NOTE 10—DEBT CAPITAL ACTIVITIES

6.00% Notes due 2026

On December 17, 2021, the Company issued $70.0 million aggregate principal amount of its 6.00% Notes due 2026 pursuant to an Indenture, dated as of March 28, 2018 (the “Base Indenture”), between the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee (the “Trustee”), as supplemented by a second supplemental indenture, dated as of December 17, 2021 (together with the Base Indenture, the “Indenture”), between the Company and the Trustee. On December 21, 2021, the Company issued an additional $5.0 million aggregate principal amount of 6.00% Notes due 2026 pursuant to an overallotment option. The 6.00% Notes due 2026 bear interest at a fixed rate of 6.00% per year, payable quarterly in arrears on March 30, June 30, September 30, and December 30 of each year, commencing on March 30, 2022. The 6.00% Notes due 2026 have a maturity date of December 30, 2026, unless previously repurchased or redeemed in accordance with their terms. The Company has the right to redeem the 6.00% Notes due 2026, in whole or in part, at any time or from time to time, on or after December 30, 2024 at a redemption price of 100% of the outstanding principal amount of the 6.00% Notes due 2026 plus accrued and unpaid interest.

The 6.00% Notes due 2026 are direct unsecured obligations of the Company and rank pari passu, or equal in right of payment, with all outstanding and future unsecured, unsubordinated indebtedness of the Company; senior to any of the Company’s future indebtedness that expressly provides it is subordinated to the 6.00% Notes due 2026; effectively subordinated to any of the Company’s future secured indebtedness (including indebtedness that is initially unsecured in respect of which the Company subsequently grants a security interest), to the extent of the value of the assets securing such indebtedness (provided, however, that the Company has agreed under the Indenture to not incur any secured or unsecured indebtedness that would be senior to the 6.00% Notes due 2026 while the 6.00% Notes due 2026 are outstanding, subject to certain exceptions); and structurally subordinated to all existing and future indebtedness and other obligations of any of the Company’s subsidiaries.

The Company records certain fees and expenses incurred in connection with its 6.00% Notes due 2026 as deferred debt issuance costs. Such costs are reflected in the carrying value of the 6.00% Notes due 2026. As of September 30, 2026 and December 31, 2025, the Company had deferred debt issuance costs of $46,863 and $187,676, respectively, associated with the 6.00% Notes due 2026. The table below shows a reconciliation from the aggregate principal amount of 6.00% Notes due 2026 to the balance shown on the Condensed Consolidated Statements of Assets and Liabilities.

 SCHEDULE OF RECONCILIATION FROM AGGREGATE PRINCIPAL AMOUNT OF 6.00% NOTES DUE 2026

The 6.00% Notes due 2026 are listed for trading on the Nasdaq Global Select Market under the symbol “NSLRL”. The reported closing market price of NSLRL on September 30, 2026 and December 31, 2025 was $24.97 and $25.00 per note, respectively. As of September 30, 2026 and December 31, 2025, the fair value of the 6.00% Notes due 2026 was $35.7 million and $35.8 million, respectively, and were classified within Level 1 of the fair value hierarchy.

NEOSTELLAR CAPITAL CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2026

On August 6, 2024, the Company’s Board of Directors approved a discretionary note repurchase program (the “Note Repurchase Program”), which allows the Company to repurchase up to $35.0 million of its 6.00% Notes due 2026 through open market purchases, including block purchases, in such manner as will comply with the provisions of the 1940 Act and the Exchange Act. During the year ended December 31, 2024, the Company repurchased and retired $30.3 million of aggregate principal amount of the 6.00% Notes due 2026.

On October 29, 2025, the Company’s Board of Directors approved an extension of the Note Repurchase Program, which allows the Company to repurchase up to an additional $40.0 million or the remaining aggregate principal amount, of its 6.00% Notes due 2026 through open market purchases, including block purchases, in such manner as will comply with the provisions of the 1940 Act and the Exchange Act. During the year ended December 31, 2025, the Company repurchased and retired $8.8 million aggregate principal amount of the 6.00% Notes due 2026.

