                   |  |                   | 9.50%
                                         Cash/1.00% PIK  |      |          | 12/17/2020 |           |  | 6,174  |                    |  |   | 6,117              |         |  |                        | 6,260 
|Output Services Group,
    Inc.                              |  | Services: Business                         |  | L+9.00%                   |  |                   | 9.50%
                                         Cash/1.00% PIK  |      |          | 12/17/2020 |           |  | 7,762  |                    |  |   | 7,673              |         |  |                        | 7,878 
|Playtime, LLC                                                |  | Hotels, Gaming & Leisure                   |  | L+8.50%                   |  |                   | 9.00%
                                         Cash/1.00% PIK  |      |          | 12/31/2021 |           |  | 5,343  |                    |  |   | 5,326              |         |  |                        | 4,940 
|Total
    Unitranche Loans                                   |  |                                            |  |                           |  |                   |                                                                |      |          | 56,854     |           |  |        | 56,300             |  |   |                    | 50,465  |  |                        |       
|                                                             |  |                                            |  |                           |  |                   |                                                                |      |          |            |           |  |        |                    |  |   |                    |         |  |                        |       
|Junior Secured Loans                                         |  |                                            |  |                           |  |                   |                                                                |      |          |            |           |  |        |                    |  |   |                    |         |  |                        |       
|AIM Aerospace, Inc.                                          |  | Aerospace & Defense                        |  | L+9.00%                   |  |                   | 10.03                                                          | %    |          | 8/2/2022   |           |  | 5,000  |                    |  |   | 4,936              |         |  |                        | 5,050 
|Confie Seguros Holdings
    II Co.                           |  | Banking, Finance, Insurance, & Real Estate |  | L+9.00%                   |  |                   | 10.25                                                          | %    |          | 5/8/2019   |           |  | 8,594  |                    |  |   | 8,248              |         |  |                        | 8,565 
|CSM Bakery Supplies LLC                                      |  | Beverage, Food & Tobacco                   |  | L+7.75%                   |  |                   | 8.76                                                           | %    |          | 7/3/2021   |           |  | 5,792  |                    |  |   | 5,792              |         |  |                        | 5,039 
|Education Corporation
    of America                         |  | Services: Consumer                         |  | L+11.00%                  |  |                   | 12.15                                                          | %    |          | 9/30/2017  |           |  | 625    |                    |  |   | 616                |         |  |                        | 625   
|Mergermarket USA, Inc.                                       |  | Media: Broadcasting & Subscription         |  | L+6.50%                   |  |                   | 7.60                                                           | %    |          | 12/19/2021 |           |  | 4,500  |                    |  |   | 4,404              |         |  |                        | 4,466 
|Micro Holdings Corp.                                         |  | High Tech Industries                       |  | L+7.50%                   |  |                   | 8.50                                                           | %    |          | 7/8/2022   |           |  | 5,590  |                    |  |   | 5,480              |         |  |                        | 5,660 
|Pre-Paid Legal Services,
    Inc. (Legal Shield)             |  | Services: Consumer                         |  | L+9.00%                   |  |                   | 10.25                                                          | %    |          | 7/1/2020   |           |  | 3,000  |                    |  |   | 3,000              |         |  |                        | 3,018 
|Rocket Dog Brands, LLC (g)                                   |  | Consumer Goods: Non-Durable                |  | n/a                       |  |                   | 15.00%
                                         PIK            |      |          | 5/1/2020   |           |  | 2,011  |                    |  |   | 2,011              |         |  |                        | -     
|SCP TPZ Acquisition,
    Inc.                                |  | Media: Diversified & Production            |  | L+8.25%                   |  |                   | 9.35                                                           | %    |          | 5/29/2022  |           |  | 5,000  |                    |  |   | 4,940              |         |  |                        | 4,937 
|Sterling Merger Sub Corp.                                    |  | Services: Business                         |  | L+7.75%                   |  |                   | 8.90                                                           | %    |          | 6/19/2023  |           |  | 5,000  |                    |  |   | 4,960              |         |  |                        | 4,900 
|Total
    Junior Secured Loans                               |  |                                            |  |                           |  |                   |                                                                |      |          |            |           |  | 45,112 |                    |  |   | 44,387             |         |  |                        | 42,260



See Notes to Consolidated Financial
Statements.



8







MONROE CAPITAL CORPORATION



CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)

(unaudited)



March 31, 2017

(in thousands, except for units)





|Portfolio
    Company (a)                                                                                                 |  | Industry                                   |  | Spread
    AboveIndex (b) |  | Interest
    Rate |                                                     |     | Maturity |            | Principal |   |         | Amortized
    Cost |  |   | Fair
    Value (c) |  |  | %
    ofNet Assets (d) |        
|------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------ |  | ------------------------- |  | ----------------- | --------------------------------------------------- | --- | -------- | ---------- | --------- | - | ------- | ------------------ |  | - | ------------------ |  |  | ---------------------- | -------
|Equity Securities                                                                                                         |  |                                            |  |                           |  |                   |                                                     |     |          |            |           |   |         |                    |  |   |                    |  |  |                        |        
|AdTheorent, Inc. (128,866
    units) (w)                                                                                  |  | Media: Advertising, Printing & Publishing  |  | -                         |  |                   | -                                                   | (x) |          | -          |           |   | -       |                    |  | $ | 129                |  |  | $                      | 172    
|American Community Homes,
    Inc. (warrant to purchase up to 9.0% of the equity) (g)                                     |  | Banking, Finance, Insurance, & Real Estate |  | -                         |  |                   | -                                                   | (x) |          | 10/9/2024  |           |   | -       |                    |  |   | -                  |  |  |                        | 1,362  
|Collaborative Neuroscience
    Network, LLC (warrant to purchase up to 4 LLC units) (w)                                   |  | Healthcare & Pharmaceuticals               |  | -                         |  |                   | -                                                   | (x) |          | 12/27/2022 |           |   | -       |                    |  |   | -                  |  |  |                        | -      
|Cyalume Technologies
    Holdings, Inc. - Series D Preferred Stock (3.06 shares) (w)                                      |  | Aerospace & Defense                        |  | -                         |  |                   | -                                                   | (x) |          | -          |           |   | -       |                    |  |   | -                  |  |  |                        | 693    
|Education Corporation
    of America - Series G Preferred Stock (8,333 shares) (w)                                        |  | Services: Consumer                         |  | n/a                       |  |                   | 12.00                                               | %   |          | -          |           |   | -       |                    |  |   | 8,125              |  |  |                        | 8,083  
|Fabco Automotive Corporation
    (warrant to purchase up to 1.87% of the equity) (w)                                      |  | Automotive                                 |  | -                         |  |                   | -                                                   | (x) |          | -          |           |   | -       |                    |  |   | -                  |  |  |                        | -      
|InMobi Pte, Ltd. (represents
    the right to purchase 2.80% of the equity) (l) (w)                                       |  | Media: Advertising, Printing & Publishing  |  | -                         |  |                   | -                                                   | (x) |          | 9/18/2025  |           |   | -       |                    |  |   | -                  |  |  |                        | 44     
|O'Brien Industrial Holdings,
    LLC (warrants to purchase up to 2.44% of certain affiliated entities of the company) (w) |  | Metals & Mining                            |  | -                         |  |                   | -                                                   | (x) |          | 5/13/2024  |           |   | -       |                    |  |   | -                  |  |  |                        | -      
|Output Services Group,
    Inc. (warrant to purchase up to 3.89% of the common stock) (w)                                 |  | Services: Business                         |  | -                         |  |                   | -                                                   | (x) |          | 12/17/2022 |           |   | -       |                    |  |   | -                  |  |  |                        | 918    
|Playtime, LLC - Preferred
    Units (8,665 units) (w)                                                                     |  | Hotels, Gaming & Leisure                   |  | -                         |  |                   | -                                                   | (x) |          | -          |           |   | -       |                    |  |   | 200                |  |  |                        | -      
|Rockdale Blackhawk, LLC
    - LLC Units (11.56% of the LLC interest) (g)                                                  |  | Healthcare & Pharmaceuticals               |  | -                         |  |                   | -                                                   |     |          | -          |           |   | -       |                    |  |   | 1,093              |  |  |                        | 13,354 
|Rocket Dog Brands, LLC
    - Common Units (75,502 units) (g)                                                              |  | Consumer Goods: Non-Durable                |  | -                         |  |                   | -                                                   | (x) |          | -          |           |   | -       |                    |  |   | -                  |  |  |                        | -      
|Rocket Dog Brands, LLC
    - Preferred Units (10 units) (g)                                                               |  | Consumer Goods: Non-Durable                |  | -                         |  |                   | 15.00%
                                         PIK | (y) |          | -          |           |   | -       |                    |  |   | 967                |  |  |                        | -      
|SHI Holdings, Inc. (24
    shares of common stock) (g)                                                                    |  | Healthcare & Pharmaceuticals               |  | -                         |  |                   | -                                                   | (x) |          | -          |           |   | -       |                    |  |   | 27                 |  |  |                        | 458    
|Summit Container Corporation
    (warrant to purchase up to 19.50% of the equity) (g)                                     |  | Containers, Packaging & Glass              |  | -                         |  |                   | -                                                   | (x) |          | 1/6/2024   |           |   | -       |                    |  |   | -                  |  |  |                        | -      
|The Tie Bar Operating
    Company, LLC - Class A Preferred Units (1,275 units) (w)                                        |  | Retail                                     |  | -                         |  |                   | -                                                   |     |          | -          |           |   | -       |                    |  |   | 86                 |  |  |                        | 117    
|The Tie Bar Operating
    Company, LLC - Class B Preferred Units (1,275 units) (w)                                        |  | Retail                                     |  | -                         |  |                   | -                                                   |     |          | -          |           |   | -       |                    |  |   | 1                  |  |  |                        | -      
|TPP Acquisition, Inc.
    (829 shares of common stock) (p)                                                                |  | Retail                                     |  | -                         |  |                   | -                                                   | (x) |          | -          |           |   |         |                    |  |   | -                  |  |  |                        | -      
|TPP Operating, Inc. (40
    shares of common stock) (p)                                                                   |  | Retail                                     |  | -                         |  |                   | -                                                   | (x) |          | -          |           |   | -       |                    |  |   | 3,255              |  |  |                        | -      
|Total
    Equity Securities                                                                                               |  |                                            |  |                           |  |                   |                                                     |     |          |            |           |   |         |                    |  |   | 13,883             |  |  |                        | 25,201 
|TOTAL
    INVESTMENTS                                                                                                     |  |                                            |  |                           |  |                   |                                                     |     |          |            |           | $ | 348,662 |                    |  | $ | 422,102            |  |  | $                      | 418,149






| | (a) | All of our investments are issued by eligible U.S. portfolio
companies, as defined in the Investment Company Act of 1940 (the “1940 Act”), unless otherwise noted. All investments
are non-controlled/non-affiliate company investments, unless otherwise noted. All of our investments are issued by U.S. portfolio
companies except for InMobi Pte, Ltd. which is an international company headquartered in California.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | The majority of the investments bear interest at a rate
that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”) or Prime Rate (“Prime”
or “P”) which reset daily, monthly, quarterly, or semiannually. For each such investment, the Company has provided
the spread over LIBOR or Prime and the current contractual interest rate in effect at March 31, 2017. Certain investments are
subject to a LIBOR or Prime interest rate floor.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Because there is no readily available market value for
these investments, the fair value of these investments is determined in good faith by our board of directors as required by the
Investment Company Act of 1940. (See Note 4 in the accompanying notes to the consolidated financial statements.)
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | Percentages are based on net assets of $239,606 as of
March 31, 2017.
| | --- | ---------------------------------------------------------------------



| | (e) | All or a portion of this commitment was unfunded at March
31, 2017. As such, interest is earned only on the funded portion of this commitment.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | All of this loan is held in the Company’s wholly-owned
subsidiary, Monroe Capital Corporation SBIC, LP and is therefore not collateral to the Company’s revolving credit facility.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (g) | As defined in the 1940 Act, the Company is deemed to
be an “Affiliated Person” of the portfolio company as it owns five percent or more of the portfolio company’s
voting securities. See Note 5 in the accompanying notes to the consolidated financial statements for additional information on
transactions in which the issuer was an Affiliated Person (but not a portfolio company that the Company is deemed to control).
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (h) | This is a demand note with no stated maturity.
| | --- | ----------------------------------------------



See Notes to Consolidated Financial
Statements.



9







MONROE CAPITAL CORPORATION



CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)

(unaudited)



March 31, 2017

(in thousands, except for units)



| | (i) | This position was on non-accrual status as of March 31,
2017, meaning that the Company has ceased accruing interest income on the position. See Note 2 in the accompanying notes to the
consolidated financial statements for additional information on the Company's accounting policies.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (j) | A portion of this loan (principal of $2,206) is held
in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP and is therefore not collateral to the Company’s
revolving credit facility.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (k) | This delayed draw loan requires that certain financial
covenants be met by the portfolio company prior to any fundings.
| | --- | -----------------------------------------------------------------------------------------------------------------------



| | (l) | This investment is treated as a non-qualifying investment
under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time
the acquisition is made, qualifying assets represent at least 70% of the Company’s total assets. As of March 31, 2017, non-qualifying
assets totaled 6.14% of the Company’s total assets.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (m) | The PIK portion of the interest rate for Landpoint, LLC
is structured as a fee paid upon the termination of the commitment. The fee currently accrues at 2.25% per annum.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (n) | The PIK portion of the interest rate for Peerless Network,
Inc. is structured as a fee paid upon the termination of the commitment. The fee currently accrues at 0.75% per annum.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (o) | A portion of this loan (principal of $3,102) is held
in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP and is therefore not collateral to the Company’s
revolving credit facility.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (p) | As defined in the 1940 Act, the Company is deemed to
be both an “Affiliated Person” of and to “Control” this portfolio company as it owns more than 25% in
company’s voting securities. See Note 5 in the accompanying notes to the consolidated financial statements for additional
information on transactions in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed
to Control.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (q) | A portion of the PIK interest rate for TRG, LLC is structured
as a fee paid upon the termination of the commitment. The fee currently accrues at 4.59% per annum.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (r) | A portion of this loan (principal of $4,617) is held
in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP and is therefore not collateral to the Company’s
revolving credit facility.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (s) | The PIK portion of the interest rate for Vacation Innovations,
LLC is structured as a fee paid upon the termination of the commitment. The fee currently accrues at 1.10% per annum.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (t) | The sale of a portion of this loan does not qualify for
sale accounting under ASC Topic 860 — Transfers and Servicing, and therefore, the entire unitranche loan asset remains in
the Consolidated Schedule of Investments.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (u) | The PIK portion of the interest rate for Gracelock Industries,
LLC is structured as a fee paid upon the termination of the commitment. The fee currently accrues at 4.24% per annum.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (v) | A portion of this loan (principal of $5,171) is held
in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP and is therefore not collateral to the Company’s
revolving credit facility.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (w) | Represents less than 5% ownership of the portfolio company’s
voting securities.
| | --- | -------------------------------------------------------------------------------



| | (x) | Represents a non-income producing security.
| | --- | -------------------------------------------



| | (y) | This position includes a PIK dividend and is currently
on non-accrual status.
| | --- | -----------------------------------------------------------------------------



n/a - not applicable



See Notes to Consolidated Financial Statements.



10







MONROE CAPITAL CORPORATIONCONSOLIDATED SCHEDULE OF INVESTMENTSDecember 31, 2016(in thousands, except for units)



|Portfolio
    Company (a)                                  |  | Industry |                                                | SpreadAboveIndex (b) |  | InterestRate |         | Maturity |  | Principal |                           | AmortizedCost |  | FairValue (c) |            | %
    of NetAssets (d)
|---------------------------------------------------------- |  | -------- | ---------------------------------------------- | -------------------- |  | ------------ | ------- | -------- |  | --------- | ------------------------- | ------------- |  | ------------- | ---------- | ----------------------
|Senior
    Secured Loans                                   |  |          |                                                |                      |  |              |         |          |  |           |                           |               |  |               |            |                       
|360
    Holdings III Corp.                                 |  |          | Consumer
    Goods: Non-Durable                |                      |  |              | L+9.00  | %        |  |           | 10.00                     | %             |  |               | 10/1/2021  |                       
|AdTheorent,
    Inc. (Revolver) (e)                        |  |          | Media:
    Advertising, Printing & Publishing  |                      |  |              | L+8.50  | %        |  |           | 9.26                      | %             |  |               | 12/22/2021 |                       
|AdTheorent,
    Inc.                                       |  |          | Media:
    Advertising, Printing & Publishing  |                      |  |              | L+8.50  | %        |  |           | 9.26                      | %             |  |               | 12/22/2021 |                       
|All
    Holding Company, LLC (f)                           |  |          | Beverage,
    Food & Tobacco                   |                      |  |              | L+7.00  | %        |  |           | 7.76                      | %             |  |               | 11/15/2021 |                       
|American
    Community Homes, Inc. (g)                     |  |          | Banking,
    Finance, Insurance & Real Estate  |                      |  |              | L+8.00  | %        |  |           | 9.50                      | %             |  |               | 7/22/2019  |                       
|American
    Community Homes, Inc. (g)                     |  |          | Banking,
    Finance, Insurance & Real Estate  |                      |  |              | L+12.50 | %        |  |           | 9.50%
    Cash/4.50% PIK  |               |  |               | 7/22/2019  |                       
|American
    Community Homes, Inc. (g)                     |  |          | Banking,
    Finance, Insurance & Real Estate  |                      |  |              | L+12.50 | %        |  |           | 9.50%
    Cash/4.50% PIK  |               |  |               | n/a        | (h)                   
|Answers
    Corporation                                    |  |          | High
    Tech Industries                       |                      |  |              | P+6.25  | %        |  |           | 10.00                     | %(i)          |  |               | 10/1/2021  |                       
|BC
    Equity Ventures LLC                                 |  |          | Hotels,
    Gaming & Leisure                   |                      |  |              | L+6.50  | %        |  |           | 7.50                      | %             |  |               | 8/31/2022  |                       
|BC
    Equity Ventures LLC                                 |  |          | Hotels,
    Gaming & Leisure                   |                      |  |              | L+6.50  | %        |  |           | 7.50                      | %             |  |               | 8/31/2022  |                       
|BCC
    Software, LLC (f)                                  |  |          | High
    Tech Industries                       |                      |  |              | L+8.00  | %        |  |           | 9.00                      | %             |  |               | 6/20/2019  |                       
|BCC
    Software, LLC (Revolver) (e)                       |  |          | High
    Tech Industries                       |                      |  |              | L+8.00  | %        |  |           | 9.00                      | %             |  |               | 6/20/2019  |                       
|Beaver-Visitec
    International Holdings, Inc.            |  |          | Healthcare
    & Pharmaceuticals               |                      |  |              | L+5.00  | %        |  |           | 6.00                      | %             |  |               | 8/19/2023  |                       
|Bluestem
    Brands, Inc.                                  |  |          | Consumer
    Goods: Non-Durable                |                      |  |              | L+7.50  | %        |  |           | 8.50                      | %             |  |               | 11/6/2020  |                       
|Cali
    Bamboo, LLC                                       |  |          | Construction
    & Building                    |                      |  |              | L+8.50  | %        |  |           | 9.26                      | %             |  |               | 7/10/2020  |                       
|Cali
    Bamboo, LLC (Revolver) (e)                        |  |          | Construction
    & Building                    |                      |  |              | L+8.50  | %        |  |           | 9.26                      | %             |  |               | 7/10/2020  |                       
|California
    Pizza Kitchen, Inc.                         |  |          | Beverage,
    Food & Tobacco                   |                      |  |              | L+6.00  | %        |  |           | 7.00                      | %             |  |               | 8/23/2022  |                       
|Corbett
    Technology Solutions, Inc. (f)                 |  |          | High
    Tech Industries                       |                      |  |              | L+7.00  | %        |  |           | 7.76                      | %             |  |               | 11/7/2021  |                       
|Corbett
    Technology Solutions, Inc.
    (Revolver) (e)  |  |          | High
    Tech Industries                       |                      |  |              | L+7.00  | %        |  |           | 7.76                      | %             |  |               | 11/7/2021  |                       
|Cornerstone
    Detention Products, Inc. (j)               |  |          | Construction
    & Building                    |                      |  |              | L+10.50 | %        |  |           | 10.50%
    Cash/1.00% PIK |               |  |               | 4/8/2019   |                       
|Cornerstone
    Detention Products, Inc. (Revolver) (e)    |  |          | Construction
    & Building                    |                      |  |              | L+9.50  | %        |  |           | 10.50                     | %             |  |               | 4/8/2019   |                       
|CRCI
    Holdings, Inc.                                    |  |          | Utilities:
    Electric                        |                      |  |              | L+5.50  | %        |  |           | 6.50                      | %             |  |               | 8/31/2023  |                       
|Cyalume
    Technologies Holdings, Inc. (f)                |  |          | Aerospace
    & Defense                        |                      |  |              | L+9.00  | %        |  |           | 10.00                     | %             |  |               | 5/18/2020  |                       
|Cyalume
    Technologies Holdings, Inc.
    (Delayed Draw) |  |          | Aerospace
    & Defense                        |                      |  |              | L+9.00  | %        |  |           | 10.00                     | %             |  |               | 5/18/2020  |                       
|Cyalume
    Technologies Holdings, Inc. (Revolver) (e)     |  |          | Aerospace
    & Defense                        |                      |  |              | L+9.00  | %        |  |           | 10.00                     | %             |  |               | 5/18/2020  |                       
|Diesel
    Direct Holdings, Inc. (f)                       |  |          | Energy:
    Oil & Gas                          |                      |  |              | L+7.00  | %        |  |           | 7.76                      | %             |  |               | 2/17/2020  |                       
|EB
    Employee Solutions, LLC (f)                         |  |          | Services:
    Business                         |                      |  |              | L+8.50  | %        |  |           | 10.00                     | %             |  |               | 2/28/2019  |                       
|Edge
    Systems Holdings Corporation                      |  |          | Healthcare
    & Pharmaceuticals               |                      |  |              | L+8.00  | %        |  |           | 9.00                      | %             |  |               | 11/29/2021 |                       
|Edge
    Systems Holdings Corporation (Revolver) (e)       |  |          | Healthcare
    & Pharmaceuticals               |                      |  |              | L+8.00  | %        |  |           | 9.00                      | %             |  |               | 11/29/2021 |                       
|Familia
    Dental Group Holdings, LLC (f)                 |  |          | Healthcare
    & Pharmaceuticals               |                      |  |              | L+8.00  | %        |  |           | 8.76                      | %             |  |               | 4/8/2021   |                       
|Familia
    Dental Group Holdings, LLC
    (Delayed Draw)  |  |          | Healthcare
    & Pharmaceuticals               |                      |  |              | L+8.00  | %        |  |           | 8.76                      | %             |  |               | 4/8/2021   |                       
|Familia
    Dental Group Holdings, LLC (Revolver) (e)      |  |          | Healthcare
    & Pharmaceuticals               |                      |  |              | L+8.00  | %        |  |           | 8.76                      | %             |  |               | 4/8/2021   |                       
|Forman
    Mills, Inc. (f)                                 |  |          | Retail                                         |                      |  |              | L+7.50  | %        |  |           | 8.50                      | %             |  |               | 10/4/2021  |                       
|G&M
    Opco LLC (f)                                       |  |          | Construction
    & Building                    |                      |  |              | L+7.50  | %        |  |           | 8.26                      | %             |  |               | 6/23/2020  |                       
|InMobi
    Pte, Ltd. (Delayed Draw) (e) (k) (l)            |  |          | Media:
    Advertising, Printing & Publishing  |                      |  |              | L+10.17 | %        |  |           | 10.98                     | %             |  |               | 9/1/2018   |                       
|Inteva
    Products, LLC                                   |  |          | Automotive                                     |                      |  |              | L+8.50  | %        |  |           | 9.75                      | %             |  |               | 9/8/2021   |                       
|Jerry
    Lee Radio, LLC                                   |  |          | Media:
    Broadcasting & Subscription         |                      |  |              | L+9.50  | %        |  |           | 10.26                     | %             |  |               | 12/17/2020 |                       
|Landpoint,
    LLC                                         |  |          | Energy:
    Oil & Gas                          |                      |  |              | L+12.75 | %        |  |           | 12.00%
    Cash/2.25% PIK | (m)           |  |               | 12/20/2019 |                       
|Landpoint,
    LLC (Revolver) (e)                          |  |          | Energy:
    Oil & Gas                          |                      |  |              | L+10.50 | %        |  |           | 12.00                     | %             |  |               | 12/20/2019 |                       
|L.A.R.K.
    Industries, Inc.                              |  |          | Construction
    & Building                    |                      |  |              | L+7.00  | %        |  |           | 8.00                      | %             |  |               | 9/3/2019   |                       
|Liftforward
    SPV II, LLC (e) (l)                        |  |          | Banking,
    Finance, Insurance, & Real Estate |                      |  |              | L+10.75 | %        |  |           | 11.51                     | %             |  |               | 11/10/2020 |                       
|Luxury
    Optical Holdings Co.                            |  |          | Retail                                         |                      |  |              | L+11.50 | %        |  |           | 9.00%
    Cash/3.50% PIK  |               |  |               | 9/12/2019  |                       



See Notes to Consolidated Financial
Statements.



