##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2011
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 814-00862
 Fidus Mezzanine Capital, L.P.
 (Exact name of registrant as specified in its charter)
 Delaware(State or other jurisdiction of incorporation or organization)
    
    20-8435835(I.R.S. Employer Identification No.)
 1603 Orrington Avenue, Suite 820
Evanston, Illinois, 60201  (Address and zip code of principal executive offices)
 (847) 859-3940  (Registrants telephone number, including area code)
 o þ
 o o
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer þ(Do not check if a smaller reporting company)
Smaller reporting company o o þ




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##### 



FIDUS MEZZANINE CAPITAL, L.P.
TABLE OF CONTENTS
QUARTERLY REPORT ON FORM 10-Q
 FIDUS INVESTMENT CORPORATION
TABLE OF CONTENTS
QUARTERLY REPORT ON FORM 10-Q
 PART I  FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    2Consolidated Statements of Assets and Liabilities  June 30, 2011 (unaudited) and December 31, 2010
    
    
    2Consolidated Statements of Operations  Three and Six Months Ended June 30, 2011 (unaudited) and 2010 (unaudited)
    
    
    3Consolidated Statements of Changes in Net Assets Six Months Ended June 30, 2011 (unaudited) and 2010 (unaudited)
    
    
    4Consolidated Statements of Cash Flows  Six Months Ended June 30, 2011 (unaudited) and 2010 (unaudited)
    
    
    5Consolidated Schedule of Investments  June 30, 2011 (unaudited) and December 31, 2010
    
    
    6Notes to Consolidated Financial Statements (unaudited)
    
    
    10Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    19Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    27Item 4. Controls and Procedures
    
    
    27PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    27Item 1A. Risk Factors
    
    
    27Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    27Item 3. Defaults Upon Senior Securities
    
    
    28Item 4. [Removed and Reserved]
    
    
    28Item 5. Other Information
    
    
    28Item 6. Exhibits
    
    
    29Signatures
    
    
    30Exhibit List
    
    
    31EX-31.1EX-31.2EX-32.1




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 FIDUS MEZZANINE CAPITAL, L.P.
Consolidated Statements of Assets and Liabilities
 June 30,2011
    
    
    December 31,(unaudited)
    
    
    2010ASSETSInvestments, at fair valueControl investments (cost: $28,240,386 and $26,985,897, respectively)
    
    $
    35,069,872
    
    
    $
    29,419,402Affiliate investments (cost: $29,684,777 and $24,413,389, respectively)
    
    
    30,947,477
    
    
    
    26,860,320Non-control/non-affiliate investments (cost: $96,359,928 and $93,907,155, respectively)
    
    
    94,688,439
    
    
    
    85,061,756Total investments at fair value (cost: $154,285,091 and $145,306,441, respectively)
    
    
    160,705,788
    
    
    
    141,341,478Cash and cash equivalents
    
    
    19,130,050
    
    
    
    1,757,139Interest receivable
    
    
    2,467,612
    
    
    
    1,141,357Deferred financing costs (net of accumulated amortization of $952,457 and $812,118, respectively)
    
    
    2,693,731
    
    
    
    2,795,257Prepaid expenses and other assets
    
    
    282,696
    
    
    
    341,558Total assets
    
    $
    185,279,877
    
    
    $
    147,376,789LIABILITIESSBA debentures
    
    $
    96,750,000
    
    
    $
    93,500,000Accrued interest payable
    
    
    1,690,960
    
    
    
    1,638,862Due to affiliates
    
    
    83,561
    
    
    
    958Accounts payable and other liabilities
    
    
    165,351
    
    
    
    232,305Total liabilities
    
    
    98,689,872
    
    
    
    95,372,125NET ASSETSPartners capital
    
    
    86,590,005
    
    
    
    52,004,664Total net assets
    
    
    86,590,005
    
    
    
    52,004,664Total liabilities and net assets
    
    $
    185,279,877
    
    
    $
    147,376,789
 See Notes to Consolidated Financial Statements (unaudited).
 2




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##### Table of Contents



FIDUS MEZZANINE CAPITAL, L.P.
Consolidated Statements of Operations (unaudited)
 Three Months Ended 
June 30,
    
    
    Six Months Ended 
June 30,2011
    
    
    2010
    
    
    2011
    
    
    2010Investment Income:Interest and fee incomeControl investments
    
    $
    853,890
    
    
    $
    762,283
    
    
    $
    1,673,388
    
    
    $
    1,498,500Affiliate investments
    
    
    1,057,828
    
    
    
    519,168
    
    
    
    1,924,688
    
    
    
    1,027,530Non-control/non-affiliate investments
    
    
    3,271,050
    
    
    
    3,143,026
    
    
    
    6,246,134
    
    
    
    5,853,782Total interest and fee income
    
    
    5,182,768
    
    
    
    4,424,477
    
    
    
    9,844,210
    
    
    
    8,379,812Dividend incomeControl investments
    
    
    120,300
    
    
    
    108,838
    
    
    
    236,376
    
    
    
    213,853Non-control/non-affiliate investments
    
    
    
    
    
    
    64,222
    
    
    
    
    
    
    
    208,148Total dividend income
    
    
    120,300
    
    
    
    173,060
    
    
    
    236,376
    
    
    
    422,001Interest on idle funds and other income
    
    
    16,219
    
    
    
    18,207
    
    
    
    32,464
    
    
    
    35,847Total investment income
    
    
    5,319,287
    
    
    
    4,615,744
    
    
    
    10,113,050
    
    
    
    8,837,660Expenses:Base management fee
    
    
    999,190
    
    
    
    1,036,213
    
    
    
    2,035,403
    
    
    
    2,072,120Less: management fee offset
    
    
    (430,208
    )
    
    
    (10,000
    )
    
    
    (430,208
    )
    
    
    (290,000
    )Interest expense
    
    
    1,394,767
    
    
    
    1,249,259
    
    
    
    2,719,052
    
    
    
    2,337,604Professional fees
    
    
    84,940
    
    
    
    18,550
    
    
    
    164,613
    
    
    
    50,684Other general and administrative expenses
    
    
    68,704
    
    
    
    351,882
    
    
    
    92,066
    
    
    
    371,962Total expenses
    
    
    2,117,393
    
    
    
    2,645,904
    
    
    
    4,580,926
    
    
    
    4,542,370Net investment income
    
    
    3,201,894
    
    
    
    1,969,840
    
    
    
    5,532,124
    
    
    
    4,295,290Net realized and unrealized gains (losses) on investments:Realized loss on non-control/non-affiliate investments
    
    
    
    
    
    
    
    
    
    
    (7,935,430
    )
    
    
    (2,307
    )Net change in unrealized appreciation (depreciation) on
investments
    
    
    1,437,313
    
    
    
    (3,709,146
    )
    
    
    10,385,661
    
    
    
    (9,453,306
    )Net gain (loss) on investments
    
    
    1,437,313
    
    
    
    (3,709,146
    )
    
