MSC Income Fund Annual report [Section 13 and 15(d), not S-K Item 405]


Stockholder Transaction Expenses:
Sales load (as a percentage of offering price)	—%	(1)
Offering expenses (as a percentage of offering price)	—%	(2)
Distribution reinvestment plan expenses	—%	(3)
Total stockholder transaction expenses (as a percentage of offering price)	—%	(4)
Annual Expenses of the Fund (as a percentage of net assets attributable to common stock as of December 31, 2025):
Base management fee	2.67%	(5)
Incentive fee on income	1.64%	(5)
Incentive fee on capital gains	0.37%	(5)
Interest payments on borrowed funds	4.44%	(6)
Other expenses	0.68%	(7)
Income tax expense	0.50%	(8)
Acquired fund fees and expenses	0.07%	(9)
Total annual expenses	10.37%

___________________________

(1)In the event that the securities to which this prospectus relates are sold to or through underwriters, a corresponding prospectus supplement will disclose the applicable sales load (underwriting discount or commission). Purchases of shares of MSC Income’s common stock on the secondary market are not subject to sales charges but may be subject to brokerage commissions or other charges. The table does not include any sales load that stockholders may have paid in connection with their purchase of shares of MSC Income’s common stock.

(2)In the event that MSC Income conducts an offering of its securities, a corresponding prospectus supplement will disclose the estimated amount of offering expenses, the offering price and the offering expenses borne by MSC Income as a percentage of the offering price.

(3)The expenses of administering the DRIP are included in “Other expenses” in the table above.

(4)The related prospectus supplement will disclose the offering price and the total stockholder transaction expenses as a percentage of the offering price.

(5)See Note J — Related Party Transactions in the notes to the consolidated financial statements included in Item 8. Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K for a description of the structure and calculation of the management fees and incentive fees under the Advisory Agreement.

(6)Interest payments on borrowed funds represent MSC Income’s estimated annual interest payments on borrowed funds based on current debt levels as adjusted for projected increases (but not decreases) in debt levels over the next twelve months.

(7)Other expenses in this table represent the estimated expenses of MSC Income for the current fiscal year, excluding any management fees and incentive fees under the Advisory Agreement.

(8)Income tax expense relates to the accrual of (a) deferred tax provision (benefit) primarily related to loss carryforwards, timing differences in net unrealized appreciation or depreciation and other temporary book-tax differences from MSC Income’s portfolio investments held in the Taxable Subsidiaries and (b) excise, federal and state income and other taxes. Deferred taxes are non-cash in nature and may vary significantly from period to period. MSC Income is required to include deferred taxes in calculating our annual expenses even though deferred taxes are not currently payable or receivable. Due to the variable nature of deferred tax expense, which can be a large portion of the income tax expense, and the difficulty in providing an estimate for future periods, this income tax expense estimate is based upon the actual amount of income tax expense for the year ended December 31, 2025.

(9)Acquired fund fees and expenses represent the estimated indirect expense incurred due to investments in other investment companies and private funds.

Sales Load [Percent]

0.00%

Other Transaction Expenses [Abstract]

Other Transaction Expense 1 [Percent]

0.00%

Other Transaction Expense 2 [Percent]

0.00%

Annual Expenses [Table Text Block]


Stockholder Transaction Expenses:
Sales load (as a percentage of offering price)	—%	(1)
Offering expenses (as a percentage of offering price)	—%	(2)
Distribution reinvestment plan expenses	—%	(3)
Total stockholder transaction expenses (as a percentage of offering price)	—%	(4)
Annual Expenses of the Fund (as a percentage of net assets attributable to common stock as of December 31, 2025):
Base management fee	2.67%	(5)
Incentive fee on income	1.64%	(5)
Incentive fee on capital gains	0.37%	(5)
Interest payments on borrowed funds	4.44%	(6)
Other expenses	0.68%	(7)
Income tax expense	0.50%	(8)
Acquired fund fees and expenses	0.07%	(9)
Total annual expenses	10.37%

___________________________

(3)The expenses of administering the DRIP are included in “Other expenses” in the table above.

(4)The related prospectus supplement will disclose the offering price and the total stockholder transaction expenses as a percentage of the offering price.

(7)Other expenses in this table represent the estimated expenses of MSC Income for the current fiscal year, excluding any management fees and incentive fees under the Advisory Agreement.

(9)Acquired fund fees and expenses represent the estimated indirect expense incurred due to investments in other investment companies and private funds.

Management Fees [Percent]

2.67%

Interest Expenses on Borrowings [Percent]

4.44%

Incentive Fees [Percent]

1.64%

Acquired Fund Fees and Expenses [Percent]

0.07%

Other Annual Expenses [Abstract]

Other Annual Expense 1 [Percent]

0.68%

Other Annual Expense 2 [Percent]

0.50%

Total Annual Expenses [Percent]

10.37%

Expense Example [Table Text Block]

The following example demonstrates the projected dollar amount of total cumulative expenses that would be incurred over various periods with respect to a hypothetical investment in our common stock. In calculating the following expense amounts, MSC Income has assumed it would have no additional leverage and that its annual operating expenses would remain at the levels set forth in the table above, except for the incentive fee, which has been modified for the assumed 5% annual return instead of the actual historical returns. Transaction expenses are not included in the following example. In the event that shares to which this prospectus relates are sold to or through underwriters, a corresponding prospectus supplement will restate this example to reflect the applicable sales load.


	1 Year	3 Years	5 Years	10 Years
You would pay the following expenses on a $1,000 investment, assuming a 5.0% annual return (none of which is subject to the capital gains incentive fee)	82	238	384	708
You would pay the following expenses on a $1,000 investment, assuming a 5.0% annual return resulting entirely from realized capital gains (all of which is subject to the capital gains incentive fee)	90	260	415	750

Expense Example, Year 01

$ 82

Expense Example, Years 1 to 3

238

Expense Example, Years 1 to 5

384

Expense Example, Years 1 to 10

$ 708

Purpose of Fee Table , Note [Text Block]

The following table is being provided to update, as of December 31, 2025, certain information in the Fund’s effective shelf registration statement on Form N-2 (File No. 333-288325) filed with the SEC on June 25, 2025. The information is intended to assist you in understanding the costs and expenses that an investor in the Fund will bear directly or indirectly. MSC Income cautions you that some of the percentages indicated in the table below are estimates and may vary. Except where the context suggests otherwise, whenever this Annual Report on Form 10-K contains a reference to fees or expenses paid by “you,” “MSC Income,” or that the “Fund” will pay fees or expenses, stockholders will indirectly bear such fees or expenses as investors in the Fund.

Other Transaction Fees, Note [Text Block]

In the event that MSC Income conducts an offering of its securities, a corresponding prospectus supplement will disclose the estimated amount of offering expenses, the offering price and the offering expenses borne by MSC Income as a percentage of the offering price.

(3)The expenses of administering the DRIP are included in “Other expenses” in the table above.

Other Expenses, Note [Text Block]

Other expenses in this table represent the estimated expenses of MSC Income for the current fiscal year, excluding any management fees and incentive fees under the Advisory Agreement.

Acquired Fund Total Annual Expenses, Note [Text Block]

Acquired fund fees and expenses represent the estimated indirect expense incurred due to investments in other investment companies and private funds.

Financial Highlights [Abstract]

Senior Securities [Table Text Block]

Information about MSC Income’s senior securities as of December 31 for the years indicated in the table, unless otherwise noted, is as follows:


	Total Amount Outstanding Exclusive of Treasury Securities(1)		Asset Coverage per Unit(2)		Involuntary Liquidating Preference per Unit(3)	Average Market Value per Unit(4)
	(in thousands)
Corporate Facility

2016	$	80,000	$	2,448	—	N/A
2017	82,000		2,506		—	N/A
2018	120,000		2,229		—	N/A
2019	105,000		2,369		—	N/A
2020	44,000		2,920		—	N/A
2021	153,000		2,214		—	N/A
2022	98,000		2,290		—	N/A
2023	132,000		2,280		—	N/A
2024	149,000		2,104		—	N/A
2025	209,000		2,225		—	N/A
SPV Facility
2021	$	273,688	$	2,214	—	N/A
2022	223,688		2,290		—	N/A
2023	203,688		2,280		—	N/A
2024	266,688		2,104		—	N/A
2025	244,000		2,225		—	N/A
Series A Notes
2021	$	77,500	$	2,214	—	N/A
2022	150,000		2,290		—	N/A
2023	150,000		2,280		—	N/A
2024	150,000		2,104		—	N/A
2025	150,000		2,225		—	N/A
Deutsche Bank Credit Facility

2016	$	333,000	$	2,448	—	N/A
2017	348,000		2,506		—	N/A
2018	389,000		2,229		—	N/A
2019	340,000		2,369		—	N/A
2020	257,816		2,920		—	N/A

_____________________________

(1)Total amount of each class of senior securities outstanding at the end of the period presented.

(2)Asset coverage per unit is the ratio of the carrying value of MSC Income’s total consolidated assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness.

(3)The amount to which such class of senior security would be entitled upon the involuntary liquidation of the issuer in preference to any security junior to it. The “—” indicates information that the SEC expressly does not require to be disclosed for certain types of senior securities.

(4)Not applicable because the senior securities are not registered for public trading on a stock exchange.

General Description of Registrant [Abstract]

Risk Factors [Table Text Block]

Risk Factors

Investing in MSC Income’s securities involves a number of significant risks. In addition to the other information contained in this Annual Report on Form 10-K, you should consider carefully the following information before making an investment in MSC Income’s securities. The risks set out below are not the only risks MSC Income faces. Additional risks and uncertainties not presently known or not presently deemed material might also impair MSC Income’s operations and performance. If any of the following events occur, MSC Income’s business, financial condition and results of operations could be materially and adversely affected. In such case, MSC Income’s NAV, the trading price of its common stock and the value of its other securities could decline, and you may lose all or part of your investment.

SUMMARY OF RISK FACTORS

The following is a summary of the principal risk factors associated with an investment in MSC Income’s securities. Further details regarding each risk included in the below summary list can be found further below.

Risks Related to MSC Income’s Business and Structure

•Because the Investment Portfolio is recorded at fair value, there is and will continue to be uncertainty as to the value of MSC Income’s portfolio investments.

•MSC Income’s financial condition and results of operations depends on the Adviser’s ability to effectively manage and deploy capital.

•MSC Income is subject to risks associated with the interest rate environment and changes in interest rates will affect its cost of capital, net investment income and the value of its investments.

•MSC Income faces increasing competition for investment opportunities.

•MSC Income is dependent upon the Adviser’s key investment personnel, who are provided by Main Street, for its future success.

•MSC Income’s success depends on Main Street’s ability to attract and retain qualified personnel in a competitive environment.

•MSC Income may not replicate the historical results achieved by Main Street or by other advisory clients of the Adviser.

•MSC Income’s business model depends to a significant extent upon strong referral relationships maintained by Main Street and the Adviser.

Risks Related to MSC Income’s Investments

•The types of portfolio companies in which MSC Income invests involve significant risks and MSC Income could lose all or part of its investment.

•Economic recessions or downturns could impair MSC Income’s portfolio companies’ performance and certain material defaults by such portfolio companies could harm MSC Income’s operating results.

•Rising credit spreads could affect the value of MSC Income’s investments, and rising interest rates make it more difficult for portfolio companies to make periodic payments on their loans.

•Inflation could adversely affect the business, results of operations and financial condition of MSC Income’s portfolio companies.

•Changes to U.S. tariff, trade and economic policies may have a negative effect on MSC Income’s portfolio companies and, in turn, harm MSC Income.

•MSC Income may be exposed to higher risks with respect to its investments that include original issue discount or PIK interest.

•The lack of liquidity in MSC Income’s investments may adversely affect its business.

•MSC Income may not have the funds or ability to make additional investments in its portfolio companies.

•MSC Income generally will not control its portfolio companies.

•Certain material defaults by its portfolio companies could harm MSC Income’s operating results.

•Any unrealized depreciation that MSC Income experiences in the Investment Portfolio may be an indication of future realized losses, which could reduce income and gains available for distribution.

•Prepayments of MSC Income’s debt investments by its portfolio companies could adversely impact its results of operations and reduce its return on equity.

Risks Related to Leverage

•Because MSC Income borrows money, the potential for gain or loss on amounts invested in MSC Income is magnified and may increase the risk of such investment.

•Substantially all of MSC Income’s assets are subject to security interests under its senior securities, and if MSC Income defaults on its obligations under its senior securities, it may suffer adverse consequences, including foreclosure on its assets.

•MSC Income is subject to risks associated with any revolving credit facility that utilizes a Structured Subsidiary as MSC Income’s interests in any Structured Subsidiary are subordinated and MSC Income could be prevented from receiving cash on its equity interests from a Structured Subsidiary.

Risks Related to the Adviser and its Affiliates

•The Adviser has conflicts of interest that may create an incentive for the Adviser to enter into investments that are riskier or more speculative than would otherwise be the case and the Adviser may have an incentive to increase portfolio leverage in order to earn higher management fees.

