UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2018

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 814-00861

Fidus Investment Corporation

(Exact Name of Registrant as Specified in its Charter)

Maryland	27-5017321
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

1603 Orrington Avenue, Suite 1005 Evanston, Illinois	60201
(Address of Principal Executive Offices)	(Zip Code)

(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  ☑    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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

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

If an emerging growth company, indicate by check mark if the registrant has elected to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

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

As of July 30, 2018, the Registrant had outstanding 24,463,119 shares of common stock, $0.001 par value.

FIDUS INVESTMENT CORPORATION

TABLE OF CONTENTS

QUARTERLY REPORT ON FORM 10-Q

	PART I—FINANCIAL INFORMATION	3
Item 1.	Financial Statements.	3
	Consolidated Statements of Assets and Liabilities—June 30, 2018 (unaudited) and December 31, 2017	3
	Consolidated Statements of Operations—Three and Six Months Ended June 30, 2018 (unaudited) and 2017 (unaudited)	4
	Consolidated Statements of Changes in Net Assets—Six Months Ended June 30, 2018 (unaudited) and 2017 (unaudited)	5
	Consolidated Statements of Cash Flows—Six Months Ended June 30, 2018 (unaudited) and 2017 (unaudited)	6
	Consolidated Schedules of Investments—June 30, 2018 (unaudited) and December 31, 2017	7
	Notes to Consolidated Financial Statements (unaudited)	19
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	38
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	53
Item 4.	Controls and Procedures.	54
	PART II—OTHER INFORMATION	55
Item 1.	Legal Proceedings.	55
Item 1A.	Risk Factors.	55
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	55
Item 3.	Defaults Upon Senior Securities.	56
Item 4.	Mine Safety Disclosures.	56
Item 5.	Other Information.	56
Item 6.	Exhibits.	57
Signatures		58
Exhibit Index		59

2

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

FIDUS INVESTMENT CORPORATION

Consolidated Statements of Assets and Liabilities

(in thousands, except shares and per share data)

	June 30, 2018 (unaudited)			December 31, 2017
ASSETS
Investments, at fair value
Control investments (cost: $6,811 and $6,294, respectively)	$	5,041		$	4,723
Affiliate investments (cost: $80,428 and $91,361, respectively)		127,816			123,011
Non-control/non-affiliate investments (cost: $524,429 and $480,139, respectively)		513,325			468,574
Total investments, at fair value (cost: $611,668 and $577,794, respectively)		646,182			596,308
Cash and cash equivalents		23,999			41,572
Interest receivable		6,442			7,411
Prepaid expenses and other assets		1,103			972
Total assets	$	677,726		$	646,263
LIABILITIES
SBA debentures, net of deferred financing costs (Note 6)	$	209,728		$	226,660
Public Notes, net of deferred financing costs (Note 6)		48,217			—
Borrowings under Credit Facility, net of deferred financing costs (Note 6)		6,718			11,175
Accrued interest and fees payable		2,940			2,712
Management and incentive fees payable – due to affiliate		12,735			11,217
Administration fee payable and other – due to affiliate		340			562
Taxes payable		519			500
Accounts payable and other liabilities		268			164
Total liabilities		281,465			252,990
Commitments and contingencies (Note 7)
NET ASSETS
Common stock, $0.001 par value (100,000,000 shares authorized, 24,463,119 and 24,507,940 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively)		24			24
Additional paid-in capital		369,963			370,545
Undistributed net investment income		2,923			5,687
Accumulated net realized gain (loss) on investments, net of taxes and distributions		(11,667	)		(2,001	)
Accumulated net unrealized appreciation on investments		35,018			19,018
Total net assets		396,261			393,273
Total liabilities and net assets	$	677,726		$	646,263
Net asset value per common share	$	16.20		$	16.05

See Notes to Consolidated Financial Statements (unaudited).

3

FIDUS INVESTMENT CORPORATION

Consolidated Statements of Operations (unaudited)

(in thousands, except shares and per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Investment Income:
Interest income
Control investments	$	61		$	—		$	118		$	—
Affiliate investments		1,883			2,453			3,538			4,713
Non-control/non-affiliate investments		13,741			11,125			26,764			21,954
Total interest income		15,685			13,578			30,420			26,667
Payment-in-kind interest income
Control investments		162			—			315			—
Affiliate investments		107			456			507			870
Non-control/non-affiliate investments		1,061			1,200			2,187			2,445
Total payment-in-kind interest income		1,330			1,656			3,009			3,315
Dividend income
Control investments		—			—			—			—
Affiliate investments		197			268			641			546
Non-control/non-affiliate investments		98			347			(8	)		727
Total dividend income		295			615			633			1,273
Fee income
Control investments		—			—			—			—
Affiliate investments		27			141			23			147
Non-control/non-affiliate investments		748			1,254			2,189			2,030
Total fee income		775			1,395			2,212			2,177
Interest on idle funds and other income		27			27			71			67
Total investment income		18,112			17,271			36,345			33,499
Expenses:
Interest and financing expenses		3,046			2,401			6,128			4,985
Base management fee		2,821			2,403			5,506			4,716
Incentive fee		1,907			2,484			5,661			4,862
Administrative service expenses		347			340			746			691
Professional fees		275			241			785			710
Other general and administrative expenses		691			431			986			709
Total expenses		9,087			8,300			19,812			16,673
Net investment income before income taxes		9,025			8,971			16,533			16,826
Income tax provision		67			29			198			25
Net investment income		8,958			8,942			16,335			16,801
Net realized and unrealized gains (losses) on investments:
Net realized gains (losses):
Control investments		—			—			—			—
Affiliate investments		(6,240	)		—			733			26
Non-control/non-affiliate investments		(8,956	)		(367	)		(8,651	)		6,071
Net change in unrealized appreciation (depreciation):
Control investments		(272	)		—			(199	)		—
Affiliate investments		9,353			(435	)		15,738			750
Non-control/non-affiliate investments		4,802			1,817			461			(2,774	)
Income tax provision from realized gains on investments		(1	)		—			(1,748	)		(1,385	)
Net gain (loss) on investments		(1,314	)		1,015			6,334			2,688
Net increase in net assets resulting from operations	$	7,644		$	9,957		$	22,669		$	19,489
Per common share data:
Net investment income per share-basic and diluted	$	0.37		$	0.39		$	0.67		$	0.75
Net increase in net assets resulting from operations per share — basic and diluted	$	0.31		$	0.44		$	0.93		$	0.86
Dividends declared per share	$	0.39		$	0.39		$	0.78		$	0.78
Weighted average number of shares outstanding — basic and diluted		24,463,119			22,653,580			24,480,484			22,550,846

See Notes to Consolidated Financial Statements (unaudited).

4

FIDUS INVESTMENT CORPORATION

Consolidated Statements of Changes in Net Assets (unaudited)

(in thousands, except shares)

												Accumulated
												net realized			Accumulated
												gain (loss) on			net unrealized
	Common Stock					Additional			Undistributed			investments,			appreciation
	Number of			Par		paid-in			net investment			net of taxes and			(depreciation)			Total net
	shares			value		capital			income			distributions			on investments			assets
Balances at December 31, 2016		22,446,076		$	22	$	340,101		$	9,626		$	(19,908)		$	23,944		$	353,785
Public offerings of common stock, net of expenses (Note 8)		2,012,500			2		32,285			—			—			—			32,287
Shares issued under dividend reinvestment plan		22,048			—		374			—			—			—			374
Net increase in net assets resulting from operations		—			—		—			16,801			4,712			(2,024	)		19,489
Dividends declared		—			—		—			(17,512	)		—			—			(17,512	)
Balances at June 30, 2017		24,480,624		$	24	$	372,760		$	8,915		$	(15,196)		$	21,920		$	388,423
Balances at December 31, 2017		24,507,940		$	24	$	370,545		$	5,687		$	(2,001)		$	19,018		$	393,273
Repurchases of common stock under Stock Repurchase Program (Note 8)		(44,821	)		—		(582	)		—			—			—			(582	)
Net increase in net assets resulting from operations		—			—		—			16,335			(9,666	)		16,000			22,669
Dividends declared		—			—		—			(19,099	)		—			—			(19,099	)
Balances at June 30, 2018		24,463,119		$	24	$	369,963		$	2,923		$	(11,667)		$	35,018		$	396,261

See Notes to Consolidated Financial Statements (unaudited).

5

FIDUS INVESTMENT CORPORATION

Consolidated Statements of Cash Flows (unaudited)

(in thousands)

	Six Months Ended June 30,
	2018			2017
Cash Flows from Operating Activities:
Net increase in net assets resulting from operations	$	22,669		$	19,489
Adjustments to reconcile net increase in net assets resulting from operations to net cash (used for) operating activities:
Net change in unrealized (appreciation) depreciation on investments		(16,000	)		2,024
Net realized (gain) loss on investments		7,918			(6,097	)
Interest and dividend income paid-in-kind		(3,098	)		(3,864	)
Accretion of original issue discount		(105	)		(275	)
Accretion of loan origination fees		(434	)		(726	)
Purchase of investments		(103,989	)		(87,087	)
Proceeds from sales and repayments of investments		65,270			66,733
Proceeds from loan origination fees		564			486
Amortization of deferred financing costs		811			625
Changes in operating assets and liabilities:
Interest receivable		969			(85	)
Prepaid expenses and other assets		(164	)		(510	)
Accrued interest and fees payable		228			(510	)
Management and incentive fees payable – due to affiliate		1,518			815
Administration fee payable and other—due to affiliate		(222	)		(470	)
Taxes payable		19			(190	)
Accounts payable and other liabilities		104			(56	)
Net cash (used for) operating activities		(23,942	)		(9,698	)
Cash Flows from Financing Activities:
Proceeds from stock offerings, net of expenses		—			28,053
Proceeds received from SBA debentures		27,000			18,000
Repayments of SBA debentures		(43,800	)		(24,750	)
Proceeds received from issuance of Public Notes		50,000			—
Proceeds received from (repayments of) borrowings under Credit Facility, net		(4,500	)		—
Payment of deferred financing costs		(2,650	)		(731	)
Dividends paid to stockholders, including expenses		(19,099	)		(17,138	)
Repurchases of common stock under Stock Repurchase Program		(582	)		—
Net cash provided by financing activities		6,369			3,434
Net (decrease) in cash and cash equivalents		(17,573	)		(6,264	)
Cash and cash equivalents:
Beginning of period		41,572			57,083
End of period	$	23,999		$	50,819
Supplemental disclosure of cash flow information:
Cash payments for interest	$	5,089		$	4,870
Cash payments for taxes, net of tax refunds received	$	1,927		$	1,600
Non-cash financing activities:
Shares issued under dividend reinvestment plan	$	—		$	374
Proceeds receivable from stock offering	$	—		$	4,234

See Notes to Consolidated Financial Statements (unaudited).

