10-Q 1 ea0215310-10q_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 August 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 October 7, 2024 was 13,800,768.

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page
PART I. FINANCIAL INFORMATION 1
     
Item 1. Consolidated Financial Statements 1
     
  Consolidated Statements of Assets and Liabilities as of August 31, 2024 (unaudited) and February 29, 2024 1
     
  Consolidated Statements of Operations for the three and six months ended August 31, 2024 (unaudited) and August 31, 2023 (unaudited) 2
     
  Consolidated Statements of Changes in Net Assets for three and six months ended August 31, 2024 (unaudited) and August 31, 2023 (unaudited) 3
     
  Consolidated Statements of Cash Flows for the six months ended August 31, 2024 (unaudited) and August 31, 2023 (unaudited) 4
     
  Consolidated Schedules of Investments as of August 31, 2024 (unaudited) and February 29, 2024 5
     
  Notes to Consolidated Financial Statements as of August 31, 2024 (unaudited) 27
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 98
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 136
     
Item 4. Controls and Procedures 137
     
PART II. OTHER INFORMATION 138
     
Item 1. Legal Proceedings 138
     
Item 1A. Risk Factors 138
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 138
     
Item 3. Defaults Upon Senior Securities 138
     
Item 4. Mine Safety Disclosures 138
     
Item 5. Other Information 138
     
Item 6. Exhibits 139
     
Signatures 141

 

i

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Consolidated Financial Statements

 

Saratoga Investment Corp.
Consolidated Statements of Assets and Liabilities

 

   August 31,
2024		   February 29,
2024		 
   (unaudited)     
ASSETS        
Investments at fair value        
Non-control/Non-affiliate investments (amortized cost of $932,599,967 and $1,035,879,751, respectively)  $963,176,509   $1,019,774,616 
Affiliate investments (amortized cost of $27,197,048 and $26,707,415, respectively)   29,193,438    27,749,137 
Control investments (amortized cost of $79,244,797 and $117,196,571, respectively)   48,341,503    91,270,036 
Total investments at fair value (amortized cost of $1,039,041,812 and $1,179,783,737, respectively)   1,040,711,450    1,138,793,789 
Cash and cash equivalents   84,569,590    8,692,846 
Cash and cash equivalents, reserve accounts   77,434,591    31,814,278 
Interest receivable (net of reserve of $21,216 and $9,490,340, respectively)   10,085,266    10,298,998 
Management fee receivable   333,826    343,023 
Other assets   1,567,007    1,163,225 
Current income tax receivable   1,931    99,676 
Total assets  $1,214,703,661   $1,191,205,835 
           
LIABILITIES          
Revolving credit facilities  $52,500,000   $35,000,000 
Deferred debt financing costs, revolving credit facilities   (1,651,311)   (882,122)
SBA debentures payable   214,000,000    214,000,000 
Deferred debt financing costs, SBA debentures payable   (5,306,833)   (5,779,892)
8.75% Notes Payable 2025   20,000,000    20,000,000 
Discount on 8.75% notes payable 2025   (61,587)   (112,894)
Deferred debt financing costs, 8.75% notes payable 2025   (2,557)   (4,777)
7.00% Notes Payable 2025   12,000,000    12,000,000 
Discount on 7.00% notes payable 2025   (132,133)   (193,175)
Deferred debt financing costs, 7.00% notes payable 2025   (16,212)   (24,210)
7.75% Notes Payable 2025   5,000,000    5,000,000 
Deferred debt financing costs, 7.75% notes payable 2025   (46,883)   (74,531)
4.375% Notes Payable 2026   175,000,000    175,000,000 
Premium on 4.375% notes payable 2026   439,902    564,260 
Deferred debt financing costs, 4.375% notes payable 2026   (1,283,387)   (1,708,104)
4.35% Notes Payable 2027   75,000,000    75,000,000 
Discount on 4.35% notes payable 2027   (254,551)   (313,010)
Deferred debt financing costs, 4.35% notes payable 2027   (859,567)   (1,033,178)
6.25% Notes Payable 2027   15,000,000    15,000,000 
Deferred debt financing costs, 6.25% notes payable 2027   (237,503)   (273,449)
6.00% Notes Payable 2027   105,500,000    105,500,000 
Discount on 6.00% notes payable 2027   (105,834)   (123,782)
Deferred debt financing costs, 6.00% notes payable 2027   (1,871,368)   (2,224,403)
8.00% Notes Payable 2027   46,000,000    46,000,000 
Deferred debt financing costs, 8.00% notes payable 2027   (1,099,544)   (1,274,455)
8.125% Notes Payable 2027   60,375,000    60,375,000 
Deferred debt financing costs, 8.125% notes payable 2027   (1,358,240)   (1,563,594)
8.50% Notes Payable 2028   57,500,000    57,500,000 
Deferred debt financing costs, 8.50% notes payable 2028   (1,474,914)   (1,680,039)
Base management and incentive fees payable   9,316,716    8,147,217 
Deferred tax liability   4,417,880    3,791,150 
Accounts payable and accrued expenses   1,497,040    1,337,542 
Interest and debt fees payable   4,001,012    3,582,173 
Directors fees payable   80,000    - 
Due to Manager   784,693    450,000 
Total liabilities   842,649,819    820,981,727 
           
