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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2022

OR

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

For the transition period from:             to             

Commission File Number: 814-00939

MSC Income Fund, Inc.

(Exact name of registrant as specified in its charter)

Maryland			45-3999996
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
1300 Post Oak Boulevard, 8th Floor Houston, TX			77056
(Address of principal executive offices)			(Zip Code)

(713) 350-6000

(Registrant’s telephone number including area code)

n/a

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

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

None

N/A

N/A

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes o No o

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.

Large accelerated filer

o

Accelerated filer

o

Non-accelerated filer

x

Smaller reporting company

o

Emerging growth company

o

If an emerging growth company, indicate by check mark if the registrant has elected not 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. o

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

The number of shares outstanding of the issuer’s common stock as of November 14, 2022 was 80,106,000.

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TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION
Item 1.			Consolidated Financial Statements
			Consolidated Balance Sheets—September 30, 2022 (unaudited) and December 31, 2021			1
			Consolidated Statements of Operations (unaudited)—Three and nine months ended September 30, 2022 and 2021			2
			Consolidated Statements of Changes in Net Assets (unaudited)—Nine months ended September 30, 2022 and 2021			3
			Consolidated Statements of Cash Flows (unaudited)—Nine months ended September 30, 2022 and 2021			4
			Consolidated Schedule of Investments (unaudited)—September 30, 2022			5
			Consolidated Schedule of Investments—December 31, 2021			28
			Notes to Consolidated Financial Statements (unaudited)			45
			Consolidated Schedules of Investments in and Advances to Affiliates (unaudited)— Nine months ended September 30, 2022 and 2021			82
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			90
Item 3.			Quantitative and Qualitative Disclosures about Market Risk			105
Item 4.			Controls and Procedures			106
PART II
OTHER INFORMATION
Item 1.			Legal Proceedings			108
Item 1A.			Risk Factors			108
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			108
Item 6.			Exhibits			109
			Signatures			110

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MSC INCOME FUND, INC

Consolidated Balance Sheets

(in thousands, except shares and per share amounts)

			September 30, 2022						December 31, 2021
ASSETS			(Unaudited)
Investments at fair value:
Control investments (cost: $30,906 and $28,903 as of September 30, 2022 and December 31, 2021, respectively)			$	50,546					$	46,583
Affiliate investments (cost: $228,834 and $209,971 as of September 30, 2022 and December 31, 2021, respectively)			257,418						234,158
Non‑Control/Non‑Affiliate investments (cost: $837,919 and $828,301 as of September 30, 2022 and December 31, 2021, respectively)			788,204						796,395
Total investments (cost: $1,097,659 and $1,067,175 as of September 30, 2022 and December 31, 2021, respectively)			1,096,168						1,077,136
Cash and cash equivalents			18,158						25,813
Interest and dividend receivable			12,196						12,991
Receivable for securities sold			6,745						21,729
Deferred financing costs (net of accumulated amortization of $2,105 and $1,290 as of September 30, 2022 and December 31, 2021, respectively)			3,216						4,049
Prepaids and other assets			1,888						2,059
Total assets			$	1,138,371					$	1,143,777
LIABILITIES
Credit facilities			$	352,688					$	426,688
Series A Notes due 2026 (par: $150,000 and $77,500 as of September 30, 2022 and December 31, 2021, respectively)			148,782						76,184
Accounts payable and other liabilities			2,136						3,159
Payable for securities purchased			—						4,170
Interest payable			6,606						3,093
Dividend payable			12,809						11,974
Management and incentive fees payable			5,281						5,339
Deferred tax liability, net			321						—
Total liabilities			528,623						530,607
Commitments and contingencies (Note J)
NET ASSETS
Common stock, $0.001 par value per share (450,000,000 shares authorized; 80,059,079 and 79,826,605 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively)			80						80
Additional paid‑in capital			684,494						682,426
Total overdistributed earnings			(74,826)						(69,336)
Total net assets			609,748						613,170
Total liabilities and net assets			$	1,138,371					$	1,143,777
NET ASSET VALUE PER SHARE			$	7.62					$	7.68

The accompanying notes are an integral part of these consolidated financial statements

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MSC INCOME FUND, INC.

Consolidated Statements of Operations

(in thousands, except shares and per share amounts)

(Unaudited)

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
INVESTMENT INCOME:
Interest, fee and dividend income:
Control investments			$	555					$	845					$	2,595					$	2,188
Affiliate investments			6,385						5,365						17,443						13,461
Non‑Control/Non‑Affiliate investments			19,111						16,544						53,753						49,873
Total investment income			26,051						22,754						73,791						65,522
EXPENSES:
Interest			(6,801)						(3,759)						(16,628)						(10,223)
Base management fees			(4,974)						(4,473)						(14,919)						(12,534)
Internal administrative services expenses			(1,405)						(1,152)						(3,888)						(3,247)
General and administrative			(941)						(1,400)						(3,017)						(3,457)
Total expenses before expense waivers			(14,121)						(10,784)						(38,452)						(29,461)
Waiver of internal administrative services expenses			1,252						1,152						3,431						3,247
Total expenses, net of expense waivers			(12,869)						(9,632)						(35,021)						(26,214)
NET INVESTMENT INCOME			13,182						13,122						38,770						39,308
NET REALIZED GAIN (LOSS):
Affiliate investments			(1,456)						(203)						(676)						(2,673)
Non‑Control/Non‑Affiliate investments			8,694						(3,473)						8,541						(1,176)
Realized loss on extinguishment of debt			—						—						—						(2,091)
Total net realized gain (loss)			7,238						(3,676)						7,865						(5,940)
NET UNREALIZED APPRECIATION (DEPRECIATION):
Control investments			574						572						1,959						569
Affiliate investments			3,909						3,987						4,401						10,017
Non‑Control/Non‑Affiliate investments			(8,918)						2,784						(17,812)						9,777
Total net unrealized appreciation (depreciation)			(4,435)						7,343						(11,452)						20,363
INCOME TAXES:
Federal and state income, excise and other taxes			(578)						(453)						(1,559)						(1,283)
Deferred taxes			(144)						—						(321)						—
Income tax provision			(722)						(453)						(1,880)						(1,283)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS			$	15,263					$	16,336					$	33,303					$	52,448
NET INVESTMENT INCOME PER SHARE—BASIC AND DILUTED			$	0.16					$	0.16					$	0.48					$	0.49
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE—BASIC AND DILUTED			$	0.19					$	0.20					$	0.42					$	0.66
WEIGHTED-AVERAGE SHARES OUTSTANDING—BASIC AND DILUTED			80,048,855						79,908,827						79,960,302						79,831,292

The accompanying notes are an integral part of these consolidated financial statements

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MSC INCOME FUND, INC.

Consolidated Statements of Changes in Net Assets

(in thousands, except shares)

(Unaudited)

			Common Stock												Additional Paid-In Capital						Total Overdistributed Earnings						Total Net Asset Value
			Number of Shares						Par Value
Balances at December 31, 2020			79,608,304						$	80					$	682,028					$	(102,484)					$	579,624
Net increase resulting from operations			—						—						—						12,657						12,657
Dividends to stockholders			—						—						—						(7,961)						(7,961)
Balances at March 31, 2021			79,608,304						$	80					$	682,028					$	(97,788)					$	584,320
Offering of common stock			67,114						—						500						—						500
Dividend reinvestment			424,455						—						3,162						—						3,162
Common stock repurchased			(383,512)						—						(2,861)						—						(2,861)
Net increase resulting from operations			—						—						—						23,455						23,455
Dividends to stockholders			—						—						—						(9,964)						(9,964)
Balances at June 30, 2021			79,716,361						$	80					$	682,829					$	(84,297)					$	598,612
Dividend reinvestment			478,309						1						3,682						—						3,683
Common stock repurchased			(438,292)						(1)						(3,317)						—						(3,318)
Net increase resulting from operations			—						—						—						16,336						$	16,336
Dividends to stockholders			—						—						—						(11,964)						$	(11,964)
Balances at September 30, 2021			79,756,378						$	80					$	683,194					$	(79,925)					$	603,349
Balances at December 31, 2021			79,826,605						$	80					$	682,426					$	(69,336)					$	613,170
Dividend reinvestment			533,062						—						4,212						—						4,212
Common stock repurchased			(489,031)						—						(3,790)						—						(3,790)
Net increase resulting from operations			—						—						—						16,213						16,213
Dividends to stockholders			—						—						—						(13,178)						(13,178)
Balances at March 31, 2022			79,870,636						$	80					$	682,848					$	(66,301)					$	616,627
Offering of common stock			94,697						—						750						—						750
Dividend reinvestment			582,453						1						4,612						—						4,613
Common stock repurchased			(536,065)						(1)						(4,151)						—						(4,152)
Net increase resulting from operations			—						—						—						1,823						1,823
Dividends to stockholders			—						—						—						(12,802)						(12,802)
Balances at June 30, 2022			80,011,721						$	80					$	684,059					$	(77,280)					$	606,859
Dividend reinvestment			574,866						1						4,478						—						4,479
Common stock repurchased			(527,508)						(1)						(4,043)						—						(4,044)
Net increase resulting from operations			—						—						—						15,263						15,263
Dividends to stockholders			—						—						—						(12,809)						(12,809)
Balances at September 30, 2022			80,059,079						$	80					$	684,494					$	(74,826)					$	609,748

The accompanying notes are an integral part of these consolidated financial statements

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MSC INCOME FUND, INC.

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

			Nine Months Ended September 30,
			2022						2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in net assets resulting from operations			$	33,303					$	52,448
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:
Investments in portfolio companies			(171,762)						(333,778)
Proceeds from sales and repayments of debt investments in portfolio companies			123,357						181,804
Proceeds from sales and return of capital of equity investments in portfolio companies			42,875						—
Net unrealized (appreciation) depreciation			11,452						(20,363)
Net realized (gain) loss on the sale of portfolio investments			(7,865)						3,986
Realized loss on extinguishment of debt			—						2,091
Amortization of deferred financing costs			1,080						886
Amortization of deferred offering costs			210						110
Accretion of unearned income			(3,576)						(3,425)
Payment-in-kind interest			(2,091)						(4,357)
Cumulative dividends			(608)						(19)
Deferred tax provision			321						—
Changes in other assets and liabilities:
Interest and dividend receivable			795						(2,425)
Prepaid and other assets			171						977
Management and incentive fees payable			(58)						272
Interest payable			3,513						3,155
Accounts payable and other liabilities			(1,024)						619
Net cash provided by (used in) operating activities			30,093						(118,019)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock			750						500
Redemption of common stock			(11,986)						(6,179)
Payment of offering costs			(210)						(110)
Dividends paid			(24,653)						(11,081)
Repayments on credit facilities			(161,000)						(340,816)
Proceeds from credit facilities			87,000						392,688
Proceeds from Series A Notes due 2026			72,500						60,000
Payment of deferred financing costs			(149)						(4,607)
Net cash provided by (used in) financing activities			(37,748)						90,395
Net decrease in cash, cash equivalents and restricted cash			(7,655)						(27,624)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD			25,813						49,066
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD			$	18,158					$	21,442
Supplemental cash flow disclosures:
Interest paid			$	9,578					$	6,183
Taxes paid			$	1,992					$	1,328
Non-cash financing activities:
Dividends declared and unpaid			$	12,809					$	11,964
Value of shares issued pursuant to the DRIP			$	13,304					$	6,845

The accompanying notes are an integral part of these consolidated financial statements

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
Control Investments (5)
Copper Trail Fund Investments			(12) (13)			Investment Partnership
									LP Interests (CTMH, LP)			(24)			7/17/2017			39.0%																					$	835		$	710
GRT Rubber Technologies LLC						Manufacturer of Engineered Rubber Products
									Secured Debt						12/19/2014						10.56%			L+			8.00%						10/29/2026			19,944			19,741			19,944
									Member Units			(8)			12/19/2014			2,896																					6,435			22,750
																																							26,176			42,694
Harris Preston Fund Investments			(12) (13)			Investment Partnership
									LP Interests (2717 MH, L.P.)			(24)			10/1/2017			49.3%																					3,895			7,142
Subtotal Control Investments (8.3% of net assets at fair value)																																							$	30,906		$	50,546
Affiliate Investments (6)
AFG Capital Group, LLC						Provider of Rent-to-Own Financing Solutions and Services
									Preferred Member Units			(8)			11/7/2014			46																					300			2,190
Analytical Systems Keco Holdings, LLC						Manufacturer of Liquid and Gas Analyzers
									Secured Debt			(9) (33)			8/16/2019									L+			10.00%						8/16/2024			0			(3)			(3)
									Secured Debt			(9)			8/16/2019						12.63%			L+			10.00%						8/16/2024			1,184			1,147			1,147
									Preferred Member Units						8/16/2019			800			12.63%																		800			0
									Preferred Member Units						5/20/2021			607																					607			960
									Warrants			(27)			8/16/2019			105															8/16/2029			79			79			0
																																							2,630			2,104
ATX Networks Corp.			(11)			Provider of Radio Frequency Management Equipment
									Secured Debt			(9)			9/1/2021						11.14%			L+			7.50%						9/1/2026			6,907			6,362			6,735
									Unsecured Debt			(19)			9/1/2021						10.00%									10.00%			9/1/2028			3,330			2,251			2,481
									Common Stock						9/1/2021			585																					0			0
																																							8,613			9,216

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
Barfly Ventures, LLC			(10)			Casual Restaurant Group
									Member Units						10/26/2020			12																					528			1,107
Batjer TopCo, LLC						HVAC Mechanical Contractor
									Secured Debt			(33)			3/7/2022																		3/31/2027			0			(1)			(1)
									Secured Debt						3/7/2022						11.00%												3/31/2027			1,225			1,203			1,203
									Preferred Stock						3/7/2022			453																					455			455
																																							1,657			1,657
Brewer Crane Holdings, LLC						Provider of Crane Rental and Operating Services
									Secured Debt			(9)			1/9/2018						12.56%			L+			10.00%						1/9/2023			1,522			1,520			1,520
									Preferred Member Units			(8)			1/9/2018			737																					1,070			1,420
																																							2,590			2,940
Centre Technologies Holdings, LLC						Provider of IT Hardware Services and Software Solutions
									Secured Debt			(9) (33)			1/4/2019									L+			9.00%						1/4/2026			0			0			0
									Secured Debt			(9)			1/4/2019						11.63%			L+			9.00%						1/4/2026			3,758			3,729			3,729
									Preferred Member Units						1/4/2019			3,327																					1,531			2,040
																																							5,260			5,769
Chamberlin Holding LLC						Roofing and Waterproofing Specialty Contractor
									Secured Debt			(9) (33)			2/26/2018									L+			6.00%						2/26/2023			0			0			0
									Secured Debt			(9)			2/26/2018						10.63%			L+			8.00%						2/26/2023			4,366			4,351			4,366
									Member Units			(8)			2/26/2018			1,087																					2,860			5,580
									Member Units			(8) (23)			11/2/2018			261,786																					443			471
																																							7,654			10,417
Charps, LLC						Pipeline Maintenance and Construction
									Preferred Member Units			(8)			2/3/2017			457																					491			3,300
Clad-Rex Steel, LLC						Specialty Manufacturer of Vinyl-Clad Metal
									Secured Debt			(9)			12/20/2016						12.13%			L+			9.50%						1/15/2024			2,620			2,620			2,620
									Secured Debt						12/20/2016						10.00%												12/20/2036			264			262			262
									Member Units			(8)			12/20/2016			179																					1,820			2,370
									Member Units			(23)			12/20/2016			200																					53			152
																																							4,755			5,404
Cody Pools, Inc.						Designer of Residential and Commercial Pools

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
									Secured Debt			(9) (33)			3/6/2020									L+			10.50%						12/17/2026			0			(10)			0
									Secured Debt			(9)			3/6/2020						13.63%			L+			10.50%						12/17/2026			6,958			6,855			6,958
									Preferred Member Units			(8) (23)			3/6/2020			147																					2,079			14,300
																																							8,924			21,258
Colonial Electric Company LLC						Provider of Electrical Contracting Services
									Secured Debt			(33)			3/31/2021																		3/31/2026			0			0			0
									Secured Debt						3/31/2021						12.00%												3/31/2026			5,906			5,799			5,799
									Preferred Member Units			(8)			3/31/2021			4,320																					1,920			2,300
																																							7,719			8,099
Datacom, LLC						Technology and Telecommunications Provider
									Secured Debt						3/1/2022						7.50%												12/31/2025			25			25			25
									Secured Debt						3/31/2021						7.50%												12/31/2025			966			896			861
									Preferred Member Units			(8)			3/31/2021			1,000																					290			300
																																							1,211			1,186
Digital Products Holdings LLC						Designer and Distributor of Consumer Electronics
									Secured Debt			(9)			4/1/2018						12.63%			L+			10.00%						4/1/2023			3,966			3,955			3,955
									Preferred Member Units			(8)			4/1/2018			964																					2,375			2,459
																																							6,330			6,414
Direct Marketing Solutions, Inc.						Provider of Omni-Channel Direct Marketing Services
									Secured Debt			(9)			2/13/2018						13.63%			L+			11.00%						2/13/2024			600			595			600
									Secured Debt			(9)			2/13/2018						13.63%			L+			11.00%						2/13/2024			4,494			4,461			4,494
									Preferred Stock			(8)			2/13/2018			2,100																					2,100			5,560
																																							7,156			10,654
Flame King Holdings, LLC						Propane Tank and Accessories Distributor
									Secured Debt			(9)			10/29/2021						9.25%			L+			6.50%						10/31/2026			1,900			1,884			1,900
									Secured Debt			(9)			10/29/2021						13.75%			L+			11.00%						10/31/2026			5,300			5,169			5,300
									Preferred Equity			(8)			10/29/2021			2,340																					2,600			3,460
																																							9,653			10,660
Freeport Financial Funds			(12) (13)			Investment Partnership
									LP Interests (Freeport First Lien Loan Fund III LP)			(8) (24)			7/31/2015			6.0%																					6,630			6,175

7

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Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
Gamber-Johnson Holdings, LLC						Manufacturer of Ruggedized Computer Mounting Systems
									Secured Debt			(9) (33)			6/24/2016									L+			8.00%						1/1/2025			0			0			0
									Secured Debt			(9)			6/24/2016						10.63%			L+			8.00%						1/1/2025			6,020			5,995			6,020
									Member Units			(8)			6/24/2016			2,261																					4,423			11,620
																																							10,418			17,640
GFG Group, LLC.						Grower and Distributor of a Variety of Plants and Products to Other Wholesalers, Retailers and Garden Centers
									Secured Debt						3/31/2021						9.00%												3/31/2026			2,936			2,872			2,936
									Preferred Member Units			(8)			3/31/2021			56																					1,225			1,790
																																							4,097			4,726
Gulf Publishing Holdings, LLC						Energy Industry Focused Media and Publishing
									Secured Debt			(9) (33)			9/29/2017									L+			9.50%						7/1/2027			0			0			0
									Secured Debt						7/1/2022						12.50%												6/30/2027			600			600			571
									Member Units						4/29/2016			920																					920			0
									Member Units						7/1/2022			15,930																					1,400			980
																																							2,920			1,551
Harris Preston Fund Investments			(12) (13)			Investment Partnership
									LP Interests (HPEP 3, L.P.)			(8) (24)			8/9/2017			8.2%																					2,558			4,331
Kickhaefer Manufacturing Company, LLC						Precision Metal Parts Manufacturing
									Secured Debt						10/31/2018						11.50%												10/31/2023			5,104			5,066			5,066
									Secured Debt						10/31/2018						9.00%												10/31/2048			972			963			963
									Member Units						10/31/2018			145																					3,060			2,310
									Member Units			(8) (23)			10/31/2018			200																					248			615
																																							9,337			8,954
Market Force Information, LLC						Provider of Customer Experience Management Services
									Secured Debt			(14) (19)			7/28/2017						12.00%									12.00%			7/28/2023			6,520			6,463			718
									Member Units						7/28/2017			185,980																					4,160			0
																																							10,623			718
MH Corbin Holding LLC						Manufacturer and Distributor of Traffic Safety Products
									Secured Debt						8/31/2015						13.00%												12/31/2022			1,559			1,559			677
									Preferred Member Units						3/15/2019			16,500																					1,100			0
									Preferred Member Units						9/1/2015			1,000																					1,500			0

8

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Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
																																							4,159			677
Mystic Logistics Holdings, LLC						Logistics and Distribution Services Provider for Large Volume Mailers
									Secured Debt			(33)			8/18/2014																		1/31/2024			0			0			0
									Secured Debt						8/18/2014						10.00%												1/31/2024			1,436			1,436			1,436
									Common Stock			(8)			8/18/2014			1,468																					680			5,175
																																							2,116			6,611
NexRev LLC						Provider of Energy Efficiency Products & Services
									Secured Debt						2/28/2018						11.00%												2/28/2025			40			40			40
									Secured Debt						2/28/2018						11.00%												2/28/2025			3,066			3,020			2,263
									Preferred Member Units			(8)			2/28/2018			25,786,046																					2,053			280
																																							5,113			2,583
NuStep, LLC						Designer, Manufacturer and Distributor of Fitness Equipment
									Secured Debt			(9)			1/31/2017						9.13%			L+			6.50%						1/31/2025			1,100			1,097			1,097
									Secured Debt						1/31/2017						12.00%												1/31/2025			4,610			4,602			4,602
									Preferred Member Units						1/31/2017			102																					2,550			2,550
																																							8,249			8,249
Oneliance, LLC						Construction Cleaning Company
									Secured Debt			(9)			8/6/2021						13.56%			L+			11.00%						8/6/2026			1,400			1,378			1,378
									Preferred Stock						8/6/2021			264																					264			264
																																							1,642			1,642
Orttech Holdings, LLC						Distributor of Industrial Clutches, Brakes and Other Components
									Secured Debt			(9) (33)			7/30/2021									L+			11.00%						7/31/2026			0			(3)			(3)
									Secured Debt			(9)			7/30/2021						13.63%			L+			11.00%						7/31/2026			5,900			5,808			5,808
									Preferred Stock			(8) (23)			7/30/2021			2,500																					2,500			2,500
																																							8,305			8,305
Robbins Bros. Jewelry, Inc.						Bridal Jewelry Retailer
									Secured Debt			(9) (33)			12/15/2021									L+			11.00%						12/15/2026			0			(8)			(8)
									Secured Debt			(9)			12/15/2021						13.63%			L+			11.00%						12/15/2026			3,990			3,923			3,923
									Preferred Equity						12/15/2021			1,230																					1,230			1,690
																																							5,145			5,605
SI East, LLC						Rigid Industrial Packaging Manufacturing
									Secured Debt						8/31/2018						10.25%												8/31/2023			750			750			750

9

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Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
									Secured Debt						8/31/2018						10.25%												8/31/2023			31,079			30,887			31,079
									Preferred Member Units			(8)			8/31/2018			52																					406			4,980
																																							32,043			36,809
Sonic Systems International, LLC			(10)			Nuclear Power Staffing Services
									Secured Debt			(9)			8/20/2021						9.78%			L+			7.50%						8/20/2026			18,425			18,123			18,242
									Common Stock						8/20/2021			11,647																					1,584			1,650
																																							19,707			19,892
Tedder Industries, LLC						Manufacturer of Firearm Holsters and Accessories
									Secured Debt						8/31/2018						12.00%												8/31/2023			460			460			460
									Secured Debt						8/31/2018						12.00%												8/31/2023			3,800			3,796			3,779
									Preferred Member Units						8/31/2018			133																					2,267			1,784
																																							6,523			6,023
Trantech Radiator Topco, LLC						Transformer Cooling Products and Services
									Secured Debt			(33)			5/31/2019																		5/31/2024			0			(4)			0
									Secured Debt						5/31/2019						12.00%												5/31/2024			2,080			2,056			2,080
									Common Stock			(8)			5/31/2019			154																					1,164			1,850
																																							3,216			3,930
VVS Holdco LLC						Omnichannel Retailer of Animal Health Products
									Secured Debt			(9) (23)			12/1/2021						8.63%			L+			6.00%						12/1/2023			200			193			193
									Secured Debt			(23)			12/1/2021						11.50%												12/1/2026			7,600			7,409			7,409
									Preferred Equity			(8) (23)			12/1/2021			2,960																					2,960			3,020
																																							10,562			10,622
Subtotal Affiliate Investments (42.2% of net assets at fair value)																																							$	228,834		$	257,418
Non-Control/Non-Affiliate Investments (7)
AAC Holdings, Inc.			(11)			Substance Abuse Treatment Service Provider
									Secured Debt			(19)			12/11/2020						18.00%									18.00%			6/25/2025			3,986			3,755			3,906
									Common Stock						12/11/2020			593,927																					3,148			75
									Warrants			(27)			12/11/2020			197,717															12/11/2025			0			0			27
																																							6,903			4,008
AB Centers Acquisition Corporation			(10)			Applied Behavior Analysis Therapy Provider
									Secured Debt			(9) (33)			9/6/2022									SF+			6.00%						9/6/2028			0			(5)			(5)
									Secured Debt			(9) (33)			9/6/2022									SF+			6.00%						9/6/2028			0			(9)			(9)
									Secured Debt			(9)			9/6/2022						9.17%			SF+			6.00%						9/6/2028			1,983			1,928			1,928

10

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Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
																																							1,914			1,914
Acumera, Inc.			(10)			Managed Security Service Provider
									Secured Debt			(9)			6/28/2022						12.02%			L+			9.50%						10/26/2027			4,368			4,258			4,330
									Secured Debt			(9)			6/28/2022						12.02%			L+			9.50%						10/26/2027			1,379			1,346			1,367
																																							5,604			5,697
Adams Publishing Group, LLC			(10)			Local Newspaper Operator
									Secured Debt			(9)			3/11/2022						12.75%			P+			6.50%						3/11/2027			424			424			408
									Secured Debt			(9)			3/11/2022						10.75%			L+			7.50%						3/11/2027			2,902			2,895			2,840
																																							3,319			3,248
ADS Tactical, Inc.			(11)			Value-Added Logistics and Supply Chain Provider to the Defense Industry
									Secured Debt			(9)			3/29/2021						8.80%			L+			5.75%						3/19/2026			9,250			9,111			8,551
AMEREQUIP LLC.			(10)			Full Service Provider of Comprehensive Commercial Production Services, Including the Design, Engineering, and Manufacturing of Products It
									Secured Debt			(9) (33)			8/31/2022									SF+			7.40%						8/31/2027			0			0			0
									Secured Debt			(9)			8/31/2022						9.84%			SF+			7.40%						8/31/2027			2,031			2,031			2,031
									Common Stock						8/31/2022			11																					78			78
																																							2,109			2,109
American Health Staffing Group, Inc.			(10)			Healthcare Temporary Staffing
									Secured Debt			(9) (33)			11/19/2021									L+			7.00%						11/19/2026			0			(14)			(14)
									Secured Debt			(9)			11/19/2021						8.01%			L+			7.00%						11/19/2026			8,292			8,223			8,292
																																							8,209			8,278
American Nuts, LLC			(10)			Roaster, Mixer and Packager of Bulk Nuts and Seeds
									Secured Debt			(9)			3/11/2022						8.98%			SF+			6.75%						4/10/2026			4,449			4,426			4,341
									Secured Debt			(9)			3/11/2022						10.98%			SF+			8.75%						4/10/2026			4,449			4,426			4,347
																																							8,852			8,688
American Teleconferencing Services, Ltd.			(11)			Provider of Audio Conferencing and Video Collaboration Solutions
									Secured Debt			(14)			9/17/2021						7.50%			L+			6.50%						12/8/2022			2,425			2,375			136
									Secured Debt			(9) (14)			5/19/2016						7.50%			L+			6.50%						6/8/2023			11,693			11,451			658
																																							13,826			794

11

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Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
ArborWorks, LLC			(10)			Vegetation Management Services
									Secured Debt			(9)			11/9/2021						9.97%			L+			7.00%						11/9/2026			2,484			2,423			2,194
									Secured Debt			(9)			11/9/2021						9.87%			L+			7.00%						11/9/2026			15,786			15,523			13,939
									Common Equity						11/9/2021			124																					124			7
																																							18,070			16,140
Archer Systems, LLC			(10)			Mass Tort Settlement Administration Solutions Provider
									Secured Debt			(9)			8/11/2022						9.65%			SF+			6.50%						8/11/2027			26			22			22
									Secured Debt			(9)			8/11/2022						8.91%			SF+			6.50%						8/11/2027			2,205			2,162			2,162
									Common Stock						8/11/2022			62,402																					62			62
																																							2,246			2,246
ATS Operating, LLC			(10)			For-Profit Thrift Retailer
									Secured Debt			(9) (33)			1/18/2022									SF+			6.50%						1/18/2027			0			0			0
									Secured Debt			(9)			1/18/2022						7.84%			SF+			5.50%						1/18/2027			925			906			883
									Secured Debt			(9)			1/18/2022						9.84%			SF+			7.50%						1/18/2027			925			906			887
									Common Stock						1/18/2022			100,000																					100			100
																																							1,912			1,870
AVEX Aviation Holdings, LLC			(10)			Specialty Aircraft Dealer
									Secured Debt			(9)			12/15/2021						10.32%			L+			7.00%						12/15/2026			100			92			94
									Secured Debt			(9)			12/15/2021						10.29%			L+			7.00%						12/15/2026			1,687			1,659			1,591
									Common Equity						12/15/2021			50																					50			36
																																							1,801			1,721
BBB Tank Services, LLC						Maintenance, Repair and Construction Services to the Above-Ground Storage Tank Market
									Unsecured Debt			(9) (17)			4/8/2016						13.56%			L+			11.00%						4/8/2021			200			200			200
									Unsecured Debt			(9) (17)			4/8/2016						13.56%			L+			11.00%						4/8/2021			1,000			1,000			375
									Member Units						4/8/2016			200,000																					200			0
									Preferred Stock (non-voting)			(19)			12/17/2018						15.00%									15.00%									41			0
																																							1,441			575
Berry Aviation, Inc.			(10)			Charter Airline Services
									Secured Debt			(19)			7/6/2018						12.00%						10.50%			1.50%			1/6/2024			189			188			189
									Preferred Member Units			(8) (19) (23)			7/6/2018			1,548,387			8.00%									8.00%									2,118			4,607

12

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Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
									Preferred Member Units			(8) (19) (23)			11/12/2019			122,416			16.00%									16.00%									188			379
																																							2,494			5,175
Bettercloud, Inc.			(10)			SaaS Provider of Workflow Management and Business Application Solutions
									Secured Debt			(9) (33)			6/30/2022									SF+			6.00%						6/30/2028			0			(23)			(23)
									Secured Debt			(9) (19)			6/30/2022						9.78%			SF+			6.75%			5.75%			6/30/2028			7,828			7,679			7,828
																																							7,656			7,805
Binswanger Enterprises, LLC			(10)			Glass Repair and Installation Service Provider
									Secured Debt			(9) (33)			3/10/2017									SF+			8.50%						6/10/2024			0			0			0
									Member Units						3/10/2017			1,050,000																					1,050			560
																																							1,050			560
Bluestem Brands, Inc.			(11)			Multi-Channel Retailer of General Merchandise
									Secured Debt			(9)			8/28/2020						11.29%			L+			8.50%						8/28/2025			6,780			6,760			6,661
									Common Stock			(8)			10/1/2020			700,446																					0			5,273
																																							6,760			11,934
Boccella Precast Products LLC						Manufacturer of Precast Hollow Core Concrete
									Secured Debt						9/23/2021						10.00%												2/28/2027			80			80			80
									Member Units			(8)			6/30/2017			540,000																					564			826
																																							644			906
Brightwood Capital Fund Investments			(12) (13)			Investment Partnership
									LP Interests (Brightwood Capital Fund III, LP)			(8) (24)			7/21/2014			0.5%																					2,449			1,522
									LP Interests (Brightwood Capital Fund IV, LP)			(8) (24)			10/26/2016			1.2%																					8,737			8,954
																																							11,186			10,476
Buca C, LLC						Casual Restaurant Group
									Secured Debt						6/30/2015						9.00%												6/30/2023			11,853			11,853			9,473
									Preferred Member Units			(19)			6/30/2015			4			6.00%									6.00%									3,040			0
																																							14,893			9,473
Burning Glass Intermediate Holding Company, Inc.			(10)			Provider of Skills-Based Labor Market Analytics
									Secured Debt			(9)			6/14/2021						7.52%			L+			5.00%						6/10/2026			413			393			413
									Secured Debt			(9)			6/14/2021						7.52%			L+			5.00%						6/10/2028			13,289			13,094			13,289
																																							13,487			13,702

13

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Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
Cadence Aerospace LLC			(10)			Aerostructure Manufacturing
									Secured Debt			(9) (19) (30)			11/14/2017						11.31%			L+			8.50%			0.13%			11/14/2023			20,153			20,093			20,129
CAI Software LLC						Provider of Specialized Enterprise Resource Planning Software
									Preferred Equity			(8)			12/13/2021			379,338																					379			379
									Preferred Equity						12/13/2021			126,446																					0			0
																																							379			379
Camin Cargo Control, Inc.			(11)			Provider of Mission Critical Inspection, Testing and Fuel Treatment Services
									Secured Debt			(9)			6/14/2021						9.62%			L+			6.50%						6/4/2026			7,629			7,569			7,362
Career Team Holdings, LLC						Provider of Workforce Training and Career Development Services
									Secured Debt			(9) (33)			12/17/2021									L+			6.00%						12/17/2026			0			(3)			(3)
									Secured Debt						12/17/2021						12.50%												12/17/2026			2,250			2,193			2,193
									Common Stock						12/17/2021			50,000																					500			500
																																							2,690			2,690
CaseWorthy, Inc.			(10)			SaaS Provider of Case Management Solutions
									Secured Debt			(9) (33)			5/18/2022									L+			5.25%						5/18/2027			0			(4)			(4)
									Secured Debt			(9) (33)			5/18/2022									L+			5.25%						5/18/2027			0			0			0
									Secured Debt			(9)			5/18/2022						8.26%			L+			5.25%						5/18/2027			1,995			1,976			1,952
																																							1,972			1,948
Channel Partners Intermediateco, LLC			(10)			Outsourced Consumer Services Provider
									Secured Debt			(9)			2/7/2022						9.08%			SF+			6.25%						2/7/2027			477			467			454
									Secured Debt			(9)			2/7/2022						7.70%			SF+			6.25%						2/7/2027			3,591			3,527			3,421
																																							3,994			3,875
Clarius BIGS, LLC			(10)			Prints & Advertising Film Financing
									Secured Debt			(14) (17) (19)			9/23/2014						15.00%									15.00%			1/5/2015			2,747			2,403			10
Classic H&G Holdings, LLC						Provider of Engineered Packaging Solutions
									Secured Debt			(9)			3/12/2020						8.38%			L+			6.00%						3/12/2025			1,940			1,925			1,940

14

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Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
									Secured Debt						3/12/2020						8.00%												3/12/2025			4,819			4,748			4,819
									Preferred Member Units			(8)			3/12/2020			39																					1,440			5,950
																																							8,113			12,709
Computer Data Source, LLC			(10)			Third Party Maintenance Provider to the Data Center Ecosystem
									Secured Debt			(9)			8/6/2021						10.13%			L+			7.50%						8/6/2026			4,167			4,102			3,766
									Secured Debt			(9)			8/6/2021						10.37%			L+			7.50%						8/6/2026			15,604			15,358			14,102
																																							19,460			17,868
Construction Supply Investments, LLC			(10)			Distribution Platform of Specialty Construction Materials to Professional Concrete and Masonry Contractors
									Member Units			(8)			12/29/2016			861,618																					3,335			20,795
Dalton US Inc.			(10)			Provider of Supplemental Labor Services
									Secured Debt			(9)			8/16/2022						11.13%			SF+			8.00%						8/16/2027			55			38			38
									Secured Debt			(9) (33)			8/16/2022									SF+			8.00%						8/16/2027			0			(6)			(6)
									Secured Debt			(9)			8/16/2022						11.31%			SF+			8.00%						8/16/2027			1,038			1,017			1,017
									Common Stock						8/16/2022			14																					14			14
																																							1,063			1,063
DMA Industries, LLC						Distributor of aftermarket ride control products
									Secured Debt						11/19/2021						12.00%												11/19/2026			5,300			5,212			5,300
									Preferred Equity						11/19/2021			1,486																					1,486			1,820
																																							6,698			7,120
DTE Enterprises, LLC			(10)			Industrial Powertrain Repair and Services
									Secured Debt			(9) (33)			4/13/2018									L+			7.50%						4/13/2023			0			(2)			(2)
									Secured Debt			(9)			4/13/2018						10.44%			L+			7.50%						4/13/2023			7,869			7,851			7,529
									Class A Preferred Member Units			(19)			4/13/2018			776,316			8.00%									8.00%									776			270
									Class AA Preferred Member Units (non-voting)			(8) (19)			4/13/2018						10.00%									10.00%									1,132			1,132
																																							9,757			8,929
Dynamic Communities, LLC			(10)			Developer of Business Events and Online Community Groups
									Secured Debt			(9) (33)			7/17/2018									L+			8.50%						7/17/2023			0			0			0

