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|                                                                                        |  |
| Delaware                                                                               | 54-1889518 |
| (State or other jurisdictionof incorporation or organization)                          | (I.R.S. EmployerIdentification No.) |
| 1100 Wilson Boulevard, Suite 3000Arlington, VA(Address of principal executive offices) | 22209(Zip Code) |

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

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|                                                                                                          |  |
|                                                                                                     |   |
| PART I. FINANCIAL INFORMATION                                                                            | 1 |
|                                                                                                     |   |
| ITEM 1. FINANCIAL STATEMENTS                                                                        | 1 |
|                                                                                                     |   |
| CONSOLIDATED BALANCE SHEETS                                                                              | 1 |
| CONSOLIDATED STATEMENTS OF OPERATIONS                                                                    | 2 |
| CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS                                                         | 3 |
| CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                    | 4 |
| CONSOLIDATED SCHEDULE OF INVESTMENTS                                                                     | 5 |
| NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)                                     | 12 |
| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                                                  | 35 |
|                                                                                                     |   |
| ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 36 |
|                                                                                                     |   |
| ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                  | 64 |
|                                                                                                     |   |
| ITEM 4. CONTROLS AND PROCEDURES                                                                     | 65 |
|                                                                                                     |   |
| PART II. OTHER INFORMATION                                                                               | 66 |
|                                                                                                     |   |
| ITEM 1. LEGAL PROCEEDINGS                                                                           | 66 |
|                                                                                                     |   |
| ITEM 1A. RISK FACTORS                                                                               | 66 |
|                                                                                                     |   |
| ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                                 | 68 |
|                                                                                                     |   |
| ITEM 3. DEFAULTS UPON SENIOR SECURITIES                                                             | 69 |
|                                                                                                     |   |
| ITEM 4. MINE SAFETY DISCLOSURES                                                                     | 69 |
|                                                                                                     |   |
| ITEM 5. OTHER INFORMATION                                                                           | 70 |
|                                                                                                     |   |
| ITEM 6. EXHIBITS                                                                                    | 70 |
|                                                                                                     |   |
| SIGNATURES                                                                                               | 71 |

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|                                                                                                                                                                                                                  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                  |  |  |  |  |  |  |
| (in thousands, except per share amounts)                                                                                                                                                                         | June 30, 2012 | December 31, 2011 |
|                                                                                                                                                                                                             | (unaudited) |   |
| Assets                                                                                                                                                                                                           |   |   |
| Cash and cash equivalents                                                                                                                                                                                        | $ | 79,850 |  | $ | 58,563 |  |
| Cash, securitization accounts                                                                                                                                                                                    | 77,995 |  | 40,306 |  |
| Cash, restricted                                                                                                                                                                                                 | 130,946 |  | 34,964 |  |
| Investments at fair value                                                                                                                                                                                        |   |   |
| Non-affiliate investments (cost of $388,470 and $570,209, respectively)                                                                                                                                          | 368,862 |  | 570,133 |  |
| Affiliate investments (cost of $25,258 and $40,858, respectively)                                                                                                                                                | 23,602 |  | 51,770 |  |
| Control investments (cost of $262,624 and $406,151, respectively)                                                                                                                                           | 61,007 |  | 119,263 |  |
| Total investments (cost of $676,352 and $1,017,218, respectively)                                                                                                                                                | 453,471 |  | 741,166 |  |
| Interest receivable                                                                                                                                                                                              | 3,272 |  | 4,049 |  |
| Other assets                                                                                                                                                                                                     | 6,780 |  | 11,490 |  |
| Total assets                                                                                                                                                                                                     | $ | 752,314 |  | $ | 890,538 |  |
| Liabilities                                                                                                                                                                                                      |   |   |
| Borrowings (maturing within one year of $90,725 and $32,983, respectively)                                                                                                                                       | $ | 339,778 |  | $ | 430,219 |  |
| Interest payable                                                                                                                                                                                                 | 2,586 |  | 2,710 |  |
| Dividends payable                                                                                                                                                                                                | 10,469 |  | 13,092 |  |
| Other liabilities                                                                                                                                                                                                | 9,555 |  | 9,565 |  |
| Total liabilities                                                                                                                                                                                                | 362,388 |  | 455,586 |  |
| Stockholders’ equity                                                                                                                                                                                       |   |   |
| Preferred stock, par value $0.01, authorized 1 share, none issued and outstanding                                                                                                                                | — |  | — |  |
| Common stock, par value $0.01, authorized 200,000 shares on June 30, 2012 and December 31, 2011, 74,062 issued and outstanding on June 30, 2012 and 76,997 issued and outstanding on December 31, 2011 | 741 |  | 770 |  |
| Paid-in capital                                                                                                                                                                                                  | 993,950 |  | 1,009,748 |  |
| Distributions in excess of earnings                                                                                                                                                                              |   |   |
| Paid-in capital                                                                                                                                                                                                  | (195,310 | ) | (195,310 | ) |
| Other                                                                                                                                                                                                            | (186,253 | ) | (103,912 | ) |
| Net unrealized depreciation on investments                                                                                                                                                                       | (223,202 | ) | (276,344 | ) |
| Total stockholders’ equity                                                                                                                                                                                 | 389,926 |  | 434,952 |  |
| Total liabilities and stockholders’ equity                                                                                                                                                                 | $ | 752,314 |  | $ | 890,538 |  |
| Net asset value per common share at end of period                                                                                                                                                                | $ | 5.26 |  | $ | 5.65 |  |

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|----------------------------------------------------------------------------------------------------------|
|                                                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                     | Three months ended | Six months ended |
|                                                                                                     | June 30 | June 30 |
| (in thousands, except per share amounts)                                                                 | 2012 | 2011 | 2012 | 2011 |
| Revenue                                                                                                  |   |   |   |   |
| Interest and dividend income                                                                             |   |   |   |   |
| Non-affiliate investments (less than 5% owned)                                                           | $ | 13,016 |  | $ | 16,221 |  | $ | 27,373 |  | $ | 33,779 |  |
| Affiliate investments (5% to 25% owned)                                                                  | 1,108 |  | 1,775 |  | 2,292 |  | 2,918 |  |
| Control investments (more than 25% owned)                                                                | 1,698 |  | 2,192 |  | 3,453 |  | 6,927 |  |
| Total interest and dividend income                                                                       | 15,822 |  | 20,188 |  | 33,118 |  | 43,624 |  |
| Advisory fees and other income                                                                           |   |   |  |  |  |  |
| Non-affiliate investments (less than 5% owned)                                                           | 910 |  | 420 |  | 1,146 |  | 927 |  |
| Control investments (more than 25% owned)                                                                | 1,212 |  | 600 |  | 1,239 |  | 960 |  |
| Total advisory fees and other income                                                                     | 2,122 |  | 1,020 |  | 2,385 |  | 1,887 |  |
| Total revenue                                                                                            | 17,944 |  | 21,208 |  | 35,503 |  | 45,511 |  |
| Operating expense                                                                                        |   |   |  |  |  |  |
| Interest expense                                                                                         | 4,552 |  | 3,945 |  | 9,754 |  | 7,818 |  |
| Employee compensation                                                                                    |  |  |  |  |  |  |  |  |
| Salaries and benefits                                                                                    | 2,791 |  | 2,908 |  | 6,666 |  | 6,884 |  |
| Amortization of employee restricted stock awards                                                         | 711 |  | 406 |  | 1,189 |  | 1,030 |  |
| Total employee compensation                                                                              | 3,502 |  | 3,314 |  | 7,855 |  | 7,914 |  |
| General and administrative expense                                                                       | 4,274 |  | 2,646 |  | 8,210 |  | 5,473 |  |
| Restructuring expense                                                                                    | 21 |  | 65 |  | 47 |  | 65 |  |
| Total operating expense                                                                                  | 12,349 |  | 9,970 |  | 25,866 |  | 21,270 |  |
| Net operating income before net investment loss, loss on extinguishment of debt and income tax provision | 5,595 |  | 11,238 |  | 9,637 |  | 24,241 |  |
| Net realized (loss) gain on investments                                                                  |   |   |  |  |  |  |
| Non-affiliate investments (less than 5% owned)                                                           | (3,820 | ) | (19,652 | ) | 12,550 |  | (47,569 | ) |
| Affiliate investments (5% to 25% owned)                                                                  | 16,370 |  | 1 |  | 16,370 |  | (916 | ) |
| Control investments (more than 25% owned)                                                                | (96,902 | ) | 11,145 |  | (96,894 | ) | 12,352 |  |
| Total net realized loss on investments                                                                   | (84,352 | ) | (8,506 | ) | (67,974 | ) | (36,133 | ) |
| Net unrealized appreciation (depreciation) on investments                                                |   |   |  |  |  |  |
| Non-affiliate investments (less than 5% owned)                                                           | (1,363 | ) | 23,195 |  | (19,532 | ) | 54,728 |  |
| Affiliate investments (5% to 25% owned)                                                                  | (12,717 | ) | (358 | ) | (12,568 | ) | 1,089 |  |
| Control investments (more than 25% owned)                                                                | 86,117 |  | (36,561 | ) | 85,271 |  | (62,840 | ) |
| Derivative and other fair value adjustments                                                              | (24 | ) | 782 |  | (29 | ) | 764 |  |
| Total net unrealized appreciation (depreciation) on investments                                          | 72,013 |  | (12,942 | ) | 53,142 |  | (6,259 | ) |
| Net investment loss before income tax provision                                                          | (12,339 | ) | (21,448 | ) | (14,832 | ) | (42,392 | ) |
| Loss on extinguishment of debt before income tax provision                                               | — |  | — |  | (174 | ) | (863 | ) |
| Income tax provision                                                                                     | 293 |  | 8 |  | 311 |  | 19 |  |
| Net loss                                                                                                 | $ | (7,037 | ) | $ | (10,218 | ) | $ | (5,680 | ) | $ | (19,033 | ) |
| Loss per basic and diluted common share                                                                  | $ | (0.09 | ) | $ | (0.13 | ) | $ | (0.07 | ) | $ | (0.25 | ) |
| Cash distributions declared per common share                                                             | $ | 0.14 |  | $ | 0.17 |  | $ | 0.31 |  | $ | 0.32 |  |
| Weighted-average common shares outstanding—basic and diluted                                       | 75,142 |  | 76,343 |  | 75,793 |  | 76,056 |  |

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|                                                                                                          |
|----------------------------------------------------------------------------------------------------------|
|                                                                                                          |  |  |  |  |  |  |
|                                                                                                     | Six months ended |
|                                                                                                     | June 30 |
| (in thousands, except per share amounts)                                                                 | 2012 | 2011 |
| Decrease in net assets from operations                                                                   |   |   |
| Net operating income before net investment loss, loss on extinguishment of debt and income tax provision | $ | 9,637 |  | $ | 24,241 |  |
| Net realized (loss) gain on investments                                                                  | (67,974 | ) | (36,133 | ) |
| Net unrealized appreciation (depreciation) on investments                                                | 53,142 |  | (6,259 | ) |
| Loss on extinguishment of debt before income tax provision                                               | (174 | ) | (863 | ) |
| Income tax provision                                                                                     | (311 | ) | (19 | ) |
| Net loss                                                                                                 | (5,680 | ) | (19,033 | ) |
| Distributions to stockholders                                                                            |   |   |
| Distributions declared                                                                                   | (23,519 | ) | (24,683 | ) |
| Net decrease in net assets resulting from stockholder distributions                                      | (23,519 | ) | (24,683 | ) |
| Capital share transactions                                                                               |   |   |
| Repurchase of common stock                                                                               | (16,797 | ) | — |  |
| Amortization of restricted stock awards                                                                  |   |   |
| Employee                                                                                                 | 1,189 |  | 1,030 |  |
| Non-employee director                                                                                    | 32 |  | 28 |  |
| Common stock withheld to pay taxes applicable to the vesting of restricted stock                         | (251 | ) | (1,314 | ) |
| Net forfeitures of restricted common stock                                                               | — |  | (11 | ) |
| Net decrease in net assets resulting from capital share transactions                                     | (15,827 | ) | (267 | ) |
| Total decrease in net assets                                                                             | (45,026 | ) | (43,983 | ) |
| Net assets                                                                                               |   |   |
| Beginning of period                                                                                      | 434,952 |  | 578,016 |  |
| End of period                                                                                            | $ | 389,926 |  | $ | 534,033 |  |
| Net asset value per common share at end of period                                                        | $ | 5.26 |  | $ | 6.93 |  |
| Common shares outstanding at end of period                                                               | 74,062 |  | 77,046 |  |

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|                                                                                     |
|-------------------------------------------------------------------------------------|
|                                                                                     |  |  |  |  |  |  |
|                                                                                | Six months ended |
|                                                                                | June 30 |
| (in thousands)                                                                      | 2012 | 2011 |
| Cash flows from operating activities                                                |   |   |
| Net loss                                                                            | $ | (5,680 | ) | $ | (19,033 | ) |
| Adjustments to reconcile net loss to net cash provided by  operating activities     |   |   |
| Investments in portfolio companies                                                  | (14,312 | ) | (180,294 | ) |
| Principal collections related to investment repayments or sales                     | 276,314 |  | 277,299 |  |
| Decrease in interest receivable, accrued payment-in-kind interest and dividends     | 11,690 |  | 24,108 |  |
| Amortization of restricted stock awards                                             |   |   |
| Employee                                                                            | 1,189 |  | 1,030 |  |
| Non-employee director                                                               | 32 |  | 28 |  |
| Decrease (increase) in cash—securitization accounts from interest collections | 1,643 |  | (2,503 | ) |
| Increase in restricted cash—escrow accounts                                   | (274 | ) | (7,518 | ) |
| Depreciation and amortization                                                       | 5,023 |  | 1,765 |  |
| Decrease in other assets                                                            | 718 |  | 449 |  |
| Decrease in other liabilities                                                       | (186 | ) | (1,745 | ) |
| Realized loss on investments                                                        | 67,974 |  | 36,133 |  |
| Net change in unrealized (appreciation) depreciation on investments                 | (53,142 | ) | 6,259 |  |
| Loss on extinguishment of debt                                                      | 174 |  | 863 |  |
| Net cash provided by operating activities                                           | 291,163 |  | 136,841 |  |
| Cash flows from financing activities                                                |   |   |
| Repurchase of common stock                                                          | (16,797 | ) | — |  |
| Payments on borrowings                                                              | (112,015 | ) | (41,535 | ) |
| Proceeds from borrowings                                                            | 21,400 |  | 5,000 |  |
| Increase in cash in restricted and securitization accounts                          |   |  |  |
| Securitization accounts for repayment of principal on debt                          | (39,332 | ) | (48,834 | ) |
| Restricted cash                                                                     | (95,708 | ) | (5,253 | ) |
| Payment of financing costs                                                          | (1,031 | ) | (1,700 | ) |
| Distributions paid                                                                  | (26,142 | ) | (22,317 | ) |
| Common stock withheld to pay taxes applicable to the vesting of restricted stock    | (251 | ) | (1,314 | ) |
| Net forfeitures of restricted common stock                                          | — |  | (11 | ) |
| Net cash used in financing activities                                               | (269,876 | ) | (115,964 | ) |
| Net increase in cash and cash equivalents                                           | 21,287 |  | 20,877 |  |
| Cash and cash equivalents                                                           |   |   |
| Beginning balance                                                                   | 58,563 |  | 44,970 |  |
| Ending balance                                                                      | $ | 79,850 |  | $ | 65,847 |  |
| Supplemental disclosure of cash flow information                                    |   |   |
| Interest paid                                                                       | $ | 5,400 |  | $ | 6,290 |  |
| Income taxes (refunded) paid                                                        | 38 |  | 312 |  |
| Paid-in-kind interest collected                                                     | 7,887 |  | 18,044 |  |
| Dividend income collected                                                           | 7,845 |  | 12,053 |  |

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|                                                                                  |
|----------------------------------------------------------------------------------|
|                                                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                             |   |   | Interest Rate(9) |   |   | Fair Value |
| Portfolio Company                                                                | Industry | Investment | Current | PIK | Total | Principal | Cost |
| Control Investments(4):                                                          |   |   |   |   |   |   |   |
| Broadview Networks Holdings, Inc.                                                | Communications | Series A Preferred Stock (12.0%, 87,254 shares)(6) |   |   |   |   | $ | 81,984 |  | $ | 552 |  |
|                                                                             | Series A-1 Preferred Stock (12.0%, 100,702 shares)(6) |   |   |   |   | 77,496 |  | 637 |  |
|                                                                             | Series B Preferred Stock (12.0%, 1,282 shares)(6) |   |   |   |   | 100 |  | 8 |  |
|                                                                             |   | Class A Common Stock (4,731,031 shares)(6) |   |   |   |   | — |  | — |  |
| GMC Television Broadcasting, LLC(2)                                         | Broadcasting | Senior Debt (Due 12/16)(1) | 4.5 | % | — |  | 4.5 | % | $ | 17,574 |  | 15,138 |  | 15,334 |  |
|                                                                             | Subordinated Debt (Due 12/16)(7) | 2.5 | % | — |  | 2.5 | % | 11,160 |  | 6,976 |  | — |  |
|                                                                             |   | Class B Voting Units (8.0%, 86,700 units)(6) |   |   |   |   | 9,071 |  | — |  |
| Intran Media, LLC                                                                | Other Media | Series A Preferred Units (10.0%, 36,300 units)(6) |   |   |   |   | 9,095 |  | 400 |  |
| Jet Plastica Investors, LLC(2)(11)                                               | Plastic Products | Senior Debt A (Due 3/15)(1)(7) | 2.5 | % | 7.0 | % | 9.5 | % | 4,790 |  | 3,893 |  | — |  |
| NPS Holding Group, LLC(2)(5)                                                     | Business Services | Senior Debt Revolver (Due 6/13)(7) | 6.3 | % | 2.5 | % | 8.7 | % | 3,985 |  | 2,360 |  | 4,291 |  |
| Senior Debt A1 (Due 6/13)(7)                                                     | 6.3 | % | — |  | 6.3 | % | 9,157 |  | 3,470 |  | 7,291 |  |
|                                                                             |   | Senior Debt A2 (Due 6/13)(7) | 6.3 | % | — |  | 6.3 | % | 2,069 |  | 1,905 |  | 32 |  |
|                                                                             |   | Senior Debt A3 (Due 6/13)(7) | 6.3 | % | — |  | 6.3 | % | 15,324 |  | 6,228 |  | 229 |  |
|                                                                             |   | Series A Preferred Units (504 units)(6) |   |   |   |   | 50 |  | — |  |
|                                                                             |   | Series B Preferred Units (5.0%, 10,731 units)(6) |   |   |   |   | 10,731 |  | — |  |
|                                                                             |   | Common Units (36,500 units)(6) |   |   |   |   | — |  | — |  |
| PremierGarage  Holdings, LLC(2)                                                  | Home Furnishings | Preferred LLC Units (400 units)(6) |   |   |   |   | 400 |  | — |  |
| Common LLC Units (79,935 units)(6)                                               |   |   |   |   | 4,971 |  | — |  |
| RadioPharmacy  Investors, LLC(2)                                                 | Healthcare | Senior Debt (Due 12/16)(1) | 7.5 | % | — |  | 7.5 | % | 7,640 |  | 7,640 |  | 7,640 |  |
|                                                                             | Subordinated Debt (Due 12/16)(1) | 12.0 | % | 3.0 | % | 15.0 | % | 10,441 |  | 10,436 |  | 10,436 |  |
|                                                                             |   | Preferred LLC Interest (19.7%, 70,000 units) |   |   |   |   | 10,680 |  | 14,157 |  |
| Total Control investments (represents 13.5% of total investments at fair value)  | 262,624 |  | 61,007 |  |
| Affiliate Investments(3):                                                        |   |   |   |   |   |   |   |
| Advanced Sleep  Concepts, Inc.(2)                                           | Home Furnishings | Senior Debt (Due 1/14)(1) | 12.9 | % | — |  | 12.9 | % | $ | 7,559 |  | $ | 7,528 |  | $ | 7,528 |  |
| Subordinated Debt (Due 1/14)(1)                                                  | 12.0 | % | 4.0 | % | 16.0 | % | 5,755 |  | 5,734 |  | 5,734 |  |
|                                                                             |   | Series A Preferred Stock (20.0%, 49 shares)(6) |   |   |   |   | 344 |  | 64 |  |
|                                                                             |   | Series B Preferred Stock (1,000 shares)(6) |   |   |   |   | — |  | 281 |  |
|                                                                             |   | Common Stock (423 shares)(6) |   |   |   |   | 524 |  | — |  |
|                                                                             |   | Warrants to purchase Common Stock (expire 10/16)(6) |   |   |   |   | 348 |  | — |  |
| Contract Datascan Holdings, Inc.                                                 | Business Services | Subordinated Debt (Due 3/16)(1) | 12.0 | % | 2.0 | % | 14.0 | % | 8,488 |  | 7,916 |  | 7,678 |  |
| Series A Preferred Stock (10.0%, 2,313 shares)(1)(6)                             |   |   |   |   | 2,387 |  | 2,317 |  |
|                                                                             |   | Common Stock (4,806 shares)(1)(6) |   |   |   |   | 477 |  | — |  |
| Total Affiliate investments (represents 5.2% of total investments at fair value) |   |   |   |   | 25,258 |  | 23,602 |  |