During the three and nine months ended September 30, 2026, the Company repurchased and retired $49,600 of aggregate principal amount of the 6.00% Notes due 2026 under the Note Repurchase Program. As of September 30, 2026, the aggregate principal amount of the 6.00% Notes due 2026 that remained available for repurchase under the Note Repurchase Program was approximately $35.8 million.

6.50% Convertible Notes due 2029

On August 14, 2024, the Company privately issued $25.0 million aggregate principal amount of its 6.50% Convertible Notes due 2029 (the “Initial Notes”) pursuant to a Notes Purchase Agreement, as Amended and Restated on December 12, 2025 (the “Notes Purchase Agreement”), between the Company and the purchaser identified therein (the “Purchaser”). On October 9, 2024, the Company issued an additional $5.0 million in aggregate principal amount of 6.50% Convertible Notes due 2029 (the “Additional Notes”), which are treated as a single series with the Initial Notes. On January 16, 2025, the Company issued $5.0 million in Additional Notes, which are treated as a single series with the Initial Notes and prior issuances of Additional Notes.

The 6.50% Convertible Notes due 2029 bear interest at a rate of 6.50% per year, payable quarterly in arrears on March 30, June 30, September 30, and December 30 of each year, commencing on September 30, 2024. The 6.50% Convertible Notes due 2029 have a maturity date of August 14, 2029, unless previously repurchased, redeemed or converted in accordance with the terms of the Notes Purchase Agreement. The Company has the right to redeem the 6.50% Convertible Notes due 2029, in whole or in part, at any time or from time to time, on or after August 6, 2027, upon the fulfillment of certain conditions. The Company has determined that the Conversion Cap Cash Payment feature included in the Convertible Note is an embedded derivative that meets the equity classification criteria. As such, the feature is not bifurcated and is accounted for as part of the debt instrument, which is recorded at amortized cost. The Company continues to assess this feature to determine if a future event would require bifurcation.

The 6.50% Convertible Notes due 2029 are convertible into shares of our common stock at the Purchaser’s sole discretion at an initial conversion rate of 129.0323 shares of common stock per $1,000 principal amount of the 6.50% Convertible Notes due 2029, subject to adjustment as provided in the Notes Purchase Agreement. Effective as of July 21, 2025, the conversion rate applicable to the 6.50% Convertible Notes due 2029 was adjusted to $7.53 per share (132.7530 shares of the Company’s common stock per $1,000 principal amount of the 6.50% Convertible Notes due 2029) from the initial conversion price of $7.75 per share (129.0323 shares of the Company’s common stock per $1,000 principal amount of the 6.50% Convertible Notes due 2029), which had been effective since issuance. The adjustment to the conversion rate of the 6.50% Convertible Notes due 2029 was made pursuant to the Notes Purchase Agreement governing the 6.50% Convertible Notes due 2029 as a result of the Company’s cash dividend of $0.25 per share, paid on July 31, 2025 to stockholders of record as of the close of business on July 21, 2025. Effective as of November 21, 2025, the conversion rate applicable to the 6.50% Convertible Notes due 2029 was adjusted to $7.32 per share (136.5633 shares of the Company’s common stock per $1,000 principal amount of the 6.50% Convertible Notes due 2029) from the most recent conversion price of $7.53 per share (132.7530 shares of the Company’s common stock per $1,000 principal amount of the 6.50% Convertible Notes due 2029), which had been effective since July 21, 2025. The adjustment to the conversion rate of the 6.50% Convertible Notes due 2029 was made pursuant to the Notes Purchase Agreement governing the 6.50% Convertible Notes due 2029 as a result of the Company’s cash dividend of $0.25 per share, paid on December 5, 2025 to stockholders of record as of the close of business on November 21, 2025.

NEOSTELLAR CAPITAL CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2026

The 6.50% Convertible Notes due 2029 are direct unsecured obligations of the Company and rank pari passu, or equal in right of payment, with any outstanding existing or future unsecured, unsubordinated indebtedness of the Company. The 6.50% Convertible Notes due 2029 are junior in right of payment to any existing or future secured credit facility; provided, however, that if the Company enters into a future credit facility senior in right of payment to the 6.50% Convertible Notes due 2029 (including any secured indebtedness), the interest on the outstanding principal amount of the 6.50% Convertible Notes due 2029 shall increase as of the date of such entry to 7.00% per annum.

