[DEFA14A] Outdoor Holding Company 8.75% Series A Cumulative Redeemable Perpetual Preferred Stock Additional Proxy Soliciting Materials

Rhea-AI Filing Summary

Prospect Capital Corporation (PSEC) intends to issue three new series of senior unsecured Prospect Capital InterNotes® under its shelf registration (File No. 333-269714):

• 7.500% Notes due 7/15/2028 (CUSIP 74348GWF3)
• 7.750% Notes due 7/15/2030 (CUSIP 74348GWG1)
• 8.000% Notes due 7/15/2032 (CUSIP 74348GWH9)

Each tranche will be sold in $1,000 denominations at modest discounts to par (selling concessions 1.125% / 1.700% / 1.950%) and will accrue interest from the 7/24/2025 settlement date, payable semi-annually on 1/15 and 7/15, commencing 1/15/2026. The notes are callable at 100% of principal beginning 1/15/2026 and daily thereafter. A Survivor’s Option allows early repayment upon the death of the beneficial owner, subject to annual volume caps.

The offering is being marketed by InspereX (purchasing agent) with Citigroup and RBC Capital Markets as agents. Net proceeds (after concessions) were not disclosed in dollar terms but will be used for general corporate purposes.

Capital structure implications: As of 2/8/2023, PSEC had $1.9 billion of unsecured senior debt and $0.7 billion of secured debt outstanding. The new issuance will add incremental fixed-rate leverage at coupons materially above the company’s prior 3.7%–6.4% public notes, signalling a higher cost of capital environment. Management recently refinanced its $342.9 million 3.706% 2026 notes—tendering $135.7 million and redeeming the remaining $207.2 million—thus eliminating that maturity but replacing it with higher-coupon paper.

Recent portfolio activity: Between May 29 and July 1, 2025, PSEC sold $324.6 million (cost basis) of subordinated structured notes for $74.6 million in gross proceeds, extended $39.6 million of first-lien financing to National Property REIT Corp. and received $19 million in repayments. On 6/30/2025 the company closed the acquisition of QC Holdings, Inc., investing $55 million in senior secured debt and $22.3 million in common equity.

Company profile: PSEC is an externally managed BDC with $7.9 billion in assets and 130 portfolio companies/CLO positions as of 12/31/2022. The performing interest-bearing portfolio yielded 12.9% (10.3% overall). The credit facility (outstanding $744.7 million on 2/8/2023) is secured and structurally senior to the new notes.

Key investor considerations:

• High coupons (7.5%-8.0%) increase interest expense but lock in fixed funding before the Federal Reserve’s next rate cycle shift.
• Notes rank pari passu with existing unsecured obligations and are effectively subordinated to secured debt.
• Indenture contains limited protective covenants; no change-of-control put or financial maintenance tests.
• Liquidity events—callable at par after 6 months—introduce reinvestment risk if rates fall.

Positive

• Extends debt maturities to 2028-2032, reducing near-term refinancing risk after retiring 2026 notes.
• Fixed coupons secure funding costs in a volatile rate environment, aiding interest-expense predictability.
• Active liability management—completed tender/redemption of older notes and opportunistic asset sales to generate liquidity.

Negative

• Higher interest expense (7.5%-8.0% coupons) increases leverage cost versus prior 3.7% notes.
• Limited covenants provide minimal protection for noteholders; notes are effectively subordinated to $0.7 billion secured debt.
• Significant realized losses on structured-note disposals ($74.6 million proceeds vs $324.6 million cost) indicate asset-valuation pressure.

Insights

Fixed-Income Analyst

TL;DR — PSEC replaces low-cost 2026 notes with 7.5-8.0% paper, boosting liquidity but raising funding costs.

The three-tranche InterNotes issuance totals an undetermined principal but will likely match or exceed the $342.9 million recently retired 3.706% 2026 notes. While the transaction smooths the maturity schedule and extends duration to 2028-2032, the coupons are more than double the retired notes, implying annual pre-tax interest outlays could rise by ~$12-14 million per $200 million issued. Given PSEC’s 12.9% loan yield and floating-rate asset mix, spread capture remains positive, yet incremental leverage tightens asset-coverage cushions. From a bondholder’s view, the call at par after only six months and the limited covenant package dilute long-term upside; however, yield-hungry investors receive investment-grade–rated senior notes from one of the largest BDCs.

BDC Sector Specialist

TL;DR — Higher coupons reflect sector-wide funding repricing; leverage and asset sales warrant monitoring.

PSEC continues to actively manage liabilities—tendering and redeeming low-coupon notes, tapping retail demand for high-yield fixed-rate debt and downsizing structured-note exposure. The QC Holdings acquisition and fresh lending to NPRC suggest management still sees attractive risk-adjusted opportunities, but the 77% realized loss on subordinated structured note sales highlights mark-to-market pressure. Net leverage will rise unless proceeds are used to pay down the revolver. Given the BDC’s scale, diversified book and statutory asset-coverage limits, the issuance is not alarming, yet the elevated coupon signals more expensive capital across the sector.