•MSC Income may be obligated to pay the Adviser incentive compensation even if MSC Income incurs a net loss due to a decline in the value of the Investment Portfolio.

•The Adviser may face conflicts of interest in allocating investment opportunities between MSC Income, Main Street and the other advisory clients of the Adviser.

Risks Related to BDCs

•Operating under the constraints imposed on MSC Income as a BDC and RIC may hinder the achievement of its investment objectives.

Risks Related to MSC Income’s Securities

•Investing in MSC Income’s securities may involve a high degree of risk.

•Shares of closed-end investment companies, including BDCs such as MSC Income, may trade at a discount to their NAV per share.

•The market price of MSC Income’s securities may be volatile and fluctuate significantly.

•MSC Income may not be able to pay distributions to its stockholders, its distributions may not grow over time and a portion of distributions paid to its stockholders may be a return of capital.

Federal Income Tax Risks

•MSC Income will be subject to corporate-level U.S. federal income tax if it is unable to qualify as a RIC under Subchapter M of the Code.

•MSC Income may have difficulty paying the distributions required to maintain RIC tax treatment under the Code if it recognizes income before or without receiving cash representing such income.

General Risk Factors

•Events outside of MSC Income’s control, including public health crises, supply chain disruptions and inflation, could negatively affect MSC Income and its portfolio companies and the results of MSC Income’s operations.

•Market conditions may materially and adversely affect debt and equity capital markets in the U.S. and abroad, which may have a negative impact on MSC Income’s business and operations.

•The failure in cybersecurity systems, as well as the occurrence of events unanticipated in MSC Income’s and the Adviser’s disaster recovery systems and management continuity planning could impair MSC Income’s ability to conduct business effectively.

•MSC Income is highly dependent on information systems and systems failures could significantly disrupt its business, which may, in turn, negatively affect the market price of its common stock and its ability to pay dividends.

•Failure to comply with applicable laws or regulations and changes in laws or regulations governing MSC Income’s operations may adversely affect its business or cause it to alter its business strategy.

•Uncertainty about presidential administration initiatives could negatively impact MSC Income’s business, financial condition and results of operations.

RISKS RELATED TO MSC INCOME’S BUSINESS AND STRUCTURE

Because the Investment Portfolio is recorded at fair value, there is and will continue to be uncertainty as to the value of MSC Income’s portfolio investments.

Under the 1940 Act, MSC Income is required to carry its portfolio investments at market value or, if there is no readily available market value, at fair value as determined by MSC Income pursuant to the Valuation Procedures. Typically, there is not a public market for the securities of the privately held companies in which MSC Income invests through the Private Loan investment strategy and in the LMM investment portfolio. As a result, MSC Income values these securities quarterly at fair value based on inputs from management and a nationally recognized independent financial advisory services firm (on a rotational basis) pursuant to the Valuation Procedures. See Note B.1. — Summary of Significant Accounting Policies — Valuation of the Investment Portfolio in the notes to the consolidated financial statements included in Item 8. Consolidated Financial Statements and Supplementary Data of this Annual Report on Form 10-K for a detailed discussion of the Valuation Procedures.

The determination of fair value and consequently, the amount of unrealized gains and losses in the Investment Portfolio, are to a certain degree, subjective and dependent on the Valuation Procedures. Certain factors that may be considered in determining the fair value of investments include external events, such as private mergers, sales and acquisitions involving comparable companies. Because such valuations, and particularly valuations of securities in privately held companies, are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, determinations of fair value may differ materially from the values that would have been used if a ready market for these securities existed. Due to this uncertainty, fair value determinations may cause MSC Income’s NAV on a given date to materially understate or overstate the value that MSC Income may ultimately realize on one or more of its investments. As a result, investors purchasing MSC Income’s securities based on an overstated NAV would pay a higher price than the value such investments might warrant. Conversely, investors selling MSC Income’s securities during a period in which the NAV understates the value of MSC Income’s investments may receive a lower price for their securities than the value such investments might warrant.

MSC Income’s financial condition and results of operations depends on the Adviser’s ability to effectively manage and deploy capital.

MSC Income’s ability to achieve its investment objective of maximizing its Investment Portfolio’s total return, primarily by generating current income from its debt investments and, to a lesser extent, by generating 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, depends on the Adviser’s ability to effectively manage and deploy capital, which depends, in turn, on the Adviser’s investment team’s ability to identify, evaluate and monitor, and MSC Income’s ability to finance and invest in, companies that meet MSC Income’s investment criteria.

Accomplishing MSC Income’s investment objective on a cost-effective basis is largely a function of the Adviser’s investment team’s handling of the investment process, its ability to provide competent, attentive and efficient services and MSC Income’s access to investments offering acceptable terms. In addition to monitoring the performance of MSC Income’s existing investments, members of the Adviser’s investment team are also called upon, from time to time, to provide managerial assistance to some of MSC Income’s portfolio companies. These demands on their time may distract them or slow the rate of investment.

Even if the Adviser is able to grow and build upon its investment operations, any failure to manage growth effectively could have a material adverse effect on MSC Income’s business, financial condition, results of operations and prospects. The results of operations will depend on many factors, including the availability of opportunities for investment, readily accessible short- and long-term funding alternatives in the financial markets and economic conditions. Furthermore, if the Adviser cannot successfully operate its business or implement MSC Income’s investment policies and strategies as described herein, MSC Income’s ability to pay dividends could be negatively impacted.

MSC Income is subject to risks associated with the interest rate environment and changes in interest rates will affect its cost of capital, net investment income and the value of its investments.

To the extent MSC Income borrows money or issues debt securities or preferred stock to make investments, its net investment income will depend, in part, upon the difference between the rate at which it borrows funds or pays interest or dividends on such debt securities or preferred stock and the rate at which MSC Income invests these funds. In addition, many of MSC Income’s debt investments and borrowings have floating interest rates that reset on a periodic basis, and many of these investments are subject to interest rate floors. As a result, a change in market interest rates could have a material adverse effect on net investment income. In periods of rising interest rates, cost of funds will increase because the interest rates on the amounts borrowed under the Credit Facilities (as defined in the Liquidity and Capital Resources section below) are floating, and any new fixed rate debt may be issued at higher coupon rates, which could reduce net investment income to the extent any debt investments have either fixed interest rates, or in periods when debt investments with floating interest rates are subject to an interest rate floor above then current levels. In periods of declining interest rates, interest income and net investment income could be reduced as the interest income earned on floating rate debt investments declines and any new fixed rate debt may be issued at lower coupon rates. See further discussion and analysis at Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

MSC Income can use interest rate risk management techniques in an effort to limit exposure to interest rate fluctuations. Such techniques could include various interest rate hedging activities to the extent permitted by the 1940 Act and applicable commodities laws. These activities could limit MSC Income’s ability to participate in the benefits of lower interest rates with respect to the hedged borrowings. Adverse developments resulting from changes in interest rates or hedging transactions could have a material adverse effect on MSC Income’s business, financial condition and results of operations.

An increase in the market pricing of the spreads charged over index rates on floating rate investments could lead to a decline in the fair value of the debt securities MSC Income owns, which would adversely affect its NAV. Also, an increase in interest rates available to investors could make an investment in MSC Income’s common stock less attractive if MSC Income is not able to increase its dividends, which could reduce the value of its common stock.

MSC Income faces increasing competition for investment opportunities.

MSC Income competes for investments with other investment funds (including private equity funds, debt funds, mezzanine funds, collateralized loan obligation funds, or CLOs, BDCs and SBICs), as well as traditional financial services companies such as commercial banks and other sources of funding. Many competitors are substantially larger and have considerably greater financial, technical and marketing resources than MSC Income does. For example, some competitors may have a lower cost of capital and access to funding sources that are not available to MSC Income. In addition, some of MSC Income’s competitors may have higher risk tolerances or different risk assessments. These characteristics could allow competitors to consider a wider variety of investments, establish more relationships and offer better pricing and more flexible structuring than MSC Income is able to do. MSC Income may lose investment opportunities if it does not match competitors’ pricing, terms and structure. If MSC Income is forced to match competitors’ pricing, terms and structure, it may not be able to achieve acceptable returns on its investments or may bear substantial risk of capital loss. Furthermore, many of MSC Income’s competitors are not subject to the regulatory restrictions that the 1940 Act imposes on BDCs such as MSC Income.

MSC Income is dependent upon the Adviser’s key investment personnel, who are provided by Main Street, for its future success.

MSC Income depends on the members of the Adviser’s investment team, particularly Dwayne L. Hyzak, David L. Magdol, Jesse E. Morris, Nicholas T. Meserve and the Adviser’s other Managing Directors, for the identification, review, final selection, structuring, closing and monitoring of investments. These individuals have significant investment expertise and relationships that MSC Income relies on to implement its business plan. Although MSC Income’s executive officers and other key personnel have entered into non-compete arrangements with Main Street, MSC Income cannot guarantee that any of these individuals will remain available to it. If MSC Income loses the services of the individuals mentioned above, it may not be able to operate its business as expected, and its ability to compete could be harmed, which could cause operating results to suffer. Main Street and the Adviser have entered into a sharing agreement pursuant to which Main Street provides the Adviser with investment professionals and access to its resources. Because the Adviser does not have any employees, it depends solely on the investment professionals provided to it by Main Street pursuant to the sharing agreement for its infrastructure, business relationships and management expertise in connection with its provision of investment advisory services to MSC Income.

MSC Income’s success depends on Main Street’s ability to attract and retain qualified personnel in a competitive environment.

MSC Income’s success will require that Main Street is able to attract and retain new investment and administrative personnel in a competitive market. Because Main Street provides the Adviser with investment professionals, Main Street’s ability to attract and retain personnel with the requisite credentials, experience and skills depends on several factors including, but not limited to, Main Street’s ability to offer competitive wages, benefits and professional growth opportunities. Many of the entities, including investment funds (such as private equity funds, debt funds and mezzanine funds) and traditional financial services companies, with which the Adviser competes for experienced personnel have greater resources than the Adviser and Main Street.

The competitive environment for qualified personnel may require the Main Street to take certain measures to ensure that it is able to attract and retain experienced personnel. Such measures may include increasing the attractiveness of Main Street’s overall compensation packages, altering the structure of its compensation packages through the use of additional forms of compensation, or other steps. The inability of Main Street to attract and retain experienced personnel would have a material adverse effect on MSC Income’s business.

MSC Income may not replicate the historical results achieved by Main Street or by other advisory clients of the Adviser.

Although MSC Income’s investment strategy partially overlaps with the investment strategy of Main Street, the parent company of the Adviser, MSC Income cannot assure stockholders that it will be able to replicate the historical results achieved by Main Street or other advisory clients of the Adviser. Because of the differences in MSC Income’s business structure, investment strategy and portfolio composition, its investment returns could be substantially lower than the returns achieved by Main Street or other investment advisory clients of the Adviser in prior periods. Additionally, all or a portion of the prior results may have been achieved in particular market conditions that may never be repeated. Moreover, current or future market volatility and regulatory uncertainty may have an adverse impact on MSC Income’s future performance.

MSC Income’s business model depends to a significant extent upon strong referral relationships maintained by Main Street and the Adviser.

MSC Income expects that members of the Adviser’s management team will maintain their relationships with intermediaries, private equity fund sponsors, financial institutions, investment bankers, commercial bankers, financial advisors, attorneys, accountants, consultants and other individuals within MSC Income’s network, and MSC Income will rely to a significant extent upon these relationships to provide it with potential investment opportunities. If the Adviser’s management team fails to maintain its existing relationships or develop new relationships with sources of investment opportunities, MSC Income will not be able to grow the Investment Portfolio. In addition, individuals with whom members of the Adviser’s management team have relationships are not obligated to provide it with investment opportunities, and, therefore, there is no assurance that such relationships will generate investment opportunities for MSC Income.

The Board of Directors may change MSC Income’s investment objective, operating policies, investment criteria and strategies without prior notice or stockholder approval, the effects of which may be adverse.

The Board of Directors has the authority, except as otherwise provided in the 1940 Act, to modify or waive MSC Income’s investment objective, current operating policies, investment criteria and strategies without prior notice and without stockholder approval. However, absent stockholder approval, MSC Income may not change the nature of its business so as to cease to be regulated or withdraw its election as a BDC. MSC Income cannot predict the effect any changes to its investment objective, current operating policies, investment criteria and strategies would have on its business, NAV, operating results and value of its stock. However, the effects might be material and adverse, which could negatively affect MSC Income’s business and impair its ability to pay interest and principal payments to holders of its debt instruments and to make distributions to its stockholders and cause its investors to lose all or part of their investment in MSC Income.

MSC Income is a non-diversified investment company within the meaning of the 1940 Act, and therefore it is not limited with respect to the proportion of its assets that may be invested in securities of a single issuer.

