UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


(Mark One)
⌧	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
◻	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from: to

Commission File Number: 814-00939

MSC Income Fund, Inc.

(Exact name of registrant as specified in its charter)


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

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 ◻ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ◻	Accelerated filer ◻	Non-accelerated filer ⌧	Smaller reporting company ◻ Emerging growth company ◻

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. ◻

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

The number of shares outstanding of the issuer’s common stock as of May 16, 2022 was 80,013,491.

Table of Contents

TABLE OF CONTENTS


PART I
FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets—March 31, 2022 (unaudited) and December 31, 2021	1
	Consolidated Statements of Operations (unaudited)—Three months ended March 31, 2022 and 2021	2
	Consolidated Statements of Changes in Net Assets (unaudited)—Three months ended March 31, 2022 and 2021	3
	Consolidated Statements of Cash Flows (unaudited)—Three months ended March 31, 2022 and 2021	4
	Consolidated Schedule of Investments (unaudited)—March 31, 2022	5
	Consolidated Schedule of Investments—December 31, 2021	20
	Notes to Consolidated Financial Statements (unaudited)	33
	Consolidated Schedules of Investments in and Advances to Affiliates (unaudited)—Three months ended March 31, 2022 and 2021	66
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	72
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	84
Item 4.	Controls and Procedures	85
PART II
OTHER INFORMATION
Item 1.	Legal Proceedings	85
Item 1A.	Risk Factors	86
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	86
Item 6.	Exhibits	87
	Signatures	88

Table of Contents

MSC INCOME FUND, INC.

Consolidated Balance Sheets

(in thousands, except shares and per share amounts)


	March 31,		December 31,
	2022		2021
ASSETS	(Unaudited)
Investments at fair value:
Control investments (cost: $29,072 and $28,903 as of March 31, 2022 and December 31, 2021, respectively)	$	46,930	$	46,583
Affiliate investments (cost: $216,740 and $209,971 as of March 31, 2022 and December 31, 2021, respectively)		241,000		234,158
Non‑Control/Non‑Affiliate investments (cost: $822,092 and $828,301 as of March 31, 2022 and December 31, 2021, respectively)		793,666		796,395
Total investments (cost: $1,067,904 and $1,067,175 as of March 31, 2022 and December 31, 2021, respectively)		1,081,596		1,077,136
Cash and cash equivalents		39,242		25,813
Dividends and interest receivable		10,425		12,991
Deferred financing costs (net of accumulated amortization of $1,492 and $1,290 as of March 31, 2022 and December 31, 2021, respectively)		3,825		4,049
Receivable for securities sold		—		21,729
Prepaids and other assets		1,739		2,059
Total assets	$	1,136,827	$	1,143,777
LIABILITIES
Credit facilities	$	346,688	$	426,688
Series A Notes due 2026 (par: $150,000 and $77,500 as of March 31, 2022 and December 31, 2021, respectively)		148,663		76,184
Accounts payable and other liabilities		1,889		3,159
Interest payable		4,310		3,093
Dividend payable		13,178		11,974
Management and incentive fees payable		5,141		5,339
Payable for securities purchased		210		4,170
Deferred tax liability, net		121		—
Total liabilities		520,200		530,607
Commitments and contingencies (Note J)
NET ASSETS
Common stock, $0.001 par value per share (450,000,000 shares authorized; 79,870,636 and 79,826,605 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively)		80		80
Additional paid‑in capital		682,848		682,426
Total overdistributed earnings		(66,301)		(69,336)
Total net assets		616,627		613,170
Total liabilities and net assets	$	1,136,827	$	1,143,777
NET ASSET VALUE PER SHARE	$	7.72	$	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
	March 31,
	2022		2021
INVESTMENT INCOME:
Interest, fee and dividend income:
Control investments	$	1,001	$	600
Affiliate investments		5,206		3,650
Non‑Control/Non‑Affiliate investments		17,194		16,022
Total investment income		23,401		20,272
EXPENSES:
Interest		4,529		3,164
Base management fees		4,990		3,903
Internal administrative services expenses		1,181		1,055
Offering costs		62		—
Professional fees		347		558
Insurance		130		114
Board of director fees		90		108
General and administrative		409		483
Total expenses before expense waivers		11,738		9,385
Waiver of internal administrative services expenses		(1,030)		(1,055)
Total expenses, net of expense waivers		10,708		8,330
NET INVESTMENT INCOME		12,693		11,942
NET REALIZED GAIN (LOSS):
Affiliate investments		446		—
Non‑Control/Non‑Affiliate investments		(193)		(1,991)
Realized loss on extinguishment of debt		—		(2,091)
Total net realized gain (loss)		253		(4,082)
NET UNREALIZED APPRECIATION (DEPRECIATION):
Control investments		177		(66)
Affiliate investments		77		1,003
Non‑Control/Non‑Affiliate investments		3,477		4,256
Total net unrealized appreciation (depreciation)		3,731		5,193
INCOME TAXES:
Federal and state income, excise and other taxes		(343)		(396)
Deferred taxes		(121)		—
Income tax benefit (provision)		(464)		(396)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	16,213	$	12,657
NET INVESTMENT INCOME PER SHARE—BASIC AND DILUTED	$	0.16	$	0.15
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE—BASIC AND DILUTED	$	0.20	$	0.16
WEIGHTED-AVERAGE SHARES OUTSTANDING—BASIC AND DILUTED		79,861,392		79,608,304

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		Total
	Number of	Par		Paid‑In		Overdistributed		Total Net
	Shares	Value		Capital		Earnings		Asset 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

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

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)


	Three Months Ended
	March 31,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase (decrease) in net assets resulting from operations	$	16,213	$	12,657
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Principal repayments received, proceeds from sales of investments in portfolio companies		51,769		60,744
Investments in portfolio companies		(49,899)		(79,381)
Net unrealized (appreciation) depreciation		(3,731)		(5,193)
Net realized (gain) loss on the sale of portfolio investments		(253)		1,991
Realized loss on extinguishment of debt		—		2,091
Amortization of deferred financing costs		325		311
Accretion of unearned income		(1,337)		(959)
Payment-in-kind interest		(1,009)		(1,412)
Deferred tax provision		121		—
Changes in other assets and liabilities:
Dividends and interest receivable		2,566		(2,356)
Receivable for securities sold		21,729		(1,789)
Prepaid and other assets		320		919
Payable for securities purchased		(3,960)		10,782
Management and incentive fees payable		(198)		(299)
Interest payable		1,217		1,485
Accounts payable and other liabilities		(1,270)		620
Net cash provided by (used in) operating activities		32,603		211
CASH FLOWS FROM FINANCING ACTIVITIES
Redemption of common stock		(3,790)		—
Dividends paid		(7,762)		—
Repayments on Credit Facilities		(112,000)		(311,816)
Proceeds from Credit Facilities		32,000		294,688
Proceeds from Series A Notes due 2026		72,500		—
Payment of deferred financing costs		(122)		(3,545)
Net cash provided by (used in) financing activities		(19,174)		(20,673)
Net increase (decrease) in cash, cash equivalents and restricted cash		13,429		(20,462)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD		25,813		49,066
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	39,242	$	28,604

Supplemental cash flow disclosures:
Interest paid	$	2,988	$	1,369
Taxes paid	$	1,668	$	396
Non-cash financing activities:
Value of shares issued pursuant to the DRIP	$	4,212	$	-

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

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments

March 31, 2022

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Rate	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		8.23% (L+8.00%)	10/29/2026		19,152		18,942		19,153
			Member Units	(8)	12/19/2014	2,896						6,435		22,750
												25,377		41,903
Harris Preston Fund Investments	(12) (13)	Investment Partnership
			LP Interests (2717 MH, L.P.)	(24)	10/1/2017	49.3%						2,860		4,317

Subtotal Control Investments (7.6% of net assets at fair value)											$	29,072	$	46,930
Affiliate Investments
AFG Capital Group, LLC		Provider of Rent-to-Own Financing Solutions and Services
			Secured Debt		4/25/2019		10.00%	5/25/2022	$	14	$	14	$	14
			Preferred Member Units	(8)	11/7/2014	46						300		2,090
												314		2,104
Analytical Systems Keco Holdings, LLC		Manufacturer of Liquid and Gas Analyzers
			Secured Debt	(9)	8/16/2019		12.00% (L+10.00%, Floor 2.00%)	8/16/2024		1,219		1,168		1,168
			Preferred Member Units		8/16/2019	800						800		-
			Preferred Member Units		5/20/2021	607						607		1,080
			Warrants	(27)	8/16/2019	105		8/16/2029				79		-
												2,654		2,248
ATX Networks Corp.	(11)	Provider of Radio Frequency Management Equipment
			Secured Debt	(9)	9/1/2021		8.50% (L+7.50%, Floor 1.00%)	9/1/2026		7,602		7,057		7,260
			Unsecured Debt	(19)	9/1/2021		10.00% PIK	9/1/2028		3,164		2,085		2,136
			Common Stock		9/1/2021	585						-		-
												9,142		9,396
Barfly Ventures, LLC	(10)	Casual Restaurant Group
			Member Units		10/26/2020	12						528		683