15

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
									Secured Debt			(9)			9/28/2022						10.75%			L+			7.50%						7/17/2023			2,805			2,792			2,270
									Secured Debt			(9)			9/28/2022						12.75%			L+			9.50%						7/17/2023			2,805			2,792			2,149
																																							5,584			4,419
Emerald Technologies Acquisition Co, Inc.			(11)			Design & Manufacturing
									Secured Debt			(9)			2/10/2022						9.38%			SF+			6.25%						2/10/2028			2,469			2,424			2,376
Engineering Research & Consulting, LLC			(10)			Provider of Engineering & Consulting Services to US Department of Defense
									Secured Debt			(9)			5/23/2022						11.00%			SF+			6.25%						5/23/2027			41			26			40
									Secured Debt			(9)			5/23/2022						9.38%			SF+			6.25%						5/23/2028			5,159			5,066			4,981
																																							5,092			5,021
EPIC Y-Grade Services, LP			(11)			NGL Transportation & Storage
									Secured Debt			(9)			6/22/2018						8.08%			L+			6.00%						6/30/2027			6,857			6,791			5,817
Event Holdco, LLC			(10)			Event and Learning Management Software for Healthcare Organizations and Systems
									Secured Debt			(9) (23)			12/22/2021						9.25%			L+			7.00%						12/22/2026			308			305			281
									Secured Debt			(9) (23)			12/22/2021						10.67%			L+			7.00%						12/22/2026			3,692			3,661			3,367
																																							3,966			3,648
Flip Electronics LLC			(10)			Distributor of Hard-to-Find and Obsolete Electronic Components
									Secured Debt			(9)			3/24/2022						11.21%			SF+			7.50%						1/2/2026			545			545			545
									Secured Debt			(9)			1/4/2021						11.19%			SF+			7.50%						1/2/2026			6,873			6,751			6,753
																																							7,296			7,298
Hawk Ridge Systems, LLC						Value-Added Reseller of Engineering Design and Manufacturing Solutions
									Secured Debt			(9)			12/2/2016						8.38%			L+			6.00%						1/15/2026			796			796			796
									Secured Debt						12/2/2016						8.00%												1/15/2026			8,200			8,143			8,200
									Preferred Member Units			(8)			12/2/2016			56																					713			4,770
									Preferred Member Units			(23)			12/2/2016			56																					38			250
																																							9,690			14,016
HDC/HW Intermediate Holdings			(10)			Managed Services and Hosting Provider
									Secured Debt			(9) (19)			12/21/2018						11.76%			SF+			9.50%			5.75%			12/21/2023			180			179			167

16

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Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
									Secured Debt			(9) (19)			12/21/2018						11.76%			SF+			9.50%			5.75%			12/21/2023			1,754			1,744			1,624
																																							1,923			1,791
HEADLANDS OP-CO LLC			(10)			Clinical Trial Sites Operator
									Secured Debt			(9) (33)			8/1/2022									SF+			6.50%						8/1/2027			0			(19)			(19)
									Secured Debt			(9) (33)			8/1/2022									SF+			6.50%						8/1/2027			0			(19)			(19)
									Secured Debt			(9)			8/1/2022						9.52%			SF+			6.50%						8/1/2027			5,000			4,903			4,903
																																							4,865			4,865
Hybrid Promotions, LLC			(10)			Wholesaler of Licensed, Branded and Private Label Apparel
									Secured Debt			(9)			6/30/2021						10.33%			L+			8.25%						6/30/2026			7,875			7,754			7,468
IG Parent Corporation			(11)			Software Engineering
									Secured Debt			(9)			7/30/2021						8.41%			SF+			5.75%						7/30/2026			295			276			290
									Secured Debt			(9)			7/30/2021						8.23%			SF+			5.75%						7/30/2026			8,317			8,205			8,171
																																							8,481			8,461
Implus Footcare, LLC			(10)			Provider of Footwear and Related Accessories
									Secured Debt			(9) (19)			6/1/2017						10.25%			L+			7.75%			0.25%			4/30/2024			16,964			16,956			15,674
Independent Pet Partners Intermediate Holdings, LLC			(10)			Omnichannel Retailer of Specialty Pet Products
									Secured Debt			(14) (19)			12/10/2020						6.00%									6.00%			11/20/2023			10,902			10,443			7,939
									Preferred Stock (non-voting)			(14) (19)			12/10/2020						6.00%									6.00%									2,470			0
									Preferred Stock (non-voting)						12/10/2020																								0			0
									Member Units						11/20/2018			1,191,667																					1,192			0
									Warrants						11/20/2018			185,757															11/19/2028			0			0			0
																																							14,105			7,939
Industrial Services Acquisition, LLC			(10)			Industrial Cleaning Services
									Secured Debt			(9)			8/13/2021						9.88%			L+			6.75%						8/13/2026			387			357			387
									Secured Debt			(9)			8/13/2021						9.69%			L+			6.75%						8/13/2026			10,900			10,758			10,900
									Preferred Member Units			(8) (19) (23)			1/31/2018			336			10.00%									10.00%									296			376
									Preferred Member Units			(8) (19) (23)			5/17/2019			187			20.00%									20.00%									208			234
									Member Units			(23)			6/17/2016			2,100																					2,100			1,620

17

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Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
																																							13,719			13,517
Infolinks Media Buyco, LLC			(10)			Exclusive Placement Provider to the Advertising Ecosystem
									Secured Debt			(9) (33)			11/1/2021									L+			5.75%						11/1/2026			0			(51)			(51)
									Secured Debt			(9)			11/1/2021						9.42%			L+			5.75%						11/1/2026			10,769			10,592			10,652
																																							10,541			10,601
Interface Security Systems, L.L.C			(10)			Commercial Security & Alarm Services
									Secured Debt			(9)			12/9/2021						12.32%			L+			10.00%						8/7/2023			1,398			1,398			1,398
									Secured Debt			(9) (14) (19)			8/7/2019						10.52%			L+			7.00%			1.00%			8/7/2023			7,334			7,254			1,554
									Common Stock						12/7/2021			2,143																					0			0
																																							8,652			2,952
Intermedia Holdings, Inc.			(11)			Unified Communications as a Service
									Secured Debt			(9)			8/3/2018						9.12%			L+			6.00%						7/19/2025			5,635			5,627			4,945
Invincible Boat Company, LLC.			(10)			Manufacturer of Sport Fishing Boats
									Secured Debt			(9)			8/28/2019						9.42%			L+			6.50%						8/28/2025			726			721			716
									Secured Debt			(9)			8/28/2019						8.75%			L+			6.50%						8/28/2025			17,148			17,041			16,901
																																							17,762			17,617
INW Manufacturing, LLC			(11)			Manufacturer of Nutrition and Wellness Products
									Secured Debt			(9)			5/19/2021						8.71%			L+			5.75%						3/25/2027			7,078			6,907			6,264
Iron-Main Investments, LLC						Consumer Reporting Agency Providing Employment Background Checks and Drug Testing
									Secured Debt						8/2/2021						12.50%												11/15/2026			1,150			1,123			1,123
									Secured Debt						9/1/2021						12.50%												11/15/2026			800			781			781
									Secured Debt						11/15/2021						12.50%												11/15/2026			2,236			2,236			2,236
									Secured Debt						11/15/2021						12.50%												11/15/2026			5,000			4,875			4,875
									Common Stock						8/3/2021			44,944																					449			449
																																							9,464			9,464
Isagenix International, LLC			(11)			Direct Marketer of Health & Wellness Products
									Secured Debt			(9) (19)			6/21/2018						9.93%			L+			7.75%			9.93%			6/14/2025			4,951			4,929			2,140
Jackmont Hospitality, Inc.			(10)			Franchisee of Casual Dining Restaurants

18

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Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
									Secured Debt			(9)			11/8/2021						8.75%			L+			6.50%						11/4/2024			4,179			4,179			3,985
									Preferred Equity			(8)			11/8/2021			5,653,333																					229			1,233
																																							4,408			5,218
Joerns Healthcare, LLC			(11)			Manufacturer and Distributor of Health Care Equipment & Supplies
									Secured Debt			(19)			11/15/2021						15.00%									15.00%			11/8/2022			1,546			1,546			1,546
									Secured Debt			(14) (19)			8/21/2019						19.75%									19.75%			8/21/2024			3,351			3,325			1,015
									Common Stock						8/21/2019			392,514																					3,678			0
																																							8,549			2,561
Johnson Downie Opco, LLC						Executive Search Services
									Secured Debt			(9) (33)			12/10/2021									L+			11.50%						12/10/2026			0			(3)			0
									Secured Debt			(9)			12/10/2021						14.13%			L+			11.50%						12/10/2026			1,111			1,092			1,111
									Preferred Equity			(8)			12/10/2021			350																					350			650
																																							1,439			1,761
JorVet Holdings, LLC						Supplier and Distributor of Veterinary Equipment and Supplies
									Secured Debt						3/28/2022						12.00%												3/28/2027			2,850			2,800			2,800
									Common Stock			(8)			3/28/2022			11,934																					1,193			1,193
																																							3,993			3,993
JTI Electrical & Mechanical, LLC			(10)			Electrical, Mechanical and Automation Services
									Secured Debt			(9) (33)			12/22/2021									L+			6.00%						12/22/2026			0			(12)			(12)
									Secured Debt			(9)			12/22/2021						8.26%			L+			6.00%						12/22/2026			3,118			3,066			3,110
									Common Equity						12/22/2021			140,351																					140			200
																																							3,194			3,298
KMS, LLC			(10)			Wholesaler of Closeout and Value-priced Products
									Secured Debt			(9)			10/4/2021						9.56%			L+			7.25%						10/4/2026			1,344			1,259			1,268
									Secured Debt			(9)			10/4/2021						9.56%			L+			7.25%						10/4/2026			9,405			9,253			8,877
																																							10,512			10,145
Knight Energy Services LLC			(11)			Oil and Gas Equipment & Services
									Secured Debt			(19)			1/9/2015															8.50%			2/9/2024			1,025			1,025			811
									Common Stock						11/14/2018			25,692																					1,843			0
																																							2,868			811
Lightbox Holdings, L.P.			(11)			Provider of Commercial Real Estate Software
									Secured Debt						5/9/2019						7.96%			L+			5.00%						5/9/2026			5,841			5,795			5,636

19

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Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
LL Management, Inc.			(10)			Medical Transportation Service Provider
									Secured Debt			(9)			5/2/2019						10.20%			SF+			7.25%						9/25/2023			8,024			8,001			8,024
									Secured Debt			(9)			5/2/2019						9.81%			SF+			7.25%						9/25/2023			6,179			6,159			6,179
									Secured Debt			(9)			5/12/2022						9.13%			SF+			7.25%						9/25/2023			8,907			8,806			8,861
																																							22,966			23,064
LLFlex, LLC			(10)			Provider of Metal-Based Laminates
									Secured Debt			(9)			8/16/2021						11.28%			L+			9.00%						8/16/2026			4,938			4,850			4,693
Logix Acquisition Company, LLC			(10)			Competitive Local Exchange Carrier
									Secured Debt			(9)			1/8/2018						8.87%			L+			5.75%						12/22/2024			9,506			9,472			8,675
Mac Lean-Fogg Company			(10)			Manufacturer and Supplier for Auto and Power Markets
									Secured Debt			(9)			4/22/2019						7.87%			L+			4.75%						12/22/2025			761			758			754
									Secured Debt			(9)			4/22/2019						7.87%			L+			4.75%						12/22/2025			6,484			6,458			6,419
									Preferred Stock			(19)			10/1/2019						13.75%									9.25%									826			802
																																							8,042			7,975
Mako Steel, LP			(10)			Self-Storage Design & Construction
									Secured Debt			(9) (31)			3/15/2021						10.42%			L+			7.25%						3/15/2026			1,782			1,725			1,720
									Secured Debt			(9)			3/15/2021						11.09%			L+			7.25%						3/15/2026			17,114			16,870			16,518
																																							18,595			18,238
MB2 Dental Solutions, LLC			(11)			Dental Partnership Organization
									Secured Debt			(9) (28)			1/28/2021						9.08%			SF+			6.00%						1/29/2027			6,845			6,716			6,791
									Secured Debt			(9)			1/28/2021						9.70%			SF+			6.00%						1/29/2027			7,896			7,797			7,834
																																							14,513			14,625
Microbe Formulas, LLC			(10)			Nutritional Supplements Provider
									Secured Debt			(9) (33)			4/4/2022									SF+			6.25%						4/3/2028			0			(8)			(8)
									Secured Debt			(9)			4/4/2022						8.36%			SF+			6.25%						4/3/2028			3,328			3,266			3,092
																																							3,258			3,084
Mills Fleet Farm Group, LLC			(10)			Omnichannel Retailer of Work, Farm and Lifestyle Merchandise

20

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Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
									Secured Debt			(9)			10/24/2018						9.06%			L+			6.25%						10/24/2024			18,769			18,530			18,309
MonitorUS Holding, LLC			(10) (13) (32)			SaaS Provider of Media Intelligence Services
									Secured Debt			(9) (33)			5/24/2022									L+			7.00%						5/24/2027			0			(20)			(20)
									Secured Debt			(9)			5/24/2022						9.43%			L+			7.00%						5/24/2027			2,882			2,825			2,760
									Secured Debt			(9)			5/24/2022						8.51%			L+			7.00%						5/24/2027			4,906			4,815			4,840
									Common Stock						8/30/2022			12,798,820																					256			256
																																							7,876			7,836
NinjaTrader, LLC			(10)			Operator of Futures Trading Platform
									Secured Debt			(9) (33)			12/18/2019									L+			6.75%						12/18/2024			0			(2)			0
									Secured Debt			(9) (33)			12/18/2019									L+			6.75%						12/18/2024			0			(26)			(26)
									Secured Debt			(9)			12/18/2019						8.53%			L+			6.75%						12/18/2024			11,634			11,488			11,634
																																							11,460			11,608
NNE Partners, LLC			(10)			Oil & Gas Exploration & Production
									Secured Debt						3/2/2017						10.86%			L+			9.25%						12/31/2023			21,607			21,602			20,989
NTM Acquisition Corp.			(11)			Provider of B2B Travel Information Content
									Secured Debt			(9) (19)			7/12/2016						9.50%			L+			6.25%			1.00%			6/7/2024			4,101			4,098			3,958
NWN Corporation			(10)			Value Added Reseller and Provider of Managed Services to a Diverse Set of Industries
									Secured Debt			(9)			5/7/2021						9.27%			L+			6.50%						5/7/2026			1,570			1,515			1,480
									Secured Debt			(9)			5/7/2021						9.37%			L+			6.50%						5/7/2026			21,184			20,847			19,969
																																							22,362			21,449
OVG Business Services, LLC			(10)			Venue Management Services
									Secured Debt			(9)			11/29/2021						9.34%			L+			6.25%						11/19/2028			17,456			17,302			16,322
Paragon Healthcare, Inc.			(10)			Infusion Therapy Treatment Provider
									Secured Debt			(9) (33)			1/19/2022									SF+			5.75%						1/19/2027			0			(15)			(15)
									Secured Debt			(9)			1/19/2022						8.45%			SF+			5.75%						1/19/2027			214			201			202
									Secured Debt			(9)			1/19/2022						8.40%			SF+			5.75%						1/19/2027			2,363			2,301			2,238
																																							2,487			2,425

21

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Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
PTL US Bidco, Inc			(10) (13)			Manufacturers of Equipment, Including Drilling Rigs and Equipment, and Providers of Supplies and Services to Companies Involved In the Drilling, Evaluation and Completion of Oil and Gas Wells
									Secured Debt			(9) (33)			8/19/2022									SF+			8.25%						8/19/2027			0			(12)			(12)
									Secured Debt			(9)			8/19/2022						11.40%			SF+			8.25%						8/19/2027			1,875			1,839			1,839
																																							1,827			1,827
RA Outdoors LLC			(10)			Software Solutions Provider for Outdoor Activity Management
									Secured Debt			(9) (33)			4/8/2021									SF+			6.75%						4/8/2026			0			(12)			(12)
									Secured Debt			(9)			4/8/2021						9.03%			SF+			6.75%						4/8/2026			12,917			12,779			11,838
																																							12,767			11,826
Research Now Group, Inc. and Survey Sampling International, LLC			(11)			Provider of Outsourced Online Surveying
									Secured Debt			(9)			12/29/2017						8.84%			SF+			5.50%						12/20/2024			9,820			9,820			8,916
RM Bidder, LLC			(10)			Scripted and Unscripted TV and Digital Programming Provider
									Member Units						11/12/2015			1,854																					31			24
									Warrants			(26)			11/12/2015			—															10/20/2025			284			284			0
																																							315			24
Roof Opco, LLC			(10)			Residential Re-Roofing/Repair
									Secured Debt			(9) (33)			8/27/2021									L+			6.50%						8/27/2026			0			(15)			(15)
									Secured Debt			(9)			8/27/2021						8.78%			L+			6.50%						8/27/2026			2,917			2,830			2,837
									Secured Debt			(9)			8/27/2021						8.78%			L+			6.50%						8/27/2026			3,967			3,902			3,859
																																							6,717			6,681
Rug Doctor, LLC.			(10)			Carpet Cleaning Products and Machinery
									Secured Debt			(9) (19)			7/16/2021						11.99%			SF+			8.25%			2.00%			11/16/2024			6,250			6,207			5,592
									Secured Debt			(9) (19)			7/16/2021						11.99%			SF+			8.25%			2.00%			11/16/2024			9,250			9,182			8,276
																																							15,389			13,868
Salient Partners L.P.			(11)			Provider of Asset Management Services
									Secured Debt			(9)			8/31/2018						9.67%			L+			6.00%						10/31/2022			6,251			6,257			5,039
									Secured Debt			(9)			9/30/2021						9.67%			L+			6.00%						10/31/2022			1,250			1,250			2,494
																																							7,507			7,533

22

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Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
Savers, Inc.			(11)			For-Profit Thrift Retailer
									Secured Debt			(9)			5/14/2021						9.17%			L+			5.50%						4/26/2028			4,292			4,280			4,142
SIB Holdings, LLC			(10)			Provider of Cost Reduction Services
									Secured Debt			(9)			10/29/2021						8.81%			SF+			6.25%						10/29/2026			404			392			372
									Secured Debt			(9)			10/29/2021						8.81%			SF+			6.25%						10/29/2026			1,966			1,918			1,814
									Secured Debt			(9)			10/29/2021						8.14%			SF+			6.25%						10/29/2026			9,787			9,627			9,029
									Common Equity						10/29/2021			119,048																					250			250
																																							12,187			11,465
Slick Innovations, LLC						Text Message Marketing Platform
									Secured Debt						9/13/2018						11.00%												9/13/2023			1,060			1,008			1,060
									Common Stock						9/13/2018			17,500																					175			410
									Warrants			(27)			9/13/2018			4,521															9/13/2028			45			45			110
																																							1,228			1,580
South Coast Terminals Holdings, LLC			(10)			Specialty Toll Chemical Manufacturer
									Secured Debt			(9) (33)			12/10/2021									L+			5.75%						12/13/2026			0			(6)			(6)
									Secured Debt			(9)			12/10/2021						8.74%			L+			5.75%						12/13/2026			3,531			3,472			3,481
									Common Equity						12/10/2021			60,606																					61			75
																																							3,527			3,550
SPAU Holdings, LLC			(10)			Digital Photo Product Provider
									Secured Debt			(9) (33)			7/1/2022									SF+			7.50%						7/1/2027			0			(19)			(19)
									Secured Debt			(9)			7/1/2022						9.58%			SF+			7.50%						7/1/2027			5,000			4,907			4,907
									Common Stock						7/1/2022			200,000																					200			200
																																							5,088			5,088
Student Resource Center, LLC			(10)			Higher Education Services
									Secured Debt			(9) (33)			6/25/2021									L+			8.00%						6/25/2026			0			(12)			(12)
									Secured Debt			(9)			9/30/2022						10.25%			L+			7.00%						6/25/2026			6,944			6,836			5,712
									Secured Debt			(9)			9/30/2022						11.75%			L+			9.50%						6/25/2026			4,820			4,743			1,429
																																							11,567			7,129
Tex Tech Tennis, LLC			(10)			Sporting Goods & Textiles
									Common Stock			(23)			7/7/2021			1,000,000																					1,000			1,380

23

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Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
The Affiliati Network, LLC						Performance Marketing Solutions
									Secured Debt			(33)			8/9/2021																		8/9/2026			0			(4)			(4)
									Secured Debt						8/9/2021						13.00%												8/9/2026			2,810			2,762			2,762
									Preferred Stock			(8)			8/9/2021			320,000																					1,600			1,600
																																							4,358			4,358
U.S. TelePacific Corp.			(11)			Provider of Communications and Managed Services
									Secured Debt			(9) (19) (29)			5/17/2017						11.57%			SF+			8.50%			7.25%			5/2/2026			13,181			13,109			5,734
USA DeBusk LLC			(10)			Provider of Industrial Cleaning Services
									Secured Debt			(9)			10/22/2019						8.27%			L+			5.75%						9/8/2026			18,059			17,860			17,718
Vida Capital, Inc			(11)			Alternative Asset Manager
									Secured Debt						10/10/2019						9.12%			L+			6.00%						10/1/2026			6,403			6,345			5,016
Vistar Media, Inc.			(10)			Operator of Digital Out-of-Home Advertising Platform
									Preferred Stock						4/3/2019			70,207																					767			2,350
Volusion, LLC						Provider of Online Software-as-a-Service eCommerce Solutions
									Secured Debt			(17)			1/26/2015						11.50%												1/26/2020			7,172			7,172			7,127
									Unsecured Convertible Debt						5/16/2018						8.00%												11/16/2023			175			175			175
									Preferred Member Units						1/26/2015			2,090,001																					6,000			0
									Warrants			(27)			1/26/2015			784,867															1/26/2025			1,104			1,104			0
																																							14,451			7,302
VORTEQ Coil Finishers, LLC			(10)			Specialty Coating of Aluminum and Light-Gauge Steel
									Secured Debt			(9)			11/30/2021						9.75%			L+			7.25%						11/30/2026			18,870			18,551			18,797
									Common Equity			(8)			11/30/2021			769,231																					769			2,300
																																							19,320			21,097
Wall Street Prep, Inc.			(10)			Financial Training Services
									Secured Debt			(9) (33)			7/19/2021									L+			7.00%						7/19/2026			0			(8)			(8)

24

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Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
									Secured Debt			(9)			7/19/2021						9.28%			L+			7.00%						7/19/2026			5,294			5,212			5,025
									Common Stock						7/19/2021			500,000																					500			390
																																							5,704			5,407
Watterson Brands, LLC			(10)			Facility Management Services
									Secured Debt			(9)			12/17/2021						9.63%			L+			6.00%						12/17/2026			51			45			49
									Secured Debt			(9)			12/17/2021						8.25%			L+			6.00%						12/17/2026			53			45			52
									Secured Debt			(9)			12/17/2021						8.25%			L+			6.00%						12/17/2026			4,142			4,086			4,013
																																							4,176			4,114
West Star Aviation Acquisition, LLC			(10)			Aircraft, Aircraft Engine and Engine Parts
									Secured Debt			(9)			3/1/2022						8.59%			SF+			6.00%						3/1/2028			2,985			2,931			2,847
									Secured Debt			(9) (33)			3/1/2022									SF+			6.00%						3/1/2028			0			(6)			(6)
									Common Stock						3/1/2022			200,000																					200			210
																																							3,125			3,051
Winter Services LLC			(10)			Provider of Snow Removal and Ice Management Services
									Secured Debt			(9) (33)			11/19/2021									L+			7.00%						11/19/2026			0			(46)			0
									Secured Debt			(9) (33)			11/19/2021									L+			7.00%						11/19/2026			0			(46)			(46)
									Secured Debt			(9)			11/19/2021						9.23%			L+			7.00%						11/19/2026			12,500			12,292			12,108
																																							12,200			12,062
Xenon Arc, Inc.			(10)			Tech-enabled Distribution Services to Chemicals and Food Ingredients Primary Producers
									Secured Debt			(33)			12/17/2021									L+			5.25%						12/17/2026			0			(7)			(7)
									Secured Debt			(33)			12/17/2021									L+			5.25%						12/17/2027			0			(20)			(20)
									Secured Debt						12/17/2021						8.63%			L+			5.25%						12/17/2027			2,382			2,342			2,291
																																							2,315			2,264
YS Garments, LLC			(11)			Designer and Provider of Branded Activewear
									Secured Debt			(9) (29)			8/22/2018						7.92%			L+			5.50%						8/9/2024			6,329			6,307			6,060
Zips Car Wash, LLC			(10)			Express Car Wash Operator
									Secured Debt			(9)			2/11/2022						9.94%			SF+			7.25%						3/1/2024			2,394			2,356			2,363
									Secured Debt			(9) (32)			2/11/2022						9.86%			SF+			7.25%						3/1/2024			600			595			586
																																							2,951			2,949
Subtotal Non-Control/Non-Affiliate Investments (129.3% of net assets at fair value)																																							$	837,919		$	788,204

25

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Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

Portfolio Company (1) (20)

Business Description

Type of Investment (2) (3) (15)

Investment Date (22)

Shares/Units

Total Rate

Reference Rate and Spread (25)

PIK Rate (19)

Maturity Date

Principal (4)

Cost (4)

Fair Value (18)

Total Portfolio Investments, September 30, 2022 (179.8% of net assets at fair value)

$

1,097,659

$

1,096,168

Short-Term Investments (16)

US Bank Money Market Account (21)

6,577

6,577

Total Short-Term Investments

$

6,577

$

6,577

___________________________________________________

(1)All investments are Lower Middle Market portfolio investments, unless otherwise noted. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Lower Middle Market portfolio investments. All of the Company’s investments, unless otherwise noted, are encumbered as security for one of the Company’s Credit Facilities.

(2)Debt investments are income producing, unless otherwise noted by footnote (14), as described below. Equity and warrants are non-income producing, unless otherwise noted by footnote (8), as described below.

(3)See Note C—Fair Value Hierarchy for Investments—Portfolio Composition and Schedule 12-14 for a summary of geographic location of portfolio companies.

(4)Principal is net of repayments. Cost is net of repayments and accumulated unearned income. Negative cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.

(5)Control investments are defined by the 1940 Act as investments in which more than 25% of the voting securities are owned or where the ability to nominate greater than 50% of the board representation is maintained.

(6)Affiliate investments are defined by the 1940 Act as investments in which between 5% and 25% (inclusive) of the voting securities are owned and the investments are not classified as Control investments.

(7)Non-Control/Non-Affiliate investments are defined by the 1940 Act as investments that are neither Control investments nor Affiliate investments.

(8)Income producing through dividends or distributions.

(9)Index based floating interest rate is subject to contractual minimum interest rate. As noted in this schedule, 74% of the loans (based on the par amount) contain LIBOR or Term SOFR ("SOFR") floors which range between 0.63% and 2.00%, with a weighted-average floor of 1.03%.

(10)Private Loan portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Private Loan portfolio investments.

(11)Middle Market portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Middle Market portfolio investments.

(12)Other Portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Other Portfolio investments.

(13)Investment is not a qualifying asset as defined under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets.

(14)Non-accrual and non-income producing investment.

(15)All of the Company’s portfolio investments are generally subject to restrictions on resale as “restricted securities.”

(16)Short-term investments represent an investment in a fund that invests in highly liquid investments with average original maturity dates of three months or less. These short-term investments are included as Cash and cash equivalents on the Consolidated Balance Sheets.

26

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Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

September 30, 2022

(dollars in thousands)

(Unaudited)

(17)Maturity date is under on-going negotiations with the portfolio company and other lenders, if applicable.

(18)Investment fair value was determined using significant unobservable inputs, unless otherwise noted. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for further discussion. Negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par.

(19)Investments may have a portion, or all, of their income received from Paid-in-Kind ("PIK") interest or dividends. PIK interest income and cumulative dividend income represent income not paid currently in cash. The difference between the Total Rate and PIK Rate represents the cash rate as of September 30, 2022.

(20)All portfolio company headquarters are based in the United States, unless otherwise noted.

(21)Effective yield as of September 30, 2022 was approximately 0.005% on the US Bank Money Market Account.

(22)Investment date represents the date of initial investment in the security position.

(23)Shares/Units represent ownership in a related Real Estate or HoldCo entity.

(24)Investment is not unitized. Presentation is made in percent of fully diluted ownership unless otherwise indicated.

(25)A majority of the variable rate loans in the Company’s investment portfolio bear interest at a rate that may be determined by reference to either LIBOR (“L”), SOFR (“SF”) or an alternate base rate (commonly based on the Federal Funds Rate or the Prime rate (“P”)), which typically resets every one, three, or six months at the borrower’s option. SOFR based contracts may include a credit spread adjustment (the “Adjustment”) that is charged in addition to the stated spread. The Adjustment is applied when the SOFR rate, plus the Adjustment, exceeds the stated floor rate, as applicable. As of September 30, 2022, SOFR based contracts in the portfolio had Adjustments ranging from 0.10% to 0.26%.

(26)Warrants are presented in equivalent units with a strike price of $14.28 per unit.

(27)Warrants are presented in equivalent shares/units with a strike price of $0.01 per share/unit.

(28)As of September 30, 2022, borrowings under the loan facility bear interest at LIBOR+6.00% (Floor 1.00%) or Prime+5.00%. Delayed draw term loan facility permits the borrower to make an interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the facility.

(29)As of September 30, 2022, borrowings under the loan facility bear interest at LIBOR+6.50% (Floor 1.00%). Each new draw on the delayed draw term loan facility has a different floating rate reset date. The rate presented represents a weighted-average rate for borrowings under the facility.

(30)As of September 30, 2022, borrowings under the loan facility bear interest at LIBOR+7.25% (Floor 1.00%). Each new draw on the delayed draw term loan facility has a different floating rate reset date. The rate presented represents a weighted-average rate for borrowings under the facility.

(31)The security has an effective contractual interest rate of 2.00% PIK + LIBOR+6.50%, Floor 1.00%, but the issuer may, in its discretion, elect to pay the PIK interest in cash. The rate presented represents the effective current yield based on actual payments received during the period.

(32)Portfolio company headquarters are located outside of the United States.

(33)The position is unfunded and no interest income is being earned as of September 30, 2022. The position may earn a nominal unused facility fee on committed amounts.

