10-Q 1 ea0208311-10q_saratoga.htm QUARTERLY REPORT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the Quarterly Period Ended May 31, 2024

 

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Commission File No. 814-00732

 

SARATOGA INVESTMENT CORP.

(Exact name of registrant as specified in its charter)

 

Maryland   20-8700615
(State or other jurisdiction of
incorporation or organization)		   (I.R.S. Employer
Identification Number)

 

535 Madison Avenue

New York, New York 10022

(Address of principal executive offices)

 

(212) 906-7800

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which
registered
Common Stock, par value $0.001 per share   SAR   The New York Stock Exchange
6.00% Notes due 2027   SAT   The New York Stock Exchange
8.00% Notes due 2027   SAJ   The New York Stock Exchange
8.125% Notes due 2027   SAY   The New York Stock Exchange
8.50% Notes due 2027   SAZ   The New York Stock Exchange

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes ☒   No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒   No ☐

 

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

 

Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☐
    Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

 

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

 

The number of outstanding common shares of the registrant as of July 8, 2024 was 13,745,769.

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page
PART I. FINANCIAL INFORMATION 1
     
Item 1. Consolidated Financial Statements 1
     
  Consolidated Statements of Assets and Liabilities as of May 31, 2024 (unaudited) and February 29, 2024 1
     
  Consolidated Statements of Operations for the three months ended May 31, 2024 (unaudited) and May 31, 2023 (unaudited) 2
     
  Consolidated Statements of Changes in Net Assets for three months ended May 31, 2024 (unaudited) and May 31, 2023 (unaudited) 3
     
  Consolidated Statements of Cash Flows for the three months ended May 31, 2024 (unaudited) and May 31, 2023 (unaudited) 4
     
  Consolidated Schedules of Investments as of May 31, 2024 (unaudited) and February 29, 2024 5
     
  Notes to Consolidated Financial Statements as of May 31, 2024 (unaudited) 34
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 112
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 145
     
Item 4. Controls and Procedures 146
     
PART II. OTHER INFORMATION 147
     
Item 1. Legal Proceedings 147
     
Item 1A. Risk Factors 147
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 147
     
Item 3. Defaults Upon Senior Securities 147
     
Item 4. Mine Safety Disclosures 147
     
Item 5. Other Information 147
     
Item 6. Exhibits 148
     
Signatures 150

 

i

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Consolidated Financial Statements

 

Saratoga Investment Corp.

Consolidated Statements of Assets and Liabilities

 

   May 31,
2024		   February 29,
2024		 
   (unaudited)     
ASSETS        
Investments at fair value        
Non-control/Non-affiliate investments (amortized cost of $1,018,223,820 and $1,035,879,751, respectively)  $1,016,275,510   $1,019,774,616 
Affiliate investments (amortized cost of $26,950,411 and $26,707,415, respectively)   28,593,356    27,749,137 
Control investments (amortized cost of $77,443,726 and $117,196,571, respectively)   50,690,574    91,270,036 
Total investments at fair value (amortized cost of $1,122,617,957 and $1,179,783,737, respectively)   1,095,559,440    1,138,793,789 
Cash and cash equivalents   32,228,082    8,692,846 
Cash and cash equivalents, reserve accounts   61,068,835    31,814,278 
Interest receivable (net of reserve of $10,431,823 and $9,490,340, respectively)   9,618,449    10,298,998 
Management fee receivable   335,056    343,023 
Other assets   1,686,122    1,163,225 
Current income tax receivable   15,431    99,676 
Receivable from open trade   1,269,231    - 
Total assets  $1,201,780,646   $1,191,205,835 
           
LIABILITIES          
Revolving credit facilities  $45,500,000   $35,000,000 
Deferred debt financing costs, revolving credit facilities   (1,538,040)   (882,122)
SBA debentures payable   214,000,000    214,000,000 
Deferred debt financing costs, SBA debentures payable   (5,543,363)   (5,779,892)
8.75% Notes Payable 2025   20,000,000    20,000,000 
Discount on 8.75% notes payable 2025   (87,537)   (112,894)
Deferred debt financing costs, 8.75% notes payable 2025   (3,667)   (4,777)
7.00% Notes Payable 2025   12,000,000    12,000,000 
Discount on 7.00% notes payable 2025   (162,963)   (193,175)
Deferred debt financing costs, 7.00% notes payable 2025   (20,211)   (24,210)
7.75% Notes Payable 2025   5,000,000    5,000,000 
Deferred debt financing costs, 7.75% notes payable 2025   (60,707)   (74,531)
4.375% Notes Payable 2026   175,000,000    175,000,000 
Premium on 4.375% notes payable 2026   502,419    564,260 
Deferred debt financing costs, 4.375% notes payable 2026   (1,495,746)   (1,708,104)
4.35% Notes Payable 2027   75,000,000    75,000,000 
Discount on 4.35% notes payable 2027   (283,594)   (313,010)
Deferred debt financing costs, 4.35% notes payable 2027   (946,373)   (1,033,178)
6.25% Notes Payable 2027   15,000,000    15,000,000 
Deferred debt financing costs, 6.25% notes payable 2027   (255,476)   (273,449)
6.00% Notes Payable 2027   105,500,000    105,500,000 
Discount on 6.00% notes payable 2027   (114,881)   (123,782)
Deferred debt financing costs, 6.00% notes payable 2027   (2,047,886)   (2,224,403)
8.00% Notes Payable 2027   46,000,000    46,000,000 
Deferred debt financing costs, 8.00% notes payable 2027   (1,186,999)   (1,274,455)
8.125% Notes Payable 2027   60,375,000    60,375,000 
Deferred debt financing costs, 8.125% notes payable 2027   (1,460,917)   (1,563,594)
8.50% Notes Payable 2028   57,500,000    57,500,000 
Deferred debt financing costs, 8.50% notes payable 2028   (1,577,477)   (1,680,039)
Base management and incentive fees payable   8,567,315    8,147,217 
Deferred tax liability   4,136,772    3,791,150 
Accounts payable and accrued expenses   1,324,378    1,337,542 
Interest and debt fees payable   4,935,426    3,582,173 
Due to Manager   370,091    450,000 
Total liabilities   833,925,564    820,981,727 
           
Commitments and contingencies (See Note 9)   
 
    
 
 
           
NET ASSETS          
Common stock, par value $0.001, 100,000,000 common shares authorized, 13,698,966 and 13,653,476 common shares issued and outstanding, respectively   13,699    13,654 
Capital in excess of par value   372,068,726    371,081,199 
Total distributable deficit   (4,227,343)   (870,745)
Total net assets   367,855,082    370,224,108 
Total liabilities and net assets  $1,201,780,646   $1,191,205,835 
NET ASSET VALUE PER SHARE  $26.85   $27.12 

 

See accompanying notes to consolidated financial statements.

 

1

 

 

Saratoga Investment Corp.