Batjer TopCo, LLC		HVAC Mechanical Contractor
			Secured Debt		3/7/2022		11.00%	3/31/2027		1,225		1,201		1,201
			Preferred Stock		3/7/2022	453						453		453
												1,654		1,654
Brewer Crane Holdings, LLC		Provider of Crane Rental and Operating Services
			Secured Debt	(9)	1/9/2018		11.00% (L+10.00%, Floor 1.00%)	1/9/2023		1,984		1,976		1,976
			Preferred Member Units	(8)	1/9/2018	737						1,070		1,940
												3,046		3,916
Centre Technologies Holdings, LLC		Provider of IT Hardware Services and Software Solutions
			Secured Debt	(9)	1/4/2019		12.00% (L+10.00%, Floor 2.00%)	1/4/2024		2,316		2,296		2,181
			Preferred Member Units		1/4/2019	3,174						1,460		1,460
												3,756		3,641
Chamberlin Holding LLC		Roofing and Waterproofing Specialty Contractor
			Secured Debt	(9)	2/26/2018		9.00% (L+8.00%, Floor 1.00%)	2/26/2023		4,420		4,382		4,420
			Member Units	(8)	2/26/2018	1,087						2,860		6,030
			Member Units	(8) (23)	11/2/2018	261,786						330		358
												7,572		10,808

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

March 31, 2022

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Rate	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
Charps, LLC		Pipeline Maintenance and Construction
			Preferred Member Units	(8)	2/3/2017	457						491		3,520

Clad-Rex Steel, LLC		Specialty Manufacturer of Vinyl-Clad Metal
			Secured Debt	(9)	12/20/2016		10.50% (L+9.50%, Floor 1.00%)	1/15/2024		2,620		2,620		2,620
			Secured Debt		12/20/2016		10.00%	12/20/2036		268		266		266
			Member Units	(8)	12/20/2016	179						1,820		2,560
			Member Units	(23)	12/20/2016	200						53		152
												4,759		5,598
Cody Pools, Inc.		Designer of Residential and Commercial Pools
			Secured Debt	(9)	3/6/2020		12.25% (L+10.50%, Floor 1.75%)	12/17/2026		7,190		7,059		7,190
			Preferred Member Units	(8) (23)	3/6/2020	147						2,079		11,910
												9,138		19,100
Colonial Electric Company LLC		Provider of Electrical Contracting Services
			Secured Debt		3/31/2021		12.00%	3/31/2026		6,064		5,938		5,938
			Preferred Member Units	(8)	3/31/2021	4,320						1,920		2,280
												7,858		8,218
Datacom, LLC		Technology and Telecommunications Provider
			Secured Debt		3/31/2021		7.50%	12/31/2025		981		899		851
			Preferred Member Units	(8)	3/31/2021	1,000						290		300
												1,189		1,151
Digital Products Holdings LLC		Designer and Distributor of Consumer Electronics
			Secured Debt	(9)	4/1/2018		11.00% (L+10.00%, Floor 1.00%)	4/1/2023		4,131		4,109		4,109
			Preferred Member Units	(8)	4/1/2018	964						2,375		2,459
												6,484		6,568
Direct Marketing Solutions, Inc.		Provider of Omni-Channel Direct Marketing Services
			Secured Debt	(9)	2/13/2018		12.00% (L+11.00%, Floor 1.00%)	2/13/2024		4,637		4,585		4,637
			Preferred Stock	(8)	2/13/2018	2,100						2,100		5,610
												6,685		10,247
Flame King Holdings, LLC		Propane Tank and Accessories Distributor
			Secured Debt	(9)	10/29/2021		7.50% (L+6.50%, Floor 1.00%)	10/31/2026		1,900		1,882		1,882
			Secured Debt	(9)	10/29/2021		12.00% (L+11.00%, Floor 1.00%)	10/31/2026		5,300		5,153		5,153
			Preferred Equity	(8)	10/29/2021	2,340						2,600		2,600
												9,635		9,635
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		10.50% (L+8.50%, Floor 2.00%)	1/1/2025		5,400		5,384		5,400
			Member Units	(8)	6/24/2016	2,261						4,424		11,279
												9,808		16,679

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

March 31, 2022

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Rate	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
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		3,058		3,136
			Preferred Member Units	(8)	3/31/2021	56						1,225		1,750
												4,283		4,886
Gulf Publishing Holdings, LLC		Energy Industry Focused Media and Publishing
			Secured Debt	(9) (17) (19)	9/29/2017		10.50% (5.25% Cash, 5.25% PIK) (L+9.50%, Floor 1.00%)	9/30/2020		64		64		64
			Secured Debt	(17) (19)	4/29/2016		12.50% (6.25% Cash, 6.25% PIK)	4/29/2021		3,391		3,391		2,000
			Member Units		4/29/2016	920						920		-
												4,375		2,064
Harris Preston Fund Investments	(12) (13)	Investment Partnership
			LP Interests (HPEP 3, L.P.)	(8) (24)	8/9/2017	8.2%						3,193		4,432

Kickhaefer Manufacturing Company, LLC		Precision Metal Parts Manufacturing
			Secured Debt		10/31/2018		11.50%	10/31/2023		5,104		5,049		5,049
			Secured Debt		10/31/2018		9.00%	10/31/2048		977		967		967
			Member Units		10/31/2018	145						3,060		3,060
			Member Units	(8) (23)	10/31/2018	200						248		615
												9,324		9,691
Market Force Information, LLC		Provider of Customer Experience Management Services
			Secured Debt	(14) (19)	7/28/2017		12.00% PIK	7/28/2023		6,520		6,466		2,237
			Member Units		7/28/2017	185,980						4,160		-
												10,626		2,237
MH Corbin Holding LLC		Manufacturer and Distributor of Traffic Safety Products
			Secured Debt		8/31/2015		13.00%	3/31/2022		2,043		2,043		1,092
			Preferred Member Units		3/15/2019	16,500						1,100		-
			Preferred Member Units		9/1/2015	1,000						1,500		-
												4,643		1,092
Mystic Logistics Holdings, LLC		Logistics and Distribution Services Provider for Large Volume Mailers
			Secured Debt		8/18/2014		10.00%	1/31/2024		1,524		1,524		1,524
			Common Stock	(8)	8/18/2014	1,468						680		2,764
												2,204		4,288
NexRev LLC		Provider of Energy Efficiency Products & Services
			Secured Debt		2/28/2018		11.00%	2/28/2025		4,000		3,982		3,462
			Preferred Member Units	(8)	2/28/2018	21,600,000						1,720		670
												5,702		4,132
NuStep, LLC		Designer, Manufacturer and Distributor of Fitness Equipment
			Secured Debt	(9)	1/31/2017		7.50% (L+6.50%, Floor 1.00%)	1/31/2025		730		729		730
			Secured Debt		1/31/2017		12.00%	1/31/2025		4,310		4,308		4,310
			Preferred Member Units		1/31/2017	102						2,550		3,379
												7,587		8,419
Oneliance, LLC		Construction Cleaning Company
			Secured Debt	(9)	8/6/2021		12.00% (L+11.00%, Floor 1.00%)	8/6/2026		1,400		1,375		1,375
			Preferred Stock		8/6/2021	264						264		264
												1,639		1,639

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

March 31, 2022

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Rate	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
Orttech Holdings, LLC		Distributor of Industrial Clutches, Brakes and Other Components
			Secured Debt	(9)	7/30/2021		12.00% (L+11.00%, Floor 1.00%)	7/31/2026		6,094		5,984		5,984
			Preferred Stock	(8) (23)	7/30/2021	2,500						2,500		2,500
												8,484		8,484
Robbins Bros. Jewelry, Inc.		Bridal Jewelry Retailer
			Secured Debt	(9)	12/15/2021		12.00% (L+11.00%, Floor 1.00%)	12/15/2026		4,040		3,955		3,955
			Preferred Equity		12/15/2021	1,230						1,230		1,230
												5,185		5,185
SI East, LLC		Rigid Industrial Packaging Manufacturing
			Secured Debt		8/31/2018		10.25%	8/31/2023		21,848		21,684		21,848
			Preferred Member Units	(8)	8/31/2018	52						406		4,180
												22,090		26,028
Sonic Systems International, LLC	(10)	Nuclear Power Staffing Services
			Secured Debt	(9)	8/20/2021		8.50% (L+7.50%, Floor 1.00%)	8/20/2026		14,000		13,752		13,752
			Common Stock		8/20/2021	9,191						1,250		1,180
												15,002		14,932
Tedder Industries, LLC		Manufacturer of Firearm Holsters and Accessories
			Secured Debt		8/31/2018		12.00%	8/31/2022		4,200		4,170		4,170
			Preferred Member Units		8/31/2018	126						2,145		2,145
												6,315		6,315
Trantech Radiator Topco, LLC		Transformer Cooling Products and Services
			Secured Debt		5/31/2019		12.00%	5/31/2024		2,080		2,043		2,080
			Common Stock	(8)	5/31/2019	154						1,164		2,160
												3,207		4,240
VVS Holdco LLC		Omnichannel Retailer of Animal Health Products
			Secured Debt	(9) (23)	12/1/2021		7.00% (L+6.00%, Floor 1.00%)	12/1/2026		200		193		193
			Secured Debt	(23)	12/1/2021		11.50%	12/1/2026		7,600		7,386		7,386
			Preferred Equity	(8) (23)	12/1/2021	2,960						2,960		2,960
												10,539		10,539
Subtotal Affiliate Investments (39.1% of net assets at fair value)											$	216,740	$	241,000

Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

March 31, 2022

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Rate (30)	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
Non-Control/Non-Affiliate Investments (7)
AAC Holdings, Inc.	(11)	Substance Abuse Treatment Service Provider
			Secured Debt	(19)	12/11/2020		18.00% (10.00% Cash, 8.00% PIK)	6/25/2025	$	3,710	$	3,437	$	3,580
			Common Stock		12/11/2020	593,927						3,148		2,079
			Warrants	(27)	12/11/2020	197,717		12/11/2025				—		692
												6,585		6,351
Adams Publishing Group, LLC	(10)	Local Newspaper Operator
			Secured Debt	(9)	3/11/2022		8.50% (L+7.50%, Floor 1.00%)	3/11/2027		3,059		3,051		3,051

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%, Floor 1.00%)	3/19/2026		9,500		9,337		9,112

American Health Staffing Group, Inc.	(10)	Healthcare Temporary Staffing
			Secured Debt	(9)	11/19/2021		7.00% (L+6.00%, Floor 1.00%)	11/19/2026		8,333		8,240		8,240

American Nuts, LLC	(10)	Roaster, Mixer and Packager of Bulk Nuts and Seeds
			Secured Debt	(9) (30)	3/11/2022		7.75% (SOFR+6.75%, Floor 1.00%)	4/10/2026		5,994		5,937		5,937
			Secured Debt	(9) (30)	3/11/2022		9.75% (SOFR+8.75%, Floor 1.00%)	4/10/2026		5,994		5,937		5,937
												11,874		11,874
American Teleconferencing Services, Ltd.	(11)	Provider of Audio Conferencing and Video Collaboration Solutions
			Secured Debt	(9) (14)	9/17/2021		7.50% (L+6.50%, Floor 1.00%)	6/30/2022		2,425		2,375		133
			Secured Debt	(9) (14)	5/19/2016		7.50% (L+6.50%, Floor 1.00%)	6/28/2023		11,693		11,451		643
												13,826		776
ArborWorks, LLC	(10)	Vegetation Management Services
			Secured Debt	(9)	11/9/2021		8.00% (L+7.00%, Floor 1.00%)	11/9/2026		16,149		15,781		15,781
			Common Equity		11/9/2021	124						124		124
												15,905		15,905
ATS Operating, LLC	(10)	For-Profit Thrift Retailer
			Secured Debt	(9) (30)	1/18/2022		7.50%(SOFR+6.50%, Floor 1.00%)	1/18/2027		100		100		100
			Secured Debt	(9) (30)	1/18/2022		6.50%(SOFR+5.50%, Floor 1.00%)	1/18/2027		925		904		904
			Secured Debt	(9) (30)	1/18/2022		8.50%(SOFR+7.50%, Floor 1.00%)	1/18/2027		925		904		904
			Common Stock		1/18/2022	100,000						100		100
												2,008		2,008
AVEX Aviation Holdings, LLC	(10)	Specialty Aircraft Dealer
			Secured Debt	(9)	12/15/2021		8.00% (L+7.00%, Floor 1.00%)	12/15/2026		150		141		141
							8.00% (L+7.00%, Floor 1.00%)	12/15/2026		1,696		1,664		1,664
			Common Equity		12/15/2021	50						50		50
												1,855		1,855

Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

March 31, 2022

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Rate (30)	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
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%, Floor 1.00%)	4/8/2021		1,200		1,200		575
			Preferred Stock (non-voting)	(8) (19)	12/17/2018		15.00% PIK					41		—
			Member Units		4/8/2016	200,000						200		—
												1,441		575
BDS Solutions IntermediateCo, LLC	(10)	Outsourced Consumer Services Provider
			Secured Debt	(9) (30)	2/7/2022		7.50% (SOFR+6.50%, Floor 1.00%)	2/7/2027		3,668		3,591		3,591

Berry Aviation, Inc.	(10)	Charter Airline Services
			Secured Debt	(19)	7/6/2018		12.00% (10.50% Cash, 1.50% PIK)	1/6/2024		188		187		188
			Preferred Member Units	(8) (19) (23)	11/12/2019	122,416	16.00% PIK					175		325
			Preferred Member Units	(8) (19) (23)	7/6/2018	1,548,387	8.00% PIK					2,037		4,007
												2,399		4,520
Binswanger Enterprises, LLC	(10)	Glass Repair and Installation Service Provider
			Secured Debt	(9)	3/10/2017		9.50% (L+8.50%, Floor 1.00%)	3/10/2023		12,001		11,982		12,001
			Member Units		3/10/2017	1,050,000						1,050		730
												13,032		12,731
Bluestem Brands, Inc.	(11)	Multi-Channel Retailer of General Merchandise
			Secured Debt	(9)	8/28/2020		10.00% (L+8.50%, Floor 1.50%)	8/28/2025		5,745		5,745		5,724
			Common Stock	(8)	10/1/2020	700,446						—		2,687
												5,745		8,411
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		6/30/2017	540,000						564		1,208
												644		1,288
Brightwood Capital Fund Investments	(12) (13)	Investment Partnership
			LP Interests (Brightwood Capital Fund III, LP)	(8) (24)	7/21/2014	0.5%						2,465		1,501
			LP Interests (Brightwood Capital Fund IV, LP)	(8) (24)	10/26/2016	1.18%						8,737		8,788
												11,202		10,289
Buca C, LLC		Casual Restaurant Group
			Secured Debt	(9) (17)	6/30/2015		12.25% (L+11.25%, Floor 1.00%)	6/30/2020		13,164		13,164		9,705
			Preferred Member Units	(19)	6/30/2015	4	6.00% PIK					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%, Floor 1.00%)	6/10/2026		310		287		287
			Secured Debt	(9)	6/14/2021		6.00% (L+5.00%, Floor 1.00%)	6/10/2028		13,356		13,143		13,356
												13,430		13,643

Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

March 31, 2022

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Rate (30)	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
Cadence Aerospace LLC	(10)	Aerostructure Manufacturing
			Secured Debt	(9) (19)	11/14/2017		9.28% Cash, 0.22% PIK	11/14/2023		20,234		20,147		20,234

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%, Floor 1.00%)	6/4/2026		7,669		7,601		7,630

Career Team Holdings, LLC		Provider of Workforce Training and Career Development Services
			Secured Debt		12/17/2021		12.50%	12/17/2026		2,250		2,183		2,183
			Common Stock		12/17/2021	50,000						500		500
												2,683		2,683
Cenveo Corporation	(11)	Provider of Digital Marketing Agency Services
			Common Stock		9/7/2018	253,194						4,848		3,018

Clarius BIGS, LLC	(10)	Prints & Advertising Film Financing
			Secured Debt	(14) (17) (19)	9/23/2014		15.00% PIK	1/5/2015		2,763		2,419		26

Classic H&G Holdings, LLC		Provider of Engineered Packaging Solutions
			Secured Debt	(9)	3/12/2020		7.00% (L+6.00%, Floor 1.00%)	3/12/2025		1,900		1,888		1,900
			Secured Debt		3/12/2020		8.00%	3/12/2025		4,819		4,725		4,819
			Preferred Member Units	(8)	3/12/2020	39						1,440		4,070
												8,053		10,789
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%, Floor 1.00%)	8/6/2026		19,469		19,118		19,361

Construction Supply Investments, LLC	(10)	Distribution Platform of Specialty Construction Materials to Professional Concrete and Masonry Contractors
			Member Units		12/29/2016	861,618						3,334		15,606

DMA Industries, LLC		Distributor of aftermarket ride control products
			Secured Debt		11/19/2021		12.00%	11/19/2026		5,300		5,201		5,201
			Preferred Equity		11/19/2021	1,486						1,486		1,486
												6,687		6,687

Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

March 31, 2022

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Rate (30)	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
DTE Enterprises, LLC	(10)	Industrial Powertrain Repair and Services
			Secured Debt	(9)	4/13/2018		9.50% (L+8.00%, Floor 1.50%)	4/13/2023		9,369		9,323		8,938
			Class AA Preferred Member Units (non-voting)	(8) (19)	4/13/2018		10.00% PIK					1,077		1,077
			Class A Preferred Member Units	(19)	4/13/2018	776,316	8.00% PIK					776		320
												11,176		10,335
Dynamic Communities, LLC	(10)	Developer of Business Events and Online Community Groups
			Secured Debt	(9)	7/17/2018		9.50% (L+8.50%, Floor 1.00%)	7/17/2023		5,611		5,578		5,262

Emerald Technologies Acquisition Co, Inc.	(11)	Design & Manufacturing
			Secured Debt	(9) (30)	2/10/2022		7.25% (SOFR+6.25%, Floor 1.00%)	2/10/2028		2,500		2,451		2,463

EPIC Y-Grade Services, LP	(11)	NGL Transportation & Storage
			Secured Debt	(9)	6/22/2018		7.00% (L+6.00%, Floor 1.00%)	6/30/2027		6,874		6,801		5,815

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%, Floor 1.00%)	12/22/2026		3,846		3,808		3,808

Flip Electronics LLC	(10)	Distributor of Hard-to-Find and Obsolete Electronic Components
			Secured Debt	(9) (30)	1/4/2021		8.50% (SOFR+7.50%, Floor 1.00%)	1/2/2026		6,873		6,732		6,715

GS Operating, LLC (Gexpro)	(10)	Distributor of Industrial and Specialty Parts
			Secured Debt	(9) (30)	1/3/2022		6.75% (SOFR+6.00%, Floor 0.75%)	1/3/2028		11,261		10,958		11,261

