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 November 30, 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 January 7, 2025 was 14,346,373.
TABLE OF CONTENTS
| | Page |
PART I. | FINANCIAL INFORMATION | 1 |
| | |
Item 1. | Consolidated Financial Statements | 1 |
| | |
| Consolidated Statements of Assets and Liabilities as of November 30, 2024 (unaudited) and February 29, 2024 | 1 |
| | |
| Consolidated Statements of Operations for the three and nine months ended November 30, 2024 (unaudited) and November 30, 2023 (unaudited) | 2 |
| | |
| Consolidated Statements of Changes in Net Assets for three and nine months ended November 30, 2024 (unaudited) and November 30, 2023 (unaudited) | 3 |
| | |
| Consolidated Statements of Cash Flows for the nine months ended November 30, 2024 (unaudited) and November 30, 2023 (unaudited) | 4 |
| | |
| Consolidated Schedules of Investments as of November 30, 2024 (unaudited) and February 29, 2024 | 5 |
| | |
| Notes to Consolidated Financial Statements as of November 30, 2024 (unaudited) | 28 |
| | |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 108 |
| | |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 149 |
| | |
Item 4. | Controls and Procedures | 150 |
| | |
PART II. | OTHER INFORMATION | 151 |
| | |
Item 1. | Legal Proceedings | 151 |
| | |
Item 1A. | Risk Factors | 151 |
| | |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 152 |
| | |
Item 3. | Defaults Upon Senior Securities | 152 |
| | |
Item 4. | Mine Safety Disclosures | 152 |
| | |
Item 5. | Other Information | 152 |
| | |
Item 6. | Exhibits | 153 |
| | |
Signatures | 155 |
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Saratoga Investment Corp.
Consolidated Statements of Assets and Liabilities
| | November 30, 2024 | | | February 29, 2024 | |
| | (unaudited) | | | | |
ASSETS | | | | | | |
Investments at fair value | | | | | | |
Non-control/Non-affiliate investments (amortized cost of $852,158,089 and $1,035,879,751, respectively) | | $ | 875,707,680 | | | $ | 1,019,774,616 | |
Affiliate investments (amortized cost of $37,627,241 and $26,707,415, respectively) | | | 39,803,456 | | | | 27,749,137 | |
Control investments (amortized cost of $77,556,847 and $117,196,571, respectively) | | | 44,582,096 | | | | 91,270,036 | |
Total investments at fair value (amortized cost of $967,342,177 and $1,179,783,737, respectively) | | | 960,093,232 | | | | 1,138,793,789 | |
Cash and cash equivalents | | | 147,614,810 | | | | 8,692,846 | |
Cash and cash equivalents, reserve accounts | | | 102,549,213 | | | | 31,814,278 | |
Interest receivable (net of reserve of $68,735 and $9,490,340, respectively) | | | 7,462,134 | | | | 10,298,998 | |
Management fee receivable | | | 327,368 | | | | 343,023 | |
Other assets | | | 1,871,192 | | | | 1,163,225 | |
Current income tax receivable | | | 1,931 | | | | 99,676 | |
Total assets | | $ | 1,219,919,880 | | | $ | 1,191,205,835 | |
| | | | | | | | |
LIABILITIES | | | | | | | | |
Revolving credit facilities | | $ | 52,500,000 | | | $ | 35,000,000 | |
Deferred debt financing costs, revolving credit facilities | | | (1,467,001 | ) | | | (882,122 | ) |
SBA debentures payable | | | 214,000,000 | | | | 214,000,000 | |
Deferred debt financing costs, SBA debentures payable | | | (5,072,871 | ) | | | (5,779,892 | ) |
8.75% Notes Payable 2025 | | | 20,000,000 | | | | 20,000,000 | |
Discount on 8.75% notes payable 2025 | | | (35,045 | ) | | | (112,894 | ) |
Deferred debt financing costs, 8.75% notes payable 2025 | | | (1,460 | ) | | | (4,777 | ) |
7.00% Notes Payable 2025 | | | 12,000,000 | | | | 12,000,000 | |
Discount on 7.00% notes payable 2025 | | | (100,675 | ) | | | (193,175 | ) |
Deferred debt financing costs, 7.00% notes payable 2025 | | | (12,257 | ) | | | (24,210 | ) |
7.75% Notes Payable 2025 | | | 5,000,000 | | | | 5,000,000 | |
Deferred debt financing costs, 7.75% notes payable 2025 | | | (33,209 | ) | | | (74,531 | ) |
4.375% Notes Payable 2026 | | | 175,000,000 | | | | 175,000,000 | |
Premium on 4.375% notes payable 2026 | | | 363,367 | | | | 564,260 | |
Deferred debt financing costs, 4.375% notes payable 2026 | | | (1,073,336 | ) | | | (1,708,104 | ) |
4.35% Notes Payable 2027 | | | 75,000,000 | | | | 75,000,000 | |
Discount on 4.35% notes payable 2027 | | | (233,940 | ) | | | (313,010 | ) |
Deferred debt financing costs, 4.35% notes payable 2027 | | | (773,704 | ) | | | (1,033,178 | ) |
6.25% Notes Payable 2027 | | | 15,000,000 | | | | 15,000,000 | |
Deferred debt financing costs, 6.25% notes payable 2027 | | | (219,726 | ) | | | (273,449 | ) |
6.00% Notes Payable 2027 | | | 105,500,000 | | | | 105,500,000 | |
Discount on 6.00% notes payable 2027 | | | (96,638 | ) | | | (123,782 | ) |
Deferred debt financing costs, 6.00% notes payable 2027 | | | (1,696,769 | ) | | | (2,224,403 | ) |
8.00% Notes Payable 2027 | | | 46,000,000 | | | | 46,000,000 | |
Deferred debt financing costs, 8.00% notes payable 2027 | | | (1,013,039 | ) | | | (1,274,455 | ) |
8.125% Notes Payable 2027 | | | 60,375,000 | | | | 60,375,000 | |
Deferred debt financing costs, 8.125% notes payable 2027 | | | (1,256,679 | ) | | | (1,563,594 | ) |
8.50% Notes Payable 2028 | | | 57,500,000 | | | | 57,500,000 | |
Deferred debt financing costs, 8.50% notes payable 2028 | | | (1,373,467 | ) | | | (1,680,039 | ) |
Base management and incentive fees payable | | | 7,521,835 | | | | 8,147,217 | |
Deferred tax liability | | | 4,581,381 | | | | 3,791,150 | |
Accounts payable and accrued expenses | | | 2,500,210 | | | | 1,337,542 | |
Interest and debt fees payable | | | 5,875,852 | | | | 3,582,173 | |
Due to Manager | | | 796,396 | | | | 450,000 | |
Total liabilities | | | 845,054,225 | | | | 820,981,727 | |
| | | | | | | | |
Commitments and contingencies (See Note 9) | | | | | | | | |
| | | | | | | | |
NET ASSETS | | | | | | | | |
Common stock, par value $0.001, 100,000,000 common shares authorized, 13,909,206 and 13,653,476 common shares issued and outstanding, respectively | | | 13,909 | | | | 13,654 | |
Capital in excess of par value | | | 377,235,609 | | | | 371,081,199 | |
Total distributable deficit | | | (2,383,863 | ) | | | (870,745 | ) |
Total net assets | | | 374,865,655 | | | | 370,224,108 | |
Total liabilities and net assets | | $ | 1,219,919,880 | | | $ | 1,191,205,835 | |
NET ASSET VALUE PER SHARE | | $ | 26.95 | | | $ | 27.12 | |
See accompanying notes to consolidated financial statements.
Saratoga Investment Corp.
Consolidated Statements of Operations
(unaudited)
| | For the three months ended | | | For the nine months ended | |
| | November 30, 2024 | | | November 30, 2023 | | | November 30, 2024 | | | November 30, 2023 | |
INVESTMENT INCOME | | | | | | | | | | | | |
Interest from investments | | | | | | | | | | | | |
Interest income: | | | | | | | | | | | | |
Non-control/Non-affiliate investments | | $ | 28,301,622 | | | $ | 28,741,745 | | | $ | 95,247,113 | | | $ | 83,542,257 | |
Affiliate investments | | | 458,765 | | | | 1,165,585 | | | | 1,446,620 | | | | 2,799,735 | |
Control investments | | | 1,220,769 | | | | 2,183,242 | | | | 4,465,137 | | | | 6,314,550 | |
Payment in kind interest income: | | | | | | | | | | | | | | | | |
Non-control/Non-affiliate investments | | | 355,161 | | | | 88,106 | | | | 2,073,035 | | | | 706,339 | |
Affiliate investments | | | 424,357 | | | | 221,348 | | | | 915,807 | | | | 644,484 | |
Control investments | | | - | | | | 258,729 | | | | 284,590 | | | | 542,581 | |
Total interest from investments | | | 30,760,674 | | | | 32,658,755 | | | | 104,432,302 | | | | 94,549,946 | |
Interest from cash and cash equivalents | | | 1,627,718 | | | | 521,574 | | | | 3,923,380 | | | | 1,864,956 | |
Management fee income | | | 775,398 | | | | 819,929 | | | | 2,372,177 | | | | 2,453,967 | |
Dividend income(*): | | | | | | | | | | | | | | | | |
Non-control/Non-affiliate investments | | | 172,557 | | | | 509,365 | | | | 584,827 | | | | 621,398 | |
Control investments | | | 948,102 | | | | 1,319,219 | | | | 3,160,742 | | | | 4,679,699 | |
Total dividend from investments | | | 1,120,659 | | | | 1,828,584 | | | | 3,745,569 | | | | 5,301,097 | |
Structuring and advisory fee income | | | 740,705 | | | | 312,135 | | | | 1,186,548 | | | | 1,786,357 | |
Other income | | | 853,481 | | | | 199,368 | | | | 1,900,184 | | | | 530,210 | |
Total investment income | | | 35,878,635 | | | | 36,340,345 | | | | 117,560,160 | | | | 106,486,533 | |
| | | | | | | | | | | | | | | | |
OPERATING EXPENSES | | | | | | | | | | | | | | | | |
Interest and debt financing expenses | | | 13,044,000 | | | | 12,522,357 | | | | 39,135,022 | | | | 36,628,641 | |
Base management fees | | | 4,412,000 | | | | 4,857,059 | | | | 14,161,025 | | | | 14,262,147 | |
Incentive management fees expense (benefit) | | | 3,109,834 | | | | 2,243,621 | | | | 11,244,838 | | | | 4,828,442 | |
Professional fees | | | 670,376 | | | | 434,552 | | | | 1,795,572 | | | | 1,407,275 | |
Administrator expenses | | | 1,250,000 | | | | 1,075,000 | | | | 3,458,333 | | | | 2,797,917 | |
Insurance | | | 76,743 | | | | 81,002 | | | | 231,936 | | | | 244,804 | |
Directors fees and expenses | | | 83,500 | | | | 80,729 | | | | 276,500 | | | | 280,797 | |
General and administrative | | | 759,902 | | | | 660,062 | | | | 2,190,613 | | | | 1,957,906 | |
Income tax expense (benefit) | | | 36,625 | | | | 219,900 | | | | 98,263 | | | | (11,193 | ) |
Total operating expenses | | | 23,442,980 | | | | 22,174,282 | | | | 72,592,102 | | | | 62,396,736 | |
NET INVESTMENT INCOME | | | 12,435,655 | | | | 14,166,063 | | | | 44,968,058 | | | | 44,089,797 | |
| | | | | | | | | | | | | | | | |
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS | | | | | | | | | | | | | | | | |
Net realized gain (loss) from investments: | | | | | | | | | | | | | | | | |
Non-control/Non-affiliate investments | | | 4,806,390 | | | | 60,565 | | | | 5,365,091 | | | | 151,256 | |
Control investments | | | 638,355 | | | | - | | | | (54,564,070 | ) | | | - | |
Net realized gain (loss) from investments | | | 5,444,745 | | | | 60,565 | | | | (49,198,979 | ) | | | 151,256 | |
Net change in unrealized appreciation (depreciation) on investments: | | | | | | | | | | | | | | | | |
Non-control/Non-affiliate investments | | | (7,026,951 | ) | | | (1,948,502 | ) | | | 39,654,726 | | | | (15,334,087 | ) |
Affiliate investments | | | 179,825 | | | | (1,084,259 | ) | | | 1,134,493 | | | | (1,289,895 | ) |
Control investments | | | (2,071,457 | ) | | | (14,833,592 | ) | | | (7,048,216 | ) | | | (23,302,249 | ) |
Net change in unrealized appreciation (depreciation) on investments | | | (8,918,583 | ) | | | (17,866,353 | ) | | | 33,741,003 | | | | (39,926,231 | ) |
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments | | | (126,875 | ) | | | (415,894 | ) | | | (747,063 | ) | | | (577,693 | ) |
Net realized and unrealized gain (loss) on investments | | | (3,600,713 | ) | | | (18,221,682 | ) | | | (16,205,039 | ) | | | (40,352,668 | ) |
Realized losses on extinguishment of debt | | | - | | | | - | | | | - | | | | (110,056 | ) |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 8,834,942 | | | $ | (4,055,619 | ) | | $ | 28,763,019 | | | $ | 3,627,073 | |
| | | | | | | | | | | | | | | | |
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE | | $ | 0.64 | | | $ | (0.31 | ) | | $ | 2.09 | | | $ | 0.29 | |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED | | | 13,789,951 | | | | 13,052,896 | | | | 13,733,008 | | | | 12,355,815 | |
| * | Certain prior period amounts have been reclassified to conform to current period presentation. |
See accompanying notes to consolidated financial statements.
Saratoga Investment Corp.
Consolidated Statements of Changes in Net Assets
(unaudited)
| | For the nine months ended | |
| | November 30, 2024 | | | November 30, 2023 | |
INCREASE FROM OPERATIONS: | | | | | | |
Net investment income | | $ | 44,968,058 | | | $ | 44,089,797 | |
Net realized gain (loss) from investments | | | (49,198,979 | ) | | | 151,256 | |
Realized losses on extinguishment of debt | | | - | | | | (110,056 | ) |
Net change in unrealized appreciation (depreciation) on investments | | | 33,741,003 | | | | (39,926,231 | ) |
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments | | | (747,063 | ) | | | (577,693 | ) |
Net increase in net assets resulting from operations | | | 28,763,019 | | | | 3,627,073 | |
| | | | | | | | |
DECREASE FROM SHAREHOLDER DISTRIBUTIONS: | | | | | | | | |
Total distributions to shareholders | | | (30,276,137 | ) | | | (25,832,379 | ) |
Net decrease in net assets from shareholder distributions | | | (30,276,137 | ) | | | (25,832,379 | ) |
| | | | | | | | |
CAPITAL SHARE TRANSACTIONS: | | | | | | | | |
Proceeds from issuance of common stock(1) | | | 2,777,426 | | | | 31,510,617 | |
Capital contribution from Manager | | | 199,652 | | | | 3,093,288 | |
Stock dividend distribution | | | 3,220,162 | | | | 2,667,152 | |
Repurchases of common stock | | | - | | | | (2,157,605 | ) |
Repurchase fees | | | - | | | | (1,772 | ) |
Offering costs | | | (42,575 | ) | | | (305,667 | ) |
Net increase in net assets from capital share transactions | | | 6,154,665 | | | | 34,806,013 | |
Total increase in net assets | | | 4,641,547 | | | | 12,600,707 | |
Net assets at beginning of period | | | 370,224,108 | | | | 346,958,042 | |
Net assets at end of period | | $ | 374,865,655 | | | $ | 359,558,749 | |
| (1) | See Note 11 to the Consolidated Financial Statements contained herein for more information on share issuance. |
See accompanying notes to consolidated financial statements.
Saratoga Investment Corp.
Consolidated Statements of Cash Flows
(unaudited)
| | For the nine months ended | |
| | November 30, 2024 | | | November 30, 2023 | |
Operating activities | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 28,763,019 | | | $ | 3,627,073 | |
ADJUSTMENTS TO RECONCILE NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: | | | | | | | | |
Distributions from CLO, payment-in-kind and other adjustments to cost | | | (4,546,611 | ) | | | 4,054,128 | |
Net accretion of discount on investments | | | (2,181,920 | ) | | | (1,641,652 | ) |
Amortization of deferred debt financing costs | | | 3,781,712 | | | | 3,909,127 | |
Realized losses on extinguishment of debt | | | - | | | | 110,056 | |
Income tax expense (benefit) | | | 43,168 | | | | (11,193 | ) |
Net realized (gain) loss from investments | | | 49,198,979 | | | | (151,256 | ) |
Net change in unrealized (appreciation) depreciation on investments | | | (33,741,003 | ) | | | 39,926,231 | |
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments | | | 747,063 | | | | 577,693 | |
Proceeds from sales and repayments of investments | | | 296,246,215 | | | | 19,247,834 | |
Purchases of investments | | | (126,275,103 | ) | | | (202,883,641 | ) |
(Increase) decrease in operating assets: | | | | | | | | |
Interest receivable | | | 2,836,864 | | | | (1,075,968 | ) |
Management fee receivable | | | 15,655 | | | | (223 | ) |
Other assets | | | (707,967 | ) | | | (401,046 | ) |
Current income tax receivable | | | 97,745 | | | | 336,875 | |
Increase (decrease) in operating liabilities: | | | | | | | | |
Base management and incentive fees payable | | | (625,382 | ) | | | (3,975,165 | ) |
Accounts payable and accrued expenses | | | 1,162,668 | | | | 621,900 | |
Interest and debt fees payable | | | 2,293,679 | | | | 956,499 | |
Directors fees payable | | | - | | | | (14,932 | ) |
Due to Manager | | | 346,396 | | | | 239,065 | |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | | | 217,455,177 | | | | (136,548,595 | ) |
| | | | | | | | |
Financing activities | | | | | | | | |
Borrowings on debt | | | 30,000,000 | | | | 62,500,000 | |
Paydowns on debt | | | (12,500,000 | ) | | | (57,000,000 | ) |
Issuance of notes | | | - | | | | 77,500,000 | |
Payments of deferred debt financing costs | | | (1,176,806 | ) | | | (4,474,813 | ) |
Proceeds from issuance of common stock | | | 2,777,426 | | | | 31,510,617 | |
Capital contribution from Manager | | | 199,652 | | | | 3,093,288 | |
Payments of cash dividends | | | (27,055,975 | ) | | | (23,165,227 | ) |
Repurchases of common stock | | | - | | | | (2,157,605 | ) |
Repurchases fees | | | - | | | | (1,772 | ) |
Payments of offering costs | | | (42,575 | ) | | | (305,667 | ) |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | | | (7,798,278 | ) | | | 87,498,821 | |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS | | | 209,656,899 | | | | (49,049,774 | ) |
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) | | $ | 250,164,023 | | | $ | 47,026,499 | |
| | | | | | | | |
Supplemental information: | | | | | | | | |
Interest paid during the period | | $ | 33,059,630 | | | $ | 31,763,015 | |
Cash paid for taxes | | | 617,665 | | | | 654,930 | |
Supplemental non-cash information: | | | | | | | | |
Payment-in-kind interest income and other adjustments to cost | | | 9,920,201 | | | | (4,054,128 | ) |
Net accretion of discount on investments | | | 2,181,920 | | | | 1,641,652 | |
Amortization of deferred debt financing costs | | | 3,781,712 | | | | 3,909,127 | |
Stock dividend distribution | | | 3,220,162 | | | | 2,667,152 | |
See accompanying notes to consolidated financial statements.
Saratoga Investment Corp.
Consolidated Schedule of Investments
November 30, 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 - 234.0% (b) | | | | | | | | | | | | | | | | | | |
Altvia MidCo, LLC. | | Alternative Investment Management Software | | First Lien Term Loan (3M USD TERM SOFR+8.50%), 12.97% Cash, 7/18/2027 | | 7/18/2022 | | $ | 8,857,800 | | | $ | 8,790,649 | | | $ | 8,867,544 | | | | 2.4 | % |
Altvia MidCo, LLC. (h) | | Alternative Investment Management Software | | Series A-1 Preferred Shares | | 7/18/2022 | | | 2,000,000 | | | | 2,000,000 | | | | 2,718,029 | | | | 0.7 | % |
| | | | Total Alternative Investment Management Software | | | | | | | | | 10,790,649 | | | | 11,585,573 | | | | 3.1 | % |
BQE Software, Inc. (d) | | Architecture & Engineering Software | | First Lien Term Loan (3M USD TERM SOFR+6.75%), 11.22% Cash, 4/13/2028 | | 4/13/2023 | | $ | 24,500,000 | | | | 24,307,518 | | | | 24,990,000 | | | | 6.7 | % |
BQE Software, Inc. (j) | | Architecture & Engineering Software | | Delayed Draw Term Loan (3M USD TERM SOFR+6.75%), 11.22% Cash, 4/13/2028 | | 4/13/2023 | | $ | 750,000 | | | | 745,836 | | | | 765,000 | | | | 0.2 | % |
| | | | Total Architecture & Engineering Software | | | | | | | | | 25,053,354 | | | | 25,755,000 | | | | 6.9 | % |
GrowthZone, LLC | | Association Management Software | | First Lien Term Loan (3M USD TERM SOFR+8.25%), 12.72% Cash, 5/10/2028 | | 5/10/2023 | | $ | 23,395,388 | | | | 23,085,098 | | | | 23,984,952 | | | | 6.4 | % |
Golden TopCo LP (h) | | Association Management Software | | Class A-2 Common Units | | 5/10/2023 | | | 1,072,394 | | | | 1,072,394 | | | | 1,380,841 | | | | 0.4 | % |
| | | | Total Association Management Software | | | | | | | | | 24,157,492 | | | | 25,365,793 | | | | 6.8 | % |
Artemis Wax Corp. (d)(j) | | Consumer Services | | Delayed Draw Term Loan (1M USD TERM SOFR+7.50%), 12.03% Cash, 5/20/2026 | | 5/20/2021 | | $ | 57,500,000 | | | | 57,301,213 | | | | 56,850,250 | | | | 15.2 | % |
Artemis Wax Corp. (h) | | Consumer Services | | Series B-1 Preferred Stock | | 5/20/2021 | | | 934,463 | | | | 1,500,000 | | | | 615,929 | | | | 0.2 | % |
Artemis Wax Corp. (h) | | Consumer Services | | Series D Preferred Stock | | 12/22/2022 | | | 331,640 | | | | 1,711,866 | | | | 2,087,850 | | | | 0.6 | % |
| | | | Total Consumer Services | | | | | | | | | 60,513,079 | | | | 59,554,029 | | | | 16.0 | % |
Schoox, Inc. (h), (i) | | Corporate Education Software | | Series 1 Membership Interest | | 12/8/2020 | | | 1,050 | | | | 475,698 | | | | 4,624,002 | | | | 1.2 | % |
| | | | Total Corporate Education Software | | | | | | | | | 475,698 | | | | 4,624,002 | | | | 1.2 | % |
GreyHeller LLC (h) | | Cyber Security | | Common Stock | | 11/10/2021 | | | 7,857,689 | | | | 1,906,275 | | | | 3,437,554 | | | | 0.9 | % |
| | | | Total Cyber Security | | | | | | | | | 1,906,275 | | | | 3,437,554 | | | | 0.9 | % |
Saratoga Investment Corp.