MSC Income is classified as a non-diversified investment company within the meaning of the 1940 Act, which means that it is not limited by the 1940 Act with respect to the proportion of assets that it may invest in securities of a single issuer. Under the 1940 Act, a “diversified” investment company is required to invest at least 75% of the value of its total assets in cash and cash items, government securities, securities of other investment companies and other securities limited in respect of any one issuer to an amount not greater than 5% of the value of the total assets of such company and no more than 10% of the outstanding voting securities of such issuer. As a non-diversified investment company, MSC Income is not subject to this requirement. To the extent that MSC Income assumes large positions in the securities of a small number of issuers, its NAV may fluctuate to a greater extent than that of a diversified investment company as a result of changes in the financial condition or the market’s assessment of the issuer. MSC Income may also be more susceptible to any single economic or regulatory occurrence than a diversified investment company. Beyond its RIC asset diversification requirements and any requirements under its financing arrangements, MSC Income does not have fixed guidelines for diversification, and its investments could be concentrated in relatively few portfolio companies. See Risk Factors — Federal Income Tax Ris ks — MSC Income will be subject to corporate-level U.S. federal income tax if it is unable to qualify as a RIC under Subchapter M of the Code. Although MSC Income has historically operated as a non-diversified investment company within the meaning of the 1940 Act, the Investment Portfolio may, from time to time, be comprised of assets that could permit MSC Income to qualify as a “diversified” investment company under the 1940 Act. To the extent that MSC Income operates as a non-diversified investment company, it may be subject to greater risk.

MSC Income and its portfolio companies may maintain cash balances at financial institutions that exceed federally insured limits and may otherwise be materially affected by adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties.

Cash held by MSC Income and by its portfolio companies in non-interest-bearing and interest-bearing operating accounts may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. If such banking institutions were to fail, MSC Income or its portfolio companies could lose all or a portion of those amounts held in excess of such insurance limitations. In addition, actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems, which could adversely affect MSC Income and its portfolio companies’ business, financial condition, results of operations and prospects.

Although MSC Income assesses its portfolio companies’ banking relationships as it believes necessary or appropriate, MSC Income and its portfolio companies’ access to funding sources and other credit arrangements in amounts adequate to finance or capitalize MSC Income’s respective current and projected future business operations could be significantly impaired by factors that affect MSC Income or its portfolio companies, the financial institutions with which MSC Income or its portfolio companies have arrangements directly or the financial services industry or economy in general. These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets or concerns or negative expectations about the prospects for companies in the financial services industry. These factors could involve financial institutions or financial services industry companies with which MSC Income or its portfolio companies have financial or business relationships, but could also include factors involving financial markets or the financial services industry generally.

In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for MSC Income or its portfolio companies to acquire financing on acceptable terms or at all.

MSC Income is subject to risks related to corporate social responsibility.

MSC Income’s business faces public scrutiny related to environmental, social and governance activities. MSC Income risks damage to its brand and reputation if it or the Adviser fail to act responsibly in a number of areas, such as environmental stewardship, support for local communities, corporate governance and transparency and considering such factors in their investment processes. Adverse incidents with respect to these activities could impact the value of MSC Income’s brand, the cost of its operations and relationships with investors, all of which could adversely affect business and results of operations. Additionally, new regulatory initiatives related to environmental, social and governance matters could adversely affect MSC Income’s business.

MSC Income’s bylaws include an exclusive forum selection provision, which could limit stockholders’ ability to obtain a favorable judicial forum for disputes with MSC Income’s directors, officers or other agents.

MSC Income’s bylaws provide that, unless MSC Income consents in writing to the selection of a different forum, the Circuit Court for Baltimore City, Maryland, or, if that court does not have jurisdiction, the U.S. District Court for the District of Maryland, Baltimore Division, shall be, except for any claims made under the federal U.S. securities laws, the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of MSC Income, (b) any action asserting a claim of breach of any duty owed by a director or officer or other agent of MSC Income to MSC Income or to its stockholders, (c) any action asserting a claim against MSC Income or any director or officer or other agent of MSC Income arising pursuant to any provision of the Maryland General Corporation Law, MSC Income’s articles of amendment and restatement or its bylaws, or (d) any action asserting a claim against MSC Income or any director or officer or other agent of MSC Income that is governed by the internal affairs doctrine. Such provision does not apply to any claims, suits, actions or proceedings arising under the federal securities laws. This provision may increase costs for stockholders in bringing a claim against MSC Income or its directors, officers or other agent. Any person or entity purchasing or otherwise acquiring any interest in shares of MSC Income’s capital will be deemed, to the fullest extent permitted by law, to have notice of and consented to these exclusive forum provisions. The exclusive forum selection provision in the bylaws may limit stockholders’ ability to obtain a favorable judicial forum for disputes with MSC Income or its directors, officers or other agent, which may discourage lawsuits against MSC Income and such persons. It is also possible that, notwithstanding such exclusive forum selection provision, a court could rule that such provision is inapplicable or unenforceable. If this occurred, MSC Income may incur additional costs associated with resolving such action in another forum, which could materially adversely affect MSC Income’s business, financial condition and results of operations.

Waivers, deferrals and reductions of fees and costs can temporarily result in higher returns to investors than they would otherwise receive if full fees and costs were charged.

The Adviser is permitted, in its sole discretion, to waive, defer or reduce, in whole or in part, temporarily or permanently, some of the fees or costs otherwise due from MSC Income to the Adviser under the Advisory Agreement. While this activity can be seen as friendly to investors, waivers, deferrals and reductions of fees and costs result in higher returns to investors than such investors would receive if full fees and costs were charged. Any distributions MSC Income pays to its stockholders from sources other than cash flow from operations or relying on fee waivers, deferrals or reductions, if any, from the Adviser are not based on MSC Income’s investment performance, and can be sustained only if MSC Income achieves positive investment performance in future periods and/or the Adviser continues to waive, defer or reduce such fees or costs, if any. There is no guarantee that any waivers, deferrals or reductions will occur in the future, and any waivers, deferrals and reductions are entirely at the discretion of the Adviser.

RISKS RELATED TO MSC INCOME’S INVESTMENTS

The types of portfolio companies in which MSC Income invests involve significant risks and MSC Income could lose all or part of its investment.

Investing in the types of companies that comprise MSC Income’s portfolio companies exposes it to a number of significant risks. Among other things, these companies:

•may have limited financial resources and may be unable to meet their obligations under their debt instruments that MSC Income holds, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of MSC Income realizing any guarantees from subsidiaries or affiliates of portfolio companies that MSC Income may have obtained in connection with its investment, as well as a corresponding decrease in the value of its investments;

•may have shorter operating histories, narrower product lines, smaller market shares and/or significant customer concentrations than larger businesses, which tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic downturns;

•are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation, termination or significant under-performance of one or more of these persons could have a material adverse impact on the portfolio company and, in turn, on MSC Income;

•generally have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position; and

•generally have less publicly available information about their businesses, operations and financial condition. MSC Income is required to rely on the ability of the Adviser’s management team and investment professionals to obtain adequate information to evaluate the potential returns from investing in these companies. If MSC Income is unable to uncover all material information about these companies, it may not make a fully informed investment decision, and may lose all or part of such investment.

In addition, certain of MSC Income’s officers and directors may serve as directors on the boards of its portfolio companies. To the extent that litigation arises out of MSC Income’s investments in these companies, its officers and directors may be named as defendants in such litigation, which could result in an expenditure of funds (through MSC Income’s indemnification of such officers and directors) and the diversion of management time and resources.

Economic recessions or downturns could impair MSC Income’s portfolio companies’ performance and certain material defaults by such portfolio companies could harm MSC Income’s operating results.

Many of MSC Income’s portfolio companies are susceptible to economic slowdowns or recessions and could be unable to repay MSC Income’s loans during these periods. Therefore, the number of non-performing assets are likely to increase and the value of the Investment Portfolio is likely to decrease during these periods. Adverse economic conditions could decrease the value of collateral securing any of the loans MSC Income makes to its portfolio companies and the value of any equity investments MSC Income makes in its portfolio companies. A severe recession could further decrease the value of such collateral and result in losses of value in the Investment Portfolio and a decrease in revenues, net income, assets and net worth. Economic slowdowns or recessions could lead to financial losses in the Investment Portfolio and a decrease in revenues, net income and assets. Unfavorable economic conditions also could increase MSC Income’s funding costs, limit access to the capital markets or result in a decision by lenders not to extend credit to MSC Income. These events could prevent MSC Income from maintaining or increasing the level of its investments and harm its operating results.

Any deterioration of general economic conditions could lead to significant declines in corporate earnings or loan performance, and the ability of corporate borrowers to service their debt, any of which could trigger a period of global economic slowdown, and have an adverse impact on MSC Income’s performance and financial results, and the value and the liquidity of its investments. In an economic downturn, MSC Income could have non-performing assets or an increase in non-performing assets, and MSC Income anticipates that the value of the Investment Portfolio would decrease during these periods. Failure to satisfy financial or operating covenants imposed by lenders, including MSC Income’s, to a portfolio company could lead to defaults and, potentially, acceleration of payments on such loans and foreclosure on the assets representing collateral for the portfolio company’s obligations. Cross default provisions under other agreements could be triggered and thus limit the portfolio company’s ability to satisfy its obligations under any debt held by MSC Income and affect the value of any securities MSC Income owns. MSC Income expects it would incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a portfolio company following or in anticipation of a default.

Rising credit spreads could affect the value of MSC Income’s investments, and rising interest rates make it more difficult for portfolio companies to make periodic payments on their loans.

Some of MSC Income’s portfolio investments are debt securities that bear interest at variable rates and may be negatively affected by changes in market interest rates. Rising interest rates make it more difficult for borrowers to repay debt, which could increase the risk of payment defaults and cause the portfolio companies to defer or cancel needed investment. Any failure of one or more portfolio companies to repay or refinance its debt at or prior to maturity or the inability of one or more portfolio companies to make ongoing payments following an increase in contractual interest rates could have a material adverse effect on MSC Income’s business, financial condition, results of operations and cash flows. The value of MSC Income’s securities could also be reduced from an increase in market credit spreads as rates available to investors could make an investment in MSC Income’s securities less attractive than alternative investments.

Conversely, decreases in market interest rates could negatively impact the interest income from MSC Income’s variable rate debt investments while the interest it pays on fixed rate debt securities does not change. A decrease in market interest rates may also have an adverse impact on MSC Income’s returns by requiring it to accept lower yields on its debt investments and by increasing the risk that portfolio companies will prepay MSC Income’s debt investments, resulting in the need to redeploy capital at potentially lower rates.

Inflation could adversely affect the business, results of operations and financial condition of MSC Income’s portfolio companies.

Certain of MSC Income’s portfolio companies are in industries that could be impacted by inflation. If such portfolio companies are unable to pass any increases in their costs of operations along to their customers, it could adversely affect their operating results and impact their ability to pay dividends on MSC Income’s equity investments and/or interest and principal on its loans, particularly if interest rates rise in response to inflation. In addition, any projected future decreases in MSC Income’s portfolio companies’ operating results due to inflation could adversely impact the fair value of those investments. Any decreases in the fair value of those investments could result in future realized or unrealized losses and therefore reduce MSC Income’s net increase (decrease) in net assets resulting from operations.

Changes to U.S. tariff, trade and economic policies may have a negative effect on MSC Income’s portfolio companies and, in turn, harm MSC Income.

The U.S. has enacted, and subsequently rescinded and/or temporarily suspended, significant tariffs against certain countries, prompting reciprocal tariffs against the U.S. Additionally, the current U.S. presidential administration and the U.S. Congress have directed various federal agencies to further evaluate other key aspects of U.S. trade and economic policies, including changes to domestic fiscal policies aimed at reducing U.S. federal expenditures, and there has been ongoing discussion and commentary regarding further potential significant changes to such tariff, trade and economic policies. These developments, and the perception that further material changes may occur or continue to occur, have contributed to volatility in global financial markets and may have a material adverse effect on global economic conditions. This may significantly reduce global trade, affect the ability of businesses to procure new or extend existing government contracts and have other negative impacts on U.S. businesses. Any of these factors could depress economic activity and may restrict MSC Income’s portfolio companies’ access to suppliers or customers and have a material adverse effect on their business, financial condition and results of operations, which in turn would negatively impact MSC Income.

MSC Income may be exposed to higher risks with respect to its investments that include original issue discount or PIK interest.

MSC Income’s investments may include original issue discount and contractual PIK interest, which represents contractual interest added to a loan balance and due at the end of such loan’s term. To the extent original issue discount or PIK interest constitute a portion of its income, MSC Income is exposed to typical risks associated with such income being required to be included in taxable and accounting income prior to receipt of cash, including the following:

•original issue discount and PIK instruments may have higher yields, which reflect the payment deferral and credit risk associated with these instruments;

•cash distributions paid to investors representing original issue discount income may be effectively paid from offering proceeds or borrowings during any given period; thus, although the source for the cash used to pay a distribution of original issue discount income may come from the cash invested by investors, or MSC Income’s borrowings, the 1940 Act does not require that investors be given notice of this fact;

•original issue discount and PIK instruments may have unreliable valuations because their continuing accruals require continuing judgments about the collectability of the deferred payments and the value of the collateral; and

•original issue discount and PIK instruments may represent a higher credit risk than coupon loans; even if the conditions for income accrual under U.S. GAAP are satisfied, a borrower could still default when actual payment is due upon the maturity of such loan.