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|                                                           |
|-----------------------------------------------------------|
|                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                      |   |   | Interest Rate(9) |   |   | Fair Value |
| Portfolio Company                                         | Industry | Investment | Current | PIK | Total | Principal | Cost |
| Non-Affiliate Investments (less than 5% owned):           |   |   |   |   |   |   |
| BarBri, Inc.                                              | Publishing | Senior Debt (Due 6/17)(1) | 6.0 | % | — |  | 6.0 | % | $ | 6,099 |  | $ | 6,040 |  | $ | 6,061 |  |
| Capstone Logistics, LLC(12)                               | Logistics | Senior Debt (Due 9/16)(1) | 10.5 | % | — |  | 10.5 | % | 29,854 |  | 29,729 |  | 29,729 |  |
| Chase Doors Holdings, Inc.                                | Manufacturing | Senior Debt (Due 12/15)(1) | 9.5 | % | — |  | 9.5 | % | 22,253 |  | 22,060 |  | 22,171 |  |
| Construction Trailer Specialists, Inc.(2)                 | Auto Parts | Senior Debt (Due 6/13)(1) | 8.6 | % | 6.3 | % | 14.9 | % | 7,827 |  | 7,692 |  | 7,808 |  |
| Cruz Bay Publishing, Inc.                                 | Publishing | Subordinated Debt (Due 12/13)(1)(8) | 6.7 | % | 6.5 | % | 13.2 | % | 27,634 |  | 22,917 |  | 16,107 |  |
| CWP/RMK Acquisition Corp.(2)(6)                           | Home Furnishings | Senior Debt (Due 12/16)(7) | 7.0 | % | — |  | 7.0 | % | 600 |  | 551 |  | 597 |  |
| Data Based Systems International, Inc.(14)                | Business Services | Subordinated Debt (Due 8/16)(1) | 10.0 | % | 4.0 | % | 14.0 | % | 9,187 |  | 9,028 |  | 9,163 |  |
| Education Management, Inc.                                | Education | Senior Debt (Due 6/15)(1) | 4.0 | % | 5.3 | % | 9.3 | % | 25,957 |  | 25,719 |  | 25,410 |  |
| Gans Communications,L.P.(2)                               | Cable | Senior Debt (Due 10/17)(1) | 5.5 | % | — |  | 5.5 | % | 5,015 |  | 4,994 |  | 5,023 |  |
| G&L Investment Holdings, LLC(2)                       | Insurance | Subordinated Debt (Due 5/14)(1) | 10.7 | % | 4.3 | % | 15.0 | % | 18,268 |  | 18,004 |  | 18,004 |  |
|                                                      | Series A Preferred Shares (14.0%, 5,000,000 shares)(6) |   |   |   |  |  | 8,191 |  | 7,752 |  |
|                                                      |   | Class C Shares (621,907 shares)(6) |   |   |   |  |  | 529 |  | — |  |
| Golden Knight II CLO, Ltd.                                | Diversified Financial Services | Income Notes (Due 4/19) | 8.0 | % | — |  | 8.0 | % |   | 3,048 |  | 2,435 |  |
| Goodman Global, Inc.                                      | Manufacturing | Senior Debt (Due 10/16)(1) | 5.8 | % | — |  | 5.8 | % | 5,599 |  | 5,627 |  | 5,610 |  |
| Industrial Safety Technologies, LLC                       | Manufacturing | Senior Debt (Due 9/16)(1) | 9.5 | % | — |  | 9.5 | % | 22,000 |  | 21,796 |  | 21,961 |  |
| Jenzabar, Inc.(10)                                        | Technology | Subordinated Preferred Stock (109,800 shares) |   |   |   |   | 1,098 |  | 988 |  |
| Legacy Cabinets Holdings II, Inc.                         | Home Furnishings | Class B-1 Common Stock (2,000 shares)(6) |   |   |   |   | 2,185 |  | 3 |  |
| Mailsouth, Inc.                                           | Publishing | Senior Debt (Due 12/16)(1) | 6.8 | % | — |  | 6.8 | % | 4,664 |  | 4,608 |  | 4,594 |  |
| Maverick HealthcareEquity, LLC                            | Healthcare | Preferred Units (10.0%, 1,250,000 units) |   |   |   |   | 1,831 |  | 1,978 |  |
|                                                      | Class A Common Units (1,250,000 units)(6) |   |   |   |   | — |  | 410 |  |
| Metropolitan Telecommunications Holding Company(2)(13)    | Communications | Senior Debt (Due 3/14-12/16)(1) | 8.1 | % | — |  | 8.1 | % | 21,770 |  | 21,659 |  | 21,659 |  |
| Miles Media Group, LLC(2)                                 | Business Services | Senior Debt (Due 6/16)(1) | 12.5 | % | — |  | 12.5 | % | 17,238 |  | 16,979 |  | 14,190 |  |
| Warrants to purchase Class A Units (expire 3/21) (1) |   |   |   |  |  | 123 |  | — |  |
| NDSSI Holdings, LLC(2)                                    | Electronics | Senior Debt (Due 12/12)(1) | 12.8 | % | 1.0 | % | 13.8 | % | 30,018 |  | 29,899 |  | 29,681 |  |
|                                                      | Series D Preferred Units (30.0%, 2,000,000 units)(6) |   |   |   |  |  | 2,000 |  | 3,000 |  |
|                                                      |   | Series A Preferred Units (516,691 units)(6) |   |   |   |  |  | 718 |  | — |  |
|                                                      |   | Series B Convertible Preferred Units (165,003 units)(6) |   |   |   |  |  | 142 |  | 148 |  |
|                                                      |   | Class A Common Units (1,000,000 units)(6) |   |   |   |  |  | 333 |  | — |  |

----

|                                                                                       |
|---------------------------------------------------------------------------------------|
|                                                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                  |   |   | Interest Rate(9) | Principal | Cost | Fair Value |
| Portfolio Company                                                                     | Industry | Investment | Current | PIK | Total |
| Orbitz Worldwide, Inc.                                                                | Personal Transportation | Senior Debt (Due 7/14)(1) | 3.3 | % | — |  | 3.3 | % | $ | 2,808 |  | $ | 2,703 |  | $ | 2,650 |  |
| Rita’s Water Ice Franchise Company, LLC                                         | Restaurants | Senior Debt (Due 11/16)(1) | 14.0 | % | — |  | 14.0 | % | 9,375 |  | 9,291 |  | 9,291 |  |
| Sagamore Hill Broadcasting, LLC(2)                                                    | Broadcasting | Senior Debt (Due 8/14)(1) | 12.0 | % | 1.0 | % | 13.0 | % | 11,000 |  | 10,918 |  | 10,918 |  |
| SC Academy Holdings, Inc.                                                             | Education | Subordinated Debt (Due 7/16)(1) | 12.0 | % | — |  | 12.0 | % | 13,500 |  | 13,406 |  | 13,412 |  |
| Scotsman Industries, Inc.                                                             | Manufacturing | Senior Debt (Due 4/16)(1) | 5.8 | % | — |  | 5.8 | % | 5,132 |  | 5,131 |  | 5,093 |  |
| ShowPlex Cinemas, Inc.                                                                | Entertainment | Senior Debt (Due 5/15)(1) | 9.5 | % | — |  | 9.5 | % | 7,652 |  | 7,524 |  | 7,524 |  |
| Softlayer Technologies, Inc.                                                          | Business Services | Senior Debt (Due 11/16)(1) | 7.3 | % | — |  | 7.3 | % | 13,790 |  | 13,662 |  | 13,894 |  |
| South Bay Mental Health Center, Inc                                                   | Healthcare | Subordinated Debt (Due 10/17)(1) | 12.0 | % | 2.5 | % | 14.5 | % | 8,124 |  | 7,969 |  | 7,969 |  |
| Summit Business Media Parent Holding Company LLC                                      | Information Services | Class E Series I Units (636 units)(1)(6) |   |   |   |   | 4,120 |  | 419 |  |
| Class E Series II Units (276 units)(1)(6)                                             |   |   |   |   | 1,788 |  | — |  |
| Sunshine Media Group, Inc.(2)                                                         | Publishing | Warrants to purchase Common Stock (expire 1/21)(6) |   |   |   |   | — |  | — |  |
| Tank Intermediate  Holding Corp.(12)                                                  | Manufacturing | Senior Debt (Due 4/16)(1) | 6.0 | % | — |  | 6.0 | % | 4,868 |  | 4,856 |  | 4,856 |  |
| The e-Media Club I, LLC                                                          | Investment Fund | LLC Interest (74 units)(6) |   |   |   |   | 88 |  | 11 |  |
| The Gavilon Group, LLC                                                                | Agriculture | Senior Debt (Due 12/16)(1) | 6.0 | % | — |  | 6.0 | % | 9,000 |  | 8,908 |  | 8,986 |  |
| Virtual Radiologic Corporation                                                        | Healthcare | Senior Debt (Due 12/16)(1) | 7.8 | % | — |  | 7.8 | % | 13,845 |  | 13,677 |  | 12,357 |  |
| Visant Corporation                                                                    | Consumer Products | Senior Debt (Due 12/16)(1) | 5.3 | % | — |  | 5.3 | % | 4,851 |  | 4,865 |  | 4,719 |  |
| VS&A-PBI Holding LLC                                                              | Publishing | LLC Interest(6) |   |   |   |   | 500 |  | — |  |
| West World Media, LLC                                                                 | Information Services | Senior Debt (Due 9/15)(1) | 11.0 | % | 3.0 | % | 14.0 | % | 11,383 |  | 10,739 |  | 10,967 |  |
| Class A Membership Units (25,000 units) (1)                                      |   |   |   |  |  | 1 |  | 321 |  |
|                                                                                  |   | Warrant to purchase Class A Membership Units  (expire 9/15)(1)(6) |   |   |   |  |  | 324 |  | 719 |  |
| Xpressdocs Holdings, Inc.                                                             | Business Services | Series A Preferred Stock (161,870 shares)(6) |   |   |   |  |  | 500 |  | 274 |  |
| Total Non-Affiliate investments (represents 81.3% of total investments at fair value) |   |   |   |   | 388,470 |  | 368,862 |  |
| Total Investments                                                                     |   |   |   |   |   |   | $ | 676,352 |  | $ | 453,471 |  |

----

|                                                                                  |
|----------------------------------------------------------------------------------|
|                                                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                             |   |   | Interest Rate(9) |   |   | Fair Value |
| Portfolio Company                                                                | Industry | Investment | Current | PIK | Total | Principal | Cost |
| Control Investments(4):                                                          |   |   |   |   |   |   |   |
| Broadview Networks Holdings, Inc.                                                | Communications | Series A Preferred Stock (12.0%, 87,254 shares)(6) |   |   |   |   | $ | 81,984 |  | $ | 5,015 |  |
|                                                                             | Series A-1 Preferred Stock (12.0%, 100,702 shares)(6) |   |   |   |   | 77,496 |  | 5,788 |  |
|                                                                             |   | Series B Preferred Stock (12.0%, 1,282 shares)(6) |   |   |   |   | 100 |  | 74 |  |
|                                                                             |   | Class A Common Stock (4,731,031 shares)(6) |   |   |   |   | — |  | — |  |
| GMC Television Broadcasting, LLC(2)                                         | Broadcasting | Senior Debt (Due 12/16)(1) | 4.6 | % | — |  | 4.6 | % | $ | 19,103 |  | 16,651 |  | 17,167 |  |
|                                                                             | Subordinated Debt (Due 12/16)(1)(7) | 2.5 | % | — |  | 2.5 | % | 10,950 |  | 6,976 |  | — |  |
|                                                                             |   | Class B Voting Units (8.0%, 86,700 units)(6) |   |   |   |   | 9,071 |  | — |  |
| Intran Media, LLC                                                                | Other Media | Series A Preferred Units (10.0%, 36,300 units)(6) |   |   |   |   | 9,095 |  | 400 |  |
|                                                                             |   | Series B Preferred Units (10.0%, 12,700 units)(6) |   |   |   |   | 3,000 |  | — |  |
|                                                                             |   | Series C Preferred Units (10.0%,15,000 units)(6) |   |   |   |   | 1,250 |  | — |  |
| Jet Plastica Investors, LLC(2)                                                   | Plastic Products | Senior Debt A (Due 3/15)(1)(7) | 2.6 | % | 7.0 | % | 9.6 | % | 15,288 |  | 14,914 |  | 9,145 |  |
| Senior Debt B (Due 6/15)(1)(7)                                                   | 2.6 | % | 5.0 | % | 7.6 | % | 23,836 |  | 18,977 |  | — |  |
|                                                                             |   | Senior Debt C (Due 6/16)(7) | — |  | 2.5 | % | 2.5 | % | 6,299 |  | 6,250 |  | — |  |
|                                                                             |   | Senior Debt D (Due 3/13-9/16)(7) | — |  | 2.5 | % | 2.5 | % | 29,018 |  | 21,560 |  | — |  |
|                                                                             |   | Series B Preferred Stock (8.0%, 10,000 shares)(6) |   |   |   |   | 10,000 |  | — |  |
|                                                                             |   | Preferred LLC Interest (8.0%, 301,595 units)(6) |   |   |   |   | 34,014 |  | — |  |
| NPS Holding Group, LLC(2)(5)                                                     | Business Services | Senior Debt Revolver (Due 6/13)(1)(7) | 6.3 | % | 2.5 | % | 8.7 | % | 3,909 |  | 2,360 |  | 4,116 |  |
| Senior Debt A1 (Due 6/13)(1)(7)                                                  | 6.3 | % | — |  | 6.3 | % | 9,157 |  | 3,470 |  | 5,237 |  |
|                                                                             |   | Senior Debt A2 (Due 6/13)(1)(7) | 6.3 | % | — |  | 6.3 | % | 2,069 |  | 1,905 |  | 32 |  |
|                                                                             |   | Senior Debt A3 (Due 6/13)(1)(7) | 6.3 | % | — |  | 6.3 | % | 15,324 |  | 6,228 |  | 230 |  |
|                                                                             |   | Series A Preferred Units (504 units)(6) |   |   |   |   | 50 |  | — |  |
|                                                                             |   | Series B Preferred Units (5.0%, 10,731 units)(6) |   |   |   |   | 10,731 |  | — |  |
|                                                                             |   | Common Units (36,500 units)(6) |   |   |   |   | — |  | — |  |
| Orbitel Holdings, LLC(2)                                                    | Cable | Senior Debt (Due 2/13)(1) | 10.0 | % | — |  | 10.0 | % | 18,580 |  | 18,512 |  | 18,512 |  |
|                                                                             | Preferred LLC Interest (10.0%, 150,000 units)(1) |   |   |   |   | 17,929 |  | 19,090 |  |
| PremierGarage  Holdings, LLC(2)                                                  | Home Furnishings | Preferred LLC Units (400 units)(6) |   |   |   |   | 400 |  | — |  |
| Common LLC Units (79,935 units)(6)                                               |   |   |   |   | 4,971 |  | — |  |
| RadioPharmacy  Investors, LLC(2)                                                 | Healthcare | Senior Debt (Due 12/16)(1) | 7.5 | % | — |  | 7.5 | % | 8,176 |  | 8,176 |  | 8,176 |  |
|                                                                             | Subordinated Debt (Due 12/16)(1) | 12.0 | % | 3.0 | % | 15.0 | % | 10,362 |  | 10,355 |  | 10,355 |  |
|                                                                             |   | Preferred LLC Interest (19.7%, 70,000 units) |   |   |   |   | 9,726 |  | 15,926 |  |
| Total Control Investments (represents 16.1% of total investments at fair value)  |   |   |   |   | 406,151 |  | 119,263 |  |
| Affiliate Investments(3):                                                        |   |   |   |   |   |   |   |
| Advanced Sleep  Concepts, Inc.(2)                                           | Home Furnishings | Senior Debt (Due 1/14)(1) | 13.4 | % | — |  | 13.4 | % | $ | 5,859 |  | $ | 5,851 |  | $ | 5,851 |  |
| Subordinated Debt (Due 1/14)(1)                                                  | 12.0 | % | 4.0 | % | 16.0 | % | 5,640 |  | 5,614 |  | 5,614 |  |
|                                                                             |   | Series A Preferred Stock (20.0%, 49 shares) |   |   |   |   | 344 |  | 61 |  |
|                                                                             |   | Series B Preferred Stock (1,000 shares)(6) |   |   |   |   | — |  | 270 |  |
|                                                                             |   | Common Stock (423 shares)(6) |   |   |   |   | 524 |  | — |  |
|                                                                             |   | Warrants to purchase Common Stock (expire 10/16)(6) |   |   |   |   | 348 |  | — |  |
| Contract Datascan Holdings, Inc.                                                 | Business Services | Subordinated Debt (Due 3/16)(1) | 12.0 | % | 2.0 | % | 14.0 | % | 8,402 |  | 7,778 |  | 7,353 |  |
| Series A Preferred Stock (10.0%, 2,313 shares)(1)                                |   |   |   |   | 2,387 |  | 1,931 |  |
|                                                                             |   | Common Stock (4,806 shares)(1)(6) |   |   |   |   | 477 |  | — |  |
| Stratford School Holdings, Inc.(2)                                               | Education | Senior Debt (Due 12/15)(1) | 7.5 | % | — |  | 7.5 | % | 17,500 |  | 17,412 |  | 17,412 |  |
|                                                                             | Series A Convertible Preferred Stock (12.0%, 10,000 shares) |   |   |   |   | 123 |  | 10,191 |  |
|                                                                             |   | Warrants to purchase Common Stock (expire 5/15)(1)(6) |   |   |   |   | — |  | 3,087 |  |
| Total Affiliate Investments (represents 7.0% of total investments at fair value) |   |   |   |   | 40,858 |  | 51,770 |  |

----

|                                                              |
|--------------------------------------------------------------|
|                                                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                         |   |   | Interest Rate(9) |   |   | Fair  Value |
| Portfolio Company                                            | Industry | Investment | Current | PIK | Total | Principal | Cost |
| Non-Affiliate Investments (less than 5% owned):              |   |   |   |   |   |   |
| BarBri, Inc.                                                 | Publishing | Senior Debt (Due 6/17)(1) | 6.0 | % | — |  | 6.0 | % | $ | 7,000 |  | $ | 6,936 |  | $ | 6,991 |  |
| Bentley Systems, Incorporated                                | Information Services | Senior Debt (Due 12/16)(1) | 5.8 | % | — |  | 5.8 | % | 9,900 |  | 9,810 |  | 9,810 |  |
| Capstone Logistics, LLC                                      | Logistics | Senior Debt (Due 9/16)(1) | 10.5 | % | — |  | 10.5 | % | 29,957 |  | 29,816 |  | 29,816 |  |
| Chase Doors Holdings, Inc.                                   | Manufacturing | Senior Debt (Due 12/15)(1) | 9.5 | % | — |  | 9.5 | % | 23,660 |  | 23,442 |  | 23,442 |  |
| Coastal Sunbelt Holding, Inc.(2)                             | Food Services | Senior Debt (Due 8/14-12/15)(1) | 9.1 | % | — |  | 9.1 | % | 19,961 |  | 19,818 |  | 19,818 |  |
|                                                         | Subordinated Debt (Due 8/15)(1) | 16.0 | % | — |  | 16.0 | % | 9,038 |  | 8,967 |  | 9,024 |  |
| Coastal Sunbelt Real Estate, Inc.                            | Real Estate Investments | Series A-2 Preferred Stock (12.0%, 20,000 shares) |   |   |   |   | — |  | 441 |  |
| Construction Trailer Specialists, Inc.(2)                    | Auto Parts | Senior Debt (Due 6/13)(1) | 8.6 | % | 6.3 | % | 14.9 | % | 8,020 |  | 7,877 |  | 7,575 |  |
| Cruz Bay Publishing, Inc.                                    | Publishing | Subordinated Debt (Due 12/13)(1)(8) | 5.3 | % | 8.0 | % | 13.3 | % | 26,154 |  | 22,895 |  | 19,440 |  |
| CWP/RMK Acquisition Corp.(2)                                 | Home Furnishings | Senior Debt (Due 12/16)(7) | 3.0 | % | — |  | 3.0 | % | 600 |  | 564 |  | 559 |  |
| Data Based Systems International, Inc.                       | Business Services | Subordinated Debt (Due 8/16)(1) | 10.0 | % | 4.0 | % | 14.0 | % | 9,004 |  | 8,834 |  | 8,989 |  |
| Education Management, Inc.                                   | Education | Senior Debt (Due 6/15)(1) | 9.3 | % | — |  | 9.3 | % | 25,000 |  | 24,775 |  | 24,963 |  |
| Focus Brands Inc.                                       | Restaurants | Senior Debt (Due 11/16)(1) | 5.3 | % | — |  | 5.3 | % | 9,354 |  | 9,355 |  | 9,296 |  |
| Gans Communications, L.P.(2)                                 | Cable | Senior Debt (Due 10/17)(1) | 5.3 | % | — |  | 5.3 | % | 5,565 |  | 5,548 |  | 5,520 |  |
| G&L Investment Holdings, LLC(2)                          | Insurance | Subordinated Debt (Due 5/14)(1) | 10.7 | % | 4.3 | % | 15.0 | % | 17,882 |  | 17,565 |  | 17,565 |  |
|                                                         | Series A Preferred Shares (14.0%, 5,000,000 shares) |   |   |   |   | 8,192 |  | 7,422 |  |
|                                                         |   | Class C Shares (621,907 shares)(6) |   |   |   |   | 529 |  | — |  |
| Golden Knight II CLO, Ltd.                                   | Diversified Financial Services | Income Notes (Due 4/19) | 8.0 | % | — |  | 8.0 | % |   | 3,053 |  | 2,207 |  |
| Goodman Global, Inc.                                         | Manufacturing | Senior Debt (Due 10/16)(1) | 5.8 | % | — |  | 5.8 | % | 5,599 |  | 5,630 |  | 5,611 |  |
| GSDM Holdings Corp.(2)                                       | Healthcare | Senior Debt (Due 1/16)(1) | 11.5 | % | 6.0 | % | 17.5 | % | 26,777 |  | 26,536 |  | 26,536 |  |
|                                                         | Series B Preferred Stock (12.5%, 852,950 shares) |   |   |   |   | 5,292 |  | 8,117 |  |
| Haws Corporation                                             | Manufacturing | Senior Debt (Due 12/15)(1) | 10.5 | % | — |  | 10.5 | % | 16,500 |  | 16,320 |  | 16,320 |  |
| Industrial Safety Technologies, LLC                          | Manufacturing | Senior Debt (Due 9/16)(1) | 10.0 | % | — |  | 10.0 | % | 22,000 |  | 21,772 |  | 21,772 |  |
| Jenzabar, Inc.(10)                                           | Technology | Senior Preferred Stock (11.0%, 3,750 shares) |   |   |   |   | 6,844 |  | 6,844 |  |
|                                                         |   | Subordinated Preferred Stock (109,800 shares) |   |   |   |   | 1,098 |  | 988 |  |
|                                                         |   | Warrants to purchase Common Stock (expire 4/16)(6) |   |   |   |   | 422 |  | 16,858 |  |
| Legacy Cabinets Holdings II, Inc.                            | Home Furnishings | Class B-1 Common Stock (2,000 shares)(6) |   |   |   |   | 2,185 |  | — |  |
| Mailsouth, Inc.                                              | Publishing | Senior Debt (Due 12/16)(1) | 6.8 | % | — |  | 6.8 | % | 4,963 |  | 4,901 |  | 4,888 |  |
| Maverick Healthcare  Equity, LLC                             | Healthcare | Preferred Units (10.0%, 1,250,000 units) |   |   |   |   | 1,744 |  | 1,882 |  |
|                                                         | Class A Common Units (1,250,000 units)(6) |   |   |   |   | — |  | 484 |  |
| Metropolitan Telecommunications Holding Company(2)           | Communications | Senior Debt (Due 3/14-12/16)(1) | 8.1 | % | — |  | 8.1 | % | 23,770 |  | 23,630 |  | 23,630 |  |
| Miles Media Group, LLC(2)                                    | Business Services | Senior Debt (Due 6/16)(1) | 12.5 | % | — |  | 12.5 | % | 17,738 |  | 17,444 |  | 17,309 |  |
| Warrants to purchase Class A Units (expire 3/21) (1)(6) |   |   |   |   | 123 |  | 523 |  |