11







MONROE CAPITAL CORPORATION
 
CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
December 31, 2016
(in thousands, except for units)



|Portfolio
    Company (a)                                                    |  | Industry |                                               | SpreadAboveIndex (b) |  | InterestRate |         | Maturity |  | Principal |                           | AmortizedCost |  | FairValue (c) |            | %
    of NetAssets (d)
|---------------------------------------------------------------------------- |  | -------- | --------------------------------------------- | -------------------- |  | ------------ | ------- | -------- |  | --------- | ------------------------- | ------------- |  | ------------- | ---------- | ----------------------
|Luxury
    Optical Holdings Co. (Revolver) (e)                               |  |          | Retail                                        |                      |  |              | L+8.00  | %        |  |           | 9.00%
    Cash            |               |  |               | 9/12/2019  |                       
|Madison
    Logic, Inc. (f)                                                  |  |          | Services:
    Business                        |                      |  |              | L+8.00  | %        |  |           | 8.76                      | %             |  |               | 11/30/2021 |                       
|Madison
    Logic, Inc. (Delayed Draw) (e) (k)                               |  |          | Services:
    Business                        |                      |  |              | L+8.00  | %        |  |           | 8.76                      | %             |  |               | 11/30/2021 |                       
|Madison
    Logic, Inc. (Revolver) (e)                                       |  |          | Services:
    Business                        |                      |  |              | L+8.00  | %        |  |           | 8.76                      | %             |  |               | 11/30/2021 |                       
|Miles
    Media Group LLC                                                    |  |          | Hotels,
    Gaming & Leisure                  |                      |  |              | L+11.00 | %        |  |           | 10.00%
    Cash/2.00% PIK |               |  |               | 3/24/2021  |                       
|Miles
    Media Group LLC (Delayed Draw) (e) (k)                             |  |          | Hotels,
    Gaming & Leisure                  |                      |  |              | L+11.00 | %        |  |           | 10.00%
    Cash/2.00% PIK |               |  |               | 3/24/2021  |                       
|Miles
    Media Group LLC (Revolver) (e)                                     |  |          | Hotels,
    Gaming & Leisure                  |                      |  |              | L+11.00 | %        |  |           | 10.00%
    Cash/2.00% PIK |               |  |               | 3/24/2021  |                       
|O’Brien
    Industrial Holdings, LLC                                         |  |          | Metals
    & Mining                           |                      |  |              | L+7.75  | %        |  |           | 8.75                      | %             |  |               | 5/13/2019  |                       
|Peerless
    Network, Inc. (f)                                               |  |          | Telecommunications                            |                      |  |              | L+8.50  | %        |  |           | 9.18%
    Cash/0.75% PIK  | (n)           |  |               | 12/11/2020 |                       
|PeopleConnect
    Intermediate, LLC (formerly Intelius, Inc.)                |  |          | Services:
    Consumer                        |                      |  |              | L+5.50  | %        |  |           | 6.50                      | %             |  |               | 7/1/2020   |                       
|PeopleConnect
    Intermediate, LLC (formerly Intelius, Inc.)                |  |          | Services:
    Consumer                        |                      |  |              | L+11.50 | %        |  |           | 12.50                     | %             |  |               | 7/1/2020   |                       
|PeopleConnect
    Intermediate, LLC (formerly Intelius, Inc.) (Revolver) (e) |  |          | Services:
    Consumer                        |                      |  |              | L+8.50  | %        |  |           | 9.50                      | %             |  |               | 8/11/2017  |                       
|Precision
    Toxicology, LLC (f)                                            |  |          | Healthcare
    & Pharmaceuticals              |                      |  |              | L+11.50 | %        |  |           | 10.26%
    Cash/2.00% PIK |               |  |               | 3/24/2020  |                       
|Repay
    Holdings, LLC                                                      |  |          | Banking,
    Finance, Insurance & Real Estate |                      |  |              | L+9.00  | %        |  |           | 9.76                      | %             |  |               | 9/1/2021   |                       
|Repay
    Holdings, LLC (Revolver) (e)                                       |  |          | Banking,
    Finance, Insurance & Real Estate |                      |  |              | L+9.00  | %        |  |           | 9.76                      | %             |  |               | 9/1/2021   |                       
|Rockdale
    Blackhawk, LLC (g)                                              |  |          | Healthcare
    & Pharmaceuticals              |                      |  |              | L+11.00 | %        |  |           | 12.00                     | %             |  |               | 3/31/2020  |                       
|Rockdale
    Blackhawk, LLC (Revolver) (e) (g)                               |  |          | Healthcare
    & Pharmaceuticals              |                      |  |              | L+11.00 | %        |  |           | 12.00                     | %             |  |               | 3/31/2020  |                       
|Rockdale
    Blackhawk, LLC (Capex) (g)                                      |  |          | Healthcare
    & Pharmaceuticals              |                      |  |              | L+11.00 | %        |  |           | 12.00                     | %             |  |               | 3/31/2020  |                       
|Rocket
    Dog Brands, LLC (g)                                               |  |          | Consumer
    Goods: Non-Durable               |                      |  |              | n/a     |          |  |           | 12.00%
    PIK            |               |  |               | 8/29/2019  |                       
|Rocket
    Dog Brands, LLC (g)                                               |  |          | Consumer
    Goods: Non-Durable               |                      |  |              | n/a     |          |  |           | 15.00%
    PIK            |               |  |               | 8/29/2019  |                       
|Rocket
    Dog Brands, LLC (g)                                               |  |          | Consumer
    Goods: Non-Durable               |                      |  |              | n/a     |          |  |           | 17.00%
    PIK            |               |  |               | 3/31/2017  |                       
|SHI
    Holdings, Inc. (f) (g)                                               |  |          | Healthcare
    & Pharmaceuticals              |                      |  |              | L+9.25  | %        |  |           | 10.01                     | %             |  |               | 7/10/2019  |                       
|SHI
    Holdings, Inc. (Revolver) (e) (g)                                    |  |          | Healthcare
    & Pharmaceuticals              |                      |  |              | L+9.25  | %        |  |           | 10.01                     | %             |  |               | 7/10/2019  |                       
|Shields
    Land Company of Georgia, LLC (l)                                 |  |          | Banking,
    Finance, Insurance & Real Estate |                      |  |              | L+9.50  | %        |  |           | 10.15                     | %             |  |               | 12/28/2017 |                       
|Solaray,
    LLC                                                             |  |          | Consumer
    Goods: Non Durable               |                      |  |              | L+6.50  | %        |  |           | 7.50                      | %             |  |               | 9/9/2023   |                       
|Solaray,
    LLC (Delayed Draw) (e) (k)                                      |  |          | Consumer
    Goods: Non Durable               |                      |  |              | L+6.50  | %        |  |           | 7.50                      | %             |  |               | 9/9/2023   |                       
|SNI
    Companies (o)                                                        |  |          | Services:
    Business                        |                      |  |              | L+8.00  | %        |  |           | 9.00                      | %             |  |               | 12/31/2018 |                       
|SNI
    Companies (Revolver) (e)                                             |  |          | Services:
    Business                        |                      |  |              | L+8.00  | %        |  |           | 9.00                      | %             |  |               | 12/31/2018 |                       
|Summit
    Container Corporation (f) (g)                                     |  |          | Containers,
    Packaging & Glass             |                      |  |              | L+12.00 | %        |  |           | 12.00%
    Cash/2.00% PIK |               |  |               | 1/6/2019   |                       
|Synergy
    Environmental Corporation (f)                                    |  |          | Environmental
    Industries                  |                      |  |              | L+8.00  | %        |  |           | 8.76                      | %             |  |               | 4/29/2021  |                       
|Synergy
    Environmental Corporation (f)                                    |  |          | Environmental
    Industries                  |                      |  |              | L+8.00  | %        |  |           | 8.76                      | %             |  |               | 4/29/2021  |                       
|Synergy
    Environmental Corporation (Delayed Draw) (e) (k)                 |  |          | Environmental
    Industries                  |                      |  |              | L+8.00  | %        |  |           | 8.76                      | %             |  |               | 4/29/2018  |                       
|Synergy
    Environmental Corporation (Revolver) (e)                         |  |          | Environmental
    Industries                  |                      |  |              | L+8.00  | %        |  |           | 8.76                      | %             |  |               | 4/29/2021  |                       
|Tectum
    Holdings, Inc.                                                    |  |          | Automotive                                    |                      |  |              | L+4.75  | %        |  |           | 5.75                      | %             |  |               | 8/24/2023  |                       
|The
    Worth Collection, Ltd. (f)                                           |  |          | Retail                                        |                      |  |              | L+8.50  | %        |  |           | 9.26                      | %             |  |               | 9/29/2021  |                       
|TPP
    Operating, Inc. (p)                                                  |  |          | Retail                                        |                      |  |              | L+6.00  | %        |  |           | 7.50                      | %(i)          |  |               | 11/8/2018  |                       
|TPP
    Operating, Inc. (p)                                                  |  |          | Retail                                        |                      |  |              | L+6.00  | %        |  |           | 7.50                      | %(i)          |  |               | 11/8/2018  |                       
|TPP
    Operating, Inc. (p)                                                  |  |          | Retail                                        |                      |  |              | L+9.61  | %        |  |           | 11.11                     | %(i)          |  |               | 11/8/2018  |                       
|TRG,
    LLC                                                                 |  |          | Hotels,
    Gaming & Leisure                  |                      |  |              | L+13.80 | %        |  |           | 8.12%
    Cash/6.30% PIK  | (q)           |  |               | 3/31/2021  |                       
|TRG,
    LLC (Revolver)                                                      |  |          | Hotels,
    Gaming & Leisure                  |                      |  |              | L+9.50  | %        |  |           | 10.12                     | %             |  |               | 3/31/2021  |                       
|TRG,
    LLC (CapEx) (e)                                                     |  |          | Hotels,
    Gaming & Leisure                  |                      |  |              | L+9.50  | %        |  |           | 8.12%
    Cash/2.00% PIK  |               |  |               | 3/31/2021  |                       
|Vacation
    Innovations, LLC (r)                                            |  |          | Hotels,
    Gaming & Leisure                  |                      |  |              | L+9.40  | %        |  |           | 7.76%
    Cash/2.42% PIK  | (s)           |  |               | 8/20/2020  |                       
|Vacation
    Innovations, LLC (Revolver) (e)                                 |  |          | Hotels,
    Gaming & Leisure                  |                      |  |              | L+8.50  | %        |  |           | 7.76%
    Cash/1.50% PIK  |               |  |               | 8/20/2020  |                       



See Notes to Consolidated Financial
Statements.



12







MONROE CAPITAL CORPORATION
 
CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
December 31, 2016
(in thousands, except for units)



|Portfolio
    Company (a)                                                               |  | Industry |                                               | SpreadAboveIndex (b) |  | InterestRate |         | Maturity |  | Principal |                           | AmortizedCost |  | FairValue (c) |            | %
    of NetAssets (d)
|--------------------------------------------------------------------------------------- |  | -------- | --------------------------------------------- | -------------------- |  | ------------ | ------- | -------- |  | --------- | ------------------------- | ------------- |  | ------------- | ---------- | ----------------------
|Vacation
    Innovations, LLC (Delayed Draw) (e) (k)                                    |  |          | Hotels,
    Gaming & Leisure                  |                      |  |              | L+8.50  | %        |  |           | 7.76%
    Cash/1.50% PIK  |               |  |               | 8/20/2020  |                       
|Yandy
    Holding, LLC                                                                  |  |          | Retail                                        |                      |  |              | L+9.00  | %        |  |           | 10.00                     | %             |  |               | 9/30/2019  |                       
|Yandy
    Holding, LLC (Revolver) (e)                                                   |  |          | Retail                                        |                      |  |              | L+9.00  | %        |  |           | 10.00                     | %             |  |               | 9/30/2019  |                       
|Total
    Senior Secured Loans                                                          |  |          |                                               |                      |  |              |         |          |  |           |                           |               |  |               |            |                       
|Unitranche
    Loans                                                                    |  |          |                                               |                      |  |              |         |          |  |           |                           |               |  |               |            |                       
|Collaborative
    Neuroscience Network, LLC (t)                                         |  |          | Healthcare
    & Pharmaceuticals              |                      |  |              | L+11.50 | %        |  |           | 13.00                     | %             |  |               | 12/27/2017 |                       
|Collaborative
    Neuroscience Network, LLC                                             |  |          | Healthcare
    & Pharmaceuticals              |                      |  |              | n/a     |          |  |           | 12.00%
    Cash/3.00% PIK |               |  |               | 12/27/2017 |                       
|Fabco
    Automotive Corporation                                                        |  |          | Automotive                                    |                      |  |              | L+11.25 | %        |  |           | 8.00%
    Cash/4.25% PIK  |               |  |               | 4/3/2019   |                       
|Gracelock
    Industries, LLC                                                           |  |          | Wholesale                                     |                      |  |              | L+13.74 | %        |  |           | 11.00%
    Cash/4.24% PIK | (u)           |  |               | 5/7/2019   |                       
|Incipio
    Technologies, Inc. (v)                                                      |  |          | Consumer
    Goods: Non-Durable               |                      |  |              | L+6.00  | %        |  |           | 7.00                      | %             |  |               | 12/26/2019 |                       
|MooreCo,
    Inc.                                                                       |  |          | Consumer
    Goods: Durable                   |                      |  |              | L+14.50 | %        |  |           | 13.50%
    Cash/2.50% PIK |               |  |               | 12/27/2017 |                       
|Output
    Services Group, Inc.                                                         |  |          | Services:
    Business                        |                      |  |              | L+9.00  | %        |  |           | 9.50%
    Cash/1.00% PIK  |               |  |               | 12/17/2020 |                       
|Output
    Services Group, Inc.                                                         |  |          | Services:
    Business                        |                      |  |              | L+9.00  | %        |  |           | 9.50%
    Cash/1.00% PIK  |               |  |               | 12/17/2020 |                       
|Playtime,
    LLC                                                                       |  |          | Hotels,
    Gaming & Leisure                  |                      |  |              | L+8.50  | %        |  |           | 9.00%
    Cash/1.00% PIK  |               |  |               | 12/31/2021 |                       
|Total
    Unitranche Loans                                                              |  |          |                                               |                      |  |              |         |          |  |           |                           |               |  |               |            |                       
|                                                                                        |  |          |                                               |                      |  |              |         |          |  |           |                           |               |  |               |            |                       
|Junior
    Secured Loans                                                                |  |          |                                               |                      |  |              |         |          |  |           |                           |               |  |               |            |                       
|AIM
    Aerospace, Inc.                                                                 |  |          | Aerospace
    & Defense                       |                      |  |              | L+9.00  | %        |  |           | 10.00                     | %             |  |               | 8/2/2022   |                       
|Confie
    Seguros Holdings II Co.                                                      |  |          | Banking,
    Finance, Insurance & Real Estate |                      |  |              | L+9.00  | %        |  |           | 10.25                     | %             |  |               | 5/8/2019   |                       
|CSM
    Bakery Supplies LLC                                                             |  |          | Beverage,
    Food & Tobacco                  |                      |  |              | L+7.75  | %        |  |           | 8.75                      | %             |  |               | 7/3/2021   |                       
|Education
    Corporation of America                                                    |  |          | Services:
    Consumer                        |                      |  |              | L+11.00 | %        |  |           | 12.00                     | %             |  |               | 12/31/2018 |                       
|Hyland
    Software Inc.                                                                |  |          | High
    Tech Industries                      |                      |  |              | L+7.25  | %        |  |           | 8.25                      | %             |  |               | 7/1/2023   |                       
|Mergermarket
    USA, Inc.                                                              |  |          | Media:
    Broadcasting & Subscription        |                      |  |              | L+6.50  | %        |  |           | 7.50                      | %             |  |               | 12/19/2021 |                       
|Micro
    Holdings Corp.                                                                |  |          | High
    Tech Industries                      |                      |  |              | L+7.50  | %        |  |           | 8.50                      | %             |  |               | 7/8/2022   |                       
|Mud
    Pie, LLC                                                                        |  |          | Consumer
    Goods: Non-Durable               |                      |  |              | n/a     |          |  |           | 10.00%
    Cash/1.50% PIK |               |  |               | 11/4/2020  |                       
|New
    NSI Holdings, Inc.                                                              |  |          | Chemicals,
    Plastics & Rubber              |                      |  |              | L+8.25  | %        |  |           | 9.25                      | %             |  |               | 7/28/2022  |                       
|Pre-Paid
    Legal Services, Inc. (Legal Shield)                                        |  |          | Services:
    Consumer                        |                      |  |              | L+9.00  | %        |  |           | 10.25                     | %             |  |               | 7/1/2020   |                       
|Rocket
    Dog Brands, LLC (g)                                                          |  |          | Consumer
    Goods: Non-Durable               |                      |  |              | n/a     |          |  |           | 15.00%
    PIK            |               |  |               | 5/1/2020   |                       
|Sterling
    Merger Sub Corp.                                                           |  |          | Services:
    Business                        |                      |  |              | L+7.75  | %        |  |           | 8.75                      | %             |  |               | 6/19/2023  |                       
|SCP
    TPZ Acquisition, Inc.                                                           |  |          | Media:
    Diversified & Production           |                      |  |              | L+8.25  | %        |  |           | 9.25                      | %             |  |               | 5/29/2022  |                       
|Total
    Junior Secured Loans                                                          |  |          |                                               |                      |  |              |         |          |  |           |                           |               |  |               |            |                       
|                                                                                        |  |          |                                               |                      |  |              |         |          |  |           |                           |               |  |               |            |                       
|Equity
    Securities                                                                   |  |          |                                               |                      |  |              |         |          |  |           |                           |               |  |               |            |                       
|AdTheorent,
    Inc. (128,866 Units) (w)                                                |  |          | Media:
    Advertising, Printing & Publishing |                      |  |              | —       |          |  |           | —                         | (x)           |  |               | —          |                       
|American
    Community Homes, Inc. (warrant to purchase up to 9.0% of the equity) (g)   |  |          | Banking,
    Finance, Insurance & Real Estate |                      |  |              | —       |          |  |           | —                         | (x)           |  |               | 10/9/2024  |                       
|BookIt
    Operating LLC (warrant to purchase up to 3.0% of the equity) (w)             |  |          | Hotels,
    Gaming & Leisure                  |                      |  |              | —       |          |  |           | —                         | (x)           |  |               | 12/21/2023 |                       
|Collaborative
    Neuroscience Network, LLC (warrant to purchase up to 4 LLC units) (w) |  |          | Healthcare
    & Pharmaceuticals              |                      |  |              | —       |          |  |           | —                         | (x)           |  |               | 12/27/2022 |                       
|Cyalume
    Technologies Holdings, Inc. –  Series D Preferred Stock (3.06 shares) (w)   |  |          | Aerospace
    & Defense                       |                      |  |              | —       |          |  |           | —                         | (x)           |  |               | —          |                       
|Education
    Corporation of America – Series G Preferred Stock (8,333 shares) (w)      |  |          | Services:
    Consumer                        |                      |  |              | n/a     |          |  |           | 12.00                     | %             |  |               | —          |                       
|Fabco
    Automotive Corporation (warrant to purchase up to 1.87% of the equity) (w)    |  |          | Automotive                                    |                      |  |              | —       |          |  |           | —                         | (x)           |  |               | —          |                       
|InMobi
    Pte, Ltd. (represents the right to purchase 0.42% of the equity) (l) (w)     |  |          | Media:
    Advertising, Printing & Publishing |                      |  |              | —       |          |  |           | —                         | (x)           |  |               | 9/18/2025  |                       



See Notes to Consolidated Financial
Statements.