    
    2,450,231
    
    
    
    (9,455,613
    )Net increase (decrease) in net assets resulting
from operations
    
    $
    4,639,207
    
    
    $
    (1,739,306
    )
    
    $
    7,982,355
    
    
    $
    (5,160,323
    )
 See Notes to Consolidated Financial Statements (unaudited).
 3




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##### Table of Contents



FIDUS MEZZANINE CAPITAL, L.P.
Consolidated Statements of Changes in Net Assets (unaudited)
 TotalGeneral
    
    
    Limited
    
    
    NetPartner
    
    
    Partners
    
    
    AssetsBalances at December 31,
2009
    
    $
    4,504,972
    
    
    $
    43,975,979
    
    
    $
    48,480,951Capital distributions
    
    
    (130,805
    )
    
    
    (1,369,195
    )
    
    
    (1,500,000
    )Net investment income
    
    
    529,970
    
    
    
    3,765,320
    
    
    
    4,295,290Realized loss on investments
    
    
    (201
    )
    
    
    (2,106
    )
    
    
    (2,307
    )Net change in unrealized
depreciation on investments
    
    
    (824,361
    )
    
    
    (8,628,945
    )
    
    
    (9,453,306
    )Balances at June 30, 2010
    
    $
    4,079,575
    
    
    $
    37,741,053
    
    
    $
    41,820,628Balances at December 31,
2010
    
    $
    5,111,894
    
    
    $
    46,892,770
    
    
    $
    52,004,664Capital contributions
    
    
    612,534
    
    
    
    27,490,452
    
    
    
    28,102,986Capital distributions
    
    
    (130,805
    )
    
    
    (1,369,195
    )
    
    
    (1,500,000
    )Net investment income
    
    
    572,054
    
    
    
    4,960,070
    
    
    
    5,532,124Realized loss on investments
    
    
    (691,997
    )
    
    
    (7,243,433
    )
    
    
    (7,935,430
    )Net change in unrealized
appreciation on investments
    
    
    905,665
    
    
    
    9,479,996
    
    
    
    10,385,661Balances at June 30, 2011
    
    $
    6,379,345
    
    
    $
    80,210.660
    
    
    $
    86,590,005
 See Notes to Consolidated Financial Statements (unaudited).
 4




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##### Table of Contents



FIDUS MEZZANINE CAPITAL, L.P.
Consolidated Statements of Cash Flows (unaudited)
 Six Months Ended June 30,2011
    
    
    2010Cash Flows from Operating ActivitiesNet increase (decrease) in net assets resulting from operations
    
    $
    7,982,355
    
    
    $
    (5,160,323
    )Adjustments to reconcile net increase (decrease) in net assets
resulting from operations to net cash used in operating activities:Net change in unrealized depreciation (appreciation) on investments
    
    
    (10,385,661
    )
    
    
    9,453,306Realized loss on investments
    
    
    7,935,430
    
    
    
    2,307Interest and dividend income paid-in-kind
    
    
    (2,084,385
    )
    
    
    (2,216,454
    )Accretion of original issue discount
    
    
    (304,877
    )
    
    
    (348,292
    )Amortization of deferred financing costs
    
    
    180,339
    
    
    
    170,578Purchase of investments
    
    
    (19,591,858
    )
    
    
    (12,752,307
    )Principal payments received on debt securities
    
    
    5,035,791
    
    
    
    1,050,000Proceeds from loan origination fees
    
    
    31,250
    
    
    
    Changes in operating assets and liabilities:Interest receivable
    
    
    (1,326,255
    )
    
    
    (473,501
    )Prepaid expenses and other assets
    
    
    58,862
    
    
    
    (15,857
    )Accrued interest payable
    
    
    52,098
    
    
    
    219,495Due to affiliates
    
    
    82,605
    
    
    
    (182,251
    )Accounts payable and other liabilities
    
    
    (66,956
    )
    
    
    (32,004
    )Net cash used in operating activities
    
    
    (12,401,262
    )
    
    
    (10,285,303
    )Cash Flows from Financing ActivitiesProceeds from SBA debentures
    
    
    3,250,000
    
    
    
    12,500,000Payment of deferred financing costs
    
    
    (78,813
    )
    
    
    (603,125
    )Capital contributions
    
    
    28,102,986
    
    
    
    Capital distributions
    
    
    (1,500,000
    )
    
    
    (1,500,000
    )Net cash provided by financing activities
    
    
    29,774,173
    
    
    
    10,396,875Net increase in cash and cash equivalents
    
    
    17,372,911
    
    
    
    111,572Cash and cash equivalents:Beginning of year
    
    
    1,757,139
    
    
    
    2,671,884End of period
    
    $
    19,130,050
    
    
    $
    2,783,456Supplemental Disclosure of Cash Flow InformationCash payments for interest
    
    $
    2,486,616
    
    
    $
    1,947,531
 See Notes to Consolidated Financial Statements (unaudited).
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##### Table of Contents



FIDUS MEZZANINE CAPITAL, L.P.
 Consolidated
Schedule of Investments  June 30, 2011 (unaudited)
 Portfolio Company / Type of
    
    
    
    Rate(4)
    
    
    
    
    
    
    Principal
    
    
    
    
    
    
    
    
    
    
    Percent of NetInvestment(1)(2)(3)
    
    Industry
    
    Cash/PIK
    
    
    Maturity
    
    
    Amount
    
    
    Cost
    
    
    Fair Value
    
    
    AssetsControl Investments(5)Connect-Air International, Inc.
    
    Specialty DistributionSubordinated Note
    
    
    
    
    12.5%/3.0
    %
    
    
    9/6/2013
    
    
    $
    4,380,297
    
    
    $
    4,380,297
    
    
    $
    4,380,297Preferred Interest(6)
    
    
    
    
    0.0%/10.0
    %
    
    
    9/3/2014
    
    
    
    
    
    
    
    4,879,401
    
    
    
    4,879,401Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,259,698
    
    
    
    9,259,698
    
    
    
    11
    %Worldwide Express Operations, LLC
    
    Transportation ServicesSubordinated Note
    
    
    
    
    11.0%/3.0
    %
    
    
    2/1/2014
    
    
    
    8,553,298
    
    
    
    8,553,298
    
    
    
    8,553,298Subordinated Note
    
    
    
    
    0.0%/14.0
    %
    
    
    2/1/2014
    
    
    
    10,450,276
    
    
    
    10,157,000
    
    
    
    10,450,276Warrant (213,381 units)(7)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,699,200Common Units (51,946 units)(7)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    270,390
    
    
    
    1,107,400Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,980,688
    
    
    
    25,810,174
    
    
    
    30
    %Total Control Investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,240,386
    
    
    
    35,069,872
    
    
    
    41
    %Affiliate Investments(5)Avrio Technology Group, LLC
    
    Electronic ControlSubordinated Note
    
    Supplier
    
    
    13.0%/3.0
    %
    
    
    10/15/2015
    
    
    
    8,246,197
    
    
    