Commitments and contingencies (See Note 9)   
 
    
 
 
           
NET ASSETS          
Common stock, par value $0.001, 100,000,000 common shares authorized, 13,745,769 and 13,653,476 common shares issued and outstanding, respectively   13,746    13,654 
Capital in excess of par value   373,087,033    371,081,199 
Total distributable deficit   (1,046,937)   (870,745)
Total net assets   372,053,842    370,224,108 
Total liabilities and net assets  $1,214,703,661   $1,191,205,835 
NET ASSET VALUE PER SHARE  $27.07   $27.12 

 

See accompanying notes to consolidated financial statements.

 

1

 

 

Saratoga Investment Corp.

Consolidated Statements of Operations

(unaudited)

 

   For the three months ended   For the six months ended 
   August 31,
2024		   August 31,
2023		   August 31,
2024		   August 31,
2023		 
INVESTMENT INCOME                
Interest from investments                
Interest income:                
Non-control/Non-affiliate investments  $35,721,214   $28,489,719   $66,945,491   $54,800,512 
Affiliate investments   491,015    907,064    987,855    1,634,150 
Control investments   1,247,256    2,085,448    3,244,368    4,131,308 
Payment in kind interest income:                    
Non-control/Non-affiliate investments   1,654,044    493,338    1,717,874    618,233 
Affiliate investments   250,346    215,547    491,450    423,136 
Control investments   1,277    142,289    284,590    283,852 
Total interest from investments   39,365,152    32,333,405    73,671,628    61,891,191 
Interest from cash and cash equivalents   1,671,031    539,093    2,295,662    1,343,382 
Management fee income   792,323    817,250    1,596,779    1,634,038 
Dividend income(*):                    
Non-control/Non-affiliate investments   162,779    94,613    412,270    112,033 
Control investments   915,590    1,536,970    2,212,640    3,360,480 
Total dividend from investments   1,078,369    1,631,583    2,624,910    3,472,513 
Structuring and advisory fee income   35,000    45,000    445,843    1,474,222 
Other income   61,500    147,814    1,046,703    330,842 
Total investment income   43,003,375    35,514,145    81,681,525    70,146,188 
                     
OPERATING EXPENSES                    
Interest and debt financing expenses   13,128,941    12,413,462    26,091,022    24,106,284 
Base management fees   4,766,445    4,840,899    9,749,025    9,405,088 
Incentive management fees expense (benefit)   4,550,270    2,481,473    8,135,004    2,584,821 
Professional fees   125,886    486,673    1,125,196    972,723 
Administrator expenses   1,133,333    904,167    2,208,333    1,722,917 
Insurance   77,597    81,901    155,193    163,802 
Directors fees and expenses   80,000    111,000    193,000    200,068 
General and administrative   821,584    467,116    1,430,711    1,297,844 
Income tax expense (benefit)   121,921    (237,330)   61,638    (231,093)
Total operating expenses   24,805,977    21,549,361    49,149,122    40,222,454 
NET INVESTMENT INCOME   18,197,398    13,964,784    32,532,403    29,923,734 
                     