Consolidated Schedule of Investments
November 30, 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 | | Dental Practice Management | | First Lien Term Loan (6M USD TERM SOFR+5.50%), 9.88% Cash, 5/13/2030 | | 5/13/2024 | | $ | 7,125,000 | | | | 7,056,826 | | | | 7,073,700 | | | | 1.9 | % |
Gen4 Dental Partners Holdings, LLC (j) | | Dental Practice Management | | Delayed Draw Term Loan (6M USD TERM SOFR+5.50%), 9.88% 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%), 9.88% 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 | | | | 1,002,818 | | | | 0.3 | % |
Modis Dental Partners OpCo, LLC | | Dental Practice Management | | First Lien Term Loan (1M USD TERM SOFR+9.43%), 13.96% Cash, 4/18/2028 | | 4/18/2023 | | $ | 7,000,000 | | | | 6,918,971 | | | | 7,140,000 | | | | 1.9 | % |
Modis Dental Partners OpCo, LLC (j) | | Dental Practice Management | | Delayed Draw Term Loan (1M USD TERM SOFR+9.43%), 13.96% Cash, 4/18/2028 | | 4/18/2023 | | $ | 8,600,000 | | | | 8,490,633 | | | | 8,772,000 | | | | 2.3 | % |
Modis Dental Partners OpCo, LLC (h) | | Dental Practice Management | | Class A Preferred Units | | 4/18/2023 | | | 2,950,000 | | | | 2,950,000 | | | | 2,639,985 | | | | 0.7 | % |
New England Dental Partners | | Dental Practice Management | | First Lien Term Loan (3M USD TERM SOFR+8.00%), 12.62% Cash, 11/25/2025 | | 11/25/2020 | | $ | 6,555,000 | | | | 6,538,499 | | | | 6,625,794 | | | | 1.8 | % |
New England Dental Partners | | Dental Practice Management | | Delayed Draw Term Loan (3M USD TERM SOFR+8.00%), 12.62% Cash, 11/25/2025 | | 11/25/2020 | | $ | 2,150,000 | | | | 2,147,430 | | | | 2,173,220 | | | | 0.6 | % |
| | | | Total Dental Practice Management | | | | | | | | | 35,129,878 | | | | 35,427,517 | | | | 9.5 | % |
Exigo, LLC (d) | | Direct Selling Software | | First Lien Term Loan (1M USD TERM SOFR+6.25%), 10.88% Cash, 3/16/2027 | | 3/16/2022 | | $ | 24,127,538 | | | | 24,010,777 | | | | 23,343,393 | | | | 6.2 | % |
Exigo, LLC (j) | | Direct Selling Software | | Revolving Credit Facility (1M USD TERM SOFR+6.25%), 10.88% Cash, 3/16/2027 | | 3/16/2022 | | $ | - | | | | - | | | | (20,313 | ) | | | 0.0 | % |
Exigo, LLC (h), (i) | | Direct Selling Software | | Common Units | | 3/16/2022 | | | 1,041,667 | | | | 1,041,667 | | | | 747,131 | | | | 0.2 | % |
| | | | Total Direct Selling Software | | | | | | | | | 25,052,444 | | | | 24,070,211 | | | | 6.4 | % |
C2 Educational Systems, Inc. (d) | | Education Services | | First Lien Term Loan (3M USD TERM SOFR+8.50%), 12.97% Cash, 5/31/2025 | | 5/31/2017 | | $ | 23,000,000 | | | | 22,984,603 | | | | 22,981,600 | | | | 6.1 | % |
C2 Educational Systems, Inc. (j) | | Education Services | | Delayed Draw Term Loan (3M USD TERM SOFR+8.50%), 12.97% 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 | | | | 598,074 | | | | 0.2 | % |
| | | | Total Education Services | | | | | | | | | 23,484,507 | | | | 23,579,674 | | | | 6.3 | % |
Saratoga Investment Corp.
Consolidated Schedule of Investments
November 30, 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 | | | | 11,292,087 | | | | 3.0 | % |
GoReact | | Education Software | | First Lien Term Loan (3M USD TERM SOFR+7.50%), 12.17% Cash/1.00% PIK, 1/17/2025 | | 1/17/2020 | | $ | 8,142,981 | | | | 8,139,422 | | | | 8,142,981 | | | | 2.2 | % |
GoReact (j) | | Education Software | | Delayed Draw Term Loan (3M USD TERM SOFR+7.50%), 12.17% 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 | | | | 1,178,242 | | | | 0.3 | % |
Identity Automation Systems (h) | | Education Software | | Common Stock Class A-1 Units | | 3/6/2020 | | | 43,715 | | | | 171,571 | | | | 322,576 | | | | 0.1 | % |
Ready Education (d) | | Education Software | | First Lien Term Loan (3M USD TERM SOFR+7.00%), 11.47% Cash, 8/5/2027 | | 8/5/2022 | | $ | 27,000,000 | | | | 26,827,805 | | | | 26,878,500 | | | | 7.2 | % |
| | | | Total Education Software | | | | | | | | | 39,340,705 | | | | 47,814,386 | | | | 12.8 | % |
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%), 10.97% Cash, 11/30/2025 | | 9/6/2019 | | $ | 6,000,000 | | | | 6,000,000 | | | | 6,001,800 | | | | 1.6 | % |
Davisware, LLC (j) | | Field Service Management | | Delayed Draw Term Loan (3M USD TERM SOFR+6.50%), 10.97% Cash, 11/30/2025 | | 9/6/2019 | | $ | 5,477,790 | | | | 5,477,790 | | | | 5,479,433 | | | | 1.5 | % |
| | | | Total Field Service Management | | | | | | | | | 11,477,790 | | | | 11,481,233 | | | | 3.1 | % |
GDS Software Holdings, LLC | | Financial Services | | First Lien Term Loan (3M USD TERM SOFR+7.00%), 11.47% Cash, 12/30/2026 | | 12/30/2021 | | $ | 22,713,926 | | | | 22,640,119 | | | | 22,691,212 | | | | 6.1 | % |
GDS Software Holdings, LLC (d) | | Financial Services | | Delayed Draw Term Loan (3M USD TERM SOFR+7.00%), 11.47% Cash, 12/30/2026 | | 12/30/2021 | | $ | 3,286,074 | | | | 3,265,729 | | | | 3,282,788 | | | | 0.9 | % |
GDS Software Holdings, LLC (h) | | Financial Services | | Common Stock Class A Units | | 8/23/2018 | | | 250,000 | | | | 250,000 | | | | 440,785 | | | | 0.1 | % |
| | | | Total Financial Services | | | | | | | | | 26,155,848 | | | | 26,414,785 | | | | 7.1 | % |
Ascend Software, LLC | | Financial Services Software | | First Lien Term Loan (3M USD TERM SOFR+7.50%), 12.23% Cash, 12/15/2026 | | 12/15/2021 | | $ | 6,000,000 | | | | 5,970,627 | | | | 5,977,200 | | | | 1.6 | % |
Ascend Software, LLC (j) | | Financial Services Software | | Delayed Draw Term Loan (3M USD TERM SOFR+7.50%), 12.23% Cash, 12/15/2026 | | 12/15/2021 | | $ | 4,050,000 | | | | 4,035,166 | | | | 4,034,610 | | | | 1.1 | % |
| | | | Total Financial Services Software | | | | | | | | | 10,005,793 | | | | 10,011,810 | | | | 2.7 | % |
Saratoga Investment Corp.
Consolidated Schedule of Investments
November 30, 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%), 11.03% Cash, 07/19/2028 | | 7/19/2023 | | $ | 10,000,000 | | | | 9,918,672 | | | | 10,150,000 | | | | 2.7 | % |
Inspect Point Holdings, LLC (j) | | Fire Inspection Business Software | | Delayed Draw Term Loan (1M USD TERM SOFR+6.50%), 11.03% Cash, 07/19/2028 | | 7/19/2023 | | $ | - | | | | - | | | | - | | | | 0.0 | % |
| | | | Total Fire Inspection Business Software | | | | | | | | | 9,918,672 | | | | 10,150,000 | | | | 2.7 | % |
Stretch Zone Franchising, LLC (d) | | Health/Fitness Franchisor | | First Lien Term Loan (3M USD TERM SOFR+7.00%), 11.47% Cash, 3/31/2028 | | 3/31/2023 | | $ | 28,717,271 | | | | 28,496,472 | | | | 28,430,099 | | | | 7.6 | % |
Stretch Zone Franchising, LLC (j) | | Health/Fitness Franchisor | | Delayed Draw Term Loan (3M USD TERM SOFR+7.00%), 11.47% 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 | | | | 1,579,066 | | | | 0.4 | % |
| | | | Total Health/Fitness Franchisor | | | | | | | | | 30,496,472 | | | | 30,009,165 | | | | 8.0 | % |
Alpha Aesthetics Partners OpCo, LLC | | Healthcare Services | | First Lien Term Loan (1M USD TERM SOFR+9.93%), 14.46% Cash, 3/20/2028 | | 3/20/2023 | | $ | 3,900,000 | | | | 3,854,880 | | | | 3,978,000 | | | | 1.2 | % |
Alpha Aesthetics Partners OpCo, LLC (j) | | Healthcare Services | | Delayed Draw Term Loan (1M USD TERM SOFR+9.93%), 14.46% Cash, 3/20/2028 | | 3/20/2023 | | $ | 11,447,385 | | | | 11,305,102 | | | | 11,676,333 | | | | 3.1 | % |
Alpha Aesthetics Partners OpCo, LLC (h) | | Healthcare Services | | Class A Preferred Units | | 3/20/2023 | | | 3,675,000 | | | | 3,675,000 | | | | 3,624,323 | | | | 1.0 | % |
Axiom Medical Consulting, LLC | | Healthcare Services | | First Lien Term Loan (3M USD TERM SOFR+6.00%), 10.47% Cash, 9/11/2028 | | 9/11/2023 | | $ | 10,000,000 | | | | 9,928,579 | | | | 10,082,000 | | | | 2.7 | % |
Axiom Medical Consulting, LLC (j) | | Healthcare Services | | Delayed Draw Term Loan (3M USD TERM SOFR+6.00%), 10.47% 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 | | | | 628,910 | | | | 0.2 | % |
ComForCare Health Care (d) | | Healthcare Services | | First Lien Term Loan (3M USD TERM SOFR+6.25%), 10.72% Cash, 12/31/2027 | | 1/31/2017 | | $ | 55,000,000 | | | | 54,735,947 | | | | 55,220,000 | | | | 14.7 | % |
| | | | Total Healthcare Services | | | | | | | | | 83,757,897 | | | | 85,209,566 | | | | 22.9 | % |
Saratoga Investment Corp.
Consolidated Schedule of Investments
November 30, 2024
(unaudited)
Company(1) | | Industry | | Investment Interest Rate/ Maturity | | Original Acquisition Date | | Principal/ Number of Shares | | | Cost | | | Fair Value (c) | | | % of Net Assets | |
Procurement Partners, LLC | | Healthcare Software | | First Lien Term Loan (3M USD TERM SOFR+6.50%), 10.97% Cash, 5/12/2026 | | 11/12/2020 | | $ | 35,125,000 | | | | 35,010,241 | | | | 35,125,000 | | | | 9.4 | % |
Procurement Partners, LLC | | Healthcare Software | | Delayed Draw Term Loan (3M USD TERM SOFR+6.50%), 10.97% Cash, 5/12/2026 | | 11/12/2020 | | $ | 10,300,000 | | | | 10,277,796 | | | | 10,300,000 | | | | 2.7 | % |
Procurement Partners Holdings LLC (h) | | Healthcare Software | | Class A Units | | 11/12/2020 | | | 571,219 | | | | 571,219 | | | | 409,679 | | | | 0.1 | % |
Procurement Partners Holdings LLC (h) | | Healthcare Software | | Class AA Units | | 11/12/2020 | | | 220,385 | | | | 30,994 | | | | 108,206 | | | | 0.0 | % |
| | | | Total Healthcare Software | | | | | | | | | 45,890,250 | | | | 45,942,885 | | | | 12.2 | % |
Roscoe Medical, Inc. (h) | | Healthcare Supply | | Common Stock | | 3/26/2014 | | | 5,081 | | | | 508,077 | | | | - | | | | 0.0 | % |
| | | | Total Healthcare Supply | | | | | | | | | 508,077 | | | | - | | | | 0.0 | % |
Granite Comfort, LP (d) | | HVAC Services and Sales | | First Lien Term Loan (3M USD TERM SOFR+7.41%), 11.88% Cash, 5/16/2027 | | 11/16/2020 | | $ | 43,000,000 | | | | 42,821,673 | | | | 42,389,400 | | | | 11.3 | % |
Granite Comfort, LP (j)(d) | | HVAC Services and Sales | | Delayed Draw Term Loan (3M USD TERM SOFR+7.41%), 11.88% Cash, 5/16/2027 | | 11/16/2020 | | $ | 16,207,805 | | | | 16,086,197 | | | | 15,977,654 | | | | 4.3 | % |
| | | | Total HVAC Services and Sales | | | | | | | | | 58,907,870 | | | | 58,367,054 | | | | 15.6 | % |
Vector Controls Holding Co., LLC (h) | | Industrial Products | | Warrants to Purchase Limited Liability Company Interests, Expires 3/6/2025 | | 5/31/2015 | | | 343 | | | | - | | | | 8,726,466 | | | | 2.3 | % |
| | | | Total Industrial Products | | | | | | | | | - | | | | 8,726,466 | | | | 2.3 | % |
AgencyBloc, LLC | | Insurance Software | | First Lien Term Loan (1M USD TERM SOFR+7.76%), 12.29% Cash, 10/1/2026 | | 10/1/2021 | | $ | 15,675,341 | | | | 15,600,419 | | | | 15,692,584 | | | | 4.2 | % |
Panther ParentCo LLC (h) | | Insurance Software | | Class A Units | | 10/1/2021 | | | 2,500,000 | | | | 2,500,000 | | | | 4,692,238 | | | | 1.3 | % |
| | | | Total Insurance Software | | | | | | | | | 18,100,419 | | | | 20,384,822 | | | | 5.5 | % |
Saratoga Investment Corp.
Consolidated Schedule of Investments
November 30, 2024
(unaudited)
Company(1) | | Industry | | Investment Interest Rate/ Maturity | | Original Acquisition Date | | Principal/ Number of Shares | | | Cost | | | Fair Value (c) | | | % of Net Assets | |
Avantra (Maple Holdings Midco Limited) | | IT Services | | First Lien Term Loan (3M USD TERM SOFR+7.97%), 12.44% Cash, 9/20/2029 | | 9/19/2024 | | $ | 17,000,000 | | | | 16,816,077 | | | | 16,809,600 | | | | 4.5 | % |
Maple Holdings Midco Limited (h) | | IT Services | | Class A Common Units | | 9/19/2024 | | | 2,000,000 | | | | 2,000,000 | | | | 2,000,000 | | | | 0.5 | % |
| | | | Total IT Services | | | | | | | | | 18,816,077 | | | | 18,809,600 | | | | 5.0 | % |
ActiveProspect, Inc. (d) | | Lead Management Software | | First Lien Term Loan (3M USD TERM SOFR+6.00%), 10.67% Cash, 8/8/2027 | | 8/8/2022 | | $ | 11,525,624 | | | | 11,462,397 | | | | 11,640,880 | | | | 3.1 | % |
ActiveProspect, Inc. (j) | | Lead Management Software | | Delayed Draw Term Loan (3M USD TERM SOFR+6.00%), 10.67% Cash, 8/8/2027 | | 8/8/2022 | | $ | - | | | | - | | | | - | | | | 0.0 | % |
| | | | Total Lead Management Software | | | | | | | | | 11,462,397 | | | | 11,640,880 | | | | 3.1 | % |
Madison Logic, Inc. (d)(m) | | Marketing Orchestration Software | | First Lien Term Loan (1M USD TERM SOFR+7.50%), 12.03% Cash, 12/30/2028 | | 12/30/2022 | | $ | 18,775,160 | | | | 18,565,083 | | | | 18,433,452 | | | | 4.9 | % |
| | | | Total Marketing Orchestration Software | | | | | | | | | 18,565,083 | | | | 18,433,452 | | | | 4.9 | % |
ARC Health OpCo LLC (d) | | Mental Healthcare Services | | First Lien Term Loan (3M USD TERM SOFR+8.40%), 12.86% Cash, 8/5/2027 | | 8/5/2022 | | $ | 6,500,000 | | | | 6,448,840 | | | | 6,193,200 | | | | 1.7 | % |
ARC Health OpCo LLC (d) | | Mental Healthcare Services | | Delayed Draw Term Loan (3M USD TERM SOFR+8.40%), 12.86% Cash, 8/5/2027 | | 8/5/2022 | | $ | 26,914,577 | | | | 26,905,399 | | | | 25,644,209 | | | | 6.8 | % |
ARC Health OpCo LLC (h) | | Mental Healthcare Services | | Class A Preferred Units | | 8/5/2022 | | | 3,818,400 | | | | 4,169,599 | | | | 610,944 | | | | 0.2 | % |
| | | | Total Mental Healthcare Services | | | | | | | | | 37,523,838 | | | | 32,448,353 | | | | 8.7 | % |
Chronus LLC | | Mentoring Software | | First Lien Term Loan (3M USD TERM SOFR+5.25%), 9.87% Cash, 8/26/2026 | | 8/26/2021 | | $ | 15,000,000 | | | | 14,934,015 | | | | 14,869,500 | | | | 4.0 | % |
Chronus LLC (d) | | Mentoring Software | | First Lien Term Loan (3M USD TERM SOFR+6.00%), 10.62% Cash, 8/26/2026 | | 8/26/2021 | | $ | 5,000,000 | | | | 4,970,378 | | | | 4,956,500 | | | | 1.3 | % |
Chronus LLC (h) | | Mentoring Software | | Series A Preferred Stock | | 8/26/2021 | | | 3,000 | | | | 3,000,000 | | | | 2,070,892 | | | | 0.6 | % |
| | | | Total Mentoring Software | | | | | | | | | 22,904,393 | | | | 21,896,892 | | | | 5.9 | % |
Saratoga Investment Corp.
Consolidated Schedule of Investments
November 30, 2024
(unaudited)
Company(1) | | Industry | | Investment Interest Rate/ Maturity | | Original Acquisition Date | | Principal/ Number of Shares | | | Cost | | | Fair Value (c) | | | % of Net Assets | |
Cloudpermit Intermediate Holding Company | | Municipal Government Software | | First Lien Term Loan (3M USD TERM SOFR+5.75%), 10.22% Cash, 9/5/2029 | | 9/5/2024 | | $ | 28,000,000 | | | | 27,730,175 | | | | 27,720,000 | | | | 7.4 | % |
Cloudpermit Intermediate Holding Company (j) | | Municipal Government Software | | Delayed Draw Term Loan (3M USD TERM SOFR+5.75%), 10.22% Cash, 9/5/2029 | | 9/5/2024 | | $ | - | | | | - | | | | - | | | | 0.0 | % |
Cloudpermit Intermediate Holding Company (h) | | Municipal Government Software | | Limited Partner Interests | | 9/5/2024 | | | 2,000 | | | | 2,000,000 | | | | 2,000,000 | | | | 0.5 | % |
| | | | Total Municipal Government Software | | | | | | | | | 29,730,175 | | | | 29,720,000 | | | | 7.9 | % |
Omatic Software, LLC (d) | | Non-profit Services | | First Lien Term Loan (3M USD TERM SOFR+8.00%), 12.73% Cash/1.00% PIK, 6/30/2025 | | 5/29/2018 | | $ | 16,381,249 | | | | 16,366,585 | | | | 16,428,755 | | | | 4.4 | % |
| | | | Total Non-profit Services | | | | | | | | | 16,366,585 | | | | 16,428,755 | | | | 4.4 | % |
Emily Street Enterprises, L.L.C. (d) | | Office Supplies | | Senior Secured Note (3M USD TERM SOFR+6.25%), 11.00% Cash, 12/31/2027 | | 12/28/2012 | | $ | 4,000,000 | | | | 3,995,859 | | | | 4,018,000 | | | | 1.1 | % |
Emily Street Enterprises, L.L.C. (h) | | Office Supplies | | Warrant Membership Interests, Expires 12/31/2027 | | 12/28/2012 | | | 49,318 | | | | 400,000 | | | | 1,428,364 | | | | 0.4 | % |
| | | | Total Office Supplies | | | | | | | | | 4,395,859 | | | | 5,446,364 | | | | 1.5 | % |
Buildout, Inc. (d) | | Real Estate Services | | First Lien Term Loan (3M USD TERM SOFR+7.00%), 11.57% Cash, 7/9/2025 | | 7/9/2020 | | $ | 14,000,000 | | | | 13,973,317 | | | | 13,588,400 | | | | 3.6 | % |
Buildout, Inc. | | Real Estate Services | | Delayed Draw Term Loan (3M USD TERM SOFR+7.00%), 11.57% Cash, 7/9/2025 | | 2/12/2021 | | $ | 38,500,000 | | | | 38,417,815 | | | | 37,368,100 | | | | 10.0 | % |
Buildout, Inc. (h)(i) | | Real Estate Services | | Limited Partner Interests | | 7/9/2020 | | | 1,250 | | | | 1,372,557 | | | | 846,303 | | | | 0.2 | % |
| | | | Total Real Estate Services | | | | | | | | | 53,763,689 | | | | 51,802,803 | | | | 13.8 | % |
Wellspring Worldwide Inc. | | Research Software | | First Lien Term Loan (3M USD TERM SOFR+8.42%), 12.89% Cash, 12/22/2028 | | 6/27/2022 | | $ | 9,552,000 | | | | 9,481,207 | | | | 9,552,000 | | | | 2.5 | % |
Wellspring Worldwide Inc. | | Research Software | | Delayed DrawTerm Loan (3M USD TERM SOFR+8.42%), 12.89% Cash, 12/22/2028 | | 6/27/2022 | | $ | 14,400,000 | | | | 14,246,419 | | | | 14,400,000 | | | | 3.8 | % |
Archimedes Parent LLC (h) | | Research Software | | Class A Common Units | | 6/27/2022 | | | 2,475,160 | | | | 2,475,160 | | | | 2,421,510 | | | | 0.6 | % |
| | | | Total Research Software | | | | | | | | | 26,202,786 | | | | 26,373,510 | | | | 6.9 | % |
Saratoga Investment Corp.
Consolidated Schedule of Investments
November 30, 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%), 11.53% Cash, 11/19/2026 | | 11/19/2021 | | $ | 12,000,000 | | | | 11,945,149 | | | | 12,000,000 | | | | 3.2 | % |
LFR Chicken LLC (j) | | Restaurant | | Delayed Draw Term Loan (1M USD TERM SOFR+7.00%), 11.53% Cash, 11/19/2026 | | 11/19/2021 | | $ | 18,000,000 | | | | 17,855,726 | | | | 18,000,000 | | | | 4.8 | % |
LFR Chicken LLC (h) | | Restaurant | | Series B Preferred Units | | 11/19/2021 | | | 497,183 | | | | 1,000,000 | | | | 1,534,323 | | | | 0.4 | % |
| | | | Total Restaurant | | | | | | | | | 30,800,875 | | | | 31,534,323 | | | | 8.4 | % |
Avionte Holdings, LLC (h) | | Staffing Services | | Class A Units | | 1/8/2014 | | | 100,000 | | | | 100,000 | | | | 3,136,598 | | | | 0.8 | % |
| | | | Total Staffing Services | | | | | | | | | 100,000 | | | | 3,136,598 | | | | 0.8 | % |
JDXpert | | Talent Acquisition Software | | First Lien Term Loan (3M USD TERM SOFR+8.50%), 13.23% Cash, 5/2/2027 | | 5/2/2022 | | $ | 6,000,000 | | | | 5,963,746 | | | | 6,060,000 | | | | 1.6 | % |
JDXpert | | Talent Acquisition Software | | Delayed Draw Term Loan (3M USD TERM SOFR+8.50%), 13.23% Cash, 5/2/2027 | | 5/2/2022 | | $ | 1,000,000 | | | | 992,919 | | | | 1,010,000 | | | | 0.3 | % |
JDXpert (j) | | Talent Acquisition Software | | Delayed Draw Term Loan (3M USD TERM SOFR+8.50%), 13.23% Cash, 5/2/2027 | | 3/31/2023 | | $ | 500,000 | | | | 495,614 | | | | 505,000 | | | | 0.1 | % |
Jobvite, Inc. (d) | | Talent Acquisition Software | | First Lien Term Loan (3M USD TERM SOFR+7.50%), 11.97% Cash, 8/5/2028 | | 8/5/2022 | | $ | 20,000,000 | | | | 19,893,434 | | | | 19,878,000 | | | | 5.3 | % |
| | | | Total Talent Acquisition Software | | | | | | | | | 27,345,713 | | | | 27,453,000 | | | | 7.3 | % |
VetnCare MSO, LLC (j) | | Veterinary Services | | Delayed Draw Term Loan (3M USD TERM SOFR+5.75%), 10.22% Cash, 5/12/2028 | | 5/12/2023 | | $ | 12,680,505 | | | | 12,569,302 | | | | 12,671,625 | | | | 3.4 | % |
| | | | Total Veterinary Services | | | | | | | | | 12,569,302 | | | | 12,671,625 | | | | 3.4 | % |
Sub Total Non-control/Non-affiliate investments | | | | | | | | | | | | | 852,158,089 | | | | 875,707,680 | | | | 234.0 | % |
Saratoga Investment Corp.
