##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q





(Mark One)



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

For the quarterly period ended September 30, 2011

OR



| ̈ | 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                                                       |  | 20-8435835                          
|(State or other jurisdiction of
incorporation or organization) |  | (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)

n/a

(Former name, former address and former fiscal year, if changed since last report)





Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    Yes  x    No   ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule
405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



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

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









---

##### Table of Contents

FIDUS MEZZANINE CAPITAL, L.P.

TABLE OF CONTENTS

QUARTERLY REPORT ON FORM 10-Q



|                               |  |                                                                                                                          |    |  |    | 
|------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------ | -- |  | -- | 
|PART I  FINANCIAL INFORMATION | 
|Item 1.                        |  | Financial Statements.                                                                                                    |    |  |    | 
|                               |  | Consolidated Statements of Assets and Liabilities  September 30, 2011 (unaudited) and December 31, 2010                 |    |  | 3  | 
|                               |  | Consolidated Statements of Operations  Three and Nine Months Ended September 30, 2011 (unaudited) and
 2010 (unaudited) |    |  | 4  | 
|                               |  | Consolidated Statements of Changes in Net Assets  Nine Months Ended September 30, 2011 (unaudited) and
2010 (unaudited) |    |  | 5  | 
|                               |  | Consolidated Statements of Cash Flows  Nine Months Ended September 30, 2011 (unaudited) and 2010 (unaudited)            |    |  | 6  | 
|                               |  | Consolidated Schedule of Investments  September 30, 2011 (unaudited) and December 31,
2010                              |    |  | 7  | 
|                               |  | Notes to Consolidated Financial Statements (unaudited)                                                                   |    |  | 11 | 
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of
Operations.                                   |    |  | 21 | 
|Item 3.                        |  | Quantitative and Qualitative Disclosures About Market Risk.                                                              |    |  | 30 | 
|Item 4.                        |  | Controls and Procedures.                                                                                                 |    |  | 30 | 
|                              
|PART II  OTHER INFORMATION    | 
|Item 1.                        |  | Legal Proceedings.                                                                                                       |    |  | 31 | 
|Item 1A.                       |  | Risk Factors.                                                                                                            |    |  | 31 | 
|Item 2.                        |  | Unregistered Sales of Equity Securities and Use of Proceeds.                                                             |    |  | 31 | 
|Item 3.                        |  | Defaults Upon Senior Securities.                                                                                         |    |  | 31 | 
|Item 4.                        |  | [Removed and Reserved].                                                                                                  |    |  | 31 | 
|Item 5.                        |  | Other Information.                                                                                                       |    |  | 31 | 
|Item 6.                        |  | Exhibits.                                                                                                                |    |  | 31 | 
|Signatures                     |  |                                                                                                                          | 31 | 
|Exhibit Index                  |  |                                                                                                                          | 32 | 
|Ex-31.1                        |  |                                                                                                                          |    | 
|Ex-31.2                        |  |                                                                                                                          |    | 
|Ex-32.1                        |  |                                                                                                                          |    | 



2



---

##### Table of Contents

PART I  FINANCIAL INFORMATION

Item 1. Financial Statements.

FIDUS MEZZANINE CAPITAL, L.P.

Consolidated
Statements of Assets and Liabilities



|                                                                                                    |  |                              |             |  |                  |   |             | 
|--------------------------------------------------------------------------------------------------- |  | ---------------------------- | ----------- |  | ---------------- | - | ----------- | 
|                                                                                                    |  | September 30,2011(unaudited) |             |  | December 31,2010 |  
|ASSETS                                                                                              |  |                              |             |  |                  |   |             | 
|Investments, at fair value                                                                          |  |                              |             |  |                  |   |             | 
|Control investments (cost: $28,859,800 and $26,985,897, respectively)                               |  | $                            | 37,336,492  |  |                  | $ | 29,419,402  | 
|Affiliate investments (cost: $29,928,888 and $24,413,389, respectively)                             |  |                              | 30,349,492  |  |                  |   | 26,860,320  | 
|Non-control/non-affiliate investments (cost: $114,415,001 and $93,907,155, respectively)            |  |                              | 112,429,238 |  |                  |   | 85,061,756  | 
|                                                                                                    |  |                              |             |  |                  |   |             | 
|Total investments at fair value (cost: $173,203,689 and $145,306,441, respectively)                 |  |                              | 180,115,222 |  |                  |   | 141,341,478 | 
|Cash and cash equivalents                                                                           |  |                              | 2,938,901   |  |                  |   | 1,757,139   | 
|Interest receivable                                                                                 |  |                              | 2,323,616   |  |                  |   | 1,141,357   | 
|Deferred financing costs (net of accumulated amortization of $1,043,612 and $812,118, respectively) |  |                              | 2,602,576   |  |                  |   | 2,795,257   | 
|Prepaid expenses and other assets                                                                   |  |                              | 415,690     |  |                  |   | 341,558     | 
|                                                                                                    |  |                              |             |  |                  |   |             | 
|Total assets                                                                                        |  | $                            | 188,396,005 |  |                  | $ | 147,376,789 | 
|                                                                                                    |  |                              |             |  |                  |   |             | 
|                                                                                                    |  |                             
|LIABILITIES                                                                                         |  |                              |             |  |                  |   |             | 
|SBA debentures                                                                                      |  | $                            | 96,750,000  |  |                  | $ | 93,500,000  | 
|Accrued interest payable                                                                            |  |                              | 417,760     |  |                  |   | 1,638,862   | 
|Due to affiliates                                                                                   |  |                              | 243,739     |  |                  |   | 958         | 
|Accounts payable and other liabilities                                                              |  |                              | 223,476     |  |                  |   | 232,305     | 
|                                                                                                    |  |                              |             |  |                  |   |             | 
|Total liabilities                                                                                   |  |                              | 97,634,975  |  |                  |   | 95,372,125  | 
|                                                                                                    |  |                              |             |  |                  |   |             | 
|                                                                                                    |  |                             
|NET ASSETS                                                                                          |  |                              |             |  |                  |   |             | 
|Partners capital                                                                                   |  |                              | 90,761,030  |  |                  |   | 52,004,664  | 
|                                                                                                    |  |                              |             |  |                  |   |             | 
|Total net assets                                                                                    |  |                              | 90,761,030  |  |                  |   | 52,004,664  | 
|                                                                                                    |  |                              |             |  |                  |   |             | 
|Total liabilities and net assets                                                                    |  | $                            | 188,396,005 |  |                  | $ | 147,376,789 | 
|                                                                                                    |  |                              |             |  |                  |   |             | 

See Notes to Consolidated Financial Statements (unaudited).



3



---

##### Table of Contents

FIDUS MEZZANINE CAPITAL, L.P.

Consolidated Statements of Operations (unaudited)



|                                                                    |  |                                 |           |  |                                |   |           |      |  |   |            |   |  |   |            |  
|------------------------------------------------------------------- |  | ------------------------------- | --------- |  | ------------------------------ | - | --------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                                    |  | Three Months
EndedSeptember 30, |           |  | Nine Months
EndedSeptember 30, |  
|                                                                    |  | 2011                            |           |  | 2010                           |   |           | 2011 |  |   | 2010       |  
|Investment Income:                                                  |  |                                 |           |  |                                |   |           |      |  |   |            |   |  |   |            |  
|Interest and fee income                                             |  |                                 |           |  |                                |   |           |      |  |   |            |   |  |   |            |  
|Control investments                                                 |  | $                               | 871,795   |  |                                | $ | 791,892   |      |  | $ | 2,545,183  |   |  | $ | 2,290,392  |  
|Affiliate investments                                               |  |                                 | 1,102,565 |  |                                |   | 530,198   |      |  |   | 3,027,253  |   |  |   | 1,557,728  |  
|Non-control/non-affiliate investments                               |  |                                 | 3,816,417 |  |                                |   | 2,878,164 |      |  |   | 10,062,551 |   |  |   | 8,731,946  |  
|                                                                    |  |                                 |           |  |                                |   |           |      |  |   |            |   |  |   |            |  
|Total interest and fee income                                       |  |                                 | 5,790,777 |  |                                |   | 4,200,254 |      |  |   | 15,634,987 |   |  |   | 12,580,066 |  
|Dividend income                                                     |  |                                 |           |  |                                |   |           |      |  |   |            |   |  |   |            |  
|Control investments                                                 |  |                                 | 124,697   |  |                                |   | 112,815   |      |  |   | 361,073    |   |  |   | 326,668    |  
|Non-control/non-affiliate investments                               |  |                                 | 11,320    |  |                                |   |          |      |  |   | 11,320     |   |  |   | 208,148    |  
|                                                                    |  |                                 |           |  |                                |   |           |      |  |   |            |   |  |   |            |  
|Total dividend income                                               |  |                                 | 136,017   |  |                                |   | 112,815   |      |  |   | 372,393    |   |  |   | 534,816    |  
|Interest on idle funds and other income                             |  |                                 | 18,661    |  |                                |   | 19,260    |      |  |   | 51,125     |   |  |   | 55,107     |  
|                                                                    |  |                                 |           |  |                                |   |           |      |  |   |            |   |  |   |            |  
|Total investment income                                             |  |                                 | 5,945,455 |  |                                |   | 4,332,329 |      |  |   | 16,058,505 |   |  |   | 13,169,989 |  
|                                                                    |  |                                 |           |  |                                |   |           |      |  |   |            |   |  |   |            |  
|                                                                    |  |                                 |           | 
|Expenses:                                                           |  |                                 |           |  |                                |   |           |      |  |   |            |   |  |   |            |  
|Base management fee                                                 |  |                                 | 705,159   |  |                                |   | 1,036,213 |      |  |   | 2,740,562  |   |  |   | 3,108,333  |  
|Less: management fee offset                                         |  |                                 |          |  |                                |   | (49,240   | )    |  |   | (430,208   | ) |  |   | (339,240   | )
|Interest expense                                                    |  |                                 | 1,376,205 |  |                                |   | 1,270,979 |      |  |   | 4,095,257  |   |  |   | 3,608,583  |  
|Professional fees                                                   |  |                                 | 132,958   |  |                                |   | 44,324    |      |  |   | 297,571    |   |  |   | 95,008     |  
|Other general and administrative expenses                           |  |                                 | 50,944    |  |                                |   | 9,860     |      |  |   | 143,010    |   |  |   | 381,822    |  
|                                                                    |  |                                 |           |  |                                |   |           |      |  |   |            |   |  |   |            |  
|Total expenses                                                      |  |                                 | 2,265,266 |  |                                |   | 2,312,136 |      |  |   | 6,846,192  |   |  |   | 6,854,506  |  
|                                                                    |  |                                 |           |  |                                |   |           |      |  |   |            |   |  |   |            |  
|Net investment income                                               |  |                                 | 3,680,189 |  |                                |   | 2,020,193 |      |  |   | 9,212,313  |   |  |   | 6,315,483  |  
|                                                                    |  |                                 |           |  |                                |   |           |      |  |   |            |   |  |   |            |  
|                                                                    |  |                                 |           | 
|Net realized and unrealized gains (losses) on investments:          |  |                                 |           |  |                                |   |           |      |  |   |            |   |  |   |            |  
|Realized loss on non-control/non-affiliate investments              |  |                                 |          |  |                                |   | (1,000    | )    |  |   | (7,935,430 | ) |  |   | (3,307     | )
|Net change in unrealized appreciation (depreciation) on investments |  |                                 | 490,836   |  |                                |   | 1,651,382 |      |  |   | 10,876,497 |   |  |   | (7,801,924 | )
|                                                                    |  |                                 |           |  |                                |   |           |      |  |   |            |   |  |   |            |  
|Net gain (loss) on investments                                      |  |                                 | 490,836   |  |                                |   | 1,650,382 |      |  |   | 2,941,067  |   |  |   | (7,805,231 | )
|                                                                    |  |                                 |           |  |                                |   |           |      |  |   |            |   |  |   |            |  
|Net increase (decrease) in net assets resulting from operations     |  | $                               | 4,171,025 |  |                                | $ | 3,670,575 |      |  | $ | 12,153,380 |   |  | $ | (1,489,748 | )
|                                                                    |  |                                 |           |  |                                |   |           |      |  |   |            |   |  |   |            |  

See Notes to Consolidated Financial Statements (unaudited).



4



---

##### Table of Contents

FIDUS MEZZANINE CAPITAL, L.P.

Consolidated Statements of Changes in Net Assets (unaudited)



|                                                     |  |                |           |   |                 |   |            |                |  |   |            |  
|---------------------------------------------------- |  | -------------- | --------- | - | --------------- | - | ---------- | -------------- |  | - | ---------- | -
|                                                     |  | GeneralPartner |           |   | LimitedPartners |   |            | TotalNetAssets | 
|Balances at December 31, 2009                        |  | $              | 4,504,972 |   |                 | $ | 43,975,979 |                |  | $ | 48,480,951 |  
|Capital distributions                                |  |                | (130,805  | ) |                 |   | (1,369,195 | )              |  |   | (1,500,000 | )
|Net investment income                                |  |                | 792,206   |   |                 |   | 5,523,277  |                |  |   | 6,315,483  |  
|Realized loss on investments                         |  |                | (288      | ) |                 |   | (3,019     | )              |  |   | (3,307     | )
|Net change in unrealized depreciation on investments |  |                | (680,355  | ) |                 |   | (7,121,569 | )              |  |   | (7,801,924 | )
|                                                     |  |                |           |   |                 |   |            |                |  |   |            |  
|Balances at September 30, 2010                       |  | $              | 4,485,730 |   |                 | $ | 41,005,473 |                |  | $ | 45,491,203 |  
|                                                     |  |                |           |   |                 |   |            |                |  |   |            |  
|                                                     |  |                |          
|Balances at December 31, 2010                        |  | $              | 5,111,894 |   |                 | $ | 46,892,770 |                |  | $ | 52,004,664 |  
|Capital contributions                                |  |                | 612,534   |   |                 |   | 27,490,452 |                |  |   | 28,102,986 |  
|Capital distributions                                |  |                | (130,805  | ) |                 |   | (1,369,195 | )              |  |   | (1,500,000 | )
|Net investment income                                |  |                | 572,422   |   |                 |   | 8,639,891  |                |  |   | 9,212,313  |  
|Realized loss on investments                         |  |                | (691,997  | ) |                 |   | (7,243,433 | )              |  |   | (7,935,430 | )
|Net change in unrealized appreciation on investments |  |                | 905,714   |   |                 |   | 9,970,783  |                |  |   | 10,876,497 |  
|                                                     |  |                |           |   |                 |   |            |                |  |   |            |  
|Balances at September 30, 2011                       |  | $              | 6,379,762 |   |                 | $ | 84,381,268 |                |  | $ | 90,761,030 |  
|                                                     |  |                |           |   |                 |   |            |                |  |   |            |  

See Notes to Consolidated Financial Statements (unaudited).



5



---

##### Table of Contents

FIDUS MEZZANINE CAPITAL, L.P.