----

|                                                                                       |
|---------------------------------------------------------------------------------------|
|                                                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                  |   |   | Interest Rate(9) | Principal | Cost | Fair Value |
| Portfolio Company                                                                     | Industry | Investment | Current | PIK | Total |
| NDSSI Holdings, LLC(2)                                                                | Electronics | Senior Debt (Due 12/12)(1) | 12.8 | % | 1.0 | % | 13.8 | % | $ | 29,859 |  | $ | 29,718 |  | $ | 28,791 |  |
|                                                                                  | Series D Preferred Units (30.0%, 2,000,000 units)(6) |   |   |   |   | 2,000 |  | 3,175 |  |
|                                                                                  |   | Series A Preferred Units (516,691 units)(6) |   |   |   |   | 718 |  | — |  |
|                                                                                  |   | Series B Convertible Preferred Units (165,003 units)(6) |   |   |   |   | 142 |  | — |  |
|                                                                                  |   | Class A Common Units (1,000,000 units)(6) |   |   |   |   | 333 |  | — |  |
| Orbitz Worldwide, Inc.                                                                | Personal Transportation | Senior Debt (Due 7/14)(1) | 3.4 | % | — |  | 3.4 | % | 3,014 |  | 2,883 |  | 2,604 |  |
| Ozburn-Hessey Holding Company LLC                                                     | Logistics | Senior Debt (Due 4/16)(1) | 8.3 | % | — |  | 8.3 | % | 4,378 |  | 4,426 |  | 3,868 |  |
| Philadelphia Media Network, Inc.                                                      | Newspaper | Class A Common Stock (1,000 shares)(6) |   |   |   |   | 5,070 |  | 7 |  |
| Qualawash Holdings, LLC                                                               | Repair Services | Subordinated Debt (Due 1/16)(1) | 11.0 | % | — |  | 11.0 | % | 20,000 |  | 19,839 |  | 19,839 |  |
| Rita’s Water Ice Franchise Company, LLC                                         | Restaurants | Senior Debt (Due 11/16)(1) | 14.0 | % | — |  | 14.0 | % | 9,375 |  | 9,282 |  | 9,282 |  |
| Sagamore Hill Broadcasting, LLC(2)                                                    | Broadcasting | Senior Debt (Due 8/14)(1) | 12.0 | % | 1.0 | % | 13.0 | % | 11,114 |  | 11,018 |  | 11,018 |  |
| Sally Holdings LLC                                                                    | Cosmetics | Senior Debt (Due 11/13)(1) | 2.6 | % | — |  | 2.6 | % | 8,531 |  | 8,541 |  | 8,521 |  |
| SC Academy Holdings, Inc.                                                             | Education | Subordinated Debt (Due 7/16)(1) | 12.0 | % | — |  | 12.0 | % | 13,500 |  | 13,398 |  | 13,471 |  |
| Scotsman Industries, Inc.                                                             | Manufacturing | Senior Debt (Due 4/16)(1) | 5.8 | % | — |  | 5.8 | % | 5,309 |  | 5,309 |  | 5,256 |  |
| Service Champ, Inc.                                                                   | Auto Parts | Subordinated Unsecured Debt (Due 2/17)(1) | 12.0 | % | 2.3 | % | 14.3 | % | 12,111 |  | 12,009 |  | 12,203 |  |
| ShowPlex Cinemas, Inc.                                                                | Entertainment | Senior Debt (Due 5/15)(1) | 11.0 | % | — |  | 11.0 | % | 7,689 |  | 7,539 |  | 7,539 |  |
| Softlayer Technologies, Inc.                                                          | Business Services | Senior Debt (Due 11/16)(1) | 7.3 | % | — |  | 7.3 | % | 13,860 |  | 13,718 |  | 13,906 |  |
| Summit Business Media Parent Holding Company LLC                                      | Information Services | Class E Series I Units (636 units)(1)(6) |   |   |   |   | 4,120 |  | 281 |  |
| Class E Series II Units (276 units)(1)(6)                                             |   |   |   |   | 1,788 |  | — |  |
| Sunshine Media Group, Inc.(2)                                                         | Publishing | Warrants to purchase Common Stock (expire 1/21)(6) |   |   |   |   | — |  | — |  |
| Tank Intermediate  Holding Corp.                                                      | Manufacturing | Senior Debt (Due 4/16)(1) | 5.0 | % | — |  | 5.0 | % | 5,506 |  | 5,421 |  | 5,448 |  |
| The e-Media Club I, LLC                                                          | Investment Fund | LLC Interest (74 units)(6) |   |   |   |   | 88 |  | 11 |  |
| The Gavilon Group, LLC                                                                | Agriculture | Senior Debt (Due 12/16)(1) | 6.0 | % | — |  | 6.0 | % | 9,500 |  | 9,395 |  | 9,464 |  |
| The Matrixx Group, Incorporated                                                       | Plastic Products | Subordinated Debt (Due 6/14)(1) | 10.8 | % | — |  | 10.8 | % | 12,500 |  | 12,500 |  | 12,639 |  |
| Virtual Radiologic Corporation                                                        | Healthcare | Senior Debt (Due 12/16)(1) | 7.8 | % | — |  | 7.8 | % | 13,915 |  | 13,730 |  | 13,184 |  |
| Visant Corporation                                                                    | Consumer Products | Senior Debt (Due 12/16)(1) | 5.3 | % | — |  | 5.3 | % | 4,851 |  | 4,866 |  | 4,563 |  |
| VS&A-PBI Holding LLC                                                              | Publishing | LLC Interest(6) |   |   |   |   | 500 |  | — |  |
| West World Media, LLC                                                                 | Information Services | Senior Debt (Due 9/15)(1) | 11.0 | % | 3.0 | % | 14.0 | % | 11,301 |  | 10,577 |  | 10,577 |  |
| Class A Membership Units (25,000 units) (1)(6)                                   |   |   |   |   | 1 |  | 285 |  |
|                                                                                  |   | Warrant to purchase Class A Membership Units (expire 9/15)(1)(6) |   |   |   |   | 324 |  | 719 |  |
| Xpressdocs Holdings, Inc.(2)                                                          | Business Services | Senior Debt (Due 4/12-4/13)(1) | 10.9 | % | 0.9 | % | 11.8 | % | 18,734 |  | 18,539 |  | 18,733 |  |
| Series A Preferred Stock (161,870 shares)(6)                                          |   |   |   |   | 500 |  | 109 |  |
| Total Non-Affiliate Investments (represents 76.9% of total investments at fair value) |   | 570,209 |  | 570,133 |  |
| Total Investments                                                                     |   |   |   |   |   |   | $ | 1,017,218 |  | $ | 741,166 |  |

----

|           |                                                                                                                                                                                                                                                              |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)  | Some or all of this security is held by our SBIC subsidiary or one of our other financing subsidiaries and may have been pledged as collateral in connection therewith.  See Note 5—Borrowings to the Condensed Consolidated Financial Statements. |

|           |                                                                                        |
|-----------|----------------------------------------------------------------------------------------|
| (2)  | Includes securities issued by one or more of the portfolio company’s affiliates. |

|           |                                                                                                                                                  |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------|
| (3)  | Affiliate investments represent companies in which we own at least 5%, but not more than 25% of the portfolio company’s voting securities. |

|           |                                                                                                                           |
|-----------|---------------------------------------------------------------------------------------------------------------------------|
| (4)  | Control investments represent companies in which we own more than 25% of the portfolio company’s voting securities. |

|           |                                                                                                                                                                   |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (5)  | Represents a non-majority-owned control portfolio company of which we own at least 25%, but not more than 50% of the portfolio company’s voting securities. |

|           |                                                        |
|-----------|--------------------------------------------------------|
| (6)  | Equity security is non-income producing at period-end. |

|           |                                                 |
|-----------|-------------------------------------------------|
| (7)  | Loan or debt security is on non-accrual status. |

|           |                                                                                                                                                                                                                                            |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (8)  | We did not recognize paid-in-kind, or PIK, interest or accretion income because the fair value of our investment was below its cost basis.  However, we continue to accrue interest that is receivable in cash from the portfolio company. |

|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (9)  | Interest rates represent the weighted-average annual stated interest rate on debt securities, presented by nature of indebtedness for a single issuer.  PIK interest represents contractually deferred interest that is added to the principal balance of the debt security and compounded if not paid on a current basis.  PIK may be prepaid by either contract or the portfolio company's choice, but generally is paid at the end of the loan term.  Rates on preferred stock and preferred LLC interests, where applicable, represent the contractual rate. |

|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (10)  | In February 2012, we accepted $23.7 million for our senior preferred stock and warrant position in Jenzabar.  The consideration received also settled any and all direct claims and counterclaims asserted in the litigation by and among the Company, Jenzabar and certain Jenzabar officers and directors.  We will receive the balance of the payment for our position in Jenzabar in the amount of $990,000 for our subordinated preferred stock and will exchange those shares upon the final dismissal of the litigation, including the dismissal of the derivative claims. |

|            |                                                                                                                                                                                                                                                                                                                                                                |
|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (11)  | In the three months ended June 30, 2012, Jet Plastica Investors, LLC liquidated substantially all of its assets.  Including the proceeds from the liquidation, we have received $11.0 million of payments on our senior debt.  We anticipate receiving additional payments on our senior debt upon future collection of certain accounts receivable. |

|            |                                                                               |
|------------|-------------------------------------------------------------------------------|
| (12)  | In July 2012, Tank Intermediate Holding Corp. senior debt was repaid in full. |

|            |                                                                                               |
|------------|-----------------------------------------------------------------------------------------------|
| (13)  | In July 2012, Metropolitan Telecommunications Holding Company senior debt was repaid in full. |

|            |                                                                                                |
|------------|------------------------------------------------------------------------------------------------|
| (14)  | In July 2012, Data Based Systems International, Inc. subordinated debt was repaid in full. |

----

----

|                           |
|---------------------------|
|                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                      | COST BASIS | FAIR VALUE BASIS |
|                      | June 30, 2012 | December 31, 2011 | June 30, 2012 | December 31, 2011 |
| (dollars in thousands)    | Investments at Cost | % of Total Portfolio | Investments at Cost | % of Total Portfolio | Investments at Fair Value | % of Total Portfolio | Investments at Fair Value | % of Total Portfolio |
| Debt Investments          |   |   |   |   |   |   |   |   |
| Senior secured debt       | $ | 337,789 |  | 50.0 | % | $ | 551,402 |  | 54.2 | % | $ | 328,094 |  | 72.4 | % | $ | 492,488 |  | 66.4 | % |
| Subordinated debt         |   |   |   |   |   |   |   |   |
| Secured                   | 102,386 |  | 15.1 |  | 134,721 |  | 13.2 |  | 88,503 |  | 19.5 |  | 124,289 |  | 16.8 |  |
| Unsecured                 | — |  | — |  | 12,009 |  | 1.2 |  | — |  | — |  | 12,203 |  | 1.7 |  |
| Total debt investments    | 440,175 |  | 65.1 |  | 698,132 |  | 68.6 |  | 416,597 |  | 91.9 |  | 628,980 |  | 84.9 |  |
| Equity investments        |   |   |   |   |   |   |   |   |
| Preferred                 | 219,866 |  | 32.5 |  | 297,283 |  | 29.3 |  | 34,991 |  | 7.7 |  | 89,931 |  | 12.1 |  |
| Common/common equivalents | 16,311 |  | 2.4 |  | 21,803 |  | 2.1 |  | 1,883 |  | 0.4 |  | 22,255 |  | 3.0 |  |
| Total equity investments  | 236,177 |  | 34.9 |  | 319,086 |  | 31.4 |  | 36,874 |  | 8.1 |  | 112,186 |  | 15.1 |  |
| Total investments         | $ | 676,352 |  | 100.0 | % | $ | 1,017,218 |  | 100.0 | % | $ | 453,471 |  | 100.0 | % | $ | 741,166 |  | 100.0 | % |

----

|                                           |
|-------------------------------------------|
|                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                      | COST BASIS | FAIR VALUE BASIS |
|                                      | June 30, 2012 | December 31, 2011 | June 30, 2012 | December 31, 2011 |
| (dollars in thousands)                    | Investments at Cost | % of Loan Portfolio | Investments at Cost | % of Loan Portfolio | Investments at Fair Value | % of Loan Portfolio | Investments at Fair Value | % of Loan Portfolio |
| Loans greater than 90 days past due       |   |   |   |   |   |   |   |
| On non-accrual status                     | $ | 13,963 |  | 3.17 | % | $ | 13,963 |  | 2.00 | % | $ | 11,843 |  | 2.84 | % | $ | 9,615 |  | 1.53 | % |
| Not on non-accrual status                 | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  |
| Total loans greater than 90 days past due | $ | 13,963 |  | 3.17 | % | $ | 13,963 |  | 2.00 | % | $ | 11,843 |  | 2.84 | % | $ | 9,615 |  | 1.53 | % |
| Loans on non-accrual status               |   |   |   |   |   |   |   |   |
| 0 to 90 days past due                     | $ | 11,420 |  | 2.60 | % | $ | 69,241 |  | 9.92 | % | $ | 597 |  | 0.15 | % | $ | 9,704 |  | 1.54 | % |
| Greater than 90 days past due             | 13,963 |  | 3.17 |  | 13,963 |  | 2.00 |  | 11,843 |  | 2.84 |  | 9,615 |  | 1.53 |  |
| Total loans on non-accrual status         | $ | 25,383 |  | 5.77 | % | $ | 83,204 |  | 11.92 | % | $ | 12,440 |  | 2.99 | % | $ | 19,319 |  | 3.07 | % |

|                                                                                                          |
|----------------------------------------------------------------------------------------------------------|
|                                                                                                          |  |  |  |  |  |  |  |  |  |  |
|                                                                                                     | June 30, 2012 | December 31, 2011 |
| (dollars in thousands)                                                                                   | Investments at Fair Value | Percent of Total Portfolio | Investments at Fair Value | Percent of Total Portfolio |
| Manufacturing                                                                                            | $ | 59,691 |  | 13.2 | % | $ | 77,849 |  | 10.5 | % |
| Business services                                                                                        | 59,359 |  | 13.1 |  | 78,468 |  | 10.6 |  |
| Healthcare                                                                                               | 54,947 |  | 12.1 |  | 84,660 |  | 11.4 |  |
| Education                                                                                                | 38,822 |  | 8.6 |  | 69,124 |  | 9.3 |  |
| Electronics                                                                                              | 32,829 |  | 7.2 |  | 31,966 |  | 4.3 |  |
| Logistics                                                                                                | 29,729 |  | 6.6 |  | 33,684 |  | 4.5 |  |
| Publishing                                                                                               | 26,762 |  | 5.9 |  | 31,319 |  | 4.2 |  |
| Broadcasting                                                                                             | 26,252 |  | 5.8 |  | 28,185 |  | 3.8 |  |
| Insurance                                                                                                | 25,756 |  | 5.7 |  | 24,987 |  | 3.4 |  |
| Communications                                                                                           | 22,856 |  | 5.0 |  | 34,507 |  | 4.7 |  |
| Home furnishings                                                                                         | 14,207 |  | 3.1 |  | 12,355 |  | 1.7 |  |
| Information services                                                                                     | 12,426 |  | 2.7 |  | 21,672 |  | 2.9 |  |
| Restaurants                                                                                              | 9,291 |  | 2.1 |  | 18,578 |  | 2.5 |  |
| Agriculture                                                                                              | 8,986 |  | 2.0 |  | 9,464 |  | 1.3 |  |
| Auto parts                                                                                               | 7,808 |  | 1.7 |  | 19,778 |  | 2.7 |  |
| Entertainment                                                                                            | 7,524 |  | 1.7 |  | 7,539 |  | 1.0 |  |
| Cable                                                                                                    | 5,023 |  | 1.1 |  | 43,122 |  | 5.8 |  |
| Consumer products                                                                                        | 4,719 |  | 1.0 |  | 4,563 |  | 0.6 |  |
| Technology                                                                                               | 988 |  | 0.2 |  | 24,690 |  | 3.3 |  |
| Plastic products                                                                                         | — |  | — |  | 21,784 |  | 2.9 |  |
| Food services                                                                                            | — |  | — |  | 28,842 |  | 3.9 |  |
| Repair services                                                                                          | — |  | — |  | 19,839 |  | 2.7 |  |
| Cosmetics                                                                                                | — |  | — |  | 8,521 |  | 1.2 |  |
| Other(a)                                                                                                 | 5,496 |  | 1.2 |  | 5,670 |  | 0.8 |  |
| Total                                                                                                    | $ | 453,471 |  | 100.0 | % | $ | 741,166 |  | 100.0 | % |
| ______________________(a)    No individual industry within this category exceeds 1%. |   |   |   |   |

----

|                              |
|------------------------------|
|                              |  |
| ASC 820 Fair Value Hierarchy | Inputs to Fair Value Methodology |
| Level 1                      | Quoted prices in active markets for identical assets or liabilities |
| Level 2                      | Quoted prices for similar assets or liabilities; quoted markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the financial instrument; inputs other than quoted prices that are observable for the asset or liability; or inputs that are derived principally from, or corroborated by, observable market information |
| Level 3                      | Pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption is unobservable or when the estimation of fair value requires significant management judgment |

----

|                                              |
|----------------------------------------------|
|                                              |  |  |  |  |  |  |  |  |  |  |
|                                         | June 30, 2012 |
| (in thousands)                               | Internal Models with Significant | Total Fair Value  Reported in  Consolidated  Balance Sheet |   |
| Observable Market Parameters  (Level 2) | Unobservable  Market Parameters (Level 3) |   |
| Non-affiliate investments                    |   |   |   |   |
| Senior secured debt                          | $ | 73,843 |  | $ | 211,906 |  | $ | 285,749 |  |   |
| Subordinated secured debt                    | — |  | 64,655 |  | 64,655 |  |   |
| Unsecured subordinated debt                  | — |  | — |  | — |  |   |
| Preferred equity                             | 2,435 |  | 14,140 |  | 16,575 |  |   |
| Common/common equivalents                    | — |  | 1,883 |  | 1,883 |  |   |
| Total non-affiliate investments              | 76,278 |  | 292,584 |  | 368,862 |  |   |
| Affiliate investments                        |   |   |   |   |
| Senior secured debt                          | — |  | 7,528 |  | 7,528 |  |   |
| Subordinated secured debt                    | — |  | 13,412 |  | 13,412 |  |   |
| Preferred equity                             | — |  | 2,662 |  | 2,662 |  |   |
| Common/common equivalents                    | — |  | — |  | — |  |   |
| Total affiliate investments                  | — |  | 23,602 |  | 23,602 |  |   |
| Control investments                          |   |   |   |   |
| Senior secured debt                          | — |  | 34,817 |  | 34,817 |  |   |
| Subordinated secured debt                    | — |  | 10,436 |  | 10,436 |  |   |
| Preferred equity                             | — |  | 15,754 |  | 15,754 |  |   |
| Total control investments                    | — |  | 61,007 |  | 61,007 |  |   |
| Total assets at fair value                   | $ | 76,278 |  | $ | 377,193 |  | $ | 453,471 |  |   |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Majority-Owned Control Investments—Majority-owned control investments comprise 10.9% of our investment portfolio as of June 30, 2012.  Market quotations are not readily available for these investments; therefore, we use a combination of market and income approaches to determine their fair value.  Typically, private companies are bought and sold based on multiples of earnings before interest, taxes, depreciation and amortization, or EBITDA, cash flows, net income, revenues or, in limited cases, book value.  Generally, we apply multiples that we observe for other comparable companies to relevant financial data for the portfolio company.  Also, in a limited number of cases, we use income approaches to determine the fair value of these securities, based on our projections of the discounted future free cash flows that the portfolio company will likely generate, as well as industry derived capital costs.  Our valuation approaches for majority-owned investments estimate the value were we to sell or exit the investment.  These valuation approaches consider the value of our ability to control the portfolio company’s capital structure and the timing of a potential exit. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Non-Majority-Owned Control Investments—Non-majority-owned control investments comprise 2.6% of our investment portfolio as of June 30, 2012.  For our non-majority-owned control equity investments, we use the same market and income valuation approaches used to value our majority-owned control investments.  For non-majority owned control debt investments, we estimate fair value using the market-yield approach based on the expected |