    8,246,197
    
    
    
    8,246,197Common Units (1,000 units)(7)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,000,000
    
    
    
    1,000,000Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,246,197
    
    
    
    9,246,197
    
    
    
    11
    %Medsurant Holdings, LLC
    
    Healthcare ServicesSenior Secured Loan
    
    
    
    
    14.0%/0.0
    %
    
    
    4/12/2016
    
    
    
    4.250,000
    
    
    
    3,190,675
    
    
    
    3,190,675Preferred Units (40,750 units)(7)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    500,000
    
    
    
    500,000Warrant (110,050 units)(7)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,100,500
    
    
    
    1,100,500Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,791,175
    
    
    
    4,791,175
    
    
    
    5
    %Paramount Building Solutions, LLC
    
    Retail CleaningSubordinated Note
    
    
    
    
    12.0%/4.0
    %
    
    
    2/15/2014
    
    
    
    6,114,584
    
    
    
    6,114,584
    
    
    
    6,114,584Common Units (107,143 units)(7)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,500,000
    
    
    
    3,050,800Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,614,584
    
    
    
    9,165,384
    
    
    
    11
    %Westminster Cracker Company, Inc.
    
    Specialty CrackerSubordinated Note
    
    Manufacturer
    
    
    14.0%/4.0
    %
    
    
    11/17/2014
    
    
    
    6,932,821
    
    
    
    6,932,821
    
    
    
    6,932,821Common Units (1,100,000 units)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,100,000
    
    
    
    811,900Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,032,821
    
    
    
    7,744,721
    
    
    
    9
    %Total Affiliate Investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,684,777
    
    
    
    30,947,477
    
    
    
    36
    %Non-Control/Non-Affiliate
Investments(5)Brook & Whittle Limited
    
    Specialty PrintingSubordinated Note
    
    
    
    
    12.0%/4.8
    %
    
    
    2/9/2014
    
    
    
    6,166,848
    
    
    
    6,166,848
    
    
    
    6,166,848Subordinated Note
    
    
    
    
    12.0%/2.0
    %
    
    
    2/9/2014
    
    
    
    2,097,792
    
    
    
    1,943,661
    
    
    
    2,097,792Warrant (1,011 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    285,000
    
    
    
    630,700Common Shares (148 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    110,374
    
    
    
    110,374Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,505,883
    
    
    
    9,005,714
    
    
    
    10
    %Caldwell & Gregory, LLC
    
    Laundry ServicesSubordinated Note
    
    
    
    
    12.5%/1.5
    %
    
    
    4/23/2015
    
    
    
    3,439,814
    
    
    
    3,439,814
    
    
    
    3,439,814Preferred Units (11,628 units)(7)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,162,786
    
    
    
    1,432,098Common Units (4,464 units)(7)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,464
    
    
    
    258,600Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,607,064
    
    
    
    5,130,512
    
    
    
    6
    %
 6




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##### Table of Contents



FIDUS MEZZANINE CAPITAL, L.P.
 Consolidated
Schedule of Investments (unaudited)  (Continued)
June 30, 2011
 Portfolio Company / Type of
    
    
    
    
    
    Rate(4)
    
    
    
    
    
    
    Principal
    
    
    
    
    
    
    
    
    
    
    Percent of NetInvestment(1)(2)(3)
    
    Industry
    
    
    Cash/PIK
    
    
    Maturity
    
    
    Amount
    
    
    Cost
    
    
    Fair Value
    
    
    AssetsCasino Signs & Graphics, LLC
    
    Niche ManufacturingSenior Secured Loan
    
    
    
    
    
    
    2.0%/0.0
    %
    
    
    12/31/2016
    
    
    $
    4,500,000
    
    
    $
    4,500,000
    
    
    $
    359,637
    
    
    
    0
    %Fairchild Industrial Products Company
    
    Industrial ProductsSubordinated Note
    
    
    
    
    
    
    12.0%/0.0
    %
    
    
    7/24/2014
    
    
    
    650,000
    
    
    
    650,000
    
    
    
    650,000Subordinated Note
    
    
    
    
    
    
    13.0%/3.0
    %
    
    
    7/24/2014
    
    
    
    8,500,000
    
    
    
    8,500,000
    
    
    
    8,500,000Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,150,000
    
    
    
    9,150,000
    
    
    
    11
    %Goodrich Quality Theaters, Inc.
    
    Movie TheatersSubordinated Note
    
    
    
    
    
    
    12.8%/0.0
    %
    
    
    3/31/2015
    
    
    
    12,500,000
    
    
    
    11,933,172
    
    
    
    12,500,000Warrant (71 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    750,000
    
    
    
    2,002,200Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,683,172
    
    
    
    14,502,200
    
    
    
    17
    %Innovative Product Achievements, LLC
    
    Healthcare ProductsSubordinated Note
    
    
    
    
    
    
    13.0%/2.5
    %
    
    
    12/21/2016
    
    
    
    6,253,906
    
    
    
    6,222,797
    
    
    
    6,222,797
    
    
    
    7
    %Interactive Technology Solutions, LLC
    
    Government IT ServicesSubordinated Note
    
    
    
    
    
    
    12.0%/3.0
    %
    
    
    12/31/2015
    
    
    
    5,103,617
    
    
    
    5,103,617
    
    
    
    5,103,617Common Units (499 units)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    500,000
    
    
    
    366,100Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,603,617
    
    
    
    5,469,717
    
    
    
    6
    %Jan-Pro Holdings, LLC
    
    Commercial CleaningSubordinated Note
    
    
    
    
    
    
    12.5%/2.5
    %
    
    
    3/18/2015
    
    
    
    7,386,391
    
    
    
    7,432,556
    
    
    
    7,432,556Preferred Equity (750,000 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    750,000
    
    
    
    608,600Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,182,556
    
    
    
    8,041,156
    
    
    
    9
    %K2 Industrial Services, Inc.
    
    Industrial Cleaning &Subordinated Note
    
    Coatings
    
    
    14.0%/1.5
    %
    
    
    2/27/2014
    
    
    
    8,000,000
    
    
    
    8,000,000
    
    
    
    8,240,000
    
    
    
    10
    %Nobles Manufacturing, Inc.
    
    Aerospace & DefenseSubordinated Note
    
    Manufacturing
    
    
    13.0%/3.0
    %
    
    
    4/6/2016
    
    
    
    6,825,000
    
    
    
    6,825,000
    
    
    
    6,825,000Preferred Equity (1,300,000 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,300,000
    
    
    
    1,300,000Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,125,000
    
    
    
    8,125,000
    
    
    
    9
    %Simplex Manufacturing Co.
    