Consolidated Schedule of Investments
November 30, 2024
(unaudited)
Company(1) | | Industry | | Investment Interest Rate/ Maturity | | Original Acquisition Date | | Principal/ Number of Shares | | | Cost | | | Fair Value (c) | | | % of Net Assets | |
Affiliate investments - 10.5% (b) | | | | | | | | | | | | | | | | | | | | | | |
ETU Holdings, Inc. (f) | | Corporate Education Software | | First Lien Term Loan (3M USD TERM SOFR+9.00%), 13.62% Cash, 8/18/2027 | | 8/18/2022 | | $ | 7,000,000 | | | | 6,954,826 | | | | 6,977,600 | | | | 1.9 | % |
ETU Holdings, Inc. (f) | | Corporate Education Software | | Second Lien Term Loan 15.00% PIK, 2/18/2028 | | 8/18/2022 | | $ | 6,862,855 | | | | 6,826,569 | | | | 6,140,197 | | | | 1.6 | % |
ETU Holdings, Inc. (f)(h) | | Corporate Education Software | | Series A Preferred Units | | 8/18/2022 | | | 3,000,000 | | | | 3,000,000 | | | | - | | | | 0.0 | % |
| | | | Total Corporate Education Software | | | | | | | | | 16,781,395 | | | | 13,117,797 | | | | 3.5 | % |
Axero Holdings, LLC (f) | | Employee Collaboration Software | | First Lien Term Loan 4.50% Cash, (3M USD TERM SOFR + 2.50%) PIK, 12/31/2027 | | 6/30/2021 | | $ | 15,653,168 | | | | 15,629,225 | | | | 15,653,168 | | | | 4.2 | % |
Axero Holdings, LLC (f) | | Employee Collaboration Software | | Delayed Draw Term Loan 4.50% Cash, (3M USD TERM SOFR + 2.50%) PIK, 12/31/2027 | | 6/30/2021 | | $ | 1,110,870 | | | | 1,105,403 | | | | 1,110,870 | | | | 0.3 | % |
Axero Holdings, LLC (f)(j) | | Employee Collaboration Software | | Revolving Credit Facility 4.50% Cash, (3M USD TERM SOFR + 2.50%) PIK, 12/31/2027 | | 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 | | | | 3,403,000 | | | | 0.9 | % |
Axero Holdings, LLC (f)(h) | | Employee Collaboration Software | | Series B Preferred Units | | 6/30/2021 | | | 2,055,609 | | | | 2,055,609 | | | | 6,518,621 | | | | 1.6 | % |
| | | | Total Employee Collaboration Software | | | | | | | | | 20,845,846 | | | | 26,685,659 | | | | 7.0 | % |
Sub Total Affiliate investments | | | | | | | | | | | | | 37,627,241 | | | | 39,803,456 | | | | 10.5 | % |
Saratoga Investment Corp.
Consolidated Schedule of Investments
November 30, 2024
(unaudited)
Company(1) | | Industry | | Investment Interest Rate/ Maturity | | Original Acquisition Date | | Principal/ Number of Shares | | | Cost | | | Fair Value (c) | | | % of Net Assets | |
Control investments - 12.0% (b) | | | | | | | | | | | | | | | | | | | | | | |
Zollege PBC (k)(g) | | Education Services | | First Lien Term Loan 4.84% PIK, 8/9/2027 | | 5/11/2021 | | $ | 1,461,250 | | | | 1,461,250 | | | | 1,103,390 | | | | 0.3 | % |
Zollege PBC (h)(g) | | Education Services | | Common Stock | | 5/11/2021 | | | 7,731,294 | | | | 558,799 | | | | 3,101,000 | | | | 0.8 | % |
| | | | Total Education Services | | | | | | | | | 2,020,049 | | | | 4,204,390 | | | | 1.1 | % |
Pepper Palace, Inc. (k)(g) | | Specialty Food Retailer | | First Lien Term Loan 4.42% PIK, 12/31/2028 | | 6/30/2021 | | $ | 2,400,000 | | | | 2,400,000 | | | | 1,349,520 | | | | 0.4 | % |
Pepper Palace, Inc. (j)(k)(g) | | Specialty Food Retailer | | Delayed Draw Term Loan 4.42% PIK, 12/31/2028 | | 6/30/2021 | | $ | - | | | | - | | | | - | | | | 0.0 | % |
Pepper Palace, Inc. (j)(k)(g) | | Specialty Food Retailer | | Revolving Credit Facility 4.42% PIK, 12/31/2028 | | 6/30/2021 | | $ | 400,000 | | | | 400,000 | | | | 224,920 | | | | 0.1 | % |
Pepper Palace, Inc. (h)(g) | | Specialty Food Retailer | | Class A Units | | 6/30/2021 | | | 100,000 | | | | 138,561 | | | | - | | | | 0.0 | % |
| | | | Total Specialty Food Retailer | | | | | | | | | 2,938,561 | | | | 1,574,440 | | | | 0.5 | % |
Saratoga Investment Corp. CLO 2013-1, Ltd. (a)(e)(g) | | Structured Finance Securities | | Other/Structured Finance Securities 0.00%, 4/20/2033 | | 1/22/2008 | | $ | 111,000,000 | | | | 16,628,297 | | | | 1,269,512 | | | | 0.3 | % |
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%), 14.73%, 4/20/2033 | | 8/9/2021 | | $ | 9,375,000 | | | | 9,375,000 | | | | 4,332,188 | | | | 1.2 | % |
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%), 13.02%, 10/20/2033 | | 10/28/2022 | | $ | 12,250,000 | | | | 11,392,500 | | | | 12,250,000 | | | | 3.3 | % |
| | | | Total Structured Finance Securities | | | | | | | | | 37,395,797 | | | | 17,851,700 | | | | 4.8 | % |
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 | | | | 16,198,866 | | | | 4.3 | % |
Saratoga Senior Loan Fund I JV, LLC (a)(g) | | Investment Fund | | Membership Interest | | 12/17/2021 | | | 17,583,486 | | | | 17,583,486 | | | | 4,752,700 | | | | 1.3 | % |
| | | | Total Investment Fund | | | | | | | | | 35,202,440 | | | | 20,951,566 | | | | 5.6 | % |
Sub Total Control investments | | | | | | | | | | | | | 77,556,847 | | | | 44,582,096 | | | | 12.0 | % |
TOTAL INVESTMENTS - 256.5% (b) | | | | | | | | | | | | $ | 967,342,177 | | | $ | 960,093,232 | | | | 256.5 | % |
| | Number of Shares | | | Cost | | | Fair Value | | | % of Net Assets | |
Cash and cash equivalents and cash and cash equivalents, reserve accounts - 66.7% (b) | | | | | | | | | | | | |
U.S. Bank Money Market (l) | | | 250,164,023 | | | $ | 250,164,023 | | | $ | 250,164,023 | | | | 66.7 | % |
Total cash and cash equivalents and cash and cash equivalents, reserve accounts | | | 250,164,023 | | | $ | 250,164,023 | | | $ | 250,164,023 | | | | 66.7 | % |
| (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 November 30, 2024, non-qualifying assets represent 4.0% 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 $374,865,655 as of November 30, 2024. |
Saratoga Investment Corp.
Consolidated Schedule of Investments
November 30, 2024
(unaudited)
| (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 nine months ended November 30, 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 | | $ | 10,000 | | | $ | - | | | $ | 835,832 | | | $ | - | | | $ | - | | | $ | 2,363,153 | |
ETU Holdings, Inc. | | | - | | | | - | | | | 1,526,595 | | | | - | | | | - | | | | (1,228,660 | ) |
Total | | $ | 10,000 | | | $ | - | | | $ | 2,362,427 | | | $ | - | | | $ | - | | | $ | 1,134,493 | |
| (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 nine months ended November 30, 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 | | | $ | 921,530 | | | $ | - | | | $ | - | | | $ | (5,445,808 | ) | | $ | 3,802,854 | |
Pepper Palace, Inc. | | | 1,050,000 | | | | - | | | | 1,338 | | | | - | | | | - | | | | (34,007,427 | ) | | | (1,364,121 | ) |
Zollege PBC | | | 200,000 | | | | 209,460 | | | | 110,862 | | | | - | | | | - | | | | (15,110,835 | ) | | | 2,184,341 | |
Saratoga Investment Corp. CLO 2013-1, Ltd. | | | - | | | | - | | | | - | | | | - | | | | 2,372,177 | | | | - | | | | (2,857,525 | ) |
Saratoga Investment Corp. Senior Loan Fund 2022-1, Ltd. Class E Note | | | - | | | | - | | | | 1,287,028 | | | | - | | | | - | | | | - | | | | - | |
Saratoga Investment Corp. CLO 2013-1, Ltd. Class F-2-R-3 Note | | | - | | | | - | | | | 1,107,547 | | | | - | | | | - | | | | - | | | | (4,543,039 | ) |
Saratoga Senior Loan Fund I JV, LLC | | | - | | | | - | | | | 1,321,422 | | | | - | | | | - | | | | - | | | | 380,569 | |
Saratoga Senior Loan Fund I JV, LLC | | | - | | | | - | | | | - | | | | 3,160,742 | | | | - | | | | - | | | | (4,651,295 | ) |
Total | | $ | 1,250,000 | | | $ | 2,469,797 | | | $ | 4,749,727 | | | $ | 3,160,742 | | | $ | 2,372,177 | | | $ | (54,564,070 | ) | | $ | (7,048,216 | ) |
| (h) | Non-income producing at November 30, 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 November 30, 2024. (See Note 9 to the consolidated financial statements). |
| (k) | As of November 30, 2024, the investment was on non-accrual status. The fair value of these investments was approximately $2.7 million, which represented 0.3% 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 November 30, 2024. |
(m) | This investment elected to PIK 20% of accrued interest, with 80% of accrued interest payable in cash. |
SOFR - Secured Overnight Financing Rate
1M USD TERM SOFR - The 1 month USD TERM SOFR rate as of November 30, 2024 was 4.53%.
3M USD TERM SOFR - The 3 month USD TERM SOFR rate as of November 30, 2024 was 4.47%.
6M USD TERM SOFR - The 6 month USD TERM SOFR rate as of November 30, 2024 was 4.38%.
PIK - Payment-in-Kind (see Note 2 to the consolidated financial statements).
See accompanying notes to consolidated financial statements.
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 | % |
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 | % |
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 | |
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 | % |
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 | % |
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 | |
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 | | | 250,000 | | | | 250,000 | | | | - | | | | 0.0 | % |
| | | | Total Education Services | | | | | | | | | 39,927,391 | | | | 25,819,196 | | | | 7.0 | % |
Destiny Solutions Inc. (h)(i) | | Education Software | | Limited Partner Interests | | 5/16/2018 | | | 3,068 | | | | 3,969,291 | | | | 9,894,736 | | | | 2.7 | % |
GoReact | | Education Software | | First Lien Term Loan (3M USD TERM SOFR+7.50%), 13.03% Cash/1.00% PIK, 1/17/2025 | | 1/17/2020 | | $ | 8,087,775 | | | | 8,060,498 | | | | 8,087,775 | | | | 2.2 | % |
GoReact (j) | | Education Software | | Delayed Draw Term Loan (3M USD TERM SOFR+7.50%), 13.03% 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 | | | | 569,355 | | | | 0.2 | % |
Identity Automation Systems (h) | | Education Software | | Common Stock Class A-1 Units | | 3/6/2020 | | | 43,715 | | | | 171,571 | | | | 235,296 | | | | 0.1 | % |
Ready Education | | Education Software | | First Lien Term Loan (3M USD TERM SOFR+7.00%), 12.33% Cash, 8/5/2027 | | 8/5/2022 | | $ | 27,000,000 | | | | 26,797,063 | | | | 26,792,100 | | | | 7.2 | % |
| | | | Total Education Software | | | | | | | | | 39,231,039 | | | | 45,579,262 | | | | 12.4 | % |
TG Pressure Washing Holdings, LLC (h) | | Facilities Maintenance | | Preferred Equity | | 8/12/2019 | | | 488,148 | | | | 488,148 | | | | 231,181 | | | | 0.1 | % |
| | | | Total Facilities Maintenance | | | | | | | | | 488,148 | | | | 231,181 | | | | 0.1 | % |
Davisware, LLC | | Field Service Management | | First Lien Term Loan (3M USD TERM SOFR+7.00%), 12.33% Cash, 7/31/2024 | | 9/6/2019 | | $ | 6,000,000 | | | | 5,991,382 | | | | 5,989,200 | | | | 1.6 | % |
Davisware, LLC (j) | | Field Service Management | | Delayed Draw Term Loan (3M USD TERM SOFR+7.00%), 12.33% Cash, 7/31/2024 | | 9/6/2019 | | $ | 4,727,790 | | | | 4,714,256 | | | | 4,719,280 | | | | 1.3 | % |
| | | | Total Field Service Management | | | | | | | | | 10,705,638 | | | | 10,708,480 | | | | 2.9 | % |
GDS Software Holdings, LLC | | Financial Services | | First Lien Term Loan (3M USD TERM SOFR+7.00%), 12.33% Cash, 12/30/2026 | | 12/30/2021 | | $ | 22,713,926 | | | | 22,624,322 | | | | 22,545,843 | | | | 6.1 | % |
GDS Software Holdings, LLC | | Financial Services | | Delayed Draw Term Loan (3M USD TERM SOFR+7.00%), 12.33% Cash, 12/30/2026 | | 12/30/2021 | | $ | 3,286,074 | | | | 3,262,111 | | | | 3,261,757 | | | | 0.9 | % |
GDS Software Holdings, LLC (h) | | Financial Services | | Common Stock Class A Units | | 8/23/2018 | | | 250,000 | | | | 250,000 | | | | 468,204 | | | | 0.1 | % |
| | | | Total Financial Services | | | | | | | | | 26,136,433 | | | | 26,275,804 | | | | 7.1 | % |
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 | |
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 | | | | 5,961,680 | | | | 5,920,200 | | | | 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 | | | | 4,029,154 | | | | 3,996,135 | | | | 1.1 | % |
| | | | Total Financial Services Software | | | | | | | | | 9,990,834 | | | | 9,916,335 | | | | 2.7 | % |
Inspect Point Holdings, LLC | | Fire Inspection Business Software | | First Lien Term Loan (1M USD TERM SOFR+6.50%), 11.82% Cash, 07/19/2028 | | 7/19/2023 | | $ | 10,000,000 | | | | 9,908,861 | | | | 9,916,000 | | | | 2.7 | % |
Inspect Point Holdings, LLC (j) | | Fire Inspection Business Software | | First Lien Term Loan (1M USD TERM SOFR+6.50%), 11.82% Cash, 07/19/2028 | | 7/19/2023 | | $ | - | | | | - | | | | - | | | | 0.0 | % |
| | | | Total Fire Inspection Business Software | | | | | | | | | 9,908,861 | | | | 9,916,000 | | | | 2.7 | % |
Stretch Zone Franchising, LLC | | Health/Fitness Franchisor | | First Lien Term Loan (3M USD TERM SOFR+7.00%), 12.33% Cash, 3/31/2028 | | 3/31/2023 | | $ | 30,000,000 | | | | 29,740,931 | | | | 29,970,000 | | | | 8.1 | % |
Stretch Zone Franchising, LLC (j) | | Health/Fitness Franchisor | | Delayed Draw Term Loan (3M USD TERM SOFR+7.00%), 12.33% 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 | | | | 2,062,331 | | | | 0.6 | % |
| | | | Total Health/Fitness Franchisor | | | | | | | | | 31,740,931 | | | | 32,032,331 | | | | 8.7 | % |
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 | |
Alpha Aesthetics Partners OpCo, LLC | | Healthcare Services | | First Lien Term Loan (1M USD TERM SOFR+9.98%), 15.30% Cash, 3/20/2028 | | 3/20/2023 | | $ | 3,900,000 | | | | 3,847,845 | | | | 3,959,670 | | | | 1.2 | % |
Alpha Aesthetics Partners OpCo, LLC (j) | | Healthcare Services | | Delayed Draw Term Loan (1M USD TERM SOFR+9.98%), 15.30% Cash, 3/20/2028 | | 3/20/2023 | | $ | 8,600,000 | | | | 8,482,841 | | | | 8,731,580 | | | | 2.4 | % |
Alpha Aesthetics Partners OpCo, LLC (h) | | Healthcare Services | | Class A Preferred Units | | 3/20/2023 | | | 2,850,000 | | | | 2,850,000 | | | | 2,859,121 | | | | 0.8 | % |
Axiom Medical Consulting, LLC | | Healthcare Services | | First Lien Term Loan (3M USD TERM SOFR+6.00%), 11.33% Cash, 9/11/2028 | | 9/11/2023 | | $ | 10,000,000 | | | | 9,917,367 | | | | 9,913,000 | | | | 2.7 | % |
Axiom Medical Consulting, LLC (j) | | Healthcare Services | | Delayed Draw Term Loan (3M USD TERM SOFR+6.00%), 11.33% 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 | | | | 630,740 | | | | 0.2 | % |
ComForCare Health Care (d) | | Healthcare Services | | First Lien Term Loan (3M USD TERM SOFR+6.25%), 11.58% Cash, 1/31/2025 | | 1/31/2017 | | $ | 25,000,000 | | | | 24,973,000 | | | | 25,000,000 | | | | 6.8 | % |
| | | | Total Healthcare Services | | | | | | | | | 50,329,442 | | | | 51,094,111 | | | | 14.1 | % |
HemaTerra Holding Company, LLC (d) | | Healthcare Software | | First Lien Term Loan (1M USD TERM SOFR+8.25%), 13.57% Cash, 1/31/2027 | | 4/15/2019 | | $ | 54,927,713 | | | | 54,624,303 | | | | 55,087,003 | | | | 14.9 | % |
HemaTerra Holding Company, LLC | | Healthcare Software | | Delayed Draw Term Loan (1M USD TERM SOFR+8.25%), 13.57% Cash, 1/31/2027 | | 4/15/2019 | | $ | 13,755,875 | | | | 13,710,513 | | | | 13,795,767 | | | | 3.7 | % |
TRC HemaTerra, LLC (h) | | Healthcare Software | | Class D Membership Interests | | 4/15/2019 | | | 2,487 | | | | 2,816,693 | | | | 5,362,439 | | | | 1.4 | % |
Procurement Partners, LLC | | Healthcare Software | | First Lien Term Loan (3M USD TERM SOFR+6.50%), 11.83% Cash, 5/12/2026 | | 11/12/2020 | | $ | 35,125,000 | | | | 34,965,458 | | | | 35,125,000 | | | | 9.5 | % |
Procurement Partners, LLC (j) | | Healthcare Software | | Delayed Draw Term Loan (3M USD TERM SOFR+6.50%), 11.83% Cash, 5/12/2026 | | 11/12/2020 | | $ | 10,300,000 | | | | 10,230,001 | | | | 10,300,000 | | | | 2.8 | % |
Procurement Partners Holdings LLC (h) | | Healthcare Software | | Class A Units | | 11/12/2020 | | | 571,219 | | | | 571,219 | | | | 826,280 | | | | 0.2 | % |
| | | | Total Healthcare Software | | | | | | | | | 116,918,187 | | | | 120,496,489 | | | | 32.5 | % |
Roscoe Medical, Inc. (h) | | Healthcare Supply | | Common Stock | | 3/26/2014 | | | 5,081 | | | | 508,077 | | | | - | | | | 0.0 | % |
| | | | Total Healthcare Supply | | | | | | | | | 508,077 | | | | - | | | | 0.0 | % |
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 | |
Book4Time, Inc. (a)(d) | | Hospitality/Hotel | | First Lien Term Loan (3M USD TERM SOFR+7.50%), 12.83%, 12/22/2025 | | 12/22/2020 | | $ | 3,136,517 | | | | 3,122,542 | | | | 3,136,517 | | | | 0.8 | % |
Book4Time, Inc. (a) | | Hospitality/Hotel | | Delayed Draw Term Loan (3M USD TERM SOFR+7.50%), 12.83%, 12/22/2025 | | 12/22/2020 | | $ | 2,000,000 | | | | 1,989,839 | | | | 2,000,000 | | | | 0.5 | % |
Book4Time, Inc. (a)(h)(i) | | Hospitality/Hotel | | Class A Preferred Shares | | 12/22/2020 | | | 200,000 | | | | 156,826 | | | | 389,531 | | | | 0.1 | % |
Knowland Group, LLC (k) | | Hospitality/Hotel | | Second Lien Term Loan (3M USD TERM SOFR+8.00%), 13.48% Cash/3.00% PIK, 12/31/2024 | | 11/9/2018 | | $ | 15,878,989 | | | | 15,878,989 | | | | 12,642,851 | | | | 3.4 | % |
Sceptre Hospitality Resources, LLC | | Hospitality/Hotel | | First Lien Term Loan (3M USD TERM SOFR+7.25%), 12.58% Cash, 11/15/2027 | | 4/27/2020 | | $ | 23,000,000 | | | | 22,835,500 | | | | 23,278,300 | | | | 6.3 | % |
Sceptre Hospitality Resources, LLC (j) | | Hospitality/Hotel | | Delayed Draw Term Loan (3M USD TERM SOFR+7.25%), 12.58% Cash, 11/15/2027 | | 9/2/2021 | | $ | - | | | | - | | | | - | | | | 0.0 | % |
| | | | Total Hospitality/Hotel | | | | | | | | | 43,983,696 | | | | 41,447,199 | | | | 11.1 | % |
Granite Comfort, LP (d) | | HVAC Services and Sales | | First Lien Term Loan (3M USD TERM SOFR+7.46%), 12.79% Cash, 5/16/2027 | | 11/16/2020 | | $ | 43,000,000 | | | | 42,781,757 | | | | 43,000,000 | | | | 11.6 | % |
Granite Comfort, LP (j) | | HVAC Services and Sales | | Delayed Draw Term Loan (3M USD TERM SOFR+7.46%), 12.79% Cash, 5/16/2027 | | 11/16/2020 | | $ | 16,207,805 | | | | 16,059,588 | | | | 16,207,805 | | | | 4.4 | % |
| | | | Total HVAC Services and Sales | | | | | | | | | 58,841,345 | | | | 59,207,805 | | | | 16.0 | % |
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 | | | | 0.2 | % |
Vector Controls Holding Co., LLC (h) | | Industrial Products | | Warrants to Purchase Limited Liability Company Interests, Expires 11/30/2027 | | 5/31/2015 | | | 343 | | | | - | | | | 8,171,235 | | | | 2.2 | % |
| | | | Total Industrial Products | | | | | | | | | 923,886 | | | | 9,095,121 | | | | 2.4 | % |
AgencyBloc, LLC | | Insurance Software | | First Lien Term Loan (1M USD TERM SOFR+7.76%), 13.09% Cash, 10/1/2026 | | 10/1/2021 | | $ | 15,788,864 | | | | 15,686,250 | | | | 15,806,231 | | | | 4.3 | % |
Panther ParentCo LLC (h) | | Insurance Software | | Class A Units | | 10/1/2021 | | | 2,500,000 | | | | 2,500,000 | | | | 4,014,869 | | | | 1.1 | % |
| | | | Total Insurance Software | | | | | | | | | 18,186,250 | | | | 19,821,100 | | | | 5.4 | % |
LogicMonitor, Inc. (d) | | IT Services | | First Lien Term Loan (3M USD TERM SOFR+6.50%), 11.83% 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 | % |
ActiveProspect, Inc. (d) | | Lead Management Software | | First Lien Term Loan (3M USD TERM SOFR+6.00%), 11.53% Cash, 8/8/2027 | | 8/8/2022 | | $ | 12,000,000 | | | | 11,920,834 | | | | 12,120,000 | | | | 3.3 | % |
ActiveProspect, Inc. (j) | | Lead Management Software | | Delayed Draw Term Loan (3M USD TERM SOFR+6.00%), 11.53% Cash, 8/8/2027 | | 8/8/2022 | | $ | - | | | | - | | | | - | | | | 0.0 | % |