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Non-Control Investments—Non-control investments comprise 86.5% of our investment portfolio as of June 30, 2012.  Quoted prices are not available for 80.6% of our non-control investments as of June 30, 2012.  For our non-control equity investments, we use the same market and income approaches used to value our control investments.  For non-control debt investments for which no quoted prices are available, we estimate fair value using a market-yield approach based on the expected future cash flows discounted at the loans’ effective interest rates, based on our estimate of current market rates.  We may adjust discounted cash flow calculations to reflect other market conditions or the perceived credit risk of the borrower. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Thinly Traded and Over-the-Counter Securities—Generally, we value securities that are traded in the over-the-counter market or on a stock exchange at the average of the prevailing bid and ask prices on the date of the relevant period end.  However, we may apply a discount to the market value of restricted or thinly traded public securities to reflect the impact that these restrictions have on the value of these securities.  We review factors including the trading volume, total securities outstanding and our percentage ownership of securities to determine whether the trading levels are active (Level 1) or inactive (Level 2).  As of June 30, 2012, these securities represented 16.8% of our investment portfolio.  We utilize independent pricing services with certain of our fair value estimates.  The majority of our level 2 investments are senior debt investments that are secured and collateralized.  To corroborate “bid/ask” quotes from independent pricing services we perform a market-yield approach to validate prices obtained or obtain other evidence. |

----

|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |  |  |  |  |  |  |
| (in thousands)                        | Fair value measurements using unobservable inputs (Level 3) |
| Non-affiliate Investments             | Affiliate Investments | Control Investments | Total |
| Fair value as of March 31, 2012       |   |   |   |   |
| Senior secured debt                   | $ | 279,913 |  | $ | 24,941 |  | $ | 65,507 |  | $ | 370,361 |  |
| Subordinated secured debt             | 88,571 |  | 13,142 |  | 10,357 |  | 112,070 |  |
| Unsecured subordinated debt           | 12,353 |  | — |  | — |  | 12,353 |  |
| Preferred equity                      | 20,709 |  | 12,671 |  | 41,988 |  | 75,368 |  |
| Common/common equivalents equity      | 1,886 |  | 3,002 |  | — |  | 4,888 |  |
| Total fair value as of March 31, 2012 | 403,432 |  | 53,756 |  | 117,852 |  | 575,040 |  |
| Realized/unrealized gain (loss)       |   |   |   |   |
| Senior secured debt                   | (1,237 | ) | — |  | (151 | ) | (1,388 | ) |
| Subordinated secured debt             | (3,410 | ) | 140 |  | — |  | (3,270 | ) |
| Unsecured subordinated debt           | (275 | ) | — |  | — |  | (275 | ) |
| Preferred equity                      | 420 |  | 2,806 |  | (10,633 | ) | (7,407 | ) |
| Common/common equivalents equity      | 94 |  | 706 |  | — |  | 800 |  |
| Total realized/unrealized gain (loss) | (4,408 | ) | 3,652 |  | (10,784 | ) | (11,540 | ) |
| Issuances                             |   |   |   |   |
| Senior secured debt                   | 2,457 |  | 87 |  | 56 |  | 2,600 |  |
| Subordinated secured debt             | 8,581 |  | 130 |  | 79 |  | 8,790 |  |
| Unsecured subordinated debt           | 103 |  | — |  | — |  | 103 |  |
| Preferred equity                      | 97 |  | 18 |  | 477 |  | 592 |  |
| Total issuances                       | 11,238 |  | 235 |  | 612 |  | 12,085 |  |
| Settlements                           |   |   |   |   |
| Senior secured debt                   | (69,227 | ) | (17,500 | ) | (30,595 | ) | (117,322 | ) |
| Subordinated secured debt             | (29,087 | ) | — |  | — |  | (29,087 | ) |
| Unsecured subordinated debt           | (12,181 | ) | — |  | — |  | (12,181 | ) |
| Preferred equity                      | (5,195 | ) | — |  | (215 | ) | (5,410 | ) |
| Common/common equivalents equity      | (53 | ) | — |  | — |  | (53 | ) |
| Total settlements                     | (115,743 | ) | (17,500 | ) | (30,810 | ) | (164,053 | ) |
| Sales                                 |   |   |   |   |
| Preferred equity                      | (1,891 | ) | (12,833 | ) | (15,863 | ) | (30,587 | ) |
| Common/common equivalents equity      | (44 | ) | (3,708 | ) | — |  | (3,752 | ) |
| Total sales                           | (1,935 | ) | (16,541 | ) | (15,863 | ) | (34,339 | ) |
| Fair value as of June 30, 2012        |   |   |   |   |
| Senior secured debt                   | 211,906 |  | 7,528 |  | 34,817 |  | 254,251 |  |
| Subordinated secured debt             | 64,655 |  | 13,412 |  | 10,436 |  | 88,503 |  |
| Unsecured subordinated debt           | — |  | — |  | — |  | — |  |
| Preferred equity                      | 14,140 |  | 2,662 |  | 15,754 |  | 32,556 |  |
| Common/common equivalents equity      | 1,883 |  | — |  | — |  | 1,883 |  |
| Total fair value as of June 30, 2012  | $ | 292,584 |  | $ | 23,602 |  | $ | 61,007 |  | $ | 377,193 |  |

----

|                                           |
|-------------------------------------------|
|                                           |  |  |  |  |  |  |  |  |  |  |  |  |
| (in thousands)                            | Fair value measurements using unobservable inputs (Level  3) |
| Non-affiliateInvestments                  | AffiliateInvestments | ControlInvestments | Total |
| Fair value March 31, 2011            |   |   |   |   |
| Senior secured debt                       | $ | 304,712 |  | $ | 24,203 |  | $ | 92,585 |  | $ | 421,500 |  |
| Subordinated secured debt                 | 139,471 |  | 12,408 |  | 25,749 |  | 177,628 |  |
| Unsecured subordinated debt               | 12,588 |  | — |  | — |  | 12,588 |  |
| Preferred equity                          | 25,354 |  | 14,402 |  | 141,340 |  | 181,096 |  |
| Common/common equivalents equity          | 29,968 |  | 3,150 |  | — |  | 33,118 |  |
| Total fair value March 31, 2011      | 512,093 |  | 54,163 |  | 259,674 |  | 825,930 |  |
| Realized/unrealized gain (loss)           |   |   |   |   |
| Senior secured debt                       | (2,391 | ) | — |  | (2,008 | ) | (4,399 | ) |
| Subordinated secured debt                 | 388 |  | 255 |  | (136 | ) | 507 |  |
| Unsecured subordinated debt               | 35 |  | — |  | — |  | 35 |  |
| Preferred equity                          | 4,889 |  | (794 | ) | (23,499 | ) | (19,404 | ) |
| Common/common equivalents equity          | 1,619 |  | 182 |  | — |  | 1,801 |  |
| Total realized/unrealized gain (loss)     | 4,540 |  | (357 | ) | (25,643 | ) | (21,460 | ) |
| Purchases                                 |   |   |   |   |
| Senior secured debt                       | — |  | — |  | 1,863 |  | 1,863 |  |
| Preferred equity                          | — |  | — |  | 4,300 |  | 4,300 |  |
| Total purchases                           | — |  | — |  | 6,163 |  | 6,163 |  |
| Issuances                                 |   |   |   |   |
| Senior secured debt                       | 34,029 |  | 3,016 |  | 7,046 |  | 44,091 |  |
| Subordinated secured debt                 | 488 |  | 166 |  | 174 |  | 828 |  |
| Unsecured subordinated debt               | 1,730 |  | — |  | — |  | 1,730 |  |
| Preferred equity                          | 650 |  | 650 |  | 515 |  | 1,815 |  |
| Common/common equivalents equity          | 208 |  | — |  | — |  | 208 |  |
| Total issuances                           | 37,105 |  | 3,832 |  | 7,735 |  | 48,672 |  |
| Settlements                               |   |   |   |   |
| Senior secured debt                       | (66,169 | ) | (2,736 | ) | (5,784 | ) | (74,689 | ) |
| Subordinated secured debt                 | (30,709 | ) | — |  | (15,424 | ) | (46,133 | ) |
| Preferred equity                          | — |  | (792 | ) | (6,778 | ) | (7,570 | ) |
| Total settlements                         | (96,878 | ) | (3,528 | ) | (27,986 | ) | (128,392 | ) |
| Sales                                     |   |   |   |   |
| Preferred equity                          | (283 | ) | — |  | (29,154 | ) | (29,437 | ) |
| Common/common equivalents equity          | (1,879 | ) | — |  | — |  | (1,879 | ) |
| Total sales                               | (2,162 | ) | — |  | (29,154 | ) | (31,316 | ) |
| Fair value as of June 30, 2011       |   |   |   |   |
| Senior secured debt                       | 270,181 |  | 24,483 |  | 93,702 |  | 388,366 |  |
| Subordinated secured debt                 | 109,638 |  | 12,829 |  | 10,363 |  | 132,830 |  |
| Unsecured subordinated debt               | 14,353 |  | — |  | — |  | 14,353 |  |
| Preferred equity                          | 30,610 |  | 13,466 |  | 86,724 |  | 130,800 |  |
| Common/common equivalents equity          | 29,916 |  | 3,332 |  | — |  | 33,248 |  |
| Total fair value as of June 30, 2011 | $ | 454,698 |  | $ | 54,110 |  | $ | 190,789 |  | $ | 699,597 |  |

----

|                                                                               |
|-------------------------------------------------------------------------------|
|                                                                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                          | Three months ended June 30, 2012 | Three months ended June 30, 2011 |
| (in thousands)                                                                | Non-affiliate Investments | Affiliate Investments | Control Investments | Total | Non-affiliate Investments | Affiliate Investments | Control Investments | Total |
| Change in unrealized appreciation (depreciation)                              |   |   |   |   |   |   |   |   |
| Senior secured debt                                                           | $ | (1,042 | ) | $ | — |  | $ | (638 | ) | $ | (1,680 | ) | $ | 3,883 |  | $ | — |  | $ | (2,008 | ) | $ | 1,875 |  |
| Subordinated secured debt                                                     | (3,377 | ) | 140 |  | — |  | (3,237 | ) | 12,416 |  | 255 |  | — |  | 12,671 |  |
| Unsecured subordinated debt                                                   | — |  | — |  | — |  | — |  | 1,474 |  | — |  | 1,000 |  | 2,474 |  |
| Preferred equity                                                              | 1,261 |  | 198 |  | (9,587 | ) | (8,128 | ) | 4,606 |  | (794 | ) | (35,552 | ) | (31,740 | ) |
| Common/common equivalents equity                                              | 3 |  | — |  | — |  | 3 |  | 92 |  | 182 |  | — |  | 274 |  |
| Total change in unrealized appreciation (depreciation) on Level 3 investments | $ | (3,155 | ) | $ | 338 |  | $ | (10,225 | ) | $ | (13,042 | ) | $ | 22,471 |  | $ | (357 | ) | $ | (36,560 | ) | $ | (14,446 | ) |

----

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |
| (in thousands)                          | Fair value measurements using unobservable inputs (Level 3) |
| Non-affiliate Investments               | Affiliate Investments | Control Investments | Total |
| Fair value December 31, 2011       |   |   |   |   |
| Senior secured debt                     | $ | 297,680 |  | $ | 23,263 |  | $ | 62,615 |  | $ | 383,558 |  |
| Subordinated secured debt               | 100,967 |  | 12,967 |  | 10,355 |  | 124,289 |  |
| Unsecured subordinated debt             | 12,203 |  | — |  | — |  | 12,203 |  |
| Preferred equity                        | 28,978 |  | 12,453 |  | 46,293 |  | 87,724 |  |
| Common/common equivalents equity        | 19,168 |  | 3,087 |  | — |  | 22,255 |  |
| Total fair value December 31, 2011 | 458,996 |  | 51,770 |  | 119,263 |  | 630,029 |  |
| Realized/unrealized gain (loss)         |   |   |   |   |
| Senior secured debt                     | (1,661 | ) | — |  | 3,786 |  | 2,125 |  |
| Subordinated secured debt               | (3,638 | ) | 186 |  | — |  | (3,452 | ) |
| Unsecured subordinated debt             | (194 | ) | — |  | 8 |  | (186 | ) |
| Preferred equity                        | (1,213 | ) | 2,996 |  | (15,416 | ) | (13,633 | ) |
| Common/common equivalents equity        | (397 | ) | 621 |  | — |  | 224 |  |
| Total realized/unrealized gain (loss)   | (7,103 | ) | 3,803 |  | (11,622 | ) | (14,922 | ) |
| Issuances                               |   |   |   |   |
| Senior secured debt                     | 3,874 |  | 3,565 |  | 91 |  | 7,530 |  |
| Subordinated secured debt               | 8,954 |  | 259 |  | 160 |  | 9,373 |  |
| Unsecured subordinated debt             | 172 |  | — |  | — |  | 172 |  |
| Preferred equity                        | 369 |  | 46 |  | 955 |  | 1,370 |  |
| Total issuances                         | 13,369 |  | 3,870 |  | 1,206 |  | 18,445 |  |
| Settlements                             |   |   |   |   |
| Senior secured debt                     | (87,987 | ) | (19,300 | ) | (31,675 | ) | (138,962 | ) |
| Subordinated secured debt               | (41,628 | ) | — |  | (79 | ) | (41,707 | ) |
| Unsecured subordinated debt             | (12,181 | ) | — |  | (8 | ) | (12,189 | ) |
| Preferred equity                        | (12,103 | ) | — |  | (215 | ) | (12,318 | ) |
| Common/common equivalents equity        | (16,844 | ) | — |  | — |  | (16,844 | ) |
| Total settlements                       | (170,743 | ) | (19,300 | ) | (31,977 | ) | (222,020 | ) |
| Sales                                   |   |   |   |   |
| Preferred equity                        | (1,891 | ) | (12,833 | ) | (15,863 | ) | (30,587 | ) |
| Common/common equivalents equity        | (44 | ) | (3,708 | ) | — |  | (3,752 | ) |
| Total sales                             | (1,935 | ) | (16,541 | ) | (15,863 | ) | (34,339 | ) |
| Fair value as of June 30, 2012          |   |   |   |   |
| Senior secured debt                     | 211,906 |  | 7,528 |  | 34,817 |  | 254,251 |  |
| Subordinated secured debt               | 64,655 |  | 13,412 |  | 10,436 |  | 88,503 |  |
| Unsecured subordinated debt             | — |  | — |  | — |  | — |  |
| Preferred equity                        | 14,140 |  | 2,662 |  | 15,754 |  | 32,556 |  |
| Common/common equivalents equity        | 1,883 |  | — |  | — |  | 1,883 |  |
| Total fair value as of June 30, 2012    | $ | 292,584 |  | $ | 23,602 |  | $ | 61,007 |  | $ | 377,193 |  |

----

|                                           |
|-------------------------------------------|
|                                           |  |  |  |  |  |  |  |  |  |  |  |  |
| (in thousands)                            | Fair value measurements using unobservable inputs (Level  3) |
| Non-affiliateInvestments                  | AffiliateInvestments | ControlInvestments | Total |
| Fair value December 31, 2010         |   |   |   |   |
| Senior secured debt                       | $ | 325,874 |  | $ | 24,207 |  | $ | 75,714 |  | $ | 425,795 |  |
| Subordinated secured debt                 | 121,743 |  | 12,348 |  | 56,218 |  | 190,309 |  |
| Unsecured subordinated debt               | 12,321 |  | — |  | — |  | 12,321 |  |
| Preferred equity                          | 24,741 |  | 13,197 |  | 178,357 |  | 216,295 |  |
| Common/common equivalents equity          | 29,170 |  | 3,548 |  | — |  | 32,718 |  |
| Total fair value December 31, 2010   | 513,849 |  | 53,300 |  | 310,289 |  | 877,438 |  |
| Realized/unrealized gain (loss)           |   |   |   |   |
| Senior secured debt                       | (1,674 | ) | — |  | (30,191 | ) | (31,865 | ) |
| Subordinated secured debt                 | 2,525 |  | 178 |  | 33,647 |  | 36,350 |  |
| Unsecured subordinated debt               | 240 |  | — |  | — |  | 240 |  |
| Preferred equity                          | 4,952 |  | 45 |  | (54,170 | ) | (49,173 | ) |
| Common/common equivalents equity          | 2,311 |  | (50 | ) | — |  | 2,261 |  |
| Total realized/unrealized gain (loss)     | 8,354 |  | 173 |  | (50,714 | ) | (42,187 | ) |
| Purchases                                 |   |   |   |   |
| Senior secured debt                       | — |  | — |  | 11,863 |  | 11,863 |  |
| Preferred equity                          | — |  | — |  | 4,300 |  | 4,300 |  |
| Common/common equivalents equity          | 123 |  | — |  | — |  | 123 |  |
| Total purchases                           | 123 |  | — |  | 16,163 |  | 16,286 |  |
| Issuances                                 |   |   |   |   |
| Senior secured debt                       | 37,022 |  | 3,485 |  | 42,214 |  | 82,721 |  |
| Subordinated secured debt                 | 29,594 |  | 303 |  | 1,061 |  | 30,958 |  |
| Unsecured subordinated debt               | 1,792 |  | — |  | — |  | 1,792 |  |
| Preferred equity                          | 1,200 |  | 1,016 |  | 12,099 |  | 14,315 |  |
| Common/common equivalents equity          | 208 |  | 62 |  | — |  | 270 |  |
| Total issuances                           | 69,816 |  | 4,866 |  | 55,374 |  | 130,056 |  |
| Settlements                               |   |   |   |   |
| Senior secured debt                       | (80,835 | ) | (3,209 | ) | (5,898 | ) | (89,942 | ) |
| Subordinated secured debt                 | (44,224 | ) | — |  | (80,563 | ) | (124,787 | ) |
| Preferred equity                          | — |  | (792 | ) | (12,168 | ) | (12,960 | ) |
| Common/common equivalents equity          | (17 | ) | (228 | ) | — |  | (245 | ) |
| Total settlements                         | (125,076 | ) | (4,229 | ) | (98,629 | ) | (227,934 | ) |
| Sales                                     |   |   |   |   |
| Senior secured debt                       | (10,206 | ) | — |  | — |  | (10,206 | ) |
| Preferred equity                          | (283 | ) | — |  | (41,694 | ) | (41,977 | ) |
| Common/common equivalents equity          | (1,879 | ) | — |  | — |  | (1,879 | ) |
| Total sales                               | (12,368 | ) | — |  | (41,694 | ) | (54,062 | ) |
| Fair value as of June 30, 2011       |   |   |   |   |
| Senior secured debt                       | 270,181 |  | 24,483 |  | 93,702 |  | 388,366 |  |
| Subordinated secured debt                 | 109,638 |  | 12,829 |  | 10,363 |  | 132,830 |  |
| Unsecured subordinated debt               | 14,353 |  | — |  | — |  | 14,353 |  |
| Preferred equity                          | 30,610 |  | 13,466 |  | 86,724 |  | 130,800 |  |
| Common/common equivalents equity          | 29,916 |  | 3,332 |  | — |  | 33,248 |  |
| Total fair value as of June 30, 2011 | $ | 454,698 |  | $ | 54,110 |  | $ | 190,789 |  | $ | 699,597 |  |