Consolidated Statements of Cash Flows (unaudited)



|                                                                                                                                                 |  |                                 |             |   |      |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------- | ----------- | - | ---- | - | ----------- | -
|                                                                                                                                                 |  | Nine Months Ended September 30, |            
|                                                                                                                                                 |  | 2011                            |             |   | 2010 |  
|Cash Flows from Operating Activities                                                                                                             |  |                                 |             |   |      |   |             |  
|Net increase (decrease) in net assets resulting from operations                                                                                  |  | $                               | 12,153,380  |   |      | $ | (1,489,748  | )
|Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash (used in) provided by
operating activities: |  |                                 |             |   |      |   |             |  
|Net change in unrealized depreciation (appreciation) on investments                                                                              |  |                                 | (10,876,497 | ) |      |   | 7,801,924   |  
|Realized loss on investments                                                                                                                     |  |                                 | 7,935,430   |   |      |   | 3,307       |  
|Interest and dividend income paid-in-kind                                                                                                        |  |                                 | (3,125,259  | ) |      |   | (3,273,649  | )
|Accretion of original issue discount                                                                                                             |  |                                 | (492,048    | ) |      |   | (479,982    | )
|Accretion of origination fees                                                                                                                    |  |                                 | (3,803      | ) |      |   |            |  
|Amortization of deferred financing costs                                                                                                         |  |                                 | 271,494     |   |      |   | 258,823     |  
|Purchase of investments                                                                                                                          |  |                                 | (37,641,858 | ) |      |   | (13,401,778 | )
|Principal payments received on debt securities                                                                                                   |  |                                 | 5,285,791   |   |      |   | 13,612,240  |  
|Proceeds from loan origination fees                                                                                                              |  |                                 | 144,500     |   |      |   |            |  
|Changes in operating assets and liabilities:                                                                                                     |  |                                 |             |   |      |   |             |  
|Interest receivable                                                                                                                              |  |                                 | (1,182,259  | ) |      |   | (245,767    | )
|Prepaid expenses and other assets                                                                                                                |  |                                 | (74,132     | ) |      |   | (42,229     | )
|Accrued interest payable                                                                                                                         |  |                                 | (1,221,102  | ) |      |   | (903,476    | )
|Due to affiliates                                                                                                                                |  |                                 | 242,781     |   |      |   | (157,870    | )
|Accounts payable and other liabilities                                                                                                           |  |                                 | (8,829      | ) |      |   | (48,005     | )
|                                                                                                                                                 |  |                                 |             |   |      |   |             |  
|Net cash (used in) provided by operating activities                                                                                              |  |                                 | (28,592,411 | ) |      |   | 1,633,790   |  
|                                                                                                                                                 |  |                                 |             |   |      |   |             |  
|                                                                                                                                                 |  |                                
|Cash Flows from Financing Activities                                                                                                             |  |                                 |             |   |      |   |             |  
|Proceeds from SBA debentures                                                                                                                     |  |                                 | 3,250,000   |   |      |   | 12,500,000  |  
|Payment 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  |   |      |   | 10,396,875  |  
|                                                                                                                                                 |  |                                 |             |   |      |   |             |  
|                                                                                                                                                 |  |                                
|Net increase in cash and cash equivalents                                                                                                        |  |                                 | 1,181,762   |   |      |   | 12,030,665  |  
|                                                                                                                                                 |  |                                
|Cash and cash equivalents:                                                                                                                       |  |                                 |             |   |      |   |             |  
|Beginning of year                                                                                                                                |  |                                 | 1,757,139   |   |      |   | 2,671,884   |  
|                                                                                                                                                 |  |                                 |             |   |      |   |             |  
|End of period                                                                                                                                    |  | $                               | 2,938,901   |   |      | $ | 14,702,549  |  
|                                                                                                                                                 |  |                                 |             |   |      |   |             |  
|                                                                                                                                                 |  |                                
|Supplemental Disclosure of Cash Flow Information                                                                                                 |  |                                 |             |   |      |   |             |  
|Cash payments for interest                                                                                                                       |  | $                               | 5,044,865   |   |      | $ | 4,253,234   |  
|                                                                                                                                                 |  |                                 |             |   |      |   |             |  

See Notes to Consolidated Financial Statements (unaudited).



6



---

##### Table of Contents

FIDUS MEZZANINE CAPITAL, L.P.

Consolidated Schedule of Investments  September 30, 2011 (unaudited)



|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|---------------------------------------------- |  | ------------------------------ |  | --------------- | --------- | - | -------- |  | ---------- | --------------- |  | - | ---------- |  |  | ---------- | ---------- |  | --------------------- | - | ---------- |  |  |  | -- | -
|Portfolio Company / Type
ofInvestment(1)(2)(3) |  | Industry                       |  | Rate(4)Cash/PIK |           |   | Maturity |  |            | PrincipalAmount |  |   | Cost       |  |  | Fair Value |            |  | Percent of 
NetAssets |  
|Control Investments(5)                         |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|                                               |  |                                |  |                 |           |   |         
|Connect-Air International, Inc.                |  | Specialty Distribution         |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Subordinated Note                              |  |                                |  |                 | 12.5%/3.0 | % |          |  | 9/6/2013   |                 |  | $ | 4,413,879  |  |  | $          | 4,413,879  |  |                       | $ | 4,413,879  |  |  |  |    |  
|Preferred Interest(6)                          |  |                                |  |                 | 0.0%/10.0 | % |          |  | 9/3/2014   |                 |  |   |            |  |  |            | 5,004,096  |  |                       |   | 5,004,096  |  |  |  |    |  
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 9,417,975  |  |                       |   | 9,417,975  |  |  |  | 10 | %
|                                               |  |                                |  |                 |           |   |         
|Worldwide Express Operations, LLC              |  | Transportation Services        |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Subordinated Note                              |  |                                |  |                 | 11.0%/3.0 | % |          |  | 2/1/2014   |                 |  |   | 8,617,975  |  |  |            | 8,617,975  |  |                       |   | 8,617,975  |  |  |  |    |  
|Subordinated Note                              |  |                                |  |                 | 0.0%/14.0 | % |          |  | 2/1/2014   |                 |  |   | 10,819,042 |  |  |            | 10,553,460 |  |                       |   | 10,819,042 |  |  |  |    |  
|Warrant (213,381 units)(7)                     |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |           |  |                       |   | 7,158,400  |  |  |  |    |  
|Common Units (51,946 units)(7)                 |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 270,390    |  |                       |   | 1,323,100  |  |  |  |    |  
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 19,441,825 |  |                       |   | 27,918,517 |  |  |  | 31 | %
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|                                               |  |                                |  |                 |           |   |         
|Total Control Investments                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 28,859,800 |  |                       |   | 37,336,492 |  |  |  | 41 | %
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|                                               |  |                                |  |                 |           |   |         
|Affiliate Investments(5)                       |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|                                               |  |                                |  |                 |           |   |         
|Avrio Technology Group, LLC                    |  | Electronic Control Supplier    |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Subordinated Note                              |  |                                |  |                 | 13.0%/3.0 | % |          |  | 10/15/2015 |                 |  |   | 8,308,552  |  |  |            | 8,308,552  |  |                       |   | 7,929,000  |  |  |  |    |  
|Common Units (1,000 units)(7)                  |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 1,000,000  |  |                       |   | 376,700    |  |  |  |    |  
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 9,308,552  |  |                       |   | 8,305,700  |  |  |  | 9  | %
|                                               |  |                                |  |                 |           |   |         
|Medsurant Holdings, LLC                        |  | Healthcare Services            |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Senior Secured Loan                            |  |                                |  |                 | 14.0%/0.0 | % |          |  | 4/12/2016  |                 |  |   | 4.250,000  |  |  |            | 3,238,844  |  |                       |   | 4,209,000  |  |  |  |    |  
|Preferred Units (40,750 units)(7)              |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 500,000    |  |                       |   | 500,000    |  |  |  |    |  
|Warrant (110,050 units)(7)                     |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 1,100,500  |  |                       |   | 1,100,500  |  |  |  |    |  
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 4,839,344  |  |                       |   | 5,809,500  |  |  |  | 6  | %
|                                               |  |                                |  |                 |           |   |         
|Paramount Building Solutions, LLC              |  | Retail Cleaning                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Subordinated Note                              |  |                                |  |                 | 12.0%/4.0 | % |          |  | 2/15/2014  |                 |  |   | 6,177,302  |  |  |            | 6,177,302  |  |                       |   | 6,177,302  |  |  |  |    |  
|Common Units (107,143 units)(7)                |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 1,500,000  |  |                       |   | 2,325,300  |  |  |  |    |  
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 7,677,302  |  |                       |   | 8,502,602  |  |  |  | 9  | %
|                                               |  |                                |  |                 |           |   |         
|Westminster Cracker Company, Inc.              |  | Specialty Cracker Manufacturer |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Subordinated Note                              |  |                                |  |                 | 14.0%/4.0 | % |          |  | 11/17/2014 |                 |  |   | 7,003,690  |  |  |            | 7,003,690  |  |                       |   | 7,003,690  |  |  |  |    |  
|Common Units (1,100,000 units)                 |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 1,100,000  |  |                       |   | 728,000    |  |  |  |    |  
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 8,103,690  |  |                       |   | 7,731,690  |  |  |  | 9  | %
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|                                               |  |                                |  |                 |           |   |         
|Total Affiliate Investments                    |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 29,928,888 |  |                       |   | 30,349,492 |  |  |  | 33 | %
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|                                               |  |                                |  |                 |           |   |         
|Non-Control/Non-Affiliate Investments(5)       |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|                                               |  |                                |  |                 |           |   |         
|Brook & Whittle Limited                        |  | Specialty Printing             |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Subordinated Note                              |  |                                |  |                 | 12.0%/4.8 | % |          |  | 2/9/2014   |                 |  |   | 6,241,146  |  |  |            | 6,241,146  |  |                       |   | 6,241,146  |  |  |  |    |  
|Subordinated Note                              |  |                                |  |                 | 12.0%/2.0 | % |          |  | 2/9/2014   |                 |  |   | 2,108,299  |  |  |            | 1,968,410  |  |                       |   | 2,108,299  |  |  |  |    |  
|Warrant (1,011 shares)                         |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 285,000    |  |                       |   | 651,000    |  |  |  |    |  
|Common Shares (148 shares)                     |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 110,374    |  |                       |   | 110,374    |  |  |  |    |  
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 8,604,930  |  |                       |   | 9,110,819  |  |  |  | 10 | %
|                                               |  |                                |  |                 |           |   |         
|Brook Furniture Rental, Inc.                   |  | Furniture Rental               |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Subordinated Note                              |  |                                |  |                 | 12.0%/1.5 | % |          |  | 9/29/2016  |                 |  |   | 7,600,000  |  |  |            | 7,076,812  |  |                       |   | 7,076,812  |  |  |  |    |  
|Warrant (2.5%)                                 |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 485,188    |  |                       |   | 485,188    |  |  |  |    |  
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 7,562,000  |  |                       |   | 7,562,000  |  |  |  | 8  | %
|                                               |  |                                |  |                 |           |   |         
|Caldwell & Gregory, LLC                        |  | Laundry Services               |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Subordinated Note                              |  |                                |  |                 | 12.5%/1.5 | % |          |  | 4/23/2015  |                 |  |   | 3,452,820  |  |  |            | 3,452,820  |  |                       |   | 3,452,820  |  |  |  |    |  
|Preferred Units (11,628 units)(7)              |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 1,162,786  |  |                       |   | 1,460,740  |  |  |  |    |  
|Common Units (4,464 units)(7)                  |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 4,464      |  |                       |   | 177,600    |  |  |  |    |  
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 4,620,070  |  |                       |   | 5,091,160  |  |  |  | 6  | %
|                                               |  |                                |  |                 |           |   |         
|Casino Signs & Graphics, LLC                   |  | Niche Manufacturing            |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Senior Secured Loan(8)                         |  |                                |  |                 | 2.0%/0.0  | % |          |  | 12/31/2016 |                 |  |   | 4,500,000  |  |  |            | 4,500,000  |  |                       |   |           |  |  |  | 0  | %
|                                               |  |                                |  |                 |           |   |         
|Fairchild Industrial Products Company          |  | Industrial Products            |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Subordinated Note                              |  |                                |  |                 | 12.0%/0.0 | % |          |  | 7/24/2014  |                 |  |   | 650,000    |  |  |            | 650,000    |  |                       |   | 650,000    |  |  |  |    |  
|Subordinated Note                              |  |                                |  |                 | 13.0%/3.0 | % |          |  | 7/24/2014  |                 |  |   | 8,500,000  |  |  |            | 8,500,000  |  |                       |   | 8,500,000  |  |  |  |    |  
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 9,150,000  |  |                       |   | 9,150,000  |  |  |  | 10 | %
|                                               |  |                                |  |                 |           |   |         
|Goodrich Quality Theaters, Inc.                |  | Movie Theaters                 |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Subordinated Note                              |  |                                |  |                 | 12.8%/0.0 | % |          |  | 3/31/2015  |                 |  |   | 12,500,000 |  |  |            | 11,970,146 |  |                       |   | 12,500,000 |  |  |  |    |  
|Warrant (71 shares)                            |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 750,000    |  |                       |   | 2,116,600  |  |  |  |    |  
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 12,720,146 |  |                       |   | 14,616,600 |  |  |  | 16 | %
|                                               |  |                                |  |                 |           |   |         
|Innovative Product Achievements, LLC           |  | Healthcare Products            |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |    |  
|Subordinated Note                              |  |                                |  |                 | 13.0%/2.5 | % |          |  | 12/21/2016 |                 |  |   | 6,293,862  |  |  |            | 6,264,171  |  |                       |   | 6,264,171  |  |  |  | 7  | %



7



---

##### Table of Contents

FIDUS MEZZANINE CAPITAL, L.P.

Consolidated Schedule of Investments  September 30, 2011 (unaudited)