Consolidated Statements of Operations

(unaudited)

 

   For the three months ended 
   May 31,
2024		   May 31,
2023		 
INVESTMENT INCOME        
Interest from investments        
Interest income:        
Non-control/Non-affiliate investments  $31,224,277   $26,310,793 
Affiliate investments   496,840    727,086 
Control investments   1,997,112    2,045,860 
Payment in kind interest income:        - 
Non-control/Non-affiliate investments   63,830    124,895 
Affiliate investments   241,104    207,589 
Control investments   283,313    141,563 
Total interest from investments   34,306,476    29,557,786 
Interest from cash and cash equivalents   624,631    804,289 
Management fee income   804,456    816,788 
Dividend income(*):          
Non-control/Non-affiliate investments   249,491    17,420 
Control investments   1,297,050    1,823,510 
Total dividend from investments   1,546,541    1,840,930 
Structuring and advisory fee income   410,843    1,429,222 
Other income   985,203    183,028 
Total investment income   38,678,150    34,632,043 
           
OPERATING EXPENSES          
Interest and debt financing expenses   12,962,081    11,692,822 
Base management fees   4,982,580    4,564,189 
Incentive management fees expense (benefit)   3,584,734    103,348 
Professional fees   999,310    486,050 
Administrator expenses   1,075,000    818,750 
Insurance   77,596    81,901 
Directors fees and expenses   113,000    89,068 
General and administrative   609,127    830,728 
Income tax expense (benefit)   (60,283)   6,237 
Total operating expenses   24,343,145    18,673,093 
NET INVESTMENT INCOME   14,335,005    15,958,950 
           
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS          
Net realized gain (loss) from investments:          
Non-control/Non-affiliate investments   
-
    90,691 
Control investments   (21,194,997)   
-
 
Net realized gain (loss) from investments   (21,194,997)   90,691 
Net change in unrealized appreciation (depreciation) on investments:          
Non-control/Non-affiliate investments   14,156,825    (1,728,134)
Affiliate investments   601,223    (245,284)
Control investments   (826,617)   (14,348,889)
Net change in unrealized appreciation (depreciation) on investments   13,931,431    (16,322,307)
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments   (461,001)   59,407 
Net realized and unrealized gain (loss) on investments   (7,724,567)   (16,172,209)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS  $6,610,438   $(213,259)
           
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE
  $0.48   $(0.02)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED
   13,683,314    11,862,163 

 

*Certain prior period amounts have been reclassified to conform to current period presentation.

 

See accompanying notes to consolidated financial statements.

 

2

 

 

Saratoga Investment Corp.

Consolidated Statements of Changes in Net Assets

(unaudited)

 

   For the three months ended 
   May 31,
2024		   May 31,
2023		 
DECREASE FROM OPERATIONS:        
Net investment income  $14,335,005   $15,958,950 
Net realized gain (loss) from investments   (21,194,997)   90,691 
Net change in unrealized appreciation (depreciation) on investments   13,931,431    (16,322,307)
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments   (461,001)   59,407 
Net increase (decrease) in net assets resulting from operations   6,610,438    (213,259)
           
DECREASE FROM SHAREHOLDER DISTRIBUTIONS:          
Total distributions to shareholders   (9,967,036)   (8,193,402)
Net decrease in net assets from shareholder distributions   (9,967,036)   (8,193,402)
           
CAPITAL SHARE TRANSACTIONS:          
Stock dividend distribution   987,572    1,058,844 
Repurchases of common stock   
-
    (2,157,605)
Repurchase fees   
-
    (1,772)
Net increase (decrease) in net assets from capital share transactions   987,572    (1,100,533)
Total decrease in net assets   (2,369,026)   (9,507,194)
Net assets at beginning of period   370,224,108    346,958,042 
Net assets at end of period  $367,855,082   $337,450,848 

 

See accompanying notes to consolidated financial statements.

 

3

 

 

Saratoga Investment Corp.

Consolidated Statements of Cash Flows

(unaudited)

 

   For the three months ended 
   May 31,
2024		   May 31,
2023		 
Operating activities        
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS  $6,610,438   $(213,259)
ADJUSTMENTS TO RECONCILE NET INCREASE (DECREASE) IN NET ASSETS RESULTING          
FROM OPERATIONS TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:          
Payment-in-kind and other adjustments to cost   383,131    1,473,779 
Net accretion of discount on investments   (814,013)   (461,543)
Amortization of deferred debt financing costs   1,238,632    1,220,162 
Income tax expense (benefit)   (60,283)   6,237 
Net realized (gain) loss from investments   21,194,997    (90,691)
Net change in unrealized (appreciation) depreciation on investments   (13,931,431)   16,322,307 
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments   461,001    (59,407)
Proceeds from sales and repayments of investments   75,702,723    11,067,194 
Purchases of investments   (39,301,058)   (139,818,921)
(Increase) decrease in operating assets:          
Interest receivable   680,549    328,202 
Management fee receivable   7,967    1,783 
Other assets   (522,897)   (136,569)
Receivable from open trades   (1,269,231)   
-
 
Current income tax receivable   84,245    336,875 
Increase (decrease) in operating liabilities:          
Base management and incentive fees payable   420,098    (2,490,034)
Accounts payable and accrued expenses   (13,164)   434,280 
Interest and debt fees payable   1,353,253    832,931 
Directors fees payable   
-
    (14,932)
Due to Manager   (79,909)   348,138 
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES   52,145,048    (110,913,468)
           
Financing activities          
Borrowings on debt   23,000,000    32,500,000 
Paydowns on debt   (12,500,000)   (30,000,000)
Issuance of notes   
-
    77,500,000 
Payments of deferred debt financing costs   (875,791)   (2,715,705)
Payments of cash dividends   (8,979,464)   (7,134,558)
Repurchases of common stock   
-
    (2,157,605)
Repurchases fees   
-
    (1,772)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES   644,745    67,990,360 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS   52,789,793    (42,923,108)
CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS, BEGINNING OF PERIOD   40,507,124    96,076,273 
CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS, END OF PERIOD (See note 2)  $93,296,917   $53,153,165 
           
Supplemental information:          
Interest paid during the period  $10,370,196   $9,639,729 
Cash paid for taxes   54,821    300 
Supplemental non-cash information:          
Payment-in-kind interest income and other adjustments to cost   (383,131)   (1,473,779)
Net accretion of discount on investments   814,013    461,543 
Amortization of deferred debt financing costs   1,238,632    1,220,162 
Stock dividend distribution   987,572    1,058,844 

 

See accompanying notes to consolidated financial statements.

 

4

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

May 31, 2024

(unaudited)

 