----

|                                                                               |
|-------------------------------------------------------------------------------|
|                                                                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                          | Six months ended June 30, 2012 | Six months ended June 30, 2011 |
| (in thousands)                                                                | Non-affiliate Investments | Affiliate Investments | Control Investments | Total | Non-affiliate Investments | Affiliate Investments | Control Investments | Total |
| Change in unrealized appreciation (depreciation)                              |   |   |   |   |   |   |   |   |
| Senior secured debt                                                           | $ | (1,466 | ) | $ | — |  | $ | 3,299 |  | $ | 1,833 |  | $ | 29,181 |  | $ | — |  | $ | (30,191 | ) | $ | (1,010 | ) |
| Subordinated secured debt                                                     | (3,467 | ) | 186 |  | — |  | (3,281 | ) | 14,553 |  | 178 |  | 33,783 |  | 48,514 |  |
| Unsecured subordinated debt                                                   | 81 |  | — |  | — |  | 81 |  | 1,679 |  | — |  | 1,000 |  | 2,679 |  |
| Preferred equity                                                              | (372 | ) | 388 |  | (14,370 | ) | (14,354 | ) | 4,669 |  | 962 |  | (67,430 | ) | (61,799 | ) |
| Common/common equivalents equity                                              | (421 | ) | (85 | ) | — |  | (506 | ) | 4,154 |  | (50 | ) | — |  | 4,104 |  |
| Total change in unrealized appreciation (depreciation) on Level 3 investments | $ | (5,645 | ) | $ | 489 |  | $ | (11,071 | ) | $ | (16,227 | ) | $ | 54,236 |  | $ | 1,090 |  | $ | (62,838 | ) | $ | (7,512 | ) |

|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |
| ($ in thousands)            | Fair Value | Valuation Techniques | Unobservable Inputs | Range |
|                        | Minimum | Maximum |
| Senior debt                 | $ | 254,251 |  | Discounted cash flow | Market interest rate | 7.0 | % | 13.0 | % |
|                             |  |  | Discounted cash flow | Discount rate | 7.5 | % | 7.5 | % |
|                             |  |  | Market comparable companies | EBITDA multiple(a) | 5.0x |  | 7.5x |  |
|                             |  |  | Pending transactions/Letters of intent | Discount | — | % | — | % |
| Subordinated debt           | 88,503 |  | Discounted cash flow | Market interest rate | 10.3 | % | 15.5 | % |
|                             |  |  | Market comparable companies | EBITDA multiple(a) | 6.8x |  | 7.5x |  |
|                             |  |  | Pending transactions/Letters of intent | Discount | — | % | — | % |
| Preferred and common equity | 34,439 |  | Market comparable companies | EBITDA multiple(a) | 4.4x |  | 9.0x |  |
|                             |  |  |  | Discount for minority interest | — | % | 25.0 | % |
|                             |  |  | Pending transactions/Letters of intent | Discount | — | % | — | % |
|                             |  |  | Residual assets | Discount | — | % | 25.0 | % |
|                        | $ | 377,193 |  |   |   |   |   |

|           |                                                                                                                           |
|-----------|---------------------------------------------------------------------------------------------------------------------------|
| (a)  | EBITDA may include proforma adjustments and/or other addbacks based on specific circumstances related to each investment. |

----

|                        |
|------------------------|
|                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                   | Investments at fair value | Revenue for the six months ended |
|                   | June 30, 2012 | December 31, 2011 | June 30, 2012 | June 30, 2011 |
| (dollars in thousands) | Amount | % of Total Portfolio | Amount | % of Total Portfolio | Amount | % of Total Revenue | Amount | % of Total Revenue |
| Industry               |   |   |   |   |   |   |   |   |
| Manufacturing          | $ | 59,691 |  | 13.2 | % | $ | 77,849 |  | 10.5 | % | $ | 3,068 |  | 8.6 | % | $ | 2,140 |  | 4.7 | % |
| Business services      | 59,359 |  | 13.1 |  | 78,468 |  | 10.6 |  | 4,099 |  | 11.5 |  | 4,476 |  | 9.8 |  |
| Healthcare             | 54,947 |  | 12.1 |  | 84,660 |  | 11.4 |  | 5,091 |  | 14.3 |  | 5,193 |  | 11.4 |  |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | June 30, 2012 | December 31, 2011 |
| (dollars in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Maturity Date | Total Facility/ Program | Amount Outstanding | Total Facility/ Program | Amount Outstanding |
| SBIC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |
| 2008-10B                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | September 2018 | $ | 2,600 |  | $ | 2,600 |  | $ | 2,600 |  | $ | 2,600 |  |
| 2009-10A                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | March 2019 | 12,000 |  | 12,000 |  | 12,000 |  | 12,000 |  |
| 2009-10B                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | September 2019 | 13,000 |  | 13,000 |  | 13,000 |  | 13,000 |  |
| 2010-10B                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | September 2020 | 27,500 |  | 27,500 |  | 27,500 |  | 27,500 |  |
| 2011-10A                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | March 2021 | 53,500 |  | 53,500 |  | 53,500 |  | 53,500 |  |
| 2012-10A                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | March 2022 | 41,400 |  | 41,400 |  | 41,400 |  | 20,000 |  |
| Commercial Loan Trust 2006-1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |  |  |  |  |   |   |
| Series 2006-1 Class A-1 Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | April 2018(a) | 37,966 |  | 37,966 |  | 63,389 |  | 63,389 |  |
| Series 2006-1 Class A-2 Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | April 2018(a) | 1,787 |  | 1,787 |  | 2,983 |  | 2,983 |  |
| Series 2006-1 Class A-3 Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | April 2018(a) | 30,373 |  | 30,373 |  | 50,711 |  | 50,711 |  |
| Series 2006-1 Class B Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | April 2018(a) | 58,750 |  | 58,750 |  | 58,750 |  | 58,750 |  |
| Series 2006-1 Class C Notes(b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | April 2018(a) | 45,000 |  | 32,000 |  | 45,000 |  | 32,000 |  |
| Series 2006-1 Class D Notes(c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | April 2018(a) | 45,945 |  | 28,902 |  | 46,494 |  | 29,247 |  |
| Commercial Loan Funding Trust                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |  |  |  |  |   |   |
| Variable Funding Note                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | January 2014(d) | — |  | — |  | 150,000 |  | 55,822 |  |
| Private Placement Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |  |  |  |  |   |   |
| Series 2007-A                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | October 2011 | — |  | — |  | 8,717 |  | 8,717 |  |
| Total borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | $ | 369,821 |  | $ | 339,778 |  | $ | 576,044 |  | $ | 430,219 |  |
|     (a)    Borrowings under the Commercial Loan Trust 2006-1 facility are listed based on the contractual maturity date.  The reinvestment period for this facility ended on July 20, 2011 and we will use all future principal collections from collateral in the facility to repay the securitized debt.  On July 20, 2012, we used $90.7 million of securitized cash to repay in full the Class A-1, A-2 and A-3 notes and partially repay the Class B notes. |
| (b)    Amount outstanding excludes $5.0 million of notes that we repurchased in December 2008 for $1.6 million and $8.0 million of notes that we repurchased in April 2010 for $4.4 million.  As part of the consolidation process, we eliminated the notes that MCG, the parent company, purchased.                                                                                                                                                                                           |
| (c)    Amount outstanding excludes $10.1 million of notes that we repurchased in December 2008 for $2.4 million and $7.5 million of notes that we repurchased in January 2009 for $2.1 million.  As part of the consolidation process, we eliminated the notes that MCG, the parent company, purchased.                                                                                                                                                                                        |
| (d)    On May 15, 2012, this facility was repaid in full and terminated.                                                                                                                                                                                                                                                                                                                                                                                                                       |

----

|                |
|----------------|
|                |  |  |  |
| (in thousands) | June 30, 2012 |
| 2012(a)        | $ | 90,725 |  |
| 2013           | — |  |
| 2014           | — |  |
| 2015           | — |  |
| 2016           | — |  |
| Thereafter     | 249,053 |  |
| Total          | $ | 339,778 |  |

|           |                                                                                                                                                                                                                                                                                         |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)  | Reflects repayments we are required to make in connection with principal collections from collateral loans in our Commercial Loan Trust 2006-1 including $71.3 million from our securitization cash accounts as of June 30, 2012 and $19.4 million of principal collected in July 2012. |

----

|                        |
|------------------------|
|                        |  |  |  |  |  |  |  |  |  |
|                   | Amount Outstanding |   |
| (dollars in thousands) | June 30, 2012 | December 31, 2011 | Rate |
| Tranche                |   |   |   |   |
| 2008-10B               | $ | 2,600 |  | $ | 2,600 |  | 6.44 | % | Fixed |
| 2009-10A               | 12,000 |  | 12,000 |  | 5.34 | % | Fixed |
| 2009-10B               | 13,000 |  | 13,000 |  | 4.95 | % | Fixed |
| 2010-10B               | 27,500 |  | 27,500 |  | 3.93 | % | Fixed |
| 2011-10A               | 53,500 |  | 53,500 |  | 4.80 | % | Fixed |
| 2012-10A               | 41,400 |  | 20,000 |  | 3.38 | % | Fixed |
| Total                  | $ | 150,000 |  | $ | 128,600 |  | 4.33 | % |   |

|                               |
|-------------------------------|
|                               |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)        | June 30, 2012 | December 31, 2011 |
|                          | Amount | % | Amount | % |
| Securitized assets            |   |   |   |   |
| Senior secured debt           | $ | 169,401 |  | 60.8 | % | $ | 258,722 |  | 78.9 | % |
| Subordinated secured debt     | 30,651 |  | 11.0 |  | 43,640 |  | 13.3 |  |
| Common Equity                 | 419 |  | 0.2 |  | 282 |  | 0.1 |  |
| Total securitized assets      | 200,471 |  | 72.0 |  | 302,644 |  | 92.3 |  |
| Cash, securitization accounts | 77,995 |  | 28.0 |  | 25,195 |  | 7.7 |  |
| Total collateral              | $ | 278,466 |  | 100.0 | % | $ | 327,839 |  | 100.0 | % |

----

|                    |
|--------------------|
|                    |  |  |  |  |  |
| Date Declared      | Record Date | Payment Date | Amount |
| July 27, 2012 | August 17, 2012 | August 31, 2012 | $ | 0.14 |  |
| April 27, 2012     | June 13, 2012 | July 13, 2012 | $ | 0.14 |  |
| February 24, 2012  | April 13, 2012 | May 15, 2012 | $ | 0.17 |  |
| October 31, 2011   | December 15, 2011 | January 13, 2012 | $ | 0.17 |  |
| August 1, 2011     | September 14, 2011 | October 14, 2011 | $ | 0.17 |  |
| May 5, 2011        | June 15, 2011 | July 15, 2011 | $ | 0.17 |  |
| March 1, 2011      | March 15, 2011 | April 15, 2011 | $ | 0.15 |  |

----

|             |
|-------------|
|             |  |  |  |  |  |  |  |  |  |  |  |  |  |
|        | Market Thresholds, Shares and Cash Bonus Eligible for Award under Long-Term Incentive Plan | Date Market Thresholds Achieved and Shares and Dollar Amounts Awarded |
|        | Potential Stock Awards | Aggregate Dollar Amount for Each Share Price threshold Achieved |   | Number of Shares Awarded(a) |   |
| Share Price | % of Award | Number of Shares | Date Share Price Achieved | Dollar Amount Awarded(b) |
| $3.00       | 25 | % | 216,250 |  | $ | — |  | October 2009 | 216,250 |  | $ | — |  |
| $4.00       | 25 | % | 216,250 |  | — |  | October 2009 | 216,250 |  | — |  |
| $5.00       | 25 | % | 216,250 |  | 1,000,000 |  | April 2010 | 216,250 |  | 1,000,000 |  |
| $6.00       | 15 | % | 129,750 |  | 996,000 |  | November 2010 | 129,750 |  | 996,000 |  |
| $7.00       | 10 | % | 86,500 |  | 1,006,000 |  | March 2011 | 86,500 |  | 1,006,000 |  |
| $8.00(c)    | — | % | — |  | 2,209,000 |  |   |   |   |
|        | 100 | % | 865,000 |  | $ | 5,211,000 |  |   | 865,000 |  | $ | 3,002,000 |  |

|           |                                                                                                                                                                                    |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)  | As of June 30, 2012, we awarded 865,000 shares under the LTIP program, for which the forfeiture provision have lapsed on 862,917 shares and 2,083 shares were forfeited. |

|           |                                                                                                                                                                                                                                                                                                    |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b)  | As of June 30, 2012, we awarded $3,002,000 of cash awards under the plan, of which $2,001,000 was paid out upon achievement of the market threshold.  Cash in the amount of $180,000 was paid to LTIP participants in 2012 after satisfaction of the participants’ service requirement. |

|           |                                                                                                                                                                                                                                                                                                                                                      |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (c)  | The market share price thresholds for LTIP cash awards were required to be maintained for twenty consecutive trading days prior to expiration of the LTIP, which occurred on July 22, 2012.  As of June 30, 2012, the market condition for the $8.00 tranche could not be achieved, resulting in the forfeiture of the $8.00 tranche. |

----

|                                                          |
|----------------------------------------------------------|
|                                                          |  |  |  |  |  |
|                                                     | Shares | Weighted-Average Grant Date Fair Value per Share |
| Subject to forfeiture provisions as of December 31, 2011 | 430,510 |  | $ | 6.14 |  |
| Awarded                                                  | 1,022,500 |  | $ | 4.43 |  |
| Forfeiture provision satisfied                           | (189,060 | ) | $ | 5.29 |  |
| Forfeited                                                | (32,290 | ) | $ | 6.87 |  |
| Subject to forfeiture provisions as of June 30, 2012     | 1,231,660 |  | $ | 4.78 |  |

----

|                                 |
|---------------------------------|
|                                 |  |  |  |  |  |  |  |  |  |
| (in thousands)                  | SeveranceBenefits(a) | Other | Total |
| Balance as of December 31, 2011 | $ | 2,472 |  | $ | 54 |  | $ | 2,526 |  |
| Additions                       | — |  | — |  | — |  |
| Accretion                       | 43 |  | — |  | 43 |  |
| Cash payments                   | (1,371 | ) | (16 | ) | (1,387 | ) |
| Balance as of June 30, 2012     | $ | 1,144 |  | $ | 38 |  | $ | 1,182 |  |

----

----

|                                                                                                                                                                                                                                                                                                                                                    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands, except per share amounts)                                                                                                                                                                                                                                                                                                   | Three months ended June 30, | Six months ended June 30, |
|                                                                                                                                                                                                                                                                                                                                               | 2012 | 2011 | 2012 | 2011 |
| Numerator for basic and diluted earnings per share                                                                                                                                                                                                                                                                                                 |   |   |   |   |
| Net loss                                                                                                                                                                                                                                                                                                                                           | $ | (7,037 | ) | $ | (10,218 | ) | $ | (5,680 | ) | $ | (19,033 | ) |
| Less: Dividends declared—common and restricted shares                                                                                                                                                                                                                                                                                        | (10,469 | ) | (13,101 | ) | (23,519 | ) | (24,683 | ) |
| Undistributed loss                                                                                                                                                                                                                                                                                                                                 | (17,506 | ) | (23,319 | ) | (29,199 | ) | (43,716 | ) |
| Percentage allocated to common shares(a)                                                                                                                                                                                                                                                                                                           | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
| Undistributed earnings—common shares                                                                                                                                                                                                                                                                                                         | (17,506 | ) | (23,319 | ) | (29,199 | ) | (43,716 | ) |
| Add: Dividends declared—common shares                                                                                                                                                                                                                                                                                                        | 10,469 |  | 13,101 |  | 23,519 |  | 24,683 |  |
| Numerator for common shares outstanding excluding participating shares                                                                                                                                                                                                                                                                             | (7,037 | ) | (10,218 | ) | (5,680 | ) | (19,033 | ) |
| Numerator for participating unvested shares only                                                                                                                                                                                                                                                                                                   | — |  | — |  | — |  | — |  |
| Numerator for basic and diluted earnings per share—total                                                                                                                                                                                                                                                                                     | $ | (7,037 | ) | $ | (10,218 | ) | $ | (5,680 | ) | $ | (19,033 | ) |
| Denominator for basic and diluted weighted-average shares outstanding                                                                                                                                                                                                                                                                              |   |   |   |   |
| Common shares outstanding                                                                                                                                                                                                                                                                                                                          | 75,142 |  | 76,343 |  | 75,793 |  | 76,056 |  |
| Participating unvested shares(b)                                                                                                                                                                                                                                                                                                                   | — |  | — |  | — |  | — |  |
| Basic and diluted weighted-average common shares outstanding—total(b)                                                                                                                                                                                                                                                                        | 75,142 |  | 76,343 |  | 75,793 |  | 76,056 |  |
| Loss per share—basic and diluted                                                                                                                                                                                                                                                                                                             |   |   |   |   |
| Excluding participating unvested shares                                                                                                                                                                                                                                                                                                            | $ | (0.09 | ) | $ | (0.13 | ) | $ | (0.07 | ) | $ | (0.25 | ) |
| Including participating unvested shares                                                                                                                                                                                                                                                                                                            | $ | (0.09 | ) | $ | (0.13 | ) | $ | (0.07 | ) | $ | (0.25 | ) |
| (a)    Basic and diluted weighted-average common shares:                                                                                                                                                                                                                                                                       |   |   |   |   |
| Weighted-average common shares outstanding                                                                                                                                                                                                                                                                                                         | 75,142 |  | 76,343 |  | 75,793 |  | 76,056 |  |
| Weighted-average restricted shares                                                                                                                                                                                                                                                                                                                 | — |  | — |  | — |  | — |  |
| Total basic and diluted weighted-average common shares                                                                                                                                                                                                                                                                                             | 75,142 |  | 76,343 |  | 75,793 |  | 76,056 |  |
| Percentage allocated to common shares                                                                                                                                                                                                                                                                                                              | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
| (b)    For the three and six months ended June 30, 2012 and 2011, we excluded 1,259; 718; 933 and 901, of weighted-average shares of restricted common stock from the calculation of diluted loss per share because the inclusion of these shares would have had an anti-dilutive impact on the calculation of loss per share. |

----

----

|                                                                                                                                                                                                    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                    |  |  |  |  |  |  |
|                                                                                                                                                                                               | Six months ended |
| (in thousands, except per share amounts)                                                                                                                                                           | June 30 |
|                                                                                                                                                                                               | 2012 | 2011 |
| Per share data                                                                                                                                                                                     |   |   |
| Net asset value at beginning of period(a)                                                                                                                                                          | $ | 5.65 |  | $ | 7.54 |  |
| Net income (loss)(b)                                                                                                                                                                               |  |  |   |
| Net operating income before net investment loss, loss on extinguishment of debt and income tax provision                                                                                           | 0.13 |  | 0.32 |  |
| Net unrealized appreciation (depreciation) on investments                                                                                                                                          | 0.70 |  | (0.08 | ) |
| Net realized (loss) gain on investments                                                                                                                                                            | (0.90 | ) | (0.48 | ) |
| Loss on extinguishment of debt before income tax provision                                                                                                                                         | — |  | (0.01 | ) |
| Net loss                                                                                                                                                                                           | (0.07 | ) | (0.25 | ) |
| Net decrease in net assets resulting from distributions                                                                                                                                            | (0.31 | ) | (0.32 | ) |
| Net decrease in net assets relating to stock-based transactions                                                                                                                                    |  |  |   |
| Issuance of shares of restricted common stock(c)                                                                                                                                                   | (0.07 | ) | (0.05 | ) |
| Repurchase of common stock                                                                                                                                                                         | 0.04 |  | — |  |
| Net increase in stockholders’ equity from restricted stock amortization                                                                                                                      | 0.02 |  | 0.01 |  |
| Net decrease in net assets relating to share issuances                                                                                                                                             | (0.01 | ) | (0.04 | ) |
| Net asset value at end of period(a)                                                                                                                                                                | 5.26 |  | 6.93 |  |
| Market price per share                                                                                                                                                                             |  |   |
| Beginning of period                                                                                                                                                                                | $ | 3.99 |  | $ | 6.97 |  |
| End of period                                                                                                                                                                                      | $ | 4.58 |  | $ | 6.08 |  |
| Total Return(d)                                                                                                                                                                                    | 23.31 |  % | -8.61 |  % |
| Shares of Common Stock Outstanding(d)                                                                                                                                                              |  |  |   |
| Weighted-average—basic and diluted                                                                                                                                                           | 75,793 |  | 76,056 |  |
| End of period                                                                                                                                                                                      | 74,062 |  | 77,046 |  |
| Net assets                                                                                                                                                                                         |  |  |   |
| Average (annualized)                                                                                                                                                                               | $ | 419,052 |  | $ | 559,231 |  |
| End of period                                                                                                                                                                                      | $ | 389,926 |  | $ | 534,033 |  |
| Ratios (annualized)                                                                                                                                                                                |  |  |   |
| Operating expenses to average net assets                                                                                                                                                           | 12.41 |  % | 7.67 |  % |
| Net operating income to average net assets                                                                                                                                                         | 4.62 |  % | 8.74 |  % |
| General and administrative expense to average net assets                                                                                                                                           | 3.94 |  % | 2.00 |  % |
| Return on average equity                                                                                                                                                                           | -2.73 |  % | -6.86 |  % |
|     (a)    Based on total number of shares outstanding.                                                                                                    |   |   |
| (b)    Based on weighted-average number of shares outstanding.                                                                                                                 |   |   |
| (c)    Represents the effects of shares issued during the period and the lapsing of forfeiture provisions on restricted stock on earnings per share.                           |
| (d)    Total return = [(ending market price per share – beginning market price per share + dividends paid per share) / beginning market price per share]. |

----

----

----

|         |                                                                                                                                                                                                                                                                                                                                    |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Equity Monetizations - For the three and six month period ended June 30, 2012, we received $40.1 million and $64.1 million,respectively, in proceeds from the sale of equity investments, principally the sale of Orbitel Holdings, LLC, Stratford School Holdings, Inc., GSDM Holdings, LLC and Jenzabar, Inc. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Loan Monetizations and Fundings - For the three and six month periods ended June 30, 2012, we received $172.6 million and $227.9 million, respectively, in loan payoffs and amortization payments.  During the three months ended June 30, 2012, eight borrowers repaid $145.1 million in principal at or above par and we funded $2.5 million in loan advances and draws to existing borrowers.  For the three and six month period ended June 30, 2012, we originated and advanced $11.5 million and $17.7 million, respectively, to portfolio companies. |

|         |                                                                                                                                                                                                                                                                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Open-Market Purchases of Our Stock - In the second quarter of 2012, we repurchased and retired 2,687,476 shares of our common stock at a total cost of $11.7 million, or an average of $4.36 per share.  We acquired these shares from sellers in open market transactions.  We retire these shares upon settlement, thereby reducing the number of shares issued and outstanding. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Operational Realignment - Executing on our transition plan, during the second quarter of 2012 we reduced our headcount by an additional three positions.  In the second quarter, we accrued $1.8 million in severance-related expenses and we anticipate accruing an additional $0.1 million in severance-related expenses over the remainder of 2012 in regard to terminated employees with remaining service periods.  As of July 15, 2012, we have 24 full-time employees. |

|         |                                                                                                                                                                                                                                                               |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Liquidity and De-Leveraging Events - On May 15, 2012, we paid off our SunTrust Warehouse facility.  For the six months ended June 30, 2012, our asset coverage ratio improved from 244% at December 31, 2011 to 305% at June 30, 2012. |