|                                               |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  
|---------------------------------------------- |  | --------------------------------- |  | --------------- | --------- | - | -------- |  | ---------- | --------------- |  | - | ---------- |  |  | ---------- | ----------- |  | --------------------- | - | ----------- |  |  |  | --- | -
|Portfolio Company / Type
ofInvestment(1)(2)(3) |  | Industry                          |  | Rate(4)Cash/PIK |           |   | Maturity |  |            | PrincipalAmount |  |   | Cost       |  |  | Fair Value |             |  | Percent of 
NetAssets |  
|Interactive Technology Solutions, LLC          |  | Government IT Services            |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  
|Subordinated Note                              |  |                                   |  |                 | 12.0%/3.0 | % |          |  | 12/31/2015 |                 |  | $ | 5,142,745  |  |  | $          | 5,142,745   |  |                       | $ | 5,142,745   |  |  |  |     |  
|Common Units (499 units)                       |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 500,000     |  |                       |   | 349,800     |  |  |  |     |  
|                                               |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  
|Sub Total                                      |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 5,642,745   |  |                       |   | 5,492,545   |  |  |  | 6   | %
|                                               |  |                                   |  |                 |           |   |         
|Jacob Ash Holdings, Inc.                       |  | Apparel Distribution              |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  
|Subordinated Note                              |  |                                   |  |                 | 13.0%/4.0 | % |          |  | 8/11/2016  |                 |  |   | 3,519,444  |  |  |            | 3,502,420   |  |                       |   | 3,502,420   |  |  |  |     |  
|Subordinated Note                              |  |                                   |  |                 | 13.0%/0.0 | % |          |  | 8/11/2016  |                 |  |   | 1,750,000  |  |  |            | 1,709,362   |  |                       |   | 1,709,362   |  |  |  |     |  
|Preferred Equity (500 shares)(6)               |  |                                   |  |                 | 0.0%/15.0 | % |          |  |            |                 |  |   |            |  |  |            | 476,929     |  |                       |   | 476,929     |  |  |  |     |  
|Warrant (129,630 shares)                       |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 67,408      |  |                       |   | 67,408      |  |  |  |     |  
|                                               |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  
|Sub Total                                      |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 5,756,119   |  |                       |   | 5,756,119   |  |  |  | 6   | %
|                                               |  |                                   |  |                 |           |   |         
|Jan-Pro Holdings, LLC                          |  | Commercial Cleaning               |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  
|Subordinated Note                              |  |                                   |  |                 | 12.5%/2.5 | % |          |  | 3/18/2015  |                 |  |   | 7,479,010  |  |  |            | 7,479,010   |  |                       |   | 7,479,010   |  |  |  |     |  
|Preferred Equity (750,000 shares)              |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 750,000     |  |                       |   | 443,800     |  |  |  |     |  
|                                               |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  
|Sub Total                                      |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 8,229,010   |  |                       |   | 7,922,810   |  |  |  | 9   | %
|                                               |  |                                   |  |                 |           |   |         
|K2 Industrial Services, Inc.                   |  | Industrial Cleaning & Coatings    |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  
|Subordinated Note                              |  |                                   |  |                 | 14.0%/1.5 | % |          |  | 2/27/2014  |                 |  |   | 8,000,000  |  |  |            | 8,000,000   |  |                       |   | 8,240,000   |  |  |  | 9   | %
|                                               |  |                                   |  |                 |           |   |         
|Nobles Manufacturing, Inc.                     |  | Aerospace & Defense Manufacturing |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  
|Subordinated Note                              |  |                                   |  |                 | 13.0%/3.0 | % |          |  | 4/6/2016   |                 |  |   | 6,825,000  |  |  |            | 6,825,000   |  |                       |   | 6,825,000   |  |  |  |     |  
|Preferred Equity (1,300,000 shares)            |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 1,300,000   |  |                       |   | 1,300,000   |  |  |  |     |  
|                                               |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  
|Sub Total                                      |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 8,125,000   |  |                       |   | 8,125,000   |  |  |  | 9   | %
|                                               |  |                                   |  |                 |           |   |         
|Restoration Holdco, LLC                        |  | Restoration & Mitigation Services |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  
|Revolver ($500,000 commitment)                 |  |                                   |  |                 | 13.0%/0.0 | % |          |  | 8/11/2013  |                 |  |   | 300,000    |  |  |            | 295,339     |  |                       |   | 295,339     |  |  |  |     |  
|Senior Secured Loan                            |  |                                   |  |                 | 13.0%/0.0 | % |          |  | 8/11/2016  |                 |  |   | 4,272,861  |  |  |            | 4,233,465   |  |                       |   | 4,233,465   |  |  |  |     |  
|Warrant (9.5 shares)                           |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 127,139     |  |                       |   | 127,139     |  |  |  |     |  
|                                               |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  
|Sub Total                                      |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 4,655,943   |  |                       |   | 4,655,943   |  |  |  | 5   | %
|                                               |  |                                   |  |                 |           |   |         
|Simplex Manufacturing Co.                      |  | Aerospace & Defense Manufacturing |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  
|Subordinated Note                              |  |                                   |  |                 | 13.0%/0.0 | % |          |  | 10/31/2013 |                 |  |   | 4,550,000  |  |  |            | 4,275,786   |  |                       |   | 4,334,700   |  |  |  |     |  
|Warrant (24 shares)                            |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 710,000     |  |                       |   | 342,400     |  |  |  |     |  
|                                               |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  
|Sub Total                                      |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 4,985,786   |  |                       |   | 4,677,100   |  |  |  | 5   | %
|                                               |  |                                   |  |                 |           |   |         
|TBG Anesthesia Management, LLC                 |  | Healthcare Services               |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  
|Senior Secured Loan                            |  |                                   |  |                 | 13.5%/0.0 | % |          |  | 11/10/2014 |                 |  |   | 10,750,000 |  |  |            | 10,577,086  |  |                       |   | 10,750,000  |  |  |  |     |  
|Warrant (263 shares)                           |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 276,070     |  |                       |   | 322,500     |  |  |  |     |  
|                                               |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  
|Sub Total                                      |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 10,853,156  |  |                       |   | 11,072,500  |  |  |  | 12  | %
|                                               |  |                                   |  |                 |           |   |         
|Tulsa Inspection Resources, Inc.               |  | Oil & Gas Services                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  
|Subordinated Note                              |  |                                   |  |                 | 14.0%/0.0 | % |          |  | 3/12/2014  |                 |  |   | 4,000,000  |  |  |            | 3,904,019   |  |                       |   | 3,836,600   |  |  |  |     |  
|Subordinated Note                              |  |                                   |  |                 | 17.5%/0.0 | % |          |  | 3/12/2014  |                 |  |   | 648,471    |  |  |            | 648,471     |  |                       |   | 648,471     |  |  |  |     |  
|Warrant (6 shares)                             |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 193,435     |  |                       |   | 207,400     |  |  |  |     |  
|                                               |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  
|Sub Total                                      |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 4,745,925   |  |                       |   | 4,692,471   |  |  |  | 5   | %
|                                               |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  
|                                               |  |                                   |  |                 |           |   |         
|Total Non-Control/Non-Affiliate Investments    |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 114,415,001 |  |                       |   | 112,429,238 |  |  |  | 124 | %
|                                               |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  
|                                               |  |                                   |  |                 |           |   |         
|Total Investments                              |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  | $          | 173,203,689 |  |                       | $ | 180,115,222 |  |  |  | 198 | %
|                                               |  |                                   |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |     |  



|(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 September 30, 2011.
|--- | -----------------------------------------------------------

See Notes to Consolidated Financial Statements (unaudited).



8



---

##### Table of Contents

FIDUS MEZZANINE CAPITAL, L.P.

Consolidated Schedule of Investments

December 31, 2010



|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|---------------------------------------------- |  | ------------------------------ |  | --------------- | --------- | - | -------- |  | ---------- | --------------- |  | - | ---------- |  |  | ---------- | ---------- |  | --------------------- | - | ---------- |  |  |  | --- | 
|Portfolio Company / Type
ofInvestment(1)(2)(3) |  | Industry                       |  | Rate(4)Cash/PIK |           |   | Maturity |  |            | PrincipalAmount |  |   | Cost       |  |  | Fair Value |            |  | Percent of 
NetAssets |  
|Control Investments(5)                         |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|                                               |  |                                |  |                 |           |   |         
|Connect-Air International, Inc.                |  | Specialty Distribution         |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Subordinated Note                              |  |                                |  |                 | 12.5%/3.0 | % |          |  | 9/6/2013   |                 |  | $ | 4,314,967  |  |  | $          | 4,314,967  |  |                       | $ | 4,314,967  |  |  |  |     | 
|Preferred Interest(6)                          |  |                                |  |                 | 0.0%/10.0 | % |          |  | 9/3/2014   |                 |  |   |            |  |  |            | 4,643,025  |  |                       |   | 4,643,026  |  |  |  |     | 
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 8,957,993  |  |                       |   | 8,957,993  |  |  |  | 17% | 
|                                               |  |                                |  |                 |           |   |         
|Worldwide Express Operations, LLC              |  | Transportation Services        |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Subordinated Note                              |  |                                |  |                 | 0.0%/14.0 | % |          |  | 2/1/2014   |                 |  |   | 8,348,609  |  |  |            | 8,348,609  |  |                       |   | 8,348,609  |  |  |  |     | 
|Subordinated Note                              |  |                                |  |                 | 0.0%/14.0 | % |          |  | 2/1/2014   |                 |  |   | 9,757,158  |  |  |            | 9,408,905  |  |                       |   | 9,757,159  |  |  |  |     | 
|Warrant (213,381 units)(7)                     |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |           |  |                       |   | 2,022,010  |  |  |  |     | 
|Common Units (51,946 units)(7)                 |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 270,390    |  |                       |   | 333,631    |  |  |  |     | 
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Sub 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 Control Supplier    |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Subordinated Note                              |  |                                |  |                 | 13.0%/3.0 | % |          |  | 10/15/2015 |                 |  |   | 8,124,876  |  |  |            | 8,124,876  |  |                       |   | 8,124,876  |  |  |  |     | 
|Common Units (1,000 units)(7)                  |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 1,000,000  |  |                       |   | 1,000,000  |  |  |  |     | 
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 9,124,876  |  |                       |   | 9,124,876  |  |  |  | 18% | 
|                                               |  |                                |  |                 |           |   |         
|Paramount Building Solutions, LLC              |  | Retail Cleaning                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Subordinated Note                              |  |                                |  |                 | 12.0%/4.0 | % |          |  | 2/15/2014  |                 |  |   | 5,993,043  |  |  |            | 5,993,043  |  |                       |   | 6,052,975  |  |  |  |     | 
|Common Units (107,143 units)(7)                |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 1,500,000  |  |                       |   | 3,887,000  |  |  |  |     | 
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 7,493,043  |  |                       |   | 9,939,975  |  |  |  | 19% | 
|                                               |  |                                |  |                 |           |   |         
|Westminster Cracker Company, Inc.              |  | Specialty Cracker Manufacturer |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Subordinated Note                              |  |                                |  |                 | 14.0%/4.0 | % |          |  | 11/17/2014 |                 |  |   | 6,795,470  |  |  |            | 6,795,470  |  |                       |   | 6,795,470  |  |  |  |     | 
|Common Units (1,000,000 units)                 |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 1,000,000  |  |                       |   | 1,000,000  |  |  |  |     | 
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 7,795,470  |  |                       |   | 7,795,470  |  |  |  | 15% | 
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|                                               |  |                                |  |                 |           |   |         
|Total Affiliate Investments                    |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 24,413,389 |  |                       |   | 26,860,320 |  |  |  | 52% | 
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|                                               |  |                                |  |                 |           |   |         
|Non-Control/Non-AffiliateInvestments(5)        |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|                                               |  |                                |  |                 |           |   |         
|Brook & Whittle Limited                        |  | Specialty Printing             |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Subordinated Note                              |  |                                |  |                 | 12.0%/4.8 | % |          |  | 2/9/2014   |                 |  |   | 6,020,894  |  |  |            | 6,020,894  |  |                       |   | 6,020,894  |  |  |  |     | 
|Subordinated Note                              |  |                                |  |                 | 12.0%/2.0 | % |          |  | 2/9/2014   |                 |  |   | 2,076,936  |  |  |            | 1,894,690  |  |                       |   | 2,076,938  |  |  |  |     | 
|Warrant (1,011 shares)                         |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 285,000    |  |                       |   | 384,700    |  |  |  |     | 
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 8,200,583  |  |                       |   | 8,482,532  |  |  |  | 16% | 
|                                               |  |                                |  |                 |           |   |         
|Caldwell & Gregory, LLC                        |  | Laundry Services               |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Subordinated Note                              |  |                                |  |                 | 12.5%/1.5 | % |          |  | 4/23/2015  |                 |  |   | 8,059,822  |  |  |            | 8,059,822  |  |                       |   | 8,059,822  |  |  |  |     | 
|Preferred Units (11,628 units)(7)              |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 1,162,786  |  |                       |   | 1,376,490  |  |  |  |     | 
|Common Units (4,464 units)(7)                  |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 4,464      |  |                       |   | 219,400    |  |  |  |     | 
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 9,227,072  |  |                       |   | 9,655,712  |  |  |  | 19% | 
|                                               |  |                                |  |                 |           |   |         
|Casino Signs & Graphics, LLC                   |  | Niche Manufacturing            |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Senior Secured Loan                            |  |                                |  |                 | 2.0%/0.0  | % |          |  | 12/31/2016 |                 |  |   | 4,500,000  |  |  |            | 4,500,000  |  |                       |   | 1,163,828  |  |  |  | 2%  | 
|                                               |  |                                |  |                 |           |   |         
|Fairchild Industrial Products Company          |  | Industrial Products            |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Subordinated Note                              |  |                                |  |                 | 13.0%/0.0 | % |          |  | 7/24/2014  |                 |  |   | 650,000    |  |  |            | 650,000    |  |                       |   | 650,000    |  |  |  |     | 
|Subordinated Note                              |  |                                |  |                 | 13.0%/4.0 | % |          |  | 7/24/2014  |                 |  |   | 8,500,000  |  |  |            | 8,500,000  |  |                       |   | 8,500,000  |  |  |  |     | 
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 9,150,000  |  |                       |   | 9,150,000  |  |  |  | 18% | 
|                                               |  |                                |  |                 |           |   |         
|Goodrich Quality Theaters, Inc.                |  | Movie Theaters                 |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Subordinated Note                              |  |                                |  |                 | 12.8%/0.0 | % |          |  | 3/31/2015  |                 |  |   | 12,500,000 |  |  |            | 11,859,958 |  |                       |   | 12,500,000 |  |  |  |     | 
|Warrant (71 shares)                            |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 750,000    |  |                       |   | 2,080,000  |  |  |  |     | 
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 12,609,958 |  |                       |   | 14,580,000 |  |  |  | 28% | 
|                                               |  |                                |  |                 |           |   |         
|Interactive Technology Solutions, LLC          |  | Government IT Services         |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Subordinated Note                              |  |                                |  |                 | 12.0%/3.0 | % |          |  | 12/31/2015 |                 |  |   | 5,027,500  |  |  |            | 5,027,500  |  |                       |   | 5,027,500  |  |  |  |     | 
|Common Units (499 units)                       |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 500,000    |  |                       |   | 500,000    |  |  |  |     | 
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 5,527,500  |  |                       |   | 5,527,500  |  |  |  | 11% | 
|                                               |  |                                |  |                 |           |   |         
|Jan-Pro Holdings, LLC                          |  | Commercial Cleaning            |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Subordinated Note                              |  |                                |  |                 | 12.5%/2.5 | % |          |  | 3/18/2015  |                 |  |   | 7,340,513  |  |  |            | 7,340,513  |  |                       |   | 7,340,513  |  |  |  |     | 
|Preferred Equity (750,000 shares)              |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 750,000    |  |                       |   | 663,000    |  |  |  |     | 
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |            |  |                       |   |            |  |  |  |     | 
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 8,090,513  |  |                       |   | 8,003,513  |  |  |  | 15% | 



9



---

##### Table of Contents

FIDUS MEZZANINE CAPITAL, L.P.

Consolidated Schedule of Investments

December 31, 2010



|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |      | 
|---------------------------------------------- |  | ------------------------------ |  | --------------- | --------- | - | -------- |  | ---------- | --------------- |  | - | ---------- |  |  | ---------- | ----------- |  | --------------------- | - | ----------- |  |  |  | ---- | 
|Portfolio Company / Type
ofInvestment(1)(2)(3) |  | Industry                       |  | Rate(4)Cash/PIK |           |   | Maturity |  |            | PrincipalAmount |  |   | Cost       |  |  | Fair Value |             |  | Percent of 
NetAssets |  
|K2 Industrial Services, Inc.                   |  | Industrial Cleaning & Coatings |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |      | 
|Subordinated Note                              |  |                                |  |                 | 14.0%/1.5 | % |          |  | 2/27/2014  |                 |  | $ | 8,000,000  |  |  | $          | 8,000,000   |  |                       | $ | 8,240,000   |  |  |  | 16%  | 
|                                               |  |                                |  |                 |           |   |         
|Pure Earth, Inc.                               |  | Environmental Services         |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |      | 
|Preferred 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 Manufacturing        |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |      | 
|Senior Secured Loan(9)                         |  |                                |  |                 | N/A       |   |          |  | 1/13/2011  |                 |  |   |           |  |  |            |            |  |                       |   |            |  |  |  |      | 
|Senior Secured Loan                            |  |                                |  |                 | 14.0%/0.0 | % |          |  | 10/31/2013 |                 |  |   | 4,550,000  |  |  |            | 4,182,280   |  |                       |   | 4,139,000   |  |  |  |      | 
|Warrant (24 shares)                            |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 710,000     |  |                       |   | 150,000     |  |  |  |      | 
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |      | 
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 4,892,280   |  |                       |   | 4,289,000   |  |  |  | 8%   | 
|                                               |  |                                |  |                 |           |   |         
|TBG Anesthesia Management, LLC                 |  | Healthcare Services            |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |      | 
|Senior Secured Loan                            |  |                                |  |                 | 13.5%/0.0 | % |          |  | 11/10/2014 |                 |  |   | 11,000,000 |  |  |            | 10,786,012  |  |                       |   | 11,000,000  |  |  |  |      | 
|Warrant (263 shares)                           |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 276,070     |  |                       |   | 456,200     |  |  |  |      | 
|                                               |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |      | 
|Sub Total                                      |  |                                |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            | 11,062,082  |  |                       |   | 11,456,200  |  |  |  | 22%  | 
|                                               |  |                                |  |                 |           |   |         
|Tulsa Inspection Resources, Inc.               |  | Oil & Gas Services             |  |                 |           |   |          |  |            |                 |  |   |            |  |  |            |             |  |                       |   |             |  |  |  |      | 
|Subordinated Note                              |  |                                |  |                 | 14.0%/0.0 | % |          |  | 3/12/2014  |                 |  |   | 4,000,000  |  |  |            | 3,876,315   |  |                       |   | 3,865,000   |  |  |  |      | 
|Subordinated Note                              |  |                                |  |                 | 17.5%/0.0 | % |          |  | 3/12/2014  |                 |  |   | 648,471    |  |  |            | 648,471     |  |                       |   | 648,471     |  |  |  |      | 
|Warrant (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).



10



---

##### Table of Contents

FIDUS MEZZANINE CAPITAL, L.P.