Hawk Ridge Systems, LLC		Value-Added Reseller of Engineering Design and Manufacturing Solutions
			Secured Debt	(9)	12/2/2016		7.00% (L+6.00%, Floor 1.00%)	1/15/2026		646		646		646
			Secured Debt		12/2/2016		8.00%	1/15/2026		7,450		7,392		7,450
			Preferred Member Units	(8)	12/2/2016	56						713		4,140
			Preferred Member Units	(23)	12/2/2016	56						38		220
												8,789		12,456
HDC/HW Intermediate Holdings	(10)	Managed Services and Hosting Provider
			Secured Debt	(9)	12/21/2018		8.50% (L+7.50%, Floor 1.00%)	12/21/2023		1,940		1,925		1,724

Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

March 31, 2022

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Rate (30)	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
Hybrid Promotions, LLC	(10)	Wholesaler of Licensed, Branded and Private Label Apparel
			Secured Debt	(9)	6/30/2021		9.25% (L+8.25%, Floor 1.00%)	6/30/2026		7,875		7,738		7,700

IG Parent Corporation	(11)	Software Engineering
			Secured Debt	(9)	7/30/2021		6.75% (L+5.75%, Floor 1.00%)	7/30/2026		6,711		6,604		6,693

Implus Footcare, LLC	(10)	Provider of Footwear and Related Accessories
			Secured Debt	(9)	6/1/2017		8.75% (L+7.75%, Floor 1.00%)	4/30/2024		17,050		17,038		16,106

Independent Pet Partners Intermediate Holdings, LLC	(10)	Omnichannel Retailer of Specialty Pet Products
			Secured Debt	(19)	12/10/2020		6.00% PIK	11/20/2023		10,740		10,200		10,220
			Preferred Stock (non-voting)	(19)	12/10/2020		6.00% PIK					2,470		3,370
			Preferred Stock (non-voting)		12/10/2020							—		—
			Member Units		11/20/2018	1,191,667						1,192		—
												13,862		13,590
Industrial Services Acquisition, LLC	(10)	Industrial Cleaning Services
			Secured Debt	(9)	8/13/2021		7.75% (L+6.75%, Floor 1.00%)	8/13/2026		18,361		18,008		18,327
			Preferred Member Units	(8) (19) (23)	1/31/2018	336	10.00% PIK					286		388
			Preferred Member Units	(8) (19) (23)	5/17/2019	187	20.00% PIK					196		237
			Member Units	(23)	6/17/2016	2,100						2,100		1,710
												20,590		20,662
Infolinks Media Buyco, LLC	(10)	Exclusive Placement Provider to the Advertising Ecosystem
			Secured Debt	(9)	11/1/2021		7.00% (L+6.00%, Floor 1.00%)	11/1/2026		10,823		10,565		10,565

Interface Security Systems, L.L.C	(10)	Commercial Security & Alarm Services
			Secured Debt	(9)	12/9/2021		11.75% (L+10.00%, Floor 1.75%)	8/7/2023		770		770		770
			Secured Debt	(9) (14) (19)	8/7/2019		9.75% (8.75% Cash, 1.00% PIK) (1.00% PIK + L+7.00%, Floor 1.75%)	8/7/2023		7,334		7,254		3,842
			Common Stock		12/7/2021	2,143						—		—
												8,024		4,612
Intermedia Holdings, Inc.	(11)	Unified Communications as a Service
			Secured Debt	(9)	8/3/2018		7.00% (L+6.00%, Floor 1.00%)	7/19/2025		5,654		5,645		5,616

Invincible Boat Company, LLC.	(10)	Manufacturer of Sport Fishing Boats
			Secured Debt	(9)	8/28/2019		8.00% (L+6.50%, Floor 1.50%)	8/28/2025		17,148		17,017		17,148

INW Manufacturing, LLC	(11)	Manufacturer of Nutrition and Wellness Products
			Secured Debt	(9)	5/19/2021		6.76% (L+5.75%, Floor 0.75%)	3/25/2027		7,266		7,071		7,120

Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

March 31, 2022

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Rate (30)	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		8/2/2021		12.50%	11/15/2026		1,150		1,119		1,119
			Secured Debt		9/1/2021		12.50%	11/15/2026		800		778		778
			Secured Debt		11/15/2021		12.50%	11/15/2026		7,236		7,096		7,096
			Common Stock		8/3/2021	44,944						449		449
												9,442		9,442
Isagenix International, LLC	(11)	Direct Marketer of Health & Wellness Products
			Secured Debt	(9)	6/21/2018		6.75% (L+5.75%, Floor 1.00%)	6/14/2025		5,054		5,028		3,263

Jackmont Hospitality, Inc.	(10)	Franchisee of Casual Dining Restaurants
			Secured Debt	(9)	5/26/2015		8.50% (L+7.50%, Floor 1.00%)	11/4/2024		4,200		4,200		4,200
			Preferred Equity	(8)	11/8/2021	5,653,333						636		628
												4,836		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%, Floor 1.00%)	8/21/2024		3,351		3,323		2,765
			Secured Debt	(19)	11/15/2021		15.00% PIK	11/8/2022		1,435		1,435		1,435
			Common Stock		8/21/2019	392,514						3,678		—
												8,436		4,200
Johnson Downie Opco, LLC		Executive Search Services
			Secured Debt	(9)	12/10/2021		13.00% (L+11.50%, Floor 1.50%)	12/10/2026		1,275		1,247		1,247
			Preferred Equity	(8)	12/10/2021	350						350		350
												1,597		1,597
JorVet Holdings, LLC		Supplier and Distributor of Veterinary Equipment and Supplies
			Secured Debt		3/28/2022		12.00%	3/28/2027		2,850		2,794		2,794
			Common Stock		3/28/2022	11,934						1,193		1,193
												3,987		3,987
JTI Electrical & Mechanical, LLC	(10)	Electrical, Mechanical and Automation Services
			Secured Debt	(9)	12/22/2021		7.00% (L+6.00%, Floor 1.00%)	12/22/2026		3,138		3,066		3,066
			Common Equity		12/22/2021	140,351						140		140
												3,206		3,206
KMS, LLC	(10)	Wholesaler of Closeout and Value-priced Products
			Secured Debt	(9)	10/4/2021		8.25% (L+7.25%, Floor 1.00%)	10/4/2026		9,453		9,232		9,232

Knight Energy Services LLC	(11)	Oil and Gas Equipment & Services
			Secured Debt	(19)	1/9/2015		8.50% PIK	2/9/2024		982		982		698
			Common Stock		11/14/2018	25,692						1,843		—
												2,825		698
Laredo Energy, LLC	(10)	Oil & Gas Exploration & Production
			Member Units		5/4/2020	1,155,952						11,560		10,100

Lightbox Holdings, L.P.	(11)	Provider of Commercial Real Estate Software
			Secured Debt		5/23/2019		5.61% (L+5.00%)	5/9/2026		5,871		5,819		5,783

Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

March 31, 2022

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Rate (30)	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
LL Management, Inc.	(10)	Medical Transportation Service Provider
			Secured Debt	(9)	5/2/2019		8.25% (L+7.25%, Floor 1.00%)	9/25/2023		14,298		14,234		14,298

LLFlex, LLC	(10)	Provider of Metal-Based Laminates
			Secured Debt	(9)	8/16/2021		10.00% (L+9.00%, Floor 1.00%)	8/16/2026		4,975		4,875		4,875

Logix Acquisition Company, LLC	(10)	Competitive Local Exchange Carrier
			Secured Debt	(9)	1/8/2018		6.75% (L+5.75%, Floor 1.00%)	12/22/2024		12,450		12,408		11,683

Mac Lean-Fogg Company	(10)	Manufacturer and Supplier for Auto and Power Markets
			Secured Debt	(9)	4/22/2019		5.88% (L+5.25%, Floor 0.625%)	12/22/2025		7,282		7,249		7,265
			Preferred Stock	(19)	10/1/2019		13.75% (4.50% Cash, 9.25% PIK)					809		809
												8,058		8,074
Mako Steel, LP	(10)	Self-Storage Design & Construction
			Secured Debt	(9)	3/15/2021		8.18% (L+7.25%, Floor 0.75%)	3/13/2026		2,028		1,963		2,005
			Secured Debt	(9)	3/15/2021		8.38 % (L+7.25%, Floor 0.75%)	3/13/2026		17,313		17,031		17,112
												18,994		19,117
MB2 Dental Solutions, LLC	(11)	Dental Partnership Organization
			Secured Debt	(9)	1/28/2021		7.00% (L+6.00%, Floor 1.00%)	1/29/2027		7,956		7,845		7,956
			Secured Debt	(9) (28)	1/28/2021		7.10%	1/29/2027		4,605		4,484		4,605
												12,329		12,561
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%, Floor 1.00%)	10/24/2024		17,781		17,575		17,781

NinjaTrader, LLC	(10)	Operator of Futures Trading Platform
			Secured Debt	(9)	12/18/2019		7.25% (L+6.25%, Floor 1.00%)	12/18/2024		16,875		16,624		16,843

NNE Partners, LLC	(10)	Oil & Gas Exploration & Production
			Secured Debt		3/2/2017		9.42% (L+9.25%)	12/31/2023		21,607		21,600		20,562