6

FIDUS INVESTMENT CORPORATION

Consolidated Schedule of Investments (unaudited)

June 30, 2018

(in thousands, except shares)

Portfolio Company (a)(b) Investment Type (c)	Industry	Rate (d) Cash/PIK		Maturity		Principal Amount		Cost		Fair Value (e)		Percent of Net Assets
Control Investments (t)
FDS Avionics Corp. (dba Flight Display Systems)	Aerospace & Defense Manufacturing
Second Lien Debt			4.00%/11.00%		4/1/2020	$	5,868	$	5,859	$	4,837
Revolving Loan ($50 commitment)			4.00%/11.00%		4/1/2020		204		204		204
Common Equity (7,478 shares) (j)									748		—
									6,811		5,041	1%
Total Control Investments								$	6,811	$	5,041	1%
Affiliate Investments (l)
Apex Microtechnology, Inc.	Electronic Components Supplier
Warrant (2,293 shares) (m)								$	220	$	669
Common Equity (11,690 shares)									1,169		3,435
									1,389		4,104	1%
FAR Research Inc.	Specialty Chemicals
Common Equity (1,396 units)									1,396		2,109	1%
Fiber Materials, Inc.	Aerospace & Defense Manufacturing
Second Lien Debt			12.00%/0.00%		5/30/2022	$	4,044		4,030		4,044
Common Equity (10 units)									1,000		2,279
									5,030		6,323	2%
Inflexxion, Inc. (n)	Business Services
First Lien Debt (p)(v)			5.00%/5.00%		12/16/2019		141		141		—
Revolving Loan (j)(p)(v)			5.00%/5.00%		12/16/2019		9		9		—
									150		—	0%
Medsurant Holdings, LLC	Healthcare Services
Second Lien Debt			13.00%/0.00%		6/30/2020		8,823		8,785		8,823
Preferred Equity (126,662 units) (h)									1,346		2,599
Warrant (505,176 units) (h)(m)									4,516		9,469
									14,647		20,891	5%
Microbiology Research Associates, Inc.	Healthcare Services
Subordinated Debt			11.00%/1.50%		3/13/2022		8,732		8,715		8,731
Common Equity (1,625,731 units) (j)									1,939		2,973
									10,654		11,704	3%
Mirage Trailers LLC	Utility Equipment Manufacturing
Second Lien Debt (k)(f)			13.50%/1.50%		11/25/2020		6,062		6,019		6,062
Common Equity (2,500,000 shares) (g)									2,240		3,053
									8,259		9,115	2%
Pfanstiehl, Inc.	Healthcare Products
Subordinated Debt			10.50%/0.00%		9/29/2022		6,208		6,195		6,208
Common Equity (8,500 units) (j)									850		12,631
									7,045		18,839	5%
Pinnergy, Ltd.	Oil & Gas Services
Second Lien Debt (k)			12.00%/0.00%		1/24/2020		6,000		5,989		6,000
Common Equity - Class A-2 (42,500 units) (k)									3,000		26,389
Common Equity - Class B (1,000 units) (k)									3,000		3,000
									11,989		35,389	9%
Rhino Assembly Company, LLC	Specialty Distribution
Second Lien Debt (k)			12.00%/1.00%		2/11/2023		3,990		3,973		3,990
Delayed Draw Commitment ($1,042 commitment) (i)(j)			12.00%/1.00%		5/17/2022		—		—		—
Preferred Equity (7,500 units) (j)(s)									750		1,050
									4,723		5,040	1%

7

FIDUS INVESTMENT CORPORATION

Consolidated Schedule of Investments (unaudited) (continued)

June 30, 2018

(in thousands, except shares)

Portfolio Company (a)(b) Investment Type (c)	Industry	Rate (d) Cash/PIK		Maturity		Principal Amount		Cost			Fair Value (e)		Percent of Net Assets
Steward Holding LLC (dba Steward Advanced Materials)	Aerospace & Defense Manufacturing
Second Lien Debt			12.00%/2.25%		5/12/2021	$	7,482	$	7,464		$	7,482
Common Equity (1,000,000 units)									1,000			722
									8,464			8,204	2%
Trantech Radiator Products, Inc.	Utility Equipment Manufacturing
Second Lien Debt (j)			14.25%/0.00%		12/31/2019		5,994		5,994			5,994
Common Equity (6,875 shares) (j)									688			104
									6,682			6,098	1%
Total Affiliate Investments								$	80,428		$	127,816	32%
Non-control/Non-affiliate Investments
Accent Food Services, LLC	Vending Equipment Manufacturing
Second Lien Debt (k)			10.00%/3.00%		5/30/2022	$	29,417	$	29,297		$	28,152
Common Equity (7,885 units) (h)(j)									800			577
									30,097			28,729	7%
Allied 100 Group, Inc.	Healthcare Products
Common Equity (1,250,000 units) (j)									1,250			1,513	0%
American AllWaste LLC (dba WasteWater Transport Services)	Environmental Industries
Second Lien Debt (j)			11.00%/1.50%		11/30/2023		11,054		10,990			10,990
Delayed Draw Commitment ($2,960 commitment) (i)(j)			11.00%/1.50%		11/30/2019		—		(11	)		—
Preferred Equity (500 units) (j)									500			500
									11,479			11,490	3%
AVC Investors, LLC (dba Auveco)	Specialty Distribution
Second Lien Debt (k)			11.50%/0.00%		7/3/2023		22,500		22,396			22,396
Common Equity (5,000 units) (j)									500			500
									22,896			22,896	6%
B&B Roadway and Security Solutions, LLC	Component Manufacturing
Second Lien Debt			10.50%/1.50%		8/27/2023		10,052		9,999			9,999
Common Equity (50,000 units) ($133 commitment) (h)(j)									500			500
									10,499			10,499	2%
Caldwell & Gregory, LLC	Laundry Services
Subordinated Debt			0.00%/12.00%		5/31/2022		3,220		3,220			3,220
Common Equity (500,000 units) (h)									500			753
Warrant (242,121 units) (h)(m)									241			330
									3,961			4,303	1%
Cardboard Box LLC (dba Anthony's Coal Fired Pizza)	Restaurants
Common Equity (521,021 units) (j)									521			97	0%
Cavallo Bus Lines Holdings, LLC	Transportation services
Second Lien Debt (p)			12.75%/1.50%		4/26/2021		7,398		7,375			2,000	1%
Consolidated Infrastructure Group Holdings, LP	Business Services
Second Lien Debt			11.25%/1.50%		11/30/2022		2,018		2,009			2,019
Common Equity (298 units)									500			486
									2,509			2,505	1%

8

FIDUS INVESTMENT CORPORATION

Consolidated Schedule of Investments (unaudited) (continued)

June 30, 2018

(in thousands, except shares)

Portfolio Company (a)(b) Investment Type (c)	Industry	Rate (d) Cash/PIK		Maturity		Principal Amount		Cost		Fair Value (e)		Percent of Net Assets
ControlScan, Inc.	Information Technology Services
Subordinated Debt (j)			11.00%/0.00%		1/28/2023	$	6,750	$	6,722	$	6,750
Common Equity (3,704 shares) (j)									4		563
Preferred Equity (100 shares) (j)									996		996
									7,722		8,309	2%
CRS Solutions Holdings, LLC (dba CRS Texas)	Business Services
Second Lien Debt			10.50%/1.00%		9/14/2023		9,027		8,985		8,985
Common Equity (750,000 units) (j)									750		750
									9,735		9,735	2%
EBL, LLC (EbLens)	Retail
Second Lien Debt (j)			12.00%/1.00%		1/13/2023		9,341		9,265		9,341
Common Equity (75,000 units) (j)									750		767
									10,015		10,108	2%
Gurobi Optimization, LLC	Information Technology Services
Subordinated Debt (k)			11.00%/0.00%		6/19/2023		20,000		19,909		20,000
Common Equity (5 shares)									1,500		1,877
									21,409		21,877	6%
Hilco Plastics Holdings, LLC (dba Hilco Technologies)	Component Manufacturing
Second Lien Debt			11.50%/1.50%		12/31/2019		9,852		9,827		8,933
Preferred Equity (1,000,000 units) (h)(j)									1,000		1,029
Common Equity (72,507 units) (h)(j)									500		151
									11,327		10,113	3%
Hub Acquisition Sub, LLC (dba Hub Pen)	Promotional products
Second Lien Debt (k)			12.25%/0.00%		9/23/2021		20,000		19,929		20,000
Common Equity (7,500 units)									276		1,302
									20,205		21,302	5%
IBH Holdings, LLC (fka Inflexxion, Inc.)	Business Services
Common Equity (150,000 units) (v)									—		—	0%
Ice House America, LLC	Vending Equipment Manufacturing
Second Lien Debt (j)			12.00%/3.00%		1/1/2020		4,434		4,359		4,434
Warrant (1,957,895 units) (h)(j)(m)									216		261
									4,575		4,695	1%
inthinc Technology Solutions, Inc. (n)	Information Technology Services
Royalty Rights					4/24/2020				185		—	0%
Jacob Ash Holdings, Inc.	Apparel Distribution
Second Lien Debt (k)			17.00%/0.00%		8/31/2018		4,000		4,000		4,000
Subordinated Debt			13.00%/0.00%		8/31/2018		50		50		50
Preferred Equity (66,138 shares) (g)			0.00%/15.00%		6/30/2018				1,327		1,327
Warrant (63,492 shares) (m)									68		25
									5,445		5,402	1%
K2 Industrial Services, Inc.	Industrial Cleaning & Coatings
Tranche A Loan			11.75%/2.50%		4/25/2022		10,453		10,423		8,938
Tranche B Loan			11.75%/7.25%		4/25/2022		2,261		2,255		1,972
Common Equity (1,673 shares)									1,268		—
									13,946		10,910	3%
The Kyjen Company, LLC (dba Outward Hound)	Consumer Products
Second Lien Debt (k)			12.00%/0.00%		6/8/2024		14,500		14,434		14,418
Common Equity (750 shares) (j)									750		733
									15,184		15,151	4%
LNG Indy, LLC (dba Kinetrex Energy)	Oil & Gas Distribution
Second Lien Debt (k)			11.50%/0.00%		9/28/2021		5,000		4,983		5,000
Common Equity (1,000 units)									1,000		1,605
									5,983		6,605	2%