27

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Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments

December 31, 2021

(dollars in thousands)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
Control Investments (5)
Copper Trail Fund Investments			(12) (13)			Investment Partnership
									LP Interests (CTMH, LP)			(24)			7/17/2017			38.8		%																			$	835		$	710
GRT Rubber Technologies LLC						Manufacturer of Engineered Rubber Products
									Secured Debt						12/19/2014						8.10		%	L+			8.00		%				10/29/2026			$	19,152		18,930			19,152
									Member Units			(8)			12/19/2014			2,896																					6,435			22,750
																																							25,365			41,902
Harris Preston Fund Investments			(12) (13)			Investment Partnership
									LP Interests (2717 MH, L.P.)			(24)			10/1/2017			49.3		%																			2,703			3,971
Subtotal Control Investments (7.6% of net assets at fair value)																																							$	28,903		$	46,583
Affiliate Investments (6)
AFG Capital Group, LLC						Provider of Rent-to-Own Financing Solutions and Services
									Secured Debt						4/25/2019						10.00		%										5/25/2022			36			36			36
									Preferred Member Units			(8)			11/7/2014			46																					300			1,930
																																							336			1,966
Analytical Systems Keco Holdings, LLC						Manufacturer of Liquid and Gas Analyzers
									Secured Debt			(9)			8/16/2019						12.00		%	L+			10.00		%				8/16/2024			1,236			1,178			1,178
									Preferred Member Units						8/16/2019			800																					800			—
									Preferred Member Units						5/20/2021			607																					607			1,220
									Warrants			(27)			8/16/2019			105															8/16/2029						79			—
																																							2,664			2,398
ATX Networks Corp.			(11)			Provider of Radio Frequency Management Equipment
									Secured Debt			(9)			9/1/2021						8.50		%	L+			7.50		%				9/1/2026			7,698			7,153			7,121
									Unsecured Debt						9/1/2021						10.00		%							10.00		%	9/1/2028			3,090			2,010			1,977
									Common Stock						9/1/2021			585																					—			—
																																							9,163			9,098
Barfly Ventures, LLC			(10)			Casual Restaurant Group
									Member Units						10/26/2020			12																					528			643
Brewer Crane Holdings, LLC						Provider of Crane Rental and Operating Services
									Secured Debt			(9)			1/9/2018						11.00		%	L+			10.00		%				1/9/2023			2,015			2,005			2,005

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2021

(dollars in thousands)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
									Preferred Member Units			(8)			1/9/2018			737																					1,070			1,930
																																							3,075			3,935
Centre Technologies Holdings, LLC						Provider of IT Hardware Services and Software Solutions
									Secured Debt			(9)			1/4/2019						12.00		%	L+			10.00		%				1/4/2024			2,354			2,331			2,216
									Preferred Member Units						1/4/2019			3,174																					1,460			1,460
																																							3,791			3,676
Chamberlin Holding LLC						Roofing and Waterproofing Specialty Contractor
									Secured Debt			(9)			2/26/2018						9.00		%	L+			8.00		%				2/26/2023			4,454			4,406			4,454
									Member Units			(8)			2/26/2018			1,087																					2,860			6,030
									Member Units			(8) (23)			11/2/2018			261,786																					330			385
																																							7,596			10,869
Charps, LLC						Pipeline Maintenance and Construction
									Preferred Member Units			(8)			2/3/2017			457																					491			3,500
Clad-Rex Steel, LLC						Specialty Manufacturer of Vinyl-Clad Metal
									Secured Debt			(9)			12/20/2016						10.50		%	L+			9.50		%				1/15/2024			2,620			2,620			2,620
									Member Units			(8)			12/20/2016			179																					1,820			2,560
									Secured Debt						12/20/2016						10.00		%										12/20/2036			270			268			268
									Member Units			(23)			12/20/2016			200																					53			133
																																							4,761			5,581
Cody Pools, Inc.						Designer of Residential and Commercial Pools
									Secured Debt			(9)			3/6/2020						12.25		%	L+			10.50		%				12/17/2026			7,187			7,055			7,181
									Preferred Member Units			(8) (23)			3/6/2020			147																					2,079			11,910
																																							9,134			19,091
Colonial Electric Company LLC						Provider of Electrical Contracting Services
									Secured Debt						3/31/2021						12.00		%										3/31/2026			6,143			6,007			6,007
									Preferred Member Units			(8)			3/31/2021			4,320																					1,920			2,280
																																							7,927			8,287
Datacom, LLC						Technology and Telecommunications Provider
									Secured Debt						3/31/2021						5.00		%										12/31/2025			988			901			852
									Preferred Member Units						3/31/2021			1,000																					290			290
																																							1,191			1,142

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2021

(dollars in thousands)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
Digital Products Holdings LLC						Designer and Distributor of Consumer Electronics
									Secured Debt			(9)			4/1/2018						11.00		%	L+			10.00		%				4/1/2023			4,213			4,186			4,186
									Preferred Member Units			(8)			4/1/2018			964																					2,375			2,459
																																							6,561			6,645
Direct Marketing Solutions, Inc.						Provider of Omni-Channel Direct Marketing Services
									Secured Debt			(9)			2/13/2018						12.00		%	L+			11.00		%				2/13/2024			4,705			4,644			4,698
									Preferred Stock			(8)			2/13/2018			2,100																					2,100			4,590
																																							6,744			9,288
Flame King Holdings, LLC						Propane Tank and Accessories Distributor
									Secured Debt			(9)			10/29/2021						7.50		%	L+			6.50		%				10/31/2026			1,600			1,581			1,581
									Secured Debt			(9)			10/29/2021						12.00		%	L+			11.00		%				10/31/2026			5,300			5,145			5,145
									Preferred Equity						10/29/2021			2,340																					2,600			2,600
																																							9,326			9,326
Freeport Financial Funds			(12) (13)			Investment Partnership
									LP Interests (Freeport First Lien Loan Fund III LP)			(8) (24)			7/31/2015			6.0		%																			7,629			7,231
Gamber-Johnson Holdings, LLC						Manufacturer of Ruggedized Computer Mounting Systems
									Secured Debt			(9)			6/24/2016						9.50		%	L+			7.50		%				1/1/2025			5,400			5,382			5,400
									Member Units			(8)			6/24/2016			2,261																					4,423			12,430
																																							9,805			17,830
GFG Group, LLC.						Grower and Distributor of a Variety of Plants and Products to Other Wholesalers, Retailers and Garden Centers
									Secured Debt						3/31/2021						12.00		%										3/31/2026			3,136			3,053			3,136
									Preferred Member Units			(8)			3/31/2021			56																					1,225			1,750
																																							4,278			4,886
Gulf Publishing Holdings, LLC						Energy Industry Focused Media and Publishing
									Secured Debt			(9) (17)			9/29/2017						10.50		%	L+			9.50		%	5.25		%	9/30/2020			64			64			64
									Secured Debt			(17)			4/29/2016						12.50		%							6.25		%	4/29/2021			3,391			3,391			2,429
									Member Units						4/29/2016			920																					920			—
																																							4,375			2,493
Harris Preston Fund Investments			(12) (13)			Investment Partnership
									LP Interests (HPEP 3, L.P.)			(24)			8/9/2017			8.2		%																			3,193			4,712
Kickhaefer Manufacturing Company, LLC						Precision Metal Parts Manufacturing

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2021

(dollars in thousands)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
									Secured Debt						10/31/2018						11.50		%										10/31/2023			5,104			5,040			5,040
									Member Units						10/31/2018			145																					3,060			3,080
									Secured Debt						10/31/2018						9.00		%										10/31/2048			979			970			970
									Member Units			(8) (23)			10/31/2018			200																					248			615
																																							9,318			9,705
Market Force Information, LLC						Provider of Customer Experience Management Services
									Secured Debt			(14)			7/28/2017						12.00		%							12.00		%	7/28/2023			6,520			6,463			2,234
									Member Units						7/28/2017			185,980																					4,160			—
																																							10,623			2,234
MH Corbin Holding LLC						Manufacturer and Distributor of Traffic Safety Products
									Secured Debt						8/31/2015						13.00		%										3/31/2022			2,063			2,061			1,484
									Preferred Member Units						3/15/2019			16,500																					1,100			—
									Preferred Member Units						9/1/2015			1,000																					1,500			—
																																							4,661			1,484
Mystic Logistics Holdings, LLC						Logistics and Distribution Services Provider for Large Volume Mailers
									Secured Debt						8/18/2014						12.00		%										1/17/2022			1,595			1,594			1,595
									Common Stock			(8)			8/18/2014			1,468																					680			2,210
																																							2,274			3,805
NexRev LLC						Provider of Energy Efficiency Products & Services
									Secured Debt						2/28/2018						11.00		%										2/28/2023			4,054			4,031			3,510
									Preferred Member Units			(8)			2/28/2018			21,600,000																					1,720			670
																																							5,751			4,180
NuStep, LLC						Designer, Manufacturer and Distributor of Fitness Equipment
									Secured Debt			(9)			1/31/2017						7.50		%	L+			6.50		%				1/31/2025			430			430			430
									Secured Debt						1/31/2017						11.00		%										1/31/2025			4,310			4,308			4,310
									Preferred Member Units						1/31/2017			102																					2,550			3,380
																																							7,288			8,120
Oneliance, LLC						Construction Cleaning Company
									Secured Debt			(9)			8/6/2021						12.00		%	L+			11.00		%				8/6/2026			1,400			1,374			1,374
									Preferred Stock						8/6/2021			264																					264			264
																																							1,638			1,638
Orttech Holdings, LLC						Distributor of Industrial Clutches, Brakes and Other Components
									Secured Debt			(9)			7/30/2021						12.00		%	L+			11.00		%				7/31/2026			6,094			5,978			5,978
									Preferred Stock			(8) (23)			7/30/2021			2,500																					2,500			2,500

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2021

(dollars in thousands)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
																																							8,478			8,478
SI East, LLC						Rigid Industrial Packaging Manufacturing
									Secured Debt						8/31/2018						10.25		%										8/31/2023			21,950			21,892			21,950
									Preferred Member Units			(8)			8/31/2018			52																					406			3,860
																																							22,298			25,810
Sonic Systems International, LLC			(10)			Nuclear Power Staffing Services
									Secured Debt			(9)			8/20/2021						8.50		%	L+			7.50		%				8/20/2026			14,000			13,738			13,738
									Common Stock						8/20/2021			9,191																					1,250			1,250
																																							14,988			14,988
Tedder Industries, LLC						Manufacturer of Firearm Holsters and Accessories
									Secured Debt						8/31/2018						12.00		%										8/31/2022			4,060			4,013			4,013
									Preferred Member Units						8/31/2018			126																					2,145			2,145
																																							6,158			6,158
Trantech Radiator Topco, LLC						Transformer Cooling Products and Services
									Secured Debt						5/31/2019						12.00		%										5/31/2024			2,180			2,137			2,174
									Common Stock			(8)			5/31/2019			154																					1,164			2,160
																																							3,301			4,334
VVS Holdco LLC						Omnichannel Retailer of Animal Health Products
									Secured Debt			(9) (23)			12/1/2021						7.00		%	L+			6.00		%				12/1/2026			300			292			292
									Secured Debt			(23)			12/1/2021						11.50		%										12/1/2026			7,600			7,375			7,375
									Preferred Equity			(23)			12/1/2021			2,960																					2,960			2,960
																																							10,627			10,627
Subtotal Affiliate Investments (38.2% of net assets at fair value)																																							$	209,971		$	234,158
Non-Control/Non-Affiliate Investments (7)
AAC Holdings, Inc.			(11)			Substance Abuse Treatment Service Provider
									Secured Debt						12/11/2020						18.00		%							8.00		%	6/25/2025			$	3,636		$	3,342		$	3,491
									Common Stock						12/11/2020			593,927																					3,148			2,079
									Warrants			(27)			12/11/2020			197,717															12/11/2025						—			692
																																							6,490			6,262
ADS Tactical, Inc.			(11)			Value-Added Logistics and Supply Chain Provider to the Defense Industry
									Secured Debt			(9)			3/29/2021						6.75		%	L+			5.75		%				3/19/2026			9,625			9,450			9,571
American Health Staffing Group, Inc.			(10)			Healthcare Temporary Staffing
									Secured Debt			(9)			11/19/2021						7.00		%	L+			6.00		%				11/19/2026			8,833			8,736			8,736

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2021

(dollars in thousands)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
American Nuts, LLC			(10)			Roaster, Mixer and Packager of Bulk Nuts and Seeds
									Secured Debt			(9)			12/21/2018						9.00		%	L+			8.00		%				4/10/2025			12,016			11,892			12,016
American Teleconferencing Services, Ltd.			(11)			Provider of Audio Conferencing and Video Collaboration Solutions
									Secured Debt			(9) (14) (17)			9/17/2021						7.50		%	L+			6.50		%				9/9/2021			2,425			2,375			73
									Secured Debt			(9) (14)			5/19/2016						7.50		%	L+			6.50		%				6/28/2023			11,693			11,451			351
																																							13,826			424
ArborWorks, LLC			(10)			Vegetation Management Services
									Secured Debt			(9)			11/9/2021						8.00		%	L+			7.00		%				11/9/2026			17,317			16,929			16,929
									Common Equity						11/9/2021			124																					124			124
																																							17,053			17,053
AVEX Aviation Holdings, LLC			(10)			Specialty Aircraft Dealer
									Secured Debt			(9)			12/15/2021						7.50		%	L+			6.50		%				12/15/2026			1,850			1,806			1,806
									Common Equity						12/15/2021			50																					50			50
																																							1,856			1,856
BBB Tank Services, LLC						Maintenance, Repair and Construction Services to the Above-Ground Storage Tank Market
									Unsecured Debt			(9) (17)			4/8/2016						12.00		%	L+			11.00		%				4/8/2021			1,200			1,200			625
									Preferred Stock (non-voting)						12/17/2018						15.00		%							15.00		%							41			—
									Member Units						4/8/2016			200,000																					200			—
																																							1,441			625
Berry Aviation, Inc.			(10)			Charter Airline Services
									Secured Debt						7/6/2018						12.00		%							1.50		%	1/6/2024			4,688			4,658			4,688
									Preferred Member Units			(8) (23)			11/12/2019			122,416			16.00		%							16.00		%							168			208
									Preferred Member Units			(23)			7/6/2018			1,548,387			8.00		%							8.00		%							1,671			2,487
																																							6,497			7,383
Binswanger Enterprises, LLC			(10)			Glass Repair and Installation Service Provider
									Secured Debt			(9)			3/10/2017						9.50		%	L+			8.50		%				3/10/2023			12,001			11,977			12,001
									Member Units						3/10/2017			1,050,000																					1,050			730
																																							13,027			12,731
Bluestem Brands, Inc.			(11)			Multi-Channel Retailer of General Merchandise
									Secured Debt			(9)			8/28/2020						10.00		%	L+			8.50		%				8/28/2025			5,745			5,745			5,724
									Common Stock			(8)			10/1/2020			700,446																					—			1,471
																																							5,745			7,195

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2021

(dollars in thousands)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
Boccella Precast Products LLC						Manufacturer of Precast Hollow Core Concrete
									Secured Debt						9/23/2021						10.00		%										2/28/2027			80			80			80
									Member Units			(8)			6/30/2017			540,000																					564			1,207
																																							644			1,287
Brightwood Capital Fund Investments			(12) (13)			Investment Partnership
									LP Interests (Brightwood Capital Fund III, LP)			(8) (24)			7/21/2014			0.5		%																			2,495			1,423
									LP Interests (Brightwood Capital Fund IV, LP)			(8) (24)			10/26/2016			1.2		%																			8,737			8,788
																																							11,232			10,211
Buca C, LLC						Casual Restaurant Group
									Secured Debt			(9) (17)			6/30/2015						10.25		%	L+			9.25		%				6/30/2020			13,164			13,164			9,705
									Preferred Member Units						6/30/2015			4			6.00		%							6.00		%							3,040			—
																																							16,204			9,705
Burning Glass Intermediate Holding Company, Inc.			(10)			Provider of Skills-Based Labor Market Analytics
									Secured Debt			(9)			6/14/2021						6.00		%	L+			5.00		%				6/10/2026			310			285			285
									Secured Debt			(9)			6/14/2021						6.00		%	L+			5.00		%				6/10/2028			13,389			13,168			13,290
																																							13,453			13,575
Cadence Aerospace LLC			(10)			Aerostructure Manufacturing
									Secured Debt			(9)			11/14/2017						9.28		%							0.22		%	11/14/2023			20,276			20,174			19,017
CAI Software LLC						Provider of Specialized Enterprise Resource Planning Software
									Preferred Equity						12/13/2021			379,338																					379			379
									Preferred Equity						12/13/2021			126,446																					—			—
																																							379			379
Camin Cargo Control, Inc.			(11)			Provider of Mission Critical Inspection, Testing and Fuel Treatment Services
									Secured Debt			(9)			6/14/2021						7.50		%	L+			6.50		%				6/4/2026			7,960			7,888			7,920
Career Team Holdings, LLC						Provider of Workforce Training and Career Development Services
									Secured Debt						12/17/2021						12.50		%										12/17/2026			2,250			2,180			2,180
									Class A Common Units						12/17/2021			50,000																					500			500
																																							2,680			2,680
Cenveo Corporation			(11)			Provider of Digital Marketing Agency Services

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2021

(dollars in thousands)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
									Common Stock						9/7/2018			253,194																					4,848			2,236
Chisholm Energy Holdings, LLC			(10)			Oil & Gas Exploration & Production
									Secured Debt			(9)			5/15/2019						7.75		%	L+			6.25		%				5/15/2026			2,857			2,817			2,663
Clarius BIGS, LLC			(10)			Prints & Advertising Film Financing
									Secured Debt			(14) (17)			9/23/2014						15.00		%							15.00		%	1/5/2015			2,772			2,431			33
Classic H&G Holdings, LLC						Provider of Engineered Packaging Solutions
									Secured Debt			(9)			3/12/2020						7.00		%	L+			6.00		%				3/12/2025			1,000			997			1,000
									Secured Debt						3/12/2020						8.00		%										3/12/2025			4,819			4,717			4,819
									Preferred Member Units			(8)			3/12/2020			39																					1,440			3,810
																																							7,154			9,629
Computer Data Source, LLC			(10)			Third Party Maintenance Provider to the Data Center Ecosystem
									Secured Debt			(9)			8/6/2021						8.50		%	L+			7.50		%				8/6/2026			18,011			17,639			17,639
Construction Supply Investments, LLC			(10)			Distribution Platform of Specialty Construction Materials to Professional Concrete and Masonry Contractors
									Member Units			(8)			12/29/2016			861,618																					3,335			14,640
DMA Industries, LLC						Distributor of aftermarket ride control products
									Secured Debt						11/19/2021						12.00		%										11/19/2026			5,300			5,196			5,196
									Preferred Equity						11/19/2021			1,486																					1,486			1,486
																																							6,682			6,682
DTE Enterprises, LLC			(10)			Industrial Powertrain Repair and Services
									Secured Debt			(9)			4/13/2018						9.50		%	L+			8.00		%				4/13/2023			9,369			9,311			8,926
									Class AA Preferred Member Units (non-voting)			(8)			4/13/2018						10.00		%							10.00		%							1,051			1,051
									Class A Preferred Member Units						4/13/2018			776,316			8.00		%							8.00		%							776			320
																																							11,138			10,297
Dynamic Communities, LLC			(10)			Developer of Business Events and Online Community Groups
									Secured Debt			(9)			7/17/2018						9.50		%	L+			8.50		%				7/17/2023			5,681			5,641			5,570

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2021

(dollars in thousands)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
EPIC Y-Grade Services, LP			(11)			NGL Transportation & Storage
									Secured Debt			(9)			6/22/2018						7.00		%	L+			6.00		%				6/30/2027			6,892			6,814			5,861
Event Holdco, LLC			(10)			Event and Learning Management Software for Healthcare Organizations and Systems
									Secured Debt			(9) (23)			12/22/2021						8.00		%	L+			7.00		%				12/22/2026			3,692			3,653			3,653
Flip Electronics LLC			(10)			Distributor of Hard-to-Find and Obsolete Electronic Components
									Secured Debt			(9)			1/4/2021						9.09		%	L+			8.09		%				1/2/2026			6,000			5,891			5,874
GoWireless Holdings, Inc.			(11)			Provider of Wireless Telecommunications Carrier Services
									Secured Debt			(9)			1/10/2018						7.50		%	L+			6.50		%				12/22/2024			15,018			14,953			15,052
GS Operating, LLC			(10)			Distributor of Industrial and Specialty Parts
									Secured Debt			(9)			2/24/2020						8.00		%	L+			6.50		%				2/24/2025			12,193			11,960			12,193
Hawk Ridge Systems, LLC			(13)			Value-Added Reseller of Engineering Design and Manufacturing Solutions
									Secured Debt			(9)			12/2/2016						7.00		%	L+			6.00		%				1/15/2026			646			646			646
									Secured Debt						12/2/2016						8.00		%										1/15/2026			7,450			7,388			7,450
									Preferred Member Units			(8)			12/2/2016			56																					713			3,670
									Preferred Member Units			(23)			12/2/2016			56																					38			190
																																							8,785			11,956
HDC/HW Intermediate Holdings			(10)			Managed Services and Hosting Provider
									Secured Debt			(9)			12/21/2018						8.50		%	L+			7.50		%				12/21/2023			1,934			1,916			1,715
Hybrid Promotions, LLC			(10)			Wholesaler of Licensed, Branded and Private Label Apparel
									Secured Debt			(9)			6/30/2021						9.25		%	L+			8.25		%				6/30/2026			7,875			7,730			7,809

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2021

(dollars in thousands)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
IG Parent Corporation			(11)			Software Engineering
									Secured Debt			(9)			7/30/2021						6.75		%	L+			5.75		%				7/30/2026			6,394			6,278			6,280
Implus Footcare, LLC			(10)			Provider of Footwear and Related Accessories
									Secured Debt			(9)			6/1/2017						8.75		%	L+			7.75		%				4/30/2024			17,093			17,080			16,216
Independent Pet Partners Intermediate Holdings, LLC			(10)			Omnichannel Retailer of Specialty Pet Products
									Secured Debt						12/10/2020						6.00		%							6.00		%	11/20/2023			10,415			9,795			9,815
									Preferred Stock (non-voting)						12/10/2020						6.00		%							6.00		%							2,470			3,310
									Preferred Stock (non-voting)						12/10/2020																								—			—
									Member Units						11/20/2018			1,191,667																					1,192			—
																																							13,457			13,125
Industrial Services Acquisition, LLC			(10)			Industrial Cleaning Services
									Secured Debt			(9)			8/13/2021						7.75		%	L+			6.75		%				8/13/2026			18,406			18,033			18,033
									Preferred Member Units			(8) (23)			1/31/2018			336			10.00		%							10.00		%							281			383
									Preferred Member Units			(8) (23)			5/17/2019			187			20.00		%							20.00		%							190			231
									Member Units			(23)			6/17/2016			2,100																					2,100			1,710
																																							20,604			20,357
Infolinks Media Buyco, LLC			(10)			Exclusive Placement Provider to the Advertising Ecosystem
									Secured Debt			(9)			11/1/2021						7.00		%	L+			6.00		%				11/1/2026			10,850			10,578			10,578
Interface Security Systems, L.L.C			(10)			Commercial Security & Alarm Services
									Secured Debt			(9)			12/9/2021						11.75		%	L+			10.00		%				8/7/2023			343			343			343
									Secured Debt			(9) (14)			8/7/2019						9.75		%	L+			7.00		%	1.00		%	8/7/2023			7,334			7,249			5,248
																																							7,592			5,591
Intermedia Holdings, Inc.			(11)			Unified Communications as a Service
									Secured Debt			(9)			8/3/2018						7.00		%	L+			6.00		%				7/19/2025			5,659			5,649			5,632
Invincible Boat Company, LLC.			(10)			Manufacturer of Sport Fishing Boats
									Secured Debt			(9)			8/28/2019						8.00		%	L+			6.50		%				8/28/2025			17,770			17,624			17,770
INW Manufacturing, LLC			(11)			Manufacturer of Nutrition and Wellness Products
									Secured Debt			(9)			5/19/2021						6.50		%	L+			5.75		%				3/25/2027			7,359			7,155			7,212

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2021

(dollars in thousands)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
Iron-Main Investments, LLC						Consumer Reporting Agency Providing Employment Background Checks and Drug Testing
									Secured Debt						8/3/2021						13.00		%										8/1/2026			1,150			1,118			1,118
									Secured Debt						9/1/2021						12.50		%										9/1/2026			800			777			777
									Secured Debt						8/3/2021						12.50		%										11/30/2026			5,000			4,853			4,853
									Secured Debt						8/3/2021						12.50		%							12.50		%	3/31/2022			2,212			2,148			2,148
									Common Stock						8/3/2021			44,944																					449			449
																																							9,345			9,345
Isagenix International, LLC			(11)			Direct Marketer of Health & Wellness Products
									Secured Debt			(9)			6/21/2018						6.75		%	L+			5.75		%				6/14/2025			5,158			5,129			3,865
Jackmont Hospitality, Inc.			(10)			Franchisee of Casual Dining Restaurants
									Secured Debt			(9)			5/26/2015						8.00		%	L+			7.00		%				11/4/2024			4,200			4,200			4,200
									Preferred Equity						11/8/2021			5,653,333																					624			628
																																							4,824			4,828
Joerns Healthcare, LLC			(11)			Manufacturer and Distributor of Health Care Equipment & Supplies
									Secured Debt			(9)			8/21/2019						7.00		%	L+			6.00		%				8/21/2024			3,351			3,320			3,039
									Secured Debt						11/15/2021						15.00		%							15.00		%	11/8/2022			862			862			862
									Common Stock						8/21/2019			392,514																					3,678			—
																																							7,860			3,901
Johnson Downie Opco, LLC						Executive Search Services
									Secured Debt			(9)			12/10/2021						13.00		%	L+			11.50		%				12/10/2026			1,275			1,246			1,246
									Preferred Equity						12/10/2021			350																					350			350
																																							1,596			1,596
JTI Electrical & Mechanical, LLC			(10)			Electrical, Mechanical and Automation Services
									Secured Debt			(9)			12/22/2021						7.00		%	L+			6.00		%				12/22/2026			3,158			3,081			3,081
									Common Equity						12/22/2021			140,351																					140			140
																																							3,221			3,221
KMS, LLC			(10)			Wholesaler of Closeout and Value-priced Products
									Secured Debt			(9)			10/4/2021						8.25		%	L+			7.25		%				10/4/2026			9,476			9,242			9,242
Knight Energy Services LLC			(11)			Oil and Gas Equipment & Services
									Secured Debt						1/9/2015						8.50		%							8.50		%	2/9/2024			961			961			677
									Common Stock						11/14/2018			25,692																					1,843			—
																																							2,804			677
Laredo Energy, LLC			(10)			Oil & Gas Exploration & Production

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2021

(dollars in thousands)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
									Member Units						5/4/2020			1,155,952																					11,560			9,659
LaserAway Intermediate Holdings II, LLC			(11)			Aesthetic Dermatology Service Provider
									Secured Debt			(9)			10/18/2021						6.50		%	L+			5.75		%				10/14/2027			4,130			4,050			4,115
Lightbox Holdings, L.P.			(11)			Provider of Commercial Real Estate Software
									Secured Debt						5/23/2019						5.22		%	L+			5.00		%				5/9/2026			5,886			5,831			5,812
LL Management, Inc.			(10)			Medical Transportation Service Provider
									Secured Debt			(9)			5/2/2019						8.25		%	L+			7.25		%				9/25/2023			14,332			14,256			14,332
LLFlex, LLC			(10)			Provider of Metal-Based Laminates
									Secured Debt			(9)			8/16/2021						10.00		%	L+			9.00		%				8/16/2026			4,988			4,882			4,882
Logix Acquisition Company, LLC			(10)			Competitive Local Exchange Carrier
									Secured Debt			(9)			1/8/2018						6.75		%	L+			5.75		%				12/22/2024			12,484			12,438			11,798
Mac Lean-Fogg Company			(10)			Manufacturer and Supplier for Auto and Power Markets
									Secured Debt			(9)			4/22/2019						5.88		%	L+			5.25		%				12/22/2025			7,301			7,266			7,301
									Preferred Stock						10/1/2019						13.75		%							9.25		%							760			760
																																							8,026			8,061
Mako Steel, LP			(10)			Self-Storage Design & Construction
									Secured Debt			(9)			3/15/2021						8.00		%	L+			7.25		%				3/13/2026			19,544			19,175			19,544
MB2 Dental Solutions, LLC			(11)			Dental Partnership Organization
									Secured Debt			(9)			1/28/2021						7.00		%	L+			6.00		%				1/29/2027			11,697			11,462			11,697
Mills Fleet Farm Group, LLC			(10)			Omnichannel Retailer of Work, Farm and Lifestyle Merchandise
									Secured Debt			(9)			10/24/2018						7.25		%	L+			6.25		%				10/24/2024			17,781			17,555			17,781
NinjaTrader, LLC			(10)			Operator of Futures Trading Platform

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2021

(dollars in thousands)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
									Secured Debt			(9)			12/18/2019						7.25		%	L+			6.25		%				12/18/2024			16,875			16,602			16,840
NNE Partners, LLC			(10)			Oil & Gas Exploration & Production
									Secured Debt						3/2/2017						9.37		%	L+			4.75		%	4.50		%	12/31/2023			21,607			21,599			20,188
NTM Acquisition Corp.			(11)			Provider of B2B Travel Information Content
									Secured Debt			(9)			7/12/2016						8.25		%	L+			6.25		%	1.00		%	6/7/2024			4,258			4,254			4,216
NWN Corporation			(10)			Value Added Reseller and Provider of Managed Services to a Diverse Set of Industries
									Secured Debt			(9)			5/7/2021						7.50		%	L+			6.50		%				5/7/2026			22,162			21,687			21,786
OVG Business Services, LLC			(10)			Venue Management Services
									Secured Debt			(9)			11/29/2021						7.25		%	L+			6.25		%				11/19/2028			17,500			17,327			17,327
RA Outdoors LLC			(10)			Software Solutions Provider for Outdoor Activity Management
									Secured Debt			(9)			4/8/2021						7.75		%	L+			6.75		%				4/8/2026			18,719			18,544			17,731
Research Now Group, Inc. and Survey Sampling International, LLC			(11)			Provider of Outsourced Online Surveying
									Secured Debt			(9)			12/29/2017						6.50		%	L+			5.50		%				12/20/2024			9,897			9,897			9,787
RM Bidder, LLC			(10)			Scripted and Unscripted TV and
						Digital Programming Provider
									Member Units						11/12/2015			1,854																					31			18
									Warrants			(26)			11/12/2015																		10/20/2025						284			—
																																							315			18
Robbins Bros. Jewelry, Inc.						Bridal Jewelry Retailer
									Secured Debt			(9)			12/15/2021						12.00		%	L+			11.00		%				12/15/2026			4,040			3,950			3,950
									Preferred Equity						12/15/2021			1,230																					1,230			1,230
																																							5,180			5,180
Roof Opco, LLC			(10)			Residential Re-Roofing/Repair
									Secured Debt			(9)			8/27/2021						7.00		%	L+			6.00		%				8/27/2026			3,500			3,343			3,343

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2021

(dollars in thousands)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
Rug Doctor, LLC.			(10)			Carpet Cleaning Products and Machinery
									Secured Debt			(9)			7/16/2021						7.25		%	L+			6.25		%				11/16/2024			12,367			12,217			12,099
Salient Partners L.P.			(11)			Provider of Asset Management Services
									Secured Debt			(9)			8/31/2018						7.00		%	L+			6.00		%				10/30/2022			6,251			6,292			4,063
									Secured Debt			(9)			9/30/2021						6.00		%	L+			5.00		%				10/30/2022			1,250			1,250			2,435
																																							7,542			6,498
Savers, Inc.			(11)			For-Profit Thrift Retailer
									Secured Debt			(9)			5/14/2021						6.25		%	L+			5.50		%				4/26/2028			4,372			4,331			4,366
SIB Holdings, LLC			(10)			Provider of Cost Reduction Services
									Secured Debt			(9)			10/29/2021						7.00		%	L+			6.00		%				10/29/2026			7,853			7,661			7,674
									Common Equity						10/29/2021			119,048																					250			250
																																							7,911			7,924
Slick Innovations, LLC						Text Message Marketing Platform
									Secured Debt						9/13/2018						13.00		%										9/13/2023			1,330			1,211			1,330
									Common Stock						9/13/2018			17,500																					175			380
									Warrants			(27)			9/13/2018			4,521															9/13/2028						45			100
																																							1,431			1,810
South Coast Terminals Holdings, LLC			(10)			Specialty Toll Chemical Manufacturer
									Secured Debt			(9)			12/10/2021						7.25		%	L+			6.25		%				12/13/2026			3,558			3,480			3,480
									Common Equity						12/10/2021			60,606																					61			61
																																							3,541			3,541
Student Resource Center, LLC			(10)			Higher Education Services
									Secured Debt			(9)			6/25/2021						9.00		%	L+			8.00		%				6/25/2026			12,188			11,949			12,029
Tex Tech Tennis, LLC			(10)			Sporting Goods & Textiles
									Common Stock			(23)			7/7/2021			1,000,000																					1,000			1,000
The Affiliati Network, LLC						Performance Marketing Solutions
									Secured Debt						8/9/2021						7.00		%										8/9/2026			70			65			65
									Secured Debt						8/9/2021						11.83		%										8/9/2026			3,340			3,270			3,270
									Preferred Stock			(8)			8/9/2021			320,000																					1,600			1,600
																																							4,935			4,935
U.S. TelePacific Corp.			(11)			Provider of Communications and Managed Services

41

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2021

(dollars in thousands)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
									Secured Debt			(9)			5/17/2017						7.00		%	L+			6.00		%				5/2/2023			12,500			12,400			9,449
USA DeBusk LLC			(10)			Provider of Industrial Cleaning Services
									Secured Debt			(9)			10/22/2019						6.75		%	L+			5.75		%				9/8/2026			19,950			19,692			19,950
Vida Capital, Inc			(11)			Alternative Asset Manager
									Secured Debt						10/10/2019						6.10		%	L+			6.00		%				10/1/2026			6,825			6,752			6,330
Vistar Media, Inc.			(10)			Operator of Digital Out-of-Home Advertising Platform
									Preferred Stock						4/3/2019			70,207																					767			1,720
Volusion, LLC						Provider of Online Software-as-a-Service eCommerce Solutions
									Secured Debt			(17)			1/26/2015						11.50		%										1/26/2020			7,472			7,472			7,472
									Unsecured Convertible Debt						5/16/2018						8.00		%										11/16/2023			175			175			175
									Preferred Member Units						1/26/2015			2,090,001																					6,000			2,570
									Warrants			(27)			1/26/2015			784,867															1/26/2025						1,104			—
																																							14,751			10,217
VORTEQ Coil Finishers, LLC			(10)			Specialty Coating of Aluminum and Light-Gauge Steel
									Secured Debt			(9)			11/30/2021						8.50		%	L+			7.50		%				11/30/2026			19,231			18,852			18,852
									Common Equity						11/30/2021			769,231																					770			769
																																							19,622			19,621
Wall Street Prep, Inc.			(10)			Financial Training Services
									Secured Debt			(9)			7/19/2021						8.00		%	L+			7.00		%				7/19/2026			5,466			5,355			5,355
									Common Stock						7/19/2021			500,000																					500			500
																																							5,855			5,855
Watterson Brands, LLC			(10)			Facility Management Services
									Secured Debt			(9)			12/17/2021						7.25		%	L+			6.25		%				12/17/2026			2,337			2,278			2,278
Winter Services LLC			(10)			Provider of Snow Removal and Ice Management Services
									Secured Debt			(9)			11/19/2021						8.00		%	L+			7.00		%				11/19/2026			12,847			12,494			12,548

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2021

(dollars in thousands)

Portfolio Company (1) (20)						Business Description			Type of Investment (2) (3) (15)						Investment Date (22)			Shares/Units			Total Rate			Reference Rate and Spread (25)						PIK Rate (19)			Maturity Date			Principal (4)			Cost (4)			Fair Value (18)
Xenon Arc, Inc.			(10)			Tech-enabled Distribution Services to Chemicals and Food Ingredients Primary Producers
									Secured Debt			(9)			12/17/2021						6.75		%	L+			6.00		%				12/17/2026			2,400			2,320			2,320
YS Garments, LLC			(11)			Designer and Provider of Branded Activewear
									Secured Debt			(9)			8/22/2018						6.50		%	L+			5.50		%				8/9/2024			6,470			6,438			6,244
Subtotal Non-Control/Non-Affiliate Investments (129.9% of net assets at fair value)																																							$	828,301		$	796,395
Total Portfolio Investments, December 31, 2021 (175.7% of net assets at fair value)																																							$	1,067,175		$	1,077,136
Short-Term Investments (16)
Fidelity Institutional Money Market Funds (21)									Prime Money Market Portfolio																														$	4,881		$	4,881
US Bank Money Market Account (21)																																							10,566			10,566
Total Short-Term Investments																																							$	15,447		$	15,447

___________________________________________________

(1)All investments are Lower Middle Market portfolio investments, unless otherwise noted. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Lower Middle Market portfolio investments. All of the Company’s investments, unless otherwise noted, are encumbered as security for one of the Company’s Credit Facilities.

(2)Debt investments are income producing, unless otherwise noted by footnote (14), as described below. Equity and warrants are non-income producing, unless otherwise noted by footnote (8), as described below.

(3)See Note C—Fair Value Hierarchy for Investments—Portfolio Composition and Schedule 12-14 for a summary of geographic location of portfolio companies.

(4)Principal is net of repayments. Cost is net of repayments and accumulated unearned income.

(5)Control investments are defined by the 1940 Act as investments in which more than 25% of the voting securities are owned or where the ability to nominate greater than 50% of the board representation is maintained.

(6)Affiliate investments are defined by the 1940 Act as investments in which between 5% and 25% (inclusive) of the voting securities are owned and the investments are not classified as Control investments.

(7)Non-Control/Non-Affiliate investments are defined by the 1940 Act as investments that are neither Control investments nor Affiliate investments.

(8)Income producing through dividends or distributions.

(9)Index based floating interest rate is subject to contractual minimum interest rate. As noted in this schedule, 79% of the loans (based on the par amount) contain LIBOR floors which range between 0.63% and 2.00%, with a weighted-average LIBOR floor of 1.04%.

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2021

(dollars in thousands)

(10)Private Loan portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Private Loan portfolio investments.

(11)Middle Market portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Middle Market portfolio investments.

(12)Other Portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Other Portfolio investments.

(13)Investment is not a qualifying asset as defined under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets.

(14)Non-accrual and non-income producing investment.

(15)All of the Company’s portfolio investments are generally subject to restrictions on resale as “restricted securities.”

(16)Short-term investments represent an investment in a fund that invests in highly liquid investments with average original maturity dates of three months or less. These short-term investments are included as Cash and cash equivalents on the Consolidated Balance Sheets.

(17)Maturity date is under on-going negotiations with the portfolio company and other lenders, if applicable.

(18)Investment fair value was determined using significant unobservable inputs, unless otherwise noted. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for further discussion.

(19)Investments may have a portion, or all, of their income received from Paid-in-Kind ("PIK") interest or dividends. PIK interest income and cumulative dividend income represent income not paid currently in cash. The difference between the Total Rate and PIK Rate represents the cash rate as of December 31, 2021.

(20)All portfolio company headquarters are based in the United States, unless otherwise noted.

(21)Effective yield as of December 31, 2021 was approximately 0.005% on the US Bank Money Market Account and 0.01% on the Fidelity Institutional Money Market Funds.

(22)Investment date represents the date of initial investment in the security position.

(23)Shares/Units represent ownership in a related Real Estate or HoldCo entity.

(24)Investment is not unitized. Presentation is made in percent of fully diluted ownership unless otherwise indicated.

(25)A majority of the variable rate loans in the Company’s investment portfolio bear interest at a rate that may be determined by reference to either LIBOR (“L”) or an alternate base rate (commonly based on the Federal Funds Rate or the Prime rate (“P”)), which typically resets every one, three, or six months at the borrower’s option.

(26)Warrants are presented in equivalent units with a strike price of $14.28 per unit.

(27)Warrants are presented in equivalent shares/units with a strike price of $0.01 per share/unit.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements

(Unaudited)

NOTE A—ORGANIZATION AND BASIS OF PRESENTATION

1.Organization

MSC Income Fund, Inc. (“MSC Income Fund”) is a principal investment firm primarily focused on providing debt capital to middle market (“Middle Market”) companies and customized debt and equity financing to lower middle market (“LMM”) companies. The portfolio investments of MSC Income Fund and its consolidated subsidiaries are typically made to support management buyouts, recapitalizations, growth financings, refinancings and acquisitions of companies that operate in a variety of industry sectors. MSC Income Fund and its consolidated subsidiaries invest primarily in secured debt investments of Middle Market companies generally headquartered in the United States and in secured debt investments, equity investments, warrants and other securities of LMM companies based in the United States. MSC Income Fund seeks to partner with entrepreneurs, business owners and management teams and generally provides “one-stop” financing alternatives within its LMM portfolio.