13







MONROE CAPITAL CORPORATION
 
CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
December 31, 2016
(in thousands, except for units)



|Portfolio
    Company (a)                                                                                                 |  | Industry |                                   | SpreadAboveIndex (b) |  | InterestRate |   | Maturity |  | Principal |            | AmortizedCost |  | FairValue (c) |            | %
    of NetAssets (d)
|------------------------------------------------------------------------------------------------------------------------- |  | -------- | --------------------------------- | -------------------- |  | ------------ | - | -------- |  | --------- | ---------- | ------------- |  | ------------- | ---------- | ----------------------
|O’Brien
    Industrial Holdings, LLC (warrants to purchase up to 2.44% of certain affiliated entities of the company) (w) |  |          | Metals
    & Mining               |                      |  |              | — |          |  |           | —          | (x)           |  |               | 5/13/2024  |                       
|Output
    Services Group, Inc. (warrant to purchase up to 3.89% of the common stock) (w)                                 |  |          | Services:
    Business            |                      |  |              | — |          |  |           | —          | (x)           |  |               | 12/17/2022 |                       
|Playtime,
    LLC – Preferred Units (8,665 units) (w)                                                                     |  |          | Hotels,
    Gaming & Leisure      |                      |  |              | — |          |  |           | —          | (x)           |  |               | —          |                       
|Rockdale
    Blackhawk, LLC – LLC Units (11.56% of the LLC interest) (g)                                                  |  |          | Healthcare
    & Pharmaceuticals  |                      |  |              | — |          |  |           | —          |               |  |               | —          |                       
|Rocket
    Dog Brands, LLC – Common Units (75,502 units) (g)                                                              |  |          | Consumer
    Goods: Non-Durable   |                      |  |              | — |          |  |           | —          | (x)           |  |               | —          |                       
|Rocket
    Dog Brands, LLC – Preferred Units (10 units) (g)                                                               |  |          | Consumer
    Goods: Non-Durable   |                      |  |              | — |          |  |           | 15.00% PIK | (y)           |  |               | —          |                       
|SHI
    Holdings, Inc. (24 shares of common stock) (g)                                                                    |  |          | Healthcare
    & Pharmaceuticals  |                      |  |              | — |          |  |           | —          | (x)           |  |               | —          |                       
|Summit
    Container Corporation (warrant to purchase up to 19.50% of the equity) (g)                                     |  |          | Containers,
    Packaging & Glass |                      |  |              | — |          |  |           | —          | (x)           |  |               | 1/6/2024   |                       
|The
    Tie Bar Operating Company, LLC – Class A Preferred Units (1,275 units) (w)                                        |  |          | Retail                            |                      |  |              | — |          |  |           | —          |               |  |               | —          |                       
|The
    Tie Bar Operating Company, LLC – Class B Preferred Units (1,275 units) (w)                                        |  |          | Retail                            |                      |  |              | — |          |  |           | —          |               |  |               | —          |                       
|TPP
    Acquisition, Inc. (829 shares of common stock) (p)                                                                |  |          | Retail                            |                      |  |              | — |          |  |           | —          | (x)           |  |               | —          |                       
|TPP
    Operating, Inc. (40 shares of common stock) (p)                                                                   |  |          | Retail                            |                      |  |              | — |          |  |           | —          | (x)           |  |               | —          |                       
|Total
    Equity Securities                                                                                               |  |          |                                   |                      |  |              |   |          |  |           |            |               |  |               |            |                       
|TOTAL
    INVESTMENTS                                                                                                     |  |          |                                   |                      |  |              |   |          |  |           |            |               |  |               |            |                       










| | (a) | All
of our investments are issued by eligible U.S. portfolio companies, as defined in the Investment Company Act of 1940 (the “1940
Act”), unless otherwise noted. All investments are non-controlled/non-affiliate company investments, unless
otherwise noted. All of our investments are issued by U.S. portfolio companies except for InMobi Pte, Ltd. which is an
international company headquartered in California.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | The
majority of the investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR”
or “L”) or Prime Rate (“Prime” or “P”) which reset daily, monthly, quarterly, or semiannually.
For each such investment, the Company has provided the spread over LIBOR or Prime and the current contractual interest rate in
effect at December 31, 2016. Certain investments are subject to a LIBOR or Prime interest rate floor.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Because
there is no readily available market value for these investments, the fair value of these investments is determined in good faith
by our board of directors as required by the Investment Company Act of 1940. (See Note 4 in the accompanying notes to the consolidated
financial statements.)
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | Percentages
are based on net assets of $240,850 as of December 31, 2016.
| | --- | ------------------------------------------------------------------------



| | (e) | All
or a portion of this commitment was unfunded at December 31, 2016. As such, interest is earned only on the funded portion of this
commitment.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | All
of this loan is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP and is therefore not
collateral to the Company’s revolving credit facility.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (g) | As
defined in the 1940 Act, the Company is deemed to be an “Affiliated Person” of the portfolio company as it owns five
percent or more of the portfolio company’s voting securities. See Note 5 in the accompanying notes to the consolidated financial
statements for additional information on transactions in which the issuer was an Affiliated Person (but not a portfolio company
that the Company is deemed to control).
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (h) | This
is a demand note with no stated maturity.
| | --- | ----------------------------------------------



See Notes to Consolidated Financial
Statements.



14







MONROE CAPITAL CORPORATION
 
CONSOLIDATED SCHEDULE OF INVESTMENTS – (continued)
December 31, 2016
(in thousands, except for units)



| | (i) | This
position was on non-accrual status as of December 31, 2016, meaning that the Company has ceased recognizing interest income on
the position. See Note 2 in the accompanying notes to the consolidated financial statements for additional information on the Company's
accounting policies.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (j) | A
portion of this loan (principal of $2,271) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation
SBIC, LP and is therefore not collateral to the Company’s revolving credit facility.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (k) | This
delayed draw loan requires that certain financial covenants be met by the portfolio company prior to any fundings.
| | --- | -----------------------------------------------------------------------------------------------------------------------



| | (l) | This
investment is treated as a non-qualifying investment under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may
not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of
the Company’s total assets. As of December 31, 2016, non-qualifying assets totaled 2.20% of the Company’s total assets.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (m) | The
PIK portion of the interest rate for Landpoint, LLC is structured as a fee paid upon the termination of the commitment. The fee
currently accrues at 2.25% per annum.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (n) | The
PIK portion of the interest rate for Peerless Network, Inc. is structured as a fee paid upon the termination of the commitment.
The fee currently accrues at 0.75% per annum.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (o) | A
portion of this loan (principal of $3,435) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation
SBIC, LP and is therefore not collateral to the Company’s revolving credit facility.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (p) | As
defined in the 1940 Act, the Company is deemed to be both an “Affiliated Person” of and to “Control” this
portfolio company as it owns more than 25% in company’s voting securities. See Note 5 in the accompanying notes to the consolidated
financial statements for additional information on transactions in which the issuer was both an Affiliated Person and a portfolio
company that the Company is deemed to Control.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (q) | A
portion of the PIK interest rate for TRG, LLC is structured as a fee paid upon the termination of the commitment. The fee currently
accrues at 4.30% per annum,
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (r) | A
portion of this loan (principal of $4,660) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation
SBIC, LP and is therefore not collateral to the Company’s revolving credit facility.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (s) | The
PIK portion of the interest rate for Vacation Innovations, LLC is structured as a fee paid upon the termination of the commitment.
The fee currently accrues at 0.92% per annum.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (t) | The
sale of a portion of this loan does not qualify for sale accounting under ASC Topic 860 — Transfers and Servicing,
and therefore, the entire unitranche loan asset remains in the Consolidated Schedule of Investments.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (u) | The
PIK portion of the interest rate for Gracelock Industries, LLC is structured as a fee paid upon the termination of the commitment.
The fee currently accrues at 4.24% per annum.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (v) | A
portion of this loan (principal of $5,240) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation
SBIC, LP and is therefore not collateral to the Company’s revolving credit facility.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (w) | Represents
less than 5% ownership of the portfolio company’s voting securities.
| | --- | -------------------------------------------------------------------------------



| | (x) | Represents
a non-income producing security.
| | --- | -------------------------------------------



| | (y) | This
position includes a PIK dividend and is currently on non-accrual status.
| | --- | -----------------------------------------------------------------------------



n/a — not applicable



See Notes to Consolidated Financial
Statements.



15







MONROE CAPITAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(in thousands, except share and per share
data)



Note 1. Organization and Principal Business



Monroe Capital Corporation (“Monroe
Capital” and together with its subsidiaries, the “Company”) was formed in February 2011 to act as an externally
managed non-diversified, closed-end management investment company and has elected to be treated as a business development company
under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company had no substantive operating activities
prior to October 24, 2012, the date of its initial public offering. Monroe Capital’s investment objective is to maximize
the total return to its stockholders in the form of current income and capital appreciation through investment in senior secured,
junior secured and unitranche (a combination of senior secured and junior secured debt in the same facility in which the Company
syndicate a “first out” portion of the loan to an investor and retain a “last out” portion of the loan)
debt and, to a lesser extent, unsecured subordinated debt and equity investments. Monroe Capital is managed by Monroe Capital BDC
Advisors, LLC (“MC Advisors”), a registered investment adviser under the Investment Advisers Act of 1940, as amended.
In addition, for U.S. federal income tax purposes, Monroe Capital has elected to be treated as a regulated investment company (“RIC”)
under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).



On February 28, 2014, the Company’s
wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP (“MRCC SBIC”), a Delaware limited partnership, received
a license from the Small Business Administration (“SBA”) to operate as a Small Business Investment Company (“SBIC”)
under Section 301(c) of the Small Business Investment Act of 1958, as amended. MRCC SBIC commenced operations on September 16,
2013. As of March 31, 2017, MRCC SBIC had $50,000 in leverageable capital and $60,000 in SBA-guaranteed debentures outstanding.
See Note 7 for additional information.



Note 2. Summary of Significant Accounting Policies



Basis of Presentation



The accompanying consolidated financial
statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of
America (“GAAP”). The accompanying consolidated financial statements of the Company and related financial information
have been prepared pursuant to the requirements for reporting on Form 10-Q and Articles 6 or 10 of Regulation S-X. The Company
has determined it meets the definition of an investment company and follows the accounting and reporting guidance in the Financial
Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946 — Financial
Services — Investment Companies (“ASC Topic 946”). Certain prior period amounts have been reclassified
to conform to the current period presentation.



Use of Estimates



The preparation of the consolidated financial
statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements
and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.



Consolidation



As permitted under Regulation S-X and ASC
Topic 946, the Company will generally not consolidate its investment in a portfolio company other than an investment company subsidiary
or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated
the results of the Company’s wholly-owned subsidiaries, MRCC SBIC and its wholly-owned general partner MCC SBIC GP, LLC,
and MC Forest Park Lender, LLC, in its consolidated financial statements. All intercompany balances and transactions have been
eliminated.



Fair Value of Financial Instruments



The Company applies fair value to substantially
all of its financial instruments in accordance with ASC Topic 820 — Fair Value Measurements and Disclosures (“ASC
Topic 820”). ASC Topic 820 defines fair value, establishes a framework used to measure fair value, and requires disclosures
for fair value measurements, including the categorization of financial instruments into a three-level hierarchy based on the transparency
of valuation inputs. See Note 4 to the consolidated financial statements for further discussion regarding the fair value measurements
and hierarchy.



ASC Topic 820 requires disclosure of the
fair value of financial instruments for which it is practical to estimate such value. The Company believes that the carrying amounts
of its other financial instruments such as cash, receivables and payables approximate the fair value of such items due to the short
maturity of such instruments.



16







Revenue Recognition



The Company’s revenue recognition
policies are as follows:



Investments and related investment income:
Interest and dividend income are recorded on the accrual basis to the extent that the Company expects to collect such amounts.
Interest income is accrued based upon the outstanding principal amount and contractual terms of debt and preferred equity investments.
Interest is accrued on a daily basis. All other income is recorded into income when earned. The Company records prepayment fees
and amendment fees on loans as fee income in the period earned.



Dividend income on preferred equity securities
is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are
expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies.
Each distribution received from limited liability company (“LLC”) and limited partnership (“LP”) investments
is evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company
will not record distributions from equity investments in LLCs and LPs as dividend income unless there are sufficient accumulated
tax-basis earnings and profits in the LLC or LP prior to the distribution. Distributions that are classified as a return of capital
are recorded as a reduction in the cost basis of the investment.



Loan origination fees, original issue discount
and market discount or premiums are capitalized, and the Company then amortizes such amounts using the effective interest method
as interest income over the life of the investment. Unamortized discounts and loan origination fees totaled $5,539 and $6,192 as
of March 31, 2017 and December 31, 2016, respectively. Upfront loan origination and closing fees received for the three months
ended March 31, 2017 and 2016 totaled $690 and $1,146, respectively. For the three months ended March 31, 2017 and 2016, interest
income included $388 and $365 of accretion of loan origination fees, original issue discounts and market discounts or premiums,
respectively. Upon the prepayment of a loan or debt security, any unamortized premium or discount or loan origination fees are
recorded as interest income. For the three months ended March 31, 2017 and 2016, interest income included $652 and $377 of unamortized
discount or loan origination fees recorded as interest income upon prepayment of a loan or debt security, respectively.



The Company has certain investments in its
portfolio that contain a payment-in-kind (“PIK”) interest provision, which represents contractual interest or dividends
that are added to the principal balance and recorded as income. For the three months ended March 31, 2017 and 2016, interest income
included $613 and $370 of PIK interest, respectively. The Company stops accruing PIK interest when it is determined that PIK interest
is no longer collectible. To maintain RIC tax treatment, and to avoid corporate tax, substantially all of this income must be paid
out to stockholders in the form of distributions, even though the Company has not yet collected the cash.



Investment transactions are recorded on
a trade-date basis. Realized gains or losses on portfolio investments are calculated based upon the difference between the net
proceeds from the disposition and the amortized cost basis of the investment, without regard to unrealized gains and losses previously
recognized. Realized gains and losses are recorded within net realized gain (loss) on investments in the consolidated statements
of operations. Changes in the fair value of investments from the prior period, as determined by the Company’s board of directors
(the “Board”) through the application of the Company’s valuation policy, are included within net change in unrealized
appreciation (depreciation) on investments in the consolidated statements of operations.



Non-accrual: Loans or preferred equity
securities are placed on non-accrual status when principal, interest or dividend payments become materially past due, or when there
is reasonable doubt that principal, interest or dividends will be collected. We generally reverse accrued interest when a loan
is placed on non-accrual status. Additionally, any original issue discount and market discount are no longer accreted to interest
income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized
as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status
when past due principal, interest, or dividends are paid, and, in management’s judgment are likely to remain current. The
fair value of the Company’s investments on non-accrual status totaled $11,507 and $10,394 at March 31, 2017 and December
31, 2016, respectively.



Partial loan sales: The Company follows
the guidance in ASC Topic 860 — Transfers and Servicing (“ASC Topic 860”), when accounting for
loan participations and other partial loan sales. Such guidance requires a participation or other partial loan sale to meet the
definition of a “participating interest,” as defined in the guidance, in order for sale treatment to be allowed. Participations
or other partial loan sales which do not meet the definition of a participating interest remain on the Company’s consolidated
statements of assets and liabilities and the proceeds are recorded as a secured borrowing until the definition is met. For these
partial loan sales, the interest earned on the entire loan balance is recorded within “interest income” and the interest
earned by the buyer in the partial loan sale is recorded within “interest and other debt financing expenses” in the
accompanying consolidated statements of operations. Changes in the fair value of secured borrowings from the prior period, as determined
by the Board through the application of the Company’s valuation policy, are included as changes in unrealized (appreciation)
depreciation on secured borrowings in the consolidated statements of operations. See Note 7 “Secured Borrowings”
for additional information.



Distributions



Distributions to common stockholders are
recorded on the record date. The amount, if any, to be distributed is determined by the Board each quarter and is generally based
upon the earnings estimated by management. Net realized capital gains, if any, are generally distributed at least annually, although
the Company may decide to retain such capital gains for investment.



17







The determination of the tax attributes
for the Company’s distributions is made annually, based upon its taxable income for the full year and distributions paid
for the full year. Ordinary dividend distributions from a RIC do not qualify for the preferential tax rate on qualified 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 distributions
will generally include both ordinary income and capital gains, but may also include qualified dividends or return of capital.



The Company has adopted a dividend reinvestment
plan (“DRIP”) that 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 the Company declares a cash dividend, the Company’s stockholders who
have not “opted out” of the DRIP at least three days prior to the dividend payment date will have their cash dividend
automatically reinvested into additional shares of the Company’s common stock. The Company has the option to satisfy the
share requirements of the DRIP through the issuance of new shares of common stock or through open market purchases of common stock
by the DRIP plan administrator. Newly issued shares are valued based upon the final closing price of the Company’s common
stock on a date determined by the Board. 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. See Note 8 regarding distributions for additional information.



Earnings per Share



In accordance with the provisions of ASC
Topic 260 — Earnings per Share (“ASC Topic 260”), basic earnings per share is computed by dividing earnings
available to common stockholders by the weighted average number of shares outstanding during the period. The weighted average shares
outstanding utilized in the calculation of earnings per share take into account share issues on the issuance date and the Company’s
repurchases of its common stock on the repurchase date. See Note 9 for additional information on the Company’s share activity.
For the periods presented in these consolidated financial statements, there were no potentially dilutive common shares issued.



Segments



In accordance with ASC Topic 280 —
Segment Reporting, the Company has determined that it has a single reporting segment and operating unit structure.



Cash



The Company deposits its cash in a financial
institution and, at times, such balances may be in excess of the Federal Deposit Insurance Corporation insurance limits.



Restricted Cash



Restricted cash includes amounts held within
MRCC SBIC. Cash held within an SBIC is generally restricted to the originations of new loans from the SBIC and the payment of SBA
debentures and related interest expense.



Unamortized Deferred Financing Costs



Deferred financing costs represent fees
and other direct incremental costs incurred in connection with the Company’s borrowings. As of March 31, 2017 and December
31, 2016, the Company had unamortized deferred financing costs of $4,268 and $3,945, respectively, presented as a direct reduction
of the carrying amount of debt on the consolidated statements of assets and liabilities. These amounts are amortized and included
in interest expense in the consolidated statements of operations over the estimated average life of the borrowings. Amortization
of deferred financing costs for the three months ended March 31, 2017 and 2016 was $231 and $182, respectively.



Offering Costs



Offering costs include, among other things,
fees paid in relation to legal, accounting, regulatory and printing work completed in preparation of equity offerings. Offering
costs are charged against the proceeds from equity offerings within the consolidated statements of changes in net assets. As of
March 31, 2017 and December 31, 2016, other assets on the consolidated statements of assets and liabilities included $268 and $281,
respectively, of deferred offering costs which will be charged against the proceeds from further equity offerings when received.



18







Income Taxes



The Company has elected to be treated as
a RIC under Subchapter M of the Code and operates in a manner so as to qualify for the tax treatment available to RICs. To maintain
qualification as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements
and distribute to stockholders, for each taxable year, at least 90% of the Company’s “investment company taxable income,”
which is generally the Company’s net ordinary income plus the excess, if any, of realized net short-term capital gains over
realized net long-term capital losses. If the Company qualifies as a RIC and satisfies the annual distribution requirement, the
Company will not have to pay corporate-level federal income taxes on any income that the Company distributes to its stockholders.
The Company intends to make distributions in an amount sufficient to maintain RIC status each year and to avoid any federal income
taxes on income. The Company will also be subject to nondeductible federal excise taxes if the Company does not distribute at least
98% of net ordinary income, 98.2% of any capital gain net income, if any, and any recognized and undistributed income from prior
years for which it paid no federal income taxes. To the extent that the Company determines that its estimated current year annual
taxable income may exceed estimated current year dividend distributions, the Company accrues excise tax, if any, calculated as
4% of the estimated excess taxable income as taxable income is earned. For the three months ended March 31, 2017 and 2016, zero
and $87, respectively, were recorded on the consolidated statements of operations for U.S. federal excise taxes.



The Company accounts for income taxes in
conformity with ASC Topic 740 — Income Taxes (“ASC Topic 740”). ASC Topic 740 provides guidelines for
how uncertain tax positions should be recognized, measured, presented and disclosed in the consolidated financial statements. ASC
Topic 740 requires the evaluation of tax positions taken in the course of preparing the Company’s tax returns to determine
whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax benefits
of positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense in the current year. It is
the Company’s policy to recognize accrued interest and penalties related to uncertain tax benefits in income tax expense.
There were no material uncertain income tax positions through March 31, 2017. The 2013 through 2016 tax years remain subject to
examination by U.S. federal and state tax authorities.



Subsequent Events



The Company has evaluated the need for disclosures
and/or adjustments resulting from subsequent events through the date the consolidated financial statements were issued. There have
been no subsequent events that occurred during such period that would require disclosure in this Form 10-Q or would be required
to be recognized in the consolidated financial statements as of and for the three months ended March 31, 2017.



Recent Accounting Pronouncements



In May 2014, the FASB issued Accounting
Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (ASC Topic 606) (“ASU 2014-09”).
The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services
to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods
or services. To achieve that core principle, an entity should apply the following steps: Step 1: Identify the contract(s) with
a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate
the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies
a performance obligation.



ASU 2014-09 also specified the accounting
for some costs to obtain or fulfill a contract with a customer. In addition, ASU 2014-09 requires that an entity disclose sufficient
information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash
flows arising from contracts with customers. The initial effective date of ASU 2014-09 was for fiscal periods beginning after December
15, 2016. However, in August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (ASC Topic 606): Deferral
of the Effective Date, which deferred the effective date to fiscal periods beginning after December 15, 2017. Management is
currently evaluating the impact these changes will have on the Company’s consolidated financial statements and disclosures.



In January 2016, the
FASB issued ASU 2016-01, Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial
Assets and Financial Liabilities (“ASU 2016-01”). ASU 2016-01 retains many current requirements for the classification
and measurement of financial instruments; however, it significantly revises an entity’s accounting related to (1) the classification
and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities
measured at fair value. ASU 2016-01 also amends certain disclosure requirements associated with the fair value of financial instruments.
This guidance is effective for annual and interim periods beginning after December 15, 2017, and early adoption is not permitted
for public business entities. Management is currently evaluating the impact these changes will have on the Company’s consolidated
financial statements and disclosures.



In November 2016, the FASB issued ASU 2016-18,
Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). ASU 2016-18 requires that the statements
of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted
cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents
should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown
on the statements of cash flows. The new guidance is effective for annual and interim periods, beginning after December 15, 2017,
and early adoption is permitted and is to be applied on a retrospective basis. The Company has adopted ASU 2016-18 and the revised
presentation is reflected in the Company’s consolidated financial statements for the periods presented.