Company(1)  Industry  Investment Interest Rate/
Maturity		  Original Acquisition Date  Principal/
Number of Shares		   Cost   Fair Value (c)   % of
Net Assets		 
Non-control/Non-affiliate investments - 276.3% (b)                             
Altvia MidCo, LLC.  Alternative Investment Management Software  First Lien Term Loan
(3M USD TERM SOFR+8.50%), 13.84% Cash, 7/18/2027		  7/18/2022  $7,880,000   $7,824,927   $7,902,852    2.1%
Altvia MidCo, LLC. (h)  Alternative Investment Management Software  Series A-1 Preferred Shares  7/18/2022   2,000,000    2,000,000    2,644,222    0.7%
      Total Alternative Investment Management Software           9,824,927    10,547,074    2.8%
BQE Software, Inc.  Architecture & Engineering Software  First Lien Term Loan
(3M USD TERM SOFR+6.75%), 12.09% Cash, 4/13/2028		  4/13/2023  $24,500,000    24,291,548    24,779,300    6.7%
BQE Software, Inc. (j)  Architecture & Engineering Software  Delayed Draw Term Loan
(3M USD TERM SOFR+6.75%), 12.09% Cash, 4/13/2028		  4/13/2023  $750,000    743,821    758,550    0.2%
      Total Architecture & Engineering Software           25,035,369    25,537,850    6.9%
GrowthZone, LLC  Association Management Software  First Lien Term Loan
(3M USD TERM SOFR+8.25%), 13.59% Cash, 5/10/2028		  5/10/2023  $23,454,023    23,108,890    23,951,248    6.5%
Golden TopCo LP (h)  Association Management Software  Class A-2 Common Units  5/10/2023   1,072,394    1,072,394    1,250,308    0.3%
      Total Association Management Software           24,181,284    25,201,556    6.8%
Artemis Wax Corp. (d)(j)  Consumer Services  Delayed Draw Term Loan
(1M USD TERM SOFR+7.5%), 12.83% Cash, 5/20/2026		  5/20/2021  $57,500,000    57,253,350    58,040,500    15.8%
Artemis Wax Corp. (h)  Consumer Services  Series B-1 Preferred Stock  5/20/2021   934,463    1,500,000    3,447,326    0.9%
Artemis Wax Corp. (h)  Consumer Services  Series D Preferred Stock  12/22/2022   290,595    1,500,000    1,766,120    0.5%
      Total Consumer Services           60,253,350    63,253,946    17.2%
Schoox, Inc. (h), (i)  Corporate Education Software  Series 1 Membership Interest  12/8/2020   1,050    475,698    4,447,058    1.2%
      Total Corporate Education Software           475,698    4,447,058    1.2%
GreyHeller LLC (h)  Cyber Security  Common Stock  11/10/2021   7,857,689    1,906,275    3,082,324    0.8%
      Total Cyber Security           1,906,275    3,082,324    0.8%

 

5

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

May 31, 2024

(unaudited)

 

Company(1)  Industry  Investment Interest Rate/
Maturity		  Original Acquisition Date  Principal/
Number of Shares		   Cost   Fair Value (c)   % of
Net Assets		 
Gen4 Dental Partners Holdings, LLC (j)  Dental Practice Management  Delayed Draw Term Loan
(3M USD TERM SOFR+5.50%), 10.84% Cash, 5/13/2030		  5/14/2024  $7,142,857    7,071,642    7,071,429    1.9%
Gen4 Dental Partners Holdings, LLC (j)  Dental Practice Management  Revolving Credit Facility
(3M USD TERM SOFR+5.50%), 10.84% Cash, 5/13/2030		  5/14/2024  $-    -    -    0.0%
Gen4 Dental Partners Holdings, LLC (h)(i)  Dental Practice Management  Series A Preferred Units  2/8/2023   493,999    1,027,519    1,136,198    0.3%
Modis Dental Partners OpCo, LLC  Dental Practice Management  First Lien Term Loan
(1M USD TERM SOFR+9.46%), 14.79% Cash, 4/18/2028		  4/18/2023  $7,000,000    6,911,107    7,140,000    1.9%
Modis Dental Partners OpCo, LLC  Dental Practice Management  Delayed Draw Term Loan
(1M USD TERM SOFR+9.46%), 14.79% Cash, 4/18/2028		  4/18/2023  $7,500,000    7,397,705    7,650,000    2.1%
Modis Dental Partners OpCo, LLC (h)  Dental Practice Management  Class A Preferred Units  4/18/2023   2,950,000    2,950,000    2,950,000    0.8%
New England Dental Partners  Dental Practice Management  First Lien Term Loan
(3M USD TERM SOFR+8.00%), 13.49% Cash, 11/25/2025		  11/25/2020  $6,555,000    6,532,838    6,547,790    1.8%
New England Dental Partners  Dental Practice Management  Delayed Draw Term Loan
(3M USD TERM SOFR+8.00%), 13.49% Cash, 11/25/2025		  11/25/2020  $2,150,000    2,145,549    2,147,635    0.6%
      Total Dental Practice Management           34,036,360    34,643,052    9.4%
Exigo, LLC (d)  Direct Selling Software  First Lien Term Loan
(1M USD TERM SOFR+6.25%), 11.68% Cash, 3/16/2027		  3/16/2022  $24,251,269    24,118,453    23,465,528    6.4%
Exigo, LLC (j)  Direct Selling Software  Revolving Credit Facility
(1M USD TERM SOFR+6.25%), 11.68% Cash, 3/16/2027		  3/16/2022  $-    -    (20,250)   0.0%
Exigo, LLC (h), (i)  Direct Selling Software  Common Units  3/16/2022   1,041,667    1,041,667    952,614    0.3%
      Total Direct Selling Software           25,160,120    24,397,892    6.7%
C2 Educational Systems, Inc. (d)  Education Services  First Lien Term Loan
(3M USD TERM SOFR+8.50%), 13.84% Cash, 5/31/2025		  5/31/2017  $23,000,000    22,971,587    22,933,300    6.2%
C2 Educational Systems, Inc. (j)  Education Services  Delayed Draw Term Loan
(3M USD TERM SOFR+8.50%), 13.84% Cash, 5/31/2025		  4/28/2023  $-    -    -    0.0%
C2 Education Systems, Inc. (h)  Education Services  Series A-1 Preferred Stock  5/18/2021   3,127    499,904    583,479    0.2%
      Total Education Services           23,471,491    23,516,779    6.4%

 

6

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

May 31, 2024

(unaudited)

 

Company(1)  Industry  Investment Interest Rate/
Maturity		  Original Acquisition Date  Principal/
Number of Shares		   Cost   Fair Value (c)   % of
Net Assets		 
Modern Campus (fka Destiny Solutions Inc.) (h)(i)  Education Software  Limited Partner Interests  5/16/2018   3,068    3,969,291    10,309,787    2.8%
GoReact  Education Software  First Lien Term Loan
(3M USD TERM SOFR+7.50%), 13.04% Cash/1.00% PIK, 1/17/2025		  1/17/2020  $8,108,461    8,090,146    8,108,461    2.2%
GoReact (j)  Education Software  Delayed Draw Term Loan
(3M USD TERM SOFR+7.50%), 13.04% Cash/1.00% PIK, 1/17/2025		  1/18/2022  $1,501,528    1,501,528    1,501,528    0.4%
Identity Automation Systems (h)  Education Software  Common Stock Class A-2 Units  8/25/2014   232,616    232,616    548,824    0.1%
Identity Automation Systems (h)  Education Software  Common Stock Class A-1 Units  3/6/2020   43,715    171,571    240,035    0.1%
Ready Education  Education Software  First Lien Term Loan
(3M USD TERM SOFR+7.00%), 12.34% Cash, 8/5/2027		  8/5/2022  $27,000,000    26,810,487    26,908,200    7.3%
      Total Education Software           40,775,639    47,616,835    12.9%
TG Pressure Washing Holdings, LLC (h)  Facilities Maintenance  Preferred Equity  8/12/2019   488,148    488,148    166,545    0.0%
      Total Facilities Maintenance           488,148    166,545    0.0%
Davisware, LLC  Field Service Management  First Lien Term Loan
(3M USD TERM SOFR+7.00%), 12.34% Cash, 7/31/2024		  9/6/2019  $6,000,000    5,997,322    5,990,400    1.6%
Davisware, LLC  Field Service Management  Delayed Draw Term Loan
(3M USD TERM SOFR+7.00%), 12.34% Cash, 7/31/2024		  9/6/2019  $5,477,790    5,474,844    5,469,026    1.5%
      Total Field Service Management           11,472,166    11,459,426    3.1%
GDS Software Holdings, LLC  Financial Services  First Lien Term Loan
(3M USD TERM SOFR+7.00%), 12.34% Cash, 12/30/2026		  12/30/2021  $22,713,926    22,629,328    22,734,369    6.2%
GDS Software Holdings, LLC (d)  Financial Services  Delayed Draw Term Loan
(3M USD TERM SOFR+7.00%), 12.34% Cash, 12/30/2026		  12/30/2021  $3,286,074    3,263,321    3,289,031    0.9%
GDS Software Holdings, LLC  (h)  Financial Services  Common Stock Class A Units  8/23/2018   250,000    250,000    515,832    0.1%
      Total Financial Services           26,142,649    26,539,232    7.2%
Ascend Software, LLC  Financial Services Software  First Lien Term Loan
(3M USD TERM SOFR+7.50%), 13.10% Cash, 12/15/2026		  12/15/2021  $6,000,000    5,965,778    5,944,200    1.6%
Ascend Software, LLC (j)  Financial Services Software  Delayed Draw Term Loan
(3M USD TERM SOFR+7.50%), 13.10% Cash, 12/15/2026		  12/15/2021  $4,050,000    4,031,912    4,012,335    1.1%
      Total Financial Services Software           9,997,690    9,956,535    2.7%