----

|                                  |
|----------------------------------|
|                                  |  |  |  |  |  |  |  |  |  |  |
|                             | June 30, 2012 | December 31, 2011 |
| (dollars in thousands)           | Investments at Fair Value | Percent of Total Portfolio | Investments at Fair Value | Percent of Total Portfolio |
| Debt investments                 |   |   |   |   |
| Senior secured debt              | $ | 328,094 |  | 72.4 | % | $ | 492,488 |  | 66.4 | % |
| Subordinated debt                |   |   |   |   |
| Secured                          | 88,503 |  | 19.5 |  | 124,289 |  | 16.8 |  |
| Unsecured                        | — |  | — |  | 12,203 |  | 1.7 |  |
| Total debt investments           | 416,597 |  | 91.9 |  | 628,980 |  | 84.9 |  |
| Equity investments               |   |   |   |   |
| Preferred equity                 | 34,991 |  | 7.7 |  | 89,931 |  | 12.1 |  |
| Common/common equivalents equity | 1,883 |  | 0.4 |  | 22,255 |  | 3.0 |  |
| Total equity investments         | 36,874 |  | 8.1 |  | 112,186 |  | 15.1 |  |
| Total investments                | $ | 453,471 |  | 100.0 | % | $ | 741,166 |  | 100.0 | % |

----

|                                                                                                          |
|----------------------------------------------------------------------------------------------------------|
|                                                                                                          |  |  |  |  |  |  |  |  |  |  |
|                                                                                                     | June 30, 2012 | December 31, 2011 |
| (dollars in thousands)                                                                                   | Investments at Fair Value | Percent of Total Portfolio | Investments at Fair Value | Percent of Total Portfolio |
| Manufacturing                                                                                            | $ | 59,691 |  | 13.2 | % | $ | 77,849 |  | 10.5 | % |
| Business services                                                                                        | 59,359 |  | 13.1 |  | 78,468 |  | 10.6 |  |
| Healthcare                                                                                               | 54,947 |  | 12.1 |  | 84,660 |  | 11.4 |  |
| Education                                                                                                | 38,822 |  | 8.6 |  | 69,124 |  | 9.3 |  |
| Electronics                                                                                              | 32,829 |  | 7.2 |  | 31,966 |  | 4.3 |  |
| Logistics                                                                                                | 29,729 |  | 6.6 |  | 33,684 |  | 4.5 |  |
| Publishing                                                                                               | 26,762 |  | 5.9 |  | 31,319 |  | 4.2 |  |
| Broadcasting                                                                                             | 26,252 |  | 5.8 |  | 28,185 |  | 3.8 |  |
| Insurance                                                                                                | 25,756 |  | 5.7 |  | 24,987 |  | 3.4 |  |
| Communications                                                                                           | 22,856 |  | 5.0 |  | 34,507 |  | 4.7 |  |
| Home furnishings                                                                                         | 14,207 |  | 3.1 |  | 12,355 |  | 1.7 |  |
| Information services                                                                                     | 12,426 |  | 2.7 |  | 21,672 |  | 2.9 |  |
| Restaurants                                                                                              | 9,291 |  | 2.1 |  | 18,578 |  | 2.5 |  |
| Agriculture                                                                                              | 8,986 |  | 2.0 |  | 9,464 |  | 1.3 |  |
| Auto parts                                                                                               | 7,808 |  | 1.7 |  | 19,778 |  | 2.7 |  |
| Entertainment                                                                                            | 7,524 |  | 1.7 |  | 7,539 |  | 1.0 |  |
| Cable                                                                                                    | 5,023 |  | 1.1 |  | 43,122 |  | 5.8 |  |
| Consumer products                                                                                        | 4,719 |  | 1.0 |  | 4,563 |  | 0.6 |  |
| Technology                                                                                               | 988 |  | 0.2 |  | 24,690 |  | 3.3 |  |
| Plastic products                                                                                         | — |  | — |  | 21,784 |  | 2.9 |  |
| Food services                                                                                            | — |  | — |  | 28,842 |  | 3.9 |  |
| Repair services                                                                                          | — |  | — |  | 19,839 |  | 2.7 |  |
| Cosmetics                                                                                                | — |  | — |  | 8,521 |  | 1.2 |  |
| Other(a)                                                                                                 | 5,496 |  | 1.2 |  | 5,670 |  | 0.8 |  |
| Total                                                                                                    | $ | 453,471 |  | 100.0 | % | $ | 741,166 |  | 100.0 | % |
| ______________________(a)    No individual industry within this category exceeds 1%. |   |   |   |   |

|                        |
|------------------------|
|                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                   | Investments at fair value | Revenue for the six months ended |
|                   | June 30, 2012 | December 31, 2011 | June 30, 2012 | June 30, 2011 |
| (dollars in thousands) | Amount | % of Total Portfolio | Amount | % of Total Portfolio | Amount | % of Total Revenue | Amount | % of Total Revenue |
| Industry               |   |   |   |   |   |   |   |   |
| Manufacturing          | $ | 59,691 |  | 13.2 | % | $ | 77,849 |  | 10.5 | % | $ | 3,068 |  | 8.6 | % | $ | 2,140 |  | 4.7 | % |
| Business services      | 59,359 |  | 13.1 |  | 78,468 |  | 10.6 |  | 4,099 |  | 11.5 |  | 4,476 |  | 9.8 |  |
| Healthcare             | 54,947 |  | 12.1 |  | 84,660 |  | 11.4 |  | 5,091 |  | 14.3 |  | 5,193 |  | 11.4 |  |

----

|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |
|                                                 | Six months ended |
| (in thousands)                                       | June 30 |
|                                                 | 2012 | 2011 |
| Beginning investment portfolio                       | $ | 741,166 |  | $ | 1,009,705 |  |
| Originations and advances                            | 17,723 |  | 202,858 |  |
| Gross payments, reductions and sales of securities   | (292,046 | ) | (307,396 | ) |
| Net gain (loss)                                      | (67,974 | ) | (35,546 | ) |
| Unrealized (depreciation)                            | (16,306 | ) | (38,742 | ) |
| Reversals of unrealized (appreciation) depreciation  | 69,477 |  | 31,719 |  |
| Origination fees and amortization of unearned income | 1,431 |  | (13,497 | ) |
| Ending investment portfolio                          | $ | 453,471 |  | $ | 849,101 |  |

|                                  |
|----------------------------------|
|                                  |  |  |  |  |  |  |  |  |  |  |
|                             | Six months ended June 30, |
|                             | 2012 | 2011 |
| (dollars in thousands)           | Amount | % of Total | Amount | % of Total |
| Debt investments                 |   |   |   |   |
| Senior secured debt              | $ | 6,539 |  | 36.9 | % | $ | 160,940 |  | 79.3 | % |
| Subordinated debt                |   |   |   |   |
| Secured                          | 9,141 |  | 51.6 |  | 30,703 |  | 15.1 |  |
| Unsecured                        | 70 |  | 0.4 |  | 1,814 |  | 0.9 |  |
| Total debt investments           | 15,750 |  | 88.9 |  | 193,457 |  | 95.3 |  |
| Equity investments               |   |   |   |   |
| Preferred equity                 | 1,973 |  | 11.1 |  | 9,217 |  | 4.6 |  |
| Common/common equivalents equity | — |  | — |  | 184 |  | 0.1 |  |
| Total equity investments         | 1,973 |  | 11.1 |  | 9,401 |  | 4.7 |  |
| Total originations and advances  | $ | 17,723 |  | 100.0 | % | $ | 202,858 |  | 100.0 | % |

|                                      |
|--------------------------------------|
|                                      |  |  |  |  |  |  |  |  |  |  |  |  |
| (in thousands)                       | Six months ended |
|                                 | June 30, 2012 |
| Company                              | Originations | Draws/ Advances | PIK Advances/ Dividends | Total |
| Debt                                 |   |   |   |   |
| South Bay Mental Health Center, Inc. | $ | 8,079 |  | $ | — |  | $ | 45 |  | $ | 8,124 |  |
| Advanced Sleep Concepts, Inc.        | — |  | 3,500 |  | 115 |  | 3,615 |  |
| Education Management, Inc.           | — |  | 1,000 |  | 332 |  | 1,332 |  |
| Other (< $1 million)              | — |  | 300 |  | 2,379 |  | 2,679 |  |
| Total debt                           | 8,079 |  | 4,800 |  | 2,871 |  | 15,750 |  |
| Equity (< $1 million)             | — |  | — |  | 1,973 |  | 1,973 |  |
| Total originations and advances      | $ | 8,079 |  | $ | 4,800 |  | $ | 4,844 |  | $ | 17,723 |  |

----

|                                                          |
|----------------------------------------------------------|
|                                                          |  |  |  |  |  |  |  |  |  |  |
|                                                     | Six months ended June 30, |
|                                                     | 2012 | 2011 |
| (dollars in thousands)                                   | Amount | % of Total | Amount | % of Total |
| Debt investments                                         |   |   |   |   |
|                                                     |   |   |   |   |
| Senior secured debt                                      | $ | 174,041 |  | 59.6 | % | $ | 166,020 |  | 54.0 | % |
| Subordinated debt                                        |   |   |   |   |
| Secured                                                  | 41,707 |  | 14.2 |  | 83,494 |  | 27.1 |  |
| Unsecured                                                | 12,189 |  | 4.2 |  | 228 |  | 0.1 |  |
| Total debt investments                                   | 227,937 |  | 78.0 |  | 249,742 |  | 81.2 |  |
| Equity investments                                       |   |   |   |   |
| Preferred equity                                         | 43,512 |  | 14.9 |  | 55,530 |  | 18.1 |  |
| Common/common equivalents equity                         | 20,597 |  | 7.1 |  | 2,124 |  | 0.7 |  |
| Total equity investments                                 | 64,109 |  | 22.0 |  | 57,654 |  | 18.8 |  |
| Total gross payments, reductions and sales of securities | $ | 292,046 |  | 100.0 | % | $ | 307,396 |  | 100.0 | % |

|                                                           |
|-----------------------------------------------------------|
|                                                           |  |  |  |  |  |  |
|                                                      | Six months ended June 30, |
| (in thousands)                                            | 2012 | 2011 |
| Principal repayments, reductions and loan sales           | $ | 197,171 |  | $ | 214,896 |  |
| Sale of equity investments                                | 56,264 |  | 45,600 |  |
| Scheduled principal amortization                          | 22,879 |  | 16,803 |  |
| Collection of accrued paid-in-kind interest and dividends | 15,732 |  | 30,097 |  |
| Total gross payments, reductions and sales of securities  | $ | 292,046 |  | $ | 307,396 |  |

----

|                                                                          |
|--------------------------------------------------------------------------|
|                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                     | Six months ended |
|                                                                     | June 30, 2012 |
| (in thousands)                                                           | Principal Repayments and Proceeds from Loan Sales | Sale or Settlement of Equity Investments | PIK Interest and Dividend Prepayments | Total |
| Monetizations                                                            |   |   |   |   |
| GSDM Holdings, Corp.                                                     | $ | 25,552 |  | $ | 6,105 |  | $ | 2,745 |  | $ | 34,402 |  |
| Stratford School Holdings, Inc.                                          | 17,500 |  | 16,370 |  | 171 |  | 34,041 |  |
| Orbitel Holdings, LLC                                                    | 17,775 |  | 12,934 |  | 2,929 |  | 33,638 |  |
| Coastal Sunbelt Holding, Inc.                                            | 27,411 |  | — |  | 1,288 |  | 28,699 |  |
| Jenzabar, Inc.                                                           | — |  | 20,542 |  | 3,158 |  | 23,700 |  |
| Qualawash Holdings, LLC                                                  | 20,000 |  | — |  | — |  | 20,000 |  |
| Xpressdocs Holdings, Inc.                                                | 17,855 |  | — |  | 707 |  | 18,562 |  |
| Haws Corporation                                                         | 16,500 |  | — |  | — |  | 16,500 |  |
| The Matrixx Group, Incorporated                                          | 12,500 |  | — |  | — |  | 12,500 |  |
| Service Champ, Inc.                                                      | 11,693 |  | — |  | 488 |  | 12,181 |  |
| Bentley Systems, Incorporated                                            | 9,900 |  | — |  | — |  | 9,900 |  |
| Focus Brands, Inc.                                                       | 9,235 |  | — |  | — |  | 9,235 |  |
| Sally Holdings LLC                                                       | 7,307 |  | — |  | — |  | 7,307 |  |
| Ozburn-Hessey Holding Company LLC                                        | 3,943 |  | — |  | — |  | 3,943 |  |
| Coastal Sunbelt Real Estate, Inc.                                        | — |  | 53 |  | — |  | 53 |  |
| Philadelphia Media Network, Inc.                                         | — |  | 44 |  | — |  | 44 |  |
| Total monetizations                                                      | 197,171 |  | 56,048 |  | 11,486 |  | 264,705 |  |
| Other scheduled payments                                                 | 22,879 |  | 216 |  | 4,246 |  | 27,341 |  |
| Total gross payments, sales and other reductions of investment portfolio | $ | 220,050 |  | $ | 56,264 |  | $ | 15,732 |  | $ | 292,046 |  |

|                   |
|-------------------|
|                   |  |
| Investment Rating | Summary Description |
| 1                 | Capital gain expected or realized |
| 2                 | Full return of principal and interest or dividend expected with customer performing in accordance with plan |
| 3                 | Full return of principal and interest or dividend expected, but customer requires closer monitoring |
| 4                 | Some loss of interest or dividend expected, but still expect an overall positive internal rate of return on the investment |
| 5                 | Loss of interest or dividend and some loss of principal investment expected, which would result in an overall negative internal rate of return on the investment |

----

|                        |
|------------------------|
|                        |  |  |  |  |  |  |  |  |  |  |
| (dollars in thousands) | June 30, 2012 | December 31, 2011 |
| Investment Rating      | Investments at Fair Value | % of Total Portfolio | Investments at Fair Value | % of Total  Portfolio |
| 1(a)                   | $ | 124,760 |  | 27.5 | % | $ | 283,755 |  | 38.3 | % |
| 2                      | 160,785 |  | 35.5 |  | 290,583 |  | 39.2 |  |
| 3                      | 161,984 |  | 35.7 |  | 142,639 |  | 19.2 |  |
| 4                      | 2,780 |  | 0.6 |  | 11,683 |  | 1.6 |  |
| 5                      | 3,162 |  | 0.7 |  | 12,506 |  | 1.7 |  |
| Total                  | $ | 453,471 |  | 100.0 | % | $ | 741,166 |  | 100.0 | % |

|           |                                                                                                                                                                                                                    |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)  | As of June 30, 2012 and December 31, 2011, Investment Rating “1” included $47.0 million and $109.1 million, respectively, of loans to companies in which we also hold equity securities. |

|                                           |
|-------------------------------------------|
|                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                      | COST BASIS | FAIR VALUE BASIS |
|                                      | June 30, 2012 | December 31, 2011 | June 30, 2012 | December 31, 2011 |
| (dollars in thousands)                    | Investments at Cost | % of Loan Portfolio | Investments at Cost | % of Loan Portfolio | Investments at Fair Value | % of Loan Portfolio | Investments at Fair Value | % of Loan Portfolio |
| Loans greater than 90 days past due       |   |   |   |   |   |   |   |
| On non-accrual status                     | $ | 13,963 |  | 3.17 | % | $ | 13,963 |  | 2.00 | % | $ | 11,843 |  | 2.84 | % | $ | 9,615 |  | 1.53 | % |
| Not on non-accrual status                 | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  |
| Total loans greater than 90 days past due | $ | 13,963 |  | 3.17 | % | $ | 13,963 |  | 2.00 | % | $ | 11,843 |  | 2.84 | % | $ | 9,615 |  | 1.53 | % |
| Loans on non-accrual status               |   |   |   |   |   |   |   |   |
| 0 to 90 days past due                     | $ | 11,420 |  | 2.60 | % | $ | 69,241 |  | 9.92 | % | $ | 597 |  | 0.15 | % | $ | 9,704 |  | 1.54 | % |
| Greater than 90 days past due             | 13,963 |  | 3.17 |  | 13,963 |  | 2.00 |  | 11,843 |  | 2.84 |  | 9,615 |  | 1.53 |  |
| Total loans on non-accrual status         | $ | 25,383 |  | 5.77 | % | $ | 83,204 |  | 11.92 | % | $ | 12,440 |  | 2.99 | % | $ | 19,319 |  | 3.07 | % |

----

|                                                                           |
|---------------------------------------------------------------------------|
|                                                                           |  |  |  |  |  |  |
|                                                                      | Six months ended |
|                                                                      | June 30, 2012 |
| (In thousands)                                                            | Cost | Fair Value |
| Non-accrual loan balance as of December 31, 2011                          | $ | 83,204 |  | $ | 19,319 |  |
| Payments received on loans on non-accrual status                          | (10,872 | ) | (10,872 | ) |
| Change in unrealized gain (loss) on non-accrual loans                     | — |  | 3,668 |  |
| Reversal of previously recognized unrealized loss on non-accrual loans(a) | — |  | 47,274 |  |
| Realized loss on non-accrual loans(a)                                     | (46,949 | ) | (46,949 | ) |
| Total change in non-accrual loans                                         | (57,821 | ) | (6,879 | ) |
| Non-accrual loan balance as of June 30, 2012                              | $ | 25,383 |  | $ | 12,440 |  |

|           |                                                                                                                                                                   |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)  | Represents the reversal of previously recognized unrealized loss and recognition of realized loss on non-accrual loans attributed to Jet Plastica Investors, LLC. |

|                                                                          |
|--------------------------------------------------------------------------|
|                                                                          |  |  |  |  |  |  |  |  |  |  |  |
|                                                                     | Three months ended |   |
|                                                                     | June 30, 2012 | Variance |
| (dollars in thousands)                                                   | 2012 | 2011 | $ | Percentage |
| Revenue                                                                  |   |   |   |   |
| Interest and dividend income                                             |   |   |   |   |
| Interest income                                                          | $ | 13,826 |  | $ | 17,153 |  | $ | (3,327 | ) | (19.4 | )% |
| Dividend income                                                          | 896 |  | 2,116 |  | (1,220 | ) | (57.7 | ) |
| Loan fees                                                                | 1,100 |  | 919 |  | 181 |  | 19.7 |  |
| Total interest and dividend income                                       | 15,822 |  | 20,188 |  | (4,366 | ) | (21.6 | ) |
| Advisory fees and other income                                           | 2,122 |  | 1,020 |  | 1,102 |  | 108.0 |  |
| Total revenue                                                            | 17,944 |  | 21,208 |  | (3,264 | ) | (15.4 | ) |
| Operating expenses                                                       |   |   |   |   |
| Interest expense                                                         | 4,552 |  | 3,945 |  | 607 |  | 15.4 |  |
| Employee compensation                                                    |  |  |  |  |   |   |
| Salaries and benefits                                                    | 2,791 |  | 2,908 |  | (117 | ) | (4.0 | ) |
| Amortization of employee restricted stock                                | 711 |  | 406 |  | 305 |  | 75.1 |  |
| Total employee compensation                                              | 3,502 |  | 3,314 |  | 188 |  | 5.7 |  |
| General and administrative expense                                       | 4,274 |  | 2,646 |  | 1,628 |  | 61.5 |  |
| Restructuring expense                                                    | 21 |  | 65 |  | (44 | ) | (67.7 | ) |
| Total operating expense                                                  | 12,349 |  | 9,970 |  | 2,379 |  | 23.9 |  |
| Net operating income before net investment loss and income tax provision | 5,595 |  | 11,238 |  | (5,643 | ) | (50.2 | ) |
| Net investment loss before income tax provision                          | (12,339 | ) | (21,448 | ) | 9,109 |  | (42.5 | ) |
| Income tax provision                                                     | 293 |  | 8 |  | 285 |  | NM |  |
| Net loss                                                                 | $ | (7,037 | ) | $ | (10,218 | ) | $ | 3,181 |  | (31.1 | ) |
| NM=Not Meaningful                                                        |   |   |   |   |

----

|                                                                         |
|-------------------------------------------------------------------------|
|                                                                         |  |  |  |  |
|                                                                    | Three months ended |
|                                                                    | June 30, 2012 |
|                                                                    | 2012 | 2011 |
| Average 90-day LIBOR                                                    | 0.5 |  % | 0.3 |  % |
| Spread to average LIBOR on average loan portfolio                       | 10.7 |  | 10.7 |  |
| Impact of fee accelerations of unearned fees on paid/restructured loans | 0.6 |  | 0.2 |  |
| Impact of non-accrual loans                                             | (0.3 | ) | (0.8 | ) |
| Total yield on average loan portfolio                                   | 11.5 |  % | 10.4 |  % |

|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |
|                                  | Three months ended, |
|                                  | June 30, |
| (in thousands)                        | 2012 | 2011 |
| Beginning PIK loan balance            | $ | 16,656 |  | $ | 26,162 |  |
| PIK interest earned during the period | 1,535 |  | 1,658 |  |
| Payments received from PIK loans      | (7,554 | ) | (12,264 | ) |
| Realized loss                         | (5,012 | ) | (277 | ) |
| Ending PIK loan balance               | $ | 5,625 |  | $ | 15,279 |  |

