FS KKR Capital (FSK) Risk Analysis

If we deliver shares of our common stock upon a conversion of the Convertible Preferred Stock at a time when our net asset value per share exceeds the conversion price then in effect, our common stockholders may incur dilution. Our stockholders will also experience dilution in their ownership percentage of common stock upon our issuance of common stock in connection with the conversion of the Convertible Preferred Stock. In addition, to the extent that we elect to redeem shares of the Convertible Preferred Stock by delivering shares of our common stock pursuant to our stock redemption right, our common stockholders will similarly experience dilution. Any dividends paid on our common stock will also be paid on shares of our common stock issued in connection with a conversion of the Convertible Preferred Stock after such issuance.

Holders of the Convertible Preferred Stock are entitled to vote on an as-converted basis on each matter submitted to a vote of our stockholders. In addition, for so long as we are subject to the 1940 Act, the holders of Convertible Preferred Stock, voting separately as a single class, have the right to elect two members of the Board at all times, and the balance of directors is elected by the holders of our common stock and the Convertible Preferred Stock voting together. If at any time accumulated dividends on the outstanding shares of Convertible Preferred Stock equal to at least two full years' dividends are due and unpaid, or if holders of any other preferred stock become entitled to elect a majority of our directors under the 1940 Act, the number of directors constituting the Board will automatically increase and holders of the Convertible Preferred Stock and any other preferred stock will have the power to elect such additional directors to constitute a majority of the Board, voting separately as a class. Furthermore, holders of the Convertible Preferred Stock have class voting rights on certain matters, including amendments to our charter that materially and adversely affect the rights of the Convertible Preferred Stock, increases or decreases in the authorized number of preferred shares or issuances of additional preferred stock, and the creation of any new class or series of shares ranking senior or on parity with the Convertible Preferred Stock with respect to dividends or liquidation. In addition, upon the occurrence of a Change of Control (as defined in the Articles Supplementary), at the option of holders of a majority of the then-outstanding shares of Convertible Preferred Stock, we will be required to redeem all of the then-outstanding shares of Convertible Preferred Stock upon 60 days' notice following the announcement or occurrence of such Change of Control, for cash consideration equal to the Liquidation Preference plus accumulated but unpaid dividends. These provisions may limit our ability to pursue strategic transactions or other actions that might otherwise be in the best interests of our common stockholders. Restrictions imposed on the declarations and payment of dividends or other distributions to the holders of our common stock and preferred stock, both by the 1940 Act and by requirements imposed by rating agencies or the terms of our credit facilities or other financing arrangements, might also impair our ability to maintain our qualification as a RIC for U.S. federal income tax purposes.

On May 6, 2026, the Board approved the Company Share Repurchase Authorization, which authorizes the repurchase of up to $300.0 million in aggregate of our outstanding common stock in the open market, by tender offer or in privately negotiated purchases in compliance with the Exchange Act and other applicable law. The Company Share Repurchase Authorization is scheduled to expire on June 1, 2027, unless extended, or until the aggregate repurchase amount approved by the Board has been expended. Pursuant to the Company Share Repurchase Authorization, we are authorized to repurchase shares of our common stock at prices below our most recently reported net asset value per share, including in accordance with the guidelines specified in Rules 10b-18 and 10b5-1 under the Exchange Act, and we will determine, in our discretion, the timing, manner, price and amount of any repurchases based upon the evaluation of economic and market conditions, stock price, available cash, applicable legal, contractual and regulatory requirements and other factors. The Company Share Repurchase Authorization does not require us to repurchase any specific number of shares and may be suspended, extended, modified or discontinued at any time, subject to applicable law. Repurchases under the Company Share Repurchase Authorization may have the effect of maintaining the market price of our common stock or retarding a decline in the market price of our common stock, and, as a result, the price of our common stock may be higher than the price that otherwise might have existed in the open market.