The lack of liquidity in MSC Income’s investments may adversely affect its business.

MSC Income generally invests in companies whose securities are not publicly traded and whose securities will be subject to legal and other restrictions on resale or will otherwise be less liquid than publicly traded securities. The illiquidity of these investments may make it difficult for MSC Income to sell these investments when desired. In addition, if MSC Income is required to liquidate all or a portion of the Investment Portfolio quickly, MSC Income may realize significantly less than the value at which it had previously recorded these investments. As a result, MSC Income does not expect to achieve liquidity in its investments in the near-term. The illiquidity of most of MSC Income’s investments may make it difficult for its to dispose of them at a favorable price and, as a result, MSC Income may suffer losses.

MSC Income may not have the funds or ability to make additional investments in its portfolio companies.

MSC Income may not have the funds or ability to make additional investments in its portfolio companies. After its initial investment in a portfolio company, MSC Income may be called upon from time to time to provide additional funds to such company or have the opportunity to increase its investment through the extension of additional loans, the exercise of a warrant to purchase equity securities, or the funding of additional equity investments. There is no assurance that MSC Income will make, or will have sufficient funds to make, follow-on investments. Any decisions not to make a follow-on investment or any inability to make such an investment may have a negative impact on a portfolio company in need of such an investment, may result in a missed opportunity for MSC Income to increase its participation in a successful operation, may reduce MSC Income’s ability to protect an existing investment or may reduce the expected yield on the investment.

MSC Income generally will not control its portfolio companies.

MSC Income does not, and does not expect to, control the decision making in many of its portfolio companies, even though it may have board representation or board observation rights, and its debt agreements may contain certain restrictive covenants. As a result, MSC Income is subject to the risk that a portfolio company in which it invests will make business decisions with which MSC Income disagrees and the management of such company will take risks or otherwise act in ways that do not serve MSC Income’s interests as debt investors or minority equity holders. Due to the lack of liquidity for MSC Income’s investments in non-traded companies, MSC Income may not be able to dispose of interests in its portfolio companies as readily as it would like or at an appropriate valuation. As a result, a portfolio company may make decisions that would decrease the value of Investment Portfolio holdings.

Certain material defaults by its portfolio companies could harm MSC Income’s operating results.

A portfolio company’s failure to satisfy financial or operating covenants imposed by MSC Income or other lenders could lead to non-payment of interest and other defaults and, potentially, termination of its loans and foreclosure on its secured assets, which could trigger cross-defaults under other agreements and jeopardize a portfolio company’s ability to meet its obligations under the debt or equity securities that MSC Income holds. MSC Income may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms, which may include the waiver of certain financial covenants, with a defaulting portfolio company.

Any unrealized depreciation that MSC Income experiences in the Investment Portfolio may be an indication of future realized losses, which could reduce income and gains available for distribution.

As a BDC, MSC Income is required to carry its investments at market value or, if no market value is ascertainable, at the fair value as determined in accordance with the Valuation Procedures. Decreases in the market values or fair values of investments will be recorded as unrealized depreciation. Any unrealized depreciation in the Investment Portfolio could be an indication of a portfolio company’s inability to meet its repayment obligations to MSC Income with respect to affected loans or a potential impairment of the value of affected equity investments. This could result in realized losses in the future and ultimately in reductions of MSC Income’s income and gains available for distribution in future periods.

Prepayments of MSC Income’s debt investments by its portfolio companies could adversely impact its results of operations and reduce its return on equity.

MSC Income is subject to the risk that the investments in its portfolio companies may be repaid prior to maturity. When this occurs, MSC Income will generally repay debt under the Credit Facilities or reinvest proceeds in temporary investments, pending their future investment in new portfolio companies. These temporary investments will typically have substantially lower yields than the debt being prepaid and MSC Income could experience significant delays in reinvesting these amounts. Any future investment in a new portfolio company may also be at lower yields than the debt that was repaid. As a result, MSC Income’s results of operations could be materially adversely affected if one or more of its portfolio companies elect to prepay amounts owed to MSC Income. Additionally, prepayments could negatively impact return on equity, which could result in a decline in the market price of MSC Income’s securities.

There may be circumstances where MSC Income’s debt investments could be subordinated to claims of other creditors or it could be subject to lender liability claims.

MSC Income’s portfolio companies may have, or may be permitted to incur, other debt that ranks equally with, or senior to, the debt in which MSC Income invests. By their terms, such debt instruments may entitle the holders to receive payment of interest or principal on or before the dates on which MSC Income is entitled to receive payments with respect to the debt instruments in which MSC Income invests. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company, holders of debt instruments ranking senior to MSC Income’s investment in that portfolio company would typically be entitled to receive payment in full before MSC Income receives any distribution. After repaying such senior creditors, such portfolio company may not have any remaining assets to use for repaying its obligation to MSC Income. In the case of debt ranking equally with debt instruments in which MSC Income invests, MSC Income would have to share on an equal basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.

Even if MSC Income’s investment is structured as a senior-secured loan, principles of equitable subordination, as defined by existing case law, could lead a bankruptcy court to subordinate all or a portion of MSC Income’s claim to that of other creditors and transfer any lien securing such subordinated claim to the bankruptcy estate. The principles of equitable subordination defined by case law have generally indicated that a claim may be subordinated only if its holder is guilty of misconduct or where the senior loan is re-characterized as an equity investment and the senior lender has actually provided significant managerial assistance to the bankrupt debtor. MSC Income may also be subject to lender liability claims for actions taken by MSC Income with respect to a borrower’s business or instances where MSC Income exercises control over the borrower. It is possible that MSC Income could become subject to a lender liability claim, including as a result of actions taken in rendering significant managerial assistance or actions to compel and collect payments from the borrower outside the ordinary course of business.

MSC Income may not realize gains from its equity investments.

Certain investments that MSC Income has made in the past and may make in the future include warrants or other equity securities. Investments in equity securities involve a number of significant risks, including the risk of further dilution as a result of additional issuances, inability to access additional capital and failure to pay current distributions. Investments in preferred securities involve special risks, such as the risk of deferred distributions, credit risk, illiquidity and limited voting rights. In addition, MSC Income may from time to time make non-control equity investments in portfolio companies. MSC Income’s goal is ultimately to realize gains upon its disposition of such equity interests. However, these equity interests may not appreciate in value and, in fact, may decline in value. Accordingly, MSC Income may not be able to realize gains from its equity interests, and any gains not realized on the disposition of any equity interests may not be sufficient to offset any other losses MSC Income experiences. MSC Income also may be unable to realize any value if a portfolio company does not have a liquidity event, such as a sale of the business, recapitalization or public offering, which would allow MSC Income to sell the underlying equity interests. MSC Income often seeks put or similar rights to give it the right to sell equity securities back to the portfolio company issuer; however, MSC Income may be unable to exercise these put rights for the consideration provided in investment documents if the issuer is in financial distress.

MSC Income may be subject to risks associated with “covenant-lite” loans.

Some of the loans in which MSC Income invests may be “covenant-lite” loans, which means the loans contain fewer maintenance covenants than other loans (in some cases, none) and do not include terms which allow the lender to monitor the performance of the borrower and declare a default if certain criteria are breached. Generally, “covenant-lite” loans provide borrower companies more freedom to negatively impact lenders because their covenants are incurrence-based, which means they are only tested and can only be breached following an affirmative action of the borrower, rather than by a deterioration in the borrower’s financial condition. To the extent MSC Income invests in covenant-lite loans, it may have fewer rights against a borrower and may have a greater risk of loss on such investments as compared to investments in loans with finance maintenance covenants.

MSC Income’s investments in foreign securities may involve significant risks in addition to the risks inherent in U.S. investments.

MSC Income’s investment strategy contemplates potential investments in debt securities of foreign companies. Investing in foreign companies may expose MSC Income to additional risks not typically associated with investing in securities of U.S. companies. These risks include changes in exchange control regulations, political and social instability, expropriation, imposition of foreign taxes, less liquid markets and less available information than is generally the case in the U.S., higher transaction costs, less government supervision of exchanges, brokers and issuers, less developed bankruptcy laws, difficulty in enforcing contractual obligations, lack of uniform accounting and auditing standards and greater price volatility.

Although most of MSC Income’s investments will be U.S. dollar denominated, any investments denominated in a foreign currency will be subject to the risk that the value of a particular currency will change in relation to one or more other currencies. Among the factors that may affect currency values are trade balances, the level of short-term interest rates, differences in relative values of similar assets in different currencies, long-term opportunities for investment and capital appreciation and political developments.

RISKS RELATED TO LEVERAGE

Because MSC Income borrows money, the potential for gain or loss on amounts invested in MSC Income is magnified and may increase the risk of such investment.

Borrowings, also known as leverage, magnify the potential for loss on investments in MSC Income’s indebtedness and gain or loss on investments in its equity capital. As MSC Income uses leverage to partially finance its investments, you will experience increased risks of investing in its securities. Accordingly, any event that adversely affects the value of an investment would be magnified to the extent MSC Income uses leverage. Such events could result in a substantial loss to MSC Income, which would be greater than if leverage had not been used. In addition, MSC Income’s investment objectives are dependent on the continued availability of leverage at attractive relative interest rates.

MSC Income may also borrow from banks and other lenders and may issue debt securities or enter into other types of borrowing arrangements in the future. Lenders of these senior securities will have fixed dollar claims on MSC Income’s assets that are superior to the claims of common stockholders, and MSC Income would expect such lenders to seek recovery against its assets in the event of a default. MSC Income has the ability to pledge up to 100% of its assets and can grant a security interest in all of its assets under the terms of any debt instruments it could enter into with lenders. The terms of MSC Income’s existing indebtedness require it to comply with certain financial and operational covenants, and MSC Income expects similar covenants in future debt instruments. Failure to comply with such covenants could result in a default under the applicable credit facility or debt instrument if MSC Income is unable to obtain a waiver from the applicable lender or holder, and such lender or holder could accelerate repayment under such indebtedness and negatively affect MSC Income’s business, financial condition, results of operations and cash flows. In addition, under the terms of any credit facility or other debt instrument entered into, in the event of a default, MSC Income is likely to be required by the terms of such facility or instrument to use the net proceeds of any investments that it sells to repay a portion of the amount borrowed under such facility or instrument before applying such net proceeds to any other uses. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Capital Resources for a discussion regarding MSC Income’s outstanding indebtedness.

If the value of MSC Income assets decreases, leveraging would cause NAV to decline more sharply than it otherwise would have had it not leveraged its business. Similarly, any decrease in MSC Income’s income would cause net investment income to decline more sharply than it would have had MSC Income not leveraged its business. Such a decline could negatively affect MSC Income’s ability to pay common stock dividends, scheduled debt payments or other payments related to its securities.

Illustration: The following table illustrates the effect of leverage on returns from an investment in MSC Income’s common stock assuming various annual returns, net of expenses. The calculations in the table below are hypothetical and actual returns may be higher or lower than those appearing below.


	Assumed Return on the Investment Portfolio (net of expenses)
	(10.0)%	(5.0)%	0.0%	5.0%	10.0%
Corresponding Net Return to Common Stockholder (1)(2)	(23.3)%	(14.0)%	(4.6)%	4.7%	14.1%

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(1)Assumes, as of December 31, 2025, $1,381.0 million in total assets, $603.0 million in debt outstanding, $738.7 million in net assets and a weighted-average interest rate of 5.7%. Actual interest payments may be different.

(2)In order for MSC Income to cover its annual interest payments on indebtedness, MSC Income must achieve annual returns on its December 31, 2025 total assets of at least 2.5%.

MSC Income’s ability to achieve its investment objective may depend in part on its ability to access additional leverage on favorable terms and there can be no assurance that such additional leverage can in fact be achieved. If MSC Income is unable to obtain leverage or if the interest rates of such leverage are not attractive, MSC Income could experience diminished returns. The number of leverage providers and the total amount of financing available could decrease or remain static.

Substantially all of MSC Income’s assets are subject to security interests under its senior securities, and if MSC Income defaults on its obligations under its senior securities, it may suffer adverse consequences, including foreclosure on its assets.