MSC Income Fund was formed in November 2011 to operate as an externally managed business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). MSC Income Fund has elected to be treated for U.S. federal income tax purposes as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). As a result, MSC Income Fund generally does not pay corporate-level U.S. federal income taxes on any net ordinary taxable income or capital gains that it distributes to its stockholders.

On October 28, 2020, MSC Income Fund’s stockholders approved the appointment of MSC Adviser I, LLC (the “Adviser”), which is wholly-owned by Main Street Capital Corporation (“Main Street”), a New York Stock Exchange listed BDC, as MSC Income Fund’s investment adviser and administrator under an Investment Advisory and Administrative Services Agreement dated October 30, 2020 (the “Investment Advisory Agreement”). In such role, the Adviser has the responsibility to manage the business of MSC Income Fund, including the responsibility to identify, evaluate, negotiate and structure prospective investments, make investment and portfolio management decisions, monitor MSC Income Fund’s investment portfolio and provide ongoing administrative services.

MSC Income Fund has certain direct and indirect wholly-owned subsidiaries that have elected to be taxable entities (the “Taxable Subsidiaries”). The primary purpose of the Taxable Subsidiaries is to permit MSC Income Fund to hold equity investments in portfolio companies which are “pass-through” entities for tax purposes. MSC Income Fund also has certain direct and indirect wholly-owned subsidiaries formed for financing purposes (“Structured Subsidiaries”).

Unless otherwise noted or the context otherwise indicates, the terms “we,” “us,” “our” and the “Company” refer to MSC Income Fund and its consolidated subsidiaries, which include the Taxable Subsidiaries and the Structured Subsidiaries.

2.Basis of Presentation

The Company’s consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The Company is an investment company following accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 946, Financial Services—Investment Companies (“ASC 946”). For each of the periods presented herein, the Company’s consolidated financial statements include the accounts of MSC Income Fund and its consolidated subsidiaries. The Investment Portfolio, as used herein, refers to all of the Company’s investments in Private Loan portfolio companies, investments in LMM portfolio companies, investments in Middle Market portfolio companies and Other Portfolio investments (see Note C—Fair Value Hierarchy for Investments—Portfolio Composition—Investment Portfolio Composition for additional discussion of the Company’s Investment Portfolio and definitions for the defined terms Private Loan and Other Portfolio). The Company’s results of operations for the three and nine months ended September 30, 2022 and 2021, cash flows for the nine months ended September 30, 2022 and 2021, and financial position as of September 30, 2022 and December 31, 2021, are presented on a consolidated basis. The effects of all

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

intercompany transactions between MSC Income Fund and its consolidated subsidiaries have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements of the Company are presented in conformity with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6, 10 and 12 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with U.S. GAAP are omitted. 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, 2021. In the opinion of management, the unaudited consolidated financial results included herein contain all adjustments, consisting solely of normal recurring accruals, considered necessary for the fair presentation of financial statements for the interim periods included herein. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the operating results to be expected for the full year. Financial statements prepared on a U.S. GAAP basis require management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.

Principles of Consolidation

Under ASC 946, the Company is precluded from consolidating other entities in which the Company has equity investments, including those in which it has a controlling interest, unless the other entity is another investment company. An exception to this general principle in ASC 946 occurs if the Company holds a controlling interest in an operating company that provides all or substantially all of its services directly to the Company or to its portfolio companies. Accordingly, as noted above, the Company’s consolidated financial statements include the financial position and operating results for the Taxable Subsidiaries and its Structured Subsidiaries. The Company has determined that none of its portfolio investments qualify for this exception. Therefore, the Company’s Investment Portfolio is carried on the Consolidated Balance Sheets at fair value, as discussed further in Note B.1.—Summary of Significant Accounting Policies—Valuation of the Investment Portfolio, with any adjustments to fair value recognized as “Net Unrealized Appreciation (Depreciation)” until the investment is realized, usually upon exit, resulting in any gain or loss being recognized as a “Net Realized Gain (Loss)”, in both cases on the Consolidated Statements of Operations.

Portfolio Investment Classification

The Company classifies its Investment Portfolio in accordance with the requirements of the 1940 Act. Under the 1940 Act, (a) “Control Investments” are defined as investments in which the Company owns more than 25% of the voting securities or has rights to maintain greater than 50% of the board representation, (b) “Affiliate Investments” are defined as investments in which the Company owns between 5% and 25% (inclusive) of the voting securities and does not have rights to maintain greater than 50% of the board representation and (c) “Non-Control/Non-Affiliate Investments” are defined as investments that are neither Control Investments nor Affiliate Investments. For purposes of determining the classification of its Investment Portfolio, the Company has excluded consideration of any voting securities or board appointment rights held by Main Street and third-party investment funds advised by the Adviser.

NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.Valuation of the Investment Portfolio

The Company accounts for its Investment Portfolio at fair value. As a result, the Company follows the provisions of ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. ASC 820 requires the Company to assume that the portfolio investment is to be sold in the principal market to independent market participants, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal market that are independent, knowledgeable and willing and able to transact.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

The Company’s portfolio strategy calls for it to invest primarily in debt securities issued by Middle Market companies and illiquid debt and equity securities issued by privately held, LMM companies. The Middle Market companies in which the Company invests are generally larger in size and can be more liquid than the LMM companies. The Company categorizes some of its investments in Middle Market companies and LMM companies as Private Loan portfolio investments, which are primarily debt securities in privately held companies that have been originated directly by Main Street or through strategic relationships with other investment funds on a collaborative basis, and are often referred to in the debt markets as “club deals.” Private Loan investments are made in companies that are consistent with the size of companies the Company invests in through its Middle Market portfolio and LMM portfolio. The Company’s portfolio also includes Other Portfolio investments which primarily consist of investments that are not consistent with the typical profiles for its Private Loan portfolio investments, LMM portfolio investments or Middle Market portfolio investments, including investments which may be managed by third parties. The Company’s portfolio may also include short-term portfolio investments that are atypical of the Company’s Private Loan, LMM and Middle Market portfolio investments in that they are intended to be a short-term deployment of capital and are more liquid than investments within the other portfolios. The Company’s portfolio investments may be subject to restrictions on resale.

Private Loan investments may include investments which have no established trading market or have established markets that are not active. LMM investments and Other Portfolio investments generally have no established trading market, while Middle Market and short-term portfolio investments generally have established trading markets that are not active. The Company determines in good faith the fair value of its Investment Portfolio pursuant to a valuation policy in accordance with ASC 820, with such valuation process approved by its Board of Directors and in accordance with the 1940 Act. The Company’s valuation policies and processes are intended to provide a consistent basis for determining the fair value of the Company’s Investment Portfolio.

For Private Loan and Middle Market portfolio investments in debt securities for which it has determined that third-party quotes or other independent pricing are not available or appropriate, the Company generally estimates the fair value based on the assumptions that it believes hypothetical market participants would use to value the investment in a current hypothetical sale using a yield-to-maturity model (“Yield-to-Maturity”) valuation method. For LMM portfolio investments, the Company generally reviews external events, including private mergers, sales and acquisitions involving comparable companies, and includes these events in the valuation process by using an enterprise value waterfall methodology (“Waterfall”) for its LMM equity investments and an income approach using a Yield-to-Maturity valuation method for its LMM debt investments. For Middle Market portfolio investments in debt securities for which it has determined that third party quotes or other independent prices are available, the Company primarily uses quoted prices in the valuation process. The Company determines the appropriateness of the use of third-party broker quotes, if any, in determining fair value based on its understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer, the depth and consistency of broker quotes and the correlation of changes in broker quotes with underlying performance of the portfolio company and other market indices. For its Other Portfolio equity investments, the Company generally calculates the fair value of the investment primarily based on the net asset value (“NAV”) of the fund and adjusts the fair value for other factors deemed relevant that would affect the fair value of the investment. All of the valuation approaches for the Company’s portfolio investments estimate the value of the investment as if the Company was to sell, or exit, the investment as of the measurement date.

These valuation approaches consider the value associated with the Company’s ability to control the capital structure of the portfolio company, as well as the timing of a potential exit. For valuation purposes, “control” portfolio investments are composed of debt and equity securities in companies for which the Company has a controlling interest in the equity ownership of the portfolio company or the ability to nominate a majority of the portfolio company’s board of directors. For valuation purposes, “non-control” portfolio investments are generally composed of debt and equity securities in companies for which the Company does not have a controlling interest in the equity ownership of the portfolio company or the ability to nominate a majority of the portfolio company’s board of directors.

Under the Waterfall valuation method, the Company estimates the enterprise value of a portfolio company using a combination of market and income approaches or other appropriate valuation methods, such as considering recent transactions in the equity securities of the portfolio company or third-party valuations of the portfolio company, and then performs a Waterfall calculation by allocating the enterprise value over the portfolio company’s securities in order of their preference relative to one another. The enterprise value is the fair value at which an enterprise could be

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

sold in a transaction between two willing parties, other than through a forced or liquidation sale. Typically, privately held companies are bought and sold based on multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”), cash flows, net income, revenues, or in limited cases, book value. There is no single methodology for estimating enterprise value. For any one portfolio company, enterprise value is generally described as a range of values from which a single estimate of enterprise value is derived. In estimating the enterprise value of a portfolio company, the Company analyzes various factors including the portfolio company’s historical and projected financial results. Due to SEC deadlines for the Company’s quarterly and annual financial reporting, the operating results of a portfolio company used in the current period valuation are generally the results from the period ended three months prior to such valuation date and may include unaudited, projected, budgeted or pro forma financial information and may require adjustments for non-recurring items or to normalize the operating results that may require significant judgment in determining. In addition, projecting future financial results requires significant judgment regarding future growth assumptions. In evaluating the operating results, the Company also analyzes the impact of exposure to litigation, loss of customers or other contingencies. After determining the appropriate enterprise value, the Company allocates the enterprise value to investments in order of the legal priority of the various components of the portfolio company’s capital structure. In applying the Waterfall valuation method, the Company assumes the loans are paid-off at the principal amount in a change in control transaction and are not assumed by the buyer, which the Company believes is consistent with its past transaction history and standard industry practices.

Under the Yield-to-Maturity valuation method, the Company also uses the income approach to determine the fair value of debt securities based on projections of the discounted future free cash flows that the debt security will likely generate, including analyzing the discounted cash flows of interest and principal amounts for the debt security, as set forth in the associated loan agreements, as well as the financial position and credit risk of the portfolio company. The Company’s estimate of the expected repayment date of its debt securities is generally the maturity date of the instrument, as the Company generally intends to hold its loans and debt securities to maturity. The Yield-to-Maturity analysis also considers changes in leverage levels, credit quality, portfolio company performance, changes in market-based interest rates and other factors. The Company will generally use the value determined by the Yield-to-Maturity analysis as the fair value for that security; however, because of the Company’s general intent to hold its loans to maturity, the fair value will not exceed the principal amount of the debt security valued using the Yield-to-Maturity valuation method. A change in the assumptions that the Company uses to estimate the fair value of its debt securities using the Yield-to-Maturity valuation method could have a material impact on the determination of fair value. If there is deterioration in credit quality or if a debt security is in workout status, the Company may consider other factors in determining the fair value of the debt security, including the value attributable to the debt security from the enterprise value of the portfolio company or the proceeds that would most likely be received in a liquidation analysis.

Under the NAV valuation method, for an investment in an investment fund that does not have a readily determinable fair value, the Company measures the fair value of the investment predominately based on the NAV of the investment fund as of the measurement date and adjusts the investment’s fair value for factors known to the Company that would affect that fund’s NAV, including, but not limited to, fair values for individual investments held by the fund if the Company holds the same investment or for a publicly traded investment. In addition, in determining the fair value of the investment, the Company considers whether adjustments to the NAV are necessary in certain circumstances, based on the analysis of any restrictions on redemption of the Company’s investment as of the measurement date, recent actual sales or redemptions of interests in the investment fund, and expected future cash flows available to equity holders, including the rate of return on those cash flows compared to an implied market return on equity required by market participants, or other uncertainties surrounding the Company’s ability to realize the full NAV of its interests in the investment fund.

Pursuant to its internal valuation process and the requirements under the 1940 Act, the Company performs valuation procedures on each of its portfolio investments quarterly. For valuation purposes, all of the Company’s Private Loan portfolio investments are non-control investments. For Private Loan portfolio investments for which it has determined that third-party quotes or other independent pricing are not available or appropriate, the Company generally estimates the fair value based on the assumptions that it believes hypothetical market participants would use to value such Private Loan debt investments in a current hypothetical sale using the Yield-to-Maturity valuation method and such Private Loan equity investments in a current hypothetical sale using the Waterfall valuation method.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

In addition to its internal valuation process, in arriving at estimates of fair value for its investments in its Private Loan portfolio companies, the Company, among other things, consults with a nationally recognized independent financial advisory services firm. The nationally recognized independent financial advisory services firm analyzes and provides observations and recommendations and an assurance certification regarding the Company’s determinations of the fair value of its Private Loan portfolio company investments. The nationally recognized independent financial advisory services firm is generally consulted relative to the Company’s investments in each Private Loan portfolio company at least once every calendar year, and for the Company’s investments in new Private Loan portfolio companies, at least once in the twelve-month period subsequent to the initial investment. In certain instances, the Company may determine that it is not cost effective, and as a result is not in its stockholders’ best interest, to consult with the nationally recognized independent financial advisory services firm on its investments in one or more Private Loan portfolio companies. Such instances include, but are not limited to, situations where the fair value of the Company’s investment in a Private Loan portfolio company is determined to be insignificant relative to the total Investment Portfolio. The Company consulted with and received an assurance certification from its independent financial advisory services firm in arriving at its determination of fair value on its investments in a total of 33 Private Loan portfolio companies for the nine months ended September 30, 2022, representing 53% of the total Private Loan portfolio at fair value as of September 30, 2022, and on a total of 19 Private Loan portfolio companies for the nine months ended September 30, 2021, representing 47% of the total Private Loan portfolio at fair value as of September 30, 2021. Excluding its investments in Private Loan portfolio companies that, as of September 30, 2022 and 2021, as applicable, had not been in the Investment Portfolio for at least twelve months subsequent to the initial investment and its investments in Private Loan portfolio companies that were not reviewed because the investment is valued based upon third-party quotes or other independent pricing, the percentage of the Private Loan portfolio reviewed and certified by the Company’s independent financial advisory services firm for the nine months ended September 30, 2022 and 2021 was 63% and 66% of the total Private Loan portfolio at fair value as of September 30, 2022 and 2021, respectively.

In addition to its internal valuation process, in arriving at estimates of fair value for its investments in its LMM portfolio companies, the Company, among other things, consults with a nationally recognized independent financial advisory services firm. The nationally recognized independent financial advisory services firm analyzes and provides observations, recommendations and an assurance certification regarding the Company’s determinations of the fair value of its LMM portfolio company investments. The nationally recognized independent financial advisory services firm is generally consulted relative to the Company’s investments in each LMM portfolio company at least once every calendar year, and for the Company’s investments in new LMM portfolio companies, at least once in the twelve-month period subsequent to the initial investment. In certain instances, the Company may determine that it is not cost-effective, and as a result is not in its stockholders’ best interest, to consult with the nationally recognized independent financial advisory services firm on its investments in one or more LMM portfolio companies. Such instances include, but are not limited to, situations where the fair value of the Company’s investment in a LMM portfolio company is determined to be insignificant relative to the total Investment Portfolio. The Company consulted with and received an assurance certification from its independent financial advisory services firm in arriving at the Company’s determination of fair value on its investments in a total of 35 LMM portfolio companies for nine months ended September 30, 2022, representing 87% of the total LMM portfolio at fair value as of September 30, 2022 and on a total of 27 LMM portfolio companies for the nine months ended September 30, 2021, representing 75% of the total LMM portfolio at fair value as of September 30, 2021. Excluding its investments in LMM portfolio companies that, as of September 30, 2022 and 2021, as applicable, had not been in the Investment Portfolio for at least twelve months subsequent to the initial investment or whose primary purpose is to own real estate for which a third-party appraisal is obtained on at least an annual basis, the percentage of the LMM portfolio reviewed and certified by the Company’s independent financial advisory services firm was 87% and 81% of the total LMM portfolio at fair value as of September 30, 2022 and 2021, respectively.

For valuation purposes, all of the Company’s Middle Market portfolio investments are non-control investments. To the extent sufficient observable inputs are available to determine fair value, the Company uses observable inputs to determine the fair value of these investments through obtaining third-party quotes or other independent pricing. For Middle Market portfolio investments for which it has determined that third-party quotes or other independent pricing are not available or appropriate, the Company generally estimates the fair value based on the assumptions that it believes hypothetical market participants would use to value such Middle Market debt investments in a current hypothetical sale using the Yield-to-Maturity valuation method and such Middle Market equity investments in a current hypothetical sale using the Waterfall valuation method. The Company generally consults on a limited basis with a financial advisory

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

services firm in connection with determining the fair value of its Middle Market portfolio investments due to the nature of these investments. The vast majority (89% and 93% as of September 30, 2022 and December 31, 2021, respectively) of the Middle Market portfolio investments (i) are valued using third-party quotes or other independent pricing services, (ii) the Company has consulted with and received an assurance certification from independent financial services firm within the last twelve months or (iii) are new investments that have not been in the Investment Portfolio for at least twelve months subsequent to the initial investment.

For valuation purposes, all of the Company’s Other Portfolio investments are non-control investments. The Company’s Other Portfolio investments comprised 2.6% and 2.5% of the Company’s Investment Portfolio at fair value as of September 30, 2022 and December 31, 2021, respectively. Similar to the LMM investment portfolio, market quotations for Other Portfolio equity investments are generally not readily available. For its Other Portfolio equity investments, the Company generally determines the fair value of these investments using the NAV valuation method.

Due to the inherent uncertainty in the valuation process, the Company’s determination of fair value for its Investment Portfolio may differ materially from the values that would have been determined had a ready market for the securities existed. In addition, changes in the market environment, portfolio company performance and other events that may occur over the lives of the investments may cause the gains or losses ultimately realized on these investments to be materially different than the valuations currently assigned. The Company determines the fair value of each individual investment and records changes in fair value as unrealized appreciation or depreciation.

The Company uses an internally developed portfolio investment rating system in connection with its investment oversight, portfolio management and analysis and investment valuation procedures for its Private Loan, LMM and Middle Market portfolio companies. This system takes into account both quantitative and qualitative factors of each Private Loan, LMM and Middle Market portfolio company.

In December 2020, the SEC adopted Rule 2a-5 under the 1940 Act, which permits a BDC’s board of directors to designate its executive officers or investment adviser as a valuation designee to determine the fair value for its investment portfolio, subject to the active oversight of the board. The Company’s Board of Directors has approved policies and procedures pursuant to Rule 2a-5 (the “Valuation Procedures”) and has designated the Adviser, led by a group of Main Street’s and the Adviser’s executive officers, to serve as the Board of Directors’ valuation designee. The Company adopted the Valuation Procedures effective April 1, 2021. The Company believes its Investment Portfolio as of September 30, 2022 and December 31, 2021 approximates fair value as of those dates based on the markets in which the Company operates and other conditions in existence on those reporting dates.

2.Use of Estimates

The preparation of financial statements in conformity with U.S. 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 financial statements and the reported amounts of revenue and expenses during the period. Actual results may differ from these estimates under different conditions or assumptions. Additionally, as explained in Note B.1.—Summary of Significant Accounting Policies—Valuation of the Investment Portfolio, the consolidated financial statements include investments in the Investment Portfolio whose values have been estimated by the Company pursuant to valuation policies and procedures approved and overseen by the Company’s Board of Directors, in the absence of readily ascertainable market values. Because of the inherent uncertainty of the Investment Portfolio valuations, those estimated values may differ materially from the values that would have been determined had a ready market for the securities existed.

Macroeconomic factors, including the COVID-19 pandemic, risk of recession, inflation, supply chain constraints or disruptions, geopolitical disruptions and rising interest rates, and the related effect on the U.S. and global economies, have impacted, and may continue to impact, the businesses and operating results of certain of the Company’s portfolio companies, as well as market interest rate spreads. As a result of these and other current effects of macroeconomic factors, as well as the uncertainty regarding the extent and duration of their impact, the valuation of the Company’s Investment Portfolio has and may continue to experience increased volatility.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

3.Cash and Cash Equivalents

Cash and cash equivalents consist of cash and highly liquid investments with an original maturity of three months or less at the date of purchase. These highly liquid, short-term investments are included in the Consolidated Schedule of Investments. Cash and cash equivalents are carried at cost, which approximates fair value. At September 30, 2022, the Company had investments in short-term money market accounts totaling $6.6 million classified as cash equivalents.

At September 30, 2022, cash balances totaling $12.8 million exceeded Federal Deposit Insurance Corporation insurance protection levels, subjecting the Company to risk related to the uninsured balance. All of the Company’s cash deposits are held at large established high credit quality financial institutions and management believes that the risk of loss associated with any uninsured balances is remote.

4.Interest, Dividend and Fee Income

The Company records interest and dividend income on the accrual basis to the extent amounts are expected to be collected. Dividend income is recorded as dividends are declared by the portfolio company or at the point an obligation exists for the portfolio company to make a distribution. In accordance with the Company’s valuation policies, the Company evaluates accrued interest and dividend income periodically for collectability. When a loan or debt security becomes 90 days or more past due, and if the Company otherwise does not expect the debtor to be able to service its debt obligation, the Company will generally place the loan or debt security on non-accrual status and cease recognizing interest income on that loan or debt security until the borrower has demonstrated the ability and intent to pay contractual amounts due. If a loan or debt security’s status significantly improves regarding the debtor’s ability to service the debt obligation, or if a loan or debt security is sold or written off, the Company removes it from non-accrual status.

As of September 30, 2022, the Company’s total Investment Portfolio had six investments on non-accrual status, which comprised 1.1% of its fair value and 4.3% of its cost. As of December 31, 2021, the Company’s total Investment Portfolio had four investments on non-accrual status, which comprised 0.7% of its fair value and 2.8% of its cost.

Interest income from investments in the “equity” class of security of collateralized loan obligation (“CLO”) funds (typically subordinated notes) is recorded based upon an estimation of an effective yield to expected maturity utilizing estimated projected cash flows in accordance with ASC 325-40, Beneficial Interests in Securitized Financial Assets. The Company monitors the expected cash inflows from its investment in a CLO, including the expected residual payments, and the effective yield is determined and updated periodically.

The Company holds certain debt and preferred equity instruments in its Investment Portfolio that contain payment-in-kind (“PIK”) interest and cumulative dividend provisions. The PIK interest, computed at the contractual rate specified in each debt agreement, is periodically added to the principal balance of the debt and is recorded as interest income. Thus, the actual collection of this interest may be deferred until the time of debt principal repayment. Cumulative dividends are recorded as dividend income, and any dividends in arrears are added to the balance of the preferred equity investment. The actual collection of these dividends in arrears may be deferred until such time as the preferred equity is redeemed or sold. To maintain RIC tax treatment (as discussed in Note B.7.—Summary of Significant Accounting Policies —Income Taxes below), these non-cash sources of income may need to be paid out to stockholders in the form of distributions, even though the Company may not have collected the PIK interest and cumulative dividends in cash. The Company stops accruing PIK interest and cumulative dividends and writes off any accrued and uncollected interest and dividends in arrears when it determines that such PIK interest and dividends in arrears are no longer collectible. For the three months ended September 30, 2022 and 2021, (i) 2.3% and 2.5%, respectively, of the Company’s total investment income was attributable to PIK interest income not paid currently in cash and (ii) 0.4% and 0.6%, respectively, of the Company’s total investment income was attributable to cumulative dividend income not paid currently in cash. For the nine months ended September 30, 2022 and 2021, (i) 2.5% and 2.4%, respectively, of the Company’s total investment income was attributable to PIK interest income not paid currently in cash and (ii) 0.8% and 0.7%, respectively, of the Company’s total investment income was attributable to cumulative dividend income not paid currently in cash.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

The Company may periodically provide services, including structuring and advisory services, to its portfolio companies or other third parties. For services that are separately identifiable, fee income is recognized as earned. Fees received in connection with debt financing transactions are generally deferred and are accreted into income over the life of the financing.

A presentation of total investment income the Company received from its Investment Portfolio in each of the periods presented is as follows:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			(dollars in thousands)
Interest, fee and dividend income:
Interest income			$	23,346					$	18,818					$	64,577					$	52,218
Dividend income			2,166						3,249						7,430						12,227
Fee income			539						687						1,784						1,077
Total interest, fee and dividend income			$	26,051					$	22,754					$	73,791					$	65,522

5.Deferred Financing Costs

Deferred financing costs include commitment fees and other direct costs incurred in connection with arranging the Company’s borrowings. These costs were incurred in connection with the Company’s multi-year revolving Credit Facilities (see Note E—Debt) and have been capitalized as an asset and reflected in the Consolidated Balance Sheets as Deferred financing costs. Deferred financing costs incurred in connection with the Series A Notes (as defined below in Note E—Debt) are a direct deduction from the principal amount outstanding.

6.Unearned Income—Debt Origination Fees and Original Issue Discount and Discounts / Premiums to Par Value

The Company capitalizes debt origination fees received in connection with financings and reflects such fees as unearned income netted against the applicable debt investments. The unearned income from the fees is accreted into income over the life of the financing.

In connection with its portfolio debt investments, the Company sometimes receives nominal cost warrants or warrants with an exercise price below the fair value of the underlying equity (together, “nominal cost equity”) that are valued as part of the negotiation process with the particular portfolio company. When the Company receives nominal cost equity, it allocates its cost basis in its investment between its debt security and its nominal cost equity at the time of origination based on amounts negotiated with the particular portfolio company. The allocated amounts are based upon the fair value of the nominal cost equity, which is then used to determine the allocation of cost to the debt security. Any discount recorded on a debt investment resulting from this allocation is reflected as unearned income, which is netted against the applicable debt investment, and accreted into interest income over the life of the debt investment. The actual collection of this interest is deferred until the time of debt principal repayment.

The Company may also purchase debt securities at a discount or at a premium to the par value of the debt security. In the case of a purchase at a discount, the Company records the investment at the par value of the debt security net of the discount, and the discount is accreted into interest income over the life of the debt investment. In the case of a purchase at a premium, the Company records the investment at the par value of the debt security plus the premium, and the premium is amortized as a reduction to interest income over the life of the debt investment.

To maintain RIC tax treatment (as discussed in Note B.7.—Summary of Significant Accounting Policies —Income Taxes below), these non-cash sources of income may need to be paid out to stockholders in the form of distributions, even though the Company may not have collected the interest income. For the three months ended September 30, 2022 and 2021, 2.3% and 5.9%, respectively, of the Company’s total investment income was attributable

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

to interest income from the accretion of discounts associated with debt investments, net of any premium reduction. For the nine months ended September 30, 2022 and 2021, 2.6% and 5.3%, respectively, of the Company’s total investment income was attributable to interest income from the accretion of discounts associated with debt investments, net of any premium reduction.

7.Income Taxes

MSC Income Fund has elected to be treated for U.S. federal income tax purposes as a RIC. MSC Income Fund’s taxable income includes the taxable income generated by MSC Income Fund and certain of its subsidiaries, including the Structured Subsidiaries, which are treated as disregarded entities for tax purposes. As a RIC, MSC Income Fund generally will not pay corporate-level U.S. federal income taxes on any net ordinary taxable income or capital gains that MSC Income Fund distributes to its stockholders. MSC Income Fund must generally distribute at least 90% of its “investment company taxable income” (which is generally its net ordinary taxable income and realized net short-term capital gains in excess of realized net long-term capital losses) and 90% of its tax-exempt income to maintain its RIC status (pass-through tax treatment for amounts distributed). As part of maintaining RIC status, undistributed taxable income (subject to a 4% non-deductible U.S. federal excise tax) pertaining to a given fiscal year may be distributed up to twelve months subsequent to the end of that fiscal year, provided such dividends are declared on or prior to the later of (i) the filing of the U.S. federal income tax return for the applicable fiscal year or (ii) the fifteenth day of the ninth month following the close of the year in which such taxable income was generated.

The Taxable Subsidiaries primarily hold certain portfolio equity investments for the Company. The Taxable Subsidiaries permit the Company to hold equity investments in portfolio companies which are “pass-through” entities for tax purposes and to continue to comply with the “source-of-income” requirements contained in the RIC tax provisions of the Code. The Taxable Subsidiaries are consolidated with the Company for U.S. GAAP financial reporting purposes, and the portfolio investments held by the Taxable Subsidiaries are included in the Company’s consolidated financial statements as portfolio investments and recorded at fair value. The Taxable Subsidiaries are not consolidated with MSC Income Fund for income tax purposes and may generate income tax expense, or benefit, and tax assets and liabilities, as a result of their ownership of certain portfolio investments. The taxable income, or loss, of the Taxable Subsidiaries may differ from their book income, or loss, due to temporary book and tax timing differences and permanent differences. The Taxable Subsidiaries are each taxed at corporate income tax rates based on their taxable income. The income tax expense, or benefit, if any, and the related tax assets and liabilities, of the Taxable Subsidiaries are reflected in the Company’s consolidated financial statements.

The Taxable Subsidiaries use the liability method in accounting for income taxes. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements, using statutory tax rates in effect for the year in which the temporary differences are expected to reverse. A valuation allowance is provided, if necessary, against deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company’s net assets as included on the Consolidated Balance Sheets and Consolidated Statements of Changes in Net Assets include an adjustment to classification as a result of permanent book-to-tax differences, which include differences in the book and tax treatment of income and expenses.

Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses. Taxable income generally excludes net unrealized appreciation or depreciation, as investment gains or losses are not included in taxable income until they are realized.

8.Net Realized Gains or Losses and Net Unrealized Appreciation or Depreciation

Realized gains or losses are measured by the difference between the net proceeds from the sale or redemption of an investment or a financial instrument and the cost basis of the investment or financial instrument, without regard to unrealized appreciation or depreciation previously recognized, and includes investments written-off during the period net of recoveries and realized gains or losses from in-kind redemptions. Net unrealized appreciation or depreciation reflects the net change in the fair value of the Investment Portfolio and financial instruments and the reclassification of any prior period unrealized appreciation or depreciation on exited investments and financial instruments to realized gains or losses.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

9.Fair Value of Financial Instruments

Fair value estimates are made at discrete points in time based on relevant information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. The Company believes that the carrying amounts of its financial instruments, consisting of cash and cash equivalents, receivables, payables and other liabilities approximate the fair values of such items due to the short-term nature of these instruments.

To estimate the fair value of the Company’s Series A Notes as disclosed in Note E—Debt, the Company uses the Yield-to-Maturity valuation method based on projections of the discounted future free cash flows that the debt security will likely generate, including both the discounted cash flows of the associated interest and principal amounts for the debt security.

10.Earnings per Share

Net increase in net assets resulting from operations per share and net investment income per share are computed utilizing the weighted-average number of shares of common stock outstanding for the period.

11.Recently Issued or Adopted Accounting Standards

In March 2020, the FASB issued ASU 2020-04, “Reference rate reform (Topic 848)—Facilitation of the effects of reference rate reform on financial reporting.” The amendments in this update provide optional expedients and exceptions for applying U.S. GAAP to certain contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform and became effective upon issuance for all entities. The Company has agreements that have LIBOR as a reference rate with certain portfolio companies and also with certain lenders. Many of these agreements include language for choosing an alternative successor rate if LIBOR reference is no longer considered to be appropriate. Contract modifications are required to be evaluated in determining whether the modifications result in the establishment of new contracts or the continuation of existing contracts. The Company adopted this amendment in March 2020 and plans to apply the amendments in this update to account for contract modifications due to changes in reference rates when LIBOR reference is no longer used. The Company utilized the optional expedients and exceptions provided by ASU 2020-04 during the nine months ended September 30, 2022, the effect of which was not material to the consolidated financial statements and the notes thereto. The Company does not expect ASU 2022-04 to have a material impact to the consolidated financial statements and the notes thereto.

In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.” The amendments in this update provide that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments in this update also require additional disclosures for equity securities subject to contractual sales restrictions. ASU 2022-03 is required for years beginning after December 15, 2023, though early adoption is permitted. The Company does not expect ASU 2022-03 to have a material impact to the consolidated financial statements and the notes thereto.

From time to time, new accounting pronouncements are issued by the FASB or other standards-setting bodies that are adopted by the Company as of the specified effective date. The Company believes that the impact of recently issued standards and any that are not yet effective will not have a material impact on its consolidated financial statements upon adoption.

NOTE C—FAIR VALUE HIERARCHY FOR INVESTMENTS—PORTFOLIO COMPOSITION

ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and enhances disclosure requirements for fair value measurements. The Company accounts for its investments at fair value.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

Fair Value Hierarchy

In accordance with ASC 820, the Company has categorized its investments based on the priority of the inputs to the valuation technique into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical investments (Level 1) and the lowest priority to unobservable inputs (Level 3).

Investments recorded on the Company’s Consolidated Balance Sheets are categorized based on the inputs to the valuation techniques as follows:

Level 1—Investments whose values are based on unadjusted quoted prices for identical assets in an active market that the Company has the ability to access (examples include investments in active exchange-traded equity securities and investments in most U.S. government and agency securities).

Level 2—Investments whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the investment. Level 2 inputs include the following:

•Quoted prices for similar assets in active markets (for example, investments in restricted stock);

•Quoted prices for identical or similar assets in non-active markets (for example, investments in thinly traded public companies);

•Pricing models whose inputs are observable for substantially the full term of the investment (for example, market interest rate indices); and

•Pricing models whose inputs are derived principally from, or corroborated by, observable market data through correlation or other means for substantially the full term of the investment.

Level 3—Investments whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement (for example, investments in illiquid securities issued by privately held companies). These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the investment.

As required by ASC 820, when the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, unrealized appreciation and depreciation related to such investments categorized within the Level 3 tables below may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).

As of September 30, 2022 and December 31, 2021, the Company’s Private Loan portfolio investments primarily consisted of investments in interest-bearing secured debt investments. The fair value determination for these investments consisted of a combination of observable inputs in non-active markets for which sufficient observable inputs were not available to determine the fair value of these investments and unobservable inputs. As a result, all of the Company’s Private Loan portfolio investments were categorized as Level 3 as of September 30, 2022 and December 31, 2021.

As of September 30, 2022 and December 31, 2021, all of the Company’s LMM portfolio investments consisted of illiquid securities issued by privately held companies and the fair value determination for these investments primarily consisted of unobservable inputs. As a result, all of the Company’s LMM portfolio investments were categorized as Level 3 as of September 30, 2022 and December 31, 2021.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

As of September 30, 2022 and December 31, 2021, the Company’s Middle Market portfolio investments consisted primarily of investments in secured and unsecured debt investments and independently rated debt investments. The fair value determination for these investments consisted of a combination of observable inputs in non-active markets for which sufficient observable inputs were not available to determine the fair value of these investments and unobservable inputs. As a result, all of the Company’s Middle Market portfolio investments were categorized as Level 3 as of September 30, 2022 and December 31, 2021.

As of September 30, 2022 and December 31, 2021, the Company’s Other Portfolio investments consisted of illiquid securities issued by privately held companies and the fair value determination for these investments primarily consisted of unobservable inputs. As a result, all of the Company’s Other Portfolio investments were categorized as Level 3 as of September 30, 2022 and December 31, 2021.

The fair value determination of each portfolio investment categorized as Level 3 required one or more of the following unobservable inputs:

•Financial information obtained from each portfolio company, including unaudited statements of operations and balance sheets for the most recent period available as compared to budgeted numbers;

•Current and projected financial condition of the portfolio company;

•Current and projected ability of the portfolio company to service its debt obligations;

•Type and amount of collateral, if any, underlying the investment;

•Current financial ratios (e.g., fixed charge coverage ratio, interest coverage ratio and net debt/EBITDA ratio) applicable to the investment;

•Current liquidity of the investment and related financial ratios (e.g., current ratio and quick ratio);

•Pending debt or capital restructuring of the portfolio company;

•Projected operating results of the portfolio company;

•Current information regarding any offers to purchase the investment;

•Current ability of the portfolio company to raise any additional financing as needed;

•Changes in the economic environment which may have a material impact on the operating results of the portfolio company;

•Internal occurrences that may have an impact (both positive and negative) on the operating performance of the portfolio company;

•Qualitative assessment of key management;

•Contractual rights, obligations or restrictions associated with the investment; and

•Other factors deemed relevant.