    Aerospace & DefenseSenior Secured Loan
    
    Manufacturing
    
    
    13.0%/0.0
    %
    
    
    10/31/2013
    
    
    
    4,550,000
    
    
    
    4,244,154
    
    
    
    4,262,200Warrant (24 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    710,000
    
    
    
    187,700Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,954,154
    
    
    
    4,449,900
    
    
    
    5
    %TBG Anesthesia Management, LLC
    
    Healthcare ServicesSenior Secured Loan
    
    
    
    
    
    
    13.5%/0.0
    %
    
    
    11/10/2014
    
    
    
    11,000,000
    
    
    
    10,813,354
    
    
    
    11,000,000Warrant (263 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    276,070
    
    
    
    317,600Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,089,424
    
    
    
    11,317,600
    
    
    
    13
    %Tulsa Inspection Resources, Inc.
    
    Oil & Gas ServicesSubordinated Note
    
    
    
    
    
    
    14.0%/0.0
    %
    
    
    3/12/2014
    
    
    
    4,000,000
    
    
    
    3,894,355
    
    
    
    3,832,300Subordinated Note
    
    
    
    
    
    
    17.5%/0.0
    %
    
    
    3/12/2014
    
    
    
    648,471
    
    
    
    648,471
    
    
    
    648,471Warrant (6 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    193,435
    
    
    
    193,435Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,736,261
    
    
    
    4,674,206
    
    
    
    6
    %Total Non-Control/Non-Affiliate
Investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    96,359,928
    
    
    
    94,688,439
    
    
    
    109
    %Total Investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    154,285,091
    
    
    $
    160,705,788
    
    
    
    186
    %
 
 (1)
    
    All debt investments are income producing. Equity investments are non-income producing unless otherwise noted.(2)
    
    See Note 3 to the Consolidated Financial Statements for portfolio composition by geographic location.(3)
    
    Equity ownership may be held in shares or units of companies related to the portfolio companies.(4)
    
    Rate includes the cash interest or dividend rate and paid-in-kind interest or dividend rate, if any.(5)
    
    See Note 2  Significant Accounting Policies, Investment Classification for definitions of Control and Affiliate classifications.(6)
    
    Income producing.(7)
    
    Investment is held by a wholly-owned subsidiary of the Fund. See Notes to Consolidated Financial Statements (unaudited).
 7




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##### Table of Contents



FIDUS MEZZANINE CAPITAL, L.P.
 Consolidated Schedule of Investments
December 31, 2010
 Portfolio Company / Type of
    
    
    
    
    
    Rate(4)
    
    
    
    
    
    
    Principal
    
    
    
    
    
    
    
    
    
    
    Percent of NetInvestment(1)(2)(3)
    
    Industry
    
    
    Cash/PIK
    
    
    Maturity
    
    
    Amount
    
    
    Cost
    
    
    Fair Value
    
    
    AssetsControl Investments(5)Connect-Air International, Inc.
    
    Specialty DistributionSubordinated Note
    
    
    
    
    
    
    12.5%/3.0
    %
    
    
    9/6/2013
    
    
    $
    4,314,967
    
    
    $
    4,314,967
    
    
    $
    4,314,967Preferred Interest(6)
    
    
    
    
    
    
    0.0%/10.0
    %
    
    
    9/3/2014
    
    
    
    
    
    
    
    4,643,025
    
    
    
    4,643,026Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,957,993
    
    
    
    8,957,993
    
    
    
    17
    %Worldwide Express Operations, LLC
    
    Transportation ServicesSubordinated Note
    
    
    
    
    
    
    0.0%/14.0
    %
    
    
    2/1/2014
    
    
    
    8,348,609
    
    
    
    8,348,609
    
    
    
    8,348,609Subordinated Note
    
    
    
    
    
    
    0.0%/14.0
    %
    
    
    2/1/2014
    
    
    
    9,757,158
    
    
    
    9,408,905
    
    
    
    9,757,159Warrant (213,381 units)(7)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,022,010Common Units (51,946 units)(7)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    270,390
    
    
    
    333,631Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,027,905
    
    
    
    20,461,409
    
    
    
    39
    %Total Control Investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,985,897
    
    
    
    29,419,402
    
    
    
    57
    %Affiliate Investments(5)Avrio Technology Group, LLC
    
    Electronic ControlSubordinated Note
    
    Supplier
    
    
    13.0%/3.0
    %
    
    
    10/15/2015
    
    
    
    8,124,876
    
    
    
    8,124,876
    
    
    
    8,124,876Common Units (1,000 units)(7)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,000,000
    
    
    
    1,000,000Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,124,876
    
    
    
    9,124,876
    
    
    
    18
    %Paramount Building Solutions, LLC
    
    Retail CleaningSubordinated Note
    
    
    
    
    
    
    12.0%/4.0
    %
    
    
    2/15/2014
    
    
    
    5,993,043
    
    
    
    5,993,043
    
    
    
    6,052,975Common Units (107,143 units)(7)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,500,000
    
    
    
    3,887,000Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,493,043
    
    
    
    9,939,975
    
    
    
    19
    %Westminster Cracker Company, Inc.
    
    Specialty CrackerSubordinated Note
    
    Manufacturer
    
    
    14.0%/4.0
    %
    
    
    11/17/2014
    
    
    
    6,795,470
    
    
    
    6,795,470
    
    
    
    6,795,470Common Units (1,000,000 units)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,000,000
    
    
    
    1,000,000Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,795,470
    
    
    
    7,795,470
    
    
    
    15
    %Total Affiliate Investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,413,389
    
    
    
    26,860,320
    
    
    
    52
    %Non-Control/Non-Affiliate
Investments(5)Brook & Whittle Limited
    
    Specialty PrintingSubordinated Note
    
    
    
    
    
    
    12.0%/4.8
    %
    
    
    2/9/2014
    
    
    
    6,020,894
    
    
    
    6,020,894
    
    
    
    6,020,894Subordinated Note
    
    
    
    
    
    
    12.0%/2.0
    %
    
    
    2/9/2014
    
    
    
    2,076,936
    
    
    
    1,894,690
    
    
    
    2,076,938Warrant (1,011 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    285,000
    
    
    
    384,700Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,200,583
    
    
    
    8,482,532
    
    
    
    16
    %Caldwell & Gregory, LLC
    
    Laundry ServicesSubordinated Note
    
    
    
    
    
    
    12.5%/1.5
    %
    
    
    4/23/2015
    
    
    
    8,059,822
    
    
    
    8,059,822
    
    
    
    8,059,822Preferred Units (11,628 units)(7)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,162,786
    
    
    
    1,376,490Common Units (4,464 units)(7)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,464
    
    
    
    219,400Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,227,072
    
    
    
    9,655,712
    
    
    
    19
    %Casino Signs & Graphics, LLC
    
    Niche ManufacturingSenior Secured Loan
    
    
    
    
    
    
    2.0%/0.0
    %
    
    
    12/31/2016
    
    
    
    4,500,000
    
    
    
    4,500,000
    
    
    
    1,163,828
    
    
    
    2
    %Fairchild Industrial Products Company
    
    Industrial ProductsSubordinated Note
    
    
    
    
    
    
    13.0%/0.0
    %
    
    
    7/24/2014
    
    
    
    650,000
    
    
    
    650,000
    
    
    
    650,000Subordinated Note
    
    
    
    
    
    
    13.0%/4.0
    %
    
    
    7/24/2014
    
    
    
    8,500,000
    
    
    
    8,500,000
    
    
    
    8,500,000Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,150,000
    
    
    
    9,150,000
    
    
    
    18
    %
 8




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##### Table of Contents



FIDUS MEZZANINE CAPITAL, L.P.
 Consolidated Schedule of Investments  (Continued)
December 31, 2010
 Portfolio Company / Type of
    
    
    
    
    
    Rate(4)
    
    
    
    
    
    
    Principal
    
    
    
    
    
    
    
    
    
    
    Percent of NetInvestment(1)(2)(3)
    
    Industry
    
    
    Cash/PIK
    
    
    Maturity
    
    
    Amount
    
    
    Cost
    
    
    Fair Value
    
    
    AssetsGoodrich Quality Theaters, Inc.
    