9

FIDUS INVESTMENT CORPORATION

Consolidated Schedule of Investments (unaudited) (continued)

June 30, 2018

(in thousands, except shares)

Portfolio Company (a)(b) Investment Type (c)	Industry	Rate (d) Cash/PIK		Maturity		Principal Amount		Cost			Fair Value (e)		Percent of Net Assets
Marco Group International OpCo, LLC	Industrial Cleaning & Coatings
Second Lien Debt			10.50%/0.75%		1/21/2023	$	12,086	$	12,037		$	12,086
Common Equity (750,000 units) (h)(j)									750			787
									12,787			12,873	3%
Mesa Line Services, LLC	Utilities: Services
Second Lien Debt (j)			10.50%/0.50%		5/31/2023		9,150		9,096			9,150
Delayed Draw Commitment ($4,000 commitment) (i)(j)			10.50%/1.00%		5/31/2019		—		(8	)		—
Common Equity (500 shares) (j)									500			709
									9,588			9,859	2%
Midwest Transit Equipment, Inc.	Transportation services
Subordinated Debt (j)			13.00%/0.00%		6/23/2022		12,005		11,364			12,005
Warrant (14,384 shares) (j)(m)									361			98
Warrant (9.59% of Junior Subordinated Notes) (j)(q)									381			420
									12,106			12,523	3%
New Era Technology, Inc.	Information Technology Services
Common Equity (197,369 shares) (j)									750			812	0%
NGT Acquisition Holdings, LLC (dba Techniks Industries)	Component Manufacturing
Subordinated Debt			12.50%/0.00%		3/21/2022		11,000		10,957			10,423
Common Equity (378 units) (j)									500			224
									11,457			10,647	3%
Oaktree Medical Centre, P.C. (dba Pain Management Associates)	Healthcare Services
First Lien Debt (j)(u)			14.50%/0.00%		1/1/2018		570		648			640
First Lien Debt (j)(u)			10.00%/12.00%		1/1/2018		7,271		7,858			7,776
Revolving Loan (j)(u)			14.50%/0.00%		1/1/2018		2,500		2,835			2,800
									11,341			11,216	3%
OMC Investors, LLC (dba Ohio Medical Corporation)	Healthcare Products
Second Lien Debt			12.00%/0.00%		7/15/2021		10,000		9,945			8,132
Common Equity (5,000 units)									500			30
									10,445			8,162	2%
Palmetto Moon, LLC	Retail
First Lien Debt			11.50%/1.00%		10/31/2021		5,520		5,494			5,520
Common Equity (499 units) (j)									499			260
									5,993			5,780	1%
Plymouth Rock Energy, LLC	Business Services
Second Lien Debt (k)			12.00%/0.00%		6/30/2019		7,018		7,018			7,018	2%
Power Grid Components, Inc.	Specialty Distribution
Second Lien Debt (k)			11.00%/1.00%		5/20/2023		11,225		11,171			11,171
Preferred Equity (392 shares) (j)									392			392
Common Equity (9,695 shares) (j)									358			358
									11,921			11,921	3%
Pugh Lubricants, LLC	Specialty Distribution
Second Lien Debt (k)			12.25%/0.00%		5/10/2022		18,581		18,514			18,581
Common Equity (6,125 units) (h)(j)									612			910
									19,126			19,491	5%
Restaurant Finance Co, LLC	Restaurants
Second Lien Debt (k)(p)			15.00%/4.00%		7/31/2020		9,342		9,314			1,989	1%
Revenue Management Solutions, LLC	Information Technology Services
Subordinated Debt (k)			11.50%/1.00%		7/4/2022		8,883		8,818			9,060
Common Equity (2,250,000 shares)									2,250			3,264
									11,068			12,324	3%
Rohrer Corporation	Packaging
Common Equity (389 shares)									750			816	0%

10

FIDUS INVESTMENT CORPORATION

Consolidated Schedule of Investments (unaudited) (continued)

June 30, 2018

(in thousands, except shares)

Portfolio Company (a)(b) Investment Type (c)	Industry	Rate (d) Cash/PIK		Maturity		Principal Amount		Cost		Fair Value (e)		Percent of Net Assets
SES Investors, LLC (dba SES Foam)	Building Products Manufacturing
Second Lien Debt			13.00%/0.00%		12/29/2020	$	4,095	$	4,062	$	3,336
Common Equity (6,000 units) (h)(j)									600		—
									4,662		3,336	1%
Simplex Manufacturing Co.	Aerospace & Defense Manufacturing
Subordinated Debt			14.00%/0.00%		11/1/2018		4,050		4,050		4,050
Warrant (29 shares) (m)									1,155		3,020
									5,205		7,070	2%
SimplyWell, Inc.	Healthcare Services
Second Lien Debt			12.00%/1.25%		2/23/2021		10,109		10,071		10,109
Preferred Equity (309,142 shares)									500		535
									10,571		10,644	3%
Software Technology, LLC	Information Technology Services
Subordinated Debt (k)			11.00%/0.00%		6/23/2023		8,750		8,717		8,750
Common Equity (11 shares)									1,125		1,225
									9,842		9,975	2%
SpendMend, LLC	Business Services
Second Lien Debt (k)			11.00%/1.00%		7/8/2023		10,049		9,999		9,999
Common Equity (1,000,000 units)									1,000		1,000
									10,999		10,999	3%
The Wolf Organization, LLC	Building Products Manufacturing
Common Equity (175 shares)									1,445		4,954	1%
Thermoforming Technology Group LLC (dba Brown Machine Group)	Capital Equipment Manufacturing
Second Lien Debt (k)			12.50%/0.00%		9/14/2021		23,200		23,121		23,200
Common Equity (3,760 units) (h)(j)									228		540
									23,349		23,740	6%
Tile Redi, LLC	Building Products Manufacturing
First Lien Debt (j)(r)			12.31%/0.00%		6/16/2022		10,194		10,112		10,194	3%
Toledo Molding & Die, Inc.	Component Manufacturing
Second Lien Debt (j)			10.50%/0.00%		12/18/2018		10,000		9,982		10,000	3%
TransGo, LLC	Component Manufacturing
Second Lien Debt			13.25%/0.00%		8/28/2022		9,500		9,464		9,500
Common Equity (1,000 units)									1,000		799
									10,464		10,299	3%
The Tranzonic Companies	Specialty Distribution
Subordinated Debt (j)			10.00%/1.50%		3/27/2025		5,622		5,568		5,568
Preferred Equity (5,000 units) (j)									500		500
Common Equity (1 units) (j)									—		—
									6,068		6,068	2%
UBEO, LLC	Business Services
Subordinated Debt (j)			11.00%/0.00%		10/3/2024		7,100		7,032		7,032
Common Equity (Units) (705,000 units) (j)									705		705
									7,737		7,737	2%
United Biologics, LLC	Healthcare Services
Preferred Equity (98,377 units) (h)(j)									1,008		301
Warrant (57,469 units) (m)									566		112
									1,574		413	0%
US GreenFiber, LLC	Building Products Manufacturing
Second Lien Debt (k)			12.00%/2.00%		3/1/2019		14,290		14,281		13,906
Common Equity (2,522 units) (h)(j)									586		—
									14,867		13,906	4%
US Pack Logistics LLC	Transportation services
Second Lien Debt (k)			12.00%/1.75%		3/28/2023		7,345		7,325		7,345
Common Equity (5,833 units) (h)(j)									583		832
Preferred Equity (9,458 units) (h)(j)									946		1,010
									8,854		9,187	2%

11

FIDUS INVESTMENT CORPORATION

Consolidated Schedule of Investments (unaudited) (continued)

June 30, 2018

(in thousands, except shares)

Portfolio Company (a)(b) Investment Type (c)	Industry	Rate (d) Cash/PIK	Maturity		Principal Amount		Cost		Fair Value (e)		Percent of Net Assets
Vanguard Dealer Services, L.L.C.	Business Services
Second Lien Debt		12.25%/0.00%		8/2/2023	$	11,450	$	11,419	$	11,450
Common Equity (6,000 units)								600		1,181
Common Equity (2,380 units) (j)								504		469
								12,523		13,100	3%
Virginia Tile Company, LLC	Specialty Distribution
Second Lien Debt (k)		12.25%/0.00%		4/7/2022		12,000		11,975		12,000
Common Equity (17 units)								342		1,597
								12,317		13,597	3%
Worldwide Express Operations, LLC	Transportation services
Second Lien Debt (j)(o)		10.72%/0.00%		2/3/2025		10,000		9,876		10,000
Common Equity (4,000 units) (h)(j)								4,000		4,436
								13,876		14,436	4%
Total Non-control/Non-affiliate Investments							$	524,429	$	513,325	130%
Total Investments							$	611,668	$	646,182	163%

(a) See Note 3 to the consolidated financial statements for portfolio composition by geographic location.