The use of significant unobservable inputs creates uncertainty in the measurement of fair value as of the reporting date. The significant unobservable inputs used in the fair value measurement of the Company’s LMM equity securities, which are generally valued through an average of the discounted cash flow technique and the market comparable/enterprise value technique (unless one of these approaches is determined to not be appropriate), are (i) EBITDA multiples and (ii) the weighted-average cost of capital (“WACC”). Significant increases (decreases) in

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

EBITDA multiple inputs in isolation would result in a significantly higher (lower) fair value measurement. On the contrary, significant increases (decreases) in WACC inputs in isolation would result in a significantly lower (higher) fair value measurement. The significant unobservable inputs used in the fair value measurement of the Company’s Private Loan, LMM and Middle Market securities are (i) risk adjusted discount rates used in the Yield-to-Maturity valuation technique (see Note B.1.—Valuation of the Investment Portfolio) and (ii) the percentage of expected principal recovery. Significant increases (decreases) in any of these discount rates in isolation would result in a significantly lower (higher) fair value measurement. Significant increases (decreases) in any of these expected principal recovery percentages in isolation would result in a significantly higher (lower) fair value measurement. However, due to the nature of certain investments, fair value measurements may be based on other criteria, such as third-party appraisals of collateral and fair values as determined by independent third parties, which are not presented in the tables below.

The following tables provide a summary of the significant unobservable inputs used to fair value the Company’s Level 3 portfolio investments as of September 30, 2022 and December 31, 2021:

Type of Investment						Fair Value as of September 30, 2022 (in thousands)						Valuation Technique						Significant Unobservable Inputs						Range(3)						Weighted Average(3)						Median(3)
Equity investments						$	206,491					Discounted cash flow						WACC						10.5% - 22.4%						14.3		%				15.7		%
												Market comparable / Enterprise value						EBITDA multiple (1)						4.3x - 8.5x (2)						7.2x						6.4x
Debt investments						$	767,177					Discounted cash flow						Risk adjusted discount factor						6.5% - 16.3%(2)						10.5		%				9.9		%
																		Expected principal recovery percentage						0.4% - 200.0%						99.7		%				100.0		%
Debt investments						$	122,500					Market approach						Third-party quote						5.6 - 98.9						88.7						93.0
Total Level 3 investments						$	1,096,168

_____________________

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

(2)Range excludes outliers that are greater than one standard deviation from the mean. Including these outliers, the range for EBITDA multiple is 3.0x - 15.7x and the range for risk adjusted discount factor is 5.0% - 35.4%.

(3)Does not include investments for which the valuation technique does not include the use of the applicable fair value input.

Type of Investment						Fair Value as of December 31, 2021 (in thousands)						Valuation Technique						Significant Unobservable Inputs						Range(3)						Weighted Average(3)						Median(3)
Equity investments						$	197,926					Discounted cash flow						WACC						10.1% - 19.1%						13.4		%				14.8		%
												Market comparable / Enterprise value						EBITDA multiple (1)						4.9x - 8.3x (2)						7.3x						6.2x
Debt investments						$	743,211					Discounted cash flow						Risk adjusted discount factor						5.2% - 15.0%(2)						8.1		%				9.0		%
																		Expected principal recovery percentage						1.2% - 100.0%						100.0		%				100.0		%
Debt investments						$	135,999					Market approach						Third-party quote						3.0 - 100.2						94.3						97.3
Total Level 3 investments						$	1,077,136

_____________________

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

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

(2)Range excludes outliers that are greater than one standard deviation from the mean. Including these outliers, the range for EBITDA multiple is 3.8x - 10.0x and the range for risk adjusted discount factor is 4.4% - 38.5%.

(3)Does not include investments for which the valuation technique does not include the use of the applicable fair value input.

The following tables provide a summary of changes in fair value of the Company’s Level 3 portfolio investments for the nine-month periods ended September 30, 2022 and 2021 (amounts in thousands):

Type of Investment						Fair Value as of December 31, 2021						Transfers Into Level 3 Hierarchy						Redemptions/ Repayments						New Investments						Net Changes from Unrealized to Realized						Net Unrealized Appreciation (Depreciation)						Other(1)						Fair Value as of September 30, 2022
Debt						$	879,970					$	—					$	(124,061)					$	168,053					$	855					$	(33,407)					$	(1,733)					$	889,677
Equity						196,374						—						(18,520)						5,011						(8,806)						30,562						1,733						206,354
Equity Warrant						792						—						—						—						—						(655)						—						137
						$	1,077,136					$	—					$	(142,581)					$	173,064					$	(7,951)					$	(3,500)					$	—					$	1,096,168

______________________

(1)Includes the impact of non-cash conversions. These transactions represent non-cash investing activities. See additional cash flow information in the Consolidated Statements of Cash Flows.

Type of Investment						Fair Value as of December 31, 2020						Transfers Into Level 3 Hierarchy						Redemptions/ Repayments						New Investments						Net Changes from Unrealized to Realized						Net Unrealized Appreciation (Depreciation)						Other(1)						Fair Value as of September 30, 2021
Debt						$	638,423					$	—					$	(192,707)					$	354,164					$	1,572					$	2,466					$	(970)					$	802,948
Equity(2)						185,041						—						(18,133)						13,064						1,209						16,372						976						198,529
Equity Warrant						2,058						—						—						—						(1,290)						35						—						803
						$	825,522					$	—					$	(210,840)					$	367,228					$	1,491					$	18,873					$	6					$	1,002,280

_____________________

(1)Includes the impact of non-cash conversions. These transactions represent non-cash investing activities. See additional cash flow information in the Consolidated Statements of Cash Flows.

(2)Includes the Company’s investment in CLO subordinated notes. (See Note D — Investment in Signal Peak CLO 7, Ltd.).

At September 30, 2022 and December 31, 2021, the Company's investments at fair value were categorized as follows in the fair value hierarchy for ASC 820 purposes:

												Fair Value Measurements
												(in thousands)
At September 30, 2022						Fair Value						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Private Loan portfolio investments						$	595,564					$	—					$	—					$	595,564
LMM portfolio investments						335,723						—						—						335,723
Middle Market portfolio investments						136,048						—						—						136,048
Other Portfolio investments						28,833						—						—						28,833
Total investments						$	1,096,168					$	—					$	—					$	1,096,168

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

												Fair Value Measurements
												(in thousands)
At December 31, 2021						Fair Value						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Private Loan portfolio investments						$	575,865					$	—					$	—					$	575,865
LMM portfolio investments						315,415						—						—						315,415
Middle Market portfolio investments						159,021						—						—						159,021
Other Portfolio investments						26,835						—						—						26,835
Total investments						$	1,077,136					$	—					$	—					$	1,077,136

Investment Portfolio Composition

The Company’s principal investment objective is to maximize its portfolio’s total return by generating current income from its debt investments and current income and capital appreciation from its equity and equity-related investments, including warrants, convertible securities and other rights to acquire equity securities in a portfolio company. The Company seeks to achieve its investment objective through its Private Loan, LMM and Middle Market investment strategies.

The Company’s private loan (“Private Loan”) investment strategy involves investments in privately held companies that are generally consistent with the size of its Middle Market portfolio companies or LMM portfolio companies, and its Private Loan investments generally range in size from $1 million to $20 million. The Company’s Private Loan investments generally consist of loans that have been originated directly by Main Street or through strategic relationships with other investment funds on a collaborative basis, and are often referred to in the debt markets as “club deals.” The Company’s Private Loan portfolio debt investments are generally secured by a first priority lien on the assets of the portfolio company and typically have a term of between three and seven years from the original investment date. The Company may have the option to invest alongside the sponsor in the equity securities of its Private Loan portfolio companies.

The Company’s LMM investment strategy involves investments in secured debt, equity warrants and direct equity investments in privately held, LMM companies based in the United States. The Company’s LMM portfolio companies generally have annual revenues between $10 million and $150 million, and its LMM investments generally range in size from $1 million to $20 million. The LMM debt investments are typically secured by a first priority lien on the assets of the portfolio company, can include either fixed or floating rate terms and generally have a term of between five and seven years from the original investment date. In most LMM portfolio investments, the Company receives nominally priced equity warrants and/or makes direct equity investments in connection with a debt investment.

The Company’s Middle Market investment strategy involves investments in syndicated loans to or debt securities in Middle Market companies, which the Company defines as companies with annual revenues between $150 million and $1.5 billion, and its Middle Market investments generally range in size from $1 million to $20 million. The Company’s Middle Market portfolio debt investments are generally secured by a first priority lien on the assets of the portfolio company and typically have an expected duration of between three and seven years from the original investment date.

The Company’s other portfolio (“Other Portfolio”) investments primarily consist of investments that are not consistent with the typical profiles for its Private Loan, LMM or Middle Market portfolio investments, including investments which may be managed by third parties. In the Other Portfolio, the Company may incur indirect fees and expenses in connection with investments managed by third parties, such as investments in other investment companies or private funds. For Other Portfolio investments, the Company generally receives distributions related to the assets held by the portfolio company. Those assets are typically expected to be liquidated over a five to ten-year period.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

Investment income, consisting of interest, dividends and fees, can fluctuate dramatically due to various factors, including the level of new investment activity, repayments of debt investments or sales of equity interests. Investment income in any given year could also be highly concentrated among several portfolio companies. For the three and nine months ended September 30, 2022 and 2021, the Company did not record investment income from any single portfolio company in excess of 10% of total investment income.

The following tables provide a summary of the Company’s investments in the Private Loan, LMM and Middle Market portfolios as of September 30, 2022 and December 31, 2021 (this information excludes the Other Portfolio investments, which are discussed further below):

			As of September 30, 2022
			Private Loan						LMM (a)						Middle Market
			(dollars in millions)
Number of portfolio companies			73						45						22
Fair value			$	595.6					$	335.7					$	136.0
Cost			$	607.8					$	296.4					$	168.3
Debt investments as a % of portfolio (at cost)			96.1		%				72.4		%				95.9		%
Equity investments as a % of portfolio (at cost)			3.9		%				27.6		%				4.1		%
% of debt investments at cost secured by first priority lien			99.9		%				99.9		%				98.6		%
Weighted-average annual effective yield (b)			10.0		%				11.6		%				9.9		%
Average EBITDA (c)			$	41.7					$	8.5					$	77.0

___________________

(a)At September 30, 2022, the Company had equity ownership in all of its LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was 9%.

(b)The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of September 30, 2022, including amortization of deferred debt origination fees and accretion of original issue discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual status. The weighted-average annual effective yield on the Company’s debt portfolio as of September 30, 2022 including debt investments on non-accrual status was 8.9% for its Private Loan portfolio, 11.3% for its LMM portfolio and 9.6% for its Middle Market portfolio. The weighted-average annual effective yield is not reflective of what an investor in shares of the Company’s common stock will realize on its investment because it does not reflect the Company’s utilization of debt capital in its capital structure, the Company’s expenses or any sales load paid by an investor.

(c)The average EBITDA is calculated using a weighted-average for the Private Loan and Middle Market portfolios and a simple average for the LMM portfolio. These calculations exclude certain portfolio companies, including one

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Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

Private Loan portfolio company, as EBITDA is not a meaningful valuation metric for the Company’s investments in these portfolio companies, and those portfolio companies whose primary purpose is to own real estate.

			As of December 31, 2021
			Private Loan						LMM (a)						Middle Market
			(dollars in millions)
Number of portfolio companies			57						43						25
Fair value			$	575.9					$	315.4					$	159.0
Cost			$	576.3					$	281.0					$	184.2
Debt investments as a % of portfolio (at cost)			94.0		%				72.2		%				93.7		%
Equity investments as a % of portfolio (at cost)			6.0		%				27.8		%				6.3		%
% of debt investments at cost secured by first priority lien			98.5		%				99.8		%				98.8		%
Weighted-average annual effective yield (b)			8.4		%				10.8		%				7.6		%
Average EBITDA (c)			$	38.0					$	7.3					$	85.9

___________________

(a)At December 31, 2021, the Company had equity ownership in all of its LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was 9%.

(b)The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of December 31, 2021, including amortization of deferred debt origination fees and accretion of original issue discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual status. The weighted-average annual effective yield on the Company’s debt portfolio as of December 31, 2021 including debt investments on non-accrual status was 8.3% for its Private Loan portfolio, 10.5% for its LMM portfolio and 7.1% for its Middle Market portfolio. The weighted-average annual effective yield is not reflective of what an investor in shares of the Company’s common stock will realize on its investment because it does not reflect the Company’s utilization of debt capital in its capital structure, the Company’s expenses or any sales load paid by an investor.

(c)The average EBITDA is calculated using a weighted-average for the Private Loan and Middle Market portfolios and a simple average for the LMM portfolio. These calculations exclude certain portfolio companies, including two Private Loan portfolio companies and one Middle Market portfolio company, as EBITDA is not a meaningful valuation metric for the Company’s investments in these portfolio companies, and those portfolio companies whose primary purpose is to own real estate.

For the three months ended September 30, 2022 and 2021, the Company achieved an annualized total return on investments of 10.5% and 11.4%, respectively. For the nine months ended September 30, 2022 and 2021, the Company achieved an annualized total return on investments of 8.6% and 12.0%, respectively. For the year ended December 31, 2021, the Company achieved a total return on investments of 17.9%. Total return on investments is calculated using the interest, dividend and fee income, as well as the realized and unrealized change in fair value of the Investment Portfolio for the specified period. The Company’s total return on investments is not reflective of what an investor in shares of the Company’s common stock will realize on its investment because it does not reflect the Company’s utilization of debt capital in its capital structure, the Company’s expenses or any sales load paid by an investor.

As of September 30, 2022, the Company had Other Portfolio investments in four companies, collectively totaling $28.8 million in fair value and $25.1 million in cost basis and which comprised 2.6% and 2.3% of the Company’s Investment Portfolio at fair value and cost, respectively. As of December 31, 2021, the Company had Other Portfolio investments in four companies, collectively totaling $26.8 million in fair value and $25.6 million in cost basis and which comprised 2.5% and 2.4% of the Company’s Investment Portfolio at fair value and cost, respectively.

The following tables summarize the composition of the Company’s total combined Private Loan portfolio investments, LMM portfolio investments and Middle Market portfolio investments at cost and fair value by type of

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Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

investment as a percentage of the total combined Private Loan portfolio investments, LMM portfolio investments and Middle Market portfolio investments, as of September 30, 2022 and December 31, 2021 (this information excludes the Other Portfolio investments, which are discussed above).

Cost:						September 30, 2022						December 31, 2021
First lien debt						89.2		%				87.2		%
Equity						10.4		%				11.7		%
Second lien debt						—		%				0.7		%
Equity warrants						0.1		%				0.1		%
Other						0.3		%				0.3		%
						100.0		%				100.0		%

Fair Value:						September 30, 2022						December 31, 2021
First lien debt						83.1		%				82.8		%
Equity						16.6		%				16.1		%
Second lien debt						—		%				0.7		%
Equity warrants						—		%				0.1		%
Other						0.3		%				0.3		%
						100.0		%				100.0		%

The following tables summarize the composition of the Company’s total combined Private Loan portfolio investments, LMM portfolio investments and Middle Market portfolio investments by geographic region of the United States and other countries at cost and fair value as a percentage of the total combined Private Loan portfolio investments, LMM portfolio investments and Middle Market portfolio investments, as of September 30, 2022 and December 31, 2021 (this information excludes the Other Portfolio investments). The geographic composition is determined by the location of the corporate headquarters of the portfolio company.

Cost:						September 30, 2022						December 31, 2021
Northeast						23.1		%				21.4		%
Southwest						22.3		%				24.8		%
West						21.3		%				22.3		%
Southeast						17.0		%				16.6		%
Midwest						14.6		%				14.0		%
Canada						0.8		%				0.9		%
Other Non-United States						0.9		%				—		%
						100.0		%				100.0		%

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

Fair Value:						September 30, 2022						December 31, 2021
Southwest						25.4		%				27.1		%
Northeast						23.0		%				21.4		%
West						19.9		%				21.4		%
Midwest						15.2		%				14.8		%
Southeast						14.7		%				14.4		%
Canada						0.9		%				0.9		%
Other Non-United States						0.9		%				—		%
						100.0		%				100.0		%

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

The Company’s Private Loan portfolio investments, LMM portfolio investments and Middle Market portfolio investments are in companies conducting business in a variety of industries. The following tables summarize the composition of the Company’s total combined Private Loan portfolio investments, LMM portfolio investments and Middle Market portfolio investments by industry at cost and fair value as of September 30, 2022 and December 31, 2021 (this information excludes the Other Portfolio investments).

Cost:						September 30, 2022						December 31, 2021
Commercial Services & Supplies						10.9		%				11.1		%
Machinery						8.1		%				7.9		%
Internet Software & Services						7.4		%				6.1		%
Diversified Consumer Services						5.1		%				4.4		%
IT Services						4.7		%				4.3		%
Distributors						4.6		%				4.5		%
Health Care Providers & Services						4.5		%				3.5		%
Specialty Retail						3.8		%				3.8		%
Professional Services						3.6		%				3.7		%
Aerospace & Defense						3.5		%				2.8		%
Leisure Equipment & Products						3.5		%				3.0		%
Communications Equipment						3.4		%				3.7		%
Containers & Packaging						3.4		%				2.6		%
Diversified Telecommunication Services						3.0		%				4.5		%
Oil, Gas & Consumable Fuels						2.8		%				4.2		%
Construction & Engineering						2.5		%				3.8		%
Media						2.3		%				2.0		%
Building Products						2.2		%				2.3		%
Textiles, Apparel & Luxury Goods						1.9		%				2.0		%
Hotels, Restaurants & Leisure						1.8		%				2.1		%
Diversified Financial Services						1.7		%				2.3		%
Internet & Catalog Retail						1.6		%				1.6		%
Household Products						1.4		%				1.2		%
Energy Equipment & Services						1.4		%				1.4		%
Health Care Equipment & Supplies						1.2		%				0.8		%
Electrical Equipment						1.2		%				0.9		%
Food Products						1.1		%				1.2		%
Software						1.1		%				1.0		%
Computers & Peripherals						1.0		%				0.9		%
Food & Staples Retailing						0.8		%				1.1		%
Trading Companies & Distributors						—		%				1.1		%
Other (1)						4.5		%				4.2		%
						100.0		%				100.0		%

___________________

(1)Includes various industries with each industry individually less than 1.0% of the total combined Private Loan portfolio investments, LMM portfolio investments and Middle Market portfolio investments at each date.

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Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

Fair Value:						September 30, 2022						December 31, 2021
Commercial Services & Supplies						10.1		%				10.6		%
Machinery						9.7		%				9.3		%
Internet Software & Services						6.5		%				5.5		%
Diversified Consumer Services						5.8		%				5.3		%
Distributors						5.0		%				4.6		%
IT Services						4.5		%				4.2		%
Health Care Providers & Services						4.3		%				3.5		%
Containers & Packaging						3.9		%				2.9		%
Leisure Equipment & Products						3.5		%				3.1		%
Aerospace & Defense						3.4		%				2.7		%
Specialty Retail						3.3		%				3.8		%
Diversified Telecommunication Services						3.0		%				4.5		%
Construction & Engineering						2.8		%				4.2		%
Professional Services						2.8		%				2.9		%
Oil, Gas & Consumable Fuels						2.6		%				3.7		%
Media						2.5		%				2.1		%
Building Products						2.2		%				2.4		%
Internet & Catalog Retail						2.1		%				1.7		%
Construction Materials						2.0		%				1.5		%
Textiles, Apparel & Luxury Goods						1.9		%				1.9		%
Diversified Financial Services						1.8		%				2.4		%
Computers & Peripherals						1.7		%				1.7		%
Software						1.5		%				1.3		%
Hotels, Restaurants & Leisure						1.5		%				1.4		%
Communications Equipment						1.4		%				2.1		%
Electrical Equipment						1.3		%				1.0		%
Household Products						1.3		%				1.2		%
Energy Equipment & Services						1.1		%				1.1		%
Air Freight & Logistics						1.1		%				1.1		%
Food & Staples Retailing						0.8		%				1.1		%
Food Products						0.8		%				1.1		%
Trading Companies & Distributors						—		%				1.2		%
Other (1)						3.8		%				2.9		%
						100.0		%				100.0		%

___________________

(1)Includes various industries with each industry individually less than 1.0% of the total combined Private Loan portfolio investments, LMM portfolio investments and Middle Market portfolio investments at each date.

At September 30, 2022 and December 31, 2021, the Company had no portfolio investment that was greater than 10% of the Investment Portfolio at fair value.

Unconsolidated Significant Subsidiaries

In accordance with Rules 3-09 and 4-08(g) of Regulation S-X, the Company must determine which of its unconsolidated controlled portfolio companies, if any, are considered “significant subsidiaries.” In evaluating its

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Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

unconsolidated controlled portfolio companies in accordance with Regulation S-X, there are two tests that the Company must utilize to determine if any of the Company’s Control Investments (as defined in Note A—Organization and Basis of Presentation, including those unconsolidated portfolio companies defined as Control Investments in which the Company does not own greater than 50% of the voting securities nor have rights to maintain greater than 50% of the board representation) are considered significant subsidiaries: the investment test and the income test. The investment test is generally measured by dividing the Company’s investment in the Control Investment by the value of the Company’s total investments. The income test is generally measured by dividing the absolute value of the combined sum of total investment income, net realized gain (loss) and net unrealized appreciation (depreciation) from the relevant Control Investment for the period being tested by the absolute value of the Company’s change in net assets resulting from operations for the same period. Rules 3-09 and 4-08(g) of Regulation S-X require the Company to include (1) separate audited financial statements of an unconsolidated majority-owned subsidiary (Control Investments in which the Company owns greater than 50% of the voting securities) in an annual report and (2) summarized financial information of a Control Investment in a quarterly report, respectively, if certain thresholds of the investment or income tests are exceeded and the unconsolidated portfolio company qualifies as a significant subsidiary.

As of September 30, 2022 and December 31, 2021, the Company had no single investment that qualified as a significant subsidiary under either the investment or income tests.

NOTE D – INVESTMENT IN SIGNAL PEAK CLO 7, LTD.

On April 4, 2017, the Company and ORIX Funds Corp. (“Orix”) entered into a limited liability company agreement to co-manage HMS-ORIX SLF LLC (“HMS-ORIX”), which invested primarily in broadly-syndicated loans. Pursuant to the terms of the limited liability agreement and through representation on the HMS-ORIX Board of Managers, the Company and Orix each had 50% voting control of HMS-ORIX and together were required to agree on all portfolio and investment decisions as well as all other significant actions for HMS-ORIX. The Company did not have sole control of significant actions of HMS-ORIX and, accordingly, did not consolidate the operations of HMS-ORIX within the consolidated financial statements. The Company and Orix funded an aggregate of $50.0 million of equity to HMS-ORIX, with the Company providing $30.0 million (60% of the equity) and Orix providing $20.0 million (40% of the equity).

On May 8, 2019, HMS-ORIX Holdings I LLC, a wholly-owned subsidiary of HMS-ORIX, which held all of the investments in broadly-syndicated loans held by HMS-ORIX, was merged (the “HMS-ORIX Holdings Merger”) into Mariner CLO 7, Ltd., an exempted company incorporated under the laws of the Cayman Islands (“Mariner CLO”). In connection with the HMS-ORIX Holdings Merger, HMS-ORIX made certain distributions to its members. The Company used the cash proceeds it received from the HMS-ORIX Holdings Merger to purchase an aggregate principal amount of $25.9 million of the “Subordinated Notes” (the equity tranche of the CLO’s securities) due in 2032 issued by Mariner CLO in connection with an offering of $405.9 million aggregate principal amount of notes (the “CLO Offering”). After distribution to its members of residual cash remaining after the HMS-ORIX Holdings Merger, HMS-ORIX was fully liquidated on September 26, 2019. On October 8, 2020, Mariner CLO changed its name to Signal Peak CLO 7, Ltd. (“Signal Peak CLO”). The Company sold its entire position in the Signal Peak CLO on December 16, 2021.

For the three and nine months ended September 30, 2021, the Company recognized $0.6 million and $1.3 million, respectively, of interest income in respect of its investment in Signal Peak CLO.

NOTE E—DEBT

Summary of debt as of September 30, 2022 is as follows:

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

			Outstanding Balance						Unamortized Debt Issuance Costs (2)						Recorded Value						Estimated Fair Value (1)
			(dollars in thousands)
JPM SPV Facility			$	267,688					$	—					$	267,688					$	267,688
Series A Notes			150,000						(1,218)						148,782						133,451
TIAA Credit Facility			85,000						—						85,000						85,000
Total Debt			$	502,688					$	(1,218)					$	501,470					$	486,139

_________________

(1)Estimated fair value for outstanding debt if the Company had adopted the fair value option under ASC 825. See discussion of the methods used to estimate the fair value of the Company’s debt in Note B.9.—Summary of Significant Accounting Policies—Fair Value of Financial Instruments.

(2)The unamortized debt issuance costs for the Credit Facilities are reflected as Deferred financing costs on the Consolidated Balance Sheets, while the deferred debt issuance costs related to the Series A Notes are reflected as a direct deduction to the Series A Notes on the Consolidated Balance Sheets.

Summary of debt as of December 31, 2021 is as follows:

			Outstanding Balance						Unamortized Debt Issuance Costs (2)						Recorded Value						Estimated Fair Value (1)
			(dollars in thousands)
JPM SPV Facility			$	273,688					$	—					$	273,688					$	273,688
Series A Notes			77,500						(1,316)						76,184						77,491
TIAA Credit Facility			153,000						—						153,000						153,000
Total Debt			$	504,188					$	(1,316)					$	502,872					$	504,179

___________________

(1)Estimated fair value for outstanding debt if the Company had adopted the fair value option under ASC 825. See discussion of the methods used to estimate the fair value of the Company’s debt in Note B.9.—Summary of Significant Accounting Policies—Fair Value of Financial Instruments.

(2)The unamortized debt issuance costs for the Credit Facilities are reflected as Deferred financing costs on the Consolidated Balance Sheets, while the deferred debt issuance costs related to the Series A Notes are reflected as a direct deduction to the Series A Notes on the Consolidated Balance Sheets.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

Summarized interest expense for the three and nine months ended September 30, 2022 and 2021 is as follows:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			(dollars in thousands)
JPM SPV Facility			$	3,944					$	2,257					$	9,217					$	5,830
Series A Notes			1,573						—						4,569						—
TIAA Credit Facility			1,284						751						2,865						1,706
Deutsche Bank Credit Facility(1)			—						—						—						1,046
Main Street Term Loan(2)			—						751						—						1,641
Total Interest Expense			$	6,801					$	3,759					$	16,651					$	10,223

_________________

(1)Deutsche Bank Credit Facility was fully repaid and extinguished on February 3, 2021.

(2)Main Street Term Loan was fully repaid and extinguished on October 22, 2021.

TIAA Credit Facility

The Company is a party to a senior secured revolving credit agreement dated March 6, 2017 (as amended, the “TIAA Credit Facility”) with TIAA, FSB (“TIAA Bank”), as administrative agent, and with TIAA Bank and other financial institutions as lenders. As of September 30, 2022, the TIAA Credit Facility included (i) total commitments of $165.0 million, (ii) an accordion feature with the right to request an increase of commitments under the facility from new and existing lenders on the same terms and conditions as the existing commitments up to $200.0 million of total commitments and (iii) a revolving period and maturity date to September 1, 2025 and March 1, 2026, respectively, with two, one-year extension options with lender approval.

Borrowings under the TIAA Credit Facility bear interest, subject to the Company’s election, on a per annum basis at a rate equal to (i) LIBOR plus 2.40% or (ii) the base rate plus 1.40%. The base rate is defined as the higher of (a) the Prime rate, (b) the Federal Funds Rate (as defined in the credit agreement) plus 0.5% or (c) LIBOR plus 1.0%. Additionally, the Company pays an annual unused commitment fee of 0.30% on the unused revolver commitments if more than 50% or more of the revolver commitments are being used and an annual unused commitment fee of 0.625% on the unused revolver commitments if less than 50% of the revolver commitments are being used.

The TIAA Credit Facility permits the creation of certain “Structured Subsidiaries,” which are not guarantors under the TIAA Credit Facility and which are permitted to incur debt outside of the TIAA Credit Facility. Borrowings under the TIAA Credit Facility are secured by all of the Company’s assets, other than the assets of Structured Subsidiaries, or immaterial subsidiaries, as well as all of the assets, and a pledge of equity ownership interests, of any future subsidiaries of the Company (other than Structured Subsidiaries or immaterial subsidiaries). The TIAA Credit Facility contains affirmative and negative covenants usual and customary for credit facilities of this nature, including: (i) maintaining a minimum interest coverage ratio of at least 2.00 to 1.00; (ii) maintaining an asset coverage ratio of at least 2.00 to 1.00; and (iii) maintaining a minimum consolidated tangible net worth, excluding Structured Subsidiaries, of at least the greater of (a) the aggregate amount of the revolver commitments or (b) $50.0 million. Further, the TIAA Credit Facility contains limitations on incurrence of other indebtedness (other than by the Structured Subsidiaries), limitations on industry concentration, and an anti hoarding provision to protect the collateral under the TIAA Credit Facility. Additionally, the Company must provide information to TIAA Bank on a regular basis, preserve its corporate existence, comply with applicable laws, including the 1940 Act, pay obligations when they become due, and invest the proceeds of the sales of common stock in accordance with its investment objectives and strategies (as set forth in the TIAA Credit Facility). Further, the credit agreement contains usual and customary default provisions including: (i) a default in the payment of interest and principal; (ii) insolvency or bankruptcy of the Company; (iii) a material adverse change in the Company’s business; or (iv) breach of any covenant, representation or warranty in the loan agreement or other credit documents and failure to cure such breach within defined periods. Additionally, the TIAA Credit Facility requires the

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Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

Company to obtain written approval from the administrative agent prior to entering into any material amendment, waiver or other modification of any provision of the Investment Advisory Agreement.

As of September 30, 2022, the interest rate on the TIAA Credit Facility was 4.96%. The average interest rate for borrowings under the TIAA Credit Facility was 4.61% and 2.67% per annum for the three months ended September 30, 2022 and 2021, respectively, and 3.45% and 2.71% per annum for the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, the Company was in compliance with all financial covenants of the TIAA Credit Facility.

JPM SPV Facility

On February 3, 2021, MSIF Funding LLC (“MSIF Funding”), a wholly-owned Structured Subsidiary that primarily holds originated loan investments, entered into a senior secured revolving credit facility (as amended from time to time, the “JPM SPV Facility” and, together with the TIAA Credit Facility, the “Credit Facilities”) by and among JPMorgan Chase Bank, National Association (“JPM”), as administrative agent, and U.S. Bank, N.A., as collateral agent and collateral administrator and the Company as portfolio manager. The revolving period under the JPM SPV Facility expires on February 3, 2024 and the JPM SPV Facility is scheduled to mature on February 3, 2025. Advances under the JPM SPV Facility bear interest at a per annum rate equal to the three month LIBOR in effect, plus the applicable margin of 2.90% per annum. MSIF Funding also pays a commitment fee of 0.75% per annum on the average daily unused amount of the financing commitments until the third anniversary of the JPM SPV Facility. As of September 30, 2022, the JPM SPV Facility included total commitments of $325.0 million and an accordion feature, subject to the satisfaction of various conditions, which could bring total commitments and borrowing availability to up to $450.0 million.

As of September 30, 2022, the interest rate on the JPM SPV Facility, excluding amortization of deferred financing costs and unused fees, was 5.18%. The average cost of borrowings on the JPM SPV Facility, excluding amortization of deferred financing costs and unused fees, was 5.18% and 3.04% per annum for the three months ended September 30, 2022 and September 30, 2021, respectively, and 4.07% and 3.08% per annum for the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, the Company was in compliance with all financial covenants of the JPM SPV Facility.

Series A Notes

On October 22, 2021, the Company and certain qualified institutional investors entered into a Master Note Purchase Agreement (the “Note Purchase Agreement”), which governs the issuance of $150.0 million in aggregate principal amount of the Company’s 4.04% Series A Senior Notes due 2026 (the “Series A Notes”). The Series A Notes bear a fixed interest rate of 4.04% per year and will mature on October 30, 2026, unless redeemed, purchased or prepaid prior to such date by the Company in accordance with their terms. The Company issued $77.5 million of Series A Notes upon entering into the Note Purchase Agreement, and issued an additional $72.5 million on January 21, 2022. Net proceeds from the Series A Note issuances were used to repay outstanding debt borrowed under the Main Street Term Loan (as defined below), which was fully repaid and extinguished in October 2021, and the TIAA Credit Facility.

Interest on the Series A Notes is due semiannually on April 30 and October 30 each year, beginning on April 30, 2022. The Series A Notes may be redeemed in whole or in part at any time or from time to time at the Company’s option at par plus accrued interest to the prepayment date and, if applicable, a make-whole premium. In addition, the Company is obligated to offer to prepay the Series A Notes at par plus accrued and unpaid interest up to, but excluding, the date of prepayment, if certain change in control events occur. The Series A Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.

The Note Purchase Agreement contains customary terms and conditions for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a BDC within the meaning of the 1940 Act, a minimum asset coverage ratio of 2.00 to 1.00, subject to reduction to 1.50 to 1.00 upon the Company obtaining the approval required under the 1940 Act, a minimum interest coverage ratio of 2.00 to 1.00, which may be reduced to 1.25 to 1.00 under certain conditions, and

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Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

minimum unsecured debt coverage ratio of 1.25 to 1.00. In addition, in the event that a Below Investment Grade Event (as defined in the Note Purchase Agreement) occurs, the Series A Notes will bear interest at a fixed rate of 5.04% per year from the date of the occurrence of the Below Investment Grade Event to and until the date on which the Below Investment Grade Event ends.

The Note Purchase Agreement also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under other indebtedness of the Company or subsidiary guarantors subject to a cure pass-through, certain judgments and orders and certain events of bankruptcy. As of September 30, 2022, the Company was in compliance with these covenants.

Main Street Term Loan

On January 27, 2021, the Company entered into a term loan agreement (the “Main Street Term Loan”) with Main Street, which initially provided up to an aggregate principal amount of $40.0 million in borrowings. The Company paid a 1.0% upfront fee to Main Street on the closing date. On July 27, 2021, the Company entered into an amendment to the Main Street Term Loan that allowed the Company to draw an additional $20.0 million, with another $15.0 million available to be drawn in two separate $7.5 million tranches (each a “Delayed Draw Term Loan”) at a later date.

Borrowings under the Main Street Term Loan were expressly subordinated and junior in right of payment to all secured indebtedness of the Company. On October 22, 2021, in connection with the issuance of the Series A Notes (discussed above), the Company fully repaid all borrowings outstanding under the Main Street Term Loan, and the Main Street Term Loan was extinguished. As a result, the Company recorded a loss on the extinguishment of debt in the amount of $0.3 million, which represented the write-off of the unamortized deferred financing fees related to the Main Street Term Loan.

Deutsche Bank Credit Facility

On May 18, 2015, HMS Funding I LLC (“HMS Funding”), a wholly-owned Structured Subsidiary, entered into an amended and restated credit agreement (as amended, the “Deutsche Bank Credit Facility”) among HMS Funding, as borrower, the Company, as equity holder and as servicer, Deutsche Bank AG, New York Branch (“Deutsche Bank”), as administrative agent, the financial institutions party thereto as lenders (together with Deutsche Bank, the “HMS Funding Lenders”), and U.S. Bank National Association, as collateral agent and collateral custodian. On February 3, 2021, the total amount outstanding on the facility under the Deutsche Bank Credit Facility was fully repaid. As a result, the Company recorded a loss on the extinguishment of debt in the amount of $2.1 million, which represented the write-off of the unamortized deferred financing fees related to the Deutsche Bank Credit Facility.