| | | | Total Lead Management Software | | | | | | | | | 11,920,834 | | | | 12,120,000 | | | | 3.3 | % |
Centerbase, LLC | | Legal Software | | First Lien Term Loan (3M USD TERM SOFR+7.75%), 13.08% Cash, 1/18/2027 | | 1/18/2022 | | $ | 21,033,360 | | | | 20,882,496 | | | | 20,709,446 | | | | 5.6 | % |
| | | | Total Legal Software | | | | | | | | | 20,882,496 | | | | 20,709,446 | | | | 5.6 | % |
Madison Logic, Inc. (d) | | Marketing Orchestration Software | | First Lien Term Loan (3M USD TERM SOFR+7.00%), 12.33% Cash, 12/30/2028 | | 12/30/2022 | | $ | 18,857,500 | | | | 18,544,720 | | | | 18,420,006 | | | | 5.0 | % |
| | | | Total Marketing Orchestration Software | | | | | | | | | 18,544,720 | | | | 18,420,006 | | | | 5.0 | % |
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 | |
ARC Health OpCo LLC (d) | | Mental Healthcare Services | | First Lien Term Loan (3M USD TERM SOFR+8.47%), 13.81% Cash, 8/5/2027 | | 8/5/2022 | | $ | 6,500,000 | | | | 6,438,832 | | | | 6,490,900 | | | | 1.8 | % |
ARC Health OpCo LLC (d)(j) | | Mental Healthcare Services | | Delayed Draw Term Loan (3M USD TERM SOFR+8.47%), 13.81% Cash, 8/5/2027 | | 8/5/2022 | | $ | 26,914,577 | | | | 26,903,916 | | | | 26,876,897 | | | | 7.3 | % |
ARC Health OpCo LLC (h) | | Mental Healthcare Services | | Class A Preferred Units | | 8/5/2022 | | | 3,818,400 | | | | 4,169,599 | | | | 4,009,323 | | | | 1.1 | % |
| | | | Total Mental Healthcare Services | | | | | | | | | 37,512,347 | | | | 37,377,120 | | | | 10.2 | % |
Chronus LLC | | Mentoring Software | | First Lien Term Loan (3M USD TERM SOFR+5.25%), 10.73% Cash, 8/26/2026 | | 8/26/2021 | | $ | 15,000,000 | | | | 14,911,921 | | | | 14,841,000 | | | | 4.0 | % |
Chronus LLC | | Mentoring Software | | First Lien Term Loan (3M USD TERM SOFR+6.00%), 11.48% Cash, 8/26/2026 | | 8/26/2021 | | $ | 5,000,000 | | | | 4,962,938 | | | | 4,947,000 | | | | 1.3 | % |
Chronus LLC (h) | | Mentoring Software | | Series A Preferred Stock | | 8/26/2021 | | | 3,000 | | | | 3,000,000 | | | | 2,280,881 | | | | 0.6 | % |
| | | | Total Mentoring Software | | | | | | | | | 22,874,859 | | | | 22,068,881 | | | | 5.9 | % |
Omatic Software, LLC | | Non-profit Services | | First Lien Term Loan (3M USD TERM SOFR+8.00%), 13.59% Cash/1.00% PIK, 6/30/2025 | | 5/29/2018 | | $ | 16,270,192 | | | | 16,239,922 | | | | 16,266,938 | | | | 4.4 | % |
| | | | Total Non-profit Services | | | | | | | | | 16,239,922 | | | | 16,266,938 | | | | 4.4 | % |
Emily Street Enterprises, L.L.C. | | Office Supplies | | Senior Secured Note (3M USD TERM SOFR+7.50%), 12.83% Cash, 12/31/2025 | | 12/28/2012 | | $ | 6,000,000 | | | | 5,992,437 | | | | 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 | | | | 1,153,874 | | | | 0.3 | % |
| | | | Total Office Supplies | | | | | | | | | 6,392,437 | | | | 7,180,874 | | | | 1.9 | % |
Buildout, Inc. (d) | | Real Estate Services | | First Lien Term Loan (3M USD TERM SOFR+7.00%), 12.43% Cash, 7/9/2025 | | 7/9/2020 | | $ | 14,000,000 | | | | 13,950,236 | | | | 13,631,800 | | | | 3.7 | % |
Buildout, Inc. | | Real Estate Services | | Delayed Draw Term Loan (3M USD TERM SOFR+7.00%), 12.47% Cash, 7/9/2025 | | 2/12/2021 | | $ | 38,500,000 | | | | 38,342,798 | | | | 37,487,450 | | | | 10.1 | % |
Buildout, Inc. (h)(i) | | Real Estate Services | | Limited Partner Interests | | 7/9/2020 | | | 1,250 | | | | 1,372,557 | | | | 1,231,195 | | | | 0.3 | % |
| | | | Total Real Estate Services | | | | | | | | | 53,665,591 | | | | 52,350,445 | | | | 14.1 | % |
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 | |
Wellspring Worldwide Inc. | | Research Software | | First Lien Term Loan (1M USD TERM SOFR+6.00%), 11.32% Cash, 12/22/2028 | | 6/27/2022 | | $ | 9,552,000 | | | | 9,474,084 | | | | 9,483,226 | | | | 2.6 | % |
Wellspring Worldwide Inc. | | Research Software | | Delayed DrawTerm Loan (1M USD TERM SOFR+6.00%), 11.32% Cash, 12/22/2028 | | 6/27/2022 | | $ | 14,400,000 | | | | 14,227,504 | | | | 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 | | | | | | | | | 26,176,748 | | | | 26,254,706 | | | | 7.2 | % |
LFR Chicken LLC | | Restaurant | | First Lien Term Loan (1M USD TERM SOFR+7.00%), 12.32% Cash, 11/19/2026 | | 11/19/2021 | | $ | 12,000,000 | | | | 11,926,272 | | | | 12,104,400 | | | | 3.3 | % |
LFR Chicken LLC | | Restaurant | | Delayed Draw Term Loan (1M USD TERM SOFR+7.00%), 12.32% Cash, 11/19/2026 | | 11/19/2021 | | $ | 9,000,000 | | | | 8,935,545 | | | | 9,078,300 | | | | 2.5 | % |
LFR Chicken LLC (h) | | Restaurant | | Series B Preferred Units | | 11/19/2021 | | | 497,183 | | | | 1,000,000 | | | | 1,397,572 | | | | 0.4 | % |
| | | | Total Restaurant | | | | | | | | | 21,861,817 | | | | 22,580,272 | | | | 6.2 | % |
JobNimbus LLC | | Roofing Contractor Software | | First Lien Term Loan (1M USD TERM SOFR+8.75%), 14.17% Cash, 9/20/2026 | | 3/28/2023 | | $ | 18,777,459 | | | | 18,624,294 | | | | 19,014,055 | | | | 5.1 | % |
| | | | Total Roofing Contractor Software | | | | | | | | | 18,624,294 | | | | 19,014,055 | | | | 5.1 | % |
Pepper Palace, Inc. (d)(k) | | Specialty Food Retailer | | First Lien Term Loan (3M USD TERM SOFR+6.25%), 11.73% Cash, 6/30/2026 | | 6/30/2021 | | $ | 33,320,000 | | | | 33,148,332 | | | | 2,409,036 | | | | 0.7 | % |
Pepper Palace, Inc. (j)(k) | | Specialty Food Retailer | | Delayed Draw Term Loan (3M USD TERM SOFR+6.25%), 11.73% Cash, 6/30/2026 | | 6/30/2021 | | $ | 1,101,600 | | | | 1,092,422 | | | | 79,646 | | | | 0.0 | % |
Pepper Palace, Inc. (j)(k) | | Specialty Food Retailer | | Revolving Credit Facility (3M USD TERM SOFR+6.25%), 11.73% 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 | | | | | | | | | 35,437,789 | | | | 2,488,682 | | | | 0.7 | % |
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 | |
ArbiterSports, LLC (d) | | Sports Management | | First Lien Term Loan (3M USD TERM SOFR+6.00%), 11.33% Cash, 2/21/2025 | | 2/21/2020 | | $ | 26,000,000 | | | | 25,945,071 | | | | 26,000,000 | | | | 7.0 | % |
ArbiterSports, LLC | | Sports Management | | Delayed Draw Term Loan (3M USD TERM SOFR+6.00%), 11.33% Cash, 2/21/2025 | | 2/21/2020 | | $ | 1,000,000 | | | | 1,000,000 | | | | 1,000,000 | | | | 0.3 | % |
| | | | Total Sports Management | | | | | | | | | 26,945,071 | | | | 27,000,000 | | | | 7.3 | % |
Avionte Holdings, LLC (h) | | Staffing Services | | Class A Units | | 1/8/2014 | | | 100,000 | | | | 100,000 | | | | 3,287,970 | | | | 0.9 | % |
| | | | Total Staffing Services | | | | | | | | | 100,000 | | | | 3,287,970 | | | | 0.9 | % |
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 | | | | 5,955,935 | | | | 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 | | | | 991,649 | | | | 1,010,000 | | | | 0.3 | % |
Jobvite, Inc. (d) | | Talent Acquisition Software | | First Lien Term Loan (6M USD TERM SOFR+8.00%), 13.27% Cash, 8/5/2028 | | 8/5/2022 | | $ | 20,000,000 | | | | 19,875,273 | | | | 19,826,000 | | | | 5.6 | % |
| | | | Total Talent Acquisition Software | | | | | | | | | 26,822,857 | | | | 26,896,000 | | | | 7.5 | % |
VetnCare MSO, LLC (j) | | Veterinary Services | | Delayed Draw Term Loan (3M USD TERM SOFR+5.75%), 11.08% Cash, 5/12/2028 | | 5/12/2023 | | $ | 4,680,505 | | | | 4,638,599 | | | | 4,753,048 | | | | 1.3 | % |
| | | | Total Veterinary Services | | | | | | | | | 4,638,599 | | | | 4,753,048 | | | | 1.3 | % |
Sub Total Non-control/Non-affiliate investments | | | | | | | | | | | | | 1,035,879,751 | | | | 1,019,774,616 | | | | 276.5 | % |
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 | |
Affiliate investments - 7.5% (b) | | | | | | | | | | | | | | | | | | | | | | |
ETU Holdings, Inc. (f) | | Corporate Education Software | | First Lien Term Loan (3M USD TERM SOFR+9.00%), 14.48% Cash, 8/18/2027 | | 8/18/2022 | | $ | 7,000,000 | | | | 6,945,060 | | | | 6,983,200 | | | | 1.9 | % |
ETU Holdings, Inc. (f) | | Corporate Education Software | | Second Lien Term Loan 15.00% PIK, 2/18/2028 | | 8/18/2022 | | $ | 6,130,483 | | | | 6,089,408 | | | | 5,454,290 | | | | 1.5 | % |
ETU Holdings, Inc. (f)(h) | | Corporate Education Software | | Series A Preferred Units | | 8/18/2022 | | | 3,000,000 | | | | 3,000,000 | | | | 1,162,040 | | | | 0.3 | % |
| | | | Total Corporate Education Software | | | | | | | | | 16,034,468 | | | | 13,599,530 | | | | 3.7 | % |
Axero Holdings, LLC (f) | | Employee Collaboration Software | | First Lien Term Loan (3M USD TERM SOFR+8.00%), 13.48% Cash, 6/30/2026 | | 6/30/2021 | | $ | 5,500,000 | | | | 5,468,859 | | | | 5,555,000 | | | | 1.5 | % |
Axero Holdings, LLC (f) | | Employee Collaboration Software | | Delayed Draw Term Loan (3M USD TERM SOFR+8.00%), 13.48% Cash, 6/30/2026 | | 6/30/2021 | | $ | 1,100,000 | | | | 1,092,870 | | | | 1,111,000 | | | | 0.3 | % |
Axero Holdings, LLC (f)(j) | | Employee Collaboration Software | | Revolving Credit Facility (3M USD TERM SOFR+8.00%), 13.48% 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 | | | | 2,877,000 | | | | 0.8 | % |
Axero Holdings, LLC (f)(h) | | Employee Collaboration Software | | Series B Preferred Units | | 6/30/2021 | | | 2,055,609 | | | | 2,055,609 | | | | 4,606,607 | | | | 1.2 | % |
| | | | Total Employee Collaboration Software | | | | | | | | | 10,672,947 | | | | 14,149,607 | | | | 3.8 | % |
Sub Total Affiliate investments | | | | | | | | | | | | | 26,707,415 | | | | 27,749,137 | | | | 7.5 | % |
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 | |
Control investments - 24.7% (b) | | | | | | | | | | | | | | | | | | | | | | |
Netreo Holdings, LLC (g) | | IT Services | | First Lien Term Loan (3M USD TERM SOFR +6.50%), 11.98% Cash/3.50% PIK 12/31/2025 | | 7/3/2018 | | $ | 5,693,748 | | | | 5,686,791 | | | | 5,582,719 | | | | 1.5 | % |
Netreo Holdings, LLC (d)(g) | | IT Services | | Delayed Draw Term Loan (3M USD TERM SOFR +6.50%), 11.98% Cash/3.50% PIK, 12/31/2025 | | 5/26/2020 | | $ | 25,271,214 | | | | 25,193,452 | | | | 24,778,425 | | | | 6.7 | % |
Netreo Holdings, LLC (g)(h) | | IT Services | | Common Stock Class A Units | | 7/3/2018 | | | 4,600,677 | | | | 8,344,500 | | | | 5,060,745 | | | | 1.4 | % |
| | | | Total IT Services | | | | | | | | | 39,224,743 | | | | 35,421,889 | | | | 9.6 | % |
Saratoga Investment Corp. CLO 2013-1, Ltd. (a)(e)(g) | | Structured Finance Securities | | Other/Structured Finance Securities 0.00%, 4/20/2033 | | 1/22/2008 | | $ | 111,000,000 | | | | 22,001,887 | | | | 9,500,627 | | | | 2.6 | % |
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 | | | | 8,875,227 | | | | 2.4 | % |
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%), 13.88%, 10/20/2033 | | 10/28/2022 | | $ | 12,250,000 | | | | 11,392,500 | | | | 12,250,000 | | | | 3.3 | % |
| | | | Total Structured Finance Securities | | | | | | | | | 42,769,387 | | | | 30,625,854 | | | | 8.3 | % |
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 | | | | 17,583,487 | | | | 9,403,996 | | | | 2.5 | % |
| | | | Total Investment Fund | | | | | | | | | 35,202,441 | | | | 25,222,293 | | | | 6.8 | % |
Sub Total Control investments | | | | | | | | | | | | | 117,196,571 | | | | 91,270,036 | | | | 24.7 | % |
TOTAL INVESTMENTS - 308.7% (b) | | | | | | | | | | | | $ | 1,179,783,737 | | | $ | 1,138,793,789 | | | | 308.7 | % |
| | Number of Shares | | | Cost | | | Fair Value | | | % of Net Assets | |
Cash and cash equivalents and cash and cash equivalents, reserve accounts - 10.9% (b) | | | | | | | | | | | | | | | | |
U.S. Bank Money Market (l) | | | 40,507,124 | | | $ | 40,507,124 | | | $ | 40,507,124 | | | | 10.9 | % |
Total cash and cash equivalents and cash and cash equivalents, reserve accounts | | | 40,507,124 | | | $ | 40,507,124 | | | $ | 40,507,124 | | | | 10.9 | % |
| (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 February 29, 2024, non-qualifying assets represent 6.2% 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 $370,224,108 as of February 29, 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). |
Saratoga Investment Corp.
Consolidated Schedule of Investments
February 29, 2024
| (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. Modis Dental Partners OpCo, LLC and Alpha Aesthetics Partners OpCo, LLC are no longer affiliates as of February 29, 2024. Transactions during the year ended February 29, 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 | | $ | - | | | $ | - | | | $ | 931,008 | | | $ | - | | | $ | - | | | $ | 976,251 | |
ETU Holdings, Inc. | | | - | | | | - | | | | 1,915,718 | | | | - | | | | - | | | | (2,518,080 | ) |
Modis Dental Partners OpCo, LLC | | | 8,845,000 | | | | - | | | | 656,579 | | | | - | | | | - | | | | - | |
Alpha Aesthetics Partners OpCo, LLC | | | 10,498,789 | | | | - | | | | 670,737 | | | | - | | | | - | | | | - | |
Total | | $ | 19,343,789 | | | $ | - | | | $ | 4,174,042 | | | $ | - | | | $ | - | | | $ | (1,541,829 | ) |
| (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 year ended February 29, 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 | | $ | 2,475,000 | | | $ | - | | | $ | 4,374,804 | | | $ | - | | | $ | - | | | $ | - | | | $ | (12,083,067 | ) |
Saratoga Investment Corp. CLO 2013-1, Ltd. | | | - | | | | - | | | | - | | | | - | | | | 3,270,232 | | | | - | | | | (4,733,934 | ) |
Saratoga Investment Corp. Senior Loan Fund 2022-1, Ltd. Class E Note | | | - | | | | - | | | | 1,696,890 | | | | - | | | | - | | | | - | | | | 895,505 | |
Saratoga Investment Corp. CLO 2013-1, Ltd. Class F-2-R-3 Note | | | - | | | | - | | | | 1,469,668 | | | | - | | | | - | | | | - | | | | 43,821 | |
Saratoga Senior Loan Fund I JV, LLC | | | - | | | | - | | | | 1,781,472 | | | | - | | | | - | | | | - | | | | (1,800,657 | ) |
Saratoga Senior Loan Fund I JV, LLC | | | - | | | | - | | | | - | | | | 5,911,564 | | | | - | | | | - | | | | (3,702,956 | ) |
Total | | $ | 2,475,000 | | | $ | - | | | $ | 9,322,834 | | | $ | 5,911,564 | | | $ | 3,270,232 | | | $ | - | | | $ | (21,381,288 | ) |
| (h) | Non-income producing at February 29, 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 February 29, 2024. (See Note 9 to the consolidated financial statements). |
| (k) | As of February 29, 2024, the investment was on non-accrual status. The fair value of these investments was approximately $18.9 million, which represented 1.7% 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 February 29, 2024. |
SOFR - Secured Overnight Financing Rate
1M USD TERM SOFR - The 1 month USD TERM SOFR rate as of February 29, 2024 was 5.32%.
3M USD TERM SOFR - The 3 month USD TERM SOFR rate as of February 29, 2024 was 5.33%.
6M USD TERM SOFR - The 6 month USD TERM SOFR rate as of February 29, 2024 was 5.27%.
PIK - Payment-in-Kind (see Note 2 to the consolidated financial statements).
See accompanying notes to consolidated financial statements.
SARATOGA INVESTMENT CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
November 30, 2024
(unaudited)
Note 1. Organization
Saratoga Investment Corp. (the “Company”, “we”, “our” and “us”) is a non-diversified closed end management investment company incorporated in Maryland that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company commenced operations on March 23, 2007 as GSC Investment Corp. and completed the initial public offering (“IPO”) on March 28, 2007. The Company has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). The Company’s investment objective is to generate current income and, to a lesser extent, capital appreciation from its investments.
GSC Investment, LLC (the “LLC”) was organized in May 2006 as a Maryland limited liability company. On March 21, 2007, the Company was incorporated and concurrently therewith the LLC was merged with and into the Company, with the Company as the surviving entity, in accordance with the procedure for such merger in the LLC’s limited liability company agreement and Maryland law. In connection with such merger, each outstanding limited liability company interest of the LLC was converted into a share of common stock of the Company.
On July 30, 2010, the Company changed its name from “GSC Investment Corp.” to “Saratoga Investment Corp.” in connection with the consummation of a recapitalization transaction.
The Company is externally managed and advised by the investment adviser, Saratoga Investment Advisors, LLC (the “Manager” or “Saratoga Investment Advisors”), pursuant to an investment advisory and management agreement (the “Management Agreement”).
The Company has established wholly owned subsidiaries, SIA-AAP, Inc., SIA-ARC, Inc., SIA-Avionte, Inc., SIA-AX, Inc., SIA-G4, Inc., SIA-GH, Inc., SIA-MDP, Inc., SIA-PP Inc., SIA-SZ, Inc., SIA-TG, Inc., SIA-TT, Inc. and SIA-Vector, Inc., which are structured as Delaware entities that are treated as corporations for U.S. federal income tax purposes and are intended to facilitate its compliance with the requirements to be treated as a RIC under the Code by holding equity or equity-like investments in portfolio companies organized as limited liability companies, or LLCs (or other forms of pass through entities). These entities are consolidated for accounting purposes, but are not consolidated for U.S. federal income tax purposes and may incur U.S. federal income tax expenses as a result of their ownership of portfolio companies. In February 2022, SIA-GH, Inc., SIA-TT Inc. and SIA-VR, Inc. received an approved plan of liquidation following the sale of equity held by each of the portfolio companies. In June 2024, SIA-MAC, Inc. and SIA-VR, Inc. were dissolved.
Our wholly owned subsidiaries, Saratoga Investment Corp. SBIC II LP (“SBIC II LP”) and Saratoga Investment Corp. SBIC III LP (“SBIC III LP”, and together with SBIC II LP, the “SBIC Subsidiaries”), received licenses to operate as small business investment companies from the SBA on August 14, 2019 and September 29, 2022, respectively. Each of the SBIC Subsidiaries provides up to $175.0 million in long-term capital in the form of debentures guaranteed by the SBA. Our wholly owned subsidiary Saratoga Investment Corp. SBIC LP (“SBIC LP”) repaid its outstanding debentures and subsequently surrendered its license to the SBA on January 3, 2024, providing the Company access to all undistributed capital of SBIC LP, and SBIC LP subsequently merged with and into the Company. Under current SBIC regulations, for two or more SBICs under common control, the maximum amount of outstanding SBA debentures cannot exceed $350.0 million with at least $175.0 million in combined regulatory capital.
The Company has formed wholly owned special purpose entities organized as Delaware limited liability companies, Saratoga Investment Funding II LLC (“SIF II”) and Saratoga Investment Funding III LLC (“SIF III”) for the purpose of the Encina Credit Facility and the Live Oak Credit Facility (each as defined below), respectively. The senior secured revolving credit facility (the “Encina Credit Facility) with Encina Lender Finance, LLC (“Encina”) is supported by loans held by SIF II and pledged to Encina, and the senior secured revolving credit facility (the “Live Oak Credit Facility”) with Live Oak Banking Company (“Live Oak”) is supported by loans held by SIF III and pledged to Live Oak.