Substantially all of MSC Income’s assets are currently pledged as collateral under secured debt obligations. If MSC Income defaults on its obligations under secured debt obligations, its lenders may have the right to foreclose upon and sell, or otherwise transfer, the collateral subject to their security interests or their superior claim. In such event, MSC Income may be forced to sell its investments to raise funds to repay outstanding borrowings in order to avoid foreclosure and these forced sales may be at times and at prices MSC Income would not consider advantageous. Moreover, such deleveraging of the company could significantly impair MSC Income’s ability to effectively operate its business in the manner in which it has historically operated. As a result, MSC Income could be forced to curtail or cease new investment activities and lower or eliminate the dividends that MSC Income has historically paid to its stockholders. In addition, if the lenders exercise their right to sell the assets pledged under the secured debt obligations, such sales may be completed at distressed sale prices, thereby diminishing or potentially eliminating the amount of cash available to MSC Income after repayment of the amounts of outstanding borrowings.

If MSC Income’s operating performance declines and it is not able to generate sufficient cash flow to service debt obligations, MSC Income may in the future need to refinance or restructure its debt, sell assets, reduce or delay capital investments, seek to raise additional capital or seek to obtain waivers from the required lenders under such debt obligations to avoid being in default. If it is unable to implement one or more of these alternatives, MSC Income may not be able to meet its payment obligations under its debt obligations. If MSC Income’s breaches its covenants under its debt obligations and seeks a waiver, MSC Income may not be able to obtain a waiver from the required lenders or debt holders. If this occurs, MSC Income would be in default under its debt obligations, the lenders or debt holders could exercise their rights as described above, and MSC Income could be forced into bankruptcy or liquidation. If MSC Income is unable to repay debt, lenders having secured obligations could proceed against the collateral securing the debt. Because certain of MSC Income’s debt obligations have customary cross-default provisions, if the indebtedness under its debt obligations is accelerated, MSC Income may be unable to repay or finance the amounts due.

MSC Income is subject to risks associated with any revolving credit facility that utilizes a Structured Subsidiary as MSC Income’s interests in any Structured Subsidiary are subordinated and MSC Income could be prevented from receiving cash on its equity interests from a Structured Subsidiary.

MSC Income owns directly or indirectly 100% of the equity interests in MSIF Funding, LLC (“MSIF Funding”), a special purpose Structured Subsidiary utilized in the SPV Facility (as defined below). MSC Income consolidates the financial statements of MSIF Funding in its consolidated financial statements and treats the indebtedness under the SPV Facility as its leverage. MSC Income’s interest in MSIF Funding is subordinated in priority of payment to every other obligation of MSIF Funding and is subject to certain payment restrictions set forth in the SPV Facility.

MSC Income receives cash from MSIF Funding only to the extent that MSC Income receives distributions on its equity interests therein. MSIF Funding can make distributions on its equity interests only to the extent permitted by the payment priority provisions of the SPV Facility. The SPV Facility generally provides that payments on the respective interests cannot be made on any payment date unless all amounts owing to the lenders and other secured parties are paid in full. In addition, if MSIF Funding does not meet the leverage and borrowing base limitations, covenants, reporting and other requirements set forth in the credit agreement governing the SPV Facility, a default could occur. In the event of a default under the SPV Facility credit agreement, cash could be diverted from MSC Income to pay the applicable lenders and other secured parties. In the event that MSC Income fails to receive cash from MSIF Funding, MSC Income could be unable to make distributions to its stockholders in amounts sufficient to maintain its status as a RIC, or at all. MSC Income also could be forced to sell investments in portfolio companies at less than their fair value in order to continue making such distributions. MSC Income cannot assure you that distributions on the assets held by MSIF Funding will be sufficient to make any distributions or that such distributions will meet MSC Income’s expectations.

MSC Income’s equity interest in MSIF Funding ranks behind all of the secured and unsecured creditors, known or unknown, including the lenders in the SPV Facility. Consequently, to the extent that the value of MSIF Funding’s portfolio of loan investments has been reduced as a result of conditions in the credit markets, defaulted loans, capital gains and losses on the underlying assets, prepayment or changes in interest rates, the returns on MSC Income’s investments in MSIF Funding could be reduced. Accordingly, MSC Income’s investments in MSIF Funding could be subject to up to 100% loss.

The ability to sell investments held by a Structured Subsidiary is limited.

The credit agreement governing the SPV Facility places significant restrictions on MSC Income’s ability, as servicer, to sell investments. As a result, there could be times or circumstances during which MSC Income is unable to sell investments or take other actions that might be in its best interests.

MSC Income may invest in derivatives or other assets that expose it to certain risks, including market risk, liquidity risk and other risks similar to those associated with the use of leverage.

MSC Income may invest in derivatives and other assets that are subject to many of the same types of risks related to the use of leverage. Derivative transactions, if any, will generally create leverage for MSC Income and involve significant risks. The primary risks related to derivative transactions include counterparty, correlation, liquidity, leverage, volatility, over-the-counter trading, operational and legal risks. In addition, a small investment in derivatives could have a large potential impact on MSC Income’s performance, effecting a form of investment leverage on the Investment Portfolio. In certain types of derivative transactions, MSC Income could lose the entire amount of its investment; in other types of derivative transactions the potential loss is theoretically unlimited.

Under SEC Rule 18f-4 under the 1940 Act (“Rule 18f-4”), related to use of derivatives, short sales, reverse repurchase agreements and certain other transactions by BDCs, MSC Income is permitted to enter into derivatives and other transactions that create future payment or delivery obligations, including short sales, notwithstanding the senior security provision of the 1940 Act if MSC Income complies with certain value-at-risk leverage limits, adopt a derivatives risk management program and implement board oversight and reporting requirements or otherwise comply with a “limited derivatives users” exception. Rule 18f-4 also permits MSC Income to enter into reverse repurchase agreements or similar financing transactions notwithstanding the senior security provision of the 1940 Act if MSC Income aggregates the amount of indebtedness associated with such reverse repurchase agreements or similar financing transactions with the aggregate amount of any other senior securities representing indebtedness when calculating the asset coverage ratios as discussed herein. In addition, MSC Income is permitted to invest in a security on a when-issued or forward-settling basis, or with a non-standard settlement cycle, and the transaction will be deemed not to involve a senior security under the 1940 Act, provided that (i) MSC Income intends to physically settle the transaction and (ii) the transaction will settle within 35 days of its trade date (the “Delayed-Settlement Securities Provision”). MSC Income may otherwise engage in such transaction as a “derivatives transaction” for purposes of compliance with the rule. Furthermore, MSC Income is permitted to enter into an unfunded commitment agreement, and such unfunded commitment agreement will not be subject to the asset coverage requirements under the 1940 Act if MSC Income reasonably believes, at the time MSC Income enters into such agreement, that it will have sufficient cash and cash equivalents to meet its obligations with respect to all such agreements as they come due. MSC Income cannot predict the effects of these requirements.

MSC Income has adopted updated policies and procedures in compliance with Rule 18f-4. MSC Income expects to qualify as a “limited derivatives user.” Future legislation or rules may modify how MSC Income treats derivatives and other financial arrangements for purposes of its compliance with the leverage limitations of the 1940 Act, which may be materially adverse to MSC Income and its investors.

RISKS RELATED TO THE ADVISER AND ITS AFFILIATES

The Adviser has conflicts of interest that may create an incentive for the Adviser to enter into investments that are riskier or more speculative than would otherwise be the case and the Adviser may have an incentive to increase portfolio leverage in order to earn higher management fees.

The Adviser and its affiliates, including MSC Income’s officers, may have conflicts of interest as a result of compensation arrangements, time constraints and competition for investments, which they will attempt to resolve in a fair and equitable manner, but which may result in actions that are not in the best interests of MSC Income’s stockholders. The Adviser receives substantial fees from MSC Income in return for its services and these fees could influence the investment and other decisions the Adviser makes on MSC Income’s behalf. Among other matters, the compensation arrangements could affect the Adviser’s judgment with respect to public offerings of equity by MSC Income, which may allow it to earn increased management fees.

The incentive fee payable by MSC Income to the Adviser may create an incentive for the Adviser to make investments on MSC Income’s behalf that are risky or more speculative than would be the case in the absence of such compensation arrangement. The way in which the incentive fee payable to the Adviser is determined may encourage it to use leverage to increase the return on its investments in MSC Income. As additional leverage would magnify positive returns, if any, on the Investment Portfolio, MSC Income’s incentive fee would become payable to the Adviser (i.e., exceed the hurdle rate) at a lower average gross return on the Investment Portfolio. Additionally, the incentive fee payable by MSC Income to the Adviser may create an incentive for the Adviser to cause MSC Income to realize capital gains or losses that may not be in the best interests of MSC Income or its stockholders. Under the incentive fee structure, the Adviser benefits when MSC Income recognizes capital gains and, because the Adviser determines when an investment is sold, the Adviser can influence the timing of the recognition of such capital gains.

In addition, the fact that the management fee is payable based upon MSC Income’s total assets, which includes any investments funded through increased borrowings, may encourage the Adviser to use leverage to make additional investments. Under certain circumstances, the use of leverage (or an investment in companies that are highly leveraged) may increase the likelihood of default, which could result in higher investment losses.

MSC Income may be obligated to pay the Adviser incentive compensation even if MSC Income incurs a net loss due to a decline in the value of the Investment Portfolio.

The Advisory Agreement entitles the Adviser to receive incentive compensation on income regardless of any capital losses. In such case, MSC Income may be required to pay the Adviser incentive compensation for a fiscal quarter even if there is a decline in the value of the Investment Portfolio or if MSC Income incurs a net loss for that quarter.

Any incentive fee payable that relates to MSC Income’s net investment income may be computed and paid on income that may include interest that has been accrued but not yet received. If a portfolio company defaults on a loan that is structured to provide accrued interest, it is possible that accrued interest previously included in the calculation of the incentive fee will become uncollectible. Pursuant to the Advisory Agreement, the Adviser will not be under any obligation to reimburse MSC Income for any part of the incentive fee it received that was based on accrued income that MSC Income never received in cash as a result of a default by a portfolio company on the obligation that resulted in the accrual of such income and such circumstances would result in MSC Income paying an incentive fee on income it never received in cash.

The Adviser may face conflicts of interest in allocating investment opportunities between MSC Income, Main Street and the other advisory clients of the Adviser.

The investment professionals utilized by the Adviser to invest in and manage the Investment Portfolio are also the investment professionals responsible for investing in and managing Main Street’s investment portfolio as well as the investment portfolios of other advisory clients of the Adviser. These professionals are responsible for allocating investment opportunities between MSC Income, Main Street and other advisory clients of the Adviser. MSC Income has made co-investments with, and in the future intends to continue to make co-investments with, Main Street and other advisory clients of the Adviser in accordance with the conditions of an exemptive relief order from the SEC permitting such co-investments in certain transactions where co-investing would otherwise be prohibited under the 1940 Act. As a consequence, it may be more difficult for MSC Income to maintain or increase the size of the Investment Portfolio in the future. Although Main Street and the Adviser will endeavor to allocate investment opportunities in a fair and equitable manner, including in accordance with the conditions set forth in the order issued by the SEC when relying on such order, Main Street and the Adviser may face conflicts in allocating investment opportunities between Main Street, MSC Income and other advisory clients of the Adviser. Because the Adviser is wholly-owned by Main Street and is not managing MSC Income’s investment activities as its sole activity, this may provide the Adviser an incentive to allocate opportunities to Main Street or its other advisory clients instead of MSC Income. MSC Income, the Adviser and Main Street have adopted policies and procedures pursuant to the order to manage this conflict and ensure that investment opportunities are allocated in a manner that is fair and equitable considering each investor’s interests, including oversight of the co-investment program by the independent members of MSC Income’s and Main Street’s boards of directors and their required approval of certain co-investment transactions thereunder, to ensure the equitable distribution of investment opportunities and, as a result, MSC Income may be unable to participate in certain investments based upon such allocation policy.

Main Street owns approximately 3.5% of MSC Income’s common stock, which could result in Main Street’s influence over the outcome of matters submitted to the vote of MSC Income’s stockholders.

Main Street owns approximately 3.5% of MSC Income’s outstanding common stock and may acquire additional shares in the future. As a result, Main Street may have influence over the outcome of matters submitted to a vote of MSC Income’s stockholders, including the election of directors or transactions involving a change in control. Main Street’s interests may conflict with, or differ from, the interests of MSC Income’s other stockholders. So long as Main Street continues to own shares of MSC Income’s common stock, it could influence corporate decisions submitted to stockholders for approval, regardless of whether MSC Income terminates the Advisory Agreement with the Adviser.

The Adviser’s liability is limited under the Advisory Agreement, and MSC Income has agreed to indemnify the Adviser against certain liabilities, which may lead the Adviser to act in a riskier manner on MSC Income’s behalf than it would when acting for its own account.