Note 3. Investments



The following tables show the composition
of the investment portfolio, at amortized cost and fair value (with corresponding percentage of total portfolio investments):



|                     |  | March 31, 2017 |         |  | December 31, 2016 | 
|-------------------- |  | -------------- | ------- |  | ----------------- | 
|Amortized Cost:      |  |                |         |  |                   | 
|Senior secured loans |  | $              | 307,532 |  |                   | 
|Unitranche loans     |  |                | 56,300  |  |                   | 
|Junior secured loans |  |                | 44,387  |  |                   | 
|Equity securities    |  |                | 13,883  |  |                   | 
|Total                |  | $              | 422,102 |  |                   | 



19







|                     |  | March 31, 2017 |         |  | December 31, 2016 | 
|-------------------- |  | -------------- | ------- |  | ----------------- | 
|Fair Value:          |  |                |         |  |                   | 
|Senior secured loans |  | $              | 300,223 |  |                   | 
|Unitranche loans     |  |                | 50,465  |  |                   | 
|Junior secured loans |  |                | 42,260  |  |                   | 
|Equity securities    |  |                | 25,201  |  |                   | 
|Total                |  | $              | 418,149 |  |                   | 



The following tables show the composition
of the investment portfolio by geographic region, at amortized cost and fair value (with corresponding percentage of total portfolio
investments). The geographic composition is determined by the location of the corporate headquarters of the portfolio company,
which may not be indicative of the primary source of the portfolio company’s business:



|                |  | March 31, 2017 |         |  | December 31, 2016 | 
|--------------- |  | -------------- | ------- |  | ----------------- | 
|Amortized Cost: |  |                |         |  |                   | 
|International   |  | $              | 6,667   |  |                   | 
|Midwest         |  |                | 65,248  |  |                   | 
|Northeast       |  |                | 104,514 |  |                   | 
|South           |  |                | 2,431   |  |                   | 
|Southeast       |  |                | 66,123  |  |                   | 
|Southwest       |  |                | 51,139  |  |                   | 
|West            |  |                | 125,980 |  |                   | 
|Total           |  | $              | 422,102 |  |                   | 



|              |  | March 31, 2017 |         |  | December 31, 2016 | 
|------------- |  | -------------- | ------- |  | ----------------- | 
|Fair Value:   |  |                |         |  |                   | 
|International |  | $              | 6,667   |  |                   | 
|Midwest       |  |                | 65,900  |  |                   | 
|Northeast     |  |                | 107,409 |  |                   | 
|South         |  |                | 2,460   |  |                   | 
|Southeast     |  |                | 66,903  |  |                   | 
|Southwest     |  |                | 51,685  |  |                   | 
|West          |  |                | 117,125 |  |                   | 
|Total         |  | $              | 418,149 |  |                   | 



The following tables show the composition
of the investment portfolio by industry, at amortized cost and fair value (with corresponding percentage of total portfolio investments):



|                                          |  | March 31, 2017 |         |  | December 31, 2016 | 
|----------------------------------------- |  | -------------- | ------- |  | ----------------- | 
|Amortized Cost:                           |  |                |         |  |                   | 
|Aerospace & Defense                       |  | $              | 9,760   |  |                   | 
|Automotive                                |  |                | 10,596  |  |                   | 
|Banking, Finance, Insurance & Real Estate |  |                | 52,397  |  |                   | 
|Beverage, Food & Tobacco                  |  |                | 18,021  |  |                   | 
|Chemicals, Plastics & Rubber              |  |                | —       |  |                   | 
|Construction & Building                   |  |                | 18,356  |  |                   | 
|Consumer Goods: Durable                   |  |                | 3,565   |  |                   | 
|Consumer Goods: Non-Durable               |  |                | 24,783  |  |                   | 
|Containers, Packaging & Glass             |  |                | 3,556   |  |                   | 
|Energy: Oil & Gas                         |  |                | 7,651   |  |                   | 
|Environmental Industries                  |  |                | 3,605   |  |                   | 
|Healthcare & Pharmaceuticals              |  |                | 42,703  |  |                   | 
|High Tech Industries                      |  |                | 15,999  |  |                   | 
|Hotels, Gaming & Leisure                  |  |                | 38,457  |  |                   | 
|Media: Advertising, Printing & Publishing |  |                | 11,932  |  |                   | 
|Media: Broadcasting & Subscription        |  |                | 17,373  |  |                   | 
|Media: Diversified & Production           |  |                | 4,940   |  |                   | 
|Metals & Mining                           |  |                | 5,225   |  |                   | 
|Retail                                    |  |                | 51,130  |  |                   | 
|Services: Business                        |  |                | 37,154  |  |                   | 
|Services: Consumer                        |  |                | 21,012  |  |                   | 
|Telecommunications                        |  |                | 3,434   |  |                   | 
|Utilities: Electric                       |  |                | 2,840   |  |                   | 
|Wholesale                                 |  |                | 17,613  |  |                   | 
|Total                                     |  | $              | 422,102 |  |                   | 



20







|                                          |  | March 31, 2017 |         |  | December 31, 2016 | 
|----------------------------------------- |  | -------------- | ------- |  | ----------------- | 
|Fair Value:                               |  |                |         |  |                   | 
|Aerospace & Defense                       |  | $              | 10,784  |  |                   | 
|Automotive                                |  |                | 5,086   |  |                   | 
|Banking, Finance, Insurance & Real Estate |  |                | 54,797  |  |                   | 
|Beverage, Food & Tobacco                  |  |                | 17,518  |  |                   | 
|Chemicals, Plastics & Rubber              |  |                | —       |  |                   | 
|Construction & Building                   |  |                | 18,646  |  |                   | 
|Consumer Goods: Durable                   |  |                | 3,579   |  |                   | 
|Consumer Goods: Non-Durable               |  |                | 20,159  |  |                   | 
|Containers, Packaging & Glass             |  |                | 3,440   |  |                   | 
|Energy: Oil & Gas                         |  |                | 7,642   |  |                   | 
|Environmental Industries                  |  |                | 3,721   |  |                   | 
|Healthcare & Pharmaceuticals              |  |                | 56,360  |  |                   | 
|High Tech Industries                      |  |                | 14,848  |  |                   | 
|Hotels, Gaming & Leisure                  |  |                | 38,570  |  |                   | 
|Media: Advertising, Printing & Publishing |  |                | 12,086  |  |                   | 
|Media: Broadcasting & Subscription        |  |                | 17,961  |  |                   | 
|Media: Diversified & Production           |  |                | 4,937   |  |                   | 
|Metals & Mining                           |  |                | 5,363   |  |                   | 
|Retail                                    |  |                | 38,782  |  |                   | 
|Services: Business                        |  |                | 38,719  |  |                   | 
|Services: Consumer                        |  |                | 21,163  |  |                   | 
|Telecommunications                        |  |                | 3,498   |  |                   | 
|Utilities: Electric                       |  |                | 2,872   |  |                   | 
|Wholesale                                 |  |                | 17,618  |  |                   | 
|Total                                     |  | $              | 418,149 |  |                   | 



Note 4. Fair Value Measurements



Investments



The Company values all investments in accordance
with ASC Topic 820. ASC Topic 820 requires enhanced disclosures about assets and liabilities that are measured and reported at
fair value. As defined in ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on
observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available,
valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which
is dependent on the price transparency for the assets or liabilities or market and the assets’ or liabilities’ complexity.



ASC Topic 820 establishes a hierarchal disclosure
framework which prioritizes and ranks the level of market price observability of inputs used in measuring investments at fair value.
Market price observability is affected by a number of factors, including the type of investment and the characteristics specific
to the investment. Investments with readily available active quoted prices or for which fair value can be measured from actively
quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring
fair value.



Based on the observability of the
inputs used in the valuation techniques, the Company is required to provide disclosures on fair value measurements according to
the fair value hierarchy. The fair value hierarchy ranks the observability of the inputs used to determine fair values. Investments
carried at fair value are classified and disclosed in one of the following three categories:



| | · | Level 1 — Valuations
based on unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.
| | - | -------------------------------------------------------------------------------------------------------------------------------------



| | · | Level 2 — Valuations based on inputs other than quoted prices in active markets, including quoted prices for similar assets or liabilities, which are either directly or indirectly observable.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement. This includes situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value are based upon the best information available and may require significant management judgment or estimation.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In certain cases, the inputs used to measure
fair value may fall into different levels of the fair value hierarchy. In such cases, an asset’s or liability’s categorization
within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s
assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers
factors specific to the asset or liability. All investments as of March 31, 2017 and December 31, 2016 were categorized as Level
3 investments.



21







With respect to investments for which market
quotations are not readily available, the Company’s Board undertakes a multi-step valuation process each quarter, as described
below:



| | · | the quarterly valuation process begins with each portfolio company or investment being initially evaluated and rated by the
investment professionals of MC Advisors responsible for the portfolio investment;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | preliminary valuation conclusions are then documented and discussed with the investment committee of the Company;
| | - | -----------------------------------------------------------------------------------------------------------------



| | · | the Board also engages one or more independent valuation firm(s) to conduct independent appraisals of a selection of investments
for which market quotations are not readily available. The Company will consult with independent valuation firm(s) relative to
each portfolio company at least once in every calendar year, but are generally received quarterly;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the audit committee of the Board reviews the preliminary valuations of MC Advisors and of the independent valuation firm(s)
and responds and supplements the valuation recommendations to reflect any comments; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the Board discusses these valuations and determines the fair value of each investment in the portfolio in good faith, based
on the input of MC Advisors, the independent valuation firm(s) and the audit committee.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The accompanying consolidated schedules
of investments held by the Company consist primarily of private debt instruments (“Level 3 debt”). The Company generally
uses the yield approach to determine fair value, as long as it is appropriate. If there is deterioration in credit quality or a
debt investment is in workout status, the Company may consider other factors in determining the fair value, including the value
attributable to the debt investment from the enterprise value of the portfolio company or the proceeds that would be received in
a liquidation analysis. The Company considers generally considers its Level 3 debt to be performing loans if the borrower is not
in default, the borrower is remitting payments in a timely manner; the loan is in covenant compliance or is otherwise not deemed
to be impaired. In determining the fair value of the performing Level 3 debt, the Company considers fluctuations in current interest
rates, the trends in yields of debt instruments with similar credit ratings, financial condition of the borrower, economic conditions
and other relevant factors, both qualitative and quantitative. In the event that a Level 3 debt instrument is not performing, as
defined above, the Company will evaluate the value of the collateral utilizing the same framework described above for a performing
loan to determine the value of the Level 3 debt instrument.



Under the yield approach, the Company uses
discounted cash flow models to determine the present value of the future cash flow streams of its debt investments, based on future
interest and principal payments as set forth in the associated loan agreements. In determining fair value under the yield approach,
the Company also considers the following factors: applicable market yields and leverage levels, credit quality, prepayment penalties,
the nature and realizable value of any collateral, the portfolio company’s ability to make payments, and changes in the interest
rate environment and the credit markets that generally may affect the price at which similar investments may be made.



Under the market approach, the Company typically
uses the enterprise value methodology to determine the fair value of an investment. There is no one methodology to estimate enterprise
value and, in fact, for any one portfolio company, enterprise value is generally best expressed as a range of values, from which
the Company derives a single estimate of enterprise value. In estimating the enterprise value of a portfolio company, the Company
analyzes various factors consistent with industry practice, including but not limited to original transaction multiples, the portfolio
company’s historical and projected financial results, applicable market trading and transaction comparables, applicable market
yields and leverage levels, the nature and realizable value of any collateral, the markets in which the portfolio company does
business, and comparisons of financial ratios of peer companies that are public. Typically, the enterprise values of private companies
are based on multiples of earnings before interest, income taxes, depreciation and amortization (“EBITDA”), cash flows,
net income, revenues, or in limited cases, book value.



Secured Borrowings



The Company has elected the fair value option
under ASC Topic 825 — Financial Instruments (“ASC Topic 825”) relating to accounting for debt obligations
at their fair value for its secured borrowings which arose due to partial loan sales which did not meet the criteria for sale treatment
under ASC Topic 860. The Company reports changes in the fair value of its secured borrowings within net change in unrealized (appreciation)
depreciation on secured borrowings in the consolidated statements of operations. The net gain or loss reflects the difference between
the fair value and the principal amount due on maturity.



Due to the absence of a liquid trading market
for these secured borrowings, they are valued by calculating the net present value of the future expected cash flow streams using
an appropriate risk-adjusted discount rate model. The discount rate considers projected performance of the related loan investment,
applicable market yields and leverage levels, credit quality, prepayment penalties and comparable company analysis. The Company
consults with an independent valuation firm relative to the fair value of its secured borrowings at least once in every calendar
year.



22







Fair Value Disclosures



The following table presents fair value
measurements of investments and secured borrowings, by major class, as of March 31, 2017, according to the fair value hierarchy:



|                     |  | Fair Value Measurements |  
|-------------------- |  | ----------------------- | -
|                     |  | Level 1                 |  
|Investments:         |  |                         |  
|Senior secured loans |  | $                       | —
|Unitranche loans     |  |                         | —
|Junior secured loans |  |                         | —
|Equity securities    |  |                         | —
|Total Investments    |  | $                       | —
|                     |  |                         |  
|Secured borrowings   |  | $                       | —



The following table presents fair value
measurements of investments and secured borrowings, by major class, as of December 31, 2016, according to the fair value hierarchy:



|                     |  | Fair Value Measurements |  
|-------------------- |  | ----------------------- | -
|                     |  | Level 1                 |  
|Investments:         |  |                         |  
|Senior secured loans |  | $                       | —
|Unitranche loans     |  |                         | —
|Junior secured loans |  |                         | —
|Equity securities    |  |                         | —
|Total Investments    |  | $                       | —
|                     |  |                         |  
|Secured borrowings   |  | $                       | —



Senior, unitranche and junior secured loans
are collateralized by tangible and intangible assets of the borrowers. These investments include loans to entities that have some
level of challenge in obtaining financing from other, more conventional institutions, such as a bank. Interest rates on these loans
are either fixed or floating, and are based on current market conditions and credit ratings of the borrower. The contractual interest
rates on the loans ranged between 6.15% to 17.00% at March 31, 2017 and 5.75% to 17.00% at December 31, 2016. The maturity dates
on the loans outstanding at March 31, 2017 range between April 2017 and September 2023.



The following tables provide a reconciliation
of the beginning and ending balances for investments and secured borrowings that use Level 3 inputs for the three months ended
March 31, 2017 and 2016:



|                                                                           |  | Investments          |         |   |                  |  
|-------------------------------------------------------------------------- |  | -------------------- | ------- | - | ---------------- | -
|                                                                           |  | Senior secured loans |         |   | Unitranche loans |  
|Balance as of December 31, 2016                                            |  | $                    | 275,253 |   |                  | $
|Net change in unrealized appreciation (depreciation) on investments        |  |                      | (2,241  | ) |                  |  
|Net realized gain (loss) on investments                                    |  |                      | 41      |   |                  |  
|Purchases of investments and other adjustments to cost (1)                 |  |                      | 42,156  |   |                  |  
|Proceeds from principal payments and sales on investments  (2)             |  |                      | (14,986 | ) |                  |  
|Net change in unrealized appreciation (depreciation) on secured borrowings |  |                      | —       |   |                  |  
|Proceeds from secured borrowings                                           |  |                      | —       |   |                  |  
|Repayments on secured borrowings                                           |  |                      | —       |   |                  |  
|Balance as of March 31, 2017                                               |  | $                    | 300,223 |   |                  | $



23







|                                                                           |  | Investments          |         |   |                  |  
|-------------------------------------------------------------------------- |  | -------------------- | ------- | - | ---------------- | -
|                                                                           |  | Senior secured loans |         |   | Unitranche loans |  
|Balance as of December 31, 2015                                            |  | $                    | 190,559 |   |                  | $
|Reclassifications                                                          |  |                      | 6,525   |   |                  |  
|Net change in unrealized appreciation (depreciation) on investments        |  |                      | 989     |   |                  |  
|Net realized gain (loss) on investments                                    |  |                      | —       |   |                  |  
|Purchases of investments and other adjustments to cost (1)                 |  |                      | 18,271  |   |                  |  
|Proceeds from principal payments and sales on investments  (2)             |  |                      | (14,076 | ) |                  |  
|Net change in unrealized appreciation (depreciation) on secured borrowings |  |                      | —       |   |                  |  
|Proceeds from secured borrowings                                           |  |                      | —       |   |                  |  
|Repayments on secured borrowings                                           |  |                      | —       |   |                  |  
|Balance as of March 31, 2016                                               |  | $                    | 202,268 |   |                  | $










| | (1) | Includes purchases of new investments, effects of refinancing and restructurings, premium and discount accretion and amortization
and PIK interest.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Represent net proceeds from investments sold and principal paydowns received.
| | --- | -----------------------------------------------------------------------------



The total change in unrealized appreciation
(depreciation) included in the consolidated statements of operations within net change in unrealized appreciation (depreciation)
on investments for the three months ended March 31, 2017 and 2016, attributable to Level 3 investments still held at March 31,
2017 and 2016, was ($2,727) and $2,067, respectively. The total change in unrealized (appreciation) depreciation included in the
consolidated statements of operations within net change in unrealized (appreciation) depreciation on secured borrowings for the
three months ended March 31, 2017 and 2016, attributable to Level 3 investments still held at March 31, 2017 and 2016, was ($1)
and $28, respectively. Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in or out of Level
3 as of the beginning of the period which the reclassifications occur. There were no transfers among Levels 1, 2 and 3 during the
three months ended March 31, 2017 and 2016.



Significant Unobservable Inputs



ASC Topic 820 requires disclosure of quantitative
information about the significant unobservable inputs used in the valuation of assets and liabilities classified as Level 3 within
the fair value hierarchy. Disclosure of this information is not required in circumstances where a valuation (unadjusted) is obtained
from a third-party pricing service and the information regarding the unobservable inputs is not reasonably available to the Company
and as such, the disclosures provided below exclude those investments valued in that manner. The tables below are not intended
to be all-inclusive, but rather to provide information on significant unobservable inputs and valuation techniques used by the
Company.



The valuation techniques and significant
unobservable inputs used in recurring Level 3 fair value measurements of assets and liabilities as of March 31, 2017 were as follows:



|                     |  |            |         |     |                     |                                                          | Unobservable |                   | Weighted
Average |  |      | Range   | 
|-------------------- |  | ---------- | ------- | --- | ------------------- | -------------------------------------------------------- | ------------ | ----------------- | ---------------- |  | ---- | ------- | 
|                     |  | Fair Value |         |     | Valuation Technique |                                                          | Input        |                   | Mean             |  |      | Minimum | 
|Assets:              |  |            |         |     |                     |                                                          |              |                   |                  |  |      |         | 
|Senior secured loans |  | $          | 233,123 |     |                     | Discounted cash flow                                     |              | EBITDA multiples  |                  |  | 7.1  | x       | 
|                     |  |            |         |     |                     |                                                          |              | Market yields     |                  |  | 11.6 | %       | 
|Senior secured loans |  |            | 14,290  |     |                     | Waterfall                                                |              | Delinquency ratio |                  |  | 0.0  | %       | 
|Senior secured loans |  |            | 10,570  |     |                     | Enterprise value                                         |              | Revenue multiples |                  |  | 0.3  | x       | 
|Senior secured loans |  |            | 6,623   |     |                     | Discounted cash flow                                     |              | Revenue multiples |                  |  | 2.9  | x       | 
|                     |  |            |         |     |                     |                                                          |              | Market yields     |                  |  | 14.7 | %       | 
|Senior secured loans |  |            | 4,033   |     |                     | Enterprise value                                         |              | EBITDA multiples  |                  |  | 5.5  | x       | 
|Unitranche loans     |  |            | 43,478  |     |                     | Discounted cash flow                                     |              | EBITDA multiples  |                  |  | 6.1  | x       | 
|                     |  |            |         |     |                     |                                                          |              | Market yields     |                  |  | 13.7 | %       | 
|Unitranche loans     |  |            | 3,121   |     |                     | Combination of discounted cash flow and enterprise value |              | Revenue multiples |                  |  | 0.5  | x       | 
|                     |  |            |         |     |                     |                                                          |              | Market yields     |                  |  | 31.7 | %       | 
|Unitranche loans     |  |            | 288     |     |                     | Enterprise value                                         |              | EBITDA multiples  |                  |  | 5.0  | x       | 
|Junior secured loans |  |            | 5,675   |     |                     | Discounted cash flow                                     |              | EBITDA multiples  |                  |  | 9.1  | x       | 
|                     |  |            |         |     |                     |                                                          |              | Market yields     |                  |  | 11.2 | %       | 
|Equity securities    |  |            | 17,074  |     |                     | Enterprise value                                         |              | EBITDA multiples  |                  |  | 6.4  | x       | 
|Equity securities    |  |            | 8,083   |     |                     | Discounted cash flow                                     |              | EBITDA multiples  |                  |  | 3.8  | x       | 
|                     |  |            |         |     |                     |                                                          |              | Market yields     |                  |  | 18.0 | %       | 
|Equity securities    |  |            | 44      |     |                     | Enterprise value                                         |              | Revenue multiples |                  |  | 3.0  | x       | 
|Total Level 3 Assets |  | $          | 346,402 | (1) |                     |                                                          |              |                   |                  |  |      |         | 
|                     |  |            |         |     |                     |                                                          |              |                   |                  |  |      |         | 
|Liabilities:         |  |            |         |     |                     |                                                          |              |                   |                  |  |      |         | 
|Secured Borrowings   |  | $          | 1,315   |     |                     | Discounted cash flow                                     |              | Market yields     |                  |  | 7.7  | %       | 










| | (1) | Excludes loans of $63,132 at fair value where valuation (unadjusted) is obtained from a third-party pricing service for which such disclosure is not required. Also excludes loans of $8,615 at fair value which were fully repaid subsequent to March 31, 2017 where valuation represents the repayment price.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





24







The valuation techniques and significant
unobservable inputs used in recurring Level 3 fair value measurements of assets and liabilities as of December 31, 2016 were
as follows:



|                     |  |            |         |     |                     |                                                          | Unobservable |                   | Weighted
Average |  |      | Range   | 
|-------------------- |  | ---------- | ------- | --- | ------------------- | -------------------------------------------------------- | ------------ | ----------------- | ---------------- |  | ---- | ------- | 
|                     |  | Fair Value |         |     | Valuation Technique |                                                          | Input        |                   | Mean             |  |      | Minimum | 
|Assets:              |  |            |         |     |                     |                                                          |              |                   |                  |  |      |         | 
|Senior secured loans |  | $          | 214,267 |     |                     | Discounted cash flow                                     |              | EBITDA multiples  |                  |  | 7.0  | x       | 
|                     |  |            |         |     |                     |                                                          |              | Market yields     |                  |  | 11.7 | %       | 
|Senior secured loans |  |            | 1,054   |     |                     | Enterprise value                                         |              | Revenue multiples |                  |  | 0.6  | x       | 
|Senior secured loans |  |            | 12,727  |     |                     | Enterprise value                                         |              | EBITDA multiples  |                  |  | 4.1  | x       | 
|Unitranche loans     |  |            | 47,861  |     |                     | Discounted cash flow                                     |              | EBITDA multiples  |                  |  | 6.1  | x       | 
|                     |  |            |         |     |                     |                                                          |              | Market yields     |                  |  | 13.4 | %       | 
|Unitranche loans     |  |            | 3,491   |     |                     | Combination of discounted cash flow and enterprise value |              | Revenue multiples |                  |  | 0.5  | x       | 
|                     |  |            |         |     |                     |                                                          |              | Market yields     |                  |  | 29.2 | %       | 
|Unitranche loans     |  |            | 286     |     |                     | Enterprise value                                         |              | EBITDA multiples  |                  |  | 6.0  | x       | 
|Junior secured loans |  |            | 18,572  |     |                     | Discounted cash flow                                     |              | EBITDA multiples  |                  |  | 7.5  | x       | 
|                     |  |            |         |     |                     |                                                          |              | Market yields     |                  |  | 11.5 | %       | 
|Junior secured loans |  |            | —       |     |                     | Enterprise value                                         |              | Revenue multiples |                  |  | 0.6  | x       | 
|Equity securities    |  |            | 8,121   |     |                     | Discounted cash flow                                     |              | EBITDA multiples  |                  |  | 3.8  | x       | 
|                     |  |            |         |     |                     |                                                          |              | Market yields     |                  |  | 17.0 | %       | 
|Equity securities    |  |            | 18,164  |     |                     | Enterprise value                                         |              | EBITDA multiples  |                  |  | 4.6  | x       | 
|Equity securities    |  |            | 249     |     |                     | Enterprise value                                         |              | Revenue multiples |                  |  | 0.8  | x       | 
|Total Level 3 Assets |  | $          | 324,792 | (1) |                     |                                                          |              |                   |                  |  |      |         | 
|                     |  |            |         |     |                     |                                                          |              |                   |                  |  |      |         | 
|Liabilities:         |  |            |         |     |                     |                                                          |              |                   |                  |  |      |         | 
|Secured Borrowings   |  | $          | 1,314   |     |                     | Discounted cash flow                                     |              | Market yields     |                  |  | 7.7  | %       | 








| | (1) | Excludes loans of $88,128 at fair value where valuation (unadjusted) is obtained from a third-party pricing service for which such disclosure is not required.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------



The significant unobservable inputs used
in the market approach of fair value measurement of the Company’s investments are the market multiples of EBITDA or revenue
of the comparable guideline public companies. The Company selects a population of public companies for each investment with similar
operations and attributes of the portfolio company. Using these guideline public companies’ data, a range of multiples of
enterprise value to EBITDA is calculated. The Company selects percentages from the range of multiples for purposes of determining
the portfolio company’s estimated enterprise value based on said multiple and generally the latest twelve months EBITDA of
the portfolio company (or other meaningful measure). Increases (decreases) in the multiple will result in an increase (decrease)
in enterprise value, resulting in an increase (decrease) in the fair value estimate of the investment.