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS                    
Net realized gain (loss) from investments:                    
Non-control/Non-affiliate investments   558,701    -    558,701    90,691 
Control investments   (34,007,428)   -    (55,202,425)   - 
Net realized gain (loss) from investments   (33,448,727)   -    (54,643,724)   90,691 
Net change in unrealized appreciation (depreciation) on investments:                    
Non-control/Non-affiliate investments   32,524,852    (11,657,451)   46,681,677    (13,385,585)
Affiliate investments   353,445    39,648    954,668    (205,636)
Control investments   (4,150,142)   5,880,232    (4,976,759)   (8,468,657)
Net change in unrealized appreciation (depreciation) on investments   28,728,155    (5,737,571)   42,659,586    (22,059,878)
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments   (159,187)   (221,206)   (620,188)   (161,799)
Net realized and unrealized gain (loss) on investments   (4,879,759)   (5,958,777)   (12,604,326)   (22,130,986)
Realized losses on extinguishment of debt   -    (110,056)   -    (110,056)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS  $13,317,639   $7,895,951   $19,928,077   $7,682,692 
                     
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE  $0.97   $0.65   $1.45   $0.64 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED   13,726,142    12,158,440    13,704,759    12,011,180 

 

*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 six months ended 
   August 31,
2024		   August 31,
2023		 
INCREASE FROM OPERATIONS:        
Net investment income  $32,532,403   $29,923,734 
Net realized gain (loss) from investments   (54,643,724)   90,691 
Realized losses on extinguishment of debt   -    (110,056)
Net change in unrealized appreciation (depreciation) on investments   42,659,586    (22,059,878)
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments   (620,188)   (161,799)
Net increase in net assets resulting from operations   19,928,077    7,682,692 
           
DECREASE FROM SHAREHOLDER DISTRIBUTIONS:          
Total distributions to shareholders   (20,104,269)   (16,545,737)
Net decrease in net assets from shareholder distributions   (20,104,269)   (16,545,737)
           
CAPITAL SHARE TRANSACTIONS:          
Proceeds from issuance of common stock(1)   -    22,498,117 
Capital contribution from Manager   -    2,050,288 
Stock dividend distribution   2,005,926    1,808,157 
Repurchases of common stock   -    (2,157,605)
Repurchase fees   -    (1,772)
Offering costs   -    (213,427)
Net increase in net assets from capital share transactions   2,005,926    23,983,758 
Total increase in net assets   1,829,734    15,120,713 
Net assets at beginning of period   370,224,108    346,958,042 
Net assets at end of period  $372,053,842   $362,078,755 

 

(1)See Note 11 to the Consolidated Financial Statements contained herein for more information on share issuance.

 

See accompanying notes to consolidated financial statements.

 

3

 

 

Saratoga Investment Corp.

Consolidated Statements of Cash Flows

(unaudited)

 

   For the six months ended 
   August 31,
2024		   August 31,
2023		 
Operating activities        
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS  $19,928,077   $7,682,692 
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   (6,573,881)   2,707,440 
Net accretion of discount on investments   (1,285,027)   (862,540)
Amortization of deferred debt financing costs   2,522,568    2,589,024 
Realized losses on extinguishment of debt   -    110,056 
Income tax expense (benefit)   61,638    (231,093)
Net realized (gain) loss from investments   54,643,724    (90,691)
Net change in unrealized (appreciation) depreciation on investments   (42,659,586)   22,059,878 
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments   620,188    161,799 
Proceeds from sales and repayments of investments   135,842,533    17,103,496 
Purchases of investments   (41,885,424)   (167,272,090)
(Increase) decrease in operating assets:          
Interest receivable   213,732    127,723 
Management fee receivable   9,197    (908)
Other assets   (403,782)   94,389 
Current income tax receivable   97,745    336,875 
Increase (decrease) in operating liabilities:          
Base management and incentive fees payable   1,169,499    (2,945,019)
Accounts payable and accrued expenses   159,498    501,141 
Interest and debt fees payable   418,839    (421,083)
Directors fees payable   80,000    (14,932)
Due to Manager   334,693    367,663 
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES   123,294,231    (117,996,180)
           