Notes to Consolidated Financial Statements (unaudited)

Note 1. Organization and Nature of Business

Fidus Mezzanine Capital, L.P.
(the Fund), provides customized mezzanine debt and equity financing solutions to lower middle-market companies. The Fund commenced operations on May 1, 2007, and on October 22, 2007, was granted a license to operate as a Small
Business Investment Company, also called an SBIC, under the authority of the United States Small Business Administration (SBA). The SBIC license allows the Fund to obtain leverage by issuing SBA-guaranteed debentures, which we describe
as SBA debentures, subject to the issuance of a leverage commitment by the SBA and other customary procedures. As an SBIC, the Fund is subject to a variety of regulations and oversight by the SBA under the Small Business Investment Act of 1958, as
amended (the SBIC Act), concerning, among other things, the size and nature of the companies in which it may invest and the structure of those investments.

Fidus Investment Corporation, a Maryland corporation (FIC), was formed on February 14, 2011 for the purposes of (i) acquiring 100% of the limited partnership interests of the Fund
and 100% of the membership interests of the Funds general partner, Fidus Mezzanine Capital GP, LLC (FMCGP), (ii) raising capital in an initial public offering that priced on June 20, 2011 and (iii) thereafter
operating as an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company (BDC) under the Investment Company Act of 1940, as amended (the 1940
Act). In addition, for federal income tax purposes, FIC intends to elect to be treated as a regulated investment company (RIC) under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code), beginning
with its taxable year ending December 31, 2011.

On June 20, 2011, the following formation transactions (the
Formation Transactions) were consummated:



| |  |  | 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.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On
June 20, 2011, FIC announced the pricing of its initial public offering (the Offering) of 4,670,000 shares of its common stock at the offering price of $15.00 per share resulting in net proceeds of $63,853,187, after deducting
underwriting fees and transaction costs. On July 14, 2011, FICs underwriters purchased 700,500 shares of FICs common stock at the public offering price of $15.00 per share to cover over-allotments resulting in proceeds to FIC of
$9,771,975, net of underwriting fees of $735,525. The Fund received a capital contribution from FIC of $21,102,986 during June 2011 from the proceeds of the Offering. As of September 30, 2011, FIC had 9,427,021 shares of common stock
outstanding.

The management agreement between the Fund and Fidus Capital, LLC (the Funds former investment advisor) was
terminated in conjunction with the Formation Transactions. For all periods subsequent to the consummation of the Formation Transactions and the Offering, the Fund pays a quarterly base management fee to Fidus Investment Advisors, LLC (the
Investment Advisor) under a limited partnership agreement (the LP Agreement) with FIC in its capacity as the Funds sole limited partner. The investment professionals of the Investment Advisor are the same as those of
Fidus Capital, LLC.

Note 2. Significant Accounting Policies

Basis of presentation:The accompanying consolidated financial statements of the Fund have been prepared in accordance with generally accepted accounting principles in the United States of America
(GAAP), as established by the Financial Accounting Standards Board (FASB). These consolidated financial statements reflect the guidance in the Accounting Standards Codification (ASC), which is the single source of
authoritative GAAP recognized by the FASB. In the opinion of management, the consolidated financial statements reflect all adjustments and reclassifications that are necessary for the fair presentation of financial results as of and for the periods
presented. Certain prior period amounts have been reclassified to conform to the current period presentation. The current periods results of operation are not necessarily indicative of results that ultimately may be achieved for the year.
Therefore, the unaudited financial statements and notes should be read in conjunction with the Funds audited financial statements and notes thereto for the period ended December 31, 2010.



11



---

##### Table of Contents

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

Consolidation:In accordance with Regulation S-X and the Audit and Accounting Guide for Investment Companies issued by the
American Institute of Certified Public Accountants (AICPA), the Fund will generally not consolidate its investments in a company other than an investment company subsidiary or a controlled operating company whose business consists of
providing services to the Fund. As a result, the consolidated financial statements of the Fund include the accounts of the Fund and its wholly-owned investment company subsidiaries. All significant intercompany balances and transactions have been
eliminated.

Fair value of financial instruments:The Fund applies fair value to substantially all of its financial
instruments in accordance with ASC Topic 820  Fair Value Measurements and Disclosures(ASC Topic 820). ASC Topic 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair
value measurements. The Fund believes that the carrying amounts of its financial instruments, consisting of cash and cash equivalents, receivables, SBA debentures, accounts payable and accrued liabilities approximate the fair values of such items
due to their short maturity or comparable interest rates. The Fund accounts for its portfolio investments at fair value. See Note 4 to the consolidated financial statements.

Investment classification:The Fund classifies its investments in accordance with the requirements of the 1940 Act. Under the 1940 Act, Control investments are defined as investments in
those companies where the Fund owns more than 25% of the voting securities of such company or has rights to maintain greater than 50% of the board representation. Under the 1940 Act, Affiliate investments are defined as investments in
those companies where the Fund owns between 5% and 25% of the voting securities of such company. Non-Control/Non-Affiliate investments are those that neither qualify as Control Investments nor Affiliate Investments.

Segments:In accordance with ASC Topic 280  Segment Reporting, the Fund has determined that it has a single reporting
segment and operating unit structure.

Cash and cash equivalents:Cash and cash equivalents are highly liquid
investments with an original maturity of three months or less at the date of acquisition. The Fund places its cash in financial institutions and, at times, such balances may be in excess of the Federal Deposit Insurance Corporation insurance limits.

Deferred financing costs:Deferred financing costs include SBA debenture commitment and leverage fees which have been
capitalized and are amortized on a straight-line basis into interest expense over the term of the debenture agreement (10 years). Deferred financing costs also include costs related to the Funds previous revolving credit facility. These costs
have been capitalized and are amortized into interest expense over the term of the credit facility.

Revenue recognition:The Funds revenue recognition policies are as follows:

Investments and related investment income.
Realized gains or losses on portfolio investments are calculated based upon the difference between the net proceeds from the disposition and the cost basis of the investment. Changes in the fair value of investments, as determined by our board of
directors through the application of the Funds valuation policy, are included as changes in unrealized appreciation or depreciation of investments in the consolidated statement of operations.

Interest, fee and dividend income. Interest and dividend income is recorded on the accrual basis to the extent that the Fund
expects to collect such amounts. Interest and dividend income is accrued based upon the outstanding principal amount and contractual terms of debt and preferred equity investments. Distributions of earnings from portfolio companies are evaluated to
determine if the distribution is income or a return of capital.

The Fund has investments in our portfolio that contain a
payment-in-kind interest or dividends provision, which represents contractual interest or dividends that are added to the principal balance and is recorded as income. The Fund stops accruing payment-in-kind interest when it is determined that
payment-in-kind interest is no longer collectible.

In connection with the Funds debt investments, the Fund will
sometimes receive warrants or other equity-related securities (Warrants). The Fund determines the cost basis of Warrants based upon their respective fair values on the date of receipt in proportion to the total fair value of the debt and
Warrants received. Any resulting difference between the face amount of the debt and its recorded fair value resulting from the assignment of value to the Warrants is treated as original issue discount (OID), and accreted into interest
income based on the effective interest method over the life of the debt security.



12



---

##### Table of Contents

Prior to the Formation Transactions, and in accordance with the prior limited partnership
agreement, the Fund historically recorded transaction fees provided in connection with the Funds investments as a direct offset to management fee expense. After completion of the Formation Transactions, all transaction fees received in
connection with the Funds investments are recognized as income. Such fees typically include fees for services, including structuring and advisory services, provided to portfolio companies. The Fund recognizes income from fees for providing
such structuring and advisory services when the services are rendered or the transactions are completed. Upon the prepayment of a loan or debt security, any prepayment penalties are recorded as fee income when received. Fee income from structuring
and advisory services and prepayment penalties for the three and nine months ended September 30, 2011 totaled $279,375 and $419,792, respectively.

The Fund also typically receives upfront loan origination or closing fees in connection with investments. After completion of the Formation Transactions, such upfront loan origination and closing fees are
capitalized as unearned income offset against investments on our balance sheet and amortized as additional interest income over the life of the investment.

Non-accrual. Loans or preferred equity securities are placed on non-accrual status when principal, interest or dividend payments become materially past due, or when there is reasonable doubt that
principal, interest or dividends will be collected. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon managements judgment. Non-accrual loans are restored to accrual status when
past due principal, interest or dividends are paid and, in managements judgment, are likely to remain current.

Income taxes:Because the Fund is wholly-owned by FIC, the Fund is disregarded for federal tax purposes and, therefore, is treated
as a division of FIC. Accordingly, the Fund is not subject to federal income taxes and FIC is treated as realizing all of the Funds items of income, gain, deductions, loss and credit for federal income tax purposes.

The Fund has certain indirect wholly-owned taxable subsidiaries (the Taxable Subsidiaries), each of which generally holds one
of its portfolio investments listed on the consolidated schedule of investments. The Taxable Subsidiaries are consolidated for financial reporting purposes, such that the Funds consolidated financial statements reflect the Funds
investment in the portfolio companies owned by the Taxable Subsidiaries. The purpose of the Taxable Subsidiaries is to permit FIC to indirectly hold equity investments in portfolio companies that are organized as limited liability companies
(LLCs) (or other forms of pass through entities) in order to allow FIC to comply with the source income requirements contained in the RIC tax provisions. The Taxable Subsidiaries are not consolidated with FIC for income tax
purposes and may generate either income from any tax distributions received from the portfolio company or income tax expense as a result of their ownership of the portfolio companies. Any such income or expense is reflected in the consolidated
statements of operations.

ASC Topic 740  Accounting for Uncertainty in Income Taxes(ASC Topic 740)
provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the consolidated financial statements. ASC Topic 740 requires the evaluation of tax positions taken in the course of preparing the
Funds tax returns to determine whether the tax positions are more-likely-than-not to be sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the more-likely-than-not threshold would be recorded as
a tax expense in the current year. It is the Funds policy to recognize accrued interest and penalties related to uncertain tax benefits in income tax expense. There were no material uncertain income tax positions at September 30, 2011 and
December 31, 2010. The 2008 through 2010 tax years remain subject to examination by U.S. federal and most state tax authorities.

Allocations and distributions of the Fund:Prior to the consummation of the Formation Transactions, net profits and losses were generally allocated to the partners of the Fund as follows: first,
100% to all partners in proportion to their respective commitments until the cumulative amount of net profit allocated to the limited partners equals the preferred return, as defined in the partnership agreement; second, 100% to the general partner
until the general partner has been allocated on a cumulative basis an amount of net profit equal to 20% of the cumulative amounts previously allocated to all partners; and thereafter, 80% to all partners in proportion to their respective
commitments, and 20% to the general partner.

In addition, prior to the consummation of the Formation Transactions,
distributions from the Fund were made in the following order and amounts: first, 100% to all partners in proportion to their respective commitments until the limited partners have received distributions equal to their funded capital contributions
related to investments or partnership expenses, as of the date of distribution; second, 100% to all partners in proportion to their respective commitments until the limited partners have received current or prior distributions equal to the preferred
return, as defined in the partnership agreement, as of the date of distribution; third, to the general partner until the general partner has received current or prior distributions (including tax distributions attributable to its carried interest,
as defined in the partnership agreement) equal to 20% of the cumulative distributions made to all partners; and any remaining balance was distributed 80% to all partners in proportion to their respective commitments, and 20% to the general partner.
The partnership agreement also included, among other things, provisions for in-kind distributions, escrow of certain distributions and tax distributions. The Funds ability to make distributions is limited by the SBIC Act. In the nine months
ended September 30, 2011 and 2010, the Fund made distributions totaling $1,500,000 to its partners in each period.



13



---

##### Table of Contents

Recent accounting pronouncements:In May 2011 the FASB issued Accounting Standards
Update (ASU) 2011-04, 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) (ASU
2011-04). ASU 2011-04 represents the converged guidance of the FASB and the International Accounting Standards Board (IASB) (collectively, the Boards) on fair value measurement. The collective efforts of the Boards and
their staffs, reflected in ASU 2011-04, have resulted in common requirements for measuring fair value and for disclosing information about fair value measurements, including a consistent meaning of the term fair value and enhanced
disclosure requirements for investments that do not have readily determinable fair values. The Boards have concluded the common requirements will result in greater comparability of fair value measurements presented and disclosed in financial
statements prepared in accordance with GAAP and IFRSs. The amendments to the FASB Codification in ASU 2011-04 are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after
December 15, 2011. Early application by public entities is not permitted. The Fund is currently assessing the impact of ASU 2011-04 on its future consolidated financial statements.

Note 3. Portfolio Company Investments

The Funds portfolio
investments principally consist of secured and unsecured debt, equity warrants and direct equity investments in privately held companies. The debt investments may or may not be secured by either a first or second lien on the assets of the portfolio
company. The debt investments generally bear interest at fixed rates, and generally mature between five and seven years from the original investment. In connection with a debt investment, the Fund also often receives nominally priced equity warrants
and/or makes direct equity investments. The Funds warrants or equity investments may be in a holding company related to the portfolio company. In addition, the Fund periodically makes equity investments in its portfolio companies through
wholly-owned taxable subsidiaries that own the equity securities of the underlying operating companies. In both situations, the name of the operating company is reflected on the consolidated schedule of investments.

As of September 30, 2011, the Fund had debt and equity investments in 22 portfolio companies with an aggregate fair value of
$180,115,222 and a weighted average effective yield on its debt investments of 15.5%. At September 30, 2011, the Fund held equity ownership in 81.8% of its portfolio companies and the average fully diluted equity ownership in those portfolio
companies was 8.7%. As of December 31, 2010, the Fund held debt and equity investments in 17 portfolio companies with an aggregate fair value of $141,341,478 and a weighted average effective yield on its debt investments of 15.0%. At
December 31, 2010, the Fund held equity ownership in 82.4% of its portfolio companies and the average fully diluted equity ownership in those portfolio companies was 8.8%. The weighted average yields were computed using the effective interest
rates for all debt investments at cost as of September 30, 2011 and December 31, 2010, including accretion of original issue discount but excluding any debt investments on non-accrual status.

Purchases of debt and equity investments for the nine months ended September 30, 2011 and 2010 totaled $37,641,858 and $13,401,778,
respectively. Repayments of portfolio investments for the nine months ended September 30, 2011 and 2010 totaled $5,285,791 and $13,612,240, respectively. During the three months ended September 30, 2011, one of the Companys senior
secured loans in the amount of $4,139,000 was converted to a subordinated note in a non-cash exchange.