The significant unobservable inputs used
in the yield approach of fair value measurement of the Company’s investments is the discount rate used to discount the estimated
future cash flows expected to be received from the underlying investment, which include both future principal and interest payments.
Increases (decreases) in the discount rate would result in a decrease (increase) in the fair value estimate of the investment.
Included in the consideration and selection of discount rates are the following factors: risk of default, rating of the investment
and comparable investments, and call provisions.



Other Financial Assets and Liabilities



ASC Topic 820 requires disclosure of the
fair value of financial instruments for which it is practical to estimate such value. The Company believes that the carrying amounts
of its other financial instruments such as cash, receivables and payables approximate the fair value of such items due to the short
maturity of such instruments. Fair value of the Company’s revolving credit facility is estimated by discounting remaining
payments using applicable market rates or market quotes for similar instruments at the measurement date, if applicable. The Company
believes that the carrying value of its revolving credit facility approximates fair value. SBA-guaranteed debentures are carried
at cost and with their longer maturity dates, fair value is estimated by discounting remaining payments using current market rates
for similar instruments and considering such factors as the legal maturity date and the ability of market participants to prepay
the debentures. As of March 31, 2017 and December 31, 2016, the fair value of the Company’s SBA debentures using Level 3
inputs were estimated at $60,000 and $51,500, respectively, which is the same as the Company’s carrying value of the SBA
debentures.



25







Note 5. Transactions with Affiliated Companies



An affiliated company is a company in which
the Company has ownership of 5% or more of its voting securities. A controlled affiliate company is a company in which the Company
has ownership of more than 25% of its voting securities. Transactions related to the Company’s investments with affiliates
for the three months ended March 31, 2017 and 2016 were as follows:



|Portfolio Company                                      |  | Fair
    value at December 31, 
    2016 |        |  | Purchases
    (cost) |   |       | Sales
    and paydowns (cost) |  |   | PIK
    interest (cost) |   |  | Discount
    accretion |     |  | Net
    realized gains
    (losses) |   |    | Net
    unrealized gains (losses) |  |   | Fair
    value at March 31, 2017 | 
|------------------------------------------------------ |  | ---------------------------------------- | ------ |  | -------------------- | - | ----- | ----------------------------- |  | - | ----------------------- | - |  | ---------------------- | --- |  | ----------------------------------- | - | -- | --------------------------------- |  | - | -------------------------------- | 
|Non-controlled affiliate
    company investments (1) : |  |                                          |        |  |                      |   |       |                               |  |   |                         |   |  |                        |     |  |                                     |   |    |                                   |  |   |                                  | 
|American
    Community Homes, Inc.                     |  | $                                        | 13,950 |  |                      | $ | —     |                               |  | $ | 55                      |   |  | $                      | —   |  |                                     | $ | 16 |                                   |  | $ | —                                | 
|Rockdale Blackhawk,
    LLC                            |  |                                          | 27,077 |  |                      |   | 925   |                               |  |   | (16                     | ) |  |                        | —   |  |                                     |   | 47 |                                   |  |   | —                                | 
|Rocket Dog Brands,
    LLC                             |  |                                          | 1,054  |  |                      |   | —     |                               |  |   | —                       |   |  |                        | 130 |  |                                     |   | 1  |                                   |  |   | —                                | 
|SHI Holdings, Inc.                                     |  |                                          | 4,297  |  |                      |   | 205   |                               |  |   | —                       |   |  |                        | —   |  |                                     |   | 5  |                                   |  |   |                                  | 
|Summit
    Container Corporation                       |  |                                          | 3,663  |  |                      |   | —     |                               |  |   | (51                     | ) |  |                        | 19  |  |                                     |   | 6  |                                   |  |   | —                                | 
|Total
    non-controlled affiliate company investments |  | $                                        | 50,041 |  |                      | $ | 1,130 |                               |  | $ | (12                     | ) |  | $                      | 149 |  |                                     | $ | 75 |                                   |  | $ | —                                | 
|Controlled affiliate
    company investments (1) :     |  |                                          |        |  |                      |   |       |                               |  |   |                         |   |  |                        |     |  |                                     |   |    |                                   |  |   |                                  | 
|TPP Acquisition, Inc. (2)                              |  | $                                        | —      |  |                      | $ | —     |                               |  | $ | —                       |   |  | $                      | —   |  |                                     | $ | —  |                                   |  | $ | —                                | 
|TPP Operating, Inc. (2)                                |  |                                          | 8,899  |  |                      |   | 2,807 |                               |  |   | —                       |   |  |                        | —   |  |                                     |   | —  |                                   |  |   | —                                | 
|Total
    controlled affiliate company investments     |  | $                                        | 8,899  |  |                      | $ | 2,807 |                               |  | $ | —                       |   |  | $                      | —   |  |                                     | $ | —  |                                   |  | $ | —                                | 



|Portfolio Company                                  |  | Fair value at December 31,
 2015 |        |  | Purchases (cost) |   |     | Sales and paydowns (cost) |  |   | PIK interest (cost) |   |  | Discount accretion |     |  | Net realized gains (losses) |   |    | Net unrealized gains (losses) |  |   | Fair value at March 31,
 2016 | 
|-------------------------------------------------- |  | -------------------------------- | ------ |  | ---------------- | - | --- | ------------------------- |  | - | ------------------- | - |  | ------------------ | --- |  | --------------------------- | - | -- | ----------------------------- |  | - | ----------------------------- | 
|Non-controlled affiliate company investments (1) : |  |                                  |        |  |                  |   |     |                           |  |   |                     |   |  |                    |     |  |                             |   |    |                               |  |   |                               | 
|American Community Homes, Inc.                     |  | $                                | 11,692 |  |                  | $ | 488 |                           |  | $ | —                   |   |  | $                  | 46  |  |                             | $ | 14 |                               |  | $ | —                             | 
|Rockdale Blackhawk, LLC                            |  |                                  | 21,903 |  |                  |   | —   |                           |  |   | (1,099              | ) |  |                    | —   |  |                             |   | 45 |                               |  |   | —                             | 
|Rocket Dog Brands, LLC                             |  |                                  | 1,752  |  |                  |   | 194 |                           |  |   | —                   |   |  |                    | 89  |  |                             |   | —  |                               |  |   | —                             | 
|Summit Container Corporation                       |  |                                  | 3,400  |  |                  |   | 137 |                           |  |   | (51                 | ) |  |                    | 10  |  |                             |   | 6  |                               |  |   | —                             | 
|Total non-controlled affiliate company investments |  | $                                | 38,747 |  |                  | $ | 819 |                           |  | $ | (1,150              | ) |  | $                  | 145 |  |                             | $ | 65 |                               |  | $ | —                             | 
|Controlled affiliate company investments (1) :     |  |                                  |        |  |                  |   |     |                           |  |   |                     |   |  |                    |     |  |                             |   |    |                               |  |   |                               | 
|TPP Acquisition, Inc.                              |  | $                                | 6,525  |  |                  | $ | 340 |                           |  | $ | —                   |   |  | $                  | —   |  |                             | $ | —  |                               |  | $ | —                             | 
|Total controlled affiliate company investments     |  | $                                | 6,525  |  |                  | $ | 340 |                           |  | $ | —                   |   |  | $                  | —   |  |                             | $ | —  |                               |  | $ | —                             | 



|                                                   |  | For the three months ended March 31, |      
|-------------------------------------------------- |  | ------------------------------------ | -----
|                                                   |  | 2017                                 |      
|Portfolio Company                                  |  | Interest
 income                     |      
|Non-controlled affiliate company investments (1)   |  |                                      |      
|American Community Homes, Inc.                     |  | $                                    | 365  
|Rockdale Blackhawk, LLC                            |  |                                      | 436  
|Rocket Dog Brands, LLC                             |  |                                      | 129  
|SHI Holdings, Inc.                                 |  |                                      | 103  
|Summit Container Corporation                       |  |                                      | 163  
|Total non-controlled affiliate company investments |  | $                                    | 1,196
|Controlled affiliate company investments (1) :     |  |                                      |      
|TPP Acquisition, Inc.                              |  | $                                    | —    
|TPP Operating, Inc.                                |  |                                      | 177  
|Total controlled affiliate company investments     |  | $                                    | 177  










| | (1) | Includes both loan and equity
security investment transactions for these portfolio companies.
| | --- | ---------------------------------------------------------------------------------------------



| | (2) | On September 2, 2016 TPP
Acquisition, Inc. filed for bankruptcy as part of a restructuring process. The existing lenders, including the Company submitted
a credit bid to purchase certain assets of TPP Acquisition, Inc., which was approved by the bankruptcy court and the sale closed
on November 8, 2016. A new operating company, TPP Operating, Inc., was formed to acquire certain of the assets of TPP Acquisition,
Inc. and continue business operations. These new operations are no longer encumbered by significant lease liabilities. The Company
owns 40% of the equity interests in both the former operating company, TPP Acquisition, Inc. (which is in wind-down) and the new
operating company, TPP Operating, Inc. During the bankruptcy period, the Company and the other existing lenders provided additional
financing through a debtor-in-possession financing (“DIP”) facility. Upon the purchase of TPP Acquisition, Inc.’s
assets, TPP Operating, Inc. entered into a new credit facility with the existing lenders, including the Company. The principal
amount of the new facility with TPP Operating, Inc. represented the amount owed to the lenders under the pre-petition facilities
plus the amount funded under the DIP facility, less the amount of the credit bid. The cost basis of the Company’s equity
investment in TPP Operating, Inc. represents the credit bid and equates to the reduction of principal outstanding on the debt
facilities when the new facility was issued to TPP Operating, Inc.  As of March 31, 2017, the Company valued its positions
in TPP Operating, Inc. utilizing an enterprise value waterfall model. The key inputs to the model were an estimated 2017 revenue
forecast and revenue multiple developed using comparable public and private company data.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



26







Note 6. Transactions with Related Parties



The Company has entered into an Investment
Advisory and Management Agreement with MC Advisors, under which MC Advisors, subject to the overall supervision of the Board, provides
investment advisory services to the Company. The Company pays MC Advisors a fee for its services under the Investment Advisory
and Management Agreement consisting of two components—a base management fee and an incentive fee. The base management fee
is calculated at an annual rate equal to 1.75% of invested assets (calculated as total assets excluding cash) and is payable in
arrears. Base management fees for the three months ended March 31, 2017 and 2016 were $1,805 and $1,500, respectively.



The incentive fee consists of two parts.
The first part is calculated and payable quarterly in arrears and equals 20% of “pre-incentive fee net investment income”
for the immediately preceding quarter, subject to a 2% (8% annualized) preferred return, or “hurdle,” and a “catch
up” feature. The foregoing incentive fee is subject to a total return requirement, which provides that no incentive fee in
respect of preincentive fee net investment income will be payable except to the extent that 20.0% of the cumulative net increase
in net assets resulting from operations over the then current and 11 preceding calendar quarters exceeds the cumulative incentive
fees accrued and/or paid for the 11 preceding calendar quarters. Therefore, any ordinary income incentive fee that is payable in
a calendar quarter will be limited to the lesser of (1) 20% of the amount by which preincentive fee net investment income for such
calendar quarter exceeds the 2% hurdle, subject to the “catch-up” provision, and (2) (x) 20% of the cumulative net
increase in net assets resulting from operations for the then current and 11 preceding calendar quarters minus (y) the cumulative
incentive fees accrued and/or paid for the 11 preceding calendar quarters. For the foregoing purpose, the “cumulative net
increase in net assets resulting from operations” is the sum of preincentive fee net investment income, realized gains and
losses and unrealized appreciation and depreciation for the then current and 11 preceding calendar quarters. The second part of
the incentive fee is determined and payable in arrears as of the end of each fiscal year in an amount equal to 20% of realized
capital gains, if any, on a cumulative basis from inception through the end of the year, computed net of all realized capital losses
on a cumulative basis and unrealized depreciation, less the aggregate amount of any previously paid capital gain incentive fees.



Incentive fees, for the three months ended
March 31, 2017 and 2016 were $1,290 and $1,740, respectively. Incentive fees for the three months ended March 31, 2017 consisted
of part one incentive fees (based on net investment income) of $1,465 and part two incentive fees (based upon net realized and
unrealized gains and losses) of ($175). Part two incentive fees reduced total incentive fees for the three months ended March 31,
2017 primarily as a result of net unrealized losses during the period. Incentive fees for the three months ended March 31, 2016
consisted of part one incentive fees (based on net investment income) of $1,505 and part two incentive fees (based upon net realized
and unrealized gains and losses) of $235. The Company accrues, but does not pay, a capital gains incentive fee in connection with
any unrealized capital appreciation, as appropriate. If, on a cumulative basis, the sum of net realized gains (losses) plus net
unrealized appreciation (depreciation) decreases during a period, the Company will reverse any excess capital gains incentive fee
previously accrued such that the amount of capital gains incentive fee accrued is no more than 20% of the sum of net realized gains
(losses) plus net unrealized appreciation (depreciation).



The Company has entered into an Administration
Agreement with Monroe Capital Management Advisors, LLC (“MC Management”), under which the Company reimburses MC Management
(subject to the review and approval of the Board) for its allocable portion of overhead and other expenses, including the costs
of furnishing the Company with office facilities and equipment and providing clerical, bookkeeping, record-keeping and other administrative
services at such facilities, and the Company’s allocable portion of the cost of the chief financial officer and chief compliance
officer and their respective staffs. To the extent that MC Management outsources any of its functions, the Company will pay the
fees associated with such functions on a direct basis, without incremental profit to MC Management. For the three months ended
March 31, 2017 and 2016, the Company incurred $830 and $699, respectively, in administrative expenses (included within Professional
fees, Administrative service fees and General and administrative expenses on the consolidated statements of operations) under the
Administration Agreement, of which $330 and $328, respectively, was related to MC Management overhead and salary allocation and
paid directly to MC Management. As of March 31, 2017 and December 31, 2016, $330 and $330, respectively, of expenses were due to
MC Management under this agreement and are included in accounts payable and accrued expenses on the consolidated statements of
assets and liabilities.



The Company has entered into a license agreement
with Monroe Capital LLC under which Monroe Capital LLC has agreed to grant the Company a non-exclusive, royalty-free license to
use the name “Monroe Capital” for specified purposes in its business. Under this agreement, the Company will have a
right to use the “Monroe Capital” name at no cost, subject to certain conditions, for so long as the Advisor or one
of its affiliates remains its investment advisor. Other than with respect to this limited license, the Company has no legal right
to the “Monroe Capital” name.



As of March 31, 2017 and December 31, 2016,
the Company had accounts payable to members of the Board of $37 and zero, respectively, representing accrued and unpaid fees for
their services.



Note 7. Borrowings



Revolving Credit Facility: As of
March 31, 2017 and December 31, 2016, the Company had $136,000 and $129,000 outstanding, respectively, under its revolving credit
facility with ING Capital LLC, as agent, to finance the purchase of the Company’s assets. As of March 31, 2017 the maximum
amount the Company was able to borrow was $200,000 and this borrowing can be increased to $300,000 pursuant to an accordion feature
(subject to maintaining 200% asset coverage, as defined by the 1940 Act). On February 22, 2017, the Company closed a $40,000 upsize
to the revolving credit facility, bringing the maximum amount the Company is able to borrow from $160,000 to the now current maximum
amount of $200,000, in accordance with the facility’s accordion feature. The maturity date on the facility is December 14,
2020.



27







The revolving credit facility is secured
by a lien on all of the Company’s assets, including cash on hand, but excluding the assets of the Company’s wholly-owned
subsidiary, MRCC SBIC. The Company’s ability to borrow under the revolving credit facility is subject to availability under
a defined borrowing base, which varies based on portfolio characteristics and certain eligibility criteria and concentration limits,
as well as required valuation methodologies. The Company may make draws under the revolving credit facility to make or purchase
additional investments through December 2019 and for general working capital purposes until the maturity date of the revolving
credit facility. Borrowings under the revolving credit facility bear interest, at the Company’s election, at an annual rate
of LIBOR (one-month, two-month, three-month or six-month at our discretion based on the term of the borrowing) plus 3.00%, with
a further step-down to LIBOR plus 2.75% when net worth (excluding investments in MRCC SBIC) exceeds $225,000 or at a daily rate
equal to 2.00% per annum plus the greater of the prime interest rate, the federal funds rate plus 0.5% or LIBOR plus 1.0%. In addition
to the stated interest rate on borrowings under the revolving credit facility, the Company is required to pay a fee of 0.5% per
annum on any unused portion of the revolving credit facility if the unused portion of the facility is less than 65% of the then
available maximum borrowing or a fee of 1.0% per annum on any unused portion of the revolving credit facility if the unused portion
of the facility is greater than or equal to 65% of the then available maximum borrowing. As of March 31, 2017 and December 31,
2016, the outstanding borrowings were accruing at a weighted average interest rate of 3.9% and 3.8%, respectively. The weighted
average interest rate of the revolving credit facility borrowings (excluding debt issuance costs) for the three months ended March
31, 2017 and 2016 was 4.1% and 3.5%, respectively. The weighted average fee rate on the unused portion of the revolving credit
facility for the three months ended March 31, 2017 and 2016 was 0.5% and 0.5%, respectively.



The Company’s ability to borrow under
the revolving credit facility is subject to availability under the borrowing base, which permits the Company to borrow up to 70%
of the fair market value of its portfolio company investments depending on the type of the investment the Company holds and whether
the investment is quoted. The Company’s ability to borrow is also subject to certain concentration limits, and continued
compliance with the representations, warranties and covenants given by the Company under the facility. The revolving credit facility
contains certain financial and restrictive covenants, including, but not limited to, the Company’s maintenance of: (1) a
minimum consolidated total net assets at least equal to the greater of (a) 40% of the consolidated total assets on the last day
of each quarter or (b) $120,000 plus 65% of the net proceeds to the Company from sales of its securities after December 14, 2015;
(2) a ratio of total assets (less total liabilities other than indebtedness) to total indebtedness of not less than 2.1 times;
and (3) a ratio of earnings before interest and taxes to interest expense of at least 2.5 times. The credit facility also requires
the Company to undertake customary indemnification obligations with respect to ING Capital LLC and other members of the lending
group and to reimburse the lenders for expenses associated with entering into the credit facility. The revolving credit facility
also has customary provisions regarding events of default, including events of default for nonpayment, change in control transactions
at both Monroe Capital Corporation and MC Advisors, failure to comply with financial and negative covenants, and failure to maintain
our relationship with MC Advisors. If the Company incurs an event of default under the revolving credit facility and fails to remedy
such default under any applicable grace period, if any, then the entire revolving credit facility could become immediately due
and payable, which would materially and adversely affect the Company’s liquidity, financial condition, results of operations
and cash flows.



The Company’s revolving credit facility
also imposes certain conditions that may limit the amount of the Company’s distributions to stockholders. Distributions payable
in the Company’s common stock under the DRIP are not limited by the revolving credit facility. Distributions in cash or property
other than common stock are generally limited to 115% of the amount of distributions required to maintain the Company’s status
as a RIC.



SBA Debentures: On February 28, 2014,
the Company’s wholly-owned subsidiary, MRCC SBIC received a license from the SBA to operate as a SBIC under Section 301(c)
of the Small Business Investment Act of 1958, as amended. MRCC SBIC commenced operations on September 16, 2013.



The SBIC license allows MRCC SBIC to obtain
leverage by issuing SBA-guaranteed debentures, subject to the issuance of a leverage commitment by the SBA and other customary
procedures. SBA-guaranteed debentures are non-recourse, interest only debentures with interest payable semi-annually and have a
ten year maturity. The principal amount of SBA-guaranteed debentures is not required to be paid prior to maturity but may be prepaid
at any time without penalty. The interest rate of SBA-guaranteed debentures is fixed on a semi-annual basis (pooling date) at a
market-driven spread over U.S. Treasury Notes with 10-year maturities. The SBA, as a creditor, has a superior claim to MRCC SBIC’s
assets over the Company’s stockholders in the event the Company liquidates MRCC SBIC or the SBA exercises its remedies upon
an event of default.