NTM Acquisition Corp.	(11)	Provider of B2B Travel Information Content
			Secured Debt	(9) (19)	7/12/2016		8.25% (7.25% Cash, 1.00% PIK) (1.00%PIK + L+6.25%, Floor 1.00%)	6/7/2024		4,203		4,199		4,056

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%, Floor 1.00%)	5/7/2026		22,108		21,661		21,468

OVG Business Services, LLC	(10)	Venue Management Services
			Secured Debt	(9)	11/29/2021		7.25% (L+6.25%, Floor 1.00%)	11/19/2028		17,500		17,333		16,975

Paragon Healthcare, Inc.	(10)	Infusion Therapy Treatment Provider
			Secured Debt	(9) (30)	1/19/2022		6.75% (SOFR+5.75%, Floor 1.00%)	1/19/2027		2,429		2,326		2,326

Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

March 31, 2022

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Rate (30)	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
RA Outdoors LLC	(10)	Software Solutions Provider for Outdoor Activity Management
			Secured Debt	(9)	4/8/2021		7.75% (L+6.75%, Floor 1.00%)	4/8/2026		18,349		18,185		17,210

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%, Floor 1.00%)	12/20/2024		9,871		9,871		9,722

RM Bidder, LLC	(10)	Scripted and Unscripted TV and Digital Programming Provider
			Member Units		11/12/2015	1,854						31		16
			Warrants	(26)	11/12/2015			10/20/2025				284		—
												315		16
Roof Opco, LLC	(10)	Residential Re-Roofing/Repair
			Secured Debt	(9)	8/27/2021		7.00% (L+6.00%, Floor 1.00%)	8/27/2026		5,911		5,740		5,740

Rug Doctor, LLC.	(10)	Carpet Cleaning Products and Machinery
			Secured Debt	(9)	7/16/2021		7.25% (L+6.25%, Floor 1.00%)	11/16/2024		10,100		9,964		9,919

Salient Partners L.P.	(11)	Provider of Asset Management Services
			Secured Debt	(9)	8/31/2018		7.00% (L+6.00%, Floor 1.00%)	10/30/2022		6,251		6,292		4,063
			Secured Debt	(9)	9/30/2021		7.00% (L+6.00%, Floor 1.00%)	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%, Floor 0.75%)	4/26/2028		4,314		4,301		4,293

SIB Holdings, LLC	(10)	Provider of Cost Reduction Services
			Secured Debt	(9)	10/29/2021		7.00% (L+6.00%, Floor 1.00%)	10/29/2026		7,833		7,650		7,664
			Common Equity		10/29/2021	119,048						250		250
												7,900		7,914
Slick Innovations, LLC		Text Message Marketing Platform
			Secured Debt		9/13/2018		13.00%	9/13/2023		1,280		1,183		1,280
			Common Stock		9/13/2018	17,500						175		380
			Warrants	(27)	9/13/2018	4,521		9/13/2028				45		100
												1,403		1,760
South Coast Terminals Holdings, LLC	(10)	Specialty Toll Chemical Manufacturer
			Secured Debt	(9)	12/10/2021		7.25% (L+6.25%, Floor 1.00%)	12/13/2026		3,549		3,475		3,475
			Common Equity		12/10/2021	60,606						61		61
												3,536		3,536
Student Resource Center, LLC	(10)	Higher Education Services
			Secured Debt	(9)	6/25/2021		9.00% (L+8.00%, Floor 1.00%)	6/25/2026		11,764		11,542		10,938

Tex Tech Tennis, LLC	(10)	Sporting Goods & Textiles
			Common Stock	(23)	7/7/2021	1,000,000						1,000		1,130

The Affiliati Network, LLC		Performance Marketing Solutions
			Secured Debt		8/9/2021		7.00%	8/9/2026		270		266		266
			Secured Debt		8/9/2021		11.83%	8/9/2026		3,240		3,175		3,175
			Preferred Stock	(8)	8/9/2021	320,000						1,600		1,750
												5,041		5,191

Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

March 31, 2022

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Rate (30)	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
U.S. TelePacific Corp.	(11)	Provider of Communications and Managed Services
			Secured Debt	(9) (19) (29) (30)	5/17/2017		9.25% (2.00% Cash, 7.25% PIK) (SOFR+1.00%, Floor 1.00%, 7.25% PIK)	5/2/2026		12,500		12,419		8,863

USA DeBusk LLC	(10)	Provider of Industrial Cleaning Services
			Secured Debt	(9)	10/22/2019		6.75% (L+5.75%, Floor 1.00%)	9/8/2026		19,950		19,706		19,950

Vida Capital, Inc	(11)	Alternative Asset Manager
			Secured Debt		10/10/2019		6.33% (L+6.00%)	10/1/2026		6,684		6,617		6,155

Vistar Media, Inc.	(10)	Operator of Digital Out-of-Home Advertising Platform
			Preferred Stock		4/3/2019	70,207						766		2,351

Volusion, LLC		Provider of Online Software-as-a-Service eCommerce Solutions
			Secured Debt	(17)	1/26/2015		11.50%	1/26/2020		7,322		7,322		7,322
			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		—
												14,601		10,067
VORTEQ Coil Finishers, LLC	(10)	Specialty Coating of Aluminum and Light-Gauge Steel
			Secured Debt	(9)	11/30/2021		8.50% (L+7.50%, Floor 1.00%)	11/30/2026		19,111		18,751		18,751
			Common Equity		11/30/2021	769,231						769		769
												19,520		19,520
Wall Street Prep, Inc.	(10)	Financial Training Services
			Secured Debt	(9)	7/19/2021		8.00% (L+7.00%, Floor 1.00%)	7/19/2026		5,431		5,327		5,327
			Common Stock		7/19/2021	500,000						500		500
												5,827		5,827
Watterson Brands, LLC	(10)	Facility Management Services
			Secured Debt	(9)	12/17/2021		7.00% (L+6.00%, Floor 1.00%)	12/17/2026		2,243		2,186		2,186

West Star Aviation Acquisition, LLC	(10)	Aircraft, Aircraft Engine and Engine Parts
			Secured Debt	(9) (30)	3/1/2022		6.75% (SOFR+6.0%, Floor 0.75%)	3/1/2028		3,000		2,934		2,934
			Common Stock		3/1/2022	200,000						200		200
												3,134		3,134
Winter Services LLC	(10)	Provider of Snow Removal and Ice Management Services
			Secured Debt	(9)	11/19/2021		8.00% (L+7.00%, Floor 1.00%)	11/19/2026		14,028		13,691		13,746

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%, Floor 0.75%)	12/17/2026		2,394		2,318		2,318

Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

March 31, 2022

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Rate (30)	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
YS Garments, LLC	(11)	Designer and Provider of Branded Activewear
			Secured Debt	(9)	8/22/2018		6.51%	8/9/2024		6,423		6,394		6,359

Zips Car Wash, LLC	(10)	Express Car Wash Operator
			Secured Debt	(9)	2/11/2022		8.25%(L+7.25%, Floor 1.00%)	3/1/2024		2,419		2,379		2,379

Subtotal Non-Control/Non-Affiliate Investments (129.9% of net assets at fair value)											$	822,092	$	793,666
Total Portfolio Investments, December 31, 2021 (175.7% of net assets at fair value)											$	1,067,904	$	1,081,596

Short-Term Investments (16)
Fidelity Institutional Money Market Funds (21)											$	3,657	$	3,657
US Bank Money Market Account (29)												6,028		6,028
Total Short-Term Investments											$	9,685	$	9,685


(1)	All investments are Lower Middle Market portfolio investments, unless otherwise noted. See Note C 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. Equity and warrants are non-income producing, unless otherwise noted by footnote (8), as described below.
(3)	See Note C 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. 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, SOFR or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate), which typically resets semi-annually, quarterly, or monthly at the borrower’s option. The borrower may also elect to have multiple interest reset periods for each loan. For each such loan, the Company has provided the weighted-average annual stated interest rate in effect at March 31, 2022. As noted in this schedule, 70% of the loans (based on the par amount) contain LIBOR or SOFR floors which range between 0.63% and 2.00%, with a weighted-average floor of approximately 1.03%.
(10)	Private Loan portfolio investment. See Note C for a description of Private Loan portfolio investments.
(11)	Middle Market portfolio investment. See Note C for a description of Middle Market portfolio investments.
(12)	Other Portfolio investment. See Note C 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 sheet.
(17)	Maturity date is under on-going negotiations with the portfolio company and other lenders, if applicable.
(19)	PIK interest income and cumulative dividend income represent income not paid currently in cash.

Table of Contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

March 31, 2022

(dollars in thousands)

(Unaudited)

(20)	All portfolio company headquarters are based in the United States, unless otherwise noted.
(21)	Effective yield as of March 31, 2022 was approximately 0.005% at US Bank Money Market Account and 0.01% at 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)	Warrants are presented in equivalent shares with a strike price of $10.92 per share.
(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)	Delayed draw term loan facility permits the borrower to make an interest rate election on each new tranche of borrowings under the facility. The rate presented represents a weighted-average rate for borrowings under the facility. As of March 31, 2022, borrowings under the loan facility bear interest at L+6.00% (Floor 1.00%) or Prime+5.00%.
(29)	Delayed draw term loan facility permits the borrower to make an interest rate election on each new tranche of borrowings under the facility. The rate presented represents a weighted-average rate for borrowings under the facility. As of March 31, 2022, borrowings under the loan facility bear interest at L+5.50% (Floor 1.00%) or Prime+4.00%.
(30)	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 March 31, 2022, SOFR based contracts in the portfolio had Adjustments ranging from 0.10% to 0.26%.