 

7

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

May 31, 2024

(unaudited)

 

Company(1)  Industry  Investment Interest Rate/
Maturity		  Original Acquisition Date  Principal/
Number of Shares		   Cost   Fair Value (c)   % of
Net Assets		 
Inspect Point Holdings, LLC  Fire Inspection Business Software  First Lien Term Loan
(1M USD TERM SOFR+6.50%), 11.83% Cash, 07/19/2028		  7/19/2023  $10,000,000    9,912,373    10,041,000    2.7%
Inspect Point Holdings, LLC (j)  Fire Inspection Business Software  First Lien Term Loan
(1M USD TERM SOFR+6.50%), 11.83% Cash, 07/19/2028		  7/19/2023  $-    -    -    0.0%
      Total Fire Inspection Business Software           9,912,373    10,041,000    2.7%
Stretch Zone Franchising, LLC (d)  Health/Fitness Franchisor  First Lien Term Loan
(3M USD TERM SOFR+7.00%), 12.34% Cash, 3/31/2028		  3/31/2023  $28,717,271    28,476,909    28,817,782    7.8%
Stretch Zone Franchising, LLC (j)  Health/Fitness Franchisor  Delayed Draw Term Loan
(3M USD TERM SOFR+7.00%), 12.34% Cash, 3/31/2028		  3/31/2023  $-    -    -    0.0%
Stretch Zone Franchising, LLC (h)  Health/Fitness Franchisor  Class A Units  3/31/2023   20,000    2,000,000    2,187,884    0.6%
      Total Health/Fitness Franchisor           30,476,909    31,005,666    8.4%
Alpha Aesthetics Partners OpCo, LLC  Healthcare Services  First Lien Term Loan
(1M USD TERM SOFR+9.97%), 15.30% Cash, 3/20/2028		  3/20/2023  $3,900,000    3,850,544    3,978,000    1.2%
Alpha Aesthetics Partners OpCo, LLC (j)  Healthcare Services  Delayed Draw Term Loan
(1M USD TERM SOFR+9.97%), 15.30% Cash, 3/20/2028		  3/20/2023  $-    11,045,323    11,421,705    3.1%
Alpha Aesthetics Partners OpCo, LLC (h)  Healthcare Services  Class A Preferred Units  3/20/2023   3,175,000    3,175,000    3,608,107    1.0%
Axiom Medical Consulting, LLC  Healthcare Services  First Lien Term Loan
(3M USD TERM SOFR+6.00%), 11.34% Cash, 9/11/2028		  9/11/2023  $10,000,000    9,920,100    9,963,000    2.7%
Axiom Medical Consulting, LLC (j)  Healthcare Services  Delayed Draw Term Loan
(3M USD TERM SOFR+6.00%), 11.34% Cash, 9/11/2028		  9/11/2023  $-    -    -    0.0%
Axiom Parent Holdings, LLC (h)  Healthcare Services  Class A Preferred Units  6/19/2018   400,000    258,389    496,904    0.1%
ComForCare Health Care (d)  Healthcare Services  First Lien Term Loan
(3M USD TERM SOFR+6.25%), 11.59% Cash, 12/31/2027		  1/31/2017  $39,000,000    38,848,168    39,171,600    10.6%
      Total Healthcare Services           67,097,524    68,639,316    18.7%

 

8

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

May 31, 2024

(unaudited)

 

Company(1)  Industry  Investment Interest Rate/
Maturity		  Original Acquisition Date  Principal/
Number of Shares		   Cost   Fair Value (c)   % of
Net Assets		 
Invita (fka HemaTerra Holding Company, LLC) (d)  Healthcare Software  First Lien Term Loan
(1M USD TERM SOFR+8.25%), 13.58% Cash, 1/31/2027		  4/15/2019  $54,788,655    54,511,745    54,947,542    14.9%
Invita (fka HemaTerra Holding Company, LLC)  Healthcare Software  Delayed Draw Term Loan
(1M USD TERM SOFR+8.25%), 13.58% Cash, 1/31/2027		  4/15/2019  $13,721,050    13,680,818    13,760,841    3.7%
Invita (fka TRC HemaTerra, LLC) (h)  Healthcare Software  Class D Membership Interests  4/15/2019   2,487    2,816,693    5,576,006    1.5%
Procurement Partners, LLC  Healthcare Software  First Lien Term Loan
(3M USD TERM SOFR+6.50%), 11.84% Cash, 5/12/2026		  11/12/2020  $35,125,000    34,984,808    35,125,000    9.5%
Procurement Partners, LLC (j)  Healthcare Software  Delayed Draw Term Loan
(3M USD TERM SOFR+6.50%), 11.84% Cash, 5/12/2026		  11/12/2020  $10,300,000    10,237,810    10,300,000    2.8%
Procurement Partners Holdings LLC (h)  Healthcare Software  Class A Units  11/12/2020   571,219    571,219    786,681    0.2%
      Total Healthcare Software           116,803,093    120,496,070    32.6%
Roscoe Medical, Inc. (h)  Healthcare Supply  Common Stock  3/26/2014   5,081    508,077    -    0.0%
      Total Healthcare Supply           508,077    -    0.0%
Book4Time, Inc. (a)(d)  Hospitality/Hotel  First Lien Term Loan
(3M USD TERM SOFR+7.50%), 12.84%, 12/22/2025		  12/22/2020  $3,136,517    3,125,220    3,136,517    0.9%
Book4Time, Inc. (a)(d)  Hospitality/Hotel  Delayed Draw Term Loan
(3M USD TERM SOFR+7.50%), 12.84%, 12/22/2025		  12/22/2020  $2,000,000    1,991,253    2,000,000    0.5%
Book4Time, Inc. (a)(h)(i)  Hospitality/Hotel  Class A Preferred Shares  12/22/2020   200,000    156,826    404,325    0.1%
Knowland Group, LLC (k)  Hospitality/Hotel  Second Lien Term Loan
(3M USD TERM SOFR+8.00%), 13.49% Cash/3.00% PIK, 12/31/2024		  11/9/2018  $15,878,989    15,878,989    12,692,076    3.5%
      Total Hospitality/Hotel           21,152,288    18,232,918    5.0%
Granite Comfort, LP (d)  HVAC Services and Sales  First Lien Term Loan
(3M USD TERM SOFR+7.43%), 12.77% Cash, 5/16/2027		  11/16/2020  $43,000,000    42,801,641    42,991,400    11.7%
Granite Comfort, LP (j)(d)  HVAC Services and Sales  Delayed Draw Term Loan
(3M USD TERM SOFR+7.43%), 12.77% Cash, 5/16/2027		  11/16/2020  $16,207,805    16,069,414    16,204,563    4.4%
      Total HVAC Services and Sales           58,871,055    59,195,963    16.1%