(b) Equity ownership may be held in shares or units of companies related to the portfolio companies.

(c) All debt investments are income producing, unless otherwise indicated. Equity investments are non-income producing unless otherwise noted.

(d) Rate includes the cash interest or dividend rate and paid-in-kind interest or dividend rate, if any, as of June 30, 2018. Generally, payment-in-kind interest can be paid-in-kind or all in cash.

(e) The Company’s investment portfolio is comprised entirely 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. Therefore, the Company values all of its portfolio investments at fair value, as determined in good faith by the board of directors, using significant unobservable Level 3 inputs.

(f) The investment bears cash interest at a variable rate that is determined by reference to one-month LIBOR, which is reset monthly. The cash interest rate is set as one-month LIBOR + 11.50% and is subject to a 12.50% interest rate floor. The Company has provided the interest rate in effect as of June 30, 2018.

(g) Income producing. Maturity date, if any, represents mandatory redemption date.

(h) Investment is held by a wholly-owned subsidiary of the Company, other than the Funds.

(i) The disclosed commitment represents the unfunded amount as of June 30, 2018. The Company is earning 0.50% interest on the unfunded balance of the commitment. The interest rate disclosed represents the rate which will be earned if the commitment is funded.

(j) Investment pledged as collateral for the Credit Facility and, as a result, is not directly available to the creditors of the Company to satisfy any obligations of the Company other than the Company's obligations under the Credit Facility (see Note 6 to the consolidated financial statements).

(k) The portion of the investment not held by the Funds is pledged as collateral for the Credit Facility and, as a result, is not directly available to the creditors of the Company to satisfy any obligations of the Company other than the Company's obligations under the Credit Facility (see Note 6 to the consolidated financial statements).

(l) As defined in the 1940 Act, the Company is deemed to be an "Affiliated Person" of this portfolio company because it owns 5% or more of the portfolio company's outstanding voting securities or it has the power to exercise control over the management or policies of such portfolio company. Transactions in which the issuer was an Affiliated Person are detailed in Note 3 to the consolidated financial statements.

(m) Warrants entitle the Company to purchase a predetermined number of shares or units of common equity, and are non-income producing. The purchase price and number of shares are subject to adjustment under certain conditions until the expiration date, if any.

(n) Investment in portfolio company that has sold its operations and is in the process of winding down.

(o) The investment bears interest at a variable rate that is determined by reference to six-month LIBOR, which is reset semi-annually. The interest rate is set as six-month LIBOR + 8.75% and is subject to a 1.00% LIBOR interest rate floor. The Company has provided the interest rate in effect as of June 30, 2018.

(p) Investment was on non-accrual status as of June 30, 2018, meaning the Company has ceased recognizing interest income on the investment.

(q) Warrant entitles the Company to purchase 9.59% of the outstanding principal of Junior Subordinated Notes prior to exercise, and is non-income producing.

(r) The investment bears interest at a variable rate that is determined by reference to three-month LIBOR, which is reset quarterly. The interest rate is set as three-month LIBOR + 10.00% and is subject to a 1.00% LIBOR interest rate floor. The Company has provided the interest rate in effect as of June 30, 2018.

(s) A portion of the investment is held by a wholly-owned subsidiary of the Company, other than the Funds.

(t) As defined in the 1940 Act, the Company is deemed to be both an “Affiliated Person” of and “Control” this portfolio company because it owns 25% or more of the portfolio company’s outstanding voting securities or it has the power to exercise control over the management or policies of such portfolio company. Transactions in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to Control are detailed in Note 3 to the consolidated financial statements.

(u) The debt investment continues to pay interest, including the default rate, while the portfolio company pursues refinancing options.

(v) The historical portfolio company sold its operations and is in the process of liquidating. As consideration for the sale, the Company received a new equity investment in the acquiring entity.

See Notes to Consolidated Financial Statements (unaudited).

12

FIDUS INVESTMENT CORPORATION

Consolidated Schedule of Investments

December 31, 2017

(in thousands, except shares)

Portfolio Company (a)(b) Investment Type (c)	Industry	Rate (d) Cash/PIK		Maturity		Principal Amount		Cost		Fair Value (e)		Percent of Net Assets
Control Investments (t)
FDS Avionics Corp. (dba Flight Display Systems)	Aerospace & Defense Manufacturing
Second Lien Debt			4.00%/11.00%		4/1/2020	$	5,556	$	5,546	$	4,348
Common Equity (7,478 shares) (j)									748		375
									6,294		4,723	1%
Total Control Investments								$	6,294	$	4,723	1%
Affiliate Investments (l)
Apex Microtechnology, Inc.	Electronic Components Supplier
Warrant (2,293 shares) (m)								$	220	$	543
Common Equity (11,690 shares)									1,169		2,857
									1,389		3,400	1%
FAR Research Inc.	Specialty Chemicals
Common Equity (1,396 units)									1,396		1,447	0%
Fiber Materials, Inc.	Aerospace & Defense Manufacturing
Second Lien Debt			12.00%/1.00%		5/30/2022	$	4,044		4,028		4,044
Common Equity (10 units)									1,000		1,838
									5,028		5,882	1%
Inflexxion, Inc.	Business Services
First Lien Debt			5.00%/5.00%		12/16/2019		4,478		4,468		2,647
Revolving Loan (j)			5.00%/5.00%		12/16/2019		275		273		163
Preferred Equity (252,046 units)									252		—
Preferred Equity (308,987 units)									309		—
Preferred Equity (1,400 units)									1,400		—
Preferred Equity (550,000 units)									200		—
									6,902		2,810	1%
Medsurant Holdings, LLC	Healthcare Services
Second Lien Debt			12.25%/0.75%		6/30/2020		8,824		8,776		8,824
Preferred Equity (126,662 units) (h)									1,346		2,753
Warrant (505,176 units) (h)(m)									4,516		10,048
									14,638		21,625	5%
Microbiology Research Associates, Inc.	Healthcare Services
Subordinated Debt			11.00%/1.50%		3/13/2022		8,667		8,649		8,667
Common Equity (1,625,731 units) (j)									1,939		3,788
									10,588		12,455	3%
Mirage Trailers LLC	Utility Equipment Manufacturing
Second Lien Debt (k)(f)			12.88%/1.50%		11/25/2020		6,017		5,964		6,017
Common Equity (2,500,000 shares)(g)									2,340		2,939
									8,304		8,956	2%
Pfanstiehl, Inc.	Healthcare Products
Subordinated Debt			10.50%/0.00%		9/29/2021		6,208		6,193		6,208
Common Equity (8,500 units) (j)									850		9,070
									7,043		15,278	4%
Pinnergy, Ltd.	Oil & Gas Services
Second Lien Debt (k)			0.00%/10.00%		1/24/2020		9,300		9,286		9,300
Common Equity—Class A-2 (42,500 units) (k)									3,000		15,621
Common Equity—Class B (1,000 units) (k)									3,000		3,000
									15,286		27,921	7%
Rhino Assembly Company, LLC	Specialty Distribution
Second Lien Debt			12.00%/1.00%		2/11/2023		3,514		3,498		3,498
Delayed Draw Commitment ($1,500 commitment) (i)(j)			12.00%/1.00%		5/17/2022		—		—		—
Preferred Equity (7,500 units) (j)(s)									750		750
									4,248		4,248	1%

13

FIDUS INVESTMENT CORPORATION

Consolidated Schedule of Investments (continued)

December 31, 2017

(in thousands, except shares)