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	Rate	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%, Floor 2.00%)	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%, Floor 1.00%)	9/1/2026		7,698		7,153		7,121
			Unsecured Debt	(19)	9/1/2021		10.00% PIK	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%, Floor 1.00%)	1/9/2023		2,015		2,005		2,005
			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%, Floor 2.00%)	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%, Floor 1.00%)	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

Table of Contents

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	Rate	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
Clad-Rex Steel, LLC		Specialty Manufacturer of Vinyl-Clad Metal
			Secured Debt	(9)	12/20/2016		10.50% (L+9.50%, Floor 1.00%)	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%, Floor 1.75%)	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
Digital Products Holdings LLC		Designer and Distributor of Consumer Electronics
			Secured Debt	(9)	4/1/2018		11.00% (L+10.00%, Floor 1.00%)	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%, Floor 1.00%)	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%, Floor 1.00%)	10/31/2026		1,600		1,581		1,581
			Secured Debt	(9)	10/29/2021		12.00% (L+11.00%, Floor 1.00%)	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%, Floor 2.00%)	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

Table of Contents

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	Rate	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
Gulf Publishing Holdings, LLC		Energy Industry Focused Media and Publishing
			Secured Debt	(9) (17) (19)	9/29/2017		10.50% (5.25% Cash, 5.25% PIK) (L+9.50%, Floor 1.00%)	9/30/2020		64		64		64
			Secured Debt	(17) (19)	4/29/2016		12.50% (6.25% Cash, 6.25% PIK)	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
			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) (19)	7/28/2017		12.00% PIK	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%, Floor 1.00%)	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%, Floor 1.00%)	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%, Floor 1.00%)	7/31/2026		6,094		5,978		5,978
			Preferred Stock	(8) (23)	7/30/2021	2,500						2,500		2,500
												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

Table of Contents

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	Rate	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
Sonic Systems International, LLC	(10)	Nuclear Power Staffing Services
			Secured Debt	(9)	8/20/2021		8.50% (L+7.50%, Floor 1.00%)	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%, Floor 1.00%)	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

Table of Contents

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	Rate	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
Non-Control/Non-Affiliate Investments (7)
AAC Holdings, Inc.	(11)	Substance Abuse Treatment Service Provider
			Secured Debt	(19)	12/11/2020		18.00% (10.00% Cash, 8.00% PIK)	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%, Floor 1.00%)	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%, Floor 1.00%)	11/19/2026		8,833		8,736		8,736

American Nuts, LLC	(10)	Roaster, Mixer and Packager of Bulk Nuts and Seeds
			Secured Debt	(9)	12/21/2018		9.00% (L+8.00%, Floor 1.00%)	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%, Floor 1.00%)	9/9/2021		2,425		2,375		73
			Secured Debt	(9) (14)	5/19/2016		7.50% (L+6.50%, Floor 1.00%)	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%, Floor 1.00%)	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%, Floor 1.00%)	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%, Floor 1.00%)	4/8/2021		1,200		1,200		625
			Preferred Stock (non-voting)	(19)	12/17/2018		15.00% PIK					41		—
			Member Units		4/8/2016	200,000						200		—
												1,441		625
Berry Aviation, Inc.	(10)	Charter Airline Services
			Secured Debt	(19)	7/6/2018		12.00% (10.50% Cash, 1.50% PIK)	1/6/2024		4,688		4,658		4,688
			Preferred Member Units	(8) (19) (23)	11/12/2019	122,416	16.00% PIK					168		208
			Preferred Member Units	(19) (23)	7/6/2018	1,548,387	8.00% PIK					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%, Floor 1.00%)	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%, Floor 1.50%)	8/28/2025		5,745		5,745		5,724
			Common Stock	(8)	10/1/2020	700,446						—		1,471
												5,745		7,195

Table of Contents

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	Rate	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%, Floor 1.00%)	6/30/2020		13,164		13,164		9,705
			Preferred Member Units	(19)	6/30/2015	4	6.00% PIK					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%, Floor 1.00%)	6/10/2026		310		285		285
			Secured Debt	(9)	6/14/2021		6.00% (L+5.00%, Floor 1.00%)	6/10/2028		13,389		13,168		13,290
												13,453		13,575
Cadence Aerospace LLC	(10)	Aerostructure Manufacturing
			Secured Debt	(9) (19)	11/14/2017		9.28% Cash, 0.22% PIK	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%, Floor 1.00%)	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
			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%, Floor 1.50%)	5/15/2026		2,857		2,817		2,663

Clarius BIGS, LLC	(10)	Prints & Advertising Film Financing
			Secured Debt	(14) (17) (19)	9/23/2014		15.00% PIK	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%, Floor 1.00%)	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

Table of Contents

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	Rate	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
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%, Floor 1.00%)	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%, Floor 1.50%)	4/13/2023		9,369		9,311		8,926
			Class AA Preferred Member Units (non-voting)	(8) (19)	4/13/2018		10.00% PIK					1,051		1,051
			Class A Preferred Member Units	(19)	4/13/2018	776,316	8.00% PIK					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%, Floor 1.00%)	7/17/2023		5,681		5,641		5,570

EPIC Y-Grade Services, LP	(11)	NGL Transportation & Storage
			Secured Debt	(9)	6/22/2018		7.00% (L+6.00%, Floor 1.00%)	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%, Floor 1.00%)	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%, Floor 1.00%)	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%, Floor 1.00%)	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%, Floor 1.50%)	2/24/2025		12,193		11,960		12,193

Table of Contents

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	Rate	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
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%, Floor 1.00%)	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%, Floor 1.00%)	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%, Floor 1.00%)	6/30/2026		7,875		7,730		7,809

IG Parent Corporation	(11)	Software Engineering
			Secured Debt	(9)	7/30/2021		6.75% (L+5.75%, Floor 1.00%)	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%, Floor 1.00%)	4/30/2024		17,093		17,080		16,216

Independent Pet Partners Intermediate Holdings, LLC	(10)	Omnichannel Retailer of Specialty Pet Products
			Secured Debt	(19)	12/10/2020		6.00% PIK	11/20/2023		10,415		9,795		9,815
			Preferred Stock (non-voting)	(19)	12/10/2020		6.00% PIK					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%, Floor 1.00%)	8/13/2026		18,406		18,033		18,033
			Preferred Member Units	(8) (19) (23)	1/31/2018	336	10.00% PIK					281		383
			Preferred Member Units	(8) (19) (23)	5/17/2019	187	20.00% PIK					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%, Floor 1.00%)	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%, Floor 1.75%)	8/7/2023		343		343		343
			Secured Debt	(9) (14) (19)	8/7/2019		9.75% (8.75% Cash, 1.00% PIK) (1.00% PIK + L+7.00%, Floor 1.75%)	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%, Floor 1.00%)	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%, Floor 1.50%)	8/28/2025		17,770		17,624		17,770

Table of Contents

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	Rate	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
INW Manufacturing, LLC	(11)	Manufacturer of Nutrition and Wellness Products
			Secured Debt	(9)	5/19/2021		6.50% (L+5.75%, Floor 0.75%)	3/25/2027		7,359		7,155		7,212

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	(19)	8/3/2021		12.50% PIK	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%, Floor 1.00%)	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%, Floor 1.00%)	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%, Floor 1.00%)	8/21/2024		3,351		3,320		3,039
			Secured Debt	(19)	11/15/2021		15.00% PIK	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%, Floor 1.50%)	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%, Floor 1.00%)	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%, Floor 1.00%)	10/4/2026		9,476		9,242		9,242

Knight Energy Services LLC	(11)	Oil and Gas Equipment & Services
			Secured Debt	(19)	1/9/2015		8.50% PIK	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
			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%, Floor 0.75%)	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%, Floor 1.00%)	9/25/2023		14,332		14,256		14,332

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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	Rate	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
LLFlex, LLC	(10)	Provider of Metal-Based Laminates
			Secured Debt	(9)	8/16/2021		10.00% (L+9.00%, Floor 1.00%)	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%, Floor 1.00%)	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%, Floor 0.625%)	12/22/2025		7,301		7,266		7,301
			Preferred Stock	(19)	10/1/2019		13.75% (4.50% Cash, 9.25% PIK)					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%, Floor 0.75%)	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%, Floor 1.00%)	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%, Floor 1.00%)	10/24/2024		17,781		17,555		17,781

NinjaTrader, LLC	(10)	Operator of Futures Trading Platform
			Secured Debt	(9)	12/18/2019		7.25% (L+6.25%, Floor 1.00%)	12/18/2024		16,875		16,602		16,840

NNE Partners, LLC	(10)	Oil & Gas Exploration & Production
			Secured Debt	(19)	3/2/2017		9.37% (4.87% Cash, 4.50% PIK) (4.50% PIK + L+4.75%)	12/31/2023		21,607		21,599		20,188

NTM Acquisition Corp.	(11)	Provider of B2B Travel Information Content
			Secured Debt	(9) (19)	7/12/2016		8.25% (7.25% Cash, 1.00% PIK) (1.00%PIK + L+6.25%, Floor 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%, Floor 1.00%)	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%, Floor 1.00%)	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%, Floor 1.00%)	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%, Floor 1.00%)	12/20/2024		9,897		9,897		9,787

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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	Rate	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
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%, Floor 1.00%)	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%, Floor 1.00%)	8/27/2026		3,500		3,343		3,343

Rug Doctor, LLC.	(10)	Carpet Cleaning Products and Machinery
			Secured Debt	(9)	7/16/2021		7.25% (L+6.25%, Floor 1.00%)	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%, Floor 1.00%)	10/30/2022		6,251		6,292		4,063
			Secured Debt	(9)	9/30/2021		6.00% (L+5.00%, Floor 1.00%)	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%, Floor 0.75%)	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%, Floor 1.00%)	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%, Floor 1.00%)	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%, Floor 1.00%)	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
			Secured Debt	(9)	5/17/2017		7.00% (L+6.00%, Floor 1.00%)	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%, Floor 1.00%)	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

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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	Rate	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
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%, Floor 1.00%)	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%, Floor 1.00%)	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%, Floor 1.00%)	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%, Floor 1.00%)	11/19/2026		12,847		12,494		12,548

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%, Floor 0.75%)	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%, Floor 1.00%)	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 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.