----

----

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                    |   | Three months ended June 30, 2012 |
| (in thousands)                          | Industry | Type | Realized Gain/(Loss) | Unrealized (Depreciation)/ Appreciation | Reversal of Unrealized Depreciation/ (Appreciation) | Net (Loss)/ Gain |
| Portfolio Company                       |
| Broadview Networks Holdings, Inc.       | Communications | Control | $ | — |  | $ | (8,917 | ) | $ | — |  | $ | (8,917 | ) |
| Cruz Bay Publishing, Inc.               | Publishing | Non-Affiliate | — |  | (3,355 | ) | — |  | (3,355 | ) |
| Miles Media Group, LLC                  | Business Services | Non-Affiliate | — |  | (1,602 | ) | — |  | (1,602 | ) |
| Jet Plastica Investors, LLC             | Plastic Products | Control | (90,802 | ) | (1,786 | ) | 91,288 |  | (1,300 | ) |
| Orbitel Holdings, LLC                   | Cable | Control | (2,066 | ) | — |  | 805 |  | (1,261 | ) |
| GSDM Holdings, LLC                      | Healthcare | Non-Affiliate | 1,576 |  | — |  | (1,976 | ) | (400 | ) |
| Intran Media, LLC                       | Other Media | Control | (4,250 | ) | — |  | 4,250 |  | — |  |
| Stratford School Holdings, Inc.         | Education | Affiliate | 16,370 |  | — |  | (13,056 | ) | 3,314 |  |
| NPS Holding Group, LLC                  | Business Services | Control | — |  | 1,330 |  | — |  | 1,330 |  |
| NDSSI Holdings, LLC                     | Electronics | Non-Affiliate | — |  | 1,002 |  | — |  | 1,002 |  |
| Philadelphia Media Network, Inc.        | Newspaper | Non-Affiliate | (5,027 | ) | — |  | 5,064 |  | 37 |  |
| Other (< $1 million net gain (loss)) |   |   | (153 | ) | (651 | ) | (383 | ) | (1,187 | ) |
| Total                                   |   |   | $ | (84,352 | ) | $ | (13,979 | ) | $ | 85,992 |  | $ | (12,339 | ) |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | In July 2012, Broadview agreed with certain of its noteholders and equityholders to solicit consents to file a pre-packaged chapter 11 plan of reorganization.  The holders of approximately 70% of Broadview’s outstanding preferred stock, including MCG, and approximately 66 2/3% of Broadview's $300 million 11 3/8% senior secured notes due in September 2012 have consented to vote for the plan, subject to the satisfaction of certain terms and conditions, which percentages would be sufficient to approve the plan.  The plan provides that upon effectiveness of the plan, Broadview's existing noteholders will exchange their notes for new Broadview common stock representing 97.5% of the common stock of the reorganized company and $150 million in principal amount of new 10 1/2 % senior secured notes due in July 2017, and existing stockholders, including MCG, will each receive a pro rata share of the remaining 2.5% of the common stock of the reorganized company and two tranches of eight-year warrants with exercise prices set at equity values that imply full recovery for existing noteholders.  As of June 30, 2012, our fair value estimate of our investment in Broadview reflects this potential restructuring if consummated on the contemplated terms.  |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | In April 2012, Jet Plastica Investors, LLC liquidated substantially all of its assets.  Including the proceeds from the liquidation, we received $11.0 million in payments on our senior debt and anticipate receiving additional payments on our senior debt upon future collection of certain accounts receivable, resulting in a $90.8 million realized loss and a $91.3 million reversal of unrealized depreciation in the second quarter of 2012. |

|         |                                                                                                                                                                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | In the second quarter of 2012, we received $34.0 million for the repayment of our debt and the sale of our equity investment in Stratford School Holdings, Inc., which resulted in a $16.4 million realized gain and a reversal of previously unrealized appreciation of $13.1 million. |

|         |                                                                                                                                                                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We also received $35.3 million for the repayment of our debt and the sale of our equity investment in Orbitel Holdings, LLC, which resulted in a $2.1 million realized loss and a reversal of previously unrealized depreciation of $0.8 million. |

|         |                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------|
| • | We received $34.7 million for the repayment of our debt and the sale of our equity investment in GSDM |

----

|         |                                                                                                                                                                                                                                                                             |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We also received $44,000 for our equity investment in Philadelphia Media Network, Inc. and wrote off part of our equity investment in Intran Media, LLC which resulted in realized losses and reversals of previously unrealized depreciation on those investments. |

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                    |   | Three months ended June 30, 2011 |
| (in thousands)                          | Industry | Type | Realized Gain/(Loss) | Unrealized (Depreciation)/ Appreciation | Reversal of Unrealized Depreciation/ (Appreciation) | Net (Loss)/ Gain |
| Portfolio Company                       |
| Broadview Networks Holdings, Inc.       | Communications | Control | $ | — |  | $ | (24,829 | ) | $ | — |  | $ | (24,829 | ) |
| Intran Media, LLC                       | Other Media | Control | — |  | (3,758 | ) | — |  | (3,758 | ) |
| PremierGarage Holdings, LLC             | Home Furnishings | Control | — |  | (2,141 | ) | — |  | (2,141 | ) |
| VOX Communications Group Holdings, LLC  | Broadcasting | Non-Affiliate | (7,688 | ) | — |  | 5,645 |  | (2,043 | ) |
| Jet Plastica Investors, LLC             | Plastic Products | Control | — |  | (1,274 | ) | — |  | (1,274 | ) |
| Restaurant Technologies, Inc.           | Food Services | Non-Affiliate | 1,527 |  | — |  | (1,842 | ) | (315 | ) |
| Provo Craft & Novelty, Inc.    | Leisure Activities | Non-Affiliate | (1,152 | ) | — |  | 1,151 |  | (1 | ) |
| Active Brands International, Inc.       | Consumer Products | Non-Affiliate | (12,052 | ) | — |  | 12,053 |  | 1 |  |
| GMC Television Broadcasting, LLC        | Broadcasting | Control | (1,000 | ) | 11 |  | 1,000 |  | 11 |  |
| Avenue Broadband LLC                    | Cable | Control | 11,917 |  | — |  | (11,895 | ) | 22 |  |
| Jenzabar, Inc.                          | Technology | Non-Affiliate | — |  | 1,531 |  | — |  | 1,531 |  |
| Coastal Sunbelt Real Estate, Inc.       | Real Estate Investments | Non-Affiliate | — |  | 2,186 |  | — |  | 2,186 |  |
| GSDM Holdings, LLC                      | Healthcare | Non-Affiliate | — |  | 2,479 |  | — |  | 2,479 |  |
| RadioPharmacy Investors, LLC            | Healthcare | Control | — |  | 2,727 |  | — |  | 2,727 |  |
| NPS Holding Group, LLC                  | Business Services | Control | — |  | 3,855 |  | — |  | 3,855 |  |
| Other (< $1 million net gain (loss)) |   |   | (58 | ) | (353 | ) | 512 |  | 101 |  |
| Total                                   |   |   | $ | (8,506 | ) | $ | (19,566 | ) | $ | 6,624 |  | $ | (21,448 | ) |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | During the quarter ended June 30, 2011, we recorded a $24.8 million decrease in the fair value of our investment in Broadview, our single largest portfolio investment at the time.  On June 21, 2011, Broadview withdrew its tender offer for $300 million of its 113/8% Senior Secured Notes, due in 2012, following Broadview's review of market conditions.  Due to these uncertain market conditions, we changed the methodology by which we valued Broadview to a trailing EBITDA basis as opposed to our prior methodology under which we valued our investment on a projected forward EBITDA basis and new owner cash flows. |

|         |                                                                                                                                                                                                          |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We also recorded unrealized depreciation on our investments in PremierGarage Holdings, LLC and Intran Media, LLC to reflect our portion of the estimated liquidation value of these portfolio companies. |

|         |                                                                                                                                                                                                                                                |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We also recorded unrealized depreciation on our investment in Jet Plastica Investors, LLC to reflect an incremental investment in this portfolio company during the quarter ended June 30, 2011, that we subsequently wrote down to zero. |

|         |                                                                                                                                                                                                                                                                                                                                                        |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We received payments of $4.1 million in satisfaction of our $11.8 million debt investment in VOX Communications Group Holdings, LLC and wrote off our remaining investment in that portfolio company. As a result of that transaction, we reversed $5.6 million of previously unrealized depreciation and realized a $7.7 million loss. |

----

|         |                                                                                                                                                                                                                                      |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We wrote off our remaining subordinated debt investment in Active Brands International, Inc. resulting in the reversal of $12.1 million of previously unrealized depreciation and the realization of a $12.1 million loss. |

|         |                                                                                                                                                                                         |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We sold our investment in Avenue Broadband LLC resulting in the reversal of $11.9 million of previously unrealized appreciation and the realization of an $11.9 million gain. |

|                                                                                                          |
|----------------------------------------------------------------------------------------------------------|
|                                                                                                          |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                     | Six months ended |   |
|                                                                                                     | June 30, 2012 | Variance |
| (dollars in thousands)                                                                                   | 2012 | 2011 | $ | Percentage |
| Revenue                                                                                                  |   |   |   |   |
| Interest and dividend income                                                                             |   |   |   |   |
| Interest income                                                                                          | $ | 29,422 |  | $ | 37,311 |  | $ | (7,889 | ) | (21.1 | )% |
| Dividend income                                                                                          | 1,974 |  | 4,613 |  | (2,639 | ) | (57.2 | ) |
| Loan fees                                                                                                | 1,722 |  | 1,700 |  | 22 |  | 1.3 |  |
| Total interest and dividend income                                                                       | 33,118 |  | 43,624 |  | (10,506 | ) | (24.1 | ) |
| Advisory fees and other income                                                                           | 2,385 |  | 1,887 |  | 498 |  | 26.4 |  |
| Total revenue                                                                                            | 35,503 |  | 45,511 |  | (10,008 | ) | (22.0 | ) |
| Operating expenses                                                                                       |   |   |   |   |
| Interest expense                                                                                         | 9,754 |  | 7,818 |  | 1,936 |  | 24.8 |  |
| Employee compensation                                                                                    |   |   |   |   |
| Salaries and benefits                                                                                    | 6,666 |  | 6,884 |  | (218 | ) | (3.2 | ) |
| Amortization of employee restricted stock                                                                | 1,189 |  | 1,030 |  | 159 |  | 15.4 |  |
| Total employee compensation                                                                              | 7,855 |  | 7,914 |  | (59 | ) | (0.7 | ) |
| General and administrative expense                                                                       | 8,210 |  | 5,473 |  | 2,737 |  | 50.0 |  |
| Restructuring expense                                                                                    | 47 |  | 65 |  | (18 | ) | (27.7 | ) |
| Total operating expense                                                                                  | 25,866 |  | 21,270 |  | 4,596 |  | 21.6 |  |
| Net operating income before net investment loss, loss on extinguishment of debt and income tax provision | 9,637 |  | 24,241 |  | (14,604 | ) | (60.2 | ) |
| Net investment loss before income tax provision                                                          | (14,832 | ) | (42,392 | ) | 27,560 |  | (65.0 | ) |
| Loss on extinguishment of debt before income tax provision                                               | (174 | ) | (863 | ) | 689 |  | (79.8 | ) |
| Income tax provision                                                                                     | 311 |  | 19 |  | 292 |  | NM |  |
| Net loss                                                                                                 | $ | (5,680 | ) | $ | (19,033 | ) | $ | 13,353 |  | (70.2 | ) |
| NM=Not Meaningful                                                                                        |   |   |   |   |

----

|                                                                         |
|-------------------------------------------------------------------------|
|                                                                         |  |  |  |  |
|                                                                    | Six months ended |
|                                                                    | June 30, 2012 |
|                                                                    | 2012 | 2011 |
| Average 90-day LIBOR                                                    | 0.5 |  % | 0.3 |  % |
| Spread to average LIBOR on average loan portfolio                       | 11.3 |  | 11.3 |  |
| Impact of fee accelerations of unearned fees on paid/restructured loans | 0.4 |  | 0.2 |  |
| Impact of non-accrual loans                                             | (1.0 | ) | (1.0 | ) |
| Total yield on average loan portfolio                                   | 11.2 |  % | 10.8 |  % |

|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |
|                                  | Six months ended, |
|                                  | June 30, 2012 |
| (in thousands)                        | 2012 | 2011 |
| Beginning PIK loan balance            | $ | 15,653 |  | $ | 30,923 |  |
| PIK interest earned during the period | 2,871 |  | 4,093 |  |
| Interest receivable converted to PIK  | — |  | 360 |  |
| Payments received from PIK loans      | (7,887 | ) | (18,044 | ) |
| PIK converted to other securities     | — |  | (876 | ) |
| Realized loss                         | (5,012 | ) | (1,177 | ) |
| Ending PIK loan balance               | $ | 5,625 |  | $ | 15,279 |  |

----

----

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                    |   | Six months ended June 30, 2012 |
| (in thousands)                          | Industry | Type | Realized Gain/(Loss) | Unrealized (Depreciation)/ Appreciation | Reversal of Unrealized Depreciation/ (Appreciation) | Net (Loss)/ Gain |
| Portfolio Company                       |
| Broadview Networks Holdings, Inc.       | Communications | Control | $ | — |  | $ | (9,680 | ) | $ | — |  | $ | (9,680 | ) |
| Cruz Bay Publishing, Inc.               | Publishing | Non-Affiliate | — |  | (3,355 | ) | — |  | (3,355 | ) |
| Orbitel Holdings, LLC                   | Cable | Control | (2,066 | ) | (1,966 | ) | 805 |  | (3,227 | ) |
| Miles Media Group, LLC                  | Business Services | Non-Affiliate | — |  | (3,177 | ) | — |  | (3,177 | ) |
| RadioPharmacy Investors, LLC            | Healthcare | Control | — |  | (2,723 | ) | — |  | (2,723 | ) |
| GSDM Holdings, LLC                      | Healthcare | Non-Affiliate | 1,576 |  | (849 | ) | (1,976 | ) | (1,249 | ) |
| Jenzabar, Inc.                          | Technology | Non-Affiliate | 16,370 |  | (1 | ) | (16,435 | ) | (66 | ) |
| Intran Media, LLC                       | Other Media | Control | (4,250 | ) | — |  | 4,250 |  | — |  |
| Stratford School Holdings, Inc.         | Education | Affiliate | 16,370 |  | (99 | ) | (13,056 | ) | 3,215 |  |
| NPS Holding Group, LLC                  | Business Services | Control | — |  | 2,228 |  | — |  | 2,228 |  |
| Jet Plastica Investors, LLC             | Plastic Products | Control | (90,802 | ) | 1,389 |  | 91,288 |  | 1,875 |  |
| Philadelphia Media Network, Inc.        | Newspaper | Non-Affiliate | (5,027 | ) | (1 | ) | 5,064 |  | 36 |  |
| Other (< $1 million net gain (loss)) |   |   | (145 | ) | 1,899 |  | (463 | ) | 1,291 |  |
| Total                                   |   |   | $ | (67,974 | ) | $ | (16,335 | ) | $ | 69,477 |  | $ | (14,832 | ) |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | In July 2012, Broadview agreed with certain of its noteholders and equityholders to solicit consents to file a pre-packaged chapter 11 plan of reorganization.  The holders of approximately 70% of Broadview’s outstanding preferred stock, including MCG, and approximately 66 2/3% of Broadview's $300 million 11 3/8% senior secured notes due in September 2012 have consented to vote for the plan, subject to the satisfaction of certain terms and conditions, which percentages would be sufficient to approve the plan.  The plan provides that upon effectiveness of the plan, Broadview's existing noteholders will exchange their notes for new Broadview common stock representing 97.5% of the common stock of the reorganized company and $150 million in principal amount of new 10 1/2 % senior secured notes due in July 2017, and existing stockholders, including MCG, will each receive a pro rata share of the remaining 2.5% of the common stock of the reorganized company and two tranches of eight-year warrants with exercise prices set at equity values that imply full recovery for existing noteholders.  As of June 30, 2012, our fair value estimate of our investment in Broadview reflects this potential restructuring if consummated on the contemplated terms. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | In April 2012, Jet Plastica Investors, LLC liquidated substantially all of its assets.  Including the proceeds from the liquidation, we received $11.0 million in payments on our senior debt and anticipate receiving additional payments on our senior debt upon future collection of certain accounts receivable, resulting in a $90.8 million realized loss and a $91.3 million reversal of unrealized depreciation in the second quarter of 2012. |

|         |                                                                                                                                                                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | In the second quarter of 2012, we received $34.0 million for the repayment of our debt and the sale of our equity investment in Stratford School Holdings, Inc., which resulted in a $16.4 million realized gain and a reversal of previously unrealized appreciation of $13.1 million. |

|         |                                                                                                                                                                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We also received $35.3 million for the repayment of our debt and the sale of our equity investment in Orbitel Holdings, LLC, which resulted in a $2.1 million realized loss and a reversal of previously unrealized depreciation of $0.8 million. |

|         |                                                                                                                                                                                                                                               |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We received $34.7 million for the repayment of our debt and the sale of our equity investment in GSDM Holdings, LLC, which resulted in a $1.6 million realized gain and a reversal of previously unrealized appreciation of $2.0 million. |

----

|         |                                                                                                                                                                                                                                                                             |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We also received $44,000 for our equity investment in Philadelphia Media Network, Inc. and wrote off part of our equity investment in Intran Media, LLC which resulted in realized losses and reversals of previously unrealized depreciation on those investments. |

|         |                                                                                                                                                                                                                                                                            |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | In February 2012, we accepted $23.7 million for our senior preferred stock and warrant position in Jenzabar, Inc., or Jenzabar, which resulted in a $16.4 million reversal of previously unrealized appreciation and the realization of a $16.4 million gain. |

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                    |   | Six months ended June 30, 2011 |
| (in thousands)                          | Industry | Type | Realized Gain/(Loss) | Unrealized (Depreciation)/ Appreciation | Reversal of Unrealized Depreciation/ (Appreciation) | Net (Loss)/ Gain |
| Portfolio Company                       |
| Broadview Networks Holdings, Inc.       | Communications | Control | $ | — |  | $ | (49,118 | ) | $ | — |  | $ | (49,118 | ) |
| PremierGarage Holdings, LLC             | Home Furnishings | Control | — |  | (5,422 | ) | — |  | (5,422 | ) |
| Intran Media, LLC                       | Other Media | Control | — |  | (4,528 | ) | — |  | (4,528 | ) |
| VOX Communications                      | Broadcasting | Non-Affiliate | (7,688 | ) | — |  | 5,645 |  | (2,043 | ) |
| Superior Industries Investors, Inc.     | Sporting Goods | Control | 988 |  | — |  | (2,788 | ) | (1,800 | ) |
| Provo Craft & Novelty, Inc.    | Leisure Activities | Non-Affiliate | (1,152 | ) | (1,160 | ) | 1,151 |  | (1,161 | ) |
| Jet Plastica Investors, LLC             | Plastic Products | Control | — |  | (1,274 | ) | — |  | (1,274 | ) |
| NDSSI Holdings, LLC                     | Electronics | Non-Affiliate | — |  | (1,000 | ) | — |  | (1,000 | ) |
| Avenue Broadband LLC                    | Cable | Control | 11,917 |  | (325 | ) | (11,895 | ) | (303 | ) |
| GMC Television Broadcasting, LLC        | Broadcasting | Control | (1,000 | ) | (47 | ) | 1,000 |  | (47 | ) |
| Active Brands International, Inc.       | Consumer Products | Non-Affiliate | (39,706 | ) | — |  | 39,829 |  | 123 |  |
| Restaurant Technologies, Inc.           | Food Services | Non-Affiliate | 1,527 |  | 1,429 |  | (1,842 | ) | 1,114 |  |
| Cruz Bay Publishing, Inc.               | Publishing | Non-Affiliate | — |  | 1,748 |  | — |  | 1,748 |  |
| Coastal Sunbelt Real Estate, Inc.       | Real Estate Investments | Non-Affiliate | — |  | 2,313 |  | — |  | 2,313 |  |
| GSDM Holdings, LLC, Inc.                | Healthcare | Non-Affiliate | — |  | 2,554 |  | — |  | 2,554 |  |
| NPS Holding Group, LLC                  | Business Services | Control | — |  | 3,561 |  | — |  | 3,561 |  |
| RadioPharmacy Investors, LLC            | Healthcare | Control | — |  | 7,579 |  | — |  | 7,579 |  |
| Other (< $1 million net gain (loss)) |   |   | (1,019 | ) | 5,025 |  | 1,306 |  | 5,312 |  |
| Total                                   |   |   | $ | (36,133 | ) | $ | (38,665 | ) | $ | 32,406 |  | $ | (42,392 | ) |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | During the six months ended June 30, 2011, we recorded a $49.1 million decrease in the fair value of our investment in Broadview.  On June 21, 2011, Broadview withdrew its tender offer for $300 million of its 113/8% Senior Secured Notes, due in 2012, following Broadview's review of market conditions. Due to these uncertain market conditions, we changed the methodology by which we valued Broadview to a trailing EBITDA basis as opposed to our prior methodology under which we valued our investment on a projected forward EBITDA basis and new owner cash flows. |

|         |                                                                                                                                                                                                                       |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We also recorded unrealized depreciation in our investments in PremierGarage and Intran during the six months ended June 30, 2011, to reflect our portion of the estimated liquidation value of those companies. |

|         |                                                                                                                                                                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We also recorded unrealized depreciation on our investment in Jet Plastica to reflect an incremental investment that we made in this investment in this portfolio company during the six months ended June 30, 2011, that we subsequently wrote down to zero. |

|         |                                                                                                                                                                                                                                                                                                                  |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We received payments of $2.1 million on the sale of Active Brands' senior debt and wrote off our subordinated debt and equity investment in that portfolio company, which resulted in the reversal of $39.8 million of previously unrealized depreciation and the realization of a $39.7 million loss. |