14



---

##### Table of Contents

Investments by type with corresponding percentage of total portfolio investments consisted
of the following:



|                     |  |                    |             |  |                   |  |       |   |  |   |             |  |  |  |       |  
|-------------------- |  | ------------------ | ----------- |  | ----------------- |  | ----- | - |  | - | ----------- |  |  |  | ----- | -
|                     |  | September 30, 2011 |             |  | December 31, 2010 | 
|Cost:                |  |                    |             |  |                   |  |       |   |  |   |             |  |  |  |       |  
|Senior secured loans |  | $                  | 22,844,734  |  |                   |  | 13.2  | % |  | $ | 19,468,293  |  |  |  | 13.4  | %
|Subordinated notes   |  |                    | 132,685,176 |  |                   |  | 76.6  |   |  |   | 104,864,032 |  |  |  | 72.2  |  
|Equity               |  |                    | 13,679,039  |  |                   |  | 7.9   |   |  |   | 17,452,154  |  |  |  | 12.0  |  
|Warrants             |  |                    | 3,994,740   |  |                   |  | 2.3   |   |  |   | 3,521,962   |  |  |  | 2.4   |  
|                     |  |                    |             |  |                   |  |       |   |  |   |             |  |  |  |       |  
|Total                |  | $                  | 173,203,689 |  |                   |  | 100.0 | % |  | $ | 145,306,441 |  |  |  | 100.0 | %
|                     |  |                    |             |  |                   |  |       |   |  |   |             |  |  |  |       |  
|Fair value:          |  |                    |             |  |                   |  |       |   |  |   |             |  |  |  |       |  
|Senior secured loans |  | $                  | 19,487,804  |  |                   |  | 10.8  | % |  | $ | 16,302,829  |  |  |  | 11.6  | %
|Subordinated notes   |  |                    | 133,472,444 |  |                   |  | 74.1  |   |  |   | 106,323,193 |  |  |  | 75.2  |  
|Equity               |  |                    | 14,576,439  |  |                   |  | 8.1   |   |  |   | 13,622,546  |  |  |  | 9.6   |  
|Warrants             |  |                    | 12,578,535  |  |                   |  | 7.0   |   |  |   | 5,092,910   |  |  |  | 3.6   |  
|                     |  |                    |             |  |                   |  |       |   |  |   |             |  |  |  |       |  
|Total                |  | $                  | 180,115,222 |  |                   |  | 100.0 | % |  | $ | 141,341,478 |  |  |  | 100.0 | %
|                     |  |                    |             |  |                   |  |       |   |  |   |             |  |  |  |       |  

All investments made by the Fund as of September 30, 2011 and December 31, 2010 were made in
portfolio companies located in the United States. The following tables show portfolio composition by geographic region at cost and fair value and as a percentage of total investments. The geographic composition is determined by the location of the
corporate headquarters of the portfolio company, which may not be indicative of the primary source of the portfolio companys business.



|            |  |                    |             |  |                   |  |       |   |  |   |             |  |  |  |       |  
|----------- |  | ------------------ | ----------- |  | ----------------- |  | ----- | - |  | - | ----------- |  |  |  | ----- | -
|            |  | September 30, 2011 |             |  | December 31, 2010 | 
|Cost:       |  |                    |             |  |                   |  |       |   |  |   |             |  |  |  |       |  
|Midwest     |  | $                  | 61,224,797  |  |                   |  | 35.4  | % |  | $ | 40,796,916  |  |  |  | 28.1  | %
|Southwest   |  |                    | 31,865,052  |  |                   |  | 18.4  |   |  |   | 30,239,168  |  |  |  | 20.8  |  
|Northeast   |  |                    | 28,107,484  |  |                   |  | 16.2  |   |  |   | 29,452,499  |  |  |  | 20.3  |  
|Southeast   |  |                    | 28,263,251  |  |                   |  | 16.3  |   |  |   | 26,467,585  |  |  |  | 18.2  |  
|West        |  |                    | 23,743,105  |  |                   |  | 13.7  |   |  |   | 18,350,273  |  |  |  | 12.6  |  
|            |  |                    |             |  |                   |  |       |   |  |   |             |  |  |  |       |  
|Total       |  | $                  | 173,203,689 |  |                   |  | 100.0 | % |  | $ | 145,306,441 |  |  |  | 100.0 | %
|            |  |                    |             |  |                   |  |       |   |  |   |             |  |  |  |       |  
|Fair value: |  |                    |             |  |                   |  |       |   |  |   |             |  |  |  |       |  
|Midwest     |  | $                  | 62,577,743  |  |                   |  | 34.7  | % |  | $ | 43,401,076  |  |  |  | 30.7  | %
|Southwest   |  |                    | 41,113,590  |  |                   |  | 22.8  |   |  |   | 34,914,855  |  |  |  | 24.7  |  
|Northeast   |  |                    | 28,091,173  |  |                   |  | 15.6  |   |  |   | 21,805,502  |  |  |  | 15.4  |  
|Southeast   |  |                    | 28,428,141  |  |                   |  | 15.8  |   |  |   | 26,809,225  |  |  |  | 19.0  |  
|West        |  |                    | 19,904,575  |  |                   |  | 11.1  |   |  |   | 14,410,820  |  |  |  | 10.2  |  
|            |  |                    |             |  |                   |  |       |   |  |   |             |  |  |  |       |  
|Total       |  | $                  | 180,115,222 |  |                   |  | 100.0 | % |  | $ | 141,341,478 |  |  |  | 100.0 | %
|            |  |                    |             |  |                   |  |       |   |  |   |             |  |  |  |       |  

At September 30, 2011, the Fund had one portfolio company investment that represented more than 10%
of the total investment portfolio. Such investment represented 15.5% of the fair value of the portfolio and 11.2% of cost as of September 30, 2011. At December 31, 2010, the Fund had two portfolio company investments that each represented
more than 10% of the total investment portfolio. Such investments represented 24.8% of the fair value of the portfolio and 21.1% of cost as of December 31, 2010.

As of September 30, 2011, there was one investment on non-accrual status which comprised 0.0% of the total portfolio on a fair value basis and 2.6% of the portfolio on a cost basis. As of
December 31, 2010, there was one investment on non-accrual status which comprised 0.0% of the total portfolio on a fair value basis, and 5.5% of the total portfolio on a cost basis. The investment on non-accrual status at December 31, 2010
was written off in the first quarter of 2011.

Note 4. Fair Value Measurements

The Fund has established and documented processes and methodologies for determining the fair values of portfolio company investments on a
recurring basis in accordance with ASC Topic 820. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available,
fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available or reliable, valuation techniques are applied. Because the Funds portfolio investments
generally do not have readily ascertainable market values, the Fund values its portfolio investments at fair value, as determined in good faith by the Board of Directors (Board), based on the input of the Funds investment advisor,
the audit committee and an independent valuation firm, and under a valuation policy and a consistently applied valuation process.



15



---

##### Table of Contents

Portfolio investments recorded at fair value in the consolidated financial statements are
classified based upon the level of judgment associated with the inputs used to measure their value, as defined below:

Level 1 Investments whose values are based on unadjusted, quoted prices for identical assets in an active market.

Level 2 Investments whose values are based on quoted prices for similar assets in markets that are not active
or model inputs that are observable, either directly or indirectly, for substantially the full term of the investment.

Level 3 Investments whose values are based on inputs that are both unobservable and significant to the overall fair value
measurement. The inputs into the determination of fair value are based upon the best information available and may require significant management judgment or estimation.

An investments categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Funds investment portfolio is
comprised of debt and equity securities of privately held companies for which quoted prices falling within the categories of Level 1 and Level 2 inputs are not available. Accordingly, the degree of judgment exercised by the Fund in determining fair
value is greatest for investments classified as Level 3. As of September 30, 2011 and December 31, 2010, all of the Funds portfolio company investments are classified as Level 3. The fair value of the Funds total portfolio
investments at September 30, 2011 and December 31, 2010 was $180,115,222 and $141,341,478, respectively.

With
respect to investments for which market quotations are not readily available, the Funds board of directors undertakes a multi-step valuation process each quarter, as described below:



| |  |  | the quarterly valuation process begins with each portfolio company or investment being initially evaluated and rated by the investment
professionals of 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 September 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 49.3%
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.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In making the good faith
determination of the value of portfolio investments, the Fund starts with the cost basis of the security, which includes the amortized original issue discount and payment-in-kind interest or dividends, if any. The transaction price is typically the
best estimate of fair value at inception. When evidence supports a subsequent change to the carrying value from the original transaction price, adjustments are made to reflect the expected exit values. The Fund performs detailed valuations of its
debt and equity investments on an individual basis, using market, income and yield approaches as appropriate.

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



16



---

##### Table of Contents

Under the income approach, the Fund prepares and analyzes discounted cash flow models based
on projections of the future free cash flows (or earnings) of the portfolio company. In determining the fair value under the income approach, the Fund considers various factors, including but not limited to the portfolio companys projected
financial results, applicable market trading and transaction comparables, applicable market yields and leverage levels, the markets in which the portfolio company does business, and comparisons of financial ratios of peer companies that are public.

Under the yield approach, the Fund uses discounted cash flow models to determine the present value of the future cash flow
streams of its debt investments, based on future interest and principal payments as set forth in the associated loan agreements. In determining fair value under the yield approach, the Fund also considers the following factors: applicable market
yields and leverage levels, credit quality, prepayment penalties, estimated remaining life, the nature and realizable value of any collateral, the portfolio companys ability to make payments, and changes in the interest rate environment and
the credit markets that generally may affect the price at which similar investments may be made. The Fund estimates the remaining life of its debt investments to generally be the legal maturity date of the instrument, as the Fund generally intends
to hold its loans to maturity. However, if the Fund has information available to it that the loan is expected to be repaid in the near term, it would use an estimated remaining life based on the expected repayment date.

For the Funds Control investments, the Fund determines the fair value of debt and equity investments using a combination of market
and income approaches. The valuation approaches for the Funds Control investments estimate the value of the investment if it were to sell, or exit, the investment, assuming the highest and best use of the investment by market participants. In
addition, these valuation approaches consider the value associated with the Funds ability to influence the capital structure of the portfolio company, as well as the timing of a potential exit.

For the Funds Affiliate or Non-Control/Non-Affiliate equity investments, the Fund uses a combination of market and income
approaches as described above to determine the fair value.

For Affiliate or Non-Control/Non-Affiliate debt investments, the
Fund generally uses the yield approach to determine fair value, as long as it is appropriate. If there is deterioration in credit quality or a debt investment is in workout status, the Fund may consider other factors in determining the fair value,
including the value attributable to the debt investment from the enterprise value of the portfolio company or the proceeds that would be received in a liquidation analysis.

Due to the inherent uncertainty in the valuation process, the Boards estimate of fair value may differ materially from the values that would have been used had a ready market for the securities
existed. In addition, changes in the market environment, portfolio company performance and other events that may occur over the lives of the investments may cause the gains or losses ultimately realized on these investments to be materially
different than the valuations currently assigned.

The Funds investments are subject to market risk. Market risk is the
potential for changes in the value of investments due to market changes. Market risk is directly impacted by the volatility and liquidity in the markets in which the investments are traded.



17



---

##### Table of Contents

Financial instruments classified as Level 3 in the fair value hierarchy represent the
Funds investments in portfolio companies, see the consolidated schedules of investments for further description. The following table presents a reconciliation of activity for the Level 3 financial instruments:



|                                           |  |                    |            |   |                   |   |             |        |  |   |            |   |  |       |            |   |  |   |             |  
|------------------------------------------ |  | ------------------ | ---------- | - | ----------------- | - | ----------- | ------ |  | - | ---------- | - |  | ----- | ---------- | - |  | - | ----------- | -
|                                           |  | SeniorSecuredLoans |            |   | SubordinatedNotes |   |             | Equity |  |   | Warrants   |   |  | Total |           
|Balance, December 31, 2009                 |  | $                  | 14,801,858 |   |                   | $ | 89,203,733  |        |  | $ | 17,690,221 |   |  | $     | 1,204,444  |   |  | $ | 122,900,256 |  
|Realized loss on investments               |  |                    |           |   |                   |   |            |        |  |   | (3,307     | ) |  |       |           |   |  |   | (3,307      | )
|Net unrealized appreciation (depreciation) |  |                    | (2,158,709 | ) |                   |   | 232,114     |        |  |   | (7,397,585 | ) |  |       | 1,522,256  |   |  |   | (7,801,924  | )
|Purchases of investment securities         |  |                    | 250,000    |   |                   |   | 12,398,471  |        |  |   | 3,307      |   |  |       | 750,000    |   |  |   | 13,401,778  |  
|Repayments of investments received         |  |                    | (700,000   | ) |                   |   | (12,912,240 | )      |  |   |           |   |  |       |           |   |  |   | (13,612,240 | )
|Interest and dividend income paid-in-kind  |  |                    |           |   |                   |   | 2,866,625   |        |  |   | 407,024    |   |  |       |           |   |  |   | 3,273,649   |  
|Accretion of original issue discount       |  |                    | 127,985    |   |                   |   | 224,202     |        |  |   | 127,795    |   |  |       |           |   |  |   | 479,982     |  
|                                           |  |                    |            |   |                   |   |             |        |  |   |            |   |  |       |            |   |  |   |             |  
|Balance, September 30, 2010                |  | $                  | 12,321,134 |   |                   | $ | 92,012,905  |        |  | $ | 10,827,455 |   |  | $     | 3,476,700  |   |  | $ | 118,638,194 |  
|                                           |  |                    |            |   |                   |   |             |        |  |   |            |   |  |       |            |   |  |   |             |  
|                                           |  |                    |            |   |                  
|Balance, December 31, 2010                 |  | $                  | 16,302,829 |   |                   | $ | 106,323,193 |        |  | $ | 13,622,546 |   |  | $     | 5,092,910  |   |  | $ | 141,341,478 |  
|Realized loss on investments               |  |                    |           |   |                   |   |            |        |  |   | (6,627,973 | ) |  |       | (1,307,457 | ) |  |   | (7,935,430  | )
|Net unrealized appreciation (depreciation) |  |                    | (234,748   | ) |                   |   | (628,611    | )      |  |   | 4,727,008  |   |  |       | 7,012,848  |   |  |   | 10,876,497  |  
|Purchases of investment securities         |  |                    | 7,972,362  |   |                   |   | 25,406,798  |        |  |   | 2,482,464  |   |  |       | 1,780,234  |   |  |   | 37,641,858  |  
|Repayments of investments received         |  |                    | (500,000   | ) |                   |   | (4,785,791  | )      |  |   |           |   |  |       |           |   |  |   | (5,285,791  | )
|Non-cash conversion of security types      |  |                    | (4,139,000 | ) |                   |   | 4,139,000   |        |  |   |           |   |  |       |           |   |  |   |            |  
|Interest and dividend income paid-in-kind  |  |                    |           |   |                   |   | 2,753,769   |        |  |   | 371,490    |   |  |       |           |   |  |   | 3,125,259   |  
|Loan origination fees received             |  |                    | (49,000    | ) |                   |   | (95,500     | )      |  |   |           |   |  |       |           |   |  |   | (144,500    | )
|Accretion of origination fees              |  |                    | 1,531      |   |                   |   | 2,272       |        |  |   |           |   |  |       |           |   |  |   | 3,803       |  
|Accretion of original issue discount       |  |                    | 133,830    |   |                   |   | 357,314     |        |  |   | 904        |   |  |       |           |   |  |   | 492,048     |  
|                                           |  |                    |            |   |                   |   |             |        |  |   |            |   |  |       |            |   |  |   |             |  
|Balance, September 30, 2011                |  | $                  | 19,487,804 |   |                   | $ | 133,472,444 |        |  | $ | 14,576,439 |   |  | $     | 12,578,535 |   |  | $ | 180,115,222 |  
|                                           |  |                    |            |   |                   |   |             |        |  |   |            |   |  |       |            |   |  |   |             |  

The total change in unrealized appreciation (depreciation) included in the consolidated statements of
operations attributable to Level 3 investments still held at September 30, 2011 and 2010, was $2,947,553 and $(7,801,924), respectively.

Note 5. Related Party Transactions

Prior management agreement:Prior to the consummation of the Formation Transactions, the Fund and Fidus Mezzanine Capital GP, LLC, the Funds general partner prior to the consummation of the
Formation Transactions, had entered into a management agreement with Fidus Capital, LLC to manage the day-to-day operational and investment activities of the Fund. The Fund paid Fidus Capital, LLC, each fiscal quarter in advance, 0.5% of the sum of
(i) the Funds Regulatory Capital (as defined in the SBIC Act), (ii) any Permitted Distribution as defined by the previous partnership agreement, and (iii) an assumed two tiers (two times) of outstanding SBA debenture leverage on
the sum of clauses (i) and (ii) up to the maximum amount as determined by the SBA, currently $150.0 million. Under the previous agreement, gross management fees for the three and nine months ended September 30, 2011 were $0 and
$1,958,755 and were partially offset by the management fee offset (transaction fees received in connection with the Funds investments) of $0 and $430,208, respectively. Gross management fees under the previous management agreement for the
three and nine months ended September 30, 2010 totaled $1,036,213 and $3,108,333 and were partially offset by the management fee offset of $49,240 and $339,240, respectively.