Portfolio Company (a)(b) Investment Type (c)	Industry	Rate (d) Cash/PIK		Maturity		Principal Amount		Cost		Fair Value (e)		Percent of Net Assets
Safety Products Group, LLC (n)	Safety Products Manufacturing
Preferred Equity (749 units) (h)(j)								$	—	$	12
Common Equity (676 units) ($2,852 commitment) (h)(j)									—		—
									—		12	0%
Steward Holding LLC (dba Steward Advanced Materials)	Aerospace & Defense Manufacturing
Second Lien Debt			12.00%/3.25%		5/12/2021	$	7,382		7,360		7,382
Common Equity (1,000,000 units)									1,000		500
									8,360		7,882	2%
Trantech Radiator Products, Inc.	Utility Equipment Manufacturing
Second Lien Debt (j)			14.25%/0.00%		5/31/2018		6,994		6,992		6,694
Common Equity (6,875 shares) (j)									688		13
									7,680		6,707	2%
World Wide Packaging, LLC	Consumer Products
Common Equity (1,517,573 units) (h)(j)									499		4,388	1%
Total Affiliate Investments								$	91,361	$	123,011	30%
Non-control/Non-affiliate Investments
Accent Food Services, LLC	Vending Equipment Manufacturing
Second Lien Debt (k)			10.00%/3.00%		5/30/2022	$	28,983	$	28,846	$	28,984
Common Equity (7,885 units) (h)(j)									800		635
									29,646		29,619	8%
Allied 100 Group, Inc.	Healthcare Products
Subordinated Debt (k)			11.50%/0.00%		5/26/2020		13,000		12,973		13,000
Common Equity (1,250,000 units) (j)									1,249		1,425
									14,222		14,425	4%
Caldwell & Gregory, LLC	Laundry Services
Subordinated Debt			0.00%/ 12.00%		5/31/2022		3,035		3,035		3,035
Common Equity (500,000 units) (h)									500		625
Warrant (242,121 units) (h)(m)									242		268
									3,777		3,928	1%
Cardboard Box LLC (dba Anthony's Coal Fired Pizza)	Restaurants
Common Equity (521,021 units) (j)									520		85	0%
Cavallo Bus Lines Holdings, LLC	Transportation services
Second Lien Debt			12.75%/0.00%		4/26/2021		7,395		7,370		6,572	2%
Comprehensive Logistics Co., Inc.	Business Services
Subordinated Debt (k)			11.50%/4.50%		11/22/2021		15,775		15,716		15,775	4%
Consolidated Infrastructure Group Holdings, LP	Business Services
Second Lien Debt			11.25%/1.50%		11/30/2022		2,002		1,993		1,993
Common Equity (298 shares)									500		500
									2,493		2,493	1%
ControlScan, Inc.	Information Technology Services
Subordinated Debt (j)			11.00%/0.00%		1/28/2023		6,750		6,719		6,719
Common Equity (3,704 shares) (j)									4		4
Preferred Equity (100 shares) (j)									996		996
									7,719		7,719	2%
EBL, LLC (EbLens)	Retail
Second Lien Debt (j)			12.00%/1.00%		1/13/2023		9,294		9,210		9,210
Common Equity (75,000 units) (j)									750		750
									9,960		9,960	3%

14

FIDUS INVESTMENT CORPORATION

Consolidated Schedule of Investments (continued)

December 31, 2017

(in thousands, except shares)

Portfolio Company (a)(b) Investment Type (c)	Industry	Rate (d) Cash/PIK		Maturity		Principal Amount		Cost			Fair Value (e)		Percent of Net Assets
Gurobi Optimization, LLC	Information Technology Services
Subordinated Debt (k)			11.00%/0.00%		6/19/2023	$	20,000	$	19,901		$	19,901
Common Equity (5 shares)									1,500			1,500
									21,401			21,401	5%
Hilco Plastics Holdings, LLC (dba Hilco Technologies)	Component Manufacturing
Subordinated Debt			11.50%/4.00%		7/15/2022		8,228		8,198			7,207
Common Equity (72,507 units) (h)(j)									500			163
									8,698			7,370	2%
Hub Acquisition Sub, LLC (dba Hub Pen)	Promotional products
Second Lien Debt (k)			12.25%/0.00%		9/23/2021		16,750		16,685			16,750
Common Equity (7,500 units)									276			902
									16,961			17,652	4%
Ice House America, LLC	Vending Equipment Manufacturing
Second Lien Debt (j)			12.00%/3.00%		1/1/2020		4,367		4,269			4,367
Warrant (1,957,895 units) (h)(j)(m)									215			234
									4,484			4,601	1%
inthinc Technology Solutions, Inc. (n)	Information Technology Services
Royalty Rights					4/24/2020				185			—	0%
IOS Acquisitions, Inc. (n)	Oil & Gas Services
Common Equity (2,152 units) (j)									103			17	0%
Jacob Ash Holdings, Inc.	Apparel Distribution
Second Lien Debt (k)			17.00%/0.00%		6/30/2018		4,000		3,999			4,000
Subordinated Debt			13.00%/0.00%		6/30/2018		510		509			510
Preferred Equity (66,138 shares) (g)			0.00%/15.00%		6/30/2018				1,238			1,152
Warrant (63,492 shares) (m)									67			—
									5,813			5,662	1%
K2 Industrial Services, Inc.	Industrial Cleaning & Coatings
Tranche A Loan			11.75%/2.50%		4/25/2022		10,304		10,270			10,304
Tranche B Loan			11.75%/7.25%		4/25/2022		2,181		2,174			2,181
Common Equity (1,673 shares)									1,268			457
									13,712			12,942	3%
The Kyjen Company, LLC (dba Outward Hound)	Consumer Products
Second Lien Debt (k)			12.00%/0.00%		6/8/2024		14,500		14,428			14,428
Common Equity (750 shares) (j)									750			750
									15,178			15,178	4%
LNG Indy, LLC (dba Kinetrex Energy)	Oil & Gas Distribution
Second Lien Debt (k)			11.50%/0.00%		9/28/2021		5,000		4,980			5,000
Common Equity (1,000 units)									1,000			1,137
									5,980			6,137	2%
Marco Group International OpCo, LLC	Industrial Cleaning & Coatings
Second Lien Debt			10.50%/0.75%		1/21/2023		12,041		11,986			11,986
Common Equity (750,000 shares) (h)(j)									750			750
									12,736			12,736	3%
Mesa Line Services, LLC	Utilities: Services
Second Lien Debt (j)			10.50%/1.00%		5/31/2023		9,108		9,048			9,048
Delayed Draw Commitment ($4,000 commitment) (i)(j)			10.50%/1.00%		5/31/2019		—		(13	)		—
Common Equity (500 shares) (j)									500			500
									9,535			9,548	2%

15

FIDUS INVESTMENT CORPORATION

Consolidated Schedule of Investments (continued)

December 31, 2017

(in thousands, except shares)

Portfolio Company (a)(b) Investment Type (c)	Industry	Rate (d) Cash/PIK		Maturity		Principal Amount		Cost		Fair Value (e)		Percent of Net Assets
Midwest Transit Equipment, Inc.	Transportation services
Subordinated Debt (j)			13.00%/0.00%		6/23/2022	$	12,005	$	11,286	$	12,005
Warrant (14,384 shares) (j)(m)									361		80
Warrant (9.59% of Junior Subordinated Notes) (j)(q)									381		405
									12,028		12,490	3%
New Era Technology, Inc.	Information Technology Services
Second Lien Debt (j)			11.00%/1.50%		9/3/2022		11,646		11,598		11,646
Common Equity (197,369 shares) (j)									750		828
									12,348		12,474	3%
NGT Acquisition Holdings, LLC (dba Techniks Industries)	Component Manufacturing
Subordinated Debt			12.50%/0.00%		3/21/2022		11,000		10,952		11,000
Common Equity (378 units) (j)									500		470
									11,452		11,470	3%
Oaktree Medical Centre, P.C. (dba Pain Management Associates)	Healthcare Services
First Lien Debt (j)			11.50%/0.00%		1/1/2018		571		648		631
First Lien Debt (j)			7.00%/12.00%		1/1/2018		6,849		7,437		6,438
Revolving Loan (j)			11.50%/0.00%		1/1/2018		2,500		2,835		2,743
									10,920		9,812	2%
OMC Investors, LLC (dba Ohio Medical Corporation)	Healthcare Products
Second Lien Debt			12.00%/0.00%		7/15/2021		10,000		9,936		8,438
Common Equity (5,000 shares)									500		214
									10,436		8,652	2%
Palmetto Moon, LLC	Retail
First Lien Debt			11.50%/1.00%		10/31/2021		6,187		6,158		6,187
Common Equity (499 units) (j)									499		286
									6,657		6,473	2%
Plymouth Rock Energy, LLC	Business Services
Second Lien Debt (k)			11.00%/0.00%		6/30/2019		5,545		5,545		5,545	1%
Pugh Lubricants, LLC	Specialty Distribution
Second Lien Debt (k)			12.25%/0.00%		5/10/2022		18,581		18,505		18,581
Common Equity (6,125 units) (h)(j)									612		931
									19,117		19,512	5%
Restaurant Finance Co, LLC	Restaurants
Second Lien Debt (k)(p)			15.00%/4.00%		7/31/2020		9,342		9,314		2,046	1%
Revenue Management Solutions, LLC	Information Technology Services
Subordinated Debt (k)			11.50%/1.00%		7/4/2022		8,838		8,766		8,838
Subordinated Debt (j)			7.00%/6.50%		7/4/2022		817		806		817
Common Equity (2,250,000 units)									2,250		2,571
									11,822		12,226	3%
Rohrer Corporation	Packaging
Common Equity (389 shares)									750		878	0%
SES Investors, LLC (dba SES Foam)	Building Products Manufacturing
Second Lien Debt			13.00%/0.00%		12/29/2020		4,095		4,056		3,229
Common Equity (6,000 units) (h)(j)									600		—
									4,656		3,229	1%

16

FIDUS INVESTMENT CORPORATION

Consolidated Schedule of Investments (continued)

December 31, 2017

(in thousands, except shares)