Financing activities          
Borrowings on debt   30,000,000    46,500,000 
Paydowns on debt   (12,500,000)   (57,000,000)
Issuance of notes   -    77,500,000 
Payments of deferred debt financing costs   (1,198,831)   (4,085,214)
Proceeds from issuance of common stock   -    22,498,117 
Capital contribution from Manager   -    2,050,288 
Payments of cash dividends   (18,098,343)   (14,737,580)
Repurchases of common stock   -    (2,157,605)
Repurchases fees   -    (1,772)
Payments of offering costs   -    (213,427)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES   (1,797,174)   70,352,807 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS   121,497,057    (47,643,373)
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)  $162,004,181   $48,432,900 
           
Supplemental information:          
Interest paid during the period  $23,149,615   $21,938,344 
Cash paid for taxes   88,955    4,852 
Supplemental non-cash information:          
Payment-in-kind interest income and other adjustments to cost   6,573,881    (2,707,440)
Net accretion of discount on investments   1,285,027    862,540 
Amortization of deferred debt financing costs   2,522,568    2,589,024 
Stock dividend distribution   2,005,926    1,808,157 

 

See accompanying notes to consolidated financial statements.

 

4

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

August 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 - 259.3% (b)                         
Altvia MidCo, LLC.  Alternative Investment Management Software  First Lien Term Loan
(3M USD TERM SOFR+8.50%), 13.52% Cash, 7/18/2027		  7/18/2022  $8,880,000   $8,808,773   $8,889,768    2.4%
Altvia MidCo, LLC. (h)  Alternative Investment Management Software  Series A-1 Preferred Shares  7/18/2022   2,000,000    2,000,000    2,635,125    0.7%
      Total Alternative Investment Management Software           10,808,773    11,524,893    3.1%
BQE Software, Inc. (d)  Architecture & Engineering Software  First Lien Term Loan
(3M USD TERM SOFR+6.75%), 11.77% Cash, 4/13/2028		  4/13/2023  $24,500,000    24,296,216    24,990,000    6.7%
BQE Software, Inc. (j)  Architecture & Engineering Software  Delayed Draw Term Loan
(3M USD TERM SOFR+6.75%), 11.77% Cash, 4/13/2028		  4/13/2023  $750,000    744,151    765,000    0.2%
      Total Architecture & Engineering Software           25,040,367    25,755,000    6.9%
GrowthZone, LLC  Association Management Software  First Lien Term Loan
(3M USD TERM SOFR+8.25%), 13.27% Cash, 5/10/2028		  5/10/2023  $23,454,023    23,121,327    24,045,064    6.5%
Golden TopCo LP (h)  Association Management Software  Class A-2 Common Units  5/10/2023   1,072,394    1,072,394    1,319,604    0.4%
      Total Association Management Software           24,193,721    25,364,668    6.9%
Artemis Wax Corp. (d)(j)  Consumer Services  Delayed Draw Term Loan
(1M USD TERM SOFR+7.50%), 12.70% Cash, 5/20/2026		  5/20/2021  $57,500,000    57,273,445    56,890,500    15.3%
Artemis Wax Corp. (h)  Consumer Services  Series B-1 Preferred Stock  5/20/2021   934,463    1,500,000    1,356,160    0.4%
Artemis Wax Corp. (h)  Consumer Services  Series D Preferred Stock  12/22/2022   331,640    1,711,866    2,029,690    0.5%
      Total Consumer Services           60,485,311    60,276,350    16.2%
Schoox, Inc. (h), (i)  Corporate Education Software  Series 1 Membership Interest  12/8/2020   1,050    475,698    4,394,242    1.2%
      Total Corporate Education Software           475,698    4,394,242    1.2%
GreyHeller LLC (h)  Cyber Security  Common Stock  11/10/2021   7,857,689    1,906,275    3,189,357    0.9%
      Total Cyber Security           1,906,275    3,189,357    0.9%