New partnership agreement:Fidus Investment GP, LLC, the Funds general partner following the consummation of the Formation
Transactions, entered into a new limited partnership agreement with FIC, in its capacity as sole limited partner of the Fund, which allows for Fidus Investment Advisors LLC to manage the day-to-day operating and investing activity of the Fund. For
providing these services, the Investment Advisor receives a base management fee. The base management fee is calculated at an annual rate of 1.75% based on the average value of total assets (other than cash or cash equivalents but including assets
purchased with borrowed amounts) at the end of the two most recently completed calendar quarters. However, for services rendered prior to the Funds first full quarter of operations, the base management fee is payable monthly in arrears. For
services rendered after such time, the base management fee is payable quarterly in arrears. Up to and including the first full calendar quarter of the Funds operations, the base management fee is calculated based on the initial value of the
Funds total assets (other than cash or cash equivalents but including asset with borrowed amounts) at the closing of the Formation Transactions. The base management fee under the new agreement for the three and nine months ended
September 30, 2011 totaled $705,159 and $781,807, respectively.

During June 2011, the Fund received a capital
contribution of $21,102,986 from FIC from the proceeds of the Offering.

Note 6. Debt

Credit facility:In April 2009, the Fund obtained an $8,000,000 unsecured line of credit with
American Bank & Trust. In June 2010, the Fund amended its unsecured line of credit, decreasing the committed amount to $5,000,000 and extending the term to June 3, 2011. In June 2011, the Fund amended the agreement to extend the term
to September 3, 2011. On June 27, 2011, the Fund repaid the line of credit in full and terminated the agreement. Interest accrued monthly at an annual rate of 6%. There were no principal borrowings outstanding on the unsecured line of
credit as of December 31, 2010. For both the three months ended September 30, 2011 and 2010, interest and fee amortization expense on the unsecured line of credit amounted to $0. For the nine months ended September 30, 2011 and 2010,
interest and fee amortization expense on the unsecured line of credit amounted to $39,572 and $11,667, respectively.



18



---

##### Table of Contents

SBA debentures:The Fund uses debenture leverage provided through the SBA to fund a
portion of its investment portfolio. The SBA made an initial commitment to issue $100,000,000 in the form of debenture securities to the Fund on or before September 30, 2012, and during 2010 made a commitment to issue an additional $30,000,000
on or before September 30, 2014. Unused commitments at September 30, 2011 and December 31, 2010 were $33,250,000 and $36,500,000, respectively. The SBA may limit the amount that may be drawn each year under these commitments, and each
issuance of leverage is conditioned on the Funds full compliance, as determined by the SBA, with the terms and conditions set forth in the SBIC Act.

As of September 30, 2011 and December 31, 2010, the Fund has issued SBA debentures which mature as follows:



|                |  |              |          |  |                    |  |       |                   |  |   |                  |  |  |   |            | 
|--------------- |  | ------------ | -------- |  | ------------------ |  | ----- | ----------------- |  | - | ---------------- |  |  | - | ---------- | 
|Pooling Date(1) |  | MaturityDate |          |  | FixedInterest Rate |  |       | September 30,2011 |  |   | December 31,2010 | 
|3/26/2008       |  |              | 3/1/2018 |  |                    |  | 6.188 | %                 |  | $ | 24,750,000       |  |  | $ | 24,750,000 | 
|9/24/2008       |  |              | 9/1/2018 |  |                    |  | 6.442 |                   |  |   | 11,950,000       |  |  |   | 11,950,000 | 
|3/25/2009       |  |              | 3/1/2019 |  |                    |  | 5.337 |                   |  |   | 19,750,000       |  |  |   | 19,750,000 | 
|9/23/2009       |  |              | 9/1/2019 |  |                    |  | 4.950 |                   |  |   | 10,000,000       |  |  |   | 10,000,000 | 
|3/24/2010       |  |              | 3/1/2020 |  |                    |  | 4.825 |                   |  |   | 13,000,000       |  |  |   | 13,000,000 | 
|9/22/2010       |  |              | 9/1/2020 |  |                    |  | 3.932 |                   |  |   | 12,500,000       |  |  |   | 12,500,000 | 
|3/29/2011       |  |              | 3/1/2021 |  |                    |  | 4.801 |                   |  |   | 1,550,000        |  |  |   | 1,550,000  | 
|9/21/2011       |  |              | 9/1/2021 |  |                    |  | 3.594 |                   |  |   | 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.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Interest on SBA debentures is payable semi-annually on March 1 and
September 1. For the three months ended September 30, 2011 and 2010, interest and fee amortization expense on outstanding SBA debentures amounted to $1,376,205 and $1,270,979, respectively. For the nine months ended September 30, 2011
and 2010, interest and fee amortization expense on outstanding SBA debentures amounted to $4,055,685 and $3,596,916, respectively. As of September 30, 2011 and December 31, 2010, accrued interest payable totaled $417,760 and $1,638,862,
respectively. The weighted average fixed interest rate for all SBA debentures as of both September 30, 2011 and December 31, 2010 was 5.3%.

Deferred financing costs as of September 30, 2011 and December 31, 2010, are as follows:



|                              |  |                   |            |   |                  |   |           |  
|----------------------------- |  | ----------------- | ---------- | - | ---------------- | - | --------- | -
|                              |  | September 30,2011 |            |   | December 31,2010 |  
|SBA debenture commitment fees |  | $                 | 1,300,000  |   |                  | $ | 1,300,000 |  
|SBA debenture leverage fees   |  |                   | 2,346,188  |   |                  |   | 2,267,375 |  
|Line of credit fees           |  |                   |           |   |                  |   | 40,000    |  
|                              |  |                   |            |   |                  |   |           |  
|Subtotal                      |  |                   | 3,646,188  |   |                  |   | 3,607,375 |  
|Accumulated amortization      |  |                   | (1,043,612 | ) |                  |   | (812,118  | )
|                              |  |                   |            |   |                  |   |           |  
|Net deferred financing costs  |  | $                 | 2,602,576  |   |                  | $ | 2,795,257 |  
|                              |  |                   |            |   |                  |   |           |  

Note 7. Commitments and Contingencies

Commitments:As of September 30, 2011, the Fund had two off-balance sheet arrangements with two portfolio companies consisting of $4,700,000 of unfunded commitments to provide debt financing.
At December 31, 2010, the Fund had one outstanding revolver commitment to a portfolio company for $500,000, all of which was unfunded. Such commitments involve elements of credit risk in excess of the amounts recognized in the consolidated
statements of assets and liabilities.

Indemnifications:In the normal course of business, the Fund enters into
contracts and agreements that contain a variety of representations and warranties that provide indemnifications under certain circumstances. The Funds maximum exposure under these arrangements is unknown, as this would involve future claims
that may be made against the Fund that have not yet occurred. The Fund expects the risk of future obligation under these indemnifications to be remote.

Legal proceedings:In the normal course of business, the Fund may be subject to legal and regulatory proceedings that are generally incidental to its ongoing operations. While the outcome of these
legal proceedings cannot be predicted with certainty, the Fund does not believe these proceedings will have a material adverse effect on the Funds consolidated financial statements.



19



---

##### Table of Contents

Note 8. Financial Highlights

The following is a schedule of financial highlights for the nine months ended September 30, 2011 and 2010:



|                                             |  |                                 |            |   |         |   |            |   
|-------------------------------------------- |  | ------------------------------- | ---------- | - | ------- | - | ---------- | --
|                                             |  | Nine Months Ended September 30, |           
|                                             |  | 2011(1)                         |            |   | 2010(1) |  
|Ratio to average net assets (annualized)(2): |  |                                 |            |   |         |   |            |   
|Total expenses                               |  |                                 | 12.5       | % |         |   | 20.2       | % 
|Net investment income                        |  |                                 | 16.8       | % |         |   | 18.6       | % 
|Total return(3)                              |  |                                 | 16.7       | % |         |   | (3.3       | )%
|Net assets at end of period                  |  | $                               | 90,761,030 |   |         | $ | 45,491,203 |   
|Average debt outstanding                     |  | $                               | 95,312,500 |   |         | $ | 88,825,000 |   
|Portfolio turnover ratio (annualized)        |  |                                 | 4.5        | % |         |   | 14.3       | % 



|(1) | Ratios and information presented above combine amounts for both the managing investors (the general partner) and the non-managing investors (limited partners).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Average net assets used for annualized ratios, based on the average of the beginning and ending amounts of each quarter in the period.
|--- | --------------------------------------------------------------------------------------------------------------------------------------

|(3) | 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.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

These financial highlights may not be indicative of the future performance of the Fund.



20



---

##### 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 U.S. Securities and Exchange Commission
(SEC) on June 22, 2011, in accordance with Rule 497 of the Securities Act of 1933, as amended (the 1933 Act). 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.

Except as
otherwise specified, references to we, us, and our refer to Fidus Mezzanine Capital, L.P. and its consolidated subsidiaries.

Forward Looking Statements

Some of the statements in this quarterly report
on Form 10-Q contain forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our
current and prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as anticipates, expects, intends, plans, believes, seeks,
estimates, would, should, targets, projects and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of
future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking
statements, including without limitation:



| |  |  | our inexperience operating a business development company;
| | - |  | ----------------------------------------------------------



| |  |  | our dependence on key personnel of our investment advisor;
| | - |  | ----------------------------------------------------------



| |  |  | our ability to maintain or develop referral relationships;
| | - |  | ----------------------------------------------------------



| |  |  | our ability to manage our business effectively;
| | - |  | -----------------------------------------------



| |  |  | our use of leverage;
| | - |  | --------------------



| |  |  | uncertain valuations of our portfolio investments;
| | - |  | --------------------------------------------------



| |  |  | competition for investment opportunities;
| | - |  | -----------------------------------------



| |  |  | actual and potential conflicts of interest with our investment advisor;
| | - |  | -----------------------------------------------------------------------



| |  |  | constraint on investment due to access to material nonpublic information;
| | - |  | -------------------------------------------------------------------------



| |  |  | other potential conflicts of interest;
| | - |  | --------------------------------------



| |  |  | SBA regulations affecting us operating as an SBIC fund;
| | - |  | -------------------------------------------------------



| |  |  | changes in interest rates;
| | - |  | --------------------------



| |  |  | the impact of a protracted decline in the liquidity of credit markets on our business and portfolio investments;
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | fluctuations in our quarterly operating results;
| | - |  | ------------------------------------------------



| |  |  | our ability to maintain our qualification as a business development company;
| | - |  | ----------------------------------------------------------------------------



| |  |  | risks associated with the timing, form and amount of any distributions;
| | - |  | -----------------------------------------------------------------------



| |  |  | changes in laws or regulations applicable to us;
| | - |  | ------------------------------------------------



| |  |  | our ability to obtain exemptive relief from the SEC;
| | - |  | ----------------------------------------------------



| |  |  | possible resignation of our investment advisor;
| | - |  | -----------------------------------------------



| |  |  | the general economy and its impact on the industries in which we invest;
| | - |  | ------------------------------------------------------------------------



| |  |  | risks associated with investing in lower middle-market companies;
| | - |  | -----------------------------------------------------------------



| |  |  | our ability to invest in qualifying assets; and
| | - |  | -----------------------------------------------



| |  |  | our ability to identify and timely close on investment opportunities.
| | - |  | ---------------------------------------------------------------------

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions
could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this
quarterly report on Form 10-Q should not be regarded as a representation by us that our plans and objectives will be achieved. These risks and uncertainties include those described or identified in Risk Factors in our prospectus dated
June 20, 2011, filed with the SEC on June 22, 2011 in accordance with Rule 497 of the 1933 Act. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this quarterly report on Form 10-Q.
The forward-looking statements and projections contained in this quarterly report on Form 10-Q are excluded from the safe harbor protection provided by Section 27A of the 1933 Act.



21



---

##### Table of Contents

Business Overview

We provide customized mezzanine debt and equity financing solutions to lower middle-market companies, which we define as U.S. based companies having revenues between $10.0 million and $150.0 million. We
were formed in February 2007 and are licensed by the United States Small Business Administration (SBA) as a Small Business Investment Company (SBIC). Our investment objective is to provide attractive risk-adjusted returns by
generating both current income from our debt investments and capital appreciation from our equity related investments. Our investment strategy includes partnering with business owners, management teams and financial sponsors by providing customized
financing for ownership transactions, recapitalizations, strategic acquisitions, business expansion and other growth initiatives. We seek to maintain a diversified portfolio of investments in order to help mitigate the potential effects of adverse
economic events related to particular companies, regions or industries.

Fidus Investment Corporation (FIC) was
formed as a Maryland corporation on February 14, 2011. On June 20, 2011, FIC acquired all of the limited partnership interests of the Fund and membership interests of Fidus Mezzanine Capital GP, LLC, its general partner, through the
Formation Transactions (as defined in Note 1 to the consolidated financial statements), resulting in the Fund becoming a wholly-owned SBIC subsidiary of FIC. Immediately following the Formation Transactions, the Fund elected to be treated as a
business development company (BDC) under the Investment Company Act of 1940, as amended (the 1940 Act) and our investment activities have been managed by Fidus Investment Advisors, LLC (our Investment Advisor) and
supervised by our board of directors.

We are eligible to sell debentures guaranteed by the SBA to the capital markets at
favorable interest rates and invest these funds in portfolio companies. We intend to continue to operate as an SBIC, subject to SBA approval, and to utilize the proceeds of the sale of SBA-guaranteed debentures, to make additional investments. As of
September 30, 2011, we had investments in 22 portfolio companies with an aggregate fair value of $180.1 million and cost of $173.2 million.

In connection with FICs initial public offering of common stock and our election to be regulated as a BDC, we applied for exemptive relief from the SEC on March 15, 2011 and filed an amended
application on August 9, 2011 to allow us to take certain actions that would otherwise be prohibited by the 1940 Act, as applicable to BDCs. The requested relief would permit Fidus Investment Corporation and Fidus Mezzanine Capital, L.P. to
operate effectively as one company, specifically allowing them to: (1) engage in certain transactions with each other; (2) invest in securities in which the other is or proposes to be an investor; (3) file consolidated reports with
the Commission; and (4) be subject to modified consolidated asset coverage requirements issued by a BDC and its SBIC subsidiary. The fourth exemption described would allow FIC to exclude any indebtedness guaranteed by the SBA and issued by us
from the applicable 200% asset coverage requirements. While the SEC has granted exemptive relief in substantially similar circumstances in the past, no assurance can be given that an exemptive order will be granted.

Portfolio Composition, Investment Activity and Yield

During the nine months ended September 30, 2011, we invested $37.6 million in six new and three existing portfolio companies. The new investments consisted primarily of senior term loans ($7.9
million, or 21.2%), subordinated notes ($25.4 million, or 67.5%), warrants ($1.8 million, or 4.7%) and equity securities ($2.5 million, or 6.6%). During the nine months ended September 30, 2011, we received proceeds from repayments of principal
of $5.3 million. During the year ended December 31, 2010, we invested $31.7 million in three new and five existing portfolio companies. The new investments consisted primarily of subordinated notes ($25.4 million, or 80.4%), senior secured
loans ($4.0 million, or 12.5%), warrants ($0.8 million, or 2.4%) and equity securities ($1.5 million, or 4.7%). Additionally, we received proceeds from repayments of principal of $14.3 million during the year ended December 31, 2010.

As of September 30, 2011, our investment portfolio totaled $180.1 million and consisted of 22 portfolio companies. As of
September 30, 2011, our debt portfolio was entirely comprised of fixed rate investments. Overall, the portfolio had net unrealized appreciation of $6.9 million as of September 30, 2011. Our average portfolio company investment at amortized
cost was $7.9 million as of September 30, 2011.

As of December 31, 2010, our investment portfolio totaled $141.3
million and consisted of 17 portfolio companies. As of December 31, 2010, our debt portfolio was entirely comprised of fixed-rate investments. Overall, the portfolio had net unrealized depreciation of $4.0 million as of December 31, 2010.
Our average portfolio company investment at amortized cost was $8.5 million as of December 31, 2010.

The weighted
average yield on debt investments at their cost basis at September 30, 2011 and December 31, 2010 was 15.5% and 15.0%, respectively. Yields are computed using interest rates as of the balance sheet date and include amortization of original
issue discount. Yields do not include debt investments that were on non-accrual status as of the balance sheet date.