    Movie TheatersSubordinated Note
    
    
    
    
    
    
    12.8%/0.0
    %
    
    
    3/31/2015
    
    
    $
    12,500,000
    
    
    $
    11,859,958
    
    
    $
    12,500,000Warrant (71 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    750,000
    
    
    
    2,080,000Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,609,958
    
    
    
    14,580,000
    
    
    
    28
    %Interactive Technology Solutions, LLC
    
    Government IT ServicesSubordinated Note
    
    
    
    
    
    
    12.0%/3.0
    %
    
    
    12/31/2015
    
    
    
    5,027,500
    
    
    
    5,027,500
    
    
    
    5,027,500Common Units (499 units)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    500,000
    
    
    
    500,000Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,527,500
    
    
    
    5,527,500
    
    
    
    11
    %Jan-Pro Holdings, LLC
    
    Commercial CleaningSubordinated Note
    
    
    
    
    
    
    12.5%/2.5
    %
    
    
    3/18/2015
    
    
    
    7,340,513
    
    
    
    7,340,513
    
    
    
    7,340,513Preferred Equity (750,000 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    750,000
    
    
    
    663,000Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,090,513
    
    
    
    8,003,513
    
    
    
    15
    %K2 Industrial Services, Inc.
    
    Industrial Cleaning &Subordinated Note
    
    Coatings
    
    
    14.0%/1.5
    %
    
    
    2/27/2014
    
    
    
    8,000,000
    
    
    
    8,000,000
    
    
    
    8,240,000
    
    
    
    16
    %Pure Earth, Inc.
    
    Environmental ServicesPreferred Equity (6,300 shares)(8)
    
    
    
    
    
    
    10.0%/4.0
    %
    
    
    3/3/2013
    
    
    
    
    
    
    
    6,104,575
    
    
    
    Preferred Equity (50,000 shares)(8)
    
    
    
    
    
    
    0.0%/15.0
    %
    
    
    N/A
    
    
    
    
    
    
    
    516,913
    
    
    
    Warrant (767,375 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,307,457
    
    
    
    Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,928,945
    
    
    
    
    
    
    
    0
    %Simplex Manufacturing Co.
    
    Aerospace ManufacturingSenior Secured Loan(9)
    
    
    
    
    
    
    N/A
    
    
    
    1/13/2011
    
    
    
    
    
    
    
    
    
    
    
    Senior Secured Loan
    
    
    
    
    
    
    14.0%/0.0
    %
    
    
    10/31/2013
    
    
    
    4,550,000
    
    
    
    4,182,280
    
    
    
    4,139,000Warrant (24 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    710,000
    
    
    
    150,000Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,892,280
    
    
    
    4,289,000
    
    
    
    8
    %TBG Anesthesia Management, LLC
    
    Healthcare ServicesSenior Secured Loan
    
    
    
    
    
    
    13.5%/0.0
    %
    
    
    11/10/2014
    
    
    
    11,000,000
    
    
    
    10,786,012
    
    
    
    11,000,000Warrant (263 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    276,070
    
    
    
    456,200Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,062,082
    
    
    
    11,456,200
    
    
    
    22
    %Tulsa Inspection Resources, Inc.
    
    Oil & Gas ServicesSubordinated Note
    
    
    
    
    
    
    14.0%/0.0
    %
    
    
    3/12/2014
    
    
    
    4,000,000
    
    
    
    3,876,315
    
    
    
    3,865,000Subordinated Note
    
    
    
    
    
    
    17.5%/0.0
    %
    
    
    3/12/2014
    
    
    
    648,471
    
    
    
    648,471
    
    
    
    648,471Warrant (6 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    193,435
    
    
    
    Sub Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,718,221
    
    
    
    4,513,471
    
    
    
    9
    %Total Non-Control/Non-Affiliate Investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93,907,155
    
    
    
    85,061,756
    
    
    
    164
    %Total Investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    145,306,441
    
    
    $
    141,341,478
    
    
    
    272
    %
 
 (1)
    
    All debt investments are income producing. Equity investments are non-income producing unless otherwise noted.(2)
    
    See Note 3 to the Consolidated Financial Statements for portfolio composition by geographic location.(3)
    
    Equity ownership may be held in shares or units of companies related to the portfolio companies.(4)
    
    Rate includes the cash interest or dividend rate and paid-in-kind interest or dividend rate, if any.(5)
    
    See Note 2  Significant Accounting Policies, Investment Classification for definitions of Control and Affiliate classifications.(6)
    
    Income producing.(7)
    
    Investment is held by a wholly-owned subsidiary of the Fund.(8)
    
    Investment was on non-accrual status at December 31, 2010.(9)
    
    The entire commitment was unfunded at December 31, 2010. As such, no interest is being earned on this investment. See Notes to Consolidated Financial Statements (unaudited).
 9




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##### Table of Contents



FIDUS MEZZANINE CAPITAL, L.P.
 Notes to Consolidated Financial Statements (unaudited)
 Note 1. Organization and Nature of Business
    
    
    FIC acquired 100% of the limited partnership interests in
the Fund through a merger of a wholly-owned subsidiary of
FIC with and into the Fund, in which the limited
partnership interests were exchanged for 3,702,778 shares
of common stock in FIC. The Fund became FICs wholly-owned
subsidiary, retained its SBIC license, and continues to
hold its existing investments and make new investments; and
    
    FIC acquired 100% of the equity interests in FMCGP, the
former general partner of the Fund, through the merger of
FMCGP with and into Fidus Investment GP, LLC, a
wholly-owned subsidiary of FIC in exchange for 353,743
shares of common stock in FIC.
   Note 2. Significant Accounting Policies
 Basis of presentation:
 Use of estimates:
 Consolidation:
 10




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##### Table of Contents



Fair value of financial instruments: Fair Value Measurements and
Disclosures
 Investment classification:
 Segments: Segment Reporting
 Cash and cash equivalents:
 Deferred financing costs:
 Revenue recognition:
 Investments and related investment income .
 Interest, fee and dividend income
    11