----

|         |                                                                                                                                                                                                                                                                                                               |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We received payments of $4.1 million in satisfaction of our $11.8 million debt investment in VOX and wrote off our remaining investment in that portfolio company, which resulted in the reversal of $5.6 million of previously unrealized depreciation and the realization of a $7.7 million loss. |

|         |                                                                                                                                                                                          |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We sold our investment in Avenue Broadband, which resulted in the reversal of $11.9 million of previously unrealized appreciation and the realization of a $11.9 million gain. |

|         |                                                                                                                                                                                                                                                                                                  |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We sold our investment in Superior Industries Investors, Inc., which resulted in the reversal of $2.8 million of previously unrealized appreciation and the realization of a $1.0 million gain, including $1.8 million of transaction costs that we recorded at the time of sale. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Cash and cash equivalents represents unrestricted cash, including checking accounts, interest bearing deposits collateralized by marketable debt securities and highly liquid investments with original maturities of 90 days or less.  As of June 30, 2012 and December 31, 2011, we had $79.9 million and $58.6 million, respectively, in cash and cash equivalents.  As of June 30, 2012, our cash and cash equivalents included $27.4 million that was held in interest-bearing accounts. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Cash, securitization accounts include principal and interest payments received on securitized loans, which, are held in designated bank accounts until monthly or quarterly disbursements are made from the securitization trusts.  We are generally required to use a portion of these amounts to pay interest expense, reduce borrowings or pay other amounts in accordance with the related securitization agreements.  Cash in securitization accounts has a negative impact on our earnings since the interest we pay on borrowings typically exceeds the rate of return that we are able to earn on temporary cash investments.  Our objective is to maintain sufficient cash-on-hand and availability under our debt facilities to cover current funding requirements.  As of June 30, 2012 and December 31, 2011, we had $78.0 million and $40.3 million, respectively, in cash, securitization accounts. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Cash, restricted includes cash held for regulatory purposes and cash held in escrow.  The largest component of restricted cash was represented by cash held by Solutions Capital I, L.P.,or Solutions Capital,  a wholly owned subsidiary licensed as an SBIC under the SBIC Act, which generally is restricted to the origination of new loans from Solutions Capital.  As of June 30, 2012 and December 31, 2011, we had $130.9 million and $35.0 million respectively, of restricted cash. |

----

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | June 30, 2012 | December 31, 2011 |
| (dollars in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Maturity Date | Total Facility/ Program | Amount Outstanding | Total Facility/ Program | Amount Outstanding |
| SBIC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |
| 2008-10B                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | September 2018 | $ | 2,600 |  | $ | 2,600 |  | $ | 2,600 |  | $ | 2,600 |  |
| 2009-10A                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | March 2019 | 12,000 |  | 12,000 |  | 12,000 |  | 12,000 |  |
| 2009-10B                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | September 2019 | 13,000 |  | 13,000 |  | 13,000 |  | 13,000 |  |
| 2010-10B                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | September 2020 | 27,500 |  | 27,500 |  | 27,500 |  | 27,500 |  |
| 2011-10A                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | March 2021 | 53,500 |  | 53,500 |  | 53,500 |  | 53,500 |  |
| 2012-10A                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | March 2022 | 41,400 |  | 41,400 |  | 41,400 |  | 20,000 |  |
| Commercial Loan Trust 2006-1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |  |  |  |  |   |   |
| Series 2006-1 Class A-1 Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | April 2018(a) | 37,966 |  | 37,966 |  | 63,389 |  | 63,389 |  |
| Series 2006-1 Class A-2 Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | April 2018(a) | 1,787 |  | 1,787 |  | 2,983 |  | 2,983 |  |
| Series 2006-1 Class A-3 Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | April 2018(a) | 30,373 |  | 30,373 |  | 50,711 |  | 50,711 |  |
| Series 2006-1 Class B Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | April 2018(a) | 58,750 |  | 58,750 |  | 58,750 |  | 58,750 |  |
| Series 2006-1 Class C Notes(b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | April 2018(a) | 45,000 |  | 32,000 |  | 45,000 |  | 32,000 |  |
| Series 2006-1 Class D Notes(c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | April 2018(a) | 45,945 |  | 28,902 |  | 46,494 |  | 29,247 |  |
| Commercial Loan Funding Trust                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |  |  |  |  |   |   |
| Variable Funding Note                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | January 2014(d) | — |  | — |  | 150,000 |  | 55,822 |  |
| Private Placement Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |  |  |  |  |   |   |
| Series 2007-A                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | October 2011 | — |  | — |  | 8,717 |  | 8,717 |  |
| Total borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | $ | 369,821 |  | $ | 339,778 |  | $ | 576,044 |  | $ | 430,219 |  |
|     (a)    Borrowings under the Commercial Loan Trust 2006-1 facility are listed based on the contractual maturity date.  The reinvestment period for this facility ended on July 20, 2011 and we will use all future principal collections from collateral in the facility to repay the securitized debt.  On July 20, 2012, we used $90.7 million of securitized cash to repay in full the Class A-1, A-2 and A-3 notes and partially repay the Class B notes. |
| (b)    Amount outstanding excludes $5.0 million of notes that we repurchased in December 2008 for $1.6 million and $8.0 million of notes that we repurchased in April 2010 for $4.4 million.  As part of the consolidation process, we eliminated the notes that MCG, the parent company, purchased.                                                                                                                                                                                           |
| (c)    Amount outstanding excludes $10.1 million of notes that we repurchased in December 2008 for $2.4 million and $7.5 million of notes that we repurchased in January 2009 for $2.1 million.  As part of the consolidation process, we eliminated the notes that MCG, the parent company, purchased.                                                                                                                                                                                        |
| (d)    On May 15, 2012, this facility was repaid in full and terminated.                                                                                                                                                                                                                                                                                                                                                                                                                       |

----

|                                     |
|-------------------------------------|
|                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                | Maturities |
| (in thousands)                      | Total | Less than 1 year | 1-3 years | 4-5 years | After 5 years |
| Borrowings                          | $ | 150,000 |  | $ | — |  | $ | — |  | $ | — |  | $ | 150,000 |  |
| Collateral                          |   |   |   |   |   |
| Fair value of debt investments      | 112,747 |  | — |  | 3,475 |  | 101,303 |  | 7,969 |  |
| Fair value of equity investments(a) | 3,357 |  | — |  | — |  | — |  | 3,357 |  |
| Cash, restricted account            | 124,470 |  | 124,470 |  | — |  | — |  | — |  |
| Total collateral                    | $ | 240,574 |  | $ | 124,470 |  | $ | 3,475 |  | $ | 101,303 |  | $ | 11,326 |  |

----

|                                     |
|-------------------------------------|
|                                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                | Maturities |
| (in thousands)                      | Total | Less than 1 year | 1-3 years | 4-5 years | After 5 years |
| Borrowings(a)                       | $ | 189,778 |  | $ | 90,725 |  | $ | — |  | $ | — |  | $ | 99,053 |  |
| Collateral                          |   |   |   |   |   |
| Fair value of debt investments      | 200,052 |  | 12,419 |  | 41,385 |  | 135,085 |  | 11,163 |  |
| Fair value of equity investments(b) | 419 |  | — |  | — |  | — |  | 419 |  |
| Cash, securitization account        | 77,995 |  | 77,995 |  | — |  | — |  | — |  |
| Total collateral                    | $ | 278,466 |  | $ | 90,414 |  | $ | 41,385 |  | $ | 135,085 |  | $ | 11,582 |  |

|           |                                                                                                                                                                                                                                                                                                                           |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a)  | Borrowings under the Commercial Loan Trust 2006-1 facility are listed based on the contractual maturity date.  The reinvestment period for this facility ended on July 20, 2011 and all future principal collections from collateral in the facility have been and will be used to repay the securitized debt.  |

|           |                                                        |
|-----------|--------------------------------------------------------|
| (b)  | Equity investments do not have a stated maturity date. |

|                                                                                 |
|---------------------------------------------------------------------------------|
|                                                                                 |  |  |  |  |  |  |
|                                                                            | For the six months ended |
| (dollars in thousands)                                                          | June 30, 2012 | June 30, 2011 |
| Weighted-average borrowings                                                     | $ | 390,978 |  | $ | 534,226 |  |
| Average LIBOR                                                                   | 0.49 | % | 0.29 | % |
| Average spread to LIBOR, excluding amortization of deferred debt issuance costs | 2.19 |  | 2.18 |  |
| Impact of amortization of deferred debt issuance costs                          | 2.28 |  | 0.44 |  |
| Total cost of funds                                                             | 4.96 | % | 2.91 | % |

----

----

|                                    |
|------------------------------------|
|                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in thousands)                     | Payments Due by Period |
| Contractual Obligations(a)         | Total | Less than 1 year | 1-3 years | 4-5 years | After 5 years |
| Borrowings                         |   |   |   |   |   |
| Term securitizations(b)            | $ | 189,778 |  | $ | 90,725 |  | $ | — |  | $ | — |  | $ | 99,053 |  |
| SBIC                               | 150,000 |  | — |  | — |  | — |  | 150,000 |  |
| Total borrowings                   | 339,778 |  | 90,725 |  | — |  | — |  | 249,053 |  |
| Interest payments on borrowings(c) | 68,233 |  | 8,593 |  | 16,774 |  | 16,774 |  | 26,092 |  |
| Operating leases                   | 1,466 |  | 1,451 |  | 15 |  | — |  | — |  |
| Severance obligations(d)           | 3,715 |  | 3,114 |  | 601 |  | — |  | — |  |
| Total contractual obligations      | $ | 413,192 |  | $ | 103,883 |  | $ | 17,390 |  | $ | 16,774 |  | $ | 275,145 |  |

|           |                                                                                                            |
|-----------|------------------------------------------------------------------------------------------------------------|
| (a)  | Excludes the unused commitments to extend credit to our customers of $10.8 million as discussed above. |

|           |                                                                                                                                                                                                                                                                                                                           |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b)  | Borrowings under the Commercial Loan Trust 2006-1 facility are listed based on the contractual maturity date.  The reinvestment period for this facility ended on July 20, 2011 and all future principal collections from collateral in the facility have been and will be used to repay the securitized debt.  |

|           |                                                                                                                                                                        |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (c)  | Interest payments are based on contractual maturity and the current outstanding principal balance of our borrowings and assume no changes in interest rate benchmarks. |

|           |                                                                                                                                                                                                                                                                                                                       |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (d)  | Represents remaining severance payments, benefits, deferred compensation and employer taxes that we are obligated to pay to employees who were terminated as a result of the corporate restructuring effected in August 2011 and for obligations stemming from the resignation of our former chief executive officer. |

|                    |
|--------------------|
|                    |  |  |  |  |  |
| Date Declared      | Record Date | Payable Date | Dividends per Share |
| July 27, 2012 | August 17, 2012 | August 31, 2012 | $ | 0.14 |  |
| April 27, 2012     | June 13, 2012 | July 13, 2012 | $ | 0.14 |  |
| February 24, 2012  | April 13, 2012 | May 15, 2012 | $ | 0.17 |  |
| October 31, 2011   | December 15, 2011 | January 13, 2012 | $ | 0.17 |  |
| August 1, 2011     | September 14, 2011 | October 14, 2011 | $ | 0.17 |  |
| May 5, 2011        | June 15, 2011 | July 15, 2011 | $ | 0.17 |  |
| March 1, 2011      | March 15, 2011 | April 15, 2011 | $ | 0.15 |  |
| November 2, 2010   | December 9, 2010 | January 6, 2011 | $ | 0.14 |  |
| August 3, 2010     | September 7, 2010 | October 4, 2010 | $ | 0.12 |  |
| April 29, 2010     | June 2, 2010 | July 2, 2010 | $ | 0.11 |  |

----

|                              |
|------------------------------|
|                              |  |
| ASC 820 Fair Value Hierarchy | Inputs to Fair Value Methodology |
| Level 1                      | Quoted prices in active markets for identical assets or liabilities |
| Level 2                      | Quoted prices for similar assets or liabilities; quoted markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the financial instrument; inputs other than quoted prices that are observable for the asset or liability; or inputs that are derived principally from, or corroborated by, observable market information |
| Level 3                      | Pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption is unobservable or when the estimation of fair value requires significant management judgment |

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|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Majority-Owned Control Investments—Majority-owned control investments comprise 10.9% of our investment portfolio.  Market quotations are not readily available for these investments; therefore, we use a combination of market and income approaches to determine their fair value.  Typically, private companies are bought and sold based on multiples of EBITDA, cash flows, net income, revenues or, in limited cases, book value.  Generally, we apply multiples that we observe for other comparable companies to relevant financial data for the portfolio company.  Also, in a limited number of cases, we use income approaches to determine the fair value of these securities, based on our projections of the discounted future free cash flows that the portfolio company will likely generate, as well as industry derived capital costs.  Our valuation approaches for majority-owned investments estimate the value were we to sell or exit the investment.  These valuation approaches consider the value of our ability to control the portfolio company’s capital structure and the timing of a potential exit. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Non-Majority-Owned Control Investments—Non-majority owned control investments comprise 2.6% of our investment portfolio.  For our non-majority owned control equity investments, we use the same market and income valuation approaches used to value our majority-owned control investments.  For non-majority-owned control debt investments, we estimate fair value using the market yield approach based on the expected future cash flows discounted at the loans’ effective interest rates, based on our estimate of current market rates.  We may adjust discounted cash flow calculations to reflect other market conditions or the perceived credit risk of the borrower. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Non-Control Investments—Non-control investments comprise 86.5% of our investment portfolio.  Quoted prices are not available for 80.6% of our non-control investments.  For our non-control equity investments, we use the same market and income approaches used to value our control investments.  For non-control debt investments for which no quoted prices are available, we estimate fair value using a market-yield approach based on the expected future cash flows discounted at the loans’ effective interest rates, based on our estimate of current market rates.  We may adjust discounted cash flow calculations to reflect other market conditions or the perceived credit risk of the borrower. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Thinly Traded and Over-the-Counter Securities—Generally, we value securities that are traded in the over-the-counter market or on a stock exchange at the average of the prevailing bid and ask prices on the date of the relevant period end.  However, we may apply a discount to the market value of restricted or thinly traded public securities to reflect the impact that these restrictions have on the value of these securities.  We review factors including the trading volume, total securities outstanding and our percentage ownership of securities to determine whether the trading levels are active (Level 1) or inactive (Level 2).  As of June 30, 2012, these securities represented 16.8% of our investment portfolio.  We utilize independent pricing services with certain of our fair value estimates.  The majority of our level 2 investments are senior debt investments that are secured and |

----

----

|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |
| ($ in thousands)            | Fair Value | Valuation Techniques | Unobservable Inputs | Range |
|                        | Minimum | Maximum |
| Senior debt                 | $ | 254,251 |  | Discounted cash flow | Market interest rate | 7.0 | % | 13.0 | % |
|                             |  |  | Discounted cash flow | Discount rate | 7.5 | % | 7.5 | % |
|                             |  |  | Market comparable companies | EBITDA multiple(a) | 5.0x |  | 7.5x |  |
|                             |  |  | Pending transactions/Letters of intent | Discount | — | % | — | % |
| Subordinated debt           | 88,503 |  | Discounted cash flow | Market interest rate | 10.3 | % | 15.5 | % |
|                             |  |  | Market comparable companies | EBITDA multiple(a) | 6.8x |  | 7.5x |  |
|                             |  |  | Pending transactions/Letters of intent | Discount | — | % | — | % |
| Preferred and common equity | 34,439 |  | Market comparable companies | EBITDA multiple(a) | 4.4x |  | 9.0x |  |
|                             |  |  |  | Discount for minority interest | — | % | 25.0 | % |
|                             |  |  | Pending transactions/Letters of intent | Discount | — | % | — | % |
|                             |  |  | Residual assets | Discount | — | % | 25.0 | % |
|                        | $ | 377,193 |  |   |   |   |   |

|           |                                                                                                                           |
|-----------|---------------------------------------------------------------------------------------------------------------------------|
| (a)  | EBITDA may include proforma adjustments and/or other addbacks based on specific circumstances related to each investment. |

----

|                   |
|-------------------|
|                   |  |  |  |  |  |  |  |  |  |  |  |  |
|              | June 30, 2012 | December 31, 2011 |
| (in thousands)    | Interest Bearing Cash and Commercial Loans | Borrowings | Interest Bearing Cash and Commercial Loans | Borrowings |
| Money market rate | $ | 27,387 |  | $ | — |  | $ | 51,211 |  | $ | — |  |
| Prime rate        | 32,512 |  | — |  | 27,867 |  | — |  |
| LIBOR             |   |   |   |   |
| 30-day            | 18,795 |  | — |  | 71,794 |  | — |  |
| 60-day            | — |  | — |  | 12,500 |  | — |  |
| 90-day            | 318,112 |  | 189,778 |  | 462,293 |  | 237,080 |  |
| 180-day           | 9,291 |  | — |  | 14,038 |  | — |  |
| Commercial paper  | — |  | — |  | — |  | 55,822 |  |
| Fixed rate        | 61,465 |  | 150,000 |  | 109,640 |  | 137,317 |  |
| Total             | $ | 467,562 |  | $ | 339,778 |  | $ | 749,343 |  | $ | 430,219 |  |

|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |  |
| (dollars in thousands)  Basis Point Change | Interest Income | Interest Expense | Net Income (Loss) |
| 100                                                  | $ | 1,476 |  | $ | 1,898 |  | $ | (422 | ) |
| 200                                                  | 5,987 |  | 3,796 |  | 2,191 |  |
| 300                                                  | 11,491 |  | 5,693 |  | 5,798 |  |

----

----

----

----

|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |  |  |  |  |  |
| Period/Purpose                        | Total number  of shares | Average Price Paid per Share |   | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs |
| April 1 – 30, 2012              |   |   |   |   |   |
| Restricted stock vesting(a)           | 822 |  | $ | 4.19 |  | (b)  | n/a |  | n/a |  |
| May 1 – 31, 2012                |   |   |   |   |   |
| Stock repurchase program(c)           | 1,340,000 |  | $ | 4.25 |  |   | 1,340,000 |  | $ | 24,214,207 |  |
| Restricted stock vesting(a)           | 8,674 |  | $ | 4.30 |  | (b)  | n/a |  | n/a |  |
| Dividend reinvestment requirements(d) | 1,894 |  | $ | 4.33 |  | (e)  | n/a |  | n/a |  |
| Total May 1 – 31, 2012          | 1,350,568 |  | $ | 4.25 |  |   | 1,340,000 |  | $ | 24,214,207 |  |
| June 1 – 30, 2012               |   |   |   |   |   |
| Stock repurchase program(c)           | 1,347,476 |  | $ | 4.46 |  |   | 1,347,479 |  | $ | 18,203,255 |  |
| Restricted stock vesting(a)           | 5,899 |  | $ | 4.58 |  | (b)  | n/a |  | n/a |  |
| Total June 1 – 30, 2012         | 1,353,375 |  | $ | 4.46 |  |   | 1,347,479 |  | $ | 18,203,255 |  |
| Total                                 | 2,704,765 |  | $ | 4.36 |  |   | 2,687,479 |  | $ | 18,203,255 |  |

|     |                                                                                                                                                                                                    |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a) | Represents shares repurchased from our employees in connection with the net issuance of shares to satisfy employee tax withholding obligations in connection with the vesting of restricted stock. |

|     |                                                                                                                              |
|-----|------------------------------------------------------------------------------------------------------------------------------|
| (b) | Based on the weighted-average closing share prices of our common stock on the dates that the forfeiture restrictions lapsed. |

|     |                                                                                                                                      |
|-----|--------------------------------------------------------------------------------------------------------------------------------------|
| (c) | On January 17, 2012, we announced that our board of directors had authorized a stock repurchase program of up to $35.0 million. |

|     |                                                                                          |
|-----|------------------------------------------------------------------------------------------|
| (d) | Represents stock purchased on the open market to satisfy dividend reinvestment requests. |

|     |                                                                                                                                                                |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (e) | Represents the weighted-average purchase price per share, including commissions, for shares purchased pursuant to the terms of our dividend reinvestment plan. |

----

|             |
|-------------|
|             |  |  |  |  |  |
|        |   | Incorporated by Reference |   |
| Exhibit No. | Description | Form and SEC File No. | Filing Date with SEC | Exhibit No. | Filed with this 10-Q |
| 10.1        | Amendment No. 2 to MCG Capital Corporation Severance Pay Plan |   |   |   | * |
| 15.1        | Letter regarding unaudited interim financial information from Ernst & Young LLP, independent registered public accounting firm |   |   |   | * |
| 31.1        | Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |   |   |   | * |
| 31.2        | Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |   |   |   | * |
| 32.1        | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |   |   |   | † |
| 32.2        | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |   |   |   | † |
| *           | Filed herewith. |   |   |   |   |
| †     | Furnished herewith. |   |   |   |   |

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|        |
|--------|
|        |  |  |  |
|   |   |   | MCG Capital Corporation |
|   |   |   |   |
| Date:  | July 31, 2012 | By: | /s/ RICHARD W. NEU |
|   |   |   | Richard W. Neu |
|   |   |   | Chief Executive Officer(Principal Executive Officer) |
|   |   |   |   |
| Date:  | July 31, 2012 | By: | /s/ KEITH KENNEDY |
|   |   |   | Keith Kennedy |
|   |   |   | Chief Financial Officer (Principal Financial and Accounting Officer) |