 

5

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

August 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  First Lien Term Loan
(6M USD TERM SOFR+5.50%), 10.21% Cash, 5/13/2030		  5/13/2024  $7,142,857    7,072,749    7,071,429    1.9%
Gen4 Dental Partners Holdings,
LLC (j)		  Dental Practice Management  Delayed Draw Term Loan
(6M USD TERM SOFR+5.50%), 10.21% Cash, 5/13/2030		  5/13/2024  $-    -    -    0.0%
Gen4 Dental Partners Holdings,
LLC (j)		  Dental Practice Management  Revolving Credit Facility
(6M USD TERM SOFR+5.50%), 10.21% Cash, 5/13/2030		  5/13/2024  $-    -    -    0.0%
Gen4 Dental Partners Holdings,
LLC (h)(i)		  Dental Practice Management  Series A Preferred Units  2/8/2023   493,999    1,027,519    1,155,960    0.3%
Modis Dental Partners OpCo,
LLC		  Dental Practice Management  First Lien Term Loan
(1M USD TERM SOFR+9.45%), 14.64% Cash, 4/18/2028		  4/18/2023  $7,000,000    6,914,132    7,140,000    1.9%
Modis Dental Partners OpCo,
LLC		  Dental Practice Management  Delayed Draw Term Loan
(1M USD TERM SOFR+9.45%), 14.64% Cash, 4/18/2028		  4/18/2023  $7,500,000    7,401,255    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    2,849,582    0.8%
New England Dental Partners  Dental Practice Management  First Lien Term Loan
(3M USD TERM SOFR+8.00%), 13.17% Cash, 11/25/2025		  11/25/2020  $6,555,000    6,535,334    6,619,239    1.8%
New England Dental Partners  Dental Practice Management  Delayed Draw Term Loan
(3M USD TERM SOFR+8.00%), 13.17% Cash, 11/25/2025		  11/25/2020  $2,150,000    2,146,380    2,171,070    0.6%
      Total Dental Practice Management           34,047,369    34,657,280    9.4%
Exigo, LLC (d)  Direct Selling Software  First Lien Term Loan
(1M USD TERM SOFR+6.25%), 11.55% Cash, 3/16/2027		  3/16/2022  $24,189,404    24,062,668    23,463,721    6.3%
Exigo, LLC (j)  Direct Selling Software  Revolving Credit Facility
(1M USD TERM SOFR+6.25%), 11.55% Cash, 3/16/2027		  3/16/2022  $-    -    (18,750)   0.0%
Exigo, LLC (h), (i)  Direct Selling Software  Common Units  3/16/2022   1,041,667    1,041,667    796,990    0.2%
      Total Direct Selling Software           25,104,335    24,241,961    6.5%
C2 Educational Systems, Inc. (d)  Education Services  First Lien Term Loan
(3M USD TERM SOFR+8.50%), 13.52% Cash, 5/31/2025		  5/31/2017  $23,000,000    22,977,249    23,002,300    6.2%
C2 Educational Systems, Inc. (j)  Education Services  Delayed Draw Term Loan
(3M USD TERM SOFR+8.50%), 13.52% 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    590,772    0.2%
      Total Education Services           23,477,153    23,593,072    6.4%

 