 

9

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

May 31, 2024

(unaudited)

 

Company(1)  Industry  Investment Interest Rate/
Maturity		  Original Acquisition Date  Principal/
Number of Shares		   Cost   Fair Value (c)   % of
Net Assets		 
Vector Controls Holding Co., LLC (d)  Industrial Products  First Lien Term Loan
(3M USD TERM SOFR+6.50%), 11.75% Cash, 3/6/2025		  3/6/2013  $923,886    923,886    923,886    0.3%
Vector Controls Holding Co., LLC (h)  Industrial Products  Warrants to Purchase Limited Liability Company Interests, Expires 11/30/2027  5/31/2015   343    -    8,151,341    2.2%
      Total Industrial Products           923,886    9,075,227    2.5%
AgencyBloc, LLC  Insurance Software  First Lien Term Loan
(3M USD TERM SOFR+7.76%), 13.11% Cash, 10/1/2026		  10/1/2021  $15,755,114    15,665,476    15,772,444    4.3%
Panther ParentCo LLC (h)  Insurance Software  Class A Units  10/1/2021   2,500,000    2,500,000    4,132,491    1.1%
      Total Insurance Software           18,165,476    19,904,935    5.4%
LogicMonitor, Inc. (d)  IT Services  First Lien Term Loan
(3M USD TERM SOFR+6.50%), 11.84% Cash, 5/17/2026		  3/20/2020  $43,000,000    42,967,165    43,000,000    11.7%
      Total IT Services           42,967,165    43,000,000    11.7%
ActiveProspect, Inc. (d)  Lead Management Software  First Lien Term Loan
(3M USD TERM SOFR+6.00%), 11.54% Cash, 8/8/2027		  8/8/2022  $12,000,000    11,925,329    12,120,000    3.3%
ActiveProspect, Inc. (j)  Lead Management Software  Delayed Draw Term Loan
(3M USD TERM SOFR+6.00%), 11.54% Cash, 8/8/2027		  8/8/2022  $-    -    -    0.0%
      Total Lead Management Software           11,925,329    12,120,000    3.3%
Centerbase, LLC  Legal Software  First Lien Term Loan
(3M USD TERM SOFR+8.52%), 13.96% Cash, 1/18/2027		  1/18/2022  $20,979,840    20,843,046    20,862,353    5.7%
      Total Legal Software           20,843,046    20,862,353    5.7%
Madison Logic, Inc. (d)  Marketing Orchestration Software  First Lien Term Loan
(3M USD TERM SOFR+7.00%), 12.34% Cash, 12/30/2028		  12/30/2022  $18,810,000    18,513,917    18,381,132    5.0%
      Total Marketing Orchestration Software           18,513,917    18,381,132    5.0%
ARC Health OpCo LLC (d)  Mental Healthcare Services  First Lien Term Loan
(3M USD TERM SOFR+8.44%), 13.78% Cash, 8/5/2027		  8/5/2022  $6,500,000    6,441,803    6,419,400    1.7%
ARC Health OpCo LLC (d)  Mental Healthcare Services  Delayed Draw Term Loan
(3M USD TERM SOFR+8.44%), 13.78% Cash, 8/5/2027		  8/5/2022  $26,914,577    26,901,549    26,564,515    7.2%
ARC Health OpCo LLC (h)  Mental Healthcare Services  Class A Preferred Units  8/5/2022   3,818,400    4,169,599    2,405,592    0.7%
      Total Mental Healthcare Services           37,512,951    35,389,507    9.6%

 

10

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

May 31, 2024

(unaudited)

 

Company(1)  Industry  Investment Interest Rate/
Maturity		  Original Acquisition Date  Principal/
Number of Shares		   Cost   Fair Value (c)   % of
Net Assets		 
Chronus LLC  Mentoring Software  First Lien Term Loan
(3M USD TERM SOFR+5.25%), 10.74% Cash, 8/26/2026		  8/26/2021  $15,000,000    14,921,202    14,959,500    4.1%
Chronus LLC (d)  Mentoring Software  First Lien Term Loan
(3M USD TERM SOFR+6.00%), 11.49% Cash, 8/26/2026		  8/26/2021  $5,000,000    4,965,481    4,986,500    1.4%
Chronus LLC (h)  Mentoring Software  Series A Preferred Stock  8/26/2021   3,000    3,000,000    2,262,537    0.6%
      Total Mentoring Software           22,886,683    22,208,537    6.1%
Omatic Software, LLC  Non-profit Services  First Lien Term Loan
(3M USD TERM SOFR+8.00%), 13.60% Cash/1.00% PIK, 6/30/2025		  5/29/2018  $16,311,806    16,286,276    16,346,061    4.4%
      Total Non-profit Services           16,286,276    16,346,061    4.4%
Emily Street Enterprises, L.L.C. (d)  Office Supplies  Senior Secured Note
(3M USD TERM SOFR+7.50%), 12.84% Cash, 12/31/2025		  12/28/2012  $6,000,000    5,992,973    6,027,000    1.6%
Emily Street Enterprises, L.L.C. (h)  Office Supplies  Warrant Membership Interests,                          
Expires 12/31/2025		  12/28/2012   49,318    400,000    1,272,566    0.3%
      Total Office Supplies           6,392,973    7,299,566    1.9%
Buildout, Inc. (d)  Real Estate Services  First Lien Term Loan
(3M USD TERM SOFR+7.00%), 12.44% Cash, 7/9/2025		  7/9/2020  $14,000,000    13,958,951    13,633,200    3.7%
Buildout, Inc.  Real Estate Services  Delayed Draw Term Loan
(3M USD TERM SOFR+7.00%), 12.44% Cash, 7/9/2025		  2/12/2021  $38,500,000    38,370,244    37,491,300    10.2%
Buildout, Inc. (h)(i)  Real Estate Services  Limited Partner Interests  7/9/2020   1,250    1,372,557    1,231,050    0.3%
      Total Real Estate Services           53,701,752    52,355,550    14.2%
Wellspring Worldwide Inc.  Research Software  First Lien Term Loan
(1M USD TERM SOFR+8.42%), 13.75% Cash, 12/22/2028		  6/27/2022  $9,552,000    9,476,791    9,483,226    2.6%
Wellspring Worldwide Inc.  Research Software  Delayed DrawTerm Loan
(3M USD TERM SOFR+8.42%), 13.76% Cash, 12/22/2028		  6/27/2022  $14,400,000    14,234,960    14,296,320    3.9%
Archimedes Parent LLC (h)  Research Software  Class A Common Units  6/27/2022   2,475,160    2,475,160    2,475,160    0.7%
      Total Research Software           26,186,911    26,254,706    7.2%