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##### Table of Contents



Non-accrual
 Income taxes:
  Accounting for Uncertainty in Income Taxes
 Allocations and distributions of the Fund:
  Recent accounting pronouncements: Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value
Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting
Standards (IFRSs)
 12




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##### Table of Contents



Note 3. Portfolio Company Investments
     June 30, 2011
    
    
    December 31, 2010Cost:Senior secured loans
    
    $
    22,748,183
    
    
    
    14.7
    %
    
    $
    19,468,293
    
    
    
    13.4
    %Subordinated notes
    
    
    115,144,488
    
    
    
    74.7
    
    
    
    104,864,032
    
    
    
    72.2Equity
    
    
    13,077,415
    
    
    
    8.5
    
    
    
    17,452,154
    
    
    
    12.0Warrants
    
    
    3,315,005
    
    
    
    2.1
    
    
    
    3,521,962
    
    
    
    2.4Total
    
    $
    154,285,091
    
    
    
    100.0
    %
    
    $
    145,306,441
    
    
    
    100.0
    %Fair value:Senior secured loans
    
    $
    18,812,512
    
    
    
    11.7
    %
    
    $
    16,302,829
    
    
    
    11.6
    %Subordinated notes
    
    
    116,336,668
    
    
    
    72.4
    
    
    
    106,323,193
    
    
    
    75.2Equity
    
    
    15,425,273
    
    
    
    9.6
    
    
    
    13,622,546
    
    
    
    9.6Warrants
    
    
    10,131,335
    
    
    
    6.3
    
    
    
    5,092,910
    
    
    
    3.6Total
    
    $
    160,705,788
    
    
    
    100.0
    %
    
    $
    141,341,478
    
    
    
    100.0
    %
  June 30, 2011
    
    
    December 31, 2010Cost:Midwest
    
    $
    49,143,793
    
    
    
    31.9
    %
    
    $
    40,796,916
    
    
    
    28.1
    %Southwest
    
    
    31,331,533
    
    
    
    20.3
    
    
    
    30,239,168
    
    
    
    20.8Northeast
    
    
    22,142,321
    
    
    
    14.3
    
    
    
    29,452,499
    
    
    
    20.3Southeast
    
    
    28,162,417
    
    
    
    18.3
    
    
    
    26,467,585
    
    
    
    18.2West
    
    
    23,505,027
    
    
    
    15.2
    
    
    
    18,350,273
    
    
    
    12.6Total
    
    $
    154,285,091
    
    
    
    100.0
    %
    
    $
    145,306,441
    
    
    
    100.0
    %Fair value:Midwest
    
    $
    51,430,997
    
    
    
    32.0
    %
    
    $
    43,401,076
    
    
    
    30.7
    %Southwest
    
    
    39,649,764
    
    
    
    24.7
    
    
    
    34,914,855
    
    
    
    24.7Northeast
    
    
    22,220,152
    
    
    
    13.8
    
    
    
    21,805,502
    
    
    
    15.4Southeast
    
    
    28,544,465
    
    
    
    17.8
    
    
    
    26,809,225
    
    
    
    19.0West
    
    
    18,860,410
    
    
    
    11.7
    
    
    
    14,410,820
    
    
    
    10.2Total
    
    $
    160,705,788
    
    
    
    100.0
    %
    
    $
    141,341,478
    
    
    
    100.0
    %
 13




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##### Table of Contents



Note 4. Fair Value Measurements
   Level 1
 Level 2
 Level 3
   
    
    the quarterly valuation process begins with each portfolio company or investment being initially
evaluated and rated by the investment professionals of the Funds investment advisor responsible for the
portfolio investment;
    
    preliminary valuation conclusions are then documented and discussed with the investment committee;
    
    the board of directors also engages one or more independent valuation firms to conduct
independent appraisals of our investments for which market quotations are not readily available.
The Fund will consult with independent valuation firm(s) relative to each portfolio company at least
once in every calendar year, and for new portfolio companies, at least once in the twelve-month
period subsequent to the initial investment. As of June 30, 2011, the Board consulted with the
independent valuation firm in arriving at the Funds determination of fair value on eight of its
portfolio company investments representing 53.3% of the total portfolio investments at fair
value. As of December 31, 2010, the previous general partner consulted with the independent
valuation firm in arriving at the Funds determination of fair value on 16 of its portfolio
company investments representing 100.0% of the total portfolio investments at fair value.;
    
    the audit committee of the  board of directors reviews the preliminary valuations of the
investment advisor and of the independent valuation firms and responds and supplements the
valuation recommendations to reflect any comments; and
    
    the board of directors discusses the valuations and determines the fair value of each investment
in our portfolio in good faith, based on the input of the investment advisor, the independent
valuation firms and the audit committee.
 14




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##### Table of Contents



15




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##### Table of Contents



SeniorSecured
    
    
    SubordinatedLoans
    
    
    Notes
    
    
    Equity
    
    
    Warrants
    
    
    TotalBalance, December 31, 2009
    
    $
    14,801,858
    
    
    $
    89,203,733
    
    
    $
    17,690,221
    
    
    $
    1,204,444
    
    
    $
    122,900,256Realized loss on investments
    
    
    
    
    
    
    
    
    
    
    (2,307
    )
    
    
    
    
    
    
    (2,307
    )Net unrealized appreciation (depreciation)
    
    
    (1,792,239
    )
    
    
    454,000
    
    
    
    (6,841,818
    )
    
    
    (1,273,249
    )
    
    
    (9,453,306
    )Purchases of investment securities
    
    
    250,000
    
    
    
    11,750,000
    
    
    
    2,307
    
    
    
    750,000
    
    
    
    12,752,307Repayments of investments received
    
    
    (200,000
    )
    
    
    (850,000
    )
    
    
    
    
    
    
    
    
    
    
    (1,050,000
    )Interest and dividend income paid-in-kind
    
    
    
    
    
    
    1,922,244
    
    
    
    294,210
    
    
    
    
    
    
    
    2,216,454Accretion of original issue discount
    
    
    83,534
    
    
    
    136,963
    
    
    
    127,795
    
    
    
    
    
    
    
    348,292Balance, June 30, 2010
    
    $
    13,143,153
    
    
    $
    102,616,940
    
    
    $
    11,270,408
    
    
    $
    681,195
    
    
    $
    127,711,696Balance, December 31, 2010
    
    $
    16,302,829
    
    
    $
    106,323,193
    
    
    $
    13,622,546
    
    
    $
    5,092,910
    
    
    $
    141,341,478Realized loss on investments
    
    
    
    
    
    
    
    
    
    
    (6,627,973
    )
    
    
    (1,307,457
    )
    
    
    (7,935,430
    )Net unrealized appreciation (depreciation)
    
    
    (770,207
    )
    
    
    (266,981
    )
    
    
    6,177,467
    
    
    
    5,245,382
    
    
    
    10,385,661Purchases of investment securities
    
    
    3,399,500
    
    
    
    13,075,000
    
    
    
    2,016,858
    
    
    
    1,100,500
    
    
    