SBA regulations currently limit the amount
that an individual SBIC may borrow to a maximum of $150,000 when it has at least $75,000 in regulatory capital, receives a leverage
commitment from the SBA and has been through an audit examination by the SBA subsequent to licensing. The SBA also historically
limited a related group of SBICs (commonly referred to as a “family of funds”) to a maximum of $225,000 in total borrowings.
On December 18, 2015, this family of funds limitation was raised to $350,000 in total borrowings. As the Company has other affiliated
SBICs already in operation, MRCC SBIC was historically limited to a maximum of $40,000 in borrowings. Pursuant to the increase
in the family of funds limitation, the Company submitted a commitment application to the SBA and on April 13, 2016, MRCC SBIC was
approved by the SBA for an additional $75,000 in SBA-guaranteed debentures, for a total of $115,000 in available debentures.



As of March 31, 2017, MRCC SBIC had $50,000
in leverageable capital and $60,000 in SBA-guaranteed debentures outstanding. As of December 31, 2016, MRCC SBIC had $41,000 in
leverageable capital and $51,500 in SBA-guaranteed debentures outstanding. In order to gain access to the entirety of the $55,000
in remaining available debentures, the Company would be required to contribute to MRCC SBIC an additional $7,624 in leverageable
capital. The Company made the additional contribution of $7,624 in leverageable capital to MRCC SBIC subsequent to March 31, 2017.



28







As of March 31, 2017, MRCC SBIC had the
following SBA-guaranteed debentures outstanding (dollars in thousands):



|Maturity Date  |  | Interest Rate |     |   | Amount |  
|-------------- |  | ------------- | --- | - | ------ | -
|September 2024 |  |               | 3.4 | % |        | $
|March 2025     |  |               | 3.3 | % |        |  
|March 2025     |  |               | 2.9 | % |        |  
|September 2025 |  |               | 3.6 | % |        |  
|March 2027     |  |               | 3.5 | % |        |  
|Total          |  |               |     |   |        | $



As of December 31, 2016, MRCC SBIC had the
following SBA-guaranteed debentures outstanding (dollars in thousands):



|Maturity Date  |  | Interest Rate |     |      | Amount |  
|-------------- |  | ------------- | --- | ---- | ------ | -
|September 2024 |  |               | 3.4 | %    |        | $
|March 2025     |  |               | 3.3 | %    |        |  
|March 2025     |  |               | 2.9 | %    |        |  
|September 2025 |  |               | 3.6 | %    |        |  
|March 2027     |  |               | 2.1 | %(1) |        |  
|March 2027     |  |               | 2.0 | %(1) |        |  
|Total          |  |               |     |      |        | $










| | (1) | Represents an interim rate
of interest as the SBA-guaranteed debentures had not yet pooled.
| | --- | -------------------------------------------------------------------------------------------



On October 2, 2014, the Company was granted
exemptive relief from the SEC for permission to exclude the debt of MRCC SBIC guaranteed by the SBA from the 200% asset coverage
test under the 1940 Act. The receipt of this exemption for this SBA-guaranteed debt increases flexibility under the 200% asset
coverage test.



Secured Borrowings: Certain
partial loan sales do not qualify for sale accounting under ASC Topic 860 because these sales do not meet the definition of a “participating
interest,” as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales
which do not meet the definition of a participating interest remain as an investment on the accompanying consolidated statements
of assets and liabilities and the portion sold is recorded as a secured borrowing in the liabilities section of the consolidated
statements of assets and liabilities. For these partial loan sales, the interest earned on the entire loan balance is recorded
within “interest income” and the interest earned by the buyer in the partial loan sale is recorded within “interest
and other debt financing expenses” in the accompanying consolidated statements of operations.



As of March 31, 2017, secured borrowings
at fair value totaled $1,315 and the fair value of the loans that are associated with these secured borrowings was $5,854. As of
December 31, 2016, secured borrowings at fair value totaled $1,314 and the fair value of the loans that are associated with these
secured borrowings was $5,814. These secured borrowings were created as a result of the Company’s completion of partial loan
sales of certain unitranche loan assets during the year ended December 31, 2013 that did not meet the definition of a “participating
interest.” As a result, sale treatment was not allowed and these partial loan sales were treated as secured borrowings. No
such partial loan sales occurred during the year ended December 31, 2016 and the three months ended March 31, 2017. During the
three months ended March 31, 2017 and 2016, repayments on secured borrowings totaled zero and $200, respectively. The weighted
average interest rate on the Company’s secured borrowings was approximately 6.5% and 6.3% as of March 31, 2017 and December
31, 2016, respectively.



Components of interest expense: The
components of the Company’s interest expense and other debt financing expenses are as follows:



|                                                 |  | Three months ended March 31, |      
|------------------------------------------------ |  | ---------------------------- | -----
|                                                 |  | 2017                         |      
|Interest expense – revolving credit facility     |  | $                            | 1,345
|Interest expense – SBA debentures                |  |                              | 406  
|Amortization of deferred financing costs         |  |                              | 231  
|Interest expense – secured borrowings            |  |                              | 21   
|Other                                            |  |                              | 7    
|Total interest and other debt financing expenses |  | $                            | 2,010



29









Note 8. Distributions



The Company’s distributions are
recorded on the record date. The following table summarizes distributions declared during the three months ended March 31, 2017
and 2016:



|Date Declared                      |  | Record Date    |      | Payment Date   |  | Amount
    Per Share |       |  | Cash
    Distribution |   |       | DRIP
    Shares Issued |  |   | DRIP
    Shares Value |  |  | DRIP
    Shares Repurchased in the Open Market |        |  | Cost
    of DRIP Shares Repurchased |  
|---------------------------------- |  | -------------- | ---- | -------------- |  | -------------------- | ----- |  | --------------------- | - | ----- | ---------------------- |  | - | --------------------- |  |  | ---------------------------------------------- | ------ |  | ----------------------------------- | -
|Three months ended March 31, 2017: |  |                |      |                |  |                      |       |  |                       |   |       |                        |  |   |                       |  |  |                                                |        |  |                                     |  
|March 7,
    2017                  |  | March 17, 2017 |      | March 31, 2017 |  | $                    | 0.35  |  |                       | $ | 5,549 |                        |  |   | 16,217                |  |  | $                                              | 254    |  |                                     |  
|Total distributions declared       |  |                |      |                |  | $                    | 0.35  |  |                       | $ | 5,549 |                        |  |   | 16,217                |  |  | $                                              | 254    |  |                                     |  
|                                   |  |                |      |                |  |                      |       |  |                       |   |       |                        |  |   |                       |  |  |                                                |        |  |                                     |  
|Three months ended March 31, 2016: |  |                |      |                |  |                      |       |  |                       |   |       |                        |  |   |                       |  |  |                                                |        |  |                                     |  
|March 4, 2016                      |  | March 15, 2016 |      | March 31, 2016 |  | $                    | 0.35  |  |                       | $ | 4,553 |                        |  |   | —                     |  |  | $                                              | —      |  |                                     |  
|Total distributions declared       |  | $              | 0.35 |                |  | $                    | 4,553 |  |                       |   | —     |                        |  | $ | —                     |  |  |                                                | 20,144 |  |                                     | $



Note 9. Stock Activity



Stock Issuances: On July 1, 2016,
the Company amended the ATM securities offering program with MLV & Co, LLC (“MLV”) and JMP Securities LLC to replace
MLV with FBR Capital Markets & Co., an affiliate of MLV. During the three months ended March 31, 2017, the Company sold 113,600
shares at an average price of $15.70 per share for gross proceeds of $1,784 under the ATM program. Aggregate underwriters’
discounts and commissions were $27 and offering costs were $21, resulting in net proceeds of approximately $1,736. There were no
stock issuances during the three months ended March 31, 2016.



Note 10. Commitments and Contingencies



Commitments: As of March 31, 2017
and December 31, 2016, the Company had $34,961 and $37,716, respectively, in outstanding commitments to fund investments under
undrawn revolvers, capital expenditure loans and delayed draw commitments.



Indemnifications: In the normal course
of business, the Company enters into contracts and agreements that contain a variety of representations and warranties that provide
general indemnifications. The Company’s maximum exposure under these agreements is unknown, as these involve future claims
that may be made against the Company but that have not occurred. The Company expects the risk of any future obligations under these
indemnifications to be remote.



Concentration of credit and counterparty
risk: Credit risk arises primarily from the potential inability of counterparties to perform in accordance with the terms of
the contract. In the event that the counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk
of default depends on the creditworthiness of the counterparties or issuers of the instruments. It is the Company’s policy
to review, as necessary, the credit standing of each counterparty.



Market risk: The Company’s
investments and borrowings are subject to market risk. Market risk is the potential for changes in the value due to market changes.
Market risk is directly impacted by the volatility and liquidity in the markets in which the investments and borrowings are traded.



Legal proceedings: In the normal
course of business, the Company may be subject to legal and regulatory proceedings that are generally incidental to its ongoing
operations. While there can be no assurance of the ultimate disposition of any such proceedings, the Company is not currently aware
of any such proceedings or disposition that would have a material adverse effect on the Company’s consolidated financial
statements.



Note 11. Financial Highlights



The following is a schedule of financial
highlights for the three months ended March 31, 2017 and 2016:



|                                                          |  | March 31, 2017 |            |   | March 31, 2016 |  
|--------------------------------------------------------- |  | -------------- | ---------- | - | -------------- | -
|Per share data:                                           |  |                |            |   |                |  
|Net asset value at beginning of period                    |  | $              | 14.52      |   |                | $
|Net investment income (1)                                 |  |                | 0.36       |   |                |  
|Net gain (loss) on investments and secured borrowings (1) |  |                | (0.21      | ) |                |  
|Net increase in net assets from operations (1)            |  |                | 0.15       |   |                |  
|Stockholder distributions (2)                             |  |                | (0.35      | ) |                |  
|Effect of share issuances above (below) NAV (3)           |  |                | 0.02       |   |                |  
|Net asset value at end of period                          |  | $              | 14.34      |   |                | $
|                                                          |  |                |            |   |                |  
|Net assets at end of period                               |  | $              | 239,606    |   |                | $
|Shares outstanding at end of period                       |  |                | 16,711,686 |   |                |  
|Per share market value at end of period                   |  | $              | 15.73      |   |                | $
|Total return based on market value (4)                    |  |                | 4.56       | % |                |  
|Total return based on average net asset value (5)         |  |                | 1.07       | % |                |  
|Ratio/Supplemental data:                                  |  |                |            |   |                |  
|Ratio of net investment income to average net assets (6)  |  |                | 11.83      | % |                |  
|Ratio of total expenses to average net assets (6) (7)     |  |                | 8.44       | % |                |  
|Average debt outstanding                                  |  | $              | 180,578    |   |                | $
|Average debt outstanding per share                        |  | $              | 10.88      |   |                | $
|Portfolio turnover (8)                                    |  |                | 8.14       | % |                |  














| | (1) | Calculated using the weighted average shares outstanding during the period.
| | --- | ---------------------------------------------------------------------------





30







| | (2) | Management monitors available taxable earnings, including net investment income and realized capital gains, to determine if
a tax return of capital may occur for the year. To the extent the Company’s taxable earnings fall below the total amount
of the Company’s distributions for that fiscal year, a portion of those distributions may be deemed a tax return of capital
to the Company’s stockholders. The tax character of distributions will be determined at the end of the fiscal year. However,
if the character of such distributions were determined as of March 31, 2017 and 2016, none of the distributions would have been
characterized as a tax return of capital to the Company’s stockholders; this tax return of capital may differ from the return
of capital calculated with reference to net investment income for financial reporting purposes.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Includes the impact of different share amounts used in calculating per share data as a result of calculating certain per share
data based on weighted average shares outstanding during the period and certain per share data based on shares outstanding as of
a period end or transaction date.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Total return based on market value is calculated assuming a purchase of common shares at the market value on the first day
and a sale at the market value on the last day of the periods reported. Distributions, if any, are assumed for purposes of this
calculation to be reinvested at prices obtained under the Company’s DRIP. Total return based on market value does not reflect
brokerage commissions. Return calculations are not annualized.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Total return based on average net asset value is calculated by dividing the net increase in net assets from operations by the
average net asset value. Return calculations are not annualized.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | Ratios are annualized. Incentive fees included within the ratio are not annualized.
| | --- | -----------------------------------------------------------------------------------



| | (7) | The following is a schedule of supplemental ratios for the three months ended March 31, 2017 and 2016. These ratios have been
annualized unless otherwise noted.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                          |  | March 31, 2017 |      |   | March 31, 2016 | 
|------------------------------------------------------------------------- |  | -------------- | ---- | - | -------------- | 
|Ratio of interest and other debt financing expenses to average net assets |  |                | 3.39 | % |                | 
|Ratio of expenses (without incentive fees) to average net assets          |  |                | 7.90 | % |                | 
|Ratio of incentive fees, to average net assets (not annualized)           |  |                | 0.54 | % |                | 



| | (8) | Ratios are not annualized.
| | --- | --------------------------



31







ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Except as otherwise specified, references
to “we,” “us” and “our” refer to Monroe Capital Corporation and its consolidated subsidiaries.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our
consolidated financial statements and related notes appearing in our annual report on Form 10-K (the “Annual Report”)
for the year ended December 31, 2016, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 7,
2017. The information contained in this section should also be read in conjunction with our unaudited consolidated financial statements
and related notes and other financial information appearing elsewhere in this quarterly report on Form 10-Q (the “Quarterly
Report”).



FORWARD-LOOKING STATEMENTS



This Quarterly Report, including Management’s
Discussion and Analysis of Financial Condition and Results of Operations, contains statements that constitute forward-looking statements,
which relate to future events or our future performance or future financial condition. These forward-looking statements are not
historical facts, but rather are based on current expectations, estimates and projections about our company, our industry, our
beliefs and our assumptions. The forward-looking statements contained in this Quarterly Report involve risks and uncertainties,
including statements as to:



| | · | our future operating results;
| | - | -----------------------------



| | · | our business prospects and the prospects of our prospective portfolio companies;
| | - | --------------------------------------------------------------------------------



| | · | the dependence of our future success on the general economy and its impact on the industries in which we invest;
| | - | ----------------------------------------------------------------------------------------------------------------



| | · | the impact of a protracted decline in the liquidity of credit markets on our business;
| | - | --------------------------------------------------------------------------------------



| | · | the impact of increased competition;
| | - | ------------------------------------



| | · | the impact of fluctuations in interest rates on our business and our portfolio companies;
| | - | -----------------------------------------------------------------------------------------



| | · | our contractual arrangements and relationships with third parties;
| | - | ------------------------------------------------------------------



| | · | the valuation of our investments in portfolio companies, particularly those having no liquid trading market;
| | - | ------------------------------------------------------------------------------------------------------------



| | · | the ability of our prospective portfolio companies to achieve their objectives;
| | - | -------------------------------------------------------------------------------



| | · | our expected financings and investments;
| | - | ----------------------------------------



| | · | the adequacy of our cash resources and working capital;
| | - | -------------------------------------------------------



| | · | the ability of our Monroe Capital BDC Advisors, LLC (“MC Advisors”) to locate suitable investments for us and to monitor our investments; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------



| | · | the impact of future legislation and regulation on our business and our portfolio companies.
| | - | --------------------------------------------------------------------------------------------



We use words such as “anticipates,”
“believes,” “expects,” “intends,” “seeks,” “plans,” “estimates,”
“targets,” “expects” and similar expressions to identify forward-looking statements. The forward looking
statements contained in this Quarterly Report involve risks and uncertainties. Our actual results could differ materially from
those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Part I—Item
1A. Risk Factors” in our Annual Report and “Part II—Item 1A. Risk Factors” in this Quarterly
Report.



Although we believe that the assumptions
on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and
as a result, the forward-looking statements based on those assumptions also could be inaccurate. Important assumptions include
our ability to originate new loans and investments, certain margins and levels of profitability and the availability of additional
capital. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Quarterly
Report should not be regarded as a representation by us that our plans and objectives will be achieved.



We have based the forward-looking statements
included in this Quarterly Report on information available to us on the date of this Quarterly Report, and we assume no obligation
to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements
in this Quarterly Report, whether as a result of new information, future events or otherwise, you are advised to consult any additional
disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including annual reports
on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.



32







Overview



Monroe Capital Corporation is an externally
managed, closed-end, non-diversified management investment company that has elected to be treated as a business development company
(“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for tax purposes,
we have elected to be treated as a regulated investment company (“RIC”) under the subchapter M of the Internal Revenue
Code of 1986, as amended (the “Code”). We were incorporated under the Maryland General Corporation Law on February
9, 2011. We are a specialty finance company focused on providing financing solutions primarily to lower middle-market companies
in the United States and Canada. We provide customized financing solutions focused primarily on senior secured, junior secured
and unitranche (a combination of senior secured and junior secured debt in the same facility in which we syndicate a “first
out” portion of the loan to an investor and retain a “last out” portion of the loan) debt and, to a lesser extent,
unsecured subordinated debt and equity, including equity co-investments in preferred and common stock, and warrants.



Our shares are currently listed on the NASDAQ
Global Select Market under the symbol “MRCC”.



Our investment objective is to maximize
the total return to our stockholders in the form of current income and capital appreciation through investment in senior, unitranche
and junior secured debt and, to a lesser extent, subordinated debt and equity investments. We seek to use our extensive leveraged
finance origination infrastructure and broad expertise in sourcing loans to invest in primarily senior, unitranche and junior secured
debt of middle-market companies. Our investments in senior, unitranche, junior secured debt and other investments generally will
range between $2.0 million and $18.0 million each, although this investment size may vary proportionately with the size of our
capital base. As of March 31, 2017, our portfolio included approximately 71.8% senior secured debt, 12.1% unitranche secured debt,
10.1% junior secured debt and 6.0% equity securities, compared to December 31, 2016, when our portfolio included approximately
66.7% senior secured debt, 12.5% unitranche secured debt, 14.4% junior secured debt and 6.4% equity securities. We expect that
the companies in which we invest may be leveraged, often as a result of leveraged buy-outs or other recapitalization transactions,
and, in certain cases, will not be rated by national ratings agencies. If such companies were rated, we believe that they would
typically receive a rating below investment grade (between BB and CCC under the Standard & Poor’s system) from the national
rating agencies.



While our primary focus is to maximize current
income and capital appreciation through debt investments in thinly traded or private U.S. companies, we may invest a portion of
the portfolio in opportunistic investments in order to seek to enhance returns to stockholders. Such investments may include investments
in high-yield bonds, distressed debt, private equity or securities of public companies that are not thinly traded and securities
of middle-market companies located outside of the United States. We expect that these public companies generally will have debt
securities that are non-investment grade.



On February 28, 2014, our wholly-owned subsidiary,
Monroe Capital Corporation SBIC, LP (“MRCC SBIC”), a Delaware limited partnership, received a license from the Small
Business Administration (“SBA”) to operate as a Small Business Investment Company (“SBIC”) under Section
301(c) of the Small Business Investment Act of 1958. MRCC SBIC commenced operations on September 16, 2013. As of March 31, 2017,
MRCC SBIC had $50.0 million in leverageable capital and $60.0 million in SBA-guaranteed debentures outstanding. See “SBA
Debentures” below for more information.



Investment income



We generate interest income on the debt
investments in portfolio company investments that we originate or acquire. Our debt investments, whether in the form of senior,
junior or unitranche secured debt, typically have an initial term of three to seven years and bear interest at a fixed or floating
rate. In some instances we receive payments on our debt investment based on scheduled amortization of the outstanding balances.
In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date. In some cases, our investments
provide for deferred interest of payment-in-kind (“PIK”) interest. In addition, we may generate revenue in the form
of commitment, origination, amendment, structuring or due diligence fees, fees for providing managerial assistance and consulting
fees. Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize
such amounts as interest income. We record prepayment premiums and prepayment gains (losses) on loans as interest income. As the
frequency or volume of the repayments which trigger these prepayment premiums and prepayment gains (losses) may fluctuate significantly
from period to period, the associated interest income recorded may also fluctuate significantly from period to period. Interest
and fee income is recorded on the accrual basis to the extent we expect to collect such amounts. In addition, we also generate
dividend income on preferred equity securities, common equity securities and LLC interests in accordance with our revenue recognition
policies.



Expenses



Our primary operating expenses include the
payment of fees to MC Advisors under the Investment Advisory and Management Agreement (management and incentive fees), and the
payment of fees to Monroe Capital Management Advisors, LLC (“MC Management”) for our allocable portion of overhead
and other expenses under the Administration Agreement and other operating costs. See Note 6 to our consolidated financial statements
and “Related Party Transactions” below for additional information on our Investment Advisory and Management
Agreement and Administration agreement. Our expenses also include interest expense on our revolving credit facility, our SBA-guaranteed
debentures and our secured borrowings. We bear all other out-of-pocket costs and expenses of our operations and transactions.



Net gain (loss) on investments and secured borrowings



We recognize realized gains or losses on
investments based on the difference between the net proceeds from the disposition and the cost basis of the investment without
regard to unrealized gains or losses previously recognized. We record current period changes in fair value of investments and secured
borrowings within net change in unrealized appreciation (depreciation) on investments and net change in unrealized (appreciation)
depreciation on secured borrowings, respectively, in the consolidated statements of operations.



33







Portfolio and Investment Activity



During the three months ended March 31,
2017, we invested $27.3 million in two new portfolio companies and $14.2 million in 14 existing portfolio companies and had $33.8
million in aggregate amount of sales and principal repayments, resulting in net investments of $7.7 million for the period.



During the three months ended March 31,
2016, we invested $4.9 million in one new portfolio company and $21.4 million in 13 existing portfolio companies and had $26.8
million in aggregate amount of sales and principal repayments, resulting in net investments of $0.5 million for the period.



The following tables show the composition
of the investment portfolio (in thousands) and associated yield data:



|                     |  | March 31, 2017 |        
|-------------------- |  | -------------- | -------
|                     |  | Fair Value     |        
|Senior secured loans |  | $              | 300,223
|Unitranche loans     |  |                | 50,465 
|Junior secured loans |  |                | 42,260 
|Equity securities    |  |                | 25,201 
|Total                |  | $              | 418,149



|                     |  | December 31, 2016 |        
|-------------------- |  | ----------------- | -------
|                     |  | Fair Value        |        
|Senior secured loans |  | $                 | 275,253
|Unitranche loans     |  |                   | 51,638 
|Junior secured loans |  |                   | 59,366 
|Equity securities    |  |                   | 26,663 
|Total                |  | $                 | 412,920










| | (1) | The weighted average contractual coupon yield at period end is computed by dividing (a) the interest income on debt investments
and preferred equity investments (with a stated coupon rate) at the period end contractual coupon rate for each investment by (b)
the par value of our debt investment and the cost basis of our preferred equity investments.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | The weighted average annualized effective yield on portfolio investments at period end is computed by dividing (a) interest
income on debt investments and preferred equity investments (with a stated coupon rate) at the period end effective rate for each
investment by (b) the par value of our debt investments and the cost basis of our preferred equity investments. The weighted average
annualized effective yield on portfolio investments is a metric on the investment portfolio alone and does not represent a return
to stockholders. This metric is not inclusive of our fees and expenses, the impact of leverage on the portfolio or sales load that
may be paid by investors.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The portfolio weighted average contractual
coupon yield and weighted average effective yield increased slightly during the three months ended March 31, 2017 and the portfolio
mix continued to shift toward senior secured loans.