 

11

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

May 31, 2024

(unaudited)

 

Company(1)  Industry  Investment Interest Rate/
Maturity		  Original Acquisition Date  Principal/
Number of Shares		   Cost   Fair Value (c)   % of
Net Assets		 
LFR Chicken LLC  Restaurant  First Lien Term Loan
(1M USD TERM SOFR+7.00%), 12.33% Cash, 11/19/2026		  11/19/2021  $12,000,000    11,935,502    12,120,000    3.3%
LFR Chicken LLC (j)  Restaurant  Delayed Draw Term Loan
(1M USD TERM SOFR+7.00%), 12.33% Cash, 11/19/2026		  11/19/2021  $18,000,000    17,848,951    18,180,000    4.9%
LFR Chicken LLC (h)  Restaurant  Series B Preferred Units  11/19/2021   497,183    1,000,000    1,222,352    0.3%
      Total Restaurant           30,784,453    31,522,352    8.5%
JobNimbus LLC  Roofing Contractor Software  First Lien Term Loan
(3M USD TERM SOFR+8.75%), 14.24% Cash, 9/20/2026		  3/28/2023  $18,730,453    18,587,961    18,908,392    5.1%
      Total Roofing Contractor Software           18,587,961    18,908,392    5.1%
Pepper Palace, Inc. (d)(k)  Specialty Food Retailer  First Lien Term Loan
(3M USD TERM SOFR+6.25%), 11.74% Cash, 6/30/2026		  6/30/2021  $33,320,000    33,166,709    2,289,084    0.6%
Pepper Palace, Inc. (j)(k)  Specialty Food Retailer  Delayed Draw Term Loan
(3M USD TERM SOFR+6.25%), 11.74% Cash, 6/30/2026		  6/30/2021  $1,601,600    1,593,684    110,030    0.0%
Pepper Palace, Inc. (j)(k)  Specialty Food Retailer  Revolving Credit Facility
(3M USD TERM SOFR+6.25%), 11.74% Cash, 6/30/2026		  6/30/2021  $-    -    -    0.0%
Pepper Palace, Inc. (h)  Specialty Food Retailer  Membership Interest (Series A)  6/30/2021   1,000,000    1,000,000    -    0.0%
Pepper Palace, Inc. (h)  Specialty Food Retailer  Membership Interest (Series B)  6/30/2021   197,035    197,035    -    0.0%
      Total Specialty Food Retailer           35,957,428    2,399,114    0.6%
ArbiterSports, LLC (d)  Sports Management  First Lien Term Loan
(3M USD TERM SOFR+6.00%), 11.34% Cash, 2/21/2025		  2/21/2020  $26,000,000    25,966,955    26,000,000    7.1%
ArbiterSports, LLC  Sports Management  Delayed Draw Term Loan
(3M USD TERM SOFR+6.00%), 11.34% Cash, 2/21/2025		  2/21/2020  $-    1,000,000    1,000,000    0.3%
      Total Sports Management           26,966,955    27,000,000    7.4%

 

12

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

May 31, 2024

(unaudited)

 

Company(1)  Industry  Investment Interest Rate/
Maturity		  Original Acquisition Date  Principal/
Number of Shares		   Cost   Fair Value
(c)		   % of
Net Assets		 
Avionte Holdings, LLC (h)  Staffing Services  Class A Units  1/8/2014   100,000    100,000    3,523,559    1.0%
      Total Staffing Services           100,000    3,523,559    1.0%
JDXpert  Talent Acquisition Software  First Lien Term Loan
(3M USD TERM SOFR+8.50%), 14.10% Cash, 5/2/2027		  5/2/2022  $6,000,000    5,958,724    6,060,000    1.6%
JDXpert (j)  Talent Acquisition Software  Delayed Draw Term Loan
(3M USD TERM SOFR+8.50%), 14.10% Cash, 5/2/2027		  5/2/2022  $1,000,000    992,073    1,010,000    0.3%
Jobvite, Inc. (d)  Talent Acquisition Software  First Lien Term Loan
(6M USD TERM SOFR+8.00%), 13.31% Cash, 8/5/2028		  8/5/2022  $20,000,000    19,887,312    19,982,000    5.9%
      Total Talent Acquisition Software           26,838,109    27,052,000    7.8%
VetnCare MSO, LLC (j)  Veterinary Services  Delayed Draw Term Loan
(3M USD TERM SOFR+5.75%), 11.09% Cash, 5/12/2028		  5/12/2023  $4,680,505    4,640,064    4,695,482    1.3%
      Total Veterinary Services           4,640,064    4,695,482    1.3%
Sub Total Non-control/Non-affiliate investments                 1,018,223,820    1,016,275,510    276.3%
Affiliate investments - 7.8% (b)                             

 

13

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

May 31, 2024

(unaudited)

 

Company(1)  Industry  Investment Interest Rate/
Maturity		  Original Acquisition Date  Principal/
Number of Shares		   Cost   Fair Value (c)   % of
Net Assets		 
ETU Holdings, Inc. (f)  Corporate Education Software  First Lien Term Loan
(3M USD TERM SOFR+9.00%), 14.49% Cash, 8/18/2027		  8/18/2022  $7,000,000    6,950,096    6,988,800    1.9%
ETU Holdings, Inc. (f)  Corporate Education Software  Second Lien Term Loan
15.00% PIK, 2/18/2028		  8/18/2022  $6,362,930    6,324,373    5,694,822    1.5%
ETU Holdings, Inc. (f)(h)  Corporate Education Software  Series A Preferred Units  8/18/2022   3,000,000    3,000,000    813,571    0.2%
      Total Corporate Education Software           16,274,469    13,497,193    3.6%
Axero Holdings, LLC (f)  Employee Collaboration Software  First Lien Term Loan
(3M USD TERM SOFR+8.00%), 13.49% Cash, 6/30/2026		  6/30/2021  $5,500,000    5,471,285    5,500,000    1.5%
Axero Holdings, LLC (f)  Employee Collaboration Software  Delayed Draw Term Loan
(3M USD TERM SOFR+8.00%), 13.49% Cash, 6/30/2026		  6/30/2021  $1,100,000    1,093,439    1,100,000    0.3%
Axero Holdings, LLC (f)(j)  Employee Collaboration Software  Revolving Credit Facility
(3M USD TERM SOFR+8.00%), 13.49% Cash, 6/30/2026		  2/3/2022  $-    -    -    0.0%
Axero Holdings, LLC (f)(h)  Employee Collaboration Software  Series A Preferred Units  6/30/2021   2,055,609    2,055,609    2,955,000    0.8%
Axero Holdings, LLC (f)(h)  Employee Collaboration Software  Series B Preferred Units  6/30/2021   2,055,609    2,055,609    5,541,163    1.6%
      Total Employee Collaboration Software           10,675,942    15,096,163    4.2%
Sub Total Affiliate investments                 26,950,411    28,593,356    7.8%
Control investments - 13.7% (b)                             