6

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

August 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    10,439,727    2.8%
GoReact  Education Software  First Lien Term Loan
(3M USD TERM SOFR+7.50%), 12.72% Cash/1.00% PIK, 1/17/2025		  1/17/2020  $8,122,206    8,110,606    8,122,206    2.2%
GoReact (j)  Education Software  Delayed Draw Term Loan
(3M USD TERM SOFR+7.50%), 12.72% Cash/1.00% PIK, 1/17/2025		  1/18/2022  $-    -    -    0.0%
Identity Automation Systems (h)  Education Software  Common Stock Class A-2 Units  8/25/2014   232,616    232,616    663,725    0.2%
Identity Automation Systems (h)  Education Software  Common Stock Class A-1 Units  3/6/2020   43,715    171,571    244,870    0.1%
Ready Education (d)  Education Software  First Lien Term Loan
(3M USD TERM SOFR+7.00%), 12.02% Cash, 8/5/2027		  8/5/2022  $27,000,000    26,819,775    26,954,100    7.2%
      Total Education Software           39,303,859    46,424,628    12.5%
TG Pressure Washing Holdings,
LLC (h)		  Facilities Maintenance  Preferred Equity  8/12/2019   488,148    488,148    -    0.0%
      Total Facilities Maintenance           488,148    -    0.0%
Davisware, LLC  Field Service Management  First Lien Term Loan
(3M USD TERM SOFR+6.50%), 11.52% Cash, 11/30/2025		  9/6/2019  $6,000,000    5,999,971    6,005,400    1.6%
Davisware, LLC  Field Service Management  Delayed Draw Term Loan
(3M USD TERM SOFR+6.50%), 11.52% Cash, 11/30/2025		  9/6/2019  $5,477,790    5,477,790    5,482,720    1.5%
      Total Field Service Management           11,477,761    11,488,120    3.1%
GDS Software Holdings, LLC  Financial Services  First Lien Term Loan
(3M USD TERM SOFR+7.00%), 12.02% Cash, 12/30/2026		  12/30/2021  $22,713,926    22,632,532    22,709,384    6.1%
GDS Software Holdings, LLC (d)  Financial Services  Delayed Draw Term Loan
(3M USD TERM SOFR+7.00%), 12.02% Cash, 12/30/2026		  12/30/2021  $3,286,074    3,264,532    3,285,416    0.9%
GDS Software Holdings, LLC  (h)  Financial Services  Common Stock Class A Units  8/23/2018   250,000    250,000    481,858    0.1%
      Total Financial Services           26,147,064    26,476,658    7.1%
Ascend Software, LLC  Financial Services Software  First Lien Term Loan
(3M USD TERM SOFR+7.50%), 12.78% Cash, 12/15/2026		  12/15/2021  $6,000,000    5,967,632    5,974,200    1.6%
Ascend Software, LLC (j)  Financial Services Software  Delayed Draw Term Loan
(3M USD TERM SOFR+7.50%), 12.78% Cash, 12/15/2026		  12/15/2021  $4,050,000    4,033,154    4,032,585    1.1%
      Total Financial Services Software           10,000,786    10,006,785    2.7%

 

7

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

August 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%), 11.70% Cash, 07/19/2028		  7/19/2023  $10,000,000    9,913,859    10,156,000    2.7%
Inspect Point Holdings, LLC (j)  Fire Inspection Business Software  First Lien Term Loan
(1M USD TERM SOFR+6.50%), 11.70% Cash, 07/19/2028		  7/19/2023  $-    -    -    0.0%
      Total Fire Inspection Business Software           9,913,859    10,156,000    2.7%
Stretch Zone Franchising, LLC (d)  Health/Fitness Franchisor  First Lien Term Loan
(3M USD TERM SOFR+7.00%), 12.02% Cash, 3/31/2028		  3/31/2023  $28,717,271    28,483,838    29,214,080    7.9%
Stretch Zone Franchising, LLC (j)  Health/Fitness Franchisor  Delayed Draw Term Loan
(3M USD TERM SOFR+7.00%), 12.02% 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    2,230,387    0.6%
      Total Health/Fitness Franchisor           30,483,838    31,444,467    8.5%
Alpha Aesthetics Partners OpCo, LLC  Healthcare Services  First Lien Term Loan
(1M USD TERM SOFR+9.95%), 15.15% Cash, 3/20/2028		  3/20/2023  $3,900,000    3,852,226    3,978,000    1.2%
Alpha Aesthetics Partners OpCo, LLC (j)  Healthcare Services  Delayed Draw Term Loan
(1M USD TERM SOFR+9.95%), 15.15% Cash, 3/20/2028		  3/20/2023  $-    11,050,714    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    3,152,776    0.8%
Axiom Medical Consulting, LLC  Healthcare Services  First Lien Term Loan
(3M USD TERM SOFR+6.00%), 11.02% Cash, 9/11/2028		  9/11/2023  $10,000,000    9,923,496    10,086,000    2.7%
Axiom Medical Consulting, LLC (j)  Healthcare Services  Delayed Draw Term Loan
(3M USD TERM SOFR+6.00%), 11.02% 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    565,065    0.2%
ComForCare Health Care (d)  Healthcare Services  First Lien Term Loan
(3M USD TERM SOFR+6.25%), 11.27% Cash, 12/31/2027		  1/31/2017  $39,000,000    38,850,985    39,530,400    10.6%
      Total Healthcare Services           67,110,810    68,733,946    18.6%