Under the Advisory Agreement, the Adviser and its officers, directors, managers, partners, shareholders, members (and their shareholders or members, including the owners of their shareholders or members), agents, employees, controlling persons and any other person or entity affiliated with or acting on behalf of the Adviser are not liable to MSC Income for acts or omissions performed by the Adviser in accordance with and pursuant to the Advisory Agreement, except those resulting from acts constituting fraud, willful misfeasance, bad faith or gross negligence in the performance of the Adviser’s duties or by reason of the reckless disregard of the Adviser’s duties and obligations under the Advisory Agreement. In addition, MSC Income has agreed to indemnify the Adviser and its officers, directors, managers, partners, shareholders, members (and their shareholders or members, including the owners of their shareholders or members), agents, employees, controlling persons and any other person or entity affiliated with or acting on behalf of the Adviser from and against any claims or liabilities, including reasonable legal fees, arising out of or in connection with any action taken or omitted on MSC Income’s behalf pursuant to authority granted by the Advisory Agreement, except where attributable to fraud, willful misfeasance, bad faith or gross negligence in the performance of the Adviser’s duties or by reason of the reckless disregard of the Adviser’s duties and obligations under the Advisory Agreement. These protections may lead the Adviser to act in a riskier manner when acting on MSC Income’s behalf than it would when acting for its own account.

The Adviser can resign on 120 days’ notice and MSC Income may not be able to find a suitable replacement within that time, resulting in a disruption in operations that could adversely affect MSC Income’s financial condition, business and results of operations.

The Adviser has the right, under the Advisory Agreement, to resign at any time upon not less than 120 days’ written notice, whether MSC Income has found a replacement or not. If the Adviser resigns, MSC Income may not be able to find a replacement or hire internal management with similar expertise and ability to provide the same or equivalent services on acceptable terms within 120 days or at all. If MSC Income is unable to do so quickly, its operations are likely to experience a disruption, its financial condition, business and results of operations as well as its ability to pay distributions are likely to be adversely affected, and the value of shares of MSC Income’s common stock may decline. Even if MSC Income is able to retain comparable management, whether internal or external, the integration of such management and their lack of familiarity with MSC Income’s investment objective may result in additional costs and time delays that may adversely affect MSC Income’s business, financial condition, results of operations and cash flows.

RISKS RELATED TO BDCs

Operating under the constraints imposed on MSC Income as a BDC and RIC may hinder the achievement of its investment objectives.

The 1940 Act and the Code impose numerous constraints on the operations of BDCs and RICs that do not apply to certain of the other investment vehicles that MSC Income may compete with. BDCs are required, for example, to invest at least 70% of their total assets in certain qualifying assets, including U.S. private or thinly traded public companies, cash, cash equivalents, U.S. government securities and other high-quality debt instruments that mature in one year or less from the date of investment. Moreover, qualification for taxation as a RIC requires satisfaction of source-of-income, asset diversification and distribution requirements. Operating under these constraints may hinder MSC Income’s ability to take advantage of attractive investment opportunities and to achieve its investment objective. Any failure to do so could subject MSC Income to enforcement action by the SEC, cause MSC Income to fail to satisfy the requirements associated with RIC status and subject it to entity-level corporate income taxation, cause it to fail the 70% test described above or otherwise have a material adverse effect on its business, financial condition or results of operations.

MSC Income may be precluded from investing in what it and the Adviser believe are attractive investments if such investments are not qualifying assets for purposes of the 1940 Act. If MSC Income does not invest a sufficient portion of its assets in qualifying assets, MSC Income will be prohibited from making any additional investment that is not a qualifying asset and could be forced to forgo attractive investment opportunities. Similarly, these rules could prevent MSC Income from making follow-on investments in existing portfolio companies (which could result in the dilution of MSC Income’s position).

If MSC Income fails to maintain its status as a BDC, MSC Income might be regulated as a closed-end investment company that is required to register under the 1940 Act, which would subject it to additional regulatory restrictions and significantly decrease operating flexibility. In addition, any such failure could cause an event of default under any outstanding indebtedness MSC Income might have, which could have a material adverse effect on its business, financial condition or results of operations.

Failure to maintain its status as a BDC would reduce MSC Income’s operating flexibility.

If MSC Income does not remain a BDC, it might be regulated as a closed-end investment company under the 1940 Act, which would subject MSC Income to substantially more regulatory restrictions under the 1940 Act and correspondingly decrease its operating flexibility.

Regulations governing MSC Income’s operation as a BDC will affect its ability to raise, and the way in which it raises, additional capital.

MSC Income’s business will require capital to operate and grow. MSC Income may acquire such additional capital from the following sources:

Senior Securities

MSC Income may issue debt securities or preferred stock and/or borrow money from banks or other financial institutions, which are referred to collectively as senior securities. As a result of issuing senior securities, MSC Income will be exposed to additional risks, including the following:

•Prior to the one year anniversary of the approval of the Board of Directors, including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) of the Board of Directors, under the provisions of the 1940 Act MSC Income was permitted, as a BDC, to issue senior securities only in amounts such that its BDC asset coverage ratio, as defined in the 1940 Act, equaled at least 200% immediately after each issuance of senior securities. Following the one year anniversary of the approval of the Board of Directors of the reduced asset coverage requirements in Section 61(a)(2) of the 1940 Act and subject to MSC Income’s compliance with certain disclosure requirements, effective as of January 29, 2026, under the provisions of the 1940 Act, MSC Income is permitted to issue senior securities in amounts such that its BDC asset coverage ratio, as defined in the 1940 Act, equals at least 150% after each issuance of senior securities. If the value of MSC Income’s assets declines, it may be unable to satisfy this test. If that happens, MSC Income will be prohibited from issuing debt securities or preferred stock and/or borrowing money from banks or other financial institutions and may not be permitted to declare a cash dividend or make any cash distribution to stockholders or repurchase shares until such time as MSC Income satisfies this test.

•Any amounts that MSC Income uses to service its debt or make payments on preferred stock will not be available for dividends to common stockholders.

•It is likely that any senior securities or other indebtedness MSC Income issues will be governed by an indenture or other instrument containing covenants restricting operating flexibility. Additionally, some of these securities or other indebtedness may be rated by rating agencies, and in obtaining a rating for such securities and other indebtedness, MSC Income may be required to abide by operating and investment guidelines that further restrict operating and financial flexibility.

•MSC Income and, indirectly, its stockholders will bear the cost of issuing and servicing such securities and other indebtedness.

•Preferred stock or any convertible or exchangeable securities issued in the future may have rights, preferences and privileges more favorable than those of MSC Income’s common stock, including separate voting rights, and could delay or prevent a transaction or a change in control to the detriment of the holders of common stock.

•Any unsecured debt issued by MSC Income would generally rank (i) pari passu with its current and future unsecured indebtedness and effectively subordinated to all existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness, and (ii) structurally subordinated to all existing and future indebtedness and other obligations of any of MSC Income’s subsidiaries.

Additional Common Stock

MSC Income is not generally able to issue and sell its common stock at a price below NAV per share. MSC Income may, however, sell its common stock, warrants, options or rights to acquire its common stock, at a price below the current NAV per share of the common stock if the Board of Directors determines that such sale is in the best interests of MSC Income’s stockholders, and if stockholders approve such sale. See Risk Factors — Risks Related to MSC Income’s Securities — Stockholders may incur dilution if MSC Income sells shares of its common stock in one or more offerings at prices below the then current NAV per share of its common stock. for a discussion related to MSC Income issuing shares of common stock below NAV per share.

RISKS RELATED TO MSC INCOME’S SECURITIES

Investing in MSC Income’s securities may involve a high degree of risk.

The investments MSC Income makes in accordance with its investment objective may result in a higher amount of risk than alternative investment options and a higher risk of volatility or loss of principal. MSC Income’s investments in portfolio companies involve higher levels of risk, and therefore, an investment in MSC Income’s securities may not be suitable for someone with lower risk tolerance.

Shares of closed-end investment companies, including BDCs such as MSC Income, may trade at a discount to their NAV per share.

Shares of closed-end investment companies, including BDCs such as MSC Income, may trade at a discount to NAV per share. This characteristic of closed-end investment companies and BDCs is separate and distinct from the risk that MSC Income’s NAV per share may decline. MSC Income cannot predict whether its common stock will trade at, above or below NAV per share. In addition, if its common stock trades below its NAV per share, MSC Income will generally not be able to issue additional common stock at the market price unless its stockholders approve such a sale and the Board of Directors makes certain determinations. See Risk Factors — Risks Related to MSC Income’s Securities — Stockholders may incur dilution if MSC Income sells shares of its common stock in one or more offerings at prices below the then current NAV per share of its common stock. for a discussion related to MSC Income issuing shares of its common stock below NAV per share.

The market price of MSC Income’s securities may be volatile and fluctuate significantly.

Fluctuations in the trading prices of MSC Income’s securities may adversely affect the liquidity of the trading market for its securities and, if MSC Income seeks to raise capital through future securities offerings, its ability to raise such capital. The market price and liquidity of the market for MSC Income’s securities may be significantly affected by numerous factors, some of which are beyond MSC Income’s control and may not be directly related to its operating performance. These factors include:

•significant volatility in the market price and trading volume of securities of BDCs or other companies in MSC Income’s sector, which are not necessarily related to the operating performance of these companies;

•changes in regulatory policies, accounting pronouncements or tax guidelines;

•the exclusion of BDC common stock from certain market indices, such as what happened with respect to the Russell indices and the Standard and Poor’s indices, could reduce the ability of certain investment funds to own MSC Income’s common stock and limit the number of owners of its common stock and otherwise negatively impact the market price of its common stock;

•inability to obtain any exemptive relief that may be required in the future from the SEC;

•loss of BDC or RIC status;

•changes in MSC Income’s earnings or variations in operating results;

•changes in the value of the Investment Portfolio;

•any shortfall in MSC Income’s investment income or net investment income or any increase in losses from levels expected by investors or securities analysts;

•changes to the ratings of MSC Income’s debt securities by rating agencies;

•loss of a major funding source;

•fluctuations in interest rates;

•the operating performance of companies comparable to MSC Income;

•departure of key personnel;

•proposed, or completed, offerings of securities, including classes other than common stock;

•global or national credit market changes; and

•general economic trends and other external factors.

MSC Income may not be able to pay distributions to its stockholders, its distributions may not grow over time and a portion of distributions paid to its stockholders may be a return of capital.

MSC Income intends to pay distributions to its stockholders out of assets legally available for distribution. MSC Income cannot assure you that it will achieve investment results that will allow it to pay a specified level of cash distributions, previously projected distributions for future periods, or year-to-year increases in cash distributions. MSC Income’s ability to pay distributions might be adversely affected by, among other things, the impact of one or more of the risk factors described herein. In addition, the inability to satisfy the asset coverage test applicable to MSC Income as a BDC could limit its ability to pay distributions. All distributions will be paid at the discretion of the Board of Directors and will depend on MSC Income’s earnings, financial condition, maintenance of RIC status, compliance with applicable BDC regulations, compliance with debt covenants and such other factors as the Board of Directors may deem relevant from time to time. MSC Income cannot assure you that it will pay distributions to its stockholders in the future.

When MSC Income makes distributions, it will be required to determine the extent to which such distributions are paid out of current or accumulated taxable earnings, recognized capital gains or capital. To the extent there is a return of capital, investors will be required to reduce their basis in MSC Income’s stock for U.S. federal income tax purposes, which may result in higher tax liability when the shares are sold, even if they have not increased in value or have lost value. In addition, any return of capital will be net of any sales load and offering expenses associated with sales of shares of common stock. In the future, MSC Income’s distributions may include a return of capital.

Stockholders may incur dilution if MSC Income sells shares of its common stock in one or more offerings at prices below the then current NAV per share of its common stock.

The 1940 Act prohibits MSC Income from selling shares of its common stock at a price below the current NAV per share of such stock, with certain exceptions. One such exception is prior stockholder approval of issuances below NAV per share provided that the Board of Directors makes certain determinations. At the 2025 Annual Meeting of Stockholders, MSC Income received approval from its stockholders to have the flexibility, with the approval of the Board of Directors, to offer and sell shares of its common stock at a price below the current NAV per share until September 9, 2026. MSC Income may also seek such authorization at future annual or special meetings of stockholders. Any decision to sell shares of common stock below the then current NAV per share of its common stock would be subject to the determination by the Board of Directors that such issuance is in MSC Income’s and its stockholders’ best interests.

If MSC Income were to sell shares of its common stock below NAV per share, such sales would result in an immediate dilution to the NAV per share. This dilution would occur as a result of the sale of shares at a price below the then current NAV per share of its common stock and a proportionately greater decrease in a stockholder’s interest in MSC Income’s earnings and assets and voting interest in MSC Income than the increase in its assets resulting from such issuance.

Because the number of shares of common stock that could be so issued and the timing of any issuance is not currently known, the actual dilutive effect cannot be predicted; however, the example below illustrates the effect of dilution to existing stockholders resulting from the sale of common stock at prices below the NAV per share.

Illustration: Example of Dilutive Effect of the Issuance of Shares Below NAV. Assume that Company XYZ has 1,000,000 total shares outstanding, $15,000,000 in total assets and $5,000,000 in total liabilities. The NAV per share of the common stock of Company XYZ is $10.00. The following table illustrates the reduction to NAV and the dilution experienced by Stockholder A following the sale of 40,000 shares of the common stock of Company XYZ at $9.50 per share, a price below its NAV per share.