22



---

##### Table of Contents

The following table shows the portfolio composition by investment type at cost and fair
value as a percentage of total investments:



|                     |  |                         |       |   |                        |  |       |  
|-------------------- |  | ----------------------- | ----- | - | ---------------------- |  | ----- | -
|                     |  | As
ofSeptember 30, 2011 |       |   | As
ofDecember 31, 2010 | 
|Cost                 |  |                         |       |   |                        |  |       |  
|Senior secured loans |  |                         | 13.2  | % |                        |  | 13.4  | %
|Subordinated notes   |  |                         | 76.6  |   |                        |  | 72.2  |  
|Equity               |  |                         | 7.9   |   |                        |  | 12.0  |  
|Warrants             |  |                         | 2.3   |   |                        |  | 2.4   |  
|                     |  |                         |       |   |                        |  |       |  
|Total                |  |                         | 100.0 | % |                        |  | 100.0 | %
|                     |  |                         |       |   |                        |  |       |  
|Fair Value           |  |                         |       |   |                        |  |       |  
|Senior secured loans |  |                         | 10.8  | % |                        |  | 11.6  | %
|Subordinated notes   |  |                         | 74.1  |   |                        |  | 75.2  |  
|Equity               |  |                         | 8.1   |   |                        |  | 9.6   |  
|Warrants             |  |                         | 7.0   |   |                        |  | 3.6   |  
|                     |  |                         |       |   |                        |  |       |  
|Total                |  |                         | 100.0 | % |                        |  | 100.0 | %
|                     |  |                         |       |   |                        |  |       |  

The following table shows the portfolio composition by geographic region at cost and fair value as a
percentage of total investments. The geographic composition is determined by the location of the corporate headquarters of the portfolio company.



|           |  |                         |       |   |                        |  |       |  
|---------- |  | ----------------------- | ----- | - | ---------------------- |  | ----- | -
|           |  | As
ofSeptember 30, 2011 |       |   | As
ofDecember 31, 2010 | 
|Cost       |  |                         |       |   |                        |  |       |  
|Midwest    |  |                         | 35.4  | % |                        |  | 28.1  | %
|Southwest  |  |                         | 18.4  |   |                        |  | 20.8  |  
|Northeast  |  |                         | 16.2  |   |                        |  | 20.3  |  
|Southeast  |  |                         | 16.3  |   |                        |  | 18.2  |  
|West       |  |                         | 13.7  |   |                        |  | 12.6  |  
|           |  |                         |       |   |                        |  |       |  
|Total      |  |                         | 100.0 | % |                        |  | 100.0 | %
|           |  |                         |       |   |                        |  |       |  
|Fair value |  |                         |       |   |                        |  |       |  
|Midwest    |  |                         | 34.7  | % |                        |  | 30.7  | %
|Southwest  |  |                         | 22.8  |   |                        |  | 24.7  |  
|Northeast  |  |                         | 15.6  |   |                        |  | 15.4  |  
|Southeast  |  |                         | 15.8  |   |                        |  | 19.0  |  
|West       |  |                         | 11.1  |   |                        |  | 10.2  |  
|           |  |                         |       |   |                        |  |       |  
|Total      |  |                         | 100.0 | % |                        |  | 100.0 | %
|           |  |                         |       |   |                        |  |       |  



23



---

##### Table of Contents

The following tables show the industry composition of our portfolio at cost and fair value:



|                                           |  |                         |       |   |                        |  |       |  
|------------------------------------------ |  | ----------------------- | ----- | - | ---------------------- |  | ----- | -
|                                           |  | As
ofSeptember 30, 2011 |       |   | As
ofDecember 31, 2010 | 
|Cost                                       |  |                         |       |   |                        |  |       |  
|Transportation services                    |  |                         | 11.2  | % |                        |  | 12.4  | %
|Movie theaters                             |  |                         | 7.3   |   |                        |  | 8.7   |  
|Healthcare services                        |  |                         | 9.0   |   |                        |  | 7.6   |  
|Niche manufacturing                        |  |                         | 2.6   |   |                        |  | 3.1   |  
|Retail cleaning                            |  |                         | 4.4   |   |                        |  | 5.1   |  
|Laundry services                           |  |                         | 2.7   |   |                        |  | 6.3   |  
|Industrial products                        |  |                         | 5.3   |   |                        |  | 6.3   |  
|Electronic components supplier             |  |                         | 5.4   |   |                        |  | 6.3   |  
|Specialty distribution                     |  |                         | 5.4   |   |                        |  | 6.2   |  
|Printing services                          |  |                         | 5.0   |   |                        |  | 5.6   |  
|Industrial cleaning & coatings             |  |                         | 4.6   |   |                        |  | 5.5   |  
|Commercial cleaning                        |  |                         | 4.8   |   |                        |  | 5.6   |  
|Specialty cracker manufacturer             |  |                         | 4.7   |   |                        |  | 5.4   |  
|Government information technology services |  |                         | 3.3   |   |                        |  | 3.8   |  
|Oil & gas services                         |  |                         | 2.7   |   |                        |  | 3.2   |  
|Aerospace & defense manufacturing          |  |                         | 7.6   |   |                        |  | 3.4   |  
|Apparel distribution                       |  |                         | 3.3   |   |                        |  |      |  
|Restoration & mitigation services          |  |                         | 2.7   |   |                        |  |      |  
|Furniture rental                           |  |                         | 4.4   |   |                        |  |      |  
|Healthcare products                        |  |                         | 3.6   |   |                        |  |      |  
|Environmental services                     |  |                         |      |   |                        |  | 5.5   |  
|                                           |  |                         |       |   |                        |  |       |  
|Total                                      |  |                         | 100.0 | % |                        |  | 100.0 | %
|                                           |  |                         |       |   |                        |  |       |  



|                                           |  |                         |       |   |                        |  |       |  
|------------------------------------------ |  | ----------------------- | ----- | - | ---------------------- |  | ----- | -
|                                           |  | As
ofSeptember 30, 2011 |       |   | As
ofDecember 31, 2010 | 
|Fair Value                                 |  |                         |       |   |                        |  |       |  
|Transportation services                    |  |                         | 15.5  | % |                        |  | 14.5  | %
|Movie theaters                             |  |                         | 8.1   |   |                        |  | 10.3  |  
|Healthcare services                        |  |                         | 9.4   |   |                        |  | 8.1   |  
|Niche manufacturing                        |  |                         |      |   |                        |  | 0.8   |  
|Retail cleaning                            |  |                         | 4.7   |   |                        |  | 7.0   |  
|Laundry services                           |  |                         | 2.8   |   |                        |  | 6.8   |  
|Industrial products                        |  |                         | 5.1   |   |                        |  | 6.5   |  
|Electronic components supplier             |  |                         | 4.6   |   |                        |  | 6.5   |  
|Specialty distribution                     |  |                         | 5.2   |   |                        |  | 6.4   |  
|Printing services                          |  |                         | 5.1   |   |                        |  | 6.0   |  
|Industrial cleaning & coatings             |  |                         | 4.6   |   |                        |  | 5.8   |  
|Commercial cleaning                        |  |                         | 4.4   |   |                        |  | 5.7   |  
|Specialty cracker manufacturer             |  |                         | 4.3   |   |                        |  | 5.5   |  
|Government information technology services |  |                         | 3.0   |   |                        |  | 3.9   |  
|Oil & gas services                         |  |                         | 2.6   |   |                        |  | 3.2   |  
|Aerospace & defense manufacturing          |  |                         | 7.1   |   |                        |  | 3.0   |  
|Apparel distribution                       |  |                         | 3.2   |   |                        |  |      |  
|Restoration & mitigation services          |  |                         | 2.6   |   |                        |  |      |  
|Furniture rental                           |  |                         | 4.2   |   |                        |  |      |  
|Healthcare products                        |  |                         | 3.5   |   |                        |  |      |  
|Environmental services                     |  |                         |      |   |                        |  |      |  
|                                           |  |                         |       |   |                        |  |       |  
|Total                                      |  |                         | 100.0 | % |                        |  | 100.0 | %
|                                           |  |                         |       |   |                        |  |       |  

Portfolio Asset Quality

We utilize an internally developed investment rating system for our portfolio of investments. Investment Rating 1 is used for investments that involve the least amount of risk in our portfolio and the
portfolio company is performing above expectations. Investment Rating 2 is used for investments that are performing substantially within our expectations and the portfolio companys risk factors are neutral or favorable. Each new portfolio
investment enters our portfolio with Investment Rating 2. Investment Rating 3 is used for investments performing below expectations and require closer monitoring, but with respect to which we expect a full return of original capital invested and
collection of all interest. Investment Rating 4 is used for investments performing materially below expectations, and have the potential for some loss of investment return. Investment Rating 5 is used for investments performing substantially below
our expectations and where we expect a loss of principal.



24



---

##### Table of Contents

The following table shows the distribution of our investments on the 1 to 5 investment
rating scale at fair value as of September 30, 2011 and December 31, 2010:



|                  |  |                           |         |  |                            |  |       |                           |  |   |                            |  |  |  |       |  
|----------------- |  | ------------------------- | ------- |  | -------------------------- |  | ----- | ------------------------- |  | - | -------------------------- |  |  |  | ----- | -
|                  |  | September 30, 2011        |         |  | December 31, 2010          | 
|Investment Rating |  | Investments atFair 
Value |         |  | Percent ofTotal 
Portfolio |  |       | Investments atFair 
Value |  |   | Percent ofTotal 
Portfolio | 
|                  |  | (Dollars in thousands)    |        
|1                 |  | $                         | 17,390  |  |                            |  | 9.7   | %                         |  | $ | 27,330                     |  |  |  | 19.3  | %
|2                 |  |                           | 147,344 |  |                            |  | 81.8  |                           |  |   | 97,739                     |  |  |  | 69.2  |  
|3                 |  |                           | 15,381  |  |                            |  | 8.5   |                           |  |   | 15,108                     |  |  |  | 10.7  |  
|4                 |  |                           |        |  |                            |  |      |                           |  |   |                           |  |  |  |      |  
|5                 |  |                           |        |  |                            |  |      |                           |  |   | 1,164                      |  |  |  | 0.8   |  
|                  |  |                           |         |  |                            |  |       |                           |  |   |                            |  |  |  |       |  
|Totals            |  | $                         | 180,115 |  |                            |  | 100.0 | %                         |  | $ | 141,341                    |  |  |  | 100.0 | %
|                  |  |                           |         |  |                            |  |       |                           |  |   |                            |  |  |  |       |  

Based upon our investment rating system, the weighted average rating of our portfolio as of
September 30, 2011 and December 31, 2010 was 2.0 and 1.9, respectively. As of September 30, 2011, we had one investment on non-accrual status which represented 0.0% of the total fair value of our portfolio and 2.6% of the total cost
of our portfolio. As of December 31, 2010, we had one investment on non-accrual which represented 0.0% of the total fair value of our portfolio and 5.5% of the total cost of our portfolio.

Results of Operations

Comparison
of three months ended September 30, 2011 and September 30, 2010

Investment Income

For the three months ended September 30, 2011, total investment income was $5.9 million, an increase of $1.6 million, or 37.2% over
the $4.3 million of total investment income for the three months ended September 30, 2010. The increase was primarily attributable to a $1.6 million increase in interest and fee income from investments. The increase in interest and fee income
is primarily due to higher average levels of outstanding debt investments and higher fee income of $0.3 million in the three months ended September 30, 2011 compared to the prior year period.

Expenses

For the three
months ended September 30, 2011, total expenses were $2.3 million, a 2.0% decrease, from the $2.3 million of total expenses for the three months ended September 30, 2010. The nominal decrease in total expenses was primarily attributable to
a decrease in the management fee after offset, which was partially offset by an increase in interest expense and professional fees. The management fee after offset decreased $0.3 million, or 28.6%, primarily due to the new management fee payable
pursuant to the LP Agreement. Interest expense increased $0.1 million as a result of higher average balances of SBA debentures outstanding during the three months ended September 30, 2011 than the comparable period in 2010. Professional fees
increased $0.1 million primarily due to higher costs related to portfolio valuations.

Net Investment Income

As a result of the $1.6 million increase in total investment income and the nominal decrease in total expenses, net investment income for
the three months ended September 30, 2011 was $3.7 million, or $1.7 million higher than the comparable period in 2010.

Net Increase
in Net Assets Resulting From Operations

During the three months ended September 30, 2011, we recorded net unrealized
appreciation on investments of $0.5 million comprised of unrealized appreciation on investments in six portfolio companies totaling $2.9 million and unrealized depreciation on investments in eight portfolio companies totaling $2.4 million. During
the three months ended September 30, 2010, we recorded net unrealized appreciation of $1.7 million. For the three months ended September 30, 2011 and 2010, the total realized loss on investments was nominal.

As a result of these events, our net increase in net assets resulting from operations during the three months ended September 30,
2011, was $4.2 million, or an increase of $0.5 million compared to a net increase in net assets resulting from operations of $3.7 million during the three months ended September 30, 2010.



25



---

##### Table of Contents

Comparison of nine months ended September 30, 2011 and September 30, 2010

Investment Income

For the nine months ended September 30, 2011, total investment income was $16.1 million, an increase of $2.9 million, or 21.9% over the $13.2 million of total investment income for the nine months
ended September 30, 2010. The increase was primarily attributable to a $3.1 million increase in interest and fee income from investments, partially offset by a $0.2 million decrease in dividend income. The increase in interest and fee income is
primarily due to higher average levels of outstanding debt investments and higher fee income of $0.4 million in the nine months ended September 30, 2011 compared to the prior year period. The decrease in dividend income is primarily
attributable to one equity investment in a portfolio company that was placed on non-accrual status in 2010.

Expenses

For the nine months ended September 30, 2011, total expenses were $6.8 million, a decrease of 0.1%, over the $6.9 million of total
expenses for the nine months ended September 30, 2010. The net increase in total expenses was primarily attributable to increased interest expense of $0.5 million and increased professional fees of $0.2 million partially offset by a decrease in
management fee after offset of $0.5 million and other general and administrative expenses of $0.2 million. Interest expense increased $0.5 million as a result of higher average balances of SBA debentures outstanding during the nine months ended
September 30, 2011 than the comparable period in 2010. Higher professional fees of $0.2 million were due to higher external valuation costs and other legal expenses. The management fee after offset decreased $0.5 million, or 16.6%, primarily
due to lower management fees resulting from the new Investment and Advisory Agreement. Other general and administrative expenses decreased $0.2 million primarily due to the write-off of accrued dividends receivable in the second quarter of 2010
related to an investment placed on non-accrual.

Net Investment Income

As a result of the $2.9 million increase in total investment income and nominal decrease in total expenses, net investment income for the
nine months ended September 30, 2011 was $9.2 million, which was $2.9 million higher than the comparable period in 2010.

Net Increase
in Net Assets Resulting From Operations

For the nine months ended September 30, 2011, the total realized loss on
investments was $7.9 million resulting from one non-control/non-affiliate investment. For the nine months ended September 30, 2010, the total realized loss on investments was nominal.

During the nine months ended September 30, 2011, we recorded net unrealized appreciation on investments of $10.9 million comprised
of net unrealized appreciation on investments in six portfolio companies totaling $7.7 million and net unrealized depreciation on investments in eight portfolio companies totaling $4.8 million. In addition, we recorded net unrealized depreciation
reclassification adjustments of $7.9 million related to a realized loss on the non-control/non-affiliate investment noted above. For the nine months ended September 30, 2010, we recorded $7.8 million in net unrealized depreciation.

As a result of these events, our net increase in net assets resulting from operations during the nine months ended September 30,
2011, was $12.2 million, or an increase of $13.6 million compared to a net decrease in net assets resulting from operations of $1.5 million during the nine months ended September 30, 2010.

Liquidity and Capital Resources

Cash Flows

For the nine
months ended September 30, 2011, we experienced a net increase in cash and cash equivalents in the amount of $1.2 million. During that period, we used $28.6 million in cash in operating activities, primarily due to new investments in portfolio
companies of $37.6 million, partially offset by $5.3 million in portfolio company investment repayments. During the same period, we generated $29.8 million from financing activities, consisting primarily of capital contributions from partners prior
to the Offering and Formation Transactions of $7.0 million and from a capital contribution from the proceeds of FICs Offering totaling $21.1 million. Additionally, we received proceeds from SBA debentures of $3.2 million net of financing
costs. These increases were partially offset by capital distributions to partners of $1.5 million.