On October 26, 2021, the Company and TJHA JV I LLC (“TJHA”) entered into a Limited Liability Company Agreement to co-manage Saratoga Senior Loan Fund I JV LLC (“SLF JV”). SLF JV is under joint control and is not consolidated. SLF JV is invested in Saratoga Investment Corp Senior Loan Fund 2022-1 Ltd. (“SLF 2022”), which is a wholly owned subsidiary of SLF JV. SLF 2022 was formed for the purpose of making investments in a diversified portfolio of broadly syndicated first lien and second lien term loans or bonds in the primary and secondary markets. On October 28, 2022, SLF 2022 issued $402.1 million of debt (the “2022 JV CLO Notes”) through a collateralized loan obligation trust (the “JV CLO trust”). The 2022 JV CLO Notes were issued pursuant to an indenture, dated October 28, 2022 (the “JV Indenture”), with U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association) (the “Trustee”) servicing as the trustee.
Note 2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), are stated in U.S. Dollars and include the accounts of the Company and its wholly owned special purpose financing subsidiaries, SIF II, SIF III, SBIC II LP, SBIC III LP, SIA-AAP, Inc., SIA-ARC, Inc., SIA-Avionte, Inc., SIA-AX, Inc., SIA-G4, Inc., SIA-GH, Inc., SIA-MDP, Inc.,, SIA-PP, Inc., SIA-SZ, Inc., SIA-TG, Inc., SIA-TT Inc., and SIA-Vector, Inc. All intercompany accounts and transactions have been eliminated in consolidation. All references made to the “Company,” “we,” and “us” herein include Saratoga Investment Corp. and its consolidated subsidiaries, except as stated otherwise.
The Company, SBIC II LP, and SBIC III LP are all considered to be investment companies for financial reporting purposes and have applied the guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services — Investment Companies (“ASC 946”). There have been no changes to the Company, SBIC II LP, or SBIC III LP’s status as investment companies during the three months ended November 30, 2024.
Principles of Consolidation
Under the investment company rules and regulations pursuant to ASC 946, the Company is precluded from consolidating any entity other than another investment company or controlled operating company whose business consists of providing services to the Company. As a result, the consolidated financial statements of the Company include only the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
The Company has determined that SLF JV is an investment company under ASC 946; however, in accordance with such guidance the Company will generally not consolidate its investment in a company other than a wholly owned investment company subsidiary. SLF JV is not a wholly owned investment company subsidiary as the Company and TJHA each have an equal 50% voting interest in SLF JV and thus neither party has a controlling financial interest. Furthermore, FASB ASC Topic 810, Consolidation, concludes that in a joint venture where both members have equal decision-making authority, it is not appropriate for one member to consolidate the joint venture since neither has control. Accordingly, the Company does not consolidate its investment in SLF JV.
Use of Estimates in the Preparation of Financial Statements
The preparation of the accompanying consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and income, gains (losses) and expenses during the period reported. Actual results could differ materially from those estimates.
Operating Segment
The Company invests in various industries and separately evaluates the performance of each of its investment relationships. However, because each of these investment relationships have similar business and economic characteristics, they have been aggregated into a single investment segment. All applicable segment disclosures are included in or can be derived from the Company’s consolidated financial statements (See Note 3. Investments).
Cash and Cash Equivalents
Cash and cash equivalents include short-term, liquid investments in a money market fund. The Company places its cash in financial institutions and, at times, such balances may be in excess of the Federal Deposit Insurance Corporation insurance limits. Cash and cash equivalents are carried at cost which approximates fair value. Pursuant to Section 12(d)(1)(A) of the 1940 Act, the Company may not invest in another investment company, such as a money market fund, if such investment would cause the Company to:
| ● | own more than 3.0% of the investment company’s total outstanding voting stock; |
| ● | hold securities in the investment company having an aggregate value in excess of 5.0% of the value of the Company’s total assets; or |
| ● | hold securities in investment companies having an aggregate value in excess of 10.0% of the value of the Company’s total assets. |
As of November 30, 2024, the Company did not exceed any of these limitations.
Cash and Cash Equivalents, Reserve Accounts
Cash and cash equivalents, reserve accounts include amounts held in designated bank accounts in the form of cash and short-term liquid investments in money market funds, and, at times, such balances may be in excess of the Federal Deposit Insurance Corporation insurance limits, representing payments received on secured investments or other reserved amounts associated with the Encina Credit Facility or the Live Oak Credit Facility held by the Company’s wholly owned subsidiaries, SIF II and SIF III, respectively. The Company is required to use these amounts to pay interest expense, reduce borrowings, or pay other amounts in accordance with the terms of the Encina Credit Facility and the Live Oak Credit Facility.
In addition, cash and cash equivalents, reserve accounts also include amounts held in designated bank accounts, in the form of cash and short-term liquid investments in money market funds, within the Company’s wholly owned subsidiaries, SBIC II LP and SBIC III LP.
The statements of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents when reconciling the beginning-of-period and end-of-period total amounts.
The following table provides a reconciliation of cash and cash equivalents and cash and cash equivalents, reserve accounts reported within the consolidated statements of assets and liabilities that sum to the total of the same such amounts shown in the consolidated statements of cash flows:
| | November 30, 2024 | | | February 29, 2024 | |
Cash and cash equivalents | | $ | 147,614,810 | | | $ | 8,692,846 | |
Cash and cash equivalents, reserve accounts | | | 102,549,213 | | | | 31,814,278 | |
Total cash and cash equivalents and cash and cash equivalents, reserve accounts | | $ | 250,164,023 | | | $ | 40,507,124 | |
Investment Classification
The Company classifies its investments in accordance with the requirements of the 1940 Act. Under the 1940 Act, “control investments” are defined as investments in companies in which the Company owns more than 25.0% of the voting securities or maintains greater than 50.0% of the board representation. Under the 1940 Act, “affiliated investments” are defined as those non-control investments in companies in which the Company owns between 5.0% and 25.0% of the voting securities. Under the 1940 Act, “non-affiliated investments” are defined as investments that are neither control investments nor affiliated investments.
Investment Valuation
The Company accounts for its investments at fair value in accordance with the FASB ASC Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. ASC 820 requires the Company to assume that its investments are to be sold or its liabilities are to be transferred at the measurement date in the principal market to independent market participants, or in the absence of a principal market, in the most advantageous market, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact.
Investments for which market quotations are readily available are fair valued at such market quotations obtained from independent third-party pricing services and market makers subject to any decision by the Company’s board of directors to approve a fair value determination to reflect significant events affecting the value of these investments. The Company values investments for which market quotations are not readily available at fair value as approved, in good faith, by the Company’s board of directors based on input from the Manager, the audit committee of the board of directors and a third-party independent valuation firm.
The Company undertakes a multi-step valuation process each quarter when valuing investments for which market quotations are not readily available, as described below:
| ● | each investment is initially valued by the responsible investment professionals of the Manager and preliminary valuation conclusions are documented, reviewed and discussed with our senior management; and |
| ● | an independent valuation firm engaged by the Company’s board of directors independently reviews a selection of these preliminary valuations each quarter so that the valuation of each investment for which market quotes are not readily available is reviewed by the independent valuation firm at least once each fiscal year. The Company uses a third-party independent valuation firm to value its investment in the subordinated notes of Saratoga Investment Corp. CLO 2013-1, Ltd. (“Saratoga CLO”), the Class F-2-R-3 Notes of the Saratoga CLO, and the Class E Notes of the SLF 2022 every quarter. |
In addition, all investments are subject to the following valuation process:
| ● | the audit committee of the Company’s board of directors reviews and approves each preliminary valuation and the Manager and independent valuation firm (if applicable) will supplement the preliminary valuation to reflect any comments provided by the audit committee; and |
| ● | the Company’s board of directors discusses the valuations and approves the fair value of each investment, in good faith, based on the input of the Manager, independent valuation firm (to the extent applicable) and the audit committee of the board of directors. |
The Company uses multiple techniques for determining fair value based on the nature of the investment and experience with those types of investments and specific portfolio companies. The selections of the valuation techniques and the inputs and assumptions used within those techniques often require subjective judgements and estimates. These techniques include market comparables, discounted cash flows and enterprise value waterfalls. Fair value is best expressed as a range of values from which the Company determines a single best estimate. The types of inputs and assumptions that may be considered in determining the range of values of the Company’s investments include the nature and realizable value of any collateral, the portfolio company’s ability to make payments, market yield trend analysis and volatility in future interest rates, call and put features, the markets in which the portfolio company does business, comparison to publicly traded companies, discounted cash flows and other relevant factors.
The Company’s investments in the subordinated notes of Saratoga CLO, Class F-2-R-3 Notes of the Saratoga CLO and the Class E Notes of SLF 2022 are carried at fair value, which is based on a discounted cash flow valuation technique that utilizes prepayment, re-investment and loss inputs based on historical experience and projected performance, economic factors, the characteristics of the underlying cash flow, and comparable yields for equity interests in collateralized loan obligation funds, when available, as determined by the Manager and recommended to the Company’s board of directors. Specifically, the Company uses Intex cash flows, or an appropriate substitute, to form the basis for the valuation of its investment in the subordinated notes of Saratoga CLO, Class F-2-R-3 Notes of the Saratoga CLO and the Class E Notes of SLF 2022. The inputs are based on available market data and projections provided by third parties as well as management estimates. The Company uses the output from the Intex models (i.e., the estimated cash flows) to perform a discounted cash flow analysis on expected future cash flows to determine the valuation for our investment in Saratoga CLO.
The Company’s equity investment in SLF JV is measured using the proportionate share of the net asset value (“NAV”), or equivalent, of SLF JV as a practical expedient for fair value, provided by ASC 820. The Company’s unsecured loan investment in SLF JV is based on a discounted cash flow valuation technique.
Because such valuations, and particularly valuations of private investments and private companies, are inherently uncertain, they may fluctuate over short periods of time and may be based on estimates. The determination of fair value may differ materially from the values that would have been used if a ready market for these investments existed. The Company’s NAV could be materially affected if the determinations regarding the fair value of its investments were materially higher or lower than the values that the Company ultimately realizes upon the disposal of such investments.
Rule 2a-5 under the 1940 Act (“Rule 2a-5”) establishes a regulatory framework for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 permits boards of directors, subject to board oversight and certain other conditions, to designate the investment adviser to perform fair value determinations. Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must determine the fair value of a security. Rule 31a-4 under the 1940 Act (“Rule 31a-4”) provides for certain recordkeeping requirements associated with fair value determinations. While the Company’s board of directors has not elected to designate Saratoga Investment Advisors as the valuation designee, the Company has established policies and procedures in compliance with the applicable requirements of Rule 2a-5 and Rule 31a-4.
Derivative Financial Instruments
The Company accounts for derivative financial instruments in accordance with FASB ASC Topic 815, Derivatives and Hedging (“ASC 815”). ASC 815 requires recognizing all derivative instruments as either assets or liabilities on the consolidated statements of assets and liabilities at fair value. The Company values derivative contracts at the closing fair value provided by the counterparty. Changes in the values of derivative contracts are included in the consolidated statements of operations.
Investment Transactions and Income Recognition
Purchases and sales of investments and the related realized gains or losses are recorded on a trade-date basis. Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis to the extent that such amounts are expected to be collected. The Company stops accruing interest on its investments when it is determined that interest is no longer collectible. Discounts and premiums on investments purchased are accreted/amortized using the effective yield method. The amortized cost of investments represents the original cost adjusted for the accretion of discounts over the life of the investment and amortization of premiums on investments up to the earliest call date.
Loans are generally placed on non-accrual status when there is reasonable doubt that principal or interest will be collected. Accrued interest is generally reserved when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as a reduction in principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current, although management may make exceptions to this general rule if the loan has sufficient collateral value and is in the process of collection. At November 30, 2024, our investment in two controlled portfolio companies were on non-accrual status with a fair value of approximately $2.7 million, or 0.3% of the fair value of our portfolio. At February 29, 2024, our investment in three non-controlled portfolio companies were on non-accrual status with a fair value of approximately $18.9 million, or 1.7% of the fair value of our portfolio.
Interest income on our investment in the subordinated note of Saratoga CLO is recorded using the effective interest method in accordance with the provisions of ASC Topic 325-40, Investments-Other, Beneficial Interests in Securitized Financial Assets, based on the anticipated yield and the estimated cash flows over the projected life of the investment. Yields are revised when there are changes in actual or estimated cash flows due to changes in prepayments and/or re-investments, credit losses or asset pricing. Changes in estimated yield are recognized as an adjustment to the estimated yield over the remaining life of the investment from the date the estimated yield was changed.
Payment-in-Kind Interest
The Company may hold debt and preferred equity investments in its portfolio that contain a payment-in-kind (“PIK”) interest provision. The PIK interest, which represents contractually deferred interest added to the investment balance that is generally due at maturity, is generally recorded on an accrual basis to the extent such amounts are expected to be collected. The Company stops accruing PIK interest if it is expected that the issuer will not be able to pay all principal and interest when due. The Company restores to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current, although management may make exceptions to this general rule if the loan has sufficient collateral value and is in the process of collection.
Dividend Income
Dividend income is recorded in the consolidated statements of operations when earned.
Structuring and Advisory Fee Income
Structuring and advisory fee income represents various fee income earned and received for performing certain investment structuring and advisory activities during the closing of new investments.
Other Income
Other income includes prepayment income fees, and monitoring, administration, redemption and amendment fees and is recorded in the consolidated statements of operations when earned.
Deferred Debt Financing Costs
Financing costs incurred in connection with our credit facility and notes are deferred and amortized using the straight-line method over the life of the respective facility and debt securities. Financing costs incurred in connection with the SBA debentures of SBIC II LP and SBIC III LP are deferred and amortized using the straight-line method over the life of the debentures. Any discount or premium on the issuance of any debt is accreted and amortized using the effective interest method over the life of the respective debt security.
The Company presents deferred debt financing costs on the balance sheet as a contra-liability, which is a direct deduction from the carrying amount of that debt liability, consistent with debt discounts.
Realized Loss on Extinguishment of Debt
Upon the repayment of debt obligations that are deemed to be extinguishments, the difference between the principal amount due at maturity adjusted for any unamortized debt issuance costs is recognized as a loss (i.e., the unamortized debt issuance costs are recognized as a loss upon extinguishment of the underlying debt obligation).
Contingencies
In the ordinary course of business, the Company may enter into contracts or agreements that contain indemnifications or warranties. Future events could occur that lead to the execution of these provisions against the Company. Based on its history and experience, management reasonably believes that the likelihood of such an event is remote. Therefore, the Company has not accrued any liabilities in connection with such indemnifications.
In the ordinary course of business, the Company may directly or indirectly be a defendant or plaintiff in legal actions with respect to bankruptcy, insolvency or other types of proceedings. Such lawsuits may involve claims that could adversely affect the value of certain financial instruments owned by the Company.
Income Taxes
The Company has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a RIC under Subchapter M of the Code. By meeting these requirements, the Company generally will not be subject to U.S. federal income tax on ordinary income or capital gains timely distributed to stockholders. Therefore, no provision has been recorded for federal income taxes, except as related to the Corporate Blockers (as defined below) and long-term capital gains, when applicable.
In order to qualify as a RIC, among other requirements, the Company generally is required to timely distribute to its stockholders at least 90% of its “investment company taxable income”, as defined by the Code, for each fiscal tax year. The Company will be subject to U.S. federal income tax imposed at corporate rates on its investment company taxable income and net capital gains that it does not timely distribute to shareholders. The Company will be subject to a non-deductible U.S. federal excise tax of 4% on undistributed income if it does not distribute at least (1) 98% of its net ordinary income in any calendar year, (2) 98.2% of its capital gain net income for each one-year period ending on October 31and (3) any net ordinary income and capital gain net income that it recognized for preceding years, but were not distributed during such year, and on which the Company paid no U.S federal income tax.
Depending on the level of investment company taxable income earned in a tax year and the amount of net capital gains recognized in such tax year, the Company may choose to carry forward investment company taxable income and net capital gains in excess of current year dividend distributions into the next tax year and pay U.S. federal income tax, and possibly the 4% U.S. federal excise tax on such income, as required. To the extent that the Company determines that its estimated current year annual investment company taxable income will be in excess of estimated current year dividend distributions for U.S. federal excise tax purposes, the Company accrues the U.S. federal excise tax, if any, on estimated excess taxable income as taxable income is earned. For the years ended February 29, 2024, 2023 and 2022, the excise tax accrual on estimated excess taxable income was $1.8 million, $1.1 million and $0.6 million, respectively.
In accordance with U.S. Treasury regulations and published guidance issued by the Internal Revenue Service (“IRS”), a publicly offered RIC may treat a distribution of its own stock as counting toward its RIC distribution requirements if each stockholder may elect to receive his, her, or its entire distribution in either cash or stock of the RIC. This published guidance indicates that the rule will apply where the aggregate amount of cash to be distributed to all stockholders is not at least 20% of the aggregate declared distribution. Under the published guidance, if too many stockholders elect to receive cash, the cash available for distribution must be allocated among the stockholders electing to receive cash (with the balance of the distribution paid in stock). In no event will any stockholder, electing to receive cash, receive less than 20% of his or her entire distribution in cash. If these and certain other requirements are met, for U.S. federal income tax purposes, the amount of the dividend paid in stock will be equal to the amount of cash that could have been received instead of stock.
The Company may utilize wholly owned holding companies that are treated as corporations for U.S. federal income tax purposes when making equity investments in portfolio companies taxed as pass-through entities to meet its source-of-income requirements as a RIC (“Corporate Blockers”). Corporate Blockers are consolidated in the Company’s U.S. GAAP financial statements and may result in current and deferred U.S. federal and state income tax expense with respect to income derived from those investments. Such income, net of applicable income taxes, is not included in the Company’s tax-basis net investment income until distributed by the Corporate Blocker, which may result in timing and character differences between the Company’s U.S. GAAP and tax-basis net investment income and realized gains and losses. Income tax expense or benefit from Corporate Blockers related to net investment income are included in total operating expenses, while any expense or benefit related to federal or state income tax originated for capital gains and losses are included together with the applicable net realized or unrealized gain or loss line item. Deferred tax assets of the Corporate Blockers are reduced by a valuation allowance when, in the opinion of management, it is more-likely than-not that some portion or all of the deferred tax assets will not be realized.
FASB ASC Topic 740, Income Taxes, (“ASC 740”), provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions deemed to meet a “more-likely-than-not” threshold would be recorded as a tax benefit or expense in the current period. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense on the consolidated statements of operations. During the fiscal year ended February 29, 2024, the Company did not incur any interest or penalties. Although we file federal and state tax returns, our major tax jurisdiction is federal. The 2021, 2022, 2023 and 2024 federal tax years for the Company remain subject to examination by the IRS. At November 30, 2024 and February 29, 2024, there were no uncertain tax positions. The Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change significantly in the next 12 months.
Dividends
Dividends to common stockholders are recorded on the ex-dividend date. The amount to be paid out as a dividend is determined by the board of directors. Net realized capital gains, if any, are generally distributed at least annually, although we may decide to retain some or all of our net capital gains for reinvestment.
We have adopted a dividend reinvestment plan (“DRIP”) that provides for reinvestment of our dividend distributions on behalf of our stockholders unless a stockholder elects to receive cash. As a result, if our board of directors authorizes, and we declare, a cash dividend, then our stockholders who have not “opted out” of the DRIP by the dividend record date will have their cash dividends automatically reinvested into additional shares of our common stock, rather than receiving the cash dividends. We have the option to satisfy the share requirements of the DRIP through the issuance of new shares of common stock or through open market purchases of common stock by the DRIP plan administrator.
Capital Gains Incentive Fee
The Company records an expense accrual on the consolidated statements of operations relating to the capital gains incentive fee payable to the Manager, as recorded on the consolidated statements of assets and liabilities when the net realized and unrealized gain on its investments exceed all net realized and unrealized capital losses on its investments, as a capital gains incentive fee would be owed to the Manager if the Company were to liquidate its investment portfolio at such time.
The actual incentive fee payable to the Manager related to capital gains will be determined and payable in arrears at the end of each fiscal year and only reflect those realized capital gains net of realized and unrealized losses for the period.
Recent Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures. ASU 2023-07 enhances the disclosures required for reportable segments on an annual and interim basis. ASU 2023-07 is effective on a retrospective basis for annual periods beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted; however, the Company has not elected to adopt this provision as of the date of the financial statements contained in this quarterly report. The Company is still assessing the impact of the new guidance.
In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. The amendments in this update require more disaggregated information on income taxes paid. ASU 2023-09 is effective for years beginning after December 15, 2024. Early adoption is permitted, however the Company has not elected to early adopt this provision as of the date of the financial statements contained in this report. The Company is still assessing the impact of the new guidance.
Risk Management
In the ordinary course of its business, the Company manages a variety of risks, including market and credit risk. Market risk is the risk of potential adverse changes to the value of investments because of changes in market conditions such as interest rate movements and volatility in investment prices.
Credit risk is the risk of default or non-performance by portfolio companies, equivalent to the investment’s carrying amount. The Company is also exposed to credit risk related to maintaining all of its cash and cash equivalents, including those in reserve accounts, at a major financial institution and credit risk related to any of its derivative counterparties.
The Company has investments in lower rated and comparable quality unrated high yield bonds and bank loans. Investments in high yield investments are accompanied by a greater degree of credit risk. The risk of loss due to default by the issuer is significantly greater for holders of high yield securities, because such investments are generally unsecured and are often subordinated to other creditors of the issuer.
Note 3. Investments
As noted above, the Company values all investments in accordance with ASC 820. As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between independent market participants at the measurement date.
ASC 820 establishes a hierarchal disclosure framework which prioritizes and ranks the level of market price observability of inputs used in measuring investments at fair value. Market price observability is affected by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.
Based on the observability of the inputs used in the valuation techniques, the Company is required to provide disclosures on fair value measurements according to the fair value hierarchy. The fair value hierarchy ranks the observability of the inputs used to determine fair values. Investments carried at fair value are classified and disclosed in one of the following three categories:
| ● | Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. |
| ● | Level 2— Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date. Such inputs may be quoted prices for similar assets or liabilities, quoted markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full character of the financial instrument, or inputs that are derived principally from, or corroborated by, observable market information. Investments that are generally included in this category include illiquid debt securities and less liquid, privately held or restricted equity securities, for which some level of recent trading activity has been observed. |
| ● | Level 3—Pricing inputs are unobservable for the investment and includes situations where there is little, if any, market activity for the investment. The inputs may be based on the Company’s own assumptions about how market participants would price the asset or liability or may use Level 2 inputs, as adjusted, to reflect specific investment attributes relative to a broader market assumption. Even if observable market data for comparable performance or valuation measures (earnings multiples, discount rates, other financial/valuation ratios, etc.) are available, such investments are grouped as Level 3 if any significant data point that is not also market observable (private company earnings, cash flows, etc.) is used in the valuation technique. We use multiple techniques for determining fair value based on the nature of the investment and experience with those types of investments and specific portfolio companies. The selections of the valuation techniques and the inputs and assumptions used within those techniques often require subjective judgements and estimates. These techniques include market comparables, discounted cash flows and enterprise value waterfalls. Fair value is best expressed as a range of values from which the Company determines a single best estimate. The types of inputs and assumptions that may be considered in determining the range of values of our investments include the nature and realizable value of any collateral, the portfolio company’s ability to make payments, market yield trend analysis and volatility in future interest rates, call and put features, the markets in which the portfolio company does business, comparison to publicly traded companies, discounted cash flows and other relevant factors. |
In addition to using the above inputs in investment valuations, the Company continues to employ the valuation policy approved by the board of directors that is consistent with ASC 820 and the 1940 Act (see Note 2. Summary of Significant Accounting Policies). Consistent with our valuation policy, the Company evaluates the source of inputs, including any markets in which its investments are trading, in determining fair value.