	Prior to Sale Below NAV			Following Sale Below NAV			Percentage Change
Reduction to NAV
Total Shares Outstanding	1,000,000			1,040,000			4.0	%
NAV per share	$	10.00		$	9.98		(0.2)	%

Dilution to Existing Stockholder(1)
Shares Held by Stockholder A	10,000			10,000			—	%
Percentage Held by Stockholder A	1.00		%	0.96		%	(4.0)	%
Total Interest of Stockholder A in NAV	$	100,000		$	99,808		(0.2)	%

(1)Assumes that Stockholder A does not purchase additional shares in the sale of shares below NAV.

Common stockholders’ interest in MSC Income will be diluted if MSC Income issues additional shares of its common stock, which could reduce the overall value of their investment.

MSC Income’s investors do not have preemptive rights to purchase any shares of common stock issued in the future. MSC Income’s articles of amendment and restatement authorize it to issue up to 450,000,000 shares of common stock. Pursuant to MSC Income’s articles of amendment and restatement, a majority of the entire Board of Directors may amend MSC Income’s articles of amendment and restatement from time to time to increase or decrease the aggregate number of authorized shares of stock or the number of authorized shares of stock of any class or series without stockholder approval. The Board of Directors may elect to sell additional shares in future public offerings or issue equity interests in private offerings. To the extent MSC Income issues additional equity interests, its stockholders’ percentage ownership interest in MSC Income will be diluted. In addition, depending upon the terms and pricing of any additional offerings and the value of MSC Income’s investments, stockholders may also experience dilution in the book value and fair value of their shares of common stock.

Purchases of shares of MSC Income’s common stock by MSC Income or Main Street under open-market purchase programs may result in the price per share of its common stock being higher than the price that otherwise might exist in the open market.

The Board of Directors authorized MSC Income to repurchase shares of its common stock through an open-market share repurchase program for up to $65.0 million in the aggregate for a 12-month period starting in March 2025. Pursuant to such authorization, MSC Income has entered into a Rule 10b5-1 Stock Repurchase Plan to facilitate the repurchase of up to the full $65.0 million in shares of its common stock authorized under the share repurchase program in accordance with the guidelines specified in Rule 10b-18 and Rule 10b5-1 of the Exchange Act. In addition, Main Street intends to purchase up to $20.0 million in the aggregate of shares of common stock in the open market for a 12-month period starting in March 2025, pursuant to the terms of the Main Street Rule 10b5-1 Stock Purchase Plan. The purchases of shares pursuant to the Main Street Rule 10b5-1 Stock Purchase Plan will be implemented in accordance with Rule 10b5-1 and Rule 10b-18 under the Exchange Act. These activities may have the effect of maintaining the market price of shares of MSC Income’s common stock or mitigating a decline in the market price of such shares and, as a result, the price of shares of MSC Income’s common stock may be higher than the price that otherwise might exist in the open market.

Provisions of the Maryland General Corporation Law and MSC Income’s articles of amendment and restatement and bylaws could deter takeover attempts and have an adverse impact on the price of MSC Income’s common stock.

The Maryland General Corporation Law and MSC Income’s articles of amendment and restatement and bylaws contain provisions that may have the effect of discouraging, delaying or making difficult a change in control of MSC Income’s company or the removal of its incumbent directors. The existence of these provisions, among others, may have a negative impact on the price of MSC Income’s common stock and may discourage third-party bids for ownership of the company. These provisions may prevent any premiums being offered to you for MSC Income’s common stock.

MSC Income may in the future determine to issue preferred stock, which could adversely affect the market value of its common stock.

The issuance of shares of preferred stock with dividend or conversion rights, liquidation preferences or other economic terms favorable to the holders of preferred stock could adversely affect the market price for MSC Income’s common stock by making an investment in the common stock less attractive. In addition, the dividends on any preferred stock MSC Income issues must be cumulative. Payment of dividends and repayment of the liquidation preference of preferred stock must take preference over any dividends or other payments to common stockholders, and holders of preferred stock are not subject to any of MSC Income’s expenses or losses and are not entitled to participate in any income or appreciation in excess of their stated preference (other than convertible preferred stock that converts into common stock). In addition, under the 1940 Act, preferred stock constitutes a “senior security” for purposes of the asset coverage test.

MSC Income’s credit ratings may not reflect all risks of an investment in its debt securities.

MSC Income’s credit ratings are an assessment by third parties of its ability to pay its obligations. Consequently, real or anticipated changes in MSC Income’s credit ratings will generally affect the market value of its debt securities. MSC Income’s credit ratings, however, may not reflect the potential impact of risks related to market conditions generally or other factors discussed above on the market value of or trading market for the publicly issued debt securities.

Sales of substantial amounts of MSC Income’s common stock in the public market may have an adverse effect on the market price of its common stock.

Sales of substantial amounts of MSC Income’s common stock, or the perception that such sales could occur, could adversely affect the prevailing market prices for its common stock. If these sales occur, it could impair MSC Income’s ability to raise additional capital through the sale of equity securities should it desire to do so. MSC Income cannot predict what effect, if any, future sales of securities, or the availability of securities for future sales, will have on the market price of its common stock prevailing from time to time.

FEDERAL INCOME TAX RISKS

MSC Income will be subject to corporate-level U.S. federal income tax if it is unable to qualify as a RIC under Subchapter M of the Code.

To maintain RIC tax treatment under the Code, MSC Income must meet the following annual distribution, income source and asset diversification requirements:

•The Annual Distribution Requirement for a RIC will be satisfied if MSC Income distributes to its stockholders on an annual basis at least 90% of its net ordinary taxable income and realized net short-term capital gains in excess of realized net long-term capital losses, if any. Depending on the level of taxable income earned in a tax year, MSC Income may choose to carry forward taxable income in excess of current year distributions into the next tax year and pay a 4% U.S. federal excise tax on such income. Any such carryover taxable income must be distributed through a dividend declared prior to the later of (i) the filing of the final tax return related to the year which generated such taxable income or (ii) the fifteenth day of the ninth month following the close of the year in which such taxable income was generated. For more information regarding tax treatment, see Business — Regulation — Taxation as a Regulated Investment Company. Because MSC Income uses debt financing, it is subject to certain asset coverage ratio requirements under the 1940 Act and are (and may in the future become) subject to certain financial covenants under loan and credit agreements that could, under certain circumstances, restrict it from making distributions necessary to satisfy the distribution requirement. In addition, because MSC Income receives non-cash sources of income such as PIK interest which involves MSC Income recognizing taxable income without receiving the cash representing such income, it may have difficulty meeting the distribution requirement. If MSC Income is unable to obtain cash from other sources, it could fail to qualify for RIC tax treatment and thus become subject to corporate-level U.S. federal income tax.

•The source-of-income requirement will be satisfied if MSC Income obtains at least 90% of its gross income for each year from dividends, interest, gains from the sale of stock or securities or similar sources.

•The asset diversification requirement will be satisfied if MSC Income meets certain asset diversification requirements at the end of each quarter of MSC Income’s taxable year. To satisfy this requirement, at least 50% of the value of MSC Income’s assets must consist of cash, cash equivalents, U.S. government securities, securities of other RICs, and other acceptable securities; and no more than 25% of the value of MSC Income’s assets can be invested in the securities, other than U.S. government securities or securities of other RICs, (i) of one issuer, (ii) of two or more issuers that are controlled, as determined under applicable Code rules, by MSC Income and that are engaged in the same or similar or related trades or businesses or (iii) of certain “qualified publicly traded partnerships.”

Failure to meet these requirements may result in MSC Income having to dispose of certain investments quickly in order to prevent the loss of RIC status. Because most of MSC Income’s investments are in privately held companies, and therefore illiquid, any such dispositions could be made at disadvantageous prices and could result in substantial losses. Moreover, if MSC Income fails to maintain RIC tax treatment for any reason and is subject to corporate income tax, the resulting corporate taxes could substantially reduce MSC Income’s net assets, the amount of income available for distribution and the amount of its distributions.

MSC Income may have difficulty paying the distributions required to maintain RIC tax treatment under the Code if it recognizes income before or without receiving cash representing such income.

MSC Income will include in income certain amounts that it has not yet received in cash, such as: (i) amortization of original issue discount, which may arise if MSC Income receives warrants in connection with the origination of a loan such that ascribing a value to the warrants creates original issue discount in the debt instrument, if MSC Income invests in a debt investment at a discount to the par value of the debt security or possibly in other circumstances; (ii) contractual PIK interest, which represents contractual interest added to the loan balance and due at the end of the loan term; (iii) contractual preferred dividends, which represents contractual dividends added to the preferred stock and due at the end of the preferred stock term, subject to adequate profitability at the portfolio company; or (iv) amortization of market discount, which is associated with loans purchased in the secondary market at a discount to par value. Such amortization of original issue discounts, increases in loan balances as a result of contractual PIK arrangements, cumulative preferred dividends, or amortization of market discount will be included in income before MSC Income receives the corresponding cash payments. MSC Income also may be required to include in income certain other amounts before it receive such amounts in cash. Investments structured with these features may represent a higher level of credit risk compared to investments generating income which must be paid in cash on a current basis.

Since, in certain cases, MSC Income may recognize taxable income before or without receiving cash representing such income, it may have difficulty meeting the Annual Distribution Requirement necessary to maintain RIC tax treatment under the Code. Accordingly, MSC Income may have to sell some of its investments at times and/or at prices it would not consider advantageous, raise additional debt or equity capital or forgo new investment opportunities for this purpose. If MSC Income is not able to obtain cash from other sources, it may fail to qualify for RIC tax treatment and thus become subject to corporate-level U.S. federal income tax. For additional discussion regarding the tax implications of a RIC, please see Item 1. Business — Regulation — Taxation as a Regulated Investment Company.

MSC Income may in the future choose to pay dividends in its own stock, in which case you may be required to pay tax in excess of the cash you receive.

MSC Income may distribute taxable dividends that are payable in part in its stock. Under certain applicable provisions of the Code and the Treasury regulations, distributions payable by MSC Income in cash or in shares of stock (at the stockholders’ election) would satisfy the Annual Distribution Requirement. The IRS has issued guidance providing that a dividend payable in stock or in cash at the election of the stockholders will be treated as a taxable dividend eligible for the dividends paid deduction provided at least 20% of the total distribution is payable in cash and certain other requirements are satisfied. According to this guidance, if too many stockholders elect to receive their distributions in cash, each such stockholder would receive a pro rata share of the total cash to be distributed and would receive the remainder of their distribution in shares of stock. Taxable stockholders receiving such dividends will be required to include the full amount of the dividend as ordinary income (or as long-term capital gain to the extent such dividend is properly reported as a capital gain dividend) to the extent of MSC Income’s current and accumulated earnings and profits for U.S. federal income tax purposes. As a result, a U.S. stockholder may be required to pay tax with respect to such dividends in excess of any cash received. If a U.S. stockholder sells the stock it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of MSC Income’s stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, MSC Income may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in stock. In addition, if a significant number of its stockholders determine to sell shares of MSC Income’s stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price of MSC Income’s stock.

Stockholders may have current tax liability on dividends they elect to reinvest in MSC Income’s common stock but would not receive cash from such dividends to pay such tax liability.

If stockholders participate in MSC Income’s dividend reinvestment plan, they will be deemed to have received, and for federal income tax purposes will be taxed on, the amount reinvested in common stock to the extent the amount reinvested was not a tax-free return of capital. As a result, unless a stockholder is a tax-exempt entity, it may have to use funds from other sources to pay its tax liability on the value of the dividend that they have elected to have reinvested in MSC Income’s common stock.

Legislative or regulatory tax changes could adversely affect MSC Income’s stockholders.

At any time, the federal income tax laws governing RICs or the administrative interpretations of those laws or regulations may be amended. Any new laws, regulations or interpretations may take effect retroactively and could adversely affect the taxation of MSC Income or its stockholders. Therefore, changes in tax laws, regulations or administrative interpretations or any amendments thereto could diminish the value of an investment in MSC Income’s shares or the value or the resale potential of its investments. If MSC Income does not comply with applicable laws and regulations, it could lose any licenses that it then holds for the conduct of its business and may be subject to civil fines and criminal penalties.

GENERAL RISK FACTORS

Events outside of MSC Income’s control, including public health crises, supply chain disruptions and inflation, could negatively affect MSC Income and its portfolio companies and the results of MSC Income’s operations.