Portfolio Company (a)(b) Investment Type (c)	Industry	Rate (d) Cash/PIK		Maturity		Principal Amount		Cost		Fair Value (e)		Percent of Net Assets
Simplex Manufacturing Co.	Aerospace & Defense Manufacturing
Subordinated Debt			14.00%/0.00%		11/1/2018	$	4,050	$	4,050	$	4,050
Warrant (29 shares) (m)									1,155		3,240
									5,205		7,290		2%
SimplyWell, Inc.	Healthcare Services
Second Lien Debt			12.00%/1.25%		2/23/2021		10,046		10,001		10,001
Preferred Equity (309,142 shares)									500		500
									10,501		10,501		3%
Six Month Smiles Holdings, Inc.	Healthcare Products
Second Lien Debt (j)(p)			0.00%/14.50%		7/31/2020		9,395		9,377		5,041		1%
Software Technology, LLC	Information Technology Services
Subordinated Debt (k)			11.00%/0.00%		6/23/2023		8,750		8,712		8,749
Common Equity (11 units)									1,125		1,183
									9,837		9,932		3%
The Wolf Organization, LLC	Building Products Manufacturing
Common Equity (175 shares)									1,445		4,223		1%
Thermoforming Technology Group LLC (dba Brown Machine Group)	Capital Equipment Manufacturing
Second Lien Debt (k)			12.50%/0.00%		9/14/2021		19,700		19,626		19,700
Common Equity (3,500 units) (h)(j)									169		360
									19,795		20,060		5%
Tile Redi, LLC	Building Products Manufacturing
First Lien Debt (j)(r)			11.34%/0.00%		6/16/2022		10,194		10,102		10,102		3%
Toledo Molding & Die, Inc.	Component Manufacturing
Second Lien Debt (j)			10.50%/0.00%		12/18/2018		10,000		9,964		10,000		3%
TransGo, LLC	Component Manufacturing
Second Lien Debt			13.25%/0.00%		8/28/2022		9,500		9,460		9,500
Common Equity (1,000 units)									1,000		847
									10,460		10,347		3%
United Biologics, LLC	Healthcare Services
Second Lien Debt			12.00%/2.00%		4/30/2018		8,876		8,866		8,876
Preferred Equity (98,377 units) (h)(j)									1,069		879
Warrant (57,469 units) (m)									566		234
									10,501		9,989		3%
US GreenFiber, LLC	Building Products Manufacturing
Second Lien Debt (k)			12.00%/2.00%		3/1/2019		14,147		14,131		13,014
Common Equity (2,522 units) (h)(j)									586		—
									14,717		13,014		3%
US Pack Logistics LLC	Transportation services
Second Lien Debt (k)			12.00%/1.75%		3/28/2023		7,282		7,257		7,282
Common Equity (5,833 units) (h)(j)									583		1,078
Preferred Equity (9,458 units) (h)(j)									945		966
									8,785		9,326		2%
Vanguard Dealer Services, L.L.C.	Business Services
Second Lien Debt			12.25%/0.00%		1/30/2021		11,450		11,416		11,450
Common Equity (6,000 shares)									600		946
									12,016		12,396		3%
Virginia Tile Company, LLC	Specialty Distribution
Second Lien Debt (k)			12.25%/0.00%		4/7/2022		12,000		11,971		12,000
Common Equity (17 units)									342		1,493
									12,313		13,493		4%

17

FIDUS INVESTMENT CORPORATION

Consolidated Schedule of Investments (continued)

December 31, 2017

(in thousands, except shares)

Portfolio Company (a)(b) Investment Type (c)	Industry	Rate (d) Cash/PIK		Maturity		Principal Amount		Cost		Fair Value (e)		Percent of Net Assets
Worldwide Express Operations, LLC	Transportation services
Second Lien Debt (j)(o)			10.20%/0.00%		2/3/2025	$	10,000	$	9,867	$	10,000
Common Equity (4,000 units) (h)(j)									4,000		4,233
									13,867		14,233		4%
Total Non-control/Non-affiliate Investments								$	480,139	$	468,574		121%
Total Investments								$	577,794	$	596,308		152%

(a) See Note 3 to the consolidated financial statements for portfolio composition by geographic location.

(b) Equity ownership may be held in shares or units of companies related to the portfolio companies.

(c) All debt investments are income producing, unless otherwise indicated. Equity investments are non-income producing unless otherwise noted.

(d) Rate includes the cash interest or dividend rate and paid-in-kind interest or dividend rate, if any, as of December 31, 2017. Generally, payment-in-kind interest can be paid-in-kind or all in cash.

(e) The Company’s investment portfolio is comprised entirely 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. Therefore, the Company values all of its portfolio investments at fair value, as determined in good faith by the board of directors, using significant unobservable Level 3 inputs.

(f) The investment bears cash interest at a variable rate that is determined by reference to one-month LIBOR, which is reset monthly. The cash interest rate is set as one-month LIBOR + 11.50% and is subject to a 12.50% interest rate floor. The Company has provided the interest rate in effect as of December 31, 2017.

(g) Income producing. Maturity date, if any, represents mandatory redemption date.

(h) Investment is held by a wholly-owned subsidiary of the Company, other than the Funds.

(i) The disclosed commitment represents the unfunded amount as of December 31, 2017. The Company is earning 0.50% interest on the unfunded balance of the commitment. The interest rate disclosed represents the rate which will be earned if the commitment is funded.

(j) Investment pledged as collateral for the Credit Facility and, as a result, is not directly available to the creditors of the Company to satisfy any obligations of the Company other than the Company's obligations under the Credit Facility (see Note 6 to the consolidated financial statements).

(k) The portion of the investment not held by the Funds is pledged as collateral for the Credit Facility and, as a result, is not directly available to the creditors of the Company to satisfy any obligations of the Company other than the Company's obligations under the Credit Facility (see Note 6 to the consolidated financial statements).

(l) As defined in the 1940 Act, the Company is deemed to be an "Affiliated Person" of this portfolio company because it owns 5% or more of the portfolio company's outstanding voting securities or it has the power to exercise control over the management or policies of such portfolio company. Transactions in which the issuer was an Affiliated Person are detailed in Note 3 to the consolidated financial statements.

(m) Warrants entitle the Company to purchase a predetermined number of shares or units of common equity, and are non-income producing. The purchase price and number of shares are subject to adjustment under certain conditions until the expiration date, if any.

(n) Investment in portfolio company that has sold its operations and is in the process of winding down.

(o) The investment bears interest at a variable rate that is determined by reference to six-month LIBOR, which is reset semi-annually. The interest rate is set as six-month LIBOR + 8.75% and is subject to a 1.00% LIBOR interest rate floor. The Company has provided the interest rate in effect as of December 31, 2017.

(p) Investment was on non-accrual status as of December 31, 2017, meaning the Company has ceased recognizing interest income on the investment.

(q) Warrant entitles the Company to purchase 9.59% of the outstanding principal of Junior Subordinated Notes prior to exercise, and is non-income producing.

(r) The investment bears interest at a variable rate that is determined by reference to three-month LIBOR, which is reset quarterly. The interest rate is set as three-month LIBOR + 10.00% and is subject to a 1.00% LIBOR interest rate floor. The Company has provided the interest rate in effect as of December 31, 2017.

(s) A portion of the investment is held by a wholly-owned subsidiary of the Company, other than the Funds.

(t) As defined in the 1940 Act, the Company is deemed to be both an “Affiliated Person” of and “Control” this portfolio company because it owns 25% or more of the portfolio company’s outstanding voting securities or it has the power to exercise control over the management or policies of such portfolio company. Transactions in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to Control are detailed in Note 3 to the consolidated financial statements.

See Notes to Consolidated Financial Statements (unaudited).

18

FIDUS INVESTMENT CORPORATION

Notes to Consolidated Financial Statements (unaudited)

(in thousands, except shares and per share data)

Note 1. Organization and Nature of Business

Fidus Investment Corporation (“FIC,” and together with its subsidiaries, the “Company”), a Maryland Corporation, operates as an externally managed, closed-end, non-diversified business development company (“BDC”) under the Investment Company Act of 1940 (“1940 Act”). FIC completed its initial public offering, or IPO, in June 2011. In addition, for federal income tax purposes, the Company elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

The Company provides customized debt and equity financing solutions to lower middle-market companies, and may make investments directly or through its two wholly-owned investment company subsidiaries, Fidus Mezzanine Capital, L.P. (“Fund I”) and Fidus Mezzanine Capital II, L.P. (“Fund II”) (collectively Fund I and Fund II are referred to as the “Funds”). The Funds are licensed by the U.S. Small Business Administration (the “SBA”) as small business investment companies (“SBIC”). The SBIC licenses allow the Funds to obtain leverage by issuing SBA-guaranteed debentures (“SBA debentures”), subject to the issuance of leverage commitments by the SBA and other customary procedures. As SBICs, the Funds are 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 they may invest and the structure of those investments.

We believe that utilizing both FIC and the Funds as investment vehicles provides us with access to a broader array of investment opportunities. Given our access to lower cost capital through the SBA’s SBIC debenture program, we expect that the majority of our investments will continue to be made through the Funds until the Funds reach their borrowing limit under the program. For three or more SBICs under common control, the maximum amount of outstanding SBA debentures cannot exceed $350,000.

Fund I has also elected to be regulated as a BDC under the 1940 Act. Fund II is not registered under the 1940 Act and relies on the exclusion from the definition of investment company contained in Section 3(c)(7) of the 1940 Act.

The Company pays a quarterly base management fee and an incentive fee to Fidus Investment Advisors, LLC (the “Investment Advisor”) under an investment advisory agreement (the “Investment Advisory Agreement”).

Note 2. Significant Accounting Policies

Basis of presentation: The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) pursuant to the requirements for reporting on Form 10-Q, Accounting Standards Codification (“ASC”) 946, Financial Services – Investment Companies (“ASC 946), and Articles 6 or 10 of Regulation S-X. 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 audited financial statements and notes thereto for the year ended December 31, 2017.

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: Pursuant to Article 6 of Regulation S-X and ASC 946, the Company 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 Company. As a result, the consolidated financial statements of the Company include only the accounts of the Company and its wholly-owned subsidiaries, including the Funds. All significant intercompany balances and transactions have been eliminated.

Investment risks: The Company’s investments are subject to a variety of risks. These risks may include, but are not limited to the following:

• Market risk—In contrast to investment-grade bonds (the market prices of which change primarily as a reaction to changes in interest rates), the market prices of high-yield bonds (which are also affected by changes in interest rates) are influenced much more by credit factors and financial results of the issuer as well as general economic factors that influence the financial markets as a whole. The portfolio companies in which the Company invests may be unseasoned, unprofitable and/or have little established operating history or earnings. These companies may also lack technical, marketing, financial, and other resources or may be dependent upon the success of one product or service, a unique distribution channel, or the effectiveness of a manager or management team, as compared to larger, more

19

FIDUS INVESTMENT CORPORATION

Notes to Consolidated Financial Statements (unaudited)

(in thousands, except shares and per share data)

established entities. The failure of a single product, service or distribution channel, or the loss or the ineffectiveness of a key executive or executives within the management team may have a materially adverse impact on such companies. Furthermore, these companies may be more vulnerable to competition and to overall economic conditions than larger, more established entities.