The following table presents fair value measurements of investments, by major class, as of November 30, 2024 (dollars in thousands), according to the fair value hierarchy:
| | Fair Value Measurements | | | Valued Using Net Asset | | | | |
| | Level 1 | | | Level 2 | | | Level 3 | | | Value* | | | Total | |
First lien term loans | | $ | - | | | $ | - | | | $ | 833,223 | | | $ | - | | | $ | 833,223 | |
Second lien term loans | | | - | | | | - | | | | 6,140 | | | | - | | | | 6,140 | |
Unsecured term loans | | | - | | | | - | | | | 16,199 | | | | - | | | | 16,199 | |
Structured finance securities | | | - | | | | - | | | | 17,852 | | | | - | | | | 17,852 | |
Equity interests | | | - | | | | - | | | | 81,927 | | | | 4,752 | | | | 86,679 | |
Total | | $ | - | | | $ | - | | | $ | 955,341 | | | $ | 4,752 | | | $ | 960,093 | |
| * | The Company’s equity investment in SLF JV is measured using the proportionate share of the NAV, or equivalent, as a practical expedient and thus has not been classified in the fair value hierarchy. The Company’s unsecured loan investment in SLF JV is based on a discounted cash flow valuation technique. |
The following table presents fair value measurements of investments, by major class, as of February 29, 2024 (dollars in thousands), according to the fair value hierarchy:
| | Fair Value Measurements | | | Valued Using Net Asset | | | | |
| | Level 1 | | | Level 2 | | | Level 3 | | | Value* | | | Total | |
First lien term loans | | $ | - | | | $ | - | | | $ | 976,423 | | | $ | - | | | $ | 976,423 | |
Second lien term loans | | | - | | | | - | | | | 18,097 | | | | - | | | | 18,097 | |
Unsecured term loans | | | - | | | | - | | | | 15,818 | | | | - | | | | 15,818 | |
Structured finance securities | | | - | | | | - | | | | 30,626 | | | | - | | | | 30,626 | |
Equity interests | | | - | | | | - | | | | 88,426 | | | | 9,404 | | | | 97,830 | |
Total | | $ | - | | | $ | - | | | $ | 1,129,390 | | | $ | 9,404 | | | $ | 1,138,794 | |
| * | The Company’s equity investment in SLF JV is measured using the proportionate share of the NAV, or equivalent, as a practical expedient and thus has not been classified in the fair value hierarchy. The Company’s unsecured loan investment in SLF JV is based on a discounted cash flow valuation technique. |
The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the nine months ended November 30, 2024 (dollars in thousands):
| | First lien term loans | | | Second lien term loans | | | Unsecured term loans | | | Structured finance securities | | | Equity interests | | | Total | |
Balance as of February 29, 2024 | | $ | 976,423 | | | $ | 18,097 | | | $ | 15,818 | | | $ | 30,626 | | | $ | 88,426 | | | $ | 1,129,390 | |
Payment-in-kind and other adjustments to cost | | | 1,912 | | | | 8,003 | | | | - | | | | (5,373 | ) | | | 4 | | | | 4,546 | |
Net accretion of discount on investments | | | 2,177 | | | | 5 | | | | - | | | | - | | | | - | | | | 2,182 | |
Net change in unrealized appreciation (depreciation) on investments | | | 41,727 | | | | 3,185 | | | | 381 | | | | (7,401 | ) | | | 500 | | | | 38,392 | |
Purchases | | | 121,207 | | | | - | | | | - | | | | - | | | | 5,069 | | | | 126,276 | |
Sales and repayments | | | (262,551 | ) | | | (23,150 | ) | | | - | | | | - | | | | (10,545 | ) | | | (296,246 | ) |
Net realized gain (loss) from investments | | | (47,672 | ) | | | - | | | | - | | | | - | | | | (1,527 | ) | | | (49,199 | ) |
Balance as of November 30, 2024 | | $ | 833,223 | | | $ | 6,140 | | | $ | 16,199 | | | $ | 17,852 | | | $ | 81,927 | | | $ | 955,341 | |
Net change in unrealized appreciation (depreciation) for the period relating to those Level 3 assets that were still held by the Company at the end of the period | | $ | (3,649 | ) | | $ | 3,185 | | | $ | 381 | | | $ | (7,401 | ) | | $ | (3,998 | ) | | $ | (11,482 | ) |
Purchases, PIK and other adjustments to cost include purchases of new investments at cost, effects of refinancing/restructuring, accretion/amortization of income from discount/premium on debt securities, and PIK interests. For the nine months ended November 30, 2024, non-cash restructurings related to two controlled investments resulting in realized losses of $49.1m were included in net realized (gain) loss from investments on the consolidated statements of cash flows.
Sales and repayments represent net proceeds received from investments sold and principal paydowns received during the period.
Transfers and restructurings, if any, are recognized at the beginning of the period in which they occur. There were no transfers or restructurings in or out of Levels 1, 2 or 3 during the nine months ended November 30, 2024.
The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the nine months ended November 30, 2023 (dollars in thousands):
| | First lien term loans | | | Second lien term loans | | | Unsecured term loans | | | Structured finance securities | | | Equity interests | | | Total | |
Balance as of February 28, 2023 | | $ | 798,534 | | | $ | 14,936 | | | $ | 20,661 | | | $ | 41,362 | | | $ | 83,990 | | | $ | 959,483 | |
Payment-in-kind and other adjustments to cost | | | 1,147 | | | | 624 | | | | - | | | | (5,531 | ) | | | (293 | ) | | | (4,053 | ) |
Net accretion of discount on investments | | | 1,637 | | | | 4 | | | | - | | | | - | | | | - | | | | 1,641 | |
Net change in unrealized appreciation (depreciation) on investments | | | (20,102 | ) | | | (691 | ) | | | 341 | | | | (6,444 | ) | | | (7,715 | ) | | | (34,611 | ) |
Purchases | | | 194,541 | | | | - | | | | - | | | | - | | | | 8,343 | | | | 202,884 | |
Sales and repayments | | | (15,865 | ) | | | - | | | | (3,383 | ) | | | - | | | | - | | | | (19,248 | ) |
Net realized gain (loss) from investments | | | - | | | | - | | | | - | | | | - | | | | 151 | | | | 151 | |
Balance as of November 30, 2023 | | $ | 959,892 | | | $ | 14,873 | | | $ | 17,619 | | | $ | 29,387 | | | $ | 84,476 | | | $ | 1,106,247 | |
Net change in unrealized appreciation (depreciation) for the year relating to those Level 3 assets that were still held by the Company at the end of the period | | $ | (20,033 | ) | | $ | (691 | ) | | $ | (5 | ) | | $ | (6,444 | ) | | $ | (7,792 | ) | | $ | (34,965 | ) |
Transfers and restructurings, if any, are recognized at the beginning of the period in which they occur. There were no transfers or restructurings in or out of Levels 1, 2 or 3 during the nine months ended November 30, 2023.
The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements of assets as of November 30, 2024 were as follows (dollars in thousands):
| | Fair Value | | | Valuation Technique | | Unobservable Input | | Range | | Weighted Average* |
First lien term loans | | $ | 833,223 | | | Market Comparables | | Market Yield (%) | | 10.1% - 20.5% | | 12.3% |
| | | | | | | | Revenue Multiples (x) | | 2.5x | | 2.5x |
| | | | | | | | Third-party Bid (x) | | 8.0x | | 8.0x |
Second lien term loans | | | 6,140 | | | Market Comparables | | Market Yield (%) | | 19.5% | | 19.5% |
Unsecured term loans | | | 16,199 | | | Discounted Cash Flow | | Discount Rate (%) | | 10.5% | | 10.5% |
Structured finance securities | | | 17,852 | | | Discounted Cash Flow | | Discount Rate (%) | | 8.5% - 40.0% | | 14.9% |
| | | | | | | | Recovery Rate (%) | | 35.0% - 70.0% | | 61.5% |
| | | | | | | | Prepayment Rate (%) | | 20.0% | | 20.0% |
Equity interests | | | 81,927 | | | Enterprise Value Waterfall | | Revenue Multiples (x) | | 0.1x - 9.4x | | 6.7x |
| | | | | | | | EBITDA Multiples (x) | | 1.0x - 21.9x | | 8.6x |
Total | | $ | 955,341 | | | | | | | | | |
| * | The weighted average in the table above is calculated based on each investment’s fair value weighting, using the applicable unobservable input. |
The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements of assets as of February 29, 2024 were as follows (dollars in thousands):
| | Fair Value | | | Valuation Technique | | Unobservable Input | | Range | | Weighted Average* |
First lien term loans | | $ | 976,423 | | | Market Comparables | | Market Yield (%) | | 10.6% - 17.2% | | 13.0% |
| | | | | | | | Revenue Multiples (x) | | 4.6x - 9.4x | | 6.6x |
| | | | | | | | EBITDA Multiples (x) | | 5.0x - 6.0x | | 5.6x |
| | | | | | | | Third-party bid (x) | | 3.9x - 4.2x | | 4.0x |
Second lien term loans | | | 18,097 | | | Market Comparables | | Market Yield (%) | | 19.0% - 28.3% | | 25.5% |
| | | | | | | | EBITDA Multiples (x) | | 7.0x | | 7.0x |
| | | | | | | | Third-party bid (x) | | 29.7x | | 29.7x |
Unsecured term loans | | | 15,818 | | | Discounted Cash Flow | | Discount Rate (%) | | 10.5% | | 10.5% |
Structured finance securities | | | 30,626 | | | Discounted Cash Flow | | Discount Rate (%) | | 8.5% - 22.0% | | 15.1% |
| | | | | | | | Recovery Rate (%) | | 35.0% - 70.0% | | 70.0% |
| | | | | | | | Prepayment Rate (%) | | 20.0% | | 20.0% |
Equity interests | | | 88,426 | | | Enterprise Value Waterfall | | EBITDA Multiples (x) | | 4.7x - 20.4x | | 10.4x |
| | | | | | | | Revenue Multiples (x) | | 1.3x - 10.4x | | 6.3x |
| | | | | | | | Third-party bid (x) | | 3.9x | | 3.9x |
Total | | $ | 1,129,390 | | | | | | | | | |
| * | The weighted average in the table above is calculated based on each investment’s fair value weighting, using the applicable unobservable input. |
For investments utilizing a market comparables valuation technique, a significant increase (decrease) in the market yield, in isolation, would result in a significantly lower (higher) fair value measurement, and a significant increase (decrease) in any of the earnings before interest, tax, depreciation and amortization (“EBITDA”) or revenue valuation multiples, in isolation, would result in a significantly higher (lower) fair value measurement. For investments utilizing a discounted cash flow valuation technique, a significant increase (decrease) in the discount rate, and prepayment rate, in isolation, would result in a significantly lower (higher) fair value measurement while a significant increase (decrease) in recovery rate, in isolation, would result in a significantly higher (lower) fair value measurement. For investments utilizing a market quote, third party bid or net asset value in deriving a value, a significant increase (decrease) in the market quote, bid or net asset value in isolation, would result in a significantly higher (lower) fair value measurement.
The composition of our investments as of November 30, 2024 at amortized cost and fair value was as follows (dollars in thousands):
| | Investments at Amortized Cost | | | Amortized Cost Percentage of Total Portfolio | | | Investments at Fair Value | | | Fair Value Percentage of Total Portfolio | |
First lien term loans | | $ | 834,750 | | | | 86.3 | % | | $ | 833,223 | | | | 86.8 | % |
Second lien term loans | | | 6,827 | | | | 0.7 | | | | 6,140 | | | | 0.6 | |
Unsecured term loans | | | 17,619 | | | | 3.9 | | | | 16,199 | | | | 1.7 | |
Structured finance securities | | | 37,396 | | | | 1.8 | | | | 17,852 | | | | 1.9 | |
Equity interests | | | 70,750 | | | | 7.3 | | | | 86,679 | | | | 9.0 | |
Total | | $ | 967,342 | | | | 100.0 | % | | $ | 960,093 | | | | 100.0 | % |
The composition of our investments as of February 29, 2024 at amortized cost and fair value was as follows (dollars in thousands):
| | Investments at Amortized Cost | | | Amortized Cost Percentage of Total Portfolio | | | Investments at Fair Value | | | Fair Value Percentage of Total Portfolio | |
First lien term loans | | $ | 1,019,678 | | | | 86.4 | % | | $ | 976,423 | | | | 85.7 | % |
Second lien term loans | | | 21,968 | | | | 1.9 | | | | 18,097 | | | | 1.6 | |
Unsecured term loans | | | 17,619 | | | | 1.5 | | | | 15,818 | | | | 1.4 | |
Structured finance securities | | | 42,769 | | | | 3.6 | | | | 30,626 | | | | 2.7 | |
Equity interests | | | 77,750 | | | | 6.6 | | | | 97,830 | | | | 8.6 | |
Total | | $ | 1,179,784 | | | | 100.0 | % | | $ | 1,138,794 | | | | 100.0 | % |
For loans and debt securities for which market quotations are not readily available, the Company determines their fair value based on third party indicative broker quotes, where available, or the inputs that a hypothetical market participant would use to value the security in a current hypothetical sale using a market comparables valuation technique. In applying the market comparables valuation technique, the Company determines the fair value based on such factors as market participant inputs including synthetic credit ratings, estimated remaining life, current market yield and interest rate spreads of similar securities as of the measurement date. If, in the Company’s judgment, the market comparables technique is not sufficient or appropriate, the Company may use additional techniques such as an asset liquidation or expected recovery model.
For equity securities of portfolio companies and partnership interests, the Company determines the fair value using an enterprise value waterfall valuation technique. Under the enterprise value waterfall valuation technique, the Company determines the enterprise fair value of the portfolio company and then waterfalls the enterprise value over the portfolio company’s securities in order of their preference relative to one another. To estimate the enterprise value of the portfolio company, the Company weighs some or all of the traditional market valuation techniques and factors based on the individual circumstances of the portfolio company in order to estimate the enterprise value. The techniques for performing investments may be based on, among other things: valuations of comparable public companies, recent sales of private and public comparable companies, discounting the forecasted cash flows of the portfolio company, third party valuations of the portfolio company, considering offers from third parties to buy the company, estimating the value to potential strategic buyers and considering the value of recent investments in the equity securities of the portfolio company. For non-performing investments, the Company may estimate the liquidation or collateral value of the portfolio company’s assets and liabilities. The Company also takes into account historical and anticipated financial results.
The Company’s investments in Saratoga CLO and SLF 2022 are carried at fair value, which is based on a discounted cash flow valuation technique that utilizes prepayment, re-investment and loss inputs based on historical experience and projected performance, economic factors, the characteristics of the underlying cash flow, and comparable yields for equity interests in collateralized loan obligation funds similar to Saratoga CLO and SLF 2022, when available, as determined by the Manager and recommended to the Company’s board of directors. Specifically, the Company uses Intex cash flows, or an appropriate substitute, to form the basis for the valuation of the investment in Saratoga CLO and SLF 2022. The cash flows use a set of inputs including projected default rates, recovery rates, reinvestment rates and prepayment rates in order to arrive at estimated valuations. The inputs are based on available market data and projections provided by third parties as well as management estimates. The Company ran Intex models based on inputs about the refinanced Saratoga CLO’s structure and the SLF 2022 structure, including capital structure, cost of liabilities and reinvestment period. The Company uses the output from the Intex models (i.e., the estimated cash flows) to perform a discounted cash flow analysis on expected future cash flows to determine a valuation for our investments in Saratoga CLO and SLF 2022 at November 30, 2024. The inputs at November 30, 2024 for the valuation model include:
| ● | Discount rate: 8.5%-40.0% |
| ● | Reinvestment rate / price: S+365bps / $99.00 |
The Company’s equity investment in SLF JV is measured using the proportionate share of the NAV of SLF JV, or equivalent, as practical expedient.
Investment Concentration
Set forth is a brief description of each portfolio company in which the fair value of the Company’s investment represents greater than 5% of the Company’s total assets as of November 30, 2024, excluding Saratoga CLO, SLF JV and SLF 2022 (see Note 4. Investment in Saratoga CLO and Note 5. Investment in SLF JV for more information on Saratoga CLO, SLF JV and SLF 2022, respectively).
Artemis Wax Corp.
Artemis Wax Corporation is a U.S. based retail aggregator of European Wax Center (“EWC”) franchise locations with a concentration in the northeast. Founded in 2004, EWC is the largest U.S. body waxing national chain with more than 800 locations across the country.
Granite Comfort, LP
Granite Comfort, LP is a U.S. based heating, ventilation and air conditioning (“HVAC”) company. The company provides traditional service and replacement of HVAC / plumbing systems, as well as a rental model that is in the early stages of implementation.
Note 4. Investment in Saratoga CLO
On January 22, 2008, the Company entered into a collateral management agreement with Saratoga CLO, pursuant to which the Company acts as its collateral manager. The Saratoga CLO was initially refinanced in October 2013 with its reinvestment period extended to October 2016. On November 15, 2016, the Company completed a second refinancing of the Saratoga CLO with its reinvestment period extended to October 2018.
On December 14, 2018, the Company completed a third refinancing and upsize of the Saratoga CLO (the “2013-1 Reset CLO Notes”). The third Saratoga CLO refinancing, among other things, extended its reinvestment period to January 2021, and extended its legal maturity date to January 2030. Following this refinancing, the Saratoga CLO portfolio increased its aggregate principal amount from approximately $300.0 million to approximately $500.0 million of predominantly senior secured first lien term loans.
On February 11, 2020, the Company entered into an unsecured loan agreement (“CLO 2013-1 Warehouse 2 Loan”) with Saratoga Investment Corp. CLO 2013-1 Warehouse 2, Ltd. (“CLO 2013-1 Warehouse 2”), a wholly owned subsidiary of Saratoga CLO. During the fourth quarter ended February 28, 2021, the CLO 2013-1 Warehouse 2 Ltd. was repaid in full.
On February 26, 2021, the Company completed the fourth refinancing of the Saratoga CLO. This refinancing, among other things, extended the Saratoga CLO reinvestment period to April 2024, extended its legal maturity to April 2033, and added a non-call period of February 2022. In addition, and as part of the refinancing, the Saratoga CLO was upsized from $500 million in assets to approximately $650 million. As part of this refinancing and upsizing, the Company invested an additional $14.0 million in all of the newly issued subordinated notes of the Saratoga CLO, and purchased $17.9 million in aggregate principal amount of the Class F-R-3 Notes tranche at par. Concurrently, the existing $2.5 million of Class F-R-2 Notes, $7.5 million of Class G-R-2 Notes and $25.0 million of the CLO 2013-1 Warehouse 2 Loan were repaid. The Company also paid $2.6 million of transaction costs related to the refinancing and upsizing on behalf of the Saratoga CLO, to be reimbursed from future equity distributions. At August 31, 2021, the outstanding receivable of $2.6 million was repaid in full.
On August 9, 2021, the Company exchanged its existing $17.9 million Class F-R-3 Note for $8.5 million Class F-1-R-3 Notes and $9.4 million Class F-2-R-3 Notes at par. On August 11, 2021, the Company sold its Class F-1-R-3 Notes to third parties, resulting in a realized loss of $0.1 million.
On June 10, 2024, the Company completed its fifth refinancing of the Saratoga CLO. This refinancing, among other things, did not extend the Saratoga CLO reinvestment period nor extend its legal maturity, while adjusting the interest rate of two of the existing Notes. The Issuer issued $422.5 million of notes (the “2013-1 2024 Reset CLO Notes”), consisting of Class A-1-R-4 and Class A-2-R-4. The 2013-1 2024 Reset CLO Notes were issued pursuant to the Indenture with the same Trustee. Proceeds of the issuance of the 2013-1 2024 Reset CLO Notes were used along with existing assets of the Saratoga CLO to redeem the existing Class A-1-R-3 and Class A-2-R-3 Notes. No other Notes were refinanced as part of this refinancing. The Saratoga CLO paid $0.5 million of transaction costs related to the refinancing.
The Saratoga CLO remains effectively 100.0% owned and managed by the Company. The Company receives a base management fee of 0.10% per annum and a subordinated management fee of 0.40% per annum of the outstanding principal amount of Saratoga CLO’s assets, paid quarterly to the extent of available proceeds. Following the third refinancing and the issuance of the 2013-1 Reset CLO Notes on December 14, 2018, the Company is no longer entitled to an incentive management fee equal to 20.0% of excess cash flow to the extent the Saratoga CLO subordinated notes receive an internal rate of return paid in cash equal to or greater than 12.0%.
For the three months ended November 30, 2024 and November 30, 2023, the Company accrued management fee income of $0.8 million and $0.8 million, respectively, and interest income of $0.0 million and $0.0 million, respectively, from the subordinated notes of Saratoga CLO.
For the nine months ended November 30, 2024 and November 30, 2023, the Company accrued management fee income of $2.4 million and $2.5 million, respectively, and interest income of $0.0 million and $0.0 million, respectively, from the subordinated notes of Saratoga CLO.
As of November 30, 2024, the aggregate principal amounts of the Company’s investments in the subordinated notes and Class F-2-R-3 Notes of the Saratoga CLO was $111.0 million and $9.4 million, respectively, which had a corresponding fair value of $1.3 million and $4.3 million, respectively. The Company determines the fair value of its investment in the subordinated notes of Saratoga CLO based on the present value of the projected future cash flows of the subordinated notes over the life of Saratoga CLO. As of November 30, 2024, Saratoga CLO had investments with a principal balance of $558.8 million and a weighted average spread over TERM SOFR of 3.7% and had debt with a principal balance of $559.2 million with a weighted average spread over TERM SOFR of 2.3%. As a result, Saratoga CLO earns a “spread” between the interest income it receives on its investments and the interest expense it pays on its debt and other operating expenses, which is distributed quarterly to the Company as the holder of its subordinated notes. As of November 30, 2024, the present value of the projected future cash flows of the subordinated notes was approximately $1.3 million, using a 40% discount rate. The Company’s total investment in the subordinate notes of Saratoga CLO is $57.8 million, which consists of additional investments of $30 million in January 2008, $13.8 million in December 2018 and $14.0 million in February 2021; to date, the Company has received distributions of $90.0 million, management fees of $37.5 million and incentive fees of $1.2 million.
As of February 29, 2024, the Company determined that the fair value of its investment in the subordinated notes of Saratoga CLO was $9.5 million. As of February 29, 2024, the fair value of its investment in the Class F-R-3 Notes of Saratoga CLO was $8.9 million. As of February 29, 2024, Saratoga CLO had investments with a principal balance of $640.8 million and a weighted average spread over TERM SOFR of 3.8% and had debt with a principal balance of $611.0 million with a weighted average spread over TERM SOFR of 2.2%. As of February 29, 2024, the present value of the projected future cash flows of the subordinated notes, was approximately $9.5 million, using a 22.0% discount rate. The Company’s total investment in the subordinate notes of Saratoga CLO is $57.8 which consists of additional investments of $30 million in January 2008, $13.8 million in December 2018 and $14.0 million in February 2021. To date the Company has since received distributions of $84.6 million, management fees of $35.1 million and incentive fees of $1.2 million.
Below is certain financial information from the separate financial statements of Saratoga CLO as of November 30, 2024 (unaudited) and February 29, 2024 and for the three and nine months ended November 30, 2024 (unaudited) and November 30, 2023 (unaudited).
Saratoga Investment Corp. CLO 2013-1, Ltd.