    19,591,858Repayments of investments received
    
    
    (250,000
    )
    
    
    (4,785,791
    )
    
    
    
    
    
    
    
    
    
    
    (5,035,791
    )Interest and dividend income paid-in-kind
    
    
    
    
    
    
    1,848,010
    
    
    
    236,375
    
    
    
    
    
    
    
    2,084,385Loan origination fees received
    
    
    
    
    
    
    (31,250
    )
    
    
    
    
    
    
    
    
    
    
    (31,250
    )Accretion of original issue discount
    
    
    130,390
    
    
    
    174,487
    
    
    
    
    
    
    
    
    
    
    
    304,877Balance, June 30, 2011
    
    $
    18,812,512
    
    
    $
    116,336,668
    
    
    $
    15,425,273
    
    
    $
    10,131,335
    
    
    $
    160,705,788
  Note 5. Related Party Transactions
 Prior management agreement:
 New partnership agreement:
  Note 6. Debt
 Credit facility:
 SBA debentures:
 16




---



##### Table of Contents



Pooling
    
    Maturity
    
    
    Fixed
    
    
    June 30,
    
    
    December 31,Date(1)
    
    Date
    
    
    Interest Rate
    
    
    2011
    
    
    20103/26/2008
    
    
    3/1/2018
    
    
    
    6.188
    %
    
    $
    24,750,000
    
    
    $
    24,750,0009/24/2008
    
    
    9/1/2018
    
    
    
    6.442
    
    
    
    11,950,000
    
    
    
    11,950,0003/25/2009
    
    
    3/1/2019
    
    
    
    5.337
    
    
    
    19,750,000
    
    
    
    19,750,0009/23/2009
    
    
    9/1/2019
    
    
    
    4.950
    
    
    
    10,000,000
    
    
    
    10,000,0003/24/2010
    
    
    3/1/2020
    
    
    
    4.825
    
    
    
    13,000,000
    
    
    
    13,000,0009/22/2010
    
    
    9/1/2020
    
    
    
    3.932
    
    
    
    12,500,000
    
    
    
    12,500,0003/29/2011
    
    
    3/1/2021
    
    
    
    4.801
    
    
    
    1,550,000
    
    
    
    1,550,000(2)
    
    
    (2
    )
    
    
    (2
    )
    
    
    3,250,000
    
    
    
    $
    96,750,000
    
    
    $
    93,500,000
 
 (1)
    
    The SBA has two scheduled pooling dates for debentures (in March and in
September). Certain debentures drawn during the reporting periods may not be pooled until the
subsequent pooling date.(2)
    
    In April 2011, the Fund issued $3,250,000 in SBA debentures which will pool in September
2011, at which time the current short-term interim interest rate will reset to a higher
long-term fixed interest rate.   June 30,
    
    
    December 31,2011
    
    
    2010SBA debenture commitment fees
    
    $
    1,300,000
    
    
    $
    1,300,000SBA debenture leverage fees
    
    
    2,346,188
    
    
    
    2,267,375Line of credit fees
    
    
    
    
    
    
    40,000Subtotal
    
    
    3,646,188
    
    
    
    3,607,375Accumulated amortization
    
    
    (952,457
    )
    
    
    (812,118
    )Net deferred financing costs
    
    $
    2,693,731
    
    
    $
    2,795,257
 Note 7. Commitments and Contingencies
 Commitments:
 Indemnifications:
 Legal proceedings:
 17




---



##### Table of Contents



Note 8. Financial Highlights
  Six Months Ended June 30,2011
    
    2010Ratio to average net assets (annualized)(1):Total expenses
    
    
    13.7
    %
    
    
    20.1
    %Net investment income
    
    
    16.5
    %
    
    
    19.0
    %Total return(2)
    
    
    11.9
    %
    
    
    (11.4
    )%
 
 (1)
    
    Average net assets used for annualized ratios, based on the average of the beginning and
ending amounts of each quarter in the period(2)
    
    Total return based on the net increase (decrease) in net asset resulting from operations
during the period divided by average net assets and is not annualized.  18




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 The following discussion and analysis of our financial condition and results of operations
should be read in conjunction with Fidus Mezzanine Capital, L.P.s consolidated financial
statements and related notes appearing in our prospectus dated June 20, 2011, filed with the SEC on
June 22, 2011. The information contained in this section should also be read in conjunction with
our unaudited consolidated financial statements and related notes thereto appearing elsewhere in
this quarterly report on Form 10-Q .
 The information in this section contains forward-looking statements that involve risks and
uncertainties. Please see Risk Factors and Special Note Regarding Forward-Looking Statements
appearing in our prospectus dated June 20, 2011, filed with the SEC on June 22, 2011 for a
discussion of the uncertainties, risks and assumptions associated with these statements.
 Business Overview
   Portfolio Composition, Investment Activity and Yield
      As of
    
    As ofJune 30, 2011
    
    December 31, 2010CostSenior secured loans
    
    
    14.7
    %
    
    
    13.4
    %Subordinated notes
    
    
    74.7
    
    
    
    72.2Equity
    
    
    8.5
    
    
    
    12.0Warrants
    
    
    2.1
    
    
    
    2.4Total
    
    
    100.0
    %
    
    
    100.0
    %
 19




---



##### Table of Contents



As of
    
    As ofJune 30, 2011
    
    December 31, 2010Fair ValueSenior secured loans
    
    
    11.7
    %
    
    
    11.6
    %Subordinated notes
    
    
    72.4
    
    
    
    75.2Equity
    
    
    9.6
    
    
    
    9.6Warrants
    
    
    6.3
    
    
    
    3.6Total
    
    
    100.0
    %
    
    
    100.0
    %
  As of
    
    As ofJune 30, 2011
    
    December 31, 2010CostMidwest
    
    
    31.9
    %
    
    
    28.1
    %Southwest
    
    
    20.3
    
    
    
    20.8Northeast
    
    
    14.3
    
    
    
    20.3Southeast
    
    
    18.3
    
    
    
    18.2West
    
    
    15.2
    
    
    
    12.6Total
    
    
    100.0
    %
    
    
    100.0
    %Fair valueMidwest
    
    
    32.0
    %
    
    
    30.7
    %Southwest
    
    
    24.7
    
    
    
    24.7Northeast
    
    
    13.8
    
    
    
    15.4Southeast
    
    
    17.8
    
    
    
    19.0West
    
    
    11.7
    
    
    
    10.2Total
    
    
    100.0
    %
    
    
    100.0
    %
 20




---



##### Table of Contents



As of
    
    As ofJune 30, 2011
    
    December 31, 2010CostTransportation services
    
    
    12.4
    %
    
    
    12.4
    %Movie theaters
    
    
    8.2
    
    
    
    8.7Healthcare services
    
    
    10.3
    
    
    
    7.6Niche manufacturing
    
    
    2.9
    
    
    
    3.1Retail cleaning
    
    
    4.9
    
    
    
    5.1Laundry services
    
    
    3.0
    
    
    