• Credit risk—Credit risk represents the risk that the Company would incur if the counterparties failed to perform pursuant to the terms of their agreements with the Company. Issues of high-yield debt securities in which the Company invests are more likely to default on interest or principal than are issues of investment-grade securities.

• Liquidity risk—Liquidity risk represents the possibility that the Company may not be able to sell its investments quickly or at a reasonable price (given the lack of an established market).

• Interest rate risk—Interest rate risk represents the likelihood that a change in interest rates could have an adverse impact on the fair value of an interest-bearing financial instrument.

• Prepayment risk—Certain of the Company’s debt investments allow for prepayment of principal without penalty. Downward changes in market interest rates may cause prepayments to occur at a faster than expected rate, thereby effectively shortening the maturity of the debt investments and making the instrument less likely to be an income producing instrument through the stated maturity date.

• Off-Balance sheet risk—Some of the Company’s financial instruments contain off-balance sheet risk. Generally, these financial instruments represent future commitments to purchase other financial instruments at defined terms at defined future dates. See Note 7 for further details.

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

Investment classification: The Company 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 Company 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 Company 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. Transfers between classifications are assumed to have occurred at the beginning of the quarter during which the investment was reclassified.

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

Cash 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 Company places its cash in financial institutions and, at times, such balances may be in excess of the Federal Deposit Insurance Corporation insurance limits. The Company does not believe its cash balances are exposed to any significant credit risk.

Deferred financing costs: Deferred financing costs consist of fees and expenses paid in connection with the Credit Facility (as defined in Note 6) and SBA debentures. Deferred financing costs are capitalized and amortized over the term of the debt agreement using the effective interest method. Unamortized deferred financing costs are presented as an offset to the corresponding debt liabilities on the consolidated statements of assets and liabilities.

Deferred equity offering costs: Deferred equity offering costs include registration expenses related to shelf filings, including expenses related to the launch of the ATM Program. These expenses primarily consist of U.S. Securities and Exchange Commission (“SEC”) registration fees, legal fees and accounting fees incurred. These expenses are included in prepaid assets and are charged to additional paid-in capital upon the receipt of proceeds from an equity offering or charged to expense if no offering is completed.

Realized gains or losses and unrealized appreciation or depreciation on investments: Realized gains or losses on investments are recorded upon the sale or disposition of a portfolio investment and are calculated as the difference between the net proceeds from the sale or disposition and the cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized. Net change in unrealized appreciation or depreciation on the consolidated statements of operations includes changes in the fair value of investments from the prior period, as determined in good faith by the Company’s board of directors (the “Board”) through the application of the Company’s valuation policy, as well as reclassifications of any prior period unrealized appreciation or depreciation on exited investments to realized gains or losses on investments.

20

FIDUS INVESTMENT CORPORATION

Notes to Consolidated Financial Statements (unaudited)

(in thousands, except shares and per share data)

Interest and dividend income: Interest and dividend income is recorded on the accrual basis to the extent that the Company expects to collect such amounts. Interest is accrued daily based on the outstanding principal amount and the contractual terms of the debt. Dividend income is recorded as dividends are declared or at the point an obligation exists for the portfolio company to make a distribution, and is generally recognized when received. Distributions from portfolio companies are evaluated to determine if the distribution is a distribution of earnings or a return of capital. Distributions of earnings are included in dividend income while a return of capital is recorded as a reduction in the cost basis of the investment. Estimates are adjusted as necessary after the relevant tax forms are received from the portfolio company.

Certain of the Company’s investments contain a payment-in-kind (“PIK”) income provision. The PIK income, computed at the contractual rate specified in the applicable investment agreement, is added to the principal balance of the investment, rather than being paid in cash, and recorded as interest or dividend income, as applicable, on the consolidated statements of operations. Generally, PIK can be paid-in-kind or all in cash. The Company stops accruing PIK income when there is reasonable doubt that PIK income will be collected. PIK income is included in the Company’s taxable income and, therefore, affects the amount the Company is required to pay to shareholders in the form of dividends in order to maintain the Company’s tax treatment as a RIC and to avoid corporate federal income tax, even though the Company has not yet collected the cash.

When there is reasonable doubt that principal, interest or dividends will be collected, loans or preferred equity investments are placed on non-accrual status and the Company will generally cease recognizing interest or dividend income. Interest and dividend payments received on non-accrual investments may be recognized as interest or dividend income or may be applied to the investment principal balance based on management’s judgment. Non-accrual investments are restored to accrual status when past due principal, interest or dividends are paid and, in management’s judgment, payments are likely to remain current.

Fee income: Transaction fees earned in connection with the Company’s investments are recognized as fee income and are generally non-recurring. Such fees typically include fees for services, including structuring and advisory services, provided to portfolio companies. The Company 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 earned.

The Company also typically receives loan origination or closing fees in connection with investments. Such loan origination and closing fees are capitalized as unearned income and offset against investment cost basis on the consolidated statements of assets and liabilities and accreted into interest income over the life of the investment.

Warrants: In connection with the Company’s debt investments, the Company will sometimes receive warrants or other equity-related securities from the borrower (“Warrants”). The Company 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 using the effective interest method over the term of the debt investment.

Partial loan sales: The Company follows the guidance in ASC 860, Transfers and Servicing, when accounting for loan participations and other partial loan sales. Such guidance requires a participation or other partial loan sale to meet the definition of a “participating interest,” as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales which do not meet the definition of a participating interest should remain on the Company’s consolidated statement of assets and liabilities and the proceeds recorded as a secured borrowing until the definition is met. Management has determined that all participations and other partial loan sale transactions entered into by the Company have met the definition of a participating interest. Accordingly, the Company uses sale treatment in accounting for such transactions.

Income taxes: The Company has elected to be treated as a RIC under Subchapter M of the Code, which will generally relieve the Company from U.S. federal income taxes with respect to all income distributed to stockholders. To maintain the tax treatment of a RIC, the Company is required to timely distribute to its stockholders at least 90.0% of “investment company taxable income,” as defined by Subchapter M of the Code, each year. Depending on the level of taxable income earned in a tax year, the Company may choose to carry forward taxable income in excess of current year distributions into the next tax year; however, the Company will pay a 4.0% excise tax if it does not distribute at least 98.0% of the current year’s ordinary taxable income. Any such carryover taxable income must be distributed through a dividend declared prior to the later of the date on which the final tax return related to the year in which the Company generated such taxable income is filed or the 15^th day of the 10^th month following the close of such taxable year. In addition, the Company will be subject to federal excise tax if it does not distribute at least 98.2% of its net capital gains realized, computed for any one year period ending October 31.

In the future, the Funds may be limited by provisions of the SBIC Act and SBA regulations governing SBICs from making certain distributions to FIC that may be necessary to enable FIC to make the minimum distributions required to maintain the tax treatment of a RIC.

21

FIDUS INVESTMENT CORPORATION

Notes to Consolidated Financial Statements (unaudited)

(in thousands, except shares and per share data)

The Company has certain wholly-owned taxable subsidiaries (the “Taxable Subsidiaries”), each of which generally holds one or more of the Company’s portfolio investments listed on the consolidated schedules of investments. The Taxable Subsidiaries are consolidated for financial reporting purposes, such that the Company’s consolidated financial statements reflect the Company’s investment in the portfolio company investments owned by the Taxable Subsidiaries. The purpose of the Taxable Subsidiaries is to permit the Company to hold equity investments in portfolio companies that are taxed as partnerships for U.S. federal income tax purposes (such as entities organized as limited liability companies (“LLCs”) or other forms of pass through entities) while complying with the “source-of-income” requirements contained in the RIC tax provisions. The Taxable Subsidiaries are not consolidated with the Company for U.S. federal corporate income tax purposes, and each Taxable Subsidiary will be subject to U.S. federal corporate income tax on its taxable income. Any such income or expense is reflected in the consolidated statements of operations.

U.S. federal income tax regulations differ from GAAP, and as a result, distributions in accordance with tax regulations may differ from net investment income and realized gains recognized under GAAP. Differences may be permanent or temporary. Permanent differences may arise as a result of, among other items, a difference in the book and tax basis of certain assets and nondeductible federal income taxes. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.

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 Company’s tax returns to determine whether the tax positions are “more-likely-than-not” to be respected by the applicable tax authorities. Tax benefits of positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense in the current year. It is the Company’s policy to recognize accrued interest and penalties related to uncertain tax benefits included in the income tax provision, if any. There were no material uncertain income tax positions at June 30, 2018 and December 31, 2017. The Company’s tax returns are generally subject to examination by U.S. federal and most state tax authorities for a period of three years from the date the respective returns are filed, and, accordingly, the Company’s 2014 through 2016 tax years remain subject to examination.

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

The determination of the tax attributes for the Company’s distributions is made annually, and is based upon the Company’s taxable income and distributions paid to its stockholders for the full year. Ordinary dividend distributions from a RIC do not qualify for the preferential tax rate on qualified dividend income from domestic corporations and qualified foreign corporations, except to the extent that the RIC received the income in the form of qualifying dividends from domestic corporations and qualified foreign corporations. The tax characterization of the Company’s distributions generally includes both ordinary income and capital gains but may also include qualified dividends or return of capital.