Statements of Assets and Liabilities
| | November 30, 2024 | | | February 29, 2024 | |
| | (unaudited) | | | | |
ASSETS | | | | | | |
Investments at fair value | | | | | | |
Loans at fair value (amortized cost of $548,610,503 and $629,345,724, respectively) | | $ | 523,822,494 | | | $ | 606,531,189 | |
Equities at fair value (amortized cost of $2,911,603 and $1,649,986, respectively) | | | 1,909,443 | | | | 1,020,585 | |
Total investments at fair value (amortized cost of $551,522,106 and $630,995,710, respectively) | | | 525,731,937 | | | | 607,551,774 | |
Cash and cash equivalents | | | 26,917,052 | | | | 12,104,832 | |
Receivable from open trades | | | 1,684,753 | | | | 2,865,174 | |
Interest receivable (net of reserve of $605,564 and $615,604, respectively) | | | 3,038,940 | | | | 3,402,471 | |
Due from affiliate | | | 57,001 | | | | 3,953 | |
Prepaid expenses and other assets | | | 119,457 | | | | 205,400 | |
Total assets | | $ | 557,549,140 | | | $ | 626,133,604 | |
| | | | | | | | |
LIABILITIES | | | | | | | | |
Interest payable | | $ | 4,351,257 | | | $ | 5,043,712 | |
Payable from open trades | | | 1,685,480 | | | | 10,519,573 | |
Accrued base management fee | | | 65,474 | | | | 68,605 | |
Accrued subordinated management fee | | | 261,895 | | | | 274,418 | |
Accounts payable and accrued expenses | | | 141,542 | | | | 84,199 | |
Saratoga Investment Corp. CLO 2013-1, Ltd. Notes: | | | | | | | | |
Class A-1-R-3 Senior Secured Floating Rate Notes | | | - | | | | 357,500,000 | |
Class A-2-R-3 Senior Secured Floating Rate Notes | | | - | | | | 65,000,000 | |
Class A-1-R-4 Senior Secured Floating Rate Notes | | | 305,727,301 | | | | - | |
Class A-2-R-4 Senior Secured Floating Rate Notes | | | 65,000,000 | | | | - | |
Class B-FL-R-3 Senior Secured Floating Rate Notes | | | 60,500,000 | | | | 60,500,000 | |
Class B-FXD-R-3 Senior Secured Fixed Rate Notes | | | 11,000,000 | | | | 11,000,000 | |
Class C-FL-R-3 Deferrable Mezzanine Floating Rate Notes | | | 26,000,000 | | | | 26,000,000 | |
Class C-FXD-R-3 Deferrable Mezzanine Fixed Rate Notes | | | 6,500,000 | | | | 6,500,000 | |
Class D-R-3 Deferrable Mezzanine Floating Rate Notes | | | 39,000,000 | | | | 39,000,000 | |
Discount on Class D-R-3 Notes | | | (201,967 | ) | | | (220,100 | ) |
Class E-R-3 Deferrable Mezzanine Floating Rate Notes | | | 27,625,000 | | | | 27,625,000 | |
Discount on Class E-R-3 Notes | | | (2,098,217 | ) | | | (2,286,598 | ) |
Class F-1-R-3 Notes Deferrable Junior Floating Rate Notes | | | 8,500,000 | | | | 8,500,000 | |
Class F-2-R-3 Notes Deferrable Junior Floating Rate Notes | | | 9,375,000 | | | | 9,375,000 | |
Deferred debt financing costs | | | (1,266,542 | ) | | | (1,707,224 | ) |
Subordinated Notes | | | 111,000,000 | | | | 111,000,000 | |
Discount on Subordinated Notes | | | (33,185,548 | ) | | | (36,164,988 | ) |
Total liabilities | | | 639,980,675 | | | | 697,611,597 | |
| | | | | | | | |
Commitments and contingencies | | | | | | | | |
| | | | | | | | |
NET ASSETS | | | | | | | | |
Ordinary equity, par value $1.00, 250 ordinary shares authorized, 250 and 250 common shares issued and outstanding, respectively | | | 250 | | | | 250 | |
Total distributable earnings (loss) | | | (82,431,785 | ) | | | (71,478,243 | ) |
Total net deficit | | | (82,431,535 | ) | | | (71,477,993 | ) |
Total liabilities and net assets | | $ | 557,549,140 | | | $ | 626,133,604 | |
See accompanying notes to financial statements.
Saratoga Investment Corp. CLO 2013-1, Ltd.
Statements of Operations
(unaudited)
| | For the three months ended | | | For the nine months ended | |
| | November 30, 2024 | | | November 30, 2023 | | | November 30, 2024 | | | November 30, 2023 | |
INVESTMENT INCOME | | | | | | | | | | | | |
Total interest from investments | | $ | 13,342,306 | | | $ | 15,599,943 | | | $ | 43,995,503 | | | $ | 46,240,246 | |
Interest from cash and cash equivalents | | | 289,869 | | | | 139,759 | | | | 853,765 | | | | 480,995 | |
Other income | | | 124,901 | | | | 286,607 | | | | 1,225,297 | | | | 756,831 | |
Total investment income | | | 13,757,076 | | | | 16,026,309 | | | | 46,074,565 | | | | 47,478,072 | |
| | | | | | | | | | | | | | | | |
EXPENSES | | | | | | | | | | | | | | | | |
Interest and debt financing expenses | | | 13,408,313 | | | | 14,644,320 | | | | 42,605,821 | | | | 43,349,057 | |
Base management fee | | | 775,398 | | | | 163,985 | | | | 1,094,754 | | | | 490,793 | |
Subordinated management fee | | | - | | | | 655,943 | | | | 1,277,423 | | | | 1,963,174 | |
Professional fees | | | 79,709 | | | | 87,540 | | | | 222,005 | | | | 260,431 | |
Trustee expenses | | | 64,157 | | | | 64,554 | | | | 187,635 | | | | 193,588 | |
Other expense | | | 66,339 | | | | 50,330 | | | | 242,902 | | | | 190,215 | |
Total expenses | | | 14,393,916 | | | | 15,666,672 | | | | 45,630,540 | | | | 46,447,258 | |
NET INVESTMENT INCOME (LOSS) | | | (636,840 | ) | | | 359,637 | | | | 444,025 | | | | 1,030,814 | |
| | | | | | | | | | | | | | | | |
REALIZED AND UNREALIZED LOSS ON INVESTMENTS | | | | | | | | | | | | | | | | |
Net realized loss from investments | | | (1,278,236 | ) | | | (6,298,909 | ) | | | (8,472,121 | ) | | | (9,048,743 | ) |
Net change in unrealized depreciation on investments | | | (1,626,867 | ) | | | (313,230 | ) | | | (2,346,233 | ) | | | 2,702,275 | |
Net realized and unrealized gain (loss) on investments | | | (2,905,103 | ) | | | (6,612,139 | ) | | | (10,818,354 | ) | | | (6,346,468 | ) |
Realized losses on extinguishment of debt | | | - | | | | - | | | | (579,213 | ) | | | - | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | (3,541,943 | ) | | $ | (6,252,502 | ) | | $ | (10,953,542 | ) | | $ | (5,315,654 | ) |
See accompanying notes to financial statements
Saratoga Investment Corp. CLO 2013-1, Ltd.
Schedule of Investments
November 30, 2024
(unaudited)
Issuer Name | | Industry | | Asset Name | | Asset Type | | Reference Rate/Spread | | SOFR/LIBOR Floor | | | Current Rate (All In) | | | Maturity Date | | Principal/ Number of Shares | | | Cost | | | Fair Value | |
Altisource Solutions S.a r.l. | | Banking, Finance, Insurance & Real Estate | | Common Stock | | Equity | | | | | | | | | | | | | | | | | | | 15,981 | | | $ | - | | | $ | 14,223 | |
Endo Finance Holdings, Inc. | | Healthcare & Pharmaceuticals | | Common Stock | | Equity | | | | | | | | | | | | | | | | | | | 23,799 | | | | 660,422 | | | | 583,076 | |
Endo Finance Holdings, Inc. | | Healthcare & Pharmaceuticals | | Warrants | | Equity | | | | | | | | | | | | | | | | | | | 349 | | | | 9,685 | | | | 8,551 | |
Envision Parent Inc | | Healthcare & Pharmaceuticals | | Common Stock | | Equity | | | | | | | | | | | | | | | | | | | 4,410 | | | | 175,000 | | | | 50,715 | |
Envision Parent Inc | | Healthcare & Pharmaceuticals | | Warrants | | Equity | | | | | | | | | | | | | | | | | | | 92,837 | | | | - | | | | 4,642 | |
Instant Brands Litigation Trust | | Consumer goods: Durable | | Equity Interest | | Equity | | | | | | | | | | | | | | | | | | | 50,038 | | | | 34,198 | | | | 150,000 | |
Isagenix International, LLC | | Beverage, Food & Tobacco | | Common Stock | | Equity | | | | | | | | | | | | | | | | | | | 86,398 | | | | - | | | | - | |
Research Now Group, Inc | | Media: Advertising, Printing & Publishing | | Common Stock | | Equity | | | | | | | | | | | | | | | | | | | 39,808 | | | | 557,312 | | | | 676,736 | |
Resolute Investment Managers (American Beacon), Inc. | | Banking, Finance, Insurance & Real Estate | | Common Stock | | Equity | | | | | | | | | | | | | | | | | | | 24,320 | | | | 1,034,581 | | | | 66,880 | |
URS TOPCO, LLC | | Transportation: Cargo | | Common Stock | | Equity | | | | | | | | | | | | | | | | | | | 25,330 | | | | 440,405 | | | | 354,620 | |
1011778 B.C Unltd Liability Co | | Beverage, Food & Tobacco | | Term Loan B6 | | Loan | | 1M USD SOFR+ | | | 1.75 | % | | | 0.00 | % | | | 6.32 | % | | 9/20/2030 | | $ | 1,440,272 | | | | 1,422,144 | | | | 1,437,391 | |
19TH HOLDINGS GOLF, LLC | | Consumer goods: Durable | | Term Loan | | Loan | | 1M USD SOFR+ | | | 3.25 | % | | | 0.50 | % | | | 7.99 | % | | 2/7/2029 | | | 2,454,811 | | | | 2,376,785 | | | | 2,396,510 | |
888 Acquisitions Limited | | Hotel, Gaming & Leisure | | Term Loan B | | Loan | | 6M USD SOFR+ | | | 5.25 | % | | | 0.00 | % | | | 9.50 | % | | 7/8/2028 | | | 3,052,566 | | | | 2,796,616 | | | | 2,930,463 | |
Adtalem Global Education Inc. | | Services: Business | | Term Loan B (08/24) | | Loan | | 1M USD SOFR+ | | | 2.75 | % | | | 0.75 | % | | | 7.32 | % | | 8/12/2028 | | | 582,329 | | | | 579,025 | | | | 585,240 | |
Aegis Sciences Corporation | | Healthcare & Pharmaceuticals | | Term Loan | | Loan | | 3M USD SOFR+ | | | 5.50 | % | | | 1.00 | % | | | 10.28 | % | | 5/9/2025 | | | 2,277,447 | | | | 2,275,329 | | | | 1,408,214 | |
Saratoga Investment Corp. CLO 2013-1, Ltd.
Schedule of Investments
November 30, 2024
(unaudited)
Issuer Name | | Industry | | Asset Name | | Asset Type | | Reference Rate/Spread | | SOFR/LIBOR Floor | | | Current Rate (All In) | | | Maturity Date | | Principal/ Number of Shares | | | Cost | | | Fair Value | |
Agiliti Health Inc. | | Healthcare & Pharmaceuticals | | Term Loan B (03/23) | | Loan | | 6M USD SOFR+ | | | 3.00 | % | | | 0.00 | % | | | 7.26 | % | | 5/1/2030 | | | 2,159,600 | | | | 2,145,396 | | | | 2,123,167 | |
AHEAD DB Holdings, LLC | | Services: Business | | Term Loan B3 (07/24) | | Loan | | 3M USD SOFR+ | | | 3.50 | % | | | 0.75 | % | | | 8.10 | % | | 2/1/2031 | | | 2,902,931 | | | | 2,843,841 | | | | 2,923,629 | |
Air Canada | | Transportation: Consumer | | Term Loan B (03/24) | | Loan | | 3M USD SOFR+ | | | 2.00 | % | | | 0.00 | % | | | 6.75 | % | | 3/21/2031 | | | 995,000 | | | | 992,585 | | | | 996,423 | |
AIT Worldwide Logistics Holdings, Inc. | | Transportation: Cargo | | Term Loan B (10/24) | | Loan | | 1M USD SOFR+ | | | 4.75 | % | | | 0.75 | % | | | 9.48 | % | | 4/5/2030 | | | 2,455,696 | | | | 2,336,935 | | | | 2,475,145 | |
AlixPartners, LLP | | Banking, Finance, Insurance & Real Estate | | Term Loan B (01/21) | | Loan | | 1M USD SOFR+ | | | 2.50 | % | | | 0.50 | % | | | 7.19 | % | | 2/4/2028 | | | 241,249 | | | | 241,115 | | | | 242,557 | |
Alkermes, Inc. | | Healthcare & Pharmaceuticals | | Term Loan B (3/21) | | Loan | | 1M USD SOFR+ | | | 2.50 | % | | | 0.50 | % | | | 7.19 | % | | 3/12/2026 | | | 2,088,347 | | | | 2,082,135 | | | | 2,090,957 | |
Allen Media, LLC | | Media: Diversified & Production | | Term Loan (7/21) | | Loan | | 3M USD SOFR+ | | | 5.50 | % | | | 0.00 | % | | | 10.25 | % | | 2/10/2027 | | | 4,315,175 | | | | 4,299,517 | | | | 2,807,021 | |
Alliant Holdings Intermediate, LLC | | Banking, Finance, Insurance & Real Estate | | Term Loan B6 (09/24) | | Loan | | 1M USD SOFR+ | | | 2.75 | % | | | 0.00 | % | | | 7.35 | % | | 9/19/2031 | | | 799,019 | | | | 799,019 | | | | 803,517 | |
Allied Universal Holdco LLC | | Services: Business | | Term Loan 4/21 | | Loan | | 1M USD SOFR+ | | | 3.75 | % | | | 0.50 | % | | | 8.42 | % | | 5/12/2028 | | | 1,940,000 | | | | 1,934,896 | | | | 1,952,125 | |
Alterra Mountain Company (Intrawest Resort Holdings) | | Hotel, Gaming & Leisure | | First Lien Term Loan | | Loan | | 1M USD SOFR+ | | | 3.00 | % | | | 0.00 | % | | | 7.57 | % | | 5/31/2030 | | | 249,375 | | | | 249,375 | | | | 251,245 | |
Altisource Solutions S.a r.l. (c) | | Banking, Finance, Insurance & Real Estate | | Term Loan B (03/18) | | Loan | | 3M USD SOFR+ | | | 5.00 | % | | | 1.00 | % | | | 9.70 | % | | 4/30/2025 | | | 1,143,064 | | | | 1,143,280 | | | | 514,379 | |
Altium Packaging LLC | | Containers, Packaging & Glass | | Term Loan B | | Loan | | 1M USD SOFR+ | | | 2.50 | % | | | 0.00 | % | | | 7.07 | % | | 6/11/2031 | | | 483,788 | | | | 482,610 | | | | 482,781 | |
Amer Sports Oyj (MASCOT BIDCO OY) | | Consumer goods: Durable | | USD Term Loan B (01/24) | | Loan | | 3M USD SOFR+ | | | 2.75 | % | | | 0.00 | % | | | 7.24 | % | | 2/17/2031 | | | 349,125 | | | | 347,589 | | | | 352,180 | |
American Axle & Manufacturing Inc. | | Automotive | | Term Loan (12/22) | | Loan | | 1M USD SOFR+ | | | 3.00 | % | | | 0.50 | % | | | 7.62 | % | | 12/13/2029 | | | 480,000 | | | | 468,818 | | | | 481,800 | |
American Greetings Corporation | | Media: Advertising, Printing & Publishing | | Term Loan B (04/24) | | Loan | | 1M USD SOFR+ | | | 5.75 | % | | | 0.00 | % | | | 10.32 | % | | 10/30/2029 | | | 2,945,449 | | | | 2,944,082 | | | | 2,963,121 | |
American Trailer World Corp | | Automotive | | Term Loan | | Loan | | 1M USD SOFR+ | | | 3.75 | % | | | 0.75 | % | | | 8.42 | % | | 3/3/2028 | | | 1,357,439 | | | | 1,356,452 | | | | 1,162,307 | |
AmWINS Group, LLC | | Banking, Finance, Insurance & Real Estate | | Term Loan 2/21 | | Loan | | 1M USD SOFR+ | | | 2.25 | % | | | 0.75 | % | | | 6.94 | % | | 2/17/2028 | | | 1,925,038 | | | | 1,911,926 | | | | 1,932,257 | |
Anastasia Parent LLC | | Consumer goods: Non-durable | | Term Loan | | Loan | | 3M USD SOFR+ | | | 3.75 | % | | | 0.00 | % | | | 8.62 | % | | 8/11/2025 | | | 940,000 | | | | 939,214 | | | | 605,125 | |
Saratoga Investment Corp. CLO 2013-1, Ltd.
Schedule of Investments
November 30, 2024
(unaudited)
Issuer Name | | Industry | | Asset Name | | Asset Type | | Reference Rate/Spread | | SOFR/LIBOR Floor | | | Current Rate (All In) | | | Maturity Date | | Principal/ Number of Shares | | | Cost | | | Fair Value | |
Anchor Packaging, LLC | | Containers, Packaging & Glass | | Term Loan (4/24) | | Loan | | 1M USD SOFR+ | | | 3.75 | % | | | 0.00 | % | | | 8.44 | % | | 7/18/2029 | | | 1,949,282 | | | | 1,932,103 | | | | 1,959,730 | |
AP Core Holdings II LLC | | High Tech Industries | | Term Loan B1 | | Loan | | 1M USD SOFR+ | | | 5.50 | % | | | 0.75 | % | | | 10.19 | % | | 9/1/2027 | | | 1,699,981 | | | | 1,686,320 | | | | 1,655,782 | |
AP Core Holdings II LLC | | High Tech Industries | | Term Loan B2 | | Loan | | 1M USD SOFR+ | | | 5.50 | % | | | 0.75 | % | | | 10.19 | % | | 9/1/2027 | | | 500,000 | | | | 495,988 | | | | 485,730 | |
APEX GROUP TREASURY LLC | | Banking, Finance, Insurance & Real Estate | | Term Loan B (07/24) | | Loan | | 6M USD SOFR+ | | | 4.00 | % | | | 0.00 | % | | | 9.08 | % | | 7/27/2028 | | | 491,269 | | | | 468,492 | | | | 495,774 | |
Apollo Commercial Real Estate Finance, Inc. | | Banking, Finance, Insurance & Real Estate | | Term Loan B | | Loan | | 1M USD SOFR+ | | | 2.75 | % | | | 0.00 | % | | | 7.44 | % | | 5/15/2026 | | | 2,885,787 | | | | 2,873,078 | | | | 2,878,572 | |
Apollo Commercial Real Estate Finance, Inc. | | Banking, Finance, Insurance & Real Estate | | Term Loan B1 (2/21) | | Loan | | 1M USD SOFR+ | | | 3.50 | % | | | 0.50 | % | | | 8.19 | % | | 3/6/2028 | | | 965,000 | | | | 959,761 | | | | 955,350 | |
AppLovin Corporation | | High Tech Industries | | Term Loan B | | Loan | | 1M USD SOFR+ | | | 2.50 | % | | | 0.50 | % | | | 7.19 | % | | 8/19/2030 | | | 964,769 | | | | 964,769 | | | | 964,943 | |
AppLovin Corporation | | High Tech Industries | | Term Loan B (3/24) | | Loan | | Prime | | | 1.50 | % | | | 0.50 | % | | | 9.25 | % | | 10/25/2028 | | | 1,466,381 | | | | 1,464,622 | | | | 1,465,853 | |
AqGen Ascensus, Inc. | | Banking, Finance, Insurance & Real Estate | | Term Loan | | Loan | | 1M USD SOFR+ | | | 3.50 | % | | | 0.50 | % | | | 8.19 | % | | 8/2/2028 | | | 496,075 | | | | 492,900 | | | | 499,176 | |
Aramark Services, Inc. | | Services: Consumer | | Term Loan | | Loan | | 1M USD SOFR+ | | | 1.75 | % | | | 0.00 | % | | | 6.44 | % | | 1/15/2027 | | | 2,331,250 | | | | 2,302,315 | | | | 2,331,973 | |
Aramark Services, Inc. | | Services: Consumer | | Term Loan B7 (03/24) | | Loan | | 1M USD SOFR+ | | | 2.00 | % | | | 0.00 | % | | | 6.57 | % | | 4/6/2028 | | | 1,753,715 | | | | 1,749,408 | | | | 1,758,380 | |
ARC FALCON I INC. | | Chemicals, Plastics, & Rubber | | Term Loan | | Loan | | 1M USD SOFR+ | | | 3.50 | % | | | 0.50 | % | | | 8.17 | % | | 9/23/2028 | | | 973,774 | | | | 971,828 | | | | 980,902 | |
ARCIS GOLF LLC | | Services: Consumer | | Term Loan B | | Loan | | 1M USD SOFR+ | | | 3.75 | % | | | 0.50 | % | | | 8.44 | % | | 11/24/2028 | | | 494,245 | | | | 490,303 | | | | 497,952 | |
Aretec Group, Inc. | | Banking, Finance, Insurance & Real Estate | | Term Loan B 2 | | Loan | | 1M USD SOFR+ | | | 4.00 | % | | | 0.00 | % | | | 8.57 | % | | 8/9/2030 | | | 2,622,898 | | | | 2,609,234 | | | | 2,637,979 | |
Aspire Bakeries Holdings, LLC | | Beverage, Food & Tobacco | | Term loan | | Loan | | 1M USD SOFR+ | | | 4.25 | % | | | 0.00 | % | | | 8.82 | % | | 12/23/2030 | | | 895,500 | | | | 887,468 | | | | 899,978 | |
Assuredpartners Inc. | | Banking, Finance, Insurance & Real Estate | | Term Loan B5 (02/24) | | Loan | | 1M USD SOFR+ | | | 3.50 | % | | | 0.50 | % | | | 8.07 | % | | 2/14/2031 | | | 1,293,500 | | | | 1,291,978 | | | | 1,301,662 | |
Asurion, LLC | | Banking, Finance, Insurance & Real Estate | | Term Loan B10 | | Loan | | 1M USD SOFR+ | | | 4.00 | % | | | 0.00 | % | | | 8.67 | % | | 8/19/2028 | | | 1,960,000 | | | | 1,891,862 | | | | 1,962,038 | |
Saratoga Investment Corp. CLO 2013-1, Ltd.