For the nine months ended September 30, 2021, the average cost of borrowings on the Deutsche Bank Credit Facility was 2.93% per annum.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

NOTE F—FINANCIAL HIGHLIGHTS

			Nine Months Ended September 30,
Per Share Data:			2022						2021
NAV at the beginning of the period			$	7.68					$	7.28
Net investment income(1)			0.48						0.49
Net realized gain (loss)(1)(2)			0.10						(0.08)
Net unrealized appreciation (depreciation)(1)(2)			(0.14)						0.25
Income tax benefit (provision)(1)(2)			(0.02)						—
Net increase in net assets resulting from operations(1)			0.42						0.66
Dividends paid from net investment income			(0.40)						(0.38)
Distributions from capital gains			(0.08)						(0.01)
Dividends paid or accrued(3)			(0.48)						(0.39)
Other(4)			—						0.01
NAV at the end of the period			$	7.62					$	7.56
Shares outstanding at the end of the period			80,059,079						79,756,378

________________

(1)Based on weighted-average number of common shares outstanding for the period.

(2)Net realized gains or losses, net unrealized appreciation or depreciation, and income taxes can fluctuate significantly from period to period.

(3)Represents stockholder dividends paid or accrued for the period.

(4)Includes the impact of the different share amounts as a result of calculating certain per share data based on the weighted-average basic shares outstanding during the period and certain per share data based on the shares outstanding as of a period end or transaction date.

			Nine Months Ended September 30,
			2022						2021
			(dollars in thousands)
NAV at end of period			$	609,748					$	603,349
Average NAV			$	611,601					$	591,476
Average outstanding debt			$	497,038					$	293,110
Ratios to average NAV:
Ratio of total expenses, including income tax expense, to average NAV(1)(2)(3)(5)			6.03		%				4.14		%
Ratio of operating expenses to average NAV(2)(3)(5)			5.73		%				4.43		%
Ratio of operating expenses, excluding interest expense, to average NAV(2)(3)(5)			3.01		%				2.70		%
Ratio of net investment income to average NAV(2)			6.34		%				6.65		%
Portfolio turnover ratio(2)			14.13		%				19.99		%
Total return based on change in NAV(2)(4)			5.43		%				9.00		%

_______________

(1)Total expenses are the sum of operating expenses and net income tax provision/benefit. Net income tax provision/benefit includes the accrual of net deferred tax provision/benefit relating to the net unrealized appreciation/depreciation on portfolio investments held in Taxable Subsidiaries and due to the change in the loss carryforwards, which are non-cash in nature and may vary significantly from period to period. The Company is required to include

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

net deferred tax provision/benefit in calculating its total expenses even though these net deferred taxes are not currently payable/receivable.

(2)Not annualized.

(3)Unless otherwise noted, operating expenses include interest, management fees and general and administrative expenses.

(4)Total return is calculated based on the change in NAV per share and stockholder distributions declared per share during the reporting period, divided by the NAV per share at the beginning of the period. The total return does not reflect the sales load from the sale of the Company’s common stock.

(5)Net of expense waivers of $3.4 million and $3.2 million for the nine months ended September 30, 2022 and September 30, 2021, respectively. Excluding these expense waivers, the expense and income ratios are as follows:

			Nine Months Ended September 30,
			2022						2021
Ratio of total expenses, including income tax expense, to average NAV(1)(2)(3)			6.59		%				5.20		%
Ratio of operating expenses to average NAV(2)(3)			6.28		%				4.99		%
Ratio of operating expenses excluding interest expense to average NAV(2)(3)			3.57		%				3.26		%
Ratio of net investment income to average NAV(2)			5.77		%				6.10		%
Total return based on change in NAV(2)(4)			4.87		%				8.51		%

________________

See footnotes (1), (2), (3) and (4) immediately prior to this table.

NOTE G—DIVIDENDS, DISTRIBUTIONS AND TAXABLE INCOME

The Company currently pays quarterly dividends to its stockholders. Future quarterly dividends, if any, will be determined by its Board of Directors on a quarterly basis. The Company paid or accrued dividends to its common stockholders of $12.8 million, or $0.16 per share, during the three months ended September 30, 2022, and $38.8 million, or $0.485 per share, during the nine months ended September 30, 2022, compared to $12.0 million, or $0.150 per share, during the three months ended September 30, 2021, and $29.9 million, or $0.375 per share, during the nine months ended September 30, 2021.

MSC Income Fund has elected to be treated for U.S. federal income tax purposes as a RIC. MSC Income Fund’s taxable income includes the taxable income generated by MSC Income Fund and certain of its subsidiaries which are treated as disregarded entities for tax purposes. As a RIC, MSC Income Fund generally will not pay corporate-level U.S. federal income taxes on any net ordinary taxable income or capital gains that MSC Income Fund distributes to its stockholders. MSC Income Fund must generally distribute at least 90% of its “investment company taxable income” (which is generally its net ordinary taxable income and realized net short-term capital gains in excess of realized net long-term capital losses) and 90% of its tax-exempt income to maintain its RIC status (pass-through tax treatment for amounts distributed). As part of maintaining RIC status, undistributed taxable income (subject to a 4% non-deductible U.S. federal excise tax) pertaining to a given fiscal year may be distributed up to twelve months subsequent to the end of that fiscal year, provided such dividends are declared on or prior to the later of (i) filing of the U.S. federal income tax return for the applicable fiscal year or (ii) the fifteenth day of the ninth month following the close of the year in which such taxable income was generated.

The determination of the tax attributes for MSC Income Fund’s distributions is made annually, based upon its taxable income for the full year and distributions paid for the full year. Therefore, a determination made on an interim basis may not be representative of the actual tax attributes of distributions for a full year. Ordinary dividend distributions from a RIC do not qualify for the 20% maximum tax rate (plus a 3.8% Medicare surtax, if applicable) on dividend

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

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 attributes for distributions will generally include both ordinary income and qualified dividends, but may also include either one or both of capital gains and return of capital.

Listed below is a reconciliation of “Net increase in net assets resulting from operations” to taxable income and to total distributions declared to common stockholders for the nine months ended September 30, 2022 and 2021.

			Nine Months Ended September 30,
			2022						2021
			(estimated, dollars in thousands)
Net increase in net assets resulting from operations			$	33,303					$	52,448
Net unrealized (appreciation) depreciation			11,452						(20,363)
Income tax provision			1,880						1,283
Pre-tax book income not consolidated for tax purposes			(11,403)						(10,763)
Book income and tax income differences, including debt origination, structuring fees, dividends, realized gains and changes in estimates			893						3,437
Estimated taxable income (1)			36,125						26,042
Taxable income earned in prior year and carried forward for distribution in current year			23,276						29,173
Taxable income earned prior to period end and carried forward for distribution next period			(33,421)						(37,290)
Dividend accrued as of period end and paid in the following period			12,809						11,964
Taxable income earned to be carried forward			(20,612)						(25,326)
Total distributions accrued or paid to common stockholders			$	38,789					$	29,889

________________

(1)MSC Income Fund’s taxable income for each period is an estimate and will not be finally determined until MSC Income Fund files its tax return for each year. Therefore, the final taxable income, and the taxable income earned in each period and carried forward for distribution in the following period, may be different than this estimate.

The Taxable Subsidiaries primarily hold certain portfolio equity investments for the Company. The Taxable Subsidiaries permit the Company to hold equity investments in portfolio companies which are “pass-through” entities for tax purposes and to continue to comply with the “source-of-income” requirements contained in the RIC tax provisions of the Code. The Taxable Subsidiaries are consolidated with MSC Income Fund for U.S. GAAP financial reporting purposes, and the portfolio investments held by the Taxable Subsidiaries are included in the Company’s consolidated financial statements as portfolio investments and recorded at fair value. The Taxable Subsidiaries are not consolidated with MSC Income Fund for income tax purposes and may generate income tax expense, or benefit, and tax assets and liabilities, as a result of their ownership of certain portfolio investments. The taxable income, or loss, of the Taxable Subsidiaries may differ from their book income, or loss, due to temporary book and tax timing differences and permanent differences. The Taxable Subsidiaries are each taxed at corporate income tax rates based on their taxable income. The income tax expense, or benefit, if any, and the related tax assets and liabilities, of the Taxable Subsidiaries are reflected in the Company’s consolidated financial statements.

The income tax expense (benefit) for the Company is generally composed of (i) deferred tax expense (benefit), which is primarily the result of the net activity relating to the portfolio investments held in the Taxable Subsidiaries, including changes in loss carryforwards, changes in net unrealized appreciation or depreciation and other temporary book tax differences, and (ii) current tax expense, which is primarily the result of current U.S. federal income and state taxes and excise taxes on the Company’s estimated undistributed taxable income. The income tax expense, or benefit, and the related tax assets and liabilities generated by the Taxable Subsidiaries, if any, are reflected in the Company’s

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

Consolidated Statements of Operations. The Company’s provision for income taxes was comprised of the following for the three and nine months ended September 30, 2022 and 2021 (amounts in thousands):

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
Current tax expense (benefit):
Federal			$	190					$	—					$	194					$	—
State			169						82						484						251
Excise			219						371						881						1,032
Total current tax expense			578						453						1,559						1,283
Deferred tax expense (benefit):
Federal			131						—						298						—
State			13						—						23						—
Total deferred tax expense			144						—						321						—
Total income tax provision			$	722					$	453					$	1,880					$	1,283

The net deferred tax liability at September 30, 2022 and December 31, 2021 was $0.3 million and $0, respectively, with the change primarily related to changes in net unrealized appreciation or depreciation, changes in loss carryforwards and other temporary book-tax differences relating to portfolio investments held by the Taxable Subsidiaries. The Company recorded a valuation allowance to reduce the carrying value of certain deferred tax assets to the amount that more likely than not can be realized.

At September 30, 2022, for U.S. federal income tax purposes, the Taxable Subsidiaries had net operating loss carryforwards generated in 2019 and future periods that are not subject to expiration. The net operating losses will carryforward indefinitely until utilized. The net capital loss carryforwards of the Company will expire in various taxable years 2023 through 2025. Additionally, the Taxable Subsidiaries have interest expense limitation carryforwards which have an indefinite carryforward period.

NOTE H—SHARE REPURCHASE PROGRAM

Prior to March 31, 2020, the Company historically conducted quarterly tender offers pursuant to its share repurchase program. On March 31, 2020, the Company’s Board of Directors unanimously approved a temporary suspension of the Company’s share repurchase program commencing with the second quarter of 2020. The Company’s Board of Directors determined that it was in the best interest of the Company to suspend the share repurchase program in order to preserve financial flexibility and liquidity given the potential prolonged impact of COVID-19. From April 2020 through March 2021, the share repurchase program remained suspended due to the impacts of the COVID-19 pandemic. On March 8, 2021, the Company announced that the Board of Directors approved the reinstatement of the share repurchase program following the payment of the dividend declared by the Board of Directors for payment on April 1, 2021, and the Company has conducted quarterly tender offers pursuant to its share repurchase program since then.

Under the terms of the reinstated share repurchase program, the Company offers to purchase shares at the NAV per share on the repurchase date. The amount of shares of the Company’s common stock to be repurchased during any calendar quarter may be equal to the lesser of (i) the number of shares of common stock the Company could repurchase with the proceeds it received from the issuance of common stock under the Company’s dividend reinvestment plan or (ii) 2.5% of the weighted-average number of shares of common stock outstanding in the prior four calendar quarters. Upon resuming making offers to repurchase shares pursuant to the share repurchase program in April 2021, the Company has limited repurchase offers to the number of shares of common stock it can repurchase with 90% of the cash retained as a result of issuances of common stock under the Company’s dividend reinvestment plan.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

At the discretion of the Board of Directors, the Company may also use cash on hand, cash available from borrowings and cash from the sale of investments as of the end of the applicable period to repurchase shares. The Company’s Board of Directors may amend, suspend or terminate the share repurchase program upon 30 days’ notice. Since inception of its share repurchase program, the Company has funded the repurchase of $125.0 million in shares of common stock as of September 30, 2022. For the three months ended September 30, 2022 and 2021, the Company funded $4.0 million and $3.3 million, respectively, for shares of its common stock tendered for repurchase under the plan. For the nine months ended September 30, 2022 and 2021, the Company funded $12.0 million and $6.2 million, respectively, for shares of its common stock tendered for repurchase under the plan.

NOTE I—DIVIDEND REINVESTMENT PLAN

The Company has adopted a dividend reinvestment plan (the “DRIP”) that provides for the reinvestment of dividends on behalf of stockholders. As a result, if the Company declares a cash dividend, stockholders who have “opted in” to the DRIP will have their cash dividend automatically reinvested into additional shares of MSC Income Fund common stock. The number of shares of common stock to be issued to a stockholder under the DRIP shall be determined by dividing the total dollar amount of the distribution payable to such stockholder by a price per share of common stock determined by the Company’s Board of Directors or a committee thereof, in its sole discretion, that is (i) not less than the net asset value per share of common stock determined in good faith by the Board of Directors or a committee thereof, in its sole discretion, within 48 hours prior to the payment of the distribution (the “NAV per share”) and (ii) not more than 2.5% greater than the NAV per share as of such date.

Summarized DRIP information for the nine months ended September 30, 2022 and 2021 is as follows:

			Nine Months Ended September 30,
			2022						2021
			($ in millions)
DRIP participation			$	13.3					$	6.8
Shares issued for DRIP			1,690,381						902,764

NOTE J—COMMITMENTS AND CONTINGENCIES

At September 30, 2022, the Company had the following outstanding commitments (in thousands):

Investments with equity capital commitments that have not yet funded:						Amount
Brightwood Capital Fund III, LP						$	100
Freeport First Lien Loan Fund III LP						4,871
HPEP 3, L.P.						1,555
Total Equity Commitments						$	6,526
Investments with commitments to fund revolving loans that have not been fully drawn or term loans with additional commitments not yet funded:
Winter Services LLC						$	5,556
MB2 Dental Solutions, LLC						3,500
CaseWorthy, Inc.						3,400
Infolinks Media Buyco, LLC						3,150
NinjaTrader, LLC						3,078

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

HEADLANDS OP-CO LLC						3,000
Mako Steel, LP						2,275
Roof Opco, LLC						1,944
NWN Corporation						1,919
SI East, LLC						1,750
American Health Staffing Group, Inc.						1,667
GRT Rubber Technologies LLC						1,650
Xenon Arc, Inc.						1,600
Evergreen North America Acquisitions, LLC						1,548
Dalton US Inc.						1,393
IG Parent Corporation						1,388
KMS, LLC						1,357
RA Outdoors LLC						1,235
Bettercloud, Inc.						1,216
Burning Glass Intermediate Holding Company, Inc.						1,136
MonitorUS Holding, LLC						1,041
SPAU Holdings, LLC						1,000
Paragon Healthcare, Inc.						858
Student Resource Center, LLC						833
Engineering Research & Consulting, LLC						786
DTE Enterprises, LLC						750
JTI Electrical & Mechanical, LLC						702
Watterson Brands, LLC						686
West Star Aviation Acquisition, LLC						667
PTL US Bidco, Inc						625
VVS Holdco, LLC						600
Centre Technologies Holdings, LLC						600
Cody Pools, Inc.						550
Flip Electronics LLC						545
Adams Publishing Group, LLC						518
AB Centers Acquisition Corporation						517
Robbins Bros. Jewelry, Inc.						500
The Affiliati Network, LLC						500
Wall Street Prep, Inc.						500
Interface Security Systems, L.L.C						439
Microbe Formulas, LLC						434
Trantech Radiator Topco, LLC						400
Chamberlin Holding LLC						400
Colonial Electric Company LLC						400
AVEX Aviation Holdings, LLC						400
AMEREQUIP LLC.						391
South Coast Terminals Holdings, LLC						381
Invincible Boat Company, LLC.						353
SIB Holdings, LLC						334
Batjer TopCo, LLC						300

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

Gamber-Johnson Holdings, LLC						300
Acumera, Inc.						253
ATS Operating, LLC						250
Dynamic Communities, LLC						250
Archer Systems, LLC						206
Hawk Ridge Systems, LLC						204
Mystic Logistics Holdings, LLC						200
Career Team Acquireco LLC						200
Johnson Downie Opco, LLC						200
Orttech Holdings, LLC						200
Gulf Publishing Holdings, LLC						100
Flame King Holdings, LLC						100
Channel Partners Intermediateco, LLC						95
Classic H&G Holdco, LLC						60
Datacom, LLC						25
Total Loan Commitments						$	63,415
Total Commitments						$	69,941

The Company will fund its unfunded commitments from the same sources it uses to fund its investment commitments that are funded at the time they are made (which are typically through existing cash and cash equivalents and borrowings under the Credit Facilities). The Company follows a process to manage its liquidity and ensure that it has available capital to fund its unfunded commitments as necessary. The Company had no unrealized appreciation or depreciation on the outstanding unfunded commitments as of September 30, 2022.

The Company may, from time to time, be involved in litigation arising out of its operations in the normal course of business or otherwise. Furthermore, third parties may try to impose liability on the Company in connection with the activities of its portfolio companies. While the outcome of any current legal proceedings cannot at this time be predicted with certainty, the Company does not expect any current matters will materially affect its financial condition or results of operations; however, there can be no assurance whether any pending legal proceedings will have a material adverse effect on the Company’s financial condition or results of operations in any future reporting period.

NOTE K - RELATED PARTY TRANSACTIONS

1.Advisory Agreements and Conditional Fee and Expense Reimbursement Waivers

On October 30, 2020, the Company entered into the Investment Advisory Agreement with the Adviser which states that the Adviser will oversee the management of the Company’s activities and is responsible for making investment decisions with respect to, and providing day-to-day management and administration of, the Company’s investment portfolio.

Pursuant to the Investment Advisory Agreement, the Company pays the Adviser a base management fee and incentive fees as compensation for the services described above. The base management fee is calculated at an annual rate of 1.75% of the Company’s average gross assets. The term “gross assets” means total assets of the Company as disclosed on the Company’s Consolidated Balance Sheets. “Average gross assets” are calculated based on the Company’s gross assets at the end of the two most recently completed calendar quarters. The base management fee is payable quarterly in arrears. The base management fee is expensed as incurred.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

The incentive fee under the Investment Advisory Agreement consists of two parts. The first part, referred to as the subordinated incentive fee on income, is calculated and payable quarterly in arrears based on Pre-Incentive Fee Net Investment Income (as defined below) for the immediately preceding quarter. The subordinated incentive fee on income is equal to 20.0% of the Company’s Pre-Incentive Fee Net Investment Income for the immediately preceding quarter, expressed as a quarterly rate of return on adjusted capital at the beginning of the most recently completed calendar quarter, exceeding 1.875% (or 7.5% annualized), subject to a “catch up” feature (as described below).

For this purpose, Pre-Incentive Fee Net Investment Income means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the Company’s operating expenses for the quarter (including the management fee, expenses payable under any proposed administration agreement and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding taxes and the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as original issue discount debt instruments and PIK interest and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes of this fee, adjusted capital means cumulative gross proceeds generated from sales of the Company’s common stock (including proceeds from the Company’s dividend reinvestment plan) reduced for non-liquidating distributions, other than distributions of profits, paid to the Company’s stockholders and amounts paid for share repurchases pursuant to the Company’s share repurchase program. The subordinated incentive fee on income is expensed in the quarter in which it is incurred.

The calculation of the subordinated incentive fee on income for each quarter is as follows:

•No subordinated incentive fee on income shall be payable to the Adviser in any calendar quarter in which the Company’s Pre-Incentive Fee Net Investment Income does not exceed the hurdle rate of 1.875% (or 7.5% annualized) on adjusted capital;

•100% of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate but is less than or equal to 2.34375% in any calendar quarter (9.375% annualized) shall be payable to the Adviser. This portion of the subordinated incentive fee on income is referred to as the “catch up” and is intended to provide the Adviser with an incentive fee of 20.0% on all of the Company’s Pre-Incentive Fee Net Investment Income as if the hurdle rate did not apply when the Pre-Incentive Fee Net Investment Income exceeds 2.34375% (9.375% annualized) in any calendar quarter; and

•For any quarter in which the Company’s Pre-Incentive Fee Net Investment Income exceeds 2.34375% (9.375% annualized), the subordinated incentive fee on income shall equal 20.0% of the amount of the Company’s Pre-Incentive Fee Net Investment Income, as the hurdle rate and catch-up will have been achieved.

The second part of the incentive fee, referred to as the incentive fee on capital gains, is an incentive fee on realized capital gains earned from the portfolio of the Company and is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement). This fee equals 20.0% of the Company’s incentive fee capital gains, which equals the Company’s realized capital gains on a cumulative basis from inception, calculated as of the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees. At the end of each reporting period, the Company estimates the incentive fee on capital gains and accrues the fee based on a hypothetical liquidation of its portfolio. Therefore, the accrual includes both net realized gains and net unrealized gains (the net unrealized difference between the fair value and the par value of its portfolio), if any. The incentive fee accrued pertaining to the unrealized gain is neither earned nor payable to the Adviser until such time it is realized.

For the three months ended September 30, 2022 and 2021, the Company incurred base management fees of $5.0 million and $4.5 million, respectively. For both of the three months ended September 30, 2022 and 2021, the Company did not incur any subordinated incentive fees on income or any capital gains incentive fees. For the nine months ended September 30, 2022 and 2021, the Company incurred base management fees of $14.9 million and $12.5 million,

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

respectively. For both of the nine months ended September 30, 2022 and 2021, the Company did not incur any subordinated incentive fees on income or any capital gains incentive fees.

Pursuant to the Investment Advisory Agreement, the Company is required to pay or reimburse the Adviser for administrative services expenses, which include all costs and expenses related to the Company’s day-to-day administration and management not related to advisory services, whether such administrative services were performed by a third-party service provider or the Adviser or its affiliates (to the extent performed by the Adviser, or its affiliates, the “Internal Administrative Services”). Internal Administrative Services include, but are not limited to, the cost of the Adviser’s personnel performing accounting and compliance functions and other administrative services on behalf of the Company.

The Adviser waived reimbursement of all Internal Administrative Services expenses from October 30, 2020 through December 31, 2021. On January 1, 2022, the Adviser assumed responsibility of certain administrative services that were previously provided for the Company by a third-party sub-administrator. From January 1, 2022 through September 30, 2022, the Adviser continued to waive reimbursement of all Internal Administrative Services expenses, except for the cost of the services previously provided by the sub-administrator. For the three months ended September 30, 2022 and 2021, the Company incurred Internal Administrative Services Expenses of $1.4 million and $1.2 million, respectively. For the nine months ended September 30, 2022 and 2021, the Company incurred Internal Administrative Services Expenses of $3.9 million and $3.2 million, respectively. For the three months ended September 30, 2022 and 2021, the Adviser waived the reimbursements of Internal Administrative Services expenses of $1.3 million and $1.2 million, respectively. For the nine months ended September 30, 2022 and 2021, the Adviser waived the reimbursements of Internal Administrative Services expenses of $3.4 million and $3.2 million, respectively. Waived Internal Administrative Services expenses are permanently waived and are not subject to future reimbursement.

2.Offering Costs

In accordance with the investment advisory agreement (the “Original Investment Advisory Agreement”) with HMS Adviser LP, the Company’s previous investment adviser (“HMS Adviser”), the Company reimbursed HMS Adviser for any offering costs that were paid on the Company’s behalf, which consisted of, among other costs, actual legal, accounting, bona fide out-of-pocket itemized and detailed due diligence costs, printing, filing fees, transfer agent costs, postage, escrow fees, advertising and sales literature and other costs incurred in connection with the offering of the Company’s common stock, including through the Company’s dividend reinvestment plan. HMS Adviser was responsible for the payment of offering costs to the extent they exceeded 1.5% of the aggregate gross stock offering proceeds. Pursuant to the transaction whereby the Adviser became the investment adviser to the Company, HMS Adviser agreed to permanently waive reimbursement of organizational and offering expenses except for $0.6 million which remained payable to HMS Adviser and would be reimbursed as part of future issuances of common stock by the Company. For the three months ended September 30, 2022, the Company reimbursed HMS Adviser $0.1 million in connection with stock issuances. For the nine months ended September 30, 2022, the Company reimbursed HMS Adviser $0.2 million in connection with stock issuances. For the three months ended September 30, 2021, the Company made no reimbursements to HMS Adviser in connection with stock issuances. For the nine months ended September 30, 2021, the Company reimbursed HMS Adviser $0.1 million in connection with stock issuances. As of September 30, 2022, $0.2 million of the Company’s reimbursement obligation to HMS Adviser for organizational and offering expenses remained outstanding.

3.Indemnification

The Investment Advisory Agreement provides that the Adviser and its officers, directors, controlling persons and any other person or entity affiliated with it acting as the Company’s agent are entitled to indemnification (including reasonable attorneys’ fees and amounts reasonably paid in settlement) for any liability or loss suffered by such indemnitee, and such indemnitee will be held harmless for any loss or liability suffered by the Company, if (i) the indemnitee has determined, in good faith, that the course of conduct which caused the loss or liability was in the Company’s best interests, (ii) the indemnitee was acting on behalf of or performing services for the Company, (iii) the liability or loss suffered was not the result of negligence, willful malfeasance, bad faith or misconduct by the indemnitee

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

or an affiliate thereof acting as the Company’s agent and (iv) the indemnification or agreement to hold the indemnitee harmless is only recoverable out of the Company’s net assets and not from the Company’s stockholders.

4.Co-Investment

In the ordinary course of business, the Company enters into transactions with other parties that may be considered related party transactions. The Company has implemented certain policies and procedures, both written and unwritten, to ensure that it does not engage in any prohibited transactions with any persons affiliated with the Company. If such affiliations are found to exist, the Company seeks the Board of Directors and/or appropriate Board of Directors committee review and approval for such transactions and otherwise comply with, or seek, orders for exemptive relief from the SEC, as appropriate.

The Company has received an exemptive order from the SEC permitting co-investments among the Company, Main Street and other funds and clients advised by the Adviser in certain negotiated transactions where co-investing would otherwise be prohibited under the 1940 Act. The Company has made co-investments, and in the future intends to continue to make co-investments with Main Street and other funds and clients advised by the Adviser, in accordance with the conditions of the order. The order requires, among other things, that the Adviser and Main Street consider whether each such investment opportunity is appropriate for the Company, Main Street and the other funds and clients advised by the Adviser, as applicable, and if it is appropriate, to propose an allocation of the investment opportunity between such parties. Because the Adviser is wholly-owned by Main Street and is not managing the Company’s investment activities as its sole activity, this may provide the Adviser an incentive to allocate opportunities to other participating funds and clients instead of the Company. However, the Adviser has policies and procedures in place to manage this conflict, including oversight by the independent members of the Board of Directors. Additional information regarding the operation of the co-investment program is set forth in the order granting exemptive relief, which may be reviewed on the SEC’s website at www.sec.gov. In addition to the co-investment program described above, the Company also co-invests in syndicated deals and other transactions where price is the only negotiated point by the Company and its affiliates.

5.Other Related Party Transactions

On January 27, 2021, the Company entered into the Main Street Term Loan, which initially provided for an aggregate principal amount of $40.0 million in borrowings. The Company paid a 1.0% upfront fee to Main Street on the closing date.

On July 27, 2021, the Company entered into an amendment to the Main Street Term Loan that allowed the Company to initially draw an additional $20.0 million, with another $15.0 million available to be drawn in two separate $7.5 million tranches at a later date. Following the amendment, as of September 30, 2021, the aggregate principal amount outstanding under the Main Street Term Loan was $60.0 million bearing interest at a fixed rate of 5.00% per annum and maturing on January 27, 2026.

Borrowings under the Main Street Term Loan were expressly subordinated and junior in right of payment to all secured indebtedness of the Company. The Main Street Term Loan was unanimously approved by the Board of Directors, including each director who is not an “interested person,” as such term is defined in Section 2(a)(19) of the 1940 Act, of the Company or the Adviser. On October 22, 2021, the Company fully repaid all borrowings outstanding under the Main Street Term Loan and the Main Street Term Loan was extinguished.

On May 2, 2022, the Company sold 94,697 shares of its common stock to Main Street at $7.92 per share, the price at which the Company issued new shares in connection with reinvestments of the May 2, 2022 dividend pursuant to the dividend reinvestment plan, for total proceeds to the Company of $750,000. The issuance and sale were made pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and was unanimously approved by the Company’s Board of Directors, including each director who is not an “interested person,” as such term is defined in Section 2(a)(19) of the 1940 Act, of the Company or the Adviser.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

NOTE L—SUBSEQUENT EVENTS

On November 1, 2022, the Company repurchased 522,498 shares of its common stock validly tendered and not withdrawn on the terms set forth in the tender offer statement on Schedule TO and Offer to Purchase filed with the SEC on September 18, 2022. The shares were repurchased at a price of $7.66 per share, which was the Company’s net asset value per share as of November 1, 2022, for an aggregate purchase price of $4.0 million (an amount equal to 90% of the proceeds the Company received from the issuance of shares under the Company’s dividend reinvestment plan from the November 1, 2022 dividend payment).

On November 10, 2022, the Board of Directors declared a quarterly cash dividend of $0.16 per share payable January 31, 2023 to stockholders of record as of December 30, 2022.

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Table of contents                                                             Schedule 12-14

MSC INCOME FUND, INC.

Consolidated Schedule of Investments In and Advances to Affiliates

September 30, 2022

(dollars in thousands)

(unaudited)

Company			Total Rate			Base Rate			Spread			PIK Rate			Type of Investment(1)(10)(11)						Geography						Amount of Realized Gain/(Loss)						Amount of Unrealized Gain/(Loss)						Amount of Interest, Fees or Dividends Credited to Income(2)						December 31, 2021 Fair Value (13)						Gross Additions(3)						Gross Reductions(4)						September 30, 2022 Fair Value (13)
Control Investments
GRT Rubber Technologies LLC			10.56%			L+			8.00%						Secured Debt						(8)						$	—					$	(20)					$	1,365					$	19,152					$	812					$	20					$	19,944
															Member Units						(8)						—						—						1,230						22,750						—						—						22,750
Harris Preston Fund Investments															LP Interests (2717 MH, L.P.)						(8)						—						1,979						—						3,971						3,171						—						7,142
Copper Trail Energy Fund I, LP - CTMH															LP Interests (CTMH, LP)						(9)						—						—						—						710						—						—						710
Other Amounts related to investments transferred from other 1940 Act classification during the period																											—						—						—						—						—						—						—
Total Control Investments																											$	—					$	1,959					$	2,595					$	46,583					$	3,983					$	20					$	50,546
Affiliate Investments
AFG Capital Group, LLC															Secured Debt						(8)						$	—					$	—					$	1					$	36					$	—					$	36					$	—
															Preferred Member Units						(8)						—						260						50						1,930						260						—						2,190
ASK (Analytical Systems Keco Holdings, LLC)						L+			10.00%						Secured Debt						(8)						—						—						2						(4)						1						—						(3)
			12.63%			L+			10.00%						Secured Debt						(8)						—						—						127						1,182						17						52						1,147
			12.63%												Preferred Member Units						(8)						—						—						—						—						—						—						—
															Preferred Member Units						(8)						—						(260)						—						1,220						—						260						960
															Warrants						(8)						—						—						—						—						—						—						—
ATX Networks Corp.			11.14%			L+			7.50%						Secured Debt						(6)						—						405						559						7,121						633						1,019						6,735
			10.00%									10.00%			Unsecured Debt						(6)						—						263						240						1,977						504						—						2,481
															Common Stock						(6)						—						—						—						—						—						—						—
Barfly Ventures, LLC															Member Units						(5)						—						463						—						643						464						—						1,107
Batjer TopCo, LLC															Secured Debt						(8)						—						—						—						—						50						51						(1)
			11.00%												Secured Debt						(8)						—						—						81						—						1,203						—						1,203
															Preferred Stock						(8)						—						—						—						—						455						—						455
Brewer Crane Holdings, LLC			12.56%			L+			10.00%						Secured Debt						(9)						—						—						166						2,005						8						493						1,520
															Preferred Member Units						(9)						—						(510)						199						1,930						—						510						1,420
Centre Technologies Holdings, LLC						L+			9.00%						Secured Debt						(8)						—						—						6						—						360						360						—
			11.63%			L+			9.00%						Secured Debt						(8)						—						115						321						2,216						1,610						97						3,729
															Preferred Member Units						(8)						—						509						23						1,460						580						—						2,040
Chamberlin Holding LLC						L+			6.00%						Secured Debt						(8)						—						—						2						—						—						—						—
			10.63%			L+			8.00%						Secured Debt						(8)						—						(32)						347						4,454						32						120						4,366
															Member Units						(8)						—						(450)						334						6,030						—						450						5,580
															Member Units						(8)						—						(27)						14						385						113						27						471
Charps, LLC															Secured Debt						(5)						—						—						—						—						—						—						—
															Preferred Member Units						(5)						—						(200)						106						3,500						—						200						3,300
Clad-Rex Steel, LLC			12.13%			L+			9.50%						Secured Debt						(5)						—						—						217						2,620						—						—						2,620
			10.00%												Secured Debt						(5)						—						—						20						268						—						6						262
															Member Units						(5)						—						(190)						149						2,560						—						190						2,370
															Member Units						(5)						—						20						—						133						19						—						152

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments In and Advances to Affiliates (Continued)

September 30, 2022

(dollars in thousands)

(unaudited)

Company			Total Rate			Base Rate			Spread			PIK Rate			Type of Investment(1)(10)(11)						Geography						Amount of Realized Gain/(Loss)						Amount of Unrealized Gain/(Loss)						Amount of Interest, Fees or Dividends Credited to Income(2)						December 31, 2021 Fair Value (13)						Gross Additions(3)						Gross Reductions(4)						September 30, 2022 Fair Value (13)
Cody Pools, Inc.						L+			10.50%						Secured Debt						(8)						—						10						13						(6)						641						635						—
			13.63%			L+			10.50%						Secured Debt						(8)						—						(22)						694						7,187						22						251						6,958
															Preferred Member Units						(8)						—						2,390						928						11,910						2,390						—						14,300
Colonial Electric Company LLC															Secured Debt						(6)						—						—						12						—						400						400						—
			12.00%												Secured Debt						(6)						—						—						573						6,007						28						236						5,799
															Preferred Member Units						(6)						—						20						317						2,280						20						—						2,300
Datacom, LLC			7.50%												Secured Debt						(8)						—						—						—						—						25						—						25
			7.50%												Secured Debt						(8)						—						14						73						852						32						23						861
															Preferred Member Units						(8)						—						10						8						290						10						—						300
Digital Products Holdings LLC			12.63%			L+			10.00%						Secured Debt						(5)						—						—						368						4,186						17						248						3,955
															Preferred Member Units						(5)						—						—						38						2,459						—						—						2,459
Direct Marketing Solutions, Inc.			13.63%			L+			11.00%						Secured Debt						(9)						—						5						19						(7)						758						151						600
			13.63%			L+			11.00%						Secured Debt						(9)						—						(21)						459						4,705						21						232						4,494
															Preferred Stock						(9)						—						970						257						4,590						970						—						5,560
Flame King Holdings, LLC			9.25%			L+			6.50%						Secured Debt						(9)						—						16						116						1,581						319						—						1,900
			13.75%			L+			11.00%						Secured Debt						(9)						—						131						525						5,145						155						—						5,300
															Preferred Equity						(9)						—						860						227						2,600						860						—						3,460
Freeport Financial Funds															LP Interests (Freeport First Lien Loan Fund III LP)						(5)						—						(57)						288						7,231						—						1,056						6,175
Gamber-Johnson Holdings, LLC						L+			8.00%						Secured Debt						(5)						—						—						1						—						—						—						—
			10.63%			L+			8.00%						Secured Debt						(5)						—						8						422						5,400						620						—						6,020
															Member Units						(5)						—						(810)						179						12,430						—						810						11,620
GFG Group, LLC.			9.00%												Secured Debt						(5)						—						(19)						255						3,136						19						219						2,936
															Preferred Member Units						(5)						—						40						104						1,750						40						—						1,790
Gulf Publishing Holdings, LLC						L+			9.50%						Secured Debt						(8)						—						—						2						64						(64)						—						—
															Secured Debt						(8)						(1,455)						962						126						2,429						(974)						1,455						—
			12.50%												Secured Debt						(8)						—						(29)						—						—						600						29						571
															Member Units						(8)						—						—						—						—						—						—						—
															Member Units						(8)						—						(420)						—						—						1,400						420						980
HPEP 3, L.P.															LP Interests (HPEP 3, L.P.)						(8)						779						254						(81)						4,712						587						968						4,331
Kickhaefer Manufacturing Company, LLC			11.50%												Secured Debt						(5)						—						—						471						5,040						26						—						5,066
			9.00%												Secured Debt						(5)						—						—						66						970						—						7						963
															Member Units						(5)						—						(770)						—						3,080						—						770						2,310
															Member Units						(5)						—						—						21						615						—						—						615
Market Force Information, LLC			12.00%									12.00%			Secured Debt						(9)						—						(1,516)						—						2,234						—						1,516						718
															Member Units						(9)						—						—						—						—						—						—						—
MH Corbin Holding LLC			13.00%												Secured Debt						(5)						—						(305)						199						1,484						2						809						677
															Preferred Member Units						(5)						—						—						—						—						—						—						—
															Preferred Member Units						(5)						—						—						—						—						—						—						—
Mystic Logistics Holdings, LLC															Secured Debt						(6)						—						—						1						—						—						—						—
			10.00%												Secured Debt						(6)						—						—						115						1,595						—						159						1,436
															Common Stock						(6)						—						2,965						739						2,210						2,965						—						5,175

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments In and Advances to Affiliates (Continued)

September 30, 2022

(dollars in thousands)

(unaudited)

Company			Total Rate			Base Rate			Spread			PIK Rate			Type of Investment(1)(10)(11)						Geography						Amount of Realized Gain/(Loss)						Amount of Unrealized Gain/(Loss)						Amount of Interest, Fees or Dividends Credited to Income(2)						December 31, 2021 Fair Value (13)						Gross Additions(3)						Gross Reductions(4)						September 30, 2022 Fair Value (13)
NexRev LLC			11.00%												Secured Debt						(8)						—						—						7						199						(159)						—						40
			11.00%												Secured Debt						(8)						—						(236)						394						3,311						(157)						891						2,263
															Preferred Member Units						(8)						—						(723)						15						670						333						723						280
NuStep, LLC			9.13%			L+			6.50%						Secured Debt						(5)						—						—						49						430						667						—						1,097
			12.00%												Secured Debt						(5)						—						(2)						403						4,310						294						2						4,602
															Preferred Member Units						(5)						—						(830)						—						3,380						—						830						2,550
Oneliance, LLC			13.56%			L+			11.00%						Secured Debt						(7)						—						—						136						1,374						4						—						1,378
															Preferred Stock						(7)						—						—						—						264						—						—						264
Orttech Holdings, LLC						L+			11.00%						Secured Debt						(5)						—						—						5						41						—						44						(3)
			13.63%			L+			11.00%						Secured Debt						(5)						—						—						587						5,937						21						150						5,808
															Preferred Stock						(5)						—						—						145						2,500						—						—						2,500
Robbins Bros. Jewelry, Inc.						L+			11.00%						Secured Debt						(9)						—						—						3						—						2						10						(8)
			13.63%			L+			11.00%						Secured Debt						(9)						—						—						392						—						3,973						50						3,923
															Preferred Equity						(9)						—						460						62						—						1,690						—						1,690
SI East, LLC			10.25%												Secured Debt						(7)						—						—						64						750						1,250						1,250						750
			10.25%												Secured Debt						(7)						—						134						1,885						21,200						10,375						496						31,079
															Preferred Member Units						(7)						—						1,120						189						3,860						1,120						—						4,980
Sonic Systems International, LLC			9.78%			L+			7.50%						Secured Debt						(8)						—						118						1,129						13,738						4,504						—						18,242
															Common Stock						(8)						—						66						38						1,250						400						—						1,650
Tedder Industries, LLC			12.00%												Secured Debt						(9)						—						—						41						259						201						—						460
			12.00%												Secured Debt						(9)						—						(16)						387						3,754						41						16						3,779
															Preferred Member Units						(9)						—						(483)						—						2,145						122						483						1,784
Trantech Radiator Topco, LLC															Secured Debt						(7)						—						4						3						(6)						6						—						—
			12.00%												Secured Debt						(7)						—						(13)						205						2,180						13						113						2,080
															Common Stock						(7)						—						(310)						22						2,160						—						310						1,850
VVS Holdco, LLC			8.63%			L+			6.00%						Secured Debt						(5)						—						—						11						292						201						300						193
			11.50%												Secured Debt						(5)						—						—						697						7,375						34						—						7,409
															Preferred Equity						(5)						—						60						75						2,960						60						—						3,020
Other Amounts related to investments transferred from other 1940 Act classifications during the period																											—						—						—						—						—						—						—
Total Affiliate investments																											$	(676)					$	4,401					$	17,443					$	234,158					$	43,193					$	19,933					$	257,418

_________________________

(1)The principal amount, the ownership detail for equity investments and if the investment is income producing is included in the Consolidated Schedule of Investments included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

(2)Represents the total amount of interest, fees and dividends credited to income for the portion of the period for which an investment was included in Control or Affiliate categories, respectively. For investments transferred between Control and Affiliate categories during the period, any income or investment balances related to the time period it was in the category other than the one shown at period end is included in “Amounts related to investments transferred from other 1940 Act classifications during the period.”