Periods of market volatility could occur in response to pandemics or other events outside of MSC Income’s control. MSC Income and the portfolio companies in which it invests in could be affected by force majeure events (i.e., events beyond the control of the party claiming that the event has occurred, such as acts of God, fire, flood, earthquakes, outbreaks of an infectious disease, pandemic or any other serious public health concern, war, terrorism, labor strikes, major plant breakdowns, pipeline or electricity line ruptures, failure of technology, defective design and construction, accidents, demographic changes, government macroeconomic policies, social instability, etc.). Some force majeure events could adversely affect the ability of a party (including MSC Income, a portfolio company or a counterparty to either) to perform its obligations until it is able to remedy the force majeure event. In addition, force majeure events, such as the cessation of the operation of equipment for repair or upgrade, could similarly lead to the unavailability of essential equipment and technologies. These risks could, among other effects, adversely impact the cash flows available from a portfolio company, cause personal injury or loss of life, including to an officer, director or a member of MSC Income’s investment team, damage property, or instigate disruptions of service. In addition, the cost to a portfolio company or MSC Income of repairing or replacing damaged assets resulting from such force majeure event could be considerable.

It will not be possible to insure against all such events, and insurance proceeds received, if any, could be inadequate to completely or even partially cover any loss of revenues or investments, any increases in operating and maintenance expenses, or any replacements or rehabilitation of property. Certain events causing catastrophic loss could be either uninsurable, or insurable at such high rates as to adversely impact MSC Income or its portfolio companies, as applicable. Force majeure events that are incapable of or are too costly to cure could have permanent adverse effects. Certain force majeure events (such as war or an outbreak of an infectious disease) could have a broader negative impact on the world economy and international business activity generally, or in any of the countries in which MSC Income invests or its portfolio companies operate specifically. Such force majeure events could result in or coincide with: increased volatility in the global securities, derivatives and currency markets; a decrease in the reliability of market prices and difficulty in valuing assets; greater fluctuations in currency exchange rates; increased risk of default (by both government and private issuers); further social, economic, and political instability; nationalization of private enterprise; greater governmental involvement in the economy or in social factors that impact the economy; less governmental regulation and supervision of the securities markets and market participants and decreased monitoring of the markets by governments or self-regulatory organizations and reduced enforcement of regulations; limitations on the activities of investors in such markets; controls or restrictions on foreign investment, capital controls and limitations on repatriation of invested capital; inability to purchase and sell investments or otherwise settle security or derivative transactions (i.e., a market freeze); unavailability of currency hedging techniques; substantial, and in some periods extremely high, rates of inflation, which can last many years and have substantial negative effects on credit and securities markets as well as the economy as a whole; recessions; and difficulties in obtaining and/or enforcing legal judgments.

Market conditions may materially and adversely affect debt and equity capital markets in the U.S. and abroad, which may have a negative impact on MSC Income’s business and operations.

The success of MSC Income’s activities is affected by general economic and market conditions, including, among others, interest rates, availability of credit, inflation rates, economic uncertainty, changes in laws and trade barriers. These factors could affect the level and volatility of securities prices and the liquidity of MSC Income’s investments. Volatility or illiquidity could impair profitability or result in losses. These factors also could adversely affect the availability or cost of leverage, which would result in lower returns.

Disruptions in the capital markets could increase the spread between the yields realized on risk-free and higher risk securities, resulting in illiquidity in parts of the capital markets. Such disruptions could adversely affect MSC Income’s business, financial condition, results of operations and cash flows, and future market disruptions and/or illiquidity could negatively impact MSC Income. These unfavorable economic conditions could increase funding costs and limit access to the capital markets, and could result in a decision by lenders not to extend credit to MSC Income in the future. These events could limit MSC Income’s investments, ability to grow and could negatively impact operating results and the fair values of MSC Income’s debt and equity investments.

The failure in cybersecurity systems, as well as the occurrence of events unanticipated in MSC Income’s and the Adviser’s disaster recovery systems and management continuity planning could impair MSC Income’s ability to conduct business effectively.

The occurrence of a disaster such as a cyber-attack, a natural catastrophe, an industrial accident, a terrorist attack or war, events unanticipated in MSC Income’s and the Adviser’s disaster recovery systems, or a support failure from external providers, could have an adverse effect on MSC Income’s ability to conduct business and on results of operations and financial condition, particularly if those events affect MSC Income’s computer-based data processing, transmission, storage, and retrieval systems or destroy data. If a significant number of MSC Income’s managers were unavailable in the event of a disaster, the ability to effectively conduct business could be severely compromised.

MSC Income depends heavily upon computer systems to perform necessary business functions. Despite MSC Income’s implementation of a variety of security measures, its and the Adviser’s computer systems could be subject to cyber-attacks and unauthorized access, such as physical and electronic break-ins or unauthorized tampering. Like other companies, MSC Income may experience threats to its data and systems, including malware and computer virus attacks, unauthorized access, system failures and disruptions. If one or more of these events occurs, it could potentially jeopardize the confidential, proprietary and other information processed and stored in, and transmitted through, MSC Income’s and the Adviser’s computer systems and networks, or otherwise cause interruptions or malfunctions in operations, which could result in damage to MSC Income’s reputation, financial losses, litigation, increased costs, regulatory penalties and/or customer dissatisfaction or loss.

Third parties with which MSC Income does business (including, but not limited to, service providers, such as accountants, custodians, transfer agents and administrators, and the issuers of securities in which MSC Income invests) may also be sources or targets of cybersecurity or other technological risks. While the Adviser engages in actions to reduce exposure resulting from outsourcing, MSC Income and the Adviser cannot control the cybersecurity plans and systems put in place by these third parties and ongoing threats may result in unauthorized access, loss, exposure or destruction of data, or other cybersecurity incidents, with increased costs and other consequences, including those described above. Privacy and information security laws and regulation changes, and compliance with those changes, may also result in cost increases due to system changes and the development of new administrative processes.

MSC Income is highly dependent on information systems and systems failures could significantly disrupt its business, which may, in turn, negatively affect the market price of its common stock and its ability to pay dividends.

MSC Income’s business is highly dependent on its and third parties’ communications and information systems. Any failure or interruption of those systems, including as a result of the termination of an agreement with any third-party service providers, could cause delays or other problems in MSC Income’s activities. MSC Income and the Adviser’s financial, accounting, data processing, backup or other operating systems and facilities may fail to operate properly or become disabled or damaged as a result of a number of factors including events that are wholly or partially beyond MSC Income’s control and adversely affect its business. There could be:

•sudden electrical or telecommunications outages;

•natural disasters such as earthquakes, tornadoes and hurricanes;

•disease pandemics;

•events arising from local or larger scale political or social matters, including terrorist acts; and

•cyber-attacks, including software viruses, ransomware, malware and phishing and vishing schemes.

Failure to comply with applicable laws or regulations and changes in laws or regulations governing MSC Income’s operations may adversely affect its business or cause it to alter its business strategy.

MSC Income, the Adviser and MSC Income’s portfolio companies are subject to applicable local, state and federal laws and regulations. Failure to comply with any applicable local, state or federal law or regulation could negatively impact MSC Income’s reputation and business results. New legislation may also be enacted or new interpretations, rulings or regulations could be adopted, including those governing the types of investments MSC Income is permitted to make, any of which could harm MSC Income and its stockholders, potentially with retroactive effect. Additionally, any changes to the laws and regulations governing operations relating to permitted investments may cause MSC Income to alter its investment strategy in order to avail itself of new or different opportunities. Such changes could result in material differences to the strategies and plans set forth herein and may result in MSC Income’s investment focus shifting from the areas of expertise of the Adviser’s investment team to other types of investments in which the Adviser’s investment team may have less expertise or little or no experience. Thus, any such changes, if they occur, could have a material adverse effect on MSC Income’s results of operations and the value of your investment.

Uncertainty about presidential administration initiatives could negatively impact MSC Income’s business, financial condition and results of operations.

There is significant uncertainty with respect to legislation, regulation and government policy at the federal level, as well as the state and local levels. Recent events, including the 2024 U.S. presidential election, have created a climate of heightened uncertainty and introduced new and difficult-to-quantify macroeconomic and political risks with potentially far-reaching implications. The presidential administration’s changes to U.S. policy may impact, among other things, the U.S. and global economy, international trade and relations, unemployment, immigration, taxes, healthcare, the U.S. regulatory environment, inflation and other areas. Although MSC Income cannot predict the impact, if any, of these changes to its business, they could adversely affect business, financial condition, operating results and cash flows. Until MSC Income knows what policy changes are made and how those changes impact its business and the business of its competitors over the long term, MSC Income will not know if, overall, it will benefit from them or be negatively affected by them.

MSC Income may experience fluctuations in its operating results.

MSC Income could experience fluctuations in its operating results due to a number of factors, including the ability or inability to make investments in companies that meet its investment criteria, the interest rate payable on the debt securities MSC Income acquires, the level of portfolio dividend and fee income, the level of its expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which MSC Income encounters competition in its markets and general economic conditions. As a result of these factors, operating results for any period should not be relied upon as being indicative of performance in future periods.

Technological innovations and industry disruptions may negatively impact MSC Income.

Technological innovations have disrupted traditional approaches in multiple industries and can permit younger companies to achieve success and in the process disrupt markets and market practices. MSC Income can provide no assurance that new businesses and approaches will not be created that would compete with it and/or its portfolio companies or alter the market practices in which MSC Income has been designed to function within and on which it depends on for its investment return. New approaches could damage MSC Income’s investments, disrupt the market in which MSC Income operates and subject it to increased competition, which could materially and adversely affect its business, financial condition and results of investments.

MSC Income is subject to risks associated with artificial intelligence and machine learning technology.

Effects of Leverage [Text Block]

The following table illustrates the effect of leverage on returns from an investment in MSC Income’s common stock assuming various annual returns, net of expenses. The calculations in the table below are hypothetical and actual returns may be higher or lower than those appearing below.


	Assumed Return on the Investment Portfolio (net of expenses)
	(10.0)%	(5.0)%	0.0%	5.0%	10.0%
Corresponding Net Return to Common Stockholder (1)(2)	(23.3)%	(14.0)%	(4.6)%	4.7%	14.1%

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(2)In order for MSC Income to cover its annual interest payments on indebtedness, MSC Income must achieve annual returns on its December 31, 2025 total assets of at least 2.5%.

Annual Interest Rate [Percent]

5.70%

Annual Coverage Return Rate [Percent]

2.50%

Return at Minus Ten [Percent]

(23.30%)

Return at Minus Five [Percent]

(14.00%)

Return at Zero [Percent]

(4.60%)

Return at Plus Five [Percent]

4.70%

Return at Plus Ten [Percent]

14.10%

Share Price [Table Text Block]

COMMON STOCK AND HOLDERS

MSC Income’s common stock began trading on the NYSE under the symbol “MSIF” on January 29, 2025.

For the periods indicated, the NAV per share of MSC Income’s common stock, the range of high and low closing sales prices of MSC Income’s common stock as reported on the NYSE and the high and low closing sales prices as a percentage of the NAV per share of its common stock are as follows:


			Price Range				Premium (Discount) of High Sales Price to		Premium (Discount) of Low Sales Price to
	NAV(1)		High		Low		NAV(2)		NAV(2)
Year ending December 31, 2026
First Quarter (through February 25, 2026)	*		$	13.67	$	12.24	*		*
Year ended December 31, 2025
Fourth Quarter	$	15.85	$	14.31	$	11.87	(10)	%	(25)	%
Third Quarter	15.54		16.69		13.13		7	%	(16)	%
Second Quarter	15.33		17.98		14.16		17	%	(8)	%
First Quarter (January 29, 2025 through March 31, 2025)	15.35		17.84		15.82		16	%	3	%

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*NAV has not yet been determined for the first quarter of 2026.

(1)NAV is determined as of the last day in the relevant quarter and therefore may not reflect the NAV per share on the date of the high and low closing sales prices. The NAVs shown are based on outstanding shares at the end of each period.

(2)Calculated for each quarter as (i) NAV subtracted from the respective high or low share price divided by (ii) NAV.

On February 25, 2026, the closing sales price of MSC Income’s common stock on the NYSE was $12.53 per share, and there were 12,963 holders of record of the Fund’s common stock which did not include stockholders for whom shares are held in “nominee” or “street name.” The NAV per share of MSC Income’s common stock on December 31, 2025 (the last date prior to the date of this Annual Report on Form 10-K on which MSC Income determined its NAV per share) was $15.85, and the discount of the February 25, 2026 closing sales price of the Fund’s common stock was 21% to this NAV per share.

Shares of BDCs may trade at a market price that is less than the value of the net assets attributable to those shares. The possibility that MSC Income’s shares of common stock will trade at a discount from NAV per share or at premiums that are unsustainable over the long term are separate and distinct from the risk that MSC Income’s NAV per share will decrease. It is not possible to predict whether MSC Income’s common stock will trade at, above or below NAV per share. Since its listing on the NYSE in January 2025, MSC Income’s shares of common stock have traded at prices both less than and exceeding its NAV per share.

NAV Per Share

$ 15.85

$ 15.53

$ 15.54

$ 15.22

$ 15.36

$ 14.56

$ 15.54

$ 15.92

$ 16.29

$ 15.76

Because our Investment Portfolio is recorded at fair value, there is and will continue to be uncertainty as to the value of our portfolio investments. [Member]