Sec Form 4 Filing - Alala Joseph B III @ Capitala Finance Corp. - 2017-09-21

FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person Alala Joseph B III 2. Issuer Name and Ticker or Trading Symbol Capitala Finance Corp. [ CPTA] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) X __ Director _____ 10% Owner X __ Officer (give title below) _____ Other (specify below) See Remarks (Last) (First) (Middle) C/O CAPITALA FINANCE CORP., 4201 CONGRESS STREET, SUITE 360 3. Date of Earliest Transaction (MM/DD/YY) 09/21/2017 (Street) CHARLOTTE, NC28209 4. If Amendment, Date Original Filed (MM/DD/YY) 6. Individual or Joint/Group Filing (Check Applicable Line) __ X __ Form filed by One Reporting Person _____ Form filed by More than One Reporting Person (City) (State) (Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned 1.Title of Security (Instr. 3) 2. Transaction Date (MM/DD/YY) 2A. Deemed Execution Date, if any (MM/DD/YY) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 09/21/2017 P 100 A $ 9.118 100 I via Child Common Stock 09/21/2017 P 100 A $ 9.106 100 I via Child Common Stock 09/24/2017 D 21,145.278 ( 1 ) ( 2 ) ( 5 ) A 21,245.278 ( 6 ) I via Capitala Investment Advisors, LLC Common Stock 09/24/2017 D 2,854.722 ( 1 ) ( 2 ) ( 5 ) A 5,559.722 ( 6 ) I via Capitala Transaction Corp. Common Stock 09/24/2017 D 24,000 ( 1 ) ( 2 ) ( 5 ) D 418,294.08 ( 6 ) I via Capitala Restricted Shares I, LLC Common Stock 09/25/2017 M 180,554.655 ( 3 ) ( 5 ) D 237,739.425 ( 6 ) I via Capitala Restricted Shares I, LLC Common Stock 09/25/2017 M 60,153.255 ( 4 ) ( 5 ) A 365,433.425 ( 6 ) I via Capitala Private Investments, LLC Common Stock 9,611 D Common Stock 972 ( 6 ) I via CapitalSouth Corporation

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities) 1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (MM/DD/YY) 3A. Deemed Execution Date, if any (MM/DD/YY) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5) 6. Date Exercisable and Expiration Date (MM/DD/YY) 7. Title and Amount of Underlying Securities (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4) Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares Awards ( 1 ) ( 2 ) ( 5 ) 09/24/2017 D 24,000 ( 1 )( 2 )( 5 ) ( 1 )( 2 )( 5 ) Common Stock, par value $0.01 per share 24,000 ( 1 ) ( 2 ) ( 5 ) $ 0 ( 1 ) ( 2 ) ( 5 ) 418,294.08 ( 6 ) I Capitala Restricted Shares I, LLC Awards ( 3 ) ( 5 ) 09/25/2017 M 180,554.655 ( 3 )( 5 ) ( 3 )( 5 ) Common Stock, par value $0.01 per share 180,554.655 ( 3 ) ( 5 ) $ 0 ( 3 ) ( 5 ) 237,739.425 ( 6 ) I Capitala Restricted Shares I, LLC Awards ( 4 ) ( 5 ) 09/25/2017 M 60,153.255 ( 4 )( 5 ) ( 4 )( 5 ) Common Stock, par value $0.01 per share 60,153.255 ( 4 ) ( 5 ) $ 0 ( 4 ) ( 5 ) 80,204.425 ( 6 ) I Capitala Private Investments, LLC

Reporting Owners Reporting Owner Name / Address Relationships Director 10% Owner Officer Other Alala Joseph B III C/O CAPITALA FINANCE CORP. 4201 CONGRESS STREET, SUITE 360 CHARLOTTE, NC28209 X See Remarks Signatures /s/ Richard G. Wheelahan, III, attorney-in-fact 09/25/2017 Signature of Reporting Person Date

Explanation of Responses:

( 1 )Mr. Richard. G. Wheelahan, III previously held Awards with respect to 26,250 shares of Capitala Finance Corp.'s (the "Issuer") common stock held by Capitala Restricted Shares I, LLC ("CRS"), which is controlled by Joseph B. Alala, III and is an affiliate of Capitala Investment Advisors, LLC, pursuant to CRS's 2015 Amended and Restated Equity Compensation Plan, dated September 18, 2015 (the "Plan"). On September 24, 2017, Mr. Wheelahan voluntarily forfeited Awards relating to 24,000 shares of the Issuer's common stock to entities controlled by Mr. Alala, and as a result CRS distributed 24,000 shares of the Issuer's common stock to Capitala Investment Advisors, LLC and Capitala Transaction Corp., entities controlled by Mr. Alala. ( 2 )(continued from Footnote 1) The Plan and such forfeiture and transfer were previously approved by the Issuer's Board of Directors. The shares of the Issuer's common stock that may be deemed to have been disposed of were previously reported as beneficially owned by Mr. Alala due to his controlling interest in CRS. ( 3 )In addition to the Awards forfeited by Mr. Wheelahan, CRS previously granted Awards with respect to the 418,294.08 shares of the Issuer's common stock held by CRS to certain of Capitala Investment Advisors, LLC's employees pursuant to the Plan. The Plan was previously approved by the Issuer's Boar d of Directors. On September 25, 2017, certain of the Awards vested pursuant to the vesting schedule under the Plan and, as a result, CRS distributed an aggregate of 180,554.655 shares of the Issuer's common stock to certain of Capitala Investment Advisors, LLC's employees and related vehicles. The shares of the Issuer's common stock that may be deemed to have been disposed of were previously reported as beneficially owned by Mr. Alala due to his controlling interest in CRS. The remaining Awards under the Plan are scheduled to vest on September 25, 2018. Upon settlement, the remaining Awards will become payable on a one-for-one basis in shares of the Issuer's common stock. ( 4 )Capitala Private Investments, LLC ("CPI") previously held Awards with respect to 140,357.68 shares of the Issuer's common stock held by CRS. On September 25, 2017, CPI received 60,153.255 shares of the Issuer's common stock in accordance with the vesting schedule under the Plan. The shares of the Issuer's common stock that may be deemed to have been acquired by CPI were previously reported as beneficially owned by Mr. Alala due to his controlling interest in CRS. The acquisition was approved in advance by the Board of Directors of the Issuer. ( 5 )Pursuant to the SEC staff no-action letters to Babson Capital Management LLC (pub. Avail. Dec. 14, 2006) and Carlyle GMS Finance, Inc. (pub. Avail. Oct. 8, 2015), an employee benefit plan sponsored by an investment adviser (or an affiliated person of an investment adviser) to a registered closed-end investment company or a business development company regulated under the Investment Company Act of 1940, as amended, that offers plan participants equity securities of such registered investment company or business development company is considered an "employee benefit plan sponsored by the issuer" for the purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended. ( 6 )Mr. Alala disclaims beneficial ownership of any of the Issuer's shares directly held by CPI, CRS, Capitala Transaction Corp., CapitalSouth Corporation and Capitala Investment Advisors, LLC, except to the extent of his pecuniary interest therein, and this report shall not be deemed an admission that Mr. Alala is the beneficial owner of such securities for purposes of Section 16 of the Securiteis Exchange Act of 1934, as amended, or any other purpose.

Remarks: Chairman of the Board of Directors, Chief Executive Officer and President

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.

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