Schedule of Investments
November 30, 2024
(unaudited)
Issuer Name | | Industry | | Asset Name | | Asset Type | | Reference Rate/Spread | | SOFR/LIBOR Floor | | | Current Rate (All In) | | | Maturity Date | | Principal/ Number of Shares | | | Cost | | | Fair Value | |
Asurion, LLC | | Banking, Finance, Insurance & Real Estate | | Term Loan B12 | | Loan | | 1M USD SOFR+ | | | 4.25 | % | | | 0.00 | % | | | 8.82 | % | | 9/19/2030 | | | 2,919,478 | | | | 2,915,698 | | | | 2,915,215 | |
ATHENAHEALTH GROUP INC. | | Healthcare & Pharmaceuticals | | Term Loan B (2/22) | | Loan | | 1M USD SOFR+ | | | 3.25 | % | | | 0.50 | % | | | 7.82 | % | | 2/15/2029 | | | 1,307,142 | | | | 1,303,688 | | | | 1,310,410 | |
Avolon TLB Borrower 1 (US) LLC | | Capital Equipment | | Term Loan B6 | | Loan | | 1M USD SOFR+ | | | 1.75 | % | | | 0.00 | % | | | 6.36 | % | | 6/22/2030 | | | 1,472,622 | | | | 1,427,186 | | | | 1,472,210 | |
Axalta Coating Systems US Holdings | | Chemicals, Plastics, & Rubber | | Term Loan B (11/24) | | Loan | | 1M USD SOFR+ | | | 1.75 | % | | | 0.50 | % | | | 6.27 | % | | 12/20/2029 | | | 851,048 | | | | 844,586 | | | | 853,712 | |
AZURITY PHARMACEUTICALS, INC. | | Healthcare & Pharmaceuticals | | Term Loan B | | Loan | | 3M USD SOFR+ | | | 6.62 | % | | | 0.75 | % | | | 11.49 | % | | 9/20/2027 | | | 431,250 | | | | 424,125 | | | | 419,391 | |
B&G Foods, Inc. | | Beverage, Food & Tobacco | | Term Loan B | | Loan | | 1M USD SOFR+ | | | 3.50 | % | | | 0.00 | % | | | 8.07 | % | | 10/10/2029 | | | 533,621 | | | | 531,858 | | | | 533,621 | |
BAKELITE UK INTERMEDIATE LTD. | | Chemicals, Plastics, & Rubber | | Term Loan (5/24) | | Loan | | 3M USD SOFR+ | | | 3.50 | % | | | 0.50 | % | | | 8.10 | % | | 5/29/2029 | | | 1,477,528 | | | | 1,471,911 | | | | 1,487,220 | |
Baldwin Insurance Group Holdings, LLC | | Banking, Finance, Insurance & Real Estate | | Term Loan B | | Loan | | 1M USD SOFR+ | | | 3.25 | % | | | 0.00 | % | | | 7.82 | % | | 5/26/2031 | | | 1,644,400 | | | | 1,634,073 | | | | 1,656,733 | |
Belfor Holdings Inc. | | Services: Consumer | | Term Loan B-1 (11/23) | | Loan | | 1M USD SOFR+ | | | 3.75 | % | | | 0.50 | % | | | 8.32 | % | | 11/1/2030 | | | 1,494,834 | | | | 1,481,878 | | | | 1,505,118 | |
Bengal Debt Merger Sub LLC | | Beverage, Food & Tobacco | | Term Loan | | Loan | | 3M USD SOFR+ | | | 3.25 | % | | | 0.50 | % | | | 7.95 | % | | 1/24/2029 | | | 1,955,000 | | | | 1,954,381 | | | | 1,354,893 | |
Blackstone Mortgage Trust, Inc. | | Banking, Finance, Insurance & Real Estate | | Term Loan B | | Loan | | 1M USD SOFR+ | | | 2.25 | % | | | 0.00 | % | | | 6.94 | % | | 4/23/2026 | | | 962,019 | | | | 959,704 | | | | 960,816 | |
Blackstone Mortgage Trust, Inc. | | Banking, Finance, Insurance & Real Estate | | Term Loan (6/21) | | Loan | | 1M USD SOFR+ | | | 2.75 | % | | | 0.50 | % | | | 7.44 | % | | 4/23/2026 | | | 1,439,044 | | | | 1,435,048 | | | | 1,435,447 | |
Bombardier Recreational Products, Inc. | | Consumer goods: Durable | | Term Loan | | Loan | | 1M USD SOFR+ | | | 2.75 | % | | | 0.00 | % | | | 7.44 | % | | 1/22/2031 | | | 1,429,361 | | | | 1,425,833 | | | | 1,431,648 | |
Bombardier Recreational Products, Inc. | | Consumer goods: Durable | | Term Loan B3 | | Loan | | 1M USD SOFR+ | | | 2.75 | % | | | 0.50 | % | | | 7.44 | % | | 12/13/2029 | | | 490,047 | | | | 480,448 | | | | 491,654 | |
Boost Newco Borrower, LLC (Worldpay) | | Banking, Finance, Insurance & Real Estate | | Term Loan (06/24) | | Loan | | 3M USD SOFR+ | | | 2.50 | % | | | 0.00 | % | | | 7.10 | % | | 1/31/2031 | | | 500,000 | | | | 497,765 | | | | 504,105 | |
Boxer Parent Company, Inc. | | High Tech Industries | | Term Loan B (06/24) | | Loan | | 3M USD SOFR+ | | | 3.75 | % | | | 0.00 | % | | | 8.34 | % | | 7/30/2031 | | | 1,007,194 | | | | 1,002,871 | | | | 1,013,599 | |
BrightSpring Health Services (Phoenix Guarantor) | | Healthcare & Pharmaceuticals | | Term Loan (02/24) | | Loan | | 1M USD SOFR+ | | | 3.25 | % | | | 0.00 | % | | | 7.82 | % | | 2/21/2031 | | | 967,638 | | | | 967,638 | | | | 974,895 | |
Saratoga Investment Corp. CLO 2013-1, Ltd.
Schedule of Investments
November 30, 2024
(unaudited)
Issuer Name | | Industry | | Asset Name | | Asset Type | | Reference Rate/Spread | | SOFR/LIBOR Floor | | | Current Rate (All In) | | | Maturity Date | | Principal/ Number of Shares | | | Cost | | | Fair Value | |
BroadStreet Partners, Inc. | | Banking, Finance, Insurance & Real Estate | | Term Loan B-4 | | Loan | | 1M USD SOFR+ | | | 3.25 | % | | | 0.00 | % | | | 7.82 | % | | 6/14/2031 | | | 2,903,607 | | | | 2,901,538 | | | | 2,918,444 | |
Brookfield WEC Holdings Inc. | | Energy: Electricity | | Term Loan B | | Loan | | 1M USD SOFR+ | | | 2.25 | % | | | 0.00 | % | | | 6.92 | % | | 1/27/2031 | | | 1,444,069 | | | | 1,444,069 | | | | 1,449,008 | |
BROWN GROUP HOLDING, LLC | | Aerospace & Defense | | Term Loan B-2 | | Loan | | 1M USD SOFR+ | | | 2.75 | % | | | 0.00 | % | | | 7.32 | % | | 7/1/2031 | | | 492,516 | | | | 482,581 | | | | 494,771 | |
Buckeye Partners, L.P. | | Utilities: Oil & Gas | | Term Loan B4 (05/24) | | Loan | | 1M USD SOFR+ | | | 2.00 | % | | | 0.00 | % | | | 6.57 | % | | 11/22/2030 | | | 665,004 | | | | 662,876 | | | | 666,321 | |
Buckeye Partners, L.P. | | Utilities: Oil & Gas | | Term Loan B5 (09/24) | | Loan | | 1M USD SOFR+ | | | 1.75 | % | | | 0.00 | % | | | 6.32 | % | | 11/2/2026 | | | 567,280 | | | | 565,840 | | | | 567,672 | |
BW Gas & Convenience Holdings LLC | | Beverage, Food & Tobacco | | Term Loan B | | Loan | | 1M USD SOFR+ | | | 3.50 | % | | | 0.50 | % | | | 8.19 | % | | 3/31/2028 | | | 2,418,750 | | | | 2,405,594 | | | | 2,431,860 | |
Callaway Golf Company | | Retail | | Term Loan B | | Loan | | 1M USD SOFR+ | | | 3.00 | % | | | 0.00 | % | | | 7.57 | % | | 3/16/2030 | | | 472,500 | | | | 468,551 | | | | 469,939 | |
Calpine Corporation | | Utilities: Electric | | Term Loan B10 (01/24) | | Loan | | 1M USD SOFR+ | | | 2.00 | % | | | 0.00 | % | | | 6.57 | % | | 1/31/2031 | | | 1,990,000 | | | | 1,980,789 | | | | 1,994,259 | |
Camping World, Inc. | | Retail | | Term Loan B (5/21) | | Loan | | 1M USD SOFR+ | | | 2.50 | % | | | 0.75 | % | | | 7.19 | % | | 6/5/2028 | | | 2,443,038 | | | | 2,286,576 | | | | 2,391,392 | |
CAPSTONE BORROWER INC | | Services: Business | | Term Loan B (05/24) | | Loan | | 3M USD SOFR+ | | | 3.25 | % | | | 0.00 | % | | | 7.85 | % | | 6/17/2030 | | | 874,867 | | | | 863,792 | | | | 878,148 | |
CareerBuilder, LLC (c) | | Services: Business | | Term Loan B3 | | Loan | | 1M USD SOFR+ | | | 2.50 | % | | | 0.00 | % | | | 7.19 | % | | 7/31/2026 | | | 4,046,036 | | | | 4,032,687 | | | | 404,604 | |
Castle US Holding Corporation | | Media: Advertising, Printing & Publishing | | Term Loan B (USD) | | Loan | | 1M USD SOFR+ | | | 3.75 | % | | | 0.00 | % | | | 8.44 | % | | 1/27/2027 | | | 1,934,080 | | | | 1,929,004 | | | | 1,075,832 | |
CASTLELAKE AVIATION LLC | | Aerospace & Defense | | Term Loan B | | Loan | | 3M USD SOFR+ | | | 2.75 | % | | | 0.50 | % | | | 7.70 | % | | 10/21/2027 | | | 982,500 | | | | 977,381 | | | | 985,772 | |
CBL & Associates Limited Partnership | | Retail | | Term Loan 11/21 | | Loan | | 1M USD SOFR+ | | | 2.75 | % | | | 1.00 | % | | | 7.54 | % | | 11/1/2025 | | | 2,246,084 | | | | 2,087,998 | | | | 2,097,281 | |
CCC Intelligent Solutions Inc. | | Services: Business | | Term Loan B | | Loan | | 1M USD SOFR+ | | | 2.25 | % | | | 0.50 | % | | | 6.94 | % | | 9/16/2028 | | | 243,125 | | | | 242,851 | | | | 244,280 | |
CCI Buyer, Inc | | Telecommunications | | Term Loan | | Loan | | 3M USD SOFR+ | | | 4.00 | % | | | 0.75 | % | | | 8.60 | % | | 12/17/2027 | | | 241,250 | | | | 240,026 | | | | 242,888 | |
CCRR Parent, Inc. | | Healthcare & Pharmaceuticals | | Term Loan | | Loan | | 1M USD SOFR+ | | | 4.25 | % | | | 0.50 | % | | | 8.92 | % | | 3/5/2028 | | | 982,500 | | | | 948,322 | | | | 610,378 | |
Saratoga Investment Corp. CLO 2013-1, Ltd.
Schedule of Investments
November 30, 2024
(unaudited)
Issuer Name | | Industry | | Asset Name | | Asset Type | | Reference Rate/Spread | | SOFR/LIBOR Floor | | | Current Rate (All In) | | | Maturity Date | | Principal/ Number of Shares | | | Cost | | | Fair Value | |
CCRR Parent, Inc. | | Healthcare & Pharmaceuticals | | Term Loan B | | Loan | | 3M USD SOFR+ | | | 4.25 | % | | | 0.75 | % | | | 9.03 | % | | 3/5/2028 | | | 965,000 | | | | 962,597 | | | | 594,160 | |
CCS-CMGC Holdings, Inc. | | Healthcare & Pharmaceuticals | | Term Loan | | Loan | | 3M USD SOFR+ | | | 5.50 | % | | | 0.00 | % | | | 10.82 | % | | 9/25/2025 | | | 2,356,250 | | | | 2,352,816 | | | | 693,916 | |
CDK GLOBAL, INC. | | High Tech Industries | | Term Loan B (05/24) | | Loan | | 3M USD SOFR+ | | | 3.25 | % | | | 0.00 | % | | | 7.85 | % | | 7/6/2029 | | | 992,500 | | | | 970,171 | | | | 993,076 | |
CENTURI GROUP, INC. | | Construction & Building | | Term Loan B | | Loan | | 1M USD SOFR+ | | | 2.50 | % | | | 0.50 | % | | | 7.19 | % | | 8/27/2028 | | | 616,921 | | | | 613,354 | | | | 617,723 | |
Charlotte Buyer, Inc. | | Services: Business | | Term Loan B (07/24) | | Loan | | 1M USD SOFR+ | | | 4.75 | % | | | 0.50 | % | | | 9.37 | % | | 2/11/2028 | | | 1,477,500 | | | | 1,409,649 | | | | 1,488,168 | |
Chemours Company, (The) | | Chemicals, Plastics, & Rubber | | Term Loan B2 | | Loan | | 1M USD SOFR+ | | | 3.50 | % | | | 0.50 | % | | | 8.07 | % | | 8/18/2028 | | | 2,375,719 | | | | 2,343,004 | | | | 2,386,600 | |
Churchill Downs Incorporated | | Hotel, Gaming & Leisure | | Term Loan B1 (3/21) | | Loan | | 1M USD SOFR+ | | | 2.00 | % | | | 0.00 | % | | | 6.67 | % | | 3/17/2028 | | | 482,500 | | | | 481,987 | | | | 483,706 | |
CIMPRESS PUBLIC LIMITED COMPANY | | Media: Advertising, Printing & Publishing | | Term Loan B1 (05/24) | | Loan | | 1M USD SOFR+ | | | 3.00 | % | | | 0.50 | % | | | 7.57 | % | | 5/17/2028 | | | 1,945,049 | | | | 1,883,424 | | | | 1,958,023 | |
CITADEL SECURITIES LP | | Banking, Finance, Insurance & Real Estate | | Term Loan (10/24) | | Loan | | 1M USD SOFR+ | | | 2.00 | % | | | 0.00 | % | | | 6.57 | % | | 10/31/2031 | | | 4,826,890 | | | | 4,826,890 | | | | 4,845,280 | |
Citco Funding LLC | | Banking, Finance, Insurance & Real Estate | | Term Loan B (06/24) | | Loan | | 6M USD SOFR+ | | | 2.75 | % | | | 0.50 | % | | | 7.31 | % | | 4/27/2028 | | | 990,025 | | | | 986,322 | | | | 997,450 | |
Clarios Global LP | | Automotive | | Term Loan B (07/24) | | Loan | | 1M USD SOFR+ | | | 2.50 | % | | | 0.00 | % | | | 7.07 | % | | 5/6/2030 | | | 1,197,000 | | | | 1,192,203 | | | | 1,203,739 | |
Claros Mortgage Trust, Inc | | Banking, Finance, Insurance & Real Estate | | Term Loan B-1 (11/21) | | Loan | | 1M USD SOFR+ | | | 4.50 | % | | | 0.50 | % | | | 9.17 | % | | 8/9/2026 | | | 3,377,586 | | | | 3,367,642 | | | | 3,276,258 | |
CLYDESDALE ACQUISITION HOLDINGS, INC. | | Containers, Packaging & Glass | | Term Loan B | | Loan | | 1M USD SOFR+ | | | 3.18 | % | | | 0.50 | % | | | 7.75 | % | | 4/13/2029 | | | 1,220,000 | | | | 1,198,551 | | | | 1,226,686 | |
Columbus McKinnon Corporation | | Capital Equipment | | Term Loan (03/24) | | Loan | | 3M USD SOFR+ | | | 2.50 | % | | | 0.50 | % | | | 7.10 | % | | 5/14/2028 | | | 366,056 | | | | 365,561 | | | | 367,429 | |
Connect Finco SARL | | Telecommunications | | Term Loan B (03/24) | | Loan | | 1M USD SOFR+ | | | 4.50 | % | | | 0.50 | % | | | 9.07 | % | | 9/27/2029 | | | 2,873,063 | | | | 2,804,916 | | | | 2,480,401 | |
Consolidated Communications, Inc. | | Telecommunications | | Term Loan B | | Loan | | 1M USD SOFR+ | | | 3.50 | % | | | 0.75 | % | | | 8.19 | % | | 10/2/2027 | | | 2,714,005 | | | | 2,581,960 | | | | 2,688,900 | |
Saratoga Investment Corp. CLO 2013-1, Ltd.
Schedule of Investments
November 30, 2024
(unaudited)
Issuer Name | | Industry | | Asset Name | | Asset Type | | Reference Rate/Spread | | SOFR/LIBOR Floor | | | Current Rate (All In) | | | Maturity Date | | Principal/ Number of Shares | | | Cost | | | Fair Value | |
CORAL-US CO-BORROWER LLC | | Telecommunications | | Term Loan B-5 | | Loan | | 3M USD SOFR+ | | | 2.25 | % | | | 0.00 | % | | | 7.00 | % | | 1/31/2028 | | | 4,000,000 | | | | 3,992,430 | | | | 3,985,840 | |
Corelogic, Inc. | | Services: Business | | Term Loan (4/21) | | Loan | | 1M USD SOFR+ | | | 3.50 | % | | | 0.50 | % | | | 8.19 | % | | 6/2/2028 | | | 2,425,000 | | | | 2,418,601 | | | | 2,409,456 | |
Cortes NP Acquisition Corp (Vertiv) | | Capital Equipment | | Term Loan B (05/24) | | Loan | | 1M USD SOFR+ | | | 2.00 | % | | | 0.00 | % | | | 6.66 | % | | 3/2/2027 | | | 1,925,599 | | | | 1,925,599 | | | | 1,935,496 | |
Creative Artists Agency, LLC | | Media: Diversified & Production | | Term Loan B (09/24) | | Loan | | 1M USD SOFR+ | | | 2.75 | % | | | 0.00 | % | | | 7.32 | % | | 9/12/2031 | | | 1,576,094 | | | | 1,567,369 | | | | 1,584,857 | |
CROCS INC | | Consumer goods: Durable | | Term Loan B (01/24) | | Loan | | 1M USD SOFR+ | | | 2.25 | % | | | 0.50 | % | | | 6.82 | % | | 2/19/2029 | | | 862,500 | | | | 838,623 | | | | 866,571 | |
Cross Financial Corp | | Banking, Finance, Insurance & Real Estate | | Term Loan B2 (10/24) | | Loan | | 1M USD SOFR+ | | | 3.25 | % | | | 0.00 | % | | | 7.82 | % | | 10/24/2031 | | | 485,063 | | | | 483,806 | | | | 488,700 | |
Crown Subsea Communications Holding, Inc. | | Construction & Building | | Term Loan B | | Loan | | 1M USD SOFR+ | | | 4.00 | % | | | 0.75 | % | | | 8.57 | % | | 1/30/2031 | | | 2,394,000 | | | | 2,372,592 | | | | 2,422,441 | |
CTC Holdings, LP | | Banking, Finance, Insurance & Real Estate | | Term Loan (2/22) | | Loan | | 3M USD SOFR+ | | | 5.00 | % | | | 0.50 | % | | | 9.66 | % | | 2/15/2029 | | | 2,193,750 | | | | 2,155,366 | | | | 2,188,266 | |
CTS Midco, LLC | | High Tech Industries | | Term Loan B | | Loan | | 3M USD SOFR+ | | | 6.00 | % | | | 1.00 | % | | | 10.85 | % | | 11/2/2027 | | | 1,923,807 | | | | 1,896,277 | | | | 1,914,188 | |
Dave & Buster’s Inc. | | Hotel, Gaming & Leisure | | Term Loan B (1/24) | | Loan | | 1M USD SOFR+ | | | 3.25 | % | | | 0.50 | % | | | 7.94 | % | | 6/29/2029 | | | 762,038 | | | | 734,081 | | | | 763,806 | |
DCert Buyer, Inc. | | High Tech Industries | | Term Loan | | Loan | | 1M USD SOFR+ | | | 4.00 | % | | | 0.00 | % | | | 8.57 | % | | 10/16/2026 | | | 1,443,325 | | | | 1,443,325 | | | | 1,411,933 | |
Delek US Holdings, Inc. | | Utilities: Oil & Gas | | Term Loan B (11/22) | | Loan | | 1M USD SOFR+ | | | 3.50 | % | | | 0.50 | % | | | 8.17 | % | | 11/16/2029 | | | 5,305,500 | | | | 5,215,591 | | | | 5,306,985 | |
Derby Buyer LLC | | Chemicals, Plastics, & Rubber | | Term Loan (5/24) | | Loan | | 1M USD SOFR+ | | | 3.50 | % | | | 0.50 | % | | | 8.16 | % | | 11/1/2030 | | | 621,875 | | | | 613,650 | | | | 623,622 | |
DexKo Global, Inc. (Dragon Merger) | | Automotive | | Term Loan (9/21) | | Loan | | 3M USD SOFR+ | | | 3.75 | % | | | 0.50 | % | | | 8.62 | % | | 10/4/2028 | | | 975,000 | | | | 972,491 | | | | 915,018 | |
Diamond Sports Group, LLC | | Media: Broadcasting & Subscription | | 1st Priority Term Loan | | Loan | | 1M USD SOFR+ | | | 10.00 | % | | | 1.00 | % | | | 14.77 | % | | 5/25/2026 | | | 35,166 | | | | 34,709 | | | | 30,038 | |
DIRECTV FINANCING, LLC | | Media: Broadcasting & Subscription | | Term Loan (1/24) | | Loan | | 3M USD SOFR+ | | | 5.25 | % | | | 0.75 | % | | | 10.10 | % | | 8/2/2029 | | | 2,974,675 | | | | 2,957,251 | | | | 2,929,728 | |
DISCOVERY PURCHASER CORPORATION | | Chemicals, Plastics, & Rubber | | Term Loan | | Loan | | 3M USD SOFR+ | | | 4.38 | % | | | 0.50 | % | | | 8.95 | % | | 10/4/2029 | | | 1,473,918 | | | | 1,383,648 | | | | 1,481,081 | |
Saratoga Investment Corp. CLO 2013-1, Ltd.
Schedule of Investments
November 30, 2024
(unaudited)
Issuer Name | | Industry | | Asset Name | | Asset Type | | Reference Rate/Spread | | SOFR/LIBOR Floor | | | Current Rate (All In) | | | Maturity Date | | Principal/ Number of Shares | | | Cost | | | Fair Value | |
Dispatch Acquisition Holdings, LLC | | Environmental Industries | | Term Loan B (3/21) | | Loan | | 3M USD SOFR+ | | | 4.25 | % | | | 0.75 | % | | | 9.00 | % | | 3/25/2028 | | | 483,750 | | | | 481,157 | | | | 460,873 | |
DOMTAR CORPORATION | | Forest Products & Paper | | Term Loan 9/21 | | Loan | | 1M USD SOFR+ | | | 5.50 | % | | | 0.75 | % | | | 10.19 | % | | 11/30/2028 | | | 3,114,554 | | | | 3,067,307 | | | | 3,000,344 | |
DOTDASH MEREDITH, INC. | | Media: Advertising, Printing & Publishing | | Term Loan B | | Loan | | 1M USD SOFR+ | | | 3.50 | % | | | 0.50 | % | | | 8.17 | % | | 12/1/2028 | | | 1,911,111 | | | | 1,770,962 | | | | 1,923,056 | |
DRI HOLDING INC. | | Media: Advertising, Printing & Publishing | | Term Loan (12/21) | | Loan | | 1M USD SOFR+ | | | 5.25 | % | | | 0.50 | % | | | 10.04 | % | | 12/15/2028 | | | 3,902,444 | | | | 3,794,546 | | | | 3,767,809 | |
DRW Holdings, LLC | | Banking, Finance, Insurance & Real Estate | | Term Loan B (06/24) | | Loan | | 6M USD SOFR+ | | | 3.50 | % | | | 0.00 | % | | | 8.59 | % | | 6/17/2031 | | | 6,305,000 | | | | 6,278,762 | | | | 6,312,881 | |
DTZ U.S. Borrower, LLC | | Construction & Building | | 2024-3 Term Loan (09/24) | | Loan | | 1M USD SOFR+ | | | 3.25 | % | | | 0.50 | % | | | 7.82 | % | | 1/31/2030 | | | 1,097,250 | | | | 1,074,013 | | | | 1,097,250 | |
DTZ U.S. Borrower, LLC | | Construction & Building | | Term Loan B1 (06/24) | | Loan | | 1M USD SOFR+ | | | 3.00 | % | | | 0.50 | % | | | 7.57 | % | | 1/31/2030 | | | 2,014,107 | | |