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments In and Advances to Affiliates (Continued)

September 30, 2022

(dollars in thousands)

(unaudited)

(3)Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments and accrued PIK interest, and the exchange of one or more existing securities for one or more new securities. Gross additions also include net increases in unrealized appreciation or net decreases in net unrealized depreciation as well as the movement of an existing portfolio company into this category and out of a different category.

(4)Gross reductions include decreases in the cost basis of investments resulting from principal repayments or sales and the exchange of one or more existing securities for one or more new securities. Gross reductions also include net increases in net unrealized depreciation or net decreases in unrealized appreciation as well as the movement of an existing portfolio company out of this category and into a different category.

(5)Portfolio company located in the Midwest region as determined by location of the corporate headquarters. The fair value as of September 30, 2022 for affiliate investments located in this region was $81,573. This represented 11.9% of net assets as of September 30, 2022.

(6)Portfolio company located in the Northeast region as determined by location of the corporate headquarters. The fair value as of September 30, 2022 for affiliate investments located in this region was $23,926. This represented 3.5% of net assets as of September 30, 2022.

(7)Portfolio company located in the Southeast region as determined by location of the corporate headquarters. The fair value as of September 30, 2022 for affiliate investments located in this region was $42,381. This represented 6.2% of net assets as of September 30, 2022.

(8)Portfolio company located in the Southwest region as determined by location of the corporate headquarters. The fair value as of September 30, 2022 for control investments located in this region was $72,938. This represented 10.7% of net assets as of September 30, 2022. The fair value as of September 30, 2022 for affiliate investments located in this region was $49,836. This represented 7.3% of net assets as of September 30, 2022.

(9)Portfolio company located in the West region as determined by location of the corporate headquarters. The fair value as of September 30, 2022 for control investments located in this region was $710. This represented 0.1% of net assets as of September 30, 2022. The fair value as of September 30, 2022 for affiliate investments located in this region was $36,600. This represented 5.3% of net assets as of September 30, 2022.

(10)All of the Company’s portfolio investments are generally subject to restrictions on resale as “restricted securities,” unless otherwise noted.

(11)This schedule should be read in conjunction with the Consolidated Schedule of Investments and Notes to the Consolidated Financial Statements included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q. Supplemental information can be located within the Consolidated Schedule of Investments including end of period interest rate, preferred dividend rate, maturity date, investments not paid currently in cash and investments whose value was determined using significant unobservable inputs.

(12)Investment has an unfunded commitment as of September 30, 2022 (see Note K). The fair value of the investment includes the impact of the fair value of any unfunded commitments.

(13)Negative fair value is the result of the capitalized discount being greater than the principal amount outstanding on the loan.

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments In and Advances to Affiliates

September 30, 2021

(dollars in thousands)

(unaudited)

Company			Total Rate			Base Rate			Spread			PIK Rate			Type of Investment(1)(10)(11)						Geography						Amount of Realized Gain/(Loss)						Amount of Unrealized Gain/(Loss)						Amount of Interest, Fees or Dividends Credited to Income(2)						December 31, 2020 Fair Value						Gross Additions(3)						Gross Reductions(4)						September 30, 2021 Fair Value
Control Investments
GRT Rubber Technologies LLC			7.10		%	L+			7.00		%				Secured Debt						(8)						$	—					$	(16)					$	449					$	8,262					$	4					$	16					$	8,250
															Member Units						(8)						—						—						1,739						22,120						—						—						22,120
Harris Preston Fund Investments															LP Interests (2717 MH, L.P.)						(8)						—						585						—						2,702						689						—						3,391
Copper Trail Energy Fund I, LP - CTMH															LP Interests (CTMH, LP)						(9)						—						—						—						747						—						37						710
Other Amounts related to investments transferred from other 1940 Act classification during the period																											—						—						—						—						—						—						—
Total Control Investments																											$	—					$	569					$	2,188					$	33,831					$	693					$	53					$	34,471
Affiliate Investments
AFG Capital Group, LLC															Preferred Member Units						(8)						$	—					$	400					$	50					$	1,450					$	400					$	—					$	1,850
			10.00		%										10.00% Secured Debt						(8)						—						—						7						123						—						65						58
ASK (Analytical Systems Keco Holdings, LLC)															Preferred Member Units						(8)						—						(800)						—						800						—						800						—
															Preferred Member Units						(8)						—						593						—						—						1,200						—						1,200
			12.00		%	L+			10.00		%				Secured Debt						(8)						—						—						163						1,180						66						55						1,191
															Warrants						(8)						—						—						—						—						—						—						—
ATX Networks Corp.			10.00		%							10.00		%	Unsecured Debt						(6)						—						—						30						—						1,973						—						1,973
			8.50		%	L+			7.50		%				Secured Debt						(6)						—						—						55						—						7,121						—						7,121
			8.75		%	L+			6.25		%	1.50		%	Secured Debt						(6)						—						—						—						—						—						—						—
Barfly Ventures, LLC															Preferred Member Units						(5)						—						115						—						528						115						—						643
Brewer Crane Holdings, LLC															Preferred Member Units						(9)						—						(390)						99						1,460						—						390						1,070
			11.00		%	L+			10.00		%				Secured Debt						(9)						—						—						181						2,119						7						93						2,033
Centre Technologies Holdings, LLC			12.00		%	L+			10.00		%				Secured Debt						(8)						—						—						247						2,868						14						515						2,367
															Preferred Member Units						(8)						—						(80)						—						1,540						—						80						1,460
Chamberlin Holding LLC			9.00		%	L+			8.00		%				Secured Debt						(8)						—						—						281						3,803						1,000						349						4,454
															Member Units						(8)						—						(990)						895						7,020						—						990						6,030
															Member Units						(8)						—						41						13						317						41						—						358
Charlotte Russe, Inc															Common Stock						(9)						(2,470)						2,470						—						—						2,470						2,470						—
Charps, LLC															Preferred Member Units						(5)						—						930						530						2,630						930						—						3,560
			15.00		%										Secured Debt						(5)						—						—						1						167						—						167						—
Clad-Rex Steel, LLC			10.50		%	L+			9.50		%				Secured Debt						(5)						—						—						246						2,706						11						100						2,617
															Member Units						(5)						—						407						545						2,153						407						—						2,560
															Member Units						(5)						—						2						—						132						2						—						134
			10.00		%										Secured Debt						(5)						—						—						21						275						—						5						270
Cody Pools, Inc.			12.25		%	L+			10.50		%				Secured Debt						(8)						—						11						398						3,554						2,025						1,070						4,509
															Preferred Member Units						(8)						—						3,858						367						3,740						3,860						—						7,600
Colonial Electric Company LLC			12.00		%										Secured Debt						(6)						—						—						396						—						6,156						79						6,077
															Preferred Member Units						(6)						—						190						—						—						2,110						—						2,110
Copper Trail Energy Fund I, LP															LP Interests (Copper Trail Energy Fund I, LP)						(9)						(203)						379						482						1,782						379						2,161						—

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments In and Advances to Affiliates (Continued)

September 30, 2021

(dollars in thousands)

(unaudited)

Company			Total Rate			Base Rate			Spread			PIK Rate			Type of Investment(1)(10)(11)						Geography						Amount of Realized Gain/(Loss)						Amount of Unrealized Gain/(Loss)						Amount of Interest, Fees or Dividends Credited to Income(2)						December 31, 2020 Fair Value						Gross Additions(3)						Gross Reductions(4)						September 30, 2021 Fair Value
Datacom, LLC															Preferred Member Units						(8)						—						—						—						—						290						—						290
			5.00		%										Secured Debt						(8)						—						—						47						—						910						9						901
Digital Products Holdings LLC			11.00		%	L+			10.00		%				Secured Debt						(5)						—						—						382						4,493						17						248						4,262
															Preferred Member Units						(5)						—						—						38						2,459						—						—						2,459
Direct Marketing Solutions, Inc.															Preferred Stock						(9)						—						(550)						168						4,840						—						550						4,290
			12.00		%	L+			11.00		%				Secured Debt						(9)						—						—						362						3,717						19						59						3,677
Freeport Financial Funds															LP Interests (Freeport First Lien Loan Fund III LP)						(5)						—						66						613						10,321						66						3,156						7,231
Gamber-Johnson Holdings, LLC			9.00		%	L+			7.00		%				Secured Debt						(5)						—						(25)						375						4,960						225						25						5,160
															Member Units						(5)						—						8						849						13,120						720						—						13,840
GFG Group, LLC.															Preferred Member Units						(5)						—						525						115						—						1,750						—						1,750
			12.00		%										Secured Debt						(5)						—						—						245						—						3,849						800						3,049
Gulf Publishing Holdings, LLC			10.50		%	L+			9.50		%	5.25		%	Secured Debt						(8)						—						—						6						63						1						—						64
			12.50		%							6.25		%	Secured Debt						(8)						—						(499)						250						2,988						127						499						2,616
Hawk Ridge Systems, LLC			9.00		%										Secured Debt						(9)						—						(13)						257						3,350						13						13						3,350
			7.00		%	L+			6.00		%				Secured Debt						(9)						—						1						5						—						646						—						646
															Preferred Member Units						(9)						—						1,282						173						2,008						1,282						—						3,290
															Preferred Member Units						(9)						—						65						—						105						65						—						170
HPEP 3, L.P.															LP Interests (HPEP 3, L.P.)						(8)						—						803						—						3,258						925						—						4,183
J&J Services, Inc.			11.50		%										Secured Debt						(7)						—						(15)						285						3,200						15						515						2,700
															Preferred Stock						(7)						—						680						—						3,170						680						—						3,850
Kickhaefer Manufacturing Company, LLC															Member Units						(5)						—						—						19						3,060						—						—						3,060
			11.50		%										Secured Debt						(5)						—						—						497						5,500						32						500						5,032
			9.00		%										Secured Debt						(5)						—						—						67						978						—						6						972
															Member Units						(5)						—						12						—						290						12						—						302
Market Force Information, LLC			12.00		%							12.00		%	PIK Secured Debt						(9)						—						(601)						—						3,391						—						601						2,790
MH Corbin Holding LLC			13.00		%							3.00		%	Secured Debt						(5)						—						(515)						215						2,070						7						575						1,502
															Preferred Member Units						(5)						—						(590)						—						590						—						590						—
Oneliance, LLC															Preferred Stock						(7)						—						—						—						—						264						—						264
			12.00		%	L+			11.00		%				Secured Debt						(7)						—						—						27						—						1,373						—						1,373
Orttech Holdings, LLC															Preferred Stock						(5)						—						—						—						—						2,900						—						2,900
			12.00		%	L+			11.00		%				Secured Debt						(5)						—						—						132						—						5,972						—						5,972
Mystic Logistics Holdings, LLC			12.00		%										Secured Debt						(6)						—						—						153						1,682						2						7						1,677
															Common Stock						(6)						—						(456)						137						2,248						—						456						1,792
NexRev LLC															Preferred Member Units						(8)						—						450						15						370						450						—						820
			11.00		%										Secured Debt						(8)						—						4						17						197						4						—						201
			11.00		%										Secured Debt						(8)						—						(345)						345						3,980						15						509						3,486
NuStep, LLC															Preferred Member Units						(5)						—						680						—						2,700						680						—						3,380
			7.50		%	L+			6.50		%				Secured Debt						(5)						—						—						6						—						500						100						400
			10.50		%										Secured Debt						(5)						—						7						384						4,288						22						—						4,310
SI East, LLC (Stavig)			10.25		%										Secured Debt						(7)						—						(37)						782						10,987						11,512						1,300						21,199
															Preferred Member Units						(7)						—						1,804						699						3,260						1,804						1,594						3,470
Sonic Systems International, LLC															Common Stock						(8)						—						—						25						—						1,250						—						1,250
			8.50		%	L+			7.50		%				Secured Debt						(8)						—						—						144						—						13,725						—						13,725

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments In and Advances to Affiliates (Continued)

September 30, 2021

(dollars in thousands)

(unaudited)

Company			Total Rate			Base Rate			Spread			PIK Rate			Type of Investment(1)(10)(11)						Geography						Amount of Realized Gain/(Loss)						Amount of Unrealized Gain/(Loss)						Amount of Interest, Fees or Dividends Credited to Income(2)						December 31, 2020 Fair Value						Gross Additions(3)						Gross Reductions(4)						September 30, 2021 Fair Value
Tedder Industries, LLC			12.00		%										Secured Debt						(9)						—						—						366						4,025						123						400						3,748
															Preferred Member Units						(9)						—						—						—						2,034						—						—						2,034
			12.00		%										Secured Debt						(9)						—						(2)						21						—						401						2						399
Trantech Radiator Topco, LLC															Common Stock						(7)						—						150						22						1,510						150						—						1,660
			12.00		%										Secured Debt						(7)						—						(8)						211						2,131						11						8						2,134
Other Amounts related to investments transferred from other 1940 Act classifications during the period																											—						—						—						—						—						—						—
Total Affiliate investments																											$	(2,673)					$	10,017					$	13,461					$	157,690					$	83,096					$	21,911					$	218,875

___________________________________________________

(1)The principal amount, the ownership detail for equity investments and if the investment is income producing is included in the Consolidated Schedule of Investments included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

(2)Represents the total amount of interest, fees and dividends credited to income for the portion of the period for which an investment was included in Control or Affiliate categories, respectively. For investments transferred between Control and Affiliate categories during the period, any income or investment balances related to the time period it was in the category other than the one shown at period end is included in “Amounts related to investments transferred from other 1940 Act classifications during the period.”

(3)Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments and accrued PIK interest, and the exchange of one or more existing securities for one or more new securities. Gross additions also include net increases in unrealized appreciation or net decreases in net unrealized depreciation as well as the movement of an existing portfolio company into this category and out of a different category.

(4)Gross reductions include decreases in the cost basis of investments resulting from principal repayments or sales and the exchange of one or more existing securities for one or more new securities. Gross reductions also include net increases in net unrealized depreciation or net decreases in unrealized appreciation as well as the movement of an existing portfolio company out of this category and into a different category.

(5)Portfolio company located in the Midwest region as determined by location of the corporate headquarters. The fair value as of September 30, 2021 for affiliate investments located in this region was $75,365. This represented 12.5% of net assets as of September 30, 2021.

(6)Portfolio company located in the Northeast region as determined by location of the corporate headquarters. The fair value as of September 30, 2021 for affiliate investments located in this region was $20,751. This represented 3.4% of net assets as of September 30, 2021.

(7)Portfolio company located in the Southeast region as determined by location of the corporate headquarters. The fair value as of September 30, 2021 for affiliate investments located in this region was $36,650. This represented 6.1% of net assets as of September 30, 2021.

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments In and Advances to Affiliates (Continued)

September 30, 2021

(dollars in thousands)

(unaudited)

(8)Portfolio company located in the Southwest region as determined by location of the corporate headquarters. The fair value as of September 30, 2021 for control investments located in this region was $33,761. This represented 5.6% of net assets as of September 30, 2021. The fair value as of September 30, 2021 for affiliate investments located in this region was $58,612. This represented 9.7% of net assets as of September 30, 2021.

(9)Portfolio company located in the West region as determined by location of the corporate headquarters. The fair value as of September 30, 2021 for control investments located in this region was $710. This represented 0.1% of net assets as of September 30, 2021. The fair value as of September 30, 2021 for affiliate investments located in this region was $27,497. This represented 4.6% of net assets as of September 30, 2021.

(10)All of the Company’s portfolio investments are generally subject to restrictions on resale as “restricted securities,” unless otherwise noted.

(11)This schedule should be read in conjunction with the Consolidated Schedule of Investments and Notes to the Consolidated Financial Statements included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q. Supplemental information can be located within the Consolidated Schedule of Investments including end of period interest rate, preferred dividend rate, maturity date, investments not paid currently in cash and investments whose value was determined using significant unobservable inputs.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q contains forward-looking statements regarding the plans and objectives of management for future operations and which relate to future events or our future performance or financial condition. Any such forward-looking statements may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and we cannot assure you that the projections included in these forward-looking statements will come to pass. Our actual results could differ materially from those expressed or implied by the forward-looking statements as a result of various factors, including, without limitation the factors referenced in Item 1A entitled “Risk Factors” below in Part II of this Quarterly Report on Form 10-Q, if any, and discussed in Item 1A entitled “Risk Factors” in Part I of our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on March 14, 2022 and elsewhere in this Quarterly Report on Form 10-Q and our other SEC filings. Other factors that could cause actual results to differ materially include changes in the economy and future changes in laws or regulations and conditions in our operating areas.

We have based the forward-looking statements included in this Quarterly Report on Form 10-Q on information available to us on the date of this Quarterly Report on Form 10-Q, and we assume no obligation to update any such forward-looking statements, unless we are required to do so by applicable law. However, you are advised to refer to any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including subsequent periodic and current reports.

This discussion should be read in conjunction with our consolidated financial statements as of December 31, 2021, and for the year then ended, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, both contained in our Annual Report on Form 10-K for the year ended December 31, 2021, as well as the consolidated financial statements (unaudited) and notes to the consolidated financial statements (unaudited) contained in this report.

ORGANIZATION

MSC Income Fund, Inc. (“MSC Income Fund”) is a principal investment firm. MSC Income Fund has certain direct and indirect wholly-owned subsidiaries that have elected to be taxable entities (the “Taxable Subsidiaries”). The primary purpose of the Taxable Subsidiaries is to permit MSC Income Fund to hold equity investments in portfolio companies which are “pass-through” entities for tax purposes. MSC Income Fund also has certain direct and indirect wholly-owned subsidiaries formed for financing purposes (“Structured Subsidiaries”).

On October 28, 2020, MSC Income Fund’s stockholders approved the appointment of MSC Adviser I, LLC (the “Adviser”), which is wholly-owned by Main Street Capital Corporation (“Main Street”), a New York Stock Exchange listed BDC, as MSC Income Fund’s investment adviser and administrator under an Investment Advisory and Administrative Services Agreement dated October 30, 2020 (the “Investment Advisory Agreement”). In such role, the Adviser has the responsibility to manage the business of MSC Income Fund, including the responsibility to identify, evaluate, negotiate and structure prospective investments, make investment and portfolio management decisions, monitor MSC Income Fund’s investment portfolio and provide ongoing administrative services.

ECONOMIC UPDATE

The recent disruption of the U.S. and global economies, including supply chain delays, labor and material availability constraints, price increases and other impacts of inflation, cost and availability of capital and the effects of the COVID-19 pandemic and geopolitical events, has had, and threatens to continue to have, adverse consequences for our business and operating results, and the businesses and operating results of our portfolio companies. During the quarter ended September 30, 2022, our Adviser continued to work collectively with its employees and our portfolio companies to navigate these significant challenges. Neither our Adviser nor our Board of Directors is able to predict the full impact of the economic disruption, including its duration and the magnitude. As such, while our Adviser will continue to monitor the evolving situation, it is unable to predict with any certainty the extent to which these events, or any future impacts, will negatively affect our portfolio companies’ operating results and financial condition or the impact that such disruptions may have on our results of operations and financial condition in the future.

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OVERVIEW OF OUR BUSINESS

Our principal investment objective is to maximize our portfolio’s total return by generating current income from our debt investments and current income and capital appreciation from our equity and equity-related investments, including warrants, convertible securities and other rights to acquire equity securities in a portfolio company. We seek to achieve our investment objective through our Private Loan (as defined below), lower middle market (“LMM”) and middle market (“Middle Market”) investment strategies. Our Middle Market investment strategy involves investments in companies with annual revenues typically between $150 million and $1.5 billion. Our LMM investment strategy involves investments in companies that are generally smaller in size than our Middle Market companies, with annual revenues typically between $10 million and $150 million. Our Private Loan investment strategy involves investments in companies that are generally consistent with the size of our Middle Market portfolio companies or LMM portfolio companies. Private Loan, LMM and Middle Market portfolio investments generally range in size from $1 million to $20 million.

Private Loan investments generally consist of loans that have been originated directly by Main Street or through strategic relationships with other investment funds on a collaborative basis and are often referred to in the debt markets as “club deals.” Our Private Loan portfolio debt investments are generally secured by a first priority lien on the assets of the portfolio company and typically have a term of between three and seven years from the original investment date. We may also invest alongside the sponsor in the equity securities of our Private Loan portfolio companies.

We seek to fill the financing gap for LMM businesses, which, historically, have had limited access to financing from commercial banks and other traditional sources. The underserved nature of the LMM creates the opportunity for us to meet the financing needs of LMM companies while also negotiating favorable transaction terms and equity participations. Our ability to invest across a company’s capital structure, from secured loans to equity securities, allows us to offer portfolio companies a comprehensive suite of financing options, or a “one stop” financing solution. Providing customized, “one stop” financing solutions is important to LMM portfolio companies. We generally seek to partner directly with entrepreneurs, management teams and business owners in making our investments. Our LMM portfolio debt investments are generally secured by a first lien on the assets of the portfolio company and typically have a term of between five and seven years from the original investment date.

Our Middle Market portfolio investments primarily consist of direct investments in or secondary purchases of interest-bearing syndicated loans or debt securities in privately held companies based in the United States that are generally larger in size than the companies included in our LMM portfolio. Our Middle Market portfolio debt investments are generally secured by a first priority lien on the assets of the portfolio company and typically have an expected duration of between three and seven years from the original investment date.

Our other portfolio (“Other Portfolio”) investments primarily consist of investments that are not consistent with the typical profiles for our Private Loan, LMM or Middle Market portfolio investments, including investments which may be managed by third parties. In our Other Portfolio, we may incur indirect fees and expenses in connection with investments managed by third parties, such as investments in other investment companies or private funds.

Our portfolio investments are generally made through MSC Income Fund, the Taxable Subsidiaries and Structured Subsidiaries. MSC Income Fund, the Taxable Subsidiaries and Structured Subsidiaries share the same investment strategies and criteria. An investor’s return in MSC Income Fund will depend, in part, on the Taxable Subsidiaries’ and the Structured Subsidiaries’ investment returns as they are wholly-owned subsidiaries of MSC Income Fund.

The level of new portfolio investment activity will fluctuate from period to period based upon our view of the current economic fundamentals, our ability to identify new investment opportunities that meet our investment criteria, our ability to consummate the identified opportunities and available liquidity. The level of new investment activity, and associated interest and fee income, will directly impact future investment income. In addition, the level of dividends paid by portfolio companies and the portion of our portfolio debt investments on non-accrual status will directly impact future investment income. Our operating results may be more limited during depressed economic periods. However, we intend to appropriately manage our cost structure and liquidity position based on applicable economic conditions and our investment outlook. The level of realized gains or losses and unrealized appreciation or depreciation on our investments will also fluctuate depending upon portfolio activity, economic conditions and the performance of our individual portfolio companies. The changes in realized gains and losses and unrealized appreciation and depreciation could have a material impact on our operating results.

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We have received an exemptive order from the SEC permitting co-investments among us, Main Street and other funds and clients advised by our Adviser in certain negotiated transactions where co-investing would otherwise be prohibited under the 1940 Act. We have made co-investments with, and in the future intend to continue to make co-investments with, Main Street and other funds and clients advised by our Adviser, in accordance with the conditions of the order. The order requires, among other things, that we and our Adviser consider whether each such investment opportunity is appropriate for us and the other funds and clients advised by our Adviser, as applicable, and if it is appropriate, to propose an allocation of the investment opportunity between such parties. Because our Adviser is wholly-owned by Main Street and is not managing our investment activities as its sole activity, this may provide our Adviser an incentive to allocate opportunities to other participating funds and clients instead of us. However, our Adviser has policies and procedures in place to manage this conflict, including oversight by the independent members of our Board of Directors. Additional information regarding the operation of the co-investment program is set forth in the order granting exemptive relief, which may be reviewed on the SEC’s website at www.sec.gov. In addition to the co-investment program described above, we also co-invest in syndicated deals and other transactions where only price is negotiated by us and our affiliates.

INVESTMENT PORTFOLIO SUMMARY

The following tables provide a summary of our investments in the Private Loan, LMM and Middle Market portfolios as of September 30, 2022 and December 31, 2021 (this information excludes the Other Portfolio investments, which are discussed further below):

			As of September 30, 2022
			Private Loan						LMM (a)						Middle Market
			(dollars in millions)
Number of portfolio companies			73						45						22
Fair value			$	595.6					$	335.7					$	136.0
Cost			$	607.8					$	296.4					$	168.3
Debt investments as a % of portfolio (at cost)			96.1		%				72.4		%				95.9		%
Equity investments as a % of portfolio (at cost)			3.9		%				27.6		%				4.1		%
% of debt investments at cost secured by first priority lien			99.9		%				99.9		%				98.6		%
Weighted-average annual effective yield (b)			10.0		%				11.6		%				9.9		%
Average EBITDA (c)			$	41.7					$	8.5					$	77.0

__________________

(a)At September 30, 2022, we had equity ownership in all of our LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was 9%.

(b)The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of September 30, 2022, including amortization of deferred debt origination fees and accretion of original issue discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual status. The weighted-average annual effective yield on our debt portfolio as of September 30, 2022 including debt investments on non-accrual status was 8.9% for our Private Loan portfolio, 11.3% for our LMM portfolio and 9.6% for our Middle Market portfolio. The weighted-average annual effective yield is not reflective of what an investor in shares of our common stock will realize on its investment because it does not reflect our utilization of debt capital in our capital structure, our expenses or any sales load paid by an investor.

(c)The average EBITDA is calculated using a weighted-average for the Private Loan and Middle Market portfolios and a simple average for the LMM portfolio. These calculations exclude certain portfolio companies, including one Private Loan portfolio company, as EBITDA is not a meaningful valuation metric for our investments in these portfolio companies, and those portfolio companies whose primary purpose is to own real estate.

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			As of December 31, 2021
			Private Loan						LMM (a)						Middle Market
			(dollars in millions)
Number of portfolio companies			57						43						25
Fair value			$	575.9					$	315.4					$	159.0
Cost			$	576.3					$	281.0					$	184.2
Debt investments as a % of portfolio (at cost)			94.0		%				72.2		%				93.7		%
Equity investments as a % of portfolio (at cost)			6.0		%				27.8		%				6.3		%
% of debt investments at cost secured by first priority lien			98.5		%				99.8		%				98.8		%
Weighted-average annual effective yield (b)			8.4		%				10.8		%				7.6		%
Average EBITDA (c)			$	38.0					$	7.3					$	85.9

________________

(a)At December 31, 2021, we had equity ownership in all of our LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was 9%.

(b)The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of December 31, 2021, including amortization of deferred debt origination fees and accretion of original issue discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual status. The weighted-average annual effective yield on our debt portfolio as of December 31, 2021 including debt investments on non-accrual status was 8.3% for our Private Loan portfolio, 10.5% for our LMM portfolio and 7.1% for our Middle Market portfolio. The weighted-average annual effective yield is not reflective of what an investor in shares of our common stock will realize on its investment because it does not reflect our utilization of debt capital in our capital structure, our expenses or any sales load paid by an investor.

(c)The average EBITDA is calculated using a weighted-average for the Private Loan and Middle Market portfolios and a simple average for the LMM portfolio. These calculations exclude certain portfolio companies, including two Private Loan portfolio companies and one Middle Market portfolio company, as EBITDA is not a meaningful valuation metric for our investments in these portfolio companies, and those portfolio companies whose primary purpose is to own real estate.

For the three months ended September 30, 2022 and 2021, we achieved an annualized total return on investments of 10.5% and 11.4%, respectively. For the nine months ended September 30, 2022 and 2021, we achieved an annualized total return on investments of 8.6% and 12.0%, respectively. For the year ended December 31, 2021, we achieved a total return on investments of 17.9%. Total return on investments is calculated using the interest, dividend and fee income, as well as the realized and unrealized change in fair value of the Investment Portfolio for the specified period. Our total return on investments is not reflective of what an investor in shares of our common stock will realize on its investment because it does not reflect our utilization of debt capital in our capital structure, our expenses or any sales load paid by an investor.

As of September 30, 2022, we had Other Portfolio investments in four companies, collectively totaling $28.8 million in fair value and $25.1 million in cost basis and which comprised 2.6% and 2.3% of our Investment Portfolio at fair value and cost, respectively. As of December 31, 2021, we had Other Portfolio investments in four companies, collectively totaling $26.8 million in fair value and $25.6 million in cost basis and which comprised 2.5% and 2.4% of our Investment Portfolio at fair value and cost, respectively.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements and related disclosures in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the periods reported. Actual results could materially differ from those estimates. Critical accounting policies are those that require management to make subjective or complex judgments about the effect of matters that are inherently uncertain and may change in subsequent periods. Changes that may be required in the underlying assumptions or estimates in these areas could have a material impact on our current and future financial condition and results of operations.

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Management has discussed the development and selection of each critical accounting policy and estimate with the Audit Committee of the Board of Directors. Our critical accounting policies and estimates include the Investment Portfolio Valuation and Revenue Recognition policies described below. Our significant accounting policies are described in greater detail in Note B–Summary of Significant Accounting Policies to the consolidated financial statements included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

Investment Portfolio Valuation

The most significant determination inherent in the preparation of our consolidated financial statements is the valuation of our Investment Portfolio and the related amounts of unrealized appreciation and depreciation. We consider this determination to be a critical accounting estimate, given the significant judgments and subjective measurements required. As of September 30, 2022 and December 31, 2021, our Investment Portfolio valued at fair value represented 96% and 94% of our total assets, respectively. We are required to report our investments at fair value. We follow the provisions of FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. ASC 820 requires us to assume that the portfolio investment is to be sold in the principal market to independent market participants, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal market that are independent, knowledgeable and willing and able to transact. See Note B.1.—Valuation of the Investment Portfolio included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q for a detailed discussion of our investment portfolio valuation process and procedures.

Due to the inherent uncertainty in the valuation process, our determination of fair value for our Investment Portfolio may differ materially from the values that would have been determined had a ready market for the securities existed. In addition, changes in the market environment, portfolio company performance and other events that may occur over the lives of the investments may cause the gains or losses ultimately realized on these investments to be materially different than the valuations currently assigned. We determine the fair value of each individual investment and record changes in fair value as unrealized appreciation or depreciation.

In December 2020, the SEC adopted Rule 2a-5 under the 1940 Act, which permits a BDC’s board of directors to designate its executive officers or investment adviser as a valuation designee to determine the fair value for its investment portfolio, subject to the active oversight of the board. Our Board of Directors has approved policies and procedures pursuant to Rule 2a-5 (the “Valuation Procedures”) and has designated our Adviser, led by a group of Main Street’s and our Adviser’s executive officers, to serve as the Board of Directors’ valuation designee. We adopted the Valuation Procedures effective April 1, 2021. We believe our Investment Portfolio as of September 30, 2022 and December 31, 2021 approximates fair value as of those dates based on the markets in which we operate and other conditions in existence on those reporting dates.