The following table shows the portfolio
composition by industry grouping at fair value (dollars in thousands):



|                                          |  | March 31, 2017                                                                                                  |         |  | December 31, 2016                                                                                                   | 
|----------------------------------------- |  | --------------------------------------------------------------------------------------------------------------- | ------- |  | ------------------------------------------------------------------------------------------------------------------- | 
|                                          |  | Investments 
atFair
                                                                                      Value |         |  | Percentage 
ofTotal
                                                                                      Portfolio | 
|Aerospace & Defense                       |  | $                                                                                                               | 10,784  |  |                                                                                                                     | 
|Automotive                                |  |                                                                                                                 | 5,086   |  |                                                                                                                     | 
|Banking, Finance, Insurance & Real Estate |  |                                                                                                                 | 54,797  |  |                                                                                                                     | 
|Beverage, Food & Tobacco                  |  |                                                                                                                 | 17,518  |  |                                                                                                                     | 
|Chemicals, Plastics & Rubber              |  |                                                                                                                 | —       |  |                                                                                                                     | 
|Construction & Building                   |  |                                                                                                                 | 18,646  |  |                                                                                                                     | 
|Consumer Goods: Durable                   |  |                                                                                                                 | 3,579   |  |                                                                                                                     | 
|Consumer Goods: Non-Durable               |  |                                                                                                                 | 20,159  |  |                                                                                                                     | 
|Containers, Packaging & Glass             |  |                                                                                                                 | 3,440   |  |                                                                                                                     | 
|Energy: Oil & Gas                         |  |                                                                                                                 | 7,642   |  |                                                                                                                     | 
|Environmental Industries                  |  |                                                                                                                 | 3,721   |  |                                                                                                                     | 
|Healthcare & Pharmaceuticals              |  |                                                                                                                 | 56,360  |  |                                                                                                                     | 
|High Tech Industries                      |  |                                                                                                                 | 14,848  |  |                                                                                                                     | 
|Hotels, Gaming & Leisure                  |  |                                                                                                                 | 38,570  |  |                                                                                                                     | 
|Media: Advertising, Printing & Publishing |  |                                                                                                                 | 12,086  |  |                                                                                                                     | 
|Media: Broadcasting & Subscription        |  |                                                                                                                 | 17,961  |  |                                                                                                                     | 
|Media: Diversified & Production           |  |                                                                                                                 | 4,937   |  |                                                                                                                     | 
|Metals & Mining                           |  |                                                                                                                 | 5,363   |  |                                                                                                                     | 
|Retail                                    |  |                                                                                                                 | 38,782  |  |                                                                                                                     | 
|Services: Business                        |  |                                                                                                                 | 38,719  |  |                                                                                                                     | 
|Services: Consumer                        |  |                                                                                                                 | 21,163  |  |                                                                                                                     | 
|Telecommunications                        |  |                                                                                                                 | 3,498   |  |                                                                                                                     | 
|Utilities: Electric                       |  |                                                                                                                 | 2,872   |  |                                                                                                                     | 
|Wholesale                                 |  |                                                                                                                 | 17,618  |  |                                                                                                                     | 
|Total                                     |  | $                                                                                                               | 418,149 |  |                                                                                                                     | 



34







Portfolio Asset Quality



MC Advisors’ portfolio management
staff closely monitors all credits, with senior portfolio managers covering agented and more complex investments. MC Advisors segregates
our capital markets investments by industry. The MC Advisors’ monitoring process and projections developed by Monroe Capital
both have daily, weekly, monthly and quarterly components and related reports, each to evaluate performance against historical,
budget and underwriting expectations. MC Advisors’ analysts will monitor performance using standard industry software tools
to provide consistent disclosure of performance. MC Advisors also monitors our investment exposure using a proprietary trend analysis
tool. When necessary, MC Advisors will update our internal risk ratings, borrowing base criteria and covenant compliance reports.



As part of the monitoring process, MC Advisors
regularly assesses the risk profile of each of our investments and rates each of them based on an internal proprietary system that
uses the categories listed below, which we refer to as MC Advisors’ investment performance rating. For any investment rated
in grades 3, 4 or 5, MC Advisors will increase its monitoring intensity and prepare regular updates for the investment committee,
summarizing current operating results and material impending events and suggesting recommended actions. MC Advisors monitors and,
when appropriate, changes the investment ratings assigned to each investment in our portfolio. In connection with our valuation
process, MC Advisors reviews these investment ratings on a quarterly basis, and our board of directors (the “Board”)
reviews and affirms such ratings. A definition of the rating system follows:



|InvestmentPerformance
Risk Rating |  | Summary Description                                                                                                                                                                                                                                                                                                                                                                                     
|--------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Grade 1                           |  | Includes investments exhibiting the least amount of risk in our portfolio. The issuer is performing above expectations or the issuer’s operating trends and risk factors are generally positive.                                                                                                                                                                                                        
|                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                         
|Grade 2                           |  | Includes investments exhibiting an acceptable level of risk that is similar to the risk at the time of origination. The issuer is generally performing as expected or the risk factors are neutral to positive.                                                                                                                                                                                         
|                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                         
|Grade 3                           |  | Includes investments performing below expectations and indicates that the investment’s risk has increased somewhat since origination. The issuer may be out of compliance with debt covenants; however, scheduled loan payments are generally not past due.                                                                                                                                             
|                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                         
|Grade 4                           |  | Includes an issuer performing materially below expectations and indicates that the issuer’s risk has increased materially since origination. In addition to the issuer being generally out of compliance with debt covenants, scheduled loan payments may be past due (but generally not more than six months past due). For grade 4 investments, we intend to increase monitoring of the issuer.       
|                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                         
|Grade 5                           |  | Indicates that the issuer is performing substantially below expectations and the investment risk has substantially increased since origination. Most or all of the debt covenants are out of compliance or payments are substantially delinquent. Investments graded 5 are not anticipated to be repaid in full and we will reduce the fair market value of the loan to the amount we expect to recover.



Our investment performance risk ratings
do not constitute any rating of investments by a nationally recognized statistical rating organization or reflect or represent
any third-party assessment of any of our investments.



In the event of a delinquency or a decision
to rate an investment grade 4 or grade 5, the applicable analyst, in consultation with a member of the investment committee, will
develop an action plan. Such a plan may require a meeting with the borrower’s management or the lender group to discuss reasons
for the default and the steps management is undertaking to address the under-performance, as well as required amendments and waivers
that may be required. In the event of a dramatic deterioration of a credit, MC Advisors intends to form a team or engage outside
advisors to analyze, evaluate and take further steps to preserve its value in the credit. In this regard, we would expect to explore
all options, including in a private equity sponsored investment, assuming certain responsibilities for the private equity sponsor
or a formal sale of the business with oversight of the sale process by us. Several of Monroe Capital’s professionals are
experienced in running work-out transactions and bankruptcies.



35







The following table shows the distribution
of our investments on the 1 to 5 investment performance rating scale as of March 31, 2017 (dollars in thousands):



|Investment Performance Rating |  | Investments at Fair Value |         |  | Percentage of Total Investments | 
|----------------------------- |  | ------------------------- | ------- |  | ------------------------------- | 
|1                             |  | $                         | —       |  |                                 | 
|2                             |  |                           | 350,450 |  |                                 | 
|3                             |  |                           | 52,548  |  |                                 | 
|4                             |  |                           | 15,151  |  |                                 | 
|5                             |  |                           | —       |  |                                 | 
|Total                         |  | $                         | 418,149 |  |                                 | 



The following table shows the distribution
of our investments on the 1 to 5 investment performance rating scale as of December 31, 2016 (dollars in thousands):



|Investment Performance Rating |  | Investments at Fair Value |         |  | Percentage of Total Investments | 
|----------------------------- |  | ------------------------- | ------- |  | ------------------------------- | 
|1                             |  | $                         | —       |  |                                 | 
|2                             |  |                           | 360,338 |  |                                 | 
|3                             |  |                           | 40,192  |  |                                 | 
|4                             |  |                           | 12,390  |  |                                 | 
|5                             |  |                           | —       |  |                                 | 
|Total                         |  | $                         | 412,920 |  |                                 | 



Results of Operations



Operating results were as follows (dollars
in thousands):



|                                                                           |  | Three months ended March 31, |       
|-------------------------------------------------------------------------- |  | ---------------------------- | ------
|                                                                           |  | 2017                         |       
|Total investment income                                                    |  | $                            | 12,006
|Total expenses                                                             |  |                              | 5,972 
|Net investment income                                                      |  |                              | 6,034 
|Net realized gain (loss) on investments                                    |  |                              | 167   
|Net change in unrealized appreciation (depreciation) on investments        |  |                              | (3,631
|Net change in unrealized (appreciation) depreciation on secured borrowings |  |                              | (1    
|Net increase (decrease) in net assets resulting from operations            |  | $                            | 2,569 



Investment Income



The composition of our investment income
was as follows (dollars in thousands):



|                                                   |  | Three months ended March 31, |       
|-------------------------------------------------- |  | ---------------------------- | ------
|                                                   |  | 2017                         |       
|Interest income                                    |  | $                            | 10,388
|Dividend income                                    |  |                              | 250   
|Fee income                                         |  |                              | 328   
|Prepayment gain (loss)                             |  |                              | 652   
|Accretion of discounts and amortization of premium |  |                              | 388   
|Total investment income                            |  | $                            | 12,006



The increase in investment income
of $0.5 million during the three months ended March 31, 2017, as compared to the three months ended March 31, 2016, is primarily
due to increases in average outstanding loan balances and an increase in prepayment activity, partially offset by decreases in
dividend income. The decrease in dividend income during the three months ended March 31, 2017, as compared to the prior year period,
is driven by a $1.6 million decrease in dividend income from our investment in Rockdale Blackhawk, LLC (“Rockdale”).
While we believe it is more likely than not that we will receive future equity distributions from this investment in Rockdale,
the timing and amount of these distributions are not within our control and are difficult to predict and may fluctuate significantly
from period to period.



36







Operating Expenses



The composition of our operating expenses
was as follows (dollars in thousands):



|                                           |  | Three months ended March 31, |      
|------------------------------------------ |  | ---------------------------- | -----
|                                           |  | 2017                         |      
|Interest and other debt financing expenses |  | $                            | 2,010
|Base management fees                       |  |                              | 1,805
|Incentive fees                             |  |                              | 1,290
|Professional fees                          |  |                              | 291  
|Administrative service fees                |  |                              | 330  
|General and administrative expenses        |  |                              | 209  
|Excise taxes                               |  |                              | —    
|Directors fees                             |  |                              | 37   
|Total operating expenses                   |  | $                            | 5,972



The composition of our interest and other
debt financing expenses was as follows (dollars in thousands):



|                                                 |  | Three months ended March 31, |      
|------------------------------------------------ |  | ---------------------------- | -----
|                                                 |  | 2017                         |      
|Interest expense – revolving credit facility     |  | $                            | 1,345
|Interest expense – SBA debentures                |  |                              | 406  
|Amortization of deferred financing costs         |  |                              | 231  
|Interest expense – secured borrowings            |  |                              | 21   
|Other                                            |  |                              | 7    
|Total interest and other debt financing expenses |  | $                            | 2,010



The increase in expenses of $0.2 million
during the three months ended March 31, 2017, as compared to the three months ended March 31, 2016 is primarily due to an increase
in base management fees due to the growth in invested assets and an increase in interest expense as a result of additional borrowings
(including SBA-guaranteed debentures) required to support the growth of the portfolio. These increases were partially offset by
a decline in part two incentive fees (based on net realized and unrealized gains and losses) during the three months ended March
31, 2017.



Net Realized Gain (Loss) on Investments



During the three months ended March 31,
2017 and 2016, we had sales of investments of $2.1 million and $0.6 million resulting in $0.2 million and $0.6 million of net realized
gains (losses), respectively.



Net Change in Unrealized Appreciation (Depreciation) on
Investments and Secured Borrowings



For the three months ended March 31, 2017
and 2016, our investments had ($3.6) million and $1.5 million of net change in unrealized appreciation (depreciation), respectively.
For the three months ended March 31, 2017 and 2016, our secured borrowings had ($1) thousand and $28 thousand of net change in
unrealized (appreciation) depreciation, respectively.



Net Increase (Decrease) in Net Assets Resulting from Operations



For the three months ended March 31, 2017
and 2016, the net increase in net assets from operations was $2.6 million and $7.9 million, respectively. Based on the weighted
average shares of common stock outstanding for the three months ended March 31, 2017 and 2016, our per share net increase in net
assets resulting from operations was $0.15 and $0.61, respectively. The $5.3 million decrease during the three months ended March
31, 2017, as compared to three months ended March 31, 2016, is primarily the result of net unrealized mark-to-market losses on
investments in the portfolio during the three months ended March 31, 2017 as compared to net unrealized mark-to-market gains on
investments in the portfolio during the three months ended March 31, 2016. This decline was partially offset by an increase in
net investment income.



Liquidity and Capital Resources



As of March 31, 2017, we had $5.5 million
in cash, $10.6 million in cash at MRCC SBIC, $136.0 million of total debt outstanding on our revolving credit facility and $60.0
million in outstanding SBA-guaranteed debentures. We had $64.0 million available for additional borrowings on our revolving credit
facility and $55.0 million in available SBA-guaranteed debentures. See “Borrowings” below for additional information.



37







Cash Flows



For the three months ended March 31, 2017
and 2016, we experienced a net increase in cash and restricted cash of $7.7 million and $6.6 million, respectively. For the three
months ended March 31, 2017, operating activities used $3.4 million, primarily as a result of purchases of portfolio investments,
partially offset by sales of and principal repayments on portfolio investments. For the three months ended March 31, 2016, operating
activities provided $0.4 million, primarily as a result of net income from operations, partially offset by net cash outflows for
the settlement of open trades. During the three months ended March 31, 2017, we generated $11.1 million from financing activities
primarily as a result of net borrowings on our revolving credit facility and SBA debentures, partially offset by distributions
to stockholders. During the three months ended March 31, 2016, we generated $6.2 from financing activities primarily net borrowings
on our revolving credit facility, partially offset by distributions to stockholders.



Capital Resources



As a BDC, we distribute substantially all
of our net income to our stockholders and have an ongoing need to raise additional capital for investment purposes. We intend to
generate additional cash primarily from future offerings of securities, future borrowings and cash flows from operations, including
income earned from investments in our portfolio companies. On both a short-term and long-term basis, our primary use of funds will
be to invest in portfolio companies and make cash distributions to our stockholders.



As a BDC, we are generally not permitted
to issue and sell our common stock at a price below net asset value per share. We may, however, sell our common stock, or warrants,
options or rights to acquire our common stock, at a price below the then-current net asset value per share of our common stock
if our Board, including independent directors, determines that such sale is in the best interests of us and our stockholders, and
if our stockholders have approved such sales. On July 14, 2016, our stockholders voted to allow us to sell or otherwise issue common
stock at a price below net asset value per share for a period of one year, subject to certain limitations. As of March 31, 2017
and December 31, 2016, we had 16,711,686 and 16,581,869 shares outstanding, respectively.



On June 24, 2015, our stockholders approved
a proposal to authorize us to issue warrants, options or rights to subscribe to, convert to, or purchase our common stock in one
or more offerings. This is a standing authorization and does not require annual re-approval by our stockholders.



Stock Issuances: On July 1,
2016, we amended the ATM securities offering program with MLV & Co, LLC (“MLV”) and JMP Securities LLC to
replace MLV with FBR Capital Markets & Co., an affiliate of MLV. During the three months ended March 31, 2017, we sold
113,600 shares at an average price of $15.70 per share for gross proceeds of $1,784 under the ATM program. Aggregate
underwriters’ discounts and commissions were $27 and offering costs were $21, resulting in net proceeds of
approximately $1,736. There were no stock issuances during the three months ended March 31, 2016.



Borrowings



Revolving Credit Facility: As of
March 31, 2017 and December 31, 2016, we had $136.0 million and $129.0 million outstanding, respectively, under our revolving credit
facility with ING Capital LLC, as agent, to finance the purchase of our assets. As of March 31, 2017, the maximum amount we were
able to borrow was $200.0 million and this borrowing can be increased to $300.0 million pursuant to an accordion feature (subject
to maintaining 200% asset coverage, as defined by the 1940 Act). On February 22, 2017, we closed a $40.0 million upsize to the
revolving credit facility, bringing the maximum amount we are able to borrow from $160.0 million to the now current maximum amount
of $200.0 million in accordance with the facility’s accordion feature. The maturity date on the facility is December 14,
2020.



The revolving credit facility is secured
by a lien on all of our assets, including cash on hand, but excluding the assets of our wholly-owned subsidiary, MRCC SBIC. Our
ability to borrow under the revolving credit facility is subject to availability under a defined borrowing base, which varies based
on our portfolio characteristics and certain eligibility criteria and concentration limits, as well as required valuation methodologies.
We may make draws under the revolving credit facility to make or purchase additional investments through December 2019 and for
general working capital purposes until the maturity date of the revolving credit facility. Borrowings under the revolving credit
facility bear interest, at our election, at an annual rate of LIBOR (one-month, two-month, three-month or six-month at our discretion
based on the term of the borrowing) plus 3.00%, with a further step-down to LIBOR plus 2.75% when net worth (excluding investments
in MRCC SBIC) exceeds $225.0 million or at a daily rate equal to 2.00% per annum plus the greater of the prime interest rate, the
federal funds rate plus 0.5% or LIBOR plus 1.0%. In addition to the stated interest rate on borrowings under the revolving credit
facility, we are required to pay a fee of 0.5% per annum on any unused portion of the revolving credit facility if the unused portion
of the facility is less than 65% of the then available maximum borrowing or a fee of 1.0% per annum on any unused portion of the
revolving credit facility if the unused portion of the facility is greater than or equal to 65% of the then available maximum borrowing.
As of March 31, 2017 and December 31, 2016, the outstanding borrowings were accruing at a weighted average interest rate of 3.9%
and 3.8%, respectively. The weighted average interest rate of our revolving credit facility borrowings (excluding debt issuance
costs) for the three months ended March 31, 2017 and 2016 was 4.1% and 3.5%, respectively. The weighted average fee rate on the
unused portion of the revolving credit facility for the three months ended March 31, 2017 and 2016 was 0.5% and 0.5%, respectively.



38







Our ability to borrow under the revolving
credit facility is subject to availability under the borrowing base, which permits us to borrow up to 70% of the fair market value
of our portfolio company investments depending on the type of the investment we hold and whether the investment is quoted. Our
ability to borrow is also subject to certain concentration limits, and our continued compliance with the representations, warranties
and covenants given by us under the facility. The revolving credit facility contains certain financial and restrictive covenants,
including, but not limited to, our maintenance of: (1) a minimum consolidated total net assets at least equal to the greater of
(a) 40% of the consolidated total assets on the last day of each quarter or (b) $120.0 million plus 65% of the net proceeds to
us from sales of our securities after December 14, 2015; (2) a ratio of total assets (less total liabilities other than indebtedness)
to total indebtedness of not less than 2.1 times; and (3) a ratio of earnings before interest and taxes to interest expense of
at least 2.5 times. The credit facility also requires us to undertake customary indemnification obligations with respect to ING
Capital LLC and other members of the lending group and to reimburse the lenders for expenses associated with entering into the
credit facility. The revolving credit facility also has customary provisions regarding events of default, including events of default
for nonpayment, change in control transactions at both Monroe Capital Corporation and MC Advisors, failure to comply with financial
and negative covenants, and failure to maintain our relationship with MC Advisors. If we incur an event of default under the revolving
credit facility and fail to remedy such default under any applicable grace period, if any, then the entire revolving credit facility
could become immediately due and payable, which would materially and adversely affect our liquidity, financial condition, results
of operations and cash flows.



Our revolving credit facility also imposes
certain conditions that may limit the amount of our distributions to stockholders. Distributions payable in our common stock under
the DRIP are not limited by the revolving credit facility. Distributions in cash or property other than common stock are generally
limited to 115% of the amount of distributions required to maintain our status as a RIC.



SBA Debentures: On February 28, 2014,
our wholly-owned subsidiary, MRCC SBIC, received a license from the SBA to operate as a SBIC under Section 301(c) of the Small
Business Investment Act of 1958, as amended. MRCC SBIC commenced operations on September 16, 2013.



The SBIC license allows MRCC SBIC to obtain
leverage by issuing SBA-guaranteed debentures, subject to the issuance of a leverage commitment by the SBA and other customary
procedures. SBA-guaranteed debentures are non-recourse, interest only debentures with interest payable semi-annually and have a
ten year maturity. The principal amount of SBA-guaranteed debentures is not required to be paid prior to maturity but may be prepaid
at any time without penalty. The interest rate of SBA-guaranteed debentures is fixed on a semi-annual basis (pooling date) at a
market-driven spread over U.S. Treasury Notes with 10-year maturities. The SBA, as a creditor, has a superior claim to MRCC SBIC’s
assets over our stockholders in the event we liquidate MRCC SBIC or the SBA exercises its remedies upon an event of default.



SBA regulations currently limit the amount
that an individual SBIC may borrow to a maximum of $150.0 million when it has at least $75.0 million in regulatory capital, receives
a leverage commitment from the SBA and has been through an audit examination by the SBA subsequent to licensing. The SBA also historically
limited a related group of SBICs (commonly referred to as a “family of funds”) to a maximum of $225.0 million in total
borrowings. On December 18, 2015, this family of funds limitation was raised to $350.0 million in total borrowings. As we have
other affiliated SBICs already in operation, MRCC SBIC was historically limited to a maximum of $40.0 million in borrowings. Pursuant
to the increase in the family of funds limitation, we submitted a commitment application to the SBA and on April 13, 2016 we were
approved for $75.0 million in additional SBA-guaranteed debentures for MRCC SBIC for a total of $115.0 million in available debentures.