 

8

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

August 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%), 13.45% Cash, 1/31/2027		  4/15/2019  $53,931,108    53,671,530    54,082,115    14.5%
Invita (fka HemaTerra Holding Company, LLC)  Healthcare Software  Delayed Draw Term Loan
(1M USD TERM SOFR+8.25%), 13.45% Cash, 1/31/2027		  4/15/2019  $13,506,289    13,471,579    13,544,107    3.6%
Invita (fkaTRC HemaTerra, LLC) (h)  Healthcare Software  Class D Membership Interests  4/15/2019   2,487    2,816,693    8,101,932    2.2%
Procurement Partners, LLC  Healthcare Software  First Lien Term Loan
(3M USD TERM SOFR+6.50%), 11.52% Cash, 5/12/2026		  11/12/2020  $35,125,000    34,994,211    35,125,000    9.4%
Procurement Partners, LLC (j)  Healthcare Software  Delayed Draw Term Loan
(3M USD TERM SOFR+6.50%), 11.52% Cash, 5/12/2026		  11/12/2020  $10,300,000    10,242,960    10,300,000    2.8%
Procurement Partners Holdings LLC (h)  Healthcare Software 

Class A Units

 		  11/12/2020   571,219    571,219    465,237    0.1%
      Total Healthcare Software           115,768,192    121,618,391    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%
Knowland Group, LLC  Hospitality/Hotel  Second Lien Term Loan
(3M USD TERM SOFR+8.00%), 13.17% Cash/3.00% PIK, 12/31/2024		  11/9/2018  $23,150,241    23,150,241    20,488,826    5.5%
      Total Hospitality/Hotel           23,150,241    20,488,826    5.5%
Granite Comfort, LP (d)  HVAC Services and Sales  First Lien Term Loan
(3M USD TERM SOFR+7.43%), 12.45% Cash, 5/16/2027		  11/16/2020  $43,000,000    42,808,235    43,004,300    11.6%
Granite Comfort, LP (j)(d)  HVAC Services and Sales  Delayed Draw Term Loan
(3M USD TERM SOFR+7.43%), 12.45% Cash, 5/16/2027		  11/16/2020  $16,207,805    16,075,890    16,209,426    4.4%
      Total HVAC Services and Sales           58,884,125    59,213,726    16.0%

 

9

 

 

Saratoga Investment Corp.

Consolidated Schedule of Investments

August 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%), 11.52% Cash, 3/6/2025		  3/6/2013  $307,962    307,962    307,962    0.1%
Vector Controls Holding Co., LLC (h)  Industrial Products  Warrants to Purchase Limited Liability Company Interests, Expires 11/30/2027  5/31/2015   343    -    8,234,848    2.2%
      Total Industrial Products           307,962    8,542,810    2.3%
AgencyBloc, LLC  Insurance Software  First Lien Term Loan
(1M USD TERM SOFR+7.76%), 12.96% Cash, 10/1/2026		  10/1/2021  $15,715,227    15,631,751    15,732,514    4.2%
Panther ParentCo LLC (h)  Insurance Software  Class A Units  10/1/2021   2,500,000    2,500,000    4,422,576    1.2%
      Total Insurance Software           18,131,751    20,155,090    5.4%
LogicMonitor, Inc. (d)  IT Services  First Lien Term Loan
(3M USD TERM SOFR+6.50%), 11.52% Cash, 5/17/2026		  3/20/2020  $43,000,000    42,967,165    43,000,000    11.6%
      Total IT Services           42,967,165    43,000,000    11.6%