Revenue Recognition

Interest and Dividend Income

We record interest and dividend income on the accrual basis to the extent amounts are expected to be collected. Dividend income is recorded as dividends are declared by the portfolio company or at the point an obligation exists for the portfolio company to make a distribution. In accordance with our valuation policies, we evaluate accrued interest and dividend income periodically for collectability. When a loan or debt security becomes 90 days or more past due, and if we otherwise do not expect the debtor to be able to service its debt obligation, we will generally place the loan or debt security on non-accrual status and cease recognizing interest income on that loan or debt security until the borrower has demonstrated the ability and intent to pay contractual amounts due. If a loan or debt security’s status significantly improves regarding the debtor’s ability to service the debt obligation, or if a loan or debt security is sold or written off, we remove it from non-accrual status.

Fee Income

We may periodically provide services, including structuring and advisory services to our portfolio companies or other third parties. For services that are separately identifiable and evidence exists to substantiate fair value, fee income is recognized as earned, which is generally when the investment or other applicable transaction closes. Fees received in connection with debt financing transactions for services that do not meet these criteria are treated as debt origination fees and are deferred and accreted into income over the life of the financing.

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Payment-in-Kind (“PIK”) Interest and Cumulative Dividends

We hold certain debt and preferred equity instruments in our Investment Portfolio that contain PIK interest and cumulative dividend provisions. The PIK interest, computed at the contractual rate specified in each debt agreement, is periodically added to the principal balance of the debt and is recorded as interest income. Thus, the actual collection of this interest may be deferred until the time of debt principal repayment. Cumulative dividends are recorded as dividend income, and any dividends in arrears are added to the balance of the preferred equity investment. The actual collection of these dividends in arrears may be deferred until such time as the preferred equity is redeemed or sold. To maintain RIC tax treatment (as discussed in Note B.7.–Summary of Significant Accounting Policies–Income Taxes included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q), these non-cash sources of income may need to be paid out to stockholders in the form of distributions, even though we may not have collected the PIK interest and cumulative dividends in cash. We stop accruing PIK interest and cumulative dividends and write off any accrued and uncollected interest and dividends in arrears when we determine that such PIK interest and dividends in arrears are no longer collectible. For the three months ended September 30, 2022 and 2021, (i) 2.3% and 2.5%, respectively, of our total investment income was attributable to PIK interest income not paid currently in cash and (ii) 0.4% and 0.6%, respectively, of our total investment income was attributable to cumulative dividend income not paid currently in cash. For the nine months ended September 30, 2022 and 2021, (i) 2.5% and 2.4%, respectively, of our total investment income was attributable to PIK interest income not paid currently in cash and (ii) 0.8% and 0.7%, respectively, of our total investment income was attributable to cumulative dividend income not paid currently in cash.

INVESTMENT PORTFOLIO COMPOSITION

The following tables summarize the composition of our total combined Private Loan portfolio investments, LMM portfolio investments and Middle Market portfolio investments at cost and fair value by type of investment as a percentage of the total combined Private Loan portfolio investments, LMM portfolio investments and Middle Market portfolio investments as of September 30, 2022 and December 31, 2021 (this information excludes the Other Portfolio investments).

Cost:						September 30, 2022						December 31, 2021
First lien debt						89.2		%				87.2		%
Equity						10.4		%				11.7		%
Second lien debt						—		%				0.7		%
Equity warrants						0.1		%				0.1		%
Other						0.3		%				0.3		%
						100.0		%				100.0		%

Fair Value:						September 30, 2022						December 31, 2021
First lien debt						83.1		%				82.8		%
Equity						16.6		%				16.1		%
Second lien debt						—		%				0.7		%
Equity warrants						—		%				0.1		%
Other						0.3		%				0.3		%
						100.0		%				100.0		%

Our Private Loan portfolio investments, LMM portfolio investments and Middle Market portfolio investments carry a number of risks including: (1) investing in companies which may have limited operating histories and financial resources; (2) holding investments that generally are not publicly traded and which may be subject to legal and other restrictions on resale; and (3) other risks common to investing in below investment-grade debt and equity investments in our Investment Portfolio. Please see “Item 1A. Risk Factors—Risks Related to our Investments” contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 for a more complete discussion of the risks involved with investing in our Investment Portfolio.

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PORTFOLIO ASSET QUALITY

We utilize an internally developed investment rating system to rate the performance of each Private Loan, LMM and Middle Market portfolio company and to monitor our expected level of returns on each of our Private Loan, LMM and Middle Market investments in relation to our expectations for the portfolio company. The investment rating system takes into consideration various factors, including each investment’s expected level of returns, the collectability of our debt investments and the ability to receive a return of the invested capital in our equity investments, comparisons to competitors and other industry participants, the portfolio company’s future outlook and other factors that are deemed to be significant to the portfolio company.

As of September 30, 2022, our total Investment Portfolio had six investments on non-accrual status, which comprised 1.1% of its fair value and 4.3% of its cost. As of December 31, 2021, our total Investment Portfolio had four investments on non-accrual status, which comprised 0.7% of its fair value and 2.8% of its cost.

The operating results of our portfolio companies are impacted by changes in the broader fundamentals of the United States economy. In periods during which the United States economy contracts, it is likely that the financial results of small to mid-sized companies, like those in which we invest, could experience deterioration or limited growth from current levels, which could ultimately lead to difficulty in meeting their debt service requirements, to an increase in defaults on our debt investments or in realized losses on our investments and to difficulty in maintaining historical dividend payment rates and unrealized appreciation on our equity investments. Consequently, we can provide no assurance that the performance of certain portfolio companies will not be negatively impacted by future economic cycles or other conditions, which could also have a negative impact on our future results.

DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS

Comparison of the three months ended September 30, 2022 and September 30, 2021

Set forth below is a comparison of the results of operations for the three months ended September 30, 2022 and September 30, 2021.

			Three Months Ended September 30,												Net Change
			2022						2021						Amount						%
			(dollars in thousands)
Total investment income			$	26,051					$	22,754					$	3,297					14		%
Total expenses, net of expense waivers			(12,869)						(9,632)						(3,237)						34		%
Net investment income			13,182						13,122						60						—		%
Total net realized gain (loss) from investments			7,238						(3,676)						10,914						NM
Total net unrealized appreciation (depreciation) from investments			(4,435)						7,343						(11,778)						NM
Income tax provision			(722)						(453)						(269)						NM
Net increase in net assets resulting from operations			$	15,263					$	16,336					$	(1,073)					(7)		%

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NM    Net change % not meaningful

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Investment Income

Total investment income for the three months ended September 30, 2022 was $26.1 million, a 14% increase from the $22.8 million of total investment income for the corresponding period of 2021. The following table provides a summary of the changes in the comparable period activity.

			Three Months Ended September 30,												Net Change
			2022						2021						Amount						%
			(dollars in thousands)
Interest income			$	23,346					$	18,818					$	4,528					24		%	(a)
Dividend income			2,166						3,249						(1,083)						(33)		%	(b)
Fee income			539						687						(148)						(22)		%
Total investment income			$	26,051					$	22,754					$	3,297					14		%	(c)

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(a)The increase in interest income was primarily due to (i) higher average levels of Investment Portfolio debt investments primarily from (a) net origination activity in the fourth quarter of 2021 of $66.5 million and $49.1 million in our Private Loan and LMM portfolios, respectively, and (b) net origination activity of $28.6 million and $15.1 million in our Private Loan and LMM portfolios, respectively, for the nine months ended September 30, 2022 and (ii) an increase in floating interest rates on Investment Portfolio debt investments based upon the increase in market index rates to which such floating interest rates are indexed.

(b)The decrease in dividend income from Investment Portfolio equity investments was primarily a result of a $0.8 million decrease in dividend income considered to be less consistent or non-recurring due to elevated levels of such income in the prior year.

(c)The increase in total investment income includes a net reduction in the impact of certain income considered less consistent or non-recurring, comprised of a $0.8 million decrease in dividend income.

Expenses

Total expenses, net of fee and expense waivers, for the three months ended September 30, 2022 were $12.9 million, a 34% increase from $9.6 million in the corresponding period of 2021. The following table provides a summary of the changes in the comparable period activity.

			Three Months Ended September 30,												Net Change
			2022						2021						Amount						%
			(dollars in thousands)
Interest expense			$	6,801					$	3,759					$	3,042					81		%	(a)
Base management fees			4,974						4,473						501						11		%	(b)
Internal administrative services fees			1,405						1,152						253						22		%
General and administrative			941						1,400						(459)						(33)		%
Total expenses before fee and expense waivers			14,121						10,784						3,337						31		%
Waiver of internal administrative services expenses			(1,252)						(1,152)						(100)						9		%
Total expenses			$	12,869					$	9,632					$	3,237					34		%

_________________

(a) The increase in interest expense was primarily related to (i) higher floating interest rates on our Credit Facilities (as defined in the “Liquidity and Capital Resources” section below) based upon the increases in market index rates and (ii) higher weighted average debt balances to support the larger Investment Portfolio resulting from the investment activity since the prior year.

(b) The increase in base management fees was due to an increase in average gross assets subject to the base management fee.

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Net Investment Income

Net investment income for the three months ended September 30, 2022 increased to $13.2 million, or $0.16 per share, compared to net investment income of $13.1 million, or $0.16 per share, for the corresponding period of 2021. The increase in net investment income was principally attributable to the increase in total investment income, partially offset by the increase in total expenses, both as discussed above. The resulting net investment income and net investment income per share includes a $0.8 million, or $0.01 per share, decrease in dividend income considered to be less consistent or non-recurring, as discussed above.

Net Realized Gain (Loss) from Investments

The following table provides a summary of the primary components of the total net realized gain on investments of $7.2 million for the three months ended September 30, 2022:

			Three Months Ended September 30, 2022
			Full Exits												Partial Exits												Restructures												Other (a)						Total (a)
			Net Gain/(Loss)						# of Investments						Net Gain/(Loss)						# of Investments						Net Gain/(Loss)						# of Investments						Net Gain/(Loss)						Net Gain/(Loss)
			(dollars in thousands)
Private Loan portfolio			$	7,619					1						$	—					—						$	—					—						$	(22)					$	7,597
LMM portfolio			—						—						—						—						(1,456)						1						—						(1,456)
Middle Market portfolio			1,097						2						—						—						—						—						—						1,097
Other Portfolio			—						—						—						—						—						—						—						—
Total net realized gain/(loss)			$	8,716					3						$	—					—						$	(1,456)					1						$	(22)					$	7,238

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(a)Other activity includes realized gains and losses from transactions involving two portfolio companies which are not considered to be significant individually or in the aggregate.

Net Unrealized Appreciation (Depreciation)

The following table provides a summary of the total net unrealized depreciation of $4.4 million for the three months ended September 30, 2022:

			Three Months Ended September 30, 2022
			Private Loan									LMM(a)						Middle Market						Other						Total
			(dollars in millions)
Accounting reversals of net unrealized (appreciation) depreciation recognized in prior periods due to net realized (gains / income) losses recognized during the current period			$	(7.5)								$	1.5					$	(0.8)					$	—					$	(6.8)
Net unrealized appreciation (depreciation) relating to portfolio investments			5.0									(0.1)						(3.6)						1.1						2.4
Total net unrealized appreciation (depreciation) relating to portfolio investments			$	(2.5)								$	1.4					$	(4.4)					$	1.1					$	(4.4)

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(a)Includes unrealized appreciation on 17 LMM portfolio investments and unrealized depreciation on 18 LMM portfolio investments.

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Income Tax Benefit (Provision)

The income tax provision for the three months ended September 30, 2022 of $0.7 million principally consisted of (i) a current tax provision of $0.6 million related to a $0.2 million provision for excise tax on our estimated undistributed taxable income and $0.4 million provision for current federal and state income taxes and (ii) a deferred tax provision of $0.1 million, which is primarily the result of the net activity relating to our portfolio investments held in our Taxable Subsidiaries, including changes in loss carryforwards, changes in net unrealized appreciation/depreciation and other temporary book-tax differences. The income tax provision for the three months ended September 30, 2021 of $0.5 million principally consisted of a current tax provision of $0.5 million related to a $0.4 million provision for excise tax on our estimated undistributed taxable income and $0.1 million provision for current state income taxes.

Net Increase in Net Assets Resulting from Operations

The net increase in net assets resulting from operations for the three months ended September 30, 2022 was $15.3 million, or $0.19 per share, compared with a net increase in net assets of $16.3 million, or $0.20 per share, during the three months ended September 30, 2021. The tables above provide a summary of the reasons for the change in net increase in net assets resulting from operations for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021.

Comparison of the nine months ended September 30, 2022 and September 30, 2021

Set forth below is a comparison of the results of operations for the nine months ended September 30, 2022 and September 30, 2021.

			Nine Months Ended September 30,												Net Change
			2022						2021						Amount						%
			(dollars in thousands)
Total investment income			$	73,791					$	65,522					$	8,269					13		%
Total expenses, net of expense waivers			(35,021)						(26,214)						(8,807)						34		%
Net investment income			38,770						39,308						(538)						(1)		%
Total net realized gain (loss) from investments			7,865						(3,849)						11,714						NM
Realized loss on extinguishment of debt			—						(2,091)						2,091						NM
Total net unrealized appreciation (depreciation) from investments			(11,452)						20,363						(31,815)						NM
Income tax benefit (provision)			(1,880)						(1,283)						(597)						NM
Net increase in net assets resulting from operations			$	33,303					$	52,448					$	(19,145)					(37)		%

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NM     Net change % not meaningful

Investment Income

Total investment income for the nine months ended September 30, 2022 was $73.8 million as compared to $65.5 million of total investment income for the corresponding period of 2021. The following table provides a summary of the changes in the comparable period activity.

			Nine Months Ended September 30,												Net Change
			2022						2021						Amount						%
			(dollars in thousands)
Interest income			$	64,577					$	52,218					$	12,359					24		%	(a)
Dividend income			7,430						12,227						(4,797)						(39)		%	(b)
Fee income			1,784						1,077						707						66		%	(c)
Total investment income			$	73,791					$	65,522					$	8,269					13		%	(d)

_________________

(a)The increase in interest income was primarily due to (i) higher average levels of Investment Portfolio debt investments primarily from (a) net origination activity in the fourth quarter of 2021 of $66.5 million and $49.1 million in our Private Loan and LMM portfolios, respectively, and (b) net origination activity of $28.6 million and

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$15.1 million in our Private Loan and LMM portfolios, respectively, for the nine months ended September 30, 2022 and (ii) an increase in floating interest rates on Investment Portfolio debt investments based upon the increases in market index rates to which such floating rates are indexed.

(b)The decrease in dividend income from Investment Portfolio equity investments was primarily a result of a $3.2 million decrease in dividend income considered to be less consistent or non-recurring due to elevated levels of such income in the prior year.

(c)The increase in fee income was primarily related to an increase in management fee income from our equity portfolio investments.

(d)The increase in total investment income includes a net reduction in the impact of certain income considered less consistent or non-recurring, comprised of a $3.2 million decrease in dividend income.

Expenses

Total expenses, net of fee and expense waivers, for the nine months ended September 30, 2022 were $35.0 million, a 34% increase from $26.2 million in the corresponding period of 2021. The following table provides a summary of the changes in the comparable period activity.

			Nine Months Ended September 30,												Net Change
			2022						2021						Amount						%
			(dollars in thousands)
Interest expense			$	16,628					$	10,223					$	6,405					63		%	(a)
Base management fees			14,919						12,534						2,385						19		%	(b)
Internal administrative services fees			3,888						3,247						641						20		%
General and administrative			3,017						3,457						(440)						(13)		%
Total expenses before fee and expense waivers			38,452						29,461						8,991						31		%
Waiver of internal administrative services expenses			(3,431)						(3,247)						(184)						6		%
Total expenses			$	35,021					$	26,214					$	8,807					34		%

_________________

(a)The increase in interest expense was primarily related to (i) higher floating interest rates on our Credit Facilities (as defined in the “Liquidity and Capital Resources” section below) upon the increases in market index rates and (ii) higher weighted average debt balances to support the larger Investment Portfolio resulting from the investment activity since the prior year.

(b)The increase in base management fees was due to an increase in average gross assets subject to the base management fee.

Net Investment Income

Net investment income for the nine months ended September 30, 2022 decreased 1% to $38.8 million, or $0.48 per share, compared to net investment income of $39.3 million, or $0.49 per share, for the corresponding period of 2021. The decrease in net investment income was principally attributable to the increase in total expenses, partially offset by the increase in total investment income, both as discussed above. The decrease in net investment income and net investment income per share includes a $3.2 million, or $0.04 per share, decrease in investment income considered to be less consistent or non-recurring, as discussed above.

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Net Realized Gain (Loss) from Investments

The following table provides a summary of the primary components of the total net realized gain on investments of $7.9 million for the nine months ended September 30, 2022:

			Nine Months Ended September 30, 2022
			Full Exits												Partial Exits												Restructures												Other (a)						Total (a)
			Net Gain/(Loss)						# of Investments						Net Gain/(Loss)						# of Investments						Net Gain/(Loss)						# of Investments						Net Gain/(Loss)						Net Gain/(Loss)
			(dollars in thousands)
Private Loan portfolio			$	7,619					1						$	—					—						$	—					—						$	(13)					$	7,606
LMM portfolio			—						—						—						—						(1,456)						1						(41)						(1,497)
Middle Market portfolio			1,097						2						—						—						—						—						(42)						1,055
Other Portfolio			—						—						779						1						—						—						(78)						701
Total net realized gain/(loss)			$	8,716					3						$	779					1						$	(1,456)					1						$	(174)					$	7,865

_________________

(a)Other activity includes realized gains and losses from transactions involving 11 portfolio companies which are not considered to be significant individually or in the aggregate.

Net Unrealized Appreciation (Depreciation)

The following table provides a summary of the total net unrealized depreciation of $11.5 million for the nine months ended September 30, 2022:

			Nine Months Ended September 30, 2022
			Private Loan						LMM(a)						Middle Market						Other						Total
			(dollars in millions)
Accounting reversals of net unrealized (appreciation) depreciation recognized in prior periods due to net realized (gains / income) losses recognized during the current period			$	(8.1)					$	1.5					$	(1.0)					$	(0.8)					$	(8.4)
Net unrealized appreciation (depreciation) relating to portfolio investments			(3.7)						3.4						(6.1)						3.3						(3.1)
Total net unrealized appreciation (depreciation) relating to portfolio investments			$	(11.8)					$	4.9					$	(7.1)					$	2.5					$	(11.5)

_________________

(a)Includes unrealized appreciation on 19 LMM portfolio investments and unrealized depreciation on 22 LMM portfolio investments.

Income Tax Benefit (Provision)

The income tax provision for the nine months ended September 30, 2022 of $1.9 million principally consisted of (i) a current tax provision of $1.6 million related to a $0.9 million provision for excise tax on our estimated undistributed taxable income and $0.7 million provision for current federal and state income taxes and (ii) a deferred tax provision of $0.3 million, which is primarily the result of the net activity relating to our portfolio investments held in our Taxable Subsidiaries, including changes in loss carryforwards, changes in net unrealized appreciation/depreciation and other temporary book-tax differences. The income tax provision for the nine months ended September 30, 2021 of $1.3 million consisted of a current tax provision of $1.3 million related to a $1.0 million provision for excise tax on our estimated undistributed taxable income and $0.3 million provision for current state income taxes.

Net Increase in Net Assets Resulting from Operations

The net increase in net assets resulting from operations for the nine months ended September 30, 2022 was $33.3 million, or $0.42 per share, compared with a net increase in net assets of $52.4 million, or $0.66 per share, during the nine months ended September 30, 2021. The tables above provide a summary of the reasons for the change in net increase in net assets resulting from operations for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021.

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Liquidity and Capital Resources

This “Liquidity and Capital Resources” section should be read in conjunction with the “Economic Update” section above.

Cash Flows

For the nine months ended September 30, 2022, we experienced a net decrease in cash, cash equivalents and restricted cash of $7.7 million, which is the result of $37.7 million of cash used in our financing activities, partially offset by $30.1 million of cash provided by our operating activities.

The $30.1 million of cash provided by our operating activities resulted primarily from (i) cash proceeds totaling $166.2 million from the sales and repayments of debt investments and sales of and return of capital from equity investments, (ii) cash flows that we generated from the operating profits earned totaling $32.2 million, which is our net investment income, excluding the non-cash effects of the accretion of unearned income, payment-in-kind interest income, cumulative dividends and the amortization expense for deferred financing costs and (iii) cash proceeds of $3.4 million related to the change in other assets and liabilities, partially offset by the funding of new portfolio investments of $171.8 million.

The $37.7 million used in financing activities principally consisted of (i) $74.0 million net cash repayments related to our TIAA Credit Facility and JPM SPV Facility (together, the “Credit Facilities”), (ii) $24.7 million in cash dividends paid to stockholders, (iii) $12.0 million for the repurchase of common stock and (iv) $0.1 million for deferred financing costs, partially offset by (i) $72.5 million of cash proceeds from our Series A Notes (defined below) issued in January 2022 and (ii) $0.8 million net cash proceeds related to our common stock issuance.

Share Repurchase Program

On March 31, 2020, our Board of Directors unanimously approved a temporary suspension of the share repurchase program commencing with the second quarter of 2020. The Board of Directors determined that it was the best interest of the Company to suspend the share repurchase program in order to preserve the financial flexibility and liquidity given the prolonged impact of COVID-19.

On March 2, 2021, our Board of Directors unanimously approved the reinstatement of the share repurchase program commencing in April 2021 with repurchases effectuated via tender offers, and the Company has conducted quarterly tender offers pursuant to its share repurchase program since then. The quarterly tender offers are generally equal to 90% of the aggregate dividend reinvestment plan proceeds resulting from dividend payments. See Item 2. Unregistered Sales of Equity Securities and Use of Proceeds of Part II of this Quarterly Report on Form 10-Q for more information regarding repurchases of our common stock during the three months ended September 30, 2022.

Capital Resources

As of September 30, 2022, we had $18.2 million in cash and cash equivalents and $137.3 million of unused capacity under the Credit Facilities, which we maintain to support our investment and operating activities. As of September 30, 2022, our net asset value totaled $1,138.4 million, or $7.62 per share.

As of September 30, 2022, we had $85.0 million outstanding and $80.0 million of undrawn commitments under our TIAA Credit Facility, and $267.7 million outstanding and $57.3 million of undrawn commitments under our JPM SPV Facility, both of which we estimated approximated fair value. Availability under the TIAA Credit Facility is subject to certain borrowing base limitations and the asset coverage restrictions. Availability under the JPM SPV Facility is subject to certain borrowing base limitations. For further information on our Credit Facilities, including key terms and financial covenants, refer to Note E — Debt included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

On October 22, 2021, we and certain qualified institutional investors entered into a Master Note Purchase Agreement (the “Note Purchase Agreement”), which governs the issuance of $150.0 million in aggregate principal amount of the Company’s 4.04% Series A Senior Notes due 2026 (the “Series A Notes”). The Series A Notes bear a fixed interest rate of 4.04% per year and will mature on October 30, 2026, unless redeemed, purchased or prepaid prior to such date by us in accordance with their terms. We issued $77.5 million of Series A Notes upon entering into the Note Purchase Agreement, and issued an additional $72.5 million in January 2022. Net proceeds from the Series A Note issuance were used to repay outstanding debt borrowed under the Company’s Credit Facilities, including the Main Street

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Term Loan, which was fully repaid and extinguished in October 2021, and the TIAA Credit Facility, on which amounts may be re-borrowed to make investments in accordance with our investment objective and strategies and for general corporate purposes. For more information on our Series A Notes and the Main Street Term Loan, including key terms and financial covenants, refer to Note E—Debt included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

We closed our continuous follow-on public offering of shares to new investors effective September 2017. As such, our ability to raise additional equity is limited. In addition, as a BDC, we generally are required to meet a coverage ratio, or BDC asset coverage ratio, of total assets to total senior securities, which include borrowings and any preferred stock we may issue in the future, of at least 200% (or 150% if certain requirements are met). This requirement limits the amount that we may borrow. As of September 30, 2022, our BDC asset coverage ratio was 221%. The combination of these factors limits our access to capital to fund future investment activities or operating requirements, including our ability to grow the investment portfolio. We anticipate that we will continue to fund our investment activities and operating requirements through existing cash and cash equivalents, cash flows generated through our ongoing operating activities, including cash proceeds from the repayments and from the sales of investments in our portfolio companies, and utilization of available borrowings under our Credit Facilities. Our primary uses of funds will be investments in portfolio companies, operating expenses, cash distributions to holders of our common stock and share repurchases under our share repurchase program.

We periodically invest excess cash balances into marketable securities and idle funds investments. The primary investment objective of marketable securities and idle funds investments is to generate incremental cash returns on excess cash balances prior to utilizing those funds for investment in our Private Loan, LMM and Middle Market portfolio investments. Marketable securities and idle funds investments generally consist of debt investments, independently rated debt investments, certificates of deposit with financial institutions, diversified bond funds and publicly traded debt and equity investments.

In order to satisfy the Code requirements applicable to a RIC, we intend to distribute to our stockholders, after consideration and application of our ability under the Code to carry forward certain excess undistributed taxable income from one tax year into the next tax year, substantially all of our taxable income.

Although we have been able to secure access to additional liquidity, including through the Credit Facilities and the Note Purchase Agreement, there is no assurance that debt or equity capital will be available to us in the future on favorable terms, or at all.

Recently Issued or Adopted Accounting Standards

From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted by us as of the specified effective date. We believe that the impact of recently issued standards and any that are not yet effective will not have a material impact on our consolidated financial statements upon adoption. For a description of recently issued or adopted accounting standards, see Note B.11.—Recently Issued or Adopted Accounting Standards included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

Inflation

Inflation has not historically had a significant effect on our results of operations in any of the reporting periods presented herein. However, our portfolio companies have experienced, specifically including over the last few quarters as a result of the COVID-19 pandemic, recent geopolitical events and the related supply chain and labor issues, and may continue to experience, the increasing impacts of inflation on their operating results, including periodic escalations in their costs for labor, raw materials and third-party services and required energy consumption. These issues and challenges related to inflation are receiving significant attention from our investment teams and the management teams of our portfolio companies as we work to manage these growing challenges. Prolonged or more severe impacts of inflation to our portfolio companies could continue to impact their operating profits and, thereby, increase their borrowing costs, and as a result negatively impact their ability to service their debt obligations and/or reduce their available cash for distributions. In addition, these factors could have a negative impact on the fair value of our investments in these portfolio companies. The combined impacts of these impacts in turn could negatively affect our results of operations.

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Off-Balance Sheet Arrangements

We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. These instruments include commitments to extend credit and fund equity capital and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the Consolidated Balance Sheets. At September 30, 2022, we had a total of $69.9 million in outstanding commitments comprised of (i) 65 investments with commitments to fund revolving loans that had not been fully drawn or term loans with additional commitments not yet funded and (ii) three investments with equity capital commitments that had not been fully called.

Contractual Obligations

As of September 30, 2022, we had $502.7 million in total borrowings outstanding under our Credit Facilities and Series A Notes. The TIAA Credit Facility will mature on March 1, 2026. The JPM SPV Facility will mature on February 3, 2025. The Series A Notes will mature on October 30, 2026. See further discussion of the terms of our Credit Facilities, Series A Notes and other debt in Note E—Debt included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

A summary of our significant contractual payment obligations for the repayment of outstanding borrowings at September 30, 2022 is as follows:

			2022						2023						2024						2025						2026						Thereafter						Total
			(dollars in thousands)
JPM SPV Facility(2)			$	—					$	—					$	—					$	267,688					$	—					$	—					$	267,688
Series A Notes			—						—						—						—						150,000						—						150,000
Interest due on Series A Senior Notes			3,013						6,060						6,060						6,060						6,060						—						27,253
TIAA Credit Facility(1)			—						—						—						—						85,000						—						85,000
Total			$	3,013					$	6,060					$	6,060					$	273,748					$	241,060					$	—					$	529,941

_________________

(1)As of September 30, 2022, $80.0 million remained available to borrow under the TIAA Credit Facility; however, our borrowing ability is limited to the asset coverage restrictions imposed by the TIAA Credit Facility and the 1940 Act, as discussed above.

(2)As of September 30, 2022, $57.3 million remained available to borrow under the JPM SPV Facility; however, our borrowing ability is limited to the asset coverage restrictions imposed by the JPM SPV Facility and the 1940 Act, as discussed above.

Related Party Transactions and Agreements

We have entered into agreements with our Adviser and/or certain of its affiliates and other parties whereby we pay certain fees and reimbursements to these entities. These included payments for selling commissions and fees and for reimbursement of offering costs. In addition, we make payments for certain services that include the identification, execution and management of our investments and also the management of our day-to-day operations provided to us by our Adviser, pursuant to various agreements that we have entered into. See Note K—Related Party Transactions included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q for additional information regarding related party transactions.

Recent Developments

On November 1, 2022, we repurchased 522,498 shares of our common stock validly tendered and not withdrawn on the terms set forth in our tender offer statement on Schedule TO and Offer to Purchase filed with the SEC on August 3, 2022. The shares were repurchased at a price of $7.66 per share, which was our net asset value per share as of November 1, 2022, for an aggregate purchase price of $4.0 million (an amount equal to 90% of the proceeds we received from the issuance of shares under our dividend reinvestment plan from our November 1, 2022 dividend payment).

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On November 10, 2022, our Board of Directors declared a quarterly cash dividend of $0.16 per share payable January 31, 2023 to stockholders of record as of December 30, 2022.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are subject to financial market risks, including changes in interest rates, and changes in interest rates may affect both our interest expense on the debt outstanding under our Credit Facilities and our interest income from portfolio investments. Our risk management systems and procedures are designed to identify and analyze our risk, to set appropriate policies and limits and to continually monitor these risks. Our investment income will be affected by changes in various interest rate indices, including LIBOR, SOFR and Prime rates, to the extent that any debt investments include floating interest rates. See “Risk Factors — Risks Related to our Investments — Changes relating to the LIBOR calculation process, the phase-out of LIBOR and the use of replacement rates for LIBOR may adversely affect the value of our portfolio securities.”, “Risk Factors — Risks Related to our Investments — We are subject to risks associated with the current interest rate environment and changes in interest rates will affect our cost of capital, net investment income and the value of our investments.” and “Risk Factors — Risks Related to Leverage — Because we borrow money, the potential for gain or loss on amounts invested in us is magnified and may increase the risk of investing in us.” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 for more information regarding risks associated with our debt investments and borrowings that utilize LIBOR, SOFR or Prime as a reference rate.

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The majority of our debt investments are made with either fixed interest rates or floating rates that are subject to contractual minimum interest rates for the term of the investment. As of September 30, 2022, 83% of our debt investment portfolio (at cost) bore interest at floating rates, 93% of which were subject to contractual minimum interest rates. As of September 30, 2022, 30% of our debt obligations bore interest at fixed rates. Our interest expense associated with our Credit Facilities will be affected by changes in the published LIBOR or SOFR rates, as applicable. However, the interest rates on our outstanding Series A Notes due 2026 (the “Series A Notes”) are fixed for the life of such debt. As of September 30, 2022, we had not entered into any interest rate hedging arrangements. Due to our limited use of derivatives, we have claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act and, therefore, are not subject to registration or regulation as a pool operator under such Act. The following table shows the approximate annualized increase or decrease in the components of net investment income due to hypothetical base rate changes in interest rates, assuming no changes in our investments and borrowings as of September 30, 2022.

Basis Point Change						Increase (Decrease) in Interest Income						(Increase) Decrease in Interest Expense						Increase (Decrease) in Net Investment Income						Increase (Decrease) in Net Investment Income per Share
						(dollars in thousands, except per share amounts)
(200)						$	(16,088)					$	7,054					$	(9,034)					$	(0.11)
(175)						(14,130)						6,172						(7,958)						(0.10)
(150)						(12,161)						5,290						(6,871)						(0.09)
(125)						(10,172)						4,409						(5,763)						(0.07)
(100)						(8,161)						3,527						(4,634)						(0.06)
(75)						(6,137)						2,645						(3,492)						(0.04)
(50)						(4,114)						1,763						(2,351)						(0.03)
(25)						(2,091)						882						(1,209)						(0.02)
25						1,956						(882)						1,074						0.01
50						3,980						(1,763)						2,217						0.03
75						6,003						(2,645)						3,358						0.04
100						8,026						(3,527)						4,499						0.06
125						10,050						(4,409)						5,641						0.07
150						12,073						(5,290)						6,783						0.08
175						14,097						(6,172)						7,925						0.10
200						16,120						(7,054)						9,066						0.11
300						24,214						(10,581)						13,633						0.17
400						32,307						(14,108)						18,199						0.23

Although we believe that this analysis is indicative of the impact of interest rate changes to our Net Investment Income as of September 30, 2022, it does not take into consideration future changes in the credit market, credit quality, or other business or economic developments that could affect our Net Investment Income. Accordingly, we can offer no assurances that actual results would not differ materially from the analysis above. The hypothetical results assume that all LIBOR, SOFR and Prime rate changes would be effective on the first day of the period. However, the contractual LIBOR, SOFR and Prime rate reset dates would vary throughout the period. The majority of our investments are based on contracts which reset quarterly while our TIAA Credit Facility and our JPM SPV Facility reset on a monthly and quarterly basis, respectively. The hypothetical results would also be impacted by the changes in the amount of debt outstanding under our Credit Facilities (with an increase (decrease) in the debt outstanding under the Credit Facilities resulting in an (increase) decrease in the hypothetical interest expense).

Item 4. Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer, President, Chief Financial Officer, Chief Compliance Officer and Chief Accounting Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 of the Exchange Act). Based on that evaluation, our Chief Executive Officer, President, Chief Financial Officer, Chief Compliance Officer and Chief Accounting Officer have concluded that our current disclosure controls and procedures are effective in timely alerting them of material information relating to us that is required to be disclosed in the reports we file or submit under the Exchange Act. There have been no changes in

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our internal control over financial reporting that occurred during the quarter ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

We or our Adviser may, from time to time, be involved in litigation arising out of our respective operations in the normal course of business or otherwise. Furthermore, third parties may seek to impose liability on us in connection with the activities of our portfolio companies. While the outcome of any current legal proceedings cannot at this time be predicted with certainty, we do not expect any current matters will materially affect our or our Adviser’s financial condition or results of operations; however, there can be no assurance whether any pending legal proceedings will have a material adverse effect on our or our Adviser’s financial condition or results of operations in any future reporting period.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risk factors described in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 that we filed with the SEC on March 14, 2022, which could materially affect our business, financial condition and/or operating results. There have been no material changes to the risk factors as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

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

Sales of Unregistered Securities

During the three months ended September 30, 2022, we issued 574,866 shares of our common stock under our dividend reinvestment plan. These issuances were not subject to the registration requirements of the Securities Act of 1933, as amended. The aggregate value of the shares of common stock issued during the three months ended September 30, 2022 under the dividend reinvestment plan was $4.5 million.

Issuer Purchases of Equity Securities

The following chart summarizes repurchases of our common stock for the three months ended September 30, 2022:

Period						Total number of shares purchased						Average price paid per share						Total number of shares purchased as part of publicly announced plans or programs						Approximate dollar value of shares that may yet be purchased under the plans or programs
July 1 through July 31, 2022						—						—						—						—
August 1 through August 31, 2022						527,508						$	7.64					527,508						N/A
September 1 through September 30, 2022						—						—						—						—
Total						527,508												527,508

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Item 6. Exhibits

Listed below are the exhibits which are filed as part of this report (according to the number assigned to them in Item 601 of Regulation S-K):

Exhibit Number						Description of Exhibit
31.1						Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.2						Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
32.1						Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
32.2						Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

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SIGNATURES

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

			MSC INCOME FUND, INC.
Date: November 14, 2022			/s/ DWAYNE L. HYZAK
			Dwayne L. Hyzak
			Chief Executive Officer
			(principal executive officer)
Date: November 14, 2022			/s/ JESSE E. MORRIS
			Jesse E. Morris
			Chief Financial Officer and Chief Operating Officer
			(principal financial officer)
Date: November 14, 2022			/s/ CORY E. GILBERT
			Cory E. Gilbert
			Vice President and Chief Accounting Officer
			(principal accounting officer)

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