 

14

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

May 31, 2024

(unaudited)

 

Company(1)  Industry  Investment Interest Rate/
Maturity		  Original Acquisition Date  Principal/
Number of Shares		   Cost   Fair Value
(c)		   % of
Net Assets		 
Zollege PBC (k)(g)  Education Services  First Lien Term Loan
(3M USD TERM SOFR+7.00%), 12.34% Cash/2.00% PIK, 5/11/2026		  5/11/2021  $1,651,086    1,651,086    1,651,086    0.4%
Zollege PBC (h)(g)  Education Services  Common Stock  5/11/2021   7,000,000    710    366,044    0.1%
      Total Education Services           1,651,796    2,017,130    0.5%
Saratoga Investment Corp. CLO 2013-1, Ltd. (a)(e)(g)(m)  Structured Finance Securities  Other/Structured Finance Securities
0.00%, 4/20/2033		  1/22/2008  $111,000,000    19,821,991    4,424,899    1.2%
Saratoga Investment Corp. CLO 2013-1, Ltd. Class F-2-R-3 Note (a)(g)  Structured Finance Securities  Other/Structured Finance Securities
(3M USD TERM SOFR+10.00%), 15.60%, 4/20/2033		  8/9/2021  $9,375,000    9,375,000    7,378,676    2.0%
Saratoga Investment Corp. Senior Loan Fund 2022-1, Ltd. Class E Note (a)(g)  Structured Finance Securities  Other/Structured Finance Securities
(3M USD TERM SOFR+8.55%), 13.89%, 10/20/2033		  10/28/2022  $12,250,000    11,392,500    12,250,000    3.3%
      Total Structured Finance Securities           40,589,491    24,053,575    6.5%
Saratoga Senior Loan Fund I JV, LLC (a)(g)(j)  Investment Fund  Unsecured Loan
10.00%, 10/20/2033		  12/17/2021  $17,618,954    17,618,954    15,818,297    4.3%
Saratoga Senior Loan Fund I JV, LLC (a)(g)  Investment Fund  Membership Interest  12/17/2021   17,583,486    17,583,485    8,801,572    2.4%
      Total Investment Fund           35,202,439    24,619,869    6.7%
Sub Total Control investments                 77,443,726    50,690,574    13.7%
TOTAL INVESTMENTS - 297.8% (b)                $1,122,617,957   $1,095,559,440    297.8%

 

15

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

May 31, 2024

(unaudited)

 

   Number of
Shares		   Cost   Fair Value   % of
Net Assets		 
Cash and cash equivalents and cash and cash equivalents, reserve accounts - 25.4% (b)                    
U.S. Bank Money Market (l)   93,296,917   $93,296,917   $93,296,917    25.4%
Total cash and cash equivalents and cash and cash equivalents, reserve accounts     93,296,917   $93,296,917   $93,296,917    25.4%

 

(1)Securities are exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and are restricted securities. Money market funds are valued at net asset value and are considered level 1 investments within the fair value hierarchy.
(a)Represents an investment that is not a “qualifying asset” under Section 55(a) of the Investment Company Act of 1940, as amended (the 1940 Act”). As of May 31, 2024, non-qualifying assets represent 4.4% of the Company’s portfolio at fair value. As a BDC, the Company generally has to invest at least 70% of its total assets in qualifying assets.
(b)Percentages are based on net assets of $367,855,082 as of May 31, 2024.
(c)Because there is no “readily available market quotations” (as defined in the 1940 Act) for these investments, the fair values of these investments were determined using significant unobservable inputs and approved in good faith by our board of directors. These investments have been included as Level 3 in the Fair Value Hierarchy (see Note 3 to the consolidated financial statements).
(d)These securities are either fully or partially pledged as collateral under the Company’s senior secured revolving credit facility (see Note 8 to the consolidated financial statements).
(e)This investment does not have a stated interest rate that is payable thereon. As a result, the 0.00% interest rate in the table above represents the effective interest rate currently earned on the investment cost and is based on the current cash interest and other income generated by the investment.
(f)As defined in the 1940 Act, this portfolio company is an “affiliate” as we own between 5.0% and 25.0% of the outstanding voting securities. Transactions during the three months ended May 31, 2024 in which the issuer was an affiliate are as follows:

 

Company  Purchases   Sales   Total Interest
from
Investments		   Management Fee Income   Net Realized
Gain (Loss)
from
Investments		   Net Change in
Unrealized
Appreciation
(Depreciation)		 
Axero Holdings, LLC  $
           -
   $
           -
   $230,261   $
             -
   $
           -
   $943,561 
ETU Holdings, Inc.   
-
    
-
    507,683    
-
    
-
    (342,338)
Total  $
-
   $
-
   $737,944   $
-
   $
-
   $601,223 

 

16

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

May 31, 2024

(unaudited)

 

(g)As defined in the 1940 Act, we “control” this portfolio company because we own more than 25% of the portfolio company’s outstanding voting securities. Transactions during the three months ended May 31, 2024 in which the issuer was both an affiliate and a portfolio company that we control are as follows:

 

Company  Purchases   Sales   Total
Interest
from
Investments		   Total
Dividends
from
Investments		   Management
Fee Income		   Net Realized
Gain (Loss) from
Investments		   Net Change in
Unrealized
Appreciation
(Depreciation)		 
Netreo Holdings, LLC  $
-
   $2,260,337   $921,531   $
-
   $
     -
   $(6,084,162)  $3,802,854 
Zollege PBC   710    710    110,862    
-
    
-
    (15,110,835)   365,334 
Saratoga Investment Corp. CLO 2013-1, Ltd.   
-
    
-
    
-
    
-
    804,456    
-
    (2,895,832)
Saratoga Investment Corp. Senior Loan Fund 2022-1, Ltd. Class E Note   
-
    
-
    434,231    
-
    
-
    
-
    
-
 
Saratoga Investment Corp. CLO 2013-1, Ltd. Class F-2-R-3 Note   
-
    
-
    373,327    
-
    
-
    
-
    (1,496,551)
Saratoga Senior Loan Fund I JV, LLC   
-
    
-
    440,474    
-
    
-
    
-
    
-
 
Saratoga Senior Loan Fund I JV, LLC   
-
    
-
    
-
    1,297,050    
-
    
-
    (602,422)
Total  $710   $2,261,047   $2,280,425   $1,297,050   $804,456   $(21,194,997)  $(826,617)

 

(h)Non-income producing at May 31, 2024.
(i)Includes securities issued by an affiliate of the company.
(j)All or a portion of this investment has an unfunded commitment as of May 31, 2024. (See Note 9 to the consolidated financial statements).
(k)As of May 31, 2024, the investment was on non-accrual status. The fair value of these investments was approximately $16.7 million, which represented 1.5% of the Company’s portfolio (see Note 2 to the consolidated financial statements).
(l)Included within cash and cash equivalents and cash and cash equivalents, reserve accounts in the Company’s consolidated statements of assets and liabilities as of May 31, 2024.
(m)Interest rate floor is 0.0% and cannot be negative.

 

SOFR - Secured Overnight Financing Rate

 

1M USD TERM SOFR - The 1 month USD TERM SOFR rate as of May 31, 2024 was 5.33%.