The Company has adopted a dividend reinvestment plan (“DRIP”) that provides for the reinvestment of dividends on behalf of its stockholders, unless a stockholder has elected to receive dividends in cash. As a result, if the Company declares a cash dividend, the Company’s stockholders who have not “opted out” of the DRIP at least two days prior to the dividend payment date will have their cash dividend automatically reinvested into additional shares of the Company’s common stock. The Company has the option to satisfy the share requirements of the DRIP through the issuance of new shares of common stock or through open market purchases of common stock by the DRIP plan administrator. Newly issued shares are valued based upon the final closing price of the Company’s common stock on a date determined by the Board. Shares purchased in the open market to satisfy the DRIP requirements will be valued based upon the average price of the applicable shares purchased by the DRIP plan administrator before any associated brokerage or other costs. See Note 9 to the consolidated financial statements regarding dividend declarations and distributions.

Earnings and net asset value per share: The earnings per share calculations for the three and six months ended June 30, 2018 and 2017, are computed utilizing the weighted average shares outstanding for the period. Net asset value per share is calculated using the number of shares outstanding as of the end of the period.

Stock Repurchase Program: The Company has an open market stock repurchase program (the “Stock Repurchase Program”) under which the Company may acquire up to $5,000 of its outstanding common stock. Under the Stock Repurchase Program, the Company may, but is not obligated to, repurchase outstanding common stock in the open market from time to time provided that the Company complies with the prohibitions under its insider trading policies and the requirements of Rule 10b-18 of the Securities Exchange Act of 1934, as amended, including certain price, market value and timing constraints. The timing, manner, price and amount of any share repurchases will be determined by the Company’s management, in its discretion, based upon the evaluation of economic and market conditions, stock price, capital availability, applicable legal and regulatory requirements and other corporate

22

FIDUS INVESTMENT CORPORATION

Notes to Consolidated Financial Statements (unaudited)

(in thousands, except shares and per share data)

considerations. On October 30, 2017, the Board extended the Program through December 31, 2018, or until the approved dollar amount has been used to repurchase shares. The Stock Repurchase Program does not require the Company to repurchase any specific number of shares and the Company cannot assure that any shares will be repurchased under the Stock Repurchase Program. The Stock Repurchase Program may be suspended, extended, modified or discontinued at any time. During the six months ended June 30, 2018, the Company repurchased 44,821 shares of common stock on the open market for $582. The Company did not make any repurchases of common stock during the six months ended June 30, 2017. Refer to Note 8 for additional information concerning stock repurchases.

Recent accounting pronouncements: In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Revenue Recognition (Topic 605). Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance is effective for annual and interim reporting periods beginning after December 15, 2017. The Company adopted the ASU effective January 1, 2018. The majority of the Company’s income streams are specifically excluded from the scope of the ASU as they relate to financial instruments that are within the scope of other topics, and in general the impact of adopting the ASU is not material to the Company’s consolidated financial position or disclosures.

Note 3. Portfolio Company Investments

The Company’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 Company also may receive nominally priced equity warrants and/or make a direct equity investment in the portfolio company. The Company’s warrants or equity investments may be investments in a holding company related to the portfolio company. In addition, the Company periodically makes equity investments in its portfolio companies through Taxable Subsidiaries. In both situations, the investment is generally reported under the name of the operating company on the consolidated schedules of investments.

As of June 30, 2018, the Company had active investments in 65 portfolio companies and residual investments in two portfolio companies that have sold their underlying operations. The aggregate fair value of the total portfolio was $646,182 and the weighted average effective yield on the Company’s debt investments was 12.7% as of such date. As of June 30, 2018, the Company held equity investments in 89.6% of its portfolio companies and the average fully diluted equity ownership in those portfolio companies was 6.4%.

As of December 31, 2017, the Company had active investments in 60 portfolio companies and residual investments in three portfolio companies that have sold their underlying operations. The aggregate fair value of the total portfolio was $596,308 and the weighted average effective yield on the Company’s debt investments was 13.0% as of such date. As of December 31, 2017, the Company held equity investments in 87.3% of its portfolio companies and the average fully diluted equity ownership in those portfolio companies was 7.7%.

The weighted average yield of the Company’s debt investments is not the same as a return on investment for its stockholders but, rather, relates to a portion of the Company’s investment portfolio and is calculated before the payment of all of the Company’s and its subsidiaries’ fees and expenses. The weighted average yields were computed using the effective interest rates for debt investments at cost as of June 30, 2018 and December 31, 2017, including accretion of OID and loan origination fees, but excluding investments on non-accrual status, if any.

Purchases of debt and equity investments for the six months ended June 30, 2018 and 2017 totaled $103,989 and $87,087, respectively. Proceeds from sales and repayments, including principal, return of capital distributions and realized gains, of portfolio investments for the six months ended June 30, 2018 and 2017 totaled $65,270 and $66,733, respectively.

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

23

FIDUS INVESTMENT CORPORATION

Notes to Consolidated Financial Statements (unaudited)

(in thousands, except shares and per share data)

	Fair Value								Cost
	June 30, 2018				December 31, 2017				June 30, 2018				December 31, 2017
Second Lien Debt	$	397,985	61.5	%	$	341,279	57.3	%	$	417,494	68.2	%	$	357,585	62.0	%
Subordinated Debt		101,847	15.8			126,481	21.2			101,317	16.6			126,465	21.9
First Lien Debt		26,930	4.2			28,911	4.8			27,097	4.4			31,921	5.5
Equity		105,016	16.3			84,585	14.2			57,851	9.5			53,915	9.3
Warrants		14,404	2.2			15,052	2.5			7,724	1.3			7,723	1.3
Royalty Rights		—	—			—	—			185	—			185	—
Total	$	646,182	100.0	%	$	596,308	100.0	%	$	611,668	100.0	%	$	577,794	100.0	%

All investments made by the Company as of June 30, 2018 and December 31, 2017 were made in portfolio companies headquartered in the U.S. The following table shows portfolio composition by geographic region at fair value and cost 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.

	Fair Value								Cost
	June 30, 2018				December 31, 2017				June 30, 2018				December 31, 2017
Midwest	$	170,933	26.4	%	$	167,967	28.2	%	$	168,671	27.6	%	$	161,809	28.1	%
Southeast		164,757	25.5			130,237	21.8			150,493	24.6			130,694	22.6
Northeast		89,910	13.9			107,814	18.1			82,089	13.4			105,267	18.2
West		62,526	9.7			63,396	10.6			53,944	8.8			53,970	9.3
Southwest		158,056	24.5			126,894	21.3			156,471	25.6			126,054	21.8
Total	$	646,182	100.0	%	$	596,308	100.0	%	$	611,668	100.0	%	$	577,794	100.0	%

The following table shows portfolio composition by type and by geographic region at fair value as a percentage of net assets.

	By Type							By Geographic Region
	June 30,     2018			December 31, 2017				June 30,     2018			December 31, 2017
Second Lien Debt		100.5	%		86.7	%	Midwest		43.1	%		42.7	%
Subordinated Debt		25.7			32.2		Southeast		41.6			33.1
First Lien Debt		6.8			7.4		Northeast		22.7			27.4
Equity		26.5			21.5		West		15.8			16.1
Warrants		3.6			3.8		Southwest		39.9			32.3
Royalty Rights		—			—
Total		163.1	%		151.6	%	Total		163.1	%		151.6	%

As of June 30, 2018 and December 31, 2017, the Company had no portfolio company investments that represented more than 10% of the total investment portfolio on a fair value or cost basis.

As of June 30, 2018 and December 31, 2017, the Company had debt investments in three and two portfolio companies on non-accrual status, respectively:

24

FIDUS INVESTMENT CORPORATION

Notes to Consolidated Financial Statements (unaudited)

(in thousands, except shares and per share data)

	June 30, 2018						December 31, 2017
Portfolio Company	Fair Value			Cost			Fair Value			Cost
Cavallo Bus Lines Holdings, LLC	$	2,000		$	7,375		$	—	(2)	$	—	(2)
Inflexxion, Inc.		—			150			—	(2)		—	(2)
Restaurant Finance Co, LLC		1,989			9,314			2,046			9,314
Six Month Smiles Holdings, Inc.		—	(1)		—	(1)		5,041			9,377
Total	$	3,989		$	16,839		$	7,087		$	18,691

(1) Portfolio company was no longer held at period end.

(2) Portfolio company debt investments were not on non-accrual status at period end.

Consolidated Schedule of Investments In and Advances To Affiliates

The table below represents the fair value of control and affiliate investments as of December 31, 2017 and any additions and reductions made to such investments during the six months ended June 30, 2018, the ending fair value as of June 30, 2018, and the total investment income earned on such investments during the period.

												Six Months Ended June 30, 2018
Portfolio Company (1)(2)	June 30, 2018 Principal Amount - Debt Investments		December 31, 2017 Fair Value		Gross Additions (3)		Gross Reductions (4)			June 30, 2018 Fair Value		Net Realized Gains (Losses) (5)			Net Change in Unrealized Appreciation (Depreciation)			Interest Income		Payment-in- kind Interest Income		Dividend Income		Fee Income
Control Investments
FDS Avionics Corp. (dba Flight Display Systems)	$	6,072	$	4,723	$	517	$	(199	)	$	5,041	$	—		$	(199	)	$	118	$	315	$	—	$	—
Total Control Investments	$	6,072	$	4,723	$	517	$	(199	)	$	5,041	$	—		$	(199	)	$	118	$	315	$	—	$	—
Affiliate Investments
Apex Microtechnology, Inc.	$	—	$	3,400	$	704	$	—		$	4,104	$	—		$	702		$	—	$	—	$	322	$	—
FAR Research Inc.		—		1,447		662		—			2,109		—			662			—		—		—		—
Fiber Materials, Inc.		4,044		5,882		441		—			6,323		—			439			246		—		—		—
Inflexxion, Inc.		150		2,810		4,013		(6,823	)		—		(6,369	)		3,943			116