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2021

(dollars in thousands)

(2)	Debt investments are income producing, unless otherwise noted. Equity and warrants are non-income producing, unless otherwise noted by footnote (8), as described below.
(3)	See Note C 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. 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 or an alternate Base Rate (commonly based on the Federal Funds Rate or the Prime Rate), which typically resets semi-annually, quarterly, or monthly at the borrower’s option. The borrower may also elect to have multiple interest reset periods for each loan. For each such loan, the Company has provided the weighted-average annual stated interest rate in effect at December 31, 2021. 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 approximately 1.04%.
(10)	Private Loan portfolio investment. See Note C for a description of Private Loan portfolio investments.
(11)	Middle Market portfolio investment. See Note C for a description of Middle Market portfolio investments.
(12)	Other Portfolio investment. See Note C 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 sheet.
(17)	Maturity date is under on-going negotiations with the portfolio company and other lenders, if applicable.
(19)	PIK interest income and cumulative dividend income represent income not paid currently in cash.
(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% at US Bank Money Market Account and 0.01% at 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)	Warrants are presented in equivalent shares with a strike price of $10.92 per share.
(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 will 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 includes 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 (as defined in “Note C.2.—Investment Portfolio Composition”) portfolio companies, investments in LMM portfolio companies, investments in Middle Market portfolio companies and Other Portfolio (as defined in “Note C.2.—Investment Portfolio Composition”) investments (see “Note C—Fair Value Hierarchy for Investments—Portfolio Composition” for additional discussion of the Company’s Investment Portfolio and definitions for the defined terms

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Private Loan and Other Portfolio). The Company’s results of operations and cash flows for the three months ended March 31, 2022 and 2021, and financial position as of March 31, 2022 and December 31, 2021, are presented on a consolidated basis. The effects of all 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 months ended March 31, 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 MSC Income Fund and its 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 sheet at fair value, as discussed further in “Note B.1.—Valuation of the Investment Portfolio,” with any adjustments to fair value recognized as “Net Unrealized Appreciation (Depreciation)” on the consolidated statements of operations until the investment is realized, usually upon exit, resulting in any gain or loss being recognized as a “Net Realized Gain (Loss).”

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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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 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 (the “Board”) 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, 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 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

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(“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.

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

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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 12 Private Loan portfolio companies for the three months ended March 31, 2022, representing approximately 26% of the total Private Loan portfolio at fair value as of March 31, 2022, and on a total of 7 Private Loan portfolio companies for the three months ended March 31, 2021, representing approximately 21% of the total Private Loan portfolio at fair value as of March 31, 2021. Excluding its investments in Private Loan portfolio companies that, as of March 31, 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 three months ended March 31, 2022 and 2021 was 35% and 23% of the total Private Loan portfolio at fair value as of March 31, 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 13 LMM portfolio companies for the three months ended March 31, 2022, representing approximately 40% of the total LMM portfolio at fair value as of March 31, 2022 and on a total of 9 LMM portfolio companies for the three months ended March 31, 2021, representing approximately 28% of the total LMM portfolio at fair value as of March 31, 2021. Excluding its investments in LMM portfolio companies that, as of March 31, 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 48% and 30% of the total LMM portfolio at fair value as of March 31, 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 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 (93% as of both March 31, 2022 and December 31, 2021) of the Middle Market portfolio investments are valued using third-party quotes or other independent pricing services, or are new investments that will be consulted on once they have been in the Investment Portfolio for at least twelve months subsequent to the initial investment.

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For valuation purposes, all of the Company’s Other Portfolio investments are non-control investments. The Company’s Other Portfolio investments comprised 2.5% of the Company’s Investment Portfolio at fair value as of both March 31, 2022 and December 31, 2021. 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 LMM portfolio companies. This system takes into account both quantitative and qualitative factors of the LMM portfolio company and the investments held therein.

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 Board 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’s valuation designee. The Company adopted the Valuation Procedures effective April 1, 2021. The Company believes its Investment Portfolio as of March 31, 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.—Valuation of 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 Board, 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.

The COVID-19 pandemic, and the related effect on the U.S. and global economies, has impacted, and threatens to 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 the COVID-19 pandemic, as well as the uncertainty regarding the extent and duration of its impact, the valuation of the Company’s Investment Portfolio has experienced increased volatility since the beginning of the COVID-19 pandemic.

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 March 31, 2022, the Company had investments in short-term money market accounts totaling $9.7 million classified as cash equivalents.

At March 31, 2022, cash balances totaling $28.0 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

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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 all of its debt or other obligations, it 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 or other obligations, or if a loan or debt security is sold or written off, the Company removes it from non-accrual status.

As of March 31, 2022, the Company’s total Investment Portfolio had four investments on non-accrual status, which comprised approximately 0.6% of its fair value and 2.8% of its cost. As of December 31, 2021, the Company’s total Investment Portfolio had four investments on non-accrual status, which comprised approximately 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.—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. For the three months ended March 31, 2022 and 2021, (i) approximately 1.8% and 3.8%, respectively, of the Company’s total investment income was attributable to PIK interest income not paid currently in cash and (ii) approximately 1.8% and 0.7%, respectively, of the Company’s total investment income was attributable to cumulative dividend income not paid currently 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.

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.

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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
	March 31,
	2022		2021

	(dollars in thousands)
Interest, fee and dividend income:
Interest income	$	20,069	$	16,080
Dividend income		2,793		3,952
Fee income		539		240
Total interest, fee and dividend income	$	23,401	$	20,272

5. Deferred Financing Costs

Deferred financing costs represent fees and other direct costs incurred in connection with arranging the Company’s borrowings. These costs were incurred in connection with the Company’s Credit Facilities (see “Note E—Debt”) and have been capitalized and reflected in the consolidated balance sheet as deferred financing costs. Deferred financing costs incurred in connection with the Series A Notes (as defined below in “Note E—Debt”) are recorded as 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.—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 March 31, 2022 and 2021, approximately 2.7% and 2.4%, 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, 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

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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 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 their normal corporate 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 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.

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.

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10. Earnings per Share

Net increase (decrease) 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 during the reporting 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 three months ended March 31, 2022, the effect of which was not material to the consolidated financial statements and the notes thereto. The Company continues to evaluate the impact that the amendments in this update will have on its consolidated financial statements and disclosures.

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.

1. 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 balance sheet 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);

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●

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 March 31, 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 March 31, 2022 and December 31, 2021.

As of March 31, 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 March 31, 2022 and December 31, 2021.

As of March 31, 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 March 31, 2022 and December 31, 2021.

As of March 31, 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 March 31, 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;

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●

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 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 March 31, 2022 and December 31, 2021:


	Fair Value as of
	March 31,
Type of	2022			Significant		Weighted
Investment	(in thousands)		Valuation Technique	Unobservable Inputs	Range(3)	Average(3)		Median(3)
Equity investments	$	207,620	Discounted cash flow	WACC	10.2% - 19.4%	13.8	%	15.4	%
			Market comparable / Enterprise value	EBITDA multiple(1)	3.8x - 9.0x(2)	7.3x		5.8x
Debt investments		756,543	Discounted cash flow	Risk adjusted discount factor	5.3% - 15.4%(2)	9.5	%	8.6	%
				Expected principal recovery percentage	0.9% - 200.0%	99.9	%	100.0	%
Debt investments		117,433	Market approach	Third‑party quote	5.5 - 100	92.5		97.3
Total Level 3 investments	$	1,081,596

(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 3.8x - 15.7x and the range for risk adjusted discount factor is 4.8% - 38.5%.

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


	Fair Value as of
	December 31,
Type of	2021			Significant		Weighted
Investment	(in thousands)		Valuation Technique	Unobservable Inputs	Range(3)	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 - 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.

(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 three-month periods ended March 31, 2022 and 2021 (amounts in thousands):


									Net
	Fair Value		Transfers						Changes		Net				Fair Value
	as of		Into						from		Unrealized				as of
Type of	December 31,		Level 3		Redemptions/		New		Unrealized		Appreciation				March 31,
Investment	2021		Hierarchy		Repayments		Investments		to Realized		(Depreciation)		Other(1)		2022
Debt	$	879,970	$	—	$	(51,189)	$	48,270	$	756	$	(3,022)	$	—	$	874,785
Equity		196,374		—		(30)		2,526		-		7,149		—		206,019
Equity Warrant		792		—		—		-		-		-		—		792
	$	1,077,136	$	—	$	(51,219)	$	50,796	$	756	$	4,127	$	—	$	1,081,596

(1)	Includes the impact of non-cash conversions. These transactions represent non-cash investing activities. See additional cash flow information at the consolidated statements of cash flows.