As of March 31, 2017, MRCC SBIC had $50.0
million in leverageable capital and $60.0 million in SBA-guaranteed debentures outstanding. As of December 31, 2016, MRCC SBIC
had $41.0 million in leverageable capital and $51.5 million in SBA-guaranteed debentures outstanding. In order to gain access to
the entirety of the $55.0 million in remaining available debentures, we would be required to contribute to MRCC SBIC an additional
$7.6 million in leverageable capital. We made the additional contribution of $7.6 million in leverageable capital to MRCC SBIC
subsequent to March 31, 2017.



As of March 31, 2017, MRCC SBIC had the
following SBA-guaranteed debentures outstanding (dollars in thousands):



|Maturity Date  |  | Interest Rate |     |   | Amount |  
|-------------- |  | ------------- | --- | - | ------ | -
|September 2024 |  |               | 3.4 | % |        | $
|March 2025     |  |               | 3.3 | % |        |  
|March 2025     |  |               | 2.9 | % |        |  
|September 2025 |  |               | 3.6 | % |        |  
|March 2027     |  |               | 3.5 | % |        |  
|Total          |  |               |     |   |        | $



As of December 31, 2016, MRCC SBIC had the
following SBA-guaranteed debentures outstanding (dollars in thousands):



|Maturity Date  |  | Interest Rate |     |      | Amount |  
|-------------- |  | ------------- | --- | ---- | ------ | -
|September 2024 |  |               | 3.4 | %    |        | $
|March 2025     |  |               | 3.3 | %    |        |  
|March 2025     |  |               | 2.9 | %    |        |  
|September 2025 |  |               | 3.6 | %    |        |  
|March 2027     |  |               | 2.1 | %(1) |        |  
|March 2027     |  |               | 2.0 | %(1) |        |  
|Total          |  |               |     |      |        | $












| | (1) | Represents an interim rate
of interest as the SBA-guaranteed debentures had not yet pooled.
| | --- | -------------------------------------------------------------------------------------------



39







On October 2, 2014, the Company was granted
exemptive relief from the SEC for permission to exclude the debt of MRCC SBIC guaranteed by the SBA from the 200% asset coverage
test under the 1940 Act. The receipt of this exemption for this SBA-guaranteed debt increases flexibility under the 200% asset
coverage test.



Secured Borrowings: Certain partial
loan sales do not qualify for sale accounting under ASC Topic 860 — Transfers and Servicing (“ASC Topic 860”)
because these sales do not meet the definition of a “participating interest,” as defined in the guidance, in order
for sale treatment to be allowed. Participations or other partial loan sales which do not meet the definition of a participating
interest remain as an investment on the accompanying consolidated statements of assets and liabilities and the portion sold is
recorded as a secured borrowing in the liabilities section of the consolidated statements of assets and liabilities. For these
partial loan sales, the interest earned on the entire loan balance is recorded within “interest income” and the interest
earned by the buyer in the partial loan sale is recorded within “interest and other debt financing expenses” in the
accompanying consolidated statements of operations.



As of March 31, 2017, secured borrowings
at fair value totaled $1.3 million and the fair value of the loans that are associated with these secured borrowings was $5.9 million.
As of December 31, 2016, secured borrowings at fair value totaled $1.3 million and the fair value of the loans that are associated
with these secured borrowings was $5.8 million. These secured borrowings were created as a result of our completion of partial
loan sales of certain unitranche loan assets during the year ended December 31, 2013, that did not meet the definition of a “participating
interest.” As a result, sale treatment was not allowed and these partial loan sales were treated as secured borrowings. No
such partial loan sales occurred during the year ended December 31, 2016 and the three months ended March 31, 2017. During the
three months ended March 31, 2017 and 2016, repayments on secured borrowings totaled zero and $0.2 million, respectively. The weighted
average interest rate on our secured borrowings was approximately 6.5% and 6.3% as of March 31, 2017 and December 31, 2016, respectively.



Distribution Policy



Our Board will determine the timing and
amount, if any, of our distributions. We intend to pay distributions on a quarterly basis. In order to avoid corporate-level tax
on the income we distribute as a RIC, we must distribute to our stockholders at least 90% of our ordinary income and realized net
short-term capital gains in excess of realized net long-term capital losses, if any, on an annual basis out of the assets legally
available for such distributions. In addition, we also intend to distribute any realized net capital gains (i.e., realized net
long-term capital gains in excess of realized net short-term capital losses) at least annually out of the assets legally available
for such distributions. Distributions to stockholders for the three months ended March 31, 2017 and 2016, totaled $5.8 million
($0.35 per share) and $4.6 million ($0.35 per share), respectively. The tax character of such distributions is determined at the
end of the fiscal year. However, if the character of such distributions were determined as of March 31, 2017 and 2016, no portion
of these distributions would have been characterized as a tax return of capital to stockholders.



We have adopted an “opt out”
dividend reinvestment plan (“DRIP”) for our common stockholders. As a result, if we declare a distribution, our stockholders’
cash distributions will be automatically reinvested in additional shares of our common stock unless a stockholder specifically
“opts out” of our DRIP. If a stockholder opts out, that stockholder will receive cash distributions. Although distributions
paid in the form of additional shares of our common stock will generally be subject to U.S. federal, state and local taxes in the
same manner as cash distributions, stockholders participating in our DRIP will not receive any corresponding cash distributions
with which to pay any such applicable taxes.



Related Party Transactions



We have a number of business relationships
with affiliated or related parties, including the following:



| | · | We have an Investment
Advisory and Management Agreement with MC Advisors, an investment advisor registered with the SEC, to manage our day-to-day operating
and investing activities. We pay MC Advisors a fee for its services under the Investment Advisory and Management Agreement consisting
of two components — a base management fee and an incentive fee. See Note 6 to our consolidated financial statements
and “Significant Accounting Estimates and Critical Accounting Policies — Capital Gains Incentive Fee”
for additional information.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | We have an Administration
Agreement with MC Management to provide us with the office facilities and administrative services necessary to conduct our day-to-day
operations. See Note 6 to our consolidated financial statements for additional information.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Theodore L. Koenig,
our Chief Executive Officer and Chairman of our Board is also a manager of MC Advisors and the President and Chief Executive Officer
of MC Management. Aaron D. Peck, our Chief Financial Officer and Chief Investment Officer, serves as a director on our Board and
is also a managing director of MC Management.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | We have a license agreement
with Monroe Capital LLC, under which Monroe Capital LLC has agreed to grant us a non-exclusive, royalty-free license to use the
name “Monroe Capital” for specified purposes in our business.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



40







In addition, we have adopted a formal code
of ethics that governs the conduct of MC Advisors’ officers, directors and employees. Our officers and directors also remain
subject to the duties imposed by both the 1940 Act and Maryland General Corporation Law.



Commitments and Contingencies and Off-Balance Sheet Arrangements



Commitments and Contingencies



As of March 31, 2017 and December 31, 2016,
we had $35.0 million and $37.7 million in outstanding commitments to fund investments under undrawn revolvers, capital expenditure
loans and delayed draw commitments. Additionally, we have entered into certain contracts with other parties that contain a variety
of indemnifications. Our maximum exposure under these arrangements is unknown. However, we have not experienced claims or losses
pursuant to these contracts and believe the risk of loss related to such indemnifications to be remote.



Off-Balance Sheet Arrangements



We have no off-balance sheet arrangements
that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.



Market Trends



We have identified the following trends
that may affect our business:



Target Market: We believe that small
and middle-market companies in the United States with annual revenues between $10.0 million and $2.5 billion represent a significant
growth segment of the U.S. economy and often require substantial capital investments to grow. Middle-market companies have generated
a significant number of investment opportunities for investment funds managed or advised by Monroe Capital, and we believe that
this market segment will continue to produce significant investment opportunities for us.



Specialized Lending Requirements:
We believe that several factors render many U.S. financial institutions ill-suited to lend to U.S. middle-market companies. For
example, based on the experience of our management team, lending to U.S. middle-market companies (1) is generally more labor intensive
than lending to larger companies due to the smaller size of each investment and the fragmented nature of information for such companies,
(2) requires due diligence and underwriting practices consistent with the demands and economic limitations of the middle-market
and (3) may also require more extensive ongoing monitoring by the lender.



Demand for Debt Capital: We believe
there is a large pool of uninvested private equity capital for middle-market companies. We expect private equity firms will seek
to leverage their investments by combining equity capital with senior secured loans and mezzanine debt from other sources, such
as us.



Competition from Other Lenders: We
believe that many traditional bank lenders, in recent years, de-emphasized their service and product offerings to middle-market
businesses in favor of lending to large corporate clients and managing capital market transactions. In addition, many commercial
banks face significant balance sheet constraints as they seek to build capital and meet future regulatory capital requirements.
These factors may result in opportunities for alternative funding sources to middle-market companies and therefore drive increased
new investment opportunities for us. Conversely, there is increased competitive pressure in the BDC and investment company marketplace
for senior and subordinated debt which could result in lower yields for increasingly riskier assets.



Pricing and Deal Structures: We believe
that the volatility in global markets over the last several years and current macroeconomic issues such as a weakened U.S. economy
has reduced access to, and availability of, debt capital to middle-market companies, causing a reduction in competition and generally
more favorable capital structures and deal terms. Recent capital raises in the BDC and investment company marketplace have created
increased competition; however, we believe that current market conditions may continue to create favorable opportunities to invest
at attractive risk-adjusted returns.



Significant Accounting Estimates and Critical Accounting
Policies



Revenue Recognition



We record interest and fee income on an
accrual basis to the extent that we expect to collect such amounts. For loans and debt securities with contractual PIK interest,
we do not accrue PIK interest if the portfolio company valuation indicates that such PIK interest is not collectible. We do not
accrue as a receivable interest on loans and debt securities if we have reason to doubt our ability to collect such interest. Loan
origination fees, original issue discount and market discount or premium is capitalized, and we then amortize such amounts using
the effective interest method as interest income over the life of the investment. Upon the prepayment of a loan or debt security,
any unamortized premium or discount or loan origination fees are recorded as interest income. We record prepayment premiums on
loans and debt securities as interest income when we receive such amounts.



Dividend income on preferred equity securities
is recorded as dividend income on an accrual basis to the extent that such amounts are payable by the portfolio company and are
expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies.
Each distribution received from limited liability company (“LLC”) and limited partnership (“LP”) investments
is evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, we will
not record distributions from equity investments in LLCs and LPs as dividend income unless there are sufficient accumulated tax-basis
earnings and profits in the LLC or LP prior to the distribution. Distributions that are classified as a return of capital are recorded
as a reduction in the cost basis of the investment.



41







Valuation of Portfolio Investments



As a BDC, we generally invest in illiquid
securities including debt and, to a lesser extent, equity securities of middle-market companies. Under procedures established by
our Board, we value investments for which market quotations are readily available and within a recent date at such market quotations.
We obtain these market values from an independent pricing service or at the mean between the bid and ask prices obtained from at
least two brokers or dealers (if available, otherwise by a principal market maker or a primary market dealer). When doing so, we
determine whether the quote obtained is sufficient in accordance with generally accepted accounting principles in the United States
(“GAAP”) to determine the fair value of the security. Debt and equity securities that are not publicly traded or whose
market prices are not readily available or whose market prices are not regularly updated are valued at fair value as determined
in good faith by our Board. Such determination of fair values may involve subjective judgments and estimates. Investments purchased
within 60 days of maturity are valued at cost plus accreted discount, or minus amortized premium, which approximates fair value.



Our Board is ultimately and solely responsible
for determining the fair value of the portfolio investments that are not publicly traded, whose market prices are not readily available
on a quarterly basis in good faith or any other situation where portfolio investments require a fair value determination. Because
we expect that there will not be a readily available market for many of the investments in our portfolio, we expect to value many
of our portfolio investments at fair value as determined in good faith by our Board using a documented valuation policy and a consistently
applied valuation process. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily
available market value, the fair value of our investments may differ significantly from the values that would have been used had
a readily available market value existed for such investments, and the differences could be material.



With respect to investments
for which market quotations are not readily available, our Board undertakes a multi-step valuation process each quarter, as described
below:



| | · | the quarterly valuation process
begins with each portfolio company or investment being initially evaluated and rated by the investment professionals responsible
for the credit monitoring of the portfolio investment;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | preliminary valuation conclusions
are then documented and discussed with the investment committee;
| | - | --------------------------------------------------------------------------------------------------



| | · | our Board engages one or
more independent valuation firm(s) to conduct fair value appraisals of material investments for which market quotations are not
readily available. These fair value appraisals for material investments are received at least once in every calendar year for
each portfolio company investment, but are generally received quarterly;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | our audit committee of the
Board reviews the preliminary valuations of MC Advisors and of the independent valuation firm(s) and responds and supplements
the valuation recommendations to reflect any comments; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | our Board discusses these
valuations and determines the fair value of each investment in the portfolio in good faith, based on the input of MC Advisors,
the independent valuation firm(s) and the audit committee.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Board, together with our independent
valuation firms, generally uses the yield approach to determine fair value for loans where market quotations are not readily available,
as long as it is appropriate. If there is deterioration in credit quality or a debt investment is in workout status, we may consider
other factors in determining the fair value, including the value attributable to the debt investment from the enterprise value
of the portfolio company under the market approach or the proceeds that would be received in a liquidation analysis. We generally
consider our debt to be performing if the borrower is not in default, the borrower is remitting payments in a timely manner; the
loan is in covenant compliance or is otherwise not deemed to be impaired. In determining the fair value of the performing debt,
the Company considers fluctuations in current interest rates, the trends in yields of debt instruments with similar credit ratings,
financial condition of the borrower, economic conditions and other relevant factors, both qualitative and quantitative. In the
event that a debt instrument is not performing, as defined above, we will evaluate the value of the collateral utilizing the same
framework described above for a performing loan to determine the value of the loan.



Under the yield approach, we utilize discounted
cash flow models to determine the present value of the future cash flow streams of our debt investments, based on future interest
and principal payments as set forth in the associated loan agreements. In determining fair value under the yield approach, we also
consider the following factors: applicable market yields and leverage levels, credit quality, prepayment penalties, the nature
and realizable value of any collateral, the portfolio company’s ability to make payments, and changes in the interest rate
environment and the credit markets that generally may affect the price at which similar investments may be made.



Under the market approach, we typically
use the enterprise value methodology to determine the fair value of an investment. There is no one methodology to estimate enterprise
value and, in fact, for any one portfolio company, enterprise value is generally best expressed as a range of values, from which
we derive a single estimate of enterprise value. In estimating the enterprise value of a portfolio company, we analyzes various
factors consistent with industry practice, including but not limited to original transaction multiples, the portfolio company’s
historical and projected financial results, applicable market trading and transaction comparables, applicable market yields and
leverage levels, the nature and realizable value of any collateral, the markets in which the portfolio company does business, and
comparisons of financial ratios of peer companies that are public. Typically, the enterprise values of private companies are based
on multiples of earnings before interest, income taxes, depreciation and amortization (“EBITDA”), cash flows, net income,
revenues, or in limited cases, book value.



42







Net Realized Gains or Losses and Net Change in Unrealized
Appreciation or Depreciation



We measure realized gains or losses by the
difference between the net proceeds from the sale and the amortized cost basis of the investment, without regard to unrealized
appreciation or depreciation previously recognized. Net change in unrealized appreciation or depreciation reflects the change in
portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation
or depreciation, when gains or losses are realized. We report changes in the fair value of secured borrowings that are measured
at fair value as a component of the net change in unrealized (appreciation) depreciation on secured borrowings in the consolidated
statements of operations.



Capital Gains Incentive Fee



Pursuant to the terms of the Investment
Advisory and Management Agreement with MC Advisors, the incentive fee on capital gains earned on liquidated investments of our
portfolio is determined and payable in arrears as of the end of each calendar year (or upon termination of the investment advisory
and administrative services agreement). This fee equals 20.0% of our incentive fee capital gains (i.e., our realized capital gains
on a cumulative basis from inception, calculated as of the end of the applicable period, net of all realized capital losses and
unrealized capital depreciation on a cumulative basis), less the aggregate amount of any previously paid capital gains incentive
fees. On a quarterly basis, we accrue for the capital gains incentive fee by calculating such fee as if it were due and payable
as of the end of such period.



While the Investment Advisory and Management
Agreement with MC Advisors neither includes nor contemplates the inclusion of unrealized gains in the calculation of the capital
gains incentive fee, pursuant to an interpretation of an American Institute for Certified Public Accountants Technical Practice
Aid for investment companies, we include unrealized gains in the calculation of the capital gains incentive fee expense and related
accrued capital gains incentive fee. This accrual reflects the incentive fees that would be payable to MC Advisors if our entire
portfolio was liquidated at its fair value as of the balance sheet date even though MC Advisors is not entitled to an incentive
fee with respect to unrealized gains unless and until such gains are actually realized.



During the three months ended March 31,
2017, we had a reduction in accrued capital gains incentive fees of $0.2 million, primarily as a result of net declines in portfolio
valuations during the period. During the three months ended March 31, 2016, we accrued $0.2 million in capital gains incentive
fees.



New Accounting Pronouncements



In May 2014, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers
(ASC Topic 606) (“ASU 2014-09”). The core principle of ASU 2014-09 is that an entity should recognize revenue to depict
the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:
Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine
the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize
revenue when (or as) the entity satisfies a performance obligation.



ASU 2014-09 also specified the accounting
for some costs to obtain or fulfill a contract with a customer. In addition, ASU 2014-09 requires that an entity disclose sufficient
information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash
flows arising from contracts with customers. The initial effective date of ASU 2014-09 was for fiscal periods beginning after December
15, 2016. However, in August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (ASC Topic 606): Deferral
of the Effective Date, which deferred the effective date to fiscal periods beginning after December 15, 2017. Management is
currently evaluating the impact these changes will have on our consolidated financial statements and disclosures.



In January 2016, the FASB issued ASU 2016-01,
Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and
Financial Liabilities (“ASU 2016-01”). ASU 2016-01 retains many current requirements for the classification and
measurement of financial instruments; however, it significantly revises an entity’s accounting related to (1) the classification
and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities
measured at fair value. ASU 2016-01 also amends certain disclosure requirements associated with the fair value of financial instruments.
This guidance is effective for annual and interim periods beginning after December 15, 2017, and early adoption is not permitted
for public business entities. Management is currently evaluating the impact these changes will have on our consolidated financial
statements and disclosures.



In November 2016, the FASB issued ASU 2016-18,
Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). ASU 2016-18 requires that the statements
of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted
cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents
should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown
on the statements of cash flows. The new guidance is effective for annual and interim periods, beginning after December 15, 2017,
and early adoption is permitted and is to be applied on a retrospective basis. We have adopted ASU 2016-18 and the revised presentation
is reflected in our consolidated financial statements for the periods presented.



43







ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK



We are subject to financial market risks,
including changes in interest rates. The majority of the loans in our portfolio have floating interest rates, and we expect that
our loans in the future may also have floating interest rates. These loans are usually based on a floating LIBOR and typically
have interest rate re-set provisions that adjust applicable interest rates under such loans to current market rates on a monthly
or quarterly basis. The majority of the loans in our current portfolio have interest rate floors which have effectively converted
the loans to fixed rate loans in the current interest rate environment. In addition, our credit facility has a floating interest
rate provision and we expect that other credit facilities into which we enter in the future may have floating interest rate provisions.



Assuming that the consolidated statement
of financial condition as of March 31, 2017 were to remain constant and that we took no actions to alter our existing interest
rate sensitivity, the following table shows the annualized impact of hypothetical base rate changes in interest rates.



|                         |  | Increase (decrease) in |        |   | Increase (decrease) in |   |       | Net increase (decrease) in | 
|------------------------ |  | ---------------------- | ------ | - | ---------------------- | - | ----- | -------------------------- | 
|Change in Interest Rates |  | interest income        |        |   | interest expense       |   |       | net investment income      | 
|                         |  | (in thousands)         |       
|Down 25 basis points     |  | $                      | (462   | ) |                        | $ | (343  | )                          | 
|Up 100 basis points      |  |                        | 3,459  |   |                        |   | 1,373 |                            | 
|Up 200 basis points      |  |                        | 7,274  |   |                        |   | 2,746 |                            | 
|Up 300 basis points      |  |                        | 11,090 |   |                        |   | 4,120 |                            | 



Although we believe that this analysis is
indicative of our existing sensitivity to interest rate changes, it does not adjust for changes in the credit market, credit quality,
the size and composition of the assets in our portfolio and other business developments, including borrowing under the credit facility
or other borrowings that could affect net increase in net assets resulting from operations, or net income. Accordingly, we can
offer no assurances that actual results would not differ materially from the analysis above.



We may in the future hedge against interest
rate fluctuations by using standard hedging instruments such as futures, options and forward contracts to the extent permitted
under the 1940 Act and applicable commodities laws. While hedging activities may insulate us against adverse changes in interest
rates, they may also limit our ability to participate in the benefits of lower interest rates with respect to the investments in
our portfolio with fixed interest rates or interest rate floors.



ITEM 4. CONTROLS AND PROCEDURES



In accordance with Rules 13a-15(b) and 15d-15(b)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we, under the supervision and with the participation
of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls
and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based on that evaluation, our management,
including the Chief Executive Officer and Chief Financial Officer, concluded that, at the end of the period covered by our Quarterly
Report on Form 10-Q, our disclosure controls and procedures were effective and provided reasonable assurance that information required
to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in
the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Notwithstanding
the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance
that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth
in the Company’s periodic reports.



No change occurred in our internal control
over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) during the three months ended March
31, 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



44







PART II



OTHER INFORMATION



Item 1. Legal Proceedings



Neither we nor our investment adviser are
currently subject to any material legal proceedings.



Item 1A. Risk Factors



None.



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



None.



Item 3. Defaults Upon Senior Securities



None.



Item 4. Mine Safety Disclosures



None.



Item 5. Other Information



None.



45







Item 6. Exhibits



|Exhibit |  |                                                                                                                                                                              
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |  | Description of Document                                                                                                                                                      
|        |  |                                                                                                                                                                              
|31.1    |  | Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|        |  |                                                                                                                                                                              
|31.2    |  | Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|        |  |                                                                                                                                                                              
|32.1    |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                       



46







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.



|Date: May 9, 2017 | By | /s/ Theodore L. Koenig                                                                                                                                                      
|----------------- | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                  |    | Theodore L. Koenig
        Chairman, Chief Executive Officer and Director
        (Principal Executive Officer)                                                             
|                  |    | Monroe Capital Corporation                                                                                                                                                  
|                  |    |                                                                                                                                                                             
|Date: May 9, 2017 | By | /s/ Aaron D. Peck                                                                                                                                                           
|                  |    | Aaron D. Peck
        Chief Financial Officer, Chief Investment Officer and Director
        (Principal Financial and Accounting Officer)
        Monroe Capital Corporation



47