There were no conversions of the 6.50% Convertible Notes due 2029 during the three months ended September 30, 2026. For the nine months ended September 30, 2026, the Company issued 1,092,504 shares of its common stock and paid cash in lieu of fractional shares upon the conversion of $8,000,000 in aggregate principal amount of the 6.50% Convertible Notes due 2029.

The table below shows a reconciliation from the aggregate principal amount of 6.50% Convertible Notes due 2029 to the balance shown on the Condensed Consolidated Statements of Assets and Liabilities.

 SCHEDULE OF RECONCILIATION FROM AGGREGATE PRINCIPAL AMOUNT OF 6.50% CONVERTIBLE NOTES DUE 2029

As of September 30, 2026 and December 31, 2025, the fair value of the 6.50% Convertible Notes due 2029 approximated $30.8 million and $40.9 million, respectively, and were classified within Level 3 of the fair value hierarchy.

6.50% Redeemable Promissory Note due 2029

On June 26, 2026, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with MCP Investing LLC (“MCP”), an affiliate of Magnetar. On July 16, 2026, pursuant to the Securities Purchase Agreement, the Company issued to MCP a $20.0 million Redeemable Promissory Note (the “6.50% Redeemable Promissory Note due 2029”). The 6.50% Redeemable Promissory Note due 2029 bears interest at a rate of 6.50% per annum, payable semi-annually in cash. The 6.50% Redeemable Promissory Note due 2029 has a maturity date of July 16, 2029, unless earlier redeemed or repaid in accordance with its terms. The Company may not prepay the 6.50% Redeemable Promissory Note due 2029 prior to its maturity date without the consent of MCP. If the Company or its subsidiaries incur indebtedness senior in right of payment to the 6.50% Redeemable Promissory Note due 2029, including any secured indebtedness, the interest rate on the outstanding principal amount of the 6.50% Redeemable Promissory Note due 2029 will increase by 0.50% per annum. From and after the occurrence of an event of default, the then-applicable interest rate will automatically increase by an additional 2.00% per annum.

Upon the occurrence of a Qualified Fundraising, as defined in the Securities Purchase Agreement, prior to its maturity date, the 6.50% Redeemable Promissory Note due 2029 will be mandatorily redeemed, without further action by the holder, through the issuance of shares of the Company’s common stock. The number of shares issued upon redemption will equal the outstanding principal amount of the 6.50% Redeemable Promissory Note due 2029 and accrued and unpaid interest thereon divided by the per-share price of the Company’s common stock sold in the Qualified Fundraising (or, if the Qualified Fundraising consists of a series of transactions, the per-share price in the latest such transaction in which the Company raised at least $5.0 million in aggregate net proceeds from purchasers that were not affiliates of the Company). A Qualified Fundraising generally consists of one or more capital raising transactions following the Company’s transition to an externally managed business development company in which the Company issues and sells only shares of its common stock to investors other than MCP investing new money in the Company for aggregate gross proceeds of at least $230.0 million, with the principal purpose of raising capital, and at a price per share not less than the Company’s then-current net asset value per share.

If the Company consummates a Change of Control, as defined in the 6.50% Redeemable Promissory Note due 2029, while the 6.50% Redeemable Promissory Note due 2029 remains outstanding, the Company is required to repay the holder in cash in an amount equal to 105% of the outstanding principal amount and accrued and unpaid interest thereon.

NEOSTELLAR CAPITAL CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2026

The table below shows a reconciliation from the aggregate principal amount of the 6.50% Redeemable Promissory Note due 2029 to the balance shown on the Condensed Consolidated Statements of Assets and Liabilities.

 SCHEDULE OF RECONCILIATION FROM AGGREGATE PRINCIPAL AMOUNT OF 6.50% REDEEMABLE NOTES DUE 2029

As of September 30, 2026, the fair value of the 6.50% Redeemable Promissory Note due 2029 was $20.0 million and was classified within Level 2 of the fair value hierarchy.