    6.3Industrial products
    
    
    5.9
    
    
    
    6.3Electronic components supplier
    
    
    6.0
    
    
    
    6.3Specialty distribution
    
    
    6.0
    
    
    
    6.2Printing services
    
    
    5.5
    
    
    
    5.6Industrial cleaning & coatings
    
    
    5.2
    
    
    
    5.5Commercial cleaning
    
    
    5.3
    
    
    
    5.6Specialty cracker manufacturer
    
    
    5.2
    
    
    
    5.4Government information technology services
    
    
    3.6
    
    
    
    3.8Oil & gas services
    
    
    3.1
    
    
    
    3.2Aerospace & defense manufacturing
    
    
    8.5
    
    
    
    3.4Healthcare products
    
    
    4.0
    
    
    
    Environmental services
    
    
    
    
    
    
    5.5Total
    
    
    100.0
    %
    
    
    100.0
    %
 As of
    
    As ofJune 30, 2011
    
    December 31, 2010Fair ValueTransportation services
    
    
    16.0
    %
    
    
    14.5
    %Movie theaters
    
    
    9.0
    
    
    
    10.3Healthcare services
    
    
    10.0
    
    
    
    8.1Niche manufacturing
    
    
    0.2
    
    
    
    0.8Retail cleaning
    
    
    5.7
    
    
    
    7.0Laundry services
    
    
    3.2
    
    
    
    6.8Industrial products
    
    
    5.7
    
    
    
    6.5Electronic components supplier
    
    
    5.8
    
    
    
    6.5Specialty distribution
    
    
    5.8
    
    
    
    6.4Printing services
    
    
    5.6
    
    
    
    6.0Industrial cleaning & coatings
    
    
    5.1
    
    
    
    5.8Commercial cleaning
    
    
    5.0
    
    
    
    5.7Specialty cracker manufacturer
    
    
    4.8
    
    
    
    5.5Government information technology services
    
    
    3.4
    
    
    
    3.9Oil & gas services
    
    
    2.9
    
    
    
    3.2Aerospace & defense manufacturing
    
    
    7.9
    
    
    
    3.0Healthcare products
    
    
    3.9
    
    
    
    Environmental services
    
    
    
    
    
    
    Total
    
    
    100.0
    %
    
    
    100.0
    %
 21




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##### Table of Contents



Portfolio Asset Quality
   June 30, 2011
    
    
    December 31, 2010Investments at
    
    
    Percent of
    
    
    Investments at
    
    
    Percent ofInvestment Rating
    
    Fair Value
    
    
    Total Portfolio
    
    
    Fair Value
    
    
    Total Portfolio(Dollars in thousands)1
    
    $
    26,555
    
    
    
    16.5
    %
    
    $
    27,330
    
    
    
    19.3
    %2
    
    
    118,001
    
    
    
    73.5
    
    
    
    97,739
    
    
    
    69.23
    
    
    15,790
    
    
    
    9.8
    
    
    
    15,108
    
    
    
    10.74
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    360
    
    
    
    0.2
    
    
    
    1,164
    
    
    
    0.8Totals
    
    $
    160,706
    
    
    
    100.0
    %
    
    $
    141,341
    
    
    
    100.0
    %
  Results of Operations
 Comparison of three months ended June 30, 2011 and June 30, 2010
 Investment Income
  Expenses
  Net Investment Income
  22




---



##### Table of Contents



Net Increase in Net Assets Resulting From Operations
   Comparison of six months ended June 30, 2011 and June 30, 2010
 Investment Income
  Expenses
  Net Investment Income
  Net Increase in Net Assets Resulting From Operations
    Liquidity and Capital Resources
 Cash Flows
  23




---



##### Table of Contents



Capital Resources
   Critical Accounting Policies and Use of Estimates
  Valuation of Portfolio Investments
    
    
    our quarterly valuation process begins with each portfolio company or investment being initially
evaluated and rated by the investment professionals of our investment advisor responsible for the
portfolio investment;
    
    preliminary valuation conclusions are then documented and discussed with the investment committee;
    
    our board of directors also engages one or more independent valuation firms to conduct
independent appraisals of our investments for which market quotations are not readily available.
We will consult with independent valuation firm(s) relative to each portfolio company at least
once in every calendar year, and for new portfolio companies, at least once in the twelve-month
period subsequent to the initial investment;
    
    the audit committee of our board of directors reviews the preliminary valuations of our
investment advisor and of the independent
 24




---



##### Table of Contents



valuation firms and responds and supplements the
valuation recommendations to reflect any comments; and
    
    the board of directors discusses the valuations and determines the fair value of each investment
in our portfolio in good faith, based on the input of our investment advisor, the independent
valuation firms and the audit committee.
        Revenue Recognition
  Investments and related investment income.
 Interest, fee and dividend income.
 25




---



##### Table of Contents



Non-accrual.
 Recently Issued Accounting Standards
 Fair Value Measurement (Topic 820):
Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and
IFRSs
 Off-Balance Sheet Arrangements
  Related Party Transactions
  
    
    Fidus Investment GP, LLC, our general partner, entered into a new
limited partnership agreement with FIC, in its capacity as our sole
limited partner, which allows for Fidus Investment Advisors, LLC to
manage the day-to-day operating and investing activity of the Fund and
receive a base management fee directly from the Fund. Edward Ross,
our chairman and chief executive officer, Cary Schaefer, our chief
financial officer and chief compliance officer, and Thomas Lauer, one
of our directors, are all managers of Fidus Investment Advisors, LLC.
    
    We received a capital contribution of $21.1 million from our parent
company, FIC, from the proceeds of its initial public offering in June
2011.
 26




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk.
   
 Item 4. Controls and Procedures.
  
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  27




---



##### Table of Contents



Item 3. Defaults Upon Senior Securities.
  
 Item 4. [Removed and Reserved] .
 
 Item 5. Other Information.
  28




---



##### Table of Contents



Item 6. Exhibits.
 Number
    
    Exhibit31.1
    
    Chief Executive Officer Certification Pursuant to Rule 13a-14
of the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Chief Financial Officer Certification Pursuant to Rule 13a-14
of the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification pursuant to Section 1350,
Chapter 63 of Title 18, United States Code, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
 29




---



##### Table of Contents



SIGNATURES
  FIDUS MEZZANINE CAPITAL, L.P.Date: August 4, 2011
    /s/ EDWARD H. ROSSEdward H. RossChairman and Chief Executive Officer
(Principal Executive Officer)Date: August 4, 2011
    /s/ CARY L. SCHAEFERCary L. SchaeferChief Financial Officer
(Principal Financial and Accounting Officer) 30




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##### Table of Contents



EXHIBIT INDEX
 Number
    
    Exhibit31.1
    
    Chief Executive Officer Certification Pursuant to Rule 13a-14
of the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Chief Financial Officer Certification Pursuant to Rule 13a-14
of the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification pursuant to Section 1350,
Chapter 63 of Title 18, United States Code, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
 31