We place all cash in
short-term, highly liquid investments that we believe provide appropriate safety of principal.

For the nine months ended
September 30, 2010, we experienced a net increase in cash and cash equivalents in the amount of $12.0 million. During that period, we provided $1.6 million in cash from operating activities including funding $13.4 million in new investments
which were more than offset by $13.6 million in repayments. During the same period, we generated $10.4 million from financing activities consisting of $12.5 million in new SBA debenture borrowing partially offset by the payment of $0.6 million in
deferred financing costs and $1.5 million in capital distributions.



26



---

##### Table of Contents

Capital Resources

As of September 30, 2011, we had $2.9 million in cash and cash equivalents, and our net assets totaled $90.8 million. We believe that our current cash and cash equivalents, our available SBA leverage
and our anticipated cash flows from operations will be adequate to meet our cash needs for our daily operations for at least the next twelve months. We intend to generate additional cash primarily from future borrowings as well as cash flows from
operations, including income earned from investments in our portfolio companies and, to a lesser extent, from the temporary investment of cash in U.S. government securities and other high-quality debt investments that mature in one year or less. On
both a short-term and long-term basis, our primary use of funds will be investments in portfolio companies.

We anticipate
that we will continue to fund our investment activities on a long-term basis, through additional SBA debenture financing. We are a licensed SBIC, and have the ability to issue debentures guaranteed by the SBA at favorable interest rates. Under the
Small Business Investment Act and the SBA rules applicable to SBICs, an SBIC can have outstanding at any time debentures guaranteed by the SBA in an amount up to twice its regulatory capital, which generally is the amount raised from private
investors. The maximum statutory limit on the dollar amount of outstanding debentures guaranteed by the SBA issued by a single SBIC as of September 30, 2011 was $150.0 million. Debentures guaranteed by the SBA have fixed interest rates that
approximate prevailing 10-year Treasury Note rates plus a spread and have a maturity of ten years with interest payable semi-annually. The principal amount of the debentures is not required to be paid before maturity but may be pre-paid at any time.
As of September 30, 2011, Fidus Mezzanine Capital, L.P. had $96.8 million of outstanding indebtedness guaranteed by the SBA, which had a weighted average interest rate of 5.3%. Based on its $75.0 million of regulatory capital as of
September 30, 2011, Fidus Mezzanine Capital, L.P. has the current capacity to issue up to an additional $53.2 million of debentures guaranteed by the SBA. For more information on the SBA debentures we have issued, please see Note 6 to our
consolidated financial statements.

Current Market Conditions

Though global credit and other financial market conditions have improved and stability has increased throughout the international financial system, the secondary credit crisis in Europe (despite the
recent European agreement intended to help resolve the Euro crisis), the uncertainty surrounding the United States rapidly increasing national debt and continuing global economic malaise have kept markets volatile. These unstable conditions
could continue for a prolonged period of time. Although we have been able to secure access to additional liquidity, including through FICs recent public stock offering and leverage available through the SBIC program, there is no assurance that
debt or equity capital will be available to us in the future on favorable terms, or at all.

Critical Accounting Policies and Use of
Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the
United States requires management to make certain estimates and assumptions affecting amounts reported in the financial statements. We have identified investment valuation and revenue recognition as our most critical accounting estimates. We
continuously evaluate our estimates, including those related to the matters described below. These estimates are based on the information that is currently available to us and on various other assumptions that we believe to be reasonable under the
circumstances. Actual results could differ materially from those estimates under different assumptions or conditions. A discussion of our critical accounting policies follows.

Valuation of Portfolio Investments

We conduct the valuation of our
investments, pursuant to which our net asset value is determined, at all times consistent with generally accepted accounting principles in the United States, or GAAP, and the 1940 Act.

Our investments generally consist of illiquid securities including debt and equity investments in lower middle-market companies.
Investments for which market quotations are readily available are valued at such market quotations. Because we expect that there will not be a readily available market for substantially all of the investments in our portfolio, we value substantially
all of our portfolio investments at fair value as determined in good faith by our board of directors using a documented valuation policy and consistently applied valuation process. Due to the inherent uncertainty of determining the fair value of
investments that do not have a readily available market value, the fair value of our investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the difference
could be material.

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



| |  |  | 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;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



27



---

##### Table of Contents

| |  |  | 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 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.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In making the good faith
determination of the value of portfolio investments, we start with the cost basis of the security, which includes the amortized original issue discount and payment-in-kind interest or dividends, if any. The transaction price is typically the best
estimate of fair value at inception. When evidence supports a subsequent change to the carrying value from the original transaction price, adjustments are made to reflect the expected exit values. We perform detailed valuations of our debt and
equity investments on an individual basis, using market, income and yield approaches as appropriate.

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

Under the income approach, we prepare and analyze discounted cash flow
models based on projections of the future free cash flows (or earnings) of the portfolio company. In determining the fair value under the income approach, we consider various factors, including but not limited to the portfolio companys
projected financial results, applicable market trading and transaction comparables, applicable market yields and leverage levels, the markets in which the portfolio company does business, and comparisons of financial ratios of peer companies that
are public.

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

We classify our investments in accordance with the
1940 Act. See Note 2 to the consolidated financial statements for definitions of Control, Affiliate and Non-Control Non-Affiliate included elsewhere in this report. For our Control investments, we determine the fair value of debt and equity
investments using a combination of market and income approaches. The valuation approaches for our Control investments estimate the value of the investment if we were to sell, or exit, the investment, assuming the highest and best use of the
investment by market participants. In addition, these valuation approaches consider the value associated with our ability to influence the capital structure of the portfolio company, as well as the timing of a potential exit.

For our Affiliate or Non-Control/Non-Affiliate equity investments, we use a combination of market and income approaches as described
above to determine the fair value. For our Affiliate or Non-Control/Non-Affiliate debt investments, we generally use the yield approach to determine fair value, as long as it is appropriate. If there is deterioration in credit quality or a debt
investment is in workout status, we may consider other factors in determining the fair value, including the value attributable to the debt investment from the enterprise value of the portfolio company or the proceeds that would be received in a
liquidation analysis.

Determination of fair value involves subjective judgments and estimates. Accordingly, the notes to our
financial statements express the uncertainties with respect to the possible effect of such valuations, and any changes in such valuations, on the financial statements.



28



---

##### Table of Contents

Revenue Recognition

The Funds revenue recognition policies are as follows:

Investments and
related investment income. Realized gains or losses on portfolio investments are calculated based upon the difference between the net proceeds from the disposition and the cost basis of the investment. Changes in the fair value of investments,
as determined by our board of directors through the application of our valuation policy, are included as changes in unrealized appreciation or depreciation of investments in the consolidated statement of operations.

Interest, fee and dividend income. Interest and dividend income is recorded on the accrual basis to the extent that we expect to
collect such amounts. Interest and dividend income is accrued based upon the outstanding principal amount and contractual terms of debt and preferred equity investments. Distributions of earnings from portfolio companies are evaluated to determine
if the distribution is income or a return of capital.

We have investments in our portfolio that contain a payment-in-kind
interest or dividends provision, which represents contractual interest or dividends that are added to the principal balance and is recorded as income. We stop accruing payment-in-kind interest when it is determined that payment-in-kind interest is
no longer collectible.

In connection with our debt investments, we will sometimes receive warrants or other equity-related
securities (Warrants). We determine the cost basis of Warrants based upon their respective fair values on the date of receipt in proportion to the total fair value of the debt and Warrants received. Any resulting difference between the
face amount of the debt and its recorded fair value resulting from the assignment of value to the Warrants are treated as original issue discount (OID), and accreted into interest income based on the effective interest method over the
life of the debt security.

We also typically receive upfront debt origination or closing fees in connection with debt
investments. Such upfront debt origination and closing fees are capitalized as unearned income offset against investments on our balance sheet and amortized as additional interest income over the life of the investment.

Prior to the Formation Transactions, and in accordance with the prior limited partnership agreement, we historically recorded transaction
fees for structuring and advisory services provided in connection with our investments as a direct offset to management fee expense. After completion of the Formation Transactions, all structuring and advisory service fees received in connection
with our investments are recognized as income. Such fees typically include fees for services, including structuring and advisory services, provided to portfolio companies. We recognize income from fees for providing such structuring and advisory
services when the services are rendered or the transactions are completed. Upon the prepayment of a loan or debt security, any prepayment penalties are recorded as fee income when received.

Non-accrual. Loans or preferred equity securities are placed on non-accrual status when principal, interest or dividend payments
become materially past due, or when there is reasonable doubt that principal, interest or dividends will be collected. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon
managements judgment. Non-accrual loans are restored to accrual status when past due principal, interest or dividends are paid and, in managements judgment, are likely to remain current.

Recently Issued Accounting Standards

In May 2011 the Financial Accounting Standards Board (FASB) issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and
Disclosure Requirements in U.S. GAAP and IFRSs (ASU 2011-04). ASU 2011-04 represents the converged guidance of the FASB and the International Accounting Standards Board (IASB) (collectively, the Boards) on
fair value measurement. The collective efforts of the Boards and their staffs, reflected in ASU 2011-04, have resulted in common requirements for measuring fair value and for disclosing information about fair value measurements, including a
consistent meaning of the term fair value and enhanced disclosure requirements for investments that do not have readily determinable fair values. The Boards have concluded the common requirements will result in greater comparability of
fair value measurements presented and disclosed in financial statements prepared in accordance with GAAP and IFRSs. The amendments to the FASB Codification in ASU 2011-04 are to be applied prospectively. For public entities, the amendments are
effective during interim and annual periods beginning after December 15, 2011. Early application by public entities is not permitted. The Fund is currently assessing the impact of ASU 2011-04 on its future consolidated financial statements.

Off-Balance Sheet Arrangements

We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. As of September 30, 2011, we had two
off-balance sheet arrangements with two portfolio companies consisting of $4.7 million of unfunded commitments to provide debt financing. As of December 31, 2010, we had one off-balance sheet arrangement with a portfolio company consisting of
$0.5 million of unfunded commitments to provide debt financing. Such commitments involve, to varying degrees, elements of credit risk in excess of the amount recognized in our balance sheets.



29



---

##### Table of Contents

Related Party Transactions

Concurrent with the Formation Transactions, we entered into a number of business relationships with affiliated or related parties, including the following:



| |  |  | 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 H. Ross, our chairman and principal executive officer, Cary L.
Schaefer, our principal financial officer and chief compliance officer, and Thomas C. 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.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------

In addition, we have adopted a formal joint code of ethics that governs the conduct of our and our
Investment Advisors officers, directors and employees. Our officers and directors also remain subject to the duties imposed by both the 1940 Act and the Delaware Partnership Law.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are subject to financial market risks, including changes in interest rates. Changes in interest rates affect both our cost of funding and the valuation of our investment portfolio. Our risk management
systems and procedures are designed to identify and analyze our risk, to set appropriate policies and limits and to continually monitor these risks and limits by means of reliable administrative and information systems and other policies and
programs. In the future, our investment income may also be affected by changes in various interest rates, including LIBOR and prime rates, to the extent of any debt investments that include floating interest rates. As of September 30, 2011, all
of our debt investments bore interest at fixed rates and all of our pooled SBA debentures bore interest at fixed rates. Assuming that the balance sheets as of September 30, 2011, and December 31, 2010 were to remain constant, a
hypothetical 1.0% change in interest rates on those dates would not have a material effect on our level of interest income from debt investments.

Because we currently borrow, and plan to borrow in the future, money to make investments, our net investment income is dependent upon the difference between the rate at which we borrow funds and the rate
at which we invest the funds borrowed. Accordingly, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. In periods of rising interest rates, our cost of
funds would increase, which could reduce our net investment income if there is not a corresponding increase in interest income generated by our investment portfolio.

Item 4. Controls and Procedures.

The CEO
and CFO of Fidus Investment Advisors, LLC, the manager of Fidus Investment GP, LLC, the general partner of Fidus Mezzanine Capital, L.P., who serve as our principal executive officer and principal financial officer, evaluated the effectiveness of
the design and operations of our disclosure controls and procedures. We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities
Exchange Act of 1934, as amended (the 1934 Act), is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms and that such information is accumulated and communicated to our
management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Our principal executive officer and principal financial officer carried out an evaluation
of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report (as defined in Rule 13a-15(e) of the 1934 Act). Based on the evaluation of these disclosure controls and
procedures, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective. It should be noted that any system of controls, however well designed and operated, can provide only
reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent
limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. There were no changes in our internal control over financial
reporting during the third quarter of 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



30



---

##### Table of Contents

PART II  OTHER INFORMATION

Item 1. Legal Proceedings.

Although we may, from time to time, be involved in litigation arising out of our operations in the normal course of business or otherwise, we are currently not a party to any pending material legal
proceedings.

Item 1A. Risk Factors.

In addition to other information set forth in this report, you should carefully consider the Risk Factors discussed in our
prospectus dated June 20, 2011 and filed with the SEC on June 22, 2011 in accordance with Rule 497 of the 1933 Act, and the risks below, which could materially affect our business, financial condition and/or operating results. Additional
risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially affect our business, financial condition and/or operating results.

The recent downgrade of the U.S. credit rating and the economic crisis in Europe could negatively impact our liquidity, financial condition and earnings.

Recent U.S. debt ceiling and budget deficit concerns, together with signs of deteriorating sovereign debt conditions in Europe, have
increased the possibility of additional credit-rating downgrades and economic slowdowns. Although U.S. lawmakers passed legislation to raise the federal debt ceiling, Standard & Poors Ratings Services lowered its long-term sovereign
credit rating on the U.S. from AAA to AA+ in August 2011. The impact of this or any further downgrades to the U.S. governments sovereign credit rating, or its perceived creditworthiness, and, despite the recent European
agreement intended to help resolve the Euro crisis, the impact of the current crisis in Europe with respect to the ability of certain European Union countries to continue to service their sovereign debt obligations is inherently unpredictable and
could adversely affect the U.S. and global financial markets and economic conditions. There can be no assurance that governmental or other measures to aid economic recovery will be effective. Continued adverse economic conditions could have a
material adverse effect on our business, financial condition and results of operations.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. [Removed and Reserved].

Item 5. Other Information.

None.

Item 6. Exhibits.



|       |  |                                                                                                                                                                                
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Exhibit                                                                                                                                                                        
|       | 
|31.1   |  | Principal 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   |  | Principal 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



---

##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



|                       |  |  |  |                               |  |                                                                                                                                                                                                      
|---------------------- |  |  |  | ----------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                       |  |  |  | FIDUS MEZZANINE CAPITAL, L.P.
|                       |  |  | 
|                       |  |  |  | By:                           |  | Fidus Investment GP, LLC, Its General Partner                                                                                                                                                        
|                       |  |  | 
|                       |  |  |  |                               |  | By: Fidus Investment Advisors, LLC, Its Manager                                                                                                                                                      
|                       |  |  | 
|Date: November 3, 2011 |  |  |  |                               |  | /s/ EDWARD H. ROSS                                                                                                                                                                                   
|                       |  |  |  |                               |  | Edward H. Ross                                                                                                                                                                                       
|                       |  |  |  |                               |  | Chief Executive Officer of Fidus Investment Advisors, LLC, the manager of Fidus Investment GP, LLC, the general partner of Fidus
Mezzanine Capital, L.P. (principal executive officer)               
|                       |  |  | 
|Date: November 3, 2011 |  |  |  |                               |  | /s/ CARY L. SCHAEFER                                                                                                                                                                                 
|                       |  |  |  |                               |  | Cary L. Schaefer                                                                                                                                                                                     
|                       |  |  |  |                               |  | Chief Financial Officer of Fidus Investment Advisors, LLC, the manager of Fidus Investment GP, LLC, the general partner of Fidus
Mezzanine Capital, L.P. (principal financial and accounting officer)



32



---

##### Table of Contents

EXHIBIT INDEX



|       |  |                                                                                                                                                                                
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Exhibit                                                                                                                                                                        
|       | 
|31.1   |  | Principal 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   |  | Principal 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.                      



33