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Company Logo OUTDOOR HOLDING COMPANY 7681 E GRAY RD. SCOTTSDALE, AZ 85260 SCAN TO OUTDOOR HOLDING COMPANY7681 E GRAY RD.SCOTTSDALE, AZ 85260 SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/POWW2025 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: V76920-P35526 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY OUTDOOR HOLDING COMPANY The Board of Directors recommends you vote FOR proposals 1, 2, 3, 4, 5 and 6: 1. Director Election Proposal – to elect five directors to serve on our Board of Directors until the Company’s 2026 annual meeting of stockholders and until their successors are duly elected and qualified; Nominees: For Against Abstain 1a. Steven F. Urvan ☐ ☐ ☐ 1b. Christos Tsentas ☐ ☐ ☐ 1c. Wayne Walker ☐ ☐ ☐ 1d. Houman Akhavan ☐ ☐ ☐ 1e. David Douglas ☐ ☐ ☐ 2. Auditor Ratification Proposal – to ratify the appointment of Withum Smith & Brown, P.C. as our independent registered public accounting firm for the fiscal year ending March 31, 2026; ☐ ☐ ☐ 3. Incentive Plan Proposal – to approve the Outdoor Holding Company 2025 Long-Term Incentive Plan; ☐ ☐ ☐ 4. Warrant Share Issuance Proposal – to approve, for the purpose of complying with the applicable rules of the Nasdaq Capital Market (“Nasdaq” and such rules, the “Nasdaq Rules”), including but not limited to Nasdaq Rule 5635(b) and (d), the issuance of a warrant (the “Additional Warrant”) and the issuance of up to 13,000,000 shares of our Common Stock upon exercise of the Additional Warrant to an affiliated designee of Steven F. Urvan, Chairman of the Board and our Chief Executive Officer, pursuant to the Settlement Agreement (as defined in the accompanying Proxy Statement) that became effective on May 30, 2025; ☐ ☐ ☐ 5. Reverse Stock Split Proposal – to approve an amendment to the Company’s Amended and Restated Certificate of Incorporation to effect a reverse stock split of the Common Stock at a ratio in the range of 1-for-5 to 1-for-10 (the “Reverse Stock Split”), with the exact ratio to be determined at the discretion of the Board, to be effected at such time and date, if at all, as determined by the Board, but in any case prior to the one-year anniversary of the date on which the Reverse Stock Split is approved by the Company’s stockholders at the Annual Meeting; ☐ ☐ ☐ 6. Say-on-Pay Proposal – to approve, on an advisory basis, the compensation of the Company’s named executive officers, as described in the Proxy Statement; and ☐ ☐ ☐ The Board of Directors recommends you vote 3 Years on the following proposal: 1 Year 2 Years 3 Years Abstain 7. Say-on-Frequency Proposal – to approve, on an advisory basis, theUNITED STATES

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Preliminary Copy – Subject to Completion Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Form 10-K is available at www.proxyvote.com. ------------------------------------------------------------------------------- V76921 V76921-P35526 OUTDOOR HOLDING COMPANY 2025 Annual Meeting of Stockholders August 29, 2025 12:00 p.m. Eastern Time This proxy is solicited by the Board of Directors The stockholder(s) hereby appoint(s) Steven F. Urvan and Paul Kasowski, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of (Common/Preferred) Stock of OUTDOOR HOLDING COMPANY that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 12:00 p.m. Eastern Time, on August 29, 2025, at www.virtualshareholdermeeting.com/POWW2025, and any adjournment or postponement thereof, conferring authority upon such proxies to vote in their discretion on such other matters as may properly come before the meeting and revoking any proxy heretofore given. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted "For" each director nominee, "For" Proposals 2, 3, 4, 5 and 6, and "3 Years" for Proposal 7, in accordance with the Board of Directors' recommendations. In their discretion, the named proxies are authorized to vote on such other matters that may properly come before the meeting or any adjournment or postponement thereof. The named proxies cannot vote your shares unless you sign (on the reverse side) and return this proxy card. Continued and to be signed on reverse side

FAQ

What are the key terms of PSEC’s new 7.5%–8.0% InterNotes?

Coupons: 7.500% (2028), 7.750% (2030), 8.000% (2032); Denomination: $1,000; Pay: semi-annual; Callable: at 100% starting 1/15/2026.

How does the new debt rank within Prospect Capital’s capital structure?

The notes are senior unsecured obligations, ranking pari passu with existing unsecured notes and subordinate to $0.7 bn secured borrowings under the credit facility.

Why is Prospect Capital issuing higher-coupon notes now?

Proceeds bolster liquidity and refinance 2026 notes already redeemed; market yields have risen, so new debt prices at 7.5%–8.0%.

Does the issuance affect dividends for PSEC shareholders?

Dividend policy isn’t directly addressed; however, higher interest expense could pressure distributable income if asset yields don’t offset costs.

What recent portfolio actions were disclosed?

PSEC sold $324.6 mn (cost) of structured notes for $74.6 mn, funded $39.6 mn to NPRC, received $19 mn repayments, and acquired QC Holdings with $77.3 mn invested.

Is there an early-repayment feature for heirs?

Yes. A Survivor’s Option allows heirs to redeem notes at par, subject to annual issuer caps of the greater of $2 mn or 2% of outstanding notes.

Who are the agents on this offering?

InspereX is purchasing agent; Citigroup Global Markets and RBC Capital Markets act as agents under the Selling Agent Agreement.