3M USD TERM SOFR - The 3 month USD TERM SOFR rate as of May 31, 2024 was 5.34%.

6M USD TERM SOFR - The 6 month USD TERM SOFR rate as of May 31, 2024 was 5.31%.

PIK - Payment-in-Kind (see Note 2 to the consolidated financial statements).

 

See accompanying notes to consolidated financial statements.

 

17

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

February 29, 2024

 

Company(1)  Industry  Investment Interest Rate/
Maturity		  Original Acquisition Date  Principal/
Number of Shares		   Cost   Fair Value (c)   % of
Net Assets		 
Non-control/Non-affiliate investments - 276.5% (b)                             
Altvia MidCo, LLC.  Alternative Investment Management Software  First Lien Term Loan
(3M USD TERM SOFR+8.50%), 13.83% Cash, 7/18/2027		  7/18/2022  $7,900,000   $7,840,328   $7,884,990    2.1%
Altvia MidCo, LLC. (h)  Alternative Investment Management Software  Series A-1 Preferred Shares  7/18/2022   2,000,000    2,000,000    2,894,346    0.8%
      Total Alternative Investment Management Software           9,840,328    10,779,336    2.9%
BQE Software, Inc.  Architecture & Engineering Software  First Lien Term Loan
(3M USD TERM SOFR+6.75%), 12.08% Cash, 4/13/2028		  4/13/2023  $24,500,000    24,285,669    24,497,550    6.6%
BQE Software, Inc. (j)  Architecture & Engineering Software  Delayed Draw Term Loan
(3M USD TERM SOFR+6.75%), 12.08% Cash, 4/13/2028		  4/13/2023  $750,000    743,481    749,925    0.2%
      Total Architecture & Engineering Software           25,029,150    25,247,475    6.8%
GrowthZone, LLC  Association Management Software  First Lien Term Loan
(3M USD TERM SOFR+8.25%), 13.58% Cash, 5/10/2028		  5/10/2023  $22,649,425    22,292,083    22,934,808    6.2%
Golden TopCo LP (h)  Association Management Software  Class A-2 Common Units  5/10/2023   1,072,394    1,072,394    1,154,132    0.3%
      Total Association Management Software           23,364,477    24,088,940    6.5%

 

18

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

February 29, 2024

 

Company(1)  Industry  Investment Interest Rate/
Maturity		  Original Acquisition Date  Principal/
Number of Shares		   Cost   Fair Value (c)   % of
Net Assets		 
Artemis Wax Corp. (d)(j)  Consumer Services  Delayed Draw Term Loan
(1M USD TERM SOFR+6.75%), 12.07% Cash, 5/20/2026		  5/20/2021  $57,500,000    57,208,255    58,149,750    15.7%
Artemis Wax Corp. (h)  Consumer Services  Series B-1 Preferred Stock  5/20/2021   934,463    1,500,000    4,822,941    1.3%
Artemis Wax Corp. (h)  Consumer Services  Series D Preferred Stock  12/22/2022   278,769    1,500,000    1,716,380    0.5%
      Total Consumer Services           60,208,255    64,689,071    17.5%
Schoox, Inc. (h), (i)  Corporate Education Software  Series 1 Membership Interest  12/8/2020   1,050    475,698    4,426,630    1.2%
      Total Corporate Education Software           475,698    4,426,630    1.2%
GreyHeller LLC (h)  Cyber Security  Common Stock  11/10/2021   7,857,689    1,906,275    2,826,009    0.8%
      Total Cyber Security           1,906,275    2,826,009    0.8%
Gen4 Dental Partners Holdings, LLC  Dental Practice Management  Delayed Draw Term Loan
(3M USD TERM SOFR+10.22%), 15.55% Cash, 4/29/2026		  2/8/2023  $11,000,000    10,979,958    11,110,000    3.0%
Gen4 Dental Partners Holdings, LLC (h)(i)  Dental Practice Management  Series A Preferred Units  2/8/2023   493,999    1,027,519    1,111,499    0.3%
Modis Dental Partners OpCo, LLC  Dental Practice Management  First Lien Term Loan
(1M USD TERM SOFR+9.48%), 14.80% Cash, 4/18/2028		  4/18/2023  $7,000,000    6,906,453    7,113,400    1.9%
Modis Dental Partners OpCo, LLC  Dental Practice Management  Delayed Draw Term Loan
(1M USD TERM SOFR+9.48%), 14.80% Cash, 4/18/2028		  4/18/2023  $7,500,000    7,392,367    7,621,500    2.1%
Modis Dental Partners OpCo, LLC (h)  Dental Practice Management  Class A Preferred Units  4/18/2023   2,950,000    2,950,000    2,682,996    0.7%
New England Dental Partners  Dental Practice Management  First Lien Term Loan
(3M USD TERM SOFR+8.00%), 13.48% Cash, 11/25/2025		  11/25/2020  $6,555,000    6,526,643    6,198,408    1.7%
New England Dental Partners  Dental Practice Management  Delayed Draw Term Loan
(3M USD TERM SOFR+8.00%), 13.48% Cash, 11/25/2025		  11/25/2020  $4,650,000    4,635,903    4,397,040    1.2%
      Total Dental Practice Management           40,418,843    40,234,843    10.9%

 

19

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

February 29, 2024

 

Company(1)  Industry  Investment Interest Rate/
Maturity		  Original Acquisition Date  Principal/
Number of Shares		   Cost   Fair Value (c)   % of
Net Assets		 
Exigo, LLC (d)  Direct Selling Software  First Lien Term Loan
(1M USD TERM SOFR+5.75%), 11.17% Cash, 3/16/2027		  3/16/2022  $24,313,135    24,167,354    23,165,555    6.3%
Exigo, LLC (j)  Direct Selling Software  Revolving Credit Facility
(1M USD TERM SOFR+5.75%), 11.17% Cash, 3/16/2027		  3/16/2022  $-    -    (49,167)   0.0%
Exigo, LLC (h), (i)  Direct Selling Software  Common Units  3/16/2022   1,041,667    1,041,667    957,067    0.3%
      Total Direct Selling Software           25,209,021    24,073,455    6.6%
C2 Educational Systems, Inc. (d)  Education Services  First Lien Term Loan
(3M USD TERM SOFR+8.50%), 13.83% Cash, 5/31/2025		  5/31/2017  $21,500,000    21,478,821    21,459,150    5.8%
C2 Educational Systems, Inc. (j)  Education Services  Delayed Draw Term Loan
(3M USD TERM SOFR+8.50%), 13.83% Cash, 5/31/2025		  4/28/2023  $-    -    -    0.0%
C2 Education Systems, Inc. (h)  Education Services  Series A-1 Preferred Stock  5/18/2021   3,127    499,904    576,118    0.2%
Zollege PBC (k)  Education Services  First Lien Term Loan
(3M USD TERM SOFR+7.00%), 12.33% Cash/2.00% PIK, 5/11/2026		  5/11/2021  $16,409,153    16,340,466    3,493,509    0.9%
Zollege PBC (j)(k)  Education Services  Delayed Draw Term Loan
(3M USD TERM SOFR+7.00%), 12.33% Cash/2.00% PIK, 5/11/2026		  5/11/2021  $1,364,109    1,358,200    290,419    0.1%
Zollege PBC (h)  Education Services  Class A Units  5/11/2021