									Net
	Fair Value		Transfers						Changes		Net				Fair Value
	as of		Into						from		Unrealized				as of
Type of	December 31,		Level 3		Redemptions/		New		Unrealized		Appreciation				March 31,
Investment	2020		Hierarchy		Repayments		Investments		to Realized		(Depreciation)		Other(1)		2021
Debt	$	638,423	$	—	$	(63,307)	$	83,329	$	2,125	$	3,597	$	(290)	$	663,877
Equity(2)		185,041		—		(6,386)		4,421		814		12		290		184,192
Equity Warrant		2,058		—		—		—		—		(395)		—		1,663
	$	825,522	$	—	$	(69,693)	$	87,750	$	2,939	$	3,214	$	—	$	849,732

(1)	Includes the impact of non-cash conversions. These transactions represent non-cash investing activities. See additional cash flow information at 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.”)

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At March 31, 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)
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
At March 31, 2022	Fair Value		(Level 1)		(Level 2)		(Level 3)
Private Loan portfolio investments	$	587,628	$	—	$	—	$	587,628
LMM portfolio investments		322,837		—		—		322,837
Middle Market portfolio investments		144,152		—		—		144,152
Other Portfolio investments		26,979		—		—		26,979
Total investments	$	1,081,596	$	—	$	—	$	1,081,596


			Fair Value Measurements
			(in thousands)
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
At December 31, 2021	Fair Value		(Level 1)		(Level 2)		(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

2. 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 also 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

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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.

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 months ended March 31, 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 March 31, 2022 and December 31, 2021 (this information excludes the Other Portfolio investments which are discussed further below):


	As of March 31, 2022
	Private Loan			LMM (a)			Middle Market

	(dollars in millions)
Number of portfolio companies		62			45			23
Fair value	$	587.6		$	322.8		$	144.2
Cost	$	586.0		$	287.6		$	168.6
Debt investments as a % of portfolio (at cost)		94.1	%		72.3	%		93.1	%
Equity investments as a % of portfolio (at cost)		5.9	%		27.7	%		6.9	%
% of debt investments at cost secured by first priority lien		99.9	%		99.9	%		98.7	%
Weighted-average annual effective yield (b)		8.3	%		11.2	%		8.1	%
Average EBITDA(c)	$	41.3		$	6.2		$	76.0

(a)	At March 31, 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 approximately 9%.

(b)

The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of March 31, 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 March 31, 2022 including debt investments on non-accrual status was 8.2% for its Private Loan portfolio, 10.8% for its LMM portfolio and 7.5% 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, 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.

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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, the Company had equity ownership in all of its LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was approximately 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 three Private Loan portfolio companies, three LMM 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 March 31, 2022 and 2021, the Company achieved an annualized total return on investments of 15.0% and 15.7%, respectively. For the year ended December 31, 2021, the Company achieved an annualized 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 March 31, 2022, the Company had Other Portfolio investments in four companies, collectively totaling approximately $27.0 million in fair value and approximately $25.7 million in cost basis and which comprised approximately 2.5% and 2.4% 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 approximately $26.8 million in fair value and approximately $25.6 million in cost basis and which comprised approximately 2.5% and 2.4% of the Company’s Investment Portfolio at fair value and cost, respectively.

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Middle Market portfolio investments, as of March 31, 2022 and December 31, 2021 (this information excludes the Other Portfolio investments, which are discussed above).


Cost:	March 31, 2022		December 31, 2021
First lien debt	87.6	%	87.2	%
Equity	12.0	%	11.7	%
Second lien debt	—	%	0.7	%
Equity warrants	0.1	%	0.1	%
Other	0.3	%	0.3	%
	100.0	%	100.0	%


Fair Value:	March 31, 2022		December 31, 2021
First lien debt	82.6	%	82.8	%
Equity	17.0	%	16.1	%
Second lien debt	—	%	0.7	%
Equity warrants	0.1	%	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 March 31, 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:	March 31, 2022		December 31, 2021
Southwest	24.2	%	24.8	%
Northeast	22.3	%	21.4	%
West	20.7	%	22.3	%
Southeast	17.3	%	16.6	%
Midwest	14.6	%	14.0	%
Canada	0.9	%	0.9	%
	100.0	%	100.0	%


Fair Value:	March 31, 2022		December 31, 2021
Southwest	26.6	%	27.1	%
Northeast	22.4	%	21.4	%
West	20.0	%	21.4	%
Midwest	15.1	%	14.8	%
Southeast	15.0	%	14.4	%
Canada	0.9	%	0.9	%
	100.0	%	100.0	%

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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 March 31, 2022 and December 31, 2021 (this information excludes the Other Portfolio investments).


Cost:	March 31, 2022		December 31, 2021
Commercial Services & Supplies	11.0	%	11.1	%
Machinery	8.2	%	7.9	%
Internet Software & Services	6.0	%	6.1	%
Diversified Consumer Services	5.2	%	4.4	%
Distributors	4.6	%	4.5	%
IT Services	4.5	%	4.3	%
Oil, Gas & Consumable Fuels	4.0	%	4.2	%
Construction & Engineering	3.8	%	3.8	%
Specialty Retail	3.8	%	3.8	%
Professional Services	3.7	%	3.7	%
Communications Equipment	3.7	%	3.7	%
Health Care Providers & Services	3.4	%	3.5	%
Diversified Telecommunication Services	3.1	%	4.5	%
Aerospace & Defense	3.1	%	2.8	%
Leisure Equipment & Products	3.0	%	3.0	%
Containers & Packaging	2.6	%	2.6	%
Building Products	2.3	%	2.3	%
Diversified Financial Services	2.3	%	2.3	%
Media	2.3	%	2.0	%
Hotels, Restaurants & Leisure	2.1	%	2.1	%
Textiles, Apparel & Luxury Goods	1.9	%	2.0	%
Internet & Catalog Retail	1.6	%	1.6	%
Energy Equipment & Services	1.4	%	1.4	%
Food Products	1.2	%	1.2	%
Electrical Equipment	1.2	%	0.9	%
Health Care Equipment & Supplies	1.2	%	0.8	%
Trading Companies & Distributors	1.1	%	1.1	%
Food & Staples Retailing	1.1	%	1.1	%
Software	1.0	%	1.0	%
Household Products	1.0	%	1.2	%
Other (1)	4.6	%	5.1	%
	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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Fair Value:	March 31, 2022		December 31, 2021
Commercial Services & Supplies	10.4	%	10.6	%
Machinery	9.6	%	9.3	%
Diversified Consumer Services	6.1	%	5.3	%
Internet Software & Services	5.4	%	5.5	%
Distributors	4.7	%	4.6	%
IT Services	4.4	%	4.2	%
Construction & Engineering	4.2	%	4.2	%
Specialty Retail	3.8	%	3.8	%
Oil, Gas & Consumable Fuels	3.5	%	3.7	%
Health Care Providers & Services	3.4	%	3.5	%
Aerospace & Defense	3.1	%	2.7	%
Leisure Equipment & Products	3.0	%	3.1	%
Diversified Telecommunication Services	3.0	%	4.5	%
Containers & Packaging	2.9	%	2.9	%
Professional Services	2.8	%	2.9	%
Media	2.5	%	2.1	%
Diversified Financial Services	2.4	%	2.4	%
Building Products	2.3	%	2.4	%
Communications Equipment	2.0	%	2.1	%
Textiles, Apparel & Luxury Goods	1.9	%	1.9	%
Internet & Catalog Retail	1.8	%	1.7	%
Computers & Peripherals	1.6	%	1.7	%
Construction Materials	1.6	%	1.5	%
Software	1.4	%	1.3	%
Hotels, Restaurants & Leisure	1.4	%	1.4	%
Electrical Equipment	1.3	%	1.0	%
Trading Companies & Distributors	1.1	%	1.2	%
Food & Staples Retailing	1.1	%	1.1	%
Energy Equipment & Services	1.0	%	1.1	%
Food Products	1.0	%	1.1	%
Household Products	0.9	%	1.2	%
Air Freight & Logistics	0.8	%	1.1	%
Other (1)	3.6	%	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 March 31, 2022 and December 31, 2021, the Company had no portfolio investment that was greater than 10% of the Investment Portfolio at fair value.

3. 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 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.2.—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 or 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

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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 March 31, 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 approximately $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”).

For the three months ended March 31, 2021, the Company recognized approximately $0.5 million of interest income in respect of its investment in Signal Peak CLO. The Company sold its entire position in the Signal Peak CLO on December 16, 2021.

NOTE E—DEBT

Summary of debt as of March 31, 2022 is as follows:


		Outstanding Balance		Unamortized Debt Issuance Costs⁽²⁾		Recorded Value		Estimated Fair Value⁽¹⁾

	(dollars in thousands)
JPM SPV Facility		$	264,688	$	—	$	264,688	$	264,688
Series A Notes			150,000		(1,337)		148,663		143,293
TIAA Credit Facility			82,000		—		82,000